Author: Michelle Dryden

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Hudson reports second quarter 2020 results

Reopened Over 200 Stores To-Date in Phased Approach

Reduction in Force Implemented to Help Offset Impact of Reduced Traveler Volumes

EAST RUTHERFORD, N.J.–(BUSINESS WIRE)–Hudson (NYSE: HUD), a North American travel experience leader with more than 1,000 stores in airports, commuter hubs, landmarks and tourist destinations, announced today its results for the second quarter ended June 30, 2020.

COVID-19-related concerns, event cancellations and business and government-imposed restrictions led to a reduction in passenger travel beginning at the end of the first quarter of 2020 and continuing into the second quarter at an accelerated pace, which has resulted in significantly reduced customer traffic and spending across Hudson’s retail stores in North America.

In order to preserve liquidity, the Company implemented a number of cost savings actions beginning in March, including temporarily closing over 700 stores and furloughing a majority of its workforce, implementing salary and other expense reductions, and pursuing negotiations with landlords to abate or defer rents. Additionally, to ensure the health and safety of its team members and customers, Hudson’s internal Emergency Response Team provided frontline team members with personal protective equipment (“PPE”) required during shifts, implemented temperature check protocol before shifts, developed enhanced store cleaning protocols, expanded ‘Tap to Pay’ capabilities, installed Plexiglas shields, and implemented standardized social distancing decals and guidelines.

Beginning in mid-May, as stay-at-home restrictions were lifted in certain areas, airlines added additional flights, and passenger travel started to gradually increase in airports and commuter hubs, Hudson slowly began reopening stores and bringing back a number of furloughed team members. Working in close partnership with airports and other landlords to best serve the needs of both travelers and airport/commuter hub workers, the Company has reopened over 200 stores as of July 31, 2020, bringing the Company’s total open store count to approximately 450. However, passenger volumes are still significantly below prior year levels, the closure of the U.S./Canada border has been extended, and recent increases in COVID-19 cases across various parts of the U.S. have led to new travel restrictions and quarantines, all resulting in reduced traffic and significant variability in day to day traveler volume. While U.S. passenger levels have increased sequentially in the months of May and June, volumes were still down approximately 75% from prior year levels in the last few weeks of July.

The current state of the overall North American and global travel industry and uncertainty around future developments relating to COVID-19, including a possible “second wave” of infections, has led to the Company’s decision to implement a reduction in workforce. This involves permanent lay-offs of nearly 40% of the Company’s team members consisting of both corporate and field staff across the organization, effective as of July 31, 2020. Alongside the reduction in force, the furlough period for several hundred of our team members was extended, with the expectation that some or all of these individuals will be called back as business recovers. Team members were notified on a one-on-one basis, and the Company is also working closely with its union partners to effect these changes. Hudson believes the workforce reductions, extended furloughs, and other cost saving actions detailed above will better align its cost structure with the conditions of the travel industry today.

The Company recorded a charge of $8.6 million in the second quarter related to this business alignment. Hudson expects the reduction in force to reduce personnel expenses by approximately $140 to $160 million on an annualized basis.

“The COVID-19 pandemic has had an unprecedented impact on world travel, and a corresponding impact on our travel retail business. While we took proactive and targeted actions beginning in March to significantly reduce expenses across the Company, we determined that more structural and wide-ranging actions were necessary. Our reduction in force is a difficult but essential step in ensuring the long-term success of our business,” stated Roger Fordyce, CEO of Hudson. “I would like to express my heartfelt appreciation to those team members impacted by this decision for their service to Hudson. The Company we are today would not be possible without the contributions and dedication of these individuals and they will always be a part of our storied history.”

Hudson believes that based on the actions outlined above, along with its existing cash balances, operating cash flows and long-term financing arrangements with the Dufry AG Group, its controlling shareholder, the Company has adequate funds to support its revised operating plan, make necessary capital expenditures and fulfill debt service requirements for the foreseeable future.

Ongoing Strategic Initiatives

While business recovery is paramount, the Company’s strategy remains intact to serve as the all-encompassing travel partner, focusing on its four key pillars: travel convenience, specialty retail, duty free, and food and beverage.

To adapt to new traveler expectations in the COVID-19 environment, Hudson continues to further evolve its digital footprint with contactless shopping experiences, and provide 24/7 access to health and safety supplies. Below is an update on several recently announced strategic initiatives:

  • PPE Vending Machines and Proprietary PPE Line – Hudson has begun to roll out PPE Vending Machines in airports across North America, featuring proprietary health and safety offerings as well as electronic essentials. The “Traveler’s Best” PPE line can also be found in Hudson’s travel convenience stores.
  • Sunglass Hut Boutiques – Partnering with Luxottica Group, a leader in premium eyewear, Hudson will begin opening Sunglass Hut shop-in-shops within its travel convenience stores, featuring the Ray-Ban and Oakley brands. The first ten shops will be opened in early August, with a phased opening approach continuing into 2022 for up to 250 shop-in-shops.
  • Expanded Grab & Go Offerings – Hudson is expanding its Grab & Go offerings to meet the needs of travelers who have fewer food and beverage options both in airports and on planes.
  • Self-Checkout – Hudson is continuing to expand self-checkout capabilities in a number of its stores to minimize contact and speed checkout.

Mr. Fordyce concluded, “Over the past few months, we’ve taken strategic, ongoing actions to prioritize the health and safety of our team members and customers, maximize operational efficiency, and conserve cash, all of which we believe will allow Hudson to successfully navigate the short-term and long-term effects of this pandemic and execute a successful business recovery. In spite of the challenges faced, our Hudson team has continued to be the Traveler’s Best Friend for the travelers and essential personnel still present in our locations, and we are extremely grateful for their service and dedication. While acknowledging the uncertain environment, we believe the strength and experience of our team combined with the resiliency of our business model, position us well for the eventual rebound of travel.”

Second Quarter 2020 Financial Statement Impacts Related to COVID-19

The effects of COVID-19 resulted in the following significant financial statement impacts during the second quarter:

  • Recorded $42.6 million of rent waivers as a result of rent payment waivers received from numerous landlords.
  • Recorded $8.6 million of restructuring expense related to the reduction in force.
  • Recorded $4.5 million in employee retention credits from the U.S. Government (Coronavirus Aid, Relief, and Economic Security “CARES” Act) and subsidies from the Canadian Government (Canada Emergency Wage Subsidy “CEWS” program), both of which offset wage expense for team members impacted by COVID-19 and the Company’s benefit costs for furloughed team members.
  • Recorded non-cash impairments of $6.0 million to property, plant and equipment and $3.7 million to right-of-use assets.

Second Quarter 2020 Review (all metrics compared to the 2019 second quarter, unless otherwise noted)

Income Statement

  • Turnover decreased by 87.9% to $61.7 million, due to the impact of COVID-19 and the resulting reduction in travel and store closures.
    • Net sales declined by 88.4% to $57.7 million.
    • Organic net sales, which is a combination of like-for-like net sales and net new business and expansions, declined by 88.5% to $57.3 million.
    • Like-for-like sales decreased by 82.0% (81.9% in constant currency) to $53.1 million.
  • Gross profit decreased by $289.5 million or 88.4% to $38.0 million, reflecting the reduction in sales. Gross margin decreased to 61.6% from 64.2% in the prior year period, primarily due to higher promotional activity on luxury merchandise.
  • Lease expenses decreased by $69.1 million, resulting in lease income for the quarter of $32.2 million, reflecting lower variable rent based on the decline in sales, and rent waivers of $42.6 million received from numerous airports and commuter terminals. As the COVID-19 pandemic continues to impact customer traffic and sales, we continue to negotiate new and extended rent relief with our landlords.
  • Personnel expenses decreased by $66.6 million or 61.3% to $42.0 million, primarily driven by the expense reduction actions taken in response to the COVID-19 pandemic and $4.5 million in employee retention credits from the U.S. CARES Act and subsidies from the Canadian CEWS program. Personnel expenses also included $8.6 million of restructuring expense due to the reduction in force. Personnel expenses as a percentage of turnover increased to 68.1% from 21.3%, due to the significantly lower sales volume.
  • Other expenses decreased by $22.1 million or 52.5% to $20.0 million, primarily related to a reduction in variable selling expenses due to the sales decline and our expense management initiatives. As a percentage of turnover, other expenses were 32.4%, compared to 8.3% in the prior year period, due to the significantly lower sales volume.
  • Other income, which had previously been included in Other Expenses, decreased by $1.4 million to $2.0 million. This line item consists of sales related income, franchise and management fee income, and other operational income.
  • Adjusted EBITDA decreased by $132.3 million to $(61.7) million.
  • Depreciation, amortization and impairment increased by $8.8 million to $98.2 million. The increase was primarily due to a non-cash charge of $9.7 million related to impairments to property, plant and equipment and right-of-use assets, reflecting a reduction in forecasted cash flow due to the impact of COVID-19.
  • Operating profit (loss) was a loss of $88.0 million compared to a profit of $53.9 million.
  • Reported net profit (loss) to equity holders of the parent was a loss of $79.0 million compared to a profit of $12.8 million, and reported diluted earnings per share was a loss per share of $0.85 compared to a profit per share of $0.14.
  • Adjusted net profit (loss) attributable to equity holders of the parent was a loss of $59.0 million compared to a profit of $20.6 million, while adjusted diluted loss per share was $0.63 compared to a profit per share of $0.22 in the prior year quarter.

Balance Sheet and Cash Flow

  • Cash flows from operating activities for the six months ended June 30, 2020 were $13.9 million compared to $274.6 million in the prior year period. The decrease is primarily due to the decline in operating performance related to COVID-19 and the timing of cash payments for accounts payable and other liabilities.
  • At June 30, 2020, the Company’s adjusted net debt (total borrowings excluding lease obligations minus cash) was $340.1 million, compared to $315.4 million at March 31, 2020.
  • Hudson reduced its cash usage to $21.1 million in the second quarter of 2020 from $92.4 million in the first quarter of 2020, driven by the Company’s cost reduction initiatives and rent deferrals.
  • Capital expenditures in the first half of 2020 were $27.2 million compared to $35.2 million in the prior year period.

Operational Update

Hudson has 1,010 stores across 87 locations in North America.

Earnings Conference Call Information

Hudson will host a conference call to review its second quarter 2020 financial performance today, August 3, at 10:00 a.m. ET. Participants can pre-register for the call at the following link: http://dpregister.com/10145976.

The conference call also will be available in live, listen-only mode using the following link: https://services.choruscall.com/links/hson200803.html

To participate in the live call, interested parties may dial 1-833-255-2832 (toll free) or 1-412-902-6725.

A replay of the call will be available for three months following the call at https://services.choruscall.com/links/hson200803.html.

Website Information

We routinely post important information for investors on the Investor Relations section of our website, investors.hudsongroup.com. We intend to use this website as a means of disclosing material information. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

Non-IFRS and Other Measures

Adjusted EBITDA is a non-IFRS measure and is not a uniformly or legally defined financial measure. Adjusted EBITDA is not a substitute for IFRS measures in assessing our overall financial performance. Because adjusted EBITDA is not determined in accordance with IFRS, and is susceptible to varying calculations, adjusted EBITDA may not be comparable to other similarly titled measures presented by other companies. We believe that adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We also believe adjusted EBITDA is useful to investors as a measure of comparative operating performance from period to period as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure (primarily interest expense), asset base (depreciation and amortization), charges related to right of use assets, and non-recurring transactions, impairments of financial assets and changes in provisions (primarily relating to costs associated with the closing or restructuring of our operations). Our management also uses adjusted EBITDA for planning purposes, including financial projections. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by IASB. A reconciliation of adjusted EBITDA to net profit is provided in the attached schedules.

Adjusted net profit (loss) attributable to equity holders of parent is a non-IFRS measure. We define adjusted net profit (loss) attributable to equity holders of parent as net profit attributable to equity holders of parent adjusted for the items set forth in the table below. Adjusted net profit (loss) attributable to equity holders of parent is a non-IFRS measure and is not a uniformly or legally defined financial measure. Adjusted net profit (loss) attributable to equity holders of parent is not a substitute for IFRS measures in assessing our overall operating performance. Because adjusted net profit (loss) attributable to equity holders of parent is not determined in accordance with IFRS, and is susceptible to varying calculations, adjusted net profit (loss) attributable to equity holders of parent may not be comparable to other similarly titled measures presented by other companies. Adjusted net profit (loss) attributable to equity holders of parent is included in this press release because it is a measure of our operating performance and we believe that adjusted net profit attributable to equity holders of parent is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We also believe adjusted net profit (loss) attributable to equity holders of parent is useful to investors as a measure of comparative operating performance from period to period as it removes the effects of purchase accounting for acquired intangible assets (primarily concessions), non-recurring transactions, impairments of assets, one-off tax items, changes in provisions (primarily relating to costs associated with the closing or restructuring of our operations), and tax adjustments where applicable. Management does not consider such costs for the purpose of evaluating the performance of the business and as a result uses adjusted net profit (loss) attributable to equity holders of parent for planning purposes. Adjusted net profit (loss) attributable to equity holders of parent has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by IASB. A reconciliation of adjusted net profit (loss) attributable to equity holders of parent to net profit attributable to equity holders of parent is provided in the attached schedules.

Organic net sales growth represents the combination of growth in aggregate monthly sales from (i) like-for-like net sales growth and (ii) net new business and expansions. Like-for-like growth represents the growth in aggregate monthly net sales in the applicable period at stores that have been operating for at least 12 months. Like-for-like growth excludes growth attributable to (i) net new business and expansions until such stores have been part of our business for at least 12 months and (ii) acquired stores until such stores have been part of our business for at least 12 months. Net new business and expansions consists of growth from (i) changes in the total number of our stores (other than acquired stores), (ii) changes in the retail space of our existing stores and (iii) modification of store retail concepts through rebranding. Net new business and expansions excludes growth attributable to acquired stores until such stores have been part of our business for at least 12 months. Like-for-like growth in constant currency is calculated by keeping exchange rates constant for each month being compared from period to period. We believe that the presentation of like-for-like growth in constant currency basis assists investors in comparing period to period operating results as it removes the effect of fluctuations in foreign exchange rates.

About Hudson

Hudson, a Dufry Company, is a travel experience company turning the world of travel into a world of opportunity by being the Traveler’s Best Friend in more than 1,000 stores in airport, commuter hub, landmark, and tourist locations. Our team members care for travelers as friends at our travel convenience, specialty retail, duty free and food and beverage destinations. At the intersection of travel and retail, we partner with landlords and vendors, and take innovative, commercial approaches to deliver exceptional value. To learn more about how we can make your location a travel destination, please visit us at hudsongroup.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Forward-looking statements are based on our beliefs and assumptions and on information currently available to us, and include, without limitation, statements regarding our business, financial condition, strategy, results of operations, certain of our plans, objectives, assumptions, expectations, prospects and beliefs, the effects of the novel coronavirus (COVID-19) on the demand for air and other travel, our supply chain, as well as the impact on our business, financial condition and results of operations and statements regarding other future events or prospects. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “seek,” “anticipate,” “estimate,” “predict,” “potential,” “assume,” “continue,” “may,” “will,” “should,” “could,” “shall,” “risk” or the negative of these terms or similar expressions that are predictions of or indicate future events and future trends. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, the development of the industry in which we operate and the effect of acquisitions on us may differ materially from those made in or suggested by the forward looking statements contained in this press release. In addition, even if our results of operations, financial condition and liquidity, the development of the industry in which we operate and the effect of acquisitions on us are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events. Factors that may cause our actual results to differ materially from those expressed or implied by the forward-looking statements in this press release, or that may impact our business and results more generally, include, but are not limited to, the risks described under “Item 3. Key Information—D. Risk factors” of our Annual Report on Form 20-F for the year ended December 31, 2019 which may be accessed through the SEC’s website at https://www.sec.gov/edgar. You should read these risk factors before making an investment in our shares.

INTERIM CONSOLIDATED Table 1
INCOME
STATEMENT
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2020 (UNAUDITED)

QUARTER ENDED

QUARTER ENDED

SIX MONTHS ENDED

SIX MONTHS ENDED

IN MILLIONS OF USD (EXCEPT PER SHARE DATA)

6/30/2020

6/30/2019 (1)

6/30/2020

6/30/2019 (1)

Turnover

61.7

509.9

403.2

954.9

Cost of sales

(23.7

)

(182.4

)

(151.9

)

(343.6

)
Gross profit

38.0

327.5

251.3

611.3
Lease (expenses) income

32.2

(36.9

)

18.7

(64.6

)
Personnel expenses

(42.0

)

(108.6

)

(138.7

)

(223.6

)
Other expenses

(20.0

)

(42.1

)

(57.3

)

(82.2

)
Other income (2)

2.0

3.4

4.5

6.1

Depreciation, amortization and impairment

(98.2

)

(89.4

)

(242.8

)

(178.0

)
Operating profit (loss) (EBIT)

(88.0

)

53.9

(164.3

)

69.0

Finance income

0.1

1.3

1.1

2.4

Finance expenses

(22.5

)

(21.1

)

(44.8

)

(43.0

)
Foreign exchange gain (loss)

(0.1

)

(0.3

)

(0.1

)

–

Profit (loss) before taxes (EBT)

(110.5

)

33.8

(208.1

)

28.4

Income tax benefit (expense)

22.5

(9.9

)

41.4

(4.5

)
Net profit (loss)

(88.0

)

23.9

(166.7

)

23.9

NET PROFIT (LOSS) ATTRIBUTABLE TO
Equity holders of the parent

(79.0

)

12.8

(156.2

)

7.0

Non-controlling interests

(9.0

)

11.1

(10.5

)

16.9

EARNINGS (LOSS) PER SHARE
Basic

(0.85

)

0.14

(1.69

)

0.08

Diluted

(0.85

)

0.14

(1.69

)

0.08

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (000’s)
Basic

92,438

92,374

92,416

92,392

Diluted

93,056

92,782

93,034

92,800

(1)

The amounts presented for the three and six month periods ended June 30, 2019 differ from the information reported in the interim consolidated financial statements for the three and six month periods ended June 30, 2019 due to correction of an error identified in the accounting adopted on transition to IFRS 16 Leases. For details, please refer to the Company’s interim consolidated financial statements for the nine months ended September 30, 2019 (note 2.2)

(2)

The 2019 amounts were presented in Other expenses.

Contacts

Investor/Media Contact
Cindi Buckwalter

VP of Investor Relations & Corporate Communications

investorrelations@hudsongroup.com
communications@hudsongroup.com

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Categories
Business

SHI named one of Forbes’ Best Employers for Women 2020

SOMERSET, N.J.–(BUSINESS WIRE)–SHI International, one of North America’s largest IT solutions providers, has been recognized on Forbes’ list of America’s Best Employers for Women 2020. Presented by Forbes and Statista Inc., the awards list is based on an independent survey of over 75,000 U.S. employees—45,000 of which were women—that focused on issues relevant to women in the workplace and was designed to shed light on their experiences.

The participants assessed their companies’ efforts in handling topics relevant to women, including discrimination, family support, flexibility, parental leave, pay equity, and representation and careers. Additionally, participants were asked to evaluate other employers in their respective industries that stand out either positively or negatively on gender issues, from which only the recommendations of women were considered.

SHI, as the largest minority woman-owned business in the U.S., has long supported programs that empower women in the workplace. SHI’s employees founded WiSH (Women in SHI), an organization that aims to connect and celebrate the diversity of women in technology. Its series of events connects SHI employees, partners, and customers, and supports initiatives to foster a workplace built on diversity, inclusion, and equality.

“We’re grateful that women at SHI and across the industry view us as an ally in their careers and their desire for work-life balance,” said Thai Lee, President and CEO of SHI. “The heart of SHI has always been our employees, and so we take special care to ensure they have the time, space, and opportunities to grow and succeed over a long career with SHI.”

Learn more about the recognition and see a full list of America’s Best Employers for Women 2020.

ABOUT SHI

Founded in 1989, SHI International Corp. is an $11 billion global provider of technology products and services. Driven by the industry’s most experienced and stable sales force and backed by software volume licensing experts, hardware procurement specialists, and certified IT services professionals, SHI delivers custom IT solutions to Corporate, Enterprise, Public Sector, and Academic customers. With over 5,000 employees worldwide, SHI is the largest Minority and Woman Owned Business Enterprise (MWBE) in the U.S. and is ranked 10th among CRN’s Solution Provider 500 list of North American IT solution providers. For more information, visit https://www.SHI.com.

Press Resources

SHI Corporate Website: http://www.SHI.com
SHI Blog: http://blog.SHI.com
SHI Twitter Handle: @SHI_Intl

Contacts

For SHI International:

Gregory FCA

Matt McLoughlin

610.228.2123

Matt@GregoryFCA.com

 

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Business

AM Best assigns Issuer Credit Rating to LRG (US), Inc.

OLDWICK, N.J.–(BUSINESS WIRE)–AM Best has assigned a Long-Term Issuer Credit Rating of “a” to LRG (US), Inc. (Delaware). The outlook assigned to this Credit Rating (rating) is stable. LRG (US), Inc. is the intermediate holding company of London Life International Reinsurance Corporation (LLIRC) and Canada Life Reinsurance Company (CLRC), which are members of the The Canada Life Assurance Company rating unit.

LRG (US), Inc. and its subsidiaries are members of the Great-West Lifeco Inc. group of companies; their direct parent is Canada Life Assurance Company, a leading Canada-based life insurer. LLIRC and CLRC are composite reinsurers licensed to write life reinsurance, accident and health reinsurance, annuity reinsurance and property and casualty reinsurance business, but are utilized primarily for life reinsurance for affiliated entities. LRG (US), Inc. will be utilized to strengthen the capital position of LLIRC to support its business plans.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media – Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Anthony McSwieney
Senior Financial Analyst
+1 908 439 2200, ext. 5715
anthony.mcwieney@ambest.com

Michael Adams
Associate Director
+1 908 439 2200, ext. 5133
michael.adams@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

Categories
Business

Church & Dwight reports Q2 results

2020 Second Quarter Results

  • Sales growth +10.6%: Dom. +13.6%; Int’l +0.5%; SPD +3.0%
  • Organic sales +8.4%: Dom. +10.7%; Int’l +0.6%; SPD +3.0%
  • Gross Margin +220 bps. to 46.8%
  • EPS +36.4%; Adjusted EPS +35.1%
  • YTD Cash from Operations +70%; Ex tax deferral +47%

2020 Full Year Outlook Raised from Original Outlook

  • Reported Sales growth raised to 9-10% (initially 6.5%)
  • Organic Sales growth raised to 7-8% (initially 3.5%)
  • Adjusted EPS growth raised to 13% (initially 7 to 9%)1
  • Cash from Operations raised to $960MM (initially $890MM)

EWING, N.J.–(BUSINESS WIRE)–Church & Dwight Co., Inc. (NYSE: CHD) today announced reported second quarter 2020 EPS of $0.75, a 36.4% increase versus year ago. Adjusted EPS, which excludes an acquisition related earn-out adjustment, grew 35.1% to $0.77.2

Second quarter net sales grew 10.6% to $1,194.3 million. The Company continued to experience a significant increase in consumer demand for many of its products, primarily in response to the COVID-19 pandemic. Organic sales grew 8.4% driven by a volume increase of 4.9% and positive product mix and pricing of 3.5%. Organic sales growth was driven by higher consumption, lower couponing, and restocking of retailer inventories.

Matthew Farrell, Chief Executive Officer, commented, “Q2 was an extraordinarily strong quarter for Church & Dwight. Both our household and personal care businesses delivered higher growth as consumers and retailers focused on core essentials. We experienced strong consumption in Q2 and continue to see similar strength in July. The pandemic drove double digit consumption growth in several domestic categories, especially gummy vitamins, women’s hair removal, cleaners, and baking soda while restrictions on consumer mobility drove double-digit declines in other domestic categories, notably condoms, dry shampoo, and water flossers. Year-to-date shipments and consumption are in balance for our brands. However, retailer in-stocks lag normal levels for some brands, including gummy vitamins, baking soda, and cleaners. Online sales as a percentage of total sales continued to grow rapidly and reached 13% of sales in Q2. The International business grew slightly despite the global COVID-19 pandemic. SPD recorded its third consecutive quarter of organic growth as demand for our non-dairy products grew in both domestic and international markets.

“In this unusual time, our focus is on the safety of our employees, meeting the needs of our customers and consumers, and ensuring our brands are even stronger moving forward. I want to again thank Church & Dwight employees around the world for their dedication to keeping our Company going during the pandemic, especially our manufacturing and distribution employees and lab technicians.”

Second Quarter Review

Consumer Domestic net sales were $931.1 million, a $111.8 million or 13.6% increase driven by household and personal care sales growth and the FLAWLESS® acquisition. Organic sales increased 10.7% due to higher volume (+6.3%) and positive price and product mix (+4.4%). Contributing to the sales increase was strong consumption, restocking retailer inventories, and lower couponing. Organic sales growth was led by ARM & HAMMER® liquid laundry detergent, VITAFUSION® and L’IL CRITTERS® gummy vitamins, ARM & HAMMER clumping cat litter and baking soda, OXICLEAN® stain fighters, ARM & HAMMER laundry detergent scent boosters, and FLAWLESS® women’s hair removal.

Consumer International net sales were $187.5 million, a $0.9 million or 0.5% increase versus the prior year. Organic sales increased 0.6% due to positive price and product mix (+1.3%) offset by lower volume (-0.7%). Organic sales growth was driven primarily by the Global Markets Group, offset by declines in Europe and Mexico.

Specialty Products net sales were $75.7 million, a $2.2 million or 3.0% increase. Organic sales increased 3.0% due to higher volume (+3.3%) offset by lower pricing (-0.3%). Milk prices have returned to pre-COVID-19 pandemic levels and demand from dairy customers is expected to strengthen in the second half. Demand for prebiotic and probiotic products continues to grow in the poultry industry.

Gross margin increased 220 basis points to 46.8% due to higher pricing including a significant reduction in trade promotions and couponing, and productivity improvements, partially offset by significant COVID-19 pandemic related expenses including higher manufacturing costs due to outsourcing, and foreign exchange.

Marketing expense was $122.3 million, a decrease of $6.8 million or 5.3%. Marketing expense as a percentage of net sales decreased 180 basis points to 10.2%. Due to retailer out of stocks, marketing spend was significantly reduced.

Selling, general, and administrative expense (SG&A) was $186.6 million or 15.6% of net sales, a 30 basis point increase, primarily due to higher compensation, intangible amortization related to acquisitions, and investments in R&D and IT.

Income from Operations was $250.7 million or 21.0% of net sales.

Other Expense of $14.7 million declined slightly due to lower interest expense resulting from lower interest rates.

The effective tax rate was 19.6% compared to 18.7% in 2019, an increase of 90 basis points, primarily driven by lower tax benefits related to stock option exercises.

Operating Cash Flow

Cash flow was exceptionally strong. The borrowing on the revolving credit line that was accessed in Q1 during the early days of the COVID-19 pandemic was completely repaid in Q2. For the first six months of 2020, cash from operating activities increased 70.4% to $598.6 million, a $247.4 million increase from the prior year due to significantly higher cash earnings and a decrease in working capital. In accordance with IRS guidelines, the Company elected to defer $81 million of U.S. Federal income tax payments to July which contributed to the significant increase in cash flow. Capital expenditures for the first six months were $30.9 million, a $7.3 million increase from the prior year. We now expect full year capex spending to be approximately $100 million (initially $85 million), reflecting plans for expansion in manufacturing capacity for laundry, litter, and vitamins.

At June 30, 2020, cash on hand was $451.7 million, while total debt was $1,877.2 million.

2020 New Products

Mr. Farrell commented, “Innovation will continue to be a big driver of our success. Church and Dwight will continue to invest in new products and R&D to drive long-term revenue and earnings growth. We continue to be excited about this year’s new product launches.

“In the household products portfolio, we launched a new ARM & HAMMER laundry detergent called CLEAN & SIMPLE™ which has only 6 ingredients plus water (compared to 15 to 30 ingredients for the typical liquid detergent), provides no compromise on efficacy, and cleaning power comparable to our bestselling consumer favorite – ARM & HAMMER with OXICLEAN. CLEAN & SIMPLE is on trend with consumers’ desire for ‘better for me’ products, which are simple and have fewer ingredients. The advertising and trade support for the CLEAN & SIMPLE launch has been shifted entirely to the second half.

“In July, ARM & HAMMER clumping cat litter launched CLUMP & SEAL ABSORBx™, a first of its kind revolutionary new litter made from DESERT DRY MINERALS™. It rapidly absorbs wetness in seconds to form rock hard clumps. The 100% dust free litter is guaranteed to trap and seal odors. ABSORBx is 55% lighter than our regular litter.

“In the personal care portfolio, BATISTE® has launched a line of waterless cleansing foam for normal, dry, and curly hair. The weightless foam dries in 60 seconds and delivers an instant refresh for hair that looks revived, feels soft and smells amazing. We have launched TROJAN G SPOT™, a condom featuring a unique shape for targeted stimulation. FLAWLESS has launched NU RAZOR™, a waterless whole-body hair removal product for women to use anywhere, anytime. WATERPIK® is in the second year of the SONIC FUSION® launch, the world’s first flossing toothbrush combining the convenience of a sonic toothbrush with a water flosser in a single device. In the second quarter, we launched WATERPIK WATER FOR WELLNESS® showerheads across the power pulse product line, incorporating our FDA registered therapeutic massage technology that provides clinically proven results to help soothe muscle tension, increase flexibility, and promote restful sleep. VITAFUSION gummy vitamins launched a number of new products including Triple Immune Power, Apple Cider Vinegar, Organic Prenatal Multi, and IRRESISTIBLE SKIN™. In Q3, VITAFUSION will continue to capitalize on increased consumer interest in immunity products with the launch of POWER ZINC™ and Elderberry gummies in both adult and kids variants.”

Outlook for 2020

Mr. Farrell stated, “The Company is well positioned for the current economic environment, due to a combination of being in the right categories and having a balance of value and premium brands.

“With seven months behind us, we are re-instating our 2020 sales and EPS outlook. However, due to volatility in consumer demand, supply constraints, and uncertainty regarding a COVID-19 resurgence, we will not provide a quarterly financial outlook.

“Given our strong first half performance, we have raised our full year outlook for sales and EPS. We now expect approximately 9-10% full year 2020 sales growth (initial outlook 6.5%) and approximately 7-8% organic sales growth (initially 3.5%). Adjusted EPS growth is expected to be 13% (initially 7 to 9%).1 This implies a front-end loaded year and flat EPS in the second half as the Company has higher amounts of trade promotions and advertising dollars in the second half in support of new products. Gross margin is expected to decline in the second half due to new product promotional support, the year over year impact of FLAWLESS accounting, incremental manufacturing and distribution capacity investments, and higher tariffs on WATERPIK.

“In the second half, we intend to make incremental investments for surge capacity in manufacturing, R&D, new product development, consumer research, digital advertising, and predictive analytics. These investments are intended to position the Company for future growth.

“Our outlook will continue to adapt to the changing environment and as such, we may continue to defer trade, couponing and advertising until late in the second half or into next year depending on: (1) consumption trends, (2) a resurgence of COVID-19, and (3) supply constraints.”

1 This press release does not provide a forward-looking reconciliation of adjusted EPS to reported EPS, the most directly comparable GAAP financial measure, expected for 2020, because we are unable to provide such a reconciliation without unreasonable effort. We have excluded the Company’s potential earn-out liability from our acquisition of the FLAWLESS business from our expected adjusted EPS for these periods. We are required to review the fair value of the earn-out liability quarterly based on changes in sales forecasts, discount rates, volatility assumptions, and other inputs. Our inability to provide a reconciliation to GAAP EPS for future periods is due to the uncertainty and inherent difficulty of predicting what these changes will be on a quarter-by-quarter basis. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to our future results.

2 See non-GAAP reporting reconciliations.

Church & Dwight Co., Inc. will host a conference call to discuss second quarter 2020 earnings results on July 31, 2020 at 10:00 am (EDT). To participate, dial 877-322-9846 within the U.S. and Canada, or 631-291-4539 internationally, using access code 8495695. A replay will be available at 855-859-2056 using the same access code through the close of business on August 7, 2020. You also can participate via webcast by visiting the Investor Relations section of the Company’s website at www.churchdwight.com.

Church & Dwight Co., Inc. (NYSE: CHD) founded in 1846, is the leading U.S. producer of sodium bicarbonate, popularly known as baking soda. The Company manufactures and markets a wide range of personal care, household, and specialty products under recognized brand names such as ARM & HAMMER®, TROJAN®, OXICLEAN®, SPINBRUSH®, FIRST RESPONSE®, NAIR®, ORAJEL®, XTRA®, L’IL CRITTERS® and VITAFUSION®, BATISTE®, WATERPIK®, and FLAWLESS®. These twelve key brands represent approximately 85% of the Company’s products sales. For more information, visit the Company’s website.

Church & Dwight has a strong heritage of commitment to people and the planet. In the early 1900’s, we began using recycled paperboard for all packaging of household products. Today, virtually all our paperboard packaging is from certified, sustainable sources. In 1970, the ARM & HAMMER® brand introduced the first nationally-distributed, phosphate-free detergent. That same year, Church & Dwight was honored to be the sole corporate sponsor of the first annual Earth Day. Church & Dwight is notably ranked in the 2019 Barron’s 100 Most Sustainable Companies and on the EPA’s Green Power Partnership Top 100 List of Green Power Users.

For more information, see the Church & Dwight 2019 Sustainability Report at:

https://churchdwight.com/pdf/Sustainability/2019-Sustainability-Report.pdf

This press release contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; the impact of the COVID-19 pandemic and the Company’s response; gross margin changes; trade, marketing, and SG&A spending; sufficiency of cash flows from operations; earnings per share; cost savings programs; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the impact of acquisitions (including earn-outs); and capital expenditures. Other forward-looking statements in this release may be identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events); including those relating to the outbreak of contagious diseases; other impacts of the COVID-19 pandemic and its impact on the Company’s operations, customers, suppliers, employees, and other constituents, and market volatility and impact on the economy (including causing recessionary conditions), resulting from nationwide or local or regional outbreaks or increases in infections and the risk that the Company will not be able to successfully execute its response plans with respect to the pandemic or localized outbreaks and the corresponding uncertainty; the impact of regulatory changes or policies associated with the COVID-19 pandemic, including continuing or renewed shutdowns of retail and other businesses in various jurisdictions; the impact of the CARES Act and other governmental actions; unanticipated increases in raw material and energy prices; delays or other problems in manufacturing or distribution; increases in transportation costs; adverse developments affecting the financial condition of major customers and suppliers; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space of private label products; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; foreign currency exchange rate fluctuations; implications of the United Kingdom’s withdrawal from the European Union; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs, including the actual and potential effect of tariffs on Chinese goods imposed by the United States; issues relating to the Company’s information technology and controls; the impact of natural disasters on the Company and its customers and suppliers, including third party information technology service providers; the integration of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment.

For a description of additional factors that could cause actual results to differ materially from the forward-looking statements, please see Item 1A, “Risk Factors” in the Company’s annual report on Form 10-K and quarterly reports on Form 10Q. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the U.S. federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission.

This press release also contains non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of the Company’s financial performance, identifying trends in its results and providing meaningful period-to-period comparisons. The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the Company’s financial statements presented in accordance with GAAP.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

Six Months Ended

(In millions, except per share data)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net Sales

$

1,194.3

$

1,079.4

$

2,359.5

$

2,124.1

Cost of sales

634.7

597.9

1,267.9

1,171.8

Gross Profit

559.6

481.5

1,091.6

952.3

Marketing expenses

122.3

129.1

218.7

227.2

Selling, general and administrative expenses

186.6

165.0

307.6

296.9

Income from Operations

250.7

187.4

565.3

428.2

Equity in earnings of affiliates

2.0

1.7

3.6

3.4

Other income (expense), net

(16.7

)

(18.8

)

(33.5

)

(36.2

)

Income before Income Taxes

236.0

170.3

535.4

395.4

Income taxes

46.3

31.8

115.9

81.2

Net Income

$

189.7

$

138.5

$

419.5

$

314.2

Net Income per share – Basic

$

0.77

$

0.56

$

1.71

$

1.28

Net Income per share – Diluted

$

0.75

$

0.55

$

1.67

$

1.25

Dividends per share

$

0.24

$

0.23

$

0.48

$

0.45

Weighted average shares outstanding – Basic

246.2

246.4

245.9

246.2

Weighted average shares outstanding – Diluted

251.3

252.7

251.2

252.3

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions)

June 30, 2020

December 31, 2019

Assets

Current Assets

Cash and Cash Equivalents

$

451.7

$

155.7

Accounts Receivable

344.5

356.4

Inventories

455.5

417.4

Other Current Assets

25.0

26.9

Total Current Assets

1,276.7

956.4

Property, Plant and Equipment (Net)

568.7

573.0

Equity Investment in Affiliates

10.6

9.7

Trade Names and Other Intangibles

2,697.9

2,750.0

Goodwill

2,078.2

2,079.5

Other Long-Term Assets

286.9

288.8

Total Assets

$

6,919.0

$

6,657.4

Liabilities and Stockholders’ Equity

Short-Term Debt

$

65.8

$

252.9

Other Current Liabilities

930.8

839.4

Total Current Liabilities

996.6

1,092.3

Long-Term Debt

1,811.4

1,810.2

Other Long-Term Liabilities

1,112.2

1,087.1

Stockholders’ Equity

2,998.8

2,667.8

Total Liabilities and Stockholders’ Equity

$

6,919.0

$

6,657.4

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flow (Unaudited)

Six Months Ended

(Dollars in millions)

June 30, 2020

June 30, 2019

Net Income

$

419.5

$

314.2

Depreciation and amortization

92.4

82.9

Deferred income taxes

11.4

6.0

Non-cash compensation

15.8

15.0

Gain on sale of assets

(3.0

)

–

Other

0.7

1.7

Subtotal

536.8

419.8

Changes in assets and liabilities:

Accounts receivable

5.9

(37.3

)

Inventories

(42.7

)

(17.9

)

Other current assets

(2.1

)

0.9

Accounts payable and accrued expenses

35.8

6.7

Income taxes payable

87.1

(11.6

)

Change in fair value of business acquisition liabilities

(20.7

)

–

Other

(1.5

)

(9.4

)

Net cash from operating activities

598.6

351.2

Capital expenditures

(30.9

)

(23.6

)

Acquisitions

–

(475.0

)

Proceeds from sale of assets

7.0

–

Other

(2.5

)

(3.8

)

Net cash (used in) investing activities

(26.4

)

(502.4

)

Net change in short-term debt

(186.2

)

109.8

Payment of cash dividends

(118.1

)

(112.0

)

Proceeds from stock option exercises

44.9

37.0

Purchase of treasury stock

–

(100.0

)

Payment of contingent consideration

(14.5

)

–

Deferred financing and other

(0.1

)

(2.5

)

Net cash (used in) financing activities

(274.0

)

(67.7

)

F/X impact on cash

(2.2

)

0.1

Net change in cash and cash equivalents

$

296.0

$

(218.8

)

2020 and 2019 Product Line Net Sales

Three Months Ended

Percent

6/30/2020

6/30/2019

Change

Household Products

$

544.7

$

464.3

17.3

%

Personal Care Products

386.4

355.0

8.8

%

Consumer Domestic

$

931.1

$

819.3

13.6

%

Consumer International

187.5

186.6

0.5

%

Total Consumer Net Sales

$

1,118.6

$

1,005.9

11.2

%

Specialty Products Division

75.7

73.5

3.0

%

Total Net Sales

$

1,194.3

$

1,079.4

10.6

%

Six Months Ended

Percent

6/30/2020

6/30/2019

Change

Household Products

$

1,039.0

$

907.6

14.5

%

Personal Care Products

783.1

696.6

12.4

%

Consumer Domestic

$

1,822.1

$

1,604.2

13.6

%

Consumer International

386.1

373.3

3.4

%

Total Consumer Net Sales

$

2,208.2

$

1,977.5

11.7

%

Specialty Products Division

151.3

146.6

3.2

%

Total Net Sales

$

2,359.5

$

2,124.1

11.1

%

Contacts

Rick Dierker

Chief Financial Officer

609-806-1200

Read full story here

Categories
Business

Majesco implements Oracle Cloud HCM to further its digital transformation journey

Leading cloud software company for insurance carriers improves organizational productivity and increases employee engagement

MORRISTOWN, N.J.–(BUSINESS WIRE)–Majesco, a global leader of cloud insurance software, today announced the implementation of Oracle Cloud HCM to help meet its long-term strategic and operational goals. With a growing customer list of more than 200 major clients across Product & Casualty, Life & Annuity and Group insurance, Majesco will use Oracle Cloud Human Capital Management (HCM) to make informed, real-time business decisions that will help expand its global footprint.

“We’re excited about the advanced capabilities Oracle Cloud HCM brings to our employees. This new, modern cloud system marks an important step in our transformation journey and will be critical to how we run our business,” notes Adam Elster, CEO of Majesco. “With Oracle HCM, we will leverage data-driven insights in real-time to help us manage all of our talent needs.”

Majesco’s cloud-based solutions help insurers modernize, innovate and transform their business to meet the demands of today’s digital customer. Whether it’s an insurer creating a new startup or greenfield, modernizing a legacy business or optimizing existing operations, Majesco helps insurers take on the future of insurance.

In order to meet growing demand, Majesco replaced its old legacy system with Oracle’s unified, cloud-based platform that is built to breakdown organizational silos, standardize processes and improve the overall efficiency of HR operations.

“We’re excited to have helped Majesco take this next step in the digital transformation journey by improving and maximizing employee engagement,” said Chris Leone, senior vice president, applications development, Oracle. “With Oracle Cloud HCM, Majesco will be better prepared to support its customers and take hold of this new era of insurance.”

In addition to Oracle Cloud HCM’s Core HR, which provides a foundation to support the entire worker life cycle, Majesco is also deploying Oracle Cloud Workforce Compensation and Oracle Cloud Recruitment, which leads with innovation to engage and identify the best talent for the organization’s needs.

“Oracle’s scalable and flexible solution provides our employees with an intuitive, personalized HR system that can manage personal and employment information easily and securely, while providing insights into the entire worker lifecycle to enable effective talent management,” commented Melissa Blankenbaker, CHRO of Majesco.

About Majesco

Majesco (NASDAQ: MJCO) provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business – and the future of insurance – at speed and scale. Our platforms connect people and businesses to insurance in ways that are innovative, hyper-relevant, compelling and personal. Over 200 insurance companies worldwide in P&C, L&A and Group Benefits are transforming their businesses by modernizing, optimizing or creating new business models with Majesco. Our market-leading solutions include CloudInsurer® P&C Core Suite (Policy, Billing, Claims); CloudInsurer® LifePlus Solutions (AdminPlus, AdvicePlus, IllustratePlus, DistributionPlus); CloudInsurer® L&A and Group Core Suite (Policy, Billing, Claims); Digital1st® Insurance with Digital1st® Engagement, Digital1st® EcoExchange and Digital1st® Platform – a cloud-native, microservices and open API platform; Distribution Management, Data and Analytics and an Enterprise Data Warehouse. For more details on Majesco, please visit www.majesco.com.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Majesco’s reports that it files from time to time with the Securities and Exchange Commission and which you should review, including those statements under “Item 1A – Risk Factors” in Majesco’s Annual Report on Form 10-K, as amended by its Quarterly Reports on Form 10-Q.

Important factors that could cause actual results to differ materially from those described in forward-looking statements contained in this press release include, but are not limited to: the adverse impact on economies around the world and our customers of the current COVID-19 pandemic; our ability to achieve increased market penetration for our product and service offerings and obtain new customers; our ability to raise future capital as needed; the growth prospects of the property & casualty and life & annuity insurance industry; the strength and potential of our technology platform and our ability to innovate and anticipate future customer needs; our ability to compete successfully against other providers and products; data privacy and cyber security risks; technological disruptions; our ability to successfully integrate our acquisitions and identify new acquisitions; the risk of loss of customers or strategic relationships; the success of our research and development investments; changes in economic conditions, political conditions and trade protection measures; regulatory and tax law changes; immigration risks; our ability to obtain, use or successfully integrate third-party licensed technology; key personnel risks; and litigation risks.

These forward-looking statements should not be relied upon as predictions of future events and Majesco cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by Majesco or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Majesco disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

Contacts

Laura Tillotson

Director, Marketing Communications and Creative Services

+ 201 230 0752

laura.tillotson@majesco.com

Categories
Business

B&G Foods reports strong net sales and earnings growth for second quarter 2020

— Net Cash Provided by Operating Activities Increased to $246.4 Million for the First Two Quarters of 2020 —

PARSIPPANY, N.J.–(BUSINESS WIRE)–B&G Foods, Inc. (NYSE: BGS) today announced financial results for the second quarter and first two quarters of 2020 and provided an update as to how the COVID-19 pandemic is impacting the Company.

Second Quarter 2020 Financial Summary (vs. Second Quarter 2019 where applicable):

  • Net sales increased 38.1% to $512.5 million
  • Base business net sales1 increased 33.9% to $496.9 million
  • Diluted earnings per share increased 150.0% to $0.70
  • Adjusted diluted earnings per share1 increased 86.8% to $0.71
  • Net income increased 146.1% to $44.9 million
  • Adjusted net income1 increased 87.6% to $46.0 million
  • Adjusted EBITDA1 increased 44.6% to $102.6 million
  • Net cash provided by operating activities for the first two quarters of 2020 increased to $246.4 million

“At B&G Foods we remain committed to the health and safety of our employees and doing our part to keep our nation supplied with food during this difficult time,” stated Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods. Mr. Romanzi continued, “Thanks to the tremendous efforts of our employees, we were able to achieve both of these goals during the second quarter. We had an outstanding second quarter in terms of net sales, net income, adjusted EBITDA and cash flow as our portfolio of brands served consumers very well as they continued to cook and eat more at home.”

“We continue to take a wide range of precautionary measures at our manufacturing facilities and other work locations in response to COVID-19. And, although we are operating in a very challenging environment, our employees have done a fantastic job ensuring that our supply chain has been able to meet an unprecedented increase in demand for our products.”

Mr. Romanzi, continued, “During the second half of the year, we remain focused on working closely with our supply chain partners and our customers to ensure that we can continue to provide uninterrupted service and meet the increased demand resulting from the pandemic. At the same time, we will continue our new product innovation and other brand building efforts as we look to turn some of this pandemic-related increase in demand into long-term growth opportunities for our brands.”

1

Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “adjusted diluted earnings per share,” “adjusted net income,” “EBITDA,” “adjusted EBITDA” and “base business net sales,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures.

Financial Results for the Second Quarter of 2020

Net sales for the second quarter of 2020 increased $141.3 million, or 38.1%, to $512.5 million from $371.2 million for the second quarter of 2019. The increase was primarily attributable to materially increased net sales resulting from increased demand for the Company’s products due to the COVID-19 pandemic. The Company’s net sales also benefited from the Clabber Girl and Farmwise acquisitions, which were completed on May 15, 2019 and February 19, 2020, respectively. An additional one and one-half months of net sales of Clabber Girl and an additional three months of net sales of Farmwise contributed $15.0 million and $0.6 million, respectively, to the Company’s net sales for the second quarter of 2020.

Base business net sales1 for the second quarter of 2020 increased $125.7 million, or 33.9%, to $496.9 million from $371.2 million for the second quarter of 2019. The increase in base business net sales reflected an increase in unit volume of $111.7 million and an increase in net pricing (inclusive of the impact of the Company’s 2019 list price increases, the trade spend optimization program the Company initiated in 2019, and a temporarily lower trade spend environment) of $15.3 million, or 4.1% of base business net sales, partially offset by the negative impact of foreign currency of $1.3 million.

Net sales of Green Giant (including Le Sueur) increased $51.2 million, or 45.4%; net sales of the Company’s spices & seasonings2 increased $17.4 million, or 21.4%; net sales of Ortega increased $12.8 million, or 37.4%; net sales of Cream of Wheat increased $6.3 million, or 54.0%; and net sales of Maple Grove Farms increased $0.2 million, or 1.5%, for the second quarter of 2020 as compared to the second quarter of 2019. Net sales of all other brands in the aggregate increased $37.8 million, or 33.3%, for the second quarter of 2020.

Gross profit was $134.1 million for the second quarter of 2020, or 26.2% of net sales. Excluding the negative impact of $0.5 million of acquisition/divestiture-related and non-recurring expenses during the second quarter of 2020, the Company’s gross profit would have been $134.6 million, or 26.3% of net sales. Gross profit was $91.9 million for the second quarter of 2019, or 24.7% of net sales. Excluding the negative impact of $4.9 million of acquisition/divestiture-related and non-recurring expenses during the second quarter of 2019, which includes expenses relating to the trailing non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $96.8 million, or 26.0% of net sales.

Selling, general and administrative expenses increased $4.4 million, or 11.3%, to $44.3 million for the second quarter of 2020 from $39.9 million for the second quarter of 2019. The increase was composed of increases in general and administrative expenses of $4.7 million and selling expenses of $2.7 million, partially offset by decreases in acquisition/divestiture-related and non-recurring expenses of $2.7 million, warehousing expenses of $0.2 million and consumer marketing expenses of $0.1 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 2.0 percentage points to 8.7% for the second quarter of 2020, compared to 10.7% for the second quarter of 2019.

Net interest expense increased $1.6 million, or 7.2%, to $24.8 million for the second quarter of 2020 from $23.2 million in the second quarter of 2019. The increase was primarily attributable to an increase in average long-term debt outstanding during the second quarter of 2020 as compared to the second quarter of 2019, primarily as a result of borrowings made during the last three quarters of fiscal 2019 primarily to fund the Clabber Girl acquisition, to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program, and a $100.0 million revolver draw made by the Company in March 2020, which was subsequently repaid in May and June 2020.

The Company’s net income was $44.9 million, or $0.70 per diluted share, for the second quarter of 2020, compared to net income of $18.3 million, or $0.28 per diluted share, for the second quarter of 2019. The Company’s adjusted net income1 for the second quarter of 2020 was $46.0 million, or $0.71 per adjusted diluted share, compared to $24.5 million, or $0.38 per adjusted diluted share, for the second quarter of 2019.

2

Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Dash and Ac’cent.

For the second quarter of 2020, adjusted EBITDA was $102.6 million, an increase of $31.6 million, or 44.6%, compared to $71.0 million for the second quarter of 2019. The increase in adjusted EBITDA was primarily attributable to the positive impact of increased base business unit volume on the Company’s net sales as a result of the COVID-19 pandemic, as well as increased net sales due to an extra one and one-half months of net sales of Clabber Girl in the second quarter of 2020. Adjusted EBITDA as a percentage of net sales was 20.0% for the second quarter of 2020, compared to 19.1% in the second quarter of 2019.

Financial Results for the First Two Quarters of 2020

Net sales for the first two quarters of 2020 increased $178.0 million, or 22.7%, to $961.9 million from $783.9 million for the first two quarters of 2019. The increase was primarily attributable to materially increased net sales in March through June 2020 (as compared to March through June 2019) resulting from increased demand for the Company’s products due to the COVID-19 pandemic. The Company’s net sales also benefited from the Clabber Girl and Farmwise acquisitions, which were completed on May 15, 2019 and February 19, 2020, respectively. An additional four and one-half months of net sales of Clabber Girl and an additional four and one-half months of net sales of Farmwise contributed $33.7 million and $0.8 million, respectively, to the Company’s net sales for the first two quarters of 2020.

Base business net sales for the first two quarters of 2020 increased $143.5 million, or 18.3%, to $927.4 million from $783.9 million for the first two quarters of 2019. The increase in base business net sales reflected an increase in unit volume of $119.9 million and an increase in net pricing (inclusive of the impact of the Company’s 2019 list price increases, the trade spend optimization program the Company initiated in 2019, and a temporarily lower trade spend environment) of $24.5 million, or 3.1% of base business net sales, partially offset by the negative impact of foreign currency of $0.9 million.

Net sales of Green Giant (including Le Sueur) increased $73.5 million, or 29.5%; net sales of Ortega increased $14.3 million, or 20.0%; net sales of Cream of Wheat increased $7.8 million, or 26.9%; net sales of the Company’s spices & seasonings2 increased $4.5 million, or 2.7%; and net sales of Maple Grove Farms increased $0.8 million, or 2.3%, in the first two quarters of 2020, as compared to the first two quarters of 2019. Net sales of all other brands in the aggregate increased $42.6 million, or 18.4%, for the first two quarters of 2020.

Gross profit was $239.0 million for the first two quarters of 2020, or 24.8% of net sales. Excluding the negative impact of $2.8 million of acquisition/divestiture-related and non-recurring expenses during the first two quarters of 2020, the Company’s gross profit would have been $241.8 million, or 25.1% of net sales. Gross profit was $179.9 million for the first two quarters of 2019, or 23.0% of net sales. Excluding the negative impact of $18.0 million of acquisition/divestiture-related and non-recurring expenses during the first two quarters of 2019, which includes expenses relating to the trailing non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $197.9 million, or 25.2% of net sales.

Selling, general and administrative expenses increased $6.1 million, or 7.9%, to $84.3 million for the first two quarters of 2020 from $78.2 million for the first two quarters of 2019. The increase was composed of increases in general and administrative expenses of $6.4 million and selling expenses of $4.7 million, partially offset by decreases in acquisition/divestiture-related and non-recurring expenses of $3.8 million, warehousing expenses of $0.6 million and consumer marketing expenses of $0.6 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 1.2 percentage points to 8.8% for the first two quarters of 2020, compared to 10.0% for the first two quarters of 2019.

Net interest expense increased $4.6 million, or 10.0%, to $50.9 million for the first two quarters of 2020 from $46.3 million in the first two quarters of 2019. The increase was primarily attributable to an increase in average long-term debt outstanding during the first two quarters of 2020 as compared to the first two quarters of 2019, primarily as a result of borrowings made during the last three quarters of fiscal 2019 primarily to fund the Clabber Girl acquisition, to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program, and a $100.0 million revolver draw made by the Company in March 2020, which was subsequently repaid in May and June 2020.

The Company’s net income was $73.0 million, or $1.14 per diluted share, for the first two quarters of 2020, compared to net income of $35.0 million, or $0.53 per diluted share, for the first two quarters of 2019. The Company’s adjusted net income for the first two quarters of 2020 was $75.3 million, or $1.17 per adjusted diluted share, compared to $53.5 million, or $0.82 per adjusted diluted share, for the first two quarters of 2019.

For the first two quarters of 2020, adjusted EBITDA was $183.3 million, an increase of $36.5 million, or 24.9%, compared to $146.8 million for the first two quarters of 2019. The increase in adjusted EBITDA was primarily attributable to the positive impact of increased base business unit volume on the Company’s net sales as a result of the COVID-19 pandemic, as well as increased net sales due to an extra four and one-half months of Clabber Girl in the first two quarters of 2020. Adjusted EBITDA as a percentage of net sales was 19.1% for the first two quarters of 2020, compared to 18.7% in the first two quarters of 2019.

Full Year Fiscal 2020 Guidance

Although B&G Foods’ management continues to believe that B&G Foods’ net sales and adjusted EBITDA for full year fiscal 2020 will materially exceed the full year fiscal 2020 net sales and adjusted EBITDA guidance provided by management when the Company reported fiscal 2019 results in February 2020, the Company’s management is unable to fully estimate the impact the COVID-19 pandemic will have on the Company’s third quarter and full year fiscal 2020 results and therefore is unable at this time to provide guidance for the remainder of 2020. The ultimate impact of the COVID-19 pandemic on the Company’s business will depend on many factors, including, among others, the duration of social distancing and stay-at-home mandates and whether a second or third wave of COVID-19 will affect the United States and the rest of North America, the Company’s ability to continue to operate its manufacturing facilities, maintain its supply chain without material disruption, procure ingredients, packaging and other raw materials when needed despite unprecedented demand in the food industry, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating habits.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, July 30, 2020 to discuss second quarter 2020 financial results. The live audio webcast of the conference call can be accessed at www.bgfoods.com/investor-relations. A replay of the webcast will be available following the conference call through the same link.

About Non-GAAP Financial Measures and Items Affecting Comparability

“Adjusted net income” (net income adjusted for certain items that affect comparability), “adjusted diluted earnings per share,” (diluted earnings per share adjusted for certain items that affect comparability), “base business net sales” (net sales without the impact of acquisitions until the acquisitions are included in both comparable periods and without the impact of discontinued or divested brands), “EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and “adjusted EBITDA” (EBITDA as adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up and gains and losses on sale of assets), non-recurring expenses, gains and losses and the non-cash accounting impact of the Company’s inventory reduction plan) are “non-GAAP financial measures.” A non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP) in B&G Foods’ consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

The Company uses non-GAAP financial measures to adjust for certain items that affect comparability. This information is provided in order to allow investors to make meaningful comparisons of the Company’s operating performance between periods and to view the Company’s business from the same perspective as the Company’s management. Because the Company cannot predict the timing and amount of these items that affect comparability, management does not consider these items when evaluating the Company’s performance or when making decisions regarding allocation of resources.

Additional information regarding EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to net income and to net cash provided by operating activities, is included below for the second quarter and first two quarters of 2020 and 2019, along with the components of EBITDA and adjusted EBITDA. Also included below are reconciliations of the non-GAAP terms adjusted net income, adjusted diluted earnings per share and base business net sales to the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.

About B&G Foods, Inc.

Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including Back to Nature, B&G, B&M, Cream of Wheat, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include, without limitation, statements related to B&G Foods’ net sales, adjusted EBITDA and overall expectations for fiscal 2020 and beyond, including statements related to the future impact of the COVID-19 pandemic on the Company’s business and financial results, ability to provide uninterrupted service and meet the increased demand resulting from the pandemic, and the Company’s plans to continue new product innovation and other brand building efforts to promote long-term growth opportunities. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking. Factors that may affect actual results include, without limitation: the impact of the COVID-19 pandemic on the Company’s business, including, without limitation, the ability of the Company and its supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption; the Company’s substantial leverage; the effects of rising costs for the Company’s raw materials, packaging and ingredients; crude oil prices and their impact on distribution, packaging and energy costs; the Company’s ability to successfully implement sales price increases and cost saving measures to offset any cost increases; intense competition, changes in consumer preferences, demand for the Company’s products and local economic and market conditions; the Company’s continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity; the risks associated with the expansion of the Company’s business; the Company’s possible inability to identify new acquisitions or to integrate recent or future acquisitions or the Company’s failure to realize anticipated revenue enhancements, cost savings or other synergies; tax reform and legislation, including the effects of the U.S. Tax Cuts and Jobs Act and the U.S. CARES Act; the Company’s ability to access the credit markets and the Company’s borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of the Company’s competitors; unanticipated expenses, including, without limitation, litigation or legal settlement expenses; the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar; the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on the Company’s international procurement, sales and operations; future impairments of the Company’s goodwill and intangible assets; the Company’s ability to successfully complete the implementation of additional modules and the integration and operation of a new enterprise resource planning (ERP) system; the Company’s ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; the Company’s sustainability initiatives and changes to environmental laws and regulations; and other factors that affect the food industry generally. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in B&G Foods’ filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8‑K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

June 27,

December 28,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

181,200

$

11,315

Trade accounts receivable, net

141,216

143,908

Inventories

356,803

472,187

Prepaid expenses and other current assets

34,434

25,449

Income tax receivable

4,196

8,934

Total current assets

717,849

661,793

Property, plant and equipment, net

283,827

304,934

Operating lease right-of-use assets, net

35,925

38,698

Goodwill

598,860

596,391

Other intangible assets, net

1,606,164

1,615,126

Other assets

3,017

3,277

Deferred income taxes

6,180

7,371

Total assets

$

3,251,822

$

3,227,590

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$

122,887

$

114,936

Accrued expenses

58,780

55,659

Current portion of operating lease liabilities

10,946

9,813

Current portion of long-term debt

4,500

5,625

Income tax payable

2,297

454

Dividends payable

30,476

30,421

Total current liabilities

229,886

216,908

Long-term debt

1,874,442

1,874,158

Deferred income taxes

268,962

254,339

Long-term operating lease liabilities, net of current portion

28,003

31,997

Other liabilities

33,380

37,646

Total liabilities

2,434,673

2,415,048

Stockholders’ equity:

Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding

—

—

Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 64,160,453 and 64,044,649 shares issued and outstanding as of June 27, 2020 and December 28, 2019, respectively

642

640

Additional paid-in capital

—

—

Accumulated other comprehensive loss

(44,057

)

(31,894

)

Retained earnings

860,564

843,796

Total stockholders’ equity

817,149

812,542

Total liabilities and stockholders’ equity

$

3,251,822

$

3,227,590

Contacts

Investor Relations:

ICR, Inc.

Dara Dierks

866.211.8151

Media Relations:

ICR, Inc.

Matt Lindberg

203.682.8214

Read full story here

Categories
Healthcare

Teva announces new strategic focus in the Japanese market

  • Japan Business Venture shifts focus to specialty assets and a portfolio of select generics that meet patients’ medical needs
  • Remains positioned to address unmet patient needs in core therapeutic areas
  • Will divest majority of current non-differentiated generics portfolio, as well as local manufacturing
  • Business venture remains committed to serving its Japanese patients and healthcare professionals

TEL AVIV, Israel–(BUSINESS WIRE)–Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA), who holds (through its Japanese affiliates) with Takeda a joint business venture (the “BV”) in the Japanese market, announced today a new strategy for its local commercial operations. Nearly five years since its inception, and following an in-depth review of market opportunities, the BV’s new strategy will focus on commercializing a selection of complex generics, specialty assets and other pipeline opportunities.

This shift will include a divestment of the majority of the BV’s generic and operational assets to Nichi-Iko Pharmaceutical Co., Ltd. This transaction is expected to close by early 2021.

The BV will retain approximately 20 generic molecules and several pipeline assets, as well as its robust portfolio of authorized generics, LLPs and specialty assets. The BV will seek to address unmet patient needs with products from its portfolio and pipeline and will continue to combine Teva’s deep marketing expertise, commercial and medical excellence, coupled with financial rigor, with Takeda’s leading brand reputation and strong distribution presence in Japan.

Gianfranco Nazzi, Executive Vice President, International Markets Commercial, said: “The Teva and Takeda business venture has always aimed to address the wide-ranging needs of patients and healthcare professionals in Japan. Our new strategy will allow each of the parties to leverage its core strengths, and ultimately better serve the Japanese patients. For Teva, and in line with the company’s strategic objectives, the new model presents a chance to drive better performance by focusing our Japan business on a portfolio of select generics and pipeline of specialty assets, while continuing to put patients and healthcare professionals at the center of our strategy.”

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has been developing and producing medicines to improve people’s lives for more than a century. We are a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. Around 200 million people around the world take a Teva medicine every day and are served by one of the largest and most complex supply chains in the pharmaceutical industry. Along with our established presence in generics, we have significant innovative research and operations supporting our growing portfolio of specialty and biopharmaceutical products. Learn more at www.tevapharm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 re: our new strategic focus in the Japanese market, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to:

  • the potential that the expected benefits and opportunities related to our new strategic focus may not be realized or may take longer to realize than expected;
  • risks related to the satisfaction of the conditions to closing the disposition of certain of our joint venture’s generic and operational assets (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including the possibility that the disposition does not close, and the companies’ ability to consummate the disposition on the terms agreed by the parties;
  • our ability to successfully compete in the marketplace, including: competition from companies with greater resources and capabilities; delays in launches of new products and our ability to achieve expected results from investments in our product pipeline; ability to develop and commercialize biopharmaceutical products; efforts of pharmaceutical companies to limit the use of generics, including through legislation and regulations and the effectiveness of our patents and other measures to protect our intellectual property rights;
  • our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us;
  • our business and operations in general, including: duration, and geographic reach of the COVID-19 pandemic and its impact on our business, financial condition, operations, cash flows, and liquidity and on the economy in general; interruptions in our supply chain, including due to potential effects of the COVID-19 pandemic on our operations and business in geographic locations impacted by the pandemic and on the business operations of our customers and suppliers; adequacy of and our ability to successfully execute and maintain the activities and efforts related to the measures we have taken or may take in response to the COVID-19 pandemic and associated costs therewith; implementation of our restructuring plan announced in December 2017; challenges associated with conducting business globally, including adverse effects of the COVID-19 pandemic, political or economic instability, major hostilities or terrorism; our ability to attract, hire and retain highly skilled personnel; our ability to develop and commercialize additional pharmaceutical products; compliance with anti-corruption sanctions and trade control laws; manufacturing or quality control problems; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; our prospects and opportunities for growth if we sell assets and potential difficulties related to the operation of our new global enterprise resource planning (ERP) system;
  • compliance, regulatory and litigation matters, including: increased legal and regulatory action in connection with public concern over the abuse of opioid medications in the U.S. and our ability to reach a final resolution of the remaining opioid-related litigation; costs and delays resulting from the extensive governmental regulation to which we are subject or delays in governmental processing time including due to modified government operations due to the COVID-19 pandemic and effects on product and patent approvals; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; governmental investigations into S&M practices; potential liability for patent infringement; product liability claims; increased government scrutiny of our patent settlement agreements; failure to comply with complex Medicare and Medicaid reporting and payment obligations; and environmental risks;
  • other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;

and other factors discussed in our Quarterly Report on Form 10-Q for the first quarter of 2020 and our Annual Report on Form 10-K for the year ended December 31, 2019, including in the sections captioned “Risk Factors” and “Forward Looking Statements.” Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.

Contacts

IR Contacts

United States

Kevin C. Mannix (215) 591-8912

Israel
Ran Meir 972 (3) 926-7516

PR Contacts

United States
Doris Li (973) 265-3752

Israel

Yonatan Beker

972 (54) 888 5898

Categories
Healthcare

Bristol Myers Squibb and bluebird bio announce submission of Biologics License Application (BLA) to FDA for Idecabtagene Vicleucel (Ide-cel, bb2121) for adults with relapsed and refractory multiple myeloma

BLA submission based on results from pivotal Phase 2 KarMMa study evaluating ide-cel in heavily pre-treated patient population

Companies are committed to working with the FDA to rapidly advance ide-cel through the regulatory review process

PRINCETON, N.J., & CAMBRIDGE, Mass.–(BUSINESS WIRE)–$BLUE #BMS—Bristol Myers Squibb (NYSE: BMY) and bluebird bio, Inc. (Nasdaq: BLUE) today announced the submission of their Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for idecabtagene vicleucel (ide-cel; bb2121), the companies’ investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with relapsed and refractory multiple myeloma. This submission provides further details on the Chemistry, Manufacturing and Controls (CMC) module to address the outstanding regulatory requests from the FDA in May 2020 following the original BLA submission from March 2020.

The submission is based on results from the pivotal Phase 2 KarMMa study evaluating the efficacy and safety of ide-cel in relapsed and refractory multiple myeloma patients exposed to an immunomodulatory (IMiD) agent, a proteasome inhibitor (PI) and an anti-CD38 antibody. Results from the study were shared during an oral presentation as part of the American Society of Clinical Oncology 2020 (ASCO20) Virtual Scientific Program.1

Multiple myeloma is a cancer of plasma cells.2 The cause of multiple myeloma is not known and currently there is no cure; however, there are a number of treatment options available that can lead to response.2 Patients who have already been treated with some available therapies but continue to have progression of their disease have “relapsed” and “refractory” multiple myeloma, meaning their cancer has returned after they have received initial treatments. Patients with relapsed and refractory multiple myeloma that have been exposed to all three major drug classes, including an IMiD agent, a PI and an anti-CD38 antibody, have fewer treatment options and poor outcomes, including shorter response durations and lower overall survival.3

Ide-cel was granted Breakthrough Therapy Designation (BTD) by the FDA, and PRIority MEdicines (PRIME) designation and validation of its Marketing Authorization Application (MAA) by the European Medicines Agency for relapsed and refractory multiple myeloma.

Ide-cel is not approved for any indication in any geography.

For Holders of Contingent Value Rights (CVR), Ticker BMY-RT

U.S. FDA approval of ide-cel by March 31, 2021 is one of the required remaining milestones of the Contingent Value Rights issued upon the close of the Celgene acquisition in the fourth quarter of 2019. The other is U.S. FDA approval of liso-cel by December 31, 2020. The company is committed to working with FDA to progress both applications and achieve the remaining regulatory milestones required by the CVR.

About Ide-cel

Ide-cel is a B-cell maturation antigen (BCMA)-directed genetically modified autologous chimeric antigen receptor (CAR) T cell immunotherapy. The ide-cel CAR is comprised of a murine extracellular single-chain variable fragment (scFv) specific for recognizing BCMA, attached to a human CD8 α hinge and transmembrane domain fused to the T cell cytoplasmic signaling domains of CD137 4-1BB and CD3-ζ chain, in tandem. Ide-cel recognizes and binds to BCMA on the surface of multiple myeloma cells leading to CAR T cell proliferation, cytokine secretion, and subsequent cytolytic killing of BCMA-expressing cells.

Ide-cel is being developed as part of a Co-Development, Co-Promotion and Profit Share Agreement between Bristol Myers Squibb and bluebird bio. Ide-cel was granted accelerated assessment by the European Medicines Agency (EMA) on March 26, 2020, and the MAA was validated by the EMA on May 20, 2020.

About KarMMa

KarMMa (NCT03361748) is a pivotal, open-label, single-arm, multicenter, multinational, Phase 2 study evaluating the efficacy and safety of ide-cel in adults with relapsed and refractory multiple myeloma in North America and Europe. The primary endpoint of the study is overall response rate as assessed by an independent review committee (IRC) according to the International Myeloma Working Group (IMWG) criteria. Complete response rate is a key secondary endpoint. Other efficacy endpoints include time to response, duration of response, progression-free survival, overall survival, minimal residual disease evaluated by Next-Generation Sequencing (NGS) assay and safety. The study enrolled 140 patients, of whom 128 received ide-cel across the target dose levels of 150-450 x 106 CAR+ T cells after receiving lymphodepleting chemotherapy. All enrolled patients had received at least three prior treatment regimens, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody, and were refractory to their last regimen, defined as progression during or within 60 days of their last therapy.

Bristol Myers Squibb: Advancing Cancer Research

At Bristol Myers Squibb, patients are at the center of everything we do. The goal of our cancer research is to increase patients’ quality of life, long-term survival and make cure a possibility. We harness our deep scientific experience, cutting-edge technologies and discovery platforms to discover, develop and deliver novel treatments for patients.

Building upon our transformative work and legacy in hematology and Immuno-Oncology that has changed survival expectations for many cancers, our researchers are advancing a deep and diverse pipeline across multiple modalities. In the field of immune cell therapy, this includes registrational CAR T cell agents for numerous diseases, and a growing early-stage pipeline that expands cell and gene therapy targets, and technologies. We are developing cancer treatments directed at key biological pathways using our protein homeostasis platform, a research capability that has been the basis of our approved therapies for multiple myeloma and several promising compounds in early- to mid-stage development. Our scientists are targeting different immune system pathways to address interactions between tumors, the microenvironment and the immune system to further expand upon the progress we have made and help more patients respond to treatment. Combining these approaches is key to delivering potential new options for the treatment of cancer and addressing the growing issue of resistance to immunotherapy. We source innovation internally, and in collaboration with academia, government, advocacy groups and biotechnology companies, to help make the promise of transformational medicines a reality for patients.

About Bristol Myers Squibb

Bristol Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube, Facebook and Instagram.

Celgene and Juno Therapeutics are wholly owned subsidiaries of Bristol-Myers Squibb Company. In certain countries outside the U.S., due to local laws, Celgene and Juno Therapeutics are referred to as, Celgene, a Bristol Myers Squibb company and Juno Therapeutics, a Bristol Myers Squibb company.

About bluebird bio, Inc.

bluebird bio is pioneering gene therapy with purpose. From our Cambridge, Mass., headquarters, we’re developing gene therapies for severe genetic diseases and cancer, with the goal that people facing potentially fatal conditions with limited treatment options can live their lives fully. Beyond our labs, we’re working to positively disrupt the healthcare system to create access, transparency and education so that gene therapy can become available to all those who can benefit.

bluebird bio is a human company powered by human stories. We’re putting our care and expertise to work across a spectrum of disorders including cerebral adrenoleukodystrophy, sickle cell disease, β-thalassemia and multiple myeloma using three gene therapy technologies: gene addition, cell therapy and (megaTAL-enabled) gene editing.

bluebird bio has additional nests in Seattle, Wash.; Durham, N.C.; and Zug, Switzerland. For more information, visit bluebirdbio.com.

Follow bluebird bio on social media: @bluebirdbio, LinkedIn, Instagram and YouTube.

bluebird bio is a trademark of bluebird bio, Inc.

Bristol Myers Squibb Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, the research, development and commercialization of pharmaceutical products. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on historical performance and current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These risks, assumptions, uncertainties and other factors include, among others, that future study results will be consistent with the results to date, that ide-cel, or bb2121, may not achieve its primary study endpoint or receive regulatory approval for the indication described in this release in the currently anticipated timeline or at all and, if approved, whether such product candidate for such indication described in this release will be commercially successful. No forward-looking statement can be guaranteed. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect Bristol Myers Squibb’s business and market, particularly those identified in the cautionary statement and risk factors discussion in Bristol Myers Squibb’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law, Bristol Myers Squibb undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

bluebird bio Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, the research, development and commercialization of ide-cel. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on historical performance and current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These risks, assumptions, uncertainties and other factors include, among others, the possibility that the BLA submission may not be accepted for filing by the FDA without the provision of further information or responses to additional requests, if at all, that ide-cel may not receive regulatory approval for the indication described in this release in the currently anticipated timeline or at all, and, if approved, whether ide-cel will be commercially successful, that the positive results for ide-cel may not continue in additional clinical trials, and that the collaboration with Bristol Myers Squibb may not continue or be successful. No forward-looking statement can be guaranteed. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect bluebird bio’s business, particularly those identified in the risk factors discussion in bluebird bio’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law, bluebird bio undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

Hyperlinks are provided as a convenience and for informational purposes only. Neither Bristol Myers Squibb nor bluebird bio bears responsibility for the security or content of external websites or websites outside of their respective control.

References

  1. Munshi NC, et al. Idecabtagene vicleucel (ide-cel; bb2121), a BCMA-targeted CAR T cell therapy, in patients with relapsed and refractory multiple myeloma (RRMM): initial KarMMa results. ASCO 2020 Virtual Scientific Program. Abstract #8503.
  2. American Cancer Society. What is Multiple Myeloma? Available at: https://www.cancer.org/cancer/multiple-myeloma/about/what-is-multiple-myeloma.html. Accessed June 2020.
  3. Jagannath S, et al. KarMMa-RW: a study of real world treatment patterns in heavily pretreated patients with relapsed and refractory multiple myeloma (RRMM) and comparison of outcomes to KarMMa. ASCO 2020 Virtual Scientific Program. Abstract #8525.

Contacts

Bristol Myers Squibb
Media Inquiries:

609-252-3345

media@bms.com

Rose Weldon

rose.weldon@bms.com

Investors:

Tim Power

609-252-7509

timothy.power@bms.com

bluebird bio

Media:
Victoria von Rinteln

617-914-8774

vvonrinteln@bluebirdbio.com

Investors:
Ingrid Goldberg

410-960-5022

igoldberg@bluebirdbio.com

Elizabeth Pingpank

617-914-8736

epingpank@bluebirdbio.com

Categories
Local News

Universal Display Corporation announces $25,000 donation to the Smith Family Foundation

EWING, N.J.–(BUSINESS WIRE)–$OLED #OLED—Universal Display Corporation (Nasdaq: OLED), enabling energy-efficient displays and lighting with its UniversalPHOLED® technology and materials, today announced the donation of $25,000 to the Smith Family Foundation (SFFNJ), a private grant-making institution assisting with education, neighborhood development, youth services, and other community programs in Trenton, NJ.

“The partnership with Universal Display Corporation (UDC) is a wonderful example of how the for-profit and nonprofit communities can work together to create the change we all want to see in our great city,” said Katherine Nunnally, Executive Director and Chief Executive Officer of the Smith Family Foundation. “Through our relationship, the Trenton nonprofit sector will be allocated resources and educational opportunities to assist them as they continue working to make our community a safe, healthy, and prosperous urban hub.”

“We are committed to fostering our local communities and are pleased to be supporting the Smith Family Foundation with this donation of $25,000,” said Steven V. Abramson, President and Chief Executive Officer of Universal Display Corporation. “Our relationship with the Smith Family Foundation began with Steve Smith, a former UDC colleague and current SFFNJ Board Member, and we are delighted to continue working together on a mission to enrich the Trenton community through educational initiatives.”

About Smith Family Foundation

The Smith Family Foundation is a private grant-making Institution, founded in Trenton, NJ in 2016. Their Mission is to empower its community, cultivate leaders and transform lives by providing funding and leadership development to Trenton-based organizations.

In May of 2016, the Smith family — Pearlie Smith & her seven children — received a substantial financial blessing. Blessed with a new opportunity, the family made it their collective mission to improve the quality of life for residents in their hometown – thus the Smith Family Foundation was born. While the foundation allows the Smiths to support their community in ways previously unimagined, the family is no stranger to philanthropy. The seeds for the foundation were planted decades ago in the South Side of Trenton, where Seamon and Pearlie Smith raised their children on values of hard work, love of God, and giving back.

About Universal Display Corporation

Universal Display Corporation (Nasdaq: OLED) is a leader in the research, development and commercialization of organic light emitting diode (OLED) technologies and materials for use in display and solid-state lighting applications. Founded in 1994, the Company currently owns, exclusively licenses or has the sole right to sublicense more than 5,000 patents issued and pending worldwide. Universal Display licenses its proprietary technologies, including its breakthrough high-efficiency UniversalPHOLED® phosphorescent OLED technology that can enable the development of low power and eco-friendly displays and solid-state lighting. The Company also develops and offers high-quality, state-of-the-art UniversalPHOLED materials that are recognized as key ingredients in the fabrication of OLEDs with peak performance. In addition, Universal Display delivers innovative and customized solutions to its clients and partners through technology transfer, collaborative technology development and on-site training.

Headquartered in Ewing, New Jersey, with international offices in China, Hong Kong, Ireland, Japan, South Korea and Taiwan, and wholly-owned subsidiary Adesis, Inc. based in New Castle, Delaware, Universal Display works and partners with a network of world-class organizations. To learn more about Universal Display Corporation, please visit https://oled.com/.

Universal Display Corporation and the Universal Display Corporation logo are trademarks or registered trademarks of Universal Display Corporation. All other company, brand or product names may be trademarks or registered trademarks.

All statements in this document that are not historical, such as those relating to the impact of the COVID-19 pandemic on the Company and otherwise, Universal Display Corporation’s technologies and potential applications of those technologies, the Company’s expected results and future declaration of dividends, as well as the growth of the OLED market and the Company’s opportunities in that market, are forward-looking financial statements within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements in this document, as they reflect Universal Display Corporation’s current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties are discussed in greater detail in Universal Display Corporation’s periodic reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, including, in particular, the section entitled “Risk Factors” in Universal Display Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 and its subsequent Quarterly Reports on Form 10-Q. Universal Display Corporation disclaims any obligation to update any forward-looking statement contained in this document.

Follow Universal Display Corporation

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(OLED-C)

Contacts

Universal Display:

Darice Liu

investor@oled.com
media@oled.com
+1 609-964-5123

Smith Family Foundation Inc.:

Katherine N. Nunnally, MPA

Executive Director/CEO

knunnally@sffnj.org
+1 609-888-6300

Categories
Business

B&G Foods declares regular quarterly dividend

PARSIPPANY, N.J.–(BUSINESS WIRE)–B&G Foods, Inc. (NYSE: BGS) announced today that its Board of Directors has declared a regular quarterly cash dividend of $0.475 per share of common stock. The dividend is payable on October 30, 2020 to shareholders of record as of September 30, 2020.

At the closing market price of the common stock on July 28, 2020, the current dividend rate represents an annualized yield of 7.0%. This is the 64th consecutive quarterly dividend declared by the Board of Directors since B&G Foods’ initial public offering in October 2004.

About B&G Foods, Inc.

Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including Back to Nature, B&G, B&M, Cream of Wheat, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.

Contacts

Investor Relations:

ICR, Inc.

Dara Dierks

866.211.8151

Media Relations:

ICR, Inc.

Matt Lindberg

203.682.8214