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Dun & Bradstreet reports second quarter 2020 financial results

SHORT HILLS, N.J.–(BUSINESS WIRE)–Dun & Bradstreet Holdings, Inc. (NYSE: DNB), a leading global provider of business decisioning data and analytics, today announced unaudited financial results for the second quarter ended June 30, 2020. A reconciliation of U.S. generally accepted accounting principles (“GAAP”) to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”

  • Revenue of $420.6 million, up 5.4%, and up 5.6% on a constant currency basis; which includes the net impact of lower deferred revenue purchase accounting adjustments of $35.9 million.
  • Net loss of $207.1 million, or diluted loss per share of $0.66, and adjusted net income of $81.6 million, or adjusted diluted earnings per share of $0.26.
  • Adjusted EBITDA of $176.1 million, up 18.5%, and adjusted EBITDA margin of 41.9%, an increase of 470 basis points; which includes the net impact of lower deferred revenue purchase accounting adjustments of $35.9 million.
  • Completed initial public offering and concurrent private placement of $400.0 million in July, raising net proceeds of $2.2 billion.

Dun & Bradstreet Chairman Bill Foley said, “Our recent IPO was a significant milestone for the company, and another step forward as part of our longer journey of transformation. We are excited about the opportunities that lie ahead at Dun & Bradstreet as we work to drive long-term value and sustained growth.”

Dun & Bradstreet CEO Anthony Jabbour said, “Our performance for the quarter was in line with expectations and we continue to make significant progress in our transformation that ultimately supports our long-term strategic goals. Despite a challenging macro-economic environment, our core business fundamentals remained strong and we continue to be uniquely positioned to support our customers through these difficult times.”

Second Quarter 2020 Segment Results

North America

North America revenue was $354.3 million, a decrease of 1.8% as reported and on a constant currency basis. Finance and Risk revenue was $193.6 million, a decrease of 3.6%, and a decrease of 3.5% on a constant currency basis driven by structural changes we made within our legacy Credibility solutions and the impact of COVID-19 on usage volumes. Sales and Marketing revenue was $160.7 million, an increase of 0.4% as reported and on a constant currency basis. North America adjusted EBITDA was $170.1 million, a decrease of 2.8%, with adjusted EBITDA margin of 48.0%, a decrease of 50 basis points.

International

International revenue was $68.4 million, a decrease of 9.9%, and a decrease of 8.9% on a constant currency basis. Finance and Risk revenue was $55.9 million, a decrease of 12.4%, and a decrease of 11.3% on a constant currency basis primarily driven by lower non-recurring revenues in the Worldwide Network along with the impact of COVID-19 on usage volumes. Sales and Marketing revenue was $12.5 million, an increase of 3.5% and an increase of 3.6% on a constant currency basis. International adjusted EBITDA was $20.2 million, a decrease of 26.7%, with adjusted EBITDA margin of 29.5%, a decrease of 670 basis points.

Balance Sheet

As of June 30, 2020, we had cash and cash equivalents of $99.8 million and total debt of $4,061 million. As of June 30, 2020, we had available capacity of $312.5 million on our revolving credit facility.

On July 6, 2020, Dun & Bradstreet completed its initial public offering at an offering price of $22.00 per share. The Company issued 90.0 million shares, including the additional 11.7 million shares purchased by the underwriters resulting from the exercise of their overallotment option. In addition, the Company issued 18.5 million shares in connection with the $400 million concurrent private placement which resulted in net proceeds of $2.2 billion after deducting underwriting discounts and IPO related expenses. Dun & Bradstreet used a portion of the net proceeds to redeem all of its outstanding Series A Preferred Stock and repay $300.0 million of its 10.250% Senior Unsecured Notes outstanding due 2027.

Business Outlook

Dun & Bradstreet’s full year 2020 outlook is as follows:

  • Revenue is expected to be in the range of $1,729 million to $1,759 million.
  • Adjusted EBITDA is expected to be in the range of $704 million to $724 million.
  • Revenue and adjusted EBITDA include a ($21) million impact from deferred revenue purchase accounting, in both the low and high ends of the range.
  • Adjusted EPS is expected to be in the range of $0.89 to $0.93.
  • Adjusted EPS includes a $(0.04) impact from deferred revenue purchase accounting, in both the low and high ends of the range.

The foregoing forward-looking statements reflect Dun & Bradstreet’s expectations as of today’s date and Revenue assumes constant foreign currency rates. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. Dun & Bradstreet does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.

Earnings Conference Call and Audio Webcast

Dun & Bradstreet will host a conference call to discuss the second quarter 2020 financial results on August 6, 2020 at 8:30 a.m. ET. The conference call can be accessed live over the phone by dialing 833-350-1376, or for international callers 647-689-6655. A replay will be available from 11:30 a.m. ET on August 6, 2020, through August 13, 2020, by dialing 800-585-8367, or for international callers 416-621-4642. The replay passcode will be 7189713.

The call will also be webcast live from Dun & Bradstreet’s investor relations website at https://investor.dnb.com. Following the completion of the call, a recorded replay of the webcast will be available on the website.

About Dun & Bradstreet

Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.

Use of Non-GAAP Financial Measures

In addition to reporting GAAP results, we evaluate performance and report our results on the non-GAAP financial measures discussed below. We believe that the presentation of these non-GAAP measures provides useful information to investors and rating agencies regarding our results, operating trends and performance between periods. These non-GAAP financial measures include adjusted revenue, adjusted earnings before interest, taxes, depreciation and amortization (‘‘adjusted EBITDA’’), adjusted EBITDA margin and adjusted net income. Adjusted results are non-GAAP measures that adjust for the impact due to purchase accounting application and divestitures, restructuring charges, equity-based compensation, acquisition and divestiture-related costs (such as costs for bankers, legal fees, due diligence, retention payments and contingent consideration adjustments) and other non-core gains and charges that are not in the normal course of our business (such as gains and losses on sales of businesses, impairment charges, effect of significant changes in tax laws and material tax and legal settlements). We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non-cash and not indicative of our ongoing and underlying operating performance. Recognized intangible assets arise from acquisitions, or primarily the Take-Private Transaction. We believe that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced. Additionally, our costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in our operating costs as personnel, data fee, facilities, overhead and similar items. Management believes it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of recognized intangible assets will recur in future periods until such assets have been fully amortized. In addition, we isolate the effects of changes in foreign exchange rates on our revenue growth because we believe it is useful for investors to be able to compare revenue from one period to another, both after and before the effects of foreign exchange rate changes. The change in revenue performance attributable to foreign currency rates is determined by converting both our prior and current periods’ foreign currency revenue by a constant rate. As a result, we monitor our adjusted revenue growth both after and before the effects of foreign exchange rate changes. We believe that these supplemental non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance and comparability of our operating results from period to period. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP.

Our non-GAAP or adjusted financial measures reflect adjustments based on the following items, as well as the related income tax.

Adjusted Revenue

We define adjusted revenue as revenue adjusted to include revenue for the period from January 8 to February 7, 2019 (‘‘International lag adjustment’’) for the Predecessor related to the lag reporting for our International operations. On a GAAP basis, we report International results on a one-month lag, and for 2019 the Predecessor period for International is December 1, 2018 through January 7, 2019. The Successor period for International is February 8, 2019 (commencing on the closing date of the Take-Private Transaction) through November 30, 2019 for the Successor period from January 1, 2019 to December 31, 2019. The International lag adjustment is to facilitate comparability of 2019 periods to 2020 periods.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) excluding the following items:

  • depreciation and amortization;
  • interest expense and income;
  • income tax benefit or provision;
  • other expenses or income;
  • equity in net income of affiliates;
  • net income attributable to non-controlling interests;
  • dividends allocated to preferred stockholders;
  • revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion);
  • other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization);
  • equity-based compensation;
  • restructuring charges;
  • merger and acquisition-related operating costs;
  • transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program;
  • legal reserve and costs associated with significant legal and regulatory matters; and
  • asset impairment.

We calculate adjusted EBITDA margin by dividing adjusted EBITDA by adjusted revenue.

Adjusted Net Income

We define adjusted net income as net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor) adjusted for the following items:

  • revenue and expense adjustments to include results for the period from January 8 to February 7, 2019, for the Predecessor related to the International lag adjustment (see above discussion);
  • incremental amortization resulting from the application of purchase accounting. We exclude amortization of recognized intangible assets resulting from the application of purchase accounting because it is non-cash and is not indicative of our ongoing and underlying operating performance. The Company believes that recognized intangible assets by their nature are fundamentally different from other depreciating assets that are replaced on a predictable operating cycle. Unlike other depreciating assets, such as developed and purchased software licenses or property and equipment, there is no replacement cost once these recognized intangible assets expire and the assets are not replaced. Additionally, the Company’s costs to operate, maintain and extend the life of acquired intangible assets and purchased intellectual property are reflected in the Company’s operating costs as personnel, data fee, facilities, overhead and similar items;
  • other incremental or reduced expenses from the application of purchase accounting (e.g. commission asset amortization);
  • equity-based compensation;
  • restructuring charges;
  • merger and acquisition-related operating costs;
  • transition costs primarily consisting of non-recurring incentive expenses associated with our synergy program;
  • legal reserve and costs associated with significant legal and regulatory matters;
  • change in fair value of the make-whole derivative liability associated with the Series A Preferred Stock;
  • asset impairment;
  • non-recurring pension charges, related to pension settlement charge and actuarial loss amortization eliminated as a result of the Take-Private Transaction;
  • dividends allocated to preferred stockholders;
  • merger, acquisition and divestiture-related non-operating costs;
  • debt refinancing and extinguishment costs; and
  • tax effect of the non-GAAP adjustments and the impact resulting from the enactment of the CARES Act.

Adjusted Net Earnings per Diluted Share

We calculate adjusted net earnings per diluted share by dividing adjusted net income (loss) by the weighted average number of common shares outstanding for the period plus the dilutive effect of common shares potentially issuable in connection with awards outstanding under our stock incentive plan. For consistency purposes, we assume the stock split effected on June 23, 2020 at the beginning of each of the Predecessor periods.

Forward-Looking Statements

The statements contained in this release that are not purely historical are forward-looking statements, including statements regarding expectations, hopes, intentions or strategies regarding the future. Forward-looking statements are based on Dun & Bradstreet’s management’s beliefs, as well as assumptions made by, and information currently available to, them. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. It is not possible to predict or identify all risk factors. Consequently, the risks and uncertainties listed below should not be considered a complete discussion of all of our potential trends, risks and uncertainties. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

The risks and uncertainties that forward-looking statements are subject to include, but are not limited to: (i) an outbreak of disease, global or localized health pandemic or epidemic, or the fear of such an event (such as the COVID-19 global pandemic), including the global economic uncertainty and measures taken in response; (ii) the short- and long-term effects of the COVID-19 global pandemic, including the pace of recovery or any future resurgence; (iii) our ability to implement and execute our strategic plans to transform the business; (iv) our ability to develop or sell solutions in a timely manner or maintain client relationships; (v) competition for our solutions; (vi) harm to our brand and reputation; (vii) unfavorable global economic conditions; (viii) risks associated with operating and expanding internationally; (ix) failure to prevent cybersecurity incidents or the perception that confidential information is not secure; (x) failure in the integrity of our data or systems; (xi) system failures and personnel disruptions, which could delay the delivery of our solutions to our clients; (xii) loss of access to data sources; (xiii) failure of our software vendors and network and cloud providers to perform as expected or if our relationship is terminated; (xiv) loss or diminution of one or more of our key clients, business partners or government contracts; (xv) dependence on strategic alliances, joint ventures and acquisitions to grow our business; (xvi) our ability to protect our intellectual property adequately or cost-effectively; (xvii) claims for intellectual property infringement; (xviii) interruptions, delays or outages to subscription or payment processing platforms; (xix) risks related to acquiring and integrating businesses and divestitures of existing businesses; (xx) our ability to retain members of the senior leadership team and attract and retain skilled employees; (xxi) compliance with governmental laws and regulations; (xxii) risks associated with our structure and status as a “controlled company;” and (xxiii) the other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Cautionary Note Regarding Forward-Looking Statements” and other sections of our final prospectus dated June 30, 2020 and filed with the Securities and Exchange Commission on July 2, 2020, in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and the Company’s subsequent filings with the Securities and Exchange Commission.

Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Statement of Operations (Unaudited)

(Amounts in millions, except per share data)

Three-Month Period

Six-Month Period

Successor

Predecessor

Three Months Ended June 30, 2020

Three Months Ended June 30, 2019

Six Months Ended June 30, 2020

Period from January 1 to June 30, 2019

Period from January 1 to February 7, 2019

Revenue

$

420.6

$

398.9

$

815.9

$

573.0

$

178.7

Operating expenses

139.2

127.8

278.1

192.2

56.7

Selling and administrative expenses

143.4

126.0

269.3

339.6

122.4

Depreciation and amortization

132.6

136.8

266.9

217.3

11.1

Restructuring charge

6.8

17.4

11.3

35.9

0.1

Operating costs

422.0

408.0

825.6

785.0

190.3

Operating income (loss)

(1.4

)

(9.1

)

(9.7

)

(212.0

)

(11.6

)

Interest income

0.2

0.6

0.5

1.6

0.3

Interest expense

(78.0

)

(86.0

)

(161.0

)

(135.0

)

(5.5

)

Other income (expense) – net

(122.7

)

8.1

(32.7

)

12.3

(86.0

)

Non-operating income (expense) – net

(200.5

)

(77.3

)

(193.2

)

(121.1

)

(91.2

)

Income (loss) before provision (benefit) for income taxes and equity in net income of affiliates

(201.9

)

(86.4

)

(202.9

)

(333.1

)

(102.8

)

Less: provision (benefit) for income taxes

(27.5

)

(23.1

)

(101.8

)

(60.1

)

(27.5

)

Equity in net income of affiliates

0.6

2.8

1.2

2.9

0.5

Net income (loss)

(173.8

)

(60.5

)

(99.9

)

(270.1

)

(74.8

)

Less: net (income) loss attributable to the non-controlling interest

(1.2

)

(1.5

)

(1.6

)

(1.9

)

(0.8

)

Less: Dividends allocated to preferred stockholders

(32.1

)

(32.0

)

(64.1

)

(49.9

)

—

Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor)

(207.1

)

(94.0

)

(165.6

)

(321.9

)

(75.6

)

Basic earnings (loss) per share of common stock:

Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor)

$

(0.66

)

$

(0.30

)

$

(0.53

)

$

(1.02

)

$

(2.04

)

Diluted earnings (loss) per share of common stock:

Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. (Successor) / The Dun & Bradstreet Corporation (Predecessor)

$

(0.66

)

$

(0.30

)

$

(0.53

)

$

(1.02

)

$

(2.04

)

Weighted average number of shares outstanding-basic

314.5

314.5

314.5

314.5

37.2

Weighted average number of shares outstanding-diluted

314.5

314.5

314.5

314.5

37.2

Dun & Bradstreet Holdings, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(Amounts in millions, except share data and per share data)

June 30,
2020

December 31,
2019

Assets

Current assets

Cash and cash equivalents

$

99.8

$

98.6

Accounts receivable, net of allowance of $10.1 at June 30, 2020 and $7.3 at December 31, 2019 (Note 3)

246.2

269.3

Other receivables

7.9

10.0

Prepaid taxes

91.8

4.0

Other prepaids

36.8

31.4

Other current assets

6.5

4.6

Total current assets

489.0

417.9

Non-current assets

Property, plant and equipment, net of accumulated depreciation of $12.0 at June 30, 2020 and $7.5 at December 31, 2019

28.1

29.4

Computer software, net of accumulated amortization of $85.5 at June 30, 2020 and $52.9 at December 31, 2019

391.8

379.8

Goodwill

2,848.0

2,840.1

Deferred income tax

13.7

12.6

Other intangibles

5,022.3

5,251.4

Deferred costs

61.5

47.0

Other non-current assets

130.7

134.6

Total non-current assets

8,496.1

8,694.9

Total assets

$

8,985.1

$

9,112.8

Liabilities

Current liabilities

Accounts payable

$

59.9

$

55.0

Accrued payroll

59.8

137.9

Accrued income tax

23.2

7.8

Short-term debt

325.3

81.9

Cumulative Series A Preferred Stock redemption liability

1,067.9

—

Make-whole derivative liability

205.2

172.4

Other accrued and current liabilities

191.5

167.3

Deferred revenue

520.8

467.5

Total current liabilities

2,453.6

1,089.8

Long-term pension and postretirement benefits

185.7

206.6

Long-term debt

3,620.8

3,818.9

Liabilities for unrecognized tax benefits

17.1

16.8

Deferred income tax

1,187.8

1,233.5

Other non-current liabilities

131.1

137.7

Total liabilities

7,596.1

6,503.3

Commitments and contingencies

Cumulative Series A Preferred Stock $0.001 par value per share,1,050,000 shares authorized and issued at June 30, 2020 and December 31, 2019; Liquidation Preference of $1,067.9 at June 30, 2020 and December 31, 2019

—

1,031.8

Equity

Successor Common Stock, $0.0001 par value per share, authorized—2,000,000,000 shares; issued— 314,494,968 shares

—

—

Capital surplus

2,043.9

2,116.9

Accumulated deficit

(675.0)

(573.5)

Accumulated other comprehensive loss

(37.8)

(23.5)

Total stockholder equity

1,331.1

1,519.9

Non-controlling interest

57.9

57.8

Total equity

1,389.0

1,577.7

Total liabilities and stockholder equity

$

8,985.1

$

9,112.8

Contacts

Media:

Lisette Kwong

973-921-6263

KwongL@dnb.com

Investors:

Debra McCann

973-921-6008

IR@dnb.com

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Categories
Business

Zoetis announces second quarter 2020 results

  • Reports Flat Revenue of $1.5 Billion, and Net Income of $377 Million, or $0.79 per Diluted Share, Increasing 2% and 3%, Respectively, on a Reported Basis for Second Quarter 2020
  • Reports Adjusted Net Income of $427 Million, or Adjusted Diluted EPS of $0.89 for Second Quarter 2020
  • Delivers 4% Operational Growth in Revenue and 4% Operational Growth in Adjusted Net Income for Second Quarter 2020
  • Raises and Narrows Full Year 2020 Revenue Guidance to $6.300 – $6.475 Billion and Diluted EPS of $3.14 – $3.32 on a Reported Basis, or $3.52 – $3.68 on an Adjusted Basis

PARSIPPANY, N.J.–(BUSINESS WIRE)–$ZTS #animalhealth—Zoetis Inc. (NYSE: ZTS) today reported its financial results for the second quarter of 2020 and raised and narrowed its guidance for full year 2020 to reflect the company’s current view of the estimated full-year impact of the COVID-19 pandemic and foreign currency headwinds.

The company reported revenue of $1.5 billion for the second quarter of 2020, which is flat compared with the second quarter of 2019. Net income for the second quarter of 2020 was $377 million, or $0.79 per diluted share, an increase of 2% and 3%, respectively, on a reported basis.

Adjusted net income1 for the second quarter of 2020 was $427 million, or $0.89 per diluted share, a decrease of 2%, on a reported basis. Adjusted net income for the second quarter of 2020 excludes the net impact of $50 million for purchase accounting adjustments, acquisition-related costs and certain significant items.

On an operational2 basis, revenue for the second quarter of 2020 increased 4%, excluding the impact of foreign currency. Adjusted net income for the second quarter of 2020 increased 4% operationally, excluding the impact of foreign currency.

EXECUTIVE COMMENTARY

“As an essential business supporting the global food supply and the care of people’s pets during the pandemic, Zoetis demonstrated greater resiliency than expected in the second quarter, with 4% operational growth in revenue and 4% operational growth in adjusted net income,” said Kristin Peck, Chief Executive Officer of Zoetis. “Our strong companion animal portfolio, based on our internal innovations, helped offset some of the deeper challenges in the livestock market today.”

“Looking ahead, we expect our overall revenue growth for the remainder of the year to be driven largely by companion animal products, especially parasiticides and our key dermatology portfolio, and we are raising our guidance to reflect our current outlook for the year. We will continue to invest in products that will strengthen the innovations and digital solutions that are needed by our customers across the continuum of care – from prediction and prevention to detection and treatment of diseases,” said Peck.

QUARTERLY HIGHLIGHTS

Zoetis organizes and manages its commercial operations across two segments: United States (U.S.) and International. Within these segments, the company delivers a diverse portfolio of products for companion animals and livestock, tailored to local trends and customer needs. In the second quarter of 2020:

  • Revenue in the U.S. segment was $823 million, an increase of 6% compared with the second quarter of 2019. Sales of companion animal products increased 19% driven primarily by growth in the Simparica® franchise, including the continued launch of Simparica Trio®, the company’s new triple combination parasiticide for dogs. Also contributing to growth was the company’s key dermatology portfolio across both the Cytopoint® and Apoquel® brands. Additionally, companion animal sales benefited from the recent acquisitions of Platinum Performance and its nutritional product formulas, as well as a number of regional diagnostic reference labs. Sales of livestock products decreased 18% in the quarter. Disruptions in the food supply chain including reduced producer processing capacity and continued channel migration from dining out to preparing food at home impacted producer profitability and resulted in a decline across each of the cattle, swine and poultry portfolios. The decline in the cattle portfolio was also the result of continued unfavorable market conditions in beef and dairy, while swine product sales were negatively impacted by increased competition.
  • Revenue in the International segment was $708 million, a decrease of 5% on a reported basis and an increase of 3% operationally compared with the second quarter of 2019. Sales of companion animal products declined 3% on a reported basis and grew 2% on an operational basis. Growth resulted from increased sales of the company’s key dermatology portfolio across both the Apoquel and Cytopoint brands, as well as the Simparica franchise, including the launch of Simparica Trio in Canada and certain markets in the EU. Sales of companion animal products in China continued to grow rapidly driven by strong underlying market dynamics. Growth in companion animal products was partially offset by the impact of COVID-19 and social distancing measures in certain EU markets and in Latin America, including Brazil, that resulted in decreased veterinary clinic traffic. Sales of livestock products declined 5% on a reported basis and grew 4% operationally. Sales of swine products grew as a result of expanding herd production in key accounts and increased biosecurity measures in the wake of African Swine Fever in China. The timing of seasonal vaccination protocols in key salmon markets and the recently launched parasiticide Alpha Flux® were the primary drivers of growth in fish. Growth in our poultry portfolio was the result of increased sales of medicated feed additives and sales of biodevices. Sales of cattle products declined in the quarter due to the impact of COVID-19 in certain markets as well as the discontinuation of non-core products in Brazil.

INVESTMENTS IN GROWTH

Zoetis diversifies and grows its business through the introduction of new products, lifecycle innovations, business development initiatives, and entries into new markets and technologies. The company is increasingly focused on developing integrated solutions for pet owners, veterinarians and farmers that span the continuum of animal care – helping to predict, prevent, detect and treat diseases.

Since our last quarterly earnings announcement, Zoetis continued to bring leading products into new markets. In Brazil, Zoetis received approval for Vanguard® B Oral, a vaccine that aids in preventing kennel cough in dogs, as well as Excenel® RTU EZ (ceftiofur hydrochloride), an anti-infective that treats respiratory diseases in cattle and swine. Additionally, Fostera® Gold PCV MH was approved in Australia. This vaccine provides livestock farmers with greater options and flexibility to reduce the clinical symptoms in pigs associated with porcine circovirus (PCV2) and Mycoplasma hyopneumoniae (M. hyo). Fostera Gold PCV Metastim was also approved in Australia to reduce the clinical symptoms associated with PCV2.

In addition to new product approvals and lifecycle innovations, Zoetis continues to support future growth through business development activities. In July, the company acquired Fish Vet Group as a strategic addition to its Pharmaq business, which develops and commercializes fish vaccines and offers services in vaccination and diagnostics for aquaculture. Adding Fish Vet Group grows the geographic reach and enhances the diagnostics expertise and testing services for fish farmers in major aquaculture markets.

FINANCIAL GUIDANCE

Zoetis is raising and narrowing its full year 2020 guidance, which includes:

  • Revenue between $6.300 billion and $6.475 billion
  • Reported diluted EPS between $3.14 and $3.32
  • Adjusted diluted EPS between $3.52 and $3.68

This guidance reflects foreign exchange rates as of mid-July. Additional details on guidance are included in the financial tables and will be discussed on the company’s conference call this morning.

WEBCAST & CONFERENCE CALL DETAILS

Zoetis will host a webcast and conference call at 8:30 a.m. (ET) today, during which company executives will review second quarter 2020 results, discuss financial guidance and respond to questions from financial analysts. Investors and the public may access the live webcast by visiting the Zoetis website at http://investor.zoetis.com/events-presentations. A replay of the webcast will be archived and made available on Aug. 6, 2020.

About Zoetis

Zoetis is the leading animal health company, dedicated to supporting its customers and their businesses. Building on more than 65 years of experience in animal health, Zoetis discovers, develops, manufactures and commercializes medicines, vaccines and diagnostic products, which are complemented by biodevices, genetic tests and precision livestock farming. Zoetis serves veterinarians, livestock producers and people who raise and care for farm and companion animals with sales of its products in more than 100 countries. In 2019, the company generated annual revenue of $6.3 billion with approximately 10,600 employees. For more information, visit www.zoetis.com.

1 Adjusted net income and its components and adjusted diluted earnings per share (non-GAAP financial measures) are defined as reported net income attributable to Zoetis and reported diluted earnings per share, excluding purchase accounting adjustments, acquisition-related costs and certain significant items.

2 Operational revenue growth (a non-GAAP financial measure) is defined as growth excluding the impact of foreign exchange.

DISCLOSURE NOTICES

Forward-Looking Statements: This press release contains forward-looking statements, which reflect the current views of Zoetis with respect to: business plans or prospects; future operating or financial performance, future guidance, future operating models; expectations regarding products, product approvals or products under development; expected timing of product launches; the potential impact of the coronavirus (COVID-19) pandemic on our business, suppliers, customers and employees; expectations regarding the performance of acquired companies and our ability to integrate new businesses; expectations regarding the financial impact of acquisitions; future use of cash and dividend payments; tax rate and tax regimes; changes in the tax regimes and laws in other jurisdictions; and other future events. These statements are not guarantees of future performance or actions. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management’s underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Zoetis expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, including in the sections thereof captioned “Forward-Looking Statements and Factors That May Affect Future Results” and “Item 1A. Risk Factors,” in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K. Such risks and uncertainties may be amplified by the coronavirus (COVID-19) pandemic and its potential impact on the global economy and our business. These filings and subsequent filings are available online at www.sec.gov, www.zoetis.com, or on request from Zoetis.

Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share and operational results (which exclude the impact of foreign exchange), to assess and analyze our results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this press release should not be considered alternatives to measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliation of non-GAAP financial measures and GAAP financial measures are included in the tables accompanying this press release and are posted on our website at www.zoetis.com.

Internet Posting of Information: We routinely post information that may be important to investors in the ‘Investors’ section of our website at www.zoetis.com, on our Facebook page at http://www.facebook.com/zoetis and on Twitter@zoetis. We encourage investors and potential investors to consult our website regularly and to follow us on Facebook and Twitter for important information about us.

ZTS-IR

ZTS-FIN

ZOETIS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME(a)

(UNAUDITED)

(millions of dollars, except per share data)

Quarter Ended

Six Months Ended

June 30,

June 30,

2020

2019

% Change

2020

2019

% Change

Revenue

$

1,548

$

1,547

—

$

3,082

$

3,002

3

Costs and expenses:

Cost of sales

451

465

(3)

910

983

(7)

Selling, general and administrative expenses

393

406

(3)

782

775

1

Research and development expenses

111

111

—

218

213

2

Amortization of intangible assets

40

39

3

80

77

4

Restructuring charges and certain acquisition-related costs

8

22

(64)

17

27

(37)

Interest expense, net of capitalized interest

58

55

5

111

111

—

Other (income)/deductions—net

5

(6)

*

(15)

(20)

(25)

Income before provision for taxes on income

482

455

6

979

836

17

Provision for taxes on income

106

84

26

180

153

18

Net income before allocation to noncontrolling interests

376

371

1

799

683

17

Less: Net loss attributable to noncontrolling interests

(1)

—

*

(1)

—

*

Net income attributable to Zoetis

$

377

$

371

2

$

800

$

683

17

Earnings per share—basic

$

0.79

$

0.77

3

$

1.68

$

1.43

17

Earnings per share—diluted

$

0.79

$

0.77

3

$

1.67

$

1.41

18

Weighted-average shares used to calculate earnings per share

Basic

475.3

478.8

475.4

479.2

Diluted

478.1

482.3

478.6

482.7

(a)

The condensed consolidated statements of income present the quarter and six months ended June 30, 2020 and June 30, 2019. Subsidiaries operating outside the United States are included for the quarter and six months ended May 31, 2020 and May 31, 2019.
* Calculation not meaningful.

ZOETIS INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS

(UNAUDITED)

(millions of dollars, except per share data)

Quarter Ended June 30, 2020

GAAP

Reported(a)

Purchase

Accounting

Adjustments

Acquisition-

Related

Costs(1)

Certain

Significant

Items(2)

Non-GAAP

Adjusted(b)

Cost of sales

$

451

$

(2)

$

—

$

(1)

$

448

Gross profit

1,097

2

—

1

1,100

Selling, general and administrative expenses

393

(17)

—

(4)

372

Research and development expenses

111

(1)

—

—

110

Amortization of intangible assets

40

(33)

—

—

7

Restructuring charges and certain acquisition-related costs

8

—

(7)

(1)

—

Other (income)/deductions–net

5

—

—

—

5

Income before provision for taxes on income

482

53

7

6

548

Provision for taxes on income

106

14

1

1

122

Net income attributable to Zoetis

377

39

6

5

427

Earnings per common share attributable to Zoetis–diluted

0.79

0.08

0.01

0.01

0.89

Quarter Ended June 30, 2019

GAAP

Reported(a)

Purchase

Accounting

Adjustments

Acquisition-

Related

Costs(1)

Certain

Significant

Items(2)

Non-GAAP

Adjusted(b)

Cost of sales

$

465

$

(5)

$

—

$

(3)

$

457

Gross profit

1,082

5

—

3

1,090

Selling, general and administrative expenses

406

(18)

—

—

388

Research and development expenses

111

(1)

—

—

110

Amortization of intangible assets

39

(34)

—

—

5

Restructuring charges and certain acquisition-related costs

22

—

(22)

—

—

Other (income)/deductions–net

(6)

—

—

—

(6)

Income before provision for taxes on income

455

58

22

3

538

Provision for taxes on income

84

13

4

1

102

Net income attributable to Zoetis

371

45

18

2

436

Earnings per common share attributable to Zoetis–diluted

0.77

0.09

0.04

—

0.90

(a)

The condensed consolidated statements of income present the quarter and six months ended June 30, 2020 and June 30, 2019. Subsidiaries operating outside the United States are included for the second quarter ended May 31, 2020 and May 31, 2019.

(b)

Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non-GAAP adjusted net income and its components, and non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

ZOETIS INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS – Continued

(UNAUDITED)

(millions of dollars, except per share data)

Six Months Ended June 30, 2020

GAAP

Reported(a)

Purchase

Accounting

Adjustments

Acquisition-

Related

Costs(1)

Certain

Significant

Items(2)

Non-GAAP

Adjusted(b)

Cost of sales

$

910

$

(4)

$

—

$

(3)

$

903

Gross profit

2,172

4

—

3

2,179

Selling, general and administrative expenses

782

(35)

—

(6)

741

Research and development expenses

218

(1)

—

—

217

Amortization of intangible assets

80

(67)

—

—

13

Restructuring charges and certain acquisition-related costs

17

—

(14)

(3)

—

Other (income)/deductions–net

(15)

—

—

17

2

Income before provision for taxes on income

979

107

14

(5)

1,095

Provision for taxes on income

180

36

—

(2)

214

Net income attributable to Zoetis

800

71

14

(3)

882

Earnings per common share attributable to Zoetis–diluted

1.67

0.15

0.03

(0.01)

1.84

Six Months Ended June 30, 2019

GAAP

Reported(a)

Purchase

Accounting

Adjustments

Acquisition-

Related

Costs(1)

Certain

Significant

Items(2)

Non-GAAP

Adjusted(b)

Cost of sales

$

983

$

(19)

$

—

$

(73)

$

891

Gross profit

2,019

19

—

73

2,111

Selling, general and administrative expenses

775

(36)

—

—

739

Research and development expenses

213

(1)

—

—

212

Amortization of intangible assets

77

(68)

—

—

9

Restructuring charges and certain acquisition-related costs

27

—

(27)

—

—

Other (income)/deductions–net

(20)

—

—

—

(20)

Income before provision for taxes on income

836

124

27

73

1,060

Provision for taxes on income

153

33

5

9

200

Net income attributable to Zoetis

683

91

22

64

860

Earnings per common share attributable to Zoetis–diluted

1.41

0.19

0.05

0.13

1.78

(a)

The condensed consolidated statements of income present the quarter and six months ended June 30, 2020 and June 30, 2019. Subsidiaries operating outside the United States are included for the second quarter ended May 31, 2020 and May 31, 2019.

(b)

Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Non-GAAP adjusted net income and its components, and non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

ZOETIS INC.

NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

CERTAIN LINE ITEMS

(UNAUDITED)

(millions of dollars)

(1) Acquisition-related costs include the following:

Quarter Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Integration costs(a)

$

6

$

8

$

12

$

9

Restructuring charges(b)

1

14

2

18

Total acquisition-related costs—pre-tax

7

22

14

27

Income taxes(c)

1

4

—

5

Total acquisition-related costs—net of tax

$

6

$

18

$

14

$

22

(a)

Integration costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes. Included in Restructuring charges and certain acquisition-related costs.

(b)

Represents employee termination costs, included in Restructuring charges and certain acquisition-related costs.

(c)

Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. For the six months ended June 30, 2020, also includes a tax charge related to a remeasurement of deferred taxes resulting from the integration of acquired businesses.

(2) Certain significant items include the following:

Quarter Ended

Six Months Ended

June 30,

June 30,

2020

2019

2020

2019

Operational efficiency initiative(a)

$

—

$

—

$

(17)

$

—

Supply network strategy(b)

1

3

3

5

Other restructuring charges and cost-reduction/productivity initiatives(c)

1

—

3

—

Other(d)

4

—

6

68

Total certain significant items—pre-tax

6

3

(5)

73

Income taxes(e)

1

1

(2)

9

Total certain significant items—net of tax

$

5

$

2

$

(3)

$

64

(a)

Represents a net gain resulting from net cash proceeds received pursuant to an agreement related to the 2016 sale of certain U.S. manufacturing sites, included in Other (income)/deductions-net.

(b)

Represents consulting fees, included in Cost of sales, related to cost-reduction and productivity initiatives.

(c)

Represents employee termination costs incurred as a result of the CEO transition, included in Restructuring charges and certain acquisition-related costs.

(d)

For the quarter and six months ended June 30, 2020, primarily represents the modification of share-based compensation related to CEO transition costs, included in Selling, general and administrative expenses. For the six months ended June 30, 2019, represents a change in estimate related to inventory costing, included in Cost of sales.

(e)

Included in Provision for taxes on income. Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pretax amounts and applying that jurisdiction’s applicable tax rate.

Contacts

Media Contacts:

Bill Price

1-973-443-2742 (o)

william.price@zoetis.com

Kristen Seely

1-973-443-2777 (o)

kristen.seely@zoetis.com

Investor Contacts:

Steve Frank

1-973-822-7141 (o)

steve.frank@zoetis.com

Keith Gaub

1-973-822-7154 (o)

keith.gaub@zoetis.com

Read full story here

Categories
Business

Merck Animal Health completes acquisition of IdentiGEN

Strategic Transaction Enhances Farm-to-Table Animal Traceability Solutions for Livestock and Aquaculture

MADISON, N.J.–(BUSINESS WIRE)–$MRK #AnimalHealth–Merck Animal Health, known as MSD Animal Health outside the United States and Canada, a division of Merck & Co., Inc., Kenilworth, N.J., USA (NYSE:MRK), today announced the completion of its acquisition of IdentiGEN, a leader in DNA-based animal traceability solutions for Livestock and Aquaculture from MML Growth Capital Partners Ireland. Specific terms of the agreement were not disclosed.

IdentiGEN’s technology combines each species’ unique DNA (deoxyribonucleic acid) and data analytics to provide an evidence-based animal traceability solution, called DNA TraceBack®, to accurately and precisely trace beef, seafood, pork and poultry that is verifiable from farm-to-table.

Food producers, processors and retailers are looking for accurate and complete animal traceability solutions that provide full accountability, as well as greater transparency, quality and sustainability of food sources for consumers. The addition of specialized, digital technology within our portfolio of medicines, vaccines and services, provides holistic solutions to help advance animal health and complements our existing identification and monitoring technology that delivers real-time, actionable data and insights to help, improve or enhance animal management and health outcomes.

“Enhanced digital technology will play an increasingly important role in food traceability and food safety, providing customers critical information and actionable data to help ensure a sustainable supply of quality food to protect public health,” said Rick DeLuca, president, Merck Animal Health. “We now will be able to provide end-to-end animal traceability solutions at industry scale to improve the health and safety of animals and ensure even greater transparency in our food supply.”

DeLuca said, “The highly skilled employees at IdentiGEN, led by Ronan Loftus and Ciaran Meghen, exemplify our commitment to The Science of Healthier Animals®, and we look forward to collaborating with the team to leverage our scientific and technical capabilities and expertise to shape the future of animal health.”

In April 2019, Merck Animal Health announced the completion of its acquisition of Antelliq Corporation and its market-leading brands, Allflex Livestock Intelligence, Sure Petcare and Biomark as leaders in emerging digital technology with animal identification, animal monitoring and smart data management for Livestock and Companion Animals. In December 2019, the company acquired Vaki, a leader in fish farming and wild fish conservation monitoring equipment and real-time video monitoring technology to advance fish health and welfare. In June 2020, the company acquired Quantified Ag®, a leading data and analytics company that monitors cattle body temperature and movement in order to detect illness early.

About Merck Animal Health

For more than a century, Merck, a leading global biopharmaceutical company, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases. Merck Animal Health, a division of Merck & Co., Inc., Kenilworth, N.J., USA, is the global animal health business unit of Merck. Through its commitment to The Science of Healthier Animals®, Merck Animal Health offers veterinarians, farmers, pet owners and governments one of the widest ranges of veterinary pharmaceuticals, vaccines and health management solutions and services as well as an extensive suite of digitally connected identification, traceability and monitoring products. Merck Animal Health is dedicated to preserving and improving the health, well-being and performance of animals and the people who care for them. It invests extensively in dynamic and comprehensive R&D resources and a modern, global supply chain. Merck Animal Health is present in more than 50 countries, while its products are available in some 150 markets. For more information, visit www.merck-animal-health.com or connect with us on LinkedIn, Facebook, and Twitter at @MerckAH.

About IdentiGEN

IdentiGEN leads the world in delivering DNA-based solutions which shape the future of food trust. Founded in 1996, IdentiGEN is a pioneer of DNA-based solutions for producers, processors and retailers of meat and seafood products in the Agri-food Industry, with operations in Ireland, Europe, the UK and the USA. Our signature product, DNA TraceBack®, helps safeguard and strengthen the integrity of the supply chain for meat, poultry and seafood products through the world’s most accurate and precise traceability platform. A unique solution for industry, using DNA TraceBack® enables beef, pork, poultry and seafood products to be reliably traced back through production to the farm, parent or individual animal from which they originated.

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the recent global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s 2019 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

Contacts

Merck

Media Contacts:

Jeanette Lewis

+ 1 (973) 294-0318

Jeanette.Lewis@merck.com

Pam Eisele

+1 (267) 305-3558

Pamela.Eisele@merck.com

Merck

Investor Contact:

Michael DeCarbo

+ 1 (908) 740-1807

Michael.DeCarbo@merck.com

Categories
Business

GAN schedules 2020 second quarter financial results conference call for August 20, 2020

LONDON–(BUSINESS WIRE)–$GAN–GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading business-to-business supplier of internet gambling software-as-a-service solutions to the U.S. land-based casino industry, today announced that it will release financial results for the second quarter and six months ended June 30, 2020, after market close on Thursday, August 20, 2020. The Company will host a conference call to discuss these financial results at 4:30 PM ET that same day.

Conference Call Details

Date/Time:

Thursday, August 20, 2020, at 4:30 PM ET

Participant Dial-In Numbers:

United States & Canada:

877-407-8629

United Kingdom:

0-800-756-3429

International:

201-493-6715

To access the call, please dial in approximately five minutes before the start time. An accompanying slide presentation will be available in PDF format on the “Results and Presentations” page of the Company’s website (http://gan.com/investors/results-and-presentations) after issuance of the earnings release.

Webcast

The call will also be simultaneously webcast over the Internet via the following link: https://78449.themediaframe.com/dataconf/productusers/gan/mediaframe/39974/indexl.html.

Market Information Updates

In lieu of the monthly New Jersey and Pennsylvania gaming market press releases the Company has issued over the past several months, GAN will continue to provide these key market information updates as published by the New Jersey Department of Gaming Enforcement and the Pennsylvania Gaming Control Board each month on its website at https://gan.com/market-data. The Company expects to include similar information for key markets that regulate and bring real money gambling online.

About GAN Limited

GAN is a leading business-to-business supplier of internet gambling software-as-a-service solutions to the U.S. land-based casino industry. GAN has developed a proprietary internet gambling enterprise software system, GameSTACK™, which it licenses principally to land-based U.S. casino operators as a turnkey technology solution for regulated real-money internet gambling, encompassing internet gaming, internet sports gaming and virtual Simulated Gaming.

Contacts

Investor Contacts:

GAN
Jack Wielebinski

Head of Investor Relations

(214) 799-4660

jwielebinski@GAN.com

The Equity Group
Adam Prior

(212) 371-8660

aprior@equityny.com

Carolyne Sohn

(415) 568-2255

csohn@equityny.com

Categories
Healthcare

Eagle Pharmaceuticals to discuss second quarter 2020 financial results on August 10, 2020

WOODCLIFF LAKE, N.J.–(BUSINESS WIRE)–Eagle Pharmaceuticals, Inc. (“Eagle” or the “Company”) (Nasdaq: EGRX) today announced that the Company will release its 2020 second quarter financial results on Monday, August 10, 2020, before the market opens.

Scott Tarriff, Chief Executive Officer, and Pete Meyers, Chief Financial Officer, will host a conference call to discuss the results as follows:

Date

Monday, August 10, 2020

Time

8:30 a.m. ET

Toll free (U.S.)

877-876-9173

International

785-424-1667

Webcast (live and replay)

www.eagleus.com, under the “Investor Relations” section

A replay of the conference call will be available for one week after the call’s completion by dialing 800-839-4014 (US) or 402-220-2983 (International) and entering conference call ID EGRXQ220. The webcast will be archived for 30 days at the aforementioned URL.

About Eagle Pharmaceuticals, Inc.

Eagle is a fully integrated pharmaceutical company with research and development, clinical, manufacturing and commercial expertise. Eagle is committed to developing innovative medicines that result in meaningful improvements in patients’ lives. Eagle’s commercialized products include RYANODEX®, BENDEKA®, BELRAPZO®, and its oncology and CNS/metabolic critical care pipeline includes product candidates with the potential to address underserved therapeutic areas across multiple disease states. Additional information is available on Eagle’s website at www.eagleus.com.

Contacts

Investor Relations for Eagle Pharmaceuticals, Inc:
Lisa M. Wilson

T: 212-452-2793

E: lwilson@insitecony.com

Public Relations for Eagle Pharmaceuticals, Inc.:
Faith Pomeroy-Ward

T: 817-807-8044

E: faith@fpwservices.com

Categories
Business

Bogota Financial Corp. reports results for the three and six months ended June 30, 2020

TEANECK, N.J.–(BUSINESS WIRE)–Bogota Financial Corp. (the “Company”) (NASDAQ: BSBK), the holding company for Bogota Savings Bank (the “Bank”), reported net income for the three months ended June 30, 2020 of $1.4 million, compared to net income of $608,000 for the comparable prior year period. The Company reported net income for the six months ended June 30, 2020 of $65,000 compared to a net income of $970,000 for the comparable prior year period. The Company contributed cash and stock with a value of $2.9 million ($2.1 million after-tax) to the Bogota Charitable Foundation during the six months ended June 30, 2020. Without this contribution, net income would have been $2.0 million.

On January 15, 2020, the Company became the holding company for the Bank when it completed the reorganization of the Bank into a two-tier mutual holding company form of organization. In connection with the reorganization, the Company sold 5,657,735 shares of common stock at a price of $10 per share, for gross proceeds of $56.6 million. The Company also issued 263,150 shares of common stock and $250,000 in cash to Bogota Savings Bank Charitable Foundation, Inc., and issued 7,236,640 shares of common stock to Bogota Financial, MHC, and its New Jersey-chartered mutual holding company. Shares of the Company’s common stock began trading on January 16, 2020 on the Nasdaq Capital Market under the trading symbol “BSBK.”

Other Financial Highlights:

  • Total assets decreased $27.9 million, or 3.6%, to $738.7 million from $766.6 million at December 31, 2019. Unfilled subscriptions of $41.5 million from the stock offering were returned following the completion of the stock offering. Excluding these funds as of December 31, 2019, total assets increased by 1.8% during the six months ended June 30, 2020.
  • Net loans increased $50.5 million, or 9.4%, to $587.7 million from $537.2 million at December 31, 2019.
  • Total deposits were $492.4 million, decreasing $5.3 million, or 1.1%, during the six months ended June 30, 2020.
  • Return on average assets was 0.04% for the six-month period ended June 30, 2020 compared to 0.59% for the corresponding period of 2019. Without the charitable foundation contribution, the return on average assets would have been 1.12% for the six-month period ended June 30, 2020.
  • Return on average equity was 0.22% for the six-month period ended June 30, 2020 compared to 5.35% for the same period of 2019. Without the charitable foundation contribution, the return on average equity would have been 6.12% for the six-month period ended June 30, 2020.

As a qualified Small Business Administration lender, we were automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). As of June 30, 2020, we have received and processed 113 PPP applications totaling approximately $10.5 million.

COVID

We are also providing assistance to individuals and small business clients directly impacted by the COVID-19 pandemic by allowing borrowers to modify their loans. Through June 30, 2020, the Company granted $68.0 million of loan modifications which represented 12.0% of the total loan portfolio allowing customers who were affected by the COVID-19 pandemic to defer principal and/or interest payments. These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, these loans will continue to accrue interest and will not be tested for impairment during the short-term modification period. Details with respect to actual loan modification are as follows:

Type of Loan

Number of

Loans

Balance as of

June 30, 2020

Percent of Total Loans as of

June 30, 2020

One- to four-family residential real estate

143

$

42,619,955

7.3%

Commercial real estate

14

19,561,427

3.3%

Multi-family real estate

10

5,293,122

0.9%

Commercial and industrial

2

496,036

0.1%

Consumer

—

—

—

Other

—

—

—

Total

169

$

67,970,540

11.6%

Joseph Coccaro, President and Chief Executive Officer, said, “During the first quarter we successfully converted the Bank to a two-tier mutual holding company structure. We are pleased with our continued strategy to expand our loan portfolio and the positive overall impacts of doing so on assets and income. We continue our efforts to expand our market presence, improve and expand our technology platform and offerings and manage our interest rate risk. We have been pleased with our excellent loan quality, and low loan delinquencies during the first six months of 2020.”

Mr. Coccaro continued, “The COVID-19 pandemic has created turmoil around the globe. Virtually all businesses have been impacted by the mandated business closures and restrictions. Thankfully banking is an essential business and we are working very hard helping our customers with emergency funding, loan deferrals and assistance with the PPP. I am hopeful that through the funding of the PPP, most businesses will rebound and there will be a recovery. The economic impact of the COVID-19 pandemic on the Company’s operations was not material during the first six months ended June 30, 2020. However, there could be a more significant impact on the Company’s financial results going forward due to increases in loan delinquencies, problem assets or foreclosures, a decline in collateral value or an increase in allowance for loan losses. I am optimistic community banking will continue to prosper by supporting individuals and small business looking for a community bank.”

Income Statement Analysis

Compared to the second quarter of 2019, net interest income increased $504,000, or 18.1%, to $3.3 million for the three months ended June 30, 2020. During the same period, our net interest margin increased from 1.75% to 1.88%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 9.8% to 122.67%. For the six months ended June 30, 2020, net interest income increased $773,000, or 13.8%, to $6.4 million. Overall, there was a 9 basis point increase in net interest margin to 1.85%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 9.5% to 121.9%. The increase in net interest margin during the three and six months ended June 30, 2020 was mostly due to the higher ratio of average interest-earning assets to average interest-bearing liabilities.

We recorded a provision for loan losses of $225,000 and $250,000 for the three and six month periods ended June 30, 2020, respectively, compared to no provision for loans losses for the same periods last year. Higher commercial real estate loan balances and increased risks factors associated with COVID 19 were the reasons for the provision.

Non-interest income was $768,000 for the three months ended June 30, 2020, an increase of $628,000, or 451.1%, compared to $139,000 in the prior year period. For the six months ended June 30, 2020, non-interest income totaled $889,000, an increase of $609,000, or 217.9%, from the prior year period. Death benefit proceeds received on our investment in Bank Owned Life Insurance was the primary reason for the increase during both periods.

For the three months ended June 30, 2020, non-interest expenses increased $45,000 to $2.2 million, over the comparable 2019 period. Professional fees increased $130,000, or 208.1%, due to additional expense associated with becoming a public company.

Salaries and employee benefits decreased $18,000, or 1.5%, attributable to deferred salary expense for increased loan volume. The reduction of other general operating expenses was mainly due to decreases in data processing costs, FDIC insurance assessment and occupancy expense.

For the six months ended June 30, 2020, non-interest expenses increased $2.6 million to $7.2 million, over the comparable 2019 period. Data processing costs decreased $426,000, or 57.8%, due to $360,000 in de-conversion expenses in 2019 in connection with the Bank’s data processing conversion. Expenses for the six months ended June 30, 2020 included a $2.9 million contribution to the Bogota Charitable Foundation that was formed during the reorganization of the Bank into a two-tier mutual holding company form of organization. The increase of other general operating expenses was mainly due to increases in professional fees associated with the expense of becoming a public company. Without the contribution to the charitable foundation in 2020 and the de-conversion expense in 2019, non-interest expenses increased $89,000 to $4.4 million compared to the same period last year.

Balance Sheet Analysis

Total assets were $738.7 million at June 30, 2020, representing a decrease of $27.9 million, or 3.6%, from December 31, 2019. Net loans increased $50.5 million or 9.4%, due to new production of $121.4 million, consisting of a relatively equal mix of real estate loans and commercial loans, which was partially offset by $70.9 million in repayments. Securities held to maturity decreased $1.5 million mostly due to maturities in municipal bonds and government agency bonds which were not replaced. Cash and due from banks decreased $76.1 million during the period primarily because of $41.5 million in offering subscriptions that were refunded due to the oversubscription of the stock offering.

Delinquent loans decreased $232,000, or 40.8%, during the six-month period ended June 30, 2020, finishing at 0.1% of total loans, or $337,000. During the same timeframe, non-performing assets increased $85,000, or 14.4%, to $675,000 and were 0.09% of total assets at June 30, 2020. Our allowance for loan losses was 0.38% of total loans and 335.87% of non-performing loans at June 30, 2020.

Total liabilities decreased $79.3 million, or 11.5%, to $612.3 million mainly due to $90.4 million in gross subscriptions that was either converted to common stock or due to the oversubscription of the stock offering. Deposits decreased $5.3 million, or 1.1%, mostly due to a decrease in certificate of deposits as the Bank had a high volume of maturities not all of which were renewed. Federal Home Loan Bank advances increased $16.0 million, or 16.5%, as borrowings were available at lower rates than deposits.

Stockholders’ equity increased $51.4 million to $126.3 million, primarily due $54.6 million of net proceeds raised in the stock offering. At June 30, 2020, the Company’s ratio of average stockholders’ equity-to-total assets was 17.25%, compared to 10.96% at December 31, 2019.

EXPLANATORY NOTE

The Company was formed to serve as the mid-tier stock holding company for the Bank in connection with the reorganization of the Bank and its mutual holding company, Bogota Financial, MHC, into the two-tier mutual holding company structure. As of December 31, 2019 and for the three and six months ended June 30, 2019, the reorganization had not been completed and the Company had no assets or liabilities and had not conducted any business activities other than organizational activities. Accordingly, the unaudited financial statements and other financial information at and for the 2019 periods contained relate solely to the consolidated financial results of the Bank.

About Bogota Financial Corp.

Bogota Financial Corp. is a Maryland corporation organized as the mid-tier holding company of Bogota Savings Bank and is the majority-owned subsidiary of Bogota Financial, MHC. Bogota Savings Bank is a New Jersey chartered stock savings bank that has served the banking needs of its customers in northern and central New Jersey since 1893. It operates from two offices located in Bogota and Teaneck, New Jersey.

Forward-Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened or remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us. As the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income. Our cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experience additional resolution costs.

The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

June 30, 2020

December 31, 2019

Assets

unaudited

audited

Cash and due from banks

$

5,655,248

$

5,176,241

Interest-bearing deposits in other banks

46,154,222

122,686,318

Cash and cash equivalents

51,809,470

127,862,559

Securities available for sale

12,563,822

13,748,561

Securities held to maturity (fair value of $56,100,917 and $56,582,299, respectively)

54,611,029

56,093,317

Loans, net of allowance of $2,266,174 and $2,016,174, respectively

587,680,746

537,157,217

Premises and equipment, net

4,102,503

4,196,753

Federal Home Loan Bank (FHLB) stock

6,324,100

5,672,700

Accrued interest receivable

2,671,225

2,021,360

Bank owned life insurance

16,736,735

17,409,745

Other assets

2,173,950

2,450,042

Total Assets

$

738,673,580

$

766,612,254

Liabilities and Equity

Liabilities

Non-interest bearing

$

25,528,305

$

16,122,231

Interest bearing

466,886,915

481,627,221

Total Deposits

492,415,220

497,749,452

FHLB advances

113,105,606

97,092,484

Advance payments by borrowers for taxes and insurance

2,692,262

3,191,706

Subscription offering proceeds

—

90,349,840

Other liabilities

4,128,541

3,250,925

Total liabilities

612,341,629

691,634,407

Commitments and Contingencies-see note 6

Stockholders’ Equity

Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at June 30, 2020

—

—

Common stock $0.01 par value, 30,000,000 shares authorized, 13,157,525 issued and outstanding at June 30, 2020

131,575

—

Additional Paid-In capital

57,022,232

—

Retained earnings

75,357,002

75,291,512

Unearned ESOP shares (503,465 shares)

(5,879,446

)

—

Accumulated other comprehensive loss

(299,412

)

(313,665

)

Total stockholders’ equity

126,331,951

74,977,847

Total liabilities and stockholders’ equity

$

738,673,580

$

766,612,254

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

Three months ended

June 30,

Six months ended

June 30,

2020

2019

2020

2019

(unaudited)

Interest income

Loans

$

5,245,931

$

5,067,063

$

10,343,182

$

10,010,861

Securities

Taxable

405,146

464,481

836,199

941,701

Tax-exempt

13,220

25,722

24,881

65,950

Other interest-earning assets

151,913

215,427

529,276

444,794

Total interest income

5,816,210

5,772,693

11,733,538

11,463,306

Interest expense

Deposits

2,041,512

2,513,871

4,357,833

4,947,865

FHLB advances

488,854

477,160

1,005,926

918,739

Total interest expense

2,530,366

2,991,031

5,363,759

5,866,604

Net interest income

3,285,844

2,781,662

6,369,779

5,596,702

Provision for loan losses

225,000

—

250,000

—

Net interest income after provision for loan losses

3,060,844

2,781,662

6,119,779

5,596,702

Non-interest income

Fees and service charges

12,327

31,957

32,045

60,440

Bank owned life insurance

749,091

102,164

848,802

202,261

Other

6,228

5,181

8,182

16,976

Total non-interest income

767,646

139,302

889,029

279,677

Non-interest expense

Salaries and employee benefits

1,202,387

1,220,789

2,459,986

2,474,620

Occupancy and equipment

159,376

175,208

328,916

350,572

FDIC insurance assessment

26,000

44,369

71,000

89,456

Data processing

165,211

172,940

311,237

737,043

Advertising

42,180

60,000

101,814

120,000

Director fees

178,894

168,380

365,176

337,945

Professional fees

192,572

62,500

324,906

122,500

Contribution to Charitable Foundation

—

—

2,881,500

—

Other

193,070

210,807

387,771

388,994

Total non-interest expense

2,159,690

2,114,993

7,232,306

4,621,130

Income (loss) before income taxes (benefit)

1,668,800

805,971

(223,498

)

1,255,249

Income tax expense (benefit)

265,727

197,700

(288,988

)

285,160

Net income

$

1,403,073

$

608,271

$

65,490

$

970,089

Earnings per Share

$

0.11

—

$

0.01

—

Weighted average shares outstanding

12,650,748

—

11,675,010

—

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

At or For the Three Months

Ended June 30,

At or For the Six Months

Ended June 30,

2020

2019

2020

2019

Performance Ratios (1):

Return on average assets (2)

0.77

%

0.09

%

0.04

%

0.29

%

Return on average equity (3)

4.46

%

0.83

%

0.22

%

2.66

%

Interest rate spread (4)

1.55

%

1.52

%

1.50

%

1.54

%

Net interest margin (5)

1.88

%

1.75

%

1.85

%

1.76

%

Efficiency ratio (6)

53.28

%

72.41

%

99.64

%

78.64

%

Average interest-earning assets to average interest-bearing liabilities

122.67

%

111.74

%

121.99

%

111.43

%

Net loans to deposits

119.35

%

106.73

%

119.35

%

106.73

%

Equity to assets (7)

17.25

%

11.38

%

17.25

%

11.38

%

Capital Ratios:

Tier 1 capital (to adjusted total assets)

26.73

%

11.14

%

Tier 1 capital (to risk-weighted assets)

26.28

%

17.50

%

Total capital (to risk-weighted assets)

26.26

%

17.98

%

Common equity Tier 1 capital (to risk-weighted assets)

17.59

%

17.50

%

Asset Quality Ratios:

Allowance for loan losses as a percent of total loans

0.38

%

0.37

%

Allowance for loan losses as a percent of non-performing loans

335.87

%

372.64

%

Net recoveries to average outstanding loans during the period

0.00

%

0.00

%

Non-performing loans as a percent of total loans

0.11

%

0.10

%

Non-performing assets as a percent of total assets

0.09

%

0.08

%
____________________
(1)

Performance ratios are annualized.
(2)

Represents net income divided by average total assets.
(3)

Represents net income divided by average equity.
(4)

Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 30%.
(5)

Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 30% for 2020 and 2019.
(6)

Represents non-interest expenses divided by the sum of net interest income and non-interest income.
(7)

Represents average equity divided by average total assets.

 

Contacts

Joseph Coccaro – President & CEO

201-862-0660 ext. 1110

Categories
Business

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

Read full story here

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

 

Categories
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

Phibro Animal Health Corporation declares quarterly dividend

TEANECK, N.J.–(BUSINESS WIRE)–The Board of Directors of Phibro Animal Health Corporation (Nasdaq:PAHC) today declared a quarterly cash dividend of $0.12 per share on its Class A common stock and Class B common stock, payable on September 23, 2020, to stockholders of record at the close of business on September 2, 2020.

About Phibro Animal Health Corporation

Phibro Animal Health Corporation is a diversified global developer, manufacturer and supplier of a broad range of animal health and mineral nutrition products for livestock, helping veterinarians and farmers produce healthy, affordable food while using fewer natural resources. For further information, please visit www.pahc.com.

Contacts

Richard Johnson

Chief Financial Officer, Phibro Animal Health Corporation

+1 201-329-7300

investor.relations@pahc.com