Tag: COVID-19

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Business

New data from HouseCanary reveals COVID-19’s resurgence is creating an attractive ‘seller’s market’ for homeowners

Despite Resurgent Homebuyer Demand, New Listing Volume Dropped 12% on a Week-Over-Week Basis and Net New Listings are Down 17.5% Compared to the Same Point in 2019

Sustained Supply Constraints Throughout the Spring and Summer Have Kept Listing Prices Above Pre-Pandemic Levels Across 29 States

Outlook for a V-Shaped Housing Market Recovery in 2020 Remains Dim as a Result of Recessionary Concerns, Election Cycle Uncertainty and the Current Year-Over-Year Drop in New Listings

SAN FRANCISCO–(BUSINESS WIRE)–HouseCanary, Inc. (“HouseCanary”), a leading provider of residential real estate data and home valuations, today released its latest Market Pulse report, covering 22 listing-derived metrics and comparing data between the week ending July 24, 2020 and the week ending March 13, 2020. The Market Pulse is an ongoing review of proprietary data and insights from HouseCanary’s nationwide platform.


Jeremy Sicklick, Co-founder and Chief Executive Officer of HouseCanary, commented: “The resurgence of COVID-19 has solidified a bona fide seller’s market across more than half of the country. While pandemic uncertainty appears to be sidelining a growing number of prospective home sellers, pent-up demand on the buy-side remains quite strong due to attractive borrowing terms and a surge in first-time homebuyers. Several large states, ranging from California to Florida, have seen their median home price listings rise rather significantly since mid-March. The question that remains is whether this market environment will be able to persist beyond. Our data continues to suggest the probability of a V-shaped housing market recovery remains dim given recessionary concerns, election year uncertainty and the overall decline in listing activity.”

Select findings from this week’s Market Pulse are below. Be sure to review the Market Pulse in full for extensive state-level data.

Weekly New Listing Volume (Single-Family Detached Homes):

  • New listing volume is down 12.2% week-over-week
  • New listing volume is down 21.1% nationwide compared to the week ending March 13, when most COVID-19 measures were implemented
  • Decline in new listing activity since the week ending March 13, broken down by home price:
    • $0-$200k: (-24.9%)
    • $200k-$400k: (-23.4%)
    • $400k-$600k: (-19.3%)
    • $600k-$1mm: (-14.1%)
    • >$1mm: (-7.6%)
  • New listing volume is up 24.1% from its lowest point in mid-April

Total Net New Listings:

  • Since the week ending March 13, there have been 1,146,138 net new listings placed on the market, representing a 17.5% decrease relative to the same period in 2019
  • For the week ending July 24, there were 55,192 net new listings placed on the market, representing a 14.0% decrease compared to the previous week
  • Percentage of total net new listings since March 13, broken down by home price:
    • $0-$200k: 22.5%
    • $200k-$400k: 45.0%
    • $400k-$600k: 17.7%
    • $600k-$1mm: 10.0%
    • >$1mm: 4.8%

Median Listing Price Activity (Single-Family Detached Homes):

  • The median price for new listings has risen in 29 states since the start of COVID-19 in March
  • Several states heavily impacted by the pandemic have seen material listing price growth since the onset of the pandemic:
    • California: +14.7%
    • Kentucky: +12.7%
    • Florida: +7.2%
    • New Jersey: +6.1%
    • Texas: +3.0%

Weekly Contract Volume (Single-Family Detached Homes):

  • Weekly contract volume is down 6.4% week-over-week
  • Percent change in contract volume week-over-week, broken down by home price:
    • $0-$200k: (-4.6%)
    • $200k-$400k: (-6.7%)
    • $400k-$600k: (-8.0%)
    • $600k-$1mm: (-4.9%)
    • >$1mm: (-8.6%)
  • Weekly contract volume is up 19.2% nationwide compared to the week ending March 13, when most COVID-19 measures were implemented
  • Percent change in weekly contract volume since the week ending March 13, broken down by home price:
    • $0-$200k: +5.3%
    • $200k-$400k: +16.0%
    • $400k-$600k: +29.3%
    • $600k-$1mm: +44.8%
    • >$1mm: +51.4%
  • Weekly contract volume is up 85.8% from its lowest level in mid-April

Total Listings Under Contract:

  • Since the week ending March 13, 1,299,238 properties have gone into contract across 41 states, representing a 2.2% decrease relative to the same period in 2019
  • For the week ending July 24, there were 75,662 listings that went under contract nationwide
  • Percentage of total contract volume since the week ending March 13, broken down by home price:
    • $0-$200k: 24.8%
    • $200k-$400k: 45.3%
    • $400k-$600k: 16.9%
    • $600k-$1mm: 9.0%
    • >$1mm: 4.0%

As a nationwide real estate broker, HouseCanary’s broad multiple listing service (“MLS”) participation allows us to evaluate listing data and aggregate the number of new listings as well as the number of new listings going into contract for all single-family detached homes observed in the HouseCanary database. Using this data, HouseCanary continues to track listing volume, new listings, and median list price for 41 states and 50 individual Metropolitan Statistical Areas (“MSAs”).

About HouseCanary:

Founded in 2013, valuation-focused real estate brokerage HouseCanary provides software and services to reshape the real estate marketplace. Financial institutions, investors, lenders, mortgage investors, and consumers turn to HouseCanary for industry-leading valuations, forecasts, and transaction-support tools. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com.

Contacts

Denise Dunckel

press@housecanary.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

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Categories
Business

Church & Dwight reports Q2 results

2020 Second Quarter Results

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

2020 Full Year Outlook Raised from Original Outlook

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

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

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

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

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

Second Quarter Review

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

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

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

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

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

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

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

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

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

Operating Cash Flow

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

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

2020 New Products

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

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

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

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

Outlook for 2020

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

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

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

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

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

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

2 See non-GAAP reporting reconciliations.

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

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

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

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

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

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

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

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

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

Six Months Ended

(In millions, except per share data)

June 30, 2020

June 30, 2019

June 30, 2020

June 30, 2019

Net Sales

$

1,194.3

$

1,079.4

$

2,359.5

$

2,124.1

Cost of sales

634.7

597.9

1,267.9

1,171.8

Gross Profit

559.6

481.5

1,091.6

952.3

Marketing expenses

122.3

129.1

218.7

227.2

Selling, general and administrative expenses

186.6

165.0

307.6

296.9

Income from Operations

250.7

187.4

565.3

428.2

Equity in earnings of affiliates

2.0

1.7

3.6

3.4

Other income (expense), net

(16.7

)

(18.8

)

(33.5

)

(36.2

)

Income before Income Taxes

236.0

170.3

535.4

395.4

Income taxes

46.3

31.8

115.9

81.2

Net Income

$

189.7

$

138.5

$

419.5

$

314.2

Net Income per share – Basic

$

0.77

$

0.56

$

1.71

$

1.28

Net Income per share – Diluted

$

0.75

$

0.55

$

1.67

$

1.25

Dividends per share

$

0.24

$

0.23

$

0.48

$

0.45

Weighted average shares outstanding – Basic

246.2

246.4

245.9

246.2

Weighted average shares outstanding – Diluted

251.3

252.7

251.2

252.3

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions)

June 30, 2020

December 31, 2019

Assets

Current Assets

Cash and Cash Equivalents

$

451.7

$

155.7

Accounts Receivable

344.5

356.4

Inventories

455.5

417.4

Other Current Assets

25.0

26.9

Total Current Assets

1,276.7

956.4

Property, Plant and Equipment (Net)

568.7

573.0

Equity Investment in Affiliates

10.6

9.7

Trade Names and Other Intangibles

2,697.9

2,750.0

Goodwill

2,078.2

2,079.5

Other Long-Term Assets

286.9

288.8

Total Assets

$

6,919.0

$

6,657.4

Liabilities and Stockholders’ Equity

Short-Term Debt

$

65.8

$

252.9

Other Current Liabilities

930.8

839.4

Total Current Liabilities

996.6

1,092.3

Long-Term Debt

1,811.4

1,810.2

Other Long-Term Liabilities

1,112.2

1,087.1

Stockholders’ Equity

2,998.8

2,667.8

Total Liabilities and Stockholders’ Equity

$

6,919.0

$

6,657.4

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flow (Unaudited)

Six Months Ended

(Dollars in millions)

June 30, 2020

June 30, 2019

Net Income

$

419.5

$

314.2

Depreciation and amortization

92.4

82.9

Deferred income taxes

11.4

6.0

Non-cash compensation

15.8

15.0

Gain on sale of assets

(3.0

)

–

Other

0.7

1.7

Subtotal

536.8

419.8

Changes in assets and liabilities:

Accounts receivable

5.9

(37.3

)

Inventories

(42.7

)

(17.9

)

Other current assets

(2.1

)

0.9

Accounts payable and accrued expenses

35.8

6.7

Income taxes payable

87.1

(11.6

)

Change in fair value of business acquisition liabilities

(20.7

)

–

Other

(1.5

)

(9.4

)

Net cash from operating activities

598.6

351.2

Capital expenditures

(30.9

)

(23.6

)

Acquisitions

–

(475.0

)

Proceeds from sale of assets

7.0

–

Other

(2.5

)

(3.8

)

Net cash (used in) investing activities

(26.4

)

(502.4

)

Net change in short-term debt

(186.2

)

109.8

Payment of cash dividends

(118.1

)

(112.0

)

Proceeds from stock option exercises

44.9

37.0

Purchase of treasury stock

–

(100.0

)

Payment of contingent consideration

(14.5

)

–

Deferred financing and other

(0.1

)

(2.5

)

Net cash (used in) financing activities

(274.0

)

(67.7

)

F/X impact on cash

(2.2

)

0.1

Net change in cash and cash equivalents

$

296.0

$

(218.8

)

2020 and 2019 Product Line Net Sales

Three Months Ended

Percent

6/30/2020

6/30/2019

Change

Household Products

$

544.7

$

464.3

17.3

%

Personal Care Products

386.4

355.0

8.8

%

Consumer Domestic

$

931.1

$

819.3

13.6

%

Consumer International

187.5

186.6

0.5

%

Total Consumer Net Sales

$

1,118.6

$

1,005.9

11.2

%

Specialty Products Division

75.7

73.5

3.0

%

Total Net Sales

$

1,194.3

$

1,079.4

10.6

%

Six Months Ended

Percent

6/30/2020

6/30/2019

Change

Household Products

$

1,039.0

$

907.6

14.5

%

Personal Care Products

783.1

696.6

12.4

%

Consumer Domestic

$

1,822.1

$

1,604.2

13.6

%

Consumer International

386.1

373.3

3.4

%

Total Consumer Net Sales

$

2,208.2

$

1,977.5

11.7

%

Specialty Products Division

151.3

146.6

3.2

%

Total Net Sales

$

2,359.5

$

2,124.1

11.1

%

Contacts

Rick Dierker

Chief Financial Officer

609-806-1200

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Categories
Business

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

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

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

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

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

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

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

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

1

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

Financial Results for the Second Quarter of 2020

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

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

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

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

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

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

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

2

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

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

Financial Results for the First Two Quarters of 2020

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

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

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

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

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

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

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

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

Full Year Fiscal 2020 Guidance

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

Conference Call

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

About Non-GAAP Financial Measures and Items Affecting Comparability

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

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

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

About B&G Foods, Inc.

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

Forward-Looking Statements

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

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

June 27,

December 28,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

181,200

$

11,315

Trade accounts receivable, net

141,216

143,908

Inventories

356,803

472,187

Prepaid expenses and other current assets

34,434

25,449

Income tax receivable

4,196

8,934

Total current assets

717,849

661,793

Property, plant and equipment, net

283,827

304,934

Operating lease right-of-use assets, net

35,925

38,698

Goodwill

598,860

596,391

Other intangible assets, net

1,606,164

1,615,126

Other assets

3,017

3,277

Deferred income taxes

6,180

7,371

Total assets

$

3,251,822

$

3,227,590

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$

122,887

$

114,936

Accrued expenses

58,780

55,659

Current portion of operating lease liabilities

10,946

9,813

Current portion of long-term debt

4,500

5,625

Income tax payable

2,297

454

Dividends payable

30,476

30,421

Total current liabilities

229,886

216,908

Long-term debt

1,874,442

1,874,158

Deferred income taxes

268,962

254,339

Long-term operating lease liabilities, net of current portion

28,003

31,997

Other liabilities

33,380

37,646

Total liabilities

2,434,673

2,415,048

Stockholders’ equity:

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

—

—

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

642

640

Additional paid-in capital

—

—

Accumulated other comprehensive loss

(44,057

)

(31,894

)

Retained earnings

860,564

843,796

Total stockholders’ equity

817,149

812,542

Total liabilities and stockholders’ equity

$

3,251,822

$

3,227,590

Contacts

Investor Relations:

ICR, Inc.

Dara Dierks

866.211.8151

Media Relations:

ICR, Inc.

Matt Lindberg

203.682.8214

Read full story here

Categories
Business

AM Best affirms credit ratings of Union Medical Benefits Society Limited

SINGAPORE–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Rating of “a” of Union Medical Benefits Society Limited (UniMed) (New Zealand). The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect UniMed’s balance sheet strength, which AM Best categorises as very strong, as well as its strong operating performance, limited business profile and appropriate enterprise risk management.

UniMed’s balance sheet strength assessment is supported by its risk-adjusted capitalisation, which AM Best categorised as strongest in fiscal-year 2019, and is expected to remain at this level over the medium term, as measured by Best’s Capital Adequacy Ratio (BCAR). This reflects the company’s low underwriting leverage and prudent investment approach. In addition, AM Best views the company as having a favourable liquidity position. As a not-for-profit insurer, UniMed has no dividend commitments, but AM Best considers its financial flexibility as limited. Notwithstanding this, the company’s sizeable capital buffer provides protection against potential adverse developments in future earnings or balance sheet items.

AM Best views UniMed’s operating performance to be strong, with a five-year average return-on-equity ratio of 9.9% and five-year average operating ratio of 87.9% (fiscal-years 2015-2019), albeit with a moderate level of volatility over this period. The company’s overall earnings have been driven by sound underwriting performance and stable investment returns. UniMed benefits from an efficient cost structure that allows it to offer competitive health coverage and premiums to its members. The company’s loss ratio also has reduced over the past several years, driven in part by improvements in its surgical claims approval process and diligent control over timely and appropriate rates adjustments. While the public health care system in New Zealand is responsible for the pandemic response to COVID-19, AM Best does expect a level of volatility in UniMed’s prospective loss experience. For fiscal-year 2020, claims volumes are expected to fall from the deferral of elective surgeries during the country’s lockdown period, followed by a subsequent catch up in claims activity over the coming fiscal periods.

AM Best assesses UniMed’s business profile as limited. The company is a small-sized, not-for-profit insurer with a market share of 4% in New Zealand’s health insurance industry, based on 2019 gross written premiums. UniMed’s underwriting portfolio continues to have limited product line and geographical diversification. In addition, the company has a concentration toward a few large group medical accounts, which increases the susceptibility of overall earnings to changes in the performance of these key accounts. Despite ongoing challenging market conditions, UniMed’s membership has increased in fiscal-year 2019 due to a portfolio transfer from The Education Benevolent Society Incorporated and its newly launched retail offering. Prospectively, UniMed’s top line may be affected adversely due to cancellations and weaker sales as a result of economic downturn related to COVID-19.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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 specialising 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

Sin Yee Chuah

Financial Analyst
+65 6303 5022
sinyee.chuah@ambest.com

Doniella Pliss
Director, Analytics
+65 6303 5024
doniella.pliss@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

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Business

Majesco announces new and innovative updates for Majesco’s billing for P&C

These updates reflect the monthly updates for the last seven months that include next-generation capabilities needed to meet the demands of today’s digital customer

MORRISTOWN, N.J.–(BUSINESS WIRE)–Majesco (NASDAQ: MJCO), a global leader of cloud insurance software, today announced the new and innovative updates for Majesco’s Billing for P&C, representing the monthly updates for the last seven months. Rather than providing periodic releases, Majesco provides monthly, automated releases to keep customers at the leading edge and enable them to rapidly respond to market changes.

Billing has become a key component of carriers’ customer engagement and digital strategies – recognizing the growing demand for new payment methods, billing plans, access to real-time billing information, electronic billing payments, and on-the-spot adjustments due to unprecedented market shifts such as the COVID-19 pandemic. Cloud-based solutions like Majesco Billing for P&C are helping insurers not only modernize and optimize their business, but also to create a new business for the future. Four of the top 10 P&C insurers in the US are using the market leading Majesco Billing for P&C.

“Billing can seem like a routine back end process, but it is one that touches every customer and done wrong, can have a tremendously negative impact on the customer relationship. It is a powerful signal of the kind of customer service that will be delivered by an insurer across all touchpoints,” commented Karlyn Carnahan, Head of Celent’s North American Property Casualty business. “Utilizing a seamless and flexible solution allows insurers to deliver on an important “moment of truth” while freeing up resources to continue to transform the customer experience in other areas.”

Some of the new and innovative enhancements for Majesco Billing for P&C to support digital customer engagement and operational optimization include:

Advanced Capabilities for Moratoriums – Enable carriers to serve their customers and ease financial hardships through automated processes that can otherwise be a very manual labor-intensive process, especially true in the context of ongoing COVID-19 pandemic. The enhanced support includes leniency towards fees, late charges and collections etc. Additionally, on return to normalcy, the automated processes can automatically spread unpaid balances over multiple installments even going beyond policy expiry date based on customer preferences.

Expanded Payment Gateways – Leverage pre-built integrations for frictionless and secure ACH and Credit Card processing with payment gateways including Chase Paymentech, One Inc and CyberSource.

Automated Agency Payment Upload – Support for electronic upload of agency payments followed by automated payment allocation and reconciliation process. This enables the carriers to focus on collections and work on discrepancies instead of spending days and weeks on reconciliation through manual data entry.

Enhanced Data Extraction Utility – Mask and export production data to other non-production environments for analysis purposes while ensuring sensitive customer data is masked following data privacy and security compliance requirements.

Cohesive Event-Based Communication – Via messaging queues, enable asynchronous event-based communication between systems providing consistency, flexibility, reliability and scalability of processes.

Robust Open API Catalog and Gateway – Expanded API catalog with over 200 additional OAS3.0 Compliant APIs available to rapidly and dynamically integrate with other systems and Majesco Digital1st® EcoExchange innovative partner solutions over an enterprise gateway servicing all APIs with enterprise monitoring and servicing feature for Majesco CloudInsurer® customers.

Extensive Performance & Scalability Gains – Majesco Billing for P&C is now certified for 100 million policies with 1000 concurrent users, providing extensive scale for large insurers.

“A new generation of insurance buyers with different needs and expectations, coupled with unprecedented market shifts, have created both a challenge and opportunity for next generation billing platforms,” said Manish Shah, President and Chief Product Officer at Majesco. “Today’s announcement continues the incredible momentum that we’ve built in enabling insurers, reinsurers, InsurTechs and MGAs to modernize and optimize the billing experience for their end users, while at the same time innovate with new billing options and capabilities, putting them at the forefront of digital business transformation.”

The latest enhancements underscore Majesco’s relentless innovation and commitment to helping their customers transform to a digital customer centric strategy that propels them into the future of insurance.

About Majesco

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

Cautionary Language Concerning Forward-Looking Statements

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

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

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

Contacts

Laura Tillotson

Director, Marketing Communications and Creative Services

+ 201 230 0752

laura.tillotson@majesco.com

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Business

NICE Satmetrix Benchmark finds 57% of contact center employees working from home due to COVID-19 are now more likely to recommend employer

However, 71% of contact center managers say the shift to work at home has had a significant impact on customers

HOBOKEN, N.J.–(BUSINESS WIRE)–NICE (Nasdaq: NICE) today announced that the NICE Satmetrix Agent Experience at Home Benchmark found that 57% of contact center employees working from home due to COVID-19 are now more likely to recommend their employers to friends, family, or peers than they were before the transition to working remotely. However, in contrast to this positive impact on employee Net Promoter Score (eNPS), 71% of contact center managers say that their organization’s shift to work at home has had a significant impact on customers.

With the transition to remote work environments, today’s customer service managers and their teams are dealing with multiple challenges all at once, including increased interaction volume across all channels; longer handle times, as service interactions become the first line of support for distressed consumers; more demanding customer needs, as agents are dealing with new, unusual requests that are more complex and sometimes outside their direct control; and a new remote work methodology.

NICE Satmetrix co-founded NPS and is a trusted source for data and insights used to improve customer satisfaction, loyalty, and advocacy, and reduce customer churn. The NICE Satmetrix Agent Experience at Home Benchmark identified three key drivers that improved eNPS that organizations can apply to increase employee engagement:

  • Providing the Right Tools and Technology
  • Communicating Effectively
  • Taking Quick Action for Employees

To address these challenges, NICE has recently introduced CXone@home to enable the safe transition of contact center agents to work from home within hours, for organizations of all sizes and verticals. It is powered by the market-leading CXone cloud contact center platform and is offered at no charge for 60 days for new customers. Purpose-built for remote workforces, CXone@home also includes a complete suite of workforce engagement and optimization (WFO) capabilities – including quality and coaching with analytics, performance management, and workforce forecasting and scheduling – to ensure agents and managers are productive while working from home. The demand for CXone@home has been unprecedented by organizations of all sizes with legacy on-premises infrastructures. NICE also recently launched WEM@home and NEVA@home to drive immediate impact on service excellence for work at home employees.

“NICE is pleased to make possible the quick transition to work at home for thousands of contact center agents and managers,” said Barry Cooper, NICE Enterprise Group President. “Many organizations that have shifted to work from home now face challenges of engaging and ensuring performance of their newly remote and dispersed workforce, while at the same time the nature and volume of the work are rapidly changing. These same organizations have requested CXone@home to help them deal with these challenges.”

Mr. Cooper added, “COVID-19 is changing how people work and organizations operate. Companies are adapting in order to ensure business continuity, employee engagement, and performance. NICE is dedicated to empowering exceptional customer service in times of change.”

As the leading cloud platform for contact centers, CXone has a global, geographically redundant cloud infrastructure with built-in elasticity to dynamically scale up or down based on demand. NICE inContact proactively monitors and continuously forecasts demand with reserves for immediate spikes in volume and the ability to add data and storage capacity immediately. Customers can rely on the 99.99% guaranteed availability on carrier-grade network with global data centers and points of presence (POPs) as well as 24/7/365 network operations monitoring. Contact center agents using NICE inContact CXone are operating in over 100 countries.

About the NICE Satmetrix Agent Experience at Home Benchmark

In response to COVID-19, thousands of contact center agents are now working from home, helping meet customer needs across the globe. NICE Satmetrix fielded a groundbreaking benchmark to help organizations better understand agent experience at home and learn how to proactively improve that experience while powering exceptional customer experience. Organizations interested in fielding the survey at no cost to their teams, in order to compare themselves to the benchmark, may register here.

NICE Satmetrix gives enterprises the power to unlock the value of CX data and insights – across the holistic customer journey from the contact center and beyond – to increase customer satisfaction, loyalty, and advocacy and reduce customer churn. A holistic, unified, and integrated Customer Experience Management (CEM) solution, NICE Satmetrix delivers actionable customer experience insights to roles across the organization that are dynamic, predictive, and prescriptive. NICE Satmetrix co-founded NPS and built its complete solution from the ground up to operationalize customer feedback insights all along the customer journey.

About NICE

NICE (Nasdaq: NICE) is the world’s leading provider of both cloud and on-premises enterprise software solutions that empower organizations to make smarter decisions based on advanced analytics of structured and unstructured data. NICE helps organizations of all sizes deliver better customer service, ensure compliance, combat fraud and safeguard citizens. Over 25,000 organizations in more than 150 countries, including over 85 of the Fortune 100 companies, are using NICE solutions. www.nice.com.

Trademark Note: NICE and the NICE logo are trademarks or registered trademarks of NICE Ltd. All other marks are trademarks of their respective owners. For a full list of NICE’s marks, please see: www.nice.com/nice-trademarks.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including the statements by Mr. Cooper, are based on the current beliefs, expectations and assumptions of the management of NICE Ltd. (the “Company”). In some cases, such forward-looking statements can be identified by terms such as “believe,” “expect,” “seek,” “may,” “will,” “intend,” “should,” “project,” “anticipate,” “plan,” “estimate,” or similar words. Forward-looking statements are subject to a number of risks and uncertainties that could cause the actual results or performance of the Company to differ materially from those described herein, including but not limited to the impact of changes in economic and business conditions, including as a result of the COVID-19 pandemic; competition; successful execution of the Company’s growth strategy; success and growth of the Company’s cloud Software-as-a-Service business; changes in technology and market requirements; decline in demand for the Company’s products; inability to timely develop and introduce new technologies, products and applications; difficulties or delays in absorbing and integrating acquired operations, products, technologies and personnel; loss of market share; an inability to maintain certain marketing and distribution arrangements; the Company’s dependency on third-party cloud computing platform providers, hosting facilities and service partners;, cyber security attacks or other security breaches against the Company; the effect of newly enacted or modified laws, regulation or standards on the Company and our products and various other factors and uncertainties discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”). For a more detailed description of the risk factors and uncertainties affecting the company, refer to the Company’s reports filed from time to time with the SEC, including the Company’s Annual Report on Form 20-F. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company undertakes no obligation to update or revise them, except as required by law.

Contacts

Corporate Media
Christopher Irwin-Dudek, 201-561-4442, chris.irwin-dudek@nice.com

Investors
Marty Cohen, +1 551 256 5354, ET, ir@nice.com
Yisca Erez +972 9 775 3798, CET, ir@nice.com

Categories
Business

COVID-19 crushes construction starts in most metro areas during first-half 2020

New York and Washington DC top the list despite sizable declines in construction

HAMILTON, N.J.–(BUSINESS WIRE)–The COVID-19 pandemic and resulting recession have wreaked havoc on U.S. building markets. According to Dodge Data & Analytics, commercial and multifamily starts were quite healthy during January and February but stalled as the pandemic hit the nation in March. For the first three months of 2020, U.S. multifamily and commercial building starts inched up 1% from the same period of 2019. The commercial and multifamily group is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Not included in this ranking are institutional building projects (such as educational facilities, hospitals, convention centers, casinos, transportation terminals), manufacturing buildings, single family housing, public works, and electric utilities/gas plants.


The full force of the pandemic bore down on U.S. construction starts in April as economic activity virtually shut down and local restrictions on construction took effect. Construction resumed in some areas in May allowing starts to post a mild gain over the month. Advances continued in June. However, the damage to commercial and multifamily construction during the first half of the year was palpable. Starts plunged 22% below the first half of 2019, with only warehouse construction posting a very small gain. Commercial and multifamily construction starts in the top 20 metropolitan areas posted a similar drop of 22% through the first six months of 2020.

In the top 10 metro areas, commercial and multifamily starts slid 21% and only one metro area posted an increase. The New York metro area held on to its top spot, despite falling 24% below year-ago levels to $11.5 billion. Washington DC held to second place even though commercial and multifamily construction starts fell 42% to $4.2 billion. The Dallas TX metro area rounded out the top three, with commercial and multifamily activity dropping just 2% to $3.8 billion. The remaining markets in the top 10 were Los Angeles CA (-18% to $3.3 billion), Chicago IL (-9% to $3.0 billion), Boston MA (-31% to $3.0 billion), Miami FL (-16% to $2.8 billion), Phoenix AZ (+82% to $2.8 billion), Austin TX (-12% to $2.4 billion), and Houston TX (-38% to $2.4 billion).

Among the second-tier (ranked 11-20) metro areas, commercial and multifamily starts plummeted 25% with just one metro area posting an increase. The second tier metros include Atlanta GA (-32% to $2.4 billion), Philadelphia PA (-25% to $2.1 billion), Seattle WA (-26% to $1.6 billion), Orlando FL (-28% to $1.3 billion), Nashville TN (-45% to $1.3 billion), Portland OR (-33% to $1.1 billion), Denver CO (-15% to $1.1 billion), Kansas City MO (-20% to $1.1 billion), Tampa FL (-19% to $941 million), and Detroit MI (+96% to $929 million).

“The COVID-19 pandemic and recession have devastated most local construction markets,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Across the board, building projects have been halted or delayed with virtually no sector immune from damage. Construction starts have begun to increase from their April lows and there is cautious optimism that as the year progresses construction markets around the country will begin a modest recovery. However, the recent acceleration of COVID-19 cases in the South and West as well as the upcoming expiration of expanded unemployment insurance benefits (from the CARES Act) puts the recovery at significant risk and could undermine the construction sector’s ability to grow.”

During the first half of 2020, commercial and multifamily starts in New York NY fell 24% to $11.5 billion relative to the first six months of 2019. Commercial starts were 18% lower, a relatively sanguine decline given the almost two-month ban on nonessential construction in the city. However, the modest impact on construction was due to the start of two very large office projects that broke ground in February — the $1.3 billion Two Manhattan West office building and the $760 million Disney/ABC Headquarters. Removing those two buildings would have resulted in a 50% decline in commercial starts during the first half of the year. Multifamily starts dropped 29% in the first six months of the year. The largest multifamily projects to get underway were the $420 million Hunter’s Point South mixed-use project in Long Island City NY and the $260 million 451 10th Ave. apartment building.

In Washington DC, commercial and multifamily starts fell 42% to $4.2 billion during the first half of 2020 relative to the same period of 2019. Multifamily starts lost 27% over this year’s first six months. The largest multifamily projects were the $150 million Ripley II–Solaire Apartments in Silver Spring MD and the $150 million Storey Park mixed-use building in Washington DC. Commercial starts fell 50% during the first half of the year, with the only gain coming from the hotel sector, which posted a $67 million gain (38%) over 2019. The largest commercial project to break ground in the Washington DC metro was the $306 million Aligned Energy Data Center (Building II) in Ashburn VA. Amazon Inc. also broke ground on two buildings associated with the HQ2 project in Arlington VA, each totaling $240 million.

Commercial and multifamily starts in the Dallas TX metro area hit $3.8 billion in the first six months of the year, a decline of just 2% from 2019’s first half. Multifamily starts gained 8%, one of the few top metros to post a gain in this market. The largest multifamily projects to get started in the first six months were the $75 million Novel Turtle Creek residential tower in Dallas TX and the $65 million Shannon Creek apartments in Burleson TX. Commercial starts fell 6% in this year’s first six months, with declines in hotel, office, and parking structures partly offset by gains in retail and warehouse starts. The largest commercial projects were the $136 million Epic Deep Ellum (building II) in Dallas TX and the $100 million American Airlines flight kitchen (food service is considered part of the retail sector).

Los Angeles CA commercial and multifamily starts dropped 18% during the first six months of 2020 to $3.3 billion. Commercial starts fell 9% on a year-to-date basis, with strength coming from the office market which posted a large gain. That gain, however, was not enough to offset declines elsewhere in the commercial space. The largest commercial projects to break ground during the first half of 2020 were the $355 million Fig + Pico AC Marriott/Hilton hotel in Los Angeles and the $240 million first phase of the Iceberg Tower office project in Burbank. Multifamily starts were down 26% over the same time period. The largest multifamily projects to start during the first half of the year were the $95 million 3535 W 8th St. mixed-use project in Los Angeles and the $93 million First Point residential building in Santa Ana CA.

Commercial and multifamily starts in Chicago IL were 9% lower on a year-to-date basis through June, reaching $3.0 billion. Commercial starts increased 24% on the strength of a near-doubling in office starts as well as an increase in hotel construction that more than offset steep declines in retail, warehouses, and parking structures. The two largest commercial projects to get underway in the first six months of 2020 were the $476 million BMO Office Tower and the $360 million Wolf Point South Tower B, both in Chicago. Multifamily starts in 2020 were 44% lower than in the first half of 2019. The largest multifamily structures to get started were the $150 million 354 N Union apartments in Chicago and the $100 million Maple Street Lofts in Mount Prospect.

During the first half of 2020, commercial and multifamily starts in Boston MA declined by 30% to $3.0 billion. Multifamily starts dropped 10% on a year-to-date basis. The largest multifamily projects to get underway were the $150 million Cambridge Crossing (Parcel I) complex in Cambridge MA and the $115 million Woburn Avalon Bay project in Woburn MA. Starts on the commercial side fell 43% with all commercial sectors except warehouses posting a decline. The largest commercial projects were the $450 million first phase of the South Station Office Tower and the $250 million Seaport Square/400 Summer Street office building, both in Boston.

Miami FL commercial and multifamily starts fell 16% year-to-date through June to $2.8 billion. Multifamily construction was 11% lower over the same time period. The largest multifamily projects to break ground in the first six months were the $249 million Downtown 5th Luxury Apartments in Miami and the $115 million Miami Urban Village apartments in Homestead. On the commercial side, starts were 22% lower, with warehouse starts the only sector to post a gain year-to-date. The largest commercial projects were the $80 million Pier Sixty-Six Hotel and a $67 million Home Depot distribution center.

Commercial and multifamily construction starts in Phoenix AZ bucked the national trend posting a sizeable 82% increase to $2.8 billion during the first half of 2020 relative to the same time frame in 2019. The increase was fueled by the start of some sizeable projects. Multifamily starts rose sharply, jumping 85%. The largest multifamily projects to get started were the $300 million Pier 202 mixed-use building and the $125 million Adeline Residences at Collier Center, both in Tempe. Commercial starts meanwhile rose 79%. The largest commercial projects were the $200 million 100 Mill Ave office development and the $115 million Park 303 warehouse building.

Year-to-date commercial and multifamily construction starts in Austin TX fell 12% through June to $2.4 billion. Multifamily starts increased 21% in the first half of 2020, boosted by the $150 million 44 East Condo Tower and the $120 million Hanover Republic Square apartment building. Commercial starts fell 28% during the first six months despite sizeable gains in warehouse and hotel starts. The largest commercial projects were the $300 million Project Charm Amazon distribution center and the $89 million Capitol Complex Office Building.

Completing the top 10 for commercial and multifamily construction starts was Houston TX where starts were 38% lower at $2.4 billion through the first six months of 2020. Multifamily starts posted a 38% decline through June. The largest multifamily projects to break ground were the $217 million Hanover Square & Bayou Apartments as well as the $70 million Boone Manor Apartments. Commercial starts also fell 38% during the first six months of the year, with only parking structures posting a gain. The largest commercial projects to start were the $100 million Hewlett Packard Enterprises Campus @ Cityplace and the $58 million Empire West Business Park.

About Dodge Data & Analytics: Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, size growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its more than 125-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. Learn more at www.construction.com.

Contacts

Media: Nicole Sullivan | AFFECT Public Relations & Social Media | +1-212-398-9680, nsullivan@affectstrategies.com

Categories
Healthcare

LabVantage COVID-19 LIMS solution implemented for onsite workplace health and safety

—Leading Consumer Goods Company Offers Employee Health Testing at In-House Test Centers—

SOMERSET, N.J.–(BUSINESS WIRE)–#COVID–LabVantage Solutions, Inc., the leading provider of laboratory informatics solutions and services including purpose-built LIMS solutions that allow labs to go live faster and at a lower total cost, today announced that a Fortune 100 global consumer packaged goods (CPG) company has deployed the LabVantage COVID-19 LIMS solution to ensure employee health and safety in the workplace.

The U.S.-based CPG company opened an in-house COVID-19 testing center where employees can quickly and safely be tested for the SARS-CoV-2 virus that causes COVID illnesses. In-house health and laboratory professionals, using LabVantage’s purpose-built COVID-19 laboratory information management system (LIMS), can quickly schedule, collect samples, test, track, and report results.

The CPG company already uses the LabVantage enterprise LIMS across areas of its organization. When LabVantage announced its new purpose-built solution specific to the COVID-19 pandemic, the company was able to implement it in under six weeks for onsite employee testing that supports a safer workplace.

“LabVantage COVID-19 LIMS is a full-featured, pre-configured solution for companies, colleges, and universities looking for a way to keep their employees and students safe in the workplace or on campus with the confidence that comes with accurate and comprehensive testing,” said LabVantage CEO, John Heiser. “It’s illustrative of our ability to transform scientific data into knowledge that drives better outcomes for our business partners.”

Having the testing process onsite saves time and gives the employees the convenience of not having to go to a hospital or doctor’s office for a test. Employees displaying symptoms, or those who request a test, can be scheduled quickly for an appointment. LabVantage COVID-19 LIMS prepares the sample request, labels sample specimens, tracks all patient and sample data following privacy and security protocols such as HIPAA and GDPR, and handles results and reporting in a single easy-to-use interface.

Dr. Heiser pointed out that the LabVantage COVID-19 LIMS solution is ideal for companies that are equipped to conduct all testing-related work in-house, as well as for organizations that do not have their own testing facilities who work with third-party laboratories. In addition, LabVantage’s ISO-27001 certification, existing validation practices, and Certificate of Release allows companies to focus their validation efforts on critical functions while still being able to confidently point to a reliable solution.

The COVID-specific LIMS solution incorporates LabVantage’s deep knowledge of laboratory workflows, along with numerous features designed to make it easy for laboratories to perform coronavirus testing using RT-PCR, isothermal nucleic acid amplification, and serology methods. LabVantage COVID-19 LIMS can be hosted on the cloud or offered as SaaS and is highly scalable, which are important attributes as testing volumes escalate.

The LabVantage COVID-19 LIMS is available immediately. For more information on LIMS for coronavirus testing, visit here.

About LabVantage Solutions

A recognized leader in enterprise laboratory software solutions, LabVantage Solutions dedicates itself to improving customer outcomes by transforming data into knowledge. The LabVantage informatics platform is highly configurable, integrated across a common architecture, and 100% browser-based to support hundreds of concurrent users. Deployed on-premise, via the cloud, or SaaS, it seamlessly interfaces with instruments and other enterprise systems – enabling true digital transformation. The platform consists of the most modern laboratory information management system (LIMS) available, integrated electronic laboratory notebook (ELN), laboratory execution system (LES), and scientific data management system (SDMS); and, for healthcare settings, a laboratory information system (LIS). We support more than 1500 global customer sites in the life sciences, pharmaceutical, medical device, biobank, food & beverage, consumer packaged goods, oil & gas, genetics/diagnostics, and healthcare industries. Headquartered in Somerset, NJ, with global offices, LabVantage has, for four decades, offered its comprehensive portfolio of products and services to enable customers to innovate faster in the R&D cycle, improve manufactured product quality, achieve accurate record-keeping, and comply with regulatory requirements. For more information, visit labvantage.com.

Contacts

Media Contact:
Brandwidth Solutions LLC

Debra Harrsch

Phone: 215-997-8575

Email: dharrsch@BWSmarketing.com