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Prudential Financial, Inc. announces 2020 results

  • Fourth quarter 2020 net income attributable to Prudential Financial, Inc. of $819 million or $2.03 per Common share versus $1.128 billion or $2.76 per share for the year-ago quarter.
  • Fourth quarter 2020 after-tax adjusted operating income of $1.183 billion or $2.93 per Common share versus $915 million or $2.24 per share for the year-ago quarter.
  • Net loss attributable to Prudential Financial, Inc. of $374 million or $1.00 per Common share for 2020 versus net income of $4.186 billion or $10.11 per share for 2019.
  • After-tax adjusted operating income of $4.111 billion or $10.21 per Common share for 2020 versus $4.656 billion or $11.24 per share for 2019.
  • Book value per Common share of $167.81 versus $155.88 per share for the year-ago; adjusted book value per Common share of $94.79 versus $101.04 per share for the year-ago.
  • Parent company highly liquid assets of $5.6 billion versus $4.1 billion for the year-ago.
  • Assets under management amounted to $1.721 trillion versus $1.551 trillion for the year-ago.
  • The Company’s Board of Directors has authorized the repurchase of up to $1.5 billion of its outstanding Common Stock during the period from January 1, 2021 through December 31, 2021. In addition, the Company declared a quarterly dividend of $1.15 per share of Common stock, payable on March 11, 2021, to shareholders of record as of February 16, 2021, representing an increase of 4.5% over the prior year dividend level and a 4.9% annualized yield on adjusted book value.

Charles Lowrey, Chairman and CEO, commented on results:

“As we reflect on the extraordinary events of 2020 and the ongoing global pandemic, we thank our employees for their continued dedication to fulfilling our company’s purpose of making lives better by solving the financial challenges of our changing world.

During the fourth quarter, we continued to successfully execute against our 2020 priorities, paving the path for the acceleration of our strategy in 2021 and beyond.

Looking ahead, we will continue our transformation by executing on our $750 million cost savings plan and by taking additional steps to increase our growth potential and reduce our market sensitivity. Over the next three years we plan to reallocate between $5 billion and $10 billion of capital with the intention of doubling the earnings contribution of our higher growth businesses and halving Individual Annuities.

Backed by the strength of our rock solid balance sheet, we also plan to return approximately $10 billion of capital to shareholders via dividends and share repurchases during this time period. This includes the resumption of share repurchases in the first quarter of 2021, as part of our $1.5 billion authorization for the year.

These changes will position Prudential to make a more meaningful difference in the financial lives of more people around the world, and to deliver attractive returns to our shareholders.”

NEWARK, N.J. — (BUSINESS WIRE) — Prudential Financial, Inc. (NYSE: PRU) today reported fourth quarter and year-end 2020 results. Net income attributable to Prudential Financial, Inc. was $819 million ($2.03 per Common share) for the fourth quarter of 2020, compared to net income of $1.128 billion ($2.76 per Common share) for the fourth quarter of 2019. After-tax adjusted operating income was $1.183 billion ($2.93 per Common share) for the fourth quarter of 2020, compared to $915 million ($2.24 per Common share) for the fourth quarter of 2019.

Net loss attributable to Prudential Financial, Inc. was $374 million ($1.00 per Common share) for 2020, compared to net income of $4.186 billion ($10.11 per Common Share) for 2019. After-tax adjusted operating income was $4.111 billion ($10.21 per Common share) for 2020, compared to $4.656 billion ($11.24 per Common share) for 2019.

Consolidated adjusted operating income and adjusted book value are non-GAAP measures. These measures are discussed later in this press release under “Forward-Looking Statements and Non-GAAP Measures” and reconciliations to the most comparable GAAP measures are provided in the tables that accompany this release.

RESULTS OF ONGOING OPERATIONS

The Company’s ongoing operations include PGIM, U.S. Businesses (consisting of U.S. Workplace Solutions, U.S. Individual Solutions, and Assurance IQ), International Businesses, and Corporate & Other. In the following business-level discussion, adjusted operating income refers to pre-tax results.

PGIM

PGIM, the Company’s global investment management business, reported record high adjusted operating income of $404 million for the fourth quarter of 2020, compared to $288 million in the year-ago quarter. The increase reflects higher asset management fees, driven by an increase in average account values, and higher Other Related Revenue, driven by record high agency revenue and the impact of investment performance on incentive fees and co- and seed investment earnings, partially offset by higher expenses, primarily driven by business growth.

PGIM assets under management of $1.499 trillion, a record high, were up 13% from the year-ago quarter, reflecting market appreciation and public fixed income inflows. Third-party net inflows of $6.3 billion in the current quarter reflect retail inflows of $3.8 billion and institutional inflows of $2.5 billion.

U.S. Businesses

U.S. Businesses reported adjusted operating income of $807 million for the fourth quarter of 2020, compared to $841 million in the year-ago quarter. The decrease reflects less favorable underwriting results, driven by COVID-19 related net mortality experience, and a change in business practice in our Individual Life business, and lower fee income, net of distribution expenses and other associated costs, in our Individual Annuities business, partially offset by higher net investment spread results, driven by higher variable investment income, and lower expenses.

U.S. Workplace Solutions, consisting of Retirement and Group Insurance, reported adjusted operating income of $451 million for the fourth quarter of 2020, compared to $342 million in the year-ago quarter.

Retirement:

  • Reported record high adjusted operating income of $538 million in the current quarter, compared to $281 million in the year-ago quarter. The increase reflects higher net investment spread results, driven by higher variable investment income, higher reserve gains, including favorable impacts due to COVID-19, and lower expenses.
  • Account values of $559 billion, a record high, were up 12% from the year-ago quarter, driven by market appreciation and net inflows. Net inflows in the current quarter totaled $5.5 billion with $3.2 billion from Institutional Investment Products, primarily from pension risk transfer transactions, and $2.3 billion from Full Service.

Group Insurance:

  • Reported a loss, on an adjusted operating income basis, of $87 million in the current quarter, compared to adjusted operating income of $61 million in the year-ago quarter. The decrease primarily reflects less favorable underwriting results in our group life and group disability businesses due to COVID-19 and related impacts.
  • Reported earned premiums, policy charges, and fees of $1.3 billion in the current quarter were consistent with the year-ago quarter.

U.S. Individual Solutions, consisting of Individual Annuities and Individual Life, reported adjusted operating income of $375 million for the fourth quarter of 2020, compared to $508 million in the year-ago quarter.

Individual Annuities:

  • Reported adjusted operating income of $440 million in the current quarter, compared to $450 million in the year-ago quarter. The decrease reflects lower fee income, net of distribution expenses and other associated costs, partially offset by higher net investment spread results.
  • Account values of $176 billion, a record high, were up 4% from the year-ago quarter, reflecting equity market appreciation, partially offset by net outflows. Gross sales of $2.0 billion in the current quarter reflect our continued product repricing and pivot strategy.

Individual Life:

  • Reported a loss, on an adjusted operating income basis, of $65 million in the current quarter, compared to adjusted operating income of $58 million in the year-ago quarter. The decrease reflects less favorable underwriting results, driven by COVID-19 mortality experience, and a change in business practice, which resulted in a refinement to reserves and related balances, partially offset by higher net investment spread results and lower expenses.
  • Sales of $239 million in the current quarter were up 14% from the year-ago quarter, as higher Variable sales were partially offset by lower Universal Life and Term sales, reflecting our product repricing and pivot strategy.

Assurance IQ reported a loss, on an adjusted operating income basis, of $19 million in the current quarter, compared to a loss of $9 million in the year-ago quarter. This reflects a 94% increase in sales, driven by higher Medicare sales during the annual enrollment period, that were more than offset by increased expenses to support business growth, including higher marketing, distribution, and infrastructure costs.

International Businesses

International Businesses, consisting of Life Planner and Gibraltar Life & Other, reported adjusted operating income of $790 million for the fourth quarter of 2020, compared to $748 million in the year-ago quarter. The increase reflects lower expenses, business growth, and more favorable underwriting results, partially offset by lower net investment spread results.

Life Planner:

  • Reported adjusted operating income of $426 million in the current quarter, compared to $345 million in the year-ago quarter. The increase reflects lower expenses, business growth, higher net investment spread results, and more favorable underwriting results.
  • Constant dollar basis sales of $216 million in the current quarter decreased 19% from the year-ago quarter, primarily reflecting lower sales in Japan following product repricing in August of 2020.

Gibraltar Life & Other:

  • Reported adjusted operating income of $364 million in the current quarter, compared to $403 million in the year-ago quarter. The decrease primarily reflects lower net investment spread results.
  • Constant dollar basis sales of $238 million in the current quarter decreased 16% from the year-ago quarter, reflecting lower sales in Japan following product repricing in August of 2020.

Corporate & Other

Corporate & Other reported a loss, on an adjusted operating income basis, of $486 million for the fourth quarter of 2020, compared to a loss of $738 million in the year-ago quarter. The lower loss reflects lower expenses, driven by the absence of costs related to the Company’s Voluntary Separation Program in the year-ago quarter, partially offset by lower net investment income.

NET INCOME

Net income in the current quarter included $1.2 billion of pre-tax net realized investment losses and related charges and adjustments, driven by losses on derivatives, and also includes $12 million from impairment and credit-related losses. These losses were partially offset by $376 million of pre-tax gains related to market experience updates and $87 million of pre-tax net gains from divested and run-off businesses.

Net income for the year-ago quarter included $145 million of pre-tax net gains from divested and run-off businesses, $73 million of pre-tax net realized investment gains and related charges and adjustments, net of $58 million from impairment and credit-related losses, and $66 million of pre-tax gains related to market experience updates.

FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES(1)

Certain of the statements included in this release, including those regarding our plans to reallocate capital, dividends, share repurchases, priorities, cost savings goals, and other business strategies constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. Prudential Financial, Inc.’s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements can be found in the “Risk Factors” and “Forward-Looking Statements” sections included in Prudential Financial, Inc.’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Statements regarding our plans to reallocate capital, dividends, share repurchases, priorities, cost savings goals, and other business strategies are subject to the risk that we will be unable to execute our strategy because of market or competitive conditions or other factors, including the impact of the COVID-19 pandemic. Prudential Financial, Inc. does not undertake to update any particular forward-looking statement included in this document.

Consolidated adjusted operating income and adjusted book value are non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are included in this release.

We believe that our use of these non-GAAP measures helps investors understand and evaluate the Company’s performance and financial position. The presentation of adjusted operating income as we measure it for management purposes enhances the understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of the items described below. Adjusted book value augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations separate from the portion that is affected by capital and currency market conditions, and by isolating the accounting impact associated with insurance liabilities that are generally not marked to market and the supporting investments that are marked to market through accumulated other comprehensive income under GAAP. However, these non-GAAP measures are not substitutes for income and equity determined in accordance with GAAP, and the adjustments made to derive these measures are important to an understanding of our overall results of operations and financial position. The schedules accompanying this release provide reconciliations of non-GAAP measures with the corresponding measures calculated using GAAP. Additional historic information relating to our financial performance is located on our website at www.investor.prudential.com.

EARNINGS CONFERENCE CALL

Members of Prudential’s senior management will host a conference call on Friday, February 5, 2021, at 11:00 a.m. ET to discuss with the investment community the Company’s fourth quarter results. The conference call will be broadcast live over the Company’s Investor Relations website at investor.prudential.com. Please log on 15 minutes early in the event necessary software needs to be downloaded. Institutional investors, analysts, and other members of the professional financial community are invited to listen to the call and participate in the Q&A by dialing one of the following numbers: (877) 336-4437 (domestic) or (234) 720-6985 (international) and using access code 2805600. All others may join the conference call in listen-only mode by dialing one of the above numbers. A replay will remain on the Investor Relations website through February 19. To access a replay via phone starting at 4:00 p.m. ET on February 5 through February 19 dial (866) 207-1041 (domestic) or (402) 970-0847 (international) and use replay code 4902339.

(1) Description of Non-GAAP Measures:

Adjusted operating income is the measure used by the Company to evaluate segment performance and to allocate resources. Adjusted operating income excludes “Realized investment gains (losses), net,” as adjusted, and related charges and adjustments. A significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains and losses. Impairments and losses from sales of credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market opportunities as well as our tax and capital profile.

Realized investment gains (losses) within certain of our businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating income generally excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset-liability management program related to the risk of those products. Adjusted operating income also excludes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are designated as trading. Additionally, adjusted operating income excludes the changes in fair value of equity securities that are recorded in net income. Additionally, market experience updates, reflecting the immediate impacts in current period results from changes in current market conditions on estimates of profitability, are excluded from adjusted operating income beginning with the second quarter of 2019, which we believe enhances the understanding of underlying performance trends.

Adjusted operating income excludes the results of Divested and Run-off Businesses, which are not relevant to our ongoing operations. Discontinued operations and earnings attributable to noncontrolling interests, each of which is presented as a separate component of net income under GAAP, are also excluded from adjusted operating income. Adjusted operating income also excludes other items, such as certain components of the consideration for the Assurance IQ acquisition, which are recognized as compensation expense over the requisite service periods, as well as changes in the fair value of contingent consideration. The tax effect associated with pre-tax adjusted operating income is based on applicable IRS and foreign tax regulations inclusive of pertinent adjustments.

Adjusted book value is calculated as total equity (GAAP book value) excluding accumulated other comprehensive income (loss) and the cumulative effect of foreign currency exchange rate remeasurements and currency translation adjustments corresponding to realized investment gains and losses. These items are excluded in order to highlight the book value attributable to our core business operations separate from the portion attributable to external and potentially volatile capital and currency market conditions.

Prudential Financial, Inc. (NYSE: PRU), a financial wellness leader and premier active global investment manager with more than $1.5 trillion in assets under management as of December 31, 2020, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees help to make lives better by creating financial opportunity for more people. Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit news.prudential.com.

Financial Highlights

(in millions, unaudited)

Three Months Ended

Year Ended

December 31

December 31

2020

2019

2020

2019

Adjusted operating income (loss) before income taxes (1):

PGIM

$

404

$

288

$

1,262

$

998

U.S. Businesses:

U.S. Workplace Solutions division

451

342

1,420

1,586

U.S. Individual Solutions division

375

508

1,422

1,930

Assurance IQ division (2)

(19

)

(9

)

(88

)

(9

)

Total U.S. Businesses

807

841

2,754

3,507

International Businesses

790

748

2,952

3,112

Corporate and Other

(486

)

(738

)

(1,824

)

(1,766

)

Total adjusted operating income before income taxes

$

1,515

$

1,139

$

5,144

$

5,851

Reconciling Items:

Realized investment gains (losses), net, and related charges and adjustments

$

(1,216

)

$

73

$

(4,315

)

$

(958

)

Market experience updates

376

66

(640

)

(449

)

Divested and Run-off Businesses:

Closed Block division

(9

)

31

(24

)

36

Other Divested and Run-off Businesses

96

114

(629

)

755

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests

152

(32

)

90

(103

)

Other adjustments (3)

(14

)

(47

)

51

(47

)

Total reconciling items, before income taxes

(615

)

205

(5,467

)

(766

)

Income (loss) before income taxes and equity in earnings of operating joint ventures

$

900

$

1,344

$

(323

)

$

5,085

Income Statement Data:

Net income (loss) attributable to Prudential Financial, Inc.

$

819

$

1,128

$

(374

)

$

4,186

Income attributable to noncontrolling interests

203

10

228

52

Net income (loss)

1,022

1,138

(146

)

4,238

Less: Earnings attributable to noncontrolling interests

203

10

228

52

Income (loss) attributable to Prudential Financial, Inc.

819

1,128

(374

)

4,186

Less: Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests

(169

)

5

(132

)

48

Income (loss) (after-tax) before equity in earnings of operating joint ventures

988

1,123

(242

)

4,138

Less: Total reconciling items, before income taxes

(615

)

205

(5,467

)

(766

)

Less: Income taxes, not applicable to adjusted operating income

(420

)

(3

)

(1,114

)

(248

)

Total reconciling items, after income taxes

(195

)

208

(4,353

)

(518

)

After-tax adjusted operating income (1)

1,183

915

4,111

4,656

Income taxes, applicable to adjusted operating income

332

224

1,033

1,195

Adjusted operating income before income taxes (1)

$

1,515

$

1,139

$

5,144

$

5,851

See footnotes on last page.

Financial Highlights

(in millions, except per share data, unaudited)

Three Months Ended

Year Ended

December 31

December 31

2020

2019

2020

2019

Earnings per share of Common Stock (diluted):

Net income (loss) attributable to Prudential Financial, Inc.

$

2.03

$

2.76

$

(1.00

)

$

10.11

Less: Reconciling Items:

Realized investment gains (losses), net, and related charges and adjustments

(3.05

)

0.18

(10.85

)

(2.33

)

Market experience updates

0.94

0.16

(1.61

)

(1.09

)

Divested and Run-off Businesses:

Closed Block division

(0.02

)

0.08

(0.06

)

0.09

Other Divested and Run-off Businesses

0.24

0.28

(1.58

)

1.84

Difference in earnings allocated to participating unvested share-based payment awards

0.01

—

0.07

0.01

Other adjustments (3)

(0.04

)

(0.12

)

0.13

(0.11

)

Total reconciling items, before income taxes

(1.92

)

0.58

(13.90

)

(1.59

)

Less: Income taxes, not applicable to adjusted operating income

(1.02

)

0.06

(2.69

)

(0.46

)

Total reconciling items, after income taxes

(0.90

)

0.52

(11.21

)

(1.13

)

After-tax adjusted operating income

$

2.93

$

2.24

$

10.21

$

11.24

Weighted average number of outstanding common shares (basic)

396.2

400.7

395.8

404.8

Weighted average number of outstanding common shares (diluted)

398.3

403.7

397.8

410.9

For earnings per share of Common Stock calculation:

Net income (loss) attributable to Prudential Financial, Inc.

$

819

$

1,128

$

(374

)

$

4,186

Earnings related to interest, net of tax, on exchangeable surplus notes

—

—

—

12

Less: Earnings allocated to participating unvested share-based payment awards

10

12

21

45

Net income (loss) attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation

$

809

$

1,116

$

(395

)

$

4,153

After-tax adjusted operating income (1)

$

1,183

$

915

$

4,111

$

4,656

Earnings related to interest, net of tax, on exchangeable surplus notes

—

—

—

12

Less: Earnings allocated to participating unvested share-based payment awards

14

11

50

53

After-tax adjusted operating income for earnings per share of Common Stock calculation (1)

$

1,169

$

904

$

4,061

$

4,615

Prudential Financial, Inc. Equity (as of end of period):

GAAP book value (total PFI equity) at end of period

$

67,425

$

63,115

Less: Accumulated other comprehensive income (AOCI)

30,738

24,039

GAAP book value excluding AOCI

36,687

39,076

Less: Cumulative effect of foreign exchange rate remeasurement and currency

translation adjustments corresponding to realized gains/losses

(1,399

)

(1,835

)

Adjusted book value

38,086

40,911

End of period number of common shares (diluted)

401.8

404.9

GAAP book value per common share – diluted

167.81

155.88

GAAP book value excluding AOCI per share – diluted

91.31

96.51

Adjusted book value per common share – diluted

94.79

101.04

See footnotes on last page.

Contacts

MEDIA CONTACT: Bill Launder, (973) 802-8760, bill.launder@prudential.com

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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

Elmer Bancorp, Inc. announces second quarter 2020 financial results

ELMER, N.J.–(BUSINESS WIRE)–ELMER BANCORP, INC. (“Elmer Bancorp” or the “Company”) (OTC Pink: ELMA), the parent company of The First National Bank of Elmer (the “Bank”), announces its operating results for the three and six months ended June 30, 2020.

For the three months ended June 30, 2020, Elmer Bancorp reported net income of $492,000, or $0.43 per common share compared to $467,000, or $0.41 per common share for the quarter ended June 30, 2019. For the six months ended June 30, 2020 net income totaled $964,000, or $0.84 per common share compared to $930,000, or $0.81 per common share for the six months ended June 30, 2019.

Net interest income for the three months ended June 30, 2020 totaled $2.843 million, an increase of $58,000 from the three months ended June 30, 2019 total of $2.785 million. For the six months ended June 30, 2020, net interest income totaled $5.595 million compared to $5.589 million for the six-month period of 2019. An increase in interest income on loans resulting from core loan growth year-over-year and interest income related to the addition of $32.0 million in SBA PPP (Paycheck Protection Program) loans was almost entirely offset by a reduction in interest income on overnight investments resulting from the significant drop in interest rates during the period. The loan loss provision for the three months ended June 30, 2020 totaled $143,000 compared to $70,000 for the three months ended June 30, 2019, an increase of $73,000, or 104%, as management continues to remain cautious in the current operating environment by adding to the allowance for losses. The allowance for loan losses was 1.42% of total core loans (excluding PPP loans) at June 30, 2020 compared to 1.39% of total loans at December 31, 2019.

Non-interest income for the three months ended June 30, 2020 was $38,000 lower than the same three-month period last year and $12,000 lower than the six-month period last year. Significant declines in service charges on deposit accounts, primarily overdraft fees, were partially offset by an increase in the cash surrender value of Bank Owned Life Insurance (“BOLI”) as the Company increased it’s investment in BOLI year-over-year. In addition, fee income on the placement of mortgages increased year-over-year. Non-interest expenses were lower for the three and six months ended June 30, 2020 versus the prior year periods by $80,000 and $93,000, respectively. The 2019 periods included other real estate owned (“OREO”) write-downs totaling $84,000 compared to $17,000 for the three and six months ended June 30, 2020. In addition, lower occupancy costs (building maintenance and repairs and snow removal costs) and miscellaneous expenses were partially offset by higher legal and professional fees and data processing expenses.

Elmer Bancorp’s total assets at June 30, 2020 totaled $326.9 million compared to $282.8 million at June 30, 2019. Total core assets (excluding PPP related assets) totaled $294.5 million, an increase of $11.7 million over June 30, 2019 and $8.7 million higher than December 31, 2019. Loans totaled $283.9 million at June 30, 2020. Total core loans (excluding PPP loans) at June 30, 2020 were $252.8 million, $17.4 million higher than June 30, 2019 and $9.5 million higher than December 31, 2019. The growth in loans was attributable to increases in commercial real estate and construction loans.

Deposits saw a significant increase primarily resulting from the PPP loan program and other government stimulus programs. At June 30, 2020, total deposits were $296.8 million, an increase of $39.6 million over the December 31, 2019 total of $257.2 million. Increases in non-interest-bearing demand deposits, money market accounts and savings deposits contributed to the increase in deposit levels. Stockholders’ equity at June 30, 2020 totaled $27.9 million compared to $26.8 million at December 31, 2019. Book value per share at June 30, 2020 was $24.29 per common share compared to $23.32 at December 31, 2019 and $22.71 at June 30, 2019. The Company and the Bank met all capital requirements at June 30, 2020.

Brian W. Jones, President and Chief Executive Officer, stated, “While we are pleased that our earnings performance for the second quarter and the year-to-date 2020 exceeded the results for the same periods of 2019, we remain cautious and diligent in the current operating environment. The coronavirus (COVID-19) pandemic has presented unique challenges in the banking industry, including the timely execution of the SBA PPP loan program. We are proud to have extended $32 million in PPP loans to 240 businesses which assisted in saving over 4,000 local jobs. At the same time, we are pleased to report the growth in our core loans and deposits. The coronavirus pandemic leaves much uncertainty about future economic conditions and the overall effect it will have on the capital of many financial institutions. Going forward, we anticipate increases in the provision for loan losses to bolster our allowance for possible loan losses related to the COVID-19 pandemic. As we continue to navigate through these trying times, we wish to thank our loyal customers, stockholders and employees for their continued support and wish you all good health.”

The First National Bank of Elmer, a nationally chartered bank headquartered in Elmer, New Jersey, has a long history of serving the community since its beginnings in 1903. We are a community bank focused on providing deposit and loan products to retail customers and to small and mid-sized businesses from our six full-service branch offices located in Cumberland, Gloucester and Salem Counties, New Jersey, including our main office located at 10 South Main Street in Elmer, New Jersey. Deposits at The First National Bank of Elmer are insured up to the legally maximum amount by the Federal Deposit Insurance Corporation (FDIC).

For more information about Elmer Bank and its products and services, please visit our website at www.elmerbank.com or call toll free 1-877-358-8141.

Forward-Looking Statements

This press release and other statements made from time to time by the Company’s management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, and other financial and business matters, which are considered forward-looking statements. These forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from those expected or implied by such forward-looking statements. Risks and uncertainties which could cause our actual results to differ materially and adversely from such forward-looking statements include economic conditions affecting the financial industry: changes in interest rates and shape of the yield curve, credit risk associated with our lending activities, risks relating to our market area, significant real estate collateral and the real estate market, operating, legal and regulatory risk, fiscal and monetary policy, economic, political and competitive forces affecting our business, our ability to identify and address cyber-security risks, and management’s analysis of these risks and factors being incorrect, and/or the strategies developed to address them being unsuccessful. Any statements made that are not historical facts should be considered forward-looking statements. You should not place undue reliance on any forward-looking statements. We undertake no obligation to update forward-looking statements or to make any public announcement when we consider forward-looking statements to no longer be accurate because of new information of future events, except as may be required by applicable law or regulation.

ELMER BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(unaudited)
Six Months Ended Three Months Ended
6/30/2020 6/30/2019 6/30/2020 3/31/2020 6/30/2019
Statement of Income Data: (dollars in thousands, except per share data)
Interest income

$

6,078

$

6,149

$

3,075

$

3,003

$

3,052
Interest expense

483

551

232

251

267
Net interest income

5,595

5,598

2,843

2,752

2,785
Provision for loan losses

236

175

143

93

70
Net interest income after provision
for loan losses

5,359

5,423

2,700

2,659

2,715
Non-interest income

466

468

220

246

258
Non-interest expense

4,510

4,603

2,250

2,260

2,330
Income before income tax expense

1,315

1,288

670

645

643
Income tax expense

351

358

178

173

176
Net income

$

964

$

930

$

492

$

472

$

467
Earnings per share:
Basic

$

0.84

$

0.81

$

0.43

$

0.41

$

0.41
Diluted

$

0.84

$

0.81

$

0.43

$

0.41

$

0.41
Weighted average shares outstanding (y-t-d)

1,148,066

1,147,129

1,148,066

1,147,427

1,147,129
Statement of Condition Data (Period End): 6/30/2020 6/30/2019 12/31/2019 3/31/2020
Total investments

$

9,950

$

14,699

$

12,215

$

11,067
Total gross loans

$

283,869

$

235,457

$

243,309

$

253,129
Allowance for loan losses

$

3,589

$

3,408

$

3,391

$

3,453
Total assets

$

326,859

$

282,771

$

285,843

$

286,075
Total deposits

$

296,767

$

255,121

$

257,192

$

257,022
Total stockholders’ equity

$

27,902

$

26,060

$

26,762

$

27,276
Book value per share

$

24.29

$

22.71

$

23.32

$

23.77

 

Contacts

Matthew A. Swift

Senior Vice President

Chief Financial Officer and

Chief Operating Officer

1-856-358-7000

Categories
Local News

NRG Energy Inc. to acquire Direct Energy

Acquisition Expected to Add More Than Three Million Residential and Commercial & Industrial Customers Across 50 States and Canada, Supporting NRG’s Integrated Strategy

To Enhance Free Cash Flow Strength and Stability

PRINCETON, N.J.–(BUSINESS WIRE)–NRG Energy Inc. (NYSE: NRG) today announced it has entered into a definitive agreement with Centrica PLC under which NRG will acquire Direct Energy, a North American subsidiary of Centrica PLC for $3.625 billion in an all-cash transaction.

The transaction builds on NRG’s status as a growing, customer-driven integrated energy provider, adding more than three million retail customers across 50 states and Canada. The transaction on closing is expected to generate approximately $740 million in annual run-rate Adjusted EBITDA1, while enhancing free cash flow strength and stability and providing earnings diversification.

With operations in all 50 U.S. states and 6 Canadian provinces, Direct Energy is one of North America’s leading retail providers of electricity, natural gas, and home and business energy-related products and services. For NRG, the acquisition builds on and complements its integrated model, enabling better matching of power generation with customer demand. It also broadens NRG’s presence into states and locales where it does not currently operate, supporting NRG’s objective to diversify its business.

The combination will deliver greater efficiencies and enable continued investment in NRG’s award-winning customer service, operational best practices and reliability. With NRG’s decades of participation in electricity markets throughout the U.S., NRG has broad insights into energy market dynamics and trends to inform innovative solutions and products for the combined company’s customers.

“This combination improves NRG’s status as one of North America’s premier integrated power companies, bringing the power of energy to people and organizations through our diverse generation platform and leading retail brands,” said Mauricio Gutierrez, President and Chief Executive Officer of NRG. “The acquisition aligns with our broader strategy of perfecting our integrated business model and drives significant value creation for our customers and stakeholders. Direct Energy ’s complementary assets, talented team and excellent customer service make it a natural fit for our portfolio, and we look forward to welcoming Direct Energy to the NRG team.”

Strategic and Financial Benefits

  • Broader Retail PlatformThe transaction broadens NRG’s retail business adding over 3 million customers. The transaction provides substantial regional diversity to NRG given that 76% of Direct Energy’s Home Energy customers are outside of Texas. The transaction will allow the combined company to reduce costs and leverage shared best practices.
  • Balanced Generation and Retail PlatformDirect Energy’s significant East footprint provides better balance within NRG’s existing portfolio while also providing NRG the ability to expand its successful capital-light renewable PPA strategy outside of Texas.
  • Significant Cost and Operational SynergiesThe acquisition is expected to create $300 million in annual run-rate synergies driven by leveraging NRG’s scalable operational platform and best-in-class cost discipline.
  • Disciplined Capital AllocationThe transaction exceeds NRG’s investment criteria and is accretive to free cash flow. In addition, NRG expects to achieve its targeted credit ratios within twelve months of closing, thereby maintaining its commitment to achieve investment grade credit metrics.

Financial Terms

NRG will acquire Direct Energy for $3.625 billion in cash, subject to a working capital adjustment.

Approvals and Time to Close

Closing for the transaction is targeted by year end 2020. The transaction is subject to customary closing conditions, consents and regulatory approvals, including approval by shareholders of Centrica PLC and the Federal Energy Regulatory Commission (FERC). The companies will also submit as pre-merger notification to the U.S. Department of Justice and the Federal Trade Commission under the Hart-Scott-Rodino Act, and the Commissioner of Competition under the Canadian Competition Act.

Advisors

Citi and Credit Suisse are serving as financial advisors and Latham & Watkins and Baker Botts LLP. are serving as legal counsel to NRG.

Investor Call

On July 24, 2020, NRG will host a conference call at 9:00 a.m. Eastern to discuss this announcement. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to NRG’s website at http://www.nrg.com and clicking on “Presentations & Webcasts” in the “Investors” section found at the top of the home page. The webcast will be archived on the site for those unable to listen in real time.

About NRG Energy

At NRG, we’re bringing the power of energy to people and organizations by putting customers at the center of everything we do. We generate electricity and provide energy solutions and natural gas to more than 3.7 million residential, small business, and commercial and industrial customers through our diverse portfolio of retail brands. A Fortune 500 company, operating in the United States and Canada, NRG delivers innovative solutions while advocating for competitive energy markets and customer choice, and by working towards a sustainable energy future. More information is available at www.nrg.com. Connect with NRG on Facebook, LinkedIn and follow us on Twitter @nrgenergy, @nrginsight.

Forward-Looking Statements

In addition to historical information, the information presented in this press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typically be identified by terminology such as “may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,” “predict,” “target,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include, but are not limited to, statements about the Company’s future revenues, income, indebtedness, capital structure, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.

Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated herein include, among others, the potential impact of COVID-19 or any other pandemic on the Company’s operations, financial position, risk exposure and liquidity, general economic conditions, hazards customary in the power industry, weather conditions, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulations, the condition of capital markets generally, our ability to access capital markets, cyberterrorism and inadequate cybersecurity, unanticipated outages at our generation facilities, adverse results in current and future litigation, failure to identify, execute or successfully implement acquisitions, repowerings or asset sales, our ability to implement value enhancing improvements to plant operations and companywide processes, our ability to achieve margin enhancement under our publicly announced transformation plan, our ability to achieve our net debt targets, our ability to maintain investment grade credit metrics, our ability to proceed with projects under development or the inability to complete the construction of such projects on schedule or within budget, the inability to maintain or create successful partnering relationships, our ability to operate our business efficiently, our ability to retain retail customers, our ability to realize value through our commercial operations strategy, the ability to successfully integrate businesses of acquired companies, our ability to realize anticipated benefits of transactions (including expected cost savings and other synergies) or the risk that anticipated benefits may take longer to realize than expected, and our ability to execute our Capital Allocation Plan. Achieving investment grade credit metrics is not a indication of or guarantee that the Company will receive investment grade credit ratings. Debt and share repurchases may be made from time to time subject to market conditions and other factors, including as permitted by United States securities laws. Furthermore, any common stock dividend is subject to available capital and market conditions.

NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The adjusted EBITDA are estimates as of July 24, 2020. These estimates are based on assumptions the company believed to be reasonable as of that date. NRG disclaims any current intention to update such guidance, except as required by law. The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included in this press release should be considered in connection with information regarding risks and uncertainties that may affect NRG’s future results included in NRG’s filings with the Securities and Exchange Commission at www.sec.gov.

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1 EBITDA forecasts are based on NRG Energy’s own estimates and should not be construed as a profit forecast for the purpose of Centrica’s Listing Rule obligations under Listing Rule 13.5.

Contacts

Investors:
Kevin L. Cole, CFA

609.524.4526

investor.relations@nrg.com

Media:
Candice Adams

609.524.5428

candice.adams@nrg.com

Categories
Business

Dun & Bradstreet announces second quarter 2020 earnings release and conference call; participating in an upcoming investor conference

SHORT HILLS, N.J.–(BUSINESS WIRE)–Dun & Bradstreet Holdings, Inc. (“Dun & Bradstreet”) (NYSE:DNB), a leading global provider of business decisioning data and analytics, today announced the date for the release of its second quarter 2020 earnings and its participation in an upcoming investor conference.

Second Quarter 2020 Earnings

Dun & Bradstreet will release second quarter 2020 earnings before the market opens on August 6, 2020. A conference call to discuss its results will follow at 8:30 a.m. Eastern Time that same day.

Those wishing to participate via the webcast should access the call through Dun & Bradstreet’s Investor Relations website at https://investor.dnb.com. Those wishing to participate via the telephone may dial in at 833-350-1376 (USA) or 647-689-6655 (International) and enter the conference ID: 7189713. The conference call replay will be available via webcast through Dun & Bradstreet’s Investor Relations website. The telephone replay will be available from 11:30 a.m. Eastern Time on August 6, 2020, through August 13, 2020, by dialing 800-585-8367 (USA) or 416-621-4642 (International). The replay passcode will be 7189713.

Upcoming Investor Conference

Anthony Jabbour, Dun & Bradstreet’s chief executive officer, and Bryan Hipsher, Dun & Bradstreet’s chief financial officer, will participate in the Wells Fargo Virtual Technology Services Conference on Monday, August 10, 2020.

About Dun & Bradstreet

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

Contacts

Investor Contact:
Debra McCann

973-921-6008

IR@dnb.com

Media Contact:
Lisette Kwong

973-921-6263

KwongL@dnb.com