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Desktop Metal Announces Fourth Quarter and Full Year 2022 Financial Results and Initiates 2023 Guidance

Desktop Metal Announces Fourth Quarter and Full Year 2022 Financial Results and Initiates 2023 Guidance

  • Record fourth quarter revenue of $60.6 million, up 6.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from the fourth quarter of 2021

  • Record full year 2022 revenue of $209.0 million, up 86.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from 2021

  • Cost reduction initiatives on-track to deliver $100 million in aggregate, annualized cost savings in 2023, prioritizing path to profitability

  • Initiates full year 2023 revenue guidance of between $210 and $260 million

BOSTON, March 01, 2023–(BUSINESS WIRE)–Desktop Metal, Inc. (NYSE: DM) today announced financial results for the fourth quarter and full year ended December 31, 2022.

“Desktop Metal delivered record revenue for fourth quarter and full year 2022, fueled by our differentiated portfolio of AM 2.0 mass production solutions, our strong market position, and the team’s solid execution amidst an unsteady macro environment,” said Ric Fulop, Founder and CEO of Desktop Metal. “We also took actions to streamline the business and expanded our cost reduction plans to $100 million in annualized cost savings to prioritize our path to profitability and position the business for long-term growth. As a result, we enter 2023 a stronger, more resilient company focused on driving another year of revenue growth at scale, delivering on our cost reduction measures, and dramatically improving adjusted EBITDA and cash flow, in order to capitalize on the next stage of secular growth in the additive manufacturing market.”

Recent Business Highlights:

  • Continued and expanded the cost reduction plan announced in 2022 to add an additional $50 million in annualized savings after successfully completing $50 million in annualized savings in 2022. Total combined $100 million in annualized cost savings are on-track in order to reduce expense structure, drive margin expansion, and prioritize path to profitability

  • Announced strategic collaboration with Align Technology to accelerate adoption of digital dentistry in the $30 billion annual dental parts market. Align’s market-leading iTero intraoral scanners will be offered as a seamless managed service to dentists in a subscription model with recurring revenue, enabling a gateway for a connected suite of digital dentistry solutions with a workflow backed by Desktop Labs’ experienced network of digitized dental laboratories and premium Desktop Health 3D printers and materials

  • Commenced shipments of Production System™ P-50 in 2022 including continued traction with automotive, industrial, and other major end markets. Recently signed master supply agreement with one of the largest consumer electronics companies in the world

  • Launched the all-new S-Max Flex® for affordable and scalable digital sand casting, leveraging Single Pass Jetting™ technology

  • Unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts

  • Launched Figur G15, the first commercial platform of its kind to shape standard sheet metal on demand using patent-pending Digital Sheet Forming (DSF) technology

  • Installations of additive manufacturing systems for metal parts surpassed 1,100 units including some of largest production deployments in additive manufacturing

Fourth Quarter 2022 Financial Highlights:

  • Revenue of $60.6 million, up 6.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from the fourth quarter of 2021

  • GAAP gross margin of 13.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}; non-GAAP gross margin of 24.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, a sequential improvement of 440 basis points from the third quarter of 2022

  • GAAP net loss of $312.4 million, including $269.3 million of goodwill impairment and $10.1 million of amortization of acquired intangible assets; non-GAAP net loss of $24.0 million

  • Adjusted EBITDA of $(21.1) million

Full Year 2022 Financial Highlights:

  • Revenue of $209.0 million, up 86.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from 2021

  • Revenue contribution of 24{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from high-margin consumables, services, and subscription

  • GAAP gross margin of 7.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}; non-GAAP gross margin of 22.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

  • GAAP net loss of $740.3 million, including $498.8 million of goodwill impairment and $38.7 million of amortization of acquired intangible assets; non-GAAP net loss of $130.7 million

  • Adjusted EBITDA of $(118.4) million

  • Cash, cash equivalents, and short-term investments of $184.5 million as of December 31, 2022

Outlook for Full Year 2023:

  • Revenue expectation of between $210 to $260 million for full year 2023

  • Adjusted EBITDA expectation of between $(50) to $(25) million for full year 2023, with expectation to achieve Adjusted EBITDA breakeven before year end 2023

Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts. See “Non-GAAP Financial Information.”

Conference Call Information:

Desktop Metal will host a conference call on Wednesday, March 1, 2023 at 4:30 p.m. ET to discuss fourth quarter and full year 2022 results. Participants may access the call at 1-877-407-4018, international callers may use 1-201-689-8471, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of https://ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.

About Desktop Metal:

Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, plans and objectives for future operations, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to risks associated with the integration of the business and operations of acquired businesses, our ability to realize the benefits from cost saving measures, and supply and logistics disruptions, including shortages and delays. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 1, 2023, and such other reports as Desktop Metal has filed or may file with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Desktop Metal, Inc. assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

DESKTOP METAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

76,291

$

65,017

Current portion of restricted cash

4,510

2,129

Short‑term investments

108,243

204,569

Accounts receivable

38,481

46,687

Inventory

91,736

65,399

Prepaid expenses and other current assets

17,155

18,208

Total current assets

336,416

402,009

Restricted cash, net of current portion

1,112

1,112

Property and equipment, net

56,271

58,710

Goodwill

112,955

639,301

Intangible assets, net

219,830

261,984

Other noncurrent assets

27,763

25,480

Total Assets

$

754,347

$

1,388,596

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

25,105

$

31,558

Customer deposits

11,526

14,137

Current portion of lease liability

5,730

5,527

Accrued expenses and other current liabilities

26,723

33,829

Current portion of deferred revenue

13,719

18,189

Current portion of long‑term debt, net of deferred financing costs

584

825

Total current liabilities

83,387

104,065

Long-term debt, net of current portion

311

548

Convertible notes

111,834

—

Contingent consideration, net of current portion

—

4,183

Lease liability, net of current portion

17,860

13,077

Deferred revenue, net of current portion

3,664

4,508

Deferred tax liability

8,430

10,695

Other noncurrent liabilities

1,359

3,170

Total liabilities

226,845

140,246

Commitments and Contingencies (Note 17)

Stockholders’ Equity

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

—

—

Common Stock, $0.0001 par value—500,000,000 shares authorized; 318,235,106 and 311,737,858 shares issued at December 31, 2022 and December 31, 2021, respectively, 318,133,434 and 311,473,950 shares outstanding at December 31, 2022 and December 31, 2021, respectively

32

31

Additional paid‑in capital

1,874,792

1,823,344

Accumulated deficit

(1,308,954

)

(568,611

)

Accumulated other comprehensive loss

(38,368

)

(6,414

)

Total Stockholders’ Equity

527,502

1,248,350

Total Liabilities and Stockholders’ Equity

$

754,347

$

1,388,596

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Years Ended December 31,

2022

2021

2020

Revenues

Products

$

190,248

$

105,994

$

13,718

Services

18,775

6,414

2,752

Total revenues

209,023

112,408

16,470

Cost of sales

Products

178,952

87,450

26,945

Services

15,000

6,665

4,574

Total cost of sales

193,952

94,115

31,519

Gross profit (loss)

15,071

18,293

(15,049

)

Operating expenses

Research and development

96,878

68,131

43,136

Sales and marketing

68,091

47,995

13,136

General and administrative

83,065

78,041

20,734

In-process research and development assets acquired

—

25,581

—

Goodwill impairment

498,800

—

—

Total operating expenses

746,834

219,748

77,006

Loss from operations

(731,763

)

(201,455

)

(92,055

)

Change in fair value of warrant liability

—

(56,576

)

56,417

Interest expense

(1,743

)

(149

)

(328

)

Interest and other (expense) income, net

(8,335

)

(11,822

)

1,011

Loss before income taxes

(741,841

)

(270,002

)

(34,955

)

Income tax benefit

1,498

29,668

940

Net loss

$

(740,343

)

$

(240,334

)

$

(34,015

)

Net loss per share—basic and diluted

$

(2.35

)

$

(0.92

)

$

(0.22

)

Weighted average shares outstanding, basic and diluted

314,817

260,770

157,906

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Years Ended December 31,

2022

2021

2020

Net loss

$

(740,343

)

$

(240,334

)

$

(34,015

)

Other comprehensive (loss) income, net of taxes:

Unrealized gain (loss) on available-for-sale marketable securities, net

(290

)

(40

)

(84

)

Foreign currency translation adjustment

(31,664

)

(6,365

)

—

Total comprehensive (loss) income, net of taxes of $0

$

(772,297

)

$

(246,739

)

$

(34,099

)

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Accumulated

Other

Additional

Comprehensive

Total

Legacy Convertible Preferred Stock

Common Stock

Paid‑in

Accumulated

(Loss)

Stockholders’

Shares

Amount

Shares

Amount

Capital

Deficit

Income

Equity

BALANCE—January 1, 2020

100,038,109

$

436,553

26,813,113

$

3

$

16,722

$

(294,262

)

$

75

$

(277,462

)

Retroactive application of recapitalization (Note 1)

(100,038,109

)
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Tesla recalling nearly 363,000 vehicles equipped with ‘Full Self-Driving’

Tesla recalling nearly 363,000 vehicles equipped with ‘Full Self-Driving’


New York
CNN
 — 

Tesla is recalling all 363,000 US cars with its so-known as “Full Self Driving” driver assist software program because of to protection dangers, another blow to the attribute that is central to the automaker’s business enterprise product.

“Full self-driving,” as it at the moment stands, navigates community roadways with steering, braking and acceleration, but demands a human driver ready to get management at any second, as the technique tends to make judgment mistakes. The Nationwide Highway Traffic Basic safety Administration stated that, primarily based on its analysis, Tesla’s FSD feature “led to an unreasonable threat to motor motor vehicle security based mostly on insufficient adherence to targeted traffic protection regulations.” And it warned FSD could violate website traffic legal guidelines at some intersections “before some motorists may well intervene.”

“The FSD Beta program may perhaps let the automobile to act unsafe around intersections, these kinds of as traveling straight by an intersection when in a transform-only lane, getting into a stop sign-managed intersection devoid of coming to a complete quit, or continuing into an intersection throughout a continual yellow targeted visitors signal with out owing warning,” stated the remember recognize, posted on NHTSA’s site.

Tesla will attempt to repair the the FSD element, which costs $15,000, as a result of an more than-the-air program update, the discover included.

Even though Tesla CEO Elon Musk has not nonetheless commented on the character or scope of the issue, he tweeted that “the term “recall” for an in excess of-the-air software program update is anachronistic and just flat incorrect!”

But NHTSA said in a statement that “manufacturers must initiate a recall for any repair, which includes a application update, that solutions an unreasonable hazard to protection.” The federal agency reported it will “continue to monitor the recall remedies for efficiency.”

The notice mentioned that the problems are present with all autos with the present model of the FSD software, which is readily available on all four Tesla designs, the Design S, Product X, Product 3 and Product Y.

It also stated Tesla has recognized18 stories of incidents acquired between May possibly 8, 2019, and September 12, 2022, that might be linked to the circumstances explained previously mentioned. It claimed Tesla is not knowledgeable of any accidents or deaths brought about in individuals incidents. NHTSA by itself has determined at the very least 273 crashes that associated one of Tesla’s driver guide units.

FSD is regarded essential to the company’s standard small business plan, given the rates that drivers pay out for the options, and it’s ability to attract prospective buyers to selected Tesla cars in the very first spot. Tesla and Musk have frequently claimed that FSD, even in its recent “beta” variety, is safer than cars pushed only by individuals. He told buyers past thirty day period that Tesla has gathered facts from about 100 million miles of motorists applying FSD outdoors of highways.

“Our printed details shows that enhancement in security,” he claimed. “It’s very very clear. So we would not have unveiled the FSD Beta if the basic safety statistics ended up not outstanding.”

But other basic safety authorities have questioned the validity of Tesla’s security claims. There have been significant-profile mishaps of Tesla vehicles working with FSD or its far more rudimentary predecessor acknowledged as “Autopilot.” Some of these mishaps included fatalities.

NHTSA is also investigating that predecessor, Autopilot. That technology brings together lane-retaining support with adaptive cruise regulate to keep a car or truck in a lane on a freeway, as opposed to the guarantee of “full self-driving,” which Tesla states aims to 1 working day be in a position to operate a motor vehicle without human supervision on a metropolis avenue.

While “this recall seeks to handle a unique established of issues discovered by the agency,” NHTSA’s statement explained that this recall does not deal with its earlier investigations. “Accordingly, the agency’s investigation into Tesla’s Autopilot and involved car or truck programs remains open up and active.”

Previous thirty day period, Tesla disclosed in the company’s annual monetary report that it “has acquired requests from the US Justice Section for documents related to Tesla’s Autopilot and FSD attributes.”

Musk has continuously predicted that the enterprise would before long create a genuinely self-driving auto. But it has also repeatedly pushed back again its individual self-imposed deadlines. Tesla homeowners have submitted a class-action lawsuit around the predictions and missed deadlines, which is nevertheless pending.

“Mere failure to recognize a extensive-phrase, aspirational goal is not fraud,” Tesla’s attorneys wrote in a November 28 court submitting, inquiring that the match be dismissed.

Musk has mentioned for many years that the price of “full self-driving” would boost periodically as it develops and moves closer to regulatory acceptance. He tweeted in Could 2020 that when “full self-driving” experienced that acceptance, the element would “probably” be truly worth much more than “$100,000.” But as lately as a July 2021 connect with with traders, Musk said it was “debatable” that the aspect was worth the $10,000 Tesla was charging at that time.

In September, when CNN Enterprise spoke with 13 individuals who have cars and trucks with the “full self-driving” beta, the too much to handle the vast majority, 11 persons, explained they felt it was not value $15,000. And it is been the subject matter of controversy for years, including a new ad that played for the duration of the Tremendous Bowl in a couple markets.

Tesla does not seem shut to regulatory approval for “full self-driving.” In August of 2022, the California DMV explained that the title “full self-driving” is “a misleading practice” and grounds for suspending or revoking Tesla’s license to provide cars in the condition.

Tesla, which has disbanded its public relations staff members and has not responded to press inquiries for a number of years, could not be attained for remark.

CNN’s Matt McFarland contributed to this report.

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Sky Evolves from Cloud POS to Full Suite Business Services Platform

Sky Evolves from Cloud POS to Full Suite Business Services Platform

Sky Systemz has positioned by itself to be a major contender in the fintech business.

LEXINGTON, Ky., May well 13, 2022 /PRNewswire/ — Sky Systemz is a digital payments and fintech business from Lexington, KY. More than the final two many years, Sky has grown from a cloud POS commence-up to a modest enterprise providers powerhouse punching very well higher than its weight class. Sky’s processing quantity and consumer foundation has developed by 1,000{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} because of to quick vertical and horizontal adoption.

Sky is rolling out the next chapter in its evolution, Fiscal Companies, even though staying genuine to its personalized, ubiquitous roots that built the company’s companies attractive to a previously untapped market of expert provider providers.

The exhilaration encompassing Sky centers on how the ‘bolt-on’ character of their software would make it instantaneously adaptable to any business. Sky is dwelling up to its slogan, “Crafted to suit the condition of your company” by ensuring their customers can in truth ‘build’ their have enterprise companies system based mostly on their requires.

The Sky Platform
Sky’s new platform now is made up of three application dependent parts (a 4th coming in Q2) Paymentz, Operationz Management, Business Management, and soon Financial Servicez. Sky Insightz, an superior analytics and reporting resource that will figure out the general ‘health’ of your business enterprise, will follow in Q3 as portion of the revamped Organization Administration suite.

Sky Money is a recreation changer, relocating Sky firmly into a person of the couple of all-in-a single organization solutions on the current market. All of your business payments, operations, administration and fiscal expert services will reside in just one area, aimed at serving the neglected skilled expert services business.

Sky Fiscal is a business enterprise-targeted merchandise with all the added benefits of classic business enterprise banking that allows retailers to access business enterprise debit cards, checks, ACH deposits, vendor payments, and staff checking accounts with P2P payments. Particular positive aspects will also incorporate cash back on debit card transactions, prompt deposits and the modern trend of day-to-day payroll (which is a activity changer in a time when it is tough for skilled company organizations to catch the attention of expertise).

“Sky has stayed real to our concentrate of serving the exclusive needs of skilled company companies and producing the very finest goods. Sky Economical will convey so significantly worth to our platform…Imagine walking into a bank and coming out with a full system to operate and control your business with all the equipment required to mature and enhance costs. Which is what Sky is providing!” – Brian Nichols, CEO

Sky is no extended the ‘little Cloud POS that could’, but is developing itself as a major and exceptional contender in the fintech sector. Sky replaces the have to have to have multiple solutions like Square for functions Wix.com for a website Shopify for an on the web retail store or GoDaddy to host their internet site and soon, no much more Citibank or Financial institution of America for banking solutions. Sky Systemz produces benefit for its organization consumers by means of consolidating all of their organization products and services below a person roof with the experienced support essential to advise our buyers and collaborate on the very best way to use our platform.

Master more about Sky Systemz at skysystemz.com

Sky Systemz is a cloud-based mostly electronic payments and monetary technology business. With no contracts, no month-to-month costs, and small rates, Sky is a companion to firms nationwide who want to expand their business though trying to keep more of their profits.

Sky Systemz
Dr. Michael Carr
(844)-398-3884
336267@email4pr.com
SkySystemz.com

Cision

Cision

See initial content to obtain multimedia:https://www.prnewswire.com/information-releases/sky-evolves-from-cloud-pos-to-full-suite-business-services-system-301547012.html

Supply Sky Systemz

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A full recap of the Fed’s rate hike and big market rally

A full recap of the Fed’s rate hike and big market rally

Gary Cohn says Powell gave the market the policy transparency it wanted

Former Goldman Sachs President Gary Cohn told CNBC he thinks Fed Chair Jerome Powell “drove it right down the middle of the road” during his news conference, perfectly meeting the market’s expectations as evidenced by the relief rally in stocks. 

In particular, Cohn said the market appreciated Powell’s clear communication around the Fed’s approach to quantitative tightening. “The market has been trained to have transparency, and we got transparency,” said Cohn, who also led the National Economic Council under former President Donald Trump.

He added that he believes Powell laid the roadmap for two more 50 basis point interest rate hikes at upcoming meetings.

— Kevin Stankiewicz

Stocks rally broadly after Powell comments, financials and tech jump

U.S. stocks rallied across the board Wednesday after Fed Chair Powell in the press conference ruled out larger rate hikes and emphasized the possibility of a soft landing — tamping down inflation without inducing a recession.

All 11 S&P 500 sectors were positive on the day in the last hour of trading.

Stocks leveraged to an improving economy were among the biggest winners. Energy was the top-performing sector. Financial names were also a leading group, with names like Bank of America and Wells Fargo jumping roughly 4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

Technology stocks, which have been under pressure, also climbed. Communication services and information tech were among the top S&P 500 sectors. The moves came as the benchmark 10-year Treasury yield dipped. Apple rose more than 3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, and Meta Platforms gained roughly 5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

—Hannah Miao

Market is applauding Powell’s comments, LPL’s Krosby says

The major averages were up sharply heading into the close, with the Dow up 900 points.

“The market is applauding Chairman Powell’s comments that the economy remains strong thanks to solid corporate balance sheets and still cash-rich consumers,: said Quincy Krosby, chief equity strategist at LPL Financial. “Moreover, he suggested that perhaps the worst of the sharp move in inflationary pressures may be poised to ease.”

“Still, Powell underscored that while the FOMC remains data dependent for each meeting, the market can expect 50 basis point hikes at the next two meetings. He made it clear that corralling inflationary pressures is crucial,” Krosby added.

—Fred Imbert

Powell news conference wraps up

Federal Reserve Chairman Jerome Powell has concluded an eventful news conference, which saw the major U.S. stock benchmarks rally on remarks that the Fed would not raise rates by 75 basis points.

—Fred Imbert

Federal Reserve will restore stable pricing as ‘quickly and effectively’ as it can, Powell says

Chairman Jerome Powell believes the Federal Reserve has a “good chance” of restoring stable prices without causing a strong increase in unemployment.

“We need to do everything we can to restore stable prices as quickly and effectively as we can,” Powell said. “We think we have a good chance to do it without a significant increase in unemployment or a really sharp slowdown.” 

While the move may not be “pleasant” and requires higher rates in the short-term, everyone will benefit in the long run, Powell said. Those on fixed income or lower end of income distribution particularly benefit from stable prices, he added.

“We think about the medium and longer-term and everyone will be better off if we can get this job done,” he said. “The sooner the better.”

— Samantha Subin

Powell’s comments on rates, economy soothed investors and triggered rally

State Street Global Advisors chief investment strategist Michael Arone said the Federal Reserve delivered on its guidance and eased investors’ concerns about the path of its rate hiking.

He said Fed Chairman Jerome Powell soothed markets with his comments, including when he said a 75 basis point hike was not currently under consideration. The Fed raised interest rates by a half percent Wednesday afternoon, the biggest hike since the year 2000.

“I think there’s three things” in Powell’s comments, Arone said. “They’re not actively considering 75 basis points. There’s some evidence that inflation may have peaked. And thirdly, he acknowledged it won’t be easy but he thinks a soft landing is still possible because households, businesses and the labor markets remain in good shape.”

The chairman also said the Fed could consider 50 basis point hikes at the next couple of meetings, and Arone said it was a positive that Powell limited the half point hikes to two meetings.

The major averages were up sharply at around 3:15 p.m. ET, with the Dow up more than 700 points. The S&P 500 and Nasdaq are up more than 2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} each.

—Patti Domm

Strategist breaks down why stocks are rallying

Adam Crisafulli, founder of Vital Knowledge, broke down why stocks rallied during Powell’s press conference.

“Stocks were excited about Powell refuting talk of 75bp increases and his (very modest) optimism about recent PCE trends, but his rhetoric about combating price increases was even more forceful than before,” Crisafulli said.

— Yun Li

Powell says Fed policies are ‘famously blunt tools’

Fed Chair Jerome Powell said the central bank has a “good chance” to curb inflation without inducing a recession, but noted challenges in that endeavor.

“We don’t have precision surgical tools. We have essentially interest rates, the balance sheet and forward guidance and they’re … famously blunt tools,” Powell said at the press conference.

“No one thinks this will be easy. No one thinks it’s straightforward. But there’s certainly a plausible path to this,” he added.

—Hannah Miao

Traders reduced bets for rate hikes this year

Traders are reducing thier expectations for Federal Reserve rate hikes this year.

Traders had been expecting a possible 75 basis point rate hike in June, but Fed Chairman Jerome Powell said that is not currently under consideration. The chairman also said the Fed could consider 50 basis point hikes at the next couple of meetings.

According to Wells Fargo’s Michael Schumacher, fed funds futures were pricing in 52 basis points of hiking in June after Powell’s comment, down from 61 basis points before the 2 p.m. ET Fed statement.

The futures market also shows traders reduced expectations for rate hikes this year. The futures market is now pricing in a fed funds rate of 2.80{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} at the end of the year, down from 2.96{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} before the Fed’s statement.

The Fed announced it was raising the fed funds rate by a half percentage point and said it “remains highly attentive to inflation risks.”

—Patti Domm

Powell emphasizes Fed policy works on demand, not supply

Fed Chair Jerome Powell reiterated the central bank’s policy fights inflation through curbing demand, and cannot address supply side issues.

“Our tools don’t really work on supply shocks, our tools work on demand,” Powell said at the post-policy meeting press conference.

The Fed chair also highlighted the war in Ukraine and Covid case surges in China as two geopolitical issues that could further exacerbate global supply chain disruptions.

“For both the situation in Ukraine and the situation in China, they’re likely to both add to headline inflation,” Powell said. “They’re both capable of preventing further progress in supply chains … or even making supply chains temporarily worse.”

—Hannah Miao

Powell says he’s not ‘actively considering’ 75 basis point increase

Federal Reserve Chairman Jerome Powell said the central bank is not “actively considering” a 75 basis point increase.

“So a 75 basis point increase is not something that committee is actively considering,” Powell said. “I think expectations are that we’ll start to see inflation, you know, flattening out.”

“It’s a very difficult environment to try to give forward guidance 60, 90 days in advance, there’s just so many things that can happen in the economy around the world. So, you know, we’re leaving ourselves room to look at the data and make this decision as we get there.”

— Sarah Min

Powell: The labor market is ‘extremely tight’

“The labor market has continued to strengthen and is extremely tight,” according to Federal Reserve Chairman Jerome Powell.

The chairman noted that labor supply remains subdued even as labor demand gains strength. Employment rose by 1.7 million jobs over the first three months of the year, and the unemployment rate has dropped to a near five-decade low of 3.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, according to the Fed chair.

The result is employers are having difficulties filling job openings and wages are rising at the fastest pace in many years, Powell said.

— Sarah Min

Powell sees ‘good chance’ of a soft-landing for economy

Federal Reserve Chairman Jerome Powell said the central bank has a “good chance” of achieving a soft landing for the U.S. economy as it hikes rates to combat rising inflation.

“I would say I think we have a good chance to have a soft or softish landing, or outcome if you will,” Powell said.

While maintaining a soft landing will be a challenge, Powell pointed to the resilient labor market, noting that households and businesses remain in “strong financial shape.”

“It doesn’t seem to be anywhere close to a downturn,” Powell said. “Therefore, the economy is strong and is well-positioned to handle tighter monetary policy.”

—Samantha Subin

Major averages rally after Powell rules out 75 basis point hike

The Dow, S&P 500 and Nasdaq jumped to their highs of the day after Fed Chairman Jerome Powell said the central bank wasn’t considering a 75 basis point rate hike.

The Dow was up more than 400 points, or 1.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. The S&P 500 traded 1.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher, and the Nasdaq advanced 1.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

—Fred Imbert

Powell says half point increases at next FOMC meetings are on the table

Fed Chairman Jerome Powell said Wednesday that, with the labor market being “extremely tight” and inflation “much too high,” the Federal Open Market Committee could continue to raise the Fed Funds rate over the next few months.

“We are on a path to move our policy rate expeditiously to more normal levels,” he said. “Assuming that economic and financial conditions evolve in line with expectations, there is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings.”

He added that the committee also decided to begin the process of reducing its balance sheet, which will play an important role in forming the stance of monetary policy.

— Tanaya Macheel

Powell: Fed is ‘moving expeditiously’ to bring down inflation

The Fed is “moving expeditiously” to combat rising inflation which has hard-hit consumers, said Chairman Jerome Powell to start the central bank’s post-announcement news conference.

“Inflation is much too high and we understand the hardship it is causing, and we are moving expeditiously to bring it back down,” he said. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

Powell added that the economy and country have “proved resilient” as they fight the conditions over the past two years and said that bringing down inflation is crucial to creating a “sustained period” of strong labor market conditions.

—Samantha Subin

Oil’s surge adds to inflationary pressures

Federal Reserve Chairman Jerome Powell pointed to the rapid rise in commodity prices, prompted by Russia’s war, as adding to inflationary pressures across the economy.

“The surge in prices of crude oil and other commodities that resulted from Russia’s invasion of Ukraine is creating additional upward pressure on inflation,” he said Wednesday.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded around $107.51 per barrel Wednesday. The contract is up more than 40{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} this year, which has sent gas prices at the pump to record highs.

— Pippa Stevens

Dow briefly erases gains as Powell kicks off news conference

The Dow Jones Industrial Average briefly turned negative on the day as Fed Chairman Jerome Powell started his news conference.

The 30-stock average was last up 64 points, or 0.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. The S&P 500 hovered around the flatline, while the Nasdaq Composite was down 0.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} as of 2:36 p.m. ET.

—Fred Imbert

Market action shows Fed’s rate hike well telegraphed, strategist says

The Fed just announced its biggest rate increase in two decades, and yet stocks are not selling off.

“It’s certainly heady days when the market doesn’t blink at the most aggressive rate hike in 22 years, but keep in mind this was extremely well-telegraphed and priced in,” said Mike Loewengart, managing director of investment strategy at E-Trade. “So far though, we don’t have much to go on in terms of the pace and magnitude of hikes to come.”

—Yun Li

Market relieved Fed wasn’t more hawkish, State Street’s Arone says

State Street Global Advisors chief investment strategist Michael Arone said the market is breathing a sigh of relief after the Fed’s latest announcement.

“I think right now there’s relief it wasn’t more hawkish,” Arone said, noting the Fed is also pushing the idea that it will keep raising rates.

“I think one of the things that was most interesting was that the Fed decided to shift the description of transitory from inflation to the economy,” he added. “They acknowledged the weakness in the economy, but their language suggested this was temporary and household spending and business spending remains strong. I thought that was an interesting way for them to support the need for more rate hikes.”

—Patti Domm

Dow and S&P 500 rise to session highs after rate hike

The Dow and S&P 500 rose to their highs of the day shortly after the Fed announced its latest decision on monetary policy.

At one point, the Dow was up as much as 255.77 points, or 0.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. The S&P 500 was briefly up 0.86{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. Both benchmarks have since eased from those levels, but remain higher on the day.

—Fred Imbert

What changed in the Fed statement

Key changes to the statement include from the March 16 meeting include the central bank noting that “COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks.”

Click here to see what else has changed in the statement.

—Fred Imbert, Hannah Miao

Fed raises rates by 50 basis points, biggest hike in 2 decades

The Fed raised rates by 50 basis points, marking the central bank’s biggest rate hike since 2000.

Wednesday’s statement noted that economic activity “edged down in the first quarter” but noted that “household spending and business fixed investment remained strong.” Inflation “remains elevated,” the statement said.

The Fed also said it will begin reducing its massive $9 trillion balance sheet on June 1.

—Fred Imbert

Trading strategies for the post-Fed market

Citi says stocks have further to fall before the Fed rethinks rate hikes

Historically, the market could count on the Fed to step in with easy policy to help limit big losses in equities. But with inflation running at 40-year highs, Citi analysts say the central bank could wait longer to take its foot off the breaks.

Data suggest the Fed could wait for the S&P 500 to sink to the 3,800 level, or 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} below Tuesday’s close.

“High inflation constrains the Fed, making easing monetary policy less likely if growth (or markets) fall,” Citi analyst Alexander Saunders said Wednesday. “We have long argued that elevated inflation would put the Fed in a bind — when growth weakens they would not be willing to or able to ride to the rescue by loosening monetary policy.”

— Tanaya Macheel

History shows these stocks beat the market as short-term rates climb

Short-term interest rates are on a tear this year, with the 2-year Treasury yield nearly quadrupling in 2022. With the Federal Reserve expected to hike the benchmark fed funds rate again in its May meeting, CNBC Pro screened for stocks that have outperformed during previous periods of rising short-term rates. Take a look at our list on CNBC Pro.

One name to emerge from our historical analysis is financial services firm Charles Schwab. The company benefits from rising rates in a number of ways. For example, the firm reinvests its customer balances at higher yields, while the rate it pays on those balances lags behind, widening the net interest margin. Sure enough, Schwab shares are up more than 5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} this week ahead of the Fed meeting statement release and press conference.

—Hannah Miao

Stocks, bonds struggle since first hike

The first Fed hike in March didn’t do much to calm markets.

Stocks initially rallied after the March Fed meeting, with the S&P 500 gaining more than 6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the back half of the month. However, after a rough April, the broad market index has hit new lows for the year. The Nasdaq Composite has had an even rougher time and is down nearly 20{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for the year.

The sell-off in bonds has been even more dramatic. The 10-year Treasury yield was at 2.16{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on March 15, the day before the first hike. That benchmark yield has traded above 3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} several times this week.

— Jesse Pound

The case for a post-Fed relief rally

The market is so ready for the Federal Reserve’s big rate hike later on Wednesday that it could see a relief rally once it has passed.

DataTrek’s Nicholas Colas noted that the market’s set-up heading into the Fed decision “is a near carbon copy” of the last two meetings. After those meetings, the S&P 500 rallied between 5.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} and 6.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the following one to two weeks, Colas said.

BlackRock’s Rick Rieder has also noted that the Fed could spark a relief rally, adding that the recent market sell-off could be nearing its end.

Stocks are coming off a horrible April, with the S&P 500 falling more than 8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for its biggest monthly decline since March 2020.

—Fred Imbert

50 basis point rate hike expected

The consensus on Wall Street is for the Federal Reserve to raise rates by 50 basis points Wednesday. However, some investors still worry that Fed Chairman Jerome Powell could signal an even more aggressive monetary policy stance, as the central bank tries to stave off the strongest inflationary pressures seen in decades.

“I think they’re going 50 [basis points], and it seems like they’re dead set on hiking rates enough to kill inflation,” Jim Caron, chief fixed income strategist on the global fixed income team at Morgan Stanley Investment Management, told CNBC earlier this week. “But that’s the real debate. Are they trying to get to target inflation by 2024? If they are, the wage inflation is pretty high and that will require even more tightening than the Fed is projecting.”

—Fred Imbert, Patti Domm

Posted on

SOS Limited Reports 2021 Full Year Financial Results

SOS Limited Reports 2021 Full Year Financial Results

Revenue Jumps 612{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $357.8 million

Gross Profit Improves 62.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $21.1 million

Mining Operations Begin Transitioning to the U.S.

QINGDAO,China, May 2, 2022 /PRNewswire/ — SOS Limited (“SOS” or the “Company”) (NYSE: SOS) today reported its full year financial results for the twelve-months ended December 31, 2021.

Revenue was $357.8 million, 612{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over the twelve-months ended December 31, 2020. Gross Profit increased to $21.1 million from $13.0 million, over the same period.

Results from Operations

Revenue

Net revenue was $357.8 million, up 612{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over the prior period. The robust growth of revenue demonstrated the strong and effective execution of the Company’s strategy, mainly due to rapid market expansion and the addition of crypto-mining and commodity trading operations. Growth was driven by taking advantage of our block-chain expertise.

Audited condensed consolidated Statements of comprehensive of loss

(US$ thousands, except share data and per share data, or otherwise noted)

Twelve months ended

31-Dec-20

31-Dec-21

$

$

Revenue

50,317

358,042

Business taxes and surcharges

(28)

(221)

Net revenue

50,289

357,821

Operating costs

(37,295)

(336,752)

Gross profit

12,994

21,070

Gross profit ratio

25.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

5.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

As of December 31, 2021, SOS focused on six product lines including insurance marketing, telecom call centers, bank call center, SaaS services, cryptocurrency mining and commodity trading.

Revenue by products

FY2021

FY2020

Product lines

$”000″

Percentage

$”000″

Percentage

Commodity trading

275,363

77.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

–

0.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Insurance marketing

65,880

18.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

49,234

97.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Cryptocurrency mining

15,427

4.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

–

0.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Telecom call center

338

0.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

920

1.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Bank call center

–

0.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

76

0.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

SaaS

813

0.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

58

0.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total net revenue

357,821

100.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

50,289

100.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Our traditional business of insurance marketing increased 34{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $65.9 million year over year, as a result of rapid market expansion from regional to national customer base in China. We added commodity trading to our product mix during the year. We buy and sell commodity products such as sesame, sulfur, asphalt and circuit modular units. Our trading business recorded revenue of $275.4 million, which represents 77.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of total sales. We booked revenue of $15.4 million from our cryptocurrency mining business from a partial year of operation. We started generating revenue from our mining pools in February 2021 and mined 174.28 units of BTC and 2,770.09 units of ETH by the end of the second quarter. In July 2021, due to the Chinese government’s ban on certain types of cryptocurrency mining activities, we shut down our mining operations in China and began transitioning our crypto mining operations to the U.S. The Company launched its U.S. mining operations in Wisconsin this April.

Operating Costs

Operating costs increased to $336.8 million for the period ended December 31, 2021, compared to operating costs of $37.3 million for the period ended December 31, 2020. The increase in operating costs and expenses was driven primarily from the growth in our commodity trading inventory and data acquisition costs for our insurance marketing businesses and a share-based compensation plan. We also saw an increase from depreciation on cryptocurrency mining equipment, consulting and legal fees.

General and Administrative Expenses

General and administrative expenses were $62.4 million for the period ended December 31, 2021, representing an increase of approximately 21.5 times compared to general and administrative expenses of $2.9 million for the period ended December 31, 2020. The increase in general and administrative expenses was mainly associated with employee and management’s share-based compensation expenses of $33.5 million, professional and consultancy fee of $17.1 million, wages & salary expenses of $5.3 million, $1.2 million of bad debt expense and significant increases in legal expenses related to class action lawsuit against the Company and its management.

GAAP Operating Loss and EPS

Our net loss for the period ended December 31, 2021 was $43.9 million according to GAAP, compared to profit of $4.9 million for the period ended December 31, 2020. The loss resulted from increased expenses related to increased operating expenses, legal and consulting fees and share-based compensation expenses. Gross margin dropped to 6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in FY 2021 from 26{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the prior year driven by the significant growth in the lower margin commodity trading business, increased operating expenses and the interruption of crypto-mining operations.

GAAP EPS Basic was $(0.020) per share for the period ended December 31, 2021, as compared to $0.0135 per share for the period ended December 31, 2020.

GAAP EPS Diluted was $(0.018) per share for the period ended December 31, 2021, as compared to $0.0090 per share for the period ended December 31, 2020.

Income Tax

The company incurred $0.74 million in corporate income tax for the current period.

Balance Sheet and Cash Flow

As of December 31, 2021, the Company had cash and cash equivalents of $338.0 million, compared to $3.7 million for the period ended December 31, 2020. The net increase in cash flow was mainly due to its financing activity through registered direct offerings. The Company believes that its cash resources are adequate to fund its current operations and short-term growth initiatives. The Company, through its subsidiary, SOS International Trading Co., Ltd. purchased commodity for trading inventory of $96.1 million.

Cash Flow Used For Investment Activities

The Company, through its subsidiaries, SOS Information Technology New York Inc. and China SOS Ltd., acquired BTC and ETH mining equipment for an aggregate cost of approximately $31 0 million

Financing Activities

The Company received aggregate net proceeds of US$585.8 million from registered direct offerings during the year.

Audited condensed consolidated statement of cash flow

(US$ thousands, except share data and per share data, or otherwise noted)

31-Dec-20

31-Dec-21

Cash flows from operating activities:

US$”000″

US$”000″

Net (loss)

4,404

(49,251)

Adjustments:

Depreciation and amortization

2

5,203

Share-based compensation

506

33,537

Depreciation of ROU

843

Accretion of finance leases

152

Allowance for doubtful accounts-accounts receivable

1

963

Allowance for doubtful accounts-Other receivable

158

269

Impairment of cryptocurrencies

925

Loss on acquisition

5,679

–

Income from disposal of discountined operations

(63)

Inventory

–

(96,071)

Changes in operating assets and liabilities:

Accounts receivables

(2,065)

(15,894)

Ohter receivables

(36,019)

(125,861)

Amount due from related parties

(2,871)

(4,146)

crptocurrencies

–

(14,502)

Accrued liabilities

–

19,815

Accounts payable

(11,940)

28,409

Tax payable

292

(8,371)

Other payables

1,484

5,003

Amount due to related parties

(3,666)

868

Contract liability

546

(454)

Lease liabilities

Net cash （used in）in generating from operating activities:

(43,552)

(218,563)

Cash flows from investing activities:

Purchase of property, equipment and software

(501)

(33,034)

Investment in equity

–

0

Disposition of assets

3,500

–

Net cash (used in)generated from investing activities

2,999

(33,034)

Cash flows from financing activities:

Repayment of principle portion of lease liabilities

(1,764.00)

Proceeds from share issuance, net of issuance costs

3,578

585,839

Proceeds from private equity placement,net of issuance costs

39,973

–

Net cash generated from(used in) financing activities

43,551

584,075

Effect of exchange rates on cash

683

1,825

Net increase/(decrease), effect of exchange rate changes on cash and cash equivalent

3,680

334,303

Cash and cash equivalent at beginning of the period

42

3,722

Cash and cash equivalent at end of the period

3,722

338,026

Yandai Wang, the CEO comments that “In the past year, we have provided technical services through artificial intelligence and blockchain technologies by leveraging data-driven marketing, digital based commodity trading, digital supercomputer and emergency rescue technology. Through this we were able to realize revenue of $357.8 million as of December 31,2021, which represents 661{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} growth. over 2020.

In our data marketing business, we rely on artificial intelligence technology & comprehensive intelligent screening to acquire customers more effectively; we also utilize blockchain technology to solve the information security problems to provide customers with one-stop benchmark customer acquisition services; In our digital-based commodity trading segmentt, we make full use of the accurate traceability of blockchain technology, product quality assurance, smart contracts, Intelligent trading matching technology to provides a one-stop trust trading platform for customer trading; in emergency rescue, we team up with some industry experts to invest and design emergency rescue watches, Emergency rescue amphibious rescue boat.

We believe we are well-positioned to grow our business in all segments. Within China we are focused on data-driven insurance marketing, and commodity trading. In U.S. we have launched our supercomputing hosting center in Wisconsin.

Mainland China, as one of the world’s largest markets, demands huge amount of raw material products and food commodities to sustain its long -term growth. In 2020 we established our commodity trading business to bridge supply and demand by providing seamless trading exchange through our block-chain technology and plat-form. We started from green field and are proud to report that our commodity trading business generated revenue of $275million during the twelve -month period ended December 31,2021.

Our aspiration is to expand beyond China especially in North America. We are in the process of building a leading supercomputer center in North America which will provide customers with cryptocurrency mining capacity & hosting service.

One of the tools we used to accelerate this goal is the innovative mobile container data center. We believe it will improve user experience and be attractive to small to medium size customers. Our plans continue to proceed as we have secured a renewable energy supply of 25 MW at its facility in Price County Wisconsin, which is expected to be increased to 37MW.

We look forward to continued growth and expansion in both China and U.S.

About SOS Limited

SOS is an emerging blockchain-based and big data-driven marketing solution provider，SOS is also engaged in blockchain and cryptocurrency operations, which currently include cryptocurrency mining and maybe expand into cryptocurrency security and insurance in the future Since April 2021, we launched commodity trading via our subsidiary SOS International Trading Co. Ltd, The core infrastructure of SOS’ marketing data, technology and solutions to insurance and emergency rescue services is built on big data, blockchain-based technology, cloud computing, AI, satellite, and 5G network, etc. SOS has created a cloud “software as a service (SaaS)” platform for emergency rescue services, with three major product categories: basic cloud, cooperative cloud, and information cloud. This system provides innovative marketing solutions to clients such as insurance companies, financial institutions, medical institutions, healthcare providers, auto manufacturers, security providers, senior living assistance providers, and other service providers in the emergency rescue services industry. For more information, please visit: http://www.sosyun.com/ .

Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. SOS cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Words such as “may,” “can,” “should,” “will,” “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” “look” or similar expressions may identify forward-looking statements. Specifically, forward-looking statements may include statements relating to the Company’s:

  • ability to execute its business plan;

  • changes in the market for SOS’ products and services; and

  • expansion plans and opportunities.

These forward-looking statements are based on information available as of the date of this press release and our management’s current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

These risks and uncertainties include, but not are limited to, the risk factors described by SOS in its filings with the Securities and Exchange Commission (“SEC”). These risk factors and those identified elsewhere in this press release, among others, could cause actual results to differ materially from historical performance and include, but are not limited to:

  • US government’s policies and regulatory oversight of crypto currency mining operation and our other operations;

  • SOS’s cryptocurrency mining, commodity trading and marketing solutions businesses are still under development, with many uncertainties in integration of these various business segments;

  • Failure to manage the newly launched commodities trading business effectively;

  • Loss of key customers in the commodity trading business;

  • failure to access a large quantity of power at reasonable costs could significantly increase SOS operating expenses and adversely affect our demand for SOS’s mining activities;

  • shortages in, or rises in the prices of mining machines may adversely affect the Company’s business;

  • any significant or prolonged failure in the data warehouse facilities and data mining facilities that SOS operates or services it provides, including events beyond its control, would lead to significant costs and disruptions and would reduce the attractiveness of its facilities, harm its business reputation and have a material adverse effect on its results of operation;

  • security breaches or alleged security breaches of our data warehouses could disrupt SOS operations and have a material adverse effect on its business, financial condition and results of operation; and

  • other risks and uncertainties indicated in SOS’s SEC reports or documents filed or to be filed with the SEC by SOS.

Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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Lincoln Educational Services Reports Continued Growth for Fourth Quarter and Full Year 2021

Lincoln Educational Services Reports Continued Growth for Fourth Quarter and Full Year 2021

2021 Operating and Financial Results Met or Exceeded Guidance

Conference Call Today at 10 a.m. ET

PARSIPPANY, N.J., Feb. 28, 2022 (GLOBE NEWSWIRE) — Lincoln Educational Services Corporation (Nasdaq: LINC) today, reported operating and financial results for the fourth quarter and full year ended December 31, 2021 as well as recent business developments.

Fourth Quarter 2021 Financial Highlights and Recent Operating Developments

  • Revenue of $87.8 million, up 7.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to prior year

  • Adjusted EBITDA* of $15.1 million, up 13.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over prior year

  • Average student population up 6.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}; ending population up 6.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} or 850 students

  • Consummated sale-leaseback transactions generate gain on sale of $22.5 million and net proceeds of $45.4 million, with approximately $17 million used to retire all outstanding debt

  • Net cash position of $83.3 million, up $62.5 million over prior year

  • Net income of $24.0 million

Full Year 2021 Results – Achieved or Exceeded Guidance

  • Revenue grew 14.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

  • Student start growth of 7.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

  • Adjusted EBITDA* of $38.1 million

  • Adjusted pre-tax net income* of $27.1 million

*See Use of “Non-GAAP Financial Information” below.

“Strong execution, both during the fourth quarter and for the full year, allows Lincoln to enter 2022 in an extremely strong operating position with approximately 850 more students compared to the year-ago period. Additionally, the proceeds from the sale-leaseback transactions significantly improved our liquidity, giving us one of the strongest balance sheets in Lincoln’s 75-year history,” said Scott Shaw, President & CEO. “Our continued success, high graduate placement rates and a more favorable outlook for high school student starts compared to a year ago, gives us a high degree of confidence that we can achieve even greater results for years to come.

The expected proceeds of approximately $34.0 million from the contemplated sale of our Nashville, Tennessee property, assuming consummation, combined with our continuing strong cash flow provides the Company with even more financial resources to execute our near and long-term growth strategies. During 2022, we plan to begin the relocation of our Nashville campus to a new and more efficient facility in the Nashville area. Furthermore, we plan to expand our footprint through a new campus while continuing to invest in new programs. We are poised to execute these strategies to generate consistent, long-term growth while enhancing our ability to serve our growing student population as well as our corporate partners.”

2021 FOURTH QUARTER FINANCIAL RESULTS

(Quarter ended December 31, 2021 compared to quarter ended December 31, 2020)

  • Revenue increased $6.0 million, or 7.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $87.8 million from $81.8 million. The increase in revenue resulted from a 6.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in average population, driven by a 7.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in starts for the year.

  • Educational services and facilities expense increased $3.3 million, or 10.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $34.8 million from $31.5 million in the prior year comparable period. Increased costs were primarily concentrated in instructional expense, books and tools expense and facilities expense. In addition to increases resulting from higher student populations, instruction expense rose due to higher salaries as a consequence of inflationary pressures and instructor shortages, particularly in nursing programs. Facility expenses increased $0.6 million due to additional rent expense in the current quarter as a result of the sale-leaseback transactions.

  • Selling, general and administrative expense increased $1.6 million, or 4.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $40.8 million primarily due to an increase in benefits expense driven by an uptick in medical claims in the current year in combination with a slight increase in salaries.

  • Gain on sale of assets was $22.5 million recorded upon the consummation of the sale-leaseback transactions involving the Denver, Colorado and Grand Prairie, Texas campuses.

  • Operating income increased to $34.0 million in 2021, from $11.1 million in the prior year period. The increase was mainly driven by a $22.5 million gain resulting from the sale-leaseback transactions, partially offset by $0.6 million of additional rent expense related to the two campuses that were subject of the sale-leaseback transactions and a $0.7 million non-cash impairment charge to adjust the book value of a former campus facility, which closed about 10 years ago. Excluding the impact of the sale-leaseback transactions and the impairment charge as a one-time event, operating income would have increased $1.7 million, or 15.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

  • Net interest expense increased $0.8 million, to $1.1 million from $0.3 million in the prior year comparable period. The additional expense was driven by the sale-leaseback transactions which included $0.5 million related to terminating the interest rate hedge early and $0.5 million non-cash write-off of deferred finance fees.

  • Net income of $24.0 million, or $0.73 per diluted share, compared to $46.0 million, or $1.44 per diluted share. In 2021, income tax provision was $12.5 million compared to $35.1 million tax benefit related to a full valuation allowance reversal in 2020.

  • Debt-free balance sheet as of December 31, 2021 after payoff of all outstanding debt in the fourth quarter compared to $17.8 million of borrowings in the prior year.

FOURTH QUARTER SEGMENT RESULTS
Transportation and Skilled Trades Segment
Revenue increased $4.3 million, or 7.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $62.9 million from $58.6 million in the prior year comparable period. The increase in revenue results from a 7.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher average student population, driven by the 9.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in student starts for the year.

Operating income improved to $16.6 million from $15.6 million in the prior year comparable quarter, driven mainly by revenue growth.

Healthcare and Other Professions Segment
Revenue increased $1.7 million, or 7.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $24.9 million from $23.2 million in the prior year comparable quarter. The increase in revenue results from a 3.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} higher average student population, driven by the 4.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in student starts for the year, and a 3.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in average revenue per student in the current quarter.

Operating income was $4.1 million down slightly from $4.7 million in the prior year comparable quarter due primarily to higher instructional salaries.

Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $8.5 million compared to $9.2 million after excluding the $22.5 million gain from sale-leaseback transactions, partially offset by a one-time non-cash impairment charge of $0.7 million in the current year.

YEAR-END FINANCIAL RESULTS
(Period ended December 31, 2021 compared to December 31, 2020)

  • Total revenue increased by $42.2 million, or 14.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $335.3 million, compared to $293.1 million

  • Student starts grew by 1,081 or 7.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 15,402 compared to 14,321

  • Transportation and Skilled Trades segment revenue increased by $33.1 million, or 16.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $240.5 million, compared to $207.4 million

  • The Healthcare and Other Professions segment revenue increased by $9.1 million, or 10.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $94.8 million, compared to $85.7 million

  • Adjusted EBITDA increased $14.2 million or 59{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $38.1 million, compared to $23.9 million

  • Operating income increased to $49.3 million as compared to $14.8 million

FULL YEAR 2022 OUTLOOK

Through the combination of cash generated from Lincoln’s strong operating performance and additional liquidity provided by the sale-leaseback transactions, Lincoln entered 2022 with over $80 million of net cash. In addition, the Company has availability under its credit agreement and anticipates increasing its cash position from the contemplated consummation of the sale of its Nashville, Tennessee campus. Lincoln will utilize this strong balance sheet to increase its level of investment in growth strategies and operating efficiencies.

Specific operating and financial guidance for the coming year is as follows:

  • Revenue in the range of $350 million to $365 million

  • Student start growth in the range of 5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to 10{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

  • Adjusted EBITDA* in the range of $35.0 million to $40.0 million

  • Net Income in the range of $17.0 million to $22.0 million

  • Capital expenditures in the range of $7.0 million to $9.0 million

*See Use of “Non-GAAP Financial Information” below

The 2022 guidance excludes the impact of the contemplated consummation of the sale and relocation of the Nashville, Tennessee campus, which is under contract, as well as additional costs associated with a new potential campus. The outlook is based on, among other things, current enrollment trends and does not account for the impact from continuing COVID-19 issues or any new COVID-19 variants. Accordingly, as is always the case, the guidance may be revised as the year unfolds due to changes in student demand and other factors.

The Company is also providing additional information as to the progress of operations through 2022. This information represents management’s current expectations for the upcoming year and may be revised in-line with the developing business environment.

Revenue
Pursuant to the Company’s seasonality patterns, it is anticipated that approximately 45{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of revenue will occur in the first half of the year. Student starts are expected to increase in the low single digits during the first quarter, with higher start growth in the remainder of the year.

Operating Expenses
Operating expenses are expected to range in the low to mid $80 million level each quarter, with the third quarter’s expenses expected to reflect the high point of the year, consistent with the seasonality of the Company’s business. This higher level of operating expenses for the full year includes the addition of $3.2 million of rent expense resulting from the sale-leaseback transactions as well as $2.0 million of additional spending related to growth initiatives, efforts to streamline operations and development and implementation of improvements to Lincoln’s hybrid teaching model. First quarter operating expenses will show the largest increase year over year, as the first quarter of 2021 included a one-time $3.0 million benefit due to Care Act funds credited to student’s accounts.

Other
Interest expense, depreciation and amortization and stock-based compensation expense are expected to be approximately $0.4 million, $6.6 million, and $4.5 million respectively, recognized evenly throughout the year. The effective tax rate for the year is projected to be 28.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

CONFERENCE CALL INFO
Lincoln will host a conference call today at 10:00 a.m. Eastern Daylight Time to discuss results. To access the live webcast of the conference call, please go to the Investor Relations section of Lincoln’s website at http://www.lincolntech.edu.
Participants can also listen to the conference call by dialing 844-413-0946 (domestic) or 216-562-0456 (international) and providing access code 2498132.
Please log in or dial into the call at least 10 minutes prior to the start time.

  • An archived version of the webcast will be accessible for 90 days at http://www.lincolntech.edu.

  • A replay of the call will also be available for seven days by calling 855-859-2056 (domestic) or 404-537-3406 (international) and providing access code 2498132.

ABOUT LINCOLN EDUCATIONAL SERVICES CORPORATION
Lincoln Educational Services Corporation is a provider of diversified career-oriented post-secondary education helping to provide solutions to America’s skills gap. For 75 years, Lincoln has offered and continues to offer recent high school graduates and working adults degree and diploma programs. The Company operates under two reportable segments: Transportation and Skilled Trades and Healthcare and Other Professions. Lincoln has provided the nation’s workforce with skilled technicians since its inception in 1946. For more information, go to www.lincolntech.edu.

SAFE HARBOR
Statements in this press release and in oral statements made from time to time by representatives of Lincoln Educational Services Corporation regarding Lincoln’s business that are not historical facts, including those made in a conference call, may be “forward-looking statements” as that term is defined in the federal securities law. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Generally, these statements relate to business plans or strategies and projections involving anticipated revenues, earnings or other aspects of the Company’s operating results. Such forward-looking statements include the Company’s current belief that it is taking appropriate steps regarding the pandemic and that student growth will continue. The Company cautions you that these statements concern current expectations about the Company’s future performance or events and are subject to a number of uncertainties, risks and other influences many of which are beyond the Company’s control, that may influence the accuracy of the statements and the projects upon which the statements are based including, without limitation, impacts related to the COVID-19 pandemic, our inability to close on the sale of our Nashville campus; our failure to comply with the extensive regulatory framework applicable to our industry or our failure to obtain timely regulatory approvals in connection with acquisitions or a change of control of our Company; our success in updating and expanding the content of existing programs and developing new programs for our students in a cost-effective manner or on a timely basis; risks associated with changes in applicable federal laws and regulations; uncertainties regarding our ability to comply with federal laws and regulations, such as the 90/10 rule and prescribed cohort default rates; risks associated with the opening of new campuses; risks associated with integration of acquired schools; industry competition; our ability to execute our growth strategies; conditions and trends in our industry; the COVID-19 pandemic and its impact on our business and the U.S. and global economics; general economic conditions; and other factors discussed in the “Risk Factors” section of our Annual Reports and Quarterly Reports filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise after the date hereof.

(Tables to Follow)
(In Thousands)

Three Months Ended

Year-Ended

December 31,

December 31,

(Unaudited)

(Unaudited)

2021

2020

2021

2020

REVENUE

$

87,816

$

81,792

$

335,336

$

293,095

COSTS AND EXPENSES:

Educational services and facilities

34,788

31,463

138,931

122,196

Selling, general and administrative

40,762

39,188

168,923

156,199

(Gain) loss on disposition of assets

(22,479

)

15

(22,479

)

(81

)

Impairment of long-lived assets

700

–

700

–

Total costs & expenses

53,771

70,666

286,075

278,314

OPERATING INCOME

34,045

11,126

49,261

14,781

OTHER:

Interest expense

(1,142

)

(315

)

(2,015

)

(1,275

)

INCOME BEFORE INCOME TAXES

32,903

10,811

47,246

13,506

PROVISION (BENEFIT) FOR INCOME TAXES

8,939

(35,209

)

12,528

(35,059

)

NET INCOME

$

23,964

$

46,020

$

34,718

$

48,565

PREFERRED STOCK DIVIDENDS

304

304

1,219

1,378

INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

23,660

$

45,716

$

33,499

$

47,187

Basic and Diluted

Net income per share

$

0.73

$

1.44

$

1.04

$

1.49

Weighted average number of common shares outstanding:

Basic and Diluted

25,180

24,831

25,081

24,748

Other data:

Adjusted EBITDA (1)

$

15,136

$

13,380

$

38,065

$

23,867

Depreciation and amortization

$

1,520

$

1,854

$

7,140

$

7,400

Number of campuses

22

22

22

22

Average enrollment

13,599

12,796

12,899

11,729

Stock-based compensation

$

796

$

400

$

2,889

$

1,686

Net cash provided by operating activities

$

9,697

$

13,263

$

27,447

$

23,485

Net cash provided by (used in) investing activities

$

43,100

$

(2,026

)

$

37,848

$

(5,483

)

Net cash used in financing activities

$

(16,640

)

$

(804

)

$

(20,014

)

$

(18,620

)

Selected Consolidated Balance Sheet Data:

December 31, 2021

(Unaudited)

Cash and cash equivalents

$

83,307

Current assets

121,627

Working capital

55,745

Total assets

295,299

Current liabilities

65,882

Long-term debt obligations, including current portion, net of deferred financing fees

–

Series A convertible preferred stock

11,982

Total stockholders’ equity

129,418

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company believes it is useful to present non-GAAP financial measures that exclude certain significant items as a means to understand the performance of its business. EBITDA, Adjusted EBITDA, reconciled net cash and Adjusted Pre-tax income are measures not recognized in financial statements presented in accordance with GAAP.

  • We define EBITDA as income (loss) before interest expense (net of interest income), provision (benefit) for income taxes, depreciation and amortization.

  • We define Adjusted EBITDA as EBITDA plus stock compensation expense and adjustments for items not considered part of the Company’s normal recurring operations.

  • We define reconciled net cash as our cash and cash equivalents and restricted cash less both the short and long-term portion under the Company’s credit agreement, and deferred financing fees.

  • We define Adjusted pre-tax income as pre-tax net income before gain on sale of assets, non-cash impairment charges and expenses incurred resulting from the consummation of the sale-leaseback transactions.

EBITDA, Adjusted EBITDA, reconciled net cash and Adjusted Pre-tax income are presented because we believe they are useful indicators of our performance and our ability to make strategic acquisitions and meet capital expenditures and debt service requirements. However, they are not intended to represent cash flows from operations as defined by GAAP and should not be used as an alternative to net income (loss) as indicators of operating performance or cash flow as a measure of liquidity. EBITDA, Adjusted EBITDA, reconciled net cash and Adjusted Pre-tax income are not necessarily comparable to similarly titled measures used by other companies.

Following is a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA, reconciled net cash and Adjusted Pre-tax income:

Three Months Ended December 31,

Year-Ended December 31,

(Unaudited)

(Unaudited)

2021

2020

2021

2020

Net income

$

23,964

$

46,020

$

34,718

$

48,565

Interest expense, net

1,142

315

2,015

1,275

Provision (benefit) for income taxes

8,939

(35,209

)

12,528

(35,059

)

Depreciation and amortization

1,520

1,854

7,140

7,400

EBITDA

35,565

12,980

56,401

22,181

Stock compensation expense

796

400

2,889

1,686

Gain on sale of asset

(22,479

)

–

(22,479

)

–

Impairment

700

–

700

–

Sale leaseback rent expense

554

–

554

–

Adjusted EBITDA

$

15,136

$

13,380

$

38,065

$

23,867

December 31,

(Unaudited)

2021

2020

Current portion of credit agreement and term loan

$

–

$

(2,000

)

Long-term credit agreement and term loan

–

(15,212

)

Cash and cash equivalents

83,307

38,026

Reconcilled net cash

$

83,307

$

20,814

December 31, 2021

(Unaudited)

Pre-tax net income

$

47,246

Gain on disposition of asset

(22,479

)

Non-cash impairment0

700

Sale leaseback expenses

1,684

Adjusted pre-tax income

$

27,151

Three Months Ended December 31,

2021

2020

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change

Revenue:

Transportation and Skilled Trades

$

62,945

$

58,636

7.3

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

HOPS

24,871

23,156

7.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

$

87,816

$

81,792

7.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Operating Income (Loss):

Transportation and Skilled Trades

$

16,632

$

15,611

6.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

4,101

4,681

-12.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Corporate

13,312

(9,166

)

245.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

$

34,045

$

11,126

206.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Starts:

Transportation and Skilled Trades

1,467

1,438

2.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

1,254

1,228

2.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

2,721

2,666

2.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Average Population:

Transportation and Skilled Trades

9,087

8,536

6.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(82

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Transportation and Skilled Trades 1

9,087

8,454

7.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

4,512

4,400

2.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(58

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions 1

4,512

4,342

3.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

13,599

12,936

5.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total 1

13,599

12,796

6.3

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

End of Period Population:

Transportation and Skilled Trades

8,648

7,917

9.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(22

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Transportation and Skilled Trades 1

8,648

7,895

9.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

4,411

4,402

0.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(80

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions 1

4,411

4,322

2.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

13,059

12,319

6.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total 1

13,059

12,217

6.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

1 Excluding Leave of Absence – COVID-19

Year-Ended December 31,

2021

2020

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change

Revenue:

Transportation and Skilled Trades

$

240,531

$

207,434

16.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

HOPS

94,805

85,661

10.7

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

$

335,336

$

293,095

14.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Operating Income (Loss):

Transportation and Skilled Trades

$

52,055

$

34,458

51.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

11,845

11,068

7.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Corporate

(14,639

)

(30,745

)

52.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

$

49,261

$

14,781

233.3

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Starts:

Transportation and Skilled Trades

10,291

9,442

9.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

5,111

4,879

4.8

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

15,402

14,321

7.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Average Population:

Transportation and Skilled Trades

8,505

7,872

8.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

(12

)

(219

)

94.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Transportation and Skilled Trades 1

8,493

7,653

11.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

4,439

4,232

4.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

(33

)

(156

)

78.8

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions 1

4,406

4,076

8.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

12,944

12,104

6.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total 1

12,899

11,729

10.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

End of Period Population:

Transportation and Skilled Trades

8,648

7,917

9.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(22

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Transportation and Skilled Trades 1

8,648

7,895

9.5

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions

4,411

4,402

0.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Leave of Absence – COVID-19

–

(80

)

100.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Healthcare and Other Professions 1

4,411

4,322

2.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total

13,059

12,319

6.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Total 1

13,059

12,217

6.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

1 Excluding Leave of Absence – COVID-19

LINCOLN EDUCATIONAL SERVICES CORPORATION
Brian Meyers, CFO
973-736-9340

EVC GROUP LLC
Investor Relations: Michael Polyviou, mpolyviou@evcgroup.com, 732-933-2755
Media Relations: Tom Gibson, 201-476-0322