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Newtek Business Services Corp. Reports Third Quarter 2022

Newtek Business Services Corp. Reports Third Quarter 2022

Record SBA 7(a) Loan Fundings of $223.0 Million Increased by 36.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the Third Quarter of 2022 Over the Same Period Last Year

Raised Full Year 2022 SBA 7(a) Loan Funding Guidance to Approximately $775 Million

BOCA RATON, Fla., Nov. 07, 2022 (GLOBE NEWSWIRE) — Newtek Business Services Corp. (“Newtek” or the “Company”) (Nasdaq: NEWT), an internally managed business development company (“BDC”), announced today its financial and operating results for three and nine months ended September 30, 2022.

Third Quarter 2022 Financial Highlights

  • Total investment income of $23.6 million for the three months ended September 30, 2022; an increase of 90.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to total investment income of $12.4 million for the three months ended September 30, 2021.
  • Net investment income (loss) of $0.2 million, or $0.01 per share, for the three months ended September 30, 2022, which represents a 103.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase, on a per share basis, compared to net investment income (loss) of $(6.7) million, or $(0.30) per share, for the three months ended September 30, 2021.
  • Adjusted net investment income (“ANII”)1 of $15.0 million, or $0.62 per share, for the three months ended September 30, 2022; an increase of 10.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, on a per share basis, compared to ANII of $12.6 million, or $0.56 per share, for the three months ended September 30, 2021.
  • Debt-to-equity ratio of 1.41x at September 30, 2022; proforma debt-to-equity ratio was 1.26x after taking into account the sales of government-guaranteed portions of SBA 7(a) loans prior to September 30, 2022, which sales settled subsequent to the balance sheet date.
  • Total investment portfolio increased by 10.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $785.6 million at September 30, 2022, from $712.5 million at September 30, 2021.
  • Net asset value (“NAV”) of $391.8 million, or $16.04 per share, at September 30, 2022 compared to NAV of $16.23 per share at September 30, 2021.

Financial Highlights For the Nine Months Ended September 30, 2022

  • Total investment income of $63.2 million for the nine months ended September 30, 2022; a decrease of (24.5){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over total investment income of $83.7 million for the nine months ended September 30, 2021 which included $50.0 million of fee income from the Paycheck Protection Program (“PPP”), which, as previously disclosed, is not recurring.
  • Net investment income (loss) of $(1.1) million, or $(0.04) per share, for the nine months ended September 30, 2022, which represents a (103.7){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease, on a per share basis, compared to net investment income (loss) of $24.0 million, or $1.07 per share, for the nine months ended September 30, 2021, which included $50.0 million of fee income from the PPP which, as previously disclosed, is not recurring.
  • ANII1 of $50.3 million, or $2.08 per share, for the nine months ended September 30, 2022; a decrease of (26.0){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, on a per share basis, compared to ANII of $63.1 million, or $2.81 per share, for the nine months ended September 30, 2021, which included $50.0 million of fee income from the PPP which, as previously disclosed, is not recurring.

    Additional Third Quarter Highlights

  • On September 21, 2022, the Company announced its future rebranding strategy in anticipation of the acquisition of the National Bank of New York City (“NBNYC,” and the “Acquisition”), which is pending approval of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of Currency and the U.S. Small Business Administration (“Regulatory Approvals”) and satisfaction of closing conditions.
    • Upon receipt of the pending Regulatory Approvals and the close of the Acquisition, Newtek plans to change its name to “NewtekOne®” and to rename NBNYC, the 59-year-old nationally chartered bank, “Newtek Bank, National Association.”
  • On September 7, 2022, the Company closed its twelfth small business loan securitization, with the sale of $116.2 million of Unguaranteed SBA 7(a) Loan-Backed Notes, Series 2022-1, consisting of $95.4 million of Class A Notes and $20.8 million of Class B Notes, rated“A- (sf)” and “BBB- (sf)”, respectively, by S&P Global Ratings.

2022 Dividend Declarations & Payments

  • On September 30, 2022, the Company paid a third quarter 2022 cash dividend of $0.65 per share to shareholders of record as of September 20, 2022.
  • On September 28, 2022, the Company forecasted a fourth quarter 2022 cash distribution of $0.70 per share, which includes a spillover dividend of Company retained earnings in anticipation of the Company converting from a BDC and discontinuing its election to be regulated under the Investment Company Act of 1940, subject to Regulatory Approvals of the pending Acquisition and other conditions described in the Company’s proxy statement filed with the SEC on May 2, 2022, after which the Company would no longer qualify as a regulated investment company (“RIC”) for federal income tax purposes and will no longer qualify for accounting treatment as an investment company. This dividend is subject to Board approval.2
  • If this fourth quarter 2022 distribution is declared by the Board, the Company expects to pay approximately $2.75 per share in cash dividends and distributions to shareholders in 2022.

Lending Highlights

  • Newtek Small Business Finance, LLC (“NSBF”) funded a record $223.0 million of SBA 7(a) loans during the three months ended September 30, 2022; a 36.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the $163.9 million of SBA 7(a) loans funded for the three months ended September 30, 2021.
  • NSBF funded a record $586.9 million in SBA 7(a) loans for the nine months ended September 30, 2022, which represents an 61.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $362.6 million SBA 7(a) loan fundings for the nine months ended September 30, 2021.
  • NSBF funded $64.1 million SBA 7(a) loans in October 2022.
  • From January 1, 2022 through October 31, 2022, NSBF funded a record $650.9 million of SBA 7(a) loans; a 68.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $386.8 million of SBA 7(a) loans for the same period last year.
  • NSBF increased its full year 2022 SBA 7(a) loan funding guidance to approximately $775 million, which would represent a 38.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $560.6 million of SBA 7(a) loans funded in 2021.
  • Newtek Business Lending (“NBL”), a wholly owned portfolio company, closed $101.0 million of SBA 504 loans year-to-date through October 31, 2022; an increase of 22.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over $82.4 million of SBA 504 loans closed during the same period in 2021.
  • NBL forecasts closing approximately $150 million of SBA 504 loans for the full year 2022, which would represent a 66.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $90.1 million of SBA 504 closings in 2021.

Barry Sloane, Chairman, President and Chief Executive Officer said, “We are extremely proud of our results for the third quarter and first nine months of 2022. While 2022 has been challenging, due to the preparation for the repositioning of the Company in anticipation of converting to a bank holding company through the pending Acquisition of NBNYC, which remains subject to Regulatory Approvals; an increase in interest rates; and the impacts of inflation on our operating businesses as well as those of our clients, we are thrilled with the results we have been able to produce. We believe net investment income of $0.01 per share for the third quarter of 2022 exceeds analysts’ consensus estimates of $(0.05) per share, and we believe our ANII for the third quarter 2022 of $0.62 per share, exceeds analysts’ consensus estimates of $0.58 per share. We are pleased to have been able to beat analysts consensus estimates. In addition, it is important to remind our investor base that our results for the nine months ended September 30, 2022 compared to the same period in 2021, do not include the benefit of the extraordinary performance the Company had in funding loans under the PPP, which PPP fee income is non-recurring.”

Commenting on Newtek’s SBA 7(a) loan program Mr. Sloane said, “We had record SBA 7(a) loan fundings in the third quarter of 2022, which followed record SBA 7(a) fundings in the second quarter of 2022. In fact, year-to-date through October 31, 2022, we have funded a record $650.9 million in SBA 7(a) loans which represents a 68{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the $386.3 million SBA 7(a) loans funded for the same period last year. Furthermore, from January 1, 2022 through October 31, 2022, we funded a total of 1,037 SBA 7(a) loan units, which represents an 86{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the 557 SBA 7(a) loan units for the same period last year. With our strong SBA 7(a) funding performance thus far this year, coupled with the fact that there is less than two months left in 2022, we are raising our full year 2022 SBA 7(a) loan funding guidance to $775 million. In addition, with these record fundings, it is important to note that that the Company has been mindful in tightening its credit standards as evidenced by the weighted average FICO score in NSBF’s most recent securitization, which equaled 725 on its guarantors versus a weighted average FICO score of 704 in our SBA 7(a) loan portfolio at December 31, 2021.”

Mr. Sloane continued, “The Company also anticipates NBL closing a record number of SBA 504 loans in the fourth quarter of 2022 and achieving record SBA 504 loan closings of $150 million for the full year of 2022. The performance of NBL’s SBA 504 and non-conforming conventional loan program demonstrates the ability to acquire, assemble, underwrite, fund, and manage loans of all sizes, types and credit quality among the Company’s independent business owner client base. NBL’s SBA 504 loan program, which has originated $388.4 million of SBA 504 loans since 2017, has not experienced any charge offs or defaults In addition, we have originated $132.5 million in non-conforming conventional loans since the inception of the program in 2019, and have not experienced any charge offs or defaults. Furthermore, during the third quarter of 2022, the Company entered into a new joint venture agreement with a $15 billion asset management company to provide up to $100 million of equity capital to fund non-conforming conventional loans. Additionally, the joint venture is preparing to close on a $150 million leverage facility from a well-known investment bank. We believe we will be able to fund $600 million of non-conforming conventional loans in 2023 and over $1.0 billion non-conforming conventional loans in 2024, which will be part of our forecasts going forward.”

Mr. Sloane further commented, “We also are pleased that, despite turbulent market conditions, our wholly-owned controlled portfolio companies, Newtek Merchant Solutions and Newtek Technology Solutions, are expected to generate approximately a combined $20 million of EBITDA in 2023. The Company, during this transformative period of anticipating conversion from a BDC to a bank holding company, has been limited in its ability to forecast future earnings and dividends beyond 2022 due to the pending Acquisition of NBNYC. We are reaffirming our forecast for a fourth quarter 2022 distribution of $0.70 per share, which would bring total cash dividends and distributions for 2022 to $2.75 per share. The fourth quarter 2022 forecasted distribution of $0.70 per share, which includes a spillover dividend of Company retained earnings in anticipation of the Company converting from a BDC, is expected to be paid on or about December 31, 2022.”

Discussing rising interest rates, Mr. Sloane concluded, “We have been asked regularly how increases in interest rates affect our business model. We believe that anyone stating that rising interest rates is good for business is not giving the full picture. In our case, we believe that we are well positioned as our floating rate SBA 7(a) loan portfolio primarily adjusts at Prime plus 275 basis points without a cap; moreover, new SBA 7(a) loan originations will be at Prime plus 300 basis points in accordance with new SBA rules. Prime is currently at 7.00{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, however based on the SOFR futures market, we believe Prime will increase by an additional 50 basis points in December, and as such it’s likely our SBA 7(a) portfolio will adjust to a 10{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to 10.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} coupon in January 2023. We believe converting to a bank holding company and owning a bank will carve out an attractive future for us as it will enable us to finance our growth with core deposits. We look forward to the possible Regulatory Approvals of the Acquisition in the fourth quarter of 2022. Once we have a clear path to converting to a bank holding company, we anticipate forecasting earnings as a bank holding company for the next 24 months.”

Third Quarter 2022 Conference Call and Webcast

A conference call to discuss third quarter 2022 results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer, and Nicholas Leger, Chief Accounting Officer, tomorrow, Tuesday, November 8, 2022 at 8:30 a.m. ET.

Please note, to attend the conference call or webcast, participants should register online at http://investor.newtekbusinessservices.com/events-and-presentations. To receive a dial-in number, participants are requested to register at a minimum 15 minutes before the start of the call. The corresponding presentation will be available in the ‘Events & Presentations’ section of the Investor Relations portion of Newtek’s website at http://investor.newtekbusinessservices.com/events-and-presentations. A replay of the call with the corresponding presentation will be available on Newtek’s website shortly following the live presentation and will be available for a period of 90 days.

1Use of Non-GAAP Financial Measures – Newtek Business Services Corp. and Subsidiaries

In evaluating its business, Newtek considers and uses ANII as a measure of its operating performance. ANII includes short-term capital gains from the sale of the guaranteed portions of SBA 7(a) loans and conventional loans, and beginning in 2016, capital gain distributions from controlled portfolio companies, which are reoccurring events. The Company defines ANII as net investment income (loss) plus net realized gains recognized from the sale of guaranteed portions of SBA 7(a) loan investments, less realized losses on non-affiliate investments, plus the net realized gains on controlled investments, plus or minus the change in fair value of contingent consideration liabilities, plus loss on extinguishment of debt, plus or minus an adjustment for gains or losses on derivative transactions.

We do not designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, our derivatives are recognized currently in our GAAP income statement. However, fluctuations in the fair value of the related assets are not included in our income statement. We consider the gain or loss on our hedging positions related to assets that we still own as of the reporting date to be “open hedging positions.” While recognized for GAAP purposes, we exclude the results on the hedges from ANII until the related asset is sold and/or the hedge position is “closed,” whereupon they would then be included in ANII in that period. These are reflected as “adjustment for realized gain/(loss) on derivatives” for purposes of computing ANII for the period. Management believes that excluding these specifically identified gains and losses associated with the open hedging positions adjusts for timing differences between when we recognize changes in the fair values of our assets and changes in the fair value of the derivatives used to hedge such assets.

The term ANII is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. ANII has limitations as an analytical tool and, when assessing the Company’s operating performance, investors should not consider ANII in isolation, or as a substitute for net investment income, or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, ANII does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than Newtek, limiting their usefulness as comparative tools. The Company compensates for these limitations by relying primarily on its GAAP results supplemented by ANII. Reconciliation tables showing the adjustments made to net investment income to determine NII are attached to this press release.

2 Note Regarding Dividend Payments

Amount and timing of dividends, if any, remain subject to the discretion of the Company’s Board of Directors. The Company’s Board of Directors expects that it will maintain its status as a BDC and regulated investment company (“RIC”) in the near term, and therefore expects to maintain a dividend policy with the objective of making quarterly distributions in an amount that approximates 90 – 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of the Company’s annual taxable income. The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon its taxable income for the full year and distributions paid for the full year.

Newtek Business Services Corp., Your Business Solutions Company®, is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business and financial solutions under the Newtek® brand to the small- and medium-sized business (“SMB”) market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.

Newtek’s and its portfolio companies’ products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.

Newtek® and Your Business Solutions Company®, are registered trademarks of Newtek Business Services Corp.

Note Regarding Forward Looking Statements
This press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or similar expressions are intended to identify forward-looking statements. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, include our ability to close the pending acquisition of the National Bank of New York City (the “Transaction”), obtain required regulatory approvals for the pending Transaction, the timing of the closing of the Transaction, the timing of the Company’s discontinuance from regulation as a BDC under the 1940 Act, projections concerning or considering the pending Transaction, the timing of our our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital and the ability to maintain certain debt to asset ratios, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions, which could cause Newtek’s actual results to differ from management’s current expectations, are contained in Newtek’s filings with the Securities and Exchange Commission and available through http://www.sec.gov/.    Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.

SOURCE: Newtek Business Services Corp.

Investor Relations & Public Relations
Contact: Jayne Cavuoto
Telephone: (212) 273-8179 / jcavuoto@newtekone.com

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(In Thousands, except for Per Share Data)
  September 30, 2022   December 31, 2021
ASSETS (Unaudited)    
Investments, at fair value      
SBA unguaranteed non-affiliate investments (cost of $502,400 and $431,970, respectively; includes $438,045 and $344,266, respectively, related to securitization trusts) $ 488,376   $ 424,417
SBA guaranteed non-affiliate investments (cost of $21,648 and $65,728, respectively)   22,949     72,970
Controlled investments (cost of $168,237 and $157,289, respectively)   272,928     260,398
Non-control investments (cost of $1,360 and $1,000, respectively)   1,360     1,000
Total investments at fair value   785,613     758,785
Cash   7,355     2,397
Restricted cash   74,777     184,463
Broker receivable   71,634     44,537
Due from related parties   947     4,395
Servicing assets, at fair value   33,530     28,008
Right of use assets   6,381     7,310
Other assets   26,298     26,666
Total assets $ 1,006,535   $ 1,056,561
       
LIABILITIES AND NET ASSETS      
Liabilities:      
Bank notes payable $ 67,500   $ 50,000
2024 Notes (par: $38,250 and $38,250 as of September 30, 2022 and December 31, 2021)   37,847     37,679
2025 6.85{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Notes (par: $0 and $15,000 as of September 30, 2022 and December 31, 2021)   —     14,545
2025 5.00{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Notes (par: $30,000 and $0 as of September 30, 2022 and December 31, 2021)   29,246     —
2026 Notes (par: $115,000 and $115,000 as of September 30, 2022 and December 31, 2021)   112,666     112,128
Notes payable – Securitization trusts (par: $302,253 and $249,750 as of September 30, 2022 and December 31, 2021)   298,125     246,250
Notes payable – related parties   150     11,450
Due to related parties   1,849     1,490
Lease liabilities   7,945     9,056
Deferred tax liabilities   12,908     12,733
Due to participants   34,660     146,225
Derivative instruments   —     183
Accounts payable, accrued expenses and other liabilities   11,840     10,935
Total liabilities   614,736     652,674
       
Commitment and contingencies      
Net assets:      
Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding)   —     —
Common stock (par value $0.02 per share; authorized 200,000 shares, 24,425 and 24,159 issued and outstanding, respectively)   485     483
Additional paid-in capital   370,703     367,663
Accumulated undistributed earnings   20,611     35,741
Total net assets   391,799     403,887
Total liabilities and net assets $ 1,006,535   $ 1,056,561
Net asset value per common share $ 16.04   $ 16.72
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except for Per Share Data)
       
  Three Months Ended
September 30,		   Nine Months Ended
September 30,
    2022       2021       2022       2021  
Investment income              
From non-affiliate investments:              
Interest income – PPP loans $ —     $ 269     $ —     $ 49,989  
Interest income – SBA 7(a) loans   8,804       7,131       23,915       19,328  
Servicing income   3,575       2,819       9,931       8,346  
Other income   2,552       1,446       6,499       3,829  
Total investment income from non-affiliate investments   14,931       11,665       40,345       81,492  
From non-control investments:              
Interest income   —       126       —       374  
Dividend income   19       23       62       70  
Total investment income from non-control investments   19       149       62       444  
From controlled investments:              
Interest income   753       594       2,087       1,703  
Dividend income   7,205       —       19,989       51  
Other income   672       —       672       —  
Total investment income from controlled investments   8,630       594       22,748       1,754  
Total investment income   23,580       12,408       63,155       83,690  
Expenses:              
Salaries and benefits   4,772       2,351       14,380       12,727  
Interest   6,917       5,177       17,412       15,217  
Depreciation and amortization   58       72       181       236  
Professional fees   1,509       1,418       4,322       3,465  
Origination and loan processing   2,866       4,586       7,202       10,555  
Origination and loan processing – related party   5,430       3,177       14,698       10,830  
Loss on extinguishment of debt   —       —       417       955  
Other general and administrative costs   1,823       2,322       5,619       5,663  
Total expenses   23,375       19,103       64,231       59,648  
Net investment (loss) income   205       (6,695 )     (1,076 )     24,042  
Net realized and unrealized gains (losses):              
Net realized gain on non-affiliate investments – SBA 7(a) loans   14,767       19,272       49,953       38,079  
Net realized gain (loss) on derivative transactions   —       (268 )     445       (268 )
Net unrealized appreciation (depreciation) on SBA guaranteed non-affiliate investments   (297 )     123       (5,942 )     2,533  
Net unrealized appreciation (depreciation) on SBA unguaranteed non-affiliate investments   (3,611 )     998       (6,473 )     2,583  
Net unrealized appreciation on controlled investments   2,040       7,305       1,582       1,760  
Change in deferred taxes   (118 )     (2,843 )     (175 )     (2,120 )
Net unrealized appreciation (depreciation) on non-control investments   —       (3 )     —       521  
Net unrealized appreciation on derivative transactions   —       341       183       304  
Net unrealized depreciation on servicing assets   (1,624 )     (1,616 )     (3,964 )     (3,322 )
Net realized and unrealized gains $ 11,157     $ 23,309     $ 35,609     $ 40,070  
Net increase in net assets resulting from operations $ 11,362     $ 16,614     $ 34,533     $ 64,112  
Net increase in net assets resulting from operations per share $ 0.47     $ 0.74     $ 1.43     $ 2.85  
Net investment (loss) income per share $ 0.01     $ (0.30 )   $ (0.04 )   $ 1.07  
Dividends and distributions declared per common share $ 0.65     $ 0.90     $ 2.05     $ 2.10  
Weighted average number of shares outstanding   24,299       22,541       24,204       22,468  

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES-
ADJUSTED NET INVESTMENT INCOME RECONCILIATION:

    Nine months ended       Nine months ended    
(in thousands, except per share amounts)   September 30, 2022   Per share   September 30, 2021   Per share
Net investment income (loss)   $ (1,076 )   $ (0.04 )   $ 24,042     $ 1.07
Net realized gain on non-affiliate investments – SBA 7(a) loans     49,953       2.06       38,079       1.69
Adjustment for realized gain on derivatives (1)     1,010       0.04       (7 )     —
Loss on debt extinguishment     417       0.02       955       0.04
Adjusted Net investment income   $ 50,304     $ 2.08     $ 63,069     $ 2.81

Note: Amounts may not foot due to rounding

(1)   The following is a reconciliation of GAAP net realized gain/(loss) on derivative transactions to our adjustment for realized gain/(loss) on derivatives on closed transactions presented in the computation of ANII in the preceding tables:

    Nine months ended       Nine months ended    
(in thousands, except per share amounts)   September 30, 2022   Per share   September 30, 2021   Per share
Net realized gain on derivatives   $ 445   $ 0.02   $ (268 )   $ (0.01 )
Hedging realized result on open hedging positions     —     —     261       0.01  
Hedging realized adjustment on hedging positions closed during current period     565     0.02     —       —  
Adjustment for realized gain on derivatives   $ 1,010   $ 0.04   $ (7 )   $ —  

Note: Amounts may not foot due to rounding

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES-
ADJUSTED NET INVESTMENT INCOME RECONCILIATION:

    Three months ended       Three months ended    
(in thousands, except per share amounts)   September 30, 2022   Per share   September 30, 2021   Per share
Net investment income (loss)     205     0.01   $ (6,695 )   $ (0.30 )
Net realized gain on non-affiliate investments – SBA 7(a) loans     14,767     0.61     19,272       0.85  
Adjustment for realized gain on derivatives (1)     —     —     (7 )     —  
Adjusted Net investment income   $ 14,972   $ 0.62   $ 12,570     $ 0.56  

Note: Amounts may not foot due to rounding

(1)   The following is a reconciliation of GAAP net realized gain/(loss) on derivative transactions to our adjustment for realized gain/(loss) on derivatives on closed transactions presented in the computation of ANII in the preceding table:

    Three months ended       Three months ended    
(in thousands, except per share amounts)   September 30, 2022   Per share   September 30, 2021   Per share
Net realized gain on derivatives   $ —   $ —   $ (268 )   $ (0.01 )
Hedging realized result on open hedging positions     —     —     261       0.01  
Adjustment for realized gain on derivatives   $ —   $ —   $ (7 )   $ —  

Note: Amounts may not foot due to rounding

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
DEBT-TO-EQUITY RATIO – ACTUAL AT SEPTEMBER 30, 2022

(in thousands):

Actual Debt-to-Equity Ratio at September 30, 2022      
Total senior debt   $ 553,153  
Total equity   $ 391,799  
Debt-to-equity ratio – actual   1.41x  
       

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
DEBT-TO-EQUITY RATIO – PROFORMA AT SEPTEMBER 30, 2022

(in thousands):

Broker receivable, including premium income receivable   $ 71,634    
Less: realized gain on sale included in broker receivable     (5,893 )  
Broker receivable     65,741    
       
90{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} advance rate on SBA guaranteed non-affiliate portions of loans sold, not settled   $ 59,167    
       
       
Proforma debt adjustments at September 30, 2022:      
Total senior debt   $ 553,153    
Proforma adjustment for broker receivable     (59,167 )  
Total proforma debt   $ 493,986    
       
       
Proforma Debt-to-Equity ratio at September 30, 2022:      
Total proforma debt   $ 493,986    
Total equity   $ 391,799    
Debt-to-equity ratio – proforma   1.26x    
       

 

Posted on

Newtek Business Services Corp. Forecasts Fourth Quarter

Newtek Business Services Corp. Forecasts Fourth Quarter

BOCA RATON, Fla., Sept. 28, 2022 (Globe NEWSWIRE) — Newtek Company Expert services Corp., (NASDAQ: NEWT), an internally managed organization improvement business (“BDC”), introduced these days it is forecasting a fourth quarter 2022 income distribution of $.70 for every share.1 In anticipation of the Business converting from a BDC and discontinuing its election to be regulated under the Expenditure Business Act of 1940 (“1940 Act”), subject to regulatory approvals of its pending acquisition of Nationwide Lender of New York Town (“NBNYC”) and other conditions described in the Company’s proxy assertion filed with the SEC on May well 2, 2022, following which the Organization will no extended qualify as a regulated expenditure corporation (“RIC”) for federal revenue tax purposes and will no for a longer period qualify for accounting treatment method as an investment organization, the Organization anticipates distributing 90 – 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of its 2022 taxable money, in addition to a spillover dividend of its retained earnings, which we hope to be paid out out as a fourth quarter 2022 distribution in December 2022.

Barry Sloane, CEO, President and Chairman commented, “We are incredibly happy to give a forecast of our fourth quarter 2022 money distribution to shareholders. If declared by the Board, the Business expects to fork out about $2.75 for every share in income dividends and distributions to shareholders in 2022 and, as these, to have obtained its aim of supplying desirable hard cash-on-funds returns to its shareholders. This cash distribution would provide the whole dividends and distributions paid out in 2022 in line with the Company’s previously forecasted assistance of $2.40 for every share to $2.90 per share. Even though the overall 2022 distribution may well involve a return of funds, the dedication of the tax attributes of the Company’s 2022 distributions will not be made right up until the conclusion of the Company’s fiscal year primarily based on its taxable cash flow for the complete calendar year and distributions compensated for the full 12 months. We are excited as we foresee exiting the BDC area, topic to regulatory approvals to purchase NBNYC, and come to be a bank keeping company. We take pleasure that all over our 8 many years of operating as a BDC, we have lived up to our determination of doing as a large-yielding growth-oriented BDC.”

Mr. Sloane continued, “Importantly, we have made excellent strides in preparing for the possession of NBNYC and assume to forecast 2023 and 2024 earnings and functionality metrics following receipt of regulatory approvals of our acquisition of NBNYC. We believe these forecasts will supply an chance for traders to consider Newtek likely ahead.”

Mr. Sloane concluded, “Some of the important objects we seem ahead to as component of our conversion to a bank holding company are the expected changeover of the Company to staying covered by financial institution analysts from BDC analysts, the opportunity chance to be viewed as for inclusion in the Russell 2000, an enhance in our universe of potential traders who may perhaps have been precluded from investing in a BDC due to our position as a 1940 Act business, Newtek’s belief that it can deliver increased total returns on equity as a bank keeping business than as a BDC, and most likely unlocking more shareholder worth via engineering joint ventures and the implementation of the Newtek Advantage™ business portal for our customers. That explained, we could not be a lot more excited about our long run irrespective of tough capital marketplaces. Like an iceberg with its core and toughness beneath the area, Newtek thinks that it has developed a remarkable foundation, which may perhaps not however be found, but continue to exists that is the core of pleasure which we believe that will be unlocked for all to see less than this new framework.”

1Be aware pertaining to Dividend Payments: Quantity and timing of fourth quarter dividend or distribution, if any, stays subject matter to the discretion of the Company’s Board of Administrators.

Newtek Small business Expert services Corp., Your Enterprise Answers Company®, is an internally managed BDC, which along with its controlled portfolio providers, offers a huge selection of business enterprise and economic solutions below the Newtek® manufacturer to the compact- and medium-sized company (“SMB”) sector. Since 1999, Newtek has delivered condition-of-the-art, price-effective items and products and services and successful small business strategies to SMB associations throughout all 50 states to help them expand their sales, handle their expenses and reduce their hazard.

Newtek’s and its portfolio companies’ goods and products and services consist of: Enterprise Lending, SBA Lending Alternatives, Electronic Payment Processing, Technological innovation Alternatives (Cloud Computing, Facts Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Stock Financing, Coverage Options, World-wide-web Products and services, and Payroll and Gains Options.

Newtek® and Your Business enterprise Remedies Firm® are registered logos of Newtek Organization Expert services Corp.

Be aware With regards to Forward Hunting Statements

This press launch contains particular forward-hunting statements. Phrases these kinds of as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or identical expressions are supposed to discover forward-on the lookout statements. All ahead-looking statements involve a number of hazards and uncertainties that could trigger precise results to differ materially from the options, intentions and expectations mirrored in or proposed by the forward-on the lookout statements. Such risks and uncertainties involve, amongst other folks, contain our potential to close the pending acquisition of the Nationwide Lender of New York Metropolis (the “Transaction”), get expected regulatory approvals for the pending Transaction, the timing of the closing of the Transaction, the timing of the Company’s discontinuance from regulation as a BDC less than the 1940 Act, projections regarding or contemplating the pending Transaction, the timing of our potential to originate new investments, obtain specific margins and levels of profitability, the availability of further capital and the means to manage specified debt to asset ratios, intensified competition, operating complications and their impact on revenues and income margins, expected upcoming business strategies and economic overall performance, predicted long run amount of clients, small business potential clients, legislative developments and related matters. Risk things, cautionary statements and other conditions, which could induce Newtek’s real results to differ from management’s current anticipations, are contained in Newtek’s filings with the Securities and Trade Commission and obtainable via http://www.sec.gov/. Newtek cautions you that ahead-hunting statements are not assures of foreseeable future efficiency and that real effects or developments may possibly vary materially from those projected or implied in these statements.

Source: Newtek Small business Providers Corp.

Investor Relations & Community Relations
Contact: Jayne Cavuoto
Phone: (212) 273-8179 / jcavuoto@newtekone.com

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TAL Education Group to Announce First Quarter of Fiscal Year 2023 Financial Results on July 29, 2022

TAL Education Group to Announce First Quarter of Fiscal Year 2023 Financial Results on July 29, 2022

BEIJING, July 20, 2022 /PRNewswire/ — TAL Training Group (“TAL” or the “Corporation”) (NYSE: TAL), a sensible mastering solutions service provider in China, right now declared that it will release its unaudited financial outcomes for the to start with quarter of fiscal 12 months 2023 ended May possibly 31, 2022, prior to the industry opens on Friday, July 29, 2022.

The Company will host a corresponding convention call and reside webcast at 8:00 a.m. U.S. Jap Time (8:00 p.m. Beijing Time) on Friday, July 29, 2022.

Remember to observe that you will have to have to pre-register for conference get in touch with participation at https://sign-up.vevent.com/sign-up/BI2f124a2b4d054342a99323e38a074715.

Upon registration, you will obtain an e mail containing participant dial-in figures and special Direct Party Passcode. This facts will allow for you to achieve instant accessibility to the phone. Members might pre-register at any time, such as up to and after the call start out time.

A reside and archived webcast of the meeting contact will be obtainable on the Trader Relations portion of TAL’s site at https://ir.100tal.com/.

About TAL Schooling Group

TAL Training Team is a good learning methods company in China. The acronym “TAL” stands for “Tomorrow Advancing Existence”, which displays our eyesight to boost top discovering alternatives for learners by means of both equally large-high quality instructing and material, as effectively as main edge software of technological know-how in the education practical experience. TAL Education Team provides in depth studying companies to learners from pre-university to the twelfth grade principally by a few adaptable class formats: modest courses, personalised premium expert services, and online courses. Our mastering expert services predominantly include enrichment learnings programs and some academic topics in and out of China. Our ADSs trade on the New York Inventory Exchange below the symbol “TAL”.

For investor and media inquiries, make sure you get hold of:

In China:

Jackson Ding
Investor Relations
TAL Training Group
Tel: +86 10 5292 6669-8809
E mail: ir@tal.com

The Piacente Group, Inc.
Helen Wu
Tel: +86-10-6508-0677
E mail: TAL@thepiacentegroup.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Cellphone: +1-212-481-2050
Email: TAL@thepiacentegroup.com

Cision

Cision

Check out primary material:https://www.prnewswire.com/information-releases/tal-training-group-to-announce-first-quarter-of-fiscal-12 months-2023-fiscal-benefits-on-july-29-2022-301590086.html

Source TAL Instruction Team

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Newtek Business Services Corp. to Report Second Quarter

Newtek Business Services Corp. to Report Second Quarter

BOCA RATON, Fla., July 20, 2022 (Globe NEWSWIRE) — Newtek Business Companies Corp., (Nasdaq: NEWT), an internally managed enterprise progress corporation (“BDC”), right now declared that it will report its 2nd quarter 2022 financial outcomes right after the marketplace closes on Wednesday, August 3, 2022. A conference call to focus on these benefits will be hosted by Barry Sloane, Chief Govt Officer, and Nicholas Leger, Chief Accounting Officer, the next day, Thursday, August 4, 2022 at 8:30 am ET.

Make sure you notice, to attend the meeting call or webcast, contributors should register on the web at http://trader.newtekbusinessservices.com/activities-and-presentations. To acquire a dial-in variety, contributors are asked for to sign up one day in progress or at a minimum 15 minutes prior to the get started of the get in touch with. The corresponding presentation will be obtainable in the ‘Events & Presentations’ portion of the Trader Relations portion of Newtek’s website at http://investor.newtekbusinessservices.com/situations-and-shows. A replay of the contact with the corresponding presentation will be available on Newtek’s web page shortly following the dwell presentation and will be out there for a period of time of 90 days.

About Newtek Enterprise Services Corp.

Newtek Organization Services Corp., Your Enterprise Methods Corporation®, is an internally managed BDC, which together with its managed portfolio providers, supplies a vast array of company and economical methods beneath the Newtek® model to the small- and medium-sized small business (“SMB”) market. Since 1999, Newtek has offered point out-of-the-art, charge-productive items and products and services and efficient business enterprise methods to SMB associations across all 50 states to assist them mature their income, regulate their bills and minimize their possibility.

Newtek’s and its portfolio companies’ solutions and companies include things like: Company Lending, SBA Lending Alternatives, Digital Payment Processing, Know-how Remedies (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Funding, Insurance Options, World-wide-web Providers, and Payroll and Benefits Answers.

Newtek® and Your Business Methods Enterprise®, are registered trademarks of Newtek Organization Solutions Corp.

Notice Pertaining to Ahead Seeking Statements

This press release consists of particular ahead-searching statements. Text these kinds of as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or equivalent expressions are intended to identify forward-looking statements. All ahead-seeking statements require a amount of threats and uncertainties that could bring about precise success to vary materially from the strategies, intentions and expectations reflected in or instructed by the ahead-on the lookout statements. This kind of threats and uncertainties contain, between other people, intensified competitiveness, working troubles and their impact on revenues and income margins, expected long run small business procedures and economic overall performance, anticipated upcoming range of shoppers, company prospective customers, legislative developments and similar matters. Risk things, cautionary statements and other ailments, which could trigger Newtek’s genuine benefits to differ from management’s present-day anticipations, are contained in Newtek’s filings with the Securities and Trade Commission and readily available as a result of http://www.sec.gov/.   Newtek cautions you that forward-seeking statements are not assures of future effectiveness and that true success or developments could vary materially from these projected or implied in these statements.

Source: Newtek Business Solutions Corp.

Trader Relations & Public Relations
Make contact with: Jayne Cavuoto
Phone: (212) 273-8179 / jcavuoto@newtekone.com

Posted on

Newtek Business Services Corp. Reports Record SBA 7(a) Loan Fundings for the Second Quarter 2022 | News

Newtek Business Services Corp. Reports Record SBA 7(a) Loan Fundings for the Second Quarter 2022 | News

BOCA RATON, Fla., July 05, 2022 (Globe NEWSWIRE) — Newtek Company Expert services Corp., (NASDAQ: NEWT), an internally managed business enterprise progress company (“BDC”), declared currently that Newtek Little Business enterprise Finance, LLC (“NSBF”) has funded a file volume of SBA 7(a) loans for the 3 and 6 months ended June 30, 2022. For the 3 months ended June 30, 2022, NSBF funded a file $200.6 million in SBA 7(a) loans, which signifies a 112.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase in excess of $94.3 million SBA 7(a) loan fundings for the a few months finished June 30, 2021. For the 6 months finished June 30, 2022, NSBF funded a document $363.9 million in SBA 7(a) loans, which signifies an 83.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} boost more than $198.6 million SBA 7(a) mortgage fundings for the six months finished June 30, 2021. In addition, for the six months finished June 30, 3022, the Organization reaffirmed its forecasts for web expenditure revenue (decline) (“NII”) in a range ($.01) for each share to $.00 for each share and adjusted net expenditure earnings (“ANII”) in a assortment of $1.40 for every share to $1.50 per share.

Barry Sloane, Chairman, President and Main Executive Officer claimed, “We could not be extra happy to announce document SBA 7(a) fundings for the second quarter 2022. We think these record fundings are testament to a seasoned administration group and personnel, and it is rather obvious that the men and women, course of action, and program that we have been ready to put in spot has given us sturdy momentum in the 2nd quarter and we believe that will continue on in the numerous quarters in advance. In addition, we look ahead to reporting a escalating and robust pipeline of lending opportunities on our second quarter earnings conference call. Also, and critical to take note, is that the calendar year-in excess of-12 months improve in next quarter 2022 bank loan fundings was not driven by any reduction in the credit rating excellent of the borrowers we shut and funded loans for, as we do not imagine in sacrificing credit rating excellent for the sake of development. In actuality, throughout the 2nd quarter 2022, the acceptance charge of all bank loan requests submitted and decisioned at the mortgage-committee degree was decrease than it has been in past quarters which indicates a modest tightening of financial loan approvals.”

Mr. Sloane ongoing, “We beforehand forecasted that we predicted to comprehend some margin compression in 2022 when compared to the higher margins in 2021 during which we understood file gain-on-sale and margins. Whilst we did expertise margin compression in the next quarter of 2022, we want to observe we have been even now capable to meet up with our forecasts. We feel the drop in value margin we are observing in the profits of assured portions of SBA 7(a) bank loan is largely driven by the Federal Reserve Bank (“Fed”) lagging driving the Treasury industry in limited-expression rates, which has caused a lag in cost adjustment on the floating-price Primary, adjusted quarterly dependent coupon of SBA 7(a) financial loans, which impacts the pricing on govt guaranteed personal loan product sales and in the unguaranteed parts of SBA 7(a) loans held in our portfolio. Having said that, dependent on commentary offered by the Fed, we consider the Fed will elevate fascination charges, which we believe that really should translate into additional normalized pricing during the 3rd quarter 2022, holding all else consistent.”

Mr. Sloane further said, “Based upon improvements in our approach and men and women, we assume that going ahead we will continue to know increased productivity in our SBA 7(a) and SBA 504 lending, as nicely as our non-conforming regular lending method. In addition, we also are hopeful to obtain regulatory acceptance to transform to a financial institution keeping business as very well as approval to acquire the Nationwide Financial institution of New York City in the course of the 3rd quarter 2022, which we believe that will help us in constructing lender lending merchandise and spherical out our lending menu, growing productiveness in conforming C&I lending and effectively as conforming CRE lending.”

Mr. Sloane concluded, “We are particularly happy that even with the improved current market instability and adjustments, we proceed to be in a position to produce dividends to our shareholders which always have been and continue to be paid out of taxable profits. We continue to emphasis on creating a diversified stream of earnings from our portfolio corporations which can help help our overall company model with the intention of providing reoccurring streams of income and revenue with out the related cash investment in the payments, technological innovation, payroll and insurance plan agency corporations. We search ahead to reporting our total second quarter 2022 earnings in the to start with or next 7 days of August. We hope to continue to exhibit that our 24-yr-outdated firm, publicly traded for 22 yrs, which has been by way of the 2008-2009 credit disaster and the pandemic, through strong and weak credit history environments, and large and minimal curiosity level environments, has been ready to navigate all current market environments and supply higher than-regular results to shareholders, will carry on to do so. We thank our shareholders for their ongoing support and most importantly, thank all Newtek staff members and the Newtek administration staff for offering on our system and terrific final results to all stakeholders.”

Newtek Organization Providers Corp., Your Enterprise Options Company® , is an internally managed BDC, which together with its controlled portfolio organizations, presents a vast assortment of organization and financial remedies under the Newtek® model to the modest- and medium-sized small business (“SMB”) market. Since 1999, Newtek has presented state-of-the-art, cost-economical products and solutions and productive company methods to SMB interactions throughout all 50 states to help them expand their product sales, control their bills and reduce their danger.

Newtek’s and its portfolio companies’ items and services contain: Organization Lending, SBA Lending Remedies, Digital Payment Processing, Technological know-how Remedies (Cloud Computing, Facts Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Stock Funding, Insurance Alternatives, Internet Expert services, and Payroll and Benefits Solutions.

Newtek® and Your Small business Alternatives Company® are registered logos of Newtek Company Companies Corp.

Take note Regarding Forward Hunting Statements

This push release incorporates selected ahead-seeking statements. Phrases these types of as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or equivalent expressions are intended to identify ahead-searching statements.All ahead-on the lookout statements entail a variety of threats and uncertainties that could bring about precise success to vary materially from the options, intentions and expectations mirrored in or instructed by the ahead-wanting statements. These types of dangers and uncertainties incorporate, among the other people, include our potential to close the pending acquisition of the National Bank of New York City (the “Acquisition”), get hold of necessary regulatory approvals for the pending Acquisition, as properly as projections regarding or contemplating the pending Acquisition, our capability to originate new investments, attain particular margins and concentrations of profitability, the availability of added funds and the capability to keep certain personal debt to asset ratios, intensified opposition, running issues and their impact on revenues and gain margins, expected long run business enterprise approaches and economical functionality, anticipated upcoming quantity of customers, business enterprise prospective customers, legislative developments and related matters. Danger components, cautionary statements and other problems, which could induce Newtek’s genuine results to differ from management’s present anticipations, are contained in Newtek’s filings with the Securities and Exchange Commission and obtainable by means ofhttp://www.sec.gov/.   Newtek cautions you that forward-seeking statements are not assures of potential efficiency and that actual effects or developments may well differ materially from these projected or implied in these statements.

Resource: Newtek Company Products and services Corp.

Investor Relations & General public Relations

Contact: Jayne Cavuoto

Telephone: (212) 273-8179 / jcavuoto@newtekone.com  

Posted on

Macy’s, Inc. Reports First Quarter 2022 Results and Raises Earnings Guidance

Macy’s, Inc. Reports First Quarter 2022 Results and Raises Earnings Guidance

Comparable sales up 12.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an owned basis and up 12.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an owned-plus-licensed basis

Diluted EPS of $0.98 and Adjusted diluted EPS of $1.08

Increased financial flexibility through a number of financing transactions

Repurchased $600 million of shares under $2 billion share repurchase program

Reaffirmed annual sales guidance and raised Adjusted diluted EPS guidance

NEW YORK, May 26, 2022–(BUSINESS WIRE)–Macy’s, Inc. (NYSE: M) today reported financial results for the first quarter of 2022 and updated its annual guidance.

“Our company delivered solid results in the first quarter despite a challenging operating environment. We delivered strong earnings, beating our estimates, and sales that were in line with our expectations. While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop. We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods. Our omnichannel ecosystem, which spans the value spectrum, has supported our ability to flex our wide assortment of categories, products and brands to capture consumer demand despite the volatile environment,” said Jeff Gennette, chairman and chief executive officer of Macy’s, Inc. “As we look ahead to the rest of 2022, we remain focused on our customers and the successful execution of our Polaris long-term growth strategy. We believe that the efficiencies we built into our business enable us to navigate through the current uncertain macro environment.”

First Quarter Highlights

Comparisons are to first quarter 2021 unless noted otherwise. Comparisons to 2019 are provided, where appropriate, to benchmark performance given the impact of the pandemic in 2020.

Financial Highlights

All amounts in millions except percentages and per share figures

First Quarter

2022

2021

Net sales

$5,348

$4,706

Comparable Sales

Owned

12.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Owned plus licensed

12.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Net Income

$286

$103

Earnings before interest, taxes, depreciation and amortization (EBITDA)

$676

$454

Diluted earnings per share (EPS)

$0.98

$0.32

Adjusted Net income

$315

$126

Adjusted EBITDA

$684

$473

Adjusted Diluted EPS

$1.08

$0.39

Capital Allocation

During the first quarter, Macy’s, Inc. took the following actions to boost its liquidity and financial flexibility as well as return capital to shareholders:

  • On March 8, 2022, the collateral securing the company’s second lien notes was automatically released and all of the company’s long-term debt is now unsecured.

  • Using the proceeds from the issuance of $850 million in new unsecured notes along with cash on hand, Macy’s, Inc. redeemed approximately $1.1 billion of near-term debt that was originally maturing in 2023 and 2024. The net result of the issuance and redemptions is an approximately $300 million reduction to total long-term debt. As a result, the company does not have any material debt maturities for the next 5 years.

  • The company amended its asset-based credit facility, including extending the maturity of the $3 billion facility to March 2027.

  • In addition, the company repurchased $600 million of shares under its newly authorized $2 billion share repurchase program, which does not have an expiration date, and paid $45 million in dividends to shareholders.

“We believe that our first quarter performance reflects the durability of the Polaris strategy. The actions we took in the quarter to boost our liquidity and increase our financial flexibility provides us a long runway to invest further in our transformation, navigate the unprecedented macroeconomic environment and return capital to shareholders,” said Adrian Mitchell, chief financial officer of Macy’s, Inc. “As we move into the rest of this year, we have confidence in our ability to flex and pivot quickly in this dynamic environment.”

Additionally, at its last meeting, Macy’s board of directors declared a regular quarterly dividend of 15.75 cents per share on Macy’s, Inc. common stock, payable July 1, 2022, to shareholders of record at the close of business on June 15, 2022.

2022 Guidance

Despite the uncertainty within the macroeconomic environment, the company is reaffirming its annual 2022 sales guidance and raising its earnings guidance to account for first quarter 2022 share repurchases as well as improved expectations for credit card revenue. The company believes this guidance appropriately reflects its strategic positioning and the associated risks within this environment. The full update to guidance can be found in the presentation posted to macysinc.com/investors.

Guidance as of

May 26, 2022

Guidance as of

February 22, 2022

Net sales

$24,460 million to $24,700 million
Flat to up 1.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} growth versus 2021

$24,460 million to $24,700 million
Flat to up 1.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} growth versus 2021

Adjusted EBITDA as a percent of sales

11.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} – 11.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

11.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} – 11.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Adjusted diluted earnings per share (reflecting first quarter share repurchases)

$4.53 – $4.95

$4.13 – $4.52

Conference Call and Webcasts

A webcast of Macy’s, Inc.’s call with analysts and investors to report its first quarter 2022 sales and earnings will be held today (May 26, 2022) at 8:00 a.m. ET. Macy’s, Inc.’s webcast, along with the associated presentation, is accessible to the media and general public via the company’s website at www.macysinc.com/investors. Analysts and investors may call in on 1-800-458-4121, passcode 8403658. A replay of the conference call and slides can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call. Additional information on Macy’s, Inc., including past news releases, is available at www.macysinc.com/pressroom.

The company will participate in a fireside chat at the Evercore ISI Consumer and Retail Conference at 8:00 a.m. ET on Tuesday, June 7, 2022. Media and investors may access a live audio webcast of the presentation at www.macysinc.com/investors. A replay of the webcast will also be available on the company’s website.

Important Information Regarding Financial Measures

Please see the final pages of this news release for important information regarding the calculation of the company’s non-GAAP financial measures.

About Macy’s, Inc.

At Macy’s, Inc. (NYSE: M), we are a trusted source for quality brands at great values from off-price to luxury. Across our iconic nameplates, including Macy’s, Bloomingdale’s and Bluemercury, we help our customers express their unique style and celebrate special moments, big and small. Headquartered in New York City, we operate one of retail’s largest e-commerce businesses integrated with a nationwide footprint to deliver the most convenient and seamless shopping experience. Our purpose is to create a brighter future with bold representation – so we can realize the full potential of every one of us. For more information, visit macysinc.com.

Forward-Looking Statements

All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including the effects of the COVID-19 pandemic on Macy’s customer demand and supply chain, as well as its consolidated results of operation, financial position and cash flows, Macy’s ability to successfully implement its Polaris strategy, including the ability to realize the anticipated benefits within the expected time frame or at all, conditions to, or changes in the timing of proposed real estate and other transactions, prevailing interest rates and non-recurring charges, the effect of potential changes to trade policies, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers’ outlets, the Internet and catalogs and general consumer spending levels, including the impact of the availability and level of consumer debt, possible systems failures and/or security breaches, the potential for the incurrence of charges in connection with the impairment of intangible assets, including goodwill, Macy’s reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional or global health pandemics, and regional political and economic conditions, the effect of weather, inflation, labor shortages, the amount and timing of future dividends and share repurchases and other factors identified in documents filed by the company with the Securities and Exchange Commission, including under the captions “Forward-Looking Statements” and “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended January 29, 2022. Macy’s disclaims any intention or 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.

MACY’S, INC.

Consolidated Statements of Income (Unaudited) (Note 1)

(All amounts in millions except percentages and per share figures)

13 Weeks Ended
April 30, 2022

13 Weeks Ended
May 1, 2021

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to

$

Net sales

$

Net sales

Net sales

$

5,348

$

4,706

Credit card revenues, net

191

3.6

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

159

3.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Cost of sales

(3,231

)

(60.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

(2,889

)

(61.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

Selling, general and administrative expenses

(1,879

)

(35.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

(1,748

)

(37.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

Gains on sale of real estate

42

0.8

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

6

0.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Impairment, restructuring and other costs

(8

)

(0.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

(19

)

(0.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

Operating income

463

8.7

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

215

4.6

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Benefit plan income, net

7

15

Interest expense, net

(47

)

(79

)

Losses on early retirement of debt

(31

)

(11

)

Income before income taxes

392

140

Federal, state and local income tax expense (Note 2)

(106

)

(37

)

Net income

$

286

$

103

Basic earnings per share

$

1.01

$

0.33

Diluted earnings per share

$

0.98

$

0.32

Average common shares:

Basic

283.5

311.6

Diluted

290.7

318.6

End of period common shares outstanding

269.7

311.0

Supplemental Financial Measures:

Gross Margin (Note 3)

$

2,117

39.6

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

$

1,817

38.6

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Depreciation and amortization expense

$

206

$

224

MACY’S, INC.

Consolidated Balance Sheets (Unaudited) (Note 1)

(millions)

April 30,

2022

January 29,

2022

May 1,

2021

ASSETS:

Current Assets:

Cash and cash equivalents

$

672

$

1,712

$

1,798

Receivables

233

297

205

Merchandise inventories

4,956

4,383

4,230

Prepaid expenses and other current assets (Note 4)

372

366

1,007

Total Current Assets

6,233

6,758

7,240

Property and Equipment – net

5,601

5,665

5,798

Right of Use Assets

2,736

2,808

2,853

Goodwill

828

828

828

Other Intangible Assets – net

434

435

436

Other Assets

1,140

1,096

927

Total Assets

$

16,972

$

17,590

$

18,082

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current Liabilities:

Short-term debt

$

—

$

—

$

294

Merchandise accounts payable

2,865

2,222

2,545

Accounts payable and accrued liabilities

2,456

3,086

2,616

Income taxes

222

108

63

Total Current Liabilities

5,543

5,416

5,518

Long-Term Debt

2,994

3,295

4,558

Long-Term Lease Liabilities

3,030

3,098

3,166

Deferred Income Taxes

968

983

868

Other Liabilities

1,159

1,177

1,297

Shareholders’ Equity

3,278

3,621

2,675

Total Liabilities and Shareholders’ Equity

$

16,972

$

17,590

$

18,082

MACY’S, INC.

Consolidated Statements of Cash Flows (Unaudited) (Notes 1 and 5)

(millions)

13 Weeks Ended
April 30, 2022

13 Weeks Ended
May 1, 2021

Cash flows from operating activities:

Net income

$

286

$

103

Adjustments to reconcile net income to net cash provided by operating activities:

Impairment, restructuring and other costs

8

19

Depreciation and amortization

206

224

Benefit plans

5

10

Stock-based compensation expense

13

11

Gains on sale of real estate

(42

)

(6

)

Deferred income taxes

(17

)

(43

)

Amortization of financing costs and premium on acquired debt

2

8

Changes in assets and liabilities:

Decrease in receivables

65

71

Increase in merchandise inventories

(573

)

(457

)

Increase in prepaid expenses and other current assets

(13

)

(56

)

Increase in merchandise accounts payable

639

674

Decrease in accounts payable and accrued liabilities

(424

)

(114

)

Increase in current income taxes

122

75

Change in other assets and liabilities

(29

)

(25

)

Net cash provided by operating activities

248

494

Cash flows from investing activities:

Purchase of property and equipment

(171

)

(61

)

Capitalized software

(90

)

(38

)

Disposition of property and equipment

73

8

Other, net

(6

)

17

Net cash used by investing activities

(194

)

(74

)

Cash flows from financing activities:

Debt issued

850

500

Debt issuance costs

(21

)

(9

)

Debt repaid

(1,139

)

(503

)

Debt repurchase premium and expenses

(29

)

(12

)

Dividends paid

(45

)

—

Decrease in outstanding checks

(126

)

(276

)

Acquisition of treasury stock

(584

)

—

Net cash used by financing activities

(1,094

)

(300

)

Net increase (decrease) in cash, cash equivalents and restricted cash

(1,040

)

120

Cash, cash equivalents and restricted cash beginning of period

1,715

1,754

Cash, cash equivalents and restricted cash end of period

$

675

$

1,874

MACY’S, INC.

Consolidated Financial Statements (Unaudited)

Notes:

(1)

As a result of the seasonal nature of the retail business, the results of operations for the 13 weeks ended April 30, 2022 and May 1, 2021 (which do not include the Christmas season) are not necessarily indicative of such results for the fiscal year.

(2)

The income tax expense of $106 million and $37 million, or 27.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} and 26.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of pretax income, for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively, reflect a different effective tax rate as compared to the company’s federal income tax statutory rate of 21{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. The income tax effective rates for the 13 weeks ended April 30, 2022 and May 1, 2021 were impacted primarily by the effect of state and local taxes and the realization of deferred tax assets associated with the vesting and cancellation of certain stock-based compensation awards.

(3)

Gross margin is defined as net sales less cost of sales.

(4)

Prepaid expenses and other current assets as of May 1, 2021 included an income tax receivable of $520 million.

(5)

Restricted cash of $3 million and $76 million have been included with cash and cash equivalents for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures provide users of the company’s financial information with additional useful information in evaluating operating performance. Management believes that providing supplemental changes in comparable sales on an owned plus licensed basis, which includes adjusting for the impact of comparable sales of departments licensed to third parties, assists in evaluating the company’s ability to generate sales growth, whether through owned businesses or departments licensed to third parties, and in evaluating the impact of changes in the manner in which certain departments are operated. Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure which the company believes provides meaningful information about its operational efficiency by excluding the impact of changes in tax law and structure, debt levels and capital investment. In addition, management believes that excluding certain items from EBITDA, net income and diluted earnings per share that are not associated with the company’s core operations and that may vary substantially in frequency and magnitude from period-to-period provides useful supplemental measures that assist in evaluating the company’s ability to generate earnings and to more readily compare these metrics between past and future periods.

The company does not provide reconciliations of the forward-looking non-GAAP measures of adjusted EBITDA, diluted earnings per share and comparable sales on an owned plus licensed basis to the most directly comparable forward-looking GAAP measures because the timing and amount of excluded items are unreasonably difficult to fully and accurately estimate. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the company’s financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the company’s financial position, results of operations or cash flows and should therefore be considered in assessing the company’s actual and future financial condition and performance. Additionally, the amounts received by the company on account of sales of departments licensed to third parties are limited to commissions received on such sales. The methods used by the company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures

(All amounts in millions except percentages and per share figures)

Changes in Comparable Sales

Comparable Sales vs. 13 Weeks Ended May 1, 2021

Macy’s, Inc.

Macy’s

Bloomingdale’s

bluemercury

Increase in comparable sales on an owned basis (Note 6)

12.8

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

10.7

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

28.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

25.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Impact of departments licensed to third parties (Note 7)

(0.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

(0.6

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

(1.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550})

0.0

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Increase in comparable sales on an owned plus licensed basis

12.4

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

10.1

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

26.9

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

25.2

{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Notes:

(6)

Represents the period-to-period percentage change in net sales from stores in operation during the 13 weeks ended April 30, 2022 and the 13 weeks ended May 1, 2021. Such calculation includes all digital sales and excludes commissions from departments licensed to third parties. Stores impacted by a natural disaster or undergoing significant expansion or shrinkage remain in the comparable sales calculation unless the store, or material portion of the store, is closed for a significant period of time. Definitions and calculations of comparable sales may differ among companies in the retail industry.

(7)

Represents the impact of including the sales of departments licensed to third parties occurring in stores in operation throughout the year presented and the immediately preceding year and all online sales in the calculation of comparable sales. The company licenses third parties to operate certain departments in its stores and online and receives commissions from these third parties based on a percentage of their net sales. In its financial statements prepared in conformity with GAAP, the company includes these commissions (rather than sales of the departments licensed to third parties) in its net sales. The company does not, however, include any amounts in respect of licensed department sales (or any commissions earned on such sales) in its comparable sales in accordance with GAAP (i.e., on an owned basis). The amounts of commissions earned on sales of departments licensed to third parties are not material to its net sales for the periods presented.

MACY’S, INC.

Important Information Regarding Non-GAAP Financial Measures
(All amounts in millions except percentages and per share figures)

Non-GAAP financial measures, excluding certain items below, are reconciled to the most directly comparable GAAP measure as follows:

  • EBITDA and adjusted EBITDA are reconciled to GAAP net income.

  • Adjusted net income is reconciled to GAAP net income.

  • Adjusted diluted earnings per share is reconciled to GAAP diluted earnings per share.

EBITDA and Adjusted EBITDA

13 Weeks Ended
April 30, 2022

13 Weeks Ended
May 1, 2021

Net income

$

286

$

103

Interest expense, net

47

79

Losses on early retirement of debt

31

11

Federal, state and local income tax expense

106

37

Depreciation and amortization

206

224

EBITDA

676

454

Impairment, restructuring and other costs

8

19

Adjusted EBITDA

$

684

$

473

Adjusted Net Income and Adjusted Diluted Earnings Per Share

13 Weeks Ended
April 30, 2022

13 Weeks Ended
May 1, 2021

Net
Income

Diluted
Earnings
Per Share

Net
Income

Diluted
Earnings
Per Share

As reported

$

286

0.98

$

103

$

0.32

Impairment, restructuring and other costs

8

0.03

19

0.06

Losses on early retirement of debt

31

0.11

11

0.03

Income tax impact of certain items identified above

(10

)

(0.04

)

(7

)

(0.02

)

As adjusted to exclude certain items above

$

315

$

1.08

$

126

$

0.39

View source version on businesswire.com: https://www.businesswire.com/news/home/20220526005268/en/

Contacts

Media – Carolyn Ng Cohen
media@macys.com

Investors – Mike McGuire
investors@macys.com