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May 26, 2022

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

May 5, 2022

Laureate Education Reports Financial Results for the First Quarter of 2022

Company Increases Full-Year 2022 Guidance

MIAMI, May 05, 2022 (GLOBE NEWSWIRE) — Laureate Education, Inc. (NASDAQ: LAUR), which operates five universities across Mexico and Peru, today announced financial results for the first quarter of 2022.

First Quarter 2022 Highlights (compared to first quarter 2021):

New enrollments increased 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.
Total enrollments increased 11{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.
On a reported basis, revenue increased 8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $209.6 million. On an organic constant currency basis¹, revenue increased 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.
Operating income for the three months ended March 31, 2022 was $9.0 million, compared to operating loss of $(86.4) million for the three months ended March 31, 2021, which was mainly driven by impairment charges of $56.7 million that were largely attributable to impairment of the Laureate tradename.
Net loss for the three months ended March 31, 2022 was $(44.7) million, compared to net loss of $(164.9) million for the three months ended March 31, 2021, which was mainly driven by impairment charges.
Adjusted EBITDA for the three months ended March 31, 2022 was $27.2 million, compared to Adjusted EBITDA of $9.7 million for the three months ended March 31, 2021.

¹Organic constant currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures, and other items.

Eilif Serck-Hanssen, President and Chief Executive Officer, said, “I am very encouraged by the momentum in the business. Our strategic growth initiatives that play to our unique strengths in Mexico and Peru are having a positive impact on our performance, and as a result we are increasing our guidance for the year.”

First Quarter 2022 Results

New enrollments for the three months ended March 31, 2022 increased 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, compared to new enrollment activity for the three months ended March 31, 2021, and total enrollments were up 11{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to the prior-year period. The first quarter represents the primary intake cycle for Peru, and results for the first quarter of 2022 were strong, with new and total enrollments in Peru increasing 5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} and 14{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, respectively, compared to the prior-year period. Mexico’s new enrollments were up 15{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to the prior-year period, and total enrollment was up 7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, following its secondary intake cycle completed in the first quarter of 2022.

For the three months ended March 31, 2022, revenue on a reported basis was $209.6 million, an increase of $14.9 million, or 8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, compared to the three months ended March 31, 2021. On an organic constant currency basis, revenue increased 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}. Operating income for the three months ended March 31, 2022 was $9.0 million, compared to an operating loss of $(86.4) million for the three months ended March 31, 2021, which was predominantly driven by impairment charges of $56.7 million. Net loss for the three months ended March 31, 2022 was $(44.7) million, which was primarily attributable to a discrete tax expense, compared to net loss of $(164.9) million for the three months ended March 31, 2021, which was mainly attributable to the impairment charges described above. Basic and diluted loss per share for the three months ended March 31, 2022 were $(0.25).

Adjusted EBITDA for the three months ended March 31, 2022 was $27.2 million, compared to Adjusted EBITDA of $9.7 million for the three months ended March 31, 2021.

Balance Sheet and Capital Structure

Laureate has a strong financial position with significant liquidity. As of March 31, 2022, Laureate had $294 million of cash and gross debt of $156 million. Accordingly, total cash, net of debt, was $138 million as of March 31, 2022.

In addition, $74 million of the Walden sale transaction value was paid into an escrow account, which will be released in full or in part to Laureate in August 2022 pursuant to the terms and conditions of the escrow agreement.

Increase to Share Repurchase Program

On March 14, 2022, Laureate announced that its board of directors approved an increase in the Company’s existing share repurchase program, from $600 million to $650 million, to acquire shares of the Company’s common stock. As of March 31, 2022, the Company has repurchased approximately $556 million of shares under the authorization. The Company expects to complete the repurchase program during 2022, dependent on market conditions.

Outlook for Fiscal 2022

Laureate is updating its full-year 2022 guidance to reflect an improved outlook.

Based on the current foreign exchange spot rates², Laureate currently expects its full-year 2022 results to be as follows:

Total enrollments are now expected to be in the range of 410,000 to 416,000 students, reflecting growth of 6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}-7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an organic basis versus 2021;
Revenues are now expected to be in the range of $1,190 million to $1,206 million, reflecting growth of 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}-11{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an organic constant currency basis versus 2021; and
Adjusted EBITDA is now expected to be in the range of $326 million to $334 million, reflecting growth of 22{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}-25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an organic constant currency basis versus 2021 (up 29{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}-32{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on an as-reported basis).

Reconciliations of forward-looking non-GAAP measures, specifically the 2022 Adjusted EBITDA outlook, to the relevant forward-looking GAAP measures are not being provided, as Laureate does not currently have sufficient data to accurately estimate the variables and individual adjustments for such outlooks and reconciliations. Due to this uncertainty, the Company cannot reconcile projected Adjusted EBITDA to projected net income without unreasonable effort.

Please see the “Forward-Looking Statements” section in this release for a discussion of certain risks related to this outlook.

² Based on actual FX rates for January-April 2022, and current spot FX rates (local currency per U.S. Dollar) of MXN 20.48 and PEN 3.82 for May 2022 – December 2022. FX impact may change based on fluctuations in currency rates in future periods.

Conference Call

Laureate will host an earnings conference call today at 8:30 am ET. Interested parties are invited to listen to the earnings call by dialing 1-855-307-2849 (for U.S.-based callers) or 1-703-639-1262 (for international callers), and requesting to join the Laureate conference call, conference ID 7763447. Replays of the entire call will be available through May 12, 2022, at 1-855-859-2056 (for U.S.-based callers) and at 1-404-537-3406 (for international callers), conference ID 7763447. The webcast of the conference call, including replays, and a copy of this press release and the related slides will be made available through the Investor Relations section of Laureate’s website at www.laureate.net.

Forward-Looking Statements

This press release includes statements that express Laureate’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, ‘‘forward-looking statements’’ within the meaning of the federal securities laws, which involve risks and uncertainties. Laureate’s actual results may vary significantly from the results anticipated in these forward-looking statements. You can identify forward-looking statements because they contain words such as ‘‘believes,’’ ‘‘expects,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates’’ or ‘‘anticipates’’ or similar expressions that concern our strategy, plans or intentions. All statements we make relating to (i) guidance (including, but not limited to, total enrollments, revenues, and Adjusted EBITDA), (ii) our current growth strategy and other future plans, strategies or transactions that may be identified, explored or implemented and any litigation or dispute resulting from any completed transaction, (iii) any anticipated share repurchases or cash distributions and (iv) the potential impact of the COVID-19 pandemic on our business or the global economy as a whole are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, including with respect to our current growth strategy and the impact of any completed divestiture or separation transaction on our remaining businesses. Accordingly, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations are disclosed in our Annual Report on Form 10-K filed with the SEC on February 24, 2022. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

Presentation of Non-GAAP Measures

In addition to the results provided in accordance with U.S. generally accepted accounting principles (GAAP) throughout this press release, Laureate provides the non-GAAP measurements of Adjusted EBITDA, and total cash, net of debt (or net cash). We have included these non-GAAP measurements because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans.

Adjusted EBITDA consists of income (loss) from continuing operations, adjusted for the items included in the accompanying reconciliation. The exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, Adjusted EBITDA is a key input into the formula used by the compensation committee of our board of directors and our Chief Executive Officer in connection with the payment of incentive compensation to our executive officers and other members of our management team. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Total cash, net of debt (or net cash) consists total cash and cash equivalents, less total gross debt. Net cash provides a useful indicator about Laureate’s leverage and liquidity.

Laureate’s calculations of Adjusted EBITDA and total cash, net of debt (or net cash) are not necessarily comparable to calculations performed by other companies and reported as similarly titled measures. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results. Adjusted EBITDA is reconciled from the GAAP measure in the attached table “Non-GAAP Reconciliation.”

We evaluate our results of operations on both an as reported and an organic constant currency basis. The organic constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates, acquisitions and divestitures, and other items. We believe that providing organic constant currency information provides valuable supplemental information regarding our results of operations, consistent with how we evaluate our performance. We calculate organic constant currency amounts using the change from prior-period average foreign exchange rates to current-period average foreign exchange rates, as applied to local-currency operating results for the current period, and then exclude the impact of acquisitions and divestitures and other items described in the accompanying presentation.

About Laureate Education, Inc.

Laureate Education, Inc. operates five universities across Mexico and Peru, enrolling more than 375,000 students in high-quality undergraduate, graduate, and specialized degree programs through campus-based and online learning. Our universities have a deep commitment to academic quality and innovation, strive for market-leading employability outcomes, and work to make higher education more accessible. At Laureate, we know that when our students succeed, countries prosper, and societies benefit. Learn more at laureate.net.

Key Metrics and Financial Tables
(Dollars in millions, except per share amounts, and may not sum due to rounding)

New and Total Enrollments by segment

	New Enrollments				Total Enrollments
	YTD 1Q 2022	YTD 1Q 2021	Change		As of 03/31/2022	As of 03/31/2021	Change
Mexico	31,500	27,300	15	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	196,800	183,700	7	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Peru	49,400	47,100	5	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	208,300	182,300	14	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Laureate	80,900	74,400	9	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	405,100	366,000	11	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Consolidated Statements of Operations

	For the three months ended March 31,
IN MILLIONS		2022			2021		Change
Revenues	$	209.6		$	194.7		$	14.9
Costs and expenses:
Direct costs		182.9			181.8			1.1
General and administrative expenses		17.5			42.6			(25.1	)
Loss on impairment of assets		0.1			56.7			(56.6	)
Operating income (loss)		9.0			(86.4	)		95.4
Interest income		2.0			0.7			1.3
Interest expense		(3.7	)		(23.5	)		19.8
Gain on derivatives		—			29.3			(29.3	)
Other expense, net		(1.2	)		—			(1.2	)
Foreign currency exchange (loss) gain, net		(3.6	)		28.2			(31.8	)
Income (loss) from continuing operations before income taxes and equity in net income of affiliates		2.4			(51.7	)		54.1
Income tax expense		(48.0	)		(112.9	)		64.9
Equity in net income of affiliates, net of tax		0.1			—			0.1
Loss from continuing operations		(45.4	)		(164.5	)		119.1
Income (loss) from discontinued operations, net of tax		0.7			(0.4	)		1.1
Net loss		(44.7	)		(164.9	)		120.2
Net loss attributable to noncontrolling interests		0.5			—			0.5
Net loss attributable to Laureate Education, Inc.	$	(44.2	)	$	(164.9	)	$	120.7

Net loss available to common stockholders	$	(44.2	)	$	(164.9	)	$	120.7

Basic and diluted earnings (loss) per share:
Basic and diluted weighted average shares outstanding		178.0			200.2			(22.2	)
Basic and diluted loss per share	$	(0.25	)	$	(0.82	)	$	0.57

Revenue and Adjusted EBITDA by segment

							{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Change		$ Variance Components
For the three months ended March 31,		2022			2021		Reported	Organic Constant Currency⁽¹⁾	Total			Organic Constant Currency			Other		Acq/Div.		FX
Revenues
Mexico	$	142.5		$	135.4		5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	$	7.1		$	8.0		$	—	$	—	$	(0.9	)
Peru		65.4			57.5		14{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	17{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}		7.9			10.0			—		—		(2.1	)
Corporate & Eliminations		1.6			1.8		(11){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	(11){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}		(0.2	)		(0.2	)		—		—		—
Total Revenues	$	209.6		$	194.7		8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	$	14.9		$	17.9		$	—	$	—	$	(3.0	)

Adjusted EBITDA
Mexico	$	37.0		$	17.3		114{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	35{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	$	19.7		$	6.1		$	13.3	$	—	$	0.3
Peru		3.8			11.6		(67){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	(70){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}		(7.8	)		(8.1	)		—		—		0.3
Corporate & Eliminations		(13.6	)		(19.2	)	29{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	29{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}		5.6			5.6			—		—		—
Total Adjusted EBITDA	$	27.2		$	9.7		180{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	37{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	$	17.5		$	3.6		$	13.3	$	—	$	0.6

⁽¹⁾Organic Constant Currency results exclude the period-over-period impact from currency fluctuations, acquisitions and divestitures, and other items. Other items include the impact of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets. Organic Constant Currency is calculated using the change from prior-period average foreign exchange rates to current-period average foreign exchange rates, as applied to local-currency operating results for the current period. The “Organic Constant Currency” {ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} changes are calculated by dividing the Organic Constant Currency amounts by the 2021 Revenues and Adjusted EBITDA amounts, excluding the impact of the divestitures.

Consolidated Balance Sheets

IN MILLIONS	March 31, 2022		December 31, 2021		Change
Assets
Cash and cash equivalents	$	293.8	$	324.8	$	(31.0	)
Receivables (current), net		129.1		152.0		(22.9	)
Other current assets		68.7		67.5		1.2
Property and equipment, net		516.9		499.5		17.4
Operating lease right-of-use assets, net		384.5		384.3		0.2
Goodwill and other intangible assets		715.7		689.6		26.1
Deferred income taxes		47.8		38.7		9.1
Other long-term assets		47.7		48.6		(0.9	)
Long-term assets held for sale		6.6		6.2		0.4
Total assets	$	2,210.7	$	2,211.3	$	(0.6	)

Liabilities and stockholders’ equity
Accounts payable and accrued expenses	$	186.6	$	182.9	$	3.7
Deferred revenue and student deposits		97.1		44.0		53.1
Total operating leases, including current portion		412.8		415.3		(2.5	)
Total long-term debt, including current portion		152.6		153.7		(1.1	)
Other liabilities		303.4		263.4		40.0
Current and long-term liabilities held for sale		11.7		10.8		0.9
Total liabilities		1,164.1		1,070.0		94.1
Redeemable noncontrolling interests and equity		1.7		1.7		—
Total stockholders’ equity		1,044.9		1,139.6		(94.7	)
Total liabilities and stockholders’ equity	$	2,210.7	$	2,211.3	$	(0.6	)

Consolidated Statements of Cash Flows

	For the three months ended March 31,
IN MILLIONS		2022			2021		Change
Cash flows from operating activities
Net loss	$	(44.7	)	$	(164.9	)	$	120.2
Depreciation and amortization		14.4			22.7			(8.3	)
Loss on impairment of assets		0.1			57.7			(57.6	)
(Gain) loss on sales and disposal of subsidiaries and property and equipment, net		(0.7	)		16.5			(17.2	)
Gain on derivative instruments		—			(29.3	)		29.3
Loss on debt extinguishment		—			0.1			(0.1	)
Deferred income taxes		4.4			84.4			(80.0	)
Unrealized foreign currency exchange gain		(0.8	)		(23.7	)		22.9
Income tax receivable/payable, net		27.0			(16.7	)		43.7
Working capital, excluding tax accounts		44.3			25.6			18.7
Other non-cash adjustments		9.9			39.1			(29.2	)
Net cash provided by operating activities		53.9			11.3			42.6
Cash flows from investing activities
Purchase of property and equipment		(1.2	)		(11.7	)		10.5
Expenditures for deferred costs		—			(1.9	)		1.9
Receipts from sales of discontinued operations, net of cash sold, and property and equipment		9.2			30.8			(21.6	)
Payments on derivatives related to sale of discontinued operations		—			(18.3	)		18.3
Net cash provided by (used in) investing activities		7.9			(1.1	)		9.0
Cash flows from financing activities
Decrease in long-term debt, net		(9.2	)		(52.7	)		43.5
Proceeds from exercise of stock options		11.5			—			11.5
Payments to repurchase common stock		(102.2	)		(145.2	)		43.0
Financing other, net		(4.3	)		(1.2	)		(3.1	)
Net cash used in financing activities		(104.1	)		(199.2	)		95.1
Effects of exchange rate changes on Cash and cash equivalents and Restricted cash		11.2			(6.9	)		18.1
Change in cash included in current assets held for sale		—			(3.5	)		3.5
Net change in Cash and cash equivalents and Restricted cash		(31.1	)		(199.3	)		168.2
Cash and cash equivalents and Restricted cash at beginning of period		345.6			867.3			(521.7	)
Cash and cash equivalents and Restricted cash at end of period	$	314.4		$	668.0		$	(353.6	)
Liquidity (including Undrawn Revolver)	$	703.8		$	971.4		$	(267.6	)

Non-GAAP Reconciliation

The following table reconciles Loss from continuing operations to Adjusted EBITDA:

	For the three months ended March 31,
IN MILLIONS		2022			2021		Change
Loss from continuing operations	$	(45.4	)	$	(164.5	)	$	119.1
Plus:
Equity in net income of affiliates, net of tax		(0.1	)		—			(0.1	)
Income tax expense		48.0			112.9			(64.9	)
Income (loss) from continuing operations before income taxes and equity in net income of affiliates		2.4			(51.7	)		54.1
Plus:
Foreign currency exchange loss (gain), net		3.6			(28.2	)		31.8
Other expense, net		1.2			—			1.2
Gain on derivatives		—			(29.3	)		29.3
Interest expense		3.7			23.5			(19.8	)
Interest income		(2.0	)		(0.7	)		(1.3	)
Operating income (loss)		9.0			(86.4	)		95.4
Plus:
Depreciation and amortization		14.4			22.8			(8.4	)
EBITDA		23.4			(63.6	)		87.0
Plus:
Share-based compensation expense ⁽²⁾		2.8			1.3			1.5
Loss on impairment of assets ⁽³⁾		0.1			56.7			(56.6	)
EiP implementation expenses ⁽⁴⁾		0.9			15.3			(14.4	)
Adjusted EBITDA	$	27.2		$	9.7		$	17.5

⁽²⁾ Represents non-cash, share-based compensation expense pursuant to the provisions of ASC Topic 718, “Stock Compensation.”
⁽³⁾ Represents non-cash charges related to impairments of long-lived assets.
⁽⁴⁾Excellence-in-Process (EiP) implementation expenses are related to our enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources. It included the establishment of regional shared services organizations (SSOs), as well as improvements to the Company’s system of internal controls over financial reporting. The EiP initiative also included other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs incurred in connection with the dispositions. The EiP initiative was completed as of December 31, 2021, except for certain EiP expenses related to the run out of programs that began in prior periods.

Investor Relations Contact:
ir@laureate.net

Media Contacts:

Laureate Education
Adam Smith
adam.smith@laureate.net
U.S.: +1 (443) 255 0724
Source: Laureate Education, Inc.

May 5, 2022

Newtek Business Services Corp. Reports First Quarter 2022

BOCA RATON, Fla., May 04, 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 months ended March 31, 2022.

First Quarter 2022 Financial Highlights

Total investment income of $20.3 million for the three months ended March 31, 2022; a decrease of (41.4){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over total investment income of $34.7 million for the three months ended March 31, 2021. First quarter 2021 financial results included $24.2 million of fee income from the Paycheck Protection Program (“PPP”) which, as previously disclosed, is not recurring.
Net investment income of $1.0 million, or $0.04 per share, for the three months ended March 31, 2022, which represents a (94.1){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease, on a per share basis, compared to net investment income of $15.2 million, or $0.68 per share, for the three months ended March 31, 2021. First quarter 2021 financial results included $24.2 million of fee income from the PPP which, as previously disclosed, is not recurring.
Adjusted net investment income (“ANII”)¹ of $17.3 million, or $0.72 per share, for the three months ended March 31, 2022; a decrease of (31.4){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, on a per share basis, compared to ANII of $23.5 million, or $1.05 per share, for the three months ended March 31, 2021. First quarter 2021 financial results included $24.2 million of fee income from the PPP which, as previously disclosed, is not recurring.
Debt-to-equity ratio of 1.17x at March 31, 2022; proforma debt-to-equity ratio was 1.14x after taking into account the sales of government-guaranteed portions of SBA 7(a) loans prior to March 31, 2022, which sales settled subsequent to the balance sheet date.
Total investment portfolio increased by 5.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $764.1 million at March 31, 2022, from $726.1 million at March 31, 2021.
Net asset value (“NAV”) of $398.5 million, or $16.49 per share, at March 31, 2022; a decrease of (1.4){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on a per share basis, compared to NAV of $16.72 per share at December 31, 2021.

2022 Dividend Declarations & Payments

On March 31, 2022, the Company paid a first quarter 2022 cash dividend of $0.65 per share to shareholders of record as of March 21, 2022, which represented a 30.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the first quarter 2021 dividend of $0.50 per share.
The Company’s board of directors declared a second quarter 2022 dividend of $0.75² per share, which represents a 7.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the second quarter 2021 dividend, and is payable on June 30, 2022 to shareholders of record on June 20, 2022.
The Company has paid and declared dividends totaling $1.40 per share for the first and second quarters of 2022, which represents a 16.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over dividends paid in the first and second quarters of 2021.

Lending Highlights

Newtek Small Business Finance, LLC (“NSBF”) funded $163.3 million of SBA 7(a) loans during the three months ended March 31, 2022; a 56.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the $104.4 million of SBA 7(a) loans funded for the three months ended March 31, 2021.
NSBF forecasts funding approximately $750 million of SBA 7(a) loans for the full year 2022, which represents a 33.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $560.6 million of SBA 7(a) loans funded in 2021.
Newtek Business Lending (“NBL”), a wholly owned portfolio company closed $31.4 million SBA 504 loans during the three months ended March 31, 2022; an increase of 67.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over $18.8 million SBA 504 loans closed during the three months ended March 31, 2021.
NBL forecasts closing approximately $150 million 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.

Additional First Quarter 2022 Highlights

On January 28, 2022, Newtek’s joint venture, Newtek Conventional Lending LLC (“NCL”), closed a conventional commercial loan securitization with the sale of $56.3 million of Class A Notes (“Notes”), NCL Business Loan Trust 2022-1, secured by a segregated asset pool consisting primarily of conventional commercial business loans. The Notes were rated “A” (sf) by DBRS Morningstar.

Barry Sloane, Chairman, President and Chief Executive Officer said, “We believe that Newtek’s performance in the first quarter demonstrated continued growth in our business model and performance metrics. One must keep in mind that the pandemic influenced business results in 2020 and 2021, and our goal in 2022 is to replace approximately $50 million in PPP fee income we earned in 2021, which equates to an excess of $2.00 of revenue per share. As we have stated many times, we believe that the flexibility of our business model and our ability to be nimble and to adjust to changing business climates is one of our trademark assets. Indeed, last year, while funding approximately $730 million of PPP loans to over 15,000 borrowers, we funded a Company record of $560.6 million of SBA 7(a) loans, which we believe clearly illustrates the flexibility and adaptability of our business model.”

Mr. Sloane continued, “We experienced strong year-over-year comparisons across key metrics in the first quarter of 2022. Our first quarter 2022 SBA 7(a) loan fundings of $163.3 million was a Company record for first quarter SBA 7(a) loan fundings and an increase of 56.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over first quarter 2021 SBA 7(a) loan fundings of $104.4 million. This is our highest ever quarter-over-quarter comparison on a percentage basis in a first quarter. Additionally, the dividends that the Company has paid or declared for the first six months of 2022 total $1.40 per share, which represents a 16.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over dividends paid in the first and second quarters of 2021. We are particularly proud of this six month year-over-year dividend growth considering that there will be no PPP income in 2022 versus $50 million of PPP fee income received in 2021. Finally, and I believe worth noting, is that even though we experienced a slight decrease in NAV at March 31, 2022 over December 31, 2021, due to a number of factors, including a widening of credit spreads and an increase in cost of capital, we did experience a solid increase in NAV from December 31, 2020 to December 31, 2021 of 8.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.”

Commenting further on first quarter 2022 SBA 7(a) loan fundings, Mr. Sloane said, “We are extremely proud of accomplishing this strong year-over-year quarterly growth in SBA 7(a) fundings, particularly in light of the fact that we have historically experienced lower funding amounts in the first quarter as the SBA 7(a) pipeline is diminished at year end as we start fresh at the beginning of the year. Moreover, we are proud of the fact that NSBF has maintained its positions as second largest SBA 7(a) lender, including banks, by loan approval dollar volume as of March 31, 2022, and the largest non-bank SBA 7(a) lender, while the SBA7(a) program experienced flat growth year over year. We attribute this outstanding performance and strong comparisons to changes that we implemented to our lending business as well as how we source our lending business. We made technological improvements to our NewTracker^(R) platform which enables us to transfer data from borrowers to our lending process in a more seamless and frictionless manner. In addition, managerial additions and adjustments at the senior management level under Peter Downs, NSBF’s President and the Company’s Chief Lending Officer, during the two pandemic-laden years, has been a hugely successful. Not only has management enhanced its buy-in to our business methodology, but staff turnover created a huge opportunity to add to our team of experienced professionals who are readily adopting our way of business, Furthermore, our historic utilization of our NewTracker^® platform which is still receiving and tracking close to 100,000 referrals per quarter, on average across all business lines, gives us the advantage of pairing borrowers with loans from our SBA 7(a), SBA 504, secured lines of credit and non-conforming conventional loan businesses. NewTracker^® enables us to remotely originate all business opportunities beyond lending through strategic alliance partnerships without the traditional use of branches, brokers, business development officers, and frequent salesforce contact, and historically has proven to be a winning strategy. We will elaborate on all of this in more depth on tomorrow’s conference call.”

Mr. Sloane further stated, “Some people mistakenly view Newtek solely as an SBA 7(a) lender. Although it’s been a flagship product for the Company during our 22-year history as a public company, we like to remind our investors that it was our technology solutions and payment processing businesses that carried Newtek through many years, including the 2008-2009 lending crisis. We believe that our portfolio companies’ performance has improved and Newtek Technology Solutions, Newtek Merchant Solutions, Newtek Business Lending and Newtek Conventional Lending made meaningful contributions to our first quarter 2022 dividend of $0.65 per share. In our technology solutions and payment processing businesses, David Simon and Jared Mills are both demonstrating great leadership and results in guiding their business units through 2022. We are also finally seeing improvements from our payroll processing and insurance agency businesses under the leadership of Shannon Vestal, Samantha Razon, Kyle Sloane, and Melissa Walker, and expect to see continued improvements in future quarters.”

Mr. Sloane concluded, “On Monday, May 2, 2022, the Company filed it definitive proxy statement seeking shareholder approval of a proposal authorizing the Company’s Board of Directors to discontinue the Company’s election to be regulated under the Investment Company Act of 1940 (subject to certain regulatory approvals and other conditions described in the proxy statement). The proxy statement is being distributed to shareholders at the time of this press release. In addition, the Company has been developing the NewtekOne Dashboard™ as well as additional ways to market and unlock benefits from the NewTracker^(R)and other technologies that the Company has created and, most importantly, utilized for over two decades, which is an exciting development that we believe we can achieve. We want to highlight the fact that if shareholders authorize the discontinuance of our regulation under the 1940 Act and we receive the required regulatory approvals to close the acquisition of the National Bank of New York, we expect to be the same company, in the same businesses, just in a different corporate and financial structure. As set forth more fully in the proxy statement, we believe that as a bank holding company we will be able to unlock value that can improve Newtek’s existing client experience, open the organization to new clients and importantly can create benefits to the Company by lowering dependence on selling shares for capital, and utilizing the bank’s balance sheet for financing and diversifying the loan book of business to reduce risk. We encourage shareholders to review our Proxy Statement dated May 2, 2022 and the accompanying materials carefully. We look forward to discussing the performance of each of our businesses and updating the market in a more granular basis on our call tomorrow morning at 8:30 a.m. ET. The accompanying PowerPoint will be available for review on our website by 4:45 p.m. ET today.”

First Quarter 2022 Conference Call and Webcast

A conference call to discuss first quarter 2022 results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer, and Nicholas Leger, Chief Accounting Officer, tomorrow, Thursday, May 5, 2022 at 8:30 a.m. ET. The live conference call can be accessed by dialing (346) 248-7799 using the Meeting ID: 96364580000 and passcode 456097.

In addition, a live audio webcast of the call with 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 webcast with the corresponding presentation will be available on Newtek’s website shortly following the live presentation and will remain available for 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. We believe 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.

²Note 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, while a BDC and regulated investment company (RIC), 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 “Acquisition”), obtain required regulatory approvals for the pending Acquisition and obtain shareholder approval to withdraw our election as a BDC, as well as projections concerning or considering the pending Acquisition, 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)
	March 31, 2022		December 31, 2021
ASSETS	(Unaudited)
Investments, at fair value
SBA unguaranteed non-affiliate investments (cost of $449,551 and $431,970, respectively; includes $333,659 and $344,266, respectively, related to securitization trusts)	$	440,005	$	424,417
SBA guaranteed non-affiliate investments (cost of $65,425 and $16,964, respectively)		71,939		72,970
Controlled investments (cost of $150,048 and $138,891, respectively)		251,133		260,398
Non-control investments (cost of $1,000 and $1,000, respectively)		1,000		1,000
Total investments at fair value		764,077		758,785
Cash		4,911		2,397
Restricted cash		158,543		184,463
Broker receivable		16,725		44,537
Due from related parties		4,812		4,395
Servicing assets, at fair value		28,855		28,008
Right of use assets		7,005		7,310
Other assets		24,384		26,666
Total assets	$	1,009,312	$	1,056,561

LIABILITIES AND NET ASSETS
Liabilities:
Bank notes payable	$	50,000	$	50,000
Notes due 2024 (par: $38,250 and $38,250 as of March 31, 2022 and December 31, 2021)		37,734		37,679
Notes due 2025 (par: $30,000 and $15,000 as of March 31, 2022 and December 31, 2021)		29,124		14,545
Notes due 2026 (par: $115,000 and $115,000 as of March 31, 2022 and December 31, 2021)		112,307		112,128
Notes payable – Securitization trusts (par: $232,606 and $249,750 as of March 31, 2022 and December 31, 2021)		229,354		246,250
Notes payable – related parties		—		11,450
Due to related parties		582		1,490
Lease liabilities		8,696		9,056
Deferred tax liabilities		13,676		12,733
Due to participants		117,459		146,225
Derivative instruments		—		183
Accounts payable, accrued expenses and other liabilities		11,900		10,935
Total liabilities		610,832		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, 24,161 and 24,159 issued and outstanding, respectively)		483		483
Additional paid-in capital		368,299		367,663
Accumulated undistributed earnings		29,698		35,741
Total net assets		398,480		403,887
Total liabilities and net assets	$	1,009,312	$	1,056,561
Net asset value per common share	$	16.49	$	16.72

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except for Per Share Data)

	Three Months Ended March 31,
		2022			2021
Investment income
From non-affiliate investments:
Interest income – PPP loans	$	—		$	24,208
Interest income – SBA 7(a) loans		7,079			5,949
Servicing income		3,181			2,740
Other income		1,579			1,114
Total investment income from non-affiliate investments		11,839			34,011
From non-control investments:
Interest income		—			124
Dividend income		22			26
Total investment income from non-control investments		22			150
From controlled investments:
Interest income		664			533
Dividend income		7,824			—
Total investment income from controlled investments		8,488			533
Total investment income		20,349			34,694
Expenses:
Salaries and benefits		5,109			4,450
Interest		4,667			5,072
Depreciation and amortization		63			85
Professional fees		1,301			1,188
Origination and loan processing		2,454			2,971
Origination and loan processing – related party		4,029			3,143
Loss on extinguishment of debt		—			955
Other general and administrative costs		1,753			1,635
Total expenses		19,376			19,499
Net investment income		973			15,195
Net realized and unrealized gains (losses):
Net realized gain on non-affiliate investments – SBA 7(a) loans		15,295			7,393
Net realized gain (loss) on derivative transactions		445			—
Net unrealized appreciation (depreciation) on SBA guaranteed non-affiliate investments		(728	)		4,393
Net unrealized appreciation (depreciation) on SBA unguaranteed non-affiliate investments		(1,990	)		1,387
Net unrealized appreciation (depreciation) on controlled investments		(2,024	)		2,375
Change in deferred taxes		(943	)		(633	)
Net unrealized appreciation on non-control investments		—			527
Net unrealized appreciation on derivative transactions		183			—
Net unrealized depreciation on servicing assets		(1,559	)		(513	)
Net realized and unrealized gains	$	8,679		$	14,929
Net increase in net assets resulting from operations	$	9,652		$	30,124
Net increase in net assets resulting from operations per share	$	0.40		$	1.35
Net investment income per share	$	0.04		$	0.68
Dividends and distributions declared per common share	$	0.65		$	0.50
Weighted average number of shares outstanding		24,156			22,337

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)	March 31, 2022		Per share		March 31, 2021		Per share
Net investment income	$	973	$	0.04	$	15,195	$	0.68
Net realized gain on non-affiliate investments – SBA 7(a) loans		15,295		0.63		7,393		0.33
Adjustment for realized gain on derivatives (1)		1,010		0.04		—		—
Loss on debt extinguishment		—		—		955		0.04
Adjusted Net investment income	$	17,278	$	0.72	$	23,543	$	1.05

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:

	Three months ended				Three months ended
(in thousands, except per share amounts)	March 31, 2022		Per share		March 31, 2021		Per share
Net realized gain on derivatives	$	445	$	0.02	$	—	$	—
Hedging realized adjustment on hedging positions closed during current period		565		0.02		—		—
Adjustment for realized gain on derivatives	$	1,010	$	0.04	$	—	$	—

Note: Amounts may not foot due to rounding

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
DEBT-TO-EQUITY RATIO – ACTUAL AT MARCH 31, 2022

(in thousands):
Actual Debt-to-Equity Ratio at March 31, 2022
Total senior debt	$	465,856
Total equity	$	398,480
Debt-to-equity ratio – actual	1.17x

NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
DEBT-TO-EQUITY RATIO – PROFORMA AT MARCH 31, 2022

(in thousands):
Broker receivable, including premium income receivable	$	16,725
Less: realized gain on sale included in broker receivable		(1,651	)
Broker receivable		15,074

90{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} advance rate on SBA guaranteed non-affiliate portions of loans sold, not settled	$	13,567


Proforma debt adjustments at March 31, 2022:
Total senior debt	$	465,856
Proforma adjustment for broker receivable		(13,567	)
Total proforma debt	$	452,289


Proforma Debt-to-Equity ratio at March 31, 2022:
Total proforma debt	$	452,289
Total equity	$	398,480
Debt-to-equity ratio – proforma	1.14x

May 2, 2022

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.

Cision

View original content:https://www.prnewswire.com/news-releases/sos-limited-reports-2021-full-year-financial-results-301537455.html

SOURCE SOS Limited

April 29, 2022

Amazon stock plunges as company reports nearly $4 billion loss

CNN Business
—

Amazon’s stock plummeted soon after the corporation noted on Thursday slowing expansion and bigger prices in its most up-to-date quarter and supplied a disappointing profits outlook.

The tech huge mentioned income grew 7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from the exact same interval previous yr to $116.4 billion, marginally beating analyst forecasts but slower than the 9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} advancement in the final months of past year. The firm forecast that earnings growth would slow further more upcoming quarter, anticipating a development charge of amongst 3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} and 7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}.

Amazon described a web reduction of $3.8 billion for the quarter ended March 31, a sharp drop from the very same period of time previous calendar year, when it made an $8.1 billion financial gain. It was also a massive pass up from the $4.4 billion profit that analysts surveyed by Refinitiv had forecast.

The business attributed the decline mostly to a $7.6 billion decline from its investment decision in electric powered automaker Rivian Automotive. Rivian, into which Amazon led a $700 million investment decision in 2019, has seen its stock plummet far more than 75{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} due to the fact its blockbuster November 2021 IPO.

01:19
– Supply:
CNN

‘They’re allowing the fox into the hen house’: How Bezos marketed guides to start out his empire

The Amazon reduction arrived the day right after Ford

(F), yet another early investor in Rivian, took a $5.4 billion pre-tax cost relevant to that financial investment, resulting in Ford

(F) reporting a $3.1 billion net reduction for the first quarter.

Excluding the Rivian reduction, Amazon would have built a gain of $3.8 billion, which still would have fallen short of analyst expectations, for every Refinitiv.

Amazon

(AMZN) shares sank more than 12{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} on Friday.

“The pandemic and subsequent war in Ukraine have introduced abnormal progress and worries,” Amazon CEO Andy Jassy said in a statement.

Jassy referenced Amazon’s breakneck development in its customer organization all through the pandemic, and the “doubling” of the company’s success community in the past two decades.

01:07
– Supply:
CNN

Nerdy, geek: Good friends explain Jeff Bezos in his 20s

“Today, as we’re no more time chasing bodily or staffing capability, our teams are squarely centered on bettering productiveness and charge efficiencies throughout our success network,” he included. “This may possibly choose some time, notably as we work as a result of ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of consumer practical experience proportions.”

The enterprise also declared that Prime Working day, its annual gross sales bonanza, will acquire put this July in far more than 20 international locations.

In an earnings phone, Amazon’s chief fiscal officer, Brian Olsavsky, explained greater inflation, fuel charges and labor constraints additional $2 billion to fees as opposed to previous calendar year.

“The expense to ship an abroad container has additional than doubled as opposed to pre-pandemic premiums,” he reported. “The charge of gasoline is around a person and a 50 percent situations higher than it was even a calendar year in the past.”

The rise of the Omicron variant to the finish of 2021 led to “a significant increase” in staff members likely on depart, prompting Amazon to enhance choosing to make up for the absences, Olsavsky explained. But as staff returned when the variants subsided, “we promptly transitioned from becoming understaffed to getting overstaffed,” he extra. That resulted in “lower productivity” incorporating another $2 billion in costs, he reported.

Amazon’s proposed new making appears to be like this emoji

Amazon’s earnings strike arrives as the firm carries on to deal with pressure from its warehouse personnel around problems these as fork out and doing work ailments. Employees at a Staten Island, New York, warehouse voted to sort the e-commerce giant’s initial-ever US labor union before this month. Amazon has considering the fact that submitted an attractiveness, calling for a do-over of the full vote.

A different Amazon union election in Bessemer, Alabama, also concluded not long ago with the results as well near to get in touch with.

Both equally union attempts grew from worker frustrations with Amazon’s treatment of employees amid the pandemic and had been also inspired in aspect by improved countrywide attention to racial justice troubles and labor rights.

Amazon subsequently introduced it would carry out a racial equity audit led by former US Lawyer Standard Loretta Lynch.

April 15, 2022

China Liberal Education Holdings Limited Reports Financial Results for Fiscal Year 2021

BEIJING, April 14, 2022 /PRNewswire/ — China Liberal Education Holdings Limited (Nasdaq: CLEU) (“China Liberal,” the “Company,” or “we”), a China-based company that provides smart campus solutions and other educational services, today announced its financial results for the fiscal year ended December 31, 2021.

Ms. Ngai Ngai Lam, Chairperson and CEO of China Liberal, commented, “In fiscal year 2021, the COVID-19 pandemic and related travel restrictions negatively impacted our operations and business expansion. Particularly, many Chinese universities and colleges held off on their ‘smart campus’ project plans due to the uncertainties associated with the COVID-19 pandemic. As a result, our revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million from $5.02 million last fiscal year. We strive to drive our business forward despite these short-term challenges and remain optimistic on our business outlook for 2022 and beyond. We have taken actions to strengthen our market position and keep our financials resilient by acquiring Wanwang Investment Limited, which we believe will allow us to enhance our services and products and improve the quality of our programs.”

Ms. Ngai Ngai Lam continued, “We keep optimizing our growth strategies as market dynamics change and continue monitoring our customers’ preferences while focusing investments on our core growth initiatives with the clearest path to profitability. Growing demand for school-enterprise integrated education solutions continues to accelerate the growth of our integrated enterprises and vocational education (tailored job readiness training services). In addition, the acquisition of Wanwang Investment Limited allows us to become an operator of an independent three-year college and a four-year college in China with a total student enrollment of over 4,200, facilitating our strategic transformation and laying a solid new business foundation. I am proud of the team for what we have accomplished together and I am looking forward to building on our momentum.”

Fiscal Year 2021 Financial Highlights

	For the Year Ended December 31,
($ millions, except per share data)	2021	2020	{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}Change
Revenue	3.91	5.02	-22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross profit	2.76	2.87	-3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Gross margin	70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	13.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Income(loss) from operations	-1.17	1.44	NM
Net income(loss)	-1.25	1.21	NM
Basic and diluted earnings(loss) per share	-0.12	0.21	NM
Note: NM refers to “Not Meaningful”

Revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million for fiscal year 2021 from $5.02 million for fiscal year 2020.
Gross profit decreased by 3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $2.76 million for fiscal year 2021 from $2.87 million for fiscal year 2020.
Gross margin increased to 70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2021 from 57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2020.
Loss from operations was $1.17 million for fiscal year 2021, compared to income from operations of $1.44 million for fiscal year 2020.
Net loss was $1.25 million for fiscal year 2021, compared to net income of $1.21 million for fiscal year 2020.
Basic and diluted loss per share were $0.12 for fiscal year 2021, compared to basic and diluted earnings per share of $0.21 for fiscal year 2020.

Fiscal Year 2021 Financial Results

Revenue

Revenue decreased by 22.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year to $3.91 million for fiscal year 2021 from $5.02 million for fiscal year 2020. The decrease in revenue was mainly attributable to decreased revenue from our technological consulting services for smart campus solutions in fiscal year 2021 as compared to fiscal year 2020, which was mainly caused by a decrease in the average contractual value of smart campus related projects by 70.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} as high value contracts with Fuzhou Melbourne Polytechnic (“FMP”) were mainly completed in 2020.

	For the Year Ended December 31,
($ millions)	2021			2020
Revenue	Revenue	Cost of Revenue	Gross Margin (Loss)	Revenue	Cost of Revenue	Gross Margin
Sino-foreign jointly managed academic programs	2.68	0.36	86.4{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	2.77	0.59	78.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Technological consulting services for smart campus solutions	1.06	0.62	41.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	1.99	1.40	29.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Overseas study consulting services	0.04	0.05	-43.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.13	0.09	33.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Tailored job readiness training services	0.14	0.12	15.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	0.08	0.06	15.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Textbook and course material sales	–	–	–	0.05	0.01	80.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
Total	3.91	1.15	70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}	5.02	2.15	57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}

Revenue from Sino-foreign jointly managed academic programs decreased by $0.09 million, or 3.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $2.68 million for fiscal year 2021, from $2.77 million for fiscal year 2020. This decrease was primarily attributed to a decrease in the number of students by 243, or 9.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, from 2,731 students for the year ended December 31, 2020, to 2,488 students for the year ended December 31, 2021, which resulted in a decrease of $254,042 in revenue. The decrease was partially offset by an increase in average tuition fees collected from $1,015 per student in 2020 to $1,076 per student in 2021, which resulted in an increase of $157,510 in revenue. The increase in average tuition fee was mainly caused by an appreciation of Renminbi (“RMB”) against U.S. dollars while the average tuition fee per student in RMB decreased from RMB6,993 ($1,015) in 2020 to RMB6,931 ($1,076) in 2021.

Revenue from providing smart campus related technological consulting services and technical support services for other entities decreased by $0.93 million, or 46.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.06 million for fiscal year 2021, from $1.99 million for fiscal year 2020. The decrease in revenue was mainly attributable to a decrease in the average project size from $143,000 per project in 2020 to $58,859 per project in 2021 as compared to 2020. In 2020, we executed three relatively large technological consulting service projects, including the hardware and software installation and digital classrooms for FMP’s experiment-based simulation center for its hotel management major with contract price of RMB5 million ($0.7 million), the digital classrooms for Beijing Institute of Graphic Communications with contract price of approximately RMB1.3 million ($0.2 million) and technical support services provided to a third party enterprise, Wuhan Wangjie Hengtong Information Technology Co., Ltd., with contract price of RMB4.2 million ($612,239). However, in 2021, the 18 projects we worked on were of smaller size and scope and accordingly, the service fees we charged to customers were also smaller. The overall decrease in our revenue from technological consulting services for smart campus solutions reflected the above combined reasons.

Revenue from overseas study consulting services decreased by $0.09 million, or 75.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.04 million for fiscal year 2021, from $0.13 million for fiscal year 2020. During the years ended December 31, 2021 and 2020, under our service contracts with Beijing Foreign Studies University, we assisted 27 students and 11 students for Russian language training, and 27 students and 22 students for German language training, respectively. We recognized $36,174 in revenue when our performance obligations under the service contracts were satisfied during the fiscal year 2021. The decrease in revenue from overseas study consulting services was mainly attributed to the cancellation of visa applications to Russia and Germany by the students, which is mainly due to the international travel restrictions caused by the COVID-19 pandemic.

Revenue from tailored job readiness training services increased by $0.06 million, or 80.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $0.14 million for fiscal year 2021, from $0.08 million for fiscal year 2020. The increase was mainly attributable to an increase in the number of students who received tailored job readiness training services from 147 in 2020 to 443 in 2021.

Revenue from textbooks and course material sales decreased by $0.05 million, or 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to nil for fiscal year 2021, from $0.05 million for fiscal year 2020. The decrease was mainly attributed to a delay in our publisher’s payment cycle due to small publication volume of our textbooks and course materials.

Cost of Revenue

Cost of revenue decreased by $1.01 million, or 46.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $1.15 million for fiscal year 2021, from $2.16 million for fiscal year 2020, primarily due to the reduced average size and scope of the 18 technological consulting service projects we worked on in 2021 compared to projects in 2020, and accordingly costs associated with hardware and components installation in technology consulting services for smart campus related projects decreased in 2021. In addition, our cost associated with Sino-foreign jointly managed academic programs decreased by $0.2 million, or 38.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, in 2021 as compared to 2020, which was mainly attributable to a decrease in salary, welfare and insurance costs of foreigner teachers in Sino-foreign jointly managed academic programs. Due to travel bans or restrictions caused by the COVID-19 pandemic, some foreign teachers were unable to enter China and we engaged more Chinese teachers to provide teaching services to students in 2021.

Gross Profit

Gross profit decreased by $0.11 million, or 3.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $2.76 million for fiscal year 2021, from $2.87 million for fiscal year 2020, while gross profit margin increased by 13.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to 70.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2021 from 57.1{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} for fiscal year 2020. The decrease in gross profit was primarily due to a decrease in gross profit contribution from smart campus related technological consulting services, which mainly resulted from the decrease in average project size and average gross profit per project in fiscal year 2021 compared to fiscal year 2020, as we executed more projects with software customization rather than hardware installation in fiscal year 2021. Also, gross profit contribution from overseas study consulting services decreased by 135.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in fiscal year 2021 compared to fiscal year 2020 due to higher student recruitment costs in 2021. Additionally, gross profit contribution from textbook and course material sales decreased by 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} due to the decrease in publication volume.

Operating Expenses

Selling expenses decreased by $76,897, or 166.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $152,759 for fiscal year 2021, from $229,656 for fiscal year 2020. The decrease in selling expenses was primarily attributable to a decrease in depreciation of $18,236 and a decrease in rental expenses by $16,018 when we relocated to a smaller office space due to streamlining of operations, a decrease in salary and employee welfare benefit expenses paid to sales and marketing personnel by $14,893, resulting from cutting down our sales and marketing force, and a decrease in office and other miscellaneous expenses.

General and administrative expenses increased by $2.58 million, or 214.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $3.78 million for fiscal year 2021, from $1.20 million for fiscal year 2020, primarily due to an increase in share-based compensation to employees of $2.3 million, an increase in professional service fees of $72,229, an increase in audit fee of $67,300, an increase in investor relation expenses of $61,376, and an increase in director and officer insurance expenses of $34,127.

Interest Income

Interest income decreased by $7,062, or 7.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, to $94,195 for fiscal year 2021, from $101,257 for fiscal year 2020. In connection with the technological consulting services for smart campus projects, we recognized financing component resulted from a timing difference between when control was transferred and when we collected cash consideration from the customer. For the years ended December 31, 2021 and 2020, we recognized $87,589 and $94,271 in interest income in connection with the aforementioned financing component, respectively. In addition, we reported interest income of $6,606 and $6,986 from bank deposit balance in the years ended December 31, 2021 and 2020, respectively. These factors led to decreased interest income in fiscal year 2021, as compared to fiscal year 2020.

Other Income (Expense), Net

Other income was $126,648 for fiscal year 2021, as compared to other expense of $26,035 for fiscal year 2020. The increase in other income was primarily due to provision of other training services in fiscal year 2021.

Provision for Income Taxes

Provision for income taxes was $300,034 for fiscal year 2021, decreased from $303,246 for fiscal year 2020 due to lower taxable income.

Net Income (Loss)

Net loss was $1.25 million for fiscal year 2021, compared to net income of $1.21 million for fiscal year 2020. Basic and diluted loss per share were $0.12 for fiscal year 2021, compared to basic and diluted earnings per share of $0.21 for fiscal year 2020.

Financial Condition

As of December 31, 2021, the Company had cash of $32.68 million, compared to $5.01 million as of December 31, 2020.

Net cash used in operating activities was $1.41 million for fiscal year 2021, compared to net cash provided by operating activities of $0.64 million for fiscal year 2020.

Net cash used in investing activities was $7,543 for fiscal year 2021, compared to $1,396,125 for fiscal year 2020.

Net cash provided by financing activities was $29.06 million for fiscal year 2021, compared to $3.97 million for fiscal year 2020.

Impact of the COVID-19 on Performance and Financial Indicators

Our results of operations and financial conditions in 2021 were affected by the COVID-19 pandemic and may continue to be affected by COVID-19 pandemic in 2022 and potentially beyond. COVID-19 has impact on China’s study abroad consulting and training services industry and the business operations of our Company. The extent to which COVID-19 impacts our results of operations in the future will depend on the future developments of the pandemic, including new information concerning the global severity of and actions taken to contain the pandemic, which are highly uncertain and unpredictable. In addition, our results of operations could be adversely affected to the extent that the pandemic harms the Chinese and global economy in general. We face risks related to natural disasters, extreme weather conditions, health epidemics including the COVID-19, and other catastrophic incidents, which could significantly disrupt our operations.

The pandemic and related travel restrictions have affected and may continue to adversely affect our business and results of operations, including the demand for our services and the ability of partner schools to pay back accounts receivable on a timely basis. We will pay close attention to the future development of COVID-19 pandemic and perform further assessment of its impact and take relevant measures to minimize the impact. Uncertainties associated with COVID-19 pandemic may cause the Company’s revenue and cash flows to underperform in the next 12 months.

About China Liberal Education Holdings Limited

China Liberal, headquartered in Beijing, is an educational service provider in China. It provides a wide range of services, including those under sino-foreign jointly managed academic programs; overseas study consulting services; technological consulting services for Chinese universities to improve their campus information and data management system and to optimize their teaching, operating and management environment, creating a “smart campus”; and tailored job readiness training to graduating students. For more information, please visit the Company’s website at ir.chinaliberal.com.

Forward-Looking Statements

This document contains forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s expectations and projections about future events, which the Company derives from the information currently available to the Company. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review risk factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission.

Investor Relations Contact

China Liberal Education Holdings Limited
Email: [email protected]

Ascent Investor Relations LLC
Ms. Tina Xiao
Email: [email protected]
Tel: +1 917 609 0333

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2021		2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	32,678,421	$	5,007,449
Account receivables		2,462,550		915,618
Contract assets,		2,014,146		4,448,946
Advance to suppliers		4,525,794		94,648
Prepayment to acquire a subsidiary		1,492,772		–
Due from a related party		–		1,439,080
Inventories		201,091		196,326
Prepaid expenses and other current assets		175,956		223,387
TOTAL CURRENT ASSETS	$	43,550,730	$	12,325,454
NON-CURRENT ASSETS
Plant and equipment		35,384		49,148
Right-of-use asset		47,617		136,695
Contract assets		–		262,617
TOTAL NON-CURRENT ASSETS	$	83,001	$	448,460

TOTAL ASSETS	$	43,633,731	$	12,773,914

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Account payables	$	169,137	$	125,223
Contract liabilities		291,833		154,927
Taxes payable		740,966		633,651
Due to related parties		23,557		–
Lease liability		47,617		90,253
Accrued expenses and other liabilities		402,233		105,829
TOTAL CURRENT LIABILITIES	$	1,675,343	$	1,109,883
NON-CURRENT LIABILITIES
Lease liability		–		23,102
TOTAL LIABILITIES	$	1,675,343	$	1,132,985

COMMITMENTS AND CONTINGENCIES		–		–

SHAREHOLDERS’ EQUITY
Ordinary shares, $0.001 par value, 50,000,000 shares authorized, 13,848,333 and 6,333,333 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively	$	13,848	$	6,333
Additional paid-in capital		40,686,311		9,358,487
Statutory reserve		719,804		551,146
Retained earnings		147,278		1,565,817
Accumulated other comprehensive income		391,147		159,146
Total shareholders’ equity	$	41,958,388	$	11,640,929

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	43,633,731	$	12,773,914

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


	For the years ended December 31
	2021		2020		2019

REVENUE	$	3,909,546	$	5,023,099	$	5,255,810
COST OF REVENUE		(1,149,148)		(2,157,033)		(3,360,694)
GROSS PROFIT		2,760,398		2,866,066		1,895,116

OPERATING EXPENSES
Selling expenses		(152,759)		(229,656)		(593,215)
General and administrative expenses		(3,778,329)		(1,199,690)		(783,241)
Total operating expenses		(3,931,088)		(1,429,346)		(1,376,456)

(LOSS) INCOME FROM OPERATIONS		(1,170,690)		1,436,720		518,660

OTHER INCOME
Interest income		94,195		101,257		6,120
Other income (expenses), net		126,648		(26,035)		69,162
Total other income, net		220,843		75,222		75,282

(LOSS) INCOME BEFORE INCOME TAXES		(949,847)		1,511,942		593,942
INCOME TAX EXPENSE		(300,034)		(303,246)		(156,038)

NET (LOSS) INCOME	$	(1,249,881)	$	1,208,696	$	437,904

COMPREHENSIVE (LOSS) INCOME
Total currency translation differences arising from consolidation		232,001		471,554		(78,171)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	(1,017,880)	$	1,680,250	$	359,733

(LOSS) EARNINGS PER SHARE
Basic and diluted	$	(0.12)	$	0.21	$	0.09

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic and diluted		10,368,563		5,852,459		5,000,000

CHINA LIBERAL EDUCATION HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the years ended December 31,
	2021		2020		2019

Cash flows from operating activities
Net (loss) income	$	(1,249,881)	$	1,208,696	$	437,904
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		18,652		15,891		40,038
Non-cash lease expenses		91,386		41,524		2,533
Loss on disposal of property and equipment		607		37,468		–
Share-based compensation		2,288,251		–		–
Changes in operating assets and liabilities:
Account receivables		(1,504,828)		(343,165)		306,781
Contract assets		2,781,603		(719,615)		(176,968)
Advance to suppliers		(4,355,926)		756,846		(824,141)
Deferred initial public offering costs		–		–		(650,092)
Due from a related party		–		–		72,371
Inventories		199		(185,985)		–
Prepaid expenses and other current assets		33,653		128,658		(57,406)
Account payables		40,239		66,961		(69,500)
Contract liabilities		462,253		(421,834)		417,987
Taxes payable		90,150		191,373		164,879
Lease liability		(67,754)		(60,907)		(5,252)
Accrued expenses and other liabilities		(40,842)		(80,097)		2,434
Net cash (used in) provided by operating activities		(1,412,238)		635,814		(338,432)

Cash flows from investing activities
Purchase of plant and equipment		(4,439)		(21,230)		(17,738)
Acquisition of 8.8228{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} non-controlling interest in China Liberal Beijing		–		–		(453,669)
Advance to a related party		–		(1,374,895)		–
Prepayment to acquire a subsidiary		(1,474,217)		–		–
Repayment of advance to a related party		1,471,113		–		–
Net cash used in investing activities		(7,543)		(1,396,125)		(471,407)

Cash flows from financing activities
Proceeds from related party borrowings		9,415		–		439,193
Repayment of due to a related party		–		(1,439,799)		–
Net proceeds from issuance of ordinary shares		29,047,088		5,405,451		–
Net cash provided by financing activities		29,056,503		3,965,652		439,193

Effect of changes of foreign exchange rates on cash		34,250		99,829		(4,241)
Net increase (decrease) in cash		27,670,972		3,305,170		(374,887)
Cash, beginning of year		5,007,449		1,702,279		2,077,166
Cash, end of year	$	32,678,421	$	5,007,449	$	1,702,279

Supplemental disclosure of cash flow information:
Cash paid for interest expense	$	40,555	$	2,697		–
Cash paid for income tax		–	$	20,775	$	18,657
Supplemental disclosure of non-cash investing and financing activities
Transfer of non-controlling interest		–		–	$	87,238
Right-of-use assets obtained in exchange for operating lease obligations		–	$	180,528	$	21,062

SOURCE China Liberal Education Holdings Limited