Record fourth quarter revenue of $60.6 million, up 6.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from the fourth quarter of 2021
Record full year 2022 revenue of $209.0 million, up 86.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from 2021
Cost reduction initiatives on-track to deliver $100 million in aggregate, annualized cost savings in 2023, prioritizing path to profitability
Initiates full year 2023 revenue guidance of between $210 and $260 million
BOSTON, March 01, 2023–(BUSINESS WIRE)–Desktop Metal, Inc. (NYSE: DM) today announced financial results for the fourth quarter and full year ended December 31, 2022.
“Desktop Metal delivered record revenue for fourth quarter and full year 2022, fueled by our differentiated portfolio of AM 2.0 mass production solutions, our strong market position, and the team’s solid execution amidst an unsteady macro environment,” said Ric Fulop, Founder and CEO of Desktop Metal. “We also took actions to streamline the business and expanded our cost reduction plans to $100 million in annualized cost savings to prioritize our path to profitability and position the business for long-term growth. As a result, we enter 2023 a stronger, more resilient company focused on driving another year of revenue growth at scale, delivering on our cost reduction measures, and dramatically improving adjusted EBITDA and cash flow, in order to capitalize on the next stage of secular growth in the additive manufacturing market.”
Recent Business Highlights:
Continued and expanded the cost reduction plan announced in 2022 to add an additional $50 million in annualized savings after successfully completing $50 million in annualized savings in 2022. Total combined $100 million in annualized cost savings are on-track in order to reduce expense structure, drive margin expansion, and prioritize path to profitability
Announced strategic collaboration with Align Technology to accelerate adoption of digital dentistry in the $30 billion annual dental parts market. Align’s market-leading iTero intraoral scanners will be offered as a seamless managed service to dentists in a subscription model with recurring revenue, enabling a gateway for a connected suite of digital dentistry solutions with a workflow backed by Desktop Labs’ experienced network of digitized dental laboratories and premium Desktop Health 3D printers and materials
Commenced shipments of Production System™ P-50 in 2022 including continued traction with automotive, industrial, and other major end markets. Recently signed master supply agreement with one of the largest consumer electronics companies in the world
Launched the all-new S-Max Flex® for affordable and scalable digital sand casting, leveraging Single Pass Jetting™ technology
Unveiled FreeFoam, a revolutionary, expandable 3D printable resin designed for volume production of foam parts
Launched Figur G15, the first commercial platform of its kind to shape standard sheet metal on demand using patent-pending Digital Sheet Forming (DSF) technology
Installations of additive manufacturing systems for metal parts surpassed 1,100 units including some of largest production deployments in additive manufacturing
Fourth Quarter 2022 Financial Highlights:
Revenue of $60.6 million, up 6.8{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from the fourth quarter of 2021
GAAP gross margin of 13.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}; non-GAAP gross margin of 24.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, a sequential improvement of 440 basis points from the third quarter of 2022
GAAP net loss of $312.4 million, including $269.3 million of goodwill impairment and $10.1 million of amortization of acquired intangible assets; non-GAAP net loss of $24.0 million
Adjusted EBITDA of $(21.1) million
Full Year 2022 Financial Highlights:
Revenue of $209.0 million, up 86.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from 2021
Revenue contribution of 24{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} from high-margin consumables, services, and subscription
GAAP gross margin of 7.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}; non-GAAP gross margin of 22.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
GAAP net loss of $740.3 million, including $498.8 million of goodwill impairment and $38.7 million of amortization of acquired intangible assets; non-GAAP net loss of $130.7 million
Adjusted EBITDA of $(118.4) million
Cash, cash equivalents, and short-term investments of $184.5 million as of December 31, 2022
Outlook for Full Year 2023:
Revenue expectation of between $210 to $260 million for full year 2023
Adjusted EBITDA expectation of between $(50) to $(25) million for full year 2023, with expectation to achieve Adjusted EBITDA breakeven before year end 2023
Desktop Metal has not provided a reconciliation of its Adjusted EBITDA outlook to net income because estimates of all of the reconciling items cannot be provided without unreasonable efforts. See “Non-GAAP Financial Information.”
Conference Call Information:
Desktop Metal will host a conference call on Wednesday, March 1, 2023 at 4:30 p.m. ET to discuss fourth quarter and full year 2022 results. Participants may access the call at 1-877-407-4018, international callers may use 1-201-689-8471, and request to join the Desktop Metal financial results conference call. A simultaneous webcast of the conference call and the accompanying summary presentation may be accessed online at the Events & Presentations section of https://ir.desktopmetal.com. A replay will be available shortly after the conclusion of the conference call at the same website.
About Desktop Metal:
Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a new era of on-demand, digital mass production of industrial, medical, and consumer products. Our innovative 3D printers, materials, and software deliver the speed, cost, and part quality required for this transformation. We’re the original inventors and world leaders of the 3D printing methods we believe will empower this shift, binder jetting and digital light processing. Today, our systems print metal, polymer, sand and other ceramics, as well as foam and recycled wood. Manufacturers use our technology worldwide to save time and money, reduce waste, increase flexibility, and produce designs that solve the world’s toughest problems and enable once-impossible innovations. Learn more about Desktop Metal and our #TeamDM brands at www.desktopmetal.com.
Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in these communications, including statements regarding Desktop Metal’s future results of operations and financial position, financial targets, business strategy, plans and objectives for future operations, are forward-looking statements. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to risks associated with the integration of the business and operations of acquired businesses, our ability to realize the benefits from cost saving measures, and supply and logistics disruptions, including shortages and delays. For more information about risks and uncertainties that may impact Desktop Metal’s business, financial condition, results of operations and prospects generally, please refer to Desktop Metal’s reports filed with the SEC, including without limitation the “Risk Factors” and/or other information included in the Form 10-K filed with the SEC on March 1, 2023, and such other reports as Desktop Metal has filed or may file with the SEC from time to time. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Desktop Metal, Inc. assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
DESKTOP METAL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
76,291
$
65,017
Current portion of restricted cash
4,510
2,129
Short‑term investments
108,243
204,569
Accounts receivable
38,481
46,687
Inventory
91,736
65,399
Prepaid expenses and other current assets
17,155
18,208
Total current assets
336,416
402,009
Restricted cash, net of current portion
1,112
1,112
Property and equipment, net
56,271
58,710
Goodwill
112,955
639,301
Intangible assets, net
219,830
261,984
Other noncurrent assets
27,763
25,480
Total Assets
$
754,347
$
1,388,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
25,105
$
31,558
Customer deposits
11,526
14,137
Current portion of lease liability
5,730
5,527
Accrued expenses and other current liabilities
26,723
33,829
Current portion of deferred revenue
13,719
18,189
Current portion of long‑term debt, net of deferred financing costs
584
825
Total current liabilities
83,387
104,065
Long-term debt, net of current portion
311
548
Convertible notes
111,834
—
Contingent consideration, net of current portion
—
4,183
Lease liability, net of current portion
17,860
13,077
Deferred revenue, net of current portion
3,664
4,508
Deferred tax liability
8,430
10,695
Other noncurrent liabilities
1,359
3,170
Total liabilities
226,845
140,246
Commitments and Contingencies (Note 17)
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively
—
—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 318,235,106 and 311,737,858 shares issued at December 31, 2022 and December 31, 2021, respectively, 318,133,434 and 311,473,950 shares outstanding at December 31, 2022 and December 31, 2021, respectively
32
31
Additional paid‑in capital
1,874,792
1,823,344
Accumulated deficit
(1,308,954
)
(568,611
)
Accumulated other comprehensive loss
(38,368
)
(6,414
)
Total Stockholders’ Equity
527,502
1,248,350
Total Liabilities and Stockholders’ Equity
$
754,347
$
1,388,596
DESKTOP METAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended December 31,
2022
2021
2020
Revenues
Products
$
190,248
$
105,994
$
13,718
Services
18,775
6,414
2,752
Total revenues
209,023
112,408
16,470
Cost of sales
Products
178,952
87,450
26,945
Services
15,000
6,665
4,574
Total cost of sales
193,952
94,115
31,519
Gross profit (loss)
15,071
18,293
(15,049
)
Operating expenses
Research and development
96,878
68,131
43,136
Sales and marketing
68,091
47,995
13,136
General and administrative
83,065
78,041
20,734
In-process research and development assets acquired
—
25,581
—
Goodwill impairment
498,800
—
—
Total operating expenses
746,834
219,748
77,006
Loss from operations
(731,763
)
(201,455
)
(92,055
)
Change in fair value of warrant liability
—
(56,576
)
56,417
Interest expense
(1,743
)
(149
)
(328
)
Interest and other (expense) income, net
(8,335
)
(11,822
)
1,011
Loss before income taxes
(741,841
)
(270,002
)
(34,955
)
Income tax benefit
1,498
29,668
940
Net loss
$
(740,343
)
$
(240,334
)
$
(34,015
)
Net loss per share—basic and diluted
$
(2.35
)
$
(0.92
)
$
(0.22
)
Weighted average shares outstanding, basic and diluted
314,817
260,770
157,906
DESKTOP METAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Years Ended December 31,
2022
2021
2020
Net loss
$
(740,343
)
$
(240,334
)
$
(34,015
)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net
(290
)
(40
)
(84
)
Foreign currency translation adjustment
(31,664
)
(6,365
)
—
Total comprehensive (loss) income, net of taxes of $0
$
(772,297
)
$
(246,739
)
$
(34,099
)
DESKTOP METAL, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share amounts)
Accumulated
Other
Additional
Comprehensive
Total
Legacy Convertible Preferred Stock
Common Stock
Paid‑in
Accumulated
(Loss)
Stockholders’
Shares
Amount
Shares
Amount
Capital
Deficit
Income
Equity
BALANCE—January 1, 2020
100,038,109
$
436,553
26,813,113
$
3
$
16,722
$
(294,262
)
$
75
$
(277,462
)
Retroactive application of recapitalization (Note 1)
Third Quarter GAAP Net Income of $4.0 Million and GAAP EPS of $0.04; Third Quarter Non-GAAP Adjusted Net Income1 of $30.2Million and Non GAAP EPS of $0.29
Third Quarter Non-GAAP Adjusted EBITDA2 Totaled $40.0Million
AUSTIN, Texas, Feb. 8, 2023 /PRNewswire/ — Digital Turbine, Inc. (Nasdaq: APPS) announced financial results for the fiscal third quarter ended December 31, 2022.
Recent Financial Highlights:
Fiscal third quarter of 2023 revenue totaled $162.3 million representing a 25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decline year-over-year as compared to the fiscal third quarter of 2022.
GAAP net income for the fiscal third quarter of 2023 was $4.0 million, or $0.04 per share, as compared to GAAP net income for the fiscal third quarter of 2022 of $7.0 million, or $0.07 per share. Non-GAAP adjusted net income1 for the fiscal third quarter of 2023 was $30.2 million, or $0.29 per share, as compared to Non-GAAP adjusted net income1 of $50.9 million, or $0.49 per share, in the fiscal third quarter of 2022.
Non-GAAP adjusted EBITDA2 for the fiscal third quarter of 2023 was $40.0 million, as compared to Non-GAAP adjusted EBITDA2 of $57.0 million in the fiscal third quarter of 2022.
GAAP cash provided by operating activities was $33.2 million in the fiscal third quarter of 2023. Non-GAAP free cash flow3 was $29.9 million in the fiscal third quarter of 2023.
“While nothing has changed regarding our long-term view of the digital media industry or our strategic positioning within the industry, macro headwinds are impacting our near-term results,” said Bill Stone, CEO. “We expect current macro headwinds to continue into the first half of the calendar year, but our high-level strategic vision remains intact, as advertising spending tends to be among the first items to be negatively impacted at the onset of a cyclical downturn, but is typically also among the first items to rebound. We remain laser-focused on the execution of our core growth objectives, and effectively controlling that which we can control. We are making important progress on our SingleTap licensing business, new ad tech platform enhancements, and other initiatives that opportunistically leverage our on-device presence and first-party data. The history of Digital Turbine shows that we have successfully navigated challenges far more difficult than today’s macro environment, emerging stronger and better-positioned for long-term growth. We remain optimistic that we have the right culture, team, strategy and focus to win.”
Fiscal 2023 Third Quarter Financial Results
Total revenue for the third quarter of fiscal 2023 was $162.3 million. Total On-Device Solutions revenue before intercompany eliminations was $96.3 million. Before intercompany eliminations, total revenue from our App Growth Platform was $67.4 million.
GAAP net income for the third quarter of fiscal 2023 was $4.0 million, or $0.04 per share, as compared to GAAP net income of $7.0 million, or $0.07 per share for the third quarter of fiscal 2022. Non-GAAP adjusted net income1 for the third quarter of fiscal 2023 was $30.2 million, or $0.29 per share, as compared to Non-GAAP adjusted net income of $50.9 million, or $0.49 per share, in the third quarter of fiscal 2022.
Non-GAAP adjusted EBITDA2 for the third quarter of fiscal 2023 was $40.0 million, as compared to Non-GAAP adjusted EBITDA of $57.0 million in the third quarter of fiscal 2022. The reconciliations between GAAP and Non-GAAP financial results for all referenced periods are provided in the tables immediately following the Unaudited Condensed Consolidated Statements of Cash Flows below.
Business Outlook
Based on information available as of February 8, 2023, the Company currently expects the following for the full-year fiscal 2023:
Revenue of between $660 million and $670 million
Non-GAAP adjusted EBITDA2 of between $165 million and $170 million
Non-GAAP adjusted EPS1 of $1.15 to $1.20, based on approximately 104 million diluted shares outstanding and an effective tax rate of 25{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}
It is not reasonably practicable to provide a business outlook for GAAP net income because the Company cannot reasonably estimate the changes in stock-based compensation expense, which is directly impacted by changes in the Company’s stock price, or other items that are difficult to predict with precision.
About Digital Turbine, Inc.
Digital Turbine is the leading independent mobile growth platform and levels up the landscape for advertisers, publishers, carriers and OEMs. By integrating a full ad stack with proprietary technology built into devices by wireless operators and OEMs, Digital Turbine supercharges advertising and monetization. The company is headquartered in Austin, Texas, with global offices in New York, Los Angeles, San Francisco, London, Berlin, Singapore, Tel Aviv and other cities serving top agency, app developer and advertising markets. For additional information visit www.digitalturbine.com.
Conference Call
Management will host a conference call today at 4:30 p.m. ET to discuss its fiscal 2023 third quarter financial results and provide operational updates on the business. To participate, interested parties should dial 888-317-6003 in the United States, or 412-317-6061 from international locations, and enter access code 7637186. A webcast of the conference call will be available at ir.digitalturbine.com/events.
For those who are not able to join the live call, a playback will be available through February 15, 2023. The replay can be accessed by dialing 877-344-7529 in the United States or 412-317-0088 from international locations, passcode 4128001.
The conference call will discuss forward guidance and other material information.
Use of Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated financial statements presented in accordance with GAAP, Digital Turbine uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP adjusted net income and earnings per share (“EPS”), non-GAAP adjusted EBITDA, non-GAAP free cash flow and non-GAAP gross profit. Reconciliations to the nearest GAAP measures of all non-GAAP measures included in this press release can be found in the tables below.
Non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance, prospects for the future and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP measures provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of recurring core business operating results. The Company believes the non-GAAP measures that exclude such items when viewed in conjunction with GAAP results and the accompanying reconciliations enhance the comparability of results against prior periods and allow for greater transparency of financial results. The Company believes non-GAAP measures facilitate management’s internal comparison of its financial performance to that of prior periods as well as trend analysis for budgeting and planning purposes. The presentation of non-GAAP measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
1Non-GAAP adjusted net income and EPS are defined as GAAP net income and EPS adjusted to exclude the effect of stock-based compensation expense, amortization of intangibles, change in fair value of contingent liability, transaction-related expenses and severance costs. Readers are cautioned that non-GAAP adjusted net income and EPS should not be construed as an alternative to comparable GAAP net income figures determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.
2Non-GAAP adjusted EBITDA is calculated as GAAP net income excluding the following cash and non-cash expenses: stock-based compensation expense, depreciation and amortization, net interest income/(expense), change in fair value of contingent liability, foreign exchange transaction gains/(losses), income tax provision, transaction-related expenses and severance costs. Non-GAAP adjusted EBITDA margin is calculated as non-GAAP adjusted EBITDA as a percentage of total revenue. Readers are cautioned that non-GAAP adjusted EBITDA should not be construed as an alternative to net income determined in accordance with U.S. GAAP as an indicator of performance, which is the most comparable measure under GAAP.
3Non-GAAP free cash flow, which is a non-GAAP financial measure, is defined as net cash provided by operating activities (as stated in our Condensed Consolidated Statements of Cash Flows), excluding transaction-related expenses and severance costs, reduced by capital expenditures. Readers are cautioned that free cash flow should not be construed as an alternative to net cash provided by operating activities determined in accordance with U.S. GAAP as an indicator of profitability, performance or liquidity, which is the most comparable measure under GAAP.
4Non-GAAP gross profit is defined as GAAP income from operations adjusted to exclude the effect of product development costs, sales and marketing costs, general and administrative costs and depreciation of software. Readers are cautioned that non-GAAP gross profit should not be construed as an alternative to income from operations determined in accordance with U.S. GAAP as an indicator of profitability or performance, which is the most comparable measure under GAAP.
Non-GAAP adjusted EBITDA, non-GAAP adjusted net income and EPS, non-GAAP free cash flow and non-GAAP gross profit are used by management as internal measures of profitability and performance. They have been included because the Company believes that the measures are used by certain investors to assess the Company’s financial performance before non-cash charges and certain costs that the Company does not believe are reflective of its underlying business.
Forward-Looking Statements
This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this news release that are not statements of historical fact and that concern future results from operations, financial position, economic conditions, product releases and any other statement that may be construed as a prediction of future performance or events, including financial projections and growth in various products are forward-looking statements that speak only as of the date made and which involve known and unknown risks, uncertainties and other factors which may, should one or more of these risks uncertainties or other factors materialize, cause actual results to differ materially from those expressed or implied by such statements. These factors and risks include:
a decline in general economic conditions nationally and internationally
decreased market demand for our products and services
market acceptance and brand awareness of our products
risks associated with indebtedness
the ability to comply with financial covenants in outstanding indebtedness
the ability to protect our intellectual property rights
risks associated with adoption of our platform among existing customers (including the impact of possible delays with major carrier and OEM partners in the roll out for mobile phones deploying our platform)
actual mobile device sales and sell-through where our platform is deployed is out of our control
risks associated with our ability to manage the business amid the COVID-19 pandemic and difficult macroeconomic environment
the impact of COVID-19 and the macroeconomic environment on our partners, digital advertising spend and consumer purchase behavior
the impact of COVID-19 and the macroeconomic environment on our results of operations
risks associated with new privacy laws, such as the European Union’s GDPR and similar laws which may require changes to our development and user interface for certain functionality of our mobile platform
risks associated with the activities of advertisers
risks associated with the timing of our platform software pushes to the embedded bases of carrier and OEM partners
risks associated with end user take rates of carrier and OEM software pushes which include our platform
new customer adoption and time to revenue with new carrier and OEM partners is subject to delays and factors out of our control
risks associated with fluctuations in the number of our platform slots across US carrier partners
required customization and technical integration which may slow down time to revenue notwithstanding the existence of a distribution agreement
risks associated with delays in major mobile phone launches, or the failure of such launches to achieve the scale
customer adoption that either we or the market may expect
the difficulty of extrapolating monthly demand to quarterly demand
the challenges, given the Company’s comparatively small size, to expand the combined Company’s global reach, accelerate growth and create a scalable, low-capex business model that drives EBITDA (as well as adjusted EBITDA)
ability as a smaller company to manage international operations
varying and often unpredictable levels of orders; the challenges inherent in technology development necessary to maintain the Company’s competitive advantage such as adherence to release schedules and the costs and time required for finalization and gaining market acceptance of new products
changes in economic conditions and market demand
rapid and complex changes occurring in the mobile marketplace
pricing and other activities by competitors
technology management risk as the Company needs to adapt to a rapidly developing mobile device marketplace, complex specifications of different carriers and the management of a complex technology platform given the Company’s relatively limited resources
system security risks and cyberattacks
risks and uncertainties associated with the integration of the acquisition of AdColony, including our ability to realize the anticipated benefits of the acquisition
risks and uncertainties associated with the integration of the acquisition of Fyber, including our ability to realize the anticipated benefits of the acquisition
challenges and risks associated with our rapid growth by acquisitions and resulting significant demands on our management and infrastructure
challenges and risks associated with our global operations and related business, political, regulatory, operational, financial, and economic risks as a result of our global operations
other risks including those described from time to time in Digital Turbine’s filings on Forms 10-K and 10-Q with the Securities and Exchange Commission (SEC), press releases and other communications.
You should not place undue reliance on these forward-looking statements. The Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Investor Relations Contact:
Brian Bartholomew
Digital Turbine, Inc.
[email protected]
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive Income / (Loss)
(Unaudited)
(in thousands, except per share amounts)
Three months ended December 31,
2022
2021
Net revenue
$ 162,310
$ 216,818
Costs of revenue and operating expenses
License fees and revenue share
73,370
109,053
Other direct costs of revenue
9,324
9,090
Product development
14,218
13,755
Sales and marketing
16,469
15,857
General and administrative
39,132
39,924
Total costs of revenue and operating expenses
152,513
187,679
Income from operations
9,797
29,139
Interest and other income / (expense), net
Change in fair value of contingent consideration
—
(18,200)
Interest expense, net
(6,913)
(2,195)
Foreign exchange transaction gain
17
2,122
Other income / (expense), net
8
(86)
Total interest and other income / (expense), net
(6,888)
(18,359)
Income before income taxes
2,909
10,780
Income tax provision / (benefit)
(1,153)
3,718
Net income
4,062
7,062
Less: net income attributable to non-controlling interest
43
48
Net income attributable to Digital Turbine, Inc.
4,019
7,014
Other comprehensive income / (loss)
Foreign currency translation adjustment
10,144
(8,389)
Comprehensive income / (loss)
14,206
(1,327)
Less: comprehensive income / (loss) attributable to non-controlling interest
59
(11)
Comprehensive income / (loss) attributable to Digital Turbine, Inc.
$ 14,147
$ (1,316)
Net income per common share
Basic
$ 0.04
$ 0.07
Diluted
$ 0.04
$ 0.07
Weighted-average common shares outstanding
Basic
99,108
96,548
Diluted
103,348
103,287
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)
December 31, 2022
March 31, 2022
(Unaudited)
ASSETS
Current assets
Cash
$ 79,307
$ 126,768
Restricted cash
554
394
Accounts receivable, net
231,001
263,139
Prepaid expenses and other current assets
31,912
20,570
Total current assets
342,774
410,871
Property and equipment, net
38,759
31,086
Right-of-use assets
10,973
15,439
Intangible assets, net
395,181
440,589
Goodwill
560,340
559,792
Other non-current assets
4,648
732
TOTAL ASSETS
$ 1,352,675
$ 1,458,509
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Accounts payable
$ 154,320
$ 167,858
Accrued license fees and revenue share
75,380
95,170
Accrued compensation
16,206
28,775
Acquisition purchase price liabilities
—
50,000
Current portion of debt
—
12,500
Other current liabilities
43,460
30,960
Total current liabilities
289,366
385,263
Long-term debt, net of debt issuance costs
422,310
520,785
Deferred tax liabilities, net
18,786
19,976
Other non-current liabilities
14,586
16,270
Total liabilities
745,048
942,294
Commitments and contingencies (Note 13)
Stockholders’ equity
Preferred stock
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1)
100
100
Common stock
$0.0001 par value: 200,000,000 shares authorized; 99,901,328 issued and 99,143,203 outstanding at December 31, 2022; 97,921,826 issued and 97,163,701 outstanding at March 31, 2022
10
10
Additional paid-in capital
810,994
745,661
Treasury stock (758,125 shares at December 31, 2022 and March 31, 2022)
(71)
(71)
Accumulated other comprehensive loss
(44,201)
(39,341)
Accumulated deficit
(161,183)
(191,788)
Total stockholders’ equity
605,649
514,571
Non-controlling interest
1,978
1,644
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 1,352,675
$ 1,458,509
Digital Turbine, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three months ended December 31,
2022
2021
Cash flows from operating activities:
Net income
$ 4,062
$ 7,062
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
20,137
15,965
Non-cash interest expense
211
202
Stock-based compensation expense
7,620
5,739
Change in fair value of contingent consideration
—
18,200
Right-of-use asset
(211)
1,319
Deferred income taxes
(266)
4,621
Foreign exchange transaction gain
(31)
(1,603)
(Increase) / decrease in assets:
Accounts receivable, gross
22,900
(42,680)
Allowance for doubtful accounts
760
443
Prepaid expenses and other current assets
(6,789)
(843)
Other non-current assets
(60)
(21)
Increase / (decrease) in liabilities:
Accounts payable
(16,484)
(13,209)
Accrued license fees and revenue share
(3,458)
27,995
Accrued compensation
1,978
12,188
Other current liabilities
2,378
(1,529)
Other non-current liabilities
458
1,859
Net cash provided by operating activities
33,205
35,708
Cash flows from investing activities
Equity investments
(4,000)
—
Business acquisitions, net of cash acquired
(2,708)
(136)
Capital expenditures
(5,668)
(5,281)
Net cash used in investing activities
(12,376)
(5,417)
Cash flows from financing activities
Proceeds from borrowings
18,000
102,779
Payment of debt issuance costs
(94)
(1,056)
Payment of deferred business acquisition consideration
—
(98,175)
Options and warrants exercised
156
659
Payment of withholding taxes for net share settlement of equity awards
(273)
(7,587)
Repayment of debt obligations
(43,000)
(6,367)
Net cash used in financing activities
(25,211)
(9,747)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
1,030
(1,321)
Net change in cash and cash equivalents and restricted cash
(3,352)
19,223
Cash and cash equivalents and restricted cash, beginning of period
83,213
96,217
Cash and cash equivalents and restricted cash, end of period
SAN DIEGO–(BUSINESS WIRE)–WD-40 Company (NASDAQ:WDFC), a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories and homes around the world, today reported financial results for its first fiscal quarter ended November 30, 2022.
Financial Highlights and Summary
Total net sales for the first quarter were $124.9 million, a decrease of 7 percent compared to the prior year fiscal quarter.
Translation of the Company’s foreign subsidiary results from their functional currencies to U.S. dollars had an unfavorable impact on sales for the first quarter. On a constant currency basis, total net sales would have been $134.4 million for the first quarter.
Net income for the first quarter was $14.0 million, a decrease of 25 percent from the prior year fiscal quarter.
Diluted earnings per share were $1.02 compared to $1.34 in the prior year fiscal quarter.
Gross margin percentage was 51.4 percent compared to 50.8 percent in the prior year fiscal quarter.
Selling, general and administrative expenses were up 4 percent in the first quarter to $40.0 million compared to the prior year fiscal quarter.
Advertising and sales promotion expenses were down 5 percent to $5.3 million compared to the prior year fiscal quarter.
“Today we are happy to report that in the first quarter gross margin improved sequentially by 400 basis points compared to the fourth quarter of fiscal year 2022,” said Steve Brass, WD-40 Company’s president and chief executive officer. “This is evidencing the positive impact of the gross margin restoration plan we put into place to combat the current inflationary environment.”
“While we saw topline growth in our Asia-Pacific and Americas segments, our EMEA segment reported sales that were softer than we would like to see. In EMEA, we’ve experienced significant headwinds from fluctuating currency exchange rates, a lower level of customer orders, weaker economic conditions, and a reduction in sales linked to our decision to suspend sales in Russia in 2022.”
“Though sales volumes were soft in some regions due to disruptions in the market linked to the pricing actions we recently executed, underlying volumes remain in line with our expectations. We shared with investors last quarter that we expected much of our topline growth in fiscal year 2023 would be weighted toward the second half of the fiscal year. We expect volume performance to improve in the second half of the fiscal year as price-related disruptions abate, and accordingly, today we are reiterating our guidance for the full fiscal year,” Brass concluded.
Net sales by segment as a percent of total net sales for the first quarter were as follows: for the Americas, 46 percent; for EMEA, 33 percent; for Asia-Pacific, 21 percent.
Net sales in the Americas increased 3 percent in the first quarter due primarily to higher sales of maintenance products in the United States, which increased 15 percent compared to the prior year fiscal quarter. Higher sales of maintenance products in the United States were primarily driven by strong sales of WD-40® Multi-Use Product, WD-40 Specialist®, and 3-IN-ONE® due to the impact of price increases, as well as increased production capacity, and improved availability as our supply chain continues to strengthen. These increases were significantly offset by a lower level of customer orders and promotional programs as customers adjust to the price increases, which resulted in decreased sales volumes. In Canada, sales remained constant period over period. Higher sales in the United States were mostly offset by lower sales of WD-40® Multi-Use Product in Latin America. Sales of maintenance products were down 31 percent in Latin America compared to the prior year fiscal quarter due primarily to the timing of marketing distributor orders from period to period.
Net sales in EMEA decreased 29 percent in the first quarter due to lower sales of maintenance products in both the EMEA direct and distributor markets, which decreased 22 percent and 43 percent, respectively. Changes in foreign currency exchange rates had an unfavorable impact on sales for the EMEA segment in the first quarter. On a constant currency basis, EMEA sales for the first quarter would have decreased by 15 percent compared to the prior fiscal year quarter. Lower sales of maintenance products in the EMEA direct markets were also due to a lower level of customer orders partially offset by the favorable impact of price increases. In addition, lower sales were due to reduced demand driven by weaker markets and economic conditions. Lower sales of maintenance products in the EMEA distributor markets were primarily attributable to the suspension in sales of our products to our marketing distributor customers in Russia and Belarus in March of 2022.
Net sales in Asia-Pacific increased 25 percent in the first quarter due to higher sales of maintenance products in the Asia-Pacific distributor markets and China, which increased 41 percent and 22 percent, respectively. In the Asia-Pacific distributor markets, higher sales of maintenance products were primarily attributed to successful promotional programs and the easing of COVID-19 lockdown measures in the region. Higher sales of maintenance products in China were primarily due to successful promotional programs as well as the timing of customer orders. In Australia, sales remained constant period over period. Changes in foreign currency exchange rates had an unfavorable impact on sales for the Asia-Pacific segment. On a constant currency basis, Asia-Pacific sales would have increased by 31 percent compared to the prior year fiscal quarter.
Net sales of maintenance products, which are considered the primary growth focus for the Company, decreased 8 percent in the first quarter when compared to the prior year fiscal quarter. This decrease was primarily due to lower sales of WD-40® Multi-Use Product, which decreased 12 percent compared to the prior fiscal year quarter. This decline was driven by lower sales volumes linked to recent pricing actions which resulted in a lower level of customer orders and promotional programs. Sales declines were also due to unfavorable changes in foreign currency exchanges rates and weaker economic conditions in some regions. These sales declines were partially offset by the sales price increases implemented over the last twelve months.
Net sales of homecare and cleaning products decreased 2 percent in the first quarter compared to the prior year fiscal quarter. The homecare and cleaning products, particularly those in the United States, are considered harvest brands providing healthy profit returns to the Company and are becoming a smaller part of the business as net sales of maintenance products grow in alignment with the Company’s strategic initiatives.
Dividend and Share Repurchase Update
As previously announced, WD-40 Company’s board of directors declared on Tuesday, December 13, 2022, a quarterly dividend of $0.83 per share reflecting an increase of more than 6 percent compared to the previous quarter’s dividend. The quarterly dividend is payable on January 31, 2023 to stockholders of record at the close of business on January 13, 2023.
On October 12, 2021, the Company’s board of directors approved a share buy-back plan that became effective on November 1, 2021. Under the plan, the Company is authorized to acquire up to $75.0 million of its outstanding shares through August 31, 2023. The timing and amount of repurchases will be based on terms and conditions acceptable to the Company and in compliance with applicable laws and regulations. During the period from November 1, 2021 through November 30, 2022, the Company repurchased 160,982 shares at a total cost of $33.2 million under this $75.0 million plan. During the first quarter, the Company repurchased 22,420 shares at a total cost of $4.1 million under this $75.0 million plan.
Reiterated Fiscal Year 2023 Guidance
The Company reiterated the following guidance for fiscal year 2023:
Net sales growth is projected to be between 5 and 10 percent with net sales expected to be between $545 million and $570 million.
Gross margin percentage for the full year is expected to be between 51 and 53 percent.
Advertising and promotion investments are projected to be between 5.0 and 6.0 percent of net sales.
The provision for income tax is expected to be around 22 percent.
Net income is projected to be between $69.0 million and $71.0 million.
Diluted earnings per share is expected to be between $5.09 and $5.24 based on an estimated 13.6 million weighted average shares outstanding.
This guidance is expressed in good faith and is based on management’s current view of anticipated results. Net sales guidance was calculated using recent foreign currency exchange rates and reflects currency headwinds of approximately 5 percent. This guidance does not include any future acquisitions or divestitures. Unanticipated inflationary headwinds, COVID-19 related impact, and other unforeseen events may further affect the Company’s financial results.
Webcast Information
As previously announced, WD-40 Company management will host a live webcast at approximately 5:00 p.m. ET / 2:00 p.m. PT today to discuss these results. Other forward-looking and material information may also be discussed during this call. Please visit http://investor.wd40company.com for more information and to view supporting materials.
About WD-40 Company
WD-40 Company is a global marketing organization dedicated to creating positive lasting memories by developing and selling products that solve problems in workshops, factories, and homes around the world. The Company owns a wide range of well-known brands that include maintenance products and homecare and cleaning products: WD-40® Multi-Use Product, WD-40 Specialist®, 3-IN-ONE®, GT85®, 2000 Flushes®, no vac®, 1001®, Spot Shot®, Lava®, Solvol®, X-14®, and Carpet Fresh®.
Headquartered in San Diego, California, USA, WD-40 Company recorded net sales of $518.8 million in fiscal year 2022 and its products are currently available in more than 176 countries and territories worldwide. WD-40 Company is traded on the NASDAQ Global Select Market under the ticker symbol “WDFC.” For additional information about WD-40 Company please visit http://www.wd40company.com.
Forward-Looking Statements
Except for the historical information contained herein, this press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect the Company’s current expectations with respect to currently available operating, financial and economic information. These forward-looking statements are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated in or implied by the forward-looking statements. These forward-looking statements are generally identified with words such as “believe,” “expect,” “intend,” “plan,” “could,” “may,” “aim,” “anticipate,” “target,” “estimate” and similar expressions.
Our forward-looking statements include, but are not limited to, discussions about future financial and operating results, including: growth expectations for maintenance products; expected levels of promotional and advertising spending; anticipated input costs for manufacturing and the costs associated with distribution of our products; plans for and success of product innovation; the impact of new product introductions on the growth of sales; anticipated results from product line extension sales; expected tax rates and the impact of tax legislation and regulatory action; the length and severity of the current COVID-19 pandemic and its impact on the global economy and our financial results; changes in the political conditions or relations between the United States and other nations; the impacts from inflationary trends and supply chain constraints; and forecasted foreign currency exchange rates and commodity prices.
The Company’s expectations, beliefs and forecasts are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that the Company’s expectations, beliefs or forecasts will be achieved or accomplished. All forward-looking statements reflect the Company’s expectations as of January 9, 2023. We undertake no obligation to revise or update any forward-looking statements.
Actual events or results may differ materially from those projected in forward-looking statements due to various factors, including, but not limited to, those identified in Part I―Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2022, and in the Company’s Quarterly Report on Form 10-Q for the period ended November 30, 2022, which the Company expects to file with the SEC on January 9, 2023.
Table Notes and General Definitions
(1)
The Company markets maintenance products under the WD-40®, GT85® and 3-IN-ONE® brand names. Currently included in the WD-40 brand are the WD-40® Multi-Use Product, WD-40 Specialist® and WD-40 BIKE® product lines.
(2)
The Company markets the following homecare and cleaning brands: X-14® automatic toilet bowl cleaners, 2000 Flushes® automatic toilet bowl cleaners, Carpet Fresh® and no vac® rug and room deodorizers, Spot Shot® aerosol and liquid carpet stain removers, 1001® household cleaners and rug and room deodorizers and Lava® and Solvol® heavy-duty hand cleaners.
(3)
The Americas segment consists of the U.S., Canada, and Latin America.
(4)
The EMEA segment consists of countries in Europe, the Middle East, Africa and India.
(5)
The Asia-Pacific segment consists of Australia, China and other countries in the Asia region.
(6)
Constant currency represents the translation of the current quarter results from the functional currencies of the Company’s subsidiaries to U.S. dollars using the exchange rate in effect for the corresponding period of the prior fiscal year.
WD-40 COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share amounts)
November 30,
August 31,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
36,882
$
37,843
Trade and other accounts receivable, net
87,285
89,930
Inventories
119,067
104,101
Other current assets
12,122
17,766
Total current assets
255,356
249,640
Property and equipment, net
65,658
65,977
Goodwill
95,277
95,180
Other intangible assets, net
5,362
5,588
Operating lease right-of-use assets
8,435
7,559
Deferred tax assets, net
629
679
Other assets
10,776
9,672
Total assets
$
441,493
$
434,295
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
31,826
$
32,852
Accrued liabilities
24,728
27,161
Accrued payroll and related expenses
14,251
11,583
Short-term borrowings
42,537
39,173
Income taxes payable
301
51
Total current liabilities
113,643
110,820
Long-term borrowings
107,902
107,139
Deferred tax liabilities, net
10,715
10,528
Long-term operating lease liabilities
6,629
5,999
Other long-term liabilities
11,234
11,185
Total liabilities
250,123
245,671
Commitments and Contingencies
Stockholders’ equity:
Common stock ― authorized 36,000,000 shares, $0.001 par value; 19,896,477 and 19,888,807 shares issued at November 30, 2022 and August 31, 2022, respectively; and 13,587,596 and 13,602,346 shares outstanding at November 30, 2022 and August 31, 2022, respectively
20
20
Additional paid-in capital
168,092
165,973
Retained earnings
459,439
456,076
Accumulated other comprehensive loss
(34,873
)
(36,209
)
Common stock held in treasury, at cost ― 6,308,881 and 6,286,461 shares at November 30, 2022 and August 31, 2022, respectively
(401,308
)
(397,236
)
Total stockholders’ equity
191,370
188,624
Total liabilities and stockholders’ equity
$
441,493
$
434,295
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
Three Months Ended November 30,
2022
2021
Net sales
$
124,893
$
134,746
Cost of products sold
60,638
66,276
Gross profit
64,255
68,470
Operating expenses:
Selling, general and administrative
39,984
38,423
Advertising and sales promotion
5,339
5,624
Amortization of definite-lived intangible assets
253
363
Total operating expenses
45,576
44,410
Income from operations
18,679
24,060
Other income (expense):
Interest income
44
25
Interest expense
(1,169
)
(620
)
Other income (expense), net
150
(329
)
Income before income taxes
17,704
23,136
Provision for income taxes
3,707
4,581
Net income
$
13,997
$
18,555
Earnings per common share:
Basic
$
1.03
$
1.35
Diluted
$
1.02
$
1.34
Shares used in per share calculations:
Basic
13,590
13,716
Diluted
13,609
13,752
WD-40 COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Three Months Ended November 30,
2022
2021
Operating activities:
Net income
$
13,997
$
18,555
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
1,896
1,987
Net gains on sales and disposals of property and equipment
Record SBA 7(a) Loan Fundings of $223.0 Million Increased by 36.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} in the Third Quarter of 2022 Over the Same Period Last Year
Raised Full Year 2022 SBA 7(a) Loan Funding Guidance to Approximately $775 Million
BOCA RATON, Fla., Nov. 07, 2022 (GLOBE NEWSWIRE) — Newtek Business Services Corp. (“Newtek” or the “Company”) (Nasdaq: NEWT), an internally managed business development company (“BDC”), announced today its financial and operating results for three and nine months ended September 30, 2022.
Third Quarter 2022 Financial Highlights
Total investment income of $23.6 million for the three months ended September 30, 2022; an increase of 90.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} compared to total investment income of $12.4 million for the three months ended September 30, 2021.
Net investment income (loss) of $0.2 million, or $0.01 per share, for the three months ended September 30, 2022, which represents a 103.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase, on a per share basis, compared to net investment income (loss) of $(6.7) million, or $(0.30) per share, for the three months ended September 30, 2021.
Adjusted net investment income (“ANII”)1 of $15.0 million, or $0.62 per share, for the three months ended September 30, 2022; an increase of 10.7{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, on a per share basis, compared to ANII of $12.6 million, or $0.56 per share, for the three months ended September 30, 2021.
Debt-to-equity ratio of 1.41x at September 30, 2022; proforma debt-to-equity ratio was 1.26x after taking into account the sales of government-guaranteed portions of SBA 7(a) loans prior to September 30, 2022, which sales settled subsequent to the balance sheet date.
Total investment portfolio increased by 10.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to $785.6 million at September 30, 2022, from $712.5 million at September 30, 2021.
Net asset value (“NAV”) of $391.8 million, or $16.04 per share, at September 30, 2022 compared to NAV of $16.23 per share at September 30, 2021.
Financial Highlights For the Nine Months Ended September 30, 2022
Total investment income of $63.2 million for the nine months ended September 30, 2022; a decrease of (24.5){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over total investment income of $83.7 million for the nine months ended September 30, 2021 which included $50.0 million of fee income from the Paycheck Protection Program (“PPP”), which, as previously disclosed, is not recurring.
Net investment income (loss) of $(1.1) million, or $(0.04) per share, for the nine months ended September 30, 2022, which represents a (103.7){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} decrease, on a per share basis, compared to net investment income (loss) of $24.0 million, or $1.07 per share, for the nine months ended September 30, 2021, which included $50.0 million of fee income from the PPP which, as previously disclosed, is not recurring.
ANII1 of $50.3 million, or $2.08 per share, for the nine months ended September 30, 2022; a decrease of (26.0){ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, on a per share basis, compared to ANII of $63.1 million, or $2.81 per share, for the nine months ended September 30, 2021, which included $50.0 million of fee income from the PPP which, as previously disclosed, is not recurring.
Additional Third Quarter Highlights
On September 21, 2022, the Company announced its future rebranding strategy in anticipation of the acquisition of the National Bank of New York City (“NBNYC,” and the “Acquisition”), which is pending approval of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of Currency and the U.S. Small Business Administration (“Regulatory Approvals”) and satisfaction of closing conditions.
Upon receipt of the pending Regulatory Approvals and the close of the Acquisition, Newtek plans to change its name to “NewtekOne®” and to rename NBNYC, the 59-year-old nationally chartered bank, “Newtek Bank, National Association.”
On September 7, 2022, the Company closed its twelfth small business loan securitization, with the sale of $116.2 million of Unguaranteed SBA 7(a) Loan-Backed Notes, Series 2022-1, consisting of $95.4 million of Class A Notes and $20.8 million of Class B Notes, rated“A- (sf)” and “BBB- (sf)”, respectively, by S&P Global Ratings.
2022 Dividend Declarations & Payments
On September 30, 2022, the Company paid a third quarter 2022 cash dividend of $0.65 per share to shareholders of record as of September 20, 2022.
On September 28, 2022, the Company forecasted a fourth quarter 2022 cash distribution of $0.70 per share, which includes a spillover dividend of Company retained earnings in anticipation of the Company converting from a BDC and discontinuing its election to be regulated under the Investment Company Act of 1940, subject to Regulatory Approvals of the pending Acquisition and other conditions described in the Company’s proxy statement filed with the SEC on May 2, 2022, after which the Company would no longer qualify as a regulated investment company (“RIC”) for federal income tax purposes and will no longer qualify for accounting treatment as an investment company. This dividend is subject to Board approval.2
If this fourth quarter 2022 distribution is declared by the Board, the Company expects to pay approximately $2.75 per share in cash dividends and distributions to shareholders in 2022.
Lending Highlights
Newtek Small Business Finance, LLC (“NSBF”) funded a record $223.0 million of SBA 7(a) loans during the three months ended September 30, 2022; a 36.0{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the $163.9 million of SBA 7(a) loans funded for the three months ended September 30, 2021.
NSBF funded a record $586.9 million in SBA 7(a) loans for the nine months ended September 30, 2022, which represents an 61.9{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $362.6 million SBA 7(a) loan fundings for the nine months ended September 30, 2021.
NSBF funded $64.1 million SBA 7(a) loans in October 2022.
From January 1, 2022 through October 31, 2022, NSBF funded a record $650.9 million of SBA 7(a) loans; a 68.3{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $386.8 million of SBA 7(a) loans for the same period last year.
NSBF increased its full year 2022 SBA 7(a) loan funding guidance to approximately $775 million, which would represent a 38.2{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $560.6 million of SBA 7(a) loans funded in 2021.
Newtek Business Lending (“NBL”), a wholly owned portfolio company, closed $101.0 million of SBA 504 loans year-to-date through October 31, 2022; an increase of 22.6{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} over $82.4 million of SBA 504 loans closed during the same period in 2021.
NBL forecasts closing approximately $150 million of SBA 504 loans for the full year 2022, which would represent a 66.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over $90.1 million of SBA 504 closings in 2021.
Barry Sloane, Chairman, President and Chief Executive Officer said, “We are extremely proud of our results for the third quarter and first nine months of 2022. While 2022 has been challenging, due to the preparation for the repositioning of the Company in anticipation of converting to a bank holding company through the pending Acquisition of NBNYC, which remains subject to Regulatory Approvals; an increase in interest rates; and the impacts of inflation on our operating businesses as well as those of our clients, we are thrilled with the results we have been able to produce. We believe net investment income of $0.01 per share for the third quarter of 2022 exceeds analysts’ consensus estimates of $(0.05) per share, and we believe our ANII for the third quarter 2022 of $0.62 per share, exceeds analysts’ consensus estimates of $0.58 per share. We are pleased to have been able to beat analysts consensus estimates. In addition, it is important to remind our investor base that our results for the nine months ended September 30, 2022 compared to the same period in 2021, do not include the benefit of the extraordinary performance the Company had in funding loans under the PPP, which PPP fee income is non-recurring.”
Commenting on Newtek’s SBA 7(a) loan program Mr. Sloane said, “We had record SBA 7(a) loan fundings in the third quarter of 2022, which followed record SBA 7(a) fundings in the second quarter of 2022. In fact, year-to-date through October 31, 2022, we have funded a record $650.9 million in SBA 7(a) loans which represents a 68{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the $386.3 million SBA 7(a) loans funded for the same period last year. Furthermore, from January 1, 2022 through October 31, 2022, we funded a total of 1,037 SBA 7(a) loan units, which represents an 86{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} increase over the 557 SBA 7(a) loan units for the same period last year. With our strong SBA 7(a) funding performance thus far this year, coupled with the fact that there is less than two months left in 2022, we are raising our full year 2022 SBA 7(a) loan funding guidance to $775 million. In addition, with these record fundings, it is important to note that that the Company has been mindful in tightening its credit standards as evidenced by the weighted average FICO score in NSBF’s most recent securitization, which equaled 725 on its guarantors versus a weighted average FICO score of 704 in our SBA 7(a) loan portfolio at December 31, 2021.”
Mr. Sloane continued, “The Company also anticipates NBL closing a record number of SBA 504 loans in the fourth quarter of 2022 and achieving record SBA 504 loan closings of $150 million for the full year of 2022. The performance of NBL’s SBA 504 and non-conforming conventional loan program demonstrates the ability to acquire, assemble, underwrite, fund, and manage loans of all sizes, types and credit quality among the Company’s independent business owner client base. NBL’s SBA 504 loan program, which has originated $388.4 million of SBA 504 loans since 2017, has not experienced any charge offs or defaults In addition, we have originated $132.5 million in non-conforming conventional loans since the inception of the program in 2019, and have not experienced any charge offs or defaults. Furthermore, during the third quarter of 2022, the Company entered into a new joint venture agreement with a $15 billion asset management company to provide up to $100 million of equity capital to fund non-conforming conventional loans. Additionally, the joint venture is preparing to close on a $150 million leverage facility from a well-known investment bank. We believe we will be able to fund $600 million of non-conforming conventional loans in 2023 and over $1.0 billion non-conforming conventional loans in 2024, which will be part of our forecasts going forward.”
Mr. Sloane further commented, “We also are pleased that, despite turbulent market conditions, our wholly-owned controlled portfolio companies, Newtek Merchant Solutions and Newtek Technology Solutions, are expected to generate approximately a combined $20 million of EBITDA in 2023. The Company, during this transformative period of anticipating conversion from a BDC to a bank holding company, has been limited in its ability to forecast future earnings and dividends beyond 2022 due to the pending Acquisition of NBNYC. We are reaffirming our forecast for a fourth quarter 2022 distribution of $0.70 per share, which would bring total cash dividends and distributions for 2022 to $2.75 per share. The fourth quarter 2022 forecasted distribution of $0.70 per share, which includes a spillover dividend of Company retained earnings in anticipation of the Company converting from a BDC, is expected to be paid on or about December 31, 2022.”
Discussing rising interest rates, Mr. Sloane concluded, “We have been asked regularly how increases in interest rates affect our business model. We believe that anyone stating that rising interest rates is good for business is not giving the full picture. In our case, we believe that we are well positioned as our floating rate SBA 7(a) loan portfolio primarily adjusts at Prime plus 275 basis points without a cap; moreover, new SBA 7(a) loan originations will be at Prime plus 300 basis points in accordance with new SBA rules. Prime is currently at 7.00{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550}, however based on the SOFR futures market, we believe Prime will increase by an additional 50 basis points in December, and as such it’s likely our SBA 7(a) portfolio will adjust to a 10{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} to 10.5{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} coupon in January 2023. We believe converting to a bank holding company and owning a bank will carve out an attractive future for us as it will enable us to finance our growth with core deposits. We look forward to the possible Regulatory Approvals of the Acquisition in the fourth quarter of 2022. Once we have a clear path to converting to a bank holding company, we anticipate forecasting earnings as a bank holding company for the next 24 months.”
Third Quarter 2022 Conference Call and Webcast
A conference call to discuss third quarter 2022 results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer, and Nicholas Leger, Chief Accounting Officer, tomorrow, Tuesday, November 8, 2022 at 8:30 a.m. ET.
Please note, to attend the conference call or webcast, participants should register online at http://investor.newtekbusinessservices.com/events-and-presentations. To receive a dial-in number, participants are requested to register at a minimum 15 minutes before the start of the call. The corresponding presentation will be available in the ‘Events & Presentations’ section of the Investor Relations portion of Newtek’s website at http://investor.newtekbusinessservices.com/events-and-presentations. A replay of the call with the corresponding presentation will be available on Newtek’s website shortly following the live presentation and will be available for a period of 90 days.
1Use of Non-GAAP Financial Measures – Newtek Business Services Corp. and Subsidiaries
In evaluating its business, Newtek considers and uses ANII as a measure of its operating performance. ANII includes short-term capital gains from the sale of the guaranteed portions of SBA 7(a) loans and conventional loans, and beginning in 2016, capital gain distributions from controlled portfolio companies, which are reoccurring events. The Company defines ANII as net investment income (loss) plus net realized gains recognized from the sale of guaranteed portions of SBA 7(a) loan investments, less realized losses on non-affiliate investments, plus the net realized gains on controlled investments, plus or minus the change in fair value of contingent consideration liabilities, plus loss on extinguishment of debt, plus or minus an adjustment for gains or losses on derivative transactions.
We do not designate derivatives as hedges to qualify for hedge accounting and therefore any net payments under, or fluctuations in the fair value of, our derivatives are recognized currently in our GAAP income statement. However, fluctuations in the fair value of the related assets are not included in our income statement. We consider the gain or loss on our hedging positions related to assets that we still own as of the reporting date to be “open hedging positions.” While recognized for GAAP purposes, we exclude the results on the hedges from ANII until the related asset is sold and/or the hedge position is “closed,” whereupon they would then be included in ANII in that period. These are reflected as “adjustment for realized gain/(loss) on derivatives” for purposes of computing ANII for the period. Management believes that excluding these specifically identified gains and losses associated with the open hedging positions adjusts for timing differences between when we recognize changes in the fair values of our assets and changes in the fair value of the derivatives used to hedge such assets.
The term ANII is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. ANII has limitations as an analytical tool and, when assessing the Company’s operating performance, investors should not consider ANII in isolation, or as a substitute for net investment income, or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, ANII does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than Newtek, limiting their usefulness as comparative tools. The Company compensates for these limitations by relying primarily on its GAAP results supplemented by ANII. Reconciliation tables showing the adjustments made to net investment income to determine NII are attached to this press release.
2 Note Regarding Dividend Payments
Amount and timing of dividends, if any, remain subject to the discretion of the Company’s Board of Directors. The Company’s Board of Directors expects that it will maintain its status as a BDC and regulated investment company (“RIC”) in the near term, and therefore expects to maintain a dividend policy with the objective of making quarterly distributions in an amount that approximates 90 – 100{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} of the Company’s annual taxable income. The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon its taxable income for the full year and distributions paid for the full year.
Newtek Business Services Corp., Your Business Solutions Company®, is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business and financial solutions under the Newtek® brand to the small- and medium-sized business (“SMB”) market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.
Newtek’s and its portfolio companies’ products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.
Newtek® and Your Business Solutions Company®, are registered trademarks of Newtek Business Services Corp.
Note Regarding Forward Looking Statements This press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or similar expressions are intended to identify forward-looking statements. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, include our ability to close the pending acquisition of the National Bank of New York City (the “Transaction”), obtain required regulatory approvals for the pending Transaction, the timing of the closing of the Transaction, the timing of the Company’s discontinuance from regulation as a BDC under the 1940 Act, projections concerning or considering the pending Transaction, the timing of our our ability to originate new investments, achieve certain margins and levels of profitability, the availability of additional capital and the ability to maintain certain debt to asset ratios, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions, which could cause Newtek’s actual results to differ from management’s current expectations, are contained in Newtek’s filings with the Securities and Exchange Commission and available through http://www.sec.gov/.Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (In Thousands, except for Per Share Data)
September 30, 2022
December 31, 2021
ASSETS
(Unaudited)
Investments, at fair value
SBA unguaranteed non-affiliate investments (cost of $502,400 and $431,970, respectively; includes $438,045 and $344,266, respectively, related to securitization trusts)
$
488,376
$
424,417
SBA guaranteed non-affiliate investments (cost of $21,648 and $65,728, respectively)
22,949
72,970
Controlled investments (cost of $168,237 and $157,289, respectively)
272,928
260,398
Non-control investments (cost of $1,360 and $1,000, respectively)
1,360
1,000
Total investments at fair value
785,613
758,785
Cash
7,355
2,397
Restricted cash
74,777
184,463
Broker receivable
71,634
44,537
Due from related parties
947
4,395
Servicing assets, at fair value
33,530
28,008
Right of use assets
6,381
7,310
Other assets
26,298
26,666
Total assets
$
1,006,535
$
1,056,561
LIABILITIES AND NET ASSETS
Liabilities:
Bank notes payable
$
67,500
$
50,000
2024 Notes (par: $38,250 and $38,250 as of September 30, 2022 and December 31, 2021)
37,847
37,679
2025 6.85{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Notes (par: $0 and $15,000 as of September 30, 2022 and December 31, 2021)
—
14,545
2025 5.00{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} Notes (par: $30,000 and $0 as of September 30, 2022 and December 31, 2021)
29,246
—
2026 Notes (par: $115,000 and $115,000 as of September 30, 2022 and December 31, 2021)
112,666
112,128
Notes payable – Securitization trusts (par: $302,253 and $249,750 as of September 30, 2022 and December 31, 2021)
298,125
246,250
Notes payable – related parties
150
11,450
Due to related parties
1,849
1,490
Lease liabilities
7,945
9,056
Deferred tax liabilities
12,908
12,733
Due to participants
34,660
146,225
Derivative instruments
—
183
Accounts payable, accrued expenses and other liabilities
11,840
10,935
Total liabilities
614,736
652,674
Commitment and contingencies
Net assets:
Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding)
—
—
Common stock (par value $0.02 per share; authorized 200,000 shares, 24,425 and 24,159 issued and outstanding, respectively)
485
483
Additional paid-in capital
370,703
367,663
Accumulated undistributed earnings
20,611
35,741
Total net assets
391,799
403,887
Total liabilities and net assets
$
1,006,535
$
1,056,561
Net asset value per common share
$
16.04
$
16.72
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In Thousands, except for Per Share Data)
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Investment income
From non-affiliate investments:
Interest income – PPP loans
$
—
$
269
$
—
$
49,989
Interest income – SBA 7(a) loans
8,804
7,131
23,915
19,328
Servicing income
3,575
2,819
9,931
8,346
Other income
2,552
1,446
6,499
3,829
Total investment income from non-affiliate investments
14,931
11,665
40,345
81,492
From non-control investments:
Interest income
—
126
—
374
Dividend income
19
23
62
70
Total investment income from non-control investments
19
149
62
444
From controlled investments:
Interest income
753
594
2,087
1,703
Dividend income
7,205
—
19,989
51
Other income
672
—
672
—
Total investment income from controlled investments
8,630
594
22,748
1,754
Total investment income
23,580
12,408
63,155
83,690
Expenses:
Salaries and benefits
4,772
2,351
14,380
12,727
Interest
6,917
5,177
17,412
15,217
Depreciation and amortization
58
72
181
236
Professional fees
1,509
1,418
4,322
3,465
Origination and loan processing
2,866
4,586
7,202
10,555
Origination and loan processing – related party
5,430
3,177
14,698
10,830
Loss on extinguishment of debt
—
—
417
955
Other general and administrative costs
1,823
2,322
5,619
5,663
Total expenses
23,375
19,103
64,231
59,648
Net investment (loss) income
205
(6,695
)
(1,076
)
24,042
Net realized and unrealized gains (losses):
Net realized gain on non-affiliate investments – SBA 7(a) loans
14,767
19,272
49,953
38,079
Net realized gain (loss) on derivative transactions
—
(268
)
445
(268
)
Net unrealized appreciation (depreciation) on SBA guaranteed non-affiliate investments
(297
)
123
(5,942
)
2,533
Net unrealized appreciation (depreciation) on SBA unguaranteed non-affiliate investments
(3,611
)
998
(6,473
)
2,583
Net unrealized appreciation on controlled investments
2,040
7,305
1,582
1,760
Change in deferred taxes
(118
)
(2,843
)
(175
)
(2,120
)
Net unrealized appreciation (depreciation) on non-control investments
—
(3
)
—
521
Net unrealized appreciation on derivative transactions
—
341
183
304
Net unrealized depreciation on servicing assets
(1,624
)
(1,616
)
(3,964
)
(3,322
)
Net realized and unrealized gains
$
11,157
$
23,309
$
35,609
$
40,070
Net increase in net assets resulting from operations
$
11,362
$
16,614
$
34,533
$
64,112
Net increase in net assets resulting from operations per share
$
0.47
$
0.74
$
1.43
$
2.85
Net investment (loss) income per share
$
0.01
$
(0.30
)
$
(0.04
)
$
1.07
Dividends and distributions declared per common share
$
0.65
$
0.90
$
2.05
$
2.10
Weighted average number of shares outstanding
24,299
22,541
24,204
22,468
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES- ADJUSTED NET INVESTMENT INCOME RECONCILIATION:
Nine months ended
Nine months ended
(in thousands, except per share amounts)
September 30, 2022
Per share
September 30, 2021
Per share
Net investment income (loss)
$
(1,076
)
$
(0.04
)
$
24,042
$
1.07
Net realized gain on non-affiliate investments – SBA 7(a) loans
49,953
2.06
38,079
1.69
Adjustment for realized gain on derivatives (1)
1,010
0.04
(7
)
—
Loss on debt extinguishment
417
0.02
955
0.04
Adjusted Net investment income
$
50,304
$
2.08
$
63,069
$
2.81
Note: Amounts may not foot due to rounding
(1) The following is a reconciliation of GAAP net realized gain/(loss) on derivative transactions to our adjustment for realized gain/(loss) on derivatives on closed transactions presented in the computation of ANII in the preceding tables:
Nine months ended
Nine months ended
(in thousands, except per share amounts)
September 30, 2022
Per share
September 30, 2021
Per share
Net realized gain on derivatives
$
445
$
0.02
$
(268
)
$
(0.01
)
Hedging realized result on open hedging positions
—
—
261
0.01
Hedging realized adjustment on hedging positions closed during current period
565
0.02
—
—
Adjustment for realized gain on derivatives
$
1,010
$
0.04
$
(7
)
$
—
Note: Amounts may not foot due to rounding
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES- ADJUSTED NET INVESTMENT INCOME RECONCILIATION:
Three months ended
Three months ended
(in thousands, except per share amounts)
September 30, 2022
Per share
September 30, 2021
Per share
Net investment income (loss)
205
0.01
$
(6,695
)
$
(0.30
)
Net realized gain on non-affiliate investments – SBA 7(a) loans
14,767
0.61
19,272
0.85
Adjustment for realized gain on derivatives (1)
—
—
(7
)
—
Adjusted Net investment income
$
14,972
$
0.62
$
12,570
$
0.56
Note: Amounts may not foot due to rounding
(1) The following is a reconciliation of GAAP net realized gain/(loss) on derivative transactions to our adjustment for realized gain/(loss) on derivatives on closed transactions presented in the computation of ANII in the preceding table:
Three months ended
Three months ended
(in thousands, except per share amounts)
September 30, 2022
Per share
September 30, 2021
Per share
Net realized gain on derivatives
$
—
$
—
$
(268
)
$
(0.01
)
Hedging realized result on open hedging positions
—
—
261
0.01
Adjustment for realized gain on derivatives
$
—
$
—
$
(7
)
$
—
Note: Amounts may not foot due to rounding
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES DEBT-TO-EQUITY RATIO – ACTUAL AT SEPTEMBER 30, 2022
(in thousands):
Actual Debt-to-Equity Ratio at September 30, 2022
Total senior debt
$
553,153
Total equity
$
391,799
Debt-to-equity ratio – actual
1.41x
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES DEBT-TO-EQUITY RATIO – PROFORMA AT SEPTEMBER 30, 2022
(in thousands):
Broker receivable, including premium income receivable
$
71,634
Less: realized gain on sale included in broker receivable
(5,893
)
Broker receivable
65,741
90{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} advance rate on SBA guaranteed non-affiliate portions of loans sold, not settled
$
59,167
Proforma debt adjustments at September 30, 2022:
Total senior debt
$
553,153
Proforma adjustment for broker receivable
(59,167
)
Total proforma debt
$
493,986
Proforma Debt-to-Equity ratio at September 30, 2022:
NEW YORK, November 04, 2022–(Company WIRE)–FuboTV Inc. (NYSE: FUBO), the main sports-initial dwell Tv streaming system, today introduced its economic outcomes for the third quarter ended September 30, 2022.
Earnings and subscriber advancement for Fubo’s international streaming small business was solid all through the quarter, with North The usa (NA) revenue and subscriber growth coming in ahead of forecast. FuboTV closed the quarter with $219.2 million in profits for NA, an maximize of 40{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over-year, though advertisement income was $22.5 million, up 21{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} year-over 12 months. NA compensated subscribers achieved a file superior of 1,231,000, an boost of 31{ac23b82de22bd478cde2a3afa9e55fd5f696f5668b46466ac4c8be2ee1b69550} 12 months-more than-yr.
In the Relaxation of Entire world (ROW), the enterprise delivered $5.8 million in revenue and 358,000 complete paid out subscribers. ROW incorporates Molotov, the French are living Tv streaming service acquired by FuboTV in December 2021.
FuboTV ended the quarter with $307.4 million in cash and hard cash equivalents, limited dollars and limited-expression investments, and is self-confident in its existing liquidity situation. Furthermore, FuboTV attained a sequential improvement in Working Money Move and year-in excess of-year advancement in Modified EBITDA (AEBITDA) Margin.
Entire 3rd quarter 2022 results are comprehensive in FuboTV’s shareholder letter accessible on the company’s IR web-site.
“Our third quarter was marked by meaningful advancements against our extensive-expression approach of continued expansion with improved profitability alongside the way,” claimed David Gandler, co-founder and CEO, FuboTV. “Revenue and subscriber progress for our world streaming organization was reliable with North American subscribers achieving a file higher of 1,231,000. As our high quality presenting proceeds to drive an at any time increased quantity of consumers to our platform, our differentiated product or service knowledge and broad information portfolio maintain them engaged – with this quarter symbolizing an all-time minimal for subscriber churn. We are a lot more bullish than ever on our model as individuals gravitate in the direction of aggregated streaming platforms that present popular information presented to them by way of a personalized and personalized working experience.”
“We’re really pleased with Fubo’s third quarter performance demonstrated by double-digit calendar year-about-calendar year advancement in North The us across numerous of our KPIs: subscribers, total income and ad earnings,” explained Edgar Bronfman Jr., government chairman, FuboTV. “As consumers keep on to grow to be disillusioned with the several costly and material-minimal streaming products and services in the sector, and people streaming solutions switch to other monetization levers like marketing, we are enthusiastic about our one of a kind positioning in the market. We think our twin membership and marketing product gives value for shareholders although our aggregation of premium athletics, news and entertainment articles is an affordable solution for individuals.”
Reside Webcast
Gandler and CFO John Janedis will host a dwell convention phone right now at 8:30 a.m. ET to deliver temporary remarks followed by Q&A. The reside webcast will be accessible on the Functions page of FuboTV’s trader relations internet site. An archived replay will be offered on FuboTV’s web site subsequent the contact. Members really should be a part of the call 10 minutes in progress to make certain that they are connected prior to the party.
About FuboTV
With a mission to make the world’s main world live Television streaming system with the greatest breadth of high quality content material and interactivity, FuboTV Inc. (NYSE: FUBO) aims to transcend the industry’s present Television product. FuboTV Inc. operates in the U.S., Canada, France and Spain.
Leveraging its proprietary data and technological know-how system optimized for are living Tv and sports viewership, FuboTV Inc. aims to turn passive viewers into energetic members and determine a new classification of interactive athletics and enjoyment television. In the U.S., the firm’s sporting activities-1st cable Television substitution products, FuboTV, aggregates a lot more than 125 live sports, information and enjoyment networks and is the only stay Tv set streaming platform with each and every Nielsen-rated sports channel (resource: Nielsen Full Viewers, 2021). Subscribers can engage with the articles they are watching on FuboTV via interactive item options like FanView, an in-video clip knowledge showcasing stay sport, staff and player stats and scores in genuine time. Fubo was also the to start with virtual MVPD to enable simultaneous viewing on up to four screens (Multiview on Apple Tv set) as effectively the initially to stream in 4K HDR.
Ranked #1 in Client Fulfillment among the Stay Television set Streaming Companies by J.D. Energy (2022), FuboTV has been called “a force in sporting activities streaming” by Forbes, “the very best streaming company for athletics aficionados” by Tom’s Information and was heralded by CNET for its “ease of use.” Understand extra at https://fubo.television
Vital General performance Metrics and Non-GAAP Measures
Paid out Subscribers
We consider the range of paid subscribers is a suitable evaluate to gauge the dimensions of our person foundation. Paid subscribers is described as complete subscribers that have accomplished registration with FuboTV, have activated a payment strategy (only demonstrates one shelling out person for every program), from which FuboTV has gathered payment from in the thirty day period ending the appropriate interval. Users who are on a no cost (trial) interval are not involved in this metric.
Modified EBITDA
Modified EBITDA is a non-GAAP measure described as Internet Decline, adjusted for depreciation and amortization, stock-primarily based compensation, income tax advantage, impairment of intangibles, other costs, and just one-time non-income fees.
Modified EBITDA Margin
Altered EBITDA Margin is a non-GAAP measure described as Modified EBITDA divided by revenue.
Cautionary Notice Pertaining to Forward-On the lookout Statements
This press release incorporates ahead-searching statements of FuboTV Inc. (“FuboTV”) that include considerable pitfalls and uncertainties. All statements contained in this push launch that do not relate to matters of historical truth are forward-on the lookout statements within the indicating of The Private Securities Litigation Reform Act of 1995, which includes statements pertaining to our company technique and strategies, current market option, the continued shift in consumer actions and advertising and marketing developments, our financial ailment, and our predicted financial performance. The terms “could,” “will,” “plan,” “intend,” “anticipate,” “approximate,” “hope,” “possible,” “consider” or the damaging of these terms or other identical expressions are supposed to determine ahead-seeking statements, while not all forward-on the lookout statements incorporate these identifying words and phrases. Precise final results or activities could vary materially from the ideas, intentions and expectations disclosed in the ahead-wanting statements that FuboTV tends to make owing to a number of critical things, which includes but not restricted to threats connected to our pursuit and engagement in acquisitions our true functioning success might differ appreciably from our assistance pitfalls associated to FuboTV’s access to cash and fundraising potential clients to fund its ongoing operations and aid its planned growth dangers linked to diverting management’s interest from FuboTV’s ongoing company operations to tackle integration and fundraising initiatives the limits imposed by information vendors on our distribution and promoting of our merchandise and companies our reliance on 3rd bash platforms to operate specified areas of our enterprise risks associated to our technological innovation, as very well as cybersecurity and details privateness-similar hazards our capability to reach or retain profitability our revenue is issue to seasonality our functioning benefits may perhaps fluctuate our capability to entice and keep subscribers we might not be capable to license streaming material or other legal rights on acceptable phrases pitfalls related to the prior procedure and dissolution of our wagering business enterprise hazards connected to the problems in measuring critical metrics associated to our company dangers related to the extremely aggressive nature of our field risks connected to ongoing or future authorized proceedings and other threats, including the outcomes of field, industry, financial, political or regulatory situations, long term trade and curiosity rates, and changes in tax and other guidelines, rules, charges and policies, together with the effects of COVID-19 on the broader industry. More pitfalls that could result in actual results to vary materially from those people issues expressed in or implied by such ahead-hunting statements are reviewed in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2022 submitted with the Securities and Exchange Commission (“SEC”) on August 8, 2022, our Quarterly Report on Form 10-Q for the quarterly period of time finished September 30, 2022 to be submitted with the SEC, and our other periodic filings with the SEC. We motivate you to read this kind of challenges in detail. The ahead-hunting statements in this letter signify FuboTV’s views as of the date of this press release. FuboTV anticipates that subsequent activities and developments will induce its views to improve. On the other hand, whilst it may possibly elect to update these forward-looking statements at some place in the foreseeable future, it exclusively disclaims any obligation to do so. You should really, therefore, not rely on these ahead-looking statements as representing FuboTV’s views as of any date subsequent to the day of this press launch.
BEIJING, July 20, 2022 /PRNewswire/ — TAL Training Group (“TAL” or the “Corporation”) (NYSE: TAL), a sensible mastering solutions service provider in China, right now declared that it will release its unaudited financial outcomes for the to start with quarter of fiscal 12 months 2023 ended May possibly 31, 2022, prior to the industry opens on Friday, July 29, 2022.
The Company will host a corresponding convention call and reside webcast at 8:00 a.m. U.S. Jap Time (8:00 p.m. Beijing Time) on Friday, July 29, 2022.
Upon registration, you will obtain an e mail containing participant dial-in figures and special Direct Party Passcode. This facts will allow for you to achieve instant accessibility to the phone. Members might pre-register at any time, such as up to and after the call start out time.
A reside and archived webcast of the meeting contact will be obtainable on the Trader Relations portion of TAL’s site at https://ir.100tal.com/.
About TAL Schooling Group
TAL Training Team is a good learning methods company in China. The acronym “TAL” stands for “Tomorrow Advancing Existence”, which displays our eyesight to boost top discovering alternatives for learners by means of both equally large-high quality instructing and material, as effectively as main edge software of technological know-how in the education practical experience. TAL Education Team provides in depth studying companies to learners from pre-university to the twelfth grade principally by a few adaptable class formats: modest courses, personalised premium expert services, and online courses. Our mastering expert services predominantly include enrichment learnings programs and some academic topics in and out of China. Our ADSs trade on the New York Inventory Exchange below the symbol “TAL”.
For investor and media inquiries, make sure you get hold of:
In China:
Jackson Ding Investor Relations TAL Training Group Tel: +86 10 5292 6669-8809 E mail: ir@tal.com
The Piacente Group, Inc. Helen Wu Tel: +86-10-6508-0677 E mail: TAL@thepiacentegroup.com
In the United States:
The Piacente Group, Inc. Brandi Piacente Cellphone: +1-212-481-2050 Email: TAL@thepiacentegroup.com
