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MIL-OSI: Lantronix Reports Results for Second Quarter of Fiscal 2025

Source: GlobeNewswire (MIL-OSI)

Second Quarter Net Revenue of $31.2 Million
Second Quarter GAAP EPS of ($0.06)
Second Quarter Non-GAAP EPS of $0.04

IRVINE, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity for the Internet of Things (IoT) solutions enabling Artificial Intelligence (AI) Edge Intelligence, today reported results for its second quarter of fiscal 2025.

Net revenue totaled $31.2 million, near the midpoint of the guidance range provided for the quarter.

GAAP EPS of ($0.06), compared to ($0.07) in the prior year and $(0.07) in the prior quarter.

Non-GAAP EPS of $0.04, compared to $0.08 in the prior year and $0.06 in the prior quarter.

“Lantronix has the key assets in Compute and Connect to drive Edge Intelligence, and the company remains focused on three key vertical markets: Enterprise; Smart Cities including critical infrastructure; and Transportation,” said Lantronix President and CEO Saleel Awsare. “We are actively advancing Edge AI solutions, integrating the recently acquired IoT assets from Netcomm, and positioning Lantronix for exciting future growth.”

Business Outlook

For the third fiscal quarter of 2025, the company expects revenue in a range of $27.0 million to $31.0 million and non-GAAP EPS of $0.01 to $0.05 per share.

Conference Call and Webcast

Management will host an investor conference call and audio webcast on Thursday, Feb. 6, 2025, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its results for the second quarter of fiscal 2025 that ended Dec. 31, 2024. To access the live conference call, investors should dial 1-844-802-2442 (US) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q2 FY 2025 call. The webcast will be available simultaneously via the investor relations section of the company’s website.

Investors can access a replay of the conference call starting at approximately 7:00 p.m. Pacific Time on Feb. 6, 2025, at the Lantronix website. A telephonic replay will also be available through Feb. 13, 2025, by dialing 1-877-344-7529 (US) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 3433776.

About Lantronix

Lantronix Inc. is a global leader of compute and connectivity IoT solutions that target high-growth markets, including Smart Cities, Enterprise and Transportation. Lantronix’s products and services empower companies to succeed in the growing IoT markets by delivering customizable solutions that enable AI Edge Intelligence. Lantronix’s advanced solutions include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with advanced Out-of-Band Management (OOB) for Cloud and Edge Computing.

For more information, visit the Lantronix website.

Discussion of Non-GAAP Financial Measures

Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP net income consists of net loss excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), (vi) restructuring, severance and related charges, (vii) acquisition related costs, (viii) impairment of long-lived assets, (ix) amortization of purchased intangibles, (x) amortization of manufacturing profit in acquired inventory, (xi) fair value remeasurement of earnout consideration, and (xii) loss on extinguishment of debt.

Non-GAAP EPS is calculated by dividing non-GAAP net loss by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP EPS, the calculation of GAAP weighted-average shares outstanding (diluted) is adjusted to exclude share-based compensation, which for GAAP purposes is treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Guidance on earnings per share growth is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Lantronix’s ability to estimate the excluded items are not accessible or estimable on a forward-looking basis without unreasonable effort.

Forward-Looking Statements

This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for the third fiscal quarter of 2025, the market opportunities offered by the current shift towards edge computing and our positioning to capitalize on this trend, and our expectations regarding the benefits of our acquisition of Netcomm Wireless Pty Ltd. and our cost reduction initiatives. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. Other factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains due to a pandemic or similar outbreak, wars and recent conflicts in Europe, Asia and the Middle East, hostilities in the Red Sea, or other causes; our ability to successfully convert our backlog and current demand; the impact of a pandemic or similar outbreak on our business, employees, customers, supply and distribution chains and the global economy; our ability to successfully implement our acquisition strategy or integrate acquired companies; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention or other related costs or difficulties; our ability to continue to generate revenue from products sold into mature markets; our ability to develop, market, and sell new products; our ability to succeed with our new software offerings; our use of AI may result in reputational, competitive or financial harm and liability; fluctuations in our revenue due to the project-based timing of orders from certain customers; unpredictable timing of our revenues due to the lengthy sales cycle for our products and services and potential delays in customer completion of projects; our ability to accurately forecast future demand for our products; delays in qualifying revisions of existing products; constraints or delays in the supply of, or quality control issues with, certain materials or components; difficulties associated with the delivery, quality or cost of our products from our contract manufacturers or suppliers; risks related to the outsourcing of manufacturing and international operations; difficulties associated with our distributors or resellers; intense competition in our industry and resultant downward price pressure; rises in inventory levels and inventory obsolescence; undetected software or hardware errors or defects in our products; cybersecurity risks; our ability to obtain appropriate industry certifications or approvals from governmental regulatory bodies; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to protect patents and other proprietary rights and avoid infringement of others’ proprietary technology rights; issues relating to the stability of our financial and banking institutions and relationships; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; the impact of rising interest rates; our ability to attract and retain qualified management; and any additional factors included in our Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the Securities and Exchange Commission (the “SEC”) on Sept. 9, 2024, including in the section entitled “Risk Factors” in Item 1A of Part I of that report; in our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024, to be filed with the SEC on Feb. 7, 2025, including in the section entitled “Risk Factors” in Item 1A of Part II of such report; and in our other public filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.

Lantronix Investor Relations Contact:
investors@lantronix.com

LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	December 31,			June 30,
		2024			2024
Assets
Current assets:
Cash and cash equivalents	$	19,210		$	26,237
Accounts receivable, net		30,472			31,279
Inventories, net		29,070			27,698
Contract manufacturers’ receivables		3,473			1,401
Prepaid expenses and other current assets		3,329			2,335
Total current assets		85,554			88,950
Property and equipment, net		3,155			4,016
Goodwill		30,491			27,824
Intangible assets, net		4,910			5,251
Lease right-of-use assets		9,430			9,567
Other assets		683			600
Total assets	$	134,223		$	136,208

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	15,975		$	10,347
Accrued payroll and related expenses		2,968			5,836
Current portion of long-term debt, net		3,056			3,002
Other current liabilities		11,436			10,971
Total current liabilities		33,435			30,156
Long-term debt, net		11,630			13,219
Other non-current liabilities		11,245			11,478
Total liabilities		56,310			54,853

Commitments and contingencies

Stockholders’ equity:
Common stock		4			4
Additional paid-in capital		305,433			304,001
Accumulated deficit		(227,895	)		(223,021	)
Accumulated other comprehensive income		371			371
Total stockholders’ equity		77,913			81,355
Total liabilities and stockholders’ equity	$	134,223		$	136,208

LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)


	Three Months Ended									Six Months Ended
	December 31,			September 30,			December 31,			December 31,
		2024			2024			2023			2024			2023
Net revenue	$	31,161		$	34,423		$	37,038		$	65,584		$	70,069
Cost of revenue		17,877			19,948			22,007			37,825			40,941
Gross profit		13,284			14,475			15,031			27,759			29,128
Operating expenses:
Selling, general and administrative		8,811			9,467			10,224			18,278			19,394
Research and development		4,984			4,956			4,725			9,940			9,831
Restructuring, severance and related charges		193			900			530			1,093			550
Acquisition-related costs		208			29			–			237			–
Fair value remeasurement of earnout consideration		–			–			–			–			(9	)
Amortization of intangible assets		1,248			1,251			1,310			2,499			2,694
Total operating expenses		15,444			16,603			16,789			32,047			32,460
Loss from operations		(2,160	)		(2,128	)		(1,758	)		(4,288	)		(3,332	)
Interest expense, net		(126	)		(119	)		(232	)		(245	)		(570	)
Other income (loss), net		8			(37	)		(23	)		(29	)		(4	)
Loss before income taxes		(2,278	)		(2,284	)		(2,013	)		(4,562	)		(3,906	)
Provision for income taxes		94			218			580			312			573
Net loss	$	(2,372	)	$	(2,502	)	$	(2,593	)	$	(4,874	)	$	(4,479	)
Net loss per share – basic and diluted	$	(0.06	)	$	(0.07	)	$	(0.07	)	$	(0.13	)	$	(0.12	)
Weighted-average common shares – basic and diluted		38,631			38,024			37,354			38,330			37,170

LANTRONIX, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(In thousands, except per share data)

	Three Months Ended									Six Months Ended
	December 31,			September 30,			December 31,			December 31,
		2024			2024			2023			2024			2023

GAAP net loss	$	(2,372	)	$	(2,502	)	$	(2,593	)	$	(4,874	)	$	(4,479	)
Non-GAAP adjustments:
Cost of revenue:
Share-based compensation		48			64			64			112			105
Employer portion of withholding taxes on stock grants		2			5			1			7			5
Amortization of manufacturing profit in acquired inventory		–			–			189			–			506
Depreciation and amortization		114			123			109			237			195
Total adjustments to cost of revenue		164			192			363			356			811
Selling, general and administrative:
Share-based compensation		1,044			1,126			1,628			2,170			2,901
Employer portion of withholding taxes on stock grants		20			78			10			98			47
Depreciation and amortization		348			351			338			699			672
Total adjustments to selling, general and administrative		1,412			1,555			1,976			2,967			3,620
Research and development:
Share-based compensation		421			410			484			831			912
Employer portion of withholding taxes on stock grants		2			19			5			21			18
Depreciation and amortization		111			69			52			180			160
Total adjustments to research and development		534			498			541			1,032			1,090
Restructuring, severance and related charges		193			900			530			1,093			550
Acquisition related costs		208			29			–			237			–
Fair value remeasurement of earnout consideration		–			–			–			–			(9	)
Amortization of purchased intangible assets		1,248			1,251			1,310			2,499			2,694
Litigation settlement cost		158			40			–			198			–
Total non-GAAP adjustments to operating expenses		3,753			4,273			4,357			8,026			7,945
Interest expense, net		126			119			232			245			570
Other (income) expense, net		(8	)		37			23			29			4
Provision for income taxes		94			218			580			312			573
Total non-GAAP adjustments		4,129			4,839			5,555			8,968			9,903
Non-GAAP net income	$	1,757		$	2,337		$	2,962		$	4,094		$	5,424


Non-GAAP net income per share – diluted	$	0.04		$	0.06		$	0.08		$	0.10		$	0.14

Denominator for GAAP net income (loss) per share – diluted		38,631			38,024			37,354			38,330			37,170
Non-GAAP adjustment		953			1,257			1,228			901			938
Denominator for non-GAAP net income per share – diluted		39,584			39,281			38,582			39,231			38,108

GAAP cost of revenue	$	17,877		$	19,948		$	22,007		$	37,825		$	40,941
Non-GAAP adjustments to cost of revenue		(164	)		(192	)		(363	)		(356	)		(811	)
Non-GAAP cost of revenue		17,713			19,756			21,644			37,469			40,130
Non-GAAP gross profit	$	13,448		$	14,667		$	15,394		$	28,115		$	29,939
Non-GAAP gross margin		43.2	%		42.6	%		41.6	%		42.9	%		42.7	%

LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)

	Three Months Ended						Six Months Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Embedded IoT Solutions	$	10,784	$	13,387	$	11,764	$	24,171	$	23,137
IoT System Solutions		18,592		18,759		23,022		37,351		42,058
Software & Services		1,785		2,277		2,252		4,062		4,874
	$	31,161	$	34,423	$	37,038	$	65,584	$	70,069


	Three Months Ended						Six Months Ended
	December 31, 2024		September 30, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Americas	$	16,386	$	17,420	$	20,601	$	33,806	$	43,534
EMEA		9,036		10,484		12,886		19,520		19,477
Asia Pacific Japan		5,739		6,519		3,551		12,258		7,058
	$	31,161	$	34,423	$	37,038	$	65,584	$	70,069

The MIL Network –

February 7, 2025

MIL-OSI: Global-e to Announce Financial Results for the Fourth Quarter and Year End 2024 on February 19, 2025

Source: GlobeNewswire (MIL-OSI)

PETAH-TIKVA, Israel, Feb. 06, 2025 (GLOBE NEWSWIRE) — Global-e (Nasdaq: GLBE), the platform powering global direct-to-consumer e-commerce, today announced it will report financial results for the fourth quarter and full year ended December 31, 2024, before market open on Wednesday, February 19, 2025.

Global-e management will host a conference call to review its financial results and outlook.

Date:	Wednesday, February 19, 2025
Time:	8:00 AM ET
United States/Canada Toll Free:	+1-800-717-1738
International Toll:	+1-646-307-1865

Please join the call 5-10 minutes prior to the scheduled start time, to avoid a delay in connecting. A live webcast will be available in the Investor Relations section of Global-e’s website at https://investors.global-e.com/news-events/events-presentations

A replay of the webcast will be available in the Investor Relations section of Global-e’s website at https://investors.global-e.com/news-events/events-presentations approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.

About Global-e Online Ltd.

Global-e (Nasdaq: GLBE) is the world’s leading platform enabling and accelerating global, Direct-To-Consumer e-commerce. The chosen partner of over 1,000 brands and retailers across the United States, EMEA and APAC, Global-e makes selling internationally as simple as selling domestically. The company enables merchants to increase the conversion of international traffic into sales by offering online shoppers in over 200 destinations worldwide a seamless, localized shopping experience. Global-e’s end-to-end e-commerce solutions combine best-in-class localization capabilities, big-data best-practice business intelligence models, streamlined international logistics and vast global e-commerce experience, enabling international shoppers to buy seamlessly online and retailers to sell to, and from, anywhere in the world. For more information, please visit: www.global-e.com.

Investor Contact:
Erica Mannion or Mike Funari
Sapphire Investor Relations, LLC
IR@global-e.com
+1 617-542-6180

Press Contact:
Sarah Schloss
Headline Media
sarah.schloss@headline.media
+1 914-506-5104

The MIL Network –

February 7, 2025

MIL-OSI: StepStone Group Reports Third Quarter Fiscal Year 2025 Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Feb. 06, 2025 (GLOBE NEWSWIRE) — StepStone Group Inc. (Nasdaq: STEP), a global private markets investment firm focused on providing customized investment solutions and advisory and data services, today reported results for the quarter ended December 31, 2024. This represents results for the third quarter of the fiscal year ending March 31, 2025. The Board of Directors of the Company has declared a quarterly cash dividend of $0.24 per share of Class A common stock, payable on March 14, 2025, to the holders of record as of the close of business on February 28, 2025.

StepStone issued a full detailed presentation of its third quarter fiscal 2025 results, which can be accessed by visiting the Company’s website at https://shareholders.stepstonegroup.com.

Webcast and Earnings Conference Call

Management will host a webcast and conference call today, Thursday, February 6, 2025, at 5:00 pm ET to discuss the Company’s results for the third quarter of the fiscal year ending March 31, 2025. The webcast will be made available on the Shareholders section of the Company’s website at https://shareholders.stepstonegroup.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register. A replay will also be available on the Shareholders section of the Company’s website approximately two hours after the conclusion of the event.

To join as a live participant in the question and answer portion of the call, participants must register at https://register.vevent.com/register/BI4d11263234d648c092cf5d1e8339df8d. Upon registering you will receive the dial-in number and a PIN to join the call as well as an email confirmation with the details.

About StepStone

StepStone Group Inc. (Nasdaq: STEP) is a global private markets investment firm focused on providing customized investment solutions and advisory and data services to its clients. As of December 31, 2024, StepStone was responsible for approximately $698 billion of total capital, including $179 billion of assets under management. StepStone’s clients include some of the world’s largest public and private defined benefit and defined contribution pension funds, sovereign wealth funds and insurance companies, as well as prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. StepStone partners with its clients to develop and build private markets portfolios designed to meet their specific objectives across the private equity, infrastructure, private debt and real estate asset classes.

Forward-Looking Statements

Some of the statements in this release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking. Words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “intend,” “may,” “plan” and “will” and similar expressions identify forward-looking statements. Forward-looking statements reflect management’s current plans, estimates and expectations and are inherently uncertain. The inclusion of any forward-looking information in this release should not be regarded as a representation that the future plans, estimates or expectations contemplated will be achieved. Forward-looking statements are subject to various risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, global and domestic market and business conditions, our successful execution of business and growth strategies, the favorability of the private markets fundraising environment, successful integration of acquired businesses and regulatory factors relevant to our business, as well as assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity and the risks and uncertainties described in greater detail under the “Risk Factors” section of our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission on May 24, 2024, as such factors may be updated from time to time. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use the following non-GAAP financial measures: adjusted management and advisory fees, net, adjusted revenues, adjusted net income (on both a pre-tax and after-tax basis), adjusted net income per share, adjusted weighted-average shares, fee-related earnings, fee-related earnings margin, gross realized performance fees and net realized performance fees. We have provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, the non-GAAP financial measures in this earnings release may not be comparable to similarly titled measures used by other companies in our industry or across different industries. For definitions of these non-GAAP measures and reconciliations to applicable GAAP measures, please see the section titled “Non-GAAP Financial Measures: Definitions and Reconciliations.”


Financial Highlights and Key Business Drivers/Operating Metrics

	Three Months Ended															Nine Months Ended December 31,						Percentage Change
(in thousands, except share and per share amounts and where noted)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024		vs. FQ3’24		vs. FQ3’24 YTD
Financial Highlights
GAAP Results
Management and advisory fees, net	$	151,492		$	153,410		$	178,015		$	184,758		$	190,840		$	431,730		$	553,613		26	%	28	%
Total revenues		(14,612	)		356,810			186,401			271,677			339,023			354,821			797,101		na		125	%
Total performance fees		(166,104	)		203,400			8,386			86,919			148,183			(76,909	)		243,488		na		na
Net income (loss)		(23,419	)		82,542			48,045			53,138			(287,163	)		85,278			(185,980	)	na		na
Net income (loss) per share of Class A common stock:
Basic	$	(0.32	)	$	0.48		$	0.20		$	0.26		$	(2.61	)	$	0.43		$	(2.32	)	(725)	%	na
Diluted	$	(0.32	)	$	0.48		$	0.20		$	0.26		$	(2.61	)	$	0.43		$	(2.32	)	(725)	%	na
Weighted-average shares of Class A common stock:
Basic		64,068,952			64,194,859			66,187,754			68,772,051			73,687,289			63,255,604			69,561,254		15	%	10	%
Diluted		64,068,952			67,281,567			68,593,761			69,695,315			73,687,289			66,299,982			69,561,254		15	%	5	%
Quarterly dividend per share of Class A common stock⁽¹⁾	$	0.21		$	0.21		$	0.21		$	0.24		$	0.24		$	0.62		$	0.69		14	%	11	%
Supplemental dividend per share of Class A common stock⁽²⁾	$	—		$	—		$	0.15		$	—		$	—		$	0.25		$	0.15		na		(40)	%
Accrued carried interest allocations		1,203,847			1,354,051			1,328,853			1,381,110			1,474,543								22	%

Non-GAAP Results⁽³⁾
Adjusted management and advisory fees, net⁽⁴⁾	$	151,943		$	153,808		$	178,514		$	185,481		$	191,832		$	432,571		$	555,827		26	%	28	%
Adjusted revenues		185,123			177,357			221,165			208,788			243,905			487,703			673,858		32	%	38	%
Fee-related earnings (“FRE”)		50,664			50,900			71,656			72,349			74,118			138,893			218,123		46	%	57	%
FRE margin⁽⁵⁾		33	%		33	%		40	%		39	%		39	%		32	%		39	%
Gross realized performance fees		33,180			23,549			42,651			23,307			52,073			55,132			118,031		57	%	114	%
Adjusted net income (“ANI”)		42,116			37,716			57,241			53,569			52,659			101,677			163,469		25	%	61	%
Adjusted weighted-average shares		115,232,927			115,512,301			118,510,499			118,774,233			118,935,179			115,009,445			118,740,805		3	%	3	%
ANI per share	$	0.37		$	0.33		$	0.48		$	0.45		$	0.44		$	0.88		$	1.38		19	%	57	%

Key Business Drivers/Operating Metrics (in billions)
Assets under management (“AUM”)⁽⁶⁾	$	149.0		$	156.6		$	169.3		$	176.1		$	179.2								20	%
Assets under advisement (“AUA”)⁽⁶⁾		510.5			521.1			531.4			505.9			518.7								2	%
Fee-earning AUM (“FEAUM”)		89.4			93.9			100.4			104.4			114.2								28	%
Undeployed fee-earning capital (“UFEC”)		21.4			22.6			27.6			29.7			21.7								1	%

_______________________________
(1)      Dividends paid, as reported in this table, relate to the preceding quarterly period in which they were earned.
(2)      The supplemental cash dividend relates to earnings in respect of our full fiscal years 2023 and 2024, respectively.
(3)      Adjusted management and advisory fees, net, adjusted revenues, FRE, FRE margin, gross realized performance fees, ANI, adjusted weighted-average shares and ANI per share are non-GAAP measures. See the definitions of these measures and reconciliations to the respective, most comparable GAAP measures under “Non-GAAP Financial Measures: Definitions and Reconciliations.”
(4)      Excludes the impact of consolidating the Consolidated Funds. See reconciliation of GAAP measures to adjusted measures that follows.
(5)      FRE margin is calculated by dividing FRE by adjusted management and advisory fees, net.
(6)      AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented. Does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.


StepStone Group Inc. GAAP Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except share and per share amounts)

	As of
	December 31, 2024			March 31, 2024
Assets
Cash and cash equivalents	$	223,103		$	143,430
Restricted cash		720			718
Fees and accounts receivable		63,521			56,769
Due from affiliates		96,590			67,531
Investments:
Investments in funds		172,748			135,043
Accrued carried interest allocations		1,474,543			1,354,051
Legacy Greenspring investments in funds and accrued carried interest allocations⁽¹⁾		572,459			631,197
Deferred income tax assets		356,122			184,512
Lease right-of-use assets, net		90,567			97,763
Other assets and receivables		66,114			60,611
Intangibles, net		274,122			304,873
Goodwill		580,542			580,542
Assets of Consolidated Funds:
Cash and cash equivalents		55,681			38,164
Investments, at fair value		320,482			131,858
Other assets		2,333			1,745
Total assets	$	4,349,647		$	3,788,807
Liabilities and stockholders’ equity
Accounts payable, accrued expenses and other liabilities	$	139,068		$	127,417
Accrued compensation and benefits		690,321			101,481
Accrued carried interest-related compensation		730,218			719,497
Legacy Greenspring accrued carried interest-related compensation⁽¹⁾		439,898			484,154
Due to affiliates		315,739			212,918
Lease liabilities		112,175			119,739
Debt obligations		168,942			148,822
Liabilities of Consolidated Funds:
Other liabilities		9,860			1,645
Total liabilities		2,606,221			1,915,673
Redeemable non-controlling interests in Consolidated Funds		286,822			102,623
Redeemable non-controlling interests in subsidiaries		6,552			115,920
Stockholders’ equity:
Class A common stock, $0.001 par value, 650,000,000 authorized; 75,841,118 and 65,614,902 issued and outstanding as of December 31, 2024 and March 31, 2024, respectively		76			66
Class B common stock, $0.001 par value, 125,000,000 authorized; 40,127,254 and 45,030,959 issued and outstanding as of December 31, 2024 and March 31, 2024, respectively		40			45
Additional paid-in capital		415,059			310,293
Retained earnings (accumulated deficit)		(205,674	)		13,768
Accumulated other comprehensive income		341			304
Total StepStone Group Inc. stockholders’ equity		209,842			324,476
Non-controlling interests in subsidiaries		1,051,919			974,559
Non-controlling interests in legacy Greenspring entities⁽¹⁾		132,561			147,042
Non-controlling interests in the Partnership		55,730			208,514
Total stockholders’ equity		1,450,052			1,654,591
Total liabilities and stockholders’ equity	$	4,349,647		$	3,788,807

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.


StepStone Group Inc. GAAP Condensed Consolidated Statements of Income (Loss) (Unaudited) (in thousands, except share and per share amounts)

	Three Months Ended December 31,						Nine Months Ended December 31,
		2024			2023			2024			2023
Revenues
Management and advisory fees, net	$	190,840		$	151,492		$	553,613		$	431,730
Performance fees:
Incentive fees		22,369			17,891			26,365			22,843
Carried interest allocations:
Realized		24,282			15,289			83,718			31,347
Unrealized		93,325			(129,584	)		120,370			(24,849	)
Total carried interest allocations		117,607			(114,295	)		204,088			6,498
Legacy Greenspring carried interest allocations⁽¹⁾		8,207			(69,700	)		13,035			(106,250	)
Total performance fees		148,183			(166,104	)		243,488			(76,909	)
Total revenues		339,023			(14,612	)		797,101			354,821
Expenses
Compensation and benefits:
Cash-based compensation		85,203			73,619			246,298			218,551
Equity-based compensation		486,418			14,032			542,929			28,420
Performance fee-related compensation:
Realized		25,477			15,444			55,092			26,266
Unrealized		49,670			(62,243	)		66,495			(9,320	)
Total performance fee-related compensation		75,147			(46,799	)		121,587			16,946
Legacy Greenspring performance fee-related compensation⁽¹⁾		8,207			(69,700	)		13,035			(106,250	)
Total compensation and benefits		654,975			(28,848	)		923,849			157,667
General, administrative and other		43,130			48,001			134,202			113,007
Total expenses		698,105			19,153			1,058,051			270,674
Other income (expense)
Investment income (loss)		1,064			(2,051	)		5,710			4,115
Legacy Greenspring investment income (loss)⁽¹⁾		1,167			(2,222	)		(4,119	)		(9,054	)
Investment income of Consolidated Funds		15,037			11,223			30,878			22,357
Interest income		2,559			827			7,632			2,235
Interest expense		(3,008	)		(2,562	)		(9,510	)		(6,682	)
Other income (loss)		(2,452	)		4,408			(1,626	)		3,763
Total other income		14,367			9,623			28,965			16,734
Income (loss) before income tax		(344,715	)		(24,142	)		(231,985	)		100,881
Income tax expense (benefit)		(57,552	)		(723	)		(46,005	)		15,603
Net income (loss)		(287,163	)		(23,419	)		(185,980	)		85,278
Less: Net income attributable to non-controlling interests in subsidiaries		27,226			13,552			62,966			32,797
Less: Net income (loss) attributable to non-controlling interests in legacy Greenspring entities⁽¹⁾		1,167			(2,222	)		(4,119	)		(9,054	)
Less: Net income (loss) attributable to non-controlling interests in the Partnership		(134,760	)		(20,111	)		(107,856	)		22,677
Less: Net income attributable to redeemable non-controlling interests in Consolidated Funds		10,905			5,588			23,101			11,590
Less: Net income attributable to redeemable non-controlling interests in subsidiaries		314			—			983			—
Net income (loss) attributable to StepStone Group Inc.	$	(192,015	)	$	(20,226	)	$	(161,055	)	$	27,268
Net income (loss) per share of Class A common stock:
Basic	$	(2.61	)	$	(0.32	)	$	(2.32	)	$	0.43
Diluted	$	(2.61	)	$	(0.32	)	$	(2.32	)	$	0.43
Weighted-average shares of Class A common stock:
Basic		73,687,289			64,068,952			69,561,254			63,255,604
Diluted		73,687,289			64,068,952			69,561,254			66,299,982

(1) Reflects amounts attributable to consolidated VIEs for which the Company did not acquire any direct economic interests.

Non-GAAP Financial Measures: Definitions and Reconciliations

Adjusted Management and Advisory Fees, Net

The following table presents the components of adjusted management and advisory fees, net. We believe adjusted management and advisory fees, net is useful to investors because it removes the impact of consolidating the Consolidated Funds which we are required to consolidate under GAAP.

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
Focused commingled funds⁽¹⁾⁽²⁾	$	78,633	$	80,434	$	104,798	$	107,855	$	105,718	$	216,233	$	318,371
Separately managed accounts		55,838		55,945		57,376		61,393		66,245		168,013		185,014
Advisory and other services		16,069		16,147		14,769		14,907		17,458		43,910		47,134
Fund reimbursement revenues⁽¹⁾		1,403		1,282		1,571		1,326		2,411		4,415		5,308
Adjusted management and advisory fees, net	$	151,943	$	153,808	$	178,514	$	185,481	$	191,832	$	432,571	$	555,827

_______________________________
(1) Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2) Includes income-based incentive fees of $2.1 million for the three months ended December 31, 2024, $1.3 million for the three months ended September 30, 2024, $1.1 million for the three months ended June 30, 2024, $0.8 million for the three months ended March 31, 2024, $0.6 million for the three months ended December 31, 2023, and $4.6 million and $0.6 million for the nine months ended December 31, 2024 and 2023, respectively, from certain funds.

Adjusted Revenues

Adjusted revenues represents the components of revenues used in the determination of ANI and comprise adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) and realized carried interest allocations. We believe adjusted revenues is useful to investors because it presents a measure of realized revenues.

The table below shows a reconciliation of revenues to adjusted revenues.

	Three Months Ended														Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024		September 30, 2024			December 31, 2024				2023		2024
Total revenues	$	(14,612	)	$	356,810		$	186,401	$	271,677		$	339,023		$	354,821	$	797,101
Unrealized carried interest allocations		129,584			(151,757	)		25,170		(52,215	)		(93,325	)		24,849		(120,370	)
Deferred incentive fees		—			1,450			6		2,445			—			942		2,451
Legacy Greenspring carried interest allocations		69,700			(31,093	)		9,089		(13,917	)		(8,207	)		106,250		(13,035	)
Management and advisory fee revenues for the Consolidated Funds⁽¹⁾		451			398			499		723			992			841		2,214
Incentive fees for the Consolidated Funds⁽²⁾		—			1,549			—		75			5,422			—		5,497
Adjusted revenues	$	185,123		$	177,357		$	221,165	$	208,788		$	243,905		$	487,703	$	673,858

_______________________________
(1) Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2) Reflects the add-back of incentive fees for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Net Income

Adjusted net income, or “ANI,” is a non-GAAP performance measure that we present before the consolidation of StepStone Funds on a pre-tax and after-tax basis used to evaluate profitability. ANI represents the after-tax net realized income attributable to us. ANI does not reflect legacy Greenspring carried interest allocation revenues, legacy Greenspring carried interest-related compensation and legacy Greenspring investment income (loss) as none of the economics are attributable to us. The components of revenues used in the determination of ANI (“adjusted revenues”) comprise adjusted management and advisory fees, net, adjusted incentive fees (including the deferred portion) and realized carried interest allocations. In addition, ANI excludes: (a) unrealized carried interest allocation revenues and related compensation, (b) unrealized investment income (loss), (c) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (d) amortization of intangibles, (e) net income (loss) attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary, (f) charges associated with acquisitions and corporate transactions, and (g) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). ANI is fully taxed at our blended statutory rate. We believe ANI and adjusted revenues are useful to investors because they enable investors to evaluate the performance of our business across reporting periods.

Fee-Related Earnings

Fee-related earnings, or “FRE,” is a non-GAAP performance measure used to monitor our baseline earnings from recurring management and advisory fees. FRE is a component of ANI and comprises adjusted management and advisory fees, net, less adjusted expenses which are operating expenses other than (a) performance fee-related compensation, (b) equity-based compensation for awards granted prior to and in connection with our IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary, (c) amortization of intangibles, (d) charges associated with acquisitions and corporate transactions, and (e) certain other items that we believe are not indicative of our core operating performance (as listed in the table below). FRE is presented before income taxes. We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business and our ability to cover direct base compensation and operating expenses from total fee revenue.

The table below shows a reconciliation of GAAP measures to additional non-GAAP measures. We use the non-GAAP measures presented below as components when calculating FRE and ANI (as defined below). We believe these additional non-GAAP measures are useful to investors in evaluating both the baseline earnings from recurring management and advisory fees, which provide additional insight into the operating profitability of our business, and the after-tax net realized income attributable to us, allowing investors to evaluate the performance of our business. These additional non-GAAP measures remove the impact of Consolidated Funds that we are required to consolidate under GAAP, and certain other items that we believe are not indicative of our core operating performance.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
GAAP management and advisory fees, net	$	151,492		$	153,410		$	178,015		$	184,758		$	190,840		$	431,730		$	553,613
Management and advisory fee revenues for the Consolidated Funds⁽¹⁾		451			398			499			723			992			841			2,214
Adjusted management and advisory fees, net	$	151,943		$	153,808		$	178,514		$	185,481		$	191,832		$	432,571		$	555,827

GAAP incentive fees	$	17,891		$	2,496		$	841		$	3,155		$	22,369		$	22,843		$	26,365
Incentive fee revenues for the Consolidated Funds⁽²⁾		—			1,549			—			75			5,422			—			5,497
Adjusted incentive fees	$	17,891		$	4,045		$	841		$	3,230		$	27,791		$	22,843		$	31,862

GAAP cash-based compensation	$	73,619		$	74,411		$	78,224		$	82,871		$	85,203		$	218,551		$	246,298
Adjustments⁽³⁾		(574	)		(461	)		(428	)		(285	)		339			(1,679	)		(374	)
Adjusted cash-based compensation	$	73,045		$	73,950		$	77,796		$	82,586		$	85,542		$	216,872		$	245,924

GAAP equity-based compensation	$	14,032		$	13,937		$	19,179		$	37,332		$	486,418		$	28,420		$	542,929
Adjustments⁽⁴⁾		(12,610	)		(12,210	)		(16,785	)		(34,947	)		(483,958	)		(24,425	)		(535,690	)
Adjusted equity-based compensation	$	1,422		$	1,727		$	2,394		$	2,385		$	2,460		$	3,995		$	7,239

GAAP general, administrative and other	$	48,001		$	54,310		$	41,011		$	50,061		$	43,130		$	113,007		$	134,202
Adjustments⁽⁵⁾		(21,189	)		(27,079	)		(14,343	)		(21,900	)		(13,418	)		(40,196	)		(49,661	)
Adjusted general, administrative and other	$	26,812		$	27,231		$	26,668		$	28,161		$	29,712		$	72,811		$	84,541

GAAP interest income	$	827		$	1,429		$	2,057		$	3,016		$	2,559		$	2,235		$	7,632
Interest income earned by the Consolidated Funds⁽⁶⁾		(540	)		(612	)		(907	)		(1,363	)		(887	)		(1,033	)		(3,157	)
Adjusted interest income	$	287		$	817		$	1,150		$	1,653		$	1,672		$	1,202		$	4,475

GAAP other income (loss)	$	4,408		$	(1,308	)	$	(351	)	$	1,177		$	(2,452	)	$	3,763		$	(1,626	)
Adjustments⁽⁷⁾		(4,301	)		395			(72	)		(1,082	)		1,883			(4,274	)		729
Adjusted other income (loss)	$	107		$	(913	)	$	(423	)	$	95		$	(569	)	$	(511	)	$	(897	)

______________________________
(1)      Reflects the add-back of management and advisory fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(2)      Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.
(3)      Reflects the removal of compensation paid to certain employees as part of an acquisition earn-out.
(4)      Reflects the removal of equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.
(5)      Reflects the removal of lease remeasurement adjustments, accelerated depreciation of leasehold improvements for changes in lease terms, amortization of intangibles, transaction-related costs and other non-core operating income and expenses.
(6)      Reflects the removal of interest income earned by the Consolidated Funds.
(7)      Reflects the removal of amounts for Tax Receivable Agreements adjustments recognized as other income (loss), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters, loss on sale of subsidiary and the impact of consolidation of the Consolidated Funds.

The table below shows a reconciliation of income (loss) before income tax to ANI and FRE.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
Income (loss) before income tax	$	(24,142	)		94,515		$	54,842		$	57,888		$	(344,715	)	$	100,881		$	(231,985	)
Net income attributable to non-controlling interests in subsidiaries⁽¹⁾		(15,537	)		(12,822	)		(18,951	)		(17,812	)		(32,765	)		(36,398	)		(69,528	)
Net (income) loss attributable to non-controlling interests in legacy Greenspring entities		2,222			33			1,255			4,031			(1,167	)		9,054			4,119
Unrealized carried interest allocations		129,584			(151,757	)		25,170			(52,215	)		(93,325	)		24,849			(120,370	)
Unrealized performance fee-related compensation		(62,243	)		84,014			(10,923	)		27,748			49,670			(9,320	)		66,495
Unrealized investment (income) loss		5,559			(2,280	)		(1,180	)		(430	)		656			1,373			(954	)
Impact of Consolidated Funds		(11,068	)		(4,138	)		(7,731	)		(9,267	)		(6,892	)		(21,938	)		(23,890	)
Deferred incentive fees		—			1,450			6			2,445			—			942			2,451
Equity-based compensation⁽²⁾		12,610			12,210			16,785			34,947			483,958			24,425			535,690
Amortization of intangibles		10,661			10,423			10,250			10,250			10,250			31,983			30,750
Tax Receivable Agreements adjustments through earnings		222			90			—			—			—			222			—
Non-core items⁽³⁾		6,335			16,780			4,137			11,349			2,094			4,785			17,580
Pre-tax ANI		54,203			48,518			73,660			68,934			67,764			130,858			210,358
Income taxes⁽⁴⁾		(12,087	)		(10,802	)		(16,419	)		(15,365	)		(15,105	)		(29,181	)		(46,889	)
ANI		42,116			37,716			57,241			53,569			52,659			101,677			163,469
Income taxes⁽⁴⁾		12,087			10,802			16,419			15,365			15,105			29,181			46,889
Realized carried interest allocations		(15,289	)		(18,054	)		(41,804	)		(17,632	)		(24,282	)		(31,347	)		(83,718	)
Realized performance fee-related compensation⁽⁵⁾		15,444			11,421			20,848			8,767			25,477			26,266			55,092
Realized investment income		(3,508	)		(1,057	)		(1,415	)		(1,621	)		(1,720	)		(5,488	)		(4,756	)
Adjusted incentive fees⁽⁶⁾		(17,891	)		(4,045	)		(841	)		(3,230	)		(27,791	)		(22,843	)		(31,862	)
Deferred incentive fees		—			(1,450	)		(6	)		(2,445	)		—			(942	)		(2,451	)
Adjusted interest income⁽⁶⁾		(287	)		(817	)		(1,150	)		(1,653	)		(1,672	)		(1,202	)		(4,475	)
Interest expense		2,562			2,649			2,990			3,512			3,008			6,682			9,510
Adjusted other (income) loss⁽⁶⁾⁽⁷⁾		(107	)		913			423			(95	)		569			511			897
Net income attributable to non-controlling interests in subsidiaries⁽¹⁾		15,537			12,822			18,951			17,812			32,765			36,398			69,528
FRE	$	50,664		$	50,900		$	71,656		$	72,349		$	74,118		$	138,893		$	218,123

_______________________________
(1) Reflects the portion of pre-tax ANI attributable to non-controlling interests in our subsidiaries and realized gains attributable to the profits interests issued in the private wealth subsidiary:

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
FRE attributable to non-controlling interests in subsidiaries and profits interests	$	10,518	$	11,559	$	13,308	$	14,969	$	21,063	$	30,515	$	49,340
Performance related earnings / other (income) loss attributable to non-controlling interests in subsidiaries and profits interests		5,019		1,263		5,643		2,843		11,702		5,883		20,188
Net income attributable to non-controlling interests in subsidiaries	$	15,537	$	12,822	$	18,951	$	17,812	$	32,765	$	36,398	$	69,528

The contribution to total FRE attributable to non-controlling interests in subsidiaries and profits interests and performance related earnings / other (income) loss attributable to non-controlling interests in subsidiaries and profits interests presented above specifically related to the profits interests issued in the private wealth subsidiary is presented below.

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
FRE attributable to profits interests issued in the private wealth subsidiary	$	—	$	—	$	574	$	2,051	$	2,956	$	—	$	5,581
Performance related earnings / other (income) loss attributable to profits interests issued in the private wealth subsidiary		3,074		—		51		206		11,137		3,074		11,394
Amounts attributable to profits interests issued in the private wealth subsidiary	$	3,074	$	—	$	625	$	2,257	$	14,093	$	3,074	$	16,975

(2) Reflects equity-based compensation for awards granted prior to and in connection with the IPO, profits interests issued by our non-wholly owned subsidiaries, and unrealized mark-to-market changes in the fair value of the profits interests issued in the private wealth subsidiary.
(3) Includes (income) expense related to the following non-core operating income and expenses:

	Three Months Ended												Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024				2023			2024
Transaction costs	$	670		$	3,985	$	672	$	140	$	12		$	870		$	824
Lease remeasurement adjustments		(106	)		—		—		—		—			(106	)		—
Accelerated depreciation of leasehold improvements for changes in lease terms		631			—		—		—		—			1,893			—
Loss on change in fair value for contingent consideration obligation		9,054			12,280		2,953		10,888		2,476			4,937			16,317
Compensation paid to certain employees as part of an acquisition earn-out		574			515		482		321		(394	)		1,679			409
Gain from negotiation of certain corporate matters		(5,300	)		—		—		—		—			(5,300	)		—
Loss on sale of subsidiary		812			—		—		—		—			812			—
Other non-core items		—			—		30		—		—			—			30
Total non-core operating income and expenses	$	6,335		$	16,780	$	4,137	$	11,349	$	2,094		$	4,785		$	17,580

(4) Represents corporate income taxes at a blended statutory rate applied to pre-tax ANI:

	Three Months Ended										Nine Months Ended December 31,
	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024		2023		2024
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%
Combined state, local and foreign rate	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%	1.3	%
Blended statutory rate	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%	22.3	%

(5) Includes carried interest-related compensation expense related to the portion of net carried interest allocation revenue attributable to equity holders of the Company’s consolidated subsidiaries that are not 100% owned:

	Three Months Ended										Nine Months Ended December 31,
(in thousands)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
Realized carried interest-related compensation	$	660	$	910	$	—	$	—	$	—	$	2,849	$	—

(6) Excludes the impact of consolidating the Consolidated Funds.
(7) Excludes amounts for Tax Receivable Agreements adjustments recognized as other income (loss) ($(0.1) million for the three months ended March 31, 2024 and $(0.2) million for the three and nine months ended December 31, 2023), gain associated with amounts received as part of negotiations with a third party related to certain corporate matters ($5.3 million for the three and nine months ended December 31, 2023), and loss on sale of subsidiary ($0.8 million for the three and nine months ended December 31, 2023).

Fee-Related Earnings Margin

FRE margin is a non-GAAP performance measure which is calculated by dividing FRE by adjusted management and advisory fees, net. We believe FRE margin is an important measure of profitability on revenues that are largely recurring by nature. We believe FRE margin is useful to investors because it enables them to better evaluate the operating profitability of our business across periods.

The table below shows a reconciliation of FRE to FRE margin.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
FRE	$	50,664		$	50,900		$	71,656		$	72,349		$	74,118		$	138,893		$	218,123
Adjusted management and advisory fees, net		151,943			153,808			178,514			185,481			191,832			432,571			555,827
FRE margin		33	%		33	%		40	%		39	%		39	%		32	%		39	%

Gross Realized Performance Fees

Gross realized performance fees represents realized carried interest allocations and adjusted incentive fees, including the deferred portion. We believe gross realized performance fees is useful to investors because it presents the total performance fees realized by us.

Net Realized Performance Fees

Net realized performance fees represents gross realized performance fees, less realized performance fee-related compensation. We believe net realized performance fees is useful to investors because it presents the performance fees attributable to us, net of amounts paid to employees as performance fee-related compensation.

The table below shows a reconciliation of total performance fees to gross and net realized performance fees.

	Three Months Ended															Nine Months Ended December 31,
(in thousands)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024
Incentive fees	$	17,891		$	2,496		$	841		$	3,155		$	22,369		$	22,843		$	26,365
Realized carried interest allocations		15,289			18,054			41,804			17,632			24,282			31,347			83,718
Unrealized carried interest allocations		(129,584	)		151,757			(25,170	)		52,215			93,325			(24,849	)		120,370
Legacy Greenspring carried interest allocations		(69,700	)		31,093			(9,089	)		13,917			8,207			(106,250	)		13,035
Total performance fees		(166,104	)		203,400			8,386			86,919			148,183			(76,909	)		243,488
Unrealized carried interest allocations		129,584			(151,757	)		25,170			(52,215	)		(93,325	)		24,849			(120,370	)
Legacy Greenspring carried interest allocations		69,700			(31,093	)		9,089			(13,917	)		(8,207	)		106,250			(13,035	)
Incentive fee revenues for the Consolidated Funds⁽¹⁾		—			1,549			—			75			5,422			—			5,497
Deferred incentive fees		—			1,450			6			2,445			—			942			2,451
Gross realized performance fees		33,180			23,549			42,651			23,307			52,073			55,132			118,031
Realized performance fee-related compensation		(15,444	)		(11,421	)		(20,848	)		(8,767	)		(25,477	)		(26,266	)		(55,092	)
Net realized performance fees	$	17,736		$	12,128		$	21,803		$	14,540		$	26,596		$	28,866		$	62,939

______________________________
(1) Reflects the add-back of incentive fee revenues for the Consolidated Funds, which have been eliminated in consolidation.

Adjusted Weighted-Average Shares and Adjusted Net Income Per Share

ANI per share measures our per-share earnings assuming all Class B units, Class C units and Class D units in the Partnership were exchanged for Class A common stock in SSG, including the dilutive impact of outstanding equity-based awards. ANI per share is calculated as ANI divided by adjusted weighted-average shares outstanding. We believe adjusted weighted-average shares and ANI per share are useful to investors because they enable investors to better evaluate per-share operating performance across reporting periods.

The following table shows a reconciliation of diluted weighted-average shares of Class A common stock outstanding to adjusted weighted-average shares outstanding used in the computation of ANI per share.

	Three Months Ended										Nine Months Ended December 31,
	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024			2023		2024
ANI	$	42,116	$	37,716	$	57,241	$	53,569	$	52,659	$	101,677	$	163,469

Weighted-average shares of Class A common stock outstanding – Basic		64,068,952		64,194,859		66,187,754		68,772,051		73,687,289		63,255,604		69,561,254
Assumed vesting of RSUs		333,402		512,946		673,854		921,166		491,014		511,889		695,423
Assumed vesting and exchange of Class B2 units		2,553,899		2,573,762		1,732,153		—		—		2,532,489		573,185
Assumed purchase under ESPP		—		—		—		2,098		—		—		702
Exchange of Class B units in the Partnership⁽¹⁾		46,314,543		46,272,227		45,827,707		45,212,921		41,729,937		46,384,046		44,251,143
Exchange of Class C units in the Partnership⁽¹⁾		1,962,131		1,958,507		1,849,846		1,626,812		1,016,737		2,325,417		1,496,518
Exchange of Class D units in the Partnership⁽¹⁾		—		—		2,239,185		2,239,185		2,010,202		—		2,162,580
Adjusted weighted-average shares		115,232,927		115,512,301		118,510,499		118,774,233		118,935,179		115,009,445		118,740,805

ANI per share	$	0.37	$	0.33	$	0.48	$	0.45	$	0.44	$	0.88	$	1.38

_______________________________
(1) Assumes the full exchange of Class B units, Class C units or Class D units in the Partnership for Class A common stock of SSG pursuant to the Class B Exchange Agreement, Class C Exchange Agreement or Class D Exchange Agreement, respectively.

Key Operating Metrics

We monitor certain operating metrics that are either common to the asset management industry or that we believe provide important data regarding our business. Refer to the Glossary below for a definition of each of these metrics.

Fee-Earning AUM

	Three Months Ended															Nine Months Ended December 31,						Percentage Change
(in millions)	December 31, 2023			March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024				2023			2024		vs. FQ3’24
Separately Managed Accounts
Beginning balance	$	56,380		$	56,660		$	58,897		$	60,272		$	62,121		$	55,345		$	58,897		10	%
Contributions⁽¹⁾		1,109			2,757			2,085			1,723			9,033			3,570			12,841		715	%
Distributions⁽²⁾		(1,397	)		(795	)		(830	)		(535	)		(1,000	)		(3,285	)		(2,365	)	(28)	%
Market value, FX and other⁽³⁾		568			275			120			661			(180	)		1,030			601		na
Ending balance	$	56,660		$	58,897		$	60,272		$	62,121		$	69,974		$	56,660		$	69,974		23	%

Focused Commingled Funds
Beginning balance	$	30,905		$	32,772		$	34,961		$	40,084		$	42,294		$	30,086		$	34,961		37	%
Contributions⁽¹⁾		1,898			2,429			5,653			2,122			2,520			3,686			10,295		33	%
Distributions⁽²⁾		(274	)		(327	)		(661	)		(282	)		(682	)		(1,514	)		(1,625	)	149	%
Market value, FX and other⁽³⁾		243			87			131			370			60			514			561		(75)	%
Ending balance	$	32,772		$	34,961		$	40,084		$	42,294		$	44,192		$	32,772		$	44,192		35	%

Total
Beginning balance	$	87,285		$	89,432		$	93,858		$	100,356		$	104,415		$	85,431		$	93,858		20	%
Contributions⁽¹⁾		3,007			5,186			7,738			3,845			11,553			7,256			23,136		284	%
Distributions⁽²⁾		(1,671	)		(1,122	)		(1,491	)		(817	)		(1,682	)		(4,799	)		(3,990	)	1	%
Market value, FX and other⁽³⁾		811			362			251			1,031			(120	)		1,544			1,162		na
Ending balance	$	89,432		$	93,858		$	100,356		$	104,415		$	114,166		$	89,432		$	114,166		28	%

_______________________________
(1)      Contributions consist of new capital commitments that earn fees on committed capital and capital contributions to funds and accounts that earn fees on net invested capital or NAV.
(2)      Distributions consist of returns of capital from funds and accounts that pay fees on net invested capital or NAV and reductions in fee-earning AUM from funds that moved from a committed capital to net invested capital fee basis or from funds and accounts that no longer pay fees.
(3)      Market value, FX and other primarily consist of changes in market value appreciation (depreciation) for funds that pay on NAV and the effect of foreign exchange rate changes on non-U.S. dollar denominated commitments.

Asset Class Summary

	Three Months Ended										Percentage Change
(in millions)	December 31, 2023		March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024		vs. FQ3’24
FEAUM
Private equity	$	48,258	$	49,869	$	54,855	$	57,136	$	62,811	30	%
Infrastructure		19,789		20,114		20,377		20,986		23,411	18	%
Private debt		15,460		15,477		16,161		16,975		17,882	16	%
Real estate		5,925		8,398		8,963		9,318		10,062	70	%
Total	$	89,432	$	93,858	$	100,356	$	104,415	$	114,166	28	%

Separately managed accounts	$	56,660	$	58,897	$	60,272	$	62,121	$	69,974	23	%
Focused commingled funds		32,772		34,961		40,084		42,294		44,192	35	%
Total	$	89,432	$	93,858	$	100,356	$	104,415	$	114,166	28	%

AUM⁽¹⁾
Private equity	$	78,221	$	81,942	$	89,329	$	91,891	$	93,404	19	%
Infrastructure		28,307		30,003		32,756		35,392		36,156	28	%
Private debt		27,782		28,491		30,336		31,854		31,987	15	%
Real estate		14,646		16,201		16,912		16,996		17,665	21	%
Total	$	148,956	$	156,637	$	169,333	$	176,133	$	179,212	20	%

Separately managed accounts	$	88,890	$	93,938	$	103,003	$	107,252	$	109,305	23	%
Focused commingled funds		45,508		48,545		51,682		53,870		55,142	21	%
Advisory AUM		14,558		14,154		14,648		15,011		14,765	1	%
Total	$	148,956	$	156,637	$	169,333	$	176,133	$	179,212	20	%

AUA
Private equity	$	266,246	$	270,350	$	279,909	$	255,125	$	263,420	(1	)%
Infrastructure		57,528		60,339		62,599		62,891		67,100	17	%
Private debt		17,916		21,976		22,280		19,328		19,325	8	%
Real estate		168,802		168,455		166,659		168,519		168,807	—	%
Total	$	510,492	$	521,120	$	531,447	$	505,863	$	518,652	2	%

Total capital responsibility⁽²⁾	$	659,448	$	677,757	$	700,780	$	681,996	$	697,864	6	%

_____________________________
Note: Amounts may not sum to total due to rounding. AUM/AUA reflects final data for the prior period, adjusted for net new client account activity through the period presented, and does not include post-period investment valuation or cash activity. Net asset value (“NAV”) data for underlying investments is as of the prior period, as reported by underlying managers up to the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end. When NAV data is not available by the business day occurring on or after 100 days, or 115 days at the fiscal year-end, following the prior period end, such NAVs are adjusted for cash activity following the last available reported NAV.
(1) Allocation of AUM by asset class is presented by underlying investment asset classification.
(2) Total capital responsibility equals assets under management (AUM) plus assets under advisement (AUA).

Contacts

Shareholder Relations:
Seth Weiss
shareholders@stepstonegroup.com
1-212-351-6106

Media:
Brian Ruby / Chris Gillick / Matt Lettiero, ICR
StepStonePR@icrinc.com
1-203-682-8268

Glossary

Assets under advisement, or “AUA,” consists of client assets for which we do not have full discretion to make investment decisions but play a role in advising the client or monitoring their investments. We generally earn revenue for advisory-related services on a contractual fixed fee basis. Advisory-related services include asset allocation, strategic planning, development of investment policies and guidelines, screening and recommending investments, legal negotiations, monitoring and reporting on investments, and investment manager review and due diligence. Advisory fees vary by client based on the scope of services, investment activity and other factors. Most of our advisory fees are fixed, and therefore, increases or decreases in AUA do not necessarily lead to proportionate changes in revenue. We believe AUA is a useful metric for assessing the relative size of our advisory business.

Our AUA is calculated as the sum of (i) the NAV of client portfolio assets for which we do not have full discretion and (ii) the unfunded commitments of clients to the underlying investments. Our AUA reflects the investment valuations in respect of the underlying investments of our client accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUA does not include post-period investment valuation or cash activity. AUA as of December 31, 2024 reflects final data for the prior period (September 30, 2024), adjusted for net new client account activity through December 31, 2024. NAV data for underlying investments is as of September 30, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following September 30, 2024. When NAV data is not available by the business day occurring on or after 100 days following September 30, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.

Assets under management, or “AUM,” primarily reflects the assets associated with our separately managed accounts (“SMAs”) and focused commingled funds. We classify assets as AUM if we have full discretion over the investment decisions in an account or have responsibility or custody of assets. Although management fees are based on a variety of factors and are not linearly correlated with AUM, we believe AUM is a useful metric for assessing the relative size and scope of our asset management business.

Our AUM is calculated as the sum of (i) the net asset value (“NAV”) of client portfolio assets, including the StepStone Funds and (ii) the unfunded commitments of clients to the underlying investments and the StepStone Funds. Our AUM reflects the investment valuations in respect of the underlying investments of our funds and accounts on a three-month lag, adjusted for new client account activity through the period end. Our AUM does not include post-period investment valuation or cash activity. AUM as of December 31, 2024 reflects final data for the prior period (September 30, 2024), adjusted for net new client account activity through December 31, 2024. NAV data for underlying investments is as of September 30, 2024, as reported by underlying managers up to the business day occurring on or after 100 days following September 30, 2024. When NAV data is not available by the business day occurring on or after 100 days following September 30, 2024, such NAVs are adjusted for cash activity following the last available reported NAV.

Consolidated Funds refer to the StepStone Funds that we are required to consolidate as of the applicable reporting period. We consolidate funds and other entities in which we hold a controlling financial interest.

Consolidated VIEs refer to the variable interest entities that we are required to consolidate as of the applicable reporting period. We consolidate VIEs in which we hold a controlling financial interest.

Fee-earning AUM, or “FEAUM,” reflects the assets from which we earn management fee revenue (i.e., fee basis) and includes assets in our SMAs, focused commingled funds and assets held directly by our clients for which we have fiduciary oversight and are paid fees as the manager of the assets. Our SMAs and focused commingled funds typically pay management fees based on capital commitments, net invested capital and, in certain cases, NAV, depending on the fee terms. Management fees are only marginally affected by market appreciation or depreciation because substantially all of the StepStone Funds pay management fees based on capital commitments or net invested capital. As a result, management fees and FEAUM are not materially affected by changes in market value. We believe FEAUM is a useful metric in order to assess assets forming the basis of our management fee revenue.

Legacy Greenspring entities refers to certain entities for which the Company, indirectly through its subsidiaries, became the sole and/or managing member in connection with the Greenspring acquisition.

SSG refers solely to StepStone Group Inc., a Delaware corporation, and not to any of its subsidiaries.

StepStone Funds refer to SMAs and focused commingled funds of the Company, including acquired Greenspring funds, for which the Partnership or one of its subsidiaries acts as both investment adviser and general partner or managing member.

The Partnership refers solely to StepStone Group LP, a Delaware limited partnership, and not to any of its subsidiaries.

Total capital responsibility equals AUM plus AUA. AUM includes any accounts for which StepStone Group has full discretion over the investment decisions, has responsibility to arrange or effectuate transactions, or has custody of assets. AUA refers to accounts for which StepStone Group provides advice or consultation but for which the firm does not have discretionary authority, responsibility to arrange or effectuate transactions, or custody of assets.

Undeployed fee-earning capital represents the amount of capital commitments to StepStone Funds that has not yet been invested or considered active but will generate management fee revenue once invested or activated. We believe undeployed fee-earning capital is a useful metric for measuring the amount of capital that we can put to work in the future and thus earn management fee revenue thereon.

The MIL Network –

February 7, 2025

MIL-OSI: DTE Energy names Casey Santos to board of directors

Source: GlobeNewswire (MIL-OSI)

Detroit, Feb. 06, 2025 (GLOBE NEWSWIRE) — DTE Energy (NYSE: DTE) has named Casey Santos to its board of directors effective Feb. 6. Santos recently joined Caliber as chief technology officer. Prior to Caliber, Santos led Asurion’s global technology and procurement teams as their chief information officer. She has more than 25 years of experience as an executive leader, an independent board director for public and private organizations, and advisor with expertise across a diverse range of industries, business lines and functions.

“We are pleased to welcome Casey to DTE Energy’s board of directors,” said Jerry Norcia, chairman and CEO of DTE Energy. “Her deep expertise in leading innovation, digital transformation, artificial intelligence and cybersecurity will be invaluable to DTE as we work to build the grid of the future and deliver safe, reliable, affordable and cleaner energy to our customers now and in the years to come.”

“DTE Energy’s mission to improve people’s lives with their energy directly aligns with my values,” Santos said. “Energy is essential to modern life, and I look forward to contributing my personal energy to serve millions of people in Michigan and across the United States.”

Prior to her work at Asurion, Santos held technology leadership roles in the finance industry and was a strategy consultant with McKinsey serving clients in the United States and Europe. Santos began her career as a NASA Flight Controller supporting over 20 space shuttle missions, including the first MIR docking and Hubble Telescope repair missions.

Santos earned a Bachelor of Science degree in aeronautics and astronautics from Massachusetts Institute of Technology and holds dual master’s degrees from the University of Pennsylvania, including a Master of Business Administration from the Wharton School and a Master of Arts in management from the Lauder Institute. She has been recognized for her contributions to the industry and community, most recently as a Top 100 Chief in Tech Leaders to Watch in 2024 by WomenTech Network, Nashville Technology Council’s CIO of the Year in 2023, and a HiTec 100 Leader in 2019 and 2023. She is a member of Latino Corporate Directors Association, Women Corporate Directors, NACD, and T200. She is the Board Chair of the Nashville Technology Council and works with non-profits to help advance STEM education and technology leadership.

About DTE Energy

DTE Energy (NYSE:DTE) is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. Its operating units include an electric company serving 2.3 million customers in Southeast Michigan and a natural gas company serving 1.3 million customers across Michigan. The DTE portfolio also includes energy businesses focused on custom energy solutions, renewable energy generation, and energy marketing and trading. DTE has continued to accelerate its carbon reduction goals to meet aggressive targets and is committed to serving with its energy through volunteerism, education and employment initiatives, philanthropy, emission reductions and economic progress. Information about DTE is available at dteenergy.com, empoweringmichigan.com, x.com/DTE_Energy and facebook.com/dteenergy.

Attachment

Casey Santos

The MIL Network –

February 7, 2025

MIL-OSI: ESCO Reports First Quarter Fiscal 2025 Results

Source: GlobeNewswire (MIL-OSI)

St. Louis, Feb. 06, 2025 (GLOBE NEWSWIRE) — ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the first quarter ended December 31, 2024 (Q1 2025).

Operating Highlights

Q1 2025 Sales increased $28.7 million (13.2 percent) to $247.0 million compared to $218.3 million in Q1 2024.
Q1 2025 Entered Orders were $275.0 million for a book-to-bill ratio of 1.11x, resulting in record backlog of $907 million.
Q1 2025 GAAP EPS increased 54 percent to $0.91 per share compared to $0.59 per share in Q1 2024.
Q1 2025 Adjusted EPS as defined in prior guidance increased 48 percent to $0.92 per share compared to $0.62 per share in Q1 2024.
Beginning in Q1 2025 we are excluding acquisition related amortization (which was $0.15 per share in Q1 2025) from our Adjusted EPS calculation. Q1 2025 Adjusted EPS excluding acquisition related amortization increased 41 percent to $1.07 per share compared to $0.76 per share in Q1 2024.
Net cash provided by operating activities was $34 million in Q1 2025, an increase of $25 million compared to the prior year period, as cash flow was positively impacted by higher net earnings and favorable working capital impacts.

Bryan Sayler, Chief Executive Officer and President, commented, “Our fiscal year got off to an outstanding start as we delivered 13 percent top line growth, over 200 basis points of Adjusted EBITDA margin expansion, and a 41 percent increase in Adjusted EPS compared to the prior year. All three segments delivered solid revenue growth, highlighted by notable strength across our Navy, commercial aerospace and utility end-markets. It was also great to see our Test business deliver a solid quarter with improving order flow, double digit revenue growth, and over 500 basis points of margin expansion.

“The ESCO team continues to build upon our strong position in attractive markets to increase value across the enterprise. Overall, it was a great way to start the year, with continuing momentum across our end markets giving us the confidence to raise our full year earnings guidance.”

Segment Performance

Aerospace & Defense (A&D)

Sales increased $19.6 million (21 percent) to $114.3 million in Q1 2025 from $94.7 million in Q1 2024. The Q1 increase was driven by strength in Navy and commercial aerospace, partially offset by lower defense aerospace.
Q1 2025 EBIT and Adjusted EBIT both increased $4.9 million to $21.6 million (18.9 percent margin) from $16.7 million (17.6 percent margin) in Q1 2024. Margin improvement was driven by leverage on higher volume and price increases, partially offset by inflationary pressures and mix.
Entered Orders decreased $51 million (30 percent) to $121 million in Q1 2025 compared to $172 million in Q1 2024. The decrease in orders was primarily driven by large Navy orders for Virginia Class Block V surface hull tiles and Block VI long lead material procurement for the Light-Weight Wide Aperture Array (LWWAA) in Q1 2024, partially offset by higher Q1 2025 Navy ejection valve and spares orders. Orders in the quarter resulted in a segment book-to-bill of 1.06x and record ending backlog of $607 million.

Utility Solutions Group (USG)

Sales increased $3.7 million (4 percent) to $86.7 million in Q1 2025 from $83.0 million in Q1 2024. Doble’s sales increased by $7.9 million (12 percent) driven by a strong quarter for offline and protection testing products and services. NRG sales decreased $4.2 million (22 percent) due to moderation in renewable energy projects in the quarter.
EBIT increased $2.9 million in Q1 2025 to $20.5 million from $17.6 million in Q1 2024. Adjusted EBIT increased $2.8 million to $20.5 million (23.6 percent margin) from $17.7 million (21.4 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and mix, partially offset by inflationary pressures.
Entered Orders increased $13 million (16 percent) to $90 million in Q1 2025. Doble orders increased by $10 million (15 percent) on strength across their product portfolio and highlighted by a $4.3 million order for offline test equipment at Phenix. NRG orders increased by $3 million in the quarter. The segment book-to-bill was 1.03x in the quarter and resulted in an ending backlog of $123 million.

RF Test & Measurement (Test)

Sales increased $5.5 million (13 percent) to $46.1 million in Q1 2025 from $40.6 million in Q1 2024. Sales growth primarily related to higher U.S. shielding, Test and Measurement in EMEA, and MPE filter sales.
EBIT increased $2.6 million in Q1 2025 to $4.4 million from $1.8 million in Q1 2024. Adjusted EBIT increased $2.8 million in Q1 2025 to $4.9 million (10.6 percent margin) from $2.1 million (5.1 percent margin) in Q1 2024. Margin was favorably impacted by leverage on higher volume, price increases, and cost reduction efforts, partially offset by inflationary pressures and mix.
Entered Orders increased $20 million (43 percent) to $65 million in Q1 2025. The increase was driven by a strong quarter for EMC Test & Measurement, A&D, and medical and industrial shielding orders. The segment book-to-bill was 1.41x in the quarter and resulted in ending backlog of $177 million.

Business Outlook – 2025
Beginning in Q1 2025, acquisition related amortization will be excluded from our Adjusted Earnings calculation. Our current assessment of FY 2025 acquisition related amortization does not include the impact of the pending SM&P acquisition. The initial fiscal 2025 guidance issued in our November press release is revised as follows:

	Guidance Range
November FY 2025 Adjusted EPS Guidance	$	4.70	$	4.90
Acquisition Related Amortization	$	0.60	$	0.60
Revised November FY 2025 Adjusted EPS Guidance	$	5.30	$	5.50

Due to strong market conditions and continued improvement in operational performance, we are raising our full-year guidance by $0.25 to a range of $5.55 to $5.75 (16 to 21 percent growth over the prior year) from $5.30 to $5.50. This guidance is in line with our initial revenue guidance range of $1.09 to $1.11 billion (6 to 8 percent annual growth).

	Guidance Range
Revised November FY 2025 Adjusted EPS Guidance	$	5.30	$	5.50
Guidance Increase	$	0.25	$	0.25
Revised FY 2025 Adjusted EPS Guidance	$	5.55	$	5.75

Management’s current expectation is for Q2 Adjusted EPS in the range of $1.20 to $1.30, which represents 10 to 19 percent growth over the prior year quarter.

	Guidance Range
Q2 2025 Adjusted EPS Guidance (prior methodology)	$	1.05	$	1.15
Acquisition Related Amortization	$	0.15	$	0.15
Q2 2025 Adjusted EPS Guidance	$	1.20	$	1.30

SM&P Acquisition
As announced on July 8, 2024, ESCO has agreed to acquire the Signature Management & Power (SM&P) business of Ultra Maritime for a purchase price of $550 million. The closing of the transaction is subject to certain conditions, including the completion of the regulatory approval processes in the United States (US) and the United Kingdom (UK). The US closing conditions have been met. We are in the final stages of the UK government assessment of the transaction and we are optimistic that the assessment will be positively resolved in the near term. Our current expectation would be to close the transaction either in our second or early in our third fiscal quarter. SM&P’s sole source product offerings will add significant scale to the ESCO Navy business, providing increased content on domestic Navy submarine and surface ship programs and expansion into vital UK and AUKUS navy platforms.

Dividend Payment
The next quarterly cash dividend of $0.08 per share will be paid on April 17, 2025 to stockholders of record on April 2, 2025.

Conference Call
The Company will host a conference call today, February 6, at 4:00 p.m. Central Time, to discuss the Company’s Q1 2025 results. A live audio webcast and an accompanying slide presentation will be available in the Investor Center of ESCO’s website. Participants may also access the webcast using this registration link. For those unable to participate, a webcast replay will be available after the call in the Investor Center of ESCO’s website.

Forward-Looking Statements
Statements in this press release regarding Management’s intentions, expectations and guidance for fiscal 2025, including restructuring and cost reduction actions, sales, orders, revenues, margin, earnings, Adjusted EPS, acquisition related amortization, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this presentation, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and the following: the timing and outcome, if any, of the Company’s strategic alternatives review of VACCO and its Space business; of the Company’s pending acquisition of SM&P; the impacts of climate change and related regulation of greenhouse gases; the impacts of labor disputes, civil disorder, wars, elections, political changes, tariffs and trade disputes, terrorist activities, cyberattacks or natural disasters on the Company’s operations and those of the Company’s customers and suppliers; disruptions in manufacturing or delivery arrangements due to shortages or unavailability of materials or components or supply chain disruptions; inability to access work sites; the timing and content of future contract awards or customer orders; the timely appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties or data breaches; the availability of acquisitions; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; material changes in the costs and availability of certain raw materials; material changes in the cost of credit; changes in laws and regulations including but not limited to changes in accounting standards and taxation; changes in interest, inflation and employment rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration and performance of acquired businesses.

Non-GAAP Financial Measures
The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA, and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation, and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA, and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

About ESCO
ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products for the aviation, Navy, space, and process markets worldwide and composite-based products and solutions for Navy, defense, and industrial customers. ESCO is an industry leader in designing and manufacturing RF test and measurement products and systems; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit the Company’s website at www.escotechnologies.com.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share amounts)

					Three Months Ended December 31, 2024				Three Months Ended December 31, 2023

Net Sales				$	247,026				218,314
Cost and Expenses:
		Cost of sales			148,642				134,151
		Selling, general and administrative expenses			58,784				53,968
		Amortization of intangible assets			7,993				7,868
		Interest expense			2,257				2,667
		Other (income) expenses, net			(591	)			206
			Total costs and expenses		217,085				198,860

Earnings before income taxes					29,941				19,454
Income tax expense					6,468				4,285

			Net earnings	$	23,473				15,169

			Earnings Per Share (EPS)

			Diluted – GAAP	$	0.91				0.59

			Diluted – As Adjusted Basis	$	1.07		(1	)	0.76	(2	)

			Diluted average common shares O/S:		25,834				25,846

(1	)	Q1 2025 Adjusted EPS excludes $0.16 per share of after-tax charges consisting primarily of $0.01 of restructuring charges within the Test segment and acquisition related costs at Corporate and $0.15 of acquisition related amortization.

(2	)	Q1 2024 Adjusted EPS excludes $0.17 per share of after-tax charges consisting primarily of $0.03 of MPE acquisition inventory step-up and backlog charges and acquisition related costs and $0.14 of acquisition related amortization.

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)

				GAAP				As Adjusted
				Q1 2025		Q1 2024		Q1 2025		Q1 2024
Net Sales
	Aerospace & Defense		$	114,301		94,733		114,301		94,733
	USG			86,660		82,984		86,660		82,984
	Test			46,065		40,597		46,065		40,597
		Totals	$	247,026		218,314		247,026		218,314

EBIT
	Aerospace & Defense		$	21,596		16,663		21,622		16,663
	USG			20,489		17,625		20,489		17,745
	Test			4,422		1,779		4,887		2,052
	Corporate			(14,309	)	(13,946	)	(9,310	)	(8,600	)
		Consolidated EBIT		32,198		22,121		37,688		27,860
		Less: Interest expense		(2,257	)	(2,667	)	(2,257	)	(2,667	)
		Less: Income tax expense		(6,468	)	(4,285	)	(7,730	)	(5,605	)
		Net earnings	$	23,473		15,169		27,701		19,588

Note 1: Adjusted net earnings of $27.7 million in Q1 2025 exclude $4.2 million (or $0.16 per share) of after-tax charges consisting primarily of restructuring charges within the Test segment and acquisition related costs at Corporate, and acquisition related amortization.

Note 2: Adjusted net earnings of $19.6 million in Q1 2024 exclude $4.4 million (or $0.17 per share) of after-tax charges consisting primarily of MPE acquisition inventory step-up and backlog charges and acquisition related costs, and acquisition related amortization.

EBITDA Reconciliation to Net earnings:								Adjusted		Adjusted
				Q1 2025		Q1 2024		Q1 2025		Q1 2024
Consolidated EBITDA			$	46,005		35,573		46,498		36,408
Less: Depr & Amort				(13,807	)	(13,452	)	(8,810	)	(8,548	)
Consolidated EBIT				32,198		22,121		37,688		27,860
Less: Interest expense				(2,257	)	(2,667	)	(2,257	)	(2,667	)
Less: Income tax expense				(6,468	)	(4,285	)	(7,730	)	(5,605	)
Net earnings			$	23,473		15,169		27,701		19,588

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)

				December 31, 2024	September 30, 2024

Assets
	Cash and cash equivalents		$	71,284	65,963
	Accounts receivable, net			202,661	240,680
	Contract assets			131,404	130,534
	Inventories			219,383	209,164
	Other current assets			20,779	22,308
		Total current assets		645,511	668,649
	Property, plant and equipment, net			168,468	170,596
	Intangible assets, net			396,302	407,602
	Goodwill			532,312	539,899
	Operating lease assets			38,710	37,744
	Other assets			13,761	14,130
			$	1,795,064	1,838,620

Liabilities and Shareholders’ Equity
	Current maturities of long-term debt		$	20,000	20,000
	Accounts payable			75,881	98,371
	Contract liabilities			129,737	124,845
	Other current liabilities			90,491	106,638
		Total current liabilities		316,109	349,854
	Deferred tax liabilities			75,520	75,333
	Non-current operating lease liabilities			36,400	34,810
	Other liabilities			38,102	39,273
	Long-term debt			92,000	102,000
	Shareholders’ equity			1,236,933	1,237,350
			$	1,795,064	1,838,620

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)

		Three Months Ended December 31, 2024		Three Months Ended December 31, 2023
Cash flows from operating activities:
Net earnings	$	23,473		15,169
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization		13,807		13,452
Stock compensation expense		2,524		2,180
Changes in assets and liabilities		(7,151	)	(22,539	)
Effect of deferred taxes		1,521		484
Net cash provided by operating activities		34,174		8,746

Cash flows from investing activities:
Acquisition of business, net of cash acquired		–		(56,179	)
Capital expenditures		(5,208	)	(7,848	)
Additions to capitalized software		(2,587	)	(2,942	)
Net cash used by investing activities		(7,795	)	(66,969	)

Cash flows from financing activities:
Proceeds from long-term debt		42,000		99,000
Principal payments on long-term debt and short-term borrowings		(52,000	)	(29,000	)
Dividends paid		(2,064	)	(2,064	)
Purchases of common stock into treasury		–		–
Other		(6,031	)	(1,432	)
Net cash (used) provided by financing activities		(18,095	)	66,504

Effect of exchange rate changes on cash and cash equivalents		(2,963	)	1,249

Net increase in cash and cash equivalents		5,321		9,530
Cash and cash equivalents, beginning of period		65,963		41,866
Cash and cash equivalents, end of period	$	71,284		51,396

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)

Backlog And Entered Orders – Q1 2025			A&D		USG		Test		Total
	Beginning Backlog – 10/1/24	$	600,382		119,943		158,644		878,969
	Entered Orders		120,606		89,574		64,825		275,005
	Sales		(114,301	)	(86,660	)	(46,065	)	(247,026	)
	Ending Backlog – 12/31/24	$	606,687		122,857		177,404		906,948

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)

EPS – Adjusted Basis Reconciliation – Q1 2025
	EPS – GAAP Basis – Q1 2025	$	0.91
	Adjustments (defined below)		0.16
	EPS – As Adjusted Basis – Q1 2025	$	1.07

	Adjustments exclude $0.16 per share consisting primarily of $0.01 of restructuring
	charges within the Test segment and acquisition related costs at Corporate and
	$0.15 of acquisition related amortization.
	The $0.16 of EPS adjustments per share consists of $5,490K of pre-tax charges
	offset by $1,262K of tax benefit for net impact of $4,228K.

EPS – Adjusted Basis Reconciliation – Q1 2024
	EPS – GAAP Basis – Q1 2024	$	0.59
	Adjustments (defined below)		0.17
	EPS – As Adjusted Basis – Q1 2024	$	0.76

	Adjustments exclude $0.17 per share consisting primarily of $0.03 of MPE
	acquisition inventory step-up and backlog charges and acquisition related costs and
	$0.14 of acquisition related amortization.
	The $0.17 of EPS adjustments per share consists of $5,739K of pre-tax charges
	offset by $1,320K of tax benefit for net impact of $4,419K.

EPS – Adjusted Basis Reconciliation – Q2 2025 Guidance			Low	High
	EPS – GAAP Basis – Q2 2025	$	1.05	1.15
	Adjustments (defined below)		0.15	0.15
	EPS – As Adjusted Basis – Q2 2025	$	1.20	1.30

	Adjustments exclude an estimated $0.15 of acquisition related amortization.
	The estimated $0.15 of EPS adjustment per share consists of $5.0 million of pre-tax charges
	offset by $1.15 million of tax benefit for net impact of $3.85 million.

EPS – Adjusted Basis Reconciliation – FY 2025 Guidance			Low	High
	EPS – GAAP Basis – FY 2025	$	4.94	5.14
	Adjustments (defined below)		0.61	0.61
	EPS – As Adjusted Basis – FY 2025	$	5.55	5.75

	Adjustments exclude $0.61 per share consisting primarily of $0.01 of restructuring charges within
	the Test segment and acquisition related costs at Corporate and an estimated $0.60 of acquisition
	related amortization. The estimated $0.61 of EPS adjustments per share consists of $20.5
	million of pre-tax charges offset by $4.7 million of tax benefits for net impact of $15.8 million.

SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277

The MIL Network –

February 7, 2025

MIL-OSI: Northeast Bank Reports Second Quarter Results and Declares Dividend

Source: GlobeNewswire (MIL-OSI)

PORTLAND, Maine, Feb. 06, 2025 (GLOBE NEWSWIRE) — Northeast Bank (the “Bank”) (NASDAQ: NBN), a Maine-based full-service bank, today reported net income of $22.4 million, or $2.74 per diluted common share, for the quarter ended December 31, 2024, compared to net income of $14.1 million, or $1.85 per diluted common share, for the quarter ended December 31, 2023. Net income for the six months ended December 31, 2024 was $39.5 million, or $4.85 per diluted common share, compared to $29.2 million, or $3.86 per diluted common share, for the six months ended December 31, 2023.

The Board of Directors declared a cash dividend of $0.01 per share, payable on March 4, 2025, to shareholders of record as of February 18, 2025.

Discussing these results, Rick Wayne, Chief Executive Officer, said, “Our National Lending Division generated $260.4 million in originated and purchased volume for the quarter, including record originations of $246.4 million. Our small balance SBA 7(a) program with Newity LLC as our loan service provider has continued to grow. For the quarter, we originated $100.3 million, compared to $82.4 million for the quarter ended September 30, 2024 and $13.6 million for the quarter ended December 31, 2023. During the current quarter we sold $64.5 million of the guaranteed portion of our SBA loans, generating a gain on sale of $5.6 million. Additionally, we approved and initiated an additional at-the-market (“ATM”) offering of up to $75.0 million of our voting common stock, which provides the Bank with the ability to raise capital if and as needed. We are reporting earnings of $2.74 per diluted common share, a return on average equity of 21.1%, and a return on average assets of 2.2%.”

As of December 31, 2024, total assets were $4.08 billion, an increase of $950.9 million, or 30.4%, from total assets of $3.13 billion as of June 30, 2024.

1. The following table highlights the changes in the loan portfolio, including loans held for sale, for the six months ended December 31, 2024:

	Loan Portfolio Changes
	December 31, 2024 Balance		June 30, 2024 Balance			Change ($)		Change (%)
	(Dollars in thousands)
National Lending Purchased	$	2,392,417	$	1,708,551	$	683,866		40.03	%
National Lending Originated		1,109,192		981,497		127,695		13.01	%
SBA National		103,554		48,405		55,149		113.92	%
Community Banking		20,857		22,704		(1,847	)	(8.14	%)
Total	$	3,626,020	$	2,761,157	$	864,863		31.32	%

Loans generated by the Bank’s National Lending Division for the quarter ended December 31, 2024 totaled $260.5 million, which consisted of $14.0 million of purchased loans at an average price of 94.8% of unpaid principal balance, and $246.4 million of originated loans.

An overview of the Bank’s National Lending Division portfolio follows:

		National Lending Portfolio
		Three Months Ended December 31,
	2024								2023
	Purchased				Originated		Total		Purchased		Originated		Total
	(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance	$		14,815		$	246,417	$	261,232	$	208,045	$	63,485	$	271,530
Initial net investment basis (1)			14,039			246,417		260,456		186,131		63,485		249,616

Loan returns during the period:
Yield			8.84%			9.06%		8.91%		9.19%		9.81%		9.43%
Total Return on Purchased Loans (2)			8.86%			N/A		8.86%		9.21%		N/A		9.21%

	Six Months Ended December 31,
	2024								2023
	Purchased				Originated		Total		Purchased		Originated		Total
	(Dollars in thousands)
Loans purchased or originated during the period:
Unpaid principal balance	$		822,549		$	373,309	$	1,195,858	$	271,741	$	131,528	$	403,269
Initial net investment basis (1)			746,932			373,309		1,120,241		238,477		131,528		370,005

Loan returns during the period:
Yield			8.84	%		9.18%		8.95%		9.10%		9.92%		9.41%
Total Return on Purchased Loans (2)			8.85%			N/A		8.85%		9.13%		N/A		9.13%

Total loans as of period end:
Unpaid principal balance	$		2,598,354		$	1,109,192	$	3,707,546	$	1,831,183	$	910,213	$	2,741,396
Net investment basis			2,392,417			1,109,192		3,501,609		1,646,756		910,213		2,556,969

^{(1) Initial net investment basis on purchased loans is the initial amortized cost basis net of initial allowance for credit losses (credit mark).}
^{(2) The total return on purchased loans represents scheduled accretion, accelerated accretion, gains (losses) on real estate owned, release of allowance for credit losses on purchased loans, and other noninterest income recorded during the period divided by the average invested balance on an annualized basis. The total return on purchased loans does not include the effect of purchased loan charge-offs or recoveries during the period. Total return on purchased loans is considered a non-GAAP financial measure. See reconciliation in below table entitled “Total Return on Purchased Loans.”}

2. Deposits increased by $811.9 million, or 34.7%, from June 30, 2024. The increase was primarily attributable to increases in time deposits of $773.5 million, or 59.2%. The significant drivers in the change in time deposits were the increase in brokered time deposits, which increased by $660.5 million, and Community Banking Division time deposits, which increased by $90.5 million compared to June 30, 2024.

3. Federal Home Loan Bank (“FHLB”) advances increased by $62.6 million, or 18.1%, from June 30, 2024. The increase was attributable to one new short-term borrowing, partially offset by net paydowns on amortizing advances.

4. Shareholders’ equity increased by $67.5 million, or 17.9%, from June 30, 2024, primarily due to net income of $39.5 million and $28.1 million of net proceeds on shares issued in connection with the Bank’s ATM program.

Net income increased by $8.4 million to $22.4 million for the quarter ended December 31, 2024, compared to net income of $14.1 million for the quarter ended December 31, 2023.

1. Net interest and dividend income before provision for credit losses increased by $11.5 million to $48.5 million for the quarter ended December 31, 2024, compared to $37.0 million for the quarter ended December 31, 2023. The increase was primarily due to the following:

An increase in interest income earned on loans of $20.2 million, primarily due to higher average balances in the National Lending Division purchased and originated and Small Business Administration (“SBA”) portfolios, partially offset by lower rates earned across the portfolio;
An increase in interest income earned on short-term investments of $925 thousand, due to higher average balances, partially offset by lower rates earned; and
A decrease in FHLB borrowings interest expense of $2.0 million, primarily due to lower average balances; partially offset by,
An increase in deposit interest expense of $11.6 million, primarily due to higher average balances, partially offset by lower rates on interest-bearing deposits.

The following table summarizes interest income and related yields recognized on the loan portfolios:

	Interest Income and Yield on Loans
	Three Months Ended December 31,
	2024						2023
	Average		Interest				Average		Interest
	Balance (1)		Income		Yield		Balance (1)		Income		Yield
	(Dollars in thousands)
Community Banking	$	21,481	$	369	6.82	%	$	25,559	$	419	6.51	%
SBA National		93,831		2,751	11.63	%		28,331		888	12.47	%
National Lending:
Originated		1,041,301		23,769	9.06	%		939,383		23,155	9.81	%
Purchased		2,407,132		53,655	8.84	%		1,551,038		35,849	9.19	%
Total National Lending		3,448,433		77,424	8.91	%		2,490,421		59,004	9.43	%
Total	$	3,563,745	$	80,544	8.97	%	$	2,544,311	$	60,311	9.43	%
	Six Months Ended December 31,
	2024						2023
	Average		Interest				Average		Interest
	Balance (1)		Income		Yield		Balance (1)		Income		Yield
	(Dollars in thousands)
Community Banking	$	21,945	$	738	6.67	%	$	26,355	$	857	6.47	%
SBA National		76,788		5,170	13.36	%		27,294		1,674	12.20	%
National Lending:
Originated		1,019,347		47,176	9.18	%		950,006		47,375	9.92	%
Purchased		2,082,969		92,797	8.84	%		1,520,215		69,519	9.10	%
Total National Lending		3,102,316		139,973	8.95	%		2,470,221		116,894	9.41	%
Total	$	3,201,049	$	145,881	9.04	%	$	2,523,870	$	119,425	9.41	%

^{(1) Includes loans held for sale.}

The components of total income on purchased loans are set forth in the table below entitled “Total Return on Purchased Loans.” When compared to the quarter ended December 31, 2023, transactional income increased by $541 thousand for the quarter ended December 31, 2024, and regularly scheduled interest and accretion increased by $17.3 million primarily due to the increase in average balances. The total return on purchased loans for the quarter ended December 31, 2024 was 8.9%, a decrease from 9.2% for the quarter ended December 31, 2023. The following table details the total return on purchased loans:

	Total Return on Purchased Loans
	Three Months Ended December 31,
	2024				2023
	Income		Return (1)		Income		Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	50,747	8.36	%	$	33,430	8.57		%
Transactional income:
Release of allowance for credit losses on purchased loans		97	0.02	%		46	0.02		%
Accelerated accretion and loan fees		2,908	0.48	%		2,419	0.62		%
Total transactional income		3,005	0.50	%		2,465	0.64		%
Total	$	53,752	8.86	%	$	35,895	9.21		%

	Six Months Ended December 31,
	2024				2023
	Income		Return (1)		Income			Return (1)
	(Dollars in thousands)
Regularly scheduled interest and accretion	$	87,906	8.37	%	$	64,460		8.44	%
Transactional income:
Release of allowance for credit losses on purchased loans		161	0.01	%		226		0.03	%
Accelerated accretion and loan fees		4,891	0.47	%		5,059		0.66	%
Total transactional income		5,052	0.48	%		5,285		0.69	%
Total	$	92,958	8.85	%	$	69,745		9.13	%

^{(1) The total return on purchased loans represents scheduled accretion, accelerated accretion, and gains (losses) on real estate owned, and release of allowance for credit losses on purchased loans recorded during the period divided by the average invested balance on an annualized basis. The total return does not include the effect of purchased loan charge-offs or recoveries in the quarter. Total return is considered a non-GAAP financial measure.}

2. Provision for credit losses increased by $1.5 million to $1.9 million for the quarter ended December 31, 2024, compared to $436 thousand in the quarter ended December 31, 2023. The increase was primarily related to loan growth and increases in specific reserves on certain loans.

3. Noninterest income increased by $4.5 million for the quarter ended December 31, 2024, compared to the quarter ended December 31, 2023, primarily due to an increase in gain on sale of SBA loans of $5.0 million, due to the sale of $64.5 million in SBA loans during the quarter ended December 31, 2024 as compared to the sale of $11.5 million during the quarter ended December 31, 2023.

4. Noninterest expense increased by $3.4 million for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023, primarily due to the following:

An increase in salaries and employee benefits expense of $1.4 million, primarily due to increases in regular and stock compensation expense;
An increase in loan expense of $1.1 million primarily related to increased expenses in connection with the origination of SBA 7(a) loans; and
An increase in FDIC insurance expense of $669 thousand, due to the growth of the Bank’s asset size and an increased assessment rate.

5. Income tax expense increased by $2.7 million to $11.0 million, or an effective tax rate of 32.9%, for the quarter ended December 31, 2024, compared to $8.3 million, or an effective tax rate of 37.1%, for the quarter ended December 31, 2023. The decrease in effective tax rate is primarily due to a write-down of the Bank’s deferred tax asset of $957 thousand in the quarter ended December 31, 2023 as a result of a change in Massachusetts income tax law.

As of December 31, 2024, nonperforming assets totaled $31.3 million, or 0.77% of total assets, compared to $28.3 million, or 0.90% of total assets, as of June 30, 2024.

As of December 31, 2024, past due loans totaled $30.5 million, or 0.85% of total loans, compared to past due loans totaling $26.3 million, or 0.95% of total loans, as of June 30, 2024.

As of December 31, 2024, the Bank’s Tier 1 leverage capital ratio was 11.2%, compared to 12.3% at June 30, 2024, and the Total risk-based capital ratio was 13.9% at December 31, 2024, compared to 14.8% at June 30, 2024. Capital ratios decreased primarily due to the increase in risk-weighted assets and average assets from significant loan growth during the six months ended December 31, 2024, partially offset by increased retained earnings and additional capital raised under the Bank’s ATM program.

Investor Call Information
Rick Wayne, Chief Executive Officer, Richard Cohen, Chief Financial Officer, and Pat Dignan, Chief Operating Officer and Chief Credit Officer of Northeast Bank, will host a conference call to discuss second quarter earnings and business outlook at 10:00 a.m. Eastern Time on Friday, February 7^th. To access the conference call by phone, please go to this link (Phone Registration), and you will be provided with dial in details. The call will be available via live webcast, which can be viewed by accessing the Bank’s website at www.northeastbank.com and clicking on the About Us – Investor Relations section. To listen to the webcast, attendees are encouraged to visit the website at least fifteen minutes early to register, download and install any necessary audio software. Please note there will also be a slide presentation that will accompany the webcast. For those who cannot listen to the live broadcast, a replay will be available online for one year at www.northeastbank.com.

About Northeast Bank
Northeast Bank (NASDAQ: NBN) is a full-service bank headquartered in Portland, Maine. We offer personal and business banking services to the Maine market via seven branches. Our National Lending Division purchases and originates commercial loans on a nationwide basis. ableBanking, a division of Northeast Bank, offers online savings products to consumers nationwide. Information regarding Northeast Bank can be found at www.northeastbank.com.

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures, including tangible common shareholders’ equity, tangible book value per share, total return on purchased loans, and efficiency ratio. The Bank’s management believes that the supplemental non-GAAP information is utilized by regulators and market analysts to evaluate a company’s financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Forward-Looking Statements
Statements in this press release that are not historical facts are 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, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We may also make forward-looking statements in other documents we file with the Federal Deposit Insurance Corporation (the “FDIC”), in our annual reports to our shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Although the Bank believes that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies, and other factors. You should not place undue reliance on our forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to significant risks, uncertainties and other factors which are, in some cases, beyond the Bank’s control. The Bank’s actual results could differ materially from those expressed or implied by such the forward-looking statements as a result of, among other factors, changes in interest rates and real estate values; changes in employment levels, general business and economic conditions on a national basis and in the local markets in which the Bank operates; changes in customer behavior due to changing business and economic conditions (including inflation and concerns about liquidity) or legislative or regulatory initiatives; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions, customer behavior or adverse economic developments; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in loan defaults and charge-off rates; changes in the value of securities and other assets, adequacy of credit loss reserves, or deposit levels necessitating increased borrowing to fund loans and investments; changes in legislation and regulation under the new U.S. presidential administration; operational risks including, but not limited to, cybersecurity, fraud, natural disasters, climate change and future pandemics; the risk that the Bank may not be successful in the implementation of its business strategy; the risk that intangibles recorded in the Bank’s financial statements will become impaired; changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Bank’s Annual Report on Form 10-K, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A as updated in the Bank’s Quarterly Reports on Form 10-Q and other filings submitted to the FDIC. These statements speak only as of the date of this release and the Bank does not undertake any obligation to update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this communication or to reflect the occurrence of unanticipated events.

NBN-F


NORTHEAST BANK
BALANCE SHEETS
(Unaudited)
(Dollars in thousands, except share and per share data)
	December 31, 2024		June 30, 2024
Assets
Cash and due from banks	$	2,538	$	2,711
Short-term investments		362,332		239,447
Total cash and cash equivalents		364,870		242,158


Available-for-sale debt securities, at fair value		27,616		48,978
Equity securities, at fair value		7,171		7,013
Total investment securities		34,787		55,991

SBA loans held for sale		35,234		14,506

Loans:
Commercial real estate		2,703,938		2,028,280
Commercial and industrial		778,189		618,846
Residential real estate		108,427		99,234
Consumer		232		291
Total loans		3,590,786		2,746,651
Less: Allowance for credit losses		44,773		26,709
Loans, net		3,546,013		2,719,942


Premises and equipment, net		25,739		27,144
Real estate owned and other possessed collateral, net		1,200		–
Federal Home Loan Bank stock, at cost		17,798		15,751
Loan servicing rights, net		841		984
Bank-owned life insurance		19,078		18,830
Accrued interest receivable		16,939		15,163
Other assets		20,555		21,734
Total assets	$	4,083,054	$	3,132,203

Liabilities and Shareholders’ Equity
Deposits:
Demand	$	159,002	$	146,727
Savings and interest checking		782,570		732,029
Money market		130,063		154,504
Time		2,079,703		1,306,203
Total deposits		3,151,338		2,339,463

Federal Home Loan Bank and other advances		407,824		345,190
Lease liability		19,461		20,252
Other liabilities		60,330		50,664
Total liabilities		3,638,953		2,755,569

Commitments and contingencies		–		–

Shareholders’ equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; no shares
issued and outstanding at December 31 and June 30, 2024		–		–
Voting common stock, $1.00 par value, 25,000,000 shares authorized;
8,492,856 and 8,127,690 shares issued and outstanding at
December 31 and June 30, 2024, respectively		8,493		8,128
Non-voting common stock, $1.00 par value, 3,000,000 shares authorized;
No shares issued and outstanding at December 31 and June 30, 2024		–		–
Additional paid-in capital		92,292		64,762
Retained earnings		343,302		303,927
Accumulated other comprehensive income (loss)		14		(183	)
Total shareholders’ equity		444,101		376,634
Total liabilities and shareholders’ equity	$	4,083,054	$	3,132,203


NORTHEAST BANK
STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except share and per share data)
		Three Months Ended December 31,							Six Months Ended December 31,
		2024				2023			2024		2023
	Interest and dividend income:
	Interest and fees on loans		$	80,544		$	60,311		$	145,881	$	119,425
	Interest on available-for-sale securities			436			560			1,031		1,043
	Other interest and dividend income			4,186			3,261			8,108		6,361
	Total interest and dividend income			85,166			64,132			155,020		126,829

	Interest expense:
	Deposits			32,777			21,175			59,367		40,433
	Federal Home Loan Bank advances			3,666			5,701			7,696		11,847
	Obligation under capital lease agreements			233			256			467		425
	Total interest expense			36,676			27,132			67,530		52,705

	Net interest and dividend income before provision for credit losses			48,490			37,000			87,490		74,124
	Provision for credit losses			1,944			436			2,366		625
	Net interest and dividend income after provision for credit losses			46,546			36,564			85,124		73,499

	Noninterest income:
	Fees for other services to customers			391			492			834		899
	Gain on sales of SBA loans			5,570			570			8,901		822
	Net unrealized gain (loss) on equity securities			(163	)		230			27		72
	Loss on real estate owned, other repossessed collateral and premises and equipment, net			–			(9	)		–		(9	)
	Bank-owned life insurance income			125			116			248		231
	Correspondent fee income			23			52			54		143
	Other noninterest income			3			15			5		87
	Total noninterest income			5,949			1,466			10,069		2,245

	Noninterest expense:
	Salaries and employee benefits			11,287			9,905			22,470		19,625
	Occupancy and equipment expense			1,103			1,101			2,182		2,206
	Professional fees			562			499			1,315		1,281
	Data processing fees			1,622			1,347			3,109		2,447
	Marketing expense			94			221			230		482
	Loan acquisition and collection expense			2,063			939			3,355		1,589
	FDIC insurance expense			956			287			1,288		644
	Other noninterest expense			1,379			1,370			2,802		2,784
	Total noninterest expense			19,066			15,669			36,751		31,058

	Income before income tax expense			33,429			22,361			58,442		44,686
	Income tax expense			10,989			8,307			18,896		15,460
	Net income		$	22,440		$	14,054		$	39,546	$	29,226

	Weighted-average shares outstanding:
	Basic			8,044,345			7,505,109			7,965,486		7,492,310
	Diluted			8,197,568			7,590,913			8,153,368		7,572,450
	Earnings per common share:
	Basic		$	2.79		$	1.87		$	4.96	$	3.90
	Diluted			2.74			1.85			4.85		3.86
	Cash dividends declared per common share		$	0.01		$	0.01		$	0.02	$	0.02


NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
	Three Months Ended December 31,
	2024						2023
			Interest		Average				Interest		Average
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Interest-earning assets:
Investment securities	$	40,004	$	436	4.32	%	$	59,797	$	560	3.73	%
Loans (1) (2) (3)		3,563,745		80,544	8.97	%		2,544,311		60,311	9.43	%
Federal Home Loan Bank stock		15,458		346	8.88	%		21,222		468	8.77	%
Short-term investments (4)		325,118		3,840	4.69	%		206,090		2,793	5.39	%
Total interest-earning assets		3,944,325		85,166	8.57	%		2,831,420		64,132	9.01	%
Cash and due from banks		2,216						2,508
Other non-interest earning assets		30,982						69,245
Total assets	$	3,977,523					$	2,903,173

Liabilities & Shareholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	581,969	$	5,932	4.04	%	$	511,217	$	5,636	4.39	%
Money market accounts		128,787		953	2.94	%		229,154		2,009	3.49	%
Savings accounts		187,701		1,653	3.49	%		122,643		917	2.97	%
Time deposits		2,080,911		24,239	4.62	%		1,022,767		12,613	4.91	%
Total interest-bearing deposits		2,979,368		32,777	4.36	%		1,885,781		21,175	4.47	%
Federal Home Loan Bank advances		336,762		3,666	4.32	%		481,824		5,701	4.71	%
Lease liability		19,599		233	4.72	%		21,361		256	4.77	%
Total interest-bearing liabilities		3,335,729		36,676	4.36	%		2,388,966		27,132	4.52	%

Non-interest bearing liabilities:
Demand deposits and escrow accounts		190,135						167,358
Other liabilities		30,501						24,616
Total liabilities		3,556,365						2,580,940
Shareholders’ equity		421,158						322,233
Total liabilities and shareholders’ equity	$	3,977,523					$	2,903,173

Net interest income			$	48,490					$	37,000

Interest rate spread					4.21	%					4.49	%
Net interest margin (5)					4.88	%					5.20	%

Cost of funds (6)					4.13	%					4.22	%

(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate. (2) Includes loans held for sale.
(3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short-term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts.

NORTHEAST BANK
AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
(Unaudited)
(Dollars in thousands)
	Six Months Ended December 31,
	2024						2023
			Interest		Average				Interest		Average
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Assets:
Interest-earning assets:
Investment securities	$	47,708	$	1,031	4.29	%	$	59,986	$	1,043	3.46	%
Loans (1) (2) (3)		3,201,049		145,881	9.04	%		2,523,870		119,425	9.41	%
Federal Home Loan Bank stock		15,961		676	8.40	%		21,790		881	8.04	%
Short-term investments (4)		285,330		7,432	5.17	%		203,946		5,480	5.34	%
Total interest-earning assets		3,550,048		155,020	8.66	%		2,809,592		126,829	8.98	%
Cash and due from banks		2,164						2,500
Other non-interest earning assets		62,527						62,753
Total assets	$	3,614,739					$	2,874,845

Liabilities & Shareholders’ Equity:
Interest-bearing liabilities:
NOW accounts	$	572,849	$	12,312	4.26	%	$	499,331	$	10,781	4.29	%
Money market accounts		138,738		2,219	3.17	%		243,725		4,142	3.38	%
Savings accounts		183,141		3,210	3.48	%		106,820		1,477	2.75	%
Time deposits		1,735,372		41,626	4.76	%		999,993		24,033	4.78	%
Total interest-bearing deposits		2,630,100		59,367	4.48	%		1,849,869		40,433	4.35	%
Federal Home Loan Bank advances		349,678		7,696	4.37	%		496,169		11,847	4.75	%
Lease liability		19,808		467	4.68	%		21,568		425	3.92	%
Total interest-bearing liabilities		2,999,586		67,530	4.47	%		2,367,606		52,705	4.43	%

Non-interest bearing liabilities:
Demand deposits and escrow accounts		182,648						168,348
Other liabilities		28,337						24,842
Total liabilities		3,210,571						2,560,796
Shareholders’ equity		404,168						314,049
Total liabilities and shareholders’ equity	$	3,614,739					$	2,874,845

Net interest income			$	87,490					$	74,124

Interest rate spread					4.19	%					4.55	%
Net interest margin (5)					4.89	%					5.25	%

Cost of funds (6)					4.21	%					4.04	%

(1) Interest income and yield are stated on a fully tax-equivalent basis using the statutory tax rate.
(2) Includes loans held for sale. (3) Nonaccrual loans are included in the computation of average, but unpaid interest has not been included for purposes of determining interest income.
(4) Short-term investments include FHLB overnight deposits and other interest-bearing deposits. (5) Net interest margin is calculated as net interest income divided by total interest-earning assets. (6) Cost of funds is calculated as total interest expense divided by total interest-bearing liabilities plus demand deposits and escrow accounts.

NORTHEAST BANK
SELECTED FINANCIAL HIGHLIGHTS AND OTHER DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
	Three Months Ended
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Net interest income	$	48,490	$	39,000	$	37,935	$	36,512	$	37,000
Provision for credit losses		1,944		422		547		596		436
Noninterest income		5,949		4,119		2,092		1,542		1,466
Noninterest expense		19,066		17,685		17,079		16,429		15,669
Net income		22,440		17,106		15,140		13,865		14,054

Weighted-average common shares outstanding:
Basic		8,044,345		7,886,148		7,765,868		7,509,320		7,505,109
Diluted		8,197,568		8,108,688		7,910,692		7,595,124		7,590,913
Earnings per common share:
Basic	$	2.79	$	2.17	$	1.95	$	1.85	$	1.87
Diluted		2.74		2.11		1.91		1.83		1.85

Dividends declared per common share	$	0.01	$	0.01	$	0.01	$	0.01	$	0.01

Return on average assets		2.24%		2.09%		1.99%		1.87%		1.93%
Return on average equity		21.14%		17.53%		16.56%		16.45%		17.35%
Net interest rate spread (1)		4.21%		4.18%		4.41%		4.27%		4.49%
Net interest margin (2)		4.88%		4.90%		5.13%		5.01%		5.20%
Efficiency ratio (non-GAAP) (3)		35.02%		41.01%		42.67%		43.17%		40.73%
Noninterest expense to average total assets		1.90%		2.16%		2.24%		2.21%		2.15%
Average interest-earning assets to average interest-bearing liabilities		118.24%		118.48%		118.78%		119.28%		118.52%

	As of:
	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Nonperforming loans:
Originated portfolio:
Residential real estate	$	2,446	$	3,976	$	2,502	$	2,573	$	2,582
Commercial real estate		3,662		4,682		1,407		2,075		2,075
Commercial and industrial		6,696		6,684		6,520		6,928		6,950
Consumer		5		–		–		–		–
Total originated portfolio		12,809		15,342		10,429		11,576		11,607
Total purchased portfolio		17,257		21,830		17,832		16,370		19,165
Total nonperforming loans		30,066		37,172		28,261		27,946		30,772
Real estate owned and other repossessed collateral, net		1,200		–		–		–		–
Total nonperforming assets	$	31,266	$	37,172	$	28,261	$	27,946	$	30,772

Past due loans to total loans		0.85%		0.89%		0.95%		1.13%		1.22%
Nonperforming loans to total loans		0.84%		1.06%		1.02%		1.05%		1.18%
Nonperforming assets to total assets		0.77%		0.94%		0.90%		0.93%		1.04%
Allowance for credit losses to total loans		1.25%		1.25%		0.97%		0.98%		1.06%
Allowance for credit losses to nonperforming loans		148.92%		117.40%		94.51%		92.83%		89.67%
Net charge-offs (recoveries)	$	869	$	1,604	$	1,347	$	2,225	$	995
Commercial real estate loans to total capital (4)		542.12%		604.38%		482.13%		509.08%		544.34%
Net loans to deposits		112.52%		110.70%		116.88%		118.15%		121.31%
Purchased loans to total loans		66.63%		69.11%		61.88%		60.99%		63.07%
Equity to total assets		10.88%		9.96%		12.02%		11.73%		11.03%
Common equity tier 1 capital ratio		12.66%		11.45%		13.84%		13.24%		12.63%
Total risk-based capital ratio		13.91%		12.70%		14.82%		14.22%		13.71%
Tier 1 leverage capital ratio		11.16%		12.06%		12.30%		11.79%		11.28%

Total shareholders’ equity	$	444,101	$	392,557	$	376,634	$	351,913	$	327,540
Less: Preferred stock		–		–		–		–		–
Common shareholders’ equity		444,101		392,557		376,634		351,913		327,540
Less: Intangible assets (5)		–		–		–		–		–
Tangible common shareholders’ equity (non-GAAP)	$	444,101	$	392,557	$	376,634	$	351,913	$	327,540

Common shares outstanding		8,492,856		8,212,026		8,127,690		7,977,690		7,804,052
Book value per common share	$	52.29	$	47.80	$	46.34	$	44.11	$	41.97
Tangible book value per share (non-GAAP) (6)		52.29		47.80		46.34		44.11		41.97

(1) The net interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.
(2) The net interest margin represents net interest income as a percent of average interest-earning assets for the period.
(3) The efficiency ratio represents noninterest expense divided by the sum of net interest income (before the credit loss provision) plus noninterest income.
(4) For purposes of calculating this ratio, commercial real estate includes all non-owner occupied commercial real estate loans defined as such by regulatory guidance, including all land development and construction loans.
(5) Includes the loan servicing rights asset. (6) Tangible book value per share represents total shareholders’ equity less the sum of preferred stock and intangible assets divided by common shares outstanding.

For More Information:
Richard Cohen, Chief Financial Officer
Northeast Bank, 27 Pearl Street, Portland, Maine 04101
207.786.3245 ext. 3249
www.northeastbank.com

The MIL Network –

February 7, 2025

MIL-OSI USA: Rosen Introduces Bill to Make More Federal Lands Available for Housing Development, Protect Public Lands in Washoe County

US Senate News:

Source: United States Senator Jacky Rosen (D-NV)

The Washoe County Lands Bill Would Protect Public Lands, Support Tribal Communities, Allow For Responsible Development, And Create New Opportunities To Lower Housing Costs
WASHINGTON, D.C. – Today, U.S. Senator Jacky Rosen (D-NV) announced that she is reintroducing the Truckee Meadows Public Lands Management Act, also known as the Washoe County Lands Bill, to expand economic development opportunities and make more land available for housing in Washoe County, support local Tribal communities, increase access to outdoor recreation, and protect public lands . As the state with the highest percentage of public land in the nation, Nevada relies on federal legislation to make land available for development, like affordable housing, and to permanently protect outdoor spaces for future generations.
For years, Senator Rosen has been working with a wide range of stakeholders across Washoe County to develop this comprehensive legislation. In 2023, she unveiled a working draft of the bill and collected feedback from hundreds of Nevadans during a public comment period, which she then incorporated into this legislation, which was previously introduced last year with the support of local government officials, conservation advocates, and business leaders.
“As Nevadans continue to deal with high housing costs, I’m working to increase the amount of federal land available for housing development to bring down home prices and support sustainable growth for Washoe County,” said Senator Rosen. “My Washoe County Lands Bill will do that while also protecting hundreds of thousands of acres of public lands and supporting our state’s Tribal communities. I’ll keep working to ensure that this bill passes this new Congress to lower housing prices for hardworking Nevada families and help shape a better future for our state.”
“I’m so proud that the Washoe County Board of County Commissioners supported Senator Rosen’s Truckee Meadows Public Lands Bill,” said Alexis Hill, Chair of the Washoe County Board of Commissioners. “We are committed to preserving our natural resources while allocating appropriate land for affordable and workforce housing, local governmental and tribal interests. We are especially excited about the potential revenue opportunities for Truckee River investments. This Bill will be a game changer for the future of northern Nevada.”
“Thank you to Senator Rosen for taking this all-important step to introduce a Lands Bill, which I believe is the single largest federal priority for the City of Sparks, Washoe County, and Reno areas,” said Ed Lawson, Mayor of the City of Sparks. “It will have a significant impact for all of us as we address the affordable housing issues throughout the region.”
“With the collaborative effort from all stakeholders and Senator Rosen’s Office since 2017, a lands bill was created to greatly benefit the entire Truckee Meadows region,” said Daryl D. Gardipe, Chair of the Reno Sparks Indian Colony. “We are hopeful the re-introduction of this bill will pass unanimously as it represents all parties’ interests in an equitable fashion. Reno-Sparks Indian Colony is appreciative of all the support we received from all stakeholders to preserve our culturally important areas and our future growth.”
“This legislation is a milestone in the history of public lands conservation in Nevada,” said Shaaron Netherton, Executive Director of Friends of Nevada Wilderness. “Northern Washoe County is home to critical wildlife habitat, uniquely dark skies, priceless cultural resources, and amazing outdoor recreation opportunities. Because Senator Rosen and her team spent countless hours consulting with multiple stakeholders, we now have a widely supported bill that will protect these values. We thank the Senator for her persistent leadership and look forward to working with her to help move this bill through Congress.”
“The Nevada Chapter of Backcountry Hunters & Anglers is pleased to support the Truckee Meadows Public Land Management Act as recently introduced by Sen. Rosen and we thank her for her leadership. We see this legislation as a good representation of compromise by many stakeholders and interests that took many years and many versions to achieve,” said Bryce Pollock, Vice Chair, Nevada Chapter of Backcountry Hunters & Anglers. “We are very appreciative of Sen. Rosen’s consideration to ensure that public land access would not be limited for hunters and anglers along the Truckee River. We look forward to the conservation of more than one million acres of public lands, including many valuable recreation areas in North Washoe County, and are excited for the addition of a public shooting range that hunters can utilize for many generations to come.”
“The Nevada Wildlife Federation thanks Senator Rosen for bringing all stakeholders together to create the Truckee Meadows Public Lands Management Act,” said Russell Kuhlman, Executive Director of Nevada Wildlife Federation. “This legislation provides the county with the opportunity to balance our increasing human population while safeguarding our access to public lands, wildlife habitat, and outdoor recreation, which includes hunting and fishing.”
“EDAWN truly appreciates the dedication Senator Rosen has given this critical issue,” said Taylor Adams, President and CEO of the Economic Development Authority of Western Nevada (EDAWN). “In addition to safeguarding the natural beauty of Northern Nevada for future generations, this bill provides much-needed land that will ensure our region can continue to deliver sustainable growth of commercial development, housing, and the infrastructure required for both.”
“The Reno + Sparks Chamber of Commerce is pleased to support Senator Rosen’s land management legislation,” said Ann Silver, CEO of the Reno + Sparks Chamber of Commerce. “The legislation provides a pathway for communities in the Truckee Meadows to develop much-needed affordable housing and expanded land uses that can be managed as we continue to grow. The legislation also conserves pristine areas in northern Nevada where residents, tribes, and visitors can explore and recreate.”
Senator Rosen’s Truckee Meadows Public Lands Management Act will:

Permanently protect more than 1,000,000 acres of public lands.
Promote sustainable growth and economic development by directing over 15,200 acres of public lands to be made eligible for sale, all of which must be assessed for its suitability for new affordable housing. An additional 33 acres are set aside to only be sold for affordable housing. Any land sold for affordable housing would have to be sold at less than fair market value.
Support local Tribal communities by expanding land held in trust by more than 8,400 acres for the Reno-Sparks Indian Colony, 11,300 acres for the Pyramid Lake Paiute Tribe, and over 1,000 acres for the Washoe Tribe of Nevada and California.
Provide local governments over 3,700 acres for public purposes such as parks, water treatment facilities, and schools. Land is specifically conveyed to Washoe County, the City of Reno, the City of Sparks, the Incline Village General Improvement District, the Gerlach General Improvement District, the State of Nevada, the Truckee River Flood Management Authority, the Washoe County School District, and the University of Nevada Reno.

Senator Rosen has been working tirelessly to pass her Washoe County Lands Bill. Last year, she successfully urged the Senate Energy and Natural Resources Committee to hold a hearing on this legislation. After it passed out of committee, she took to the Senate floor to try to pass the legislation by unanimous consent, but was blocked by Washington politicians. She vowed to reintroduce the Washoe County Bill in her second term and is fulfilling that promise today.

MIL OSI USA News –

February 7, 2025

MIL-OSI: First Pacific Bancorp Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

WHITTIER, Calif., Feb. 06, 2025 (GLOBE NEWSWIRE) — First Pacific Bancorp (the “Company”) (OTC Pink: FPBC), the holding company for First Pacific Bank (the “Bank”), today reported consolidated results for the fourth quarter and year ending December 31, 2024, marking its seventh consecutive quarter of profitability. The Company remains well-capitalized, with a robust liquidity position supported by a stable core deposit base and access to substantial sources of liquidity.

Highlights for the fourth quarter and full year 2024 include:

Total assets ended 2024 at $433 million, up $13 million from $420 million at year end 2023.
Total deposits ended 2024 at $351 million, up $18 million since year end 2023.
Total loans ended 2024 at $277 million, up $2 million from year end 2023.
Asset quality remains excellent with minimal levels of classified or non-performing assets.
The Bank ended the fourth quarter with a strong capital position, with a leverage capital ratio of 9.0% and a total risk-based capital ratio of 13.4%.
As of December 31, 2024, cash and cash equivalents totaled $41 million, including funds invested overnight, up $19 million since year end 2023.
Unused borrowing capacity from credit facilities in place on December 31, 2024, totaled $167 million.

For the fourth quarter ending December 31, 2024, the Company realized a pre-tax, pre-provision profit of $702 thousand, compared to a pre-tax, pre-provision profit of $345 thousand in Q3 2024. Net income for the fourth quarter of 2024 was $500 thousand, up from $249 thousand in Q3 2024. For the twelve months ending December 31, 2024, the Company reported $1.1 million in net income, up from a net loss of $164 thousand reported for the twelve months ending December 31, 2023.

Asset quality remains excellent with minimal non-performing assets and the allowance for credit losses is 1.15% of total loans. There was no provision for credit losses recognized for the year ending 2024, compared to $906 thousand for the year ending December 31, 2023.

“We are pleased to close out 2024 on a strong note, achieving seven consecutive quarters of profitability and demonstrating the success of our strategic approach,” said Joe Matranga, Chairman of the Board of Directors. “With a solid capital position, strong liquidity, and sound financial standing, we are well-positioned to continue to execute our strategy and drive sustainable, long-term value for our stakeholders.”

“We delivered another strong quarter of financial results highlighted by loan and deposit growth, excellent asset quality, and a solid capital and liquidity position,” said Nathan Rogge, President and Chief Executive Officer. “We enter 2025 with strong momentum and a clear growth strategy, driven by strategic investments in technology and innovation designed to enhance the banking experience and reinforce our competitive advantage.”

“As a Southern California-based company, we are deeply saddened by the devastation caused by the recent wildfires. Our thoughts and prayers are with everyone impacted by this disaster and we are committed to helping Los Angeles move forward.”

ABOUT FIRST PACIFIC BANK

First Pacific Bank is a wholly owned subsidiary of First Pacific Bancorp (OTC Pink: FPBC) and is a growing community bank catering to individuals, professionals, and small-to-medium sized businesses throughout Southern California. Since opening in 2006, the Bank has offered a personalized approach, access to decision makers, a broad range of solutions, and a commitment to delivering an exceptional customer experience. First Pacific Bank operates locations in Los Angeles County, Orange County, San Diego County, and the Inland Empire. For more information, visit firstpacbank.com or call 888.BNK.AT.FPB.

FORWARD-LOOKING STATEMENTS

This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, and First Pacific Bancorp intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. Forward-looking statements relate to, among other things, our business plan, and strategies, and can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and similar expressions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause such differences include, but are not limited to: successfully realizing the benefits of our business strategy and plans,; changes in general economic and financial market conditions, either nationally or locally, in areas in which First Pacific Bank conducts its operations; effects of inflation and changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; impact of any natural disasters, including earthquakes; effect of governmental supervision and regulation, including any regulatory or other enforcement actions; legislation or regulatory changes which adversely affect First Pacific Bank’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements to reflect occurrences or unanticipated events, or circumstances after the date of such statements except as required by law.

— Summary Financial Tables Follow —

First PacificBancorp
Consolidated Balance Sheets
(Unaudited)
	Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023
ASSETS
Cash and due from banks	$	4,708,926		$	23,584,084		$	4,671,483		$	7,317,500		$	4,308,149
Fed funds sold & int-bearing balances		36,290,000			25,520,000			37,860,000			37,575,000			18,060,000
Total cash and cash equivalents		40,998,926			49,104,084			42,531,483			44,892,500			22,368,149

Debt securities (AFS)		1,866,022			3,041,852			3,077,666			5,138,340			5,257,049
Debt securities (HTM)		100,257,560			101,260,391			102,202,926			103,474,749			104,343,133
Total debt securities		102,123,582			104,302,243			105,280,592			108,613,089			109,600,182

Construction & land development		23,320,351			23,067,204			24,651,513			25,480,398			27,070,749
1-4 Family residential		58,588,090			58,082,570			68,588,393			68,521,663			66,567,165
Multifamily residential		28,561,276			28,966,811			26,800,829			26,947,419			27,128,177
Nonfarm, nonresidential real estate		100,066,570			99,715,860			94,643,169			97,893,840			99,627,812
Commercial & industrial		62,322,690			57,342,017			53,504,969			54,785,564			53,938,659
Consumer & Other		4,525,108			780,639			1,831,036			1,123,918			865,849
Total loans		277,384,085			267,955,101			270,019,909			274,752,802			275,198,411
Allowance for credit losses (loans)		(3,179,637	)		(3,109,975	)		(3,109,975	)		(3,109,975	)		(3,109,975	)
Total loans, net		274,204,448			264,845,126			266,909,934			271,642,827			272,088,436

Premises, equipment, and ROU net		1,328,964			1,452,886			1,714,833			1,992,588			2,268,671
Goodwill, core deposit & other intangibles		1,273,134			1,287,129			1,298,084			1,313,367			1,328,651
Bank owned life insurance		5,287,738			5,257,550			5,227,763			5,198,654			5,170,521
Accrued interest and other assets		7,755,355			7,505,380			7,476,554			7,415,609			7,392,301

Total Assets	$	432,972,147		$	433,754,398		$	430,439,243		$	441,068,634		$	420,216,911

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	131,515,568		$	129,473,091		$	144,240,187		$	133,945,262		$	121,348,095
Interest-bearing transaction accounts		28,454,639			24,660,000			24,797,108			28,166,207			34,716,150
Money market and savings		146,423,126			143,270,628			143,497,864			148,732,230			139,011,862
Time deposits		44,302,867			44,388,137			41,060,590			38,662,227			38,235,413
Total deposits		350,696,200			341,791,856			353,595,749			349,505,926			333,311,520

Borrowings		40,000,000			50,000,000			35,000,000			50,000,000			45,000,000
Accrued interest and other liabilities		3,122,902			3,430,132			3,781,444			3,936,909			4,530,208
Total liabilities		393,819,102			395,221,988			392,377,193			403,442,835			382,841,728

Shareholders’ Equity:
Capital stock and APIC		37,272,567			37,117,627			36,970,386			36,788,606			36,699,786
Retained earnings		2,650,877			2,151,305			1,902,788			1,705,174			1,543,264
Accum other comprehensive income		(770,399	)		(736,522	)		(811,124	)		(867,981	)		(867,867	)
Total shareholders’ equity		39,153,045			38,532,410			38,062,050			37,625,799			37,375,183

Total Liabilities and Shareholders’ Equity	$	432,972,147		$	433,754,398		$	430,439,243		$	441,068,634		$	420,216,911

First PacificBancorp
Consolidated Income Statements – Quarterly
(Unaudited)

	Dec 31, 2024		Sep 30, 2024		Jun 30, 2024		Mar 31, 2024		Dec 31, 2023
INTEREST INCOME
Loans, including fees	$	4,814,128	$	4,817,174	$	4,655,844	$	4,700,535	$	4,653,303
Debt securities		484,508		499,268		514,613		543,857		544,330
Fed funds & int-bearing balances		419,597		450,166		573,022		410,685		258,178
Total interest income		5,718,233		5,766,608		5,743,479		5,655,077		5,455,811

INTEREST EXPENSE
Deposits		1,777,351		1,790,578		1,687,121		1,746,032		1,542,541
Borrowings		332,375		444,250		524,599		507,390		705,324
Total interest expense		2,109,726		2,234,828		2,211,720		2,253,422		2,247,865

Net interest income		3,608,507		3,531,780		3,531,759		3,401,655		3,207,946

Provision for credit losses		–		–		–		–		101,538

Net interest income after provision		3,608,507		3,531,780		3,531,759		3,401,655		3,106,408

NONINTEREST INCOME
Service charges, fees and other income		119,173		106,628		96,460		108,365		108,769
Sublease income		–		53,975		52,970		53,872		53,872
Gains (losses) on sale of assets		–		15,335		–		–		(12,982	)
Gains on early payoff of debt		54,125		–		144,325		–		–
Total noninterest income		173,298		175,938		293,755		162,237		149,659

NONINTEREST EXPENSE
Salaries and benefits		1,984,774		2,154,290		2,182,674		2,178,486		1,954,029
Occupancy and equipment		258,180		374,069		363,695		368,816		384,088
Other expense		836,692		834,281		1,007,247		794,158		894,440
Total noninterest expense		3,079,646		3,362,640		3,553,616		3,341,460		3,232,557

Income before income tax expense		702,159		345,078		271,898		222,432		23,510

Income tax expense (benefit)		202,586		96,563		74,281		60,524		(31,955	)

Net Income	$	499,573	$	248,515	$	197,617	$	161,908	$	55,465

Earnings per share basic (QTR)	$	0.12	$	0.06	$	0.05	$	0.04	$	0.01
Weighted average shares outstanding (QTR)		4,293,829		4,288,851		4,283,351		4,281,653		4,231,841

First PacificBancorp
Consolidated Income Statements – Year-to-Date
(Unaudited)

	Dec 31, 2024		Dec 31, 2023
INTEREST INCOME
Loans, including fees	$	18,987,681	$	16,705,212
Investment securities		2,042,246		2,279,349
Fed funds & int-bearing balances		1,853,470		1,000,827
Total interest income		22,883,397		19,985,388

INTEREST EXPENSE
Deposits		7,001,082		4,744,486
Borrowings		1,808,614		2,440,727
Total interest expense		8,809,696		7,185,213

Net interest income		14,073,701		12,800,175

Provision for credit losses		–		905,966

Net interest income after provision		14,073,701		11,894,209

NONINTEREST INCOME
Service charges, fees and other income		430,626		455,823
Sublease income		160,817		212,074
Gains (losses) on sale of assets		15,335		129,093
Gains on early payoff of debt		198,450		123,077
Total noninterest income		805,228		920,067

NON INTEREST EXPENSE
Salaries and benefits		8,500,224		8,558,603
Occupancy and equipment		1,364,760		1,470,277
Other expense		3,472,378		3,124,577
Total noninterest expense		13,337,362		13,153,457

Income before income tax expense		1,541,567		(339,181	)

Income tax expense (benefit)		433,954		(175,262	)

Net Income (loss)	$	1,107,613	$	(163,919	)

Earnings (loss) per share basic (YTD)	$	0.26	$	(0.04	)
Weighted average shares outstanding (YTD)		4,286,945		3,992,738

First PacificBancorp
Quarterly Financial Highlights
(Unaudited)
		Quarterly
		2024		2024		2024		2024		2023
($ in thousands except per share data)		4th Qtr		3rd Qtr		2nd Qtr		1st Qtr		4th Qtr
EARNINGS
Net interest income	$	3,609		3,532		3,532		3,402		3,208
Provision for loan losses	$	0		0		0		0		102
Noninterest income	$	173		176		294		162		150
Noninterest expense	$	3,080		3,363		3,554		3,341		3,233
Income tax expense	$	203		97		74		61		(32	)
Net income	$	500		249		198		162		55

Earnings per share basic	$	0.12		0.06		0.05		0.04		0.01
Weighted average shares outstanding		4,293,829		4,288,851		4,283,351		4,281,653		4,231,841
Ending shares outstanding		4,294,500		4,291,927		4,283,351		4,283,351		4,231,841

PERFORMANCE RATIOS
Return on average assets		0.47	%	0.23	%	0.18	%	0.15	%	0.05	%
Return on average common equity		5.12	%	2.58	%	2.10	%	1.73	%	0.59	%
Yield on loans		6.91	%	6.98	%	6.97	%	6.84	%	6.69	%
Yield on earning assets		5.50	%	5.58	%	5.52	%	5.49	%	5.35	%
Cost of deposits		1.98	%	2.05	%	1.96	%	2.05	%	1.89	%
Cost of funding		2.18	%	2.32	%	2.28	%	2.35	%	2.37	%
Net interest margin		3.47	%	3.42	%	3.40	%	3.31	%	3.15	%
Efficiency ratio		81.4	%	90.7	%	92.9	%	93.8	%	96.3	%

CAPITAL
Tangible equity to tangible assets		8.77	%	8.61	%	8.57	%	8.26	%	8.61	%
Book value (BV) per common share	$	9.12		8.98		8.89		8.78		8.83
Tangible BV per common share	$	8.82		8.68		8.58		8.48		8.52

ASSET QUALITY
Net loan charge-offs (recoveries)	$	0		0		0		0		0
Allowance for credit losses (loans)	$	3,180		3,110		3,110		3,110		3,110
Allowance to total loans		1.15	%	1.16	%	1.15	%	1.13	%	1.13	%
Nonperforming loans	$	672		991		77		160		61

END OF PERIOD BALANCES
Total loans	$	277,384		267,955		270,020		274,753		275,198
Total assets	$	432,972		433,754		430,439		441,069		420,217
Deposits	$	350,696		341,792		353,596		349,506		333,312
Loans to deposits		79.1	%	78.4	%	76.4	%	78.6	%	82.6	%
Shareholders’ equity	$	39,153		38,532		38,062		37,626		37,375
Full-time equivalent employees		49		44		44		46		45

AVERAGE BALANCES (QTRLY)
Total loans	$	276,294		273,960		267,766		275,578		276,016
Earning assets	$	412,417		410,298		416,965		412,791		404,210
Total assets	$	425,750		424,199		430,830		426,592		417,595
Deposits	$	355,369		346,142		346,032		341,226		323,300
Shareholders’ equity	$	38,746		38,267		37,788		37,443		37,179

The MIL Network –

February 7, 2025

MIL-OSI: Monolithic Power Systems Earnings Commentary for the Quarter and Year Ended December 31, 2024

Source: GlobeNewswire (MIL-OSI)

KIRKLAND, Wash., Feb. 06, 2025 (GLOBE NEWSWIRE) — MPS will report its results after the market closes on February 6, 2025 and host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The live event will be held via a Zoom webcast, which can be accessed at https://mpsic.zoom.us/j/96816578886.

2024 Financial Summary	(Unaudited)
GAAP

		2024			2023		YoY Change	YoY Change (%)
Revenue ($k)	$	2,207,100		$	1,821,072		Up $ 386,028	Up 21.2%
Gross Margin		55.3	%		56.1	%	Down 0.8 pts	Down 1.4%
Opex ($k)	$	681,512		$	539,383		Up $ 142,129	Up 26.4%
Operating Margin		24.4	%		26.5	%	Down 2.1 pts	Down 7.9%
Net income ($k)	$	1,786,700		$	427,374		Up $ 1,359,326	Up 318.1%
Diluted EPS	$	36.59		$	8.76		Up $ 27.83	Up 317.7%

		2024			2023		YoY Change	YoY Change (%)
Revenue ($k)	$	2,207,100		$	1,821,072		Up $ 386,028	Up 21.2%
Gross Margin		55.8	%		56.4	%	Down 0.6 pts	Down 1.1%
Opex ($k)	$	466,379		$	385,395		Up $ 80,984	Up 21.0%
Operating Margin		34.6	%		35.2	%	Down 0.6 pts	Down 1.7%
Net income ($k)	$	689,755		$	574,647		Up $ 115,108	Up 20.0%
Diluted EPS	$	14.12		$	11.78		Up $ 2.34	Up 19.9%

Revenue by End Market

	Revenue					YoY Change					% of Total Rev
End Market ($M)		2024			2023		$		%		2024		2023
Enterprise Data	$	716.2	$	323.0		$	393.2		121.7	%	32.5	%	17.7	%
Storage & Computing		501.6		491.1			10.5		2.1	%	22.7		27.0
Automotive		414.0		394.7			19.3		4.9	%	18.8		21.7
Communications		225.9		204.9			21.0		10.2	%	10.2		11.3
Consumer		202.0		234.7			(32.7	)	(13.9	%)	9.1		12.9
Industrial		147.4		172.7			(25.3	)	(14.6	%)	6.7		9.4
Total	$	2,207.1	$	1,821.1		$	386.0		21.2	%	100	%	100	%

Q4 2024 Financial Summary	(Unaudited)
GAAP

		Q4’24			Q3’24			Q4’23		QoQ Change	YoY Change
Revenue ($k)	$	621,665		$	620,119		$	454,012		Up 0.2%	Up 36.9%
Gross Margin		55.4	%		55.4	%		55.3	%	Flat	Up 0.1 pts
Opex ($k)	$	181,101		$	179,415		$	141,554		Up 0.9%	Up 27.9%
Operating Margin		26.3	%		26.5	%		24.1	%	Down 0.2 pts	Up 2.2 pts
Net income ($k)	$	1,449,363		$	144,430		$	96,905		Up 903.5%	Up 1395.7%
Diluted EPS	$	29.88		$	2.95		$	1.98		Up 912.9%	Up 1409.1%

	Q4’24				Q3’24			Q4’23		QoQ Change	YoY Change
Revenue ($k)	$	621,665		$	620,119		$	454,012		Up 0.2%	Up 36.9%
Gross Margin		55.8	%		55.8	%		55.7	%	Flat	Up 0.1 pts
Opex ($k)	$	126,117		$	125,169		$	96,745		Up 0.8%	Up 30.4%
Operating Margin		35.5	%		35.6	%		34.4	%	Down 0.1 pts	Up 1.1 pts
Net income ($k)	$	198,401		$	198,786		$	140,852		Down 0.2%	Up 40.9%
Diluted EPS	$	4.09		$	4.06		$	2.88		Up 0.7%	Up 42.0%

Revenue by End Market

	Revenue					YoY Change				% of Total Rev
End Market ($M)		Q4’24			Q4’23	$			%	Q4’24		Q4’23
Enterprise Data	$	194.9	$	128.9		$	66.0	51.2	%	31.3	%	28.4	%
Storage & Computing		136.5		117.3			19.2	16.4	%	22.0		25.8
Automotive		128.4		89.8			38.6	43.0	%	20.6		19.8
Communications		63.8		40.9			22.9	55.9	%	10.3		9.0
Consumer		57.3		43.7			13.6	31.0	%	9.2		9.6
Industrial		40.8		33.4			7.4	22.3	%	6.6		7.4
Total	$	621.7	$	454.0		$	167.7	36.9	%	100	%	100	%

Ongoing Business Conditions

In 2024, MPS’s revenue grew 21.2% year-over-year and achieved record revenue of $2.2 billion. This is our 13th consecutive year of revenue growth driven by consistent execution, continued innovation, and strong customer focus.

Highlights from 2024 include:

We introduced a Silicon Carbide inverter for high power clean energy applications. Initial revenue is expected to ramp in late 2025. Other Silicon Carbide-based applications are expected to be introduced in multiple geographies during 2025 and 2026.
We developed a family of high quality, cost efficient automotive audio products utilizing DSP technology from our 2024 Axign acquisition powered by MPS solutions.
For enterprise notebooks, we launched a battery management solution and are sampling our new mini-phase power stage. These products enable faster charge time and significantly improve notebook battery life.
Building on our first analog to digital converter design win in 2024, we are developing new high accuracy 24-bit converters which are expected to ramp in the second half of 2025.
We executed a $640M stock repurchase program offsetting dilution for our shareholders.

In Q4 2024, MPS achieved record quarterly revenue of $621.7 million, slightly higher than revenue in the third quarter of 2024 and 36.9% higher than revenue in the fourth quarter of 2023. Our performance during the quarter reflected the continued strength of our diversified market strategy and a continued trend of the improved ordering patterns we saw in Q3 2024.

MPS continues to focus on innovation, solving our customers’ most challenging problems, and maintaining the highest level of quality. We continue to invest in new technology, expand into new markets, and to diversify our end-market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply stability, and swiftly adapt to market changes as they occur.

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

2024 Full Year Revenue Results

Our full year 2024 revenue by market segment was as follows:

Full year 2024 Enterprise Data revenue grew $393.2 million to $716.2 million. This 121.7% increase was due to higher sales of our power management solutions for AI and server applications. Enterprise Data revenue represented 32.5% of MPS’s total revenue in 2024 compared with 17.7% in 2023.

Communications revenue grew by $21.0 million in 2024 to $225.9 million. This 10.2% increase was a result of higher sales of power solutions for optical modules and routers, partially offset by lower sales of networking solutions. Communications revenue represented 10.2% of our 2024 revenue compared with 11.3% in 2023.

Automotive revenue grew $19.3 million year-over-year to $414.0 million in 2024. This 4.9% gain was driven by increased sales of our highly integrated applications supporting advanced driver assistance systems. Automotive revenue represented 18.8% of MPS’s full year 2024 revenue compared with 21.7% in 2023.

Storage and Computing revenue for 2024 grew $10.5 million over the prior year to $501.6 million. This 2.1% increase was primarily driven by increased sales of products for notebooks. Storage and Computing revenue represented 22.7% of MPS’s total revenue in 2024 compared with 27.0% in 2023.

Consumer revenue decreased $32.7 million to $202.0 million in 2024. This 13.9% year-over-year decrease was a result of broad market weakness. Consumer revenue represented 9.1% of MPS’s full year 2024 revenue compared with 12.9% in 2023.

Industrial revenue fell by $25.3 million to $147.4 million in 2024. This 14.6% decrease was due to general market weakness across all industrial segments. Industrial revenue represented 6.7% of MPS’s full year 2024 revenue compared with 9.4% in 2023.

Q4’24 Revenue Results

MPS reported fourth quarter revenue of $621.7 million, slightly higher than the third quarter of 2024 and 36.9% higher than the fourth quarter of 2023. Compared with the third quarter of 2024, sales in Automotive and Enterprise Data improved sequentially.

Fourth quarter Automotive revenue of $128.4 million increased 15.3% from the third quarter of 2024 primarily from higher sales in ADAS and infotainment power solutions. Fourth quarter 2024 Automotive revenue was up 43.0% year over year. Automotive revenue represented 20.6% of MPS’s fourth quarter 2024 revenue compared with 19.8% in the fourth quarter of 2023.

In our Enterprise Data market, fourth quarter 2024 revenue of $194.9 million increased 5.6% from the third quarter of 2024. Fourth quarter 2024 Enterprise Data revenue was up 51.2% year over year. Enterprise Data revenue represented 31.3% of MPS’s fourth quarter 2024 revenue compared with 28.4% in the fourth quarter of 2023.

Fourth quarter 2024 Storage and Computing revenue of $136.5 million decreased 5.2% from the third quarter of 2024. The sequential decrease was primarily driven by lower sales in notebooks, partially offset by stronger sales in graphic cards. Fourth quarter 2024 Storage and Computing revenue was up 16.4% year over year. Storage and Computing revenue represented 22.0% of MPS’s fourth quarter 2024 revenue compared with 25.8% in the fourth quarter of 2023.

Fourth quarter 2024 Industrial revenue of $40.8 million decreased 7.3% from the third quarter of 2024 due to lower sales for security and power sources. Fourth quarter 2024 Industrial revenue was up 22.3% year over year. Industrial revenue represented 6.6% of our total fourth quarter 2024 revenue compared with 7.4% in the fourth quarter of 2023.

Fourth quarter Consumer revenue of $57.3 million decreased 11.0% from the third quarter of 2024 primarily from lower sales in smart TVs, home appliance and gaming solutions. Fourth quarter 2024 Consumer revenue was up 31.0% year over year. Consumer revenue represented 9.2% of MPS’s fourth quarter 2024 revenue compared with 9.6% in the fourth quarter of 2023.

Fourth quarter 2024 Communications revenue of $63.8 million was down 11.2% from the third quarter of 2024 reflecting lower sales in networking solutions, partially offset by higher sales in optical solutions. Fourth quarter 2024 Communications revenue was up 55.9% year over year. Communications sales represented 10.3% of our total fourth quarter 2024 revenue compared with 9.0% in the fourth quarter of 2023.

Q4’24 Gross Margin & Operating Income

GAAP gross margin was 55.4%, flat to the third quarter of 2024. Our GAAP operating income was approximately $163.3 million compared to $164.0 million reported in the third quarter of 2024.

Non-GAAP gross margin for the fourth quarter of 2024 was 55.8%, flat to the third quarter of 2024. Our non-GAAP operating income was $220.7 million compared to $220.8 million reported in the third quarter of 2024.

Q4’24 Operating Expenses

Our GAAP operating expenses were $181.1 million in the fourth quarter of 2024 compared with $179.4 million in the third quarter of 2024.

Our Non-GAAP operating expenses were approximately $126.1 million, up from $125.2 million in the third quarter of 2024.

The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expense and deferred compensation plan expense.

Total stock-based compensation and related expenses, including approximately $1.7 million charged to cost of goods sold, was $56.3 million compared with $52.4 million recorded in the third quarter of 2024.

The Bottom Line

Fourth quarter 2024 GAAP net income was $1.4 billion or $29.88 per fully diluted share, compared with $144.4 million or $2.95 per share in the third quarter of 2024. Fourth quarter GAAP net income and EPS included the recognition of a tax benefit granted to a foreign subsidiary.

Fourth quarter 2024 non-GAAP net income was $198.4 million or $4.09 per fully diluted share, compared with $198.8 million or $4.06 per fully diluted share in the third quarter of 2024.

There were 48.5 million fully diluted shares outstanding at the end of the fourth quarter of 2024. MPS repurchased $622M in stock during the fourth quarter of 2024.

Balance Sheet and Cash Flow

Cash, cash equivalents and short-term investments were $862.9 million at the end of the fourth quarter of 2024 compared to $1.46 billion at the end of the third quarter of 2024. The change was driven primarily by the share repurchases made in the fourth quarter. For the fourth quarter of 2024, MPS generated operating cash flow of approximately $167.7 million compared with the third quarter of 2024 operating cash flow of $231.7 million.

Accounts receivable at the end of the fourth quarter of 2024 at $172.5 million, representing 25 days of sales outstanding, which was 1 day higher than the 24 days reported at the end of the third quarter of 2024.

Our internal inventories at the end of the fourth quarter of 2024 were $419.6 million, down from $424.9 million at the end of the third quarter of 2024. Days of inventory of 138 days at the end of the fourth quarter of 2024 was 2 days lower than at the end of the third quarter of 2024.

We have carefully managed our internal inventories throughout the year, balancing the uncertainty in the market with being prepared to capture market upturns when they occur. Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the fourth quarter of 138 days was 2 days lower than at the end of the third quarter of 2024.

Selected Balance Sheet and Inventory Data				(Unaudited)

	Q4’24	Q3’24	Q4’23
Cash, Cash Equivalents, and Short-Term Investments	$ 862.9 M	$ 1,462.4 M	$ 1,108.5 M
Operating Cash Flow	$ 167.7 M	$ 231.7 M	$ 153.3 M
Accounts Receivable	$ 172.5 M	$ 164.7 M	$ 179.9 M
Days of Sales Outstanding	25 Days	24 Days	36 Days
Internal Inventories	$ 419.6 M	$ 424.9 M	$ 383.7 M
Days of Inventory (current quarter revenue)	138 Days	140 Days	172 Days
Days of Inventory (next quarter revenue)	138 Days	140 Days	170 Days

Q1’25 Business Outlook

For the first quarter of 2025 ending March 31, we are forecasting:

Revenue in the range of $610 million to $630 million.
GAAP gross margin in the range of 55.1% to 55.7%.
Non-GAAP gross margin in the range of 55.4% to 56.0%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
Total stock-based compensation and related expenses in the range of $55.0 million to $57.0 million including approximately $1.7 million that would be charged to cost of goods sold.
GAAP operating expenses between $180.2 million and $186.2 million.
Non-GAAP operating expenses in the range of $126.9 million to $130.9 million. This estimate excludes stock-based compensation and related expenses in the range of $53.3 million to $55.3 million.
Interest and other income in the range from $5.8 million to $6.2 million before foreign exchange gains or losses.
Non-GAAP tax rate of 15% for 2025.
Fully diluted shares outstanding in the range of 47.8 to 48.2 million shares.

Our quarterly dividend will increase 25% to $1.56 per share from $1.25 per share for stockholders of record as of March 31, 2025.

In addition, our board of directors has authorized a new $500 million stock repurchase program effective over the next 3 years. The $640 million share repurchase program authorized in October of 2023 has been fully executed.

For further information, contact:

Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com

Safe Harbor Statement

This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Q1’25 Business Outlook” section herein, our statement regarding our business focus, our statement regarding the expansion and diversification of our global supply chain and the quote from our CEO and founder, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the first quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy and geopolitical uncertainties, including the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 29, 2024. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.

Non-GAAP Financial Measures

This CFO Commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP net income and non-GAAP net income per share also exclude the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.

RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME

(Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses*		56,320			41,107		213,209			149,711
Amortization of acquisition-related intangible assets		320			33		1,303			132
Deferred compensation plan expense, net		573			288		867			1,055
Tax effect of non-GAAP adjustments		(22,773	)		2,519		(26,922	)		(3,625	)
Recognition of a tax benefit granted to a foreign subsidiary		(1,285,402	)		–		(1,285,402	)		–
Non-GAAP net income	$	198,401		$	140,852	$	689,755		$	574,647

Non-GAAP net income per share:
Basic	$	4.11		$	2.94	$	14.19		$	12.07
Diluted	$	4.09		$	2.88	$	14.12		$	11.78

Shares used in the calculation of non-GAAP net income per share:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Gross profit	$	344,408		$	251,123		$	1,220,870		$	1,021,119
Gross margin		55.4	%		55.3	%		55.3	%		56.1	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses*		1,745			1,228			6,975			4,545
Amortization of acquisition-related intangible assets		287			–			1,171			–
Deferred compensation plan expense		417			486			1,500			871
Non-GAAP gross profit	$	346,857		$	252,837		$	1,230,516		$	1,026,535
Non-GAAP gross margin		55.8	%		55.7	%		55.8	%		56.4	%

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total operating expenses	$	181,101		$	141,554		$	681,512		$	539,383

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses*		(54,575	)		(39,879	)		(206,234	)		(145,166	)
Amortization of acquisition-related intangible assets		(33	)		(33	)		(132	)		(132	)
Deferred compensation plan expense		(376	)		(4,897	)		(8,767	)		(8,690	)
Non-GAAP operating expenses	$	126,117		$	96,745		$	466,379		$	385,395

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME

(Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total operating income	$	163,307	$	109,569	$	539,358	$	481,736

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense		793		5,383		10,267		9,561
Non-GAAP operating income	$	220,740	$	156,092	$	764,137	$	641,140

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET

(Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total other income, net	$	6,224		$	9,976		$	33,554		$	24,105

Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income		(220	)		(5,095	)		(9,400	)		(8,506	)
Non-GAAP other income, net	$	6,004		$	4,881		$	24,154		$	15,599

RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES

(Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total income before income taxes	$	169,531	$	119,545	$	572,912	$	505,841

Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense, net		573		288		867		1,055
Non-GAAP income before income taxes	$	226,744	$	160,973	$	788,291	$	656,739

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.

2025 FIRST QUARTER OUTLOOK

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN

(Unaudited)

	Three Months Ending March 31, 2025
	Three Months Ending March 31, 2025
	Low			High
Gross margin		55.1	%		55.7	%
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses		0.3	%		0.3	%
Non-GAAP gross margin		55.4	%		56.0	%

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

(Unaudited, in thousands)

	Three Months Ending March 31, 2025
	Three Months Ending March 31, 2025
	Low			High
Operating expenses	$	180,200		$	186,200
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses		(53,300	)		(55,300	)
Non-GAAP operating expenses	$	126,900		$	130,900

The MIL Network –

February 7, 2025

MIL-OSI: Monolithic Power Systems Announces Results for the Fourth Quarter and Year Ended December 31, 2024 and an Increase in Quarterly Cash Dividend

Source: GlobeNewswire (MIL-OSI)

KIRKLAND, Wash., Feb. 06, 2025 (GLOBE NEWSWIRE) — Monolithic Power Systems, Inc. (“MPS”) (Nasdaq: MPWR), a fabless global company that provides high-performance, semiconductor-based power electronics solutions, today announced financial results for the quarter and year ended December 31, 2024. MPS also announced that its Board of Directors has approved an increase in the quarterly cash dividend from $1.25 per share to $1.56 per share. The first quarter dividend of $1.56 per share will be paid on April 15, 2025 to all stockholders of record as of the close of business on March 31, 2025.

The financial results for the quarter ended December 31, 2024 were as follows:

Revenue was $621.7 million for the quarter ended December 31, 2024, a 0.2% increase from $620.1 million for the quarter ended September 30, 2024 and a 36.9% increase from $454.0 million for the quarter ended December 31, 2023.

GAAP gross margin was 55.4% for the quarter ended December 31, 2024, compared with 55.3% for the quarter ended December 31, 2023.

Non-GAAP gross margin (1) was 55.8% for the quarter ended December 31, 2024, excluding the impact of $1.7 million for stock-based compensation and related expenses, $0.4 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with 55.7% for the quarter ended December 31, 2023, excluding the impact of $1.2 million for stock-based compensation expense and $0.5 million for deferred compensation plan expense.

GAAP operating expenses were $181.1 million for the quarter ended December 31, 2024, compared with $141.6 million for the quarter ended December 31, 2023.

Non-GAAP operating expenses (1) were $126.1 million for the quarter ended December 31, 2024, excluding $54.6 million for stock-based compensation and related expenses, and $0.4 million for deferred compensation plan expense, compared with $96.7 million for the quarter ended December 31, 2023, excluding $39.9 million for stock-based compensation expense and $4.9 million for deferred compensation plan expense.

GAAP operating income was $163.3 million for the quarter ended December 31, 2024, compared with $109.6 million for the quarter ended December 31, 2023.

Non-GAAP operating income (1) was $220.7 million for the quarter ended December 31, 2024, excluding $56.3 million for stock-based compensation and related expenses, $0.8 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with $156.1 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $5.4 million for deferred compensation plan expense.

GAAP other income, net was $6.2 million for the quarter ended December 31, 2024, compared with $10.0 million for the quarter ended December 31, 2023.

Non-GAAP other income, net (1) was $6.0 million for the quarter ended December 31, 2024, excluding $0.2 million for deferred compensation plan income, compared with $4.9 million for the quarter ended December 31, 2023, excluding $5.1 million for deferred compensation plan income.

GAAP income before income taxes was $169.5 million for the quarter ended December 31, 2024, compared with $119.5 million for the quarter ended December 31, 2023.

Non-GAAP income before income taxes (1) was $226.7 million for the quarter ended December 31, 2024, excluding $56.3 million for stock-based compensation and related expenses, $0.6 million for net deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with $161.0 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $0.3 million for net deferred compensation plan expense.

GAAP net income was $1.4 billion and $29.88 per diluted share for the quarter ended December 31, 2024. Comparatively, GAAP net income was $96.9 million and $1.98 per diluted share for the quarter ended December 31, 2023. GAAP net income and income per diluted share for the quarter ended December 31, 2024 included $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary.

Non-GAAP net income (1) was $198.4 million and $4.09 per diluted share for the quarter ended December 31, 2024 excluding $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP net income (1) for the quarter ended December 31, 2024 also excluded $56.3 million for stock-based compensation and related expenses, $0.6 million for net deferred compensation plan expense, $0.3 million for amortization of acquisition-related intangible assets and $22.8 million for the related tax effects, compared with $140.9 million and $2.88 per diluted share for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense, $0.3 million for net deferred compensation plan expense and $2.5 million for the related tax effects.

The financial results for the year ended December 31, 2024 were as follows:

Revenue was $2.2 billion for the year ended December 31, 2024, a 21.2% increase from $1.8 billion for the year ended December 31, 2023.

GAAP gross margin was 55.3% for the year ended December 31, 2024, compared with 56.1% for the year ended December 31, 2023.

Non-GAAP gross margin (1) was 55.8% for the year ended December 31, 2024, excluding the impact of $7.0 million for stock-based compensation and related expenses, $1.5 million for deferred compensation plan expense and $1.2 million for amortization of acquisition-related intangible assets, compared with 56.4% for the year ended December 31, 2023, excluding the impact of $4.5 million for stock-based compensation expense and $0.9 million for deferred compensation plan expense.

GAAP operating expenses were $681.5 million for the year ended December 31, 2024, compared with $539.4 million for the year ended December 31, 2023.

Non-GAAP operating expenses (1) were $466.4 million for the year ended December 31, 2024, excluding $206.2 million for stock-based compensation and related expenses, $8.8 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets, compared with $385.4 million for the year ended December 31, 2023, excluding $145.2 million for stock-based compensation expense, $8.7 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP operating income was $539.4 million for the year ended December 31, 2024, compared with $481.7 million for the year ended December 31, 2023.

Non-GAAP operating income (1) was $764.1 million for the year ended December 31, 2024, excluding $213.2 million for stock-based compensation and related expenses, $10.3 million for deferred compensation plan expense and $1.3 million for amortization of acquisition-related intangible assets, compared with $641.1 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $9.6 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP other income, net was $33.6 million for the year ended December 31, 2024, compared with $24.1 million for the year ended December 31, 2023.

Non-GAAP other income, net (1) was $24.2 million for the year ended December 31, 2024, excluding $9.4 million for deferred compensation plan income, compared with $15.6 million for the year ended December 31, 2023, excluding $8.5 million for deferred compensation plan income.

GAAP income before income taxes was $572.9 million for the year ended December 31, 2024, compared with $505.8 million for the year ended December 31, 2023.

Non-GAAP income before income taxes (1) was $788.3 million for the year ended December 31, 2024, excluding $213.2 million for stock-based compensation and related expenses, $1.3 million for amortization of acquisition-related intangible assets and $0.9 million for net deferred compensation plan expense, compared with $656.7 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.

GAAP net income was $1.8 billion and $36.59 per diluted share for the year ended December 31, 2024. Comparatively, GAAP net income was $427.4 million and $8.76 per diluted share for the year ended December 31, 2023. GAAP net income and income per diluted share for the year ended December 31, 2024 included $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary.

Non-GAAP net income (1) was $689.8 million and $14.12 per diluted share for the year ended December 31, 2024 excluding $1.3 billion for the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP net income (1) for the year ended December 31, 2024 also excluded $213.2 million for stock-based compensation and related expenses, $1.3 million for amortization of acquisition-related intangible assets, $0.9 million for net deferred compensation plan expense and $26.9 million for the related tax effects, compared with $574.6 million and $11.78 per diluted share for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense, $0.1 million for amortization of acquisition-related intangible assets and $3.6 million for the related tax effects.

The following is a summary of revenue by end market (in thousands):

	Three Months Ended December 31,				Year Ended December 31,
End Market	2024		2023		2024		2023
Enterprise Data	$	194,867	$	128,897	$	716,264	$	322,980
Storage and Computing		136,507		117,312		501,576		491,139
Automotive		128,344		89,758		413,973		394,665
Communications		63,810		40,926		225,905		204,911
Consumer		57,311		43,741		202,015		234,660
Industrial		40,826		33,378		147,367		172,717
Total	$	621,665	$	454,012	$	2,207,100	$	1,821,072

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

Business Outlook

The following are MPS’s financial targets for the first quarter ending March 31, 2025:

Revenue in the range of $610.0 million to $630.0 million.

GAAP gross margin between 55.1% and 55.7%. Non-GAAP gross margin (1) between 55.4% and 56.0%, which excludes estimated stock-based compensation and related expenses of $1.7 million as well as the impact from amortization of acquisition-related intangible assets.

GAAP operating expenses between $180.2 million and $186.2 million. Non-GAAP operating expenses (1) between $126.9 million and $130.9 million, which excludes estimated stock-based compensation and related expenses in the range of $53.3 million to $55.3 million.

Total stock-based compensation and related expenses of $55.0 million to $57.0 million including approximately $1.7 million that would be charged to cost of goods sold.

Interest and other income in the range of $5.8 million to $6.2 million before foreign exchange gains or losses.

Non-GAAP tax rate of 15.0% for 2025.

Fully diluted shares outstanding between 47.8 million and 48.2 million.

(1) Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP net income and non-GAAP net income per share also exclude the recognition of a tax benefit granted to a foreign subsidiary. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to non-GAAP reconciliations in the tables set forth below.

Earnings Commentary
Earnings commentary on the results of operations for the quarter and year ended December 31, 2024 is available under the Investor Relations page on the MPS website.

Earnings Webinar
MPS plans to host a question-and-answer conference call covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, February 6, 2025. The live event will be held via a Zoom webcast, which can be accessed at: https://mpsic.zoom.us/j/96816578886. The Zoom webcast can also be accessed live over the phone by dialing (669) 444-9171; the webcast ID is 96816578886. A replay of the event will be archived and available for replay for one year under the Investor Relations page on the MPS website.

Safe Harbor Statement
This press release contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Business Outlook” section and the quote from our CEO herein, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the first quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy and geopolitical uncertainties, including the collapse of certain banks in the U.S. and elsewhere and the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 29, 2024. MPS assumes no obligation to update the information in this press release or in the accompanying webinar.

About Monolithic Power Systems

Monolithic Power Systems, Inc. (“MPS”) is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:
Bernie Blegen
Executive Vice President and Chief Financial Officer
Monolithic Power Systems, Inc.
408-826-0777
MPSInvestor.Relations@monolithicpower.com


Monolithic Power Systems, Inc. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value)

	December 31,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	691,816		$	527,843
Short-term investments		171,130			580,633
Accounts receivable, net		172,518			179,858
Inventories		419,611			383,702
Other current assets		109,978			147,463
Total current assets		1,565,053			1,819,499
Property and equipment, net		494,945			368,952
Acquisition-related intangible assets, net		9,938			–
Goodwill		25,944			6,571
Deferred tax assets, net		1,326,840			28,054
Other long-term assets		194,377			211,277
Total assets	$	3,617,097		$	2,434,353

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	102,526		$	62,958
Accrued compensation and related benefits		63,918			56,286
Other accrued liabilities		128,123			115,791
Total current liabilities		294,567			235,035
Income tax liabilities		65,193			60,724
Other long-term liabilities		111,570			88,655
Total liabilities		471,330			384,414
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 47,823 and 48,028, respectively		706,817			1,129,937
Retained earnings		2,487,461			947,064
Accumulated other comprehensive loss		(48,511	)		(27,062	)
Total stockholders’ equity		3,145,767			2,049,939
Total liabilities and stockholders’ equity	$	3,617,097		$	2,434,353


Monolithic Power Systems, Inc. Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Revenue	$	621,665		$	454,012	$	2,207,100		$	1,821,072
Cost of revenue		277,257			202,889		986,230			799,953
Gross profit		344,408			251,123		1,220,870			1,021,119
Operating expenses:
Research and development		85,762			71,459		324,748			263,643
Selling, general and administrative		95,339			70,095		356,764			275,740
Total operating expenses		181,101			141,554		681,512			539,383
Operating income		163,307			109,569		539,358			481,736
Other income, net		6,224			9,976		33,554			24,105
Income before income taxes		169,531			119,545		572,912			505,841
Income tax expense (benefit), net		(1,279,832	)		22,640		(1,213,788	)		78,467
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Net income per share:
Basic	$	30.00		$	2.02	$	36.76		$	8.98
Diluted	$	29.88		$	1.98	$	36.59		$	8.76
Weighted-average shares outstanding:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771


SUPPLEMENTAL FINANCIAL INFORMATION STOCK-BASED COMPENSATION EXPENSE (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Cost of revenue	$	1,720	$	1,228	$	6,305	$	4,545
Research and development		12,166		10,204		45,626		36,611
Selling, general and administrative		42,124		29,675		153,709		108,555
Total stock-based compensation expense	$	56,010	$	41,107	$	205,640	$	149,711


RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (Unaudited, in thousands, except per share amounts)

	Three Months Ended December 31,					Year Ended December 31,
	2024			2023		2024			2023
Net income	$	1,449,363		$	96,905	$	1,786,700		$	427,374

Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses*		56,320			41,107		213,209			149,711
Amortization of acquisition-related intangible assets		320			33		1,303			132
Deferred compensation plan expense, net		573			288		867			1,055
Tax effect of non-GAAP adjustments		(22,773	)		2,519		(26,922	)		(3,625	)
Recognition of a tax benefit granted to a foreign subsidiary		(1,285,402	)		–		(1,285,402	)		–
Non-GAAP net income	$	198,401		$	140,852	$	689,755		$	574,647

Non-GAAP net income per share:
Basic	$	4.11		$	2.94	$	14.19		$	12.07
Diluted	$	4.09		$	2.88	$	14.12		$	11.78

Shares used in the calculation of non-GAAP net income per share:
Basic		48,317			47,936		48,599			47,610
Diluted		48,506			48,881		48,835			48,771

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Gross profit	$	344,408		$	251,123		$	1,220,870		$	1,021,119
Gross margin		55.4	%		55.3	%		55.3	%		56.1	%

Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses*		1,745			1,228			6,975			4,545
Amortization of acquisition-related intangible assets		287			–			1,171			–
Deferred compensation plan expense		417			486			1,500			871
Non-GAAP gross profit	$	346,857		$	252,837		$	1,230,516		$	1,026,535
Non-GAAP gross margin		55.8	%		55.7	%		55.8	%		56.4	%

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total operating expenses	$	181,101		$	141,554		$	681,512		$	539,383

Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses*		(54,575	)		(39,879	)		(206,234	)		(145,166	)
Amortization of acquisition-related intangible assets		(33	)		(33	)		(132	)		(132	)
Deferred compensation plan expense		(376	)		(4,897	)		(8,767	)		(8,690	)
Non-GAAP operating expenses	$	126,117		$	96,745		$	466,379		$	385,395

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total operating income	$	163,307	$	109,569	$	539,358	$	481,736

Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense		793		5,383		10,267		9,561
Non-GAAP operating income	$	220,740	$	156,092	$	764,137	$	641,140

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET (Unaudited, in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Total other income, net	$	6,224		$	9,976		$	33,554		$	24,105

Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income		(220	)		(5,095	)		(9,400	)		(8,506	)
Non-GAAP other income, net	$	6,004		$	4,881		$	24,154		$	15,599


RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES (Unaudited, in thousands)

	Three Months Ended December 31,				Year Ended December 31,
	2024		2023		2024		2023
Total income before income taxes	$	169,531	$	119,545	$	572,912	$	505,841

Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses*		56,320		41,107		213,209		149,711
Amortization of acquisition-related intangible assets		320		33		1,303		132
Deferred compensation plan expense, net		573		288		867		1,055
Non-GAAP income before income taxes	$	226,744	$	160,973	$	788,291	$	656,739

*Prior periods exclude stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.


2025 FIRST QUARTER OUTLOOK RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited)

	Three Months Ending
	March 31, 2025
	Low			High
Gross margin		55.1	%		55.7	%
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses		0.3	%		0.3	%
Non-GAAP gross margin		55.4	%		56.0	%


RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands)

	Three Months Ending
	March 31, 2025
	Low			High
Operating expenses	$	180,200		$	186,200
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses		(53,300	)		(55,300	)
Non-GAAP operating expenses	$	126,900		$	130,900

The MIL Network –

February 7, 2025

MIL-OSI USA: February 6th, 2025 Heinrich, Moran Introduce Legislation to Create Pathways to Stable Careers, Expand Access to Apprenticeships & Technical Education

US Senate News:

Source: United States Senator for New Mexico Martin Heinrich

WASHINGTON — U.S. Senator Martin Heinrich (D-N.M.) introduced the Apprenticeship Pathways Act, legislation to create pathways to high-demand careers for high school students by expanding access to apprenticeships and technical education. Heinrich introduced the bill with U.S. Senator Jerry Moran (R-Kan.).

Apprenticeships and technical education offer a direct path to acquiring in-demand skills, and early exposure to industries can encourage more students to pursue careers in those professions. Expanding apprenticeship programs for high school students can help address workforce shortages and ensure a sustainable workforce pipeline. This legislation particularly focuses on apprenticeship programs for occupations with high need, including the building trades, healthcare, manufacturing, technology, telecommunications, and early childhood education.

“If we want to set the next generation up for success, we need to go all in on expanding access to career-connected learning like apprenticeships as early as high school. By providing students with more preparation and job skills, we will ensure more New Mexicans have the opportunity to access careers in their own communities that they can build their families around, while strengthening New Mexico’s middle class and growing our state’s economy,” said Heinrich.

“Apprenticeships bridge the gap between education and production, providing hands-on learning opportunities that benefit both students and employers in technical fields,” said Moran. “Aligning tech training with industry demands will help meet the workforce needs in Kansas and expand high-paying career opportunities in the IT industry.”

The Apprenticeship Pathways Act would direct the U.S. Secretary of Labor to provide grants to industry intermediaries to develop and establish apprenticeship programs for high school students in the building trades, health care, early childhood education, technology, and manufacturing — based on local, regional, and national workforce trends. This model provides students on-the-job training and instruction, real-world experiences and responsibilities, and inspiring career pathways ahead of their entrance to the workforce.

“Thanks to Senator Heinrich, and this legislation, New Mexico will soon provide pre-apprenticeship opportunities to young people around the state, especially in our underserved communities. Pre-apprenticeship is an essential on-ramp for high schoolers and recent graduates to access in demand, high wage careers. It’s a critical step in making our communities more prosperous,” said Mike May, Director of Workforce Learning for Future Focused Education.

The text of the bill is here.

Heinrich’s Longtime Support for Workforce Training and Apprenticeships:

This week, Heinrich announced $1,350,000 in federal funding that he secured through the Fiscal Year 2024 appropriations process for the United Association of Plumbers & Pipefitters Local 412 (U.A. Local 412). The funding will support specialized journeyman training focused on filling jobs created by the CHIPS Act and Inflation Reduction Act, including needs specific to semiconductor plants, hospitals, and heat pump installation, service, repair, and maintenance. Through his work on the Senate Appropriations Committee, Heinrich has further supported the U.A. Local 412’s workforce development efforts by securing $1.2 million in the Fiscal Year 2023 Appropriations Bill.

In October 2024, Heinrich visited U.A. 412’s mobile training unit, which is creating more pathways to in-demand careers in the skilled trades and has already trained dozens of New Mexicans in Española, Taos, Las Vegas, Mora, Raton, and Santa Fe. Heinrich also participated in a training demonstration with U.A. Local 412 leadership and apprentices who are learning skills in the plumbing, pipefitting, and HVAC trades.

The U.A. Local 412 Mobile Training Unit was initially paid for by an Economic Development Administration (EDA) Good Jobs Challenge Grant, as part of a $6.4 million award to the Northern N.M. Workforce Integration Network. The Good Jobs Challenge funds were authorized by the American Rescue Plan, the critical economic recovery legislation that Heinrich was proud to pass in 2021.

Heinrich is continuing to press for passage of Fiscal Year 2025 Appropriations Bills. The Senate Appropriations Committee passed bills last year that included an additional $870,000 CDS award that he secured within the Senate Appropriations Committee-passed Labor, Health and Human Services, Education Appropriations Bill to sustain the U.A. Local 412’s mobile training unit’s operations past the original EDA funding, and to expand its reach to new communities including Grants, Gallup, Silver City, and Zuni Pueblo.

Heinrich has long championed proven workforce training programs like U.A. Local 412’s apprenticeship and pre-apprenticeship programs that are growing the middle class, creating and connecting New Mexicans to high-quality careers they can access in their communities, and continuing New Mexico’s leading role in the clean energy transition that is being built by union workers in the skilled trades.

Last year, Heinrich hosted a “Pro-Worker, Pro-Business Opportunities” roundtable to talk directly with New Mexicans about how federal legislation he helped pass into law, like the Inflation Reduction Act and Infrastructure Law, is creating careers in high-demand sectors and strengthening New Mexico’s health care, early childhood education, and skilled trades workforce.

In the last Congress, Heinrich introduced the bipartisan Apprenticeship Pathways Act, legislation to create pathways to careers for high school students by expanding access to apprenticeship programs for occupations with high need, including the building trades, healthcare, manufacturing, technology, telecommunications, and early childhood education. Last year, Heinrich also introduced the Pre-Apprenticeships To Hardhats (PATH) Act, legislation to strengthen the pipeline for careers in New Mexico, address rising workforce shortages, and grow the state’s economy through quality pre-apprenticeship programs.

Last Congress, Courtenay Eichhorst, Business Manager of U.A. Local 412 and President of New Mexico Building Trades, testified about the importance of apprenticeships and pre-apprenticeships during a hearing that Heinrich convened as the Chairman of the Joint Economic Committee on “Job Training for the Clean Energy Transition.”

Eichhorst said during that JEC hearing, “In addition to our ‘gold standard’ apprenticeship programs, the UA and other Building Trades’ unions are also increasingly investing in pre-apprenticeship programs that can be designed to help prepare high school students or individuals from underrepresented communities for a career in the trades. These programs help fill the role that used to be filled by the ‘shop classes’ that were found in high schools but have become increasingly rare. Pre-apprenticeship programs also focus on the ‘soft skills’ that are necessary for success in any industry, such as showing up on time and other work etiquette.”

Also in the Fiscal Year 2024 Appropriations Bills, Heinrich secured $1,200,000 in Congressionally Directed Spending for the SMART Local Union No. 49 Joint Apprenticeship and Training Committee to enhance and expand specialized HVAC apprenticeship training.

Last March, Heinrich introduced the Providing Resources and Opportunities for Health Education and Learning (PRO-HEAL) Act, legislation that will tackle the health care provider shortage in New Mexico and nationwide by expanding pathways to high-quality, in-demand health care careers that medical professionals can access in their communities. Specifically, the PRO-HEAL Act addresses medical provider shortages by incentivizing states and institutions of higher education to expand or create health care provider pipeline programs, particularly in underserved and rural communities. The legislation is inspired by the success of the Combined BA/MD Degree Program at the University of New Mexico, where over 65% of students who have graduated from their program practice medicine in New Mexico.

Heinrich previously introduced the Pathways to Health Careers Act, legislation that reauthorizes and modernizes the Health Profession Opportunity Grant (HPOG) program to help address health care shortages in New Mexico and across the country and create pathways to high-quality, in-demand health care careers. The HPOG program has a proven track record of successfully educating workers for jobs in the health care industry, while also providing career coaching, job placement, and a mix of other support services. The Pathways to Health Careers Act would restart and expand the HPOG Program, providing $425 million to make HPOG available nationwide from FY2024 through FY2028 and includes set asides for Tribes and U.S. Territories.

In 2021, Heinrich and Moran introduced the Championing Apprenticeships for New Careers and Employees in Technology (CHANCE in Tech) Act, bipartisan legislation to create earlier pathways to high-paying careers in the information technology (IT) industry. Heinrich previously introduced the bipartisan legislation in 2019 with former U.S. Senator Cory Gardner (R-Colo.).

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Senators Marshall, Kaine Introduce Bipartisan Bill to Help More Americans Access High-Quality Job Training, Get Good-Paying Jobs

US Senate News:

Source: United States Senator for Kansas Roger Marshall

Washington, D.C. – U.S. Senators Roger Marshall, M.D. and Tim Kaine (D-VA) introduced the Jumpstarting Our Businesses by Supporting Students (JOBS) Act, bipartisan legislation to help more Americans get good-paying jobs by allowing students to use federal Pell Grants—need-based education grants for lower-income individuals—to pay for shorter-term job training programs for the first time. Currently, students can only use Pell Grants for two- and four-year colleges and universities. By expanding Pell Grant eligibility, the JOBS Act would help close the skills gap by allowing people to access job training they might otherwise be unable to afford but need for careers in high-demand fields.
“The JOBS Act will provide an incredible opportunity for students in an ever-changing job market,” Senator Marshall said. “Our legislation will give Americans the chance to learn critical skills for a successful career. I look forward to getting the JOBS Act across the finish line with my colleagues.”
“No one should be priced out of an education—including a technical education—but I hear from many Virginians that access to high-quality job training programs that align with their goals is out of reach because of financial barriers,” said Senator Kaine. “Simultaneously, I hear from employers throughout the Commonwealth about their struggles to fill skilled labor positions. With these Virginians in mind, I wrote the JOBS Act to help remedy these issues and provide more workers with the skills they need to get good-paying jobs and provide for their families. This bill is good for workers, good for employers, and good for our economy as a whole.”
The JOBS Act would allow Pell Grants to be used for high-quality job training programs that are at least eight weeks in length and lead to industry-recognized credentials or certificates. Under current law, Pell Grants can only be applied toward programs that are over 600 clock hours or at least 15 weeks in length, rendering students in shorter-term high-quality job training programs ineligible for crucial assistance.
The legislation is cosponsored by U.S. Senators Tammy Baldwin (D-WI), Richard Blumenthal (D-CT), Lisa Blunt Rochester (D-DE), Cory Booker (D-NJ), Shelley Moore Capito (R-WV), Chris Coons (D-DE), Catherine Cortez Masto (D-NV), Kevin Cramer (R-ND), Steve Daines (R-MT), Tammy Duckworth (D-IL), Kirsten Gillibrand (D-NY), Maggie Hassan (D-NH), Martin Heinrich (D-NM), John Hickenlooper (D-CO), John Hoeven (R-ND), Cindy Hyde-Smith (R-MS), Mark Kelly (D-AZ), Angus King (I-ME), Amy Klobuchar (D-MN), Jeff Merkley (D-OR), Jon Ossoff (D-GA), Gary Peters (D-MI), Jacky Rosen (D-NV), Jeanne Shaheen (D-NH), Dan Sullivan (D-AK), Thom Tillis (R-NC), Tommy Tuberville (R-AL), Chris Van Hollen (D-MD), Mark R. Warner (D-VA), Roger Wicker (R-MS), and Ron Wyden (D-OR).

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: In Aftermath Of Tragedies, Cantwell Tells Trump She’ll Hold Him Accountable To Promises On Aviation Infrastructure

US Senate News:

Source: United States Senator for Washington Maria Cantwell

02.06.25

In Aftermath Of Tragedies, Cantwell Tells Trump She’ll Hold Him Accountable To Promises On Aviation Infrastructure

“The president says he wants to see an increase in aviation infrastructure […] So great, Mr. President, we will be calling on you for your help in that effort”; Cantwell is leading ongoing efforts to boost hiring of air traffic controllers & make flying safer

WASHINGTON, D.C. – Yesterday, U.S. Senator Maria Cantwell (D-WA), ranking member of the Senate Committee on Commerce, Science, and Transportation and senior member of the Finance Committee, committed to delivering answers to the families of the people who died in two major aviation tragedies in Washington, D.C., and Philadelphia last week.

In a meeting of the Senate Committee on Commerce, Science, and Transportation yesterday, Sen. Cantwell also called on President Donald Trump to make good on his promise to improve aviation infrastructure:

“Our heart goes out to these families for the tragedies they are suffering, for the long-term impacts that they will have from this, and the remaining questions that they want us to answer. I am dedicated, Mr. Chairman, to moving quickly once we have information on resolutions of issues that will enhance the air safety of our system.

“Having worked both during COVID, and in 25 days working with Senator Wicker, we came up with a transportation solution to what we needed to do for our airspace during that time period. And also working with Senator Wicker in short order after the two MAX crashes to push and finalize through Congress a major aviation safety bill.

“It is imperative that we tell the families we are going to have the same fervor now in getting aviation safety enhancements that will prevent this from happening again.

“I hope that we can work together in a very bipartisan fashion, along with our two colleagues, Senator Duckworth and Senator Moran, the subcommittee chair and ranking member on doing that.

“And I take the President at his word. The President says he wants to see an increase in aviation infrastructure. He’s frustrated by the fact that, on a global basis the system of digitizing our airspace off a radar has moved faster than the United States. So great, Mr. President, we will be calling on you for your help in that effort,” Sen. Cantwell said.

Last year, when Sen. Cantwell served as chair of the committee, she sounded the alarm about the staffing shortage of air traffic controllers, need for more FAA safety inspectors, a series of aviation incidents and near-misses on and around runways, and the midair blowout of an emergency exit door plug in January 2024. She led the passage of the FAA Reauthorization Act, signed into law in May 2024, which boosts controller staffing, ensuring a five-year commitment to maximum hiring and training to close the current staffing gap. The law requires upgraded safety technologies – giving controllers better visibility into all aircraft and ground traffic – to be installed at every large and medium airport nationwide, includes stricter safety standards for aircraft operators and plane manufacturers as well as provisions to boost staffing to put more FAA safety inspectors on factory floors.

In yesterday’s meeting, Sen. Cantwell also addressed:

Video of Sen. Cantwell’s remarks in yesterday’s committee meeting is HERE; audio is HERE; and a transcript is HERE.

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Bipartisan Duckworth-Fischer-Murray-Blackburn Bill to Help Improve Passenger Vehicle Safety Passes Committee

US Senate News:

Source: United States Senator for Illinois Tammy Duckworth

February 06, 2025

[WASHINGTON, D.C.] – Bipartisan legislation led by U.S. Senators Tammy Duckworth (D-IL), Deb Fischer (R-NE), Patty Murray (D-WA) and Marsha Blackburn (R-TN) to help modernize vehicle safety tests by requiring the use of the most advanced testing devices available successfully passed the U.S. Senate Committee on Commerce, Science and Transportation (CST). The bipartisan She Develops Regulations In Vehicle Equality and Safety (She DRIVES) Act would help enhance passenger vehicle safety by updating U.S. crashworthiness testing procedures. The bill is estimated to help save more than 1,300 lives while saving billions of dollars in economic impact from preventing and mitigating deaths and tens of thousands of injuries.

“We can be doing so much more to improve roadway safety and make sure visiting a family member or a routine trip to the grocery store doesn’t end in tragedy,” said Senator Duckworth. “I’m proud our bipartisan legislation passed through committee and is now that much closer to helping us save lives by ensuring our crash test standards better represent the safety needs of all Americans. I’ll continue to work with Senator Fischer as we push for the full Senate to pass this bipartisan bill—because all Americans deserve safer roadways.”

“Today, women are 17 percent more likely to be killed in auto crashes than men,” said Senator Fischer. “That tragic statistic is a preventable one. Our bill will update crash test dummy standards to reflect the diversity of drivers on our roads, ensuring protection and safety for more Americans. I’m grateful a bipartisan group of my colleagues voted yes on this commonsense legislation, and I look forward to getting it passed soon.”

Duckworth has long been a leader in making our transportation system safer and more accessible for all Americans. Last December, Duckworth announced more than $2 million in federal funding through the U.S. Department of Transportation (DOT) to improve crash reporting in Illinois to help make our roads as safe as possible and reduce the number of lives lost to car crashes. As Chair of the CST Subcommittee on Aviation Safety, Operations and Innovation in the 118^th Congress, Duckworth also helped author the landmark bipartisan FAA Reauthorization Act of 2024 that was signed into law last year and included several of her provisions to improve safety, expand the aviation workforce, enhance protections for travelers with disabilities while safeguarding strong pilot certification standards that help ensure our pilots are prepared to handle any emergency and keep the flying public safe.

-30-

MIL OSI USA News –

February 7, 2025

MIL-Evening Report: Do investment tax breaks work? A new study finds the evidence is ‘mixed at best’

Source: The Conversation (Au and NZ) – By Kerrie Sadiq, Professor of Taxation, QUT Business School, and ARC Future Fellow, Queensland University of Technology

The Reserve Bank of Australia (RBA) released a discussion paper this week on investment tax breaks. The study looks at whether tax incentives, such as instant asset write-offs for utes, boost business investment.

Business investment is an important contributor to overall economic growth, and has been sluggish in recent years.

The authors conclude the evidence for these tax breaks is “mixed at best”. They say that income tax breaks used during the global financial crisis increased investment significantly, however:

[there is] no substantial evidence that other policies, including those implemented during the pandemic, increased investment.

In an election year, further promises of tax breaks for businesses are likely. The Coalition has already announced a tax break for meals and entertainment. But are they a good idea, and at what cost do these promises come?

Small business in Australia

Small businesses with fewer than 20 employees make up 97% of all Australian businesses. More than 92% of Australian businesses have an annual turnover of less than A$2 million. It is these businesses that are doing it tough.

These businesses are offered tax breaks for spending on capital assets such as equipment or vehicles. For the 2023-24 tax year, they can immediately write off the cost of eligible assets up to $20,000. In the May 2024 Budget, the government announced that the tax break would be extended to the 2024-25 tax year.

When a small business is operated as a company, the base tax rate is 25%. This effectively means that the business still contributes 75% of the cost of the asset. This requires businesses to have the cash flow to invest. Even if there is cash flow, businesses may not want to spend on large purchases.

It’s a question of trade-offs

Investment tax breaks are also costly in terms of government tax revenue. Each year, the Treasury estimates the cost of tax breaks. These tax breaks are known as tax expenditures.

For the 2023-34 tax year, the instant write-off tax break for small businesses is estimated to cost more than $4 billion by reducing taxes collected.

Tax expenditures are normally designed to offer incentives to one group of taxpayers. However, they come at the expense of broader groups of taxpayers and at a cost of lost revenue to the government. This is money that could be spent through direct spending programs.

Tax expenditures can be thought of as government spending programs hidden in plain sight.

The true cost of tax breaks

Tax expenditures play a central role in Australia’s collection of taxes and redistribution. During the pandemic, the instant asset write-off was increased to $150,000.

The current government introduced the latest instant asset write-off to improve cash flow and reduce compliance costs for small business. As the RBA discussion paper notes, these types of incentives are also designed to encourage additional business investment.

However, that study indicates this is not being achieved. They suggest the reasons may be the tax policies themselves or differences in the economic environment. Put simply, businesses may not want to invest.

If the stated benefits are not realised, the result is less tax collected. Take the $4 billion cost above. Without the incentive, the government would have an additional $4 billion to spend. The $4 billion in 2023-24 could have been directed to funding small businesses through a direct spending program.

Targeted programs

The RBA discussion paper highlights the need to determine whether investment tax breaks achieve their intended benefits. Many factors must be considered, and assessing the influence on the economy is vital.

However, evaluating these measures within the tax system means that important questions are not asked. This includes whether the benefits are distributed fairly, whether the program targets the right group of taxpayers, and whether there are unintended distorting effects.

The latest Treasury Tax Expenditures and Insights Statement provides data on 307 separate measures. This number continues to grow.

The government’s “Future Made in Australia” contains two examples. Its economic plan to support Australia’s transition to a net zero economy contains two tax incentives, one for hydrogen production and another for critical minerals.

The proposed hydrogen production tax incentive is estimated at a cost to the budget of $6.7 billion over ten years. The measure will provide a $2 incentive per kilogram of renewable hydrogen produced for up to ten years. Eligible companies will get a credit against their income tax liability.

The proposed critical minerals production tax incentive is estimated to cost the budget $7 billion over ten years. Eligible companies will get a refundable tax offset of 10% of certain expenses relating to processing and refining 31 critical minerals listed in Australia.

Support for tax breaks

Tax breaks for businesses, such as the immediate write-off, disproportionately benefit those that spend. Often, this is by design. If this is a government objective, supported by the general population, then it is viewed as a good use of public money.

The same principle applies to tax breaks in the Government’s Future Made in Australia plan. A government objective is to transition to a net zero economy. A stated priority is to attract “investment to make Australia a leader in renewable energy, adding value to our natural resources and strengthening economic activity”.

The question remains as to whether tax breaks are the best way to achieve this. The answer often changes when viewed as a direct spending program.

Kerrie Sadiq currently receives funding from the Australian Research Council. She has previously received research grants from CPA and CAANZ.

Ashesha Weerasinghe does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. Do investment tax breaks work? A new study finds the evidence is ‘mixed at best’ – https://theconversation.com/do-investment-tax-breaks-work-a-new-study-finds-the-evidence-is-mixed-at-best-249148

MIL OSI Analysis – EveningReport.nz –

February 7, 2025

MIL-OSI Asia-Pac: Under MeitY’s research initiatives, CDAC-Noida Sign Letter of Intent (LoI) with LeGO Group to boost indigenous electronics Toy industry ecosystem

Source: Government of India

Under MeitY’s research initiatives, CDAC-Noida Sign Letter of Intent (LoI) with LeGO Group to boost indigenous electronics Toy industry ecosystem

MeitY initiative to empower Young Engineers from SC/ST and NER Backgrounds in Toy Innovation

Young Indian Engineers to Receive Global Mentorship from LEGO India and CDAC-Noida

Posted On: 06 FEB 2025 7:49PM by PIB Delhi

CDAC-Noida a research organization of MeitY signed a Letter of Intent (LoI) with Creative Play Lab, a department of the LEGO Group under the project ‘Development of Electronics and IT-based Control and Automation Solutions for Consumer Electronic Goods (Toy Industry)’.

The project is a tailored made initiative of R&D group of the Ministry to foster the growth of the Indian electronic toys industry by developing prototypes and equipping young engineers, including from under-represented communities, with the skills needed to design such toys.

Under this MeitY initiative, young engineers were selected from across India from SC/ST and NER background and engaged in R&D activities for a year, getting hands-on experience in designing and developing electronic toys for first six months working and learning in the toy labs at C-DAC, Noida followed by a six-month training at industry to create toy prototypes based on industry needs.

To provide global exposure to the interns, LEGO India is joining hands with CDAC Noida supported by CPL to provide mentorship to 1-2 students per batch on their toy prototypes. The batch of students from India will get the opportunity to visit the LEGO Group’s headquarters in Billund, Denmark. CPL will share knowledge for the 3^rd Batch of young engineers through webinars, providing insights on CPL’s experimentation mindset, guidance on toy development and standards, and feedback on toy prototypes developed by the engineering students.

This event was held on February 6, 2025 at MeitY was graced by Shri Bhuvnesh Kumar, Additional Secretary, MeitY, Shri Abhishek Singh, Additional Secretary, MeitY, Ms. Sunita Verma, GC R&D, MeitY, Shri Vivek Khaneja, ED, CDAC-Noida, Ms. Colette Burke, Global Chief Commercial Officer LEGO Group, Denmark, Mr. Claus Kristensen, Senior Vice President APAC Market Group, Singapore and senior Officers from Ministry and Industry.

*****

Dharmendra Tewari/Kshitij Singha

(Release ID: 2100419) Visitor Counter : 30

MIL OSI Asia Pacific News –

February 7, 2025

MIL-OSI Asia-Pac: HKETO Jakarta celebrates Year of Snake in Brunei

Source: Hong Kong Government special administrative region

HKETO Jakarta celebrates Year of Snake in Brunei
HKETO Jakarta celebrates Year of Snake in Brunei
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The Hong Kong Economic and Trade Office, Jakarta (HKETO Jakarta) hosted a Chinese New Year dinner in Brunei, today (February 6) to celebrate the Year of the Snake. Some 130 guests from the local government, business, academic, cultural and media sectors attended the event. In her welcome speech, the Director-General of the HKETO Jakarta, Miss Libera Cheng, said that commercial and people-to-people ties between Hong Kong and Brunei continued to be robust. Bilateral trade in goods amounted to US$67 million in 2023, representing an annual average growth of over 11 per cent since 2019. High-level exchanges also remained active. “Our shared common law legacy has laid a solid foundation for legal co-operation. During his visit to Brunei in September 2024, the Secretary for Justice met with leaders of the legal sector to advance collaboration on dispute avoidance and resolution pursuant to the Memorandum of Cooperation signed earlier. With the establishment of the Hong Kong Legal International Talents Training Academy in November 2024, we welcome legal talent from Belt and Road countries including Brunei to leverage this platform for deepening exchanges with Hong Kong and other jurisdictions.” Miss Cheng also introduced measures under the 2024 Policy Address for strengthening people-to-people connection between Hong Kong and the Association of Southeast Asian Nations (ASEAN), such as cultivating a Muslim-friendly tourism environment and providing self-service immigration clearance for invited persons from ASEAN countries. “We will continue to maintain close liaison with ASEAN countries including Brunei to facilitate bilateral flow of our peoples.” Dignitaries attending the dinner included the Chargé d’Affaires of the Chinese Embassy in Brunei, Mr Wang Haitao; the former Consul-General of Brunei in Hong Kong, Mrs Ainatol ZahayuMohammad; and the Director of Malaysia of the Hong Kong Trade Development Council, Ms Hoh Jee Eng. Also joining the event were the President of the Law Society of Brunei Darussalam, Haji Muhammad Zainidi bin Haji Abdul Hamid; the Secretary General of the National Chamber of Commerce and Industry of Brunei Darussalam, Haji Abdul Halim bin Haji Saim;the President of the Hong Kong-Malaysia Business Association, Dato’ Dixon Chew; and senior representatives from other major local business chambers. The HKETO Jakarta will continue to host events in the ASEAN countries under its purview to celebrate Chinese New Year in the coming weeks.

Ends/Thursday, February 6, 2025Issued at HKT 20:51

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MIL OSI Asia Pacific News –

February 7, 2025

MIL-OSI USA: Turkana Food Inc. Recalls Aleppo Tahini Sesame Paste 1lb (16oz) Because of Possible Health Risk

Source: US Department of Health and Human Services – 3

Summary

Company Announcement Date:: February 06, 2025
FDA Publish Date:: February 06, 2025
Product Type:: Food & Beverages
Foodborne Illness
Reason for Announcement:: Recall Reason Description

Potential Foodborne Illness – Salmonella
Company Name:: Turkana Food Inc.
Brand Name:: Brand Name(s)

Aleppo
Product Description:: Product Description

Tahini Sesame Paste

Company Announcement

Turkana Food Inc. Kenilworth, NJ is recalling 858 cases OF Aleppo Tahini Sesame Paste because it has the potential to be contaminated with Salmonella, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea (which may be bloody), nausea, vomiting and abdominal pain. In rare circumstances, infection with Salmonella can result in the organism getting into the bloodstream and producing more severe illnesses such as arterial infections (i.e., infected aneurysms), endocarditis and arthritis.

The Recalled Aleppo Tahini Sesame Paste was distributed in the states of FL, KY, VA, NY, NJ, TN, MA, TX, Il, IN, MI, RI, PA, NC, MD, VA, OH, AL, MO, CA.

The Recalled 1lb (16oz plastic jar Brand name Aleppo Sesame Paste Tahini. The product packaging is a 16oz plastic jar with a gold lid and gold label marked Aleppo Sesame Paste Tahini.

LOT# 120824-01 can be found on the top portion of the jar.

UPC Label 854643003054 marked by a sticker on the side of the jar.

Expiration Date August 2026, which can be found on the top portion of the jar.

No reported illnesses have been confirmed as of 02/05/2025.

The recall was the result of a routine sampling performed by the Ohio Department of Agriculture which revealed that the finished products contained Salmonella. The company has ceased production and distribution of the products as FDA and the company continue their investigation to what caused the problem. Consumers who purchased Aleppo Sesame Paste Tahini With lot code 120824-01 should not consume the product and they are urged to return it to the place of purchase for a full refund.

Consumers with questions may contact Turkana Foods Inc. 908-810-8800 Or email info@turkanafood.com Monday – Friday 8am – 6pm EST.

Company Contact Information

Product Photos

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Michigan Man Charged with Drug Distribution and Loan Fraud

Source: US Department of Health and Human Services – 3

BOSTON – A Michigan man has been charged and has agreed to plead guilty in connection with a conspiracy to import and sell illegal pharmaceuticals, including opioids, and to fund the operation of the scheme by fraudulently obtaining a Covid pandemic relief loan.

Donald Nchamukong, 37, was charged by Information with conspiracy to smuggle goods into the United States, to commit loan fraud and to distribute controlled substances. Nchamukong will make an initial appearance in federal court in Boston on a date to be scheduled by the Court.

According to the charging documents, starting in 2019 and continuing to 2022, Nchamukong and a co-conspirator, Doyal Kalita, conspired to distribute drugs to persons in the United States over the internet and using call centers in India. Nchamukong allegedly used shell companies, including a purported dietary supplements company and an auto parts supplier, and associated bank and merchant accounts to process sales of illegal foreign drugs, including the Schedule IV opioid, tramadol. Nchamukong and Kalita also received shipments of tramadol from India and reshipped the drug to customers across the United States, including in Massachusetts. When the Covid-19 pandemic hit, Nchamukong and Kalita allegedly fraudulently obtained a $200,000 Economic Injury Disaster Loan to fund their illegal drug scheme.

Kalita was convicted in 2024 and sentenced to 10 years in prison for orchestrating the online drug distribution scheme and a technical support fraud scheme and related money laundering.

The charge of conspiracy provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000, or twice the monetary gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Leah B. Foley; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Thomas Demeo, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office; and Fernando P. McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration, Office of Criminal Investigations made the announcement today. Valuable assistance was provided by Homeland Security Investigations in New York, Small Business Administration and the United States Attorney’s Office for the Eastern District of New York. Assistant U.S. Attorney Kriss Basil, Deputy Chief of the Securities, Financial, and Cyber Fraud Unit, is prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, pleasehttps://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Shaheen Speaks with New Hampshire Chamber of Commerce Leaders About Potential Harms from Delayed Trump Tariffs

US Senate News:

Source: United States Senator for New Hampshire Jeanne Shaheen
(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) spoke with representatives from local Chambers of Commerce across New Hampshire about the harmful impact of the potential Trump tariffs on Mexico and Canada, New Hampshire’s largest trading partner. As of earlier this week, these tariffs have been delayed 30 days, but if they go into effect, prices on everything from gas to cars to groceries could skyrocket, hurting Granite Staters and Granite State businesses. Representatives from the New Hampshire Business and Industry Association, Exeter Area Chamber of Commerce, Hampton Area Chamber of Commerce, Upper Valley Business Alliance, Greater Concord Chamber of Commerce, Greater Monadnock Collaborative, Greater Dover Chamber of Commerce, Mt. Washington Valley Chamber and the Greater Portsmouth Chamber Collaborative joined the virtual conversation.
“I’ve spoken with business leaders from around the Granite State, and they’ve told me that what they need to grow and create good-paying jobs that boost our economy is stability and certainty about the economic policies they are facing,” said Shaheen. “To be clear, I’m glad that President Trump has delayed these tariffs, but a delay is not enough. We need to focus on lowering costs for working Americans, not starting a needless and dangerous trade war that would increase prices on critical items and create more uncertainty.”
Shaheen immediately condemned the proposed Trump tariffs after they were announced. On Tuesday night, Shaheen took to the Senate floor to detail the harmful impacts that the delayed Trump tariffs would have on Granite Staters. Last week, Shaheen led the New Hampshire Congressional Delegation in sending a letter to the White House urging him not to impose tariffs on Canada, Mexico and China which are expected to cost the average American $1,200 per year.
Earlier this year, Shaheen introduced new legislation with U.S. Senators Ron Wyden (D-OR) and Tim Kaine (D-VA) to shield American businesses and consumers from rising prices imposed by tariffs on imported goods into the United States. The Senators’ legislation would keep costs down for imported goods by limiting the authority of the International Emergency Economic Powers Act (IEEPA)—which allows a President to immediately place unlimited tariffs after declaring a national emergency—while preserving IEEPA’s use for sanctions and other tools.
After the November election, a multitude of business leaders verified that, if the President placed sweeping tariffs as promised, they’d be forced to raise prices on consumers. The CEO of Best Buy said, “the vast majority of that tariff will probably be passed on to the consumer as a price increase.” The CFO of Walmart said, “there will probably be cases where prices will go up for consumers.” The CEO of Columbia Sportswear said, “we’re set to raise prices” and “it’s going to be very, very difficult to keep products affordable.” The CEO of AutoZone said, “if we get tariffs, we will pass those tariff costs back to the consumer.” The President of a Texas-based Lipow Oil Associates said, “The prices at the pump are going to go up.”

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: HSI Los Angeles teaming with federal and local partners to form task force on combating crimes related to wildfires

Source: US Immigration and Customs Enforcement

LOS ANGELES — In the midst of an unprecedented natural disaster, Homeland Security Investigations (HSI) Los Angeles has teamed up with federal and local law enforcement agencies to create the Joint Regional Fire Crimes Task Force (JRFCTF) to investigate and prosecute fire-related crimes as Los Angeles County recovers from devastating wildfires. The JRFCTF will focus on investigating and prosecuting criminal actors seeking to exploit the wildfire crisis.

The JRCTF includes representatives of HSI Los Angeles’ El Camino Real Financial Crimes Task Force, the United States Attorney’s Office, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Los Angeles County District Attorney’s Office; the Los Angeles City Attorney’s Office, the Los Angeles Police Department, and the Los Angeles County Sheriff’s Department.

“Far too often, during tragic events like the Los Angeles-area wildfires, we have seen greedy individuals seek to line their pockets and divert critical funds from those most in need,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “HSI Los Angeles and partner agencies will do our part to help the region recover and rebuild by ensuring that disaster-related funds will go to individuals and families that lost loved ones.”

The JRCTF investigative focus will be on an assortment of crimes to include looting, burglary and impersonation offenses; crimes related to arson; illegal drone activity; and financial fraud targeting both disaster victims and those wishing to make charitable donations.

Fire victims are vulnerable to being re-victimized by fraud and theft. Its efforts focus on ensuring that relief funds reach those in need and working to swiftly prosecutor those engaged in defrauding donors.

While generous people around the world are making donations to assist victims, this creates opportunities for scams as criminals exploit disasters for their own gain by sending fraudulent solicitations or creating deceiving websites. Potential donors are urged to make donations only to known entities and to avoid giving donations in cash or via wire transfer.

The JRCTF will also investigate the misuse of aid programs administered by government agencies, such as the Federal Emergency Management Agency and the Small Business Administration. As financial resources are being deployed to support homeowners, renters, nonprofits and businesses affected by the fires, any attempt to misuse these funds through fraud or identity theft will be vigorously investigated and prosecuted.

Anyone with information on financial fraud crimes related to the Los Angeles Area Wildfires are encouraged to call the HSI Tip Line at 877-4-HSI-TIP.

Learn more about HSI’s mission to increase public safety in your community on X, formerly known as Twitter, at @HSILosAngeles.

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Governor Lamont Announces 2025 Legislative Proposal: Reduce Prescription Drug Costs

Source: US State of Connecticut

(HARTFORD, CT) – Governor Ned Lamont today announced that the package of legislative proposals he is presenting to the Connecticut General Assembly for consideration this session includes comprehensive reforms to improve healthcare affordability and mitigate out-of-pocket costs for patients, particularly those related to prescription drugs.

“Families across America are simply paying too much for essential prescription drugs, and these rising costs make accessing health coverage a barrier for far too many people,” Governor Lamont said. “I am urging the state legislature to make lowering prescription drug costs a priority this session. The proposals I’ve presented to them contain wide-ranging steps to lower prescription drug costs and put limits on future price increases.”

Recently, through an initiative launched between the Lamont administration and Comptroller Sean Scanlon, Connecticut joined the ArrayRx prescription drug discount card program, which enables all residents in Connecticut to receive a discount card at no cost that gives them discounts at the pharmacy on certain medications. Working in collaboration with Comptroller Scanlon, Governor Lamont is proposing to expand the use of this card in Connecticut, enabling consumers to receive credit for “cash” prescription drug purchases toward their annual deductible if they paid a lower price than they would have under their insurance coverage.

“Skyrocketing drug prices are forcing too many people into impossible choices, like skipping doses or cutting pills in half,” Comptroller Scanlon said. “That’s just wrong, and it must end. If drug makers and pharmacy benefit managers won’t lower prices for the people of our state, we will. I am proud to be working with Governor Lamont on innovative solutions that will rein in costs and improve healthcare affordability in Connecticut.”

“It’s nearly impossible for someone to follow their healthcare provider’s treatment plan if they can’t afford the out-of-pocket cost for the prescriptions they need,” Dr. Deidre Gifford, commissioner of the Connecticut Office of Health Strategy and Governor Lamont’s senior advisor for health and human services, said. “This proposal focuses on making prescription drugs more affordable for Connecticut residents. It’s good healthcare and it’s good public policy.

Governor Lamont’s proposal, House Bill 6870 (An Act Addressing Patients’ Prescription Drug Costs), contains the following actions:

Permits patients to claim low-cost drug purchases toward deductibles: Establishes a patient’s right to receive credit for out-of-pocket and out-of-network prescription drug expenses toward their annual deductible if they paid a lower price than they would have at an in-network pharmacy with insurance.
Limits annual generic drug price increases to inflation: Limits price increases for generic and off-patent drugs to the annual rate of inflation and authorizing the Connecticut Department of Revenue Services to levy a civil penalty on manufacturers that raise prices above that threshold. By focusing on generic drugs and those that drugs that are coming off patent, Connecticut can respect and encourage innovation yet help clamp down on unfair price spikes for many commonly used drugs.
Establishes a pathway for safe Canadian prescription drug importation: Requires the Connecticut Department of Consumer Protection to assess feasibility of establishing a Canadian prescription drug importation program within Connecticut after reviewing quality, safety, and operational needs.

**Download: Fact sheet on Governor Lamont’s proposed legislation (House Bill 6870)

MIL OSI USA News –

February 7, 2025

MIL-OSI Global: Canadian supply chains are at the epicentre of Trump’s potential trade war

Source: The Conversation – Canada – By Hassan Wafai, Associate Professor, Faculty of Management, Royal Roads University

United States President Donald Trump has temporarily halted his trade war with Canada and Mexico, agreeing to pause his proposed tariffs for at least 30 days.

Regardless of whether Trump will impose the tariffs once the 30 days are up, Canadian supply chains have become the epicentre of these looming disruptions. The country urgently needs to strengthen its supply chain resilience.

If the tariffs were to go into effect, they would reshape the geo-political ecosystem of North America and beyond by disrupting global supply chains. These supply chains are a direct reflection of the geo-political ecosystem in which they operate, and they require stability to establish and thrive.

With approximately $3.6 billion in trade crossing the U.S.-Canada border daily, a sweeping 25 per cent tariff on non-energy goods would have catastrophic effects on the Canadian economy, including shaving 2.6 per cent off Canada’s GDP.

While the list of affected goods and services would be long, the auto industries are likely to be among the hardest hit sectors. Businesses on both sides of the border would be seriously hurt, including major U.S. automakers General Motors, Ford and Stellantis.

The outlook is equally bleak for Mexico, where 83 per cent of exports go to the U.S.

Canadian supply chain resilience

Trump’s potential trade war represents an unconventional, top-down approach to redesigning North American supply chains, which took decades to establish. His aggressive trade policies are disrupting the status quo with devastating and irreversible effects.

Canadian supply chains have historically been prone to major disruptions. Past responses to these disruptions have focused on helping firms build resilience. While this is important, insufficient attention has been given to establishing effective provincial and national governance structures to support and guide supply chain resilience.

There is growing recognition that supply chain resilience should be addressed at the system level. This resilience emerges from both the actions of individual organizations and from the relationships and interactions between them.

System-level supply chain resilience is influenced by governmental or regulatory bodies that set policies to manage long-term supply risks. These are known as governance structures or mechanisms.

Canada’s long-term strategic response must go beyond helping Canadian companies integrate into alternative global supply chains outside the U.S. The country must also explore new governance structures that can strengthen the collective resilience of Canadian firms.

Improving supply chain resilience

Trump has been a destabilizing force for international trade and free trade agreements, particularly the Canada-United States-Mexico Agreement, which may have a shorter lifespan than initially agreed upon.

One of the most effective ways for Canada to strengthen its supply chain resilience is to reduce its heavy trade reliance on the U.S., which can be done through free trade agreements. Despite this, Canada has been slow to diversify beyond the U.S., which remains its largest trading partner, accounting for 76 per cent of exports and 64 per cent of imports.

Canada is currently part of 15 free trade agreements that collectively cover 61 per cent of the world’s GDP and provide access to 1.5 billion consumers globally. However, it’s not yet clear how free trade agreements can enhance supply chain resilience.

Canada must look beyond its existing free trade agreements and pursue new markets such as the ASEAN (Association of Southeast Asian Nations) and the Pacific Alliance. Expanding into these regions would allow Canadian companies and supply chains to join global value chains, creating opportunities for knowledge spillovers and productivity boosts.

As Canada diversifies its trade, it must do so with a supply chain mindset, carefully considering the implications of specific trade policies and how they will enhance the resilience of Canadian supply chains.

Future free trade agreements should incorporate clear and specific clauses that anticipate disruptions and help with swift supply chain recovery. A prime example of such an agreement is the Indo-Pacific Economic Framework for Prosperity, which came into effect in October 2024.

Beyond international trade, Canada should also eliminate interprovincial trade barriers to facilitate easier business operations across Canadian provinces and territories.

Stronger supply chain governance

More research is needed to determine exactly which governance structures should be put in place to support Canada’s supply chain resilience.

The Canadian government may need to establish a multi-level governance structure encompassing sectoral, provincial and national levels, such as supply chain councils.

Supply chain councils could connect supply chains with small and medium-sized enterprises, leverage existing networks, co-ordinate resilience strategies and address supply chain and trade policy issues of national significance.

With Trump back in the White House, Canada must be prepared to protect its supply chains against an evolving trade war. Whether his policies are driven by his imperialist ideology, a protectionist agenda, border security concerns or the pursuit of more revenue from slapping tariffs on America’s closest allies, the threat to Canadian supply chains is real.

To withstand these pressures, Canada must build resilience at the systemic level, where top-down governance ensures the private sector can respond quickly and effectively to disruptions. It is never too late to start, but waiting any longer is no longer an option for Canada.

Juan Navarro is the president and principal researcher of CMX Partnerships, a business and research consultancy that provides advice and conducts studies for companies, institutions, and governments.

Kimberly Tholl consults for Nexus Insights Consulting Ltd. and is a member of the non-profit Association for Supply Chain Management (ASCM).

Hassan Wafai does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. Canadian supply chains are at the epicentre of Trump’s potential trade war – https://theconversation.com/canadian-supply-chains-are-at-the-epicentre-of-trumps-potential-trade-war-248987

MIL OSI – Global Reports –

February 7, 2025

MIL-OSI USA: News 02/6/2025 Blackburn Celebrates Her Legislation Passing Out of Commerce Committee

US Senate News:

Source: United States Senator Marsha Blackburn (R-Tenn)

WASHINGTON, D.C. – U.S. Senator Marsha Blackburn (R-Tenn) released the following statement after five bills that she sponsored or co-sponsored passed out of the Senate Committee on Commerce, Science, and Transportation. This includes the American Music Tourism Act, the Promoting Resilient Supply Chains Act, the Strengthening Support for American Manufacturing Act, the She DRIVES Act, and the TORNADO Act.

“The 119^th Congress is already off to a productive start, and I am pleased that five of my bills have moved forward out of the Commerce Committee to the full Senate for a vote,” said Senator Blackburn. “I urge my Senate colleagues to support this legislation, which will promote American music tourism, strengthen U.S. supply chains for emerging technologies, boost domestic manufacturing, enhance vehicle safety standards, and improve the forecasting of hazardous weather.”

BACKGROUND:

See below for more information on each piece of legislation.

The American Music Tourism Act, sponsored by Senator Blackburn, would leverage the existing framework within the Department of Commerce to highlight and promote music tourism in the United States. It would require the Department of Commerce’s Assistant Secretary for Travel and Tourism to implement a plan to support and increase music tourism for both domestic and international visitors as well as a report to Congress on the successes and vulnerabilities of the Assistant Secretary’s goals to increase travel and tourism.

The Promoting Resilient Supply Chains Act, co-led by Senator Blackburn, would authorize the Department of Commerce to strengthen American supply chains for critical industries and emerging technologies by working with the private sector and U.S. government partners to anticipate and prevent future supply chain disruptions before they happen.

The Strengthening Support for American Manufacturing Act, co-led by Senator Blackburn, would streamline federal efforts to boost domestic manufacturers and support workers. It would also assess the Department of Commerce’s efforts to support manufacturers and suggest solutions to improve the Department’s manufacturing programs to better serve manufacturers – many of which are small businesses.

The She Develops Regulations in Vehicle Equality and Safety (She DRIVES) Act, co-led by Senator Blackburn, would enhance passenger vehicle safety by updating U.S. crashworthiness testing procedures. It would require the use of the most advanced testing devices available, including a female crash test dummy.

The Tornado Observation Research Notification and Deployment to Operations (TORNADO) Act, co-sponsored by Senator Blackburn, would improve the forecasting of tornadoes and other hazardous weather by requiring the National Oceanic and Atmospheric Administration to prepare and submit an action plan for the national implementation of high-resolution probabilistic guidance for tornado forecasting and prediction.

MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Polis Administration Announces Higher Purpose Homes and VeroTouch as Latest IHIP Grant Recipients

Source: US State of Colorado

VeroTouch Unveils First Homes 3D Printed in Colorado

DENVER – Today, Governor Polis and the Business Funding & Incentives division of the Colorado Office of Economic Development and International Trade (OEDIT) announced two new recipients of the Innovative Housing Incentive Program (IHIP) grant to support the development of the off-site construction industry and create more housing at a lower cost across the state: Higher Purpose Homes and VeroTouch. The announcement comes the same day VeroTouch unveils the first houses 3D-printed in Colorado.

“We are proud to accelerate innovation in housing to better address Colorado’s housing needs,” said Governor Jared Polis. “The unveiling of the first 3D-printed homes in the state is a great example of our state’s efforts to support new construction methods and create more housing now.”

Compared to traditional building practices, off-site construction can produce housing more efficiently and at a lower cost while creating stable, year-round, high-quality jobs. Early results suggest that state support of construction methods like modular, manufactured, panelized and 3-D printed homes are growing the industry and generating new homes in Colorado. The annual percentage of Colorado’s modular housing units produced by out of state manufacturers has decreased from 91% to less than 50%.

The funding announced today will directly incentivize the creation of over 160 attainable housing units. With this latest round of grants, the Polis Administration has awarded 14 IHIP grants directly incentivizing the creation of 2,300 attainable housing units across Colorado and contributing to the recipients’ work to create more than 7,500 units over three years. To date, 705 housing units have been produced with support from IHIP.

“It’s exciting to see the statewide impact of the Innovative Housing Incentive Program as it continues to support the growth of innovative housing manufacturers located across the state, including the Buena Vista and Durango recipients announced today,” said Eve Lieberman, Executive Director of OEDIT. “We commend these companies for their efforts to help increase the supply of housing which, over time, will enable more Coloradans to live in the communities they love and be close to their jobs”

The recipients announced today include:

Higher Purpose Homes – Durango – This panelized housing manufacturer constructs floors, walls and roofs in a manufacturing facility and then uses a crane to place the pieces. The company estimates that 30% of its homes will be deed-restricted and affordable. In 2023, the Colorado Economic Development Commission approved Higher Purpose Homes for the Rural Jump-Start program, which encourages economic development and job creation in rural communities across the state. Through IHIP, Higher Purpose Homes is approved for up to $590,000 for constructing a projected 95 units over three years.

VeroTouch Construction – Buena Vista – This 3D printed housing manufacturer uses robots to print single- and multi-family concrete homes on-site. Today, the company is unveiling the first two homes 3-D printed in Colorado: two-bed, two-bath, 1,100 square foot units in downtown Buena Vista as part of a 31-unit development. VeroTouch Construction is approved for up to $618,000 for constructing a projected 67 units over three years.

About the Innovative Housing Incentive Program

The Innovative Housing Incentive Program (IHIP) helps address Colorado’s housing shortage by supporting the development and expansion of the state’s innovative housing manufacturing businesses. IHIP is part of an emerging suite of OEDIT-affiliated programs that offer housing financing tools to help increase the supply of affordable and attainable housing across Colorado. These programs include the Proposition 123 Affordable Housing Financing Fund, staffing of the Middle Income Housing Authority, work by the Colorado Creative Industries Division via the Community Revitalization and Space to Create programs and incentivizing housing units with the Historic Preservation Tax Credit.

About Colorado Office of Economic Development and International Trade (OEDIT)

The Colorado Office of Economic Development and International Trade (OEDIT) works with partners to create a positive business climate that encourages dynamic economic development and sustainable job growth. Under the leadership of Governor Jared Polis, we strive to advance the State’s economy through financial and technical assistance that fosters local and regional economic development activities throughout Colorado. OEDIT offers a host of programs and services tailored to support business development at every level including business retention services, business relocation services, and business funding and incentives. Our office includes the Global Business Development division; Colorado Tourism Office; Colorado Outdoor Recreation Industry Office; Colorado Creative Industries; Business Financing & Incentives division; the Colorado Small Business Development Network; Cannabis Business Office; Colorado Office of Film, TV & Media; the Minority Business Office; Employee Ownership Office; and Rural Opportunity Office. Learn more at oedit.colorado.gov.

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MIL OSI USA News –

February 7, 2025

MIL-OSI USA: Booker, Kennedy Introduce Bill to Give Small Businesses Increased Access to Disaster Loans

US Senate News:

Source: United States Senator for New Jersey Cory Booker
WASHINGTON, D.C. – U.S. Senators Cory Booker (D-NJ) and John Kennedy (R-LA), a member of the Senate Appropriations and Banking Committees, introduced the Small Business Disaster Damage Fairness Act of 2025. The bill would allow borrowers to get a Small Business Administration (SBA) disaster assistance loan for up to $50,000, rather than the current $14,000, without pledging collateral.
Despite rising costs, the collateral threshold has remained stagnant for over a decade. The collateral threshold for major disasters has been at $14,000 since 2008 for SBA-declared disasters. In 2015, Congress passed Booker and Kennedy’s Rebuilding Small Businesses After Disasters Act, which temporarily increased the SBA collateral threshold to $25,000 in 2015.
“New Jerseyans are unfortunately too familiar with the impacts of extreme weather, from hurricanes to major flooding events. The last thing homeowners and small businesses should need to worry about is how they will access the funding they need to rebuild after a storm. This bill will help ensure small businesses everywhere have the support they need to recover in the wake of a disaster,” said Senator Booker.
“Too many small business owners can’t put up collateral for a loan when disaster strikes. As a result, they can’t re-open their doors. My bill would make sure small businesses can get back to serving their communities after disasters hit,” said Senator Kennedy.
The SBA’s Disaster Loan Program is designed to help homeowners, renters, businesses and nonprofits repair, rebuild and recover from disaster-related losses. In 2024, there were 27 weather-related disasters that caused at least $1 billion in damage.
The bill also codifies the Government Accountability Office (GAO)’s recommendation to distinguish between rural and urban communities for outreach and instructs the GAO to further report the Disaster Loan Program’s default rate.
U.S. Senator Mazie Hirono (D-HI) cosponsored the bill.
The read the full text of the bill, click here.

MIL OSI USA News –

February 7, 2025

MIL-OSI United Kingdom: Tariffs on non-folding e-bikes from China revoked

Source: United Kingdom – Executive Government & Departments

Government accepts TRA recommendation to revoke anti-dumping and countervailing measures on imports of Chinese non-folding e-bikes to the UK.

The Secretary of State for Business and Trade has today (Thursday 6 February) accepted a recommendation provided by the TRA to revoke anti-dumping and countervailing measures on imports of Chinese non-folding e-bikes to the UK. Non-folding e-bikes make up around 95% of the UK’s total e-bikes market.

Anti-dumping and countervailing measures on e-bikes imported from China, both folding and non-folding, were transitioned when the UK left the EU. The current anti-dumping measure is an ad valorem tariff of 10.3% to 70.1%, while the current countervailing measure is an ad valorem tariff of 3.9% to 17.2%.

The TRA found that revoking the measures on non-folding e-bikes could mean that consumers, on average, could save around £200 each as a result of being able to purchase cheaper e-bikes.

Alternative option accepted

In its transition reviews, the TRA found that keeping the measures on all imports of Chinese e-bikes would not be in the economic interest of the UK.

Under the UK’s reformed trade remedies regime, if the TRA finds that a measure is not in the economic interest of the UK, it offers the Secretary of State for Business and Trade alternative options to revoking the measures.

These alternative options included only maintaining the measures on folding e-bikes as UK producers are more heavily concentrated in this market. It is this option that the Secretary of State has today accepted.

The measure only applying to folding e-bikes will come into force from 7 February 2025.

Notes to Editors

The goods investigated were classified as cycles, with pedal assistance, with an auxiliary electric motor.
The averages used here are estimates representing the average impacts across scenarios modelled.
The investigations covered the period from 1 April 2022 to 31 March 2023. In order to assess injury, the TRA examined the period from April 2019 to March 2023.
The TRA is the UK body that investigates whether trade remedy measures are needed to counter unfair import practices and unforeseen surges of imports.
Trade remedy investigations were carried out by the EU Commission on the UK’s behalf until the UK left the EU. A number of EU trade remedy measures of interest to UK producers were carried across into UK law when the UK left the EU and the TRA is currently reviewing each one to assess whether it is suitable for UK needs.

Published 6 February 2025

MIL OSI United Kingdom –

February 7, 2025

MIL-OSI Economics: ICC urges negotiation over retaliation on trade tariffs

Source: International Chamber of Commerce

Headline: ICC urges negotiation over retaliation on trade tariffs

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MIL OSI Economics –

February 7, 2025

MIL-OSI USA: Padilla, Sheehy, Hickenlooper, Daines Introduce Bipartisan Bill to Establish Unified National Wildfire Intelligence Center

US Senate News:

Source: United States Senator Alex Padilla (D-Calif.)

Padilla, Sheehy, Hickenlooper, Daines Introduce Bipartisan Bill to Establish Unified National Wildfire Intelligence Center

Modeled after National Weather Service and NOAA Water Center, would coordinate fire response amongst various federal, state, and academic institutions

WASHINGTON, D.C. — As Southern California rebuilds from devastating fires, U.S. Senators Alex Padilla (D-Calif.), Tim Sheehy (R-Mont.), John Hickenlooper (D-Colo.), and Steve Daines (R-Mont.) announced bipartisan legislation to create a national Wildfire Intelligence Center to streamline federal response and create a whole-of-government approach to combat wildfires. The joint office, created between the Department of Agriculture, the Department of Commerce, and the Department of the Interior, would facilitate coordination and information sharing across federal and state departments and agencies, tribal entities, academia, and the private sector on wildland fires.

At the federal level, various departments and agencies have their own fire management goals, firefighters, and jurisdictions on which they respond to fires. The current division of responsibilities leaves gaps for cross-department collaboration and is unnecessarily burdensome. A national Wildfire Intelligence Center would compile comprehensive information on wildfires to better inform and streamline wildfire responses and recovery by providing states with a central command within the federal government. This center would also increase monitoring and imaging capabilities that land management agencies currently cannot achieve.

“The devastating Southern California fires are the latest example of increasingly intense and frequent fires ravaging communities within both local jurisdictions and on federal land,” said Senator Padilla. “Wildfires don’t distinguish between our boundaries, and we can’t afford to be siloed in our response. The scale of the wildfire crisis demands a singular, whole-of-government wildfire intelligence center to foster cross-agency collaboration and save lives.”

“We can all agree that the federal government must do a better job protecting our people, property, public lands, and communities from wildfires, and this bill will go a long way in streamlining our wildland firefighting efforts and best leveraging all available resources to accomplish our shared mission. As the only aerial firefighter in the Senate, I’m proud to be working with folks on both sides of the aisle to deliver commonsense solutions to more effectively fight the devastating threat of wildfires and protect the American people,” said Senator Sheehy.

“Wildfires don’t care about state lines or forest service boundaries,” said Senator Hickenlooper. “A centralized wildfire intelligence center will speed our response to fires and promote cross-agency collaboration to tackle them.”

“As fire season rapidly approaches for Montana, we need all hands on deck to prevent catastrophic disasters. Sharing information and resources between agencies will undoubtedly help Montana communities take preventive measures and better combat fires and coordinate response efforts,” said Senator Daines.

“The Wildfire Intelligence Center established by this bill will harness cutting-edge technology to give decision-makers real-time insights across jurisdictions and landscapes, enhancing coordination at every stage of a fire. The tools to tackle the megafire crisis already exist — this bill brings us closer to putting them in the hands of firefighters and land managers where they can make a real impact,” said Matt Weiner, CEO of Megafire Action. “Senators Padilla and Sheehy understand the urgent need to modernize our wildfire management system, and we look forward to working with them to get this bill signed into law and turn that vision into reality.”

“FAS applauds Senators Padilla and Sheehy for introducing this bill, which would take a crucial step forward in protecting our communities from increasingly severe wildfires. The Wildfire Intelligence Center would bring together expertise at all levels of government to give our firefighters and first responders access to cutting-edge tools and the decision support they need to confront this growing crisis,” said James Campbell, Wildfire Policy Specialist at the Federation of American Scientists.

“APCIA supports the Wildfire Intelligence Collaboration and Coordination Act introduced by Senator Padilla (D-CA) and Senator Sheehy (R-MT). This bill reflects the bipartisan recommendations of the Wildland Fire Mitigation and Management Commission to create a joint interagency center to improve fire assessment and prediction in the wildland and built environment. With the risk of catastrophic wildfires increasing, Congress must take action to pass bills like this one that will lead to better land and fuels management, reduce risk to communities, and improve fire management and response,” said David A. Sampson, APCIA’s President and CEO.

Advances in wildfire technology hold great promise, however available technological services are highly fragmented across more than 50 federal programs. Simply put, the technology is available, but the government currently lacks the ability to get these tools in the hands of those who desperately need it, when they need it. The Wildfire Intelligence Center will leverage cutting-edge technology and improve the effectiveness of the many entities engaged in wildfire work.

Specifically, the Wildfire Intelligence Center would study, coordinate, and implement fire suppression and mitigation strategies among the Agriculture, Commerce, and Interior departments, including providing comprehensive assessment and modeling of wildfires to inform response, risk reduction, land and fuels management, post-wildfire recovery, and rehabilitation. This center would be modeled after similar information sharing centers like the National Weather Service and the National Oceanic and Atmospheric Administration’s (NOAA) Water Center, which coordinate information sharing to educate people, improve understanding, and foster collaboration amongst various federal, state, and academic units.

The Wildfire Intelligence Collaboration and Coordination Act is endorsed by Megafire Action, Federation of American Scientists, Association of FireTech Innovation, Alliance for Wildfire Resilience, Climate and Wildfire Institute, Rural Voices for Conservation Coalition, The Stewardship Project, Tall Timbers, Grassroots Wildland Firefighters, American Forests, Environmental Defense Fund, and American Property Casualty Insurance Association.

Senator Padilla has long been a leader in strengthening the federal and state response to wildfires. Earlier this week, Padilla announced a package of three bipartisan bills to bolster fire resilience and proactive mitigation efforts, including the Wildfire Emergency Act, the Fire-Safe Electrical Corridors Act, and the Disaster Mitigation and Tax Parity Act. Last month, he introduced another suite of three bipartisan bills to strengthen wildfire resilience and rebuilding efforts through legislation including the Wildland Firefighter Paycheck Protection Act, the Fire Suppression and Response Funding Assurance Act, and the Disaster Housing Reform for American Families Act. Padilla’s legislation to strengthen FEMA’s wildfire preparedness and response efforts, the FIRE Act, became law in 2022.

A one-pager on the Wildfire Intelligence Collaboration and Coordination Act is available here.

Full text of the bill is available here.

MIL OSI USA News –

February 7, 2025

MIL-OSI Canada: Tariff Response Survey, Hotline

Source: Government of Canada regional news

The Province has created channels for Nova Scotian business owners dealing with the United States to get quick access to the latest information related to tariffs.

“Now more than ever, we need to be Nova Scotia loyal. Our local businesses know this, and they’re looking for ways to grow their business across Canada and internationally. They’ll have questions, and we’re here to help,” said Premier Tim Houston. “If the Trump Tax returns, it will raise costs for everyone on both sides of the border. Our hope is the United States will not reinstate this harmful policy. In the meantime, we are fighting for Nova Scotian businesses, and we’ll take strong action to help them stay strong and competitive.”

A survey is at https://novascotia.ca/tariffs . Business people who fill out the online survey will be able to share information about barriers to expanding into interprovincial or international markets. The Province will take that information into account as it moves forward with its tariff response.

There is also a tariff information line at: 1-800-670-4357. If a business person calls and needs follow up, a business navigator will contact them. Other Nova Scotians with questions that require follow up should leave their name, email address and phone number.

Quick Facts:

in 2023, Nova Scotia exports to the U.S. were $4.4 billion and imports were $682.7 million; the leading exports were tires, fish/prepared seafood, forest products, aerospace products, and plastics
Nova Scotia exports to Mexico were $28.5 million in 2023, and imports were $47.6 million
Canada is the largest export market for 36 U.S. states and ranks among the top three for 46 states; 43 states export more than $1 billion annually to Canada
nearly 70 per cent of Canadian goods exported to the U,S, are integral to manufacturing other products, directly supporting American manufacturing
more than 29,000 Nova Scotian jobs depend on exports to the U.S. – about one in every 16 jobs and more than half (54 per cent) of all jobs in Nova Scotia that are supported by international exports

Additional Resources:

Producers and retailers can register for Nova Scotia Loyal by visiting https://www.nsloyal.ca

Other than cropping, CNS photos are not to be altered in any way

MIL OSI Canada News –

February 7, 2025

Category: Commerce

In Aftermath Of Tragedies, Cantwell Tells Trump She’ll Hold Him Accountable To Promises On Aviation Infrastructure

“The president says he wants to see an increase in aviation infrastructure […] So great, Mr. President, we will be calling on you for your help in that effort”; Cantwell is leading ongoing efforts to boost hiring of air traffic controllers & make flying safer

Small business in Australia

It’s a question of trade-offs

The true cost of tax breaks

Targeted programs

Support for tax breaks

Under MeitY’s research initiatives, CDAC-Noida Sign Letter of Intent (LoI) with LeGO Group to boost indigenous electronics Toy industry ecosystemMeitY initiative to empower Young Engineers from SC/ST and NER Backgrounds in Toy Innovation

Summary

Company Announcement

Company Contact Information

Product Photos

Canadian supply chain resilience

Improving supply chain resilience

Stronger supply chain governance

Alternative option accepted

Notes to Editors

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Updates to this page

Padilla, Sheehy, Hickenlooper, Daines Introduce Bipartisan Bill to Establish Unified National Wildfire Intelligence Center

Quick Facts:

Additional Resources:

Other than cropping, CNS photos are not to be altered in any way

Under MeitY’s research initiatives, CDAC-Noida Sign Letter of Intent (LoI) with LeGO Group to boost indigenous electronics Toy industry ecosystem

MeitY initiative to empower Young Engineers from SC/ST and NER Backgrounds in Toy Innovation