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  • MIL-OSI: Main Street Financial Services Corp. Announces Earnings for Third Quarter of 2024

    Source: GlobeNewswire (MIL-OSI)

    Business Highlights

    • Financial results reflect a full quarter following the completed merger of Main Street Financial Services Corp. (Main Street) and Wayne Savings Bancshares, Inc. (Wayne) on May 31, 2024.
    • Net income for the third quarter of 2024 totaled $3.4 million, or $0.44 per common share
    • Annualized deposit growth of 7.8% for the quarter ended September 30, 2024
    • Annualized loan growth of 4.6% for the quarter ended September 30, 2024
    • Announced implementation of Dividend Reinvestment Plan for shareholders on October 3, 2024
    • Declared cash dividend of $0.14 per share on October 11, 2024

    WOOSTER, Ohio, Nov. 05, 2024 (GLOBE NEWSWIRE) — Main Street Financial Services Corp. (OTCQX: MSWV), (the “Company”), the holding company parent of Main Street Bank Corp. reported a net income of $3.4 million, or $0.44 per common share, for the three months ended September 30, 2024. Excluding the merger-related expenses (non-GAAP) for the three months ended September 30, 2024, net income was $3.6 million, or $0.46 per share. Merger-related expenses totaled $0.2 million for the quarter, consisting of legal and professional services.

    The Company announced a merger of equals transaction with Wayne Savings Bancshares, Inc. (“Legacy Wayne”) on February 23, 2023. On May 31, 2024 (the “Merger Date”), the Company completed the transaction, forming a financial holding company with assets of $1.4 billion. On the Merger Date, Legacy Wayne merged with and into Main Street, with Main Street surviving the merger (the “Merger”). Immediately following the Merger, Main Street’s wholly owned bank subsidiary, Main Street Bank Corp., merged with and into Wayne Savings Community Bank, with Wayne Savings Community Bank surviving the merger. Upon completion of the Merger, Wayne Savings Community Bank was renamed Main Street Bank Corp.

    The Merger was accounted for as a reverse merger using the acquisition method of accounting, therefore, Legacy Wayne was deemed the acquirer for financial reporting purposes, even though Main Street was the legal acquirer. Accordingly, Legacy Wayne’s historical financial statements are the historical financial statements of the combined company for all periods before the Merger Date. Our consolidated statements of income for the quarters ended June 30, 2024 and September 30, 2024, include the results from Main Street on and after May 31, 2024. Results for periods before May 31, 2024, reflect only those of Legacy Wayne and do not include the consolidated statements of income of Main Street. Accordingly, comparisons of our results for the quarter ended September 30, 2024, with those of prior periods may not be meaningful. The number of shares issued and outstanding, earnings per share, dividends paid and all references to share quantities of Main Street have been retrospectively adjusted to reflect the equivalent number of shares issued in the Merger.

    The return on average equity and return on average assets for the third quarter of 2024 was 12.58% and 1.00%, compared to 14.41% and 0.91%, for the third quarter of 2023. Excluding merger-related expenses (non-GAAP), return on average equity and return on average assets for the quarter ended September 30, 2024, was 13.21% and 1.05%, respectively.

    President and CEO James R. VanSickle commented “2024 has been the most transformational year in the 125-year history of our bank. The successful merger of Main Street and Wayne has provided long-term value for our shareholders and benefits for our customers, communities and employees. We are pleased with our growth in loans and deposits and our solid earnings during our first full quarter of operations ended on September 30, 2024. We remain optimistic about the increased capabilities, scale and profitability of our combined organization.”

    Third Quarter 2024 Financial Results

    Net interest income was $10.7 million for the quarter ended September 30, 2024, an increase of 97.6% from $5.4 million for the quarter ended September 30, 2023. The net interest margin of 3.28% for the third quarter of 2024 increased 40 basis points from 2.88% for the third quarter of 2023. Loan yields were 6.17% for the quarter ended September 30, 2024, an increase of 99 basis points when compared to 5.18% for the quarter ended September 30, 2023. Investment yields increased 111 basis points to 3.45% as of September 30, 2024 when compared to the quarter ended September 30, 2023. The cost of funds for the third quarter of 2024, was 2.64%, an increase of 102 basis points when compared to the third quarter of 2023. The cost of funds increase is largely due to utilizing higher-cost wholesale funding, such as FHLB advances, and shifting deposit composition to higher-yielding product offerings. The cost of total deposits was 2.29% for the quarter ended September 30, 2024, a 90 basis point increase when compared to 1.39% for the quarter ended September 30, 2023. The cost of borrowings for the quarter ended September 30, 2024 totaled 5.45%, an increase of 25 basis points when compared to the quarter ended September 30, 2023.

    A provision for credit losses and unfunded commitments of $109,000 was recorded for the quarter ended September 30, 2024. During the quarter, the Company recognized 86,000 in charge-offs and $36,000 in recoveries, reflecting relatively stable asset quality.

    Noninterest income totaled $1.6 million for the quarter ended September 30, 2024. The Company elected to sell approximately $15 million of the acquired securities portfolio during the quarter, recognizing a gain on sale of investments totaling $702,000.

    Noninterest expense totaled $7.9 million for the quarter ended September 30, 2024, an increase of $4.1 million when compared to the quarter ended September 30, 2023. The increase reflects a full quarter of combined expenses after completion of the merger. Merger-related noninterest expenses (non-GAAP) totaled $0.2 million for the quarter, consisting of legal and professional services. Excluding merger-related expenses (non-GAAP), the Company’s efficiency ratio was 62.9% for the quarter ended September 30, 2024, compared to 58.2% for the quarter ended September 30, 2023.

    September 30, 2024 Financial Condition

    At September 30, 2024, the Company had total assets of $1.39 billion with net loan balances totaling $1.11 billion. Net loans receivable increased by $12.6 million during the third quarter of 2024, or 4.6% annualized, primarily in the commercial loan portfolio. As part of the merger, the Company acquired $430.8 million in loans.

    The allowance for credit losses was $11.8 million at September 30, 2024, compared to $7.3 million at December 31, 2023. The increase is a result of establishing an allowance for credit losses on the acquired non-PCD loan portfolio during the second quarter of 2024. The allowance for credit losses as a percent of total loans was 1.04%, compared to 1.09% as of December 31, 2023. The allowance for credit losses and the related provision for credit losses is based on management’s judgment and evaluation of the loan portfolio. Management believes the current allowance for credit losses is adequate, however, changing economic and other conditions may require future adjustments to the allowance for credit losses.

    Total nonperforming loans (NPLs) was $5.4 million at September 30, 2024, an increase from $0.4 million at December 31, 2023. The NPL to net loan receivable ratio was 0.48% as of September 30, 2024. Past due loan balances of 30 days and more increased from $2.8 million at December 31, 2023, to $13.2 million, or 1.18% of net loans outstanding, at September 30, 2024. The increase in nonperforming and past due loans is due to the impact of the acquired loan portfolio.

    Improvement in Asset Quality Since Merger Announcement: The combined level of classified loans and loans past due 30 or more days was $24.4 million and $19.1 as of December 31, 2022. Since the merger announcement on February 23, 2023, the management teams of both Main Street and Wayne invested a great deal of time ensuring our combined organization utilizes strong underwriting standards and proactively monitors credit quality. Main Street sold approximately $15.2 million of loans in August 2023 and April 2024, of which approximately $12.7 million were classified loans. As of September 30, 2024, the resultant Company has $14.6 of classified loans and $13.2 of loans past due 30 or more days.

    Total liabilities increased to $1.28 billion at September 30, 2024 with deposits totaling $1.10 billion and FHLB advances totaling $140.0 million. Deposits grew by $21.2 million, or 7.8% annualized, during the third quarter of 2024. As part of the merger, the Company acquired $487.4 million in deposits. As of September 30, 2024, the Company held no brokered deposits compared to $116.7 million at December 31, 2024. The Company leverages FHLB advances for short-term funding needs due to their accessibility and alignment with prevailing market rates. As of September 30, 2024, the Company held $140.0 million in FHLB advances.

    Total stockholders’ equity was $111.3 million at September 30, 2024, an increase of $58.4 million when compared to the December 31, 2023 balance. The increase was primarily driven by the merger between Main Street and Wayne. Total stockholders’ equity increased during the third quarter of 2024 by $5.3 million, primarily from net income of $3.4 million and an increase in accumulated other comprehensive income benefit of $2.8 million, partially offset by dividends of $1.1 million.

    Main Street Financial Services Corp. is a holding company headquartered in Wooster, Ohio. Its primary subsidiary, Main Street Bank Corp. was founded in 1899 and provides full-service banking, commercial lending, and mortgage services across its branch infrastructure. Today, Main Street Bank Corp. operates 19 branch locations in Wooster, Ohio, Wheeling, West Virginia and other surrounding communities in Ohio and West Virginia. Additional information about Main Street Bank Corp. is available at www.mymainstreetbank.bank.

    Non-GAAP Disclosure
    This press release includes disclosures of the Company’s return on average equity, return on average assets, net income, and efficiency ratios which are excluding costs related to merger activities which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flow that excludes or includes amounts that are required to be disclosed by GAAP. The Company believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and the Company’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP.

    Forward-Looking–Statements
    This release contains forward-looking statements that are not historical facts and that are intended to be “forward-looking statements” as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions and other statements contained in this release that are not historical facts and pertain to the Company’s future operating results. When used in this release, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements. Actual results may differ materially from the results discussed in these forward-looking statements, because such statements are inherently subject to significant assumptions, risks and uncertainties, many of which are difficult to predict and are generally beyond the Company’s control. These include but are not limited to: the possibility of adverse economic developments that may, among other things, increase default and delinquency risks in the Company’s loan portfolios; shifts in interest rates; shifts in the rate of inflation; shifts in the demand for the Company’s loan and other products; unforeseen increases in costs and expenses; lower-than-expected revenue or cost savings in connection with acquisitions; changes in accounting policies; changes in the monetary and fiscal policies of the federal government; and changes in laws, regulations and the competitive environment. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

    Contact Information:
    Matthew Hartzler
    Senior Vice President, Chief Financial Officer
    (330) 264-5767

     
    MAIN STREET FINANCIAL SERVICES CORP.
    Condensed Consolidated Balance Sheets
    (Dollars in thousands, except share data – unaudited)
      September 30, 2024   December 31, 2023
    ASSETS      
           
    Cash and cash equivalents $ 40,654     $ 20,884  
    Securities, net (1)   152,915       86,405  
    Loans held for sale   –       –  
    Loans receivable, net   1,118,781       669,603  
    Federal Home Loan Bank stock   7,420       3,959  
    Premises & equipment, net   11,119       4,904  
    Bank-owned life insurance   22,013       11,706  
    Other assets   40,351       12,486  
    TOTAL ASSETS $ 1,393,252     $ 809,947  
           
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
           
    Deposit accounts $ 1,101,999     $ 693,126  
    Other short-term borrowings   25,715       8,743  
    Federal Home Loan Bank advances   140,000       47,000  
    Accrued interest payable and other liabilities   14,218       8,111  
    TOTAL LIABILITIES   1,281,932       756,980  
           
           
    Common stock (7,801,011 shares of $1.00 par value issued)   7,801       398  
    Additional paid-in capital   55,640       36,715  
    Retained earnings   54,133       55,342  
    Treasury Stock, at cost – 0 shares and 1,777,824 shares at      
    September 30, 2024 and December 31, 2023, respectively.   –       (30,330 )
    Accumulated other comprehensive loss   (6,254 )     (9,158 )
    TOTAL STOCKHOLDERS’ EQUITY   111,320       52,967  
           
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,393,252     $ 809,947  
           
    (1) Includes available-for-sale and held-to-maturity classifications.
    Note: The December 31, 2023 Condensed Consolidated Balance Sheet has been derived from the audited Consolidated Balance Sheet as of that date.
           
     
    MAIN STREET FINANCIAL SERVICES CORP.
    Condensed Consolidated Statements of Income
    (Dollars in thousands, except share data – unaudited)
                   
                   
      Three Months Ended   Nine Months Ended
      September 30,   September 30,
        2024     2023     2024     2023
                   
    Interest income $ 18,930   $ 9,078   $ 41,196   $ 25,550
    Interest expense   8,308     3,673     19,134     8,590
    Net interest income   10,622     5,405     22,062     16,960
    Provision for credit losses   109     138     4,703     526
    Net interest income after provision for credit losses   10,513     5,267     17,359     16,434
    Non-interest income   1,600     691     2,994     2,000
    Non-interest expense              
    Salaries and employee benefits   3,799     2,049     8,688     5,949
    Net occupancy and equipment expense   1,465     629     2,970     1,806
    Federal deposit insurance premiums   118     117     440     374
    Franchise taxes   51     98     358     299
    Advertising and marketing   190     49     408     179
    Legal   195     11     508     362
    Professional fees   371     54     1,664     270
    ATM network   79     121     474     320
    Auditing and accounting   193     60     386     180
    Other   1,403     545     2,625     1,337
    Total non-interest expense   7,863     3,733     18,520     11,076
    Income before federal income taxes   4,251     2,225     1,833     7,358
    Provision for federal income taxes   804     452     315     1,562
    Net income $ 3,446   $ 1,773   $ 1,517   $ 5,796
                   
    Earnings per share              
    Basic $ 0.44   $ 0.46   $ 0.27   $ 1.51
    Diluted $ 0.44   $ 0.46   $ 0.27   $ 1.50
                   
     
    MAIN STREET FINANCIAL SERVICES CORP.
    Selected Condensed Consolidated Financial Data
    (Dollars in thousands, except share data – unaudited)
                     
                     
        September   June   March   December
          2024       2024       2024       2023  
                     
    Interest and dividend income   $ 18,930     $ 12,572     $ 9,694     $ 9,545  
    Interest expense     8,308       6,185       4,641       4,330  
    Net interest income     10,622       6,387       5,053       5,215  
    Provision for credit losses     109       4,720       (126 )     4  
    Net interest income after                
    provision for credit losses     10,513       1,666       5,179       5,211  
    Non-interest income     1,600       716       678       1,017  
    Non-interest expense     7,863       6,723       3,934       3,748  
    Income before federal income taxes     4,251       (4,341 )     1,923       2,480  
    Provision for federal income taxes     804       (873 )     384       443  
    Net income   $ 3,446     $ (3,468 )   $ 1,539     $ 2,037  
                     
    Earnings per share – basic   $ 0.44     $ (0.68 )   $ 0.40     $ 0.53  
    Earnings per share – diluted   $ 0.44     $ (0.67 )   $ 0.40     $ 0.53  
    Dividends per share   $ 0.14     $ 0.14     $ 0.14     $ 0.14  
    Return on average assets     1.00 %     -1.38 %     0.76 %     1.02 %
    Return on average equity     12.58 %     -17.16 %     11.63 %     16.90 %
    Shares outstanding at quarter end     7,801,011       7,787,055       3,840,575       3,839,702  
    Book value per share   $ 14.27     $ 13.60     $ 13.81     $ 13.80  
    Tangible equity per share   $ 12.15     $ 11.49     $ 13.36     $ 13.35  
                     
                     
        September   June   March   December
          2023       2023       2023       2022  
                     
    Interest and dividend income   $ 9,078     $ 8,571     $ 7,901     $ 7,518  
    Interest expense     3,673       2,867       2,050       1,248  
    Net interest income     5,405       5,704       5,851       6,270  
    Provision for credit losses     138       170       218       381  
    Net interest income after                
    provision for credit losses     5,267       5,534       5,633       5,889  
    Non-interest income     691       706       603       631  
    Non-interest expense     3,733       3,949       3,394       3,508  
    Income before federal income taxes     2,225       2,291       2,842       3,012  
    Provision for federal income taxes     452       547       563       603  
    Net income   $ 1,773     $ 1,744     $ 2,279     $ 2,409  
                     
    Earnings per share – basic   $ 0.46     $ 0.46     $ 0.60     $ 0.62  
    Earnings per share – diluted   $ 0.46     $ 0.45     $ 0.59     $ 0.63  
    Dividends per share   $ 0.14     $ 0.14     $ 0.14     $ 0.14  
    Return on average assets     0.91 %     0.92 %     1.23 %     1.36 %
    Return on average equity     14.41 %     14.36 %     19.58 %     22.87 %
    Shares outstanding at quarter end     3,837,609       3,837,085       3,831,939       3,825,451  
    Book value per share   $ 12.40     $ 12.64     $ 12.51     $ 11.69  
    Tangible equity per share   $ 11.95     $ 12.20     $ 12.06     $ 11.24  
                     
     
    MAIN STREET FINANCIAL SERVICES CORP.
    Non-GAAP reconciliation
    (Dollars in thousands, except per share data – unaudited)
         
      For three months ended   For the nine months ended
      September 30,   September 30,
          2024       2023       2024       2023  
                   
    Net Income as reported – GAAP   $ 3,446     $ 1,773     $ 1,518     $ 5,796  
    Effect of merger related expenses (net of tax benefit)     170       160       5,743       597  
    Net Income non-GAAP   $ 3,616     $ 1,933     $ 7,261     $ 6,393  
                     
    Earnings per share – GAAP   $ 0.44     $ 0.46     $ 0.27     $ 1.51  
    Effect of merger related expenses     0.02       0.04       1.03       0.16  
    Earnings per share non-GAAP   $ 0.46     $ 0.50     $ 1.30     $ 1.67  
                     
    Return on average assets – GAAP     1.00 %     0.91 %     0.19 %     1.02 %
    Effect of merger related expenses     0.05 %     0.08 %     0.72 %     0.10 %
    Return on average assets non-GAAP     1.05 %     0.99 %     0.91 %     1.12 %
                     
    Return on average equity – GAAP     12.58 %     14.41 %     2.66 %     16.06 %
    Effect of merger related expenses     0.62 %     1.29 %     10.06 %     1.65 %
    Return on average equity non-GAAP     13.20 %     15.70 %     12.72 %     17.71 %
                     
    Efficiency Ratio – GAAP     64.34 %     61.24 %     73.92 %     58.42 %
    Effect of merger related expenses     -1.39 %     -3.07 %     -9.90 %     -3.29 %
    Efficiency Ratio non-GAAP     62.9 %     58.17 %     64.02 %     55.13 %
                     

    The MIL Network –

  • MIL-OSI: Nutanix is Positioned Furthest in Vision Among All Vendors in 2024 Gartner® Magic Quadrant™ for File and Object Storage Platforms

    Source: GlobeNewswire (MIL-OSI)

    SAN JOSE, Calif., Nov. 04, 2024 (GLOBE NEWSWIRE) — Nutanix (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced it is positioned furthest in vision among all vendors in the 2024 Gartner Magic Quadrant for File and Object Storage Platforms. Nutanix believes this recognition is due to the company’s strong vision for an enterprise storage platform that unifies unstructured data across edge, public and private clouds. This, along with the ability to consolidate files, objects and block storage across virtual machines and containers enables customers to consolidate architectures, simplify operations and reduce cost.

    “Nutanix is widely recognized for block-based hyperconverged infrastructure, so it’s particularly rewarding to see our vision recognized in bringing consistent operational leverage to file and object use cases, which increasingly form the data backbone for modern applications and generative AI” said Lee Caswell, SVP, Product and Solutions Marketing at Nutanix.

    Nutanix believes the company was positioned furthest in vision for five key reasons:

    • Modern scale-out architecture: Nutanix Unified Storage (NUS) offers a modern scale-out architecture that enables organizations to start small and efficiently scale out to very large volumes of multi-Petabyte data while also scaling performance;
    • Software-defined storage: NUS provides a software-defined solution that can be deployed across any server platform as well as any location – at the edge, in data centers or in public clouds;
    • Cloud operating model: Nutanix delivers a cloud operating model that extends the Nutanix hallmark of management simplicity to storage and data;
    • Integrated cyber resilience: NUS offers integrated cyber resilience and data security capabilities aligned to the National Institute of Standards and Technology (NIST) cybersecurity framework;
    • Unified platform and licensing: NUS delivers a unified storage platform for NFS, SMB, S3, and iSCSI with a single license meter for any data access type.

    NUS is a software-defined data platform that uniquely consolidates access and management of siloed file, object, and block storage into a single platform. Powered by rich data services such as analytics, ransomware protection, lifecycle management, and data protection, NUS enables organizations to adapt to fast-changing applications’ needs and shift their focus from data storage to more strategic data management. Additionally, in the past year, Nutanix showed significant advancements in high performance for AI workloads with top placement in MLPerf Storage benchmark for training, data protection with zero RPO/RTO metro sync, enhanced cyber resilience through Nutanix Data Lens with an innovative threat containment window followed by automated recovery, and expanded hybrid cloud integration with AWS.

    NUS is designed to power AI and modern cloud-native workloads by offering data locality, exceptional performance, linear scalability, and uncompromising security, supporting both training and inferencing use cases across industries. It also supports hybrid cloud use cases such as disaster recovery, cloud bursting, analytics, and cloud-based data replication and tiering. For video surveillance, NUS delivers high throughput and fault-tolerant storage, ensuring a high ROI for archival, retrieval, and analytics of video data. And finally, it enables workload consolidation by allowing all unstructured data workloads to run on a single platform, supporting both file and object services with multi-protocol capabilities based on application needs.

    “Our video surveillance system is important to physical security on campus, and we often need to add capacity and bandwidth,” said Jeff Blomendahl, IT Manager, University of Kansas Medical Center. “Nutanix makes it easy to grow the system and provide more resources as they are needed.”

    More information on Nutanix and a complimentary copy of the report are available here.

    Source:
    Source: Gartner, Magic Quadrant for File and Object Storage Platforms, Chandra Mukhyala, Julia Palmer, Chandra Mukhyala, Jeff Vogel, 8 October 2024
    GARTNER is a registered trademark and service mark, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

    About Nutanix
    Nutanix is a global leader in cloud software, offering organizations a single platform for running applications and managing data, anywhere. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

    © 2024 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. (“Nutanix”) in the United States and other countries. Other brand names or marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release is for informational purposes only and nothing herein constitutes a warranty or other binding commitment by Nutanix. This release may contain express and implied forward-looking statements, which are not historical facts and are instead based on Nutanix’s current expectations, estimates and beliefs. The accuracy of such statements involves risks and uncertainties and depends upon future events, including those that may be beyond Nutanix’s control, and actual results may differ materially and adversely from those anticipated or implied by such statements. Any forward-looking statements included herein speak only as of the date hereof and, except as required by law, Nutanix assumes no obligation to update or otherwise revise any of such forward-looking statements to reflect subsequent events or circumstances.

    The MIL Network –

  • MIL-OSI: Intapp Announces First Quarter Fiscal Year 2025 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    • First quarter SaaS revenue of $76.9 million, up 30% year-over-year
    • Cloud annual recurring revenue (ARR) of $309.1 million, up 27% year-over-year
    • Trailing twelve months’ cloud net revenue retention rate as of September 30, 2024 was 119%

    PALO ALTO, Calif., Nov. 04, 2024 (GLOBE NEWSWIRE) — Intapp, Inc. (NASDAQ: INTA), a leading global provider of AI-powered solutions for professionals at advisory, capital markets, and legal firms, announced financial results for its fiscal first quarter ended September 30, 2024. Intapp also provided its outlook for the second quarter and updated outlook for the full fiscal year 2025.

    “We’re pleased to start the fiscal year––our fourth as a public company––with the launch of a new vertical AI solution aimed directly at the needs of our target market,” said John Hall, CEO of Intapp. “We are excited by the interest in our new product releases and the ability to support our clients as they move towards digitization and look to innovate through the use of advanced technology.”

    First Quarter of Fiscal Year 2025 Financial Highlights

    • SaaS revenue was $76.9 million, a 30% year-over-year increase compared to the first quarter of fiscal year 2024.
    • Total revenue was $118.8 million, a 17% year-over-year increase compared to the first quarter of fiscal year 2024.
    • Cloud ARR was $309.1 million as of September 30, 2024, a 27% year-over-year increase compared to Cloud ARR as of September 30, 2023. Cloud ARR represented 74% of total ARR as of September 30, 2024, compared to 69% as of September 30, 2023.
    • Total ARR was $417.2 million as of September 30, 2024, a 19% year-over-year increase compared to total ARR as of September 30, 2023.
    • GAAP operating loss was $(7.3) million, compared to a GAAP operating loss of $(14.0) million in the first quarter of fiscal year 2024.
    • Non-GAAP operating income was $15.1 million, compared to a non-GAAP operating income of $6.4 million in the first quarter of fiscal year 2024.
    • GAAP net loss was $(4.5) million, compared to a GAAP net loss of $(15.3) million in the first quarter of fiscal year 2024.
    • Non-GAAP net income was $16.8 million, compared to a non-GAAP net income of $4.6 million in the first quarter of fiscal year 2024.
    • GAAP net loss per share was $(0.06), compared to a GAAP net loss per share of $(0.22) in the first quarter of fiscal year 2024.
    • Non-GAAP diluted net income per share was $0.21, compared to a non-GAAP diluted net income per share of $0.06 in the first quarter of fiscal year 2024.

    Balance Sheet and Cash Flow Highlights

    • Cash and cash equivalents were $253.8 million as of September 30, 2024, compared to $208.4 million as of June 30, 2024.
    • For the three months ended September 30, 2024, net cash provided by operating activities was $24.4 million, compared to net cash provided by operating activities of $11.6 million for the three months ended September 30, 2023.

    Business Highlights

    • As of September 30, 2024, we served more than 2,600 clients, 707 of which each with contracts greater than $100,000 of ARR.
    • We upsold and cross-sold our existing clients such that our trailing twelve months’ cloud net revenue retention rate as of September 30, 2024 was 119%.
    • We continued to add new clients and expand existing accounts including Crete Professionals Alliance, an alliance of accounting and professional services firms, and private equity firms Alpaca Real Estate and NORD Holding.
    • We announced the availability of Intapp Assist for Terms, which expands generative AI functionality to Intapp’s compliance solutions.
    • Intapp DealCloud was named Deal Origination Solution of the Year at the 2024 Private Equity Wire U.S. Credit Awards.

    Second Quarter and Full Fiscal Year 2025 Outlook

      Fiscal 2025 Outlook
      Second Quarter Fiscal Year
      (in millions, except per share data)
    SaaS revenue $79.5 – $80.5 $327.6 – $331.6
    Total revenue $120.5 – $121.5 $495.5 – $499.5
    Non-GAAP operating income $14.0 – $15.0 $61.5 – $65.5
    Non-GAAP diluted net income per share $0.15 – $0.17 $0.73 – $0.77
     

    The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
    The information presented in this press release includes non-GAAP financial measures such as “non-GAAP operating income,” “non-GAAP net income,” and “non-GAAP diluted net income per share.” Refer to “Non-GAAP Financial Measures and Other Metrics” for a discussion of these measures and the financial tables below for reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

    The guidance regarding non-GAAP operating income excludes known pre-tax charges related to estimated stock-based compensation of $23.3 million for the second quarter of fiscal year 2025 and $85.4 million for fiscal year 2025 and amortization of intangible assets of $2.9 million for the second quarter of fiscal year 2025 and $11.2 million for fiscal year 2025. The guidance regarding non-GAAP diluted net income per share excludes known pre-tax charges related to estimated stock-based compensation of $0.28 per share for the second quarter of fiscal year 2025 and $1.02 per share for fiscal year 2025 and amortization of intangible assets of $0.04 per share for the second quarter of fiscal year 2025 and $0.13 per share for fiscal year 2025. The Company has not included a quantitative reconciliation of its guidance for non-GAAP operating income and non-GAAP diluted net income per share to their most directly comparable GAAP financial measures, other than stock-based compensation and amortization of intangible assets, because certain of these reconciling items, including change in fair value of contingent consideration, transaction costs, restructuring and other costs and income tax effect of non-GAAP adjustments, could be highly variable and cannot be reasonably predicted without unreasonable effort. This is due to the inherent difficulty of forecasting the timing of certain events that have not yet occurred and are out of the Company’s control and the amounts of associated reconciling items. Please note that the unavailable reconciling items could significantly impact the Company’s GAAP operating results.

    Corporate Presentation

    A supplemental financial presentation and other information will be accessible through Intapp’s investor relations website at https://investors.intapp.com/.

    Webcast
    Intapp will host a conference call for analysts and investors on Monday, November 4, 2024, beginning at 2:00 p.m. PT (5:00 p.m. ET). The call will be webcast live via the “Investors” section of the Intapp company website at https://investors.intapp.com/. A replay of the call will be available through the Intapp website for 90 days.

    About Intapp

    Intapp software helps professionals unlock their teams’ knowledge, relationships, and operational insights to increase value for their firms. Using the power of Applied AI, we make firm and market intelligence easy to find, understand, and use. With Intapp’s portfolio of vertical SaaS solutions, professionals can apply their collective expertise to make smarter decisions, manage risk, and increase competitive advantage. The world’s top firms — across accounting, consulting, investment banking, legal, private capital, and real assets — trust Intapp’s industry-specific platform and solutions to modernize and drive new growth.

    Forward-Looking Statements

    This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the second quarter and full fiscal year 2025, growth strategy, business plans and market position. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” “expand,” “outlook” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our ability to continue our growth at or near historical rates; our future financial performance and ability to be profitable; the effect of global events on the U.S. and global economies, our business, our employees, our results of operations, our financial condition, demand for our products, sales and implementation cycles, and the health of our clients’ and partners’ businesses; our ability to prevent and respond to data breaches, unauthorized access to client data or other disruptions of our solutions; our ability to effectively manage U.S. and global market and economic conditions, including inflationary pressures, economic and market downturns and volatility in the financial services industry, particularly adverse to our targeted industries; the length and variability of our sales cycle; our ability to attract and retain clients; our ability to attract and retain talent; our ability to compete in highly competitive markets, including AI products; our ability to manage additional complexity, burdens, and volatility in connection with our international sales and operations; the successful assimilation or integration of the businesses, technologies, services, products, personnel or operations of acquired companies; our ability to incur indebtedness in the future and the effect of conditions in credit markets; the sufficiency of our cash and cash equivalents to meet our liquidity needs; and our ability to maintain, protect, and enhance our intellectual property rights. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and any subsequent public filings. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.

    Presentation Changes Related to SaaS and License Revenue

    Effective July 1, 2024, the Company adjusted the classification of support services related to subscription license to be included within “license” on the unaudited condensed consolidated statements of operations. Prior to July 1, 2024, support services related to subscription license were included in a line item entitled “SaaS and Support.” Accordingly, effective July 1, 2024, SaaS revenues include subscription fees from clients accessing our SaaS solutions, premium support services related to SaaS, and updates, if any, to the subscribed service during the subscription term. There was no change to the Company’s revenue recognition policy, except for the change in classification noted herein.

    The presentation of cost of revenues has been conformed to reflect the changes related to the presentation of revenues. Such reclassifications related to the presentation of revenues and cost of revenues did not affect total revenues, operating income, or net income.

    Non-GAAP Financial Measures and Other Metrics

    This press release contains the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP diluted net income per share. These non-GAAP measures exclude the impact of stock-based compensation, amortization of intangible assets, change in fair value of contingent consideration, transaction costs, restructuring and other costs and the income tax effect of non-GAAP adjustments. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

    Free cash flow is a non-GAAP financial measure, and a supplemental liquidity measure that management uses to evaluate our core operating business and our ability to meet our current and future financing and investing needs. It consists of net cash provided by operating activities less cash paid for purchases of property and equipment. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

    Other metrics include total ARR, Cloud ARR and cloud net revenue retention rate. Total ARR represents the annualized recurring value of all active SaaS and on-premise subscription license contracts at the end of a reporting period. Cloud ARR is the portion of the annualized recurring value of our active SaaS contracts at the end of a reporting period. Contracts with a term other than one year are annualized by taking the committed contract value for the current period divided by number of days in that period, then multiplying by 365. Cloud net revenue retention rate is the portion of our net revenue retention rate, which represents the net revenue retention of our SaaS contracts. We calculate Cloud net revenue retention by starting with the Cloud ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period Cloud ARR. We then calculate the Cloud ARR from these same clients as of the current fiscal period, or current period Cloud ARR. We then divide the current period Cloud ARR by the prior period Cloud ARR to calculate the Cloud net revenue retention.

    We believe these non-GAAP financial measures and metrics provide useful information to investors as they are used by management to manage the business, make planning decisions, evaluate our performance, and allocate resources and provide useful information regarding certain financial and business trends relating to our financial condition and results of operations. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

    Guidance for non-GAAP financial measures excludes stock-based compensation expense and amortization of intangible assets. Non-GAAP diluted net income per share is calculated by dividing non-GAAP net income by the estimated diluted weighted average shares outstanding for the period.

    Investor Contact

    David Trone
    Senior Vice President, Investor Relations
    Intapp, Inc.
    ir@intapp.com

    Media Contact

    Ali Robinson
    Global Media Relations Director
    Intapp, Inc.
    press@intapp.com

    INTAPP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited, in thousands, except per share data and percentages)
     
        Three Months Ended
    September 30,    		  
        2024     2023  
    Revenues            
    SaaS   $ 76,876     $ 58,913  
    License     28,492       28,051  
    Professional services     13,437       14,611  
    Total revenues     118,805       101,575  
    Cost of revenues            
    SaaS     15,318       12,711  
    License     1,752       1,702  
    Professional services     14,864       17,160  
    Total cost of revenues     31,934       31,573  
    Gross profit     86,871       70,002  
    Gross margin     73.1 %     68.9 %
    Operating expenses:            
    Research and development     32,427       28,496  
    Sales and marketing     37,760       34,419  
    General and administrative     23,938       21,052  
    Total operating expenses     94,125       83,967  
    Operating loss     (7,254 )     (13,965 )
    Interest and other income (expense), net     3,422       (943 )
    Net loss before income taxes     (3,832 )     (14,908 )
    Income tax expense     (688 )     (413 )
    Net loss   $ (4,520 )   $ (15,321 )
    Net loss per share, basic and diluted   $ (0.06 )   $ (0.22 )
    Weighted-average shares used to compute net loss per share, basic and diluted     75,604       68,937  
    INTAPP, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited, in thousands)
     
        September 30,
    2024    		     June 30,
    2024    		  
    Assets            
    Current assets:            
    Cash and cash equivalents   $ 253,847     $ 208,370  
    Restricted cash     200       200  
    Accounts receivable, net     62,053       95,103  
    Unbilled receivables, net     12,777       13,300  
    Other receivables, net     2,732       2,743  
    Prepaid expenses     11,294       9,031  
    Deferred commissions, current     13,678       13,907  
    Total current assets     356,581       342,654  
    Property and equipment, net     19,441       18,944  
    Operating lease right-of-use assets     20,030       21,382  
    Goodwill     286,472       285,969  
    Intangible assets, net     37,291       40,293  
    Deferred commissions, noncurrent     17,057       18,495  
    Other assets     5,550       5,262  
    Total assets   $ 742,422     $ 732,999  
    Liabilities and Stockholders’ Equity            
    Current liabilities:            
    Accounts payable   $ 16,013     $ 13,348  
    Accrued compensation     33,958       42,066  
    Accrued expenses     8,600       12,040  
    Deferred revenue, net     203,114       218,923  
    Other current liabilities     11,575       14,270  
    Total current liabilities     273,260       300,647  
    Deferred tax liabilities     1,298       1,336  
    Deferred revenue, noncurrent     2,097       3,563  
    Operating lease liabilities, noncurrent     18,626       19,605  
    Other liabilities     5,021       4,610  
    Total liabilities     300,302       329,761  
    Stockholders’ equity:            
    Common stock     78       75  
    Additional paid-in capital     934,585       891,681  
    Accumulated other comprehensive loss     (841 )     (1,336 )
    Accumulated deficit     (491,702 )     (487,182 )
    Total stockholders’ equity     442,120       403,238  
    Total liabilities and stockholders’ equity   $ 742,422     $ 732,999  
    INTAPP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited, in thousands)
     
        Three Months Ended
    September 30,    		  
        2024     2023  
    Cash Flows from Operating Activities:            
    Net loss   $ (4,520 )   $ (15,321 )
    Adjustments to reconcile net loss to net cash provided by operating activities:            
    Depreciation and amortization     4,467       4,009  
    Amortization of operating lease right-of-use assets     1,280       1,130  
    Accounts receivable allowances     550       425  
    Stock-based compensation     19,989       18,757  
    Change in fair value of contingent consideration     (1,004 )     (1,431 )
    Deferred income taxes     (48 )     (113 )
    Other     38       38  
    Changes in operating assets and liabilities:            
    Accounts receivable     30,207       23,472  
    Unbilled receivables, current     523       (3,886 )
    Prepaid expenses and other assets     (2,568 )     (1,342 )
    Deferred commissions     1,667       121  
    Accounts payable and accrued liabilities     (8,060 )     (11,277 )
    Deferred revenue, net     (17,275 )     222  
    Operating lease liabilities     (1,331 )     (1,571 )
    Other liabilities     531       (1,621 )
       Net cash provided by operating activities     24,446       11,612  
    Cash Flows from Investing Activities:            
    Purchases of property and equipment     (354 )     (1,141 )
    Capitalized internal-use software costs     (1,534 )     (1,861 )
    Business combinations, net of cash acquired     (897 )     —  
       Net cash used in investing activities     (2,785 )     (3,002 )
    Cash Flows from Financing Activities:            
    Payments for deferred offering costs     —       (633 )
    Proceeds from stock option exercises     22,918       2,324  
    Payments of deferred contingent consideration and holdback associated with acquisitions     (1,387 )     —  
       Net cash provided by financing activities     21,531       1,691  
    Effect of foreign currency exchange rate changes on cash and cash equivalents     2,285       261  
       Net increase in cash, cash equivalents and restricted cash     45,477       10,562  
    Cash, cash equivalents and restricted cash – beginning of period     208,570       131,185  
    Cash, cash equivalents and restricted cash – end of period   $ 254,047     $ 141,747  
    INTAPP, INC.
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    (Unaudited, in thousands, except per share data and percentages)
     
    The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP financial measures for the periods indicated below:
     
    Non-GAAP Gross Profit
        Three Months Ended
    September 30,    		  
        2024     2023  
    GAAP gross profit   $ 86,871     $ 70,002  
    Adjusted to exclude the following:            
    Stock-based compensation     2,232       1,874  
    Amortization of intangible assets     1,571       1,055  
    Restructuring and other costs     10       —  
    Non-GAAP gross profit   $ 90,684     $ 72,931  
    Non-GAAP gross margin     76.3 %     71.8 %
    Non-GAAP Operating Expenses
        Three Months Ended
    September 30,    		  
        2024     2023  
    GAAP research and development   $ 32,427     $ 28,496  
    Stock-based compensation     (4,624 )     (4,646 )
    Restructuring and other costs     (48 )     —  
    Non-GAAP research and development   $ 27,755     $ 23,850  
                 
    GAAP sales and marketing   $ 37,760     $ 34,419  
    Stock-based compensation     (5,738 )     (5,339 )
    Amortization of intangible assets     (1,268 )     (1,487 )
    Non-GAAP sales and marketing   $ 30,754     $ 27,593  
                 
                 
    GAAP general and administrative   $ 23,938     $ 21,052  
    Stock-based compensation     (7,395 )     (6,898 )
    Amortization of intangible assets     (163 )     (163 )
    Change in fair value of contingent consideration     1,004       1,431  
    Transaction costs (1)     (134 )     (328 )
    Restructuring and other costs     (172 )     —  
    Non-GAAP general and administrative   $ 17,078     $ 15,094  
    Non-GAAP Operating Income
        Three Months Ended
    September 30,    		  
        2024     2023  
    GAAP operating loss   $ (7,254 )   $ (13,965 )
    Adjusted to exclude the following:            
    Stock-based compensation     19,989       18,757  
    Amortization of intangible assets     3,002       2,705  
    Change in fair value of contingent consideration     (1,004 )     (1,431 )
    Transaction costs (1)     134       328  
    Restructuring and other costs     230       —  
    Non-GAAP operating income   $ 15,097     $ 6,394  
    Non-GAAP Net Income
        Three Months Ended
    September 30,    		  
        2024     2023  
    GAAP net loss   $ (4,520 )   $ (15,321 )
    Adjusted to exclude the following:            
    Stock-based compensation     19,989       18,757  
    Amortization of intangible assets     3,002       2,705  
    Change in fair value of contingent consideration     (1,004 )     (1,431 )
    Transaction costs (1)     134       328  
    Restructuring and other costs     230       —  
    Income tax effect of non-GAAP adjustments     (1,024 )     (415 )
    Non-GAAP net income   $ 16,807     $ 4,623  
                 
    GAAP net loss per share, basic and diluted   $ (0.06 )   $ (0.22 )
    Non-GAAP net income per share, diluted   $ 0.21     $ 0.06  
                 
    Weighted-average shares used to compute GAAP net loss per share, basic and diluted     75,604       68,937  
    Weighted-average shares used to compute non-GAAP net income per share, diluted     81,538       79,567  
    Free Cash Flow
        Three Months Ended
    September 30,    		  
        2024     2023  
    Net cash provided by operating activities   $ 24,446     $ 11,612  
    Adjusted for the following cash outlay:            
    Purchases of property and equipment     (354 )     (1,141 )
    Free cash flow (2)   $ 24,092     $ 10,471  
     
    (1) Consists of acquisition-related transaction costs and costs related to certain non-capitalized offering-related expenses.
     
    (2) Beginning with the second quarter ended December 31, 2023, we have excluded capitalized internal-use software costs and cash paid for interest from the calculation of our free cash flow, which we believe better aligns with industry standard. Our free cash flow for prior period presented were recast to conform to the updated methodology and are reflected herein for comparison purposes.

    The MIL Network –

  • MIL-OSI: NXP Semiconductors Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    EINDHOVEN, The Netherlands, Nov. 04, 2024 (GLOBE NEWSWIRE) — NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the third quarter, which ended September 29, 2024. “NXP delivered quarterly revenue of $3.25 billion, in-line with our overall guidance. While we experienced some strength against our expectations in the Communication Infrastructure, Mobile and Automotive end markets, we were confronted with increasing macro related weakness in the Industrial & IoT market. Our guidance for the fourth quarter reflects broader macro weakness especially in Europe and the Americas. We focus on managing what is in our control enabling NXP to drive resilient profitability and earnings in an uncertain demand environment,” said Kurt Sievers, NXP President and Chief Executive Officer.

    Key Highlights for the Third Quarter 2024:

    • Revenue was $3.25 billion, down 5 percent year-on-year;
    • GAAP gross margin was 57.4 percent, GAAP operating margin was 30.5 percent and GAAP diluted Net Income per Share was $2.79;
    • Non-GAAP gross margin was 58.2 percent, non-GAAP operating margin was 35.5 percent, and non-GAAP diluted Net Income per Share was $3.45;
    • Cash flow from operations was $779 million, with net capex investments of $186 million, resulting in non-GAAP free cash flow of $593 million;
    • During the third quarter of 2024, NXP continued to execute its capital return policy with the payment of $259 million in cash dividends, and the repurchase of $305 million of its common shares. The total capital return of $564 million in the quarter represented 95 percent of third quarter non-GAAP free cash flow. On a trailing twelve month basis, capital return to shareholders represented $2.4 billion or 87 percent of non-GAAP free cash flow. The interim dividend for the third quarter 2024 was paid in cash on October 9, 2024 to shareholders of record as of September 12, 2024. On August 29th, the NXP board of directors authorized an additional $2.0 billion for share repurchases, resulting in a $2.64 billion share repurchase balance at the end of the third quarter. Subsequent to the end of the third quarter, between September 30, 2024 and November 1, 2024, NXP executed via a 10b5-1 program additional share repurchases totaling $117 million;
    • On August 20, 2024, ESMC, the previously announced manufacturing joint venture between TSMC, Robert Bosch GmbH, Infineon Technologies AG and NXP Semiconductors N.V. held a groundbreaking ceremony to mark the initial phase of construction of its first semiconductor fab in Dresden, Germany;
    • On September 4, 2024, Vanguard International Semiconductor Corporation and NXP Semiconductors N.V. announced the receipt of all necessary governmental approvals from relevant authorities and injected capital to officially establish the previously announced VisionPower Semiconductor Manufacturing Company Pte Ltd (VSMC) manufacturing joint venture. The company will now proceed with the planned construction of VSMC’s first 300mm wafer manufacturing facility;
    • On September 10, 2024, NXP announced the Trimension® SR250, the industry’s first single-chip, UWB solution to enable Industrial and IoT applications that integrates on-chip processing capabilities with both short-range UWB-based radar and secure ranging;
    • On September 17, 2024, NXP announced the MC33777, the world’s first electric vehicle battery junction box IC that consolidates essential BMS functions into a single device; and
    • On September 24, 2024, NXP announced the new i.MX RT700 crossover MCU family, designed to power smart AI-enabled edge devices, such as wearables, consumer medical devices, smart home devices and HMI platforms.

    Summary of Reported Third Quarter 2024 ($ millions, unaudited) (1)

      Q3 2024
    		   Q2 2024
    		   Q3 2023    Q – Q   Y – Y
    Total Revenue $ 3,250     $ 3,127     $ 3,434     4%   -5%
    GAAP Gross Profit $ 1,866     $ 1,792     $ 1,965     4%   -5%
    Gross Profit Adjustments(i) $ (26 )   $ (41 )   $ (45 )        
    Non-GAAP Gross Profit $ 1,892     $ 1,833     $ 2,010     3%   -6%
    GAAP Gross Margin   57.4 %     57.3 %     57.2 %        
    Non-GAAP Gross Margin   58.2 %     58.6 %     58.5 %        
    GAAP Operating Income (Loss) $ 990     $ 896     $ 992     10%   —%
    Operating Income Adjustments(i) $ (163 )   $ (175 )   $ (211 )        
    Non-GAAP Operating Income $ 1,153     $ 1,071     $ 1,203     8%   -4%
    GAAP Operating Margin   30.5 %     28.7 %     28.9 %        
    Non-GAAP Operating Margin   35.5 %     34.3 %     35.0 %        
    GAAP Net Income (Loss) attributable to Stockholders $ 718     $ 658     $ 787          
    Net Income Adjustments(i) $ (172 )   $ (171 )   $ (178 )        
    Non-GAAP Net Income (Loss) Attributable to Stockholders $ 890     $ 829     $ 965          
    GAAP diluted Net Income (Loss) per Share(ii) $ 2.79     $ 2.54     $ 3.01          
    Non-GAAP diluted Net Income (Loss) per Share(ii) $ 3.45     $ 3.20     $ 3.70          
    Additional information
      Q3 2024
    		   Q2 2024
    		   Q3 2023
    		   Q – Q   Y – Y
    Automotive $ 1,829     $ 1,728     $ 1,891     6%   -3%
    Industrial & IoT $ 563     $ 616     $ 607     -9%   -7%
    Mobile $ 407     $ 345     $ 377     18%   8%
    Comm. Infra. & Other $ 451     $ 438     $ 559     3%   -19%
    DIO   149       148       134          
    DPO   60       64       60          
    DSO   30       27       25          
    Cash Conversion Cycle   119       111       99          
    Channel Inventory (weeks / months)   8 / 1.9       7 / 1.7       7 / 1.5          
    Gross Financial Leverage(iii)   1.9x       1.9x       2.1x          
    Net Financial Leverage(iv)   1.3x       1.3x       1.3x          
                                   
    1. Additional Information for the Third Quarter 2024:
      1. For an explanation of GAAP to non-GAAP adjustments, please see “Non-GAAP Financial Measures”.
      2. Refer to Table 1 below for the weighted average number of diluted shares for the presented periods.
      3. Gross financial leverage is defined as gross debt divided by trailing twelve months adjusted EBITDA.
      4. Net financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.

    Guidance for the Fourth Quarter 2024: ($ millions, except Per Share data) (1)

                  Guidance Range              
      GAAP   Reconciliation   non-GAAP
      Low   Mid   High       Low   Mid   High
    Total Revenue $3,000   $3,100   $3,200       $3,000   $3,100     $3,200
    Q-Q -8%   -5%   -2%       -8%   -5     -2%
    Y-Y -12%   -9%   -6%       -12%   -9     -6%
    Gross Profit $1,674   $1,746   $1,820   $(35)   $1,709   $1,781     $1,855
    Gross Margin 55.8%   56.3%   56.9%       57.0%   57.5%     58.0%
    Operating Income (loss) $810   $872   $936   $(184)   $994   $1,056     $1,120
    Operating Margin 27.0%   28.1%   29.3%       33.1%   34.1%     35.0%
    Financial Income (expense) $(87)   $(87)   $(87)   $(10)   $(77)   $(77)     $(77)
    Tax rate 17.2%-18.2%       16.3%-17.3%
    NCI & Other $(14)   $(14)   $(14)   $(3)   $(11)   $(11)     $(11)
    Shares – diluted 257.0   257.0   257.0       257.0   257.0     257.0
    Earnings Per Share – diluted $2.26   $2.46   $2.66       $2.93   $3.13     $3.33
                                 

    Note (1) Additional Information:

    1. GAAP Gross Profit is expected to include Purchase Price Accounting (“PPA”) effects, $(10) million; Share-based Compensation, $(15) million; Other Incidentals, $(10) million;
    2. GAAP Operating Income (loss) is expected to include PPA effects, $(39) million; Share-based Compensation, $(118) million; Restructuring and Other Incidentals, $(27) million;
    3. GAAP Financial Income (expense) is expected to include Other financial expense $(10) million;
    4. GAAP Non-Controlling Interest (NCI) and Other is expected to include results relating to non-foundry equity-accounted investees $(3) million;
    5. GAAP diluted EPS is expected to include the adjustments noted above for PPA effects, Share-based Compensation, Restructuring and Other Incidentals in GAAP Operating Income (loss), the adjustment for Other financial expense, the adjustment for Non-controlling interest & Other and the adjustment on Tax due to the earlier mentioned adjustments.

    NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP’s control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding “Non-GAAP Financial Measures” below. For the factors, risks, and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding “Forward-looking Statements.” We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances.

    Non-GAAP Financial Measures

    In managing NXP’s business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures, that are not in accordance with, nor an alternative to, U.S. generally accepted accounting principles (“GAAP”). In measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting NXP’s business. We believe that they enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to core operating performance, certain non-cash expenses and share-based compensation expense, which may obscure trends in NXP’s underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management.

    These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in NXP’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).” Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at https://investors.nxp.com for additional information related to our rationale for using these non-GAAP financial measures, as well as the impact of these measures on the presentation of NXP’s operations.

    In addition to providing financial information on a basis consistent with GAAP, NXP also provides the following selected financial measures on a non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisition-related intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) Income tax benefit (provision), (xi) Results relating to non-foundry equity-accounted investees, (xii) Net income (loss) attributable to stockholders, (xiii) Earnings per Share – Diluted, (xiv) EBITDA, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xv) free cash flow, trailing 12 month free cash flow and trailing 12 month free cash flow as a percent of Revenue. The non-GAAP information excludes, where applicable, the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, extinguishment of debt, foreign exchange gains and losses, income tax effect on adjustments described above and results from non-foundry equity-accounted investments.

    The difference in the benefit (provision) for income taxes between our GAAP and non-GAAP results relates to the income tax effects of the GAAP to non-GAAP adjustments that we make and the income tax effect of any discrete items that occur in the interim period. Discrete items primarily relate to unexpected tax events that may occur as these amounts cannot be forecasted (e.g., the impact of changes in tax law and/or rates, changes in estimates or resolved tax audits relating to prior year tax provisions, the excess or deficit tax effects on share-based compensation, etc.).

    Conference Call and Webcast Information

    The company will host a conference call with the financial community on Tuesday, November 5, 2024 at 8:00 a.m. U.S. Eastern Standard Time (EST) to review the third quarter 2024 results in detail.

    Interested parties may preregister to obtain a user-specific access code for the call here.

    The call will be webcast and can be accessed from the NXP Investor Relations website at www.nxp.com. A replay of the call will be available on the NXP Investor Relations website within 24 hours of the actual call.

    About NXP Semiconductors

    NXP Semiconductors N.V. (NASDAQ: NXPI) is the trusted partner for innovative solutions in the automotive, industrial & IoT, mobile, and communications infrastructure markets. NXP’s “Brighter Together” approach combines leading-edge technology with pioneering people to develop system solutions that make the connected world better, safer, and more secure. The company has operations in more than 30 countries and posted revenue of $13.28 billion in 2023. Find out more at www.nxp.com.

    Forward-looking Statements

    This document includes forward-looking statements which include statements regarding NXP’s business strategy, financial condition, results of operations, market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions; our ability to successfully introduce new technologies and products; the demand for the goods into which NXP’s products are incorporated; trade disputes between the U.S. and China, potential increase of barriers to international trade and resulting disruptions to NXP’s established supply chains; the impact of government actions and regulations, including restrictions on the export of US-regulated products and technology; increasing and evolving cybersecurity threats and privacy risks, including theft of sensitive or confidential data; the ability to generate sufficient cash, raise sufficient capital or refinance corporate debt at or before maturity to meet both NXP’s debt service and research and development and capital investment requirements; our ability to accurately estimate demand and match our production capacity accordingly or obtain supplies from third-party producers to meet demand; our access to production capacity from third-party outsourcing partners, and any events that might affect their business or NXP’s relationship with them; our ability to secure adequate and timely supply of equipment and materials from suppliers; our ability to avoid operational problems and product defects and, if such issues were to arise, to correct them quickly; our ability to form strategic partnerships and joint ventures and to successfully cooperate with our alliance partners; our ability to win competitive bid selection processes; our ability to develop products for use in customers’ equipment and products; the ability to successfully hire and retain key management and senior product engineers; global hostilities, including the invasion of Ukraine by Russia and resulting regional instability, sanctions and any other retaliatory measures taken against Russia and the continued hostilities and the armed conflict in the Middle East, which could adversely impact the global supply chain, disrupt our operations or negatively impact the demand for our products in our primary end markets; the ability to maintain good relationships with NXP’s suppliers; and a change in tax laws could have an effect on our estimated effective tax rate. In addition, this document contains information concerning the semiconductor industry, our end markets and business generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, our end markets and business will develop. NXP has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual results may differ from those predicted. While NXP does not know what impact any such differences may have on its business, if there are such differences, its future results of operations and its financial condition could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our SEC filings are available on our Investor Relations website, www.nxp.com/investor or from the SEC website, www.sec.gov.

    For further information, please contact:
       
    Investors: Media:
    Jeff Palmer Paige Iven
    jeff.palmer@nxp.com paige.iven@nxp.com
    +1 408 205 0687  +1 817 975 0602

    NXP-CORP

    NXP Semiconductors
    Table 1: Condensed consolidated statement of operations (unaudited)

    ($ in millions except share data) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
               
    Revenue $ 3,250     $ 3,127     $ 3,434  
    Cost of revenue   (1,384 )     (1,335 )     (1,469 )
    Gross profit   1,866       1,792       1,965  
    Research and development   (577 )     (594 )     (601 )
    Selling, general and administrative   (265 )     (270 )     (294 )
    Amortization of acquisition-related intangible assets   (29 )     (28 )     (71 )
    Total operating expenses   (871 )     (892 )     (966 )
    Other income (expense)   (5 )     (4 )     (7 )
    Operating income (loss)   990       896       992  
    Financial income (expense):          
    Extinguishment of debt   —       —       —  
    Other financial income (expense)   (82 )     (75 )     (75 )
    Income (loss) before income taxes   908       821       917  
    Benefit (provision) for income taxes   (173 )     (154 )     (123 )
    Results relating to equity-accounted investees   (6 )     (3 )     (2 )
    Net income (loss)   729       664       792  
    Less: Net income (loss) attributable to non-controlling interests   11       6       5  
    Net income (loss) attributable to stockholders   718       658       787  
               
    Earnings per share data:          
    Net income (loss) per common share attributable to stockholders in $
    Basic $ 2.82     $ 2.58     $ 3.06  
    Diluted $ 2.79     $ 2.54     $ 3.01  
               
    Weighted average number of shares of common stock outstanding during the period (in thousands):
    Basic   254,458       255,478       257,488  
    Diluted   257,717       258,732       261,095  
               

    NXP Semiconductors
    Table 2: Condensed consolidated balance sheet (unaudited)

    ($ in millions) As of
      September 29, 2024   June 30, 2024   October 1, 2023
    ASSETS          
    Current assets:          
    Cash and cash equivalents $ 2,748     $ 2,859     $ 4,042  
    Short-term deposits   400       400       —  
    Accounts receivable, net   1,070       927       939  
    Inventories, net   2,234       2,148       2,140  
    Other current assets   574       546       495  
    Total current assets   7,026       6,880       7,616  
               
    Non-current assets:          
    Other non-current assets   2,641       2,290       2,236  
    Property, plant and equipment, net   3,309       3,289       3,197  
    Identified intangible assets, net   735       796       1,010  
    Goodwill   9,958       9,941       9,937  
    Total non-current assets   16,643       16,316       16,380  
               
    Total assets   23,669       23,196       23,996  
               
    LIABILITIES AND EQUITY          
    Current liabilities:          
    Accounts payable   899       929       959  
    Restructuring liabilities-current   52       62       16  
    Other current liabilities   1,542       1,622       1,990  
    Short-term debt   499       499       999  
    Total current liabilities   2,992       3,112       3,964  
               
    Non-current liabilities:          
    Long-term debt   9,683       9,681       10,173  
    Restructuring liabilities   4       7       3  
    Deferred tax liabilities   57       48       44  
    Other non-current liabilities   1,189       1,003       1,014  
    Total non-current liabilities   10,933       10,739       11,234  
               
    Non-controlling interests   338       327       310  
    Stockholders’ equity   9,406       9,018       8,488  
    Total equity   9,744       9,345       8,798  
               
    Total liabilities and equity   23,669       23,196       23,996  
               

    NXP Semiconductors
    Table 3: Condensed consolidated statement of cash flows (unaudited)

    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    Cash flows from operating activities:          
    Net income (loss) $ 729     $ 664     $ 792  
    Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:          
    Depreciation and amortization   218       213       273  
    Share-based compensation   115       114       103  
    Amortization of discount (premium) on debt, net   —       1       1  
    Amortization of debt issuance costs   2       1       2  
    Results relating to equity-accounted investees   6       3       2  
    (Gain) loss on equity securities, net   7       3       4  
    Deferred tax expense (benefit)   (40 )     (23 )     (33 )
    Changes in operating assets and liabilities:          
    (Increase) decrease in receivables and other current assets   (167 )     10       40  
    (Increase) decrease in inventories   (86 )     (46 )     (34 )
    Increase (decrease) in accounts payable and other liabilities   118       (220 )     (128 )
    (Increase) decrease in other non-current assets   (134 )     40       (49 )
    Exchange differences   7       5       5  
    Other items   4       (4 )     10  
    Net cash provided by (used for) operating activities   779       761       988  
    Cash flows from investing activities:          
    Purchase of identified intangible assets   (26 )     (55 )     (42 )
    Capital expenditures on property, plant and equipment   (186 )     (185 )     (200 )
    Proceeds from the disposals of property, plant and equipment   —       1       —  
    Purchase of investments   (159 )     —       (31 )
    Net cash provided by (used for) investing activities   (371 )     (239 )     (273 )
    Cash flows from financing activities:          
    Dividends paid to common stockholders   (259 )     (260 )     (262 )
    Proceeds from issuance of common stock through stock plans   39       3       36  
    Purchase of treasury shares and restricted stock unit
    withholdings    		   (305 )     (310 )     (306 )
    Other, net   (1 )     —       (1 )
    Net cash provided by (used for) financing activities   (526 )     (567 )     (533 )
    Effect of changes in exchange rates on cash positions   7       (4 )     (3 )
    Increase (decrease) in cash and cash equivalents   (111 )     (49 )     179  
    Cash and cash equivalents at beginning of period   2,859       2,908       3,863  
    Cash and cash equivalents at end of period   2,748       2,859       4,042  
               
    Net cash paid during the period for:          
    Interest   27       86       38  
    Income taxes, net of refunds   196       193       165  
    Net gain (loss) on sale of assets:          
    Cash proceeds from the sale of assets   —       1       —  
    Book value of these assets   —       (1 )     —  
    Non-cash investing activities:          
    Non-cash capital expenditures   125       166       167  
               

    NXP Semiconductors
    Table 4: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)

    ($ in millions except share data) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    GAAP Gross Profit $ 1,866     $ 1,792     $ 1,965  
    PPA Effects   (12 )     (12 )     (13 )
    Restructuring   —       (4 )     —  
    Share-based compensation   (14 )     (15 )     (14 )
    Other incidentals   —       (10 )     (18 )
    Non-GAAP Gross Profit $ 1,892     $ 1,833     $ 2,010  
    GAAP Gross margin   57.4 %     57.3 %     57.2 %
    Non-GAAP Gross margin   58.2 %     58.6 %     58.5 %
    GAAP Research and development $ (577 )   $ (594 )   $ (601 )
    Restructuring   —       (4 )     4  
    Share-based compensation   (58 )     (58 )     (53 )
    Other incidentals   —       —       (2 )
    Non-GAAP Research and development $ (519 )   $ (532 )   $ (550 )
    GAAP Selling, general and administrative $ (265 )   $ (270 )   $ (294 )
    PPA effects   (1 )     (1 )     (1 )
    Restructuring   —       2       —  
    Share-based compensation   (43 )     (41 )     (36 )
    Other incidentals   (2 )     (2 )     (4 )
    Non-GAAP Selling, general and administrative $ (219 )   $ (228 )   $ (253 )
    GAAP Operating income (loss) $ 990     $ 896     $ 992  
    PPA effects   (42 )     (41 )     (85 )
    Restructuring   —       (6 )     4  
    Share-based compensation   (115 )     (114 )     (103 )
    Other incidentals   (6 )     (14 )     (27 )
    Non-GAAP Operating income (loss) $ 1,153     $ 1,071     $ 1,203  
    GAAP Operating margin   30.5 %     28.7 %     28.9 %
    Non-GAAP Operating margin   35.5 %     34.3 %     35.0 %
    GAAP Income tax benefit (provision) $ (173 )   $ (154 )   $ (123 )
    Income tax effect   9       15       45  
    Non-GAAP Income tax benefit (provision) $ (182 )   $ (169 )   $ (168 )
    GAAP Net income (loss) attributable to stockholders $ 718     $ 658     $ 787  
    PPA Effects   (42 )     (41 )     (85 )
    Restructuring   —       (6 )     4  
    Share-based compensation   (115 )     (114 )     (103 )
    Other incidentals   (6 )     (14 )     (27 )
    Other adjustments:          
    Adjustments to financial income (expense)   (12 )     (8 )     (10 )
    Income tax effect   9       15       45  
    Results relating to equity-accounted investees, excluding Foundry investees1   (6 )     (3 )     (2 )
    Non-GAAP Net income (loss) attributable to stockholders $ 890     $ 829     $ 965  
               
               
    Additional Information:          
    1. Refer to Table 7 below for further information regarding the results relating to equity-accounted investees.
               
    GAAP net income (loss) per common share attributable to stockholders – diluted $ 2.79     $ 2.54     $ 3.01  
    PPA Effects   (0.16 )     (0.16 )     (0.33 )
    Restructuring   —       (0.02 )     0.01  
    Share-based compensation   (0.45 )     (0.44 )     (0.40 )
    Other incidentals   (0.02 )     (0.06 )     (0.10 )
    Other adjustments:          
    Adjustments to financial income (expense)   (0.05 )     (0.03 )     (0.03 )
    Income tax effect   0.04       0.06       0.17  
    Results relating to equity-accounted investees, excluding Foundry investees1   (0.02 )     (0.01 )     (0.01 )
    Non-GAAP net income (loss) per common share attributable to stockholders – diluted $ 3.45     $ 3.20     $ 3.70  
               
               
    Additional Information:          
    1. Refer to Table 7 below for further information regarding the results relating to equity-accounted investees.

    NXP Semiconductors
    Table 5: Financial Reconciliation of GAAP to non-GAAP Financial income (expense) (unaudited)

    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    GAAP Financial income (expense) $ (82 )   $ (75 )   $ (75 )
    Foreign exchange loss   (3 )     (2 )     (3 )
    Other financial expense   (9 )     (6 )     (7 )
    Non-GAAP Financial income (expense) $ (70 )   $ (67 )   $ (65 )
               

    NXP Semiconductors
    Table 6: Financial Reconciliation of GAAP to non-GAAP Other income (expense) (unaudited)

    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    GAAP Other income (expense) $ (5 )   $ (4 )   $ (7 )
    Other incidentals   (4 )     (2 )     (3 )
    Non-GAAP Other income (expense) $ (1 )   $ (2 )   $ (4 )
               

    NXP Semiconductors
    Table 7: Financial Reconciliation of GAAP to non-GAAP Results relating to equity-accounted investees (unaudited)

    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    GAAP Results relating to equity-accounted investees $ (6 )   $ (3 )   $ (2 )
    Results of equity-accounted investees, excluding Foundry investees1   (6 )     (3 )     (2 )
    Non-GAAP Results relating to equity-accounted investees $ —     $ —     $ —  
               
    Additional Information:
    1. We adjust our results relating to equity-accounted investees for those results from investments over which NXP has significant influence, but not control, and whose business activities are not related to the core operating performance of NXP. Our equity-investments in foundry partners are part of our long-term core operating performance and accordingly those results comprise the Non-GAAP Results relating to equity-accounted investees.

    NXP Semiconductors
    Table 8: Adjusted EBITDA and Free Cash Flow (unaudited)

    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    GAAP Net income (loss) $ 729     $ 664     $ 792  
    Reconciling items to EBITDA (Non-GAAP)          
    Financial (income) expense   82       75       75  
    (Benefit) provision for income taxes   173       154       123  
    Depreciation   149       146       163  
    Amortization   69       67       110  
    EBITDA (Non-GAAP) $ 1,202     $ 1,106     $ 1,263  
    Reconciling items to adjusted EBITDA (Non-GAAP)          
    Results of equity-accounted investees, excluding Foundry investees1   6       3       2  
    Restructuring   —       6       (4 )
    Share-based compensation   115       114       103  
    Other incidental items   6       14       27  
    Adjusted EBITDA (Non-GAAP) $ 1,329     $ 1,243     $ 1,391  
    Trailing twelve month adjusted EBITDA (Non-GAAP)   5,235       5,297       5,384  
               
               
    Additional Information:          
    1. Refer to Table 7 above for further information regarding the results relating to equity-accounted investees.
               
               
    ($ in millions) Three months ended
      September 29, 2024   June 30, 2024   October 1, 2023
    Net cash provided by (used for) operating activities $ 779     $ 761     $ 988  
    Net capital expenditures on property, plant and equipment   (186 )     (184 )     (200 )
    Non-GAAP free cash flow $ 593     $ 577     $ 788  
    Trailing twelve month non-GAAP free cash flow $ 2,759     $ 2,954     $ 2,568  
    Trailing twelve month non-GAAP free cash flow as percent of Revenue   21 %     23 %     20 %
               

    The MIL Network –

  • MIL-OSI: Greenlight Re Announces Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    GRAND CAYMAN, Cayman Islands, Nov. 04, 2024 (GLOBE NEWSWIRE) — Greenlight Capital Re, Ltd. (NASDAQ: GLRE) (“Greenlight Re” or the “Company”) today reported its financial results for the third quarter ended September 30, 2024.

    Third Quarter 2024 Highlights (all comparisons are to third quarter 2023 unless noted otherwise):

    • Gross premiums written of $168.3 million compared to $183.1 million;
    • Net premiums earned of $151.9 million, compared to $163.1 million;
    • Net underwriting income of $6.1 million, compared to $14.4 million;
    • Total investment income of $28.1 million, compared to $5.1 million;
    • Net income of $35.2 million, or $1.01 per diluted ordinary share, compared to $13.5 million, or $0.39 per diluted ordinary share;
    • Combined ratio of 95.9%, compared to 91.2%; and
    • Fully diluted book value per share increased $1.07, or 6.1%, to $18.72, from $17.65 at June 30, 2024.

    Greg Richardson, Chief Executive Officer of Greenlight Re, stated, “Our third quarter results demonstrated Greenlight Re’s disciplined and resilient underwriting approach, achieving profitable performance for the eighth consecutive quarter. Alongside strong investment returns, Greenlight Re recorded a notably strong quarter.”

    David Einhorn, Chairman of the Board of Directors, said, “Solasglas generated a net return of 5.2% in the third quarter, while maintaining a conservative exposure to equity markets. Despite significant natural catastrophe events during the quarter, Greenlight Re performed well, with positive performance on both our underwriting and investment activities.”

    Third Quarter 2024 Results

    Gross premiums written in the third quarter of 2024 were $168.3 million, compared to $183.1 million in the third quarter of 2023. The $14.7 million decrease, or 8.0%, was primarily due to a personal property contract and a Lloyd’s casualty contract that the Company non-renewed during 2024, and was partially offset by growth in the specialty business. Similarly, earned premiums decreased by $11.2 million, or 6.9%, to $151.9 million.

    The Company recognized net underwriting income of $6.1 million in the third quarter of 2024, compared to net underwriting income of $14.4 million during the equivalent period in 2023. The combined ratio for the third quarter of 2024 was 95.9%, compared to 91.2% for the equivalent period in 2023. Catastrophe losses, including Hurricane Helene, Central European floods and US severe convective storms, added 9.3% to the combined ratio during the third quarter of 2024.

    The Company’s total investment income during the third quarter of 2024 was $28.1 million. The Company’s investment in the Solasglas fund, managed by DME Advisors, returned 5.2%, representing net income of $19.8 million. The Company reported $8.2 million of other investment income, primarily from interest earned on its restricted cash and cash equivalents.

    The net income of $35.2 million contributed to the 6.1% increase in fully diluted book value per share for the quarter, which increased to $18.72 per share at September 30, 2024 from $17.65 at June 30, 2024.

    During the third quarter of 2024, the Company repurchased 547,402 ordinary shares for $7.5 million under its share repurchase plan.

    The following table summarizes the components of the Company’s combined ratio.

        Third Quarter
    Underwriting ratios   2024     2023  
    Loss ratio – current year   65.0 %   61.4 %
    Loss ratio – prior year   (3.7)%   (2.0)%
    Loss ratio   61.3 %   59.4 %
    Acquisition cost ratio   30.4 %   28.8 %
    Composite ratio   91.7 %   88.2 %
    Underwriting expense ratio   4.2 %   3.0 %
    Combined ratio   95.9 %   91.2 %

    Greenlight Capital Re, Ltd. Third Quarter 2024 Earnings Call

    Greenlight Re will host a live conference call to discuss its financial results on Tuesday, November 5, 2024, at 9:00 a.m. Eastern Time. Dial-in details: 

    U.S. toll free  1-877-407-9753
    International  1-201-493-6739

    The conference call can also be accessed via webcast at:

    https://event.webcasts.com/starthere.jsp?ei=1692074&tp_key=a944f284f8

    A telephone replay will be available following the call through November 11, 2024.  The replay of the call may be accessed by dialing 1-877-660-6853 (U.S. toll free) or 1-201-612-7415 (international), access code 13749374. An audio file of the call will also be available on the Company’s website, www.greenlightre.com.

    2024 Investor Day

    As previously announced, the Company will host its 2024 Investor Day in New York City on Tuesday, November 19, 2024, at 12:00 noon Eastern Time. The event will include a luncheon, detailed presentation from members of the executive management team, and opportunities for live interaction during the Q&A segment.

    Attendees must register in advance. To register, please contact Karin Daly, Greenlight Capital Re’s investor relations representative at IR@greenlightre.ky.

    The 2024 Investor Day will be held exclusively in-person. An archived webcast will become available on the Company’s website following the event.

    Non-GAAP Financial Measures
    In presenting the Company’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including fully diluted book value per share and net underwriting income (loss), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more thorough understanding of the underlying business. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be used to monitor our results and should be considered in addition to, and not viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.

    Forward-Looking Statements
    This news release contains forward-looking statements concerning Greenlight Capital Re, Ltd. and/or its subsidiaries (the “Company”) within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on the Company’s behalf. These risks and uncertainties include a downgrade or withdrawal of our A.M. Best ratings; any suspension or revocation of any of our licenses; losses from catastrophes; the loss of significant brokers; the performance of Solasglas Investments, LP; the carry values of our investments made under our Greenlight Re Innovations pillar may differ significantly from those that would be used if we carried these investments at fair value; and other factors described in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 5, 2024, as those factors may be updated from time to time in our periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, which speak only as to the date of this release, whether as a result of new information, future events, or otherwise, except as provided by law.

    About Greenlight Capital Re, Ltd.
    Greenlight Re (www.greenlightre.com) provides multiline property and casualty insurance and reinsurance through its licensed and regulated reinsurance entities in the Cayman Islands and Ireland, and its Lloyd’s platform, Greenlight Innovation Syndicate 3456. The Company complements its underwriting activities with a non-traditional investment approach designed to achieve higher rates of return over the long term than reinsurance companies that exclusively employ more traditional investment strategies. The Company’s innovations unit, Greenlight Re Innovations, supports technology innovators in the (re)insurance space by providing investment capital, risk capacity, and access to a broad insurance network.

    Investor Relations Contact
    Karin Daly
    Vice President, The Equity Group Inc.
    (212) 836-9623
    IR@greenlightre.ky

    GREENLIGHT CAPITAL RE, LTD.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (expressed in thousands of U.S. dollars, except per share and share amounts)
      September 30, 2024   December 31, 2023
      (UNAUDITED)    
    Assets      
    Investments      
    Investment in related party investment fund, at fair value $ 397,888   $ 258,890
    Other investments   73,559     73,293
    Total investments   471,447     332,183
    Cash and cash equivalents   54,642     51,082
    Restricted cash and cash equivalents   567,091     604,648
    Reinsurance balances receivable (net of allowance for expected credit losses)   718,719     619,401
    Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses)   65,947     25,687
    Deferred acquisition costs   82,206     79,956
    Unearned premiums ceded   35,270     17,261
    Other assets   6,364     5,089
    Total assets $ 2,001,686   $ 1,735,307
    Liabilities and equity      
    Liabilities      
    Loss and loss adjustment expense reserves $ 811,152   $ 661,554
    Unearned premium reserves   347,103     306,310
    Reinsurance balances payable   88,152     68,983
    Funds withheld   20,788     17,289
    Other liabilities   8,491     11,795
    Debt   62,582     73,281
    Total liabilities   1,338,268     1,139,212
    Shareholders’ equity      
    Ordinary share capital (par value $0.10; issued and outstanding, 34,832,493) (2023: par value $0.10; issued and outstanding, 35,336,732) $ 3,483   $ 3,534
    Additional paid-in capital   481,672     484,532
    Retained earnings   178,263     108,029
    Total shareholders’ equity   663,418     596,095
    Total liabilities and equity $ 2,001,686   $ 1,735,307
    GREENLIGHT CAPITAL RE, LTD.
    CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
    (UNAUDITED) 
    (expressed in thousands of U.S. dollars, except percentages and per share amounts)
      Three months ended September 30   Nine months ended September 30
        2024       2023       2024       2023  
    Underwriting revenue              
    Gross premiums written $ 168,346     $ 183,074     $ 554,579     $ 524,472  
    Gross premiums ceded   (26,598 )     (14,789 )     (64,611 )     (35,740 )
    Net premiums written   141,748       168,285       489,968       488,732  
    Change in net unearned premium reserves   10,136       (5,175 )     (18,150 )     (43,030 )
    Net premiums earned $ 151,884     $ 163,110     $ 471,818     $ 445,702  
    Underwriting related expenses              
    Net loss and loss adjustment expenses incurred:              
    Current year $ 98,820     $ 100,143     $ 305,467     $ 273,570  
    Prior year   (5,654 )     (3,300 )     (943 )     10,502  
    Net loss and loss adjustment expenses incurred   93,165       96,843       304,524       284,072  
    Acquisition costs   46,162       46,933       138,226       126,702  
    Underwriting expenses   6,073       4,639       18,223       14,046  
    Deposit interest expense (income), net   377       278       1,020       645  
    Net underwriting income (1) $ 6,107     $ 14,417     $ 9,825     $ 20,237  
                   
    Income (loss) from investment in Solasglas $ 19,844     $ (1,853 )   $ 42,422     $ 27,791  
    Net investment income   8,244       6,958       24,611       24,705  
    Total investment income $ 28,088     $ 5,105     $ 67,033     $ 52,496  
                   
    Corporate expenses $ 4,253     $ 3,266     $ 13,334     $ 13,820  
    Foreign exchange losses (gains)   (5,826 )     1,999       (3,245 )     (7,661 )
    Other income, net   (2,210 )     (706 )     (9,969 )     (5,738 )
    Interest expense   2,018       1,457       4,827       2,977  
    Income tax expense   723       29       1,677       111  
    Net income $ 35,237     $ 13,477     $ 70,234     $ 69,224  
                   
    Earnings per share              
    Basic $ 1.03     $ 0.40     $ 2.05     $ 2.03  
    Diluted $ 1.01     $ 0.39     $ 2.02     $ 1.99  
                   
    Underwriting ratios:              
    Loss ratio – current year   65.0 %     61.4 %     64.7 %     61.4 %
    Loss ratio – prior year (3.7)%   (2.0)%   (0.2)%     2.4 %
    Loss ratio   61.3 %     59.4 %     64.5 %     63.8 %
    Acquisition cost ratio   30.4 %     28.8 %     29.3 %     28.4 %
    Composite ratio   91.7 %     88.2 %     93.8 %     92.2 %
    Underwriting expense ratio   4.2 %     3.0 %     4.1 %     3.3 %
    Combined ratio   95.9 %     91.2 %     97.9 %     95.5 %

    1 Net underwriting income is a non-GAAP financial measure. See “ Key Financial Measures and Non-GAAP Measures” below for discussion and reconciliation of non-GAAP financial measures.

    The following tables present the Company’s net premiums earned and underwriting ratios by line of business: 

      Three months ended September 30   Three months ended September 30
      2024     2023  
      Property   Casualty   Other   Total   Property   Casualty   Other   Total
      ($ in thousands except percentage)
    Net premiums earned $19,134     $83,079     $49,671     $151,884     $24,362     $93,514     $45,234     $163,110  
    Underwriting ratios:                              
    Loss ratio 112.4 %   52.7 %   56.1 %   61.3 %   54.1 %   67.4 %   45.6 %   59.4 %
    Acquisition cost ratio 19.9     34.0     28.4     30.4     17.7     31.9     28.2     28.8  
    Composite ratio 132.3 %   86.7 %   84.5 %   91.7 %   71.8 %   99.3 %   73.8 %   88.2 %
    Underwriting expense ratio             4.2                 3.0  
    Combined ratio             95.9 %               91.2 %
      Nine months ended September 30   Nine months ended September 30
      2024     2023  
      Property   Casualty   Other   Total   Property   Casualty   Other   Total
      ($ in thousands except percentage)
    Net premiums earned $60,610     $263,872     $147,336     $471,818     $63,854     $259,075     $122,773     $445,702  
    Underwriting ratios:                              
    Loss ratio 90.1 %   61.5 %     59.4 %   64.5 %   81.6 %   67.0 %   47.5 %   63.8 %
    Acquisition cost ratio 17.1     32.6       28.3     29.3     18.5     31.0     28.2     28.4  
    Composite ratio 107.2 %   94.1 %     87.7 %   93.8 %   100.1 %   98.0 %   75.7 %   92.2 %
    Underwriting expense ratio             4.1                 3.3  
    Combined ratio             97.9 %               95.5 %


    GREENLIGHT CAPITAL RE, LTD.
    KEY FINANCIAL MEASURES AND NON-GAAP MEASURES

    Management uses certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”), to evaluate our financial performance, financial position, and the change in shareholder value. Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP.

    The key non-GAAP financial measures used in this news release are:

    • Fully diluted book value per share; and
    • Net underwriting income (loss).

    These non-GAAP financial measures are described below.

    Fully Diluted Book Value Per Share

    Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value as a financial measure in our incentive compensation plan.

    We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Fully diluted book value per share should not be viewed as a substitute for the most comparable U.S. GAAP measure, which in our view is the basic book value per share.

    We calculate basic book value per share as (a) ending shareholders’ equity, divided by (b) the total ordinary shares issued and outstanding, as reported in the consolidated financial statements. Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options (assuming net exercise) and all outstanding restricted stock units “RSUs”. We believe these adjustments better reflect the ultimate dilution to our shareholders.

    The following table presents a reconciliation of the fully diluted book value per share to basic book value per share (the most directly comparable U.S. GAAP financial measure):

      September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023
    Numerator for basic and fully diluted book value per share:                  
    Total equity as reported under U.S. GAAP $  663,418   $   634,020   $ 624,458   $ 596,095   $ 575,865
    Denominator for basic and fully diluted book value per share:                  
    Ordinary shares issued and outstanding as reported and denominator for basic book value per share   34,832,493     35,321,144     35,321,144     35,336,732     35,337,407
    Add: In-the-money stock options (1) and all outstanding RSUs   602,013     594,612     585,334     264,870     312,409
    Denominator for fully diluted book value per share   35,434,506     35,915,756     35,906,478     35,601,602     35,649,816
                       
    Basic book value per share $ 19.05   $ 17.95   $ 17.68   $ 16.87   $ 16.30
    Fully diluted book value per share $ 18.72   $ 17.65   $ 17.39   $ 16.74   $ 16.15

    (1) Assuming net exercise by the grantee.

    Net Underwriting Income (Loss)

    One way that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.

    Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. We calculate net underwriting income (loss) as net premiums earned less net loss and loss adjustment expenses, acquisition costs, underwriting expenses (including related G&A expenses), and deposit interest expense, plus deposit interest income. The measure excludes, on a recurring basis: (1) investment income (loss); (2) other income (expense) not related to underwriting, including foreign exchange gains or losses, and Lloyd’s interest income and expense; (3) corporate G&A expenses; and (4) interest expense. We exclude total investment income or loss, foreign exchange gains or losses, and Lloyd’s interest income or expense as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. Additionally, we exclude corporate G&A and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes.

    The reconciliations of net underwriting income to income before income taxes (the most directly comparable U.S. GAAP financial measure) on a consolidated basis are shown below:

      Three months ended September 30   Nine months ended September 30
        2024       2023       2024       2023  
      ($ in thousands)
    Income before income tax $ 35,960     $  13,506     $ 71,911     $ 69,335  
    Add (subtract):              
    Total investment income   (28,088 )     (5,105 )     (67,033 )     (52,496 )
    Foreign exchange losses (gains)   (5,826 )     1,999       (3,245 )     (7,661 )
    Other non-underwriting income   (2,210 )     (706 )     (9,969 )     (5,738 )
    Corporate expenses   4,253       3,266       13,334       13,820  
    Interest expense   2,018       1,457       4,827       2,977  
    Net underwriting income $ 6,107     $ 14,417     $ 9,825     $ 20,237  

    The MIL Network –

  • MIL-OSI: First Pacific Bancorp Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    WHITTIER, Calif., Nov. 04, 2024 (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 third quarter ending September 30, 2024, underscored by the sixth consecutive quarter of profitability.

    Highlights for the third quarter of 2024 include:

    • Total assets ended Q3 2024 at $434 million, up $14 million from $420 million at year end 2023.
    • Total deposits ended the third quarter of 2024 at $342 million, up $9 million since year end 2023.
    • Total loans ended the third quarter of 2024 at $268 million, down $7 million from year end 2023.
    • Asset quality remains excellent with minimal levels of classified or non-performing assets.
    • The Bank ended the third quarter with a strong capital position, with a leverage capital ratio of 8.8% and a total risk-based capital ratio of 12.8%.
    • As of September 30, 2024, cash and cash equivalents totaled $49 million, including funds invested overnight, up $27 million since year end 2023.
    • Unused borrowing capacity from credit facilities in place on September 30, 2024, totaled $143 million.

    For the third quarter ending September 30, 2024, the Company realized a pre-tax, pre-provision profit of $345 thousand, compared to a pre-tax, pre-provision profit of $272 thousand in Q2 2024. Net income for the third quarter of 2024 was $249 thousand, up from $198 thousand in Q2 2024. For the nine months ending September 30, 2024, the Company reported $608 thousand in net income, up from a net loss of $219 thousand reported for the nine months ending September 30, 2023.     

    Asset quality remains excellent with minimal non-performing assets and the allowance for credit losses is 1.16% of total loans.  

    “We are encouraged by our results, as evidenced by six consecutive quarters of profitability,” said Joe Matranga, Chairman of the Board of Directors. “We continue to maintain a solid capital, liquidity, and financial standing and are well-positioned to execute our strategy and deliver sustainable, long-term value for our stakeholders.”

    “Our third-quarter results reflect a strong and consistent period of profitability, driven by increased core deposit growth, stable credit quality, and a disciplined approach to expense management,” said Nathan Rogge, President and Chief Executive Officer. “We are pleased with our performance and continue to look for opportunities to expand our customer base through strategic investments in technology and innovation that aim to enhance the customer experience.”

    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.  

    Contacts

    — Summary Financial Tables Follow —

    First Pacific Bancorp          
    Consolidated Balance Sheets          
    (Unaudited)          
      Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023
    ASSETS          
    Cash and due from banks $ 23,584,084   $ 4,671,483   $ 7,317,500   $ 4,308,149   $ 4,240,871  
    Fed funds sold & int-bearing balances   25,520,000     37,860,000     37,575,000     18,060,000     20,410,000  
    Total cash and cash equivalents   49,104,084     42,531,483     44,892,500     22,368,149     24,650,871  
               
    Debt securities (AFS)   3,041,852     3,077,666     5,138,340     5,257,049     5,266,653  
    Debt securities (HTM)   101,260,391     102,202,926     103,474,749     104,343,133     105,447,814  
    Total debt securities   104,302,243     105,280,592     108,613,089     109,600,182     110,714,467  
               
    Construction & land development   23,067,204     24,651,513     25,480,398     27,070,749     24,721,763  
    1-4 Family residential   58,082,570     68,588,393     68,521,663     66,567,165     64,925,441  
    Multifamily residential   28,966,811     26,800,829     26,947,419     27,128,177     28,484,194  
    Nonfarm, nonresidential real estate   99,715,860     94,643,169     97,893,840     99,627,812     99,859,450  
    Commercial & industrial   57,342,017     53,504,969     54,785,564     53,938,659     55,374,111  
    Consumer & Other   780,639     1,831,036     1,123,918     865,849     569,736  
    Total loans   267,955,101     270,019,909     274,752,802     275,198,411     273,934,695  
    Allowance for loan losses   (3,109,975 )   (3,109,975 )   (3,109,975 )   (3,109,975 )   (2,974,427 )
    Total loans, net   264,845,126     266,909,934     271,642,827     272,088,436     270,960,268  
               
    Premises, equipment, and ROU net   1,452,886     1,714,833     1,992,588     2,268,671     1,850,187  
    Goodwill, core deposit & other intangibles   1,287,129     1,298,084     1,313,367     1,328,651     1,343,934  
    Bank owned life insurance   5,257,550     5,227,763     5,198,654     5,170,521     5,142,322  
    Accrued interest and other assets   7,505,380     7,476,554     7,415,609     7,392,301     7,616,948  
               
    Total Assets $ 433,754,398   $ 430,439,243   $ 441,068,634   $ 420,216,911   $ 422,278,997  
               
    LIABILITIES AND SHAREHOLDERS’ EQUITY          
    Deposits:          
    Noninterest-bearing demand $ 129,473,091   $ 144,240,187   $ 133,945,262   $ 121,348,095   $ 130,982,957  
    Interest-bearing transaction accounts   24,660,000     24,797,108     28,166,207     34,716,150     47,304,776  
    Money market and savings   143,270,628     143,497,864     148,732,230     139,011,862     131,505,430  
    Time deposits   44,388,137     41,060,590     38,662,227     38,235,413     22,504,646  
    Total deposits   341,791,856     353,595,749     349,505,926     333,311,520     332,297,809  
               
    Borrowings   50,000,000     35,000,000     50,000,000     45,000,000     50,000,000  
    Accrued interest and other liabilities   3,430,132     3,781,444     3,936,909     4,530,208     2,934,831  
    Total liabilities   395,221,988     392,377,193     403,442,835     382,841,728     385,232,640  
               
    Shareholders’ Equity:          
    Capital stock and APIC   37,117,627     36,970,386     36,788,606     36,699,786     36,508,987  
    Retained earnings   2,151,305     1,902,788     1,705,174     1,543,264     1,487,800  
    Accum other comprehensive income   (736,522 )   (811,124 )   (867,981 )   (867,867 )   (950,430 )
    Total shareholders’ equity   38,532,410     38,062,050     37,625,799     37,375,183     37,046,357  
               
    Total Liabilities and Shareholders’ Equity $ 433,754,398   $ 430,439,243   $ 441,068,634   $ 420,216,911   $ 422,278,997  
               
    First Pacific Bancorp          
    Consolidated Income Statements – Quarterly          
    (Unaudited)          
               
      Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023
    INTEREST INCOME          
    Loans, including fees $4,817,174 $4,655,844 $4,700,535 $4,653,303   $4,458,616  
    Debt securities 499,268 514,613 543,857 544,330   585,047  
    Fed funds & int-bearing balances 450,166 573,022 410,685 258,178   271,266  
    Total interest income 5,766,608 5,743,479 5,655,077 5,455,811   5,314,929  
               
    INTEREST EXPENSE          
    Deposits 1,790,578 1,687,121 1,746,032 1,542,541   1,408,092  
    Borrowings 444,250 524,599 507,390 705,324   567,115  
    Total interest expense 2,234,828 2,211,720 2,253,422 2,247,865   1,975,207  
               
    Net interest income 3,531,780 3,531,759 3,401,655 3,207,946   3,339,722  
               
    Provision for credit losses – – – 101,538   191,428  
               
    Net interest income after provision 3,531,780 3,531,759 3,401,655 3,106,408   3,148,294  
               
    NONINTEREST INCOME          
    Service charges, fees and other income 106,628 96,460 108,365 108,769   122,367  
    Sublease income 53,975 52,970 53,872 53,872   53,384  
    Gains (losses) on sale of assets 15,335 – – (12,982 ) 101,844  
    Gains on early payoff of debt – 144,325 – –   123,077  
    Total noninterest income 175,938 293,755 162,237 149,659   400,672  
               
    NONINTEREST EXPENSE          
    Salaries and benefits 2,154,290 2,182,674 2,178,486 1,954,029   2,311,113  
    Occupancy and equipment 374,069 363,695 368,816 384,088   377,795  
    Other expense 834,281 1,007,247 794,158 894,440   823,677  
    Total noninterest expense 3,362,640 3,553,616 3,341,460 3,232,557   3,512,585  
               
    Income before income tax expense 345,078 271,898 222,432 23,510   36,381  
               
    Income tax expense (benefit) 96,563 74,281 60,524 (31,955 ) (15,550 )
               
    Net Income (Loss) $248,515 $197,617 $161,908 $55,465   $51,931  
               
    Earnings per share basic (QTR) $0.06 $0.05 $0.04 $0.01   $0.01  
    Weighted average shares outstanding (QTR) 4,288,851 4,283,351 4,281,653 4,231,841   4,174,529  
               
    First Pacific Bancorp    
    Consolidated Income Statements – Year-to-Date    
    (Unaudited)    
         
      Sep 30, 2024 Sep 30, 2023
    INTEREST INCOME    
    Loans, including fees $14,173,553 $12,051,909  
    Investment securities 1,557,738 1,735,019  
    Fed funds & int-bearing balances 1,433,873 742,649  
    Total interest income 17,165,164 14,529,577  
         
    INTEREST EXPENSE    
    Deposits 5,223,731 3,201,945  
    Borrowings 1,476,239 1,735,403  
    Total interest expense 6,699,970 4,937,348  
         
    Net interest income 10,465,194 9,592,229  
         
    Provision for credit losses – 804,428  
         
    Net interest income after provision 10,465,194 8,787,801  
         
    NONINTEREST INCOME    
    Service charges, fees and other income 311,453 347,054  
    Sublease income 160,817 158,202  
    Gains (losses) on sale of assets 15,335 142,075  
    Gains on early payoff of debt 144,325 123,077  
    Total noninterest income 631,930 770,408  
         
    NON INTEREST EXPENSE    
    Salaries and benefits 6,515,450 6,604,574  
    Occupancy and equipment 1,106,580 1,086,189  
    Other expense 2,635,686 2,230,137  
    Total noninterest expense 10,257,716 9,920,900  
         
    Income before income tax expense 839,408 (362,691 )
         
    Income tax expense (benefit) 231,368 (143,307 )
         
    Net Income (loss) $608,040 ($219,384 )
         
    Earnings (loss) per share basic (YTD) $0.14 ($0.06 )
    Weighted average shares outstanding (YTD) 4,284,634 3,912,161  
    First Pacific Bancorp            
    Quarterly Financial Highlights            
    (Unaudited)            
        Quarterly
        2024 2024 2024 2023 2023
    ($$ in thousands except per share data)   3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
    EARNINGS            
    Net interest income $ 3,532   3,532   3,402   3,208   3,340  
    Provision for loan losses $ 0   0   0   102   191  
    Noninterest income $ 176   294   162   150   401  
    Noninterest expense $ 3,363   3,554   3,341   3,233   3,513  
    Income tax expense $ 97   74   61   (32 ) (16 )
    Net income $ 249   198   162   55   52  
                 
    Basic earnings per share $ 0.06   0.05   0.04   0.01   0.01  
    Weighted average shares outstanding   4,288,851   4,283,351   4,281,653   4,231,841   4,174,529  
    Ending shares outstanding   4,291,927   4,283,351   4,283,351   4,231,841   4,231,841  
                 
    PERFORMANCE RATIOS            
    Return on average assets   0.23 % 0.18 % 0.15 % 0.05 % 0.05 %
    Return on average common equity   2.58 % 2.10 % 1.73 % 0.59 % 0.56 %
    Yield on loans   6.98 % 6.97 % 6.84 % 6.69 % 6.60 %
    Yield on earning assets   5.58 % 5.52 % 5.49 % 5.35 % 5.26 %
    Cost of deposits   2.05 % 1.96 % 2.05 % 1.89 % 1.70 %
    Cost of funding   2.32 % 2.28 % 2.35 % 2.37 % 2.09 %
    Net interest margin   3.42 % 3.40 % 3.31 % 3.15 % 3.30 %
    Efficiency ratio   90.7 % 92.9 % 93.8 % 96.3 % 93.9 %
                 
    CAPITAL            
    Tangible equity to tangible assets   8.61 % 8.57 % 8.26 % 8.61 % 8.48 %
    Book value (BV) per common share $ 8.98   8.89   8.78   8.83   8.75  
    Tangible BV per common share $ 8.68   8.58   8.48   8.52   8.44  
                 
    ASSET QUALITY            
    Net loan charge-offs (recoveries) $ 0   0   0   0   0  
    Allowance for loan losses (ALLL) $ 3,110   3,110   3,110   3,110   2,974  
    ALLL to total loans   1.16 % 1.15 % 1.13 % 1.13 % 1.09 %
    Nonperforming loans $ 991   77   160   61   0  
                 
    END OF PERIOD BALANCES            
    Total loans $ 267,955   270,020   274,753   275,198   273,935  
    Total assets $ 433,754   430,439   441,069   420,217   422,279  
    Deposits $ 341,792   353,596   349,506   333,312   332,298  
    Loans to deposits   78.4 % 76.4 % 78.6 % 82.6 % 82.4 %
    Shareholders’ equity $ 38,532   38,062   37,626   37,375   37,046  
    Full-time equivalent employees   44   44   46   45   44  
                 
    AVERAGE BALANCES (QTRLY)            
    Total loans $ 273,960   267,766   275,578   276,016   268,186  
    Earning assets $ 410,298   416,965   412,791   404,210   400,993  
    Total assets $ 424,199   430,830   426,592   417,595   414,457  
    Deposits $ 346,142   346,032   341,226   323,300   329,121  
    Shareholders’ equity $ 38,267   37,788   37,443   37,179   36,469  

    The MIL Network –

  • MIL-OSI: Aktsiaselts Infortar Unaudited Consolidated Interim Report for third quarter of 2024

    Source: GlobeNewswire (MIL-OSI)

    Aktsiaselts Infortar (Infortar) will organize a webinar for introducing third quarter 2024 results today. Please join the webinar via the following links:

    4. November at 12.00 (EET) Estonian webinar

    4. November at 14.00 (EET) English webinar

    Following the acquisition of a majority stake in Aktsiaselts Tallink Grupp (Tallink), Infortar’s total assets have reached €2.5 billion. For the first nine months of this year, the company’s consolidated revenue amounted to €926 million, net profit reached €187 million, and investments totaled €138 million.

    “We’ve grown into Estonia’s largest investment company in the third quarter—our consolidated asset volume has increased by €1 billion within just nine months. Infortar’s structure and outlook have transformed significantly over a short period; we’re literally fuelled by growth,” remarked Ain Hanschmidt, Chairman of Infortar’s Management Board.

    “Infortar actively seeks and invests in growth across various sectors and beyond borders. When we went public last year, we committed to invest €110 million from 2023 to 2025, yet we have already invested €138 million in the current year alone,” said Hanschmidt.

    In the third quarter of 2024, Infortar increased its shareholding in Tallink to 68.5% through a public share offering. Alongside with other investors, Infortar envisions a strong and stable future for Tallink. The voluntary takeover offer attracted those who wished to exit the region for various reasons.

    In the third quarter of 2024, Tallink transported a total of 1,715,496 passengers, with the company’s ships completing 1,840 departures. Compared to the same period last year, Tallink´s unaudited sales revenue decreased by 3.7%, totalling €231.9 million, with a net profit of €36.8 million.

    AS Eesti Gaas, the largest private energy company in the Finnish and Baltic region, increased its sales volume of natural gas and electricity by 27% year-on-year, reaching 13.9 TWh and a market share of 25.7%. Operating under the Elenger brand in foreign markets, the company is focused on expanding its energy business in Poland and Germany and establishing access to the wholesale gas market in the Netherlands and Belgium.

    The construction of Rimi’s logistics centre and the new Pärnu bridge are going according to the schedule. In July, the bridge arch was installed, introducing new engineering solutions to Estonia.

    At the end of the third quarter, Infortar announced plans to acquire Tallinna Raamatutrükikoda, in addition to the printing houses Printon and Vaba Maa. This acquisition aims to enhance synergies and bolster the company’s extensive experience in the printing sector.

    KEY FIGURES

    		 9 months 2024 9 months 2023 Q3 2024 Q3 2023
    Revenue (in thousands of EUR) 925 607 746 892 349 468 186 540
    Gross profit (in thousands of EUR) 93 758 107 238 40 669 18 887
    EBITDA (in thousands of EUR) 117 384 105 865 41 874 19 294
    EBITDA margin % 12,7% 14,2% 12,0% 10,3%
    Operating profit (in thousands of EUR) 83 817 94 661 20 422 14 234
    Net profit (in thousands of EUR) 187 339 269 624 114 322 185 941
    Profit attributable to the owners of the parent company (in thousands of EUR) 184 122 269 546 111 105 185 658
    Earnings per share (EUR)* 9,1 13,3 5,5 9,2
             
    Total equity (in thousands of EUR) 1 223 058 771 700    
    Total liabilities (in thousands of EUR) 961 419 480 816    

    * For the period ending 30.09.2024, earnings per share (EPS) in euros have been calculated using a share count of 21,166,239, with company´s own shares deducted for comparability.

    Revenue

    During the first nine months of 2024, Infortar’s consolidated revenue increased by €178.7 million, reaching €925.6 million, compared to €746.9 million in the same period in 2023. This growth was significantly impacted by the line-by-line consolidation of Tallink results into Infortar’s financial statements.

    EBITDA and Segment Reporting

    The acquisition of a majority stake in Tallink does not significantly impact segment reporting; Infortar’s management continues to monitor business segments using existing principles.

    Energy Segment: Nine-month EBITDA for 2024 was €79.5 million, down from €99.1 million in 2023.

    Maritime transportation segment: nine-month EBITDA for 2024 was €149,5 million, compared to €177.7 million in 2023. Until 31.07.24, Infortar consolidated Tallink results by the equity method according to its ownership percentage, switching to line-by-line reporting as of 01.08.24.

    Real Estate Segment: EBITDA for real estate in the first nine months of 2024 reached €12 million, up from €11 million in the same period of 2023.

    Net Profit

    Consolidated net profit for the first nine months of 2024 was €187.3 million, compared to €269.6 million for the same period in 2023. The previous year’s results included a one-time profit from the AS Gaso acquisition.

    Financing

    Loan and lease obligations totalled €961.4 million for the first nine months of 2024, up from €480.8 million in 2023 due to the consolidation of Tallink liabilities. The net debt-to-EBITDA ratio, considering Tallink’s full-year EBITDA for 2024, stands at 2.4.

    Income statement, in thousands of EUR Q3
    2024    		 Q3
    2023    		 9 months 2024 9 months 2023
    Sales Revenue 349 468 186 540 925 607 746 892
    Cost of Sales -308 803 -169 764 -831 796 -634 815
    Impairment of Receivables 4 2 111 -53 -4 839
    Gross Profit 40 669 18 887 93 758 107 238
    Marketing Expenses -7 789 -394 -8 627 -1 109
    General Administrative Expenses -13 423 -3 975 -27 679 -12 563
    Profit (Loss) from Biological Assets 44 0 17 0
    Loss on Changes in Fair Value of Investment Properties -3 047 0 -2 891 0
    Profit (Loss) from Derivative Instruments 52 380 24 574 1 067
    Other Operating Income 4 368 308 5 449 1 065
    Other Operating Expenses -452 -972 -784 -1 037
    Operating Profit 20 422 14 234 83 817 94 661
    Profit from Investments Accounted for Using the Equity Method 3 243 22 254 22 128 37 701
    Financial Income and Expenses        
    Income from Financial Investments 69 782 -34 72 520 -58
    Interest Expense -11 340 -5 520 -24 466 -14 004
    Interest Income 1 215 467 4 219 2 300
    Profit (Loss) from Foreign Exchange Rate Changes 160 -23 156 -160
    Other Financial Income and Expenses -393 159 216 -395 159 216
    Total Financial Income and Expenses 59 424 154 106 52 034 147 294
    Profit Before Tax 83 089 190 594 157 979 279 656
    Corporate Income Tax 31 233 -4 653 29 360 -10 032
    Profit (Loss) for the Reporting Period 114 322 185 941 187 339 269 624
    Including:        
    Profit (Loss) Attributable to Owners of the Parent Company 111 105 185 658 184 122 269 546
    Profit (Loss) Attributable to Non-controlling Interests 3 217 283 3 217 78
    Other Comprehensive Income for the Reporting Period     -33 463 -60 195
    Total Comprehensive income for the Reporting Period     153 876 209 429
    Including:        
    Comprehensive Income (Loss) Attributable to Owners of the Parent Company     150 659 209 351
    Comprehensive Income (Loss) Attributable to Non-controlling Interests     3 217 78
    Basic Earnings per Share     9,11 13,20
    Diluted Earnings per Share     8,78 12,80

    * The non-cash revaluations of derivative instruments in comprehensive income do not affect the profitability or cash flow generating ability of AS Eesti Gaas or Infortar’s core business operations.

    Balance sheet, in thousands of EUR

    ASSETS     30.09.24   30.09.23   31.12.2023
    CURRENT ASSETS              
    Cash     95 863   90 456   87 115
    Short-term Financial Investments     1   1   0
    Short-term Derivative Instruments     2 246   21 216   28 728
    Receivables from Realized Derivative Instruments     2 773   1 279   5 958
    Receivables from Customers     115 992   91 071   162 575
    Tax Prepayments     4 161   1 192   925
    Other Receivables and Prepayments     31 098   20 228   20 185
    Prepayments for Inventories     2 885   29 354   3 493
    Inventories     221 174   177 824   146 884
    Biological Assets     420   0   0
    Total Current Assets     476 613   432 621   455 863
    NON-CURRENT ASSETS              
    Investments in Associates     15 756   341 490   346 014
    Long-term Derivative Instruments     1 451   3 485   1 125
    Long-term Loans and Other Receivables     29 668   9 771    
    Investment Properties     67 791   171 046   9 072
    Property, Plant, and Equipment     1 816 338   449 014   176 024
    Intangible Assets     39 276   13 474   446 748
    Right-of-use Assets     47 548   10 421   14 366
    Biological Assets     2 840   0   11 300
                   
    Total non-current assets     2 020 668   998 701   1 004 649
    TOTAL ASSETS     2 497 281   1 431 322   1 460 512
                   
    EQUITY AND LIABILITIES              
    CURRENT LIABILITIES              
    Loan Liabilities     199 247   204 468   184 259
    Lease Liabilities     8 499   956   1 766
    Payables to Suppliers     136 017   60 687   74 751
    Tax Liabilities     35 702   17 341   32 822
    Customer Prepayments     34 741   3 171   3 099
    Realized Derivative Instruments     222   3 395   1 463
    Other Short-term Liabilities     53 351   21 374   10 851
    Short-term Derivative Instruments     11 680   226   3 659
    Total Current Liabilities     479 459   311 618   312 670
    NON-CURRENT LIABILITIES              
    Long-term Provisions     9 208   7 255   8 399
    Deferred Income Tax Liability     2 391   34 920   33 233
    Other Long-term Liabilities     28 612   30 426   30 679
    Long-term Derivative Instruments     880   11   186
    Loan liabilities     713 212   265 805   246 410
    Lease liabilities     40 461   9 587   8 725
    TOTAL NON-CURRENT LIABILITIES     794 764   348 004   327 632
    TOTAL LIABILITIES     1 274 223   659 622   640 302
    EQUITY              
    Share Capital     2 117   1 985   2 105
    Treasury Shares     -95   -95   -95
    Share Premium     32 484   0   29 344
    Statutory Reserve     212   205   205
    Option Reserve     7 647   3 068   3 864
    Hedging Reserve*     20 725   22 084   24 118
    Unrealized Exchange Differences     1 114   32   -39
    Reserve for Post-employment Benefit Obligations     -44   0   -44
    Retained Earnings     728 559   474 015   466 140
    Profit for the Reporting Period     184 122   269 546   293 778
    Equity Attributable to Owners of the Parent Company     976 841   770 840   819 376
                   
    Non-controlling Interests     246 217   860   834
    TOTAL EQUITY     1 223 058   771 700   820 210
    TOTAL EQUITY AND LIABILITIES     2 497 281   1 431 322   1 460 512

    * This represents the change in the accounting hedging position, which affects the comprehensive income result.        

    Cash flow statement, in thousands of EUR 9
    months
    2024    		   9
    months 2023    		   2023
    Cash Flows from Operating Activities          
    Profit for the Reporting Period 187 339   269 624   293 830
    Adjustments          
    Depreciation and Impairment of Fixed Assets 30 676   11 204   15 581
    Change in Value of Investment Properties 2 891   0   4 074
    Profit/Loss from Equity Investments -156 017   -37 701   -39 639
    Change in Value of Derivative Instruments 26 156   59 284   54 122
    Other Financial Income/Expenses -66   -161 433   -161 965
    Accrued Interest Expenses 24 466   14 004   22 573
    Profit/Loss from Disposal of Fixed Assets -301   -76   -91
    Income from Targeted Financing Recognized in Revenue -319   -347   784
    Accrued Income Tax Expense -29 360   10 032   8 610
    Income Tax Paid -1 482   0   -267
    Change in Receivables and Prepayments Related to Operating Activities 79 126   130 325   54 540
    Change in Inventories -22 986   -118 715   -61 914
    Change in Liabilities Related to Operating Activities 35 968   -24 650   -406
    Change in Biological Assets 112   0   0
    Total Cash Flows from Operating Activities 176 203   151 551   189 832
               
    Cash Flows from investing activities          
    Payments for Purchase of Associates 0   -7 728   -10 314
    Payments for Purchase of Subsidiaries -67 810*   -103 410   -103 414
    Dividends paid 20 862   0   0
    Repayments of Loans Granted 2 057   5 966   6 652
    Interest Received 4 019   2 301   2 691
    Payments for Acquisition of Investment Properties -10 566   -10 506   -18 304
    Payments for Acquisition of Property, Plant and other assets -17 042   -13 972   -18 143
    Proceeds from Sale of Investment Properties and Fixed Assets 707   78   -252
    Total cash Flows from investing activities -67 773   -127 271   -141 084
    Cash Flows from Financing Activities          
    Change in Overdraft -30 457   30 546   14 348
    Loans Received 106 303   148 955   287 606
    Repayments of Loans Received -114 706   -150 790   -312 846
    Repayments of Principal Portion of Lease Liabilities -8 674   -1 562   -2 233
    Interest Paid -24 968   -13 100   -22 224
    Dividends Paid -30 332   -7 875   -15 750
    Proceeds from Issuance of Shares 3 152   0   29 464
    Total Cash Flows from Financing Activities -99 682   6 174   -21 635
               
    Total cash flows 8 748   30 454   27 113
               
    Cash and Cash Equivalents at Beginning of Period 87 115   60 002   60 002
    Cash and Cash Equivalents at End of Period 95 863   90 456   87 115
    Change in Cash and Cash Equivalents 8 748   30 454   27 113

    Aktsiaselts Infortar operates in seven countries, the company’s main fields of activity are maritime transport, energy and real estate. Aktsiaselts Infortar owns a 68.47% stake in Aktsiaselts Tallink Grupp, a 100% stake in AS Eesti Gaas and a versatile and modern real estate portfolio of approx. 116,000 m2. In addition to the three main areas of activity, Aktsiaselts Infortar also operates in construction and mineral resources, agriculture, printing, taxi business and other areas. A total of 105 companies belong to the Aktsiaselts Infortar group: 96 subsidiaries, 4 affiliated companies and 5 subsidiaries of affiliated companies. Excluding affiliates, Aktsiaselts Infortar employs 6,108 people.

    Additional information:
    Kadri Laanvee
    Investor Relations Manager
    Phone: +372 5156662
    e-mail: kadri.laanvee@infortar.ee
    www.infortar.ee/en/investor

    Attachments

    The MIL Network –

  • MIL-OSI: AMG Reports Financial and Operating Results for the Third Quarter and Nine Months Ended September 30, 2024

    Source: GlobeNewswire (MIL-OSI)

    Company reports EPS of $3.78, Economic EPS of $4.82 in the third quarter of 2024

    • Net income (controlling interest) of $124 million, Economic Net Income (controlling interest) of $153 million
    • Economic Earnings per share of $4.82 for the quarter, increased 18% year-over-year
    • Repurchased $103 million in common stock, bringing year-to-date share repurchases to $580 million

    WEST PALM BEACH, Fla., Nov. 04, 2024 (GLOBE NEWSWIRE) — AMG, a strategic partner to leading independent investment management firms globally, today reported its financial and operating results for the third quarter and nine months ended September 30, 2024.

    Jay C. Horgen, President and Chief Executive Officer of AMG, said:
    “AMG delivered strong results in the third quarter, including year-over-year growth of 18% in Economic Earnings per share, reflecting the ongoing momentum in our business and the positive impact of our disciplined capital allocation strategy.

    “Our growth strategy continues to drive the evolution of our business mix toward secular growth areas, with alternative strategies meaningfully, and increasingly, contributing to AMG’s earnings. AMG’s dedicated private markets Affiliates raised approximately $7 billion in the quarter, reflecting the strength of the ongoing demand for our Affiliates’ specialized strategies. During the quarter, we continued to invest AMG’s capital and resources in and alongside our Affiliates to enhance their growth – including by collaborating to develop additional innovative alternative solutions, across both private markets and liquid alternatives, for the U.S. wealth marketplace. AMG’s proven ability to magnify the competitive advantages of partner-owned firms, while also preserving their independence, continues to differentiate AMG’s partnership model and is highly valued by prospective Affiliates. As we form partnerships with additional new Affiliates in areas of secular demand and continue to invest in existing Affiliates, including by leveraging our capital formation capabilities, we expect to accelerate the evolution of AMG’s business profile toward alternatives and enhance our long-term growth prospects.

    “Our excellent capital position was further strengthened through the issuance of $400 million in senior notes in the quarter, extending the average duration of our debt to more than 20 years. Given our unique partnership model, proven strategic capabilities, and ample financial flexibility, we see increasing opportunities to invest for growth in both new and existing Affiliates, and create meaningful additional shareholder value over time.”

    FINANCIAL HIGHLIGHTS Three Months Ended   Nine Months Ended
    (in millions, except as noted and per share data) 9/30/2023   9/30/2024   9/30/2023   9/30/2024
    Operating Performance Measures              
    AUM (at period end, in billions) $ 635.8     $ 728.4     $ 635.8     $ 728.4  
    Average AUM (in billions)   663.8       711.7       664.4       694.9  
    Net client cash flows (in billions)   (9.4 )     (2.8 )     (23.1 )     (5.6 )
    Aggregate fees   997.5       1,157.1       3,505.7       3,726.8  
    Financial Performance Measures              
    Net income (controlling interest) $ 217.0     $ 123.6     $ 476.8     $ 349.5  
    Earnings per share (diluted)(1)   5.48       3.78       12.28       10.25  
    Supplemental Performance Measures(2)              
    Adjusted EBITDA (controlling interest) $ 208.4     $ 214.1     $ 639.6     $ 691.4  
    Economic net income (controlling interest)   149.5       153.2       474.9       495.8  
    Economic earnings per share   4.08       4.82       12.72       14.90  
                                   

    For additional information on our Supplemental Performance Measures, including reconciliations to GAAP, see the Financial Tables and Notes.

    Capital Management
    During the third quarter of 2024, the Company repurchased approximately $103 million in common stock, bringing total year-to-date repurchases to approximately $580 million. The Company also announced a third-quarter cash dividend of $0.01 per share of common stock, payable November 29, 2024 to stockholders of record as of the close of business on November 14, 2024.

    About AMG
    AMG (NYSE: AMG) is a strategic partner to leading independent investment management firms globally. AMG’s strategy is to generate long‐term value by investing in a diverse array of high-quality independent partner-owned firms, through a proven partnership approach, and allocating resources across AMG’s unique opportunity set to the areas of highest growth and return. Through its distinctive approach, AMG magnifies its Affiliates’ existing advantages and actively supports their independence and ownership culture. As of September 30, 2024, AMG’s aggregate assets under management were approximately $728 billion across a diverse range of private markets, liquid alternative, and differentiated long-only investment strategies. For more information, please visit the Company’s website at www.amg.com.

             

    Conference Call, Replay, and Presentation Information
    A conference call will be held with AMG’s management at 8:30 a.m. Eastern time today. Parties interested in listening to the conference call should dial 1-877-407-8291 (U.S. calls) or 1-201-689-8345 (non-U.S. calls) shortly before the call begins.

    The conference call will also be available for replay beginning approximately one hour after the conclusion of the call. To hear a replay of the call, please dial 1-877-660-6853 (U.S. calls) or 1-201-612-7415 (non-U.S. calls) and provide conference ID 13749048. The live call and replay of the session and a presentation highlighting the Company’s performance can also be accessed via AMG’s website at https://ir.amg.com/.

    Financial Tables Follow

    ASSETS UNDER MANAGEMENT – STATEMENTS OF CHANGES (in billions)
               
    BY STRATEGY – QUARTER TO DATE Alternatives Global Equities U.S. Equities Multi-Asset &
    Fixed Income    		 Total
    AUM, June 30, 2024 $ 256.6   $ 186.4   $ 146.6   $ 111.4   $ 701.0  
    Client cash inflows and commitments   14.3     3.9     4.7     4.4     27.3  
    Client cash outflows   (6.9 )   (10.2 )   (8.4 )   (4.6 )   (30.1 )
    Net client cash flows   7.4     (6.3 )   (3.7 )   (0.2 )   (2.8 )
    New investments*   —     —     —     0.7     0.7  
    Market changes   1.1     11.2     8.3     3.6     24.2  
    Foreign exchange   2.8     3.0     0.4     0.5     6.7  
    Realizations and distributions (net)   (1.3 )   (0.0 )   (0.0 )   (0.1 )   (1.4 )
    Other   (0.1 )   0.0     0.0     0.1     —  
    AUM, September 30, 2024 $ 266.5   $ 194.3   $ 151.6   $ 116.0   $ 728.4  
               
    BY STRATEGY – YEAR TO DATE Alternatives Global Equities U.S. Equities Multi-Asset &
    Fixed Income    		 Total
    AUM, December 31, 2023 $ 238.8   $ 186.6   $ 142.8   $ 104.5   $ 672.7  
    Client cash inflows and commitments   36.7     13.6     14.3     16.8     81.4  
    Client cash outflows   (18.4 )   (28.4 )   (25.9 )   (14.3 )   (87.0 )
    Net client cash flows   18.3     (14.8 )   (11.6 )   2.5     (5.6 )
    New investments   0.7     —     —     0.7     1.4  
    Market changes   7.7     23.8     20.1     8.3     59.9  
    Foreign exchange   2.4     1.8     (0.1 )   0.2     4.3  
    Realizations and distributions (net)   (3.9 )   (0.1 )   (0.1 )   (0.2 )   (4.3 )
    Other   2.5     (3.0 )   0.5     0.0     0.0  
    AUM, September 30, 2024 $ 266.5   $ 194.3   $ 151.6   $ 116.0   $ 728.4  
             
    BY CLIENT TYPE – QUARTER TO DATE Institutional Retail High Net
    Worth    		 Total
    AUM, June 30, 2024 $ 369.7   $ 201.4   $ 129.9   $ 701.0  
    Client cash inflows and commitments   11.7     8.5     7.1     27.3  
    Client cash outflows   (11.7 )   (13.2 )   (5.2 )   (30.1 )
    Net client cash flows   (0.0 )   (4.7 )   1.9     (2.8 )
    New investments*   —     —     0.7     0.7  
    Market changes   9.2     9.4     5.6     24.2  
    Foreign exchange   3.6     2.9     0.2     6.7  
    Realizations and distributions (net)   (1.3 )   (0.1 )   (0.0 )   (1.4 )
    Other   (6.1 )   (0.4 )   6.5     —  
    AUM, September 30, 2024 $ 375.1   $ 208.5   $ 144.8   $ 728.4  
             
    BY CLIENT TYPE – YEAR TO DATE Institutional Retail High Net
    Worth    		 Total
    AUM, December 31, 2023 $ 354.9   $ 196.0   $ 121.8   $ 672.7  
    Client cash inflows and commitments   36.8     26.3     18.3     81.4  
    Client cash outflows   (31.7 )   (39.1 )   (16.2 )   (87.0 )
    Net client cash flows   5.1     (12.8 )   2.1     (5.6 )
    New investments   0.5     —     0.9     1.4  
    Market changes   26.0     23.1     10.8     59.9  
    Foreign exchange   2.0     2.4     (0.1 )   4.3  
    Realizations and distributions (net)   (3.9 )   (0.3 )   (0.1 )   (4.3 )
    Other   (9.5 )   0.1     9.4     0.0  
    AUM, September 30, 2024 $ 375.1   $ 208.5   $ 144.8   $ 728.4  
     

    __________________________
    * Includes assets under management related to a new investment made by an existing Affiliate.

     
    CONSOLIDATED STATEMENTS OF INCOME
           
        Three Months Ended  
    (in millions, except per share data)   9/30/2023   9/30/2024  
    Consolidated revenue   $ 525.2     $ 516.4    
               
    Consolidated expenses:          
    Compensation and related expenses     211.8       220.8    
    Selling, general and administrative     91.1       97.0    
    Intangible amortization and impairments     12.5       7.3    
    Interest expense     31.1       34.7    
    Depreciation and other amortization     3.0       3.3    
    Other expenses (net)     7.9       11.6    
    Total consolidated expenses     357.4       374.7    
               
    Equity method income (net)(3)     39.8       52.6    
    Affiliate Transaction gain(4)     133.1       —    
    Investment and other income     23.0       22.8    
    Income before income taxes     363.7       217.1    
               
    Income tax expense     77.7       31.3    
    Net income     286.0       185.8    
               
    Net income (non-controlling interests)     (69.0 )     (62.2 )  
    Net income (controlling interest)   $ 217.0     $ 123.6    
               
    Average shares outstanding (basic)     34.9       30.1    
    Average shares outstanding (diluted)     43.4       35.0    
               
    Earnings per share (basic)   $ 6.22     $ 4.11    
    Earnings per share (diluted)(1)   $ 5.48     $ 3.78    
     
    RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE MEASURES(2)
        Three Months Ended  
    (in millions, except per share data)   9/30/2023   9/30/2024  
    Net income (controlling interest)   $ 217.0     $ 123.6    
    Intangible amortization and impairments     29.8       27.5    
    Intangible-related deferred taxes     14.7       15.6    
    Affiliate Transactions(4)     (104.7 )     —    
    Other economic items     (7.3 )     (13.5 )  
    Economic net income (controlling interest)   $ 149.5     $ 153.2    
               
    Average shares outstanding (adjusted diluted)     36.6       31.8    
    Economic earnings per share   $ 4.08     $ 4.82    
               
    Net income (controlling interest)   $ 217.0     $ 123.6    
    Interest expense     31.1       34.7    
    Income taxes     76.6       33.3    
    Intangible amortization and impairments     29.8       27.5    
    Affiliate Transactions(4)     (139.6 )     —    
    Other items     (6.5 )     (5.0 )  
    Adjusted EBITDA (controlling interest)   $ 208.4     $ 214.1    
                       

    See Notes for additional information.

     
    CONSOLIDATED STATEMENTS OF INCOME
           
        Nine Months Ended  
    (in millions, except per share data)   9/30/2023   9/30/2024  
    Consolidated revenue   $ 1,555.2     $ 1,516.6    
               
    Consolidated expenses:          
    Compensation and related expenses     663.0       676.5    
    Selling, general and administrative     273.4       278.1    
    Intangible amortization and impairments     37.5       21.8    
    Interest expense     92.4       98.1    
    Depreciation and other amortization     10.0       9.4    
    Other expenses (net)     36.2       31.5    
    Total consolidated expenses     1,112.5       1,115.4    
               
    Equity method income (net)(3)     154.3       188.3    
    Affiliate Transaction gain(4)     133.1       —    
    Investment and other income     87.2       60.0    
    Income before income taxes     817.3       649.5    
               
    Income tax expense     155.4       130.0    
    Net income     661.9       519.5    
               
    Net income (non-controlling interests)     (185.1 )     (170.0 )  
    Net income (controlling interest)   $ 476.8     $ 349.5    
               
    Average shares outstanding (basic)     35.6       31.4    
    Average shares outstanding (diluted)     42.9       35.2    
               
    Earnings per share (basic)   $ 13.41     $ 11.11    
    Earnings per share (diluted)(1)   $ 12.28     $ 10.25    
     
    RECONCILIATIONS OF SUPPLEMENTAL PERFORMANCE MEASURES(2)
           
        Nine Months Ended  
    (in millions, except per share data)   9/30/2023   9/30/2024  
    Net income (controlling interest)   $ 476.8     $ 349.5    
    Intangible amortization and impairments     88.6       118.7    
    Intangible-related deferred taxes     44.6       46.6    
    Affiliate Transactions(4)     (122.1 )     —    
    Other economic items     (13.0 )     (19.0 )  
    Economic net income (controlling interest)   $ 474.9     $ 495.8    
               
    Average shares outstanding (adjusted diluted)     37.3       33.3    
    Economic earnings per share   $ 12.72     $ 14.90    
               
    Net income (controlling interest)   $ 476.8     $ 349.5    
    Interest expense     92.4       98.1    
    Income taxes     150.7       133.0    
    Intangible amortization and impairments     88.6       118.7    
    Affiliate Transactions(4)     (162.7 )     —    
    Other items     (6.2 )     (7.9 )  
    Adjusted EBITDA (controlling interest)   $ 639.6     $ 691.4    
                       

    See Notes for additional information.

     
    CONSOLIDATED BALANCE SHEETS
           
        Period Ended  
    (in millions)   12/31/2023   9/30/2024  
    Assets          
    Cash and cash equivalents   $ 813.6     $ 1,010.7    
    Receivables     368.4       457.1    
    Investments in marketable securities     461.0       66.1    
    Goodwill     2,523.6       2,532.0    
    Acquired client relationships (net)     1,812.4       1,807.1    
    Equity method investments in Affiliates (net)     2,288.5       2,148.4    
    Fixed assets (net)     67.3       61.0    
    Other investments     480.9       532.8    
    Other assets     243.9       287.8    
    Total assets   $ 9,059.6     $ 8,903.0    
               
    Liabilities and Equity          
    Payables and accrued liabilities   $ 628.5     $ 625.7    
    Debt     2,537.5       2,619.7    
    Deferred income tax liability (net)     463.8       522.0    
    Other liabilities     466.3       464.5    
    Total liabilities     4,096.1       4,231.9    
               
    Redeemable non-controlling interests     393.4       397.1    
    Equity:          
    Common stock     0.6       0.6    
    Additional paid-in capital     741.4       711.3    
    Accumulated other comprehensive loss     (167.6 )     (139.2 )  
    Retained earnings     6,389.6       6,738.1    
          6,964.0       7,310.8    
    Less: treasury stock, at cost     (3,376.1 )     (3,994.5 )  
    Total stockholders’ equity     3,587.9       3,316.3    
    Non-controlling interests     982.2       957.7    
    Total equity     4,570.1       4,274.0    
    Total liabilities and equity   $ 9,059.6     $ 8,903.0    
     

    Notes

    (1) Earnings per share (diluted) adjusts for the dilutive effect of the potential issuance of incremental shares of our common stock.
       
      We assume the settlement of all of our Redeemable non-controlling interests using the maximum number of shares permitted under our arrangements. The issuance of shares and the related income acquired are excluded from the calculation if an assumed purchase of Redeemable non-controlling interests would be anti-dilutive to diluted earnings per share.
       
      We are required to apply the if-converted method to our outstanding junior convertible securities when calculating Earnings per share (diluted). Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into our common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share.
       
      The following table provides a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share:
          Three Months Ended   Nine Months Ended  
      (in millions)   9/30/2023   9/30/2024   9/30/2023   9/30/2024  
      Numerator                  
      Net income (controlling interest)   $ 217.0   $ 123.6   $ 476.8   $ 349.5  
      Income from hypothetical settlement of Redeemable non-controlling interests, net of taxes     17.1     5.2     39.4     1.0  
      Interest expense on junior convertible securities, net of taxes     3.4     3.4     10.1     10.1  
      Net income (controlling interest), as adjusted   $ 237.5   $ 132.2   $ 526.3   $ 360.6  
      Denominator                  
      Average shares outstanding (basic)     34.9     30.1     35.6     31.4  
      Effect of dilutive instruments:                  
      Stock options and restricted stock units     1.7     1.7     1.7     1.9  
      Hypothetical issuance of shares to settle Redeemable non-controlling interests     5.1     1.5     3.9     0.2  
      Junior convertible securities     1.7     1.7     1.7     1.7  
      Average shares outstanding (diluted)     43.4     35.0     42.9     35.2  
       
    (2) As supplemental information, we provide non-GAAP performance measures of Adjusted EBITDA (controlling interest), Economic net income (controlling interest), and Economic earnings per share. We believe that many investors use our Adjusted EBITDA (controlling interest) when comparing our financial performance to other companies in the investment management industry. Management utilizes these non-GAAP performance measures to assess our performance before our share of certain non-cash GAAP expenses primarily related to the acquisition of interests in Affiliates and to improve comparability between periods. Economic net income (controlling interest) and Economic earnings per share are used by management and our Board of Directors as our principal performance benchmarks, including as one of the measures for determining executive compensation. These non-GAAP performance measures are provided in addition to, but not as a substitute for, Net income (controlling interest), Earnings per share, or other GAAP performance measures. For additional information on our non-GAAP measures, see our most recent Annual and Quarterly Reports on Form 10-K and 10-Q, respectively, which are accessible on the SEC’s website at www.sec.gov.
       
      Adjusted EBITDA (controlling interest) represents our performance before our share of interest expense, income and certain non-income based taxes, depreciation, amortization, impairments, gains and losses related to Affiliate Transactions, and non-cash items such as certain Affiliate equity activity, gains and losses on our contingent payment obligations, and unrealized gains and losses on seed capital, general partner commitments, and other strategic investments. Adjusted EBITDA (controlling interest) is also adjusted to include realized economic gains and losses related to these seed capital, general partner commitments, and other strategic investments.
       
      Under our Economic net income (controlling interest) definition, we adjust Net income (controlling interest) for our share of pre-tax intangible amortization and impairments related to intangible assets (including the portion attributable to equity method investments in Affiliates) because these expenses do not correspond to the changes in the value of these assets, which do not diminish predictably over time. We also adjust for deferred taxes attributable to intangible assets because we believe it is unlikely these accruals will be used to settle material tax obligations. Further, we adjust for gains and losses related to Affiliate Transactions, net of tax, and other economic items. Other economic items include certain Affiliate equity activity, gains and losses related to contingent payment obligations, tax windfalls and shortfalls from share-based compensation, unrealized gains and losses on seed capital, general partner commitments, and other strategic investments, and realized economic gains and losses related to these seed capital, general partner commitments, and other strategic investments.
       
      Economic earnings per share represents Economic net income (controlling interest) divided by the Average shares outstanding (adjusted diluted). In this calculation, we exclude the potential shares issued upon settlement of Redeemable non-controlling interests from Average shares outstanding (adjusted diluted) because we intend to settle those obligations without issuing shares, consistent with all prior Affiliate equity purchase transactions. The potential share issuance in connection with our junior convertible securities is measured using a “treasury stock” method. Under this method, only the net number of shares of common stock equal to the value of the junior convertible securities in excess of par, if any, are deemed to be outstanding. We believe the inclusion of net shares under a treasury stock method best reflects the benefit of the increase in available capital resources (which could be used to repurchase shares of our common stock) that occurs when these securities are converted and we are relieved of our debt obligation.
       
      The following table provides a reconciliation of Average shares outstanding (adjusted diluted):
          Three Months Ended   Nine Months Ended  
      (in millions)   9/30/2023   9/30/2024   9/30/2023   9/30/2024  
      Average shares outstanding (diluted)   43.4     35.0     42.9     35.2    
      Hypothetical issuance of shares to settle Redeemable non-controlling interests   (5.1 )   (1.5 )   (3.9 )   (0.2 )  
      Junior convertible securities   (1.7 )   (1.7 )   (1.7 )   (1.7 )  
      Average shares outstanding (adjusted diluted)   36.6     31.8     37.3     33.3    
    (3) The following table presents equity method earnings and equity method intangible amortization and impairments, which in aggregate form Equity method income (net):
          Three Months Ended   Nine Months Ended  
      (in millions)   9/30/2023   9/30/2024   9/30/2023   9/30/2024  
      Equity method earnings   $ 61.0     $ 75.3     $ 217.3     $ 292.6    
      Equity method intangible amortization and impairments     (21.2 )     (22.7 )     (63.0 )     (104.3 )  
      Equity method income (net)   $ 39.8     $ 52.6     $ 154.3     $ 188.3    
    (4) The following table presents the impact of the completion of our previously announced sales of our equity interests in Veritable, LP to a third party in the third quarter of 2023, and Baring Private Equity Asia to EQT AB (“EQT”), a public company listed on Nasdaq Stockholm (EQT ST), in the fourth quarter of 2022, pursuant to which we received ordinary shares of EQT:
          Three Months Ended   Nine Months Ended  
      (in millions)   9/30/2023   9/30/2024   9/30/2023   9/30/2024  
      Affiliate Transaction gain   $ 133.1     $ —   $ 133.1     $ —  
      Investment and other income – Realized gains on EQT shares     6.5       —     29.6       —  
      Affiliate Transactions, pre-tax     139.6       —     162.7       —  
      Income taxes     (34.9 )     —     (40.6 )     —  
      Affiliate Transactions, after-tax   $ 104.7     $ —   $ 122.1     $ —  
                                     

    Forward-Looking Statements and Other Matters

    Certain matters discussed in this press release issued by Affiliated Managers Group, Inc. (“AMG” or the “Company”) may constitute forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “guidance,” “believes,” “expects,” “potential,” “preliminary,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “projects,” “positioned,” “prospects,” “intends,” “plans,” “estimates,” “pending investments,” “anticipates,” or the negative version of these words or other comparable words. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including changes in the securities or financial markets or in general economic conditions, the availability of equity and debt financing, competition for acquisitions of interests in investment management firms, uncertainties relating to closing of pending investments or transactions and potential changes in the anticipated benefits thereof, the investment performance and growth rates of our Affiliates and their ability to effectively market their investment strategies, the mix of Affiliate contributions to our earnings, and other risks, uncertainties, and assumptions, including those described under the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such factors may be updated from time to time in our periodic filings with the SEC. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by applicable law.

    This release does not constitute an offer of any products, investment vehicles, or services of any AMG Affiliate.

    From time to time, AMG may use its website as a distribution channel of material Company information. AMG routinely posts financial and other important information regarding the Company in the Investor Relations section of its website at www.amg.com and encourages investors to consult that section regularly.

    The MIL Network –

  • MIL-OSI: Willis Lease Finance Corporation Reports Strong Third Quarter Pre-Tax Income of $34.5 million; Pre-Tax Income Up 69% as Compared to that of the Third Quarter of the Prior Period; Board Declares Recurring Quarterly Dividend of $0.25 Per Share of Common Stock

    Source: GlobeNewswire (MIL-OSI)

    COCONUT CREEK, Fla., Nov. 04, 2024 (GLOBE NEWSWIRE) — Willis Lease Finance Corporation (NASDAQ: WLFC) (“WLFC” or the “Company”) today reported third quarter total revenues of $146.2 million and quarterly pre-tax income of $34.5 million. The Company also announced its quarterly dividend of $0.25 per share, expected to be paid on November 21, 2024, with a record holder date of November 12, 2024. For the three months ended September 30, 2024, core lease rent and maintenance reserve revenues were $114.7 million in the aggregate, up 26% as compared to $91.3 million for the same period in 2023. The growth was predominantly driven by core, recurring lease and maintenance revenues associated with the continued strength of the aviation marketplace, as airlines leverage the Company’s leasing, parts and maintenance capabilities to avoid protracted, expensive engine shop visits.

    “Scale through growth has proven to be an important factor in our profitability,” said Austin C. Willis, Chief Executive Officer. “Our platform of complementary services and assets is helping to fuel that growth.”

    “Our long-standing efforts to demonstrate the value of engine programs and our vertically integrated products and services continue to deliver for the Company and for our customers,” said Brian R. Hole, President. “The challenge for us now is to deliver that value and scale efficiently to meet existing demand.”

    Third Quarter 2024 Highlights

    • Lease rent revenue was $64.9 million in the third quarter of 2024, an increase of 21.2%, compared to $53.6 million in the third quarter of 2023. During the three months ended September 30, 2024, we purchased equipment (including capitalized costs) totaling $166.9 million, which consisted of three airframes, 19 engines, and other parts and equipment purchased for our lease portfolio. During the three months ended September 30, 2023, we purchased equipment (including capitalized costs) totaling $31.0 million, which consisted of five engines and other parts and equipment purchased for our lease portfolio.
    • Maintenance reserve revenue was $49.8 million in the third quarter of 2024, an increase of 32.0%, compared to $37.7 million in the same quarter of 2023, reflecting the high level of usage of our assets by our customer base. Engines on lease with “non-reimbursable” usage fees generated $48.5 million of short-term maintenance revenues in the first three quarters of 2024, compared to $34.4 million in the prior year period. There was $1.2 million long-term maintenance revenue recognized in the three months ended September 30, 2024, compared to $3.3 million long-term maintenance revenue recognized for the three months ended September 30, 2023. Long-term maintenance revenue is recognized at the end of a lease period as the related maintenance reserve liability is released from the balance sheet.
    • Spare parts and equipment sales increased to $10.9 million in the third quarter of 2024, compared to $3.4 million in the third quarter of 2023. The increase in spare parts sales for the three months ended September 30, 2024 reflects the demand for surplus material that we are seeing as operators extend the lives of their current generation engine portfolios. Equipment sales for the three months ended September 30, 2024 were $1.0 million for the sale of one engine. There were no equipment sales for the three months ended September 30, 2023.
    • Gain on sale of leased equipment was $9.5 million in the third quarter of 2024, reflecting the sale of 13 engines and other parts and equipment from the lease portfolio. During the three months ended September 30, 2023, we sold one engine, one airframe, and other parts and equipment for a net gain of $0.8 million.
    • The Company generated $34.5 million of pre-tax income in the third quarter of 2024, compared to pre-tax income of $20.3 million in the third quarter of 2023, an increase of 69.4%.
    • The book value of lease assets owned either directly or through our joint ventures, inclusive of our notes receivable, maintenance rights, and investments in sales-type leases was $3,039.8 million as of September 30, 2024. We continue to see the value of scale through increased profitability as well as our ability to offer bespoke solutions to our customers.
    • Diluted weighted average income per common share was $3.37 for the third quarter 2024, compared to diluted weighted average income per common share of $2.13 in the third quarter of 2023.
    • On September 27, 2024, the Company refinanced and expanded its $50.0 million of Series A-1 and Series A-2 Preferred Stock into one $65.0 million Series A series, which accrues quarterly dividends at a rate of 8.35% per annum, providing incremental growth equity to the business.
    • On October 31, 2024, the Company entered into a new, $1.0 billion, five-year, revolving credit facility with a consortium of lenders, refinancing its $500.0 million outstanding credit facility. This new facility will provide incremental capital to support the ongoing growth of the business.
    • The Company declared its quarterly dividend of $0.25 per share of common stock, expected to be paid on November 21, 2024, with a record holder date of November 12, 2024.

    Balance Sheet

    As of September 30, 2024, the Company’s lease portfolio was $2,665.7 million, consisting of $2,435.6 million of equipment held in its operating lease portfolio, $175.4 million of notes receivable, $31.5 million of maintenance rights, and $23.2 million of investments in sales-type leases, which represented 348 engines, 16 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2023, the Company’s lease portfolio was $2,223.4 million, consisting of $2,112.8 million of equipment held in our operating lease portfolio, $92.6 million of notes receivable, $9.2 million of maintenance rights, and $8.8 million of investments in sales-type leases, which represented 337 engines, 12 aircraft, one marine vessel and other leased parts and equipment.

    Conference Call

    WLFC will hold a conference call on Monday, November 4, 2024 at 10:00 a.m. Eastern Standard Time to discuss its third quarter results. Individuals wishing to participate in the conference call should dial: US and Canada (888) 632-5004, International +1 (646) 828-8082, wait for the conference operator and provide the operator with the Conference ID 512645. A digital replay will be available two hours after the completion of the conference. To access the replay, please visit our website at www.wlfc.global under the Investor Relations section for details.

    Willis Lease Finance Corporation

    Willis Lease Finance Corporation leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Additionally, through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services.

    Forward-Looking Statements

    Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Any forward-looking statement made by the Company is based only on information currently available to the Company and speaks only as of the date on which it is made. We undertake no obligation to update them, except as may be required by law. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as war, terrorist activity and pandemics; changes in oil prices, rising inflation and other disruptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.

    Unaudited Condensed Consolidated Statements of Income
    (In thousands, except per share data) 

      Three months ended
    September 30,    		       Nine months ended
    September 30,    		    
        2024     2023   % Change     2024     2023     % Change
    REVENUE                      
    Lease rent revenue $ 64,905   $ 53,573   21.2 %   $ 173,652   $ 161,209     7.7 %
    Maintenance reserve revenue   49,760     37,696   32.0 %     156,527     96,609     62.0 %
    Spare parts and equipment sales   10,863     3,359   223.4 %     20,337     12,961     56.9 %
    Interest revenue   3,412     2,106   62.0 %     7,965     6,409     24.3 %
    Gain on sale of leased equipment   9,519     773   1,131.4 %     33,148     5,101     549.8 %
    Maintenance services revenue   5,948     6,199   (4.0 )%     17,956     16,707     7.5 %
    Other revenue   1,816     2,039   (10.9 )%     6,841     5,279     29.6 %
    Total revenue   146,223     105,745   38.3 %     416,426     304,275     36.9 %
                           
    EXPENSES                      
    Depreciation and amortization expense   23,650     23,088   2.4 %     68,303     68,131     0.3 %
    Cost of spare parts and equipment sales   8,861     2,024   337.8 %     17,003     9,581     77.5 %
    Cost of maintenance services   6,402     5,580   14.7 %     17,647     14,351     23.0 %
    Write-down of equipment   605     719   (15.9 )%     866     2,390     (63.8 )%
    General and administrative   40,037     26,545   50.8 %     104,305     86,103     21.1 %
    Technical expense   5,151     8,739   (41.1 )%     17,924     19,755     (9.3 )%
    Net finance costs:                      
    Interest expense   27,813     19,052   46.0 %     75,378     56,526     33.4 %
    Total net finance costs   27,813     19,052   46.0 %     75,378     56,526     33.4 %
    Total expenses   112,519     85,747   31.2 %     301,426     256,837     17.4 %
                           
    Income from operations   33,704     19,998   68.5 %     115,000     47,438     142.4 %
    Income (loss) from joint ventures   756     346   118.5 %     7,255     (1,289 )   nm  
    Income before income taxes   34,460     20,344   69.4 %     122,255     46,149     164.9 %
    Income tax expense   10,364     5,726   81.0 %     34,704     13,321     160.5 %
    Net income   24,096     14,618   64.8 %     87,551     32,828     166.7 %
    Preferred stock dividends   948     819   15.8 %     2,758     2,431     13.5 %
    Accretion of preferred stock issuance costs   15     21   (28.6 )%     39     63     (38.1 )%
    Net income attributable to common shareholders $ 23,133   $ 13,778   67.9 %   $ 84,754   $ 30,334     179.4 %
                           
    Basic weighted average income per common share $ 3.51   $ 2.16       $ 13.01   $ 4.83      
    Diluted weighted average income per common share $ 3.37   $ 2.13       $ 12.57   $ 4.70      
                           
    Basic weighted average common shares outstanding   6,582     6,365         6,513     6,282      
    Diluted weighted average common shares outstanding   6,859     6,466         6,745     6,454      

    Unaudited Condensed Consolidated Balance Sheets
    (In thousands, except per share data)

        September 30, 2024   December 31, 2023
    ASSETS        
    Cash and cash equivalents   $ 5,791   $ 7,071
    Restricted cash     99,333     160,958
    Equipment held for operating lease, less accumulated depreciation     2,435,583     2,112,837
    Maintenance rights     31,506     9,180
    Equipment held for sale     4,286     805
    Receivables, net     37,069     58,485
    Spare parts inventory     74,089     40,954
    Investments     61,891     58,044
    Property, equipment & furnishings, less accumulated depreciation     36,119     37,160
    Intangible assets, net     4,177     1,040
    Notes receivable, net     175,358     92,621
    Investments in sales-type leases, net     23,204     8,759
    Other assets     55,187     64,430
    Total assets   $ 3,043,593   $ 2,652,344
             
    LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY        
    Liabilities:        
    Accounts payable and accrued expenses   $ 119,560   $ 52,937
    Deferred income taxes     178,177     147,779
    Debt obligations     1,990,455     1,802,881
    Maintenance reserves     108,090     92,497
    Security deposits     27,203     23,790
    Unearned revenue     39,294     43,533
    Total liabilities     2,462,779     2,163,417
             
    Redeemable preferred stock ($0.01 par value)     63,053     49,964
             
    Shareholders’ equity:        
    Common stock ($0.01 par value)     72     68
    Paid-in capital in excess of par     41,035     29,667
    Retained earnings     473,609     397,781
    Accumulated other comprehensive income, net of tax     3,045     11,447
    Total shareholders’ equity     517,761     438,963
    Total liabilities, redeemable preferred stock and shareholders’ equity   $ 3,043,593   $ 2,652,344
    CONTACT: Scott B. Flaherty
      Executive Vice President & Chief Financial Officer
      (561) 413-0112

    The MIL Network –

  • MIL-OSI USA: Governor Cooper Proclaims Employ a Veteran Week

    Source: US State of North Carolina

    Headline: Governor Cooper Proclaims Employ a Veteran Week

    Governor Cooper Proclaims Employ a Veteran Week
    mseets

    North Carolina will celebrate “Employ A Veteran Week,” Nov. 11-15, and a variety of events before and during that week will help connect veterans to jobs and other services, Governor Roy Cooper announced today.

    “Veterans strengthen our communities and enrich our businesses as citizens, skilled workers and leaders,” said Governor Cooper. “We owe veterans and their families a deep debt of gratitude for their service, and, as America’s most military and veteran-friendly state, North Carolina honors them by helping them get good jobs in growing industries.”

    “It’s our privilege to serve our Veterans, the more than 20,000 military service members who transition from active duty in North Carolina each year, and their families, through our NCWorks Career Centers and other state programs,” said N.C. Commerce Secretary Machelle Baker Sanders. “The talent found within our military community brings a strong work ethic, leadership experience, adaptability, integrity, and specialized training to our workforce—attributes every business needs to be successful—and part of what makes North Carolina such an attractive state for innovative companies.”

    “Veterans bring invaluable skills and experiences to our communities and demonstrated resilience, leadership, and dedication during their service. The N.C. Department of Military and Veterans Affairs (NC DMVA) expresses our profound gratitude for their sacrifices,” said NC DMVA Secretary Grier Martin. “A successful transition to civilian life is important for a veteran and also harnesses their talents to benefit our economy.”

    Local events focused on helping veterans find employment and access other services include:

    • Tuesday, Nov. 5 (9 a.m. – 4 p.m.) – The NCWorks Career Center – Union County will hold a Veterans Appreciation Event at 1125 Skyway Drive, Monroe, NC. Off-Base Transition Training (OBTT) workshops will be offered to veterans and their spouses at 9 a.m., 11 a.m. and noon. A hiring event with at least two employers will take place from 1-4 p.m., with the first hour reserved for veterans. Lunch will be provided to the first 20 veterans to attend the workshops or the hiring event. To register, call 704-283-7541.
    • Tuesday, Nov. 5 (11 a.m. – 12:30 p.m.) – The NCWorks Career Center -Iredell/Statesville will hold a Veterans Lunch and Learn session at 133 Island Ford Road, Statesville, NC. Attendees will learn about VA benefits, Iredell County Veteran Services and other resources.
    • Wednesday, Nov. 6 (8:30 a.m. – 4 p.m.) – The NCWorks Career Center -Iredell/Statesville will offer Off-Base Transition Training (OBTT) workshops to veterans at 133 Island Ford Road, Statesville, NC. The general public is also welcome. Workshops include “Marketing Yourself & Other Job Search Tactics,” “Interview Skills,” “Networking & Professional Introductions,” and “Job Fair Strategies & On the Spot Interviews.”
    • Wednesday, Nov. 6 (9 a.m. – noon) – The NCWorks Career Center – Lincoln will present a Veterans Job & Resource Fair at Gaston College – Lincoln Campus, Room LC 139, 511 South Aspen Street, Lincolnton, NC.
    • Wednesday, Nov. 6 (10 a.m. – 2 p.m.) – The NCWorks Career Center – Onslow will present a Veterans Career Fair at the American Legion building, 146 Broadhurst Road, Jacksonville, NC. The event is open only to veterans and their dependents from 10 to 11 a.m.
    • Wednesday, Nov. 6 (10 a.m. – 2 p.m.) – The NCWorks Career Center – Cumberland County will hold a Veterans Hiring Event at 490 N. McPherson Church Road, Fayetteville, NC.
    • Wednesday, Nov. 6 (2 – 4 p.m.) – The NCWorks Career Center – Catawba and partners will present the annual Veterans, Students & Civilians Job Fair, with approximately 25 employers, at Appalachian State University’s new Hickory campus, 800 17th St. NW, Hickory, NC.
    • Thursday, Nov. 7 (9 a.m. – 1 p.m.) – The NCWorks Career Center -Iredell/Statesville will hold a Veterans Job and Resource Fair at 133 Island Ford Road, Statesville, NC. The general public is also welcome.
    • Thursday, Nov. 7 (10 a.m. – 2 p.m.) – The NCWorks Career Center – Hoke County will hold a Veterans Job Fair at 304 Birch Street, Raeford, NC, with at least four employers, plus Dress for Success. The general public is also welcome.
    • Thursday, Nov. 7 (10 a.m. – 2 p.m.) – The NCWorks Career Center – Cumberland County will hold a Veterans Hiring Event at 490 N. McPherson Church Road, Fayetteville, NC.
    • Thursday, Nov. 7 (10 a.m. – 3 p.m.) – The NCWorks Career Center – Pitt County will hold a Veterans Job Fair at 3101 Bismarck St., Greenville, NC. The first hour is reserved for veterans; members of the general public are welcome at 11 a.m. 
    • Thursday, Nov. 7 (2-4 p.m.) – The NCWorks Career Center – Rowan will hold the “Veterans Day Expo” at 1904 S. Main St., Salisbury, NC. This event will include Off-Base Transition Training (OBTT) workshops with a focus on Networking & Professional Introductions at Job Fairs, Job Fair Strategies, and On-the-Spot Interviews, and Federal Hiring, as well as an Expo with community organizations presenting information on their services, and employers seeking to fill positions.
    • Thursday, Nov. 7 (10 a.m. – 1 p.m.) – The NCWorks Career Center – Craven will conduct the 4th Annual Veterans Day Job Fair at the National Guard Armory, 301 Glenburnie Drive, New Bern, NC. The job fair is also open to the general public.
    • Thursday, Nov. 7 (9 a.m. – 1 p.m.) – The 2024 Foothills Veterans Winter Stand Down will take place at the J.E. Broyhill Civic Center, 1909 Hickory Blvd., Lenoir, NC. The event provides access to medical services, food, clothing, employment services and more.
    • Thursday, Nov. 7 (2:30 – 6 p.m.) – The NCWorks Career Center – Rockingham County will host a Veteran Job Fair. The event is also open to the public. At least five employers will participate, as will partnering organizations that offer resources to veterans.
    • Friday, Nov. 8 (9 a.m. – 1 p.m.) – Partners including the NCWorks Career Center – Craven will present the 9th Annual Craven County Veterans Stand-down at the National Guard Armory, 301 Glenburnie Drive, New Bern, NC.
    • Friday, Nov. 8 (10 a.m. – noon) – The NCWorks Career Center – Richmond County will hold an “Honoring Veterans” event to educate veterans and their dependents on services and benefits to which they are entitled, at 115 W. Franklin St., Rockingham, NC.
    • Tuesday, Nov. 12 (9 a.m. – noon) – The NCWorks Career Center – Haywood invites all Veterans to a “Thank A Vet” event, featuring breakfast as well as information on local veterans’ resources, at 1170 North Main Street, Waynesville, NC.
    • Wednesday, Nov. 13 (9 a.m. – 2 p.m.) – The NCWorks Career Center – Charlotte (Mecklenburg) will host a Veterans Hiring Event at 8601 McAlpine Park Drive, Suite 110, Charlotte, NC. Mock interviews and reviewing of resumes will be offered from 9 – 10 a.m. The hiring event will be open to veterans only from 10 – 11 a.m., and open to the public thereafter.
    • Wednesday, Nov. 13 (9 a.m. – 12 p.m.) – The NCWorks Career Center -Halifax/Northampton County will hold a Veterans Career Fair at 1560 Julian R. Allsbrook Hwy., Roanoke Rapids, NC.
    • Wednesday, Nov. 13 (10 a.m. – 2 p.m.) – The NCWorks Career Centers – Pasquotank & Chowan Counties will hold a Veterans Day Job Fair & Resource Expo at the American Legion, 1317 W. Queen St., Edenton, NC. This event is open to Veterans and the general public.
    • Wednesday, Nov. 13 (10 a.m. – 3 p.m.) – The NCWorks Career Center – Cumberland and other partners will present a Women Veterans Career & Resource Fair at Soldier Support Building, 2843 Normandy Drive, Fort Liberty, NC.
    • Wednesday, Nov. 13 (10 a.m. – 3 p.m.) – NCWorks will present a Yancey County Veterans Stand Down event at Burnsville Town Center, 6 S. Main St., Burnsville, NC.
    • Wednesday, Nov. 13 (1 – 4 p.m.) – The NCWorks Career Center – Randolph County and partners will hold a Veteran-Centered Hiring Event at the National Guard Armory, 1430 South Fayetteville Street, Asheboro, NC. The first hour (1-2 p.m.) is reserved for Veterans only.
    • Wednesday, Nov. 13 (1 – 4 p.m.) – The NCWorks Career Center – Wilkes County will present a “Veterans and Job Seekers Job/Resource Fair” at 1320 West D Street, Suite #2, North Wilkesboro, NC.
    • Wednesday, Nov. 13 (3 – 7 p.m.) – NC4ME presents a “Beers & Careers” networking event for Veterans, Transitioning Service Members, Guard/Reserve Members and Military Spouses in the Camp Lejeune area, at Angry Ginger Irish Pub, 1202 Gum Branch Road, Jacksonville, NC. Register at Eventbrite.
    • Thursday, Nov. 14 (9 a.m. – noon) – NCWorks Veterans Services invites all Veterans to a “Thank A Vet” event, featuring breakfast as well as information on local veterans’ resources, at the Steve Youngdeer American Legion Post located at 1526 Acquoni Road, Cherokee, NC.
    • Thursday, Nov. 14 (9 a.m. – 2 p.m.) – NCWorks will present a Macon County Veterans Stand Down event at the Robert C. Carpenter Community Building, 1288 Georgia Road, Franklin, NC.
    • Thursday, Nov. 14 (11 a.m. – 2 p.m.) – The NCWorks Career Center – Greensboro (Guilford) will hold “Hire a Vet Day” at 2301 W. Meadowview Road, Greensboro, NC.
    • Friday, Nov. 15 (10 a.m. – 2 p.m.) – Partners including NCWorks will present the Rocky Mount Veteran Resource Fair, at Word Tabernacle Church, 821 Word Plaza, Rocky Mount, NC.
    • Monday, Nov. 18 (2 – 4 p.m.) – The NCWorks Career Center – Cabarrus will hold a “Veterans Day Expo” at 845 Church Street North, Suite 201, Concord, NC. This event will include resources for veterans and employers onsite.

    The Department of Commerce, working in close partnership with the U.S. Department of Labor, has 50 NCWorks Veterans Services professionals (all of whom are veterans themselves). Their primary mission is to help veterans find good jobs and training opportunities. These professionals are located across the state at local NCWorks Career Centers, which serve veterans and other jobseekers, while also helping employers meet their talent needs. In many parts of the state, they also play a key role as partners in Veterans Treatment Courts. The department also partners with North Carolina For Military Employment (NC4ME) on special hiring events.

    Contact information for each career center can be found at www.NCWorks.gov. In addition, veterans and employers can access services through the NCWorks Veterans Portal at veterans.ncworks.gov.

    Since 2022, the Commerce department has added a new resource for veterans, in the form of a national partnership with the Hilton Honors Military Program. Through this partnership, when veterans, transitioning service-members and qualified military spouses need to travel related to their search for work (for example, to go to an in-person job interview or to required training), they may be eligible for free accommodations at a Hilton property. To participate, veterans should contact or visit their local NCWorks Career Center and ask to speak with a veterans representative.

    Read the “Employ a Veteran Week” proclamation here.

    ###

    NCWorks Veterans Services are supported by the Jobs for Veterans State Grant from the Veterans’ Employment and Training Service (VETS) of the U.S. Department of Labor as part of an award to North Carolina totaling $5,703,016, with 0% financed from non-governmental sources.

    Nov 4, 2024

    MIL OSI USA News –

  • MIL-OSI: Kayne Anderson Energy Infrastructure Fund Provides Unaudited Balance Sheet Information and Announces Its Net Asset Value and Asset Coverage Ratios at October 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    HOUSTON, Nov. 01, 2024 (GLOBE NEWSWIRE) — Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company”) (NYSE: KYN) today provided a summary unaudited statement of assets and liabilities and announced its net asset value and asset coverage ratios under the Investment Company Act of 1940 (the “1940 Act”) as of October 31, 2024.

    As of October 31, 2024, the Company’s net assets were $2.2 billion, and its net asset value per share was $12.97. As of October 31, 2024, the Company’s asset coverage ratio under the 1940 Act with respect to senior securities representing indebtedness was 675% and the Company’s asset coverage ratio under the 1940 Act with respect to total leverage (debt and preferred stock) was 483%.

     STATEMENT OF ASSETS AND LIABILITIES
    OCTOBER 31, 2024  //  (UNAUDITED)
     
        (in millions)
    Investments   $ 3,002.2  
    Cash and cash equivalents     35.7  
    Accrued income     11.2  
    Current tax asset, net     6.6  
    Other assets     0.5  
    Total assets     3,056.2  
         
    Notes     409.7  
    Unamortized notes issuance costs     (2.8 )
    Preferred stock     163.1  
    Unamortized preferred stock issuance costs     (1.3 )
    Total leverage     568.7  
         
    Payable for securities purchased     5.1  
    Other liabilities     13.3  
    Deferred tax liability, net     275.1  
    Total liabilities     293.5  
         
    Net assets   $ 2,194.0  
         
     

    The Company had 169,126,038 common shares outstanding as of October 31, 2024.

    Long-term investments were comprised of Midstream Energy Companies (96%), Utility Companies (3%) and Other Energy (1%).

    The Company’s ten largest holdings by issuer at October 31, 2024 were:

          Amount
    (in millions)*    		   % Long Term
    Investments
    1. The Williams Companies, Inc. (Midstream Energy Company)   $             309.5   10.3 %
    2. Energy Transfer LP (Midstream Energy Company)     281.1   9.4 %
    3. MPLX LP (Midstream Energy Company)                    273.6   9.1 %
    4. Enterprise Products Partners L.P. (Midstream Energy Company)     258.3   8.6 %
    5. ONEOK, Inc. (Midstream Energy Company)     226.8   7.6 %
    6. Targa Resources Corp. (Midstream Energy Company)     220.0   7.3 %
    7. Cheniere Energy, Inc. (Midstream Energy Company)     194.5   6.5 %
    8. Kinder Morgan, Inc. (Midstream Energy Company)     184.9   6.2 %
    9. Western Midstream Partners, LP (Midstream Energy Company)     138.6   4.6 %
    10. Pembina Pipeline Corporation (Midstream Energy Company)     132.3   4.4 %
    * Includes ownership of common and preferred units.

    ###

    Portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. You can obtain a complete listing of holdings by viewing the Company’s most recent quarterly or annual report.

    Kayne Anderson Energy Infrastructure Fund, Inc. (NYSE: KYN) is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended, whose common stock is traded on the NYSE. The company’s investment objective is to provide a high after-tax total return with an emphasis on making cash distributions to stockholders. KYN intends to achieve this objective by investing at least 80% of its total assets in securities of Energy Infrastructure Companies. See Glossary of Key Terms in the Company’s most recent quarterly report for a description of these investment categories and the meaning of capitalized terms.

    This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of any securities in any jurisdiction in which such offer or sale is not permitted. Nothing contained in this press release is intended to recommend any investment policy or investment strategy or consider any investor’s specific objectives or circumstances. Before investing, please consult with your investment, tax, or legal adviser regarding your individual circumstances.

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This communication contains statements reflecting assumptions, expectations, projections, intentions, or beliefs about future events. These and other statements not relating strictly to historical or current facts constitute forward-looking statements as defined under the U.S. federal securities laws. Forward-looking statements involve a variety of risks and uncertainties. These risks include but are not limited to changes in economic and political conditions; regulatory and legal changes; energy industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in detail in the Company’s filings with the SEC, available at www.kaynefunds.com or www.sec.gov. Actual events could differ materially from these statements or our present expectations or projections. You should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Kayne Anderson undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Company’s investment objectives will be attained.

    Contact investor relations at 877-657-3863 or cef@kayneanderson.com.

    The MIL Network –

  • MIL-OSI: Aktsiaselts Infortar subsidiary AS Eesti Gaas acquires a 100% shareholding in EWE Polska

    Source: GlobeNewswire (MIL-OSI)

    Aktsiaselts Infortar subsidiary AS Eesti Gaas acquires a 100% shareholding in EWE Polska

    AS Eesti Gaas, a wholly owned subsidiary of Aktsiaselts Infortar (Infortar) and the German energy group EWE AG have entered into an agreement on the 31st of October 2024, under which EWE AG will sell 100% of the shares of its wholly owned subsidiary EWE Polska sp. z o.o. (EWE Polska) which operates in Poland. EWE Polska has two wholly owned subsidiaries, EWE Energia sp. z o.o. and EWE Przesył sp. z o.o. (altogether EWE Polska group).
    Chairman of the Management Board of Infortar Ain Hanschmidt:
    “Our ambition is to expand beyond the Baltic-Finnish region into Central and Western Europe, implementing our proven model and experience as a gas supplier and network operator Poland, thereby delivering the best service to consumers. The acquisition of an energy company in Poland provides us with the necessary momentum in this large and important growing gas market, while also ensuring an additional steady cash flow for the company’s shareholders.”

    The fields of activity of EWE Polska group include a natural gas distribution network in Western Poland and all business lines of energy sales (including gas and electricity sales).

    The completion of the transaction requires approval from the Polish Competition Authority (Polish: Urząd Ochrony Konkurencji i Konsumentów), as well as corporate approval by the EWE AG Supervisory Board (German: Aufsichtsrat).

    The acquisition of shares in EWE Polska constitutes a significant transaction under Nasdaq Tallinn Stock Exchange Rules and Regulations. Therefore, the Stock Exchange Release includes comprehensive information on the transaction’s circumstances and EWE Polska’s financial results.

    EWE Polska is the second-largest privately-owned network operator in Poland. The company operates a natural gas distribution network of 2,316 km in western Poland, mainly around Poznan, serving over 25,000 clients. In addition to infrastructure management, the company sells natural gas and electricity, with energy sales totaling 1.2 TWh last year.

    The aim of the transaction is to significantly expand Infortar’s energy business in the Polish market, with the impact on the Infortar’s consolidation group being adding estimated revenues of more than 100 million euros.
    The acquisition of EWE Polska group increases our market presence in this large and important growing gas market, while also ensuring steady cash flow from regulated assets to our shareholders.

          1.   Terms of payment of purchase price for the shares of EWE Polska
    The purchase price for shares of EWE Polska is 120 000 000 euros payable as monetary payment.
    The purchase price will be paid at the completion of the transaction after being adjusted based on accrued interest and occurred leakage (if any).

          2.   EWE Polska’s financial results
    EWE Polska group total revenues in year 2023 amounted to 141.1 mEUR (2022: 133.2 mEUR and 2021: 76.4 mEUR) which is 6% higher than the year before and 85% higher than in year 2021. In 2023, earnings before interest, taxes, depreciation, and amortization (EBITDA) was -2.2 mEUR, compared to 15.6 mEUR in 2022 and 15.0 mEUR in 2021. In 2023, the consolidated net profit was -3.7 mEUR, compared to net profit of 10.5 m EUR and 10.0 mEUR in years 2022 and 2021 respectively.

    EWE Polska group total assets in 2023 were 170.0 mEUR (2022: 182.4 mEUR and 2021: 156.5mEUR) including total fixed assets 115.8 mEUR that is 68% from total assets (2022: 63% and 2021: 69%). Total current assets in 2023 were 54.2 mEUR, including cash and equivalents 22.9 m EUR. In 2022 respective numbers were 66.7 mEUR and 20.7 mEUR. In 2021 the numbers were 48.1 mEUR and 16.2 mEUR.

    Total Equity in 2023 was 115.5 mEUR (in 2022 total equity was 121.5 mEUR and in 2021 114.6 mEUR).
    For more detailed information, please see appendix.

    Based on the additional information provided to Infortar, there have been no adverse changes in the business operations of the EWE Polska group since the close of the 2023 financial year. Unaudited consolidated figures for the first eight months of 2024 have been presented to Infortar, showing consolidated sales of 74.6 mEUR (2023 8 months: 94.2 mEUR), an EBITDA of 15.2 mEUR (2023 8 months: 5.9 mEUR), and a net profit of 12.3 mEUR (2023 8 months: -2.6 mEUR).

          3.   Overview of the loans undertaken by EWE Polska
    EWE Polska group has no outstanding loans in its consolidated balance sheet.

          4.   The structure of shareholders of EWE Polska
    EWE Polska is 100% owned by EWE AG. Upon completion of the transaction 100% of EWE Polska shares will be acquired by Infortar’s wholly owned subsidiary AS Eesti Gaas.

          5.   Information on significant court or arbitration proceedings involving EWE Polska
    According to information provided to Infortar, the companies within the EWE Polska group are not engaged in any significant court or arbitration proceedings. While certain legal proceedings related to their regular business activities are ongoing, Infortar has grounds to believe that the outcomes of these proceedings are unlikely to have a material impact on the business activities of EWE Polska group companies.

          6.   Information on valid contracts between Infortar and EWE Polska
    Currently there are no valid contracts between Infortar and EWE Polska group.

          7.   The composition of managing bodies of EWE Polska
    The Management Board of EWE Polska currently consists of Mr. Krzysztof Noga and Ms. Agnieszka Bielewicz. The Supervisory Board has not been formed.

    The contemplated transaction is not a transaction between related parties and the members of the Supervisory Board and the Management Board of Aktsiaselts Infortar have no personal interest in the transaction in any other way.

    Aktsiaselts Infortar operates in seven countries, the company’s main fields of activity are energy, maritime transport, and real estate. Aktsiaselts Infortar owns a 68.47% stake in Aktsiaselts Tallink Grupp, a 100% stake in AS Eesti Gaas and a versatile and modern real estate portfolio of approx. 113,000 m2. In addition to the three main areas of activity, Aktsiaselts Infortar also operates in construction and mineral resources, agriculture, printing, taxi business and other areas. A total of 104 companies belong to the Aktsiaselts Infortar group: 95 subsidiaries, 4 affiliated companies and 5 subsidiaries of affiliated companies. Excluding affiliates, Aktsiaselts Infortar employs 6,625 people.

    Additional information:
    Kadri Laanvee
    Investor Relations Manager
    Phone: +372 5156662
    e-mail: kadri.laanvee@infortar.ee
    www.infortar.ee/en/investor

    Appendix Balance Sheet and Profit and Loss Statements of EWE Polska group

    BALANCE SHEET      
    Amounts in millions of euros
    FX rate of 4.35 has been used for conversion    		 31.12.2021 31.12.2022 31.12.2023
    Cash and equivalents 16,2 20,7 22,9
    Derivatives 14,3 16,3 6,0
    Receivables 14,7 24,7 15,1
    Inventories 2,5 4,8 4,3
    Other current assets 0,4 0,3 6,0
    Total current assets 48,1 66,7 54,2
    Total fixed assets 108,5 115,7 115,8
    TOTAL ASSETS 156,5 182,4 170,0
           
    Trade payables 14,4 23,0 16,0
    Derivatives 8,8 9,9 7,3
    Tax Liabilities 1,3 2,1 3,4
    Advances Received 1,8 7,1 6,2
    Connection fees 0,1 0,1 0,1
    Other current liabilities 2,6 3,4 6,4
    Total current liabilities 29,0 45,6 39,5
    Derivatives 0,0 0,2 0,2
    Other non-current liabilities 1,5 3,3 2,8
    Connection fees 11,4 11,8 12,1
    Total long-term liabilities 12,9 15,3 15,1
    Total Equity 114,6 121,5 115,5
    of which share capital 105,1 104,9 105,8
    TOTAL EQUITY AND LIABILITIES 156,5 182,4 170,0
    PROFIT AND LOSS STATEMENT    
    Amounts in millions of euros 2021 2022 2023
    Sales revenues 76,0 132,9 139,3
    Other revenues 0,4 0,3 1,7
    TOTAL REVENUES 76,4 133,2 141,1
    Cost of goods sold -55,1 -104,3 -117,4
    Staff costs -4,6 -5,7 -6,4
    Other operating costs -6,5 -7,6 -8,1
    Other costs -1,9 -1,1 -1,4
    Derivatives 6,6 1,2 -9,9
    EBITDA 15,0 15,6 -2,2
    Depreciation and Amortisation -2,5 -2,6 -3,1
    EBIT 12,5 13,0 -5,2
    Financial costs and revenues 0,1 0,5 0,7
    Income tax -2,6 -3,0 0,8
    NET PROFIT 10,0 10,5 -3,7

    The MIL Network –

  • MIL-OSI Russia: NSU and SibNIA create a joint laboratory “Intelligent systems for testing aircraft structures”

    Translation. Region: Russian Federation –

    Source: Novosibirsk State University – Novosibirsk State University –

    Novosibirsk State University and the Siberian Aviation Research Institute named after S. A. Chaplygin continue their cooperation in the educational and research spheres. At the scientific and production forum “Golden Valley”, which was held from October 31 to November 1 and the main organizer of which was NSU, an agreement was signed to create a joint laboratory “Intelligent systems for testing aircraft structures”. At the first stage, it will be engaged in bench tests of equipment in order to predict possible deformations and breakdowns, in the future, the range of work performed will be expanded – it will also include video analytics, a vibration damping system.

    The laboratory will include students and postgraduates of the Faculty of Information Technology and the Faculty of Mechanics and Mathematics of NSU, as well as employees of partner companies – FAU “SibNIA named after S.A. Chaplygin” FAU (part of the FGBU “Research Center “Institute named after N.E. Zhukovsky”) and JSC TsNIAP “AVIASPETSTEST”, who will act as mentors – a total of 13 people. The head of the laboratory will be Vladimir Berikov, Doctor of Technical Sciences, Senior Researcher at the Institute of Mathematics named after S.L. Sobolev and a lecturer at the Faculty of Information Technology of NSU.

    The laboratory is fully focused on solving applied problems arising during bench tests of aircraft equipment, including the development and creation of modules of the Intelligent Bench Test System for Aircraft Equipment (ISIA) with elements of artificial intelligence; an intelligent operator workstation with connected archives and libraries; intelligent simulators, as well as vibration isolation systems for high-precision instruments and systems.

    — During bench tests of equipment, we will use sensors to collect data streams in our system, use archives and libraries, and analyze all the information received using artificial intelligence systems. Thanks to this, we will be able to predict for what time and what deformations and breakdowns are possible. In this way, we will preserve individual aircraft structures intact, solving the main problem of ground tests, when expensive structures become unusable, — noted Alexander Sychev, Deputy Director of the Center for Interaction with Government Authorities and Industrial Partners of NSU.

    — The organization of a joint laboratory will give a new impetus to the development of methods for testing aircraft structures. I am confident that cooperation with NSU will allow us to significantly advance in the study of the strength of aircraft structures and the subsequent improvement of the test bench base, — commented Alexander Laznenko, head of the research department for fatigue and static strength of aircraft structures at SibNIA.

    At the first stage, the task is to test the capabilities of the intelligent system when testing the main load-bearing parts, and then gradually move on to all parts and units of aircraft structures. What is important is that the integrity of the stand itself will also be monitored, which is also subject to significant loads during testing and may fail.

    The use of artificial intelligence systems and neural networks will not only significantly optimize testing costs, but also reduce the testing time of individual aircraft parts, which can now reach thousands of hours.

    The new laboratory will start operating at NSU this year, and in 2025, a specially equipped site will appear at SibNIA, which will allow NSU students and postgraduates to carry out work directly at the enterprise.

    Another promising area for cooperation between the two organizations is unmanned aircraft systems. Given the developments in this area at NSU and SibNIA, it is planned to create a joint Laboratory of Autonomous and Unmanned Aircraft Systems in the future. In the future, the two laboratories will be combined into the Center for Intelligent Aircraft Systems.

    The Siberian Aviation Research Institute named after S. A. Chaplygin and Novosibirsk State University have been cooperating since 2022, when they began holding a joint seminar on Industrial Mathematics on a regular basis. In 2023, SibNIA and NSU signed an agreement, according to which practical training for students in the field of Computer Systems and Complexes will be organized at the research institute. In August 2024, the two organizations announced plans to create a digital platform for bench testing of aircraft equipment with elements of artificial intelligence within the next two years.

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    MIL OSI Russia News –

  • MIL-OSI: Glen Burnie Bancorp Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    GLEN BURNIE, Md., Oct. 31, 2024 (GLOBE NEWSWIRE) — Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $129,000, or $0.04 per basic and diluted common share for the three-month period ended September 30, 2024, compared to net income of $551,000, or $0.19 per basic and diluted common share for the three-month period ended September 30, 2023.   Bancorp reported a net loss of $72,000, or $0.02 per basic and diluted common share for the nine-month period ended September 30, 2024, compared to net income of $1.3 million, or $0.44 per basic and diluted common share for the same period in 2023. On September 30, 2024, Bancorp had total assets of $368.4 million. Bancorp is the oldest independent commercial bank in Anne Arundel County.

    “The Company’s positive earnings results for the third quarter 2024 reflect efficient and productive operations, a focus on disciplined loan growth, and balance sheet management. However, our financial performance for the year 2024 is disappointing and represents the challenges inherent in navigating the interest rate environment of the last several years. The Company is focused on generating additional interest earning assets at higher current market and rebuilding our base of core, low-cost deposits,” said Mark C. Hanna, President, and Chief Executive Officer. “Despite the challenges of declining net interest income, the Company’s financial strength is reflected in a strong capital position, available liquidity and prudent expense management. Although interest expense increased significantly in year over year comparisons, prompt adjustments to rates on loans contributed to expanded interest income and higher yields on earning assets that partially offset higher interest expense and helped mitigate margin compression.”

    In closing, Mr. Hanna added, “To invest in strategic opportunities that will benefit the long-term performance of the Bank, the difficult decision was made to change the longstanding practice of approving quarterly cash dividends for shareholders. As the Bank evaluates our next 75 years, we are committed to our business model and the economic strength of the communities we serve. To better serve the evolving needs of our clients, there is a need to reinvest in our people, technology, products and facilities. Based on our capital levels, conservative underwriting policies, on-and off-balance sheet liquidity, strong loan diversification, and current economic conditions within the markets we serve, management expects to navigate the uncertainties and remain well-capitalized. We will continue to execute on our strategic priorities to generate organic loan and deposit growth.”

    Highlights for the First Nine Months of 2024

    Despite growth in loans and deposits in the first nine months of the year, net interest income decreased $1.1 million, or 11.54% to $8.2 million through September 30, 2024, as compared to $9.2 million during the same period of 2023. The decrease resulted primarily from a $2.4 million increase in interest expense. The increase in interest on deposits was driven by the higher cost of money market deposit balances. The increase in interest on borrowings was driven by a $25.6 million increase in the average balance of borrowed funds due to the elevated level of deposit runoff that occurred in 2023.

    Due to growth of $30.7 million in the loan portfolio and a 0.11% increase in the current expected credit loss (“CECL”) percentage, the Company added $591,000 to its allowance for credit losses on loans in the first nine months of 2024, as compared to a $68,000 release of allowance for credit losses in the first nine months of 2023. While this provision negatively impacted earnings in the first half of the year, the growth in loan balances should generate additional interest revenue in future periods. The Company expects that its strong liquidity and capital positions, along with the Bank’s total regulatory capital to risk weighted assets of 16.72% on September 30, 2024, as compared to 18.10% for the same period of 2023, will provide ample capacity for future growth.

    Return on average assets for the three-month period ended September 30, 2024, was 0.14%, as compared to 0.61% for the three-month period ended September 30, 2023. Return on average equity for the three-month period ended September 30, 2024, was 2.63%, as compared to 12.47% for the three-month period ended September 30, 2023. Lower net income and a higher average asset balance primarily drove the lower return on average assets, while lower net income and a higher average equity balance primarily drove the lower return on average equity.

    The cost of funds increased 0.86% when comparing September 30, 2024, to the same period in 2023, rising from 0.46% to 1.32%. This 0.86% increase was primarily due to the change in the funding mix between lower cost interest-bearing and noninterest-bearing deposit balances and higher cost borrowed funds and money market deposit balances.

    On September 30, 2024, the Bank remained above all “well-capitalized” regulatory requirement levels. The Bank’s tier 1 risk-based capital ratio was approximately 15.47% on September 30, 2024, as compared to 17.37% on December 31, 2023. Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the bond portfolio.

    Balance Sheet Review

    Total assets were $368.4 million on September 30, 2024, an increase of $13.0 million or 3.66%, from $355.4 million on September 30, 2023.   Investment securities decreased by $22.7 million or 15.94% to $120.0 million as of September 30, 2024, compared to $142.7 million for the same period of 2023.   Loans, net of deferred fees and costs, were $207.0 million on September 30, 2024, an increase of $32.2 million or 18.41%, from $174.8 million on September 30, 2023. Cash and cash equivalents increased $7.9 million or 54.68%, from September 30, 2023 to September 30, 2024.

    Total deposits were $314.2 million on September 30, 2024, a decrease of $600,000 or 0.18%, from $314.8 million on September 30, 2023. Despite the year-over-year decline, deposit balances have increased $14.2 million or 4.73% from December 31, 2023. Noninterest-bearing deposits were $115.9 million on September 30, 2024, a decrease of $11.0 million or 8.64%, from $126.9 million on September 30, 2023.   Interest-bearing deposits were $198.3 million on September 30, 2024, an increase of $10.4 million or 5.53%, from $187.9 million on September 30, 2023. Total borrowings were $30.0 million on September 30, 2024, an increase of $5.0 million or 20.00%, from $25.0 million on September 30, 2023.  
    As of September 30, 2024, total stockholders’ equity was $21.2 million (5.74% of total assets), equivalent to a book value of $7.29 per common share. Total stockholders’ equity on September 30, 2023, was $13.2 million (3.70% of total assets), equivalent to a book value of $4.57 per common share.

    Asset quality, which has trended within a narrow range over the past several years, has remained sound as of September 30, 2024. Nonperforming assets, which consist of nonaccrual loans, restructured loans to borrowers with financial difficulty, accruing loans past due 90 days or more, and other real estate owned (“OREO”), represented 0.08% of total assets on September 30, 2024, compared to 0.15% on December 31, 2023, demonstrating positive asset quality trends across the portfolio. The allowance for credit losses on loans was $2.75 million, or 1.33% of total loans, as of September 30, 2024, compared to $2.16 million, or 1.22% of total loans, as of December 31, 2023. The allowance for credit losses for unfunded commitments was $597,000 as of September 30, 2024, compared to $473,000 as of December 31, 2023.

    Review of Financial Results

    For the three-month periods ended September 30, 2024, and 2023

    Net income for the three-month period ended September 30, 2024, was $129,000, as compared to net income of $551,000 for the three-month period ended September 30, 2023. The decrease is primarily the result of a $614,000 increase in interest expense on deposits and a $126,000 increase in interest expense on short-term borrowings, a $287,000 decrease in interest and dividends on securities, a $170,000 increase in the provision for credit losses on loans and a $197,000 increase in noninterest expenses. These decreases were partially offset by an increase of $763,000 in loan interest income and fees, and a $133,000 increase in interest on deposits with banks. The Company’s need to defend its deposit base as well as grow interest-earning asset balances necessitated a strategic change in direction that resulted in the increased interest expense.

    Net interest income for the three-month period ended September 30, 2024, totaled $2.8 million, a decrease of $131,000 from the three-month period ended September 30, 2023. The decrease in net interest income was due to a $740,000 increase in the cost of interest-bearing deposits and borrowings driven by a $17.3 million increase in the average balance of interest-bearing funds and a $16.6 million decrease in the average balance of noninterest-bearing deposits. The higher expenses were partially offset by a $609,000 increase in total interest income due to a 0.66% increase in the yield of interest earning assets.

    Net interest margin for the three-month period ended September 30, 2024, was 3.06%, compared to 3.21% for the same period of 2023.   Higher average interest-bearing funds, lower average noninterest-bearing funds, and higher cost of funds, partially offset by higher average yields and balances on interest-earning assets were the primary drivers of year-over-year results. The average balance of interest-bearing funds and noninterest-bearing funds increased $17.3 million and decreased $16.6 million, respectively, and the cost of funds increased 0.86%, when comparing the three-month periods ending September 30, 2023, and 2024. The average balance of interest-earning assets increased $0.8 million while the yield increased 0.66% from 3.64% to 4.30%, when comparing the three-month periods ending September 30, 2023, and 2024, respectively.

    The average balance of interest-bearing deposits in banks and investment securities decreased $25.3 million from $188.2 million to $162.9 million for the third quarter of 2024, compared to the same period of 2023, while the yield remained unchanged during that same period.

    Average loan balances increased $26.1 million to $203.3 million for the three-month period ended September 30, 2024, compared to $177.2 million for the same period of 2023, while the yield increased 0.89% from 4.80% to 5.69% during that same period. The increase in loan yields for the third quarter of 2024 reflected the runoff of the lower yielding loans and the origination of higher yielding loans in the current higher rate environment.

    The provision of allowance for credit loss on loans for the three-month period ended September 30, 2024, was $78,000, compared to a release of allowance for credit loss of $92,000 for the same period of 2023. The $170,000 increase in the provision for the three-month period ended September 30, 2024, when compared to the three-month period ended September 30, 2023, primarily reflects a $32.0 million increase in the reservable balance of the loan portfolio and a 0.13% increase in the current expected credit loss percentage.

    For the three-month period ended September 30, 2024, noninterest expense was $3.0 million, compared to $2.8 million for the three-month period ended September 30, 2023, an increase of $200,000. The primary contributors to the $200,000 increase, when compared to the three-month period ended September 30, 2023, were increases in legal, accounting, and other professional fees, data processing and item processing services, advertising and marketing related expenses, and other expenses (primarily allowance for unfunded commitments), offset by decreases in salary and employee benefits.

    For the nine-month periods ended September 30, 2024, and 2023

    Net loss for the nine-month period ended September 30, 2024, was $72,000, as compared to net income of $1.3 million for the nine-month period ended September 30, 2023. The decrease is primarily the result of a $460,000 decrease in interest and dividends on securities, a $1.0 million increase in interest expense on short-term borrowings, a $1.4 million increase in interest expense on deposits and a $780,000 increase in the provision for credit losses on loans, partially offset by an increase of $1.3 million in loan interest income and fees, a $535,000 increase in interest on deposits with banks and a $569,000 decrease in the provision for income taxes.

    Net interest income for the nine-month period ended September 30, 2024, totaled $8.2 million, a decrease of $1.1 million from the nine-month period ended September 30, 2023. The decrease in net interest income was due to a $2.4 million increase in the cost of interest-bearing deposits and borrowings driven by a $17.3 million increase in the average balance of interest-bearing funds and a $20.0 million decrease in the average balance of noninterest-bearing deposits. The higher expenses were partially offset by a $1.3 million increase in total interest income due to a 0.51% increase in the yield of interest earning assets.

    Net interest margin for the nine-month period ended September 30, 2024, was 2.98%, compared to 3.35% for the same period of 2023. Higher average interest-bearing funds, lower average noninterest-bearing funds, and higher cost of funds, partially offset by higher average yields on interest-earning assets, were the primary drivers of year-over-year results. The average balance of interest-bearing funds and noninterest-bearing funds increased $17.3 million and decreased $20.0 million, respectively, and the cost of funds increased 0.94%, when comparing the nine-month periods ending September 30, 2023, and 2024. The average balance of interest-earning assets decreased $2.7 million, while the yield increased 0.51% from 3.59% to 4.10%, when comparing the nine-month periods ending September 30, 2023, and 2024, respectively.

    The average balance of interest-bearing deposits in banks and investment securities decreased $10.1 million from $187.9 million to $177.8 million for the first nine months of 2024, compared to the same period of 2023, while the yield increased 0.20% from 2.51% to 2.71% during that same period. The increase in yields is attributed to the higher interest rate environment and its positive impact on cash balances and investment yields.

    Average loan balances increased $7.4 million to $188.6 million for the nine-month period ended September 30, 2024, compared to $181.2 million for the same period of 2023, while the yield increased 0.72% from 4.70% to 5.42% during that same period. The increase in loan yields for the first nine months of 2024 reflected the runoff of the lower yielding loans and origination of higher yielding loans in the current higher rate environment.

    The Company recorded a provision of allowance for credit loss on loans of $773,000 for the nine-month period ending September 30, 2024, compared to a release of allowance for credit loss of $7,000 for the same period in 2023. The $780,000 increase in the provision in 2024, compared to 2023, primarily reflects a $32.0 million increase in the reservable balance of the loan portfolio and a 0.13% increase in the current expected credit loss percentage.   As a result, the allowance for credit loss on loans was $2.75 million on September 30, 2024, representing 1.33% of total loans, compared to $2.09 million, or 1.20% of total loans on September 30, 2023.

    For the nine-month period ended September 30, 2024, noninterest expense was $8.8 million, compared to $8.7 million for the nine-month period ended September 30, 2023. The primary contributors when comparing to the nine-month period ended September 30, 2023, were increases in occupancy and equipment expenses, legal, accounting, and other professional fees, advertising and marketing related expenses, and other expenses (primarily allowance for unfunded commitments), offset by decreases in salary and employee benefits costs.

    Glen Burnie Bancorp Information

    Glen Burnie Bancorp is a bank holding company headquartered in Glen Burnie, Maryland. Founded in 1949, The Bank of Glen Burnie® is a locally owned community bank with 8 branch offices serving Anne Arundel County. The Bank is engaged in the commercial and retail banking business including the acceptance of demand and time deposits, and the origination of loans to individuals, associations, partnerships, and corporations. The Bank’s real estate financing consists of residential first and second mortgage loans, home equity lines of credit and commercial mortgage loans. The Bank also originates automobile loans through arrangements with local automobile dealers. Additional information is available at www.thebankofglenburnie.com.

    Forward-Looking Statements

    The statements contained herein that are not historical financial information may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, which could cause the company’s actual results in the future to differ materially from its historical results and those presently anticipated or projected. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. For a more complete discussion of these and other risk factors, please see the company’s reports filed with the Securities and Exchange Commission.

    For further information contact:

    Jeffrey D. Harris, Chief Financial Officer
    410-768-8883
    jdharris@bogb.net
    106 Padfield Blvd
    Glen Burnie, MD 21061

    GLEN BURNIE BANCORP AND SUBSIDIARY
    CONSOLIDATED BALANCE SHEETS
    (dollars in thousands)
                   
      September 30,   June 30,   December 31,   September 30,
        2024       2024       2023     2023  
      (unaudited)   (unaudited)   (audited)   (unaudited)
    ASSETS              
    Cash and due from banks $ 2,255     $ 1,804     $ 1,940     2,380  
    Interest-bearing deposits in other financial institutions   20,207       14,982       13,301     12,142  
    Total Cash and Cash Equivalents   22,462       16,786       15,241     14,522  
                   
    Investment securities available for sale, at fair value   119,958       117,180       139,427     142,705  
    Restricted equity securities, at cost   246       246       1,217     980  
                   
    Loans, net of deferred fees and costs   206,975       201,500       176,307     174,796  
    Less: Allowance for credit losses(1)   (2,748 )     (2,625 )     (2,157 )   (2,094 )
    Loans, net   204,227       198,875       174,150     172,702  
                   
    Premises and equipment, net   2,723       2,833       3,046     3,177  
    Bank owned life insurance   8,789       8,744       8,657     8,614  
    Deferred tax assets, net   6,879       8,329       7,897     10,187  
    Accrued interest receivable   1,478       1,358       1,192     1,373  
    Accrued taxes receivable   497       552       121     189  
    Prepaid expenses   486       355       475     538  
    Other assets   614       458       390     377  
    Total Assets $ 368,359     $ 355,716     $ 351,813     355,364  
                   
    LIABILITIES              
    Noninterest-bearing deposits $ 115,938     $ 109,631     $ 116,922     126,898  
    Interest-bearing deposits   198,335       196,235       183,145     187,943  
    Total Deposits   314,273       305,866       300,067     314,841  
                   
    Short-term borrowings   30,000       30,000       30,000     25,000  
    Defined pension liability   329       328       324     322  
    Accrued expenses and other liabilities   2,597       2,051       2,097     2,040  
    Total Liabilities   347,199       338,245       332,488     342,203  
                                 
    STOCKHOLDERS’ EQUITY                            
    Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,900,681; 2,893,648; 2,882,627; 2,877,084 shares as of September 30, 2024, June 30, 2024, December 31, 2023, and September 30,2023 respectively.   2,901       2,894       2,883     2,877  
    Additional paid-in capital   11,037       11,014       10,964     10,940  
    Retained earnings   22,921       23,081       23,859     23,980  
    Accumulated other comprehensive loss   (15,699 )     (19,518 )     (18,381 )   (24,636 )
    Total Stockholders’ Equity   21,160       17,471       19,325     13,161  
    Total Liabilities and Stockholders’ Equity $ 368,359     $ 355,716     $ 351,813     355,364  
                   
    GLEN BURNIE BANCORP AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF INCOME
    (dollars in thousands, except per share amounts)
    (unaudited)
                   
        Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
    Interest income              
    Interest and fees on loans $ 2,908     $ 2,145     $ 7,648     $ 6,368  
    Interest and dividends on securities   814       1,101       2,605       3,065  
    Interest on deposits with banks and federal funds sold   237       104       1,004       469  
    Total Interest Income   3,959       3,350       11,257       9,902  
                   
    Interest expense              
    Interest on deposits   730       116       1,716       337  
    Interest on short-term borrowings   408       282       1,363       320  
    Total Interest Expense   1,138       398       3,079       657  
                   
    Net Interest Income   2,821       2,952       8,178       9,245  
    Provision (release) of credit loss allowance   78       (92 )     773       (7 )
    Net interest income after provision of credit loss provision   2,743       3,044       7,405       9,252  
                   
    Noninterest income              
    Service charges on deposit accounts   36       40       109       120  
    Other fees and commissions   273       233       584       560  
    Income on life insurance   45       42       132       120  
    Total Noninterest Income   354       315       825       800  
                   
    Noninterest expenses              
    Salary and employee benefits   1,654       1,691       4,872       5,089  
    Occupancy and equipment expenses   327       329       996       955  
    Legal, accounting and other professional fees   267       194       769       692  
    Data processing and item processing services   263       206       755       755  
    FDIC insurance costs   41       40       119       122  
    Advertising and marketing related expenses   40       26       88       72  
    Loan collection costs   5       10       11       13  
    Telephone costs   41       38       110       113  
    Other expenses   380       287       1,052       880  
    Total Noninterest Expenses   3,018       2,821       8,772       8,691  
                   
    Income (loss) before income taxes   79       538       (542 )     1,361  
    Income tax (benefit) expense   (50 )     (13 )     (470 )     99  
                   
    Net income (loss) $ 129     $ 551     $ (72 )   $ 1,262  
                   
    Basic and diluted net income (loss) per common share $ 0.04     $ 0.19     $ (0.02 )   $ 0.44  
                   
    GLEN BURNIE BANCORP AND SUBSIDIARY
    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
    For the nine months ended September 30, 2024 and 2023
    (dollars in thousands)
    (unaudited)
                       
                  Accumulated    
          Additional       Other   Total
      Common   Paid-in   Retained   Comprehensive   Stockholders’
      Stock   Capital   Earnings   Loss   Equity
    Balance, December 31, 2022 $ 2,865   $ 10,862   $ 23,579     $ (21,252 )   $ 16,054  
                       
    Net income   –     –     1,262       –       1,262  
    Cash dividends, $0.30 per share   –     –     (861 )     –       (861 )
    Dividends reinvested under                  
       dividend reinvestment plan   12     78     –       –       90  
    Other comprehensive loss   –     –     –       (3,384 )     (3,384 )
    Balance, September 30, 2023 $ 2,877   $ 10,940   $ 23,980     $ (24,636 )   $ 13,161  
                       
                       
                  Accumulated    
          Additional       Other   Total
      Common   Paid-in   Retained   Comprehensive   Stockholders’
      Stock   Capital   Earnings   (Loss) Income   Equity
    Balance, December 31, 2023 $ 2,883   $ 10,964   $ 23,859     $ (18,381 )   $ 19,325  
                       
    Net loss   –     –     (72 )     –       (72 )
    Cash dividends, $0.30 per share   –     –     (866 )     –       (866 )
    Dividends reinvested under                  
       dividend reinvestment plan   18     73     –       –       91  
    Other comprehensive income   –     –     –       2,682       2,682  
    Balance, September 30, 2024 $ 2,901   $ 11,037   $ 22,921     $ (15,699 )   $ 21,160  
                       
    THE BANK OF GLEN BURNIE
    CAPITAL RATIOS
    (dollars in thousands)
    (unaudited)
     
                  To Be Well
                  Capitalized Under
            To Be Considered   Prompt Corrective
            Adequately Capitalized Action Provisions
      Amount Ratio   Amount Ratio   Amount Ratio
    As of September 30, 2024:                
    Common Equity Tier 1 Capital $ 36,755 15.47 %   $ 10,691 4.50 %   $ 15,443 6.50 %
    Total Risk-Based Capital $ 39,729 16.72 %   $ 19,006 8.00 %   $ 23,758 10.00 %
    Tier 1 Risk-Based Capital $ 36,755 15.47 %   $ 14,255 6.00 %   $ 19,006 8.00 %
    Tier 1 Leverage $ 36,755 10.11 %   $ 14,539 4.00 %   $ 18,173 5.00 %
                     
    As of June 30, 2024:                
    Common Equity Tier 1 Capital $ 36,896 15.59 %   $ 10,652 4.50 %   $ 15,386 6.50 %
    Total Risk-Based Capital $ 39,857 16.84 %   $ 18,937 8.00 %   $ 23,671 10.00 %
    Tier 1 Risk-Based Capital $ 36,896 15.59 %   $ 14,202 6.00 %   $ 18,937 8.00 %
    Tier 1 Leverage $ 36,896 10.10 %   $ 14,617 4.00 %   $ 18,271 5.00 %
                     
    As of December 31, 2023:                
    Common Equity Tier 1 Capital $ 37,975 17.37 %   $ 9,840 4.50 %   $ 14,213 6.50 %
    Total Risk-Based Capital $ 40,237 18.40 %   $ 17,493 8.00 %   $ 21,867 10.00 %
    Tier 1 Risk-Based Capital $ 37,975 17.37 %   $ 13,120 6.00 %   $ 17,493 8.00 %
    Tier 1 Leverage $ 37,975 10.76 %   $ 14,113 4.00 %   $ 17,641 5.00 %
                     
    As of September 30, 2023:                
    Common Equity Tier 1 Capital $ 38,053 17.12 %   $ 10,004 4.50 %   $ 14,450 6.50 %
    Total Risk-Based Capital $ 40,227 18.10 %   $ 17,785 8.00 %   $ 22,231 10.00 %
    Tier 1 Risk-Based Capital $ 38,053 17.12 %   $ 13,338 6.00 %   $ 17,785 8.00 %
    Tier 1 Leverage $ 38,053 10.56 %   $ 14,420 4.00 %   $ 18,026 5.00 %
                     
    GLEN BURNIE BANCORP AND SUBSIDIARY
    SELECTED FINANCIAL DATA
    (dollars in thousands, except per share amounts)
                   
      Three Months Ended   Year Ended
      September 30, June 30,   September 30,   December 31,
        2024       2024       2023       2023  
      (unaudited)   (unaudited)   (unaudited)   (unaudited)
                   
    Financial Data              
    Assets $ 368,359     $ 355,716     $ 355,364     $ 351,813  
    Investment securities   119,958       117,180       142,705       139,427  
    Loans, (net of deferred fees & costs)   206,975       201,500       174,796       176,307  
    Allowance for loan losses   2,748       2,625       2,094       2,157  
    Deposits   314,273       305,866       314,841       300,067  
    Borrowings   30,000       30,000       25,000       30,000  
    Stockholders’ equity   21,160       17,471       13,161       19,325  
    Net income (loss)   129       (204 )     551       1,429  
                   
    Average Balances              
    Assets $ 364,127     $ 366,071     $ 360,767     $ 361,731  
    Investment securities   142,972       148,690       177,856       173,902  
    Loans, (net of deferred fees & costs)   203,316       186,650       177,223       179,790  
    Deposits   312,019       307,427       321,318       330,095  
    Borrowings   30,001       38,891       19,946       12,580  
    Stockholders’ equity   19,559       17,369       17,548       17,105  
                   
    Performance Ratios              
    Annualized return on average assets   0.14 %     -0.22 %     0.61 %     0.40 %
    Annualized return on average equity   2.63 %     -4.72 %     12.47 %     8.35 %
    Net interest margin   3.06 %     3.02 %     3.21 %     3.31 %
    Dividend payout ratio   224 %     -142 %     52 %     80 %
    Book value per share $ 7.29     $ 6.04     $ 4.57     $ 6.70  
    Basic and diluted net income per share   0.04       (0.07 )     0.19       0.50  
    Cash dividends declared per share   0.10       0.10       0.10       0.40  
    Basic and diluted weighted average shares outstanding   2,897,929       2,891,203       2,875,329       2,873,500  
                   
    Asset Quality Ratios              
    Allowance for loan losses to loans   1.33 %     1.30 %     1.20 %     1.22 %
    Nonperforming loans to avg. loans   0.14 %     0.17 %     0.33 %     0.29 %
    Allowance for loan losses to nonaccrual & 90+ past due loans   937.5 %     827.1 %     359.4 %     409.3 %
    Net charge-offs annualize to avg. loans   -0.09 %     -0.14 %     0.09 %     0.06 %
                   
    Capital Ratios              
    Common Equity Tier 1 Capital   15.47 %     15.59 %     17.12 %     17.37 %
    Tier 1 Risk-based Capital Ratio   15.47 %     15.59 %     17.12 %     17.37 %
    Leverage Ratio   10.11 %     10.10 %     10.56 %     10.76 %
    Total Risk-Based Capital Ratio   16.72 %     16.84 %     18.10 %     18.40 %

    The MIL Network –

  • MIL-OSI: Q3 & 9 MONTHS 2024 RESULTS

    Source: GlobeNewswire (MIL-OSI)

    Paris (France), October 31st, 2024, 17h45 CET

    Q3 & 9 MONTHS 2024 RESULTS

    DELIVERING ON CASH GENERATION AND FINANCIAL ROADMAP

    ON TRACK TO HIT OUR FULL YEAR TARGET

      Q3 9M1
    Revenue2 $246m $778m (-3%)
    Adjusted EBITDA2 $98m $298m (+7%)
    Net Cash-Flow $10m $34m (vs -$15m in 9M 2023)

    Sophie Zurquiyah, Chief Executive Officer of Viridien, said:

    “Our results since the start of the year demonstrate the strength of our strategic vision, with technology leadership, new business growth, and cash flow all showing significant progress.

    Geoscience was particularly strong this quarter, leveraging its clear differentiation, best-in class imaging technology and HPC computing power to achieve a record high order book. In Earth Data, the Laconia project, using our most advanced technology, saw increased prefunding and is continuing to progress well.

    Sensing & Monitoring is actively implementing its adaption plan and is on track to achieve in 2025 the expected outcomes in cost reduction and operational flexibility to improve performance across the industry cycles.

    Lastly, we continue to address our financial roadmap with the implementation of the bond buyback program and looking forward, reaffirm our full-year targets”.

    Third Quarter Highlights2

    • Group2
      • IFRS Revenue, EBITDA and Net Income of respectively $219 million, $71 million, $(10) million.
      • Overall group revenue decline in absence of mega crew in Sensing & Monitoring (SMO, revenue down 50%) compared to Q3 2023. Stable DDE revenue, with very strong momentum at Geoscience (revenue + 32% and order intake +91%).
      • Group adjusted EBITDA of $98M, including -$12M penalty fees from vessel commitment. DDE Adjusted EBITDA of $108 million, up 5% thanks to strong Geoscience performance. SMO adjusted EBITDA of $1M (vs $12M).  
    • Net Cash flow of $10 million, including -$18 million contractual fees from vessel commitment.
    • Implementation of the bond buy back program. $25M already bought on the $30M 2024 program as of October 31 (o.w. $12M bought and cancelled as of September 30).
    • Liquidity at $442 million (including $100 million undrawn RCF).
    • Digital, Data and Energy Transition (DDE)
      • Revenue $187 million, up 1%: strong revenue growth at Geoscience offset by lower level of aftersale at Earth Data.
      • Adjusted EBITDA $108 million, up 5%: profitability impacted by -$12 million in penalty fees from vessel commitments (vs -$20 million during Q3 2003).
      • Geoscience
        • Revenue at $103 million (+32%).
        • Geoscience performance continues to be driven by technology leadership. Order intake (up 91%) benefits from best in class imaging technology, new UK HPC hub and increased activity in the Middle East.
        • The new businesses confirm positive momentum, both in CCUS with the release of the latest phase of Gulf of Mexico Carbon Storage Study to support upcoming lease rounds and in Minerals & Mining with the award of a sensing program in Oman, to identify, map and rank mineralization prospectivity potential.
      • Earth Data
        • Revenue: $83 million (-22%).
        • Prefunding revenue at $58 million (+4%). First contribution of the Laconia project in the Gulf of Mexico. Weaker after-sales in Q3 (down 50% at $26 million) with unfavorable cut offs.
        • New businesses: revenue from the Norwegian survey for Carbon storage leading to the reprocessing of legacy data in the area.
    • Sensing and Monitoring (SMO)
      • Revenue at $59 million, down 51% across land and marine products, following delivery of the “mega crew” systems in 2023.
      • Adjusted EBITDA at $1 million (vs $12M).
      • Transformation plan on track to achieve the expected cost reduction and operational flexibility.
      • New businesses representing 17% of revenue. Delivery of land seismic nodes for large-scale seismic surveys planned in urban areas to target energy resources, including geothermal.
    • 2024 Financial objectives
      • The Group reiterates its 2024 financial objectives and confirms its 2024-2025 financial roadmap.
        • Revenue expected to be in line with 2023
        • EBITDA to be positively impacted by business mix
        • Earth Data cash Capex expected at $230-250M
        • Net Cash Flow to reach similar level as 2023
    • Q3 2024 Conference call
      • The press release and the presentation are available on our website www.viridiengroup.com at 5:45 pm (CET)
      • An English language analysts conference call is scheduled today at 6.00 pm (CET)

    Participants should register for the call here to receive a dial-in number and code or participate in the live webcast from here.

    A replay of the conference call will be made available the day after for a period of 12 months in audio format on the Company’s website.

    The Board of Directors met on October 31, 2024 and approved the consolidated financial statements ending September 30, 2024.

    About Viridien:

    Viridien (www.viridiengroup.com) is an advanced technology, digital and Earth data company that pushes the boundaries of science for a more prosperous and sustainable future. With our ingenuity, drive and deep curiosity we discover new insights, innovations, and solutions that efficiently and responsibly resolve complex natural resource, digital, energy transition and infrastructure challenges. Viridien employs around 3,500 people worldwide and is listed as VIRI on the Euronext Paris SA (ISIN until July 30: FR0013181864 and ISIN as from July 31: FR001400PVN6).

    Contact:

     VP Corporate Finance

    Jean-Baptiste Roussille
    jean-baptiste.roussille@viridiengroup.com

    Q3 2024 – Financial Results

     CONSOLIDATED FINANCIAL STATEMENTS – September 30th, 2024

    Unaudited Interim Consolidated statement of operations – Year-To-Date

        Nine months ended September 30,
    (In millions of US$, except per share data) Notes 2024 2023
    Operating revenues   784.8 810.4
    Other income from ordinary activities   0.1 0.2
    Total income from ordinary activities   784.9 810.6
    Cost of operations   (587.1) (578.0)
    Gross profit   197.8 232.6
    Research and development expenses – net   (15.2) (20.5)
    Marketing and selling expenses   (28.6) (26.6)
    General and administrative expenses   (55.9) (54.2)
    Other revenues (expenses) – net 8 (3.6) (0.9)
    Operating income (loss)   94.6 130.4
    Cost of financial debt – gross   (82.3) (79.5)
    Income provided by cash and cash equivalents   8.7 4.0
    Cost of financial debt, net   (73.6) (75.5)
    Other financial income (loss) 9 (0.9) (1.6)
    Income (loss) before incomes taxes and share of income (loss) from companies accounted for under the equity method   20.1 53.3
    Income taxes   (14.2) (24.6)
    Net income (loss) before share of income (loss) from companies accounted for under the equity method   6.0 28.7
    Net income (loss) from companies accounted for under the equity method   0.9 0.5
    Net income (loss) from continuing operations   6.9 29.2
    Net income (loss) from discontinued operations 3 14.7 2.3
    Consolidated net income (loss)   21.6 31.5
    Attributable to :      
    Owners of Viridien S.A $ 21.2 28.0
    Non-controlling interests $ 0.4 3.5
    Net income (loss) per share      
    Basic $ 2.97 0.04
    Diluted $ 2.95 0.04
    Net income (loss) from continuing operations per share      
    Basic $ 0.91 0.04
    Diluted $ 0.91 0.04
    Net income (loss) from discontinued operations per share (a)      
    Basic $ 2.06 –
    Diluted $ 2.05 –

    (a)   Earning per share is presented as nil being less than US$0.01 at September 30,2023.

    See the notes to the Unaudited Interim Consolidated Financial Statements

    Unaudited Interim Consolidated statement of comprehensive income (loss) – Year-To-Date

        Nine months ended September 30,
    (In millions of US$) Notes 2024 (a) 2023 (a)
    Net income (loss) from statements of operations   21.6 31.5
    Net gain (loss) on cash flow hedges   0.2 0.2
    Variation in translation adjustments   3.3 10.5
    Net other comprehensive income (loss) to be reclassified in profit (loss) in subsequent period (1)   3.5 10.7
    Net gain (loss) on actuarial changes on pension plan   0.4 (0.7)
    Net other comprehensive income (loss) not to be reclassified in profit (loss) in subsequent period (2)   0.4 (0.7)
    Total other comprehensive income (loss) for the period. net of taxes (1) + (2)   3.9 10.0
    Total comprehensive income (loss) for the period   25.5 41.5
    Attributable to:   –  
    Owners of Viridien S.A.   24.7 39.2
    Non-controlling interests   0.8 2.3

    (a)  Including other comprehensive income related to the discontinued operations.

    Unaudited Interim Consolidated statement of financial position

    (In millions of US$) Notes September 30,
    2023    		 December 31, 2023
    ASSETS      
    Cash and cash equivalents   341.7 327.0
    Trade accounts and notes receivable, net   287.3 310.9
    Inventories and work-in-progress, net   207.1 212.9
    Income tax assets   37.0 30.8
    Other current assets, net   67.4 92.1
    Total current assets   940.5 973.7
    Deferred tax assets   35.5 29.9
    Other non-current assets, net   7.8 6.8
    Investments and other financial assets, net   25.3 22.7
    Investments in companies under the equity method   2.6 2.2
    Property, plant and equipment, net 4 230.7 206.1
    Intangible assets, net   611.5 579.7
    Goodwill, net   1 098.1 1 095.5
    Total non-current assets   2 011.4 1 942.9
    TOTAL ASSETS   2 951.9 2 916.6
    LIABILITIES AND EQUITY      
    Financial debt – current portion 5 79.8 58.0
    Trade accounts and notes payables   94.1 86.4
    Accrued payroll costs   87.9 89.1
    Income taxes payable   21.2 12.5
    Advance billings to customers   19.1 24.0
    Provisions — current portion   8.1 8.7
    Other current financial liabilities   5.9 21.3
    Other current liabilities   233.6 250.3
    Total current liabilities   549.8 550.3
    Deferred tax liabilities   22.1 24.3
    Provisions — non-current portion   32.8 30.1
    Financial debt – non-current portion 5 1 265.1 1 242.8
    Other non-current financial liabilities   – 0.5
    Other non-current liabilities   1.7 4.3
    Total non-current liabilities   1 321.7 1 302.0
    Common stock: 11,212,215 shares authorized and 7,161,465 shares with a €1.00 nominal value outstanding at September 30, 2024   8.7 8.7
    Additional paid-in capital   118.7 118.7
    Retained earnings   1 004.0 980.4
    Other Reserves   19.8 27.3
    Treasury shares   (20.1) (20.1)
    Cumulative income and expense recognized directly in equity   (1.2) (1.4)
    Cumulative translation adjustment   (87.9) (90.8)
    Equity attributable to owners of Viridien S.A.   1 042.0 1 022.8
    Non-controlling interests   38.5 41.5
    Total equity   1 080.5 1 064.3
    TOTAL LIABILITIES AND EQUITY   2 951.9 2 916.6

    See the notes to the Unaudited Interim Consolidated Financial Statements

    Unaudited Interim Consolidated statement of cash flows

        Nine months ended September 30,
    (In millions of US$) Notes 2024 2023
    OPERATING ACTIVITIES      
    Consolidated net income (loss)   21.6 31.5
    Less: Net income (loss) from discontinued operations 3 (14.7) (2.3)
    Net income (loss) from continuing operations   6.9 29.2
    Depreciation, amortization and impairment   71.8 63.3
    Earth Data surveys impairment and amortization   144.0 99.8
    Depreciation and amortization capitalized in Earth Data surveys   (11.6) (11.8)
    Variance on provisions   0.2 0.5
    Share-based compensation expenses   2.2 1.7
    Net (gain) loss on disposal of fixed and financial assets   0.1 0.1
    Share of (income) loss in companies recognized under equity method   (0.9) (0.5)
    Other non-cash items   (2.5) 1.8
    Net cash-flow including net cost of financial debt and income tax   210.2 184.1
    Less : Cost of financial debt   73.6 75.5
    Less : Income tax expense (gain)   14.2 24.6
    Net cash-flow excluding net cost of financial debt and income tax   297.9 284.2
    Income tax paid   (10.0) (3.8)
    Net cash-flow before changes in working capital   287.9 280.4
    Changes in working capital   10.0 (23.5)
    – change in trade accounts and notes receivable   (2.3) (29.4)
    – change in inventories and work-in-progress   7.0 17.4
    – change in other current assets   14.9 6.6
    – change in trade accounts and notes payable   10.6 (0.4)
    – change in other current liabilities   (20.2) (17.7)
    Net cash-flow from operating activities   297.8 256.9
    INVESTING ACTIVITIES      
    Total capital expenditures (tangible and intangible assets) net of variation of fixed assets suppliers, excluding Earth Data surveys) 4 (24.3) (48.3)
    Investment in Earth Data surveys   (180.1) (141.7)
    Proceeds from disposals of tangible and intangible assets   1.1 –
    Dividends received from investments in companies under the equity method   0.5 –
    Total net proceeds from financial assets   – (1.9)
    Variation in other non-current financial assets   (2.1) (2.9)
    Net cash-flow used in investing activities   (205.0) (194.8)
        Nine months ended September 30
    (In millions of US$) Notes 2024 2023
    FINANCING ACTIVITIES      
    Repayment of long-term debt 5 (12.2) (1.5)
    Total issuance of long-term debt 5 0.1 23.0
    Lease repayments 5 (43.4) (37.9)
    Financial expenses paid 5 (42.2) (46.5)
    Dividends paid and share capital reimbursements:   –  
    — to owners of Viridien   0.0 –
    — to non-controlling interests of integrated companies   (3.8) (0.8)
    Net cash-flow provided by (used in) financing activities   (101.6) (63.7)
    Effects of exchange rates on cash   1.1 (4.3)
    Net cash flows incurred by discontinued operations 3 22.4 (17.0)
    Net increase (decrease) in cash and cash equivalents   14.7 (22.9)
    Cash and cash equivalents at beginning of year   327.0 298.0
    Cash and cash equivalents at end of period   341.7 275.1

    See the notes to the Interim Consolidated Financial Statements

    Unaudited Interim Consolidated statements of changes in equity

    Amounts in millions of
    US$. except share data    		 Number of Shares issued Share capital Additional paid-in capital Retained earnings Other reserves Treasury shares Income and expense recognized directly in equity Cumulative translation adjustment Equity attributable to owners of Viridien S.A. Non-controlling interests Total equity
    Balance at January 1, 2023 7 123 573 8.7 118.6 967.9 50.0 (20.1) (3.4) (102.4) 1 019.3 39.5 1 058.8
    Net gain (loss) on actuarial changes on pension plan (1)       (0.7)         (0.7)   (0.7)
    Net gain (loss) on cash flow hedges (2)             0.2   0.2   0.2
    Net gain (loss) on translation adjustments (3)               11.7 11.7 (1.2) 10.5
    Other comprehensive income (1)+(2)+(3) – – – (0.7) – – 0.2 11.7 11.2 (1.2) 10.0
    Net income (loss) (4)       28.0         28.0 3.5 31.5
    Comprehensive income (1)+(2)+(3)+(4) – – – 27.3 – – 0.2 11.7 39.2 2.3 41.5
    Exercise of warrants 238   0.1           0.1   0.1
    Dividends                 – (0.9) (0.9)
    Cost of share-based payment 12 951     1.7         1.7   1.7
    Variation in translation adjustments generated by the parent company         (10.7)       (10.7)   (10.7)
    Balance at September 30, 2023 7 136 763(a) 8.7 118.7 996.9 39.3 (20.1) (3.2) (90.7) 1 049.6 40.9 1 090.5
    Amounts in millions of
    US$. except share data    		 Number of Shares issued Share capital Additional paid-in capital Retained earnings Other reserves Treasury shares Income and expense recognized directly in equity Cumulative translation adjustment Equity attributable to owners of Viridien S.A. Non-controlling interests Total equity
    Balance at January 1, 2024 7 136 763 8.7 118.7 980.4 27.3 (20.1) (1.4) (90.8) 1 022.8 41.5 1 064.3
    Net gain (loss) on actuarial changes on pension plan (1)       0.4         0.4   0.4
    Net gain (loss) on cash flow hedges (2)             0.2   0.2   0.2
    Net gain (loss) on translation adjustments (3)               2.9 2.9 0.4 3.3
    Other comprehensive income (1)+(2)+(3) – – – 0.4 – – 0.2 2.9 3.5 0.4 3.9
    Net income (loss) (4)       21.2         21.2 0.4 21.6
    Comprehensive income (1)+(2)+(3)+(4) – – – 21.6 – – 0.2 2.9 24.7 0,8 25.5
    Dividends                 – (3.8) (3.8)
    Cost of share-based payment 24 703     2.0         2.0   2.0
    Variation in translation adjustments generated by the parent company         (7.5)       (7.5)   (7.5)
    Balance at September 30, 2024 7 161 465(b) 8.7 118.7 1 004.0 19.8 (20.1) (1.2) (87.9) 1 042.0 38.5 1 080.5

    (a)   Pro forma following Reverse Share Split

    (b)   Reverse Share Split: Pursuant to a delegation from the Combined General Meeting of shareholders of May 15, 2024, and a sub-delegation from the Board of Directors held on the same day, the Company’s Chief Executive Officer has decided to implement a reverse share split on the basis of 1 new share of €1.00 nominal value for 100 old shares of €0.01 nominal value.

    1All variations refer to the same period last year
    2Unless otherwise stated, all figures and comments are referring to “Segment” (i.e. pre-IFRS 15), as defined in the 2023 Universal Registration Document’s glossary, under section 8.7

    Attachment

    The MIL Network –

  • MIL-OSI: Asure Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Reports Third Quarter Revenues of $29.3 Million

    Recurring Revenues Grew 20% Versus Prior Year Third Quarter

    AUSTIN, Texas, Oct. 31, 2024 (GLOBE NEWSWIRE) — Asure Software, Inc. (“we”, “us”, “our”, “Asure” or the “Company”) (Nasdaq: ASUR), a leading provider of cloud-based Human Capital Management (“HCM”) software solutions, today reported results for the third quarter ended September 30, 2024.

    Third Quarter 2024 Financial Highlights

    • Revenue of $29.3 million, nearly unchanged versus the same period of the prior year
    • Revenue (excluding ERTC revenue) of $29.2 million, up 20% from $24.4 million versus the same period of the prior year
    • Recurring revenue of $28.6 million, up 20% year over year. Recurring revenue was 98% of total revenue versus 81% the same period of the prior year
    • Net loss of $3.9 million versus a net loss of $2.2 million during the same period of the prior year 
    • EBITDA(1) of $2.2  million versus $3.0 million during the same period of the prior year  
    • Adjusted EBITDA(1) of $5.4 million versus $6.2 million during the same period of the prior year 
    • Gross profit of $19.7 million versus $21.3 million during the same period of the prior year  
    • Non-GAAP gross profit(1) of $21.4 million (Non-GAAP gross margin(1) of 73%) versus $22.4 million (and 76% during the same period of the  prior year) 

    Nine Months 2024 Financial Highlights

    • Revenue of $89.0 million down 4% versus the first nine months of prior year
    • Revenue (excluding ERTC revenue) of $87.4 million up 15% from $75.7 million in the first nine months of prior year
    • Recurring revenue (excluding ERTC revenue) of $86.0 million up 16% from $74.4 million in the first nine months of prior year
    • Net loss of $8.6 million versus a net loss of $5.6 million the first nine months of prior year
    • EBITDA(1) of $8.0 million versus $13.2 million the first nine months of prior year
    • Adjusted EBITDA(1) of $16.3 million versus $20.5 million the first nine months of prior year
    • Gross profit of $61.2 million versus $67.7 million during the first nine months of the prior year  
    • Non-GAAP gross profit(1) of $65.6 million (Non-GAAP gross margin(1) of 74%) versus $71.5 million (and 77% during the first nine months of the prior year) 

    _______________
    (1)This financial measure is not calculated in accordance with GAAP and is defined on page 4 of this press release. A reconciliation of this non-GAAP measure to the most applicable GAAP measure begins on page 11 of this release.

    Recent Business Highlights

    • Payroll Tax Management Expansion: Asure’s Payroll Tax Management product gained significant momentum, going live with additional Workday and SAP clients during the third quarter. Key sales wins include one of America’s largest grocery chains and a nationally known HCM system integrator who assists large enterprises with Workday, SAP, and Oracle HCM implementations. These enterprise bookings have grown our backlog and still represent additional product and professional services opportunities.
    • HCM Architectural Milestone: Employee self-service capabilities have been decoupled from disparate payroll platforms and modularized as a single API-based service. This enhancement improves scalability and stability of the end-to-end HCM suite and further consolidates our technical footprint to a more flexible service-oriented architecture.
    • Entering Beta of New AI Agent: More than a chatbot, this new Generative-AI Agent handles inquiries related to payroll and payroll taxes takes secure action on behalf of the user. Through dynamic, interactive sessions, the AI Agent will answer questions and take actions on HR requests including time off requests, demographic changes, or changes to W-4 allowances.
    • Leadership Recognition: Asure Chairman and CEO, Pat Goepel, was named Austin Business Journal’s Best CEO of a Public Company for 2024, recognizing his leadership and commitment to Asure’s growth and success.
    • New financial services product to launch November 2024: Asure is introducing AsurePay™, an innovative financial solution offering working Americans a comprehensive online banking alternative. AsurePay™ combines features such as debit card access, fee-free ATM withdrawals, and paycheck advances through a unique interest-bearing banking solution, designed to improve employee engagement, while also improving overall employer efficiency. This solution is easily accessible through an intuitive mobile app.

    Management Commentary

    Asure Chairman and CEO, Pat Goepel, stated, “Our third quarter performance reflects strong, continued growth, with recurring revenue up 20% year-over-year. We’ve made great strides in transitioning to a more valuable revenue model, with 98% of our revenues now recurring, compared to 81% in the same quarter last year. Additionally, new bookings were up 141% year-over-year. Our backlog has grown significantly — over 35% from Q2 2024 and over 250% from Q3 2023. While large enterprise tax product deals have contributed to our success, their pace of implementation can vary. That said, we remain confident in our ability to maintain this positive trajectory.”

    Goepel continued, “We’re seeing strong demand for our Payroll Tax Management product, we’re introducing new solutions, upgrading our technology, and making strategic acquisitions. Earlier in the year, we faced the challenge of replacing ERTC revenue, but those headwinds have now dissipated as we close out 2024 and this change in the composition of our revenues offers us strong momentum going into 2025. We are optimistic about the opportunities ahead for both the remainder of this year and into next year.”

    Fourth Quarter 2024 and Full Year 2025 Revenue Guidance Ranges

    The Company is providing the following guidance for the fourth quarter 2024 based on the Company’s year-to-date results and recent business trends. Management is initiating full year 2025 guidance to a range of $134M-$138M which does not include revenue from potential future acquisitions.

    Guidance for 2024

    Guidance Range   Q4-2024   FY-2024  
    Revenue $ 30M – 32M $ 119M -121M  
    Adjusted EBITDA(1) $ 6M -7M   18% -19%  
               

    Guidance for 2025 

    Guidance Range   FY-2025  
    Revenue $ 134M – 138M  
    Adjusted EBITDA(1)   23% – 24%  
           

    Management uses GAAP, non-GAAP and adjusted measures when planning, monitoring, and evaluating the Company’s performance. The primary purpose of using non-GAAP and adjusted measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the Company’s results in the same way that management does.

    Management believes that supplementing GAAP disclosures with non-GAAP and adjusted disclosures provides investors with a more complete view of the Company’s operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the Company’s business. Further, to the extent that other companies use similar methods in calculating adjusted financial measures, the provision of supplemental non-GAAP and adjusted information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP and adjusted operating results.

    Management has not provided a reconciliation of guidance of GAAP to non-GAAP or adjusted disclosures because management is unable to predict the nature and materiality of non-recurring expenses without unreasonable effort.

    Management’s projections are based on management’s current beliefs and assumptions about the Company’s business, and the industry and markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2024 and 2025 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the “Use of Forward-Looking Statements” disclosures on page 6 of this press release as well as the risk factors in our quarterly and annual reports on file with the Securities and Exchange Commission for more information about risk that affect our business and industry.

    Conference Call Details

    Asure management will host a conference call on Thursday, October 31, 2024, at 3:30 pm Central (4:30 pm Eastern). Asure Chairman and CEO Pat Goepel and CFO John Pence will participate in the conference call followed by a question-and-answer session. The conference call will be broadcast live and available for replay via the investor relations section of the Company’s website. Analysts may participate on the conference call by dialing 877-407-9219 or 201-689-8852.

    About Asure Software, Inc.

    Asure Software (Nasdaq: ASUR) is a leading provider of Human Capital Management (“HCM”) software solutions. We help small and mid-sized companies grow by assisting them in building better teams with skills to stay compliant with ever-changing federal, state, and local tax jurisdictions and labor laws, and better allocate cash so they can spend their financial capital on growing their business rather than back-office overhead expenses. Asure’s Human Capital Management suite, named AsureHCM®, includes cloud-based Payroll, Tax Services, and Time & Attendance software and Asure Marketplace™ as well as human resources (“HR”) services ranging from HR projects to completely outsourcing payroll and HR staff. We also offer these products and services through our network of reseller partners. Visit us at asuresoftware.com.

    Non-GAAP and Adjusted Financial Measures

    This press release includes information about non-GAAP gross profit, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP research and development expense, EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin. These non-GAAP and adjusted financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP and adjusted financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s Condensed Consolidated Financial Statements prepared in accordance with GAAP. Non-GAAP and adjusted financial measures are reconciled to GAAP in the tables set forth in this release and are subject to reclassifications to conform to current period presentations.

    Non-GAAP gross profit differs from gross profit in that it excludes amortization, share-based compensation, and one-time items.

    Non-GAAP sales and marketing expense differs from sales and marketing expense in that it excludes share-based compensation and one-time items.

    Non-GAAP general and administrative expense differs from general and administrative expense in that it excludes share-based compensation and one-time items.

    Non-GAAP research and development expense differs from research and development expense in that it excludes share-based compensation and one-time items.

    EBITDA differs from net income (loss) in that it excludes items such as interest, income taxes, depreciation, and amortization. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

    Adjusted EBITDA differs from EBITDA in that it excludes share-based compensation, other income (expense), net and one-time expenses. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

    All adjusted and non-GAAP measures presented as “margin” are computed by dividing the applicable adjusted financial measure by total revenue.

    Specifically, as applicable to the respective financial measure, management is adjusting for the following items when calculating non-GAAP and adjusted financial measures as applicable for the periods presented. No additional adjustments have been made for potential income tax effects of the adjustments based on the Company’s current and anticipated de minimis effective federal tax rate, resulting from the Company’s continued losses for federal tax purposes and its tax net operating loss balances.

    Share-Based Compensation Expenses. The Company’s compensation strategy includes the use of share-based compensation to attract and retain employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than motivating or rewarding operational performance for any particular period. Thus, share-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.

    Depreciation. The Company excludes depreciation of fixed assets. Also included in the expense is the depreciation of capitalized software costs.

    Amortization of Purchased Intangibles. The Company views amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, and acquired lease intangibles, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.

    Interest Expense, Net. The Company excludes accrued interest expense, the amortization of debt discounts and deferred financing costs.

    Income Taxes. The Company excludes income taxes, both at the federal and state levels.

    One-Time Expenses. The Company’s adjusted financial measures exclude the following costs to normalize comparable reporting periods, as these are generally non-recurring expenses that do not reflect the ongoing operational results. These items are typically not budgeted and are infrequent and unusual in nature.

    Settlements, Penalties and Interest. The Company excludes legal settlements, including separation agreements, penalties and interest that are generally one-time in nature and not reflective of the operational results of the business.

    Acquisition and Transaction Related Costs. The Company excludes these expenses as they are transaction costs and expenses that are generally one-time in nature and not reflective of the underlying operational results of our business. Examples of these types of expenses include legal, accounting, regulatory, other consulting services, severance and other employee costs.

    Other non-recurring Expenses. The Company excludes these as they are generally non-recurring items that are not reflective of the underlying operational results of the business and are generally not anticipated to recur. Some examples of these types of expenses, historically, have included write-offs or impairments of assets, demolition of office space and cybersecurity consultants.

    Other (Expense) Income, Net. The Company’s adjusted financial measures exclude Other (Expense) Income, Net because it includes items that are not reflective of the underlying operational results of the business, such as loan forgiveness, adjustments to contingent liabilities and credits earned as part of the CARES Act, passed by Congress in the wake of the coronavirus pandemic.

    Use of Forward-Looking Statements

    This press release contains certain statements made by management that may constitute “forward-looking” statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements about our financial results may include expected or projected U.S GAAP and other operating and non-operating results. The words “believe,” “may,” “will,” “estimate,” “projects,” “anticipate,” “intend,” “expect,” “should,” “plan,” and similar expressions are intended to identify forward-looking statements. Examples of “forward-looking statements” include statements we make regarding our operating performance, future results of operations and financial position, revenue growth, earnings or other projections. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, over many of which we have no control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

    The risks and uncertainties referred to above include—but are not limited to—the expiration of major revenue streams such as Employee Retention Tax Credits (“ERTC”) and the impact of the Internal Revenue Service recent measures regarding ERTC claims; risks associated with breaches of the Company’s security measures; risks associated with the Company’s rate of growth and anticipated revenue run rate, including impact of the current economic environment; the Company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and cash flow, and ability to maintain continued growth of deferred revenue and unbilled deferred revenue; privacy concerns and laws and other regulations may limit the effectiveness of our applications; the financial and other impact of any previous and future acquisitions; the Company’s ability to continue to release, gain customer acceptance of and provide support for new and improved versions of the Company’s services; successful customer deployment and utilization of the Company’s existing and future services; interruptions to supply chains and extended shut down of businesses; issues in the use of artificial intelligence in our HCM products and services; political unrest, including the current conflict between Russia and Ukraine and the ongoing conflict involving Israel in the Middle East; reductions in employment and an increase in business failures, specifically among our clients; possible fluctuations in the Company’s financial and operating results; regulatory pressures on economic relief enacted as a result of the COVID-19 pandemic that change or cause different interpretations with respect to eligibility for such programs; domestic and international regulatory developments, including changes to or applicability to our business of privacy and data securities laws, money transmitter laws and anti-money laundering laws; technological developments; the nature of the Company’s business model; interest rates; competition; various financial aspects of the Company’s subscription model; impairment of intangible assets; interruptions or delays in the Company’s services or the Company’s Web hosting; access to additional capital; the Company’s ability to hire, retain and motivate employees and manage the Company’s growth; litigation and any related claims, negotiations and settlements, including with respect to intellectual property matters or industry-specific regulations; volatility and weakness in bank and capital markets; factors affecting the Company’s deferred tax assets and ability to value and utilize them; volatility and low trading volume of our common stock; collection of receivables; and general developments in the economy, financial markets, credit markets and the impact of current and future accounting pronouncements and other financial reporting standards. Please review the Company’s risk factors in its annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2024, and its quarterly reports on Form 10-Q filed with the SEC on August 1, 2024, and October 31, 2024.

    The forward-looking statements, including the financial guidance 2024 and 2025 outlooks, contained in this press release represent the judgment of the Company as of the date of this press release, and the Company expressly disclaims any intent, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations with regard to these forward looking statements or any change in events, conditions or circumstances on which any such statements are based.

    © 2024 Asure Software, Inc. All rights reserved.

    ASURE SOFTWARE, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except per share amounts)
    (Unaudited)
     
      September 30, 2024   December 31, 2023
           
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 11,248     $ 30,317  
    Accounts receivable, net of allowance for credit losses of $6,150 and $4,787 at September 30, 2024 and December 31, 2023, respectively   17,233       14,202  
    Inventory   233       155  
    Prepaid expenses and other current assets   4,586       3,471  
    Total current assets before funds held for clients   33,300       48,145  
    Funds held for clients   193,589       219,075  
    Total current assets   226,889       267,220  
    Property and equipment, net   18,490       14,517  
    Goodwill   94,724       86,011  
    Intangible assets, net   73,429       62,082  
    Operating lease assets, net   4,401       4,991  
    Other assets, net   10,176       9,047  
    Total assets $ 428,109     $ 443,868  
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities:      
    Current portion of notes payable $ —     $ 27  
    Accounts payable   1,317       2,570  
    Accrued compensation and benefits   4,277       6,519  
    Operating lease liabilities, current   1,600       1,490  
    Other accrued liabilities   8,287       3,862  
    Deferred revenue   3,029       6,853  
    Total current liabilities before client fund obligations   18,510       21,321  
    Client fund obligations   193,951       220,019  
    Total current liabilities   212,461       241,340  
    Long-term liabilities:      
    Deferred revenue   2,276       16  
    Deferred tax liability   2,116       1,728  
    Notes payable, net of current portion   7,506       4,282  
    Operating lease liabilities, noncurrent   3,832       4,638  
    Other liabilities   765       209  
    Total long-term liabilities   16,495       10,873  
    Total liabilities   228,956       252,213  
    Stockholders’ equity:      
    Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding   —       —  
    Common stock, $0.01 par value; 44,000 shares authorized; 26,540 and 25,382 shares issued, 26,540 and 24,998 shares outstanding at September 30, 2024 and December 31, 2023, respectively   265       254  
    Treasury stock at cost, zero(1) and 384 shares at September 30, 2024 and December 31, 2023, respectively   —       (5,017 )
    Additional paid-in capital   502,920       487,973  
    Accumulated deficit   (304,022 )     (290,440 )
    Accumulated other comprehensive loss   (10 )     (1,115 )
    Total stockholders’ equity   199,153       191,655  
    Total liabilities and stockholders’ equity $ 428,109     $ 443,868  
    (1) The aggregate Treasury stock of prior repurchases of the Company’s own common stock was retired and subsequently issued effective January 1, 2024. See the Condensed Consolidated Statement of Changes in Stockholders’ Equity for the impact of this transaction.
     
    ASURE SOFTWARE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
    (in thousands, except per share amounts)
    (Unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
                   
    Revenue:              
    Recurring $ 28,626     $ 23,833     $ 85,950     $ 74,749  
    Professional services, hardware and other   678       5,501       3,050       18,069  
    Total revenue   29,304       29,334       89,000       92,818  
    Cost of sales   9,600       8,054       27,821       25,120  
    Gross profit   19,704       21,280       61,179       67,698  
    Operating expenses:              
    Sales and marketing   6,680       6,597       21,371       22,312  
    General and administrative   10,378       9,294       30,559       29,586  
    Research and development   1,973       1,803       5,704       5,107  
    Amortization of intangible assets   4,295       3,333       11,790       9,929  
    Total operating expenses   23,326       21,027       69,424       66,934  
    (Loss) income from operations   (3,622 )     253       (8,245 )     764  
    Interest income   165       437       762       1,015  
    Interest expense   (274 )     (1,219 )     (662 )     (5,336 )
    Loss on extinguishment of debt   —       (1,517 )     —       (1,517 )
    Other (expense) income, net   —       (283 )     10       (291 )
    Loss from operations before income taxes   (3,731 )     (2,329 )     (8,135 )     (5,365 )
    Income tax expense (benefit)   170       (123 )     434       267  
    Net loss   (3,901 )     (2,206 )     (8,569 )     (5,632 )
    Other comprehensive loss:              
    Unrealized income (loss) on marketable securities   1,340       (201 )     1,105       (213 )
    Comprehensive loss $ (2,561 )   $ (2,407 )   $ (7,464 )   $ (5,845 )
                   
    Basic and diluted loss per share              
    Basic $ (0.15 )   $ (0.10 )   $ (0.33 )   $ (0.27 )
    Diluted $ (0.15 )   $ (0.10 )   $ (0.33 )   $ (0.27 )
                   
    Weighted average basic and diluted shares              
    Basic   26,429       22,591       25,870       21,204  
    Diluted   26,429       22,591       25,870       21,204  
                                   
    ASURE SOFTWARE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (Unaudited)
     
      Nine Months Ended September 30,
        2024       2023  
           
    Cash flows from operating activities:      
    Net loss $ (8,569 )   $ (5,632 )
    Adjustments to reconcile loss to net cash (used) in provided by operations:      
    Depreciation and amortization   16,200       14,243  
    Amortization of operating lease assets   1,025       1,129  
    Amortization of debt financing costs and discount   531       548  
    Non-cash interest expense   —       1,471  
    Net accretion of discounts on available-for-sale securities   (273 )     (63 )
    Provision for expected losses   111       2,004  
    Provision for deferred income taxes   388       111  
    Loss on extinguishment of debt   —       1,208  
    Net realized gains on sales of available-for-sale securities   (1,929 )     (1,645 )
    Share-based compensation   4,981       4,170  
    Loss on disposals of long-term assets   —       132  
    Change in fair value of contingent purchase consideration   —       175  
    Changes in operating assets and liabilities:      
    Accounts receivable   (3,142 )     (5,014 )
    Inventory   (78 )     159  
    Prepaid expenses and other assets   (1,656 )     4,031  
    Operating lease right-of-use assets   —       473  
    Accounts payable   (1,253 )     (498 )
    Accrued expenses and other long-term obligations   (1,052 )     918  
    Operating lease liabilities   (1,139 )     (895 )
    Deferred revenue   (4,539 )     (5,190 )
    Net cash (used) in provided by operating activities   (394 )     11,835  
    Cash flows from investing activities:      
    Acquisition of intangible asset   (12,397 )     (697 )
    Purchases of property and equipment   (546 )     (1,365 )
    Software capitalization costs   (7,677 )     (5,029 )
    Purchases of available-for-sale securities   (10,914 )     (21,513 )
    Proceeds from sales and maturities of available-for-sale securities   13,325       10,428  
    Net cash used in investing activities   (18,209 )     (18,176 )
    Cash flows from financing activities:      
    Payments of notes payable   (420 )     (35,627 )
    Debt extinguishment costs   —       (468 )
    Payments made on amounts due for the acquisition of intangible assets   (658 )     —  
    Net proceeds from issuance of common stock   902       45,986  
    Capital raise fees   (47 )     (258 )
    Net change in client fund obligations   (26,068 )     (31,033 )
    Net cash used in financing activities   (26,291 )     (21,400 )
    Net decrease in cash and cash equivalents   (44,894 )     (27,741 )
    Cash and cash equivalents, beginning of period   177,622       164,042  
    Cash and cash equivalents, end of period $ 132,728     $ 136,301  
                   
    ASURE SOFTWARE, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
    (in thousands)
    (Unaudited)
     
      Nine Months Ended September 30,
        2024       2023  
           
    Reconciliation of cash and cash equivalents to the Condensed Consolidated Balance Sheets
    Cash and cash equivalents $ 11,248     $ 32,787  
    Cash and cash equivalents included in funds held for clients   121,480       103,514  
    Total cash and cash equivalents $ 132,728     $ 136,301  
           
    Supplemental information:      
    Cash paid for interest $ —     $ 3,140  
    Cash paid for income taxes $ 15     $ 532  
           
    Non-cash investing and financing activities:      
    Acquisition of intangible assets $ 6,918     $ 332  
    Notes payable issued for acquisitions $ 3,138     $ —  
    Shares issued for acquisitions $ 9,125     $ 2,543  
                   
    ASURE SOFTWARE, INC.
    RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL MEASURES
    (unaudited)
     
    (in thousands) Q3-24 Q2-24 Q1-24 Q4-23 Q3-23 Q2-23 Q1-23 Q4-22
    Revenue(1) $ 29,304   $ 28,044   $ 31,652   $ 26,264   $ 29,334   $ 30,420   $ 33,064   $ 29,292  
                     
    Gross Profit to non-GAAP Gross Profit                
    Gross Profit $ 19,704   $ 18,868   $ 22,607   $ 17,839   $ 21,280   $ 22,018   $ 24,400   $ 21,139  
    Gross Margin   67.2 %   67.3 %   71.4 %   67.9 %   72.5 %   72.4 %   73.8 %   72.2 %
                     
    Share-based Compensation   44     43     40     32     28     46     31     34  
    Depreciation   1,232     1,145     1,110     921     984     1,309     1,009     871  
    Amortization – intangibles   50     50     50     50     50     50     268     298  
    One-time expenses                
    Settlements, penalties & interest   2     3     —     (6 )   8     —     4     3  
    Acquisition and transaction costs   367     264     39     —     —     —     —     —  
    Non-GAAP Gross Profit $ 21,399   $ 20,373   $ 23,846   $ 18,836   $ 22,350   $ 23,423   $ 25,712   $ 22,345  
    Non-GAAP Gross Margin   73.0 %   72.6 %   75.3 %   71.7 %   76.2 %   77.0 %   77.8 %   76.3 %
                     
    Sales and Marketing Expense to non-GAAP Sales and Marketing Expense
    Sales and Marketing Expense $ 6,680   $ 6,924   $ 7,767   $ 6,422   $ 6,597   $ 8,515   $ 7,200   $ 6,022  
                     
    Share-based Compensation   269     237     243     180     210     149     124     93  
    Depreciation   1     —     1     1     —     —     —     —  
    One-time expenses                
    Settlements, penalties & interest   (5 )   5     18     6     30     4     11     —  
    Acquisition and transaction costs   68     37     11     —     —     —     —     —  
    Other non-recurring expenses   —     —     —     —     —     180     —     —  
    Non-GAAP Sales and Marketing Expense $ 6,347   $ 6,645   $ 7,494   $ 6,235   $ 6,357   $ 8,182   $ 7,065   $ 5,929  
                     
    General and Administrative Expense to non-GAAP General and Administrative Expense
    General and Administrative Expense $ 10,378   $ 10,118   $ 10,063   $ 9,747   $ 9,294   $ 10,336   $ 9,956   $ 9,720  
                     
    Share-based Compensation   1,187     1,122     1,535     980     936     1,298     1,142     641  
    Depreciation   264     256     251     225     200     234     210     168  
    One-time expenses                
    Settlements, penalties & interest   377     304     98     284     101     432     102     34  
    Acquisition and transaction costs   371     245     57     51     —     —     —     —  
    Other non-recurring expenses   253     —     86     53     —     453     —     —  
    Non-GAAP General and Administrative Expense $ 7,926   $ 8,191   $ 8,036   $ 8,154   $ 8,057   $ 7,919   $ 8,502   $ 8,877  
                     
    Research and Development Expense to non-GAAP Research and Development Expense
    Research and Development Expense $ 1,973   $ 1,962   $ 1,769   $ 1,739   $ 1,803   $ 1,325   $ 1,979   $ 1,627  
                     
    Share-based Compensation   90     86     85     69     76     89     40     70  
    One-time expenses                
    Settlements, penalties & interest   —     27     31     —     —     —     —     25  
    Acquisition and transaction costs   195     369     147     —     —     —     —     —  
    Non-GAAP Research and Development Expense $ 1,688   $ 1,480   $ 1,506   $ 1,670   $ 1,727   $ 1,236   $ 1,939   $ 1,532  
                                                     

    (1)Note that first quarters are seasonally strong as recurring year-end W2/ACA revenue is recognized in this period.

    ASURE SOFTWARE, INC.
    RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL MEASURES (cont.)
    (unaudited)
     
    (in thousands) Q3-24 Q2-24 Q1-24 Q4-23 Q3-23 Q2-23 Q1-23 Q4-22
    Revenue(1) $ 29,304   $ 28,044   $ 31,652   $ 26,264   $ 29,334   $ 30,420   $ 33,064   $ 29,292  
                     
    GAAP Net (Loss) Income to Adjusted EBITDA
    GAAP Net (Loss) Income $ (3,901 ) $ (4,360 ) $ (308 ) $ (3,582 ) $ (2,206 ) $ (3,765 ) $ 339   $ (1,056 )
                     
    Interest expense, net   109     (53 )   (156 )   (24 )   782     1,593     1,944     1,429  
    Income taxes   170     231     33     (158 )   (123 )   627     (237 )   (94 )
    Depreciation   1,497     1,402     1,361     1,148     1,185     1,542     1,219     1,039  
    Amortization – intangibles   4,345     4,096     3,499     3,743     3,384     3,343     3,570     3,648  
    EBITDA $ 2,220   $ 1,316   $ 4,429   $ 1,127   $ 3,022   $ 3,340   $ 6,835   $ 4,966  
    EBITDA Margin   7.6 %   4.7 %   14.0 %   4.3 %   10.3 %   11.0 %   20.7 %   17.0 %
                     
    Share-based Compensation   1,591     1,488     1,902     1,260     1,251     1,582     1,337     838  
    One Time Expenses                
    Settlements, penalties & interest   375     339     147     283     140     436     117     62  
    Acquisition and transaction costs   1,001     914     254     51     —     —     —     —  
    Other non-recurring expenses   253     —     86     53     —     633     —     —  
    Other (expense) income, net   —     —     (10 )   1     1,800     93     (83 )   139  
    Adjusted EBITDA $ 5,440   $ 4,057   $ 6,808   $ 2,775   $ 6,213   $ 6,084   $ 8,206   $ 6,005  
    Adjusted EBITDA Margin   18.6 %   14.5 %   21.5 %   10.6 %   21.2 %   20.0 %   24.8 %   20.5 %
                                                     

    (1)Note that first quarters are seasonally strong as recurring year-end W2/ACA revenue is recognized in this period.

    Investor Relations Contact
    Patrick McKillop
    Vice President, Investor Relations
    617-335-5058
    patrick.mckillop@asuresoftware.com

    The MIL Network –

  • MIL-OSI: Fidus Investment Corporation Announces Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Board of Directors Declared Total Dividends of $0.61 per Share for Fourth Quarter 2024

    Base Dividend of $0.43 and Supplemental Dividend of $0.18 Per Share

    EVANSTON, Ill., Oct. 31, 2024 (GLOBE NEWSWIRE) — Fidus Investment Corporation (NASDAQ:FDUS) (“Fidus” or the “Company”), a provider of customized debt and equity financing solutions, primarily to lower middle-market companies based in the United States, today announced its financial results for the third quarter ended September 30, 2024.

    Third Quarter 2024 Financial Highlights

    • Total investment income of $38.4 million
    • Net investment income of $21.4 million, or $0.64 per share
    • Adjusted net investment income of $20.4 million, or $0.61 per share(1)
    • Invested $65.9 million in debt and equity securities, including three new portfolio companies
    • Received proceeds from repayments and realizations of $50.8 million
    • Paid total dividends of $0.57 per share: regular quarterly dividend of $0.43 and a supplemental dividend of $0.14 per share on September 26, 2024
    • Net asset value (“NAV”) of $658.8 million, or $19.42 per share, as of September 30, 2024
    • Estimated spillover income (or taxable income in excess of distributions) as of September 30, 2024 of $43.1 million, or $1.27 per share

    Management Commentary

    “For the third quarter, our debt investments generated a 8.4% increase in interest income year-over-year. We continued to carefully grow total assets under management while maintaining a healthy portfolio structured to deliver recurring income and the potential for enhanced returns from the monetization of equity investments. We expect investment activity to remain at reasonable levels for the rest of the year, providing us opportunities to advance our long-term goals of generating attractive risk-adjusted returns for our shareholders, preserving capital and growing NAV over time,” said Edward Ross, Chairman and CEO of Fidus Investment Corporation.    

    (1)    Supplemental information regarding adjusted net investment income:

    On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure.  This measure is provided in addition to, but not as a substitute for, net investment income.  Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses.  The management agreement with our investment adviser provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses.  In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate.  As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of net investment income to adjusted net investment income are set forth in Schedule 1.

    Third Quarter 2024 Financial Results

    The following table provides a summary of our operating results for the three months ended September 30, 2024, as compared to the same period in 2023 (dollars in thousands, except per share data):

                             
        Three Months Ended September 30,              
        2024     2023     $ Change     % Change  
    Interest income   $ 31,857     $ 28,313     $ 3,544       12.5 %
    Payment-in-kind interest income     1,851       2,789       (938 )     (33.6 %)
    Dividend income     1,384       262       1,122       428.2 %
    Fee income     2,693       2,255       438       19.4 %
    Interest on idle funds     597       566       31       5.5 %
    Total investment income   $ 38,382     $ 34,185     $ 4,197       12.3 %
                             
    Net investment income   $ 21,411     $ 16,660     $ 4,751       28.5 %
    Net investment income per share   $ 0.64     $ 0.63     $ 0.01       1.6 %
                             
    Adjusted net investment income (1)   $ 20,424     $ 18,188     $ 2,236       12.3 %
    Adjusted net investment income per share (1)   $ 0.61     $ 0.68     $ (0.07 )     (10.3 %)
                             
    Net increase  (decrease) in net assets resulting from operations   $ 16,477     $ 24,299     $ (7,822 )     (32.2 %)
    Net increase (decrease) in net assets resulting from operations per share   $ 0.49     $ 0.91     $ (0.42 )     (46.2 %)

    The $4.2 million increase in total investment income for the three months ended September 30, 2024, as compared to the same period in 2023, was primarily attributable to (i) a $2.6 million increase in total interest income (which includes payment-in-kind interest income) resulting from an increase in average debt investment balances outstanding, partially offset by a decrease in weighted average yield on debt investment balances outstanding, (ii) a $1.1 million increase in dividend income due to an increase in distributions received from equity investments and (iii) a $0.4 million increase in fee income resulting from an increase in amendment fees.

    For the three months ended September 30, 2024, total expenses, including the base management fee waiver and income tax provision, were $17.0 million, a decrease of $0.5 million, or (3.2%) from the $17.5 million of total expenses, including the base management fee waiver and income tax provision, for the three months ended September 30, 2023. The decrease was primarily attributable to (i) a $2.5 million decrease in capital gains incentive fee accrued, partially offset by (ii) a $0.7 million net increase in base management fee, including the base management fee waiver, due to higher average total assets, (iii) a $0.6 million increase in the income incentive fee, and (iv) a $0.6 million increase in income tax provision (benefit).

    Net investment income increased by $4.7 million, or 28.5%, to $21.4 million during the three months ended September 30, 2024 as compared to the same period in 2023, as a result of the $4.2 million increase in total investment income and the $0.5 million decrease in total expenses, including base management fee waiver and income tax provision. Adjusted net investment income,(1) which excludes the capital gains incentive fee accrual, was $0.61 per share compared to $0.68 per share in the prior year.

    For the three months ended September 30, 2024, the total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, was $(0.4) million, as compared to total net realized gain/(loss) on investments, net of income tax (provision)/benefit on realized gains, of $9.7 million for the same period in 2023.

    Portfolio and Investment Activities

    As of September 30, 2024, the fair value of our investment portfolio totaled $1,090.7 million and consisted of 85 active portfolio companies and five portfolio companies that have sold their underlying operations. Our total portfolio investments at fair value were approximately 101.5% of the related cost basis as of September 30, 2024. As of September 30, 2024, the debt investments of 49 portfolio companies bore interest at a variable rate, which represented $702.0 million, or 73.2%, of our debt investment portfolio on a fair value basis, and the remainder of our debt investment portfolio was comprised of fixed rate investments. As of September 30, 2024, our average active portfolio company investment at amortized cost was $12.6 million, which excludes investments in five portfolio companies that have sold their underlying operations. The weighted average yield on debt investments was 13.8% as of September 30, 2024. The weighted average yield was computed using the effective interest rates for debt investments at cost as of September 30, 2024, including the accretion of original issue discounts and loan origination fees, but excluding investments on non-accrual status and investments recorded as a secured borrowing.

    Third quarter 2024 investment activity included the following new portfolio company investment:

    • Jumo Health, Inc., a developer of creative, patient-centric educational solutions that improve health literacy to accelerate clinical trial enrollment and increase participant retention. Fidus invested $6.0 million in first lien debt and $0.8 million in preferred equity.
    • Thrust Flight LLC, a provider of professional flight training services. Fidus invested $9.8 million in first lien debt, $1.1 million in common equity and made additional commitments up to $2.6 million in first lien debt.
    • InductiveHealth Informatics, LLC, a leading provider of disease and syndromic surveillance solutions for health agencies. Fidus invested $20.0 million in first lien debt and $0.4 million in preferred equity.

    Liquidity and Capital Resources

    As of September 30, 2024, we had $54.4 million in cash and cash equivalents and $100.0 million of unused capacity under our senior secured revolving credit facility (the “Credit Facility”). For the three months ended September 30, 2024, we received net proceeds of $14.1 million from the equity at-the-market program (the “ATM Program”). As of September 30, 2024, we had SBA debentures outstanding of $175.0 million, $125.0 million outstanding of our 4.75% notes due January 2026 (the “January 2026 Notes”) and $125.0 million outstanding of our 3.50% notes due November 2026 (the “November 2026 Notes” and collectively with the January 2026 Notes the “Notes”). As of September 30, 2024, the weighted average interest rate on total debt outstanding was 4.6%.

    Fourth Quarter 2024 Dividends Totaling $0.61 Per Share Declared

    On October 28, 2024, our board of directors declared a base dividend of $0.43 per share and a supplemental dividend of $0.18 per share for the fourth quarter. The dividends will be payable on December 27, 2024, to stockholders of record as of December 17, 2024.

    When declaring dividends, our board of directors reviews estimates of taxable income available for distribution, which differs from consolidated income under GAAP due to (i) changes in unrealized appreciation and depreciation, (ii) temporary and permanent differences in income and expense recognition, and (iii) the amount of undistributed taxable income carried over from a given year for distribution in the following year. The final determination of 2024 taxable income, as well as the tax attributes for 2024 dividends, will be made after the close of the 2024 tax year.  The final tax attributes for 2024 dividends will generally include ordinary taxable income but may also include capital gains, qualified dividends and return of capital.

    Fidus has adopted a dividend reinvestment plan (“DRIP”) that provides for reinvestment of dividends on behalf of its stockholders, unless a stockholder elects to receive cash. As a result, when we declare a cash dividend, stockholders who have not “opted out” of the DRIP at least two days prior to the dividend payment date will have their cash dividends automatically reinvested in additional shares of our common stock. Those stockholders whose shares are held by a broker or other financial intermediary may receive dividends in cash by notifying their broker or other financial intermediary of their election.

    Subsequent Events

    On October 1, 2024, we invested $6.3 million in first lien debt and common equity in Estex Manufacturing Company, LLC, a branded manufacturer of sewn products used in the utility, airline / aerospace, sports, and military end markets.

    On October 11, 2024, we exited our debt investment in US Fertility Enterprises, LLC. We received payment in full of $15.2 million on our subordinated debt, which included a prepayment fee.

    On October 24, 2024, we exited our debt investment in Sonicwall US Holdings, Inc. We received payment of $3.3 million on our second lien debt, resulting in a realized loss of $0.1 million.

    On October 25, 2024, we invested $14.8 million in first lien debt and common equity in Axis Medical Technologies LLC (dba Movemedical), a leading provider of last-mile supply chain software solutions to medical device OEMs.

    Third Quarter 2024 Financial Results Conference Call

    Management will host a conference call to discuss the operating and financial results at 9:00am ET on Friday, November 1, 2024. To participate in the conference call, please dial (844) 808-7136 approximately 10 minutes prior to the call. International callers should dial (412) 317-0534. Please ask to be joined into the Fidus Investment Corporation call.

    A live webcast of the conference call will be available at http://investor.fdus.com/news-events/events-presentations.  Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software. An archived replay of the conference call will also be available in the investor relations section of the Company’s website.

    ABOUT FIDUS INVESTMENT CORPORATION

    Fidus Investment Corporation provides customized debt and equity financing solutions to lower middle-market companies, which management generally defines as U.S. based companies with revenues between $10 million and $150 million. The Company’s investment objective is to provide attractive risk-adjusted returns by generating both current income from debt investments and capital appreciation from equity related investments. Fidus seeks to partner with business owners, management teams and financial sponsors by providing customized financing for change of ownership transactions, recapitalizations, strategic acquisitions, business expansion and other growth initiatives.

    Fidus is an externally managed, closed-end, non-diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. In addition, for tax purposes, Fidus has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. Fidus was formed in February 2011 to continue and expand the business of Fidus Mezzanine Capital, L.P., which commenced operations in May 2007 and was licensed by the U.S. Small Business Administration as a Small Business Investment Company (SBIC).

    FORWARD-LOOKING STATEMENTS

    This press release may contain certain forward-looking statements which are based upon current expectations and are inherently uncertain, including, but not limited to, statements about the future performance and financial condition of the Company, the prospects of our existing and prospective portfolio companies, the financial condition and ability of our existing and prospective portfolio companies to achieve their objectives, and the timing, form and amount of any distributions or supplemental dividends in the future. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, such as changes in the financial and lending markets, the impact of the general economy (including an economic downturn or recession), and the impact of interest rate volatility; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future as a result of a number of factors related to changes in the markets in which the Company invests, changes in the financial, capital, and lending markets, and other factors described from time to time in the Company’s filings with the Securities and Exchange Commission. Such statements speak only as of the time when made, and are based on information available to the Company as of the date hereof and are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to update any such statement now or in the future, except as required by applicable law.

        FIDUS INVESTMENT CORPORATION
    Consolidated Statements of Assets and Liabilities
    (in thousands, except shares and per share data)
            		  
        September 30,     December 31,  
        2024     2023  
    ASSETS                
    Investments, at fair value:                
       Control investments (cost: $6,832 and $6,832, respectively)   $   —     $   —  
       Affiliate investments (cost: $48,019 and $46,485, respectively)       85,827         83,876  
       Non-control/non-affiliate investments (cost: $1,019,953 and $883,312, respectively)       1,004,848         874,030  
    Total investments, at fair value (cost: $1,074,804 and $936,629, respectively)       1,090,675         957,906  
    Cash and cash equivalents       54,443         119,131  
    Interest receivable       14,317         11,965  
    Prepaid expenses and other assets       1,618         1,896  
    Total assets   $   1,161,053     $   1,090,898  
    LIABILITIES                
    SBA debentures, net of deferred financing costs   $   170,472      $   204,472  
    Notes, net of deferred financing costs       248,081         247,243  
    Borrowings under Credit Facility, net of deferred financing costs       38,853         (1,082 )
    Secured borrowings       14,025         15,880  
    Accrued interest and fees payable       3,544         5,924  
    Base management fee payable, net of base management fee waiver – due to affiliate       4,784         4,151  
    Income incentive fee payable – due to affiliate       5,059         4,570  
    Capital gains incentive fee payable – due to affiliate       14,914         17,509  
    Administration fee payable and other, net – due to affiliate       619         789  
    Taxes payable       751         1,227  
    Accounts payable and other liabilities       1,190         741  
    Total liabilities   $   502,292      $   501,424  
    Commitments and contingencies                
    NET ASSETS                
    Common stock, $0.001 par value (100,000,000 shares authorized, 33,914,652 and 30,438,979 shares                
    issued and outstanding at September 30, 2024 and December 31, 2023, respectively)   $   34      $   31  
    Additional paid-in capital       572,159         504,298  
    Total distributable earnings       86,568         85,145  
    Total net assets       658,761         589,474  
    Total liabilities and net assets   $   1,161,053      $   1,090,898  
    Net asset value per common share   $   19.42      $   19.37  
    FIDUS INVESTMENT CORPORATION
    Consolidated Statements of Operations (unaudited)
    (in thousands, except shares and per share data)

    		  
        Three Months Ended     Nine Months Ended  
        September 30,     September 30,  
        2024     2023     2024     2023  
    Investment Income:                        
    Interest income                        
    Control investments   $ —     $ —     $ —     $ —  
    Affiliate investments     870       1,011       2,603       3,168  
    Non-control/non-affiliate investments     30,987       27,302       88,899       77,268  
    Total interest income     31,857       28,313       91,502       80,436  
    Payment-in-kind interest income                        
    Control investments     —       —       —       —  
    Affiliate investments     —       —       —       —  
    Non-control/non-affiliate investments     1,851       2,789       5,745       4,661  
    Total payment-in-kind interest income     1,851       2,789       5,745       4,661  
    Dividend income                        
    Control investments     —       —       —       —  
    Affiliate investments     1,328       (1 )     1,830       519  
    Non-control/non-affiliate investments     56       263       308       431  
    Total dividend income     1,384       262       2,138       950  
    Fee income                        
    Control investments     —       —       —       —  
    Affiliate investments     5       5       15       60  
    Non-control/non-affiliate investments     2,688       2,250       6,559       5,868  
    Total fee income     2,693       2,255       6,574       5,928  
    Interest on idle funds     597       566       2,738       1,824  
    Total investment income     38,382       34,185       108,697       93,799  
    Expenses:                        
    Interest and financing expenses     6,026       5,985       18,100       16,761  
    Base management fee     4,848       4,161       13,986       12,066  
    Incentive fee – income     5,059       4,478       14,072       11,959  
    Incentive fee (reversal) – capital gains     (987 )     1,528       942       507  
    Administrative service expenses     688       581       1,894       1,672  
    Professional fees     567       587       2,469       2,044  
    Other general and administrative expenses     266       269       764       773  
    Total expenses before base management fee waiver     16,467       17,589       52,227       45,782  
    Base management fee waiver     (64 )     (72 )     (200 )     (216 )
    Total expenses, net of base management fee waiver     16,403       17,517       52,027       45,566  
    Net investment income before income taxes     21,979       16,668       56,670       48,233  
    Income tax provision (benefit)     568       8       682       66  
    Net investment income     21,411       16,660       55,988       48,167  
    Net realized and unrealized gains (losses) on investments:                        
    Net realized gains (losses):                        
    Control investments     —       —       —       (11,458 )
    Affiliate investments     —       1       —       100  
    Non-control/non-affiliate investments     (366 )     9,749       12,161       15,625  
    Total net realized gain (loss) on investments     (366 )     9,750       12,161       4,267  
    Income tax (provision) benefit from realized gains on investments     —       (31 )     (1,523 )     (1,569 )
    Net change in unrealized appreciation (depreciation):                        
    Control investments     —       —       —       11,083  
    Affiliate investments     2,075       (4,507 )     417       (9,109 )
    Non-control/non-affiliate investments     (6,643 )     2,450       (5,823 )     (2,113 )
    Total net change in unrealized appreciation (depreciation) on investments     (4,568 )     (2,057 )     (5,406 )     (139 )
    Net gain (loss) on investments     (4,934 )     7,662       5,232       2,559  
    Realized losses on extinguishment of debt     —       (23 )     (521 )     (23 )
    Net increase (decrease) in net assets resulting from operations   $ 16,477     $ 24,299     $ 60,699     $ 50,703  
    Per common share data:                        
    Net investment income per share-basic and diluted   $ 0.64     $ 0.63     $ 1.74     $ 1.89  
    Net increase in net assets resulting from operations per share — basic and diluted   $ 0.49     $ 0.91     $ 1.89     $ 1.99  
    Dividends declared per share   $ 0.57     $ 0.72     $ 1.81     $ 2.08  
    Weighted average number of shares outstanding — basic and diluted     33,380,480       26,618,973       32,138,865       25,490,379  

    Schedule 1

    Supplemental Information Regarding Adjusted Net Investment Income

    On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure.  This measure is provided in addition to, but not as a substitute for, net investment income. Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses.  The management agreement with our investment advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses for such year, less the aggregate amount of any capital gains incentive fees paid in all prior years.  In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate.  As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. The following table provides a reconciliation of net investment income to adjusted net investment income for the three and nine months ended September 30, 2024 and 2023.

              ($ in thousands)     ($ in thousands)  
              Three Months Ended     Nine Months Ended  
              September 30,     September 30,  
              (unaudited)     (unaudited)  
              2024     2023     2024     2023  
    Net investment income         $ 21,411     $ 16,660     $ 55,988     $ 48,167  
    Capital gains incentive fee expense (reversal)           (987 )     1,528       942       507  
    Adjusted net investment income (1)         $ 20,424     $ 18,188     $ 56,930     $ 48,674  
              (Per share)     (Per share)  
              Three Months Ended     Nine Months Ended  
              September 30,     September 30,  
              (unaudited)     (unaudited)  
              2024     2023     2024     2023  
    Net investment income         $ 0.64     $ 0.63     $ 1.74     $ 1.89  
    Capital gains incentive fee expense (reversal)           (0.03 )     0.05       0.03       0.02  
    Adjusted net investment income (1)         $ 0.61     $ 0.68     $ 1.77     $ 1.91  
    (1 ) Adjusted net investment income per share amounts are calculated as adjusted net investment income dividend by weighted average shares outstanding for the period. Due to rounding, the sum of net investment income per share and capital gains incentive fee expense (reversal) amounts may not equal the adjusted net investment income per share amount presented here.
    Company Contact: Investor Relations Contact:
    Shelby E. Sherard Jody Burfening
    Chief Financial Officer LHA
    (847) 859-3940 (212) 838-3777
    ssherard@fidusinv.com jburfening@lhai.com

    The MIL Network –

  • MIL-OSI: Bimini Capital Management Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    VERO BEACH, Fla., Oct. 31, 2024 (GLOBE NEWSWIRE) — Bimini Capital Management, Inc. (OTCQB: BMNM), (“Bimini Capital,” “Bimini,” or the “Company”), today announced results of operations for the three-month period ended September 30, 2024.

    Third Quarter 2024 Highlights

    • Net income of $0.3 million, or $0.03 per common share
    • Book value per share of $0.83
    • Company to discuss results on Friday, November 1, 2024, at 10:00 AM ET

    Management Commentary

    Commenting on the third quarter results, Robert E. Cauley, Chairman and Chief Executive Officer, said, “The long-awaited impacts of tight monetary policy orchestrated by the Federal Reserve appear to have finally had the desired impacts on inflation and the imbalances in the labor market. Inflation is closing in on the Fed’s 2% target and hiring and wage growth are slowing while the unemployment rate has steadily risen. In contrast, growth in the economy and consumer spending have remained robust throughout. In late September the Fed reduced the overnight funding rate by 50 basis points, and the market anticipated it was the first of many such cuts.  Unfortunately, the non-farm payroll report for September 2024, released in early October, as well as the latest readings on inflation and consumer spending, imply the economy may not be weakening so much after-all. If this proves to be the case the magnitude and urgency of additional rate cuts by the Fed may differ with those market expectations mentioned above.

    “Orchid Island Capital reported net income for the third quarter 2024 of $17.3 million and its shareholders equity increased from $555.9 million to $656.0 million. As a result, Bimini’s advisory service revenues of approximately $3.3 million represented a 4% increase over the second quarter. The growth in Orchid’s capital base during the third quarter would translate into higher quarterly revenues – all else equal – for a full quarter. As mentioned above, if the Fed’s easing cycle proves to be brief and the economy remains resilient, capital raising opportunities for Orchid may not materialize in the near term.

    “The investment portfolio generated net interest income of $0.3 million inclusive of dividends on our shares of Orchid Island. Mark to market gains and losses on our MBS portfolio, hedge positions and shares of Orchid netted to income of $0.4 million. The Company – inclusive of both the advisory services segment and the investment portfolio segment, recorded net income before taxes for the quarter of $0.8 million versus a net loss before taxes of $0.2 million for the second quarter of 2024.”

    Details of Third Quarter 2024 Results of Operations

    The Company reported net income of $0.3 million for the three-month period ended September 30, 2024. Advisory service revenue for the quarter was $3.3 million. We recorded interest and dividend income of $1.7 million and interest expense on repurchase agreements of $1.4 million and on long-term debt of $0.6 million. We recorded an unrealized $0.1 million mark to market loss on our shares of Orchid common stock, net unrealized gains of $2.5 million on our MBS portfolio and net losses of $2.0 million on our derivative holdings. The results for the quarter also included operating expenses of $2.6 million and an income tax provision of $0.5 million.

    Management of Orchid Island Capital, Inc.

    Orchid is managed and advised by Bimini. As Manager, Bimini is responsible for administering Orchid’s business activities and day-to-day operations. Pursuant to the terms of the management agreement, Bimini Advisors provides Orchid with its management team, including its officers, along with appropriate support personnel. Bimini also maintains a common stock investment in Orchid which is accounted for under the fair value option, with changes in fair value recorded in the statement of operations for the current period. For the three months ended September 30, 2024, Bimini’s statement of operations included a fair value adjustment of $(0.1) million and dividends of $0.2 million from its investment in Orchid’s common stock. Also, during the three months ended September 30, 2024, Bimini recorded $3.3 million in advisory services revenue for managing Orchid’s portfolio consisting of $2.4 million of management fees, $0.6 million in overhead reimbursement and $0.2 million in repurchase, clearing and administrative fees.

    Book Value Per Share

    The Company’s Book Value Per Share on September 30, 2024 was $0.83. The Company computes Book Value Per Share by dividing total stockholders’ equity by the total number of shares outstanding of the Company’s Class A Common Stock. At September 30, 2024, the Company’s stockholders’ equity was $8.3 million, with 10,005,457 Class A Common shares outstanding.

    Capital Allocation and Return on Invested Capital

    The Company allocates capital between two MBS sub-portfolios, the pass-through MBS portfolio (“PT MBS”) and the structured MBS portfolio, consisting of interest only (“IO”) and inverse interest-only (“IIO”) securities. The table below details the changes to the respective sub-portfolios during the quarter.

       
    Portfolio Activity for the Quarter
                Structured Security Portfolio        
                    Inverse                
        Pass   Interest   Interest                
        Through   Only   Only                
        Portfolio   Securities   Securities   Sub-total   Total
    Market Value – June 30, 2024   $ 83,960,741     $ 2,450,477     $ 3,501     $ 2,453,978     $ 86,414,719  
    Securities purchased     31,715,015       –       –       –       31,715,015  
    Return of investment     n/a       (84,011 )     (162 )     (84,173 )     (84,173 )
    Pay-downs     (2,097,231 )     n/a       n/a       n/a       (2,097,231 )
    Discount accreted due to pay-downs     16,953       n/a       n/a       n/a       16,953  
    Mark to market gains     2,453,793       4,468       5,106       9,574       2,463,367  
    Market Value – September 30, 2024   $ 116,049,271     $ 2,370,934     $ 8,445     $ 2,379,379     $ 118,428,650  
                                             

    The tables below present the allocation of capital between the respective portfolios at September 30, 2024 and June 30, 2024, and the return on invested capital for each sub-portfolio for the three-month period ended September 30, 2024. Capital allocation is defined as the sum of the market value of securities held, less associated repurchase agreement borrowings, plus cash and cash equivalents and restricted cash associated with repurchase agreements. Capital allocated to non-portfolio assets is not included in the calculation.

       
    Capital Allocation
                Structured Security Portfolio        
                    Inverse                
        Pass   Interest   Interest                
        Through   Only   Only                
        Portfolio   Securities   Securities   Sub-total   Total
    September 30, 2024                                        
    Market value   $ 116,049,271     $ 2,370,934     $ 8,445     $ 2,379,379     $ 118,428,650  
    Cash equivalents and restricted cash     5,706,502       –       –       –       5,706,502  
    Repurchase agreement obligations     (113,022,999 )     –       –       –       (113,022,999 )
    Total(1)   $ 8,732,774     $ 2,370,934     $ 8,445     $ 2,379,379     $ 11,112,153  
    % of Total     78.6 %     21.3 %     0.1 %     21.4 %     100.0 %
    June 30, 2024                                        
    Market value   $ 83,960,741     $ 2,450,477     $ 3,501     $ 2,453,978     $ 86,414,719  
    Cash equivalents and restricted cash     6,223,538       –       –       –       6,223,538  
    Repurchase agreement obligations     (82,875,999 )     –       –       –       (82,875,999 )
    Total(1)   $ 7,308,280     $ 2,450,477     $ 3,501     $ 2,453,978     $ 9,762,258  
    % of Total     74.9 %     25.1 %     0.0 %     25.1 %     100.0 %
                                             

    The returns on invested capital in the PT MBS and structured MBS portfolios were approximately 7.5% and 2.1%, respectively, for the three months ended September 30, 2024. The combined portfolio generated a return on invested capital of approximately 6.2%.

       
    Returns for the Quarter Ended September 30, 2024
                Structured Security Portfolio        
                    Inverse                
        Pass   Interest   Interest                
        Through   Only   Only                
        Portfolio   Securities   Securities   Sub-total   Total
    Interest income (expense) (net of repo cost)   $ 71,254     $ 40,897     $ (15 )   $ 40,882     $ 112,136  
    Realized and unrealized gains     2,470,746       4,468       5,106       9,574       2,480,320  
    Hedge losses     (1,991,315 )     n/a       n/a       n/a       (1,991,315 )
    Total Return   $ 550,685     $ 45,365     $ 5,091     $ 50,456     $ 601,141  
    Beginning capital allocation   $ 7,308,280     $ 2,450,477     $ 3,501     $ 2,453,978     $ 9,762,258  
    Return on invested capital for the quarter(1)     7.5 %     1.9 %     145.4 %     2.1 %     6.2 %
    (1)   Calculated by dividing the Total Return by the Beginning Capital Allocation, expressed as a percentage.
         

    Prepayments

    For the third quarter of 2024, the Company received approximately $2.2 million in scheduled and unscheduled principal repayments and prepayments, which equated to a 3-month constant prepayment rate (“CPR”) of approximately 6.3% for the third quarter of 2024. Prepayment rates on the two MBS sub-portfolios were as follows (in CPR):

                 
        PT   Structured    
        MBS Sub-   MBS Sub-   Total
    Three Months Ended   Portfolio   Portfolio   Portfolio
    September 30, 2024   6.3   6.7   6.3
    June 30, 2024   10.9   5.5   10.0
    March 31, 2024   18.0   9.2   16.5
    December 31, 2023   8.9   4.6   8.0
    September 30, 2023   4.3   6.6   4.8
    June 30, 2023   8.0   13.0   9.6
    March 31, 2023   2.4   10.3   5.0
                 

    Portfolio

    The following tables summarize the MBS portfolio as of September 30, 2024 and December 31, 2023:

    ($ in thousands)                                    
                                Weighted    
                Percentage           Average    
                of   Weighted   Maturity    
        Fair   Entire   Average   in   Longest
    Asset Category   Value   Portfolio   Coupon   Months   Maturity
    September 30, 2024                                    
    Fixed Rate MBS   $ 116,050       98.0 %     5.61 %     342     1-Apr-54
    Structured MBS     2,379       2.0 %     2.85 %     283     15-May-51
    Total MBS Portfolio   $ 118,429       100.0 %     5.24 %     341     1-Apr-54
    December 31, 2023                                    
    Fixed Rate MBS   $ 90,181       97.3 %     6.00 %     343     1-Nov-53
    Structured MBS     2,550       2.7 %     2.84 %     290     15-May-51
    Total MBS Portfolio   $ 92,731       100.0 %     5.44 %     341     1-Nov-53
    ($ in thousands)                                
        September 30, 2024   December 31, 2023
                Percentage of           Percentage of
    Agency   Fair Value   Entire Portfolio   Fair Value   Entire Portfolio
    Fannie Mae   $ 35,338       29.8 %   $ 38,204       41.2 %
    Freddie Mac     83,091       70.2 %     54,527       58.8 %
    Total Portfolio   $ 118,429       100.0 %   $ 92,731       100.0 %
        September 30, 2024   December 31, 2023
    Weighted Average Pass Through Purchase Price   $ 102.99     $ 104.43  
    Weighted Average Structured Purchase Price   $ 4.48     $ 4.48  
    Weighted Average Pass Through Current Price   $ 102.06     $ 101.55  
    Weighted Average Structured Current Price   $ 13.68     $ 13.46  
    Effective Duration(1)     2.627       2.508  
    (1)   Effective duration is the approximate percentage change in price for a 100 basis point change in rates. An effective duration of 2.627 indicates that an interest rate increase of 1.0% would be expected to cause a 2.627% decrease in the value of the MBS in the Company’s investment portfolio at September 30, 2024. An effective duration of 2.508 indicates that an interest rate increase of 1.0% would be expected to cause a 2.508% decrease in the value of the MBS in the Company’s investment portfolio at December 31, 2023. These figures include the structured securities in the portfolio but not the effect of the Company’s hedges. Effective duration quotes for individual investments are obtained from The Yield Book, Inc.
         

    Financing and Liquidity

    As of September 30, 2024, the Company had outstanding repurchase obligations of approximately $113.0 million with a net weighted average borrowing rate of 5.20%. These agreements were collateralized by MBS with a fair value, including accrued interest, of approximately $118.8 million. At September 30, 2024, the Company’s liquidity was approximately $4.7 million, consisting of unpledged MBS and cash and cash equivalents.

    We may pledge more of our structured MBS as part of a repurchase agreement funding but retain cash in lieu of acquiring additional assets. In this way, we can, at a modest cost, retain higher levels of cash on hand and decrease the likelihood we will have to sell assets in a distressed market in order to raise cash. Below is a list of outstanding borrowings under repurchase obligations at September 30, 2024.

    ($ in thousands)                                
    Repurchase Agreement Obligations
                        Weighted   Weighted
        Total           Average   Average
        Outstanding   % of   Borrowing   Maturity
    Counterparty   Balances   Total   Rate   (in Days)
    Marex Capital Markets Inc.   $ 26,185       23.2 %     5.21 %     17  
    Mirae Asset Securities (USA) Inc.     20,016       17.7 %     5.25 %     18  
    DV Securities, LLC Repo     19,930       17.6 %     5.06 %     28  
    Clear Street LLC     17,894       15.8 %     5.31 %     33  
    South Street Securities, LLC     17,126       15.2 %     5.03 %     24  
    Mitsubishi UFJ Securities, Inc.     11,872       10.5 %     5.37 %     25  
        $ 113,023       100.0 %     5.20 %     24  
    (1)   Equal to the fair value of securities sold (including accrued interest receivable) and cash posted as collateral, if any, minus the sum of repurchase agreement liabilities, accrued interest payable and securities posted by the counterparty (if any).
         

    Summarized Consolidated Financial Statements

    The following is a summarized presentation of the unaudited consolidated balance sheets as of September 30, 2024, and December 31, 2023, and the unaudited consolidated statements of operations for the nine and three months ended September 30, 2024 and 2023. Amounts presented are subject to change.

     
    BIMINI CAPITAL MANAGEMENT, INC.
    CONSOLIDATED BALANCE SHEETS
    (Unaudited – Amounts Subject to Change)
                 
        September 30, 2024   December 31, 2023
    ASSETS                
    Mortgage-backed securities   $ 118,428,650     $ 92,730,852  
    Cash equivalents and restricted cash     5,706,502       4,470,286  
    Orchid Island Capital, Inc. common stock, at fair value     4,677,763       4,797,269  
    Accrued interest receivable     572,506       488,660  
    Deferred tax assets, net     17,995,449       19,047,680  
    Other assets     4,251,713       4,063,267  
    Total Assets   $ 151,632,583     $ 125,598,014  
                     
    LIABILITIES AND STOCKHOLDERS’ EQUITY                
    Repurchase agreements   $ 113,022,999     $ 86,906,999  
    Long-term debt     27,373,739       27,394,417  
    Other liabilities     2,912,616       3,168,857  
    Total Liabilities     143,309,354       117,470,273  
    Stockholders’ equity     8,323,229       8,127,741  
    Total Liabilities and Stockholders’ Equity   $ 151,632,583     $ 125,598,014  
    Class A Common Shares outstanding     10,005,457       10,005,457  
    Book value per share   $ 0.83     $ 0.81  
                     
     
    BIMINI CAPITAL MANAGEMENT, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited – Amounts Subject to Change)
                 
        Nine Months Ended September 30,   Three Months Ended September 30,
        2024   2023   2024   2023
    Advisory services   $ 9,396,828     $ 10,518,862     $ 3,300,512     $ 3,620,002  
    Interest and dividend income     4,781,408       2,781,763       1,690,252       1,111,659  
    Interest expense     (5,558,657 )     (3,624,861 )     (1,980,863 )     (1,441,371 )
    Net revenues     8,619,579       9,675,764       3,009,901       3,290,290  
    Other income (expense)     1,067,454       (2,466,795 )     420,726       (2,360,590 )
    Expenses     8,439,314       6,657,293       2,627,343       2,105,424  
    Net income (loss) before income tax provision (benefit)     1,247,719       551,676       803,284       (1,175,724 )
    Income tax provision (benefit)     1,052,231       (320,596 )     547,059       (757,016 )
    Net income (loss)   $ 195,488     $ 872,272     $ 256,225     $ (418,708 )
                                     
    Basic and Diluted Net (Loss) Income Per Share of:                                
    CLASS A COMMON STOCK   $ 0.02     $ 0.09     $ 0.03     $ (0.04 )
    CLASS B COMMON STOCK   $ 0.02     $ 0.09     $ 0.03     $ (0.04 )
        Three Months Ended September 30,
    Key Balance Sheet Metrics   2024   2023
    Average MBS(1)   $ 102,421,681     $ 74,315,815  
    Average repurchase agreements(1)     97,949,499       71,055,794  
    Average stockholders’ equity(1)     8,195,116       13,199,138  
                     
    Key Performance Metrics                
    Average yield on MBS(2)     5.80 %     4.51 %
    Average cost of funds(2)     5.61 %     4.68 %
    Average economic cost of funds(3)     5.75 %     4.74 %
    Average interest rate spread(4)     0.19 %     (0.17 )%
    Average economic interest rate spread(5)     0.05 %     (0.23 )%
    (1)   Average MBS, repurchase agreements and stockholders’ equity balances are calculated using two data points, the beginning and ending balances.
    (2)   Portfolio yields and costs of funds are calculated based on the average balances of the underlying investment portfolio/repurchase agreement balances and are annualized for the quarterly periods presented.
    (3)   Represents interest cost of our borrowings and the effect of derivative agreements attributed to the period related to hedging activities, divided by average repurchase agreements.
    (4)   Average interest rate spread is calculated by subtracting average cost of funds from average yield on MBS.
    (5)   Average economic interest rate spread is calculated by subtracting average economic cost of funds from average yield on MBS.
         

    About Bimini Capital Management, Inc.

    Bimini Capital Management, Inc. invests primarily in, but is not limited to investing in, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). Its objective is to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows. In addition, Bimini generates a significant portion of its revenue serving as the manager of the MBS portfolio of, and providing certain repurchase agreement trading, clearing and administrative services to, Orchid Island Capital, Inc.

    Forward Looking Statements

    Statements herein relating to matters that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements are based on information available at the time and on management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in such forward-looking statements. Important factors that could cause such differences are described in Bimini Capital Management, Inc.’s filings with the Securities and Exchange Commission, including Bimini Capital Management, Inc.’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Bimini Capital Management, Inc. assumes no obligation to update forward-looking statements to reflect subsequent results, changes in assumptions or changes in other factors affecting forward-looking statements.

    Earnings Conference Call Details

    An earnings conference call and live audio webcast will be hosted Friday, November 1, 2024, at 10:00 AM ET. Participants can register and receive dial-in information at https://register.vevent.com/register/BI909b06944b334b3e8e769108f5807eab. A live audio webcast of the conference call can be accessed at https://edge.media-server.com/mmc/p/qzvibaf6 or via the investor relations section of the Company’s website at https://ir.biminicapital.com. An audio archive of the webcast will be available for 30 days after the call.

    The MIL Network –

  • MIL-OSI: Sound Financial Bancorp, Inc. Q3 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    SEATTLE, Oct. 30, 2024 (GLOBE NEWSWIRE) — Sound Financial Bancorp, Inc. (the “Company”) (Nasdaq: SFBC), the holding company for Sound Community Bank (the “Bank”), today reported net income of $1.2 million for the quarter ended September 30, 2024, or $0.45 diluted earnings per share, as compared to net income of $795 thousand, or $0.31 diluted earnings per share, for the quarter ended June 30, 2024, and $1.2 million, or $0.45 diluted earnings per share, for the quarter ended September 30, 2023. The Company also announced today that its Board of Directors declared a cash dividend on common stock of $0.19 per share, payable on November 26, 2024 to stockholders of record as of the close of business on November 12, 2024.

    Comments from the President and Chief Executive Officer

    “For the first time in our history, loans surpassed $900 million, and we continued to grow deposits. These production improvements came as we held operating expenses steady, demonstrating our ability to grow the Bank efficiently,” remarked Laurie Stewart, President and Chief Executive Officer. “We also completed a major upgrade to our online banking services and have received positive feedback on this from our clients,” concluded Ms. Stewart.

    “Net income increased 45% from the prior quarter primarily due to the improvement in our net interest margin, which was driven by the repricing and origination of new loans at higher market rates. At the same time, funding costs increased at a slower pace, as the majority of our deposits had already been repriced. We also made progress in transitioning time deposits to savings and money market accounts, which typically carry lower rates and provide more flexibility for future repricing,” explained Wes Ochs, Executive Vice President and Chief Financial Officer.

    Mr. Ochs continued, “As always, we remain focused on maintaining strong asset quality. Non-performing loans decreased from the prior quarter-end and we are actively utilizing available remedies to address the remaining problem loans.”

    Q3 2024 Financial Performance
    Total assets increased $26.1 million or 2.4% to $1.10 billion at September 30, 2024, from $1.07 billion at June 30, 2024, and increased $70.8 million or 6.9% from $1.03 billion at September 30, 2023.     Net interest income increased $425 thousand or 5.7% to $7.9 million for the quarter ended September 30, 2024, from $7.4 million for the quarter ended June 30, 2024, and decreased $295 thousand or 3.6% from $8.2 million for the quarter ended September 30, 2023.
       
        Net interest margin (“NIM”), annualized, was 2.98% for the quarter ended September 30, 2024, compared to 2.92% for the quarter ended June 30, 2024 and 3.38% for the quarter ended September 30, 2023.
    Loans held-for-portfolio increased $12.5 million or 1.4% to $901.7 million at September 30, 2024, compared to $889.3 million at June 30, 2024, and increased $26.3 million or 3.0% from $875.4 million at September 30, 2023.    
        An $8 thousand provision for credit losses was recorded for the quarter ended September 30, 2024, compared to a $109 thousand and a $75 thousand release of provision for credit losses for the quarters ended June 30, 2024 and September 30, 2023, respectively. At September 30, 2024, the allowance for credit losses on loans to total loans outstanding was 0.95%, compared to 0.96% at both June 30, 2024 and September 30, 2023.
    Total deposits increased $23.4 million or 2.6% to $930.2 million at September 30, 2024, from $906.8 million at June 30, 2024, and increased $69.3 million or 8.1% from $860.9 million at September 30, 2023. Noninterest-bearing deposits increased $4.8 million or 3.8% to $129.7 million at September 30, 2024 compared to $124.9 million at June 30, 2024, and decreased $24.2 million or 15.7% compared to $153.9 million at September 30, 2023.    
        Total noninterest income increased $73 thousand or 6.3% to $1.2 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and increased $154 thousand or 14.2% compared to the quarter ended September 30, 2023.
    The loans-to-deposits ratio was 97% at September 30, 2024, compared to 98% at June 30, 2024 and 102% at September 30, 2023.    
        Total noninterest expense decreased $58 thousand or 0.7% to $7.7 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and decreased $31 thousand or 0.4% from compared to the quarter ended September 30, 2023.
    Total nonperforming loans decreased $420 thousand or 4.7% to $8.5 million at September 30, 2024, from $8.9 million at June 30, 2024, and increased $6.7 million or 381.8% from $1.8 million at September 30, 2023. Nonperforming loans to total loans was 0.94% and the allowance for credit losses on loans to total nonperforming loans was 101.13% at September 30, 2024.    
        The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as “well-capitalized” at September 30, 2024.
           
             

    Operating Results

    Net interest income increased $425 thousand, or 5.7%, to $7.9 million for the quarter ended September 30, 2024, compared to $7.4 million for the quarter ended June 30, 2024, and decreased $295 thousand, or 3.6%, from $8.2 million for the quarter ended September 30, 2023.The increase from the prior quarter was primarily due to a higher average yield on interest-earning assets, particularly loans receivable, and an increase in the average balances of both loans receivable and interest-earning cash. This was partially offset by a more modest rise in the cost of funds, as higher cost earnings interest-bearing deposits decreased by the end of the third quarter of 2024, limiting the growth in funding costs compared to the prior quarter. The decrease in net interest income compared to the same quarter one year ago was primarily due to higher funding costs, specifically, increased rates on and balances of money market and certificate accounts, partially offset by an increase in the average yield earned on interest-earning assets.

    Interest income increased $799 thousand, or 5.7%, to $14.8 million for the quarter ended September 30, 2024, compared to $14.0 million for the quarter ended June 30, 2024, and increased $2.2 million, or 17.0%, from $12.7 million for the quarter ended September 30, 2023. The increase from the prior quarter was primarily due to a higher average balance of loans and interest-bearing cash, along with a 14 basis point increase in the average loan yield, reflecting higher rates on newly originated loans and upward adjustments to rates on existing variable rate loans. The increase in interest income compared to the same quarter last year was due primarily to higher average balances of loans and interest-bearing cash, a 41 basis point increase in the average yield on loans, a 20 basis point increase in the average yield on interest-bearing cash, and a seven basis point increase in the average yield on investments, partially offset by a decline in the average balance of investments.

    Interest income on loans increased $556 thousand, or 4.5%, to $12.9 million for the quarter ended September 30, 2024, compared to $12.3 million for the quarter ended June 30, 2024, and increased $1.4 million, or 11.9%, from $11.5 million for the quarter ended September 30, 2023. The average balance of total loans was $898.6 million for the quarter ended September 30, 2024, up from $891.9 million for the quarter ended June 30, 2024 and $862.4 million for the quarter ended September 30, 2023. The average yield on total loans was 5.70% for the quarter ended September 30, 2024, up from 5.56% for the quarter ended June 30, 2024 and 5.29% for the quarter ended September 30, 2023. The increase in the average loan yield during the current quarter, compared to both the prior quarter and the third quarter of 2023, was primarily due to the origination of new loans at higher interest rates. Additionally, variable-rate loans resetting to higher rates contributed to the increase in average yield compared to the third quarter of 2023. The increase in the average balance during the current quarter compared to the prior quarter was primarily due to growth in commercial and multifamily loans, manufactured housing loans and consumer loans, with the growth in consumer loans coming primarily from floating home loans. This was partially offset by a decline in construction and land loans. The average balances for commercial business loans and one-to-four family loans remained relatively flat from the second quarter of 2024. The increase in the average balance of loans during the current quarter compared to the third quarter of 2023 was primarily due to loan growth across all categories, except for one-to-four family loans, construction and land loans, and commercial business loans, with the largest decrease being in construction and land loans.

    Interest income on investments was $132 thousand for the quarter ended September 30, 2024, compared to $133 thousand for the quarter ended June 30, 2024, and $139 thousand for the quarter ended September 30, 2023. Interest income on interest-bearing cash increased $244 thousand to $1.8 million for the quarter ended September 30, 2024, compared to $1.6 million for the quarter ended June 30, 2024, and increased $788 thousand from $1.0 million for the quarter ended September 30, 2023. These increases were due to higher average balances of interest-bearing cash, with the increase from the same quarter in the prior year also resulting from a higher average yield.

    Interest expense increased $374 thousand, or 5.7%, to $7.0 million for the quarter ended September 30, 2024, from $6.6 million for the quarter ended June 30, 2024, and increased $2.4 million, or 54.2%, from $4.5 million for the quarter ended September 30, 2023. The increase in interest expense during the current quarter from the prior quarter was primarily the result of a $38.8 million increase in the average balance of savings and money market accounts, as well as higher average rates paid on these accounts, partially offset by a $13.9 million decrease in the average balance of certificate accounts. The increase in interest expense during the current quarter from the comparable period a year ago was primarily the result of a $9.8 million increase in the average balance of certificate accounts and a $148.1 million increase in the average balance of savings and money market accounts, as well as higher average rates paid on all interest-bearing deposits. This was partially offset by a $46.3 million decrease in the average balance of demand and NOW accounts and a $2.8 million decrease in the average balance of FHLB advances. The average cost of deposits was 2.74% for the quarter ended September 30, 2024, up from 2.67% for the quarter ended June 30, 2024 and 1.85% for the quarter ended September 30, 2023. The average cost of FHLB advances was 4.32% for both the quarters ended September 30, 2024 and June 30, 2024, and down from 4.38% for the quarter ended September 30, 2023.

    NIM (annualized) was 2.98% for the quarter ended September 30, 2024, up from 2.92% for the quarter ended June 30, 2024 and down from 3.38% for the quarter ended September 30, 2023. The increase in NIM from the prior quarter was result of an increase in interest income on interest-earning assets, partially offset by an increase in the cost of funding. The decrease in NIM from the quarter one year ago was primarily due to the cost of funding increasing at a faster pace than the yield earned on interest-earning assets, driven by the higher average balance of higher costing money market and certificate accounts.

    A provision for credit losses of $8 thousand was recorded for the quarter ended September 30, 2024, consisting of a provision for credit losses on loans of $106 thousand and a release of provision for credit losses on unfunded loan commitments of $98 thousand. This compared to a release of provision for credit losses of $109 thousand for the quarter ended June 30, 2024, consisting of a release of provision for credit losses on loans of $88 thousand and a release of provision for credit losses on unfunded loan commitments of $21 thousand, and a provision for credit losses of $75 thousand for the quarter ended September 30, 2023, consisting of a provision for credit losses on loans of $224 thousand and a release of the provision for credit losses on unfunded loan commitments of$149 thousand. The increase in the provision for credit losses for the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024 resulted primarily from growth in the loan portfolio and higher quantitative loss rates, which were influenced by a forecast of higher unemployment, and enhancements to the loss model, including an additional qualitative adjustment related to loan review. These adjustments were partially offset by decline in the balance of the construction loan portfolio, which typically has higher loss rates, and a decrease in the qualitative risk adjustment for construction loans as projects were completed and market conditions improved. Expected loss estimates consider various factors, such as market conditions, borrower -specific information, projected delinquencies, and the impact of economic conditions on borrowers’ ability to repay.

    Noninterest income increased $73 thousand, or 6.3%, to $1.2 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and increased $154 thousand, or 14.2%, compared to the quarter ended September 30, 2023. The increase from the prior quarter was primarily related to a $217 thousand upward adjustment in fair value of mortgage servicing rights and a $52 thousand increase in earnings from bank-owned life insurance (“BOLI”), both influenced by fluctuating market interest rates. These gains were partially offset by a $133 thousand decrease in service charges and fee income, which was elevated in the prior quarter due to the recovery of potential future lost fee income due to vendor error. Additionally, there was a $34 thousand decrease in net gain on sale of loans, due to lower sales volume, and a $30 thousand decrease in gain on disposal of assets due to insurance claims on the loss of fully depreciated assets in second quarter of 2024. The increase in noninterest income from the comparable period in 2023 was primarily due to an $98 thousand increase in earnings on BOLI due to market rate fluctuations, and an $179 thousand increase in the fair value adjustment on mortgage servicing rights due to changes in prepayment speeds, servicing costs, and discount rate. These increases were partially offset by a $72 thousand decrease in service charges and fee income primarily due to a volume incentive paid by Mastercard in 2023, a $36 thousand decrease in net gain on sale of loans for reason similar to those noted above, and a decrease in mortgage servicing income as a result of the portfolio paying down at a faster rate than we are replacing the loans. Additionally, mortgage servicing income decreased by $15 thousand compared to the third quarter of 2023. Loans sold during the quarter ended September 30, 2024, totaled $2.4 million, compared to $4.0 million and $4.4 million of loans sold during the quarters ended June 30, 2024 and September 30, 2023, respectively.

    Noninterest expense decreased $58 thousand, or 0.7%, to $7.7 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and decreased $31 thousand, or 0.4%, from the quarter ended September 30, 2023. The decrease from the quarter ended June 30, 2024 was primarily a result of lower a $189 thousand decrease in salaries and benefits, primarily due to lower incentive compensation accruals. This was partially offset by an $157 thousand increase in data processing expenses, largely due to a vendor reimbursement received in the previous quarter for software implementation costs. Additionally, regulatory assessments declined $31 thousand due to a lower accrual for exam costs. Compared to same quarter in 2023, the decrease in noninterest expense was primarily due to lower operations, data processing, and occupancy expenses, which were partially offset by a $321 thousand increase in salaries and benefits. Operations expenses decreased due to reduction in loan originations costs, office expenses, marketing costs, legal fees, and charitable contributions, partially offset by an operational loss from a fraudulently obtained loan charged off in the third quarter of 2024. Data processing expenses decreased due to one-time costs related to new technology implemented in 2023, while occupancy expenses decreased primarily due fully amortized leasehold improvements. The increase in salaries and benefits compared to the third quarter of 2023 reflected higher incentive compensation, medical expenses, retirement plan costs, and directors’ fees (due to the addition of a new director), partially offset by lower salaries from a restructuring of positions at the end of 2023.

    Balance Sheet Review, Capital Management and Credit Quality

    Assets at September 30, 2024 totaled $1.10 billion, an increase from $1.07 billion at June 30, 2024 and $1.03 billion at September 30, 2023. The increase in total assets from June 30, 2024 and one year ago was primarily due to an increase in cash and cash equivalents and in loans held-for-portfolio.

    Cash and cash equivalents increased $13.8 million, or 10.2%, to $148.9 million at September 30, 2024, compared to $135.1 million at June 30, 2024, and increased $47.0 million, or 46.2%, from $101.9 million at September 30, 2023. The increase from the prior quarter and from one year ago was primarily due to the increase in deposits exceeding the increase in loans held-for-portfolio.

    Investment securities increased $28 thousand, or 0.3%, to $10.2 million at September 30, 2024, compared to $10.1 million at June 30, 2024, and increased $17 thousand, or 0.2%, from $10.2 million at September 30, 2023. Held-to-maturity securities totaled $2.1 million at both September 30, 2024 and June 30, 2024, and totaled $2.2 million at September 30, 2023. Available-for-sale securities totaled $8.0 million at September 30, 2024, June 30, 2024 and September 30, 2023.

    Loans held-for-portfolio were $901.7 million at September 30, 2024, compared to $889.3 million at June 30, 2024 and $875.4 million at September 30, 2023. The increase from to June 30, 2024, primarily resulted from growth in one-to-four family home loans, commercial and multifamily loans, as well as manufactured home and floating home loans, partially offset by decreases in construction and land loans and home equity loans. The increase in one-to-four family home loans was primarily due to new originations exceeding prepayments during the quarter, while the increase in commercial and multifamily loans primarily resulted from conversion of construction projects to permanent financing. The increase in manufactured home loans and floating home loans relates to continued strong demand for this type of financing in our market. The decrease in construction and land loans was primarily due to project completions and reduced demand caused by higher interest rates, which limited new financing opportunities. The decrease in home equity loans reflected normal payment fluctuations. Compared to September 30, 2024, the overall increase in loans held-for-portfolio was due to sustained strong loan demand and slower prepayment activity, with increases primarily related to commercial and multifamily loans, home equity loans, manufactured home loans and floating home loans.

    Nonperforming assets (“NPAs”), which are comprised of nonaccrual loans (including nonperforming modified loans), other real estate owned (“OREO”) and other repossessed assets, decreased $420 thousand, or 4.7%, to $8.6 million at September 30, 2024, from $9.0 million at June 30, 2024 and increased $6.3 million, or 268.2%, from $2.3 million at September 30, 2023. The decrease in NPAs from June 30, 2024 was primarily due to the payoff of three loans totaling $175 thousand and one loan totaling $421 thousand returning to accrual status, partially offset by the addition of eight loans totaling $260 thousand to nonaccrual. The increase in NPAs from one year ago was primarily due to the placement of an additional $7.7 million of loans on nonaccrual status, which included a $3.7 million matured commercial real estate loan where the borrower is in the process of securing financing from another lender, a $2.4 million floating home loan, and a $985 thousand commercial real estate loan, all of which are well secured, and one manufactured home loan of $115 thousand that was repossessed in the first quarter of 2024. These additions were partially offset by the payoff of seven loans totaling $877 thousand, and normal payment amortization.

    NPAs to total assets were 0.78%, 0.84% and 0.23% at September 30, 2024, June 30, 2024 and September 30, 2023, respectively. The allowance for credit losses on loans to total loans outstanding was 0.95% at September 30, 2024, compared to 0.96% at both June 30, 2024 and September 30, 2023. Net loan charge-offs for the third quarter of 2024 totaled $14 thousand, compared to $17 thousand for the second quarter of 2023, and $3 thousand for the third quarter of 2023.

    The following table summarizes our NPAs at the dates indicated (dollars in thousands):

      September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Nonperforming Loans:                  
    One-to-four family $ 745     $ 822     $ 835     $ 1,108     $ 1,137  
    Home equity loans   338       342       83       84       86  
    Commercial and multifamily   4,719       5,161       4,747       —       306  
    Construction and land   25       28       29       —       78  
    Manufactured homes   230       136       166       228       151  
    Floating homes   2,377       2,417       3,192       —       —  
    Commercial business   23       —       —       2,135       —  
    Other consumer   32       3       1       1       4  
    Total nonperforming loans   8,489       8,909       9,053       3,556       1,762  
    OREO and Other Repossessed Assets:                  
    Commercial and multifamily   —       —       575       575       575  
    Manufactured homes   115       115       115       —       —  
    Total OREO and repossessed assets   115       115       690       575       575  
    Total NPAs $ 8,604     $ 9,024     $ 9,743     $ 4,131     $ 2,337  
                       
    Percentage of Nonperforming Loans:                  
    One-to-four family   8.7 %     9.1 %     8.5 %     26.9 %     48.7 %
    Home equity loans   3.9       3.8       0.9       2.0       3.7  
    Commercial and multifamily   54.8       57.2       48.7       —       13.1  
    Construction and land   0.3       0.3       0.3       —       3.3  
    Manufactured homes   2.7       1.5       1.7       5.5       6.4  
    Floating homes   27.6       26.8       32.8       —       —  
    Commercial business   0.3       —       —       51.7       —  
    Other consumer   0.4       —       —       —       0.2  
    Total nonperforming loans   98.7       98.7       92.9       86.1       75.4  
    Percentage of OREO and Other Repossessed Assets:                  
    Commercial and multifamily   —       —       5.9       13.9       24.6  
    Manufactured homes   1.3       1.3       1.2       —       —  
    Total OREO and repossessed assets   1.3       1.3       7.1       13.9       24.6  
    Total NPAs   100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
     

    The following table summarizes the allowance for credit losses at the dates and for the periods indicated (dollars in thousands, unaudited):

      At or For the Quarter Ended:
      September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Allowance for Credit Losses on Loans                  
    Balance at beginning of period $ 8,493     $ 8,598     $ 8,760     $ 8,438     $ 8,217  
    (Release of) Provision for credit losses during the period   106       (88 )     (106 )     337       224  
    Net charge-offs during the period   (14 )     (17 )     (56 )     (15 )     (3 )
    Balance at end of period $ 8,585     $ 8,493     $ 8,598     $ 8,760     $ 8,438  
    Allowance for Credit Losses on Unfunded Loan Commitments                  
    Balance at beginning of period $ 245     $ 266     $ 193     $ 557     $ 706  
    (Release of) Provision for credit   (98 )     (21 )     73       (364 )     (149 )
    Balance at end of period   147       245       266       193       557  
    Allowance for Credit Losses $ 8,732     $ 8,738     $ 8,864     $ 8,953     $ 8,995  
    Allowance for credit losses on loans to total loans   0.95 %     0.96 %     0.96 %     0.98 %     0.96 %
    Allowance for credit losses to total loans   0.97 %     0.98 %     0.99 %     1.00 %     1.03 %
    Allowance for credit losses on loans to total nonperforming loans   101.13 %     95.33 %     94.97 %     246.34 %     478.89 %
    Allowance for credit losses to total nonperforming loans   102.86 %     98.08 %     97.91 %     251.77 %     510.50 %
     

    Deposits increased $23.4 million, or 2.6%, to $930.2 million at September 30, 2024, from $906.8 million at June 30, 2024 and increased $69.3 million, or 8.1%, from $860.9 million at September 30, 2023. The increase in deposits compared to the prior quarter-end was primarily a result of an increase of $17.0 million related to one new depositor relationship, as well as a $5.3 million increase in related party money market deposits. Compared to a year ago, the increase was primarily a result of an increase in certificate accounts and money market accounts, including $50.2 million of related party deposits, which helped fund organic loan growth. These increases were partially offset by decreases in noninterest-bearing and interest-bearing demand accounts and savings accounts, as interest rate sensitive clients shifted funds from lower-cost deposits, such as noninterest-bearing deposits, into higher rate money market and time deposits. Noninterest-bearing deposits increased $4.8 million, or 3.8%, to $129.7 million at September 30, 2024, compared to $124.9 million at June 30, 2024 and decreased $24.2 million, or 15.7%, from $153.9 million at September 30, 2023. Noninterest-bearing deposits represented 14.0%, 13.8% and 17.9% of total deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

    FHLB advances totaled $40.0 million at each of September 30, 2024, June 30, 2024, and September 30, 2023. FHLB advances are primarily used to support organic loan growth and to maintain liquidity ratios in line with our asset/liability objectives. FHLB advances outstanding at September 30, 2024 had maturities ranging from late 2024 through early 2028. Subordinated notes, net totaled $11.7 million at each of September 30, 2024, June 30, 2024 and September 30, 2023.

    Stockholders’ equity totaled $102.2 million at September 30, 2024, an increase of $892 thousand, or 0.9%, from $101.3 million at June 30, 2024, and an increase of $2.0 million, or 2.0%, from $100.2 million at September 30, 2023. The increase in stockholders’ equity from June 30, 2024 was primarily the result of $1.2 million of net income earned during the current quarter and a $127 thousand decrease in accumulated other comprehensive loss, net of tax, partially offset by the payment of $487 thousand in cash dividends to the Company’s stockholders.

    Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, which is headquartered in Seattle, Washington and has full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one loan production office located in the Madison Park neighborhood of Seattle. For more information, please visit www.soundcb.com.

    Forward-Looking Statements Disclaimer

    When used in this press release and in documents filed or furnished by Sound Financial Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s other press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors listed below or because of other factors that we cannot foresee that could cause our actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made.

    Factors which could cause actual results to differ materially, include, but are not limited to: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation or deflation, a recession or slowed economic growth, as well as supply chain disruptions; changes in the interest rate environment, including increases and decreases in the Board of Governors of the Federal Reserve System (the Federal Reserve) benchmark rate and the duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; secondary market conditions for loans; expectations regarding key growth initiatives and strategic priorities; environmental, social and governance goals and targets; results of examinations of the Company or the Bank by their regulators; increased competition; changes in management’s business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on our third-party vendors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with or furnished to the SEC, which are available at www.soundcb.com and on the SEC’s website at www.sec.gov. The risks inherent in these factors could cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company and could negatively affect the Company’s operating and stock performance.

    The Company does not undertake—and specifically disclaims any obligation—to revise any forward-looking statement to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statement.


    CONSOLIDATED INCOME STATEMENTS
    (Dollars in thousands, unaudited)

        For the Quarter Ended
        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Interest income   $ 14,838   $ 14,039     $ 13,760     $ 13,337     $ 12,686  
    Interest expense     6,965     6,591       6,300       5,770       4,518  
    Net interest income     7,873     7,448       7,460       7,567       8,168  
    Provision for (release of) credit losses     8     (109 )     (33 )     (27 )     75  
    Net interest income after provision for (release of) credit losses     7,865     7,557       7,493       7,594       8,093  
    Noninterest income:                    
    Service charges and fee income     628     761       612       576       700  
    Earnings on bank-owned life insurance     186     134       177       222       88  
    Mortgage servicing income     280     279       282       288       295  
    Fair value adjustment on mortgage servicing rights     101     (116 )     (65 )     (96 )     (78 )
    Net gain on sale of loans     40     74       90       76       76  
    Other income     —     30       —       —       —  
    Total noninterest income     1,235     1,162       1,096       1,066       1,081  
    Noninterest expense:                    
    Salaries and benefits     4,469     4,658       4,543       3,802       4,148  
    Operations     1,540     1,569       1,457       1,537       1,625  
    Regulatory assessments     189     220       189       198       183  
    Occupancy     414     397       444       458       458  
    Data processing     1,067     910       1,017       1,311       1,296  
    Net (gain) loss on OREO and repossessed assets     —     (17 )     6       —       —  
    Total noninterest expense     7,679     7,737       7,656       7,306       7,710  
    Income before provision for income taxes     1,421     982       933       1,354       1,464  
    Provision for income taxes     267     187       163       143       295  
    Net income   $ 1,154   $ 795     $ 770     $ 1,211     $ 1,169  
     

    CONSOLIDATED INCOME STATEMENTS
    (Dollars in thousands, unaudited)

        For the Nine Months Ended September 30
          2024       2023  
    Interest income   $ 42,638     $ 37,273  
    Interest expense     19,856       10,990  
    Net interest income     22,782       26,283  
    (Release of) provision for credit losses     (134 )     (246 )
    Net interest income after (release of) provision for credit losses     22,916       26,529  
    Noninterest income:        
    Service charges and fee income     2,001       1,951  
    Earnings on bank-owned life insurance     498       957  
    Mortgage servicing income     841       891  
    Fair value adjustment on mortgage servicing rights     (81 )     (123 )
    Net gain on sale of loans     205       264  
    Other income     30       —  
    Total noninterest income     3,494       3,940  
    Noninterest expense:        
    Salaries and benefits     13,670       13,333  
    Operations     4,566       4,557  
    Regulatory assessments     598       490  
    Occupancy     1,255       1,352  
    Data processing     2,995       3,077  
    Net (gain) loss on OREO and repossessed assets     (10 )     13  
    Total noninterest expense     23,074       22,822  
    Income before provision for income taxes     3,336       7,647  
    Provision for income taxes     617       1,419  
    Net income   $ 2,719     $ 6,228  
     

    CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, unaudited)

        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    ASSETS                    
    Cash and cash equivalents   $ 148,930     $ 135,111     $ 137,977     $ 49,690     $ 101,890  
    Available-for-sale securities, at fair value     8,032       7,996       8,115       8,287       7,980  
    Held-to-maturity securities, at amortized cost     2,139       2,147       2,157       2,166       2,174  
    Loans held-for-sale     65       257       351       603       1,153  
    Loans held-for-portfolio     901,733       889,274       897,877       894,478       875,434  
    Allowance for credit losses – loans     (8,585 )     (8,493 )     (8,598 )     (8,760 )     (8,438 )
    Total loans held-for-portfolio, net     893,148       880,781       889,279       885,718       866,996  
    Accrued interest receivable     3,705       3,413       3,617       3,452       3,415  
    Bank-owned life insurance, net     22,363       22,172       22,037       21,860       21,638  
    Other real estate owned (“OREO”) and other repossessed assets, net     115       115       690       575       575  
    Mortgage servicing rights, at fair value     4,665       4,540       4,612       4,632       4,681  
    Federal Home Loan Bank (“FHLB”) stock, at cost     2,405       2,406       2,406       2,396       2,783  
    Premises and equipment, net     4,807       4,906       6,685       5,240       5,204  
    Right-of-use assets     3,779       4,020       4,259       4,496       4,732  
    Other assets     6,777       6,995       4,500       6,106       6,955  
    TOTAL ASSETS   $ 1,100,930     $ 1,074,859     $ 1,086,685     $ 995,221     $ 1,030,176  
    LIABILITIES                    
    Interest-bearing deposits   $ 800,480     $ 781,854     $ 788,217     $ 699,813     $ 706,954  
    Noninterest-bearing deposits     129,717       124,915       128,666       126,726       153,921  
    Total deposits     930,197       906,769       916,883       826,539       860,875  
    Borrowings     40,000       40,000       40,000       40,000       40,000  
    Accrued interest payable     908       760       719       817       588  
    Lease liabilities     4,079       4,328       4,576       4,821       5,065  
    Other liabilities     9,711       9,105       9,578       9,563       9,794  
    Advance payments from borrowers for taxes and insurance     2,047       812       2,209       1,110       1,909  
    Subordinated notes, net     11,749       11,738       11,728       11,717       11,707  
    TOTAL LIABILITIES     998,691       973,512       985,693       894,567       929,938  
    STOCKHOLDERS’ EQUITY:                    
    Common stock     25       25       25       25       25  
    Additional paid-in capital     28,296       28,198       28,110       27,990       28,112  
    Retained earnings     74,840       74,173       73,907       73,627       73,438  
    Accumulated other comprehensive loss, net of tax     (922 )     (1,049 )     (1,050 )     (988 )     (1,337 )
    TOTAL STOCKHOLDERS’ EQUITY     102,239       101,347       100,992       100,654       100,238  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 1,100,930     $ 1,074,859     $ 1,086,685     $ 995,221     $ 1,030,176  
     

    KEY FINANCIAL RATIOS
    (unaudited)

        For the Quarter Ended
        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Annualized return on average assets     0.42 %     0.30 %     0.29 %     0.46 %     0.46 %
    Annualized return on average equity     4.50 %     3.17 %     3.06 %     4.78 %     4.60 %
    Annualized net interest margin(1)     2.98 %     2.92 %     2.95 %     3.04 %     3.38 %
    Annualized efficiency ratio(2)     84.31 %     89.86 %     89.48 %     84.63 %     83.36 %
    (1)   Net interest income divided by average interest earning assets.
    (2)   Noninterest expense divided by total revenue (net interest income and noninterest income).
     

    PER COMMON SHARE DATA
    (unaudited)

        At or For the Quarter Ended
        September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023
    Basic earnings per share   $ 0.45     $ 0.31     $ 0.30     $ 0.47     $ 0.45  
    Diluted earnings per share   $ 0.45     $ 0.31     $ 0.30     $ 0.47     $ 0.45  
    Weighted-average basic shares outstanding     2,544,233       2,540,538       2,539,213       2,542,175       2,553,773  
    Weighted-average diluted shares outstanding     2,569,368       2,559,015       2,556,958       2,560,656       2,571,808  
    Common shares outstanding at period-end     2,564,095       2,557,284       2,558,546       2,549,427       2,568,054  
    Book value per share   $ 39.87     $ 39.63     $ 39.47     $ 39.48     $ 39.03  
     

    AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID
    (Dollars in thousands, unaudited)

    The following tables present, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Income and yields on tax-exempt obligations have not been computed on a tax equivalent basis. All average balances are daily average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield for the period they have been on nonaccrual (dollars in thousands).

      Three Months Ended
      September 30, 2024   June 30, 2024   September 30, 2023
      Average
    Outstanding
    Balance    		   Interest
    Earned/
    Paid    		   Yield/Rate   Average Outstanding Balance   Interest
    Earned/
    Paid    		   Yield/Rate   Average Outstanding Balance   Interest
    Earned/
    Paid    		   Yield/Rate
    Interest-Earning Assets:                                  
    Loans receivable $ 898,570     $ 12,876   5.70 %   $ 891,863     $ 12,320   5.56 %   $ 862,397     $ 11,505   5.29 %
    Interest-earning cash   138,240       1,830   5.27 %     120,804       1,586   5.28 %     81,616       1,042   5.07 %
    Investments   13,806       132   3.80 %     13,935       133   3.84 %     14,793       139   3.73 %
    Total interest-earning assets $ 1,050,616       14,838   5.62 %     1,026,602     $ 14,039   5.50 %   $ 958,806       12,686   5.25 %
    Interest-Bearing Liabilities:                                  
    Savings and money market accounts $ 340,281       2,688   3.14 %   $ 301,454       2,115   2.82 %   $ 192,214       720   1.49 %
    Demand and NOW accounts   148,252       151   0.41 %     153,739       148   0.39 %     194,561       173   0.35 %
    Certificate accounts   303,632       3,524   4.62 %     317,496       3,731   4.73 %     293,820       2,984   4.03 %
    Subordinated notes   11,745       168   5.69 %     11,735       168   5.76 %     11,703       168   5.70 %
    Borrowings   40,000       434   4.32 %     40,000       429   4.31 %     42,815       473   4.38 %
    Total interest-bearing liabilities $ 843,910       6,965   3.28 %   $ 824,424       6,591   3.22 %   $ 735,113       4,518   2.44 %
    Net interest income/spread     $ 7,873   2.34 %       $ 7,448   2.28 %       $ 8,168   2.81 %
    Net interest margin         2.98 %           2.92 %           3.38 %
                                       
    Ratio of interest-earning assets to interest-bearing liabilities   124 %             125 %             130 %        
    Noninterest-bearing deposits $ 132,762             $ 128,878             $ 151,298          
    Total deposits   924,927     $ 6,363   2.74 %     901,567     $ 5,994   2.67 %     831,893     $ 3,877   1.85 %
    Total funding (1)   976,672       6,965   2.84 %     953,302       6,591   2.78 %     886,411       4,518   2.02 %
    (1)   Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
     
      Nine Months Ended
      September 30, 2024   September 30, 2023
      Average
    Outstanding
    Balance    		   Interest
    Earned/
    Paid    		   Yield/Rate   Average
    Outstanding
    Balance    		   Interest
    Earned/
    Paid    		   Yield/Rate
    Interest-Earning Assets:                      
    Loans receivable $ 895,300     $ 37,429   5.58 %   $ 865,357     $ 34,437   5.32 %
    Interest-earning cash   122,194       4,832   5.28 %     70,094       2,447   4.67 %
    Investments   12,607       377   3.99 %     13,962       389   3.73 %
    Total interest-earning assets $ 1,030,101       42,638   5.53 %   $ 949,413       37,273   5.25 %
    Interest-Bearing Liabilities:                      
    Savings and money market accounts $ 308,845       6,669   2.88 %   $ 173,319       1,197   0.92 %
    Demand and NOW accounts   153,897       440   0.38 %     216,753       587   0.36 %
    Certificate accounts   312,176       10,950   4.69 %     273,564       7,182   3.51 %
    Subordinated notes   11,735       504   5.74 %     11,693       504   5.76 %
    Borrowings   40,000       1,293   4.32 %     45,280       1,520   4.49 %
    Total interest-bearing liabilities $ 826,653       19,856   3.21 %   $ 720,609       10,990   2.04 %
    Net interest income/spread     $ 22,782   2.32 %       $ 26,283   3.21 %
    Net interest margin         2.95 %           3.70 %
                           
    Ratio of interest-earning assets to interest-bearing liabilities   125 %             132 %        
    Noninterest-bearing deposits $ 131,365             $ 161,051          
    Total deposits   906,283     $ 18,059   2.66 %     824,687     $ 8,966   1.45 %
    Total funding (1)   958,018       19,856   2.77 %     881,660       10,990   1.67 %
    (1)   Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.
     

    LOANS
    (Dollars in thousands, unaudited)

        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Real estate loans:                    
    One-to-four family   $ 271,702     $ 268,488     $ 279,213     $ 279,448     $ 280,556  
    Home equity     25,199       26,185       24,380       23,073       21,313  
    Commercial and multifamily     358,587       342,632       324,483       315,280       304,252  
    Construction and land     85,724       96,962       111,726       126,758       118,619  
    Total real estate loans     741,212       734,267       739,802       744,559       724,740  
    Consumer Loans:                    
    Manufactured homes     40,371       38,953       37,583       36,193       34,652  
    Floating homes     86,155       81,622       84,237       75,108       73,716  
    Other consumer     18,266       18,422       18,847       19,612       18,710  
    Total consumer loans     144,792       138,997       140,667       130,913       127,078  
    Commercial business loans     17,481       17,860       19,075       20,688       25,033  
    Total loans     903,485       891,124       899,544       896,160       876,851  
    Less:                    
    Premiums     736       754       808       829       850  
    Deferred fees, net     (2,488 )     (2,604 )     (2,475 )     (2,511 )     (2,267 )
    Allowance for credit losses – loans     (8,585 )     (8,493 )     (8,598 )     (8,760 )     (8,438 )
    Total loans held-for-portfolio, net   $ 893,148     $ 880,781     $ 889,279     $ 885,718     $ 866,996  
     

    DEPOSITS
    (Dollars in thousands, unaudited)

        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Noninterest-bearing demand   $ 129,717     $ 124,915     $ 128,666     $ 126,726     $ 153,921  
    Interest-bearing demand     148,740       152,829       159,178       168,346       185,441  
    Savings     61,455       63,368       65,723       69,461       76,729  
    Money market(1)     285,655       253,873       241,976       154,044       143,558  
    Certificates     304,630       311,784       321,340       307,962       301,226  
    Total deposits   $ 930,197     $ 906,769     $ 916,883     $ 826,539     $ 860,875  
    (1)   Includes $5.0 million of brokered deposits at December 31, 2023.
     

    CREDIT QUALITY DATA
    (Dollars in thousands, unaudited)

        At or For the Quarter Ended
        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Total nonperforming loans   $ 8,489     $ 8,909     $ 9,053     $ 3,556     $ 1,762  
    OREO and other repossessed assets     115       115       690       575       575  
    Total nonperforming assets   $ 8,604     $ 9,024     $ 9,743     $ 4,131     $ 2,337  
    Net charge-offs during the quarter   $ (14 )   $ (17 )   $ (56 )   $ (15 )   $ (3 )
    Provision for (release of) credit losses during the quarter     8       (109 )     (33 )     (27 )     75  
    Allowance for credit losses – loans     8,585       8,493       8,598       8,760       8,438  
    Allowance for credit losses – loans to total loans     0.95 %     0.96 %     0.96 %     0.98 %     0.96 %
    Allowance for credit losses – loans to total nonperforming loans     101.13 %     95.33 %     94.97 %     246.34 %     478.89 %
    Nonperforming loans to total loans     0.94 %     1.00 %     1.01 %     0.40 %     0.20 %
    Nonperforming assets to total assets     0.78 %     0.84 %     0.90 %     0.42 %     0.23 %
     

    OTHER STATISTICS
    (Dollars in thousands, unaudited)

        At or For the Quarter Ended
        September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
                         
    Total loans to total deposits     97.13 %     98.27 %     98.11 %     108.42 %     101.86 %
    Noninterest-bearing deposits to total deposits     13.95 %     13.78 %     14.03 %     15.33 %     17.88 %
                         
    Average total assets for the quarter   $ 1,095,404     $ 1,070,579     $ 1,062,036     $ 1,033,985     $ 1,005,223  
    Average total equity for the quarter   $ 102,059     $ 100,961     $ 101,292     $ 100,612     $ 100,927  
                                             

    Contact

    Financial:      
    Wes Ochs
    Executive Vice President/CFO
    (206) 436-8587
     
    Media:      
    Laurie Stewart
    President/CEO
    (206) 436-1495

    The MIL Network –

  • MIL-OSI USA: FEMA Senior Leaders Continue to Survey Impacted Areas and Meet with Local Officials as Helene, Milton Recovery Progresses

    Source: US Federal Emergency Management Agency

    Headline: FEMA Senior Leaders Continue to Survey Impacted Areas and Meet with Local Officials as Helene, Milton Recovery Progresses

    FEMA Senior Leaders Continue to Survey Impacted Areas and Meet with Local Officials as Helene, Milton Recovery Progresses

    WASHINGTON – More than a month after Helene made landfall, FEMA officials remain on the ground coordinating with local officials in affected states to help guide their recovery.    Visits included Victoria Salinas, Senior Official Performing the Duties of Deputy Administrator, meeting with officials over several days in North Carolina and Florida. Salinas and other FEMA officials discussed how the communities were progressing in their recovery and surveyed the effectiveness of modern building codes in minimizing storm-related damage.FEMA has approved more than $1.3 billion in direct assistance to Hurricanes Helene and Milton survivors. These funds help survivors with housing repairs, personal property replacement and other essential recovery efforts. Additionally, over $1.1 billion has been approved for debris removal and emergency protective measures, which are necessary to save lives, protect public health and prevent further damage to public and private property. More than 1,400 FEMA Disaster Survivor Assistance team members are in affected neighborhoods across affected states helping survivors apply for assistance and connecting them with additional state, local, federal and voluntary agency resources. Also,FEMA now has 76 Disaster Recovery Centers open throughout the hurricane affected communities. Center locations can be found at FEMA.gov/DRC. Centers can provide survivors in-person help with their applications and answer questions they have about available resources to help with their recovery.The U.S. Army Corps of Engineers announced Operation Blue Roof which is a free service to homeowners for 25 counties in Florida impacted by Hurricane Milton. Residents can sign-up at www.blueroof.gov or by calling 888-ROOF-BLU (888-766-3258).  The sign-up period deadline is Nov. 5.FEMA encourages Helene and Milton survivors to apply for disaster assistance online as this remains the quickest way to start your recovery. Individuals can apply for federal assistance by: Applying online at disasterassistance.govUsing the FEMA AppCalling 800-621-3362, Staffed daily from 7 a.m.-10 p.m. local timeVisiting a Disaster Recovery Center to talk with FEMA and state agency officials and apply for assistancePresident Joseph R. Biden has approved major disaster declarations in six states–Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia–affected by Helene. He has also approved a major disaster declaration for Florida following Hurricane Milton.These photos highlight response and recovery efforts across states affected by hurricanes Helene and Milton. 

    SWANNANOA, North Carolina – FEMA sets up a mobile Disaster Recovery Center in an affected North Carolina community. Helene survivors in Swannanoa and nearby areas can visit this center to apply for federal disaster assistance and ask questions about available state and federal resources for their recovery. (Photo Credit: FEMA) 

    SAVANNAH, Georgia – FEMA staff and FEMA Corps members help survivors of Hurricane Helene at the Disaster Recovery Center in Savannah. (Photo Credit: FEMA)

    CORTEZ, Florida – Victoria Salinas, FEMA Senior Official Performing the Duties of Deputy Administrator, and other FEMA personnel join Manatee County officials in the Hunters Point Neighborhood in Cortez. There they spoke with an owner of a property development to talk about how building codes helped the community following the recent hurricanes. (Photo Credit: FEMA)

    COLLETSVILLE, North Carolina – Victoria Salinas, FEMA Senior Official Performing the Duties of Deputy Administrator, surveys the flood damage from Wilson Creek along Brown Mountain Road with members of the Collettsville Fire Department. Salinas also talked with the owners of the Brown Mountain Resort as they shared their story of surviving the flood from Hurricane Helene. (Photo Credit: FEMA)

    FEMA’s Disaster Recovery Toolkit provides graphics, social media copy and sample text in multiple languages. In addition, FEMA has set up a rumor response web page to reduce confusion about its role in the Helene and Milton response and recovery. 
    annie.bond
    Wed, 10/30/2024 – 17:58

    MIL OSI USA News –

  • MIL-OSI USA: North Dakota Family to Receive the Purple Heart, Quilt of Valor in Honor of WWII Hero

    US Senate News:

    Source: United States Senator Kevin Cramer (R-ND)
    Ceremony to be held Nov. 4 at the AMVETS in Bismarck
     ***Click here to download audio.***
    BISMARCK, N.D. – A ceremony will be held on Monday, Nov. 4 in Bismarck to present a Purple Heart medal to honor the service and sacrifice of Private Franklin Joseph DuFrame, who gave his life in service to our nation in World War II. The replacement medal will be presented to Pvt. DuFrame’s son, Donald Franklin DuFrame of Lincoln, who served and enlisted in the Navy Reserve at 18 as a machinist mate 3rd class during the Vietnam War from 1962 to 1967.
    U.S. Senator Kevin Cramer (R-ND), a member of the Senate committees on Armed Services and Veterans’ Affairs, will present the family with a Purple Heart medal to honor and recognize the sacrifices of Franklin DuFrame. This replaces a previous Purple Heart awarded to Pvt. DuFrame, which had been lost. Cramer will present the family with a flag flown over the United States Capitol in honor of Pvt. DuFrame’s heroic service.
    The ceremony will also include the presentation of the Vietnam Commemorative Pin to recognize Donald DuFrame’s service, and a Quilt of Valor by Missouri River Quilts of Valor members. 
    Purple Heart medals are awarded to service members who are wounded or killed because of enemy action in an armed conflict. It is the nation’s oldest military honor still awarded today, and was established by President George Washington as the Badge of Military Merit in 1782.
    “This Purple Heart medal is much more than an award; it’s really a symbol of our nation’s eternal gratitude for Franklin DuFrame’s bravery, and heroism, and sacrifice,” said Cramer. “Private DuFrame gave his life for our country, and it’s really an honor for me to be able to present his family with this replacement medal to recognize his valiant service. It’s a repeated honor that I get to have as a member of Congress to intervene on behalf of a family who lost just a small part, but an important part, of their loved one’s legacy. This award represents that legacy, and it’s something tangible they can hang on to and that they can pass down to generation after generation as they tell the story of dad, of grandpa, of great-grandpa, of great-great-grandpa’s legacy in historical contribution to the freedom of America. It’s just a privilege and a joy.”
    Born in August 1920 in Maine, Pvt. DuFrame served in the U.S. Army, C Company, 10th Infantry Battalion, 4th Armored Division. He was married to Elma Leona Helman DuFrame, and they had three children. 
    On March 24, 1945, he was wounded in action and transported to an evacuation hospital in Bad Kreuznach, Germany. Pvt. DuFrame died of his wounds two days later on March 26 at the age of 24. He was temporarily interned at the military cemetery in Stromberg and permanently laid to rest, at his family’s request, at the Lorraine American War Cemetery in France.
    The ceremony, which is open to the public, will be held Monday, Nov. 4 at 6:30 p.m. CT at AMVETS Post #9, 2402 Railroad Ave., Bismarck.

    MIL OSI USA News –

  • MIL-OSI: STMicroelectronics Reports 2024 Third Quarter Financial Results

    Source: GlobeNewswire (MIL-OSI)

    PR No: C3290C

    STMicroelectronics Reports 2024 Third Quarter Financial Results

    • Q3 net revenues $3.25 billion; gross margin 37.8%; operating margin 11.7%; net income $351 million
    • YTD net revenues $9.95 billion; gross margin 39.9%; operating margin 13.1%; net income $1.22 billion
    • Business outlook at mid-point: Q4 net revenues of $3.32 billion and gross margin of 38%
    • Launch of a new company-wide program to reshape our manufacturing footprint accelerating our wafer fab capacity to 300mm Silicon and 200mm Silicon Carbide and resizing our global cost base

    Geneva, October 31, 2024 – STMicroelectronics N.V. (“ST”) (NYSE: STM), a global semiconductor leader serving customers across the spectrum of electronics applications, reported U.S. GAAP financial results for the third quarter ended September 28, 2024. This press release also contains non-U.S. GAAP measures (see Appendix for additional information).

    ST reported third quarter net revenues of $3.25 billion, gross margin of 37.8%, operating margin of 11.7%, and net income of $351 million or $0.37 diluted earnings per share.

    Jean-Marc Chery, ST President & CEO, commented:

    • “Q3 net revenues were in line with the midpoint of our business outlook range. Our revenues, compared to our expectations, were higher in Personal Electronics, declined less in Industrial and were lower in Automotive. Q3 gross margin of 37.8% was broadly in line with the mid-point of our business outlook range.”
    • “First nine months net revenues decreased 23.5% year-over-year across all reportable segments, particularly in Microcontrollers, which is impacted by a continuing weakness in the Industrial market. Operating margin was 13.1% and net income was $1.22 billion.”
    • “Our fourth quarter business outlook, at the mid-point, is for net revenues of $3.32 billion, decreasing year-over-year by 22.4% and increasing sequentially by 2.2%; gross margin is expected to be about 38%, impacted by about 400 basis points of unused capacity charges.”
    • “The midpoint of this outlook translates into full year 2024 revenues of about $13.27 billion, representing a 23.2% year-over-year decrease, in the low-end of the range indicated in the previous quarter, and a gross margin slightly below that provided in such indication.”
    • “Based on our current customer order backlog and demand visibility, we anticipate a revenue decline between Q4 2024 and Q1 2025 well above normal seasonality.”
    • “We are launching a new company-wide program to reshape our manufacturing footprint accelerating our wafer fab capacity to 300mm Silicon (Agrate and Crolles) and 200mm Silicon Carbide (Catania) and resizing our global cost base. This program should result in strengthening our capability to grow our revenues with an improved operating efficiency resulting in annual cost savings in the high triple-digit million-dollar range exiting 2027.”

    Quarterly Financial Summary (U.S. GAAP)

    (US$ m, except per share data) Q3 2024 Q2 2024 Q3 2023 Q/Q Y/Y
    Net Revenues $3,251 $3,232 $4,431 0.6% -26.6%
    Gross Profit $1,228 $1,296 $2,109 -5.2% -41.8%
    Gross Margin 37.8% 40.1% 47.6% -230 bps -980 bps
    Operating Income $381 $375 $1,241 1.8% -69.3%
    Operating Margin 11.7% 11.6% 28.0% 10 bps -1,630 bps
    Net Income $351 $353 $1,090 -0.6% -67.8%
    Diluted Earnings Per Share $0.37 $0.38 $1.16 -2.6% -68.1%

    Third Quarter 2024 Summary Review

    Reminder: On January 10, 2024, ST announced a new organization which implied a change in segment reporting starting Q1 2024. Prior year comparative periods have been adjusted accordingly. See Appendix for more detail.

    Net Revenues by Reportable Segment (US$ m) Q3 2024 Q2 2024 Q3 2023 Q/Q Y/Y
    Analog products, MEMS and Sensors (AM&S) segment 1,185 1,165 1,367 1.7% -13.3%
    Power and discrete products (P&D) segment 807 747 989 7.9% -18.4%
    Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group 1,992 1,912 2,356 4.2% -15.5%
    Microcontrollers (MCU) segment 829 800 1,466 3.6% -43.4%
    Digital ICs and RF Products (D&RF) segment 426 516 605 -17.4% -29.7%
    Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group 1,255 1,316 2,071 -4.6% -39.4%
    Others 4 4 4 – –
    Total Net Revenues 3,251 3,232 4,431 0.6% -26.6%

    Net revenues totaled $3.25 billion, representing a year-over-year decrease of 26.6%. Year-over-year net sales to OEMs and Distribution decreased 17.5% and 45.4%, respectively. On a sequential basis, net revenues increased 0.6%, in line with the mid-point of ST’s guidance.

    Gross profit totaled $1.23 billion, representing a year-over-year decrease of 41.8%. Gross margin of 37.8%, 20 basis points below the mid-point of ST’s guidance, decreased 980 basis points year-over-year, mainly due to product mix and, to a lesser extent, to sales price and higher unused capacity charges.

    Operating income decreased 69.3% to $381 million, compared to $1.24 billion in the year-ago quarter. ST’s operating margin decreased 1,630 basis points on a year-over-year basis to 11.7% of net revenues, compared to 28.0% in the third quarter of 2023.

    By reportable segment1, compared with the year-ago quarter:

    In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:

    Analog products, MEMS and Sensors (AM&S) segment:

    • Revenue decreased 13.3% mainly due to decreases in Imaging and in Analog.   
    • Operating profit decreased by 41.2% to $175 million. Operating margin was 14.8% compared to 21.8%.

    Power and Discrete products (P&D) segment:

    • Revenue decreased 18.4%.
    • Operating profit decreased by 54.0% to $121 million. Operating margin was 15.0% compared to 26.5%. 

    In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:

    Microcontrollers (MCU) segment:

    • Revenue decreased 43.4% mainly due to a decrease in GP MCU.
    • Operating profit decreased by 78.2% to $116 million. Operating margin was 14.0% compared to 36.4%.

    Digital ICs and RF products (D&RF) segment:

    • Revenue decreased 29.7% mainly due to a decrease in ADAS (automotive ADAS and infotainment).
    • Operating profit decreased by 49.5% to $114 million. Operating margin was 26.8% compared to 37.3%. 

    Net income and diluted Earnings Per Share decreased to $351 million and $0.37 respectively compared to $1.09 billion and $1.16 respectively in the year-ago quarter.

    Cash Flow and Balance Sheet Highlights

            Trailing 12 Months
    (US$ m) Q3 2024 Q2 2024 Q3 2023 Q3 2024 Q3 2023 TTM Change
    Net cash from operating activities 723 702 1,881 3,764 6,062 -37.9%
    Free cash flow (non-U.S. GAAP)2 136 159 707 813 1,725 -52.9%

    Net cash from operating activities was $723 million in the third quarter compared to $1.88 billion in the year-ago quarter.

    Net Capex (non-U.S. GAAP) was $565 million in the third quarter compared to $1.15 billion in the year-ago quarter.

    Free cash flow (non-U.S. GAAP) was $136 million in the third quarter, compared to $707 million in the year-ago quarter.

    Inventory at the end of the third quarter was $2.88 billion, compared to $2.81 billion in the previous quarter and $2.87 billion in the year-ago quarter. Days sales of inventory at quarter-end was 130 days, similar to the previous quarter, and compared to 114 days in the year-ago quarter.

    In the third quarter, ST paid cash dividends to its stockholders totaling $80 million and executed a $92 million share buy-back, as part of its current share repurchase program.

    ST’s net financial position (non-U.S. GAAP) was $3.18 billion as of September 28, 2024, compared to $3.20 billion as of June 29, 2024 and reflected total liquidity of $6.30 billion and total financial debt of $3.12 billion. Adjusted net financial position (non-U.S. GAAP), taking into consideration the effect on total liquidity of advances from capital grants for which capital expenditures have not been incurred yet, stood at $2.82 billion as of September 28, 2024.

    Corporate developments

    Since the beginning of 2024, ST has made significant changes in the way it is structured and operates, including the re-organization of its Product Groups. Since October 1, 2024, Lorenzo Grandi, President and CFO, has taken additional responsibilities, with a perimeter now also covering Supply Chain, Corporate Development and Integrated External Communication in addition to Finance, Global Procurement, Digital Transformation and Information Technology, Enterprise Risk Management and Resilience. ST’s Executive Committee remains unchanged and continues to report to Jean-Marc Chery, ST President and CEO.

    Business Outlook

    ST’s guidance, at the mid-point, for the 2024 fourth quarter is:

    • Net revenues are expected to be $3.32 billion, an increase of 2.2% sequentially, plus or minus 350 basis points.
    • Gross margin of 38%, plus or minus 200 basis points.
    • This outlook is based on an assumed effective currency exchange rate of approximately $1.11 = €1.00 for the 2024 fourth quarter and includes the impact of existing hedging contracts.
    • The fourth quarter will close on December 31, 2024.

    Conference Call and Webcast Information

    ST will conduct a conference call with analysts, investors and reporters to discuss its third quarter 2024 financial results and current business outlook today at 9:30 a.m. Central European Time (CET) / 4:30 a.m. U.S. Eastern Time (ET). A live webcast (listen-only mode) of the conference call will be accessible at ST’s website, https://investors.st.com, and will be available for replay until November 15, 2024.

    2024 Capital Markets Day

    ST will conduct a live webcast of its 2024 Capital Markets Day meeting from Paris, France, on Wednesday, November 20, 2024, from 9:00 a.m. to 1:15 p.m. Central European Time (CET) / 3:00 a.m. to 7:15 a.m. U.S. Eastern Time (ET). The live webcast featuring video, audio and presentation slides will be accessible at ST’s website, https://investors.st.com. Copies of the presentations and a recording of the event will be made available at https://investors.st.com.

    Use of Supplemental Non-U.S. GAAP Financial Information

    This press release contains supplemental non-U.S. GAAP financial information.

    Readers are cautioned that these measures are unaudited and not prepared in accordance with U.S. GAAP and should not be considered as a substitute for U.S. GAAP financial measures. In addition, such non-U.S. GAAP financial measures may not be comparable to similarly titled information from other companies. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with ST’s consolidated financial statements prepared in accordance with U.S. GAAP.

    See the Appendix of this press release for a reconciliation of ST’s non-U.S. GAAP financial measures to their corresponding U.S. GAAP financial measures.

    Forward-looking Information

    Some of the statements contained in this release that are not historical facts are statements of future expectations and other forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 or Section 21E of the Securities Exchange Act of 1934, each as amended) that are based on management’s current views and assumptions, and are conditioned upon and also involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements due to, among other factors:

    • changes in global trade policies, including the adoption and expansion of tariffs and trade barriers, that could affect the macro-economic environment and adversely impact the demand for our products;
    • uncertain macro-economic and industry trends (such as inflation and fluctuations in supply chains), which may impact production capacity and end-market demand for our products;
    • customer demand that differs from projections which may require us to undertake transformation measures that may not be successful in realizing the expected benefits in full or at all;
    • the ability to design, manufacture and sell innovative products in a rapidly changing technological environment;
    • changes in economic, social, public health, labor, political, or infrastructure conditions in the locations where we, our customers, or our suppliers operate, including as a result of macroeconomic or regional events, geopolitical and military conflicts, social unrest, labor actions, or terrorist activities;
    • unanticipated events or circumstances, which may impact our ability to execute our plans and/or meet the objectives of our R&D and manufacturing programs, which benefit from public funding;
    • financial difficulties with any of our major distributors or significant curtailment of purchases by key customers;
    • the loading, product mix, and manufacturing performance of our production facilities and/or our required volume to fulfill capacity reserved with suppliers or third-party manufacturing providers;
    • availability and costs of equipment, raw materials, utilities, third-party manufacturing services and technology, or other supplies required by our operations (including increasing costs resulting from inflation);
    • the functionalities and performance of our IT systems, which are subject to cybersecurity threats and which support our critical operational activities including manufacturing, finance and sales, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology;
    • theft, loss, or misuse of personal data about our employees, customers, or other third parties, and breaches of data privacy legislation;
    • the impact of intellectual property (“IP”) claims by our competitors or other third parties, and our ability to obtain required licenses on reasonable terms and conditions;
    • changes in our overall tax position as a result of changes in tax rules, new or revised legislation, the outcome of tax audits or changes in international tax treaties which may impact our results of operations as well as our ability to accurately estimate tax credits, benefits, deductions and provisions and to realize deferred tax assets;
    • variations in the foreign exchange markets and, more particularly, the U.S. dollar exchange rate as compared to the Euro and the other major currencies we use for our operations;
    • the outcome of ongoing litigation as well as the impact of any new litigation to which we may become a defendant;
    • product liability or warranty claims, claims based on epidemic or delivery failure, or other claims relating to our products, or recalls by our customers for products containing our parts;
    • natural events such as severe weather, earthquakes, tsunamis, volcano eruptions or other acts of nature, the effects of climate change, health risks and epidemics or pandemics in locations where we, our customers or our suppliers operate;
    • increased regulation and initiatives in our industry, including those concerning climate change and sustainability matters and our goal to become carbon neutral by 2027 on scope 1 and 2 and partially scope 3;
    • epidemics or pandemics, which may negatively impact the global economy in a significant manner for an extended period of time, and could also materially adversely affect our business and operating results;
    • industry changes resulting from vertical and horizontal consolidation among our suppliers, competitors, and customers; and
    • the ability to successfully ramp up new programs that could be impacted by factors beyond our control, including the availability of critical third-party components and performance of subcontractors in line with our expectations.

    Such forward-looking statements are subject to various risks and uncertainties, which may cause actual results and performance of our business to differ materially and adversely from the forward-looking statements. Certain forward-looking statements can be identified by the use of forward-looking terminology, such as “believes”, “expects”, “may”, “are expected to”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy, plans or intentions.

    Some of these risk factors are set forth and are discussed in more detail in “Item 3. Key Information — Risk Factors” included in our Annual Report on Form 20-F for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on February 22, 2024. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed or expected. We do not intend, and do not assume any obligation, to update any industry information or forward-looking statements set forth in this release to reflect subsequent events or circumstances.

    Unfavorable changes in the above or other factors listed under “Item 3. Key Information — Risk Factors” from time to time in our Securities and Exchange Commission (“SEC”) filings, could have a material adverse effect on our business and/or financial condition.

    About STMicroelectronics

    At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.

    For further information, please contact:

    INVESTOR RELATIONS:
    Jérôme Ramel
    EVP Corporate Development & Integrated External Communication
    Tel: +41 22 929 59 20
    jerome.ramel@st.com

    MEDIA RELATIONS:
    Alexis Breton
    Corporate External Communications
    Tel: + 33 6 59 16 79 08
    alexis.breton@st.com

    STMicroelectronics N.V.    
    CONSOLIDATED STATEMENTS OF INCOME    
    (in millions of U.S. dollars, except per share data ($))    
         
      Three months ended
      September 28, September 30,
      2024 2023
      (Unaudited) (Unaudited)
         
    Net sales 3,245 4,416
    Other revenues 6 15
    NET REVENUES 3,251 4,431
    Cost of sales (2,023) (2,322)
    GROSS PROFIT 1,228 2,109
    Selling, general and administrative expenses (385) (407)
    Research and development expenses (492) (519)
    Other income and expenses, net 30 58
    Total operating expenses (847) (868)
    OPERATING INCOME 381 1,241
    Interest income, net 55 44
    Other components of pension benefit costs (4) (5)
    INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST 432 1,280
    Income tax expense (71) (188)
    NET INCOME 361 1,092
    Net income attributable to noncontrolling interest (10) (2)
    NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 351 1,090
         
    EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 0.39 1.20
    EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 0.37 1.16
         
    NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS 938.6 943.8
         
    STMicroelectronics N.V.    
    CONSOLIDATED STATEMENTS OF INCOME    
    (in millions of U.S. dollars, except per share data ($))    
         
      Nine months ended
      September 28, September 30,
      2024 2023
      (Unaudited) (Unaudited)
         
    Net sales 9,915 12,977
    Other revenues 32 27
    NET REVENUES 9,947 13,004
    Cost of sales (5,980) (6,666)
    GROSS PROFIT 3,967 6,338
    Selling, general and administrative expenses (1,229) (1,215)
    Research and development expenses (1,554) (1,579)
    Other income and expenses, net 123 44
    Total operating expenses (2,660) (2,750)
    OPERATING INCOME 1,307 3,588
    Interest income, net 166 114
    Other components of pension benefit costs (12) (14)
    Loss on financial instruments, net (1) –
    INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST 1,460 3,688
    Income tax expense (231) (547)
    NET INCOME 1,229 3,141
    Net income attributable to noncontrolling interest (13) (6)
    NET INCOME ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1,216 3,135
         
    EARNINGS PER SHARE (BASIC) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1.35 3.47
    EARNINGS PER SHARE (DILUTED) ATTRIBUTABLE TO PARENT COMPANY STOCKHOLDERS 1.29 3.32
         
    NUMBER OF WEIGHTED AVERAGE SHARES USED IN CALCULATING DILUTED EPS 940.2 944.7
         
           
    STMicroelectronics N.V.      
    CONSOLIDATED BALANCE SHEETS      
    As at September 28, June 29, December 31,
    In millions of U.S. dollars 2024 2024 2023
      (Unaudited) (Unaudited) (Audited)
    ASSETS      
    Current assets:      
    Cash and cash equivalents 3,077 3,092 3,222
    Short-term deposits 977 975 1,226
    Marketable securities 2,242 2,218 1,635
    Trade accounts receivable, net 1,730 1,708 1,731
    Inventories 2,875 2,810 2,698
    Other current assets 1,062 1,066 1,295
    Total current assets 11,963 11,869 11,807
    Goodwill 303 296 303
    Other intangible assets, net 354 353 367
    Property, plant and equipment, net 11,258 10,869 10,554
    Non-current deferred tax assets 547 575 592
    Long-term investments 20 20 22
    Other non-current assets 1,071 924 808
      13,553 13,037 12,646
    Total assets 25,516 24,906 24,453
           
    LIABILITIES AND EQUITY      
    Current liabilities:      
    Short-term debt 1,003 236 217
    Trade accounts payable 1,585 1,577 1,856
    Other payables and accrued liabilities 1,327 1,344 1,525
    Dividends payable to stockholders 177 257 54
    Accrued income tax 116 131 78
    Total current liabilities 4,208 3,545 3,730
    Long-term debt 2,112 2,850 2,710
    Post-employment benefit obligations 397 375 372
    Long-term deferred tax liabilities 60 37 54
    Other long-term liabilities 935 951 735
      3,504 4,213 3,871
    Total liabilities 7,712 7,758 7,601
    Commitment and contingencies      
    Equity      
    Parent company stockholders’ equity      
    Common stock (preferred stock: 540,000,000 shares authorized, not issued; common stock: Euro 1.04 nominal value, 1,200,000,000 shares authorized, 911,281,920 shares issued, 901,550,639 shares outstanding as of September 28, 2024) 1,157 1,157 1,157
    Additional Paid-in Capital 3,032 2,985 2,866
    Retained earnings 13,118 12,813 12,470
    Accumulated other comprehensive income 657 421 613
    Treasury stock (400) (354) (377)
    Total parent company stockholders’ equity 17,564 17,022 16,729
    Noncontrolling interest 240 126 123
    Total equity 17,804 17,148 16,852
    Total liabilities and equity 25,516 24,906 24,453
           
           
    STMicroelectronics N.V.      
           
    SELECTED CASH FLOW DATA      
           
    Cash Flow Data (in US$ millions) Q3 2024 Q2 2024 Q3 2023
           
    Net Cash from operating activities 723 702 1,881
    Net Cash used in investing activities (601) (628) (1,756)
    Net Cash from (used in) financing activities (142) (112) (223)
    Net Cash decrease (15) (41) (100)
           
    Selected Cash Flow Data (in US$ millions) Q3 2024 Q2 2024 Q3 2023
           
    Depreciation & amortization 440 439 396
    Net payment for Capital expenditures (601) (546) (1,152)
    Dividends paid to stockholders (80) (73) (58)
    Change in inventories, net (17) (136) 147
           

    Appendix
    ST
    New organization

    On January 10, 2024, ST announced a new organization to deliver enhanced product development innovation and efficiency, time-to-market as well as customer focus by end market. This new organization implies a change in segment reporting which is applied from January 1, 2024.

    ST moved from three reportable segments (ADG, AMS and MDG) to four reportable segments as follows:

    • In Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group:
      • Analog products, MEMS and Sensors (AM&S) segment, comprised of ST analog products, MEMS sensors and actuators, and optical sensing solutions.
      • Power and Discrete products (P&D) segment comprised of discrete and power transistor products.

    In this Press Release, “Analog” refers to ST analog products, “MEMS” to MEMS sensors and actuators and “Imaging” to optical sensing solutions.

    • In Microcontrollers, Digital ICs and RF products (MDRF) Product Group:
      • Microcontrollers (MCU) segment, comprised of general-purpose and automotive microcontrollers, microprocessors and connected security products (including EEPROM).
      • Digital ICs and RF Products (D&RF) segment, comprised of automotive ADAS, infotainment, RF and communications products.

    In this Press release, “Auto MCU” refers to Automotive microcontrollers and microprocessors, “GP MCU” to general purpose microcontrollers and microprocessors, “Connected Security” to connected security products (including EEPROM), “ADAS” to automotive ADAS and infotainment, “RF Communications” to RF and communications products.

    Prior year quarters comparative information has been adjusted accordingly.

    (Appendix – continued)
    ST
    Supplemental Financial Information

      Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023
    Net Revenues By Market Channel (%)          
    Total OEM 76% 73% 70% 70% 67%
    Distribution 24% 27% 30% 30% 33%
               
    €/$ Effective Rate 1.08 1.08 1.09 1.08 1.09
               
    Reportable Segment Data (US$ m)          
    Analog products, MEMS and Sensors (AM&S) segment          
    – Net Revenues 1,185 1,165 1,217 1,418 1,367
    – Operating Income 175 144 185 300 298
    Power and Discrete products (P&D) segment          
    – Net Revenues 807 747 820 965 989
    – Operating Income 121 110 138 245 262
    Subtotal: Analog, Power & Discrete, MEMS and Sensors (APMS) Product Group          
    – Net Revenues 1,992 1,912 2,037 2,383 2,356
    – Operating Income 296 254 323 545 560
    Microcontrollers (MCU) segment          
    – Net Revenues 829 800 950 1,272 1,466
    – Operating Income 116 72 185 378 534
    Digital ICs and RF Products (D&RF) segment          
    – Net Revenues 426 516 475 623 605
    – Operating Income 114 150 150 223 226
    Subtotal: Microcontrollers, Digital ICs and RF products (MDRF) Product Group          
    – Net Revenues 1,255 1,316 1,425 1,895 2,071
    – Operating Income 230 222 335 601 760
    Others (a)          
    – Net Revenues 4 4 3 4 4
    – Operating Income (Loss) (145) (101) (107) (123) (79)
    Total          
    – Net Revenues 3,251 3,232 3,465 4,282 4,431
    – Operating Income 381 375 551 1,023 1,241

    (a)  Net revenues of Others include revenues from sales assembly services and other revenues. Operating income (loss) of Others include items such as unused capacity charges, including incidents leading to power outage, impairment and restructuring charges, management reorganization costs, start-up and phase out costs, and other unallocated income (expenses) such as: strategic or special research and development programs, certain corporate-level operating expenses, patent claims and litigations, and other costs that are not allocated to reportable segments, as well as operating earnings of other products. Others includes:

    (US$ m) Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023
    Unused capacity charges 104 84 63 57 46

    (Appendix – continued)
    ST
    Supplemental Non-U.S. GAAP Financial Information
    U.S. GAAP – Non-U.S. GAAP Reconciliation

    The supplemental non-U.S. GAAP information presented in this press release is unaudited and subject to inherent limitations. Such non-U.S. GAAP information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for U.S. GAAP measurements. Also, our supplemental non-U.S. GAAP financial information may not be comparable to similarly titled non-U.S. GAAP measures used by other companies. Further, specific limitations for individual non-U.S. GAAP measures, and the reasons for presenting non-U.S. GAAP financial information, are set forth in the paragraphs below. To compensate for these limitations, the supplemental non-U.S. GAAP financial information should not be read in isolation, but only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP.

    ST believes that these non-U.S. GAAP financial measures provide useful information for investors and management because they offer, when read in conjunction with ST’s U.S. GAAP financials, (i) the ability to make more meaningful period-to-period comparisons of ST’s on-going operating results, (ii) the ability to better identify trends in ST’s business and perform related trend analysis, and (iii) to facilitate a comparison of ST’s results of operations against investor and analyst financial models and valuations, which may exclude these items.

    Net Financial Position and Adjusted Net Financial Position (non-U.S. GAAP measures)

    Net Financial Position, a non-U.S. GAAP measure, represents the difference between our total liquidity and our total financial debt. Our total liquidity includes cash and cash equivalents, restricted cash, if any, short-term deposits, and marketable securities, and our total financial debt includes short-term debt and long-term debt, as reported in our Consolidated Balance Sheets. Starting Q4 2023, ST also presents adjusted net financial position as a non-U.S. GAAP measure, to take into consideration the effect on total liquidity of advances received on capital grants for which capital expenditures have not been incurred yet. Reporting periods prior to Q4 2023 are not impacted.

    ST believes its Net Financial Position and Adjusted Net Financial Position provide useful information for investors and management because they give evidence of our global position either in terms of net indebtedness or net cash by measuring our capital resources based on cash and cash equivalents, restricted cash, if any, short-term deposits and marketable securities and the total level of our financial debt. Our definitions of Net Financial Position and Adjusted Net Financial Position may differ from definitions used by other companies, and therefore, comparability may be limited.

    (US$ m) Sep 28
    2024    		 June 29
    2024    		 Mar 30
    2024    		 Dec 31
    2023    		 Sep 30
    2023
    Cash and cash equivalents 3,077 3,092 3,133 3,222 3,011
    Short term deposits 977 975 1,226 1,226 506
    Marketable securities 2,242 2,218 1,880 1,635 1,537
    Total liquidity 6,296 6,285 6,239 6,083 5,054
    Short-term debt (1,003) (236) (238) (217) (173)
    Long-term debt (a) (2,112) (2,850) (2,875) (2,710) (2,418)
    Total financial debt (3,115) (3,086) (3,113) (2,927) (2,591)
    Net Financial Position 3,181 3,199 3,126 3,156 2,463
    Advances received on capital grants (366) (402) (351) (152) –
    Adjusted Net Financial Position 2,815 2,797 2,775 3,004 2,463

    (a)  Long-term debt contains standard conditions but does not impose minimum financial ratios. Committed credit facilities for $701 million equivalent, are currently undrawn.

    (Appendix – continued)

    Net Capex and Free Cash Flow (non-U.S. GAAP measures)

    ST presents Net Capex as a non-U.S. GAAP measure, which is reported as part of our Free Cash Flow (non-US GAAP measure), to take into consideration the effect of advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period.

    Net Capex, a non-U.S. GAAP measure, is defined as (i) Payment for purchase of tangible assets, as reported plus (ii) Proceeds from sale of tangible assets, as reported plus (iii) Proceeds from capital grants and other contributions, as reported plus (iv) Advances from capital grants allocated to property, plant and equipment in the reporting period.

    ST believes Net Capex provides useful information for investors and management because annual capital expenditures budget includes the effect of capital grants. Our definition of Net Capex may differ from definitions used by other companies.

    (US$ m) Q3
    2024    		 Q2
    2024    		 Q1
    2024    		 Q4
    2023    		 Q3
    2023
    Payment for purchase of tangible assets, as reported (669) (690) (1,145) (1,076) (1,158)
    Proceeds from sale of tangible assets, as reported 2 1 2 – 1
    Proceeds from capital grants and other contributions, as reported 66 143 149 278 5
    Advances from capital grants allocated to property, plant and equipment 36 18 27 – –
    Net Capex (565) (528) (967) (798) (1,152)

    Free Cash Flow, which is a non-U.S. GAAP measure, is defined as (i) net cash from operating activities plus (ii) Net Capex plus (iii) payment for purchase (and proceeds from sale) of intangible and financial assets and (iv) net cash paid for business acquisitions, if any.

    ST believes Free Cash Flow provides useful information for investors and management because it measures our capacity to generate cash from our operating and investing activities to sustain our operations.

    Free Cash Flow reconciles with the total cash flow and the net cash increase (decrease) by including the payment for purchases of (and proceeds from matured) marketable securities and net investment in (and proceeds from) short-term deposits, the net cash from (used in) financing activities and the effect of changes in exchange rates, and by excluding the advances from capital grants received on prior periods allocated to property, plant and equipment in the reporting period. Our definition of Free Cash Flow may differ from definitions used by other companies.

    (US$ m) Q3
    2024    		 Q2
    2024    		 Q1
    2024    		 Q4
    2023    		 Q3
    2023
    Net cash from operating activities 723 702 859 1,480 1,881
    Net Capex (565) (528) (967) (798) (1,152)
    Payment for purchase of intangible assets, net of proceeds from sale (20) (15) (26) (28) (22)
    Payment for purchase of financial assets, net of proceeds from sale (2) – – (2) –
    Free Cash Flow 136 159 (134) 652 707

    1See Appendix for the definition of reportable segments.

    2Non-U.S. GAAP. See Appendix for reconciliation to U.S. GAAP and information explaining why ST believes these measures are important.

    Attachment

    The MIL Network –

  • MIL-OSI: Great Elm Capital Corp. Announces Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    PALM BEACH GARDENS, Fla., Oct. 31, 2024 (GLOBE NEWSWIRE) — Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) (NASDAQ: GECC), a business development company, today announced its financial results for the third quarter ended September 30, 2024.

    Third Quarter and Other Recent Highlights:

    • Net investment income (“NII”) for the quarter ended September 30, 2024 was $4.1 million, or $0.39 per share, as compared to $3.1 million, or $0.32 per share, for the quarter ended June 30, 2024.
    • Net assets were $125.8 million, or $12.04 per share, on September 30, 2024, as compared to $126.0 million, or $12.06 per share, on June 30, 2024.
    • In September 2024, issued $36.0 million of 8.125% unsecured notes due 2029 (the “GECCH Notes”) and an additional $5.4 million in October with the full exercise of the underwriters’ overallotment option.
    • Redeemed all outstanding 6.75% unsecured notes due in January 2025 (the “GECCM Notes”) on October 12, 2024 with net proceeds from the GECCH notes and cash on hand.
    • GECC’s asset coverage ratio was 166.2% as of September 30, 2024, as compared to 171.0% as of June 30, 2024 and 168.4% as of September 30, 2023.
      • Pro forma for the GECCH issuances and GECCM redemption, the asset coverage ratio would have been 164.4%.
    • The Board of Directors approved a quarterly dividend of $0.35 per share for the fourth quarter of 2024, equating to a 14.0% annualized yield on the Company’s closing market price on October 30, 2024 of $10.03.

    Management Commentary 
    “We had a strong third quarter, reporting NII that exceeded our quarterly distribution and generating record total investment income of $11.7 million,” said Matt Kaplan, GECC’s Chief Executive Officer. “Along with managing our stable portfolio, we successfully refinanced our GECCM Notes, extending our debt maturity profile. We look forward to closing a very successful 2024 on firm footing, after completing multiple substantial capital raises at NAV and launching our CLO joint venture. Our innovative JV approach utilizing the CLO structure has increased our exposure to first lien bank loans with long term, non-recourse financing, and is already delivering strong cash income. Looking ahead, we believe we remain well-positioned to maintain our dividend coverage and deliver attractive risk-adjusted returns to our shareholders.”

    Financial Highlights – Per Share Data

      Q3/2023 Q4/2023 Q1/2024 Q2/2024 Q3/2024
    Earnings Per Share (“EPS”) $1.02 $0.55 ($0.05) ($0.14) $0.33
    Net Investment Income (“NII”) Per Share $0.40 $0.43 $0.37 $0.32 $0.39
    Pre-Incentive Net Investment Income Per Share $0.50 $0.54 $0.46 $0.40 $0.49
    Net Realized and Unrealized Gains / (Losses) Per Share $0.62 $0.12 ($0.42) ($0.46) ($0.06)
    Net Asset Value Per Share at Period End $12.88 $12.99 $12.57 $12.06 $12.04
    Distributions Paid / Declared Per Share $0.35 $0.45 $0.35 $0.35 $0.35
     

    Portfolio and Investment Activity

    As of September 30, 2024, GECC held total investments of $333.3 million at fair value, as follows:

    • 53 debt investments in corporate credit, totaling approximately $204.8 million, representing 61.4% of the fair market value of the Company’s total investments. Secured debt investments comprised a substantial majority of the fair market value of the Company’s debt investments.
    • An investment in Great Elm Specialty Finance, totaling approximately $43.6 million, comprised of one debt investment of $29.7 million and one equity investment of $13.9 million, representing 8.9% and 4.2%, respectively, of the fair market value of the Company’s total investments.
    • An investment in the CLO JV, totaling approximately $32.9 million, representing 9.9% of the fair market value of the Company’s total investments.
    • Seven dividend paying equity investments, totaling approximately $36.3 million, representing 10.9% of the fair market value of the Company’s total investments.
    • Other equity investments, totaling approximately $15.7 million, representing 4.7% of the fair market value of the Company’s total investments.

    As of September 30, 2024, the weighted average current yield on the Company’s debt portfolio was 12.8%. Floating rate instruments comprised approximately 72% of the fair market value of debt investments (up from 69% last quarter) and the Company’s fixed rate debt investments had a weighted average maturity of 2.0 years.

    During the quarter ended September 30, 2024, we deployed approximately $73.6 million into 29 investments(1) at a weighted average current yield of 11.5%.

    During the quarter ended September 30, 2024, we monetized, in part or in full, 38 investments for approximately $39.1 million(2), at a weighted average current yield of 10.9%. Monetizations include $13.2 million of mandatory debt paydowns and redemptions at a weighted average current yield of 13.1%.

    Financial Review
    Total investment income for the quarter ended September 30, 2024 was $11.7 million, or $1.12 per share. Net expenses for the quarter ended September 30, 2024 were approximately $7.7 million, or $0.73 per share.

    Net realized and unrealized losses for the quarter ended September 30, 2024 were approximately $0.6 million, or $0.06 per share.

    Liquidity and Capital Resources
    As of September 30, 2024, cash and money market fund investments totaled approximately $26.0 million.

    As of September 30, 2024, total debt outstanding (par value) was $235.3 million, comprised of 6.75% senior notes due January 2025 (NASDAQ: GECCM), 5.875% senior notes due June 2026 (NASDAQ: GECCO), 8.75% senior notes due September 2028 (NASDAQ: GECCZ), 8.50% senior notes due April 2029 (NASDAQ: GECCI) and 8.125% senior notes due December 2029 (NASDAQ: GECCH).

    Subsequent to quarter-end, the Company used the net proceeds from the GECCH Notes issuance and cash on hand to redeem all GECCM Notes. As of October 30, 2024, pro-forma total debt outstanding (par value) was $195.4 million.

    Distributions
    The Company’s Board of Directors has approved a quarterly cash distribution of $0.35 per share for the quarter ending December 31, 2024. The fourth quarter distribution will be payable on December 31, 2024 to stockholders of record as of December 16, 2024.

    The distribution equates to a 14.0% annualized dividend yield on the Company’s closing market price on October 30, 2024 of $10.03 and an 11.6% annualized dividend yield on the Company’s September 30, 2024 NAV of $12.04 per share.

    Conference Call and Webcast
    GECC will discuss these results in a conference call today at 8:30 a.m. ET.

    Conference Call Details
       
    Date/Time: Thursday, October 31, 2024 – 8:30 a.m. ET
       
    Participant Dial-In Numbers:  
    (United States): 877-407-0789
    (International): 201-689-8562
       

    To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode “GECC”. An accompanying slide presentation will be available in pdf format via the “Events and Presentations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release.

    Webcast

    The call and presentation will also be simultaneously webcast over the internet via the “Events and Presentations” section of GECC’s website or by clicking on the webcast link here.

    About Great Elm Capital Corp.
    GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses. For additional information, please visit http://www.greatelmcc.com.

    Cautionary Statement Regarding Forward-Looking Statements
    Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. The key factors that could cause actual results to differ materially from those projected in the forward-looking statements include, without limitation: conditions in the credit markets, our expected financings and investments, including interest rate volatility, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

    This press release does not constitute an offer of any securities for sale.

    Endnotes:
    (1) This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and capitalized PIK income. Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.
    (2) This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.

    Media & Investor Contact:
    Investor Relations
    investorrelations@greatelmcap.com

    GREAT ELM CAPITAL CORP.
    CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
    Dollar amounts in thousands (except per share amounts)

        September 30,
    2024    		     December 31,
    2023    		  
    Assets            
    Investments            
    Non-affiliated, non-controlled investments, at fair value (amortized cost of $259,732 and $179,626, respectively)   $ 256,777     $ 183,335  
    Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $85,484 and $10,807, respectively)     85,474       10,807  
    Affiliated investments, at fair value (amortized cost of $12,378 and $13,423, respectively)     –       1,067  
    Controlled investments, at fair value (amortized cost of $80,642 and $46,300, respectively)     76,506       46,210  
    Total investments     418,757       241,419  
                 
    Cash and cash equivalents     305       953  
    Receivable for investments sold     3,121       840  
    Interest receivable     3,652       2,105  
    Dividends receivable     622       1,001  
    Due from portfolio company     1       37  
    Deferred financing costs     262       335  
    Prepaid expenses and other assets     306       135  
    Total assets   $ 427,026     $ 246,825  
                 
    Liabilities            
    Notes payable (including unamortized discount of $5,317 and $2,896, respectively)   $ 229,967     $ 140,214  
    Payable for investments purchased     66,043       3,327  
    Interest payable     170       32  
    Accrued incentive fees payable     2,594       1,431  
    Distributions payable     –       760  
    Due to affiliates     1,445       1,195  
    Accrued expenses and other liabilities     981       1,127  
    Total liabilities   $ 301,200     $ 148,086  
                 
    Commitments and contingencies   $ –     $ –  
                 
    Net Assets            
    Common stock, par value $0.01 per share (100,000,000 shares authorized, 10,449,888 shares issued and outstanding and 7,601,958 shares issued and outstanding, respectively)   $ 104     $ 76  
    Additional paid-in capital     319,438       283,795  
    Accumulated losses     (193,716 )     (185,132 )
    Total net assets   $ 125,826     $ 98,739  
    Total liabilities and net assets   $ 427,026     $ 246,825  
    Net asset value per share   $ 12.04     $ 12.99  
     


    GREAT ELM CAPITAL CORP.
    CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
    Dollar amounts in thousands (except per share amounts)

        For the Three Months Ended
    September 30,    		     For the Nine Months Ended
    September 30,    		  
        2024     2023     2024     2023  
    Investment Income:                        
    Interest income from:                        
    Non-affiliated, non-controlled investments   $ 6,321     $ 6,357     $ 18,276     $ 17,669  
    Non-affiliated, non-controlled investments (PIK)     826       552       2,267       1,591  
    Affiliated investments     –       33       64       95  
    Controlled investments     974       650       2,858       1,715  
    Controlled investments (PIK)     –       –       –       233  
    Total interest income     8,121       7,592       23,465       21,303  
    Dividend income from:                        
    Non-affiliated, non-controlled investments     584       254       2,015       899  
    Controlled investments     3,002       525       3,912       1,841  
    Total dividend income     3,586       779       5,927       2,740  
    Other commitment fees from non-affiliated, non-controlled investments     –       802       700       2,406  
    Other income from:                        
    Non-affiliated, non-controlled investments     20       103       92       214  
    Total other income     20       103       92       214  
    Total investment income   $ 11,727     $ 9,276     $ 30,184     $ 26,663  
                             
    Expenses:                        
    Management fees   $ 1,201     $ 899     $ 3,209     $ 2,652  
    Incentive fees     1,018       763       2,580       2,315  
    Administration fees     375       420       1,156       1,056  
    Custody fees     38       19       110       62  
    Directors’ fees     52       51       160       156  
    Professional services     409       422       1,210       1,392  
    Interest expense     4,210       3,344       10,490       8,934  
    Other expenses     277       267       866       770  
    Total expenses   $ 7,580     $ 6,185     $ 19,781     $ 17,337  
    Net investment income before taxes   $ 4,147     $ 3,091     $ 10,403     $ 9,326  
    Excise tax   $ 75     $ 39     $ 80     $ 67  
    Net investment income   $ 4,072     $ 3,052     $ 10,323     $ 9,259  
                             
    Net realized and unrealized gains (losses):                        
    Net realized gain (loss) on investment transactions from:                        
    Non-affiliated, non-controlled investments   $ 227     $ 1,637     $ 2,738     $ 4,024  
    Affiliated investments     (1 )     –       (626 )     –  
    Controlled investments     –       (3,461 )     –       (3,461 )
    Realized loss on repurchase of debt     (3 )     –       (3 )     –  
    Total net realized gain (loss)     223       (1,824 )     2,109       563  
    Net change in unrealized appreciation (depreciation) on investment transactions from:        
    Non-affiliated, non-controlled investments     715       2,581       (6,674 )     8,416  
    Affiliated investments     1       25       (22 )     177  
    Controlled investments     (1,537 )     3,926       (4,046 )     2,707  
    Total net change in unrealized appreciation (depreciation)     (821 )     6,532       (10,742 )     11,300  
    Net realized and unrealized gains (losses)   $ (598 )   $ 4,708     $ (8,633 )   $ 11,863  
    Net increase (decrease) in net assets resulting from operations   $ 3,474     $ 7,760     $ 1,690     $ 21,122  
                             
    Net investment income per share (basic and diluted):   $ 0.39     $ 0.40     $ 1.08     $ 1.22  
    Earnings per share (basic and diluted):   $ 0.33     $ 1.02     $ 0.18     $ 2.77  
    Weighted average shares outstanding (basic and diluted):     10,449,888       7,601,958       9,556,695       7,601,958  

    The MIL Network –

  • MIL-OSI: WTW Reports Third Quarter 2024 Earnings

    Source: GlobeNewswire (MIL-OSI)

    • Revenue1 increased 6% to $2.3 billion for the quarter with organic growth of 6% for the quarter
    • Diluted Loss2 per Share was $16.44 for the quarter
    • Adjusted Diluted Earnings per Share were $2.93 for the quarter, up 31% from prior year
    • Operating Margin2 was (33.5)% for the quarter
    • Adjusted Operating Margin was 18.1% for the quarter, up 190 basis points from prior year

    LONDON, Oct. 31, 2024 (GLOBE NEWSWIRE) — WTW (NASDAQ: WTW) (the “Company”), a leading global advisory, broking and solutions company, today announced financial results for the third quarter ended September 30, 2024.

    “We had another strong quarter fueled by revenue growth, operating leverage and the success of our Transformation program. Our revenue growth of 6% for the quarter is evidence that our value proposition is continuing to resonate in the market and that our investments in talent and technology are succeeding. We are also making ongoing progress on our commitment to improve cash flow. Given our strong performance and momentum, we are entering the fourth quarter with confidence in our ability to deliver on our targets for the year and drive sustainable, profitable growth going forward.”

    Consolidated Results

    As reported, USD millions, except %

    Key Metrics Q3-24 Q3-23 Y/Y Change
    Revenue1 $2,289 $2,166 Reported 6% | CC 6% | Organic 6%
    (Loss)/Income from Operations2 $(766) $159 NM
    Operating Margin2 % (33.5)% 7.3% NM
    Adjusted Operating Income $414 $351 18%
    Adjusted Operating Margin % 18.1% 16.2% 190 bps
    Net (Loss)/Income2 $(1,672) $139 NM
    Adjusted Net Income $299 $236 27%
    Diluted EPS2 $(16.44) $1.29 NM
    Adjusted Diluted EPS $2.93 $2.24 31%
    1 The revenue amounts included in this release are presented on a U.S. GAAP basis except where stated otherwise. This excludes reinsurance revenue which is reported in discontinued operations. The segment discussion is on an organic basis.
    2 Loss from Operations, Operating Margin, Net Loss and Diluted EPS for the third quarter of 2024 include pre-tax non-cash losses and impairment charges of over $1.0 billion each related to the pending sale of TRANZACT.
    NM Not meaningful.

    Revenue was $2.29 billion for the third quarter of 2024, an increase of 6% as compared to $2.17 billion for the same period in the prior year. Excluding the impact of foreign currency, revenue increased 6%. On an organic basis, revenue increased 6%. See Supplemental Segment Information for additional detail on book-of-business settlements and interest income included in revenue.

    Net Loss for the third quarter of 2024 was $1.67 billion compared to Net Income of $139 million in the prior-year third quarter. Loss from Operations, Operating Margin, Net Loss and Diluted EPS for the third quarter of 2024 include pre-tax non-cash losses and impairment charges of over $1.0 billion each related to the pending sale of TRANZACT. Adjusted EBITDA for the third quarter was $501 million, or 21.9% of revenue, an increase of 15%, compared to Adjusted EBITDA of $436 million, or 20.1% of revenue, in the prior-year third quarter. The U.S. GAAP tax rate for the third quarter was 16.1%, and the adjusted income tax rate for the third quarter used in calculating adjusted diluted earnings per share was 19.7%.

    Cash Flow and Capital Allocation

    Cash flows from operating activities were $913 million for the nine months ended September 30, 2024, compared to $823 million for the prior year. Free cash flow for the nine months ended September 30, 2024 and 2023 was $807 million and $707 million, respectively, an increase of $100 million, primarily driven by operating margin expansion, partially offset by cash outflows related to transformation and discretionary compensation payments. During the quarter ended September 30, 2024, the Company repurchased $205 million of WTW outstanding shares.

    Third Quarter 2024 Segment Highlights

    Health, Wealth & Career (“HWC”)

    As reported, USD millions, except %

    Health, Wealth & Career Q3-24 Q3-23 Y/Y Change
    Total Revenue $1,328 $1,282 Reported 4% | CC 3% | Organic 4%
    Operating Income $329 $305 8%
    Operating Margin % 24.7% 23.8% 90 bps

    The HWC segment had revenue of $1.33 billion in the third quarter of 2024, an increase of 4% (3% increase constant currency and 4% organic) from $1.28 billion in the prior year. Health had organic revenue growth driven by strong client retention, new local appointments and the continued expansion of our Global Benefits Management client portfolio in International and Europe, along with increased brokerage income in North America. Wealth generated organic revenue growth from higher levels of Retirement work in Europe, an increase in our Investments business due to capital market improvements and growth from our LifeSight solution. Career had organic revenue growth from increased compensation survey sales and advisory services in Work & Rewards and product revenue in Employee Experience. Benefits Delivery & Outsourcing (BD&O) had an organic revenue decline for the quarter primarily as a result of deliberately moderating growth in Individual Marketplace and a stronger comparable in Outsourcing.

    Operating margins in the HWC segment increased 90 basis points from the prior-year third quarter to 24.7%, primarily from Transformation savings. Please refer to the Supplemental Slides for TRANZACT’s standalone historical financial results.

    Risk & Broking (“R&B”)

    As reported, USD millions, except %

    Risk & Broking Q3-24 Q3-23 Y/Y Change
    Total Revenue $940 $855 Reported 10% | CC 10% | Organic 10%
    Operating Income $170 $134 27%
    Operating Margin % 18.1% 15.7% 240 bps

    The R&B segment had revenue of $940 million in the third quarter of 2024, an increase of 10% (10% increase constant currency and organic) from $855 million in the prior year. Corporate Risk & Broking (CRB) had organic revenue growth driven by higher levels of new business activity and strong client retention. Insurance Consulting and Technology (ICT) had organic revenue growth for the quarter primarily due to strong software sales in Technology, partially offset by tempered demand for discretionary services in Consulting.

    Operating margins in the R&B segment increased 240 basis points from the prior-year third quarter to 18.1%, primarily due to operating leverage driven by organic revenue growth and disciplined expense management, as well as Transformation savings.

    2024 Outlook

    Based on current and anticipated market conditions, the Company’s full-year targets for 2024, consistent with those targets that have been previously provided, are as follows. Refer to the Supplemental Slides for additional detail.

    • Expect to deliver revenue of $9.9 billion or greater and mid-single digit organic revenue growth for the full year 2024
    • Expect to deliver adjusted operating margin of 23.0% – 23.5% for the full year 2024
    • Expect to deliver adjusted diluted earnings per share of $16.00 – $17.00 for the full year 2024
    • Expect approximately $88 million in non-cash pension income for the full year 2024
    • Expect a foreign currency headwind on adjusted earnings per share of approximately $0.06 for the full year 2024 at today’s rates, down from $0.10 previously
    • Expect to deliver approximately $450 million of cumulative run-rate savings from the Transformation program by the end of 2024 with total program costs of $1.175 billion.

    Outlook includes Non-GAAP financial measures. We do not reconcile forward-looking Non-GAAP measures for reasons explained below.

    In addition, WTW will host an Investor Day on Tuesday, December 3, 2024 beginning at approximately 9:00 a.m. Eastern Time. A live webcast presentation will be available at www.wtwco.com and a replay of the webcast will be available on the Company’s website following the event.

    Conference Call

    The Company will host a live webcast and conference call to discuss the financial results for the third quarter 2024. It will be held on Thursday, October 31, 2024, beginning at 9:00 a.m. Eastern Time. A live broadcast of the conference call will be available on WTW’s website here. The conference call will include a question-and-answer session. To participate in the question-and-answer session, please register here. An online replay will be available at www.wtwco.com shortly after the call concludes.

    About WTW

    At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at www.wtwco.com.

    WTW Non-GAAP Measures

    In order to assist readers of our consolidated financial statements in understanding the core operating results that WTW’s management uses to evaluate the business and for financial planning, we present the following non-GAAP measures: (1) Constant Currency Change, (2) Organic Change, (3) Adjusted Operating Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted Net Income, (6) Adjusted Diluted Earnings Per Share, (7) Adjusted Income Before Taxes, (8) Adjusted Income Taxes/Tax Rate, (9) Free Cash Flow and (10) Free Cash Flow Margin.

    We believe that those measures are relevant and provide pertinent information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.

    Within the measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they may be part of our full-year results. Additionally, we have historically adjusted for certain items which are not described below, but for which we may adjust in a future period when applicable. Items applicable to the quarter or full year results, or the comparable periods, include the following:

    • Restructuring costs and transaction and transformation – Management believes it is appropriate to adjust for restructuring costs and transaction and transformation when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded.
    • Impairment – Adjustment to remove the non-cash goodwill impairment associated with our Benefits, Delivery and Administration reporting unit related to the pending divestiture of our TRANZACT business.
    • Provisions for specified litigation matters – We will include provisions for litigation matters which we believe are not representative of our core business operations. Among other things, we determine this by reference to the amount of the loss (net of insurance and other recovery receivables) and by reference to whether the matter relates to an unusual and complex scenario that is not expected to be repeated as part of our ongoing, ordinary business. These amounts are presented net of insurance and other recovery receivables. See the footnotes to the respective reconciliation tables below for more specificity on the litigation matter excluded from adjusted results.
    • Gains and losses on disposals of operations – Adjustment to remove the gains or losses resulting from disposed operations that have not been classified as discontinued operations.
    • Tax effect of significant adjustments – Relates to the incremental tax expense or benefit resulting from significant or unusual events including significant statutory tax rate changes enacted in material jurisdictions in which we operate, internal reorganizations of ownership of certain businesses that reduced the investment held by our U.S.-controlled subsidiaries and the recovery of certain refunds or payment of taxes related to businesses in which we no longer participate.

    We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis. We believe presenting constant currency and organic information provides valuable supplemental information regarding our comparable results, consistent with how we evaluate our performance internally.

    We consider Constant Currency Change, Organic Change, Adjusted Operating Income/Margin, Adjusted EBITDA/Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Income Before Taxes, Adjusted Income Taxes/Tax Rate and Free Cash Flow to be important financial measures, which are used to internally evaluate and assess our core operations and to benchmark our operating and liquidity results against our competitors. These non-GAAP measures are important in illustrating what our comparable operating and liquidity results would have been had we not incurred transaction-related and non-recurring items. Reconciliations of these measures are included in the accompanying tables with the following exception: The Company does not reconcile its forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information, such as foreign currency impacts necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, is available to the Company without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The Company provides non-GAAP financial measures that it believes will be achieved, however it cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.

    Our non-GAAP measures and their accompanying definitions are presented as follows:

    Constant Currency Change – Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior year local currency results are first translated using the current year monthly average exchange rates. The change is calculated by comparing the prior year revenue, translated at the current year monthly average exchange rates, to the current year as reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

    Organic Change – Excludes the impact of fluctuations in foreign currency exchange rates, as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these transaction-related items can vary from period to period.

    Adjusted Operating Income/Margin – (Loss)/Income from operations adjusted for impairment, amortization, restructuring costs, transaction and transformation and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue. We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.

    Adjusted EBITDA/Margin – Net (Loss)/Income adjusted for provision for income taxes, interest expense, impairment, depreciation and amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA Margin is calculated by dividing adjusted EBITDA by revenue. We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.

    Adjusted Net Income – Net (Loss)/Income Attributable to WTW adjusted for impairment, amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

    Adjusted Diluted Earnings Per Share – Adjusted Net Income divided by the weighted-average number of ordinary shares, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.

    Adjusted Income Before Taxes – (Loss)/Income from operations before income taxes adjusted for impairment, amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

    Adjusted Income Taxes/Tax Rate – Benefit from/(provision for) income taxes adjusted for taxes on certain items of impairment, amortization, restructuring costs, transaction and transformation, gains and losses on disposals of operations, the tax effects of internal reorganizations, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate. Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.

    Free Cash Flow – Cash flows from operating activities less cash used to purchase fixed assets and software for internal use. Free Cash Flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures. Management believes that free cash flow presents the core operating performance and cash-generating capabilities of our business operations.

    Free Cash Flow Margin – Free Cash Flow as a percentage of revenue, which represents how much of revenue would be realized on a cash basis. We consider this measure to be a meaningful metric for tracking cash conversion on a year-over-year basis due to the non-cash nature of our pension income, which is included in our GAAP and Non-GAAP earnings metrics presented herein.

    These non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our condensed consolidated financial statements.

    WTW Forward-Looking Statements

    This document contains ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. These forward-looking statements include information about possible or assumed future results of our operations. All statements, other than statements of historical facts, that address activities, events, or developments that we expect or anticipate may occur in the future, including such things as our outlook, plans and references to future performance, including our future financial and operating results (including our revenue, costs, or margins), short-term and long-term financial goals, plans, objectives, expectations and intentions, including with respect to organic revenue growth, free cash flow generation, adjusted net revenue, adjusted operating margin and adjusted earnings per share; future share repurchases; demand for our services and competitive strengths; strategic goals; existing and evolving business strategies including those related to acquisition and disposition activity; the benefits of new initiatives; the growth of our business and operations; the sustained health of our product, service, transaction, client, and talent assessment and management pipelines; our ability to successfully manage ongoing leadership, organizational, and technology changes, including investments in improving systems and processes; our ability to implement and realize anticipated benefits of any cost-savings initiatives including our multi-year operational transformation program; the potential impact of natural or man-made disasters like health pandemics and other world health crises; future capital expenditures; ongoing working capital efforts; the impact of changes to tax laws on our financial results; and our recognition of future impairment charges or write-off of receivables, are forward-looking statements. Also, when we use words such as ‘may’, ‘will’, ‘would’, ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘plan’, ‘continues’, ‘seek’, ‘target’, ‘goal’, ‘focus’, ‘probably’, or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

    There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained in this document, including the following: our ability to successfully establish, execute and achieve our global business strategy as it evolves; our ability to fully realize the anticipated benefits of our growth strategy, including inorganic growth through acquisitions; our ability to make divestitures, including the pending sale of our TRANZACT business (inclusive of all the legal entities that comprise such business), or acquisitions, including our ability to integrate or manage acquired businesses or de-integrate businesses to be disposed, as well as our ability to identify and successfully execute on opportunities for strategic collaboration; our ability to consummate the pending sale of TRANZACT, and related incremental risks associated therewith including our ability to obtain approval (or for applicable waiting periods to expire) under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976; our ability to successfully manage ongoing organizational changes, including as part of our multi-year operational transformation program, investments in improving systems and processes, and in connection with our acquisition and divestiture activities, including the pending sale of TRANZACT, and related to changes in leadership in any of our businesses; risks relating to changes in our management structures and in senior leadership; our ability to achieve our short-term and long-term financial goals, such as with respect to our cash flow generation, and the timing with respect to such achievement; the risks related to changes in general economic conditions, business and political conditions, changes in the financial markets, inflation, credit availability, increased interest rates and changes in trade policies; the risks to our short-term and long-term financial goals from any of the risks or uncertainties set forth herein; the risks relating to the adverse impacts of macroeconomic trends, including inflation, changes in interest rates and trade policies, as well as political events, war, such as the Russia-Ukraine and Middle East conflicts, and other international disputes, terrorism, natural disasters, public health issues and other business interruptions on the global economy and capital markets, which could have a material adverse effect on our business, financial condition, results of operations, and long-term goals; our ability to successfully hedge against fluctuations in foreign currency rates; the risks relating to the adverse impacts of natural or man-made disasters such as health pandemics and other world health crises on the demand for our products and services, our cash flows and our business operations; material interruptions to or loss of our information processing capabilities, or failure to effectively maintain and upgrade our information technology resources and systems and related risks of cybersecurity breaches or incidents; our ability to comply with complex and evolving regulations related to data privacy, cybersecurity, and artificial intelligence; the risks relating to the transitional arrangements in effect subsequent to our previously-completed sale of Willis Re to Arthur J. Gallagher & Co.; significant competition that we face and the potential for loss of market share and/or profitability; the impact of seasonality and differences in timing of renewals and non-recurring revenue increases from disposals and book-of-business sales; the insufficiency of client data protection, potential breaches of information systems or insufficient safeguards against cybersecurity breaches or incidents; the risk of increased liability or new legal claims arising from our new and existing products and services, and expectations, intentions and outcomes relating to outstanding litigation; the risk of substantial negative outcomes on existing litigation or investigation matters; changes in the regulatory environment in which we operate, including, among other risks, the impacts of pending competition law and regulatory investigations; various claims, government inquiries or investigations or the potential for regulatory action; our ability to integrate direct-to-consumer sales and marketing solutions with our existing offerings and solutions; disasters or business continuity problems; our ability to successfully enhance our billing, collection and other working capital efforts, and thereby increase our free cash flow; our ability to properly identify and manage conflicts of interest; reputational damage, including from association with third parties; reliance on third-party service providers and suppliers; the loss of key employees or a large number of employees and rehiring rates; our ability to maintain our corporate culture; doing business internationally, including the impact of foreign currency exchange rates; compliance with extensive government regulation; the risk of sanctions imposed by governments, or changes to associated sanction regulations (such as sanctions imposed on Russia) and related counter-sanctions; our ability to effectively apply technology, data and analytics changes for internal operations, maintaining industry standards and meeting client preferences; changes and developments in the insurance industry or the U.S. healthcare system, including those related to Medicare, any legislative actions from the current U.S. Congress, the recent Final Rule from the Centers for Medicare & Medicaid Services for contract year 2025 and any judicial claims, rulings and appeals related thereto, and any other changes and developments in legal, regulatory, economic, business or operational conditions that could impact our Medicare benefits businesses such as TRANZACT; the inability to protect our intellectual property rights, or the potential infringement upon the intellectual property rights of others; fluctuations in our pension assets and liabilities and related changes in pension income, including as a result of, related to, or derived from movements in the interest rate environment, investment returns, inflation, or changes in other assumptions that are used to estimate our benefit obligations and their effect on adjusted earnings per share; our capital structure, including indebtedness amounts, the limitations imposed by the covenants in the documents governing such indebtedness and the maintenance of the financial and disclosure controls and procedures of each; our ability to obtain financing on favorable terms or at all; adverse changes in our credit ratings; the impact of recent or potential changes to U.S. or foreign laws, and the enactment of additional, or the revision of existing, state, federal, and/or foreign laws and regulations, recent judicial decisions and development of case law, other regulations and any policy changes and legislative actions, including those that may impose additional excise taxes or impact our effective tax rate; U.S. federal income tax consequences to U.S. persons owning at least 10% of our shares; changes in accounting principles, estimates or assumptions; our recognition of non-cash pre-tax losses and related impairment charges in connection with our pending sale of TRANZACT and other future impairment charges or write-offs of receivables; risks relating to or arising from environmental, social and governance practices; fluctuation in revenue against our relatively fixed or higher than expected expenses; the risk that investment levels, including cash spending, to achieve additional expected savings under our multi-year operational transformation program; the laws of Ireland being different from the laws of the U.S. and potentially affording less protections to the holders of our securities; and our holding company structure potentially preventing us from being able to receive dividends or other distributions in needed amounts from our subsidiaries.

    The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. For more information, please see Part I, Item 1A in our Annual Report on Form 10-K, and our subsequent filings with the SEC. Copies are available online at www.sec.gov or www.wtwco.com.

    Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

    Our forward-looking statements speak only as of the date made, and we will not update these forward-looking statements unless the securities laws require us to do so. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.

    Contact

    INVESTORS

    Claudia De La Hoz | Claudia.Delahoz@wtwco.com

    WTW
    Supplemental Segment Information
    (In millions of U.S. dollars)
    (Unaudited)
    REVENUE    
                  Components of Revenue Change(i)
                        Less:       Less:    
        Three Months Ended
     September 30,    		     As Reported   Currency   Constant Currency   Acquisitions/   Organic
        2024     2023     % Change   Impact   Change   Divestitures   Change
                                     
    Health, Wealth & Career                                
    Revenue excluding interest income   $ 1,320     $ 1,275     4 %   0 %   3 %   0 %   4 %
    Interest income     8       7                      
    Total     1,328       1,282     4 %   0 %   3 %   0 %   4 %
                                     
    Risk & Broking                                
    Revenue excluding interest income   $ 911     $ 830     10 %   0 %   10 %   0 %   10 %
    Interest income     29       25                      
    Total     940       855     10 %   0 %   10 %   0 %   10 %
                                     
    Segment Revenue   $ 2,268     $ 2,137     6 %   0 %   6 %   0 %   6 %
    Reimbursable expenses and other     15       22                      
    Interest income     6       7                      
    Revenue   $ 2,289     $ 2,166     6 %   0 %   6 %   0 %   6%(ii)  
                  Components of Revenue Change(i)
                        Less:       Less:    
        Nine Months Ended September 30,     As Reported   Currency   Constant Currency   Acquisitions/   Organic
        2024     2023     % Change   Impact   Change   Divestitures   Change
                                     
    Health, Wealth & Career                                
    Revenue excluding interest income   $ 3,898     $ 3,766     4 %   0 %   4 %   0 %   4 %
    Interest income     26       18                      
    Total     3,924       3,784     4 %   0 %   4 %   0 %   4 %
                                     
    Risk & Broking                                
    Revenue excluding interest income   $ 2,811     $ 2,607     8 %   0 %   8 %   0 %   8 %
    Interest income     86       52                      
    Total     2,897       2,659     9 %   0 %   9 %   0 %   9 %
                                     
    Segment Revenue   $ 6,821     $ 6,443     6 %   0 %   6 %   0 %   6 %
    Reimbursable expenses and other     56       90                      
    Interest income     18       36                      
    Revenue   $ 6,895     $ 6,569     5 %   0 %   5 %   0 %   5%(ii)  

    (i)  Components of revenue change may not add due to rounding.
    (ii)  Interest income did not contribute to organic change for the three and nine months ended September 30, 2024.

    BOOK-OF-BUSINESS SETTLEMENTS AND INTEREST INCOME

        Three Months Ended September 30,  
        HWC     R&B     Corporate     Total  
        2024     2023     2024     2023     2024     2023     2024     2023  
    Book-of-business settlements   $ 3     $ —     $ 4     $ 1     $ —     $ —     $ 7     $ 1  
    Interest income     8       7       29       25       6       7       43       39  
    Total   $ 11     $ 7     $ 33     $ 26     $ 6     $ 7     $ 50     $ 40  
        Nine Months Ended September 30,  
        HWC     R&B     Corporate     Total  
        2024     2023     2024     2023     2024     2023     2024     2023  
    Book-of-business settlements   $ 3     $ —     $ 8     $ 11     $ —     $ —     $ 11     $ 11  
    Interest income     26       18       86       52       18       36       130       106  
    Total   $ 29     $ 18     $ 94     $ 63     $ 18     $ 36     $ 141     $ 117  


    SEGMENT OPERATING INCOME (i)

        Three Months Ended
    September 30,    		    
                   
                   
                       
                       
                       
        2024     2023    
                   
                   
                       
                       
                       
                   
                   
                   
                       
                       
                       
    Health, Wealth & Career   $ 329     $ 305    
                   
                   
                       
                       
                       
    Risk & Broking     170       134    
                   
                   
                       
                       
                       
    Segment Operating Income   $ 499     $ 439    
        Nine Months Ended
    September 30,    		  
        2024     2023  
                 
    Health, Wealth & Career   $ 941     $ 836  
    Risk & Broking     575       459  
    Segment Operating Income   $ 1,516     $ 1,295  

    (i) Segment operating income excludes certain costs, including amortization of intangibles, restructuring costs, transaction and transformation expenses, certain litigation provisions, and to the extent that the actual expense based upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally-allocated expenses and the actual expenses reported for U.S. GAAP purposes.

    SEGMENT OPERATING MARGINS

        Three Months Ended September 30,
        2024   2023
    Health, Wealth & Career   24.7%   23.8%
    Risk & Broking   18.1%   15.7%
        Nine Months Ended
    September 30,
        2024   2023
    Health, Wealth & Career   24.0%   22.1%
    Risk & Broking   19.8%   17.3%


    RECONCILIATIONS OF SEGMENT OPERATING INCOME TO (LOSS)/INCOME FROM OPERATIONS BEFORE INCOME TAXES

        Three Months Ended September 30,  
        2024     2023  
                 
    Segment Operating Income   $ 499     $ 439  
    Impairment(i)     (1,042 )     —  
    Amortization     (56 )     (62 )
    Restructuring costs     (8 )     (17 )
    Transaction and transformation(ii)     (74 )     (113 )
    Unallocated, net(iii)     (85 )     (88 )
    (Loss)/Income from Operations     (766 )     159  
    Interest expense     (65 )     (61 )
    Other (loss)/income, net     (1,163 )     66  
    (Loss)/income from operations before income taxes   $ (1,994 )   $ 164  
        Nine Months Ended September 30,  
        2024     2023  
                 
    Segment Operating Income   $ 1,516     $ 1,295  
    Impairment(i)     (1,042 )     —  
    Amortization     (176 )     (203 )
    Restructuring costs     (29 )     (30 )
    Transaction and transformation(ii)     (296 )     (265 )
    Unallocated, net(iii)     (247 )     (211 )
    (Loss)/Income from Operations     (274 )     586  
    Interest expense     (197 )     (172 )
    Other (loss)/income, net     (1,113 )     126  
    (Loss)/income from operations before income taxes   $ (1,584 )   $ 540  

     (i) Represents the non-cash goodwill impairment associated with our BDA reporting unit related to the pending divestiture of our TRANZACT business.
     (ii) In 2024 and 2023, in addition to legal fees and other transaction costs, includes primarily consulting fees and compensation costs related to the Transformation program.
     (iii) Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes.

    WTW
    Reconciliations of Non-GAAP Measures
    (In millions of U.S. dollars, except per share data)
    (Unaudited)

    RECONCILIATIONS OF NET (LOSS)/INCOME ATTRIBUTABLE TO WTW TO ADJUSTED DILUTED EARNINGS PER SHARE

        Three Months Ended September 30,  
        2024     2023  
                 
    Net (loss)/income attributable to WTW   $ (1,675 )   $ 136  
    Adjusted for certain items:            
    Impairment     1,042       —  
    Amortization     56       62  
    Restructuring costs     8       17  
    Transaction and transformation     74       113  
    Loss/(gain) on disposal of operations     1,190       (41 )
    Tax effect on certain items listed above(ii)     (396 )     (51 )
    Adjusted Net Income   $ 299     $ 236  
                 
    Weighted-average ordinary shares, diluted     102       105  
                 
    Diluted (Loss)/Earnings Per Share   $ (16.44 )   $ 1.29  
    Adjusted for certain items:(iii)            
    Impairment     10.23       —  
    Amortization     0.55       0.59  
    Restructuring costs     0.08       0.16  
    Transaction and transformation     0.73       1.07  
    Loss/(gain) on disposal of operations     11.68       (0.39 )
    Tax effect on certain items listed above(ii)     (3.89 )     (0.48 )
    Adjusted Diluted Earnings Per Share(iii)   $ 2.93     $ 2.24  
        Nine Months Ended September 30,  
        2024     2023  
                 
    Net (loss)/income attributable to WTW   $ (1,344 )   $ 433  
    Adjusted for certain items:            
    Impairment     1,042       —  
    Amortization     176       203  
    Restructuring costs     29       30  
    Transaction and transformation     296       265  
    Provision for specified litigation matter(i)     13       —  
    Loss/(gain) on disposal of operations     1,190       (44 )
    Tax effect on certain items listed above(ii)     (492 )     (128 )
    Tax effect of significant adjustments     (7 )     2  
    Adjusted Net Income   $ 903     $ 761  
                 
    Weighted-average ordinary shares, diluted     103       107  
                 
    Diluted (Loss)/Earnings Per Share   $ (13.11 )   $ 4.06  
    Adjusted for certain items:(iii)            
    Impairment     10.17       —  
    Amortization     1.72       1.90  
    Restructuring costs     0.28       0.28  
    Transaction and transformation     2.89       2.48  
    Provision for specified litigation matter(i)     0.13       —  
    Loss/(gain) on disposal of operations     11.61       (0.41 )
    Tax effect on certain items listed above(ii)     (4.80 )     (1.20 )
    Tax effect of significant adjustments     (0.07 )     0.02  
    Adjusted Diluted Earnings Per Share(iii)   $ 8.81     $ 7.13  

     (i) Represents a provision related to potential litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
    (ii) The tax effect was calculated using an effective tax rate for each item.
    (iii) Per share values and totals may differ due to rounding.

    RECONCILIATIONS OF NET (LOSS)/INCOME TO ADJUSTED EBITDA

        Three Months Ended September 30,    
        2024     2023    
                   
    Net (Loss)/Income   $ (1,672 ) (73.0 )% $ 139   6.4 %
    Provision for income taxes     (322 )     25    
    Interest expense     65       61    
    Impairment     1,042       —    
    Depreciation     60       60    
    Amortization     56       62    
    Restructuring costs     8       17    
    Transaction and transformation     74       113    
    Loss/(gain) on disposal of operations     1,190       (41 )  
    Adjusted EBITDA and Adjusted EBITDA Margin   $ 501   21.9 % $ 436   20.1 %
        Nine Months Ended September 30,    
        2024     2023    
                   
    Net (Loss)/Income   $ (1,336 ) (19.4 )% $ 441   6.7 %
    Provision for income taxes     (248 )     99    
    Interest expense     197       172    
    Impairment     1,042       —    
    Depreciation     176       184    
    Amortization     176       203    
    Restructuring costs     29       30    
    Transaction and transformation     296       265    
    Provision for specified litigation matter(i)     13       —    
    Loss/(gain) on disposal of operations     1,190       (44 )  
    Adjusted EBITDA and Adjusted EBITDA Margin   $ 1,535   22.3 % $ 1,350   20.6 %

     (i) Represents a provision related to potential litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

    RECONCILIATIONS OF (LOSS)/INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME

        Three Months Ended September 30,    
        2024     2023    
                   
    (Loss)/Income from operations and Operating margin   $ (766 ) (33.5 )% $ 159   7.3 %
    Adjusted for certain items:              
    Impairment     1,042       —    
    Amortization     56       62    
    Restructuring costs     8       17    
    Transaction and transformation     74       113    
    Adjusted operating income and Adjusted operating income margin   $ 414   18.1 % $ 351   16.2 %
        Nine Months Ended September 30,    
        2024     2023    
                   
    (Loss)/Income from operations and Operating margin   $ (274 ) (4.0 )% $ 586   8.9 %
    Adjusted for certain items:              
    Impairment     1,042       —    
    Amortization     176       203    
    Restructuring costs     29       30    
    Transaction and transformation     296       265    
    Provision for specified litigation matter(i)     13       —    
    Adjusted operating income and Adjusted operating income margin   $ 1,282   18.6 % $ 1,084   16.5 %

     (i) Represents a provision related to potential litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.

    RECONCILIATIONS OF GAAP INCOME TAXES/TAX RATE TO ADJUSTED INCOME TAXES/TAX RATE

        Three Months Ended September 30,  
        2024     2023  
                 
    (Loss)/income from operations before income taxes   $ (1,994 )   $ 164  
                 
    Adjusted for certain items:            
    Impairment     1,042       —  
    Amortization     56       62  
    Restructuring costs     8       17  
    Transaction and transformation     74       113  
    Loss/(gain) on disposal of operations     1,190       (41 )
    Adjusted income before taxes   $ 376     $ 315  
                 
    (Benefit from)/provision for income taxes   $ (322 )   $ 25  
    Tax effect on certain items listed above(ii)     396       51  
    Adjusted income taxes   $ 74     $ 76  
                 
    U.S. GAAP tax rate     16.1 %     15.5 %
    Adjusted income tax rate     19.7 %     24.3 %
        Nine Months Ended September 30,
        2024   2023
                 
    (Loss)/income from operations before income taxes   $ (1,584 )   $ 540  
                 
    Adjusted for certain items:            
    Impairment     1,042       —  
    Amortization     176       203  
    Restructuring costs     29       30  
    Transaction and transformation     296       265  
    Provision for specified litigation matter(i)     13       —  
    Loss/(gain) on disposal of operations     1,190       (44 )
    Adjusted income before taxes   $ 1,162     $ 994  
                 
    (Benefit from)/provision for income taxes   $ (248 )   $ 99  
    Tax effect on certain items listed above(ii)     492       128  
    Tax effect of significant adjustments     7       (2 )
    Adjusted income taxes   $ 251     $ 225  
                 
    U.S. GAAP tax rate     15.6 %     18.3 %
    Adjusted income tax rate     21.6 %     22.6 %

    (i) Represents a provision related to potential litigation arising out of a structured insurance program originally placed for a client over 15 years ago. The program is of a type and complexity that was highly bespoke to the client and for that reason is unlikely to be exactly replicated elsewhere. Because of this, while we do not believe the potential litigation is material, we believe excluding this matter from adjusted results makes results more comparable from period to period and more representative of our core business operations.
    (ii) The tax effect was calculated using an effective tax rate for each item.

    RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES TO FREE CASH FLOW

        Nine Months Ended September 30,  
        2024   2023
                 
    Cash flows from operating activities   $ 913     $ 823  
    Less: Additions to fixed assets and software for internal use     (106 )     (116 )
    Free Cash Flow   $ 807     $ 707  
    WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
    Condensed Consolidated Statements of Income
    (In millions of U.S. dollars, except per share data)
    (Unaudited)
        Three Months Ended
     September 30,    		   Nine Months Ended
     September 30,
        2024   2023   2024   2023
    Revenue   $ 2,289     $ 2,166     $ 6,895     $ 6,569  
                             
    Costs of providing services                        
    Salaries and benefits     1,396       1,359       4,135       4,019  
    Other operating expenses     419       396       1,315       1,282  
    Impairment     1,042       —       1,042       —  
    Depreciation     60       60       176       184  
    Amortization     56       62       176       203  
    Restructuring costs     8       17       29       30  
    Transaction and transformation     74       113       296       265  
    Total costs of providing services     3,055       2,007       7,169       5,983  
                             
    (Loss)/income from operations     (766 )     159       (274 )     586  
                             
    Interest expense     (65 )     (61 )     (197 )     (172 )
    Other (loss)/income, net     (1,163 )     66       (1,113 )     126  
                             
    (LOSS)/INCOME FROM OPERATIONS BEFORE INCOME TAXES   (1,994 )     164       (1,584 )     540  
                             
    Benefit from/(provision for) income taxes     322       (25 )     248       (99 )
                             
    NET (LOSS)/INCOME   (1,672 )     139       (1,336 )     441  
                             
    Income attributable to non-controlling interests     (3 )     (3 )     (8 )     (8 )
                             
    NET (LOSS)/INCOME ATTRIBUTABLE TO WTW   $ (1,675 )   $ 136     $ (1,344 )   $ 433  
                             
    (LOSS)/EARNINGS PER SHARE                        
    Basic (loss)/earnings per share   $ (16.44 )   $ 1.30     $ (13.11 )   $ 4.08  
    Diluted (loss)/earnings per share   $ (16.44 )   $ 1.29     $ (13.11 )   $ 4.06  
                             
    Weighted-average ordinary shares, basic     102       105       103       106  
    Weighted-average ordinary shares, diluted     102       105       103       107  
    WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
    Condensed Consolidated Balance Sheets
    (In millions of U.S. dollars, except share data)
    (Unaudited)
        September 30,     December 31,  
        2024     2023  
    ASSETS            
    Cash and cash equivalents   $ 1,372     $ 1,424  
    Fiduciary assets     9,176       9,073  
    Accounts receivable, net     2,118       2,572  
    Prepaid and other current assets     558       364  
    Current assets held for sale     1,089       —  
    Total current assets     14,313       13,433  
    Fixed assets, net     710       720  
    Goodwill     8,882       10,195  
    Other intangible assets, net     1,360       2,016  
    Right-of-use assets     539       565  
    Pension benefits assets     632       588  
    Other non-current assets     732       1,573  
    Total non-current assets     12,855       15,657  
    TOTAL ASSETS   $ 27,168     $ 29,090  
    LIABILITIES AND EQUITY            
    Fiduciary liabilities   $ 9,176     $ 9,073  
    Deferred revenue and accrued expenses     2,027       2,104  
    Current debt     —       650  
    Current lease liabilities     122       125  
    Other current liabilities     735       678  
    Current liabilities held for sale     475       —  
    Total current liabilities     12,535       12,630  
    Long-term debt     5,308       4,567  
    Liability for pension benefits     487       563  
    Deferred tax liabilities     94       542  
    Provision for liabilities     416       365  
    Long-term lease liabilities     556       592  
    Other non-current liabilities     202       238  
    Total non-current liabilities     7,063       6,867  
    TOTAL LIABILITIES     19,598       19,497  
    COMMITMENTS AND CONTINGENCIES            
    EQUITY(i)            
    Additional paid-in capital     10,957       10,910  
    (Accumulated deficit)/retained earnings     (650 )     1,466  
    Accumulated other comprehensive loss, net of tax     (2,810 )     (2,856 )
    Treasury shares, at cost, 15,574 shares in 2024     (5 )     —  
    Total WTW shareholders’ equity     7,492       9,520  
    Non-controlling interests     78       73  
    Total Equity     7,570       9,593  
    TOTAL LIABILITIES AND EQUITY   $ 27,168     $ 29,090  

     (i)  Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 100,887,015 (2024) and 102,538,072 (2023); Outstanding 100,871,441 (2024) and 102,538,072 (2023) and (b) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2024 and 2023.

    WILLIS TOWERS WATSON PUBLIC LIMITED COMPANY
    Condensed Consolidated Statements of Cash Flows
    (In millions of U.S. dollars)
    (Unaudited)
        Nine Months Ended September 30,  
        2024     2023  
    CASH FLOWS FROM OPERATING ACTIVITIES            
    NET (LOSS)/INCOME   $ (1,336 )   $ 441  
    Adjustments to reconcile net income to total net cash from operating activities:            
    Depreciation     176       184  
    Amortization     176       203  
    Impairment     1,042       —  
    Non-cash restructuring charges     17       19  
    Non-cash lease expense     76       83  
    Net periodic benefit of defined benefit pension plans     (15 )     (20 )
    Provision for doubtful receivables from clients     13       8  
    Benefit from deferred income taxes     (379 )     (58 )
    Share-based compensation     85       87  
    Net loss/(gain) on disposal of operations     1,190       (44 )
    Non-cash foreign exchange (gain)/loss     (25 )     1  
    Other, net     32       21  
    Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:            
    Accounts receivable     271       261  
    Other assets     (299 )     (175 )
    Other liabilities     (159 )     (191 )
    Provisions     48       3  
    Net cash from operating activities     913       823  
                 
    CASH FLOWS USED IN INVESTING ACTIVITIES            
    Additions to fixed assets and software for internal use     (106 )     (116 )
    Capitalized software costs     (83 )     (66 )
    Acquisitions of operations, net of cash acquired     (28 )     (6 )
    Proceeds from sale of operations     —       86  
    Cash and fiduciary funds transferred in sale of operations     —       (922 )
    Purchase of investments     (13 )     (6 )
    Net cash used in investing activities     (230 )     (1,030 )
                 
    CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES            
    Senior notes issued     746       748  
    Debt issuance costs     (9 )     (7 )
    Repayments of debt     (653 )     (253 )
    Repurchase of shares     (506 )     (804 )
    Net proceeds/(payments) from fiduciary funds held for clients     934       (71 )
    Payments of deferred and contingent consideration related to acquisitions     (2 )     (8 )
    Cash paid for employee taxes on withholding shares     (30 )     (21 )
    Dividends paid     (265 )     (265 )
    Acquisitions of and dividends paid to non-controlling interests     (10 )     (47 )
    Net cash from/(used in) financing activities     205       (728 )
                 
    INCREASE/(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED
       CASH    		     888       (935 )
    Effect of exchange rate changes on cash, cash equivalents and restricted cash     32       (54 )
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF
       PERIOD (i)    		     3,792       4,721  
    CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD (i)   $ 4,712     $ 3,732  

    (i)  The amounts of cash, cash equivalents and restricted cash, their respective classification on the condensed consolidated balance sheets, as well as their respective portions of the increase or decrease in cash, cash equivalents and restricted cash for each of the periods presented have been included in the Supplemental Disclosures of Cash Flow Information section.

    SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

        Nine Months Ended September 30,  
        2024     2023  
                 
    Supplemental disclosures of cash flow information:            
    Cash and cash equivalents   $ 1,372     $ 1,247  
    Fiduciary funds (included in fiduciary assets)     3,340       2,485  
    Total cash, cash equivalents and restricted cash   $ 4,712     $ 3,732  
                 
    (Decrease)/increase in cash, cash equivalents and other restricted cash   $ (54 )   $ 5  
    Increase/(decrease) in fiduciary funds     942       (940 )
    Total (i)   $ 888     $ (935 )

    (i) Does not include the effect of exchange rate changes on cash, cash equivalents and restricted cash.

    The MIL Network –

  • MIL-OSI: Cipher Mining Provides Third Quarter 2024 Business Update

    Source: GlobeNewswire (MIL-OSI)

    Completed acquisition of Barber Lake data center site, which includes 250 acres of land in West Texas, a newly constructed high-to-mid voltage substation, approvals for 300 MW, and agreements necessary to participate in the ERCOT market

    Completed acquisition of Reveille data center site, which includes approvals for 70 MW and potential to expand to 200 MW, with energization targeted for 2027

    Signed option agreements to purchase or lease three sites in Texas with targeted power capacity of 500 MW each, suitable for HPC or bitcoin mining

    Third Quarter 2024 Net Loss of $87m, and Adjusted Loss of $3m

    NEW YORK, Oct. 31, 2024 (GLOBE NEWSWIRE) — Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”) today announced results for its third quarter ended September 30, 2024, with an update on its operations and business strategy.

    “We had a very busy third quarter, especially on the corporate and business development side,” said Tyler Page, CEO. “We were delighted to close our acquisition of the Barber Lake site, which has 300 MW immediately available for energization, and more recently, we also closed on our acquisition of the Reveille site, which is approved for 70 MW and has potential to scale to 200 MW. Looking to the future, we also created a pathway to become one of the largest data center developers in the world by finalizing the purchase of options to acquire three new sites with a total cumulative power capacity of up to 1.5 GW. Cipher’s active portfolio and options for development now total 2.5 GW across 10 sites.”

    “We have made great progress in our discussions with hyperscalers in recent weeks as we seek our first HPC tenants while also continuing to build-out our bitcoin operations with the upgrade of our miner fleet at Odessa. Our operations and construction teams have extensive experience building tier 3 data centers, and we look forward to leveraging their broad skill sets as we expand our scope to bring on our first HPC tenants in the future.”

    “Despite the headwind of record low hashprices for the bitcoin mining industry in the third quarter, our team delivered another set of solid results. The value of our Odessa power purchase agreement took a significant markdown given the passage of time and the drop in forward market prices for electricity, which contributed to the headline net loss this quarter. On an adjusted basis, our adjusted loss was nearly flat quarter-over-quarter, which we see as a testament to our low-cost unit economics given the known challenges presented to the entire industry in the first full quarter after the bitcoin halving. With our fleet upgrade at Odessa in the fourth quarter, we will be powering an extremely efficient fleet of rigs with industry-low costs for electricity, so we should be well-positioned for brighter bitcoin mining conditions going forward,” said Mr. Page.

    Finance and Operations Highlights

    • Completed acquisition of 300 MW Barber Lake data center site
    • Completed acquisition of 70 MW Reveille data center site, which may be expanded to 200 MW and is well-suited for both HPC or bitcoin mining data centers
    • Signed options to acquire up to 1.5 GW of new sites in Texas that are also suitable for both HPC or bitcoin mining data centers
    • Upgrade of Odessa site bringing total self-mining hashrate to ~13.5 EH/s remains on track for Q4 2024
    • Construction of the 300 MW data center at Black Pearl progressing well, with expected energization in Q2 2025
    • Q3 2024 net loss of $87 million, or $0.26 per diluted share, and adjusted loss of $3 million, or $0.01 per diluted share

    Business Update Call and Webcast

    The live webcast and a webcast replay of the conference call can be accessed from the investor relations section of Cipher’s website at https://investors.ciphermining.com. To access this conference call by telephone, register here to receive dial-in numbers and a unique PIN to join the call.

    About Cipher

    Cipher is focused on the development and operation of industrial-scale data centers for bitcoin mining and HPC hosting. Cipher aims to be a market leader in innovation, including in bitcoin mining growth, data center construction and as a hosting partner to the world’s largest HPC companies. To learn more about Cipher, please visit https://www.ciphermining.com/.

    Forward Looking Statements

    This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends 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 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, such as, statements about our beliefs and expectations regarding our future results of operations and financial position, planned business model and strategy, timing and likelihood of success, capacity, functionality and timing of operation of data centers, expectations regarding the operations of data centers, potential strategic initiatives, such as joint ventures and partnerships, and management plans and objectives, are forward-looking statements and should be evaluated as such. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).

    These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, Cipher’s evolving business model and strategy and efforts we may make to modify aspects of our business model or engage in various strategic initiatives, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”), as any such factors may be updated from time to time in the Company’s other filings with the SEC, including without limitation, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

    Non-GAAP Financial Measures

    This press release includes supplemental financial measures, including Adjusted Earnings (Loss) and Adjusted Earnings (Loss) per share – diluted, in each case , which exclude the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses and (vi) the non-cash change in fair value of warrant liability. These supplemental financial measures are not a measurement of financial performance under accounting principles generally accepted in the United Stated (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate our business performance and to help make operating decisions. We believe the use of these non-GAAP financial measures can also facilitate comparison of our operating results to those of our competitors.

    Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that share-based compensation expense, which is excluded from the non-GAAP financial measures, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers and directors. Similarly, we expect that depreciation and amortization will continue to be an expense over the term of the useful life of the related assets. Our non-GAAP financial measures are not meant to be considered in isolation and should be read only in conjunction with our financial statements prepared in accordance with GAAP. We rely primarily on such financial statements to understand, manage and evaluate our business performance and use the non-GAAP financial measures only supplementally.

    Contacts:
    Investor Contact:
    Josh Kane
    Head of Investor Relations at Cipher Mining
    josh.kane@ciphermining.com

    Media Contact:
    Ryan Dicovitsky / Kendal Till
    Dukas Linden Public Relations
    CipherMining@DLPR.com

     
    CIPHER MINING INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands, except for share and per share amounts)
    (unaudited)
     
      September 30,
    2024    		   December 31,
    2023
    ASSETS      
    Current assets      
    Cash and cash equivalents $ 25,342     $ 86,105  
    Accounts receivable   226       622  
    Receivables, related party   59       245  
    Prepaid expenses and other current assets   3,488       3,670  
    Bitcoin   95,459       32,978  
    Derivative asset   27,185       31,878  
    Total current assets   151,759       155,498  
    Restricted cash   14,392       –  
    Property and equipment, net   310,699       243,815  
    Deposits on equipment   144,573       30,812  
    Intangible assets, net   25,742       8,109  
    Investment in equity investees   54,973       35,258  
    Derivative asset   47,225       61,713  
    Operating lease right-of-use asset   10,564       7,077  
    Security deposits   15,301       23,855  
    Other noncurrent assets   210       –  
    Total assets $ 775,438     $ 566,137  
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities      
    Accounts payable $ 13,154     $ 4,980  
    Accounts payable, related party   –       1,554  
    Accrued expenses and other current liabilities   40,764       22,439  
    Finance lease liability, current portion   3,695       3,404  
    Operating lease liability, current portion   1,479       1,166  
    Warrant liability   –       250  
    Total current liabilities   59,092       33,793  
    Asset retirement obligation   19,810       18,394  
    Finance lease liability   8,319       11,128  
    Operating lease liability   9,662       6,280  
    Deferred tax liability   6,564       5,206  
    Total liabilities   103,447       74,801  
    Commitments and contingencies (Note 13)      
    Stockholders’ equity      
    Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding as of September 30, 2024, and December 31, 2023   –       –  
    Common stock, $0.001 par value, 500,000,000 shares authorized, 355,771,238 and 296,276,536 shares issued as of September 30, 2024 and December 31, 2023, respectively, and 347,800,186 and 290,957,862 shares outstanding as of September 30, 2024, and December 31, 2023, respectively   356       296  
    Additional paid-in capital   870,565       627,822  
    Accumulated deficit   (198,922 )     (136,777 )
    Treasury stock, at par, 7,971,052 and 5,318,674 shares at September 30, 2024 and December 31, 2023, respectively   (8 )     (5 )
    Total stockholders’ equity   671,991       491,336  
    Total liabilities and stockholders’ equity $ 775,438     $ 566,137  
     
    CIPHER MINING INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except for share and per share amounts)
    (unaudited)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
        2024       2023       2024       2023  
    Revenue – bitcoin mining $ 24,102     $ 30,304     $ 109,047     $ 83,423  
    Costs and operating expenses (income)              
    Cost of revenue   15,063       13,008       44,164       37,017  
    Compensation and benefits   14,738       17,071       44,058       41,676  
    General and administrative   8,919       6,827       23,362       20,977  
    Depreciation and amortization   28,636       16,217       66,131       42,284  
    Change in fair value of derivative asset   48,520       (4,744 )     19,181       (13,294 )
    Power sales   (1,444 )     (2,720 )     (3,726 )     (8,469 )
    Equity in (income) losses of equity investees   (847 )     1,998       (1,008 )     4,179  
    Losses (gains) on fair value of bitcoin   1,911       1,848       (22,336 )     (3,276 )
    Other gains   –       (95 )     –       (2,355 )
    Total costs and operating expenses   115,496       49,410       169,826       118,739  
    Operating loss   (91,394 )     (19,106 )     (60,779 )     (35,316 )
    Other income (expense)              
    Interest income   1,188       11       3,027       112  
    Interest expense   (346 )     (627 )     (1,118 )     (1,513 )
    Change in fair value of warrant liability   –       10       250       (49 )
    Other expense   (4 )     (6 )     (1,235 )     (18 )
    Total other income (expense)   838       (612 )     924       (1,468 )
    Loss before taxes   (90,556 )     (19,718 )     (59,855 )     (36,784 )
    Current income tax expense   (211 )     (95 )     (932 )     (143 )
    Deferred income tax benefit (expense)   4,013       1,192       (1,358 )     555  
    Total income tax benefit (expense)   3,802       1,097       (2,290 )     412  
    Net loss $ (86,754 )   $ (18,621 )   $ (62,145 )   $ (36,372 )
    Loss per share – basic and diluted $ (0.26 )   $ (0.07 )   $ (0.20 )   $ (0.15 )
    Weighted average shares outstanding – basic   332,680,037       251,789,350       314,820,110       249,858,033  
    Weighted average shares outstanding – diluted   332,680,037       251,789,350       314,820,110       249,858,033  
     
    CIPHER MINING INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (unaudited)
     
      Nine Months Ended September 30,
        2024       2023  
    Cash flows from operating activities      
    Net loss $ (62,145 )   $ (36,372 )
    Adjustments to reconcile net loss to net cash used in operating activities:      
    Depreciation   65,661       42,284  
    Amortization of intangible assets   470       –  
    Amortization of operating right-of-use asset   888       688  
    Share-based compensation   31,865       28,687  
    Equity in losses (gains) of equity investees   (1,008 )     4,179  
    Non-cash lease expense   429       1,477  
    Other   (1,235 )     –  
    Deferred income taxes   1,358       (555 )
    Bitcoin received as payment for services   (109,443 )     (83,161 )
    Change in fair value of derivative asset   19,181       (13,294 )
    Change in fair value of warrant liability   (250 )     49  
    Gains on fair value of bitcoin   (22,336 )     (3,276 )
    Changes in assets and liabilities:      
    Accounts receivable   396       (262 )
    Receivables, related party   186       (958 )
    Prepaid expenses and other current assets   182       3,238  
    Security deposits   16,851       144  
    Other non-current assets   (210 )     –  
    Accounts payable   565       2,366  
    Accounts payable, related party   –       (1,529 )
    Accrued expenses and other current liabilities   62       10,732  
    Lease liabilities   –       (762 )
    Net cash used in operating activities   (58,533 )     (46,325 )
    Cash flows from investing activities      
    Proceeds from sale of bitcoin   79,786       78,729  
    Deposits on equipment   (135,263 )     (4,533 )
    Purchases of property and equipment   (92,373 )     (32,980 )
    Purchases and development of software   (1,059 )     –  
    Purchase of strategic contracts   (17,044 )     –  
    Capital distributions from equity investees   –       3,807  
    Investment in equity investees   (29,194 )     (3,545 )
    Prepayments on financing lease   –       (3,676 )
    Net cash (used in) provided by investing activities   (195,147 )     37,802  
    Cash flows from financing activities      
    Proceeds from the issuance of common stock   225,181       11,644  
    Offering costs paid for the issuance of common stock   (3,487 )     (298 )
    Repurchase of common shares to pay employee withholding taxes   (10,760 )     (3,224 )
    Principal payments on financing lease   (3,625 )     (8,184 )
    Net cash provided by (used in) financing activities   207,309       (62 )
    Net decrease in cash, cash equivalents, and restricted cash   (46,371 )     (8,585 )
    Cash, cash equivalents, and restricted cash, beginning of the period   86,105       11,927  
    Cash and cash equivalents, and restricted cash, end of the period $ 39,734     $ 3,342  
      Nine Months Ended September 30,
        2024       2023  
    Supplemental disclosure of noncash investing and financing activities        
    Reclassification of deposits on equipment to property and equipment $ 21,502     $ 74,186  
    Property and equipment purchases in accounts payable and accrued expenses $ 17,422     $ –  
    Bitcoin received from equity investees $ 10,487     $ 317  
    Settlement of related party payable related to master services and supply agreement $ 1,554     $ –  
    Right-of-use asset obtained in exchange for finance lease liability $ 4,375     $ 14,212  
    Sales tax accrual on machine purchases $ 1,388     $ 1,837  
    Equity method investment acquired for non-cash consideration $ –     $ 1,926  
    Finance lease cost in accrued expenses $ –     $ 2,060  
                   

    The following table provides a reconciliation of Cash and cash equivalents together with Restricted cash as reported within the Condensed Consolidated Balance Sheets to the sum of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows.

       
      Nine Months Ended September 30,
        2024       2023  
    Cash and cash equivalents $ 25,342     $ 3,342  
    Restricted cash $ 14,392     $ –  
    Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 39,734     $ 3,342  
                   

    Non-GAAP Financial Measures

    The following are reconciliations of our Adjusted Earnings (Loss) and Adjusted Earnings (Loss) per share – diluted, in each case excluding the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses and (vi) the non-cash change in fair value of warrant liability, to the most directly comparable GAAP measures for the periods indicated (in thousands, except for per share amounts):

           
      Three Months Ended September 30,   Nine Months Ended September 30,
        2024       2023       2024       2023  
    Reconciliation of Adjusted Earnings:              
    Net loss $ (86,754 )   $ (18,621 )   $ (62,145 )   $ (36,372 )
    Change in fair value of derivative asset   48,520       (4,744 )     19,181       (13,294 )
    Share-based compensation expense   10,211       10,699       31,865       17,988  
    Depreciation and amortization   28,636       16,217       66,131       42,284  
    Deferred income tax expense   (4,013 )     (1,192 )     1,358       (555 )
    Other gains – nonrecurring   –       (95 )     –       (2,355 )
    Change in fair value of warrant liability   –       (10 )     (250 )     49  
    Adjusted (loss) earnings $ (3,400 )   $ 2,254     $ 56,140     $ 7,745  
                   
                   
    Reconciliation of Adjusted Earnings per share – diluted:              
    Net loss per share – diluted $ (0.26 )   $ (0.07 )   $ (0.20 )   $ (0.15 )
    Change in fair value of derivative asset per diluted share   0.14       (0.02 )     0.07       (0.05 )
    Share-based compensation expense per diluted share   0.03       0.04       0.10       0.07  
    Depreciation and amortization per diluted share   0.09       0.06       0.21       0.17  
    Deferred income tax expense per diluted share   (0.01 )     —       —       —  
    Other gains – nonrecurring per diluted share   —       —       —       (0.01 )
    Change in fair value of warrant liability per diluted share   —       —       —       —  
    Adjusted (loss) earnings per diluted share $ (0.01 )   $ 0.01     $ 0.18     $ 0.03  

    The MIL Network –

  • MIL-OSI: Allegro MicroSystems Reports Second Quarter 2025 Results

    Source: GlobeNewswire (MIL-OSI)

    MANCHESTER, N.H., Oct. 31, 2024 (GLOBE NEWSWIRE) — Allegro MicroSystems, Inc. (“Allegro” or the “Company”) (Nasdaq: ALGM), a global leader in power and sensing semiconductor solutions for motion control and energy efficient systems, today announced financial results for its second quarter ended September 27, 2024.

    “We delivered results in-line with our commitments. Second quarter sales were $187 million, with sequential growth in both Automotive and Industrial and Other end markets. Non-GAAP EPS was $0.08, at the high end of our outlook,” said Vineet Nargolwala, President and CEO of Allegro. “We are encouraged by the continued demand for our differentiated solutions and the progress made by our customers and partners to rebalance their inventories. We continue to invest for growth to extend our market leadership. The accelerating pace of our new product introductions, as evidenced by our latest product releases, sets the stage for significant growth momentum in the near future.”

    Second Quarter Financial Highlights:

    In thousands, except per share data   Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
    Net Sales                              
    Automotive   $ 141,893     $ 131,184     $ 197,321     $ 273,077     $ 382,751  
    Industrial and other     45,498       35,735       78,188       81,233       171,051  
    Total net sales   $ 187,391     $ 166,919     $ 275,509     $ 354,310     $ 553,802  
    GAAP Financial Measures                              
    Gross margin %     45.7 %     44.8 %     57.9 %     45.3 %     57.3 %
    Operating margin %     2.2 %     (6.4 )%     26.5 %     (1.9 )%     25.9 %
    Diluted EPS   $ (0.18 )   $ (0.09 )   $ 0.34     $ (0.27 )   $ 0.65  
    Non-GAAP Financial Measures                              
    Gross margin %     48.8 %     48.8 %     58.3 %     48.8 %     58.1 %
    Operating margin %     11.7 %     6.0 %     31.3 %     9.0 %     31.0 %
    Diluted EPS   $ 0.08     $ 0.03     $ 0.40     $ 0.11     $ 0.79  

    Business Outlook

    For the third quarter of fiscal year 2025 ending December 27, 2024, the Company expects net sales to be in the range of $170 million to $180 million. This outlook comprehends continued progress toward vehicle electrification and ongoing inventory rebalancing as reflected in the latest third-party estimates, as well as typical December quarter seasonality. The Company also estimates the following results on a non-GAAP basis:

    • Gross Margin is expected to be between 49% and 51%,
    • The Company made a voluntary $25 million payment on its term loan facility on October 31, 2024 and now expects Interest Expense to be approximately $6 million, and
    • Diluted Earnings per Share are expected to be between $0.04 and $0.08.

    Allegro has not provided a reconciliation of its third fiscal quarter outlook for non-GAAP Gross Margin, non-GAAP Interest Expense, and non-GAAP Diluted Earnings per Share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate between such forward-looking non-GAAP measures and the comparable forward-looking U.S. generally accepted accounting principles (“GAAP”) measures. Certain factors that are materially significant to Allegro’s ability to estimate these items are out of its control and/or cannot be reasonably predicted.

    Earnings Webcast

    A webcast will be held on Thursday, October 31, 2024 at 8:30 a.m., Eastern Time. Vineet Nargolwala, President and Chief Executive Officer, and Derek P. D’Antilio, Executive Vice President and Chief Financial Officer, will discuss Allegro’s business and financial results.

    The webcast will be available on the Investor Relations section of the Company’s website at investors.allegromicro.com. A recording of the webcast will be posted in the same location shortly after the call concludes and will be available for at least 90 days.

    About Allegro MicroSystems

    Allegro MicroSystems is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits (“ICs”) and application-specific analog power ICs enabling emerging technologies in the automotive and industrial markets. Allegro’s diverse product portfolio provides efficient and reliable solutions for the electrification of vehicles, automotive ADAS safety features, automation for Industry 4.0 and power saving technologies for data centers and clean energy applications.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release including statements regarding our future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors affecting our business are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

    Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “would,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance or achievements, and one should avoid placing undue reliance on such statements.

    Forward-looking statements are based on our management’s current expectations, beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended March 29, 2024, as any such factors may be updated from time to time in our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission (the “SEC”). These risks and uncertainties include, but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions or customer demand; shifts in our product mix, customer mix or channel mix, which could negatively impact our gross margin; the cyclical nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business; our ability to compensate for decreases in average selling prices of our products and increases in input costs; our ability to manage any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products; our ability to accurately predict our quarterly net sales and operating results and meet the expectations of investors; our dependence on manufacturing operations in the Philippines; our reliance on distributors to generate sales; events beyond our control impacting us, our key suppliers or our manufacturing partners; our ability to develop new product features or new products in a timely and cost-effective manner; our ability to manage growth; any slowdown in the growth of our end markets; the loss of one or more significant customers; our ability to meet customers’ quality requirements; uncertainties related to the design win process and our ability to recover design and development expenses and to generate timely or sufficient net sales or margins; changes in government trade policies, including the imposition of export restrictions and tariffs; our exposures to warranty claims, product liability claims and product recalls; our dependence on international customers and operations; the availability of rebates, tax credits and other financial incentives on end-user demands for certain products; risks, liabilities, costs and obligations related to governmental regulations and other legal obligations, including export/trade control, privacy, data protection, information security, cybersecurity, consumer protection, environmental and occupational health and safety, antitrust, anti-corruption and anti-bribery, product safety, environmental protection, employment matters and tax; the volatility of currency exchange rates; our ability to raise capital to support our growth strategy; our indebtedness may limit our flexibility to operate our business; our ability to effectively manage our growth and to retain key and highly skilled personnel; our ability to protect our proprietary technology and inventions through patents or trade secrets; our ability to commercialize our products without infringing third-party intellectual property rights; disruptions or breaches of our information technology systems or confidential information or those of our third-party service providers; our principal stockholders has substantial control over us; anti-takeover provisions in our organizational documents and under the General Corporation Law of the State of Delaware; any failure to design, implement or maintain effective internal control over financial reporting; changes in tax rates or the adoption of new tax legislation; the negative impacts of sustained inflation on our business; the physical, transition and litigation risks presented by climate change; and other events beyond our control. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

    You should read this press release and the documents that we reference completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. All forward-looking statements speak only as of the date of this press release, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise.

    This press release includes certain non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to measures of, financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the presented non-GAAP financial measures as tools for comparison.

    This press release may not be reproduced, forwarded to any person or published, in whole or in part.

       
    ALLEGRO MICROSYSTEMS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (in thousands, except share and per share amounts)
    (Unaudited)    		  
       
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
    Net sales   $ 187,391     $ 275,509     $ 354,310     $ 553,802  
    Cost of goods sold     101,729       116,006       193,877       236,349  
    Gross profit     85,662       159,503       160,433       317,453  
    Operating expenses:                        
    Research and development     43,510       43,428       88,714       86,403  
    Selling, general and administrative     38,085       43,160       78,282       87,389  
    Total operating expenses     81,595       86,588       166,996       173,792  
    Operating income (loss)     4,067       72,915       (6,563 )     143,661  
    Interest and other (expense) income     (12,398 )     156       (18,341 )     (2,486 )
    Loss on change in fair value of forward repurchase contract     (34,752 )     —       (34,752 )     —  
    (Loss) income before income taxes     (43,083 )     73,071       (59,656 )     141,175  
    Income tax (benefit) provision     (9,470 )     7,400       (8,430 )     14,615  
    Net (loss) income     (33,613 )     65,671       (51,226 )     126,560  
    Net income attributable to non-controlling interests     62       54       124       93  
    Net (loss) income attributable to Allegro MicroSystems, Inc.   $ (33,675 )   $ 65,617     $ (51,350 )   $ 126,467  
    Net (loss) income per common share attributable to Allegro MicroSystems, Inc.:                        
    Basic   $ (0.18 )   $ 0.34     $ (0.27 )   $ 0.66  
    Diluted   $ (0.18 )   $ 0.34     $ (0.27 )   $ 0.65  
    Weighted average shares outstanding:                        
    Basic     189,182,850       192,431,094       191,324,281       192,214,210  
    Diluted     189,182,850       195,100,855       191,324,281       195,055,495  
                                     

    Supplemental Schedule of Total Net Sales

    The following table summarizes total net sales by market within the Company’s unaudited condensed consolidated statements of operations:

        Three-Month Period Ended     Change     Six-Month Period Ended     Change  
        September 27,
    2024    		     September 29,
    2023    		     Amount     %     September 27,
    2024    		     September 29,
    2023    		     Amount     %  
        (Dollars in thousands)     (Dollars in thousands)  
    Automotive   $ 141,893     $ 197,321     $ (55,428 )     (28 )%   $ 273,077     $ 382,751     $ (109,674 )     (29 )%
    Industrial and other     45,498       78,188       (32,690 )     (42 )%     81,233       171,051       (89,818 )     (53 )%
    Total net sales   $ 187,391     $ 275,509     $ (88,118 )     (32 )%   $ 354,310     $ 553,802     $ (199,492 )     (36 )%
     
    ALLEGRO MICROSYSTEMS, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands)
     
        September 27,
    2024    		     March 29,
    2024    		  
        (Unaudited)        
    Assets            
    Current assets:            
    Cash and cash equivalents   $ 188,751     $ 212,143  
    Restricted cash     10,287       10,018  
    Trade accounts receivable, net     76,985       118,508  
    Inventories     176,648       162,302  
    Prepaid income taxes     38,636       31,908  
    Prepaid expenses and other current assets     32,253       33,584  
    Current portion of related party notes receivable     —       3,750  
    Total current assets     523,560       572,213  
    Property, plant and equipment, net     325,051       321,175  
    Deferred income tax assets     61,839       54,496  
    Goodwill     203,151       202,425  
    Intangible assets, net     266,753       276,854  
    Related party notes receivable, less current portion     —       4,688  
    Equity investment in related party     30,186       26,727  
    Other assets     81,577       72,025  
    Total assets   $ 1,492,117     $ 1,530,603  
    Liabilities, Non-Controlling Interests and Stockholders’ Equity            
    Current liabilities:            
    Trade accounts payable   $ 50,245     $ 35,964  
    Amounts due to related party     5,546       1,626  
    Accrued expenses and other current liabilities     62,742       76,389  
    Current portion of long-term debt     5,475       3,929  
    Total current liabilities     124,008       117,908  
    Long-term debt     396,056       249,611  
    Other long-term liabilities     33,345       31,368  
    Total liabilities     553,409       398,887  
    Commitments and contingencies            
    Stockholders’ Equity:            
    Preferred stock     —       —  
    Common stock     1,840       1,932  
    Additional paid-in capital     993,988       694,332  
    (Accumulated deficit) retained earnings     (31,931 )     463,012  
    Accumulated other comprehensive loss     (26,583 )     (28,841 )
    Equity attributable to Allegro MicroSystems, Inc.     937,314       1,130,435  
    Non-controlling interests     1,394       1,281  
    Total stockholders’ equity     938,708       1,131,716  
    Total liabilities, non-controlling interests and stockholders’ equity   $ 1,492,117     $ 1,530,603  
       
    ALLEGRO MICROSYSTEMS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (Unaudited)    		  
       
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
    Cash flows from operating activities:                        
    Net (loss) income   $ (33,613 )   $ 65,671     $ (51,226 )   $ 126,560  
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:                        
    Depreciation and amortization     15,997       15,080       32,455       29,353  
    Amortization of deferred financing costs     306       73       1,087       107  
    Deferred income taxes     (2,796 )     (9,772 )     (7,795 )     (18,134 )
    Stock-based compensation     11,545       10,877       21,663       21,919  
    Loss on change in fair value of forward repurchase contract     34,752       —       34,752       —  
    Provisions for inventory and expected credit losses     2,111       4,239       4,488       9,422  
    Change in fair value of marketable securities     —       (72 )     —       3,579  
    Other non-cash reconciling items     6,563       43       6,577       43  
    Changes in operating assets and liabilities:                        
    Trade accounts receivable     (13,717 )     2,676       41,417       (7,645 )
    Inventories     (2,845 )     (3,274 )     (18,831 )     (31,221 )
    Prepaid expenses and other assets     (14,093 )     (6,253 )     (15,808 )     (16,453 )
    Trade accounts payable     13,470       (15,736 )     13,670       2,695  
    Due to and from related parties     695       (3,990 )     4,132       6,112  
    Accrued expenses and other current and long-term liabilities     (2,828 )     (12,832 )     (16,838 )     (29,944 )
    Net cash provided by operating activities     15,547       46,730       49,743       96,393  
    Cash flows from investing activities:                        
    Purchases of property, plant and equipment     (9,972 )     (31,191 )     (20,949 )     (76,101 )
    Sales of marketable securities     —       6,204       —       16,175  
    Net cash used in investing activities     (9,972 )     (24,987 )     (20,949 )     (59,926 )
    Cash flows from financing activities:                        
    Loan made to affiliate     —       (4,000 )     —       (4,000 )
    Net proceeds from Refinanced 2023 Term Loan Facility     193,483       —       193,483       —  
    Payment of borrowings under 2023 Term Loan Facility     —       —       (50,000 )     —  
    Finance lease payments     (240 )     —       (385 )     —  
    Receipts on related party notes receivable     937       937       1,875       1,875  
    Payments for taxes related to net share settlement of equity awards     (1,126 )     (1,669 )     (12,297 )     (14,091 )
    Proceeds from issuance of common stock under employee stock purchase plan     1,987       —       1,987       1,899  
    Repurchases of common stock     (853,805 )     —       (853,805 )     —  
    Net proceeds from issuance of common stock     665,850       —       665,850       —  
    Payment of debt issuance costs     —       —       —       (1,450 )
    Net cash provided by (used in) financing activities     7,086       (4,732 )     (53,292 )     (15,767 )
    Effect of exchange rate changes on cash and cash equivalents and restricted cash     2,200       (901 )     1,375       (974 )
    Net increase (decrease) in cash and cash equivalents and restricted cash     14,861       16,110       (23,123 )     19,726  
    Cash and cash equivalents and restricted cash at beginning of period     184,177       362,321       222,161       358,705  
    Cash and cash equivalents and restricted cash at end of period:   $ 199,038     $ 378,431     $ 199,038     $ 378,431  
                                     

    Non-GAAP Financial Measures

    In addition to the measures presented in our condensed consolidated financial statements, we regularly review other measures, defined as non-GAAP Financial Measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key measures we consider are non-GAAP Gross Profit, non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Operating Income, non-GAAP Operating Margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP Profit before Tax, non-GAAP Income Tax Provision, non-GAAP Effective Tax Rate, non-GAAP Net Income Attributable to Allegro MicroSystems, Inc, non-GAAP Basic and Diluted Earnings per Share, non-GAAP Free Cash Flow, and non-GAAP Free Cash Flow as percentage of net sales (collectively, the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core operations, and in the case of non-GAAP Income Tax Provision, management believes that this non-GAAP measure of income taxes provides it with the ability to evaluate the non-GAAP Income Tax Provision across different reporting periods on a consistent basis, independent of special items and discrete items, which may vary in size and frequency. These Non-GAAP Financial Measures are used by both management and our board of directors, together with the comparable GAAP information, in evaluating our current performance and planning our future business activities.

    The Non-GAAP Financial Measures are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. These Non-GAAP Financial Measures should not be considered as substitutes for GAAP Financial Measures, such as gross profit, gross margin, net income or any other performance measures derived in accordance with GAAP. Also, in the future we may incur expenses or charges, such as those being adjusted in the calculation of these Non-GAAP Financial Measures. Our presentation of these Non-GAAP Financial Measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. These Non-GAAP Financial Measures exclude costs related to acquisition and related integration expenses, amortization of acquired intangible assets, stock-based compensation, restructuring actions, related party activities and other non-operational costs.

    Non-GAAP Income Tax Provision

    In calculating non-GAAP Income Tax Provision, we have added back the following to GAAP Income Tax Provision:

    • Tax effect of adjustments to GAAP results—Represents the estimated income tax effect of the adjustments to non-GAAP Profit before Tax described below and elimination of discrete tax adjustments.
       
    Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Gross Profit   $ 85,662     $ 74,771     $ 159,503     $ 160,433     $ 317,453  
    GAAP Gross Margin (% of net sales)     45.7 %     44.8 %     57.9 %     45.3 %     57.3 %
                                   
    Non-GAAP adjustments                              
    Transaction-related costs     10       (1 )     —       9       —  
    Purchased intangible amortization     4,875       4,875       273       9,750       675  
    Restructuring costs     16       1,200       —       1,216       —  
    Stock-based compensation     817       561       946       1,378       3,552  
    Total Non-GAAP Adjustments   $ 5,718     $ 6,635     $ 1,219     $ 12,353     $ 4,227  
                                   
    Non-GAAP Gross Profit   $ 91,380     $ 81,406     $ 160,722     $ 172,786     $ 321,680  
    Non-GAAP Gross Margin (% of net sales)     48.8 %     48.8 %     58.3 %     48.8 %     58.1 %
       
    Reconciliation of Non-GAAP Operating Expenses  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Operating Expenses   $ 81,595     $ 85,401     $ 86,588     $ 166,996     $ 173,792  
                                   
    Research and Development Expenses                              
    GAAP Research and Development Expenses     43,510       45,204       43,428       88,714       86,403  
    Non-GAAP adjustments                              
    Transaction-related costs     206       1,029       2       1,235       9  
    Restructuring costs     260       169       —       429       —  
    Stock-based compensation     3,523       3,735       3,602       7,258       6,470  
    Other costs(1)     3       —       —       3       —  
    Non-GAAP Research and Development Expenses     39,518       40,271       39,824       79,789       79,924  
                                   
    Selling, General and Administrative Expenses                              
    GAAP Selling, General and Administrative Expenses     38,085       40,197       43,160       78,282       87,389  
    Non-GAAP adjustments                              
    Transaction-related costs     275       814       1,804       1,089       4,876  
    Purchased intangible amortization     535       535       357       1,070       715  
    Restructuring costs     2,046       1,045       —       3,091       —  
    Stock-based compensation     7,205       5,822       6,329       13,027       11,897  
    Other costs(1)     (1,820 )     811       100       (1,009 )     100  
    Non-GAAP Selling, General and Administrative Expenses     29,844       31,170       34,570       61,014       69,801  
                                   
    Total Non-GAAP Adjustments     12,233       13,960       12,194       26,193       24,067  
                                   
    Non-GAAP Operating Expenses   $ 69,362     $ 71,441     $ 74,394     $ 140,803     $ 149,725  
                                   
    (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions.  
       
    Reconciliation of Non-GAAP Operating Income and Non-GAAP Operating Margin  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Operating Income (Loss)   $ 4,067     $ (10,630 )   $ 72,915     $ (6,563 )   $ 143,661  
    GAAP Operating Margin (% of net sales)     2.2 %     (6.4 )%     26.5 %     (1.9 )%     25.9 %
                                   
    Transaction-related costs     491       1,842       1,806       2,333       4,885  
    Purchased intangible amortization     5,410       5,410       630       10,820       1,390  
    Restructuring costs     2,322       2,414       —       4,736       —  
    Stock-based compensation     11,545       10,118       10,877       21,663       21,919  
    Other costs(1)     (1,817 )     811       100       (1,006 )     100  
    Total Non-GAAP Adjustments   $ 17,951     $ 20,595     $ 13,413     $ 38,546     $ 28,294  
                                   
    Non-GAAP Operating Income   $ 22,018     $ 9,965     $ 86,328     $ 31,983     $ 171,955  
    Non-GAAP Operating Margin (% of net sales)     11.7 %     6.0 %     31.3 %     9.0 %     31.0 %
                                   
    (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions.  
       
    Reconciliation of EBITDA and Adjusted EBITDA  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Net (Loss) Income   $ (33,613 )   $ (17,613 )   $ 65,671     $ (51,226 )   $ 126,560  
    GAAP Net (Loss) Income Margin (% of net sales)     (17.9 )%     (10.6 )%     23.8 %     (14.5 )%     22.9 %
                                   
    Interest expense     10,353       5,377       758       15,730       1,527  
    Interest income     (420 )     (494 )     (850 )     (914 )     (1,693 )
    Income tax (benefit) provision     (9,470 )     1,040       7,400       (8,430 )     14,615  
    Depreciation & amortization     15,997       16,458       15,145       32,455       29,418  
    EBITDA   $ (17,153 )   $ 4,768     $ 88,124     $ (12,385 )   $ 170,427  
                                   
    Transaction-related costs     3,295       1,842       1,806       5,137       4,885  
    Restructuring costs     2,067       2,414       —       4,481       —  
    Stock-based compensation     11,545       10,118       10,877       21,663       21,919  
    Loss on change in fair value of forward repurchase contract     34,752       —       —       34,752       —  
    Other costs(1)     (2,195 )     2,807       1,301       612       5,890  
    Adjusted EBITDA   $ 32,311     $ 21,949     $ 102,108     $ 54,260     $ 203,121  
    Adjusted EBITDA Margin (% of net sales)     17.2 %     13.1 %     37.1 %     15.3 %     36.7 %
                                   
    (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions and income (loss) in earnings of equity investments.  
       
    Reconciliation of Non-GAAP Profit before Tax  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP (Loss) Income before Income Taxes   $ (43,083 )   $ (16,573 )   $ 73,071     $ (59,656 )   $ 141,175  
                                   
    Transaction-related costs     3,295       1,842       1,806       5,137       4,885  
    Transaction-related interest     141       709       —       850       —  
    Purchased intangible amortization     5,410       5,410       630       10,820       1,390  
    Restructuring costs     2,067       2,414       —       4,481       —  
    Stock-based compensation     11,545       10,118       10,877       21,663       21,919  
    Loss on change in fair value of forward repurchase contract     34,752       —       —       34,752       —  
    Other costs(1)     1,428       2,807       1,301       4,235       5,890  
    Total Non-GAAP Adjustments   $ 58,638     $ 23,300     $ 14,614     $ 81,938     $ 34,084  
                                   
    Non-GAAP Profit before Tax   $ 15,555     $ 6,727     $ 87,685     $ 22,282     $ 175,259  
                                   
    (1) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure such as project evaluation costs, which consist of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions and income (loss) in earnings of equity investments.  
       
    Reconciliation of Non-GAAP Income Tax Provision and Non-GAAP Effective Tax Rate  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Income Tax (Benefit) Provision   $ (9,470 )   $ 1,040     $ 7,400     $ (8,430 )   $ 14,615  
    GAAP effective tax rate     22.0 %     (6.3 )%     10.1 %     14.1 %     10.4 %
                                   
    Tax effect of adjustments to GAAP results     10,071       (395 )     2,554       9,676       6,380  
                                   
    Non-GAAP Income Tax Provision   $ 601     $ 645     $ 9,954     $ 1,246     $ 20,995  
    Non-GAAP effective tax rate     3.9 %     9.6 %     11.4 %     5.6 %     12.0 %
       
    Reconciliation of Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. and Non-GAAP Earnings per Share  
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Net (Loss) Income Attributable to Allegro MicroSystems, Inc.(1)   $ (33,675 )   $ (17,675 )   $ 65,617     $ (51,350 )   $ 126,467  
    GAAP Basic weighted average common shares     189,182,850       193,465,708       192,431,094       191,324,281       192,214,210  
    GAAP Diluted weighted average common shares     189,182,850       193,465,708       195,100,855       191,324,281       195,055,495  
    GAAP Basic (Loss) Earnings per Share   $ (0.18 )   $ (0.09 )   $ 0.34     $ (0.27 )   $ 0.66  
    GAAP Diluted (Loss) Earnings per Share   $ (0.18 )   $ (0.09 )   $ 0.34     $ (0.27 )   $ 0.65  
                                   
    Transaction-related costs     3,295       1,842       1,806       5,137       4,885  
    Transaction-related interest     141       709       —       850       —  
    Purchased intangible amortization     5,410       5,410       630       10,820       1,390  
    Restructuring costs     2,067       2,414       —       4,481       —  
    Stock-based compensation     11,545       10,118       10,877       21,663       21,919  
    Loss on change in fair value of forward repurchase contract     34,752       —       —       34,752       —  
    Other costs(2)     1,428       2,807       1,301       4,235       5,890  
    Total Non-GAAP Adjustments     58,638       23,300       14,614       81,938       34,084  
    Tax effect of adjustments to GAAP results(3)     (10,071 )     395       (2,554 )     (9,676 )     (6,380 )
    Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc.   $ 14,892     $ 6,020     $ 77,677     $ 20,912     $ 154,171  
    Basic weighted average common shares     189,182,850       193,465,708       192,431,094       191,324,281       192,214,210  
    Diluted weighted average common shares     189,710,595       194,705,716       195,100,855       192,154,185       195,055,495  
    Non-GAAP Basic Earnings per Share   $ 0.08     $ 0.03     $ 0.40     $ 0.11     $ 0.80  
    Non-GAAP Diluted Earnings per Share   $ 0.08     $ 0.03     $ 0.40     $ 0.11     $ 0.79  
                                   
    (1) GAAP Net (Loss) Income Attributable to Allegro MicroSystems, Inc. represents GAAP Net (Loss) Income adjusted for Net Income Attributable to non-controlling interests.  
    (2) Included in non-GAAP other costs are non-recurring charges that are individually immaterial for separate disclosure, such as project evaluation costs, which consists of costs and estimated costs incurred in connection with debt and equity financings or other non-recurring transactions, income (loss) in earnings of equity investments, and unrealized losses (gains) on investments.  
    (3) To calculate the tax effect of adjustments to GAAP results, the Company considers each Non-GAAP adjustment by tax jurisdiction and reverses all discrete items to calculate an annual Non-GAAP effective tax rate (“NG ETR”). This NG ETR is then applied to Non-GAAP Profit Before Tax to arrive at the tax effect of adjustments to GAAP results.  
             
    Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow as Percentage of Net Sales        
                                   
        Three-Month Period Ended     Six-Month Period Ended  
        September 27,
    2024    		     June 28,
    2024    		     September 29,
    2023    		     September 27,
    2024    		     September 29,
    2023    		  
        (Dollars in thousands)     (Dollars in thousands)  
    GAAP Operating Cash Flow   $ 15,547     $ 34,196     $ 46,730     $ 49,743     $ 96,393  
    GAAP Operating Cash Flow (% of net sales)     8.3 %     20.5 %     17.0 %     14.0 %     17.4 %
    Non-GAAP adjustments                              
    Purchases of property, plant and equipment     (9,972 )     (10,977 )     (31,191 )     (20,949 )     (76,101 )
                                   
    Non-GAAP Free Cash Flow   $ 5,575     $ 23,219     $ 15,539     $ 28,794     $ 20,292  
    Non-GAAP Free Cash Flow (% of net sales)     3.0 %     13.9 %     5.6 %     8.1 %     3.7 %
                                             

    Investor Contact:
    Jalene Hoover
    VP of Investor Relations & Corporate Communications
    +1 (512) 751-6526
    jhoover@allegromicro.com

    The MIL Network –

  • MIL-OSI USA News: Fact Sheet: Executive Order to Establish United States Leadership in Digital Financial Technology

    Source: The White House

    ENSURING U.S. LEADERSHIP IN DIGITAL FINANCIAL TECHNOLOGY: Today, President Donald J. Trump signed an Executive Order to establish regulatory clarity for digital financial technology and secure America’s position as the world’s leader in the digital asset economy, driving innovation and economic opportunity for all Americans.

    • The Executive Order establishes the Presidential Working Group on Digital Asset Markets to strengthen U.S. leadership in digital finance.
      • The Working Group will be tasked with developing a Federal regulatory framework governing digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile.
      • The Working Group will be chaired by the White House AI & Crypto Czar and include the Secretary of the Treasury, the Chairman of the Securities and Exchange Commission, and the heads of other relevant departments and agencies.
      • The White House AI & Crypto Czar will engage leading experts in digital assets and digital markets to ensure that the actions of the Working Group are informed by expertise beyond the Federal Government.
    • The Executive Order directs departments and agencies with identifying and making recommendations to the Working Group on any regulations and other agency actions affecting the digital assets sector that should be rescinded or modified.
    • The Executive Order prohibits agencies from undertaking any action to establish, issue, or promote central bank digital currencies (CBDCs).
    • The Executive Order revokes the previous Administration’s Digital Assets Executive Order and the Treasury Department’s Framework for International Engagement on Digital Assets which suppressed innovation and undermined U.S. economic liberty and global leadership in digital finance.

    ELIMINATING REGULATORY OVERREACH ON DIGITAL ASSETS AND PROTECTING AMERICAN ECONOMIC LIBERTY: President Trump is fulfilling his promise to make the United States the “crypto capital of the planet.”

    • President Trump will help make the United States the center of digital financial technology innovation by halting aggressive enforcement actions and regulatory overreach that have stifled crypto innovation under previous administrations.
    • President Trump’s policy vision marks an unprecedented step towards welcoming in a new era for digital financial technology; one in which President Trump’s administration will work towards ensuring innovation thrives, regulatory frameworks are clear, and economic liberty is protected.
    • The growth of digital financial technology in America must remain unhindered by restrictive regulations or unnecessary government interference.

    MIL OSI USA News –

  • MIL-OSI USA: FEMA Officials Meet Local Officials as Helene, Milton Recovery Progresses

    Source: US Federal Emergency Management Agency

    Headline: FEMA Officials Meet Local Officials as Helene, Milton Recovery Progresses

    FEMA Officials Meet Local Officials as Helene, Milton Recovery Progresses

    WASHINGTON – More than a month after Helene made landfall, FEMA officials remain on the ground coordinating with local officials in affected states to help guide their recovery.   Visits included Victoria Salinas, Senior Official Performing the Duties of Deputy Administrator, meeting with officials over several days in North Carolina and Florida. There Salinas and other FEMA officials discussed how the communities were progressing in their recovery and surveyed the effectiveness of modern building codes in minimizing storm-related damage.FEMA has approved more than $1.3 billion in direct assistance to Hurricanes Helene and Milton survivors. These funds help survivors with housing repairs, personal property replacement and other essential recovery efforts. Additionally, over $1.1 billion has been approved for debris removal and emergency protective measures, which are necessary to save lives, protect public health and prevent further damage to public and private property. More than 1,400 FEMA Disaster Survivor Assistance team members are in affected neighborhoods across affected states helping survivors apply for assistance and connecting them with additional state, local, federal and voluntary agency resources. Also, FEMA now has 76 Disaster Recovery Centers open throughout the hurricane affected communities. Center locations can be found at FEMA.gov/DRC. Centers can provide survivors in-person help with their applications and answer questions they have about available resources to help with their recovery.The U.S. Army Corps of Engineers announced Operation Blue Roof which is a free service to homeowners for 25 counties in Florida impacted by Hurricane Milton. Residents can sign-up at www.blueroof.gov or by calling 888-ROOF-BLU (888-766-3258).  The sign-up period deadline is Nov. 5.FEMA encourages Helene and Milton survivors to apply for disaster assistance online as this remains the quickest way to start your recovery. Individuals can apply for federal assistance by: Applying online at disasterassistance.govUsing the FEMA AppCalling 800-621-3362, Staffed daily from 7 a.m.-10 p.m. local timeVisiting a Disaster Recovery Center to talk with FEMA and state agency officials and apply for assistancePresident Joseph R. Biden has approved major disaster declarations in six states–Florida, Georgia North Carolina, South Carolina, Tennessee and Virginia–affected by Helene. He has also approved a major disaster declaration for Florida following Hurricane Milton.These photos highlight response and recovery efforts across states affected by hurricanes Helene and Milton. 

    SWANNANOA, North Carolina – FEMA sets up a mobile Disaster Recovery Center in an affected North Carolina community. Helene survivors in Swannanoa and nearby areas can visit this center to apply for federal disaster assistance and ask questions about available state and federal resources for their recovery. 

    SAVANNAH, Georgia – FEMA staff and FEMA Corps members help survivors of Hurricane Helene at the Disaster Recovery Center in Savannah.

    CORTEZ, Florida – Victoria Salinas, FEMA Senior Official Performing the Duties of Deputy Administrator, and other FEMA personnel join Manatee County officials in the Hunters Point Neighborhood in Cortez. There they spoke with an owner of a property development to talk about how building codes helped the community following the recent hurricanes. 

    COLLETSVILLE, North Carolina – Victoria Salinas, FEMA Senior Official Performing the Duties of Deputy Administrator, surveys the flood damage from Wilson Creek along Brown Mountain Road with members of the Collettsville Fire Department. Salinas also talked with the owners of the Brown Mountain Resort as they shared their story of surviving the flood from Hurricane Helene. 

    FEMA’s Disaster Recovery Toolkit provides graphics, social media copy and sample text in multiple languages. In addition, FEMA has set up a rumor control web page to reduce confusion about its role in the Helene and Milton response and recovery. 
    annie.bond
    Wed, 10/30/2024 – 17:58

    MIL OSI USA News –

  • MIL-OSI Video: CMV and VAHA’s Hispanic Heritage Month Second Event

    Source: United States of America – Federal Government Departments (video statements)

    We are honored to have special guests from diverse backgrounds: The Honorable James D. Rodriguez, Assistant Secretary, Department of Labor, Veterans Employment & Training Service (VETS), Silvana Montenegro with JPMorgan Chase, Head of Advancing Hispanics & Latinos, and Roman Palomares, League of United Latin American Citizens (LULAC) National President. We also presented on how “Food is Medicine,” displaying some traditional cuisine and other special guests.

    https://www.youtube.com/watch?v=Atl7Uk6lPPw

    MIL OSI Video –

  • MIL-OSI: FormFactor, Inc. Reports 2024 Third Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    Record Quarterly Revenue, Profitability at the Top End of the Outlook Range;
    Sees Reduced Demand for Foundry and Logic in Q4, Partially Offset by Continued Strength in DRAM

    LIVERMORE, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) — FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the third quarter of fiscal 2024 ended September 28, 2024. Quarterly revenues were $207.9 million, a company record and an increase of 5.3% compared to $197.5 million in the second quarter of fiscal 2024, and an increase of 21.2% from $171.6 million in the third quarter of fiscal 2023.

    • Record revenue in the third quarter exceeded outlook range and non-GAAP EPS was at the top end of the range.
    • Strong DDR5 demand produced third consecutive record-setting quarter of DRAM probe-card revenue.
    • FormFactor’s diversification strategy enabled participation in expanding investments in generative AI and data center applications.

    “We are proud to have posted our all-time revenue record in the third quarter,” said Mike Slessor, CEO of FormFactor, Inc. “This performance was driven by continued strength in our DRAM probe-card business, layered on top of moderate growth in our Foundry & Logic and Systems businesses.”

    Third Quarter and Fiscal 2024 Highlights

    On a GAAP basis, net income for the third quarter of fiscal 2024 was $18.7 million, or $0.24 per fully-diluted share, compared to net income for the second quarter of fiscal 2024 of $19.4 million, or $0.25 per fully-diluted share, and net income for the third quarter of fiscal 2023 of $4.4 million, or $0.06 per fully-diluted share. Gross margin for the third quarter of 2024 was 40.7%, compared with 44.0% in the second quarter of 2024, and 40.4% in the third quarter of 2023.

    On a non-GAAP basis, net income for the third quarter of fiscal 2024 was $27.2 million, or $0.35 per fully-diluted share, compared to net income for the second quarter of fiscal 2024 of $27.3 million, or $0.35 per fully-diluted share, and net income for the third quarter of fiscal 2023 of $17.3 million, or $0.22 per fully-diluted share. On a non-GAAP basis, gross margin for the third quarter of 2024 was 42.2%, compared with 45.3% in the second quarter of 2024, and 41.9% in the third quarter of 2023.

    A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.

    GAAP net cash provided by operating activities for the third quarter of fiscal 2024 was $26.7 million, compared to $21.9 million for the second quarter of fiscal 2024, and $20.6 million for the third quarter of fiscal 2023. Free cash flow for the third quarter of fiscal 2024 was $20.0 million, compared to free cash flow for the second quarter of fiscal 2024 of $14.2 million, and free cash flow for the third quarter of 2023 of $16.9 million. A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below.

    Outlook

    Dr. Slessor added, “We continue to experience record levels of DRAM probe card demand, with contributions from both DDR5 and High Bandwidth Memory applications. This, combined with slightly higher Systems Segment revenue, is helping to partially offset the forecasted reduction in Foundry & Logic probe-card demand.”

    For the fourth quarter ending December 28, 2024, FormFactor is providing the following outlook*:

      GAAP   Reconciling Items**   Non-GAAP
    Revenue $190 million +/- $5 million   —   $190 million +/- $5 million
    Gross Margin 40% +/- 1.5%   $3 million   41% +/- 1.5%
    Net income per diluted share $0.16 +/- $0.04   $0.13   $0.29 +/- $0.04
    *This outlook assumes consistent foreign currency rates.
    **Reconciling items are stock-based compensation, amortization of intangible assets and fixed asset fair value adjustments due to acquisitions, and restructuring charges, net of applicable income tax impacts.
       

    We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PT, or 4:25 p.m. ET, today.

    The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our website at www.formfactor.com. A telephone replay of the conference call will be available approximately two hours after the conclusion of the call. The replay will be available on the Investor Relations section of our website, www.formfactor.com.

    Use of Non-GAAP Financial Information:

    To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we disclose certain non-GAAP measures of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and nine months ended September 28, 2024, and for outlook provided before, as well as for the comparable periods of fiscal 2023, are provided below, and on the Investor Relations section of our website at www.formfactor.com. Information regarding the ways in which management uses non-GAAP financial information to evaluate its business, management’s reasons for using this non-GAAP financial information, and limitations associated with the use of non-GAAP financial information, is included under “About our Non-GAAP Financial Measures” following the tables below.

    About FormFactor:

    FormFactor, Inc. (NASDAQ: FORM), is a leading provider of essential test and measurement technologies along the full semiconductor product life cycle – from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.

    Forward-looking Statements:

    This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding future financial and operating results, including under the heading “Outlook” above, customer demand, conditions in the semiconductor industry, and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” “forecast,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as military conflicts, political volatility, infectious diseases and pandemics, and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. In addition, there are varying barriers to international trade, including restrictive trade and export regulations such as the US-China restrictions, dynamic tariffs, trade disputes between the U.S. and other countries, and national security developments or tensions, that may substantially restrict or condition our sales to or in certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.

    FORMFACTOR, INC. 
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share amounts)
    (Unaudited)

      Three Months Ended   Nine Months Ended
      September 28,
    2024    		   June 29,
    2024    		   September 30,
    2023    		   September 28,
    2024    		   September 30,
    2023
    Revenues $ 207,917     $ 197,474     $ 171,575     $ 574,116     $ 494,939  
    Cost of revenues   123,212       110,574       102,290       339,773       304,293  
    Gross profit   84,705       86,900       69,285       234,343       190,646  
    Operating expenses:                  
    Research and development   31,243       31,564       31,014       91,434       87,599  
    Selling, general and administrative   35,607       37,874       35,564       106,560       101,561  
    Total operating expenses   66,850       69,438       66,578       197,994       189,160  
    Gain on sale of business   —       310       —       20,581       —  
    Operating income   17,855       17,772       2,707       56,930       1,486  
    Interest income, net   3,650       3,415       1,662       10,221       4,420  
    Other income (expense), net   (558 )     360       788       322       1,261  
    Income before income taxes   20,947       21,547       5,157       67,473       7,167  
    Provision for income taxes   2,211       2,155       786       7,564       626  
    Net income $ 18,736     $ 19,392     $ 4,371     $ 59,909     $ 6,541  
    Net income per share:                  
    Basic $ 0.24     $ 0.25     $ 0.06     $ 0.77     $ 0.08  
    Diluted $ 0.24     $ 0.25     $ 0.06     $ 0.76     $ 0.08  
    Weighted-average number of shares used in per share calculations:                
    Basic   77,406       77,235       77,571       77,364       77,265  
    Diluted   78,439       78,717       78,412       78,495       77,860  
    FORMFACTOR, INC.
    NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
    (In thousands, except per share amounts)
    (Unaudited)
     
      Three Months Ended   Nine Months Ended
      September 28,
    2024    		   June 29,
    2024    		   September 30,
    2023    		   September 28,
    2024    		   September 30,
    2023
    GAAP Gross Profit $ 84,705     $ 86,900     $ 69,285     $ 234,343     $ 190,646  
    Adjustments:                  
    Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other   530       584       1,118       1,661       3,580  
    Stock-based compensation   1,934       1,932       1,376       5,794       4,801  
    Restructuring charges   524       —       —       607       357  
    Non-GAAP Gross Profit $ 87,693     $ 89,416     $ 71,779     $ 242,405     $ 199,384  
                       
    GAAP Gross Margin   40.7 %     44.0 %     40.4 %     40.8 %     38.5 %
    Adjustments:                  
    Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other   0.3 %     0.3 %     0.7 %     0.3 %     0.7 %
    Stock-based compensation   0.9 %     1.0 %     0.8 %     1.0 %     1.0 %
    Restructuring charges   0.3 %     — %     — %     0.1 %     0.1 %
    Non-GAAP Gross Margin   42.2 %     45.3 %     41.9 %     42.2 %     40.3 %
                       
    GAAP operating expenses $ 66,850     $ 69,438     $ 66,578     $ 197,994     $ 189,160  
    Adjustments:                  
    Amortization of intangibles and other   (240 )     (240 )     (466 )     (720 )     (3,563 )
    Stock-based compensation   (7,002 )     (8,277 )     (9,463 )     (23,756 )     (24,532 )
    Restructuring charges   (249 )     —       —       (249 )     (1,183 )
    Costs related to sale of business   (13 )     (43 )     (2,139 )     (702 )     (2,139 )
    Non-GAAP operating expenses $ 59,346     $ 60,878     $ 54,510     $ 172,567     $ 157,743  
                       
    GAAP operating income $ 17,855     $ 17,772     $ 2,707     $ 56,930     $ 1,486  
    Adjustments:                  
    Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other   770       824       1,584       2,381       7,143  
    Stock-based compensation   8,936       10,209       10,839       29,550       29,333  
    Restructuring charges   773       —       —       856       1,540  
    Gain on sale of business and related costs   13       (267 )     2,139       (19,879 )     2,139  
    Non-GAAP operating income $ 28,347     $ 28,538     $ 17,269     $ 69,838     $ 41,641  
    FORMFACTOR, INC. 
    NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
    (In thousands, except per share amounts)
    (Unaudited)
     
      Three Months Ended   Nine Months Ended
      September 28,
    2024    		   June 29,
    2024    		   September 30,
    2023    		   September 28,
    2024    		   September 30,
    2023
    GAAP net income $ 18,736     $ 19,392     $ 4,371     $ 59,909     $ 6,541  
    Adjustments:                  
    Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other   770       824       1,584       2,381       7,143  
    Stock-based compensation   8,936       10,209       10,839       29,550       29,333  
    Restructuring charges   773       —       —       856       1,540  
    Gain on sale of business and related costs   13       (267 )     2,139       (19,879 )     2,139  
    Income tax effect of non-GAAP adjustments   (2,002 )     (2,835 )     (1,617 )     (3,924 )     (5,650 )
    Non-GAAP net income $ 27,226     $ 27,323     $ 17,316     $ 68,893     $ 41,046  
                       
    GAAP net income per share:                  
    Basic $ 0.24     $ 0.25     $ 0.06     $ 0.77     $ 0.08  
    Diluted $ 0.24     $ 0.25     $ 0.06     $ 0.76     $ 0.08  
                       
    Non-GAAP net income per share:                  
    Basic $ 0.35     $ 0.35     $ 0.22     $ 0.89     $ 0.53  
    Diluted $ 0.35     $ 0.35     $ 0.22     $ 0.88     $ 0.53  
    FORMFACTOR, INC. 
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
     
      Nine Months Ended
      September 28,
    2024    		   September 30,
    2023
    Cash flows from operating activities:      
    Net income $ 59,909     $ 6,541  
    Selected adjustments to reconcile net income to net cash provided by operating activities:      
    Depreciation   22,197       22,880  
    Amortization   1,920       6,043  
    Stock-based compensation expense   29,550       29,333  
    Provision for excess and obsolete inventories   10,052       12,566  
    Gain on sale of business   (20,581 )     —  
    Other activity impacting operating cash flows   (21,426 )     (22,011 )
    Net cash provided by operating activities   81,621       55,352  
    Cash flows from investing activities:      
    Acquisition of property, plant and equipment   (30,773 )     (46,094 )
    Proceeds from sale of business   21,585       —  
    Purchases of marketable securities, net   (15,464 )     (3,900 )
    Purchase of promissory note receivable   (1,500 )     —  
    Net cash used in investing activities   (26,152 )     (49,994 )
    Cash flows from financing activities:      
    Purchase of common stock through stock repurchase program   (37,211 )     —  
    Proceeds from issuances of common stock   9,748       8,822  
    Principal repayments on term loans   (803 )     (781 )
    Tax withholdings related to net share settlements of equity awards   (17,990 )     (9,349 )
    Net cash used financing activities   (46,256 )     (1,308 )
    Effect of exchange rate changes on cash, cash equivalents and restricted cash   3       (3,324 )
    Net increase in cash, cash equivalents and restricted cash   9,216       726  
    Cash, cash equivalents and restricted cash, beginning of period   181,273       112,982  
    Cash, cash equivalents and restricted cash, end of period $ 190,489     $ 113,708  
    FORMFACTOR, INC. 
    RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
    (In thousands)
    (Unaudited)
     
      Three Months Ended   Nine Months Ended
      September 28,
    2024    		   June 29,
    2024    		   September 30,
    2023    		   September 28,
    2024    		   September 30,
    2023
    Net cash provided by operating activities $ 26,731     $ 21,878     $ 20,571     $ 81,621     $ 55,352  
    Adjustments:                  
    Sale of business related payments in working capital   2,134       630       2,139       2,811       2,139  
    Cash paid for interest   97       101       105       298       317  
    Capital expenditures   (8,939 )     (8,398 )     (5,917 )     (30,773 )     (46,094 )
    Free cash flow $ 20,023     $ 14,211     $ 16,898     $ 53,957     $ 11,714  
    FORMFACTOR, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited) 
     
      September 28,
    2024    		   June 29,
    2024    		   December 30,
    2023
    ASSETS          
    Current assets:          
    Cash and cash equivalents $ 184,506     $ 195,914     $ 177,812  
    Marketable securities   169,961       161,710       150,507  
    Accounts receivable, net of allowance for credit losses   116,866       113,277       102,957  
    Inventories, net   105,374       114,814       111,685  
    Restricted cash   3,773       5,939       1,152  
    Prepaid expenses and other current assets   34,302       28,964       29,667  
    Total current assets   614,782       620,618       573,780  
    Restricted cash   2,210       2,098       2,309  
    Operating lease, right-of-use-assets   25,034       26,650       30,519  
    Property, plant and equipment, net of accumulated depreciation   204,108       204,102       204,399  
    Goodwill   200,137       199,548       201,090  
    Intangibles, net   11,017       11,657       12,938  
    Deferred tax assets   92,826       88,841       78,964  
    Other assets   3,669       2,751       2,795  
    Total assets $ 1,153,783     $ 1,156,265     $ 1,106,794  
               
    LIABILITIES AND STOCKHOLDERS’ EQUITY          
    Current liabilities:          
    Accounts payable $ 52,086     $ 62,235     $ 63,857  
    Accrued liabilities   46,508       49,523       41,037  
    Current portion of term loan, net of unamortized issuance costs   1,098       1,090       1,075  
    Deferred revenue   20,972       17,953       16,704  
    Operating lease liabilities   8,512       8,240       8,422  
    Total current liabilities   129,176       139,041       131,095  
    Term loan, less current portion, net of unamortized issuance costs   12,488       12,765       13,314  
    Long-term operating lease liabilities   19,731       21,441       25,334  
    Deferred grant   18,000       18,000       18,000  
    Other liabilities   19,378       17,102       10,247  
    Total liabilities   198,773       208,349       197,990  
               
    Stockholders’ equity:          
    Common stock   77       77       77  
    Additional paid-in capital   845,466       863,283       861,448  
    Accumulated other comprehensive loss   (1,773 )     (7,948 )     (4,052 )
    Accumulated income   111,240       92,504       51,331  
    Total stockholders’ equity   955,010       947,916       908,804  
    Total liabilities and stockholders’ equity $ 1,153,783     $ 1,156,265     $ 1,106,794  
     

    About our Non-GAAP Financial Measures:

    We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP, and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, gross profit, gross margin, operating expenses, or operating income in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations” and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release.

    Source: FormFactor, Inc.
    FORM-F

    Investor Contact:
    Stan Finkelstein
    Investor Relations
    (925) 290-4321
    ir@formfactor.com

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