Category: Finance

  • MIL-OSI: Security Federal Corporation Announces Third Quarter Income

    Source: GlobeNewswire (MIL-OSI)

    AIKEN, S.C., Oct. 30, 2024 (GLOBE NEWSWIRE) — Security Federal Corporation (the “Company”) (OTCBB: SFDL), the holding company for Security Federal Bank (the “Bank”), today announced earnings and financial results for the three and nine months ended September 30, 2024.

    The Company reported net income available to common shareholders of $2.0 million, or $0.62 per share, for the quarter ended September 30, 2024, compared to $2.1 million, or $0.65 per share, for the third quarter of 2023. Year-to-date net income available to common shareholders was $5.9 million, or $1.83 per common share, for the nine months ended September 30, 2024, compared to $6.6 million, or $2.02 per common share, during the nine months ended September 30, 2023. Both the quarterly and year-to-date decreases in net income available to common shareholders were primarily due to increases in the provision for credit losses and non-interest expense, as well as the payment of preferred stock dividends during 2024, which were partially offset by increases in net interest income and non-interest income.

    Third Quarter Comparative Financial Highlights

    • Net interest income increased $964,000, or 10.2%, to $10.4 million during the quarter ended September 30, 2024, compared to $9.4 million during the third quarter of 2023.
    • Total interest income increased $2.7 million, or 16.1%, to $19.5 million while total interest expense increased $1.7 million, or 23.7%, to $9.1 million during the quarter ended September 30, 2024 compared to the same quarter the prior year. The increase in interest income and interest expense was the result of higher market interest rates and increased average interest-earning assets and interest-bearing liabilities.
    • Non-interest income increased $457,000, or 21.1%, to $2.6 million during the quarter ended September 30, 2024 compared to the same quarter in the prior year primarily due to $263,000 and $74,000 increases in trust income and gain on sale of loans, respectively.
    • Non-interest expense increased $389,000, or 4.4%, to $9.3 million during the quarter ended September 30, 2024 compared to the same quarter in the prior year primarily due to an increase in salaries and employee benefits expense.
         
        Quarter Ended
    (Dollars in Thousands, except for Earnings per Share)   9/30/2024   9/30/2023
    Total interest income   $ 19,531   $ 16,822
    Total interest expense     9,121     7,376
    Net interest income     10,410     9,446
    Provision for credit losses     580    
    Net interest income after provision for credit losses     9,830     9,446
    Non-interest income     2,625     2,168
    Non-interest expense     9,313     8,924
    Income before income taxes     3,142     2,690
    Provision for income taxes     732     568
    Net income     2,410     2,122
    Preferred stock dividends     415    
    Net income available to common shareholders   $ 1,995   $ 2,122
    Earnings per common share (basic)   $ 0.62   $ 0.65
                 
                 

    Year to Date (Nine Months) Comparative Financial Highlights

    • Net interest income increased $1.8 million, or 6.1%, to $30.6 million during the nine months ended September 30, 2024 compared to the same period in the prior year.
    • Total interest income increased $10.5 million, or 22.5%, to $57.1 million while total interest expense increased $8.7 million, or 49.0%, to $26.5 million during the nine months ended September 30, 2024 compared to the same period in the prior year.
    • Non-interest income increased $780,000, or 11.8%, to $7.4 million during the nine months ended September 30, 2024 compared to the same period in the prior year primarily due to a $480,000 increase in trust income.
    • Non-interest expense increased $1.8 million, or 6.5%, to $28.6 million for the nine months ended September 30, 2024 compared to the same period in 2023.
         
        Nine Months Ended
    (Dollars in Thousands, except for Earnings per Share)   9/30/2024   9/30/2023
    Total interest income   $ 57,071   $ 46,593
    Total interest expense     26,497     17,780
    Net interest income     30,574     28,813
    Provision for credit losses     1,090     221
    Net interest income after provision for credit losses     29,484     28,592
    Non-interest income     7,400     6,620
    Non-interest expense     28,617     26,863
    Income before income taxes     8,267     8,349
    Provision for income taxes     1,878     1,775
    Net income     6,389     6,574
    Preferred stock dividends     512    
    Net income available to common shareholders   $ 5,877   $ 6,574
    Earnings per common share (basic)   $ 1.83   $ 2.02
                 
                 

    Credit Quality

    • The Bank recorded a $1.2 million provision for credit losses on loans and a $110,000 reversal of provision for credit losses on unfunded commitments, resulting in a total provision for credit losses of $1.1 million for the first nine months of 2024, compared to $376,000 in provision for credit losses on loans and a $155,000 reversal of provision for credit losses on unfunded commitments, resulting in a total provision for credit losses of $221,000 for the first nine months of 2023.
    • Non-performing assets were $6.8 million at both September 30, 2024 and December 31, 2023, compared to $6.3 million at September 30, 2023.
    • The allowance for credit losses to gross loans was 1.95%, 1.98% and 2.03% at September 30, 2024, December 31, 2023, and September 30, 2023, respectively.
           
    At Period End (dollars in thousands): 9/30/2024 12/31/2023 9/30/2023
    Non-performing assets $ 6,770   $ 6,825   $ 6,339  
    Non-performing assets to total assets   0.43 %   0.44 %   0.43 %
    Allowance for credit losses $ 13,604   $ 12,569   $ 12,348  
    Allowance for credit losses to gross loans   1.95 %   1.98 %   2.03 %
                       
                       

    Balance Sheet Highlights and Capital Management

    • Total assets were $1.6 billion at September 30, 2024, a year-over-year increase of $99.0 million, or 6.7%.
    • Total loans receivable, net were $686.7 million at September 30, 2024, an increase of $64.2 million during the first nine months of 2024 and a year-over-year increase of $88.7 million.
    • Investment securities decreased $28.7 million during the first nine months of 2024 to $672.1 million at September 30, 2024, as maturities and principal paydowns of investment securities exceeded purchases during the nine-month period.
    • Deposits were $1.3 billion at September 30, 2024, an increase of $62.3 million, or 5.2% during the nine months ended September 30, 2024, and a year-over-year increase of $71.3 million, or 6.0%.
    • Borrowings decreased $49.1 million, or 28.9%, during the nine months ended September 30, 2024 to $121.0 million due to the repayment of borrowings with the Federal Reserve Bank Term Funding Program.
           
    Dollars in thousands (except per share amounts) 9/30/2024 12/31/2023 9/30/2023
    Total assets $ 1,576,326   $ 1,549,671   $ 1,477,330  
    Cash and cash equivalents   132,376     128,284     84,224  
    Total loans receivable, net   686,708     622,529     598,029  
    Investment securities   672,054     700,712     705,558  
    Deposits   1,257,313     1,194,997     1,186,053  
    Borrowings   120,978     170,035     119,898  
    Total shareholders’ equity   185,081     172,362     158,996  
    Common shareholders’ equity   102,132     89,413     76,047  
    Common equity book value per share $ 31.97   $ 27.69   $ 23.46  
    Total risk-based capital to risk weighted assets (1)   19.21 %   19.49 %   19.33 %
    CET1 capital to risk weighted assets (1)   17.96 %   18.24 %   18.08 %
    Tier 1 leverage capital ratio (1)   10.27 %   9.83 %   10.11 %
    (1) – Ratio is calculated using Bank only information and not consolidated information      
           
           

    Security Federal Bank has 19 full-service branches located in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Ridge Spring, Wagener and West Columbia, South Carolina and Augusta and Evans, Georgia. A full range of financial services, including trust and investments, are provided by the Bank and insurance services are provided by the Bank’s wholly owned subsidiary, Security Federal Insurance, Inc.

    Forward-looking statements:

    Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding the Company’s mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. The Company’s actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to: potential adverse impacts to economic conditions in our local market area 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, a potential recession or slowed economic growth; economic conditions in the Company’s primary market area; demand for residential, commercial business and commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; changes in management’s business strategies, including expectations regarding key growth initiatives and strategic priorities; legislative or regulatory changes that adversely affect the Company’s business, including the interpretation of regulatory capital or other rules; the ability to attract and retain deposits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; adverse changes in the securities markets; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; technology factors affecting operations, including disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; pricing of products and services; environmental, social and governance goals and targets; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake any responsibility to update or revise any forward-looking statement.

    The MIL Network

  • MIL-OSI Canada: MP Hanley announces federal investment supporting SKOOKUMbrand’s technology adoption to increase production and sales

    Source: Government of Canada News

    News release

    October 30, 2024 — Dawson City, Yukon — Canadian Northern Economic Development Agency

    Small businesses across the North are providing unique high-quality products while boosting community growth, providing good jobs and contributing to regional and territorial economic development.

    Today, Dr. Brendan Hanley, Member of Parliament for the Yukon, on behalf of the Honourable Dan Vandal, Minister of Northern Affairs and Minister responsible for PrairiesCan and CanNor, announced a federal investment of nearly $100,000 in Northern Garments Inc., a Dawson City-based small business widely known as SKOOKUMbrand.

    Through this two-year project, SKOOKUMbrand will upgrade its production equipment to include computer-aided design technology so it can build capacity and meet increasing demand for its award-winning custom-made winter clothing. This investment will also support the purchase of small capital equipment to enhance productivity at the rural worksite and help address challenges with staff recruitment. Additionally, this project includes upgrades to the company’s website to increase its reach and expedite order processing. 

    The Government of Canada is supporting small business growth across the North. Investing in territorial entrepreneur and innovator ecosystems supports dynamic and strong economies and provides benefits to Yukoners and Northerners alike.

    Quotes

    “Supporting small businesses in rural areas to grow is essential to building strong economies and resilient communities. SKOOKUMbrand is contributing to the territorial economy, providing jobs, and designing clothing made in the North for northern weather. By investing in projects like this, our government is supporting northern businesses to expand, adopt new technology and address northern challenges.”

    The Honourable Dan Vandal, Minister of Northern Affairs and Minister responsible for PrairiesCan and CanNor

    “Small businesses contribute so much to the Yukon. For nearly 20 years, SKOOKUMbrand has produced high-quality Yukon-made outdoor clothing for Yukoners and have shipped its creations to people around the world. By implementing digital technologies, enhancing their online presence, and building capacity, this company can access wider markets.”
      

    Dr. Brendan Hanley, Member of Parliament for the Yukon

    “Our government is proud to stand behind Yukoners, driving local growth and strengthening our economy. By investing in local businesses, we are helping Yukoners enhance their communities, expand their businesses, and contribute to a resilient, sustainable future for our territory. SKOOKUMbrand embodies the spirit of Yukon—innovative, community-driven and proudly local, crafting products tailored specifically for Yukoners. Through the Economic Development Fund, we are excited to help this outstanding local company grow and reach new heights.”

    Ranj Pillai, Premier and Minister of Economic Development, Government of Yukon

    “Doing business from the North is always challenging. We operate in isolation from our industry peers and face skilled labour shortages, so we need to be resourceful and look to technology to for solutions that enable us to fill the demand for our products. The assistance we’ve been able to access through CanNor and the Yukon government is helping us to expand to become fully digital in sales and manufacturing, provide employee transit to our workplace and scale up to the next level of development. We are extremely grateful for this timely and focused assistance.”

    Megan Waterman, Owner, Northern Garments Inc.

    Quick facts

    • CanNor is contributing up $99,999 over two years for this project through the Inclusive Diversification and Economic Advancement in the North (IDEANorth) program. This program makes foundational investments in economic infrastructure, sector development and capacity building to help position Northerners in the territories to take advantage of Canada’s innovation economy.

    • The Government of Yukon’s Economic Development Fund (EDF) is also investing more than $20,000 in this project between 2023 and 2025. The EDF supports projects and initiatives that provide long-term, sustainable economic benefits to Yukoners and Yukon communities.

    • SKOOKUMbrand is a woman-owned small business located in Dawson City, Yukon. Since 2005, the company has been designing and manufacturing winter outerwear, such as fur-trimmed parkas, and accessories for circumpolar lifestyles.

    Associated links

    Contacts

    Kyle Allen
    Director of Communications, Parliamentary Affairs and Issues Management
    Office of the Minister of Northern Affairs, Minister Responsible for PrairiesCan, and Minister Responsible for CanNor
    kyle.allen@rcaanc-cirnac.gc.ca

    Leighann Chalykoff
    Communications Advisor, Yukon Region
    Canadian Northern Economic Development Agency (CanNor)
    leighann.chalykoff@cannor.gc.ca

    Damian Topps
    Government of Yukon, Economic Development
    867-667-5378
    damian.topps@yukon.ca

    Megan Waterman
    Owner
    SKOOKUMbrand
    megan@skookum.shop

    Stay connected

    Follow CanNor on XFacebook and LinkedIn.

    MIL OSI Canada News

  • MIL-OSI USA: Ship Management Company Fined $1.75M for Failing to Maintain an Accurate Oil Record Book that Concealed Unauthorized Discharges at Sea

    Source: US State of Vermont

    Gremex Shipping S.A. de C.V., a Mexican corporation that managed several ships, including the M/V Suhar, pleaded guilty and was sentenced today in federal district court in Pensacola, Florida, for creating and providing false records to the U.S. Coast Guard to conceal its illegal discharge of oily bilge waste into the ocean, which is a felony violation of the Act to Prevent Pollution from Ships (APPS).

    The charge stems from a Coast Guard investigation of the ship once it arrived in Pensacola on Aug. 25, 2023. The Suhar is a 7,602 gross ton Panamanian-flagged ocean-going bulk carrier that routinely hauled cement from Tampico, Mexico, to Pensacola. Since March 2021, day-to-day operation of the ship was undertaken by Gremex, which was responsible for hiring all crew, and ensuring compliance with all policies on protection of the environment in accordance with international regulations. After boarding the ship to determine compliance with all applicable laws, Coast Guard personnel determined that the vessel’s crew had regularly discharged untreated oily bilge water into sea in a manner that bypassed onboard pollution control equipment, and then falsified the ship’s oil record book to conceal these discharges.

    As part of normal vessel operations, large ocean-going ships like the Suhar generate oily bilge water that periodically needs to be discharged for the vessel to operate safely. The United States and Panama are both parties to an international treaty known as MARPOL, which regulates and limits the at-sea discharge of oily bilge water. To satisfy these marine pollution requirements, vessels typically discharge oily bilge water after it has been processed through an oily water separator, a piece of onboard pollution control equipment which removes oil from bilge water prior to discharge. Ships are required to maintain an oil record book that documents all discharges of oily bilge water so authorities can monitor ships for compliance with these international requirements. Federal law requires that foreign ships arriving at U.S. ports maintain an accurate oil record book.

    Consistent with a sentencing recommendation jointly proposed by the government and Gremex, the court sentenced the company to pay a $1.75 million fine, serve a four-year term of probation and commit to developing and implementing an environmental compliance plan that will be in effect during the time the company is on probation.

    Assistant Attorney General Todd Kim of the Environment and Natural Resources Division and U.S. Attorney Jason R. Coody for the Northern District of Florida made the announcement.

    The Coast Guard’s Investigative Service investigated the case.

    Trial Attorney Joel La Bissonniere of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Ryan Love for the Northern District of Florida prosecuted the case. 

    MIL OSI USA News

  • MIL-OSI Russia: SUM Renews Traditions: The University Hosted the D.S. Lvov National Economic Forum

    Translation. Region: Russian Federation –

    Source: State University of Management – Official website of the State –

    On October 30, 2024, the National Economic Forum named after D.S. Lvov was held at the Information Technology Center of the State University of Management, within the framework of which a new master’s educational program of the Eurasian Network University “Economics of Integration Processes in the Eurasian Economic Union” was opened.

    The plenary session was attended by: Vice-Rector of the State University of Management Maria Karelina, Co-Chair of the Forum, Corresponding Member of the Russian Academy of Sciences, Head of the Department of Institutional Economics of the State University of Management Georgy Kleiner, Corresponding Member of the Russian Academy of Sciences, Director of the Central Economics and Mathematics Institute of the Russian Academy of Sciences Albert Bakhtizin, Head of the Scientific Direction “Macroeconomics and Institutional Theory” of the Central Economics and Mathematics Institute of the Russian Academy of Sciences Viktor Dementyev, Director of the Department of Support of New Businesses of the State Corporation “Rosatom” Dmitry Baidarov, Academician of the Russian Academy of Sciences, Head of the Department of Economic Policy and Economic Measurements of the Institute of Economics and Finance of the State University of Management Sergey Glazyev. The moderator was Director of the IEF of the State University of Management Galina Sorokina.

    The renewal of the tradition of holding the Forum will allow the State University of Management to advance in economic science. This was stated by the Vice-Rector of the State University of Management Maria Karelina. Addressing all participants, students of Academician Dmitry Lvov and future economists, she also noted that this decision will contribute to interdisciplinary research, which is especially relevant today.

    It should be noted that this year marks the 70th anniversary of Dmitry Lvov’s graduation from the Moscow Ordzhonikidze Engineering and Economics Institute (now the State University of Management). The head of the Department of Institutional Economics at our university, Georgy Kleiner, delivered a report to the audience. Georgy Borisovich drew attention to the fact that not many economists offered their economic paradigm to the world. Academician Lvov saw the essence of economics in the fusion of material factors, spiritual quests, emotions and institutional influences. It is thanks to this science that we are a society. A person is not only the main resource of the economy, but also a beneficiary, a source of progress. He should not be a hostage to the economic system, but a part of it. Dmitry Lvov’s key idea was that the economy should be a link between man and humanity. It was to study such global issues that Academician Lvov created the first Department of Institutional Economics in Russia at the State University of Management.

    During the active work of Dmitry Lvov, the Internet had not yet penetrated into all spheres of life, but today the academician’s speeches would be constantly on everyone’s lips, because he outraged the space with uncomfortable questions. This was very subtly noted by the director of the Central Economics and Mathematics Institute of the Russian Academy of Sciences, Albert Bakhtizin. Back in 2004, he drew attention to the depopulation of Russia, the unfair division of resources, noted the importance of contacts with China, described the instruments of pressure of the USA on other countries, that is, he saw the contours of the future world order. The speaker analyzed modern economic problems in detail, in particular, he noted that even experts in the USA understand how harmful excessive dollarization is for the world economy.

    Viktor Dementyev, head of the Macroeconomics and Institutional Theory research department at the Central Economics and Mathematics Institute of the Russian Academy of Sciences, gave a report on the topic of “The Resilience of Russian Regional Economies under Different Shocks.” According to him, the modern economy has experienced four shocks: the Great Recession of 2009, the sanctions wave of 2015, the pandemic, and, of course, the second wave of sanctions, which is still ongoing. Research has shown that entities that are resilient to one shock are also resilient to others. But at the same time, methods for successfully overcoming one crisis do not always work under another.

    Dmitry Baidarov, Director of the Department for Support of New Businesses at the Rosatom State Corporation, expressed the opinion that economic challenges facing Russia did not appear after the start of the SVO or during the pandemic – they have always been there, it’s just that the attitude towards them was different before. The history of Rosatom shows that if you pay attention to a gap in the economy in time, you can quickly and effectively fill it. For example, the corporation currently fulfills 88% of global orders for the construction of nuclear power facilities. Dmitry Baidarov regretfully noted that the paradigm of a competitive rather than a partnership economy, imported from outside, still prevails in Russia. The speaker said that Rosatom only realized two years ago how much engineers and economists are needed in production, and there are almost none left on the labor market, so the focus of the State University of Management on training just such specialists is very timely.

    Sergey Glazyev, Head of the Department of Economic Policy and Economic Measurements at the Institute of Economics and Finance at the State University of Management, said that Dmitry Lvov was his academic advisor, with whom they substantiated the priorities of Russia’s new economic development and discussed the need to create state corporations as opposed to the fragmentation of production cycles. China has followed this path and achieved a lot, and we are facing dynamic catch-up, which is also impossible without the creation of state corporations. For an economic breakthrough, we need not just a sharp increase in investment, but targeted investment lines. The experience of Asian economies shows that this is the only way it works. If we followed the ideas of Lvov, who claimed that money cannot be a moral value and the core of the economy, we would already be world leaders along with India and China, where this is carefully monitored.

    The second part of the plenary session was no less interesting and productive. It was dedicated to the opening of the educational program of the Eurasian Network University “Economics of Integration Processes in the Eurasian Economic Union”.

    The program was presented by the Vice-Rector of the State University of Management Dmitry Bryukhanov, who noted that questions about the “fifth freedom”, freedom of knowledge, are becoming increasingly loud today, so the opening of the new program is fully supported by the Ministry of Science and Higher Education of the Russian Federation and Rossotrudnichestvo. The Vice-Rector reported that the program was developed with the assistance of the Eurasian Economic Commission and about 20 master’s students have already been enrolled, and training will start this week. The process will be hybrid, for which a special information environment has been developed.

    One of the developers of the program, Deputy Director of the Department of Macroeconomic Policy of the Eurasian Economic Commission Kanybek Azhekbarov wished all applicants good studies and drew the attention of those gathered to the fact that the program was created on the basis of additional professional education, which has already trained 40 specialists.

    The head of the program, Sergey Glazyev, thanked the Ministry of Science and Higher Education of the Russian Federation, the government of Kyrgyzstan and the State University of Management for their support. He shared plans to expand the program and noted that the Eurasian Economic Union and its labor market cannot effectively exist without a common educational space, and the State University of Management is an excellent platform to begin forming it.

    At the end of the new program, students were presented with a symbolic pass to the State University of Management. After the break, the Forum continued in sections and round tables.

    Subscribe to the TG channel “Our GUU” Date of publication: 10/30/2024

    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 Canada: Taxpayers’ Ombudsperson is pleased that the Canada Revenue Agency is exempting bare trustees from the 2024 filing requirement

    Source: Government of Canada News (2)

    The Taxpayers’ Ombudsperson, Mr. François Boileau, is pleased that the Canada Revenue Agency (CRA) has proactively waived the 2024 filing requirement for bare trusts, unless it makes a direct request.

    OTTAWA, October 30, 2024 – The Taxpayers’ Ombudsperson, Mr. François Boileau, is pleased that the Canada Revenue Agency (CRA) has proactively waived the 2024 filing requirement for bare trusts, unless it makes a direct request.

    In July 2024, the Taxpayers’ Ombudsperson announced that our Office was opening a systemic examination into whether the CRA had respected taxpayers’ rights in its administration of bare trust filing requirements for the 2023 tax year.

    In carrying out the examination, we heard from stakeholders that the bare trust information the CRA provided for the 2023 tax year had value, but like the 2023 exemption, it came too late. Many tax preparers complete their hiring and training in the fall for each upcoming tax season. Therefore, announcing relief or an exemption beyond November is not timely.

    In August and September 2024, the Department of Finance Canada consulted with Canadians on technical amendments clarifying the trust reporting rules. It indicated that the legislative proposal would seek to reduce the administrative burden and to exempt bare trustees from the 2024 bare trust filing requirement.

    The CRA’s role is to administer the tax legislation in a manner that is fair and reasonable for taxpayers. It appears unlikely that a bill reflecting the proposed amendments would receive royal assent before many tax preparation firms begin planning for the 2025 tax-filing season. Therefore, it was important that the CRA proactively communicate this exemption, which it did this week.

    We are currently in the final stages of drafting our report on our examination into the CRA’s administration of the 2023 bare trust filing requirements. We have met with stakeholders, examined complaints we received, and sought answers from the CRA. We plan to publish the report in early 2025.

    Background information

    The Office of the Taxpayers’ Ombudsperson works independently from the CRA. Canadians can submit complaints to the Office if they feel they are not receiving the appropriate service from the CRA. Our main objective is to improve the service the CRA provides to taxpayers and benefit recipients by reviewing individual service complaints and service issues that affect more than one person or a segment of the population.

    The Taxpayers’ Ombudsperson assists, advises and informs the Minister of National Revenue about matters relating to services provided by the CRA. The Ombudsperson ensures, in particular, that the CRA respects eight of the service rights outlined in the Taxpayer Bill of Rights.

    MIL OSI Canada News

  • MIL-OSI USA: Deluzio Celebrates $4.3 Million for Shaler Township Water System

    Source: United States House of Representatives – Congressman Chris Deluzio (PA-17)

    CARNEGIE, PA — Today, Congressman Chris Deluzio (PA-17) announced that Shaler Township, a community in Pennsylvania’s 17th Congressional District, is receiving $4.3 million in a federal investment for water infrastructure improvements. Specifically, the project will replace defective infrastructure in the Township’s public sewer system through PENNVEST low-interest financial assistance loans. 

    “It’s simple: the good people of Shaler Township need a dependable water system. I’m proud to see these federal dollars come home to make sure Shaler’s water is safe,” said Rep. Chris Deluzio. “I came to Congress to make life better for folks in Western PA, and fixing our infrastructure—like this project funded through the Infrastructure Law—is a big part of that work.” 

    The project will repair 30,000 feet of defective sewer lines, rehabilitate 177 manholes through direct excavation and in situ lining, and install 29 new manhole structures. This project will help Shaler Township meet water safety standards, as it pulls the Township into compliance with the infiltration and inflow Consent Order with the Allegheny County Health Department. 

    The federal funding for this project comes from the Biden-Harris Administration’s Infrastructure Investment and Jobs Act and is awarded to Shaler Township through PENNVEST, a Pennsylvania State financing authority. The authority provides low-cost financial assistance to address water, wastewater, stormwater, and non-point source pollution problems in local water systems that impact public health, safety, the environment, regulatory compliance, and economic development. PENNVEST’s two-part goal is to provide all Pennsylvanians access to clean water while also supporting the Commonwealth’s economic development.  

    ###

    MIL OSI USA News

  • MIL-OSI USA: Congressman Dan Goldman Works to Protect the Rule of Law From Presidential Abuses of Power

    Source: United States House of Representatives – Congressman Dan Goldman (NY-10)

    The ‘Investigative Integrity Protection Act’ Would Prevent Sitting Presidents from Dismissing Own Active Criminal Prosecutions 

    Read the Bill Here 

    Washington, DC – Congressman Dan Goldman (NY-10) joined Congressman Adam Schiff (CA-30) in introducing the ‘Investigative Integrity Protection Act,’ which would prevent a sitting president from dismissing an active criminal prosecution against him or herself, including through coercion of an attorney general by the president or anyone acting on the president’s behalf. 

    “The Rule of Law dictates that no person should be the judge and jury of his own case, yet Donald Trump has promised to throw out the federal criminal cases against him if he becomes President,” Congressman Dan Goldman said. “Trump used the power of his office in many ways during his first term, so it is imperative that we codify the guardrails necessary to protect our nation from descending into dictatorship.”  

    In the event that an Attorney General would seek to dismiss any criminal prosecution against the president, the Investigative Integrity Protection Act would: 

    • Only allow the court to grant a dismissal after having considered a number of factors, including whether the Attorney General was appointed with the intent of dismissing any criminal prosecution against the President; 

    Congressman Goldman remains committed to protecting American democracy from those who wish to undermine and destroy it.  

    As his first bill in Congress, Goldman introduced the ‘Early Voting Act,’ which would require at least a 14-day window of in-person early voting for federal elections across the country. The bill would also require that election officials maximize polling place accessibility and would take steps to address unacceptably long wait-times for voters in line to cast their ballots and for election results by mandating that election officials start processing and scanning ballots at least 14 days prior to Election Day. 

    In February 2024, the Congressman cosponsored the ‘Preventing Private Paramilitary Activity Act’ to protect citizens the from intimidation and mass mobilizations of paramilitary groups. This legislation would federally prohibit those in private paramilitary organizations from conducting activity with firearms. 

    MIL OSI USA News

  • MIL-OSI Russia: Financial news: List of changes made to the Main directions of the unified state monetary policy for 2025 and the period 2026 and 2027

    Translation. Region: Russian Federation –

    Source: Central Bank of Russia (2) –

    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.

    Category24-7, Central Bank of Russia, MIL-AXIS, Russian Banks, Russians Savings, Russian Finance, Russians Language, Russian economy, Russian banks

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    MIL OSI Russia News

  • MIL-OSI Europe: EIB Group showcases progress of European Tech Champions Initiative boosting European scale-ups at event in Madrid

    Source: European Investment Bank

    • Since its launch in 2023, the European Tech Champions Initiative has closed fund deals worth €2 billion and mobilising five times this amount, totalling €10 billion in public and private sector resources.
    • Investments have been made in 16 technology scale-ups, two of which are Spanish.
    • In Spain, the European Tech Champions Initiative has invested in a mega fund specialising in deep tech and climate, and an investment in a second mega fund is expected by 2025.
    • As an ETCI participant country, Spain has announced an additional contribution of €300 million to the initiative by the Ministry of Digital Transformation that is soon to be approved by the Spanish cabinet.

    The EIB Group outlined the progress of the European Tech Champions Initiative (ETCI) – the fund of funds promoted by the European Union and participating EU Member States to foster the growth of cutting-edge technology startups with high growth potential (scale-ups) – today in Madrid. This initiative is led by the European Investment Fund (EIF), the EIB Group’s specialist provider of investment capital to benefit small and medium-sized enterprises (SMEs) and mid-caps.

    The presentation took place during the Tech Champions Made in Europe day, which brought together representatives of the Spanish investment and technological innovation ecosystem and was attended by EIB Group President Nadia Calviño, Spanish Minister of Economy, Trade and Business Carlos Cuerpo, EIF Chief Executive Marjut Falkstedt and Instituto de Crédito Oficial (ICO) Chairman Manuel Illueca Muñoz.

    Opening the day, President Calviño had the opportunity to detail the ongoing work to bolster the European capital market, including the expansion of the ETCI and opening it up to private investors. New financial instruments are also being developed to facilitate investor exits via acquisition or listing of the technology startups on European markets.

    “Thanks to EIB Group support, Spain now has a top-tier European investment mega fund. We are already working on the second phase of this initiative, in which Spain is expected to retain its key role,” said EIB Group President Nadia Calviño.

    The event was closed by Spanish Minister of Economy, Trade and Business Carlos Cuerpo, who said: “Spain has already provided €400 million to the ETCI, and today we are announcing an additional contribution of €300 million from the Ministry of Digital Transformation that is soon to be approved by the Spanish cabinet.”

    Since its launch in 2023, the ETCI has been fostering a positive environment in the European venture capital fund market and in the technology ecosystem. It has already closed fund deals worth €2 billion and mobilising five times this amount, totalling €10 billion in public and private sector resources for investment in growth-stage technology companies. ETCI-backed funds have so far invested in 16 European companies, two of which are Spanish.

    In Spain, the ETCI has already made an initial investment in the Kembara Fund I FCR mega fund, a deep tech and climate-focused venture capital fund operating across Europe and managed by Alma Mundi Ventures SGEIC (Mundi Ventures). An investment in a second mega fund is expected by 2025. ETCI-backed funds have in turn invested in two Spanish high-tech companies in their advanced growth phase: Inke, which specialises in respiratory disease treatments, and Factorial, which develops and sells human resources software.

    EIF Chief Executive Marjut Falkstedt said: “We are very happy with the ETCI’s progress to date, and are working on expanding it to increase its impact on the European venture capital and technological innovation ecosystems even further. We are exploring initiatives including structures where the private sector can play a greater role in this fund of funds, which is vital for ensuring European technological autonomy.”

    During his speech, ICO Chairman Manuel Illueca Muñoz said: “The ETCI is helping to strengthen the EU innovation ecosystem. ICO Group aims to support Spanish startups and scale-ups throughout their lifecycle, until they reach sufficient maturity for the ETCI to turn them into European champions.”

    Background information

    The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures in Spain of €11.4 billion in 2023, approximately €6.8 billion of which went to climate action and environmental sustainability projects. Overall, the EIB Group signed €88 billion in new financing in 2023.

    The European Tech Champions Initiative (ETCI) is an EU programme managed by the EIF and backed by the European Commission and participating EU Member States. It helps to cover the financing needs of European technology scale-ups, preventing them from relocating and strengthening Europe’s strategic autonomy and competitiveness. Sectors benefiting from the initiative include cybersecurity, artificial intelligence, quantum computing, deep tech, green technologies, biotechnology and digital technologies. The ETCI is also making a major contribution to the European financial markets and is an example of how the EIB Group can act as a pioneering instrument for the capital markets union.

    Discurso completo de la presidenta Nadia Calviño durante la apertura de la jornada

    MIL OSI Europe News

  • MIL-OSI United Nations: Deputy Secretary-General’s remarks to the Qatar Foundation: “Towards the Second World Social Development Summit 2025: Reinforcing global efforts to achieve the 2030 Agenda” [as prepared for delivery]

    Source: United Nations secretary general

    Ladies and Gentlemen,

    I am delighted to be here and to see so many of you present here today.

    Let me start by thanking the Qatar Foundation for organizing this important and timely event, and the Government of Qatar for generously agreeing to host the Second World Summit for Social Development in November 2025.

    This is a great opportunity to shape our common vision for the upcoming Summit and ensure its success, building on the recent Pact for the Future.

    Almost 30 years ago, the Copenhagen Declaration on Social Development and its Programme of Action established a pathbreaking new consensus for people-centred development. Theis was strengthened by the Beijing Platform for Women, and this vision was later enshrined in the 2030 Agenda for Sustainable Development.

    Since the Copenhagen Summit in 1995, remarkable progress has been achieved. However, recent overlapping crises have further stalled or reversed progress in many areas.

    Uneven progress – coupled with the lingering effects of economic recovery from the COVID-19 pandemic, rising geopolitical conflicts, the climate crisis, and economic disruptions like the debt crisis – have deepened inequalities and placed significant stress on countries fiscal space for investing in sustainable development and the brunt felt by people.

    The number of people living in extreme poverty is almost 700 million and growing. The number of people facing hunger is over 730 million and growing. Access to quality and relevant education, decent work, universal healthcare, social protection, and digital connectivity remains limited, with billions at risk of being left behind.

    The message is clear – and it is stark.

    The outlook for achieving people-centered development and meeting the Sustainable Development Goals is fragile.

    But it is not too late to change course if we step up our efforts and reaffirm our commitment to leave no one behind. We need urgent, coordinated reforms and harmonization of social, economic, and fiscal policies. We need genuine partnerships.

    The recently adopted Pact for the Future proposes a number of commitments and solutions. It reinforces the promise to deliver on Agenda 2030.

    This includes an SDG Stimulus, a review of the sovereign debt architecture, and a commitment to reform the global financial architecture, so it provides developing countries with the support and safety net they need to invest in their people and the systems they require.

    The Pact also proposes solutions to strengthen peace and security and redoubles the world’s commitment to human rights and international law.

    This is an important reminder that social development cannot be attained in the absence of peace and security – or in the absence of respect for human rights and all fundamental freedoms.

    The Pact goes further to embrace the new era of technology and provide the guard rails for the opportunity of AI to better connect and reap the benefits for all.

    Ladies and gentlemen,

    The Social Summit comes at an opportune time. With only five years left to achieve the SDGs, we must address all seventeen goals – from poverty, hunger and inequality, to education, peace and inclusivity.

    The 2025 Summit must culminate in a detailed and measurable action plan for social development fit for the 21st century, safeguarding progress for years to come.

    The Summit will also be informed by the outcomes of the Fourth International Conference on Financing for Development and by Member States’ progress on the Pact for the Future’s commitments to invest in people, end poverty and hunger, and strengthen trust and social cohesion.

    At every step, the process towards the Summit must be inclusive and respond to people’s realities and expectations. We must listen to their voices and ensure that people – particularly youth – have a say in shaping their future.

    Open and broad consultations will be an opportunity to build trust and reinforce the connection between people and their governments, but also between people and global institutions.

    It will be an opportunity to shape the societies we want, tailormade to benefit our rich heritage and fabric which underpin the very foundation of inclusive and caring societies.

    To safeguard progress in the long run, we need to join forces around a shared agenda, underpinned by solidarity, respect and trust.

    Throughout, we must all aim high. Let us seek innovative approaches to engagement, cocreation and finding consensus at the highest ambition, while remaining steadfast in our pursuit of accelerating progress towards the SDGs.

    With the leadership of the Government of Qatar, and key partners such as the Qatar Foundation, I am confident that the Social Summit will lay solid foundations for advancing a key strand of the DNA of sustainable development, the social pillar.

    Thank you for joining us on this journey and let’s begin the conversation today.  
     

    MIL OSI United Nations News

  • MIL-OSI: Hawthorn Bancshares Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    JEFFERSON CITY, Mo., Oct. 30, 2024 (GLOBE NEWSWIRE) — Hawthorn Bancshares, Inc. (NASDAQ: HWBK), (the “Company”), the bank holding company for Hawthorn Bank, reported third quarter 2024 net income of $4.6 million, or earnings per diluted share (“EPS”) of $0.66.

    Third Quarter 2024 Results

    • Net income improved $2.0 million, or 77%, from the third quarter 2023 (the “prior year quarter”)
    • EPS of $0.66, an improvement of $0.30 per share, or 83%, from the prior year quarter
    • Net interest margin, fully taxable equivalent (“FTE”) improved in the third quarter 2024 to 3.36% compared to 3.33% for second quarter 2024 (the “prior quarter”)
    • Return on average assets and equity of 1.00% and 12.87%, respectively
    • Loans decreased $31.8 million, or 2.1%, and deposits decreased $46.7 million, or 3.0%, compared to the prior quarter
    • Investments increased $17.9 million, or 9.3%, compared to the prior quarter
    • Credit quality remained strong with non-performing loans to total loans of 0.28%
    • Remained well capitalized with total risk-based capital of 14.91%
    • Book Value per share increased $4.09 to $20.91, or 24%, compared to the prior year quarter

    Brent Giles, Chief Executive Officer of Hawthorn Bancshares, Inc. commented, “We are pleased with the progress we’ve made on our strategic objectives, and the corresponding financial results. Our focus on core lines of business has resulted in reduced overhead expenses and expansion of our fee income.”

    Financial Summary

    (unaudited)
    $000, except per share data

      September 30,   June 30,   September 30,
      2024   2024   2023
    Balance sheet information:          
    Total assets $ 1,809,769     $ 1,847,810     $ 1,879,005  
    Loans held for investment   1,466,751       1,498,504       1,556,969  
    Investment securities   209,019       191,159       240,521  
    Deposits   1,503,504       1,550,250       1,580,365  
    Total stockholders’ equity $ 146,474     $ 138,241     $ 118,404  
               
    Key ratios and per share data:          
    Book value per share $ 20.91     $ 19.71     $ 16.82  
    Market price per share $ 25.03     $ 19.80     $ 16.25  
    Diluted earnings per share (QTR) $ 0.66     $ 0.66     $ 0.36  
    Net interest margin (FTE) (QTR)   3.36%       3.33%       3.35%  
    Efficiency ratio (QTR)   66.23%       66.24%       79.79%  

    Financial Results for the Quarter and Nine Months Ended September 30, 2024

    Earnings

    Net income for the third quarter 2024 was $4.6 million, a decrease of $0.1 million, or 1.2%, from the prior quarter, and an increase of $2.0 million, or 77.4%, from the prior year quarter. EPS remained consistent with the prior quarter at $0.66 compared to $0.36 for the prior year quarter.

    Net income for the nine months ended September 30, 2024 was $13.7 million, or $1.95 per diluted share, an increase of $5.3 million compared to $8.4 million, or $1.19 per diluted share, for the nine months ended September 30, 2023.

    Net Interest Income and Net Interest Margin

    Net interest income for the third quarter 2024 was $14.3 million, an increase of $0.2 million from the prior quarter, and a decrease of $0.82 million from the prior year quarter. Net interest income for the nine months ended September 30, 2024 was $43.2 million, a decrease of $0.1 million compared to $43.3 million for the nine months ended September 30, 2023.

    Interest income decreased $0.1 million in the current quarter compared to the prior year quarter, driven primarily by lower average interest earning assets, while interest expense increased $0.8 million compared to the prior year quarter. Net interest margin, on an FTE basis, was 3.36% for the current quarter, compared to 3.33% for the prior quarter, and 3.35% for the prior year quarter.

    The yield earned on average loans held for investment was consistent at 5.83%, on an FTE basis, for both the third quarter 2024 and the prior quarter, compared to 5.67% for the prior year quarter.

    The average cost of deposits was 2.74% for the third quarter 2024, compared to 2.69% for the prior quarter and 2.32% for the prior year quarter. Non-interest bearing demand deposits as a percent of total deposits was 26.0% as of September 30, 2024, compared to 25.9% and 26.9% at June 30, 2024 and September 30, 2023, respectively.

    Non-interest Income

    Total non-interest income for the third quarter 2024 was $3.8 million, a decrease of $0.2 million, or 5.3%, from the prior quarter, and an increase of $3.2 million, or 524.3%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest income was $10.8 million, an increase of $5.4 million as compared to $5.4 million for the nine months ended September 30, 2023.

    The decrease in the current quarter compared to the prior quarter was primarily due to the Company completing the sale of its mortgage servicing rights and recognizing a gain on sale on foreclosed property in the prior quarter.

    The increase in the current quarter compared to the prior year quarter was primarily due to an increase in earnings on bank owned life insurance and a decrease in other real estate owned valuation write-downs, partially offset by a decrease in the gains on sale of mortgage loans in the current quarter.

    Non-interest Expense

    Total non-interest expense for the third quarter 2024 was $12.0 million, a decrease of $0.04 million, or 0.3%, from the prior quarter, and a decrease of $0.6 million, or 4.6%, from the prior year quarter. For the nine months ended September 30, 2024, non-interest expense was $36.6 million, a decrease of $1.2 million as compared to $37.8 million for the nine months ended September 30, 2023.

    The third quarter 2024 efficiency ratio was 66.23% compared to 66.24% and 79.79% for the prior quarter and prior year quarter, respectively. The slight decrease in the current quarter compared to the prior quarter was primarily due to higher net interest margin and lower non-interest expenses in the current quarter.

    Loans

    Loans held for investment decreased $31.8 million, or 2.1%, to $1.5 billion as of September 30, 2024 as compared to June 30, 2024 and decreased $90.2 million, or 5.8%, from September 30, 2023.

    Investments

    Investments increased $17.9 million, or 9.3%, to $209.0 million as of September 30, 2024 compared to June 30, 2024 and decreased $31.5 million, or 13.1%, from September 30, 2023.

    Asset Quality

    Non-performing assets to total loans was 0.58% at September 30, 2024, compared to 0.54% and 0.48% at June 30, 2024 and September 30, 2023, respectively. Non-performing assets totaled $8.5 million at September 30, 2024, compared to $8.1 million and $7.4 million at June 30, 2024 and September 30, 2023, respectively. The increase in non-performing assets in the current quarter compared to the prior quarter is primarily due to a $2.0 million commercial loan relationship moving to non-accrual status and a $1.1 million commercial real estate loan that went to foreclosure during the current quarter.

    In the third quarter 2024, the Company had net loan charge-offs of $0.6 million, or 0.04% of average loans, compared to net loan charge-offs of $2.0 million, or 0.13% of average loans, and $0.1 million, or 0.00% of average loans, in the prior quarter and prior year quarter, respectively. The charge-offs in the current quarter primarily related to one commercial real estate loan and one commercial loan relationship that were adequately reserved for in the prior quarter.

    The Company’s provision for credit losses and unfunded commitments was consistent at $0.5 million for both the third quarter 2024 and the prior quarter, and was $0.1 million for the prior year quarter.

    The allowance for credit losses at September 30, 2024 was $21.9 million, or 1.50% of outstanding loans, and 539.52% of non-performing loans. At June 30, 2024, the allowance for credit losses was $22.0 million, or 1.47% of outstanding loans, and 495.38% of non-performing loans. At September 30, 2023, the allowance for credit losses was $22.5 million, or 1.44% of outstanding loans, and 583.88% of non-performing loans. The allowance for credit losses represents management’s best estimate of expected losses inherent in the loan portfolio and is commensurate with risks in the loan portfolio as of September 30, 2024 as determined by management.

    Deposits

    Total deposits at September 30, 2024 were $1.5 billion, a decrease of $46.7 million, or 3.0%, from June 30, 2024, and a decrease of $76.9 million, or 4.9%, from September 30, 2023. The decrease in deposits at September 30, 2024 as compared to September 30, 2023 was primarily a result of a decrease in demand deposits and brokered deposits.

    Capital

    The Company maintains its “well capitalized” regulatory capital position. At September 30, 2024, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.91%; tier 1 capital to risk-weighted assets 13.66%; tier 1 leverage 11.33%; and common equity to assets 8.09%.

    Pursuant to the Company’s 2019 Repurchase Plan, management is given discretion to determine the number and pricing of the shares to be purchased under the plan, as well as the timing of any such purchases. The Company repurchased 56,692 common shares under the repurchase plan during the first nine months of 2024 at an average cost of $19.51 per share totaling $1.1 million. As of September 30, 2024, $3.9 million remains available for share repurchases pursuant to the plan.

    During the fourth quarter of 2024, the Company’s Board of Directors approved a quarterly cash dividend of $0.19 per common share payable January 1, 2025 to shareholders of record at the close of business on December 15, 2024.

    [Tables follow]

    FINANCIAL SUMMARY
    (unaudited)
    $000, except per share data

      Three Months Ended
      September 30,   June 30,   September 30,
    Statement of income information: 2024   2024   2023
    Total interest income $ 23,819   $ 23,556     $ 23,888
    Total interest expense   9,492     9,384       8,741
    Net interest income   14,327     14,172       15,147
    Provision for credit losses on loans and unfunded commitments   500     457       110
    Non-interest income   3,783     3,995       606
    Investment securities gains (losses), net   8     (15)       3
    Non-interest expense   11,994     12,034       12,569
    Pre-tax income   5,624     5,661       3,077
    Income taxes   1,050     1,033       498
    Net income $ 4,574   $ 4,628     $ 2,579
    Earnings per share:          
    Basic: $ 0.66   $ 0.66     $ 0.36
    Diluted: $ 0.66   $ 0.66     $ 0.36
               
          Nine Months Ended
          September 30,
    Statement of income information:      2024      2023
    Total interest income     $ 71,427     $ 66,748
    Total interest expense       28,181       23,451
    Net interest income       43,246       43,297
    Provision for credit losses on loans and unfunded commitments       726       790
    Non-interest income       10,798       5,384
    Investment securities (losses) gains, net       (7)       18
    Non-interest expense       36,603       37,772
    Pre-tax income       16,708       10,137
    Income taxes       3,049       1,738
    Net income     $ 13,659     $ 8,399
    Earnings per share:          
    Basic:     $ 1.95     $ 1.19
    Diluted:     $ 1.95     $ 1.19

    FINANCIAL SUMMARY (continued)

    (unaudited)

    $000

      September 30,   June 30,   September 30,
      2024   2024   2023
    Key financial ratios:          
    Return on average assets (QTR)   1.00%       1.02%       0.54%  
    Return on average common equity (QTR)   12.87%       13.75%       8.05%  
    Net interest margin (FTE) (QTR)   3.36%       3.33%       3.35%  
    Efficiency ratio (QTR)   66.23%       66.24%       79.79%  
               
    Asset Quality Ratios:          
    Allowance for credit losses to total loans   1.50%       1.47%       1.44%  
    Non-performing loans to total loans (a)   0.28%       0.30%       0.25%  
    Non-performing assets to loans   0.58%       0.54%       0.48%  
    Non-performing assets to assets   0.47%       0.44%       0.39%  
    Performing TDRs to loans $ 636     $ 1,977     $ 74  
    Net Charge-offs to Average Loans (QTR)   0.04%       0.13%       0.00%  
    Allowance for credit losses on loans to          
    non-performing loans (a)   539.52%       495.38%       583.88%  
               
    Capital Ratios:          
    Average stockholders’ equity to average total assets (QTR)   7.80%       7.40%       6.73%  
    Period-end stockholders’ equity to period-end assets   8.09%       7.48%       6.30%  
    Total risk-based capital ratio   14.91%       14.30%       14.20%  
    Tier 1 risk-based capital ratio   13.66%       12.94%       12.54%  
    Common equity Tier 1 capital   10.53%       10.02%       10.09%  
    Tier 1 leverage ratio   11.33%       10.94%       10.43%  

    (a) Non-performing loans include loans 90-days past due and accruing and non-accrual loans.

    About Hawthorn Bancshares

    Hawthorn Bancshares, Inc., a financial-bank holding company headquartered in Jefferson City, Missouri, is the parent company of Hawthorn Bank, which has served families and businesses for more than 150 years. Hawthorn Bank has multiple locations, including in the greater Kansas City metropolitan area, Jefferson City, Columbia, Springfield, and Clinton.

    Contact:
    Hawthorn Bancshares, Inc.
    Brent M. Giles
    Chief Executive Officer
    TEL: 573.761.6100
    www.HawthornBancshares.com

    The financial results in this press release reflect preliminary, unaudited results, which are not final until the Company’s Quarterly Report on Form 10-Q is filed. Statements made in this press release that suggest the Company’s or management’s intentions, hopes, beliefs, expectations, or predictions of the future include “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those projected in such forward-looking statements is contained from time to time in the Company’s quarterly and annual reports filed with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this communication, and the Company disclaims any obligation to update any forward-looking statement or to publicly announce the results of any revisions to any of the forward-looking statements included herein, except as required by law.

    The MIL Network

  • MIL-OSI: Banco Itaú Chile Announces Third Quarter 2024 Management Discussion & Analysis Report

    Source: GlobeNewswire (MIL-OSI)

    SANTIAGO, Chile, Oct. 30, 2024 (GLOBE NEWSWIRE) — BANCO ITAÚ CHILE (SSE: ITAUCL) announced today its Management Discussion & Analysis Report (“MD&A Report”) for the third quarter ended September 30, 2024. For the full MD&A Report, please refer to the following link:

    https://ir.itau.cl/MDAQ32024

    On Monday, November 4, 2024, at 11:00 A.M. Santiago time (9:00 A.M. ET), the Company’s management team will host a conference call to discuss the financial results. The call will be hosted by Claudia Labbé Montevecchi, Head of IR and Chief Sustainability Officer, and Matías Valenzuela Barrenechea, Head of FP&A, Capital and IR.

    Conference Call Details:

    Online registration: https://registrations.events/direct/Q4I613620

    All participants must pre-register using this link to join the conference call. Upon registering, each participant will be provided with details to connect to the call and a registrant ID.

    Webcast:

    The webcast will be available through the following link:

    https://events.q4inc.com/attendee/539765194

    Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. Following the event, the event will be available in the same link.

    Telephone and Virtual Q&A session:

    The Q&A session will be available for participants connected through the conference call and through the webcast, where attendees will be allowed to type in their questions – we will read and answer selected questions verbally.

    Investor Relations – Itaú Chile

    IR@itau.cl / ir.itau.cl

    The MIL Network

  • MIL-OSI NGOs: Hurricane Unpreparedness in the Caribbean, Disaster by Imperial Design

    Source: Council on Hemispheric Affairs –

    St. Lucia during and post Hurricane Beryl

    by Tamanisha J. John

    Toronto, Ontario

    Whenever a hurricane hits in the Caribbean, people rush to point out that it is an indicator of “disaster capitalism” and/or that “disaster capitalism” will surely come. While I agree that non-governmental organizations (NGO) and other organizations profit from disasters in the Caribbean region, and have a long history of doing so, I am less inclined to believe that “disaster capitalism” exists there unless one takes an ahistorical view. Disaster capitalism in the Caribbean can only exist in those states whose revolutions have been defeated and/or undermined, but overall, there has been no massive structural changes in these states. The region is already, and historically has been, ultra-accommodating to capitalism. Disaster capitalism refers to “the use of the shock of disastrous situations to dismantle state participation in the economy and to implant structural changes in the form of laissez-faire capitalism” (Schwartz, 2015, p. 311). To claim that disaster capitalism will come to the Caribbean region would thus indicate a marked period of state participation in the Caribbean that provided for the peoples living there.

    Instead, all states’ independence was marked by US interventions given the ideological and economic struggle of the Cold War and the neoliberal turn, which attacked state input and intervention in the market. Caribbean states’ independence was marked by debt and lack of access to capital. It occurred alongside financial institutions’ proliferation of structural adjustment policies whose implementation was necessitated for states in the region to acquire access to loaned capital (John, 2023). Though struggles for nationalizations did occur – in industries like mining, banking, insurance, and others – harsh retaliations from the US and Canada made them unsustainable (John, 2023, p. 134) – with no real reductions in foreign ownership “despite the changes in legal forms of ownership” (Thomas, 1984, p. 168-9). Thus, large foreign ownership of resource extractive industries and financial institutions remained a feature of Caribbean societies when they became independent – just as it also marked the colonial landscape in these spaces. The foreign players that controlled corporations, land, and industries in these countries did change somewhat, but this was also typical with imperial rivalries (Caribbean states themselves having been subject to multiple phases of European colonization throughout their histories).

    It was Walter Rodney, who in his 1972 text How Europe Underdeveloped Africa, put forward a critique of the thesis that capitalism had to develop prior to ushering in socialism – which was Marx’s estimation – given that this thesis went against the trajectory of capitalist development in both the Caribbean and in Africa, where the capitalist logics of extraction with disregard for these societies left them in almost permanent states of underdevelopment, that only physical and ideological anti-imperialism could rectify. One of the consequences of this underdevelopment, I argue, is the lack of hurricane preparedness. The logic of “getting people back to work” and “security” in these colonized spaces have always trumped wellbeing for the people and environment – precisely because the people in them have always been categorized as disposable, while the natural resources have been reduced to instruments for the generation of profit. This ideology was true under European empires, and now true under US hegemony in the region – where foreign imposing actors continue to have more say on preparedness, wealth distribution, land ownership, security, economic development, and entrepreneurship (innovation).

    In a Region Prone to Hurricanes, Unpreparedness is an Ideological Policy Choice

    “Hurricanes are not random phenomena. Atmospheric conditions and physics limit their movement” (Schwartz, 2015, p. xvi). In the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States, we have come to expect a lack of preparedness whenever hurricanes strike. Though Hurricane Beryl’s strength and early formation in June was unprecedented for the Caribbean’s hurricane season, what is precedent is the lack of regional preparedness for hurricanes in a region prone to have them – no matter when these hurricanes form. Forming around June 25th it was clear that Beryl would break the record for earliest formed Category 5 hurricane by the time that it made way into the Caribbean. This was due to the unusually warm temperatures registered in both the Atlantic Ocean and the Caribbean Sea as early as March, various heatwave advisories and warnings were placed on the region acknowledging that the summer 2024 would be “hotter than usual” (Loop News 2024). When news of Beryl’s formation first spread, people expected the worst given unusually hot increases in temperatures (+4°c) for the region so early in the year.

    Making landfall as a Category 4 hurricane in one of the smaller islands of Grenada, Carriacou, on July 1st Beryl would destroy 95% of the infrastructure there before strengthening to a Category 5 hurricane. It would bring even worse devastation to a smaller island of St. Vincent and the Grenadines, Mayreu, where reports proclaim that island to have nearly been “erased from the map” (AP News 2024). In its Caribbean path, Beryl brought devastation as a Category 5 and 4 storm to Grenada, St. Vincent and the Grenadines, Dominica, Tobago and northern Venezuela, Barbados, and the southern portion of Jamaica. In its North American path, Beryl brought devastation as a Category 2 and 1 storm to Mexico’s Yucatan Peninsula, before making landfall in Texas and Louisiana. Thereafter the storm was experienced elsewhere in the form of a tropical cyclone and massive downpours of rain. Beryl eventually tapered off in Canada on July 11th where it left heavy rain that caused massive flooding (due to Canada’s neglected flood systems). Beryl’s death toll currently stands at 33, with the storm causing 6 deaths “in Venezuela, 1 in Grenada, 2 in Carriacou, 6 in St. Vincent and the Grenadines, 4 in Jamaica […] at least 11 in the Greater Houston area, 1 in Louisiana, and 2 in Vermont.” (TT Weather Center 2024)”

    Now that the storm has passed, people in impacted areas must contend with the loss of life, destruction of physical infrastructure – including homes and businesses, the lack of food and other basic products, as well as the lack of power and electricity. While contending with loss, victims of this severe weather will start to question the inability of their governments – rich or poor – to adequately address the post hurricane scenarios that they find themselves in repeatedly. This discontent with unpreparedness is now prevalent even before the hurricane season itself has ended.

    A Note on Cuba’s Hurricane Preparedness, The Importance of Ideology

    One of the most infuriating elements of hurricanes in this region is the “disaster” narratives that come after them, which falsely assert the “naturalness” of unpreparedness given the chaos of the disaster itself – when unpreparedness is, in fact, an ideological policy choice. Poorer states in this region are shackled by an unwillingness of the state to drastically deviate from “larger institutional constraints from which the logic of colonial administration derived its central purpose” and are inherited (Pérez Jr., 2001, p. 133-4).  On the other hand, richer states are shackled by their individualist ideologies which offer “vigorous critiques of government expenditure” which leave preparedness up to “market-driven, neoliberal economic policies,” that turn state and local responsibilities over “to charitable institutions, to churches, or to the victims themselves and their communities” (Schwartz, 2015, p. 300).

    When looking at states in the Western Hemisphere which frequently experience hurricanes, Cuba stands out as a state which tends to fare better in the post hurricane environment given that state’s policies of shared responsibility towards its people. This even as Cuba has been subjected to a draining embargo and sanctions which places a burden on economic growth there. Yet still, Washington maintains that Cuba’s successful hurricane response and disaster mitigation strategies amount to “the exchange of liberty for effectiveness” (Schwartz, 2015, p. 293-4). Though couched in this language of ‘liberty,’ mitigating the loss of life ensures one’s longtime enjoyment of liberty – as opposed to dying for ‘liberty’s’ sake during a hurricane (or other disasters like the COVID-19 pandemic). For example, Cuba’s hurricane preparedness in relation to the US stands out. Cuba’s disaster response compares a bit more favorably to the Federal Emergency Management Agency (FEMA). FEMA “oversaw 15 times more deaths from hurricanes than Cuba from 2005 — the year that Katrina struck New Orleans — to 2015” (Wolfe, 2021).

    This is because Cuba’s disaster preparedness is proactive, prioritizing human life and well-being given the ideological foundations of its revolution that transformed political, social, economic, and environmental relations in the country. US disaster preparedness on the other hand prioritizes profit at the expense of people – it is reactionary and reactive, often blaming victims of hurricane disasters for the lack of state preparedness.

    The Caribbean Hurricane as Natural Phenomena, the Disaster as Colonial Inheritance

    Hurricanes are not experienced equally amongst states in the Western Hemisphere. People living on Caribbean islands tend to experience the worst effects of hurricanes when they do strike, and it is also people on these same islands which tend to have less resources to recover from the impacts of a hurricane. Though Cuba’s hurricane preparedness is commendable, infrastructure and livelihoods there are still devastated by hurricanes. Many of the Caribbean islands are geographically located “in the Atlantic Hurricane Alley, [and] the region is sensitive to large-scale fluctuation of ocean patterns that are disrupted by warming seas” (Zodgekar, et. al 2023, p. 321). Additionally, populations and infrastructure on these islands tend to be concentrated on the coast – a colonial holdover – given that European “settlements were established directly in the path of oncoming hurricanes (Pérez Jr., 2001, p. 8). Initially due to lack of knowledge, this trend remained unchanged amongst Europeans given the need to export what was being extracted from these islands using the ports developed on the coasts.

    Historically, environmental disasters (hurricanes, earthquakes, and droughts) throughout the 1600s-1900s would consolidate land amongst the wealthiest European settlers on different islands and would foil settler attempts to diversify agriculture on islands. This was because wealthy settlers could more easily recover and rebuild what was lost in the aftermath of a hurricane, due to their ability to access credit from Europe and resort to using their own fortunes (wealth and networks). On the other hand, smaller settlers unable to rebuild and recover from hurricane losses had a harder time accessing credit – and creditors within Europe viewed loaning to smaller settlers as a financial burden. If these smaller settlers were already in debt, the passing of a hurricane meant that they would either have to work off debt by giving all that they had to a creditor in Europe, or one on the island, by entering into a credit arrangement with a wealthier plantation owner (Mulcahy, 2006, p. 86-8). These losses were quite frequent, as it is known that these phenomena made it so that some European creditors in Europe would amass plantation wealth, even if they themselves had never visited a Caribbean island or formally engaged in plantation life (Mulcahy, 2006, p. 87-8).

    These dynamics, in part, explain the predominance of the cultivation of sugar (and rice in what would become the South-Eastern United States) within the region, and even then, “plantership […] necessitated deep pockets (or strong credit) to survive its constant and rapid fluctuations” (Mulcahy, 2006, p. 66). “Without access to credit, smaller farmers were forced to sell their lands to wealthier and more secure planters, who thereby expanded their landholdings and production capabilities” (Mulcahy, 2006, p. 86). This consolidation of larger and wealthier plantations also made other concerns arise, namely the depopulation of settlers from the islands, as debtors opted to leave in the aftermath of storms, and later the transfers of estates to owners outside of the colonies (Mulcahy, 2006, p. 86-7). In essence, settlers’ decision to flee in the wake of, or after, a hurricane shaped population dynamics and demographics in colonies. They also shaped the lack of hurricane preparedness in colonies. Wealthier planters on the islands, and Europeans in Europe, who could suffer from hurricane losses (hurricanes themselves not being guaranteed every season), rebuild afterwards, and recover previous losses given the profit from plantation trade goods – had less incentives to plan ahead if they were not as risk of losing everything they had amassed in their life after a hurricane.

    In smaller island states’, where plantation systems were heavily disrupted or stunted in growth due to geography of the land (especially in the Lesser Antilles), even fewer attempts were made to develop any infrastructure which could protect against storms (Mulcahy, 2006). To be clear, this does not mean that these landscapes were spared from destruction which made the impacts of hurricanes worse: deforestation, overgrazing, and over-cultivation of Caribbean islands during centuries of European colonialism that included dispossession of indigenous groups and the enslavement of Africans, also impacted how hurricanes came to be experienced. While planter consolidation, rebuilding, and profits have so far been underscored here – the elephant in the room is that all of this occurred alongside the massive death toll of enslaved Africans who suffered the most both during and after the passage of a hurricane. Outside of the high death tolls for enslaved Africans on the islands, once a hurricane passed, the ultimate goal in the colonies became the reestablishment of ‘law-and-order’ given fears of slave revolt in the wake of destruction (Mulcahy, 2006; Schwartz, 2015). Although slave-revolts post hurricane remained a consistent fear of settlers, slave revolts did not occur after a hurricane due to its disproportionate toll on enslaved populations who were “often the most debilitated by the shortage of food and the diseases that followed the hurricane” (Schwartz, 2015, p. 49).

    Caribbean Indigenous Peoples Blamed European Imperial Settlement for Increased Hurricane Devastation

    From historical accounts, we know that the Spaniards were the first Europeans to experience a hurricane within the Western Hemisphere during Columbus’s second voyage in 1494/5 (Pérez Jr., 2001; Mulcahy, 2006; Schwartz, 2015). The hurricane experience was unlike anything that Europeans had observed in Europe, and it was from this experience that they sought out intel from the indigenous peoples in the Caribbean. For Caribbean indigenous peoples, “the great storms were part of the annual cycle of life. They respected their power and often deified it, but they also sought practical ways to adjust their lives to the storms. Examples were many: The Calusas of southwest Florida planted rows of trees to serve as windbreaks to protect their villages from hurricanes. On the islands of the Greater Antilles—Cuba, Jamaica, Hispaniola, and Puerto Rico—the Taino people preferred root crops like yucca, malanga, and yautia because of their resistance to windstorm damage. The Maya of Yucatan generally avoided building their cities on the coast because they understood that such locations were vulnerable to the winds and to ocean surges that accompanied the storms” (Schwartz, 2015, p. 5). Further, Indigenous representations of hurricanes were overall accurate and are similar to modern meteorological mapping of these storms. Europeans also learned from Caribbean Indigenous groups that you could “track” when a hurricane would strike. These developments meant that Indigenous Caribbean knowledge of the hurricane was not only limited to the occurrence of storm, but also meant that Indigenous Caribbean societies factored in preparedness for hurricanes within their worldviews.

    Given Caribbean Indigenous knowledge of hurricanes, it is these same people who also recognized that the changes to the landscape by European colonialism contributed to the increased devastation caused by hurricanes between the 1600s-1900s. As such, English colonists who would also come to experience the hurricanes report that “several elderly Caribs stated that hurricanes had become more frequent in recent years, which they viewed as a punishment for their interactions with Europeans” and the main “alteration that our people attribute the more frequent happenings of Hurricanes” (Mulcahy, 2006, p. 35). What these settler accounts reveal about Indigenous Caribbean peoples is what Schwartz notes in his 2015 book, Sea of Storms: A History of Hurricanes in the Greater Caribbean from Columbus to Katrina, that although “hurricanes were a natural phenomenon; what made them disasters was the patterns of settlement, economic activity, and other human action” (p. 74). Nonetheless, colonial ecological and environmental destruction in the Caribbean – which increased the felt impact of hurricanes – remained worthwhile for Europeans given the high profits to be made from export crops, which kept people there to rebuild after hurricanes. Mulcahy in his 2006 book, Hurricanes and Society in the British Greater Caribbean, 1624 – 1783, writes “European settlers and colonists were engaged in a never-ending struggle against nature in their quest for wealth” (p. 93)

    Additionally, the European empire’s responses to hurricanes also influenced decisions to stay. Because colonial societies in the Caribbean were stratified along racial and other social hierarchies – hurricanes presented opportunities for large scale consolidation of plantation property on islands which privileged wealthy plantation owners. Additionally, smaller merchants and plantations which could not recover post hurricane were sometimes forced to transfer ownership to merchants in Europe – who never had to visit these properties while amassing wealth from them thereafter (Mulcahy 2006, p. 88). Disaster relief to the colonies thus came to be historically designed as a way for further economic integration, and “assistance to the colonies in times of disaster would bring wealth and affluence to the empire” (Mulcahy 2006, p. 162). Disaster assistance – while increasing inequalities between all peoples in the colonies – did overall benefit imperial capitalism and patriotism within the empire, amongst loyal subjects, especially amongst elite classes, who received the majority of aid based on their losses.

    Banking on Hurricanes and Absolving Empire of Responsibility: Debates in Europe

    While debates in Europe raged regarding enriching the already wealthy within the colonies with disaster relief – these debates did not change the post-hurricane reality of which those most needing of aid (Indigenous groups, enslaved Africans, indentured workers, small merchants, and small planters) were the least likely to receive it, which was true across all of the different European colonies (Pérez Jr., 2001; Mulcahy, 2006; Schwartz, 2015). “Vulnerability to the hurricane itself was a function of the material determinants” around which colonial social hierarchies were arranged (Pérez Jr., 2001, p. 111). In Europe, debates focused primarily on creditors, so it was argued that the wealthy were more primed to repay creditors when/if they received disaster relief after a hurricane. On the other hand, the proliferation of print news meant that individuals and organizations (e.g., the Church) could send aid to the colonies after disaster struck. Previously, when disaster struck it would take months for news to reach those in Europe, even as the disruptions in trade were more readily felt. Moreover, it was hard for the public in Europe to understand the scale of destruction caused by hurricanes in the Americas, given that this kind of natural disaster did not occur in Europe.

    With the establishment of print media, the destruction caused by hurricanes and the damages that they did to plantation systems – which would require a lot of assistance to recover – was made much more readily available to people who could empathize and assist in recovery efforts. Within the British empire, some newspapers even published who would send what amount and type of post disaster relief to the colonies, which undoubtedly contributed to the charitable giving of some wealthy individuals (Mulcahy 2006; Schwartz 2015). Given that the voyage from Europe to the various colonies was long, there was illegal trading between different colonies to provide relief to one another faster – including with the United States, even after the American Revolution.

    It is this colonial history which still shapes the lack of hurricane preparedness in a region prone to have them. Thus, most scholars on hurricanes in the region continue to highlight the colonial and slave legacies which have shaped regional unpreparedness to hurricanes. Though the United States is a wealthier country today with the capabilities to develop hurricane preparedness – even if only within its own borders – it is elite US security interests and ideological leanings which have prevented it from doing so. Additionally, historians like Schwartz (2015) make a compelling argument that “the United States, by its military and political expansion into the Caribbean after 1898, its foreign policy objectives in the Cold War, and through its advocacy of certain forms of capitalism joined with its ability to impose its preferences on international institutions, has also influenced the way in which the whole region has faced hurricanes and other disasters” (Schwartz, 2015, p. xviii-xix). This implies that the United States – like the European empire’s past – also has a stake, or interest, in regional hurricane unpreparedness for both political, economic, and security objectives.

    US Imperial Extensions in the Caribbean, Impact on Hurricane Preparedness

    From this overview of the history of hurricanes in the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States a few things become clear: hurricane preparedness has never been a concern for colonial capitalist development. Hurricane disasters came to be recognized as extremely ruinous to those occupying the lowest rungs of colonial societies, aid was given to the wealthy people who were understood as being able to put aid to better usage, and disaster situations consolidated preferred modes of accumulation in otherwise “chaotic” and uncivilized landscapes. Thus, outside of patriotic tales and misremembering of the storm events, historically “hopes of communal solidarity” in the wake and aftermath of hurricanes “were either naïve or disingenuous [… with] social divisions ha[ving] always shaped the responses to hurricanes (Schwartz, 2015, p. 68-9). Given strict colonial hierarchies, the maintenance of order – to dissuade slave revolts and looting – were always preeminent concerns of empires and those with wealth and power. This is important to plainly state, given that little has changed in today’s experience with hurricanes in the region.

    Today’s granting of conditioned relief and temporary debt removals still serve to subordinate Caribbean states to the Western capitalist system and the US security apparatus. Those areas hardest hit by storms and less likely to receive aid, continue to be occupied by the poor populations that are largely non-white/Euro peoples. Settlements on islands continue to be concentrated on coasts, where the tourist industry quickly rebuilds its infrastructure post-hurricane and are the first to receive aid. This at once dispels the myths that recovery is impossible, as it happens in the large coastal areas owned and controlled by foreign hotel chains and entities which quickly beckon tourists back to their “lovely beaches” less than a day after a hurricane. Preparedness for hurricanes in the Caribbean islands are “subordinated to political, military, or what today would be called ‘security’ concerns” (Schwartz, 2015, p. 276). I would include economic and ideological concerns as well. These latter concerns are maintained by the wealthiest states in the hemisphere – the United States and Canada.

    Hurricane Flora in the 1960s claimed the lives of over 5,000 Haitians under the Duvalier dictatorship – which failed to even warn Haitians about the arrival of the hurricane so that disorder against Duvalier would not take over the country. The lack of preparedness was accepted by both the United States and Canadian governments given their fear of communism in the Caribbean region. Thus “unlike Haiti’s U.S.-backed right-wing president, François Duvalier, Castro’s Communist government ordered residents living in the hurricane’s projected path to evacuate their homes, and if they were unable, to stay and prepare appropriately for the storm.” This preparation and the establishment of Cuba’s defense system in 1966 accounted for significantly less deaths (1,157) in Cuba (Wolfe, 2021). Today, unpreparedness remains a feature in most Caribbean countries that put corporate interests and the interests of the US (and its allies) security objectives above the prioritization of human life and livelihoods in the Caribbean.

    As further illustration of this point, even though the 2004 Hurricane Jeanne hit Cuba a lot harder than Haiti – killing 3,000 Haitians – no Cuban lives were lost due to the hurricane (Wolfe, 2021). The historical and present-day case of Haiti is both informative and a cause for worry as we expect future hurricane seasons to be quite bad. Not only is Haiti a fully privatized economy (Wilentz, 2008); but it is also one that has been under the tutelage of the CORE group – a group composed primarily of foreign ambassadors from the US, France, Canada, Spain, Brazil, Germany, and a few representatives from the European Union (EU), the United Nations (UN), and the Organization of American States (OAS) – for over two decades. The CORE group’s tutelage of Haiti has been exceptionally negative, as these states and their ambassadors secure their own corporate and labor interests in the country at the expense of that state’s democracy and national sovereignty (Edmonds, 2024). Thus, disaster preparedness in Haiti has never been an agenda item – and has only gotten worse as those governing the country continue to benefit from political, economic, and environmental disasters there. Present day armed intervention and occupation in Haiti, further makes it unlikely that Haiti will be able to weather the next hurricane season.

    Hurricane Unpreparedness, A Note on Canada

    It is important to remind here that although much is said about US imperialism and security concerns trumping human rights and pro-people development in the region – Canada is not exempt from this critique. For instance, although Canada touts that its military base (OSH-LAC) in the Caribbean is a “support hub” – that also seeks to assist states experiencing disasters, of which hurricanes are included – in 2017 when Category 5 Hurricane’s Irma and Maria wreaked havoc on Dominica, OSH-LAC warships monitored the situation but provided no on the ground help to Caribbean peoples there (John, 2024, p. 12-3). The Canadian government also enacted restrictive migration policies towards those fleeing from the hurricane and its damages. This practice would be repeated by Canada again in 2019 during the aftermath of Hurricane Dorian in The Bahamas (John, 2024, p. 12-3). Given that I am currently living in Canada, it is important to point out that Canada is a state that frequently touts progressive rhetoric on climate change, resiliency, and disaster preparedness in the Caribbean region. However, Canada’s actions continue to render the Caribbean region unprepared alongside the actions of the US.

    In the 2023 Canada-CARICOM summit hosted by Canada, Caribbean prime ministers sought to place climate issues and climate infrastructure at the top of the agenda – however, Canada was mainly concerned with getting support for an armed intervention in Haiti (Thurton, 2023). Haiti remains the most unprepared country in the Caribbean when disasters hit, which made Canada’s insistence on armed intervention and occupation even more tone deaf. Haiti’s unpreparedness is directly tied to US, Canada, France, and CORE group members tutelage and rejection of Haitian democracy ever since that country’s integration into the Western capitalist system via US occupation. These examples illuminate the fact that the wealthier states in the Western Hemisphere, namely the US and Canada, actively disregard the lives of those impacted by hurricanes and other natural disasters to their south – while first and foremost safeguarding their own economic, ideological, and security priorities. In my analysis of ‘south,’ the Caribbean, the Yucatán Peninsula, the Gulf of Mexico, and the South-Eastern United States are included.

    Conclusion

    Ideologically, the promotion of capitalism, colonialism, and imperialism in the Caribbean (of which the South-Eastern United States, the Gulf of Mexico and Yucatán Peninsula is included) continues to pose an obstacle to disaster preparedness in a region prone to hurricanes.  More importantly, the promotion of these harmful ideologies often comes at the expense of human life. Nothing makes this clearer than the fact that it is the revolutionary state – which is also the most heavily economically sanctioned state in the region – Cuba, that continues to be the most prepared state in times of disaster. This stands in stark contrast to other Caribbean states and to wealthier states, like the US, which mandate regional unpreparedness. Today, while we await (but hope that it is not so) a bad hurricane season, the Caribbean region is more militarized than it has been since the end of the 20th century and beginning of the 21st century. Militarization is directly due to US security objectives that aim to keep China’s investments (thus competition) out of the region. This policy is backed by Canada, which seeks to advance its own corporate interests in the region.

    The US and Canada continue to militarize the Caribbean region, exacerbating climate change and neglecting the urgency of developing resiliency infrastructure. In fact, militarization in the Caribbean region today (and in Africa and Asia) occurs alongside the tightening of both the US and Canadian borders given hostile narratives towards immigrants and immigration within them. This even with the region’s long history (as has been pointed out) of people fleeing the region both during and after a hurricane. All of which indicates that while these states are undoubtedly deepening the climate crisis with their global “security” endeavors, they view the people harmed and negatively impacted by their actions as disposable.

    Postscript

    Three months after the writing of this document, 5 hurricanes – Debby, Ernesto, Francine, Helene, and Milton – have impacted peoples and infrastructure in the south. The 2024 Atlantic Hurricane season thus far (October 11th, 2024) has taken almost 400 lives – with the actual figure being uncertain, given that the damage from Milton is still being assessed. Each storm is estimated to have cost between $80 – $250 billion (USD) in damages across the region. While governments talk about costs and recovery efforts to get economies “back on track” and provide people with temporary and conditional aid – which is the post disaster norm – we are presented with an uncomfortable, yet undeniable fact: states in the region, whether by colonial inheritance or commitment to capitalism, are banking on unpreparedness continuing well into the future. We must be proactive in defeating this dangerous ideology that places people’s lives, livelihoods and the physical environment at stake; while perpetuating, in its aftermath, conditions that make it so.

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    Wolfe, Mikael. 2021. “When It Comes to Hurricanes, the U.S. Can Learn a Lot from Cuba: Cuba Devised a System That Minimizes Death and Destruction from Hurricanes.” The Washington Post. https://www.washingtonpost.com/outlook/2021/09/01/when-it-comes-hurricanes-us-can-learn-lot-cuba/.

    Zodgekar, Ketaki, Avery Raines, Fayola Jacobs, and Patrick Bigger. 2023. A Dangerous Debt-Climate Nexus. NACLA Report on the Americas. https://doi.org/10.1080/10714839.2023.2247773.

    Photo Credit: InOldNews, by Delia Louis
    Description: Depicts St. Lucia during and post Hurricane Beryl
    License info: Creative Commons taken from Flickr.

    About the author: Tamanisha J. John is an Assistant Professor at York University in the Department of Politics

    MIL OSI NGO

  • MIL-OSI USA: 10.29.2024 Sen. Cruz, Rep. Roy Demand Answers from Biden-Harris Administration on Growing Presence of Tren de Aragua Gang in Texas, U.S.

    US Senate News:

    Source: United States Senator for Texas Ted Cruz
    WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas), member of the Senate Judiciary Committee, and Rep. Chip Roy (R-Texas-21) sent a letter to Department of Homeland Security Secretary Alejandro Mayorkas demanding answers about the growing presence of the violent Venezuelan gang Tren de Argua (TdA) in Texas and across America.
    In the letter, the Texas lawmakers wrote, “Alleged TdA affiliates have committed heinous crimes against Americans. The two Venezuelan illegal aliens charged with raping and murdering 12-year-old Jocelyn Nungaray before tossing her dismembered body into a Houston bayou, both of whom were released under your tenure after they unlawfully crossed into Texas earlier this year, are believed to have ties to TdA. Further, on October 4, 2024, authorities announced the arrest of three additional Venezuelan illegal aliens in Northwest Dallas in September for their alleged involvement in a robbery of a woman who was tied-up and told that her fingers would be cut off if she did not comply during the crime.
    “Additionally, TdA has subjected illegal aliens smuggled into the U.S. to sex trafficking. The South American ring is forcing illegal alien women into prostitution in eight states, including Texas, to pay off their smuggling debts, rendering them vulnerable to all forms of abuse.

    “Our law enforcement community and the Texans they serve deserve answers on the scope of infiltration of TCOs under this administration”
    Read the full letter here or below:
    Dear Secretary Mayorkas:
    The Biden-Harris administration has imported Venezuelan illegal aliens at an alarming rate, allowing criminals – including the gang Tren de Aragua (TdA) – to gain a foothold in Texas and communities throughout the United States. Texans and the American people deserve better.
    The massive increase in crime committed by Venezuelan illegal aliens is a direct result of this administration’s purposeful policies. Since October 2022, 117,000 Venezuelans have been paroled into the U.S. via the fraud-ridden Cuba, Haiti, Nicaragua, and Venezuela (CHNV) program. Further, since January 2021, nearly 750,000 Venezuelans have been encountered at the southern border– many of whom have been released into the U.S. interior.
    As you know, on October 5, 2024, law enforcement executed “Operation Aurora,” a sting targeted at TdA members occupying a San Antonio apartment complex that had been forcefully taken over by the violent gang, similar to the situation recently seen in Aurora, Colorado. Authorities arrested 19 Venezuelan illegal aliens , four of whom are confirmed TdA members, after receiving numerous complaints of TdA seizing vacant apartment units for drug-related crimes and human trafficking, and threats to apartment employees. One of the arrested suspects was reportedly a TdA gang leader. Moreover, 15 of the 19 detained individuals had immigration detainers placed on them by Homeland Security Investigations (HSI) for likely for removal from the U.S.
    Thankfully, the raid concluded without incident. The task force, comprised of law enforcement officials from the San Antonio Police Department (SAPD), the Texas Department of Public Safety (DPS), the Federal Bureau of Investigation, Border Patrol, and HSI, should be commended for their efforts. While the apprehension of TdA members and other foreign criminals is a welcome development, this dangerous incident, and similar incidents, may have been avoided if DHS took appropriate action to secure the border and stop the mass release of illegal aliens into our communities.
    Indeed, this is not the first incident involving TdA in Texas. On September 26, 2024, reports revealed DPS arrested over 20 suspected TdA members at an El Paso hotel for human smuggling, prostitution, and narcotics possession, among other crimes. On September 19, 2024, HSI and SAPD reportedly arrested two individuals linked to TdA for their involvement in a firearms smuggling operation. In March 2024, more than 100 suspected TdA members were arrested for their involvement in charging at National Guardsmen and DPS troopers at the El Paso border in March 2024.
    Alleged TdA affiliates have committed heinous crimes against Americans. The two Venezuelan illegal aliens charged with raping and murdering 12-year-old Jocelyn Nungaray before tossing her dismembered body into a Houston bayou, both of whom were released under your tenure after they unlawfully crossed into Texas earlier this year, are believed to have ties to TdA. Further, on October 4, 2024, authorities announced the arrest of three additional Venezuelan illegal aliens in Northwest Dallas in September for their alleged involvement in a robbery of a woman who was tied-up and told that her fingers would be cut off if she did not comply during the crime.
    Additionally, TdA has subjected illegal aliens smuggled into the U.S. to sex trafficking. The South American ring is forcing illegal alien women into prostitution in eight states, including Texas, to pay off their smuggling debts, rendering them vulnerable to all forms of abuse.
    TdA members have also demonstrated brazen indifference to public safety officials. On July 30, 2024, Border Patrol issued a bulletin warning that TdA gave the “green light” to its over 1,000 members to fire on and attack law enforcement. In response to the gang’s proliferation and threat to the public, the state of Texas has heightened its security measures amid the federal government’s failure to secure the border from foreign crime syndicates.
    Our law enforcement community and the Texans they serve deserve answers on the scope of infiltration of TCOs under this administration. As such, we request you respond to the following questions by October 31, 2024:
    Please provide a full accounting of the number of Venezuelans released into the country via CHNV, other forms of parole, release after apprehension at the border, or otherwise, including:
    The last known whereabouts of each Venezuelan, broken down by state.
    The number of Venezuelans released into the United States without identification documents and their last known whereabouts, broken down by state.
    The number of released Venezuelans that have committed a crime in the United States, and their last known whereabouts, broken down by state.
    The number of released Venezuelans with known or suspected gang affiliations and their last known whereabouts, broken down by state.
    The number of released Venezuelans that are known or suspected members of TdA.
    The number of Venezuelans paroled into the United States that have since been removed, and the reason for their removal.
    The number of Venezuelans released from the southern border that received a Notice to Appear.
    The number of Venezuelans released from the southern border that received a Notice to Report.
    How many criminal aliens has DHS arrested in the United States as of January 2021? Please include the following information:
    Date of arrest, location of arrest, date of the alien crossing the border, date of release from the border, gang affiliation (if applicable), criminal charges received, previous criminal history, country of origin, and current status (is the alien detained at an ICE facility, on the non-detained docket, or was removed from the U.S.).
    How many of these criminal aliens have charges and/or convictions for human trafficking, child exploitation, or forced labor at the federal or local level?
    Of all criminal aliens arrested in Texas, how many have a detainer placed by ICE?
    What future operations does DHS and/or ICE plan to conduct to mitigate TdA’s presence in Texas?
    What other transnational criminal organizations are present in Texas that DHS has detected?
    What policies or action has DHS implemented to recruit the cooperation of sanctuary jurisdictions in Texas that limit or refuse to cooperate with federal immigration detainers and/or authorities?
    Sincerely,
    /X/

    MIL OSI USA News

  • MIL-OSI USA: Cassidy Discusses Infrastructure in Acadia Parish, Tours Catholic Charities in Lafayette

    US Senate News:

    Source: United States Senator for Louisiana Bill Cassidy
    LAFAYETTE – Yesterday, U.S. Senator Bill Cassidy, M.D. (R-LA) spoke before the Rotary Clubs of Crowley and Rayne, and hosted a rural community funding summit in Rayne, to highlight the opportunities available for communities in Acadia Parish to benefit from his Infrastructure Investment and Jobs Act (IIJA).
    “Part of my goal in writing the Bipartisan Infrastructure Bill was to help growing communities in Acadiana prevent flooding, improve highways, fix water and sewage problems, and connect their towns to high-speed broadband,” said Dr. Cassidy. “Working in partnership with mayors and police jurors, we help get them the resources to meet these needs and keep making Acadiana a place where our children want to stay.”
    Since the IIJA was passed in August of 2021, millions of dollars have been spent on projects that benefit residents of Acadia Parish, including over $54.8 million for slab repair in the I-10: Jeff Dav PI-I-49 project. Additionally this year, over $349,000 was awarded to install landslide perimeter fencing and access gates at the Le Gros Memorial Airport in Crowley, and over $928,000 was granted for flood mitigation elevations in the parish. Surrounding parishes have also received money to make improvements to their infrastructure.
    Cassidy has visited Acadiana multiple times, including in July to Acadia Parish to meet with mayors from Crowley, Duson, Elton, Estherwood, Kaplan, Lake Arthur, Maurice, Rayne, Vinton, and Welsh. At both the Rotary meeting and the rural community funding summit, he was welcomed by local leaders.
    “We appreciate Senator Cassidy visiting us today and speaking to the Crowley and Rayne Rotary Clubs, along with the Crowley Lions Club and others,” said Ms. Katie Chiasson, member of the Crowley City Council and board member for the Rotary Club of Crowley. “It was good to get updates from him on infrastructure, insurance and other important issues.”
    “I appreciate Senator Cassidy bringing representatives of federal and state agencies to our region to discuss how mayors, police jurors and city council members can access the funds from his infrastructure bill,” said Mr. Chuck Robichaux, mayor of Rayne. “Our constituents want better roads, cleaner water and more jobs in our communities. We also want to make sure that the benefits of high-speed broadband come to Acadiana. I appreciate Senator Cassidy’s leadership on these topics and look forward to working with him in the future.” Robichaux co-sponsored the rural community funding summit with the Louisiana Municipal Association, the Louisiana Housing Corporation and LITACorp.
    Later, Cassidy toured Catholic Charities of Acadiana in Lafayette, including visiting their regional disaster warehouse where they store supplies that victims of floods and hurricanes need to survive. Cassidy also visited their St. John Street Campus, where he learned about their efforts to provide accommodations for the homeless and find permanent housing for homeless veterans.
    “Catholic Charities in Lafayette helps the homeless and the addicted while fulfilling the mission of Christ to care for the less fortunate,” said Dr. Cassidy.
    Cassidy himself has taken steps to support those who volunteer in their communities. In September, he introduced bipartisan legislation to reauthorize and strengthen AmeriCorps programs, which provide national service opportunities to more than 200,000 Americans every year in thousands of communities around the country. He has also previously introduced bipartisan legislation to provide medical professionals with a limited, but consistent, level of legal protection while volunteering during federally-declared disasters. Before being elected to Congress, Cassidy himself co-founded the Greater Baton Rouge Community Clinic and converted an abandoned K-Mart building into an emergency health care facility in the wake of Hurricane Katrina.
    Cassidy was led on a tour of Catholic Charities’ facilities by their CEO, Ms. Kim Boudreaux.
    “We are grateful to have had the opportunity to offer Senator Cassidy a firsthand look at the programs we provide at Catholic Charities of Acadiana,” said Ms. Boudreaux. “Every day, our organization works to address the urgent needs of our neighbors in Acadiana who are experiencing homelessness, hunger, poverty, and situational crisis. Additionally, we offer critical support to survivors of natural disasters, helping them rebuild and restore their lives. Senator Cassidy’s visit underscores the importance of these critical services, and we hope it will inspire continued collaboration and support as we work together to bring healing, stability and hope to the most vulnerable members of our community.”

    MIL OSI USA News

  • MIL-OSI United Nations: Experts of the Committee against Torture Commend Kuwait on Positive Measures to Prevent Torture, Raise Questions on the Independence of the Judiciary and the Death Penalty

    Source: United Nations – Geneva

    The Committee against Torture today concluded its consideration of the fourth periodic report of Kuwait, with Committee Experts commending the State on positive measures introduced to combat torture, while raising questions on the independence of the judiciary and the application of the death penalty. 

    Peter Vedel Kessing, Committee Expert and Rapporteur, commended Kuwait for all the positive measures taken, including new laws and regulations to prevent torture.

    Abdul Razzaq Rawan, Committee Expert and Rapporteur for Kuwait, asked if the State party could inform the Committee of any legislative amendments or developments aimed at establishing the judiciary as an authority that was independent of the executive authority, and granting it the full authority to manage the affairs of judges and supervise the preparation of relevant regulations? What measures had been taken to implement the constitutional principle guaranteeing the independence of the judiciary and to implement the requirements of article 163?

    Mr. Vedel Kessing said the number of death sentences and executions carried out had reportedly increased, particularly since 2022.  How many persons had been sentenced to death over the last five years and how many of those persons had been executed?  Was it correct that a person could be sentenced to death for crimes not involving intentional killing, for example drug-related crimes? Allegedly, the abolition of the death penalty would be incompatible with Islamic Sharia, which was the main source of all Kuwaiti domestic legislation, including criminal law.  Would this also apply to a moratorium for the execution of death sentences?   

    The delegation said judges needed to be fully competent and qualified in the field of law or Sharia and did not have the right to exercise political activities. Judges could not be removed from their posts unless disciplinary measures were issued against them.  If judges were related to the accused by four degrees, they were required to recuse themselves from proceedings.  The Ministry of Justice could not get involved in daily cases or the running of the judiciary.  The judiciary was fully independent; there was no involvement from the executive or the parliament in the judiciary.

    The delegation said the death penalty was one of last instance, the maximum penalty issued in the Criminal Code of Kuwait.  It was only enacted for the most serious crimes and was not in contradiction with Islamic Sharia.  At any stage of proceedings, the accused murderer could appeal, or ask for a lighter or reduced sentence, rather than the death penalty.  From 2022 to 2024, there were 80 penalties reduced from the death penalty to a lighter sentence, with people even being released in some cases. In the case of a woman who was pregnant, the death penalty could not be carried out until the child was born. Minors could not be subjected to the death penalty.

    Introducing the report, Naser Alhayen, Permanent Representative of Kuwait to the United Nations Office at Geneva and head of the delegation, said the accession of Kuwait to the Convention against Torture in 1996 was a pioneering step towards promoting rights and preserving freedoms.  Since the submission of the fourth periodic report, Kuwait had taken steps to strengthen the legislative framework related to combatting torture.  These efforts were represented in the issuance of decree-law no. 93 of 2024, which clearly stipulated the definition and prohibition of torture.  The new law tightened the penalties imposed on perpetrators of torture crimes, and strictly criminalised any act of discrimination or ill treatment.

    In closing remarks, Claude Heller, Committee Chairperson, thanked the delegation for the dialogue which had been very constructive.  The Committee aimed to contribute to the improvement of human rights in all States.

    Mr. Alhayen, in concluding remarks, thanked the Committee for the dialogue.  Kuwait was fully committed to the implementation of all international standards and human rights and would continue the constructive dialogue with the Committee and the international community. 

    The delegation of Kuwait consisted of representatives from the Ministry of Foreign Affairs; the Ministry of Justice; the Ministry of Interior; the Ministry of Defense; the Ministry of Social Affairs; the Ministry of Information; the Ministry of Health; the Ministry of Education; the Central System for the Remedy of Situations of Illegal Residents; the Public Authority of Manpower; and the Permanent Mission of Kuwait to the United Nations Office at Geneva.

    The Committee will issue concluding observations on the report of Kuwait at the end of its eighty-first session on 22 November. Those and other documents relating to the Committee’s work, including reports submitted by States parties, will be available on the session’s webpage.  Summaries of the public meetings of the Committee can be found here, and webcasts of the public meetings can be found here.

    The Committee will next meet in public on Thursday, 31 October at 3 p.m. to conclude its consideration of the third periodic report of Namibia (CAT/C/NAM/3).

    Report

    The Committee has before it the fourth periodic report of Kuwait (CAT/C/KWT/4).

    Presentation of Report

    NASER ALHAYEN, Permanent Representative of Kuwait to the United Nations Office at Geneva and head of the delegation, said the accession of Kuwait to the Convention against Torture in 1996 was a pioneering step towards promoting rights and preserving freedoms.  Since the submission of the fourth periodic report, Kuwait had taken steps to strengthen the legislative framework related to combatting torture. These efforts were represented in the issuance of decree-law no. 93 of 2024, which clearly stipulated the definition and prohibition of torture.  The new law tightened the penalties imposed on perpetrators of torture crimes, and strictly criminalised any act of discrimination or ill treatment.  This decree was a milestone in the State’s efforts to strengthen the rule of law and protect human rights, and it imposed severe penalties of up to life imprisonment for certain crimes.  A decree had also been adopted which redefined measures for receiving complaints relating to human rights.

    Kuwaiti legislation included comprehensive protection for women and criminalisation of all forms of violence against them.  The protection from domestic violence law no. 160 of 2020 was issued, which established shelters for victims of domestic violence, and the possibility of reporting violence.  A child protection centre was also established.  The Supreme Council for Family Affairs was working on establishing the third centre for protection from domestic violence and the rehabilitation of survivors.  Law no. 21 of 2015 guaranteed the rights of the child, prohibiting children from deliberately being subjected to any physical or psychological abuse and punishing those who violated these provisions. 

    Specialised enforcement departments had been established to implement family court rulings and settle family disputes.  Social security and insurance were provided to persons with disabilities.  Monthly financial allocations were provided, in addition to a cash allowance for hiring a domestic worker or a driver to meet their daily needs.  During the first half of 2024, the number of residents in social care homes reached 518 people, including 362 citizens and 165 non-citizens. These homes provided integrated rehabilitation and training programmes focused on reintegration.

    The protection of the rights of contracted workers was a top priority for Kuwait, and this was highlighted in law no. 68 of 2015 on the protection of the rights of contracted workers.  Since the adoption of the law, the situation of domestic workers had improved substantially, as strict laws had been imposed to prevent the exploitation of these workers and ensure them full legal protection.  Inspection campaigns were conducted periodically on domestic labour recruitment offices and agencies to ensure that they applied the law; these campaigns issued fines in the event procedures were not followed. 

    Law no. 91 of 2013 aimed to criminalise all forms of human trafficking and provide legal protection for victims.  The National Committee to Combat Trafficking in Persons was established, as well as a specialised prosecutor to investigate these cases.  There had been a significant decrease in the number of trafficking crimes committed from 82 cases in 2020 to nine cases in 2023. A special system had been established for the early identification of victims by training workers at border crossings and hospitals to detect signs of exploitation.  Victims were then transferred to care centres where they received medical, psychological and legal support. 

    Kuwait had adopted an approach that achieved more security for detainees by subjecting all prisons to the supervision of the judicial authority, represented by the Public Prosecution, which was an independent authority.  The current system guaranteed every detainee the right to access a lawyer from the first moment of detention, and ensured that all detainees obtained their legal rights, and were granted an independent medical examination. 

    Mechanisms had been developed which allowed detainees or their families to submit confidential complaints for immediate investigation, with any official found to be involved in ill treatment held accountable.  Advanced training programmes for police officers and prison staff had been developed in cooperation with the Office of the High Commissioner for Human Rights, with a special focus on practical aspects related to dealing with detainees.  Mr. Alhayen concluded by emphasising Kuwait’s full commitment to human rights and to cooperation with the international community. 

    Questions by Committee Experts

    ABDUL RAZZAQ RAWAN, Committee Expert and Rapporteur for Kuwait, congratulated Kuwait for the desire expressed with regards to continued cooperation and dialogue with the Committee.  The Committee congratulated Kuwait on announcing a number of important initiatives and legislation.  The Committee also congratulated the State party on the fact that half the delegation were women, and that the delegation represented multiple sectors, reflecting the importance of the Convention. 

    The Committee congratulated Kuwait for the work of the National Standing Committee on follow-up and communications that prepared the report, while asking for further clarification around the work of this body.  What was the number of organizations which attended consultations for preparing the report, and how did these consultations impact the report? Could the State party elaborate further on the place of the Convention within the national legal system, in particular article 70 of the Kuwaiti Constitution?  What was the impact of this jurisprudence in the country?  To what extent was there an application of the provisions of the Convention by law enforcement officers? 

    Decree-law no. 93 of 2024 amended some provisions of the Kuwaiti Penal Code, with a new article which stipulated that the punishment of a public official who caused physical or psychological harm to a person, or induced him to confess to committing a crime, would face imprisonment for a period not exceeding five years and a fine not exceeding 5,000 dinars.  Penalties for torture should be proportionate to the acts committed and the damage resulting from them.  Torture leading to death was a crime that should be treated as more severe than murder, and should have its own punishment to distinguish it from ordinary murder.  Could the State party comment on this? 

    Could the State party also comment regarding article 37 of the Code of Criminal Procedure, which allowed the use of “any means” during investigations to obtain evidence, provided that it was not contrary to public morals or infringed on the rights and freedoms of individuals?  What procedural safeguards prevented coercion to remove confessions during interrogations and pretrial detention?  What legal texts and legislative measures ensured the exclusion of torture from national legislation on amnesty and immunities?  What was being done to fill this gap at the legislative level and in practice?  The Convention obliged States parties to prevent and prohibit torture in all circumstances, including a state of emergency, war or any other exceptional circumstance.  What were the State’s planned future actions to implement this commitment?

    The Committee was satisfied with the provisions of paragraph 126 of the national report, in particular the requirements of articles 158 and 159 concerning the prohibition of coercion or inducement of the accused to make statements and the invalidity of a confession obtained under duress or torture.  Could current examples be provided of judicial decisions invalidating confessions of accused persons as a result of torture? 

    The Committee had questions regarding the right of detainees to challenge the lawfulness or necessity of their detention.  What actions had been taken to establish safeguards currently, or in the future, as well as the measures taken to enforce respect for them by law enforcement officials?  What measures had been taken with regard to the control of records in all places of deprivation of liberty?  Was there a centralised national information register that included all the data of the records in the detention centres in the country?

    The Committee had expressed concern that judges were appointed by the Supreme Judiciary Council. There was also concern about the independence of foreign judges due to a lack of career security.  Could the State party inform the Committee of any legislative amendments or developments aimed at establishing the judiciary as an authority that was independent of the executive authority, and granting it the full authority to manage the affairs of judges and supervise the preparation of relevant regulations?  This included the conditions for managing the judiciary, appointing judges, tracking their careers, including their dismissal and promotion, and the conditions for appointing foreign judges to ensure their job security.  What measures had been taken to implement the constitutional principle guaranteeing the independence of the judiciary and to implement the requirements of article 163?

    The Committee had previously recommended that the State party adopt a legislative and institutional framework that incorporated international standards on asylum.  Was this on the legislative agenda?  While noting the decisions reported in the report whereby the daily fines imposed in many cases had been abolished, what measures had been taken to give effect to the Committee’s previous recommendation to amend the laws imposing such fines?  What was the nature of cooperation with the Office of the United Nations High Commissioner for Refugees, and could any statistics be provided?   

    What measures were taken during the period under review to ensure that no person was returned to a country where they were in danger of being subjected to torture or ill treatment?  Were those concerned with expulsion, return or extradition informed that they were entitled to seek asylum and appeal against deportation decisions?  What legal and practical safeguards existed to ensure the right of persons for whom deportation orders had been issued, to have their cases reviewed by a competent judicial body?  How many cases of return, extradition and expulsion had been carried out by the State party during the reporting period in exchange for diplomatic assurances?

    Did Kuwaiti law and jurisprudence allow for universal jurisdiction, which was the following and prosecution of crimes of torture, so as to establish jurisdiction in all cases and to ensure that perpetrators did not go unpunished?  If the State received a request for extradition from a State where Kuwait had no extradition agreement or treaty, what were the legislative and administrative measures needed to ensure that the Convention could be invoked as a legal basis for extradition?  Had the State ever refused a request by another State for the extradition of an individual suspected of the crime of torture?  Had it initiated any criminal proceedings against that individual as a result?  If so, could information on the status and results of these proceedings be provided?

    Could the delegation provide the Committee with information on any specialised programmes aimed at raising awareness of law enforcement officials, including security and prison personnel, and the measures adopted by the State party to prevent torture?  Had any programmes been adopted and implemented to train police cadets and officers in non-coercive investigative techniques?  Could information be provided on the assessment, review and updating of interrogation rules for persons who had been subjected to any form of arrest, detention or imprisonment?  What did the State of Kuwait intend to do to fulfil the obligation of monitoring practices related to interrogation, methods of detention, and treatment of persons arrested?

    The Committee would appreciate receiving information on the cases in which the legal provisions on the protection of witnesses and medical professionals documenting acts of torture and ill treatment had applied, in particular cases where these provisions had not been respected and action that had been taken against persons who had violated these legal requirements?  Taking into account the legal amendments on torture, did Kuwait intend to accompany these amendments by allocating legal provisions related to the protection of victims, witnesses and medical experts in criminal law? 

    Article 14 of the Convention obligated States parties to provide a legislative framework for the right of victims to effective remedy and adequate compensation.  What measures would be taken to give effect to this commitment through the adoption of legislation and institutional requirements? What measures of reparation and compensation, including court-ordered rehabilitation methods, had been made available to victims of torture and ill treatment or their families since the consideration of the previous periodic report?  Were programmes being implemented to provide reparation to victims of torture and ill treatment, including health and psychological rehabilitation?

    PETER VEDEL KESSING, Committee Expert and Rapporteur, asked what progress had been made to establish a fully independent National Human Rights Institution in line with the Paris Principles?  Did the Government agree with reports that some law enforcement officers still engaged in abuse and ill treatment during arrest or interrogation? How many complaints of torture and ill treatment had been received over the last three years and what was the outcome of these complaints?

    Were the three institutions which could investigate allegations of torture – the Office of the Public Prosecution, the General Directorate for Oversights and Inspection in the Ministry of Interior, and the National Bureau for Human Rights – completely independent from the Government as required under the Convention?  Would the State party consider establishing a fully independent institution that could investigate violations of the Convention in an effective and impartial way?  How many complaints had the Bureau received over alleged torture and ill treatment over the last three years?  What was the outcome of these cases? 

    Overcrowding in prisons continued to be a significant problem, particularly in the central prison. The prison population was reported to be at an occupancy rate of 126 per cent in 2023.  What efforts that had been taken to improve the living conditions in prisons?  Was the Government considering additional efforts since the problem with overcrowding had not been solved?  What progress had been made on the building of the new prison? 

    A law reportedly allowed the use of shackling of hands and feet for up to a month and the deprivation of certain types of food for a week as disciplinary punishment.  How many detainees had been shackled over the last three years?  What kind of offence warranted this punishment?  How many detainees had been deprived of food over the last three years? 

     

    How could a prisoner make a complaint over ill treatment in the prison?  How many complaints of ill treatment had been received over the last three years and what was the outcome of these cases?  Was it correct that some officers only received a decrease in their salaries as a penalty for having subjected detainees to torture and other forms of ill treatment?  How many visits had the International Committee of the Red Cross undertaken to places of detention from 2019 and onwards?  How many announced and unannounced visits had the National Bureau for Human Rights carried out to places of detention over the last three years? How had Kuwait followed-up and implemented the recommendations from the independent institutions visiting places of detention in Kuwait?

    The number of death sentences and executions carried out had reportedly increased, particularly since 2022.  How many persons had been sentenced to death over the last five years and how many of those persons had been executed?  Was it correct that a person could be sentenced to death for crimes not involving intentional killing, for example drug-related crimes?  Allegedly, the abolition of the death penalty would be incompatible with Islamic Sharia, which was the main source of all Kuwaiti domestic legislation, including criminal law.  Did this also apply to a moratorium for the execution of death sentences?   

    The delegation had provided important information on steps taken to improve the protection of foreign workers, including reviewing the laws, improving working conditions, and criminalising trafficking, which were positive steps.  However, it was reported that there was a high death rate among migrant workers who carried out dangerous work, particularly in construction sites.  How many migrant workers had died in Kuwait over the last three years?  What measures were taken to protect migrant workers from ill treatment and exploitation?  Why was a domestic worker not allowed to freely resign and change workplace?  Why did they need the consent of or authorisation from the employer to change workplace?

    The Committee appreciated the steps taken by Kuwait to counter domestic and sexual violence. Could marital rape be punished in Kuwait?  Were there concrete court cases where martial rape had been punished as a criminal offence? What was the outcome of the court cases involving violence against women?  In how many cases were the accused persons convicted for a crime and what were the sentences?  Was the Government considering a ban on corporal punishment in all settings? 

    There had been reported concerns that Bidoon citizens were being denied access to education, health care and employment, and faced mass arrests, torture and abuse when trying to exercise their right to freedom of peaceful assembly.  Did the Government accept the criticism and recommendations from the United Nations Human Rights Committee and from other sources, and was it willing to improve conditions for the Bidoons?

    A Committee Expert said prolonged solitary confinement was proven to undermine the standards outlined in the Convention.  Under what circumstances was incommunicado detention authorised?  Would the State party consider abolishing incommunicado detention? 

    Responses by the Delegation 

    The delegation said the National Standing Committee on follow-up and communications was established in 2019.  This Committee was delegated to respond to reports regarding the human rights situation in Kuwait and was assigned with preparing periodic reports presented to international bodies, and coordinating with non-governmental organizations working in the field of human rights.  The Committee was operational and was present in the meeting.  Its staff received the necessary training to support its mandate. This Committee had been in contact and coordinated with the Office of the High Commissioner for Human Rights. 

    The promulgation of the 1996 law approving the adoption of the Convention meant that this instrument was part of the national legal framework in Kuwait.  A judge could invoke the Convention in the issuance of verdicts.  There was no need for another process or procedure for the Convention to be part of national legislation.  A new text in the legislation included a penalty for using torture to extract a confession.  A new law punished every official who had acquiesced to a request of torture. 

    Any official or service provider who inflicted physical or mental harm against a person or their family members, or forced them to provide statements thereof, could be found guilty of torture.  The punishment was a sentence of not more than five years and not less than 5,000 dinars. There was also a criminalisation of discrimination in connection with torture.  If torture led to death, then a person was charged with the crime of a deliberate murder.  The sentence was then death, and there was no harsher punishment. 

    The Public Prosecutor conducted investigations and interrogations into charges of torture. Defendants could deny such charges. Everything took place under the supervision of the courts.  A defendant could adhere to the invalidity of such a confession.  If a confession was obtained under torture, then it was dismissed by the court.  The court resorted to many principles related to the invalidity of confessions extracted under torture.  In a case when a police officer had forced a defendant to provide a confession, the defendant was acquitted.  Acquittal was premised on the examination of evidence in the case. 

    If a detainee requested a medical evacuation, medical care was provided under the supervision of the police.  Anyone sentenced to imprisonment had their names recorded in an electronic system which was supervised by multiple agencies.  If their detention period exceeded the terms stipulated in the law, there was a notification, and those in charge were held accountable. 

    Judicial safeguards were in place, including that the individual had the right to know the reason for their arrest.  If the individual could not appoint a lawyer, the State had the right to appoint a lawyer for them.  All questioning should be done by specialist bodies, and it was up to the judge to release the person or keep them in detention.  Detainees could appeal at any stage of the judgement.  Questioning could only be conducted by trained, specialised staff, not just the police.  The accused individual had the right to request an examination to ensure there were no injuries, which needed to be included in the investigation report. The arrested individual had the possibility of appointing somebody to witness this. 

    Judges needed to be fully competent and qualified in the field of law or Sharia and did not have the right to exercise political activities.  Judges could not be removed from their posts unless disciplinary measures were issued against them.  If judges were related to the accused by four degrees, they were required to recuse themselves from proceedings.  The Ministry of Justice could not get involved in daily cases or the running of the judiciary.  They could recommend the appointment of judges when necessary.  Kuwait had chosen to ensure a separation of powers.  The judiciary was fully independent; there was no involvement from the executive or the parliament in the judiciary. 

    Currently, there were no persons subject to a decision of exile or expulsion.  If such a decision was taken, it was implemented in cooperation with the United Nations High Commissioner for Refugees, allowing the affected persons to be supported.  All foreign individuals could not be exonerated from fines imposed upon them. Any individual who had received fines was obliged to pay them before being deported.  In cases where people were unable to pay the fines, they could pay them subsequently in cooperation with third parties. 

    Responses by the Delegation

    The delegation said the definition of the crime of torture was challenging, as there was a need to define what behaviours constituted torture.  For example, if an individual was compelled to disclose information under duress, this could equate to torture, even if they were not subject to physical constraint.  One did not have to be the perpetrator of torture to be covered by the acts under the law; individuals could be sanctioned as a standby witness.  Any physical act of torture was a crime and the Kuwaiti legislator had established as a minimum threshold, a three-year imprisonment.  If the acts committed had long-term impacts and were severe, the sanctions would be increased.  Pre-mediated crimes could be punished by life imprisonment or the death penalty.  The crime of torture was an absolute crime, and mitigating circumstances could not be used to downplay or excuse acts of torture. 

    Awareness campaigns had been rolled out on national radio and television stations to make the public aware of the serious nature of the act of torture.  Social media networks had published advertisements and short awareness-raising videos and clips.  The campaign aimed to ensure that violence was not seen as mainstream or normal, whether in schools or in the family.  All channels were used to repeat this point.  A robust checking system was in place to monitor campaigns and check results.  Steps were taken to ensure unjustified violence was never promoted or mainstreamed, and to crack down on misinformation which could foster unrest and discrimination.  Producers who violated requirements were held accountable.  There were rare cases where scenes of violence had been broadcast, for example during the COVID-19 pandemic.  These were immediately followed up on and assessed, and action was taken to hold those responsible to account. 

    Initiatives had been conducted to be conducive to awareness raising in schools, to ensure victims of violence could have access to support.  All measures were taken to support the psychological wellbeing of women. Around 60 clinics provided women victims of violence with psychological support.  Specialised non-governmental organizations worked with victims of domestic violence and conducted training for self-defence.  Each State had rules for interrogation and treating any person who was under arrest, in such a way to ensure there were no acts of torture involved.  There first needed to be a medical observation of the entire body of the arrested person prior to interrogation, and they were then given the opportunity to meet with a lawyer.  If the arrested person did not speak Arabic, they would receive the support of an interpreter. 

    In the cases of detention, the detainee was entitled to all communication tools, access to a lawyer, and the ability to communicate with their family members to inform about their whereabouts.  All cases involving compensation for acts of torture were actioned through a special administration.  From 2020 to 2023, there were only nine torture complaints.  Torture was not considered a phenomenon or a scourge in Kuwait. 

    The National Bureau for Human Rights conducted training and developed content to disseminate a general culture about human rights, and also contributed to building programmes on human rights training in schools.  The protection and promotion of human rights was promoted through a website, social media networks, and awareness raising campaigns.  This year, the Bureau participated in a conference on local and regional initiatives for human rights.  The Bureau supported rehabilitation and penitentiary centres and could conduct visits to places of detention, women’s shelters, and other institutions without any clearance needed.  Investigations against the police were conducted in the event of complaints.  If it was found that these complaints were legitimate, sanctions were imposed, including the loss of salary or job. 

    Twenty-one memorandums of understanding had been signed with other countries to govern the issue of domestic workers.  Kuwait heeded its commitments under the International Labour Organization conventions.  A hotline was provided to all workers, enabling them to file complaints at any time.  One hundred and fifty-three inspection campaigns had been conducted in July.  Seven violations against domestic workers had been recorded in 2024. 

    Any domestic worker could request a change of employment without requiring the approval of their previous employer.  An awareness campaign which targeted domestic workers was being rolled out, focused on raising awareness for current and prospective domestic workers about their rights, as well as promoting the hotlines and contact points they might need.  

    Being held incommunicado in isolation cells could only be imposed in specific circumstances, for example if the person was self-harming while in detention.  The death penalty was one of last instance, the maximum penalty issued in the Criminal Code of Kuwait.  It was only enacted for the most serious crimes and was not in contradiction with Islamic Sharia.  At any stage of proceedings, the accused murderer could appeal, or ask for a lighter or reduced sentence, rather than the death penalty.  From 2022 to 2024, there were 80 penalties reduced from the death penalty to a lighter sentence, with people even being released in some cases. In the case of a woman who was pregnant, the death penalty could not be carried out until the child was born. Minors could not be subjected to the death penalty. 

    The crime of rape was defined with the non-presence of consent.  Consent was a constant, including in a marriage.  If consent had not been given, this was recognised as being a rape and was defined as a rape in the Criminal Code.  If marital rape occurred, this was criminalised and the perpetrator was punished. This relied on the woman registering a complaint of rape.  The existing legislation in Kuwait did meet the requisite standards.  The sanctions and punishments were commensurate with the degree of harm suffered. 

    Crimes of sexual violence had multiplied, including rape and non-consensual sexual relationships with minors.  Some of the sentences handed down for these cases were life imprisonment, with the minimum sentences being 15 years in certain circumstances.  This highlighted that the justice system was working as it should in Kuwait, with perpetrators being duly sanctioned. 

    The State did not currently intend to lift its reservations to the Convention, as doing this would pose a risk to the State’s sovereignty.  Any detainee who had health concerns where their lives were at risk were assessed by doctors, and in some cases could be provided with a conditional release. 

    The Government was continuing its tireless efforts to address the issue of stateless persons.  An action plan had been adopted which served as a roadmap. There were 10,260 stateless persons in Kuwait who were currently in the regularisation process.  People undergoing this process received long-term resident permits and received medical insurance cards.

    Kuwait guaranteed the right to freedom of expression and peaceful assembly.  The country had signed 15 extradition agreements, which were bilateral agreements between Kuwait and third parties.  In the event no treaty was in place, Kuwait referred to the principle of reciprocity.

    Laws and regulations punished terrorist acts and crimes, money laundering, and the financing of terrorism. Kuwait had a specialised department on combatting terrorism, money laundering and terrorism financing. Twenty-eight terrorist cases had been registered over the past four years.  Thirty-five inmates currently were being held in prison for being associated with a group which presented a threat to the nation. 

    Kuwait had rehabilitation and mental health follow-up programmes for persons in institutions, which allowed these persons to avoid relapse.  Therapy sessions were conducted, in which persons were evaluated at the psycho-social level and evaluated from a general risk perspective before they were discharged. A social and family integration programme was in place for persons with disabilities.  Allowances were provided for personal assistants and drivers. Five hundred and eighteen persons were in social care institutions.  These included persons with severe psychological and motor disabilities. 

    Questions by Committee Experts

    ABDUL RAZZAQ RAWAN, Committee Expert and Rapporteur for Kuwait, said torture was a serious and grave crime within international human rights law.  Therefore, it was absurd that there were no provisions thereon, and the Committee insisted on this.  Mr. Rawan commended the provisions in the civic law of Kuwait, which provided for reparations.  Could the delegation explain in detail the course of the reforms undertaken by Kuwait? Were there any special education programmes to support the Convention among law enforcement officers? 

    All countries were recommended to provide training in the provisions of the Istanbul Protocol.  Did Kuwait provide such training?  Was there a law which governed the use of forensic medicine in Kuwait?  The Convention considered mechanisms monitoring deprivation of liberty as an effective means to combat torture.  It was hoped that Kuwait would ratify the Optional Protocol to the Convention. Regarding fundamental legal safeguards, it was vital for family members to be notified of one’s place of detention.  Could clarifications be provided on whether this was complied with?   

    PETER VEDEL KESSING, Committee Expert and Rapporteur, commended Kuwait for all the positive measures taken, including new laws and regulations to prevent torture.  It was understood that the State was willing to tighten the penalty for torture to more than five years, which was commensurate with the gravity of the crime.  This was commendable.  What was to process from here on?  When could it be hoped that there would be changes?  Would the Government apply for international accreditation for the National Bureau for Human Rights?  Was it common to have video or audio recordings of police interrogations?  If there were allegations against a police officer, who would investigate that complaint? 

    Could a domestic worker easily terminate a contract with a month’s notice, or were they always required to supply a reason?  It was encouraging to learn that Kuwait was considering a ban on the use of shackles. Could the State be more specific on the timeline?  Had the new prison been built to tackle the issue of overcrowding?  Could updated statistics be provided on deaths in custody? Had deaths in custody been investigated? What measures were being taken to prevent these kinds of deaths? 

    Responses by the Delegation

    The delegation said sovereignty was a sensitive issue, all the more so when international texts and treaties departed from national legislation.  The State of Kuwait was firmly resolved to prosecute and punish any act of torture, irrespective of the perpetrator of that act.  The law on protection from corporal punishment 2020 expressly prohibited any act of violence against a child.  A unit was set up which responded to complaints of ill treatment against children, including corporal punishment.  Immediate investigations were launched into allegations of abuse in schools.  Any report of abuse needed to be followed up on immediately. 

    The Office of the Prosecutor was mandated to prosecute crimes brought before it, including torture.  Once the Office was seized with a case of torture, an effective streamlined system ensured a rapid investigation into the reported case of torture.  The Public Prosecutor’s Office was also an independent, oversight body which enacted measures to ensure oversight of places of deprivation of liberty.  Since 2009, it had the right to carry out visits to verify the conditions of places of deprivation of liberty.  The visits were also used to ensure that there were not acts tantamount to torture, ill treatment or abuse being carried out. 

    If an act of torture had led to a loss of life, the sentence would be toughened up to the death penalty.  If a doctor believed a patient in hospital ran the risk of being tortured, they would report it to the police unit in the hospital which would take legal measures against the perpetrator. 

    Around 53,000 domestic workers had changed careers to jobs in the public sector.  When a suspect or defendant was under interrogation, they were informed of their rights.  Twenty-two cases of detention without grounds between 2020 and 2024 had been referred to the competent judicial authorities, who referred the cases to the competent courts. A decree regulated the suspension of a police officer, following reports of excessive use of force. 

    A study was being conducted to amend the article in regard to the use of discipline of inmates.  It was hoped that this amendment would see the light of day, and the article would then be in line with the Mandela and Bangkok Rules. Remand in custody was limited by law and could not be extended.  The provision of a hotline was a safeguard, which was open to Kuwaitis or non-Kuwaitis to lodge any abuse of their rights, including complaints against police officers. Kuwait would recommend that the National Bureau for Human Rights seek accreditation under the Global Alliance of National Human Rights Institutions.

    Question by a Committee Expert

    ABDUL RAZZAQ RAWAN, Committee Expert and Rapporteur for Kuwait, said the judiciary had a fundamental role in preventing torture and implementing the provisions of the Convention. It was hoped the State would take into account shortcomings which could impact the work of the judges and judiciary into account. 

    Responses by the Delegation

    The delegation said the judicial authority in Kuwait was fully independent of the executive and legislative authority; these were separate powers.  In practice, there was no interference whatsoever.  Rules might imply an interference, but in practice, this was not the reality.  The Kuwaiti judiciary and the Office of the Prosecutor General were fully independent from a technical standpoint. 

    Closing Remarks

    CLAUDE HELLER, Committee Chairperson, thanked the delegation for the dialogue which had been very constructive.  The Convention was respectful of sovereignty.  The Committee aimed to contribute to the improvement of human rights in all States. 

    NASER ALHAYEN, Permanent Representative of Kuwait to the United Nations Office at Geneva and head of the delegation, thanked the Committee for the dialogue.  Kuwait was fully committed to the implementation of all international standards and human rights and would continue the constructive dialogue with the Committee and the international community. 

     

    Produced by the United Nations Information Service in Geneva for use of the media; 
    not an official record. English and French versions of our releases are different as they are the product of two separate coverage teams that work independently.

     

    CAT24.019E

    MIL OSI United Nations News

  • MIL-OSI Canada: Announcing Funding to Improve Energy Efficiency in Ontario’s Industrial Facilities  

    Source: Government of Canada News (2)

    News release

     October 30, 2024                        Toronto, Ontario                       Natural Resources Canada 

    Investments in energy-saving programs are essential to help industries and workers build a more prosperous and sustainable future. The Government of Canada is committed to innovative energy management solutions for industry partners across the country.

    Today, the Honourable Jonathan Wilkinson, Minister of Energy and Natural Resources, announced a federal investment of nearly $20 million to the Independent Electricity System Operator (IESO) from the Green Industrial Facilities and Manufacturing Program (GIFMP). This funding will support the extension of IESO’s Strategic Energy Management Program.

    NRCan has invested in this initiative to help IESO support industrial facilities across four areas:

    • Energy practitioners 
    • Energy managers 
    • Energy management systems 
    • Strategic energy management 

    Investments like these are key to reducing emissions, maximizing energy performance and increasing energy industry competitiveness in Canada. 

    Quotes

    “Supporting Canadian industry with energy efficiency targets is necessary if we want to improve our competitiveness in a growing global economy where the demand for energy is increasing while ultimately achieving our emissions reduction targets. The Independent Electricity System Operator’s Strategic Energy Management Program will reduce energy costs and environmental impacts in Ontario, creating more efficient and less expensive green power. By supporting programs like IESO’s, the federal government is playing a key role in the modernization and improvement of energy systems for Canadians from coast to coast to coast.”

    The Honourable Jonathan Wilkinson

    Minister of Energy and Natural Resources

    “Energy efficiency means cost savings for Canadian business. Supporting Canadian industrial facilities with their efficiency targets is a necessary step toward improving competitiveness in the global economy. We are pleased to play a part in IESO’s Strategic Energy Management Program through an investment of nearly $20 million that will help deliver more efficient, reliable and cost-saving electricity for Ontarians.”

    Julie Dabrusin, Parliamentary Secretary to the Minister of Energy and Natural Resources and to the Minister of Environment and Climate Change, Member of Parliament for Toronto–Danforth

    “As demand for electricity grows in the industrial sector, this funding from Natural Resources Canada will enable the IESO to expand and enhance our energy management solutions. These programs help ensure that Ontario’s industrial facilities remain efficient and competitive while keeping our system affordable and reliable.”

    Lesley Gallinger

    President and CEO, the IESO

    Quick facts

    • Canada’s industrial sectors represented about 3,650 PJ — or more than 40 percent — of Canada’s total energy use in 2021. 

    • Funding for this program originates in investments from Budget 2022, which included $194 million over five years, starting in 2022–2023, for NRCan to expand its existing Industrial Energy Management program by offering cost-shared financial support for a holistic and comprehensive suite of energy efficiency measures up to March 2027.

    • Designed by Save on Energy — IESO’s source for energy-efficiency opportunities and knowledge in Ontario — the Strategic Energy Management Program will help organizations improve their energy performance by implementing best practices for more energy and cost savings.

    • The Green Industrial Facilities and Manufacturing Program is an expansion of NRCan’s Industrial Energy Management Program and provides support for the implementation of energy management systems, capital retrofits and related capacity-building activities.

    Associated links

    Contacts

    Natural Resources Canada
    Media Relations
    343-292-6100
    media@nrcan-rncan.gc.ca

    Cindy Caturao
    Press Secretary
    Office of the Minister of Energy and Natural Resources
    613-795-5638
    cindy.caturao@nrcan-rncan.gc.ca

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    MIL OSI Canada News

  • MIL-OSI USA: Carney, Carper, Coons, Blunt Rochester Announce Over $127 Million in Federal Funding to Decarbonize Port Wilmington

    Source: United States House of Representatives – Representative Lisa Blunt Rochester (DE-AL)

    WILMINGTON, Del. – Today, Delaware Governor John Carney, U.S. Senators Tom Carper and Chris Coons and U.S. Representative Lisa Blunt Rochester (all D-Del.) announced $127.5 million for Port Wilmington as part of the U.S. Environmental Protection Agency’s (EPA) Clean Ports Program, a $3 billion investment by the Biden-Harris Administration in zero-emission port equipment and infrastructure.

    The Clean Ports Program was created by the historic Inflation Reduction Act (IRA) that Senators Carper, Coons, and Representative Blunt Rochester championed in Congress. As Chairman of the Senate Committee on the Environment and Public Works, Senator Carper was the primary author of the final environmental provisions in the IRA, including the Clean Ports Program at EPA. Senator Coons was a key negotiator of the Bipartisan Infrastructure Law and the Inflation Reduction Act, and as a member of the Senate Appropriations Committee, he has long fought to ensure critical infrastructure programs have the necessary resources to fund projects up and down our state, including at Port Wilmington. Representative Blunt Rochester’s legislation, H.R. 862, the Climate Action Planning for Ports Act, served as the framework for the Clean Ports program in the House version of the IRA.

    “The Port has been a critical part of Delaware’s economy for decades,” said Governor Carney. “The investment announced today will ensure the Port continues to support good jobs and enhance environmental safety for years to come.”

    “Our ports are vital to Delaware’s economic well-being, but for too long, pollution from diesel emissions have disproportionately impacted the vulnerable communities closest to them,” said Senator Carper, Chair of the Environment and Public Works Committee. “Port electrification is one solution that will clean up the air that nearby communities breathe while also addressing the climate crisis and creating new jobs. This is why I fought for the final Clean Ports Program in the Inflation Reduction Act. Investing in clean ports will put Delaware – and our nation – on the path to a brighter future with healthier communities, cleaner air, and a stronger economy.”

    “Investing in our infrastructure strengthens our national security and builds a stronger economy where everyone can thrive,” said U.S. Senator Chris Coons. “As Delaware’s member of the Appropriations Committee, I’m proud to have secured this funding for the Port Wilmington that will support good-paying, union jobs for First State workers. As we increase economic growth and competitiveness through investments in Delaware’s infrastructure, we should look for more investments like this one that advance climate resilience, reduce inflation, and further equip Delaware to meet the needs of the 21st century.”

    “The resiliency of Port Wilmington is crucial to the strength of our economy, our workers, and our supply chains,” said Rep. Blunt Rochester, member of the House Energy and Commerce Committee. “I’m proud to have delivered this significant investment in Port Wilmington through the Inflation Reduction Act’s Clean Ports Program, which is based on my Climate Action Planning for Ports Act. The goal of my bill was to reduce carbon emissions to improve public health and lower the environmental impact of our ports. Today’s investment meets that goal with urgency and equity, while advancing the Port’s clean energy future and benefiting our environmental justice communities.”

    “It’s one thing to talk about environmental justice, it’s another thing to do something about it,” said Delaware Secretary of State and Chairman of Diamond State Port Corporation, Jeffrey Bullock. “For years, people have been talking about the importance of cleaning up our ports and using “green” technology to better protect our workers and the people living in surrounding communities, but the money has never been available. This grant is going to make a huge difference by giving the existing port of Wilmington, and the new facility we are building the resources needed to improve environmental safety and make Delaware’s ports better for everyone living in our state.”

    “Our nation’s ports are critical to creating opportunity here in America, offering good-paying jobs, moving goods, and powering our economy,” said EPA Administrator Michael S. Regan. “Today’s historic $3 billion investment builds on President Biden’s vision of growing our economy while ensuring America leads in globally competitive solutions in the future. Delivering cleaner technologies and resources to U.S. ports will slash harmful air and climate pollution while protecting people who work in and live nearby ports communities.”

    The Clean Ports Program, established by the Inflation Reduction Act, is designed to help ports across the country transition to fully zero-emissions operations. The program consists of two competitions: the Climate and Air Quality Planning Competition and the Zero-Emission Technology Deployment Competition. Port Wilmington is an awardee for the latter, which will allow it to attain electric cargo handling equipment and charging infrastructure. EPA’s Clean Ports Program advances President Biden’s Justice40 Initiative, which aims to deliver 40 percent of the overall benefits of certain federal investments to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution. Disadvantaged communities will benefit from cleaner air and access to high quality jobs that will be created to operate zero emissions technologies at ports.

    ###

    MIL OSI USA News

  • MIL-Evening Report: What are Veblen and Giffen goods?

    Source: The Conversation (Au and NZ) – By María Yanotti, Lecturer of Economics and Finance Tasmanian School of Business & Economics, University of Tasmania

    photo-lime/Shutterstock

    This article is part of The Conversation’s “Business Basics” series where we ask experts to discuss key concepts in business, economics and finance.


    In economics, goods and services can be classified in different ways. You might be surprised to realise you already knew this, even without knowing their classification names.

    Most goods and services are what we call normal goods. Normal goods are those that you purchase more of as your income increases.

    For example, you might put healthier and more nutritious food in your trolley, buy more shoes and clothes, or spend more on outings at restaurants and events.

    Normal goods still abide to what’s called the law of demand, which might feel like common sense: as the price of something goes up, the quantity of or frequency with which it is demanded will fall.

    But there are some categories that violate our intuitions around supply and demand. And they do so for very different reasons. Meet Veblen and Giffen goods, the products that “break the rules”.




    Read more:
    What’s inflation – and how exactly do we measure it?


    Needs and wants

    Normal goods can be further divided into two types: necessity goods and luxury goods.

    Most groceries are an example of necessity goods.
    No Revisions/Unsplash

    Broadly speaking, necessity goods are all those things we require for everyday life – food, housing, electricity and so on.

    Luxury goods, on the other hand, are the those things we don’t necessarily need but are nice to have. Luxury houses, fancier cars, more expensive clothes and so on.

    We become more able to afford luxury goods as we earn more. But as a result, they are also the first things we tend to cut when our income tightens.

    For most of these products, something called the “law of demand” applies. That is, if their price increases, people buy less of them than they did before. Demand for them shrinks.

    However, some types of good defy this “natural” principle.

    Symbols of status and wealth

    The first type are Veblen goods, named after American economist Thorstein Veblen. Sometimes they’re also called “snob” goods.

    When these goods go up in price, demand for them actually increases.

    Clear examples of Veblen goods are some forms of art, high-end designer clothes, exclusive cars and watches. The more expensive the good is, the more exclusive it is, and the more the consumers (who are attracted to it) want to purchase it.

    It all centres on signalling status. Being seen to be able to purchase them can indicate someone has exquisite taste, or lots of money to spend.

    Most times, Veblen goods are an example of what economists call “positional” goods. These are goods that are valued according to how they are distributed among people, and who exactly has them.

    The satisfaction of purchasing a Veblen good comes from the sense of having it and being able to show it off, not necessarily from how useful it is.

    The value of Veblen goods is driven by their artificial scarcity – they’re deliberately hard for people to acquire.
    Andrea Natali/Unsplash

    Inferior goods

    On the opposite side of normal goods are inferior goods. As our income increases, we tend to consume less of these goods.

    Think, for example, of two-minute noodles or the bus service.

    As your income increases, you may be able to afford more nutritious and healthier food and stop consuming cheaper food. You may be able to purchase a car or a bike and stop using public transport.

    But within inferior goods, one rare kind offers another exception to the law of demand – Giffen goods.

    Why does a rise in price cause demand to go up? Because for people on limited incomes, this limits their ability to buy substitutes.

    Take examples such as wheat, rice, potatoes, or bread. If the price of any of these goes up, a consumer on low income may have less to spend on higher quality goods like meat and fresh vegetables, increasing their demand for the inferior good.




    Read more:
    What is competition, and why is it so important for prices?


    María Yanotti receives funding from AHURI. She is affiliated with the Economic Society of Australia, and the Women in Economics Network.

    ref. What are Veblen and Giffen goods? – https://theconversation.com/what-are-veblen-and-giffen-goods-241799

    MIL OSI AnalysisEveningReport.nz

  • MIL-OSI Security: FBI Chicago, Illinois Attorney General’s Office Seeking Information about Multiple Suspects in Jewelry Store Armed Robberies in Bridgeview

    Source: Federal Bureau of Investigation (FBI) State Crime Alerts (b)

    Douglas S. DePodesta, special agent in charge of the Chicago Division of the FBI, and Kwame Raoul, attorney general for the State of Illinois, are seeking information about four masked suspects involved in armed robberies taking place at four jewelry stores across three states between July 13, 2023, and September 14, 2024. Authorities are urging anyone with information to contact the FBI.

    The robberies in question have taken place at jewelry stores in Bridgeview, Illinois, as well as in Michigan and Missouri. According to law enforcement, suspects alternately carried an AR-style rifle, handgun, and hammer, and wore costume face masks. The FBI on October 30 released surveillance video footage of robberies that took place at stores in Bridgeview, Illinois, and Dearborn, Michigan. The video and images of the costume masks are available at fbi.gov/wanted/seeking-information.

    “The perpetrators of these crimes showed a blatant disregard for public safety and the rule of law during the commission of these brazen robberies,” DePodesta said. “Their actions will haunt these victims for a lifetime, and we’re asking for the public’s help to bring them to justice before someone is killed. We encourage the public to take a good look at the images we’ve released today and contact us with tips before these violent individuals strike again.”

    JEWELRY STORE ROBBERIES

    Unknown Suspects Bridgeview, Illinois; Dearborn, Michigan; and Winchester, Missouri  July 13, 2023; January 9, 2024; August 7, 2024; and September 14, 2024

    MIL Security OSI

  • MIL-OSI Submissions: Research – Great Place To Work® Releases Study On Workplace Well-being With Johns Hopkins University

    Source: Great Place To Work®

    Great Place To Work® Releases Study On Workplace Well-being With Johns Hopkins University In Critical Areas Of Mental And Emotional Support, Teamwork, Psychological Safety And Finance Stability

    Singapore, 30 October 2024 – Great Place To Work® Singapore marked its 10th anniversary at its Best Workplaces in Singapore 2024 event with the release of the Great is Possible: Charting a Decade of Progress in Singapore Workplaces (2015-2024) insights report. The report highlights the transformation of Singapore’s workplaces over the past decade, with a special focus on well-being and mental health. This year’s event also introduced the new Legends category, honouring organisations that have consistently made the Best Workplaces list for five or more consecutive years.

    Held at The Ritz-Carlton, the milestone celebration was graced by Deputy Prime Minister Heng Swee Keat and attended by close to 420 guests, including business leaders and employees from Great Place To Work Certified companies.

    Michael C. Bush, Chief Executive Officer of Great Place To Work®, giving his keynote address at the 10th Anniversary of Best Workplaces in Singapore / Great Place to Work® Singapore.

    A Decade of Change in Singapore’s Workplaces

    Over the past ten years, Great Place To Work has led the way in understanding what makes workplaces thrive in Singapore. Great Place To Work Singapore has administered over 400,000 surveys across nearly 1,000 workplaces from more than 440,000 employees since its establishment in 2015.

    In conjunction with its 10th anniversary, Great Place To Work Singapore unveiled the Great is Possible: Charting a Decade of Progress in Singapore Workplaces (2015-2024) insights report, which provides a comprehensive analysis of data collected from 2015 to 2024. The report, based on input from approximately 440,000 employees in the Trust Index Employee Survey, examines the evolving trends and shifts in workplace culture, leadership, and employee well-being. Key findings include:

    • Leadership integrity and psychological safety remain pivotal in fostering positive employee experiences
    • Concerns about fairness in compensation and bridging experience gaps across different organisational levels
    • Employee trust and satisfaction have been on the rise at Best Workplaces for the past ten years, evidenced by a steady increase in overall Trust Index scores

    Spotlight on Employee Well-Being and Burnout

    In response to the rising focus on employee burnout and mental health, Great Place To Work also conducted a study on workplace well-being over the past five years in Singapore. Produced in collaboration with Johns Hopkins University’s Human Capital Development Lab, Well-Being At Work: Fostering a Healthy Work Climate For All examines well-being trends from 2019 to 2024, identifying key factors that influence workplace well-being in Singapore. It draws on data from Great Place To Work’s proprietary Trust Index survey, which included insights from over 200 organisations and 40,000 respondents in the critical areas of mental and emotional support, teamwork, psychological safety, and financial stability.

    The results revealed significant variations in well-being across several dimensions:

    Age and Gender
    • Women and younger employees reported lower well-being levels
    • However, the gender gap narrows among younger generations, suggesting future workforces may experience fewer gender-based disparities.

    Management Levels
    • Senior management reported higher well-being scores, attributed to a sense of purpose, personal growth, and financial stability.

    Impact of COVID-19
    • The pandemic initially boosted employee well-being as organisations prioritised care for their teams.
    • A decline in overall well-being levels was observed as businesses returned to traditional work environments.

    Importance of Connections
    • Strong connections and personal support play a crucial role in fostering a positive work climate.
    • There are strong correlations between teamwork, psychological safety, and overall well-being.

    Notably, Best Workplaces lead the way in well-being, consistently demonstrating higher employee well-being scores. Many of these companies achieve this through certified mental well-being ambassadors and comprehensive health and wellness programs. However, the success of such initiatives depends on employee perceptions influenced by organisational culture and values, highlighting the need for solutions that align with management practices and HR processes, rather than merely addressing issues superficially.

    “Over the past decade, Great Place To Work has witnessed the evolving needs of Singapore’s workplaces. Our reports highlight the growing importance of leadership integrity, psychological safety, and employee well-being. Despite the challenges of the past few years, leading organisations have shown that prioritising inclusion and investing in their people is essential for creating thriving work environments. We hope our findings will inspire more organisations to create high-trust, high-performing workplace cultures where everyone can thrive,” shared Ms Evelyn Kwek, Managing Director of Great Place To Work ASEAN and ANZ.

    Looking Ahead: “Great is Possible”

    This year’s milestone event embraced the theme “Great is Possible,” acknowledging the resilience and innovation of organisations in the face of an ever-changing business climate. A highlight of the 10th anniversary celebration was the introduction of the new Legends category to recognise exceptional companies with an impressive record—having been placed on the Best Workplaces in Singapore List for at least five consecutive years. These Legends stand as models of excellence in what Great looks like in the ever-evolving landscape of the modern workplace.

    The inaugural Legends list includes:
    • Cisco (5 Years)
    • DHL Express (Singapore) Pte Ltd (8 Years)
    • HP (5 Years)
    • Micron Technology (6 Years)
    • Salesforce (10 Years)
    • World Wide Technology (5 Years)

    CEO Michael C. Bush delivered a keynote address on how businesses can transform into great workplaces by prioritising trust, inclusion, and employee value. He emphasised the necessity of achieving greatness for both the present and future of work, and urged leaders to take actionable steps to create environments where all employees can thrive and drive outstanding business outcomes.

    Managing Director of Great Place To Work ASEAN and ANZ, Ms Evelyn Kwek said, “As we celebrate 10 years of the Best Workplaces list in Singapore, we are proud to honour our Legends. They have set the standard for what it means to be a truly Great Workplace, and their success shows what organisations can achieve when they put their people first. We hope our list-makers continue to inspire more organisations to reach for Great.”

    About Great Place To Work®

    As the global authority on workplace culture, Great Place To Work brings 30 years of ground-breaking research and data to help every place become a great place to work for all. Their proprietary platform and For AllTM Model helps companies evaluate the experience of every employee, with exemplary workplaces becoming Great Place To Work Certified or receiving recognition on a coveted Best Workplaces List. Follow Great Place To Work® on LinkedIn, Facebook, and Instagram or visit greatplacetowork.com.sg to learn more.

    About Great Place To Work® Certification

    Great Place To Work Certification is the most definitive “employer-of-choice” recognition that companies aspire to achieve. It is the only recognition based entirely on what employees report about their workplace experience – specifically, how consistently they experience a high-trust workplace. Great Place To Work Certification is recognised worldwide by employees and employers alike and is the global benchmark for identifying and recognising outstanding employee experience. Every year, more than 10,000 companies across 97 countries apply to earn Great Place To Work Certification.

    MIL OSI – Submitted News

  • MIL-OSI USA: Hoyer Joins President Biden, Team Maryland to Celebrate $147 Million Clean Energy Investment in the Port of Baltimore

    Source: United States House of Representatives – Congressman Steny H Hoyer (MD-05)

    WASHINGTON, DC – Congressman Steny H. Hoyer (MD-05) joined President Joseph R. Biden, Governor Wes Moore, U.S. Senators Ben Cardin and Chris Van Hollen (all D-MD), Congressman Kweisi Mfume, Congressman John Sarbanes, Congressman Dutch Ruppersberger (all D-MD), Maryland Department of Transportation Secretary Paul Wiedefeld, and Maryland Port Administration Executive Director Jonathan Daniels at the Port of Baltimore to celebrate more than $147 million in federal funding to create good-paying, clean jobs and to expedite decarbonization and electrification efforts at the Port. The U.S. Environmental Protection Agency awarded the funding to the Port of Baltimore through its Clean Ports Program, created under the Biden-Harris Administration’s Inflation Reduction Act.

    “The Biden-Harris Administration’s Investing in America agenda continues to leave no community behind and promote clean air and water in communities that have long borne the brunt of pollution,” said Congressman Steny Hoyer. “Thanks to the Inflation Reduction Act that I brought to the House Floor as Majority Leader last Congress, the Port of Baltimore is getting the tools it needs to upgrade its equipment, improve electric charging infrastructure, and fight the climate crisis in a way that benefits Marylanders across the state. As Chair of the Regional Leadership Council, I appreciate Administrator Regan and the Biden-Harris Administration’s partnership as we continue to ensure the historic investments Democrats passed last Congress reach every community in America. We must continue to work together to strengthen the Port of Baltimore and ensure environmental justice for all Marylanders.”

    The Port of Baltimore generates about 20,300 direct jobs, with more than 273,000 jobs overall linked to port activities. The funding will enable the Maryland Port Administration and its private partners to purchase 213 pieces of new zero-emission vehicles, equipment, and charging infrastructure that will replace old, inefficient, and polluting diesel combustion engines. The funding will also pay for capacity upgrades to the port’s electrical grid, which will help significantly reduce greenhouse gas emissions with an estimated 35% decrease in carbon dioxide equivalency compared to 2020 levels. 

    “In Maryland, we aren’t going to choose between building a competitive state and a sustainable one -— we will do both at the same time,” said Gov. Moore. “In partnership with the Biden-Harris Administration, we are investing in the Port of Baltimore and electrifying the way to a greener, cleaner, and healthier future with a strong economy and good-paying jobs.” 

    “The Port of Baltimore is a vital economic engine for the state and a leader among the nation’s ports. As we work to improve the port, it is essential that we build for the future. The projects supported by the Clean Ports Program will help reduce emissions, improve air quality in the Baltimore region and create more clean energy jobs,” said U.S. Senator Ben Cardin. “The Biden-Harris Administration’s bold investments in modernizing our infrastructure are driving our economy forward while enabling us to take on climate change in a meaningful way.” 

    “We fought to pass the Inflation Reduction Act to create good-paying jobs in our communities while tackling the climate crisis head-on, and today’s announcement shows these investments are being put to work,” said U.S. Senator Chris Van Hollen. “This new federal funding will support the Port of Baltimore’s transition to electric infrastructure as part of its plans to reduce emissions – both bolstering the port’s growth and improving air quality for nearby communities. These efforts will help strengthen Baltimore’s economy and create more local jobs for Marylanders.” 

    “The tremendous projects selected for these federal funding awards will improve air quality and combat climate change by dramatically diminishing the Port of Baltimore’s greenhouse gas and toxic pollutant emissions via installation of zero-emission cargo handling equipment and trucks, while also bolstering the Maryland Port Administration’s overall emissions reduction strategy. These extraordinary federal investments into our port are consistent with our collective duty to preserve the planet – while also continuing to uplift the Port of Baltimore’s workforce and surrounding communities in the transition to a zero-emissions facility,” said Congressman Kweisi Mfume. “As exemplified by this compelling announcement, the historic Inflation Reduction Act continues to tackle the climate crisis with fierce urgency right here in Baltimore.”

    “The Port of Baltimore is a critical hub for Maryland and our nation as a whole, supporting good-paying jobs, driving economic growth and keeping goods and resources moving. This investment will improve the health of our region’s environment and provide cleaner air for port workers and nearby communities – all while ensuring that the Port remains a thriving center of commerce for generations to come,” said Congressman John Sarbanes. “I appreciate the Biden-Harris Administration for its continued partnership to enhance clean energy and improve infrastructure in Maryland, and for its tireless efforts to advance environmental justice and create a greener, more sustainable future across the country.”

    “This critical investment into the Port of Baltimore will not only keep us globally competitive, but will help mitigate pollution driving climate change,” said Congressman Dutch Ruppersberger. “The Port of Baltimore has always been at the forefront of efficiency and productivity and now we are leading the nation environmentally. I am proud to have supported this funding request and thank the Biden Administration for this strategic and responsible use of tax dollars.”

    Federal grant funding will also support community engagement with neighborhoods such as Turner Station, Brooklyn, and Curtis Bay.  

    “These improvements will provide an immediate impact to the people who live and work around the Port of Baltimore and who have borne the brunt of transportation-related health impacts,” said Maryland Department of Transportation Secretary Paul Wiedefeld. “Thanks to the EPA’s grants, the Port of Baltimore and its partners are accelerating their collective efforts to support Maryland’s climate goals of reaching net zero by 2045.” 

    Today’s announcement builds on the Biden Administration’s championship of the Port of Baltimore and the State of Maryland’s infrastructure needs, which includes the recent $30.9 million Infrastructure for Rebuilding America award for Dundalk Marine Terminal Reconstruction of Berth 11 and the $7.5 million award for Curtis Creek Drawbridge Rehabilitation and Resiliency projects. The projects directly advance the federal government and State of Maryland’s partnership to recover and rebuild after the DALI struck the Francis Scott Key Bridge.

    “The Maryland Port Administration is committed to integrating our overall mission of increasing cargo and generating jobs through the Port of Baltimore with forward-looking environmental and sustainability solutions,” said Maryland Port Administration Executive Director Jonathan Daniels. “Our customers and port partners are driven to change the way they do business to reduce greenhouse gas emissions, decarbonize, increase electrification throughout our marine terminals, and, most importantly, positively impact our near-port environmental justice communities.”

    To learn more about the clean port project and its benefits, read the Port of Baltimore’s grant proposal.

    MIL OSI USA News

  • MIL-OSI: OTC Markets Group Announces Third Quarter 2024 Earnings Conference Call and Webcast

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Oct. 30, 2024 (GLOBE NEWSWIRE) — OTC Markets Group Inc. (OTCQX: OTCM) today announced it will report its financial results for the third quarter ended September 30, 2024, after the close of the U.S. capital markets on Wednesday, November 6, 2024.

    In addition, OTC Markets Group will host a conference call and webcast on Thursday, November 7, 2024, at 8:30 a.m. eastern time, during which management will discuss the financial results in further detail.

    Webcast:
    The conference webcast and management presentation can be accessed at the following link (the replay will be available until November 6, 2025):
    https://edge.media-server.com/mmc/p/duevohp9

    Live Call:
    Participants intending to ask a question during the live call and Q&A session should also register in advance at:
    https://register.vevent.com/register/BI89e2ac4d7ecb4eee934e4857b442fc24

    Upon registration, participants will receive a dial-in number along with a unique PIN number that can be used to access the live call. Live call participants may also select a “Call Me” option.

    The Quarterly Report, earnings release, transcript of the earnings call, and management presentation will also be available in the Investor Relations section of the OTC Markets Group website at www.otcmarkets.com/investor-relations/overview.

    About OTC Markets Group Inc.

    OTC Markets Group Inc. (OTCQX: OTCM) operates regulated markets for trading 12,000 U.S. and international securities. Our data-driven disclosure standards form the foundation of our three public markets: OTCQX® Best Market, OTCQB® Venture Market, and Pink® Open Market.

    Our OTC Link® Alternative Trading Systems (ATSs) provide critical market infrastructure that broker-dealers rely on to facilitate trading. Our innovative model offers companies more efficient access to the U.S. financial markets.

    OTC Link ATS, OTC Link ECN, and OTC Link NQB are each an SEC regulated ATS, operated by OTC Link LLC, a FINRA and SEC registered broker-dealer, member SIPC.

    To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com.

    Investor Contact:

    Antonia Georgieva
    Chief Financial Officer
    Phone: (212) 220-2215
    Email: ir@otcmarkets.com

    Media Contact:

    OTC Markets Group Inc.
    Phone: (212) 896-4428
    Email: media@otcmarkets.com

    The MIL Network

  • 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

    The MIL Network

  • MIL-OSI: Credit Acceptance Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Southfield, Michigan, Oct. 30, 2024 (GLOBE NEWSWIRE) — Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) today announced consolidated net income of $78.8 million, or $6.35 per diluted share, for the three months ended September 30, 2024 compared to consolidated net income of $70.8 million, or $5.43 per diluted share, for the same period in 2023. Adjusted net income, a non-GAAP financial measure, for the three months ended September 30, 2024 was $109.1 million, or $8.79 per diluted share, compared to $139.5 million, or $10.70 per diluted share, for the same period in 2023. The following table summarizes our financial results:

    (In millions, except per share data)   For the Three Months Ended   For the Nine Months Ended
        September 30, 2024   June 30, 2024   September 30, 2023     September 30, 2024     September 30, 2023
    GAAP net income (loss)   $         78.8    $         (47.1)     $         70.8    $         96.0    $         192.5 
    GAAP net income (loss) per diluted share   $         6.35    $         (3.83)     $         5.43    $         7.68    $         14.73 
                         
    Adjusted net income (1)   $         109.1    $         126.4      $         139.5    $         352.9    $         406.5 
    Adjusted net income per diluted share (1)   $         8.79    $         10.29      $         10.70    $         28.25    $         31.10 

    (1)   Represents a non-GAAP financial measure.

    Our results for the third quarter of 2024 in comparison to the third quarter of 2023 included:

    • A similar decline in forecasted collection rates
      A decline in forecasted collection rates decreased forecasted net cash flows from our loan portfolio by $62.8 million, or 0.6%, compared to a decrease in forecasted collection rates during the third quarter of 2023 that decreased forecasted net cash flows from our loan portfolio by $69.4 million, or 0.7%.
    • A decrease in forecasted profitability for Consumer Loans assigned in 2021 through 2024
      Forecasted profitability was lower than our estimates at September 30, 2023, due to both a decline in forecasted collection rates and slower forecasted net cash flow timing since the third quarter of 2023. The slower forecasted net cash flow timing was primarily a result of a decrease in Consumer Loan prepayments, which remain at below-average levels.
    • Growth in Consumer Loan assignment volume and the average balance of our loan portfolio
      Unit and dollar volumes grew 17.7% and 12.2%, respectively, as compared to the third quarter of 2023. The average balance of our loan portfolio, which is our largest-ever, increased 14.9% and 18.6% on a GAAP and adjusted basis, respectively, as compared to the third quarter of 2023.
    • An increase in the initial spread on Consumer Loan assignments
      The initial spread increased to 21.9% compared to 21.4% on Consumer Loans assigned in the third quarter of 2023.
    • An increase in our average cost of debt
      Our average cost of debt increased from 5.8% to 7.3%, primarily a result of higher interest rates on recently completed or extended secured financings and recently issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
    • A decrease in common shares outstanding due to stock repurchases
      Since the third quarter of 2023, we have repurchased approximately 566,000 shares, or 4.5% of the shares outstanding as of September 30, 2023. There were no stock repurchases during the third quarter of 2024.

    Our results for the third quarter of 2024 in comparison to the second quarter of 2024 included:

    • A smaller decline in forecasted collection rates
      A decline in forecasted collection rates decreased forecasted net cash flows from our loan portfolio by $62.8 million, or 0.6%, compared to a decrease in forecasted collection rates during the second quarter of 2024 that decreased forecasted net cash flows from our loan portfolio by $189.3 million, or 1.7%. The $189.3 million decrease in forecasted net cash flows for the second quarter of 2024 was composed of an ordinary decrease in forecasted net cash flows of $42.1 million, or 0.3%, and an adjustment applied to our forecasting methodology, which upon implementation, reduced forecasted net cash flows by $147.2 million, or 1.4%.
    • A decrease in forecasted profitability for Consumer Loans assigned in 2021 through 2024
      Forecasted profitability was lower than our estimates at June 30, 2024, due to both the decline in forecasted collection rates and the slower forecasted net cash flow timing during the third quarter of 2024 discussed above.
    • Growth in the average balance of our loan portfolio
      The average balance of our loan portfolio, which is our largest-ever, increased 2.6% and 4.3% on a GAAP and adjusted basis, respectively, as compared to the second quarter of 2024.
    • Loss on sale of building
      We recognized a $23.7 million loss during the second quarter of 2024 related to the sale of one of our two office buildings, which we have excluded from our adjusted results. The building was sold to reduce excess office space and eliminate the associated annual operating costs of approximately $2.1 million.

    Consumer Loan Metrics

    Dealers assign retail installment contracts (referred to as “Consumer Loans”) to Credit Acceptance. At the time a Consumer Loan is submitted to us for assignment, we forecast future expected cash flows from the Consumer Loan. Based on the amount and timing of these forecasts and expected expense levels, an advance or one-time purchase payment is made to the related dealer at a price designed to maximize economic profit, a non-GAAP financial measure that considers our return on capital, our cost of capital, and the amount of capital invested. 

    We use a statistical model to estimate the expected collection rate for each Consumer Loan at the time of assignment. We continue to evaluate the expected collection rate for each Consumer Loan subsequent to assignment. Our evaluation becomes more accurate as the Consumer Loans age, as we use actual performance data in our forecast. By comparing our current expected collection rate for each Consumer Loan with the rate we projected at the time of assignment, we are able to assess the accuracy of our initial forecast. The following table compares our aggregated forecast of Consumer Loan collection rates as of September 30, 2024, with the aggregated forecasts as of June 30, 2024, as of December 31, 2023, and at the time of assignment, segmented by year of assignment:

        Forecasted Collection Percentage as of (1)   Current Forecast Variance from
     Consumer Loan Assignment Year   September 30, 2024   June 30, 2024   December 31, 2023   Initial
    Forecast
      June 30, 2024   December 31, 2023   Initial
    Forecast
    2015           65.3  %           65.3  %           65.2  %           67.7  %           0.0  %           0.1  %           -2.4  %
    2016           63.9  %           63.9  %           63.8  %           65.4  %           0.0  %           0.1  %           -1.5  %
    2017           64.7  %           64.7  %           64.7  %           64.0  %           0.0  %           0.0  %           0.7  %
    2018           65.5  %           65.5  %           65.5  %           63.6  %           0.0  %           0.0  %           1.9  %
    2019           67.2  %           67.1  %           66.9  %           64.0  %           0.1  %           0.3  %           3.2  %
    2020           67.6  %           67.7  %           67.6  %           63.4  %           -0.1  %           0.0  %           4.2  %
    2021           63.8  %           64.1  %           64.5  %           66.3  %           -0.3  %           -0.7  %           -2.5  %
    2022           60.6  %           61.1  %           62.7  %           67.5  %           -0.5  %           -2.1  %           -6.9  %
    2023           64.3  %           64.5  %           67.4  %           67.5  %           -0.2  %           -3.1  %           -3.2  %
         2024 (2)           66.6  %           66.6  %           —              67.3  %           0.0  %           —              -0.7  %

    (1)   Represents the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.
    (2)   The forecasted collection rate for 2024 Consumer Loans as of September 30, 2024 includes both Consumer Loans that were in our portfolio as of June 30, 2024 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates for each of these segments:

        Forecasted Collection Percentage as of   Current Forecast Variance from
    2024 Consumer Loan Assignment Period   September 30, 2024   June 30, 2024   Initial
    Forecast
      June 30, 2024   Initial
    Forecast
    January 1, 2024 through June 30, 2024           66.4  %           66.6  %           67.2  %           -0.2  %           -0.8  %
    July 1, 2024 through September 30, 2024           67.0  %           —              67.3  %           —              -0.3  %

    Consumer Loans assigned in 2018 through 2020 have yielded forecasted collection results significantly better than our initial estimates, while Consumer Loans assigned in 2015, 2016, and 2021 through 2023 have yielded forecasted collection results significantly worse than our initial estimates. For all other assignment years presented, actual results have been close to our initial estimates. For the three months ended September 30, 2024, forecasted collection rates declined for Consumer Loans assigned in 2021 through 2024 and were generally consistent with expectations at the start of the period for all other assignment years presented. For the nine months ended September 30, 2024, forecasted collection rates improved for Consumer Loans assigned in 2019, declined for Consumer Loans assigned in 2021 through 2024, and were generally consistent with expectations at the start of the period for all other assignment years presented.

    The changes in forecasted collection rates for the three and nine months ended September 30, 2024 and 2023 impacted forecasted net cash flows (forecasted collections less forecasted dealer holdback payments) as follows:

    (Dollars in millions)   For the Three Months Ended September 30,   For the Nine Months Ended September 30,
    Decrease in Forecasted Net Cash Flows     2024       2023       2024       2023  
    Dealer loans   $         (43.6)     $         (40.3)     $         (173.0)     $         (89.3)  
    Purchased loans             (19.2)               (29.1)               (109.9)               (60.0)  
    Total   $         (62.8)     $         (69.4)     $         (282.9)     $         (149.3)  
    % change from forecast at beginning of period             -0.6  %             -0.7  %             -2.8  %             -1.7  %

    During the second quarter of 2024, we applied an adjustment to our methodology for forecasting the amount of future net cash flows from our loan portfolio, which reduced the forecasted collection rates for Consumer Loans assigned in 2022 through 2024. Consumer Loans assigned in 2022 had continued to underperform our expectations for several quarters. More recently, Consumer Loans assigned in 2023 had also begun exhibiting similar trends of underperformance, although not as severe as Consumer Loans assigned in 2022. During the second quarter of 2024, we determined that we had sufficient Consumer Loan performance experience to estimate the magnitude by which we expected Consumer Loans assigned in 2022 through 2024 would likely underperform our historical collection rates on Consumer Loans with similar characteristics. Accordingly, we applied an adjustment to Consumer Loans assigned in 2022 through 2024 to reduce forecasted collection rates to what we believed the ultimate collection rates would be based on these trends. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as a provision for credit losses. The implementation of this forecast adjustment during the second quarter of 2024 reduced forecasted net cash flows by $147.2 million, or 1.4%, and increased provision for credit losses by $127.5 million.

    During the second quarter of 2023, we adjusted our methodology for forecasting the amount and timing of future net cash flows from our loan portfolio through the utilization of more recent Consumer Loan performance and Consumer Loan prepayment data. We had experienced a decrease in Consumer Loan prepayments to below-average levels and as a result, slowed our forecasted net cash flow timing. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit. Changes in the amount and timing of forecasted net cash flows are recognized in the period of change as a provision for credit losses. The implementation of the adjustment to our forecasting methodology during the second quarter of 2023 reduced forecasted net cash flows by $44.5 million, or 0.5%, and increased provision for credit losses by $71.3 million.

    We have experienced increased levels of uncertainty associated with our estimate of the amount and timing of future net cash flows from our loan portfolio since the beginning of 2020, with realized collections underperforming our expectations during the early stages of the COVID-19 pandemic, outperforming our expectations following the distribution of federal stimulus payments and enhanced unemployment benefits, and underperforming our expectations during the current economic environment. For the period from January 1, 2020 through September 30, 2024, the cumulative change to our forecast of future net cash flows from our loan portfolio has been a decrease of $269.1 million, or 3.0%, as shown in the following table:

    (Dollars in millions)   Increase (Decrease) in Forecasted Net Cash Flows
    Three Months Ended   Total Loans   % Change from Forecast at Beginning of Period
    March 31, 2020   $         (206.5)             -2.3  %
    June 30, 2020             24.4              0.3  %
    September 30, 2020             138.5              1.5  %
    December 31, 2020             (2.7)             0.0  %
    March 31, 2021             107.4              1.1  %
    June 30, 2021             104.5              1.1  %
    September 30, 2021             82.3              0.9  %
    December 31, 2021             31.9              0.3  %
    March 31, 2022             110.2              1.2  %
    June 30, 2022             (43.4)             -0.5  %
    September 30, 2022             (85.4)             -0.9  %
    December 31, 2022             (41.1)             -0.5  %
    March 31, 2023             9.4              0.1  %
    June 30, 2023             (89.3)             -0.9  %
    September 30, 2023             (69.4)             -0.7  %
    December 31, 2023             (57.0)             -0.6  %
    March 31, 2024             (30.8)             -0.3  %
    June 30, 2024             (189.3)             -1.7  %
    September 30, 2024             (62.8)             -0.6  %
    Total   $         (269.1)             -3.0  %

    The following table presents information on Consumer Loan assignments for each of the last 10 years:

         Average   Total Assignment Volume
     Consumer Loan
    Assignment Year
      Consumer Loan (1)   Advance (2)   Initial Loan Term (in months)   Unit Volume   Dollar Volume (2)
    (in millions)
    2015   $         16,354   $         7,272   50   298,288   $         2,167.0
    2016     18,218     7,976   53   330,710     2,635.5
    2017     20,230     8,746   55   328,507     2,873.1
    2018     22,158     9,635   57   373,329     3,595.8
    2019     23,139     10,174   57   369,805     3,772.2
    2020     24,262     10,656   59   341,967     3,641.2
    2021     25,632     11,790   59   268,730     3,167.8
    2022     27,242     12,924   60   280,467     3,625.3
    2023     27,025     12,475   61   332,499     4,147.8
              2024 (3)(4)     26,564     12,018   61   307,215     3,692.1

    (1)   Represents the repayments that we were contractually owed on Consumer Loans at the time of assignment, which include both principal and interest.
    (2)   Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program. Payments of dealer holdback and accelerated dealer holdback are not included.
    (3)   Represents activity for the nine months ended September 30, 2024. Information in this table for each of the years prior to 2024 represents activity for all 12 months of that year.
    (4)   The averages for 2024 Consumer Loans include both Consumer Loans that were in our portfolio as of June 30, 2024 and Consumer Loans assigned during the most recent quarter. The following table provides averages for each of these segments:

        Average
    2024 Consumer Loan Assignment Period   Consumer Loan   Advance   Initial Loan Term (in months)
    January 1, 2024 through June 30, 2024   $         26,554   $         12,033           61
    July 1, 2024 through September 30, 2024             26,586             11,985           61

    The profitability of our loans is primarily driven by the amount and timing of the net cash flows we receive from the spread between the forecasted collection rate and the advance rate, less operating expenses and the cost of capital. Forecasting collection rates accurately at loan inception is difficult. With this in mind, we establish advance rates that are intended to allow us to achieve acceptable levels of profitability across our portfolio, even if collection rates are less than we initially forecast.

    The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate), and the percentage of the forecasted collections that had been realized as of September 30, 2024, as well as forecasted collection rates and spreads at the time of assignment. All amounts, unless otherwise noted, are presented as a percentage of the initial balance of the Consumer Loan (principal + interest). The table includes both dealer loans and purchased loans.

        Forecasted Collection % as of       Spread % as of    
     Consumer Loan Assignment Year   September 30, 2024   Initial Forecast   Advance % (1)   September 30, 2024   Initial Forecast   % of Forecast
    Realized (2)
    2015           65.3  %           67.7  %           44.5  %           20.8  %           23.2  %           99.7  %
    2016           63.9  %           65.4  %           43.8  %           20.1  %           21.6  %           99.4  %
    2017           64.7  %           64.0  %           43.2  %           21.5  %           20.8  %           99.1  %
    2018           65.5  %           63.6  %           43.5  %           22.0  %           20.1  %           98.4  %
    2019           67.2  %           64.0  %           44.0  %           23.2  %           20.0  %           96.1  %
    2020           67.6  %           63.4  %           43.9  %           23.7  %           19.5  %           90.8  %
    2021           63.8  %           66.3  %           46.0  %           17.8  %           20.3  %           80.8  %
    2022           60.6  %           67.5  %           47.4  %           13.2  %           20.1  %           61.3  %
    2023           64.3  %           67.5  %           46.2  %           18.1  %           21.3  %           36.8  %
         2024 (3)           66.6  %           67.3  %           45.3  %           21.3  %           22.0  %           10.7  %

    (1)   Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.
    (2)   Presented as a percentage of total forecasted collections.
    (3)   The forecasted collection rate, advance rate and spread for 2024 Consumer Loans as of September 30, 2024 include both Consumer Loans that were in our portfolio as of June 30, 2024 and Consumer Loans assigned during the most recent quarter. The following table provides forecasted collection rates, advance rates, and spreads for each of these segments:

        Forecasted Collection % as of       Spread % as of
    2024 Consumer Loan Assignment Period   September 30, 2024   Initial Forecast   Advance %   September 30, 2024   Initial Forecast
    January 1, 2024 through June 30, 2024           66.4  %           67.2  %           45.2  %           21.2  %           22.0  %
    July 1, 2024 through September 30, 2024           67.0  %           67.3  %           45.4  %           21.6  %           21.9  %

    The risk of a material change in our forecasted collection rate declines as the Consumer Loans age. For 2020 and prior Consumer Loan assignments, the risk of a material forecast variance is modest, as we have currently realized in excess of 90% of the expected collections. Conversely, the forecasted collection rates for more recent Consumer Loan assignments are less certain as a significant portion of our forecast has not been realized.

    The spread between the forecasted collection rate as of September 30, 2024 and the advance rate ranges from 13.2% to 23.7%, on an annual basis, for Consumer Loans assigned over the last 10 years. The spreads with respect to 2019 and 2020 Consumer Loans have been positively impacted by Consumer Loan performance, which has exceeded our initial estimates by a greater margin than the other years presented. The spread with respect to 2022 Consumer Loans has been negatively impacted by Consumer Loan performance, which has been lower than our initial estimates by a greater margin than the other years presented. The higher spread for 2024 Consumer Loans relative to 2023 Consumer Loans as of September 30, 2024 was primarily a result of Consumer Loan performance, as the performance of 2023 Consumer Loans has been lower than our initial estimates by a greater margin than 2024 Consumer Loans. Additionally, 2024 Consumer Loans had a higher initial spread, which was primarily due to a decrease in the advance rate.

    The following table compares our forecast of aggregate Consumer Loan collection rates as of September 30, 2024 with the forecasts at the time of assignment, for dealer loans and purchased loans separately:

        Dealer Loans   Purchased Loans
        Forecasted Collection Percentage as of (1)       Forecasted Collection Percentage as of (1)    
     Consumer Loan Assignment Year   September 30,
    2024
      Initial
    Forecast
      Variance   September 30,
    2024
      Initial
    Forecast
      Variance
    2015           64.6  %           67.5  %           -2.9  %           69.0  %           68.5  %           0.5  %
    2016           63.1  %           65.1  %           -2.0  %           66.1  %           66.5  %           -0.4  %
    2017           64.0  %           63.8  %           0.2  %           66.3  %           64.6  %           1.7  %
    2018           64.9  %           63.6  %           1.3  %           66.8  %           63.5  %           3.3  %
    2019           66.8  %           63.9  %           2.9  %           67.9  %           64.2  %           3.7  %
    2020           67.5  %           63.3  %           4.2  %           67.9  %           63.6  %           4.3  %
    2021           63.5  %           66.3  %           -2.8  %           64.3  %           66.3  %           -2.0  %
    2022           59.8  %           67.3  %           -7.5  %           62.4  %           68.0  %           -5.6  %
    2023           63.1  %           66.8  %           -3.7  %           67.6  %           69.4  %           -1.8  %
    2024           65.5  %           66.3  %           -0.8  %           70.5  %           70.7  %           -0.2  %

    (1)   The forecasted collection rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment. The forecasted collection rates represent the total forecasted collections we expect to collect on the Consumer Loans as a percentage of the repayments that we were contractually owed on the Consumer Loans at the time of assignment. Contractual repayments include both principal and interest. Forecasted collection rates are negatively impacted by canceled Consumer Loans as the contractual amount owed is not removed from the denominator for purposes of computing forecasted collection rates.

    The following table presents aggregate forecasted Consumer Loan collection rates, advance rates, and spreads (the forecasted collection rate less the advance rate) as of September 30, 2024 for dealer loans and purchased loans separately.  All amounts are presented as a percentage of the initial balance of the Consumer Loan (principal + interest).

        Dealer Loans   Purchased Loans
     Consumer Loan Assignment Year   Forecasted Collection % (1)   Advance % (1)(2)   Spread %   Forecasted Collection % (1)   Advance % (1)(2)   Spread %
    2015           64.6  %           43.4  %           21.2  %           69.0  %           50.2  %           18.8  %
    2016           63.1  %           42.1  %           21.0  %           66.1  %           48.6  %           17.5  %
    2017           64.0  %           42.1  %           21.9  %           66.3  %           45.8  %           20.5  %
    2018           64.9  %           42.7  %           22.2  %           66.8  %           45.2  %           21.6  %
    2019           66.8  %           43.1  %           23.7  %           67.9  %           45.6  %           22.3  %
    2020           67.5  %           43.0  %           24.5  %           67.9  %           45.5  %           22.4  %
    2021           63.5  %           45.1  %           18.4  %           64.3  %           47.7  %           16.6  %
    2022           59.8  %           46.4  %           13.4  %           62.4  %           50.1  %           12.3  %
    2023           63.1  %           44.8  %           18.3  %           67.6  %           49.8  %           17.8  %
    2024           65.5  %           44.3  %           21.2  %           70.5  %           49.0  %           21.5  %

    (1)   The forecasted collection rates and advance rates presented for dealer loans and purchased loans reflect the Consumer Loan classification at the time of assignment.
    (2)   Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program as a percentage of the initial balance of the Consumer Loans.  Payments of dealer holdback and accelerated dealer holdback are not included.

    Although the advance rate on purchased loans is higher as compared to the advance rate on dealer loans, purchased loans do not require us to pay dealer holdback.

    The spread as of September 30, 2024 on 2024 dealer loans was 21.2%, as compared to a spread of 18.3% on 2023 dealer loans. The increase was due to Consumer Loan performance, as the performance of 2023 dealer loans has been lower than our initial estimates by a greater margin than 2024 dealer loans.

    The spread as of September 30, 2024 on 2024 purchased loans was 21.5%, as compared to a spread of 17.8% on 2023 purchased loans. The increase was primarily a result of a higher initial spread on 2024 purchased loans, due to a higher initial forecast and lower advance rate. Additionally, the performance of 2023 purchased loans has been lower than our initial estimates by a greater margin than 2024 purchased loans.

    Consumer Loan Volume

    The following table summarizes changes in Consumer Loan assignment volume in each of the last seven quarters as compared to the same period in the previous year:

        Year over Year Percent Change
    Three Months Ended   Unit Volume   Dollar Volume (1)
    March 31, 2023           22.8  %           18.6  %
    June 30, 2023           12.8  %           8.3  %
    September 30, 2023           13.0  %           10.5  %
    December 31, 2023           26.7  %           21.3  %
    March 31, 2024           24.1  %           20.2  %
    June 30, 2024           20.9  %           16.3  %
    September 30, 2024           17.7  %           12.2  %

    (1)   Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included.

    Consumer Loan assignment volumes depend on a number of factors including (1) the overall demand for our financing programs, (2) the amount of capital available to fund new loans, and (3) our assessment of the volume that our infrastructure can support. Our pricing strategy is intended to maximize the amount of economic profit we generate, within the confines of capital and infrastructure constraints.

    Unit and dollar volumes grew 17.7% and 12.2%, respectively, during the third quarter of 2024 as the number of active dealers grew 8.8% and the average unit volume per active dealer increased 8.4%. Dollar volume increased less than unit volume during the third quarter of 2024 due to a decrease in the average advance paid, due to decreases in the average size of Consumer Loans assigned and the average advance rate. Unit volume for the 28-day period ended October 28, 2024 grew 4.6% compared to the same period in 2023.

    The following table summarizes the changes in Consumer Loan unit volume and active dealers:

      For the Three Months Ended September 30,       For the Nine Months Ended
    September 30,
       
      2024   2023   % Change   2024   2023   % Change
    Consumer Loan unit volume         95,670           81,299           17.7  %           307,215           253,847           21.0  %
    Active dealers (1)         10,678           9,818           8.8  %           14,326           13,008           10.1  %
    Average volume per active dealer         9.0           8.3           8.4  %           21.4           19.5           9.7  %
                           
    Consumer Loan unit volume from dealers active both periods         74,108           67,930           9.1  %           262,564           228,157           15.1  %
    Dealers active both periods         6,595           6,595           —              9,604           9,604           —   
    Average volume per dealer active both periods         11.2           10.3           9.1  %           27.3           23.8           15.1  %
                           
    Consumer loan unit volume from dealers not active both periods         21,562           13,369           61.3  %           44,651           25,690           73.8  %
    Dealers not active both periods         4,083           3,223           26.7  %           4,722           3,404           38.7  %
    Average volume per dealer not active both periods         5.3           4.1           29.3  %           9.5           7.5           26.7  %

    (1)   Active dealers are dealers who have received funding for at least one Consumer Loan during the period.

    The following table provides additional information on the changes in Consumer Loan unit volume and active dealers: 

      For the Three Months Ended September 30,       For the Nine Months Ended
    September 30,
       
      2024     2023     % Change   2024     2023     % Change
    Consumer Loan unit volume from new active dealers         3,447             3,926             -12.2  %           29,441             29,005             1.5  %
    New active dealers (1)         1,038             983             5.6  %           3,428             3,095             10.8  %
    Average volume per new active dealer         3.3             4.0             -17.5  %           8.6             9.4             -8.5  %
                           
    Attrition (2)         -16.4  %           -17.2  %               -10.1  %           -8.9  %    

    (1)   New active dealers are dealers who enrolled in our program and have received funding for their first dealer loan or purchased loan from us during the period.
    (2)   Attrition is measured according to the following formula:  decrease in Consumer Loan unit volume from dealers who have received funding for at least one dealer loan or purchased loan during the comparable period of the prior year but did not receive funding for any dealer loans or purchased loans during the current period divided by prior year comparable period Consumer Loan unit volume.

    The following table shows the percentage of Consumer Loans assigned to us as dealer loans and purchased loans for each of the last seven quarters:

        Unit Volume   Dollar Volume (1)
    Three Months Ended   Dealer Loans   Purchased Loans   Dealer Loans   Purchased Loans
    March 31, 2023           72.1  %           27.9  %           68.1  %           31.9  %
    June 30, 2023           72.4  %           27.6  %           68.6  %           31.4  %
    September 30, 2023           74.8  %           25.2  %           71.7  %           28.3  %
    December 31, 2023           77.2  %           22.8  %           75.0  %           25.0  %
    March 31, 2024           78.2  %           21.8  %           76.6  %           23.4  %
    June 30, 2024           78.5  %           21.5  %           77.3  %           22.7  %
    September 30, 2024           79.5  %           20.5  %           78.4  %           21.6  %

    (1)   Represents advances paid to dealers on Consumer Loans assigned under our portfolio program and one-time payments made to dealers to purchase Consumer Loans assigned under our purchase program.  Payments of dealer holdback and accelerated dealer holdback are not included.

    As of September 30, 2024 and December 31, 2023, the net dealer loans receivable balance was 71.6% and 67.7%, respectively, of the total net loans receivable balance.

    Financial Results

    (Dollars in millions, except per share data) For the Three Months Ended September 30,       For the Nine Months Ended September 30,    
        2024     2023   % Change     2024     2023   % Change
    GAAP average debt $         6,071.1   $         4,831.4           25.7  %   $         5,732.1   $         4,718.7           21.5  %
    GAAP average shareholders’ equity           1,594.2             1,731.3           -7.9  %             1,632.1             1,719.1           -5.1  %
    Average capital $         7,665.3   $         6,562.7           16.8  %   $         7,364.2   $         6,437.8           14.4  %
    GAAP net income $         78.8   $         70.8           11.3  %   $         96.0   $         192.5           -50.1  %
    Diluted weighted average shares outstanding   12,415,143     13,039,638           -4.8  %     12,494,011     13,068,998           -4.4  %
    GAAP net income per diluted share $         6.35   $         5.43           16.9  %   $         7.68   $         14.73           -47.9  %

    The increase in GAAP net income for the three months ended September 30, 2024, as compared to the same period in 2023, was primarily a result of the following:

    • An increase in finance charges of 14.9% ($65.9 million), primarily due to an increase in the average balance of our loan portfolio.
    • An increase in premiums earned of 20.7% ($4.3 million), primarily due to growth in the size of our reinsurance portfolio, which resulted from growth in new Consumer Loan assignments and an increase in the average premium written per reinsured vehicle service contract in recent periods.
    • An increase in operating expenses of 17.1% ($18.9 million), primarily due to:
      • An increase in salaries and wages expense of 15.9% ($10.6 million), primarily due to increases in (i) the number of team members as we are investing in our business with the goal of increasing the speed at which we enhance our product for dealers and consumers and (ii) fringe benefits, primarily due to higher medical claims.
      • An increase in general and administrative expenses of 36.2% ($7.7 million), primarily due to an increase in legal expenses.
    • An increase in interest expense of 57.7% ($40.7 million), due to:
      • An increase in our average cost of debt, which increased interest expense by $22.6 million, primarily as a result of higher interest rates on recently completed or extended secured financings and recently issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
      • An increase in our average outstanding debt balance, which increased interest expense by $18.1 million, primarily due to borrowings used to fund the growth of our loan portfolio and stock repurchases.

    The decrease in GAAP net income for the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily a result of the following:

    • An increase in interest expense of 64.2% ($120.5 million), due to:
      • An increase in our average cost of debt, which increased interest expense by $80.2 million, primarily as a result of higher interest rates on recently completed or extended secured financings and recently issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
      • An increase in our average outstanding debt balance, which increased interest expense by $40.3 million, primarily due to borrowings used to fund the growth of our loan portfolio and stock repurchases.
    • An increase in provision for credit losses of 20.8% ($118.8 million), primarily due to an increase in provision for credit losses on forecast changes of $111.5 million, due to a greater decline in Consumer Loan performance and slower net cash flow timing during the first nine months of 2024 compared to the first nine months of 2023.

    During the first nine months of 2024, we decreased our estimate of future net cash flows by $282.9 million, or 2.8%, to reflect a decline in forecasted collection rates during the period, and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments, which remain at below-average levels. Historically, Consumer Loan prepayments have been lower in periods with less availability of consumer credit. The $282.9 million decrease in forecasted net cash flows for the first nine months of 2024 was composed of an ordinary decrease in forecasted net cash flows of $135.7 million, or 1.4%, and an adjustment applied to our forecasting methodology during the second quarter of 2024, which upon implementation, reduced forecasted net cash flows by $147.2 million, or 1.4%, and increased our provision for credit losses by $127.5 million.

    During the first nine months of 2023, we decreased our estimate of future net cash flows by $149.3 million, or 1.7%, to reflect a decline in forecasted collection rates during the period and slowed our forecasted net cash flow timing to reflect a decrease in Consumer Loan prepayments. The $149.3 million decrease in forecasted net cash flows for the first nine months of 2023 was composed of an ordinary decrease in forecasted net cash flows of $104.8 million, or 1.2%, and an adjustment to our forecasting methodology during the second quarter of 2023, which upon implementation, decreased our estimate of future net cash flows by $44.5 million, or 0.5%, and increased our provision for credit losses by $71.3 million.

    The following table summarizes each component of provision for credit losses:

    (In millions)   For the Nine Months Ended September 30,    
    Provision for Credit Losses     2024     2023   Change
    Forecast changes   $         430.9   $         319.4   $         111.5
    New Consumer Loan assignments             260.4             253.1             7.3
    Total   $         691.3   $         572.5   $         118.8
    • An increase in operating expenses of 10.2% ($35.1 million), primarily due to:
      • An increase in salaries and wages expense of 8.2% ($17.5 million), primarily due to increases in (i) the number of team members as we are investing in our business with the goal of increasing the speed at which we enhance our product for dealers and consumers and (ii) fringe benefits, primarily due to higher medical claims.
      • An increase in general and administrative expense of 26.9% ($16.1 million), primarily due to increases in legal and technology systems expenses.
    • A loss on sale of building of $23.7 million related to the sale of one of our two office buildings. The building was sold to reduce excess office space and eliminate the associated annual operating costs of approximately $2.1 million.
    • An increase in premiums earned of 22.9% ($13.3 million), primarily due to growth in the size of our reinsurance portfolio, which resulted from growth in new Consumer Loan assignments and an increase in the average premium written per reinsured vehicle service contract in recent periods.
    • A decrease in provision for income taxes of 29.1% ($17.1 million), primarily due to a decrease in pre-tax income.
    • An increase in finance charges of 13.1% ($170.7 million), primarily due to an increase in the average balance of our loan portfolio.

    Adjusted financial results are provided to help shareholders understand our financial performance. The financial data below is non-GAAP, unless labeled otherwise. We use adjusted financial information internally to measure financial performance and to determine certain incentive compensation. We also use economic profit as a framework to evaluate business decisions and strategies, with the objective to maximize economic profit over the long term. In addition, certain debt facilities utilize adjusted financial information for the determination of loan collateral values and to measure financial covenants. The table below shows our results following adjustments to reflect non-GAAP accounting methods. Material adjustments are explained in the table footnotes and the subsequent “Floating Yield Adjustment” and “Senior Notes Adjustment” sections. Measures such as adjusted average capital, adjusted net income, adjusted net income per diluted share, adjusted interest expense (after-tax), adjusted net income plus adjusted interest expense (after-tax), adjusted return on capital, adjusted revenue, operating expenses, adjusted loans receivable, economic profit, and economic profit per diluted share are non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP.

    Adjusted financial results for the three and nine months ended September 30, 2024, compared to the same periods in 2023, include the following:

    (Dollars in millions, except per share data) For the Three Months Ended September 30,       For the Nine Months Ended
    September 30,
       
        2024       2023     % Change     2024       2023     % Change
    Adjusted average capital $         8,387.6      $         7,023.9              19.4  %   $         7,976.2      $         6,801.6              17.3  %
    Adjusted net income $         109.1      $         139.5              -21.8  %   $         352.9      $         406.5              -13.2  %
    Adjusted interest expense (after-tax) $         85.6      $         54.8              56.2  %   $         237.3      $         146.1              62.4  %
    Adjusted net income plus adjusted interest expense (after-tax) $         194.7      $         194.3              0.2  %   $         590.2      $         552.6              6.8  %
    Adjusted return on capital           9.3  %             11.1  %           -16.2  %             9.9  %             10.8  %           -8.3  %
    Cost of capital           7.3  %             7.1  %           2.8  %             7.4  %             6.8  %           8.8  %
    Economic profit $         41.4      $         69.1              -40.1  %   $         149.0      $         204.6              -27.2  %
    Diluted weighted average shares outstanding   12,415,143        13,039,638              -4.8  %     12,494,011        13,068,998              -4.4  %
    Adjusted net income per diluted share $         8.79      $         10.70              -17.9  %   $         28.25      $         31.10              -9.2  %
    Economic profit per diluted share $         3.33      $         5.30              -37.2  %   $         11.93      $         15.66              -23.8  %

    Economic profit decreased 40.1% and 27.2% for the three and nine months ended September 30, 2024, as compared to the same periods in 2023. Economic profit is a function of the return on capital in excess of the cost of capital and the amount of capital invested in the business. The following table summarizes the impact each of these components had on the changes in economic profit for the three and nine months ended September 30, 2024, as compared to the same periods in 2023:

    (In millions) Year over Year Change in Economic Profit
      For the Three Months Ended September 30, 2024   For the Nine Months Ended September 30, 2024
    Decrease in adjusted return on capital $         (37.3)     $         (58.1)  
    Increase in cost of capital           (3.8)               (33.0)  
    Increase in adjusted average capital           13.4                35.5   
    Decrease in economic profit $         (27.7)     $         (55.6)  

    The decrease in economic profit for the three months ended September 30, 2024, as compared to the same period in 2023, was primarily a result of the following:

    • A decrease in our adjusted return on capital of 180 basis points, primarily due to a decrease in the yield used to recognize adjusted finance charges on our loan portfolio, primarily due to both a decline in forecasted collection rates and slower forecasted net cash flow timing since the second quarter of 2023. The slower forecasted net cash flow timing was primarily a result of a decrease in Consumer Loan prepayments, which remain at below-average levels.
    • An increase in adjusted average capital of 19.4%, primarily due to an increase in the average balance of our loan portfolio.

    The decrease in economic profit for the nine months ended September 30, 2024, as compared to the same period in 2023, was primarily a result of the following:

    • A decrease in our adjusted return on capital of 90 basis points, primarily due to:
      • A decrease in the yield used to recognize adjusted finance charges on our loan portfolio decreased our adjusted return on capital by 130 basis points, primarily due to both a decline in forecasted collection rates and slower forecasted net cash flow timing since the first quarter of 2023. The slower forecasted net cash flow timing was primarily a result of a decrease in Consumer Loan prepayments, which remain at below-average levels.
      • Slower growth in operating expenses increased our adjusted return on capital by 30 basis points as operating expenses grew by 10.2% while adjusted average capital grew by 17.3%.
    • An increase in our cost of capital, primarily due to an increase in our cost of debt, primarily as a result of higher interest rates on recently completed or extended secured financings and recently issued senior notes and the repayment of older secured financings and senior notes with lower interest rates.
    • An increase in adjusted average capital of 17.3%, primarily due to an increase in the average balance of our loan portfolio.

    The following table shows adjusted revenue and operating expenses as a percentage of adjusted average capital, the adjusted return on capital, and the percentage change in adjusted average capital for each of the last eight quarters, compared to the same period in the prior year:

        For the Three Months Ended
        Sept. 30, 2024   Jun. 30, 2024   Mar. 31, 2024   Dec. 31, 2023   Sept. 30, 2023   Jun. 30, 2023   Mar. 31, 2023   Dec. 31, 2022
    Adjusted revenue as a percentage of adjusted average capital (1)           18.2  %           19.6  %           19.8  %           20.2  %           20.7  %           21.2  %           20.6  %           22.0  %
    Operating expenses as a percentage of adjusted average capital (1)           6.2  %           6.2  %           6.7  %           6.3  %           6.3  %           6.9  %           7.2  %           6.4  %
    Adjusted return on capital (1)           9.3  %           10.3  %           10.1  %           10.6  %           11.1  %           11.1  %           10.3  %           12.0  %
    Percentage change in adjusted average capital compared to the same period in the prior year           19.4  %           17.6  %           14.6  %           11.5  %           8.8  %           6.2  %           1.0  %           -2.4  %

    (1)   Annualized.

    The decrease in adjusted return on capital for the three months ended September 30, 2024, as compared to the three months ended June 30, 2024, was primarily due to a decrease in the yield used to recognize adjusted finance charges on our loan portfolio, primarily due to both a decline in Consumer Loan performance and slower forecasted net cash flow timing in the second and third quarters of 2024, which is being recorded over time as an adjustment to the yield used to recognize adjusted finance charges.

    The following tables provide a reconciliation of non-GAAP measures to GAAP measures.  Certain amounts do not recalculate due to rounding.

    (Dollars in millions, except per share data)   For the Three Months Ended
        Sept. 30, 2024   Jun. 30, 2024   Mar. 31, 2024   Dec. 31, 2023   Sept. 30, 2023   Jun. 30, 2023   Mar. 31, 2023   Dec. 31, 2022
    Adjusted net income                                
    GAAP net income (loss)   $         78.8      $         (47.1)     $         64.3      $         93.6      $         70.8      $         22.2      $         99.5      $         127.3   
    Floating yield adjustment (after-tax)             (115.1)               (96.1)               (92.4)               (83.9)               (76.4)               (73.9)               (75.9)               (69.3)  
    GAAP provision for credit losses (after-tax)             142.2                246.9                143.2                126.1                142.1                192.9                 105.8                100.4   
    Loss on sale of building (1)             —                18.3                —                —                —                 —                 —                —   
    Senior notes adjustment (after-tax)             —                —                —                (2.6)               (0.5)               (0.6)               (0.5)               (0.5)  
    Income tax adjustment (2)             3.2                4.4                2.3                (4.1)               3.5                (0.6)               (1.9)               (1.8)  
    Adjusted net income   $         109.1      $         126.4      $         117.4      $         129.1      $         139.5      $         140.0      $         127.0      $         156.1   
                                     
    Adjusted net income per diluted share (3)   $         8.79     $         10.29     $         9.28     $         10.06     $         10.70     $         10.69     $         9.71     $         11.74  
    Diluted weighted average shares outstanding     12,415,143       12,282,174       12,646,529       12,837,181       13,039,638       13,099,961       13,073,316       13,294,506  
                                     
    Adjusted revenue                                
    GAAP total revenue   $         550.3      $         538.2      $         508.0      $         491.6      $         478.6      $         477.9      $         453.8      $         459.0   
    Floating yield adjustment             (149.4)               (124.8)               (120.0)               (108.9)               (99.3)               (96.1)               (98.4)               (90.0)  
    GAAP provision for claims             (18.5)               (20.3)               (17.0)               (16.6)               (16.5)               (19.7)               (17.9)               (12.4)  
    Adjusted revenue   $         382.4      $         393.1      $         371.0      $         366.1      $         362.8      $         362.1      $         337.5      $         356.6   
                                     
    Adjusted average capital                                
    GAAP average debt   $         6,071.1      $         5,818.2      $         5,306.8      $         4,986.3      $         4,831.4      $         4,730.3      $         4,594.7      $         4,591.1   
    Deferred debt issuance adjustment             —                —                —                20.9                24.5                24.0                21.2                21.3   
    Senior notes debt adjustment             —                —                —                2.8                3.4                3.4                3.4                3.4   
    Adjusted average debt             6,071.1                5,818.2                5,306.8                5,010.0                4,859.3                4,757.7                4,619.3                4,615.8   
    GAAP average shareholders’ equity             1,594.2                1,623.5                1,678.5                1,734.3                1,731.3                1,752.6                1,673.3                1,635.2   
    Senior notes equity adjustment             —                —                —                2.0                2.9                3.4                4.0                4.5   
    Income tax adjustment (4)             (118.5)               (118.5)               (118.5)               (118.5)               (118.5)               (118.5)               (118.5)               (118.5)  
    Floating yield adjustment             840.8                710.1                641.0                606.5                548.9                433.9                373.7                353.2   
    Adjusted average equity             2,316.5                2,215.1                2,201.0                2,224.3                2,164.6                2,071.4                1,932.5                1,874.4   
    Adjusted average capital   $         8,387.6      $         8,033.3      $         7,507.8      $         7,234.3      $         7,023.9      $         6,829.1      $         6,551.8      $         6,490.2   
                                     
    Adjusted revenue as a percentage of adjusted average capital (5)             18.2  %             19.6  %             19.8  %             20.2  %             20.7  %             21.2  %             20.6  %             22.0  %
                                     
    Adjusted loans receivable                                
    GAAP loans receivable, net   $         7,781.5      $         7,547.7      $         7,345.6      $         6,955.3      $         6,780.5      $         6,610.3      $         6,500.3      $         6,297.7   
    Floating yield adjustment             1,100.8                1,065.6                869.7                803.8                748.9                663.7                509.2                470.2   
    Adjusted loans receivable   $         8,882.3      $         8,613.3      $         8,215.3      $         7,759.1      $         7,529.4      $         7,274.0      $         7,009.5      $         6,767.9   
                                     
    Adjusted interest expense (after-tax)                                
    GAAP interest expense   $         111.2      $         104.5      $         92.5      $         78.8      $         70.5      $         62.8      $         54.4      $         49.4   
    Senior notes adjustment             —                —                —                 3.5                0.7                0.7                0.7                0.7   
    Adjusted interest expense (pre-tax)             111.2                104.5                92.5                82.3                71.2                63.5                55.1                50.1   
    Adjustment to record tax effect (2)             (25.6)               (24.0)               (21.3)               (18.9)               (16.4)               (14.6)               (12.7)               (11.5)  
    Adjusted interest expense (after-tax)   $         85.6      $         80.5      $         71.2      $         63.4      $         54.8      $         48.9      $         42.4      $         38.6   

    (1)   The sale of one of our two office buildings in June 2024 resulted in a loss on the sale of the asset. As this transaction is both unusual and infrequent in nature, we applied this adjustment to remove the impact of the loss on sale of building from our adjusted net income.
    (2)   Adjustment to record taxes at our estimated long-term effective income tax rate of 23%. 
    (3)   Net income per diluted share is computed independently for each of the quarters presented. Therefore, the sum of quarterly net income per diluted share information may not equal year-to-date net income per diluted share.
    (4)   The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in the reversal of $118.5 million of provision for income taxes to reflect the new federal statutory income tax rate. This adjustment removes the impact of this reversal from adjusted average capital. We believe the income tax adjustment provides a more accurate reflection of the performance of our business as we are recognizing provision for income taxes at the applicable long-term effective tax rate for the period.
    (5)   Annualized.

    (Dollars in millions)   For the Three Months Ended
        Sept. 30, 2024   Jun. 30, 2024   Mar. 31, 2024   Dec. 31, 2023   Sept. 30, 2023   Jun. 30, 2023   Mar. 31, 2023   Dec. 31, 2022
    Adjusted return on capital (1)                                
    Adjusted net income   $         109.1      $         126.4      $         117.4      $         129.1      $         139.5      $         140.0      $         127.0      $         156.1   
    Adjusted interest expense (after-tax)             85.6                80.5                71.2                63.4                54.8                48.9                42.4                38.6   
    Adjusted net income plus adjusted interest expense (after-tax)   $         194.7      $         206.9      $         188.6      $         192.5      $         194.3      $         188.9      $         169.4      $         194.7   
                                     
    Reconciliation of GAAP return on equity to adjusted return on capital (4)                                
    GAAP return on equity (2)             19.8  %             -11.6  %             15.3  %             21.6  %             16.4  %             5.1  %             23.8  %             31.1  %
    Non-GAAP adjustments             -10.5  %             21.9  %             -5.2  %             -11.0  %             -5.3  %             6.0  %             -13.5  %             -19.1  %
    Adjusted return on capital (1)             9.3  %             10.3  %             10.1  %             10.6  %             11.1  %             11.1  %             10.3  %             12.0  %
                                     
    Economic profit                                
    Adjusted return on capital             9.3  %             10.3  %             10.1  %             10.6  %             11.1  %             11.1  %             10.3  %             12.0  %
    Cost of capital (3) (4)             7.3  %             7.5  %             7.3  %             7.6  %             7.1  %             6.7  %             6.6  %             6.6  %
    Adjusted return on capital in excess of cost of capital             2.0  %             2.8  %             2.8  %             3.0  %             4.0  %             4.4  %             3.7  %             5.4  %
    Adjusted average capital   $         8,387.6      $         8,033.3      $         7,507.8      $         7,234.3      $         7,023.9      $         6,829.1      $         6,551.8      $         6,490.2   
        Economic profit   $         41.4      $         56.2      $         51.4      $         55.9      $         69.1      $         74.1      $         61.4      $         88.1   
                                     
    Reconciliation of GAAP net income (loss) to economic profit                                
    GAAP net income (loss)   $         78.8      $         (47.1)     $         64.3      $         93.6      $         70.8      $         22.2      $         99.5      $         127.3   
    Non-GAAP adjustments             30.3                173.5                53.1                35.5                68.7                117.8                27.5                28.8   
    Adjusted net income             109.1                126.4                117.4                129.1                139.5                140.0                127.0                156.1   
    Adjusted interest expense (after-tax)             85.6                80.5                71.2                63.4                54.8                48.9                42.4                38.6   
    Adjusted net income plus adjusted interest expense (after-tax)             194.7                206.9                188.6                 192.5                194.3                188.9                169.4                194.7   
    Less: cost of capital             153.3                150.7                137.2                136.6                125.2                114.8                108.0                106.6   
    Economic profit   $         41.4      $         56.2      $         51.4      $         55.9      $         69.1      $         74.1      $         61.4      $         88.1   
                                     
    Economic profit per diluted share (5)   $         3.33      $         4.58      $         4.06      $         4.35      $         5.30      $         5.66      $         4.70      $         6.63   
                                     
    Operating expenses as a percentage of adjusted average capital (4)             6.2  %             6.2  %             6.7  %             6.3  %             6.3  %             6.9  %             7.2  %             6.4  %
                                     
    Percentage change in adjusted average capital compared to the same period in the prior year             19.4  %             17.6  %             14.6  %             11.5  %             8.8  %             6.2  %             1.0  %             -2.4  %

    (1)   Adjusted return on capital is defined as adjusted net income plus adjusted interest expense (after-tax) divided by adjusted average capital.
    (2)   Calculated by dividing GAAP net income (loss) by GAAP average shareholders’ equity.

    (3)   The cost of capital includes both a cost of equity and a cost of debt.  The cost of equity capital is determined based on a formula that considers the risk of the business and the risk associated with our use of debt.  The formula utilized for determining the cost of equity capital is as follows: (the average 30-year Treasury rate + 5%) + [(1 – tax rate) x (the average 30-year Treasury rate + 5% – pre-tax average cost of debt rate) x average debt/(average equity + average debt x tax rate)].  For the periods presented, the average 30-year Treasury rate and the adjusted pre-tax average cost of debt were as follows:

        For the Three Months Ended
        Sept. 30, 2024   Jun. 30, 2024   Mar. 31, 2024   Dec. 31, 2023   Sept. 30, 2023   Jun. 30, 2023   Mar. 31, 2023   Dec. 31, 2022
    Average 30-year Treasury rate           4.3  %           4.6  %           4.3  %           4.7  %           4.2  %           3.8  %           3.8  %           4.0  %
    Adjusted pre-tax average cost of debt (4)           7.3  %           7.2  %           7.0  %           6.3  %           5.9  %           5.3  %           4.8  %           4.3  %

    (4)   Annualized.
    (5)   Economic profit per diluted share is computed independently for each of the quarters presented. Therefore, the sum of quarterly economic profit per diluted share information may not equal year-to-date economic profit per diluted share.

    (In millions, except share and per share data)   For the Nine Months Ended September 30,
          2024       2023  
    Adjusted net income        
    GAAP net income   $         96.0      $         192.5   
    Floating yield adjustment (after-tax)             (303.6)               (226.2)  
    GAAP provision for credit losses (after-tax)             532.3                440.8   
    Loss on sale of building (1)             18.3                —   
    Senior notes adjustment (after-tax)             —                (1.6)  
    Income tax adjustment (2)             9.9                1.0   
    Adjusted net income   $         352.9      $         406.5   
             
    Adjusted net income per diluted share   $         28.25     $         31.10  
    Diluted weighted average shares outstanding     12,494,011       13,068,998  
             
    Adjusted average capital        
    GAAP average debt   $         5,732.1      $         4,718.7   
    Deferred debt issuance adjustment             —                23.3   
    Senior notes debt adjustment             —                3.4   
    Adjusted average debt             5,732.1                4,745.4   
    GAAP average shareholders’ equity             1,632.1                1,719.1   
    Senior notes equity adjustment             —                3.4   
    Income tax adjustment (3)             (118.5)               (118.5)  
    Floating yield adjustment             730.5                452.2   
    Adjusted average equity             2,244.1                2,056.2   
    Adjusted average capital   $         7,976.2      $         6,801.6   
             
    Adjusted interest expense (after-tax)        
    GAAP interest expense   $         308.2      $         187.7   
    Senior notes adjustment             —                2.1   
    Adjusted interest expense (pre-tax)             308.2                189.8   
    Adjustment to record tax effect (2)             (70.9)               (43.7)  
    Adjusted interest expense (after-tax)   $         237.3      $         146.1   
             
    Adjusted return on capital (5)        
    Adjusted net income   $         352.9      $         406.5   
    Adjusted interest expense (after-tax)             237.3                146.1   
        Adjusted net income plus adjusted interest expense (after-tax)   $         590.2      $         552.6   
             
    Reconciliation of GAAP return on equity to adjusted return on capital (7)        
    GAAP return on equity (4)             7.8  %             14.9  %
    Non-GAAP adjustments             2.1  %             -4.1  %
    Adjusted return on capital (5)             9.9  %             10.8  %
             
    Economic profit        
    Adjusted return on capital             9.9  %             10.8  %
    Cost of capital (6) (7)             7.4  %             6.8  %
    Adjusted return on capital in excess of cost of capital             2.5  %             4.0  %
    Adjusted average capital   $         7,976.2      $         6,801.6   
        Economic profit   $         149.0      $         204.6   
             
    Reconciliation of GAAP net income to economic profit        
    GAAP net income   $         96.0      $         192.5   
    Non-GAAP adjustments             256.9                214.0   
    Adjusted net income             352.9                406.5   
    Adjusted interest expense (after-tax)             237.3                146.1   
    Adjusted net income plus adjusted interest expense (after-tax)             590.2                552.6   
    Less: cost of capital             441.2                348.0   
    Economic profit   $         149.0      $         204.6   
             
    Economic profit per diluted share (8)   $         11.93      $         15.66   

    (1)   The sale of one of our two office buildings in June 2024 resulted in a loss on the sale of the asset. As this transaction is both unusual and infrequent in nature, we applied this adjustment to remove the impact of the loss on sale of building from our adjusted net income.   
    (2)        Adjustment to record taxes at our estimated long-term effective income tax rate of 23%.
    (3)   The enactment of the Tax Cuts and Jobs Act in December 2017 resulted in the reversal of $118.5 million of provision for income taxes to reflect the new federal statutory income tax rate. This adjustment removes the impact of this reversal from adjusted average capital. We believe the income tax adjustment provides a more accurate reflection of the performance of our business as we are recognizing provision for income taxes at the applicable long-term effective tax rate for the period.
    (4)   Calculated by dividing GAAP net income by GAAP average shareholders’ equity.
    (5)   Adjusted return on capital is defined as adjusted net income plus adjusted interest expense after-tax divided by adjusted average capital.
    (6)   The cost of capital includes both a cost of equity and a cost of debt.  The cost of equity capital is determined based on a formula that considers the risk of the business and the risk associated with our use of debt.  The formula utilized for determining the cost of equity capital is as follows: (the average 30-year Treasury rate + 5%) + [(1 – tax rate) x (the average 30-year Treasury rate + 5% – pre-tax average cost of debt rate) x average debt/(average equity + average debt x tax rate)].  For the periods presented, the average 30-year Treasury rate and the adjusted pre-tax average cost of debt were as follows:

        For the Nine Months Ended September 30,
        2024     2023  
    Average 30-year Treasury rate           4.4  %           3.9  %
    Adjusted pre-tax average cost of debt (7)           7.2  %           5.3  %

    (7)   Annualized
    (8)   Economic profit per diluted share is computed independently for each of the quarters presented. Therefore, the sum of quarterly economic profit per diluted share information may not equal year-to-date economic profit per diluted share.

    Floating Yield Adjustment

    The net loan income (finance charge revenue less provision for credit losses expense) that we recognize over the life of a loan equals the cash we collect from the underlying Consumer Loan less the cash we pay to the dealer. We believe the economics of our business are best exhibited by recognizing loan revenue on a level-yield basis over the life of the loan based on expected future net cash flows. The purpose of this non-GAAP adjustment is to provide insight into our business by showing this level yield measure of income. Under GAAP, contractual amounts due in excess of the loan receivable balance at the time of assignment will be reflected as interest income, while contractual amounts due that are not expected to be collected are reflected in the provision for credit losses. Our non-GAAP floating yield adjustment recognizes the net effects of contractual interest income and expected credit losses in a single measure of finance charge revenue, consistent with how we manage our business. The floating yield adjustment recognizes revenue on a level-yield basis based upon expected future net cash flows, with any changes in expected future net cash flows, which are recognized immediately under GAAP as provision for credit losses, recognized over the remaining forecast period (up to 120 months after the origination date of the underlying Consumer Loans) for each individual dealer loan and purchased loan. The floating yield adjustment does not accelerate revenue recognition. Rather, it reduces revenue by taking amounts that are reported under GAAP as provision for credit losses and instead treating them as reductions of revenue over time.

    Under the GAAP methodology we employ, which is known as the current expected credit loss model, or CECL, we are required to recognize:

    • a significant provision for credit losses expense at the time of the loan’s assignment to us for contractual net cash flows we do not expect to realize; and
    • finance charge revenue in subsequent periods that is significantly in excess of our expected yield.

    Due to the GAAP treatment of contractual net cash flows we do not expect to realize at the time of loan assignment (i.e. significant expense at the time of loan assignment, which is offset by higher revenue in subsequent periods), we do not believe the GAAP methodology we employ provides sufficient transparency into the economics of our business, including our results of operations, financial condition, and financial leverage. Our floating yield adjustment enables us to provide measures of income that are not impacted by GAAP’s treatment of contractual net cash flows we do not expect to realize at the time of loan assignment. We believe the floating yield adjustment is presented in a manner which reflects both the economic reality of our business and how the business is managed and provides valuable supplemental information to help investors better understand our business, executive compensation, liquidity, and capital resources.

    Senior Notes Adjustment (applied in periods prior to December 31, 2023)

    This non-GAAP adjustment modifies our GAAP financial results to treat the issuance of certain senior notes as a refinancing of certain previously issued senior notes. Our historical adjusted financial information reflects application of the senior notes adjustment as described below in connection with (i) the issuance by us in 2014 of $300.0 million principal amount of 6.125% senior notes due 2021 (the “2021 senior notes”) and the related retirement of our 9.125% senior notes due 2017 (the “2017 senior notes”) and (ii) the issuance by us in 2019 of $400.0 million principal amount of 5.125% senior notes due 2024 (the “2024 senior notes”) and the related retirement of the 2021 senior notes and our 7.375% senior notes due 2023 (the “2023 senior notes”).

    We issued the 2024 senior notes on December 18, 2019. We used a portion of the net proceeds from the 2024 senior notes to repurchase or redeem all of the $300.0 million outstanding principal amount of the 2021 senior notes, of which $148.2 million was repurchased on December 18, 2019 and the remaining $151.8 million was redeemed on January 17, 2020. We used the remaining net proceeds from the 2024 senior notes, together with borrowings under our revolving credit facility, to redeem in full the $250.0 million outstanding principal amount of the 2023 senior notes on March 15, 2020. Under GAAP, the fourth quarter of 2019 included (i) a pre-tax loss on extinguishment of debt of $1.8 million related to the repurchase of 2021 senior notes in the fourth quarter of 2019 and the redemption of the remaining 2021 senior notes in the first quarter of 2020 and (ii) additional interest expense of $0.3 million on $160.0 million of additional outstanding debt caused by the one month lag from the issuance of the 2024 senior notes and repurchase of 2021 senior notes in the fourth quarter of 2019 to the redemption of the remaining 2021 senior notes in the first quarter of 2020. Under GAAP, the first quarter of 2020 included (i) a pre-tax loss on extinguishment of debt of $7.4 million related to the redemption of 2023 senior notes in the first quarter of 2020 and (ii) additional interest expense of $0.4 million on $160.0 million of additional outstanding debt caused by the one month lag from the issuance of the 2024 senior notes and repurchase of 2021 senior notes in the fourth quarter of 2019 to the redemption of the remaining 2021 senior notes in the first quarter of 2020.

    We issued the 2021 senior notes on January 22, 2014. On February 21, 2014, we used the net proceeds from the 2021 senior notes, together with borrowings under our revolving credit facilities, to redeem in full the $350.0 million outstanding principal amount of the 2017 senior notes. Under GAAP, the first quarter of 2014 included (i) a pre-tax loss on extinguishment of debt of $21.8 million related to the redemption of the 2017 senior notes in the first quarter of 2014 and (ii) additional interest expense of $1.4 million on $276.0 million of additional outstanding debt caused by the one month lag from the issuance of the 2021 senior notes to the redemption of the 2017 senior notes.

    Under our non-GAAP approach, the loss on extinguishment of debt and additional interest expense that were recognized for GAAP purposes were in each case deferred as debt issuance costs to be recognized ratably as interest expense over the term of the newly issued notes. In addition, for adjusted average capital purposes, the impact of additional outstanding debt related to the lag from the issuance of the new notes to the redemption of the previously issued notes was in each case deferred to be recognized ratably over the term of the newly issued notes. Upon the issuance of the 2024 senior notes in the fourth quarter of 2019, the outstanding unamortized balances of the non-GAAP adjustments related to the 2021 senior notes were deferred and were being recognized ratably over the term of the 2024 senior notes, until the repurchase and redemption of the 2024 senior notes in December 2023.

    We believe the application of the senior notes adjustment as described above provided a more accurate reflection of the performance of our business, since we were recognizing the costs incurred with these transactions in a manner consistent with how we recognize the costs incurred when we periodically refinance our other debt facilities. We have determined not to apply the senior notes adjustment in connection with the issuance by us in December 2023 of our 9.250% senior notes due 2028 and the related retirement of the 2024 senior notes, because the adjustment would not be material.

    Cautionary Statement Regarding Forward-Looking Information

    We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target,” or similar expressions, and those regarding our future results, plans, and objectives, are “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. Actual results could differ materially from these forward-looking statements since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 12, 2024, and other risk factors discussed herein or listed from time to time in our reports filed with the SEC and the following:

    Industry, Operational, and Macroeconomic Risks

    • Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
    • Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
    • Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity, and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
    • Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.
    • We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.
    • Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.
    • An outbreak of contagious disease or other public health emergency could materially and adversely affect our business, financial condition, liquidity, and results of operations.
    • The concentration in several states of automobile dealers who participate in our programs could adversely affect us.
    • Reliance on our outsourced business functions could adversely affect our business.
    • Our ability to hire and retain foreign engineering personnel could be hindered by immigration restrictions.
    • We may be unable to execute our business strategy due to current economic conditions.
    • Natural disasters, climate change, military conflicts, acts of war, terrorist attacks and threats, or the escalation of military activity in response to terrorist attacks or otherwise may negatively affect our business, financial condition, and results of operations.
    • Governmental or market responses to climate change and related environmental issues could have a material adverse effect on our business.
    • A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders.

    Capital and Liquidity Risks

    • We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
    • The terms of our debt limit how we conduct our business.
    • A violation of the terms of our asset-backed secured financings or revolving secured warehouse facilities could have a material adverse impact on our operations.
    • Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations, and adversely affect our financial condition.
    • We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
    • Interest rate fluctuations may adversely affect our borrowing costs, profitability, and liquidity.
    • Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition, and results of operations.
    • We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.
    • The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity, and results of operations.

    Technology and Cybersecurity Risks

    • Our dependence on technology could have a material adverse effect on our business.
    • We depend on secure information technology, and a breach of our systems or those of our third-party service providers could result in our experiencing significant financial, legal, and reputational exposure and could materially adversely affect our business, financial condition, and results of operations.
    • Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.
    • Failure to properly safeguard confidential consumer and team member information could subject us to liability, decrease our profitability, and damage our reputation.

    Legal and Regulatory Risks

    • Litigation we are involved in from time to time may adversely affect our financial condition, results of operations, and cash flows.
    • Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
    • The regulations to which we are or may become subject could result in a material adverse effect on our business.

    Other factors not currently anticipated by management may also materially and adversely affect our business, financial condition, and results of operations. We do not undertake, and expressly disclaim any obligation, to update or alter our statements whether as a result of new information, future events, or otherwise, except as required by applicable law.

    Webcast Details

    We will host a webcast on October 31, 2024 at 8:30 a.m. Eastern Time to discuss our third quarter results. The webcast can be accessed live by visiting the “Investor Relations” section of our website at ir.creditacceptance.com or by telephone as described below. Only persons accessing the webcast by telephone will be able to pose questions to the presenters during the webcast. A replay and transcript of the webcast will be archived in the “Investor Relations” section of our website. 

    To participate in the webcast by telephone, you must pre-register at https://register.vevent.com/register/BIc3f0d088751f49af853a2c2511fe2362, or through the link posted on the “Investor Relations” section of our website at ir.creditacceptance.com. Upon registration you will be provided with the dial-in number and a unique PIN to access the webcast by telephone.

    Description of Credit Acceptance Corporation

    We make vehicle ownership possible by providing innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.

    Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the Nasdaq Stock Market under the symbol CACC. For more information, visit creditacceptance.com.

    CREDIT ACCEPTANCE CORPORATION
    CONSOLIDATED STATEMENTS OF INCOME
    (UNAUDITED)
            

    (Dollars in millions, except per share data) For the Three Months Ended September 30,   For the Nine Months Ended September 30,
        2024     2023     2024     2023
    Revenue:              
    Finance charges $         507.6    $         441.7    $         1,474.5    $         1,303.8 
    Premiums earned           25.1              20.8              71.3              58.0 
    Other income           17.6              16.1              50.7              48.5 
    Total revenue           550.3              478.6              1,596.5              1,410.3 
    Costs and expenses:              
    Salaries and wages           77.3              66.7              231.6              214.1 
    General and administrative           29.0              21.3              75.9              59.8 
    Sales and marketing           23.1              22.5              72.4              70.9 
    Total operating expenses           129.4              110.5              379.9              344.8 
                   
    Provision for credit losses on forecast changes           105.9              106.3              430.9              319.4 
    Provision for credit losses on new Consumer Loan assignments           78.8              78.3              260.4              253.1 
    Total provision for credit losses           184.7              184.6              691.3              572.5 
                   
    Interest           111.2              70.5              308.2              187.7 
    Provision for claims           18.5              16.5              55.8              54.1 
    Loss on sale of building           —              —              23.7              — 
    Total costs and expenses           443.8              382.1              1,458.9              1,159.1 
    Income before provision for income taxes           106.5              96.5              137.6              251.2 
    Provision for income taxes           27.7              25.7              41.6              58.7 
    Net income $         78.8    $         70.8    $         96.0    $         192.5 
                   
    Net income per share:              
    Basic $         6.42    $         5.47    $         7.78    $         14.79 
    Diluted $         6.35    $         5.43    $         7.68    $         14.73 
                   
    Weighted average shares outstanding:              
    Basic           12,274,685              12,933,377              12,345,739              13,013,344 
    Diluted           12,415,143              13,039,638              12,494,011              13,068,998 

    CREDIT ACCEPTANCE CORPORATION
    CONSOLIDATED BALANCE SHEETS
    (UNAUDITED)

    (Dollars in millions, except per share data) As of
      September 30, 2024   December 31, 2023
    ASSETS:      
    Cash and cash equivalents $         159.7      $         13.2   
    Restricted cash and cash equivalents           556.6                457.7   
    Restricted securities available for sale           113.9                93.2   
           
    Loans receivable           11,197.6                10,020.1   
    Allowance for credit losses           (3,416.1)               (3,064.8)  
    Loans receivable, net           7,781.5                6,955.3   
           
    Property and equipment, net           15.2                46.5   
    Income taxes receivable           26.4                4.3   
    Other assets           29.9                40.0   
    Total assets $         8,683.2      $         7,610.2   
           
    LIABILITIES AND SHAREHOLDERS’ EQUITY:      
    Liabilities:      
    Accounts payable and accrued liabilities $         364.4      $         318.8   
    Revolving secured lines of credit           1.0                79.2   
    Secured financing           5,257.1                3,990.9   
    Senior notes           990.8                989.0   
    Mortgage note           —                8.4   
    Deferred income taxes, net           423.2                389.2   
    Income taxes payable           0.2                81.0   
    Total liabilities           7,036.7                5,856.5   
           
    Shareholders’ Equity:      
    Preferred stock, $.01 par value, 1,000,000 shares authorized, none issued           —                —   
    Common stock, $.01 par value, 80,000,000 shares authorized, 12,111,600 and 12,522,397 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively           0.1                0.1   
    Paid-in capital           324.5                279.0   
    Retained earnings           1,321.0                1,475.6   
    Accumulated other comprehensive income (loss)           0.9                (1.0)  
    Total shareholders’ equity           1,646.5                1,753.7   
    Total liabilities and shareholders’ equity $         8,683.2      $         7,610.2   

    The MIL Network

  • MIL-OSI: Zoom to Release Financial Results for the Third Quarter of Fiscal Year 2025

    Source: GlobeNewswire (MIL-OSI)

    SAN JOSE, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) — Zoom Video Communications, Inc. (NASDAQ: ZM) today announced it will release its financial results for the third quarter of fiscal year 2025 on Monday, November 25, 2024, after the market closes.

    A live Zoom Webinar of the event can be accessed at 2:00 pm PT / 5:00 pm ET through Zoom’s investor relations website at https://investors.zoom.us. A replay will be available approximately two hours after the conclusion of the live event.

    About Zoom
    Zoom’s mission is to provide an AI-first work platform for human connection. Reimagine teamwork with Zoom Workplace — Zoom’s open collaboration platform with AI Companion empowers teams to be more productive. Together with Zoom Workplace, Zoom’s Business Services for sales, marketing, and customer experience teams, including Zoom Contact Center, strengthen customer relationships throughout the customer lifecycle. Founded in 2011, Zoom is publicly traded (NASDAQ:ZM) and headquartered in San Jose, California. Get more information at zoom.com.

    Public Relations
    Colleen Rodriguez
    Head of Global PR for Zoom
    press@zoom.us

    Investor Relations
    Charles Eveslage
    Head of Investor Relations for Zoom
    investors@zoom.us

    The MIL Network

  • MIL-OSI: Climb Global Solutions Reports Record Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Net Income and Adjusted Net Income up more than 2x to $5.5 Million or $1.19 per Share and $7.1 million or $1.55 per share, respectively; Adjusted EBITDA up 96% to $9.9 Million

    Net Sales up 52% to $119.3 Million, with Adjusted Gross Billings Up 65% to $465.2 Million

    EATONTOWN, N.J., Oct. 30, 2024 (GLOBE NEWSWIRE) — Climb Global Solutions, Inc. (NASDAQ:CLMB) (“Climb”, the “Company”, “we”, or “our”), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, is reporting results for the third quarter ended September 30, 2024.

    Third Quarter 2024 Summary vs. Same Year-Ago Quarter

    • Net sales increased 52% to $119.3 million.
    • Adjusted gross billings (a non-GAAP financial measure defined below) increased 65% to $465.2 million.
    • Net income increased more than 2x to $5.5 million or $1.19 per diluted share.
    • Adjusted net income (a non-GAAP financial measure defined below) also increased more than 2x to $7.1 million or $1.55 per diluted share.
    • Adjusted EBITDA (a non-GAAP financial measure defined below) increased 96% to $9.9 million.

    Management Commentary

    “Q3 was another period of exceptional growth for Climb as we generated record levels across all key financial metrics, while delivering on our acquisition objectives,” said CEO Dale Foster. “Our strong performance was driven by the execution of our core initiatives and the integration of DSS and DataSolutions into our operating platform. We also generated double-digit organic growth in both the U.S. and Europe as we deepened relationships with existing customers while signing new, innovative vendors to our line card.

    “Looking ahead, we will continue to leverage our global infrastructure to foster organic growth while actively evaluating M&A targets that complement our geographic footprint, expand our service and solution offerings and, most importantly, align with our high-performance culture. We expect to unlock additional synergies from our acquisitions and further improve operating leverage as we execute across our global platform. We believe that these initiatives, coupled with our proven track record of accretive M&A, will enable us to close out 2024 on a strong note and achieve another year of record results.”

    Dividend

    Subsequent to quarter end, on October 28, 2024, Climb’s Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable on November 15, 2024, to shareholders of record on November 11, 2024.

    Third Quarter 2024 Financial Results

    Net sales in the third quarter of 2024 increased 52% to $119.3 million compared to $78.5 million for the same period in 2023. This reflects organic growth from new and existing vendors, as well as contributions from the Company’s acquisitions of Douglas Stewart Software & Services, LLC (“DSS”) on July 31, 2024 and DataSolutions Holdings Limited (“DataSolutions”) on October 6, 2023. In addition, adjusted gross billings (“AGB”) in the third quarter of 2024 increased 65% to $465.2 million compared to $281.9 million in the year-ago period.

    Gross profit in the third quarter of 2024 increased 70% to $24.3 million compared to $14.3 million for the same period in 2023. The increase was driven by organic growth from new and existing vendors in both North America and Europe, as well as contributions from DSS and DataSolutions.

    Selling, general, and administrative (“SG&A”) expenses in the third quarter of 2024 were $13.9 million compared to $10.1 million in the year-ago period. SG&A from DSS and DataSolutions drove the majority of the increase as well as variable sales compensation attributed to the growth in AGB. SG&A as a percentage of adjusted gross billings decreased to 3.0% for the third quarter of 2024 compared to 3.6% in the year-ago period.

    Net income in the third quarter of 2024 increased more than 2x to $5.5 million or $1.19 per diluted share, compared to $2.4 million or $0.52 per diluted share for the same period in 2023. Net income was impacted by a $1.2 million charge related to a change in fair value of acquisition contingent consideration associated with DataSolutions. Adjusted net income also increased more than 2x to $7.1 million or $1.55 per diluted share, compared to $2.6 million or $0.56 per diluted share for the year-ago period. The Company’s earnings per diluted share in the third quarter of 2024 was negatively impacted by $0.05 in FX compared to the year-ago period.

    Adjusted EBITDA in the third quarter of 2024 increased 96% to $9.9 million compared to $5.1 million for the same period in 2023. The increase was primarily driven by organic growth from both new and existing vendors, as well as contribution from the Company’s acquisitions of DSS and DataSolutions. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, increased 500 basis points to 41% compared to 36% for the same period in 2023.

    On September 30, 2024, cash and cash equivalents were $22.1 million compared to $36.3 million on December 31, 2023, while working capital decreased by $12.3 million during this period. The decrease in cash was primarily attributed to the cash paid at closing for the acquisition of DSS, $20.9 million, as well as the timing of receivable collections and payables. Climb had $0.9 million of outstanding debt on September 30, 2024, with no borrowings outstanding under its $50 million revolving credit facility.

    For more information on the non-GAAP financial measures discussed in this press release, please see the section titled, “Non-GAAP Financial Measures,” and the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.

    Conference Call

    The Company will conduct a conference call tomorrow, October 31, 2024, at 8:30 a.m. Eastern time to discuss its results for the third quarter ended September 30, 2024.

    Climb management will host the conference call, followed by a question-and-answer period.

    Date: Thursday, October 31, 2024
    Time: 8:30 a.m. Eastern time
    Toll-free dial-in number: (800) 274-8461
    International dial-in number: (203) 518-9814
    Conference ID: CLIMB
    Webcast: Climb’s Q3 2024 Conference Call

    If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

    The conference call will also be available for replay on the investor relations section of the Company’s website at www.climbglobalsolutions.com.

    About Climb Global Solutions

    Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies. Climb operates across the US, Canada and Europe through multiple business units, including Climb Channel Solutions, Grey Matter and Climb Global Services. The Company provides IT distribution and solutions for companies in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.

    Additional information can be found by visiting www.climbglobalsolutions.com.

    Non-GAAP Financial Measures

    Climb Global Solutions uses non-GAAP financial measures, including adjusted gross billings, adjusted net income and adjusted EBITDA, as supplemental measures of the performance of the Company’s business. Use of these financial measures has limitations, and you should not consider them in isolation or use them as substitutes for analysis of Climb’s financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The attached tables provide definitions of these measures and a reconciliation of each non-GAAP financial measure to the most nearly comparable measure under U.S. GAAP.

    Forward-Looking Statements

    The statements in this release, other than statements of historical fact, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These forward-looking statements are subject to certain risks and uncertainties. Many of the forward-looking statements may be identified by words such as ”look forward,” “believes,” “expects,” “intends,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “under construction,” “in development,” “opportunity,” “target,” “outlook,” “maintain,” “continue,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations. In this press release, the forward-looking statements relate to, among other things, declaring and reaffirming our strategic goals, future operating results, and the effects and potential benefits of the strategic acquisition on our business. Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include, without limitation, our ability to recognize the anticipated benefits of the acquisitions of Data Solutions Holdings Limited and Douglas Stewart Software & Services, LLC, the continued acceptance of the Company’s distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, competitive pricing pressures, the successful integration of acquisitions, contribution of key vendor relationships and support programs, inflation, as well as factors that affect the software industry in general. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described in the section entitled “Risk Factors” contained in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and from time to time in the Company’s filings with the Securities and Exchange Commission.

    Company Contact

    Drew Clark
    Chief Financial Officer
    (732) 389-0932
    Drew@ClimbGS.com

    Investor Relations Contact

    Sean Mansouri, CFA or Aaron D’Souza
    Elevate IR
    (720) 330-2829
    CLMB@elevate-ir.com

             
    CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
      (Unaudited)
    (Amounts in thousands, except share and per share amounts)
             
        September 30, 2024   December 31, 2023
             
    ASSETS
             
    Current assets      
      Cash and cash equivalents $ 22,139     $ 36,295  
      Accounts receivable, net of allowance for doubtful accounts of $640 and $709, respectively   247,907       222,269  
      Inventory, net   4,445       3,741  
      Prepaid expenses and other current assets   6,629       6,755  
    Total current assets   281,120       269,060  
             
    Equipment and leasehold improvements, net   12,151       8,850  
    Goodwill   29,628       27,182  
    Other intangibles, net   46,041       26,930  
    Right-of-use assets, net   937       878  
    Accounts receivable long-term, net   752       797  
    Other assets   863       1,077  
    Deferred income tax assets   448       324  
             
    Total assets $ 371,940     $ 335,098  
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY
             
    Current liabilities      
      Accounts payable and accrued expenses $ 273,893     $ 249,648  
      Lease liability, current portion   533       450  
      Term loan, current portion   555       540  
    Total current liabilities   274,981       250,638  
             
      Lease liability, net of current portion   796       879  
      Deferred income tax liabilities   5,671       5,554  
      Term loan, net of current portion   334       752  
      Non-current liabilities   2,490       2,505  
             
    Total liabilities   284,272       260,328  
             
             
    Stockholders’ equity      
      Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares      
      issued, and 4,606,790 and 4,573,448 shares outstanding , respectively   53       53  
      Additional paid-in capital   36,676       34,647  
      Treasury stock, at cost, 677,710 and 711,052 shares, respectively   (12,777 )     (12,623 )
      Retained earnings   62,560       53,215  
      Accumulated other comprehensive income (loss)   1,156       (522 )
    Total stockholders’ equity   87,668       74,770  
    Total liabilities and stockholders’ equity $ 371,940     $ 335,098  
             
    CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
    (Unaudited)
    (Amounts in thousands, except per share data)
                   
      Nine months ended   Three months ended
      September 30,   September 30,
        2024       2023       2024       2023  
                   
    Net Sales $ 303,847     $ 245,229     $ 119,349     $ 78,457  
                   
    Cost of sales, excluding depreciation and amortization expense   244,014       202,053       95,092       64,183  
                   
    Gross profit   59,833       43,176       24,257       14,274  
                   
                   
    Selling, general and administrative expenses   39,433       31,930       13,937       10,122  
    Depreciation & amortization expense   2,933       1,934       1,197       617  
    Acquisition related costs   1,201       277       609       246  
    Total selling, general and administrative expenses   43,567       34,141       15,743       10,985  
                   
    Income from operations   16,266       9,035       8,514       3,289  
                   
    Interest, net   755       760       198       318  
    Foreign currency transaction loss   (688 )     (100 )     (442 )     (140 )
    Change in fair value of acquisition contingent consideration   (1,152 )           (1,152 )      
    Income before provision for income taxes   15,181       9,695       7,118       3,467  
    Provision for income taxes   3,561       2,618       1,659       1,095  
                   
    Net income $ 11,620     $ 7,077     $ 5,459     $ 2,372  
                   
    Income per common share – Basic $ 2.54     $ 1.57     $ 1.19     $ 0.52  
    Income per common share – Diluted $ 2.54     $ 1.57     $ 1.19     $ 0.52  
                   
    Weighted average common shares outstanding – Basic   4,458       4,392       4,476       4,414  
    Weighted average common shares outstanding – Diluted   4,458       4,392       4,476       4,414  
                   
    Dividends paid per common share $ 0.51     $ 0.51     $ 0.17     $ 0.17  
                   
                   
    Reconciliation of GAAP and Non-GAAP Financial Measures (unaudited)            
    (Amounts in thousands, except per share data)              
                   
    The table below presents net sales reconciled to Adjusted Gross Billings (Non-GAAP) (1):        
                   
      Nine months ended   Three months ended
      September 30, September 30,   September 30,   September 30,
        2024       2023       2024       2023  
    Net sales $ 303,847     $ 245,229     $ 119,349     $ 78,457  
    Costs of sales related to sales where the Company is an agent   876,447       618,110       345,835       203,458  
    Adjusted gross billings (Non-GAAP) $ 1,180,294     $ 863,339     $ 465,184     $ 281,915  
                   

    (1) We define adjusted gross billings as net sales in accordance with US GAAP, adjusted for the cost of sales related to sales where the Company is an agent. We provided a reconciliation of adjusted gross billings to net sales, which is the most directly comparable US GAAP measure. We use adjusted gross billings of product and services as a supplemental measure of our performance to gain insight into the volume of business generated by our business, and to analyze the changes to our accounts receivable and accounts payable. Our use of adjusted gross billings of product and services as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted gross billings of product and services or similarly titled measures differently, which may reduce their usefulness as comparative measures.

      The table below presents net income reconciled to adjusted EBITDA (Non-GAAP) (2):
                     
        Nine months ended   Three months ended
        September 30, September 30,   September 30,   September 30,
          2024       2023       2024       2023  
                     
    Net income $ 11,620     $ 7,077     $ 5,459     $ 2,372  
      Provision for income taxes   3,561       2,618       1,659       1,095  
      Depreciation and amortization   2,933       1,934       1,197       617  
      Interest expense   266       94       105       45  
    EBITDA   18,380       11,723       8,420       4,129  
      Share-based compensation   2,810       3,422       904       687  
      Acquisition related costs   1,201       277       609       246  
    Adjusted EBITDA $ 22,391     $ 15,422     $ 9,933     $ 5,062  
                     
                     
        Nine months ended   Three months ended
        September 30, September 30,   September 30,   September 30,
    Components of interest, net   2024       2023       2024       2023  
                     
      Amortization of discount on accounts receivable with extended payment terms $ (23 )   $ (41 )   $ (6 )   $ (12 )
      Interest income   (998 )     (813 )     (297 )     (351 )
      Interest expense   266       94       105       45  
    Interest, net $ (755 )   $ (760 )   $ (198 )   $ (318 )
                     

    (2) We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest and acquisition related costs. We define effective margin as adjusted EBITDA as a percentage of gross profit. We provided a reconciliation of adjusted EBITDA to net income, which is the most directly comparable US GAAP measure. We use adjusted EBITDA as a supplemental measure of our performance to gain insight into our businesses profitability when compared to the prior year and our competitors. Adjusted EBITDA is also a component to our financial covenants in our credit facility. Our use of adjusted EBITDA has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

    The table below presents net income reconciled to adjusted net income (Non-GAAP) (3):
                   
      Nine months ended   Three months ended
    September 30, September 30,   September 30,   September 30,
      2024       2023       2024       2023  
                   
    Net income $ 11,620     $ 7,077     $ 5,459     $ 2,372  
    Acquisition related costs, net of income taxes   901       208       457       185  
    One-time CEO stock grant         1,796              
    Change in fair value of acquisition contingent consideration   1,152             1,152        
    Adjusted net income $ 13,673     $ 9,081     $ 7,068     $ 2,557  
                   
    Adjusted net income per common share – diluted $ 3.00     $ 2.03     $ 1.55     $ 0.56  
                                   

    (3) We define adjusted net income as net income excluding acquisition related costs, net of income taxes, the stock compensation expense recognized for the one-time CEO stock grant, and the change in fair value of acquisition contingent consideration. We provided a reconciliation of adjusted net income to net income, which is the most directly comparable U.S. GAAP measure. We use adjusted net income as a supplemental measure of our performance to gain insight into comparison of our businesses profitability when compared to the prior year. Our use of adjusted net income has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate adjusted net income, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

    The MIL Network

  • MIL-OSI: Oportun to Report Third Quarter 2024 Financial Results on Tuesday, November 12, 2024

    Source: GlobeNewswire (MIL-OSI)

    SAN CARLOS, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) — Oportun (Nasdaq: OPRT), a mission-driven financial services company, will release financial results for its third quarter 2024 on Tuesday, November 12, 2024, after market close.

    Oportun will host a conference call and earnings webcast to discuss results on Tuesday, November 12, 2024, at 5:00 pm ET / 2:00 pm PT. A live webcast of the call will be accessible from Oportun’s investor relations website at investor.oportun.com, and a webcast replay of the call will be available for one year. The dial-in number for the conference call is 1-866-604-1698 (toll-free) or 1-201-389-0844 (international). Participants should call in 10 minutes prior to the scheduled start time.

    About Oportun 
    Oportun (Nasdaq: OPRT) is a mission-driven financial services company that puts its members’ financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than $18.7 billion in responsible and affordable credit, saved its members more than $2.4 billion in interest and fees, and helped its members save an average of more than $1,800 annually. For more information, visit Oportun.com.

    Investor Contact
    Dorian Hare
    (650) 590-4323
    ir@oportun.com

    Media Contact
    Michael Azzano
    Cosmo PR for Oportun
    (415) 596-1978
    michael@cosmo-pr.com

    The MIL Network

  • MIL-OSI: Bitcoin Depot Schedules Third Quarter 2024 Conference Call for Wednesday, November 13th at 10:00 am ET

    Source: GlobeNewswire (MIL-OSI)

    ATLANTA, Oct. 30, 2024 (GLOBE NEWSWIRE) — Bitcoin Depot (“Bitcoin Depot” or the “Company”), a U.S.-based Bitcoin ATM (“BTM”) operator and leading fintech company, will hold a conference call and live audio webcast on Wednesday, November 13th at 10:00 a.m. Eastern time (7:00 a.m. Pacific time) to discuss its financial results for the third quarter ended September 30, 2024. Bitcoin Depot plans to release results before the market open on the same day.

    Call Date: Wednesday, November 13, 2024  
    Time: 10:00 a.m. Eastern time (7:00 a.m. Pacific time)
    U.S. dial-in: 646-968-2525
    International dial-in: 888-596-4144
    Conference ID: 7631242

    The conference call will broadcast live and be available for replay here following the call.

    Please call the conference telephone number approximately 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Bitcoin Depot’s investor relations team at 1-949-574-3860.

    A replay of the call will be available beginning after 2:00 p.m. Eastern time on November 13, 2024, through November 20, 2024.

    U.S. replay number: 609-800-9909
    International replay number: 800-770-2030
    Conference ID: 7631242

    About Bitcoin Depot
    Bitcoin Depot Inc. (Nasdaq: BTM) was founded in 2016 with the mission to connect those who prefer to use cash to the broader, digital financial system. Bitcoin Depot provides its users with simple, efficient and intuitive means of converting cash into Bitcoin, which users can deploy in the payments, spending and investing space. Users can convert cash to bitcoin at Bitcoin Depot kiosks in 48 states and at thousands of name-brand retail locations in 29 states through its BDCheckout product. The Company has the largest market share in North America with approximately 8,000 kiosk locations as of July 1, 2024. Learn more at www.bitcoindepot.com

    Contacts:

    Investors 
    Cody Slach
    Gateway Group, Inc. 
    949-574-3860 
    BTM@gateway-grp.com

    Media 
    Christina Lockwood, Brenlyn Motlagh, Ryan Deloney 
    Gateway Group, Inc.
    949-574-3860 
    BTM@gateway-grp.com

    The MIL Network

  • MIL-OSI: AMSC Reports Second Quarter Fiscal Year 2024 Financial Results and Provides Business Outlook

    Source: GlobeNewswire (MIL-OSI)

    Financial Highlights:

    • Reported Second Quarter Net Income of Nearly $5 Million
    • Generated Nearly $13 Million of Operating Cash Flow During the Quarter
    • Increased Revenue by 60% Year Over Year to Above $54 Million

    Company to host conference call tomorrow, October 31, at 10:00 am ET 

    AYER, Mass., Oct. 30, 2024 (GLOBE NEWSWIRE) — AMSC (Nasdaq: AMSC), a leading system provider of megawatt-scale power resiliency solutions that orchestrate the rhythm and harmony of power on the grid™ and protect and expand the capability and resiliency of our Navy’s fleet, today reported financial results for its second quarter of fiscal year 2024 ended September 30, 2024. The second quarter results include results from NWL, Inc. beginning as of the acquisition date, August 1, 2024.

    Revenues for the second quarter of fiscal 2024 were $54.5 million compared with $34.0 million for the same period of fiscal 2023. The year-over-year increase was primarily driven by the acquisition of NWL, Inc., increased shipments of new energy power systems and electrical control system shipments, versus the year ago period. 

    AMSC’s net income for the second quarter of fiscal 2024 was $4.9 million, or $0.13 per share, compared to a net loss of $2.5 million, or $0.09 per share, for the same period of fiscal 2023. The Company’s non-GAAP net income for the second quarter of fiscal 2024 was $10.0 million, or $0.27 per share, compared with a non-GAAP net income of less than $0.1 million, or $0.00 per share, in the same period of fiscal 2023. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

    Cash, cash equivalents, and restricted cash on September 30, 2024, totaled $74.8 million, compared with $95.5 million at June 30, 2024.

    “AMSC delivered fiscal second quarter net income of nearly $5 million and grew revenue by 60% when compared to the same period last year,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “During the second quarter of fiscal 2024 we booked nearly $60 million of new orders, with new energy power systems orders coming in stronger than previously demonstrated. We ended the quarter with over $200 million in 12-month backlog and over $300 million in total backlog. We are very excited for the second half of the fiscal year and remain focused on our execution as well as improving the resiliency of the power grid.”

    Business Outlook
    For the third quarter ending December 31, 2024, AMSC expects that its revenues will be in the range of $55.0 million to $60.0 million. The Company’s net loss for the third quarter of fiscal 2024 is expected not to exceed $1.0 million, or $0.03 per share. The Company’s non-GAAP net income (as defined below) is expected to exceed $2 million, or $0.05 per share.

    Conference Call Reminder
    In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time on Thursday, October 31, 2024, to discuss the Company’s financial results and business outlook. Those who wish to listen to the live or archived conference call webcast should visit the “Investors” section of the Company’s website at https://ir.amsc.com. The live call can be accessed by dialing 1-844-481-2802 or 1-412-317-0675 and asking to join the AMSC call. A replay of the call may be accessed 2 hours following the call by dialing 1-877-344-7529 and using conference passcode 5836897.

    About AMSC (Nasdaq: AMSC)
    AMSC generates the ideas, technologies and solutions that meet the world’s demand for smarter, cleaner … better energy™. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance.  Through its Marinetec™ Solutions, AMSC provides ship protection systems and is developing propulsion and power management solutions designed to help fleets increase system efficiencies, enhance power quality and boost operational safety.  Through its Windtec® Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. The Company’s solutions are enhancing the performance and reliability of power networks, increasing the operational safety of navy fleets, and powering gigawatts of renewable energy globally. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America. For more information, please visit www.amsc.com.

    AMSC, American Superconductor, D-VAR, D-VAR VVO, Gridtec, Marinetec, Windtec, Neeltran, NEPSI, Smarter, Cleaner … Better Energy, and Orchestrate the Rhythm and Harmony of Power on the Grid are trademarks or registered trademarks of American Superconductor Corporation. All other brand names, product names, trademarks or service marks belong to their respective holders.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this release regarding execution of our goals and strategies; backlog; expectations regarding the second half of fiscal 2024; our expected GAAP and non-GAAP financial results for the quarter ending December 31, 2024; and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: We have a history of operating losses, which may continue in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; We have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us; Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business; Changes in exchange rates could adversely affect our results of operations; We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit; If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data; We may not realize all of the sales expected from our backlog of orders and contracts; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government. The continued funding of such contracts remains subject to annual congressional appropriation, which, if not approved, could reduce our revenue and lower or eliminate our profit; Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business; Pandemics, epidemics or other public health crises may adversely impact our business, financial condition and results of operations; We rely upon third-party suppliers for the components and subassemblies of many of our Grid and Wind products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationship; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; A significant portion of our Wind segment revenues are derived from a single customer. If this customer’s business is negatively affected, it could adversely impact our business; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our business and operations would be adversely impacted in the event of a failure or security breach of our or any critical third parties’ information technology infrastructure and networks; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results; Many of our revenue opportunities are dependent upon subcontractors and other business collaborators; If we fail to implement our business strategy successfully, our financial performance could be harmed; Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share; Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States; We have had limited success marketing and selling our superconductor products and system-level solutions, and our failure to more broadly market and sell our products and solutions could lower our revenue and cash flow; We or third parties on whom we depend may be adversely affected by natural disasters, including events resulting from climate change, and our business continuity and disaster recovery plans may not adequately protect us or our value chain from such events; Adverse changes in domestic and global economic conditions could adversely affect our operating results; Our international operations are subject to risks that we do not face in the United States, which could have an adverse effect on our operating results; Our products face competition, which could limit our ability to acquire or retain customers; We have operations in, and depend on sales in, emerging markets, including India, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these markets. Changes in India’s political, social, regulatory and economic environment may affect our financial performance; Our success depends upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our products may not develop; Industry consolidation could result in more powerful competitors and fewer customers; Increasing focus and scrutiny on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results; Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy: Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business; We may be unable to adequately prevent disclosure of trade secrets and other proprietary information; Our patents may not provide meaningful or long-term protection for our technology, which could result in us losing some or all of our market position; There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products; Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights; Our common stock has experienced, and may continue to experience, market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management’s attention; Unfavorable results of legal proceedings could have a material adverse effect on our business, operating results and financial condition; and the other important factors discussed under the caption “Risk Factors” in Part 1. Item 1A of our Form 10-K for the fiscal year ended March 31, 2024, and our other reports filed with the SEC. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
     
        Three Months Ended     Six Months Ended  
        September 30,     September 30,  
        2024     2023     2024     2023  
    Revenues                                
    Grid   $ 46,936     $ 28,515     $ 79,272     $ 54,251  
    Wind     7,535       5,489       15,489       10,007  
    Total revenues     54,471       34,004       94,761       64,258  
                                     
    Cost of revenues     38,858       25,418       66,923       49,390  
                                     
    Gross margin     15,613       8,586       27,838       14,868  
                                     
    Operating expenses:                                
    Research and development     2,646       1,641       4,931       3,493  
    Selling, general and administrative     10,525       7,946       19,423       15,815  
    Amortization of acquisition-related intangibles     433       538       845       1,076  
    Change in fair value of contingent consideration     2,762       850       6,682       2,200  
    Restructuring           (20 )           (14 )
    Total operating expenses     16,366       10,955       31,881       22,570  
                                     
    Operating loss     (753 )     (2,369 )     (4,043 )     (7,702 )
                                     
    Interest income, net     979       194       2,099       368  
    Other expense, net     (329 )     (204 )     (489 )     (321 )
    Loss before income tax expense (benefit)     (103 )     (2,379 )     (2,433 )     (7,655 )
                                     
    Income tax (benefit) expense     (4,990 )     106       (4,796 )     228  
                                     
    Net income (loss)   $ 4,887     $ (2,485 )   $ 2,363     $ (7,883 )
                                     
    Net income (loss) per common share                                
    Basic   $ 0.13     $ (0.09 )   $ 0.07     $ (0.28 )
    Diluted   $ 0.13     $ (0.09 )   $ 0.06     $ (0.28 )
                                     
    Weighted average number of common shares outstanding                                
    Basic     36,952       28,828       36,317       28,545  
    Diluted     37,499       28,828       36,951       28,545  
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands, except per share data)
     
        September 30, 2024     March 31, 2024  
    ASSETS                
    Current assets:                
    Cash and cash equivalents   $ 72,131     $ 90,522  
    Accounts receivable, net     40,059       26,325  
    Inventory, net     70,880       41,857  
    Prepaid expenses and other current assets     10,806       7,295  
    Restricted cash     1,201       468  
    Total current assets     195,077       166,467  
                     
    Property, plant and equipment, net     38,765       10,861  
    Intangibles, net     7,329       6,369  
    Right-of-use assets     3,744       2,557  
    Goodwill     48,950       43,471  
    Restricted cash     1,454       1,290  
    Deferred tax assets     1,201       1,119  
    Equity-method investments     1,245        
    Other assets     683       637  
    Total assets   $ 298,448     $ 232,771  
                     
    LIABILITIES AND STOCKHOLDERS’ EQUITY                
                     
    Current liabilities:                
    Accounts payable and accrued expenses   $ 25,158     $ 24,235  
    Lease liability, current portion     555       716  
    Debt, current portion           25  
    Contingent consideration           3,100  
    Deferred tax liabilities, current portion     16        
    Deferred revenue, current portion     69,356       50,732  
    Total current liabilities     95,085       78,808  
                     
    Deferred revenue, long term portion     11,915       7,097  
    Lease liability, long term portion     2,814       1,968  
    Deferred tax liabilities     1,591       300  
    Other liabilities     28       27  
    Total liabilities     111,433       88,200  
                     
    Stockholders’ equity:                
    Common stock     398       373  
    Additional paid-in capital     1,253,168       1,212,913  
    Treasury stock     (3,765 )     (3,639 )
    Accumulated other comprehensive income     1,509       1,582  
    Accumulated deficit     (1,064,295 )     (1,066,658 )
    Total stockholders’ equity     187,015       144,571  
    Total liabilities and stockholders’ equity   $ 298,448     $ 232,771  
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
     
        Six Months Ended September 30,  
        2024     2023  
    Cash flows from operating activities:                
                     
    Net income (loss)   $ 2,363     $ (7,883 )
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operations:                
    Depreciation and amortization     2,395       2,234  
    Stock-based compensation expense     2,072       2,468  
    Provision for excess and obsolete inventory     780       1,070  
    Amortization of operating lease right-of-use assets     546       122  
    Deferred income taxes     (5,165 )      
    Change in fair value of contingent consideration     6,682       2,200  
    Other non-cash items     (15 )     273  
    Changes in operating asset and liability accounts:                
    Accounts receivable     2,538       3,152  
    Inventory     (6,672 )     (11,935 )
    Prepaid expenses and other assets     (2,082 )     8,015  
    Operating leases     (1,048 )     (123 )
    Accounts payable and accrued expenses     (4,455 )     (9,399 )
    Deferred revenue     18,182       8,458  
    Net cash provided by (used in) operating activities     16,121       (1,348 )
                     
    Cash flows from investing activities:                
    Purchases of property, plant and equipment     (852 )     (430 )
    Cash paid to settle contingent consideration liabilities     (3,278 )      
    Cash paid for acquisition, net of cash acquired     (29,577 )      
    Change in other assets     218       (10 )
    Net cash used in investing activities     (33,489 )     (440 )
                     
    Cash flows from financing activities:                
    Repurchase of treasury stock     (126 )      
    Repayment of debt     (25 )     (33 )
    Cash paid related to registration of common stock shares     (148 )      
    Proceeds from exercise of employee stock options and ESPP     157       136  
    Net cash (used in) provided by financing activities     (142 )     103  
                     
    Effect of exchange rate changes on cash     16       (10 )
                     
    Net decrease in cash, cash equivalents and restricted cash     (17,494 )     (1,695 )
    Cash, cash equivalents and restricted cash at beginning of period     92,280       25,675  
    Cash, cash equivalents and restricted cash at end of period   $ 74,786     $ 23,980  
    RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
    (In thousands, except per share data)
     
        Three Months Ended
    September 30,
        Six Months Ended
    September 30,
     
        2024     2023     2024     2023  
    Net income (loss)   $ 4,887     $ (2,485 )   $ 2,363     $ (7,883 )
    Stock-based compensation     843       1,111       2,072       2,468  
    Acquisition costs     850             1,080        
    Amortization of acquisition-related intangibles     608       538       1,020       1,082  
    Change in fair value of contingent consideration     2,762       850       6,682       2,200  
    Non-GAAP net income (loss)   $ 9,950     $ 14     $ 13,217     $ (2,133 )
                                     
    Non-GAAP net income (loss) per share – basic   $ 0.27     $     $ 0.36     $ (0.07 )
    Non-GAAP net income (loss) per share – diluted   $ 0.27     $     $ 0.36     $ (0.07 )
    Weighted average shares outstanding – basic     36,952       28,828       36,317       28,545  
    Weighted average shares outstanding – diluted     37,499       28,828       36,951       28,545  
    Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Income
    (In millions, except per share data)

        Three Months Ending  
        December 31, 2024  
    Net loss   $ (1.0 )
    Stock-based compensation     2.3  
    Amortization of acquisition-related intangibles     0.7  
    Non-GAAP net income   $ 2.0  
    Non-GAAP net income per share   $ 0.05  
    Shares outstanding     38.5  


    Note: Non-GAAP net income (loss) is defined by the Company as net loss before; stock-based compensation; amortization of acquisition-related intangibles; acquisition costs; change in fair value of contingent consideration, other non-cash or unusual charges, and the tax effect of adjustments calculated at the relevant rate for our non-GAAP metric. The Company believes non-GAAP net income (loss) and non-GAAP net income (loss) per share assist management and investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring or other charges that it does not believe are indicative of its core operating performance. Actual GAAP and non-GAAP net loss for the fiscal quarter ending December 31, 2024, including the above adjustments, may differ materially from those forecasted in the table above. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measure included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income or other measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP net loss is set forth in the table above.

    AMSC Contacts
    Investor Relations Contact:
    LHA Investor Relations
    Carolyn Capaccio
    (212) 838-3777
    amscIR@lhai.com

    Public Relations Contact:
    RooneyPartners
    Joe Luongo
    (914) 906-5903

    AMSC Director, Communications:
    Nicol Golez
    978-399-8344
    Nicol.Golez@amsc.com

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