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  • 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

    Follow us on LinkedIn

    MIL OSI Canada News –

  • MIL-OSI USA: USAID Announces New Project to Strengthen Systems that Prevent, Detect, and Respond to New and Emerging Health Threats

    Source: USAID

    Today, the United States Agency for International Development announced a new project that will strengthen the capacity of our partner countries to prevent, detect, and respond to the increasing occurrence and severity of epidemics, pandemics, and novel infectious disease threats.  

    Under the new project, Strengthening Infectious Disease Detection Systems (STRIDES), USAID will work with partner countries to build more reliable, safe and secure laboratory and disease surveillance systems, as well as more effective data management and reporting platforms – systems that are critical to preventing new and emerging infectious disease threats from spreading widely and rapidly.

    In more than 50 countries, USAID is strengthening the specific components necessary for strong global health security and pandemic preparedness. The work of STRIDES will be integral to these efforts, and to USAID’s role in achieving the United States commitment to apply a whole-of-government, science-based approach to strengthening global health security, as laid out in the U.S. Global Health Security Strategy and the National Biodefense Strategy and Implementation Plan for Countering Biological Threats, Enhancing Pandemic Preparedness, and Achieving Global Health Security. 

    STRIDES will be implemented by a consortium led by FHI 360 and consisting of other partners including PATH, Black & Veatch and Panagora Group, and six regional-based public health organizations: Amref Health Africa, African Society for Laboratory Medicine, Prisma, Africa One Health University Network, Southeast Asia One Health University and The Eastern Mediterranean Public Health Network.

    MIL OSI USA News –

  • MIL-Evening Report: How do children learn good manners?

    Source: The Conversation (Au and NZ) – By Sophia Waters, Senior Lecturer in Writing, University of New England

    Pexels/Anna Shvets

    Ensuring kids have manners is a perennial preoccupation for parents and caregivers.

    How, then, do you teach good manners to children?

    Modelling good manners around the home and in your own interaction with others is obviously crucial.

    But there’s a clear uniting theme when it comes to manners in Australia: in Australian English, good manners centre on honouring personal autonomy, egalitarianism and not appearing to tell people what to do.

    Which manners matter most in Australia?

    Some of the most important manners in Australian English are behavioural edicts that focus on particular speech acts: greeting, requesting, thanking and apologising.

    These speech acts have a set of words associated with them:

    • hello
    • hi
    • may I please…?
    • could I please…?
    • thank you
    • ta
    • sorry
    • excuse me.

    Good manners make people feel comfortable in social situations by adding predictability and reassurance.

    They can act as signposts in interactions. Anglo cultures place a lot of weight on egalitarianism, personal autonomy and ensuring we don’t tell people what to do.

    If you want to get someone to do something for you – pass you a pen, for example – you frame the request as a question to signal that you’re not telling them what to do.

    You’ll also add one of the main characters in Anglo politeness: the magic word, “please”.

    This framing recognises you don’t expect or demand compliance. You’re acknowledging the other person as an autonomous individual who can do what they want.

    If the person does the thing you’ve asked, the next step is to say “thank you” to recognise the other person’s autonomy. You’re acknowledging they didn’t have to help just because you asked.

    ‘Say ta!’
    DGLimages/Shutterstock

    The heavy hitters

    The words “please” and “thank you” are such heavy hitters in Australian English good manners, they’re two of the words that language learners and migrants learn first.

    They can help soften the impact of your words. Think, for example, of the difference between “no” and “no, thank you”.

    Of course, there are times when “no” is a full sentence. But what if someone offered you a cup of tea and you replied “no” without its concomitant “thank you” to soften your rejection and acknowledge this offer didn’t have to be made? Don’t be surprised if they think you sound a bit rude.

    The other big players in Australian English good manners are “sorry” and “excuse me”. Much like in British English, the Australian “sorry” means many things.

    These can preface an intrusion on someone’s personal space, like before squeezing past someone in the cinema, or on someone’s speaking turn.

    Interrupting or talking over someone else is often heavily frowned on in Australian English because it is often interpreted as disregarding what the other person has to say.

    But in some cultures, such as French, this conversational style is actively encouraged. And some languages and cultures have different conventions around what good manners look like around strangers versus with family.

    Good manners involve saying certain words in predictable contexts.

    But knowing what these are and when to use them demonstrates a deeper cultural awareness of what behaviours are valued.

    Talking over someone else is often heavily frowned on in Australian English.
    MDV Edwards/Shutterstock

    How do children learn manners?

    As part of my research, I’ve analysed parenting forum posts about “good manners”. Some believe good manners should be effortless; one parent said:

    Good manners shouldn’t be something that a child has to think about […] teach them correctly at home from day one, manners become an integral part of the way they view things.

    Another forum user posited good modelling was the key, saying:

    the parent has to lead by example, rather than forcing a child to say one or the other.

    One study, which involved analysis of more than 20 hours of videorecorded family dinner interactions collected in Italy, found mealtimes are also sites where parents control their children’s conduct “through the micro-politics of good manners.”

    By participating in mealtime interactions, children witness and have the chance to acquire the specific cultural principles governing bodily conduct at the table, such as ‘sitting properly’, ‘eating with cutlery’, and ‘chewing with mouth closed’.

    Yet, they are also socialised to a foundational principle of human sociality: one’s own behavior must be self-monitored according to the perspective of the generalised Other.

    In Australian English, that means regulating your behaviour to make sure you don’t do something that could be seen as “rude”. As I argued in a 2012 paper:

    While child socialisation in Anglo culture involves heavy discouragement of rudeness, French does not have a direct equivalent feature […] French children are taught ça ne se fait pas, ‘that is not done’. Where the French proscribe the behaviours outright, the Anglos […] appeal to the image one has of oneself in interpersonal interactions.

    In Anglo English, the penalties for breaches could be other people’s disapproval and hurting their feelings.

    Good manners form part of the bedrock for human sociality.
    Shutterstock

    Why are good manners important?

    Good manners affect our interactions with others and help us build positive relationships.

    Fourteenth century English bishop and educator, William of Wykeham, declared that “manners maketh the man”.

    John Hopkins University Professor Pier Forni called them a “precious life-improvement tool.”

    The “Good Manners” chart, based on a set of rules devised by the Children’s National guild of Courtesy in UK primary schools in 1889, was issued to Queensland primary schools until the 1960s.

    It tells kids to remember the golden rule to “always do to others as you would wish them to do to you if you were in their place.”

    Good manners form part of the bedrock for human sociality. Childhood is when we give kids foundational training on interacting with others and help them learn how to be a culturally competent member of a society.

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

    – ref. How do children learn good manners? – https://theconversation.com/how-do-children-learn-good-manners-237133

    MIL OSI Analysis – EveningReport.nz –

  • MIL-Evening Report: 215 million hectares of forest – an area bigger than Mexico – could grow back by itself, if we can just leave it alone

    Source: The Conversation (Au and NZ) – By Brooke Williams, Research Fellow, School of Biology & Environmental Science, Queensland University of Technology

    Gustavo Frazao/Shutterstock

    About 215 million hectares of land – an area bigger than Mexico – could be reforested naturally and without costly manual planting, our new research shows.

    This would allow us to offset around 23.4 gigatonnes of global carbon emissions over the next three decades. That’s about 50 years worth of Australia’s carbon emissions (assuming 2023 emission rates continue).

    Extensive and effective forest restoration is crucial to mitigating climate change and conserving biodiversity.

    It’s vital we find cost-effective ways to get and keep more trees in the ground. One way to do this is just to let forests grow back by themselves. However, this isn’t possible in all deforested lands, as certain environmental conditions are needed for this approach to work.

    Our research identified land where this approach had strong potential.

    Allowing forests to grow back naturally in deforested areas, such as this degraded land in Brazil, could be more cost-effective than manual reforestation projects.
    Author provided

    The benefits of natural regeneration

    Globally, 65% of original tropical forest extent has been lost to make way for human development such as agriculture, roads, and urbanisation. Deforestation has contributed to climate change and biodiversity loss.

    We’ve also lost a worrying amount of what researchers call “ecosystem services”, meaning the benefits people derive from nature, such as clean water.

    Forest restoration is an important strategy for reversing the damage.

    Our paper, published in the journal Nature, looked at where natural regeneration is likely to be successful due to the surrounding environmental conditions.

    Natural regeneration is important because it is sometimes better than manual tree planting, which includes the costs of saplings, manual labour, fertilisation and maintenance.

    Using manual techniques in degraded landscapes can be expensive. It can also be less effective in terms of native biodiversity recovery and keeping water systems functioning well.

    Natural regeneration is a less costly alternative. That means allowing forests to grow back on their own or with carefully planned human intervention.

    For example, natural reforestation may cost between $US12 and $3,880 per hectare. By contrast, active regeneration methods in the tropics would cost between $105 and $25,830 per hectare.

    Natural regeneration restoration methods often have better long-term success and biodiversity outcomes than full manual tree-planting.

    Studies have found that biodiversity “success” – meaning richer biodiversity and more species – can be up to 56% higher when natural regeneration approaches were used (rather than manual planting projects).

    It’s vital we find cost-effective ways to get and keep more trees in the ground.
    Richard Whitcombe/Shutterstock

    Where might natural reforestation projects succeed?

    Until now, it’s not always been clear how to predict areas where natural regeneration is most likely to occur. That’s made it hard to do large-scale natural regeneration projects.

    Our research addresses this gap. We identified the best areas to roll out natural approaches in the tropics.

    We focused on tropical forested regions because they are particularly important.

    Their biodiversity is unparalleled and they provide vast economic, cultural, and recreational services to people.

    They also grow much faster than other forest types, and many large tropical forests have already been cleared and degraded.

    Factors that make a forest likely to regenerate naturally include:

    • the amount of surrounding forest
    • distance to existing forest and
    • soil organic carbon content

    This suggests areas with higher levels of landscape degradation and intensive land uses would be less likely to regenerate naturally.

    We found suitable environmental conditions for natural regeneration occur across:

    • 98 million hectares in the Neotropics (which includes many areas in South and Central America)

    • 90 million hectares in the Indomalayan tropics (which includes many areas in Southeast Asia, Malaysia, and India)

    • 25.5 million hectares in the continent of Africa

    Up to 52% of this natural regeneration could occur in just five countries: Brazil, Indonesia, China, Mexico, and Colombia.

    This suggests these countries would be excellent candidates for large scale natural regeneration projects.

    We also found that 29 other countries have at least one million hectares each that could be naturally reforested.

    We identified 400,000 hectares of deforested lands with potential for natural forest regeneration in the Australian tropics.

    Fixing forests will also improve biodiversity.
    Martin Prochazkacz/Shutterstock

    The world has committed to fixing forests

    The world has committed to ambitious forest restoration targets in order to substantially increase the area of forest ecosystems by 2050.

    These commitments include the Bonn Challenge, which aims to restore 350 million hectares by 2030.

    Another is Target 2 of the recently adopted Global Biodiversity Framework, which calls for 30% of the area of degraded ecosystems to be restored by 2030.

    Achieving these targets, especially for nations with emerging economies, will not be possible using active restoration techniques alone. This due to cost and feasibility constraints.

    To assist with this global task, we have made our dataset publicly available and free to use.

    Local communities at the centre

    Encouraging natural regeneration remains a major challenge, particularly on privately held and communally managed land because it can mean reduced land available for other uses.

    Providing local people with training and support to grow, harvest and market products sourced from naturally regenerating forests is also crucial. This could help keep young naturally regenerating forests standing and growing.

    This income could supplement or replace payments landowners and local people currently receive to look after land and prevent it from being deforested. Payment-based approaches are not always sustainable in the long term.

    Currently, many forests are controlled and managed by central or national governments. Giving local and Indigenous communities control over their forests would help encourage restoration that meets local needs.

    However, this requires appropriate technical support and monitoring.

    Importantly, our analysis does not define where restoration activities should or should not occur. We only show where natural forest regeneration is possible or more likely to succeed.

    We echo calls to ensure restoration occurs as equitably as possible, and foregrounds the needs of local people.

    Forest restoration should be as equitable as possible, and foreground the needs of local people.
    WNDR Worlds/Shutterstock

    Let’s give it a chance

    Natural forest regeneration presents an opportunity to restore vast areas of forest cheaply and effectively. It can help mitigate the effects of climate change and help countries meet their emissions reduction targets.

    Other benefits include conserving biodiversity, regulating water resources, reducing erosion, and making ecosystems more resilient.

    Recognising the massive regeneration capacity of tropical forests is key.

    It’s also crucial it occurs alongside protecting intact forests, and reducing deforestation.

    Robin Chazdon is the global co-director of the Assisted Natural Regeneration Alliance. She is a senior fellow with the World Resources Institute’s Global Restoration Initiative.

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

    – ref. 215 million hectares of forest – an area bigger than Mexico – could grow back by itself, if we can just leave it alone – https://theconversation.com/215-million-hectares-of-forest-an-area-bigger-than-mexico-could-grow-back-by-itself-if-we-can-just-leave-it-alone-236696

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI Canada: Opening Statement before the Senate Standing Committee on Banking, Commerce and the Economy

    Source: Bank of Canada

    Good afternoon. I’m pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss our recent policy announcement and the Bank of Canada’s Monetary Policy Report.

    Last week, we lowered the policy interest rate by 50 basis points. It was our fourth consecutive decrease since June and brings our policy rate to 3.75%.

    We took a bigger step because inflation is now back to the 2% target, and we want to keep it close to the target.

    In the past few months, inflation has come down significantly. Headline inflation was 1.6% in September, and both our measures of core inflation were under 2½%. Price pressures are no longer broad-based. Our surveys also find that business and consumer expectations of inflation have shifted down and are nearing normal. All this suggests we are back to low inflation. This is good news for Canadians.

    Now our focus is to maintain low, stable inflation. We need to stick the landing.

    That means the upward and downward forces on inflation need to balance out. Economic activity picked up this year, but it is still soft. This softness has helped take the remaining steam out of inflation. With inflation now back at 2%, we want to see growth strengthen. Last week’s interest rate decision should contribute to a pickup in demand.

    Looking ahead, we expect the economy to gradually strengthen in 2025 and 2026, supported by lower interest rates. Population growth will be slower, but we anticipate consumer spending per capita will be picking up. We also expect growth in residential investment to rise as strong demand for housing lifts sales and spending on renovations. We expect business investment to strengthen as demand picks up, and exports should remain strong, supported by robust demand from the United States.

    Our forecast has inflation staying around the target over the projection horizon. The upward pressure from shelter and other services is expected to gradually diminish. With stronger demand, the downward pressure on inflation should also dissipate, keeping the upward and downward forces roughly balanced.

    There are risks around our inflation outlook. The biggest downside risk to inflation is that it could take longer than anticipated for household spending and business investment to pick up. On the upside, lower interest rates could fuel a stronger rebound in housing activity, or wage growth could remain high relative to productivity. We are also facing elevated geopolitical uncertainty and the risk of new shocks. Overall, we view the risks around our inflation forecast as reasonably balanced.

    If the economy evolves broadly in line with our forecast, we anticipate cutting our policy rate further to support demand and keep inflation on target. The timing and pace of further interest rate cuts will depend on incoming information and our assessment of its implications for the inflation outlook. We will take our monetary policy decisions one at a time.

    Let me conclude.

    High inflation and interest rates have been a heavy burden for Canadians. Now we are coming out the other side—monetary policy has worked to get inflation down. With inflation back to target and interest rates continuing to come down, families, businesses and communities should feel some relief.

    The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

    With that summary, the Senior Deputy Governor and I would be pleased to take your questions.

    MIL OSI Canada News –

  • MIL-OSI USA: Rep. Norcross Presents $750,000 in Community Project Funding for the Redevelopment of John Lucas House in Gibbsboro

    Source: United States House of Representatives – Congressman Donald Norcross (1st District of New Jersey)

    CHERRY HILL, NJ – Today, Rep. Donald Norcross (D-NJ) presented $750,000 in Community Project Funding (CPF) to the Borough of Gibbsboro to redevelop the John Lucas House into a community event space.  

    The funding was secured through the Fiscal Year 2024 government funding package and will be used to assist in lead paint remediation, construct kitchen and restroom facilities, and repair structural deficiencies at the John Lucas House. The Borough envisions the house as the center for activities on Silver Lake and will be used to host public and private events.

    “Community Project Funding grants invest in our communities and support economic development, job creation, and critical projects that improve the quality of life,” Rep. Norcross said. “Bringing neighbors together for events is important for fostering a sense of community, and it’s an honor to have secured this funding to make this new event space a reality.”  

    “The FY2024 Congressional designated spending for the transformation of the former home of John Lucas into an events venue at Silver Lake in Gibbsboro complements the redevelopment of the former Paint Works Corporate Center into a destination with townhomes, walking trails, restaurants and office space,” said?Mayor Ed Campbell. “Gibbsboro is forever grateful to Congressman Norcross for his continued support for this important project and for his persistent dedication to seeing the three superfund sites in Gibbsboro fully remediated and the Borough’s effort toward economic redevelopment.” 

    Rep. Norcross recently secured 14 CPF awards totaling $13,565,031 for projects throughout New Jersey’s First Congressional District to support economic development, create jobs, and respond to the most pressing needs of the community. More information on the 14 projects can be found here. 

    Since the creation of CPFs in 2021, Rep. Norcross has secured $28.8 million in awards for local projects throughout South Jersey. CPF awards secured by Rep. Norcross range from road and transportation projects and affordable housing upgrades to improving health care and education accessibility.  

     

    ### 

    MIL OSI USA News –

  • MIL-OSI USA: Scott Slams SCOTUS Ruling Greenlighting Youngkin, Trump & GOP Voter Suppression Tactics

    Source: United States House of Representatives – Congressman Bobby Scott (3rd District of Virginia)

    Headline: Scott Slams SCOTUS Ruling Greenlighting Youngkin, Trump & GOP Voter Suppression Tactics

    NEWPORT NEWS, VA – Congressman Bobby Scott (VA-03), co-chair of the Congressional Voting Rights Caucus and Dean of the Virginia Congressional Delegation, issued the following statement on the U.S. Supreme Court’s decision reversing U.S. District Court Judge Patricia Tolliver Giles’ order requiring the Youngkin Administration to reinstate more than 1,600 voters who may have been illegally purged from Virginia’s voter rolls in violation of the National Voter Registration Act of 1993:

    “I am deeply disappointed and disturbed by the U.S. Supreme Court’s decision to greenlight blatant voter suppression efforts in the Commonwealth of Virginia. This decision will allow Governor Youngkin to strip Virginians of their right to vote in clear violation of federal law. This decision also perpetuates the falsehood that noncitizens are voting in meaningful numbers and former President Trump’s plan to undermine confidence in our elections.

    “The National Voter Registration Act is clear. It requires all states to complete any systematic removal of voters from its voter rolls 90 days before a federal election. This statute gives states ample time prior to this deadline to review its voter rolls. Most importantly, it provides voters sufficient time to rectify any improper removal prior to Election Day. U.S. District Court Judge Patricia Tolliver Giles determined that Governor Youngkin’s actions violated this statute, and the U.S. Court of Appeals for the Fourth Circuit upheld her order citing the Commonwealth’s defense of the action as ‘weak’ and that it ‘violates basic principles of statutory construction.’ Furthermore, the Fourth Circuit recognized that the Commonwealth maintains the ability to remove ineligible voters on an individualized basis to limit the risk of improper removals.

    “Unfortunately, this latest order by the Supreme Court is just one in a series of rulings that have rolled back fundamental rights, freedoms and foundational principles of our democracy. This Court gutted key provisions of the Voting Rights Act, stripped women of their right to make decisions about their own body, diminished the ability of federal agencies to protect communities from toxic pollutants, and created the foundation for a President of the United States to be immune from the law.”

    # # #

    MIL OSI USA News –

  • MIL-OSI New Zealand: Sudan – Over 2.8 million children under five forced from their home across Sudan – Save the Children

    Source: Save the Children

    More than 2.8 million babies, toddlers and preschoolers are now displaced across Sudan, said Save the Children, with new figures released by the IOM showing the world’s largest displacement crisis is rapidly deteriorating for children.
    About 11 million people in Sudan – or 30% of the population – have been forced from their homes, including those displaced before and since the most recent conflict escalated in April 2023. The numbers have risen by 200,000 in the last month alone, with more than 45,000 people displaced in Al Jazirah state including 27,000 children in the past seven days [1].
    New figures reveal over half of the 11 million displaced – or 5.8 million – are children under 18, and over one quarter – or 2.8 million – are children aged under five [2]. These small children are uniquely vulnerable, and while displaced many will miss out on early childhood essentials – including vaccinations, clean water, healthcare, nutritious food, and shelter from extreme heat and cold.
    While about half of these children are now living in host communities, the remaining half are living in desperate conditions, with 18% in displacement camps, 16% in informal settlements or out in the open, and 9% in cramped schools or other public buildings. Many of these children are sharing their space with adults they don’t know, and have limited or no access to water and sanitation.
    Girls are particularly at risk, with over 3.2 million of the displaced children girls under 18, who face particular threats of sexual violence, rape, or early or forced marriage.
    Red Sea state in the country’s east has the highest proportion of displaced children, with children making up 60% of all displaced people, followed by Central Darfur with 57%. More than a third of those children and families now displaced in Sudan are from the capital Khartoum, which has witnessed some of the fiercest fighting of the conflict, followed by South Darfur (19%) and North Darfur (15%).
    Mohamed Abdiladif, Interim Country Director for Save the Children in Sudan, said:
    “Babies, toddlers, preschoolers – millions of the world’s most vulnerable people are currently living in some of the world’s worst conditions. The world has a duty of care for children and we are failing them.
    “When people are forced to flee their homes due to violence, it’s usually the women and. children who go first – and we often see displacement camps filled with children. But the number of children displaced in Sudan – and in particular, their young age and vulnerability – is staggering.
    “The situation in Sudan is spiralling out of control and every day more and more lives are put at risk with killings, violence and displacement. This has become one of the world’s most devastating humanitarian crisis but the world is not taking notice.
    “In the past week alone at least 10 children have been killed , including children as young as 10, and at least 43 children injured in Al Jazirah state. The UN has reported girls as young as 13 subjected to rape and sexual assault. We have also heard reports of children being detained, the widespread destruction of homes, and massive displacement, with families walking for days to reach safety.
    “We are urgently calling on the international community to take meaningful and urgent political action to address this crisis, for an immediate ceasefire and progress towards a lasting peace agreement.”
    Save the Children has worked in Sudan since 1983 and is currently supporting children and their families across Sudan providing health, nutrition, education, child protection and food security and livelihoods support. Save the Children is also supporting refugees from Sudan in Egypt and South Sudan.
    Notes
    [1] On 28 October, UNICEF reported more than 9,000 households, including over 45,000 people, were forced from their homes in Tamboul and its surrounding villages between 20 and 27 October 2024. A calculation of a household includes 2 adults and 3 children, thus 27,000 children displaced.
    [2] Figures from Sudan Mobility Update 29 October 2024 https://dtm.iom.int/reports/dtm-sudan-mobility-update-10

    MIL OSI New Zealand News –

  • MIL-OSI USA: Cambodia stops publishing details of new citizenships issued to foreigners – The Straits Times

    Source: United States Institute of Peace

    SINGAPORE – Cambodia has stopped publishing data on new citizenships issued by the kingdom to foreigners, in the wake of the $3 billion money laundering probe in Singapore.

    Checks by The Straits Times and investigative journalism group, Organised Crime and Corruption Reporting Project (OCCRP), showed that the last time new citizenship details were published was in February.

    The latest Royal Gazette, published on Sept 27, did not contain any new citizenship data.

    Observers had zoomed in on the ease of access to Cambodian citizenship and passports after it emerged that nine of the 10 foreigners arrested in August 2023 in the probe in Singapore held Cambodian passports.

    All 10 were originally from China, which does not recognise dual citizenship.

    In 2018, Cambodia moved to allow foreign immigrants to request citizenship through the naturalisation process.

    To be granted citizenship, foreigners have to maintain good behaviour and morality, and have no convictions for serious crime.

    They must also legally reside in Cambodia for more than seven years, be able to speak Khmer, and understand the local culture and history.

    Of the nine foreigners apprehended in Singapore, at least five were convicted for online gambling or were wanted by the authorities in China.

    They are Wang Dehai, Vang Shuiming, Su Jianfeng, Chen Qingyuan and Su Wenqiang.

    Another 17 associates of the 10 foreigners held Cambodian passports as well.

    They include Su Binghai, Su Yongcan, Wang Huoqiang, Su Shuiming, Su Shuijun, Su Fuxiang and Chen Mulin.

    Cambodia had averaged around 50 new citizens every month between January 2020 and August 2023, with details published monthly in the Royal Gazette.

    After the raids in Singapore, the kingdom granted citizenship status to only four individuals in total between September 2023 and December 2023.

    A representative from the Royal Embassy of Cambodia in Singapore told ST on Sept 18 that it could not confirm the figures as it does not have access to the data.

    The representative added that he was unable to confirm if Cambodia’s citizenship by investment scheme, or naturalisation process, is still in place.

    ST had also reached out to government spokesman Pen Bona, the Prime Minister’s spokesman Meas Sophorn, the office of the council of ministers, and Cambodia’s immigration office.

    Established in 1996, the kingdom’s law on nationality also allows foreigners to obtain citizenship through investment in the nation.

    Under the law, foreigners who invest a minimum of US$300,000 (S$384,000) in the country, or donate at least US$250,000 to the economy, will have the right to apply for citizenship.

    Mr Jacob Sims, a visiting expert on transnational crime at the United States Institute of Peace, told ST that for years, Cambodia’s citizenship for investment scheme has served as a channel for individuals from sophisticated organised crime syndicates to migrate.

    Said Mr Sims: “The removal of that data from the public record helps to obscure the nature of the relationship between Cambodian state actions and those criminals, as well as the sheer volume of monied crime actors Cambodia has absorbed in recent years.”

    By removing the once publicly available data, Cambodia can protect those who have purchased citizenship while shielding the government from international scrutiny, he said.

    Associate Professor Kristin Surak from the London School of Economics and Political Science said that not all countries strictly vet citizenship by investment applications.

    She added: “I would say the scheme is very easy to exploit in Cambodia because the government does not do its due diligence. It has issues with corruption and does not have an effective bureaucratic process to ensure applications are properly checked and vetted.”

    Name changes have also made it harder for the authorities to track criminals.

    Dr Surak, the author of The Golden Passport: Global Mobility For Millionaires, pointed out that many applicants in the past have changed their names.

    “This makes it extremely easy for someone to take on a new identity, making Cambodia a target for those with criminal intent to take advantage of,” she added.

    One such example is casino kingpin She Zhijiang. ST previously reported on She and his links to scam operations in Myanmar and Cambodia.

    She, who was originally from China, became a naturalised citizen of Cambodia in 2017. He then changed his name to Tang Kriang Kai.

    He was arrested in Thailand in August 2022 and is currently fighting deportation to China.

    Businessman David Yong, chief executive of Evergreen Group Holdings, had similarly obtained Cambodian citizenship.

    Yong, who is currently facing four charges in Singapore of falsifying accounts, obtained Cambodian citizenship some time in 2023 and changed his name to Duong Dara.

    He was arrested on Aug 1, just three months after he appeared in Netflix series Super Rich In Korea.

    Yong’s lawyer said in court that he had surrendered his Cambodian passport to the authorities in Phnom Penh in June 2024.

    In response, the authorities in Singapore said they wrote several times to their Cambodian counterparts in August to confirm the fact, but have yet to receive any reply.

    Of the 10 foreigners convicted in Singapore’s largest money laundering case, eight were deported to Cambodia – which has an extradition treaty with China.

    Wang Dehai was deported to the UK, while Vang Shuiming was deported to Japan.

    MIL OSI USA News –

  • MIL-OSI USA: Attorney General Bonta Issues Local Government Guidance for Tackling the Opioid and Fentanyl Crisis

    Source: US State of California

    Attorney General secures nearly $50 billion in nationwide opioid settlements and bankruptcies 

    California is expected to receive up to $4.2 billion in opioid abatement funds under these settlements 

    Provides local governments with guidance on effectively utilizing funds to combat the opioid and fentanyl crisis and support recovery initiatives 

    OAKLAND – Recognizing the impact of the opioid and fentanyl crisis to both public health and public safety, California Attorney General Bonta today issued guidance to provide local governments with suggestions for the permissible, effective, and strategic use of opioid settlement abatement funds. This guidance is aimed at helping local governments maximize impact, save lives, and strengthen public health infrastructures to tackle the opioid and fentanyl crisis. 

    “The opioid epidemic, fueled by prescription opioid painkillers and fentanyl, continues to devastate families, communities, and lives across this nation,” said Attorney General Bonta. “At the California Department of Justice, the pain felt by those impacted by this epidemic is our driving force in holding accountable those responsible for fueling this crisis, and we will not stop our fight for justice and relief. The funds from opioid settlements are designed to allow multi-faceted approaches for local governments to provide comprehensive prevention, treatment and recovery programs, and other resources to root out the opioid and fentanyl crisis. With a united front of local governments statewide, we can not only put an end to this epidemic, but also provide a pathway toward recovery and renewal. Together, we can heal. Together, we can turn the tide.” 

    Since the first wave of the opioid epidemic hit the United States in the 1990s, it has taken hundreds of thousands of lives, torn families apart, and eroded the social fabric of communities. Its toll has grown year after year. Data from the Centers for Disease Control and Prevention (CDC) indicate that in 2022, the most recent year for which we have reliable data, more than 10,900 Californians died from overdose. Nearly 6,500 of those overdoses were due to fentanyl.

    Fentanyl is a powerful and addictive synthetic opioid that is up to 50 times stronger than heroin. A small amount of fentanyl, just two milligrams, can result in overdose or death. Fentanyl can be found in different forms, including pills, powder, and liquid, and can be obtained legally, with a prescription, or illegally. Illicit fentanyl has been found in many drugs, including heroin, as well as laced into non-opioids such as methamphetamine, counterfeit pills, and cocaine. Fentanyl mixed with any drug, and in particular non-opioids, increases the likelihood of a fatal overdose. Illicit fentanyl is often packaged to look like prescription drugs, often by using the labeling of an illicit drug or pressing pills in specific colors in order to promote consumption among users.

    In California in 2022, more than 7,000 people died due to opioid overdose, with almost 90% of those deaths involving fentanyl. According to the CDC, the nation has experienced the overdose epidemic in three interconnected waves: an increase in deaths from prescription opioid overdoses beginning in the 1990s, an increase in heroin deaths starting in 2010, and a more recent surge in deaths from other illicit opioids such as fentanyl.

    To date, the Attorney General has secured nearly $50 billion in abatement funding through nationwide settlements and bankruptcies. California is expected to receive up to $4.2 billion in opioid abatement funds under these settlements, with the bulk of these funds going to our local governments.

    These settlements have ensured a stream of opioid abatement funds for California’s cities and counties far into the future. By design, the settlements ensure that the vast majority of funds are used to abate the opioid crisis.

    View the guidance here.

    MIL OSI USA News –

  • MIL-OSI USA: Magaziner, HealthSource RI Kick Off 2025 Open Enrollment for Rhode Island’s State-Based Health Insurance Marketplace

    Source: United States House of Representatives – Representative Seth Magaziner (RI-02)

    November 1 is the first date to enroll.

    CRANSTON, R.I. — U.S. Representative Seth Magaziner (RI-02) joined HealthSource RI (HSRI) Director Lindsay Lang today at Comprehensive Community Action Program (CCAP)’s Family Health Services of Cranston to kick off the annual Open Enrollment period for the state’s health exchange, beginning Friday, November 1 and running through January 31. New customers can purchase plans, and existing customers can change their plan selections during this time without needing a qualifying life event.

    HSRI has served nearly 161,000 Rhode Islanders since its inception in 2013, roughly mirroring the proportion of 1 in 7 Americans, or about 50 million individuals, served by state and federal exchanges nationwide. HSRI’s role in connecting Rhode Islanders to coverage has been booming in recent months, with enrollment swelling to an all-time high of more than 46,000 in its individual and family plan offerings, and an additional 8,200 lives covered through its small employers arm serving local businesses and nonprofits with access to small group plans. Recent findings of its Health Information Survey put Rhode Island’s uninsured rate at a remarkably low 2.2%, among the best in the nation.

    “Every Rhode Islander deserves access to affordable, high-quality healthcare,” said Rep. Seth Magaziner. “The Affordable Care Act has expanded health coverage for tens of thousands of people in our state, and I will continue fighting to protect this lifesaving law from those who seek to repeal it.”

    As the only place Rhode Islanders can receive financial help to pay for their health coverage, HSRI plays a vital role in connecting customers to quality coverage. Currently, 6 out of 7 HSRI customers receive financial assistance, and nearly a third of customers pay less than $10 per month for their health coverage. For 2025, customers can choose from an array of 20 health plans and seven dental plans, all provided by well-known insurance carriers, when shopping through the marketplace. Cost-comparison tools on the HealthSource RI website and an abundance of phone, web-based and in-person support options make it convenient to get help when reviewing plans.

    “HealthSource RI is proud to serve an important role in connecting so many Rhode Islanders to quality coverage,” said HSRI Director Lindsay Lang. “Having the coverage you need for preventive care, or treatment when you or your loved one are sick, is a vital stabilizing tool for families and individuals, across all walks of life. With more than a decade of experience as a trusted guide, HSRI is here to help ensure our fellow Rhode Islanders have that peace of mind.”

    Along with Magaziner and Lang, Joanne McGunagle, President & CEO of CCAP, whose trained navigators assist community members at numerous locations statewide in the application process for coverage through both HealthSource RI and Medicaid, spoke to the importance of high-quality health coverage for patients in order to seek preventative health care and maintain healthier communities.

    “As the major provider of health care in the City of Cranston, we know how vitally important it is for our patients to have access to affordable health insurance. CCAP is proud to have our Navigators working directly with patients to assist with enrollment in health insurance, in collaboration with RIHCA and HealthsourceRI. HealthSource RI provides expert staff to assist them in selecting a plan that makes sense for them and their families. With diminishing availability of medical providers, having health insurance gives them a step up and more options to receive care.  We are grateful to Congressman Magaziner for championing this most valued service for the most vulnerable,” said Joanne McGunagle, President & CEO of CCAP.

    Individuals and families can learn about various types of assistance, compare costs, and enroll in, change or renew their health and dental coverage at HealthSourceRI.com/OE, or call 1-855-840-HSRI (4774).

    MIL OSI USA 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 USA: Golden questions regulators over proposed reduction to herring quota

    Source: United States House of Representatives – Congressman Jared Golden (ME-02)

    WASHINGTON — Congressman Jared Golden (ME-02) today sent a letter to the National Oceanic and Atmospheric Administration (NOAA) and New England Fishery Management Council (NEFMC) questioning the methodology regulators used as the basis for a nearly 90 percent reduction to the Atlantic herring fishery quota for the next three years. The fishery supplies the primary bait used in the lobster fishery. 

    “Once again, Maine fishermen find themselves on the verge of economic ruin due to federal regulations based on incomplete and inadequate data. In my conversations with fishermen, it has always been clear that their top concerns are the sustainability of the stock and the ability for it to be harvested by future generations,” Golden wrote. “That is why these decisions must always be based on scientifically sound, comprehensive data that incorporates the invaluable input of those most impacted — the harvesters themselves.”

    A July assessment by NOAA claims that the population of herring capable of reproducing is at 26 percent of the agency’s target. This sparked a proposal from NEFMC to reduce the species’ annual catch limit by 89 percent from 2025-2027 — the lowest level in the history of the Council’s Atlantic Herring Fishery Management Plan. However, Maine fishermen have expressed concern that the research vessel used to measure the herring stock is unable to operate in the areas fishermen actually target the species, instead trawling at depths fishermen avoid due to the low concentration of herring.

    According to the Maine Department of Marine Resources, Atlantic herring landings in Maine during 2019 totaled an estimated 13 million pounds and $5.8 million in ex-vessel value. 

    “NEFSA is thankful that Congressman Golden is drawing criticism to the massive, 90 percent cut to the herring quota for the next two years. Very little attention has been given to this action which will eliminate more commercial fishermen from their livelihoods,” commercial fishermenJerry LeemanandDustin Delano, CEO and COO of the New England Fishermen’s Stewardship Association, respectively, said. “We thank Congressman Golden for his efforts and hope the council will reconsider its egregious decision to further decimate the commercial fishing fleet.”

    “We’re grateful to Rep. Golden for speaking out against this misinformed change to the herring quota. Moving forward with a near total cut would be absolutely devastating for fishermen, the lobster industry, and the coastal communities that depend on them,” Virginia Olsen, commercial lobsterman and director of the Maine Lobstering Union said. “It’s more proof that he is not afraid to work across party lines to support fishermen and that matters to me.” 

    Golden’s letter pressed the agencies on whether they also include industry-based surveys like those considered by Canadian regulators, how spawning data is collected if both regulators and fishermen avoid operating in herrings’ spawning waters, and why there was not an economic impact study conducted during the process.

    “My main concern with this seemingly unreasonable quota reduction is that these fishermen will be forced to switch over to a less desirable species of fish. Next season, when everyone has to substitute herring with something else, the increased demand in these alternative baits will make the already rising cost of doing business hard for these fishermen hard to justify fishing in the spring, early summer, and late fall…” Alex Poke, general manager at the Winter Harbor co-op said. “…I expect there to be more frequent and longer periods where I can’t find any bait for the lobster fishermen here at the co-op.”

     “Thank you to Rep. Golden for highlighting these ill-informed quota reductions. These reductions will have crushing economic impacts on my family and our community,” Branden Loveyjoy, a herring fisherman and bait dealer from Columbia said. “I, too, am concerned about the sustainability of the fishery and the next generation, but these reductions go too far without the data to inform them.” 

    Full text of Golden’s letter can be found here, and is included below in full:

    +++

     

    October 30, 2024

    Michael Pentony
    Regional Administrator
    Greater Atlantic Regional Fisheries Office
    NOAA Fisheries
    55 Great Republic Drive
    Gloucester, MA 01930

     

    Jon Hare, PhD
    Science and Research Director
    Northeast Fisheries Science Center
    NOAA Fisheries 
    166 Water Street
    Woods Hole, MA 02543

     

    Cate O’Keefe, PhD
    Executive Director 
    New England Fishery Management Council
    50 Water Street, Mill 2
    Newburyport, MA 01950

    Dear Administrator Pentony, Dr. Hare, and Dr. O’Keefe: 

    I am writing to seek additional information regarding the action the New England Fishery Management Council (NEFMC) recently took to reduce the Atlantic herring fishery quota by nearly 90 percent for fishing year 2025-2027. Based on conversations I have had with Maine fishermen, I am concerned that this decision by the NEFMC was predicated on inaccurate and incomplete surveys and estimates of spawning stock biomass data that also fails to account for the potential economic impacts on fishing communities.

    As you know, the Atlantic herring fishery is an essential part of Maine’s marine economy and is the most important pelagic fishery resource in the state. According to the Maine Department of Marine Resources, in 2019 Atlantic herring landings in Maine were around 13 million pounds, valued at an estimated $5.8 million ex-vessel. This fishery also supplies the primary bait used in our lobster fishery, one of the most valuable in the nation at $464 million. Together, these fisheries employ thousands of Mainers through dealers and seafood processors, vessel and trap manufacturers, restaurants, and other coastal businesses.. 

    That is why I was alarmed when the NEFMC passed new specifications for the Atlantic herring fishery that will result in the lowest catch limits in the history of the Atlantic Herring Fishery Management Plan. This is despite the fact that for some time, I have heard from fishermen who have expressed their concerns about the Henry B. Bigelow (Bigelow), the sole survey vessel used by the federal government to determine the abundance and health of the inshore Atlantic herring stock. While the Bigelow may be a capable vessel – when operational – for conducting trawling operations in depths of 600 feet or greater, due to potential gear conflicts and bottom conditions closer to the coast, it is unable to tow in the areas that Maine’s herring fishermen utilize most. 

    This is particularly true in the interior of area 1A, which is between one and 20 nautical miles from shore. It is here where fishermen are telling me that they are observing herring in volumes they have not seen in recent years, while the Bigelow trawls areas in which they would never consider fishing. Moreover, due to major mechanical issues in the Spring of 2023, the vessel was prevented from conducting tows for the three-year stock assessments for any of the fisheries it samples – including Atlantic herring. The discrepancy between the experience of harvesters and the practical limitations of the Bigelow raises legitimate questions as to whether or not federal regulators are capturing accurate and complete data of the herring stock that is then being used to inform fishing quotas. 

    In order to better understand the methodology behind the NEFMC’s decision-making for setting a 90 percent quota reduction for Atlantic herring, I would appreciate your answers to the following questions:
     

    1. The Canadian herring fishery utilizes industry boats and fishermen who know how to operate the vessels and the gear required to target a particular fish species effectively. Has the NEFMC considered industry-based surveys that utilize the observations of experienced herring fishermen when making quota decisions or to validate assessments conducted by the Bigelow? 

    2.      Fishermen intentionally avoid spawning areas; if they catch spawned herring, they risk being shut down by federal regulators. If the Bigelow is not operating during these spawning seasons or in these areas, and fishermen are prohibited from catching spawned fish, how is this data collected? 

    3.      Based on the Atlantic herring quotas in the motion the NEFMC voted to approve for 2025-2027, we are certain to see crippling economic conditions for those fishermen and other fisheries that are dependent on herring. Why was no shore-side economic impact study conducted to understand the socioeconomic harm these proposed reductions would cause?

    Once again, Maine fishermen find themselves on the verge of economic ruin due to federal regulations based on incomplete and inadequate data. In my conversations with fishermen, it has always been clear that their top concerns are the sustainability of the stock and the ability for it to be harvested by future generations. That is why these decisions must always be based on scientifically sound, comprehensive data that incorporates the invaluable input of those most impacted – the harvesters themselves. 

    I will continue to monitor this situation closely and appreciate your attention to this important matter. 

     

    ###

    MIL OSI USA News –

  • MIL-OSI USA: Regional Cooperation Framework for U.S.-ROK Alliance Contributions to Security in the Indo-Pacific

    Source: United States Department of Defense

    The United States (U.S.) – Republic of Korea (ROK) Alliance remains the linchpin of peace and security not only on the Korean Peninsula but also in the Indo-Pacific region.

    Today the U.S. Department of Defense and ROK Ministry of National Defense announce the following Regional Cooperation Framework for U.S.-ROK Alliance Contributions to Security in the Indo-Pacific to facilitate deeper collaboration between our two countries and to demonstrate our commitment to maintaining a free, peaceful, and prosperous Indo-Pacific region.

    Our two nations share fundamentally common interests and values that underpin regional security efforts, such as respect for democratic governance, the rule of law, territorial integrity, and sovereignty. We seek to better align our efforts in the Indo-Pacific to help realize the vision of a global comprehensive strategic alliance and to advance the security and prosperity of our people, the region, and the globe.

    This framework builds upon our respective strategies for the region – the U.S. Indo-Pacific Strategy, and the ROK Strategy for a Free, Peaceful, and Prosperous Indo-Pacific region – to help develop and maintain a sustainable, secure, and resilient regional order. Our cooperative efforts also draw upon the 2023 Defense Vision of the U.S.-ROK Alliance, which identifies strengthening solidarity and regional security cooperation with like-minded partners as one of our key bilateral priorities, and are intended to support the Republic of Korea’s goal of becoming a “Global Pivotal State.” 

    To advance this cooperation, the U.S. Secretary of Defense and the ROK Minister of National Defense endorse the following general principles and seek to chart a path forward that ensures our common national interest:

    • Our cooperative efforts should seek to create a region that is more connected, prosperous, secure, and resilient. We intend to utilize approaches and pursue initiatives that are based on mutual confidence, trust, reciprocity, and respect for relevant international laws, standards, and norms.
    • Both the U.S. and ROK recognize that our national interests, as well as those of our bilateral Alliance, can be advanced by firmly upholding and strengthening the rules-based order in the Indo-Pacific region; this includes the freedoms of navigation and overflight, and other uses of the sea guaranteed to all nations under international law.
    • Both sides reaffirm their strong support for Association of Southeast Asian Nations (ASEAN) centrality, unity, and the ASEAN-led regional architecture; we commit to partnering closely with ASEAN to advance implementation of the ASEAN Outlook on the Indo-Pacific in defense-related areas; we are also determined to work closely with Pacific Island countries and the Pacific Islands Forum to build capacity in the region.
    • Both sides intend to pursue initiatives and activities together that more comprehensively build partner capacity, bolster maritime security, and foster collaboration and interoperability with like-minded countries in the region.
    • Through increased participation in multilateral exercises, both sides are determined to enhance the readiness, capability, and resilience of combined forces to be prepared to respond to evolving and complex threats in the region.
    • To expand comprehensive security cooperation, the U.S. and ROK intend to pursue initiatives that strengthen collaboration in the areas of non-proliferation, counter-terrorism, humanitarian aid and disaster relief, climate change, and the prevention of infectious diseases as well as empower regional organizations to contribute to greater regional stability; both sides also intend to increase information sharing with like-minded countries to better address challenges in the region.
    • In the area of defense exports and defense industrial cooperation, both sides intend to work together on issues of mutual interest including: sharing best practices on export controls, foreign direct investment, and technology security; exchanging information on expert planning and decision-making; and cooperating effectively to secure supply chains.
    • Both sides are also determined to work together to increase information sharing in the cyber domain to enhance regional cybersecurity practices and situational awareness, and build cyber resilience to defend against globally-expanding malicious cyber threats.
    • Finally, both sides also pledge to continue using established forums such as the Regional Cooperation Working Group (RCWG), and other existing bilateral mechanisms, to develop and sustain dialogue between the U.S. and ROK on defense cooperation in priority areas identified in both the government and industrial sectors. The mechanisms will report to the annual Security Consultative Meeting (SCM) through the Korea-U.S. Integrated Defense Dialogue (KIDD).

    To implement this framework, both sides intend to present concepts for cooperative projects through government channels and, where appropriate, facilitate business-to-business connections that may advance opportunities for collaboration and cooperation. These projects should complement other efforts being undertaken by other like-minded countries in the region and seek to effectively utilize public sector resources.

    Initiatives and projects under this framework will focus on the following areas, which both sides have identified as priority areas for cooperation, with a particular focus on cooperation with ASEAN and Pacific Island countries:

    Maritime Security 

    Multilateral Exercises

    Capacity Building 

    Defense Exports and Defense Industrial Cooperation

    Technical Cooperation (e.g., cyber security and emerging capabilities)

    Information Sharing

    Both sides intend to identify points of contact responsible for coordinating engagements and tracking the implementation of cooperative projects decided upon under this framework. The lead points of contact should review potential opportunities and prioritize actions, with the goal of presenting at least one project or initiative each year before the SCM.

    MIL OSI USA News –

  • MIL-OSI Australia: Albanese Government invests $100 million in pedestrian and cycleways

    Source: Australian Ministers for Regional Development

    Pedestrians and cyclists across the country will have safer and better connected travel options thanks to the Albanese Government’s $100 million Active Transport Fund, which opens for applications today. 

    The fund contributes to three long-term aims of our Government: improving road safety, encouraging Australians to live heather lives, and offering better options for Australians to contribute to our net zero vision. 

    The Active Transport Fund will contribute up to $5 million per project to construct new or upgrade existing bicycle and walking paths, and is open to all state and territory governments and Local Government Authorities. 

    We’ve heard Australians calls for more sustainable and lower cost travel options to get to school, work and local services. We also know that Australians want safer and more accessible pathways to better connect communities.

    We’re answering those calls, developing this fund to enable states, territories and local governments to deliver projects that will support liveable and healthy communities. 

    Applications will be assessed on merit basis and must meet at least one of the focus areas of the program: improving road safety for cyclists and pedestrians, reducing transport emissions, and supporting active and liveable communities. Applications close on 13 January 2025. 

    I encourage individuals to get involved and speak to their local or state government about pedestrian or cycle paths they’d like to see, and I encourage any interested state, territory or local governments to apply. 

    I look forward to announcing the successful projects in future, and building more liveable, connected communities for all Australians.

    For more information, including the funding guidelines, visit infrastructure.gov.au/atf. 

    MIL OSI News –

  • MIL-OSI Australia: Housing boost for Victoria

    Source: Australian Ministers for Regional Development

    The Albanese Government is unlocking more homes in Victoria through funding the critical infrastructure that allows housing to be built more quickly.

    The Australian Government is providing more than $248 million to fast-track 3,781 dwellings across the State through the $1.5 billion Housing Support Program.

    Funding will be used on enabling infrastructure works across the state such as roads, sewage and water, as well as supporting access to social housing and increasing housing supply. 

    $4.5 million is being provided to deliver a signalised intersection and left turn lane access from Burwood Highway, Knoxfield. This will pave the way for around 400 new dwellings and increase access to the area.

    More than $88 million is being made available for social housing and enabling infrastructure across regional Victoria. At least 10 per cent of funding is directed towards First Nations’ housing outcomes, consistent with the Victorian Government’s commitment under the Big Housing Build.

    The Housing Support programs provides funding that increases housing supply by funding the infrastructure and amenities needed for new housing development, as well as improvements in building planning capability.

    It’s part of the Albanese Government’s $32 billion Homes for Australia Plan to meet the ambitious national target of building 1.2 million new, well-located homes over the next 5 years.

    Quotes attributable to Federal Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King:

    “We have a $32 billion plan which is already building more homes, helping people buy homes, massively increasing rent assistance, and getting more social and affordable homes into the system.

    “We are turbocharging works to get housing sites ready more quickly so the building can begin to get people into their new homes sooner.

    “Together with the Victorian Government we’re delivering new homes close to jobs, schools, transport.”

    Quote attributable to Victorian Minister for Planning Sonia Kilkenny:

    “After a decade of neglect from the former Liberal National government, we welcome having a partner in Canberra that’s serious about delivering more infrastructure and more homes in Victoria.”

    Quote attributable to Victorian Minister for Housing Harriet Shing:

    “Our partnership with the Federal Government is an essential part of delivering more and better homes for Victorians through the first round of the Housing Support Program. We know that there is more to do all over Australia to address the housing shortage, and we are determined to use Commonwealth funding to ensure that all Victorians have access to safe, secure, and modern homes that they are proud to call their own.”

    MIL OSI News –

  • 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: 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

    The MIL Network –

  • MIL-OSI: Pathfinder Bancorp, Inc. Announces Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Results reflect branch-acquisition-related expenses, as well as provision expense resulting from a comprehensive loan portfolio review that significantly reduced nonperformers, as Pathfinder positions the Bank for organic growth in its Central New York markets

    OSWEGO, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — Pathfinder Bancorp, Inc. (“Pathfinder” or the “Company”) (NASDAQ: PBHC) announced its financial results for the third quarter ended September 30, 2024.

    The holding company for Pathfinder Bank (“the Bank”) reported a third quarter 2024 net loss attributable to common shareholders of $4.6 million or $0.75 per share, compared to net income available to common shareholders of $2.0 million or $0.32 per share in the second quarter of 2024 and $2.2 million or $0.35 per share in the third quarter of 2023.

    Third Quarter 2024 Highlights and Key Developments

    • The net loss reflected $9.0 million in provision expense that primarily resulted from a comprehensive loan portfolio review that the Bank elected to undertake as part of its commitment to continuously improve its credit risk management approach. Following its conclusion, the Company recorded net charge offs of $8.7 million in the quarter and reduced nonperforming loans by 34.0% to $16.2 million at period end, or 1.8% of total loans. The allowance for credit losses on September 30, 2024 represented 1.87% and 106.8% of total and nonperforming loans, respectively.
    • Net interest income increased for the third consecutive quarter to $11.7 million, including the benefit of a catch-up interest payment of $887,000. Net interest income increased $2.3 million from $9.5 million in the linked quarter ended June 30, 2024 and $1.7 million from $10.1 million in the third quarter of 2023. Net interest margin (“NIM”) expanded for the third consecutive quarter to 3.34%, including the benefit of 25 basis points from the catch-up interest payment. NIM increased 56 basis points from the linked quarter and 27 basis points from the year-ago period.
    • Non-interest income was $1.7 million, including a net death benefit of $175,000 on bank owned life insurance (“BOLI”), compared to $1.2 million in each of the linked and year-ago quarters.
    • Non-interest expense was $10.3 million, including $1.6 million in transaction-related expenses for the previously announced July 2024 closing of the East Syracuse branch acquisition, in addition to third quarter 2024 operating costs of approximately $462,000 associated with Pathfinder’s newest location. Non-interest expense was $7.9 million in the linked quarter and $7.7 million in the year-ago period.
    • Pre-tax, pre-provision net income was $3.4 million, including the effect of transaction-related expenses, compared to $2.8 million in the linked quarter and $3.6 million in the year-ago period. Pre-tax, pre-provision net income, which is not a financial metric under generally accepted accounting principles (“GAAP”), is a measure that the Company believes is helpful to understanding profitability without giving effect to income taxes and provision for credit losses.
    • Total deposits were $1.20 billion at period end, compared to $1.10 billion on June 30, 2024 and $1.13 billion on September 30, 2023. The Bank’s loan-to-deposit ratio was 77.1% on September 30, 2024.
    • Total loans were $921.7 million at period end, compared to $888.3 million on June 30, 2024 and $896.1 million on September 30, 2023.

    “Pathfinder is well positioned for organic growth opportunities in our attractive Central New York markets, having closed the third quarter with significantly reduced levels of nonperformers, healthy reserves, strong capital ratios, and abundant liquidity,” said President and Chief Executive Officer James A. Dowd. “Having completed a thorough, top-to-bottom review of the loan portfolio at the end of September, we believe it is sufficiently collateralized and reserved. Going forward, we intend to take a more exacting loss-mitigation approach, and Pathfinder’s ongoing underwriting and credit risk management processes can be expected to reflect the combined expertise of our entire management team and professional staff, including our recently appointed Chief Credit Officer Joseph Serbun and Chief Financial Officer Justin Bigham.”

    Dowd added, “Our financial performance also reflects the positive impact of Pathfinder Bank’s in-market core deposit franchise and immediate contributions from our recent East Syracuse branch acquisition, including higher loan and deposit balances, lower funding costs, revenue growth, and NIM expansion.  Looking ahead, as we end 2024 and begin the new year, we intend to tightly manage operating expenses and expect continued benefits from our core deposit franchise as a source of low-cost, relationship-based funding for commercial and retail loan growth in our local markets.”

    East Syracuse Branch Acquisition
    As previously announced, Pathfinder Bank completed the purchase of its East Syracuse branch on July 19, 2024, assuming $186.0 million in associated deposits and acquiring $30.6 million in assets including $29.9 million in loans. Acquired assets include a core deposit intangible (“CDI”) valued at $6.3 million, and the valuation of acquired loans resulted in an estimated discount of $1.8 million.

    The addition of the East Syracuse branch significantly increased the Bank’s customer base, which expanded the number of Pathfinder’s relationships by approximately 25% and grew non-brokered deposits by 21.5%.

    At acquisition, the average cost of deposits assumed with the branch acquisition was 1.99% (excluding the CDI) and as of September 30, 2024, the Bank retained approximately 97% of deposit balances. The Company utilized a portion of the low-cost liquidity provided by the transaction to pay down $74.4 million in borrowings and $106.0 million in high-cost brokered deposits during the third quarter of 2024.

    Insurance Business Divestiture
    On October 15, 2024, Pathfinder announced that it sold its interest in the FitzGibbons Agency, LLC, which contributed $28,000 to the Company’s net income and 24 basis points to its consolidated efficiency ratio in the third quarter of 2024, to Marshall & Sterling Enterprises, Inc. Reflecting an active insurance brokerage market and the FitzGibbons Agency’s success since initiating its partnership with the Bank 13 years ago, Pathfinder will receive approximately $2.0 million from the sale, which closed on October 1, 2024, and the Company expects to recognize a portion of that amount as a net gain in the fourth quarter of 2024.

    Net Interest Income and Net Interest Margin
    Third quarter 2024 net interest income was $11.7 million, an increase of 23.8% from the second quarter of 2024. An increase in interest and dividend income of $2.2 million was primarily attributed to average yield increases of 67 basis points on loans including 39 basis points from an $887,000 catch-up interest payment associated with purchased loan pool positions, 97 basis points on fed funds sold and interest-earning deposits, and 45 basis points on all earning assets. The corresponding increase in loan interest income and federal funds sold and interest-earning deposits was $1.9 million and $371,000, respectively. A decrease in interest expense of $75,000 was attributed to reductions in brokered deposits and short-term borrowings expense associated with paydowns of brokered deposits and borrowings utilizing a portion of the low-cost liquidity provided by the Bank’s East Syracuse branch acquisition.

    Net interest margin was 3.34% in the third quarter of 2024 compared to 2.78% in the second quarter of 2024. The increase of 56 basis points was driven by improvements in earning asset yields and funding costs, as well as 25 basis points attributed to the catch-up interest payment received in the third quarter of 2024.

    Third quarter 2024 net interest income was $11.7 million, an increase of 16.6% from the third quarter of 2023. An increase in interest and dividend income of $3.5 million was primarily attributed to average yield increases of 74 basis points on loans including 39 basis points from the catch-up interest payment, 67 basis points on taxable investment securities, 227 basis points on fed funds sold and interest-earning deposits, and 65 basis points on all earning assets. The corresponding increase in loan interest income, taxable investment securities, and federal funds sold and interest-earning deposits was $2.0 million, $1.2 million, and $426,000, respectively. Increased interest and dividend income was partially offset by an increase in interest expense of $1.9 million.  This increase in interest expense was predominantly the result of higher interest rates and balances associated with borrowing and higher average rates paid on interest-bearing deposits, compared to the third quarter of 2023.

    Net interest margin was 3.34% in the third quarter of 2024 compared to 3.07% in the third quarter of 2023. The increase of 27 basis points was driven by improvements in earning asset yields and lower average borrowings, partially offset by higher funding costs, as well as 25 basis points attributed to the catch-up interest payment received in the third quarter of 2024.

    Noninterest Income
    Noninterest income totaled $1.7 million in the third quarter of 2024, an increase of $496,000 or 41.0% from the second quarter of 2024 and an increase of $514,000 or 43.1% from the third quarter of 2023.

    Compared to the linked quarter, noninterest income growth included increases of $194,000 in earnings and gain on BOLI including the net death benefit of $175,000, $109,000 in debit card interchange fees, and $62,000 in service charges on deposit accounts, as well as a $33,000 decrease in loan servicing fees. Noninterest income growth from the linked quarter also reflected an increase of $204,000 in net realized losses on sales and redemptions of investment securities, as well as increases of $201,000 in net realized gains on sales of marketable equity securities and $50,000 in gains on sales of loans and foreclosed real estate.

    Compared to the year-ago quarter, noninterest income growth for the third quarter of 2024 included increases of $278,000 in interchange fees, $196,000 in earnings and gain on BOLI including the net death benefit of $175,000 on BOLI, and $49,000 in service charges on deposit accounts, as well as a $20,000 decrease in loan servicing fees. Noninterest income growth from the year-ago quarter also reflected a $178,000 increase in net realized losses on sales and redemptions of investment securities, as well as increases of $101,000 in net realized gains on sales of marketable equity securities and $49,000 in gains on sales of loans and foreclosed real estate.

    Prior to the October 1, 2024 sale of the Company’s insurance agency asset, it contributed $367,000 to noninterest income in the third quarter of 2024, compared to $260,000 and $310,000 in the linked and year-ago quarters, respectively.
      
    Noninterest Expense
    Noninterest expense totaled $10.3 million in the third quarter of 2024, increasing $2.4 million and $2.6 million from the linked and year-ago quarters, respectively. The increase was primarily due to $1.6 million in transaction-related expenses for the East Syracuse branch acquisition, in addition to third quarter 2024 operating costs of approximately $462,000 associated with operating Pathfinder Bank’s newest location.

    Professional and other services expense was $1.8 million in the third quarter, increasing $1.1 million and $1.3 million from the linked and year-ago quarters, respectively. The increase was primarily attributed to branch acquisition-related expenses.

    Salaries and benefits were $5.0 million in the third quarter of 2024, increasing $560,000 and $805,000 from the linked and year-ago quarters, respectively. The increase was primarily due to $141,000 transaction-related bonuses to employees, $115,000 reduced salary cost deferrals (“ASC 310-20”) associated with reduced lending volumes, and $80,000 of ongoing personnel-related costs associated with operating the branch acquired early in the third quarter of 2024. The remaining increase was primarily driven by higher salaries and benefits costs associated with merit increases and wage inflation.

    Building and occupancy was $1.1 million in the third quarter of 2024, increasing $220,000 and $266,000 from the linked and year-ago quarters, respectively. These increases were due to ongoing facilities-related costs of approximately $322,000 associated with operating the branch acquired early in the third quarter of 2024, partially offset by seasonal reductions in building and occupancy expense categories when compared to the second quarter of 2024.

    Prior to the October 1, 2024 sale of the Company’s insurance agency asset, it incurred $308,000 of noninterest expense in the third quarter of 2024, compared to $232,000 and $273,000 in the linked and year-ago quarters, respectively.

    For the third quarter of 2024, annualized noninterest expense represented 2.75% of average assets, including 8 basis points from insurance agency expense and 43 basis points from acquisition-related expenses.  The efficiency ratio was 75.28%, including 24 basis points and 1,186 basis points attributed to the insurance business and acquisition-related expenses, respectively.  The efficiency ratio, which is not a financial metric under GAAP, is a measure that the Company believes is helpful to understanding its level of non-interest expense as a percentage of total revenue. For the linked and year-ago quarters, annualized noninterest expense represented 2.19% and 2.20% of average assets, respectively. The efficiency ratio was 74.08% and 67.93% in the linked and year-ago periods.

    Statement of Financial Condition
    As of September 30, 2024, the Company’s statement of financial condition reflects total assets of $1.48 billion, compared to $1.45 billion and $1.40 billion recorded on June 30, 2024 and September 30, 2023, respectively.

    The increase in assets during the third quarter of 2024 was primarily due to higher total loan balances, including $29.9 million in primarily consumer, residential, and home equity loans acquired with the East Syracuse branch transaction in the third quarter of 2024.

    Loans totaled $921.7 million on September 30, 2024, increasing 3.8% during the third quarter and 2.9% from one year prior. Consumer and residential loans totaled $388.7 million, increasing 7.6% during the third quarter and 4.8% from one year prior. Commercial loans totaled $534.5 million, increasing 1.4% during the third quarter and 1.7% from one year prior.

    With respect to liabilities, deposits totaled $1.20 billion on September 30, 2024, increasing 8.6% during the third quarter and 6.1% from one year prior. The increase in deposits during the third quarter of 2024 reflects $186.0 million assumed with the East Syracuse branch acquisition, offset by a reduction of $106.0 million in brokered deposits utilizing lower-cost liquidity provided by the transaction, as well as seasonal fluctuations in municipal deposits. The Company also utilized liquidity provided by the transaction to reduce short-term borrowings, which totaled $60.3 million on September 30, 2024 as compared to $127.6 million on June 30, 2024 and $56.7 million on September 30, 2023.

    Shareholders equity totaled $120.3 million on September 30, 2024, down $3.1 million or 2.5% in the third quarter and $6.5 million or 5.7% from one year prior. The decrease reflects lower retained earnings attributed primarily to the elevated third quarter 2024 provision expense’s impact on net income in the period, which more than offset a significant reduction in accumulated other comprehensive loss (“AOCL”). AOCL improved to $6.7 million on September 30, 2024, declining $2.1 million or 23.6% during the third quarter and $6.6 million or 49.7% from one year prior, reflecting a favorable change in the interest rate environment.

    Asset Quality
    The Company’s asset quality metrics reflect the comprehensive loan portfolio review completed at the end of the third quarter of 2024.

    Nonperforming loans were reduced by 34.0% in the third quarter of 2024 to $16.2 million or 1.75% of total loans on September 30, 2024. Nonperforming loans were $24.5 million or 2.76% of total loans on June 30, 2024 and $16.2 million or 1.80% of total loans on September 30, 2023.

    Gross loan charge offs totaled $8.8 million in the third quarter of 2024, following completion of the portfolio review. Gross loan charge offs included $4.9 million for 13 nonperforming commercial loans, as well as $2.5 million for nonperforming positions primarily associated with secured solar purchased loan pools acquired in 2021.

    Net charge offs (“NCOs”) after recoveries were $8.7 million or an annualized 1.29% of average loans in the third quarter of 2024, compared to $66,000 or 0.02% in the linked quarter and $3.8 million or 0.61% in the prior year period.

    The $9.0 million provision for credit losses expense in the third quarter of 2024 primarily resulted from a replenishment of the allowance for credit losses (“ACL”) for commercial loan reserves and an adjustment to the lifetime loss estimate for solar purchased loan pool positions, which followed completion of the Company’s loan portfolio review. The Company believes it is sufficiently collateralized and reserved, with its ACL of $17.3 million on September 30, 2024 increasing by $382,000 from June 30, 2024 and $1.5 million from September 30, 2023. As a percentage of total loans, ACL represented 1.87% on September 30, 2024, 1.90% on June 30, 2024, and 1.76% on September 30, 2023.

    Liquidity
    The Company has diligently ensured a strong liquidity profile as of September 30, 2024 to meet its ongoing financial obligations. The Bank’s liquidity management, as evaluated by its cash reserves and operational cash flows from loan repayments and investment securities, remains robust and is effectively managed by the institution’s leadership.

    The Bank’s analysis indicates that expected cash inflows from loans and investment securities are more than sufficient to meet all projected financial obligations.  Total deposits increased to $1.20 billion on September 30, 2024 from $1.10 billion on June 30, 2024 and $1.13 billion on September 30, 2023. Core deposits increased to 77.45% of total deposits on September 30, 2024, from 67.98% on June 30, 2024 and 69.83% on September 30, 2023. This further underscores the success of the Bank’s strategic initiatives to enhance its core deposit franchise, including targeted marketing campaigns and customer engagement programs aimed at deepening banking relationships and enhancing deposit stability.

    At the end of the current quarter, Pathfinder Bancorp had an available additional funding capacity of $105.2 million with the Federal Home Loan Bank of New York, which complements its liquidity reserves. Moreover, the Bank maintains additional unused credit lines totaling $27.3 million, which provide a buffer for additional funding needs. These facilities, including access to the Federal Reserve’s Discount Window, are part of a comprehensive liquidity strategy that ensures flexibility and readiness to respond to any funding requirements.

    Cash Dividend Declared
    On September 30, 2024, Pathfinder’s Board of Directors declared a cash dividend of $0.10 per share for holders of both voting common and non-voting common stock.

    In addition, this dividend also extends to the notional shares of the Company’s warrants. Shareholders registered by October 18, 2024 will be eligible for the dividend, which is scheduled for disbursement on November 8, 2024. This distribution aligns with Pathfinder Bancorp’s philosophy of consistent and reliable delivery of shareholder value.

    Evaluating the Company’s market performance, the closing stock price as of September 30, 2024 stood at $15.83 per share. This positions the dividend yield at an attractive 2.53%.

    About Pathfinder Bancorp, Inc.
    Pathfinder Bancorp, Inc. (NASDAQ: PBHC) is the commercial bank holding company for Pathfinder Bank, which serves Central New York customers throughout Oswego, Syracuse and their neighboring communities. Strategically located branches averaging approximately $100 million in deposits per location, as well as diversified consumer, mortgage and commercial loan portfolios, reflect the state-chartered Bank’s commitment to in-market relationships and local customer service. The Company also offers investment services to individuals and businesses. At September 30, 2024, the Oswego-headquartered Company had assets of $1.48 billion, loans of $921.7 million, and deposits of $1.20 billion. More information is available at pathfinderbank.com and ir.pathfinderbank.com.

    Forward-Looking Statements
    Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov.

    This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial.

    PATHFINDER BANCORP, INC.                              
    Selected Financial Information (Unaudited)                              
    (Amounts in thousands, except per share amounts)                              
                                   
        2024     2023  
    SELECTED BALANCE SHEET DATA:   September 30,     June 30,     March 31,     December 31,     September 30,  
    ASSETS:                              
    Cash and due from banks   $ 18,923     $ 12,022     $ 13,565     $ 12,338     $ 12,822  
    Interest-earning deposits     16,401       19,797       15,658       36,394       11,652  
    Total cash and cash equivalents     35,324       31,819       29,223       48,732       24,474  
    Available-for-sale securities, at fair value     271,977       274,977       279,012       258,716       206,848  
    Held-to-maturity securities, at amortized cost     161,385       166,271       172,648       179,286       185,589  
    Marketable equity securities, at fair value     3,872       3,793       3,342       3,206       3,013  
    Federal Home Loan Bank stock, at cost     5,401       8,702       7,031       8,748       5,824  
    Loans     921,660       888,263       891,531       897,207       896,123  
    Less: Allowance for credit losses     17,274       16,892       16,655       15,975       15,767  
    Loans receivable, net     904,386       871,371       874,876       881,232       880,356  
    Premises and equipment, net     18,989       18,878       18,332       18,441       18,491  
    Assets held-for-sale     –       3,042       3,042       3,042       3,042  
    Operating lease right-of-use assets     1,425       1,459       1,493       1,526       1,559  
    Finance lease right-of-use assets     16,873       4,004       4,038       4,073       4,108  
    Accrued interest receivable     6,806       7,076       7,170       7,286       6,594  
    Foreclosed real estate     –       60       82       151       189  
    Intangible assets, net     6,217       76       80       85       88  
    Goodwill     5,752       4,536       4,536       4,536       4,536  
    Bank owned life insurance     24,560       24,967       24,799       24,641       24,479  
    Other assets     20,159       25,180       23,968       22,097       31,459  
    Total assets   $ 1,483,126     $ 1,446,211     $ 1,453,672     $ 1,465,798     $ 1,400,649  
                                   
    LIABILITIES AND SHAREHOLDERS’ EQUITY:                              
    Deposits:                              
    Interest-bearing deposits   $ 986,103     $ 932,132     $ 969,692     $ 949,898     $ 953,143  
    Noninterest-bearing deposits     210,110       169,145       176,421       170,169       174,710  
    Total deposits     1,196,213       1,101,277       1,146,113       1,120,067       1,127,853  
    Short-term borrowings     60,315       127,577       91,577       125,680       56,698  
    Long-term borrowings     39,769       45,869       45,869       49,919       53,915  
    Subordinated debt     30,057       30,008       29,961       29,914       29,867  
    Accrued interest payable     236       2,092       1,963       2,245       1,731  
    Operating lease liabilities     1,621       1,652       1,682       1,711       1,739  
    Finance lease liabilities     16,829       4,359       4,370       4,381       4,391  
    Other liabilities     16,986       9,203       9,505       11,625       10,013  
    Total liabilities     1,362,026       1,322,037       1,331,040       1,345,542       1,286,207  
    Shareholders’ equity:                              
    Voting common stock shares issued and outstanding     4,719,788       4,719,788       4,719,788       4,719,288       4,713,353  
    Voting common stock     47       47       47       47       47  
    Non-Voting common stock     14       14       14       14       14  
    Additional paid in capital     53,231       53,182       53,151       53,114       52,963  
    Retained earnings     73,670       78,936       77,558       76,060       74,282  
    Accumulated other comprehensive loss     (6,716 )     (8,786 )     (8,862 )     (9,605 )     (13,356 )
    Unearned ESOP shares     –       (45 )     (90 )     (135 )     (180 )
    Total Pathfinder Bancorp, Inc. shareholders’ equity     120,246       123,348       121,818       119,495       113,770  
    Noncontrolling interest     854       826       814       761       672  
    Total equity     121,100       124,174       122,632       120,256       114,442  
    Total liabilities and shareholders’ equity   $ 1,483,126     $ 1,446,211     $ 1,453,672     $ 1,465,798     $ 1,400,649  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months Ended
    September 30,    		     2024     2023  
    SELECTED INCOME STATEMENT DATA:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Interest and dividend income:                                          
    Loans, including fees   $ 39,182     $ 34,919     $ 14,425     $ 12,489     $ 12,268     $ 12,429     $ 12,470  
    Debt securities:                                          
    Taxable     17,007       12,408       5,664       5,736       5,607       5,092       4,488  
    Tax-exempt     1,475       1,441       469       498       508       506       507  
    Dividends     456       341       149       178       129       232       140  
    Federal funds sold and interest-earning deposits     711       226       492       121       98       69       66  
    Total interest and dividend income     58,831       49,335       21,199       19,022       18,610       18,328       17,671  
    Interest expense:                                          
    Interest on deposits     22,670       15,885       7,633       7,626       7,411       7,380       6,223  
    Interest on short-term borrowings     3,476       1,624       1,136       1,226       1,114       1,064       674  
    Interest on long-term borrowings     597       619       202       201       194       231       222  
    Interest on subordinated debt     1,476       1,447       496       489       491       494       492  
    Total interest expense     28,219       19,575       9,467       9,542       9,210       9,169       7,611  
    Net interest income     30,612       29,760       11,732       9,480       9,400       9,159       10,060  
    Provision for (benefit from) credit losses:                                          
    Loans     10,118       2,675       9,104       304       710       316       798  
    Held-to-maturity securities     (90 )     (24 )     (31 )     (74 )     15       (74 )     5  
    Unfunded commitments     (43 )     14       (104 )     60       1       23       30  
    Total provision for credit losses     9,985       2,665       8,969       290       726       265       833  
    Net interest income after provision for credit losses     20,627       27,095       2,763       9,190       8,674       8,894       9,227  
    Noninterest income:                                          
    Service charges on deposit accounts     1,031       913       392       330       309       336       343  
    Earnings and gain on bank owned life insurance     685       466       361       167       157       164       165  
    Loan servicing fees     279       238       79       112       88       69       99  
    Net realized (losses) gains on sales and redemptions of investment securities     (320 )     60       (188 )     16       (148 )     2       (13 )
    Net realized gains (losses) on sales of marketable equity securities     31       (208 )     62       (139 )     108       (47 )     (39 )
    Gains on sales of loans and foreclosed real estate     148       183       90       40       18       (2 )     41  
    Loss on sale of premises and equipment     (36 )     –       (36 )     –       –       –       –  
    Debit card interchange fees     610       455       300       191       119       161       22  
    Insurance agency revenue     1,024       1,001       367       260       397       303       310  
    Other charges, commissions & fees     1,203       764       280       234       689       332       265  
    Total noninterest income     4,655       3,872       1,707       1,211       1,737       1,318       1,193  
    Noninterest expense:                                          
    Salaries and employee benefits     13,687       12,243       4,959       4,399       4,329       3,677       4,154  
    Building and occupancy     2,864       2,699       1,134       914       816       864       868  
    Data processing     1,750       1,519       672       550       528       499       483  
    Professional and other services     3,078       1,531       1,820       696       562       488       492  
    Advertising     386       516       165       116       105       155       144  
    FDIC assessments     685       663       228       228       229       222       222  
    Audits and exams     416       476       123       123       170       259       159  
    Insurance agency expense     825       817       308       232       285       216       273  
    Community service activities     111       151       20       39       52       49       55  
    Foreclosed real estate expenses     82       76       27       30       25       35       44  
    Other expenses     1,989       1,660       803       581       605       580       759  
    Total noninterest expense     25,873       22,351       10,259       7,908       7,706       7,044       7,653  
    (Loss) income before provision for income taxes     (591 )     8,616       (5,789 )     2,493       2,705       3,168       2,767  
    (Benefit) provision for income taxes     (160 )     1,772       (1,173 )     481       532       590       573  
    Net (loss) income attributable to noncontrolling interest and Pathfinder Bancorp, Inc.     (431 )     6,844       (4,616 )     2,012       2,173       2,578       2,194  
    Net income attributable to noncontrolling interest     93       87       28       12       53       42       18  
    Net (loss) income attributable to Pathfinder Bancorp Inc.   $ (524 )   $ 6,757     $ (4,644 )   $ 2,000     $ 2,120     $ 2,536     $ 2,176  
    Voting Earnings per common share – basic and diluted   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Series A Non-Voting Earnings per common share- basic and diluted   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Dividends per common share (Voting and Series A Non-Voting)   $ 0.30     $ 0.27     $ 0.10     $ 0.10     $ 0.10     $ 0.09     $ 0.09  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,    		     2024     2023  
    FINANCIAL HIGHLIGHTS:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Selected Ratios:                                          
    Return on average assets     -0.05 %     0.65 %     -1.25 %     0.56 %     0.59 %     0.72 %     0.63 %
    Return on average common equity     -0.57 %     7.88 %     -14.79 %     6.49 %     7.01 %     8.72 %     7.50 %
    Return on average equity     -0.57 %     7.88 %     -14.79 %     6.49 %     7.01 %     8.72 %     7.50 %
    Return on average tangible common equity (1)     -0.59 %     8.23 %     -15.28 %     6.78 %     7.32 %     9.01 %     7.75 %
    Net interest margin     2.97 %     3.02 %     3.34 %     2.78 %     2.75 %     2.74 %     3.07 %
    Loans/deposits     77.05 %     79.45 %     77.05 %     80.66 %     77.79 %     80.10 %     79.45 %
    Core deposits/deposits (2)     77.45 %     69.83 %     77.45 %     67.98 %     69.17 %     69.83 %     69.83 %
    Annualized non-interest expense/average assets     2.39 %     2.16 %     2.75 %     2.19 %     2.16 %     2.01 %     2.20 %
    Efficiency ratio (1)     72.70 %     66.58 %     75.28 %     74.08 %     68.29 %     67.25 %     67.93 %
                                               
    Other Selected Data:                                          
    Average yield on loans     5.82 %     5.17 %     6.31 %     5.64 %     5.48 %     5.55 %     5.57 %
    Average cost of interest bearing deposits     3.12 %     2.23 %     3.11 %     3.21 %     3.07 %     3.10 %     2.65 %
    Average cost of total deposits, including non-interest bearing     2.64 %     1.88 %     2.59 %     2.72 %     2.61 %     2.63 %     2.24 %
    Deposits/branch (4)   $ 99,684     $ 102,532     $ 99,684     $ 100,116     $ 104,192     $ 101,824     $ 102,532  
    Pre-tax, pre-provision net income (1)   $ 9,714     $ 11,221     $ 3,368     $ 2,767     $ 3,579     $ 3,431     $ 3,613  
    Total revenue (1)   $ 35,587     $ 33,572     $ 13,627     $ 10,675     $ 11,285     $ 10,475     $ 11,266  
                                               
    Share and Per Share Data:                                          
    Cash dividends per share   $ 0.30     $ 0.27     $ 0.10     $ 0.10     $ 0.10     $ 0.09     $ 0.09  
    Book value per common share   $ 19.71     $ 18.67     $ 19.71     $ 20.22     $ 19.97     $ 19.59     $ 18.67  
    Tangible book value per common share (1)   $ 17.75     $ 17.91     $ 17.75     $ 19.46     $ 19.21     $ 18.83     $ 17.91  
    Basic and diluted weighted average shares outstanding – Voting     4,708       4,640       4,714       4,708       4,701       4,693       4,671  
    Basic and diluted earnings per share – Voting (3)   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Basic and diluted weighted average shares outstanding – Series A Non-Voting     1,380       1,380       1,380       1,380       1,380       1,380       1,380  
    Basic and diluted earnings per share – Series A Non-Voting (3)   $ (0.09 )   $ 1.10     $ (0.75 )   $ 0.32     $ 0.34     $ 0.41     $ 0.35  
    Common shares outstanding at period end     6,100       6,094       6,100       6,100       6,100       6,100       6,094  
                                               
    Pathfinder Bancorp, Inc. Capital Ratios:                                          
    Company tangible common equity to tangible assets (1)     7.36 %     7.82 %     7.36 %     8.24 %     8.09 %     7.86 %     7.82 %
    Company Total Core Capital (to Risk-Weighted Assets)     15.55 %     17.00 %     15.55 %     16.19 %     16.23 %     16.17 %     17.00 %
    Company Tier 1 Capital (to Risk-Weighted Assets)     11.84 %     12.39 %     11.84 %     12.31 %     12.33 %     12.30 %     12.39 %
    Company Tier 1 Common Equity (to Risk-Weighted Assets)     11.33 %     12.91 %     11.33 %     11.83 %     11.85 %     11.81 %     12.91 %
    Company Tier 1 Capital (to Assets)     8.29 %     9.21 %     8.29 %     9.16 %     9.16 %     9.35 %     9.21 %
                                               
    Pathfinder Bank Capital Ratios:                                          
    Bank Total Core Capital (to Risk-Weighted Assets)     14.52 %     14.76 %     14.52 %     16.04 %     15.65 %     15.05 %     14.76 %
    Bank Tier 1 Capital (to Risk-Weighted Assets)     13.26 %     13.51 %     13.26 %     14.79 %     14.39 %     13.80 %     13.51 %
    Bank Tier 1 Common Equity (to Risk-Weighted Assets)     13.26 %     13.51 %     13.26 %     14.79 %     14.39 %     13.80 %     13.51 %
    Bank Tier 1 Capital (to Assets)     9.13 %     10.11 %     9.13 %     10.30 %     10.13 %     10.11 %     10.11 %

    (1) Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
    (2) Non-brokered deposits excluding certificates of deposit of $250,000 or more.
    (3) Basic and diluted earnings per share are calculated based upon the two-class method. Weighted average shares outstanding do not include unallocated ESOP shares.
    (4) Includes 11 full-service branches and one motor bank for September 30, 2024. Includes 10 full-service branches and one motor bank for all periods prior.

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,    		     2024     2023  
    ASSET QUALITY:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Total loan charge-offs   $ 8,992     $ 4,365     $ 8,812     $ 112     $ 68     $ 211     $ 3,874  
    Total recoveries     174       252       90       46       38       103       45  
    Net loan charge-offs     8,818       4,113       8,722       66       30       108       3,829  
    Allowance for credit losses at period end     17,274       15,767       17,274       16,892       16,655       15,975       15,767  
    Nonperforming loans at period end     16,170       16,173       16,170       24,490       19,652       17,227       16,173  
    Nonperforming assets at period end   $ 16,170     $ 16,362     $ 16,170     $ 24,550     $ 19,734     $ 17,378     $ 16,362  
    Annualized net loan charge-offs to average loans     1.29 %     0.61 %     1.29 %     0.02 %     0.01 %     0.47 %     0.61 %
    Allowance for credit losses to period end loans     1.87 %     1.76 %     1.87 %     1.90 %     1.87 %     1.78 %     1.76 %
    Allowance for credit losses to nonperforming loans     106.83 %     97.49 %     106.83 %     68.98 %     84.75 %     92.73 %     97.49 %
    Nonperforming loans to period end loans     1.75 %     1.80 %     1.75 %     2.76 %     2.20 %     1.92 %     1.80 %
    Nonperforming assets to period end assets     1.09 %     1.17 %     1.09 %     1.70 %     1.36 %     1.19 %     1.17 %
        2024     2023  
    LOAN COMPOSITION:   September 30,     June 30,     March 31,     December 31,     September 30,  
    1-4 family first-lien residential mortgages   $ 255,235     $ 250,106     $ 252,026     $ 257,604     $ 252,956  
    Residential construction     4,077       309       1,689       1,355       2,090  
    Commercial real estate     378,805       370,361       363,467       358,707       362,822  
    Commercial lines of credit     64,672       62,711       67,416       72,069       73,497  
    Other commercial and industrial     88,247       90,813       91,178       89,803       85,506  
    Paycheck protection program loans     125       136       147       158       169  
    Tax exempt commercial loans     2,658       3,228       3,374       3,430       3,451  
    Home equity and junior liens     52,709       35,821       35,723       34,858       34,666  
    Other consumer     76,703       75,195       77,106       79,797       81,319  
    Subtotal loans     923,231       888,680       892,126       897,781       896,476  
    Deferred loan fees     (1,571 )     (417 )     (595 )     (574 )     (353 )
    Total loans   $ 921,660     $ 888,263     $ 891,531     $ 897,207     $ 896,123  
        2024     2023  
    DEPOSIT COMPOSITION:   September 30,     June 30,     March 31,     December 31,     September 30,  
    Savings accounts   $ 129,053     $ 106,048     $ 111,465     $ 113,543     $ 118,406  
    Time accounts     352,729       368,262       378,103       377,570       359,011  
    Time accounts in excess of $250,000     140,181       117,021       114,514       95,272       96,686  
    Money management accounts     11,520       12,154       11,676       12,364       13,052  
    MMDA accounts     250,007       193,915       215,101       224,707       235,165  
    Demand deposit interest-bearing     97,344       128,168       134,196       119,321       125,585  
    Demand deposit noninterest-bearing     210,110       169,145       176,434       170,169       174,712  
    Mortgage escrow funds     5,269       6,564       4,624       7,121       5,236  
    Total deposits   $ 1,196,213     $ 1,101,277     $ 1,146,113     $ 1,120,067     $ 1,127,853  

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months Ended
    September 30,    		     2024     2023  
    SELECTED AVERAGE BALANCES:   2024     2023     Q3     Q2     Q3  
    Interest-earning assets:                              
    Loans   $ 898,361     $ 900,917     $ 914,467     $ 885,384     $ 895,900  
    Taxable investment securities     427,311       371,615       415,751       434,572       376,455  
    Tax-exempt investment securities     29,499       31,077       30,382       28,944       27,831  
    Fed funds sold and interest-earning deposits     20,161       11,750       42,897       13,387       11,395  
    Total interest-earning assets     1,375,332       1,315,359       1,403,497       1,362,287       1,311,581  
    Noninterest-earning assets:                              
    Other assets     99,200       99,431       103,856       98,746       102,738  
    Allowance for credit losses     (16,511 )     (18,043 )     (16,537 )     (16,905 )     (19,028 )
    Net unrealized losses on available-for-sale securities     (10,184 )     (12,919 )     (9,161 )     (10,248 )     (13,275 )
    Total assets   $ 1,447,837     $ 1,383,828     $ 1,481,655     $ 1,433,880     $ 1,382,016  
    Interest-bearing liabilities:                              
    NOW accounts   $ 100,922     $ 94,116     $ 102,868     $ 92,918     $ 90,992  
    Money management accounts     11,782       14,651       11,828       12,076       14,503  
    MMDA accounts     217,580       241,550       227,247       214,364       218,601  
    Savings and club accounts     115,875       127,490       127,262       107,558       121,710  
    Time deposits     521,832       472,614       514,050       524,276       493,907  
    Subordinated loans     29,978       29,793       30,025       29,977       29,837  
    Borrowings     129,943       99,029       122,129       141,067       110,780  
    Total interest-bearing liabilities     1,127,912       1,079,243       1,135,409       1,122,236       1,080,330  
    Noninterest-bearing liabilities:                              
    Demand deposits     177,202       174,143       195,765       171,135       169,825  
    Other liabilities     19,382       16,100       24,855       17,298       15,768  
    Total liabilities     1,324,496       1,269,486       1,356,029       1,310,669       1,265,923  
    Shareholders’ equity     123,341       114,342       125,626       123,211       116,093  
    Total liabilities & shareholders’ equity   $ 1,447,837     $ 1,383,828     $ 1,481,655     $ 1,433,880     $ 1,382,016  
        Nine Months Ended
    September 30,    		     2024     2023  
    SELECTED AVERAGE YIELDS:   2024     2023     Q3     Q2     Q3  
    Interest-earning assets:                              
    Loans     5.82 %     5.17 %     6.31 %     5.64 %     5.57 %
    Taxable investment securities     5.45 %     4.57 %     5.59 %     5.44 %     4.92 %
    Tax-exempt investment securities     6.67 %     6.18 %     6.17 %     6.88 %     7.29 %
    Fed funds sold and interest-earning deposits     4.70 %     2.56 %     4.59 %     3.62 %     2.32 %
    Total interest-earning assets     5.70 %     5.00 %     6.04 %     5.59 %     5.39 %
    Interest-bearing liabilities:                              
    NOW accounts     1.06 %     0.45 %     1.09 %     1.14 %     0.55 %
    Money management accounts     0.11 %     0.11 %     0.10 %     0.10 %     0.11 %
    MMDA accounts     3.64 %     2.51 %     3.54 %     3.74 %     3.00 %
    Savings and club accounts     0.26 %     0.21 %     0.25 %     0.26 %     0.22 %
    Time deposits     4.01 %     3.05 %     4.09 %     4.03 %     3.55 %
    Subordinated loans     6.56 %     6.48 %     6.61 %     6.53 %     6.60 %
    Borrowings     4.18 %     3.02 %     4.38 %     4.05 %     3.24 %
    Total interest-bearing liabilities     3.34 %     2.42 %     3.34 %     3.40 %     2.82 %
    Net interest rate spread     2.36 %     2.58 %     2.70 %     2.19 %     2.57 %
    Net interest margin     2.97 %     3.02 %     3.34 %     2.78 %     3.07 %
    Ratio of average interest-earning assets to average interest-bearing liabilities     121.94 %     121.88 %     123.61 %     121.39 %     121.41 %

    The above information is preliminary and based on the Company’s data available at the time of presentation.

        Nine Months
    Ended September
    30,    		     2024     2023  
    NON-GAAP RECONCILIATIONS:   2024     2023     Q3     Q2     Q1     Q4     Q3  
    Tangible book value per common share:                                          
    Total equity               $ 120,246     $ 123,348     $ 121,818     $ 119,495     $ 113,770  
    Intangible assets                 (11,969 )     (4,612 )     (4,616 )     (4,621 )     (4,624 )
    Tangible common equity (non-GAAP)                 108,277       118,736       117,202       114,874       109,146  
    Common shares outstanding                 6,100       6,100       6,100       6,100       6,094  
    Tangible book value per common share (non-GAAP)               $ 17.75     $ 19.46     $ 19.21     $ 18.83     $ 17.91  
    Tangible common equity to tangible assets:                                          
    Tangible common equity (non-GAAP)               $ 108,277     $ 118,736     $ 117,202     $ 114,874     $ 109,146  
    Tangible assets                 1,471,157       1,441,599       1,449,056       1,461,177       1,396,025  
    Tangible common equity to tangible assets ratio (non-GAAP)                 7.36 %     8.24 %     8.09 %     7.86 %     7.82 %
    Return on average tangible common equity:                                          
    Average shareholders’ equity   $ 123,341     $ 114,342     $ 125,626     $ 123,211     $ 121,031     $ 116,265     $ 116,093  
    Average intangible assets     4,642       4,631       4,691       4,614       4,619       4,623       4,627  
    Average tangible equity (non-GAAP)     118,699       109,711       120,935       118,597       116,412       111,642       111,466  
    Net income (loss)     (524 )     6,757       (4,644 )     2,000       2,120       2,536       2,176  
    Net income (loss), annualized   $ (700 )   $ 9,034     $ (18,475 )   $ 8,044     $ 8,527     $ 10,061     $ 8,633  
    Return on average tangible common equity (non-GAAP) (1)     -0.59 %     8.23 %     -15.28 %     6.78 %     7.32 %     9.01 %     7.75 %
    Revenue, pre-tax, pre-provision net income, and efficiency ratio:                                          
    Net interest income   $ 30,612     $ 29,760     $ 11,732     $ 9,480     $ 9,400     $ 9,159     $ 10,060  
    Total noninterest income     4,655       3,872       1,707       1,211       1,737       1,318       1,193  
    Net realized (gains) losses on sales and redemptions of investment securities     (320 )     60       (188 )     16       (148 )     2       (13 )
    Revenue (non-GAAP) (2)     35,587       33,572       13,627       10,675       11,285       10,475       11,266  
    Total non-interest expense     25,873       22,351       10,259       7,908       7,706       7,044       7,653  
    Pre-tax, pre-provision net income (non-GAAP) (3)   $ 9,714     $ 11,221     $ 3,368     $ 2,767     $ 3,579     $ 3,431     $ 3,613  
    Efficiency ratio (non-GAAP) (4)     72.70 %     66.58 %     75.28 %     74.08 %     68.29 %     67.25 %     67.93 %

    (1) Return on average tangible common equity equals annualized net income (loss) divided by average tangible equity
    (2) Revenue equals net interest income plus total noninterest income less net realized gains or losses on sales and redemptions of investment securities
    (3) Pre-tax, pre-provision net income equals revenue less total non-interest expense
    (4) Efficiency ratio equals noninterest expense divided by revenue

    The above information is preliminary and based on the Company’s data available at the time of presentation.

    Investor/Media Contacts
    James A. Dowd, President, CEO
    Justin K. Bigham, Senior Vice President, CFO
    Telephone: (315) 343-0057

    The MIL Network –

  • MIL-OSI: Remitly Reports Third Quarter 2024 Results and Raises Full Year 2024 Outlook

    Source: GlobeNewswire (MIL-OSI)

    Active customers up 35% year over year
    Revenue up 39% year over year
    Achieved GAAP net income profitability and record Adjusted EBITDA

    SEATTLE, Oct. 30, 2024 (GLOBE NEWSWIRE) — Remitly Global, Inc. (NASDAQ: RELY), a trusted provider of digital financial services that transcend borders, reported results for the third quarter ended September 30, 2024.

    “I am grateful to our customers and global teams for the exceptional third quarter results,” said Matt Oppenheimer, co-founder and Chief Executive Officer, Remitly. “As our performance in the third quarter exceeded expectations, we are pleased to increase our 2024 outlook for both revenue and Adjusted EBITDA. We are excited about growth opportunities in 2025 and beyond as we execute on our vision of transforming lives with trusted financial services that transcend borders.”

    Third Quarter 2024 Highlights and Key Operating Data
    (All comparisons relative to the third quarter of 2023)

    • Active customers increased to 7.3 million, from 5.4 million, up 35%.
    • Send volume increased to $14.5 billion, from $10.2 billion, up 42%.
    • Revenue totaled $336.5 million, compared to $241.6 million, up 39%.
    • Net income was $1.9 million, compared to net loss of $35.7 million.
    • Adjusted EBITDA was $46.7 million, compared to $10.5 million, up 345%.

    2024 Financial Outlook
    For fiscal year 2024, Remitly currently expects:

    • Total revenue in the range of $1.250 billion to $1.254 billion, representing a growth rate of 32% to 33% year over year. This outlook reflects an increase from our prior revenue outlook in the range of $1.230 billion to $1.250 billion.
    • To remain in a GAAP net loss position for 2024 and for Adjusted EBITDA to be in the range of $108 million to $112 million. This outlook reflects an increase from our prior Adjusted EBITDA outlook in the range of $90 million and $100 million.

    For the fourth quarter of 2024, Remitly currently expects:

    • Total revenue in the range of $338 million to $342 million, representing a growth rate of 28% to 29% year over year.
    • A GAAP net loss position for the fourth quarter of 2024 and for Adjusted EBITDA to be in the range of $17 million to $21 million.

    Reconciliation of GAAP to Non-GAAP Financial Measures
    A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this earnings release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because we cannot, without unreasonable effort, calculate certain reconciling items with confidence due to the variability, complexity, and limited visibility of the adjusting items that would be excluded from forecasted Adjusted EBITDA. These items include, but are not limited to, income taxes and stock-based compensation expense, which are directly impacted by unpredictable fluctuations in the market price of our common stock. The variability of these items could have a significant impact on our future GAAP financial results.

    Note: All percentage changes described within this press release are calculated using amounts in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), for which revenue and active customers are presented in thousands and send volume is presented in millions. Rounding differences may occur when individually calculating percentages or totals from rounded amounts included within the press release body as compared to the amounts included within the Company’s SEC filings.

    Webcast Information
    Remitly will host a webcast at 5:00 p.m. Eastern time on Wednesday, October 30, 2024 to discuss its third quarter 2024 financial results. The live webcast and investor presentation will be accessible on Remitly’s website at https://ir.remitly.com. A webcast replay will be available on our website at https://ir.remitly.com following the live event.

    We have used, and intend to continue to use, the Investor Relations section of our website at https://ir.remitly.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.

    Non-GAAP Financial Measures
    Some of the financial information and data contained in this earnings release, such as Adjusted EBITDA and non-GAAP operating expenses, have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). We regularly review our key business metrics and non-GAAP financial measures to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics and non-GAAP financial measures provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. Adjusted EBITDA and non-GAAP operating expenses are key output measures used by our management to evaluate our operating performance, inform future operating plans, and make strategic long-term decisions, including those relating to operating expenses and the allocation of internal resources. Remitly believes that the use of Adjusted EBITDA and non-GAAP operating expenses provides additional tools to assess operational performance and trends in, and in comparing Remitly’s financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. Remitly’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Remitly’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.

    We calculate Adjusted EBITDA as net income (loss) adjusted by (i) interest (income) expense, net, (ii) provision for income taxes, (iii) noncash charges of depreciation and amortization, (iv) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency, (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, (vi) noncash stock-based compensation expense, net, and (vii) certain acquisition, integration, restructuring, and other costs. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) noncash stock-based compensation expense, net, (ii) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, as well as (iii) certain acquisition, integration, restructuring, and other costs.

    Forward-Looking Statements
    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding our future operating results and financial position, including our fiscal year 2024 financial outlook, including forecasted fiscal year 2024 revenue and Adjusted EBITDA, anticipated future expenses and investments, expectations relating to certain of our key financial and operating metrics, our business strategy and plans, market growth, our market position and potential market opportunities, and our objectives for future operations. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on management’s expectations, assumptions, and projections based on information available at the time the statements were made. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including risks and uncertainties related to our ability to successfully execute our business and growth strategy, our ability to achieve and maintain future profitability, our ability to further penetrate our existing customer base and expand our customer base in existing and new corridors, our ability to expand into broader financial services, our ability to expand internationally, the effects of seasonal trends on our results of operations, the current inflationary environment, our expectations concerning relationships with third parties, including strategic, banking, and disbursement partners, our ability to obtain, maintain, protect, and enhance our intellectual property and other proprietary rights, our ability to maintain the security and availability of our solutions, the success of any acquisitions or investments that we make, our ability to compete effectively, our ability to stay in compliance with applicable laws and regulations, our ability to buy foreign currency at generally advantageous rates, and the effects of macroeconomic and geopolitical conditions, including regulatory changes, on our customers and business operations. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, our actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Further information on risks that could cause actual results to differ materially from forecasted results is included in our quarterly report on Form 10-Q for the quarter ended September 30, 2024 to be filed with the SEC, and within our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC, which are or will be available on our website at https://ir.remitly.com and on the SEC’s website at www.sec.gov. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

    About Remitly
    Remitly is a trusted provider of digital financial services that transcend borders. With a global footprint spanning more than 170 countries, Remitly’s digitally native, cross-border payments app delights customers with a fast, reliable, and transparent money movement experience. Building on its strong foundation, Remitly is expanding its suite of products to further its vision and transform lives around the world.

    Contacts

    Media:
    Kendall Sadler
    kendall@remitly.com

    Investor Relations:
    Stephen Shulstein
    stephens@remitly.com

    REMITLY GLOBAL, INC.
    Condensed Consolidated Statements of Operations
    (unaudited)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands, except share and per share data)   2024       2023       2024       2023  
    Revenue $ 336,527     $ 241,629     $ 912,068     $ 679,527  
    Costs and expenses              
    Transaction expenses(1)   115,554       85,742       313,215       239,995  
    Customer support and operations(1)   21,792       21,190       61,910       62,604  
    Marketing(1)   74,792       61,351       219,862       159,074  
    Technology and development(1)   68,446       57,014       199,206       160,699  
    General and administrative(1)   50,920       49,817       140,982       130,715  
    Depreciation and amortization   4,655       3,418       12,240       9,634  
    Total costs and expenses   336,159       278,532       947,415       762,721  
    Income (loss) from operations   368       (36,903 )     (35,347 )     (83,194 )
    Interest income   2,065       1,808       6,233       5,200  
    Interest expense   (760 )     (585 )     (2,274 )     (1,566 )
    Other income (expense), net   2,094       283       6,272       (2,774 )
    Income (loss) before provision for income taxes   3,767       (35,397 )     (25,116 )     (82,334 )
    Provision for income taxes   1,850       258       6,138       485  
    Net income (loss) $ 1,917     $ (35,655 )   $ (31,254 )   $ (82,819 )
    Net income (loss) per share attributable to common stockholders:              
    Basic $ 0.01     $ (0.20 )   $ (0.16 )   $ (0.46 )
    Diluted $ 0.01     $ (0.20 )   $ (0.16 )   $ (0.46 )
    Weighted-average shares used in computing net income (loss) per share attributable to common stockholders:              
    Basic   196,169,417       182,598,013       193,167,942       178,956,602  
    Diluted   205,251,546       182,598,013       193,167,942       178,956,602  

    _________________________
    (1)     Exclusive of depreciation and amortization, shown separately.

    REMITLY GLOBAL, INC.
    Condensed Consolidated Balance Sheets
    (unaudited)
     
      September 30,   December 31,
    (in thousands)   2024       2023  
    Assets      
    Current assets      
    Cash and cash equivalents $ 324,434     $ 323,710  
    Disbursement prefunding   219,643       195,848  
    Customer funds receivable, net   276,096       379,417  
    Prepaid expenses and other current assets   41,083       33,143  
    Total current assets   861,256       932,118  
    Property and equipment, net   24,364       16,010  
    Operating lease right-of-use assets   10,768       9,525  
    Goodwill   54,940       54,940  
    Intangible assets, net   12,548       16,642  
    Other noncurrent assets, net   6,554       7,071  
    Total assets $ 970,430     $ 1,036,306  
    Liabilities and stockholders’ equity      
    Current liabilities      
    Accounts payable $ 16,825     $ 35,051  
    Customer liabilities   194,122       177,473  
    Short-term debt   2,426       2,481  
    Accrued expenses and other current liabilities   105,234       145,802  
    Operating lease liabilities   5,488       6,032  
    Total current liabilities   324,095       366,839  
    Operating lease liabilities, noncurrent   5,770       4,477  
    Long-term debt   —       130,000  
    Other noncurrent liabilities   9,742       5,653  
    Total liabilities   339,607       506,969  
    Commitments and contingencies      
    Stockholders’ equity      
    Common stock   20       19  
    Additional paid-in capital   1,151,479       1,020,286  
    Accumulated other comprehensive income   1,881       335  
    Accumulated deficit   (522,557 )     (491,303 )
    Total stockholders’ equity   630,823       529,337  
    Total liabilities and stockholders’ equity $ 970,430     $ 1,036,306  
     
    REMITLY GLOBAL, INC.
    Condensed Consolidated Statements of Cash Flows
    (unaudited)
     
        Nine Months Ended September 30,
    (in thousands)     2024       2023  
    Cash flows from operating activities        
    Net loss   $ (31,254 )   $ (82,819 )
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
    Depreciation and amortization     12,240       9,634  
    Stock-based compensation expense, net     110,523       101,007  
    Donation of common stock     2,587       4,600  
    Other     299       4,674  
    Changes in operating assets and liabilities:        
    Disbursement prefunding     (23,795 )     (52,162 )
    Customer funds receivable     100,539       (68,553 )
    Prepaid expenses and other assets     (6,787 )     (9,652 )
    Operating lease right-of-use assets     4,475       3,796  
    Accounts payable     (18,285 )     10,448  
    Customer liabilities     16,811       29,211  
    Accrued expenses and other liabilities     (23,521 )     28,118  
    Operating lease liabilities     (4,982 )     (3,470 )
    Net cash provided by (used in) operating activities     138,850       (25,168 )
    Cash flows from investing activities        
    Purchases of property and equipment     (3,192 )     (2,268 )
    Capitalized internal-use software costs     (9,288 )     (4,249 )
    Cash paid for acquisition, net of acquired cash, cash equivalents, and restricted cash     —       (40,933 )
    Net cash used in investing activities     (12,480 )     (47,450 )
    Cash flows from financing activities        
    Proceeds from exercise of stock options     5,754       12,258  
    Proceeds from issuance of common stock in connection with ESPP(1)     9,382       6,046  
    Proceeds from revolving credit facility borrowings     863,000       424,000  
    Repayments of revolving credit facility borrowings     (993,000 )     (424,000 )
    Taxes paid related to net share settlement of equity awards     (3,774 )     (4,711 )
    Cash paid for settlement of amounts previously held back for acquisition consideration     (10,261 )     —  
    Repayment of assumed indebtedness     —       (17,068 )
    Net cash used in financing activities     (128,899 )     (3,475 )
    Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash     3,941       (599 )
    Net increase (decrease) in cash, cash equivalents, and restricted cash     1,412       (76,692 )
    Cash, cash equivalents, and restricted cash at beginning of period     325,029       300,734  
    Cash, cash equivalents, and restricted cash at end of period   $ 326,441     $ 224,042  
    Reconciliation of cash, cash equivalents, and restricted cash        
    Cash and cash equivalents   $ 324,434     $ 223,273  
    Restricted cash included in prepaid expenses and other current assets     1,034       715  
    Restricted cash included in other noncurrent assets, net     973       54  
    Total cash, cash equivalents, and restricted cash   $ 326,441     $ 224,042  

    _________________________
    (1) Beginning with the fourth quarter of 2023, the Company changed the presentation of shares purchased under the Employee Stock Purchase Plan (“ESPP”) to reflect an operating cash outflow for compensation paid to employees and a financing cash inflow for cash paid by employees in exchange for shares. Previously such activity was treated and disclosed as noncash activity for the nine months ended September 30, 2023.

    REMITLY GLOBAL, INC.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (unaudited)
     
    Reconciliation of net income (loss) to Adjusted EBITDA:
                     
        Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)     2024       2023       2024       2023  
    Net income (loss)   $ 1,917     $ (35,655 )   $ (31,254 )   $ (82,819 )
    Add:                
    Interest income, net     (1,305 )     (1,223 )     (3,959 )     (3,634 )
    Provision for income taxes     1,850       258       6,138       485  
    Depreciation and amortization     4,655       3,418       12,240       9,634  
    Foreign exchange (gain) loss     (2,274 )     (376 )     (6,667 )     2,611  
    Donation of common stock     2,587       4,600       2,587       4,600  
    Stock-based compensation expense, net     39,278       36,573       110,523       101,007  
    Acquisition, integration, restructuring, and other costs(1)     —       2,901       1,468       4,390  
    Adjusted EBITDA   $ 46,708     $ 10,496     $ 91,076     $ 36,274  

    _________________________
    (1) Acquisition, integration, restructuring, and other costs for the nine months ended September 30, 2024 consisted primarily of $0.8 million in restructuring charges incurred, $0.5 million of non-recurring legal charges, and $0.2 million related to the change in the fair value of the holdback liability associated with the acquisition of Rewire (O.S.G.) Research and Development Ltd. (“Rewire”). Acquisition, integration, restructuring, and other costs for the three months ended September 30, 2023 consisted primarily of $1.4 million in restructuring charges incurred, $0.9 million related to the change in the fair value of the holdback liability, and $0.6 million of expenses incurred in connection with the acquisition and integration of Rewire. Acquisition, integration, restructuring, and other costs for the nine months ended September 30, 2023 consisted primarily of $1.9 million related to the change in the fair value of the holdback liability, $1.4 million in restructuring charges incurred, and $1.1 million of expenses incurred in connection with the acquisition and integration of Rewire.

    Reconciliation of operating expenses to non-GAAP operating expenses:
                     
        Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024   2023   2024   2023
    Customer support and operations   $ 21,792   $ 21,190   $ 61,910   $ 62,604
    Excluding: Stock-based compensation expense, net     278     386     890     1,010
    Excluding: Acquisition, integration, restructuring, and other costs     —     749     758     749
    Non-GAAP customer support and operations   $ 21,514   $ 20,055   $ 60,262   $ 60,845
                     
        Three Months Ended September 30,   Nine Months Ended September 30,
        2024   2023   2024   2023
    Marketing   $ 74,792   $ 61,351   $ 219,862   $ 159,074
    Excluding: Stock-based compensation expense, net     4,514     4,525     13,014     12,235
    Non-GAAP marketing   $ 70,278   $ 56,826   $ 206,848   $ 146,839
                     
        Three Months Ended September 30,   Nine Months Ended September 30,
        2024   2023   2024   2023
    Technology and development   $ 68,446   $ 57,014   $ 199,206   $ 160,699
    Excluding: Stock-based compensation expense, net     21,873     19,828     61,854     55,047
    Excluding: Acquisition, integration, restructuring, and related costs     —     510     —     510
    Non-GAAP technology and development   $ 46,573   $ 36,676   $ 137,352   $ 105,142
                     
        Three Months Ended September 30,   Nine Months Ended September 30,
        2024   2023   2024   2023
    General and administrative   $ 50,920   $ 49,817   $ 140,982   $ 130,715
    Excluding: Stock-based compensation expense, net     12,613     11,834     34,765     32,715
    Excluding: Donation of common stock     2,587     4,600     2,587     4,600
    Excluding: Acquisition, integration, restructuring, and other costs     —     1,642     710     3,131
    Non-GAAP general and administrative   $ 35,720   $ 31,741   $ 102,920   $ 90,269

    The MIL Network –

  • MIL-OSI: Robinhood Reports Third Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Second highest Revenues on record, up 36% year-over-year to $637 million
    GAAP Diluted EPS of $0.17, up $0.26 year-over-year
    Year-to-date Net Deposits of $34 billion, Revenues of $1.94 billion, and GAAP Diluted EPS of $0.55 have all exceeded prior full year records

    MENLO PARK, Calif., Oct. 30, 2024 (GLOBE NEWSWIRE) — Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced financial results for the third quarter of 2024, which ended September 30, 2024.

    “I’m really proud of our Q3 results and how smoothly our product engine is humming,” said Vlad Tenev, CEO and Co-Founder of Robinhood. “In the past month, we introduced Robinhood Legend, our new desktop offering, and announced index options, futures, and a realized profit and loss tool are coming soon. And just this week, we launched our Presidential Election Market. We have a ton of momentum, and we’re just getting started.”

    “Q3 was another strong quarter, as we drove 36% year-over-year revenue growth, and dropped most of that to the bottom line,” said Jason Warnick, Chief Financial Officer of Robinhood. “We entered 2024 with the goal of delivering another year of profitable growth, so we’re excited to have already broken prior full year records for both revenue and EPS.”

    Third Quarter Results:

    • Total net revenues increased 36% year-over-year to $637 million.
      • Transaction-based revenues increased 72% year-over-year to $319 million, primarily driven by options revenue of $202 million, up 63%, cryptocurrencies revenue of $61 million, up 165%, and equities revenue of $37 million, up 37%.
      • Net interest revenues increased 9% year-over-year to $274 million, primarily driven by growth in interest-earning assets.
      • Other revenues increased 42% year-over-year to $44 million, primarily due to increased Gold subscription revenues.
      • Total net revenues were reduced by $27 million in Q3 2024 (and $13 million in Q2 2024) due to matches paid to customers on transfers and deposits.
    • Net income increased year-over-year to $150 million, or diluted earnings per share (EPS) of $0.17, compared to a net loss of $85 million, or diluted EPS of -$0.09, in Q3 2023.
    • Total operating expenses decreased 10% year-over-year to $486 million. This includes a $10 million regulatory accrual, which compares to a $104 million regulatory accrual in Q3 2023.
      • Adjusted Operating Expenses (non-GAAP) increased 12% year-over-year to $397 million primarily due to increased marketing and growth investments.
      • Share-Based Compensation (SBC) decreased 5% year-over-year to $79 million.
    • Adjusted EBITDA (non-GAAP) increased 96% year-over-year to $268 million.
    • Funded Customers increased by 1.0 million year-over-year to 24.3 million.
      • Investment Accounts increased by 1.5 million year-over-year to 25.1 million.
    • Assets Under Custody (AUC) increased 76% year-over-year to $152.2 billion, driven by continued Net Deposits and higher equity and cryptocurrency valuations.
    • Net Deposits were $10.0 billion, an annualized growth rate of 29% relative to AUC at the end of Q2 2024. Over the past twelve months, Net Deposits were $39.0 billion, a growth rate of 45% relative to AUC at the end of Q3 2023.
    • Average Revenue Per User (ARPU) increased by 31% year-over-year to $105.
    • Gold Subscribers increased by 860 thousand, or 65%, year-over-year to 2.2 million.
    • Cash and cash equivalents totaled $4.6 billion compared with $4.9 billion at the end of Q3 2023.
    • Share repurchases were $97 million, representing 5.0 million shares of our Class A common stock at an average price per share of $19.42.
      • In July 2024, we began executing on our authorized $1 billion share repurchase program, which we continue to expect to complete over a total of two to three years.

    Highlights

    Robinhood takes major steps toward delivering on product roadmap and winning the active trader market.

    • Building for Active Traders – In October 2024, Robinhood began rolling out Robinhood Legend, a powerful, sleek browser-based desktop trading platform built from the ground up for active traders, and announced that it will launch futures and index options in the coming months with some of the lowest contract fees in the industry.
    • Robinhood Hosts its First Ever Customer-Focused Conference – In October 2024, Robinhood held its inaugural HOOD Summit, bringing together over 400 customers with Robinhood executives and other industry leaders for a three-day event to discuss the latest in trading technology, investing, and culture.
    • More than 9 percent of Robinhood Funded Customers benefit from Robinhood Gold – Gold Subscribers reached new highs of 2.2 million in Q3 2024. Additionally, Robinhood Gold Cards continue to roll out, now in the hands of nearly 100 thousand customers.
    • Robinhood Retirement Reaches $11 billion in AUC – In October 2024, Robinhood Retirement reached $11 billion in AUC across nearly one million funded retirement accounts. Offering the first ever IRA with a match, customers have received over $200 million in matches on retirement account transfers and contributions since launching in January 2023.
    • Expanding Our UK Product Offering – Robinhood introduced stock lending in the UK in September 2024 and launched margin investing for UK customers in October 2024. Robinhood has also received Financial Conduct Authority approval to offer options trading in the UK and plans to launch in 2025.

    Additional Q3 2024 Operating Data

    • Retirement AUC increased 9X year-over-year to $9.9 billion.
    • Cash Sweep increased 80% year-over-year to $24.5 billion.
    • Margin Book increased 53% year-over-year to $5.5 billion.
    • Equity Notional Trading Volumes increased 65% year-over-year to $286.2 billion.
    • Options Contracts Traded increased 47% year-over-year to 443.4 million.
    • Crypto Notional Trading Volumes increased 112% year-over-year to $14.4 billion.
    • Monthly Active Users (MAU) increased 7% year-over-year to 11.0 million.

    Webcast and Conference Call Information

    Robinhood will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET today, October 30, 2024. The live webcast of Robinhood’s earnings conference call can be accessed at investors.robinhood.com, along with the earnings press release and accompanying slide presentation.

    Following the call, a replay and transcript will also be available at the same website.

    Financial Outlook

    Our 2024 expense plan includes growth investments in new products, features, and international expansion while also getting more efficient in our existing businesses. Our outlook for GAAP total operating expenses is $1.86 billion to $1.96 billion, including a $10 million regulatory accrual in Q3 2024.

    Our outlook for Non-GAAP combined Adjusted Operating Expenses and SBC for full-year 2024 is unchanged at $1.85 billion to $1.95 billion.

    Actual results might differ materially from our outlook due to several factors, including the rate of growth in Funded Customers and our effectiveness to cross-sell products which affects variable marketing costs, the degree to which we are successful in managing credit losses and preventing fraud, and our ability to manage web-hosting expenses efficiently, among other factors. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.

    About Robinhood

    Robinhood Markets, Inc. (NASDAQ: HOOD) transformed financial services by introducing commission-free stock trading and democratizing access to the markets for millions of investors. Today, Robinhood lets you trade stocks, options, commodity interests, and crypto, invest for retirement, and earn with Robinhood Gold. Headquartered in Menlo Park, California, Robinhood puts customers in the driver’s seat, delivering unprecedented value and products intentionally designed for a new generation of investors. Additional information about Robinhood can be found at www.robinhood.com.

    Robinhood uses the “Overview” tab of its Investor Relations website (accessible at investors.robinhood.com/overview) and its Newsroom (accessible at newsroom.aboutrobinhood.com), as means of disclosing information to the public in a broad, non-exclusionary manner for purposes of the U.S. Securities and Exchange Commission’s (“SEC”) Regulation Fair Disclosure (Reg. FD). Investors should routinely monitor those web pages, in addition to Robinhood’s press releases, SEC filings, and public conference calls and webcasts, as information posted on them could be deemed to be material information.

    “Robinhood” and the Robinhood feather logo are registered trademarks of Robinhood Markets, Inc. All other names are trademarks and/or registered trademarks of their respective owners.

    Contacts

    Investors:
    ir@robinhood.com

    Press:
    press@robinhood.com

    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
     
      December 31,   September 30,
    (in millions, except share and per share data)   2023       2024  
    Assets      
    Current assets:      
    Cash and cash equivalents $ 4,835     $ 4,611  
    Cash and cash equivalents segregated under federal and other regulations   4,448       5,547  
    Receivables from brokers, dealers, and clearing organizations   89       139  
    Receivables from users, net   3,495       5,546  
    Securities borrowed   1,602       3,704  
    Deposits with clearing organizations   338       464  
    Asset related to user cryptocurrencies safeguarding obligation   14,708       19,456  
    User-held fractional shares   1,592       2,201  
    Held-to-maturity investments   413       527  
    Prepaid expenses   63       86  
    Deferred customer match incentives   11       73  
    Other current assets   196       251  
    Total current assets   31,790       42,605  
    Property, software, and equipment, net   120       133  
    Goodwill   175       179  
    Intangible assets, net   48       39  
    Non-current held-to-maturity investments   73       —  
    Non-current deferred customer match incentives   19       159  
    Other non-current assets, including non-current prepaid expenses of $4 as of December 31, 2023 and $22 as of September 30, 2024   107       130  
    Total assets $ 32,332     $ 43,245  
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable and accrued expenses $ 384     $ 443  
    Payables to users   5,097       6,264  
    Securities loaned   3,547       7,306  
    User cryptocurrencies safeguarding obligation   14,708       19,456  
    Fractional shares repurchase obligation   1,592       2,201  
    Other current liabilities   217       288  
    Total current liabilities   25,545       35,958  
    Other non-current liabilities   91       79  
    Total liabilities   25,636       36,037  
    Commitments and contingencies      
    Stockholders’ equity:      
    Preferred stock, $0.0001 par value 210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and September 30, 2024.   —       —  
    Class A common stock, $0.0001 par value. 21,000,000,000 shares authorized, 745,401,862 shares issued and outstanding as of December 31, 2023; 21,000,000,000 shares authorized, 761,992,964 shares issued and outstanding as of September 30, 2024.   —       —  
    Class B common stock, $0.0001 par value. 700,000,000 shares authorized, 126,760,802 shares issued and outstanding as of December 31, 2023; 700,000,000 shares authorized, 121,616,044 shares issued and outstanding as of September 30, 2024.   —       —  
    Class C common stock, $0.0001 par value. 7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and September 30, 2024.   —       —  
    Additional paid-in capital   12,145       12,158  
    Accumulated other comprehensive income (loss)   (3 )     1  
    Accumulated deficit   (5,446 )     (4,951 )
    Total stockholders’ equity   6,696       7,208  
    Total liabilities and stockholders’ equity $ 32,332     $ 43,245  
                   
    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
     
      Three Months Ended
    September 30,    		     YOY%     Three Months Ended
    June 30,    		     QOQ%  
    (in millions, except share, per share, and percentage data)   2023       2024        Change       2024       Change  
    Revenues:                  
    Transaction-based revenues $ 185     $ 319       72 %   $ 327       (2 )%
    Net interest revenues   251       274       9 %     285       (4 )%
    Other revenues   31       44       42 %     70       (37 )%
    Total net revenues   467       637       36 %     682       (7 )%
                           
    Operating expenses(1)(2):                      
    Brokerage and transaction   39       39       — %     40       (3 )%
    Technology and development   202       205       1 %     209       (2 )%
    Operations   41       50       22 %     46       9 %
    Marketing   28       59       111 %     64       (8 )%
    General and administrative   230       133       (42 )%     134       (1 )%
    Total operating expenses   540       486       (10 )%     493       (1 )%
                               
    Other income (expense), net   (2 )     2       NM       2       — %
    Income (loss) before income taxes   (75 )     153       NM       191       (20 )%
    Provision for income taxes   10       3       (70 )%     3       — %
    Net income (loss) $ (85 )   $ 150       NM     $ 188       (20 )%
    Net income (loss) attributable to common stockholders:                  
    Basic $ (85 )   $ 150         $ 188      
    Diluted $ (85 )   $ 150         $ 188      
    Net income (loss) per share attributable to common stockholders:                  
    Basic $ (0.09 )   $ 0.17         $ 0.21      
    Diluted $ (0.09 )   $ 0.17         $ 0.21      
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:                  
    Basic   895,108,790       884,108,545           881,076,624      
    Diluted   895,108,790       905,544,750           904,490,572      
                                   
        Nine Months Ended
    September 30,    		   YOY% Change
    (in millions, except share, per share, and percentage data)     2023       2024    
    Revenues:            
    Transaction-based revenues   $ 585     $ 975       67 %
    Net interest revenues     693       813       17 %
    Other revenues     116       149       28 %
    Total net revenues     1,394       1,937       39 %
                 
    Operating expenses(1)(2):            
    Brokerage and transaction     114       114       — %
    Technology and development     608       610       — %
    Operations     119       140       18 %
    Marketing     79       190       141 %
    General and administrative     1,036       385       (63 )%
    Total operating expenses     1,956       1,439       (26 )%
                     
    Other income, net     —       8       NM  
    Income (loss) before income taxes     (562 )     506       NM  
    Provision for income taxes     9       11       22 %
    Net income (loss)   $ (571 )   $ 495       NM  
    Net income (loss) attributable to common stockholders:            
    Basic   $ (571 )   $ 495      
    Diluted   $ (571 )   $ 495      
    Net income (loss) per share attributable to common stockholders:            
    Basic   $ (0.64 )   $ 0.56      
    Diluted   $ (0.64 )   $ 0.55      
    Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:            
    Basic     898,999,464       880,182,573      
    Diluted     898,999,464       903,555,592      
                         

    ________________
    (1) The following table presents operating expenses as a percent of total net revenues:

      Three Months Ended
    September 30,    		   Three Months Ended
    June 30,    		   Nine Months Ended
    September 30,
        2023       2024       2024       2023       2024  
    Brokerage and transaction   8 %     6 %     5 %     8 %     6 %
    Technology and development   43 %     32 %     31 %     44 %     31 %
    Operations   9 %     8 %     7 %     9 %     7 %
    Marketing   6 %     9 %     9 %     6 %     10 %
    General and administrative   49 %     21 %     20 %     74 %     20 %
    Total operating expenses   115 %     76 %     72 %     141 %     74 %
                                           

    (2) The following table presents the SBC on our unaudited condensed consolidated statements of operations for the periods indicated:

      Three Months Ended
    September 30,    		   Three Months Ended
    June 30,    		   Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Brokerage and transaction $ 2     $ 2     $ 3     $ 6     $ 7  
    Technology and development   51       48       52       161       144  
    Operations   3       1       2       6       5  
    Marketing   1       3       1       3       6  
    General and administrative   26       25       28       614       65  
    Total SBC $ 83     $ 79     $ 86     $ 790     $ 227  
                                           
    ROBINHOOD MARKETS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
    (in millions)   2023       2024       2023       2024  
    Operating activities:              
    Net income (loss) $ (85 )   $ 150     $ (571 )   $ 495  
    Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:              
    Depreciation and amortization   19       20       54       55  
    Provision for credit losses   14       23       29       57  
    Share-based compensation   83       79       790       227  
    Other   (27 )     1       (27 )     —  
    Changes in operating assets and liabilities:              
    Securities segregated under federal and other regulations   —       547       —       —  
    Receivables from brokers, dealers, and clearing organizations   54       10       13       (50 )
    Receivables from users, net   (391 )     (433 )     (502 )     (1,971 )
    Securities borrowed   (244 )     (1,487 )     (687 )     (2,102 )
    Deposits with clearing organizations   (52 )     87       (89 )     (126 )
    Current and non-current prepaid expenses   17       (21 )     26       (41 )
    Current and non-current deferred customer match incentives   (4 )     (6 )     (10 )     (202 )
    Other current and non-current assets   62       117       10       (11 )
    Accounts payable and accrued expenses   94       54       145       28  
    Payables to users   (786 )     475       (376 )     1,167  
    Securities loaned   263       2,215       1,411       3,759  
    Other current and non-current liabilities   6       (19 )     5       (42 )
    Net cash provided by (used in) operating activities   (977 )     1,812       221       1,243  
    Investing activities:              
    Purchases of property, software, and equipment   (1 )     (7 )     (1 )     (9 )
    Capitalization of internally developed software   (5 )     (12 )     (14 )     (26 )
    Purchases of held-to-maturity investments   (76 )     (167 )     (651 )     (469 )
    Proceeds from maturities of held-to-maturity investments   75       150       167       439  
    Purchases of credit card receivables by Credit Card Funding Trust   —       (169 )     —       (239 )
    Collections of purchased credit card receivables   —       82       —       130  
    Business acquisition, net of cash and cash equivalents acquired   (90 )     —       (90 )     (6 )
    Asset acquisition, net of cash acquired   —       —       —       (3 )
    Other   —       —       10       1  
    Net cash used in investing activities   (97 )     (123 )     (579 )     (182 )
    Financing activities:              
    Proceeds from issuance of common stock under the Employee Stock Purchase Plan   —       —       9       10  
    Taxes paid related to net share settlement of equity awards   (4 )     (56 )     (9 )     (155 )
    Payments of debt issuance costs   —       —       (10 )     (14 )
    Draws on credit facilities   10       1       20       12  
    Repayments on credit facilities   (10 )     (1 )     (20 )     (12 )
    Borrowings on Credit Card Funding Trust   —       78       —       95  
    Repayments on Credit Card Funding Trust   —       —       —       (1 )
    Change in principal collected from customers due to Coastal Bank   (3 )     (22 )     (3 )     (15 )
    Repurchase of Class A common stock   (608 )     (97 )     (608 )     (97 )
    Proceeds from exercise of stock options, net of repurchases   —       2       2       10  
    Net cash used in financing activities   (615 )     (95 )     (619 )     (167 )
    Effect of foreign exchange rate changes on cash and cash equivalents   —       1       —       1  
    Net increase (decrease) in cash, cash equivalents, segregated cash, and restricted cash   (1,689 )     1,595       (977 )     895  
    Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period   10,069       8,646       9,357       9,346  
    Cash, cash equivalents, segregated cash, and restricted cash, end of the period $ 8,380     $ 10,241     $ 8,380     $ 10,241  
    Reconciliation of cash, cash equivalents, segregated cash and restricted cash, end of the period:              
    Cash and cash equivalents, end of the period $ 4,889     $ 4,611     $ 4,889     $ 4,611  
    Segregated cash and cash equivalents, end of the period   3,448       5,547       3,448       5,547  
    Restricted cash in other current assets, end of the period   26       67       26       67  
    Restricted cash in other non-current assets, end of the period   17       16       17       16  
    Cash, cash equivalents, segregated cash and restricted cash, end of the period $ 8,380     $ 10,241     $ 8,380     $ 10,241  
    Supplemental disclosures:              
    Cash paid for interest $ 2     $ 4     $ 8     $ 12  
    Cash paid for income taxes, net of refund received $ 7     $ 8     $ 9     $ 14  
                                   
    Reconciliation of GAAP to Non-GAAP Results
    (Unaudited)
     
      Three Months Ended
    September 30,    		   Three Months Ended
    June 30,    		   Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Net income (loss) $ (85 )   $ 150     $ 188     $ (571 )   $ 495  
    Net margin   (18 )%     24 %     28 %     (41 )%     26 %
    Add:                  
    Interest expenses related to credit facilities   6       6       6       17       18  
    Provision for income taxes   10       3       3       9       11  
    Depreciation and amortization   19       20       18       54       55  
    EBITDA (non-GAAP)   (50 )     179       215       (491 )     579  
    Add: SBC                  
    2021 Founders Award Cancellation   —       —       —       485       —  
    SBC Excluding 2021 Founders Award Cancellation   83       79       86       305       227  
    Significant legal and tax settlements and reserves   104       10       —       104       10  
    Adjusted EBITDA (non-GAAP) $ 137     $ 268     $ 301     $ 403     $ 816  
    Adjusted EBITDA margin (non-GAAP)   29 %     42 %     44 %     29 %     42 %
                                           
      Three Months Ended
    September 30,    		   Three Months Ended
    June 30,    		   Nine Months Ended
    September 30,
    (in millions)   2023       2024       2024       2023       2024  
    Total operating expenses (GAAP) $ 540     $ 486     $ 493     $ 1,956     $ 1,439  
    Add: SBC                  
    2021 Founders Award Cancellation   —       —       —       485       —  
    SBC Excluding 2021 Founders Award Cancellation   83       79       86       305       227  
    Significant legal and tax settlements and reserves   104       10       —       104       10  
    Adjusted Operating Expenses (Non-GAAP) $ 353     $ 397     $ 407     $ 1,062     $ 1,202  
                                           
    (in millions) Prior Financial Outlook1
    for the Year Ending
    December 31, 2024    		 Current Financial Outlook
    for the Year Ending
    December 31, 2024    		 Change
    Total operating expenses (GAAP) $1,850 – $1,950 $1,860 – $1,960 increased by $10
    Significant legal and tax settlements and reserves — $10 increased by $10
    Adjusted Operating Expenses and SBC (Non-GAAP)2 $1,850 – $1,950 $1,850 – $1,950 no change

    (1) Prior Outlook provided at Q2 2024 Earnings on August 7th, 2024.
    (2) Actual results might differ materially from our outlook, see “Financial Outlook” for more information. The above expense outlook does not include potential significant regulatory matters or other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains forward-looking statements regarding the expected financial performance of Robinhood Markets, Inc. and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”) and our strategic and operational plans, including (among others) statements regarding that index options, futures, and a realized profit and loss tool are coming soon; that we have a ton of momentum, and we’re just getting started; that in July 2024, we began executing on our authorized $1 billion share repurchase program, which we continue to expect to complete over a total of two to three years; that we will launch futures and index options in the coming months with some of the lowest contract fees in the industry; that we received Financial Conduct Authority approval to offer options trading in the UK and plan to launch in 2025; and all statements and information under the headings “Financial Outlook” and “Reconciliation of GAAP to Non-GAAP Financial Outlook.” Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Our forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual future results, performance, or achievements to differ materially from any future results expressed or implied in this press release. Reported results should not be considered an indication of future performance. Factors that contribute to the uncertain nature of our forward-looking statements include, among others: our limited operating experience at our current scale; the difficulty of managing our business effectively, including the size of our workforce, and the risk of continued declining or negative growth; the fluctuations in our financial results and key metrics from quarter to quarter; our reliance on transaction-based revenue, including payment for order flow (“PFOF”), and the risk of new regulation or bans on PFOF and similar practices; our exposure to fluctuations in interest rates and rapidly changing interest rate environments; the difficulty of raising additional capital (to provide liquidity needs and support business growth and objectives) on reasonable terms, if at all; the need to maintain capital levels required by regulators and self-regulatory organizations; the risk that we might mishandle the cash, securities, and cryptocurrencies we hold on behalf of customers, and our exposure to liability for processing, operational, or technical errors in clearing functions; the impact of negative publicity on our brand and reputation; the risk that changes in business, economic, or political conditions that impact the global financial markets, or a systemic market event, might harm our business; our dependence on key employees and a skilled workforce; the difficulty of complying with an extensive, complex, and changing regulatory environment and the need to adjust our business model in response to new or modified laws and regulations; the possibility of adverse developments in pending litigation and regulatory investigations; the effects of competition; our need to innovate and invest in new products, services, technologies, and geographies in order to attract and retain customers and deepen their engagement with us in order to maintain growth; our reliance on third parties to perform some key functions and the risk that processing, operational or technological failures could impair the availability or stability of our platforms; the risk of cybersecurity incidents, theft, data breaches, and other online attacks; the difficulty of processing customer data in compliance with privacy laws; our need as a regulated financial services company to develop and maintain effective compliance and risk management infrastructures; the risks associated with incorporating artificial intelligence technologies into some of our products and processes; the volatility of cryptocurrency prices and trading volumes; the risk that our platforms and services could be exploited to facilitate illegal payments; and the risk that substantial future sales of Class A common stock in the public market, or the perception that they may occur, could cause the price of our stock to fall. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events. More information about potential risks and uncertainties that could affect our business and financial results can be found in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which we expect to be available on October 31, 2024, as well as in our other filings with the SEC, all of which are available on the SEC’s web site at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible for us to predict all risks nor identify all uncertainties. The events and circumstances reflected in our forward-looking statements might not be achieved and actual results could differ materially from those projected in the forward-looking statements. Except as otherwise noted, all forward-looking statements are made as of the date of this press release, October 30, 2024 and are based on information and estimates available to us at this time. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, Robinhood assumes no obligation to update any of the statements in this press release whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this press release with the understanding that our actual future results, performance, events, and circumstances might be materially different from what we expect.

    Non-GAAP Financial Measures

    We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total net revenues, net income (loss) and other results under GAAP, we utilize non-GAAP calculations of adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin, Adjusted Operating Expenses, and Adjusted Operating Expenses and SBC. This non-GAAP financial information is presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with GAAP and may be different from similarly titled non-GAAP measures used by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

    Adjusted EBITDA

    Adjusted EBITDA is defined as net income (loss), excluding (i) interest expenses related to credit facilities, (ii) provision for (benefit from) income taxes, (iii) depreciation and amortization, (iv) SBC, (v) significant legal and tax settlements and reserves, and (vi) other significant gains, losses, and expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing results.

    The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted EBITDA Margin

    Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total net revenues. The most directly comparable GAAP measure is net margin (calculated as net income (loss) divided by total net revenues). We believe Adjusted EBITDA Margin provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Adjusted EBITDA Margin is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted Operating Expenses

    Adjusted Operating Expenses is defined as GAAP total operating expenses minus (i) SBC, (ii) significant legal and tax settlements and reserves, and (iii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. We believe Adjusted Operating Expenses provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Adjusted Operating Expenses and SBC

    Adjusted Operating Expenses and SBC is defined as GAAP total operating expenses minus (i) significant legal and tax settlements and reserves and (ii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses), that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results, of operations, and render comparisons with prior periods less meaningful. Unlike Adjusted Operating Expenses, Adjusted Operating Expenses and SBC does not adjust for SBC. We believe Adjusted Operating Expense and SBC provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses and SBC is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

    Key Performance Metrics

    In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key performance metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

    Funded Customers

    We define a Funded Customer as a unique person who has at least one account with a Robinhood entity and, within the past 45 calendar days (a) had an account balance that was greater than zero (excluding amounts that are deposited into a Funded Customer account by the Company with no action taken by the unique person) or (b) completed a transaction using any such account. Individuals who share a funded joint investing account (which launched in July 2024) are each considered to be a Funded Customer.

    Assets Under Custody (“AUC”)

    We define AUC as the sum of the fair value of all equities, options, cryptocurrency and cash held by users in their accounts, net of receivables from users, as of a stated date or period end on a trade date basis. Net Deposits and net market gains (losses) drive the change in AUC in any given period.

    Net Deposits

    We define Net Deposits as all cash deposits and asset transfers from customers, as well as dividends, interest, and cash and assets earned in connection with Company promotions (such as account transfer and retirement match incentives and free stock bonuses) received by customers, net of reversals, customer cash withdrawals, margin interest, Gold subscription fees, and other assets transferred out of our platforms (assets transferred in or out include debit card transactions, Automated Customer Account Transfer Service transfers, and custodial crypto wallet transfers) for a stated period. Prior to the second quarter of 2024, Net Deposits did not include inflows from cash and assets earned in connection with Company promotions and prior to January 2024, Net Deposits did not include inflows from dividends and interest or outflows from Robinhood Gold subscription fees and margin interest, although we have not restated amounts in prior periods as the impact to those figures was immaterial.

    Average Revenue Per User (“ARPU”)

    We define ARPU as total revenue for a given period divided by the average number of Funded Customers on the last day of that period and the last day of the immediately preceding period. Figures in this release represent ARPU annualized for each three-month period presented.

    Gold Subscribers

    We define a Gold Subscriber as a unique person who has at least one account with a Robinhood entity and who, as of the end of the relevant period (a) is subscribed to Robinhood Gold and (b) has made at least one Robinhood Gold subscription fee payment.

    Additional Operating Metrics

    Retirement AUC

    We define Retirement AUC as the total AUC in traditional IRAs and Roth IRAs.

    Cash Sweep

    We define Cash Sweep as the period-end aggregate balances in our brokerage sweep program (i.e., the period-end total amount of participating users’ uninvested brokerage cash that has been automatically “swept” or moved from their brokerage accounts into deposits for their benefit at a network of program banks). This is an off-balance-sheet amount. Robinhood earns a net interest spread on Cash Sweep balances based on the interest rate offered by the banks less the interest rate given to users as stated in our program terms.

    Margin Book

    We define Margin Book as our period-end aggregate outstanding margin loan balances receivable (i.e., the period-end total amount we are owed by customers on loans made for the purchase of securities, supported by a pledge of assets in their margin-enabled brokerage accounts).

    Notional Trading Volume

    We define Notional Trading Volume for any specified asset class as the aggregate dollar value (purchase price or sale price as applicable) of trades executed in that asset class over a specified period of time.

    Options Contracts Traded

    We define Options Contracts Traded as the total number of options contracts bought or sold over a specified period of time. Each contract generally entitles the holder to trade 100 shares of the underlying stock.

    Monthly Active Users (“MAU”)

    We define MAUs as the number of unique persons who, using one or more accounts with a Robinhood entity, meet one of the following criteria at any point during a specified calendar month: a) executes a debit card or credit card transaction, b) transitions between two different screens on a mobile device while logged into their account or c) loads a page in a web browser while logged into their account. A person need not satisfy these conditions on a recurring monthly basis or be a Funded Customer to be included in MAU. MAU figures in this release reflect MAU for the last month of the relevant period presented. We utilize MAU to measure how many customers interact with our products and services during a given month. MAU does not measure the frequency or duration of the interaction, but we consider it a useful indicator for engagement. Additionally, MAUs are positively correlated with, but are not indicative of, the performance of revenue and other key performance indicators.

    Glossary Terms

    Investment Accounts

    We define an Investment Account as a funded individual brokerage account, a funded joint investing account, or a funded individual retirement account (“IRA”). As of September 30, 2024, a Funded Customer can have up to four Investment Accounts – individual brokerage account, joint investing account (which launched in July 2024), traditional IRA, and Roth IRA.

    Growth Rate and Annualized Growth Rate with respect to Net Deposits

    When used with respect to Net Deposits, “growth rate” and “annualized growth rate” provide information about Net Deposits relative to total AUC. “Growth rate” is calculated as aggregate Net Deposits over a specified 12 month period, divided by AUC for the fiscal quarter that immediately precedes such 12 month period. “Annualized growth rate” is calculated as Net Deposits for a specified quarter multiplied by 4 and divided by AUC for the immediately preceding quarter.

    The MIL Network –

  • MIL-OSI: Fully Operational Rigetti QPU Included in UK’s Recently Opened National Quantum Computer Centre

    Source: GlobeNewswire (MIL-OSI)

    The UK’s National Quantum Computing Centre (NQCC) officially opened the doors of its landmark facility on Harwell Campus on October 25. The state-of-the-art facility includes a fully operational 24-qubit Ankaa™-class Rigetti system, which will be made available to NQCC researchers for testing, benchmarking, and exploratory applications development.

    LONDON, Oct. 30, 2024 (GLOBE NEWSWIRE) — Rigetti UK Limited, a wholly owned subsidiary of Rigetti Computing, Inc. (Nasdaq: RGTI) (“Rigetti” or the “Company”), a pioneer in full-stack quantum-classical computing, today announced that the UK’s National Quantum Computing Centre (NQCC) officially opened the doors of its landmark facility on Harwell Campus on October 25. The facility will support world-class quantum computing research and provide state-of-the-art laboratories for designing, building, and testing quantum computers. Rigetti’s system located at the NQCC is a fully operational 24-qubit Ankaa™-class quantum computer, featuring tunable couplers and a square lattice for fast gate times, enhanced connectivity, and high fidelity. As part of the implementation, Rigetti will be integrating Riverlane’s technology with the long-term objective of large-scale error correction.

    In February 2024, Rigetti was awarded a Small Business Research Initiative (SBRI) grant delivered by Innovate UK and funded by the NQCC to deliver a quantum computing system based on the Company’s Ankaa-class architecture to the new facility. The 24-qubit system will be made available to NQCC researchers for testing, benchmarking, and exploratory applications development.

    Rigetti CEO Dr. Subodh Kulkarni and CTO David Rivas attended the official inauguration to celebrate the milestone.

    “The NQCC opening is a great occasion for both the UK and Rigetti. We are proud that Rigetti’s on-premises quantum computer is fully operational for the NQCC research team to pursue critical research to advance our understanding of how to use quantum computing to solve real-world problems,” says Rigetti CEO Dr. Subodh Kulkarni.

    About Rigetti
    Rigetti is a pioneer in full-stack quantum computing. The Company has operated quantum computers over the cloud since 2017 and serves global enterprise, government, and research clients through its Rigetti Quantum Cloud Services platform. The Company’s proprietary quantum-classical infrastructure provides high performance integration with public and private clouds for practical quantum computing. Rigetti has developed the industry’s first multi-chip quantum processor for scalable quantum computing systems. The Company designs and manufactures its chips in-house at Fab-1, the industry’s first dedicated and integrated quantum device manufacturing facility. Learn more at www.rigetti.com.

    Rigetti Computing Media Contact:
    press@rigetti.com

    Cautionary Language Concerning Forward-Looking Statements
    Certain statements in this communication may be considered “forward-looking statements” within the meaning of the federal securities laws, including but not limited to, expectations related to the Company’s 24-qubit Ankaa-class system operating at the UK’s National Quantum Computing Centre, including the results of researchers testing, benchmarking and performing exploratory applications development on that system, and the SBRI grant to the Company from Innovate UK. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the Company’s ability to achieve milestones, technological advancements, including with respect to its technology roadmap, help unlock quantum computing, and develop practical applications; the ability of the Company to obtain government contracts successfully and in a timely manner and the availability of government funding; the potential of quantum computing; the ability of the Company to expand its QPU sales; the success of the Company’s partnerships and collaborations; the Company’s ability to accelerate its development of multiple generations of quantum processors; the outcome of any legal proceedings that may be instituted against the Company or others; the ability to maintain relationships with customers and suppliers and attract and retain management and key employees; costs related to operating as a public company; changes in applicable laws or regulations; the possibility that the Company may be adversely affected by other economic, business, or competitive factors; the Company’s estimates of expenses and profitability; the evolution of the markets in which the Company competes; the ability of the Company to implement its strategic initiatives, expansion plans and continue to innovate its existing services; the expected use of proceeds from the Company’s past and future financings or other capital; the sufficiency of the Company’s cash resources; unfavorable conditions in the Company’s industry, the global economy or global supply chain, including financial and credit market fluctuations and uncertainty, rising inflation and interest rates, disruptions in banking systems, increased costs, international trade relations, political turmoil, natural catastrophes, warfare (such as the ongoing military conflict between Russia and Ukraine and related sanctions and the state of war between Israel and Hamas and related threat of a larger conflict), and terrorist attacks; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, the Company’s Form 10-Q for the three months ended June 30, 2024, and other documents filed by the Company from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements other than as required by applicable law. The Company does not give any assurance that it will achieve its expectations.

    The MIL Network –

  • MIL-OSI: Compass Diversified Reports Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    WESTPORT, Conn., Oct. 30, 2024 (GLOBE NEWSWIRE) — Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market businesses, announced today its consolidated operating results for the three months ended September 30, 2024.

    “Despite a dynamic macroeconomic environment, we had another great quarter,” said Elias Sabo, CEO of Compass Diversified. “Our differentiated business model and strong operating companies position us to create long-term value for all stakeholders. In the third quarter, we saw double-digit sales growth driven by continued demand in our Branded Consumer businesses. Our Industrial businesses are stabilizing and delivered low single-digit growth in the quarter. Given our momentum, we are raising our 2024 outlook and believe we are well positioned for growth in 2025 and beyond.”

    Third Quarter 2024 Financial Summary vs. Same Year-Ago Period (where applicable)

    • Net sales up 11.8% to $582.6 million and up 6.6% on a pro forma basis.
    • Branded Consumer net sales up 9.2% on a pro forma basis to $399.2 million.
    • Industrial net sales up 1.2% to $183.4 million.
    • Income from continuing operations of $31.5 million vs. loss from continuing operations of $14.0 million.
    • Net income of $31.5 million vs. net loss of $3.8 million.
    • Adjusted Earnings, a non-GAAP financial measure, up 65% to $48.7 million vs. $29.6 million.
    • Adjusted EBITDA, a non-GAAP financial measure, was up 28% to $114.0 million vs. $89.0 million

    Recent Business Highlights

    • On October 24, 2024, CODI paid a third quarter 2024 cash distribution of $0.25 per share on its common shares.
    • On October 16, 2024, CODI announced a $100 million share repurchase program through December 31, 2024, subject to extension by the Company’s board.
    • On October 1, 2024, Altor Solutions, a subsidiary of CODI and a leading designer and manufacturer of custom protective and cold-chain packaging solutions for the industrial and life sciences markets, completed the acquisition of Lifoam Industries, a manufacturer and distributor of temperature-controlled shipping solutions.
    • On August 26, 2024, CODI announced the appointment of Stephen Keller as Chief Financial Officer.

    Third Quarter 2024 Financial Results

    Net sales in the third quarter of 2024 were $582.6 million, up 11.8% compared to $521.1 million in the third quarter of 2023. This was driven by the Company’s acquisition of The Honey Pot Co. in January 2024 and continued strong sales growth at Lugano and BOA. On a pro forma basis, assuming CODI had acquired The Honey Pot Co. on January 1, 2023, net sales were up 6.6%.

    On a pro forma basis, Branded Consumer net sales increased 9.2% to $399.2 million compared to the third quarter of 2023.

    Industrial net sales increased 1.2% to $183.4 million compared to the third quarter of 2023.

    Operating income for the third quarter of 2024 was $70.3 million compared to $17.4 million in the third quarter of 2023. Operating income in the third quarter of 2024 reflected higher gross profit at the Company’s Branded Consumer businesses, offset by increased SG&A and amortization expense from the acquisition of The Honey Pot Co. in the first quarter of 2024.

    Income from continuing operations in the third quarter of 2024 was $31.5 million compared to a loss from continuing operations of $14.0 million in the third quarter of 2023, primarily driven by strong growth at Lugano and BOA and the Company’s acquisition of The Honey Pot Co. in January 2024. In the prior year, the Company recognized an impairment charge of $32.6 million at Velocity that drove the loss in the third quarter.

    Net income in the third quarter of 2024 was $31.5 million compared to a net loss of $3.8 million in the third quarter of 2023.

    Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the third quarter of 2024 increased 65% to $48.7 million compared to $29.6 million a year ago. CODI’s weighted average number of shares outstanding in the third quarter of 2024 was 75.65 million compared to 71.88 million in the prior year third quarter.

    Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) in the third quarter of 2024 was $114.0 million, up 28% compared to $89.0 million in the third quarter of 2023. The increase was primarily due to strong results at Lugano and BOA, and the addition of The Honey Pot Co. in the first quarter of 2024. Management fees incurred during the third quarter were $18.8 million.

    Liquidity and Capital Resources

    As of September 30, 2024, CODI had approximately $71.9 million in cash and cash equivalents, $110 million outstanding on its revolver, $377.5 million outstanding in term loans, $1 billion outstanding in 5.250% Senior Notes due 2029 and $300 million outstanding in 5.000% Senior Notes due 2032.

    As of September 30, 2024, the Company had no significant debt maturities until 2027 and had net borrowing availability of approximately $486.6 million under its revolving credit facility.

    Third Quarter 2024 Distributions

    On October 3, 2024, CODI’s board of directors declared a third quarter distribution of $0.25 per share on the Company’s common shares. The cash distribution was paid on October 24, 2024, to all holders of record of common shares as of October 17, 2024.

    The board also declared a quarterly cash distribution of $0.453125 per share on the Company’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”). The distribution on the Series A Preferred Shares covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series A Preferred Shares as of October 15, 2024.

    The board also declared a quarterly cash distribution of $0.4921875 per share on the Company’s 7.875% Series B Preferred Shares (the “Series B Preferred Shares”). The distribution on the Series B Preferred Shares covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series B Preferred Shares as of October 15, 2024.

    The board also declared a quarterly cash distribution of $0.4921875 per share on the Company’s 7.875% Series C Preferred Shares (the “Series C Preferred Shares”). The distribution on the Series C Preferred Shares covers the period from, and including, July 30, 2024, up to, but excluding, October 30, 2024. The distribution for such period was payable on October 30, 2024, to all holders of record of Series C Preferred Shares as of October 15, 2024.

    2024 Outlook

    As a result of CODI’s strong financial performance in the third quarter, the Company is raising its Adjusted EBITDA and Adjusted Earnings outlook (see “Note Regarding Use of Non-GAAP Financial Measures” below). For the full year 2024, CODI now expects consolidated pro-forma subsidiary Adjusted EBITDA of between $510 million and $525 million. This is inclusive of The Honey Pot Co. as if it was owned from January 1, 2024.

    Of this range, CODI now expects its Branded Consumer vertical to deliver between $390 million to $400 million and its Industrial vertical to deliver between $120 million to $125 million. These estimates are based on the summation of the Company’s expectations for its current subsidiaries in 2024, absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead.

    CODI expects to earn Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below), which includes management fees and corporate expenses, of between $420 million and $435 million for the full year 2024. Adjusted EBITDA only includes results from The Honey Pot Co. from the date of acquisition.

    The Company further expects Adjusted Earnings to be between $155 million and $165 million (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2024.

    In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2024 subsidiary Adjusted EBITDA, 2024 Adjusted EBITDA or 2024 Adjusted Earnings to their comparable GAAP measure because it does not provide guidance on Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, CODI is unable to address the probable significance of the unavailable information, which could be material to future results.

    Conference Call

    In conjunction with this announcement, CODI will host a conference call on October 30, 2024, at 5:00 p.m. E.T. / 2:00 p.m. PT with the Company’s Chief Executive Officer, Elias Sabo, the Company’s Chief Financial Officer, Stephen Keller, and Pat Maciariello, the Chief Operating Officer of Compass Group Management. A live webcast of the call will be available on the Investor Relations section of CODI’s website. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company’s website.

    Note Regarding Use of Non-GAAP Financial Measures

    Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations and Adjusted Earnings to Net Income (Loss) on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings. We believe that Adjusted EBITDA and Adjusted Earnings provides useful information to investors and reflect important financial measures as each excludes the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to Net Income (Loss) and Income (Loss) from Continuing Operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted EBITDA allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. The presentation of Adjusted Earnings provides insight into our operating results.

    Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of The Honey Pot Co., assuming that the Company acquired The Honey Pot Co. on January 1, 2023. We have reconciled pro forma net sales to net sales, the most directly comparable GAAP financial measure, on the attached schedules. We believe that pro forma net sales is useful information for investors as it provides a better understanding of sales performance, and relative changes thereto, on a comparable basis. Pro forma net sales is not necessarily indicative of what the actual results would have been if the acquisition had in fact occurred on the date or for the periods indicated nor does it purport to project net sales for any future periods or as of any date.

    Adjusted EBITDA, Adjusted Earnings and pro forma net sales are not meant to be a substitute for GAAP measures and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies.

    About Compass Diversified

    Since its IPO in 2006, CODI has consistently executed its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the industrial, branded consumer and healthcare sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.

    Forward Looking Statements

    Certain statements in this press release may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements as to our future performance or liquidity, such as expectations regarding our results of operations and financial condition, our 2024 Subsidiary Adjusted EBITDA, our 2024 Adjusted EBITDA, our 2024 Adjusted Earnings, our pending acquisitions and divestitures, and other statements with regard to the future performance of CODI. We may use words such as “plans,” “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “seek,” “look,” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this press release involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in CODI’s annual report on Form 10-K and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment, including changes in inflation and interest rates; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, war, natural disasters or social, civil and political unrest; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); environmental risks affecting the business or operations of our subsidiaries; disruption in the global supply chain, labor shortages and high labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we may make; the ability to successfully complete when we’ve executed divestitures agreements; the dependence of our future success on the general economy and its impact on the industries in which we operate; the ability of our subsidiaries to achieve their objectives; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our subsidiaries; and other considerations that may be disclosed from time to time in CODI’s publicly disseminated documents and filings. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Although, except as required by law, CODI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that CODI may make directly to you or through reports that it in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

    Investor Relations

    Compass Diversified
    irinquiry@compassdiversified.com

    Gateway Group
    Cody Slach
    949.574.3860
    CODI@gateway-grp.com

    Media Relations
    Compass Diversified
    mediainquiry@compassdiversified.com

    The IGB Group        
    Leon Berman
    212-477-8438
    lberman@igbir.com

    Compass Diversified Holdings
    Condensed Consolidated Balance Sheets
     
           
      September 30, 2024   December 31, 2023
    (in thousands) (Unaudited)    
    Assets      
    Current assets      
    Cash and cash equivalents $ 71,948   $ 450,477
    Accounts receivable, net   412,688     318,241
    Inventories, net   939,361     740,387
    Prepaid expenses and other current assets   100,550     94,715
    Total current assets   1,524,547     1,603,820
    Property, plant and equipment, net   186,555     192,562
    Goodwill   1,004,084     901,428
    Intangible assets, net   1,062,425     923,905
    Other non-current assets   183,803     195,266
    Total assets $ 3,961,414   $ 3,816,981
           
    Liabilities and stockholders’ equity      
    Current liabilities      
    Accounts payable and accrued expenses $ 293,267   $ 250,868
    Due to related party   18,116     16,025
    Current portion, long-term debt   12,500     10,000
    Other current liabilities   37,337     35,465
    Total current liabilities   361,220     312,358
    Deferred income taxes   135,777     120,131
    Long-term debt   1,763,687     1,661,879
    Other non-current liabilities   198,849     203,232
    Total liabilities   2,459,533     2,297,600
    Stockholders’ equity      
    Total stockholders’ equity attributable to Holdings   1,236,965     1,326,750
    Noncontrolling interest   264,916     192,631
    Total stockholders’ equity   1,501,881     1,519,381
    Total liabilities and stockholders’ equity $ 3,961,414   $ 3,816,981
           
    Compass Diversified Holdings
    Consolidated Statements of Operations
    (Unaudited)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands, except per share data)   2024       2023       2024       2023  
    Net sales $ 582,623     $ 521,065     $ 1,649,508     $ 1,491,887  
    Cost of sales   308,045       295,754       873,989       844,871  
    Gross profit   274,578       225,311       775,519       647,016  
    Operating expenses:              
    Selling, general and administrative expense   158,754       132,944       460,914       396,963  
    Management fees   18,758       18,471       55,689       51,536  
    Amortization expense   26,798       23,955       80,547       71,906  
    Impairment expense   —       32,568       8,182       32,568  
    Operating income   70,268       17,373       170,187       94,043  
    Other income (expense):              
    Interest expense, net   (27,358 )     (27,560 )     (77,494 )     (80,353 )
    Amortization of debt issuance costs   (1,005 )     (1,005 )     (3,014 )     (3,034 )
    Gain (loss) on sale of Crosman   388       —       (24,218 )     —  
    Other income (expense), net   (78 )     1,045       (4,327 )     2,100  
    Net income (loss) from continuing operations before income taxes   42,215       (10,147 )     61,134       12,756  
    Provision for income taxes   10,754       3,837       40,960       15,077  
    Income (loss) from continuing operations   31,461       (13,984 )     20,174       (2,321 )
    Income from discontinued operations, net of income tax   —       8,950       —       21,790  
    Gain on sale of discontinued operations   —       1,274       3,345       103,495  
    Net income (loss)   31,461       (3,760 )     23,519       122,964  
    Less: Net income from continuing operations attributable to noncontrolling interest   9,397       5,721       22,632       13,390  
    Less: Net income from discontinued operations attributable to noncontrolling interest   —       673       —       725  
    Net income (loss) attributable to Holdings $ 22,064     $ (10,154 )   $ 887     $ 108,849  
                   
    Amounts attributable to Holdings              
    Income (loss) from continuing operations $ 22,064     $ (19,705 )   $ (2,458 )   $ (15,711 )
    Income from discontinued operations   —       8,277       —       21,065  
    Gain on sale of discontinued operations, net of income tax   —       1,274       3,345       103,495  
    Net income (loss) attributable to Holdings $ 22,064     $ (10,154 )   $ 887     $ 108,849  
                   
    Basic income (loss) per common share attributable to Holdings              
    Continuing operations $ 0.08     $ (0.45 )   $ (1.18 )   $ (1.00 )
    Discontinued operations   —       0.12       0.04       1.69  
      $ 0.08     $ (0.33 )   $ (1.14 )   $ 0.69  
                   
    Basic weighted average number of common shares outstanding   75,645       71,881       75,437       71,996  
                   
    Cash distributions declared per Trust common share $ 0.25     $ 0.25     $ 0.75     $ 0.75  
     
    Compass Diversified Holdings
    Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA
    (Unaudited)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024       2023       2024       2023  
    Net income (loss) $ 31,461     $ (3,760 )   $ 23,519     $ 122,964  
    Income from discontinued operations, net of tax   —       8,950       —       21,790  
    Gain on sale of discontinued operations, net of tax   —       1,274       3,345       103,495  
    Net income (loss) from continuing operations $ 31,461     $ (13,984 )   $ 20,174     $ (2,321 )
    Less: income from continuing operations attributable to noncontrolling interest   9,397       5,721       22,632       13,390  
    Net income (loss) attributable to Holdings – continuing operations $ 22,064     $ (19,705 )   $ (2,458 )   $ (15,711 )
    Adjustments:              
    Distributions paid – preferred shares   (6,345 )     (6,045 )     (18,491 )     (18,136 )
    Amortization expense – intangibles and inventory step up   26,798       23,956       84,553       73,081  
    Impairment expense   —       32,568       8,182       32,568  
    Tax effect – impairment expense   —       (4,308 )     —       (4,308 )
    (Gain) loss on sale of Crosman   (388 )     —       24,218       —  
    Tax effect – loss on sale of Crosman   —       —       7,254       —  
    Stock compensation   4,769       2,750       13,026       7,598  
    Acquisition expenses   —       —       3,479       —  
    Integration services fee   875       —       1,750       2,375  
    Other   963       349       1,368       1,129  
    Adjusted Earnings $ 48,736     $ 29,565     $ 122,881     $ 78,596  
    Plus (less):              
    Depreciation expense   10,366       11,994       31,763       35,255  
    Income tax provision   10,754       3,837       40,960       15,077  
    Interest expense   27,357       27,560       77,494       80,353  
    Amortization of debt issuance costs   1,005       1,005       3,014       3,034  
    Tax effect – loss on sale of Crosman       —       (7,254 )     —  
    Income from continuing operations attributable to noncontrolling interest   9,397       5,721       22,632       13,390  
    Distributions paid – preferred shares   6,345       6,045       18,491       18,136  
    Other (income) expense   79       (1,045 )     4,327       (2,100 )
    Adjusted EBITDA $ 114,039     $ 88,990     $ 314,308     $ 246,049  
     
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended September 30, 2024
    (Unaudited)
     
        Corporate     5.11     BOA   Ergobaby   Lugano   PrimaLoft   THP   Velocity Outdoor   Altor   Arnold   Sterno   Consolidated
    Income (loss) from continuing operations   $ (8,715 )   $ 9,737     $ 3,902     $ (3,229 )   $ 24,272     $ (4,273 )   $ (160 )   $ 1,831     $ 2,682   $ 2,260   $ 3,154     $ 31,461  
    Adjusted for:                                                
    Provision (benefit) for income taxes     —       1,782       1,451       136       8,342       (2,315 )     (20 )     (2,223 )     1,466     1,196     939       10,754  
    Interest expense, net     27,238       (2 )     (4 )     —       —       (10 )     (3 )     (1 )     —     139     —       27,357  
    Intercompany interest     (41,375 )     3,334       4,925       2,116       15,080       4,480       2,907       2,038       1,735     1,816     2,944       —  
    Depreciation and amortization     118       5,617       5,402       2,053       2,699       5,337       4,166       1,397       4,080     2,340     4,960       38,169  
    EBITDA     (22,734 )     20,468       15,676       1,076       50,393       3,219       6,890       3,042       9,963     7,751     11,997       107,741  
    Other (income) expense     —       13       (110 )     17       (68 )     1       25       (164 )     58     —     (81 )     (309 )
    Noncontrolling shareholder compensation     —       544       1,504       232       459       828       540       186       237     4     235       4,769  
    Integration services fee     —       —       —       —       —       —       875       —       —     —     —       875  
    Other     —       —       —       —       —       —       —       —       —     880     83       963  
    Adjusted EBITDA   $ (22,734 )   $ 21,025     $ 17,070     $ 1,325     $ 50,784     $ 4,048     $ 8,330     $ 3,064     $ 10,258   $ 8,635   $ 12,234     $ 114,039  
     
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended September 30, 2023
    (Unaudited)
     
                                                 
        Corporate     5.11     BOA   Ergobaby   Lugano   PrimaLoft   Velocity Outdoor   Altor   Arnold   Sterno   Consolidated
    Income (loss) from continuing operations   $ (13,750 )   $ 5,834     $ 4,257     $ (261 )   $ 14,584   $ (4,893 )   $ (28,881 )   $ 5,042     $ 2,103   $ 1,981     $ (13,984 )
    Adjusted for:                                            
    Provision (benefit) for income taxes     —       1,920       865       (620 )     4,210     (2,566 )     (2,951 )     1,460       876     643       3,837  
    Interest expense, net     27,525       (2 )     (4 )     —       —     (3 )     38       —       6     —       27,560  
    Intercompany interest     (34,708 )     5,477       1,571       2,144       8,930     4,635       3,633       2,549       1,706     4,063       —  
    Depreciation and amortization     380       6,573       5,930       2,033       2,081     5,361       3,272       4,215       2,126     4,984       36,955  
    EBITDA     (20,553 )     19,802       12,619       3,296       29,805     2,534       (24,889 )     13,266       6,817     11,671       54,368  
    Other (income) expense     —       98       (63 )     —       71     (9 )     (425 )     (362 )     8     (363 )     (1,045 )
    Noncontrolling shareholder compensation     —       258       736       312       472     262       228       234       8     240       2,750  
    Impairment expense     —       —       —       —       —     —       32,568       —       —     —       32,568  
    Other     —       —       —       —       —     —       —       —       —     349       349  
    Adjusted EBITDA   $ (20,553 )   $ 20,158     $ 13,292     $ 3,608     $ 30,348   $ 2,787     $ 7,482     $ 13,138     $ 6,833   $ 11,897     $ 88,990  
     
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Nine Months Ended September 30, 2024
    (Unaudited)
                                                     
        Corporate     5.11     BOA   Ergobaby   Lugano   PrimaLoft   THP   Velocity Outdoor   Altor   Arnold   Sterno   Consolidated
    Income (loss) from continuing operations   $ (21,151 )   $ 18,594     $ 16,248     $ (6,337 )   $ 59,257     $ (5,261 )   $ (7,764 )   $ (53,368 )   $ 6,076   $ 6,169     $ 7,711     $ 20,174
    Adjusted for:                                                
    Provision (benefit) for income taxes     —       4,792       3,920       516       20,010       (1,731 )     (2,589 )     7,074       3,192     3,182       2,594       40,960
    Interest expense, net     77,280       (3 )     (16 )     —       3       (15 )     (28 )     53       —     220       —       77,494
    Intercompany interest     (122,209 )     10,114       15,716       6,364       40,417       13,526       7,827       7,620       5,612     5,313       9,700       —
    Depreciation and amortization     552       17,198       16,251       6,427       7,571       15,987       14,811       6,679       12,250     6,754       14,850       119,330
    EBITDA     (65,528 )     50,695       52,119       6,970       127,258       22,506       12,257       (31,942 )     27,130     21,638       34,855       257,958
    Other (income) expense     462       86       22       12       (61 )     5       (5 )     25,734       2,722     (9 )     (423 )     28,545
    Non-controlling shareholder compensation     —       1,630       4,352       738       1,662       1,823       1,157       556       741     13       354       13,026
    Impairment expense     —       —       —       —       —       —       —       8,182       —     —       —       8,182
    Acquisition expenses     —       —       —       —       —       —       3,479       —       —     —       —       3,479
    Integration services fee     —       —       —       —       —       —       1,750       —       —     —       —       1,750
    Other     —       —       —       —       —       —       90       —       —     880       398       1,368
    Adjusted EBITDA   $ (65,066 )   $ 52,411     $ 56,493     $ 7,720     $ 128,859     $ 24,334     $ 18,728     $ 2,530     $ 30,593   $ 22,522     $ 35,184     $ 314,308
     
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Nine Months Ended September 30, 2023
    (Unaudited)
                                                 
        Corporate     5.11     BOA   Ergobaby   Lugano   PrimaLoft   Velocity Outdoor   Altor   Arnold   Sterno   Consolidated
    Income (loss) from continuing operations   $ (40,914 )   $ 11,850     $ 15,151     $ (1,114 )   $ 31,468     $ (5,500 )   $ (36,862 )   $ 12,244   $ 6,911     $ 4,445     $ (2,321 )
    Adjusted for:                                            
    Provision (benefit) for income taxes     —       3,990       2,224       (1,272 )     10,295       (3,125 )     (5,905 )     4,094     3,264       1,512       15,077  
    Interest expense, net     80,123       (4 )     (9 )     —       4       (9 )     232       —     16       —       80,353  
    Intercompany interest     (99,433 )     15,698       5,032       6,484       22,660       13,343       10,070       8,183     5,078       12,885       —  
    Depreciation and amortization     1,056       19,866       17,436       6,112       6,971       16,084       10,023       12,558     6,248       15,016       111,370  
    EBITDA     (59,168 )     51,400       39,834       10,210       71,398       20,793       (22,442 )     37,079     21,517       33,858       204,479  
    Other (income) expense     (128 )     (103 )     117       29       (5 )     130       (1,179 )     201     (1 )     (1,161 )     (2,100 )
    Non-controlling shareholder compensation     —       988       2,069       936       1,312       219       686       800     26       562       7,598  
    Impairment expense     —       —       —       —       —       —       32,568       —     —       —       32,568  
    Integration services fee     —       —       —       —       —       2,375       —       —     —       —       2,375  
    Other     —       —       —       —       —       —       —       —     —       1,129       1,129  
    Adjusted EBITDA   $ (59,296 )   $ 52,285     $ 42,020     $ 11,175     $ 72,705     $ 23,517     $ 9,633     $ 38,080   $ 21,542     $ 34,388     $ 246,049  
     
    Compass Diversified Holdings
    Non-GAAP Adjusted EBITDA
    (Unaudited)
                   
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024       2023       2024       2023  
                   
    Branded Consumer              
    5.11 $ 21,025     $ 20,158     $ 52,411     $ 52,285  
    BOA   17,070       13,292       56,493       42,020  
    Ergobaby   1,325       3,608       7,720       11,175  
    Lugano   50,784       30,348       128,859       72,705  
    PrimaLoft   4,048       2,787       24,334       23,517  
    The Honey Pot Co.(1)   8,330       —       18,728       —  
    Velocity Outdoor   3,064       7,482       2,530       9,633  
    Total Branded Consumer $ 105,646     $ 77,675     $ 291,075     $ 211,335  
                   
    Niche Industrial              
    Altor Solutions   10,258       13,138       30,593       38,080  
    Arnold Magnetics   8,635       6,833       22,522       21,542  
    Sterno   12,234       11,897       35,184       34,388  
    Total Niche Industrial $ 31,127     $ 31,868     $ 88,299     $ 94,010  
    Corporate expense   (22,734 )     (20,553 )     (65,066 )     (59,296 )
    Total Adjusted EBITDA $ 114,039     $ 88,990     $ 314,308     $ 246,049  

    (1) The above results for The Honey Pot Co. do not include management’s estimate of Adjusted EBITDA, before the Company’s ownership of $3.9 million for the nine months ended September 30, 2024, and $5.1 million and $20.9 million, respectively, for the three and nine months ended September 30, 2023. The Honey Pot Co. was acquired on January 31, 2024.

    Compass Diversified Holdings
    Net Sales to Pro Forma Net Sales Reconciliation
    (unaudited)
                   
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024     2023     2024     2023
                   
    Net Sales $ 582,623   $ 521,065   $ 1,649,508   $ 1,491,887
    Acquisitions(1)   —     25,560     10,671     82,447
    Pro Forma Net Sales $ 582,623   $ 546,625   $ 1,660,179   $ 1,574,334

    (1) Acquisitions reflects the net sales for The Honey Pot Co. on a pro forma basis as if the Company had acquired The Honey Pot Co. on January 1, 2023.

    Compass Diversified Holdings
    Subsidiary Pro Forma Net Sales
    (unaudited)
                   
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024     2023     2024     2023
                   
    Branded Consumer              
    5.11 $ 139,218   $ 135,213   $ 387,393   $ 385,695
    BOA   45,607     37,281     142,670     113,390
    Ergobaby   21,755     23,218     71,530     71,785
    Lugano   118,584     78,735     320,981     203,571
    PrimaLoft   13,686     10,930     61,518     57,619
    The Honey Pot(1)   31,545     25,560     86,563     82,447
    Velocity Outdoor   28,809     54,469     77,419     126,348
    Total Branded Consumer $ 399,204   $ 365,406   $ 1,148,074   $ 1,040,855
                   
    Niche Industrial              
    Altor Solutions   52,129     59,215     157,746     181,613
    Arnold Magnetics   46,103     41,819     130,545     122,047
    Sterno   85,187     80,185     223,814     229,819
    Total Niche Industrial $ 183,419   $ 181,219   $ 512,105   $ 533,479
                   
    Total Subsidiary Net Sales $ 582,623   $ 546,625   $ 1,660,179   $ 1,574,334

    (1) Net sales for The Honey Pot Co. are pro forma as if the Company had acquired this business on January 1, 2023.

    Compass Diversified Holdings
    Condensed Consolidated Cash Flows
    (unaudited)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024       2023       2024       2023  
                   
    Net cash provided by (used in) operating activities $ (29,227 )   $ 19,713     $ (77,610 )   $ 56,952  
    Net cash provided by (used in) investing activities   (16,177 )     (13,538 )     (352,251 )     104,291  
    Net cash provided by (used in) financing activities   47,516       (8,308 )     50,882       (157,927 )
    Foreign currency impact on cash   1,466       (484 )     449       150  
    Net increase (decrease) in cash and cash equivalents   3,578       (2,617 )     (378,530 )     3,466  
    Cash and cash equivalents – beginning of the period(1)   68,370       67,354       450,478       61,271  
    Cash and cash equivalents – end of the period(2) $ 71,948     $ 64,737     $ 71,948     $ 64,737  

    (1) Includes cash from discontinued operations of $4.7 million at January 1, 2023.

    (2) Includes cash from discontinued operations of $0.1 million at September 30, 2023.

    Compass Diversified Holding
    Selected Financial Data – Cash Flows
    (unaudited)
                   
      Three Months Ended September 30,   Nine Months Ended September 30,
    (in thousands)   2024       2023       2024       2023  
                   
    Changes in operating assets and liabilities $ (99,778 )   $ (36,806 )   $ (253,902 )   $ (128,920 )
    Purchases of property and equipment $ (15,588 )   $ (9,933 )   $ (34,507 )   $ (38,537 )
    Distributions paid – common shares $ (18,913 )   $ (17,974 )   $ (56,577 )   $ (54,012 )
    Distributions paid – preferred shares $ (6,345 )   $ (6,045 )   $ (18,491 )   $ (18,136 )

    The MIL Network –

  • MIL-OSI: Orange County Bancorp, Inc. Announces Third Quarter 2024 results:

    Source: GlobeNewswire (MIL-OSI)

    • Net Interest Income increased $467 thousand, or 2.1%, to $23.0 million for the quarter ended September 30, 2024, from $22.5 million for the quarter ended September 30, 2023
    • Net Interest Margin grew 3 basis points to 3.81% for the quarter ended September 30, 2024, as compared to 3.78% for the quarter ended September 30, 2023
    • Total Loans grew $49.0 million, or 2.8%, reaching $1.8 billion at September 30, 2024 as compared to $1.7 billion at December 31, 2023.
    • Total Deposits rose $101.3 million, or 5.0%, to $2.1 billion at September 30, 2024, from $2.0 billion at year-end 2023
    • Book value per share increased $4.77, or 16.3%, to $34.03 at September 30, 2024, from $29.26 at December 31, 2023
    • Trust and investment advisory income rose $521 thousand, or 20.1%, to $3.1 million for Q3 2024, as compared to $2.6 million for Q3 2023

    MIDDLETOWN, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — Orange County Bancorp, Inc. (the “Company” – Nasdaq: OBT), parent company of Orange Bank & Trust Co. (the “Bank”) and Hudson Valley Investment Advisors, Inc. (“HVIA”), today announced net income of $3.2 million, or $0.57 per basic and diluted share, for the three months ended September 30, 2024. This compares with net income of $9.0 million, or $1.61 per basic and diluted share, for the three months ended September 30, 2023.   The decrease in earnings per share, basic and diluted, was due primarily to increases in the provision for credit losses and non-interest expense offset by increases in net interest income and non-interest income during the current period. For the nine months ended September 30, 2024, net income was $20.7 million, or $3.67 per basic and diluted share, as compared to $21.4 million, or $3.79 per basic and diluted share, for the nine months ended September 30, 2023.

    Book value per share rose $4.77, or 16.3%, year-to-date, from $29.26 at December 31, 2023 to $34.03 at September 30, 2024. Tangible book value per share increased $4.81, or 17.1%, during the same period, from $28.12 at December 31, 2023 to $32.93 at September 30, 2024 (see “Non-GAAP Financial Measure Reconciliation” below for additional detail). These increases were due primarily to earnings during the nine months ended September 30, 2024, as well as a decrease in accumulated other comprehensive income (loss) associated with a reduction in unrealized losses within the investment securities portfolio.  

    “This quarter was one in which our core and ancillary businesses continued to perform well,” said Company President and CEO Michael Gilfeather, “but earnings were negatively impacted by a significant commercial office space loan. For the quarter, we increased our provision for loan losses by $7.2 million.  This was primarily attributable to a $5.6 million reserve against an office space participation loan identified as problematic in the prior quarter, and against which we’ve already reserved nearly $4 million.  Our decision to add to the reserves was the result of further deterioration of the loan and uncertainty regarding the borrower’s commitment to payment performance and we are pursuing all remedies at our disposal. The remainder of the quarterly provision, approximately $1.6 million, was primarily attributable to loan growth during the quarter, as well as the impact associated with periodic review of our loan portfolio. We are fortunate that, despite this reserve, the strength and resilience of our business model enabled us to record $3.2 million of net income for the quarter, bringing our 9-month total to $20.7 million, as compared to $21.4 million for the same period last year.

    Loan demand and economic activity in the communities we serve remains strong. This was aided by the Federal Reserve’s long-awaited reduction in interest rates – an outsized 50 basis points – which contributed to quality loan growth experienced in the quarter.  For the quarter, total loans increased $62.3 million, or 3.6%, increasing our total loan portfolio to $1.8 billion at quarter end, up from $1.7 billion at year end 2023.   Total deposits at quarter end, though below second quarter levels due to seasonal reductions in municipal deposits and IOLA business, have grown $101.3 million, or 5.0%, since year end, eclipsing $2.1 billion. Attorneys, while not the only source of our IOLA deposits, are a significant component which have the added benefit of providing meaningful business referrals to the Bank. Total cost of deposits was 1.25% for Q3, reflecting the Bank’s ongoing commitment to growing commercial checking accounts and other low-cost deposits. Given the challenges our industry has confronted retaining, much less growing deposits in the current interest rate environment, I am very proud of these results.

    Net interest margin for the quarter was 3.81%, down 29 basis points, or 7.1%, from the previous quarter, but still well above industry averages.

    Our Wealth Management divisions continued their strong performance in Q3. Trust and Advisory income rose approximately $521 thousand, or 20.1% to $3.1 million, as compared to $2.6 million during Q3 2023. While a portion of this is attributable to asset growth from favorable market performance, gathering new AUM has become a bank wide area of focus. Bank clients seeking higher returns on their idle deposits are introduced to our HVIA asset management staff, who have competitive alternatives, financial market insight, and can provide tailored investment solutions for their overall cash strategies. This has enabled us to retain those funds, attract new AUM from outside and keep client assets in-house for easy access as business and personal needs evolve over time.

    As frustrating as aspects of this quarter have been, overall performance of the Bank and our employees has been exemplary.   We recognize success in our industry isn’t judged by quarters, but by years, with our 132-year history serving as testimony to the commitment of our employees and consistency of our performance over time. This perspective has been critical to our success and is why our staff and clients have remained close and loyal to our vision. So I once again thank our employees for their hard work and dedication, our customers for their trust and business, and our investors for their continued confidence and support.” 

    Third Quarter 2024 Financial Review

    Net Income

    Net income for the third quarter of 2024 was $3.2 million, a decrease of $5.8 million, or 64.4%, from net income of $9.0 million for the third quarter of 2023. The decrease was the result of a substantial provision for estimated credit losses as well as increased interest and non-interest expense over the same quarter last year. Net income for the nine months ended September 30, 2024 was $20.7 million, as compared to $21.4 million for the same period in 2023. The decrease similarly reflected the effect of an increase in provision for credit losses coupled with increased non-interest expense during the first nine months of 2024, as compared to the same period in 2023. The provision includes the impact of additional reserves associated with a nonaccrual loan during the current quarter.

    Net Interest Income

    For the three months ended September 30, 2024, net interest income rose $467 thousand, or 2.1%, to $23.0 million, versus $22.5 million during the same period last year. The increase was driven primarily by a $1.7 million increase in interest and fees on loans during the current period. For the nine months ended September 30, 2024, net interest income reached $68.7 million, representing an increase of $2.4 million, or 3.7%, over the first nine months of 2023.

    Total interest income rose $1.3 million, or 4.4%, to $31.4 million for the three months ended September 30, 2024, compared to $30.1 million for the three months ended September 30, 2023. The increase reflected 6.9% growth in interest and fees associated with loans, a 1.6% increase in interest income from tax-exempt investment securities, and an 8.2% increase in interest income related to fed funds interest and balances held at correspondent banks. For the nine months ended September 30, 2024, total interest income rose $8.8 million, or 10.2%, to $95.0 million as compared to $86.2 million for the nine months ended September 30, 2023.

    Total interest expense increased $870 thousand during the third quarter of 2024, to $8.5 million, as compared to $7.6 million in the third quarter of 2023. The increase represented the combined effect of rising interest rates on customer deposits and brokered deposits partially offset by a decrease in the cost associated with borrowed funds utilized as alternate sources of funding. Interest expense associated with savings and NOW accounts totaled $5.4 million during the third quarter of 2024, as compared to $3.5 million during the third quarter of 2023. Interest expense associated with FHLB advances drawn and other borrowings during the current quarter totaled $1.6 million, as compared to $1.9 million during the third quarter of 2023. During the nine months ended September 30, 2024, total interest expense rose $6.4 million, to $26.3 million, as compared to $20.0 million for the same period last year.

    Provision for Credit Losses

    As of January 1, 2023, the Company adopted the current expected credit losses methodology (“CECL”) accounting standard, which includes loans individually evaluated, as well as loans evaluated on a pooled basis to assess the adequacy of the allowance for credit losses. The Bank seeks to estimate lifetime losses in its loan and investment portfolio by using expected discounted cash flows and supplemental qualitative considerations, including relevant economic considerations, portfolio concentrations, and other external factors, as well as evaluating investment securities held by the Bank.

    The Company recognized a provision for credit losses of $7.2 million for the three months ended September 30, 2024, as compared to $837 thousand for the three months ended September 30, 2023. This increase was primarily driven by a $5.6 million reserve associated with a specific non-accrual commercial loan as well as the impact of the methodology associated with estimated lifetime losses and the increase in loans closed during the quarter. The allowance for credit losses to total loans was 1.73% as of September 30, 2024 versus 1.44% as of December 31, 2023. For the nine months ended September 30, 2024, the provision for credit losses totaled $7.8 million as compared to $7.4 million for the nine months ended September 30, 2023. No reserves for investment securities were recorded during 2024.

    Non-Interest Income

    Non-interest income rose $954 thousand, or 29.6%, to $4.2 million for the three months ended September 30, 2024, as compared to $3.2 million for the three months ended September 30, 2023. This growth was related to continued increased fee income within several of the Company’s fee income categories, including investment advisory income, trust income, and service charges on deposit accounts. For the nine months ended September 30, 2024, non-interest income increased approximately $2.0 million, to $11.7 million, as compared to $9.7 million for the nine months ended September 30, 2023.

    Non-Interest Expense

    Non-interest expense was $16.0 million for the third quarter of 2024, reflecting an increase of $2.4 million, or 17.3%, as compared to $13.6 million for the same period in 2023. The increase in non-interest expense for the current three-month period reflected the Company’s continued commitment to growth. This investment consists primarily of increases in compensation, information technology, and deposit insurance costs, as well as professional fees associated with certain corporate initiatives. Our efficiency ratio increased to 58.8% for the three months ended September 30, 2024, from 52.8% for the same period in 2023. For the nine months ended September 30, 2024, our efficiency ratio increased to 58.2% from 55.4% for the same period in 2023. Non-interest expense for the nine months ended September 30, 2024 reached $46.7 million, reflecting a $4.7 million increase over non-interest expense of $42.1 million for the nine months ended September 30, 2023.

    Income Tax Expense

    Provision for income taxes for the three months ended September 30, 2024 was $788 thousand, as compared to $2.3 million for the same period in 2023. The decrease was directly related to lower income before income taxes. For the nine months ended September 30, 2024, the provision for income taxes was $5.1 million, approximately the same as for the nine months ended September 30, 2023. Our effective tax rate for the three-month period ended September 30, 2024 was 19.7%, as compared to 20.0% for the same period in 2023. Our effective tax rate for the nine-month period ended September 30, 2024 was 19.9%, as compared to 19.3% for the same period in 2023.

    Financial Condition

    Total consolidated assets increased $33.6 million, or 1.4%, to remain relatively level at $2.5 billion at September 30, 2024 and December 31, 2023. The stability of the balance sheet included loan growth and continued increases in deposits and cash as well as paydowns of borrowings during the current nine-month period.

    Total cash and due from banks increased from $147.4 million at December 31, 2023, to $160.9 million at September 30, 2024, an increase of approximately $13.5 million, or 9.2%. This increase resulted primarily from increases in deposit balances and slower loan growth which increased cash levels while reducing short-term borrowings.

    Total investment securities decreased $26.7 million, or 5.3%, from $504.5 million at December 31, 2023 to $477.8 million at September 30, 2024. The decrease continues to be driven primarily by investment maturities during the first nine months of 2024.

    Total loans increased $49.0 million, or 2.8%, from $1.7 billion at December 31, 2023 to $1.8 billion at September 30, 2024. The increase was primarily driven by an increase of $75.2 million related to commercial real estate loans as well as a $4.7 million increase in consumer loans offset by decreases in all other loan categories during 2024.

    Total deposits increased $101.3 million, to $2.1 billion at September 30, 2024, from $2.0 billion at December 31, 2023. This increase was due primarily to $122.1 million of growth in money market accounts, $37.4 million increase in interest bearing demand accounts, and $30.1 million increase in savings accounts. The increases in deposit accounts were offset by an $8.8 million decrease in noninterest-bearing demand accounts and a $79.6 million decrease in certificates of deposit, mainly associated with brokered deposits utilized by the Bank for short term funding purposes. Deposit composition at September 30, 2024 included 48.3% in demand deposit accounts (including NOW accounts) as a percentage of total deposits. Uninsured deposits, net of fully collateralized municipal relationships, remain stable and represent approximately 39% of total deposits at September 30, 2024, as compared to 37% of total deposits at December 31, 2023.

    FHLBNY short-term borrowings decreased by $142.5 million, or 63.5%, to $82 million as of September 30, 2024, as compared to $224.5 million at December 31, 2023. The decrease in borrowings was driven by increased deposits which outpaced loan growth during the first nine months of 2024 and allowed for paydowns of borrowings while maintaining adequate levels of cash at September 30, 2024. The decrease in borrowings reflects a strategic decision to actively manage liquidity sources and take advantage of opportunities to reduce funding costs.

    Stockholders’ equity increased approximately $27.7 million during the first nine months of 2024, reaching $193.1 million at September 30, 2024 from $165.4 million at December 31, 2023. The increase was due primarily to $20.7 million of net income during the first nine months of 2024, partially reduced by dividends and favorably impacted by a reduction of unrealized losses of approximately $9.7 million, net of taxes, on the market value of investment securities within the Company’s equity as accumulated other comprehensive income (loss).

    At September 30, 2024, the Bank maintained capital ratios in excess of regulatory standards for well capitalized institutions. The Bank’s Tier 1 capital to average assets ratio was 10.06%, both common equity and Tier 1 capital to risk weighted assets were 13.64%, and total capital to risk weighted assets was 14.89%.  

    Wealth Management

    At September 30, 2024, our Wealth Management Division, which includes trust and investment advisory, totaled $1.8 billion in assets under management or advisory, as compared to $1.6 billion at December 31, 2023, a 13.4% increase. Trust and investment advisory income for the quarter ended September 30, 2024 reached $3.1 million and represented an increase of 20.0%, or $521 thousand, as compared to $2.6 million for the quarter ended September 30, 2023.

    The breakdown of trust and investment advisory assets as of September 30, 2024 and December 31, 2023, respectively, is as follows:

    ORANGE COUNTY BANCORP, INC.
    SUMMARY OF AUM/AUA
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Amount   Percent
    Investment Assets Under Management & Advisory $ 1,107,182   61.78 %   $ 909,384   57.56 %
    Trust Asset Under Administration & Management   684,937   38.22 %     670,515   42.44 %
    Total $ 1,792,119   100.00 %   $ 1,579,899   100.00 %
                   

    Loan Quality

    At September 30, 2024, the Bank had total non-performing loans of $11.2 million, or 0.62% of total loans. Total non-accrual loans represented approximately $10.9 million of loans as of September 30, 2024, compared to $4.4 million at December 31, 2023. The increase in non-accrual loans was primarily the result of one $10.7 million commercial real estate participation which remains non-performing and in non-accrual status at quarter end.

    On October 25, 2024, the Bank filed a civil complaint in the United States District Court for the District of New Jersey against the lead lender, Valley National Bank, of the non-performing commercial real estate loan participation noted above. This action cites breach of contract and other claims related to the participation agreement with the lead lender. The lawsuit requests damages and demands repurchase by the lead lender of the participated loan amount in accordance with the rights available under the terms of the participation agreement.

    Liquidity

    Management believes the Bank has the necessary liquidity to meet normal business needs. The Bank uses a variety of resources to manage its liquidity position. These include short term investments, cash from lending and investing activities, core-deposit growth, and non-core funding sources, such as time deposits exceeding $250,000, brokered deposits, FHLBNY advances, and other borrowings. As of September 30, 2024, the Bank’s cash and due from banks totaled $160.9 million. The Bank maintains an investment portfolio of securities available for sale, comprised mainly of US Government agency and treasury securities, Small Business Administration loan pools, mortgage-backed securities, and municipal bonds. Although the portfolio generates interest income for the Bank, it also serves as an available source of liquidity and funding. As of September 30, 2024, the Bank’s investment in securities available for sale was $477.8 million, of which $24.2 million was not pledged as collateral and additional $45.5 million with the Federal Reserve which is not specifically designated to any borrowings. Additionally, as of September 30, 2024, the Bank’s overnight advance line capacity at the Federal Home Loan Bank of New York was $577.6 million, of which $76.0 million was used to collateralize municipal deposits and $10.0 million was utilized for long term advances. As of September 30, 2024, the Bank’s unused borrowing capacity at the FHLBNY was $491.6 million. The Bank also maintains additional borrowing capacity of $20 million with other correspondent banks. Additional funding is available to the Bank through the discount window lending by the Federal Reserve.   At September 30, 2024, the Bank was utilizing $50 million of funding through the Bank Term Funding Program from the Federal Reserve under a one-year facility.

    The Bank also considers brokered deposits an element of its deposit strategy. As of September 30, 2024, the Bank had brokered deposit arrangements with various terms totaling $107.3 million.

    Non-GAAP Financial Measure Reconciliations      
    The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.
           
      September 30, 2024   December 31, 2023
      (Dollars in thousands except for share data)
    Tangible Common Equity:      
    Total stockholders’ equity $ 193,094     $ 165,376  
    Adjustments:      
    Goodwill   (5,359 )     (5,359 )
    Other intangible assets   (892 )     (1,107 )
    Tangible common equity $ 186,843     $ 158,910  
    Common shares outstanding   5,674,126       5,651,311  
    Book value per common share $ 34.03     $ 29.26  
    Tangible book value per common share $ 32.93     $ 28.12  
           
    Tangible Assets      
    Total assets $ 2,519,099     $ 2,485,468  
    Adjustments:      
    Goodwill   (5,359 )     (5,359 )
    Other intangible assets   (892 )     (1,107 )
    Tangible assets $ 2,512,848     $ 2,479,002  
    Tangible common equity to tangible assets   7.44 %     6.41 %
           

    About Orange County Bancorp, Inc

    Orange County Bancorp, Inc. is the parent company of Orange Bank & Trust Company and Hudson Valley Investment Advisors, Inc. Orange Bank & Trust Company is an independent bank that began with the vision of 14 founders over 125 years ago. It has grown through innovation and an unwavering commitment to its community and business clientele to approximately $2.5 billion in total assets. Hudson Valley Investment Advisors, Inc. is a Registered Investment Advisor in Goshen, NY. It was founded in 1996 and acquired by the Company in 2012.

    Forward Looking Statements

    Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, inflation, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, increased levels of loan delinquencies, problem assets and foreclosures, credit risk management, asset-liability management, cybersecurity risks, geopolitical conflicts, public health issues, the financial and securities markets and the availability of and costs associated with sources of liquidity.

    The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions that may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

    For further information:
    Michael Lesler
    EVP & Chief Financial Officer
    mlesler@orangebanktrust.com
    Phone: (845) 341-5111

    ORANGE COUNTY BANCORP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
    (UNAUDITED)
      (Dollar Amounts in thousands except per share data)
               
          September 30, 2024   December 31, 2023
               
        ASSETS      
               
    Cash and due from banks $ 160,872     $ 147,383  
    Investment securities – available-for-sale   469,532       489,948  
    (Amortized cost $529,161 at September 30, 2024 and $560,994 at December 31, 2023)    
    Restricted investment in bank stocks   8,267       14,525  
    Loans   1,796,094       1,747,062  
    Allowance for credit losses   (31,023 )     (25,182 )
      Loans, net   1,765,071       1,721,880  
               
    Premises and equipment, net   15,624       16,160  
    Accrued interest receivable   10,007       5,934  
    Bank owned life insurance   41,993       41,447  
    Goodwill   5,359       5,359  
    Intangible assets   892       1,107  
    Other assets   41,482       41,725  
               
        TOTAL ASSETS $ 2,519,099     $ 2,485,468  
               
        LIABILITIES AND STOCKHOLDERS’ EQUITY      
               
    Deposits:      
      Noninterest bearing $ 690,419     $ 699,203  
      Interest bearing   1,449,604       1,339,546  
        Total deposits   2,140,023       2,038,749  
               
    FHLB advances, short term   82,000       224,500  
    FHLB advances, long term   10,000       10,000  
    BTFP borrowing   50,000       –  
    Subordinated notes, net of issuance costs   19,573       19,520  
    Accrued expenses and other liabilities   24,409       27,323  
               
        TOTAL LIABILITIES   2,326,005       2,320,092  
               
        STOCKHOLDERS’ EQUITY      
               
    Common stock, $0.50 par value; 15,000,000 shares authorized;      
      5,683,304 issued; 5,674,126 and 5,651,311 outstanding,      
      at September 30, 2024 and December 31, 2023, respectively   2,842       2,842  
    Surplus   120,874       120,392  
    Retained Earnings   124,174       107,361  
    Accumulated other comprehensive income (loss), net of taxes   (54,386 )     (64,108 )
    Treasury stock, at cost; 9,178 and 31,993 shares at September 30,      
      2024 and December 31, 2023, respectively   (410 )     (1,111 )
        TOTAL STOCKHOLDERS’ EQUITY   193,094       165,376  
               
        TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 2,519,099     $ 2,485,468  
               
    ORANGE COUNTY BANCORP, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (UNAUDITED)
    (Dollar Amounts in thousands except per share data)
          For Three Months Ended September 30,   Nine Months Ended September 30,
          2024   2023   2024   2023
    INTEREST INCOME              
      Interest and fees on loans $ 26,375   $ 24,682   $ 78,767   $ 70,398
      Interest on investment securities:              
        Taxable   2,645     3,150     8,976     9,570
        Tax exempt   573     564     1,722     1,721
      Interest on Federal funds sold and other   1,843     1,703     5,556     4,514
                       
        TOTAL INTEREST INCOME   31,436     30,099     95,021     86,203
                       
    INTEREST EXPENSE              
      Savings and NOW accounts   5,432     3,506     15,167     9,081
      Time deposits   1,213     1,954     5,741     3,893
      FHLB advances and borrowings   1,593     1,907     4,734     6,295
      Note payable   –     –     –     –
      Subordinated notes   230     231     691     692
        TOTAL INTEREST EXPENSE   8,468     7,598     26,333     19,961
                       
        NET INTEREST INCOME   22,968     22,501     68,688     66,242
                       
    Provision for credit losses   7,191     837     7,761     7,406
        NET INTEREST INCOME AFTER              
        PROVISION FOR CREDIT LOSSES   15,777     21,664     60,927     58,836
                       
    NONINTEREST INCOME              
      Service charges on deposit accounts   270     210     737     588
      Trust income   1,379     1,266     4,000     3,707
      Investment advisory income   1,741     1,333     4,966     3,819
      Investment securities gains(losses)   –     –     –     107
      Earnings on bank owned life insurance   39     243     551     725
      Other   745     168     1,413     730
        TOTAL NONINTEREST INCOME   4,174     3,220     11,667     9,676
                       
    NONINTEREST EXPENSE              
      Salaries   6,687     6,135     20,298     18,606
      Employee benefits   2,269     1,752     6,695     5,359
      Occupancy expense   1,222     1,180     3,547     3,614
      Professional fees   1,557     799     4,330     3,512
      Directors’ fees and expenses   584     295     781     682
      Computer software expense   1,526     1,233     4,191     3,714
      FDIC assessment   210     463     978     1,023
      Advertising expenses   364     364     1,166     1,074
      Advisor expenses related to trust income   30     30     95     89
      Telephone expenses   190     184     565     534
      Intangible amortization   71     71     214     214
      Other   1,237     1,084     3,884     3,644
        TOTAL NONINTEREST EXPENSE   15,947     13,590     46,744     42,065
                       
      Income before income taxes   4,004     11,294     25,850     26,447
                       
    Provision for income taxes   788     2,256     5,131     5,093
        NET INCOME $ 3,216   $ 9,038   $ 20,719   $ 21,354
                       
    Basic and diluted earnings per share $ 0.57   $ 1.61   $ 3.67   $ 3.79
                       
    Weighted average shares outstanding   5,653,904     5,629,642     5,643,591     5,628,036
                       
    ORANGE COUNTY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (UNAUDITED)
    (Dollar Amounts in thousands)
                           
      Three Months Ended September 30,
      2024   2023
      Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
    Assets:                      
    Loans Receivable (net of PPP) $ 1,759,989     $ 26,372     5.94 %   $ 1,697,745     $ 24,677   5.77 %
    PPP Loans   186       3     6.40 %     996       5   1.99 %
    Investment securities   463,347       3,252     2.78 %     495,803       3,466   2.77 %
    Due from banks   160,563       1,843     4.55 %     154,335       1,703   4.38 %
    Other   7,601       (34 )   -1.77 %     10,299       248   9.55 %
    Total interest earning assets   2,391,686       31,436     5.21 %     2,359,178       30,099   5.06 %
    Non-interest earning assets   94,476               96,894          
    Total assets $ 2,486,162             $ 2,456,072          
                           
    Liabilities and equity:                      
    Interest-bearing demand accounts $ 370,442     $ 425     0.46 %   $ 334,658     $ 332   0.39 %
    Money market accounts   695,516       4,083     2.33 %     632,300       2,551   1.60 %
    Savings accounts   256,934       924     1.43 %     242,627       623   1.02 %
    Certificates of deposit   116,817       1,213     4.12 %     176,369       1,954   4.40 %
    Total interest-bearing deposits   1,439,709       6,645     1.83 %     1,385,954       5,460   1.56 %
    FHLB Advances and other borrowings   127,197       1,593     4.97 %     140,560       1,907   5.38 %
    Subordinated notes   19,561       230     4.66 %     19,490       231   4.70 %
    Total interest bearing liabilities   1,586,467       8,468     2.12 %     1,546,004       7,598   1.95 %
    Non-interest bearing demand accounts   688,138               736,313          
    Other non-interest bearing liabilities   25,947               23,279          
    Total liabilities   2,300,552               2,305,596          
    Total shareholders’ equity   185,610               150,476          
    Total liabilities and shareholders’ equity $ 2,486,162             $ 2,456,072          
                           
    Net interest income     $ 22,968             $ 22,501    
    Interest rate spread 1         3.10 %           3.11 %
    Net interest margin 2         3.81 %           3.78 %
    Average interest earning assets to interest-bearing liabilities   150.8 %             152.6 %        
                           
    Notes:                      
    1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
    2 Net interest margin is the annualized net interest income divided by average interest-earning assets          
                           
    ORANGE COUNTY BANCORP, INC.
    NET INTEREST MARGIN ANALYSIS
    (UNAUDITED)
    (Dollar Amounts in thousands)
                           
      Nine Months Ended September 30,
      2024   2023
      Average Balance   Interest   Average Rate   Average Balance   Interest   Average Rate
    Assets:                      
    Loans Receivable (net of PPP) $ 1,742,193     $ 78,761   6.02 %   $ 1,668,967     $ 70,374   5.64 %
    PPP Loans   197       6   4.06 %     1,440       24   2.23 %
    Investment securities   470,701       10,048   2.84 %     514,011       10,575   2.75 %
    Due from banks   156,899       5,556   4.72 %     139,539       4,514   4.33 %
    Other   7,945       650   10.90 %     11,268       716   8.50 %
    Total interest earning assets   2,377,935       95,021   5.32 %     2,335,225       86,203   4.94 %
    Non-interest earning assets   96,047               95,597          
    Total assets $ 2,473,982             $ 2,430,822          
                           
    Liabilities and equity:                      
    Interest-bearing demand accounts $ 375,124     $ 1,348   0.48 %   $ 336,801     $ 875   0.35 %
    Money market accounts   660,795       11,233   2.26 %     623,039       6,471   1.39 %
    Savings accounts   249,013       2,586   1.38 %     251,588       1,735   0.92 %
    Certificates of deposit   170,079       5,741   4.50 %     147,750       3,893   3.52 %
    Total interest-bearing deposits   1,455,011       20,908   1.91 %     1,359,178       12,974   1.28 %
    FHLB Advances and other borrowings   123,880       4,734   5.09 %     164,434       6,295   5.12 %
    Subordinated notes   19,544       691   4.71 %     19,472       692   4.75 %
    Total interest bearing liabilities   1,598,435       26,333   2.19 %     1,543,084       19,961   1.73 %
    Non-interest bearing demand accounts   674,727               717,067          
    Other non-interest bearing liabilities   26,701               22,988          
    Total liabilities   2,299,863               2,283,139          
    Total shareholders’ equity   174,119               147,683          
    Total liabilities and shareholders’ equity $ 2,473,982             $ 2,430,822          
                           
    Net interest income     $ 68,688           $ 66,242    
    Interest rate spread 1         3.13 %           3.21 %
    Net interest margin 2         3.85 %           3.79 %
    Average interest earning assets to interest-bearing liabilities   148.8 %             151.3 %        
                           
    Notes:                      
    1 The Interest rate spread is the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities
    2  Net interest margin is the annualized net interest income divided by average interest-earning assets          
                           
    ORANGE COUNTY BANCORP, INC.
    SELECTED RATIOS AND OTHER DATA
    (UNAUDITED)
     
      Three Months Ended September 30,   Nine Months Ended September 30,
      2024   2023   2024   2023
    Performance Ratios:              
    Return on average assets (1) 0.52 %   1.47 %   1.12 %   1.17 %
    Return on average equity (1) 6.93 %   24.03 %   15.87 %   19.28 %
    Interest rate spread (2) 3.10 %   3.11 %   3.13 %   3.21 %
    Net interest margin (3) 3.81 %   3.78 %   3.85 %   3.79 %
    Dividend payout ratio (4) 40.44 %   14.33 %   18.79 %   18.18 %
    Non-interest income to average total assets 0.67 %   0.52 %   0.63 %   0.53 %
    Non-interest expenses to average total assets 2.57 %   2.21 %   2.52 %   2.31 %
    Average interest-earning assets to average interest-bearing liabilities 150.76 %   152.60 %   148.77 %   151.33 %
                   
      At   At        
      September 30, 2024   December 31, 2023        
    Asset Quality Ratios:              
    Non-performing assets to total assets 0.44 %   0.18 %        
    Non-performing loans to total loans 0.62 %   0.25 %        
    Allowance for credit losses to non-performing loans 277.76 %   568.83 %        
    Allowance for credit losses to total loans 1.73 %   1.44 %        
                   
    Capital Ratios (5):              
    Total capital (to risk-weighted assets) 14.89 %   14.16 %        
    Tier 1 capital (to risk-weighted assets) 13.64 %   12.91 %        
    Common equity tier 1 capital (to risk-weighted assets) 13.64 %   12.91 %        
    Tier 1 capital (to average assets) 10.06 %   9.42 %        
                   
    Notes:              
    (1) Annualized for the three and nine month periods ended September 30, 2024 and 2023, respectively.
    (2) Represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the periods.
    (3) The net interest margin represents net interest income as a percent of average interest-earning assets for the periods.
    (4) The dividend payout ratio represents dividends paid per share divided by net income per share.
    (5) Ratios are for the Bank only.
                   
    ORANGE COUNTY BANCORP, INC.
    SELECTED OPERATING DATA
    (UNAUDITED)
    (Dollar Amounts in thousands except per share data)
      Three Months Ended September 30,   Nine Months Ended September 30,
      2024   2023   2024   2023
    Interest income $ 31,436   $ 30,099   $ 95,021   $ 86,203
    Interest expense   8,468     7,598     26,333     19,961
    Net interest income   22,968     22,501     68,688     66,242
    Provision for credit losses   7,191     837     7,761     7,406
    Net interest income after provision for credit losses   15,777     21,664     60,927     58,836
    Noninterest income   4,174     3,220     11,667     9,676
    Noninterest expenses   15,947     13,590     46,744     42,065
    Income before income taxes   4,004     11,294     25,850     26,447
    Provision for income taxes   788     2,256     5,131     5,093
    Net income $ 3,216   $ 9,038   $ 20,719   $ 21,354
                   
    Basic and diluted earnings per share $ 0.57   $ 1.61   $ 3.67   $ 3.79
    Weighted average common shares outstanding   5,653,904     5,629,642     5,643,591     5,628,036
                   
      At   At        
      September 30, 2024   December 31, 2023        
    Book value per share $ 34.03   $ 29.26        
    Net tangible book value per share (1) $ 32.93   $ 28.12        
    Outstanding common shares   5,674,126     5,651,311        
                   
    Notes:              
    (1)      Net tangible book value represents the amount of total tangible assets reduced by our total liabilities. Tangible assets are calculated by reducing total assets, as defined by GAAP, by $5,359 in goodwill and $892, and $1,107 in other intangible assets for September 30, 2024 and December 31, 2023, respectively.
                   
    ORANGE COUNTY BANCORP, INC.
    LOAN COMPOSITION
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Amount   Percent
    Commercial and industrial (a) $ 251,484   14.00 %   $ 273,562   15.66 %
    Commercial real estate   1,334,580   74.30 %     1,259,356   72.08 %
    Commercial real estate construction   78,227   4.36 %     85,725   4.91 %
    Residential real estate   74,462   4.15 %     78,321   4.48 %
    Home equity   16,064   0.89 %     13,546   0.78 %
    Consumer   41,277   2.30 %     36,552   2.09 %
    Total loans   1,796,094   100.00 %     1,747,062   100.00 %
    Allowance for loan losses   31,023         25,182    
    Total loans, net $ 1,765,071       $ 1,721,880    
                   
    (a) – Includes PPP loans of: $ 181       $ 215    
                   
    ORANGE COUNTY BANCORP, INC.
    DEPOSITS BY ACCOUNT TYPE
    (UNAUDITED)
    (Dollar Amounts in thousands)
      At September 30, 2024   At December 31, 2023
      Amount   Percent   Average Rate   Amount   Percent   Average Rate
    Noninterest-bearing demand accounts $ 690,419   32.26 %   0.00 %   $ 699,203   34.30 %   0.00 %
    Interest bearing demand accounts   342,306   16.00 %   0.49 %     304,892   14.95 %   0.49 %
    Money market accounts   707,065   33.04 %   2.27 %     584,976   28.69 %   2.04 %
    Savings accounts   258,302   12.07 %   1.39 %     228,161   11.19 %   1.19 %
    Certificates of Deposit   141,931   6.63 %   4.06 %     221,517   10.87 %   4.57 %
    Total $ 2,140,023   100.00 %   1.27 %   $ 2,038,749   100.00 %   1.29 %
                           
    ORANGE COUNTY BANCORP, INC.
    NON-PERFORMING ASSETS
    (UNAUDITED)
      (Dollar Amounts in thousands)
           
      September 30, 2024   December 31, 2023
           
    Non-accrual loans:      
    Commercial and industrial $ 199     $ 556  
    Commercial real estate   10,725       2,692  
    Commercial real estate construction   –       –  
    Residential real estate   8       1,179  
    Home equity   –       –  
    Consumer   –       –  
    Total non-accrual loans   10,932       4,427  
    Accruing loans 90 days or more past due:      
    Commercial and industrial   237       –  
    Commercial real estate   –       –  
    Commercial real estate construction   –       –  
    Residential real estate   –       –  
    Home equity   –       –  
    Consumer   –       –  
    Total loans 90 days or more past due   237       –  
    Total non-performing loans   11,169       4,427  
    Other real estate owned   –       –  
    Other non-performing assets   –       –  
    Total non-performing assets $ 11,169     $ 4,427  
           
    Ratios:      
    Total non-performing loans to total loans   0.62 %     0.25 %
    Total non-performing loans to total assets   0.44 %     0.18 %
    Total non-performing assets to total assets   0.44 %     0.18 %
           
    Notes:      
    1 – Includes non-accruing TDRs: $ –     $ 2,391  
           

    The MIL Network –

  • MIL-OSI: Employers Holdings, Inc. Reports Third Quarter 2024 Results and Declares Regular Quarterly Dividend of $0.30 per Share

    Source: GlobeNewswire (MIL-OSI)

    RENO, Nev., Oct. 30, 2024 (GLOBE NEWSWIRE) — Employers Holdings, Inc. (the “Company”) (NYSE:EIG), a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on small and mid-sized businesses engaged in low-to-medium hazard industries, today reported financial results for its third quarter ended September 30, 2024.

    Financial Highlights:
    (All comparisons vs. the third quarter of 2023).

    • Net income per diluted share increased by 124%, from $0.54 to $1.21,
    • Adjusted net income per diluted share increased 19%, from $0.68 to $0.81,
    • Gross premiums written decreased 8%, from $196.2 million to $181.2 million,
    • Net premiums earned increased 1%, from $184.6 million to $186.6 million,
    • Underwriting and general and administrative expense ratio of 23.2%, versus 23.6%,
    • GAAP combined ratio of 100.4% (101.2% excluding LPT), versus 100.3% (101.3% excluding LPT),
    • Net investment income increased 3%, from $25.9 million to $26.6 million, and
    • Record number of ending policies in-force of 129,879.

    Management Commentary

    Chief Executive Officer Katherine Antonello commented: “Higher earned premiums, strong net investment income and continued net investment gains drove year-over-year increases in revenue of 10% and 6% for the third quarter and the first nine months of 2024. We also ended the period with yet another record number of policies in-force, which were up 3% year-over-year.

    During the quarter we grew our new and renewal premiums, but reductions in final audit premiums and endorsements more than offset that growth.

    Our current accident year loss and LAE ratio was 63.9%, slightly above the loss and LAE ratio we maintained throughout 2023 and consistent with that of 2022. As was the case in the third quarter of 2023, we did not recognize any prior year loss reserve development on our voluntary business because a full actuarial study was not performed. We will evaluate our prior year reserves in more detail at year-end when we routinely perform a full reserve study.

    Our commission expense ratio was 14.1%, versus 14.5% a year ago. The reduction in this ratio was largely attributable to a decrease in anticipated 2024 agency incentives, which are specific to individual contracts and vary with agency targets. Our underwriting and general and administrative expense ratio was 23.2%, down from 23.6% a year ago. The reduction in this ratio was primarily the result of the Cerity integration plan we executed in the fourth quarter of 2023.

    Our resulting combined ratio excluding LPT was 101.2% for the third quarter, versus 101.3%, a year ago.

    Our net investment income was $26.6 million, up 3% from a year ago. When considering the $1.0 million of interest expense we incurred in the third quarter of 2023 through our Federal Home Loan Bank leveraged investment strategy, which we unwound during the fourth quarter of 2023, our net investment income was actually up 7% year-over-year.

    Lastly, our strong operating results, coupled with our proactive and opportunistic management of our investment portfolio and our capital position, contributed to year-over year increases of 27% and 24% in our book value per share and book value per share including the deferred gain, respectively. As a result, our balance sheet is strong, our underwriting capital is abundant and our confidence in the Company’s future operations remains high.”

    Summary of Third Quarter 2024 Results

    (All comparisons vs. the third quarter of 2023, unless otherwise noted).

    Gross premiums written were $181.2 million, a decrease of 8%. The decrease was due to higher new and renewal business writings being more than offset by lower final audit premiums and endorsements. Net premiums earned were $186.6 million, an increase of 1%.

    Losses and loss adjustment expenses were $117.7 million, an increase of 2%. The increase was primarily due to higher earned premiums and a slightly higher current accident year loss and loss adjustment expense estimate. The Company’s loss and loss adjustment expense ratio was 63.1% (63.9% excluding LPT), versus 62.2% (63.2% excluding LPT).

    Commission expenses were $26.4 million, a decrease of 1%. The Company’s commission expense ratio was 14.1%, versus 14.5% a year ago.

    Underwriting and general and administrative expenses were $43.2 million, a decrease of 1%. The Company’s underwriting and general and administrative expense ratio was 23.2%, versus 23.6% a year ago. The decrease primarily related to lower professional fees and information technology expenses, partially offset by higher bad debt expense.

    Net investment income was $26.6 million, an increase of 2.7%. The increase was primarily due to higher yields on our fixed maturity securities.

    Net realized and unrealized gains (losses) on investments reflected on the income statement were $10.9 million, versus $(7.1) million.

    Interest and financing expenses were less than $0.1 million, versus $1.0 million. The decrease resulted from the unwinding of our former FHLB leveraged investment strategy.

    Income tax expense was $6.4 million (17.4% effective rate), versus $3.4 million (19.5% effective rate). The effective rates during each of the periods included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, deferred gain amortization and related adjustments and tax credits utilized.

    The Company’s book value per share including the deferred gain of $47.99 increased 24.0% year-over-year and 7.5% during the third quarter of 2024, computed after considering dividends declared. During the third quarter this measure was favorably impacted by $52.2 million of after-tax unrealized gains arising from fixed maturity securities (which are reflected on the balance sheet) and $10.1 million of net after tax unrealized gains arising from equity securities and other investments (which are reflected on the income statement). The Company’s adjusted book value per share of $49.83 increased by 11.5% year-over-year and 2.5% during the third quarter of 2024, computed after considering dividends declared. During the third quarter this measure was favorably impacted by the net after tax unrealized gains arising from equity securities and other investments previously described.

    Share Repurchases and Fourth Quarter 2024 Dividend Declaration

    During the third quarter of 2024, the Company repurchased 163,221 shares of its common stock at an average price of $45.27 per share. During the period from October 1, 2024 through October 29, 2024, the Company repurchased a further 20,602 shares of its common stock at an average price of $47.45 per share. The Company currently has a remaining share repurchase authorization of $38.6 million.

    On October 30, 2024, the Company’s Board of Directors declared a regular quarterly dividend of $0.30. The dividend is payable on November 27, 2024 to stockholders of record as of November 13, 2024.

    Earnings Conference Call and Webcast

    The Company will host a conference call on Thursday, October 31, 2024 at 11:00 a.m. Eastern Daylight Time / 8:00 a.m. Pacific Daylight Time.

    To participate in the live conference call, you must first register here. Once registered you will receive dial-in numbers and a unique PIN number.

    The webcast will be accessible on the Company’s website at www.employers.com through the “Investors” link.

    Reconciliation of Non-GAAP Financial Measures to GAAP

    The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and available on our website.

    Within this earnings release we present various financial measures, some of which are “non-GAAP financial measures” as defined in Regulation G pursuant to Section 401 of the Sarbanes – Oxley Act of 2002. A description of these non-GAAP financial measures, as well as a reconciliation of such non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these non-GAAP measures are important to the Company’s investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

    Forward-Looking Statements

    In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company’s future performance, economic or market conditions, including current or future levels of inflation, changes in interest rates, labor market expectations, catastrophic events or geo-political conditions, legislative or regulatory actions or court decisions, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue,” or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’s future performance. Factors that could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company’s public filings with the Securities and Exchange Commission (SEC), including the risks detailed in the Company’s Quarterly Reports on Form 10-Q and the Company’s Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

    Filings with the SEC

    The Company’s filings with the SEC and its quarterly investor presentations can be accessed through the “Investors” link on the Company’s website, www.employers.com. The Company’s filings with the SEC can also be accessed through the SEC’s EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).

    About Employers Holdings, Inc.

    Employers Holdings, Inc. (NYSE: EIG), is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services (collectively “EMPLOYERS®”) focused on small and mid-sized businesses engaged in low-to-medium hazard industries. EMPLOYERS leverages over a century of experience to deliver comprehensive coverage solutions that meet the unique needs of its customers. Drawing from its long history and extensive knowledge, EMPLOYERS empowers businesses by protecting their most valuable asset – their employees – through exceptional claims management, loss control, and risk management services, creating safer work environments.

    EMPLOYERS is also proud to offer Cerity®, which is focused on providing digital-first, direct-to-consumer workers’ compensation insurance solutions with fast, and affordable coverage options through a user-friendly online platform.

    EMPLOYERS operates throughout the United States, apart from four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by A.M. Best. Not all companies do business in all jurisdictions. EIG Services, Inc., and Cerity Services, Inc., are subsidiaries of Employers Holdings, Inc. EMPLOYERS® is a registered trademark of EIG Services, Inc., and Cerity® is a registered trademark of Cerity Services, Inc. For more information, please visit www.employers.com and www.cerity.com.

    Contact Information

    Mike Paquette (775) 327-2562 or mpaquette@employers.com

     
    EMPLOYERS HOLDINGS, INC.
    Table of Contents
     
      Page      
             
      1   Consolidated Financial Highlights  
             
      2   Summary Consolidated Balance Sheets  
             
      3   Summary Consolidated Income Statements  
             
      4   Return on Equity  
             
      5   Combined Ratios  
             
      6   Roll-forward of Unpaid Losses and LAE  
             
      7   Consolidated Investment Portfolio  
             
      8   Book Value Per Share  
             
      9   Earnings Per Share  
             
      10   Non-GAAP Financial Measures  
             
       
    EMPLOYERS HOLDINGS, INC.
    Consolidated Financial Highlights (unaudited)
    $ in millions, except per share amounts    		  
       
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023     % change     2024       2023     % change
    Selected financial highlights:                        
    Gross premiums written   $ 181.2     $ 196.2       (8 )%   $ 599.9     $ 589.5       2 %
    Net premiums written     179.6       194.5       (8 )     594.8       584.2       2  
    Net premiums earned     186.6       184.6       1       559.3       534.4       5  
    Net investment income     26.6       25.9       3       80.3       80.3       —  
    Net income excluding LPT(1)     28.8       12.1       138       84.5       66.6       27  
    Adjusted net income(1)     20.2       17.7       14       65.1       65.6       (1 )
    Net Income before income taxes     36.7       17.4       111       112.1       90.3       24  
    Net Income     30.3       14.0       116       90.3       72.5       25  
    Comprehensive income (loss)     84.0       (12.1 )     794       131.0       54.8       139  
    Total assets                 3,617.3       3,527.0       3  
    Stockholders’ equity                 1,093.4       919.0       19  
    Stockholders’ equity including the Deferred Gain(2)                 1,187.2       1,019.2       16  
    Adjusted stockholders’ equity(2)                 1,232.5       1,175.8       5  
    Annualized adjusted return on stockholders’ equity(3)     6.6 %     6.0 %     10 %     7.1 %     7.4 %     (4) %
    Amounts per share:                        
    Cash dividends declared per share   $ 0.30     $ 0.28       7 %   $ 0.88     $ 0.82       7 %
    Earnings per diluted share(4)     1.21       0.54       124       3.57       2.71       32  
    Earnings per diluted share excluding LPT(4)     1.15       0.46       150       3.34       2.49       34  
    Adjusted earnings per diluted share(4)     0.81       0.68       19       2.57       2.45       5  
    Book value per share(2)                 44.20       35.73       24  
    Book value per share including the Deferred Gain(2)                 47.99       39.63       21  
    Adjusted book value per share(2)                 49.83       45.72       9  
    Combined ratio excluding LPT:(5):                        
    Loss and loss adjustment expense ratio:                        
    Current Year     63.9 %     63.3 %         64.0 %     63.4 %    
    Prior Year     —       (0.1 )         (1.7 )     (3.8 )    
    Loss and loss adjustment expense ratio     63.9 %     63.2 %         62.3 %     59.6 %    
    Commission expense ratio     14.1 %     14.5 %         14.1 %     13.8 %    
    Underwriting and general and administrative expense ratio     23.2 %     23.6 %         23.3 %     25.0 %    
    Combined ratio excluding LPT     101.2 %     101.3 %         99.7 %     98.4 %    
                             
                             
    (1) See Page 3 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (2) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (3) See Page 4 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (4) See Page 9 for description and calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
    (5) See Pages 5 for details and Page 10 for information regarding our use of Non-GAAP Financial Measures.  
     
    EMPLOYERS HOLDINGS, INC.
    Summary Consolidated Balance Sheets (unaudited)
    $ in millions, except per share amounts
     
        September 30,
    2024    		   December 31,
    2023
    ASSETS        
    Investments, cash and cash equivalents   $ 2,601.5     $ 2,504.7  
    Accrued investment income     15.8       16.3  
    Premiums receivable, net     378.8       359.4  
    Reinsurance recoverable, net of allowance, on paid and unpaid losses and LAE     418.8       433.8  
    Deferred policy acquisition costs     60.9       55.6  
    Deferred income tax asset, net     26.2       43.4  
    Contingent commission receivable—LPT Agreement     —       14.2  
    Other assets     115.3       123.0  
    Total assets   $ 3,617.3     $ 3,550.4  
             
    LIABILITIES        
    Unpaid losses and LAE   $ 1,836.5     $ 1,884.5  
    Unearned premiums     412.5       379.7  
    Commissions and premium taxes payable     65.4       66.0  
    Deferred Gain     93.8       99.2  
    Other liabilities     115.7       107.1  
    Total liabilities   $ 2,523.9     $ 2,536.5  
             
    STOCKHOLDERS’ EQUITY        
    Common stock and additional paid-in capital   $ 423.1     $ 420.4  
    Retained earnings     1,452.1       1,384.3  
    Accumulated other comprehensive loss     (45.3 )     (86.0 )
    Treasury stock, at cost     (736.5 )     (704.8 )
    Total stockholders’ equity     1,093.4       1,013.9  
    Total liabilities and stockholders’ equity   $ 3,617.3     $ 3,550.4  
             
    Stockholders’ equity including the Deferred Gain (1)   $ 1,187.2     $ 1,113.1  
    Adjusted stockholders’ equity (1)     1,232.5       1,199.1  
    Book value per share (1)   $ 44.20     $ 39.96  
    Book value per share including the Deferred Gain(1)     47.99       43.88  
    Adjusted book value per share (1)     49.83       47.26  
             
    (1) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Summary Consolidated Income Statements (unaudited)
    $ in millions
     
      Three Months Ended   Nine Months Ended
      September 30,   September 30,
        2024       2023       2024       2023  
    Revenues:      
    Net premiums earned $ 186.6     $ 184.6     $ 559.3     $ 534.4  
    Net investment income   26.6       25.9       80.3       80.3  
    Net realized and unrealized gains (losses) on investments(1)   10.9       (7.1 )     24.5       10.7  
    Other income (loss)   (0.1 )     0.1       —       (0.2 )
    Total revenues   224.0       203.5       664.1       625.2  
    Expenses:              
    Losses and LAE incurred   (117.7 )     (114.9 )     (343.0 )     (312.8 )
    Commission expense   (26.4 )     (26.7 )     (78.7 )     (73.8 )
    Underwriting and general and administrative expenses   (43.2 )     (43.5 )     (130.2 )     (133.7 )
    Interest and financing expenses   —       (1.0 )     (0.1 )     (5.2 )
    Other expenses   —       —       —       (9.4 )
    Total expenses   (187.3 )     (186.1 )     (552.0 )     (534.9 )
    Net income before income taxes   36.7       17.4       112.1       90.3  
    Income tax expense   (6.4 )     (3.4 )     (21.8 )     (17.8 )
    Net Income   30.3       14.0       90.3       72.5  
    Unrealized AFS investment gains (losses) arising during the period, net of tax(2)   52.2       (27.0 )     35.7       (20.0 )
    Reclassification adjustment for net realized AFS investment losses in net income, net of tax(2)   1.5       0.9       5.0       2.3  
    Total comprehensive income (loss) $ 84.0     $ (12.1 )   $ 131.0     $ 54.8  
    Net Income $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Amortization of the Deferred Gain – losses   (1.5 )     (1.5 )     (4.6 )     (4.7 )
    Amortization of the Deferred Gain – contingent commission   —       (0.4 )     (0.8 )     (1.2 )
    LPT contingent commission adjustments   —       —       (0.4 )     —  
    Net income excluding LPT Agreement (3)   28.8       12.1       84.5       66.6  
    Net realized and unrealized (gains) losses on investments   (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges   —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income   2.3       (1.5 )     5.1       0.3  
    Adjusted net income $ 20.2     $ 17.7     $ 65.1     $ 65.6  
                   
    (1) Includes net realized and unrealized gains (losses) on equity securities and other investments of $12.8 million and $(5.9) million for the three months ended September 30, 2024 and 2023, respectively, and $30.8 million and $13.6 million for the nine months ended September 30, 2024 and 2023, respectively.
    (2) AFS = Available for Sale securities.
    (3) See Page 10 regarding our use of Non-GAAP Financial Measures.              
     
    EMPLOYERS HOLDINGS, INC.
    Return on Equity (unaudited)
    $ in millions
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
                     
    Net income A $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Impact of the LPT Agreement     (1.5 )     (1.9 )     (5.8 )     (5.9 )
    Net realized and unrealized (gains) losses on investments     (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges     —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income     2.3       (1.5 )     5.1       0.3  
    Adjusted net income (1) B   20.2       17.7       65.1       65.6  
                     
    Stockholders’ equity – end of period   $ 1,093.4     $ 919.0     $ 1,093.4     $ 919.0  
    Stockholders’ equity – beginning of period     1,022.9       951.7       1,013.9       944.2  
    Average stockholders’ equity C   1,058.2       935.4       1,053.7       931.6  
                     
    Stockholders’ equity – end of period   $ 1,093.4     $ 919.0     $ 1,093.4     $ 919.0  
    Deferred Gain – end of period     93.8       100.2       93.8       100.2  
    Accumulated other comprehensive loss – end of period     57.3       198.2       57.3       198.2  
    Income taxes related to accumulated other comprehensive loss – end of period     (12.0 )     (41.6 )     (12.0 )     (41.6 )
    Adjusted stockholders’ equity – end of period     1,232.5       1,175.8       1,232.5       1,175.8  
    Adjusted stockholders’ equity – beginning of period     1,217.2       1,184.3       1,199.1       1,189.2  
    Average adjusted stockholders’ equity (1) D   1,224.9       1,180.1       1,215.8       1,182.5  
                     
    Return on stockholders’ equity A / C   2.9 %     1.5 %     8.6 %     7.8 %
    Annualized return on stockholders’ equity     11.5       6.0       11.4       10.4  
                     
    Adjusted return on stockholders’ equity (1) B / D   1.6 %     1.5 %     5.4 %     5.5 %
    Annualized adjusted return on stockholders’ equity (1)     6.6       6.0       7.1       7.4  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Combined Ratios (unaudited)
    $ in millions, except per share amounts
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
                     
    Net premiums earned A $ 186.6     $ 184.6     $ 559.3     $ 534.4  
    Losses and LAE incurred B   117.7       114.9       343.0       312.8  
    Amortization of deferred reinsurance gain – losses     1.5       1.5       4.6       4.7  
    Amortization of deferred reinsurance gain – contingent commission     —       0.4       0.8       1.2  
    LPT contingent commission adjustments     —       —       0.4       —  
    Losses and LAE excluding LPT(1) C $ 119.2     $ 116.8     $ 348.8     $ 318.7  
    Prior year loss reserve development     (0.1 )     (0.1 )     (9.3 )     (20.0 )
    Losses and LAE excluding LPT – current accident year D $ 119.3     $ 116.9     $ 358.1     $ 338.7  
    Commission expense E $ 26.4     $ 26.7     $ 78.7     $ 73.8  
    Underwriting and general and administrative expense F $ 43.2     $ 43.5     $ 130.2     $ 133.7  
    GAAP combined ratio:                
    Loss and LAE ratio B/A   63.1 %     62.2 %     61.3 %     58.5 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expense ratio F/A   23.2       23.6       23.3       25.0  
    GAAP combined ratio     100.4 %     100.3 %     98.7 %     97.3 %
    Combined ratio excluding LPT:(1)                
    Loss and LAE ratio excluding LPT C/A   63.9 %     63.2 %     62.3 %     59.6 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expense ratio F/A   23.2       23.6       23.3       25.0  
    Combined ratio excluding LPT     101.2 %     101.3 %     99.7 %     98.4 %
    Combined ratio excluding LPT: current accident year:(1)                
    Loss and LAE ratio excluding LPT D/A   63.9 %     63.3 %     64.0 %     63.4 %
    Commission expense ratio E/A   14.1       14.5       14.1       13.8  
    Underwriting and general and administrative expenses ratio F/A   23.2       23.6       23.3       25.0  
    Combined ratio excluding LPT: current accident year     101.2 %     101.4 %     101.4 %     102.2 %
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     
    EMPLOYERS HOLDINGS, INC.
    Roll-forward of Unpaid Losses and LAE (unaudited)
    $ in millions
     
      Three Months Ended   Nine Months Ended
      September 30,   September 30,
        2024       2023       2024       2023  
               
    Unpaid losses and LAE at beginning of period $ 1,850.9     $ 1,927.2     $ 1,884.5     $ 1,960.7  
    Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE   418.3       436.2       428.4       445.4  
    Net unpaid losses and LAE at beginning of period   1,432.6       1,491.0       1,456.1       1,515.3  
    Losses and LAE incurred:              
    Current year losses   119.3       116.9       358.0       338.7  
    Prior year losses on voluntary business   —       —       (9.3 )     (20.0 )
    Prior year losses on involuntary business   (0.1 )     (0.1 )     —       —  
    Total losses incurred   119.2       116.8       348.7       318.7  
    Losses and LAE paid:              
    Current year losses   38.3       32.0       69.2       64.1  
    Prior year losses   90.1       89.0       312.2       283.1  
    Total paid losses   128.4       121.0       381.4       347.2  
    Net unpaid losses and LAE at end of period   1,423.4       1,486.8       1,423.4       1,486.8  
    Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE   413.1       426.6       413.1       426.6  
    Unpaid losses and LAE at end of period $ 1,836.5     $ 1,913.4     $ 1,836.5     $ 1,913.4  
                                   
    Total losses and LAE shown in the above table exclude amortization of the Deferred Gain and LPT contingent commission adjustments, which totaled $1.5 million and $1.9 million for the three months ended September 30, 2024 and 2023, respectively, and $5.8 million and $5.9 million for the nine months ended September 30, 2024 and 2023, respectively.
                                   
     
    EMPLOYERS HOLDINGS, INC.
    Consolidated Investment Portfolio (unaudited)
    $ in millions
     
        September 30, 2024   December 31, 2023
    Investment Positions:   Cost or Amortized
    Cost (1)    		   Net Unrealized Gain (Loss)   Fair Value   %   Fair Value   %
    Fixed maturity securities   $ 2,124.6   $ (57.4 )   $ 2,065.8   79 %   $ 1,936.3   77 %
    Equity securities     150.4     111.5       261.9   10       217.2   9  
    Short-term investments     30.6     —       30.6   1       33.1   1  
    Other invested assets     88.8     10.9       99.7   4       91.5   4  
    Cash and cash equivalents     143.3     —       143.3   6       226.4   9  
    Restricted cash and cash equivalents     0.2     —       0.2   —       0.2   —  
    Total investments and cash   $ 2,537.9   $ 65.0     $ 2,601.5   100 %   $ 2,504.7   100 %
                             
    Breakout of Fixed Maturity Securities:                        
    U.S. Treasuries and agencies   $ 62.4   $ (0.3 )   $ 62.1   3 %   $ 60.5   3 %
    States and municipalities     181.2     1.8       183.0   9       210.2   11  
    Corporate securities     930.9     (24.6 )     905.7   44       895.8   46  
    Mortgage-backed securities     552.8     (32.4 )     520.1   25       426.0   22  
    Asset-backed securities     209.5     0.6       210.1   10       128.0   7  
    Collateralized loan obligations     53.3     (0.2 )     53.1   3       91.5   5  
    Bank loans and other     134.5     (2.3 )     131.7   6       124.3   6  
    Total fixed maturity securities   $ 2,124.6   $ (57.4 )   $ 2,065.8   100 %   $ 1,936.3   100 %
    Weighted average book yield     4.4%         4.3%  
    Average credit quality (S&P)     A+         A  
    Duration     4.2         4.5  
    (1) Amortized cost excludes allowance for current expected credit losses of $1.4 million.              
     
    EMPLOYERS HOLDINGS, INC.
    Book Value Per Share (unaudited)
    $ in millions, except per share amounts
     
        September 30,
    2024    		   June 30,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Numerators:                
    Stockholders’ equity A $ 1,093.4     $ 1,022.9     $ 1,013.9     $ 919.0  
    Plus: Deferred Gain     93.8       95.3       99.2       100.2  
    Stockholders’ equity including the Deferred Gain (1) B   1,187.2       1,118.2       1,113.1       1,019.2  
    Accumulated other comprehensive loss     57.3       125.3       108.9       198.2  
    Income taxes related to accumulated other comprehensive loss     (12.0 )     (26.3 )     (22.9 )     (41.6 )
    Adjusted stockholders’ equity (1) C $ 1,232.5     $ 1,217.2     $ 1,199.1     $ 1,175.8  
                     
    Denominator (shares outstanding) D   24,736,533       24,896,116       25,369,753       25,719,074  
                     
    Book value per share (1) A / D $ 44.20     $ 41.09     $ 39.96     $ 35.73  
    Book value per share including the Deferred Gain(1) B / D   47.99       44.91       43.88       39.63  
    Adjusted book value per share (1) C / D   49.83       48.89       47.26       45.72  
                     
    Year-over-year change in: (2)                
    Book value per share     27.0 %     15.7 %     18.1 %     12.6 %
    Book value per share including the Deferred Gain     24.0       14.0       16.3       11.1  
    Adjusted book value per share     11.5       10.2       10.5       10.2  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
    (2) Reflects the twelve month change in book value per share after taking into account dividends declared of $1.16, $1.14, $1.10 and $2.33 for the twelve month periods ended September 30, 2024, June 30, 2024, December 31, 2023, and September 30, 2023, respectively.
     
    EMPLOYERS HOLDINGS, INC.
    Earnings Per Share (unaudited)
    $ in millions, except per share amounts
     
        Three Months Ended   Nine Months Ended
        September 30,   September 30,
          2024       2023       2024       2023  
    Numerators:                
    Net income A $ 30.3     $ 14.0     $ 90.3     $ 72.5  
    Impact of the LPT Agreement     (1.5 )     (1.9 )     (5.8 )     (5.9 )
    Net income excluding LPT (1) B   28.8       12.1       84.5       66.6  
    Net realized and unrealized (gains) losses on investments     (10.9 )     7.1       (24.5 )     (10.7 )
    Lease termination and asset impairment charges     —       —       —       9.4  
    Income tax expense (benefit) related to items excluded from Net income     2.3       (1.5 )     5.1       0.3  
    Adjusted net income (1) C $ 20.2     $ 17.7     $ 65.1     $ 65.6  
                     
    Denominators:                
    Average common shares outstanding (basic) D   24,858,159       25,981,984       25,159,753       26,612,443  
    Average common shares outstanding (diluted) E   24,982,463       26,118,280       25,293,020       26,767,056  
                     
    Earnings per share:                
    Basic A / D $ 1.22     $ 0.54     $ 3.59     $ 2.72  
    Diluted A / E   1.21       0.54       3.57       2.71  
                     
    Earnings per share excluding LPT: (1)                
    Basic B / D $ 1.16     $ 0.47     $ 3.36     $ 2.50  
    Diluted B / E   1.15       0.46       3.34       2.49  
                     
    Adjusted earnings per share: (1)                
    Basic C / D $ 0.81     $ 0.68     $ 2.59     $ 2.47  
    Diluted C / E   0.81       0.68       2.57       2.45  
                     
    (1) See Page 10 for information regarding our use of Non-GAAP Financial Measures.
     

    Non-GAAP Financial Measures

    Within this earnings release we present the following measures, each of which are “non-GAAP financial measures.” A reconciliation of these measures to the Company’s most directly comparable GAAP financial measures is included herein. Management believes that these non-GAAP measures are important to the Company’s investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

    The LPT Agreement is a non-recurring transaction that no longer provides any ongoing cash benefits to the Company. Management believes that providing non-GAAP measures that exclude the effects of the LPT Agreement (amortization of deferred reinsurance gain, adjustments to LPT Agreement ceded reserves and adjustments to the contingent commission receivable) is useful in providing investors, analysts and other interested parties a meaningful understanding of the Company’s ongoing underwriting performance.

    Deferred reinsurance gain (Deferred Gain) reflects the unamortized gain from the LPT Agreement. This gain has been deferred and is being amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries, except for the contingent profit commission, which was amortized through June 30, 2024, the date of its final settlement. Amortization is reflected in losses and LAE incurred.

    Adjusted net income (see Page 3 for calculations) is net income excluding the effects of the LPT Agreement, and net realized and unrealized gains and losses on investments (net of tax), and any miscellaneous non-recurring transactions (net of tax). Management believes that providing this non-GAAP measures is helpful to investors, analysts and other interested parties in identifying trends in the Company’s operating performance because such items have limited significance to its ongoing operations or can be impacted by both discretionary and other economic factors and may not represent operating trends.

    Stockholders’ equity including the Deferred Gain (see Page 8 for calculations) is stockholders’ equity including the Deferred Gain. Management believes that providing this non-GAAP measure is useful in providing investors, analysts and other interested parties a meaningful measure of the Company’s total underwriting capital.

    Adjusted stockholders’ equity (see Page 8 for calculations) is stockholders’ equity including the Deferred Gain, less accumulated other comprehensive income (net of tax). Management believes that providing this non-GAAP measure is useful to investors, analysts and other interested parties since it serves as the denominator to the Company’s adjusted return on stockholders’ equity metric.

    Return on stockholders’ equity and Adjusted return on stockholders’ equity (see Page 4 for calculations). Management believes that these profitability measures are widely used by our investors, analysts and other interested parties.

    Book value per share, Book value per share including the Deferred Gain, and Adjusted book value per share (see Page 8 for calculations). Management believes that these valuation measures are widely used by our investors, analysts and other interested parties.

    Net income excluding LPT (see Page 3 for calculations). Management believes that these performance and underwriting measures are widely used by our investors, analysts and other interested parties.

    The MIL Network –

  • MIL-OSI: National Fuel Gas Company Continues Peer Leading Sustainability Initiatives Through EO100TM and MiQ Programs

    Source: GlobeNewswire (MIL-OSI)

    WILLIAMSVILLE, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — National Fuel Gas Midstream Company, LLC (Midstream), the Gathering segment of National Fuel Gas Company (NYSE: NFG) (National Fuel or the Company), has been re-verified under Equitable Origin’s EO100™ Standard for Responsible Energy Development. The re-verification independently confirms that Midstream continues to adhere to the performance obligations earned under Midstream’s initial EO100™ certification, achieved in 2023, while also verifying Midstream’s commitment to the continuous improvement plan established upon initial certification. During the re-verification process completed in October 2024, Midstream was awarded an “A-” grade, with Midstream recognized as the first entity in the EO100™ framework to improve two grades following initial certification. 100% of Midstream’s natural gas gathering system assets were subject to a series of rigorous performance targets that fall under the five principles of the EO100™ Standard, including corporate governance and ethics; social impacts, human rights and community engagement; Indigenous Peoples’ rights; occupational health, safety and fair labor standards; and environmental impacts, biodiversity and climate change. Midstream was the first gathering or midstream company and second National Fuel subsidiary to earn EO100™ Standard certification, joining Seneca Resources Company, LLC (Seneca Resources), which previously achieved certification of 100% of its natural gas production under the EO100TM Standard in 2021.

    Furthermore, Seneca Resources, NFG’s Upstream segment, announced it has been re-certified by MiQ and was awarded an “A” grade (the highest certification level available) for 100% of its Appalachian natural gas production assets, which produce over 1 billion cubic feet of gross production per day. The MiQ certification focuses on three emissions criteria, including: methane intensity, practices to manage methane emissions, and emissions monitoring technology deployment.

    “The EO100™ and MiQ re-certifications that Midstream and Seneca achieved demonstrate our dedication to sustainability through our proactive emissions reduction efforts and best practices,” said Justin Loweth, President of Seneca Resources Company, LLC and National Fuel Gas Midstream Company, LLC. “I am proud of the work our team has done to not only achieve these accolades, but their commitment to build upon these certifications, engraining these principles and practices into our everyday culture.”

    About National Fuel Gas Company:
    National Fuel is a diversified energy company headquartered in Western New York that operates an integrated collection of natural gas assets across four business segments: Exploration and Production, Pipeline and Storage, Gathering and Utility. Additional information about National Fuel is available at www.nationalfuel.com.

    NFG Contacts:
    Natalie Fischer
    Analyst Contact
    716-857-7315

    Karen Merkel
    Media Contact
    716-857-7654

    About Equitable Origin:
    Equitable Origin is a non-profit organization that created the first market-based mechanism to recognize and reward responsible energy producers and to empower energy purchasers through independent, site-level certification. The EO100™ Standard for Responsible Energy Development is grounded in a set of comprehensive, globally applicable ESG performance targets developed with extensive stakeholder input. Certification against the EO100™ Standard promotes best practices and drives improvements in ESG performance while enabling a market for differentiated energy production. To learn more visit energystandards.org.

    About MiQ:
    MiQ is an independent not-for-profit established by RMI and SYSTEMIQ to facilitate a rapid reduction in methane emissions from the oil and gas sector. MiQ works with operators across the full supply chain to provide the data needed to understand and reduce methane emissions. To learn more visit miq.org.

    Cautionary Statements
    Certain statements contained herein, including statements identified by the use of the words “anticipates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “believes,” “will,” “may,” and similar expressions, and statements other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. While National Fuel’s expectations, beliefs, and projections are expressed in good faith and are believed to have a reasonable basis, actual results may differ materially from those projected in forward-looking statements. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: (1) National Fuel’s ability to estimate accurately the time and resources necessary to implement new practices; (2) governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; and (3) the other risks and uncertainties described in (i) National Fuel’s most recent Annual Report on Form 10-K at Item 7, MD&A, and Quarterly Reports on Form 10-Q at Item 2, MD&A, under the heading “Safe Harbor for Forward-Looking Statements,” and (ii) the “Risk Factors” included in National Fuel’s most recent Annual Report on Form 10-K at Item 1A and Quarterly Reports on Form 10-Q at Item 1A. National Fuel disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof. Because of these risks and uncertainties, readers should not place undue reliance on these forward-looking statements or use them for anything other than their intended purpose.

    The MIL Network –