NewzIntel.com

Category: Taxation

  • MIL-OSI USA: Congressman Biggs Introduces Legislation to Free Companies From the Chokehold of the Harris-Biden Regime’s Woke Social Priorities

    Source: United States House of Representatives – Congressman Andy Biggs (AZ-05)

    Congressman Andy Biggs (R-AZ) introduced the Stop Woke Investing Act, legislation promoting corporate America’s return to the free exchange of ideas. The Securities and Exchange Commission (SEC) has broad power to dictate what shareholder proposals a public company must consider. Under the Harris-Biden regime, the SEC has severely limited the ability of companies to exclude radical ESG proposals, like requiring companies to conduct “racial equity audits” or to set mandates to reduce greenhouse gas emissions, that are detrimental to a company’s financial responsibilities to their shareholders.

    Actions from this Administration have forced companies to include controversial policies that are of little to no value to their business operations and accomplish nothing other than serving a woke social agenda. Kamala Harris and Joe Biden have weaponized every aspect of the federal government to punish those who refuse to cower in the face of their radical priorities.

    The legislation would:

    • Allow businesses to reject frivolous shareholder proposals unrelated to the financial success of the company.
    • Limit the amount of proposals on which a company is permitted to vote, encouraging the prioritization of proposals that advance shareholder interests.

    “Woke activism shouldn’t be placed ahead of the profitability of a public company,” said Congressman Biggs.

    “Businesses should not be enslaved to radical ESG priorities that pull attention away from their fiduciary responsibilities. Focusing on woke policies only serves to harm businesses, investors, and the American economy. Congress must continue fighting the weaponization of the Harris-Biden regime and its push to radicalize Americans’ day-to-day lives. 

    “I’m thankful for the support of my colleagues and for Senator Eric Schmitt’s (R-MO) leadership on this issue in the Senate.”

    “Over the years activist investors have increasingly proposed shareholder resolutions to compel American companies to consider ESG-related priorities that have nothing to do with financial performance. The focus on ancillary environmental and social factors is putting businesses’ management at odds with their fiduciary duty to maximize financial returns to shareholders,” said Grover Norquist, President of Americans for Tax Reform. 

    “That is why I am proud to support Rep. Biggs’s Stop Woke Investing Act, which would limit the amount of extraneous shareholder resolutions that can be included on a company’s proxy ballot. The shareholder resolutions submitted must also have a material effect on the financial performance of the company. This bill preserves the true meaning of fiduciary duty and ensures American companies can continue to focus on job creation, financial performance, and economic growth.”

    Cosponsors of the Stop Woke Investing Act are: Rep. Andy Ogles (R-TN), Rep. Eli Crane (R-AZ), and Rep. Eric Burlison (R-MO).

    The legislation may be read here.

    Breitbart covered the legislation here.

    MIL OSI USA News –

  • MIL-OSI Security: Eleven Minneapolis Gang Members Charged with RICO Conspiracy, Murder in Aid of Racketeering, and Drug Trafficking Offenses

    Source: United States Attorneys General 4

    A federal grand jury in Minneapolis returned an 18-count indictment yesterday against 11 alleged members of the Lows — a violent Minneapolis street gang — for crimes including Racketeer Influenced and Corrupt Organizations (RICO) conspiracy involving murder, attempted murder, gun trafficking, and drug trafficking.

    “According to the indictment, these defendants are leaders, organizers, and members of the Lows street gang, a violent gang that allegedly committed multiple murders and attempted murders and trafficked in guns and drugs, including fentanyl,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Violent gangs that engage in bloody street wars and peddle deadly drugs endanger our communities. The Criminal Division, along with our local, state, and federal partners, is committed to holding violent criminals accountable, including by bringing racketeering charges.”

    “The Lows are an exceptionally violent criminal street gang that has terrorized north Minneapolis for nearly 20 years. Through threats and violence — shootings and murders — the Lows have long sought to establish dominion over large swaths of our city,” said U.S. Attorney Andrew Luger for the District of Minnesota. “My office will continue to respond to gang violence by treating it as the organized criminal activity it is. This indictment is an important step in dismantling a violent street gang that has devastated families and communities in north Minneapolis.”

    “More than 100 people lose their lives to gun violence every day in the United States,” said Special Agent in Charge Travis Riddle of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) St. Paul Field Division. “There will never be a time where this will be considered acceptable. Our ATF agents put forth solid investigative work in this case utilizing crime gun intelligence that without a doubt aided the case announced today. ATF is happy to work alongside each of our partners in this investigation, and we are grateful to the Criminal Division, U.S. Attorney Luger, and the entire team for taking up this challenging RICO case.”

    “The charges in this indictment reflect our unwavering commitment to bringing violent criminals to justice,” said Special Agent in Charge Alvin M. Winston Sr. of the FBI Minneapolis Field Office. “For too long, the Lows have inflicted pain and spread fear in north Minneapolis. Together with our law enforcement partners, we are determined to remove this threat from our communities and help restore a sense of security to all who call this city home.”

    “Today’s indictment provides a stark reminder that violence and drug trafficking go hand-in-hand,” said Special Agent in Charge Steven T. Bell of the Drug Enforcement Administration (DEA) Omaha Division. “These were not victimless crimes. Communities were hurt. The DEA will continue its unwavering focus to remove threats of violence and hold accountable the individuals responsible for inflicting fear on the streets of Minneapolis.”

    “The individuals named in this indictment allegedly engaged in homicide, and illegal drug and firearms trafficking, which created an atmosphere of terror and disrupted countless lives in this community,” said Acting Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation (CI) Chicago Field Office. “These charges represent a pivotal milestone in our commitment to restore safety and uphold justice in the communities we serve. Working with their federal, state, and local law enforcement partners, IRS-CI special agents will continue to follow every financial trail to dismantle the networks fueling these criminal enterprises. We stand united against the violence and fear that street gangs have inflicted upon our communities in Minneapolis and elsewhere.”

    “The Lows, and criminal organizations like them, wreak havoc on our communities, threatening the safety of our communities on a daily basis through their many acts of violence, murder, and narcotics and firearms trafficking,” said Special Agent in Charge Jamie Holt of Homeland Security Investigations (HSI) St. Paul. “HSI St. Paul will continue to foster a strong collaboration with our law enforcement partners to bring an end to the chaos these criminal organizations inflict on our local communities.”

    “This multi-count indictment against ranking members of the Lows gang is an excellent example of multiple law enforcement agencies combining their expertise and resources to conduct investigations with the common goal of taking down violent leaders perpetuating street violence involving guns and narcotics,” said Inspector in Charge Bryan Musgrove of the U.S. Postal Inspection Service (USPIS) Denver Division. “These RICO charges aim to remove these allegedly violent offenders from our community. U.S. Postal Inspectors are committed to continuing our work to dismantle drug trafficking operations to keep USPS customers and employees safe from greedy drug traffickers who favor profit over human lives.”

    As alleged in this indictment, the defendants were members of the Lows criminal street gang, which has been in existence in Minneapolis since approximately 2004. The Lows are primarily active in the northside of Minneapolis. They allegedly traffic in firearms and narcotics, including fentanyl, and use threats, intimidation, and violence to protect their territory, reputation, illicit proceeds, and power.

    The indictment charges that the defendants engaged in a pattern of racketeering — that is, unlawful acts of violence, gun trafficking, and narcotics trafficking — for the benefit of the Lows enterprise. These acts include seven alleged murders or attempted murders involving a total of ten victims.

    The 11 defendants, all from Minneapolis, have been indicted for the following crimes:

    Ashimiyu Alowonle II, 38, also known as Cash, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Timothy Callender III, 26, also known as Lil’ Tim, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Glenn Carter III, 23, also known as G5 and Bossman Carter, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; and conspiracy to distribute controlled substances. Carter is charged with committing a murder on May 14, 2022, as a racketeering act in furtherance of the RICO conspiracy.

    Victor Collins, 22, also known as Vic, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; conspiracy to distribute controlled substances; possession with intent to distribute a controlled substance; and possessing a firearm a firearm in furtherance of drug trafficking. Collins is charged with committing a murder and an attempted murder on Feb. 27 as a racketeering act in furtherance of the RICO conspiracy.

    Damari Douglas, 20, also known as Mari, is charged with RICO conspiracy, being a felon in possession of a firearm, and possession of a machine gun. Douglas is charged with committing a murder on Dec. 3, 2023, as a racketeering act in furtherance of the RICO conspiracy.

    Deontae Jackson, 35, also known as Leef, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Shannon Jackson, 32, also known as Shakedown, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; conspiracy to distribute controlled substances; possession with intent to distribute a controlled substance; possessing a firearm in furtherance of drug trafficking; and being a felon in possession of a firearm. Jackson is charged with committing a murder on April 27, 2023, as a racketeering act in furtherance of the RICO conspiracy.

    Robert Knights Jr., 19, also known as CMB Rob and Lil’ Rob, is charged with RICO conspiracy, conspiracy to distribute controlled substances, possession with intent to distribute a controlled substance, and possessing a firearm in furtherance of drug trafficking.

    Albert Lucas V, 20, also known as Abk Sav, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; and conspiracy to distribute controlled substances. Lucas is charged with committing multiple murders and an attempted murder on Feb. 27 and May 6, 2021, as a racketeering act in furtherance of the RICO conspiracy.

    Kaprice Richards, 23, also known as Kap, is charged with RICO conspiracy and using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death. Richards is charged with committing an attempted murder on May 29, 2022, and a murder on April 27, 2023, as racketeering acts in furtherance of the RICO conspiracy.

    Cartrelle Smith, 27, also known as Poo Moe, is charged with RICO conspiracy, conspiracy to distribute controlled substances, possession with intent to distribute a controlled substance, and possessing a firearm in furtherance of drug trafficking.

    If convicted, the defendants face a range of penalties, including up to life in prison for racketeering conspiracy involving acts of murder, using a firearm to commit murder, and conspiracy to distribute controlled substances. A federal district court judge will determine any sentence after the consideration of the U.S. Sentencing Guidelines and other statutory factors.

    ATF, FBI, DEA, IRS-CI, HSI, USPIS, Minneapolis Police Department, Hennepin County Sheriff’s Office, Minnesota Bureau of Criminal Apprehension, and Minnesota Department of Corrections are investigating the case, with assistance from the U.S. Marshals Service.

    Trial Attorney Jared Engelking of the Criminal Division’s Violent Crime and Racketeering Section and Assistant U.S. Attorneys Garrett S. Fields and David M. Classen for the District of Minnesota are prosecuting the case.

    An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    MIL Security OSI –

  • MIL-OSI: Silicon Motion Announces Results for the Period Ended September 30, 2024

    Source: GlobeNewswire (MIL-OSI)

    Business Highlights

    • Third quarter of 2024 sales increased 1% Q/Q and increased 23% Y/Y
      • SSD controller sales: 3Q of 2024 were flat Q/Q and increased 20% to 25% Y/Y
      • eMMC+UFS controller sales: 3Q of 2024 increased 0% to 5% Q/Q and increased 40% to 45% Y/Y
      • SSD solutions sales: 3Q of 2024 increased 5% to 10% Q/Q and increased 5% to 10% Y/Y

    Financial Highlights

      3Q 2024 GAAP 3Q 2024 Non-GAAP
    • Net sales $212.4 million (+1% Q/Q, +23% Y/Y) $212.4 million (+1% Q/Q, +23% Y/Y)
    • Gross margin 46.7% 46.8%
    • Operating margin 11.5% 16.1%
    • Earnings per diluted ADS $0.62 $0.92

    TAIPEI, Taiwan and MILPITAS, Calif., Oct. 31, 2024 (GLOBE NEWSWIRE) — Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion,” the “Company” or “we”) today announced its financial results for the quarter ended September 30, 2024. For the third quarter of 2024, net sales (GAAP) increased sequentially to $212.4 million from $210.7 million in the second quarter of 2024. Net income (GAAP) decreased to $20.8 million, or $0.62 per diluted American Depositary Share of the Company (“ADS”) (GAAP), from net income (GAAP) of $30.8 million, or $0.91 per diluted ADS (GAAP), in the second quarter of 2024.

    For the third quarter of 2024, net income (non-GAAP) decreased to $31.0 million, or $0.92 per diluted ADS (non-GAAP), from net income (non-GAAP) of $32.5 million, or $0.96 per diluted ADS (non-GAAP), in the second quarter of 2024.

    All financial numbers are in U.S. dollars unless otherwise noted.

    Third Quarter of 2024 Review
    “We continued to execute well in the third quarter of 2024, delivering revenue above the mid-point of our guided range and further expanding our gross margins,” said Wallace Kou, President and CEO of Silicon Motion. “Our eMMC and UFS controller revenue grew modestly, and our SSD controller revenue remained strong given continued growth in the OEM channel. We continue to outperform the market through new wins we secured this quarter with both NAND makers and module makers that we expect will ramp-up in 2025. We expect this trend to continue as we expand our product portfolio and deliver world-class controllers to the market.”

    Key Financial Results

    (in millions, except percentages and per ADS amounts) GAAP Non-GAAP
    3Q 2024
    		   2Q 2024
    		   3Q 2023
    		   3Q 2024
    		   2Q 2024
    		   3Q 2023
    		  
    Revenue $212.4   $210.7   $172.3   $212.4   $210.7   $172.3  
    Gross profit   $99.3     $96.8     $73.1     $99.3     $96.8     $73.3  
    Percent of revenue   46.7%     45.9%     42.4%     46.8%     46.0%     42.5%  
    Operating expenses $74.8   $66.0   $58.1   $65.1   $62.1   $49.5  
    Operating income   $24.5     $30.7     $15.0     $34.2     $34.7     $23.8  
    Percent of revenue   11.5%     14.6%     8.7%     16.1%     16.5%     13.8%  
    Earnings per diluted ADS $0.62   $0.91   $0.32   $0.92   $0.96   $0.63  


    Other Financial Information

    (in millions) 3Q 2024
    		   2Q 2024
    		   3Q 2023
    		  
    Cash, cash equivalents, restricted cash and short-term investments—end of period $368.6   $343.6   $350.3  
    Routine capital expenditures $7.4   $6.3   $6.3  
    Dividend payments $16.8   $16.8     —  

    During the third quarter of 2024, we had $12.4 million of capital expenditures, including $7.4 million for the routine purchase of testing equipment, software, design tools and other items, and $5.0 million for building construction in Hsinchu.

    Business Outlook
    “Looking ahead, we expect to experience gains from greater outsourcing by our NAND flash maker partners, which should continue to deliver revenue and profitability growth for the company,” said Wallace Kou, President and CEO of Silicon Motion. “In the current quarter, we are introducing two key new controllers, including our first AI/enterprise server MonTitan controller and our first PCIe Gen 5.0 client SSD controller, placing Silicon Motion in an exceptionally strong position entering calendar 2025. While the seasonal holiday demand is expected to be more muted than in past years, we are confident that our highly differentiated controller solutions for PCs, smartphones and now enterprise-class storage controllers will further strengthen our market leadership position and will build on our foundation for strong, sustainable long-term growth.” 

    For the fourth quarter of 2024, management expects:

    ($ in millions) GAAP Non-GAAP Adjustment Non-GAAP
    Revenue $191 to $202
    -10% to -5% Q/Q
    -6% to 0% Y/Y    		 — $191 to $202
    -10% to -5% Q/Q
    -6% to 0% Y/Y
    Gross margin 46.3% to 47.4% Approximately $0.3* 46.5 % to 47.5%
    Operating margin 8.0% to 9.9% Approximately $13.4 to $14.4** 15.6% to 16.6%

    * Projected gross margin (non-GAAP) excludes $0.3 million of stock-based compensation.
    ** Projected operating margin (non-GAAP) excludes $13.4 million to $14.4 million of stock-based compensation and dispute related expenses.

    Conference Call & Webcast:
    The Company’s management team will conduct a conference call at 8:00 am Eastern Time on October 31, 2024.

    Conference Call Details
    Participants must register in advance to join the conference call using the link provided below. Conference access information (including dial-in information and a unique access PIN) will be provided in the email received upon registration.

    Participant Online Registration:
    https://register.vevent.com/register/BI3e5d77077ee94ca9b9fd61325f52a0e9

    A webcast of the call will be available on the Company’s website at www.siliconmotion.com.

    Discussion of Non-GAAP Financial Measures

    To supplement the Company’s unaudited selected financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company discloses certain non-GAAP financial measures that exclude stock-based compensation and other items, including gross profit (non-GAAP), gross margin (non-GAAP), operating expenses (non-GAAP), operating profit (non-GAAP), operating margin (non-GAAP), non-operating income (expense) (non-GAAP), net income (non-GAAP), and earnings per diluted ADS (non-GAAP). These non-GAAP measures are not in accordance with or an alternative to GAAP and may be different from similarly-titled non-GAAP measures used by other companies. We believe that these non-GAAP measures have limitations in that they do not reflect all the amounts associated with the Company’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measure. We compensate for the limitations of our non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

    Our non-GAAP financial measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because they are consistent with the financial models and estimates published by many analysts who follow the Company. We use non-GAAP measures to evaluate the operating performance of our business, for comparison with our forecasts, and for benchmarking our performance externally against our competitors. Also, when evaluating potential acquisitions, we exclude the items described below from our consideration of the target’s performance and valuation. Since we find these measures to be useful, we believe that our investors benefit from seeing the results from management’s perspective in addition to seeing our GAAP results. We believe that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

    • the ability to make more meaningful period-to-period comparisons of the Company’s on-going operating results;
    • the ability to better identify trends in the Company’s underlying business and perform related trend analysis;
    • a better understanding of how management plans and measures the Company’s underlying business; and
    • an easier way to compare the Company’s operating results against analyst financial models and operating results of our competitors that supplement their GAAP results with non-GAAP financial measures.

    The following are explanations of each of the adjustments that we incorporate into our non-GAAP measures, as well as the reasons for excluding each of these individual items in our reconciliation of these non-GAAP financial measures:

    Stock-based compensation expense consists of non-cash charges related to the fair value of restricted stock units awarded to employees. The Company believes that the exclusion of these non-cash charges provides for more accurate comparisons of our operating results to our peer companies due to the varying available valuation methodologies, subjective assumptions and the variety of award types. In addition, the Company believes it is useful to investors to understand the specific impact of share-based compensation on its operating results.

    Restructuring charges relate to the restructuring of our underperforming product lines, principally the write-down of NAND flash, embedded DRAM and SSD inventory valuation and severance payments. 

    M&A transaction expenses consist of legal, financial advisory and other fees related to the transaction.

    Dispute related expenses consist of legal, consultant, other fees and resolution related to the dispute.

    Foreign exchange loss (gain) consists of translation gains and/or losses of non-US$ denominated current assets and current liabilities, as well as certain other balance sheet items which result from the appreciation or depreciation of non-US$ currencies against the US$. We do not use financial instruments to manage the impact on our operations from changes in foreign exchange rates, and because our operations are subject to fluctuations in foreign exchange rates, we therefore exclude foreign exchange gains and losses when presenting non-GAAP financial measures.

    Unrealized holding loss (gain) on investments relates to the net change in fair value of long-term investments.

     
    Silicon Motion Technology Corporation
    Consolidated Statements of Income
    (in thousands, except percentages and per ADS data, unaudited)
             
        For Three Months Ended   For the Nine Months Ended
        Sep. 30,   Jun. 30,   Sep. 30,   Sep. 30,   Sep. 30,
        2023   2024   2024   2023   2024
        ($)   ($)   ($)   ($)   ($)
    Net Sales   172,333     210,670     212,412     436,763     612,392  
    Cost of sales   99,193     113,893     113,142     254,897     331,227  
    Gross profit   73,140     96,777     99,270     181,866     281,165  
    Operating expenses                    
    Research & development   41,740     50,788     58,486     117,926     163,666  
    Sales & marketing   6,862     6,777     7,009     20,715     20,090  
    General & administrative   8,939     7,215     9,315     20,323     23,003  
    Loss from settlement of litigation   591     1,250     –     591     1,250  
    Operating income   15,008     30,747     24,460     22,311     73,156  
    Non-operating income (expense)                    
    Interest income, net   3,480     4,175     3,518     8,026     10,760  
    Foreign exchange gain (loss), net   569     245     (488 )   2,030     345  
    Unrealized holding gain(loss) on investments   (2,828 )   1,855     (602 )   8,053     (355 )
    Subtotal   1,221     6,275     2,428     18,109     10,750  
    Income before income tax   16,229     37,022     26,888     40,420     83,906  
    Income tax expense   5,642     6,201     6,045     8,639     16,226  
    Net income   10,587     30,821     20,843     31,781     67,680  
                         
    Earnings per basic ADS   0.32     0.92     0.62     0.95     2.01  
    Earnings per diluted ADS   0.32     0.91     0.62     0.95     2.01  
                         
    Margin Analysis:                    
    Gross margin   42.4 %   45.9 %   46.7 %   41.6 %   45.9 %
    Operating margin   8.7 %   14.6 %   11.5 %   5.1 %   11.9 %
    Net margin   6.1 %   14.6 %   9.8 %   7.3 %   11.1 %
                         
    Additional Data:                    
    Weighted avg. ADS equivalents   33,413     33,684     33,687     33,332     33,627  
    Diluted ADS equivalents   33,471     33,697     33,700     33,431     33,691  
                                   
     
    Silicon Motion Technology Corporation
    Reconciliation of GAAP to Non-GAAP Operating Results
    (in thousands, except percentages and per ADS data, unaudited)
             
        For Three Months Ended   For the Nine Months Ended
        Sep. 30,   Jun. 30,   Sep. 30,   Sep. 30,   Sep. 30,
        2023   2024   2024   2023   2024
        ($)   ($)   ($)   ($)   ($)
    Gross profit (GAAP)   73,140     96,777     99,270     181,866     281,165  
    Gross margin (GAAP)   42.4 %   45.9 %   46.7 %   41.6 %   45.9 %
    Stock-based compensation (A)   94     14     63     300     149  
    Restructuring charges   88     46     –     3,347     46  
    Gross profit (non-GAAP)   73,322     96,837     99,333     185,513     281,360  
    Gross margin (non-GAAP)   42.5 %   46.0 %   46.8 %   42.5 %   45.9 %
                         
    Operating expenses (GAAP)   58,132     66,030     74,810     159,555     208,009  
    Stock-based compensation (A)   (3,751 )   (371 )   (3,595 )   (11,460 )   (7,059 )
    M&A transaction expenses   (708 )   –     –     (2,893 )   –  
    Dispute related expenses   (3,495 )   (3,527 )   (6,076 )   (3,495 )   (11,135 )
    Restructuring charges   (661 )   –     –     (4,581 )   –  
    Operating expenses (non-GAAP)   49,517     62,132     65,139     137,126     189,815  
                         
    Operating profit (GAAP)   15,008     30,747     24,460     22,311     73,156  
    Operating margin (GAAP)   8.7 %   14.6 %   11.5 %   5.1 %   11.9 %
    Total adjustments to operating profit   8,797     3,958     9,734     26,076     18,389  
    Operating profit (non-GAAP)   23,805     34,705     34,194     48,387     91,545  
    Operating margin (non-GAAP)   13.8 %   16.5 %   16.1 %   11.1 %   14.9 %
                         
    Non-operating income (expense) (GAAP)   1,221     6,275     2,428     18,109     10,750  
    Foreign exchange loss (gain), net   (569 )   (245 )   488     (2,030 )   (345 )
    Unrealized holding loss (gain) on investments   2,828     (1,855 )   602     (8,053 )   355  
                         
    Non-operating income (expense) (non-GAAP)   3,480     4,175     3,518     8,026     10,760  
                         
    Net income (GAAP)   10,587     30,821     20,843     31,781     67,680  
    Total pre-tax impact of non-GAAP adjustments   11,056     1,858     10,824     15,993     18,399  
    Income tax impact of non-GAAP adjustments   (584 )   (218 )   (649 )   (2,968 )   (1,014 )
    Net income (non-GAAP)   21,059     32,461     31,018     44,806     85,065  
                         
    Earnings per diluted ADS (GAAP)   $0.32     $0.91     $0.62     $0.95     $2.01  
    Earnings per diluted ADS (non-GAAP)   $0.63     $0.96     $0.92     $1.33     $2.52  
                         
    Shares used in computing earnings per diluted ADS (GAAP)   33,471     33,697     33,700     33,431     33,691  
    Non-GAAP adjustments   128     18     109     136     52  
    Shares used in computing earnings per diluted ADS (non-GAAP)   33,599     33,715     33,809     33,567     33,743  
                         
    (A) Excludes stock-based compensation as follows:                    
    Cost of sales   94     14     63     300     149  
    Research & development   2,422     94     2,377     7,605     4,614  
    Sales & marketing   521     173     455     1,496     975  
    General & administrative   808     104     763     2,359     1,470  
                                   
     
    Silicon Motion Technology Corporation
    Consolidated Balance Sheet
    (In thousands, unaudited)
                       
        Sep. 30,
    		   Jun. 30,
    		   Sep. 30,
        2023
    		   2024
    		   2024
        ($)
    		   ($)
    		   ($)
    Cash and cash equivalents   295,385     289,175     313,924  
    Accounts receivable (net)   193,389     191,692     202,726  
    Inventories   199,003     240,811     214,574  
    Refundable deposits – current   49,445     51,036     51,102  
    Prepaid expenses and other current assets   16,896     31,460     38,246  
    Total current assets   754,118     804,174     820,572  
    Long-term investments   17,023     17,301     16,878  
    Property and equipment (net)   162,107     179,550     181,983  
    Other assets   33,672     29,121     29,304  
    Total assets   966,920     1,030,146     1,048,737  
                       
    Accounts payable   26,975     36,411     30,888  
    Income tax payable   26,279     14,103     14,444  
    Accrued expenses and other current liabilities   77,502     134,947     131,143  
    Total current liabilities   130,756     185,461     176,475  
    Other liabilities   62,112     60,182     62,673  
    Total liabilities   192,868     245,643     239,148  
    Shareholders’ equity   774,052     784,503     809,589  
    Total liabilities & shareholders’ equity   966,920     1,030,146     1,048,737  
                       
     
    Silicon Motion Technology Corporation
    Condensed Consolidated Statements of Cash Flows
    (in thousands, unaudited)
             
        For Three Months Ended   For the Nine Months Ended
        Sep. 30,   Jun. 30,   Sep. 30,   Sep. 30,   Sep. 30,
        2023   2024   2024   2023   2024
        ($)   ($)   ($)   ($)   ($)
    Net income   10,587     30,821     20,843     31,781     67,680  
    Depreciation & amortization   8,043     5,802     6,664     19,032     18,075  
    Stock-based compensation   3,845     385     3,658     11,760     7,208  
    Investment losses (gain) & disposals   3,135     (1,855 )   602     (7,556 )   355  
    Changes in operating assets and liabilities   39,302     (13,660 )   22,280     52,910     (9,967 )
    Net cash provided by (used in) operating activities   64,912     21,493     54,047     107,927     83,351  
                         
    Purchase of property & equipment   (17,052 )   (10,427 )   (12,436 )   (40,687 )   (33,612 )
    Net cash provided by (used in) investing activities   (17,052 )   (10,427 )   (12,436 )   (40,687 )   (33,612 )
                         
    Dividend payments   –     (16,820 )   (16,812 )   (15 )   (50,441 )
    Net cash used in financing activities   –     (16,820 )   (16,812 )   (15 )   (50,441 )
                         
    Net increase (decrease) in cash, cash equivalents & restricted cash   47,860     (5,754 )   24,799     67,225     (702 )
    Effect of foreign exchange changes   (2,528 )   86     186     (3,977 )   308  
    Cash, cash equivalents & restricted cash—beginning of period   304,971     349,279     343,611     287,055     368,990  
    Cash, cash equivalents & restricted cash—end of period   350,303     343,611     368,596     350,303     368,596  
                                   

    Shareholder Litigation
    On August 31, 2023, a Silicon Motion ADS holder (the “Plaintiff”) filed a putative class action complaint in the United States District Court for the Southern District of California, captioned Water Island Event-Driven Fund v. MaxLinear, Inc., No. 23-cv-01607 (S.D. Cal.), asserting claims against MaxLinear and two of its officers (the “MaxLinear Defendants”) for alleged violations of (i) Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder and (ii) Section 20(a) of the Exchange Act, in connection with alleged false and misleading statements made by the MaxLinear Defendants between June 6, 2023 and July 26, 2023 concerning MaxLinear’s intent to consummate the merger agreement it had entered into with Silicon Motion. On August 28, 2024, the Court dismissed the complaint against the MaxLinear Defendants without prejudice for lack of standing.  On September 18, 2024, the Plaintiff filed an amended complaint against the MaxLinear Defendants, and also added Silicon Motion and two of its officers (the “Silicon Motion Defendants”), asserting substantially similar claims under the Exchange Act. The complaint seeks compensatory damages, including interest, costs and expenses, and such other equitable or injunctive relief that the court deems appropriate. Motions to dismiss the amended complaint are expected to be fully briefed by February 2025.  The Silicon Motion Defendants believe that the claims asserted against them are without merit and intend to defend themselves vigorously.

    About Silicon Motion:
    We are the global leader in supplying NAND flash controllers for solid state storage devices.  We supply more SSD controllers than any other company in the world for servers, PCs and other client devices and are the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones, IoT devices and other applications.  We also supply customized high-performance hyperscale data center and specialized industrial and automotive SSD solutions.  Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs.  For further information on Silicon Motion, visit us at www.siliconmotion.com.

    Forward-Looking Statements:
    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to the unpredictable volume and timing of customer orders, which are not fixed by contract but vary on a purchase order basis; the loss of one or more key customers or the significant reduction, postponement, rescheduling or cancellation of orders from one or more customers; general economic conditions or conditions in the semiconductor or consumer electronics markets; the impact of inflation on our business and customer’s businesses and any effect this has on economic activity in the markets in which we operate; the functionalities and performance of our information technology (“IT”) systems, which are subject to cybersecurity threats and which support our critical operational activities, and any breaches of our IT systems or those of our customers, suppliers, partners and providers of third-party licensed technology; the effects on our business and our customer’s business taking into account the ongoing U.S.-China tariffs and trade disputes; the uncertainties associated with any future global or regional pandemic; the continuing tensions between Taiwan and China including enhanced military activities; decreases in the overall average selling prices of our products; changes in the relative sales mix of our products; changes in our cost of finished goods; supply chain disruptions that have affected us and our industry as well as other industries on a global basis; the payment, or non-payment, of cash dividends in the future at the discretion of our board of directors and any announced planned increases in such dividends; changes in our cost of finished goods; the availability, pricing, and timeliness of delivery of other components and raw materials used in the products we sell given the current raw material supply shortages being experienced in our industry; our customers’ sales outlook, purchasing patterns, and inventory adjustments based on consumer demands and general economic conditions; any potential impairment charges that may be incurred related to businesses previously acquired or divested in the future; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the U.S. Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on April 30, 2024. Other than as required under the securities laws, we do not intend, and do not undertake any obligation to, update or revise any forward-looking statements, which apply only as of the date of this press release.

    The MIL Network –

  • MIL-OSI USA: Eleven Minneapolis Gang Members Charged with RICO Conspiracy, Murder in Aid of Racketeering, and Drug Trafficking Offenses

    Source: US State Government of Utah

    A federal grand jury in Minneapolis returned an 18-count indictment yesterday against 11 alleged members of the Lows — a violent Minneapolis street gang — for crimes including Racketeer Influenced and Corrupt Organizations (RICO) conspiracy involving murder, attempted murder, gun trafficking, and drug trafficking.

    “According to the indictment, these defendants are leaders, organizers, and members of the Lows street gang, a violent gang that allegedly committed multiple murders and attempted murders and trafficked in guns and drugs, including fentanyl,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Violent gangs that engage in bloody street wars and peddle deadly drugs endanger our communities. The Criminal Division, along with our local, state, and federal partners, is committed to holding violent criminals accountable, including by bringing racketeering charges.”

    “The Lows are an exceptionally violent criminal street gang that has terrorized north Minneapolis for nearly 20 years. Through threats and violence — shootings and murders — the Lows have long sought to establish dominion over large swaths of our city,” said U.S. Attorney Andrew Luger for the District of Minnesota. “My office will continue to respond to gang violence by treating it as the organized criminal activity it is. This indictment is an important step in dismantling a violent street gang that has devastated families and communities in north Minneapolis.”

    “More than 100 people lose their lives to gun violence every day in the United States,” said Special Agent in Charge Travis Riddle of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) St. Paul Field Division. “There will never be a time where this will be considered acceptable. Our ATF agents put forth solid investigative work in this case utilizing crime gun intelligence that without a doubt aided the case announced today. ATF is happy to work alongside each of our partners in this investigation, and we are grateful to the Criminal Division, U.S. Attorney Luger, and the entire team for taking up this challenging RICO case.”

    “The charges in this indictment reflect our unwavering commitment to bringing violent criminals to justice,” said Special Agent in Charge Alvin M. Winston Sr. of the FBI Minneapolis Field Office. “For too long, the Lows have inflicted pain and spread fear in north Minneapolis. Together with our law enforcement partners, we are determined to remove this threat from our communities and help restore a sense of security to all who call this city home.”

    “Today’s indictment provides a stark reminder that violence and drug trafficking go hand-in-hand,” said Special Agent in Charge Steven T. Bell of the Drug Enforcement Administration (DEA) Omaha Division. “These were not victimless crimes. Communities were hurt. The DEA will continue its unwavering focus to remove threats of violence and hold accountable the individuals responsible for inflicting fear on the streets of Minneapolis.”

    “The individuals named in this indictment allegedly engaged in homicide, and illegal drug and firearms trafficking, which created an atmosphere of terror and disrupted countless lives in this community,” said Acting Special Agent in Charge Ramsey E. Covington of the IRS Criminal Investigation (CI) Chicago Field Office. “These charges represent a pivotal milestone in our commitment to restore safety and uphold justice in the communities we serve. Working with their federal, state, and local law enforcement partners, IRS-CI special agents will continue to follow every financial trail to dismantle the networks fueling these criminal enterprises. We stand united against the violence and fear that street gangs have inflicted upon our communities in Minneapolis and elsewhere.”

    “The Lows, and criminal organizations like them, wreak havoc on our communities, threatening the safety of our communities on a daily basis through their many acts of violence, murder, and narcotics and firearms trafficking,” said Special Agent in Charge Jamie Holt of Homeland Security Investigations (HSI) St. Paul. “HSI St. Paul will continue to foster a strong collaboration with our law enforcement partners to bring an end to the chaos these criminal organizations inflict on our local communities.”

    “This multi-count indictment against ranking members of the Lows gang is an excellent example of multiple law enforcement agencies combining their expertise and resources to conduct investigations with the common goal of taking down violent leaders perpetuating street violence involving guns and narcotics,” said Inspector in Charge Bryan Musgrove of the U.S. Postal Inspection Service (USPIS) Denver Division. “These RICO charges aim to remove these allegedly violent offenders from our community. U.S. Postal Inspectors are committed to continuing our work to dismantle drug trafficking operations to keep USPS customers and employees safe from greedy drug traffickers who favor profit over human lives.”

    As alleged in this indictment, the defendants were members of the Lows criminal street gang, which has been in existence in Minneapolis since approximately 2004. The Lows are primarily active in the northside of Minneapolis. They allegedly traffic in firearms and narcotics, including fentanyl, and use threats, intimidation, and violence to protect their territory, reputation, illicit proceeds, and power.

    The indictment charges that the defendants engaged in a pattern of racketeering — that is, unlawful acts of violence, gun trafficking, and narcotics trafficking — for the benefit of the Lows enterprise. These acts include seven alleged murders or attempted murders involving a total of ten victims.

    The 11 defendants, all from Minneapolis, have been indicted for the following crimes:

    Ashimiyu Alowonle II, 38, also known as Cash, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Timothy Callender III, 26, also known as Lil’ Tim, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Glenn Carter III, 23, also known as G5 and Bossman Carter, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; and conspiracy to distribute controlled substances. Carter is charged with committing a murder on May 14, 2022, as a racketeering act in furtherance of the RICO conspiracy.

    Victor Collins, 22, also known as Vic, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; conspiracy to distribute controlled substances; possession with intent to distribute a controlled substance; and possessing a firearm a firearm in furtherance of drug trafficking. Collins is charged with committing a murder and an attempted murder on Feb. 27 as a racketeering act in furtherance of the RICO conspiracy.

    Damari Douglas, 20, also known as Mari, is charged with RICO conspiracy, being a felon in possession of a firearm, and possession of a machine gun. Douglas is charged with committing a murder on Dec. 3, 2023, as a racketeering act in furtherance of the RICO conspiracy.

    Deontae Jackson, 35, also known as Leef, is charged with RICO conspiracy and conspiracy to distribute controlled substances.

    Shannon Jackson, 32, also known as Shakedown, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; conspiracy to distribute controlled substances; possession with intent to distribute a controlled substance; possessing a firearm in furtherance of drug trafficking; and being a felon in possession of a firearm. Jackson is charged with committing a murder on April 27, 2023, as a racketeering act in furtherance of the RICO conspiracy.

    Robert Knights Jr., 19, also known as CMB Rob and Lil’ Rob, is charged with RICO conspiracy, conspiracy to distribute controlled substances, possession with intent to distribute a controlled substance, and possessing a firearm in furtherance of drug trafficking.

    Albert Lucas V, 20, also known as Abk Sav, is charged with RICO conspiracy; using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death; and conspiracy to distribute controlled substances. Lucas is charged with committing multiple murders and an attempted murder on Feb. 27 and May 6, 2021, as a racketeering act in furtherance of the RICO conspiracy.

    Kaprice Richards, 23, also known as Kap, is charged with RICO conspiracy and using, carrying, or possessing a firearm in furtherance of a crime of violence resulting in death. Richards is charged with committing an attempted murder on May 29, 2022, and a murder on April 27, 2023, as racketeering acts in furtherance of the RICO conspiracy.

    Cartrelle Smith, 27, also known as Poo Moe, is charged with RICO conspiracy, conspiracy to distribute controlled substances, possession with intent to distribute a controlled substance, and possessing a firearm in furtherance of drug trafficking.

    If convicted, the defendants face a range of penalties, including up to life in prison for racketeering conspiracy involving acts of murder, using a firearm to commit murder, and conspiracy to distribute controlled substances. A federal district court judge will determine any sentence after the consideration of the U.S. Sentencing Guidelines and other statutory factors.

    ATF, FBI, DEA, IRS-CI, HSI, USPIS, Minneapolis Police Department, Hennepin County Sheriff’s Office, Minnesota Bureau of Criminal Apprehension, and Minnesota Department of Corrections are investigating the case, with assistance from the U.S. Marshals Service.

    Trial Attorney Jared Engelking of the Criminal Division’s Violent Crime and Racketeering Section and Assistant U.S. Attorneys Garrett S. Fields and David M. Classen for the District of Minnesota are prosecuting the case.

    An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

    MIL OSI USA News –

  • MIL-OSI: Farmers & Merchants Bancorp, Inc. Reports 2024 Third-Quarter and Year-to-Date Financial Results

    Source: GlobeNewswire (MIL-OSI)

    ARCHBOLD, Ohio, Oct. 30, 2024 (GLOBE NEWSWIRE) — Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 third quarter and year-to-date ended September 30, 2024.

    2024 Third Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

    • 86 consecutive quarters of profitability
    • Net income increased 36.4% to $6.5 million, or $0.48 per basic and diluted share, from $4.8 million, or $0.35 per basic and diluted share, and net income expanded 14.7% from the 2024 second quarter
    • Net interest margin increased 12 basis points to 2.71%
    • Efficiency ratio improved to 67.98%, compared to 73.07% for the same period a year ago, and 69.03% for the 2024 second quarter
    • Total net loans remain stable at $2.54 billion at September 30, 2024
    • Total assets increased 4.8% to a record $3.39 billion
    • Deposits increased 4.3% to a record $2.68 billion
    • Stockholders’ equity increased 10.6% to a record $335.4 million
    • Asset quality remains at historically strong levels with nonperforming loans of only $2.9 million at September 30, 2024, compared to $22.4 million at September 30, 2023
    • Allowance for credit losses was 879.37% of nonperforming loans
    • F&M ended the quarter with excellent liquidity levels, and over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%
    • According to the FDIC, F&M continued to have the third largest share of deposits out of the 58 financial institutions that are also operating within its local markets

    Lars B. Eller, President and Chief Executive Officer, stated, “F&M produced excellent earnings growth on a year-over-year and sequential basis, driven by higher net interest income, historically strong asset quality, and prudent expense management. Most importantly, our third quarter results reflect the talent of our associates, as we continue to work hard to drive operating improvements at F&M, serve our local Ohio, Indiana, and Michigan communities, and position F&M for long-term success. In addition, I am pleased to report that F&M was the third largest bank out of 58 financial institutions within the markets we compete, according to the FDIC, reflecting the leading value we provide to our local communities. In fact, F&M is the number one bank, based on deposits, in almost half of the communities in which we operate.”  

    Income Statement
    Net income for the 2024 third quarter ended September 30, 2024, was $6.5 million, compared to $4.8 million for the same period last year. Net income per basic and diluted share for the 2024 third quarter was $0.48, compared to $0.35 for the same period last year. Net income for the 2024 nine months ended September 30, 2024, was $17.6 million, compared to $17.2 million for the same period last year. Net income per basic and diluted share for the 2024 nine months was $1.28, compared to $1.26 for the same period last year.

    Mr. Eller continued, “Our 2024 third quarter and year-to-date performance demonstrate the success of the near-term strategies we are pursuing to navigate a complex operating environment and improve earnings. Most importantly, while the demand for loans is high across our markets, our approach to risk and pricing remains conservative. This near-term strategy has contributed to excellent asset quality. In addition, we continue to focus on strategies aimed at optimizing our deposit base and growing low-cost checking (DDA) deposits. Since the beginning of 2024, we have added over 5,600 new checking accounts, and benefited from new and expanded relationships at offices that were opened in 2023. As a result, we ended the quarter with a loan-to-deposit ratio of 93.6%, compared to 97.2% at September 30, 2023, and 96.0% at June 30, 2024. Our third quarter of 2024 loan-to-deposit ratio was the lowest quarterly value in two years. The final near-term strategy we are pursuing is focused on controlling expenses, and I am encouraged by the continued year-over-year and sequential improvement in our efficiency ratio. This reflects the opportunities we are pursuing to manage operating costs and expand productivity.”

    Deposits
    At September 30, 2024, total deposits were $2.68 billion, an increase of 4.3% from September 30, 2023. The Company’s cost of interest-bearing liabilities was 3.2% for the quarter ended September 30, 2024, compared to 2.82% for the quarter ended September 30, 2023, and 3.02% for the 2023 fourth quarter ended December 31, 2023.

    Loan Portfolio and Asset Quality
    “F&M’s teams continue to do an excellent job managing our cost of funds, loan pricing, deposit growth and overall net interest margin. Since the quarter ended December 31, 2023, our yield on earning assets has increased by 34 basis points, compared to a 19 basis point increase in our cost of interest bearing liabilities – representing the third consecutive quarter our yield on earning assets has outpaced our cost of interest bearing liabilities. We expect this trend will continue as more of our loan portfolio reprices in 2024,” continued Mr. Eller.

    Total loans, net at September 30, 2024, increased 0.3%, or by $8.7 million to $2.54 billion, compared to $2.53 billion at September 30, 2023. The year-over-year growth was driven by higher consumer real estate, commercial and industrial, and agricultural loans, partially offset by lower commercial real estate, agricultural real estate, and consumer loans.

    F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $2.9 million, or 0.11% of total loans at September 30, 2024, compared to $22.4 million, or 0.89% of total loans at September 30, 2023, and $22.4 million, or 0.87% at December 31, 2023.

    F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.3% of the Company’s total loan portfolio at September 30, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.3% of the Company’s total loan portfolio at September 30, 2024, with a weighted average loan-to-value of approximately 64% and an average loan of approximately $880,000.

    F&M’s CRE portfolio included the following categories at September 30, 2024:

    CRE Category   Dollar
    Balance    		   Percent of CRE Portfolio(*)   Percent of Total Loan Portfolio(*)
                 
    Industrial   $ 274,953   21.1 %   10.8 %
    Retail   $ 237,622   18.2 %   9.4 %
    Multi-family   $ 223,926   17.2 %   8.8 %
    Hotels   $ 141,642   10.9 %   5.6 %
    Office   $ 134,973   10.4 %   5.3 %
    Gas Stations   $ 62,028   4.8 %   2.5 %
    Food Service   $ 46,526   3.6 %   1.8 %
    Development   $ 30,999   2.4 %   1.2 %
    Senior Living   $ 29,866   2.3 %   1.2 %
    Auto Dealers   $ 25,068   1.9 %   1.0 %
    Other   $ 93,557   7.2 %   3.7 %
    Total CRE   $ 1,301,160   100.0 %   51.3 %

             * Numbers have been rounded

    At September 30, 2024, the Company’s allowance for credit losses to nonperforming loans was 879.37%, compared to 112.61% at September 30, 2023, and 111.95% at December 31, 2023. The allowance to total loans was 1.01% at September 30, 2024, compared to 1.00% at September 30, 2023. Including accretable yield adjustments, associated with the Company’s recent acquisitions, F&M’s allowance for credit losses to total loans was 1.10% at September 30, 2024, compared to 1.18% at September 30, 2023.

    Mr. Eller concluded, “With two months remaining in 2024, I am encouraged by F&M’s strong financial and operating performance to date. F&M ended the quarter with record stockholders’ equity, historically strong asset quality, record deposits, and excellent liquidity levels with over $635 million in contingent funding sources, and a cash-to-assets ratio of 7.2%. We remain focused on continual improvements, managing the items under our control, and providing our customers and communities with outstanding, and local financial services. As a result, F&M’s financial and operating performance continues to strengthen and I believe the Company is well positioned to create lasting value for our communities, customers, team members, and shareholders.”

    Stockholders’ Equity and Dividends
    Total stockholders’ equity increased 10.6% to $335.4 million, or $24.48 per share at September 30, 2024, from $303.2 million, or $22.19 per share at September 30, 2023. The Company’s Tier 1 leverage ratio of 8.04%, remained stable compared to September 30, 2023.

    Tangible stockholders’ equity increased to $242.8 million at September 30, 2024, compared to $208.8 million at September 30, 2023. On a per share basis, tangible stockholders’ equity at September 30, 2024, was $17.72 per share, compared to $15.28 per share at September 30, 2023.

    For the nine months ended September 30, 2024, the Company has declared cash dividends of $0.66125 per share, which is a 5.0% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the nine months ended September 30, 2024, the dividend payout ratio was 50.99% compared to 49.50% for the same period last year.

    About Farmers & Merchants State Bank:
    Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) is the holding company of F&M Bank, a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in West Bloomfield, Michigan; Muncie, Indiana; and Perrysburg and Bryan, Ohio.

    Safe Harbor Statement
    Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.

    Non-GAAP Financial Measures
    This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.

     
    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME
    (Unaudited) (in thousands of dollars, except per share data)
             
          Three Months Ended   Nine Months Ended
          September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023   September 30, 2024   September 30, 2023
    Interest Income                              
    Loans, including fees     $ 36,873     $ 36,593     $ 35,200     $ 34,493   $ 33,783     $ 108,666     $ 94,851  
    Debt securities:                              
    U.S. Treasury and government agencies       1,467       1,148       1,045       987     1,005       3,660       3,103  
    Municipalities       387       389       394       397     392       1,170       1,201  
    Dividends       334       327       333       365     246       994       517  
    Federal funds sold       7       7       7       8     6       21       36  
    Other       2,833       2,702       1,675       2,020     927       7,210       1,830  
    Total interest income       41,901       41,166       38,654       38,270     36,359       121,721       101,538  
    Interest Expense                              
    Deposits       16,947       16,488       15,279       15,015     13,323       48,714       31,908  
    Federal funds purchased and securities sold under agreements to repurchase       277       276       284       293     349       837       1,181  
    Borrowed funds       2,804       2,742       2,689       2,742     2,741       8,235       6,134  
    Subordinated notes       284       285       284       285     284       853       853  
    Total interest expense       20,312       19,791       18,536       18,335     16,697       58,639       40,076  
    Net Interest Income – Before Provision for Credit Losses     21,589       21,375       20,118       19,935     19,662       63,082       61,462  
    Provision for Credit Losses – Loans       282       605       (289 )     278     460       598       1,420  
    Provision for Credit Losses – Off Balance Sheet Credit Exposures   (267 )     (18 )     (266 )     189     (76 )     (551 )     (143 )
    Net Interest Income After Provision for Credit Losses       21,574       20,788       20,673       19,468     19,278       63,035       60,185  
    Noninterest Income                              
    Customer service fees       300       189       598       415     248       1,087       917  
    Other service charges and fees       1,155       1,085       1,057       1,090     1,133       3,297       3,253  
    Interchange income       1,315       1,330       1,429       1,310     1,266       4,074       4,008  
    Loan servicing income       710       513       539       666     502       1,762       3,739  
    Net gain on sale of loans       215       314       107       230     294       636       469  
    Increase in cash surrender value of bank owned life insurance       265       236       216       216     221       717       618  
    Net loss on sale of available-for-sale securities       –       –       –       –     –       –       (891 )
    Total noninterest income       3,960       3,667       3,946       3,927     3,664       11,573       12,113  
    Noninterest Expense                              
    Salaries and wages       7,713       7,589       7,846       6,981     6,777       23,148       19,934  
    Employee benefits       2,112       2,112       2,171       1,218     2,066       6,395       6,302  
    Net occupancy expense       1,054       999       1,027       1,187     950       3,080       2,646  
    Furniture and equipment       1,472       1,407       1,353       1,370     1,189       4,232       3,652  
    Data processing       339       448       500       785     840       1,287       2,362  
    Franchise taxes       410       265       555       308     434       1,230       1,179  
    ATM expense       472       397       473       665     640       1,342       1,946  
    Advertising       597       519       530       397     865       1,646       2,209  
    Net (gain) loss on sale of other assets owned       –       (49 )     –       86     49       (49 )     49  
    FDIC assessment       516       507       580       594     586       1,603       1,388  
    Servicing rights amortization – net       219       187       168       182     106       574       429  
    Loan expense       244       251       229       246     241       724       809  
    Consulting fees       251       198       186       192     179       635       640  
    Professional fees       453       527       445       331     358       1,425       1,099  
    Intangible asset amortization       445       444       445       446     445       1,334       1,334  
    Other general and administrative       1,128       1,495       1,333       1,532     1,319       3,956       4,841  
    Total noninterest expense       17,425       17,296       17,841       16,520     17,044       52,562       50,819  
    Income Before Income Taxes       8,109       7,159       6,778       6,875     5,898       22,046       21,479  
    Income Taxes       1,593       1,477       1,419       1,332     1,121       4,489       4,235  
    Net Income       6,516       5,682       5,359       5,543     4,777       17,557       17,244  
    Other Comprehensive Income (Loss) (Net of Tax):                              
    Net unrealized gain (loss) on available-for-sale securities     11,664       2,531       (1,995 )     13,261     (4,514 )     12,200       (2,480 )
    Reclassification adjustment for realized loss on sale of available-for-sale securities       –       –       –       –     –       –       891  
    Net unrealized gain (loss) on available-for-sale securities     11,664       2,531       (1,995 )     13,261     (4,514 )     12,200       (1,589 )
    Tax expense (benefit)       2,449       531       (418 )     2,784     (947 )     2,562       (333 )
    Other comprehensive income (loss)       9,215       2,000       (1,577 )     10,477     (3,567 )     9,638       (1,256 )
    Comprehensive Income     $ 15,731     $ 7,682     $ 3,782     $ 16,020   $ 1,210     $ 27,195     $ 15,988  
    Basic Earnings Per Share     $ 0.48     $ 0.42     $ 0.39     $ 0.41   $ 0.35     $ 1.28     $ 1.26  
    Diluted Earnings Per Share     $ 0.48     $ 0.42     $ 0.39     $ 0.41   $ 0.35     $ 1.28     $ 1.26  
    Dividends Declared     $ 0.22125     $ 0.22     $ 0.22     $ 0.22   $ 0.21     $ 0.66125     $ 0.63  
                                   
    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited) (in thousands of dollars, except per share data)
     
          September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023
          (Unaudited)   (Unaudited)   (Unaudited)       (Unaudited)
    Assets                    
    Cash and due from banks   $ 244,572     $ 191,785     $ 186,541     $ 140,917     $ 151,711  
    Federal funds sold     932       1,283       1,241       1,284       1,471  
      Total cash and cash equivalents     245,504       193,068       187,782       142,201       153,182  
                           
    Interest-bearing time deposits     2,727       3,221       2,735       2,740       2,989  
    Securities – available-for-sale     404,881       365,209       347,516       358,478       348,255  
    Other securities, at cost     15,028       14,721       14,744       17,138       16,995  
    Loans held for sale     1,706       1,628       2,410       1,576       1,039  
    Loans, net of allowance for credit losses of $25,484 9/30/24 and $25,024 12/31/23     2,512,852       2,534,468       2,516,687       2,556,167       2,504,329  
    Premises and equipment     33,779       34,507       35,007       35,790       31,723  
    Construction in progress     35       38       9       8       3,044  
    Goodwill     86,358       86,358       86,358       86,358       86,358  
    Loan servicing rights     5,644       5,504       5,555       5,648       5,687  
    Bank owned life insurance     34,624       34,359       34,123       33,907       33,691  
    Other assets     46,047       49,552       54,628       43,218       47,388  
                           
    Total Assets   $ 3,389,185     $ 3,322,633     $ 3,287,554     $ 3,283,229     $ 3,234,680  
                           
      Liabilities and Stockholders’ Equity                    
    Liabilities                    
    Deposits                    
      Noninterest-bearing   $ 481,444     $ 479,069     $ 510,731     $ 528,465     $ 505,358  
      Interest-bearing                    
      NOW accounts     865,617       821,145       829,236       816,790       778,133  
      Savings     661,565       673,284       635,430       599,191       591,344  
      Time     676,187       667,592       645,985       663,017       700,445  
      Total deposits     2,684,813       2,641,090       2,621,382       2,607,463       2,575,280  
                           
    Federal funds purchased and securities sold under agreements to repurchase     27,292       27,218       28,218       28,218       30,527  
    Federal Home Loan Bank (FHLB) advances     263,081       266,102       256,628       265,750       266,286  
    Subordinated notes, net of unamortized issuance costs     34,789       34,759       34,731       34,702       34,673  
    Dividend payable     2,998       2,975       2,975       2,974       2,838  
    Accrued expenses and other liabilities     40,832       27,825       25,930       27,579       21,892  
      Total liabilities     3,053,805       2,999,969       2,969,864       2,966,686       2,931,496  
                           
    Commitments and Contingencies                    
                           
    Stockholders’ Equity                    
    Common stock – No par value 20,000,000 shares authorized; issued                    
    14,564,425 shares 9/30/24 and 12/31/23; outstanding 13,702,593     135,193       135,829       135,482       135,515       135,171  
    shares 9/30/24 and 13,664,641 shares 12/31/23                    
    Treasury stock – 861,832 shares 9/30/24 and 899,784 shares 12/31/23     (10,904 )     (11,006 )     (10,851 )     (11,040 )     (11,008 )
    Retained earnings     230,465       226,430       223,648       221,080       218,510  
    Accumulated other comprehensive loss     (19,374 )     (28,589 )     (30,589 )     (29,012 )     (39,489 )
      Total stockholders’ equity     335,380       322,664       317,690       316,543       303,184  
                           
    Total Liabilities and Stockholders’ Equity   $ 3,389,185     $ 3,322,633     $ 3,287,554     $ 3,283,229     $ 3,234,680  
                           
    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    SELECT FINANCIAL DATA
                                               
        For the Three Months Ended   For the Nine Months Ended
    Selected financial data   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023   September 30, 2024   September 30, 2023
    Return on average assets     0.78 %     0.69 %     0.66 %     0.67 %     0.59 %     0.71 %     0.73 %
    Return on average equity     7.93 %     7.13 %     6.76 %     7.27 %     6.26 %     7.28 %     7.52 %
    Yield on earning assets     5.27 %     5.22 %     5.00 %     4.93 %     4.79 %     5.17 %     4.57 %
    Cost of interest bearing liabilities     3.21 %     3.18 %     3.06 %     3.02 %     2.82 %     3.16 %     2.35 %
    Net interest spread     2.06 %     2.04 %     1.94 %     1.91 %     1.97 %     2.01 %     2.22 %
    Net interest margin     2.71 %     2.71 %     2.60 %     2.57 %     2.59 %     2.68 %     2.77 %
    Efficiency     67.98 %     69.03 %     74.08 %     69.23 %     73.07 %     70.36 %     68.24 %
    Dividend payout ratio     45.99 %     52.35 %     55.52 %     54.23 %     60.07 %     50.99 %     49.50 %
    Tangible book value per share   $ 17.72     $ 16.79     $ 16.39     $ 16.29     $ 15.28              
    Tier 1 leverage ratio     8.04 %     8.02 %     8.40 %     8.20 %     8.02 %            
    Average shares outstanding     13,687,119       13,681,501       13,671,166       13,665,773       13,650,823       13,679,955       13,633,101  
                                               
    Loans   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023            
    (Dollar amounts in thousands)                                          
    Commercial real estate   $ 1,301,160     $ 1,303,598     $ 1,304,400     $ 1,337,766     $ 1,304,118              
    Agricultural real estate     220,328       222,558       227,455       223,791       225,672              
    Consumer real estate     524,055       525,902       525,178       521,895       512,973              
    Commercial and industrial     260,732       268,426       256,051       254,935       250,891              
    Agricultural     137,252       142,909       127,670       132,560       123,735              
    Consumer     67,394       70,918       74,819       79,591       83,024              
    Other     25,916       26,449       26,776       30,136       31,083              
    Less: Net deferred loan fees, costs and other (1)     1,499       (1,022 )     (982 )     517       (1,890 )            
    Total loans, net   $ 2,538,336     $ 2,559,738     $ 2,541,367     $ 2,581,191     $ 2,529,606              
                                               
                                               
    Asset quality data   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   September 30, 2023            
    (Dollar amounts in thousands)                                          
    Nonaccrual loans   $ 2,898     $ 2,487     $ 19,391     $ 22,353     $ 22,447              
    90 day past due and accruing   $ –     $ –     $ –     $ –     $ –              
    Nonperforming loans   $ 2,898     $ 2,487     $ 19,391     $ 22,353     $ 22,447              
    Other real estate owned   $ –     $ –     $ –     $ –     $ –              
    Nonperforming assets   $ 2,898     $ 2,487     $ 19,391     $ 22,353     $ 22,447              
                                               
                                               
    Allowance for credit losses   $ 25,484     $ 25,270     $ 24,680     $ 25,024     $ 25,277              
    Allowance for unfunded     1,661       1,928       1,946       2,212       2,023              
    Total Allowance for Credit Losses   $ 27,145     $ 27,198     $ 26,626     $ 27,236     $ 27,300              
    Allowance for credit losses/total loans     1.01 %     0.99 %     0.97 %     0.97 %     1.00 %            
    Adjusted credit losses with accretable yield/total loans     1.10 %     1.10 %     1.11 %     1.13 %     1.18 %            
    Net charge-offs:                                          
    Quarter-to-date   $ 68     $ 15     $ 55     $ 531     $ 93              
    Year-to-date   $ 138     $ 70     $ 55     $ 551     $ 20              
    Net charge-offs to average loans                                          
    Quarter-to-date     0.00 %     0.00 %     0.00 %     0.02 %     0.00 %            
    Year-to-date     0.01 %     0.00 %     0.00 %     0.02 %     0.00 %            
    Nonperforming loans/total loans     0.11 %     0.10 %     0.76 %     0.87 %     0.89 %            
    Allowance for credit losses/nonperforming loans     879.37 %     1016.08 %     127.28 %     111.95 %     112.61 %            
    NPA coverage ratio     879.37 %     1016.08 %     127.28 %     111.95 %     112.61 %            
                                               
    (1) Includes carrying value adjustments of $3.0 million as of September 30, 2024, $612 thousand as of June 30, 2024, $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps associated with fixed rate loans            
     
    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
    (in thousands of dollars, except percentages)
                             
        For the Three Months Ended   For the Three Months Ended
        September 30, 2024   September 30, 2023
    Interest Earning Assets:   Average Balance   Interest/Dividends   Annualized Yield/Rate   Average Balance   Interest/Dividends   Annualized Yield/Rate
    Loans   $ 2,551,899   $ 36,873   5.78 %   $ 2,536,885   $ 33,783   5.33 %
    Taxable investment securities     415,943     2,107   2.03 %     393,910     1,559   1.58 %
    Tax-exempt investment securities     19,661     81   2.09 %     23,986     84   1.77 %
    Fed funds sold & other     197,258     2,840   5.76 %     85,515     933   4.36 %
    Total Interest Earning Assets     3,184,761   $ 41,901   5.27 %     3,040,296   $ 36,359   4.79 %
                             
    Nonearning Assets     168,055             180,193        
                             
    Total Assets   $ 3,352,816           $ 3,220,489        
                             
    Interest Bearing Liabilities:                        
    Savings deposits   $ 1,538,387   $ 10,691   2.78 %   $ 1,367,168   $ 7,673   2.24 %
    Other time deposits     667,224     6,256   3.75 %     667,880     5,650   3.38 %
    Other borrowed money     264,539     2,804   4.24 %     266,467     2,741   4.11 %
    Fed funds purchased & securities sold under agreement to repurchase     27,481     277   4.03 %     34,128     349   4.09 %
    Subordinated notes     34,769     284   3.27 %     34,654     284   3.28 %
    Total Interest Bearing Liabilities   $ 2,532,400   $ 20,312   3.21 %   $ 2,370,297   $ 16,697   2.82 %
                             
    Noninterest Bearing Liabilities     491,851             544,801        
                             
    Stockholders’ Equity   $ 328,565           $ 305,391        
                             
    Net Interest Income and Interest Rate Spread       $ 21,589   2.06 %       $ 19,662   1.97 %
                             
    Net Interest Margin           2.71 %           2.59 %
                             
    Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts    
                             
                             
        For the Nine Months Ended   For the Nine Months Ended
        September 30, 2024   September 30, 2023
    Interest Earning Assets:   Average Balance   Interest/Dividends   Annualized Yield/Rate   Average Balance   Interest/Dividends   Annualized Yield/Rate
    Loans   $ 2,561,774   $ 108,666   5.66 %   $ 2,470,770   $ 94,851   5.12 %
    Taxable investment securities     397,466     5,575   1.87 %     396,917     4,544   1.53 %
    Tax-exempt investment securities     20,684     249   2.03 %     24,865     277   1.88 %
    Fed funds sold & other     165,227     7,231   5.84 %     67,869     1,866   3.67 %
    Total Interest Earning Assets     3,145,151   $ 121,721   5.17 %     2,960,421   $ 101,538   4.57 %
                             
    Nonearning Assets     161,113             176,568        
                             
    Total Assets   $ 3,306,264           $ 3,136,989        
                             
    Interest Bearing Liabilities:                        
    Savings deposits   $ 1,487,809   $ 30,291   2.71 %   $ 1,373,110   $ 18,854   1.83 %
    Other time deposits     662,129     18,423   3.71 %     620,071     13,054   2.81 %
    Other borrowed money     264,310     8,235   4.15 %     204,927     6,134   3.99 %
    Fed funds purchased & securities sold under agreement to repurchase     27,887     837   4.00 %     37,649     1,181   4.18 %
    Subordinated notes     34,741     853   3.27 %     34,625     853   3.28 %
    Total Interest Bearing Liabilities   $ 2,476,876   $ 58,639   3.16 %   $ 2,270,382   $ 40,076   2.35 %
                             
    Noninterest Bearing Liabilities     507,843             561,001        
                             
    Stockholders’ Equity   $ 321,545           $ 305,606        
                             
    Net Interest Income and Interest Rate Spread       $ 63,082   2.01 %       $ 61,462   2.22 %
                             
    Net Interest Margin           2.68 %           2.77 %
                             
    Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts    
                             
    FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES
    AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES
    (in thousands of dollars, except percentages)    		  
                                         
      For the Three Months Ended September 30, 2024   For the Three Months Ended September 30, 2023  
      As Reported   Excluding Acc/Amort Difference   As Reported   Excluding Acc/Amort Difference  
      $ Yield   $ Yield   $ Yield   $ Yield   $ Yield   $ Yield  
    Interest Earning Assets:                                    
    Loans $ 36,873 5.78 %   $ 36,149 5.67 %   $ 724   0.11 %   $ 33,783 5.33 %   $ 32,631 5.15 %   $ 1,152   0.18 %  
    Taxable investment securities   2,107 2.03 %     2,107 2.03 %     –   0.00 %     1,559 1.58 %     1,559 1.58 %     –   0.00 %  
    Tax-exempt investment securities   81 2.09 %     81 2.09 %     –   0.00 %     84 1.77 %     84 1.77 %     –   0.00 %  
    Fed funds sold & other   2,840 5.76 %     2,840 5.76 %     –   0.00 %     933 4.36 %     933 4.36 %     –   0.00 %  
    Total Interest Earning Assets   41,901 5.27 %     41,177 5.17 %     724   0.10 %     36,359 4.79 %     35,207 4.64 %     1,152   0.15 %  
                                         
    Interest Bearing Liabilities:                                    
    Savings deposits $ 10,691 2.78 %   $ 10,691 2.78 %   $ –   0.00 %   $ 7,673 2.24 %   $ 7,673 2.24 %   $ –   0.00 %  
    Other time deposits   6,256 3.75 %     6,256 3.75 %     –   0.00 %     5,650 3.38 %     5,500 3.29 %     150   0.09 %  
    Other borrowed money   2,804 4.24 %     2,800 4.23 %     4   0.01 %     2,741 4.11 %     2,759 4.14 %     (18 ) -0.03 %  
    Federal funds purchased and securities sold under agreement to repurchase   277 4.03 %     277 4.03 %     –   0.00 %     349 4.09 %     349 4.09 %     –   0.00 %  
    Subordinated notes   284 3.27 %     284 3.27 %     –   0.00 %     284 3.28 %     284 3.28 %     –   0.00 %  
    Total Interest Bearing Liabilities   20,312 3.21 %     20,308 3.21 %     4   0.00 %     16,697 2.82 %     16,565 2.80 %     132   0.02 %  
                                         
    Interest/Dividend income/yield   41,901 5.27 %     41,177 5.17 %     724   0.10 %     36,359 4.79 %     35,207 4.64 %     1,152   0.15 %  
    Interest Expense / yield   20,312 3.21 %     20,308 3.21 %     4   0.00 %     16,697 2.82 %     16,565 2.80 %     132   0.02 %  
    Net Interest Spread   21,589 2.06 %     20,869 1.96 %     720   0.10 %     19,662 1.97 %     18,642 1.84 %     1,020   0.13 %  
    Net Interest Margin   2.71 %     2.62 %     0.09 %     2.59 %     2.46 %     0.13 %  
                                         
                                         
      For the Nine Months Ended September 30, 2024   For the Nine Months Ended September 30, 2023  
      As Reported   Excluding Acc/Amort Difference   As Reported   Excluding Acc/Amort Difference  
      $ Yield   $ Yield   $ Yield   $ Yield   $ Yield   $ Yield  
    Interest Earning Assets:                                    
    Loans $ 108,666 5.66 %   $ 106,588 5.55 %   $ 2,078   0.11 %   $ 94,851 5.12 %   $ 92,364 4.99 %   $ 2,487   0.13 %  
    Taxable investment securities   5,575 1.87 %     5,575 1.87 %     –   0.00 %     4,544 1.53 %     4,544 1.53 %     –   0.00 %  
    Tax-exempt investment securities   249 2.03 %     249 2.03 %     –   0.00 %     277 1.88 %     277 1.88 %     –   0.00 %  
    Fed funds sold & other   7,231 5.84 %     7,231 5.84 %     –   0.00 %     1,866 3.67 %     1,866 3.67 %     –   0.00 %  
     Total Interest Earning Assets   121,721 5.17 %     119,643 5.08 %     2,078   0.09 %     101,538 4.57 %     99,051 4.47 %     2,487   0.10 %  
                                         
    Interest Bearing Liabilities:                                    
    Savings deposits $ 30,291 2.71 %   $ 30,291 2.71 %   $ –   0.00 %   $ 18,854 1.83 %   $ 18,854 1.83 %   $ –   0.00 %  
    Other time deposits   18,423 3.71 %     18,423 3.71 %     –   0.00 %     13,054 2.81 %     13,458 2.89 %     (404 ) -0.08 %  
    Other borrowed money   8,235 4.15 %     8,254 4.16 %     (19 ) -0.01 %     6,134 3.99 %     6,187 4.03 %     (53 ) -0.04 %  
    Federal funds purchased and securities sold under agreement to repurchase   837 4.00 %     837 4.00 %     –   0.00 %     1,181 4.18 %     1,181 4.18 %     –   0.00 %  
    Subordinated notes   853 3.27 %     853 3.27 %     –   0.00 %     853 3.28 %     853 3.28 %     –   0.00 %  
    Total Interest Bearing Liabilities   58,639 3.16 %     58,658 3.16 %     (19 ) 0.00 %     40,076 2.35 %     40,533 2.38 %     (457 ) -0.03 %  
                                         
    Interest/Dividend income/yield   121,721 5.17 %     119,643 5.08 %     2,078   0.09 %     101,538 4.57 %     99,051 4.47 %     2,487   0.10 %  
    Interest Expense / yield   58,639 3.16 %     58,658 3.16 %     (19 ) 0.00 %     40,076 2.35 %     40,533 2.38 %     (457 ) -0.03 %  
    Net Interest Spread   63,082 2.01 %     60,985 1.92 %     2,097   0.09 %     61,462 2.22 %     58,518 2.09 %     2,944   0.13 %  
    Net Interest Margin   2.68 %     2.59 %     0.09 %     2.77 %     2.64 %     0.13 %  
                                         
    Company Contact: Investor and Media Contact:
    Lars B. Eller
    President and Chief Executive Officer Farmers & Merchants Bancorp, Inc.
    (419) 446-2501
    leller@fm.bank    		 Andrew M. Berger
    Managing Director
    SM Berger & Company, Inc.
    (216) 464-6400
    andrew@smberger.com

    The MIL Network –

  • MIL-OSI: Capgemini Q3 2024 revenues

    Source: GlobeNewswire (MIL-OSI)

    Media relations:
    Victoire Grux
    Tel.: +33 6 04 52 16 55
    victoire.grux@capgemini.com

    Investor relations:
    Vincent Biraud
    Tel.: +33 1 47 54 50 87
    vincent.biraud@capgemini.com

    Capgemini Q3 2024 revenues

    • Q3 2024 revenues of €5,377 million, down -1.6% at constant exchange rates*
    • 9M 2024 revenues of €16,515 million, down -2.3% at constant exchange rates
    • FY 2024 constant currency revenue growth target revised to -2.0% to -2.4% and operating margin target narrowed to 13.3% to 13.4%
    • FY 2024 organic free cash-flow target confirmed at around €1.9 billion

    Paris, October 30, 2024 – The Capgemini Group reported consolidated revenues of €5,377 million in Q3 2024, down -1.9% year-on-year on a reported basis, and down -1.6% at constant exchange rates*.

    Aiman Ezzat, Chief Executive Officer of the Capgemini Group, said: “Our growth improved marginally in Q3 compared to Q2, despite stronger headwinds than anticipated in some sectors, primarily in Manufacturing. However, we continue to see recovery in Financial Services and gradually lesser headwinds from Telco and Tech.

    In a market that remains soft overall, we expect to deliver a similar growth in Q4 while demonstrating the resilience of our operating margin and organic free cash-flow. Client demand continues to be driven by operational efficiencies and cost reduction and we seize their growing appetite for AI and Gen AI services.

    Our positioning as a business and technology transformation partner, the relevance of our offerings and the quality of our talent are driving our solid book-to-bill ratio and growing pipeline of strategic deals. We are also launching a set of targeted actions to simplify our operations to make the Group more agile with a stronger emphasis on growth.

    Based on Q4 perspectives, we now expect a full-year constant currency growth rate of -2.0% to -2.4% and narrow the operating margin target to 13.3% to 13.4%, while the organic free cash-flow target of around €1.9 billion is confirmed.”

      (in millions of euros)   Change
    Revenues 2023 2024   At current
    exchange rates    		 At constant
    exchange rates*
    Q3 5,480 5,377   -1.9% -1.6%
    9 months 16,906 16,515   -2.3% -2.3%

    After bottoming out in Q1 2024, Capgemini activity trends improved again in Q3, but only marginally. The Group generated revenues of €5,377 million in Q3 2024, down -1.9% year-on-year on a reported basis and -1.6% at constant exchange rates*. On an organic basis (i.e., restated for changes in Group scope and exchange rates), revenues contracted by -2.1%. For the first nine months of the year, growth stands at -2.3%, both on a reported basis and at constant exchange rates.

    Clients remained focused on driving efficiencies through large digital transformation programs, at the expense of discretionary deals. This is fueling strong demand for Capgemini’s Cloud and Data & AI/Gen AI services, as well as for digital core modernization and intelligent supply chain services that are key focus themes in the current environment.

    Bookings totaled €5,222 million in Q3 2024, down -0.8% at constant exchange rates, leading to a book-to-bill ratio of 0.97 for the period. Generative AI bookings amounted to around €600 million over the last 9 months which represent around 3.5% of Group bookings.

    OPERATIONS BY REGION

    In the Group’s largest regions, Q3 growth rates remained similar to Q2. Overall, this reflects the continued recovery in Financial Services across all regions combined with, as anticipated, a slowdown in the Manufacturing sector.

    At constant exchange rates, revenues in the North America region (28% of Group revenues in Q3 2024) decreased by -3.9% year-on-year. Financial Services further improved, yet still posting a year-on-year decline in Q3. Overall, the revenue contraction was driven by the Consumer Goods & Retail, Energy & Utilities, and Public sectors.

    Revenues in the United Kingdom and Ireland region (13% of Group revenues) returned to positive growth at +0.4%. The continued dynamism of the Energy & Utilities sector and a resilient Manufacturing sector outweighed the contraction in the Consumer Goods & Retail sector.

    Revenues in France (19% of Group revenues) decreased by -2.5%. Growth in the Public sector, along with positive momentum in TMT (Telecoms, Media & Technology), were more than offset by the slowdown of the Manufacturing sector.

    Revenues in the Rest of Europe region (31% of Group revenues) increased by +0.6%. Solid growth in Financial Services, as well as continued dynamism in Energy & Utilities and Public sector, made up for the contraction in the Manufacturing and TMT sectors.

    Lastly, revenues in the Asia-Pacific and Latin America region (9% of Group revenues) were down -2.2%. In the Asia-Pacific region, strong momentum in the Public sector and improving Financial Services were more than offset by visible weakness in the Consumer Goods & Retail and Manufacturing sectors. Growth acceleration in Latin America was mostly driven by the Consumer Goods & Retail sector.

    OPERATIONS BY BUSINESS        

    In Q3 2024, at constant exchange rates, the growth in Strategy & Transformation services (9% of the Group’s total revenues* in Q3 2024) further strengthened to +6.5% year-on-year. This reflects continued client demand for strategic consulting on their transition towards a more digital and sustainable model as well as their unwavering interest in the broad AI and Gen AI opportunities.

    In Applications & Technology services (63% of the Group’s total revenues and Capgemini’s core business), growth rates improved by 170 basis points compared to Q2, to -1.2% year-on-year in Q3.

    Lastly, Operations & Engineering total revenues (28% of the Group’s total revenues) decreased by -3.4% primarily driven by the contraction in Infrastructure Services and, to a lesser extent, Engineering services.

    HEADCOUNT

    The Group’s total headcount stands at 338,900 as at September 30, 2024, down -1.1% year-on-year and up +0.6% since the end of June. The offshore workforce stands at 194,400 employees or 57% of the total headcount.

    OUTLOOK

    The Group’s financial targets for 2024 are updated as follows:

    • Revenue growth of -2.0% to -2.4% at constant currency (was -0.5% to -1.5%);
    • Operating margin of 13.3% to 13.4% (was 13.3% to 13.6%);
    • Organic free cash-flow of around €1.9 billion (unchanged).

    The inorganic contribution to growth should be 40 basis points.

    CONFERENCE CALL

    Aiman Ezzat, Chief Executive Officer, accompanied by Nive Bhagat, Chief Financial Officer, and Olivier Sevillia, Chief Operating Officer, will present this press release during a conference call in English to be held today at 8.00 a.m. Paris time (CET). You can follow this conference call live via webcast at the following link. A replay will also be available for a period of one year.

    All documents relating to this publication will be posted on the Capgemini investor website at https://investors.capgemini.com/en/.

    PROVISIONAL CALENDAR

    February 18, 2025        FY 2024 results
    April 29, 2025        Q1 2025 revenues
    May 7, 2025        Shareholders’ Meeting
    July 30, 2025        H1 2025 results

    DISCLAIMER

    This press release may contain forward-looking statements. Such statements may include projections, estimates, assumptions, statements regarding plans, objectives, intentions and/or expectations with respect to future financial results, events, operations and services and product development, as well as statements, regarding future performance or events. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “projects”, “may”, “would”, “should” or the negatives of these terms and similar expressions. Although Capgemini’s management currently believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking statements are subject to various risks and uncertainties (including, without limitation, risks identified in Capgemini’s Universal Registration Document available on Capgemini’s website), because they relate to future events and depend on future circumstances that may or may not occur and may be different from those anticipated, many of which are difficult to predict and generally beyond the control of Capgemini. Actual results and developments may differ materially from those expressed in, implied by or projected by forward-looking statements. Forward-looking statements are not intended to and do not give any assurances or comfort as to future events or results. Other than as required by applicable law, Capgemini does not undertake any obligation to update or revise any forward-looking statement.

    This press release does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, the United States or any other jurisdiction.

    ABOUT CAPGEMINI

    Capgemini is a global business and technology transformation partner, helping organizations to accelerate their dual transition to a digital and sustainable world, while creating tangible impact for enterprises and society. It is a responsible and diverse group of 340,000 team members in more than 50 countries. With its strong over 55-year heritage, Capgemini is trusted by its clients to unlock the value of technology to address the entire breadth of their business needs. It delivers end-to-end services and solutions leveraging strengths from strategy and design to engineering, all fueled by its market leading capabilities in AI, cloud and data, combined with its deep industry expertise and partner ecosystem. The Group reported 2023 global revenues of €22.5 billion.

    Get the Future You Want | www.capgemini.com

    * *

    *

    APPENDIX3F1

    BUSINESS CLASSIFICATION

    • Strategy & Transformation includes all strategy, innovation and transformation consulting services.
    • Applications & Technology brings together “Application Services” and related activities and notably local technology services.
    • Operations & Engineering encompasses all other Group businesses. These comprise Business Services (including Business Process Outsourcing and transaction services), all Infrastructure and Cloud services, and R&D and Engineering services.

    DEFINITIONS

    Organic growth or like-for-like growth in revenues is the growth rate calculated at constant Group scope and exchange rates. The Group scope and exchange rates used are those for the reported period. Exchange rates for the reported period are also used to calculate growth at constant exchange rates.

    Reconciliation of growth rates Q1 2024 Q2 2024 Q3 2024 9M 2024
    Organic growth -3.6% -2.3% -2.1% -2.7%
    Changes in Group scope +0.3 pts +0.4 pts +0.5 pts +0.4 pts
    Growth at constant exchange rates -3.3% -1.9% -1.6% -2.3%
    Exchange rate fluctuations -0.2 pts +0.4 pts -0.3 pts -0.0 pts
    Reported growth -3.5% -1.5% -1.9% -2.3%

    When determining activity trends by business and in accordance with internal operating performance measures, growth at constant exchange rates is calculated based on total revenues, i.e., before elimination of inter-business billing. The Group considers this to be more representative of activity levels by business. As its businesses change, an increasing number of contracts require a range of business expertise for delivery, leading to a rise in inter-business flows.

    Operating margin is one of the Group’s key performance indicators. It is defined as the difference between revenues and operating costs. It is calculated before “Other operating income and expense” which include amortization of intangible assets recognized in business combinations, expenses relative to share-based compensation (including social security contributions and employer contributions) and employee share ownership plan, and non-recurring revenues and expenses, notably impairment of goodwill, negative goodwill, capital gains or losses on disposals of consolidated companies or businesses, restructuring costs incurred under a detailed formal plan approved by the Group’s management, the cost of acquiring and integrating companies acquired by the Group, including earn-outs comprising conditions of presence, and the effects of curtailments, settlements and transfers of defined benefit pension plans.

    Normalized net profit is equal to profit for the year (Group share) adjusted for the impact of items recognized in “Other operating income and expense”, net of tax calculated using the effective tax rate. Normalized earnings per share is computed like basic earnings per share, i.e., excluding dilution.

    Organic free cash flow is equal to cash flow from operations less acquisitions of property, plant, equipment and intangible assets (net of disposals) and repayments of lease liabilities, adjusted for cash out relating to the net interest cost.

    Net debt (or net cash) comprises (i) cash and cash equivalents, as presented in the Consolidated Statement of Cash Flows (consisting of short-term investments and cash at bank) less bank overdrafts, and also including (ii) cash management assets (assets presented separately in the Consolidated Statement of Financial Position due to their characteristics), less (iii) short- and long-term borrowings. Account is also taken of (iv) the impact of hedging instruments when these relate to borrowings, intercompany loans, and own shares.

    REVENUES BY REGION

      Revenues
    (in millions of euros)    		   Year-on-year growth
      Q3 2023 Q3 2024   Reported At constant exchange rates
    North America 1,608 1,530   -4.9% -3.9%
    United Kingdom and Ireland 676 690   +2.1% +0.4%
    France 1,045 1,019   -2.5% -2.5%
    Rest of Europe 1,633 1,646   +0.8% +0.6%
    Asia-Pacific and Latin America 518 492   -5.0% -2.2%
    TOTAL 5,480 5,377   -1.9% -1.6%
      Revenues
    (in millions of euros)    		   Year-on-year growth
      9 months
    2023    		 9 months
    2024    		   Reported At constant exchange rates
    North America 4,896 4,638   -5.3% -4.9%
    United Kingdom and Ireland 2,062 2,070   +0.4% -1.8%
    France 3,353 3,264   -2.6% -2.6%
    Rest of Europe 5,105 5,116   +0.2% +0.1%
    Asia-Pacific and Latin America 1,490 1,427   -4.2% -1.9%
    TOTAL 16,906 16,515   -2.3% -2.3%

    REVENUES BY BUSINESS

      Total revenues*
    (% of Group revenues)    		 Year-on-year growth at constant exchange rates in total revenues of the business
      Q3 2024
    Strategy & Transformation 9% +6.5%
    Applications & Technology 63% -1.2%
    Operations & Engineering 28% -3.4%
      Total revenues*
    (% of Group revenues)    		 Year-on-year growth at constant exchange rates in total revenues of the business
      9 months
    2024
    Strategy & Transformation 9% +3.9%
    Applications & Technology 62% -2.7%
    Operations & Engineering 29% -2.3%

    1 Note that in the appendix, certain totals may not equal the sum of amounts due to rounding adjustments.

    Attachments

    The MIL Network –

  • MIL-OSI Australia: National Transfer Pricing Conference: Intragroup financing — More than just whether the price is right

    Source: Allens Insights

    Toby Knight, Anna Sartori and Gidon Waller have published a paper examining the application of transfer pricing, the debt deduction creation rules (DDCR), the new thin capitalisation rules and the general anti-avoidance rule (GAAR) to intragroup financing arrangements.

    The paper was presented by Toby and Anna at the Tax Institute’s National Transfer Pricing Conference held in Melbourne in October 2024. It summarises the relevant law and guidance of the above regimes, considers how each regime could apply to intragroup financing arrangements in particular, and considers possible interactions between each regime.

    A copy of the paper can be accessed below.

    MIL OSI News –

  • MIL-OSI Asia-Pac: Opening address by Permanent Secretary for Financial Services and the Treasury (Financial Services) at ASIFMA’s 5th Annual Sustainable Finance Conference: Enabling Transition Finance in Asia (English only) (with photo)

    Source: Hong Kong Government special administrative region

         Following is the opening address by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Ms Salina Yan, at the ASIFMA’s 5th Annual Sustainable Finance Conference: Enabling Transition Finance in Asia today (October 30):
     
    Peter (Chief Executive Officer of the Asia Securities Industry & Financial Markets Association (ASIFMA), Mr Peter Stein), Boris (Managing Director, Head of Institutional Banking Group of DBS Bank (Hong Kong) Limited, Mr Boris Chan), distinguished guests, ladies and gentlemen,
     
         Good morning. It is my great pleasure to join you today at the 5th Annual Sustainable Finance Conference organised by ASIFMA. ASIFMA’s events always draw an inquisitive and enthusiastic crowd with a lot of brain power. Today is no exception, but perhaps with somewhat more seriousness than usual as we are addressing the serious topic of enabling transition finance in the sustainability pathway towards net zero carbon emissions.  
     
         The seriousness is compounded when one reads the Asian Development Bank’s thematic report on “Asia in the Global Transition to Net Zero” published last year. According to the report, developing Asia accounted for 44 per cent of global greenhouse gas (GHG) emissions in 2019, and growth in the region still tends to rely substantially on emission-intensive activities. Obviously, there is a huge need for transition finance to assist heavy-emitting industries and economic activities to go down the path of net zero while managing economic development implications. Market estimates put the funding gap at over US$3 to 4 trillion in annual investment over the next three decades in the region. Policy trade-offs will certainly be involved in finding the right solutions.
     
         For this, I note a keyword in the topic of the Conference today and that is “enabling”. Hong Kong, being an international financial centre as well as a premier sustainable finance hub, is well-positioned to play important enabling roles in expediting Asia’s transition to net zero in an enabling or conducive environment. 
     
         With well-functioning capital markets offering a wide range of investment products and an international pool of financial services professionals, Hong Kong can contribute to mobilising international capital to finance transition initiatives in the region.  We are already doing so and enriching our ecosystem. For example, the number of ESG funds authorised by the Securities and Futures Commission (SFC) has increased significantly in recent years, with assets under management reaching close to US$170 billion as of June this year.
     
         The bond market also helps issuers raise sustainable financing in support of low-carbon transition efforts. The volume of green and sustainable bonds arranged in Hong Kong increased by about five times from around US$6 billion in 2019 to almost US$30 billion last year, topping the Asian market from 2021 to 2023. Among these, the Government Green Bond Programme has issued bonds of various tenors denominated in different currencies including RMB, euro and USD. The programme has recently been expanded to cover sustainable projects. The bonds issuances have been well received by institutional and retail investors alike, and have taken tokenisation form for two recent tranches. 
     
         Two points specifically on transition finance:
     
    (a) First, we published the first edition of the Hong Kong Taxonomy for Sustainable Finance in May this year to provide a clear set of definitions or classification of green activities for application by the industry in their green transition journey. It aligns with the two mainstream taxonomies of the Mainland and the European Union, and currently encompasses 12 economic activities under four sectors of power generation, transportation, construction, and water and waste management. The Taxonomy is now under the next phase development, where the scope of sectors and economic activities will be expanded to cover transition activities as well. The Hong Kong Monetary Authority (HKMA) plans to conduct a public consultation on the updated taxonomy prototype in the first half of 2025.
     
    (b) Second, to cater for the increasingly significant need for transition finance in the region, we have expanded the scope of the Green and Sustainable Finance Grant Scheme to cover transition bonds and loans, helping to incentivise relevant industries in the region to make use of Hong Kong’s transition financing platform towards the decarbonisation mission. Since its inception in 2021 to mid-October this year, we have granted around $280 million to 470 green and sustainable debt instruments under the Scheme.
     
            Moving into another subject which is important to today’s topic, data clarity and transparency is often cited as one of the primary challenges hindering the development of transition finance. Hong Kong operates a highly open and internationalised market aligning with international standards and best practices. We stand ready to promote the adoption of data transparency in the market to facilitate and encourage more transition financing activities. 
     
         Earlier this month, for example, the Hong Kong Code of Conduct for ESG Ratings and Data Products Providers was published by an industry working group sponsored by the SFC. Its aim is to establish and promote a globally consistent, interoperable, and proportionate voluntary code for providers offering ESG ratings and data products and services in Hong Kong. The Code was modelled on international best practices recommended by the International Organization of Securities Commissions (IOSCO). It is intended to enhance transparency of methodologies for ESG ratings and data products and improve standards generally across the market with a view to combating greenwashing and instilling integrity in the growing green and sustainable finance ecosystem.
     
         Another important measure on standards is our commitment to launch a roadmap on the full adoption of the ISSB Standards on sustainability disclosure within this year, leading Hong Kong to be among the first jurisdictions in the world to align its local requirements with ISSB Standards. The Hong Kong Institute of Certified Public Accountants has already issued the exposure drafts for consultation. I am sure they will come up with final Hong Kong standards aligning with the ISSB Standards soon. I know that the afternoon session of this Conference has scheduled a dedicated panel to dive deep into this subject. I will spare the detail here.

         Blended finance is an evolving concept and is quickly developing. An OECD (Organisation for Economic Co-operation and Development) report defines it as a combination of official development finance, private philanthropic funds and commercial finance where the principal purpose is commercial rather than development. I look forward to the Panel’s discussion on this. I would note here that as Asia’s primary asset and wealth management hub for international investors, Hong Kong is well placed to harness the finance power of the public and private sectors. 
     
         On the home front, the HKMA launched last week the Sustainable Finance Action Agenda, setting out its goals and actions to be taken to further support green and sustainable financing needs in Asia and globally. Under the Agenda, one of the action areas is investment in a sustainable future, under which the HKMA aims to achieve net-zero emissions for the investment portfolio of the Exchange Fund by 2050 through continuing to actively expand the scope and variety of its sustainable investments, particularly those supporting the theme of climate transition across the public and private markets. The Exchange Fund will also deepen its focus on transition opportunities and mobilise stakeholders to actively support this effort through stewardship and engagement.
     
         Another emerging source of funds to support sustainable initiatives comes from philanthropy and impact investing of family offices. In Hong Kong, the philanthropic landscape is underscored by the existence of more than 10 000 charities that have been established in Hong Kong, reflecting a diverse and robust ecosystem of giving. Meanwhile, the global impact investing market, valued at about US$1.6 trillion, attaches growing recognition of the need to address critical challenges such as climate change. We have seen growing interest from family offices in impact investing as they do not just allocate funds for charitable purposes but also seek financial returns and measurable social outcomes. To this end, we will soon consult the industry on proposals to enhance the tax arrangements for funds and single family offices, including expanding the definition of “fund” to cover pension fund and endowment fund, and include emission derivatives and emission allowance as eligible exemption items.
     
         Added to this, Hong Kong is exceptionally well placed to serve the sustainable initiatives and transition needs of entities on the Mainland. Various Mainland local governments including Shenzhen, Hainan Province and Guangdong Province have issued offshore RMB local government bonds including green, blue, sustainability and social bonds in Hong Kong over the past few years. And Core Climate, our carbon credit marketplace, is exploring co-operation initiatives with its Mainland counterparts. We will certainly contribute our best to the country’s drive to achieve the goal of peaking carbon emissions by 2030 and reaching net zero by 2060. 
     
         Ladies and gentlemen, all these being said, a lot remains to be done. Hong Kong takes our 2050 net zero commitment very seriously and has set up a high-level steering committee comprising policy bureaux with both environmental protection and financial services policy responsibilities, and all financial regulators to co-ordinate and take forward relevant initiatives. Our Financial Secretary is also chairing the Green Technology and Finance Development Committee. We look forward to having your advice and participation in the journey. On this note, I wish you all a rewarding day at the Conference today. Thank you.   

    MIL OSI Asia Pacific News –

  • MIL-OSI: RIBER: Solid Business Growth at End-September 2024

    Source: GlobeNewswire (MIL-OSI)

    SOLID BUSINESS GROWTH AT END-SEPTEMBER 2024

    • Revenues up +14% to €18.5m
    • Order book strengthened to €38.3m (+14%)

    Bezons, October 30, 2024 – 8:00am – RIBER, the global leader for molecular beam epitaxy (MBE) equipment serving the semiconductor industry, is reporting its revenues for the year to end-September 2024.

    Change in revenues

    €m 2024 2023 Change
    First quarter 4.5 3.7 +20 %
    Second quarter 9.3 8.5 +10 %
    Third quarter 4.7 4.0 +19 %
    Total 9-month revenues 18.5 16.2 +14 %
    At end-September (€m) 2024 2023 Change
    Systems 12.3 9.6 +28 %
    Services and accessories 6.2 6.6 -6 %
    Total 9-month revenues 18.5 16.2 +14 %

    At September 30, 2024, RIBER revenues amounted to €18.5m, up +14% compared with the same period in 2023, reflecting the company’s strengthened position in the MBE market for both research and industrial production.

    Systems revenues came to €12.3 m, up +28% with the delivery of 4 machines, compared with 5 machines in the first nine months of 2023.

    Revenues for services and accessories totaled €6.2 m, down 6% compared with the previous year.

    The geographical breakdown of revenues at end-September 2024 was as follows: Asia 68%, Europe 25% and North America 6%.

    Order book developments

    At end-September (€m) 2024 2023 Change
    Systems 31,9 27,6 +16%
    Services and accessories 6,4 6,1 +6%
    Total order book 38,3 33,6 +14%

    The systems order book came to €31.9m, up +16%, with a total of 13 systems, including 8 production machines. This figure does not include the order for a production system announced on October 21, 2024.

    The services and accessories order book reached €6.4m, up +6% from the previous year.

    As a result, at September 30, 2024, the total order book came to €38.3m, up +14% compared with the same period in 2023.

    Outlook

    Based on the fourth-quarter delivery schedule, RIBER expects to exceed €40m in full-year revenues, along with further improvements in earnings.

    Against a favorable backdrop of growth in the compound semiconductor market, new orders should continue to be booked before the end of the year.

    Next date: 2024 full-year revenues will be released on Wednesday January 29, 2025 (before start of trading).

    About RIBER

    Founded in 1964, RIBER is the global market leader for MBE – molecular beam epitaxy – equipment. It designs and produces equipment for the semiconductor industry, and provides scientific and technical support for its clients (hardware and software), maintaining their equipment and optimizing their performance and output levels.
    Accelerating the performance of electronics, RIBER’s equipment performs an essential role in the development of advanced semiconductor systems that are used in numerous applications, from information technologies to photonics (lasers, sensors, etc.), 5G telecommunications networks and research, including quantum computing.

    RIBER is a BPI France-approved innovative company and is listed on the Euronext Growth Paris market (ISIN: FR0000075954).
    www.riber.com

    Contacts

    RIBER : Annie Geoffroy| tel: +33 (0)1 39 96 65 00 | invest@riber.com

    CALYPTUS : Cyril Combe | tel: +33 (0)1 53 65 68 68 | cyril.combe@calyptus.net

    Attachment

    The MIL Network –

  • MIL-OSI Russia: The government has improved the mechanism for providing tax incentives for scientific research and development work

    Translation. Region: Russian Federation –

    Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

    The government continues to create favorable conditions for conducting research and development work. A decree has been signed establishing a new coefficient value, which reduces the base for calculating income tax.

    We are talking about expenses incurred in conducting research and development, which are excluded from the calculation base of the profit tax. They are classified as other expenses. Until now, the coefficient increasing them was equal to 1.5, now it will be equal to 2. Thus, the tax payments of organizations and enterprises will decrease, which will allow them to allocate more funds for conducting research.

    The list of research and development activities covered by this benefit is approved by the Government. Today, it includes several hundred types of work in 10 areas. Among them are “Nanosystems Industry”, “Information and Telecommunication Systems”, “Transport and Space Systems”, “Small- and Medium-Tonnage Chemistry”.

    The increase in the coefficient reducing the base for calculating income tax is provided for by the new version of the Tax Code. It was adopted by legislators in July 2024.

    The document will be published.

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

    MIL OSI Russia News –

  • MIL-OSI Asia-Pac: LCQ10: Electronic Tax Reserve Certificates Scheme

    Source: Hong Kong Government special administrative region

         Following is a question by the Hon Chan Yuet-ming and a written reply by the Secretary for Financial Services and the Treasury, Mr Christopher Hui, in the Legislative Council today (October 30):
     
    Question:
     
         The Inland Revenue Department has implemented the Tax Reserve Certificates system for many years to help taxpayers save up and earn interest for tax payment, and introduced the Electronic Tax Reserve Certificates Scheme (the Scheme) in 1999. In this connection, will the Government inform this Council:
     
    (1) of the effectiveness of the Scheme at present, and set out in a table (i) the total amount of sales, (ii) the number of purchasers, (iii) the amount of sales per capita, (iv) the distribution of sales by age groups, and (v) the amount of redemptions under the Scheme in each of the past five years;
     
    (2) as there are views that, under the influence of external factors, the time deposit rates of banks in Hong Kong are still at a high level, whether the Government has assessed if such a situation will affect the sale of the Scheme; and
     
    (3) as the latest per annum interest rate announced in the Tax Reserve Certificates (Rate of Interest) (Consolidation) Notice has been changed from the previous rate of 0.8833 per cent to 0.8 per cent, and the Scheme will earn interest for a period of 36 months only, its return is much lower than that of the time deposit schemes of banks in Hong Kong in recent years as well as that of other medium and low-risk wealth management products, whether the Government will conduct a review of the contents of the Scheme or step up the publicity work, so as to enhance the effectiveness of the Scheme?
     
    Reply:
     
    President,
     
         At present, the Inland Revenue Department (IRD) issues two types of Tax Reserve Certificate (TRCs), namely ordinary TRCs that are purchased by taxpayers who wish to prepare for tax payment in future, and TRCs for “Conditional Standover Order” (“conditional TRCs”) that the Commissioner of Inland Revenue requires taxpayers who have objected to their tax assessments to purchase in order to cover the total amount or part of the tax in dispute. An ordinary TRC will bear the interest rate prevailing at the date of purchase and will earn interest only when the holder pays for the tax. For a conditional TRC, interest is payable from the date of its issue to the date of final determination of the objection or appeal. The interest rate is calculated based on the rates in force from time to time over the tenure of the TRC. Upon final determination of the objection to or appeal against the tax assessment, IRD will pay the interest on the part of the capital sum eventually repaid to the taxpayer.
     
         The interest rate on TRCs is reviewed every month based on the average of the prevailing interest rate for the twelve-month time deposits for $100,000 to $499,999 offered by the three note-issuing banks. With effect from October 7, 2024, the interest rate on TRCs is 0.8 per cent per annum and applies to all ordinary TRCs issued on or after the above date until further notice.
     
         IRD has launched the Electronic TRCs Scheme since 1999 to replace paper version of ordinary TRCs and provide TRC users with a full range of electronic services, including a variety of electronic channels for purchasing TRCs (monthly bank autopay, telephone, internet and ATM), auto tax payment service, etc. The objective of the Electronic TRCs Scheme is to facilitate the purchase of TRCs by taxpayers and increase the flexibility by allowing them to choose the time, method of buying TRCs, etc. Users of the Electronic TRCs Scheme may also enjoy auto tax payment service to ensure that tax payments are always made on time and avoid any late payment penalty.
     
         My reply to Hon Chan Yuet-ming’s question is as follows:
     
    (1) Since a taxpayer may purchase more than one TRC in each financial year, IRD does not maintain record on the number of purchasers of TRCs, average amount of each purchaser and the age profile of purchasers. The total sales amount, number of certificates sold, average amount per certificate and the total redemption amount of ordinary TRCs for the last five financial years are tabulated below:
     
    Table 1

    Year
    Total sales amount
    ($’000)
    No. of certificates sold
    Average amount per certificate
    ($)
    Total redemption amount
    ($’000)

    2019-20
    467,041
    86 766
    5,383
    461,016

    2020-21
    452,352
    89 944
    5,029
    443,812

    2021-22
    430,415
    84 122
    5,117
    466,587

    2022-23
    423,404
    80 951
    5,230
    448,218

    2023-24
    409,765
    79 672
    5,143
    416,804

     
         The total sales amount, number of certificates sold, average amount per certificate and the total redemption amount of conditional TRCs for the last five financial years are tabulated below:
     
    Table 2

    Year
    Total sales amount
    ($’000)
    No. of certificates sold
    Average amount per certificate
    ($)
    Total redemption amount
    ($’000)

    2019-20
    2,514,175
    1 196
    2,102,153
    2,401,318

    2020-21
    2,896,920
    1 344
    2,155,446
    2,781,430

    2021-22
    3,133,413
    1 092
    2,869,426
    3,486,200

    2022-23
    2,413,492
    946
    2,551,260
    3,028,070

    2023-24
    3,008,748
    1 058
    2,843,807
    3,093,966

     
    (2) Since the rate hike cycle in 2022, the total sales amount of ordinary TRCs slightly fell from $430 million in 2021-22 to $409 million in 2023-24, representing a decrease of 4.8 per cent. The number of certificates sold slightly fell from 84 122 in 2021-22 to 79 672 in 2023-24, representing a decrease of 5.3 per cent. It can therefore be seen that the overall sales of TRCs have not changed significantly due to external factors or interest rates.
     
         As for conditional TRCs, they are purchased by taxpayers at the request of the Commissioner of Inland Revenue and therefore their sales are not related to changes in interest rates.
     
    (3) The existing mechanism for determining the TRC rate has already ensured that changes in interest rate of time deposits offered by the note-issuing banks are timely reflected in TRCs. Since the two types of TRCs have their stated purpose and are not intended as a tool to provide investment returns, we do not consider it appropriate to adjust the interest rate on TRCs by making reference to the interest rates of wealth management products. The Government has no intention of setting a target for the sale of TRCs. We respect the choice of taxpayers to purchase ordinary TRCs.
     
         On publicity, an application form for Electronic TRCs Scheme is available on the IRD’s website for members of the public to download. The Brief Guide to Taxes of IRD and the websites of GovHK and Cross-boundary Public Services also include information on the Electronic TRCs Scheme. IRD will add a new link on the Electronic TRCs Scheme at a prominent position on its website to facilitate members of the public to search for relevant information.

    MIL OSI Asia Pacific News –

  • MIL-OSI: CSW Industrials Reports Record Fiscal 2025 Second Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    DALLAS, Oct. 30, 2024 (GLOBE NEWSWIRE) — CSW Industrials, Inc. (Nasdaq: CSWI or the “Company”) today reported record results for the fiscal 2025 second quarter period ended September 30, 2024.

    Fiscal 2025 Second Quarter Highlights (comparisons to fiscal 2024 second quarter)

    • Total revenue increased 11.9% to an all-time quarterly high of $227.9 million, driven by organic growth of 6.2% and inorganic growth of 5.7% from the recent acquisitions of Dust Free and PSP Products
    • Net income attributable to CSWI increased 20.0% to $36.1 million, compared to $30.1 million
    • Earnings per diluted share (“EPS”) increased 17.1% to $2.26, compared to $1.93
    • EBITDA grew 14.8% to $60.8 million, including margin expansion of 70 bps to 26.7%
    • Cash flow from operations increased 49.5% to $66.8 million, compared to $44.7 million
    • Issued and sold 1.265 million shares of stock at $285 per share in a successful follow-on equity offering, resulting in net proceeds of $347.4 million
    • Paid down $115.0 million, or all outstanding debt on the revolver following the equity offering, further improving the strength of the balance sheet

    Fiscal 2025 First Half Highlights (comparisons to fiscal 2024 first half)

    • Total revenue increased 11.6% to $454.1 million, of which 7.0%, or $28.3 million was organic growth, and $18.8 million, or 4.6%, was inorganic growth from recent acquisitions
    • Net income attributable to CSWI increased 23.0% to $74.6 million, as compared to $60.7 million
    • EPS improved 21.5% to $4.73, compared to $3.90
    • EBITDA increased 17.4% to $126.1 million, including margin expansion of 140 bps to 27.8%
    • Cash flow from operations increased 36.4% to $129.5 million, compared to $94.9 million
    • Invested $32.3 million in acquisitions and $8.6 million in organic capital expenditures, while returning total cash of $15.4 million to shareholders through share repurchases of $8.9 million and dividends of $6.5 million

    Comments from the Chairman, President, and Chief Executive Officer

    Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, “I am pleased to announce these outstanding results for the fiscal second quarter of 2025. CSWI’s record revenue for the quarter was driven by organic volume growth, pricing actions, and our strategic acquisitions of Dust Free and PSP Products. The team also achieved all-time record operating cash flow and record fiscal second quarter net income, earnings per diluted share, and EBITDA for the quarter.”

    Armes continued, “During the second fiscal quarter 2025, CSWI issued equity to the public for the first time in our history. Strong investor demand, after the public announcement of our follow-on equity offering, allowed the Company to issue a total of 1.265 million shares of common stock proving that our track record of building long-term shareholder value is attractive to both pre-existing and new shareholders, while also being accretive to our earnings due to the full repayment of our debt and investment in interest-bearing accounts. In addition, our disciplined capital allocation philosophy led us to acquire PSP Products in the quarter, adding innovative products within the profitable electrical end market for CSWI. Subsequent to quarter end, the Company announced a mid-year, 14% increase in our quarterly cash dividend, reflecting our strong balance sheet, cash flows, and profitability.”

    Fiscal 2025 Second Quarter Consolidated Results

    Fiscal second quarter revenue was $227.9 million, a $24.3 million or 11.9% increase over the prior year period. Total revenue growth included $12.7 million of organic growth contributed from all operating segments (6.2% of the total 11.9% growth) due to increased volume and pricing actions, with the remainder contributed by the Dust Free and PSP acquisitions, which are both reported in the Contractor Solutions segment.

    Gross profit in the fiscal second quarter was $103.9 million, representing 14.2% growth over $91.0 million in the prior year period. Gross profit margin expanded 90 bps to 45.6%, compared to 44.7% in the prior year period. The gross profit margin increase was primarily a result of volume leverage and pricing actions.

    Operating expenses as a percentage of revenue were 23.0% in the current period, which was below the prior year period of 24.0%. Operating expenses were $52.4 million in the current year period, compared to $49.0 million in the prior year period and we were able to leverage our revenue growth while absorbing additional expenses related to the recent acquisitions, spending on business development and integration, and investing in team members.

    Operating income in the current period was $51.5 million, compared to $42.0 million in the prior year period. Operating income as a percentage of revenue was 22.6% in fiscal 2025 second quarter, compared to 20.6% in the prior year period. The 200 bps improvement in operating income margin was a result of the previously mentioned improvement in the gross profit margin and leverage on operating expenses.

    Interest expense was $1.3 million, compared to interest expense of $3.3 million in the prior year period. The decrease of $2.0 million was a result of a lower debt balance throughout the quarter and paying off the outstanding balance borrowed against our revolver and interest income earned from the net proceeds of the equity offering.

    Other expense was $0.7 million, compared to other income of $1.9 million in the prior year period. The change in other expense of $2.6 million was primarily related to a gain of $1.4 million reported in the previous period in connection with the sale of a property previously held for investment that did not recur, in addition to losses arising from transactions in currencies other than functional currencies.

    Net income attributable to CSWI (net of non-controlling interest in the joint venture) increased 20.0% to $36.1 million, compared to the prior year period of $30.1 million, and EPS increased 17.1% to $2.26, compared to $1.93 in the prior year period.

    Fiscal 2025 second quarter EBITDA increased 14.8% to $60.8 million, up from $53.0 million in the prior year period. EBITDA margin expanded 70 bps to 26.7%, compared to 26.0% in the prior year period.

    During the fiscal second quarter 2025, the Company issued equity to the public for the first time. On September 4, 2024, CSWI announced the commencement of an underwritten public offering of one million shares of common stock. The following day, the Company announced the upsize of the public offering to 1.1 million shares of common stock at a price of $285 per share, plus an option for the underwriters to purchase up to an additional 165 thousand shares. In the aggregate, CSWI was able to issue and sell 1.265 million shares of common stock at $285 for proceeds of approximately $347.4 million, net of underwriting discount and expenses incurred directly related to the offering. The follow-on equity offering increased the Company’s weighted average shares outstanding, used in determining the diluted EPS, by 336 thousand for the fiscal 2025 second quarter and 169 thousand for the first half of fiscal 2025.

    During the fiscal second quarter, the Company paid down $115.0 million of debt, resulting in no borrowings outstanding under the revolving line of credit at quarter end, utilizing the record quarterly cash flows from operations of $66.8 million and the cash received from our follow-on equity offering. Cash flows from operations benefited from a $16.8 million tax payment deferral from fiscal first half 2025 to fiscal third quarter 2025 under a temporary federal tax relief related to the severe storms and flooding in Texas in early 2024.

    Following quarter-end, the Company announced its twenty-third consecutive regular quarterly cash dividend. This dividend was increased by $0.03, or 14.3%, from the prior quarter to $0.24 per share due to our strong balance sheet, cash flows and profitability, and will be paid on November 8, 2024, to shareholders of record on October 25, 2024.

    The Company’s effective tax rate for the fiscal second quarter was 26.1%. The third quarter GAAP tax rate may be lower than average, due to a potential $3.6M release of uncertain tax position reserves upon statue expiration of several pre-acquisition tax returns for TRUaire and Falcon.

    Fiscal 2025 Second Quarter Segment Results

    The Contractor Solutions segment revenue was $158.8 million, an $18.9 million or 13.5% increase over the prior year period, comprised of organic growth of $7.3 million (5.2% of the total 13.5% growth) driven by increased organic unit volumes and pricing actions, and inorganic growth of $11.6 million from the recent acquisitions of Dust Free and PSP Products. As compared to the prior year period, net revenue growth was driven by the HVAC/R, electrical, and plumbing end markets. Segment operating income improved to $46.3 million, compared to $39.0 million in the prior year period. The incremental profit resulted from revenue growth, gross profit leverage, and the inclusion of recently acquired businesses and was partially offset by increased spending on business integrations, strategic development activities, and employee compensation. Segment operating income margin in the fiscal second quarter was 29.1%, compared to 27.9% in the prior year period. Segment EBITDA in the fiscal second quarter was $53.7 million, or 33.8% of revenue, compared to $46.6 million, or 33.3% of revenue in the prior year period.

    The Specialized Reliability Solutions segment revenue was $38.5 million, a $1.9 million or 5.2% increase from the prior year period. The increased net revenue was driven by growth in the energy, rail transportation, and mining end markets. Segment operating income improved to $5.8 million, as compared to $4.8 million in the prior year period, an increase of 20.5%. Segment operating income margin in the fiscal second quarter improved to 15.1%, compared to the prior year period of 13.2% as a result of manufacturing efficiencies. Segment EBITDA improved by 13.2% to $7.1 million in the fiscal second quarter, with an EBITDA margin of 18.4% as compared to 17.2% in the prior year period.

    The Engineered Building Solutions segment revenue was a record $32.7 million, or 11.9% increase compared to $29.2 million in the prior year period, driven by strength in the backlog converting to revenue and market expansion. Segment operating income was $6.1 million, or 18.6% of revenue, compared to the prior year period of $5.2 million, or 17.9% of revenue, due to the management of operating expenses. Segment EBITDA and EBITDA margin also improved to $6.6 million and 20.1% in the fiscal second quarter, compared to $5.7 million and 19.5% in the prior year period.

    Fiscal 2025 First Half Consolidated Results

    Fiscal first half revenue was $454.1 million, representing 11.6% growth from $407.0 million in the prior year period, with growth in all three reporting segments. Of the $47.1 million total growth, $28.3 million (7.0% of the 11.6% total growth) resulted from organic growth, with the remainder ($18.8 million) contributed by the Dust Free and PSP acquisitions.

    Gross profit in the fiscal first half was $211.3 million, representing $28.2 million (15.4%) growth from $183.1 million in the prior year period, with the incremental profit resulting predominantly from revenue growth driven by increased unit volumes, a slight increase from pricing actions, and recent acquisitions. Gross profit as a percentage of sales was 46.5%, compared to 45.0% in the prior year period. Gross margin improvement was a result of leveraging the volume increase, favorable product mix and pricing actions.

    Operating expenses as a percentage of revenue were 23.1%, compared to 23.6% in the prior year period, as the increase in revenue growth outpaced operating expenses. Operating expenses in the current year period were $104.7 million, compared to $95.9 million in the prior year period. The additional expenses were related to employee compensation, expenses related to recent acquisitions including amortization of intangible assets, business development expenses, and integration costs.

    In the current period, operating income was $106.6 million, compared to $87.2 million in the prior year period. The incremental operating income resulted from the gross profit increase, partially offset by the operating expense increase as discussed above. Operating income margin in the current period improved to 23.5%, compared to the prior year period of 21.4%. During the comparative periods, the enhanced operating income margin was due to the improvement in gross profit margin combined with the management of operating expenses.

    Interest expense was $3.9 million, compared to interest expense of $7.3 million in the prior year period. The decrease of $3.4 million was a result of a lower debt balance throughout the first half of the year, then paying off the outstanding balance borrowed against our revolver and interest income earned from the net proceeds of the equity offering.

    Other expense was $0.4 million, compared to other income of $2.2 million in the prior year period. The change in other expense of $2.6 million was primarily related to the aforementioned gain of $1.4 million, in addition to losses arising from transactions in currencies other than functional currencies.

    In the current period, reported net income attributable to CSWI improved to $74.6 million, or $4.73 per diluted share. In the prior year period, reported net income attributable to CSWI was $60.7 million, or $3.90 per diluted share.

    Fiscal 2025 first half EBITDA increased 17.4% to $126.1 million from $107.4 million in the prior year period. EBITDA as a percentage of revenue improved 140 bps to 27.8%, compared to 26.4%, in the prior year period.

    Net cash provided by operating activities for the fiscal 2025 first half was a record $129.5 million, compared to $94.9 million in the prior year’s first half, as improved profit, and the tax payment deferrals led to a 36.4% increase compared to the prior year period. The Company paid down all $166.0 million of debt in the first half utilizing our record cash flow from operations and net proceeds from the follow-on equity offering.

    The Company’s effective tax rate for the fiscal first half was 26.2% on a GAAP basis.

    Fiscal 2025 First Half Segment Results

    Contractor Solutions segment revenue was $319.3 million, a $39.4 million or 14.1% increase from the prior year period. Revenue growth was comprised of inorganic growth from Dust Free and PSP acquisitions ($18.8 million, or 6.7%, of growth), and organic growth of $20.6 million (7.4% of the total 14.1% growth) due to increased unit volumes and a slight increase from pricing actions. As compared to the prior year period, net revenue growth was driven primarily by the HVAC/R, plumbing, and electrical end markets. Segment operating income in the current year period was $96.1 million, compared to $78.7 million in the prior year period. The incremental profit resulted from the increased unit volumes, favorable product mix, and the inclusion of recent acquisitions, partially offset by increased expenses related to employee compensation and business integrations as the segment builds the infrastructure to support continued growth, and increased expenses related to the inclusion of Dust Free and PSP in the current period, including amortization of intangible assets. Segment operating income margin was 30.1%, compared to 28.1% in the prior year period, driven primarily by increased operating leverage from the additional volume, favorable product mix and pricing actions, combined with the management of operating expenses. Segment EBITDA in the current period was $112.0 million, or 35.1% of revenue, compared to $93.4 million, or 33.4% of revenue in the prior year period.

    Specialized Reliability Solutions segment revenue grew to $75.3 million, a $1.0 million or 1.3% increase from the prior year period of $74.3 million, primarily due to pricing actions and increased unit volumes, with growth in the rail transportation end market and a decrease in mining. In the current year period, Segment operating income improved by 10.0% to $13.0 million, or 17.2% of revenue, compared to the prior year period of $11.8 million, or 15.9% of revenue. Improved segment operating income resulted primarily as a result of a favorable inventory adjustment in the first quarter as well as the increased volume. Segment EBITDA in the current period was $15.6 million, or 20.7% of revenue, compared to $14.7 million, or 19.8% of revenue in the prior year period.

    Engineered Building Solutions segment revenue was $63.6 million, a $6.8 million or 11.9% increase over the prior year period, primarily due to the conversion of backlog into revenue and market expansion. Segment operating income increased 24.4% to $11.8 million, or 18.6% of revenue, compared to the prior year period of $9.5 million, or 16.7% of revenue, due to the increased net revenue, improved gross margin as a result of operating leverage, and management of operating expenses. Segment EBITDA in the current period was $12.8 million, or 20.1% of revenue, compared to $10.4 million, or 18.3% of revenue in the prior year period.

    All percentages are calculated based upon the attached financial statements. Share count used in determining the diluted EPS is based on a weighted average of outstanding shares throughout the measurement period.

    Conference Call Information

    The Company will host a conference call today at 10:00 a.m. ET to discuss the results, followed by a question-and-answer session for the investment community. A live webcast of the call can be accessed at https://cswindustrials.gcs-web.com/. To access the call, participants may dial 1-877-407-0784, international callers may use 1-201-689-8560, and request to join the CSW Industrials earnings call.

    A telephonic replay will be available shortly after the conclusion of the call and until Wednesday, November 13, 2024. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671 and enter access code 13749338. The call will also be available for replay via webcast link on the Investors portion of the CSWI website www.cswindustrials.com.

    Safe Harbor Statement

    This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations, and financial performance and condition.

    The forward-looking statements included in this press release are based on our current expectations, projections, estimates, and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

    All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.

    Non-GAAP Financial Measures

    This press release includes an analysis of adjusted diluted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, adjusted operating income and free cash flows, which are non-GAAP financial measures of performance. Attributable to CSWI is defined to exclude the income attributable to the non-controlling interest in the Whitmore JV.

    CSWI utilizes adjusted EBITDA (earnings before interest, tax, depreciation and amortization) as an additional consolidated, non-GAAP financial measure, which consists of consolidated net income including income attributable to the non-controlling interest in the Whitmore JV, adjusted to remove the impact of income taxes, interest expense, depreciation, amortization and impairment, and significant nonrecurring items.

    For a reconciliation of these measures to the most directly comparable GAAP measures and for a discussion of why we consider these non-GAAP measures useful, see the “Reconciliation of Non-GAAP Measures” section of this release.

    About CSW Industrials, Inc.

    CSW Industrials is a diversified industrial growth company with industry-leading operations in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions. CSWI provides niche, value-added products with two essential commonalities: performance and reliability. The primary end markets we serve with our well-known brands include: HVAC/R, plumbing, electrical, general industrial, architecturally-specified building products, energy, mining, and rail transportation. For more information, please visit www.cswindustrials.com.

    Investor Relations

    Alexa Huerta
    Vice President, Investor Relations and Treasurer
    214-489-7113
    alexa.huerta@cswindustrials.com

    CSW INDUSTRIALS, INC.
    CONSOLIDATED STATEMENTS OF INCOME
    (unaudited)
     
        Three Months Ended
    September 30,    		   Six Months Ended
    September 30,
    (Amounts in thousands, except per share amounts)     2024       2023       2024       2023  
    Revenues, net   $ 227,926     $ 203,653     $ 454,103     $ 407,013  
    Cost of revenues     (124,025 )     (112,694 )     (242,781 )     (223,887 )
    Gross profit     103,901       90,959       211,322       183,126  
    Selling, general and administrative expenses     (52,352 )     (48,966 )     (104,712 )     (95,927 )
    Operating income     51,549       41,993       106,610       87,199  
    Interest expense, net     (1,341 )     (3,306 )     (3,861 )     (7,315 )
    Other income (expense), net     (677 )     1,926       (418 )     2,240  
    Income before income taxes     49,531       40,613       102,331       82,124  
    Provision for income taxes     (12,910 )     (10,431 )     (26,859 )     (20,885 )
    Net income     36,621       30,182       75,472       61,239  
    Less: Income attributable to redeemable noncontrolling interest     (570 )     (127 )     (828 )     (572 )
    Net income attributable to CSW Industrials, Inc.   $ 36,051     $ 30,055     $ 74,644     $ 60,667  
                     
    Net income per share attributable to CSW Industrials, Inc.                
    Basic   $ 2.27     $ 1.93     $ 4.75     $ 3.91  
    Diluted     2.26       1.93       4.73       3.90  
                     
    Weighted average number of shares outstanding:                
    Basic     15,866       15,544       15,701       15,532  
    Diluted     15,941       15,588       15,770       15,568  
    CSW INDUSTRIALS, INC.
    CONSOLIDATED BALANCE SHEETS
    (unaudited)
    (Amounts in thousands, except for per share amounts)   September 30, 2024   March 31, 2024
    ASSETS        
    Current assets:        
    Cash and cash equivalents   $ 273,220     $ 22,156  
    Accounts receivable, net of allowance for expected credit losses of $1,127 and $908, respectively     135,265       142,665  
    Inventories, net     183,731       150,749  
    Prepaid expenses and other current assets     17,281       15,840  
    Total current assets     609,497       331,410  
    Property, plant and equipment, net of accumulated depreciation of $109,891 and $103,515, respectively     95,128       92,811  
    Goodwill     255,899       247,191  
    Intangible assets, net     333,326       318,819  
    Other assets     65,446       53,095  
    Total assets   $ 1,359,296     $ 1,043,326  
             
    LIABILITIES AND EQUITY        
    Current liabilities:        
    Accounts payable   $ 63,191     $ 48,387  
    Accrued and other current liabilities     96,259       67,449  
    Total current liabilities     159,450       115,836  
    Long-term debt     —       166,000  
    Retirement benefits payable     1,093       1,114  
    Other long-term liabilities     148,404       125,298  
    Total liabilities     308,947       408,248  
    Commitments and contingencies (See Note 13)        
    Redeemable noncontrolling interest     20,183       19,355  
    Equity:        
    Common shares, $0.01 par value     177       164  
    Additional paid-in capital     494,535       137,253  
    Treasury shares, at cost (982 and 952 shares, respectively)     (106,636 )     (95,643 )
    Retained earnings     651,145       583,075  
    Accumulated other comprehensive loss     (9,055 )     (9,126 )
    Total equity     1,030,166       615,723  
    Total liabilities, redeemable noncontrolling interest and equity   $ 1,359,296     $ 1,043,326  
    CSW INDUSTRIALS, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (unaudited)
        Six Months Ended
    September 30,
    (Amounts in thousands)     2024       2023  
    Cash flows from operating activities:        
    Net income   $ 75,472     $ 61,239  
    Adjustments to reconcile net income to net cash provided by operating activities:        
    Depreciation     7,045       6,613  
    Amortization of intangible and other assets     13,214       11,730  
    Provision for inventory reserves     840       2,490  
    Provision for doubtful accounts     723       227  
    Share-based compensation     6,891       5,556  
    Net gain on disposals of property, plant and equipment     (39 )     (1,446 )
    Net pension benefit     33       33  
    Impairment of assets     —       91  
    Net deferred taxes     1,516       411  
    Changes in operating assets and liabilities:        
    Accounts receivable     11,301       (3,917 )
    Inventories     (25,282 )     7,739  
    Prepaid expenses and other current assets     (2,085 )     (5,478 )
    Other assets     153       (466 )
    Accounts payable and other current liabilities     39,626       8,975  
    Retirement benefits payable and other liabilities     61       1,139  
    Net cash provided by operating activities     129,469       94,936  
    Cash flows from investing activities:        
    Capital expenditures     (8,587 )     (7,785 )
    Proceeds from sale of assets held for investment     —       1,665  
    Proceeds from sale of assets     43       42  
    Cash paid for investments     (500 )     —  
    Cash paid for acquisitions     (32,305 )     (2,623 )
    Net cash used in investing activities     (41,349 )     (8,701 )
    Cash flows from financing activities:        
    Borrowings on line of credit     32,723       38,681  
    Repayments of line of credit and term loan     (198,723 )     (118,681 )
    Purchase of treasury shares     (12,287 )     (3,928 )
    Proceeds from equity issuance     347,407       —  
    Dividends     (6,523 )     (5,900 )
    Net cash provided by (used in) financing activities     162,597       (89,828 )
    Effect of exchange rate changes on cash and equivalents     347       (1,016 )
    Net change in cash and cash equivalents     251,064       (4,609 )
    Cash and cash equivalents, beginning of period     22,156       18,455  
    Cash and cash equivalents, end of period   $ 273,220     $ 13,846  

    Reconciliation of Non-GAAP Measures

    We use adjusted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, adjusted operating income, and adjusted EBITDA, together with financial measures prepared in accordance with GAAP, such as revenue, cost of revenue, operating expense, operating income and net income attributable to CSWI, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. Free cash flow is a non-GAAP financial measure and is defined as cash flow from operations less capital expenditures. We also believe these measures are useful for investors to assess the operating performance of our business without the effect of non-recurring items. In the following tables, there could be immaterial differences in amounts presented due to rounding.

    CSW Industrials, Inc.
    Reconciliation of Net Income Attributable to CSWI to EBITDA
    (unaudited)
                     
    (Amounts in thousands)   Three months ended
    September 30,    		   Six Months ended
    September 30,
          2024       2023       2024       2023  
    Net Income attributable to CSWI   $ 36,051     $ 30,055     $ 74,644     $ 60,667  
    Plus: Income attributable to redeemable noncontrolling interest     570       127       828       572  
    Net Income   $ 36,621     $ 30,182     $ 75,472     $ 61,239  
                     
    Adjusting Items:                
    Interest expense, net     1,341       3,306       3,861       7,315  
    Income tax expense     12,909       10,431       26,859       20,886  
    Depreciation & amortization     9,951       9,045       19,883       17,960  
    EBITDA   $ 60,823     $ 52,964     $ 126,075     $ 107,399  
    EBITDA % Revenue     26.7 %     26.0 %     27.8 %     26.4 %
    CSW Industrials, Inc.
    Reconciliation of Segment Operating Income to Segment EBITDA
    (unaudited)
               
    (Amounts in thousands) Three months ended September 30, 2024
      Contractor
    Solutions    		 Specialized
    Reliability
    Solutions    		 Engineered
    Building
    Solutions    		 Corporate
    and Other    		 Consolidated
    Revenue, net $ 158,835   $ 38,535   $ 32,673   $ (2,115 ) $ 227,927  
               
    Operating Income $ 46,254   $ 5,819   $ 6,082   $ (6,606 ) $ 51,550  
    % Revenue   29.1 %   15.1 %   18.6 %     22.6 %
               
    Adjusting Items:          
    Other income (expense), net   (543 )   (121 )   (12 )   (2 )   (678 )
    Depreciation & amortization   8,002     1,409     494     45     9,951  
    EBITDA $ 53,713   $ 7,108   $ 6,564   $ (6,562 ) $ 60,823  
    % Revenue   33.8 %   18.4 %   20.1 %     26.7 %
               
    (Amounts in thousands) Three months ended September 30, 2023
      Contractor
    Solutions    		 Specialized
    Reliability
    Solutions    		 Engineered
    Building
    Solutions    		 Corporate
    and Other    		 Consolidated
    Revenue, net $ 139,902   $ 36,614   $ 29,211   $ (2,075 ) $ 203,653  
               
    Operating Income $ 39,025   $ 4,829   $ 5,233   $ (7,095 ) $ 41,993  
    % Revenue   27.9 %   13.2 %   17.9 %     20.6 %
               
    Adjusting Items:          
    Other income (expense), net   575     (54 )   3     1,402     1,926  
    Depreciation & amortization   7,045     1,505     453     42     9,045  
    EBITDA $ 46,645   $ 6,280   $ 5,690   $ (5,651 ) $ 52,964  
    % Revenue   33.3 %   17.2 %   19.5 %     26.0 %
               
    CSW Industrials, Inc.
    Reconciliation of Segment Operating Income to Segment EBITDA
    (unaudited)
               
    (Amounts in thousands) Six Months ended September 30, 2024
      Contractor
    Solutions    		 Specialized
    Reliability
    Solutions    		 Engineered
    Building
    Solutions    		 Corporate
    and Other    		 Consolidated
    Revenue, net $ 319,252   $ 75,327   $ 63,566   $ (4,041 ) $ 454,104  
               
    Operating Income $ 96,138   $ 12,970   $ 11,806   $ (14,304 ) $ 106,610  
    % Revenue   30.1 %   17.2 %   18.6 %     23.5 %
               
    Adjusting Items:          
    Other income (expense), net   (147 )   (183 )   (19 )   (68 )   (418 )
    Depreciation & amortization   15,985     2,832     979     87     19,883  
    EBITDA $ 111,976   $ 15,619   $ 12,766   $ (14,285 ) $ 126,075  
    % Revenue   35.1 %   20.7 %   20.1 %     27.8 %
               
    (Amounts in thousands) Six Months ended September 30, 2023
      Contractor
    Solutions    		 Specialized
    Reliability
    Solutions    		 Engineered
    Building
    Solutions    		 Corporate
    and Other    		 Consolidated
    Revenue, net $ 279,857   $ 74,326   $ 56,798   $ (3,967 ) $ 407,014  
               
    Operating Income $ 78,692   $ 11,794   $ 9,493   $ (12,780 ) $ 87,199  
    % Revenue   28.1 %   15.9 %   16.7 %     21.4 %
               
    Adjusting Items:          
    Other income (expense), net   747     (91 )   11     1,573     2,240  
    Depreciation & amortization   13,940     3,035     895     90     17,960  
    EBITDA $ 93,380   $ 14,738   $ 10,398   $ (11,117 ) $ 107,399  
    % Revenue   33.4 %   19.8 %   18.3 %     26.4 %
               
    CSW INDUSTRIALS, INC.
    Reconciliation of Operating Cash Flow to Free Cash Flow
    (Unaudited)
                   
    (Amounts in thousands) Three Months Ended
    September 30,    		   Six Months ended
    September 30,
        2024       2023       2024       2023  
    Net cash provided by operating activities $ 66,814     $ 44,679     $ 129,469     $ 94,936  
    Less: Capital expenditures   (5,486 )     (2,814 )     (8,587 )     (7,785 )
    Free cash flow $ 61,328     $ 41,865     $ 120,882     $ 87,151  
    Free cash flow % EBITDA   100.8 %     79.0 %     95.9 %     81.1 %

    The MIL Network –

  • MIL-OSI: Dayforce Reports Third Quarter 2024 Results¹

    Source: GlobeNewswire (MIL-OSI)

    Dayforce® recurring revenue of $333.2 million, up 19%

    Total revenue of $440.0 million, up 17%

    Year-to-date net cash provided by operating activities of $200.1 million, up 54%

    MINNEAPOLIS and TORONTO, Oct. 30, 2024 (GLOBE NEWSWIRE) — Dayforce, Inc. (“Dayforce” or the “Company”) (NYSE:DAY) (TSX:DAY), a global leader in human capital management (“HCM”) technology, today announced its financial results for the third quarter ended September 30, 2024.

    “Our dedicated team achieved excellent results in the third quarter, positioning us to finish 2024 with strength,” said David Ossip, Chair and CEO of Dayforce. “Dayforce recurring revenue grew 19% year-over-year, and year-to-date cash flows from operating activities were up 54%, underscoring our ability to both grow and generate profits at scale. We continue to see organizations across the globe realize greater value as they simplify their people operations with the all-in-one Dayforce platform.”

    “In the third quarter, we repurchased approximately $30 million worth of shares under our $500 million share repurchase program that we launched last quarter highlighting our progress in enhancing our overall profit profile and the flexibility of our cash-generative business model,” said Jeremy Johnson, CFO of Dayforce. “Looking forward, we are excited to meet many of our investors in-person at our inaugural Investor Day alongside our Dayforce Discover conference in Las Vegas where we will outline our strategy for future growth.” 

    Financial Highlights for the Third Quarter 20241

    • Total revenue was $440.0 million, an increase of 16.6%, or 16.7% on a constant currency basis.
    • Dayforce recurring revenue was $333.2 million, an increase of 19.2%, or 19.3% on a constant currency basis. Excluding float revenue, Dayforce recurring revenue was $292.0 million, an increase of 18.9%, or 19.0% on a constant currency basis.
    • Cloud recurring gross margin was 79.0%, compared to 77.0%. Adjusted cloud recurring gross margin was 79.9%, compared to 78.3%.
    • Operating profit was $20.8 million compared to $26.5 million. Adjusted operating profit was $103.2 million compared to $89.4 million.
    • Net income was $2.0 million, compared to net loss of $3.8 million. Adjusted net income was $74.5 million, compared to $58.3 million.
    • Adjusted EBITDA was $126.1 million, compared to $107.2 million.
    • Diluted net income per share was $0.01, compared to diluted net loss per share of $0.02. Adjusted diluted net income per share was $0.47, compared to $0.37.
    • Net cash provided by operating activities for the nine months ended September 30, 2024 was $200.1 million, compared to $129.6 million for the nine months ended September 30, 2023. Free cash flow for the nine months ended September 30, 2024 was $117.3 million, compared to $41.3 million for the nine months ended September 30, 2023.

    Supplemental Detail

    • 6,730 customers were live on the Dayforce platform as of September 30, 2024, an increase of 73 customers since June 30, 2024 and an increase of 384 customers since September 30, 2023, or 6.1% year-over-year.2
    • Dayforce recurring revenue per customer was $159,496 for the trailing twelve months ended September 30, 2024, an increase of 14.9%.3
    • The average float balance for Dayforce’s customer funds during the quarter was $4.48 billion and the average yield on Dayforce’s float balance was 4.0%, an increase of 20 basis points year-over-year. Float revenue from invested customer funds was $45.6 million for the three months ended September 30, 2024.
    • The average U.S. dollar to Canadian dollar foreign exchange rate was $1.36 for the three months ended September 30, 2024, compared to $1.34 for the three months ended September 30, 2023. Dayforce presents percentage change in revenue on a constant currency basis in order to exclude the effect of foreign currency rate fluctuations, which it believes is useful to management and investors. Percentage change in revenue was calculated on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.

    1 The financial highlights are on a year-over-year basis, unless otherwise stated. All financial results are reported in United States (“U.S.”) dollars and in accordance with accounting principles generally accepted in the U.S. (“GAAP”), unless otherwise stated.
    2 Excluding Ascender, ADAM HCM, and eloomi.
    3 Excluding float revenue, Ascender, ADAM HCM, and eloomi revenue, and on a constant currency basis. Please refer to the “Non-GAAP Financial Measures” section for discussion of percentage change in revenue on a constant currency basis.

    Business Highlights

    • Dayforce was named a Leader in the 2024 Gartner Magic Quadrant for Cloud HCM Suites for 1,000+ Employee Enterprises for the fifth consecutive year in October 2024. The Company also scored highest in both North American Compliance Suite 1,000-2,500 and North American Compliance Suite 2,500+ in the 2024 Critical Capabilities report for Cloud HCM Suites for Enterprises with 1000+ Employees.
    • The Company earned a 2024 Top HR Products of the Year Award from Human Resources Executive Magazine for Dayforce Career Explorer and placed on the Constellation ShortList™ within four categories: Workforce Management Suites, HCM Suites with a North American Focus, Global HCM Suites, and Payroll for North American SMBs.
    • Dayforce attained a five-star rating for the second year in a row on Newsweek’s list of America’s Greenest Companies 2025, recognized by TIME Magazine as one of the World’s Most Sustainable Companies 2024, named a Top 10 company for workers by JUST Capital, placed on the Most Loved Workplaces list for young professionals, and awarded a TrustRadius Tech Cares award for the company’s efforts in social responsibility and volunteerism.

    Sales Highlights

    • A North American hospitality company that specializes in managing and developing luxury hotels and resorts selected the full Dayforce suite to support 22,000 employees across U.S., Mexico, and Canada.
    • A major multi-brand Australian retailer has selected Dayforce as its unified HCM solution to support their 12,000 employees across Australia and New Zealand.
    • A global manufacturing and distribution leader, operating in over 12 countries, selected the full Dayforce suite to enhance the experience of 8,500 employees across the United States and Canada.
    • A wholesale distributor of food service and janitorial supplies, with 7,200 employees in the U.S. and Canada chose Dayforce as its comprehensive human capital management solution, opting for the full Dayforce suite of products with Managed Benefits.
    • A world-leading manufacturer and retailer of footwear chose the full Dayforce suite to support its 5,300 employees globally.
    • A U.S.-based online gaming and sports entertainment company chose Dayforce Managed Payroll Services to support its 4,100 employees across the U.S., Canada, and the United Kingdom (“U.K.”).
    • A U.K.-based clothing retailer chose the full Dayforce Talent suite and Global Payroll to effectively manage its workforce of 3,800 employees across 12 countries.
    • A U.S. construction company selected the full Dayforce suite for consolidating and modernizing its systems across 48 states and 32 unique FEINs for its 3,500 employees.
    • A regional commuter railroad corporation in the U.S. has chosen Dayforce as its unified HCM solution, including the full Talent Suite, to effectively manage its workforce of 3,300 employees.
    • A global manufacturer and distributor of medical devices operating in 33 countries, chose Dayforce for Global Pay, Time, and Managed Benefits in the U.S. to support 2,300 employees.

    New Customer Highlights

    • A British multinational hotel and restaurant company with 38,000 employees went live across the U.K. with Dayforce Managed Payroll, HR, Workforce Management, and Talent.
    • A prominent U.S. manufacturer recently went live with Dayforce HR, Payroll, Time, Wallet, Document Management for its 10,000 employees.
    • A U.K. fashion retailer with 400 stores and 10,000 employees has recently implemented Dayforce HR, Workforce Management, Payroll, and Dayforce Wallet.
    • A leading senior living organization recently deployed the full Dayforce suite, supporting 6,300 active employees across the U.S.
    • A well-established U.S. logistics company has gone live with the full Dayforce suite to support its 5,200 employees.
    • A well-established U.S.-based insurance company has gone live with the full Dayforce suite supporting its 4,800 employees across North America.
    • A North American technology company migrated to Dayforce Managed Payroll to support nearly 4,700 U.S. employees.
    • A global office furniture manufacturer has implemented Dayforce HR, Payroll, Time, Analytics, and Dayforce Wallet for almost 4,000 U.S. employees.
    • A U.S.-based energy services company with 1,200 employees has implemented Dayforce Payroll, Benefits, Time, Core HR, Onboarding, and Recruiting.
    • A nonprofit organization dedicated to the governance and promotion of golf in America recently undertook a full-suite implementation of Dayforce to support its 400 employees.

    Product Roadmap Highlights

    In the third quarter, Dayforce launched new product capabilities to help Dayforce customers realize quantifiable value through enriched workforce engagement, enhanced analytics, and improved employee financial wellness, and to update their compliance capabilities.

    • The new Dayforce Learning was announced, with enhancements that will better equip organizations with the advanced learning and development capabilities needed to grow, engage, and enrich their workforces.
    • Dayforce People Analytics enhancements include:
      • Measures, a new KPI and performance management tool, that surfaces performance across 28+ metrics, allowing organizations to configure intelligent nudges that can surface changes requiring their attention
      • Data Cards display Measures in the Advanced Experience Hub, embedding awareness of performance metrics across the organization
      • Machine learning enhanced prediction gives organizations a view into future performance
    • Dayforce Wallet updates include a new Savings feature, which allows users to route some of their earnings into a saving plan, a new Cashless Tips feature, which allows employers to pay out pre-tax or net tips by automating their distribution at the end of a shift, and a new Dayforce Wallet widget that integrates on-demand pay into Dayforce Hub, allowing employees to view and request available pay directly. As of September 30, 2024, over 1,290 customers were live on Dayforce Wallet.
    • Dayforce Payroll enhancements include a reimagined payroll experience that offers real-time insight into pay variances, helping users detect anomalies by highlighting areas needing attention.
    • 240+ compliance updates up to the end of the third quarter, will bolster the Company’s industry-leading position in compliance by addressing changes in regional taxes, workers’ compensation, garnishments, and multiple state and city rate changes.

    Business Outlook

    Based on information available as of October 30, 2024, Dayforce is issuing the following guidance for the fourth quarter and full year of 2024 as indicated below. Comparisons are on a year-over-year basis, unless stated otherwise.

    Guided Metrics   Full Year 2024   Fourth Quarter 2024
    Total revenue   $1,747 million to $1,752 million, an increase of 15% to 16% on a GAAP basis or 16% on a constant currency basis.   $452 million to $457 million, an increase of 13% to 14% on a GAAP basis or 13% to 15% on a constant currency basis.
    Dayforce recurring revenue, excluding float   $1,163 million to $1,168 million, an increase of 21% on a GAAP and on a constant currency basis.   $311 million to $316 million, an increase of 21% to 23% on a GAAP and on a constant currency basis.
    Float revenue   $192 million   $37 million
    Adjusted EBITDA   $492 million to $507 million   $120 million to $135 million

    Dayforce is also providing an initial outlook for full year 2025 as follows:

    • Total revenue growth, excluding float, between 14% and 15%, on a constant currency basis
    • Adjusted EBITDA margin above 31%
    • Free cash flow as a percentage of total revenue above 12%

    Dayforce has not reconciled the Adjusted EBITDA ranges, Adjusted EBITDA margin, or free cash flow for the fourth quarter or full years of 2024 or 2025 to the directly comparable GAAP financial measures because applicable information for the future period, on which these reconciliations would be based, is not available without unreasonable efforts due to uncertainty regarding, and the potential variability of, depreciation and amortization, share-based compensation expense and related employer taxes, changes in foreign currency exchange rates, and other items.

    Foreign Exchange

    For the fourth quarter of 2024, Dayforce’s guidance assumes an average U.S. dollar to Canadian dollar foreign exchange rate of $1.38, which results in an average rate of $1.37 for the full year of 2024, compared to an average rate of $1.36 and $1.35 for the fourth quarter and full year of 2023, respectively.

    Conference Call Details

    Dayforce will host a live webcast and conference call to discuss the third quarter 2024 earnings at 8:00 a.m. Eastern Time on October 30, 2024. Those wishing to participate via the webcast should access the call through the Investor Relations section of the Dayforce website. Those wishing to participate via the telephone may dial in at 877-497-9071 (USA) or 201-689-8727 (International). The webcast replay will be available through the Investor Relations section of the Dayforce website.

    About Dayforce

    Dayforce makes work life better. Everything we do as a global leader in HCM technology is focused on improving work for thousands of customers and millions of employees around the world. Our single, global people platform for HR, Pay, Time, Talent, and Analytics equips Dayforce customers to unlock their full workforce potential and operate with confidence. To learn how Dayforce helps create quantifiable value for organizations of all sizes and industries, visit dayforce.com.

    Forward-Looking Statements

    This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this press release are forward-looking statements. Forward-looking statements give Dayforce’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance, and business. Users can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements in this press release include statements relating to the fourth quarter and full fiscal years of 2024 and 2025, as well as those relating to future growth initiatives. These statements may include words such as “anticipate,” “estimate,” “expect,” “assume”, “project,” “seek,” “plan,” “intend,” “believe,” “will,” “may,” “could,” “continue,” “likely,” “should,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. The forward-looking statements contained in this press release are based on assumptions that Dayforce has made in light of its industry experience and its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. As users consider this press release, it should be understood that these statements are not guarantees of performance or results. These assumptions and Dayforce’s future performance or results involve risks and uncertainties (many of which are beyond its control). In particular:

    • its inability to maintain its high Cloud solutions growth rate, manage its domestic and international growth effectively, or execute on its growth strategy;
    • the impact of disruptions to the movement of funds to initiate payroll-related transactions on behalf of  customers;
    • its failure to manage its aging technical operations infrastructure;
    • system breaches, interruptions or failures, including cyber-security breaches, identity theft, or other disruptions that could compromise customer information or sensitive company information, including its ongoing consent order with the Federal Trade Commission regarding data protection;
    • its failure to comply with applicable privacy, data protection, information security, and financial services laws, regulations and standards;
    • its inability to successfully compete in the markets in which Dayforce operates and expand its current offerings into new markets or further penetrate existing markets due to competition;
    • its failure to properly update its solutions to enable its customers to comply with applicable laws;
    • its failure to provide new or enhanced functionality and features, including those that may involve artificial intelligence or machine learning;
    • its inability to maintain necessary third-party relationships, and third-party software licenses, and identify errors in the software it licenses;
    • its inability to offer and deliver high-quality technical support, implementation, and professional services;
    • its inability to attract and retain senior management employees and highly skilled employees;
    • the impact of its outstanding debt obligations on its financial condition, results of operations, and value of its common stock;
    • its ability to maintain effective internal control over financial reporting, and the effect of the existing material weakness in its internal control over financial reporting on its business, financial condition, and results of operations; or
    • the impact of adverse economic and market conditions on its business, operating results, or financial condition.

    Although Dayforce has attempted to identify important risk factors, additional factors or events that could cause Dayforce’s actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for Dayforce to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of Dayforce’s assumptions prove incorrect, its actual financial condition, results of operations, future performance, and business may vary in material respects from the performance projected in these forward-looking statements. In addition to any factors and assumptions set forth above in this press release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the general economy remains stable; the competitive environment in the HCM market remains stable; the demand environment for HCM solutions remains stable; Dayforce’s implementation capabilities and cycle times remain stable; foreign exchange rates, both current and those used in developing forward-looking statements, specifically U.S. dollar to Canadian dollar, remain stable at, or near, current rates; Dayforce will be able to maintain its relationships with its employees, customers, and partners; Dayforce will continue to attract qualified personnel to support its development requirements and the support of its new and existing customers; and that the risk factors noted above, individually or collectively, do not have a material impact on Dayforce. Any forward-looking statement made by Dayforce in this press release speaks only as of the date on which it is made. Dayforce undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

       
    Dayforce, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)    		  
       
        September 30,     December 31,  
        2024     2023  
    (In millions, except per share data)            
    Assets            
    Current assets:            
    Cash and equivalents   $ 494.1     $ 570.3  
    Restricted cash     —       0.8  
    Trade and other receivables, net     255.8       228.8  
    Prepaid expenses and other current assets     153.3       126.7  
    Total current assets before customer funds     903.2       926.6  
    Customer funds     4,000.7       5,028.6  
    Total current assets     4,903.9       5,955.2  
    Right of use lease assets, net     14.7       19.1  
    Property, plant, and equipment, net     228.3       210.1  
    Goodwill     2,394.5       2,293.9  
    Other intangible assets, net     228.3       230.2  
    Deferred sales commissions     215.6       192.1  
    Other assets     131.7       110.3  
    Total assets   $ 8,117.0     $ 9,010.9  
                 
    Liabilities and stockholders’ equity            
    Current liabilities:            
    Current portion of long-term debt   $ 7.3     $ 7.6  
    Current portion of long-term lease liabilities     6.0       7.0  
    Accounts payable     73.1       66.7  
    Deferred revenue     42.7       40.2  
    Employee compensation and benefits     77.9       92.9  
    Other accrued expenses     66.3       30.4  
    Total current liabilities before customer funds obligations     273.3       244.8  
    Customer funds obligations     4,004.6       5,090.1  
    Total current liabilities     4,277.9       5,334.9  
    Long-term debt, less current portion     1,209.9       1,210.1  
    Employee benefit plans     25.0       27.7  
    Long-term lease liabilities, less current portion     14.0       18.9  
    Other liabilities     34.2       21.1  
    Total liabilities     5,561.0       6,612.7  
    Commitments and contingencies            
    Stockholders’ equity:            
    Common stock, $0.01 par, 500.0 shares authorized, 157.8 and 156.3 shares issued and outstanding, respectively     1.6       1.6  
    Additional paid in capital     3,291.5       3,151.1  
    Accumulated deficit     (340.5 )     (317.8 )
    Accumulated other comprehensive loss     (396.6 )     (436.7 )
    Total stockholders’ equity     2,556.0       2,398.2  
    Total liabilities and stockholders’ equity   $ 8,117.0     $ 9,010.9  
       
    Dayforce, Inc.
    Condensed Consolidated Statements of Operations
    (Unaudited)    		  
       
        Three Months Ended
    September 30,    		     Nine Months Ended
    September 30,    		  
        2024     2023     2024     2023  
    (In millions, except per share data)                        
    Revenue:                        
    Recurring   $ 375.9     $ 325.4     $ 1,123.6     $ 958.2  
    Professional services and other     64.1       52.1       171.2       155.8  
    Total revenue     440.0       377.5       1,294.8       1,114.0  
    Cost of revenue:                        
    Recurring     87.4       80.5       265.1       239.4  
    Professional services and other     75.1       66.1       210.8       197.0  
    Product development and management     55.4       53.3       166.8       153.5  
    Depreciation and amortization     20.8       17.1       58.6       47.4  
    Total cost of revenue     238.7       217.0       701.3       637.3  
    Gross profit     201.3       160.5       593.5       476.7  
    Selling and marketing     86.4       61.8       248.5       177.5  
    General and administrative     94.1       72.2       269.4       204.9  
    Operating profit     20.8       26.5       75.6       94.3  
    Interest expense, net     8.8       8.9       33.2       27.2  
    Other (income) expense, net     (6.3 )     5.1       5.7       6.6  
    Income before income taxes     18.3       12.5       36.7       60.5  
    Income tax expense     16.3       16.3       29.4       51.3  
    Net income (loss)   $ 2.0     $ (3.8 )   $ 7.3     $ 9.2  
    Net income (loss) per share:                        
    Basic   $ 0.01     $ (0.02 )   $ 0.05     $ 0.06  
    Diluted   $ 0.01     $ (0.02 )   $ 0.05     $ 0.06  
    Weighted average shares outstanding:                        
    Basic     158.1       155.7       157.6       155.0  
    Diluted     159.7       155.7       159.9       158.2  
       
    Dayforce, Inc.
    Condensed Consolidated Statements of Cash Flows
    (Unaudited)    		  
       
        Nine Months Ended
    September 30,    		  
        2024     2023  
    (In millions)            
    Cash flows from operating activities            
    Net income   $ 7.3     $ 9.2  
    Adjustments to reconcile net income to net cash provided by operating activities:            
    Deferred income tax (benefit) expense     (27.5 )     13.9  
    Depreciation and amortization     151.5       84.1  
    Amortization of debt issuance costs and debt discount     3.2       3.3  
    Loss on debt extinguishment     4.3       —  
    Provision for doubtful accounts     4.7       4.2  
    Net periodic pension and postretirement cost     7.6       0.9  
    Share-based compensation expense     118.4       118.0  
    Change in fair value of contingent consideration     9.0       11.8  
    Other     (1.2 )     0.3  
    Changes in operating assets and liabilities, excluding effects of acquisitions:            
    Trade and other receivables     (26.2 )     (62.0 )
    Prepaid expenses and other current assets     (4.5 )     (20.1 )
    Deferred sales commissions     (22.9 )     (25.9 )
    Accounts payable and other accrued expenses     5.9       8.5  
    Deferred revenue     (6.5 )     7.5  
    Employee compensation and benefits     (16.1 )     (23.2 )
    Accrued taxes     22.5       11.0  
    Payment of contingent consideration     (20.9 )     —  
    Other assets and liabilities     (8.5 )     (11.9 )
    Net cash provided by operating activities     200.1       129.6  
                 
    Cash flows from investing activities            
    Purchases of customer funds marketable securities     (483.2 )     (252.0 )
    Proceeds from sale and maturity of customer funds marketable securities     283.4       326.4  
    Purchases of marketable securities     (10.0 )     —  
    Proceeds from sale and maturity of marketable securities     7.6       —  
    Expenditures for property, plant, and equipment     (8.7 )     (15.4 )
    Expenditures for software and technology     (74.1 )     (72.9 )
    Acquisition costs, net of cash acquired     (173.1 )     —  
    Other     —       (1.0 )
    Net cash used in investing activities     (458.1 )     (14.9 )
                 
    Cash flows from financing activities            
    (Decrease) increase in customer funds obligations, net     (1,049.9 )     311.0  
    Proceeds from issuance of common stock under share-based compensation plans     22.0       40.3  
    Repurchases of common stock     (28.8 )     —  
    Proceeds from debt issuance     650.0       —  
    Repayment of long-term debt obligations     (646.5 )     (6.0 )
    Payment of debt refinancing costs     (11.4 )     —  
    Payment of contingent consideration     (3.0 )     —  
    Net cash (used in) provided by financing activities     (1,067.6 )     345.3  
                 
    Effect of exchange rate changes on cash, restricted cash, and equivalents     (18.2 )     5.1  
    Net (decrease) increase in cash, restricted cash, and equivalents     (1,343.8 )     465.1  
    Cash, restricted cash, and equivalents at beginning of period     3,421.4       3,151.2  
    Cash, restricted cash, and equivalents at end of period   $ 2,077.6     $ 3,616.3  
                 
    Reconciliation of cash, restricted cash, and equivalents to the condensed consolidated balance sheets            
    Cash and equivalents   $ 494.1     $ 510.3  
    Restricted cash     —       0.8  
    Restricted cash and equivalents included in customer funds     1,583.5       3,105.2  
    Total cash, restricted cash, and equivalents   $ 2,077.6     $ 3,616.3  
       
    Dayforce, Inc.
    Revenue Financial Measures
    (Unaudited)    		  
       
        Three Months Ended September 30,     Percentage change in revenue     Impact of
    changes in
    foreign
    currency (a)    		     Percentage change in revenue on a constant currency basis (a)  
        2024     2023     2024 vs. 2023           2024 vs. 2023  
        (In millions)                    
    Revenue:                              
    Recurring revenue:                              
    Dayforce recurring, excluding float   $ 292.0     $ 245.6       18.9 %     (0.1 )%     19.0 %
    Dayforce float     41.2       34.0       21.2 %     (0.3 )%     21.5 %
    Total Dayforce recurring     333.2       279.6       19.2 %     (0.1 )%     19.3 %
    Powerpay recurring, excluding float     20.2       19.6       3.1 %     (2.0 )%     5.1 %
    Powerpay float     4.2       4.4       (4.5 )%     (2.2 )%     (2.3 )%
    Total Powerpay recurring     24.4       24.0       1.7 %     (2.0 )%     3.7 %
    Total Cloud recurring     357.6       303.6       17.8 %     (0.3 )%     18.1 %
    Other recurring (b)     18.3       21.8       (16.1 )%     0.9 %     (17.0 )%
    Total recurring revenue     375.9       325.4       15.5 %     (0.2 )%     15.7 %
    Professional services and other (c)     64.1       52.1       23.0 %     (— )%     23.0 %
    Total revenue   $ 440.0     $ 377.5       16.6 %     (0.1 )%     16.7 %
    a) Dayforce has calculated percentage change in revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period. Please refer to the “Non-GAAP Financial Measures” section for discussion of percentage change in revenue on a constant currency basis.
    b) Float attributable to Other recurring was $0.2 million and $0.4 million for the three months ended September 30, 2024, and 2023, respectively.
    c) For the three months ended September 30, 2024, Professional services and other consisted of $61.8 million and $2.3 million associated with Dayforce and Other, respectively. For the three months ended September 30, 2023, Professional services and other consisted of $48.2 million, $3.8 million, and $0.1 million associated with Dayforce, Other, and Powerpay, respectively.
        Nine Months Ended September 30,     Percentage change in revenue    
    Impact of
    changes in
    foreign
    currency (a)    		     Percentage change in revenue on a constant currency basis (a)  
        2024     2023     2024 vs. 2023           2024 vs. 2023  
        (In millions)                    
    Revenue:                              
    Recurring revenue:                              
    Dayforce recurring, excluding float   $ 852.1     $ 706.5       20.6 %     (0.2 )%     20.8 %
    Dayforce float     139.9       112.5       24.4 %     (0.2 )%     24.6 %
    Total Dayforce recurring     992.0       819.0       21.1 %     (0.2 )%     21.3 %
    Powerpay recurring, excluding float     60.6       58.8       3.1 %     (1.2 )%     4.3 %
    Powerpay float     14.4       13.4       7.5 %     (0.7 )%     8.2 %
    Total Powerpay recurring     75.0       72.2       3.9 %     (1.1 )%     5.0 %
    Total Cloud recurring     1,067.0       891.2       19.7 %     (0.3 )%     20.0 %
    Other recurring (b)     56.6       67.0       (15.5 )%     (1.0 )%     (14.5 )%
    Total recurring revenue     1,123.6       958.2       17.3 %     (0.3 )%     17.6 %
    Professional services and other (c)     171.2       155.8       9.9 %     (0.2 )%     10.1 %
    Total revenue   $ 1,294.8     $ 1,114.0       16.2 %     (0.3 )%     16.5 %
    a) Dayforce has calculated percentage change in revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period. Please refer to the “Non-GAAP Financial Measures” section for discussion of percentage change in revenue on a constant currency basis.
    b) Float attributable to Other recurring was $0.9 million and $1.6 million for the nine months ended September 30, 2024, and 2023, respectively.
    c) For the nine months ended September 30, 2024, Professional services and other consisted of $164.4 million, $6.6 million, and $0.2 million associated with Dayforce, Other, and Powerpay, respectively. For the three months ended September 30, 2023, Professional services and other consisted of $144.6 million, $11.1 million, and $0.1 million associated with Dayforce, Other, and Powerpay, respectively.
       
    Dayforce, Inc.
    Share-Based Compensation Expense and Related Employer Taxes
    (Unaudited)    		  
       
        Three Months Ended
    September 30,    		     Nine Months Ended
    September 30,    		  
        2024     2023     2024     2023  
        (in millions)  
    Cost of revenue – Cloud   $ 3.0     $ 3.9     $ 9.6     $ 11.9  
    Cost of revenue – Other     0.6       0.5       1.7       1.2  
    Professional services and other     4.0       4.4       11.7       13.5  
    Product development and management     8.1       7.8       25.0       25.7  
    Sales and marketing     9.4       6.4       27.2       19.0  
    General and administrative     14.5       13.4       43.2       47.0  
    Total   $ 39.6     $ 36.4     $ 118.4     $ 118.3  
       
    Dayforce, Inc.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (Unaudited)    		  
       
    The following tables reconcile Dayforce’s reported results to its non-GAAP financial measures:  
       
        Three Months Ended September 30, 2024  
        As reported     As reported margins (a)     Share-based
    compensation    		     Amortization     Other (b)     As adjusted (b)     As adjusted margins (a)  
        (Dollars in millions, except per share data)  
    Cost of Cloud recurring revenue   $ 75.1       79.0 %   $ 3.0     $ —     $ 0.1     $ 72.0       79.9 %
                                               
    Operating profit   $ 20.8       4.7 %   $ 39.6     $ 29.6     $ 13.2     $ 103.2       23.5 %
                                               
    Net income   $ 2.0       0.5 %   $ 39.6     $ 29.6     $ 3.3     $ 74.5       16.9 %
    Interest expense, net     8.8             —       —       —       8.8        
    Income tax expense (c)     16.3             —       —       (4.0 )     20.3        
    Depreciation and amortization     52.1             —       29.6       —       22.5        
    EBITDA   $ 79.2           $ 39.6     $ —     $ 7.3     $ 126.1       28.7 %
                                               
    Net income per share – diluted (d)   $ 0.01           $ 0.25     $ 0.19     $ 0.02     $ 0.47        
    a) Cloud recurring gross margin is defined as total Cloud recurring revenue less cost of Cloud recurring revenue as a percentage of total Cloud recurring revenue. Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net (loss) income are of total revenue. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted margins.
    b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items including $9.0 million related to the fair value adjustment for the DataFuzion contingent consideration, $3.2 million of restructuring expenses, $3.2 million of costs associated with the planned termination of its frozen U.S. pension plan, $1.0 million of fees associated with initiating the receivables securitization program, and $9.1 million of foreign exchange gain, along with a $4.0 million net adjustment for the effect of income taxes related to these items. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted metrics.
    c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
    d) GAAP and Adjusted diluted net income per share are calculated based upon 159.7 million weighted average shares of common stock.
        Three Months Ended September 30, 2023  
        As reported     As reported margins (a)     Share-based
    compensation    		     Amortization     Other (b)     As adjusted (b)     As adjusted margins (a)  
        (Dollars in millions, except per share data)  
    Cost of Cloud recurring revenue   $ 69.9       77.0 %   $ 3.9     $ —     $ —     $ 66.0       78.3 %
                                               
    Operating profit   $ 26.5       7.0 %   $ 36.4     $ 20.5     $ 6.0     $ 89.4       23.7 %
                                               
    Net (loss) income   $ (3.8 )     (1.0 )%   $ 36.4     $ 20.5     $ 5.2     $ 58.3       15.4 %
    Interest expense, net     8.9             —       —       —       8.9        
    Income tax expense (c)     16.3             —       —       (5.5 )     21.8        
    Depreciation and amortization     38.7             —       20.5       —       18.2        
    EBITDA   $ 60.1           $ 36.4     $ —     $ 10.7     $ 107.2       28.4 %
                                               
    Net (loss) income per share – diluted (d)   $ (0.02 )         $ 0.23     $ 0.13     $ 0.03     $ 0.37        
    a) Cloud recurring gross margin is defined as total Cloud recurring revenue less cost of Cloud recurring revenue as a percentage of total Cloud recurring revenue. Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted margins.
    b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items including $4.7 million of foreign exchange loss, $4.6 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, $1.2 million of restructuring expenses, and $0.2 million related to the abandonment of certain leased facilities, along with a $5.5 million net adjustment for the effect of income taxes related to these items. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted metrics.
    c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
    d) GAAP diluted net loss per share is calculated based upon 155.7 weighted average shares of common stock, and Adjusted diluted net income per share is calculated based upon 158.8 million weighted average shares of common stock.
        Nine Months Ended September 30, 2024  
        As reported     As reported margins (a)     Share-based
    compensation    		     Amortization     Other (b)     As adjusted (b)     As adjusted margins (a)  
        (Dollars in millions, except per share data)  
    Cost of Cloud recurring revenue   $ 228.5       78.6 %   $ 9.6     $ —     $ 0.9     $ 218.0       79.6 %
                                               
    Operating profit   $ 75.6       5.8 %   $ 118.4     $ 87.5     $ 25.7     $ 307.2       23.7 %
                                               
    Net income   $ 7.3       0.6 %   $ 118.4     $ 87.5     $ 5.5     $ 218.7       16.9 %
    Interest expense, net     33.2             —       —       —       33.2        
    Income tax expense (c)     29.4             —       —       (27.0 )     56.4        
    Depreciation and amortization     151.5             —       87.5       —       64.0        
    EBITDA   $ 221.4           $ 118.4     $ —     $ 32.5     $ 372.3       28.8 %
                                               
    Net income per share – diluted (d)   $ 0.05           $ 0.74     $ 0.55     $ 0.03     $ 1.37        
    a) Cloud recurring gross margin is defined as total Cloud recurring revenue less cost of Cloud recurring revenue as a percentage of total Cloud recurring revenue. Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted margins.
    b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items including $15.7 million of restructuring expenses, $9.7 million of costs associated with the planned termination of its frozen U.S. pension plan, $9.0 million related to the fair value adjustment for the DataFuzion contingent consideration, $1.0 million of fees associated with initiating the receivables securitization program, and $2.9 million of foreign exchange gain, along with a $27.0 million net adjustment for the effect of income taxes related to these items. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted metrics.
    c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
    d) GAAP and Adjusted diluted net income per share are calculated based upon 159.9 million weighted average shares of common stock.
        Nine Months Ended September 30, 2023  
        As reported     As reported margins (a)     Share-based
    compensation    		     Amortization     Other (b)     As adjusted (b)     As adjusted margins (a)  
        (Dollars in millions, except per share data)  
    Cost of Cloud recurring revenue   $ 204.8       77.0 %   $ 11.9     $ —     $ —     $ 192.9       78.4 %
                                               
    Operating profit   $ 94.3       8.5 %   $ 118.3     $ 32.7     $ 15.6     $ 260.9       23.4 %
                                               
    Net income   $ 9.2       0.8 %   $ 118.3     $ 32.7     $ (1.8 )   $ 158.4       14.2 %
    Interest expense, net     27.2             —       —       —       27.2        
    Income tax expense (c)     51.3             —       —       (22.7 )     74.0        
    Depreciation and amortization     84.1             —       32.7       —       51.4        
    EBITDA   $ 171.8           $ 118.3     $ —     $ 20.9     $ 311.0       27.9 %
                                               
    Net income per share – diluted (d)   $ 0.06           $ 0.75     $ 0.21     $ (0.01 )   $ 1.00        
    a) Cloud recurring gross margin is defined as total Cloud recurring revenue less cost of Cloud recurring revenue as a percentage of total Cloud recurring revenue. Operating profit margin and net profit margin are determined by calculating the percentage operating profit and net income are of total revenue. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted margins.
    b) The as adjusted column is a non-GAAP financial measure, adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items including $11.8 million related to the impact of the fair value adjustment for the DataFuzion contingent consideration, $5.3 million of foreign exchange loss, $3.4 million of restructuring expenses, and $0.4 million related to the abandonment of certain leased facilities, along with a $22.7 million net adjustment for the effect of income taxes related to these items. Please refer to the “Non-GAAP Financial Measures” section for additional information on the as adjusted metrics.
    c) Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
    d) GAAP and Adjusted diluted net income per share are calculated based upon 158.2 million weighted average shares of common stock.
       
    Dayforce, Inc.
    Reconciliation of Free Cash Flow
    (Unaudited)    		  
       
        Three Months Ended
    September 30,    		     Nine Months Ended
    September 30,    		  
        2024     2023     2024     2023  
        (In millions)  
    Net cash provided by operating activities   $ 91.8     $ 36.6     $ 200.1     $ 129.6  
    Expenditures for property, plant, and equipment     (2.0 )     (5.3 )     (8.7 )     (15.4 )
    Expenditures for software and technology     (26.4 )     (26.5 )     (74.1 )     (72.9 )
    Free cash flow   $ 63.4     $ 4.8     $ 117.3     $ 41.3  


    Non-GAAP Financial Measures

    Dayforce uses certain non-GAAP financial measures in this release including:

    Non-GAAP Financial Measure   GAAP Financial Measure
    EBITDA   Net (loss) income
    Adjusted EBITDA   Net (loss) income
    Adjusted EBITDA margin   Net profit margin
    Adjusted Cloud recurring gross margin   Cloud recurring gross margin
    Adjusted operating profit   Operating profit
    Adjusted operating profit margin   Operating profit margin
    Adjusted net income   Net (loss) income
    Adjusted net profit margin   Net profit margin
    Adjusted diluted net income per share   Diluted net (loss) income per share
    Free cash flow   Net cash provided by operating activities
    Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis   Percentage change in revenue, including total revenue and revenue by solution
    Dayforce recurring revenue per customer   No directly comparable GAAP measure

    Dayforce believes that these non-GAAP financial measures are useful to management and investors as supplemental measures to evaluate its overall operating performance including comparison across periods and with competitors. Dayforce’s management team uses these non-GAAP financial measures to assess operating performance because these financial measures exclude the results of decisions that are outside the normal course of its business operations, and are used for internal budgeting and forecasting purposes both for short- and long-term operating plans. Additionally, Adjusted EBITDA is a component of its management incentive plan and Adjusted Cloud recurring gross margin and Adjusted operating profit are components of certain performance based equity awards for its named executive officers. Additionally, Dayforce believes that the non-GAAP financial measure free cash flow is meaningful to investors because it is a measure of liquidity that provides useful information in understanding and evaluating the strength of Dayforce’s liquidity and future ability to generate cash that can be used for strategic opportunities or investing in its business. The exclusion of capital expenditures facilitates comparisons of Dayforce’s liquidity on a period-to-period basis and excludes items that management does not consider to be indicative of Dayforce’s liquidity.

    These non-GAAP financial measures are not required by, defined under, or presented in accordance with, GAAP, and should not be considered as alternatives to Dayforce’s results as reported under GAAP, have important limitations as analytical tools, and its use of these terms may not be comparable to similarly titled measures of other companies in its industry. Dayforce’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by similar items to those eliminated in this presentation. Please refer to Dayforce’s full financial results, including further discussion of non-GAAP financial measures, on the Investor Relations portion of its website at investors.dayforce.com.

    Dayforce defines its non-GAAP financial measures as follows:

    • EBITDA is defined as net (loss) income before interest, taxes, depreciation, and amortization, and Adjusted EBITDA is EBITDA, as adjusted to exclude share-based compensation expense and related employer taxes, and certain other items.
    • Adjusted EBITDA margin is determined by calculating the percentage Adjusted EBITDA is of total revenue.
    • Adjusted Cloud recurring gross margin is defined as Cloud recurring gross margin, as adjusted to exclude share-based compensation and related employer taxes, and certain other items, as a percentage of total Cloud recurring revenue.
    • Adjusted operating profit is defined as operating profit, as adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items.
    • Adjusted net income is defined as net (loss) income, as adjusted to exclude share-based compensation expense and related employer taxes, amortization of acquisition-related intangible assets, and certain other items, all of which are adjusted for the effect of income taxes.
    • Adjusted net profit margin is determined by calculating the percentage Adjusted net income is of total revenue.
    • Adjusted diluted net income per share is calculated by dividing adjusted net income by diluted weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common shares outstanding incorporate the effect of dilutive equity instruments.
    • Free cash flow is defined as net cash provided by operating activities, as adjusted to exclude capital expenditures.
    • Percentage change in revenue, including total revenue and revenue by solution, on a constant currency basis is calculated by applying the average foreign exchange rate in effect during the comparable prior period.
    • Dayforce recurring revenue per customer is an indicator of the average size of Dayforce recurring revenue customers. To calculate Dayforce recurring revenue per customer, the Company starts with Dayforce recurring revenue on a constant currency basis by applying the same exchange rate to all comparable periods for the trailing twelve months and excludes float revenue and Ascender, ADAM HCM, and eloomi revenue. This amount is divided by the number of live Dayforce customers at the end of the trailing twelve month period, excluding Ascender, ADAM HCM, and eloomi. The Company has not reconciled the Dayforce recurring revenue per customer because there is no directly comparable GAAP financial measure.

    Source: Dayforce, Inc.

    For further information, please contact:

    Investor Relations
    1-844-829-9499
    investors@dayforce.com

    Public Relations
    1-647-417-2117
    teri.murphy@dayforce.com

    The MIL Network –

  • MIL-OSI Submissions: Universities – New genetic web tool to help restore climate-resilient marine ecosystems – Flinders

    Source: Flinders University  

    Australians love their coastal and marine environments but much of the world’s ecosystems are in various stages of decline and in urgent need of restoration.
    In the face of increased human pressures and climate change, a team of Australian scientists led by Dr Georgina Wood at Flinders University have launched a new online tool to assist marine managers and restoration experts to bolster the resilience of marine habitat-forming species. (ref. https://www.reefadapt.org/ )
    The ‘Reef Adapt’ initiative, developed by experts from the NSW Department of Primary Industries and Regional Development (NSW DPIRD), Flinders University and The University of Western Australia (UWA), aims to expand the tools available to promote diverse, adaptable and resilient ecosystems.
    Described in a new article in Communications Biology, Reef Adapt harnesses genetic data from diverse marine species – including key reef-building corals and habitat-forming kelps, but with scope to expand to other taxa – to map out areas likely to harbour populations adapted to current and future environmental conditions.
    The innovative web platform is designed for the rapid inclusion of genetic, biophysical and environmental data into planning of marine restoration and assisted conservation initiatives.
    The tool provides users with maps that identify areas with populations suited to their specific restoration sites under current and future climate scenarios. The platform will initially house data for 27 species collected from 420 sample locations across the globe. Users will also be able to upload their own data to the site, further supporting the conservation of other species and areas.
    While guidelines for terrestrial ecosystem restoration seed-sourcing exists, for example, the US National Seed Strategy and Australia’s Florabank, Reef Adapt is one of the first tool of its kind for marine environments.
    The project follows similar projects on land, such as Australia’s NSW Restore and Renew program, to remove barriers of access to genetic data and improve restoration and assisted gene flow.
    Dr Georgina Wood, an Australian Research Council Early Career Industry  Fellow with Flinders University and Adjunct Research Fellow at UWA, says global efforts to restore ecosystems are intensifying, including the Convention on Biological Diversity’s recent adoption of the Kunming-Montreal Global Biodiversity Framework which aims to put 30% of degraded ecosystems under effective restoration by 2030.
    “Alongside the increase in scale of marine restoration projects, there is a need ensure that restoration practices keep up with the latest available science, including the use of cutting-edge genomic information to make informed decisions about where to source restoration stock material,” says researcher Dr Wood.
    “Our world is changing now more rapidly than ever before. Ideally, every restoration project would incorporate climate adaptation into their design, but the data needed for this are typically difficult to access. Reef Adapt puts this information directly into the hands of both managers and practitioners,” she says.
    The easy-to-use web platform hosts vital genetic information for government, not-for-profit and community organisations – removing barriers of access to vital information that the team hopes will improve both immediate and long-term restoration outcomes.
    Dr Melinda Coleman, NSW DPIRD Senior Principal Research Scientist, says the Reef Adapt online webtool will help guide marine restoration and assisted adaptation programs now and into the future.
    “The revolutionary new Reef Adapt tool will use cutting-edge genomic data and seascape analyses to help marine managers, restoration practitioners and other stakeholders including aquaculture make informed decisions about where to source stock for restoration or aquaculture as well as help select climate proof stock that will withstand future ocean conditions,” explains says Dr Coleman.
    “We hope that this webtool will be used broadly across marine and conservation managers, community groups or anyone embarking on marine restoration as well as aquaculture proponents.”
    Dr Wood says the new Nature article and user manual give examples, with several case studies of ecologically and evolutionarily diverse taxa, including the staghorn coral (Acropora kentii), cauliflower coral (Pocillopora damicornis), golden kelp (Ecklonia radiata) and crayweed (Phyllospora comosa).
    Development of the tool required collection of almost 10,000 reference data points from published population genetic literature, as well as a suite of environmental data and oceanographic models.
    The article, ‘Reef Adapt: A tool to inform climate-smart marine restoration and management decisions’ (2024) by GV Wood (Flinders), KJ Griffin (UWA), M van der Mheen (UWA), MF Breed (Flinders), JM Edgeloe (UWA), C Grimaldi (UWA / Australian Institute of Marine Science, Perth), A Minne (UWA), I Popovic (University of Queensland), K Filbee-Dexter (UWA / Institute of Marine Research, Norway), MJH van Oppen (Australian Institute of Marine Science, Townsville / University of Melbourne), T Wernberg (UWA / Institute of Marine Research, Norway) and MA Coleman (UWA / NSW DPI, Fisheries) has been published in Communications Biology DOI: 10.1038/s42003-024-06970-4 (link to come).
    Dr Georgina (‘George’) Wood will present on the use of digital tools to progress marine restoration at the 10th Western Society of Naturalists’ annual meeting in Oregon, US next month.  Dr Wood and Dr Coleman also presented on Reef Adapt at the Adapt NSW 2024 conference in Sydney this week.
    Acknowledgements: The researchers received support from an ARC Linkage grant and ARC Industry Fellowship to GV Wood, the NSW Marine Estate Management Strategy and NSW DPIRD, as well as the Norwegian Research Council GecoKelp Project.

    MIL OSI – Submitted News –

  • MIL-OSI: Renault and Cerence Partner to Bring Generative AI to Reno, the Renault Connected Avatar

    Source: GlobeNewswire (MIL-OSI)

    BURLINGTON, Mass., Oct. 30, 2024 (GLOBE NEWSWIRE) — Cerence Inc. (NASDAQ: CRNC), AI for a world in motion, today announced its expanded partnership with Renault to bring generative AI-powered capabilities and human-like interaction to the automaker’s next-generation, multi-modal in-car companion, Reno.

    Reno, the official Renault avatar, is an intelligent, helpful, and endearing in-car companion that brings customers a more intuitive and fun driving experience. Expanding on Renault and Cerence’s multi-year partnership to bring Reno to life with humanized, voice-powered interaction, Renault will now leverage generative AI-powered Cerence Chat Pro to advance Reno’s capabilities and bring Reno’s intelligence to an entirely new level. Cerence Chat Pro, a uniquely intelligent, automotive-grade large language model integration, will enable Renault customers to engage Reno in fun and conversational chit-chat, leveraging a multitude of sources, including ChatGPT, to provide accurate and relevant responses to nearly every query imaginable. The interaction with Reno will be even more enhanced by Cerence’s neural text-to-speech, which enables Reno to convey different emotions in its responses to drivers, including apprehensive, cheerful, empathetic, sad, and serious.  

    “Reno marks the next generation of the Renault in-car experience, offering intuitive and natural interaction that brings added value and enjoyment to our customers,” said Luc Julia, Chief Scientific Officer, Renault Group. “With Cerence Chat Pro, we’re leveraging the latest in generative AI but making it applicable to the driving experience, bringing a new level of intelligence and capability to Reno that will enhance learning to use an electric vehicle, as well as safety and comfort for the drivers and the passengers.”

    At the foundation of Reno’s new, generative AI-powered capabilities is a deeply integrated, voice-enabled experience based on Cerence Assistant. In addition to voice-powered control of key vehicle features and functions, Reno leverages car data and sensors to proactively suggest ways to enhance driving performance, like changing the driving mode to maximize range or turning on the windshield defroster in certain weather. Reno can also answer the most commonly asked questions about the car, delivering credible and accurate information direct from Renault sources, powered by Cerence Car Knowledge.

    “We’re proud to continue our long-term partnership with Renault to bring advanced capabilities to Reno as it transforms the in-car interaction experience for Renault customers,” said Christian Mentz, Chief Revenue Officer, Cerence. “As we look to the future of the in-car experience, Reno marks an important milestone in bringing more human-like interaction to the car – a fun, knowledgeable companion that delivers a host of expanded capabilities to support drivers’ every need.”

    Reno made its debut in Renault 5 E-Tech electric in September 2024 and will also be available in Renault 4 E-Tech electric in 2025 .

    To learn more about Cerence, visit www.cerence.com, and follow the company on LinkedIn.

    About Cerence Inc.
    Cerence (NASDAQ: CRNC) is the global industry leader in creating unique, moving experiences for the mobility world. As an innovation partner to the world’s leading automakers and mobility OEMs, it is helping advance the future of connected mobility through intuitive, AI-powered interaction between humans and their vehicles, connecting consumers’ digital lives to their daily journeys no matter where they are. Cerence’s track record is built on more than 20 years of knowledge and 500 million cars shipped with Cerence technology. Whether it’s connected cars, autonomous driving, e-vehicles, or two-wheelers, Cerence is mapping the road ahead. For more information, visit www.cerence.com.  

    About Renault
    Renault, a historic mobility brand and pioneer of electric vehicles in Europe, has always developed innovative vehicles. With the ‘Renaulution’ strategic plan, Renault has embarked on an ambitious, value-generating transformation, moving towards a more competitive, balanced and electrified range. Its ambition is to embody modernity and innovation in technology, energy and mobility services in the automotive industry and beyond.

    Contact Information

    Kate Hickman | Tel: 339-215-4583 | Email: kate.hickman@cerence.com

    The MIL Network –

  • MIL-OSI: IQST – iQSTEL to Present at the AI & Technology Virtual Investor Conference October 31st

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Oct. 30, 2024 (GLOBE NEWSWIRE) — iQSTEL Inc (OTCQX: IQST), based in Miami, Florida, focused on Telecommunications, Fintech, Cybersecurity and AI Services, today announced that Jose E. Puente, CEO of Reality Border (iQSTEL´s Subsidiary) and Leandro Jose Iglesias, CEO & President of iQSTEL, will present live at the AI & Technology Virtual Investor Conference hosted by VirtualInvestorConferences.com, on October 31st, 2024.

    DATE: October 31st
    TIME: 11:00 – 11:30 am ET
    LINK: https://bit.ly/3ASgcyv
    Available for 1×1 meetings: November 4th and 5th

    This will be a live, interactive online event where investors are invited to ask the company questions in real-time. If attendees are not able to join the event live on the day of the conference, an archived webcast will also be made available after the event.

    It is recommended that online investors pre-register and run the online system check to expedite participation and receive event updates.  

    Learn more about the event at www.virtualinvestorconferences.com.

    Recent iQSTEL Highlights

    1. Launch of High-Margin AIRWEB AI Solutions
      iQSTEL’s strategic focus on high-margin products, as shown by the launch of AIRWEB, is central to its growth plan. AIRWEB leverages the latest AI technology, positioning iQSTEL as a competitive player in the $741 billion global contact center market expected by 2030.
    2. Partnership Expansion with Cycurion
      iQSTEL has partnered with Cycurion to provide cybersecurity solutions, extending its high-tech, high-margin product offerings. This aligns with iQSTEL’s strategic growth in diversified technology sectors, including Fintech, AI, and cybersecurity.
    3. Engagement with ONAR for Branding Development
      iQSTEL has partnered with ONAR, a marketing agency, to enhance its branding and marketing presence. This collaboration strengthens iQSTEL’s positioning and brand awareness in high-tech and emerging markets, supporting the launch and visibility of innovations like AIRWEB.
    4. Global Presence and Market Reach
      iQSTEL continues to expand internationally, now operating in 20 countries. This global reach allows the company to deploy solutions like Cybersecurity and AIRWEB across diverse markets, leveraging its established customer base for broader engagement.
    5. $1 Billion Revenue Goal by 2027
      iQSTEL has set a goal to achieve $1 billion in revenue by 2027, and the launch of AIRWEB contributes to this vision by providing a scalable, AI-driven solution that enhances customer service while reducing costs, increasing profit potential in high-growth sectors.

    These highlights reflect iQSTEL’s dedication to innovation, international growth, financial stability, and strategic partnerships, reinforcing its mission to become a leader in telecommunications, AI, and high-margin technology products

    About Virtual Investor Conferences®
    Virtual Investor Conferences (VIC) is the leading proprietary investor conference series that provides an interactive forum for publicly traded companies to seamlessly present directly to investors.

    Providing a real-time investor engagement solution, VIC is specifically designed to offer companies more efficient investor access. Replicating the components of an on-site investor conference, VIC offers companies enhanced capabilities to connect with investors, schedule targeted one-on-one meetings and enhance their presentations with dynamic video content. Accelerating the next level of investor engagement, Virtual Investor Conferences delivers leading investor communications to a global network of retail and institutional investors.

    Virtual Investor Conferences
    John M. Viglotti
    SVP Corporate Services, Investor Access
    OTC Markets Group
    (212) 220-2221
    johnv@otcmarkets.com

    About Reality Border:

    Reality Border (www.realityborder.com), the AI-Services subsidiary of iQSTEL, Inc. (OTCQX: IQST), specializes in providing AI-driven customer engagement solutions that help businesses scale and personalize their customer interactions. With a focus on simplicity and powerful AI technology, Reality Border enables businesses to achieve growth and operational efficiency with minimal complexity.

    Company Website:

    www.realityborder.com

    Airweb Service Website:

    www.airweb.ai

    About iQSTEL (Updated Oct. 2024):

    iQSTEL Inc. (OTC-QX: IQST) (www.iQSTEL.com) is a US-based multinational publicly listed company in the final stages of the path to becoming listed on NASDAQ. With FY2023 revenues of $144 million and a forecasted $290 million in revenue, alongside positive operating income of seven digits for FY-2024, iQSTEL is positioning itself for explosive growth. iQSTEL’s mission is to serve basic human needs in today’s modern world by making essential tools accessible, regardless of race, ethnicity, religion, socioeconomic status, or identity. The company recognizes that modern human needs such as physiological, safety, relationship, esteem, and self-actualization are marginalized without access to ubiquitous communications, financial freedom, clean, affordable mobility, and information.

    iQSTEL has been building a strong business platform with its customers, and by leveraging this trust, the company is now beginning to sell high-tech, high-margin products across its divisions. iQSTEL is strategically positioned to achieve $1 billion in revenue by 2027 through organic growth, acquisitions, and high-margin product expansion.

    • Telecommunications Services Division (Communications):
      Includes VoIP, SMS, International Fiber-Optic, Proprietary Internet of Things (IoT), and a Proprietary Mobile Portability Blockchain Platform.
    • Fintech Division (Financial Freedom):
      Provides remittance services, top-up services, a MasterCard Debit Card, US bank accounts (no SSN required), and a Mobile App.
    • Electric Vehicles (EV) Division (Mobility):
      Offers Electric Motorcycles and plans to launch a Mid-Speed Car.
    • Artificial Intelligence (AI) Services Division (Information and Content):
      Provides AI solutions for unified customer engagement across web and phone channels, along with a white-label platform offering seamless access to services, entertainment, and support in a virtual 3D interface.
    • Cybersecurity Services:
      Through a new partnership with Cycurion, iQSTEL will offer advanced cybersecurity solutions, including 24/7 monitoring, threat detection, incident response, vulnerability assessments, and compliance management, providing essential protection to telecommunications clients and beyond.

    iQSTEL has completed 11 acquisitions since June 2018 and continues to develop an active pipeline of potential future acquisitions, further expanding its suite of products and services both organically and through mergers and acquisitions.

    iQSTEL Inc.
    IR US Phone: 646-740-0907
    IR Email: investors@iqstel.com

    Contact Details
    iQSTEL Inc.
    +1 646-740-0907
    investors@iqstel.com

    Company Website
    www.iqstel.com

    Safe Harbor Statement: Statements in this news release may be “forward-looking statements”. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions, or any other information relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates, and projections about our business based partly on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Any forward-looking statements speak only as of the date of this news release, and iQSTEL Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this news release. This press release does not constitute a public offer of any securities for sale. Any securities offered privately will not be or have not been registered under the Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

    The MIL Network –

  • MIL-OSI: ES Bancshares, Inc. Announces Third Quarter 2024 Results; Continues Trend of Net Interest Margin Expansion and Revenue Growth

    Source: GlobeNewswire (MIL-OSI)

    STATEN ISLAND, N.Y., Oct. 30, 2024 (GLOBE NEWSWIRE) — ES Bancshares, Inc. (OTCQX: ESBS) (the “Company”) the holding company for Empire State Bank, (the “Bank”) today reported net income of $582 thousand, or $0.08 per diluted common share, for the quarter ended September 30, 2024, compared to a net income of $158 thousand or $0.02 per diluted common share for the quarter ended June 30, 2024.

    Key Quarterly Financial Data 2024 Highlights
    Performance Metrics 3Q24 2Q24 3Q23   • The Cost of Funds for the three months ended September 30, 2024, improved to 3.02% from 3.17% in the prior linked quarter.

    • For 3 months ended September 30, 2024, the Company’s net interest margin increased to 2.30% compared to 2.21% for the 3 months ended June 30, 2024.

    • The Company repurchased $2million of its sub-debt during the quarter, resulting in a gain on extinguishment.

    • The Company has replaced $56 million of higher-costing wholesale funding with lower cost organic deposits over the nine-months in 2024.

    • Total Revenues for the quarter ended September 30, 2024, totaled $8.6 million increasing for an eighth consecutive quarter.
    Return on average assets (%) 0.36 0.10 0.09  
    Return on average equity (%) 4.98 1.37 1.17  
    Return on average tangible equity (%) 5.04 1.38 1.18  
    Net interest margin (%) 2.30 2.21 2.67  
             
    Income Statement (a) 3Q24 2Q24 3Q23  
    Net interest income $       3,567 $       3,447 $        3,977  
    Non-interest income $          609 $          329 $           256  
    Net income $          582 $          158 $           133  
    Earnings per diluted common share $         0.08 $         0.02 $          0.02  
             
    Balance Sheet (a) 3Q24 2Q24 3Q23  
    Average total loans  $   566,031  $   565,363 $     555,919  
    Average total deposits  $   512,119  $   510,050 $     487,816  
    Book value per share  $         6.85  $         6.74 $           6.79  
    Tangible book value per share  $         6.77  $         6.65 $           6.71  
     
    (a) In thousands except for per share amounts
     

    Phil Guarnieri, Director, and Chief Executive Officer of ES Bancshares, said, “We are pleased to report solid progress this quarter, reflecting our commitment to enhancing the earnings profile of the organization and maintaining disciplined expense management. Despite a challenging and competitive landscape, the Company’s net interest margin increased by nine basis points for the second straight quarter. The Company’s balance sheet and capital position remain robust, and through the open market, we’ve partially paid down our subordinated debt, which will positively impact the margin going forward.”

    Selected Balance Sheet Information:

    September 30, 2024 vs. December 31, 2023

    As of September 30, 2024, total assets were $633.2 million, a decrease of $5.5 million, or 0.9%, as compared to total assets of $638.7 million on December 31, 2023. The decrease can be attributed to a slightly smaller loan portfolio.

    Loans receivable, net of Allowance for Credit Losses on Loans totaled $560.0 million, a decrease of 0.7% from December 31, 2023. As of September 30, 2024, the Allowance for Credit Losses on Loans as a percentage of gross loans was 0.90%.

    Nonperforming assets, which includes nonaccrual loans and foreclosed real estate were $5.1 million or 0.81% of total assets, as of September 30, 2024, increasing from $1.4 million or 0.22% of total assets at December 31, 2023. The ratio of nonaccrual loans to loans receivable was 0.91%, as of September 30, 2024, and 0.22% for December 31, 2023. The increase from December 31, 2023, was primarily due to one Commercial Real Estate loan and one 1-4 family investor loan being placed on non-accrual status. Both loans are deemed to be well collateralized and in total amount to $4.0 million.

    Total liabilities decreased $6.8 million to $586.1 at September 30, 2024 from $592.9 million at December 31, 2023. The decrease can be attributed to repayments of brokered deposits and Federal Home Loan (FHLB) borrowings partially offset by growth in core deposits. The growth in deposits was driven by an increase in interest-bearing, non-maturity deposit accounts.

    As of September 30, 2024, the Bank’s Tier 1 capital leverage ratio, common equity tier 1 capital ratio, Tier 1 capital ratio and total capital ratios were 9.18%, 13.67%, 13.67% and 14.92%, respectively, all in excess of the ratios required to be deemed “well-capitalized.” During the third quarter 2024 the Company did not repurchase shares under its stock repurchase program. Book value per common share was $6.85 at September 30, 2024 compared to $6.83 at December 31, 2023. Tangible common book value per share (which represents common equity less goodwill, divided by the number of shares outstanding) was $6.77 at September 30, 2024 compared to $6.74 at December 31, 2023.

    Financial Performance Overview:

    Three Months Ended September 30, 2024, vs. June 30, 2024

    For the three months ended September 30, 2024, the Company net income totaled $582 thousand compared to a net income of $158 thousand for the three months ended June 30, 2024. The improvement can be attributed to an expanded margin and increased non-interest income quarter over quarter.

    Net interest income for the three months ended September 30, 2024, increased $120 thousand, to $3.6 million from $3.4 million at three months ended June 30, 2024. The Company’s net interest margin widened by nine basis points to 2.30% for the three months ended September 30, 2024, as compared to 2.21% for the three months ended June 30, 2024. The increase in margin can be attributed to a reduction in the Company’s average cost for its Interest-bearing liabilities.

    There was a reversal for credit losses of $38 thousand for the three months ended September 30, 2024, compared to a $9 thousand provision for credit losses taken for the three months ended June 30, 2024.

    Non-interest income increased $280 thousand, to $609 thousand for the three months ended September 30, 2024, compared with non-interest income of $329 thousand for the three months ended June 30, 2024. The majority of the increase can be attributed to a $245 thousand gain on extinguishment of the Company’s subordinated debt.

    Non-interest expenses totaled $3.4 million for the three months ended September 30, 2024, compared to $3.5 million for the three months ended June 30, 2024. The largest fluctuations quarter over quarter pertain to a 31% reduction in Professional fees, which decreased $70 thousand to a more normalized level during the quarter ended September 30, 2024.

    Nine months ended September 30, 2024 vs. September 30, 2023

    For the nine months ended September 30, 2024, net income totaled $637 thousand in comparison to $1.4 million for the nine months ended September 30, 2023. The decrease can mainly be attributed to higher costs paid on deposits which increased $5.0 million.

    Net interest income for the nine months ended September 30, 2024, decreased 18% or $2.2 million, to $10.2 million from $12.4 million at September 30, 2023. The decrease can be attributed to increased interest expense for deposits, partially offset by increased interest income earned on the loan portfolio.

    Provision for credit losses totaled $10 thousand for the nine months ended September 30, 2024, compared to a $103 thousand provision for the nine months ended September 30, 2023.

    Non-interest income totaled $1.2 million for the nine months ended September 30, 2024, compared with noninterest income of $758 thousand for the nine months ended September 30, 2023. The increase can be attributed to the gain recorded on extinguishment of sub-debt which is partially offset by a decrease in gains recorded from loan sales period over period.

    Operating expenses totaled $10.4 million for the nine months ended September 30, 2024, compared to $11.3 million for the nine months ended September 30, 2023, or a decrease of 8.1%. The decrease in non-interest expense can be attributed to initiatives taking effect from the cost-cutting program launched in 2024.

    About ES Bancshares Inc.
    ES Bancshares, Inc. (the “Company”) is incorporated under Maryland law and serves as the holding company for Empire State Bank (the “Bank”). The Company is subject to regulation by the Board of Governors of the Federal Reserve System while the Bank is primarily subject to regulation and supervision by the New York State Department of Financial Services. Currently, the Company does not transact any material business other than through the Bank, its subsidiary.

    The Bank was organized under federal law in 2004 as a national bank regulated by the Office of the Comptroller of the Currency. The Bank’s deposits are insured up to legal limits by the FDIC. In March 2009, the Bank converted its charter to a New York State commercial bank charter. The Bank’s principal business is attracting commercial and retail deposits in New York and investing those deposits primarily in loans, consisting of commercial real estate loans, and other commercial loans including SBA and mortgage loans secured by one-to-four-family residences. In addition, the Bank invests in mortgage-backed securities, securities issued by the U.S. Government and agencies thereof, corporate securities and other investments permitted by applicable law and regulations.

    We operate from our five Banking Center locations, a Loan Production Office and our Corporate Headquarters located in Staten Island, New York. The Company’s website address is www.esbna.com. The Company’s annual report, quarterly earnings releases and all press releases are available free of charge through its website, as soon as reasonably practicable.

    Forward-Looking Statements

    This release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology, are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within ES Bancshares, Inc’s. control. The forward-looking statements included in this release are made only as of the date of this release. We have no intention, and do not assume any obligation, to update these forward-looking statements.

    Investor Contact:
    Peggy Edwards, Corporate Secretary
    (845) 451-7825

    ES Bancshares, Inc.  
    Consolidated Statements of Financial Condition  
    (in thousands)  
        September 30, December 31,   September 30,  
    2024  2023  2023   
          |—-(unaudited)—-|     |—-(unaudited)—-|  
    Assets            
    Cash and cash equivalents $ 25,436   32,728     29,439    
    Securities, net   22,595   15,220     15,143    
    Loans receivable, net:            
         Real estate mortgage loans   545,445   551,250     543,870    
         Commercial and Lines of Credit   14,729   12,823     13,950    
         Home Equity and Consumer Loans 709   700     704    
         Deferred costs   4,210   4,233     4,362    
         Allowance for Loan Credit Losses (5,100 ) (5,086 )   (5,028 )  
              Total loans receivable, net   559,993   563,920     557,858    
    Accrued interest receivable   2,670   2,625     2,533    
    Investment in restricted stock, at cost   4,342   5,191     5,782    
    Goodwill   581   581     581    
    Bank premises and equipment, net   5,050   5,600     5,608    
    Repossessed assets   –   –     164    
    Right of use lease assets   6,109   6,415     6,625    
    Bank Owned Life Insurance   5,450   5,341     5,305    
    Other Assets   1,014   1,129     1,278    
         Total Assets $ 633,240   638,750     630,316    
                 
    Liabilities & Stockholders’ Equity            
    Non-Interest-Bearing Deposits   97,867   107,849     125,562    
    Interest-Bearing Deposits   389,340   329,695     302,509    
    Brokered Deposits   20,773   56,581     42,873    
         Total Deposits   507,980   494,125     470,944    
    Bond Issue, net of costs   11,780   13,708     13,701    
    Borrowed Money   50,267   70,805     83,980    
    Lease Liability   6,382   6,672     6,877    
    Other Liabilities   9,710   7,578     9,208    
         Total Liabilities   586,119   592,888     584,710    
    Stockholders’ equity   47,121   45,862     45,606    
         Total liabilities and stockholders’ equity $ 633,240   638,750     630,316    
        
      ES Bancshares, Inc.
      Consolidated Statements of Income
      (in thousands)
                   
      Three Months Ended   Nine Months Ended
      September 30,
    2024    		 June 30,
    2024    		   September 30,
    2023    		   September 30,
    2024    		 September 30,
    2023
      |————–(unaudited)————–|   |—-(unaudited)—-|
    Interest income              
    Loans $ 7,315   $ 7,345   $ 6,716   $ 21,868 $ 19,284
    Securities   218     121     111     454   336
    Other interest-earning assets   428     561     319     1,252   1,140
         Total Interest Income   7,961     8,027     7,146     23,574   20,760
    Interest expense              
    Deposits   3,674     3,837     2,459     11,096   6,107
    Borrowings   720     743     710     2,261   2,220
         Total Interest Expense   4,394     4,580     3,169     13,357   8,327
              Net Interest Income   3,567     3,447     3,977     10,217   12,433
    (Rev)Prov for Credit Losses   (38 )   9     86     10   103
         Net Interest Income after (Rev)Prov for Credit Losses   3,605     3,438     3,891     10,207   12,330
    Non-interest income              
    Service charges and fees   264     200     205     636   508
    Gain on loan sales   –     –     12     1   138
    Gain on extinguishment of Sub-debt   245     –     –     245   –
    Other   100     129     39     271   112
         Total non-interest income   609     329     256     1,153   758
    Non-interest expenses              
    Compensation and benefits   1,719     1,728     1,856     5,168   5,664
    Occupancy and equipment   618     605     729     1,891   2,010
    Data processing service fees   315     317     397     958   1,039
    Professional fees   155     225     315     561   747
    FDIC & NYS Banking Assessments   100     99     71     296   183
    Advertising   84     85     107     244   305
    Insurance   55     46     54     151   140
    Other   365     401     446     1,103   1,198
         Total non-interest expense   3,411     3,506     3,975     10,372   11,286
              Income prior to tax expense   803     261     172     988   1,802
    Income taxes   221     103     39     351   414
              Net Income $ 582   $ 158   $ 133   $ 637 $ 1,388
                   
                       
      ES Bancshares, Inc.
      Average Balance Sheet Data
      For the Three Months Ended (dollars in thousands)
      September 30, 2024 June 30, 2024 September 30, 2023
      Avg Bal Interest Average Avg Bal Interest Average Avg Bal Interest Average
      Rolling Rolling Rolling Rolling Rolling Rolling
    Assets  3 Mos.  3 Mos. Yield/Cost  3 Mos.  3 Mos. Yield/Cost  3 Mos.  3 Mos. Yield/Cost
    Interest-earning assets:                  
        Loans receivable $ 566,031 $ 7,315 5.17 % $ 565,363 $ 7,345 5.20 % $ 555,919 $ 6,716 4.83 %
        Investment securities   22,480   218 3.87 %   15,513   121 3.13 %   16,151   111 2.75 %
        Other interest-earning assets   31,656   428 5.29 %   41,652   561 5.33 %   24,532   319 5.12 %
           Total interest-earning assets   620,167   7,961 5.13 %   622,528   8,027 5.16 %   596,602   7,146 4.79 %
    Non-interest earning assets   17,919       16,398       17,371    
           Total assets $ 638,086     $ 638,926     $ 613,973    
    Liabilities and Stockholders’ Equity                  
    Interest-bearing liabilities:                  
        Interest-bearing checking $ 33,512 $ 55 0.65 % $ 36,692 $ 71 0.77 % $ 29,162 $ 28 0.38 %
        Savings accounts   200,248   1,728 3.42 %   175,686   1,629 3.72 %   121,849   536 1.75 %
        Certificates of deposit   173,577   1,891 4.32 %   194,806   2,137 4.40 %   212,094   1,895 3.54 %
           Total interest-bearing deposits   407,337   3,674 3.58 %   407,184   3,837 3.78 %   363,105   2,459 2.69 %
        Borrowings   52,984   519 3.89 %   55,510   522 3.77 %   51,557   488 3.76 %
        Subordinated debenture   12,388   201 6.44 %   13,726   221 6.46 %   13,695   222 6.41 %
           Total interest-bearing liabilities   472,709   4,394 3.69 %   476,420   4,580 3.86 %   428,357   3,169 2.93 %
    Non-interest-bearing demand deposits   104,782       102,866       124,711    
    Other liabilities   13,842       13,429       15,348    
           Total non-interest-bearing liabilities   118,624       116,295       140,059    
    Stockholders’ equity   46,753       46,211       45,557    
           Total liabilities and stockholders’ equity $ 638,086     $ 638,926     $ 613,973    
    Net interest income   $ 3,567     $ 3,447     $ 3,977  
    Average interest rate spread     1.45 %     1.30 %     1.86 %
    Net interest margin     2.30 %     2.21 %     2.67 %
                       
                       
                   
    Five Quarter
    Performance Ratio Highlights    		 Three Months Ended
    September 30,
    2024    		 June 30,
    2024    		 March 31,
    2024    		 December 31,
    2023    		 September 30,
    2023    		  
    Performance Ratios (%) – annualized            
      Return(loss) on Average Assets   0.36   0.10    (0.07 )   0.05   0.09  
      Return(loss) on Average Equity   4.98   1.37    (0.90 )   0.73   1.17  
      Return(loss) on Average Tangible Equity   5.04   1.38    (0.91 )   0.74   1.18  
      Efficiency Ratio   81.70   92.86   101.08     99.31   93.89  
    Yields / Costs (%)            
      Average Yield – Interest Earning Assets   5.13   5.16   5.03     4.92   4.79  
      Average Cost – Interest-bearing Liabilities   3.69   3.86   3.82     3.55   2.93  
      Net Interest Margin   2.30   2.21   2.12     2.28   2.67  
    Capital Ratios (%)            
      Equity / Assets   7.44   7.12   7.34     7.18   7.24  
      Tangible Equity / Assets   7.36   7.03   7.26     7.09   7.15  
      Tier I leverage ratio (a)   9.18   9.30   9.52     9.45   9.54  
      Common equity Tier I capital ratio (a)   13.67   13.81   13.63     13.60   13.47  
      Tier 1 Risk-based capital ratio (a)   13.67   13.81   13.63     13.60   13.47  
      Total Risk-based capital ratio (a)   14.92   15.06   14.88     14.85   14.63  
    Stock Valuation            
      Book Value $ 6.85 $ 6.74 $ 6.75   $ 6.83 $ 6.79  
      Tangible Book Value $ 6.77 $ 6.65 $ 6.67   $ 6.74 $ 6.71  
      Shares Outstanding (b)   6,878   6,884   6,834     6,714   6,714  
    Asset Quality (%)            
      ACL / Total Loans   0.90   0.90   0.89     0.89   0.89  
      Non Performing Loans / Total Loans   0.91   0.22   0.24     0.22   0.25  
      Non Performing Assets / Total Assets   0.81   0.19   0.21     0.22   0.25  
                   
      (a) Ratios at Bank level             (b) Shares information presented in thousands        
                   

    The MIL Network –

  • MIL-OSI: Red River Bancshares, Inc. Reports Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    ALEXANDRIA, La., Oct. 30, 2024 (GLOBE NEWSWIRE) — Red River Bancshares, Inc. (the “Company”) (Nasdaq: RRBI), the holding company for Red River Bank (the “Bank”), announced today its unaudited financial results for the third quarter of 2024.

    Net income for the third quarter of 2024 was $8.8 million, or $1.27 per diluted common share (“EPS”), an increase of $767,000, or 9.6%, compared to $8.0 million, or $1.16 EPS, for the second quarter of 2024, and an increase of $733,000, or 9.1%, compared to $8.0 million, or $1.12 EPS, for the third quarter of 2023. For the third quarter of 2024, the quarterly return on assets was 1.13%, and the quarterly return on equity was 11.11%.

    Net income for the nine months ended September 30, 2024, was $24.9 million, or $3.59 EPS, a decrease of $1.7 million, or 6.2%, compared to $26.6 million, or $3.70 EPS, for the nine months ended September 30, 2023. For the nine months ended September 30, 2024, the return on assets was 1.08%, and the return on equity was 10.86%.

    Third Quarter 2024 Performance and Operational Highlights

    In the third quarter of 2024, the Company reported higher earnings, an improved net interest margin, and fairly consistent loans and deposits. We deployed excess funds into the securities portfolio and completed a significant stock repurchase. In mid-September, the target range of the federal funds rate was reduced by 50 basis points (“bps”).

    • Net income for the third quarter of 2024 was $8.8 million compared to $8.0 million for the prior quarter. Net income for the third quarter benefited from higher net interest income and an improved net interest margin fully tax equivalent (“FTE”), along with higher noninterest income.
    • Net interest income and net interest margin FTE increased for the third quarter of 2024 compared to the prior quarter. Net interest income for the third quarter of 2024 was $22.5 million compared to $21.8 million for the prior quarter. Net interest margin FTE for the third quarter of 2024 was 2.98% compared to 2.92% for the prior quarter. These increases were due to improved yields on securities and loans outpacing higher deposit rates.
    • Noninterest income totaled $5.4 million for the third quarter of 2024, an increase of $321,000, or 6.3%, compared to $5.1 million for the previous quarter. Noninterest income benefited from the receipt of a $151,000 nonrecurring loan fee.
    • As of September 30, 2024, assets were $3.10 billion, which was $53.2 million, or 1.7%, higher than June 30, 2024. The increase was mainly due to a $30.5 million increase in deposits.
    • Deposits totaled $2.75 billion as of September 30, 2024, an increase of $30.5 million, or 1.1%, compared to $2.72 billion as of June 30, 2024. In the third quarter of 2024, customer deposit balances remained consistent, with normal activity.
    • As of September 30, 2024, loans held for investment (“HFI”) were $2.06 billion, slightly higher than $2.05 billion as of June 30, 2024. In the third quarter of 2024, we closed on a high level of loan commitments, which should fund over time.
    • As of September 30, 2024, total securities were $697.7 million, which was $31.1 million, or 4.7%, higher than June 30, 2024. In the third quarter of 2024, we redeployed cash flows from lower yielding securities into higher yielding securities, as well as deployed other liquid assets into the securities portfolio.
    • As of September 30, 2024, liquid assets, which are cash and cash equivalents, were $232.6 million, and the liquid assets to assets ratio was 7.50%. We do not have any borrowings, brokered deposits, or internet-sourced deposits.
    • In the third quarter of 2024, the provision for credit losses totaled $300,000. This included $200,000 for loans and $100,000 for unfunded loan commitments.
    • As of September 30, 2024, nonperforming assets (“NPA(s)”) were $3.1 million, or 0.10% of assets, and the allowance for credit losses (“ACL”) was $21.8 million, or 1.06% of loans HFI.
    • We paid a quarterly cash dividend of $0.09 per common share in the third quarter of 2024.
    • The 2024 stock repurchase program authorizes us to purchase up to $5.0 million of our outstanding shares of common stock from January 1, 2024 through December 31, 2024. In the third quarter of 2024, we entered into a privately negotiated stock repurchase agreement for the repurchase of 60,000 shares at an aggregate cost of $3.0 million. In connection with this repurchase, we reduced the availability under the 2024 repurchase program by $3.0 million. We also repurchased 233 shares at an aggregate cost of $11,000 from the open market. As of September 30, 2024, the 2024 stock repurchase program had $1.2 million remaining.
    • As of September 30, 2024, capital levels were strong with a stockholders’ equity to assets ratio of 10.46%, a leverage ratio of 11.90%, and a total risk-based capital ratio of 18.07%.
    • The book value per share of common stock was $47.51 as of September 30, 2024, compared to $44.58 as of June 30, 2024. This improvement was primarily due to the decrease in the accumulated other comprehensive loss related to securities and net income added to stockholders’ equity, partially offset by stock repurchases.

    Blake Chatelain, President and Chief Executive Officer, stated, “We are pleased with the financial results for the third quarter of 2024. We managed continued improvement to the net interest margin FTE, higher earnings, solid asset quality, steady loan activity, and continued strong liquidity and capital.

    “Throughout the majority of the third quarter, until the Federal Reserve reduced the federal funds rate, we continued to reprice assets at a quicker pace than liabilities, which benefited net interest margin FTE and net interest income. Loan demand continued to be steady in the third quarter, despite some companies possibly placing investment decisions on hold due to the pending presidential election. We did, however, close on a significant amount of construction loan commitments, which should fund over the next year.

    “On September 18, 2024, the Federal Reserve reduced the federal funds rate by 50 bps. This marks the conclusion of one of the most aggressive interest rate tightening cycles in many years. The rapid increase in interest rates has been challenging for banks and their customers. A lower interest rate environment should spur loan demand and mortgage loan activity, as well as help moderate accumulated other comprehensive loss in stockholders’ equity related to securities. Overall, the Louisiana economy seems to be faring well, and our customers’ balance sheets and earnings appear solid.

    “Our company is well-positioned for the future, with robust capital and liquidity levels combined with a great team of community bankers. As we gain more clarity regarding future interest rates and the presidential election concludes, we remain committed to providing steady financial results for the company.”

    Net Interest Income and Net Interest Margin FTE

    Net interest income and net interest margin FTE increased in the third quarter of 2024 compared to the prior quarter. These increases were due to improved yields on securities and loans outpacing higher deposit rates. After keeping the federal funds rate consistent since the third quarter of 2023, the Federal Open Market Committee (“FOMC”) decreased the federal funds rate by 50 bps in September of 2024.

    Net interest income for the third quarter of 2024 was $22.5 million, which was $670,000, or 3.1%, higher than the second quarter of 2024, due to a $1.2 million increase in interest and dividend income, partially offset by a $550,000 increase in interest expense. The increase in interest and dividend income was due to higher interest income on loans and securities. Loan income increased $1.0 million primarily due to higher rates on new and renewed loans compared to the existing portfolio. The average rate on new and renewed loans was 7.89% for the third quarter of 2024 and 7.98% for the prior quarter. Securities income increased $266,000 due to reinvesting lower yielding securities cash flows into higher yielding securities. The increase in interest expense was primarily due to higher rates on interest-bearing transaction deposits and time deposits.

    The net interest margin FTE increased six bps to 2.98% for the third quarter of 2024, compared to 2.92% for the prior quarter. This increase was due to improved yields on securities and loans, partially offset by higher deposit costs. The yield on securities increased 15 bps due to reinvesting lower yielding securities cash flows into higher yielding securities. The yield on loans increased 11 bps due to higher rates on new and renewed loans compared to the existing portfolio. The cost of deposits increased six bps to 1.81% for the third quarter of 2024, compared to 1.75% for the previous quarter, primarily due to a nine bp increase in the rate on interest-bearing deposits during the third quarter, partially offset by our adjustment to certain transaction deposit rates late in the third quarter.

    Late in the third quarter of 2024, the target range of the federal funds rate was reduced 50 bps to 4.75%-5.00%. At that time, we adjusted rates on transaction and time deposits, and we expect to continue lowering these rates in conjunction with future federal funds rate decreases. The market’s expectation is that the FOMC will continue lowering the target federal funds rate in the fourth quarter of 2024. During the twelve months ending September 30, 2025, we anticipate receiving approximately $134.0 million in securities cash flows with an average yield of 2.86%, and we project approximately $194.2 million of fixed rate loans will mature with an average yield of 5.95%. We expect to redeploy these balances into higher yielding assets. Additionally, during the twelve months ending September 30, 2025, we expect $558.5 million of time deposits to mature with an average rate of 4.47%, which we anticipate repricing into lower cost deposits. As of September 30, 2024, floating rate loans were 14.9% of loans HFI, and floating rate transaction deposits were 7.2% of interest-bearing transaction deposits. Depending on balance sheet activity and the movement in interest rates, we expect the net interest income and net interest margin FTE to improve slightly in the fourth quarter of 2024.

    Provision for Credit Losses

    The provision for credit losses for the third quarter of 2024 totaled $300,000, which included $200,000 for loans and $100,000 for unfunded loan commitments. The provision for credit losses in the second quarter was $300,000 for loans. The provision in the second and third quarters was due to potential economic challenges resulting from the recent inflationary environment, changing monetary policy, and loan growth. In the third quarter of 2024, we had an increase in unfunded loan commitments. We will continue to evaluate future provision needs in relation to current economic situations, loan growth, trends in asset quality, forecasted information, and other conditions influencing loss expectations.

    Noninterest Income

    Noninterest income totaled $5.4 million for the third quarter of 2024, an increase of $321,000, or 6.3%, compared to $5.1 million for the previous quarter. The increase was mainly due to a gain on equity securities and increases in service charges on deposit accounts, loan and deposit income, and brokerage income, partially offset by a decrease in Small Business Investment Company (“SBIC”) income.

    Equity securities are an investment in a Community Reinvestment Act (“CRA”) mutual fund consisting primarily of bonds. The gain or loss on equity securities is a fair value adjustment primarily driven by changes in the interest rate environment. Due to the fluctuations in market rates between quarters, equity securities had a gain of $107,000 in the third quarter of 2024, compared to a loss of $13,000 for the previous quarter.

    Service charges on deposit accounts totaled $1.5 million for the third quarter of 2024, an increase of $119,000, or 8.7%, compared to $1.4 million for the previous quarter. This increase was mainly due to a larger number of non-sufficient fund transactions and related fee income in the third quarter of 2024.

    Loan and deposit income totaled $588,000 for the third quarter of 2024, an increase of $96,000, or 19.5%, compared to $492,000 for the previous quarter. The third quarter of 2024 benefited from the receipt of a $151,000 nonrecurring loan fee.

    Brokerage income was $987,000 for the third quarter of 2024, an increase of $94,000, or 10.5%, compared to $893,000 for the previous quarter. The higher income in the third quarter of 2024 was mainly due to increased investing activity by clients. Assets under management were $1.13 billion as of September 30, 2024.

    SBIC income for the third quarter of 2024 was $301,000, a decrease of $153,000, or 33.7%, compared to $454,000 for the previous quarter. This decrease was primarily due to lower normal income received from these partnerships in the third quarter. We expect SBIC income to be slightly higher in the fourth quarter of 2024 when compared to the third quarter.

    Operating Expenses

    Operating expenses totaled $16.8 million for the third quarter of 2024, an increase of $63,000, or 0.4%, compared to $16.7 million for the previous quarter. This increase was mainly due to higher technology expenses and other tax expenses.

    Technology expenses totaled $865,000 for the third quarter of 2024, an increase of $141,000, or 19.5%, compared to $724,000 for the previous quarter. This increase was primarily due to continued upgrades to our core banking systems and other software technology enhancements.

    Other taxes totaled $622,000 for the third quarter of 2024, an increase of $122,000, or 24.4%, compared to $500,000 for the previous quarter. The second quarter benefited from the reversal of $145,000 of stock repurchase tax expense due to finalized guidelines.

    Asset Overview

    As of September 30, 2024, assets were $3.10 billion, compared to assets of $3.05 billion as of June 30, 2024, an increase of $53.2 million, or 1.7%. In the third quarter, assets were mainly impacted by a $30.5 million, or 1.1%, increase in deposits. In the third quarter of 2024, liquid assets increased $19.6 million, or 9.2%, to $232.6 million and averaged $224.0 million for the third quarter. As of September 30, 2024, we had sufficient liquid assets available and $1.69 billion accessible from other liquidity sources. The liquid assets to assets ratio was 7.50% as of September 30, 2024. Total securities increased $31.1 million, or 4.7%, to $697.7 million in the third quarter and were 22.5% of assets as of September 30, 2024. During the third quarter, loans HFI increased $8.2 million, or 0.4%, to $2.06 billion. The loans HFI to deposits ratio was 74.84% as of September 30, 2024, compared to 75.38% as of June 30, 2024.

    Securities

    Total securities as of September 30, 2024, were $697.7 million, an increase of $31.1 million, or 4.7%, from June 30, 2024. Securities increased primarily due to $52.9 million in purchases combined with a $14.9 million reduction in net unrealized loss on securities AFS. This was partially offset by maturities and principal repayments.

    The estimated fair value of securities available for sale (“AFS”) totaled $560.6 million, net of $49.5 million of unrealized loss, as of September 30, 2024, compared to $526.9 million, net of $64.4 million of unrealized loss, as of June 30, 2024. As of September 30, 2024, the amortized cost of securities held-to-maturity (“HTM”) totaled $134.1 million compared to $136.8 million as of June 30, 2024. As of September 30, 2024, securities HTM had an unrealized loss of $17.3 million compared to $22.8 million as of June 30, 2024.

    As of September 30, 2024, equity securities, which is an investment in a CRA mutual fund consisting primarily of bonds, totaled $3.0 million compared to $2.9 million as of June 30, 2024.

    Loans

    Loans HFI as of September 30, 2024, were $2.06 billion, slightly higher than $2.05 billion as of June 30, 2024. In the third quarter of 2024, we closed on a high level of loan commitments, which, depending on customer activity, should fund over time. Unfunded loan commitments that originated in the third quarter of 2024 totaled $76.4 million.

    Loans HFI by Category
      September 30, 2024   June 30, 2024   Change from
    June 30, 2024 to
    September 30, 2024
    (dollars in thousands) Amount   Percent   Amount   Percent   $ Change   % Change
    Real estate:                      
    Commercial real estate $ 875,590   42.6%     $ 865,645   42.3%     $ 9,945     1.1%  
    One-to-four family residential   616,467   30.0%       611,904   29.9%       4,563     0.7%  
    Construction and development   141,525   6.9%       129,197   6.3%       12,328     9.5%  
    Commercial and industrial   327,069   15.9%       344,071   16.8%       (17,002)     (4.9%)  
    Tax-exempt   66,436   3.2%       67,941   3.3%       (1,505)     (2.2%)  
    Consumer   28,961   1.4%       29,132   1.4%       (171)     (0.6%)  
    Total loans HFI $ 2,056,048   100.0%     $ 2,047,890   100.0%     $ 8,158     0.4%  

    Commercial real estate (“CRE”) loans are collateralized by owner occupied and non-owner occupied properties mainly in Louisiana. Non-owner occupied office loans were $57.2 million, or 2.8% of loans HFI, as of September 30, 2024, and are primarily centered in low-rise suburban areas. The average CRE loan size was $947,000 as of September 30, 2024.

    Health care loans are our largest industry concentration and are made up of a diversified portfolio of health care providers. As of September 30, 2024, total health care loans were 8.0% of loans HFI. Within the health care sector, loans to nursing and residential care facilities were 4.4% of loans HFI, and loans to physician and dental practices were 3.4% of loans HFI. The average health care loan size was $399,000 as of September 30, 2024.

    Asset Quality and Allowance for Credit Losses

    NPAs totaled $3.1 million as of September 30, 2024, a decrease of $103,000, or 3.2%, from June 30, 2024, primarily due to changes to nonaccrual loans. The ratio of NPAs to assets was 0.10% as of September 30, 2024, and 0.11% as of June 30, 2024.

    As of September 30, 2024, the ACL was $21.8 million. The ratio of ACL to loans HFI was 1.06% as of September 30, 2024 and June 30, 2024. The net charge-offs to average loans ratio was 0.00% for the third quarter of 2024 and 0.01% for the second quarter of 2024.

    Deposits

    As of September 30, 2024, deposits were $2.75 billion, an increase of $30.5 million, or 1.1%, compared to June 30, 2024. Average deposits for the third quarter of 2024 were $2.73 billion, a decrease of $5.6 million, or 0.2%, from the prior quarter. The following tables provide details on our deposit portfolio:

    Deposits by Account Type
      September 30, 2024   June 30, 2024   Change from
    June 30, 2024 to
    September 30, 2024
    (dollars in thousands) Balance   % of Total   Balance   % of Total   $ Change   % Change
    Noninterest-bearing demand deposits $ 882,394   32.1%     $ 892,942   32.9%     $ (10,548)     (1.2%)  
    Interest-bearing deposits:                      
    Interest-bearing demand deposits   163,787   6.0%       135,543   5.0%       28,244     20.8%  
    NOW accounts   379,566   13.8%       377,385   13.9%       2,181     0.6%  
    Money market accounts   551,229   20.0%       547,715   20.1%       3,514     0.6%  
    Savings accounts   166,723   6.1%       170,050   6.3%       (3,327)     (2.0%)  
    Time deposits less than or equal to $250,000   411,361   15.0%       399,981   14.7%       11,380     2.8%  
    Time deposits greater than $250,000   192,065   7.0%       193,030   7.1%       (965)     (0.5%)  
    Total interest-bearing deposits   1,864,731   67.9%       1,823,704   67.1%       41,027     2.2%  
    Total deposits $ 2,747,125   100.0%     $ 2,716,646   100.0%     $ 30,479     1.1%  
    Deposits by Customer Type
      September 30, 2024   June 30, 2024   Change from
    June 30, 2024 to
    September 30, 2024
    (dollars in thousands) Balance   % of Total   Balance   % of Total   $ Change   % Change
    Consumer $ 1,348,281   49.1%     $ 1,351,709   49.8%     $ (3,428)     (0.3%)  
    Commercial   1,191,625   43.4%       1,149,023   42.3%       42,602     3.7%  
    Public   207,219   7.5%       215,914   7.9%       (8,695)     (4.0%)  
    Total deposits $ 2,747,125   100.0%     $ 2,716,646   100.0%     $ 30,479     1.1%  
     

    In the third quarter of 2024, customer deposit balances remained consistent, with normal activity.

    The Bank has a granular, diverse deposit portfolio with customers in a variety of industries throughout Louisiana. As of September 30, 2024, the average deposit account size was approximately $27,000.

    As of September 30, 2024, our estimated uninsured deposits, which are the portion of deposit accounts that exceed the FDIC insurance limit (currently $250,000), were approximately $832.2 million, or 30.3% of total deposits. This amount was estimated based on the same methodologies and assumptions used for regulatory reporting purposes. Also, as of September 30, 2024, our estimated uninsured deposits, excluding collateralized public entity deposits, were approximately $674.8 million, or 24.6% of total deposits. Our cash and cash equivalents of $232.6 million, combined with our available borrowing capacity of $1.69 billion, equaled 231.3% of our estimated uninsured deposits and 285.2% of our estimated uninsured deposits, excluding collateralized public entity deposits.

    Stockholders’ Equity

    Total stockholders’ equity as of September 30, 2024, was $324.3 million compared to $307.0 million as of June 30, 2024. The $17.3 million, or 5.6%, increase in stockholders’ equity during the third quarter of 2024 was attributable to a $12.1 million, net of tax, market adjustment to accumulated other comprehensive loss related to securities, $8.8 million of net income, and $92,000 of stock compensation, partially offset by the repurchase of 60,233 shares of common stock for $3.0 million and $615,000 in cash dividends. We paid a quarterly cash dividend of $0.09 per share on September 19, 2024.

    Non-GAAP Disclosure

    Our accounting and reporting policies conform to United States generally accepted accounting principles (“GAAP”) and the prevailing practices in the banking industry. Certain financial measures used by management to evaluate our operating performance are discussed as supplemental non-GAAP performance measures. In accordance with the Securities and Exchange Commission’s (“SEC”) rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the U.S.

    Management and the board of directors review tangible book value per share, tangible common equity to tangible assets, and realized book value per share as part of managing operating performance. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that are discussed may differ from that of other companies’ reporting measures with similar names. It is important to understand how such other banking organizations calculate and name their financial measures similar to the non-GAAP financial measures discussed by us when comparing such non-GAAP financial measures.

    A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included within the following financial statement tables.

    About Red River Bancshares, Inc.

    Red River Bancshares, Inc. is the bank holding company for Red River Bank, a Louisiana state-chartered bank established in 1999 that provides a fully integrated suite of banking products and services tailored to the needs of commercial and retail customers. Red River Bank operates from a network of 28 banking centers throughout Louisiana and one combined loan and deposit production office in New Orleans, Louisiana. Banking centers are located in the following Louisiana markets: Central, which includes the Alexandria metropolitan statistical area (“MSA”); Northwest, which includes the Shreveport-Bossier City MSA; Capital, which includes the Baton Rouge MSA; Southwest, which includes the Lake Charles MSA; the Northshore, which includes Covington; Acadiana, which includes the Lafayette MSA; and New Orleans.

    Forward-Looking Statements

    Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q, and in other documents that we file with the SEC from time to time. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this news release are qualified in their entirety by this cautionary statement.

    Contact:
    Isabel V. Carriere, CPA, CGMA
    Executive Vice President, Chief Financial Officer, and Assistant Corporate Secretary
    318-561-4023
    icarriere@redriverbank.net

    FINANCIAL HIGHLIGHTS (UNAUDITED)
     
        As of and for the
    Three Months Ended    		   As of and for the
    Nine Months Ended
    (dollars in thousands, except per share data)   September 30,
    2024    		   June 30,
    2024    		   September 30,
    2023    		   September 30,
    2024    		   September 30,
    2023
    Net Income   $ 8,754     $ 7,987     $ 8,021     $ 24,929     $ 26,587  
                         
    Per Common Share Data:                    
    Earnings per share, basic   $ 1.28     $ 1.16     $ 1.12     $ 3.60     $ 3.70  
    Earnings per share, diluted   $ 1.27     $ 1.16     $ 1.12     $ 3.59     $ 3.70  
    Book value per share   $ 47.51     $ 44.58     $ 39.43     $ 47.51     $ 39.43  
    Tangible book value per share (1)   $ 47.28     $ 44.35     $ 39.21     $ 47.28     $ 39.21  
    Realized book value per share (1)   $ 54.78     $ 53.54     $ 50.27     $ 54.78     $ 50.27  
    Cash dividends per share   $ 0.09     $ 0.09     $ 0.08     $ 0.27     $ 0.24  
    Shares outstanding     6,826,120       6,886,928       7,150,685       6,826,120       7,150,685  
    Weighted average shares outstanding, basic     6,851,223       6,896,030       7,168,413       6,932,137       7,176,219  
    Weighted average shares outstanding, diluted     6,867,474       6,914,140       7,180,084       6,949,196       7,188,371  
                         
    Summary Performance Ratios:                    
    Return on average assets     1.13%       1.05%       1.05%       1.08%       1.18%  
    Return on average equity     11.11%       10.69%       11.15%       10.86%       12.71%  
    Net interest margin     2.93%       2.87%       2.74%       2.87%       2.91%  
    Net interest margin FTE     2.98%       2.92%       2.78%       2.92%       2.94%  
    Efficiency ratio     60.09%       62.07%       61.70%       60.84%       59.02%  
    Loans HFI to deposits ratio     74.84%       75.38%       70.60%       74.84%       70.60%  
    Noninterest-bearing deposits to deposits ratio     32.12%       32.87%       35.22%       32.12%       35.22%  
    Noninterest income to average assets     0.70%       0.67%       0.73%       0.67%       0.71%  
    Operating expense to average assets     2.17%       2.19%       2.13%       2.14%       2.12%  
                         
    Summary Credit Quality Ratios:                    
    NPAs to assets     0.10%       0.11%       0.07%       0.10%       0.07%  
    Nonperforming loans to loans HFI     0.15%       0.16%       0.10%       0.15%       0.10%  
    ACL to loans HFI     1.06%       1.06%       1.09%       1.06%       1.09%  
    Net charge-offs to average loans     0.00%       0.01%       0.00%       0.02%       0.01%  
                         
    Capital Ratios:                    
    Stockholders’ equity to assets     10.46%       10.07%       9.20%       10.46%       9.20%  
    Tangible common equity to tangible assets(1)     10.41%       10.02%       9.15%       10.41%       9.15%  
    Total risk-based capital to risk-weighted assets     18.07%       18.01%       18.35%       18.07%       18.35%  
    Tier 1 risk-based capital to risk-weighted assets     17.05%       16.99%       17.31%       17.05%       17.31%  
    Common equity Tier 1 capital to risk-weighted assets     17.05%       16.99%       17.31%       17.05%       17.31%  
    Tier 1 risk-based capital to average assets     11.90%       11.74%       11.56%       11.90%       11.56%  

    (1)  Non-GAAP financial measure. Calculations of this measure and reconciliations to GAAP are included in the schedules accompanying this release.

    RED RIVER BANCSHARES, INC.
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
     
    (in thousands) September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   September 30,
    2023
    ASSETS                  
    Cash and due from banks $ 39,664     $ 35,035     $ 19,401     $ 53,062     $ 42,413  
    Interest-bearing deposits in other banks   192,983       178,038       210,404       252,364       279,786  
    Securities available-for-sale, at fair value   560,555       526,890       545,967       570,092       529,046  
    Securities held-to-maturity, at amortized cost   134,145       136,824       139,328       141,236       143,420  
    Equity securities, at fair value   3,028       2,921       2,934       2,965       2,833  
    Nonmarketable equity securities   2,305       2,283       2,261       2,239       2,190  
    Loans held for sale   1,805       3,878       1,653       1,306       2,348  
    Loans held for investment   2,056,048       2,047,890       2,038,072       1,992,858       1,948,606  
    Allowance for credit losses   (21,757)       (21,627)       (21,564)       (21,336)       (21,183)  
    Premises and equipment, net   57,661       57,910       57,539       57,088       56,466  
    Accrued interest receivable   9,465       9,570       9,995       9,945       8,778  
    Bank-owned life insurance   30,164       29,947       29,731       29,529       29,332  
    Intangible assets   1,546       1,546       1,546       1,546       1,546  
    Right-of-use assets   2,853       2,973       3,091       3,629       3,757  
    Other assets   31,285       34,450       32,940       32,287       36,815  
    Total Assets $ 3,101,750     $ 3,048,528     $ 3,073,298     $ 3,128,810     $ 3,066,153  
                       
    LIABILITIES                  
    Noninterest-bearing deposits $ 882,394     $ 892,942     $ 895,439     $ 916,456     $ 972,155  
    Interest-bearing deposits   1,864,731       1,823,704       1,850,452       1,885,432       1,787,738  
    Total Deposits   2,747,125       2,716,646       2,745,891       2,801,888       2,759,893  
    Accrued interest payable   11,751       8,747       8,959       8,000       6,800  
    Lease liabilities   2,982       3,100       3,215       3,767       3,892  
    Accrued expenses and other liabilities   15,574       13,045       15,919       11,304       13,617  
    Total Liabilities   2,777,432       2,741,538       2,773,984       2,824,959       2,784,202  
    COMMITMENTS AND CONTINGENCIES   —       —       —       —       —  
    STOCKHOLDERS’ EQUITY                  
    Preferred stock, no par value   —       —       —       —       —  
    Common stock, no par value   41,402       44,413       45,177       55,136       58,031  
    Additional paid-in capital   2,682       2,590       2,485       2,407       2,327  
    Retained earnings   329,858       321,719       314,352       306,802       299,079  
    Accumulated other comprehensive income (loss)   (49,624)       (61,732)       (62,700)       (60,494)       (77,486)  
    Total Stockholders’ Equity   324,318       306,990       299,314       303,851       281,951  
    Total Liabilities and Stockholders’ Equity $ 3,101,750     $ 3,048,528     $ 3,073,298     $ 3,128,810     $ 3,066,153  
    RED RIVER BANCSHARES, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                         
        For the Three Months Ended   For the Nine
    Months Ended
    (in thousands)   September 30,
    2024    		   June 30,
    2024    		   September 30,
    2023    		   September 30,
    2024    		   September 30,
    2023
    INTEREST AND DIVIDEND INCOME                                    
    Interest and fees on loans   $ 27,909   $ 26,882     $ 23,925     $ 80,684   $ 68,541  
    Interest on securities     4,334     4,068       3,404       12,465     10,635  
    Interest on federal funds sold     —     —       —       —     886  
    Interest on deposits in other banks     2,630     2,709       2,950       8,378     6,359  
    Dividends on stock     28     22       45       73     106  
    Total Interest and Dividend Income     34,901     33,681       30,324       101,600     86,527  
    INTEREST EXPENSE                    
    Interest on deposits     12,444     11,894       9,562       35,993     21,319  
    Interest on other borrowed funds     —     —       37       —     64  
    Total Interest Expense     12,444     11,894       9,599       35,993     21,383  
    Net Interest Income     22,457     21,787       20,725       65,607     65,144  
    Provision for credit losses     300     300       185       900     485  
    Net Interest Income After Provision for Credit Losses     22,157     21,487       20,540       64,707     64,659  
    NONINTEREST INCOME                    
    Service charges on deposit accounts     1,486     1,367       1,489       4,223     4,317  
    Debit card income, net     905     949       830       2,875     2,687  
    Mortgage loan income     732     650       604       1,838     1,524  
    Brokerage income     987     893       1,029       2,867     2,759  
    Loan and deposit income     588     492       571       1,572     1,566  
    Bank-owned life insurance income     217     216       191       635     557  
    Gain (Loss) on equity securities     107     (13)       (113)       63     (145)  
    SBIC income     301     454       920       1,107     2,479  
    Other income (loss)     96     90       60       266     184  
    Total Noninterest Income     5,419     5,098       5,581       15,446     15,928  
    OPERATING EXPENSES                    
    Personnel expenses     9,700     9,603       9,461       28,854     28,008  
    Occupancy and equipment expenses     1,661     1,698       1,663       4,975     4,933  
    Technology expenses     865     724       675       2,298     2,066  
    Advertising     317     408       331       1,061     955  
    Other business development expenses     521     593       522       1,589     1,451  
    Data processing expense     652     651       651       1,650     1,689  
    Other taxes     622     500       664       1,859     2,042  
    Loan and deposit expenses     294     309       238       561     728  
    Legal and professional expenses     653     729       616       2,000     1,714  
    Regulatory assessment expenses     421     401       419       1,226     1,223  
    Other operating expenses     1,046     1,073       990       3,241     3,041  
    Total Operating Expenses     16,752     16,689       16,230       49,314     47,850  
    Income Before Income Tax Expense     10,824     9,896       9,891       30,839     32,737  
    Income tax expense     2,070     1,909       1,870       5,910     6,150  
    Net Income   $ 8,754   $ 7,987     $ 8,021     $ 24,929   $ 26,587  
    RED RIVER BANCSHARES, INC.
    NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
     
      For the Three Months Ended
      September 30, 2024   June 30, 2024
    (dollars in thousands) Average Balance Outstanding   Interest
    Income/
    Expense    		   Average
    Yield/
    Rate    		   Average Balance Outstanding   Interest
    Income/
    Expense    		   Average
    Yield/
    Rate
    Assets                      
    Interest-earning assets:                      
    Loans(1,2) $ 2,054,451     $ 27,909   5.32%     $ 2,042,602     $ 26,882   5.21%  
    Securities – taxable   545,171       3,344   2.45%       546,466       3,069   2.25%  
    Securities – tax-exempt   191,285       990   2.07%       193,954       999   2.06%  
    Interest-bearing deposits in other banks   194,229       2,630   5.36%       199,668       2,709   5.43%  
    Nonmarketable equity securities   2,284       28   4.85%       2,262       22   3.96%  
    Total interest-earning assets   2,987,420     $ 34,901   4.59%       2,984,952     $ 33,681   4.48%  
    Allowance for credit losses   (21,702)               (21,653)          
    Noninterest-earning assets   104,599               96,631          
    Total assets $ 3,070,317             $ 3,059,930          
    Liabilities and Stockholders’ Equity                      
    Interest-bearing liabilities:                      
    Interest-bearing transaction deposits $ 1,230,487     $ 6,042   1.95%     $ 1,230,474     $ 5,701   1.86%  
    Time deposits   597,286       6,402   4.26%       595,120       6,193   4.19%  
    Total interest-bearing deposits   1,827,773       12,444   2.71%       1,825,594       11,894   2.62%  
    Other borrowings   —       —   —%       1       —   5.78%  
    Total interest-bearing liabilities   1,827,773     $ 12,444   2.71%       1,825,595     $ 11,894   2.62%  
    Noninterest-bearing liabilities:                      
    Noninterest-bearing deposits   901,192               908,930          
    Accrued interest and other liabilities   28,006               24,868          
    Total noninterest-bearing liabilities   929,198               933,798          
    Stockholders’ equity   313,346               300,537          
    Total liabilities and stockholders’ equity $ 3,070,317             $ 3,059,930          
    Net interest income     $ 22,457           $ 21,787    
    Net interest spread         1.88%             1.86%  
    Net interest margin         2.93%             2.87%  
    Net interest margin FTE(3)         2.98%             2.92%  
    Cost of deposits         1.81%             1.75%  
    Cost of funds         1.66%             1.60%  

    (1)  Includes average outstanding balances of loans held for sale of $3.0 million and $3.2 million for the three months ended September 30, 2024 and June 30, 2024, respectively.
    (2)  Nonaccrual loans are included as loans carrying a zero yield.
    (3)  Net interest margin FTE includes an FTE adjustment using a 21.0% federal income tax rate on tax-exempt securities and tax-exempt loans.

    RED RIVER BANCSHARES, INC.
    NET INTEREST INCOME AND NET INTEREST MARGIN (UNAUDITED)
     
      For the Nine Months Ended
      September 30, 2024   September 30, 2023
    (dollars in thousands) Average Balance Outstanding   Interest
    Income/
    Expense    		   Average
    Yield/
    Rate    		   Average Balance Outstanding   Interest
    Income/
    Expense    		   Average
    Yield/
    Rate
    Assets                      
    Interest-earning assets:                      
    Loans(1,2) $ 2,037,435     $ 80,684   5.21%     $ 1,933,226     $ 68,541   4.68%  
    Securities – taxable   553,714       9,461   2.28%       618,345       7,535   1.63%  
    Securities – tax-exempt   194,341       3,004   2.06%       203,748       3,100   2.03%  
    Federal funds sold   —       —   —%       24,861       886   4.70%  
    Interest-bearing deposits in other banks   206,023       8,378   5.40%       167,210       6,359   5.05%  
    Nonmarketable equity securities   2,262       73   4.27%       3,744       106   3.76%  
    Total interest-earning assets   2,993,775     $ 101,600   4.47%       2,951,134     $ 86,527   3.88%  
    Allowance for credit losses   (21,586)               (20,920)          
    Noninterest-earning assets   100,586               88,527          
    Total assets $ 3,072,775             $ 3,018,741          
    Liabilities and Stockholders’ Equity                      
    Interest-bearing liabilities:                      
    Interest-bearing transaction deposits $ 1,240,737     $ 17,424   1.88%     $ 1,259,198     $ 12,126   1.29%  
    Time deposits   591,771       18,569   4.19%       441,442       9,193   2.78%  
    Total interest-bearing deposits   1,832,508       35,993   2.62%       1,700,640       21,319   1.68%  
    Other borrowings   —       —   —%       1,539       64   5.49%  
    Total interest-bearing liabilities   1,832,508     $ 35,993   2.62%       1,702,179     $ 21,383   1.68%  
    Noninterest-bearing liabilities:                      
    Noninterest-bearing deposits   907,722               1,016,034          
    Accrued interest and other liabilities   25,983               20,951          
    Total noninterest-bearing liabilities   933,705               1,036,985          
    Stockholders’ equity   306,562               279,577          
    Total liabilities and stockholders’ equity $ 3,072,775             $ 3,018,741          
    Net interest income     $ 65,607           $ 65,144    
    Net interest spread         1.85%             2.20%  
    Net interest margin         2.87%             2.91%  
    Net interest margin FTE(3)         2.92%             2.94%  
    Cost of deposits         1.75%             1.05%  
    Cost of funds         1.61%             0.97%  

    (1)  Includes average outstanding balances of loans held for sale of $2.7 million and $2.5 million for the nine months ended September 30, 2024 and 2023, respectively.
    (2)  Nonaccrual loans are included as loans carrying a zero yield.
    (3)  Net interest margin FTE includes an FTE adjustment using a 21.0% federal income tax rate on tax-exempt securities and tax-exempt loans.

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
     
    (dollars in thousands, except per share data) September 30,
    2024    		   June 30,
    2024    		   September 30,
    2023
    Tangible common equity          
    Total stockholders’ equity $ 324,318     $ 306,990     $ 281,951  
    Adjustments:          
    Intangible assets   (1,546)       (1,546)       (1,546)  
    Total tangible common equity (non-GAAP) $ 322,772     $ 305,444     $ 280,405  
    Realized common equity          
    Total stockholders’ equity $ 324,318     $ 306,990     $ 281,951  
    Adjustments:          
    Accumulated other comprehensive (income) loss   49,624       61,732       77,486  
    Total realized common equity (non-GAAP) $ 373,942     $ 368,722     $ 359,437  
    Common shares outstanding   6,826,120       6,886,928       7,150,685  
    Book value per share $ 47.51     $ 44.58     $ 39.43  
    Tangible book value per share (non-GAAP) $ 47.28     $ 44.35     $ 39.21  
    Realized book value per share (non-GAAP) $ 54.78     $ 53.54     $ 50.27  
               
    Tangible assets          
    Total assets $ 3,101,750     $ 3,048,528     $ 3,066,153  
    Adjustments:          
    Intangible assets   (1,546)       (1,546)       (1,546)  
    Total tangible assets (non-GAAP) $ 3,100,204     $ 3,046,982     $ 3,064,607  
    Total stockholders’ equity to assets   10.46%       10.07%       9.20%  
    Tangible common equity to tangible assets (non-GAAP)   10.41%       10.02%       9.15%  

    The MIL Network –

  • MIL-OSI Global: What the presidential candidates have done − and where they stand − on education

    Source: The Conversation – USA – By Robert Shand, Assistant Professor of Education, American University

    Donald Trump and Kamala Harris present dueling platforms for U.S. education. Getty Images

    When it comes to education policy, former President Donald Trump and Vice President Kamala Harris not only have mostly distinct visions but also distinct track records.

    Harris is calling for a wider role for the federal government and larger investment to improve educational opportunities. Trump is focused on reducing the federal role in education and relying upon states, localities and parents to make educational decisions and investments.

    At the same time, there are some commonalities, including the growing importance of career and technical education. What follows is a review of what the two candidates have done in the world of education while in office.

    On higher education

    The candidates share a concern about the high cost of higher education. But they have different visions for how to address those costs. As California’s attorney general, Harris secured a US$1.1 billion judgment against Corinthian Colleges for false advertising. The judgment provides refunds for students who were misled by claims about job placement rates, program offerings and military affiliations.

    Whereas Harris has pursued for-profit colleges for fraud, Trump has focused on promoting innovation by reducing regulation and expanding alternatives to traditional higher education. This includes making it easier for online, faith-based and for-profit institutions to be accredited.

    As part of the Biden administration, Harris has pursued student loan debt forgiveness. She has also strongly signaled her support for expanding access to the Public Service Loan Forgiveness program. This follows her having co-sponsored legislation for debt-free college as a United States senator.

    The administration has faced challenges to the constitutionality of the loan forgiveness initiative on the grounds that the president does not have the authority under present law to unilaterally cancel debt. Opponents have also said any debt forgiveness would have to be authorized by Congress. Critics say further that loan forgiveness does not address the root causes of rising costs of higher education. Loan forgiveness could cause further price increases if institutions thought that students would care less about the cost of college in anticipation of having their debt forgiven.

    Trump created two entities to advise the federal government on workforce development and training needs: a council of federal officials and an advisory board of business leaders.

    In 2019, Trump signed a bipartisan bill to make permanent $250 million in annual federal funding for Historically Black Colleges and Universities, or HBCUs, that was previously subject to annual renewal.

    Harris has called for reducing degree requirements for federal jobs. She also promoted job training programs as an alternative to incarceration in her Back on Track initiative as attorney general of California from 2011 to 2017.

    As attorney general and then a U.S. senator from California, she called for greater oversight of advertising by for-profit colleges and debt forgiveness for former students of for-profit colleges. She also supported expanding federal aid to public and nonprofit colleges, including free community colleges and large grants to HBCUs.

    On K-12 education

    The 2024 Trump campaign platform calls for sweeping changes to K-12 education policy. This includes universal school choice and more parental control over schools, which would entail allowing parents across the country to use educational funds to pay for private school through vouchers or tax credits if they chose. It also features a drastically reduced federal role in education. In fact, Trump wants to eliminate the U.S. Department of Education. Many of these plans, such as direct election of school principals by parents, are unlikely to come to fruition due to the fact that schools in the United States are mainly under state and local control.

    Under the Tax Cuts and Jobs Act of 2017, Trump expanded college savings 529 plans to allow parents to save up to $10,000 per year tax-free for K-12 private school tuition.

    While president, Trump made several other proposals that could foreshadow his future plans. These proposals include creating a $5 billion federal tax credit for private school tuition, cutting the budget for the U.S. Department of Education in annual budget requests and turning the Title I allocation for supplemental services for students in poverty, such as smaller classes or tutoring, into a block grant to states.

    The Biden administration has sought to expand federal funding for full-service community schools.
    Full-service community schools are public schools that receive additional funding and staffing to help address the academic needs of students as well as factors outside of school, such as access to health care and healthy food, that affect learning.

    The Biden administration also expanded Title IX gender discrimination protections to include sexual orientation and gender identity.

    As a candidate for the presidential nomination in 2019, Vice President Harris also called for federal funding to provide teachers with an average of a $13,500 raise, though she has not made a similar call in this campaign.

    As California attorney general, Harris made reducing chronic absenteeism a signature issue when she led the In School and On Track anti-truancy initiative. This initiative included additional funding to districts and schools to use data to better understand and monitor absenteeism and to communicate with parents about the importance of school attendance.

    The data and communication-focused approach was an evolution from her initial approach as San Francisco district attorney, which placed more emphasis on prosecuting parents for truancy.

    On early childhood learning

    Neither Trump nor Harris has a significant record of tangible actions when it comes to early childhood education. Project 2025, which Trump has disavowed but was written by close allies of the former president, calls for eliminating Head Start, a federally funded, locally run, early childhood learning program to support low-income families.

    Although Trump made several similar proposals to cut funding for the Child Care and Development Block Grant by about 5%, they were not passed into law by Congress.

    Harris has made calls for free, universal prekindergarten for all 4-year-olds, but the Biden administration was not able to get its early childhood proposals through Congress.

    More recent studies of some universal pre-K programs have raised questions about how long the academic gains from early childhood programs persist. On net, however, the evidence from the highest-quality studies for high-quality early childhood programs in general, and the Head Start program in particular, suggests that they improve cognitive skills among children.

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

    – ref. What the presidential candidates have done − and where they stand − on education – https://theconversation.com/what-the-presidential-candidates-have-done-and-where-they-stand-on-education-239555

    MIL OSI – Global Reports –

  • MIL-OSI United Kingdom: Chancellor chooses a Budget to rebuild Britain

    Source: United Kingdom – Executive Government & Departments 3

    Today, Chancellor of the Exchequer Rachel Reeves delivered a Budget to fix the foundations of our economy.

    • Chancellor protects public services as departments’ day-to-day spending set to grow by an average of 3.3% in real terms between 2023-24 and 2025-26, including increase of more than £22 billion for health to help bring down waiting lists.
    • Budget will restore economic stability and begin a decade of national renewal, providing a boost to public investment by over £100 billion over the next five years across roads, rail, schools and hospitals whilst keeping debt on a downward path.
    • No change to working people’s payslips as income tax, employee national insurance and VAT stay the same, but businesses and the wealthiest asked to pay more.

    The Chancellor has delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation. She has set out plans to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.

    The government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, unrealistic plans for departmental spending, and stagnating living standards.

    As a mission-led government, the Chancellor has today made clear the difficult choices this government will make to rebuild the country. This Budget takes the difficult decisions on tax, spending and welfare to restore economic and fiscal stability, so that the government can invest in the country’s future and achieve its mission for growth. This means hospital waiting lists will be cut with room to invest in Britain to rebuild our schools, hospitals and broken roads.

    The government is protecting working people’s living standards by raising the National Living Wage, cutting duty on draught pints, keeping bus fares down, and not increasing the main rates of income tax, employee national insurance, and VAT.

    The Budget will help rebuild Britain by boosting public investment by over £100 billion over the next five years while exceeding the manifesto commitment to fix an extra 1 million potholes per year with an additional £500 million for local road maintenance in 2025-26.

    Fixing the NHS and reforming public services

    By repairing the public finances and restoring economic stability, the Budget delivers on a new settlement for public services, increasing day to day spending for public services by 3.3% on average in real terms over this year and next to fix the NHS, boost the education system and repair the criminal justice system.

    This government has been clear from the start it will not tolerate wasteful spending – and that means treating taxpayers’ money with respect. For the next financial year, all government departments have a 2% productivity, efficiency, and savings target, that is expected to save billions of pounds.

    • The Chancellor has confirmed an additional £22.6 billion for day-to-day spending over two years for the Department of Health and Social care, supporting the NHS to deliver an extra 40,000 elective appointments per week, delivering on one of the Government’s first aims in office to reduce waiting times in the NHS.
    • The government is investing around £1.5 billion capital funding for new surgical hubs, diagnostic scanners and new beds across the NHS estate to create more treatment space in emergency departments, reduce waiting times and help shift more care into the community.
    • £100 million will be earmarked to carry out 200 GP estate upgrades across England, supporting improved use of existing buildings and space, boosting productivity and enabling delivery of more appointments.
    • The Chancellor has focused on improving education as part of her first Budget, with an additional £4 billion for the sector, including £2.3 billion into the core schools’ budget which increases per pupil spending in real terms.
    • This will allow 100 project plans to begin delivery across England next year and begin to tackle the crumbling school and college buildings across the country. This paves the way for a long-term strategy to improve schools nationwide so that students can learn in safe, state-of-the-art facilities, tailored to the needs of 21st-century education.
    • The Chancellor will provide £1.4 billion for the school rebuilding programme, including an increase of £550 million this year.

    In addition to these commitments, this government is securing our borders and taking back our streets.

    • The new Border Security Command will smash the organised criminal gangs by deploying 100 new NCA officers and increasing cooperation with European intelligence agencies and police forces.
    • Smashing gangs and boosting the processing of asylum claims forms a crucial part of the government’s plan to cut asylum support costs by more than £4bn over the next 2 years compared to the previous government’s spending trajectory.
    • The Home Office settlement will put us on track to start delivering the manifesto pledge to boost visible neighbourhood policing with 13,000 more neighbourhood officers and PCSOs.

    Protecting working people and living standards

    While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the government to deliver on its pledge to not increase National Insurance, VAT, or Income Tax on working people, meaning they will not see higher taxes in their payslip. In addition:

    • The Chancellor has made the decision to protect working people from being dragged into higher tax brackets by confirming that Income Tax and National Insurance Contributions thresholds will be unfrozen from 2028-29 onwards.
    • The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025, which means a pay boost for 3 million workers. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.  The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour.
    • The Chancellor is also protecting motorists by freezing fuel duty for one year and extending the temporary 5p cut to 22 March 2026 – a tax cut worth £3 billion. This will save the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
    • To support the take-up of zero emission cars, Vehicle Excise Duty (VED) First Year Rates (FYRs) are changing from 2025-26. Rates for zero emission cars will be frozen at £10 until 2029-30 while rates for hybrid and petrol/diesel cars will rise from 1 April 2025.
    • The weekly earnings limit for Carer’s Allowance will be increased to 16 hours at the National Living Wage, worth an additional £45 a week from April next year, making over 60,000 carers eligible for support, and helping carers to balance work and caring responsibilities. This is the largest ever increase to the earnings limit and provides certainty for carers with a commitment that the earnings limit will increase with the National Living Wage in the future.
    • To help ensure pensioners are protected in their retirement, the Budget will also confirm a 4.1% increase to the basic and new State Pension as well as the standard minimum guarantee for Pension Credit, from April next year.
    • Over 12 million pensioners will benefit from this as the full new State Pension will rise from £221.20 to £230.25 a week, providing an additional £470 a year, while the full basic State Pension will increase from £169.50 to £176.45 per week, worth an extra £360 annually.
    • The Pension Credit Standard Minimum Guarantee will also increase by 4.1% from April 2025, meaning an annual increase of £465 in 2025-26 in the single pensioner guarantee and £710 in the couple guarantee.
    • The administration of Pension Credit and Housing Benefit will be brought together for new claimants from 2026. This is two years earlier than previously planned, and will support more people to receive the benefits that they are entitled to.
    • In addition, working-age benefits and the Additional State Pension will rise by 1.7% in April 2025, in line with inflation. This increase will see around 5.7 million families on Universal Credit gain an average of £150 annually.

    Rebuilding Britain

    This government will not make a return to austerity and will instead boost investment to rebuild Britain by investing in the fabric of the country, as well as supporting the industries of the future. This will go towards rebuilding our schools, hospitals and roads, turbocharging the delivery of 1.5 million homes, and unlocking long-term economic growth.

    This comes on top of action already taken under the government’s growth mission including establishing the National Wealth Fund, publishing the Industrial Strategy green paper, and hosting the International Investment Summit.

    • The government is exceeding its manifesto commitment to fix an extra 1 million potholes per year, with an additional £500 million for local road maintenance in 2025-26 – an almost 50% increase on the commitment made by the previous government for the current financial year.
    • This brings the total amount dedicated to fixing the roads in England over the next year to nearly £1.6 billion.
    • This government is growing day-to-day spending at an average of 2.0% per year in real terms between 2023-24 and 2029-30 to support public services.
    • This government is boosting public investment by over £100 billion over the next five years whilst keeping debt on a downward path, with a greater focus on value for money and delivery to help unlock long-term growth.
    • Capital investment will increase by £13 billion next year, taking total departmental capital spending to £131 billion in 2025-26. This includes increased investment in local roads maintenance and local transport, supporting everyday journeys, and driving growth in our regional towns and cities.
    • The government is also making the reforms needed to deliver sustained growth in the long-term. These include ambitious planning reforms to remove barriers to growth, the development of a 10-year infrastructure strategy to be published alongside Phase 2 of the Spending Review, the publication shortly of the Get Britain Working White Paper, and the establishment of Skills England to ensure we have the highly-trained workforce needed to deliver economic growth.
    • An extra £200 million will be given to Metro Mayors for local transport in 2025/26, bringing City Region Sustainable Transport Settlements to over £1.3 billion.
    • The government is also announcing over £650 million for improving transport in towns, villages, and rural areas alongside our city regions.
    • Single bus fares will be kept down at £3 until the end of 2025, as part of an over £1bn package to support bus services across the country.
    • To fully harness its potential and foster a dynamic investment economy, the government is protecting record levels of government R&D investment with £20.4 billion allocated in 2025-26.
    • To boost digital infrastructure in under-served areas across the UK and support growth in the digital and technology sectors, the government will invest over £500 million in Project Gigabit and the Shared Rural Network next year.
    • A new housing package will include £500 million in new funding for the Affordable Homes Programme, increasing it to £3.1 billion, the biggest annual budget for affordable housing in over a decade. This brings total investment in housing supply to over £5 billion and supports the delivery of tens of thousands of new homes.
    • £3 billion of additional support will be provided to SMEs and the Build to Rent sector by expanding existing housing guarantee schemes to support a strong and diverse private housing market.
    • The Budget also began the government’s reform of business rates to help level the playing field for high streets across the country as from 2026-27 permanently lower tax rates for retail, hospitality and leisure properties will be introduced. This will be funded sustainably by introducing a higher multiplier for the most valuable properties, including distribution warehouses used by online giants.
    • To support the transition, the Chancellor also announced a 40% relief for retail, hospitality and leisure, up to a cap of £110,000 per business. The small business multiplier will also be frozen next year to protect against inflationary increases. This support is worth almost £2.4 billion over the next five years. One third of business properties will continue to pay no business rates because of Small Business Rates Relief.

    Repairing public finances

    The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required on tax. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations and funding public services such as the NHS and education.

    • The rate of employer National Insurance will increase by 1.2 percentage points, to 15% from 6 April 2025. The Secondary Threshold – the level at which employers become liable to pay national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
    • The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000 and be extended to all eligible employers by removing the £100,000 cap, allowing firms to employ up to four National Living Wage workers full time without paying employer National Insurance on their wages.
    • Capital Gains Tax (CGT) will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate. These new rates will match the residential property rates, which will unchanged at 18 for the lower rate and 24% for the higher rate.
    • To encourage entrepreneurs to invest in their businesses, Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
    • The OBR say changes to CGT will raise £2.5 billion by the end of the forecast and the UK will continue to have the lowest CGT rate of any European G7 country.
    • Inheritance tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will not pay inheritance tax. From April 2027 inherited pension pots will be subject to inheritance tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.

    • From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets on top of the existing nil-rate bands, fully protecting the majority of businesses and farms. The rate of relief will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance tax reforms are predicted by the OBR to raise £2 billion in total to support public services.

    • The government will also uprate alcohol duty in line with RPI, except for most drinks in pubs. To support British pubs, and brewers, the government is reducing duty on qualifying draught products, which represent approximately 3 in 5 alcoholic drinks sold in pubs.

    • This measure reduces duty bills by over £85 million a year, cutting duty on an average strength pint in a pub by a penny. The value of the relief available to small producers will also be increased to help smaller brewers and cidermakers.   

    • From 2026-27 Air Passenger Duty (APD) rates for short and long-haul flights will be adjusted to partially account for previous high inflation. For economy passengers, this is only a £1 increase for domestic flights, £2 extra for short haul, and £12 more for long-haul flights, with children under the age of 16 remaining exempt from APD. APD for larger private jets will be increased by a further 50%. These changes will help align with the government’s environmental objectives.

    To further support the government’s mission to fix the NHS, the Budget announces a package of measures that disincentivise activities that cause ill health, by:

    • Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%).  
    • Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking. 
    • To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase over the next five years to account for inflation since it was last updated in 2018, and the duty will also rise in line with inflation every year going forward.

    The government set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, Budget delivers the government’s manifesto commitments to raise revenue to pay for first steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:  

    • A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
    • Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangements in place for people who have made plans based on current rules.
    • The planned 50% reduction for foreign income in the first year of the new regime will be removed.

    • Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.

    • The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.
    • The Higher Rate for Additional Dwellings surcharge of Stamp Duty Land Tax will rise from 3 to 5%, providing those looking to move home, or purchase their first property, with a comparative advantage over second home buyers, landlords, and businesses purchasing residential property.
    • To secure additional funding to help deliver commitments relating to education and young people, the government will introduce 20% VAT on education and boarding services provided for a charge by private schools from 1 January 2025. The government will also remove business rates charitable rate relief from private schools in England from April 2025. 
    • Over the next five years HMRC, will look to close the UK’s tax gap – the amount of uncollected tax owed to the UK – by bringing in an additional £6.5 billion per year. The revenue will go directly to funding UK public services and fixing the foundations of the economy.
    • The package to close the tax gap will include overhauling HMRC’s IT system to improve their debt management system to ensure tax debt enquiries can be dealt with faster, improving the productivity of the organisation. 5000 additional compliance staff will be recruited and 1,800 debt management staff will also be maintained and recruited. HMRC’s services will be also digitised to make it easier and simpler for taxpayers to self-serve and manage their tax affairs.

    The government has also published its Corporate Tax Roadmap alongside the Budget. This will offer the certainty that encourages investment and gives business the confidence to grow. The Roadmap includes commitments:

    • to cap the headline rate of Corporation Tax at 25%, which is the lowest in the G7;
    • to maintain our world leading capital allowances system (including permanent full expensing and the £1 million Annual Investment Allowance);
    • to preserve the generosity of our R&D reliefs; and
    • to develop a new process for increasing the tax certainty available in advance for major investments.

    Strengthening the fiscal framework

    The Chancellor has paved the way for growth while doubling down on fiscal responsibility by making reforms to the fiscal framework. This is based on two new fiscal rules: the stability rule and the investment rule.

    • The stability rule will balance the current budget, so day-to-day costs are met by revenues.
    • The investment rule will ensure that net financial debt is falling as a proportion of GDP. This rule keeps debt on a sustainable path whilst allowing the step change needed for investment.
    • Both of these rules will be met two years early in 2027-28.
    • This investment will be underpinned by clear guardrails to ensure it is high quality and well delivered.
    • Our ten-year infrastructure strategy will provide industry a vision of the government’s priorities and a credible delivery plan to encourage investment and supply chains.
    • NISTA will be the central body that brings strategy and delivery together under one roof to implement this strategy working across Whitehall and industry.
    • Further reforms will help deliver stability by holding Spending Reviews every two years, setting plans for at least three years to ensure public services are always planned and improve value for money. One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes.
    • The Fiscal Lock will ensure no future government can sideline the OBR again, and we are committing to improving the transparency and consistency of the spending information shared with the OBR.
    • The government will also introduce new controls: that financial investments should by default target a return for the Exchequer that at least covers the government’s cost of borrowing, that all large-scale financial transactions will be managed by expert bodies like the National Wealth Fund, and that the government will publish an annual report on the performance and value of its financial assets based on accounts audited by the National Audit Office.

    Updates to this page

    Published 30 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Applications open for the Portsmouth Older Persons Energy Payment

    Source: City of Portsmouth

    Portsmouth pensioners can now apply for a payment from Portsmouth City Council which is open to some households who will miss out on the national Winter Fuel Payment.

    The Portsmouth Older Persons Energy Payment offers a one-off £200 or £300 payment for this winter only, to pension-aged Portsmouth residents, who will be eligible if:

    • They receive Housing Benefit or Council Tax Support
    • They are not receiving any of the qualifying benefits for the Winter Fuel Payment – Pension Credit, Universal Credit, income-related Employment Support Allowance, income-based Jobseeker’s Allowance, Income Support, Child Tax Credit, Working Tax Credit.

    A £200 payment will be given to eligible pensioners under the age of 80, and £300 to those 80 or over.

    The scheme is live and applications can be made through the council’s website. Those who need help applying can call the council’s cost of living helpline 023 9284 1047 (open 9-5pm Monday-Friday, closes 4.30pm Friday).

    Portsmouth City Council Leader Cllr Steve Pitt said: “Older residents can now apply for our energy payment scheme. We have launched it to support around 2,000 households who we believe will be impacted most by their Winter Fuel Payment being stopped.

    “It will be a one-off support to help these people transition to no longer receiving the payment from government this year. We know a lot of people rely on that money each winter and they won’t have had time to budget for losing it.

    “We unfortunately don’t have the financial resources to make this scheme permanent or to help all 18,000 Portsmouth households who won’t get the payment after the government’s change this year. But a range of support is available for all ages this winter.”

     2,500 households missing out on Pension Credit

    It’s estimated that nearly 2,500 Portsmouth households aren’t claiming the Pension Credit they’re entitled to, and are missing out on an average of £3,900 per person a year, or £300 a month. People receiving Pension Credit will automatically receive the government’s Winter Fuel Payment.

    The council is urging everyone of pension age, their families and friends to check if they are eligible. You can find out if you are eligible and claim Pension Credit online on the government website or by phone on 0800 99 1234, where you can also request a form through the post. Check if you’re eligible using the online Pension Credit Calculator.

    Support for all ages

    Cost-of-living helpline and online information hub: For help around essential costs, health and wellbeing, jobs, money and housing, and hardship funding people can apply for. The helpline is open weekdays from 9am-5pm (closes 4.30pm Fridays) on 023 9284 1047, or visit: www.portsmouth.gov.uk/costofliving

    Switched On Portsmouth: For help reducing energy bills, including referring to energy saving schemes and offering free advice. Call on 0800 260 5907 or visit www.switchedonportsmouth.co.uk

    Household Support Fund: The council will continue to use government grants to support residents of all ages. Following the recent six-month extension of the grant, the team are setting up new schemes to assist people in need. Information on the help available will continue to be updated on the Household Support Fund webpages.

    Warm Spaces: Our libraries are again now offering hot drinks in all nine libraries over the winter, along with other community settings. Find the fantastic, free activities happening in our libraries on the website, on Facebook or by popping into your local library.

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: A Budget to fix the foundations and deliver change for Northern Ireland

    Source: United Kingdom – Executive Government & Departments

    The UK Chancellor delivered the Autumn Budget today (Wednesday 30 October 2024)

    Autumn Budget 2024

    • Chancellor takes long-term decisions to restore stability, rebuild the United Kingdom and protect working people across Northern Ireland.
    • No change to working people’s payslips as employee national insurance, income tax and VAT stay the same, but businesses and the wealthiest asked to pay their fair share.
    • Record £18.2 billion for the Northern Ireland Executive in 2025/26 including an additional £1.5 billion through the Barnett formula.
    • City and Growth Deals confirmed to continue to unlock growth and investment, while over £45 million is provided for counter-terrorism and security funding.

    The Chancellor has delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation. She set out plans to rebuild the United Kingdom, while ensuring working people across Northern Ireland don’t face higher taxes in their payslips.

    The UK Government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards.

    This Budget takes difficult decisions to restore economic and fiscal stability, so that the UK Government can invest in the economic future of Northern Ireland and lay the foundations for growth across the UK as its number one mission.

    The Chancellor announced that the Northern Ireland Executive will be provided with a £18.2 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes a £1.5 billion top-up through the Barnett formula, with £1.2 billion for day-to-day spending and £270 million for capital investment.

    Secretary of State for Northern Ireland Hilary Benn said:

    This is the biggest real terms settlement for Northern Ireland since devolution. 

    The Northern Ireland Executive will get an additional £640 million in Barnett consequentials this year, and an additional £1.5 billion next year. 

    This will provide  a strong foundation for stability and growth, and sees the UK Government delivering real change for the people of Northern Ireland.

    We have also confirmed the UK Government’s investment in Northern Ireland’s City and Growth deals, which is a huge boost to communities in both rural and urban areas. The Mid South West and Causeway Coast and Glens Deals alone will receive a combined investment from the UK Government of £162 million, and I look forward to seeing them progress and make a real impact now and in years to come. 

    Meanwhile, measures such as the Northern Ireland Enhanced Investment Zone, continuing support for Northern Ireland integrated schooling and the UK-wide investment of over £500m in digital infrastructure through Project Gigabit and the Shared Rural Network benefit people across Northern Ireland’s communities.

    The increase to £37.8 million in funding for the Police Service of Northern Ireland through the Additional Security Fund, combined with £8 million for the Executive Programme on Paramilitarism and Organised Crime, underscores the UK Government’s continuing and steadfast commitment to security.

    This budget is positive news for people across Northern Ireland, encouraging economic growth and enabling the conditions for a brighter future.

    Protecting working people and living standards

    While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the UK Government to deliver on its pledge to not increase National Insurance, Income Tax or VAT on working people in Northern Ireland, meaning they will not see higher taxes in their payslip.

    • The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.
    • The National Minimum Wage for 18 to 20-year-olds will also see a record rise from £8.60 to £10 an hour.
    • Working people will benefit from these increases, with there estimated to be around 100,000 minimum wage workers in Northern Ireland in 2023.
    • The Chancellor has made the decision to protect working people in Northern Ireland from being dragged into higher tax brackets by confirming that Income Tax and National Insurance Contributions thresholds will be unfrozen from 2028-29 onwards. 
    • The Chancellor is also protecting motorists by freezing fuel duty for one year – a tax cut worth £3 billion, with the temporary 5p cut extended to 22 March 2026. This will benefit an estimated 1.3 million people in Northern Ireland, saving the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
    • To support pubs and smaller brewers in Northern Ireland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers.  

    Rebuilding the United Kingdom

    This UK Government will not make a return to austerity and will instead boost investment to rebuild Britain and lay the foundations for growth in Northern Ireland. This includes £760 million of targeted funding for the Northern Ireland Executive, of which £662 million is as committed in the 2024 restoration financial package and £90 million is for capital investment.

    • The UK Government today confirmed that investment in the Mid South West and Causeway Coast and Glens City Deals will continue, supported by a value for money assessment as part of the review of the business cases for projects to ensure best value is being delivered. The Mid South West and Causeway Coast and Glens Deals deliver a combined investment from UK Government of £162 million over 15 years to rural areas in Northern Ireland.
    • The Chancellor committed the UK Government to working closely with the Northern Ireland Executive on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide and as part of the relationship reset between governments. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
    • The UK Government has today reaffirmed its commitment to develop an Enhanced Investment Zone in Northern Ireland and will continue to work closely with the Northern Ireland Executive to develop proposals.
    • The UK Government has increased funding to £37.8 million for the Police Service of Northern Ireland’s Additional Security Fund and confirmed £8 million for the Executive Programme on Paramilitarism and Organised Crime to ensure that people and communities are kept safe from violence and harm.
    • To support community cohesion the UK Government is providing £730,000 of additional funding in 2025-26 to support schools in Northern Ireland through the transformation process as they work towards integrated status.
    • Under-served parts of Northern Ireland will benefit from the rollout of digital infrastructure enabled by over £500 million of UK-wide investment in Project Gigabit and the Shared Rural Network.
    • A corporate tax roadmap will provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation.
    • The UK Government will also proceed with implementing the 45%/40% rates of the theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Northern Ireland’s thriving cultural sector.

    Repairing public finances

    The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations of the UK economy.

    • The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
    • The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing firms in Northern Ireland to employ four National Living Wage workers full time without paying national insurance on their wages.
    • Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
    • To encourage entrepreneurs to invest in their businesses Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
    • The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.
    • The OBR say changes to CGT will raise over £2.5 billion a year and the UK will continue to have the lowest CGT rate of any European G7 country.
    • Inheritance Tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will be outside of its scope. From April 2027 inherited pensions will be subject to Inheritance Tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.
    • From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms. It will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance Tax reforms in total are predicted by the OBR to raise £2 billion to support stability.

    The Budget also announced a package of measures that disincentivise activities that cause ill health, by:

    • Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%).  
    • Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking. 
    • To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase to account for inflation since it was last updated in 2018, and the duty will rise in line with inflation every year going forward.
    • The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs

    The UK Government has set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, this Budget delivers the UK Government’s manifesto commitments to raise revenue to pay for First Steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:  

    • A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
    • Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangement in place for people who have made plans based on current rules.
    • The planned 50% reduction for foreign income in the first year of the new regime will be removed.
    • Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.

    • The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.

    • The Higher Rate for Additional Dwellings surcharge of Stamp Duty Land Tax will rise from 3 to 5%, providing those looking to move home, or purchase their first property, with a comparative advantage over second home buyers, landlords, and businesses purchasing residential property.

    • The UK Government will also introduce 20% VAT on education and boarding services provided for a charge by private schools from 1 January 2025.

    The Chancellor also doubled down on fiscal responsibility through two new fiscal rules that put the public finances on a sustainable path and prioritise investment to support long-term growth, and new principles of stability. Spending Reviews will be held every two years, setting plans for at least three years to ensure public services are always planned and improve value for money. 

    One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes, while giving the Northern Ireland Executive greater clarity for in its own budget-setting.  A Fiscal Lock will also ensure no future government can sideline the OBR again.

    Updates to this page

    Published 30 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI Security: Atlantic County Doctor Sentenced to 15 Months in Prison for Health Care Fraud Conspiracy

    Source: Office of United States Attorneys

    CAMDEN, N.J. – An Atlantic County, New Jersey, doctor was sentenced to 15 months in prison for his role in defrauding New Jersey state and local health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced.

    Brian Sokalsky, 46, of Margate, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to a superseding information charging him with one count of conspiring to commit health care fraud. U.S. District Judge Edward S. Kiel imposed the sentence on Oct. 29, 2024, in Camden federal court. 

     Sokalsky, pharmaceutical sales representative Vincent Tornari, 50, of Linwood, New Jersey, and former advanced nurse practitioner Ashley Lyons-Valenti, 67, of Swedesboro, New Jersey, were charged in a 33-count indictment in June 2020. Tornari pleaded guilty on March 14, 2023, and Lyons-Valenti pleaded guilty on Feb. 28, 2023, to their respective roles in the conspiracy. Tornari and Lyons-Valenti are both awaiting sentencing.

    According to court documents filed in this case and statements made in court:

    Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

    The conspirators learned that certain medications made by compounding pharmacies reimbursed for up to thousands of dollars for an individual’s one-month supply. They learned that certain insurance plans – including insurance plans for state and local government employees and certain other insurance plans – covered these medications.

    Sokalsky agreed to authorize prescriptions for former pharmaceutical sales representative Matthew Tedesco, 49, of Linwood, New Jersey, who pleaded guilty to health care fraud conspiracy in June 2017, and others working with Tedesco. In exchange for authorizing those prescriptions, Tedesco referred approximately 30 patients to Sokalsky’s new medical practice.  Sokalsky, in turn, billed insurance for patient visits for those people steered to his practice by Tedesco. Sokalsky also authorized prescriptions for the medications for existing patients of his practice, which he did to financially benefit Tedesco and encourage him to refer more patients to his new practice. Sokalsky authorized medically unnecessary medications, including libido creams for young females and excessive quantities of the medications with the maximum number of refills selected. When insurance stopped covering certain formulations of the medications, Tedesco informed Sokalsky that he needed to authorize new prescriptions.  Sokalsky did so, often without seeing the individual for a follow-up visit or informing the person of the change in medication. In total, insurance paid more than $5 million for fraudulent prescriptions authorized by Sokalsky.

    In addition to the prison term, Judge Kiel sentenced Sokalsky to three years of supervised release and ordered restitution of $5.13 million.

    Attorney for the United States Khanna credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark; and the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the sentencing.

    The government is represented by R. David Walk Jr., Deputy Chief of the Criminal Division; and Assistant U.S. Attorney Daniel A. Friedman of the Camden office.

    MIL Security OSI –

  • MIL-OSI: Felix partners with Zero Hash to expand its simplified, borderless remittance solution

    Source: GlobeNewswire (MIL-OSI)

    CHICAGO, Oct. 30, 2024 (GLOBE NEWSWIRE) — Felix, the chat-based platform that combines Stablecoins and AI to make remittances as easy as sending a WhatsApp, has partnered with Zero Hash, the leading crypto and stablecoin infrastructure platform. Leveraging Zero Hash’s infrastructure that seamlessly connects fiat, crypto and stablecoins, with broad regulatory coverage (across 52 US jurisdictions), Felix now offers their simplified cross-border payments solution to more than 60 million US-based Latinos, who collectively send $150bn to their families every year.

    In just two years, Felix has grown over 500x in payment volume helping hundreds of thousands of Latinos in the US sending money back home to family and friends. In May 2024, Félix Pago raised $15.5 million in Series A funding, and in 2023 they won a prestigious award from CrossTech: ‘Fintech Making a Difference’.

    Felix has identified a crucial need in the Latino immigrant community, where sending money back home using traditional methods is often a complex, slow and expensive process. By integrating their service with Whatsapp, an app used by 85% of Latinos, and using stablecoins to move money across borders 24/7/365 and in near real-time, Felix has created a user-friendly, more cost-efficient solution for sending remittances.

    Through embedding Zero Hash’s infrastructure natively into the Felix service, Felix is able to control the front end customer experience, while Zero Hash handles the end-to-end technical and regulatory compliant money movement on the back end; receiving and converting USD to USDC, and then sending to global partners instantly, who convert the USDC to the local currency, and send the funds to the receiver. Leveraging stablecoins offer a faster and more affordable way to remit money from the US to Mexico.

    “One of the biggest indicators of our success is our NPS score of 90, which is more than double the typical score in the remittance industry. We’re extremely proud of that number. It’s a testament of our success in delivering user-friendly, efficient remittance solutions for the Latino community. By combining a familiar messaging application with stablecoin technology, we’re not just transferring money – we’re ensuring that more of the money that is sent goes to the recipient.” said Manuel J Godoy, Co-Founder & CEO at Felix. ” Zero Hash’s seamless, connected and safe stablecoin infrastructure, abstracts the complexity for us, and means Felix can focus on building the best remittance experience, for the millions of Latinos sending money back home.”

    “This remittance flow, powered by stablecoin technology as the ‘network of networks’, enables sender and receiver to operate in fiat, without having to interact with stablecoins,” said Edward Woodford, Founder and CEO of Zero Hash. “We have always believed that the adoption of crypto and stablecoins will happen when the technology moves from the foreground to the background, and are delighted that the partnership between Zero Hash and Felix achieves that; resulting in simple, instant, and cheap money transfers.”

    About Felix

    Félix is ​​a chat-based platform that enables Latinos in the US to send money abroad. We combine Blockchain and Artificial Intelligence to disrupt how remittances are done today and build the future of cross-border payments.

    Felix launched its services in the summer of 2022 and since then has supported hundreds of thousands of Latinos to send money back home in seconds and at a fraction of the cost of traditional methods. Felix has raised $20m+ in capital from investors including Castle Island Ventures, Switch Ventures, HTwenty, Contour and MELI Capital (the corporate VC of Mercado Libre)

    About Zero Hash

    Zero Hash is a B2B2C crypto-as-a-service infrastructure platform that allows any platform to embed digital assets natively into their own customer experience quickly and easily through a matter of API endpoints. Zero Hash’s turnkey solution handles the entire backend complexity and regulatory licensing required to offer crypto products.

    Zero Hash Holdings, through its subsidiaries, powers neo-banks, broker-dealers, payment groups as well as non-financial brands to offer crypto and stablecoin powered products.

    Zero Hash Holdings is backed by investors, including Point72 Ventures, Bain Capital Ventures, and NYCA.

    Zero Hash LLC is a FinCen-registered Money Service Business and a regulated Money Transmitter that can operate in 51 US jurisdictions. Zero Hash LLC and Zero Hash Liquidity Services LLC are licensed to engage in virtual currency business activity by the New York State Department of Financial Services. In Canada, Zero Hash LLC is registered as a Money Service Business with FINTRAC.

    Zero Hash Australia Pty Ltd. is registered with AUSTRAC as a Digital Currency Exchange Provider, with DCE registered provider number DCE100804170-001. This registration enables Zero Hash to offer its crypto services in Australia. Zero Hash Australia Pty Ltd. is registered on the New Zealand register of financial service providers, with Financial Service Provider (FSP) number FSP1004503. A FSP in New Zealand is a registration and does not mean that Zero Hash Australia Pty Ltd. is licensed by a New Zealand regulator to provide crypto services. Zero Hash Australia Pty Ltd.’s registration on the New Zealand register of financial service providers does not mean that Zero Hash Australia is subject to active regulation or oversight by a New Zealand regulator. Zero Hash Europe B.V. is registered as a Virtual Asset Services Provider (VASP) registration by the Dutch Central Bank (Relation number: R193684). Zero Hash Europe Sp. Zoo is registered as a VASP by the Tax Administration Chamber of Poland in Katowice (Registration number RDWW – 1212).

    Connect with Zero Hash

    Website | Twitter | LinkedIn | Medium

    Zero Hash Contact

    Shaun O’keeffe

    (855) 744-7333

    media@zerohash.com

    Zero Hash Disclosures

    Zero Hash services and product offerings may not be available in all jurisdictions. Zero Hash accounts are not subject to FDIC or SIPC protections, or any such equivalent protections that may exist outside of the US. Zero Hash’s technical support and enablement of any asset is not an endorsement of such asset and is not a recommendation to buy, sell, or hold any crypto asset. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero. Zero Hash is not registered with the SEC or FINRA. Zero Hash does not provide any securities services and is not a custodian of securities, including security tokens, on behalf of customers.

    The MIL Network –

  • MIL-OSI United Kingdom: A Budget to fix the foundations and deliver change for Scotland

    Source: United Kingdom – Government Statements

    Chancellor takes long-term decisions to restore stability, rebuild Britain and protect working people across Scotland.

    • No change to working people’s payslips as employee national insurance and VAT stay the same, but businesses and the wealthiest asked to pay their fair share.
    • Record £47.7 billion for the Scottish Government in 2025/26 includes £3.4 billion through the Barnett formula.
    • Funding for Green Freeports, City and Growth Deals, GB Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland.

    The Chancellor has delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation. She set out plans to rebuild Britain, while ensuring working people across Scotland don’t face higher taxes in their payslips.

    The UK Government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards.

    This Budget takes difficult decisions to restore economic and fiscal stability, so that the UK Government can invest in Scotland’s future and lay the foundations for economic growth across the UK as its number one mission.

    The Chancellor announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes a £3.4 billion top-up through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.

    Secretary of State for Scotland Ian Murray said:

    This is a historic budget for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.

    It is the largest budget settlement for the Scottish Government in the history of devolution, including an additional £1.5 billion this financial year and an additional £3.4 billion next year through the Barnett formula. That money must reach frontline services, to bring down NHS waiting lists and lift attainment in our schools.

    It will also bring a new era of growth for Scotland and the whole UK, confirming nearly £890 million of direct investment into Freeports, Investment Zones, the Argyll and Bute Growth Deal, and other important local projects across Scotland’s communities, as well as £125 million next year for GB Energy and support for green hydrogen projects in Cromarty and Whitelee.

    The increase in the minimum wage will also mean a pay rise for hundreds of thousands of workers in Scotland, with the biggest increase for young workers ever. This is on top of our employment rights bill which will deliver the biggest upgrade in workers’ rights in a generation. The triple lock means an increase in the state pension by £470 next year, on top of £900 this year for a million Scottish pensioners.

    The budget protects working people in Scotland, delivers more money than ever before for Scottish public services and means an end to the era of austerity.

    Protecting working people and living standards

    While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the UK Government to deliver on its pledge to not increase National Insurance or VAT on working people in Scotland, meaning they will not see higher taxes in their payslip.

    • The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.
    • The National Minimum Wage for 18 to 20-year-olds will also see a record rise from £8.60 to £10 an hour.
    • Working people will benefit from these increases, with there estimated to be over 100,000 minimum wage workers in Scotland in 2023.
    • The Chancellor has made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on National Insurance Contributions thresholds will be lifted from 2028-29 onwards, rising in line with inflation so they can keep more of their hard-earned wages.
    • The Chancellor is also protecting motorists by freezing fuel duty for one year – a tax cut worth £3 billion, with the temporary 5p cut extended to 22 March 2026. This will benefit an estimated 3.2 million people in Scotland, saving the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
    • To support Scottish pubs and smaller brewers in Scotland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers.  
    • Over 1 million Scottish pensioners will benefit from a 4.1% increase to their new or basic State Pension in April 2025. This is an additional £470 a year for those on the new State Pension and an additional £360 a year for those on the basic State Pension.
    • Households eligible for Pension Credit will get £465 a year more for single pensioners and up to £710 a year more for couples due to a 4.1% increase in the Pension Credit Standard Minimum Guarantee, benefitting 125,000 pensioners in Scotland.
    • Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation – a £150 gain on average in 2025-26.
    • Reducing the maximum level of debt repayments that can be deducted from a household’s Universal Credit payment each month from 25% to 15% will benefit a Scottish family by over £420 a year on average.

    Rebuilding Britain

    This UK Government will not make a return to austerity and will instead boost investment to rebuild Britain and lay the foundations for growth in Scotland. This includes £130 million of targeted funding for the Scottish Government, of which £120 million is in capital investment.

    • The Budget delivers on the first step to establish Great British Energy by providing £125 million next year to set up the institution at its new home in Aberdeen – helping to develop new clean energy projects in Scotland and across the UK. 
    • The UK Government will deliver £122 million for City and Growth Deals, including the continuation of its contribution to the Argyll and Bute Growth Deal which delivers £25 million of investment in the region over 10 years. This Deal will be supported by a rigorous value for money assessment as part of the review of the business cases for projects within it, to ensure best value is being delivered.
    • The Budget gives certainty to local leaders and investors, confirming funding for the Investment Zones and Freeports programmes across the UK – including Scotland’s Green Freeports. 
    • The Chancellor committed the UK Government to working closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide and as part of the relationship reset between governments. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
    • To support economic growth and promote Scottish culture, products and services through diplomatic and trade networks, the UK Government is allocating £750,000 for the Scotland Office in 2025/26 to champion Brand Scotland as was committed in the manifesto.
    • We are supporting Scotland’s world-renowned Scotch Whisky industry by providing up to £5 million for HMRC to reduce the fees charged by the Spirit Drinks Verification Scheme and by ending mandatory duty stamps for spirits on 1 May 2025.
    • Two electrolytic hydrogen projects in Scotland have been selected for UK Government revenue support through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen. Both projects will bring in significant international investment and create good quality, local jobs.
    • An extension of the Innovation Accelerators programme will support the high-potential innovation cluster in the Glasgow City Region.
    • A corporate tax roadmap will provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation. 
    • The UK Government will also proceed with implementing the 45%/40% rates of the theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Scotland’s thriving cultural sector.

    Repairing public finances

    The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations of the UK economy.

    • The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
    • The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing Scottish firms to employ four National Living Wage workers full time without paying employer national insurance on their wages.
    • Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
    • To encourage entrepreneurs to invest in their businesses Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
    • The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.
    • The OBR say changes to CGT raise over £2.5 billion a year and the UK will continue to have the lowest CGT rate of any European G7 country.
    • Inheritance Tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will be outside of its scope. From April 2027 inherited pensions will be subject to Inheritance Tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.

    • From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms. It will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance Tax reforms in total are predicted by the OBR to raise £2 billion to support stability.

    • From 2026-27 Air Passenger Duty (APD) for short and long-haul flights will increase by 13% to the nearest pound, a partial adjustment to account for previous high inflation. For economy passengers, this means a maximum £2 extra per short haul flight and tickets for children under the age of 16 remain exempt from APD. APD for larger private jets will be increased by a further 50%. Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt from APD.
    • The rate of the Energy Profits Levy will increase to 38% from 1 November 2024 and the levy will now expire one year later than planned, on 31 March 2030.  The 29% investment allowance will be removed.
    • To provide long-term certainty and to support a stable energy transition, the UK Government will make no additional changes to tax relief available within the EPL and a consultation will be published in early 2025 on a successor regime that can respond to price shocks. Money raised from changes to the EPL will support the transition to clean energy, enhance energy security and provide sustainable jobs for the future.

    The Budget also announced a package of measures that disincentivise activities that cause ill health, by:

    •  Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%).  
    • Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking. 
    • To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase to account for inflation since it was last updated in 2018, and the duty will rise in line with inflation every year going forward.
    • The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs.

    The UK Government has set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, this Budget delivers the UK Government’s manifesto commitments to raise revenue to pay for First Steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:  

    • A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
    • Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangement in place for people who have made plans based on current rules.
    • The planned 50% reduction for foreign income in the first year of the new regime will be removed.
    • Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.
    • The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.

    The Chancellor also doubled down on fiscal responsibility through two new fiscal rules that put the public finances on a sustainable path and prioritise investment to support long-term growth, and new principles of stability. Spending Reviews will be held every two years, setting plans for at least three years to ensure public services are always planned and improve value for money.

    One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes, while giving the Scottish Government greater clarity for in its own budget-setting.  A Fiscal Lock will also ensure no future government can sideline the OBR again.

    Updates to this page

    Published 30 October 2024

    MIL OSI United Kingdom –

  • MIL-OSI USA: CONGRESSMAN RYAN DELIVERS ON PROMISE OF A GOVERNMENT THAT WORKS FOR ALL, SECURES $30 MILLION OWED TO CONSTITUENTS BY FEDERAL GOVERNMENT

    Source: United States House of Representatives – Congressman Pat Ryan (New York 18th)

    Congressman Ryan Delivers on Promise of a Government that Works for All, Secures $30 Million Owed to Constituents by Federal Government  

     

    Ryan’s team of caseworkers has secured $30 million owed to NY-18 constituents by federal agencies

    WASHINGTON, DC  –  Today, Congressman Pat Ryan announced that his team of expert caseworkers has secured $30 million owed to NY-18 constituents by federal agencies. Cases most commonly involved the Internal Revenue Service (IRS), Social Security Administration, and the Department of Veterans Affairs (VA). Aided in large part by his mobile C.A.R.E.S Van, today’s announcement reflects Congressman Ryan’s prioritization of serving constituents directly and making government assistance easy and accessible.

    “From day one, my top priority has been delivering much-needed economic relief to our neighbors across the Hudson Valley,” said Congressman Ryan. “My team leaves no stone unturned to make sure that Hudson Valley families receive every dollar they deserve. Everyone’s feeling the pressure of making ends meet – we’re helping deliver the extra breathing room families need to finally exhale. If there is absolutely anything my team or I can be helpful with, please do not hesitate to reach out.”

    “I had spent 30 months trying to get my social security benefits and had gotten nowhere,” said Thomas Christopher of Port Jervis. “After contacting Congressman Ryan’s office I was put in touch with Destiny H.who interceded on my behalf and got me results. I cannot thank her enough and am totally sincere when I say that her help changed my life.”

    “For months on end, Middletown Medical was being stonewalled by two health plans for large payments. Their representatives would repeatedly make commitments that payments were on the way, but they never came through, putting Middletown Medical in a significantly difficult position,” said Darcy Shepard, CEO of Middletown Medical. “As soon as we reached out to Congressman Ryan’s office, each immediately met their financial obligations. Middletown Medical is very thankful for the instant financial relief provided by Congressman Ryan’s caseworkers!”

    “We are so grateful for the excellent assistance we received from Congressman Ryan’s office,” said David Friedman of New Paltz. “For two years we have been trying to resolve a problem with the IRS, and because of the intervention of his office, the issue has been properly resolved, and we actually received interest on an amount due from the IRS! It took something special to get this matter looked at and Congressman Ryan’s office provided that!”

    “Congressman Ryan’s team was extremely polite, professional, and emphatic towards my situation as a disabled veteran,” said Middletown veteran Nicholas White. “They contacted me to inform me of everything and what they could do to assist. I was granted 100% P&T disability compensation. My wife and I couldn’t be happier. Thank you!”

    “The Hudson River Sloop Clearwater, an historic Hudson Valley service organization, experienced an unexpected automated action from the IRS that if not resolved quickly could have had very negative consequences. I immediately contacted Congressman Ryan’s office for advice and support,” said David Toman, Executive Director of Hudson River Sloop Clearwater, Inc. “The Congressman’s staff promptly responded to our request for assistance, contacted the IRS Tax Advocate Services on our behalf, and advocated for our need to expedite review and resolution with professional skill. We greatly appreciate the response we received.”

    “For two years after retiring from federal service, I was unable to get my full annuity despite numerous phone calls and written correspondence to the Office of Personnel Management,” said Joseph Curto of Modena. “Congressman Ryan’s Constituent Advocates accomplished in a matter of months what I could not in two years. I am extremely grateful for their assistance.”

    “My 2022 tax return was held up by the IRS for nine months,” said Robert Warhola of Kingston. “I had plans for my refund. The case worker assured me this problem could be resolved in two weeks. As promised, I received my refund electronically. It is nice to see our government working efficiently.” 

    “My elderly brother was admitted to the hospital in need of acute care for 3 weeks and then transferred to a rehab center for a month-long stay to regain his motor skills. He had no insurance and only a pending application for Social Security and Medicare,” said John St. Leger of Poughkeepsie. “We contacted Congressman Ryan’s Office and they were able to have my brother’s application for benefits quickly approved. Without their assistance, particularly Maria Ingrassia, Director of Constituent Services, I’m not sure how our family crisis would have been resolved. Thanks to all of you! What a difference you have made.”

    “Thanks to Congressman Ryan’s office, the IRS finally issued refunds this spring for 2 returns I filed back in 2021,” said Stacy Quinn of Rhinebeck. “ After a very frustrating year of follow up – including an appointment at the IRS regional office in Poughkeepsie, multiple IRS assurances that I would hear back but never did, and a request for help from a senator’s office that was ignored – I was about to lose hope.  Congressman Ryan’s office responded immediately, however, provided frequent updates, and I received the missing refunds in 6 weeks.” 

    “Thank you to Congressman Ryan’s office for your help with obtaining my husband’s insurance policy through the Office of Personnel Management,” said Dutchess County resident Marianne Walker. “I tried to resolve the issue since November 2022, but could not get an answer. After I contacted Congressman Ryan’s office, the problem was resolved within two weeks. Thank you for also keeping in contact with me through the entire process.”

    “I would like to sincerely thank Congressman Ryan’s office for all their assistance with reinstating my disability compensation benefit payments from the Department of Veterans Affairs and retrieving over $15,000.00 in retroactive benefit payments,” said Beacon resident and veteran Christopher Kattis.

    “Representative Pat Ryan stands by his commitments to his constituents, tackling government and Social Security bureaucracy and ensuring that senior citizens in his district are not just a number to be ignored,” said Barbara Myers of Middletown. “After 14 months of frustration with the Social Security Administration for benefits owed to me, Representative Ryan’s office was able to support me and resolve my challenge with Social Security in less than a week.” 

    Congressman Pat Ryan has prioritized serving constituents directly and providing easily accessible casework assistance since taking office. He unveiled his mobile office, the Constituent Advocacy Resources Empowerment Services (C.A.R.E.S.) Van, in the summer of 2023 to bring assistance with federal agencies directly to constituents in their own neighborhoods. In under one year, the C.A.R.E.S. Van visited every one of the 82 municipalities in NY-18, allowing Ryan’s caseworkers to assist nearly 2,000 constituents in their own communities.

    Congressman Ryan has also held numerous resource fairs, connecting constituents with additional services outside of federal agencies and financial aid not included in the $30 million from federal agencies. Most recently, in April, Ryan held a Senior Resource Fair at the Kingston YMCA that connected over 150 Hudson Valley seniors with assistance from dozens of community partners and organizations. Congressman Ryan’s office additionally provides assistance with federal agencies that do not include monetary returns, including assistance with passports, immigration cases, returning lost military medals, securing military and personnel records, and more.

    In addition to the $30 million from federal agencies returned to individual constituents and organizations, Congressman Ryan has also secured major federal funding and grants for local communities, businesses, and organizations, including the $21.7 million RAISE grant for Kingston to restore its waterfront, the largest in the city’s history. Congressman Ryan has also delivered funding for local small businesses and farmers to save money on their energy costs, including a USDA Rural Energy for America Program (REAP) grant for Sheely’s Walden Car Wash to install a solar array and save 72% of its annual energy use. 

    Constituents, businesses, local governments, and organizations interested in casework assistance from Congressman Ryan’s office are encouraged to reach out by calling (845) 443-2930 or here on his website. 

    ###

    MIL OSI USA News –

  • MIL-OSI USA: Congressman Zinke Announces over $31 Million dollars in Transportation Grants for Bridge and Airport Projects Across Western Montana

    Source: United States House of Representatives – Western Montana Congressman Ryan Zinke

    Funds will go to replacing the Sportsman Bridge in Bigfork as well as expansion and modernization projects for airports in Missoula and Kalispell

    (WASHINGTON, D.C.) – Today, Western Montana Congressman Ryan Zinke announced the allocation of over $28.4 million in funding for bridge replacement in Bigfork, Montana. The new bridge will have an expanded deck width, be built on a redundant girder system, and use geogrid reinforcement to improve seismic resiliency. Sportsman Bridge was constructed in 1955 and currently does not meet standards for traffic volume in the area.

    The Congressman also announced two grants for airports in Kalispell and Missoula. The Missoula Montana Airport will be using the $875,000 for a revenue guarantee and associated marketing plan to recruit, initiate, and support year-round service to Chicago, expanding service to the airport. Glacier Park International Airport in Kalispell will be using the $2.5 million in funds to expand terminals and modernize gates and ticket areas, hold rooms, checkpoint lanes, utilities upgrades, and building envelope upgrades to improve efficiency, capacity, and accessibility.

    “Montana has been ignored for decades on our infrastructure. When counties don’t have working bridges, roads, airports, or sewer systems, they can’t promote growth in their economies,” said Congressman Zinke. “I am happy to be able to announce that with these grants we were able to get the Federal Government to pay attention to the needs of Montana.”

      

    Grant details are below:

    Recipient: Montana Department of Transportation

    Amount: $28,462,652

    Purpose: The project will replace the existing two-lane bridge with a more resilient two-lane bridge to maintain and improve access over the Flathead River in northwest Montana on Montana Highway 82 in Flathead County. Constructed in 1955, the existing bridge exhibits poor deck condition and its deck width does not meet current standards for accommodating future traffic volume growth. The structure also ranks high as a candidate for seismic retrofit as it is a two-girder non-redundant bridge that lies between two faults of the Mission Fault System. The new bridge will have an expanded deck width, be built on a redundant girder system, and use geogrid reinforcement to improve seismic resiliency. An additional 1.7 feet of freeboard and embankment protectors to route deck drainage will improve climate resiliency. Wider shoulders will allow drivers to pull out of travel lanes in emergency situations, allowing emergency responders to avoid vehicles parked on the shoulder.

      

    Recipient: Glacier Park International Airport

    Amount: $2,500,000

    Purpose: This award funds a portion of the terminal expansion and modernization project including gates and ticket areas, hold rooms, checkpoint lanes, utilities upgrades, and building envelope upgrades to improve efficiency, capacity, and accessibility.

      

    Recipient: Missoula Montana Airport 

    Amount: $875,000

    Purpose: Revenue guarantee and associated marketing plan to recruit, initiate, and support year-round service to Chicago (ORD).

     

    ###

    MIL OSI USA News –

  • MIL-OSI: Expand Energy Corporation Reports Third Quarter 2024 Results, Provides Preliminary 2025 Capital and Operating Plan and Announces Enhanced Capital Return Framework

    Source: GlobeNewswire (MIL-OSI)

    OKLAHOMA CITY, Oct. 29, 2024 (GLOBE NEWSWIRE) — Expand Energy Corporation (NASDAQ: EXE) (“Expand Energy” or the “company”) today reported third quarter 2024 financial and operating results. In addition, the company provided its preliminary 2025 capital and operating plan and announced details regarding its enhanced capital return framework. On October 1, 2024, Expand Energy announced the completion of the previously disclosed merger between Chesapeake Energy Corporation (“Chesapeake”) and Southwestern Energy Company (“Southwestern”).

    Legacy Chesapeake Third Quarter Highlights

    • Net cash provided by operating activities of $422 million
    • Net loss of $114 million, or $0.85 per fully diluted share; adjusted net income(1)of $22 million, or $0.16 per share
    • Adjusted EBITDAX(1)of $365 million
    • Produced approximately 2.65 bcf/d net (100% natural gas)

    Expand Energy Highlights

    • Raised annual synergy target by $100 million; expected to achieve approximately $225 million in 2025 and approximately $500 million in annual synergies by year end 2027
    • Upgraded at the start of fourth quarter to Investment Grade credit rating from S&P (BBB-) and Fitch (BBB-)
    • Quarterly base dividend of $0.575 per common share to be paid in December 2024, 15th straight quarter paying a dividend
    • 2025 capital expenditures expected to be approximately $2.7 billion, yielding net production of approximately 7 bcf/day (~91% natural gas)
    • Enhanced capital return framework to more effectively return cash to shareholders and reduce net debt; announced new $1 billion share repurchase authorization

    (1) Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are included at the end of this news release.

    “Our strong third quarter results, recent Investment Grade rating and preliminary 2025 outlook demonstrate the power of our advantaged portfolio and resilient financial foundation,” said Nick Dell’Osso, Expand Energy’s President and Chief Executive Officer. “Our integration efforts are already delivering, allowing us to raise our annual synergy expectations by 25% to $500 million, as we drive to lower our breakeven costs and more efficiently reach markets in need. As the largest domestic producer of natural gas, and a top producer globally, we are built to answer the call for affordable, reliable, lower carbon energy and expand opportunity for all stakeholders.”
    Operations Update

    In the third quarter, legacy Chesapeake operated an average of seven rigs to drill 30 wells and turned seven wells in line, resulting in net production of approximately 2.65 bcfe per day (100% natural gas). Additionally, the company built an inventory of 18 drilled but uncompleted (“DUCs”) wells and 12 deferred turn in lines (“TILs”). A detailed breakdown of third quarter production, capital expenditures and activity can be found in supplemental slides which have been posted at https://investors.expandenergy.com/events-presentations.

    Expand Energy continues to execute its previously disclosed plan to defer completions and new TILs. As of October 1, 2024, the combined company had 58 DUCs, excluding working inventory, and 58 deferred TILs. The company intends to prudently activate production as market conditions warrant.

    Expand Energy is currently running 12 rigs (8 in Haynesville, 2 in Northeast Appalachia, and 2 in Southwest Appalachia) and 6 completion crews (3 in Haynesville, 2 in Northeast Appalachia, and 1 in Southwest Appalachia). At current market conditions, the company expects to drop two rigs in the first quarter of 2025.

    Annual Synergy Outlook and Preliminary 2025 Capital & Operating Program

    Expand Energy increased its expected annual synergy outlook by $100 million to $500 million. The company expects to achieve approximately $225 million in synergies in 2025 and to achieve the full $500 million in annual synergies by year end 2027.

    In 2025, at current market conditions, the company expects to run 10 to 12 rigs and invest approximately $2.7 billion yielding an estimated daily production of approximately 7 bcfe per day. Expand Energy will provide complete guidance in early 2025.

    Shareholder Returns Update

    Expand Energy plans to pay its quarterly base dividend of $0.575 per share on December 4, 2024 to shareholders of record at the close of business on November 14, 2024.

    The company announced today its enhanced capital return framework which is designed to more effectively return cash to shareholders and reduce net debt. The plan is expected to go into effect January 1, 2025, and prioritizes the base dividend of $2.30 per share and $500 million of annual net debt reduction. Once both have been funded, it is anticipated that 75% of remaining free cash flow be distributed as market conditions warrant, between share repurchases and additional dividend payments. The remaining free cash flow would be maintained on the balance sheet.

    In conjunction with the enhanced framework, Expand Energy’s Board of Directors approved a $1 billion repurchase authorization.

    Conference Call Information

    A conference call to discuss the results and preliminary 2025 plan has been scheduled for 9 a.m. EDT on October 30, 2024. Participants can view the live webcast here. Participants who would like to ask a question, can register here, and will receive the dial-in info and a unique PIN to join the call. Links to the conference call will be provided on Expand Energy’s website. A replay will be available on the website following the call.

    Financial Statements, Non-GAAP Financial Measures and 2024 Guidance and Outlook Projections

    Reconciliations of each non-GAAP financial measure used in this news release to the most directly comparable GAAP financial measure are provided below. Additional detail on the company’s 2024 third quarter financial and operational results, along with non-GAAP measures that adjust for items typically excluded by certain securities analysts, are available on the company’s website. Non-GAAP measures should not be considered as an alternative to GAAP measures. Management’s updated guidance for 2024 and preliminary plan for 2025 can be found on the company’s website at www.expandenergy.com.

    Expand Energy Corporation (NASDAQ: EXE) is the largest independent natural gas producer in the United States, powered by dedicated and innovative employees focused on disrupting the industry’s traditional cost and market delivery model to responsibly develop assets in the nation’s most prolific natural gas basins. Expand Energy’s returns-driven strategy strives to create sustainable value for its stakeholders by leveraging its scale, financial strength and operational execution. Expand Energy is committed to expanding America’s energy reach to fuel a more affordable, reliable, lower carbon future.

    Forward-Looking Statements

    This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include our current expectations or forecasts of future events, including matters relating to the combined company after the merger with Southwestern Energy Company (“Southwestern”), armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, and the impact of each on our business, financial condition, results of operations and cash flows, actions by, or disputes among or between, members of OPEC+ and other foreign oil-exporting countries, market factors, market prices, our ability to meet debt service requirements, our ability to continue to pay cash dividends, the amount and timing of any cash dividends and our ESG initiatives. Forward-looking and other statements in this release regarding our environmental, social and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as “expect,” “could,” “may,” “anticipate,” “intend,” “plan,” “ability,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “guidance,” “outlook,” “opportunity” or “strategy.” The absence of such words or expressions does not necessarily mean the statements are not forward-looking.

    Although we believe the expectations and forecasts reflected in our forward-looking statements are reasonable, they are inherently subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. No assurance can be given that such forward-looking statements will be correct or achieved or that the assumptions are accurate or will not change over time. Particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include:

    • conservation measures and technological advances could reduce demand for natural gas and oil;
    • negative public perceptions of our industry;
    • competition in the natural gas and oil exploration and production industry;
    • the volatility of natural gas, oil and NGL prices, which are affected by general economic and business conditions, as well as increased demand for (and availability of) alternative fuels and electric vehicles;
    • risks from regional epidemics or pandemics and related economic turmoil, including supply chain constraints;
    • write-downs of our natural gas and oil asset carrying values due to low commodity prices;
    • significant capital expenditures are required to replace our reserves and conduct our business;
    • our ability to replace reserves and sustain production;
    • uncertainties inherent in estimating quantities of natural gas, oil and NGL reserves and projecting future rates of production and the amount and timing of development expenditures;
    • drilling and operating risks and resulting liabilities;
    • our ability to generate profits or achieve targeted results in drilling and well operations;
    • leasehold terms expiring before production can be established;
    • risks from our commodity price risk management activities;
    • uncertainties, risks and costs associated with natural gas and oil operations;
    • our need to secure adequate supplies of water for our drilling operations and to dispose of or recycle the water used;
    • pipeline and gathering system capacity constraints and transportation interruptions;
    • our plans to participate in the LNG export industry;
    • terrorist activities and/or cyber-attacks adversely impacting our operations;
    • risks from failure to protect personal information and data and compliance with data privacy and security laws and regulations;
    • disruption of our business by natural or human causes beyond our control;
    • a deterioration in general economic, business or industry conditions;
    • the impact of inflation and commodity price volatility, including as a result of armed conflict and instability in Europe and the Middle East, along with the effects of the current global economic environment, on our business, financial condition, employees, contractors, vendors and the global demand for natural gas and oil and on U.S. and global financial markets;
    • our inability to access the capital markets on favorable terms;
    • the limitations on our financial flexibility due to our level of indebtedness and restrictive covenants from our indebtedness;
    • our actual financial results after emergence from bankruptcy may not be comparable to our historical financial information;
    • risks related to acquisitions or dispositions, or potential acquisitions or dispositions, including risks related to the merger with Southwestern, such as risks related to loss of management personnel, other key employees, customers, suppliers, vendors, landlords, joint venture partners and other business partners following the merger; risks related to disruption of management time from ongoing business operations due to integration; the risk of any litigation relating to the transaction; the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected; and the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the transaction or it may take longer than expected to achieve those synergies or benefits;
    • our ability to achieve and maintain ESG certifications, goals and commitments;
    • legislative, regulatory and ESG initiatives, addressing environmental concerns, including initiatives addressing the impact of global climate change or further regulating hydraulic fracturing, methane emissions, flaring or water disposal;
    • federal and state tax proposals affecting our industry;
    • risks related to an annual limitation on the utilization of our tax attributes, as well as trading in our common stock, additional issuance of common stock, and certain other stock transactions, which could lead to an additional, potentially more restrictive, annual limitation; and
    • other factors that are described under Risk Factors in Item 1A of Part I of our Annual Report on Form 10-K.

    We caution you not to place undue reliance on the forward-looking statements contained in this release, which speak only as of the filing date, and we undertake no obligation to update this information. We urge you to carefully review and consider the disclosures in this release and our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business.

    CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
     
    ($ in millions, except per share data) September 30, 2024   December 31, 2023
    Assets      
    Current assets:      
    Cash and cash equivalents $ 1,044     $ 1,079  
    Restricted cash   76       74  
    Accounts receivable, net   261       593  
    Derivative assets   199       637  
    Other current assets   217       226  
    Total current assets   1,797       2,609  
    Property and equipment:      
    Natural gas and oil properties, successful efforts method      
    Proved natural gas and oil properties   12,373       11,468  
    Unproved properties   1,806       1,806  
    Other property and equipment   518       497  
    Total property and equipment   14,697       13,771  
    Less: accumulated depreciation, depletion and amortization   (4,743 )     (3,674 )
    Total property and equipment, net   9,954       10,097  
    Long-term derivative assets   15       74  
    Deferred income tax assets   1,038       933  
    Other long-term assets   588       663  
    Total assets $ 13,392     $ 14,376  
           
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable $ 264     $ 425  
    Accrued interest   41       39  
    Derivative liabilities   5       3  
    Other current liabilities   589       847  
    Total current liabilities   899       1,314  
    Long-term debt, net   2,017       2,028  
    Long-term derivative liabilities   —       9  
    Asset retirement obligations, net of current portion   271       265  
    Other long-term liabilities   17       31  
    Total liabilities   3,204       3,647  
    Contingencies and commitments      
    Stockholders’ equity:      
    Common stock, $0.01 par value, 450,000,000 shares authorized: 135,107,576 and 130,789,936 shares issued   1       1  
    Additional paid-in capital   5,778       5,754  
    Retained earnings   4,409       4,974  
    Total stockholders’ equity   10,188       10,729  
    Total liabilities and stockholders’ equity $ 13,392     $ 14,376  
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
    ($ in millions, except per share data)              
    Revenues and other:              
    Natural gas, oil and NGL $ 407     $ 682     $ 1,374     $ 2,784  
    Marketing   193       724       641       1,987  
    Natural gas and oil derivatives   46       106       207       1,195  
    Gains on sales of assets   2       —       12       807  
    Total revenues and other   648       1,512       2,234       6,773  
    Operating expenses:              
    Production   50       73       158       293  
    Gathering, processing and transportation   152       192       479       663  
    Severance and ad valorem taxes   11       27       58       136  
    Exploration   2       4       7       19  
    Marketing   192       723       656       1,985  
    General and administrative   39       29       133       95  
    Separation and other termination costs   —       —       23       3  
    Depreciation, depletion and amortization   335       382       1,082       1,148  
    Other operating expense, net   22       3       55       15  
    Total operating expenses   803       1,433       2,651       4,357  
    Income (loss) from operations   (155 )     79       (417 )     2,416  
    Other income (expense):              
    Interest expense   (20 )     (23 )     (59 )     (82 )
    Losses on purchases, exchanges or extinguishments of debt   —       —       (2 )     —  
    Other income   17       15       58       48  
    Total other income (expense)   (3 )     (8 )     (3 )     (34 )
    Income (loss) before income taxes   (158 )     71       (420 )     2,382  
    Income tax expense (benefit)   (44 )     1       (105 )     532  
    Net income (loss) $ (114 )   $ 70     $ (315 )   $ 1,850  
    Earnings (loss) per common share:              
    Basic $ (0.85 )   $ 0.53     $ (2.39 )   $ 13.86  
    Diluted $ (0.85 )   $ 0.49     $ (2.39 )   $ 12.90  
    Weighted average common shares outstanding (in thousands):              
    Basic   133,794       132,153       131,958       133,460  
    Diluted   133,794       142,348       131,958       143,463  
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
    ($ in millions)   2024       2023       2024       2023  
    Cash flows from operating activities:              
    Net income (loss) $ (114 )   $ 70     $ (315 )   $ 1,850  
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:              
    Depreciation, depletion and amortization   335       382       1,082       1,148  
    Deferred income tax expense (benefit)   (44 )     (80 )     (105 )     319  
    Derivative gains, net   (46 )     (106 )     (207 )     (1,195 )
    Cash receipts on derivative settlements, net   207       216       695       167  
    Share-based compensation   10       9       29       25  
    Gains on sales of assets   (2 )     —       (12 )     (807 )
    Losses on purchases, exchanges or extinguishments of debt   —       —       2       —  
    Other   (9 )     6       (16 )     35  
    Changes in assets and liabilities   85       9       30       368  
    Net cash provided by operating activities   422       506       1,183       1,910  
    Cash flows from investing activities:              
    Capital expenditures   (298 )     (423 )     (1,021 )     (1,450 )
    Receipts of deferred consideration   —       —       116       —  
    Contributions to investments   (26 )     (61 )     (71 )     (149 )
    Proceeds from divestitures of property and equipment   5       4       17       1,967  
    Net cash provided by (used in) investing activities   (319 )     (480 )     (959 )     368  
    Cash flows from financing activities:              
    Proceeds from Credit Facility   —       —       —       1,125  
    Payments on Credit Facility   —       —       —       (2,175 )
    Funds held for transition services   —       (6 )     —       91  
    Proceeds from warrant exercise   —       —       1       —  
    Debt issuance and other financing costs   —       —       (4 )     —  
    Cash paid to repurchase and retire common stock   —       (132 )     —       (313 )
    Cash paid for common stock dividends   (78 )     (77 )     (254 )     (412 )
    Net cash used in financing activities   (78 )     (215 )     (257 )     (1,684 )
    Net increase (decrease) in cash, cash equivalents and restricted cash   25       (189 )     (33 )     594  
    Cash, cash equivalents and restricted cash, beginning of period   1,095       975       1,153       192  
    Cash, cash equivalents and restricted cash, end of period $ 1,120     $ 786     $ 1,120     $ 786  
                   
    Cash and cash equivalents $ 1,044     $ 713     $ 1,044     $ 713  
    Restricted cash   76       73       76       73  
    Total cash, cash equivalents and restricted cash $ 1,120     $ 786     $ 1,120     $ 786  
    NATURAL GAS, OIL AND NGL PRODUCTION AND AVERAGE SALES PRICES (unaudited)
     
      Three Months Ended September 30, 2024
      Natural Gas   Oil   NGL   Total
      MMcf
    per day    		   $/Mcf   MBbl
    per day    		   $/Bbl   MBbl
    per day    		   $/Bbl   MMcfe
    per day    		   $/Mcfe
    Marcellus 1,531   1.51   —   —   —   —   1,531   1.51
    Haynesville 1,116   1.88   —   —   —   —   1,116   1.88
    Total 2,647   1.67   —   —   —   —   2,647   1.67
                                   
    Average NYMEX Price     2.16       —                
    Average Realized Price (including realized derivatives)     2.51       —       —       2.51
      Three Months Ended September 30, 2023
      Natural Gas   Oil   NGL   Total
      MMcf
    per day    		   $/Mcf   MBbl
    per day    		   $/Bbl   MBbl
    per day    		   $/Bbl   MMcfe
    per day    		   $/Mcfe
    Marcellus 1,734   1.63   —   —   —   —   1,734   1.63
    Haynesville 1,568   2.15   —   —   —   —   1,568   2.15
    Eagle Ford 76   2.52   9   82.33   10   25.76   193   6.36
    Total 3,378   1.89   9   82.33   10   25.76   3,495   2.12
                                   
    Average NYMEX Price     2.55       82.26                
    Average Realized Price (including realized derivatives)     2.58       82.33       25.76       2.79
      Nine Months Ended September 30, 2024
      Natural Gas   Oil   NGL   Total
      MMcf
    per day    		   $/Mcf   MBbl
    per day    		   $/Bbl   MBbl
    per day    		   $/Bbl   MMcfe
    per day    		   $/Mcfe
    Marcellus 1,601   1.65   —   —   —   —   1,601   1.65
    Haynesville 1,261   1.88   —   —   —   —   1,261   1.88
    Total 2,862   1.75   —   —   —   —   2,862   1.75
                                   
    Average NYMEX Price     2.10       —                
    Average Realized Price
    (including realized derivatives)    		     2.64       —       —       2.64
      Nine Months Ended September 30, 2023
      Natural Gas   Oil   NGL   Total
      MMcf
    per day    		   $/Mcf   MBbl
    per day    		   $/Bbl   MBbl
    per day    		   $/Bbl   MMcfe
    per day    		   $/Mcfe
    Marcellus 1,845   2.24   —   —   —   —   1,845   2.24
    Haynesville 1,569   2.26   —   —   —   —   1,569   2.26
    Eagle Ford 96   2.22   26   77.41   12   25.61   323   7.82
    Total 3,510   2.25   26   77.41   12   25.61   3,737   2.73
                                   
    Average NYMEX Price     2.69       77.39                
    Average Realized Price
    (including realized derivatives)    		     2.56       72.10       25.61       2.99
    CAPITAL EXPENDITURES ACCRUED (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
    ($ in millions)              
    Drilling and completion capital expenditures:              
    Marcellus $ 82     $ 91     $ 280     $ 324  
    Haynesville   151       191       477       704  
    Eagle Ford   —       9       —       222  
    Total drilling and completion capital expenditures   233       291       757       1,250  
    Non-drilling and completion – field   32       48       106       100  
    Non-drilling and completion – corporate   24       18       73       56  
    Total capital expenditures $ 289     $ 357     $ 936     $ 1,406  
    NON-GAAP FINANCIAL MEASURES
     

    As a supplement to the financial results prepared in accordance with U.S. GAAP, Expand Energy’s quarterly earnings releases contain certain financial measures that are not prepared or presented in accordance with U.S. GAAP. These non-GAAP financial measures include Adjusted Net Income, Adjusted Diluted Earnings Per Common Share, Adjusted EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Net Debt. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. Management believes these adjusted financial measures are a meaningful adjunct to earnings and cash flows calculated in accordance with GAAP because (a) management uses these financial measures to evaluate the company’s trends and performance, (b) these financial measures are comparable to estimates provided by certain securities analysts, and (c) items excluded generally are one-time items or items whose timing or amount cannot be reasonably estimated. Accordingly, any guidance provided by the company generally excludes information regarding these types of items.

    Expand Energy’s definitions of each non-GAAP measure presented herein are provided below. Because not all companies or securities analysts use identical calculations, Expand Energy’s non-GAAP measures may not be comparable to similarly titled measures of other companies or securities analysts.

    Adjusted Net Income: Adjusted Net Income is defined as net income (loss) adjusted to exclude unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Expand Energy believes that Adjusted Net Income facilitates comparisons of the company’s period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Net Income should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

    Adjusted Diluted Earnings Per Common Share: Adjusted Diluted Earnings Per Common Share is defined as diluted earnings (loss) per common share adjusted to exclude the per diluted share amounts attributed to unrealized (gains) losses on natural gas and oil derivatives, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results, less a tax effect using applicable rates. Expand Energy believes that Adjusted Diluted Earnings Per Common Share facilitates comparisons of the company’s period-over-period performance, which many investors use in making investment decisions and evaluating operational trends and performance. Adjusted Diluted Earnings Per Common Share should not be considered an alternative to, or more meaningful than, earnings (loss) per common share as presented in accordance with GAAP.

    Adjusted EBITDAX: Adjusted EBITDAX is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation, depletion and amortization expense, exploration expense, unrealized (gains) losses on natural gas and oil derivatives, separation and other termination costs, (gains) losses on sales of assets, and certain items management believes affect the comparability of operating results. Adjusted EBITDAX is presented as it provides investors an indication of the company’s ability to internally fund exploration and development activities and service or incur debt. Adjusted EBITDAX should not be considered an alternative to, or more meaningful than, net income (loss) as presented in accordance with GAAP.

    Free Cash Flow: Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures. Free Cash Flow is a liquidity measure that provides investors additional information regarding the company’s ability to service or incur debt and return cash to shareholders. Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

    Adjusted Free Cash Flow: Adjusted Free Cash Flow is defined as net cash provided by (used in) operating activities less cash capital expenditures and cash contributions to investments, adjusted to exclude certain items management believes affect the comparability of operating results. Adjusted Free Cash Flow is a liquidity measure that provides investors additional information regarding the company’s ability to service or incur debt and return cash to shareholders and is used to determine Expand Energy’s returns framework payout. Adjusted Free Cash Flow should not be considered an alternative to, or more meaningful than, net cash provided by (used in) operating activities, or any other measure of liquidity presented in accordance with GAAP.

    Net Debt: Net Debt is defined as GAAP total debt excluding premiums, discounts, and deferred issuance costs less cash and cash equivalents. Net Debt is useful to investors as a widely understood measure of liquidity and leverage, but this measure should not be considered as an alternative to, or more meaningful than, total debt presented in accordance with GAAP.

    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
    ($ in millions)   2024       2023       2024       2023  
    Net income (loss) (GAAP) $ (114 )   $ 70     $ (315 )   $ 1,850  
                   
    Adjustments:              
    Unrealized (gains) losses on natural gas and oil derivatives   160       110       489       (931 )
    Separation and other termination costs   —       —       23       3  
    Gains on sales of assets   (2 )     —       (12 )     (807 )
    Other operating expense, net   23       3       58       18  
    Losses on purchases, exchanges or extinguishments of debt   —       —       2       —  
    Other   (4 )     (4 )     (17 )     (19 )
    Tax effect of adjustments(a)   (41 )     (24 )     (125 )     403  
    Adjusted net income (Non-GAAP) $ 22     $ 155     $ 103     $ 517  
    (a) The three- and nine-month periods ended September 30, 2024 and September 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
    RECONCILIATION OF EARNINGS (LOSS) PER COMMON SHARE TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
    ($/share)   2024       2023       2024       2023  
    Earnings (loss) per common share (GAAP) $ (0.85 )   $ 0.53     $ (2.39 )   $ 13.86  
    Effect of dilutive securities   —       (0.04 )     —       (0.96 )
    Diluted earnings (loss) per common share (GAAP) $ (0.85 )   $ 0.49     $ (2.39 )   $ 12.90  
                   
    Adjustments:              
    Unrealized (gains) losses on natural gas and oil derivatives   1.20       0.78       3.70       (6.49 )
    Separation and other termination costs   —       —       0.17       0.02  
    Gains on sales of assets   (0.02 )     —       (0.09 )     (5.63 )
    Other operating expense, net   0.17       0.02       0.44       0.13  
    Losses on purchases, exchanges or extinguishments of debt   —       —       0.01       —  
    Other   (0.03 )     (0.03 )     (0.13 )     (0.13 )
    Tax effect of adjustments(a)   (0.31 )     (0.17 )     (0.95 )     2.81  
    Effect of dilutive securities   —       —       (0.03 )     —  
    Adjusted diluted earnings per common share (Non-GAAP) $ 0.16     $ 1.09     $ 0.73     $ 3.61  
    (a) The three- and nine-month periods ended September 30, 2024 and September 30, 2023 include a tax effect attributed to the reconciling adjustments using a statutory rate of 23%.
    RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDAX (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
    ($ in millions)              
    Net income (loss) (GAAP) $ (114 )   $ 70     $ (315 )   $ 1,850  
                   
    Adjustments:              
    Interest expense   20       23       59       82  
    Income tax expense (benefit)   (44 )     1       (105 )     532  
    Depreciation, depletion and amortization   335       382       1,082       1,148  
    Exploration   2       4       7       19  
    Unrealized (gains) losses on natural gas and oil derivatives   160       110       489       (931 )
    Separation and other termination costs   —       —       23       3  
    Gains on sales of assets   (2 )     —       (12 )     (807 )
    Other operating expense, net   23       3       58       18  
    Losses on purchases, exchanges or extinguishments of debt   —       —       2       —  
    Other   (15 )     (13 )     (57 )     (36 )
    Adjusted EBITDAX (Non-GAAP) $ 365     $ 580     $ 1,231     $ 1,878  
    RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW (unaudited)
     
      Three Months Ended
    September 30,    		   Nine Months Ended
    September 30,
        2024       2023       2024       2023  
    ($ in millions)              
    Net cash provided by operating activities (GAAP) $ 422     $ 506     $ 1,183     $ 1,910  
    Cash capital expenditures   (298 )     (423 )     (1,021 )     (1,450 )
    Free cash flow (Non-GAAP)   124       83       162       460  
    Cash contributions to investments   (26 )     (61 )     (71 )     (149 )
    Free cash flow associated with divested assets(a)   —       (57 )     —       (195 )
    Adjusted free cash flow (Non-GAAP) $ 98     $ (35 )   $ 91     $ 116  
    (a) In March and April of 2023, we closed two divestitures of certain Eagle Ford assets. Due to the structure of these transactions, both of which had an effective date of October 1, 2022, the cash generated by these assets was delivered to the respective buyers through a reduction in the proceeds we received at the closing of each transaction. Additionally, in August 2023, we entered into an agreement to sell the final portion of our Eagle Ford assets, with an economic effective date of February 1, 2023. Included within the adjustment above reflects the cash flows from the three months ended September 30, 2023, associated with the final portion of our Eagle Ford assets as the cash generated by those assets were delivered to the buyer through a reduction in the proceeds we received once the transaction closed during the fourth quarter of 2023.
    RECONCILIATION OF TOTAL DEBT TO NET DEBT (unaudited)
     
    ($ in millions) September 30, 2024
    Total debt (GAAP) $ 2,017  
    Premiums and issuance costs on debt   (67 )
    Principal amount of debt   1,950  
    Cash and cash equivalents   (1,044 )
    Net debt (Non-GAAP) $ 906  
    INVESTOR CONTACT: MEDIA CONTACT: EXPAND ENERGY CORPORATION
    Chris Ayres Brooke Coe 6100 North Western Avenue
    (405) 935-8870 (405) 935-8878 P.O. Box 18496
    ir@expandenergy.com media@expandenergy.com Oklahoma City, OK 73154

    The MIL Network –

  • MIL-OSI: EXL Reports 2024 Third Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    2024 Third Quarter Revenue of $472.1 Million, up 14.9% year-over-year

    Q3 Diluted EPS (GAAP) of $0.33, up 24.2% from $0.26 in Q3 of 2023

    Q3 Adjusted Diluted EPS (Non-GAAP) (1)of $0.44, up 16.3% from $0.37 in Q3 of 2023

    NEW YORK, Oct. 29, 2024 (GLOBE NEWSWIRE) — ExlService Holdings, Inc. (Nasdaq: EXLS), a leading data analytics and digital operations and solutions company, today announced its financial results for the quarter ended September 30, 2024.

    Rohit Kapoor, chairman and chief executive officer, said, “We are pleased with our third quarter results. We delivered revenue and adjusted diluted EPS growth of 15% and 16% respectively. The ongoing execution of our data and AI-led strategy enabled us to accelerate our growth, achieving double-digit growth across both our data analytics and digital operations and solutions businesses during the quarter. As we continue to expand our data modernization and AI solution set with innovations such as industry-specific large language models (LLMs), we are well positioned to continue our momentum into the fourth quarter and beyond.”

    Maurizio Nicolelli, chief financial officer, said, “Based on our strong year-to-date performance and current visibility for the remainder of the year, we are raising the full-year guidance range for revenue and EPS. We now expect revenue to be in the range of $1.825 billion to $1.835 billion, up from our prior guidance of $1.805 billion to $1.830 billion. This represents 12% to 13% year-over-year growth on a reported currency basis and approximately 12% on a constant currency basis. We now expect our adjusted diluted earnings per share for 2024 to be in the range of $1.61 to $1.63, up from our prior guidance of $1.59 to $1.62, representing growth of 13% to 14% over the prior year.”

    __________________________________________________________

    (1) Reconciliations of adjusted (non-GAAP) financial measures to the most directly comparable GAAP measures, where applicable, are included at the end of this release under “Reconciliation of Adjusted Financial Measures to GAAP Measures.” These non-GAAP measures, including adjusted diluted EPS and constant currency measures, are not measures of financial performance prepared in accordance with GAAP.

    Financial Highlights: Third Quarter 2024

    • Revenue for the quarter ended September 30, 2024 increased to $472.1 million compared to $411.0 million for the third quarter of 2023, an increase of 14.9% on a reported basis and 14.5% on a constant currency basis. Revenue increased by 5.3% sequentially on a reported basis and 4.9% on a constant currency basis, from the second quarter of 2024.
        Revenue   Gross Margin
        Three months ended
    		   Three months ended
    Reportable Segments   September 30,
    2024
    		   September 30,
    2023
    		   June 30,
    2024
    		   September 30,
    2024
    		   September 30,
    2023
    		   June 30,
    2024
        (dollars in millions)        
    Insurance   $ 157.6     $ 136.4     $ 149.3       36.3 %     36.6 %     36.0 %
    Healthcare     30.5       26.2       28.1       33.6 %     36.8 %     33.1 %
    Emerging Business     80.0       65.3       77.2       40.2 %     42.4 %     41.6 %
    Analytics     204.0       183.1       193.8       38.5 %     37.0 %     36.7 %
    Revenues, net   $ 472.1     $ 411.0     $ 448.4       37.8 %     37.7 %     37.1 %
     
    • Operating income margin for each of the quarter ended September 30, 2024 and the third quarter of 2023, was 14.7%, and 13.7% for the second quarter of 2024. Adjusted operating income margin for the quarter ended September 30, 2024, was 19.9%, compared to 20.0% for the third quarter of 2023 and 19.8% for the second quarter of 2024.
    • Diluted earnings per share for the quarter ended September 30, 2024, was $0.33, compared to $0.26 for the third quarter of 2023 and $0.28 for the second quarter of 2024. Adjusted diluted earnings per share for the quarter ended September 30, 2024, was $0.44, compared to $0.37 for the third quarter of 2023 and $0.40 for the second quarter of 2024.

    Business Highlights: Third Quarter 2024

    • Won 13 new clients in the third quarter of 2024, with 8 clients in digital operations and solutions business and 5 clients in analytics.
    • Launched the EXL Insurance LLM, developed using NVIDIA AI software. This LLM addresses the highly specialized needs of the insurance industry, leveraging EXL’s 25 years of experience in the industry and a proprietary data set with more than a decade of claims-related data.
    • Expanded partnership with Databricks to deploy new data management and generative AI solutions into the Databricks ecosystem, speeding the development of cutting-edge data management solutions for EXL clients.
    • Recognized as a Major Player in the IDC MarketScape: Worldwide Data Modernization Services 2024 Vendor Assessment based on our core value propositions, execution and innovation capabilities, go-to-market strategy, and market impact.
    • Named by Newsweek as one of America’s Most Reliable Companies 2025 based on parameters including: Likelihood of Recommendation, Ease of Doing Business, Value for Money, Consistency of Deliverables, and Reputation for Dependability.

    2024 Guidance
    Based on current visibility, and a U.S. dollar to Indian rupee exchange rate of 84.0, U.K. pound sterling to U.S. dollar exchange rate of 1.30, U.S. dollar to the Philippine peso exchange rate of 58.0 and all other currencies at current exchange rates, we are providing the following guidance for the full year 2024:

    • Revenue of $1.825 billion to $1.835 billion, representing an increase of 12% to 13% on a reported currency basis and approximately 12% on a constant currency basis from 2023.
    • Adjusted diluted earnings per share of $1.61 to $1.63, representing an increase of 13% to 14% from 2023.

    Conference Call

    ExlService Holdings, Inc. will host a conference call on Wednesday, Oct. 30, 2024, at 10:00 A.M. ET to discuss the company’s quarterly operating and financial results. The conference call will be available live via the internet by accessing the investor relations section of EXL’s website at ir.exlservice.com, where an accompanying investor-friendly spreadsheet of historical operating and financial data can also be accessed. Please access the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.

    Please note that there is a new system to access the live call-in order to ask questions. To join the live call, please register here. For those who cannot access the live broadcast, a replay will be available on the EXL website ir.exlservice.com for a period of approximately twelve months.

    About ExlService Holdings, Inc.

    EXL (Nasdaq: EXLS) is a leading data analytics and digital operations and solutions company. We partner with clients using a data and AI-led approach to reinvent business models, drive better business outcomes and unlock growth with speed. EXL harnesses the power of data, analytics, AI, and deep industry knowledge to transform operations for the world’s leading corporations in industries including insurance, healthcare, banking and financial services, media and retail, among others. EXL was founded in 1999 with the core values of innovation, collaboration, excellence, integrity and respect. We are headquartered in New York and have more than 57,000 employees spanning six continents. For more information, visit www.exlservice.com.

    Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to EXL’s operations and business environment, all of which are difficult to predict and many of which are beyond EXL’s control. Forward-looking statements include information concerning EXL’s possible or assumed future results of operations, including descriptions of its business strategy. These statements may include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of management’s experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although EXL believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect EXL’s actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors, which include our ability to maintain and grow client demand, our ability to hire and retain sufficiently trained employees, and our ability to accurately estimate and/or manage costs, rising interest rates, rising inflation, recessionary economic trends, and ability to successfully integrate strategic acquisitions, are discussed in more detail in EXL’s filings with the Securities and Exchange Commission, including EXL’s Annual Report on Form 10-K. You should keep in mind that any forward-looking statement made herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect EXL. EXL has no obligation to update any forward-looking statements after the date hereof, except as required by applicable law.

    EXLSERVICE HOLDINGS, INC.
    CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
    (In thousands, except per share amount and share count)
     
      Three months ended September 30,   Nine months ended September 30,
        2024       2023       2024       2023  
    Revenues, net $ 472,073     $ 410,971     $ 1,356,946     $ 1,216,610  
    Cost of revenues(1)   293,806       256,002       849,336       760,691  
    Gross profit(1)   178,267       154,969       507,610       455,919  
    Operating expenses:              
    General and administrative expenses   57,495       52,213       167,195       144,564  
    Selling and marketing expenses   37,568       30,943       108,982       88,674  
    Depreciation and amortization expense   13,799       11,583       39,055       38,192  
    Total operating expenses   108,862       94,739       315,232       271,430  
    Income from operations   69,405       60,230       192,378       184,489  
    Foreign exchange gain, net   278       409       673       838  
    Interest expense   (5,526 )     (3,405 )     (14,145 )     (10,030 )
    Other income, net   4,374       778       11,876       6,594  
    Income before income tax expense and earnings from equity affiliates   68,531       58,012       190,782       181,891  
    Income tax expense   15,460       14,161       43,086       37,773  
    Income before earnings from equity affiliates   53,071       43,851       147,696       144,118  
    Gain/(loss) from equity-method investment   (34 )     25       (71 )     157  
    Net income $ 53,037     $ 43,876     $ 147,625     $ 144,275  
    Earnings per share:              
    Basic $ 0.33     $ 0.26     $ 0.90     $ 0.87  
    Diluted $ 0.33     $ 0.26     $ 0.90     $ 0.86  
    Weighted average number of shares used in computing earnings per share:              
    Basic   161,732,872       166,159,619       163,197,767       166,707,599  
    Diluted   163,187,733       167,688,374       164,620,081       168,591,612  

    (1) Exclusive of depreciation and amortization expense.

    EXLSERVICE HOLDINGS, INC.
    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (In thousands, except per share amount and share count)
     
      As of
      September 30, 2024   December 31, 2023
           
    Assets      
    Current assets:      
    Cash and cash equivalents $ 150,102     $ 136,953  
    Short-term investments   175,648       153,881  
    Restricted cash   7,342       4,062  
    Accounts receivable, net   340,904       308,108  
    Other current assets   93,693       76,669  
    Total current assets   767,689       679,673  
    Property and equipment, net   107,395       100,373  
    Operating lease right-of-use assets   71,796       64,856  
    Restricted cash   5,820       4,386  
    Deferred tax assets, net   106,881       82,927  
    Goodwill   427,663       405,639  
    Other intangible assets, net   51,291       50,164  
    Long-term investments   14,184       4,430  
    Other assets   57,113       49,524  
    Total assets $ 1,609,832     $ 1,441,972  
    Liabilities and stockholders’ equity      
    Current liabilities:      
    Accounts payable $ 4,082     $ 5,055  
    Current portion of long-term borrowings   4,891       65,000  
    Deferred revenue   12,472       12,318  
    Accrued employee costs   110,677       117,137  
    Accrued expenses and other current liabilities   105,159       114,113  
    Current portion of operating lease liabilities   16,904       12,780  
    Total current liabilities   254,185       326,403  
    Long-term borrowings, less current portion   339,828       135,000  
    Operating lease liabilities, less current portion   62,336       58,175  
    Deferred tax liabilities, net   3,245       1,495  
    Other non-current liabilities   42,675       31,462  
    Total liabilities   702,269       552,535  
    Commitments and contingencies      
    Stockholders’ equity:      
    Preferred stock, $0.001 par value; 15,000,000 shares authorized, none issued   —       —  
    Common stock, $0.001 par value; 400,000,000 shares authorized, 205,317,002 shares issued and 160,880,592 shares outstanding as of September 30, 2024 and 203,410,038 shares issued and 165,277,880 shares outstanding as of December 31, 2023   205       203  
    Additional paid-in capital   572,430       508,028  
    Retained earnings   1,231,288       1,083,663  
    Accumulated other comprehensive loss   (122,593 )     (127,040 )
    Total including shares held in treasury   1,681,330       1,464,854  
    Less: 44,436,410 shares as of September 30, 2024 and 38,132,158 shares as of December 31, 2023, held in treasury, at cost   (773,767 )     (575,417 )
    Total stockholders’ equity   907,563       889,437  
    Total liabilities and stockholders’ equity $ 1,609,832     $ 1,441,972  

    EXLSERVICE HOLDINGS, INC.

    Reconciliation of Adjusted Financial Measures to GAAP Measures

    In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), EXL has included in this release certain financial measures that are considered non-GAAP financial measures, including the following:

    1. Adjusted operating income and adjusted operating income margin;
    2. Adjusted EBITDA and adjusted EBITDA margin;
    3. Adjusted net income and adjusted diluted earnings per share; and
    4. Revenue growth on constant currency basis.

    These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles, should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Accordingly, the financial results calculated in accordance with GAAP and reconciliations from those financial statements should be carefully evaluated. EXL believes that providing these non-GAAP financial measures may help investors better understand EXL’s underlying financial performance. Management also believes that these non-GAAP financial measures, when read in conjunction with EXL’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s results and comparisons of the Company’s results with the results of other companies. Additionally, management considers some of these non-GAAP financial measures to determine variable compensation of its employees. The Company believes that it is unreasonably difficult to provide its earnings per share financial guidance in accordance with GAAP, or a qualitative reconciliation thereof, for a number of reasons, including, without limitation, the Company’s inability to predict its future stock-based compensation expense under ASC Topic 718, the amortization of intangibles associated with future acquisitions and the currency fluctuations and associated tax effects. As such, the Company presents guidance with respect to adjusted diluted earnings per share. The Company also incurs significant non-cash charges for depreciation that may not be indicative of the Company’s ability to generate cash flow.

    EXL non-GAAP financial measures exclude, where applicable, stock-based compensation expense, amortization of acquisition-related intangible assets, restructuring costs, litigation settlement costs and associated legal fees, effects of termination of leases, certain defined social security contributions, allowance for certain material expected credit losses, other acquisition-related expenses or benefits and effect of any non-recurring tax adjustments. Acquisition-related expenses or benefits include, changes in the fair value of contingent consideration, external deal costs, integration expenses, direct and incremental travel costs and non-recurring benefits or losses. Our adjusted net income and adjusted diluted EPS also excludes the effects of income tax on the above pre-tax items, as applicable. The effects of income tax of each item is calculated by applying the statutory rate of the local tax regulations in the jurisdiction in which the item was incurred.

    A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and exclude costs that are recurring, namely stock-based compensation and amortization of acquisition-related intangible assets. EXL compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.

    EXL’s primary exchange rate exposure is with the Indian rupee, the Philippine peso, the U.K. pound sterling and the South African rand. The average exchange rate of the U.S. dollar against the Indian rupee increased from 82.69 during the quarter ended September 30, 2023 to 83.79 during the quarter ended September 30, 2024, representing a depreciation of 1.3% against the U.S. dollar. The average exchange rate of the U.S. dollar against the Philippine peso increased from 56.02 during the quarter ended September 30, 2023 to 56.84 during the quarter ended September 30, 2024, representing a depreciation of 1.5% against the U.S. dollar. The average exchange rate of the U.K. pound sterling against the U.S. dollar increased from 1.26 during the quarter ended September 30, 2023 to 1.31 during the quarter ended September 30, 2024, representing an appreciation of 4.4% against the U.S. dollar. The average exchange rate of the U.S. dollar against the South African rand decreased from 18.49 during the quarter ended September 30, 2023 to 17.74 during the quarter ended September 30, 2024, representing an appreciation of 4.1% against the U.S. dollar.

    The following table shows the reconciliation of these non-GAAP financial measures for the three months ended September 30, 2024 and September 30, 2023, and the three months ended June 30, 2024:

    Reconciliation of Adjusted Operating Income and Adjusted EBITDA
    (Amounts in thousands)
     
      Three months ended
      September 30,   June 30,
        2024       2023       2024  
    Net Income (GAAP) $ 53,037     $ 43,876     $ 45,825  
    add: Income tax expense   15,460       14,161       13,873  
    add/(subtract): Foreign exchange gain, net, interest expense,
    gain/(loss) from equity-method investment and other income/(loss), net    		   908       2,193       1,751  
    Income from operations (GAAP) $ 69,405     $ 60,230     $ 61,449  
    add: Stock-based compensation expense   21,232       17,067       18,095  
    add: Amortization of acquisition-related intangibles   3,449       3,157       3,077  
    add: Restructuring and litigation settlement costs (a)   —       —       6,174  
    add: Allowance for expected credit losses (b)   —       1,700       —  
    Adjusted operating income (Non-GAAP) $ 94,086     $ 82,154     $ 88,795  
    Adjusted operating income margin as a % of Revenue (Non-GAAP)   19.9 %     20.0 %     19.8 %
    add: Depreciation on long-lived assets   10,350       8,426       9,833  
    Adjusted EBITDA (Non-GAAP) $ 104,436     $ 90,580     $ 98,628  
    Adjusted EBITDA margin as a % of revenue (Non-GAAP)   22.1 %     22.0 %     22.0 %

    (a) To exclude effects of employee severance costs and outplacement support costs of $4,762 and litigation settlement costs and associated legal fees of $1,412 during the three months ended June 30, 2024.

    (b) To exclude the effects of material allowance for expected credit losses on accounts receivables related to a customer bankruptcy event during the three months ended September 30, 2023.

    Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings Per Share
    (Amounts in thousands, except per share amount)
     
      Three months ended
      September 30,   June 30,
        2024       2023       2024  
    Net income (GAAP) $ 53,037     $ 43,876     $ 45,825  
    add: Stock-based compensation expense   21,232       17,067       18,095  
    add: Amortization of acquisition-related intangibles   3,449       3,157       3,077  
    add: Restructuring and litigation settlement costs (a)   —       —       6,174  
    add: Effects of changes in fair value of contingent consideration   —       2,500       —  
    add: Allowance for expected credit losses (b)   —       1,700       —  
    subtract: Tax impact on stock-based compensation expense (c)   (5,830 )     (4,340 )     (4,619 )
    subtract: Tax impact on amortization of acquisition-related intangibles   (866 )     (771 )     (765 )
    subtract: Tax impact on restructuring and litigation settlement costs   —       —       (1,588 )
    subtract: Tax impact on allowance for expected credit losses   —       (429 )     —  
    Adjusted net income (Non-GAAP) $ 71,022     $ 62,760     $ 66,199  
    Adjusted diluted earnings per share (Non-GAAP) $ 0.44     $ 0.37     $ 0.40  

    (a) To exclude effects of employee severance costs and outplacement support costs of $4,762 and litigation settlement costs and associated legal fees of $1,412 during the three months ended June 30, 2024.

    (b) To exclude the effects of material allowance for expected credit losses on accounts receivables related to a customer bankruptcy event during the three months ended September 30, 2023.

    (c) Tax impact includes $1,673 and $462 during the three months ended September 30, 2024 and 2023 respectively, and $18 during the three months ended June 30, 2024, related to discrete benefits recognized in income tax expense in accordance with ASU No. 2016-09, Compensation – Stock Compensation.

    Contacts:
    Investor Relations
    John Kristoff
    Vice President, Investor Relations
    +1 212 209 4613
    ir@exlservice.com

    Media – US
    Keith Little
    Assistant Vice President, Media Relations
    +1 703 598 0980
    media.relations@exlservice.com

    The MIL Network –

  • MIL-OSI: Qorvo® Announces Fiscal 2025 Second Quarter Financial Results

    Source: GlobeNewswire (MIL-OSI)

    GREENSBORO, N.C., Oct. 29, 2024 (GLOBE NEWSWIRE) — Qorvo® (Nasdaq:QRVO), a leading global provider of connectivity and power solutions, today announced financial results for the Company’s fiscal 2025 second quarter ended September 28, 2024.

    On a GAAP basis, revenue for Qorvo’s fiscal 2025 second quarter was $1.047 billion, gross margin was 42.6%, operating income was $9.7 million, and loss per share was $0.18. On a non-GAAP basis, gross margin was 47.0%, operating income was $212.2 million, and diluted earnings per share was $1.88.

    Bob Bruggeworth, president and chief executive officer of Qorvo, said, “In the September quarter, ACG successfully supported our largest customer’s seasonal smartphone ramp. In HPA, we expanded our D&A business while building a broad-based business in power management. In CSG, we maintained our leadership in Wi-Fi applications while investing to grow in diverse businesses including automotive solutions and SoCs for ultra-wideband and Matter. HPA and CSG are on pace to achieve mid-teen year-over-year growth in fiscal 2025.”

    Financial Commentary and Outlook

    Grant Brown, chief financial officer of Qorvo, said, “In the September quarter, we exceeded the midpoint of guidance in revenue, gross margin and EPS. Looking forward, the flagship and premium tiers in the smartphone market are holding up well, however, content and ramp profiles vary by model, and we are experiencing unfavorable mix. We expect this to continue in the second half of fiscal 2025. In addition, in the mid and entry tiers of Android 5G smartphones, mix has shifted toward entry-tier 5G at the expense of mid-tier 5G. In our current view, we don’t expect this mix shift in Android 5G from mid-tier to entry-tier to reverse. As a result, we are taking appropriate actions, including factory consolidation and operating expense reductions as well as focusing on opportunities that align with our long-term profitability objectives. We currently expect full-year fiscal 2025 revenue and gross margin will be slightly down versus fiscal 2024.”

    Qorvo’s current outlook for the December 2024 quarter is:

    • Quarterly revenue of approximately $900 million, plus or minus $25 million
    • Non-GAAP gross margin of approximately 45%
    • Non-GAAP diluted earnings per share between $1.10 and $1.30

    See “Forward-looking non-GAAP financial measures” below. Qorvo’s actual quarterly results may differ from these expectations and projections, and such differences may be material.

    Selected Financial Information

    The following tables set forth selected GAAP and non-GAAP financial information for Qorvo for the periods indicated. See the more detailed financial information for Qorvo, including reconciliations of GAAP and non-GAAP financial information, attached.

    SELECTED GAAP RESULTS
    (In millions, except for percentages and EPS)
    (Unaudited)
                           
      Q2 Fiscal 2025   Q1 Fiscal 2025   Q2 Fiscal 2024   Sequential Change   Year-over-Year Change
    Revenue $ 1,046.5     $ 886.7     $ 1,103.5     $ 159.8     $ (57.0 )
    Gross profit $ 445.3     $ 332.3     $ 489.7     $ 113.0     $ (44.4 )
    Gross margin   42.6 %     37.5 %     44.4 %   5.1 ppt   (1.8) ppt
    Operating expenses $ 435.6     $ 327.7     $ 338.3     $ 107.9     $ 97.3  
    Operating income $ 9.7     $ 4.6     $ 151.4     $ 5.1     $ (141.7 )
    Net (loss) income $ (17.4 )   $ 0.4     $ 97.5     $ (17.8 )   $ (114.9 )
    Weighted-average diluted shares   94.9       96.5       98.6       (1.6 )     (3.7 )
    Diluted EPS (loss per share) $ (0.18 )   $ 0.00     $ 0.99     $ (0.18 )   $ (1.17 )
                           
                           
    SELECTED NON-GAAP RESULTS(1)
    (In millions, except for percentages and EPS)
    (Unaudited)
                           
      Q2 Fiscal 2025   Q1 Fiscal 2025   Q2 Fiscal 2024   Sequential Change   Year-over-Year Change
    Revenue $ 1,046.5     $ 886.7     $ 1,103.5     $ 159.8     $ (57.0 )
    Gross profit $ 492.0     $ 362.7     $ 525.2     $ 129.3     $ (33.2 )
    Gross margin   47.0 %     40.9 %     47.6 %     6.1 ppt       (0.6) ppt  
    Operating expenses $ 279.8     $ 264.5     $ 245.8     $ 15.3     $ 34.0  
    Operating income $ 212.2     $ 98.1     $ 279.4     $ 114.1     $ (67.2 )
    Net income $ 179.8     $ 83.5     $ 235.5     $ 96.3     $ (55.7 )
    Weighted-average diluted shares   95.8       96.5       98.6       (0.7 )     (2.8 )
    Diluted EPS $ 1.88     $ 0.87     $ 2.39     $ 1.01     $ (0.51 )

    (1) Adjusted for stock-based compensation expense, amortization of intangible assets, restructuring-related charges, acquisition and integration-related costs, goodwill and other asset impairments, gain or loss on assets, other expense or income, gain or loss on investments, and an adjustment of income taxes.

    SELECTED GAAP RESULTS BY OPERATING SEGMENT
    (In millions, except percentages)
    (Unaudited)
      Q2 Fiscal 2025   Q1 Fiscal 2025   Q2 Fiscal 2024   Sequential Change   Year-over-Year Change
    Revenue                  
    HPA $ 148.3     $ 129.5     $ 149.8       14.5 %     (1.0 )%
    CSG   146.8       114.9       103.6       27.8 %     41.7 %
    ACG   751.4       642.3       850.1       17.0 %     (11.6 )%
    Total revenue $ 1,046.5     $ 886.7     $ 1,103.5       18.0 %     (5.2 )%
    Operating income (loss)                      
    HPA $ 13.1     $ 4.9     $ 25.4       167.3 %     (48.4 )%
    CSG   (9.0 )     (19.5 )     (27.7 )     53.8 %     67.5 %
    ACG   215.1       116.4       284.8       84.8 %     (24.5 )%
    All other(1)   (209.5 )     (97.2 )     (131.1 )     (115.5 )%     (59.8 )%
    Total operating income $ 9.7     $ 4.6     $ 151.4       110.9 %     (93.6 )%
    Operating income (loss) as a % of revenue                          
    HPA   8.8 %     3.8 %     17.0 %     5.0 ppt       (8.2) ppt  
    CSG   (6.1 )     (17.0 )     (26.7 )     10.9 ppt       20.6 ppt  
    ACG   28.6       18.1       33.5       10.5 ppt       (4.9) ppt  
    Total operating income as a % of revenue   0.9 %     0.5 %     13.7 %     0.4 ppt       (12.8) ppt  

    (1) Includes stock-based compensation expense, amortization of intangible assets, restructuring-related charges, acquisition and integration-related costs, goodwill and other asset impairments, gain or loss on assets, other expense or income, and other miscellaneous corporate overhead expenses.

    Non-GAAP Financial Measures

    In addition to disclosing financial results calculated in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains some or all of the following non-GAAP financial measures: (i) non-GAAP gross profit and gross margin, (ii) non-GAAP operating expenses, operating income and operating margin, (iii) non-GAAP net income, (iv) non-GAAP net income per diluted share, (v) free cash flow, (vi) EBITDA, (vii) non-GAAP return on invested capital (ROIC), and (viii) net debt or positive net cash. Each of these non-GAAP financial measures is either adjusted from GAAP results to exclude certain expenses or derived from multiple GAAP measures, which are outlined in the “Reconciliation of GAAP to Non-GAAP Financial Measures” tables, attached, and the “Additional Selected Non-GAAP Financial Measures and Reconciliations” tables, attached.

    In managing Qorvo’s business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures. In developing and monitoring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing gross margin and operating margin. In addition, management relies upon these non-GAAP financial measures to assess whether research and development efforts are at an appropriate level, and when making decisions about product spending, administrative budgets, and other operating expenses. Also, we believe that non-GAAP financial measures provide useful supplemental information to investors and enable investors to analyze the results of operations in the same way as management. We have chosen to provide this supplemental information to enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, and stock-based compensation expense, which may obscure trends in Qorvo’s underlying performance.

    We believe that these non-GAAP financial measures offer an additional view of Qorvo’s operations that, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of Qorvo’s results of operations and the factors and trends affecting Qorvo’s business. However, these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

    Our rationale for using these non-GAAP financial measures, as well as their impact on the presentation of Qorvo’s operations, are outlined below:

    Non-GAAP gross profit and gross margin. Non-GAAP gross profit and gross margin exclude amortization of intangible assets, stock-based compensation expense, restructuring-related charges, acquisition and integration-related costs, and certain other expense (income). We believe that exclusion of these costs in presenting non-GAAP gross profit and gross margin facilitates a useful evaluation of our historical performance and projected costs and the potential for realizing cost efficiencies.

    We view amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, and customer relationships, as items arising from pre-acquisition activities, determined at the time of an acquisition, rather than ongoing costs of operating Qorvo’s business. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangible assets is a static expense, which is not typically affected by operations during any particular period. Although we exclude the amortization of purchased intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting and contribute to revenue generation.

    We believe that presentation of non-GAAP gross profit and gross margin and other non-GAAP financial measures that exclude the impact of stock-based compensation expense assists management and investors in evaluating the period-over-period performance of Qorvo’s ongoing operations because (i) the expenses are non-cash in nature, and (ii) although the size of the grants is within our control, the amount of expense varies depending on factors such as short-term fluctuations in stock price volatility and prevailing interest rates, which can be unrelated to the operational performance of Qorvo during the period in which the expense is incurred and generally are outside the control of management. Moreover, we believe that the exclusion of stock-based compensation expense in presenting non-GAAP gross profit and gross margin and other non-GAAP financial measures is useful to investors to understand the impact of the expensing of stock-based compensation to Qorvo’s gross profit and gross margins and other financial measures in comparison to prior periods. We also believe that the adjustments to profit and margin related to restructuring-related charges, and acquisition and integration-related costs do not constitute part of Qorvo’s ongoing operations and therefore the exclusion of these items provides management and investors with better visibility into the actual costs required to generate revenues over time and facilitates a useful evaluation of our historical and projected performance. We believe disclosure of non-GAAP gross profit and gross margin has economic substance because the excluded expenses do not represent continuing cash expenditures and, as described above, we have little control over the timing and amount of the expenses in question.

    Non-GAAP operating expenses, operating income and operating margin. Non-GAAP operating expenses, operating income and operating margin exclude stock-based compensation expense, amortization of intangible assets, acquisition and integration-related costs, goodwill and other asset impairments, restructuring-related charges, (gain) loss on assets and certain other expense (income). We believe that presentation of a measure of operating expenses, operating income and operating margin that excludes amortization of intangible assets and stock-based compensation expense is useful to both management and investors for the same reasons as described above with respect to our use of non-GAAP gross profit and gross margin. We believe that acquisition and integration-related costs, goodwill and other asset impairments, restructuring-related charges, (gain) loss on assets and certain other expense (income) do not constitute part of Qorvo’s ongoing operations and therefore, the exclusion of these costs provides management and investors with better visibility into the actual costs required to generate revenues over time and facilitates a useful evaluation of our historical and projected performance. We believe disclosure of non-GAAP operating expenses, operating income and operating margin has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

    Non-GAAP net income and non-GAAP net income per diluted share. Non-GAAP net income and non-GAAP net income per diluted share exclude the effects of stock-based compensation expense, amortization of intangible assets, acquisition and integration-related costs, goodwill and other asset impairments, restructuring-related charges, (gain) loss on assets, certain other expense (income), gain or loss on investments, and also reflect an adjustment of income taxes. The income tax adjustment primarily represents the use of research and development tax credit carryforwards, deferred tax expense (benefit) items not affecting taxes payable, adjustments related to the deemed and actual repatriation of historical foreign earnings, non-cash expense (benefit) related to uncertain tax positions and other items unrelated to the current fiscal year or that are not indicative of our ongoing business operations. We believe that presentation of measures of net income and net income per diluted share that exclude these items is useful to both management and investors for the reasons described above with respect to non-GAAP gross profit and gross margin and non-GAAP operating expenses, operating income and operating margin. We believe disclosure of non-GAAP net income and non-GAAP net income per diluted share has economic substance because the excluded expenses are either unrelated to ongoing operations or do not represent current cash expenditures.

    Free cash flow. Qorvo defines free cash flow as net cash provided by operating activities during the period minus property and equipment expenditures made during the period, and free cash flow margin is calculated as free cash flow as a percentage of revenue. We use free cash flow as a supplemental financial measure in our evaluation of liquidity and financial strength. Management believes that this measure is useful as an indicator of our ability to service our debt, meet other payment obligations and make strategic investments. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statement of cash flows.

    EBITDA. Qorvo adjusts GAAP net income for interest expense, interest income, income tax expense (benefit), depreciation and intangible amortization expense, stock-based compensation and other charges that are not representative of Qorvo’s ongoing operations (including goodwill and other asset impairments, investment activity, acquisition-related costs and restructuring-related costs) when presenting EBITDA. Management believes that this measure is useful to evaluate our ongoing operations and as a general indicator of our operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges).

    Non-GAAP ROIC. Return on invested capital (ROIC) is a non-GAAP financial measure that management believes provides useful supplemental information for management and the investor by measuring the effectiveness of our operations’ use of invested capital to generate profits. We use ROIC to track how much value we are creating for our shareholders. Non-GAAP ROIC is calculated by dividing annualized non-GAAP operating income, net of an adjustment for income taxes (as described above), by average invested capital. Average invested capital is calculated by subtracting the average of the beginning balance and the ending balance of equity plus net debt, less certain goodwill.

    Net debt or positive net cash. Net debt or positive net cash is defined as unrestricted cash, cash equivalents and short-term investments minus any borrowings under our credit facility and the principal balance of our senior unsecured notes. Management believes that net debt or positive net cash provides useful information regarding the level of Qorvo’s indebtedness by reflecting cash and investments that could be used to repay debt.

    Inventory days on hand. Inventory days on hand is defined as (a) average net inventory for the period, divided by (b) the result of non-GAAP cost of goods sold for the period divided by the number of days in the period.

    Forward-looking non-GAAP financial measures. Our earnings release contains forward-looking free cash flow, gross margin, income tax rate and diluted earnings per share. We provide these non-GAAP measures to investors on a prospective basis for the same reasons (set forth above) that we provide them to investors on a historical basis. We are unable to provide a reconciliation of the forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures without unreasonable effort due to variability and difficulty in making accurate projections for items that would be required to be included in the GAAP measures, such as stock-based compensation, acquisition and integration-related costs, restructuring-related charges, gain or loss on assets, goodwill and other asset impairments, gain or loss on investments and the provision for income taxes, which could have a potentially significant impact on our future GAAP results.

    Limitations of non-GAAP financial measures. The primary material limitations associated with the use of non-GAAP financial measures as an analytical tool compared to the most directly comparable GAAP financial measures are these non-GAAP financial measures (i) may not be comparable to similarly titled measures used by other companies in our industry, and (ii) exclude financial information that some may consider important in evaluating our performance, thus limiting their usefulness as a comparative tool. We compensate for these limitations by providing full disclosure of the differences between these non-GAAP financial measures and the corresponding GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, to enable investors to perform their own analysis of our gross profit and gross margin, operating expenses, operating income, net income, net income per diluted share and net cash provided by operating activities. We further compensate for the limitations of our use of non-GAAP financial measures by presenting the corresponding GAAP measures more prominently.

    Qorvo will conduct a conference call at 5:00 p.m. ET today to discuss today’s press release. The conference call will be broadcast live over the Internet and can be accessed by any interested party at the following URL: https://ir.qorvo.com (under “Events & Presentations”). A telephone playback of the conference call will be available approximately two hours after the call’s completion and can be accessed by dialing 1-412-317-0088 and using the passcode 2723791. The playback will be available through the close of business November 5, 2024.

    About Qorvo

    Qorvo (Nasdaq:QRVO) supplies innovative semiconductor solutions that make a better world possible. We combine product and technology leadership, systems-level expertise and global manufacturing scale to quickly solve our customers’ most complex technical challenges. Qorvo serves diverse high-growth segments of large global markets, including automotive, consumer, defense & aerospace, industrial & enterprise, infrastructure and mobile. Visit www.qorvo.com to learn how our diverse and innovative team is helping connect, protect and power our planet.

    Qorvo is a registered trademark of Qorvo, Inc. in the U.S. and in other countries. All other trademarks are the property of their respective owners.

    This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, representations and contentions, and are not historical facts and typically are identified by terms such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “forecast”, “predict,” “potential,” “continue” and similar words, although some forward-looking statements are expressed differently. You should be aware that the forward-looking statements included herein represent management’s current judgment and expectations as of the date the statement is first made, but our actual results, events and performance could differ materially from those expressed or implied by forward-looking statements. We caution you not to place undue reliance upon any such forward-looking statements. We do not intend to update any of these forward-looking statements or publicly announce the results of any revisions to these forward-looking statements, other than as is required under U.S. federal securities laws. Our business is subject to numerous risks and uncertainties, including those relating to fluctuations in our operating results on a quarterly and annual basis; our substantial dependence on developing new products and achieving design wins; our dependence on several large customers for a substantial portion of our revenue; a loss of revenue if defense and aerospace contracts are canceled or delayed; our dependence on third parties; risks related to sales through distributors; risks associated with the operation of our manufacturing facilities; business disruptions; poor manufacturing yields; increased inventory risks and costs, due to timing of customers’ forecasts; our inability to effectively manage or maintain relationships with chipset suppliers; our ability to continue to innovate in a very competitive industry; underutilization of manufacturing facilities; unfavorable changes in interest rates, pricing of certain precious metals, utility rates and foreign currency exchange rates; our acquisitions, divestitures and other strategic investments failing to achieve financial or strategic objectives; our ability to attract, retain and motivate key employees; warranty claims, product recalls and product liability; changes in our effective tax rate; enactment of international or domestic tax legislation, or changes in regulatory guidance; changes in the favorable tax status of certain of our subsidiaries; risks associated with social, environmental, health and safety regulations, and climate change; risks from international sales and operations; economic regulation in China; changes in government trade policies, including imposition of tariffs and export restrictions; we may not be able to generate sufficient cash to service all of our debt; restrictions imposed by the agreements governing our debt; our reliance on our intellectual property portfolio; claims of infringement of third-party intellectual property rights; security breaches, failed system upgrades or regular maintenance and other similar disruptions to our IT systems; theft, loss or misuse of personal data by or about our employees, customers or third parties; provisions in our governing documents and Delaware law may discourage takeovers and business combinations that our stockholders might consider to be in their best interests; and volatility in the price of our common stock. These and other risks and uncertainties, which are described in more detail under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 30, 2024, and Qorvo’s subsequent reports and statements that we file with the SEC, could cause actual results and developments to be materially different from those expressed or implied by any of these forward-looking statements.

    Financial Tables to Follow

    QORVO, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
    (Unaudited)
     
      Three Months Ended   Six Months Ended
      September 28, 2024   September 30, 2023   September 28, 2024   September 30, 2023
    Revenue $ 1,046,509     $ 1,103,493     $ 1,933,180     $ 1,754,657  
                   
    Costs and expenses:              
    Cost of goods sold   601,203       613,803       1,155,570       1,035,897  
    Research and development   201,050       174,947       388,652       338,037  
    Selling, general and administrative   107,760       103,696       222,683       209,119  
    Other operating expense   126,821       59,619       151,994       68,312  
    Total costs and expenses   1,036,834       952,065       1,918,899       1,651,365  
                   
    Operating income   9,675       151,428       14,281       103,292  
    Interest expense   (22,594 )     (17,121 )     (39,688 )     (34,382 )
    Other income, net   15,422       5,211       27,187       18,927  
                   
    Income before income taxes   2,503       139,518       1,780       87,837  
    Income tax expense   (19,938 )     (42,057 )     (18,801 )     (33,956 )
    Net (loss) income $ (17,435 )   $ 97,461     $ (17,021 )   $ 53,881  
                   
    Net (loss) income per share:              
    Basic $ (0.18 )   $ 1.00     $ (0.18 )   $ 0.55  
    Diluted $ (0.18 )   $ 0.99     $ (0.18 )   $ 0.54  
                   
    Weighted-average shares of common stock outstanding:              
    Basic   94,886       97,945       95,116       98,167  
    Diluted   94,886       98,590       95,116       98,892  
    QORVO, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    (In thousands, except per share data)
    (Unaudited)
     
      Three Months Ended
      September 28, 2024   June 29, 2024   September 30, 2023
               
    GAAP operating income $ 9,675     $ 4,606     $ 151,428  
    Stock-based compensation expense   38,181       42,366       39,053  
    Amortization of intangible assets   29,482       30,474       29,963  
    Restructuring-related charges   34,396       19,574       8,418  
    Acquisition and integration-related costs   1,211       2,582       852  
    Goodwill impairment   96,458       —       48,000  
    Other expense (income)   2,811       (1,477 )     1,712  
    Non-GAAP operating income $ 212,214     $ 98,125     $ 279,426  
               
    GAAP net (loss) income $ (17,435 )   $ 414     $ 97,461  
    Stock-based compensation expense   38,181       42,366       39,053  
    Amortization of intangible assets   29,482       30,474       29,963  
    Restructuring-related charges   34,396       19,574       8,418  
    Acquisition and integration-related costs   1,211       2,582       852  
    Goodwill impairment   96,458       —       48,000  
    Other expense (income)   379       (3,446 )     2,616  
    Loss on investments   780       2,499       1,574  
    Adjustment of income taxes   (3,611 )     (10,939 )     7,576  
    Non-GAAP net income $ 179,841     $ 83,524     $ 235,513  
               
    GAAP weighted-average outstanding diluted shares   94,886       96,510       98,590  
    Dilutive stock-based awards   867       —       —  
    Non-GAAP weighted-average outstanding diluted shares   95,753       96,510       98,590  
               
    Non-GAAP net income per share, diluted $ 1.88     $ 0.87     $ 2.39  
    QORVO, INC. AND SUBSIDIARIES
    RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
    (Unaudited)
     
      Three Months Ended
    (in thousands, except percentages) September 28, 2024   June 29, 2024   September 30, 2023
    GAAP gross profit/margin $ 445,306       42.6 %   $ 332,304       37.5 %   $ 489,690       44.4 %
    Stock-based compensation expense   6,047       0.6       5,186       0.6       7,481       0.7  
    Amortization of intangible assets   25,523       2.4       25,827       2.9       25,591       2.3  
    Restructuring-related charges   15,414       1.4       —       —       2,482       0.2  
    Acquisition and integration-related costs   636       0.1       1,925       0.2       1       —  
    Other income   (885 )     (0.1 )     (2,586 )     (0.3 )     —       —  
    Non-GAAP gross profit/margin $ 492,041       47.0 %   $ 362,656       40.9 %   $ 525,245       47.6 %
      Three Months Ended
    Non-GAAP Operating Income September 28, 2024
    (as a percentage of revenue)  
       
    GAAP operating income   0.9 %
    Stock-based compensation expense   3.7  
    Amortization of intangible assets   2.8  
    Restructuring-related charges   3.3  
    Acquisition and integration-related costs   0.1  
    Goodwill impairment   9.2  
    Other expense   0.3  
    Non-GAAP operating income   20.3 %
      Three Months Ended
    Free Cash Flow(1) September 28, 2024
    (in millions)  
       
    Net cash provided by operating activities $ 127.8  
    Purchases of property and equipment   (33.0 )
    Free cash flow $ 94.8  

    (1) Free Cash Flow is calculated as net cash provided by operating activities minus property and equipment expenditures.

    QORVO, INC. AND SUBSIDIARIES
    ADDITIONAL SELECTED NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS
    (In thousands)
    (Unaudited)
     
      Three Months Ended
      September 28, 2024   June 29, 2024   September 30, 2023
    GAAP research and development expense $ 201,050     $ 187,602     $ 174,947  
    Less:          
    Stock-based compensation expense   13,468       12,727       11,519  
    Acquisition and integration-related costs   2       2       2  
    Non-GAAP research and development expense $ 187,580     $ 174,873     $ 163,426  
               
      Three Months Ended
      September 28, 2024   June 29, 2024   September 30, 2023
    GAAP selling, general and administrative expense $ 107,760     $ 114,923     $ 103,696  
    Less:          
    Stock-based compensation expense   18,488       24,322       20,030  
    Amortization of intangible assets   3,959       4,647       4,372  
    Acquisition and integration-related costs   1       —       —  
    Non-GAAP selling, general and administrative expense $ 85,312     $ 85,954     $ 79,294  
               
      Three Months Ended
      September 28, 2024   June 29, 2024   September 30, 2023
    GAAP other operating expense $ 126,821     $ 25,173     $ 59,619  
    Less:          
    Stock-based compensation expense   178       131       23  
    Restructuring-related charges   18,982       19,574       5,936  
    Acquisition and integration-related costs   572       655       849  
    Goodwill impairment   96,458       —       48,000  
    Other expense   3,696       1,109       1,712  
    Non-GAAP other operating expense $ 6,935     $ 3,704     $ 3,099  
               
      Three Months Ended
      September 28, 2024   June 29, 2024   September 30, 2023
    GAAP total operating expense $ 435,631     $ 327,698     $ 338,262  
    Less:          
    Stock-based compensation expense   32,134       37,180       31,572  
    Amortization of intangible assets   3,959       4,647       4,372  
    Restructuring-related charges   18,982       19,574       5,936  
    Acquisition and integration-related costs   575       657       851  
    Goodwill impairment   96,458       —       48,000  
    Other expense   3,696       1,109       1,712  
    Non-GAAP total operating expense $ 279,827     $ 264,531     $ 245,819  
    QORVO, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (Unaudited)
     
      September 28, 2024   March 30, 2024
    ASSETS      
    Current assets:      
    Cash and cash equivalents $ 1,096,452     $ 1,029,258  
    Accounts receivable, net   580,963       412,960  
    Inventories   694,457       710,555  
    Other current assets   160,587       133,983  
    Assets of disposal group held for sale   —       159,278  
    Total current assets   2,532,459       2,446,034  
           
    Property and equipment, net   846,540       870,982  
    Goodwill   2,437,790       2,534,601  
    Intangible assets, net   445,715       509,383  
    Long-term investments   24,804       23,252  
    Other non-current assets   215,767       170,383  
    Total assets $ 6,503,075     $ 6,554,635  
           
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Current liabilities:      
    Accounts payable and accrued liabilities $ 675,581     $ 589,760  
    Current portion of long-term debt   412,179       438,740  
    Other current liabilities   245,977       113,215  
    Liabilities of disposal group held for sale   —       88,372  
    Total current liabilities   1,333,737       1,230,087  
           
    Long-term debt   1,549,244       1,549,272  
    Other long-term liabilities   209,925       218,904  
    Total liabilities   3,092,906       2,998,263  
           
    Stockholders’ equity   3,410,169       3,556,372  
    Total liabilities and stockholders’ equity $ 6,503,075     $ 6,554,635  

    At Qorvo®
    Doug DeLieto
    VP, Investor Relations
    1.336.678.7968

    The MIL Network –