Posts

Posted on

Velocity Financial, Inc. Announces Third Quarter 2020 Results

Velocity Financial, Inc. Announces Third Quarter 2020 Results

Third Quarter Highlights:

  • Net income of $3.5 million, core earnings of $3.9 million(1) and diluted EPS of $0.11

    • Net income growth of 63% from the prior quarter primarily driven by normalization of credit loss provision expense

      • Normalized provision expense of $0.4 million.
  • Restarted loan production activities in September to strong demand

    • September loan applications totaled $226 million in unpaid principal balance (UPB), mirroring pre-COVID levels; loan production totaled $8 million in UPB
    • October loan originations totaled $63 million in UPB
  • Book value per common share as of September 30, 2020, was $10.44 compared to $10.26 as of June 30, 2020
  • Portfolio net interest margin of 3.77%, an increase of 23 basis points from the second quarter of 2020
  • Approximately $335 million in UPB of loans in the COVID-19 forbearance program were brought current during the quarter
  • Resolutions of delinquent loans in 3Q20 were 103.5% of assets resolved, continuing our consistent track record of net gains on delinquent loan and real estate owned (REO) resolutions over and above contractual principal and interest

WESTLAKE VILLAGE, Calif.–(BUSINESS WIRE)–
Velocity Financial, Inc. (NYSE: VEL) (“Velocity” or the “Company”) reported net income of $3.5 million for the third quarter of 2020 and diluted earnings per common share of $0.11. Core income(1) for the third quarter of 2020 was $3.9 million, excluding severance costs related to workforce reductions. Book value per common share was $10.44, an increase from $10.26 as of June 30, 2020.

“Velocity’s third quarter results highlight the significant progress our team has made in normalizing business operations and improving earnings performance,” said Chris Farrar, President and CEO. “The strong volumes we have experienced with the restart of our loan production activities have exceeded our expectations and reflect significant demand for the financing solutions we provide. We believe that opportunities for Velocity have expanded due to fundamental shifts in real estate markets, which have helped fuel heightened interest from our existing brokers and driven the recent addition of nearly four hundred new relationships. With the restart of our production operations, our business is back on track and poised to deliver strong performance and attractive returns going forward.”

Third Quarter Operating Results
 
KEY PERFORMANCE INDICATORS
($ in thousands)

 

3Q 2020

 

 

2Q 2020

 

$ Variance

% Variance
Pretax income

$

5,025

 

$

2,625

 

$

2,400

 

91

%

Net income

$

3,481

 

$

2,141

 

$

1,340

 

63

%

Preferred stock deemed dividend(1)

 

–

 

$

(48,955

)

 

n.a.

 

n.a.

 

Basic earnings (loss) per share

$

0.17

 

$

(2.33

)

$

2.5

 

n.a.

 

Diluted earnings (loss) per share

$

0.11

 

$

(2.33

)

$

2.4

 

n.a.

 

Core Earnings(2)

$

3,913

 

$

3,408

 

$

505

 

15

%

Pretax return on equity

 

9.60

%

 

4.94

%

 

n.a.

 

94

%

Return on equity

 

6.60

%

 

4.03

%

 

n.a.

 

64

%

Net interest margin – portfolio

 

3.77

%

 

3.54

%

 

n.a.

 

6

%

Net interest margin -total company

 

3.39

%

 

3.18

%

 

n.a.

 

7

%

Average common equity

$

209,468

 

$

212,407

 

$

(2,939

)

(1

)%

 
(1) Charged against common equity
(2) Core earnings is a non-GAAP measure. Please see the reconciliation to GAAP net income at the end of this release.

Discussion of results:

  • 3Q20 net income of $3.5 million reflects continued improvement in Velocity’s platform as it recovers from the COVID-driven market dislocation earlier this year
  • The difference between core earnings(1) and GAAP net income is severance costs related to workforce reduction resulting from streamlining of our loan operations processes
  • Net interest margin improvement was driven by fewer new nonperforming loans during 3Q20
TOTAL LOAN PORTFOLIO
($ of UPB in millions)

 

3Q 2020

 

 

2Q 2020

 

$ Variance

% Variance
Held for Investment
Investor 1-4 Rental

$

1,008

 

$

841

 

$

166

 

20

%

Mixed Use

 

254

 

 

260

 

 

(5

)

(2

)%

Multi-Family

 

187

 

 

193

 

 

(6

)

(3

)%

Retail

 

173

 

 

178

 

 

(5

)

(3

)%

All Other

 

364

 

 

373

 

 

(9

)

(2

)%

Total

$

1,986

 

$

1,845

 

$

142

 

8

%

Held for Sale
Investor 1-4 Rental

$

–

 

$

214

 

$

(214

)

(100

)%

Total Managed Loan Portfolio UPB

$

1,986

 

$

2,059

 

$

(73

)

(4

)%
Key loan portfolio metrics:
Total loan count

 

6,029

 

 

6,294

 

Weighted average loan to value

 

66.18

%

 

65.86

%

Weighted average total portfolio yield

 

8.21

%

 

7.59

%

Weighted average portfolio debt cost

 

5.07

%

 

4.63

%

Discussion of results:

  • The weighted average total portfolio yield was 8.21% in 3Q20, an increase of 62 basis points from 2Q20, primarily driven by fewer new NPLs
  • The 44 basis point increase in portfolio related debt cost was primarily attributable to the higher cost 2020-2 and 2020-MC1 securitizations, completed in June and July, respectively
  • Velocity’s loan portfolio was $1.986 billion as of September 30, 2020, a 4% quarter-over-quarter decrease from June 30, 2020
  • Transferred approximately $214 million in UPB of short-term loans to the held for investment (HFI) portfolio during 3Q20. Previously these loans were accounted for as held for sale (HFS).
LOAN PRODUCTION VOLUMES
($ in millions) Oct. 2020 Sept. 2020 $ Variance % Variance
Investor 1-4 Rental

$

47

$

6

$

40

656

%

Traditional Perm.

 

16

 

2

 

14

733

%

Short-term loans

 

–

 

–

 

–

–

 

Total loan production

$

63

$

8

$

55

674

%

Note: Loan production operations were suspended in late March 2020 and resumed in September 2020.

Discussion of results:

  • Velocity resumed loan production activities in September, funding $8 million in UPB of 30-year Investor 1-4 and Traditional Commercial loans in 3Q20

    • The relaunch has been met with strong demand from existing broker relationships and the addition of 396 new broker registrations resulted in $226 million in UPB of loan applications
  • Loan application volume in October totaled $252 million in UPB, and production volume totaled $63 million in UPB
CREDIT PERFORMANCE INDICATORS
($ in thousands)

 

3Q 2020

 

 

2Q 2020

 

$ Variance

% Variance
Nonperforming loans(1)

$

314,727

 

$

329,132

 

$

(14,405

)

(4

)%

Nonperforming loans % total HFI Loans

 

15.84

%

 

15.99

%

 

–

 

(1

)%

Total Charge Offs(2)

$

1,046

 

$

75

 

$

971

 

n.a.

 

Charge-offs as a % of HFI loans

 

0.053

%

 

0.004

%

 

–

 

n.a.

 

CECL Reserve

$

5,748

 

$

5,221

 

$

527

 

10

%

 
(1) Nonperforming/Nonaccrual loans include loans 90+ days past due, loans in foreclosure and in bankruptcy.
(2) $788 thousand of 3Q 2020 is related to an unusual and nonrecurring charge-off due to a fraud loan and not related to COVID-19 pandemic.

Discussion of results:

  • Nonperforming loans as a percent of total loans as of September 30, 2020, decreased to 15.84% from 15.99% as of June 30, 2020, driven by:

    • Continued strong nonperforming asset resolution activity and fewer new nonperforming loans
  • The quarter-over-quarter increase in charge-offs was primarily due to one loan totaling $787 thousand, resulting from an unusual circumstance not indicative of worsening credit conditions

    • Adjusted for the unusual circumstance loan, 3Q20 charge-offs were $259 thousand and in-line with historical levels
  • The CECL reserve increase in 3Q20 was driven a $1.6 million loan loss provision, $1.2 million of which was related to the transfer of short-term loans to the HFI portfolio, with the remainder related to normal provisioning
NET REVENUES
($ in thousands)

 

3Q 2020

 

 

2Q 2020

 

$ Variance % Variance
Interest income

$

41,374

 

$

39,755

 

$

1,619

 

4

%

Interest expense – portfolio related

 

(22,347

)

 

(21,189

)

 

(1,158

)

5

%

Interest expense – corporate debt

 

(1,913

)

 

(1,894

)

 

(19

)

1

%

Net Interest Income

$

17,114

 

$

16,672

 

$

442

 

3

%
CECL provision

 

(1,573

)

 

(1,800

)

 

227

 

(13

)%

Gain on loan sales

 

(51

)

 

155

 

 

(206

)

(133

)%

Other Operating (loss) income

 

1,400

 

 

(1,494

)

 

2,894

 

n.a.

 

Total Net Revenues

$

16,890

 

$

13,533

 

$

3,357

 

25

%

CECL Reserve Reconciliation (Balance Sheet):

 

3Q 2020

 

($ in thousands)
Beginning Balance 6/30/2020

$

(5,220

)

 
Add: Reserve for short-term loans transferred to HFI

 

(1,166

)

3Q20 CECL provision

 

(407

)

Deduct: 3Q20 charge-offs

 

1,046

 

 
Ending Balance 9/30/2020

$

(5,748

)
 
Income Statement (HFS to HFI Reclass):

 

3Q 2020

 

 
Interest Income
Provision for Loan Loss

$

(1,166

)

 
Other Income
Reversal of HFS LOCOM Valuation

 

1,307

 

 
Net P&L Impact

$

141

 

 

Discussion of results:

  • Net Revenue grew by 25% quarter-over-quarter, driven by normalized loan loss provisioning levels and increased interest collections on nonperforming loans
  • Approximately $1.2 million of the reported $1.6 million total provision expense was offset by a $1.3 million LOCOM valuation reversal in other income driven by the transfer HFS loans to the HFI portfolio, resulting in a net P&L increase of $0.1 million
OPERATING EXPENSES
($ in thousands)

 

3Q 2020

 

2Q 2020

 $ Variance % Variance
Compensation and employee benefits

$

5,692

$

5,863

$

(171

)

(3

)%

Rent and occupancy

 

415

 

448

 

(33

)

(7

)%

Loan servicing

 

2,168

 

1,754

 

414

 

24

%

Professional fees

 

1,051

 

588

 

463

 

79

%

Real estate owned, net

 

898

 

408

 

490

 

120

%

Other expenses

 

1,641

 

1,847

 

(206

)

(11

)%

Total expenses

$

11,865

$

10,908

$

957

 

9

%

Discussion of results:

  • Operating expenses increased $1.0 million due to loans servicing expense growth resulting from higher securitized loan balances, legal fees related to pending litigation, and REO expenses
SECURITIZATIONS
Securities Balance at
Trusts Issued 9/30/2020 W.A. Rate
2011-1 Trust

$

61,042

$

–

–

2014-1 Trust

 

161,076

 

25,599

6.97%

2015-1 Trust

 

285,457

 

41,190

7.52%

2016-1 Trust

 

319,809

 

62,339

7.54%

2016-2 Trust

 

166,853

 

46,984

6.40%

2017-1 Trust

 

211,910

 

80,174

5.08%

2017-2 Trust

 

245,601

 

138,456

3.34%

2018-1 Trust

 

176,816

 

110,262

4.02%

2018-2 Trust

 

307,988

 

208,206

4.51%

2019-1 Trust

 

235,580

 

192,856

4.05%

2019-2 Trust

 

207,020

 

168,819

3.42%

2019-3 Trust

 

154,419

 

132,893

3.25%

2020-1 Trust

 

248,700

 

233,005

2.84%

2020-2 Trust

 

96,352

 

94,113

4.48%

2020-MC1 Trust

 

179,371

 

162,173

4.50%

$

3,057,994

$

1,697,069
 

Discussion of results:

  • In July, the Company issued its third securitization of the year (VCC 2020-MC1) for $179 million at a rate of 4.50%. The VCC 2020- MC1 securitization was collateralized primarily by short-term loans secured by 1-4 unit investor properties, in addition to 30-year loans secured by residential 1-4 unit investor and small commercial properties originated through Velocity’s operating platform.
  • Expect to complete Velocity’s next securitization in the first quarter of 2021, backed by newly originated 30-year loans
RESOLUTION ACTIVITY THIRD QUARTER 2020 SECOND QUARTER 2020
($ in thousands) UPB $ Gain / (Loss) $ UPB $ Gain / (Loss) $
Paid in full

$

9,705

$

728

 

$

6,658

$

336

 

Paid current

 

1,152

 

24

 

 

19,635

 

208

 

REO sold

 

1,628

 

(312

)

 

1,406

 

38

 

$

12,485

$

440

 

$

27,699

$

582

 

 
Resolutions as a % of nonperforming UPB

 

103.5

%

 

102.1

%

Discussion of results:

  • Strong asset resolution trends continued in 3Q20, realizing gains of $440 thousand, or 103.5% of nonperforming UPB resolved during the quarter

Conference Call Information

The Company will host a webcast to discuss the third quarter 2020 results on November 11, 2020 at 5:00 p.m. Eastern Time. Listeners can access the webcast via the link below:

https://services.choruscall.com/links/vel201111roBZnCkl.html

The earnings discussion can also be accessed by dialing 1-866-807-9684 in the U.S. and Canada. International callers must dial 1-412-317-5415. Callers should ask to be joined into the Velocity Financial, Inc. earnings call. To listen to the webcast, please go to Velocity’s website at least 15 minutes before the call to register and to download and install any needed software.

Management’s slide presentation will be available on the Company’s Investor Relations website at www.velfinance.com after the market close on Wednesday, November 11, 2020.

A replay of the call will be available through midnight on November 18, 2020 and can be accessed by dialing 1-877-344-7529 in the U.S. and 855-669-9658 in Canada or 1-412-317-0088 internationally and entering access code #10148332. The replay will also be available on the Investor Relations section of the Company’s website under “Events and Presentations.”

About Velocity Financial, Inc.

Based in Westlake Village, California, Velocity is a vertically integrated real estate finance company that primarily originates and manages investor loans secured by 1-4-unit residential rental and small commercial properties. Velocity originates loans nationwide across an extensive network of independent mortgage brokers it has built and refined over 15 years.

(1)

 

 

Core Earnings is a non-GAAP financial measures the Company presents to help investors better understand unique items that impact earnings. For a reconciliation of GAAP EPS to Core Earnings, please refer to the sections of this press release titled “Non-GAAP Financial Measures” and “Adjusted Financial Metric Reconciliation to GAAP Net Income.”

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with United States generally accepted accounting principles (“GAAP”), the Company uses Core Earnings, which is a non-GAAP financial measure. For more information on Core Earnings, please refer to the section of this press release below titled “Adjusted Financial Metric Reconciliation to GAAP Net Income” at the end of this press release.

Forward-Looking Statements

Some of the statements contained in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to anticipated results, expectations, projections, plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “goal,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this press release reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. While forward-looking statements reflect our good faith projections, assumptions and expectations, they are not guarantees of future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. Factors that could cause our results to differ materially include, but are not limited to, (1) the continued course and severity of the COVID-19 pandemic, and its direct and indirect impacts, (2) general economic and real estate market conditions, (3) regulatory and/or legislative changes, (4) our customers’ continued interest in loans and doing business with us, (5) market conditions and investor interest in our contemplated securitization and (6) changes in federal government fiscal and monetary policies.

Additional information relating to these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements can be found in the section titled ‘‘Risk Factors” in our Form 10-Q filed with the SEC on May 14, 2020, as well as other cautionary statements we make in our current and periodic filings with the SEC. Such filings are available publicly on our Investor Relations web page at www.velfinance.com.

Velocity Financial, Inc.

Consolidated Statements of Financial Condition

(Unaudited)
 
Quarter Ended
9/30/2020 6/30/2020 3/31/2020 12/31/2019 09/30/2019
(In thousands)
Assets
Cash and cash equivalents

$

19,210

$

9,803

$

7,649

$

21,465

$

8,849

Restricted cash

 

7,821

 

6,735

 

4,483

 

6,087

 

3,152

Total loans, net

 

2,004,413

 

2,077,119

 

2,148,595

 

2,080,787

 

1,949,311

Accrued interest receivables

 

13,134

 

17,793

 

14,470

 

13,295

 

12,450

Receivables due from servicers

 

44,466

 

36,028

 

37,884

 

49,659

 

38,349

Other receivables

 

402

 

4,609

 

2,516

 

4,778

 

7,585

Real estate owned, net

 

14,653

 

15,648

 

16,164

 

13,068

 

15,806

Property and equipment, net

 

4,446

 

4,718

 

4,964

 

4,680

 

4,903

Deferred tax asset

 

1,832

 

5,556

 

10,111

 

8,280

 

4,127

Other assets

 

16,489

 

9,042

 

10,519

 

12,667

 

17,219

Total Assets

$

2,126,866

$

2,187,051

$

2,257,354

$

2,214,766

$

2,061,751
 
Liabilities and members’ equity
Accounts payable and accrued expenses

$

61,859

$

55,938

$

58,591

$

56,146

$

41,957

Secured financing, net

 

74,776

 

74,571

 

74,364

 

145,599

 

145,285

Securitizations, net

 

1,670,930

 

1,599,719

 

1,576,431

 

1,438,629

 

1,377,733

Warehouse & repurchase facilities

 

19,541

 

160,796

 

297,537

 

421,548

 

349,115

Total Liabilities

 

1,827,106

 

1,891,024

 

2,006,924

 

2,061,922

 

1,914,090

 
Mezzanine Equity
Series A Convertible preferred stock

 

90,000

 

90,000

 

–

 

–

 

–

Stockholders’ Equity
Stockholders’ equity

 

209,760

 

206,027

 

250,430

 

152,844

 

147,661

Total Liabilities and members’ equity

$

2,126,866

$

2,187,051

$

2,257,354

$

2,214,766

$

2,061,751
 
 
Book value per share

$

10.44

$

10.26

$

12.47

n.a. n.a.
 
Shares outstanding

 

20,087

 

20,087

 

20,087

n.a. n.a.

Velocity Financial, Inc.

Consolidated Statements of Income

(Unaudited)
 
Quarter Ended
($ in thousands) 9/30/2020 6/30/2020 3/31/2020 12/31/2019 09/30/2019
 
Revenues
Interest income

$

41,374

$

39,755

 

$

44,637

$

44,124

$

40,379

 

Interest expense – portfolio related

 

22,347

 

21,189

 

 

22,848

 

22,689

 

21,827

 

Net interest income – portfolio related

 

19,027

 

18,566

 

 

21,789

 

21,435

 

18,552

 

Interest expense – corporate debt

 

1,913

 

1,894

 

 

6,342

 

4,070

 

3,842

 

Net interest income

 

17,114

 

16,672

 

 

15,447

 

17,365

 

14,710

 

Provision for loan losses

 

1,573

 

1,800

 

 

1,289

 

242

 

338

 

Net interest income after provision for loan losses

 

15,541

 

14,872

 

 

14,157

 

17,123

 

14,372

 

Other operating income (expense)

 

1,349

 

(1,339

)

 

1,620

 

833

 

(212

)

Total net revenues

 

16,890

 

13,533

 

 

15,777

 

17,956

 

14,160

 

 
Operating expenses
Compensation and employee benefits

 

5,692

 

5,863

 

 

5,041

 

3,992

 

3,712

 

Rent and occupancy

 

415

 

448

 

 

455

 

426

 

369

 

Loan servicing

 

2,168

 

1,754

 

 

2,239

 

1,939

 

1,957

 

Professional fees

 

1,051

 

588

 

 

1,184

 

469

 

398

 

Real estate owned, net

 

898

 

408

 

 

1,134

 

1,300

 

485

 

Other operating expenses

 

1,641

 

1,847

 

 

1,998

 

1,688

 

1,563

 

Total operating expenses

 

11,865

 

10,908

 

 

12,051

 

9,814

 

8,484

 

Income before income taxes

 

5,025

 

2,625

 

 

3,727

 

8,142

 

5,676

 

Income tax expense

 

1,544

 

484

 

 

1,148

 

2,960

 

1,796

 

Net income

$

3,481

$

2,141

 

$

2,579

$

5,182

$

3,880

 

Less deemed dividends on preferreds stock

$

48,955

 

Net loss allocated to common shareholders

$

(46,814

)
 
Basic earnings (loss) per share

$

0.17

$

(2.33

)

$

0.13

 n.a. n.a.
 
Diluted earnings (loss) per common share

$

0.11

$

(2.33

)

$

0.13

 n.a. n.a.
 
Basic weighted average common shares outstanding

 

20,087

 

20,087

 

 

20,087

n.a. n.a.
 
Diluted weighted average common shares outstanding

 

32,435

 

20,087

 

 

20,087

n.a. n.a.

Velocity Financial, Inc.

Net Interest Margin ‒ Portfolio Related and Total Company

(Unaudited)
 

Quarter Ended September 30, 2020

Quarter Ended June 30, 2020

Quarter Ended September 30, 2019
Interest Average Interest Average Interest Average
Average Income / Yield / Average Income / Yield / Average Income / Yield /
($ in thousands) Balance Expense Rate(1) Balance Expense Rate(1) Balance Expense Rate(1)
Loan portfolio:
Loans held for sale

$

–

$

220,047

$

122,763

Loans held for investment

 

2,016,414

 

1,875,260

 

1,703,377

Total loans

$

2,016,414

$

41,374

8.21

%

$

2,095,307

$

39,755

7.59

%

 

1,826,140

$

40,379

8.84

%

 
Debt:
Warehouse and repurchase facilities

$

22,306

 

703

12.61

%

$

242,676

 

2,632

4.34

%

 

246,532

 

3,527

5.72

%

Securitizations

 

1,742,669

 

21,645

4.97

%

 

1,589,191

 

18,557

4.67

%

 

1,401,930

 

18,301

5.22

%

Total debt – portfolio related

 

1,764,975

 

22,348

5.07

%

 

1,831,867

 

21,189

4.63

%

 

1,648,462

 

21,828

5.30

%

Corporate debt

 

78,000

 

1,913

9.81

%

 

78,000

 

1,895

9.72

%

 

136,882

 

3,842

11.23

%

Total debt

$

1,842,975

$

24,261

5.27

%

$

1,909,867

$

23,084

4.83

%

 

1,785,344

 

25,670

5.75

%

 
Net interest spread – portfolio related (1)

3.14

%

2.96

%

3.55

%

Net interest margin – portfolio related

3.77

%

3.54

%

4.06

%

 
Net interest spread – total company (2)

2.94

%

2.75

%

3.09

%

Net interest margin – total company

3.39

%

3.18

%

3.22

%

 
(1) Net interest spread – portfolio related is the difference between the rate earned on our loan portfolio and the interest rates paid on our portfolio related debt.
(2) Net interest spread – total company is the difference between the yield on our loan portfolio and the interest rates paid on our total debt.

Velocity Financial, Inc.

Adjusted Financial Metric Reconciliation to GAAP Net Income

(Unaudited)
 
“CORE” EARNINGS PER SHARE
Quarter Ended
($ in thousands) 9/30/2020 6/30/2020
 
Net Income

$

3,481

$

2,141
COVID-19 Impact

 

1,267

Workforce reduction costs

 

432

 

–

“Core” Earnings

$

3,913

$

3,408
 
Diluted weighted average common shares outstanding

$

32,435

$

20,087

 

Investors and Media:

Chris Oltmann

(818) 532-3708

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Finance Professional Services Residential Building & Real Estate Commercial Building & Real Estate Construction & Property

MEDIA:

Logo
Logo
Posted on

Beyond Air® Reports Financial Results for Second Quarter of Fiscal Year 2021 and Provides Business Update

Submitted
a
premarket approval (
PMA
)
to the FDA
for LungFit™
 PH to treat persistent pulmonary hypertension of the newborn (PPHN)

Expect patient enrollment to b
eg
i
n
next week
for the
acute viral pneumonia
(including SARS-CoV-2)
study; Patients will be treated with 150 ppm nitric oxide with
LungFit™ PRO

LungFit™ GO nontuberculous mycobacteria (NTM) lung infection at-home pilot study expected to startin December 2020

Conference
c
all scheduled for
today,
November 1
1

th

at
4
:
30
p
m
ET

GARDEN CITY, N.Y., Nov. 11, 2020 (GLOBE NEWSWIRE) — Beyond Air, Inc. (NASDAQ: XAIR), a clinical-stage medical device and biopharmaceutical company focused on developing inhaled nitric oxide (NO) for the treatment of patients with respiratory conditions, including serious lung infections and pulmonary hypertension, and gaseous NO (gNO) for the treatment of solid tumors, today announced financial results for its second fiscal quarter ended September 30, 2020.

“Over the past few months we have achieved several significant milestones, both regulatory and clinical, across our development pipeline. Most notably, we filed a PMA for the LungFit™ PH system for the treatment of PPHN, which will be subject to the standard 180-day FDA review. If approved, LungFit™ PH will be our first commercially available product from the LungFit™ platform technology that generates nitric oxide from ambient air. I am very proud and humbled by the resilience and execution of the Beyond Air team, as we have faced many pandemic related setbacks. We are now on a clear path towards recognizing the potential of our LungFit™ platform for the treatment of respiratory conditions with the goal of improving the lives of patients,” said Steve Lisi, Chairman and Chief Executive Officer of Beyond Air.

“As the coronavirus pandemic continues to adversely affect everyday life in the United States and around the world, the Beyond Air team has adapted. Site initiation visits are ongoing for the acute viral pneumonia study, which includes patients infected with SARS-CoV-2, and we have overcome significant logistical challenges with our at-home NTM lung infection study, which is expected to begin next month. The team also identified a new opportunity in the development pipeline for ultra-high concentration gNO to treat solid tumors. This program has generated exciting preclinical data demonstrating the conveyance of tumor immunity to the host, which we have presented at three different major medical and scientific conferences this year. We believe this new approach has the potential to elicit a paradigm shift in the standard of care for solid tumors and their metastases, which are responsible for approximately 90% of all cancer-related deaths,” concluded Mr. Lisi.

Fiscal
Second
Quarter and
Recent Highlights

• LungFit™ PH

  • Submitted a PMA for LungFit™ PH to the FDA for the treatment of PPHN, which will be subject to the standard 180-day review process

• LungFit™ P
RO

  • Received all necessary approvals to perform our acute viral pneumonia study in Israel using the LungFit™ PRO at 150 ppm nitric oxide
  • Presented promising in vitro data using OC43 human coronavirus infected cells at CHEST, which suggest that the LungFit™ PRO system may be effective for both prevention and treatment of human coronavirus infection with 150-250 ppm nitric oxide intermittent dosing regimens
  • Announced positive new efficacy and safety data from the third bronchiolitis pilot study at CHEST that support the development of inhaled NO as a treatment for this unmet medical need
  • Published results from a compassionate use patient case study using NO to treat pulmonary Mycobacterium abscessus disease at the National Heart, Lung, and Blood Institute, part of the National Institutes of Health (NIH), in the August edition of Access Microbiology

• Solid Tumor Program

  • Announced preclinical data for exogenous high concentration gNO at the AACR Conference on Tumor Immunology and Immunotherapy that suggest direct administration to solid tumors triggers a systemic anti-tumor immune response, which could serve as the basis for an effective immunotherapy
  • Presented new in vitro and in vivo preclinical data for the gNO program at the International Association for the Study of Lung Cancer’s (IASLC) North America Conference on Lung Cancer 2020 (NACLC 2020) that suggest high concentration gNO may treat lung cancer locally and its metastases systemically

• Ended the quarter
with $
2
2
.
4
million
in cash
,
cash equivalents
and restricted cash

Upcoming Milestones

• LungFit™ PH

  • Anticipate receiving FDA approval of the PMA for LungFit™ PH to treat PPHN in the second quarter of calendar year 2021
  • LungFit™ PH commercial launch in the United States approximately 4-6 weeks post FDA approval

• LungFit™
PRO

  • Expect to announce topline data for the acute viral pneumonia study in the middle of calendar year 2021

• LungFit™
GO

  • Expect to initiate the at-home NTM lung infection pilot study in December 2020. This study start has been delayed due to the ongoing COVID-19 pandemic.

Financial results for three months
ended
September
30,
20
20

Revenue for the three months ended September 30, 2020 was $350,000 as compared to $646,000 for the three months ended September 30, 2019, all of which was licensing revenue.

Research and development expenses for the three months ended September 30, 2020 were $3.1 million, compared to $2.8 million for the three months ended September 30, 2019.

General and administrative expenses for the three months ended September 30, 2020 were $2.2 million, compared to $2.1 million for the three months ended September 30, 2019.

For the three months ended September 30, 2020, the Company had a net loss of $5.1 million, or ($0.30) per share, compared to a net loss of $4.1 million, or ($0.38) per share for the three months ended September 30, 2019.

As of September 30, 2020, the Company had cash, cash equivalents and restricted cash of $22.4 million.

Conference Call & Webcast


Wednesday, November 11





th





@ 4:30 pm ET
Domestic: 877-407-0784
International: 201-689-8560
Passcode: 13711694
Webcast: http://public.viavid.com/index.php?id=141855

About Beyond Air, Inc.
Beyond Air, Inc. is a clinical-stage medical device and biopharmaceutical company developing a revolutionary NO Generator and Delivery System, LungFit™, that uses NO generated from ambient air to deliver precise amounts of NO to the lungs for the potential treatment of a variety of pulmonary diseases. The LungFit™ can generate up to 400 ppm of NO, for delivery either continuously or for a fixed amount of time and has the ability to either titrate dose on demand or maintain a constant dose. The Company is currently applying its therapeutic expertise to develop treatments for pulmonary hypertension in various settings, in addition to treatments for respiratory tract infections that are not effectively addressed with current standards of care. Beyond Air is currently advancing its revolutionary LungFit™ for clinical trials for the treatment of severe lung infections such as SARS-CoV-2 and nontuberculous mycobacteria (NTM). Additionally, Beyond Air is using ultra-high concentrations of NO with a proprietary delivery system to target certain solid tumors in the pre-clinical setting. For more information, visit www.beyondair.net.

About Nitric Oxide (NO)

Nitric Oxide (NO) is a powerful molecule, naturally synthesized in the human body, proven to play a critical role in a broad array of biological functions. In the airways, NO targets the vascular smooth muscle cells that surround the small resistance arteries in the lungs. Currently, exogenous inhaled NO is used in adult respiratory distress syndrome, post certain cardiac surgeries and persistent pulmonary hypertension of the newborn to treat hypoxemia. Additionally, NO is believed to play a key role in the innate immune system and in vitro studies suggest that NO possesses anti-microbial activity not only against common bacteria, including both gram-positive and gram-negative, but also against other diverse pathogens, including mycobacteria, viruses, fungi, yeast and parasites, and has the potential to eliminate multi-drug resistant strains.

About the LungFit™*

Beyond Air’s LungFit™ is a cylinder-free, phasic flow nitric oxide generator and delivery system and has been designated as a medical device by the US Food and Drug Administration (FDA). The ventilator compatible version of the device can generate NO from ambient air on demand for delivery to the lungs at concentrations ranging from 1 part per million (ppm) to 80 ppm. The LungFit™ system could potentially replace large, high-pressure NO cylinders providing significant advantages in the hospital setting, including greatly reducing inventory and storage requirements, improving overall safety with the elimination of NO2 purging steps, and other benefits. The LungFit™ can also deliver NO at concentrations at or above 80 ppm for potentially treating severe acute lung infections in the hospital setting (e.g. COVID-19, bronchiolitis) and chronic, refractory lung infections in the home setting (e.g. NTM). With the elimination of cylinders, Beyond Air intends to offer NO treatment in the home setting.

* Beyond Air’s LungFit™ is not approved for commercial use. Beyond Air’s LungFit™ is for investigational use only. Beyond Air is not suggesting NO use over 80 ppm or use at home.

About PPHN

Persistent pulmonary hypertension of the newborn (PPHN) is a lethal condition and secondary to failure of normal circulatory transition at birth. It is a syndrome characterized by elevated pulmonary vascular resistance (PVR) that causes labile hypoxemia due to decreased pulmonary blood flow and right-to-left shunting of blood. Its incidence has been reported as 1.9 per 1000 live births (0.4–6.8/1000 live births) with mortality rate ranging between 4–33%. This syndrome complicates the course of about 10% of infants with respiratory failure and remains a source of considerable morbidity and mortality. NO gas is a vasodilator, is approved in dozens of countries to improve oxygenation and reduces the need for extracorporeal membrane oxygenation (ECMO) in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension in conjunction with ventilator support and other appropriate agents.

About Bronchiolitis

The majority of hospital admissions of infants with bronchiolitis are caused by respiratory syncytial virus (RSV). RSV is a common and highly transmissible virus that infects the respiratory tract of most children before their second birthday. While most infants with RSV present with minor respiratory symptoms, a small percentage develop serious lower airway infections, termed bronchiolitis, which can become life-threatening. The absence of treatment options for bronchiolitis limits the care of these sick infants to largely supportive measures. Beyond Air’s system is designed to effectively deliver over 80 ppm NO, for which preliminary studies indicate may eliminate bacteria, viruses, fungi and other microbes from the lungs.

About NTM

Nontuberculous mycobacteria (NTM) is a rare and serious bacterial infection in the lungs causing debilitating pulmonary disease associated with increased morbidity and mortality. NTM infection is acquired by breathing in aerosolized bacteria from the environment, and if ignored can lead to NTM lung disease, a progressive and chronic condition. NTM is an emerging public health concern worldwide because of its multi-drug antibiotic resistance. Current treatment guidelines suggest a combination of multiple antibiotics delivered continually for as long as two years. These complex, expensive and invasive regimens have a poor record in the treatment of Mycobacterium abscessus complex (MABSC) and refractory Mycobacterium avium complex (MAC) and have the potential for causing severe adverse events. Beyond Air’s system is designed to effectively deliver 150 – 400 ppm NO to the lung, and early data indicate that this range of NO concentration may have a positive effect on patients infected with NTM.

About COVID-19

COVID-19 (coronavirus disease 2019) is an infectious disease caused by the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). COVID-19 first emerged in Wuhan, China in December of 2019. Those affected develop fever, cough, shortness of breath and/or difficulty breathing. While the majority of cases result in mild symptoms, some can progress to pneumonia and multi-organ failure. Older adults and people who have serious chronic medical conditions are at an increased risk of developing severe complications from COVID-19. There is no specific treatment approved for COVID-19 and patients are managed with supportive care. NO may prove to be a treatment as the impact on the lung should result in bronchodilation, reduction in inflammation and inhibition of the viral replication process1,2,3. As of November 9, 2020, more than 50.6 million confirmed cases of COVID-19 and more than 1.26 million deaths have been reported globally.

[1] Tripathi et al, FEMS Immunology and Medical Microbiology, December 2017
[2] Saura, M., et al., An antiviral mechanism of nitric oxide: inhibition of a viral protease. Immunity, 1999. 10(1): p. 21-8.
[3] Akerström S et al. Nitric oxide inhibits the replication cycle of severe acute respiratory syndrome coronavirus. J Virol. 2005; 79(3):1966-9.

About Solid Tumors

Cancer is the second leading cause of death globally, with tumor metastases responsible for approximately 90% of all cancer-related deaths. Current cancer treatment modalities generally include chemotherapy, immunotherapy, radiation, and/or surgery. Nitric oxide at high concentrations has been reported to show anticancer properties and to serve as a chemosensitizer and radiotherapy enhancer. Based on its current findings, Beyond Air is developing treatment protocols using ultra-high nitric oxide concentrations to ablate primary tumors and treat metastatic disease.

About Acute Viral Pneumonia

In adults, viruses have been identified as the causative agents in approximately 100 million cases of community-acquired pneumonia per year. While viral pneumonia in adults is most commonly caused by rhinovirus, respiratory syncytial virus (RSV) and influenza virus, newly emerging viruses (including SARS-CoV-1, SARS-CoV-2, avian influenza A, and H1N1 viruses) have been identified as pathogens contributing to the overall burden of adult viral pneumonia. Patients aged 65 years or older are at particular risk for death from the disease, as are patients with other underlying health conditions or weakened immune systems. There is no consensus regarding the use of antiviral drugs to treat viral pneumonia, and specific preventative measures are currently limited to the influenza vaccine. Given that current treatment recommendations are largely limited to supportive care, there is an unmet medical need for effective treatment options.

Forward Looking Statements

This press release contains “forward-looking statements” concerning inhaled nitric-oxide and the Company’s LungFit™ product, including statements with regard to potential regulatory developments, the potential impact on patients and anticipated benefits associated with its use. Forward-looking statements include statements about our expectations, beliefs, or intentions regarding our product offerings, business, financial condition, results of operations, strategies or prospects. You can identify such forward-looking statements by the words “anticipates,” “expects,” “intends,” “impacts,” “plans,” “projects,” “believes,” “estimates,” “likely,” “goal,” “assumes,” “targets” and similar expressions and/or the use of future tense or conditional constructions (such as “will,” “may,” “could,” “should” and the like) and by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including risks related to: our approach to discover and develop novel drugs, which is unproven and may never lead to efficacious or marketable products; our ability to fund and the results of further pre-clinical and clinical trials; obtaining, maintaining and protecting intellectual property utilized by our products; our ability to enforce our patents against infringers and to defend our patent portfolio against challenges from third parties; our ability to obtain additional funding to support our business activities; our dependence on third parties for development, manufacture, marketing, sales, and distribution of products; the successful development of our product candidates, all of which are in early stages of development; obtaining regulatory approval for products; competition from others using technology similar to ours and others developing products for similar uses; our dependence on collaborators; our short operating history and other risks identified and described in more detail in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K and other filings with the SEC, all of which are available on our website. We undertake no obligation to update, and we do not have a policy of updating or revising, these forward-looking statements, except as required by applicable law.

CONTACTS:

Steven Lisi, Chief Executive Officer
Beyond Air, Inc.
[email protected]

Maria Yonkoski, Head of Investor Relations
Beyond Air, Inc.
[email protected]

Corey Davis, Ph.D.
LifeSci Advisors, LLC
[email protected]
(212) 915-2577

BEYOND AIR, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

  September 30, 2020     March 31, 2020  
    (Unaudited)          
ASSETS              
Current assets              
Cash and cash equivalents $ 21,716,778     $ 19,829,275  
Restricted cash   636,444       5,635,836  
Other current assets and prepaid expenses   438,910       1,149,806  
Total current assets   22,792,132       26,614,917  
Licensed right to use technology   393,725       412,763  
Right-of-use lease assets   378,188       195,727  
Property and equipment, net   868,868       211,337  
Other assets   38,880       –  
TOTAL ASSETS $ 24,471,793     $ 27,434,744  
               
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Current liabilities              
Accounts payable $ 1,825,767     $ 2,256,229  
Accrued expenses   1,347,505       1,097,534  
Deferred revenue   294,422       873,190  
Stock to be issued to a vendor   –       240,000  
Operating lease liability   82,003       69,342  
Loan payable   84,280       335,358  
Total current liabilities   3,633,977       4,871,653  
               
Long-term liabilities              
Operating lease liability   301,664       131,581  
Facility agreement loan, net   4,405,815       4,339,065  
Total liabilities   8,341,456       9,342,299  
Commitments and contingencies              
               
Shareholders’ equity              
Preferred stock, $0.0001 par value per share: 10,000,000 shares authorized, 0 shares issued and outstanding   –       –  
Common stock, $0.0001 par value per share: 100,000,000 shares authorized, 17,152,414 and 16,056,360 shares issued and outstanding as of September 30, 2020 and March 31, 2020, respectively   1,715       1,606  
Treasury stock   (25,000 )     (25,000 )
Additional paid-in capital   85,614,292       75,702,915  
Accumulated deficit   (69,460,670 )     (57,587,076 )
Total shareholders’ equity   16,130,337       18,092,445  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 24,471,793       27,434,744  

  

BEYOND AIR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

  For the Three Months Ended     For the Six Month Ended  
  September 30,     September 30,  
  2020     2019     2020     2019  
                       
License revenues $ 349,607     $ 645,602     $ 578,768     $ 1,273,071  
                               
Operating expenses:                              
                               
Research and development   3,147,276       2,849,990       7,479,090       5,173,503  
General and administrative   2,169,011       2,064,872       4,663,025       4,247,430  
Operating expenses   5,316,287       4,914,862       12,142,115       9,420,933  
                               
Operating loss   (4,966,680 )     (4,269,260 )     (11,563,347 )     (8,147,862 )
                               
Other income (loss)                              
Realized and unrealized gain (loss) from marketable securities   –       142,806       –       (2,164,513 )
Dividend and interest income   878       30,691       15,863       34,067  
Interest expense   (159,034 )     –       (322,274 )     –  
Foreign exchange loss   (6,954 )     (1,977 )     (5,679 )     (253 )
Other income   –       –       1,843       –  
Total other income (loss)   (165,110 )     171,520       (310,247 )     (2,130,699 )
                               
Net loss $ (5,131,790 )   $ (4,097,740 )   $ (11,873,594 )   $ (10,278,561 )
                               
Net basic and diluted loss per share $ (0.30 )   $ (0.38 )   $ (0.71 )   $ (1.03 )
                               
Weighted average number of shares of common stock used in computing basic and diluted net loss per share   17,120,801       10,699,370       16,826,712       9,935,444  

 

Posted on

ANGI Homeservices to Participate in Needham & Company’s Virtual Internet Services Conference

DENVER, Nov. 11, 2020 (GLOBE NEWSWIRE) — ANGI Homeservices (NASDAQ: ANGI) will attend the Needham Virtual Internet Services Conference on Monday, November 16, 2020.  Brandon Ridenour, Chief Executive Officer of ANGI Homeservices, will participate in a fireside chat at 10:00 a.m. ET.  A live webcast of this virtual fireside chat will be available to the public on Needham’s website and a replay of the webcast will be available at http://ir.angihomeservices.com/ and http://www.iac.com/Investors/.  

About ANGI Homeservices Inc.

ANGI Homeservices Inc. (NASDAQ: ANGI) turns home improvement jobs imagined into jobs well-done. People throughout North America and Europe rely on us to book quality home service pros across 500 different categories, from repairing and remodeling to cleaning and landscaping. Over 230,000 domestic service professionals actively seek consumer matches, complete jobs or advertise through ANGI Homeservices’ platforms and consumers turn to at least one of our brands to find a pro for more than 25 million projects each year. We’ve established category-transforming products through brands such as HomeAdvisor®, Angie’s List®, Handy and Fixd Repair – as well as international brands such as HomeStars, MyHammer, MyBuilder, Instapro, Travaux and Werkspot. Our marketplaces have enabled more than 150 million consumer-to-pro connections, meaningfully redefining how easily and effectively home pros are discovered and hired.  The Company is headquartered in Denver, Colorado. Learn more at www.angihomeservices.com. 

Contacts:

IAC/ANGI Homeservices Investor Relations

Mark Schneider
(212) 314-7400

ANGI Homeservices Corporate Communications

Mallory Micetich
(303) 963-8352

IAC Corporate Communications

Valerie Combs
(212) 314-7361

Posted on

First Republic Bank Announces Common Stock Offering

First Republic Bank Announces Common Stock Offering

SAN FRANCISCO–(BUSINESS WIRE)–
First Republic Bank (“First Republic”) (NYSE: FRC), a leading private bank and wealth management company, today announced that it has agreed to sell 1,500,000 shares of its common stock in an underwritten public offering. First Republic has also granted the underwriters a 30-day option to purchase up to an additional 225,000 shares from First Republic. BofA Securities, J.P. Morgan and Morgan Stanley are serving as joint bookrunning managers.

First Republic intends to use the net proceeds from the offering for general corporate purposes, which may include, among other things, funding loans or purchasing investment securities for its portfolio.

Closing of the offering is expected to occur on or about November 16, 2020, subject to customary closing conditions.

The offering will be made only by means of an offering circular. The preliminary offering circular relating to the offering will be available at www.frc-offering.com and furnished on a Current Report on Form 8-K that will be filed with the Federal Deposit Insurance Corporation. Copies of the preliminary offering circular may also be obtained from BofA Securities, NC1-004-03-43, 200 North College Street, 3rd Floor, Charlotte, North Carolina 28255-0001, Attention: Prospectus Department, or email: [email protected]; from J.P. Morgan, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, or by calling 866-803-9204; or from Morgan Stanley – Attn: Prospectus Department – 180 Varick Street, 2nd Floor – New York, New York 10014.

This press release is for informational purposes only and shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The securities are neither insured nor approved by the Federal Deposit Insurance Corporation or any other governmental agency.

About First Republic Bank

Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service, and offers a complete line of products, including residential, commercial and personal loans, deposit services, and wealth management. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; New York, New York; and Jackson, Wyoming. First Republic is a constituent of the S&P 500 Index and KBW Nasdaq Bank Index.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements about First Republic’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in the section titled “Risk Factors” in First Republic’s preliminary offering circular relating to this offering, including the documents incorporated by reference therein, and other risks described in documents subsequently filed by First Republic from time to time under the Securities Exchange Act of 1934, as amended. Further, any forward-looking statement speaks only as of the date on which it is made, and First Republic undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

Investors:

Andrew Greenebaum / Lasse Glassen

Addo Communications

[email protected]

[email protected]

(310) 829-5400

Media:

Greg Berardi

Blue Marlin Partners

[email protected]

(415) 239-7826

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

Logo
Logo
Posted on

Sierra Wireless Octave Wins “IoT Innovation of the Year” Award in 2020 Mobile Breakthrough Award Program

Sierra Wireless Octave Wins “IoT Innovation of the Year” Award in 2020 Mobile Breakthrough Award Program

Annual Awards Program Recognizes Top Mobile and Wireless Companies and Solutions Around the Globe

VANCOUVER, British Columbia–(BUSINESS WIRE)–Sierra Wireless (NASDAQ: SWIR) (TSX: SW), the leading IoT solutions provider that combines devices, network services and software to unlock value in the connected economy, today announced that its Octave™ solution has been selected as winner of the “IoT Innovation of the Year” award in the fourth annual Mobile Breakthrough Awards program conducted by Mobile Breakthrough, a leading independent market intelligence organization that recognizes the top companies, technologies and products in the global wireless and mobile market today.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201111005867/en/

Sierra Wireless’ Octave is an all-in-one edge-to-cloud solution for Industrial IoT (IIoT) that enables businesses to accelerate their data-driven digital transformation. Octave is built on 25 years of Sierra Wireless IoT experience to deliver a new way for OEMs and industrial companies to access machine data in the cloud. By providing simple Cloud APIs to securely extract, orchestrate and act on data from remote assets, Octave eliminates the complex integration between hardware, firmware and cloud software, allowing businesses to get IoT applications up and running within days, instead of months.

“Octave eliminates the complexities of implementing and scaling IoT solutions, allowing industrial companies to cost-effectively access the benefits of IoT without the risks,” said Olivier Pauzet, Vice President, Product & IoT Solutions, Sierra Wireless. “With Octave, customers can focus on building their business rather than reinventing technical infrastructure, dramatically reducing costs and development time for OEMs, system integrators and enterprises. We are proud to receive this 2020 Mobile Breakthrough Award and look forward to continued success in helping organizations reduce their time to revenue, as well as development, management, and maintenance costs.”

The mission of the annual Mobile Breakthrough Awards is to honor excellence and recognize the innovation, hard work and success in a range of mobile and wireless technology categories, including Cloud Computing, Mobile Management, Wireless and Broadband, Mobile Analytics, IoT and Smart City and many more. All nominations were evaluated by an independent panel of experts within the wireless industry.

“While the promise of IoT is impressive, the reality is that it is difficult, complex and time consuming to integrate wireless edge technology,” stated James Johnson, managing director, Mobile Breakthrough. “Sierra Wireless’ Octave addresses these challenges head-on, creating a new category of IoT solutions, with cloud-based features that provide all the components of distributed IoT connectivity in a single, integrated solution. We are thrilled to recognize Sierra Wireless for their breakthrough Octave solution and congratulate the entire Sierra Wireless team for their well-deserved ‘IoT Innovation of the Year’ award.”

With its unique distributed data orchestration capabilities and security features, Octave abstracts away the complexity involved in integrating IoT into existing company infrastructure, empowering businesses to easily and quickly develop IoT applications, collect IoT application data and analyze this data for actionable insights. By building edge-to-cloud connectivity into products, companies can collect data about how equipment is being used, allowing them to maximize performance and uptime, reduce maintenance costs and offer transformational equipment-as-a-service and consumption-based services.

With interfaces to all major cloud service providers, Octave turns the Industrial IoT into a set of simple cloud APIs that companies can merge with their existing IT systems. For example, Sierra Wireless announced the successful integration between Octave and Microsoft Azure IoT Central, enabling developers to deploy secure, intelligent, and reliable IoT device connectivity and collect data as an extension of their Microsoft Azure experience.

For more information and to demo Octave for your next IoT initiative, visit: https://www.sierrawireless.com/octave. To contact the Sierra Wireless Sales Desk, call +1 877-687-7795 or visit http://www.sierrawireless.com/sales.

Resources:

Note to editors:

To view and download images of Sierra Wireless products, visit http://www.sierrawireless.com/newsroom/productimages.aspx.

About Sierra Wireless

Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is the leading IoT solutions provider that combines devices, network services and software to unlock value in the connected economy. Companies globally are adopting IoT to improve operational efficiency, create better customer experiences, improve their business models and create new revenue streams. Whether it is an integrated solution to help a business securely connect edge devices to the cloud, or a software/API service to help manage processes associated with billions of connected assets, or a platform to extract real-time data to make the best business decisions, Sierra Wireless will work with you to develop the right industry-specific solution for your next IoT endeavor. Sierra Wireless has more than 1,300 employees globally and operates R&D centers in North America, Europe and Asia. For more information, visit www.sierrawireless.com.

Connect with Sierra Wireless on the IoT Blog at http://www.sierrawireless.com/iot-blog, on Twitter at @SierraWireless, on LinkedIn at http://www.linkedin.com/company/sierra-wireless and on YouTube at http://www.youtube.com/SierraWireless.

About Mobile Breakthrough

Part of Tech Breakthrough, a leading market intelligence and recognition platform for global technology innovation and leadership, the Mobile Breakthrough Awards program is devoted to honoring excellence in mobile and wireless technology companies, products and people. The Mobile Breakthrough Awards provide a platform for public recognition around the achievements of breakthrough mobile companies and products in categories including Cloud Computing, Mobile Management and Security, Wireless and Broadband, Mobile Analytics, IoT and Smart City technology, WLAN, WiFi and more. For more information visit MobileBreakthroughAwards.com.

“Sierra Wireless” and “Octave” are registered trademarks of Sierra Wireless. Other product or service names mentioned herein may be the trademarks of their respective owners.

Kim Homeniuk

Sierra Wireless

Media Relations

phone: +1 604 233 8028

[email protected]

David Climie

Sierra Wireless

Investor Relations

phone: +1 604 231 1137

[email protected]

KEYWORDS: North America Canada

INDUSTRY KEYWORDS: Technology Mobile/Wireless Telecommunications Software Networks Hardware

MEDIA:

Logo
Logo
Logo
Logo
Posted on

SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Mesoblast Limited of Class Action Law Suit and Upcoming Deadline –  MESO

NEW YORK, Nov. 11, 2020 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against Mesoblast Limited  (“Mesoblast” or the “Company”) (NASDAQ: MESO) and certain of its officers.   The class action, filed in United States District Court for the Southern District of New York, and docketed under 20-cv-09111, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise, acquired Mesoblast securities between April 16, 2019 and October 1, 2020, inclusive (the “Class Period”). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of 1934 (the “Exchange Act”).

If you are a shareholder who purchased Mesoblast securities during the class period, you have until December 7, 2020, to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.   To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. 



[Click here for information about joining the class action]

Mesoblast develops allogeneic cellular medicines using its proprietary mesenchymal lineage cell therapy platform. Its lead product candidate, RYONCIL (remestemcel-L), is an investigational therapy comprising mesenchymal stem cells derived from bone marrow. In February 2018, the Company announced that remestemcel-L met its primary endpoint in a Phase 3 trial to treat children with steroid refractory (“SR”) acute graft versus host disease (“aGVHD”).

In early 2020, Mesoblast completed its rolling submission of its Biologics License Application (“BLA”) with the U.S. Food and Drug Administration (“FDA”) to secure marketing authorization to commercialize remestemcel-L for children with steroid refractory aGVHD.

The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational, and compliance policies.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) comparative analyses between Mesoblast’s Phase 3 trial and three historical studies did not support the effectiveness of remestemcel-L for steroid refractory aGVHD because of design differences between the four studies; (ii) as a result, the FDA was reasonably likely to require further clinical studies; (iii) as a result, the commercialization of remestemcel-L in the U.S. was likely to be delayed; and (iv) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On August 11, 2020, the FDA released briefing materials for its Oncologic Drugs Advisory Committee (“ODAC”) meeting to be held on August 13, 2020. Therein, the FDA stated that Mesoblast provided post hoc analyses of other studies “to further establish the appropriateness of 45% as the null Day-28 ORR” for its primary endpoint. The briefing materials stated that, because of design differences between these historical studies and Mesoblast’s submitted study, “it is unclear that these study results are relevant to the proposed indication.”

On this news, the Company’s American Depositary Share (“ADS”) price fell $6.09 per share, or approximately 35%, to close at $11.33 per share on August 11, 2020, on unusually heavy trading volume.

On October 1, 2020, Mesoblast disclosed that it had received a Complete Response Letter (“CRL”) from the FDA regarding its marketing application for remestemcel-L for treatment of SR-aGVHD in pediatric patients. According to the CRL, the FDA recommended that the Company “conduct at least one additional randomized, controlled study in adults and/or children to provide further evidence of the effectiveness of remestemcel-L for SR-aGVHD.” The CRL also “identified a need for further scientific rationale to demonstrate the relationship of potency measurements to the product’s biologic activity.”

On this news, the Company’s ADS price fell $6.56 per share, or over 35%, to close at $12.03 per share on October 2, 2020, on unusually heavy trading volume.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980

Posted on

cbdMD Engages Leading Biotech Firm IONTOX to Validate Its Patent Pending Superior Broad Spectrum Blend

cbdMD Engages Leading Biotech Firm IONTOX to Validate Its Patent Pending Superior Broad Spectrum Blend

Validation Creates Pathway For New Water-Soluble Formulation For Beverages

CHARLOTTE, N.C.–(BUSINESS WIRE)–
cbdMD, Inc. (NYSE American: YCBD, YCBD.PR.A), one of the nation’s leading and most highly trusted and recognized cannabidiol (CBD) brands, announced today that it has retained nationally recognized biotechnology company IONTOX (https://www.iontox.com), to validate the Company’s patent pending proprietary cannabinoid formulations. On July 9, 2020, cbdMD announced it had filed provisional patents on its novel formulations and delivery systems. This is the next step in demonstrating the safety and efficacy of those formulations, including a new water-soluble formulation for beverages.

“IONTOX has extensive expertise in in vitro technology which utilizes novel techniques and testing methods for the safety of botanical dietary ingredients. These analyses will provide valuable insight to both current and future product formulation for cbdMD and we are honored that such a respected company would select IONTOX for this important research,” said Jim McKim, President of IONTOX.

“As part of our ongoing science based approach, we are staying ahead of current safety and testing methods by seeking to validate our patent pending proprietary cannabinoid blends and delivery systems. In addition to seeking FSA approval in the United Kingdom and our preparations for an eventual NDIN submission to the FDA, we are committed to the underlying science as demonstrated by our partnership with IONTOX, who have worked with some of the biggest names in research, such as: Dow, Unilever, Amway, Pfizer, Biogen and L’Oréal Paris. Working with IONTOX not only helps cbdMD’s regulatory submissions, but also demonstrates our commitment to leading with science. We continue our commitment as a leader in the development of innovative novel CBD products,” said Chairman & Co-CEO, Martin A. Sumichrast.

About IONTOX

IONTOX is a biotechnology company founded in 2014 dedicated to providing expertise to the area of in vitro toxicology, with a mission to build improved methods for predicting human adverse effects from chemical exposure. From laboratories located in Kalamazoo, Michigan, IONTOX serves a global client base in the pharmaceutical, cosmetic, chemical, tobacco, and food additive industries. Through, consulting, product development, and laboratory services the company contributes to the development, application, and interpretation of alternative testing methods. IONTOX aims to advance current alternative toxicology methods through continuous efforts in the research and development of new in vitro technology. Through the company’s contract research laboratories IONTOX offers Advanced in vitro solutions that promise to increase the reliability of in vitro toxicology.

About cbdMD, Inc.

cbdMD, Inc. is one of the leading, most highly trusted, and most recognized cannabidiol (CBD) brands, whose current products include CBD tinctures, CBD capsules, CBD gummies, CBD topicals, CBD bath bombs and CBD pet products. cbdMD is also a proud partner of Bellator MMA and Life Time, Inc., and has one of the largest rosters of professional sports athletes who are part of “Team cbdMD.” To learn more about cbdMD and our comprehensive line of over 100 SKUs of U.S. produced, Non-THC1 CBD products, please visit www.cbdMD.com, follow cbdMD on Instagram and Facebook, or visit one of the 6,000 retail outlets that carry cbdMD products.

1Non-THC is defined as below the level of detection using validated scientific analytical tools.

Forward-Looking Statements

This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by the use of words such as ”should,” ”may,” ”intends,” ”anticipates,” ”believes,” ”estimates,” ”projects,” ”forecasts,” ”expects,” ”plans,” and ”proposes.” These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in cbdMD, Inc.’s Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and Part II, Item 1A. Risk Factors appearing in its Quarterly Report on Form 10-Q for the period ended June 30, 2020, both as filed with the Securities and Exchange Commission (the “SEC”) and our other filings with the SEC. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of cbdMD, Inc. and are difficult to predict. cbdMD, Inc. does not undertake any duty to update any forward-looking statements except as may be required by law. The information which appears on our websites and our social media platforms, including, but not limited to, Instagram and Facebook, is not part of this press release.

PR:

cbdMD, Inc.

Lauren Greene

Communications Specialist

[email protected]

(843) 743-9999

Investors:

cbdMD, Inc.

John Weston

Director of Investor Relations

[email protected]

(704) 249-9515

KEYWORDS: United States North America North Carolina

INDUSTRY KEYWORDS: Other Consumer Other Health Retail Other Science Pharmaceutical Research Hospitals Consumer Science Physical Therapy Managed Care Medical Supplies General Health Biotechnology Alternative Medicine Other Retail Health Specialty

MEDIA:

Logo
Logo
Posted on

SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Aurora Cannabis, Inc. of Class Action Lawsuit and Upcoming Deadline – ACB

NEW YORK, Nov. 11, 2020 (GLOBE NEWSWIRE) — Pomerantz LLP announces that a class action lawsuit has been filed against certain officers of Aurora Cannabis, Inc.  (“Aurora” or the “Company”) (NYSE: ACB).   The class action, filed in United States District Court for the District of New Jersey, and docketed under 20-cv-13819, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise, acquired Aurora securities between February 13, 2020, and September 4, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.

If you are a shareholder who purchased Aurora securities during the class period, you have until December 1, 2020, to ask the Court to appoint you as Lead Plaintiff for the class.  A copy of the Complaint can be obtained at www.pomerantzlaw.com.  To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased. 



[Click here for information about joining the class action]

Aurora is headquartered in Edmonton, Canada. The Company produces and distributes medical cannabis products worldwide. It is vertically integrated and horizontally diversified across various segments of the cannabis value chain, including facility engineering and design, cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale, and retail distribution.

In 2018, the Canadian government approved the Cannabis Act, which legalized and regulated the use of recreational cannabis. In response to the statute’s approval and the corresponding surge of the recreational cannabis industry, Aurora completed a series of acquisitions to expand the Company’s presence and increase its distribution, including the Company’s all-share purchase of the Canadian medical cannabis producer MedReleaf for a total consideration of 3.2 billion Canadian dollars. Like many other companies in the cannabis industry, however, the Company encountered a variety of difficulties as the industry surged, including, inter alia, overproduction, regulatory delays, and competition from the black market.

On February 6, 2020, shortly before the start of the Class Period, Aurora issued a press release announcing, inter alia, a “business transformation plan,” to “better align the business financially with the current realities of the cannabis market in Canada while maintaining a sustainable platform for long-term growth.” Specifically, the press release touted that the plan was “expected to include significant and immediate decreases in selling, general & administrative (“SG&A”) expenses and capital investment plans.”

The complaint alleges that thought the Class Period, Defendants made materially false and/or misleading because they misrepresented and failed to disclose the following adverse facts pertaining to the Company’s business, operations, and prospects, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Aurora had significantly overpaid for previous acquisitions and experienced degradation in certain assets, including its production facilities and inventory; (ii) the Company’s purported “business transformation plan” and cost reset failed to mitigate the foregoing issues; (iii) accordingly, it was foreseeable that the Company would record significant goodwill and asset impairment charges; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On September 8, 2020, Aurora issued a press release “announc[ing] an update on its business operations along with certain unaudited preliminary fiscal fourth-quarter 2020 results.” Among other things, Aurora announced that the Company expected to record up to $1.8 billion in goodwill impairment charges in the fourth quarter of 2020. The Company also announced that “previously announced fixed asset impairment charges[ were] now expected to be up to $90 million, due to production facility rationalization, and a charge of approximately $140 million in the carrying value of certain inventory, predominantly trim, in order to align inventory on hand with near term expectations for demand.”

On this news, Aurora’s stock price fell $0.99 per share, or 11.63%, to close at $7.52 per share on September 8, 2020.

The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980

Posted on

PDL BioPharma Reports 2020 Third Quarter Financial Results and Sets Date To File a Certificate of Dissolution

– Consummated critical monetization transactions during third quarter, including the sale of its Noden pharmaceutical business and of a basket of royalties to SWK Holdings. Also entered into a settlement agreement with Wellstat. Subsequently completed the spin-off of its medical device company, LENSAR, on October 1, 2020.

– As of September 30, 2020, prior to the spin-off of LENSAR, net assets in liquidation were $494.7 million. Net assets attributable to LENSAR on September 30, 2020 were $112.4 million.

– Plans to file a certificate of dissolution with the State of Delaware on January 4, 2021. PDL stock is expected to be delisted from Nasdaq after December 31, 2020.

– Intends to distribute its remaining assets to its stockholder after completion of the Safe Harbor Procedures under the Delaware General Corporate Law.

– Conference Call with Slides Begins at 4:30 p.m. Eastern Time Today –

PR Newswire

INCLINE VILLAGE, Nev., Nov. 11, 2020 /PRNewswire/ — PDL BioPharma, Inc. (“PDL” or “the Company”) (Nasdaq: PDLI) reports financial results for the three and nine months ended September 30, 2020 and provides an update on important milestones achieved in the execution of its monetization and liquidation plan.

“We have made tremendous progress in the execution of our asset monetization strategy,” commented PDL’s President and CEO Dominique Monnet. “We are in a strong position as we prepare to file for dissolution under Delaware state law, that our Board has determined will occur on January 4, 2021. Initiating the Delaware dissolution process at this time will enable us to accelerate the distribution of our remaining assets to our stockholders after completion of the Safe Harbor process. I would like to thank the PDL Board and team, our advisors and our LENSAR and Noden colleagues for what we have accomplished together since the beginning of this challenging year. I am grateful to our remaining team members for their continued focus on completing our liquidation process and maximizing its proceeds for the benefit of our stockholders.”

Third Quarter and Recent Accomplishments

  • On August 12, 2020, PDL announced that it entered into a settlement agreement (the “Settlement Agreement”) with related entities of Defined Diagnostics, LLC (f/k/a Wellstat Diagnostics, LLC) (“Wellstat Diagnostics” and, together with such related entities, the “Wellstat Parties”) resolving previously reported litigation relating to loans made to Wellstat Diagnostics by PDL. Under the terms of the Settlement Agreement, the Wellstat Parties paid an amount of $7.5 million upon the signing of the Settlement Agreement and are to pay either (1) $5.0 million by February 10, 2021 and $55.0 million by July 26, 2021; or (2) $67.5 million by July 26, 2021. If the Wellstat Parties fail to make payment in full by July 26, 2021, PDL shall be authorized to record and confess judgment against the Wellstat Parties for an amount of $92.5 million or such lesser amount as may be owed under the Settlement Agreement.
  • On August 31, 2020, PDL completed the sale of Kybella®, Zalviso® and Coflex® royalties to SWK Holdings Corporation for $4.35 million in cash, approximately $3.9 million of which was received by PDL in the third quarter.
  • On September 9, 2020, PDL completed the divestiture of its wholly owned subsidiaries Noden Pharma DAC and Noden Pharma USA (collectively “Noden”) to Stanley Capital. The total value of the transaction will result in payments to PDL of up to $52.83 million in cash, $12.2 million of which was received in the third quarter.
  • PDL received notices in the third quarter of 2020 to convert $11.2 million par value of its convertible notes due in December 2021, representing 81% of the remaining 2021 notes. After this conversion period, $3.6 million of the 2021 and 2024 convertible notes in aggregate will remain outstanding.
  • On October 1, 2020, PDL completed the spin-off of all of its shares in its majority owned subsidiary LENSAR, Inc. (“LENSAR”) to PDL stockholders.

PDL intends to file a Certificate of Dissolution with the State of Delaware on January 4, 2021

In July 2020, PDL issued its proxy statement that requested approval by the stockholders of a Plan of Dissolution as the most efficient manner of winding up the Company’s business and distributing the proceeds of its liquidation process to the stockholders. At PDL’s 2020 Annual Meeting of Stockholders on August 19, 2020, PDL’s stockholders approved the Plan of Dissolution and authorized the PDL Board of Directors (“the Board”) to file a certificate of dissolution with the State of Delaware (the “Certificate of Dissolution”) upon its determination that such a filing is in the best interests of PDL stockholders. At its November 5, 2020 meeting, the Board resolved that the Certificate of Dissolution will be filed on January 4, 2021. Please refer to the Plan of Dissolution in PDL’s Proxy Statement for a detailed discussion of dissolution, but note the following:    

  • PDL will continue its existence for three years after filing the Certificate of Dissolution, or such longer period as the Delaware Court of Chancery may direct, for the purpose of prosecuting and defending suits, settling and closing its business, disposing of and conveying its property, discharging its liabilities and distributing to its stockholders any remaining assets.
  • Before distributions are made to PDL’s stockholders, PDL will follow the Safe Harbor Procedures found in Sections 280 and 281(a) of the Delaware General Corporate Law (DGCL) to resolve current, contingent and likely unknown claims against the Company. Generally, the Safe Harbor Procedures reduce the potential liability of the Company’s stockholders and directors from future claims. Under the Safe Harbor Procedures, PDL will petition the Delaware Court of Chancery to determine the amount and form of security that will be set aside before distributions are made to PDL’s stockholders. Upon completion of the Safe Harbor Procedures, PDL will distribute its remaining assets to its stockholders. PDL does not anticipate making any distributions to stockholders before the Safe Harbor Procedures are completed.

PDL will engage with Nasdaq regarding the delisting of the Company’s common stock, which it expects will occur after market close on December 31, 2020.  PDL does not anticipate transferring into OTC trading. The Company’s transfer books will close as of the filing of the certificate of dissolution, expected to occur on January 4, 2021 (the “Final Record Date”). After such time, the Company will not record any further transfers of its common stock, except pursuant to the provisions of a deceased stockholder’s will, intestate succession, or by operation of law, and PDL will not issue any new stock certificates, other than replacement certificates. In addition, after the Final Record Date, the Company will not issue any shares of its common stock upon exercise of outstanding stock options. As a result of the closing of PDL’s transfer books, it is anticipated that distributions, if any, made in connection with the Dissolution will be made pro rata to the same stockholders of record as the stockholders of record as of the Final Record Date, and it is anticipated that no further trading of the Company’s common stock will occur after the Final Record Date.

Presentation of Financial Position and Results of Operations


Liquidation Basis of Accounting

As a result of the approval by the Company’s stockholders on August 19, 2020 to pursue dissolution of the Company, PDL’s basis of accounting transitioned, effective September 1, 2020, from the going concern basis of accounting (“Going Concern Basis”) to the liquidation basis of accounting (“Liquidation Basis”) in accordance with U.S. Generally Accepted Accounting Principles. Under the Liquidation Basis, all assets are stated at their estimated liquidation value. Contractual liabilities under the Liquidation Basis are measured in accordance with applicable GAAP and all other liabilities, including costs associated with implementing the wind-down of the Company, are recorded at their estimated settlement amounts over the expected liquidation period.

Given the adoption of the Liquidation Basis on September 1, 2020, the results of operations for the three and nine months ended September 30, 2020 are not comparable to prior-year periods or with other interim periods in the current year presented under the Going Concern Basis primarily due to the differing accounting methods. See Table 1 for the results of operations for the two and eight months ended August 31, 2020 and for the three and nine months ended September 30, 2019 under the Going Concern Basis.

Under the Liquidation Basis, the values of the Company’s assets and liabilities include management’s estimate of income to be generated from the remaining assets until the anticipated date of sale, estimated sales proceeds, estimates for operating expenses and expected amounts required to settle liabilities. The estimated liquidation values for assets derived from future revenue streams and asset sales and the settlement of estimated liabilities are reflected on the Condensed Consolidated Statement of Net Assets in Liquidation in Table 2. The actual amounts realized could differ materially from the estimated amounts. The changes in net assets in liquidation are presented in a Condensed Consolidated Statement of Changes in Net Assets. See Table 3 for the changes from September 1, 2020, the date of adoption of Liquidation Basis, to September 30, 2020, the end of the third quarter.

Statement of Net Assets in Liquidation

  • As of September 30, 2020, prior to the spin-off of LENSAR, net assets in liquidation were $494.7 million. Please see Table 2.
  • Total assets as of September 30, 2020 were $604.0 million and consisted primarily of our remaining royalty assets, LENSAR’s assets prior to the spin-off, cash and cash equivalents, and a tax receivable reflecting the amounts expected to be refunded under the CARES Act.
  • The CARES Act receivable as of September 30, 2020 is estimated to be $80.5 million and includes, in addition to the losses from operations, the ordinary losses incurred on the Noden transaction and the sale of the royalty assets.
  • Total assets also included an Intangible Asset for LENSAR, which reflects the step up in the value of the entity to its enterprise value prior to its spin-off on October 1, 2020. Net assets attributable to LENSAR on September 30, 2020 were $112.4 million.
  • Total liabilities as of September 30, 2020 were $109.3 million and consisted primarily of amounts accrued for an ongoing audit by the California Franchise Tax Board for the tax years 2009 through 2015, amounts owed under our convertible notes and amounts accrued for estimated operating expenses to be incurred through dissolution.
  • The pro forma column in Table 2 presents the September 30, 2020, Condensed Consolidated Statement of Net Assets excluding LENSAR’s assets and liabilities. It also reflects an estimated $11.8 million reduction in the September 30, 2020 CARES Act receivable resulting from the inclusion in taxable income of the expected gain on the spin-off of LENSAR that will be recorded in the fourth quarter.

Other Financial Highlights

  • Net cash received from all royalty rights for the first nine months of 2020 was $42.6 million, down 27% from $58.3 million for the prior-year nine-month period, primarily due to a decline in the net price of Glumetza year over year. See Table 4.
  • Regarding royalty rights remaining after the SWK transaction, i.e., royalties on Glumetza and other combination products of metformin using Assertio’s modified release technology as well as royalties on sales of Cerdelga, net cash received was $41.8 million first nine months of 2020 and $17.4 million for the three-months ended September 30, 2020.

Stock and Convertible Note Repurchase Program

  • In January 2020, PDL began repurchasing shares of its common stock in the open market pursuant to a 10b5-1 program entered into in December 2019 following a $275 million repurchase plan approved by the Board. For the year-to-date 2020, the Company acquired 12.3 million shares of its common stock for $39.4 million, at an average cost of $3.20 per share, including commissions.
  • For the year-to-date 2020 under this same repurchase plan, the Company also repurchased $15.9 million par value of convertible notes.
  • In consideration of the impact and uncertainty introduced by the COVID-19 pandemic on the Company’s monetization process, the Company discontinued its 10b5-1 program on May 31, 2020.
  • Through September 30, 2020, the total amount spent of the $275 million Board authorized repurchase program, including the value of the Company’s stock issued in connection with the December 2019 convertible debt exchange, was $213.0 million.
  • Pursuant to the stockholders’ approval on August 19, 2020 of a plan to dissolve the Company under Delaware state law, a fundamental change provision under PDL’s convertible note indentures was triggered that enabled bondholders to tender their bonds for cash settlement totaling the outstanding principal plus accrued interest or, alternatively, to exercise their conversion rights under the indentures. Both options expired near the end of September 2020. No bonds were tendered to PDL for payment, but bondholders holding $11.2 million par value of the 2021 convertible notes exercised their conversion rights. The Company intends to settle the conversion of these notes entirely with cash on hand, which will occur near the end of the fourth quarter of 2020.
  • As of October 31, 2020, the Company had approximately 114.2 million shares of common stock outstanding.

Conference Call and Webcast

PDL will hold a conference call to discuss financial results and provide a business update at 4:30 p.m. Eastern time today. Slides to accompany the conference call will be available in the Investor Relations section of https://www.pdl.com/.

To access the live conference call via phone, please dial (833) 685-0901 from the U.S. or (412) 317-5734 internationally. The conference ID is 10149211. A telephone replay will be available for one week beginning approximately one hour after the completion of the call and can be accessed by dialing (877) 344-7529 from the U.S., (855) 669-9658 from Canada or (412) 317-0088 internationally. The replay passcode is 10149211.

To access the live and subsequently archived webcast of the conference call, go to the Investor Relations section of https://www.pdl.com/ and select “Events & Presentations.”

About PDL BioPharma, Inc.

Throughout its history, PDL’s mission has been to improve the lives of patients by aiding in the successful development of innovative therapeutics and healthcare technologies. PDL BioPharma was founded in 1986 as Protein Design Labs, Inc. when it pioneered the humanization of monoclonal antibodies, enabling the discovery of a new generation of targeted treatments that have had a profound impact on patients living with different cancers as well as a variety of other debilitating diseases. In 2006, the Company changed its name to PDL BioPharma, Inc.

On August 19, 2020, PDL announced at the Company’s 2020 Annual Meeting of Stockholders approval by stockholders for a Plan of Dissolution authorizing the Company to liquidate and dissolve the Company in accordance with the Plan of Dissolution. At its November 5, 2020 meeting, the Board resolved that the Certificate of Dissolution will be filed on January 4, 2021.

For more information please visit https://www.pdl.com/

NOTE: PDL, PDL BioPharma, the PDL logo and associated logos and the PDL BioPharma logo are trademarks or registered trademarks of, and are proprietary to, PDL BioPharma, Inc. which reserves all rights therein.

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, including as it relates to the Company’s Plan of Liquidation, dissolution and wind-down of operations. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those, express or implied, in these forward-looking statements. Important factors that could impair the value of the Company’s assets and business, including the implementation or success of the Company’s monetization strategy/Plan of Liquidation, are disclosed in the risk factors contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2020, in the Company’s Quarterly Reports on Form 10-Q filed with the SEC on May 11, 2020 and August 10, 2020 and in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on July 7, 2020. All forward-looking statements are expressly qualified in their entirety by such factors. We do not undertake any duty to update any forward-looking statement except as required by law.


TABLE 1


PDL BIOPHARMA, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA


(unaudited)


(In thousands, except per share amounts)


Two Months
Ended


Three Months
Ended


Eight Months
Ended


Nine Months
Ended


August 31,


September 30,


August 31,


September 30,


2020


2019


2020


2019

(Under Going Concern Basis of Accounting)


Revenues

Product revenue, net

$

2,831

$

5,856

$

10,946

$

15,860

Lease revenue

703

1,322

2,139

3,854

Service revenue

544

898

2,126

2,510

Royalties from Queen et al. patents

—

—

—

9

License and other

37

(45)

110

(48)

Total revenues

4,115

8,031

15,321

22,185


Operating expenses

Cost of product revenue (excluding intangible asset amortization)

1,127

4,765

6,626

13,494

Amortization of intangible assets

204

321

841

983

Severance and retention

2,400

—

24,713

—

General and administrative

7,224

10,062

29,695

27,067

Sales and marketing

835

1,545

3,322

4,980

Research and development

1,053

4,310

4,374

6,106

Total operating expenses

12,843

21,003

69,571

52,630


Operating loss from continuing operations

(8,728)

(12,972)

(54,250)

(30,445)


Non-operating expense, net

Interest and other income, net

26

1,460

608

4,984

Interest expense

(210)

(3,011)

(996)

(8,950)

Gain on sale of intangible assets

—

3,476

—

3,476

Loss on investment

(5,576)

—

(5,576)

—

Loss on extinguishment of convertible notes

—

(3,900)

(606)

(3,900)

Total non-operating expense, net

(5,760)

(1,975)

(6,570)

(4,390)

Loss from continuing operations before income taxes

(14,488)

(14,947)

(60,820)

(34,835)

Income tax benefit from continuing operations

(3,636)

(3,136)

(17,780)

(6,558)

Net loss from continuing operations

(10,852)

(11,811)

(43,040)

(28,277)

Income (loss) from discontinued operations before income taxes (including loss on classification as held for sale of zero and $28,904 for the two eight months ended August 31, 2020)

191

(4,962)

(57,921)

18,555

Income tax (benefit) expense of discontinued operations

(15,045)

1,193

(23,006)

6,141

Income (loss) from discontinued operations

15,236

(6,155)

(34,915)

12,414


Net income (loss)

4,384

(17,966)

(77,955)

(15,863)

Less: Net loss attributable to noncontrolling interests

(14)

(182)

(659)

(340)


Net income (loss) attributable to PDL’s shareholders

$

4,398

$

(17,784)

$

(77,296)

$

(15,523)


Net income (loss) per share – basic

Net loss from continuing operations

$

(0.10)

$

(0.10)

$

(0.36)

$

(0.23)

Net income (loss) from discontinued operations

0.14

(0.06)

(0.30)

0.10

Net income (loss) attributable to PDL’s shareholders

$

0.04

$

(0.16)

$

(0.66)

$

(0.13)


Net income (loss) per share – diluted

Net loss from continuing operations

$

(0.10)

$

(0.10)

$

(0.36)

$

(0.23)

Net income (loss) from discontinued operations

0.14

(0.06)

(0.30)

0.10

Net income (loss) attributable to PDL’s shareholders

$

0.04

$

(0.16)

$

(0.66)

$

(0.13)


Weighted-average shares outstanding

Basic

113,889

112,986

118,001

119,966

Diluted

113,889

112,986

118,001

119,966

 


TABLE 2


PDL BIOPHARMA, INC.


CONDENSED CONSOLIDATED STATEMENT OF NET ASSETS AND


CONDENSED CONSOLIDATED STATEMENT OF NET ASSETS


EXCLUDING LENSAR’S ASSETS AND LIABILITIES


(Unaudited)


(In thousands)


September 30,


LENSAR’s Net
Assets


September 30,


2020


2020

(Under Liquidation
Basis of Accounting)

(Under Liquidation
Basis of Accounting)

(Proforma)


Assets

Cash and cash equivalents

$

125,736

$

42,701

$

83,035

Accounts receivable

8,323

2,429

5,894

Receivables from asset sales

39,389

—

39,389

Notes receivable

53,070

989

52,081

Inventory

13,685

13,685

—

Royalty assets

227,738

—

227,738

Income tax receivable

88,778

11,829

76,949

Property and equipment

783

783

—

Equipment under lease

3,033

3,033

—

Intangible assets

34,908

34,908

—

Other assets

8,591

4,863

3,728


Total assets

$

604,034

$

115,220

$

488,814


Liabilities

Accounts payable

$

3,639

$

2,349

$

1,290

Accrued liabilities, LENSAR

473

473

—

Uncertain tax positions

34,942

—

34,942

Compensation and benefit costs

21,219

—

21,219

Lease guarantee

10,700

—

10,700

Costs to sell assets

5,007

—

5,007

Other accrued liquidation costs

18,104

—

18,104

Convertible notes payable

15,238

—

15,238


Total liabilities

$

109,322

$

2,822

$

106,500


Net assets in liquidation

$

494,712

$

112,398

$

382,314

 


TABLE 3


PDL BIOPHARMA, INC.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS


(Unaudited)


(In thousands)

(Under Liquidation
Basis of Accounting)


Net assets in liquidation, at September 1, 2020

$

440,398

Changes in assets and liabilities in liquidation:

Decrease in liquidation value of royalty assets

(3,944)

Decrease in receivables from asset sales

(9,078)

Increase in liquidation value of notes receivable

8,027

Increase in other assets

7,355

Increase in income tax receivable

53,106

Decrease in estimated costs to sell assets

3,048

Decrease in uncertain tax positions

4,414

Increase in estimated liquidation costs

(8,667)

Decrease in other liabilities

53

Total changes in net assets in liquidation

54,314


Net assets in liquidation, at September 30, 2020


$


494,712

 


TABLE 4


PDL BIOPHARMA, INC.


CONDENSED ROYALTY ASSET DATA


(Unaudited)


(In thousands)


Three Months Ended


Nine Months Ended


September 30, 2020


September 30, 2019


September 30, 2020


September 30, 2019


Cash Royalties


Cash Royalties


Cash Royalties


Cash Royalties

Assertio

$

15,205

$

23,597

$

35,222

$

52,980

VB

137

254

612

748

U-M

2,219

1,574

6,573

4,212

AcelRx

38

80

194

241

KYBELLA

—

59

42

109

$

17,599

$

25,564

$

42,643

$

58,290

 

Cision View original content:http://www.prnewswire.com/news-releases/pdl-biopharma-reports-2020-third-quarter-financial-results-and-sets-date-to-file-a-certificate-of-dissolution-301171301.html

SOURCE PDL BioPharma, Inc.

Posted on

GoHealth Reports Third Quarter 2020 Results and Increases 2020 Outlook As a Result of Strong Medicare Enrollments and Operating Leverage

PR Newswire

CHICAGO, Nov. 11, 2020 /PRNewswire/ — GoHealth, Inc. (GoHealth or the Company) (Nasdaq: GOCO), a leading health insurance marketplace, announced financial results for the three and nine months ended September 30, 2020.

  • Third quarter 2020 net revenues of $163.4 million increased 52% compared to the prior year period, and year-to-date 2020 net revenues of $431.4 million increased 72% compared to the prior year period
  • Third quarter 2020 net loss of $206.5 million, included $209.3 million of accelerated vesting of certain equity awards in connection with the IPO1, and year-to-date 2020 net loss of $230.3 million, included $209.3 million of accelerated vesting of certain equity awards in connection with the IPO1
  • Third quarter 2020 adjusted EBITDA2 of $39.3 million increased 142% compared to the prior year period, and year-to-date 2020 adjusted EBITDA of $101.1 million increased 149% compared to the prior year period
  • The Company also updated its full year 2020 outlook, and now expects net revenues of $850–$890 million and adjusted EBITDA2 of $270–$290 million given the robust start to the Annual Enrollment Period, with 83% submission growth in October and a 4% improvement in agent conversion

Clint Jones, co-founder and CEO said, “GoHealth’s third quarter adjusted EBITDA growth of 142% was powered by 52% revenue growth and strong operating leverage as we continue to efficiently scale the business.  These excellent results marked a continuation of year-to-date trends as consumers increasingly turn to GoHealth’s leading DTC platform to find the best Medicare policies to meet their unique needs.”

Jones continued, “Our proprietary, vertically-integrated technology platform and high performance marketing organization allow us to efficiently grow our carrier partners’ Medicare membership base.  This growth is guided by our LTV/CAC focus, ensuring that we generate quick payback periods.  Our TeleCare team administers GoHealth’s Encompass programs on behalf of our carrier partners and further supports consumer persistency by proactively engaging with and educating consumers about their benefits through Plan Fit Check calls.  The strength and differentiation of our business model is evident in our third quarter operating cash flow of $33 million as well as a 5% increase in LTVs, fueled by improving persistency trends.”


Year-To-Date 2020 Highlights

  • Total Medicare Submitted Policies3 grew 103% during the first nine months to 355,544
    • Medicare – Internal revenue increased 172% to $316.2 million
    • Medicare – Internal profit increased 191% to $123.9 million
  • Adjusted EBITDA growth of 149% as margins expanded from 16.2% to 23.4%
  • LTV/CAC4 for the Medicare-Internal segment increased from 2.5x to 3.0x during the first nine months of 2020, driven by lower marketing costs per opportunity and higher agent sales conversion
    • LTV per carrier approved Medicare Advantage submission increased 2% from $899 to $913 during the first nine months of 2020
      • 2% improvement in persistency during the first nine months compared to the prior year period
    • LTV per carrier-approved Medicare Advantage submission increased 5% from $939 to $987 during the third quarter
  • Generated positive year-to-date cash flow from operations of $28.8 million while increasing commissions receivable by $117.9 million
  • 76% increase in Medicare – Internal licensed agents from 849 to 1,493 as of September 30, 2020 and made substantial investments in training ahead of the Annual Enrollment Period
    • Year-over-year new agent productivity +13%
  • TeleCare team of 275 agents ramped up retention conversations including Plan Fit Checks to maximize satisfaction and improve recapture rates into AEP
  • Expanded Enterprise programs to 26, including the addition of six new Encompass initiatives across multiple partners
  • Significantly expanded carrier footprint with UnitedHealthcare, Aetna, Cigna, Kaiser Permanente and Allwell, providing consumers with market-leading plan options in almost all counties in the United States


Financial Outlook

The trajectory of the US economy remains challenging to predict, particularly given the heightened uncertainty associated with the COVID-19 pandemic.  During this time, demand for healthcare has demonstrated great resilience, and we believe that the COVID-19 pandemic has created favorable industry dynamics for technology-driven, direct-to-consumer models such as GoHealth’s insurance marketplace.  The Company has updated its outlook for the fiscal year ending December 31, 2020 based on current market conditions and expectations:


  • Full year 2020 net revenue of $850 – $890 million, representing year-over-year growth of 58% – 65%

  • Full year 2020 adjusted EBITDA of $270 – $290 million, representing year-over-year growth of 58% – 70%

Jones concluded, “We are increasing our expectations for fiscal 2020 given our robust start to the Annual Enrollment Period, with October submissions up 83% over the prior October and well ahead of the 53% implied midpoint of revenue growth for the fourth quarter.  The Medicare market is large and growing quickly, and we are just beginning to realize our long-term growth opportunity as we create value for our partners and deliver great results for our shareholders.”

Conference Call Details
The Company will host a conference call today, Wednesday, November 11, 2020 at 5:00 pm (ET) to discuss its financial results. A live audio webcast and a supplemental presentation will be available online at https://investors.gohealth.com. The conference call can also be accessed by dialing 1-833-519-1310 for U.S. participants, or 1-914-800-3876 for international participants, and referencing participant code 4374976. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link.

About GoHealth
As a leading health insurance marketplace, GoHealth’s mission is to improve access to healthcare in America. Enrolling in a health insurance plan can be confusing for customers, and the seemingly small differences between plans can lead to significant out-of-pocket costs or lack of access to critical medicines and even providers. GoHealth combines cutting-edge technology, data science and deep industry expertise to match customers with the healthcare policy and carrier that is best for them. Since its inception, GoHealth has enrolled millions of people in Medicare and individual and family plans. For more information, visit https://www.gohealth.com.


1

 Represents non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO for the three months ended September 30, 2020


2

 
Adjusted EBITDA is a non-GAAP measure. For a definition of Adjusted EBITDA and a reconciliation to the most comparable GAAP measure, please refer to the appendix.


3

 Total Medicare Advantage Submitted Policies includes Commissionable and non-Commissionable Policies.


4

 LTV/CAC defined as (i) aggregate commissions estimated to be collected over the estimated life of all Approved Submissions based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints, or LTV, divided by (ii) the cost to convert a prospect into a customer less other non-commission carrier revenue for such period, or CAC.

Investor Relations:

Jay Koval, VP of Investor Relations
[email protected]

Media Relations:

[email protected]

Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding the Company’s future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected financial performance and operational performance for the fiscal year 2020, including with respect to revenue and Adjusted EBITDA, and the Company’s performance during the Annual Enrollment Period, including with respect to agent conversion and implied growth for the fourth quarter of 2020, are forward-looking statements. In some cases, you can identify forward-looking statements by terms, such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  There are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following: the Company’s ability to comply with the numerous, complex and frequently changing laws regulating the marketing and sale of Medicare plans; the potential for an adverse change in the Company’s relationships with carriers, including a loss of a carrier relationships; failure to grow the Company’s customer base or retain its existing customers; carriers’ ability to reduce commissions paid to the Company and adversely change their underwriting practices; significant consolidation in the healthcare industry which could adversely alter the Company’s relationships with carriers; information technology systems failures or capacity constraints interrupting the Company’s operations; factors that adversely impact the Company’s estimate of LTV; the Company’s dependence on agents to sell insurance plans; changes in the health insurance system and laws and regulation governing health insurance markets; the inability to effectively advertise the Company’s products; and our ability to successfully implement our business plan during a global economic downturn caused by the COVID-19 pandemic.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release, as well as the cautionary statements and other risk factors set forth in the Company’s Quarterly Report on Form 10-Q for the third quarter ended September 30, 2020 filed with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s ability to control or predict. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Use of Non-GAAP Financial Measures and Key Performance Indicators
In this press release, we use supplemental measures of our performance that are derived from our consolidated financial information, but which are not presented in our Consolidated Financial Statements prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include net income (loss) before interest expense, income tax expense (benefit) and depreciation and amortization expense, or EBITDA; Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor its results of operations.

Adjusted EBITDA represents EBITDA as further adjusted for share-based compensation, expense related to the accelerated vesting of certain equity awards, change in fair value of contingent consideration liability, Centerbridge Acquisition costs, severance costs and incremental organizational costs in connection with the IPO.  Adjusted EBITDA margin represents Adjusted EBITDA divided by net revenues.

We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our stakeholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this press release. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

The non-GAAP financial measures are not meant to be considered as indicators of performance in isolation from or as a substitute for net income (loss) prepared in accordance with GAAP, and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of each of EBITDA and Adjusted EBITDA to its most directly comparable GAAP financial measure, net income (loss), are presented in the tables below in this press release. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and include other expenses, costs and non-recurring items.

Management has provided its outlook regarding adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. Management has not reconciled these non-GAAP financial measures to the corresponding GAAP financial measures because guidance for the various reconciling items are not provided. Management is unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

“LTV/CAC” refers to the Lifetime Value of Commissions per Consumer Acquisition Cost, which we define as (i) aggregate commissions estimated to be collected over the estimated life of all commissionable Approved Submissions for the relevant period based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints, or LTV, divided by (ii) the cost to convert a prospect into a customer less other noncommission carrier revenue for such period, or CAC. CAC is comprised of cost of revenue, marketing and advertising expenses and customer care and enrollment expenses less other revenue and is presented on a per commissionable Approved Submission basis.  “Approved Submissions” refer to Submitted Policies approved by carriers for the identified product during the indicated period.  “LTV Per Approved Submission” refers to the Lifetime Value of Commissions per Approved Submission, which we define as (i) aggregate commissions estimated to be collected over the estimated life of all commissionable Approved Submissions for the relevant period based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints, divided by (ii) the number of commissionable Approved Submissions for such period.

Combined Results
On September 13, 2019, Centerbridge Capital Partners III, L.P., indirectly through a subsidiary of GoHealth Holdings, LLC, (formerly known as Blizzard Parent, LLC), an entity formed in contemplation of the acquisition, acquired a 100% interest in Norvax, LLC. We refer to this transaction as the “Centerbridge Acquisition.” As a result of the Centerbridge Acquisition, the Company’s financial results for the three and nine months ended September 30, 2019 are presented for two periods, the Predecessor and Successor periods, which relate to the period preceding the acquisition on September 13, 2019 and the period succeeding the acquisition, respectively. The Company’s financial results for the periods from July 1, 2019 through September 12, 2019 and from January 1, 2019 through September 12, 2019 are referred to as those of the “Predecessor” period. The Company’s financial results for the period from September 13, 2019 through September 30, 2019, the three months ended September 30, 2020 and the nine months ended September 30, 2020 are referred to as those of the “Successor” period. The Company’s results of operations as reported in our Consolidated Financial Statements for these periods are prepared in accordance with GAAP. Although GAAP requires that we report on the Company’s results for the period from July 1, 2019 through September 12, 2019, from January 1, 2019 through September 12, 2019 and the period from September 13, 2019 through September 30, 2019 separately, management views the Company’s operating results for the three and nine months ended September 30, 2019 by combining the results of the applicable Predecessor and Successor periods because such presentation provides the most meaningful comparison to its results for the three and nine months ended September 30, 2020.

The Company cannot adequately benchmark the operating results of the period from September 13, 2019 through September 30, 2019 against any of the current periods reported in its Consolidated Financial Statements without combining it with the period from July 1, 2019 through September 12, 2019 and the period from January 1, 2019 through September 12, 2019 and does not believe that reviewing the results of this period in isolation would be useful in identifying trends in or reaching conclusions regarding the Company’s overall operating performance. Management believes that the key performance metrics such as revenue, net (loss) income and Adjusted EBITDA for the Successor period when combined with the Predecessor period provides more meaningful comparisons to other periods and are useful in identifying current business trends. Accordingly, in addition to presenting the Company’s results of operations as reported in our Consolidated Financial Statements in accordance with GAAP, the tables and discussion throughout this press release also present the combined results for the three and nine months ended September 30, 2019.

The combined results for the three months ended September 30, 2019, which we refer to herein as the results for the “three months ended September 30, 2019” represent the sum of the reported amounts for the Predecessor period from July 1, 2019 through September 12, 2019 and the Successor period from September 13, 2019 through September 30, 2019. The combined results for the nine months ended September 30, 2019, which we refer to herein as the results for the “nine months ended September 30, 2019” represent the sum of the reported amounts for the Predecessor period from January 1, 2019 through September 12, 2019 and the Successor period from September 13, 2019 through September 30, 2019. The combined results do not reflect the actual results the Company would have achieved had the Centerbridge Acquisition occurred on January 1, 2019 and may not be indicative of future results. These combined results are not considered to be prepared in accordance with GAAP and have not been prepared on a pro forma basis, which would reflect pro forma adjustments including, but not limited to: amortization expense for intangible assets, share-based compensation expense related to the Centerbridge Acquisition and the IPO, and transaction-related costs related to the Centerbridge Acquisition and the IPO.

The following table sets forth the components of our results of operations for the periods indicated (unaudited):


Successor


Predecessor


Non-GAAP Combined


Three Months Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jul 1, 2019
through
Sep 12, 2019




Three Months Ended
Sep 30, 2019



(in thousands, except percentages,
share and per share amounts)


Dollars


% of Net
Revenues


Dollars


Dollars


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:

Commission

$    101,390

62.1%

$   13,723

$   64,542

$   78,265

73.0%

$    23,125

29.5%

Enterprise

61,970

37.9%

6,067

22,868

28,935

27.0%

33,035

114.2%

Net revenues

163,360

100.0%

19,790

87,410

107,200

100.0%

56,160

52.4%

Operating expenses:

Cost of revenue

25,827

15.8%

4,737

25,055

29,792

27.8%

(3,965)

-13.3%

Marketing and advertising

62,848

38.5%

7,140

21,332

28,472

26.6%

34,376

120.7%

Customer care and enrollment

52,896

32.4%

4,625

19,396

24,021

22.4%

28,875

120.2%

Technology

39,520

24.2%

518

31,856

32,374

30.2%

7,146

22.1%

General and administrative

156,551

95.8%

2,286

65,123

67,409

62.9%

89,142

132.2%

Amortization of intangible assets

23,514

14.4%

4,703

–

4,703

4.4%

18,811

400.0%

Acquisition related transaction costs

–

–

6,245

1,968

8,213

7.7%

(8,213)

-100.0%

Total operating expenses

361,156

221.1%

30,254

164,730

194,984

181.9%

166,172

85.2%

(Loss) income from operations

(197,796)

-121.1%

(10,464)

(77,320)

(87,784)

-81.9%

(110,012)

125.3%

Interest expense

8,636

5.3%

1,289

31

1,320

1.2%

7,316

554.2%

Other (income) expense

2

0.0%

(10)

67

57

0.1%

(55)

-96.5%

(Loss) income before income taxes

(206,434)

-126.4%

(11,743)

(77,418)

(89,161)

-83.2%

(117,273)

131.5%

Income tax expense (benefit)

62

0.0%

(37)

(78)

(115)

-0.1%

177

-153.9%

Net (loss) income

$   (206,496)

-126.4%

$  (11,706)

$  (77,340)

$  (89,046)

-83.1%

$ (117,450)

131.9%

Net loss attributable to noncontrolling

interests

(150,076)

NM

Net loss attributable to GoHealth, Inc.

$     (56,420)

NM

Net loss per share:

Net loss per share of Class A

common stock – basic and diluted

$         (0.65)

Weighted-average shares of Class A

common stock outstanding –

basic and diluted

84,182,961

Non-GAAP Financial Measures:

EBITDA

$   (173,021)

$    (5,659)

$  (76,183)

$  (81,842)

Adjusted EBITDA

$      39,284

$        682

$   15,569

$   16,251

Adjusted EBITDA margin

24.0%

3.4%

17.8%

15.2%

______________

*      NM = Not meaningful

 

The following table sets forth the reconciliations of GAAP net loss to EBITDA and Adjusted EBITDA for the periods indicated:


Successor


Predecessor


Non-GAAP
Combined


Three Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jul 1, 2019
through
Sep 12, 2019




Three Months
Ended
Sep 30, 2019



(in thousands)


Dollars


Dollars


Dollars


Dollars

Net revenues

$    163,360

$      19,790

$      87,410

$    107,200

Net loss

$  (206,496)

$    (11,706)

$    (77,340)

$    (89,046)

Interest expense

8,636

1,289

31

1,320

Income tax (benefit) expense

62

(37)

(78)

(115)

Depreciation and amortization expense

24,777

4,795

1,204

5,999

EBITDA

(173,021)

(5,659)

(76,183)

(81,842)

Share-based compensation expense (1)

2,770

–

–

–

Accelerated vesting of certain equity awards (2)

209,300

–

87,060

87,060

Centerbridge Acquisition costs (3)

–

6,245

4,609

10,854

IPO transaction costs (4)

235

–

–

–

Severance costs (5)

–

96

83

179

Adjusted EBITDA

$      39,284

$           682

$      15,569

$      16,251

Adjusted EBITDA margin

24.0%

3.4%

17.8%

15.2%

______________

(1)

Represents non-cash share-based compensation expense relating to stock options, restricted stock units and time-vesting units.

(2)

Represents non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO for the three months ended September 30, 2020 and the accelerated vesting of profit interests and incentive share units in connection with the Centerbridge Acquisition for the period from July 1, 2019 through September 12, 2019.

(3)

Represents legal, accounting, consulting, and other costs related to the Centerbridge Acquisition.

(4)

Represents legal, accounting, consulting, and other indirect costs associated with the Company’s IPO.

(5)

Represents costs associated with the termination of employment.

 

The following table summarizes share-based compensation by operating function:


Successor


Predecessor


Successor


Predecessor


Three Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
July 1, 2019
through
Sep 12, 2019


Nine
Months Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019

Marketing and advertising

$    24,709

$            –

$      1,674

$    24,829

$            –

$      1,674

Customer care and enrollment

$    11,993

$            –

$              –

$    12,050

$            –

$              –

Technology

$    32,748

$            –

$    27,059

$    32,907

$            –

$    27,059

General and administrative

$  142,620

$            –

$    58,327

$  143,360

$            –

$    58,327


Total share-based compensation expense

$  212,070

$            –

$    87,060

$  213,146

$            –

$    87,060

 

The following table sets forth the components of our results of operations for the periods indicated (unaudited):


Successor


Predecessor


Non-GAAP Combined


Nine Months Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine Months Ended
Sep 30, 2019



(in thousands, except percentages,
share and per share amounts)


Dollars


% of Net
Revenues


Dollars


Dollars


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:

Commission

$    310,506

72.0%

$   13,723

$ 175,834

$  189,557

75.6%

$  120,949

63.8%

Enterprise

120,921

28.0%

6,067

55,176

61,243

24.4%

59,678

97.4%

Net revenues

431,427

100.0%

19,790

231,010

250,800

100.0%

180,627

72.0%

Operating expenses:

Cost of revenue

104,520

24.2%

4,737

79,169

83,906

33.5%

20,614

24.6%

Marketing and advertising

110,556

25.6%

7,140

37,769

44,909

17.9%

65,647

146.2%

Customer care and enrollment

105,267

24.4%

4,625

49,149

53,774

21.4%

51,493

95.8%

Technology

49,818

11.5%

518

40,312

40,830

16.3%

8,988

22.0%

General and administrative

177,400

41.1%

2,286

79,219

81,505

32.5%

95,895

117.7%

Change in fair value of contingent
     consideration liability

19,700

4.6%

–

–

–

–

19,700

 NM 

Amortization of intangible assets

70,543

16.4%

4,703

–

4,703

1.9%

65,840

1400.0%

Acquisition related transaction costs

–

–

6,245

2,267

8,512

3.4%

(8,512)

-100.0%

Total operating expenses

637,804

147.8%

30,254

287,885

318,139

126.8%

319,665

100.5%

(Loss) income from operations

(206,377)

-47.8%

(10,464)

(56,875)

(67,339)

-26.8%

(139,038)

206.5%

Interest expense

24,378

5.7%

1,289

140

1,429

0.6%

22,949

1605.9%

Other (income) expense

(494)

-0.1%

(10)

114

104

0.0%

(598)

-575.0%

(Loss) income before income taxes

(230,261)

-53.4%

(11,743)

(57,129)

(68,872)

-27.5%

(161,389)

234.3%

Income tax expense (benefit)

38

0.0%

(37)

(66)

(103)

0.0%

141

-136.9%

Net (loss) income

$   (230,299)

-53.4%

$  (11,706)

$  (57,063)

$  (68,769)

-27.4%

$ (161,530)

234.9%

Net loss attributable to noncontrolling

interests

(150,076)

NM

Net loss attributable to GoHealth, Inc.

$     (80,223)

NM

Net loss per share:

Net loss per share of Class A

common stock – basic and diluted

$         (0.65)

Weighted-average shares of Class A

common stock outstanding –

basic and diluted

84,182,961

Non-GAAP Financial Measures:

EBITDA

$   (132,441)

$    (5,659)

$  (52,742)

$   (58,401)

Adjusted EBITDA

$    101,141

$        682

$   39,973

$    40,655

Adjusted EBITDA margin

23.4%

3.4%

17.3%

16.2%

______________

*      NM = Not meaningful

 

The following table sets forth the reconciliations of GAAP net loss to EBITDA and Adjusted EBITDA for the periods indicated:


Successor


Predecessor


Non-GAAP
Combined


Nine Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine Months
Ended
Sep 30, 2019



(in thousands)


Dollars


Dollars


Dollars


Dollars

Net revenues

$    431,427

$      19,790

$    231,010

$    250,800

Net loss

$  (230,299)

$    (11,706)

$    (57,063)

$    (68,769)

Interest expense

24,378

1,289

140

1,429

Income tax (benefit) expense

38

(37)

(66)

(103)

Depreciation and amortization expense

73,442

4,795

4,247

9,042

EBITDA

(132,441)

(5,659)

(52,742)

(58,401)

Share-based compensation expense (1)

3,846

–

–

–

Accelerated vesting of certain equity awards (2)

209,300

–

87,060

87,060

Change in fair value of contingent consideration liability (3)

19,700

–

–

–

Centerbridge Acquisition costs (4)

–

6,245

4,908

11,153

IPO transaction costs (5)

659

–

–

–

Severance costs (6)

77

96

747

843

Adjusted EBITDA

$    101,141

$           682

$      39,973

$      40,655

Adjusted EBITDA margin

23.4%

3.4%

17.3%

16.2%

______________

(1)

Represents non-cash share-based compensation expense relating to stock options, restricted stock units and time-vesting units.

(2)

Represents non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO for the nine months ended September 30, 2020 and the accelerated vesting of profit interests and incentive share units in connection with the Centerbridge Acquisition for the period from January 1, 2019 through September 12, 2019.

(3)

Represents the change in fair value of the contingent consideration liability due to the predecessor owners of the Company arising from the Centerbridge Acquisition.

(4)

Represents legal, accounting, consulting, and other costs related to the Centerbridge Acquisition.

(5)

Represents legal, accounting, consulting, and other indirect costs associated with the Company’s IPO.

(6)

Represents costs associated with the termination of employment.

 


GoHealth, Inc.


Condensed Consolidated Balance Sheets


(dollars in thousands, except share and per share amounts)


Successor


Successor


September 30,
2020


December 31,
2019


(Unaudited)


Assets

Current assets:

Cash and cash equivalents

$

294,598

$

12,276

Accounts receivable, net of allowance for doubtful accounts of $522 in 2020 and $904 in 2019

7,921

24,461

Commissions receivable – current

95,122

101,078

Prepaid expenses and other current assets

19,530

5,954

Total current assets

417,171

143,769

Commissions receivable – non-current

405,697

281,853

Property, equipment, and capitalized software, net

15,463

6,339

Intangible assets, net

712,240

782,783

Goodwill

386,553

386,553

Other long-term assets

1,134

998

Total assets

$

1,938,258

$

1,602,295


Liabilities and stockholders/members’ equity

Current liabilities:

Accounts payable

$

9,181

$

13,582

Accrued liabilities

20,775

22,568

Commissions payable – current

52,029

56,003

Deferred revenue

55,406

15,218

Current portion of debt

4,170

3,000

Other current liabilities

3,765

2,694

Total current liabilities

145,326

113,065

Non-current liabilities:

Commissions payable – non-current

129,446

97,489

Long-term debt, net of current portion

396,817

288,233

Contingent consideration

—

242,700

Other non-current liabilities

3,500

664

Total non-current liabilities

529,763

629,086

Commitments and contingencies (Note 11)

Stockholders’/members’ equity:

Members’ interest

—

860,161

Class A common stock – $0.0001 par value; 1,100,000,000 shares authorized; 84,182,961 shares issued and outstanding at September 30, 2020

8

—

Class B common stock – $0.0001 par value; 690,000,000 shares authorized; 230,722,681 shares issued and outstanding at September 30, 2020

23

—

Preferred stock – $0.0001 par value; 20,000,000 shares authorized; no shares issued and outstanding at September 30, 2020

—

—

Additional paid-in capital

392,491

—

Accumulated other comprehensive loss

(85)

(17)

Accumulated deficit

(54,758)

Total stockholders’ equity attributable to GoHealth, Inc./members’ equity

337,679

860,144

Non-controlling interests

925,490

—

Total stockholders’/members’ equity

1,263,169

860,144

Total liabilities and stockholders’/members’ equity

$

1,938,258

$

1,602,295

 


GoHealth, Inc.


Condensed Consolidated Statements of Cash Flows


(dollars in thousands, unaudited)


Successor


Predecessor


Nine Months
Ended September
30, 2020


Period from
September 13,
2019 through
September 30,
2019


Period from
January 1, 2019
through
September 12,
2019


Operating activities:

Net loss

$

(230,299)

$

(11,706)

$

(57,063)

Adjustments to reconcile net loss to net cash provided by operating activities:

Share-based compensation

213,146

—

87,060

Depreciation and amortization

2,899

92

4,247

Amortization of intangible assets

70,543

4,703

—

Amortization of debt discount and issuance costs

1,744

79

—

Change in fair value of contingent consideration

19,700

—

—

Other non-cash items

(1,100)

285

150

Changes in assets and liabilities:

Accounts receivable

17,552

(122)

(108)

Commissions receivable

(117,888)

(15,405)

(63,448)

Prepaid expenses and other assets

(13,576)

(140)

1,325

Accounts payable

(4,402)

3,276

(1,981)

Accrued liabilities

(1,793)

(5,028)

17,860

Deferred revenue

40,188

18,098

1,926

Commissions payable

27,983

8,283

19,228

Other liabilities

4,138

13,728

85

Net cash provided by operating activities

28,835

16,143

9,281


Investing activities:

Acquisition of business, net of cash

—

(807,591)

—

Purchases of property, equipment and software

(12,023)

(813)

(5,597)

Net cash used in investing activities

(12,023)

(808,404)

(5,597)


Financing activities:

Proceeds from issuance of Class A common stock sold in initial public offering, net of offering costs

852,407

—

—

Payment of partial consideration of the Blocker Merger

(96,165)

—

—

Purchase of LLC Interests

(508,320)

—

—

Settlement of Senior Preferred Earnout Units

(100,000)

—

—

Issuance of preferred units

—

541,263

—

Proceeds received upon issuance of common units

10,000

—

—

Borrowings under term loans

117,000

300,000

—

Principal payments under term loans

(2,835)

—

—

Borrowings under revolving credit facilities

—

—

56,534

Payments under revolving credit facilities

—

—

(59,915)

Debt issuance cost payments

(6,291)

(9,283)

—

Principal payments under capital lease obligations

(218)

(270)

(68)

Net cash provided by (used in) financing activities

265,578

831,710

(3,449)

Effect of exchange rate changes on cash

(68)

(2)

(32)

Increase in cash and cash equivalents

282,322

39,447

203

Cash and cash equivalents at beginning of period

12,276

708

505

Cash and cash equivalents at end of period

$

294,598

$

40,155

$

708


Supplemental disclosure of cash flow information:

Non-cash investing and financing activities:

Purchases of property, equipment and software included in accounts payable

$

1,104

$

277

$

113

Purchases of property, equipment and software under capital leases

$

—

$

—

$

744

Issuance of senior preferred earnout units to settle contingent consideration liability

$

100,000

$

—

$

—

Issuance of common A and B units to settle contingent consideration liability

$

100,000

$

—

$

—

Issuance of Class A and Class B common stock in connection with the Transactions

$

30

$

—

$

—

Settlement of contingent consideration liability

$

62,400

$

—

$

—

 



Segment Information

The following table sets forth operating segment results for the periods indicated:


Successor


Predecessor


Non-GAAP Combined


Three Months Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jul 1, 2019
through
Sep 12, 2019




Three Months Ended
Sep 30, 2019



(in thousands, except percentages)


Dollars


% of Net
Revenues


Dollars


Dollars


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:

Medicare – Internal

$    133,723

81.9%

$   14,208

$   48,872

$  63,080

58.8%

$    70,643

112.0%

Medicare – External

20,252

12.4%

3,865

16,577

20,442

19.1%

(190)

-0.9%

IFP and Other – Internal

6,147

3.8%

764

11,129

11,893

11.1%

(5,746)

-48.3%

IFP and Other – External

3,238

2.0%

953

10,832

11,785

11.0%

(8,547)

-72.5%

Total revenues

163,360

100.0%

19,790

87,410

107,200

100.0%

56,160

52.4%

Segment profit:

Medicare – Internal

49,464

30.3%

2,500

20,218

22,718

21.2%

26,746

117.7%

Medicare – External

720

0.4%

734

(4,178)

(3,444)

-3.2%

4,164

-120.9%

IFP and Other – Internal

(245)

-0.1%

(2,446)

1,583

(863)

-0.8%

618

-71.6%

IFP and Other – External

147

0.1%

495

378

873

0.8%

(726)

-83.2%

Total segment profit

50,086

30.7%

1,283

18,001

19,284

18.0%

30,802

159.7%

Corporate expense

224,368

137.3%

799

93,353

94,152

87.8%

130,216

138.3%

Amortization of intangible assets

23,514

14.4%

4,703

–

4,703

4.4%

18,811

400.0%

Transaction costs

–

–

6,245

1,968

8,213

7.7%

(8,213)

-100.0%

Interest expense

8,636

5.3%

1,289

31

1,320

1.2%

7,316

554.2%

Other (income) expense

2

0.0%

(10)

67

57

0.1%

(55)

-96.5%

Loss before income taxes

$  (206,434)

-126.4%

$  (11,743)

$  (77,418)

$ (89,161)

-83.2%

$ (117,273)

131.5%

______________

*      NM = Not meaningful

 

The following table sets forth operating segment results for the periods indicated:


Successor


Predecessor


Non-GAAP Combined


Nine Months Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine Months Ended
Sep 30, 2019



(in thousands, except percentages)


Dollars


% of Net
Revenues


Dollars


Dollars


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:

Medicare – Internal

$   316,211

73.3%

$   14,208

$ 102,196

$ 116,404

46.4%

$  199,807

171.6%

Medicare – External

77,305

17.9%

3,865

55,981

59,846

23.9%

17,459

29.2%

IFP and Other – Internal

21,798

5.1%

764

37,909

38,673

15.4%

(16,875)

-43.6%

IFP and Other – External

16,113

3.7%

953

34,924

35,877

14.3%

(19,764)

-55.1%

Total revenues

431,427

100.0%

19,790

231,010

250,800

100.0%

180,627

72.0%

Segment profit:

Medicare – Internal

123,946

28.7%

2,500

40,024

42,524

17.0%

81,422

191.5%

Medicare – External

892

0.2%

734

4,893

5,627

2.2%

(4,735)

-84.1%

IFP and Other – Internal

181

0.0%

(2,446)

2,195

(251)

-0.1%

432

-172.1%

IFP and Other – External

789

0.2%

495

1,748

2,243

0.9%

(1,454)

-64.8%

Total segment profit

125,808

29.2%

1,283

48,860

50,143

20.0%

75,665

150.9%

Corporate expense

241,942

56.1%

799

103,469

104,268

41.6%

137,674

132.0%

Change in fair value of contingent

   consideration liability

19,700

4.6%

–

–

–

–

19,700

NM

Amortization of intangible assets

70,543

16.4%

4,703

–

4,703

1.9%

65,840

1400.0%

Transaction costs

–

–

6,245

2,267

8,512

3.4%

(8,512)

-100.0%

Interest expense

24,378

5.7%

1,289

140

1,429

0.6%

22,949

1605.9%

Other (income) expense

(494)

-0.1%

(10)

114

104

0.0%

(598)

-575.0%

Loss before income taxes

$ (230,261)

-53.4%

$  (11,743)

$  (57,129)

$  (68,873)

-27.5%

$ (161,388)

234.3%

______________

*      NM = Not meaningful

 

The following table presents the number of Submitted Policies by product for the Medicare segments for the three and nine months ended September 30, 2020 and 2019, split between those submissions that are commissionable (compensated through commissions received from carriers) and those that are non-commissionable (compensated via hourly fees and enrollment fees):


Successor


Predecessor


Combined


Successor


Predecessor


Combined


Three Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
July 1, 2019
through
Sep 12, 2019




Three
Months
Ended
Sep 30, 2019


Nine
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine
Months
Ended
Sep 30, 2019

Medicare Advantage

97,675

13,608

51,078

64,686

314,088

13,608

134,173

147,781

Medicare Supplement

1,245

763

3,091

3,854

6,164

763

11,205

11,968

Prescription Drug Plans

2,006

452

2,217

2,669

6,437

452

7,675

8,127

Total Medicare – Commissionable

100,926

14,823

56,386

71,209

326,689

14,823

153,053

167,876

Medicare Advantage

6,472

1,005

2,338

3,343

20,806

1,005

4,240

5,245

Medicare Supplement

1,716

234

635

869

5,262

234

1,051

1,285

Prescription Drug Plans

1,034

155

335

490

2,787

155

471

626

Total Medicare – Non Commissionable

9,222

1,394

3,308

4,702

28,855

1,394

5,762

7,156

Total Medicare Submitted Policies

110,148

16,217

59,694

75,911

355,544

16,217

158,815

175,032

 

The following tables present the number of Approved Submissions by product relating to commissionable policies for the Medicare segments for the three and nine months ended September 30, 2020 and 2019. Only commissionable policies are used to calculate our LTV.


Medicare—Internal


Successor


Predecessor


Combined


Successor


Predecessor


Combined


Three
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
July 1, 2019
through
Sep 12, 2019




Three
Months
Ended
Sep 30, 2019


Nine
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine
Months
Ended
Sep 30, 2019

Medicare Advantage

77,186

8,940

36,270

45,210

228,612

8,940

86,544

95,484

Medicare Supplement

315

199

944

1,143

1,602

199

3,198

3,397

Prescription Drug Plans

1,574

313

1,611

1,924

5,319

313

5,078

5,391

Total Medicare – Internal

Commissionble Approved Submissions

79,075

9,452

38,825

48,277

235,533

9,452

94,820

104,272


Medicare—External


Successor


Predecessor


Combined


Successor


Predecessor


Combined


Three
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
July 1, 2019
through
Sep 12, 2019




Three
Months
Ended
Sep 30, 2019


Nine
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine
Months
Ended
Sep 30, 2019

Medicare Advantage

19,390

3,441

15,551

18,992

80,656

3,441

48,341

51,782

Medicare Supplement

844

466

1,852

2,318

4,035

466

7,065

7,531

Prescription Drug Plans

352

139

606

745

1,206

139

2,597

2,736

Total Medicare – External

Commissionble Approved Submissions

20,586

4,046

18,009

22,055

85,897

4,046

58,003

62,049

 

The following table presents the LTV per Approved Submission by product for the Medicare segments for the three and nine months ended September 30, 2020 and 2019:


Successor


Predecessor


Combined Non-GAAP


Successor


Predecessor


Combined Non-GAAP


Three
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
July 1, 2019
through
Sep 12, 2019




Three
Months
Ended
Sep 30, 2019


Nine
Months
Ended
Sep 30, 2020


Period from
Sep 13, 2019
through
Sep 30, 2019


Period from
Jan 1, 2019
through
Sep 12, 2019




Nine
Months
Ended
Sep 30, 2019

Medicare Advantage

$       987

$    1,013

$       922

$       939

$       913

$    1,013

$       888

$       899

Medicare Supplement

$       934

$       951

$       846

$       867

$       929

$       951

$       911

$       914

Prescription Drug Plans

$       215

$       200

$       198

$       198

$       216

$       200

$       194

$       194

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/gohealth-reports-third-quarter-2020-results-and-increases-2020-outlook-as-a-result-of-strong-medicare-enrollments-and-operating-leverage-301171322.html

SOURCE GoHealth, Inc.