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Repare Therapeutics Reports Third Quarter 2020 Financial Results and Operational Highlights

Repare Therapeutics Reports Third Quarter 2020 Financial Results and Operational Highlights

– Initiated GLP toxicology studies for newly designated RP-6306, the Company’s CCNE-1 synthetic-lethal inhibitor program

– Phase 1 clinical trial for RP-6306 is anticipated to commence in Q3 2021, reflecting an accelerated timeline from prior guidance

– Initiated a Phase 1/2 clinical trial for RP-3500 as a monotherapy and in combination with talazoparib in patients with solid tumors as previously reported

CAMBRIDGE, Mass. & MONTREAL–(BUSINESS WIRE)–
Repare Therapeutics Inc. (“Repare” or the “Company”) (Nasdaq: RPTX), a leading clinical-stage precision oncology company enabled by its proprietary synthetic lethality approach to the discovery and development of novel therapeutics, today reported financial results for the third quarter ended September 30, 2020, as well as recent business highlights.

“Since the closing of our IPO in June, we have made substantial and consistent progress to advance the development of our lead RP-3500 program, entering the clinic in July following the opening of a Phase 1/2 US IND for use as a monotherapy and in combination with talazoparib, all in patients with solid tumors,” said Lloyd M. Segal, President and Chief Executive Officer of Repare. “We also expect to initiate a Phase 1 clinical trial for RP-6306 in the third quarter of 2021, ahead of our previously conveyed timeline where we anticipated an IND filing in the second half of 2021. We believe that our work in advancing a first-in-class product candidate into the clinic further validates our progress in identifying new synthetic lethal pairs and developing potent and selective inhibitors.”

Third Quarter 2020 Review and Operational Updates:

  • Advanced CCNE-1 synthetic lethal inhibitor (now designated RP-6306) program into Good Laboratory Practice (GLP) toxicology studies ahead of original timeline. The Company anticipates initiating a Phase 1 clinical trial for RP-6306 in the third quarter of 2021, which is ahead of its original guidance of an IND filing in the second half of 2021.
  • Initiated a Phase 1/2 clinical trial evaluating RP-3500 as a monotherapy and in combination with Pfizer’s PARP inhibitor, talazoparib, in patients with solid tumors. In July 2020, the Company began dosing in a Phase 1/2 clinical trial of RP-3500, a potent and selective oral small molecule inhibitor of ATR (Ataxia-Telangiectasia and Rad3-related protein kinase) for the treatment of solid tumors in patients with specific genome instability-related genetic alterations, including those in the ATM gene (ataxia telangiectasia mutated kinase). RP-3500 will be evaluated as a monotherapy and in combination with Pfizer’s PARP inhibitor, talazoparib. Topline results are expected to be reported in the second half of 2021.
  • Inaugurated a newly expanded laboratory and office facility in Montreal, Quebec. In September 2020, the Company materially expanded its research footprint with the addition of 17,000 square feet of combined laboratory and office space in a newly built facility. The new facility more than doubled the Company’s laboratory capacity for its CRISPR-enabled genome-wide synthetic lethal target platform, SNIPRx®, including dedicated space for work related to accelerating all of Repare’s preclinical assets, including those under its research collaboration with Bristol Myers Squibb.
  • Appointed new executive officer. In October 2020, Repare appointed Dr. Laurence F. Akiyoshi as its Executive Vice-President, Organizational and Leadership Development. Dr. Akiyoshi has joined Repare’s executive team after having served as an independent consultant to the Company for the past two years. In addition to his work with Repare, Dr. Akiyoshi has operated a private organizational development consulting practice that has advised numerous companies on scaling their organizations to support rapid growth. His clients have included leadership teams at Apple, LinkedIn, CrowdStrike and Box. Dr. Akiyoshi will be principally focused on organization design, leadership development, and attracting and retaining key team members necessary for Repare’s achievement of its corporate objectives.

Third Quarter 2020 Financial Results:

  • Cash and restricted cash: Cash and restricted cash as of September 30, 2020 were $348.1 million.
  • Research and development expenses, net of tax credits (Net R&D): Net R&D expenses were $10.1 million and $27.7 million for the three and nine month periods ended September 30, 2020, respectively, as compared to $5.6 million and $14.2 million in the same periods in the prior year, respectively. Increases in R&D for the three and nine month periods ended September 30, 2020 were primarily due to increases in development costs related to Repare’s RP-3500 and RP-6306 programs, as well as increases in personnel-related expenses and certain other R&D expenses.
  • General and administrative (G&A) expenses: G&A expenses were $4.0 million and $9.6 million for the three and nine month periods ended September 30, 2020, respectively, as compared to $1.3 million and $3.4 million in the same periods in the prior year, respectively. Increases in G&A for the three and nine month periods ended September 30, 2020 were due to increases in payroll and personnel costs as well as increases in legal, professional and D&O insurance costs in connection with preparations for becoming and now operating as a public company.
  • Net loss: Net loss was $13.8 million, or $0.37 per share in the third quarter of 2020 and $38.2 million, or $2.63 per share, in the first nine months of 2020.

About Repare Therapeutics’ SNIPRx® Platform

Repare’s SNIPRx® platform is a genome-wide CRISPR-based screening approach that utilizes proprietary isogenic cell lines to identify novel and known synthetic lethal gene pairs and the corresponding patients who are most likely to benefit from the Company’s therapies based on the genetic profile of their tumors. Repare’s platform enables the development of precision therapeutics in patients whose tumors contain one or more genomic alterations identified by SNIPRx® screening, in order to selectively target those patients most likely to achieve clinical benefit from resulting product candidates.

About Repare Therapeutics, Inc.

Repare Therapeutics is a leading clinical-state precision oncology company enabled by its proprietary synthetic lethality approach to the discovery and development of novel therapeutics. The Company utilizes its genome-wide, CRISPR-enabled SNIPRx® platform to systematically discover and develop highly targeted cancer therapies focused on genomic instability, including DNA damage repair. The Company’s pipeline includes its lead product candidate RP-3500, a potential leading ATR inhibitor, as well as CCNE1-SL inhibitor and Polθ inhibitor programs. For more information, please visit reparerx.com.

SNIPRx® is a registered trademark of Repare Therapeutics Inc.

Forward-Looking Statement

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical facts are “forward-looking statements. These statements may be identified by words such as “aims,” “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “plans,” “possible,” “potential,” “seeks,” “will” and variations of these words or similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding the discovery of potential product candidates using SNIPRx® platform; and the clinical development of the Company’s pipeline and its research and development programs, including the anticipated timing of its clinical trials of RP-3500 and RP-6306; and the development of preclinical assets pursuant to the Company’s collaboration with Bristol Myers Squibb. These forward-looking statements are based on the Company’s expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties that could cause the Company’s clinical development programs, future results or performance to differ materially from those expressed or implied by the forward-looking statements. Many factors may cause differences between current expectations and actual results, including the impacts of the COVID-19 pandemic on the Company’s business, clinical trials and financial position, unexpected safety or efficacy data observed during preclinical studies or clinical trials, clinical trial site activation or enrollment rates that are lower than expected, changes in expected or existing competition, changes in the regulatory environment, the uncertainties and timing of the regulatory approval process, and unexpected litigation or other disputes. Other factors that may cause the Company’s actual results to differ from those expressed or implied in the forward-looking statements in this press release are identified in the section titled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 13, 20202, and its subsequent filings with the SEC. The Company expressly disclaims any obligation to update any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.

 

Repare Therapeutics Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands of U.S. dollars, except share data)

 

 

 

As of

September 30,

 

 

As of

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash

 

$

347,872

 

 

$

94,797

 

Research and development tax credits receivable

 

 

1,637

 

 

 

1,080

 

Other receivables

 

 

3,232

 

 

 

1,976

 

Prepaid expenses and other current assets

 

 

8,524

 

 

 

719

 

Total current assets

 

 

361,265

 

 

 

98,572

 

Property and equipment, net

 

 

3,246

 

 

 

2,390

 

Restricted cash

 

 

203

 

 

 

208

 

Operating lease right-of-use assets

 

 

5,022

 

 

 

1,034

 

Other assets

 

 

288

 

 

 

359

 

Deferred tax assets

 

 

218

 

 

 

132

 

TOTAL ASSETS

 

$

370,242

 

 

$

102,695

 

LIABILITIES, CONVERTIBLE PREFERRED SHARES AND

SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,843

 

 

$

2,127

 

Accrued expenses and other current liabilities

 

 

4,923

 

 

 

1,276

 

Operating lease liability, current portion

 

 

794

 

 

 

625

 

Deferred revenue, current portion

 

 

2,150

 

 

 

—

 

Income tax payable

 

 

483

 

 

 

218

 

Total current liabilities

 

 

10,193

 

 

 

4,246

 

Operating lease liability, net of current portion

 

 

3,259

 

 

 

439

 

Deferred revenue, net of current portion

 

 

55,992

 

 

 

8,142

 

TOTAL LIABILITIES

 

 

69,444

 

 

 

12,827

 

Series A convertible preferred shares, no par value per share; 0 shares and unlimited

shares authorized as of September 30, 2020 and December 31, 2019, respectively; 0

shares and 11,090,135 shares issued and outstanding as of September 30, 2020 and

December 31, 2019, respectively; liquidation and redemption value of $0 and

$52,750 as of September 30, 2020 and December 31, 2019, respectively

 

 

—

 

 

 

53,749

 

Series B convertible preferred shares, no par value per share; 0 shares and unlimited

shares authorized as of September 30, 2020 and December 31, 2019, respectively; 0

shares and 10,468,258 shares issued and outstanding as of September 30, 2020 and

December 31, 2019, respectively; liquidation and redemption value of $0 and

$82,496 as of September 30, 2020 and December 31, 2019, respectively

 

 

—

 

 

 

82,248

 

TOTAL CONVERTIBLE PREFERRED SHARES

 

 

—

 

 

 

135,997

 

SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Preferred shares, no par value per share; unlimited shares and 0 shares authorized

as of September 30, 2020 and December 31, 2019, respectively; 0 shares issued

and outstanding as of September 30, 2020 and December 31, 2019, respectively

 

 

—

 

 

 

—

 

Common shares, no par value per share; unlimited shares authorized as of

September 30, 2020 and December 31, 2019; 36,765,013 and 1,528,374 shares

issued and outstanding as of September 30, 2020, and December 31, 2019,

respectively

 

 

383,852

 

 

 

1

 

Additional paid-in capital

 

 

5,041

 

 

 

3,811

 

Accumulated deficit

 

 

(88,095

)

 

 

(49,941

)

Total shareholders’ equity (deficit)

 

 

300,798

 

 

 

(46,129

)

TOTAL LIABILITIES, CONVERTIBLE PREFERRED SHARES AND

SHAREHOLDERS’ EQUITY (DEFICIT)

 

$

370,242

 

 

$

102,695

 

Repare Therapeutics Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands of U.S. dollars, except share and per share data)

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development, net of tax credits

 

$

10,091

 

 

$

5,618

 

 

$

27,674

 

 

$

14,174

 

General and administrative

 

 

3,996

 

 

 

1,250

 

 

 

9,551

 

 

 

3,358

 

Total operating expenses

 

 

14,087

 

 

 

6,868

 

 

 

37,225

 

 

 

17,532

 

Loss from operations

 

 

(14,087

)

 

 

(6,868

)

 

 

(37,225

)

 

 

(17,532

)

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized gain (loss) on foreign

exchange

 

 

290

 

 

 

(152

)

 

 

(846

)

 

 

147

 

Change in fair value of Series A preferred share

tranche obligation

 

 

—

 

 

 

(637

)

 

 

—

 

 

 

(1,337

)

Interest income

 

 

156

 

 

 

—

 

 

 

156

 

 

 

—

 

Other expense

 

 

(4

)

 

 

(2

)

 

 

(10

)

 

 

(5

)

Total other income (expense), net

 

 

442

 

 

 

(791

)

 

 

(700

)

 

 

(1,195

)

Loss before income taxes

 

 

(13,645

)

 

 

(7,659

)

 

 

(37,925

)

 

 

(18,727

)

Income tax expense

 

 

(106

)

 

 

(29

)

 

 

(229

)

 

 

(158

)

Net loss and comprehensive loss

 

$

(13,751

)

 

$

(7,688

)

 

$

(38,154

)

 

$

(18,885

)

Net loss attributable to common shareholders—basic and

diluted

 

$

(13,751

)

 

$

(7,688

)

 

$

(38,154

)

 

$

(18,885

)

Net loss per share attributable to common

shareholders—basic and diluted

 

$

(0.37

)

 

$

(5.03

)

 

$

(2.63

)

 

$

(12.36

)

Weighted-average common shares outstanding—basic

and diluted

 

 

36,756,694

 

 

 

1,528,374

 

 

 

14,486,896

 

 

 

1,528,374

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repare Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands of U.S. dollars)

 

 

Nine Months Ended

September 30,

 

 

2020

 

2019

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net loss and comprehensive loss for the period

 

$

(38,154

)

 

$

(18,885

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Share-based compensation expense

 

 

1,531

 

 

 

313

 

Depreciation expense

 

 

610

 

 

 

416

 

Change in fair value of the Series A preferred shares tranche obligation

 

 

—

 

 

 

1,350

 

Non-cash lease expense

 

 

520

 

 

 

191

 

Foreign exchange loss (gain)

 

 

835

 

 

 

(432

)

Interest income

 

 

(36

)

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(8,834

)

 

 

(142

)

Research and development tax credits receivable

 

 

(584

)

 

 

(398

)

Other receivables

 

 

(1,247

)

 

 

(964

)

Deferred tax asset

 

 

(86

)

 

 

(83

)

Other non-current assets

 

 

71

 

 

 

(4

)

Accounts payable

 

 

(1,120

)

 

 

1,157

 

Accrued expenses and other current liabilities

 

 

3,540

 

 

 

318

 

Operating lease liability, current portion

 

 

(97

)

 

 

29

 

Income tax payable

 

 

265

 

 

 

132

 

Operating lease liability, net of current portion

 

 

(351

)

 

 

(223

)

Deferred revenue

 

 

50,000

 

 

 

8,142

 

Net cash provided by (used in) operating activities

 

 

6,863

 

 

 

(9,083

)

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(516

)

 

 

(561

)

Net cash used in investing activities

 

 

(516

)

 

 

(561

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of Series A preferred shares, net

 

 

—

 

 

 

20,995

 

Proceeds from issuance of Series B preferred shares, net

 

 

—

 

 

 

82,248

 

Proceeds from exercise of stock options

 

 

510

 

 

 

—

 

Proceeds from issuance of warrant

 

 

15,000

 

 

 

—

 

Net proceeds from issuance of common shares in initial public offering

 

 

232,043

 

 

 

—

 

Net cash provided by financing activities

 

 

247,553

 

 

 

103,243

 

Effect of exchange rate fluctuations on cash held

 

 

(830

)

 

 

407

 

Net Increase In Cash And Restricted Cash

 

 

253,070

 

 

 

94,006

 

Cash and restricted cash at beginning of period

 

 

95,005

 

 

 

10,929

 

Cash and restricted cash at end of period

 

$

348,075

 

 

$

104,935

 

 

 

 

 

 

 

 

 

 

Reconciliation Of Cash And Restricted Cash

 

 

 

 

 

 

 

 

Cash

 

$

347,872

 

 

$

104,731

 

Restricted cash

 

 

203

 

 

 

204

 

Total cash and restricted cash

 

$

348,075

 

 

$

104,935

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure Of Cash Flow Information:

 

 

 

 

 

 

 

 

Cash interest received

 

$

120

 

 

$

—

 

Property and equipment purchases in accounts payable and accrued expenses and

other current liabilities

 

$

950

 

 

$

542

 

Right-of-use asset obtained in exchange for new operating lease liability

 

$

4,516

 

 

$

1,074

 

Conversion of Series A and B preferred shares into common shares

 

$

135,997

 

 

$

—

 

Conversion of warrant into common shares

 

$

15,000

 

 

$

—

 

 

Repare Contact:

Steve Forte

Chief Financial Officer

Repare Therapeutics Inc.

[email protected]

Investors:

Kimberly Minarovich

Argot Partners

[email protected]

Media:

David Rosen

Argot Partners

[email protected]

212-600-1902

KEYWORDS: United States North America Canada Massachusetts

INDUSTRY KEYWORDS: Biotechnology Health Pharmaceutical Clinical Trials Oncology

MEDIA:

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Paycom to Participate in Upcoming Investor Conferences

Paycom to Participate in Upcoming Investor Conferences

OKLAHOMA CITY–(BUSINESS WIRE)–
Paycom Software, Inc. (NYSE:PAYC), a leading provider of comprehensive, cloud-based human capital management software, today announced that the company will participate in the following virtual investor events:

  • RBC Capital Markets Global Technology, Internet, Media & Telecommunications Conference

    Date: November 18, 2020

    Time: 2:40 p.m. Eastern time
  • Credit Suisse 24th Annual Technology Conference

    Date: December 2, 2020

    Time: 5:30 p.m. Eastern time
  • Barclays Global Technology, Media and Telecommunications Conference

    Date: December 9, 2020

    Time: 1:00 p.m. Eastern time

A live webcast of the presentations will be available at investors.paycom.com under the “Events” tab. Presentations may include forward-looking information. Webcast replays will be available for 90 days following the applicable event.

About Paycom

As a leader in payroll and HR technology, Oklahoma City-based Paycom redefines the human capital management industry by allowing companies to effectively navigate a rapidly changing business environment. Its cloud-based software solution is based on a core system of record maintained in a single database for all human capital management functions, providing the functionality that businesses need to manage the complete employment lifecycle, from recruitment to retirement. Paycom has the ability to serve businesses of all sizes and in every industry. As one of the leading human capital management providers, Paycom serves clients in all 50 states from offices across the country.

Investor Relations:

James Samford

[email protected]

KEYWORDS: United States North America Oklahoma

INDUSTRY KEYWORDS: Professional Services Data Management Technology Human Resources Software Accounting

MEDIA:

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Corvus Hosting R&D Symposium on November 12 to Highlight COVID-19 Program and Updated Study Data Presented at SITC Annual Meeting

Data shows CPI-006 provide
d
enhanced and prolonged
polyclonal
humoral immunity to SARS
–
CoV
–
2

Plans
to
initiate pivotal
,
randomized
,
double blind trial
in December
with results expected mid
–
2021

BURLINGAME, Calif., Nov. 11, 2020 (GLOBE NEWSWIRE) — Corvus Pharmaceuticals, Inc. (NASDAQ: CRVS), a clinical-stage biopharmaceutical company, today announced that it is hosting an R&D Symposium on November 12, 2020 from 11:00 am – 1:00 pm ET (8:00 – 10:00 am PT) to highlight its COVID-19 program data, including updated data being presented this week in a poster presentation and an oral presentation at the 2020 Society for Immunotherapy of Cancer (SITC) Annual Meeting. The R&D Symposium will be hosted by Richard A. Miller, M.D., president and chief executive officer of Corvus, and other members of the Corvus team. The agenda includes the following guest speakers:

  • Tullia C. Bruno, PhD, Assistant Professor, Department of Immunology at UPMC Hillman Cancer Center. Dr. Bruno will provide an overview of B cell biology and antibodies.
  • Gerard J. Criner, M.D., Chair and Professor, lead investigator of the CPI-006 COVID-19 Phase 1 study, and Chair and Professor, Thoracic Medicine and Surgery at the Lewis Katz School of Medicine at Temple University. Dr. Criner will provide an overview of current COVID-19 therapies.

Members of the Corvus team will provide an overview of the preclinical biology and data on CPI-006, plans for the CPI-006 pivotal study for patients with COVID-19, and a general pipeline update covering the Company’s cancer programs. The speakers will be available for questions and answers during the program.

Corvus’ COVID-19 program includes its fully enrolled Phase 1 study investigating the potential for CPI-006 to provide a novel immunotherapy approach for hospitalized patients with COVID-19. This novel immunotherapy may provide a therapeutic benefit from the activation of a polyclonal antibody response to the SARS-CoV-2 virus and the induction of long term immunity through active immunization. Based on the study data to-date, the Company plans to initiate a pivotal, randomized, double blind study of CPI-006 in hospitalized COVID-19 patients in December with results expected around mid-2021.

Separate from the R&D Symposium, the updated data from the CPI-006 COVID-19 Phase 1 study is being presented in a poster presentation and separate oral presentation at SITC on Friday, November 13 at 12:15 pm ET as part of Session 301, which is titled “Hot Topic Symposium: COVID-19 and Cancer.” The oral presentation, entitled “Immunotherapy with B cell activating antibody CPI-006 in patients with mild to moderate COVID-19 stimulates anti-SARS-CoV-2 antibody response, memory B cells, and memory/effector T cells,” will be delivered by Dr. Criner. The SITC poster presentation is available on Corvus’ website on the COVID-19 page and the oral presentation slides will be available in the same location after the session concludes.

The data presented at SITC include results from 22 patients enrolled in the Phase 1 study utilizing a cut-off date of November 4, 2020. This includes enrollment in all four dosing cohorts of the study (0.3, 1.0, 3.0 and 5.0 mg/kg). All patients received a single dose of CPI-006 administered via a 5-10 minute intravenous (IV) infusion. The median age of the patients was 58 years (range 23-76 years). All of the patients had comorbidities that increased their COVID-19 risk including diabetes, coronary disease, hypertension, obesity, chronic kidney disease, chronic lung disease and/or cancer. 95% of patients were from minority populations that are at high risk of COVID-19 complications. The results from the study support the immune enhancing role of CPI-006 in COVID-19:

  • All patients had relatively low titers of anti-SARS-CoV-2 antibodies at the time of hospitalization despite having varying durations of prior COVID-19 symptoms from 1-21 days (median 5 days); all patients had a confirmed COVID-19 diagnosis by positive PCR nasal swab testing.
  • All evaluable patients had prompt anti-SARS-CoV-2 antibody responses within 7 days of administration of CPI-006 at all dose levels.
  • All patients recovered and were discharged from the hospital at a median of 4 (range 2-23) days.
  • As of the November 4, 2020 cut-off date, there were no drug-related toxicity or safety issues reported.

The results presented at SITC build on the initial data from the first two cohorts (0.3 mg and 1.0 mg doses) of the study that was published online at medRxiv.org in September 2020. In addition to detailing the initial results, the medRxiv manuscript provided additional details on the unique properties of CPI-006 and on the study rationale and design, along with context on the broad potential for CPI-006 for the treatment and prevention of COVID-19.


Background Information on CPI-006 for the Treatment of COVID-19


Corvus is studying an immunostimulatory humanized monoclonal antibody, designated as CPI-006, which the Company believes has demonstrated a potential new approach to immunotherapy of infectious diseases and cancer. In both in vitro and in vivo studies in cancer patients, CPI-006 has demonstrated binding to various immune cells and the inducement of a humoral adaptive immune response – B cell activation and lymphocyte trafficking leading to the production of antigen-specific immunoglobulin (IgM and IgG) antibodies. Administration of CPI-006 has also led to increased levels of memory B cells, and increased levels of both memory CD4+ and CD8+ cells, which are the cells responsible for long-term immunity. The similar production of antibodies and memory cells to pathogens such as SARS-CoV-2 may provide immediate and long-term clinical benefits for patients including shortened recovery time and improved long-term protective immunity.

To date, over 90 cancer patients have been treated with CPI-006 in the Corvus Phase 1/1b study, with dosing as high as 24 mg/kg every three weeks. The study design is evaluating CPI-006 monotherapy and in combination with ciforadenant and combination with pembrolizumab. Another cohort of the study is evaluating the triplet of CPI-006, ciforadenant and pembrolizumab. As of the November 4, 2020 cut-off date, CPI-006 had been well tolerated in these patients and evidence of B-cell activation and lymphocyte trafficking was observed in patients that received single doses as low as 1 mg/kg.   Corvus’ Phase 1/1b study demonstrated that the administration of CPI-006 was associated with increased memory B cells, the emergence of new B cell clones and, in some patients, the production of novel anti-tumor antibodies. These results have been previously reported in presentations at the Society of Immunotherapy of Cancer annual meeting in 2018 and 2019 and in a presentation at the American Society of Clinical Oncology annual meeting in 2019. CPI-006 was designed to bind to an epitope on an antigen known as CD73. This antigen is known to be involved in lymphocyte migration and activation. CPI-006 is designed to bind to a distinct region of CD73 and behaves as an agonist that serves as a signal to activate certain immune cells in preclinical studies. As previously reported, binding of CPI-006 affects B cells, T cells and antigen presenting cells. The collection of observed changes were consistent with enhanced antigen recognition and induction of an adaptive immune response.


R&D Symposium


Conference Call


,


Webcast


and Presentation Slides


The R&D Symposium conference call can be accessed by dialing 1-877-423-9813 (toll-free domestic) or 1-201-689-8573 (international) and using the conference ID 13712583. The live webcast, which will include presentation slides, may be accessed via the investor relations section of the Corvus website. A replay of the webcast will be available on Corvus’ website for 90 days.

About Corvus Pharmaceuticals

Corvus Pharmaceuticals is a clinical-stage biopharmaceutical company. Corvus’ lead product candidates are ciforadenant (CPI-444), a small molecule inhibitor of the A2A receptor, and CPI-006, a humanized monoclonal antibody directed against CD73 that has exhibited immunomodulatory activity and activation of immune cells in preclinical studies. These product candidates are being studied in ongoing Phase 1b/2 and Phase 1/1b clinical trials in patients with a wide range of advanced solid tumors. Ciforadenant is being evaluated in a successive expansion cohort Phase 1b/2 trial examining its activity both as a single agent and in combination with an anti-PD-L1 antibody. CPI-006 is being evaluated in a multicenter Phase 1/1b clinical trial as a single agent, in combination with ciforadenant and pembrolizumab. The Company’s third cancer clinical program, CPI-818, is an investigational, oral, small molecule drug that selectively inhibited ITK in preclinical studies, is in a multicenter Phase 1/1b clinical trial in patients with several types of T-cell lymphomas. The Company is also evaluating CPI-006 as a treatment for COVID-19 patients. For more information, visit www.corvuspharma.com.

About CPI-006

CPI-006 is an investigational, potent humanized monoclonal antibody that is designed to react with a specific site on CD73. In preclinical studies, it has demonstrated immunomodulatory activity resulting in activation of lymphocytes, induction of antibody production from B cells and effects on lymphocyte trafficking. While there are other anti-CD73 antibodies in development for treatment of cancer, such antibodies have been reported to react with a different region of CD73 and are designed to block production of adenosine, which is not involved in the immunomodulatory processes seen with CPI-006.

About Ciforadenant

Ciforadenant (CPI-444) is an investigational small molecule, oral, checkpoint inhibitor designed to disable a tumor’s ability to subvert attack by the immune system by blocking the binding of adenosine in the tumor microenvironment to the A2A receptor. Adenosine, a metabolite of ATP (adenosine tri-phosphate), is produced within the tumor microenvironment where it may bind to the adenosine A2A receptor present on immune cells and block their activity. CD39 and CD73 are enzymes on the surface of tumor cells and immune cells. These enzymes work in concert to convert ATP to adenosine.

Adenosine Gene Signature

The adenosine gene signature is a biomarker that reflects adenosine induced immunosuppression in the tumor. These genes express chemokines that recruit myeloid cells including immunosuppressive tumor associated CD68+ myeloid cells, which are thought to mediate resistance to anti-PD-(L)1 treatment.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to the potential safety and efficacy of ciforadenant, CPI-006, and CPI-818, the Company’s ability to develop and advance product candidates into and successfully complete preclinical studies and clinical trials, including the Company’s Phase 1/1b clinical trial of CPI-006 for certain cancers, as well as the Company’s Phase 1 trial of CPI-006 for COVID-19, the timing of the availability and announcement of clinical data and certain other product development milestones, and the sufficiency of the Company’s cash resources. All statements other than statements of historical fact contained in this press release are forward-looking statements. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “seek,” “will,” “may” or similar expressions. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. The Company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the Securities and Exchange Commission on October 29, 2020, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the Company’s ability to demonstrate sufficient evidence of efficacy and safety in its clinical trials of ciforadenant, CPI-006 and CPI-818; the accuracy of the Company’s estimates relating to its ability to initiate and/or complete preclinical studies and clinical trials; the results of preclinical studies may not be predictive of future results; the unpredictability of the regulatory process; regulatory developments in the United States, and other foreign countries; whether the FDA accepts data from trials conducted in foreign locations; the costs of clinical trials may exceed expectations; the Company’s ability to raise additional capital; the effects of COVID-19 on the Company’s clinical programs and business operations. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and the timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

INVESTOR CONTACT:

Leiv Lea
Chief Financial Officer
Corvus Pharmaceuticals, Inc.
+1-650-900-4522
[email protected]

MEDIA CONTACT:

Sheryl Seapy
W2O pure
+1-949-903-4750
[email protected]

Posted on

Leading Independent Advisory Firms ISS and Glass Lewis Recommend Virtusa Stockholders Vote “FOR” the Transaction with Baring Private Equity Asia

Leading Independent Advisory Firms ISS and Glass Lewis Recommend Virtusa Stockholders Vote “FOR” the Transaction with Baring Private Equity Asia

SOUTHBOROUGH, Mass.–(BUSINESS WIRE)–
Virtusa Corporation (NASDAQ GS: VRTU) announced today that leading independent proxy advisory firms, Institutional Shareholder Services Inc. (“ISS”) and Glass Lewis & Co., LLC (“Glass Lewis”), have each recommended that Virtusa stockholders vote “FOR” the pending merger transaction (the “Transaction”) under which funds affiliated with Baring Private Equity Asia (“BPEA”) will acquire all outstanding shares of common stock of Virtusa for $51.35 per share in an all-cash transaction valued at approximately $2.0 billion.

The Transaction, which is expected to close in the first half of 2021, is subject to the approval of Virtusa’s stockholders, customary regulatory requirements, including approval from The Committee on Foreign Investment in the United States (CFIUS), and customary closing conditions. The transaction is not subject to a financing condition.

Special Meeting

A special meeting of stockholders of Virtusa Corporation (the “Meeting”) to consider and vote upon the Transaction, will be held virtually on November 20, 2020 at 10:00 AM, Eastern Time, at https://www.cesonlineservices.com/vrtu20_vm. The Virtusa Board recommends that Virtusa’s stockholders vote “FOR” the proposal to approve the pending merger with funds affiliated with BPEA in advance of the Meeting. The Company encourages stockholders to submit their proxy as soon as possible, whether over the Internet, by telephone or by mail. Further details on how to vote and the requirements with respect to attending the Meeting virtually are contained in the definitive proxy statement on Schedule 14A filed with the Securities Exchange Commission (the “SEC”) and mailed to stockholders of record on October 20, 2020.

About Virtusa

Virtusa Corporation (NASDAQ GS: VRTU) is a global provider of digital business strategy, digital engineering, and information technology (IT) services and solutions that help clients change, disrupt, and unlock new value through innovation engineering. Virtusa serves Global 2000 companies in Banking, Financial Services, Insurance, Healthcare, Communications, Media, Entertainment, Travel, Manufacturing, and Technology industries.

Virtusa helps clients grow their business with innovative products and services that create operational efficiency using digital labor, future-proof operational and IT platforms, and rationalization and modernization of IT applications infrastructure. This is achieved through a unique approach blending deep contextual expertise, empowered agile teams, and measurably better engineering to create holistic solutions that drive business forward at unparalleled velocity enabled by a culture of cooperative disruption.

About BPEA

Baring Private Equity Asia (BPEA) is one of the largest and most established private alternative investment firms in Asia, with assets under management of approximately US$20 billion. The firm runs a private equity investment program, sponsoring buyouts and providing growth capital to companies for expansion or acquisitions with a particular focus on the Asia Pacific region, as well as investing in companies globally that can benefit from further expansion into the Asia Pacific region. BPEA also manages dedicated funds focused on private real estate and private credit. The firm has a 23-year history and over 190 employees located across offices in Hong Kong, China, India, Japan, Singapore, Australia, and the US. BPEA currently has over 40 portfolio companies active across Asia with a total of 224,000 employees and sales of approximately US$39 billion.

For more information, please visit www.bpeasia.com

Additional Information and Where to Find It

This communication relates to the proposed merger transaction involving the Company and may be deemed to be solicitation material in respect of the proposed merger transaction. In connection with the proposed merger transaction, the Company has filed relevant materials with the SEC, including a definitive proxy statement on Schedule 14A (the “Proxy Statement”). Promptly after filing the Proxy Statement with the SEC, the Company mailed the Proxy Statement and a proxy card to each Company stockholder entitled to vote at the special meeting relating to the proposed merger transaction. This communication is not a substitute for the Proxy Statement or for any other document that the Company may file with the SEC or send to the Company’s stockholders in connection with the proposed merger transaction. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED MERGER TRANSACTION AND RELATED MATTERS. The proposed merger transaction will be submitted to the Company’s stockholders for their consideration. Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents filed by the Company with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed by the Company with the SEC will also be available free of charge on the Company’s website at www.virtusa.com or by contacting the Company’s Investor Relations contact at [email protected].

Participants in the Solicitation

The Company and its directors and certain of its executive officers and employees may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect to the proposed merger transaction under the rules of the SEC. Information about the directors and executive officers of the Company and their ownership of shares of the Company’s common stock is set forth in its Annual Report on Form 10-K for the year ended March 31, 2020, which was filed with the SEC on May 28, 2020 and was subsequently amended on July 29, 2020, the Proxy Statement, which was filed with the SEC on October 20, 2020 and in subsequent documents filed with the SEC, including the Proxy Statement. Additional information regarding the persons who may be deemed participants in the proxy solicitations and a description of their direct and indirect interests in the merger transaction, by security holdings or otherwise, are also included in the Proxy Statement and other relevant materials to be filed with the SEC when they become available. You may obtain free copies of this document as described above.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company generally identifies forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The Company has based these forward-looking statements largely on its then-current expectations and projections about future events and financial trends as well as the beliefs and assumptions of management. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. The Company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: (i) risks associated with the Company’s ability to obtain the stockholder approval required to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed merger transaction will not occur; (ii) the outcome of any legal proceedings that may be instituted against the parties and others related to the merger agreement; (iii) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the merger agreement; (iv) unanticipated difficulties or expenditures relating to the proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction; and (v) those risks detailed in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the SEC, as well as other documents that may be filed by the Company from time to time with the SEC. Accordingly, you should not rely upon forward-looking statements as predictions of future events. The Company cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. The forward-looking statements made in this communication relate only to events as of the date on which the statements are made. Except as required by applicable law or regulation, the Company 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.

Media Contact:

Conversion Marketing

Ron Favali, 727-512-4490

[email protected]

Investor Contact:

ICR

William Maina, 646-277-1236

[email protected]

Additional Investor Contact:

MacKenzie Partners, Inc.

Bob Marese, 212-929-5405

[email protected]

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Consulting Data Management Professional Services Technology Software

MEDIA:

Logo
Logo
Posted on

Cidara Therapeutics to Participate in Two Upcoming Investor Conferences

SAN DIEGO, Nov. 11, 2020 (GLOBE NEWSWIRE) — Cidara Therapeutics, Inc. (Nasdaq: CDTX), a biotechnology company developing long-acting therapeutics designed to transform the standard of care for patients facing serious fungal or viral infections, today announced that Jeffrey Stein, Ph.D., President and Chief Executive Officer, will participate in two upcoming conferences: the Stifel 2020 Virtual Healthcare Conference and 3rd Annual Evercore ISI HealthCONx Conference.

Stifel
2020
Virtual Health Conference

Date: Tuesday, November 17, 2020
Time: 2:00 PM Eastern Time
Format: Presentation

A live audio webcast of the presentation will be available in the Investors section on the Company’s website at www.cidara.com.

3

rd

Annual Evercore ISI HealthCONx Conference

Date: Wednesday, December 2, 2020
Time: 11:20 AM Eastern Time
Format: Panel Discussion – No Fungus Among Us: Addressing an Important Fungal Need

About Cidara Therapeutics

Cidara is developing long-acting therapeutics designed to transform the standard of care for patients facing serious fungal or viral infections. The Company’s portfolio is comprised of its lead antifungal candidate, rezafungin, in addition to antiviral conjugates (AVCs) for the prevention and treatment of influenza and other viral diseases from Cidara’s proprietary Cloudbreak® antiviral platform. Cidara is headquartered in San Diego, California. For more information, please visit www.cidara.com.

INVESTOR CONTACT:

Brian Ritchie
LifeSci Advisors
(212) 915-2578
[email protected]

MEDIA CONTACT:

Karen O’Shea, Ph.D.
LifeSci Communications
(929) 469-3860
[email protected]

Posted on

Datadog to Present at Upcoming Investor Conferences

Datadog to Present at Upcoming Investor Conferences

NEW YORK–(BUSINESS WIRE)–
Datadog, Inc. (NASDAQ:DDOG), the monitoring and security platform for cloud applications, today announced that management will present at the following investor conferences.

  • The RBC Global Technology, Internet, Media and Telecommunications Virtual Conference. The presentation is scheduled for Tuesday, November 17, 2020 at 10:40 a.m., Eastern Time.
  • The Wells Fargo TMT Virtual Summit. The presentation is scheduled for Tuesday, December 1, 2020 at 8:40 a.m., Eastern Time.
  • The Credit Suisse Technology Virtual Conference. The presentation is scheduled for Wednesday, December 2, 2020 at 2:00 p.m., Eastern Time.
  • The Morgan Stanley Future of Application Development Virtual Conference. The presentation is scheduled for Wednesday, December 9, 2020 at 2:15 p.m., Eastern Time.
  • The Barclays Global Technology, Media & Telecom Virtual Conference. The presentation is scheduled for Thursday, December 10, 2020 at 11:30 a.m., Eastern Time.

The presentations will be webcast live, and replays will be available for a limited time under the “Events and Presentations” section of the Company’s investor relations website at https://investors.datadoghq.com/.

About Datadog

Datadog is the monitoring and security platform for cloud applications. Our SaaS platform integrates and automates infrastructure monitoring, application performance monitoring and log management to provide unified, real-time observability of our customers’ entire technology stack. Datadog is used by organizations of all sizes and across a wide range of industries to enable digital transformation and cloud migration, drive collaboration among development, operations, security and business teams, accelerate time to market for applications, reduce time to problem resolution, secure applications and infrastructure, understand user behavior and track key business metrics.

AJ Ljubich, CFA

Datadog Investor Relations

(866) 329-4466

[email protected]

Martin Bergman

Datadog Communications

(866) 329-4466

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Banking Software Mobile/Wireless Networks Professional Services Internet Hardware Data Management Technology Security Finance Other Technology Telecommunications

MEDIA:

Posted on

Cyclacel Pharmaceuticals Reports Third Quarter 2020 Financial Results

– Conference Call Scheduled November 11, 2020 at 4:30 p.m. ET –

BERKELEY HEIGHTS, N.J., Nov. 11, 2020 (GLOBE NEWSWIRE) — Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC, NASDAQ: CYCCP; “Cyclacel” or the “Company”), a biopharmaceutical company developing innovative medicines based on cancer cell biology, today reported its financial results for the third quarter 2020 and certain business highlights.

The Company’s net loss applicable to common shareholders for the three months ended September 30, 2020 was $2.3 million. As of September 30, 2020, cash and cash equivalents totaled $23.1 million. Based on current spending, the Company estimates it has sufficient resources to fund planned operations, including research and development, through the end of 2022.

“We continue to execute on our clinical development plan for fadraciclib and CYC140 in both liquid and solid cancers,” said Spiro Rombotis, President and Chief Executive Officer. “The recent ENA presentation highlighted fadraciclib’s oral bioavailability and deepening confirmed response as a single agent. Recent publications elaborated the mechanistic rationale for fadraciclib highlighting dual inhibition of CDK2 and CDK9 cancer pathways. We are encouraged by evidence of antileukemic activity in our studies of fadraciclib in combination with venetoclax in hematological malignancies, including CLL. Dr. Mark Kirschbaum, our newly appointed CMO, is reviewing our programs and streamlining our clinical work flows to progress our clinical strategy and improve efficiency. We are looking forward to reporting data from ongoing studies and outlining our clinical development plans for fadraciclib and CYC140 to drive shareholder value.”

Key Corporate Highlights

  • Appointed Mark Kirschbaum, M.D. as Senior Vice President and Chief Medical Officer. Dr. Kirschbaum is a highly experienced hematologist/oncologist with over 30 years of experience in molecular medicine, new drug development, clinical trial design and patient care. He has management experience in academic research, clinical practice and pharmaceutical industry settings. As CMO, he is responsible for advancing Cyclacel’s pipeline and is leading clinical strategy, patient safety and medical affairs.

  • Fadraciclib
    Oral
    Presentation
    at the Plenary Session of the 32

    nd

     EORTC-NCI-AACR (ENA)
    Symposium 2020

• In part 2 of a Phase 1, dose escalation study, fadraciclib was administered intravenously as monotherapy to 24 heavily pretreated patients with various advanced solid tumors.

• Out of 11 patients treated at the fourth dose level one achieved confirmed partial response (PR) and two stable disease (SD).

• The PR was observed after a month and a half on fadraciclib in a patient with MCL1-amplified endometrial cancer who had failed seven lines of prior therapy. The patient remains on treatment after 16 months with 92% reduction in target tumor lesions.

• SD was observed in a patient with cyclin E amplified ovarian cancer who achieved 29% shrinkage in target tumor lesions after four months and a patient with fallopian tube adenocarcinoma with undetermined protein level.

• In three patients treated in part 3 with oral fadraciclib high oral bioavailability and overlapping pharmacokinetics were observed compared to the intravenously administered, identical schedule in part 2.

  • CYC065-02 Phase 1 fadraciclib i.v. and venetoclax p.o.
    in CLL
    – five patients with R/R CLL have been treated in four dose levels up to 150 mg/m2 of fadraciclib in combination with venetoclax. Fadraciclib is administered after completion of venetoclax ramp. Antileukemic activity was observed in three patients who achieved MRD negativity on the combination, one in bone marrow and two in bone marrow and peripheral blood. The latter two patients have also demonstrated continued shrinkage of lymph nodes on the combination. In one patient all target lesions and in the other 2 out of 4 lesions have shrunk below 1.5 cm. Both are waiting for confirmation of response. Preclinical data support a dual targeting strategy of both BCL2 and MCL1 in CLL.

  • CYC065-0
    3
    Phase 1
    fadraciclib
    i.v.
    and
    venetoclax p.o
    .
    in
    AML/MDS
    – fourteen heavily pretreated patients with relapsed/refractory (R/R) AML were treated in five dose levels up to 200 mg/m2 of fadraciclib in combination with venetoclax. Antileukemic activity has been observed in four out of twelve patients available for assessment. Preclinical data in AML suggest that targeting both MCL1 and BCL2 may be more beneficial than inhibiting either protein alone.

  • CYC140-01 Phase 1 CYC140 i.v. – We have enrolled 7 patients in our first-in-human, dose escalation study evaluating CYC140 in patients with advanced leukemias. CYC140 is a small molecule, selective polo-like-kinase 1 (PLK1) inhibitor that has demonstrated potent and selective target inhibition and high activity in xenograft models of human cancers. In parallel with hematological malignancies, we are planning studies of CYC140 in solid tumors.

  • CYC682-11
    Phase 1
    part 2 sapacitabine p.o.
    and venetoclax p.o.
    – twelve patients have been enrolled in a dose escalation study in our DNA Damage Response (DDR) program evaluating an oral combination of sapacitabine and venetoclax in patients with R/R AML/MDS. Two patients, previously treated with combination therapies including hypomethylating agents, have achieved 5 and 6 cycles of treatment respectively. Sapacitabine is a nucleoside analogue that is active in AML and MDS R/R to prior therapy such as cytarabine or hypomethylating agents. Preclinical data demonstrated synergy of sapacitabine with a BCL2 inhibitor, which may offer an effective, oral treatment regimen for patients who have failed front-line therapy.

  • Appointed 
    Karin L. Walker to the Board of Directors. Ms. Walker brings over 30 years of extensive finance experience in biopharmaceuticals, including in public biotechnology companies, and technology companies. Ms. Walker currently serves as the Chief Accounting Officer of Prothena Corporation plc, a late-stage clinical company with expertise in protein dysregulation and a pipeline of novel investigational therapeutics focused on neurodegenerative and rare peripheral amyloid diseases, and has held this position since 2013.

More information on our clinical trials can be found here.

Key Business Objectives

  • Treat first patient with orally-administered fadraciclib in Phase 1/2 advanced solid tumors study;
  • Report initial data from fadraciclib-venetoclax Phase 1 study in R/R AML/MDS & CLL;
  • Report safety and PK data from Phase 1 study of fadraciclib oral formulation;
  • Report initial data from CYC140 Phase 1 first-in-human study in R/R leukemias; and
  • Report initial data from sapacitabine-venetoclax Phase 1 study in R/R AML/MDS;

Financial Highlights

As of September 30, 2020, cash and cash equivalents totaled $23.1 million, compared to $11.9 million as of December 31, 2019. The increase of $11.2 million was primarily due to net proceeds of $18.3 million from an equity financing in April 2020, offset by net cash used in operating activities of $6.8 million. There were no revenues for each of the three months ended September 30, 2020 and 2019.

Research and development expenses were $1.1 million for each of the three months ended September 30, 2020 and 2019. Research and development expenses relating to transcriptional regulation increased by approximately $0.1 million for the three months ended September 30, 2020 as we continue to progress the clinical evaluation of fadraciclib.

General and administrative expenses for the three months ended September 30, 2020 were $1.5 million, compared to $1.3 million for the same period of the previous year. The increase of $0.2 million for the three months ended September 30, 2020 is due to increased professional costs.

Total other income, net, for the three months ended September 30, 2020 was $35,000, compared to $174,000 for the same period of the previous year. The decrease of approximately $140,000 for the three months ended September 30, 2020 is primarily related to reductions in foreign exchange gains and interest income.

United Kingdom research & development tax credits were $0.3 million for each of the three months ended September 30, 2020 and 2019.

Net loss for the three months ended September 30, 2020 was $2.3 million compared to $1.9 million for the same period in 2019.

The Company estimates that cash resources of $23.1 million as of September 30, 2020 will fund currently planned programs through the end of 2022.

Conference call information:

US/Canada call: (877) 493-9121 / international call: (973) 582-2750 

US/Canada archive: (800) 585-8367 / international archive: (404) 537-3406 

Code for live and archived conference call is 4884678.

For the live and archived webcast, please visit the Corporate Presentations page on the Cyclacel website at www.cyclacel.com. The webcast will be archived for 90 days and the audio replay for 7 days. 

About Cyclacel Pharmaceuticals, Inc.

Cyclacel Pharmaceuticals is a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation and DNA damage response biology. The transcriptional regulation program is evaluating fadraciclib as a single agent in solid tumors and in combination with venetoclax in patients with relapsed or refractory AML/MDS and CLL. The anti-mitotic program is evaluating CYC140, a PLK1 inhibitor, in advanced leukemias/MDS patients. The DNA damage response program is evaluating an oral combination of sapacitabine and venetoclax in patients with relapsed or refractory AML/MDS. An investigator-sponsored trial (IST) is evaluating an oral combination of sapacitabine and olaparib in patients with BRCA mutant breast cancer. Cyclacel’s strategy is to build a diversified biopharmaceutical business focused in hematology and oncology based on a pipeline of novel drug candidates. For additional information, please visit www.cyclacel.com.

Forward-looking Statements

This news release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Such forward-looking statements include statements regarding, among other things, the efficacy, safety and intended utilization of Cyclacel’s product candidates, the conduct and results of future clinical trials, plans regarding regulatory filings, future research and clinical trials and plans regarding partnering activities. Factors that may cause actual results to differ materially include the risk that product candidates that appeared promising in early research and clinical trials do not demonstrate safety and/or efficacy in larger-scale or later clinical trials, trials may have difficulty enrolling, Cyclacel may not obtain approval to market its product candidates, the risks associated with reliance on outside financing to meet capital requirements, and the risks associated with reliance on collaborative partners for further clinical trials, development and commercialization of product candidates. You are urged to consider statements that include the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “anticipates,” “intends,” “continues,” “forecast,” “designed,” “goal,” or the negative of those words or other comparable words to be uncertain and forward-looking. For a further list and description of the risks and uncertainties the Company faces, please refer to our most recent Annual Report on Form 10-K and other periodic and other filings we file with the Securities and Exchange Commission and are available at www.sec.gov. Such forward-looking statements are current only as of the date they are made, and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

   
Contacts  
   
Company:  Paul McBarron, (908) 517-7330, [email protected]
   
Investor Relations: Russo Partners LLC, Eric Ando, (646) 218-4604, [email protected]     
   

© Copyright 2020 Cyclacel Pharmaceuticals, Inc. All Rights Reserved. The Cyclacel logo and Cyclacel® are trademarks of Cyclacel Pharmaceuticals, Inc.

CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF
OPERATIONS (LOSS)

(In $000s, except share and per share amounts)

        Three Months Ended  
        September 30,  
          2019       2020    
               
Revenues:          
Total revenues     –       –    
Operating expenses:          
  Research and development     1,063       1,075    
  General and administrative     1,285       1,497    
Total operating expenses     2,348       2,572    
Operating loss     (2,348 )     (2,572 )  
Other income (expense):          
  Foreign exchange gains (losses)     79       (25 )  
  Interest income     42       4    
  Other income, net     53       56    
    Total other income (expense), net     174       35    
Loss before taxes     (2,174 )     (2,537 )  
Income tax benefit     273       281    
Net loss     (1,901 )     (2,256 )  
Dividend on convertible exchangeable preferred shares     (50 )     (50 )  
Net loss applicable to common shareholders   $ (1,951 )   $ (2,306 )  
Basic and diluted earnings per common share:          
Net loss per share – basic and diluted   $ (2.27 )   $ (0.47 )  
Weighted average common shares outstanding     859,998       4,863,984    
               

 



CYCLACEL PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEET

(In $000s, except share, per share, and liquidation preference amounts)

    December 31,   September 30,  
    2019   2020  
           
ASSETS          
Current assets:          
Cash and cash equivalents   $ 11,885     $ 23,130  
Prepaid expenses and other current assets     2,132       2,804  
Total current assets     14,017       25,934  
           
Property and equipment, net     27       64  
Right-of-use lease asset     1,264       1,215  
Total assets   $ 15,308     $ 27,213  
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable   $ 890     $ 455  
Accrued and other current liabilities     1,530       1,257  
Total current liabilities     2,420       1,712  
Lease liability     1,191       1,063  
Total liabilities     3,611       2,775  
           
Stockholders’ equity     11,697       24,438  
Total liabilities and stockholders’ equity   $ 15,308     $ 27,213  
           

 

SOURCE: Cyclacel Pharmaceuticals, Inc.

Posted on

SpartanNash Announces Third Quarter Fiscal 2020 Financial Results

SpartanNash Announces Third Quarter Fiscal 2020 Financial Results

Reports Third Quarter Retail Comparable Store Sales of 10.6%

Generates EPS of $0.56; Adjusted EPS Increased 133% to $0.70

Adjusted EBITDA increased 37.2% to $57.0 million

Updates Fiscal Year 2020 Outlook

GRAND RAPIDS, Mich.–(BUSINESS WIRE)–
SpartanNash Company (the “Company”) (Nasdaq: SPTN) today reported financial results for its 12-week third quarter ended October 3, 2020.

Third Quarter Fiscal 2020 Highlights

  • Net sales growth of 3.1% to $2.06 billion from $2.00 billion in the prior year quarter, representing the eighteenth consecutive quarter of growth.
  • Retail comparable store sales of 10.6% were positive for the fifth consecutive quarter.
  • EPS of $0.56 per share, compared to a loss of $(0.01) per share in the prior year quarter; adjusted EPS of $0.70 per share, an increase of 133% over $0.30 per share in the prior year quarter.
  • Adjusted EBITDA increase of 37.2%, to $57.0 million from $41.6 million in the prior year quarter.
  • Subsequent to the end of the third quarter, the Company extended its commercial agreement with Amazon. In connection with this agreement, the Company issued stock warrants to a subsidiary of Amazon, subject to certain vesting conditions.

“In the past nine weeks since taking the CEO position I’ve visited a great number of our distribution centers and retail stores. The passion demonstrated by our associates is nothing short of inspirational,” said Tony Sarsam, President and Chief Executive Officer. “I am energized and excited about the profitable growth opportunities that lie ahead for our business. As I immerse further into our business, I will continue to assess our long-term strategy, focus on motivating our associates and recognizing their accomplishments, identifying opportunities to make investments to improve the efficiency and effectiveness of our supply chain, and evaluating how to best position SpartanNash to deliver shareholder value for years to come.”

Consolidated net sales for the third quarter increased $61.0 million, or 3.1%, to $2.06 billion from $2.00 billion in the prior year quarter. The increase in net sales was generated through higher sales attributable to increased consumer demand related to COVID-19 in the Company’s Retail and Food Distribution segments, as well as continued growth with existing Food Distribution customers, partially offset by the continued impact of domestic base access and commissary shopping restrictions associated with COVID-19 in the Military segment.

Gross profit for the third quarter was $324.8 million, or 15.8% of net sales, compared to $290.4 million, or 14.5% of net sales, in the prior year quarter. The improvement in the gross profit rate was driven by improvements in margin rates at all three segments, as well as an increase in the proportion of Retail and Food Distribution segment sales, which generate higher margin rates than the Military segment.

Reported operating expenses for the third quarter were $295.8 million, or 14.4% of net sales, compared to $274.6 million, or 13.7% of net sales, in the prior year quarter. The increase in expenses as a rate of sales compared to the prior year quarter was due to increased incentive compensation related to improved Company performance, a higher mix of Retail segment sales which have higher operating expense rates, higher supply chain expenses in the Food Distribution segment, and a $5.2 million increase in restructuring and asset impairment charges, partially offset by increased leverage of retail store labor expenses and other fixed costs due to the higher sales volume in the quarter.

The Company reported operating earnings of $29.0 million compared to $15.8 million in the prior year quarter. The increase was attributable to increased sales volume, as well as the changes in rates of margin and operating expenses previously mentioned, partially offset by higher impairment charges. Adjusted operating earnings(1) were $35.8 million compared to $20.3 million in the prior year quarter and are adjusted for the items detailed in Table 3.

Interest expense decreased $3.9 million from the prior year quarter due to multiple rate cuts implemented by the Federal Reserve during 2019 and in early 2020, as well as the Company’s pay down of the debt balance made possible by higher earnings and lower required investments in working capital. Postretirement benefit expense was favorable $10.1 million from cycling charges related to the termination of the Company’s pension plan in the prior year quarter.

The Company reported earnings from continuing operations of $20.0 million, or $0.56 per diluted share, compared to a loss from continuing operations of $0.3 million, or $0.01 per diluted share, in the prior year quarter. The improvement reflects the operating earnings and non-operating expense changes noted above. Adjusted earnings from continuing operations(2) for the third quarter were $25.1 million, or $0.70 per diluted share. Adjusted earnings from continuing operations for the prior year quarter were $10.9 million, or $0.30 per diluted share. A reconciliation of reported earnings from continuing operations to adjusted earnings from continuing operations is included at Table 4.

Adjusted EBITDA(3) increased $15.4 million, or 37.2%, to $57.0 million compared to $41.6 million in the prior year quarter due to factors mentioned above.

Please see the financial tables at the end of this press release for a reconciliation of each non-GAAP financial measure to the most directly comparable measure, prepared and presented in accordance with GAAP.

Segment Financial Results

Food Distribution

Net sales for Food Distribution increased $73.2 million, or 7.8%, to $1.01 billion from $0.94 billion in the prior year quarter. The increase was due to sales growth with existing customers, as well as incremental volume associated with increased consumer demand related to COVID-19, partially offset by the impact of the Company’s decision to exit its Fresh Production operations.

Reported operating earnings for Food Distribution were $9.2 million compared to $11.7 million in the prior year quarter. During the quarter, the Company made the decision to abandon a tradename within this segment to better align with the Company’s overall transportation operations and to provide a more integrated solution to its customers, resulting in a $7.0 million impairment of the associated indefinite-lived tradename asset. The decrease in reported operating earnings for Food Distribution was due to this asset impairment charge, as well as an increase in supply chain and corporate administrative expenses, partially offset by increased earnings due to the higher sales volume. Third quarter adjusted operating earnings(1) were $15.7 million compared to $15.5 million in the prior year quarter. Adjusted operating earnings exclude asset impairment and restructuring charges in both years and losses associated with the Fresh Kitchen operations in the prior year quarter.

Retail

Net sales for Retail increased $35.1 million, or 6.2%, to $596.7 million from $561.6 million in the prior year quarter primarily due to increased consumer demand related to COVID-19, as discussed above. Comparable store sales of 10.6% were partially offset by the impact of lower fuel sales, as well as store closures. During the quarter, the Company experienced more than 175% growth in its eCommerce business.

Reported operating earnings for Retail were $22.3 million compared to $6.7 million in the prior year quarter. The increase in reported operating earnings was due to the increase in sales volume, improvements in margin rates, including inventory shrink, and improved leverage of store labor. These favorable variances were partially offset by higher incentive compensation due to the improved segment performance. Adjusted operating earnings(1) were $22.6 million compared to $7.3 million in the prior year quarter and exclude merger/acquisition and integration expenses in the current year and restructuring charges in the prior year quarter.

Military Distribution

Net sales for Military Distribution decreased $47.2 million, or 9.5%, to $452.0 million from $499.2 million in the prior year quarter. Growth in private label and export sales were more than offset by the impact of domestic base access and commissary shopping restrictions associated with COVID-19, which have led to significant declines in Defense Commissary Agency sales as a whole.

The reported operating loss for Military Distribution was $2.5 million compared to $2.6 million in the prior year quarter. The change was driven by improved margin rates, partially offset by higher corporate administrative expenses, the impact of lower sales volumes and, to a lesser extent, increases in the rate of warehousing expenses. Adjusted operating loss(1) was $2.5 million for the quarter in both years.

Balance Sheet and Cash Flow

Cash flows provided by operating activities for the year-to-date period of fiscal 2020 were $223.8 million compared to $140.0 million in the prior year, driven by increased profitability and reductions in working capital. In 2020, the Company has generated $178.0 million in free cash flow(4) year-to-date, compared to $93.1 million in the prior year. The Company reduced net long-term debt(5) by $145.0 million year-to-date in fiscal 2020. The reduction in net long-term debt, combined with increased profitability, resulted in an improvement in the Company’s net long-term debt to adjusted EBITDA ratio over this period of time from 3.7x to 2.3x, calculated on a trailing thirteen periods basis.

Capital expenditures and IT capital(6) totaled $53.5 million in the year-to-date period compared to $46.9 million in the prior year.

Through the third quarter of fiscal 2020, the Company has declared $20.8 million in quarterly cash dividends equal to $0.1925 per common share. The Company also repurchased 860,752 shares for a total of $10.0 million in the first quarter of fiscal 2020, at an average price of $11.62 per share.

Outlook

For the 53-week fiscal year ending January 2, 2021, the Company is updating its annual outlook from what was previously provided on August 12, 2020 to reflect actual financial results, its expectations for the remainder of the fiscal year, and the forecasted impact of stock warrants, which were granted early in the fourth quarter.

For fiscal year 2020, the Company now anticipates adjusted earnings per share from continuing operations(7) of approximately $2.42 to $2.50 compared to its prior projection of $2.40 to $2.60. The Company’s updated guidance reflects the continued benefits of sales trends associated with COVID-19 and the related increase in consumer demand, offset by estimated non-cash stock warrant expense of $6.0 million to $7.0 million, or $0.13 to $0.15 per diluted share. Reported earnings per share from continuing operations are expected to range from $2.09 to $2.17 compared to its prior projection of $2.13 to $2.41.

The Company now expects fiscal 2020 adjusted EBITDA to range from $237.0 million to $242.0 million compared to its prior guidance of $232.0 million to $242.0 million.

The Company’s updated guidance now reflects capital expenditures and IT capital in the range of $80.0 million to $85.0 million for the fiscal year. Depreciation and amortization have been updated to a range of $88.0 million to $90.0 million. Interest expense is now expected to range from $18.0 million to $18.5 million. The Company’s updated guidance now reflects an adjusted effective tax rate of 23.5% to 24.0% and a reported effective tax rate of 13.0% to 13.5%.

Conference Call

A telephone conference call to discuss the Company’s third quarter 2020 financial results is scheduled for Thursday, November 12, 2020 at 8:00 a.m. ET. A live webcast of this conference call will be available on the Company’s website, www.spartannash.com/webcasts. Simply click on “For Investors” and follow the links to the live webcast. The webcast will remain available for replay on the Company’s website for approximately ten days.

About SpartanNash

SpartanNash (Nasdaq: SPTN) is a Fortune 400 company whose core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores and U.S. military commissaries and exchanges; as well as operating a premier fresh produce distribution network. SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Bahrain, Djibouti and Egypt. SpartanNash currently operates 156 supermarkets, primarily under the banners of Family Fare, Martin’s Super Markets, D&W Fresh Market, VG’s Grocery and Dan’s Supermarket. Through its MDV military division, SpartanNash is a leading distributor of grocery products to U.S. military commissaries.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These include statements preceded by, followed by or that otherwise include the words “outlook,” “believe,” “anticipates,” “continue,” “expects,” “guidance,” “trend,” “on track,” “encouraged” or “plan” or similar expressions. The statements in the “Outlook” section of this press release are inherently forward looking. Forward-looking statements relating to expectations about future results or events are based upon information available to SpartanNash as of today’s date, and are not guarantees of the future performance of the Company, and actual results may vary materially from the results and expectations discussed. Additional risks and uncertainties include, but are not limited to, disruption associated with the COVID-19 pandemic and the Company’s ability to compete in the highly competitive grocery distribution, retail grocery, and military distribution industries. Additional information concerning these and other risks is contained in SpartanNash’s most recently filed Annual Report on Form 10-K, recent Current Reports on Form 8-K and other SEC filings. All subsequent written and oral forward-looking statements concerning SpartanNash, or other matters and attributable to SpartanNash or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. SpartanNash does not undertake any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.

(1) A reconciliation of operating earnings to adjusted operating earnings, a non-GAAP financial measure, is provided in Table 3 below.

(2) A reconciliation of earnings from continuing operations to adjusted earnings from continuing operations, a non-GAAP financial measure, is provided in Table 4 below.

(3) A reconciliation of net earnings to Adjusted EBITDA, a non-GAAP financial measure, is provided in Table 2 below.

(4) A reconciliation of net cash provided by operating activities to free cash flow, a non-GAAP financial measure, is provided in Table 6 below.

(5) A reconciliation of long-term debt and finance lease obligations to net long-term debt, a non-GAAP financial measure, is provided in Table 5 below.

(6) A reconciliation of purchases of property and equipment to capital expenditures and IT capital, a non-GAAP financial measure, is provided in Table 7 below.

(7) A reconciliation of projected earnings per share from continuing operations to adjusted earnings per share from continuing operations, a non-GAAP financial measure, is provided in Table 8 below.

SPARTANNASH COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 
 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

 

 

October 3,

 

 

October 5,

 

 

October 3,

 

 

October 5,

 

 

(In thousands, except per share amounts)

2020

 

 

2019

 

 

2020

 

 

2019

 

 

Net sales

$

 

2,060,816

 

 

$

 

1,999,808

 

 

$

 

7,101,373

 

 

$

 

6,538,112

 

 

Cost of sales

 

 

1,735,994

 

 

 

 

1,709,447

 

 

 

 

6,014,610

 

 

 

 

5,581,015

 

 

Gross profit

 

 

324,822

 

 

 

 

290,361

 

 

 

 

1,086,763

 

 

 

 

957,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

289,039

 

 

 

 

273,286

 

 

 

 

981,066

 

 

 

 

900,160

 

 

Merger/acquisition and integration

 

 

242

 

 

 

 

—

 

 

 

 

242

 

 

 

 

1,364

 

 

Restructuring charges and asset impairment

 

 

6,543

 

 

 

 

1,296

 

 

 

 

20,455

 

 

 

 

10,215

 

 

Total operating expenses

 

 

295,824

 

 

 

 

274,582

 

 

 

 

1,001,763

 

 

 

 

911,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

 

28,998

 

 

 

 

15,779

 

 

 

 

85,000

 

 

 

 

45,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses and (income)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

3,522

 

 

 

 

7,375

 

 

 

 

14,810

 

 

 

 

27,952

 

 

Loss on debt extinguishment

 

 

—

 

 

 

 

329

 

 

 

 

—

 

 

 

 

329

 

 

Postretirement benefit expense (income)

 

 

101

 

 

 

 

10,221

 

 

 

 

(597

)

 

 

 

19,677

 

 

Other, net

 

 

(141

)

 

 

 

(180

)

 

 

 

(547

)

 

 

 

(1,071

)

 

Total other expenses, net

 

 

3,482

 

 

 

 

17,745

 

 

 

 

13,666

 

 

 

 

46,887

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes and discontinued operations

 

 

25,516

 

 

 

 

(1,966

)

 

 

 

71,334

 

 

 

 

(1,529

)

 

Income tax expense (benefit)

 

 

5,564

 

 

 

 

(1,656

)

 

 

 

7,513

 

 

 

 

(1,973

)

 

Earnings (loss) from continuing operations

 

 

19,952

 

 

 

 

(310

)

 

 

 

63,821

 

 

 

 

444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

 

—

 

 

 

 

(27

)

 

 

 

—

 

 

 

 

(126

)

 

Net earnings (loss)

$

 

19,952

 

 

$

 

(337

)

 

$

 

63,821

 

 

$

 

318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

$

 

0.56

 

 

$

 

(0.01

)

 

$

 

1.78

 

 

$

 

0.01

 

 

Loss from discontinued operations

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

Net earnings (loss)

$

 

0.56

 

 

$

 

(0.01

)

 

$

 

1.78

 

 

$

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) from continuing operations

$

 

0.56

 

 

$

 

(0.01

)

 

$

 

1.78

 

 

$

 

0.01

 

 

Loss from discontinued operations

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

Net earnings (loss)

$

 

0.56

 

 

$

 

(0.01

)

 

$

 

1.78

 

 

$

 

0.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

35,730

 

 

 

 

36,340

 

 

 

 

35,900

 

 

 

 

36,248

 

 

Diluted

 

 

35,732

 

 

 

 

36,340

 

 

 

 

35,900

 

 

 

 

36,248

 

 

SPARTANNASH COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
 

 

October 3,

 

 

December 28,

 

(In thousands)

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 

26,903

 

 

$

 

24,172

 

Accounts and notes receivable, net

 

 

387,114

 

 

 

 

345,320

 

Inventories, net

 

 

586,351

 

 

 

 

537,212

 

Prepaid expenses and other current assets

 

 

73,192

 

 

 

 

58,775

 

Property and equipment held for sale

 

 

21,942

 

 

 

 

31,203

 

Total current assets

 

 

1,095,502

 

 

 

 

996,682

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

562,326

 

 

 

 

615,816

 

Goodwill

 

 

181,035

 

 

 

 

181,035

 

Intangible assets, net

 

 

119,039

 

 

 

 

130,434

 

Operating lease assets

 

 

269,025

 

 

 

 

268,982

 

Other assets, net

 

 

94,632

 

 

 

 

82,660

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

 

2,321,559

 

 

$

 

2,275,609

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Accounts payable

$

 

501,099

 

 

$

 

405,370

 

Accrued payroll and benefits

 

 

91,001

 

 

 

 

59,680

 

Other accrued expenses

 

 

53,439

 

 

 

 

51,295

 

Current portion of operating lease liabilities

 

 

43,705

 

 

 

 

42,440

 

Current portion of long-term debt and finance lease liabilities

 

 

5,338

 

 

 

 

6,349

 

Total current liabilities

 

 

694,582

 

 

 

 

565,134

 

 

 

 

 

 

 

 

 

 

 

Long-term liabilities

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

52,952

 

 

 

 

43,111

 

Operating lease liabilities

 

 

261,621

 

 

 

 

267,350

 

Other long-term liabilities

 

 

48,033

 

 

 

 

30,272

 

Long-term debt and finance lease liabilities

 

 

540,920

 

 

 

 

682,204

 

Total long-term liabilities

 

 

903,526

 

 

 

 

1,022,937

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

Common stock, voting, no par value; 100,000 shares authorized; 35,871 and 36,351 shares outstanding

 

 

484,612

 

 

 

 

490,233

 

Preferred stock, no par value, 10,000 shares authorized; no shares outstanding

 

 

—

 

 

 

 

—

 

Accumulated other comprehensive loss

 

 

(1,479

)

 

 

 

(1,600

)

Retained earnings

 

 

240,318

 

 

 

 

198,905

 

Total shareholders’ equity

 

 

723,451

 

 

 

 

687,538

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

$

 

2,321,559

 

 

$

 

2,275,609

 

SPARTANNASH COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

Cash flow activities

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

 

223,832

 

 

$

 

140,034

 

Net cash used in investing activities

 

 

(35,536

)

 

 

 

(117,645

)

Net cash used in financing activities

 

 

(185,565

)

 

 

 

(17,385

)

Net cash used in discontinued operations

 

 

—

 

 

 

 

(153

)

Net increase in cash and cash equivalents

 

 

2,731

 

 

 

 

4,851

 

Cash and cash equivalents at beginning of the period

 

 

24,172

 

 

 

 

18,585

 

Cash and cash equivalents at end of the period

$

 

26,903

 

 

$

 

23,436

 

SPARTANNASH COMPANY AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA

Table 1: Net Sales and Operating Earnings (Loss) by Segment

(Unaudited)

 
 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

 

October 3, 2020

 

 

October 5, 2019

 

Food Distribution Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

 

1,012,204

 

 

49.1

%

 

$

 

939,047

 

 

47.0

%

 

$

 

3,471,561

 

 

48.9

%

 

$

 

3,043,668

 

 

46.6

%

Operating earnings

 

 

9,191

 

 

 

 

 

 

 

11,699

 

 

 

 

 

 

 

34,990

 

 

 

 

 

 

 

36,564

 

 

 

 

Retail Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

596,659

 

 

29.0

%

 

 

 

561,605

 

 

28.1

%

 

 

 

2,010,483

 

 

28.3

%

 

 

 

1,833,347

 

 

28.0

%

Operating earnings

 

 

22,318

 

 

 

 

 

 

 

6,726

 

 

 

 

 

 

 

59,416

 

 

 

 

 

 

 

14,600

 

 

 

 

Military Segment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

451,953

 

 

21.9

%

 

 

 

499,156

 

 

24.9

%

 

 

 

1,619,329

 

 

22.8

%

 

 

 

1,661,097

 

 

25.4

%

Operating loss

 

 

(2,511

)

 

 

 

 

 

 

(2,646

)

 

 

 

 

 

 

(9,406

)

 

 

 

 

 

 

(5,806

)

 

 

 

Total:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

 

2,060,816

 

 

100.0

%

 

$

 

1,999,808

 

 

100.0

%

 

$

 

7,101,373

 

 

100.0

%

 

$

 

6,538,112

 

 

100.0

%

Operating earnings

 

 

28,998

 

 

 

 

 

 

 

15,779

 

 

 

 

 

 

 

85,000

 

 

 

 

 

 

 

45,358

 

 

 

 

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, the Company also provides information regarding Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“adjusted EBITDA”), adjusted operating earnings, adjusted earnings from continuing operations, total net long-term debt, free cash flow and projected adjusted earnings per diluted share from continuing operations. These are non-GAAP financial measures, as defined below, and are used by management to allocate resources, assess performance against its peers and evaluate overall performance. The Company believes these measures provide useful information for both management and its investors. The Company believes these non-GAAP measures are useful to investors because they provide additional understanding of the trends and special circumstances that affect its business. These measures provide useful supplemental information that helps investors to establish a basis for expected performance and the ability to evaluate actual results against that expectation. The measures, when considered in connection with GAAP results, can be used to assess the overall performance of the Company as well as assess the Company’s performance against its peers. These measures are also used as a basis for certain compensation programs sponsored by the Company. In addition, securities analysts, fund managers and other shareholders and stakeholders that communicate with the Company request its financial results in these adjusted formats.

Current year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude “Fresh Cut operating losses” subsequent to the decision to exit these operations during the first quarter, severance associated with cost reduction initiatives, and fees paid to a third-party advisory firm associated with Project One Team, the Company’s initiative to drive growth while increasing efficiency and reducing costs. Pension termination income related to a refund from the annuity provider associated with the final reconciliation of participant data is excluded from adjusted earnings from continuing operations. These items are considered “non-operational” or “non-core” in nature. Prior year adjusted operating earnings, adjusted earnings from continuing operations, and adjusted EBITDA exclude “Fresh Kitchen operating losses” subsequent to the decision to exit these operations at the beginning of the third quarter, costs associated with organizational realignment, which include significant changes to the Company’s management team, and fees paid to a third-party advisory firm associated with Project One Team, the Company’s initiative to drive growth while increasing efficiency and reducing costs. Pension termination costs, primarily related to non-operating settlement expense associated with the distribution of pension assets, are excluded from adjusted earnings from continuing operations, and to a lesser extent adjusted operating earnings.

Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization

(Adjusted EBITDA)

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

 

October 3, 2020

 

 

October 5, 2019

 

Net earnings (loss)

$

 

19,952

 

 

$

 

(337

)

 

$

 

63,821

 

 

$

 

318

 

Loss from discontinued operations, net of tax

 

 

—

 

 

 

 

27

 

 

 

 

—

 

 

 

 

126

 

Income tax expense (benefit)

 

 

5,564

 

 

 

 

(1,656

)

 

 

 

7,513

 

 

 

 

(1,973

)

Other expenses, net

 

 

3,482

 

 

 

 

17,745

 

 

 

 

13,666

 

 

 

 

46,887

 

Operating earnings

 

 

28,998

 

 

 

 

15,779

 

 

 

 

85,000

 

 

 

 

45,358

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

387

 

 

 

 

1,268

 

 

 

 

3,158

 

 

 

 

3,761

 

Depreciation and amortization

 

 

20,858

 

 

 

 

20,351

 

 

 

 

68,611

 

 

 

 

67,513

 

Merger/acquisition and integration

 

 

242

 

 

 

 

—

 

 

 

 

242

 

 

 

 

1,364

 

Restructuring, asset impairment and other charges

 

 

6,543

 

 

 

 

1,296

 

 

 

 

20,455

 

 

 

 

10,215

 

Fresh Cut operating losses

 

 

—

 

 

 

 

—

 

 

 

 

2,262

 

 

 

 

—

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

2,204

 

 

 

 

—

 

 

 

 

2,204

 

Stock-based compensation

 

 

1,033

 

 

 

 

638

 

 

 

 

5,181

 

 

 

 

6,735

 

Non-cash rent

 

 

(1,188

)

 

 

 

(1,082

)

 

 

 

(3,981

)

 

 

 

(4,542

)

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

493

 

 

 

 

5,428

 

Organizational realignment costs

 

 

—

 

 

 

 

935

 

 

 

 

—

 

 

 

 

1,812

 

Severance associated with cost reduction initiatives

 

 

40

 

 

 

 

—

 

 

 

 

5,121

 

 

 

 

—

 

Loss on disposal of assets

 

 

35

 

 

 

 

—

 

 

 

 

3,462

 

 

 

 

—

 

Other non-cash charges

 

 

94

 

 

 

 

187

 

 

 

 

193

 

 

 

 

710

 

Adjusted EBITDA

$

 

57,042

 

 

$

 

41,576

 

 

$

 

190,197

 

 

$

 

140,558

 

Table 2: Reconciliation of Net Earnings to Adjusted Earnings Before Interest, Taxes, Depreciation

and Amortization, continued

(Adjusted EBITDA)

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

 

October 3, 2020

 

 

October 5, 2019

 

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

9,191

 

 

$

 

11,699

 

 

$

 

34,990

 

 

$

 

36,564

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

295

 

 

 

 

639

 

 

 

 

1,684

 

 

 

 

1,869

 

Depreciation and amortization

 

 

7,413

 

 

 

 

7,390

 

 

 

 

24,561

 

 

 

 

25,368

 

Merger/acquisition and integration

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(130

)

Restructuring, asset impairment and other charges

 

 

6,538

 

 

 

 

1,043

 

 

 

 

19,222

 

 

 

 

10,724

 

Fresh Cut operating losses

 

 

—

 

 

 

 

—

 

 

 

 

2,262

 

 

 

 

—

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

2,204

 

 

 

 

—

 

 

 

 

2,204

 

Stock-based compensation

 

 

522

 

 

 

 

302

 

 

 

 

2,524

 

 

 

 

3,319

 

Non-cash rent

 

 

31

 

 

 

 

147

 

 

 

 

125

 

 

 

 

353

 

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

265

 

 

 

 

2,877

 

Organizational realignment costs

 

 

—

 

 

 

 

495

 

 

 

 

—

 

 

 

 

960

 

Severance associated with cost reduction initiatives

 

 

—

 

 

 

 

—

 

 

 

 

3,143

 

 

 

 

—

 

(Gain) loss on disposal of assets

 

 

(6

)

 

 

 

—

 

 

 

 

1,613

 

 

 

 

—

 

Other non-cash charges

 

 

52

 

 

 

 

14

 

 

 

 

103

 

 

 

 

391

 

Adjusted EBITDA

$

 

24,036

 

 

$

 

23,933

 

 

$

 

90,492

 

 

$

 

84,499

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

22,318

 

 

$

 

6,726

 

 

$

 

59,416

 

 

$

 

14,600

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO (gain) expense

 

 

(15

)

 

 

 

257

 

 

 

 

586

 

 

 

 

858

 

Depreciation and amortization

 

 

10,489

 

 

 

 

10,197

 

 

 

 

34,570

 

 

 

 

33,048

 

Merger/acquisition and integration

 

 

242

 

 

 

 

—

 

 

 

 

242

 

 

 

 

1,494

 

Restructuring charges (gains) and asset impairment

 

 

5

 

 

 

 

253

 

 

 

 

1,233

 

 

 

 

(509

)

Stock-based compensation

 

 

364

 

 

 

 

222

 

 

 

 

1,756

 

 

 

 

2,325

 

Non-cash rent

 

 

(1,134

)

 

 

 

(1,149

)

 

 

 

(3,818

)

 

 

 

(4,612

)

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

164

 

 

 

 

1,845

 

Organizational realignment costs

 

 

—

 

 

 

 

318

 

 

 

 

—

 

 

 

 

616

 

Severance associated with cost reduction initiatives

 

 

9

 

 

 

 

—

 

 

 

 

1,441

 

 

 

 

—

 

Loss on disposal of assets

 

 

34

 

 

 

 

—

 

 

 

 

1,905

 

 

 

 

—

 

Other non-cash charges

 

 

30

 

 

 

 

243

 

 

 

 

64

 

 

 

 

410

 

Adjusted EBITDA

$

 

32,342

 

 

$

 

17,067

 

 

$

 

97,559

 

 

$

 

50,075

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

 

(2,511

)

 

$

 

(2,646

)

 

$

 

(9,406

)

 

$

 

(5,806

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIFO expense

 

 

107

 

 

 

 

372

 

 

 

 

888

 

 

 

 

1,034

 

Depreciation and amortization

 

 

2,956

 

 

 

 

2,764

 

 

 

 

9,480

 

 

 

 

9,097

 

Stock-based compensation

 

 

147

 

 

 

 

114

 

 

 

 

901

 

 

 

 

1,091

 

Non-cash rent

 

 

(85

)

 

 

 

(80

)

 

 

 

(288

)

 

 

 

(283

)

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

64

 

 

 

 

706

 

Organizational realignment costs

 

 

—

 

 

 

 

122

 

 

 

 

—

 

 

 

 

236

 

Severance associated with cost reduction initiatives

 

 

31

 

 

 

 

—

 

 

 

 

537

 

 

 

 

—

 

Loss (gain) on disposal of assets

 

 

7

 

 

 

 

—

 

 

 

 

(56

)

 

 

 

—

 

Other non-cash charges (gains)

 

 

12

 

 

 

 

(70

)

 

 

 

26

 

 

 

 

(91

)

Adjusted EBITDA

$

 

664

 

 

$

 

576

 

 

$

 

2,146

 

 

$

 

5,984

 

Notes: Adjusted EBITDA is a non-GAAP operating financial measure that the Company defines as net earnings plus interest, discontinued operations, depreciation and amortization, and other non-cash items including deferred (stock) compensation, the LIFO provision, as well as adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

Adjusted EBITDA and adjusted EBITDA by segment are not measures of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definitions of adjusted EBITDA and adjusted EBITDA by segment may not be identical to similarly titled measures reported by other companies.

Table 3: Reconciliation of Operating Earnings to Adjusted Operating Earnings

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

12 Weeks Ended

 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

 

October 3, 2020

 

 

October 5, 2019

 

Operating earnings

$

 

28,998

 

 

$

 

15,779

 

 

$

 

85,000

 

 

$

 

45,358

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

242

 

 

 

 

—

 

 

 

 

242

 

 

 

 

1,364

 

Restructuring, asset impairment and other

 

 

6,543

 

 

 

 

1,296

 

 

 

 

20,455

 

 

 

 

10,215

 

Fresh Cut operating losses

 

 

—

 

 

 

 

—

 

 

 

 

2,262

 

 

 

 

—

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

2,204

 

 

 

 

—

 

 

 

 

2,204

 

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

493

 

 

 

 

5,428

 

Organizational realignment costs

 

 

—

 

 

 

 

935

 

 

 

 

—

 

 

 

 

1,812

 

Expenses associated with tax planning

 

 

(15

)

 

 

 

—

 

 

 

 

82

 

 

 

 

—

 

Pension termination

 

 

—

 

 

 

 

28

 

 

 

 

—

 

 

 

 

48

 

Severance associated with cost reduction initiatives

 

 

40

 

 

 

 

43

 

 

 

 

5,121

 

 

 

 

484

 

Adjusted operating earnings

$

 

35,808

 

 

$

 

20,285

 

 

$

 

113,655

 

 

$

 

66,913

 

Reconciliation of operating earnings (loss) to adjusted operating earnings (loss) by segment:

 

Food Distribution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

9,191

 

 

$

 

11,699

 

 

$

 

34,990

 

 

$

 

36,564

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(130

)

Restructuring, asset impairment and other

 

 

6,538

 

 

 

 

1,043

 

 

 

 

19,222

 

 

 

 

10,724

 

Fresh Cut operating losses

 

 

—

 

 

 

 

—

 

 

 

 

2,262

 

 

 

 

—

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

2,204

 

 

 

 

—

 

 

 

 

2,204

 

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

265

 

 

 

 

2,877

 

Organizational realignment costs

 

 

—

 

 

 

 

495

 

 

 

 

—

 

 

 

 

960

 

Expenses associated with tax planning

 

 

(8

)

 

 

 

—

 

 

 

 

44

 

 

 

 

—

 

Pension termination

 

 

—

 

 

 

 

15

 

 

 

 

—

 

 

 

 

26

 

Severance associated with cost reduction initiatives

 

 

—

 

 

 

 

31

 

 

 

 

3,143

 

 

 

 

392

 

Adjusted operating earnings

$

 

15,721

 

 

$

 

15,487

 

 

$

 

59,926

 

 

$

 

53,617

 

Retail:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

$

 

22,318

 

 

$

 

6,726

 

 

$

 

59,416

 

 

$

 

14,600

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

242

 

 

 

 

—

 

 

 

 

242

 

 

 

 

1,494

 

Restructuring charges (gains) and asset impairment

 

 

5

 

 

 

 

253

 

 

 

 

1,233

 

 

 

 

(509

)

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

164

 

 

 

 

1,845

 

Organizational realignment costs

 

 

—

 

 

 

 

318

 

 

 

 

—

 

 

 

 

616

 

Expenses associated with tax planning

 

 

(5

)

 

 

 

—

 

 

 

 

27

 

 

 

 

—

 

Pension termination

 

 

—

 

 

 

 

10

 

 

 

 

—

 

 

 

 

17

 

Severance associated with cost reduction initiatives

 

 

9

 

 

 

 

12

 

 

 

 

1,441

 

 

 

 

83

 

Adjusted operating earnings

$

 

22,569

 

 

$

 

7,319

 

 

$

 

62,523

 

 

$

 

18,146

 

Military:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

 

(2,511

)

 

$

 

(2,646

)

 

$

 

(9,406

)

 

$

 

(5,806

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs associated with Project One Team

 

 

—

 

 

 

 

—

 

 

 

 

64

 

 

 

 

706

 

Organizational realignment costs

 

 

—

 

 

 

 

122

 

 

 

 

—

 

 

 

 

236

 

Expenses associated with tax planning

 

 

(2

)

 

 

 

—

 

 

 

 

11

 

 

 

 

—

 

Pension termination

 

 

—

 

 

 

 

3

 

 

 

 

—

 

 

 

 

5

 

Severance associated with cost reduction initiatives

 

 

31

 

 

 

 

—

 

 

 

 

537

 

 

 

 

9

 

Adjusted operating loss

$

 

(2,482

)

 

$

 

(2,521

)

 

$

 

(8,794

)

 

$

 

(4,850

)

Notes: Adjusted operating earnings is a non-GAAP operating financial measure that the Company defines as operating earnings plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

Adjusted operating earnings is not a measure of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for operating earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted operating earnings may not be identical to similarly titled measures reported by other companies.

Table 4: Reconciliation of Earnings (loss) from Continuing Operations to

Adjusted Earnings from Continuing Operations

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

12 Weeks Ended

 

 

 

October 3, 2020

 

 

October 5, 2019

 

 

 

 

 

 

per diluted

 

 

 

 

 

per diluted

 

 

(In thousands, except per share amounts)

Earnings

 

 

share

 

 

Earnings

 

 

share

 

 

Earnings (loss) from continuing operations

$

 

19,952

 

 

$

 

0.56

 

 

$

 

(310

)

 

$

 

(0.01

)

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

242

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Restructuring, asset impairment and other

 

 

6,543

 

 

 

 

 

 

 

 

 

1,296

 

 

 

 

 

 

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

 

 

 

 

 

2,204

 

 

 

 

 

 

 

Organizational realignment costs

 

 

—

 

 

 

 

 

 

 

 

 

935

 

 

 

 

 

 

 

Loss on debt extinguishment

 

 

—

 

 

 

 

 

 

 

 

 

329

 

 

 

 

 

 

 

Severance associated with cost reduction initiatives

 

 

40

 

 

 

 

 

 

 

 

 

43

 

 

 

 

 

 

 

Expenses associated with tax planning

 

 

(15

)

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Pension termination

 

 

—

 

 

 

 

 

 

 

 

 

10,159

 

 

 

 

 

 

 

Total adjustments

 

 

6,810

 

 

 

 

 

 

 

 

 

14,966

 

 

 

 

 

 

 

Income tax effect on adjustments (a)

 

 

(1,830

)

 

 

 

 

 

 

 

 

(3,751

)

 

 

 

 

 

 

Impact of CARES Act (b)

 

 

212

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Total adjustments, net of taxes

 

 

5,192

 

 

 

 

0.14

 *

 

 

11,215

 

 

 

 

0.31

 

 

Adjusted earnings from continuing operations

$

 

25,144

 

 

$

 

0.70

 

 

$

 

10,905

 

 

$

 

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40 Weeks Ended

 

 

 

October 3, 2020

 

 

October 5, 2019

 

 

 

 

 

 

per diluted

 

 

 

 

 

per diluted

 

 

(In thousands, except per share amounts)

Earnings

 

 

share

 

 

Earnings

 

 

share

 

 

Earnings from continuing operations

$

 

63,821

 

 

$

 

1.78

 

 

$

 

444

 

 

$

 

0.01

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration

 

 

242

 

 

 

 

 

 

 

 

 

1,364

 

 

 

 

 

 

 

Restructuring, asset impairment and other

 

 

20,455

 

 

 

 

 

 

 

 

 

10,215

 

 

 

 

 

 

 

Fresh Cut operating losses

 

 

2,262

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Fresh Kitchen operating losses

 

 

—

 

 

 

 

 

 

 

 

 

2,204

 

 

 

 

 

 

 

Costs associated with Project One Team

 

 

493

 

 

 

 

 

 

 

 

 

5,428

 

 

 

 

 

 

 

Organizational realignment costs

 

 

—

 

 

 

 

 

 

 

 

 

1,812

 

 

 

 

 

 

 

Loss on debt extinguishment

 

 

—

 

 

 

 

 

 

 

 

 

329

 

 

 

 

 

 

 

Severance associated with cost reduction initiatives

 

 

5,121

 

 

 

 

 

 

 

 

 

484

 

 

 

 

 

 

 

Expenses associated with tax planning

 

 

82

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Pension termination

 

 

(1,004

)

 

 

 

 

 

 

 

 

19,510

 

 

 

 

 

 

 

Total adjustments

 

 

27,651

 

 

 

 

 

 

 

 

 

41,346

 

 

 

 

 

 

 

Income tax effect on adjustments (a)

 

 

(6,827

)

 

 

 

 

 

 

 

 

(10,166

)

 

 

 

 

 

 

Impact of CARES Act (b)

 

 

(9,298

)

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

Total adjustments, net of taxes

 

 

11,526

 

 

 

 

0.32

 

 

 

 

31,180

 

 

 

 

0.86

 

 

Adjusted earnings from continuing operations

$

 

75,347

 

 

$

 

2.10

 

 

$

 

31,624

 

 

$

 

0.87

 

 

* Includes rounding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

 

The income tax effect on adjustments is computed by applying the applicable tax rate to the adjustments.

(b)

 

Represents tax impacts attributable to the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, primarily related to additional deductions and the utilization of net operating loss carrybacks.

Notes: Adjusted earnings from continuing operations is a non-GAAP operating financial measure that the Company defines as earnings from continuing operations plus or minus adjustments for items that do not reflect the ongoing operating activities of the Company and costs associated with the closing of operational locations.

Adjusted earnings from continuing operations is not a measure of performance under accounting principles generally accepted in the United States of America and should not be considered as a substitute for net earnings, cash flows from operating activities and other income or cash flow statement data. The Company’s definition of adjusted earnings from continuing operations may not be identical to similarly titled measures reported by other companies.

Table 5: Reconciliation of Long-Term Debt and Finance Lease Obligations to Net Long-Term Debt

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

October 3,

 

 

December 28,

 

(In thousands)

2020

 

 

2019

 

Current portion of long-term debt and finance lease liabilities

$

 

5,338

 

 

$

 

6,349

 

Long-term debt and finance lease liabilities

 

 

540,920

 

 

 

 

682,204

 

Total debt

 

 

546,258

 

 

 

 

688,553

 

Cash and cash equivalents

 

 

(26,903

)

 

 

 

(24,172

)

Net long-term debt

$

 

519,355

 

 

$

 

664,381

 

Notes: Net long-term debt is a non-GAAP financial measure that is defined as long-term debt and finance lease obligations plus current maturities of long-term debt and finance lease obligations less cash and cash equivalents. The Company believes both management and its investors find the information useful because it reflects the amount of long-term debt obligations that are not covered by available cash and temporary investments. Net long-term debt is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 6: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

Net cash provided by operating activities

$

 

223,832

 

 

$

 

140,034

 

Less:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

45,880

 

 

 

 

46,905

 

Free cash flow

$

 

177,952

 

 

$

 

93,129

 

Notes: Free cash flow is a non-GAAP financial measure calculated by subtracting capital expenditures from cash flows provided by operating activities, the most directly comparable GAAP measure. The Company believes it is a useful indicator of liquidity that provides information to both management and investors about the amount of cash generated from operations that, after capital expenditures, can be used for strategic business objectives, including the repayment of long-term debt. Free cash flow is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 7: Reconciliation of Purchases of Property and Equipment to Capital Expenditures and IT Capital

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

40 Weeks Ended

 

(In thousands)

October 3, 2020

 

 

October 5, 2019

 

Purchases of property and equipment

$

 

45,880

 

 

$

 

46,905

 

Plus:

 

 

 

 

 

 

 

 

 

Cloud computing spend

 

 

7,658

 

 

 

 

—

 

Capital expenditures and IT capital

$

 

53,538

 

 

$

 

46,905

 

Notes: Capital expenditures and IT capital is a non-GAAP financial measure calculated by adding spending related to the development of cloud computing applications spend to capital expenditures, the most directly comparable GAAP measure. Cloud computing spend only includes costs incurred during the application development phase and does not include ongoing costs of hosting or maintenance associated with these applications, which are expensed as incurred. The Company believes it is a useful indicator of the Company’s investment in its facilities and systems as it transitions to more cloud-based IT systems. Capital expenditures and IT capital is not a substitute for GAAP financial measures and may differ from similarly titled measures of other companies.

Table 8: Reconciliation of Projected Earnings per Diluted Share from Continuing Operations to

Projected Adjusted Earnings per Diluted Share from Continuing Operations

(A Non-GAAP Financial Measure)

(Unaudited)

 
 

 

53 Weeks Ending

January 2, 2021

 

 

Low

 

 

High

 

Earnings from continuing operations

$

 

2.09

 

 

$

 

2.17

 

Adjustments, net of taxes:

 

 

 

 

 

 

 

 

 

Merger/acquisition and integration expenses

 

 

0.01

 

 

 

 

0.01

 

Costs associated with Project One Team

 

 

0.01

 

 

 

 

0.01

 

Pension termination

 

 

(0.02

)

 

 

 

(0.02

)

Restructuring and asset impairment

 

 

0.43

 

 

 

 

0.43

 

Severance associated with cost reduction initiatives

 

 

0.11

 

 

 

 

0.11

 

Fresh Cut operating losses

 

 

0.05

 

 

 

 

0.05

 

Impact of CARES Act

 

 

(0.26

)

 

 

 

(0.26

)

Adjusted earnings from continuing operations

$

 

2.42

 

 

$

 

2.50

 

 

Investors:

Mark Shamber

Chief Financial Officer and Executive Vice President

(616) 878-8023

Chris Mandeville

ICR

(203) 682-8304

Jeff Sonnek

ICR

(646) 277-1263

Media:

Meredith Gremel

Vice President Corporate Affairs and Communications

(616) 878-2830

KEYWORDS: United States North America Michigan

INDUSTRY KEYWORDS: Retail Supermarket Food/Beverage

MEDIA:

Posted on

TELA Bio Announces Third Quarter 2020 Financial Results

MALVERN, Pa., Nov. 11, 2020 (GLOBE NEWSWIRE) — TELA Bio, Inc. (“TELA”) (Nasdaq: TELA), a commercial-stage medical technology company focused on designing, developing and marketing a new category of tissue reinforcement materials to address unmet needs in soft tissue reconstruction, today reported financial results for the third quarter ended September 30, 2020. 

Recent Highlights

  • Reported revenue of $5.3 million for the third quarter of 2020, increasing 34% over the third quarter of 2019
     
  • Presented additional data from the BRAVO post-market study, further demonstrating a low incidence of surgical site infections and occurrences and an initial two-year hernia recurrence rate of zero
     
  • Strategically added to commercial sales team and continued to educate surgeons through TELA LIVE virtual programs

“I am pleased with our strong third quarter results and proud of our team in continuing to execute and deliver to our customers and patients despite the ongoing challenges associated with the current pandemic,” said Antony Koblish, co-founder, President and Chief Executive Officer of TELA Bio. “While we are encouraged by the healthy rebound we saw in hernia procedures in the third quarter, there continues to be uncertainty in light of the increased number of daily COVID-19 cases in certain regions of the country. However, we remain cautiously optimistic and prepared as a team to meet the challenges of these dynamic times and adapt our commercial plan to ensure that we can continue to support our customers and advance our mission of improving patient care and outcomes.”

Third Quarter 2020 Financial Results

Revenue was $5.3 million for the third quarter of 2020, an increase of 34% compared to the prior year period. Despite strong quarterly revenue, revenue growth in the third quarter was impacted by lower than expected procedural volumes as a result of hospitals and patients deferring elective procedures and other factors related to the COVID-19 pandemic.

Gross profit was $3.3 million for the third quarter of 2020, or 62% of revenue, compared to $2.6 million, or 66% of revenue, in the same period in 2019. The decrease in gross margin was due to the increase in the charge for excess and obsolete inventory adjustments as a percentage of revenue.

Operating expenses were $10.2 million in the third quarter of 2020, compared to $6.5 million in the same period in 2019. The increase was due to the expansion of our commercialization activities, increased outside development expenses and increased costs associated with operating as a public company, which were partially offset by lower travel and consulting expenses resulting from the cost containment actions taken in response to the COVID-19 pandemic.

Loss from operations was $6.9 million in the third quarter of 2020, compared to a loss from operations of $3.9 million in the same period in 2019.

Net loss was $7.7 million in the third quarter of 2020, compared to a net loss of $4.7 million in the same period in 2019.

Total cash and cash equivalents at September 30, 2020 were $81.5 million.

Financial Outlook

There is considerable uncertainty and lack of visibility regarding the Company’s near-term revenue growth prospects and product development plans due to the rapidly evolving environment resulting from the COVID-19 pandemic. The COVID-19 pandemic is a highly fluid situation, and it is not currently possible for the Company to reasonably estimate the impact that it may have on financial and operating results.  Accordingly, TELA Bio will not be providing 2020 financial guidance. 

Conference Call and Webcast Details

The Company will host a live conference call and webcast to discuss these results and provide a corporate update on Wednesday, November 11, 2020, at 4:30 PM ET.

To participate in the call, please dial (855) 548-1219 (domestic) or (409) 217-8881 (international) and provide conference ID 1670209. The live webcast will be available on the Events & Presentations page of the Investors section of TELA’s website.

About TELA Bio, Inc.

TELA Bio, Inc. is a commercial-stage medical technology company focused on designing, developing and marketing a new category of tissue reinforcement materials to address unmet needs in soft tissue reconstruction. TELA’s products are designed to improve on shortcomings of existing biologics and minimize long-term exposure to permanent synthetic material. TELA’s portfolio is supported by quality, data-driven science and extensive pre-clinical research that has consistently demonstrated advantages over other commercially available products.

Caution Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA’s management. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: the impact to our business of the ongoing COVID-19 pandemic, including but not limited to any impact on our ability to market our products, demand for our products due to deferral of procedures using our products or disruption in our supply chain, our ability to achieve or sustain profitability, our ability to gain market acceptance for our products and to accurately forecast and meet customer demand, our ability to compete successfully, our ability to enhance our product offerings, development and manufacturing problems, capacity constraints or delays in production of our products, maintenance of coverage and adequate reimbursement for procedures using our products, product defects or failures. These and other risks and uncertainties are described more fully in the “Risk Factors” section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov, including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA assumes no obligation to updates to our forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

TELA Bio Contact

Stuart Henderson
Vice President, Corporate Development and Investor Relations
TELA Bio, Inc.
484-320-2930

Investor Contact
Greg Chodaczek
347-620-7010 
[email protected]

TELA Bio, Inc.

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

           
  September 30,    December 31, 
  2020
      2019
Assets          
Current assets:          
Cash and cash equivalents $ 81,467     $ 45,302  
Short-term investments   —       9,285  
Accounts receivable, net   2,640       2,836  
Inventory   4,042       4,603  
Prepaid expenses and other assets   867       2,308  
Total current assets   89,016       64,334  
Property and equipment, net   652       677  
Intangible assets, net   2,683       2,911  
Total assets $ 92,351     $ 67,922  
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable $ 976     $ 3,171  
Accrued expenses and other current liabilities   4,369       3,542  
Total current liabilities   5,345       6,713  
Long‑term debt with related party   30,673       30,243  
Other long‑term liabilities   —       4  
Total liabilities   36,018       36,960  
           
Stockholders’ equity:          
Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding   —       —  
Common stock; $0.001 par value: 200,000,000 shares authorized; 14,432,472 and 11,406,976 shares issued and 14,432,220 and 11,406,221 shares outstanding at September 30, 2020 and December 31, 2019, respectively   14       11  
Additional paid-in capital   245,199       198,829  
Accumulated other comprehensive loss   (17 )     (19 )
Accumulated deficit   (188,863 )     (167,859 )
Total stockholders’ equity   56,333       30,962  
Total liabilities and stockholders’ equity $ 92,351     $ 67,922  

TELA Bio, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)

                       
  Three months ended   Nine months ended
  September 30,    September 30, 
  2020
   2019
   2020
   2019
Revenue $ 5,313     $ 3,973     $ 12,546     $ 10,582  
Cost of revenue (excluding amortization of intangible assets)   1,950       1,293       4,746       4,045  
Amortization of intangible assets   76       76       228       228  
Gross profit   3,287       2,604       7,572       6,309  
Operating expenses:                      
Sales and marketing   6,342       4,736       15,734       12,678  
General and administrative   2,607       1,208       7,274       3,737  
Research and development   1,201       516       3,092       3,230  
Total operating expenses   10,150       6,460       26,100       19,645  
Loss from operations   (6,863 )     (3,856 )     (18,528 )     (13,336 )
Other (expense) income:                      
Interest expense   (898 )     (899 )     (2,661 )     (2,725 )
Change in fair value of preferred stock warrant liability   —       34       —       (4 )
Other income   58       55       185       172  
Total other (expense) income   (840 )     (810 )     (2,476 )     (2,557 )
Net loss   (7,703 )     (4,666 )     (21,004 )     (15,893 )
Accretion of redeemable convertible preferred stock to redemption value   —       (2,058 )     —       (6,843 )
Net loss attributable to common stockholders $ (7,703 )   $ (6,724 )   $ (21,004 )   $ (22,736 )
Net loss per common share, basic and diluted $ (0.53 )   $ (22.58 )   $ (1.69 )   $ (76.62 )
Weighted average common shares outstanding, basic and diluted   14,421,990       297,750       12,431,257       296,743  
Comprehensive loss:                      
Net loss $ (7,703 )   $ (4,666 )   $ (21,004 )   $ (15,893 )
Foreign currency translation adjustment   (29 )     1       2       (2 )
Comprehensive loss $ (7,732 )   $ (4,665 )   $ (21,002 )   $ (15,895 )

Posted on

ECN Capital Reports US$0.10 in Adjusted Net Income per Common Share in Q3-2020

Solid Q3 Results

TORONTO, Nov. 11, 2020 (GLOBE NEWSWIRE) — ECN Capital Corp. (TSX: ECN) (“ECN Capital” or the “Company”) today reported financial results for the three-month period ended September 30, 2020.

For the three-month period ended September 30, 2020, ECN Capital reported Adjusted netincomeapplicable to common shareholders from continuing operations of $23.3 million or $0.10 per share (basic) versus $17.0 million or $0.07 per share (basic) for the previous three-month period ended June 30, 2020 and $18.2 million or $0.08 per share (basic) for the same period last year.

“ECN’s strong Q3 earnings of $0.10, reflects ongoing strength in each of our businesses, which was apparent before Covid-19 and has continued in its face.”, said Steven Hudson, CEO of ECN Capital Corp. “We are reiterating guidance for 2020 at $0.31-$0.33, which is 15-22% above 2019 and given our performance confidently reiterating our guidance for 2021 at $0.44 – $0.53. I am very pleased with the resiliency of each of our businesses and look forward updating everyone at our Investor Day on February 4, 2021”

Originations for the three-month period ended September 30, 2020 were $842 million versus $676 million in the previous three-month period and $639 million for the same period last year.

Total Earning Assets
Manage
d
and Advis
ory as at September 30, 2020 were $32.2 billion, versus $33.3 billion as at June 30, 2020 and $32.6 billion at September 30, 2019.

Adjusted
EBITDA for the three-month period ended September 30, 2020 was $38.9 million versus $31.3 million for the previous three-month period and $34.0 million for the same period last year.

Operating Expenses for the three-month period ended September 30, 2020 were $30.6 million versus $29.9 million reported for the previous three-month period and $29.3 million for the same period last year.

Net Income
(loss)
attributable to common shareholders for the three-month period ended September 30, 2020 was $5.6 million versus ($1.8) million for the previous three-month period and $2.4 million for the same period last year.

Dividends Declared

The Company’s Board of Directors has authorized and declared a quarterly dividend of $0.025 per outstanding common share to be paid on December 31, 2020 to shareholders of record at the close of business on December 15, 2020. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

The Company’s Board of Directors declared the following dividends on ECN Capital’s preferred shares:

  • A quarterly dividend of $0.40625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series A (TSX: ECN.PR.A) payable on December 31, 2020 to shareholders of record on the close of business on December 15, 2020. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).
  • A quarterly dividend of $0.390625 per outstanding Cumulative 5-Year Rate Reset Preferred Share, Series C (TSX: ECN.PR.C) payable on December 31, 2020 to shareholders of record on the close of business on December 15, 2020. These dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

Webcast

The Company will host its analyst briefing to discuss these results commencing at 5:30 PM (ET) on Wednesday, November 11, 2020. The call can be accessed as follows:

Webcast http://services.choruscall.ca/links/ecncapitalcorp20201111.html
   
Toll-free dial in North America 1-800-319-8560
International 1-604-638-5345
Passcode 47234#
   
Presentation slides
http://ecncapitalcorp.com/investors/presentations

The webcast will be available until December 11, 2020. A recording of the conference call may also be accessed until February 11, 2021 by dialing 1-800-319-6413 and entering the passcode 5576#.

Non-IFRS Measures

The Company’s interim unaudited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and the accounting policies we adopted in accordance with IFRS.

The Company believes that certain Non-IFRS Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business of a given period. Throughout this Press Release, management used a number of terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations. A full description of these measures can be found in the Management Discussion & Analysis that accompanies the financial statements for the three and nine-month periods ended September 30, 2020.

ECN Capital’s Management Discussion and Analysis as at and for the three and nine-month periods ended September 30, 2020 has been filed on SEDAR (www.sedar.com) and is available under the investor section of the Company’s website (www.ecncapitalcorp.com).

About ECN Capital Corp.

With managed and advised assets of US$32 billion, ECN Capital Corp. (TSX: ECN) is a leading provider of business services to North American based banks, credit unions, life insurance companies, pension funds and investment funds (collectively our “Partners”). ECN Capital originates, manages and advises on credit assets on behalf of its Partners, specifically unsecured loan portfolios, secured loan portfolios and credit card portfolios. Our Partners are seeking high quality assets to match with their deposits or other liabilities. These services are offered through three operating businesses: Service Finance, Triad Financial Services and The Kessler Group.

Contact

John Wimsatt
647-649-4634
[email protected]

Forward-looking Statements

This release includes forward-looking statements regarding ECN Capital and its business. Such statements are based on the current expectations and views of future events of ECN Capital’s management. In some cases the forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe” or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Forward-looking statements in this press release include those relating to
the future financial and operating performance of ECN Capital, the strategic advantages, business plans and future opportunities of ECN Capital and the ability of ECN Capital to access adequate funding sources, identify and execute on acquisition opportunities and transition t
o an asset management business.
The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting ECN Capital, including risks regarding the equipment finance industry, economic factors, and many other factors bey
ond the control of ECN Capital.
No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information.
A discussion of the material risks and assumptions associated with this outlook can be fou
nd in ECN Capital’s
September
30
,
20
20
MD&A and
201
9
AIF Di
sclosure Document dated March
26
,
20
20
which
ha
ve
been filed on SEDAR and can be accessed at
www.sedar.com
.
Accordingly, readers should not place undue reliance on any forward-looking statements or information. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and ECN Capital does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.