Market Newsdesk

November 11, 2020 4:08 pm

Points International Reports Third Quarter 2020 Results

Launched Two New Loyalty Programs Through Strategic Partnership with Amadeus

Strong Pipeline Positions Company Well for Industry Recovery

TORONTO, Nov. 11, 2020 (GLOBE NEWSWIRE) — Points International Ltd. (TSX: PTS) (Nasdaq: PCOM) (Points or the Company), the global leader in powering loyalty commerce, is reporting financial results for the third quarter ended
September 30, 2020.

Unless otherwise noted, all comparisons are on a year-over-year basis and all amounts are in USD. The complete third quarter Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis, including segmented results, are available at www.sedar.com and www.sec.gov.

Third Quarter 2020 Financial Summary

	For the three months ended
(in millions of USD)	September 30, 2020	June 30, 2020	September 30, 2019
Total Revenue	$ 37.4	$40.9	$98.0
Gross Profit	$ 5.7	$7.0	$14.0
Net (Loss) Income	($ 2.5 )	($3.3)	$1.1
Adjusted EBITDA¹	($ 1.1 )	$0.3	$4.4

Recent Operational Highlights

Expanded Partnerships:
- Launched new Subscription service with United Airlines allowing select Mileage Plus members the opportunity to subscribe to a monthly ‘buy miles’ plan.
- Expanded long-term partnership with Delta Air Lines with the launch of Delta Choice, a state-of-the-art customer service program that enhances the way customers are compensated for travel issues.
- Deployed a new program between GetYourGuide, a leading tours and activity website, and Alaska Airlines’ Mileage Plan. Users can now earn miles when they shop at GetYourGuide.
- Launched new capability with Chase Bank Ultimate Rewards that allows cardholders to double their points when they transfer bank-branded points into select travel program rewards currencies.
- Launched new Transfer and Reinstate services for Air Canada’s new Aeroplan program, offering additional options for members to utilize their Aeroplan miles.

New Partnerships:
- Launched Buy, Gift and Transfer services with Caribbean Airlines’ loyalty program, Caribbean Miles, to provide a personalized experience for members to become more engaged in their program. This new partnership, which was initiated by Amadeus, went live in early November.
- Signed a new LCR contract with Ethiopian Airlines to take over the existing Buy, Gift and Transfer services currently managed by Amadeus, while adding new options that will generate both significant revenue and increased engagement for Ethiopian Airlines’ loyalty members.

Management Commentary

“During the third quarter, we continued to navigate a challenging market environment for travel and hospitality,” said Rob MacLean, CEO of Points. “As we have often stated, the timing of new loyalty program deployments and promotional activity can fluctuate quarter to quarter, and these fluctuations have only been exacerbated by the pandemic. As a result, our transaction volumes have remained down from pre-COVID levels. Despite these challenges, our teams have been active with business development to drive new programs and partnerships, and our pipeline remains even stronger now than it was before the pandemic. I am proud of our team’s dedication to driving these opportunities and supporting our partners across all three lines of business.

“In an environment that has placed unprecedented pressure on our travel partners, loyalty programs have proven to be a resilient source of value as our partners work to stabilize their businesses in the near-term and prepare for the return of strong consumer travel demand in the long-term. Several airlines have leveraged their frequent flyer program assets as collateral for debt financings, and operators across the industry have extended membership status and lowered redemption requirements to stimulate near-term travel activity. Our industry leading loyalty commerce solutions make our partners’ offerings more comprehensive and efficient, and this has enabled us to recently expand several key partnerships—such as United and Delta Airlines—while expanding our Amadeus relationship to sign new partnerships with operators like Caribbean Airlines and Ethiopian Airlines. This progress, in addition to important launches with Qatar and Air Canada earlier in the year, has continued the very strong trend of new business development during the pandemic that will help accelerate our performance as the industry recovers.

“Across our organization, our long-term growth drivers remain at the core of our strategy. We will continue to maximize the performance of our in-market services, cross-sell to existing partners and sign new partnerships across new verticals and geographies. As we look to the remainder of the year, we are expecting to see growth over the third quarter of 2020 and expect to generate positive Adjusted EBITDA¹ for 2020, which demonstrates our continued organizational and financial strength. While we cannot predict the timing of recovery for travel and hospitality demand, we remain dedicated to helping our partners see through this challenging period.”

Third Quarter 2020 Financial Results

Total revenue in the third quarter was $37.4 million compared to $98.0 million in the prior year quarter. Principal revenue was $33.9 million compared to $92.0 million, and other partner revenue was $3.5 million compared to $6.0 million.

Gross profit in the third quarter was $5.7 million compared to $14.0 million in the prior year quarter. The decrease in gross profit was primarily driven by the continued impacts of COVID-19 across all three operating segments.

Adjusted operating expenses² in the third quarter decreased to $6.9 million compared to $9.9 million in the prior year quarter. During the third quarter, Points recognized $1.8 million in wage subsidies under the Canada Emergency Wage Subsidy program, which was recorded as an offset to employment costs. The funds in respect of these wage subsidies were received after the quarter end. In addition, reduced discretionary spending and cost management in response to the pandemic also contributed to lower adjusted operating expenses² during the quarter.

Net loss in the third quarter was $2.5 million or $(0.19) per share, compared to net income of $1.1 million or $0.08 per share in the prior year quarter.

Adjusted EBITDA¹ in the third quarter was $(1.1) million compared to $4.4 million in the prior year quarter. The decline was primarily due to continued lower transaction volumes as a result of COVID-19.

At September 30, 2020, total funds available³ were $68.2 million compared to $86.8 million at December 31, 2019, with the decrease attributable to the impact of COVID-19 on overall sales activity, as well as the timing of promotional activity and partner payables. The Company elected to pay down $5 million on its credit facility during the third quarter, and the outstanding $30 million balance on the facility is reflected in the September 30, 2020 cash balance.

_____________________
_{¹ Adjusted EBITDA (Earnings before income tax expense, depreciation and amortization, foreign exchange, finance costs, equity-settled share-based compensation and other one-time costs or benefits such as impairment charges and a tax rebate related to prior periods) is considered by management to be a useful supplemental measure when assessing financial performance. Management also believes that Adjusted EBITDA is an important indicator of the Company’s ability to generate liquidity through operating cash flow to fund future capital expenditures and working capital needs. However, Adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for Net Income, which we believe to be the most directly comparable IFRS measure. See Performance Indicators and Non-GAAP Financial Measures section of Management’s Discussion and Analysis.}
_{² Adjusted operating expenses consist of employment expenses excluding equity-settled share-based compensation, marketing and communications, technology services and other operating expenses. Adjusted operating expense is not a measure of financial performance under IFRS and should not be considered a substitute for total operating expenses, which we believe to be the most directly comparable IFRS measure. See Non-GAAP Financial Measures.}
_{³ Total funds available is defined as cash and cash equivalents, cash held in trust, and funds receivable from payment processors.}

Conference Call

Points will hold a conference call today at 4:30 p.m. Eastern time to discuss its third quarter 2020 results, followed by a question-and-answer session.

Date: Wednesday, November 11, 2020
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-877-407-0784
International dial-in number: 1-201-689-8560
Conference ID: 13712315

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860.

A replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through November 25, 2020.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13712315

About Points International Ltd.

Points
, (TSX: PTS) (Nasdaq: PCOM) is a trusted partner to the world’s leading loyalty programs, leveraging its unique Loyalty Commerce Platform to build, power, and grow a network of ways members can get and use their favourite loyalty currency. Our platform combines insights, technology, and resources to make the movement of loyalty currency simpler and more intelligent for nearly 60 reward programs worldwide. Founded in 2000, Points is headquartered in Toronto with teams operating around the globe.

For more information, visit points.com.

Caution Regarding Forward-Looking Statements

This press release contains or incorporates forward-looking statements within the meaning of United States securities legislation, and forward-looking information within the meaning of Canadian securities legislation (collectively, “forward-looking statements”). These forward-looking statements include or relate to but are not limited to, among other things, our ability to be Adjusted EBITDA positive in fiscal 2020, our financial performance in Q4 2020, statements relating to plans we have implemented in response to the COVID-19 pandemic and its expected impact on us (including with respect to efforts to mitigate degradation in transaction volumes, our liquidity and capitalization and our cost mitigation efforts, our business pipeline and ability to sign and launch new loyalty program partnerships, our ability to sell additional products and services to existing loyalty program partners, and our growth strategies). These statements are not historical facts but instead represent only Points’ expectations, estimates and projections regarding future events.

Although Points believes the expectations reflected in such forward-looking statements are reasonable, such statements are not guarantees of future performance and are subject to important risks and uncertainties that are difficult to predict. Certain material assumptions or estimates are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Undue reliance should not be placed on such statements. In particular, uncertainty around the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response on global and regional economies, economic activity, and all elements of the travel and hospitality industry may have a significant and materially adverse impact on our business. In addition, the risks, uncertainties and other factors that may impact the results expressed or implied in such forward-looking statements include, but are not limited to: (i) airline or travel industry disruptions, such as an airline insolvency and continued airline consolidation; (ii) our dependence on a limited number of large clients for a significant portion of our consolidated revenue; (iii) our reliance on contractual relationships with loyalty program partners that are subject to termination and renegotiation; (iv) our exposure to significant liquidity risk if we fail to meet contractual performance commitments; (v) our ability to convert our pipeline of prospective partners or launch new products with new or existing partners as expected or planned; (vi) our dependence on various third-parties that provide certain solutions in our Platform Partners segment that we market to loyalty program partners; (vii) the fact that our operations are conducted in multiple jurisdictions and in multiple currencies and as such dramatic fluctuations in exchange rates of the foreign currencies can have a dramatic effect on our financial results and (viii) the risk of an event of default under our senior secured credit facility. These and other important risk factors that could cause actual results to differ materially are discussed in Points’ annual information form, Form 40-F, annual and interim management’s discussion and analysis (“MD&A”), and annual and interim financial statements and the notes thereto. These documents are available at www.sedar.com and www.sec.gov.

The forward-looking statements contained in this press release are made as at the date of this release and, accordingly, are subject to change after such date. Except as required by law, Points does not undertake any obligation to update or revise any forward-looking statements made or incorporated in this press release, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

The Company’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). Management uses certain non-GAAP measures, which are defined in the appropriate sections of this press release, to better assess the Company’s underlying performance. These measures are reviewed regularly by management and the Company’s Board of Directors in assessing the Company’s performance and in making decisions about ongoing operations. In addition, we use certain non-GAAP measures to determine the components of management compensation. We believe that these measures are also used by investors as an indicator of the Company’s operating performance. Readers are cautioned that these terms are not recognized GAAP measures and do not have a standardized GAAP meaning under IFRS and should not be construed as alternatives to IFRS terms, such as net income. Refer to “Performance Indicators and Non-GAAP Financial Measures” section of the Company’s Q3 2020 MD&A for reconciliation to, and description of the Company’s non-GAAP financial measures.

Investor Relations Contact

Sean Mansouri, CFA or Cody Slach
Gateway Investor Relations
1-949-574-3860
[email protected]

Points International Ltd.
Key Financial Measures and Schedule of Non-GAAP Reconciliations

Reconciliation of Gross Profit to Contribution ^[1]

Expressed in thousands of United States dollars
		For the three months ended
		September 30, 2020		September 30, 2019

Gross Profit		$	5,704	$	14,048
Less:
	Direct adjusted operating expenses ^[2]		3,721		6,269
Contribution		$	1,983	$	7,779


^[1] Contribution is defined as Gross profit less direct adjusted operating expenses. Contribution is considered by Management to be a useful supplemental measure when assessing financial performance. Management believes that Contribution is an important indicator of the Company’s segment profitability. However, Contribution is not a recognized measure of profitability under IFRS.

^[2] Direct adjusted operating expenses is defined as expenses which are directly attributable to each operating segment. Direct adjusted operating expenses is not a measure of financial performance under IFRS.

Contribution by Line of Business

Expressed in thousands of United States dollars
	For the three months ended
	September 30, 2020			September 30, 2019

Loyalty Currency Retailing
Revenue	$	36,165		$	95,677
Gross Profit		4,644			11,879
Direct adjusted operating expenses		2,312			3,605
Contribution	$	2,332		$	8,274

Platform Partners
Revenue	$	1,045		$	1,782
Gross Profit		850			1,631
Direct adjusted operating expenses		411			964
Contribution	$	439		$	667

Points Travel
Revenue	$	239		$	538
Gross Profit		210			538
Direct adjusted operating expenses		998			1,700
Contribution	$	(788	)	$	(1,162	)

Reconciliation of Net Income to Adjusted EBITDA ^[3]

Expressed in thousands of United States dollars
	For the three months ended
	September 30, 2020			September 30, 2019

Net (loss) income	$	(2,467	)	$	1,098
Income tax (recovery) expense		(863	)		670
Finance costs		223			51
Depreciation and amortization		1,173			1,131
Foreign exchange (gain) loss		(178	)		254
Equity-settled share-based payment expense		987			1,193
Adjusted EBITDA	$	(1,125	)	$	4,397


^[3] Adjusted EBITDA is a non-GAAP financial measure, which is defined as earnings before income tax expense, finance costs, depreciation and amortization, equity-settled share-based payment expense and foreign exchange. Management believes that adjusted EBITDA is an important indicator of the Company’s ability to generate liquidity through operating cash flow to fund future capital expenditures and working capital needs. However, adjusted EBITDA is not a measure of financial performance under IFRS and should not be considered a substitute for Net Income, which we believe to be the most directly comparable IFRS measure.

Reconciliation of Total Operating Expenses to Adjusted Operating Expenses ^[4]

Expressed in thousands of United States dollars
		For the three months ended
		September 30, 2020			September 30, 2019

Total Operating Expenses		$	8,838		$	12,437
Subtract (add):
	Depreciation and amortization		1,173			1,131
	Foreign exchange (gain) loss		(178	)		254
	Equity-settled share-based payment expense		987			1,193
Adjusted Operating Expenses		$	6,856		$	9,859


^[4] Adjusted operating expenses consists of employment expenses excluding equity-settled share-based payment expense, marketing & communications, technology services, and other operating expenses. Adjusted operating expenses is not a measure of financial performance under IFRS and should not be considered a substitute for total operating expenses, which we believe to be the most directly comparable IFRS measure.

Points International Ltd.
Condensed Consolidated Interim Statements of Financial Position

Expressed in thousands of United States dollars
(Unaudited)

As at			September 30, 2020			December 31, 2019

ASSETS
Current assets
	Cash and cash equivalents	$	64,016		$	69,965
	Cash held in trust		640			2,534
	Funds receivable from payment processors		3,584			14,302
	Accounts receivable		8,721			21,864
	Prepaid taxes		622			194
	Prepaid expenses and other assets		1,846			2,153
Total current assets		$	79,429		$	111,012

Non-current assets
	Property and equipment		1,712			2,371
	Right-of-use assets		2,071			3,060
	Intangible assets		12,608			12,806
	Goodwill		5,681			7,130
	Deferred tax assets		3,017			2,105
	Other assets		213			216
Total non-current assets		$	25,302		$	27,688
Total assets		$	104,731		$	138,700

LIABILITIES
Current liabilities
	Accounts payable and accrued liabilities	$	4,713		$	13,766
	Income taxes payable		411			2,326
	Payable to loyalty program partners		30,246			78,270
	Current portion of lease liabilities		1,153			1,323
	Current portion of other liabilities		1,018			797
Total current liabilities		$	37,541		$	96,482

Non-current liabilities
	Long term debt		30,000			–
	Lease liabilities		1,336			2,209
	Other liabilities		67			95
	Deferred tax liabilities		986			722
Total non-current liabilities		$	32,389		$	3,026
Total liabilities		$	69,930		$	99,508

SHAREHOLDERS’ EQUITY
	Share capital		49,107			45,799
	Contributed surplus		1,490			–
	Accumulated other comprehensive (loss) income		(29	)		184
	Accumulated deficit		(15,767	)		(6,791	)
Total shareholders’ equity		$	34,801		$	39,192
Total liabilities and shareholders’ equity		$	104,731		$	138,700

Points International Ltd.
Condensed Consolidated Interim Statements of Comprehensive Income

Expressed in thousands of United States dollars, except per share amounts
(Unaudited)
		For the three months ended						For the nine months ended
		September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019

REVENUE
	Principal	$	33,977		$	92,035		$	145,648		$	276,330
	Other partner revenue		3,472			5,962			15,381			17,840
Total Revenue		$	37,449		$	97,997		$	161,029		$	294,170
	Direct cost of revenue		31,745			83,949			134,510			246,304
Gross Profit		$	5,704		$	14,048		$	26,519		$	47,866

OPERATING EXPENSES
	Employment costs		5,447			7,887			18,079			23,090
	Marketing and communications		255			429			922			1,237
	Technology services		656			652			2,140			1,928
	Depreciation and amortization		1,173			1,131			3,681			3,399
	Foreign exchange (gain) loss		(178	)		254			(296	)		408
	Other operating expenses		1,485			2,084			5,525			5,557
	Impairment charges		–			–			1,798			–
Total Operating Expenses		$	8,838		$	12,437		$	31,849		$	35,619

	Finance income		(27	)		(208	)		(273	)		(727	)
	Finance costs		223			51			591			163

(LOSS) INCOME BEFORE INCOME TAXES		$	(3,330	)	$	1,768		$	(5,648	)	$	12,811

	Income tax (recovery) expense		(863	)		670			(974	)		3,680
NET (LOSS) INCOME		$	(2,467	)	$	1,098		$	(4,674	)	$	9,131

OTHER COMPREHENSIVE INCOME (LOSS)
	Items that will subsequently be reclassified to profit or loss:
	Unrealized gain (loss) on foreign exchange derivatives designated as cash flow hedges		242			(259	)		(724	)		225
	Income tax effect		(64	)		68			192			(60	)
	Reclassification to net income of loss on foreign exchange derivatives designated as cash flow hedges		79			117			438			525
	Income tax effect		(21	)		(31	)		(116	)		(139	)

	Foreign currency translation adjustment		(8	)		3			(3	)		21

Other comprehensive income (loss) for the period, net of income tax		$	228		$	(102	)	$	(213	)	$	572
TOTAL COMPREHENSIVE (LOSS) INCOME		$	(2,239	)	$	996		$	(4,887	)	$	9,703

(LOSS) EARNINGS PER SHARE
	Basic (loss) earnings per share	$	(0.19	)	$	0.08		$	(0.35	)	$	0.66
	Diluted (loss) earnings per share	$	(0.19	)	$	0.08		$	(0.35	)	$	0.66

Points International Ltd.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity

						Attributable to equity holders of the Company
Expressed in thousands of United States dollars except number of shares (Unaudited)	Share Capital					Contributed surplus			Accumulated other comprehensive (loss) income			Accumulated deficit			Total shareholders’ equity
	Number of Shares		Amount

Balance at December 31, 2019	13,241,516		$	45,799		$	–		$	184		$	(6,791	)	$	39,192
Net loss	–			–			–			–			(4,674	)		(4,674	)
Other comprehensive loss, net of tax	–			–			–			(213	)		–			(213	)
Total comprehensive loss	–			–			–			(213	)		(4,674	)		(4,887	)
Effect of equity-settled share-based payments	–			–			2,653			–			–			2,653
Share issuances – options exercised	53,374			483			(416	)		–			–			67
Settlement of RSUs	–			3,063			(4,245	)		–			–			(1,182	)
Shares repurchased and cancelled	(67,483	)		(238	)		(804	)		–			–			(1,042	)
Reclassification within equity ^[5]	–			–			4,302			–			(4,302	)		–
Balance at September 30, 2020	13,227,407		$	49,107		$	1,490		$	(29	)	$	(15,767	)	$	34,801


Balance at December 31, 2018	14,111,864		$	53,886		$	4,446		$	(646	)	$	(16,676	)	$	41,010
Net income	–			–			–			–			9,131			9,131
Other comprehensive income, net of tax	–			–			–			572			–			572
Total comprehensive income	–			–			–			572			9,131			9,703
Effect of equity-settled share-based payments	–			–			3,522			–			–			3,522
Share issuances – options exercised	2,338			28			(7	)		–			–			21
Settlement of RSUs	–			1,431			(4,534	)		–			–			(3,103	)
Shares purchased and held in trust	–			(3,636	)		–			–			–			(3,636	)
Shares repurchased and cancelled	(664,884	)		(2,533	)		(3,427	)		–			(1,825	)		(7,785	)
Balance at September 30, 2019	13,449,318		$	49,176		$	–		$	(74	)	$	(9,370	)	$	39,732

^[5]The Corporation has adopted a policy that when contributed surplus is in debit balance, the amount is reclassified to accumulated deficit for financial statement presentation purposes.

Points International Ltd.
Condensed Consolidated Interim Statements of Cash Flows
Expressed in thousands of United States dollars
(Unaudited)

		For the three months ended						For the nine months ended
		September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019

Cash flows from operating activities
Net (loss) income for the period		$	(2,467	)	$	1,098		$	(4,674	)	$	9,131
Adjustments for:
	Depreciation of property and equipment		332			316			1,008			894
	Depreciation of right-of-use assets		242			290			839			868
	Amortization of intangible assets		599			525			1,834			1,637
	Unrealized foreign exchange loss (gain)		800			(542	)		(66	)		(614	)
	Equity-settled share-based payment transactions		987			1,193			2,653			3,522
	Finance costs		223			51			591			163
	Deferred income tax (recovery) expense		(448	)		6			(572	)		448
	Impairment charges		–			–			1,798			–
Derivative contracts designated as cash flow hedges			322			(142	)		(285	)		750
Changes in cash held in trust			(144	)		–			1,894			500
Changes in non-cash balances related to operations			(28,157	)		(1,940	)		(35,268	)		(15,867	)
Interest paid			(233	)		(51	)		(551	)		(163	)
Net cash (used in) provided by operating activities		$	(27,944	)	$	804		$	(30,799	)	$	1,269

Cash flows from investing activities
Acquisition of property and equipment			(21	)		(130	)		(349	)		(798	)
Additions to intangible assets			(547	)		(61	)		(1,663	)		(600	)
Net cash used in investing activities		$	(568	)	$	(191	)	$	(2,012	)	$	(1,398	)

Cash flows from financing activities
Net (repayments to) proceeds from long term debt			(5,000	)		–			30,000			–
Payment of lease liabilities			(314	)		(350	)		(951	)		(808	)
Proceeds from exercise of share options			–			–			67			21
Shares repurchased and cancelled			–			(2,473	)		(1,042	)		(7,785	)
Purchase of share capital held in trust			–			(2,176	)		–			(3,636	)
Taxes paid on net settlement of RSUs			(2	)		(134	)		(1,182	)		(3,103	)
Net cash (used in) provided by financing activities		$	(5,316	)	$	(5,133	)	$	26,892		$	(15,311	)

Effect of exchange rate fluctuations on cash held			(747	)		545			(30	)		635

Net decrease in cash and cash equivalents		$	(34,575	)	$	(3,975	)	$	(5,949	)	$	(14,805	)
Cash and cash equivalents at beginning of the period		$	98,591		$	58,301		$	69,965		$	69,131
Cash and cash equivalents at end of the period		$	64,016		$	54,326		$	64,016		$	54,326

Interest Received		$	35		$	235		$	335		$	745
Taxes Paid		$	(9	)	$	(27	)	$	(1,851	)	$	(1,213	)

Amounts received in interest and paid in taxes were reflected as operating cash flows in the condensed consolidated interim statements of cash flows.

November 11, 2020 4:08 pm

Vroom Reports Third Quarter 2020 Results

Vroom Reports Third Quarter 2020 Results

Vroom Delivers Record Ecommerce Units and Gross Profit

Ecommerce Unit Sales Up 59% YoY

Ecommerce Gross Profit Up 120% YoY

NEW YORK–(BUSINESS WIRE)–
Vroom, Inc. (NASDAQ:VRM), a leading e-commerce platform for buying and selling used vehicles, today announced financial results for the third quarter ended September 30, 2020 (“Q3 2020”).

HIGHLIGHTS OF THIRD QUARTER 2020

8,823 ecommerce units sold, up 59% YoY
Ecommerce revenue of $221.8 million, up 25% YoY
Ecommerce gross profit of $19.3 million, up 120% YoY

Paul Hennessy, Chief Executive Officer of Vroom, commented:

“I am very pleased with our results for the third quarter, in which we successfully managed the challenges presented by the COVID-19 pandemic, outperformed our plan, demonstrated the strength of our business model, and hit the accelerator on significantly scaling our business. By doing the things we said we would do — adding vehicle inventory, increasing marketing, relying on data to drive decision making, and enhancing our customer experience — we increased the velocity of the Vroom flywheel, drove conversion and increased GPPU. We will continue to execute our plan and invest in the growth of our business as we transform the market for buying and selling used vehicles.”

COVID-19 Update

Note: All sequential comparisons are on a current quarter over prior quarter basis.

After the initial disruption in our ecommerce operations due to the COVID-19 pandemic, consumer demand for used vehicles has returned to pre-COVID-19 levels and, in the three months ended September 30, 2020, we experienced continued strong consumer demand for our ecommerce solutions and contact-free delivery. Ecommerce units sold increased sequentially 31.4% to 8,823 units driven by increased consumer demand, higher inventory levels and increased marketing spend, and ecommerce revenue increased sequentially 26.3% to $221.8 million.

Ecommerce gross profit and gross profit per unit experienced strong sequential growth of 167.4% to $19.3 million and 103.5% to $2,188 per unit, respectively.

THIRD QUARTER 2020 FINANCIAL DISCUSSION

All financial comparisons are on a year-over-year basis unless otherwise noted.

Ecommerce Results

	Three Months Ended September 30,											Nine Months Ended September 30,
	2019		2020			Change			% Change			2019		2020			Change			% Change
	(in thousands, except unit data and average days to sale)											(in thousands, except unit data and average days to sale)
Ecommerce units sold		5,563		8,823			3,260			58.6	%		12,606		23,466			10,860			86.1	%
Ecommerce revenue:
Vehicle revenue	$	174,510	$	213,943	$		39,433			22.6	%	$	381,709	$	610,008	$		228,299			59.8	%
Product revenue		3,603		7,818			4,215			117.0	%		7,212		20,493			13,281			184.2	%
Total ecommerce revenue	$	178,113	$	221,761	$		43,648			24.5	%	$	388,921	$	630,501	$		241,580			62.1	%
Ecommerce gross profit:
Vehicle gross profit	$	5,171	$	11,486	$		6,315			122.1	%	$	14,611	$	20,296	$		5,685			38.9	%
Product gross profit		3,603		7,818			4,215			117.0	%		7,212		20,493			13,281			184.2	%
Total ecommerce gross profit	$	8,774	$	19,304	$		10,530			120.0	%	$	21,823	$	40,789	$		18,966			86.9	%
Average vehicle selling price per ecommerce unit	$	31,370	$	24,248	$		(7,122	)		(22.7	)%	$	30,280	$	25,995	$		(4,285	)		(14.2	)%
Gross profit per ecommerce unit:
Vehicle gross profit per ecommerce unit	$	929	$	1,302	$		373			40.2	%	$	1,159	$	865	$		(294	)		(25.4	)%
Product gross profit per ecommerce unit		648		886			238			36.7	%		572		873			301			52.6	%
Total gross profit per ecommerce unit	$	1,577	$	2,188	$		611			38.7	%	$	1,731	$	1,738	$		7			0.4	%
Ecommerce average days to sale		71		52			(19	)		(26.8	)%		67		62			(5	)		(7.5	)%

Ecommerce Units

Ecommerce units sold increased 58.6% to 8,823 driven by increased consumer demand, higher inventory levels and increased marketing spend. Average monthly unique visitors to our platform increased 19.4% to 928,277.

Ecommerce Revenue

Ecommerce revenue increased 24.5% to $221.8 million.

Ecommerce Vehicle revenue increased 22.6% to $214.0 million. The increase in ecommerce Vehicle revenue was primarily attributable to the increase in ecommerce units sold, partially offset by a decrease in the average selling price per unit, which decreased from $31,370 to $24,248. The decrease in average selling price was driven by demand predicted by our data analytics.
Ecommerce Product revenue increased 117.0% to $7.8 million. The increase in ecommerce Product revenue was primarily attributable to the increase in ecommerce units sold, and further increased by an improvement in ecommerce Product revenue per unit, which increased from $648 to $886 per unit. The increase in ecommerce Product revenue per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Ecommerce Gross Profit

Ecommerce gross profit increased 120.0% to $19.3 million.

Ecommerce Vehicle gross profit increased 122.1% to $11.5 million. The increase in ecommerce Vehicle gross profit was due to a $373 increase in ecommerce Vehicle gross profit per unit, driven primarily by improvements in inbound logistics and reconditioning costs and the increase in ecommerce units sold.
Ecommerce Product gross profit increased 117.0% to $7.8 million. The increase in ecommerce Product gross profit was primarily attributable to the increase in ecommerce units sold, and further increased by an improvement in ecommerce Product gross profit per unit, which increased from $648 to $886 per unit. The increase in Product gross profit per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Ecommerce Gross Profit per Unit

Ecommerce gross profit per unit increased 38.7% to $2,188.

Ecommerce Vehicle gross profit per unit increased 40.2% to $1,302, driven primarily by improvements in inbound logistics and reconditioning costs.
Ecommerce Product gross profit per unit increased 36.7% to $886. The increase in Product gross profit per unit was driven by higher attachment rates, improved financing features in our ecommerce platform as well as our strategic partnerships.

Results by Segment

	Three Months Ended September 30,										Nine Months Ended September 30,
	2019		2020		Change			% Change			2019		2020		Change			% Change
	(in thousands)										(in thousands)
Units:
Ecommerce		5,563		8,823		3,260			58.6	%		12,606		23,466		10,860			86.1	%
TDA		3,282		1,463		(1,819	)		(55.4	)%		9,444		5,608		(3,836	)		(40.6	)%
Wholesale		5,420		6,166		746			13.8	%		16,046		14,110		(1,936	)		(12.1	)%
Total units		14,265		16,452		2,187			15.3	%		38,096		43,184		5,088			13.4	%

Revenue:
Ecommerce	$	178,113	$	221,761	$	43,648			24.5	%	$	388,921	$	630,501	$	241,580			62.1	%
TDA		103,106		37,272		(65,834	)		(63.9	)%		281,603		150,901		(130,702	)		(46.4	)%
Wholesale		59,054		63,972		4,918			8.3	%		165,705		170,469		4,764			2.9	%
Total revenue	$	340,273	$	323,005	$	(17,268	)		(5.1	)%	$	836,229	$	951,871	$	115,642			13.8	%
Gross profit:
Ecommerce	$	8,774	$	19,304	$	10,530			120.0	%	$	21,823	$	40,789	$	18,966			86.9	%
TDA		6,650		2,798		(3,852	)		(57.9	)%		18,830		9,144		(9,686	)		(51.4	)%
Wholesale		247		3,343		3,096			1,253.4	%		875		1,506		631			72.1	%
Total gross profit	$	15,671	$	25,445	$	9,774			62.4	%	$	41,528	$	51,439	$	9,911			23.9	%
Gross profit per unit:
Ecommerce	$	1,577	$	2,188	$	611			38.7	%	$	1,731	$	1,738	$	7			0.4	%
TDA	$	1,974	$	1,828	$	(146	)		(7.4	)%	$	1,931	$	1,569	$	(362	)		(18.8	)%
Wholesale	$	46	$	542	$	496			1,078.3	%	$	55	$	107	$	52			94.5	%
Total gross profit per unit	$	1,099	$	1,547	$	448			40.8	%	$	1,090	$	1,191	$	101			9.3	%

Total Units

Total units sold increased 15.3% to 16,452.

Ecommerce units sold increased 58.6% to 8,823, as discussed above.
TDA units sold decreased 55.4% to 1,463, primarily due to continued disruptions related to the COVID-19 pandemic in the Houston area.
Wholesale units sold increased 13.8% to 6,166, primarily due to an increase of wholesale grade units purchased from consumers.

Total Revenue

Total revenue decreased 5.1% to $323.0 million.

Ecommerce revenue increased 24.5% to $221.8 million, as discussed above.
TDA revenue decreased 63.9% to $37.3 million. TDA revenue decreased primarily due to the decrease in TDA units sold and a lower average selling price per unit, which decreased from $30,236 to $24,316.
Wholesale revenue increased 8.3% to $64.0 million. The increase in wholesale revenue was primarily attributable to the increase in wholesale units sold, partially offset by a decrease in wholesale average selling price per unit, which decreased from $10,896 to $10,375.

Total Gross Profit

Total gross profit increased 62.4% to $25.4 million.

Ecommerce gross profit increased 120.0% to $19.3 million, as discussed above.
TDA gross profit decreased 57.9% to $2.8 million. TDA gross profit decreased primarily due to lower TDA units sold and a decrease in TDA gross profit per unit of $146.
Wholesale gross profit increased to $3.3 million. Wholesale gross profit increased primarily due to an increase in wholesale gross profit per unit of $496.

Total Gross Profit per Unit

Total gross profit per unit increased 40.8% to $1,547.

Ecommerce gross profit per unit increased 38.7% to $2,188.
TDA gross profit per unit decreased 7.4% to $1,828.
Wholesale gross profit per unit increased to $542.

SG&A

		Three Months Ended September 30,											Nine Months Ended September 30,
		2019			2020		Change			% Change				2019			2020		Change			% Change
		(in thousands)											(in thousands)
Compensation & benefits	$		19,050	$		22,881	$	3,831			20.1	%	$		52,018	$		63,821	$	11,803			22.7	%
Marketing expense			14,606			15,341		735			5.0	%			34,442			44,829		10,387			30.2	%
Outbound logistics			4,255			8,500		4,245			99.8	%			9,199			19,762		10,563			114.8	%
Occupancy and related costs			2,770			2,610		(160	)		(5.8	)%			8,041			7,574		(467	)		(5.8	)%
Professional fees			3,497			1,773		(1,724	)		(49.3	)%			9,378			5,697		(3,681	)		(39.3	)%
Other			6,756			10,022		3,266			48.3	%			18,131			25,735		7,604			41.9	%
Total selling, general & administrative expenses	$		50,934	$		61,127	$	10,193			20.0	%	$		131,209	$		167,418	$	36,209			27.6	%

Selling, general and administrative expenses increased 20.0% to $61.1 million. The increase was primarily due to a $3.6 million increase in stock-based compensation included within compensation and benefits, a $4.2 million increase in outbound logistics costs partially attributable to the growth in ecommerce units sold, which increased outbound logistics costs by $2.5 million, and increases in market rates of logistics providers, which increased outbound logistics costs by $1.7 million, and a $3.3 million increase in other selling, general and administrative expenses primarily related to additional insurance costs associated with being a publicly traded company. These increases were offset by a $1.7 million decrease in professional fees.

We expect selling, general and administrative expenses to increase in the future as we scale our business and sell more ecommerce units. We will also continue to invest in and improve our customer experience and invest in expanding our proprietary logistics network including our last-mile delivery operations.

Loss from Operations and Net Loss

Loss from operations slightly increased 0.3% to $36.9 million. Net loss decreased 4.8% to $37.9 million.

Non-GAAP Measures

In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance: EBITDA, Adjusted EBITDA, Adjusted loss from operations, Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense and we calculate Adjusted EBITDA as EBITDA adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense and the one-time, IPO related non-cash revaluation of a preferred stock warrant. We calculate Adjusted loss from operations as operating loss adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense and we calculate Non-GAAP net loss as net loss adjusted to exclude the one-time, IPO related acceleration of non-cash stock-based compensation expense and the one-time, IPO related non-cash revaluation of a preferred stock warrant. The following table presents a reconciliation of the Non-GAAP measures to the most directly comparable financial measures prepared in accordance with GAAP, for each of the periods presented.

EBITDA and Adjusted EBITDA

EBITDA and Adjusted EBITDA are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA and Adjusted EBITDA facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
	(in thousands)						(in thousands)
Net loss	$	(39,764	)	$	(37,850	)	$	(100,243	)	$	(142,137	)
Adjusted to exclude the following:
Interest expense		3,797			2,259			9,903			6,382
Interest income		(1,190	)		(1,289	)		(4,454	)		(3,960	)
Provision for income taxes		48			33			122			138
Depreciation and amortization expense		1,537			1,196			4,683			3,255
EBITDA	$	(35,572	)	$	(35,651	)	$	(89,989	)	$	(136,322	)
One-time IPO related acceleration of non-cash stock-based compensation		—			—			—			1,262
One-time IPO related non-cash revaluation of preferred stock warrant		—			—			—			20,470
Adjusted EBITDA	$	(35,572	)	$	(35,651	)	$	(89,989	)	$	(114,590	)

Adjusted loss from operations

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
	(in thousands)						(in thousands)
Loss from operations	$	(36,780	)	$	(36,873	)	$	(94,232	)	$	(119,218	)
Add: One-time IPO related acceleration of non-cash stock based compensation		—			—			—			1,262
Adjusted loss from operations	$	(36,780	)	$	(36,873	)	$	(94,232	)	$	(117,956	)

Non-GAAP net loss, Non-GAAP net loss per share and Non-GAAP net loss per share, as adjusted

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
	(in thousands, except share and per share amounts)
Net loss	$	(39,764	)	$	(37,850	)	$	(100,243	)	$	(142,137	)
Accretion of redeemable convertible preferred stock		(65,686	)		—			(109,529	)		—
Net loss attributable to common stockholders	$	(105,450	)	$	(37,850	)	$	(209,772	)	$	(142,137	)
Add: One-time IPO related acceleration of non-cash stock based compensation		—			—			—			1,262
Add: One-time IPO related non-cash revaluation of preferred stock warrant		—			—			—			20,470
Non-GAAP net loss	$	(105,450	)	$	(37,850	)	$	(209,772	)	$	(120,405	)

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		8,615,682			121,123,472			8,591,554			53,731,475

Net loss per share, basic and diluted	$	(12.24	)	$	(0.31	)	$	(24.42	)	$	(2.65	)
Impact of one-time IPO related acceleration of non-cash stock based compensation		—			—			—			0.02
Impact of one-time IPO related non-cash revaluation of preferred stock warrant		—			—			—			0.38
Non-GAAP net loss per share, basic and diluted	$	(12.24	)	$	(0.31	)	$	(24.42	)	$	(2.25	)
Non-GAAP net loss per share, as adjusted, basic and diluted^(a)	$	(0.31	)	$	(0.29	)	$	(0.77	)	$	(0.93	)

(a) Non-GAAP net loss per share, as adjusted, has been computed to give effect to, as of the beginning of each period presented (i) the shares of common stock issued in connection with our IPO, (ii) the automatic conversion of all outstanding shares of redeemable convertible preferred stock into shares of common stock that occurred upon the consummation of our IPO and (iii) the shares of common stock issued in connection with our follow-on public offering. The computation of Non-GAAP net loss per share, as adjusted, is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
	(in thousands, except share and per share amounts)
Non-GAAP net loss	$	(105,450	)	$	(37,850	)	$	(209,772	)	$	(120,405	)
Add: Accretion of redeemable convertible preferred stock		65,686			—			109,529			—
Non-GAAP net loss, as adjusted	$	(39,764	)	$	(37,850	)	$	(100,243	)	$	(120,405	)

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		8,615,682			121,123,472			8,591,554			53,731,475
Add: unweighted adjustment for common stock issued in connection with IPO		24,437,500			—			24,437,500			24,437,500
Add: unweighted adjustment for conversion of redeemable convertible preferred stock in connection with IPO		85,533,394			—			85,533,394			85,533,394
Add: unweighted adjustment for common stock issued in connection with follow-on public offering		10,800,000			10,800,000			10,800,000			10,800,000
Less: Adjustment for the impact of the above items already included in weighted-average number of shares outstanding for the periods presented		—			(1,760,869	)		—			(44,897,573	)
Weighted-average number of shares outstanding used to compute net loss per share, as adjusted, basic and diluted		129,386,576			130,162,603			129,362,448			129,604,796

Non-GAAP net loss per share, as adjusted, basic and diluted	$	(0.31	)	$	(0.29	)	$	(0.77	)	$	(0.93	)

Financial Outlook

We expect another quarter of significant year-over-year growth in ecommerce unit sales and revenue for Q4 2020 and continued strength in total ecommerce gross profit per unit. Through the third quarter, our year-to-date ecommerce units sold has grown 86% over the prior year. Combined with our strong sequential growth quarter to quarter, we believe we are on track for continued growth into 2021. For Q4 2020, we expect the following results:

Ecommerce unit sales of 10,500 to 11,500, implying 25% sequential growth and Q4 year over year growth of 74% at the middle of the guidance range.
Average ecommerce selling price per unit of $24,500 to $25,500 and average ecommerce gross profit per unit of $2,050 to $2,150.
TDA unit sales of 1,400 to 1,600, average selling price per unit of $24,500 to $25,500 and average gross profit per unit of $1,650 to $1,750.
Wholesale unit sales of 6,000 to 7,000, average selling price per unit of $9,500 to $10,500 and average gross profit per unit of breakeven to $100.
Total revenue of $372 to $414 million.
Total gross profit of $24 to $28 million.
EBITDA of ($52) to ($44) million.
Stock-based compensation expense of $4.3 million.
Net loss per share of ($0.41) to ($0.35).

Prior to our IPO, our shares outstanding primarily consisted of shares of redeemable convertible preferred stock, which automatically converted to shares of common stock upon the consummation of our IPO. In addition, all warrants outstanding were exercised upon the IPO or shortly thereafter, and certain stock-based compensation shares were issued or vested upon the IPO. We expect the following number of GAAP weighted average shares outstanding for the remainder of 2020:

		Quarter		YTD
Q4 2020		130,300,000		72,900,000

These estimates exclude any shares potentially issuable under stock-based compensation plans.

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of November 11, 2020 and are subject to substantial uncertainty. See “Forward-Looking Statements” below.

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, November 11, 2020 at 5:00 p.m. ET.

The conference call can be accessed via telephone by dialing 1-833-519-1297 (or 914-800-3868 for international access) and entering the conference ID 7077759. A live audio webcast will also be available at ir.vroom.com. An archived webcast of the conference call will be accessible on the website within 48 hours of its completion.

About Vroom (NASDAQ: VRM)

Vroom is an innovative, end-to-end ecommerce platform that offers a better way to buy and a better way to sell used vehicles. The Company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers an extensive selection of vehicles, transparent pricing, competitive financing, and contact-free, at-home pick-up and delivery. For more information visit www.vroom.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations for future results of operations. These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading “Risk Factors” in our Quarterly report on Form 10-Q for the quarter ended September 30, 2020 which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.


VROOM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)

	As of			As of
	December 31,			September 30,
	2019			2020
ASSETS
Current Assets:
Cash and cash equivalents	$	217,734		$	1,161,362
Restricted cash		1,853			27,961
Accounts receivable, net of allowance of $789 and $1,809, respectively		30,848			33,799
Inventory		205,746			299,411
Prepaid expenses and other current assets		9,149			16,257
Total current assets		465,330			1,538,790
Property and equipment, net		7,828			10,051
Intangible assets, net		572			160
Goodwill		78,172			78,172
Operating lease right-of-use assets		—			14,337
Other assets		11,485			13,433
Total assets	$	563,387		$	1,654,943
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current Liabilities:
Accounts payable	$	18,987		$	29,630
Accrued expenses		38,491			47,641
Vehicle floorplan		173,461			248,967
Deferred revenue		17,323			17,299
Operating lease liabilities, current		—			4,621
Other current liabilities		11,572			16,375
Total current liabilities		259,834			364,533
Operating lease liabilities, excluding current portion		—			10,674
Other long-term liabilities		3,073			1,886
Total liabilities		262,907			377,093
Commitments and contingencies (Note 8)
Redeemable convertible preferred stock, $0.001 par value; 86,123,364 and 10,000,000 shares authorized as of December 31, 2019 and September 30, 2020, respectively; 83,568,628 and zero shares issued and outstanding as of December 31, 2019 and September 30, 2020, respectively		874,332			—
Stockholders’ (deficit) equity:
Common stock, $0.001 par value; 113,443,854 and 500,000,000 shares authorized as of December 31, 2019 and September 30, 2020, respectively; 8,650,922 and 130,230,591 shares issued and outstanding as of December 31, 2019 and September 30, 2020, respectively		8			130
Additional paid-in-capital		—			1,994,929
Accumulated deficit		(573,860	)		(717,209	)
Total stockholders’ (deficit) equity		(573,852	)		1,277,850
Total liabilities, redeemable convertible preferred stock and stockholders’ (deficit) equity	$	563,387		$	1,654,943


VROOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2020			2019			2020
Revenue:
Retail vehicle, net	$	273,743		$	249,518		$	652,895		$	754,380
Wholesale vehicle		59,054			63,972			165,705			170,469
Product, net		7,029			9,198			16,265			25,979
Other		447			317			1,364			1,043
Total revenue		340,273			323,005			836,229			951,871
Cost of sales		324,602			297,560			794,701			900,432
Total gross profit		15,671			25,445			41,528			51,439
Selling, general and administrative expenses		50,934			61,127			131,209			167,418
Depreciation and amortization		1,517			1,191			4,551			3,239
Loss from operations		(36,780	)		(36,873	)		(94,232	)		(119,218	)
Interest expense		3,797			2,259			9,903			6,382
Interest income		(1,190	)		(1,289	)		(4,454	)		(3,960	)
Revaluation of preferred stock warrant		373			—			515			20,470
Other income, net		(44	)		(26	)		(75	)		(111	)
Loss before provision for income taxes		(39,716	)		(37,817	)		(100,121	)		(141,999	)
Provision for income taxes		48			33			122			138
Net loss	$	(39,764	)	$	(37,850	)	$	(100,243	)	$	(142,137	)
Accretion of redeemable convertible preferred stock		(65,686	)		—			(109,529	)		—
Net loss attributable to common stockholders	$	(105,450	)	$	(37,850	)	$	(209,772	)	$	(142,137	)
Net loss per share attributable to common stockholders, basic and diluted	$	(12.24	)	$	(0.31	)	$	(24.42	)	$	(2.65	)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted		8,615,682			121,123,472			8,591,554			53,731,475

VROOM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	Nine Months Ended September 30,
	2019			2020
Operating activities
Net loss	$	(100,243	)	$	(142,137	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		4,683			3,255
Amortization of debt issuance costs		269			656
Stock-based compensation expense		2,155			8,930
Loss on disposal of property and equipment		824			46
Provision for inventory obsolescence		3,872			2,917
Revaluation of preferred stock warrant		515			20,470
Other		226			1,285
Changes in operating assets and liabilities:
Accounts receivable		(15,029	)		(4,297	)
Inventory		(97,524	)		(96,582	)
Prepaid expenses and other current assets		(3,168	)		(6,639	)
Other assets		(2,389	)		(2,246	)
Accounts payable		8,769			10,478
Accrued expenses		9,995			15,679
Deferred revenue		2,530			(24	)
Other liabilities		4,487			5,335
Net cash used in operating activities		(180,028	)		(182,874	)
Investing activities
Purchase of property and equipment		(2,024	)		(5,057	)
Net cash used in investing activities		(2,024	)		(5,057	)
Financing activities
Repayments of long-term debt		(5,835	)		—
Proceeds from vehicle floorplan		705,281			842,865
Repayments of vehicle floorplan		(611,838	)		(767,359	)
Payment of vehicle floorplan upfront commitment fees		—			(1,125	)
Proceeds from the issuance of redeemable convertible preferred stock, net		—			21,694
Repurchase of common stock		(542	)		(1,818	)
Common stock shares withheld to satisfy employee tax withholding obligations		—			(2,915	)
Proceeds from the issuance of common stock in connection with IPO, net of underwriting discount		—			504,023
Payments of costs related to IPO		—			(6,791	)
Proceeds from the issuance of common stock in connection with follow-on public offering, net of underwriting discount		—			569,471
Payments of costs related to follow-on public offering		—			(196	)
Proceeds from exercise of stock options		365			133
Other financing activities		221			(315	)
Net cash provided by financing activities		87,652			1,157,667
Net (decrease) increase in cash, cash equivalents and restricted cash		(94,400	)		969,736
Cash, cash equivalents and restricted cash at the beginning of period		163,509			219,587
Cash, cash equivalents and restricted cash at the end of period	$	69,109		$	1,189,323
Supplemental disclosure of cash flow information:
Cash paid for interest	$	8,713		$	5,340
Cash paid for income taxes	$	209		$	163
Supplemental disclosure of non-cash investing and financing activities:
Accretion of redeemable convertible preferred stock	$	109,529		$	—
Costs related to IPO included in accrued expenses and accounts payable	$	113		$	—
Costs related to follow-on public offering included in accrued expenses and accounts payable	$	—		$	1,323
Conversion of redeemable convertible preferred stock warrant to common stock warrant	$	—		$	21,873
Issuance of common stock as upfront payment to nonemployee	$	—		$	2,127
Accrued property and equipment expenditures	$	342		$	55

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005858/en/

Investor Relations:

Vroom

Allen Miller

[email protected]

Media Contact:

Moxie Communications Group

Alyssa Galella

[email protected]

(562) 294-6261

KEYWORDS: New York United States North America

INDUSTRY KEYWORDS: General Automotive Retail Online Retail Automotive

MEDIA:

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November 11, 2020 4:08 pm

Fossil Group, Inc. Reports Third Quarter 2020 Financial Results

RICHARDSON, Texas, Nov. 11, 2020 (GLOBE NEWSWIRE) — Fossil Group, Inc. (NASDAQ: FOSL) today announced financial results for the third quarter ended October 3, 2020.

Third Quarter Summary

Worldwide net sales of $435 million decreased 19% on a reported basis and 20% in constant currency. Topline performance was better than expected, due to continued strength in both owned and third party e-commerce, strong growth in Mainland China and modest improvement within the wholesale channel globally.
On a constant currency basis, sales from the Company’s owned e-commerce websites increased 66% and third party marketplace e-commerce sales increased 44% compared to prior year.
Gross margin of 52.8%, representing 120 basis points of expansion compared to the third quarter of 2019.
The Company reduced operating expenses by $75 million, or 26%, on a year-over-year basis, reflecting continued progress under its New World Fossil 2.0 – Transform to Grow program (“NWF 2.0”).
Operating income of $18 million compared to an operating loss of $9 million a year ago, primarily reflecting gross margin and cost reduction benefits.
Cash and cash equivalents of $324 million, and total debt of $239 million as of October 3, 2020.

“The organization continues to execute well in the face of a challenging environment,” stated Kosta Kartsotis, Chairman and CEO. “We outperformed our topline expectations in the third quarter, reflecting ongoing momentum in our digital channels and strong growth in mainland China, as well as trend improvement in the wholesale channel globally.”

“In addition, we are making good progress on our strategic priorities, with accelerated initiatives around our digital expansion programs and structural cost reduction efforts. Given the uncertain environment, we are remaining agile and continuing to closely manage liquidity, expenses and inventory as we position the business for future growth.”

Third Quarter 2020 Operating Results

Worldwide net sales totaled $435.5 million, a decrease of 19% on a reported basis and 20% in constant currency compared to $539.5 million in the third quarter of fiscal 2019. The year-over-year decline was primarily due to COVID-19 related traffic declines in both Fossil stores and wholesale doors. Partly offsetting brick-and-mortar sales declines was growth in digital channels, with owned e-commerce websites increasing 66% and dedicated third party marketplaces growing 44%, both on a constant currency basis. The following table provides a summary of net sales performance, on both an as reported and constant currency basis, for the third quarter of 2020 compared to the 2019 third quarter (in millions, except percentage data).


	Third Quarter
	2020		2019		Growth (Decline)
	Amounts as Reported		Amounts as Reported		Dollars as Reported (1)			Constant Currency Dollars (2)			Percentage as Reported (1)			Percentage Constant Currency (2)
Americas	$	175	$	220	$	(45	)	$	(43	)	(20	)	%	(20	)	%
Europe	135		174		(39		)	(44		)	(22	)		(25	)
Asia	120		143		(23		)	(24		)	(16	)		(17	)
Corporate	5		2		3			3			135			117
Total net sales	$	435	$	539	$	(104	)	$	(108	)	(19	)	%	(20	)	%

Watches	$	357	$	445	$	(88	)	$	(92	)	(20	)	%	(21	)	%
Leathers	38		54		(16		)	(17		)	(31	)		(31	)
Jewelry	29		28		1			—			2			(1	)
Other	11		12		(1		)	1			9			8
Total net sales	$	435	$	539	$	(104	)	$	(108	)	(19	)	%	(20	)	%

(1)	Reported GAAP amounts include impacts from currency.
(2)	Eliminates the effect of currency changes in fiscal 2020 to give investors a better understanding of the underlying trends within the business. See constant currency financial information at the end of this release for more information.

Gross profit totaled $229.8 million compared to $278.5 million in the third quarter of 2019. Gross margin increased 120 basis points to 52.8% versus 51.6% a year ago, primarily reflecting a higher mix of e-commerce sales, favorable region and product mix and favorable pricing on sell-through of older generation connected products, partially offset by heightened promotional activity and an unfavorable currency impact of approximately 120 basis points.

Operating expenses totaled $212.3 million compared to $287.7 million a year ago. Operating expenses in the third quarter of 2020 included $5.7 million of restructuring costs, primarily related to employee costs, professional services and store closures, while operating expenses in the third quarter of 2019 included $7.0 million of restructuring costs. Third quarter selling, general and administrative expenses decreased on a year-over-year basis, reflecting lower compensation, marketing and discretionary costs.

Third quarter operating income was $17.5 million compared to operating loss of $9.2 million in the third quarter of 2019. Net income totaled $16.0 million, or $0.31 per diluted share, compared to net loss of $25.9 million, or ($0.51) per diluted share, in the third quarter of 2019. Per share data included restructuring charges of $0.09 per diluted share in the third quarter of 2020 while per share data in the third quarter of 2019 included non-cash intangible asset impairment charges of $0.25 per diluted share and restructuring expenses of $0.11 per diluted share. During the third quarter of fiscal 2020, currencies, including both the translation impact on operating earnings and the impact of foreign currency hedging contracts, unfavorably affected income per diluted share by approximately $0.09.

New World Fossil 2.0 – Transform to Grow Initiative

During 2019, the Company initiated NWF 2.0, which was designed to deliver gross margin benefits and operating expense reductions totaling $200 million over the three-year period from 2019 to 2021. As a result of the unprecedented impact of COVID-19, earlier this year the Company significantly expanded its NWF 2.0 initiative to $250 million to include additional organizational efficiencies and accelerate its digital initiatives. The Company expects to generate $100 million in expense savings in 2020.

Balance Sheet Summary

As of October 3, 2020, the Company had cash and cash equivalents of $324 million and total debt of $239 million, including $162 million of borrowings under its Term Credit Agreement. Inventories at the end of third quarter 2020 totaled $360 million, a decrease of 37% versus a year ago, reflecting accelerated inventory reduction actions, primarily in older generation connected product, and proactive management of inbound receipts to align with reduced consumer demand.

COVID-19 Update

The Company is continuing to closely manage liquidity, expenses and inventory to navigate COVID-19 impacts and related macro uncertainty. During the third quarter, the Company:

Reduced operating expenses across payroll, marketing, professional fees, travel and contract labor versus prior year;
Closely managed working capital by reducing inventory receipts; and
Reduced outstanding debt and revolving credit levels by $30 million.

As of October 3, 2020, the Company had total liquidity of $356 million, comprised of $324 million of cash and cash equivalents and $32 million of availability under its revolving credit facility. The Company expects to end the fourth quarter of 2020 with approximately $300 million to $325 million of cash and cash equivalents and approximately $30 million of availability under its revolving credit facility.

Outlook

The Company anticipates that impacts from COVID-19 will continue to pressure sales in the fourth quarter of 2020, with ongoing strength in e-commerce channels offset by contraction in Fossil retail stores and the wholesale channel. Worldwide net sales are expected to decline in the range of 40% to 30%.

Safe Harbor

Certain statements contained herein that are not historical facts, including multi-year New World Fossil expense reduction estimates, , future financial estimates as well as estimated impacts from COVID-19, , constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: the effect of worldwide economic conditions; the impact of COVID-19; the length and severity of COVID-19; the duration of trends resulting from the impact of COVID-19, including strength in e-commerce channels; the pace of recovery following COVID-19; the impact of the Coronavirus Aid, Relief, and Economic Security Act; significant changes in consumer spending patterns or preferences; interruptions or delays in the supply of key components; acts of war or acts of terrorism; changes in foreign currency valuations in relation to the U.S. dollar; lower levels of consumer spending resulting from a general economic downturn or generally reduced shopping activity caused by public safety or consumer confidence concerns; the performance of our products within the prevailing retail environment; risks related to excess inventory, including older generation connected products; customer acceptance of both new designs and newly-introduced product lines, including risks related to new generation connected products; financial difficulties encountered by customers; the effects of vigorous competition in the markets in which we operate; compliance with debt covenants and other contractual provisions; risks related to the success of our restructuring programs; the termination or non-renewal of material licenses, risks related to foreign operations and manufacturing; changes in the costs of materials, labor and advertising; government regulation and tariffs; our ability to secure and protect trademarks and other intellectual property rights; and the outcome of current and possible future litigation, as well as the risks and uncertainties set forth in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Readers of this release should consider these factors in evaluating, and are cautioned not to place undue reliance on, the forward-looking statements contained herein. The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

About Fossil Group, Inc.

Fossil Group, Inc. is a global design, marketing, distribution and innovation company specializing in lifestyle accessories. Under a diverse portfolio of owned and licensed brands, our offerings include fashion watches, jewelry, handbags, small leather goods and connected products. We are committed to delivering the best in design and innovation across our owned brands, Fossil, Michele, Misfit, Relic, Skagen and Zodiac, and licensed brands, Armani Exchange, BMW, Diesel, DKNY, Emporio Armani, kate spade new york, Michael Kors, PUMA and Tory Burch. We bring each brand story to life through an extensive distribution network across numerous geographies, categories and channels. Certain press release and SEC filing information concerning the Company is also available at www.fossilgroup.com.


Investor Relations:	Christine Greany
	The Blueshirt Group
	(858) 523-1732
	[email protected]

Consolidated Income Statement Data	For the 13 Weeks Ended				For the 13 Weeks Ended
($ in millions, except per share data):	October 3, 2020				September 28, 2019
Net sales	$	435.5			$	539.5
Cost of sales	205.7				261.0
Gross profit	229.8				278.5
Gross margin	52.8			%	51.6			%
Operating expenses:
Selling, general and administrative expenses	206.6				264.1
Trade name impairment	—				16.6
Restructuring charges	5.7				7.0
Total operating expenses	$	212.3			$	287.7
Total operating expenses (% of net sales)	48.7			%	53.3			%
Operating income (loss)	17.5				(9.2		)
Operating margin	4.0			%	(1.7		)	%
Interest expense	8.0				7.4
Other income (expense) – net	—				(1.4		)
Income (loss) before income taxes	9.5				(18.0		)
Provision for income taxes	(6.8		)		6.9
Less: Net income attributable to noncontrolling interest	0.3				1.0
Net income attributable to Fossil Group, Inc.	$	16.0			$	(25.9	)
Earnings per share:
Basic	$	0.31			$	(0.51	)
Diluted	$	0.31			$	(0.51	)
Weighted average common shares outstanding:
Basic	51.3				50.5
Diluted	51.8				50.5

Consolidated Balance Sheet Data ($ in millions):	October 3, 2020		September 28, 2019
Assets:
Cash and cash equivalents	$	323.6	$	147.5
Accounts receivable – net	189.8		247.6
Inventories	359.5		570.2
Other current assets	134.9		126.4
Total current assets	$	1,007.8	$	1,091.7
Property, plant and equipment – net	$	118.5	$	155.0
Operating lease right-of-use assets	244.5		292.1
Intangible and other assets – net	151.5		101.8
Total long-term assets	$	514.5	$	548.9
Total assets	$	1,522.3	$	1,640.6

Liabilities and stockholders’ equity:
Accounts payable, accrued expenses and other current liabilities	$	528.5	$	507.3
Short-term debt	21.4		21.8
Total current liabilities	$	549.9	$	529.1
Long-term debt	$	217.9	$	242.1
Long-term operating lease liabilities	260.7		288.6
Other long-term liabilities	70.2		70.9
Total long-term liabilities	$	548.8	$	601.6
Stockholders’ equity	423.6		$	509.9
Total liabilities and stockholders’ equity	$	1,522.3	$	1,640.6

Constant Currency Financial Information

The following table presents the Company’s business segment and product net sales on a constant currency basis which are non-GAAP financial measures. To calculate net sales on a constant currency basis, net sales for the current fiscal year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average rates during the comparable period of the prior fiscal year. The Company presents constant currency information to provide investors with a basis to evaluate how its underlying business performed excluding the effects of foreign currency exchange rate fluctuations. The constant currency financial information presented herein should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

	Net Sales
	For the 13 Weeks Ended
	October 3, 2020							September 28, 2019
($ in millions)	As Reported		Impact of Foreign Currency Exchange Rates			Constant Currency		As Reported
Segment:
Americas	$	175.1	$	1.3		$	176.4	$	220.0
Europe	135.3		(5.4		)	129.9		173.9
Asia	119.7		(0.2		)	119.5		143.3
Corporate	5.4		(0.1		)	5.3		2.3
Total net sales	$	435.5	$	(4.4	)	$	431.1	$	539.5

Product Categories:
Watches	$	356.6	$	(3.1	)	$	353.5	$	445.5
Leathers	37.7		(0.3		)	37.4		54.5
Jewelry	28.9		(0.9		)	28.0		28.2
Other	12.3		(0.1		)	12.2		11.3
Total net sales	$	435.5	$	(4.4	)	$	431.1	$	539.5

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as our net income (loss) before the impact of income tax expense (benefit), plus interest expense, amortization and depreciation, impairment expense, other non-cash charges, stock-based compensation expense, and restructuring expense minus interest income. We have included Adjusted EBITDA herein because it is widely used by investors for valuation and for comparing our financial performance with the performance of our competitors. We also use Adjusted EBITDA to monitor and compare the financial performance of our operations. Our presentation of Adjusted EBITDA may not be comparable to similarly titled measures other companies report. Adjusted EBITDA is not intended to be used as an alternative to any measure of our performance in accordance with GAAP. The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure, which is income (loss) before income taxes. Certain line items presented in the tables below, when aggregated, may not foot due to rounding.

	Fiscal 2019⁽¹⁾			Fiscal 2020
($ in millions):	Q4			Q1			Q2			Q3			Total
Income (loss) before income taxes	$	(6.0	)	$	(149.1	)	$	(43.8	)	$	9.5		$	(189.4	)
Plus:
Interest expense	7.0			7.5			7.9			8.0			30.4
Amortization and depreciation	12.9			12.2			10.7			10.3			46.1
Impairment expense	4.7			19.6			3.4			4.6			32.3
Other non-cash charges	43.2			21.7			3.6			2.9			71.4
Stock-based compensation	1.9			3.1			2.9			3.2			11.1
Restructuring expense	5.2			9.4			10.5			5.7			30.8
Less:
Interest Income	0.1			—			(0.1		)	(0.1		)	(0.1		)
Adjusted EBITDA	$	68.8		$	(75.6	)	$	(4.7	)	$	44.3		$	32.8

(1)	Prior period amounts have been adjusted to conform to the current period presentation.

Store Count Information

	October 3, 2020				September 28, 2019
	Americas	Europe	Asia	Total	Americas	Europe	Asia	Total
Full price accessory	77	74	54	205	87	86	53	226
Outlets	112	76	32	220	115	72	35	222
Full priced multi-brand	—	3	3	6	—	4	2	6
Total stores	189	153	89	431	202	162	90	454

November 11, 2020 4:08 pm

Synacor Reports Third Quarter 2020 Financial Results

Synacor Reports Third Quarter 2020 Financial Results

–Company delivers 17% growth in Zimbra Enterprise SaaS and Cloud ID SaaS revenue

–Reinstates Financial Guidance for Fourth Quarter 2020

BUFFALO, N.Y.–(BUSINESS WIRE)–
Synacor, Inc. (Nasdaq: SYNC), a leading provider of cloud-based Collaboration and Identity Management software and services serving global enterprises, video, internet and communications providers, and governments, today announced its financial results for the third quarter ended September 30, 2020.

Third Quarter Financial Highlights

Third quarter revenue of $18.5 million
GAAP net loss of $4.0 million, inclusive of $1.8 million of restructuring and impairment charges
Adjusted EBITDA of $1.0 million with near break-even operating cash flow
Portal & Advertising Segment Adjusted EBITDA margin of 7% with sequential revenue growth of 16%, showing solid recovery post the onset of COVID-19
$8.1 million of recurring software revenue, that included 17% year-over-year growth in our focus areas of Zimbra Enterprise SaaS and Cloud ID SaaS
Company reinstates financial guidance for the fourth quarter 2020, including expectations for continued double-digit Enterprise SaaS growth, double-digit Adjusted EBITDA margins and positive free cash flow

“Our third quarter results provide real evidence of Synacor’s transformation into a world-class Enterprise SaaS company that is also committed to expanded margins and positive cash flow,” said Himesh Bhise, Synacor’s Chief Executive Officer. “Zimbra Enterprise SaaS plus Cloud ID SaaS delivered 17% year-over-year growth, our second consecutive quarter of double digit Enterprise SaaS revenue growth that we expect will continue into 2021. We have also improved profitability: year-to-date Software Segment adjusted EBITDA margin expanded to 32% from 27% a year ago, and our Portal & Advertising Segment adjusted EBITDA margin was 7% in Q3 and break-even year-to-date, despite the impact of COVID-19.”

Bhise added, “We enter Q4 and 2021 with noteworthy Cloud ID customer launches, a compelling new Zimbra Cloud collaboration platform, a pronounced market recovery underway in Advertising, a robust sales pipeline, and a cost structure that will yield positive free cash-flow.”

Recent Operating Highlights

Over 200 new and expansion customers for Zimbra email and collaboration platform delivered through worldwide channel partners
Debuted Zimbra Cloud in North America – an integrated collaboration suite for small business with email, videoconferencing, chat, and cloud storage – for $2.95 per month with a 30-day free trial
Signed four expansion deals for Cloud ID with content streaming and service provider customers; and pipeline remains robust
Achieved significant launch milestones with current Cloud ID customers that will grow active users, including smart-speaker enablement for a large digital services provider, doubling of traffic with a Canadian OTT provider, and going live with content network Epix
Active advertising publishers were 104 at the end of the third quarter, reflecting proactive reduction of less profitable publishers to enhance segment profitability
Renewed six Zimbra contracts, three Cloud ID contracts, and two portal contracts with service providers in North America
Unallocated corporate G&A declined 29% compared to the year ago quarter as a result of previously announced $10 million of cost reductions

Financial Results

Revenue

For the third quarter of 2020, revenue was $18.5 million, compared to reported revenue of $31.4 million, or $23.7 million when excluding the ATT.net portal business, in the third quarter of 2019. The decline was primarily driven by the COVID-19 impact on our business.

Revenue in our Software & Services segment totaled $10.1 million, compared with $11.1 million in the third quarter of 2019, as double-digit growth in Enterprise SaaS was offset by COVID-19 related declines in consumer email, maintenance, and enterprise licenses.

Revenue in our Portal & Advertising segment totaled $8.4 million, compared with reported revenue of $20.3 million, or $12.6 million net of the ATT.net portal business, in the third quarter of 2019. Revenue increased 16% sequentially compared to the second quarter of 2020, and continues to improve into the fourth quarter, despite the impact from COVID-19.

Net Loss

Net loss for the third quarter of 2020 was $4.0 million, or $0.10 per share, compared with a net loss of $3.7 million, or $0.10 per share, in the prior year. Adjusted net loss was $2.3 million, or $0.05 per share in the current quarter, compared with an adjusted net loss of $1.0 million, or $0.03 per share, in the third quarter of 2019. Adjusted net loss excludes asset impairments, restructuring charges and certain legal and professional fees.

Adjusted EBITDA

Adjusted EBITDA for the third quarter of 2020 was $1.0 million, or 5.3% of revenue, compared with $2.7 million, or 8.7% of revenue, in the third quarter of 2019. Adjusted EBITDA excludes stock-based compensation, other income and expense, asset impairments, restructuring costs, and certain legal and professional fees.

Cash

Cash and cash equivalents at the end of the third quarter was $4.3 million, compared with $6.0 million at the end of the second quarter. The Company continues to have no borrowings on its $12 million credit facility, and expects to be cash flow positive beginning with the fourth quarter of 2020 on a go-forward basis.

Guidance

The Company previously suspended its practice of providing financial guidance on May 6, 2020 given the uncertainties regarding the COVID-19 pandemic. Due to improved visibility, the Company has decided to reinstate financial guidance.

Based on information available as of November 11, 2020, the Company is providing guidance as follows for the fourth quarter 2020:

Revenue of $20.0 million to $22.0 million
GAAP net loss of $0.5 million to $1.1 million
Adjusted EBITDA of $2.5 million to $3.1 million

Conference Call Details

Synacor will host a conference call today at 5 p.m. ET to discuss its third quarter 2020 financial results. The live webcast of the Company’s earnings conference call can be accessed at https://www.synacor.com/investor-relations/events-and-presentations. To participate, please dial 1-833-235-2655 (toll free) or 1-647-689-4151 (international) and reference conference ID 4592597.

Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company’s website for at least 90 days. A telephonic replay of the conference call will also be available from 8 p.m. ET on November 11, 2020 until 11:59 p.m. ET on November 18, 2020 by dialing 1-800-585-8367 or 1-416-621-4642 and using the pin number 4592597.

About Synacor

Synacor (Nasdaq: SYNC) is a cloud-based software and services company serving global video, internet and communications providers, device manufacturers, governments and enterprises. Synacor’s mission is to enable its customers to better engage with their consumers. Its customers use Synacor’s technology platforms and services to scale their businesses and extend their subscriber relationships. Synacor delivers managed portals, advertising solutions, email and collaboration platforms, and cloud-based identity management. www.synacor.com

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (GAAP).

We report adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

For a reconciliation of adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the table “Reconciliation of GAAP to Non-GAAP Measures” in this press release.

We report adjusted net loss and adjusted diluted earnings per share because we believe these measures provide investors with additional information to assess our financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures. For a reconciliation of our GAAP Condensed Consolidated Statements of Operations to our adjusted non-GAAP measures, please refer to the table “Reconciliation of Adjusted Financial Measures” in this press release.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements concerning Synacor’s expected financial performance including, without limitation, it’s fourth quarter and full year 2020 guidance, the statements and quotations from management, statements regarding the impact of the Company’s cost reduction plan on its future financial results, statements regarding future revenue improvement in the Portal & Advertising segment and the ability to achieve positive cash flow in future periods, and Synacor’s strategic and operational plans. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements the Company makes.

The risks and uncertainties referred to above include – but are not limited to – risks associated with: the impact of the COVID-19 pandemic on our business, execution of our plans and strategies; our ability to obtain new customers; our ability to integrate the assets and personnel from acquisitions; expectations regarding consumer taste and user adoption of applications and solutions; developments in internet browser software and search advertising technologies; general economic conditions; expectations regarding the Company’s ability to timely expand the breadth of services and products or introduction of new services and products; consolidation within the cable and telecommunications industries; changes in the competitive dynamics in the market for online search and digital advertising; the risk that security measures could be breached and unauthorized access to subscriber data could be obtained; potential third party intellectual property infringement claims or other legal claims against Synacor; and the price volatility of our common stock.

Further information on these and other factors that could affect the Company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the Company’s most recent Form 10-K filed with the SEC. These documents are available on the SEC Filings section of the Investor Information section of the Company’s website at http://investor.synacor.com/. All information provided in this release and in the attachments is available as of November 11, 2020, and except as required by applicable law, Synacor undertakes no duty to update this information.

Synacor, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

	September 30, 2020			December 31, 2019

Assets
Current assets:
Cash and cash equivalents	$	4,280		$	10,966
Accounts receivable, net	12,809			20,532
Prepaid expenses and other current assets	3,287			2,989
Total current assets	20,376			34,487
Property and equipment, net	12,192			14,948
Operating lease right-of-use assets	3,458			4,765
Goodwill	15,943			15,948
Intangible assets	6,820			8,411
Other assets	876			1,319
Total Assets	$	59,665		$	79,878

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	8,597		$	12,583
Accrued expenses and other current liabilities	3,725			5,878
Current portion of deferred revenue	5,750			6,509
Current portion of long-term debt and finance leases	1,018			2,529
Current portion of operating lease liabilities	2,434			2,165
Total current liabilities	21,524			29,664
Long-term portion debt and finance leases	1,309			729
Deferred revenue	1,696			2,366
Long-term portion of operating lease liabilities	1,629			2,846
Deferred income taxes	334			275
Other long-term liabilities	248			334
Total Liabilities	26,740			36,214
Stockholders’ Equity:
Common stock	405			401
Treasury stock	(2,004		)	(1,931		)
Additional paid-in capital	147,572			146,460
Accumulated deficit	(112,416		)	(100,747		)
Accumulated other comprehensive loss	(632		)	(519		)
Total stockholders’ equity	32,925			43,664
Total Liabilities and Stockholders’ Equity	$	59,665		$	79,878

Synacor, Inc.
Condensed Consolidated Statement of Operations
(In thousands except for share and per share data)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Revenue	$	18,529		$	31,366		$	57,288		$	95,039
Costs and operating expenses:
Cost of revenue (1)	10,403			15,634			30,168			49,292
Technology and development (1)(2)	3,085			5,545			9,136			14,668
Sales and marketing (2)	3,410			5,473			11,581			17,014
General and administrative (1)(2)	3,238			5,648			10,978			14,068
Depreciation and amortization	1,991			2,605			6,430			7,607
Total costs and operating expenses	22,127			34,905			68,293			102,649
Loss from operations	(3,598		)	(3,539		)	(11,005		)	(7,610		)
Other (expense) income, net	(124		)	101			218			110
Interest expense	(37		)	(80		)	(146		)	(199		)
Loss before income taxes	(3,759		)	(3,518		)	(10,933		)	(7,699		)
Provision for income taxes	203			207			736			757
Net loss	$	(3,962	)	$	(3,725	)	$	(11,669	)	$	(8,456	)
Net loss per share:
Basic	$	(0.10	)	$	(0.10	)	$	(0.30	)	$	(0.22	)
Diluted	$	(0.10	)	$	(0.10	)	$	(0.30	)	$	(0.22	)
Weighted average shares used to compute net loss per share:
Basic	39,503,951			39,073,998			39,405,791			39,047,561
Diluted	39,503,951			39,073,998			39,405,791			39,047,561

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Technology and development	$	50	$	103	$	163	$	298
Sales and marketing	97		149		301		375
General and administrative	186		277		629		511
	$	333	$	529	$	1,093	$	1,184

Synacor, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands)
(Unaudited)

The following table presents a reconciliation of net loss to adjusted EBITDA for each of the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Reconciliation of Adjusted EBITDA:
Net loss	$	(3,962	)	$	(3,725	)	$	(11,669	)	$	(8,456	)
Provision for income taxes	203			207			736			757
Interest expense	37			80			146			199
Other expense (income), net	124			(101		)	(218		)	(110		)
Depreciation and amortization	2,562			3,036			8,059			8,509
Asset impairment**	687			1,525			687			1,751
Stock-based compensation expense	333			529			1,093			1,184
Restructuring costs	1,099			819			1,219			819
Certain legal and professional services fees*	(94		)	370			1,704			1,406
Adjusted EBITDA	$	989		$	2,740		$	1,757		$	6,059

*	“Certain legal and professional services fees” includes legal fees and other related expenses outside the ordinary course of business, as well as fees and expenses related to merger and acquisition activities.
**	“Asset Impairment” includes impairment charges related to property, plant and equipment, capitalized software and leased assets.

Synacor, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Nine Months Ended September 30,
	2020			2019

Cash Flows from Operating Activities:
Net loss	$	(11,669	)	$	(8,456	)
Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities:
Depreciation and amortization	8,081			8,513
Asset impairment	687			1,751
Stock-based compensation expense	1,093			1,184
Provision for deferred income taxes	59			59
Change in allowance for doubtful accounts	(20		)	77
Changes in operating assets and liabilities:
Accounts receivable, net	7,743			5,369
Prepaid expenses and other assets	122			59
Operating lease right-of-use assets and liabilities, net	(109		)	36
Accounts payable, accrued expenses and other liabilities	(5,561		)	(3,132		)
Deferred revenue	(1,429		)	(251		)
Net cash (used in) provided by operating activities	(1,003		)	5,209
Cash Flows from Investing Activities:
Purchases of property and equipment	(2,640		)	(3,159		)
Net cash used in investing activities	(2,640		)	(3,159		)
Cash Flows from Financing Activities:
Repayments on long-term debt and finance leases	(2,863		)	(2,531		)
Proceeds from exercise of common stock options	—			40
Payment of debt issuance costs	—			(60		)
Purchase of treasury stock and shares received to satisfy minimum tax withholdings	(73		)	(32		)
Net cash used in financing activities	(2,936		)	(2,583		)
Effect of exchange rate changes on cash and cash equivalents	(107		)	(156		)
Net decrease in Cash and Cash equivalents	(6,686		)	(689		)
Cash and cash equivalents, beginning of period	10,966			15,921
Cash and cash equivalents, end of period	$	4,280		$	15,232

Synacor, Inc.

Segment Results

(In thousands except for percentages)

(Unaudited)

The Company has two reportable segments which are determined on the basis of the products and services provided to customers, identified as follows:

(i) Software & Services, which includes email / collaboration (Zimbra) and identity management (Cloud ID).

(ii) Portal & Advertising, which includes managed portals and advertising solutions for publishers.

The following table presents the key segment financial measures for the periods indicated. Please refer to the Reconciliation of GAAP to Non-GAAP Measures schedule for the reconciliation of Adjusted EBITDA.

	Three Months Ended September 30,											Nine Months Ended September 30,
	2020				2019				% Change			2020				2019				% Change

Segment Revenue:
Software & Services	$	10,116			$	11,091			(8.8	)	%	$	32,093			$	32,837			(2.3	)	%
Portal & Advertising	8,413				20,275				(58.5	)	%	25,195				62,202				(59.5	)	%
Total	$	18,529			$	31,366			(40.9	)	%	$	57,288			$	95,039			(39.7	)	%

Segment Adjusted EBITDA:
Software & Services	$	2,890			$	3,378			(14.4	)	%	$	10,136			$	8,966			13.0		%
Portal & Advertising	588				2,881				(79.6	)	%	(56		)		8,036				(100.7	)	%
Unallocated Corporate Expense	(2,489		)		(3,519		)		29.3		%	(8,323		)		(10,943		)		23.9		%
Total	$	989			$	2,740			(63.9	)	%	$	1,757			$	6,059			(71.0	)	%

Segment Adjusted EBITDA margin*
Software & Services	28.6			%	30.5			%	-190 bps			31.6			%	27.3			%	430 bps
Portal & Advertising	7.0			%	14.2			%	-720 bps			(0.2		)	%	12.9			%	-1310 bps
Total	5.3			%	8.7			%	-340 bps			3.1			%	6.4			%	-330 bps

* Adjusted EBITDA as a percent of revenue

The following tables presents a disaggregation of segment revenue for the periods indicated based upon the accounting definition of revenue recognition:

(i) Recurring = revenue recognized over time

(ii) Non-recurring = revenue recognized at a point in time

	Three Months Ended September 30,							Nine Months Ended September 30,
	2020		2019		% Change			2020		2019		% Change

Software & Services Revenue:
Recurring	$	8,139	$	8,240	(1.2	)	%	$	24,532	$	25,143	(2.4	)	%
Non-recurring	1,977		2,851		(30.7	)	%	7,561		7,334		3.1		%
Discontinued Products **	—		—		—		%	—		360		(100.0	)	%
Total	$	10,116	$	11,091	(8.8	)	%	$	32,093	$	32,837	(2.3	)	%

Portal & Advertising Revenue:
Recurring	$	554	$	1,274	(56.5	)	%	$	2,659	$	3,982	(33.2	)	%
Non-recurring	7,859		19,001		(58.6	)	%	22,536		58,220		(61.3	)	%
Total	$	8,413	$	20,275	(58.5	)	%	$	25,195	$	62,202	(59.5	)	%

Total Revenue:
Recurring	$	8,693	$	9,514	(8.6	)	%	$	27,191	$	29,125	(6.6	)	%
Non-recurring	9,836		21,852		(55.0	)	%	30,097		65,554		(54.1	)	%
Discontinued Products **	—		—		—		%	—		360		—		%
Total	$	18,529	$	31,366	(40.9	)	%	$	57,288	$	95,039	(39.7	)	%

** VAM video product line which was discontinued during Q1 2019.

Synacor, Inc.
Reconciliation of Adjusted Financial Measures
(In thousands except per share amounts)
(Unaudited)

	Three months ended September 30, 2020
	Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP

Revenue	$	18,529							$	18,529
Costs and operating expenses:
Cost of revenue (1)	10,403								10,403
Technology and development (1)(2)	3,085				(405)				2,680
Sales and marketing (2)	3,410				(561)				2,849
General and administrative (1)(2)	3,238		(687)		(133)		94		2,512
Depreciation and amortization	1,991								1,991
Total costs and operating expenses	22,127		(687)		(1,099)		94		20,435
Loss from operations	(3,598)		687		1,099		(94)		(1,906)
Other expense, net	(124)								(124)
Interest expense	(37)								(37)
Loss before income taxes	(3,759)		687		1,099		(94)		(2,067)
Provision for income taxes (3)	203								203
Net loss	$	(3,962)	$	687	$	1,099	$	(94)	$	(2,270)
Diluted EPS	$	(0.10)	$	0.02	$	0.03	$	—	$	(0.05)

	Three months ended September 30, 2019
	Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP



Revenue	$	31,366							$	31,366
Costs and operating expenses:
Cost of revenue (1)	15,634				(292)				$	15,342
Technology and development (1)(2)	5,545				(329)				$	5,216
Sales and marketing (2)	5,473				(192)				$	5,281
General and administrative (1)(2)	5,648		(1,525)		(6)		(370)		$	3,747
Depreciation and amortization	2,605								2,605
Total costs and operating expenses	34,905		(1,525)		(819)		(370)		32,191
Loss from operations	(3,539)		1,525		819		370		(825)
Other income, net	101								101
Interest expense	(80)								(80)
Loss before income taxes	(3,518)		1,525		819		370		(804)
Provision for income taxes (3)	207								207
Net loss	$	(3,725)	$	1,525	$	819	$	370	$	(1,011)
Diluted EPS	$	(0.10)	$	0.04	$	0.02	$	0.01	$	(0.03)

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation

(3) No income tax effects to adjustments presented due to full valuation allowance.

Synacor’s management believes that certain non-GAAP measures of Adjusted Net Loss and Adjusted Diluted Earnings per Share provide investors with additional information to assess the Company’s financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures.

Synacor, Inc.
Reconciliation of Adjusted Financial Measures
(In thousands except per share amounts)
(Unaudited)

	Nine months ended September 30, 2020
	Per GAAP Statements			Asset Impairment			Restructuring Costs			Certain Legal & Professional Fees			Adjusted Non-GAAP

Revenue	$	57,288											$	57,288
Costs and operating expenses:
Cost of revenue (1)	30,168												30,168
Technology and development (1)(2)	9,136						(405		)				8,731
Sales and marketing (2)	11,581						(561		)				11,020
General and administrative (1)(2)	10,978			(687		)	(253		)	(1,704		)	8,334
Depreciation and amortization	6,430												6,430
Total costs and operating expenses	68,293			(687		)	(1,219		)	(1,704		)	64,683
Loss from operations	(11,005		)	687			1,219			1,704			(7,395		)
Other income, net	218												218
Interest Expense	(146		)										(146		)
Loss before income taxes	(10,933		)	687			1,219			1,704			(7,323		)
Provision for income taxes (3)	736												736
Net loss	$	(11,669	)	$	687		$	1,219		$	1,704		$	(8,059	)
Diluted EPS	$	(0.30	)	$	0.02		$	0.03		$	0.04		$	(0.21	)

	Nine months ended September 30, 2019
	Per GAAP Statements			Asset Impairment			Restructuring Costs			Certain Legal & Professional Fees			Adjusted Non-GAAP



Revenue	$	95,039											$	95,039
Costs and operating expenses:
Cost of revenue (1)	49,292						(292		)				49,000
Technology and development (1)(2)	14,668						(329		)				14,339
Sales and marketing (2)	17,014						(192		)				16,822
General and administrative (1)(2)	14,068			(1,751		)	(6		)	(1,406		)	10,905
Depreciation and amortization	7,607												7,607
Total costs and operating expenses	102,649			(1,751		)	(819		)	(1,406		)	98,673
Loss from operations	(7,610		)	1,751			819			1,406			(3,634		)
Other income, net	110												110
Interest Expense	(199		)										(199		)
Loss before income taxes	(7,699		)	1,751			819			1,406			(3,723		)
Provision for income taxes (3)	757												757
Net loss	$	(8,456	)	1,751			$	819		$	1,406		$	(4,480	)
Diluted EPS	$	(0.22	)	$	0.04		$	0.02		$	0.04		$	(0.11	)

Notes:

(1) Exclusive of depreciation and amortization shown separately.

(2) Includes stock-based compensation

(3) No income tax effects to adjustments presented due to full valuation allowance.

Synacor, Inc.
Guidance Reconciliation
(In millions)
(Unaudited)

	Q4-2020	FY 2020

Net Loss	$(0.5) – $(1.1)	$(12.1) – $(12.7)
Taxes, Interest & Other Income/Expense	0.4	1.0
Depreciation & Amortization	2.2	10.3
Stock-based Compensation	0.4	1.5
Restructuring	0.2	1.4
Certain Legal and Professional Fees	0.4	2.1
Asset Impairment	—	0.7
Adjusted EBITDA	$2.5 – $3.1	$4.3 – $4.9

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005856/en/

FNK IR

Rob Fink

+1.646.809.4048

[email protected]

Meredith Roth

VP, Marketing & Corporate Communications

Synacor

+1.770.846.1911

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Internet Data Management Audio/Video Technology Software

MEDIA:

November 11, 2020 4:08 pm

Safe Bulkers, Inc. Reports Third Quarter and Nine Months 2020 Results

MONACO, Nov. 11, 2020 (GLOBE NEWSWIRE) — Safe Bulkers, Inc. (the “Company”) (NYSE: SB), an international provider of marine drybulk transportation services, announced today its unaudited financial results for the three and nine months period ended September 30, 2020.


Financial highlights
In million U.S. Dollars except per share data	*Q3 2020*	Q2 2020		Q1 2020		Q4 2019	*Q3 2019*	*Nine Months 2020*		*Nine Months 2019*
Net Revenues	*51.9*	48.3		45.7		53.2	*50.7*	*145.9*		*144.5*
Net income/(loss)	*3.3*	(13.9	)	(9.9	)	3.6	*5.2*	*(20.5*	)	*12.5*
Adjusted Net income/(loss)¹	*3.5*	(13.3	)	(10.2	)	3.5	*5.9*	*(20.0*	)	*13.2*
EBITDA²	*22.1*	5.7		9.7		23.1	*24.5*	*37.5*		*70.3*
Adjusted EBITDA ²	*22.3*	6.3		9.4		23.1	*25.1*	*38.1*		*71.0*
Earnings/(loss) per share basic and diluted³	*0.00*	(0.16	)	(0.12	)	0.01	*0.02*	*(0.29*	)	*0.04*
Adjusted (loss)/earnings per share basic and diluted ³	*0.00*	(0.16	)	(0.13	)	0.01	*0.03*	*(0.28*	)	*0.04*

Average Daily results in U.S. Dollars
Time charter equivalent rate⁴	*12,575*	8,094		9,089		13,707	*13,311*	*9,940*		*12,513*
Daily vessel operating expenses⁵	*4,896*	4,729		4,771		5,103	*4,448*	*4,799*		*4,406*
Daily vessel operating expenses excluding dry-docking and pre-delivery expenses⁶	*4,459*	4,207		4,285		4,540	*4,053*	*4,318*		*4,162*
Daily general and administrative expenses⁷	*1,418*	1,374		1,371		1,414	*1,363*	*1,388*		*1,368*

In million U.S. Dollars
Total Cash⁸	*106.7*	118.8		109.3		120.1	*87.0*
Liquidity⁹	*109.7*	119.8		145.7		178.0	*87.0*
Total Debt¹⁰	*608.9*	625.4		605.2		601.0	*563.8*

¹ Adjusted Net income/(loss) is a non-GAAP measure. Adjusted Net income/(loss) represents Net income/(loss) before gain/(loss) on derivatives, early redelivery cost, loss on inventory valuation and gain/(loss) on foreign currency. See Table 4.

² EBITDA is a non-GAAP measure and represents Net (loss)/income plus net interest expense, tax, depreciation and amortization. See Table 4. Adjusted EBITDA is a non-GAAP measure and represents EBITDA before gain/(loss) on derivatives, early redelivery cost, loss on inventory valuation and, gain/(loss) on foreign currency. See Table 4.

³ Earnings/(loss) per share and Adjusted Earnings/(loss) per share represent Net Income and Adjusted Net income less preferred dividend and mezzanine equity measurement divided by the weighted average number of shares respectively. See Table 4.

⁴ Time charter equivalent rate, or TCE rate, represents charter revenues less commissions and voyage expenses divided by the number of available days. See Table 5.

⁵ Daily vessel operating expenses are calculated by dividing vessel operating expenses for the relevant period by ownership days for such period. See Table 5.

⁶ Daily vessel operating expenses excluding dry-docking and pre-delivery expenses are calculated by dividing vessel operating expenses excluding dry-docking and pre-delivery

expenses for the relevant period by ownership days for such period. See Table 5.

⁷ Daily general and administrative expenses are calculated by dividing general and administrative expenses for the relevant period by ownership days for such period. See Table 5.

⁸ Total Cash represents Cash and cash equivalents plus Time deposits and Restricted cash.

⁹ Liquidity represents Total Cash plus contracted undrawn borrowing capacity under revolving credit facilities and secured commitments including sale and lease back financing.

¹⁰ Total Debt represents Long-term debt plus Current portion of long-term debt, net of deferred financing costs.

Management Commentary

Dr. Loukas Barmparis, President of the Company, said: ”Our financial performance gradually improved in parallel with the chartering market during the 3^rdquarter. At the same time, we focused on developing a plan for renewing our fleet with modern designs that adhere to the new environmental regulations. Due to market uncertainties, we remain cautious and we believe that our liquidity position which exceeds $130 million provides us with the required flexibility.”

Update on COVID-19, company’s actions and status

There has been a negative effect from the COVID-19 pandemic on the Company’s results of operations and financial condition year to date, due to lower demand which resulted in relatively lower charter rates, and higher crew and related costs. Any future impact of COVID-19 on the Company’s results of operations and financial condition and any long-term impact of the pandemic on the dry bulk industry, will depend on future developments, which are highly uncertain and cannot be predicted, including a potential second wave of the pandemic and any new potential restrictions imposed, new information which may emerge concerning the severity of the virus and/or actions taken to contain or treat its impact, as well as political implications that could further impact world trade and global growth.

The COVID-19 pandemic has had significant impact on the shipping industry and our seafarers as port lockdowns were imposed globally and certain ports that had opened have subsequently closed again for crew changes. The Company has worked extensively to find solutions focusing on effectively managing crew changes despite the ongoing travel restrictions imposed by governments around the world. The Company has also taken measures to protect its seafarers’ and shore employees’ health and well-being, keep its vessels sailing with minimal disruption to their trading ability, service its charterers and mitigate and address the risks, effects and impact of COVID-19 on our operations and financial performance.

At-the-market equity offering program

In August 2020, the Company filed a prospectus supplement with the Securities and Exchange Commission (“SEC”), under which it may offer and sell shares of its common stock (“Shares”) from time to time up to aggregate gross offering proceeds of $23.5 million through an “at-the-market” equity offering program (the “ATM Program”). As of November 6, 2020, the Company had not offered to sell and has not sold any Shares under the ATM Program.

Chartering our fleet

Our vessels are used to transport bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes. We intend to employ our vessels on both period time charters and spot time charters, according to our assessment of market conditions. Our customers represent some of the world’s largest consumers of marine drybulk transportation services. The vessels we deploy on period time charters provide us with visible and relatively stable cash flow, while the vessels we deploy in the spot market allow us to maintain our flexibility in low charter market conditions and provide an opportunity for a potential upside in our revenue when charter market conditions improve.

During the third quarter of 2020, we operated 42.00 vessels on average earning a TCE¹¹ of $12,575 compared to 41.00 vessels earning a TCE of $13,311 during the same period in 2019. Our contracted employment profile is presented below in Table 1.

¹¹ Time Charter Equivalent (“TCE”) rate represents charter revenues net of commissions and voyage expenses divided by the number of available days.

Table 1: Contracted employment profile of fleet ownership days as of November 6, 2020

2020 (remaining)	67	%
2020 (full year)	95	%
2021	26	%
2022	19	%

The detailed employment profile is presented in Table 6. Scrubber benefit for scrubber fitted vessels is calculated on the basis of fuel consumption of heavy fuel oil and price differential between heavy fuel oil and compliant fuel cost for the specific voyage and is either presented as part of the daily charter hire in Table 6, or in cases where it can not be estimated is not part of the stated daily charter hire.

Orderbook and financing

In October 2020, the Company planning a gradual fleet renewal with modern vessels, entered into an agreement for the acquisition of a Japanese-built, dry-bulk, Kamsarmax class, 82,000 dwt, newbuild vessel with a scheduled delivery within the first half of 2022. The vessel is designed to meet the latest requirements of Energy Efficiency Design Index to Green House Gas, GHG emissions, and ‘EEDI Phase 3’. It will also comply with the latest NOx emissions regulation, NOx-Tier III.

At the same time, the Company entered into a sale and lease back through a bareboat charter agreement with a third party for 90% financing of this acquisition, minimizing impact on liquidity. The bareboat charter to be consummated upon delivery will have a duration of ten years with a purchase obligation at a predetermined price on termination and purchase options commencing three years following the commencement of the bareboat charter period in the Company’s favor.

Liquidity

As of September 30, 2020, we had liquidity of $109.7 million, which included cash and cash equivalents, restricted cash and funds available under our unsecured revolving credit facility and no capital expenditure requirements in relation to newbuild vessels.

As of November 6, 2020, we had liquidity of $136.0 million, which included cash and cash equivalents, restricted cash, funds available under our unsecured revolving credit facility and sale and lease back financing of the newbuild Kamsarmax class vessel and aggregate remaining capital expenditure in relation to the orderbook of $27.3 million.

Debt Profile – Leverage

As of September 30, 2020, our consolidated debt before deferred financing costs was $613.7 million and our consolidated leverage¹² was 66% versus 68% as of June 30, 2020.

The loan repayment schedule of the Company as of September 30, 2020, is presented below in Table 2.

¹²Consolidated leverage is a non-GAAP measure and represents total consolidated liabilities divided by total consolidated assets. Total consolidated assets are based on the market value of all vessels owned or leased on a finance lease taking into account their employment, and the book value of all other assets. This measure assists our management and investors by increasing the comparability of our leverage from period to period.

Table 2: Loan repayment Schedule

(in USD millions)

Ending December 31,	2020	2021	2022	2023	2024	2025	2026	2027	Total
September 30, 2020	11.2	72.4	113.6	120.0	171.9	66.8	16.2	41.6	613.7

Interest rate derivatives

During the third quarter of 2020, the Company entered into eleven pay-fixed, receive-variable interest rate derivative contracts commencing in the third quarter of 2020 with maturities ranging from August 2024 to August 2025 and at fixed rates ranging from 0.322% to 0.40% for an aggregate notional amount of $107.0 million. As of September 30, 2020, the aggregate notional amount of interest rate derivative contracts entered into by the Company was $244.6 million or about 40% of the aggregate debt outstanding as of that point in time.

Environmental Social Responsibility – Environmental investments

In the context of our Environmental Social Responsibility policies, the Company is undertaking environmental investments mainly in scrubbers and ballast water treatment systems. As of September 30, 2020, the Company has completed the installation of 20 scrubbers and continues the project of retrofitting BWTS in all vessels of the Company’s fleet, having installed 30 systems to date. The aggregate cost of our environmental investments as of quarter end was $66.7 million.

The scheduled number and estimated down-time days for dry-dockings and environmental investments as of September 30, 2020 for the subsequent two quarters, is presented in Table 3.

Table 3: Scheduled number and estimated down-time for dry-dockings and environmental investments.

	Down time in Days
	Q4 2020	Q1 2021
Number of vessels	2*	2*
Total down time	20	40

* Partial completion.

Dividend Policy

The Company has not declared a dividend on the Company’s common stock for the third quarter of 2020. The Company had 102,174,594 shares of common stock issued and outstanding as of November 6, 2020.

The aggregate cash dividend of $0.50 per share declared by the Company on each of its 8.00% Series C Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.C) and 8.00% Series D Cumulative Redeemable Perpetual Preferred Shares (NYSE: SB.PR.D) for the period from July 30, 2020 to October 29, 2020, which was paid on October 30, 2020 to the respective shareholders of record as of October 22, 2020, was $2.75 million.

A Company’s subsidiary declares a cash dividend on a quarterly basis on each of its 2.95% Series A Cumulative Redeemable Perpetual Preferred Shares (‘Series A shares’) to the respective shareholders of record, presented under the caption “Mezzanine Equity” in the condensed consolidated balance sheets. The aggregate cash dividend declared for the Series A shares for the period from July 1, 2020 to September 30, 2020, which was paid on September 30, 2020, was $0.1 million. The aggregate cash dividend to be declared for the Series A shares for the period from October 1, 2020 to December 31, 2020, payable on December 31, 2020, is $0.1 million.

The declaration and payment of dividends, if any, will always be subject to the discretion of the Board of Directors of the Company. The timing and amount of any dividends declared will depend on, among other things: (i) the Company’s earnings, financial condition and cash requirements and available sources of liquidity; (ii) decisions in relation to the Company’s growth and leverage strategies; (iii) provisions of Marshall Islands and Liberian law governing the payment of dividends; (iv) restrictive covenants in the Company’s existing and future debt instruments; and (v) global economic and financial conditions.

Conference Call

On Thursday, November 12, 2020 at 9:30 A.M. Eastern Time, the Company’s management team will host a conference call to discuss the Company’s financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote Safe Bulkers to the operator.

A telephonic replay of the conference call will be available until November 19, 2020 by dialing 1 (866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009785 (Standard International Dial In). Access Code: 1859591#

Slides and Audio Webcast

There will also be a live, and then archived, webcast of the conference call, available through the Company’s website (www.safebulkers.com). Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Management Discussion of Third Quarter 2020 Results

During the third quarter of 2020, we operated in a relatively weaker charter market environment compared to the same period in 2019. This is reflected in our reduced TCE of $12,575 for the third quarter of 2020, compared to $13,311 during the same period in 2019. Net revenues were supported by the increased earnings from scrubber fitted vessels notwithstanding the reduced price differential between heavy fuel oil and compliant fuels, due to low fuel cost environment, and by revenue contributed by the newbuild vessel delivered to us in April 2020. Voyage expenses increased due to increased vessel repositioning expenses, higher loss on bunkers sales due to low fuel cost environment and consumption costs for scrubber fitted vessels as explained below. As a result of the above, the net income for the third quarter of 2020, reached $3.3 million compared to net income of $5.2 million during the same period in 2019. In more detail, the change in net income resulted from the following main factors:

Net revenues: Net revenues increased by 2% to $51.9 million for the third quarter of 2020, compared to $50.7 million for the same period in 2019, assisted mainly by the additional revenues earned by our scrubber fitted vessels and the additional vessel delivered in 2020, partially offset by the reduced TCE.

Voyage expenses: Voyage expenses increased to $5.1 million for the third quarter of 2020 compared to $3.6 million for the same period in 2019, as a result of increased vessel repositioning expenses, higher loss on bunkers sales and bunker consumption costs for scrubber fitted vessels under charter agreements which provide for variable consideration based on the bunker consumption.

Vessel operating expenses: Vessel operating expenses increased by 13% to $18.9 million for the third quarter of 2020 compared to $16.8 million for the same period in 2019, mainly as a result of: i) spares, stores and provisions of $4.0 million for the third quarter of 2020, compared to $3.1 million for the same period in 2019, ii) repairs and maintenance of $3.2 million for the third quarter of 2020, compared to $2.4 million for the same period in 2019, iii) crew wages and related costs of $9.0 million for the third quarter of 2020 compared to $8.3 million for the same period in 2019, and iv) dry docking expense of $1.7 million related to four fully and one partially completed dry dockings during the third quarter of 2020, compared to $1.5 million related to four fully and three partially completed dry dockings for the same period of 2019, offset by the reduction in lubricants of $0.9 million for the third quarter of 2020, compared to $1.2 million for the same period in 2019. The Company expenses dry-docking and pre-delivery costs as incurred, which costs may vary from period to period. Excluding dry-docking and pre-delivery costs of $1.7 and $1.5 million for the third quarter of 2020 and 2019, respectively, vessel operating expenses increased by 13% to $17.2 million for the third quarter of 2020 compared to $15.3 million for the same period in 2019, due to completed drydockings affecting costs of spares and repairs and maintenance and increased crew repatriation and travel expenses due to COVID-19. Dry-docking expense is related to the number of dry-dockings in each period and pre-delivery expenses to the number of vessel deliveries and second hand acquisitions in each period. Certain other shipping companies may defer and amortize dry-docking expense and many do not include dry-docking expenses within vessel operating expenses costs and present these separately.

Depreciation: Depreciation increased by 9% to $13.8 million for the third quarter of 2020, compared to $12.7 million for the same period in 2019, as a result of the commencement of depreciation of environmental investments
that were completed following the third quarter of 2019 and depreciation of the newbuild delivered during the previous quarter.

Interest expense: Interest expense decreased to $4.6 million in the third quarter of 2020 compared to $6.6 million for the same period in 2019, as a result of the decreased USD LIBOR¹³ affecting the weighted average interest rate of our loans and credit facilities.

Daily vessel operating expenses¹⁴: Daily vessel operating expenses, calculated by dividing vessel operating expenses by the ownership days of the relevant period, increased by 10% to $4,896 for the third quarter of 2020 compared to $4,448 for the same period in 2019. Daily vessel operating expenses excluding dry-docking and pre-delivery expenses increased by 10% to $4,459 for the third quarter of 2020 compared to $4,053 for the same period in 2019.

Daily general and administrative expenses¹⁴: Daily general and administrative expenses, which include management fees payable to our Managers¹⁵ and daily company administrations expenses, increased by 4% to $1,418 for the third quarter of 2020, compared to $1,363 for the same period in 2019, as a result of increased company administration expenses.

¹³ London interbank offered rate.

¹⁴ See Table 5.

¹⁵ Safety Management Overseas S.A. and Safe Bulkers Management Limited, each of which is a related party that is referred to in this press release as “our Manager” and collectively “our Managers’’.

Unaudited Interim Financial Information and Other Data

SAFE BULKERS, INC.

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands of U.S. Dollars except for share and per share data)

	Three-Months Period Ended September 30,				Nine-Months Period Ended September 30,
	2019		2020		2019		2020
REVENUES:
Revenues	52,927		53,992		150,971		151,632
Commissions	(2,213	)	(2,059	)	(6,457	)	(5,703	)
Net revenues	50,714		51,933		144,514		145,929
EXPENSES:
Voyage expenses	(3,581	)	(5,080	)	(8,664	)	(36,866	)
Vessel operating expenses	(16,776	)	(18,917	)	(49,320	)	(54,716	)
Depreciation	(12,669	)	(13,829	)	(37,375	)	(40,395	)
General and administrative expenses	(5,140	)	(5,480	)	(15,307	)	(15,825	)
Loss from inventory valuation	(348	)	—		(348	)	—
Early redelivery cost	(63	)	—		(63	)	—
Operating income/(loss)	12,137		8,627		33,437		(1,873	)
OTHER (EXPENSE) / INCOME:
Interest expense	(6,634	)	(4,608	)	(20,641	)	(16,900	)
Other finance cost	(95	)	(108	)	(212	)	(467	)
Interest income	410		44		1,230		563
Loss on derivatives	—		(272	)	—		(1,009	)
Foreign currency (loss)/gain	(213	)	57		(295	)	491
Amortization and write-off of deferred finance charges	(358	)	(429	)	(1,035	)	(1,324	)
Net income/(loss)	5,247		3,311		12,484		(20,519	)
Less Preferred dividend	2,875		2,876		8,620		8,622
Less Mezzanine equity measurement	—		360		304		495
Net income/(loss) available to common shareholders	2,372		75		3,560		(29,636	)
Earnings/(loss) per share basic and diluted	0.02		0.00		0.04		(0.29	)
Weighted average number of shares	101,279,564		102,160,308		101,367,866		102,762,932

	Nine-Months Period Ended September 30,
	2019		2020
(In millions of U.S. Dollars)
CASH FLOW DATA
Net cash provided by operating activities	39.9		34.2
Net cash provided by/(used in) investing activities	1.4		(35.5	)
Net cash used in financing activities	(23.6	)	(8.1	)
Net increase/(decrease) in cash and cash equivalents	17.7		(9.4	)

SAFE BULKERS, INC.

CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands of U.S. Dollars)

	December 31, 2019	September 30, 2020
ASSETS
Cash, time deposits, and restricted cash	106,378	89,535
Other current assets	29,611	22,238
Vessels, net	944,706	962,686
Advances for vessels	19,294	609
Restricted cash non-current	13,701	17,155
Other non-current assets	953	681
Total assets	1,114,643	1,092,904
LIABILITIES AND EQUITY
Current portion of long-term debt	64,054	68,291
Other current liabilities	22,730	20,865
Long-term debt, net of current portion	536,995	540,562
Other non-current liabilities	922	5,226
Mezzanine equity	17,200	17,567
Shareholders’ equity	472,742	440,393
Total liabilities and equity	1,114,643	1,092,904

TABLE 4

RECONCILIATION OF ADJUSTED NET INCOME/(LOSS), EBITDA, ADJUSTED EBITDA AND ADJUSTED EARNINGS/(LOSS) PER SHARE

	Three-Months Period Ended September 30,			Nine-Months Period Ended September 30,
(In thousands of U.S. Dollars except for share and per share data)	2019	2020		2019	2020
Net Income/(Loss) – Adjusted Net Income/(Loss)
Net Income/(Loss)	5,247	3,311		12,484	(20,519	)
Plus Loss on derivatives	—	272		—	1,009
Plus Foreign currency loss/(gain)	213	(57	)	295	(491	)
Plus Early Redelivery cost	63	—		63	—
Plus Loss on inventory valuation	348	—		348	—
Adjusted net income/(loss)	5,871	3,526		13,190	(20,001	)
EBITDA – Adjusted EBITDA
Net income/(loss)	5,247	3,311		12,484	(20,519	)
Plus Net Interest expense	6,224	4,564		19,411	16,337
Plus Depreciation	12,669	13,829		37,375	40,395
Plus Amortization and write-off of deferred finance charges	358	429		1,035	1,324
EBITDA	24,498	22,133		70,305	37,537
Plus Early Redelivery cost	63	—		63	—
Plus Loss on inventory valuation	348	—		348	—
Plus Loss on derivatives	—	272		—	1,009
Plus Foreign currency loss/(gain)	213	(57	)	295	(491	)
ADJUSTED EBITDA	25,122	22,348		71,011	38,055
Earnings per share
Net income/(loss)	5,247	3,311		12,484	(20,519	)
Less Preferred dividend	2,875	2,876		8,620	8,622
Less Mezzanine equity measurement adjustment	—	360		304	495
Net income/(loss) available to common shareholders	2,372	75		3,560	(29,636	)
Weighted average number of shares	101,279,564	102,160,308		101,367,866	102,762,932
Earnings/(Loss) per share	0.02	0.00		0.04	(0.29	)
Adjusted Earnings/(Loss) per share
Adjusted Net Income/(Loss)	5,871	3,526		13,190	(20,001	)
Less Preferred dividend	2,875	2,876		8,620	8,622
Less Mezzanine measurement adjustment	—	360		304	495
Adjusted Net income/(loss) available to common shareholders	2,996	290		4,266	(29,118	)
Weighted average number of shares	101,279,564	102,160,308		101,367,866	102,762,932
Adjusted Earnings/(loss) per share	0.03	0.00		0.04	(0.28	)

EBITDA, Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP.
– EBITDA represents Net income before interest, income tax expense, depreciation and amortization.
– Adjusted EBITDA represents EBITDA before loss on inventory valuation, gain/(loss) on derivatives, early redelivery cost and gain/(loss) on foreign currency.
– Adjusted Net income/(loss) represents Net income/(loss) before loss on inventory valuation, gain/(loss) on derivatives, early redelivery cost and gain/(loss) on foreign currency.
– Adjusted earnings/(loss) per share represents Adjusted Net income/(loss) less preferred dividend divided by the weighted average number of shares.
– EBITDA, Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings per share are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Company believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Company believes that including these supplemental financial measures assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our financial and operational performance in assessing whether to continue investing in us. The Company believes that EBITDA, Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings/(loss) per share are useful in evaluating the Company’s operating performance from period to period because the calculation of EBITDA generally eliminates the effects of financings, income taxes and the accounting effects of capital expenditures and acquisitions, the calculation of Adjusted EBITDA generally further eliminates the effects from loss on sale of assets, gain/(loss) on derivatives, early redelivery cost and gain/(loss) on foreign currency, items which may vary from year to year and for different companies for reasons unrelated to overall operating performance. Furthermore, the calculation of Adjusted Net income/(loss) generally eliminates the effects of loss on sale of assets, gain/(loss) on derivatives, early redelivery cost and gain/(loss) on foreign currency, items which may vary from year to year and for different companies for reasons unrelated to overall operating performance. EBITDA, Adjusted EBITDA, Adjusted Net income and Adjusted earnings per share have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under US GAAP. EBITDA, Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings per share, should not be considered as substitutes for net income and other operations data prepared in accordance with US GAAP or as a measure of profitability. While EBITDA and Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings/(loss) per share, are frequently used as measures of operating results and performance, they are not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. In evaluating Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings/(loss) per share, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA, Adjusted Net income/(loss) and Adjusted earnings/(loss) per share should not be construed as an inference that our future results will be unaffected by the excluded items.

TABLE 5: FLEET DATA AND AVERAGE DAILY INDICATORS

	Three-Months Period Ended September 30,						Nine-Months Period Ended September 30,
	2019			2020			2019			2020
FLEET DATA
Number of vessels at period’s end	41			42			41			42
Average age of fleet (in years)	9.08			9.86			9.08			9.86
Ownership days⁽¹⁾	3,772			3,864			11,193			11,402
Available days ⁽²⁾	3,541			3,726			10,857			10,972
Average number of vessels in the period⁽³⁾	41.00			42.00			41.00			41.77
AVERAGE DAILY RESULTS
Time charter equivalent rate⁽⁴⁾	$	13,311		$	12,575		$	12,513		$	9,940
Daily vessel operating expenses ⁽⁵⁾	$	4,448		$	4,896		$	4,406		$	4,799
Daily vessel operating expenses excluding dry-docking and pre-delivery expenses ⁽⁶⁾	$	4,053		$	4,459		$	4,162		$	4,318
Daily general and administrative expenses⁽⁷⁾	$	1,363		$	1,418		$	1,368		$	1,388
TIME CHARTER EQUIVALENT RATE RECONCILIATION
(In thousands of U.S. Dollars except for available days and Time charter equivalent rate)
Revenues	$	52,927		$	53,992		$	150,971		$	151,632
Less commissions	(2,213		)	(2,059		)	(6,457		)	(5,703		)
Less voyage expenses	(3,581		)	(5,080		)	(8,664		)	(36,866		)
Time charter equivalent revenue	$	47,133		$	46,853		$	135,850		$	109,063
Available days ⁽²⁾	3,541			3,726			10,857			10,972
Time charter equivalent rate ⁽⁴⁾	$	13,311		$	12,575		$	12,513		$	9,940

_____________

(1) Ownership days represents the aggregate number of days in a period during which each vessel in our fleet has been owned by us.
(2) Available days represents the total number of days in a period during which each vessel in our fleet was in our possession, net of off-hire days associated with scheduled maintenance, which includes major repairs, drydockings, vessel upgrades or special or intermediate surveys.
(3) Average number of vessels in the period is calculated by dividing ownership days in the period by the number of days in that period.
(4) Time charter equivalent rate, or TCE rate, represents our charter revenues less commissions and voyage expenses during a period divided by the number of available days during such period. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on period time charters and spot time charters with daily earnings generated by vessels on voyage charters, because charter rates for vessels on voyage charters are generally not expressed in per day amounts, while charter rates for vessels on period time charters and spot time charters generally are expressed in such amounts. We have only rarely employed our vessels on voyage charters and, as a result, generally our TCE rates approximate our time charter rates.
(5) Daily vessel operating expenses are calculated by dividing vessel operating expenses for the relevant period by ownership days for such period. Vessel operating expenses include crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance including dry-docking, statutory and classification expenses and other miscellaneous items.
(6) Daily vessel operating expenses excluding dry-docking and pre-delivery expenses are calculated by dividing vessel operating expenses excluding dry-docking and pre-delivery expenses for the relevant period by ownership days for such period. Dry-docking expenses include costs of shipyard, paints and agent expenses and pre-delivery expenses include initially supplied spare parts, stores, provisions and other miscellaneous items provided to a newbuild or second hand acquisition prior to their operation.
(7) Daily general and administrative expenses are calculated by dividing general and administrative expenses for the relevant period by ownership days for such period. Daily general and administrative expenses include daily management fees payable to our Managers and daily company administration expenses.

Table 6: Detailed fleet and employment profile as of November 6, 2020

Vessel Name	Dwt	Year Built ¹	Country of Construction	Charter Type	Charter Rate ²		Commissions³		Charter Period ⁴
CURRENT FLEET
Panamax
Maria	76,000	2003	Japan	Period	$	9,349	5.00	%	February 2020	December 2020
Koulitsa	76,900	2003	Japan	Period	$	11,000	5.00	%	November 2020	November 2020
Paraskevi	74,300	2003	Japan	Spot	$	10,734	5.00	%	October 2020	November 2020
Vassos	76,000	2004	Japan	Spot	$	11,000	5.00	%	October 2020	November 2020
Katerina	76,000	2004	Japan	Spot	$	7,925	5.00	%	March 2020	November 2020
Maritsa	76,000	2005	Japan	Period	$	7,445	5.00	%	October 2020	November 2020
Efrossini	75,000	2012	Japan	Spot	$	12,204	5.00	%	September 2020	December 2020
Zoe ¹⁰	75,000	2013	Japan	Spot	$	11,650	5.00	%	September 2020	April 2021
Kypros Land ^{10 , 15}	77,100	2014	Japan	Period	$	13,800	3.75	%	August 2020	August 2022
Kypros Land ^{10 , 15}	77,100	2014	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	August 2022	August 2025
Kypros Sea ¹⁵	77,100	2014	Japan	Period	$	13,800	3.75	%	July 2020	July 2022
Kypros Sea ¹⁵	77,100	2014	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	July 2022	July 2025
Kypros Bravery¹³	78,000	2015	Japan	Period	$	11,750	3.75	%	August 2020	August 2022
Kypros Bravery¹³	78,000	2015	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	August 2022	August 2025
Kypros Sky ^{8 , 13}	77,100	2015	Japan	Period	$	11,750	3.75	%	August 2020	August 2022
Kypros Sky ^{8 , 13}	77,100	2015	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	August 2022	August 2025
Kypros Loyalty¹³	78,000	2015	Japan	Period	$	11,750	3.75	%	July 2020	July 2022
Kypros Loyalty¹³	78,000	2015	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	July 2022	July 2025
Kypros Spirit^{8, 15}	78,000	2016	Japan	Period	$	13,800	3.75	%	July 2020	July 2022
Kypros Spirit^{8, 15}	78,000	2016	Japan	Period	BPI 82 5TC * 97% – $2,150		3.75	%	July 2022	July 2025
Kamsarmax
Pedhoulas Merchant	82,300	2006	Japan	Spot	$	12,250	5.00	%	September 2020	November 2020
Pedhoulas Trader	82,300	2006	Japan	Period	$	10,859	5.00	%	October 2020	November 2020
Pedhoulas Leader	82,300	2007	Japan	Spot	$	12,200	5.00	%	October 2020	November 2020
Pedhoulas Commander	83,700	2008	Japan	Period	$	9,950	5.00	%	June 2019	May 2021
Pedhoulas Builder	81,600	2012	China	Spot ¹²	$	11,550	5.00	%	October 2020	December 2020
Pedhoulas Fighter	81,600	2012	China	Spot¹²	$	10,196	5.00	%	September 2020	November 2020
Pedhoulas Farmer⁵	81,600	2012	China	Spot ¹¹	$	13,200	5.00	%	October 2020	December 2020
Pedhoulas Cherry	82,000	2015	China	Spot¹²	$	10,224	5.00	%	September 2020	November 2020
Pedhoulas Rose⁵	82,000	2017	China	Spot¹²	$	15,000	5.00	%	August 2020	December 2020
Pedhoulas Cedrus	82,000	2017	China	Spot	$	13,000	3.75	%	August 2020	May 2021
Pedhoulas Cedrus	82,000	2017	China	Period	$	13,000	3.75	%	May 2021	May 2021
Post-Panamax
Marina	87,000	2006	Japan	Spot¹²	$	11,750	5.00	%	November 2020	December 2020
Xenia	87,000	2006	Japan	Spot¹²	$	11,620	5.00	%	September 2020	November 2020
Sophia	87,000	2007	Japan
Eleni	87,000	2008	Japan	Spot¹²	$	10,169	5.00	%	October 2020	December 2020
Martine	87,000	2009	Japan	Spot¹²	$	11,900	5.00	%	November 2020	December 2020
Andreas K	92,000	2009	South Korea
Panayiota K ⁹	92,000	2010	South Korea	Spot ¹²	$	5,613	5.00	%	October 2020	November 2020
Agios Spyridonas ⁹	92,000	2010	South Korea	Spot¹¹	$	12,100	5.00	%	November 2020	December 2020
Venus Heritage ¹⁰	95,800	2010	Japan	Spot ¹²	$	21,442	5.00	%	November 2020	January 2021
Venus History¹⁰	95,800	2011	Japan	Spot¹²	$	11,500	5.00	%	November 2020	December 2020
Venus Horizon	95,800	2012	Japan	Spot¹²	$	8,850	5.00	%	June 2020	November 2020
Troodos Sun ¹¹	85,000	2016	Japan	Spot¹⁸	$	2,275	5.00	%	October 2020	December 2020
Troodos Air	85,000	2016	Japan	Spot¹²	$	10,500	5.00	%	November 2020	December 2020
Troodos Oak¹⁴	85,000	2020	Japan	Spot	109% BPI-82 5TC		5.00	%	June 2020	May 2021
Capesize
Mount Troodos ¹⁶	181,400	2009	Japan	Period	BCI*103.5%+80% SCR BNFT		5.00	%	April 2020	June 2021
Kanaris	178,100	2010	China	Period ⁶	$	25,928	5.00	%	September 2011	September 2031
Pelopidas	176,000	2011	China	Period	$	38,000	5.00	%	January 2012	January 2022
Lake Despina	181,400	2014	Japan	Period⁷	$	24,810	5.00	%	January 2014	January 2024
TOTAL	3,862,000
Orderbook
TBN¹⁷	82,000	1H 2022	Japan

(1) For existing vessels, the year represents the year built. For any newbuilds, the date shown reflects the expected delivery dates.
(2) Quoted charter rates are the recognized daily gross charter rates. For charter parties with variable rates among periods or consecutive charter parties with the same charterer, the recognized gross daily
charter rate represents the weighted average gross daily charter rate over the duration of the applicable charter period or series of charter periods, as applicable. In the case of a charter agreement that
provides for additional payments, namely ballast bonus to compensate for vessel repositioning, the gross daily charter rate presented has been adjusted to reflect estimated vessel repositioning expenses.
Gross charter rates are inclusive of commissions. Net charter rates are charter rates after the payment of commissions. In the case of voyage charters, the charter rate represents revenue recognized on a
pro rata basis over the duration of the voyage from load to discharge port less related voyage expenses.
(3) Commissions reflect payments made to third-party brokers or our charterers.
(4) The start dates listed reflect either actual start dates or, in the case of contracted charters that had not commenced as of November 6, 2020, the scheduled start dates. Actual start dates and redelivery dates may
differ from the referenced scheduled start and redelivery dates depending on the terms of the charter and market conditions and does not reflect the options to extend the period time charter.
(5) MV Pedhoulas Farmer and MV Pedhoulas Rose were sold and leased back, in 2015 and 2017, respectively, on a bareboat charter basis for a period of 10 years, with a purchase obligation at the end of the
bareboat charter period and purchase options in favor of the Company after the second year of the bareboat charter, at annual intervals and predetermined purchase prices.
(6) Charterer agreed to reimburse us for part of the cost of the scrubbers and BWTS to be installed on the vessel, which is recorded by increasing the recognized daily charter rate by $634 over the remaining
tenor of the time charter party.
(7) A period time charter of 10 years at a gross daily charter rate of $23,100 for the first two and a half years and of $24,810 for the remaining period. In January 2017, the period time charter was amended
to reflect substitution of the initial charterer with its subsidiary guaranteed by the initial charterer and changes in payment terms; all other period charter terms remained unchanged. The charter agreement
grants the charterer the option to purchase the vessel at any time beginning at the end of the seventh year of the period time charter period, at a price of $39.0 million less 1.00% commission, decreasing
thereafter on a pro-rated basis by $1.5 million per year. The Company holds a right of first refusal to buy back the vessel in the event that the charterer exercises its option to purchase the vessel and
subsequently offers to sell such vessel to a third party. The charter agreement also grants the charterer an option to extend the period time charter for an additional twelve months at a time at a gross daily
charter rate of $26,330, less 1.25% total commissions, which option may be exercised by the charterer a maximum of two times.
(8) MV Kypros Sky and MV Kypros Spirit were sold and leased back in December 2019 on a bareboat charter basis for a period of eight years, with purchase options in favor of the Company commencing
three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at predetermined purchase prices.
(9) MV Panayiota K and MV Agios Spyridonas were sold and leased back in January 2020 on a bareboat charter basis for a period of six years, with purchase options in favor of the Company commencing three
years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at predetermined purchase prices.
(10) MV Zoe, MV Kypros Land, MV Venus Heritage and MV Venus History were sold and leased back in November 2019, on a bareboat charter basis, one for a period of eight years and three for a period of
seven and a half years, with a purchase option in favor of the Company five years and nine months following the commencement of the bareboat charter period at a predetermined purchase price.
(11) Scrubber benefit was agreed on the basis of fuel consumption of heavy fuel oil and the price differential between the heavy fuel oil and the compliant fuel cost for the voyage and is included on the daily
gross charter rate presented.
(12) Scrubber benefit was agreed on the basis of fuel consumption of heavy fuel oil and the price differential between the heavy fuel oil and the compliant fuel cost for the voyage and is not included on the daily
gross charter rate presented.
(13) A period time charter of 5 years at a daily gross charter rate of $11,750 for the first two years and a gross daily charter rate linked to the BPI-82 5TC times 97% minus $2,150, for the remaining period.
(14) A period time charter of 11 to 13 months at a gross daily charter rate linked to the BPI-82 5TC times 109%.
(15) A period time charter of 5 years at a daily gross charter rate of $13,800 for the first two years and a gross daily charter rate linked to the BPI-82 5TC times 97% minus $2,150, for the remaining period.
(16) A period time charter at a gross daily charter rate linked to the Baltic Exchange Capesize Index (“BCI”) times 103.5% plus 80% of scrubber benefit.
(17) The newbuild vessel will be sold and leased back upon delivery in 1H 2022, on a bareboat charter basis for a period of ten years with a purchase option in favor of the Company three years following the commencement of the bareboat charter period and a purchase obligation at the end of the bareboat charter period, all at predetermined purchase prices.
(18) A spot time charter which refers to a trip back to Atlantic.

About Safe Bulkers, Inc.

The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along worldwide shipping routes for some of the world’s largest users of marine drybulk transportation services. The Company’s common stock, series C preferred stock and series D preferred stock are listed on the NYSE, and trade under the symbols “SB”, “SB.PR.C”, and “SB.PR.D”, respectively.

Forward-Looking Statements

This press release contains forward-looking statements (as defined in Section 27A of the Securities Exchange Act of 1934, as amended, and in Section 21E of the Securities Act of 1933, as amended) concerning future events, the Company’s growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, business disruptions due to natural disasters or other events, such as the recent COVID-19 pandemic, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the demand for drybulk vessels, competitive factors in the market in which the Company operates, risks associated with operations outside the United States and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

For further information please contact:

Company Contact:

Dr. Loukas Barmparis
President
Safe Bulkers, Inc.
Tel.: +30 21 11888400
+357 25 887200
E-Mail:[email protected]

Investor Relations / Media Contact:

Nicolas Bornozis, President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, N.Y. 10169
Tel.: (212) 661-7566
Fax: (212) 661-7526
E-Mail:[email protected]

November 11, 2020 4:08 pm

Dicerna to Participate in Upcoming Investor Conferences

Dicerna to Participate in Upcoming Investor Conferences

LEXINGTON, Mass.–(BUSINESS WIRE)–Dicerna Pharmaceuticals, Inc. (Nasdaq: DRNA) (the “Company” or “Dicerna”), a leading developer of investigational ribonucleic acid interference (RNAi) therapeutics, today announced that Douglas M. Fambrough, Ph.D., president and chief executive officer, will be participating in fireside chats at two upcoming investor conferences:

Stifel Virtual Healthcare Conference on Wednesday, Nov. 18, 2020 at 3:20 p.m. ET
Evercore ISI 3^rd Annual HealthCONx Virtual Conference on Tuesday, Dec. 1, 2020 at 10:05 a.m. ET

A live audio webcast of each event will be accessible from the Investors and Media section of the Dicerna website at www.investors.dicerna.com. An archived replay will be available on the Company’s website following the event.

About Dicerna Pharmaceuticals, Inc.

Dicerna Pharmaceuticals, Inc. (Nasdaq: DRNA) is a biopharmaceutical company focused on discovering, developing and commercializing medicines that are designed to leverage ribonucleic acid interference (RNAi) to silence selectively genes that cause or contribute to disease. Using our proprietary RNAi technology platform called GalXC™, Dicerna is committed to developing RNAi-based therapies with the potential to treat both rare and more prevalent diseases. By silencing disease-causing genes, Dicerna’s GalXC platform has the potential to address conditions that are difficult to treat with other modalities. Initially focused on hepatocytes, Dicerna has continued to innovate and is exploring new applications of its RNAi technology beyond the liver, targeting additional tissues and enabling new therapeutic applications. In addition to our own pipeline of core discovery and clinical candidates, Dicerna has established collaborative relationships with some of the world’s leading pharmaceutical companies, including Novo Nordisk A/S, Roche, Eli Lilly and Company, Alexion Pharmaceuticals, Inc., Boehringer Ingelheim International GmbH and Alnylam Pharmaceuticals, Inc. Between Dicerna and our collaborative partners, we currently have more than 20 active discovery, preclinical or clinical programs focused on rare, cardiometabolic, viral, chronic liver and complement-mediated diseases, as well as neurodegeneration and pain. At Dicerna, our mission is to interfere – to silence genes, to fight disease, to restore health. For more information, please visit www.dicerna.com.

Cautionary Note on Forward-Looking Statements

This press release includes forward-looking statements pertaining to the Company’s planned participation at investor conferences, which may include discussion of the Company’s business and operations, including the discovery, development and commercialization of our product candidates and technology platform, and the therapeutic potential thereof, the success of our collaborations with partners and any potential future collaborations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Applicable risks and uncertainties include those relating to our preclinical research and clinical programs and other risks identified under the heading “Risk Factors” included in our most recent Form 10-Q filing and in other future filings with the SEC. The forward-looking statements contained in this press release reflect Dicerna’s current views with respect to future events, and Dicerna does not undertake and specifically disclaims any obligation to update any forward-looking statements.

GalXC™ is a trademark of Dicerna Pharmaceuticals, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005841/en/

Media:

Amy Trevvett

+1 617-612-6253

[email protected]

Investors:

Lauren Stival

+1 617-514-0461

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Research Finance Genetics Banking Clinical Trials Professional Services Biotechnology Pharmaceutical Health Science

MEDIA:

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November 11, 2020 4:08 pm

Atlas Financial Holdings Announces Sale of Large Paratransit Account Renewal Rights to National Interstate Insurance Company; Reiterates Extension of Small Account Underwriting Agreement

Atlas Financial Holdings Announces Sale of Large Paratransit Account Renewal Rights to National Interstate Insurance Company; Reiterates Extension of Small Account Underwriting Agreement

CHICAGO–(BUSINESS WIRE)–Atlas Financial Holdings, Inc. (OTC: AFHIF) (“Atlas” or the “Company”) today announced that further to the extension and expansion of its agreement with National Interstate Insurance Company (“NATL”), which was previously announced in July 2020, the Company and NATL executed a renewal rights agreement with respect to paratransit accounts with eight or more vehicles (“Large Paratransit Accounts”). Pursuant to this agreement, the Company and NATL will work together to transition the handling of Large Paratransit Accounts to NATL during the next year. The Company received $2.9 million as consideration from NATL for this transaction.

Under the previously announced expanded agreement, the Company’s managing general agency (“MGA”) subsidiary, Anchor Group Management, Inc. (“AGMI”), will continue to manage owner operators and fleets with seven or less vehicles (“Small Paratransit Accounts”) until at least August 2021. If the Small Paratransit Account program is not extended further, NATL continues to retain the option to purchase renewal rights on this segment at the expiration of the agreement period. Under the terms of the agreements, the Company will not compete with NATL for Large Paratransit Accounts for a period of three years following the Large Paratransit Account renewal rights transaction. Other previously disclosed material terms of the agreements between the parties remains unchanged.

Management Commentary

Scott D. Wollney, Atlas’ President & CEO said: “We are very pleased with this transaction as well as our continuing relationship with National Interstate, which we believe demonstrates the value that our MGA focused strategy delivers to our business partners, shareholders and other stakeholders. Our team has been working very effectively with the National Interstate team and is extremely pleased to be able to continue offering specialized insurance programs to smaller accounts on a go-forward basis. National Interstate continues to be an extremely valuable partner and we are proud to be working together to support paratransit operators providing essential rides across the U.S.”

Mr. Wollney continued, “Atlas and AGMI’s focus has centered around owner operators and smaller accounts and we believe the ongoing relationship confirms the core competency we’ve developed in this unique area. It is consistent with our emphasis being placed on generating EBITDA at the MGA level while endeavoring to reduce risk and capital requirements related to traditional primary insurance company operations. We will continue to pursue opportunities to leverage this expertise in other areas of specialty commercial auto as a managing agent as well.”

Piper Sandler & Co. acted as exclusive financial advisor to Atlas in connection with this transaction.

About Atlas

The primary business of Atlas is commercial automobile insurance in the United States, with a niche market orientation and focus on insurance for the “light” commercial automobile sector including taxi cabs, nonemergency paratransit, limousine/livery (including full-time transportation network company drivers) and business auto.

The Company’s strategy is focused on leveraging its managing general agency operation (“AGMI”) and its insuretech digital platform (“optOn”). For more information about Atlas, please visit www.atlas-fin.com , www.agmiinsurance.com , and www.getopton.com.

Forward-Looking Statements

This release includes forward-looking statements regarding Atlas and its insurance subsidiaries and businesses. Such statements are based on the current expectations of the management of each entity. The words “anticipate,” “expect,” “believe,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or similar words are used to identify such forward looking information. 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 the Companies, including risks regarding the insurance industry, economic factors and the equity markets generally and the risk factors discussed in the “Risk Factors” section of the Company’s 2018 Annual Report on Form 10-K. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Atlas and its subsidiaries undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005831/en/

At the Company

Atlas Financial Holdings, Inc.

Scott Wollney, CEO

847-700-8600

[email protected]

www.atlas-fin.com

Investor Relations

The Equity Group Inc.

Adam Prior, Senior Vice President

212-836-9606

[email protected]

www.theequitygroup.com

KEYWORDS: Illinois United States North America

INDUSTRY KEYWORDS: Insurance Finance Automotive General Automotive Banking Professional Services Other Automotive Other Professional Services Fleet Management

MEDIA:

November 11, 2020 4:08 pm

Resources Connection, Inc. to Participate in the JP Morgan Ultimate Services Investor Conference

IRVINE, Calif.–(BUSINESS WIRE)–
Resources Connection, Inc. (the “Company”) (NASDAQ: RGP), a global consulting firm, today announced that Chief Executive Officer Kate Duchene, President & Chief Operating Officer Timothy Brackney, and Chief Financial Officer Jennifer Ryu will be participating in JP Morgan’s Ultimate Services Investor Conference on Thursday, November 19, 2020, hosting investor meetings throughout the day.

About RGP

RGP is a global consulting firm that enables rapid business outcomes by bringing together the right people to create transformative change. As a human capital partner for our clients, we specialize in solving today’s most pressing business problems across the enterprise in the areas of transactions, regulations, and transformations. Our engagements are designed to leverage human connection and collaboration to deliver practical solutions and more impactful results that power our clients, consultants and partners’ success.

RGP was founded in 1996 to help finance executives with operational needs and special projects created by workforce gaps. Our first-to-market, agile human capital model disrupted the professional services industry at a time when traditional talent models prevailed. Today’s new ecosystem for work embraces our founding principle – quickly align the right resource for the work at hand with a premium placed on value, efficiency and ease of use.

Our pioneering approach to workforce strategy uniquely positions us to support our clients on their transformation journeys. We are their partner in delivering on the future of work. With approximately 3,300 professionals, we annually engage with over 2,400 clients around the world from more than 60 practice offices and multiple virtual offices. Headquartered in Irvine, California, RGP is proud to have served 88 of the Fortune 100.

The Company is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. (RGP-F)

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005848/en/

Investor Contact:

Jenn Ryu, Chief Financial Officer

(US+) 1-714-430-6500

[email protected]

Media Contact:

Michael Sitrick, CEO Sitrick Group

(US+) 1-310-788-2850

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Consulting Professional Services Human Resources

MEDIA:

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November 11, 2020 4:08 pm

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		$	—

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005846/en/

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:

November 11, 2020 4:08 pm

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201111005839/en/

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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