Market Newsdesk

November 12, 2020 5:11 pm

Dundee Precious Metals Declares Dividend

TORONTO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Dundee Precious Metals Inc. (TSX: DPM) (“DPM” of “the Company”) today announced that its Board of Directors has declared a fourth quarter dividend of US$0.02 per common share.

The dividend is payable on January 15, 2021 to shareholders of record as at 5:00 p.m. Toronto local time on December 31, 2020 and qualifies as an “eligible dividend” for Canadian income tax purposes.

Shareholders may elect to receive their dividend in US or Canadian dollars by contacting their broker or, where applicable, Computershare Investor Services Inc., the Company’s registrar and transfer agent. If no election is made, residents of Canada will be paid in Canadian dollars and non-residents of Canada will be paid U.S. dollars. Dividends to be paid in Canadian dollars will be converted to Canadian dollars using the spot exchange rate on January 8, 2021.

Dividends paid to shareholders that are non-residents of Canada are generally subject to withholding tax unless reduced in accordance with the provisions of an applicable tax treaty.

About Dundee Precious Metals

Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition of mineral properties, exploration, development, mining and processing of precious metals. The Company’s operating assets include the Chelopech operation, which produces a gold-copper concentrate containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria; the Ada Tepe operation, which produces a gold concentrate containing gold and silver, located in southern Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold and exploration properties located in Canada and Serbia, and its 9.4% interest in Sabina Gold & Silver Corp and 19.4% interest in INV Metals Inc.

For further information please contact:

David Rae

President and Chief Executive Officer
Tel: (416) 365-5092
[email protected]

Hume Kyle

Executive Vice President and Chief Financial Officer
Tel: (416) 365-5091
[email protected]

Jennifer Cameron

Director, Investor Relations
Tel: (416) 219-6177
[email protected]

November 12, 2020 5:11 pm

Dundee Precious Metals Announces Third Quarter 2020 Results; Delivered Strong Operating Performance and Generated Record Financial Results

(All monetary figures are expressed in U.S. dollars unless otherwise stated)

TORONTO, Nov. 12, 2020 (GLOBE NEWSWIRE) — Dundee Precious Metals Inc. (TSX: DPM)(“DPM” or the “Company”) today announced its operating and financial results for the third quarter of 2020.

Third
Quarter
F
inancial and Operating
Highlights
:

Strong m

etal

s

production
– Produced 79,844 ounces of gold in concentrate, as Ada Tepe and Chelopech continued to deliver strong production and performance. Copper production was 9.2 million pounds;
Solid smelter performance

–
Throughput of 55,880 tonnes at Tsumeb, despite 15 days of scheduled maintenance during the quarter;
Strong cost performance at all operations

–
Reported an all-in sustaining cost per ounce of gold⁽¹⁾ of $640 and a cash cost per tonne of complex concentrate smelted⁽¹⁾ of $407;
Record quarterly free cash flow generation –
Generated $42.3 million in cash flow from operating activities and a record $59.0 million of free cash flow⁽¹⁾;
Growing earnings

– Reported record net earnings attributable to common shareholders of $53.7 million, reflecting strong gold production combined with higher gold prices. Reported record adjusted net earnings⁽¹⁾ of $51.3 million or $0.28 per share;
Strengthened f

inancial position

– Ended the quarter with $252.4 million of cash resources, comprised of $102.4 million in cash and an undrawn $150 million long-term revolving credit facility (“RCF”), as well as an investment portfolio of $75.6 million; and
Well-positioned to deliver 2020 guidance –
Tracking towards the upper end of guidance for gold production and lowered 2020 all-in sustaining cost guidance range to $650 to $720 per ounce.

“Our operations continued to perform extremely well during the third quarter, delivering higher gold production and a lower all-in sustaining cost year-over-year. Our strong operating results, combined with higher gold prices, generated another quarter of record net earnings and free cash flow as we continue to demonstrate the significant potential of our operating assets,” said David Rae, President and CEO.

“Notably, we have significantly reduced our all-in sustaining cost guidance for the year, and we continue to track towards the upper end of our gold production guidance. Our performance is a credit to the outstanding efforts undertaken at each of our sites to effectively manage the challenges of the COVID-19 pandemic while prioritizing the health and safety of our workforce and host communities.”

Key Financial and Operati
o
n
al
Highlights

$ millions, except where noted Ended Sept ember 30,	Three Months		Nine Months
	2020	2019	2020	2019
Revenue	15 8.0	94.9	46 6.7	279.4
Cost of sales	82.3	71.8	257.4	208.2
Earnings before income taxes	5 9.0	11.6	1 60.8	28.3
Net earnings attributable to common shareholders	5 3.7	7.3	14 5.7	21.8
Basic earnings per share	0. 30	0.04	0.8 1	0.12
Adjusted EBITDA⁽¹⁾	8 4.6	32.5	240.8	83.2
Adjusted net earnings⁽¹⁾	51.3	4.2	14 3.2	18.4
Adjusted basic earnings per share⁽¹⁾	0.2 8	0.02	0. 7 9	0.10
Cash provided from operating activities	42. 3	22.7	127. 2	46.5
Free cash flow⁽¹⁾	5 9.0	21.0	1 6 6.6	55.4
Metals contained in concentrate produced:
Gold (ounces)
Chelopech	49,823	40,328	141,542	130,436
Ada Tepe	30,021	25,314	92,630	30,665
Total gold in concentrate produced	79,84 4	65,642	234,172	161,101
Copper (‘000s pounds)	9,22 4	10,142	27,98 3	27,219
Silver (ounces)	48,50 7	55,842	156,559	122,587
Payable metals in concentrate sold:
Gold (ounces)
Chelopech	37,877	28,054	113,365	109,037
Ada Tepe	31,297	10,094	94,901	10,094
Total payable gold in concentrate sold	69,174	38,148	208,266	119,131
Copper (‘000s pounds)	7,560	6,604	25,623	23,071
Silver (ounces)	40,596	28,987	140,514	91,947
Cash cost per tonne of ore processed⁽¹⁾:
Chelopech	38.01	35.28	37.32	35.11
Ada Tepe	34.00	50.62	39.40	49.51
All-in sustaining cost per ounce of gold⁽¹⁾	6 40	740	65 5	755
Complex concentrate smelted at Tsumeb (tonnes)	55,880	42,186	179,406	166,675
Cash cost per tonne of complex concentrate smelted at Tsumeb⁽¹⁾	40 7	516	36 9	408

1) Adjusted EBITDA; adjusted net earnings; adjusted basic earnings per share; free cash flow; cash cost per tonne of ore processed; all-in sustaining cost per ounce of gold; and cash cost per tonne of complex concentrate smelted at Tsumeb are not defined measures under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A (as defined below) for more details, including reconciliations to IFRS measures.

Third Quarter Operating Highlights

In the third quarter of 2020, the Company achieved record net earnings and free cash flow reflecting continued strong operating performance at Chelopech and Ada Tepe, combined with strong gold prices. Ada Tepe continued to deliver impressive performance, with production in the period higher than planned as a result of higher gold grades and higher volumes of ore treated. Chelopech continued its consistent track record in the third quarter, with gold production higher than expected due to higher gold recoveries in pyrite concentrate. Chelopech and Ada Tepe are on track to achieve the upper end of their respective 2020 production guidance. Tsumeb also had a strong quarter, processing 55,880 tonnes of complex concentrate, despite 15 days of scheduled maintenance during the period, and remains on track to achieve its 2020 production guidance.

Net Earnings and Adjusted Net Earnings

Net earnings attributable to common shareholders were $53.7 million ($0.30 per share) and $145.7 million ($0.81 per share) for the third quarter and first nine months of 2020, respectively, compared to $7.3 million ($0.04 per share) and $21.8 million ($0.12 per share) for the same periods in 2019.

Adjusted net earnings in the third quarter and first nine months of 2020 were $51.3 million ($0.28 per share) and $143.2 million ($0.79 per share), respectively, compared to $4.2 million ($0.02 per share) and $18.4 million ($0.10 per share) for the corresponding periods in 2019.
These increases were due primarily to higher volumes of gold sold, higher realized gold prices and the favourable impact of a stronger U.S. dollar relative to the ZAR, partially offset by higher depreciation.

Adjusted EBITDA

Adjusted EBITDA⁽¹⁾ in the third quarter and first nine months of 2020 was $84.6 and $240.8 million, respectively, compared to $32.5 million and $83.2 million in the corresponding periods in 2019, reflecting higher volumes of gold sold, higher realized gold prices and the favourable impact of a stronger U.S. dollar relative to the ZAR.

Production, Delivery and Cost Measures

Gold contained in concentrate produced in the third quarter of 2020 increased by 22% to 79,844 ounces, relative to the corresponding period in 2019, due primarily to higher gold grades and recoveries at Chelopech and higher volumes of ore processed at Ada Tepe, partially offset by lower gold grades at Ada Tepe. Ada Tepe achieved commercial production in June 2019 and full design capacity in the third quarter of 2019. Copper production in the third quarter of 2020 decreased by 9% to 9.2 million pounds, relative to the corresponding period in 2019, due primarily to lower copper grades and recoveries.

Gold contained in concentrate produced in the first nine months of 2020 increased by 45% to 234,172 ounces, relative to the corresponding period in 2019, due primarily to additional production from Ada Tepe and higher gold grades at Chelopech. Copper production in the first nine months of 2020 increased by 3% to 28.0 million pounds, relative to the corresponding period in 2019, due primarily to higher copper grades, partially offset by lower copper recoveries.

Payable gold in concentrate sold in the third quarter of 2020 increased by 81% to 69,174 ounces, relative to the corresponding period in 2019, due primarily to increased concentrate deliveries combined with higher gold production as a result of higher grades. Payable copper in concentrate sold in the third quarter of 2020 of 7.5 million pounds was 14% higher than the corresponding period in 2019 due primarily to the timing of gold-copper concentrate deliveries from Chelopech.

Payable gold in concentrate sold in the first nine months of 2020 increased by 75% to 208,266 ounces, relative to the corresponding period in 2019, due primarily to higher deliveries from Ada Tepe. Payable copper in concentrate sold in the first nine months of 2020 of 25.6 million pounds was 11% higher than the corresponding period in 2019 due primarily to the timing of gold-copper concentrate deliveries from Chelopech and higher copper grades, partially offset by lower copper recoveries.

Complex concentrate smelted during the third quarter of 2020 of 55,880 tonnes was 32% higher than the corresponding period in 2019. This reflects 15 days of scheduled maintenance to replace certain equipment in the offgas system during the period, compared with 27 days of maintenance in the same period in 2019. Complex concentrate smelted in the first nine months of 2020 of 179,406 tonnes was 8% higher than the corresponding period in 2019 due primarily to a steadier state of operations in 2020. No additional significant maintenance is planned prior to the Ausmelt furnace reline, which is currently scheduled to occur in the first quarter of 2021.

A table comparing production, delivery and cash cost measures for the third quarter and first nine months of 2020 to 2020 guidance can be found on page 7 of this news release.

Cost
M
easures

Cost of sales in the third quarter and first nine months of 2020 of $82.3 million and $257.4 million, respectively, was $10.5 million and $49.2 million higher than the corresponding periods in 2019 due primarily to increased deliveries from Ada Tepe and Chelopech and higher depreciation from Ada Tepe following the start of commercial production in June 2019. This was partially offset by the favourable impact of a stronger U.S. dollar relative to the ZAR and lower depreciation at Tsumeb as a result of an impairment charge taken in the fourth quarter of 2019.

All-in sustaining cost per ounce of gold in the third quarter and first nine months of 2020 of $640 and $655, respectively, was 14% and 13% lower than the corresponding periods in 2019. This was due primarily to low cost production from Ada Tepe and higher by-product credits, partially offset by higher treatment charges for Chelopech, higher general and administrative expenses as a result of higher share-based compensation, and higher cash outflows for sustaining capital expenditures.

Cash cost per tonne of complex concentrate smelted in the third quarter and first nine months of 2020 of $407 and $369, respectively, was 21% and 10% lower than the corresponding periods in 2019 due primarily to higher volumes of complex concentrate smelted, the favourable impact of a weaker ZAR relative to the U.S. dollar and higher acid deliveries, partially offset by lower acid prices.

Cash provided from operating activities

Cash provided from operating activities in the third quarter and first nine months of 2020 of $42.3 million and $127.2 million, respectively, compared with $22.7 million and $46.5 million in the corresponding periods in 2019, is not reflective of the significant increase in earnings in 2020 as a result of increases in non-cash working capital of $27.9 million and $67.0 million in the third quarter and first nine months of 2020, respectively. The third quarter increase was due primarily to the timing of a $25.0 million customer receipt that came in just after quarter-end. The increase for the first nine months was also impacted by longer settlement terms on Ada Tepe sales, increased deliveries and higher gold prices.

In addition, during the third quarter and first nine months of 2020, Ada Tepe delivered 6,992 ounces and 27,094 ounces of gold, respectively, pursuant to a prepaid forward gold sales arrangement resulting in $9.6 million and $37.1 million of deferred revenue being recognized in revenue during the third quarter and first nine months of 2020, respectively, with no corresponding impact on cash as these deliveries were in partial satisfaction of the $50.0 million of upfront proceeds received in 2016. The Company has 6,993 ounces of gold remaining to be delivered under this arrangement, which will be completed during the fourth quarter of 2020.

For a detailed discussion on the factors affecting cash provided from operating activities, refer to the “Liquidity and Capital Resources” section contained in the MD&A.

Free Cash Flow

Free cash flow in the third quarter and first nine months of 2020 was $59.0 million and $166.6 million, respectively, compared to $21.0 million and $55.4 million in the corresponding periods in 2019. These increases were due primarily to higher volumes of gold sold, higher realized gold prices and the favourable impact of a stronger U.S. dollar relative to the ZAR, partially offset by higher cash outflows for sustaining capital expenditures and the impact of the prepaid forward gold sales arrangement.

Capital
E
xpenditures

Capital expenditures incurred during the third quarter and first nine months of 2020 were $13.2 million and $35.5 million, respectively, compared to $13.3 million and $53.7 million in the corresponding periods in 2019.

Growth capital expenditures⁽¹⁾ incurred during the third quarter and first nine months of 2020 were $1.0 million and $5.2 million, respectively, compared to $2.3 million and $35.0 million in the corresponding periods in 2019. These decreases were related principally to the construction of the Ada Tepe gold mine, which was completed in 2019.

Sustaining capital expenditures⁽¹⁾ incurred during the third quarter and first nine months of 2020 were $12.2 million and $30.3 million, respectively, in line with guidance, compared to $11.0 million and $18.7 million in the corresponding periods in 2019. The year-over-year increase was due primarily to spending at Ada Tepe, which commenced commercial production in June 2019, and the work on the tailings management facility at Chelopech.

Timok Gold Project, Serbia
(the “Timok gold project”)

Following encouraging results from the optimization work completed in 2019, the Company initiated a pre-feasibility study (“PFS”) for the Timok gold project, which will now focus on the oxide portion of the Mineral Resource. Additional potential upside from the sulphide portion of the Mineral Resource will require additional variability testwork and will be considered as part of a potential feasibility study. The PFS is progressing well and is on track for completion in the fourth quarter of 2020 with a release in the first quarter of 2021.

Exploration

At Chelopech, an intensive diamond drilling program commenced in the third quarter of 2020 at the West Shaft prospect, located approximately one kilometre south-west of the Chelopech mine. This was initiated following an intercept of significant high sulphidation Au-Cu mineralization in June 2020, as part of near mine scout drilling programs. Additionally, deep directional drilling is continuing at the Wedge prospect, with a focus on testing more conceptual targets in proximity to the Chelopech mine.

As part of sustained efforts to support a mine life extension at Ada Tepe, mapping, core re-logging and conceptual modelling led to the identification of additional near-mine exploration targets. A significant drilling program is planned in the fourth quarter of 2020 to test these areas. A target delineation drilling program was completed at Chatal Kaya, within the Chiriite exploration license, to ascertain the along strike and down-dip extents of the epithermal vein hosted gold mineralization.

In Serbia, targeted delineation drilling of oxide mineralization proximal to Bigar Hill, the main deposit of the Timok gold project, has been successful at identifying additional shallow oxide gold mineralization at the Chocolate prospect. Further infill and target delineation drilling programs are scheduled to be completed in the fourth quarter of 2020.

Financial
P
osition
and Liquidity

DPM ended the third quarter of 2020 with a cash position of $102.4 million, $75.6 million of investments, comprised primarily of its 9.4% interest in Sabina Gold and Silver Corp. (“Sabina”) and 19.4% equity interest in INV Metals Inc. (“INV”), and $150.0 million of undrawn capacity under its RCF.

Capital
A
llocation and
Declaration of
D
ividend

As part of its strategy, the Company adheres to a disciplined capital allocation framework that is based on three fundamental considerations – balance sheet strength, reinvestment in the business, and the return of capital to shareholders. With Ade Tepe contributing its first full year of production since its successful commissioning and ramp-up in 2019, 2020 marks the beginning of a period of significant free cash flow generation, which will be used to further strengthen DPM’s balance sheet, reinvest in the business, and return cash to shareholders by way of dividends.

On November 12, 2020, the Company declared a dividend of $0.02 per common share payable on January 15, 2021 to shareholders of record on December 31, 2020, resulting in an aggregate of $0.08 per common share of dividends being declared in 2020.

The Company’s dividend has been set at a level that is considered to be sustainable based on the Company’s free cash flow outlook and is expected to allow the Company to build additional balance sheet strength to support further growth, a key element of DPM’s strategy. The declaration, amount and timing of any future dividend are at the sole discretion of the Board of Directors and will be assessed based on the Company’s capital allocation framework, having regard for the Company’s financial position, overall market conditions, and its outlook for sustainable free cash flow, capital requirements, and other factors considered relevant by the Board of Directors.

Response to Coronavirus (“COVID-19”)

To date, as a result of the proactive actions being taken within the regions in which we operate and by personnel at each of our sites, the Company has not experienced any material disruptions to its operations as a result of the COVID-19 pandemic. The Company’s Chelopech and Ada Tepe mines in Bulgaria continue to operate at full capacity and have not experienced any disruptions to their operations.

As previously reported, the Tsumeb smelter in Namibia curtailed its operations by shutting down ancillary plants for 30 days during the month of April in response to a government directive to the natural resources sector aimed at limiting staffing levels. Full operations resumed in May with ongoing management of the number of employees and contractors working at site and continued observance of the COVID-19 controls that have been established across all sites. The smelter remains on track to achieve 2020 annual guidance.

To date, MineRP continues to operate with minimal impact on its ability to service existing customers remotely, although, there have been some delays starting up new projects and converting a growing customer pipeline as customers satisfy themselves that implementation can be effectively executed remotely. This is particularly evident in certain regions where the impact of COVID-19 has been higher as new business has lagged in these regions.

On-Track to Meet
or Beat
2020 Guidance

DPM’s 2020 production guidance remains unchanged from the guidance issued in February 2020, including expected gold production of 257,000 to 299,000 ounces and 35 to 40 million pounds of copper. Based on the strong operating performance achieved in the first nine months of 2020, annual production and deliveries at Chelopech and Ada Tepe are expected to be at the upper end of the 2020 guidance. As a result, the all-in sustaining cost guidance was reduced to a range of $650 to $720 per ounce of gold from the previously-issued guidance of $700 to $780 per ounce of gold. Tsumeb remains on track to achieve its 2020 production guidance and is expected to achieve the lower end of its 2020 cost guidance due primarily to the weakening of the ZAR relative to the U.S. dollar.

The Company’s outlook for 2021 and 2022 remains unchanged from the outlook issued in February 2020, except for the 2021 outlook for Ada Tepe’s sustaining capital expenditures, which has been increased to a range of $15 million to $19 million, from $4 million to $5 million. This increase is due primarily to accelerating grade control drilling, which was previously planned over several years and treated as an operating cost, in order to provide large representative and high quality samples for better grade control and mine planning over the life of mine.

For additional information regarding the Company’s detailed guidance for 2020, please refer to the “Three-Year Outlook” section of the MD&A.

(1) Adjusted net
earnings
,
adjusted basic
earnings
per share, adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”), all-in sustaining cost per ounce of gold, cash
cost per tonne of complex concentrate smelted
at Tsumeb
, net of by-product credits, free cash flow,
and growth and sustaining capital expenditures have no standardized meaning under International Financial Reporting Standards (“IFRS”). Presenting these measures from period to period helps management and investors evaluate earnings and cash flow trends more readily in comparison with results from prior periods. Refer to the “Non-GAAP Financial Measures” section of the
M
anagement’s
D
iscussion and
A
nalysis for the three
and
nine months
ended
September 30
,
2020
(the “
MD&A
”)
for further discussion of these items, including reconciliations to IFRS measures
.

Selected
Production, Delivery and Cost Measures
and Guidance

	Q 3 2020				YTD September 2020				2020 G uidance ⁽ ¹⁾
	Chelopech	Ada Tepe	Tsumeb	Consolidated	Chelopech	Ada Tepe	Tsumeb	Consolidated	2020 G uidance ⁽ ¹⁾
Ore processed (‘000s tonnes)	558.4	219.3	–	777.7	1,660.2	677.3	–	2,337.5	2,855 – 3,092
Metals contained in concentrate produced
Gold (‘000s ounces)	49.8	30.0	–	79.8	141.5	92.6	–	234.1	257 – 299
Copper (million pounds)	9.2	–	–	9.2	28.0	–	–	28.0	35 – 40
Payable metals in concentrate sold
Gold (‘000s ounces)	37.9	31.3	–	69.2	113.4	94.9	–	208.3	229 – 267
Copper (million pounds)	7.5	–	–	7.5	25.6	–	–	25.6	33 – 38
All-in sustaining cost per ounce of gold ⁽ ² ⁾	–	–	–	640	–	–	–	655	650 – 720
Complex concentrate smelted (‘000s tonnes)	–	–	55.9	55.9	–	–	179.4	179.4	230 – 265
Cash cost per tonne of complex concentrate smelted ⁽ ² ⁾	–	–	407	407	–	–	369	369	– 450

1) As disclosed in the MD&A and available at www.sedar.comandwww.dundeeprecious.com
2) All-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted arenot defined measures under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for reconciliations to IFRS measures.

This news release and DPM’s unaudited condensed interim consolidated financial statements and MD&A for the three and nine months ended September 30, 2020 are posted on the Company’s website at www.dundeeprecious.com and have been filed on SEDAR at www.sedar.com.

Qualified Person

The technical and scientific information in this news release, with respect to the Company’s material mineral projects, has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves, and has been reviewed and approved by Ross Overall, B.Sc. (Applied Geology), Corporate Mineral Resource Manager of DPM, who is a Qualified Person as defined under NI 43-101, and who is not independent of the Company.

Third quarter
2020
Results

On Friday, November 13, 2020 at 9:00 AM EST, DPM will host a conference call and audio webcast to discuss the results, followed by a question-and-answer session. Participants are encouraged to dial into the call 15 minutes before its scheduled start time or to join via the audio webcast to reduce hold time in advance of the call.

The call-in numbers and webcast details are as follows:

Date:	Friday, November 13, 2020
Time:	9:00 AM EST
Webcast:	https://edge.media-server.com/mmc/p/3pmxch77
Canada and USA Toll Free:	1-844-402-0878
International:	+1-478-219-0512
Passcode:	8269926

Replay:	1-855-859-2056
Outside Canada or USA:	1-404-537-3406
Replay Passcode:	8269926
Replay Available Until:	7 days following the call

About Dundee Precious Metals

Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition of mineral properties, exploration, development, mining and processing of precious metals. The Company’s operating assets include the Chelopech operation, which produces a gold-copper concentrate containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria; the Ada Tepe operations, which produces a gold concentrate containing gold and silver, located in southern Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold and exploration properties located in Canada, Serbia and Ecuador, including its 9.4% interest in Sabina and 19.4% interest in INV.

Cautionary Note Regarding Forward
Looking Statements

This news release contains “forward looking statements” or “forward looking information” (collectively, “Forward Looking Statements”) that involve a number of risks and uncertainties. Forward Looking Statements are statements that are not historical facts and are generally, but not always, identified by the use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or that state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The Forward Looking Statements in this news release relate to, among other things: measures the Company is undertaking in response to the COVID-19 outbreak, including its impacts on the Company’s global supply chains, the level of and duration of reductions or curtailments in operating levels at any of the Company’s operations or in its exploration and development activities; expected cash flow; the price of gold, copper, silver and acid, toll rates, metals exposure and stockpile interest deductions at Tsumeb; the estimation of Mineral Reserves and Mineral Resources and the realization of such mineral estimates; estimated capital costs, operating costs and other financial metrics, including those set out in the three-year outlook provided by the Company; currency fluctuations; the impact of any impairment charges; the processing of Chelopech concentrate; timing of further optimization work at Tsumeb; potential benefits of any upgrades and/or expansion, including the planned rotary furnace installation, at the Tsumeb smelter; results of economic studies; success of exploration activities; achieving the results set out in any preliminary economic assessment (the “PEA”); the commencement, completion and results of the prefeasibility study for the Timok gold project (the “PFS”); success of permitting activities; permitting timelines; success of investments, including potential acquisitions; requirements for additional capital; government regulation of mining and smelting operations; environmental risks; reclamation expenses; potential or anticipated outcome of title disputes or claims; benefits of digital initiatives; the payment of dividends; the timing and number of common shares of the Company that may be purchased pursuant to the Company’s normal course issuer bid (the “NCIB”); and timing and possible outcome of pending litigation, if any. Forward Looking Statements are based on certain key assumptions and the opinions and estimates of management and Qualified Person (in the case of technical and scientific information), as of the date such statements are made, and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any other future results, performance or achievements expressed or implied by the Forward Looking Statements. In addition to factors already discussed in this news release, such factors include, among others: risks relating to the Company’s business generally, the impact of global pandemics, including changes to the Company’s supply chain, product shortages, delivery and shipping issues, closure and/or failure of plant, equipment or processes to operate as anticipated, employees and contractors becoming infected, lost work hours and labour force shortages; fluctuations in metal and acid prices, toll rates and foreign exchange rates; possible variations in ore grade and recovery rates; inherent uncertainties in respect of conclusions of economic evaluations and economic studies, including the PEA and the PFS; changes in project parameters, including schedule and budget, as plans continue to be refined; uncertainties with respect to actual results of current exploration activities; uncertainties and risks inherent to developing and commissioning new mines into production, which may be subject to unforeseen delays; uncertainties inherent with conducting business in foreign jurisdictions where corruption, civil unrest, political instability and uncertainties with the rule of law may impact the Company’s activities; limitations on insurance coverage; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; actual results of current and planned reclamation activities; opposition by social and non-governmental organizations to mining projects and smelting operations; unanticipated title disputes; claims or litigation; the failure to realize on the potential benefits of any upgrades and/or expansion, including the planned rotary furnace installation, at the Tsumeb smelter; cyber-attacks and other cybersecurity risks; there being no assurance that the Company will purchase additional common shares of the Company under the NCIB; risks related to the implementation, cost and realization of benefits from digital initiatives; failure to realize projected financial results from MineRP; risks related to operating a technology business reliant on the ownership, protection and ongoing development of key intellectual properties; as well as those risk factors discussed or referred to in the Company’s MD&A under the heading “Risks and Uncertainties” and under the heading “Cautionary Note Regarding Forward Looking Statements” which include further details on material assumptions used to develop such Forward Looking Statements and material risk factors that could cause actual results to differ materially from Forward Looking Statements, and other documents (including without limitation the Company’s most recent Annual Information Form) filed from time to time with the securities regulatory authorities in all provinces and territories of Canada and available on SEDAR at www.sedar.com.

The reader has been cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward Looking Statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that Forward Looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company’s Forward Looking Statements reflect current expectations regarding future events and speak only as of the date hereof. Other than as it may be required by law, the Company undertakes no obligation to update Forward Looking Statements if circumstances or management’s estimates or opinions should change. Accordingly, readers are cautioned not to place undue reliance on Forward Looking Statements.

For further information, please contact:

DUNDEE PRECIOUS METALS INC.

David Rae

President and Chief Executive Officer
Tel: (416) 365-5092
[email protected]

Hume Kyle

Executive Vice President and Chief Financial Officer
Tel: (416) 365-5091
[email protected]

Jennifer Cameron

Director, Investor Relations
Tel: (416) 219-6177
[email protected]

November 12, 2020 5:10 pm

Transcontinental Realty Investors, Inc. Reports Earnings for Q3 2020

Transcontinental Realty Investors, Inc. Reports Earnings for Q3 2020

DALLAS–(BUSINESS WIRE)–
Transcontinental Realty Investors, Inc. (NYSE: TCI), is reporting its results of operations for the quarter ended September 30, 2020. For the three months ended September 30, 2020, the Company reported a net income applicable to common shares of $7.7 million or $0.88 per diluted share, compared to a net loss applicable to common shares of $7.8 million or $0.89 per diluted share for the same period in 2019.

COVID-19

The Company continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business. COVID-19 did not have a significant impact on the Company’s results of operations or cash flows during the three months ended September 30, 2020.

The Company collected approximately 96% of its second quarter rents, comprised of approximately 95% from multi-family tenants and approximately 97% from office tenants.
The Company did not grant any abatements or significant deferments of rents.
Occupancy remains stable at 91% at September 30, 2020 and 2019.
The Company continued to obtain positive leasing spreads for new leases and renewals at it properties.
Ongoing development projects continued during the quarter unabated without work stoppages. In addition, the Company is evaluating several new development projects.

The future impact of COVID-19 on the Company’s business and financial activities will depend on future developments, which at this stage are unpredictable considering the fluctuations of COVID-19 outbreaks and the resulting changes in the markets.

Financial Results

Rental revenues were $11.5 million for the three months ended September 30, 2020, compared to $11.4 million for the three months ended September 30, 2019. For 2020, we generated revenues of $7.8 million and $3.7 million from our commercial and multifamily segments respectively.

Net operating (loss) was ($1.5) million for the three months ended September 30, 2020, compared to $0.4 million for the same period in 2019. The $1.9 million increase in net operating loss is primarily due to the placement in service of two new multifamily apartment communities in 2020. Operating expense of new properties generally exceed their rental revenues during initial lease-up.

Interest income was $4.3 million for three months ended September 30, 2020, compared to $5.2 million for the same period in 2019. The decrease of $0.9 million in interest income was primarily due to collection on notes receivable in 2020.

Interest expense was to $6.3 million for the three months ended September 30, 2020, compared to $8.0 million for the same period in 2019. The $1.7 million decrease in interest expense was primarily due to the refinancing of the mortgage note payable on Browning Place in 2019.

Loss on foreign currency transactions was a loss of $1.5 million for the three months ended September 30, 2020 as compared to $5.2 million for the same period in 2019. The decrease is foreign currency loss was due a decrease in the exchange rate from U.S. Dollars to the Israel Shekel offset in part by a reduction in the bonds outstanding.

Gain on sale or write-down of assets increased $7.2 million for the three months ended September 30, 2020, compared the same period in 2019. The increase is primarily due to the sale Bridgeview Plaza for $5.3 million, resulting in a gain of $4.8 million in 2020, and the sale of Farnham Park Apartments for $13.3 million, resulting in a gain of $2.7 million.

About Transcontinental Realty Investors, Inc.

Transcontinental Realty Investors, Inc., a Dallas-based real estate investment company, holds a diverse portfolio of equity real estate located across the U.S., including apartments, office buildings, shopping centers, and developed and undeveloped land. The Company invests in real estate through direct ownership, leases and partnerships and invests in mortgage loans on real estate. For more information, visit the Company’s website at www.transconrealty-invest.com.

TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
Revenues:
Rental revenues (including $262 and $212 for the three months and $673 and $527 for the nine months ended 2020 and 2019, respectively, from related parties)	$	11,453		$	11,407		$	34,461		$	34,352
Other income		706			1,990			3,885			7,394
Total revenues		12,159			13,397			38,346			41,746
Expenses:
Property operating expenses (including $254 and $237 for the three months ended and $750 and $741 for the nine months ended 2020 and 2019, respectively, from related parties)		6,388			5,403			18,507			18,722
Depreciation and amortization		3,526			3,416			10,338			9,964
General and administrative (including $1,017 and $935 for the three months ended and $2,783 and $3,355 for the nine months ended 2020 and 2019, respectively, from related parties)		1,643			1,929			7,063			6,468
Advisory fee to related party		2,139			2,200			6,483			6,196
Total operating expenses		13,696			12,948			42,391			41,350
Net operating (loss) income		(1,537	)		449			(4,045	)		396

Interest income (including $3,752 and $4,618 for the three months ended and $11,255 and $13,483 for the nine months ended 2020 and 2019, respectively, from related parties)		4,348			5,232			13,102			14,668
Interest expense (including $380 and $514 for the three months ended and $1,193 and $1,517 for the nine months ended 2020 and 2019, respectively, from related parties)		(6,291	)		(8,037	)		(21,999	)		(23,642	)
(Loss) gain on foreign currency transaction		(1,470	)		(5,153	)		774			(13,296	)
Loss on extinguishment of debt		–			(5,219	)		–			(5,219	)
Income (losses) from unconsolidated joint ventures		365			(178	)		(740	)		(1,474	)
Gain on sales or write-down of assets		12,328			5,140			21,802			9,409
Income tax expense		(50	)		–			(346	)		–
Net income (loss)		7,693			(7,766	)		8,548			(19,158	)
Net income attributable to non-controlling interest		–			(21	)		(400	)		(583	)
Net income (loss) attributable to common shares	$	7,693		$	(7,787	)	$	8,148		$	(19,741	)

Earnings (loss) per share – attributable to common shares
Basic and diluted	$	0.88		$	(0.89	)	$	0.93		$	(2.26	)
Weighted-average number of common shares outstanding:
Basic and diluted		8,717,767			8,717,767			8,717,767			8,717,767


TRANSCONTINENTAL REALTY INVESTORS, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except share and par value amounts)
(Unaudited)

	September 30, 2020			December 31, 2019
Assets
Real estate, net	$	380,715		$	387,790
Notes receivable (including $66.287 in 2020 and $57,817 in 2019 from related parties)		123,854			112,357
Cash and cash equivalents		32,967			51,179
Restricted cash		28,030			32,082
Investment in unconsolidated joint ventures		71,171			81,780
Receivable from related parties		140,050			141,541
Other assets		68,558			59,189
Total assets	$	845,345		$	865,918

Liabilities and Equity
Liabilities:
Mortgages and notes payable	$	242,300		$	245,773
Bonds payable		203,192			223,265
Accounts payable and other liabilities (including $937 in 2020 and $935 in 2019 to related parties)		24,642			26,115
Accrued interest payable		3,281			7,230
Deferred revenue		9,315			9,468
Total liabilities		482,730			511,851

Equity
Shareholders’ Equity:
Common stock, $0.01 par value, authorized 10,000,000 shares; issued 8,717,967 shares at September 30, 2020 and December 31, 2019.		87			87
Treasury stock at cost, 200 shares in 2020 and 2019		(2	)		(2	)
Paid-in capital		257,853			257,853
Retained earnings		82,813			74,665
Total shareholders’ equity		340,751			332,603
Non-controlling interest		21,864			21,464
Total equity		362,615			354,067
Total liabilities and equity	$	845,345		$	865,918

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006104/en/

Transcontinental Realty Investors, Inc.

Investor Relations

Erik Johnson (469) 522-4200

[email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Residential Building & Real Estate Commercial Building & Real Estate Construction & Property REIT

MEDIA:

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November 12, 2020 5:09 pm

Contango Announces Revision to the Schedule for its Third Quarter 2020 Earnings Conference Call

HOUSTON, Nov. 12, 2020 (GLOBE NEWSWIRE) — Contango Oil & Gas Company (NYSE American: MCF) (“Contango” or the “Company”) announced today that it has revised the schedule for its third quarter 2020 earnings release conference call. In conjunction with the earnings release, Contango will now conduct a conference call to discuss the contents of that release on Monday, November 16, 2020 at 4:00 pm Central Standard Time.

Teleconference Call

Those interested in participating in the earnings conference call may do so by clicking h ere to j oin and entering your information to be connected. The link becomes active 15 minutes prior to the scheduled start time, and the conference coordinator will call you. If you are not at a computer, you can join by dialing 800-309-1256, (International 1-323-347-3622) and entering participation code 732123. A replay of the call will be available Monday, November 16, 2020 at 7:00 pm CST through Monday, November 23, 2020 at 7:00 pm CST by clicking here.

About Contango Oil & Gas Company

Contango Oil & Gas Company is a Houston, Texas based, independent oil and natural gas company whose business is to maximize production and cash flow from its offshore properties in the shallow waters of the Gulf of Mexico and onshore properties in Texas, Oklahoma, Louisiana and Wyoming and, when determined appropriate, to use that cash flow to explore, develop, exploit, and increase production from its existing properties, to acquire additional PDP-heavy crude oil and natural gas properties or to pay down debt. Additional information is available on the Company’s website at http://www.contango.com. Information on our website is not part of this release.


Contact:
Contango Oil & Gas Company
E. Joseph Grady – 713-236-7400
Senior Vice President and Chief Financial and Accounting Officer

November 12, 2020 5:09 pm

Dream Impact Trust Provides Business & Liquidity Update

Dream Impact Trust Provides Business & Liquidity Update

This press release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained within this press release.

TORONTO–(BUSINESS WIRE)–DREAM IMPACT TRUST (TSX: MPCT.UN) (“MPCT”, “we” or the “Trust”) today provided a business update.

On October 13^thMPCT announced its intention to become a pure-play impact investment vehicle, meaning that it pursues investments that provide both attractive market returns and generates measurable and verifiable positive impact. Since then, the Trust has made steady progress building out the processes and oversight structure for our impact management framework. Through Dream Unlimited Corp. (“Dream”), the Trust’s asset manager, MPCT is now a Signatory to the Operating Principles for Impact Management (the “Principles”) and a member of the Global Impact Investing Network. The Principles are a framework for the design and implementation of systems and processes for the management of investments targeting positive social and environmental impacts. By aligning ourselves with these established standards, we are promoting transparency and formalizing our approach to the measurement and reporting of the impacts we create. In addition, the Trust’s annual disclosure statements will be verified by an independent third-party expert in this field. As we work through our detailed impact plan across the Trust’s portfolio, we are targeting net-zero greenhouse gas emissions across our properties by 2035. We expect to publish the Trust’s inaugural disclosure statement outlining our core impact objectives and further details on our measurement approach by mid-2021.

As of November 2020, the Trust had strong liquidity with nearly $120 million in cash on hand to fund our ongoing development commitments, distributions and operating costs. We are changing the collateral base of MPCT’s $50 million operating facility to be more beneficial to the Trust. Once completed, we expect to generate an additional $38 million of liquidity which we expect to use to acquire income properties meeting our impact criteria. MPCT currently has two income properties under exclusive negotiations for a further 55,000 sf of GLA, which is in addition to the Trust’s 980,000 sf of existing GLA (at 100% project level). We believe that by investing in income properties that generate attractive returns and provide opportunities to create impact, we will be able to grow the Trust’s recurring income segment while continuing to buildout our extensive development pipeline. For further details on our existing portfolio, refer to section 1.7 Summary of Portfolio Assets in our Management’s Discussion & Analysis for the period ended September 30, 2020.

In anticipation of the expiry of our agreement with Dream pursuant to which Dream agreed to accept units of the Trust in payment of its management fees, the Trust is in discussions with Dream regarding an extension of such agreement for up to three years to continue to settle our fee in units based on net asset value, along with other amendments that will further align our asset manager with MPCT. Under the original fee agreement, which is set to expire on December 31, 2020, the net asset value as at December 31, 2018 of $8.74 per unit was used for the purposes of determining the number of units to be issued to Dream. The extension would be effective January 1, 2021 and would be subject to applicable regulatory approval and the approval of unitholders.

By continuing to settle our asset management fees in units and deploying our enhanced liquidity into new income properties, we expect to improve the Trust’s operating cash flows and provide further security for our ongoing distributions.

On October 23^rd, we obtained zoning approval for the West Don Lands Blocks 3/4/7 and 20 through a Municipal Zoning Order (“MZO”) issued by the Province of Ontario. The West Don Lands development includes Blocks 3/4/7, Block 20 and Block 8, which is currently under construction, and will deliver an aggregate 2,286 purpose-built rental units, including 686 affordable units and 300,000 sf of commercial space under the Province’s Affordable Housing Lands Program upon completion. The MZO approval was a significant milestone for the Trust as it accelerates the development timeline and secured additional density to deliver one of the largest affordable housing programs in Canada. We are currently working towards obtaining construction financing for Blocks 3/4/7 and, based on current development timelines, expect to break ground next spring.

In addition, construction is well underway on Block 10, the Trust’s first rental building at Zibi, our 34-acre waterfront community along the Ottawa River. Block 10 is a 162-unit rental building, of which 149 units will be affordable, that will house Zibi’s District Thermal Energy plant upon completion in 2022. The Trust has received credit approval to close on long-term financing for Block 10, which would otherwise not be available for market rental projects, as well as a $20 million loan and $3 million grant for the construction of the District Thermal plant. Completion of the plant is an integral component of our plan to provide zero-carbon heating and cooling for all of Zibi’s tenants and residents.

Conference Call

Senior management will host a conference call on Friday, November 13, 2020 at 11:00am (ET). To access the call, please dial 1.888.465.5079 in Canada or 1.416.216.4169 elsewhere and use passcode 9919 703#. To access the conference call via webcast, please go to the Trust’s website at www.dreamimpacttrust.ca and click on Calendar of Events in the News and Events section. The presentation for the call can be found here. A taped replay of the conference call and the webcast will be available for 90 days.

About Dream Impact Trust

Dream Impact Trust is a real estate impact investing vehicle that targets projects that create positive and lasting impacts on communities and the environment, while achieving market returns. Dream Impact Trust provides investors with access to an exceptional portfolio of real estate development and income properties that would not be otherwise available in a public and fully transparent vehicle, managed by an experienced team with a successful track record in these areas. The objectives of the Trust are to provide investors with a portfolio of high-quality real estate development opportunities that generate both strong financial returns and provide positive social and environmental impacts in our communities; balance growth and stability of the portfolio, increasing cash flow, unitholders’ equity and NAV⁽¹⁾ over time; provide predictable cash distributions to unitholders on a tax-efficient basis; and leverage access to an experienced management team and strong partnerships to generate investment opportunities, capitalize on strong market fundamentals and generate attractive returns for investors. For more information, please visit: www.dreamimpacttrust.ca.

Non-IFRS Measures

The Trust’s condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). In this press release, as a complement to results provided in accordance with IFRS, the Trust discloses and discusses certain non-IFRS financial measures including NAV, as well as other measures discussed elsewhere in this release. These non-IFRS measures are not defined by IFRS, do not have a standardized meaning and may not be comparable with similar measures presented by other issuers. The Trust has presented such non-IFRS measures as management believes they are relevant measures of our underlying operating performance and debt management. Non-IFRS measures should not be considered as alternatives to unitholders’ equity, net income, total comprehensive income or cash flows generated from operating activities (continuing), or comparable metrics determined in accordance with IFRS as indicators of the Trust’s performance, liquidity, cash flow and profitability. For a full description of these measures and, where applicable, a reconciliation to the most directly comparable measure calculated in accordance with IFRS, please refer to the “Non-IFRS Measures and Other Disclosures” section in the Trust’s Management’s Discussion and Analysis for the three and nine months ended September 30, 2020.

Forward-Looking Information

This press release may contain forward-looking information within the meaning of applicable securities legislation, including statements relating to our objectives, strategies to achieve those objectives, our beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, future growth, results of operations, performance, business prospects and opportunities, as well as statements regarding: our target to achieve net-zero greenhouse gas emissions across our properties by 2035; our approaches to impact management; our expected processes and procedures for the measurement and verification of the impact of our investments; our ability to achieve our impact and sustainability goals; the timing of our inaugural disclosure statement and further details on our measurement goals; our plans and proposals for current and future development projects, including projected sizes, density and uses, timing for expected zoning approvals and expected sustainability impact; development timelines, including commencement of construction and/or revitalization of our development projects; the restructuring of the collateral base of our $50 million operating facility, the expected additional liquidity to be generated therefrom and our proposed uses for any such additional liquidity; our ability to source and complete acquisitions of income properties that meet our impact criteria; our ability to grow the Trust’s recurring income segment while continuing to build-out our development pipeline through the acquisition of income properties; the demand for and expected returns on our impact investments; the extension of our arrangements with DAM pursuant to which DAM’s management fees are paid in units, including the terms and conditions of any such extension and the effective date and term of any such extension; and how an extension of our fee arrangement with DAM or the restructuring of our operating facility may affect our operating cash flows and distribution. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Trust’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to: adverse changes in general economic and market conditions; the impact of the novel coronavirus (COVID-19) pandemic on the Trust; changes to the regulatory environment; environmental risks; local real estate conditions, including the development of properties in close proximity to the Trust’s properties and changes in real estate values; timely leasing of vacant space and re-leasing of occupied space upon expiration; dependence on tenants’ and borrowers’ financial condition; the uncertainties of acquisition activity; the ability to effectively integrate acquisitions; dependence on our partners in the development, construction and operation of our real estate projects; uncertainty surrounding the development and construction of new projects and delays and cost overruns in the design, development, construction and operation of projects; our ability to execute on our strategic plans and meet financial obligations; interest and mortgage rates and regulations; inflation; availability of equity and debt financing; foreign exchange fluctuations. Assumptions upon which forward-looking information is based may include, but are not limited to: a gradual recovery and growth of the general economy over the remainder of 2020 and 2021; relatively historically low interest costs; access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable our refinancing of debts as they mature; the availability of investment opportunities for growth in our target markets; the timing and ability to sell certain properties; the valuations to be realized on property sales relative to current IFRS values; maintaining occupancy levels; and anticipated replacement of expiring tenancies. All forward-looking information in this press release speaks as of November 12, 2020. The Trust does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR (www.sedar.com). These filings are also available at the Trust’s website at www.dreamimpacttrust.ca.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006103/en/

Meaghan Peloso

Chief Financial Officer

416 365-6322

[email protected]

Kimberly Lefever

Director, Investor Relations

416 365-6339

[email protected]

KEYWORDS: North America Canada

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

MEDIA:

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November 12, 2020 5:08 pm

Grounded on Some of the Most Affordable Rents in Canada, Boardwalk REIT Reports Resilient Results With Third Quarter Funds From Operations per Unit Growth of 5.7%

PR Newswire

SUMMARY HIGHLIGHTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2020

RESILIENT PERFORMANCE

FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2020

Funds From Operations (FFO) of $0.74 per Trust Unit; an increase of 5.7%
1.7% same-property revenue growth
0.5% same-property net operating income growth

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2020

Funds From Operations (FFO) of $2.07 per Trust Unit; an increase of 6.7%
Excluding retirement costs, FFO of $2.14 per Trust Unit, an increase of 10.3%
2.9% same-property revenue growth
4.9% same-property net operating income growth

SOLID OPERATIONAL RESULTS

Resumption of sustainable rental rate adjustments beginning to benefit October renewals
Achieved occupancy of 96.6% for Q3 2020
Rental collections remain inline with pre-COVID levels

STRONG AND FLEXIBLE FINANCIAL POSITION

Approximately $286.0 million of liquidity
Recently completed CMHC-insured mortgage financings at record low interest rates between 0.97% and 1.30%
99% of Boardwalk’s mortgages carry CMHC-insurance
Net Asset Value of $60.85 per trust unit, equating to approximately $180,000 per door

STEADY EXECUTION OF LONG-TERM STRATEGY TO GEOGRAPHICALLY EXPAND AND HIGH-GRADE PORTFOLIO

Acquisition of two future development sites in prime locations in Victoria, BC for $26.9 million
These future developments will add an estimated 432 new rental units in the high growth market of Victoria
Sale of non-core 72-unit walk-up community in Regina at a price inline with the Trust’s fair value of the asset

CONTINUE TO PROVIDE OUR ESSENTIAL SERVICE OF SAFE AND AFFORDABLE HOUSING THROUGH THE COVID-19 PANDEMIC

Health and safety of our Resident Members and our Associates remains Boardwalk’s top-priority

DISTRIBUTION OF $1.00 PER TRUST UNIT ON AN ANNUALIZED BASIS CONFIRMED FOR THE MONTHS OF NOVEMBER, DECEMBER 2020 AND JANUARY 2021

CALGARY, AB, Nov. 12, 2020 /PRNewswire/ – Boardwalk Real Estate Investment Trust (TSX: BEI.UN)

Boardwalk Real Estate Investment Trust (“Boardwalk”, the “REIT” or the “Trust”) today announced its financial results for the third quarter of 2020.

Sam Kolias, Chairman and Chief Executive Officer of Boardwalk REIT commented: “Grounded on some of the most affordable rents in Canada and through competitive market conditions, Boardwalk has continued to outperform. Boardwalk’s third quarter results are a reflection of both the resilience of the multifamily sector and Boardwalk’s competitive advantage in providing the best product quality, service, and experience to our resident members. Our performance-focused team, and investment in our communities through previous competitive conditions experienced over the last five years in our Western Canadian markets has allowed the Trust to continue to excel through these unprecedented times.

Boardwalk’s focus has been on increasing retention and with many of our lease renewals negotiated 30-90 days in advance of lease expiration, our third quarter results saw limited benefit from the lifting of rental rate restrictions in August of this year. With restrictions lifted, Boardwalk’s team is seeing success in negotiating small sustainable rental rate adjustments on renewal, while aiming to maintain high occupancy through the winter months. The Trust anticipates this approach to provide steady growth and recovery of increased non-controllable expenses through the remainder of the year.

Unchanged since the beginning of the pandemic, Boardwalk’s top priority remains the health and safety of both our Resident Members as well as Boardwalk’s Team of Heroes who everyday are innovating, performing and delivering our essential service of safe and affordable housing. Boardwalk’s diverse brand and affordable product offering has allowed the Trust to exceed expectations.

Current record low CMHC insured mortgage rates, with recently completed mortgage renewals of between 0.97% and 1.30% for four and five year terms, respectively, are significantly reducing our interest expense on mortgage maturities which averages 2.66% as of the end of September. Boardwalk remains in a strong and flexible financial position to capitalize on opportunities that may arise, and with our operational focus is well positioned to continue delivering resilient and sustainable results for all of our stakeholders on the foundation of strong affordability within our portfolio of communities across Canada where love always lives™.”

THIRD QUARTER & NINE MONTHS FINANCIAL HIGHLIGHTS


$ millions, except per unit amounts
Highlights of the Trust’s Third Quarter 2020 Financial Results
	3 Months Sep 30, 2020		3 Months Sep 30, 2019		% Change	9 Months Sep 30, 2020		9 Months Sep 30, 2019		% Change
Operational Highlights
Total Rental Revenue	$	116.2	$	114.7	1.3%	$	349.0	$	339.9	2.7%
Same Property Total Rental Revenue *	$	114.1	$	112.2	1.7%	$	342.2	$	332.5	2.9%
Net Operating Income (NOI)	$	68.2	$	67.9	0.4%	$	203.4	$	194.0	4.8%
Same Property NOI *	$	68.3	$	68.0	0.5%	$	204.1	$	194.4	4.9%
Operating Margin		58.7%		59.2%			58.3%		57.1%
Same Property Operating Margin *		59.9%		60.6%			59.6%		58.5%

Financial Highlights
Funds From Operations (FFO)	$	37.8	$	35.8	5.6%	$	105.5	$	98.8	6.7%
Adjusted Funds From Operations (AFFO)	$	32.7	$	29.8	9.7%	$	90.2	$	80.8	11.5%
(Loss) Profit for the Period **	$	(31.4)	$	79.6	-139.5%	$	(8.8)	$	143.4	-106.2%
FFO per Unit (includes $0.07 of retirement costs in YTD 2020)	$	0.74	$	0.70	5.7%	$	2.07	$	1.94	6.7%
AFFO per Unit (includes $0.07 of retirement costs in YTD 2020)	$	0.64	$	0.58	10.3%	$	1.77	$	1.59	11.3%

Net Asset Value
IFRS Asset Value per Diluted Unit (Trust & LP B), period end						$	120.01	$	122.94
Debt Outstanding per Diluted Unit, period end						$	(60.79)	$	(57.99)
Net Asset Value (NAV) per Diluted Unit (Trust & LP B), period end						$	59.22	$	64.95
Cash per Diluted Unit (Trust & LP B), period end						$	1.63	$	0.20
Total per Diluted Unit (Trust & LP B), period end						$	60.85	$	65.15

*Same Property figures exclude un-stabilized properties and sold assets

** (Loss) Profit for the period as defined by IFRS includes the changes in assets and/or liabilities carried at fair value

NOI, FFO and AFFO are widely accepted supplemental measures of the performance of a Canadian Real Estate entity; however, they are non-GAAP financial measures as they are not measures defined by International Financial Reporting Standards (“IFRS”). The reconciliation of FFO, AFFO and other financial performance measures can be found in the Management Discussion and Analysis (“MD&A”) for the three and nine months ended September 30, 2020, under the section titled, “Non-GAAP Measures”, which is available under the Trust’s profile at www.sedar.com.


Third Quarter Highlights (Cont’d); $ millions, except per unit amounts
	3 Months Sep 30, 2020		3 Months Sep 30, 2019		% Change	9 Months Sep 30, 2020		9 Months Sep 30, 2019		% Change

Liquidity, Debt and Distributions
Cash Position, period end						$	83,100
Fundings Subsequent To End of Quarter						$	3,200
Line of Credit						$	199,700
Total Available Liquidity						$	286,000
Liquidity as a % of Period Total Debt							9%
Debt (net of cash) as a % of Reported Asset Value							49%

Principal Outstanding, period end	$	3,002,166	$	2,834,314		$	3,002,166	$	2,834,314
Interest Coverage Ratio (Rolling 4 quarters)		2.78		2.74			2.78		2.74

Regular Distributions Declared (Trust Units & LP B Units)	$	12.8	$	12.7	0.2%	$	38.3	$	38.2	0.2%
Regular Distributions Declared Per Unit (Trust Units & LP B Units)	$	0.250	$	0.250	0.0%	$	0.751	$	0.751	0.0%
Regular Payout as a % FFO		33.8%		35.6%			36.3%		38.7%

Stabilized Apartment Units							32,682		32,769
Un-Stabilized Units							786		494
Total Apartment Units							33,468		33,263

SOLID OPERATIONAL RESULTS

Portfolio Highlights for the Third Quarter of 2020
	Sep-20		Dec-19			Sep-19
Average Occupancy (Quarter Average)*	96.61%		96.19%			96.62%

Average Monthly Rent (Period Ended)	$	1,138	$	1,132	$	1,133
Average Market Rent (Period Ended)	$	1,332	$	1,341	$	1,339
Average Market Rent (Period Ended), net of incentives	$	1,232	$	1,248	$	1,240
Average Occupied Rent (Period Ended)	$	1,183	$	1,182	$	1,170

Loss -to-Lease (Period Ended) ($ millions )	$	56.4	$	60.8	$	64.5
Loss -to-Lease (Period Ended) ($ millions ), net of incentives	$	18.3	$	24.9	$	26.5
Loss -to-Lease Per Trust Unit (Period Ended)	$	1.11	$	1.19	$	1.27
Loss -to-Lease Per Trust Unit (Period Ended), net of incentives	$	0.36	$	0.49	$	0.52

*Average occupancy is adjusted to be on a same-property basis

With higher property taxes and rental rate restrictions affecting the third quarter, Boardwalk’s Edmonton and Calgary portfolio saw a slight decrease in same-property NOI of 1.7% and 4.3%, respectively, as compared to the same period in 2019. The Trust’s Ontario and Quebec markets, which represent over 25% of the Trust’s portfolios, are continuing to deliver stable results with high occupancy, contributing significant NOI growth of 8.0% and 8.2%, respectively, in the third quarter of 2020 compared to the third quarter of 2019. Saskatchewan’s market continues to improve with the Trust’s portfolio realizing 2.4% same property NOI growth in the third quarter versus the same period last year.

Overall, in the third quarter, controllable expense savings limited operating expense increase to 3.6% and when paired with revenue growth of 1.7%, resulted in portfolio stabilized NOI growth of 0.5%, each as compared to the same period in 2019.

Sep 30 2020 – 3 M	# of Units	% Revenue Growth	% Operating Expense Growth	% Net Operating Income Growth	% of NOI
Edmonton	12,906	0.6%	3.7%	-1.7%	37.1%
Calgary	5,499	1.1%	11.6%	-4.3%	19.9%
Red Deer	939	-0.7%	8.4%	-7.6%	2.3%
Grande Prairie	645	1.8%	10.5%	-4.5%	1.6%
Fort McMurray	352	-4.1%	-13.6%	2.6%	1.1%
Alberta	20,341	0.6%	5.4%	-2.8%	62.0%
Quebec	6,000	3.0%	-6.6%	8.2%	20.2%
Saskatchewan	3,756	3.1%	4.1%	2.4%	10.9%
Ontario	2,585	6.9%	5.5%	8.0%	6.9%
	32,682	1.7%	3.6%	0.5%	100.0%

Sep 30 2020 – 9 M	# of Units	% Revenue Growth	% Operating Expense Growth	% Net Operating Income Growth	% of NOI
Edmonton	12,906	2.5%	-0.1%	4.7%	37.4%
Calgary	5,499	2.4%	2.5%	2.3%	20.6%
Red Deer	939	0.6%	6.7%	-4.5%	2.3%
Grande Prairie	645	4.9%	12.3%	-1.0%	1.6%
Fort McMurray	352	-1.7%	-6.1%	1.9%	1.0%
Alberta	20,341	2.4%	1.1%	3.4%	62.8%
Quebec	6,000	2.9%	-7.8%	9.4%	19.6%
Saskatchewan	3,756	3.6%	2.9%	4.1%	10.6%
Ontario	2,585	7.0%	4.4%	8.9%	7.0%
	32,682	2.9%	0.1%	4.9%	100.0%

PROVIDING OUR ESSENTIAL SERVICE OF SAFE AND AFFORDABLE HOUSING THROUGH COVID-19

The health, safety, and well-being of our Resident Members and Associates remain our top priority; and as we continue to deliver homes to our Resident Members through this pandemic, Boardwalk remains committed to providing transparency and information to its stakeholders:

At the end of October 2020; Boardwalk had collected 98.3% of its rental revenue due in October, and is generally inline with collection levels pre-COVID

Boardwalk is actively following-up with any of its Resident Members in arrears or in need of a payment plan
Boardwalk continues to offer flexible payment options to its Resident Members who may require payment plans

Boardwalk’s rent collection through COVID to-date has been strong
Boardwalk’s occupancy within its stabilized portfolio at the beginning of October 2020 was 96.3%

STEADY EXECUTION OF GEOGRAPHIC EXPANSION AND HIGH-GRADING

Inline with Boardwalk’s long-term strategy of geographic expansion and high grading of the portfolio, the Trust acquired two future development sites in Victoria, British Columbia: the Carlisle Lands in Esquimalt and Eagles Nest in View Royal.

The Carlisle Lands site is an assembly of 12 single family homes in the gentrifying municipality of Esquimalt and was acquired for $12.9 million. Located next to the Esquimalt Town Square development and the Esquimalt Recreation Centre, this development will provide new rental housing in an undersupplied market. Boardwalk closed on this assembly on November 2, 2020 and anticipates that it will be able to develop 185 units upon rezoning.

Eagles Nest is located in the municipality of View Royal and is under contract for $14.0 million, conditions have been waived and closing is scheduled for November 23, 2020. This property is zoned for approximately 247 units and is located near Victoria General Hospital, a large retail plaza and provides quick access to both downtown Victoria and Langford.

Both future development sites provide the opportunity for Boardwalk to utilize its experience and past success in low-cost, value enhancing, low-rise development. The timing of these and Boardwalk’s other future developments will be determined in the new year. The Trust is excited to re-enter the high-growth, undersupplied Victoria market in British Columbia with Boardwalk’s brand of affordability in this future low-rise product.

Subsequent to the end of the quarter, Boardwalk has agreed to the sale of a 72-unit, non-core low rise community in Regina, Saskatchewan for $7.5 million, inline with the Trust’s fair value of this asset. Closing is anticipated for November 16, 2020.

Q3 REGULAR MONTHLY DISTRIBUTION ANNOUNCEMENT

The Trust has confirmed its regular monthly distribution for the months of November 2020, December 2020 and January 2021 as follows:

Month	Per Unit		Annualized		Record Date	Distribution Date
Nov-20	$	0.0834	$	1.00	30-Nov-20	15-Dec-20
Dec-20	$	0.0834	$	1.00	31-Dec-20	15-Jan-21
Jan-21	$	0.0834	$	1.00	29-Jan-21	15-Feb-21

In line with Boardwalk’s distribution policy of maximum re-investment, the Trust’s payout ratio remains conservative at 33.8% of Q3 2020 FFO; and 37.1% of the last 12 months FFO.

Boardwalk’s regular monthly distribution provides a stable and attractive yield for the Trust’s stakeholders.

FINANCIAL AND SUPPLEMENTARY INFORMATION

Boardwalk produces quarterly financial statements, management’s discussion and analysis, and a supplemental information package that provides detailed information regarding the Trust’s activities during the quarter. Financial and supplementary information is available on Boardwalk’s investor website at www.bwalk.com/investors.

TELECONFERENCE ON THIRD QUARTER 2020 FINANCIAL RESULTS

Boardwalk invites you to participate in the teleconference that will be held to discuss these results tomorrow morning (November 13, 2020) at 11:00 am Eastern Time. Senior management will speak to the period’s results and provide an update. Presentation materials will be made available on Boardwalk’s investor website at www.bwalk.com/investors prior to the call.

Teleconference: The telephone numbers for the conference are 416-764-8650 (local/international callers) or toll-free 1-888-664-6383 (within North America).

Note: Please provide the operator with the below Conference Call ID or Topic when dialing in to the call.
Conference ID: 84873695
Topic: Boardwalk REIT Third Quarter Results

Webcast: Investors will be able to listen to the call and view Boardwalk’s slide presentation by visiting www.bwalk.com/investors prior to the start of the call.

An information page will be provided for any software needed and system requirements. The webcast and slide presentation will also be available at:
Boardwalk REIT Third Quarter Conference Call Webcast Link

Replay: An audio recording of the teleconference will be available on the Trust’s website:
www.bwalk.com/investors

CORPORATE PROFILE

Boardwalk REIT strives to be Canada’s friendliest communities and currently owns and operates more than 200 communities with over 33,000 residential units totaling over 28 million net rentable square feet. Boardwalk’s principal objectives are to provide its Residents with the best quality communities and superior customer service, while providing Unitholders with sustainable monthly cash distributions, and increase the value of its trust units through selective acquisitions, dispositions, development, and effective management of its residential multi-family communities. Boardwalk REIT is vertically integrated and is Canada’s leading owner/operator of multi-family communities bringing Residents home to properties located in Alberta, Saskatchewan, Ontario, and Quebec.

Boardwalk REIT’s Trust units are listed on the Toronto Stock Exchange, trading under the symbol BEI.UN. Additional information about Boardwalk REIT can be found on the Trust’s website at www.bwalk.com/investors.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Information in this news release that is not current or historical factual information may constitute forward-looking statements and information (collectively, “forward-looking statements”) within the meaning of securities laws. Implicit in these forward-looking statements, particularly in respect of Boardwalk’s objectives for 2020 and future periods, Boardwalk’s strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations are estimates and assumptions subject to risks and uncertainties, including those described in the second quarter Management’s Discussion & Analysis of Boardwalk and the year-end Management’s Discussion & Analysis of Boardwalk under the heading “Risks and Risk Management”, which could cause Boardwalk’s actual results to differ materially from the forward-looking statements contained in this news release. Specifically, Boardwalk has made assumptions surrounding the impact of economic conditions in Canada and globally including as a result of the COVID-19 pandemic, Boardwalk’s future growth potential, prospects and opportunities, the rental environment compared to several years ago, relatively stable interest costs, access to equity and debt capital markets to fund (at acceptable costs), the future growth program to enable the Trust to refinance debts as they mature, the availability of purchase opportunities for growth in Canada, general industry conditions and trends, changes in laws and regulations including, without limitation, changes in tax laws, mortgage rules and other temporary legislative changes in light of the COVID-19 pandemic, increased competition, the availability of qualified personnel, fluctuations in foreign exchange or interest rates, and stock market volatility. These assumptions, although considered reasonable by the Trust at the time of preparation, may prove to be incorrect. For more exhaustive information on these risks and uncertainties you should refer to Boardwalk’s most recently filed annual information form, which is available at www.sedar.com. Forward-looking statements contained in this news release is based on Boardwalk’s current estimates, expectations and projections, which Boardwalk believes are reasonable as of the current date. You should not place undue importance on forward-looking statements and should not rely upon forward-looking statements as of any other date. Except as required by applicable law, Boardwalk undertakes no obligation to publicly update or revise any forward-looking statement, whether a result of new information, future events, or otherwise.

View original content:http://www.prnewswire.com/news-releases/grounded-on-some-of-the-most-affordable-rents-in-canada-boardwalk-reit-reports-resilient-results-with-third-quarter-funds-from-operations-per-unit-growth-of-5-7-301172402.html

SOURCE Boardwalk Real Estate Investment Trust

November 12, 2020 5:08 pm

Priority Technology Holdings, Inc. Announces Third Quarter 2020 Financial Results

Priority Technology Holdings, Inc. Announces Third Quarter 2020 Financial Results

Strong Financial Performance and Continued Growth

ALPHARETTA, Ga.–(BUSINESS WIRE)–
Priority Technology Holdings, Inc. (NASDAQ: PRTH) (“Priority” or the “Company”), a leading provider of merchant acquiring, integrated payment software and commercial payment solutions, today announced its third quarter financial results including strong year-over-year revenue growth of 16.1% and deleveraging during the quarter of $124 million.

Highlights of Consolidated Results

Third Quarter 2020, Compared with Third Quarter 2019

Financial highlights of the third quarter of 2020 compared with the third quarter of 2019, are as follows:

Revenue of $109.0 million increased 16.1% from $93.9 million.
Gross profit (a non-GAAP measure¹) of $34.0 million increased 12.7% from $30.2 million.
Gross profit margin (a non-GAAP measure¹) of 31.2% decreased 94 basis points from 32.1%.
Income from operations of $7.0 million increased 158.4% from $2.7 million.
Pre-tax gain from the sale of the RentPayment business, net of non-controlling interests (“NCIs”), was $62.1 million.
Net income of $40.4 million increased $46.2 million from a loss of $5.8 million.
Adjusted EBITDA (a non-GAAP measure¹) of $19.6 million increased 28.1% from $15.3 million.
Net debt (total debt less unrestricted cash) of $370.4 million at September 30, 2020 – a decrease of $123.6 million from $494.0 million at June 30, 2020.
Total net leverage ratio of 6.16x at September 30, 2020 decreased from 7.46x at June 30, 2020².

(1) See “Non-GAAP Financial Measures” and the reconciliations of Gross Profit, Gross Profit Margin, and Adjusted EBITDA to their most comparable GAAP measures provided below for additional information.

(2) Calculation of Total Net Leverage Ratio is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 2 of our Form 10-Q for the quarter ended September 30, 2020.

“Our strong results this quarter demonstrate continued resilience during this pandemic, and by all key metrics, validate the differentiation of our platform,” said Tom Priore, Chairman and CEO. “The execution of the transaction with MRI Software this quarter not only reduced debt by over $100 million, it will improve annual cashflow and established a multi-year processing partnership with a global leader in real estate software solutions.”

“The year-over-year revenue growth of our core business of 20% and our CPX accounts payable solutions of 7% in these challenging economic times are real testaments to the countercyclical nature of our platform. Our commercial and consumer payments teams have performed exceptionally well. We expect the momentum of our integrated product and payment infrastructure as a service offering to drive similar growth in the fourth quarter and continued deleveraging.”

Priore concluded, “We clearly achieved our goals this quarter, producing strong top-line revenue growth, captured expense reduction through automation and diligent management and deleveraged our balance sheet. While the future economic and operating environment remains uncertain, we are encouraged by the performance across our segments and believe we are poised for sustainable long-term results. We are forecasting our fourth quarter 2020 results to match, if not exceed, the performance delivered in the third quarter of 2020, excluding the RentPayment results.”

Discussion of Results

Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 2 of our Form 10-Q for the quarter ended September 30, 2020 provides a thorough discussion of our third quarter 2020 results.

Consolidated revenue in the third quarter of 2020 of $109.0 million increased $15.1 million, or 16.1%, from $93.9 million in the third quarter of 2019. Revenue growth of $16.6 million, or 20.0%, in our Consumer Payments segment was partially offset by revenue declines of $1.3 million and $0.1 million in our Commercial Payments and Integrated Partners segments.

Consolidated income from operations in the third quarter of 2020 of $7.0 million increased $4.3 million, or 158.4%, from $2.7 million in the third quarter of 2019. Gross profit increased $3.8 million, salary and employee benefits decreased $0.7 million, and depreciation and amortization increased $0.2 million in the third quarter of 2020 compared with the third quarter of 2019. Selling, general and administrative expenses were flat and the third quarter of 2020 included a $1.0 million non-cash write-down of an intangible asset in the Consumer Payments segment.

Pro Forma

The following table provides a summary of the pro forma results for the three and the nine months ended September 30, 2020 and 2019, excluding the RentPayment business sold to MRI Software (“MRI”) in September 2020. The RentPayment amounts are historical and do not include a pro forma adjustment for revenue and income to be earned from ongoing payment infrastructure as a service and processing to MRI’s new platform.

			Three Months Ended September 30, 2020						Three Months Ended September 30, 2019
			Consolidated		RentPayment		Pro Forma		Consolidated		RentPayment		Pro Forma
Revenues			$	108,962	$	3,883	$	105,079	$	93,883	$	3,652	$	90,231

Operating Expenses:
	Costs of services			74,971		497		74,474		63,718		342		63,376
	Salary and employee benefits			10,010		580		9,430		10,668		395		10,273
	Depreciation and amortization			10,251		1,238		9,013		10,077		1,206		8,871
	Selling, general and administrative			6,688		1,261		5,427		6,695		592		6,103
		Total Operating expenses		101,920		3,576		98,344		91,158		2,535		88,623

		Income from operations	$	7,042	$	307	$	6,735	$	2,725	$	1,117	$	1,608

		Adjusted EBITDA	$	19,635	$	2,557	$	17,078	$	15,325	$	2,764	$	12,561

			(in thousands)						(in thousands)
			Nine Months Ended September 30, 2020						Nine Months Ended September 30, 2019
			Consolidated		RentPayment		Pro Forma		Consolidated		RentPayment		Pro Forma
Revenues			$	298,251	$	12,118	$	286,133	$	273,671	$	8,058	$	265,613

Operating Expenses:
	Costs of services			203,733		1,370		202,363		185,827		804		185,023
	Salary and employee benefits			29,695		1,627		28,068		31,923		440		31,483
	Depreciation and amortization			30,886		3,668		27,218		28,763		2,823		25,940
	Selling, general and administrative			19,305		3,649		15,656		21,031		1,405		19,626
		Total Operating expenses		283,619		10,313		273,306		267,544		5,472		262,072

		Income from operations	$	14,632	$	1,805	$	12,827	$	6,127	$	2,586	$	3,541

		Adjusted EBITDA	$	52,100	$	8,320	$	43,780	$	42,722	$	6,596	$	36,126

Conference Call

Priority Technology Holdings, Inc.’s leadership will host a conference call on Friday, November 13, 2020 at 11:00 a.m. EST to discuss its third quarter 2020 financial results. Participants can access the call by Phone: US/Canada: (877) 501-3161 or International: (786) 815-8443.

The Internet webcast link and accompanying slide presentation can be accessed at https://edge.media-server.com/mmc/p/573urite and will also be posted in the “Investor Relations” section of the Company’s website at www.PRTH.com.

An audio replay of the call will be available shortly after the conference call until November 16, 2020 at 11:30 a.m. EST. To listen to the audio replay, dial (855) 859-2056 or (404) 537-3406 and enter conference ID number 5953513. Alternatively, you may access the webcast replay in the “Investor Relations” section of the Company’s website at www.PRTH.com.

Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures that we regularly review to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We believe these non-GAAP measures help to illustrate the underlying financial and business trends relating to our results of operations and comparability between current and prior periods. We also use these non-GAAP measures to establish and monitor operational goals. However, these non-GAAP measures are not superior to or a substitute for prominent measurements calculated in accordance with GAAP. Rather, the non-GAAP measures are meant to be a complement to understanding measures prepared in accordance with GAAP.

Gross Profit and Gross Profit Margin

The Company’s non-GAAP gross profit metric represents revenues less costs of services. Gross profit margin is gross profit divided by revenues. We review these non-GAAP measures to evaluate our underlying profit trends. The reconciliation of gross profit to its most comparable GAAP measure is provided below:

	(in thousands)
	Three Months Ended September 30,
	2020			2019
Revenues	$	108,962		$	93,883
Costs of Services		(74,971	)		(63,718	)
Gross Profit	$	33,991		$	30,165

Gross Profit Margin		31.2	%		32.1	%

EBITDA, Adjusted EBITDA and Consolidated Adjusted EBITDA

EBITDA and adjusted EBITDA are performance measures. EBITDA is earnings before interest, income tax, and depreciation and amortization expenses (“EBITDA”). Adjusted EBITDA begins with EBITDA but further excludes certain non-cash costs, such as stock-based compensation and/or the write-off of the carrying value of investments or other assets, as well as debt extinguishment and modification expenses and other expenses and income items considered non-recurring, such as acquisition integration expenses, certain professional fees, and litigation settlements. Consolidated adjusted EBITDA, which is a liquidity measure used in determining our total net leverage ratio, is adjusted EBITDA further adjusted for items specified in the definition of consolidated adjusted EBITDA within our debt agreements, which include the pro-forma impact of acquisitions and/or dispositions and other specified adjustments. We review the non-GAAP adjusted EBITDA measure to evaluate our business and trends, measure our performance, prepare financial projections, allocate resources, and make strategic decisions. We review the non-GAAP consolidated adjusted EBITDA to evaluate compliance with our total net leverage ratio at each measurement period.

Adjusted EBITDA was $19.6 million in the third quarter of 2020 and $15.3 million in the third quarter of 2019. Non-operating results in the third quarter of 2020 included $62.1 million of pre-tax gain on the sale of the RentPayment business, net of NCIs and $1.5 million of early debt extinguishment expense. Selling, general and administrative expenses included net non-recurring expenses in the third quarters of 2020 and 2019 of $1.8 million and $1.2 million, respectively. Salary and employee benefits included non-cash stock-based compensation of $0.6 million and $1.2 million in the third quarters of 2020 and 2019, respectively. The reconciliation of adjusted EBITDA to its most comparable GAAP measure is provided below:

		(in thousands)
		Three Months Ended September 30,
		2020			2019
Net Income (loss)		$	40,392		$	(5,844	)
	Interest expense		13,471			10,463
	Income tax expense (benefit)		13,737			(1,736	)
	Depreciation and amortization		10,251			10,077
EBITDA			77,851			12,960
	Gain on sale, net of NCIs		(62,091	)		–
	Debt extinguishment and modification		1,523			–
	Selling, general and administrative expenses		1,751			1,194
	Non-cash stock-based compensation		601			1,171
Adjusted EBITDA		$	19,635		$	15,325

Further detail of certain of these adjustments, and where these items are recorded in our consolidated statements of operations, is provided below:

		(in thousands)
		Three Months Ended September 30,
		2020			2019			Segment
Selling, general and administrative expense:
	Acquisition integration services	$	1,012		$	441		Integrated Partners
	Intangible carrying value adjustment		980			–		Consumer
	Legal and professional fees		560			853		Corporate
	Legal settlements		(801	)		(100	)	Corporate
		$	1,751		$	1,194
Salary and employee benefits expense:
	Non-cash stock-based compensation	$	111		$	441		Consumer
	Non-cash stock-based compensation		30			225		Commercial
	Non-cash stock-based compensation		2			1		Integrated Partners
	Non-cash stock-based compensation		458			504		Corporate
		$	601		$	1,171
Other Income (Expenses):
	Debt extinguishment and modification	$	(1,523	)

	Gain on sale of business	$	107,239
	Attributable to NCIs		(45,148	)
	Gain on sale, net of NCIs	$	62,091

Priority does not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for various cash and non-cash reconciling items that would be difficult to predict with reasonable accuracy. For example, stock-based compensation expense would be difficult to estimate because it depends on the Company’s future hiring and retention needs, as well as the future fair market value of the Company’s common stock, all of which are difficult to predict and subject to constant change. As a result, the Company does not believe that a GAAP reconciliation would provide meaningful supplemental information about the Company’s outlook.

About Priority Technology Holdings, Inc.

Priority is a leading provider of merchant acquiring, integrated payment software and commercial payment solutions, offering unique product and service capabilities to its merchant network and distribution partners. Priority’s enterprise operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent opportunities. Additional information can be found at www.PRTH.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services, and other statements identified by words such as “may,” “will,” “should,” “anticipates,” “believes,” “expects,” “plans,” “future,” “intends,” “could,” “estimate,” “predict,” “projects,” “targeting,” “potential” or “contingent,” “guidance,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, our 2020 outlook and statements regarding our market and growth opportunities. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed, or implied by such forward-looking statements. These forward-looking statements may include, but are not limited to, statements about the effects of the COVID-19 pandemic on our revenues and financial operating results. Our actual results could differ materially, and potentially adversely, from those discussed or implied herein.

We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed in our SEC filings, including our most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q filed with the SEC on March 30, 2020 and November 12, 2020, respectively. These filings are available online at www.sec.gov or www.PRTH.com.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences we anticipate or affect us or our operations in the way we expect. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

PRIORITY TECHNOLOGY HOLDINGS, INC. Condensed Consolidated Statements of Operations *Unaudited*

(in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

REVENUES	$	108,962	$	93,883	$	298,251	$	273,671

OPERATING EXPENSES:
Costs of services	74,971		63,718		203,733		185,827
Salary and employee benefits	10,010		10,668		29,695		31,923
Depreciation and amortization	10,251		10,077		30,886		28,763
Selling, general and administrative	6,688		6,695		19,305		21,031
Total operating expenses	101,920		91,158		283,619		267,544

Income from operations	7,042		2,725		14,632		6,127

OTHER INCOME (EXPENSES):
Interest expense	(13,471)		(10,463)		(35,454)		(30,602)
Other income (expense), net	190		158		414		523
Debt extinguishment and modification costs	(1,523)		—		(1,899)		—
Gain on sale of business	107,239		—		107,239		—
Total other income (expenses), net	92,435		(10,305)		70,300		(30,079)

Income (loss) before income taxes	99,477		(7,580)		84,932		(23,952)

Income tax expense (benefit)	13,737		(1,736)		12,919		2,468

Net income (loss)	85,740		(5,844)		72,013		(26,420)

Less net income attributable to non-controlling interests	(45,348)		—		(45,348)		—

Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc.	$	40,392	$	(5,844)	$	26,665	$	(26,420)

Income (loss) per common share:
Basic and diluted	$	0.60	$	(0.09)	$	0.40	$	(0.39)

Weighted-average common shares and equivalents:
Basic	67,167		67,007		67,114		67,109
Diluted	67,446		67,007		67,212		67,109

PRIORITY TECHNOLOGY HOLDINGS, INC. Condensed Consolidated Balance Sheets

(in thousands)	Unaudited
	September 30, 2020		December 31, 2019
ASSETS
Current Assets:
Cash	$	21,695	$	3,234
Restricted cash	37,135		47,231
Accounts receivable, net of allowance for doubtful accounts	40,122		37,993
Prepaid expenses and other current assets	3,968		3,897
Current portion of notes receivable	1,435		1,326
Settlement assets	327		533
Total current assets	104,682		94,214

Notes receivable, less current portion	4,684		4,395
Property, equipment, and software, net	23,490		23,518
Goodwill	106,832		109,515
Intangible assets, net	97,239		182,826
Deferred income taxes, net	42,962		49,657
Other non-current assets	522		380
Total assets	$	380,411	$	464,505

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	23,744	$	26,965
Accrued residual commissions	22,028		19,315
Customer deposits and advance payments	3,449		4,928
Current portion of long-term debt	15,583		4,007
Settlement obligations	30,288		37,789
Total current liabilities	101,042		93,004

Long-term debt, net of current portion, discounts and debt issuance costs	371,206		485,578
Other non-current liabilities	6,424		6,612
Total long-term liabilities	377,630		492,190

Total liabilities	478,672		585,194

Stockholders’ deficit:
Preferred stock	—		—
Common stock	68		68
Additional paid-in capital	5,068		3,651
Treasury stock, at cost	(2,388)		(2,388)
Accumulated deficit	(101,009)		(127,674)
Total Priority Technology Holdings, Inc. stockholders’ deficit	(98,261)		(126,343)
Non-controlling interest in subsidiary	—		5,654
Total stockholders’ deficit	(98,261)		(120,689)

Total liabilities and stockholders’ deficit	$	380,411	$	464,505

PRIORITY TECHNOLOGY HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows Unaudited

(in thousands)	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	72,013	$	(26,420)
Adjustment to reconcile net income (loss) to net cash provided by operating activities:
Gain recognized on sale of business	(107,239)		—
Transaction costs included in gain recognized on sale of business	(4,372)
Depreciation and amortization of assets	30,886		28,763
Equity-classified and liability-classified stock compensation	1,627		3,354
Amortization of debt issuance costs and discounts	1,798		1,250
Benefit for deferred income taxes, net of change in allowance	6,695		2,468
Debt extinguishment and modification costs	1,523		—
Payment-in-kind interest	6,643		3,807
Other non-cash items, net	1,191		(157)
Change in operating assets and liabilities, excluding business sale:
Accounts receivable	(3,962)		(1,840)
Settlement assets and obligations, net	(7,295)		6,696
Prepaid expenses and other current assets	(296)		(810)
Notes receivable	(398)		(376)
Income taxes payable	6,026		—
Accounts payable and other accrued liabilities	287		(6,091)
Customer deposits and advance payments	(1,479)		250
Other assets and liabilities, net	(512)		(277)
Net cash provided by operating activities	3,136		10,617

Cash flows from investing activities:
Sale of business	179,416		—
Additions to property, equipment and software	(6,011)		(8,662)
Acquisitions of intangible assets	(4,415)		(81,777)
Notes receivable loan funding	—		(3,000)
Other investing activity	—		(184)
Net cash provided by (used in) investing activities	168,990		(93,623)

Cash flows from financing activities:
Proceeds from issuance of long-term debt, net of issue discount	—		69,650
Repayment of long-term debt	(109,505)		(2,827)
Debt modification costs (paid) refunded	(2,749)		83
Borrowings under revolving credit facility	7,000		14,000
Repayments under revolving credit facility	(7,505)		(2,500)
Repurchases of common stock	—		(2,388)
Redemption of redeemable non-controlling interest of subsidiary	(5,654)		—
Profit distributions to redeemable non-controlling interests of subsidiaries	(45,348)		—
Net cash (used in) provided by financing activities	(163,761)		76,018

Net change in cash and restricted cash:
Net increase (decrease) in cash and restricted cash	8,365		(6,988)
Cash and restricted cash at beginning of period	50,465		33,831
Cash and restricted cash at end of period	$	58,830	$	26,843

PRIORITY TECHNOLOGY HOLDINGS, INC. Reportable Segments’ Results Unaudited

(in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019

Consumer Payments:
Revenue	$	99,301		$	82,742		$	267,039		$	243,205
Operating expenses	88,203			75,528			241,519			220,909
Income from operations	$	11,098		$	7,214		$	25,520		$	22,296
Operating margin	11.2		%	8.7		%	9.6		%	9.2		%
Depreciation and amortization	$	8,481		$	8,302		$	25,721		$	24,215

Key indicators:
Merchant bankcard processing dollar value	$	11,235,068		$	10,566,501		$	30,632,724		$	31,551,405
Merchant bankcard transaction volume	122,623			131,646			334,896			382,676

Commercial Payments:
Revenue	$	4,995		$	6,338		17,017			19,492
Operating expenses	4,826			6,720			15,609			20,607
Income (loss) from operations	$	169		$	(382)		$	1,408		$	(1,115)
Operating margin	3.4		%	(6.0)		%	8.3		%	(5.7)		%
Depreciation and amortization	$	77		$	69		$	231		$	248

Key indicators:
Merchant bankcard processing dollar value	$	58,304		$	92,290		$	195,229		$	236,716
Merchant bankcard transaction volume	24			26			70			84

Integrated Partners:
Revenue	$	4,666		$	4,803		$	14,195		$	10,974
Operating expenses	4,413			3,800			12,729			9,632
Income from operations	$	253		$	1,003		$	1,466		$	1,342
Operating margin	5.4		%	20.9		%	10.3		%	12.2		%
Depreciation and amortization	$	1,403		$	1,299		$	4,048		$	3,086

Key indicators:
Merchant bankcard processing dollar value	$	105,537		$	119,747		$	352,144		$	259,894
Merchant bankcard transaction volume	371			421			1,207			913

Income from operations of reportable segments	$	11,520		$	7,835		$	28,394		$	22,523
Less: Corporate expense	(4,478)			(5,110)			(13,762)			(16,396)
Consolidated income from operations	$	7,042		$	2,725		$	14,632		$	6,127
Corporate depreciation and amortization	$	290		$	407		$	886		$	1,214

Key indicators:
Merchant bankcard processing dollar value	$	11,398,909		$	10,778,538		$	31,180,097		$	32,048,015
Merchant bankcard transaction volume	123,018			132,093			336,173			383,673

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006102/en/

Investor and Media Inquiries:

Chris Kettmann

773-497-7575

[email protected]

KEYWORDS: United States North America Georgia

INDUSTRY KEYWORDS: Professional Services Online Retail Data Management Retail Technology Software Banking

MEDIA:

November 12, 2020 5:07 pm

Blackbaud Social Good Startup Program Supports Emerging Companies to Drive Innovation

Applications for the January 2021 cohort are open through December 15, 2020

PR Newswire

CHARLESTON, S.C., Nov. 12, 2020 /PRNewswire/ — Blackbaud (NASDAQ: BLKB), the world’s leading cloud software company powering social good, is accepting applications for the Blackbaud Social Good Startup Program, a unique, yearlong program designed to drive innovation outside of the company’s walls that was announced at bbcon 2020.

Through the program, Blackbaud will support the early-stage growth of companies that have the potential to impact the Ecosystem of Good^® with their innovative solutions. The program builds on last year’s Social Good Startup Challenge. Participants will receive curated access to Blackbaud resources, marketing opportunities and nondilutive grant funding.

Blackbaud shared that, in alignment with its commitment to diversity, it will focus its January 2021 cohort on Black, Indigenous, and People of Color (BIPOC) founders. Blackbaud is honored to partner with Opportunity Hub, a leading technology, startup and venture ecosystem building platform, to foster a diverse, equitable and inclusive Ecosystem of Good^®.

“The social good community has massive opportunity and meaningful challenges before us that will take diversity of thought and experience to solve,” said Rosalyn Lemieux, senior director of platform product management at Blackbaud. “It’s our goal to help drive innovation in this space by partnering with emerging companies that are strengthening the social good community, so that together we can build a better world.”

Participants in the inaugural 2020 cohort shared highlights of their experience in a recent blog post. Sangeeth Peruri, CEO of OutreachCircle, a California-based supporter management, relational organizing and P2P texting platform, said, “Working with Blackbaud has been great. We’ve learned a ton; the Blackbaud Labs team is great to work with, and having OutreachCircle’s integration with Raiser’s Edge NXT listed in the new Blackbaud Marketplace has been a great tool in our shed while growing our nonprofit business.”

Blackbaud is accepting applications now through December 15 for the January 2021 cohort. Applicants must be early-stage software companies with at least one BIPOC founder and a product that extends or complements Blackbaud’s vertical solutions. Up to 10 startups will be considered for this cohort.

About Blackbaud

Blackbaud (NASDAQ: BLKB) is the world’s leading cloud software company powering social good. Serving the entire social good community—nonprofits, higher education institutions, K–12 schools, healthcare organizations, faith communities, arts and cultural organizations, foundations, companies and individual change agents—Blackbaud connects and empowers organizations to increase their impact through cloud software, services, expertise and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and CRM, marketing, advocacy, peer-to-peer fundraising, corporate social responsibility, school management, ticketing, grantmaking, financial management, payment processing and analytics. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina, and has operations in the United States, Australia, Canada, Costa Rica and the United Kingdom. For more information, visit www.blackbaud.com or follow us on Twitter, LinkedIn, Instagram and Facebook.

Media Inquiries
[email protected]

Forward-looking Statements

Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties, including statements regarding expected benefits of products and product features. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organization; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud’s investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

View original content to download multimedia:http://www.prnewswire.com/news-releases/blackbaud-social-good-startup-program-supports-emerging-companies-to-drive-innovation-301172418.html

SOURCE Blackbaud, Inc.

November 12, 2020 5:06 pm

OMNIQ Corp. Reports Strong Sales of $15.8 Million for Third Quarter of 2020, up 21% Year over Year

Strong
s
equential
r
evenue
g
rowth
of
2
5
% over Q2 2020
Received orders from companies and organizations
in diverse sectors,
in
cluding
healthcare,
f
ood,
logistics,
public safety, and basic materials

SALT LAKE CITY, Nov. 12, 2020 (GLOBE NEWSWIRE) — OMNIQ Corp. (OTCQB: OMQS) (“OMNIQ” or “the Company”), a provider of Supply Chain and Artificial Intelligence (AI)-based solutions, today announced its financial results for the three- and nine-month periods ended September 30, 2020.

Third quarter and recent highlights include:

Generated sales of $15.8 million for the third quarter of 2020, a 21% increase from the same quarter last year and a 25% increase from the second quarter of 2020
Announced a partnership with Zebra Technologies that integrates OMNIQ’s AI-based machine vision technology with Zebra’s MotionWorks location solution for advanced logistics yard management
Announced orders totaling $3.5 million from a worldwide leader in third-party logistics for the supply of mobile data collection devices for order fulfillment and warehouse management
Announced a $4.0-million order from a leading healthcare and pharmaceutical supplier for the supply of mobile data collection devices
Received an additional $1.0 million in orders from a leading U.S. supermarket chain
Awarded a $1.0-million purchase order by a leading sales and marketing agency focused on supporting consumer packaged goods companies and retailers
Awarded a $1.8-million project related to the implementation of an advanced delivery logistics initiative for a global metal solutions company
Began deployment of AI-based SeeDOT™ systems for accurate, automated and real-time monitoring of commercial vehicles at weigh and safety stations in a Southern U.S. state
Launched e-commerce platform targeting small- and medium-sized businesses
Received order for AI-based machine vision solution for homeland security and public safety system applications for a Himalayan country
Cash balance at September 30, 2020 grew to over $5.0 million from $1.6 million at December 31, 2019

“Our strong top-line growth in the third quarter, both year over year and sequentially, reflects the underlying strength, quality and reliability of our product offerings, combined with the quality and strength of our unique, diversified customer base,” said Shai Lustgarten, CEO of OMNIQ. “As we stated in our recent Letter to Shareholders in October, we are seeing traction in our Supply Chain Mobility and Smart City markets across multiple industries. Specifically, our “contactless” technologies apply to many organizations that are increasingly focused on productivity, health, and safety due to the ongoing COVID-19 pandemic. Our third-quarter results reflect the successful efforts of our sales team and the increasing interest in our technology solutions, and thanks to our investments in R&D in the area of advanced AI technology, we started the fourth quarter with increasing demand for our AI-based solutions that we expect to improve our gross margin in the near future as we work to take the Company towards profitability.

“Despite the economic uncertainties resulting from the pandemic, we remain steadfast in cementing our position as a supplier of choice for Internet-of-Things-enabled supply chain solutions, as well as advanced AI-based machine vision solutions powered by deep neural-network algorithms for Fortune 500 companies, institutions, government agencies and municipalities around the world. We pride ourselves in the accuracy and efficiency of our object identification technologies, and helping our growing roster of customers with a broad range of applications, from supply chain logistics, to parking and traffic management, to border control, to campus safety, to law enforcement, and many more. We see tremendous opportunity in our fast-growing target markets and our team at OMNIQ is working relentlessly to deliver growth and to create value for our shareholders. We also believe that our plan to uplist to a senior stock exchange, if completed, will increase investor awareness and broaden our institutional and stakeholder base.”

Third
Quarter 2020 Financial Results

OMNIQ reported revenue of $15.8 million for the quarter ended September 30, 2020, an increase of 20.9% from $13.1 million in the third quarter of 2019. Sequentially, revenue increased by 25% from $12.7 million in the second quarter of 2020. The revenue increase reflects higher demand related to the COVID-19 pandemic from certain customers during the quarter as well as continued traction in our markets. The higher cost of goods sold in the third quarter of 2020, which reflects an unfavorable change in the product mix with large lower-margin orders related to the COVID-19 pandemic to certain large customers accounting for a greater percentage of overall sales, resulted in a lower gross margin than the third quarter last year. Total operating expenses for the quarter were $5.8 million, compared with $4.2 million in the third quarter of 2019. The increase was largely attributable to an increase in non-cash stock-based compensation awarded to professional service providers.

Net loss for the quarter was $3.8 million, or a loss of $0.83 per basic share, compared with a loss of $1.4 million, or a loss of $0.38 per basic share, for the third quarter of last year. The increase in net loss is mainly attributable to lower gross margin due to product mix and – in spite of slightly lower salary and employee benefits – higher operating expenses mainly attributable to non-cash stock-based compensation paid for professional services during the quarter, compared with the same period in 2019.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the third quarter of 2020 was a loss of $2.4 million, compared with a loss of $0.3 million in the third quarter of 2019. Adjusted EBITDA for the third quarter of 2020 was a loss of $0.9 million, compared with Adjusted EBITDA of $0.5 million in the third quarter last year.

First
Nine
Months 2020 Financial Results

OMNIQ reported revenues of $42.3 million for the first nine months of 2020, a decrease of 7.7% compared with the first nine months of 2019. The decrease was primarily related to stronger fulfillment and deliveries by the Company during the first nine months of 2019. The higher cost of goods, which reflects an unfavorable change in product mix with several large lower-margin orders related to the COVID-19 pandemic to certain large customers accounting for a greater percentage of overall sales, resulted in a decrease in gross margin to 19.9% from 25.6% in the first nine months of 2019. Total operating expenses for the first nine months of 2020 were $14.8 million compared with $12.6 million for the same period last year. The increase in operating expense was largely related to an increase in non-cash stock-based compensation granted to professional service providers as well as increased research and development spending.

Net loss for the first nine months of 2020 was $8.6 million, or a loss of $2.03 per basic share, compared with a loss of $2.6 million, or a loss of $0.64 per basic share, for the first nine months of 2019.

EBITDA for the first nine months of 2020 was a loss of $5.0 million, compared with EBITDA of $781 thousand for the first nine months of 2019. Adjusted EBITDA for the first nine months of 2020 was a loss of $2.3 million, compared with adjusted EBITDA of $2.1 million for the same period in 2019.

Conference Call Information
OMNIQ will host a conference call and webcast on Friday, November 13, 2020, at 11:00 a.m. Eastern Time to discuss financial results for the third quarter ended September 30, 2020.

To access the live webcast, please click on this webcast link to register, or go to the Company’s Investor Relations page by clicking on this OMNIQ IR link.

To participate in the call by phone, please dial (877) 407-9210 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8049.

A replay of the teleconference will be available until December 13, 2020 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 38548.

About OMNIQ Corp.

OMNIQ Corp. (OTCQB: OMQS) provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real-time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments.

OMNIQ’s customers include government agencies and leading Fortune 500 companies from several sectors, including manufacturing, retail, distribution, food and beverage, transportation and logistics, healthcare, and oil, gas, and chemicals. Since 2014, annual revenues have grown to more than $50 million from clients in the USA and abroad.

The Company currently addresses several billion-dollar markets, including the Global Safe City market, forecast to grow to $29 billion by 2022, and the Ticketless Safe Parking market, forecast to grow to $5.2 billion by 2023. For more information, visit www.omniq.com.

Information about Forward-Looking Statements

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

This release contains “forward-looking statements” that include information relating to future events and future financial and operating performance. The words “anticipate”, “may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for the Company’s products particularly during the current health crisis , the introduction of new products, the Company’s ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company’s liquidity and financial strength to support its growth, the Company’s ability to manage credit and debt structures from vendors, debt holders and secured lenders, the Company’s ability to successfully integrate its acquisitions, and other information that may be detailed from time-to-time in OMNIQ Corp.’s filings with the United States Securities and Exchange Commission. Examples of such forward looking statements in this release include, among others, statements regarding revenue growth, driving sales, operational and financial initiatives, cost reduction and profitability, and simplification of operations. For a more detailed description of the risk factors and uncertainties affecting OMNIQ Corp., please refer to the Company’s recent Securities and Exchange Commission filings, which are available at http://www.sec.gov. OMNIQ Corp. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless otherwise required by law.

Investor Contact:

888-309-9994
[email protected]

OMNIQ CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the three months						For the nine months
	ending September 30,						ending September 30,
(In thousands, except share and per share data)	2020			2019			2020			2019
Revenues
Total Revenues	$	15,833		$	13,097		$	42,309		$	45,843

Cost of goods sold
Cost of goods sold		13,024			9,601			33,886			34,123

Gross profit		2,809			3,496			8,423			11,720

Operating expenses
General and administrative		837			727			2,414			1,941
Salary and employee benefits		2,581			2,700			7,666			7,763
Depreciation and amortization		594			536			1,696			1,620
Professional fees		1,818			268			3,018			1,226
Total operating expenses		5,830			4,231			14,794			12,550

Loss from operations		(3,021	)		(735	)		(6,371	)		(830	)

Other income (expenses):
Interest expense		(744	)		(618	)		(1,957	)		(1,769	)
Other (expenses) income		(16	)		(90	)		(318	)		(9	)
Total other expenses		(760	)		(708	)		(2,275	)		(1,778	)

Net Loss Before Income Taxes		(3781	)		(1,443	)		(8,646	)		(2,608	)

Provision for Income Taxes
Current		–			–			–			–
Total Provision for Income Taxes		–			–			–			–

Net Loss attributable to OMNIQ Corp.	$	(3,781	)	$	(1,443	)	$	(8,646	)	$	(2,608	)

Foreign currency translation adjustment		(16	)		12			(30	)		12

Comprehensive loss		(3,797	)		(1,431	)		(8,676	)		(2,596	)

Reconciliation of net loss to net loss attributable to common shareholders
Net loss		(3,781	)		(1,443	)		(8,646	)		(2,608	)

Less: Preferred stock – Series C dividend		(32	)		(48	)		(158	)		(141	)

Net loss attributable to the common stockholders	$	(3,813	)	$	(1,491	)	$	(8,804	)	$	(2,749	)

Net (loss) per share – basic	$	(0.83	)	$	(0.38	)	$	(2.03	)	$	(0.64	)

Weighted average number of common shares outstanding – basic		4,588,944			3,879,159			4,339,634			3,865,647

OMNIQ CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of
	September 30, 2020			December 31, 2019
(In thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	5,066		$	1,615
Accounts receivable, net		9,901			6,694
Inventory		1,671			1,889
Prepaid expenses		782			362
Other current assets		9			65
Total current assets		17,429			10,625

Property and equipment, net of accumulated depreciation of $555 and $2,195, respectively		332			463
Goodwill		14,695			13,921
Trade name, net of accumulated amortization of $1,156 and $2,932, respectively		1,156			1,458
Customer relationships, net of accumulated amortization of $4,885 and $6,578, respectively		4,885			6,012
Other intangibles, net of accumulated amortization of $1,104 and $185, respectively		1,104			1,138
Cash, restricted		533			533
Right of use lease asset		91			131
Other assets		106			172
Total assets	$	40,331		$	34,453

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	28,480		$	18,694
Line of credit		3,235			1,365
Accrued payroll and sales tax		1,542			1,556
Notes payable, related parties – current portion		480			1,025
Notes payable – current portion		6,997			6,497
Lease liability – current portion		38			54
Other current liabilities		1,267			1,599
Total current liabilities		42,039			30,790

Long term liabilities
Notes payable, related party, less current portion		774			1,172
Accrued interest and accrued liabilities, related party		50			76
Notes payable, less current portion		352			143
Lease liability		57			80
Other long term liabilities		220			384
Total liabilities		43,492			32,645

Stockholders’ equity (deficit)
Series A Preferred stock; $0.001 par value; 1,000,000 shares designated, 0 shares issued and outstanding		–			–
Series B Preferred stock; $0.001 par value; 1 share designated, 0 shares issued and outstanding		–			–
Series C Preferred stock; $0.001 par value; 5,000,000 shares designated, 2,145,030 and 4,828,530 shares issued and outstanding, respectively		2			5
Common stock; $0.001 par value; 15,000,000 shares authorized; 4,634,637 and 3,960,405 shares issued and outstanding, respectively.		5			4
Additional paid-in capital		50,710			46,861
Accumulated (deficit)		(53,849	)		(45,063	)
Accumulated other comprehensive loss		(29	)		1
Total stockholders’ equity (deficit)		(3,161	)		1,808
Total liabilities and stockholders’ equity (deficit)	$	40,331		$	34,453

OMNIQ CORP
.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(UNAUDITED)

	For the three months						For the nine months
	ending September 30,						ending September 30,
(In thousands, except share and per share data)	2020			2019			2020			2019
EBITDA Calculation
Net loss	$	(3,781	)	$	(1,443	)	$	(8,646	)	$	(2,608	)
Depreciation & amortization		594			536			1,696			1,620
Interest expense		744			618			1,957			1,769
Income taxes		–			–			–			–
EBITDA	$	(2,443	)	$	(289	)	$	(4,993	)	$	781

Adjusted EBITDA calculation
Net loss	$	(3,781	)	$	(1,443	)	$	(8,646	)	$	(2,608	)
Depreciation & amortization		594			536			1,696			1,620
Interest expense		744			618			1,957			1,769
Income taxes		–			–			–			–
Stock compensation		1,522			670			2,275			1,093
Non-cash penalty on conversion agreements		–			–			260			–
Nonrecurring one-time income/expenses		16			117			169			180
Adjusted EBITDA	$	(905	)	$	498		$	(2,289	)	$	2,054

For further information contact:
		Fairfax
		John Varnell, Vice President, Corporate Development
		at (416) 367-4941

		Allied World
		Rachel Pankratz
		Vice President, Global Branding
		Marketing & Communications
		+44-0207-220-0630
		[email protected]

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