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Tencent Announces 2020 Third Quarter Results

PR Newswire

HONG KONG, Nov. 12, 2020 /PRNewswire/ — Tencent Holdings Limited (“Tencent” or the “Company”, 00700.HK), a leading provider of Internet value added services in China, today announced the unaudited consolidated results for the third quarter (“3Q2020”) ended September 30, 2020.


3Q2020


Key Highlights


Revenues: +29% YoY, non-IFRS[1] profit attributable to equity holders of the Company: +32% YoY

  • Total r
    evenues were RMB125,447 million (USD18,421 million[2]), an increase of 29% over the third quarter of 2019 (“YoY”).
  • On a
    n
    on-IFRS basis
    , which is intended to reflect core earnings by excluding certain one-time and/or non-cash items:
     
    –  Operating profit was RMB38,116 million (USD5,597 million), an increase of 34% YoY. Operating margin increased to 30% from 29% last year.
    –  Profit for the period was RMB33,325 million (USD4,893 million), an increase of 33% YoY. Net margin increased to 27% from 26% last year.
    –  Profit attributable to equity holders of the Company for the quarter was RMB32,303 million (USD4,743 million), an increase of 32% YoY.
    –  Basic earnings per share were RMB3.402. Diluted earnings per share were RMB3.314.
     
  • On an IFRS basis:
     
    –  Operating profit was RMB43,953 million (USD6,454 million), an increase of 70% YoY. Operating margin increased to 35% from 27% last year.
    –  Profit for the period was RMB38,899 million (USD5,712 million), an increase of 85% YoY. Net margin increased to 31% from 22% last year. 
    –  Profit attributable to equity holders of the Company for the quarter was RMB38,542 million (USD5,660 million), an increase of 89% YoY.
    –  Basic earnings per share were RMB4.059. Diluted earnings per share were RMB3.964.
     
  • Total cash were RMB265,892 million (USD39,044 million) at the end of the quarter.

[1] Non-IFRS adjustments (formerly referred as non-GAAP) excludes share-based compensation, M&A related impact such as net (gains)/losses from investee companies, amortisation of intangible assets and impairment provision/(reversals), as well as income tax effects.

[2] Figures stated in USD are based on USD1 to RMB6.8101

Mr. Ma Huateng, Chairman and CEO of Tencent, said, “This quarter marked the second anniversary of our strategic organisation upgrade, which was intended to enhance our strength in Consumer Internet and extend our presence to Industrial Internet. While the upgrade was designed to bear fruit over the longer run, we are already seeing initial benefits in areas such as consolidating our advertising services, rejuvenating our product and content platforms, growing our cloud and SaaS businesses and building an internal open source code base. In the face of public health, macroeconomic, and geopolitical challenges, we will seek to sharpen our focus, innovate, and collaborate with our partners in order to better serve our users, customers and the society at large.”

3Q
2020 Financial Review

Revenues from VAS increased by 38% to RMB69,802 million for the third quarter of 2020 on a year-on-year basis. Online games revenues grew by 45% to RMB41,422 million. The increase was primarily due to revenue growth of our smart phone games, including domestic titles such as Peacekeeper Elite and Honour of Kings, as well as overseas titles. Total smart phone games revenues (including smart phone games revenues attributable to our social networks business) were RMB39,173 million and PC client games revenues were RMB11,631 million for the third quarter of 2020. Social networks revenues increased by 29% to RMB28,380 million. The increase reflected contributions from digital content services including HUYA’s live streaming service, our video subscription service, and our music subscription service, as well as from in-game virtual item sales. 

Revenues from Online Advertising increased by 16% to RMB21,351 million for the third quarter of 2020 on a year-on-year basis, benefitting from wider adoption of our algorithmic advertisement buying solutions, as well as rapid demand growth from categories such as education, Internet services and eCommerce platforms, and recovered demand from sectors such as real estate and automobiles. Social and others advertising revenues grew by 21% to RMB17,752 million. The increase was primarily driven by higher revenues flowing from Weixin Moments due to increased inventories and eCPMs, and our mobile advertising network revenue growth on higher eCPMs as advertisers responded favorably to our video ad formats. Media advertising revenues decreased 1% to RMB3,599 million. The slower decline versus prior quarters benefitted from key Tencent Video content releases, as well as inventory and impression growth from our music platforms.

Revenues from FinTech and Business Services increased by 24% to RMB33,255 million for the third quarter of 2020 on a year-on-year basis. The increase was mainly due to higher revenues from commercial payment and wealth management, while our Business Services revenue growth slowed down due to lingering impact from the pandemic on project development and new contract sign-ups, as well as non-recurring adjustments to certain IaaS contracts.

Other Key Financial Information for
3Q
2020

EBITDA was RMB45,055 million, up 27% YoY. Adjusted EBITDA was RMB47,849 million, up 26% YoY.

Capital expenditures were RMB8,684 million, up 31% YoY.

Free cash flow* was RMB28,127 million, stable YoY.

As at September 30, 2020, net cash position totalled RMB6,363 million. Fair value of our stakes in listed investee companies (excluding subsidiaries) totalled RMB890,730 million, compared to RMB726,244 million as at June 30, 2020.


* Starting from 2020, free cash flow was adjusted by subtracting payments for media content and lease liabilities, in addition to subtracting payments for capital expenditure from the operating cash flow. Restated free cash flow was RMB16.8 billion in 1Q2019, RMB12.6 billion in 2Q2019, RMB28.1 billion in 3Q2019, and RMB31.3 billion in 4Q2019, respectively.

Operating Metrics


As at


3
0
 September


2020

As at

30 September

2019

Year-

on-year

change

As at

30 June

2020

Quarter-on-
quarter

change

(in millions, unless specified)

Combined MAU of Weixin and

   WeChat


1,212.8

1,151.0

5.4%

1,206.1

0.6%

Smart device MAU of QQ 


617.4

653.4

-5.5%

647.6

-4.7%

Fee-based VAS registered
   subscriptions


213.4

170.6

25.1%

203.4

4.9%

Business Review and Outlook


Communication and Social

For Weixin, we are facilitating more convenient access to high frequency services within the Weixin Pay interface by regrouping such services into four verticals, namely Financial Services, Daily Services, Travel & Transportation, and Shopping & Entertainment. For the Travel & Transportation vertical, we connect automobile owners with a range of car services, such as car wash and car insurance, as well as general users with public transportation services, such as transit codes and bus schedules. We have now extended these mobility services to ten provinces and municipalities in China. We are also enhancing the efficiency of content and service discovery via cross-referencing within Weixin properties, so that users can press-to-search words and phrases that appear in chat boxes and find content and services from Mini Programs, Official Accounts and Moments. In Moments, contributors can create hashtags in posts, and their friends can click these hashtags and access deep-linked search results from Official Accounts, video feeds and H5 pages.

In QQ chats and groups, we enabled users to watch Tencent Video together while they are making video calls, to compete with friends via battle-mode Mini Games, and to co-edit classwork via our online collaborative tool, Tencent Docs. The launch of QQ’s Mini World video and image feed service has increased QQ’s appeal among the younger audience. Through Mini World, we encourage contributors to create videos and images, and share them beyond their existing friend circle. We recommend attractive content in Mini World to QQ users based on their interest graphs, enabling users to explore more content and communities. These initiatives, along with the growing demand for real-time video chatting since the onset of the pandemic, drove daily time spent per QQ user up by a teens percentage year-on-year.


Online Games

Our online game revenue increased year-on-year, driven by healthy growth in paying users in China and international markets. For smart phone games, we celebrated the fifth anniversary for Honour of Kings, which exceeded 100 million average DAU for the first ten months of 2020. Since we first released the game in 2015, we have expanded the user base of Honour of Kings through constant innovation and user-centric operations, backed up by our robust technology infrastructure. We aim to unleash the potential of this IP by rolling out two new games, an animated series and a live action drama series based on the Honour of Kings’ world. While our best-known games such as Honour of Kings attract the most attention, lesser-known games also contribute to our game business’ stable growth. For example, Naruto Mobile, an internally developed game based on the popular anime IP, has recently become one of the top fighting games in China with all-time high DAU and revenue, despite being first released over four years ago. This speaks to our team’s success in making ongoing game enhancements, such as refining a highly popular PvP game mode. As for new games, we believe that our Moonlight Blade Mobile represents 2020’s most successful launch of a new MMO role playing game in China, and our battle arena game League of Legends Wild Rift is currently among the most-downloaded mobile games across its available markets, according to AppAnnie.

We have a constructive view on PC game opportunities as the IP and influence of our major franchises remain notably robust. League of Legends released a major thematic event, “Spirit Blossom Festival”, coordinating the release of new champions, new skins, and new event passes. The recent League of Legends World Championship in Shanghai attracted a sizeable audience globally. Tencent Video aired a highly-rated drama series based on our CrossFire game during the quarter, which tied into a new in-game mode and skins, reviving the game’s popularity and monetisation. Valorant became a breakout hit in the tactical shooter genre and was widely watched on Twitch.


Digital Content

Our fee-based VAS subscriptions increased 25% year-on-year to 213 million, primarily driven by video and music content subscriptions. Video subscriptions expanded 20% year-on-year to 120 million. Our self-commissioned drama and animated series such as Nothing But Thirty, The Song of Glory and The Land of Warriors Season 3 have attracted additional subscribers for Tencent Video. We successfully converted trial users acquired during summer promotions to regular video subscribers. Music subscriptions grew 46% year-on-year to 52 million, due to an expanded paid content library and a higher retention rate.


Online Advertising

Following the COVID-19 outbreak, overall China advertising activity appears to have largely returned to normal conditions, albeit with a few industry exceptions lagging (for example, the travel industry), and with substantial changes in advertiser behavior (for example, toward retargeting and toward video format advertisements). We believe these changes, along with our own initiatives, have contributed to our increasing presence and relevance in China’s advertising market. By category, advertising spending from sectors such as education, Internet services and eCommerce platforms experienced rapid secular growth through the pandemic, and sustained robust year-on-year growth during the quarter. Advertising spending from cyclical categories, such as automobiles and real estate, picked up year-on-year. Advertising spending from categories which dipped during the pandemic, such as financial services and consumer staples, were flattish year-on-year. Internally, we upgraded our algorithmic advertising buying solutions, delivering higher conversion rates for advertisers and attracting increased share of budgets towards our services. We also provided incremental advertising inventories in casual game apps, eSports events and live streaming platforms.

For social and others advertising, Weixin properties achieved solid revenue growth year-on-year, driven by higher impressions and eCPM. Our mobile advertising network revenue grew rapidly year-on-year as advertisers responded favorably to our video formats, such as rewarded video advertisements.

For media advertising, the rate of revenue decrease moderated to minus 1% year-on-year. We captured sponsorship advertising demand via self-commissioned variety shows such as The Coming One Season 4 and drama series such as Nothing But Thirty.


FinTech

Our FinTech revenue grew healthily at a similar rate to prior quarters, led by the continued expansion of our commercial payment and wealth management businesses, while our social payment and micro lending businesses grew at moderate rates. Our TPV increased over 30% year-on-year as commercial payment DAU and transaction value per user grew robustly year-on-year, mainly driven by our deeper penetration in offline transactions and expansion of our Mini Programs transactions in retail categories such as grocery and apparel.

The number of our wealth management customers increased over 50% year-on-year, and our aggregated customer assets expanded at a similar rate. We believe that LiCaiTong’s penetration rate among our payment users is still quite low, and we are seeking to further grow our wealth management customer base at a measured rate via long-term initiatives such as investor education programs and an expanded product offering.


Cloud and Other Business Services

During the quarter, cloud and other business services revenue were affected by the lingering impact from pandemic, causing delays in project deployment and new contract sign-ups, as well as by non-recurring adjustments to certain IaaS contracts. The year-on-year revenue growth rate was therefore lower than previous quarters, which we expect to be temporary in nature.

We saw rising demand for PaaS solutions, in particular security PaaS, from financial, healthcare and Internet services clients. We also upgraded our SaaS enterprise productivity toolkit which consists of three signature products, namely WeCom (the enterprise version of Weixin), Tencent Meeting, and Tencent Docs. Customers are increasingly adopting WeCom for workplace communication, and its DAU grew over 100% year-on-year. More than 100 million users have registered for our video communication solution Tencent Meeting. In September, we released an enterprise version for Tencent Meeting, with enhanced features such as webinars, simultaneous interpretation, and connection with enterprises’ existing conference room systems. We further integrated Tencent Docs, our cloud-based document processing tool, with other Tencent products, including QQ, QQ Browser and our CRM SaaS products.

For other detailed disclosure, please refer to our website http://www.tencent.com/en-us/investors.html
, or follow us via Weixin Official Account (Weixin ID: Tencent_IR):


About Tencent

Tencent uses technology to enrich the lives of Internet users.

Our communication and social platforms, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targeted advertising platform helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support our partners’ business growth and assist their digital upgrade.

Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) are listed on the Main Board of the Stock Exchange of Hong Kong.

For investor and media enquiries, please contact: IR#tencent.com

Catherine Chan

Tel: (86) 755 86013388 / (852) 3148 5100 ext. 888369

Email: cchan#tencent.com

Wendy Huang

Tel: (86) 755 86013388 / (852) 3148 5100 ext. 850839

Email: wendyyhuang#tencent.com

Jane Yip

Tel: (86) 755 86013388 / (852) 3148 5100 ext. 868961

Email: janeyip#tencent.com

PH Cheung

Tel: (86) 755 86013388 / (852) 3148 5100 ext. 868919

Email: phcheung#tencent.com

Non-IFRS Financial Measures

To supplement the consolidated results of the Group prepared in accordance with IFRS, certain additional non-IFRS financial measures (in terms of operating profit, operating margin, profit for the period, net margin, profit attributable to equity holders of the Company, basic EPS and diluted EPS), have been presented in this press release. These unaudited non-IFRS financial measures should be considered in addition to, not as a substitute for, measures of the Group’s financial performance prepared in accordance with IFRS. In addition, these non-IFRS financial measures may be defined differently from similar terms used by other companies.

The Company’s management believes that the non-IFRS financial measures provide investors with useful supplementary information to assess the performance of the Group’s core operations by excluding certain non-cash items and certain impact of M&A transactions. In addition, non-IFRS adjustments include relevant non-IFRS adjustments for the Group’s major associates based on available published financials of the relevant major associates, or estimates made by the Company’s management based on available information, certain expectations, assumptions and premises.

Forward-Looking Statements

This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realised in future. Underlying the forward-looking statements is a lot of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.

 

 


CONSOLIDATED INCOME STATEMENT

RMB in million, unless specified


Unaudited


Unaudited


3Q2020


3Q2019


3Q2020


2Q2020


Revenues


125,447

97,236


125,447

114,883

VAS


69,802

50,629


69,802

65,002

FinTech and Business Services


33,255

26,758


33,255

29,862

Online Advertising


21,351

18,366


21,351

18,552

Others


1,039

1,483


1,039

1,467


Cost of revenues


(68,800)

(54,757)


(68,800)

(61,673)


Gross profit


56,647

42,479


56,647

53,210



Gross margin


45%

44%


45%

46%

Interest income


1,864

1,674


1,864

1,749

Other gains, net


11,551

932


11,551

8,607

Selling and marketing expenses


(8,920)

(5,722)


(8,920)

(7,756)

General and administrative expenses


(17,189)

(13,536)


(17,189)

(16,499)


Operating profit


43,953

25,827


43,953

39,311



Operating margin


35%

27%


35%

34%

Finance costs, net


(1,945)

(1,747)


(1,945)

(2,005)

Share of profit/(loss) of associates and joint ventures


2,630

234


2,630

(295)


Profit before income tax


44,638

24,314


44,638

37,011

Income tax expense


(5,739)

(3,338)


(5,739)

(4,557)


Profit for the period


38,899

20,976


38,899

32,454



Net margin


31%

22%


31%

28%


Attributable to:

    Equity holders of the Company


38,542

20,382


38,542

33,107

    Non-controlling interests


357

594


357

(653)

Non-IFRS profit

   attributable to equity holders of the Company


32,303

24,412


32,303

30,153


Earnings per share for profit attributable to
   equity holders of the Company



   (in RMB per share)

– basic


4.059

2.151


4.059

3.491

– diluted


3.964

2.127


3.964

3.437

 

 


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

RMB in millions, unless specified


Unaudited


3Q2020

3Q2019


Profit for the period


38,899

20,976


Other comprehensive income, net of tax:


Items that may be subsequently reclassified to profit or loss

Share of other comprehensive income/(loss) of associates and joint
   ventures


192

(21)

Transfer of share of other comprehensive income to profit or loss upon
   deemed disposal of associates


–

(3)

Currency translation differences


(5,731)

2,069

Other fair value gains/(losses)


169

(475)


Items that will not be subsequently reclassified to profit or loss

Net gains/(losses) from changes in fair value of financial assets at fair
   value through other comprehensive income


9,535

(3,213)

Other fair value gains/(losses)


202

(96)


4,367

(1,739)


Total comprehensive income for the
period


43,266

19,237


Attributable to:

    Equity holders of the Company


43,082

18,885

    Non-controlling interests


184

352

 


O
THER FINANCIAL INFORMATION

RMB in millions, unless specified


Unaudited


3Q2020

2Q2020

3Q2019

EBITDA (a)


45,055

40,525

35,378

Adjusted EBITDA (a)


47,849

43,742

38,123

Adjusted EBITDA margin (b)


38%

38%

39%

Interest and related expenses


1,855

1,822

2,086

Net cash/(debt) (c)


6,363

7,212

(7,173)

Capital expenditures (d)


8,684

9,466

6,632


Note:

(a)  EBITDA is calculated as operating profit minus interest income and other gains/losses, net, and adding back depreciation of property, plant and equipment, investment properties as well as right-of-use assets, and amortisation of intangible assets. Adjusted EBITDA is calculated as EBITDA plus equity-settled share-based compensation expenses.

(b)  Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues.

(c)  Net cash/(debt) represents period end balance and is calculated as cash and cash equivalents, plus term deposits and others, minus borrowings and notes payable.

(d)  Capital expenditures consist of additions (excluding business combinations) to property, plant and equipment, construction in progress, investment properties, land use rights and intangible assets (excluding video and music content, game licences and other content).

 

 


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

RMB in millions, unless specified


Unaudited


Audited


As at


September 30, 2020


As at


December 31, 2019


ASSETS


Non-current assets

  Property, plant and equipment


56,153

46,824

  Land use rights


15,801

15,609

  Right-of-use assets


10,646

10,847

  Construction in progress


4,318

3,935

  Investment properties


628

855

  Intangible assets


137,135

128,860

  Investments in associates


247,985

213,614

  Investments in joint ventures


7,119

8,280

  Financial assets at fair value through profit or loss


168,926

128,822

  Financial assets at fair value through other

   comprehensive income


143,935

81,721

  Prepayments, deposits and other assets


23,423

23,442

  Deferred income tax assets


22,981

18,209

  Term deposits


31,664

19,000


870,714

700,018


Current assets

  Inventories


1,164

718

  Accounts receivable


41,696

35,839

  Prepayments, deposits and other assets


38,237

27,840

  Other financial assets


1,650

375

  Financial assets at fair value through profit or loss


6,135

7,114

  Term deposits


75,692

46,911

  Restricted cash


2,250

2,180

  Cash and cash equivalents


152,491

132,991


319,315

253,968


Total assets


1,190,029

953,986

 

 


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(continued)

RMB in millions, unless specified


Unaudited


Audited


As at


September 30, 2020


As at


December 31, 2019


EQUITY


Equity attributable to equity holders of the Company

  Share capital


–

–

  Share premium


44,804

35,271

  Shares held for share award schemes


(4,351)

(4,002)

  Other reserves


60,763

16,786

  Retained earnings


475,887

384,651


577,103

432,706


Non-controlling interests


69,394

56,118


Total equity


646,497

488,824


LIABILITIES


Non-current liabilities

  Borrowings


118,037

104,257

  Notes payable


127,375

83,327

  Long-term payables


3,057

3,577

  Other financial liabilities


6,846

5,242

  Deferred income tax liabilities


14,488

12,841

  Lease liabilities


8,105

8,428

  Deferred revenue


6,304

7,334


284,212

225,006


Current liabilities

  Accounts payable


87,008

80,690

  Other payables and accruals


48,738

45,174

  Borrowings


14,117

22,695

  Notes payable


–

10,534

  Current income tax liabilities


13,470

9,733

  Other tax liabilities


1,941

1,245

  Other financial liabilities


4,165

5,857

  Lease liabilitiess


3,454

3,279

  Deferred revenue


86,427

60,949


259,320

240,156


Total liabilities


543,532

465,162


Total equity and liabilities


1,190,029

953,986

 


RECONCILIATIONS OF IFRS TO NON-IFRS RESULTS


As


reported
  


Adjustments


Non-IFRS
  


RMB in millions,


unless specified


Share-based


compensation
(a)


Net (gains)/losses from
investee companies (b)


Amortisation of


intangible assets (c)


Impairment


Provisions/(reversals) (d)


Income


tax effects (e)


Unaudited three months ended September 30, 2020


Operating profit


43,953


3,059


(8,703)


905


(1,098)


–


38,116


Profit for the period


38,899


3,770


(10,099)


2,005


(973)


(277)


33,325


Profit attributable to equity
  


holders


38,542


3,517


(10,133)


1,620


(1,026)


(217)


32,303



Operating margin



35%



30%



Net margin



31%



27%


Unaudited three months ended June 30, 2020

Operating profit

39,311

3,507

(14,672)

870

8,613

–

37,629

Profit for the period

32,454

4,225

(16,108)

1,886

9,268

(505)

31,220

Profit attributable to equity
  
holders

33,107

4,019

(15,436)

1,503

7,310

(350)

30,153


Operating margin


34%


33%


Net margin


28%


27%


Unaudited three months ended September 30, 2019

Operating profit

25,827

2,745

(1,814)

118

1,668

–

28,544

Profit for the period

20,976

3,568

(2,509)

1,544

1,981

(474)

25,086

Profit attributable to equity
  
holders

20,382

3,475

(2,444)

1,491

1,971

(463)

24,412


Operating margin


27%


29%


Net margin


22%


26%

Note:


(a) 
Including put options granted to employees of investee companies on their shares and shares to be issued under investee companies’ share-based incentive plans which can be acquired by the Group, and other incentives


(b) 
Including net (gains)/losses on deemed disposals/disposals of investee companies, fair value changes
arising from investee companies, and other expenses in relation to equity transactions of investee companies


(c) 
Amortisation of intangible assets resulting from acquisitions


(d) 
Impairment provisions/(reversals) for associates, joint ventures, goodwill and intangible assets arising from acquisitions


(e) 
Income tax effects of non-IFRS adjustments

 

Cision View original content:http://www.prnewswire.com/news-releases/tencent-announces-2020-third-quarter-results-301171751.html

SOURCE Tencent

Posted on

MultiPlan Reports Third Quarter 2020 Results and Provides Fourth Quarter Guidance

MultiPlan Reports Third Quarter 2020 Results and Provides Fourth Quarter Guidance

– Revenues of $223.5 Million, an Increase of 8% from Second Quarter 2020

– Net Loss of $288.4 Million, an Increase of 413% from Second Quarter 2020

– Adjusted EBITDA of $165.5 Million, an Increase of 10.5% from Second Quarter 2020

– Fourth Quarter Revenue Guidance of $238 to $253 Million and Adjusted EBITDA Guidance of $180 to $194 Million

– Acquired HST on November 10, in Support of MultiPlan’s Growth Strategy to Enhance, Extend and Expand its Platform

– Refinanced $2.7 Billion of Debt to Reduce Leverage; Projected Annual Interest Expense Savings of Approximately $70 Million

– First Earnings Conference Call as a Public Company Today, Thursday, November 12 at 8:00 a.m. Eastern Time

NEW YORK–(BUSINESS WIRE)–
MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE: MPLN), a leading value-added provider of data analytics and technology-enabled end-to-end cost management solutions to the U.S. healthcare industry, today announced financial results for the quarter ended September 30, 2020.

The Company reported strong consecutive quarterly growth as it continued to execute its MultiPlan 3.0 growth strategy to enhance its product offerings to payors, extend into new payor customer segments and expand its platform to serve MultiPlan’s 1.2 million providers, its more than 700 payors and their 60 plus million consumers. The Company processed a record $27.8 billion in claims during the third quarter, identifying potential savings of approximately $4.8 billion.

“Our third quarter results are a testament to our strong fundamentals and resilient business model,” said Mark Tabak, CEO of MultiPlan. “We performed better than anticipated in the midst of a pandemic and reported positive quarterly growth in both our revenues and adjusted EBITDA. I’m tremendously proud of our employees who have worked relentlessly to manage and sustain our business momentum and diligently supported our successful transition to the public markets, all while delivering significant value to payors, providers and consumers. As the healthcare industry continues to grow and evolve, I am confident that we are well positioned to capitalize on the large addressable market for MultiPlan, with a strong focus on creating long-term value for all our stakeholders.”

Acquisition of HST

On November 10, the Company announced the acquisition of HST, a leading reference-based pricing growth company that uses sophisticated data analytics and tools to engage members and providers on the front and back end of healthcare. The acquisition increases the value that MultiPlan offers to healthcare payors by adding complementary services to help them better manage cost, while also enhancing MultiPlan’s analytics products and services and further extending the company into adjacent customer segments such as TPA and Regional Health Plans.

Business and Financial Highlights

  • Outperformed initial management expectations from COVID-19 impact with revenues of $223.5 million for the third quarter, up from $206.9 million for the second quarter of 2020, reflecting an 8% quarter-over-quarterincrease. Revenues for the third quarter of 2019 were $245.8 million, with the decline in year-over-year revenues stemming from the drop in realized customer savings due to the pandemic.
  • Net loss of $288.4 million for the third quarter compared to a net loss of $56.2 million for the second quarter of 2020 and net income of $5.4 million for the same period in 2019. This reflects a 413% quarter-over-quarter increase in net loss as a result of the impact of the business combination as well as $262.4 million in stock-based compensation expense related to the Company’s 2016-2020 stock-based compensation plan.
  • Adjusted EBITDA of $165.5 million for the third quarter compared to $149.8 million for the second quarter of 2020 and $187.4 million for the same period in 2019. This reflects a 10.5% quarter-over-quarterincrease as a result of COVID-19 recovery and growth across all three service lines, including Network, Analytics and Payment Integrity.
  • Closed merger between Polaris Parent Corp., the parent of MultiPlan, Inc., and Churchill Capital Corp III on October 8, 2020 and started trading on the New York Stock Exchange under the ticker symbol “MPLN” on October 9, 2020.

Balance Sheet

On October 29, 2020, the Companycompleted a comprehensive refinancing program with a projected annual interest expense savings of approximately $70 million and extended its long-term debt maturities by four to five years. The Company refinanced its existing PIK toggle notes and senior notes and paid down $369 million of its term loan. In addition, the Company’s revolving credit facility was increased to $450 million from $100 million to provide additional financial flexibility.

Fourth Quarter Fiscal 2020 Guidance

For the fiscal fourth quarter ending December 31, 2020, the Company expects:

  • Revenue between $238 and $253 million
  • Adjusted EBITDA between $180 and $194 million

Conference Call Information

The Company will host a conference call today, Thursday, November 12, 2020 at 8:00 a.m. U.S. Eastern Time (ET) to discuss its financial results. To access the live conference call, please dial (833) 423-1182 (domestic) or (236) 714-2584 (international). The conference ID for the live call is 6454654. Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company’s website at investors.multiplan.us/events-and-presentations. A supplementary slide presentation will also be available on such website.

For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the MultiPlan website or by dialing (800) 585-8367 or (416) 621-4642. The conference ID for the replay is 6454654. The replay will be available until 11:59 p.m. ET on December 11, 2020.

About MultiPlan

MultiPlan is committed to helping healthcare payors manage the cost of care, improve their competitiveness and inspire positive change. Leveraging sophisticated technology, data analytics and a team rich with industry experience, MultiPlan interprets clients’ needs and customizes innovative solutions that combine its payment integrity, network-based and analytics-based services. MultiPlan is a trusted partner to over 700 healthcare payors in the commercial health, dental, government and property and casualty markets. For more information, visit multiplan.com.

Forward Looking Statements

This press release contains forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “forecasts,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology, including forward-looking statements about the impact from the novel coronavirus disease (the “COVID-19 pandemic”). These forward-looking statements include all matters that are not historical facts. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results, including the impact from the COVID-19 pandemic, and our ability to achieve our projected financial guidance, and therefore actual results might differ materially from those expressed in these forward-looking statements. Factors that might materially affect such forward-looking statements include loss of our customers, particularly our largest customers; decreases in our existing market share or the size of our Preferred Provider Organization networks; effects of competition; effects of pricing pressure; the inability of our customers to pay for our services; decreases in discounts from providers; the loss of our existing relationships with providers; the loss of key members of our management team; changes in: our regulatory environment, including healthcare law and regulations; the inability to implement information systems or expand our workforce; changes in our industry; providers’ increasing resistance to application of certain healthcare cost management techniques; pressure to limit access to preferred provider networks; heightened enforcement activity by government agencies; the possibility that regulatory authorities may assert we engage in unlawful fee splitting or corporate practice of medicine; interruptions or security breaches of our information technology systems; the expansion of privacy and security laws; our inability to expand our network infrastructure; our ability to protect proprietary applications; our ability to identify, complete and successfully integrate future acquisitions; our ability to pay interest and principal on our notes and other indebtedness; our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting; the ability to continue to meet applicable listing standards; the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, our ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain our management and key employees; changes in applicable laws or regulations; the possibility that we may be adversely affected by other political, economic, business, and/or competitive factors; the impact of the COVID-19 pandemic and its related effects on our projected results of operations, financial performance or other financial metrics; the ability to achieve the goals of our Short-Term Execution Plan and recognize the anticipated strategic, operational, growth and efficiency benefits when expected; pending or potential litigation associated with the business combination; and other risks and uncertainties indicated in Multiplan’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”) on October 30, 2020, including those under “Risk Factors” therein, and other documents filed or to be filed with SEC by MultiPlan. Forward-looking statements speak only as of the date made and, except as required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures, including adjusted EBITDA. A non-GAAP financial measure is generally defined as a numerical measure of a company’s financial performance or financial position that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP.

EBITDA and adjusted EBITDA are supplemental measures of MultiPlan’s performance that are not required by or presented in accordance with GAAP. These measures are not measurements of our financial performance or liquidity under GAAP, have limitations as analytical tools and should not be considered in isolation or as an alternative to net income (loss), cash flows or any other measures of performance or liquidity prepared in accordance with GAAP.

EBITDA represents net income before interest expense, interest income, income tax provision (benefit) and depreciation and amortization of intangible assets. Adjusted EBITDA is EBITDA as further adjusted by certain items as described in the table below. In addition, in evaluating EBITDA and adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of EBITDA and adjusted EBITDA. The presentation of EBITDA and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The calculations of EBITDA and adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Based on our industry and debt financing experience, we believe that EBITDA and adjusted EBITDA are customarily used by investors, analysts and other interested parties to provide useful information regarding a company’s ability to service and/or incur indebtedness.

We also believe that adjusted EBITDA is useful to investors and analysts in assessing our operating performance during the periods these charges were incurred on a consistent basis with the periods during which these charges were not incurred. Both EBITDA and adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

  • EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
  • EBITDA and adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
  • EBITDA and adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and
  • Although depreciation and amortization are non-cash charges, the tangible assets being depreciated will often have to be replaced in the future, and EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements.

MultiPlan’s presentation of adjusted EBITDA should not be construed as an inference that our future results and financial position will be unaffected by unusual items.

We have not reconciled the forward-looking adjusted EBITDA guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction related expenses (including expenses relating to the business combination), certain fair value measurements and costs related to the uncertainties caused by the global COVID-19 pandemic, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

Polaris Parent Corp.
Unaudited Condensed Consolidated Balance Sheets
($ in thousands, except share and per share data)
 
September 30, 2020 December 31, 2019
Assets
Current assets:
Cash and cash equivalents

$

203,807

$

21,825

Trade accounts receivable, net

 

53,873

 

77,071

Prepaid expenses and other current assets

 

13,902

 

5,032

Prepaid software and maintenance

 

7,322

 

9,556

Prepaid taxes

 

–

 

2,130

Deferred transaction costs

 

30,217

 

–

Total current assets

 

309,121

 

115,614

 
Property and equipment, net

 

182,270

 

177,992

Operating lease right-of-use asset

 

31,851

 

29,998

Goodwill

 

4,142,013

 

4,142,013

Client relationships intangible, net

 

2,930,082

 

3,135,782

Provider network intangible, net

 

638,721

 

683,561

Other intangibles, net

 

67,300

 

67,300

Equity investments

 

93,222

 

–

Other assets

 

5,447

 

8,151

Total assets

$

8,400,027

$

8,360,411

 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable

$

38,905

$

9,565

Accrued interest

 

70,730

 

17,966

Accrued taxes

 

17,630

 

–

Operating lease obligation

 

6,811

 

9,521

Accrued compensation

 

33,404

 

26,311

Accrued legal

 

9,136

 

10,038

Accrued administrative fees

 

3,593

 

3,861

Other accrued expenses

 

9,883

 

8,524

Total current liabilities

 

190,092

 

85,786

 
Long-term debt

 

5,409,451

 

5,397,122

Operating lease obligation

 

28,040

 

23,086

Deferred income taxes

 

834,840

 

869,199

Total liabilities

 

6,462,423

 

6,375,193

 
Shareholders’ equity:
Shareholder interests
Shareholder shares par value $0.001, 1,000 shares authorized
(500 Series A and 500 Series B), issued and outstanding 5 shares of Series A
and 5 shares of Series B as of September 30, 2020 and December 31, 2019

–

–

Contributed capital

 

1,647,284

 

1,347,656

Retained earnings

 

290,320

 

637,562

Shareholders’ equity

 

1,937,604

 

1,985,218

Total liabilities and shareholders’ equity

$

8,400,027

$

8,360,411

 
 
Polaris Parent Corp.
Unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
($ in thousands, except share and per share data)
 
 
Three Months Ended September 30, Nine Months Ended September 30,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 
Revenues

$

223,517

 

$

245,820

 

$

682,419

 

$

736,497

 

 
Costs of services (exclusive of depreciation and
amortization of intangible assets shown below)

 

147,866

 

 

41,059

 

 

244,445

 

 

116,191

 

General and administrative expenses

 

184,164

 

 

25,986

 

 

241,931

 

 

62,513

 

Depreciation

 

15,262

 

 

14,153

 

 

44,903

 

 

41,723

 

Amortization of intangible assets

 

83,513

 

 

83,513

 

 

250,540

 

 

250,540

 

Total expenses

 

430,805

 

 

164,711

 

 

781,819

 

 

470,967

 

 
Operating (loss) income

 

(207,288

)

 

81,109

 

 

(99,400

)

 

265,530

 

 
Interest expense

 

82,275

 

 

93,246

 

 

259,290

 

 

286,438

 

Interest income

 

(81

)

 

(54

)

 

(229

)

 

(133

)

Gain on repurchase and retirement of Notes

 

–

 

 

(18,450

)

 

–

 

 

(18,450

)

Net (loss) income before income taxes

 

(289,482

)

 

6,367

 

 

(358,461

)

 

(2,325

)

 
(Benefit) provision for income taxes

 

(1,080

)

 

1,005

 

 

(11,219

)

 

(191

)

(Loss) income from continuing operations

 

(288,402

)

 

5,362

 

 

(347,242

)

 

(2,134

)

 
Net (loss) income

 

(288,402

)

 

5,362

 

 

(347,242

)

 

(2,134

)

 
Weighted average shares outstanding – Basic and Diluted:

 

10

 

 

10

 

 

10

 

 

10

 

 
Net (loss) income per share – Basic and Diluted:

$

(28,840,200

)

$

536,200

 

$

(34,724,200

)

$

(213,400

)
 
Comprehensive (loss) income

 

(288,402

)

 

5,362

 

 

(347,242

)

 

(2,134

)

 
 
Polaris Parent Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
($ in thousands)

Nine Months

Ended

September 30, 2020

 

 

Nine Months

Ended

September 30, 2019
Operating activities:
Net loss

$

(347,242

)

$

(2,134

)

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

 

44,903

 

 

41,723

 

Amortization of the right-of-use asset

 

6,537

 

 

7,120

 

Amortization of intangible assets

 

250,540

 

 

250,540

 

Amortization of debt issuance costs

 

11,016

 

 

8,546

 

Stock-based compensation

 

299,629

 

 

(308

)

Deferred tax benefit

 

(34,359

)

 

(17,129

)

Non-cash interest costs

 

1,434

 

 

1,476

 

Loss on equity investments

 

7,784

 

 

–

 

Gain on repurchase and cancellation of Notes

 

–

 

 

(18,450

)

Loss on disposal of property and equipment

 

77

 

 

152

 

Changes in assets and liabilities, net of acquired balances:
Accounts receivable, net

 

23,198

 

 

6,270

 

Prepaid expenses and other assets

 

(34,280

)

 

(2,389

)

Prepaid taxes

 

2,130

 

 

(64,897

)

Operating lease obligation

 

(6,082

)

 

(7,171

)

Accounts payable and accrued expenses and other

 

107,016

 

 

64,578

 

Net cash provided by operating activities

 

332,301

 

 

267,927

 

Investing activities:
Purchases of property and equipment

 

(49,322

)

 

(48,020

)

Purchases of equity investments

 

(101,006

)

 

–

 

Net cash used in investing activities

 

(150,328

)

 

(48,020

)

 
Financing activities:
Repayments of long term debt

 

–

 

 

(100,000

)

Repurchase and cancellation of Senior PIK Toggle Notes

 

–

 

 

(101,013

)

Borrowings on revolving credit facility

 

98,000

 

 

–

 

Repayment of revolving credit facility

 

(98,000

)

 

–

 

Borrowings (payments) on capital leases, net

 

9

 

 

(130

)

Net cash provided by (used in) financing activities

 

9

 

 

(201,143

)

 
Net change in cash and cash equivalents

 

181,982

 

 

18,764

 

Cash and cash equivalents at beginning of period

 

21,825

 

 

5,014

 

 
Cash and cash equivalents at end of period

$

203,807

 

$

23,778

 

 
Noncash investing and financing activities:
Purchases of property, plant and equipment not yet paid

$

4,327

 

$

3,850

 

Operating lease right-of-use assets obtained in exchange for
operating lease liabilities

$

10,158

 

$

3,908

 

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest

$

(194,074

)

$

(221,934

)

Income taxes, net of refunds

$

(4,415

)

$

(82,225

)

 

Calculation of EBITDA and Adjusted EBITDA
Polaris Parent Corp
 
($ in thousands)
For the Three Months Ended
For the Nine Months Ended
September 30, 2020 June 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Net income (loss) – GAAP

$

(288,402

)

$

(56,246

)

$

5,362

 

$

(347,242

)

$

(2,134

)

Adjustments:
Interest expense

 

82,275

 

 

86,050

 

 

93,246

 

 

259,290

 

 

286,438

 

Interest income

 

(81

)

 

(77

)

 

(54

)

 

(229

)

 

(133

)

Income tax provision (benefit)

 

(1,080

)

 

(9,456

)

 

1,005

 

 

(11,219

)

 

(191

)

Depreciation

 

15,262

 

 

15,135

 

 

14,153

 

 

44,903

 

 

41,723

 

Amortization of intangible assets

 

83,513

 

 

83,514

 

 

83,513

 

 

250,540

 

 

250,540

 

Non-income taxes (a)

 

415

 

 

481

 

 

479

 

 

1,335

 

 

1,409

 

 
EBITDA

$

(108,098

)

$

119,401

 

$

197,704

 

$

197,378

 

$

577,652

 

 
Adjustments:
Other (income) expense (b)

 

1,012

 

 

149

 

 

626

 

 

1,308

 

 

1,448

 

Transaction related expenses (c )

 

2,464

 

 

2,338

 

 

3,245

 

 

5,162

 

 

3,267

 

Loss on equity investments (d)

 

7,784

 

 

–

 

 

–

 

 

7,784

 

 

–

 

Gain on repurchase and retirement of notes (e)

 

–

 

 

–

 

 

(18,450

)

 

–

 

 

(18,450

)

Stock-based compensation (f)

 

262,356

 

 

27,911

 

 

4,321

 

 

299,629

 

 

(308

)

 
Adjusted EBITDA

$

165,518

 

$

149,799

 

$

187,446

 

$

511,261

 

$

563,609

 

 
 
 
(a) Non-income taxes includes personal property taxes, real estate taxes, sales and use taxes and franchise taxes which are included in costs of services and general and
administrative expenses in our consolidated statements of income and comprehensive income.
(b) Represents miscellaneous non-operating expenses, gain or loss on disposal of assets, and management fees.
(c) Represents ordinary course transaction costs and transaction costs related to the Churchill Capital Corp III and MultiPlan business combination.
(d) Loss on equity investments reflects the change in the value of CCXX stock as September 30, 2020 from the price shares were purchased.
(e) Represents the gain related to the repurchase and cancellation of $121.3 million in aggregate amount of Senior PIK Notes.
(f) Includes the cost of an employee stock-based compensation plan.

 

Investor Relations

Shawna Gasik

AVP, Investor Relations

MultiPlan

866-909-7427

[email protected]

Helen O’Donnell

Managing Director

Solebury Trout

203-428-3213

[email protected]

Media Relations

Pamela Walker

Senior Director, Marketing & Communications

MultiPlan

781-895-3118

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Software Technology Data Management

MEDIA:

Posted on

Despegar.com Announces 3Q20 Financial Results

Despegar.com Announces 3Q20 Financial Results

Improving Trend in Bookings Despite Government Restrictions on Travel

Leveraging Non-Paid Marketing Channels

Delivered Cost Reduction Targets

BRITISH VIRGIN ISLANDS–(BUSINESS WIRE)–Despegar.com, Corp. (NYSE: DESP), (“Despegar” or the “Company”) a leading online travel company in Latin America, today announced unaudited results for the three-months ended September 30, 2020 (3Q20). Financial results are expressed in U.S. dollars and are presented in accordance with U.S. generally accepted accounting principles.

Third Quarter 2020 Key Financial and Operating Highlights

(For definitions, see page 12)

  • Sequential monthly improvement in transactions and gross bookings during the quarter with CAGR of 20% and 29%, respectively. Improvements mainly driven by higher domestic demand in Brazil and Mexico, while travel restrictions remain in place in other key markets
  • Marketing decreased $1.5 million compared with 2Q20, despite a 3X quarter-over-quarter (QoQ) increment in transactions. 51% share of mobile transactions in 3Q20
  • As reported Gross Bookings more than tripled QoQ but declined 86% year-over-year (YoY) to $165.3 million. Gross bookings on an FX neutral basis declined 82% YoY
  • As reported Revenues were $11.7 million, which include the impact of cancellations given the increased flexibility of the Company’s refund policy due to Covid-19. Excluding the impact of cancellations, as reported revenues would have declined 84% to $21 million and would have increased 406% sequentially.
  • Transactions and Room Nights both down 78% YoY and up 188% and 315% QoQ, respectively
  • Structural Costs declined 49% YoY and 16% QoQ to $27.8 million, reflecting measures implemented throughout the year, and meeting the Company’s $28 million run-rate target for the quarter
  • Excluding Extraordinary Charges, Adjusted EBITDA was a loss of $16.6 million compared to a loss of $32.0 million in 2Q20. Reported Adjusted EBITDA was a loss of $33.7 million in 3Q20 compared to an EBITDA loss of $65.8 million in 2Q20 and positive $9.4 million in 3Q19. Non-recurring charges that impacted Adjusted EBITDA were $17.1 million in 3Q20
  • Use of operating cash of $24.2 million in 3Q20, compared to positive operating cash flow of $20.0 million in 2Q20 and $25.5 million in 3Q19
  • Solid balance sheet – Cash and cash equivalents including restricted cash of $386 million at quarter end, including proceeds of US$189.6 million from private placement closed on September 21, 2020

Subsequent Events

  • Best Day – On October 1, 2020, Despegar completed the previously announced acquisition of Best Day Travel Group (“Best Day”), one of the leading travel agencies in Mexico. Revised terms of this transaction were announced on June 11, 2020.

Message from CEO

Commenting on the Company’s performance, Damian Scokin, CEO stated, “We continue making strong progress on the key initiatives defined as a response to Covid-19 scenario: 1) Adjusting our value proposition targeting profitability and cash generation, 2) focus on strict cost control and increasing operational leverage, 3) balance sheet strengthening and, 4) efficient integration of acquired businesses. These priorities are aligned with the Company’s long term focus.

In that context we are encouraged by the steady monthly increases in our Gross Booking levels mainly driven by higher demand for domestic travel both in Brazil and Mexico. Additionally, the recent closure of the Best Day acquisition, with its focus on domestic travel in Mexico, is expected to be a positive contributor to Despegar’s performance in the coming months. By contrast, travel restrictions remained in place during the quarter in the Andean Region and Argentina.

With respect to the Company’s financial position, we are pleased that we have achieved the objectives we had set for Despegar at the beginning of this pandemic including: i) reaching our targeted Structural Cost run rate of $28 million, ii) renegotiating and closing the Best Day acquisition, iii) and strengthening our Balance Sheet by raising $200 million in private capital.

This past quarter we have made strong progress in the integration of the Best Day and Koin businesses, and we continue working with our travel partners on the pending refunds and cancellations.

We remain disciplined yet opportunistic in our expenses and capital deployment, targeting attractive returns through an increase in scale by leveraging our technological platform and strong brand, moving ahead with the integration of Best Day and Koin as we further build on our low-cost delivery model.”

Operating and Financial Metrics Highlights
(In millions, except as noted)

3Q20

3Q19

% Chg

Operating metrics
Number of transactions

0.596

2.723

(78%)

Gross bookings

$165.3

$1,177.7

(86%)

Financial metrics
Revenues

$11.7

$132.0

(91%)

Net income (loss)

($41.7)

($3.7)

n.m.
Net income (loss) attributable to Despegar.com, Corp

($41.7)

($3.7)

n.m.
Adjusted EBITDA

($33.7)

$9.4

n.m.
EPS Basic

($0.60)

($0.05)

n.m.
EPS Diluted

($0.60)

($0.05)

n.m.
 
Extraordinary Charges
Adjusted EBITDA

($33.7)

$9.4

 n.m.
Extraordinary cancellations due to COVID-19

(9.3)
Restructuring charges associated with cost reduction and M&A / Capital raise efforts

(7.8)
Adjusted EBITDA (Excl. Extraordinary Charges)

($16.6)

$9.4

 n.m.
Shares Oustanding – Basic 1

71.501

69,503

Shares Oustanding – Diluted 1

71.501

69,503

EPS Basic (Excl. Extraordinary Charges)

(0.35)

(0.05)

EPS Diluted (Excl. Extraordinary Charges)

(0.35)

(0.05)

1. In thousands

Business Update on COVID-19

Governmental Flight Restrictions

According to ICAO (International Civil Aviation Organization), in 3Q20 airline seat capacity in LatAm reached 38% of 2019 levels, behind the 44% registered in Europe, 50% in North America and 51% in Asia Pacific.

Multiple travel restrictions remain in place across LatAm. In comparison to other countries, the recovery is taking longer to materialize in Argentina, Colombia, Chile and Peru, where travel was either rather limited or completely banned by government restrictions in place during the quarter. Despegar expects to benefit from pent up demand once these restrictions are lifted.

Throughout 3Q20, Brazil’s aviation sector remained open to commercial travel, while each municipality set the level of restrictions to be applicable to the lodging industry. As of today, hotels in only one jurisdiction remain closed. Mexico’s commercial aviation remained open, while some restrictions on lodging persisted until early September. In Argentina, both hotels and flights remained unavailable during the quarter, restrictions to tourism are still in place to-date. In Colombia, flights and hotels began a gradual reopening process in September. In Peru and Chile, hotels were allowed to open towards the end of the quarter while in Chile, flight restrictions to relevant touristic destinations are still in place.

Cost Control Initiatives

The Company met its targeted cost savings goal, achieving a $27.8 million run-rate for Structural Costs, 49% lower on a YoY basis. Included in these cost savings, were sequential declines of 12% in total payroll and 22% in non-payroll expenses.

Solid Financial Position:

The Company’s balance sheet remains solid with cash and cash equivalents including restricted cash of $386 million at quarter end. Excluding the proceeds from the capital raise announced last quarter, unrestricted cash and cash equivalents were $196 million, a 14% reduction when compared with June 30, 2020.

  • On September 18, 2020, the Company closed on the previously announced private placements with L. Catterton and Waha Capital. The Company intends to use the proceeds from these transactions for general corporate purposes, including potential acquisitions. On that same date, the Company terminated, under the current terms, its $40 million committed revolving credit facility, in the context of a strengthened capital structure.
  • On October 1, 2020, Despegar completed the acquisition of Best Day Travel Group under the terms announced on June 11, 2020. The purchase price is subject to adjustments based on net indebtedness and working capital, and is payable 36 months following the closing date. Potential earnout payment due 48 months following closing date.
  • Aggregate Net Operational Short-term Obligations (comprised of travel accounts payable plus related party payables and accounts payable and accrued expenses, minus trade accounts receivable net of credit expected loss and related party receivables) were $124.1 million as of September 30, 2020, compared to Aggregate Net Operational Short-Term Obligations of $118.4 million as of June 30, 2020.

Overview of Third Quarter 2020 Results

Key Operating Metrics
(In millions, except as noted)

3Q20

 

3Q19

 

% Chg

FX Neutral %

Chg

$

% of total

 

$

% of total

 

Gross Bookings

$165.3

$1,177.7

(86%)

(82%)

Average selling price (ASP) (in $)

$278

$433

(36%)

(19%)

Number of Transactions by Segment & Total
Air

0.4

66%

1.6

58%

(75%)

Packages, Hotels & Other Travel Products

0.2

34%

1.1

42%

(82%)

Total Number of Transactions

0.6

100%

2.7

100%

(78%)

Transactions were 0.6 million in 3Q20, nearly tripling the 2Q20 level, mainly driven by improving trends in Brazil and Mexico. On an YoY basis, transactions declined 78%.

FX neutral gross bookings increased 229% sequentially and more than tripled as reported to $165.3 million in 3Q20 from $48.9 million in 2Q20.

Year-on-year, however, gross bookings decreased 86% as reported and 82% on an FX neutral basis reflecting travel restrictions and overall lower travel industry demand.

Sequentially, the average selling price (“ASP”) in 3Q20 increased 18% to $278 per transaction mainly reflecting a broader product mix sold. YoY, the ASP decreased 19% on an FX neutral basis and 36% as reported. On an as reported basis, the decrease was largely driven by: i) the effects of the pandemic on the product mix with a significant shift towards domestic products, and ii) currency depreciation across the region.

Geographical Breakdown

Geographical Breakdown of Select Operating and Financial Metrics
(In millions, except as noted)
3Q20 vs. 3Q19 – As Reported
 
Brazil Argentina Rest of Latam Total
% Chg. % Chg. % Chg. % Chg.
Transactions (‘000)

(65%)

(94%)

(83%)

(78%)
Gross Bookings

(82%)

(93%)

(86%)

(86%)
ASP ($)

(49%)

26%

(22%)

(36%)
Revenues

(91%)
Gross Profit n.m.
3Q20 vs. 3Q19 – FX Neutral Basis
 
Brazil Argentina Rest of Latam Total
% Chg. % Chg. % Chg. % Chg.
Transactions (‘000)

(65%)

(94%)

(83%)

(78%)
Gross Bookings

(76%)

(89%)

(85%)

(82%)
ASP ($)

(31%)

92%

(14%)

(19%)
Revenues

(89%)
Gross Profit n.m.

During 3Q20, Brazil represented 62% of Despegar’s total transactions, which increased 170% QoQ, and compared to the same quarter last year reported a 65% decrease. Gross Bookings tripled sequentially, but decreased 82% YoY reflecting a significant shift to domestic travel and the depreciation of the Brazilian Real. These two factors led to YoY decreases of 49% and 31% as reported and FX neutral ASPs, respectively.

In Argentina, transactions and gross bookings decreased 94% and 93% YoY, respectively due to the ongoing ban on travel that has been in place since mid March, 2020. Sequentially, transactions and gross bookings showed a slight improvement. On an as reported basis, ASPs increased 26%. With domestic travel still prohibited, almost 90% of transactions were international trips scheduled for 2021. On an FX neutral basis, gross bookings declined YoY by 89% and ASPs increased 92%.

Across the Rest of Latin America, transactions and as reported gross bookings both tripled from 2Q20 levels, with an important contribution coming from Mexico. In Mexico, the government has not enacted travel restrictions to-date which was reflected in the growth in packages sold. ASPs decreased 22% year-over-year to $338. On an FX neutral basis, gross bookings decreased 85%, while ASPs decreased 14%.

Revenue

Revenue Breakdown
 

3Q20

3Q19

% Chg

$

$

Total Revenue

$11.7

$132.0

(91%)

 
Total revenue margin

7.1%

11.2%

(411) bps
Extraordinary Charges
Extraordinary Cancellations due to COVID-19

($9.3)
Total Revenue (Excluding Extraordinary Charges)

$21.0

$132.0

(84%)

 
Total revenue margin (Excluding Extraordinary Charges)

12.7%

11.2%

+152 bps

As reported revenues reverted back to positive reaching $11.7 million in 3Q20, compared to negative $9.7 million in 2Q20. Both quarters were impacted by extraordinary cancellations.

However, revenues declined 91% from $132.0 million in 3Q19. The YoY decline was the result of: the contraction in travel demand and restrictions imposed by several governments in connection with COVID-19, as well as new cancellations reflecting: i) relaxation of the Company’s refund policy, ii) provisioning of refunds for the months of October and November and iii) flexibilization of non-refundable bookings. Revenue margin was 7.1% in 3Q20. Excluding extraordinary cancellations, revenue margin increased to 12.7% in 3Q20 from 8.5% in 2Q20. This compares with 11.2% in the same quarter last year.

Cost of Revenue and Gross Profit / (Loss)

Cost of Revenue and Gross Profit
(In millions, except as noted)

3Q20

3Q19

% Chg
Revenue

$11.7

$132.0

(91%)

Cost of Revenue

$12.4

$42.6

(71%)

Gross Profit / (Loss)

($0.7)

$89.5

n.m.
 
Extraordinary Charges
Total Revenue

$11.7

$132.0
Extraordinary Cancellations due to COVID-19

($9.3)

–

Total Revenue (Excl. Extraordinary Charges)

$21.0

$132.0

(84%)
Total Cost of Revenue

$12.4

$42.6
Extraordinary restructuring charges

($0.7)

–

Total Cost of Revenue (Excl. Extraordinary Charges)

$11.7

$42.6

(72%)
Gross Profit / (Loss) (Excl. Extraordinary Charges)

$9.3

$89.5

(90%)

Cost of revenue, which mainly consists of credit card processing fees, bank fees related to customer financing installment plans offered and fulfillment center expenses, was $12.4 million in 3Q20, decreasing 10% and 71%, QoQ and YoY, respectively. Excluding the impact of extraordinary restructuring charges, Cost of Revenue would have decreased 3% sequentially and 72% compared to the same quarter last year.

Savings in cost of revenue were primarily the result of lower variable costs, including cost of installments and credit card processing fees following the 78% YoY decrease in transactions. Additionally, fulfillment center costs were lower due to the outsourcing of the call center operations effective 1Q20 as well as reduced fraud and errors.

In 3Q20, The Company reported a gross profit loss of $0.7 million compared with gross profit of $89.5 million in 3Q19, but an improvement from the $23.5 million gross loss reported in 2Q20. Excluding the impact from customers’ extraordinary cancellations and restructuring charges, Despegar would have reported a comparable gross profit of $9.3 million in 3Q20, improving from a comparable loss of $7.9 million in the prior quarter.

Operating Expenses

Operating Expenses
(In millions, except as noted)

3Q20

3Q19

% Chg
Selling and marketing

$5.3

$46.7

(89%)

General and administrative

$22.8

$25.1

(9%)

Technology and product development

$14.3

$17.9

(20%)

Total operating expenses

$42.4

$89.7

(53%)

 
Extraordinary Charges
Total Operating Expenses

$42.4

$89.7
Extraordinary restructuring charges

(7.9)

–
Total operating expenses (Excl. Extraordinary Charges)

$34.5

$89.7

(62%)

Operating Expenses were 53% lower YoY at $42.4 million in 3Q20, as a result of the continued reduction in Structural Costs.

Excluding the Extraordinary Charges described below in 3Q20, total operating expenses decreased 62% YoY to $34.5 million in 3Q20. This resulted from prior cost savings initiatives, as well as additional Covid-19 mitigation measures introduced during the year, and synergies captured from the integration of Viajes Falabella.

Consequently, Structural Costs declined to a $27.8 million run-rate in 3Q20, in line with the target set earlier this year.

Selling and marketing (S&M) expenses decreased 89% YoY, as travel demand was impacted by Covid-19 and the Company relied even more on organic marketing channels. Only a small portion of the structural marketing costs remained.

Excluding extraordinary charges in connection with severance expenses in 3Q20, Selling and marketing expenses would have decreased 90% YoY.

General and administrative (G&A) expenses decreased 9% YoY reflecting the cost savings program implemented due to COVID-19 along with prior savings. G&A in 3Q20 also includes $6.8 million in extraordinary charges resulting from cost reductions, M&A and capital raising efforts.

Excluding these extraordinary charges, G&A expenses would have declined 36% YoY.

Technology and product development expenses decreased 20% YoY driven by cost savings initiatives, partially offset by a reduction in the capitalization of IT spend. Excluding extraordinary restructuring charges in 3Q20, the decrease would have been 23% YoY.

Financial Income/Expenses

In the third quarter of 2020, the Company reported a net financial loss of $4.5 million compared to a net financial loss of $3.6 million in 3Q19. In 3Q20, Despegar reported foreign exchange losses and other expenses which include the termination fee of the Revolving Credit Facility as a one-time expense. These losses were partially offset by interest income obtained.

Income Taxes

The Company reported an income tax benefit of $5.8 million in 3Q20, compared to $0.2 million in 3Q19. The effective tax rate in 3Q20 was 12.26%, compared to 4.01% in 3Q19.

The variation in the effective rate is driven mainly by an incremental tax rate in Argentina due to changes in the Knowledge-based-Economy Regime benefits.

The knowledge-based Economy Regime is an incentive program in Argentina, which established certain tax benefits for companies that meet specific criteria such as at least 70% of their revenue belong to certain activities related to technology or software development, biotechnology, among others. The Company is currently assessing whether it will be eligible to benefit from the new law and related tax benefits, such eligibility is subject to Argentine government approval.

Our effective tax rate is based on forecasted annual results which may fluctuate significantly through the rest of the year, in particular due to the uncertainty in our annual forecasts resulting from the unpredictable impact of COVID-19 on our operating results.

Adjusted EBITDA & Margin

Adjusted EBITDA Reconciliation & Adjusted EBITDA Margin
(In millions, except as noted)

3Q20

3Q19

% Chg

Net income/ (loss)

($41.7)

($3.7)

1033%

Add (deduct):
Financial expense, net

$4.5

$3.6

24%

Income tax expense

($5.8)

($0.2)

3691%

Depreciation expense

$2.6

$2.0

28%

Amortization of intangible assets

$4.4

$4.2

4%

Share-based compensation expense

$2.4

$3.4

(28%)

Adjusted EBITDA

($33.7)

$9.4

n.m.
 
Extraordinary Charges
Adjusted EBITDA

($33.7)

$9.4
Extraordinary cancellations due to COVID-19

(9.3)
Restructuring charges associated with cost reduction and M&A / Capital raise efforts

(7.8)
Adjusted EBITDA (Excl. Extraordinary Charges)

($16.6)

$9.4

 n.m.

Despegar reported an Adjusted EBITDA loss of $33.7 million this quarter, improving from an EBITDA loss of $65.8 million in 2Q20 and compared to positive Adjusted EBITDA of $9.4 million in 3Q19.

Excluding $9.3 million in Extraordinary Charges in connection with cancellations and $7.8 million resulting from cost reductions, M&A and capital raising efforts implemented in the context of COVID-19, Adjusted EBITDA loss in 3Q20 was $16.6 million.

Balance Sheet and Cash Flow

The Company’s cash and treasury operations are managed locally while subsidiaries’ dividends are paid directly to Despegar in Delaware, U.S. Additionally, the majority of Despegar’s cash balance is held in US dollars in the US and the UK. Despegar minimizes its foreign currency exposures by managing natural hedges, netting its current assets and current liabilities in similarly denominated foreign currencies, and managing short term loans and investments for hedging purposes.

Cash and cash equivalents, including restricted cash, at September 30, 2020 was $386 million. During the quarter, cash and cash equivalents including restricted cash increased by $157.7 million sequentially, which is mostly explained by the proceeds of the recent private placement, which represented a cash inflow of $189.6 million.

Additionally, the Company terminated its committed revolving credit facility, from which the Company had not drawn down any amount.

Despegar reported a use of cash from operating activities of $24.2 million compared to cash generation from operating activities of $25.6 million in the year ago quarter. On Funds from Operations, in 3Q20 the Company reported a Net Loss (attributable to Despegar) of $41.7 million partially offset by Non-Cash adjustments of $15.4 million which mostly reflects allowance for doubtful accounts and amortization of intangible assets, among others.

With respect to the working capital portion of Cash Flow, Accounts Payable decreased by $11.8 million which was significantly offset by an increase in Tourist Payables, triggered by a higher level of gross bookings reported.

During 3Q20, capital expenditures were $3.0 million compared to $5.9 million during the same quarter in the prior year as Despegar is preserving cash in this volatile period. Funds were primarily invested in platform development.

Significant 3Q20 Events

Despegar.com Closes Investments by L Catterton and Waha Capital

On September 18, 2020, Despegar closed on the previously announced private placements with L Catterton, and on September 21, 2020 closed the previously announced private placement with Waha Capital. Despegar intends to use the proceeds from these investments for general corporate purposes, including potential acquisitions.

Furthermore, Messrs. Dirk Donath and Aseem Gupta were appointed by L Catterton and Waha Capital, respectively, to the Company’s board of directors, pursuant to the agreements reached with each fund.

For additional information regarding the L Catterton and Waha Capital financings, see the Form 6-K filed by the Company with the U.S. Securities and Exchange Commission on September 21, 2020.

Subsequent Events

Despegar Completes Acquisition of Best Day Travel Group

On October 1, 2020, Despegar completed the previously announced acquisition of Best Day Travel Group (“Best Day”), one of the leading travel agencies in Mexico. Best Day is expected to represent a key asset for Despegar, given its strong presence and leading market share in Mexico, particularly in the Hotels, Packages and Other Travel Products segment.

Operating for more than three decades in Mexico, Best Day has built an attractive business, with 95% of its 2019 revenues in the Hotels, Packages and Other Travel Products segment, including a robust B2C offering. Online transactions accounted for about 70% of total sales in 2019. Best Day’s revenues for 2019 were approximately US$140 million.

As disclosed on June 11, 2020 the terms of the transaction were as follows:

  • Base consideration of approximately US$56.5 million. The purchase price is subject to adjustments based on net indebtedness and working capital, and is payable 36 months following the closing date. The terms require no cash outlays in respect of the purchase price at transaction closing.
  • An additional variable purchase price component, ranging from zero to US$20 million, payable 48 months following the closing date. The variable component will be based on the performance of Despegar’s share price during a six-month period prior to the fourth anniversary of the closing date.

Argentina Considered Hyperinflationary Economy

As of July 1, 2018, as a result of a three-year cumulative inflation rate greater than 100% and following the guidance of ASC 830 the U.S. dollar became the functional currency of the Company’s Argentine subsidiary. This change in functional currency is being recognized prospectively in the financial statements. As a result, starting 3Q18 the impact of any change in currency exchange rate on the Company’s balance sheet accounts is reported in the Net financial income/(expense) line of the income statement instead of Other comprehensive income.

3Q20 Earnings Conference Call

When:

8:00 a.m. Eastern time, November 12, 2020

 

Who:

Mr. Damián Scokin, Chief Executive Officer

 

Mr. Alberto López-Gaffney, Chief Financial Officer

 

Ms. Natalia Nirenberg, Investor Relations

 

Dial-in:

1-844-750-4865 (U.S. domestic); 1-412-317-5275 (International)

Pre-Register: Please use this link to pre-register for this conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator.

Webcast: CLICK HERE

Definitions and concepts

Adjusted EBITDA: is calculated as net income/(loss) exclusive of financial income/(expense), income tax, depreciation, amortization, impairment of long-lived assets and stock-based compensation expense.

Aggregate Net Operational Short-term Obligations: consist of travel accounts payable plus related party payables and accounts payable and accrued expenses, minus trade accounts receivable net of credit expected loss and related party receivables.

Average Selling Price (ASP): reflects gross bookings divided by the total number of transactions.

Gross Bookings:Gross bookings is an operating measure that represents the aggregate purchase price of all travel products booked by the Company’s customers through its platform during a given period. The Company generates substantially all of its revenue from commissions and other incentive payments paid by its suppliers and service fees paid by its customers for transactions through its platform, and, as a result, it monitors gross bookings as an important indicator of its ability to generate revenue.

Extraordinary Charges:extraordinary events that lead to further non regular expenses, such as: i) extraordinary cancellations; ii) extraordinary restructuring charges and bad debt provisions for airlines that have entered into Chapter 11, among others.

Foreign Exchange (“FX”) Neutralcalculated by using the average monthly exchange rate of each month of the quarter and applying it to the corresponding months in the current year, so as to calculate what the results would have been had exchange rates remained constant. These calculations do not include any other macroeconomic effect such as local currency inflation effects.

Number of Transactions:The number of transactions for a period is an operating measure that represents the total number of customer orders completed on our platform in such period. The number of transactions is an important metric because it is an indicator of the level of engagement with the Company’s customers and the scale of its business from period to period but, unlike gross bookings, the number of transactions is independent of the average selling price of each transaction, which can be influenced by fluctuations in currency exchange rates among other factors.

Reporting Business Segments: The Company’s business is organized into two segments: (1) Air, which consists of the sale of airline tickets, and (2) Packages, Hotels and Other Travel Products, which consists of travel packages (the bundling of two or more products together which can include airline tickets and hotel rooms), as well as stand-alone sales of accommodations (including hotels and vacation rentals), car rentals, bus tickets, cruise tickets, travel insurance and destination services.

Revenue: The Company reports its revenue on a net basis, and in some cases on a gross basis, deducting cancellations and amounts that it collects as sales taxes. Despegar derives substantially all of its revenue from commissions and other incentive payments paid by its suppliers and service fees paid by its customers for transactions through its platform. To a lesser extent, Despegar also derives revenue from the sale of third-party advertisements on its websites and from certain suppliers when their brands appear in the Company advertisements in mass media.

Revenue Margin: calculated as revenue divided by gross bookings.

Seasonality: Despegar’s financial results experience fluctuations due to seasonal variations in demand for travel services. Bookings for vacation and leisure travel are generally higher during the fourth quarter, although to date and prior to the revenue recognition change beginning in the first quarter of 2018, the Company has recognized more revenue associated with those bookings in the fourth quarter of each year. Latin American travelers, particularly leisure travelers, who are Despegar’s primary customers, tend to travel most frequently at the end of the fourth quarter and during the first quarter of each year.

Structural Costs: Structural Costs represents management’s estimations of the fixed portion of the Company’s cost of revenue and operating expenses, which includes: call center fees (included in cost of revenue), plus the fixed portion of selling and marketing expenses (i.e., primarily personnel expenses), general and administrative expenses, and technology and product development expenses. Structural Costs does not include stock-based compensation, depreciation and amortization, netting of capitalized IT and impairment. The estimates above do not include any costs that the Company may incur in connection with an acquisition of Best Day, as described below nor any extraordinary items related to the Company’s reorganization.

About Despegar.com

Despegar is the leading online travel company in Latin America. With over two decades of business experience and operating in 20 countries in the region, Despegar accompanies Latin American travelers from the moment they dream of taking a trip until they share their memories of that trip. Thanks to the strong commitment to technological development and customer service, Despegar offers a customized experience to more than 18 million customers.

Despegar’s websites and leading mobile apps, offer products from over 270 airlines, more than 690,000 accommodation options, as well as more than 1,260 car rental agencies and approximately 200 destination services suppliers with more than 7,500 activities throughout Latin America. The Company owns and operates two well-recognized brands, Despegar, its global brand, and Decolar, its Brazilian brand. Despegar is traded on the New York Stock Exchange (NYSE: DESP). For more information, please visit www.despegar.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We base these forward-looking statements on our current beliefs, expectations and projections about future events and financial trends affecting our business and our market. Many important factors could cause our actual results to differ substantially from those anticipated in our forward-looking statements. Forward-looking statements are not guarantees of future performance. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or to revise any forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. The words “believe,” “may,” “should,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “will,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, capital expenditures, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. In particular, the COVID-19 pandemic, and governments’ extraordinary measures to limit the spread of the virus, are disrupting the global economy and the travel industry, and consequently adversely affecting our business, results of operation and cash flows and, as conditions are recent, uncertain and changing rapidly, it is difficult to predict the full extent of the impact that the pandemic will have. Considering these limitations, you should not make any investment decision in reliance on forward-looking statements contained in this press release.

— Financial Tables Follow —

Unaudited Consolidated Statements of Operations for the three-month periods ended September 30, 2020 and 2019 (in thousands U.S. dollars, except as noted)

Profit & Loss Statement
 

3Q20

3Q19

% Chg
Revenue

11,740

132,048

(91%)

Cost of revenue

12,390

42,591

(71%)

Gross profit

(650)

89,457

(101%)

Operating expenses
Selling and marketing

5,299

46,656

(89%)

General and administrative

22,818

25,090

(9%)

Technology and product development

14,322

17,922

(20%)

Impairment of long-lived assets

–

–

Total operating expenses

42,439

89,668

(53%)

 
Operating (loss) / income

(43,089)

(211)

20321%

Net financial income (expense)

(4,484)

(3,627)

n.m.
Net (loss) / income before income taxes

(47,573)

(3,838)

1140%

Income tax (benefit) / expense

(5,838)

(154)

3691%

Net (loss) / income

(41,735)

(3,684)

1033%

Net (income) / loss attributable to non controlling interest

69

–

n.m.
Net income (loss) attributable to Despegar.com, Corp

(41,666)

(3,684)

 
Basic EPS (in $)

(0.60)

(0.05)

n.m.
Diluted EPS (in $)

(0.60)

(0.05)

n.m.
Basic Shares weighted average 1

71,501

69,503

Diluted shares weighted average1

71,501

69,503

1. In thousands

Key Financial & Operating Trended Metrics(in thousands U.S. dollars, except as noted)

 

4Q18

 

1Q19

2Q19

3Q19

4Q19

 

1Q20

2Q20

3Q20
FINANCIAL RESULTS
Revenue

$132,515

$133,114

$114,087

$132,048

$145,627

$76,082

($9,734)

$11,740

Revenue Recognition Adjustment
Cost of revenue

49,703

45,245

40,342

42,591

51,387

33,495

13,801

12,390

Gross profit

82,812

87,869

73,745

89,457

94,240

42,587

(23,535)

(650)

Operating expenses
Selling and marketing

42,925

40,933

50,701

46,656

49,604

31,985

6,848

5,299

General and administrative

17,236

20,638

21,254

25,090

25,980

18,023

24,391

22,818

Technology and product development

16,376

18,713

18,077

17,922

18,663

17,154

18,415

14,322

Impairment of long-lived assets

363

–

–

–

–

–

1,324

–

Total operating expenses

76,900

80,284

90,032

89,668

94,247

67,162

50,978

42,439

 
Operating income

5,912

7,585

(16,287)

(211)

(7)

(24,575)

(74,513)

(43,089)

Net financial income (expense)

(18)

(5,220)

(1,663)

(3,627)

(6,705)

10,061

9,428

(4,484)

Net income before income taxes

5,894

2,365

(17,950)

(3,838)

(6,712)

(14,514)

(65,085)

(47,573)

Adj. Net Income tax expense

2,864

479

(1,483)

(154)

(4,067)

709

(8,011)

(5,838)

Income tax expense

2,864

479

(1,483)

(154)

(4,067)

709

(8,011)

(5,838)

Adjustment
Net income /(loss)

3,030

1,886

(16,467)

(3,684)

(2,645)

(15,223)

(57,074)

(41,735)

Net (income) / loss attributable to non controlling interest

$69
Net income (loss) attributable to Despegar.com, Corp

(41,666)

Adjusted EBITDA

$13,868

$15,182

($7,323)

$9,410

$8,292

($15,611)

($65,793)

($33,695)

 
Net income/ (loss)

$3,030

$1,886

($16,467)

($3,684)

($2,645)

($15,223)

($57,074)

($41,735)

Add (deduct):
Financial expense, net

18

5,220

1,663

3,627

6,705

(10,061)

(9,428)

4,484

Income tax expense

2,864

479

(1,483)

(154)

(4,067)

709

(8,011)

(5,838)

Depreciation expense

1,313

1,395

2,683

2,036

1,094

1,851

1,782

2,597

Amortization of intangible assets

3,156

3,203

3,089

4,195

5,100

4,939

5,501

4,370

Share-based compensation expense

3,124

2,999

3,192

3,390

2,105

2,174

113

2,427

Impairment of long-lived assets

363

–

–

–

–

–

1,324

–

Adjusted EBITDA

$13,868

$15,182

($7,323)

$9,410

$8,292

($15,611)

($65,793)

($33,695)

Unaudited Consolidated Balance Sheets as of September 30, 2020 and June 30, 2020 (in thousands U.S. dollars, except as noted)

As of September 30, 2020 As of June 30, 2020
ASSETS
Current assets
Cash and cash equivalents

375,258

223,970

Restricted cash and cash equivalents

10,600

4,169

Accounts receivable, net of allowances

38,052

44,141

Related party receivable

4,140

4,017

Other current assets and prepaid expenses

32,123

41,299

Total current assets

460,173

317,596

Non-current assets
Other Assets

39,489

31,375

Right of use

24,666

30,866

Property and equipment net

13,834

16,523

Intangible assets, net

47,070

47,742

Goodwill

45,572

41,664

Total non-current assets

170,631

168,170

TOTAL ASSETS

630,804

485,766

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses

22,484

31,967

Travel suppliers payable

130,845

116,497

Related party payable

13,001

18,131

Loans and other financial liabilities

7,221

9,961

Deferred Revenue

8,155

8,430

Other liabilities

35,397

33,515

Contingent liabilities

6,337

5,761

Lease liabilities

3,736

4,625

Total current liabilities

227,176

228,887

Non-current liabilities
Other liabilities

1,756

2,271

Contingent liabilities

74

79

Lease liabilities

21,427

26,333

Related party liability

125,000

125,000

Total non-current liabilities

148,257

153,683

TOTAL LIABILITIES

375,433

382,570

 
Mezzanine Equity

134,819

–

 
SHAREHOLDERS’ EQUITY (DEFICIT)
Common stock

263,944

263,944

Additional paid-in capital

385,702

327,826

Other reserves

(728)

(728)

Accumulated other comprehensive income

(18,549)

(19,696)

Accumulated losses

(441,550)

(399,883)

Treasury Stock

(68,267)

(68,267)

Total Shareholders’ Equity Attributable / (Deficit) to Despegar.com Corp

120,552

103,196

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

630,804

485,766

Unaudited Statements of Cash Flows for the three-month periods ended September 30, 2020 and 2019(in thousands U.S. dollars, except as noted)

 

3 months ended September 30,

2020

2019
Cash flows from operating activities
Net income

($41,666)

($3,684)
Adjustments to reconcile net income to net cash flow from operating activities
Unrealized foreign currency translation losses

$2,994

7,757

Depreciation expense

$2,597

2,037

Amortization of intangible assets

$4,370

4,195

Disposals of property and equipment

$463

–

Stock based compensation expense

$2,427

3,390

Amortization of Right of use

$869

1,091

Interest and penalties

$130

316

Income taxes

($6,080)

(1,508)

Allowance for doubtful accounts

$6,701

865

Provision / (recovery) for contingencies

$932

(484)

Changes in assets and liabilities, net of non-cash transactions
(Increase) / Decrease in accounts receivable, net of allowances

($429)

28,531

(Increase) / Decrease in related party receivables

($123)

(4,110)

(Increase) / Decrease in other assets and prepaid expenses

$1,456

(12,050)

Increase / (Decrease) in accounts payable and accrued expenses

($11,794)

2,922

Increase / (Decrease) in travel suppliers payable

$11,800

278

Increase / (Decrease) in other liabilities

$6,579

(563)

Increase / (Decrease) in contingencies

($254)

(1,878)

Increase / (Decrease) in related party liabilities

($5,002)

(409)

Increase / (Decrease) in lease liability

$40

(1,196)

Increase / (Decrease) in deferred revenue

($230)

(18)

Net cash flows provided by / (used in) operating activities

(24,220)

25,482
Cash flows from investing activities
Payments for acquired business, net of cash acquired

327

4,254

Acquisition of property and equipment

(342)

(2,158)

Increase of intangible assets including internal-use software and website development

(3,059)

(8,016)

Net cash (used in) /provided by investing activities

(3,074)

(5,920)
Cash flows from financing activities
Increase / (Decrease) in loans and other financial liabilities

(4,800)

79

Proceeds from Private investment

200,000

Issuance of cost from private investment

(10,422)

Treasury Stock

–

(39,299)

Net cash (used in) / provided by financing activities

184,778

(39,220)
Effect of exchange rate changes on cash, cash equivalents and restricted cash

235

(2,466)

Net increase / (decrease) in cash, cash equivalents and restricted cash

157,719

(22,124)

Cash, cash equivalents and restricted cash as of beginning of the period

228,139

322,233

Cash, cash equivalents and restricted cash as of end of the period

385,858

300,109

Use of Non-GAAP Financial Measures

This announcement includes certain references to Adjusted EBITDA and non-GAAP financial measures. The Company defines:

Adjusted EBITDA is defined as net income/(loss) exclusive of financial income/(expense), income tax, depreciation, amortization and share-based compensation expense.

Adjusted EBITDA is not a measure recognized under U.S. GAAP. Accordingly, readers are cautioned not to place undue reliance on this information and should note that these measures as calculated by the Company, differ materially from similarly titled measures reported by other companies, including its competitors. Adjusted EBITDA margin refers to Adjusted EBITDA as defined above divided by revenue.

To supplement its consolidated financial statements presented in accordance with U.S. GAAP, the Company presents foreign exchange (“FX”) neutral measures.

This non-GAAP measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. This non-GAAP financial measure should only be used to evaluate our results of operations in conjunction with the most comparable U.S. GAAP financial measures.

Reconciliation of this non-GAAP financial measure to the most comparable U.S. GAAP financial measures can be found in the tables included in this quarterly earnings release.

The Company believes that reconciliation of FX neutral measures to the most directly comparable GAAP measure provides investors an overall understanding of our current financial performance and its prospects for the future. Specifically, we believe this non-GAAP measure provide useful information to both management and investors by excluding the foreign currency exchange rate impact that may not be indicative of our core operating results and business outlook.

The FX neutral measures were calculated by using the average monthly exchange rates for each month during 2019 and applying them to the corresponding months in 2020, so as to calculate what results would have been had exchange rates remained stable from one year to the next. The table below excludes intercompany allocation FX effects. Finally, this measure does not include any other macroeconomic effect such as local currency inflation effects, the impact on impairment calculations or any price adjustment to compensate local currency inflation or devaluations.

The following table sets forth the FX neutral measures related to our reported results of the operations for the three-month periods ended September 30, 2020:

Geographical Breakdown of Select Operating and Financial Metrics
(In millions, except as noted)
3Q20 vs. 3Q19 – As Reported
 

Brazil

 

Argentina

 

Rest of Latin America

 

Total

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.
Transactions (‘000)

371

1,070

(65%)

32

551

(94%)

193

1,102

(83%)

595.6

2,723.0

(78%)
Gross Bookings

83

468

(82%)

17

232

(93%)

65

478

(86%)

165.3

1,177.7

(86%)
ASP ($)

225

437

(49%)

529

421

26%

338

434

(22%)

278

433

(36%)
Revenues

11.7

132.0

(91%)
Gross Profit

-0.6

89.5

n.m.
3Q20 vs. 3Q19 – FX Neutral Basis
 

Brazil

 

Argentina

 

Rest of Latin America

 

Total

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.

 

3Q20

3Q19

% Chg.
Transactions (‘000)

371

1,070

(65%)

32

551

(94%)

193

1,102

(83%)

595.6

2,723.0

(78%)
Gross Bookings

112

468

(76%)

26

232

(89%)

72

478

(85%)

209.7

1,177.7

(82%)
ASP ($)

302

437

(31%)

808

421

92%

374

434

(14%)

352

433

(19%)
Revenues

14.9

132.0

(89%)
Gross Profit

-1.5

89.5

n.m.

 

IR Contact

Natalia Nirenberg

Investor Relations

Phone: (+54911) 26684490

E-mail: [email protected]

KEYWORDS: Virgin Islands (British) Caribbean

INDUSTRY KEYWORDS: Other Travel Transportation Vacation Lodging Cruise Destinations Travel

MEDIA:

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Posted on

Realtor.com® Weekly Housing Report: New Listings Decline Even Further as Buyers and Sellers Hit Pause During Election Week

– Newly listed properties are down double-digits compared to last year

– Home prices continue to evade the usual seasonal slowdown

– The number of days on market holds steady at nearly two weeks faster than last year

– Data shows the housing market remains unexpectedly strong for this time of year but activity is beginning to slow down

PR Newswire

SANTA CLARA, Calif., Nov. 12, 2020 /PRNewswire/ — Buyers and sellers took a step back from the market last week as the nation focused its attention on the presidential election and surging coronavirus cases, according to realtor.com®‘s Weekly Housing Report for the week ending Nov 7. The latest report found new listings declined even further from the prior week, while prices and the pace of sales continue to hold steady — further thwarting the usual seasonal slowdown.

“Between the presidential election and a new wave of coronavirus cases, buyers and sellers had a lot of reasons to pause last week,” according to realtor.com® Chief Economist, Danielle Hale. “The big question is whether both buyers and sellers will jump back into the market after last week’s break. With mortgage rates expected to rise on news of a likely vaccine, buyers may have reason to jump back in and find a home sooner rather than later, but sellers may be more inclined to stay on hold. Thus, even as overall activity slows, we may very well see continued price growth and quick sales.”

Sellers take a break from putting their homes on the market

  • New listings further declined for the second week in a row, down 12% for the week ending Nov. 7 from last week’s decrease of 9%. This is a step backwards for newly listed homes which were down only 2% for the week ending Oct. 24.
  • New listings are a crucial ingredient for homes sales and they will need to make a strong comeback for housing activity to continue.
  • Due in part to the decrease in newly listed homes, the total number of homes for sale saw a slight deceleration and dropped to down 39% year-over-year after spending five steady weeks down 38%.

Home prices and the time it takes to sell continue to signal a tight market 

  • Listing prices extended their streak of double-digit growth for the 13th consecutive week, up 12.9% over last year.
  • As buyers continue to find fewer options for sale, the homes that are available are selling rapidly. The average time on market is just short of two weeks — 13 days — faster compared to a year ago.
  • This is the seventh week in a row that homes are selling 13 or 14 days faster than last year. If this trend shifts and homes begin to sell even more quickly, it is a good indication that buyers have no intention of taking the holidays off this year, but continued steadiness in the year over year difference would mean we’re seeing at least some of the usual seasonal pause in housing activity.

U.S. housing market shows signs of activity easing


  • Realtor.com

    ® tracks the overall strength of the housing market through its proprietary Housing Market Recovery Index, which compares real-time key indicators, including trends in number of searchers on realtor.com®, median listing prices, the number of newly listed homes, and the time it takes to sell to January 2020, prior to the pandemic.
  • The index declined to 108.0 nationwide for the week ending Nov. 7, 8.0 points above the pre-COVID baseline but a decrease of 1.4 points from the prior week. This puts the index on par with September levels, a month when existing home sale closings exceeded a 6.5 million seasonally adjusted annual rate.
  • The index shows us that the market remains unusually strong for this time of year, but housing activity has begun to slow down for the second consecutive week as it comes down from October’s high point of 112.4.

 


Metro


Median Listing Price YoY


Total Listings YoY


Median Days on Market YoY

Akron, Ohio

6.20%

-52.80%

-12 Days

Albany-Schenectady-Troy, N.Y.

12.60%

-39.00%

-13 Days

Albuquerque, N.M.

12.90%

-47.30%

-14 Days

Allentown-Bethlehem-Easton, Pa.-N.J.

13.20%

-49.10%

-20 Days

Atlanta-Sandy Springs-Roswell, Ga.

9.20%

-45.00%

-8 Days

Augusta-Richmond County, Ga.-S.C.

8.30%

-49.30%

-28 Days

Austin-Round Rock, Texas

18.00%

-50.90%

-13 Days

Bakersfield, Calif.

16.50%

-46.00%

-20 Days

Baltimore-Columbia-Towson, Md.

1.50%

-52.30%

-12 Days

Baton Rouge, La.

13.60%

-38.50%

-6 Days

Birmingham-Hoover, Ala.

-0.50%

-35.10%

-19 Days

Boise City, Idaho

21.20%

-72.40%

-11 Days

Boston-Cambridge-Newton, Mass.-N.H.

11.90%

-26.30%

-11 Days

Bridgeport-Stamford-Norwalk, Conn.

0.00%

-27.00%

-39 Days

Buffalo-Cheektowaga-Niagara Falls, N.Y.

10.60%

-45.70%

8 Days

Cape Coral-Fort Myers, Fla.

9.70%

-39.70%

-11 Days

Charleston-North Charleston, S.C.

12.30%

-44.50%

-22 Days

Charlotte-Concord-Gastonia, N.C.-S.C.

9.00%

-49.10%

-12 Days

Chattanooga, Tenn.-Ga.

8.50%

-52.10%

-14 Days

Chicago-Naperville-Elgin, Ill.-Ind.-Wis.

8.70%

-32.00%

-7 Days

Cincinnati, Ohio-Ky.-Ind.

13.20%

-42.10%

-13 Days

Cleveland-Elyria, Ohio

5.40%

-47.70%

-15 Days

Colorado Springs, Colo.

9.70%

-55.50%

-15 Days

Columbia, S.C.

10.50%

-48.50%

-17 Days

Columbus, Ohio

9.80%

-46.90%

-12 Days

Dallas-Fort Worth-Arlington, Texas

5.20%

-47.90%

-9 Days

Dayton, Ohio

15.20%

-45.60%

-12 Days

Deltona-Daytona Beach-Ormond Beach, Fla.

4.90%

-42.60%

-20 Days

Denver-Aurora-Lakewood, Colo.

6.30%

-46.30%

-8 Days

Des Moines-West Des Moines, Iowa

4.70%

-33.70%

-9 Days

Detroit-Warren-Dearborn, Mich

11.20%

-48.10%

-8 Days

Durham-Chapel Hill, N.C.

11.80%

-44.40%

-15 Days

El Paso, Texas

16.80%

-48.10%

-9 Days

Fresno, Calif.

9.80%

-57.30%

-11 Days

Grand Rapids-Wyoming, Mich

7.90%

-48.50%

-4 Days

Greensboro-High Point, N.C.

-1.90%

-51.30%

-18 Days

Greenville-Anderson-Mauldin, S.C.

3.50%

-39.80%

-9 Days

Harrisburg-Carlisle, Pa.

12.50%

-57.80%

-6 Days

Hartford-West Hartford-East Hartford, Conn.

7.20%

-29.10%

-22 Days

Houston-The Woodlands-Sugar Land, Texas

9.50%

-32.90%

-11 Days

Indianapolis-Carmel-Anderson, Ind.

3.90%

-45.70%

-13 Days

Jackson, Miss.

15.60%

-48.00%

-24 Days

Jacksonville, Fla.

0.30%

-46.30%

-15 Days

Kansas City, Mo.-Kan.

10.00%

-47.00%

-12 Days

Knoxville, Tenn.

9.90%

-49.90%

-17 Days

Lakeland-Winter Haven, Fla.

8.70%

-27.80%

-7 Days

Las Vegas-Henderson-Paradise, Nev.

8.50%

-26.50%

-14 Days

Little Rock-North Little Rock-Conway, Ark.

22.30%

-60.40%

-18 Days

Los Angeles-Long Beach-Anaheim, Calif.

15.40%

-19.30%

-10 Days

Louisville/Jefferson County, Ky.-Ind.

1.60%

-48.10%

-16 Days

Madison, Wis.

6.10%

-43.50%

-13 Days

McAllen-Edinburg-Mission, Texas

19.70%

-42.60%

-33 Days

Memphis, Tenn.-Miss.-Ark.

14.50%

-51.30%

-16 Days

Miami-Fort Lauderdale-West Palm Beach, Fla.

0.60%

-17.60%

1 Days

Milwaukee-Waukesha-West Allis, Wis.

5.40%

-38.20%

-9 Days

Minneapolis-St. Paul-Bloomington, Minn.-Wis.

1.40%

-29.60%

-8 Days

Nashville-Davidson–Murfreesboro–Franklin, Tenn.

7.80%

-46.10%

-8 Days

New Haven-Milford, Conn.

10.70%

-23.70%

-25 Days

New Orleans-Metairie, La.

14.00%

-38.00%

-9 Days

New York-Newark-Jersey City, N.Y.-N.J.-Pa.

15.50%

-5.00%

2 Days

North Port-Sarasota-Bradenton, Fla.

2.50%

-38.70%

-11 Days

Oklahoma City, Okla.

6.00%

-42.10%

-2 Days

Omaha-Council Bluffs, Neb.-Iowa

1.60%

-45.80%

4 Days

Orlando-Kissimmee-Sanford, Fla.

1.30%

-20.10%

-1 Days

Oxnard-Thousand Oaks-Ventura, Calif.

12.20%

-52.10%

-10 Days

Palm Bay-Melbourne-Titusville, Fla.

5.00%

-40.80%

-6 Days

Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.

17.00%

-41.70%

-13 Days

Phoenix-Mesa-Scottsdale, Ariz.

10.70%

-42.10%

-8 Days

Pittsburgh, Pa.

25.60%

-38.50%

-14 Days

Portland-South Portland, Maine

7.80%

-46.50%

-33 Days

Portland-Vancouver-Hillsboro, Ore.-Wash.

10.80%

-44.70%

-8 Days

Providence-Warwick, R.I.-Mass.

5.50%

-50.40%

-12 Days

Raleigh, N.C.

6.40%

-47.80%

-18 Days

Richmond, Va.

13.30%

-48.40%

-8 Days

Riverside-San Bernardino-Ontario, Calif.

16.10%

-53.90%

-10 Days

Rochester, N.Y.

11.10%

-43.80%

-17 Days

Sacramento–Roseville–Arden-Arcade, Calif.

12.30%

-46.10%

-17 Days

Salt Lake City, Utah

17.40%

-51.80%

-13 Days

San Antonio-New Braunfels, Texas

5.00%

-41.50%

-9 Days

San Diego-Carlsbad, Calif.

10.40%

-23.00%

-1 Days

San Francisco-Oakland-Hayward, Calif.

10.80%

3.20%

-3 Days

San Jose-Sunnyvale-Santa Clara, Calif.

8.90%

-5.80%

-12 Days

Scranton–Wilkes-Barre–Hazleton, Pa.

18.20%

-52.30%

-35 Days

Seattle-Tacoma-Bellevue, Wash.

8.50%

-39.80%

-7 Days

Spokane-Spokane Valley, Wash.

7.10%

-50.70%

-5 Days

Springfield, Mass.

14.60%

-44.10%

-15 Days

St. Louis, Mo.-Ill.

9.00%

-38.80%

-14 Days

Stockton-Lodi, Calif.

4.60%

-64.50%

-4 Days

Syracuse, N.Y.

5.60%

-44.00%

2 Days

Tampa-St. Petersburg-Clearwater, Fla.

9.20%

-41.40%

-13 Days

Toledo, Ohio

-1.60%

-42.10%

-4 Days

Tucson, Ariz.

8.40%

-44.90%

-5 Days

Tulsa, Okla.

10.20%

-41.00%

-8 Days

Urban Honolulu, Hawaii

-9.60%

24.40%

1 Day

Virginia Beach-Norfolk-Newport News, Va.-N.C.

10.60%

-52.30%

-27 Days

Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.

4.20%

-35.60%

-11 Days

Wichita, Kan.

9.40%

-36.60%

-13 Days

Winston-Salem, N.C.

-0.40%

-46.80%

-20 Days

Worcester, Mass.-Conn.

10.30%

-50.20%

-23 Days

Youngstown-Warren-Boardman, Ohio-Pa.

16.60%

-52.50%

-24 Days

About realtor.com
®


Realtor.com

® makes buying, selling and living in homes easier and more rewarding for everyone. Realtor.com® pioneered the world of digital real estate 20 years ago, and today through its website and mobile apps is a trusted source for the information, tools and professional expertise that help people move confidently through every step of their home journey. Using proprietary data science and machine learning technology, realtor.com® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, realtor.com® is a trusted provider of consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Media Contacts: 
Cody Horvat, [email protected]

 

Cision View original content:http://www.prnewswire.com/news-releases/realtorcom-weekly-housing-report-new-listings-decline-even-further-as-buyers-and-sellers-hit-pause-during-election-week-301171666.html

SOURCE realtor.com

Posted on

GreenTree to Report Third Quarter 2020 Financial Results on December 2, 2020

PR Newswire

SHANGHAI, Nov. 12, 2020 /PRNewswire/ — GreenTree Hospitality Group Ltd. (NYSE: GHG) (“GreenTree” or the “Company”), a leading hospitality management group in China, today announced that it will report its unaudited financial results for the quarter ended September 30, 2020, after U.S. markets close on Wednesday, December 2, 2020.

GreenTree’s management will hold an earnings conference call at 8:00 PM U.S. Eastern Time on December 2, 2020 (9:00 AM Beijing/Hong Kong Time on December 3, 2020). 

Dial-in numbers for the live conference call are as follows:

International                                       

1-412-902-4272

Mainland China                                                  

4001-201-203

US                                                      

1-888-346-8982

Hong Kong                                         

800-905-945 or 852-3018-4992

Singapore                                            

800-120-6157

Participants should ask to join the GreenTree call.

A telephone replay of the conference call will be available after the conclusion of the live conference call until December 9, 2020.

Dial-in numbers for the replay are as follows:

International Dial-in                            

1-412-317-0088

U.S. Toll Free                                    

1-877-344-7529

Canada Toll Free                               

855-669-9658

Passcode:                                            

10149105

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.998.com.


About GreenTree Hospitality Group Ltd.

GreenTree Hospitality Group Ltd. (“GreenTree” or the “Company”) (NYSE: GHG) is a leading hospitality management group in China. As of June 30, 2020, GreenTree had a total number of 4,066 hotels. In 2019, HOTELS magazine ranked GreenTree Top 12 Ranking among 325 largest global hotel groups in terms of number of hotels in its annual HOTELS’ 325. GreenTree was also the fourth largest hospitality company in China in 2019 based on the statistics issued by the China Hospitality Association.

GreenTree has built a strong suite of brands, including its flagship “GreenTree Inns” brand as a result of its long-standing dedication to the hospitality industry in China and consistent quality of its services, signature hotel designs, broad geographic coverage and convenient locations. GreenTree has further expanded its brand portfolio into mid-to-up-scale and luxury segments through a series of strategic investments. By offering diverse brands, through its strong membership base, expansive booking network, superior system management with reasonable charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a brand portfolio that features comfort, style and value.

For more information on GreenTree, please visit http://ir.998.com

GreenTree
Ms. Selina Yang
Phone: +86-21-3617-4886 ext. 7015
E-mail: [email protected]

Mr. Nicky Zheng
Phone: +86-21-3617-4886 ext. 6708
E-mail: [email protected]

Christensen
In Shanghai
Ms. Constance Zhang
Phone: +86-138-1645-1798
E-mail: [email protected]

In Hong Kong 
Ms. Karen Hui 
Phone: +852-9266-4140 
E-mail: [email protected]

In US 
Ms. Linda Bergkamp 
Phone: +1-480-614-3004
Email: [email protected]

Cision View original content:http://www.prnewswire.com/news-releases/greentree-to-report-third-quarter-2020-financial-results-on-december-2-2020-301171744.html

SOURCE GreenTree Hospitality Group Ltd.

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Almost half of working Canadians say they need mental health support

Canada NewsWire

Morneau Shepell’s Mental Health Index™ for October continues to trend well below the pre-pandemic benchmark with a decline in work productivity

TORONTO, Nov. 12, 2020 /CNW/ – Morneau Shepell, a leading provider of total wellbeing, mental health and digital mental health services, today released its monthly Mental Health Index™ report, revealing a consistent negative mental health score among Canadians at the seven-month mark of the pandemic. The findings show the impact of this extended period of strain and the presidential election in the United States are major contributing factors.

The Mental Health Index™ score is -11.4, representing a decline from September (-10.2). This decline puts working Canadians back to near the lowest point in April 2020, when the mental health score was -11.7. The score measures the improvement or decline in mental health from the pre-2020 benchmark of 75. The Mental Health Index™ also tracks sub-scores against the benchmark, measuring financial risk (2.5), psychological health (-2.5), isolation (-11.5), work productivity (-12.6), depression (-12.9), optimism (-13.0) and anxiety (-13.4).

Given the prolonged period of increased strain, nearly half (48 per cent) of respondents reported needing some form of mental health support. The most commonly reported source of mental health support is from family members (24 per cent), followed by support from friends or co-workers (20 per cent) and support from a mental health professional (eight per cent). Additionally, nine per cent of individuals reported needing support, but have not sought it. This group has, by far, the lowest mental health score (-33.9).

Both work productivity and savings have declined after a brief period of improvement
The score of -12.6 for work productivity is a decline that reverses modest gains over the summer, and brings us below where we were in June 2020 (-12.1). Another negative trend is evident in financial risk. For the second consecutive month, financial risk showed further decline after several months of improvement.

“COVID-19 continues to take a toll on the mental health of Canadians, and we are now approaching a point in the year when feelings of isolation, stress and anxiety will likely get worse,” said Stephen Liptrap, president and chief executive officer. “The restrictions imposed to combat the second wave of the pandemic and the approaching cold weather are keeping Canadians indoors for longer periods of time. Organizations need to make a conscious effort to check back in with employees and review their mental health strategies, or risk detrimental and long-term impacts on business performance.”

The research found that the majority (41 per cent) of respondents indicated that they are putting in more effort at work when compared to before the pandemic. These individuals also reported a lower mental health score (-12.0) than those who reported no change in work effort and those who put in less (-11.9 and -9.3, respectively). The increased effort is linked to the emotional strain that makes it harder for people to be as productive as they would have been otherwise.

“New workplace dynamics are influenced by what people are experiencing personally, now more than ever. The pandemic has had a significant impact on employees’ home, family and personal dynamics and work is impacted as well. Canadians have had to adapt to substantial changes in their routine and concerns about job and economic security, while at the same time finding news ways to keep a healthy work-life balance,” said Paula Allen, senior vice president of research, analytics and innovation. “At a minimum, each individual psychologically needs several things each day: a sense of accomplishment, social contact, fun, laughter and physical movement. Employers have a tremendous opportunity to encourage and support these healthy practices, which are part of building the resilience needed now and ongoing.”

Divisive U.S. presidential election taking a toll on Canadians’ mental health
The impact of the 2020 presidential election has extended north of the border in recent months, with Canadians feeling an impact on their mental health. Almost four in ten (38 per cent) felt that the U.S. election had a negative impact on their mental health, with this group also reporting the lowest mental health score (-16.7) across respondents. In contrast, only nine per cent of employees felt the election had a positive impact on their mental health. The mental health score for this group was significantly higher (-8.3) than the first group.

Prolonged uncertainty and information overload continue to contribute to Canadians’ mental strain, which is taken to a new extreme when factoring in political tension. Canadians understand that the presidential election will have a far-reaching economic and social impact on neighbouring countries, creating an added layer of stress for a population that has seen its collective mental health negatively impacted due to the COVID-19 health pandemic.

About the Mental Health Index™
The monthly survey by Morneau Shepell was conducted through an online survey in English and French from September 28 to October 19, 2020, 2020, with 3,000 respondents in Canada. All respondents reside in Canada and were employed within the last six months. The data has been statistically weighted to ensure the regional and gender composition of the sample reflect this population. The Mental Health Index™ is published monthly, beginning April 2020, and compares against benchmark data collected in 2017, 2018 and 2019. The full Canada report can be found at https://www.morneaushepell.com/permafiles/93109/mental-health-index-report-canada-october-2020.pdf.

About Morneau Shepell

Morneau Shepell is a leading provider of technology-enabled HR services that deliver an integrated approach to employee wellbeing through our cloud-based platform. Our focus is providing world-class solutions to our clients to support the mental, physical, social and financial wellbeing of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement consulting, actuarial and investment services. Morneau Shepell employs approximately 6,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.

SOURCE Morneau Shepell Inc.

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IDEAYA Biosciences, Inc. Reports Third Quarter 2020 Financial Results and Provides Business Update

– IDE397, a potential best-in-class MAT2A inhibitor for patients with solid tumors having MTAP deletion, targeting an IND-filing in December 2020

– PARG and Pol Theta programs targeting Development Candidate in 2021

– Targeting IDE196 / binimetinib combination dose selection and expansion in Q1 2021

– Anticipate interim data in 2021 for each of IDE196/binimetinib combination arm and IDE196 monotherapy arm of Phase 1/2 GNAQ/11 basket trial

PR Newswire

SOUTH SAN FRANCISCO, Calif., Nov. 12, 2020 /PRNewswire/ — IDEAYA Biosciences, Inc. (Nasdaq: IDYA), an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics, provided a business update and announced financial results for the third quarter ended September 30, 2020.

“We are advancing a broad pipeline of potential first-in-class synthetic lethality programs and executing on our IDE196 clinical strategy, including MEK and cMET combinations in MUM, and monotherapy development in skin melanoma and additional non-MUM GNAQ/11 solid tumors. Our synthetic lethality pipeline includes three programs recently partnered with GSK targeting MAT2A, Pol Theta and Werner Helicase, as well as three wholly-owned or controlled programs targeting PARG, DNA Damage Target 1 (DDT1) and DNA Damage Target 2 (DDT2).  We are continuing to invest in our synthetic lethality platform, including through our strategic partnerships with the Broad Institute and UCSD, and enhancing our internal research capabilities to extend our leadership in synthetic lethality,” said Yujiro S. Hata, Chief Executive Officer and President of IDEAYA Biosciences.

Program Updates

Key highlights for IDEAYA’s pipeline programs include:

IDE397 (MAT2A)

IDEAYA is developing IDE397, a potent and selective small molecule inhibitor targeting MAT2A, for solid tumors with MTAP deletions, a patient population estimated to represent approximately 15% of solid tumors.   IDEAYA continues to lead research and development on the MAT2A program through early clinical development.  Subject to exercise of its option, GSK will lead later stage global clinical development.  Highlights:

  • Evaluating efficacy of monotherapy IDE397 in over forty patient-derived xenograft (PDX) models with homozygous MTAP deletions in solid tumors;
  • Completed in-life phase of good laboratory practice (GLP)-compliant toxicology studies with IDE397 in two species;
  • Targeting IND submission for IDE397 in December 2020, subject to satisfactory completion of GLP toxicology studies and completion of chemistry, manufacturing and control, or CMC, certification requirements;
  • Plan to initiate a Phase 1 clinical trial for clinical evaluation of IDE397 as monotherapy in the first half of 2021, subject to effectiveness of the IND; and
  • IDEAYA and GSK are evaluating a potential phase 1 combination clinical trial for IDE397 and GSK’s Type I PRMT inhibitor, GSK3368715.

PARG

IDEAYA is advancing preclinical research for an inhibitor of PARG.  PARG inhibitors have shown synthetic lethality with tumors harboring homologous recombination deficiency (HRD) mutations and potentially other genetic and/or molecular signatures.   Highlights:

  • Demonstrated monotherapy PARG inhibitor in vivo efficacy in multiple PDX models
  • Entered into a strategic collaboration with the Broad Institute of MIT and Harvard, pursuant to which in a PARG program initiative, IDEAYA and Broad Institute will evaluate paralog CRISPR knockdown in selected cell lines in conjunction with pharmacological inhibition of PARG to inform patient selection and combination strategies in ovarian and breast cancer; and
  • Targeting to identify a PARG inhibitor development candidate in 2021.

Pol Theta

IDEAYA’s Pol Theta program targets tumors with BRCA or other HRD mutations.  IDEAYA and GSK are collaborating on ongoing preclinical research, including small molecules and protein degraders, and GSK will lead clinical development for the Pol Theta program.   Highlights:

  • Demonstrated in vivo efficacy with tumor regression in BRCA2 -/- xenograft model with IDEAYA Pol Theta inhibitor in combination with niraparib, a GSK PARP inhibitor; and
  • Targeting selection of a Pol Theta inhibitor development candidate in 2021.

Werner Helicase

IDEAYA is advancing preclinical research for an inhibitor targeting Werner Helicase for tumors with high microsatellite instability (MSI). IDEAYA and GSK are collaborating on ongoing preclinical research, and GSK will lead clinical development for the Werner Helicase program.  

DNA Damage Targets

IDEAYA has initiated multiple preclinical synthetic lethality research programs, designated as DDT1 and DDT2, to identify small molecule inhibitors for DNA Damage Targets (DDT’s) for patients with solid tumors characterized by a proprietary biomarker or gene signature. 

Synthetic Lethality Platform

IDEAYA continues to build its synthetic lethality platform, investing in target identification, biomarker discovery and drug discovery, including small molecules and protein degraders, to create and sustain an industry leading synthetic lethality pipeline. Highlights:

  • Synthetic lethality research platform integrates computational and functional capabilities to identify synthetic lethal pairs in defined patient populations; the platform includes parallel data sets with orthogonal content based on screens of curated, genetically defined model cells, including IDEAYA-proprietary libraries and data sets such as PAGEO™ and DECIPHER™, partnership data sets such as DepMap and Foundation Insights™, and multiple public databases.
  • PAGEO™ Paralogous Gene Evaluation in Ovarian Cancer – Broad Institute
    • Entered into a strategic collaboration with the Broad Institute of MIT and Harvard focused on synthetic lethality target and biomarker discovery
    • Collaboration will use large-scale CRISPR paralog screening platform developed at the laboratory of William R. Sellers, M.D., Core Institute Member, Broad Institute, to evaluate functionally redundant paralogous genes across ovarian cancer subtypes and to generate novel target and biomarker hypotheses
    • Dr. Sellers, who also serves on IDEAYA Scientific Advisory Board, is the principal investigator for the strategic collaboration
  • DECIPHER™ Dual CRISPER Synthetic Lethality Library – UCSD
    • Constructed DECIPHER Dual CRISPR library for synthetic lethality target and biomarker discovery in collaboration with the University of California, San Diego
    • Bioinformatics analysis and validation ongoing for DECIPHER 1.0 library, focused on DNA Damage Repair targets across various tumor suppressor genes and oncogenes selected based on their known prevalence and role in solid tumors
  • DepMap (Cancer Dependency Map) – Broad Institute
    • Joined the DepMap (Cancer Dependency Map) consortium led by the Broad Institute, through which we have access to a comprehensive data set of genome-wide cell-based synthetic lethality screens conducted by the Broad and other contributing institutes, including pre-publication access to new data releases

IDE196 (PKC)

IDEAYA continues to execute on its clinical trial strategy to evaluate IDE196 combination therapies in Metastatic Uveal Melanoma (MUM) and to evaluate IDE196 monotherapy in Non-MUM solid tumors harboring activating GNAQ/11 mutations.  Interim data for each of the IDE196 / binimetinib combination arm for MUM and the IDE196 monotherapy arm of the Phase 1/2 basket trial is anticipated in 2021.

Combination Therapies

IDEAYA expanded the scope of its clinical trial and supply agreement with Pfizer to evaluate IDE196 and crizotinib, a cMET inhibitor, as a combination therapy in patients having tumors harboring activating GNAQ or GNA11 hotspot mutations.  This extends the prior relationship to evaluate IDE196 and binimetinib, a MEK inhibitor, as a combination therapy in such patients.  Highlights:

  • Pfizer will supply IDEAYA with their cMET inhibitor, crizotinib, in addition to their MEK inhibitor, binimetinib, to support the IDEAYA-sponsored clinical combination trials
  • Targeting initiation of the IDE196/crizotinib study in late 2020 to early 2021
  • Continuing enrollment into the IDE196 / binimetinib combination arm under the clinical trial collaboration and supply agreement with Pfizer and targeting combination expansion in Q1 2021;

Monotherapy

IDEAYA is actively enrolling patients into the IDE196 monotherapy Phase 2 tissue-type agnostic basket arm in Non-MUM solid tumors having GNAQ or GNA11 hotspot mutations, including skin melanoma and other tumor types. Highlights:

  • As of November 1, 2020, enrolled a total of 7 patients with GNAQ/11-mutated non-MUM solid tumors into the Phase 2 monotherapy arm, including 6 patients with skin melanoma; and
  • Ongoing enrollment for Phase 2 cohort expansion in skin melanoma.

General

IDEAYA completed 13-week GLP-compliant toxicology studies for IDE196 in two species.

IDEAYA continues to monitor Covid-19 and its potential impact on clinical trials and timing of clinical data results.  Ongoing monitoring of enrolled patients, including obtaining patient computed tomography (CT) scans, may be impacted, and new patient enrollment into the Phase 2 expansion arm for IDE196 as a monotherapy in non-MUM solid tumors having GNAQ or GNA11 hotspot mutations may be delayed; the specific impacts are currently uncertain.

Corporate Updates

IDEAYA anticipates that existing cash, cash equivalents, and short-term and long-term marketable securities of $288.8 million as of September 30, 2020 will be sufficient to fund planned operations into 2024, and through potential achievement of multiple preclinical and clinical milestones across multiple programs.   

Our updated corporate presentation is available on our website, in the Presentations section of our Investor Relations page. See: https://ir.ideayabio.com/news-events/presentations

Financial Results

As of September 30, 2020, IDEAYA had cash, cash equivalents, and short-term and long-term marketable securities totaling $288.8 million. This compared to cash, cash equivalents and short-term marketable securities of $100.5 million at December 31, 2019.  The increase was primarily due to $100.7 million in net proceeds from IDEAYA’s follow-on public offering, $100.0 million from the upfront payment received from GSK, and $20.0 million in net proceeds from the private placement with GSK received through September 30, 2020.

Collaboration revenue for the three months ended September 30, 2020 totaled $9.0 million compared to zero for the same period in 2019. Collaboration revenue was recognized for the performance obligations satisfied through September 30, 2020 under the GSK Collaboration Agreement.

Research and development (R&D) expenses for the three months ended September 30, 2020 totaled $10.0 million compared to $8.9 million for the same period in 2019. The increase was primarily due to the Phase 1/2 clinical trial to evaluate IDE196 in solid tumors, and the advancement of our lead product candidates through preclinical studies and regulatory support activity, offset by a decrease in laboratory supplies and payroll expense.

General and administrative (G&A) expenses for the three months ended September 30, 2020 totaled $3.9 million compared to $2.7 million for the same period in 2019. The increase was primarily due to an increase in G&A headcount costs and an increase in consulting expenses.

The net loss for the three months ended September 30, 2020 was $4.9 million compared to $11.0 million for the same period in 2019. Total stock compensation expense for the three months ended September 30, 2020 was $1.0 million compared to $0.5 million for the same period in 2019.

About IDEAYA Biosciences

IDEAYA is an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics.  IDEAYA’s approach integrates capabilities in identifying and validating translational biomarkers with drug discovery to select patient populations most likely to benefit from its targeted therapies.  IDEAYA is applying its research and drug discovery capabilities to synthetic lethality – which represents an emerging class of precision medicine targets.   

Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements related to (i) the timing of filing of an IND and initiation of a Phase 1 clinical trial for IDE397, (ii) the timing of identification of a development candidate for a PARG in inhibitor, (iii) the timing of identification of a development candidate for a Pol Theta inhibitor, (iv) the timing of release of interim data for the IDE196/binimetinib combination arm of the Phase 1/2 GNAQ/11 basket trial, (v) the timing of release of interim data for the IDE196 monotherapy arm of the Phase 1/2 GNAQ/11 basket trial, (vi) the extent to which IDEAYA’s existing cash, cash equivalents, and marketable securities will fund its planned operations, and (vii) the timing of initiation of the IDE196/crizotinib study. Such forward-looking statements involve substantial risks and uncertainties that could cause IDEAYA’s preclinical and clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the drug development process, including IDEAYA’s programs’ early stage of development, the process of designing and conducting preclinical and clinical trials, the regulatory approval processes, the timing of regulatory filings, the challenges associated with manufacturing drug products, IDEAYA’s ability to successfully establish, protect and defend its intellectual property, the effects on IDEAYA’s business of the worldwide COVID-19 pandemic, and other matters that could affect the sufficiency of existing cash to fund operations. IDEAYA undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of IDEAYA in general, see IDEAYA’s recent Quarterly Report on Form 10-Q filed on November 12, 2020 and any current and periodic reports filed with the U.S. Securities and Exchange Commission.

 


IDEAYA Biosciences, Inc.


Condensed S
tatements of Operations
 and Comprehensive Loss


(in thousands, except share and per share amounts)


Three Months Ended


September 30,


Nine Months Ended


September 30,


2020


2019


2020


2019

Collaboration revenue

$

8,967

$

—

$

8,967

$

—

Total revenue

8,967

—

8,967

—

Operating expenses

Research and development

10,024

8,923

27,647

25,778

General and administrative

3,939

2,700

11,384

7,174

Total operating expenses

13,963

11,623

39,031

32,952

Loss from operations

(4,996)

(11,623)

(30,064)

(32,952)

Interest income and other income (expense),
     
net

70

654

704

1,758

Net loss

$

(4,926)

$

(10,969)

$

(29,360)

$

(31,194)

Change in unrealized gains (losses) on
     
marketable securities

(22)

41

(30)

109

Comprehensive loss

$

(4,948)

$

(10,928)

$

(29,390)

$

(31,085)

Net loss per share attributable to common

    stockholders, basic and diluted

$

(0.17)

$

(0.54)

$

(1.26)

$

(3.15)

Weighted average number of shares outstanding,

    basic and diluted

28,396,670

20,158,223

23,235,218

9,895,574

 

_____________

 


 IDEAYA Biosciences, Inc.


Condensed Balance Sheet Data

(in thousands)


September 30,


December 31,


2020


2019

Cash and cash equivalents and short-term and long-term
     
marketable securities

$

288,841

$

100,482

Total assets

301,384

113,001

Total liabilities

105,955

12,601

Total liabilities and stockholders’ equity

301,384

113,001

 

______________

 

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SOURCE IDEAYA Biosciences, Inc.

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ReneSola Power Announces Preliminary Third Quarter 2020 Result

– Company Expects Net Profits of At Least $2 million

PR Newswire

STAMFORD, Conn., Nov. 12, 2020 /PRNewswire/ — ReneSola Ltd (“ReneSola Power” or the “Company”) (www.renesolapower.com) (NYSE: SOL), a leading fully integrated solar project developer, today announced preliminary unaudited financial results for the third quarter of fiscal year 2020.

Preliminary Third Quarter 2020 Results

Based on preliminary unaudited results, the Company now expects revenue for the third quarter of 2020 to be at the high end of the previously announced guidance range of $8 million to $10 million. Gross margin for the third quarter of 2020 is expected to exceed 42%, compared to prior guidance of 38% to 42%. In addition, the Company expects a profitable third quarter with at least $2 million in net profits, which significantly exceed the current analyst consensus estimates.

Mr. Yumin Liu, ReneSola Power Chief Executive Officer, commented, “Solid revenue, coupled with our strong focus on prudent cost control, has enabled us to deliver robust bottom-line results.  We are encouraged by the pipeline of project activity, and remain optimistic about multi-year growth prospects. I also want to recognize the dedication of our team in executing our strategies despite the ongoing global uncertainty with the COVID-19 pandemic.”

ReneSola Power plans to release its third quarter 2020 financial results on Tuesday, December 1, 2020. The third quarter 2020 financial results included in this press release are preliminary. Actual results are subject to the completion of ReneSola Power’s financial closing procedures and review procedures by the Company’s independent registered public accounting firm.

About ReneSola Power

ReneSola Power (NYSE: SOL) is a leading global solar project developer and operator. The Company focuses on solar power project development, construction management and project financing services. With local professional teams in more than 10 countries around the world, the business is spread across a number of regions where the solar power project markets are growing rapidly, and can sustain that growth due to improved clarity around government policies. The Company’s strategy is to pursue high-margin project development opportunities in these profitable and growing markets; specifically, in the U.S. and Europe, where the Company has a market-leading position in several geographies, including Poland, Hungary, Minnesota and New York.

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/renesola-power-announces-preliminary-third-quarter-2020-result-301171499.html

SOURCE ReneSola Ltd.

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Cano Health, a Leading Value-Based Care Delivery Platform for Seniors, to Become Publicly Traded via Merger with Jaws Acquisition Corp.

– Cano Health is a primary care-centric, technology-powered healthcare delivery and population health platform that delivers superior clinical results at lower costs for its Medicare Advantage members

– The transaction will further accelerate Cano Health’s growth and enable expansion of value-based care in current and new geographies

– Transaction values Cano Health at an enterprise value of $4.4 billion and is expected to provide up to $1.49 billion in cash proceeds, including a fully committed PIPE of $800 million

– PIPE led by $50 million investment from Barry Sternlicht, Chairman of Jaws, as well as commitments from funds affiliated with Fidelity Management & Research Company, funds and accounts managed by BlackRock, Third Point and Maverick Capital

PR Newswire

MIAMI, Nov. 12, 2020 /PRNewswire/ — Cano Health, LLC (“Cano Health” or the “Company”), a leading value-based care delivery platform for seniors, and Jaws Acquisition Corp. (NYSE: JWS), a special purpose acquisition company, announced today they have entered into a definitive merger agreement that will support Cano Health’s vision of becoming America’s leader in primary care for seniors. Upon completion of the transaction, the combined company will operate as Cano Health, and will be listed on the New York Stock Exchange (NYSE) under the new ticker symbol “CANO.”

Founded in 2009, Cano Health provides value-based care for more than 103,000 members through its network of 564 primary care physicians across 14 markets in Florida, Texas, Nevada and Puerto Rico. The Company focuses on providing high-touch population health and wellness services to Medicare Advantage members, particularly in underserved communities where it can make the greatest impact. Cano Health’s proprietary CanoPanorama technology platform enables the delivery of high-quality health care services to its members, resulting in superior clinical outcomes at lower costs. Cano Health partners with leading health plans, including Humana, UnitedHealthcare, Anthem, Aetna, Centene and Devoted, to improve health outcomes and member experience.

Cano Health is one of the fastest growing providers of value-based care to Medicare Advantage populations in the nation, which is expected to be a $590 billion market in 2025. The Company has executed on a multi-pronged strategy of organic growth through existing centers, de novo clinics, and MSO affiliate practices, as well as growth through acquisitions to drive a historical revenue compound annual growth rate of over 70% since 2017. In addition, Cano Health was selected to participate as a Direct Contracting Entity by the Centers for Medicare and Medicaid Services (CMS) under the “American Choice Healthcare, LLC” brand that is scheduled to commence in April 2021 and has the potential to significantly expand the Company’s addressable market.

The transaction will further accelerate Cano Health’s growth and enable the expansion of its value-based care into new geographies. The Company is expected to receive up to $935 million in transaction proceeds to pay down debt and provide growth capital, and a substantial majority of up to $465 million of proceeds is expected to be allocated to Cano Health’s financial sponsor.

Cano Health’s management team, led by Founder and CEO Dr. Marlow Hernandez, will continue to lead the Company following the transaction. Barry Sternlicht, Co-Founder and Chairman of Jaws Acquisition Corp., will serve on the Company’s Board of Directors.

Management Comments

“The team at Jaws Acquisition Corp. recognizes our dedication to clinical and operational excellence and we are incredibly excited to partner with them to pursue numerous growth opportunities,” said Dr. Hernandez. “We have fulfilled and will always remain faithful to our mission – to improve patient health and quality of life by delivering superior primary care medical services, while forging life-long bonds with our members. We truly believe our model is transformative and can lead to fundamental improvements in America’s healthcare system, while helping Americans who need our help the most. In the process, we are revitalizing entire communities. Over the last ten years, we have watched our platform deliver results that benefit patients, providers and payors. At Cano Health, we understand the fundamental problems with traditional healthcare payment models. That’s why we continue to align incentives and help providers achieve profitability while providing superior medical care. Today, we take a big step in our effort to make healthcare in America more accessible, coordinated and affordable.”

“Cano Health’s mission of providing high-quality healthcare to a largely underserved population resonates with the principles of Jaws Acquisition Corp., which include doing well by doing good” said Mr. Sternlicht. “Cano Health has an exceptional, highly experienced management team led by Dr. Hernandez, and is incredibly well positioned to capitalize on the large and growing opportunity being driven by the government’s shift to Medicare Advantage and demographic tailwinds in the market. We are pleased to partner with Cano Health and provide the Company with the capital needed to accelerate the next phases of its growth to become one of the leading primary care providers in the country.”

“We are thrilled with how Cano Health has grown to become the leader in value-based healthcare for underserved seniors and look forward to watching it continue to expand nationwide,” said Elliot Cooperstone, Managing Partner of InTandem Capital Partners, Cano Health’s financial sponsor since 2016.

Key Transaction Terms

The transaction values the combined company at an enterprise value of approximately $4.4 billion and implies a multiple of 3.1x estimated 2021 revenues of $1.45 billion.

The business combination is expected to deliver up to $1.49 billion of gross proceeds, including the contribution of up to $690 million of cash held in Jaws Acquisition Corp.’s trust account and an $800 million concurrent private placement (PIPE) of common stock of the combined company, priced at $10.00 per share. The PIPE includes $50 million from Barry Sternlicht and the remainder from leading institutional investors, including funds affiliated with Fidelity Management & Research Company, funds and accounts and accounts managed by BlackRock, Third Point and Maverick Capital. Existing Cano Health shareholders will roll over approximately 90% of their equity stake into the new company.

Assuming no public shareholders of Jaws Acquisition Corp. exercise their redemption rights and after $465 million in cash consideration to Cano Health’s existing shareholders, Cano Health shareholders will own approximately 65%, Jaws Acquisition Corp. shareholders will own approximately 15%, PIPE investors will own approximately 17% and Jaws’ sponsor will own approximately 4% of the issued and outstanding shares of common stock, respectively, of the combined company at closing. Furthermore, the combined company will be capitalized with up to $535 million in cash, including proceeds received from the transaction and after paydown of approximately $400 million in debt.

The transaction, which has been unanimously approved by Cano Health and Jaws Acquisition Corp., is subject to approval by Jaws Acquisition Corp.’s shareholders and other customary closing conditions. The transaction is expected to close at the end of the first quarter or the beginning of the second quarter of 2021.

A more detailed description of the transaction terms and a copy of the Business Combination Agreement will be included in a current report on Form 8-K to be filed by Jaws Acquisition Corp. with the United States Securities and Exchange Commission (the “SEC”). Jaws Acquisition Corp. will file a registration statement (which will contain a proxy statement prospectus) with the SEC in connection with the transaction.

Advisors

Moelis & Company is acting as financial advisor to Cano Health.

Credit Suisse is serving as financial advisor and exclusive capital markets advisor to Cano Health. Credit Suisse is also serving as exclusive placement agent on the private offering.

Goodwin Procter LLP is serving as legal counsel to Cano Health and Cravath Swaine & Moore LLP is serving as counsel to certain shareholders, including members of Company management.

Kirkland & Ellis LLP is serving as legal counsel to Jaws Acquisition Corp.

Management Presentation

A presentation made by the management of Cano Health and Jaws Acquisition Corp. regarding the transaction will be available on Jaws Acquisition Corp.’s website https://www.jawsholdings.com/ and Cano Health’s website https://canohealth.com/. In connection with this event, Jaws Acquisition Corp. will file an investor presentation with the SEC, which can be viewed at www.sec.gov.

About Cano Health, LLC

Cano Health operates primary care centers and supports affiliated medical practices in Florida, Texas, Nevada, and Puerto Rico that specialize in value-based care for seniors. As part of its care coordination strategy, Cano Health provides high-touch population health management programs such as wellness activities, pharmacy services, home visits, telehealth, transition of care, and high-risk and complex care management.

The Company’s personalized patient care and proactive approach to wellness and preventive care is what sets it apart from competitors. In August 2020, Cano Health was ranked the 6th fastest growing healthcare company in the country on the Inc. 5000 list.

About
Jaws Acquisition Corp.

Jaws Acquisition Corp., led by Chairman Barry S. Sternlicht and Chief Executive Officer Joseph L. Dowling, is a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

Additional Information

In connection with the proposed business combination, Jaws intends to file with the SEC a registration statement on Form S-4, which will include a preliminary proxy prospectus and preliminary proxy statement. Jaws will mail a definitive proxy statement/final prospectus and other relevant documents relating to the proposed business combination to its shareholders. This press release is not a substitute for the registration statement, the definitive proxy statement/final prospectus or any other document that Jaws will send to its shareholders in connection with the business combination. Investors and security holders of Jaws are advised to read, when available, the proxy statement/prospectus in connection with Jaws’ solicitation of proxies for its extraordinary general meeting of shareholders to be held to approve the business combination (and related matters) because the proxy statement/prospectus will contain important information about the business combination and the parties to the business combination. The definitive proxy statement/final prospectus will be mailed to shareholders of Jaws as of a record date to be established for voting on the business combination. Shareholders will also be able to obtain copies of the proxy statement/prospectus without charge, once available, at the SEC’s website at www.sec.gov, or by directing a request to: 1601 Washington Avenue, Suite 800, Miami Beach, Florida, 33139.

Participants in the Solicitation

Jaws, the Company and their respective directors, executive officers, other members of management, and employees, under SEC rules, may be deemed participants in the solicitation of proxies of Jaws’ shareholders in connection with the business combination. Investors and security holders may obtain more detailed information regarding the names and interests in the business combination of Jaws’ directors and officers in Jaws’ filings with the SEC, including the registration statement to be filed with the SEC by Jaws, which will include the proxy statement of Jaws for the business combination, and such information and names of the Company’s managers and executive officers will also be in the registration statement to be filed with the SEC by Jaws, which will include the proxy statement of Jaws for the business combination.

No Offer of Solicitation

This press release is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the business combination or otherwise, nor shall there be any sale, issuance or transfer or securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

Forward-Looking Statements

Certain statements made herein are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding future events, the business combination between Jaws and the Company, the estimated or anticipated future results and benefits of the combined company following the business combination, including the likelihood and ability of the parties to successfully consummate the business combination, future opportunities for the combined company, and other statements that are not historical facts.

These statements are based on the current expectations of Jaws’ management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Jaws and the Company. These statements are subject to a number of risks and uncertainties regarding Jaws’ businesses and the business combination, and actual results may differ materially. These risks and uncertainties include, but are not limited to, general economic, political and business conditions; the inability of the parties to consummate the business combination or the occurrence of any event, change or other circumstances that could give rise to the termination of the business combination agreement; the outcome of any legal proceedings that may be instituted against the parties following the announcement of the business combination; the receipt of an unsolicited offer from another party for an alternative business transaction that could interfere with the business combination; the risk that the approval of the shareholders of Jaws or the Company for the potential transaction is not obtained; failure to realize the anticipated benefits of the business combination, including as a result of a delay in consummating the potential transaction or difficulty in integrating the businesses of Jaws and the Company; the risk that the business combination disrupts current plans and operations as a result of the announcement and consummation of the business combination; the ability of the combined company to grow and manage growth profitably and retain its key employees; the amount of redemption requests made by Jaws’ shareholders; the inability to obtain or maintain the listing of the post-acquisition company’s securities on NYSE following the business combination; costs related to the business combination; and those factors discussed in Jaws’ final prospectus relating to its initial public offering, dated May 13, 2020, and other filings with the SEC. There may be additional risks that Jaws presently does not know or that Jaws currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements provide Jaws’ expectations, plans or forecasts of future events and views as of the date of this communication. Jaws anticipates that subsequent events and developments will cause Jaws’ assessments to change. However, while Jaws may elect to update these forward-looking statements at some point in the future, Jaws specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Jaws’ assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.

This press release contains certain financial forecast information of Cano Health. Such financial forecast information constitutes forward-looking information, and is for illustrative purposes only and should not be relied upon as necessarily being indicative of future results. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive and other risks and uncertainties. See “Forward-Looking Statements” above. Actual results may differ materially from the results contemplated by the financial forecast information contained in this press release, and the inclusion of such information in this press release should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.

 

Cision View original content:http://www.prnewswire.com/news-releases/cano-health-a-leading-value-based-care-delivery-platform-for-seniors-to-become-publicly-traded-via-merger-with-jaws-acquisition-corp-301171741.html

SOURCE Jaws Acquisition Corp.; Cano Health, LLC

Posted on

Cascades Reports Results for the Third Quarter of 2020

PR Newswire


Positive outlook supported by favourable containerboard industry dynamics

KINGSEY FALLS, QC, Nov. 12, 2020 /PRNewswire/ – Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended September 30, 2020.


Q3 2020 Highlights

  • Sales of $1,275 million (compared with $1,285 million in Q2 2020 (-1%) and $1,264 million in Q3 2019 (+1%))
  • As reported (including specific items)
    • Operating income of $73 million (compared with $94 million in Q2 2020 (-22%) and $108 million in Q3 20192 (-32%))
    • Operating income before depreciation and amortization (OIBD)1 of $154 million (compared with $169 million in Q2 2020 (-9%) and $181 million in Q3 20192 (-15%))
    • Net earnings per share of $0.51 (compared with $0.57 in Q2 2020 and $0.45 in Q3 20192)
  • Adjusted (excluding specific items)1
    • Operating income of $81 million (compared with $111 million in Q2 2020 (-27%) and $88 million in Q3 2019 (-8%))
    • OIBD of $162 million (compared with $186 million in Q2 2020 (-13%) and $161 million in Q3 2019 (+1%))
    • Net earnings per share of $0.50 (compared with $0.61 in Q2 2020 and $0.30 in Q3 2019)
  • Added US$300 million of Senior Notes due in 2028; Redeemed US$200 million of remaining 2023 Senior Notes.
  • Net debt1 of $1,982 million as at September 30, 2020 (compared with $2,077 million as at June 30, 2020) reflecting solid cash flow from operations. Net debt to adjusted OIBD ratio1 at 3.0x down from 3.1x as at June 30, 2020.
  • European Boxboard business announced the acquisition of Papelera del Principado S.A. (“Paprinsa”).
  • Announced plans for the Bear Island containerboard conversion project in Virginia, USA in October and concurrently completed a bought deal equity issue of 7,441,000 shares priced at $16.80, generating gross proceed of $125 million to finance a portion of the project.
  • Announced the closure of two tissue production and converting operations in Pennsylvania.


1 For further details, please refer to the “Supplemental Information on non-IFRS Measures” section.


2 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

Mario Plourde, President and CEO, commented: “We are pleased with our consolidated third quarter results. Within an ever-evolving business environment, demand levels for containerboard remained robust. This strength drove higher sequential quarterly sales volume in this business, offsetting higher energy costs and an approximate $3 million impact from unplanned operational shutdowns at our Niagara Falls, NY complex. Similarly, our Specialty Products segment generated solid results, benefiting from strong demand for our sustainable food packaging product offerings. Results in our Tissue business were mixed. As expected, demand remained strong for consumer tissue, while the reverse was true for Away-from-Home products given the impact that Covid-19 is having on businesses, restaurants, hotels and schools. This segment, which accounts for approximately 40% of our annual tissue sales, experienced sharp decreases in demand for some products. We have taken steps to adjust production capacity by temporarily closing several facilities that serve this market, and continue to evaluate opportunities to adapt some capacity for different products. Lastly, results in the European Boxboard segment reflected the usual softer seasonal third quarter volumes, the effects of which were partially offset by favourable raw material pricing and lower energy costs.

On the strategic side, we are very pleased to have announced the launch of our Bear Island project in mid-October. This is an important strategic investment for our containerboard business, one which we are confident will benefit operational performance, enhance our product offering in lightweight recycled containerboard and position our containerboard platform for long-term profitable growth within this competitive industry. We are equally pleased to have completed the $125 million equity issuance (offering) that was announced concurrently with the Bear Island project. The proceeds of this offering will be primarily dedicated to financing Bear Island, but may also be used for other ongoing capital projects. The European Boxboard segment also announced the strategic acquisition of one of the main European coated chipboard players, Papelera del Principado S.A. (“Paprinsa”), and three smaller adjoining companies, that will strengthen and consolidate Reno de Medici’s position as the number two manufacturer of recycled boxboard in Europe, while strengthening its competitive position in Spain and the surrounding markets.”

Discussing near-term outlook, Mr. Plourde commented, “In light of ongoing ambiguity related to the pandemic, we are cautiously optimistic regarding our performance in the near-term. Demand dynamics in containerboard remain strong, with results expected to also benefit from the announced US$50/st price increase beginning in the fourth quarter. In Tissue, usual seasonal softness in the fourth quarter and Covid-19 driven demand contraction in the Away-from-Home product categories are expected to translate into weaker sequential performance. Ongoing modernization initiatives in this business, which include the integration of the Orchids assets and final investments in state-of-the-art converting equipment, are delivering targeted returns and will generate increasing benefits as implementation costs trend down. Near-term performance in Specialty Products is forecasted to remain solid, supported by continued strong demand trends for consumer food packaging, while sequential  results in European Boxboard are expected to decrease slightly as a result of lack of certainty regarding volume and less favourable mix of products. On a consolidated basis, raw material costs are expected to continue to be favourable for our businesses. Looking ahead, results are projected to benefit from a margin improvement initiative started earlier this year that is expected to generate a 1% annual increase in our consolidated OIBD margin for the next two years. Given persistent uncertainty around Covid-19, we remain focused on the health and safety of our employees and working with our customers to ensure that their needs and expectations for our essential packaging and tissue products are not only met but surpassed. Cash flow management supported by operational flexibility, resilience and execution remain the top priorities for Cascades’ management team, and will continue to be essential to successfully navigate the current unusual and less predictable environment.”


Financial Summary

Selected consolidated information

(in millions of Canadian dollars, except amounts per share) (unaudited)


Q3 2020

Q2 2020

Q3 2019

Sales


1,275

1,285

1,264


As Reported

Operating income before depreciation and amortization (OIBD)1 2


154

169

181

Operating income2


73

94

108

Net earnings2


49

54

43

per share2


$


0.51

$

0.57

$

0.45


Adjusted1

Operating income before depreciation and amortization (OIBD)


162

186

161

Operating income


81

111

88

Net earnings


48

58

28

per share


$


0.50

$

0.61

0.30

Margin (OIBD)


12.7%

14.5%

12.7%

Segmented OIBD as reported

(in millions of Canadian dollars) (unaudited)


Q3 2020

Q2 2020

Q3 2019


Packaging Products

Containerboard


101

83

120

Boxboard Europe


31

42

25

Specialty Products


16

16

14


Tissue Papers
2


25

48

49

Corporate Activities


(19)

(20)

(27)


OIBD as reported


154

169

181


1  Please refer to the “Supplemental Information on Non-IFRS Measures” section for reconciliation of these figures.


2 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

 

Segmented adjusted OIBD1

(in millions of Canadian dollars) (unaudited)


Q3 2020

Q2 2020

Q3 2019


Packaging Products

Containerboard


100

94

118

Boxboard Europe


29

43

25

Specialty Products


16

17

16


Tissue Papers


36

54

24

Corporate Activities


(19)

(22)

(22)


Adjusted OIBD


162

186

161

1 – Refer to the “Supplemental Information on Non-IFRS Measures” section.


Analysis of results for the three-month period ended September 30, 2020 (compared to the same period last year)

Sales of $1,275 million grew by $11 million, or 1%, compared with the same period last year. This was largely a reflection of the volume-driven 7% increase in the Containerboard segment and favourable foreign exchange rate for all business segments. These benefits were offset by lower sales in the Tissue business driven by demand contraction in the Away-from-Home segment and lower average selling prices and/or less favourable sales mix in all packaging segments. While volumes grew in the Specialty Products segment, these benefits were largely offset by the mill closure and business divestiture completed in 2019.

The Corporation generated an operating income before depreciation and amortization (OIBD) of $154 million in the third quarter of 2020, down from $181 million in the third quarter of 20192. On an adjusted basis, third quarter OIBD totaled $162 million, an increase of $1 million, or 1% from the $161 million generated in the same period last year. The annual adjusted OIBD reflects increases of $12 million from Tissue and $4 million from Boxboard Europe and stable results in the Specialty Products segment. These benefits were offset by a decrease of $18 million from the Containerboard segment, as the benefits of increased volume were offset by higher year-over-year raw material costs and a less favourable selling price and sales mix. Research and development tax credits of $9 million were recorded in the current quarter.

On an adjusted basis1, third quarter 2020 OIBD stood at $162 million, versus $161 million in the previous year.  The main specific items, before income taxes, that impacted our third quarter 2020 OIBD and/or net earnings were:

  • $7 million of gains recorded in Containerboard and Tissue related to the sale of previously closed assets (OIBD and net earnings);
  • $3 million of restructuring charges recorded in Containerboard following the announced closure of a converting facility in Ontario by no later than August 31, 2021 (OIBD and net earnings);
  • $13 million of impairment charges recorded in Tissue related to changes in the valuation of certain assets due to the current economic and market demand conditions (OIBD and net earnings);
  • $1 million unrealized gain on financial instruments (OIBD and net earnings);
  • $11 million foreign exchange gain on long-term debt and financial instruments (net earnings);

For the 3-month periods ended September 30, 2020, the Corporation posted net earnings of $49 million, or $0.51 per share, compared to net earnings of $43 million, or $0.45 per share, in the same period of 20192. On an adjusted basis1, the Corporation generated net earnings of $48 million in the third quarter of 2020, or $0.50 per share, compared to net earnings of $28 million, or $0.30 per share, in the same period of 2019.


1   For further details, please refer to the “Supplemental Information on non-IFRS Measures” section.


2 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation


Dividend on common shares and normal course issuer bid

The Board of Directors of Cascades declared a quarterly dividend of $0.08 per share to be paid on December 3, 2020 to shareholders of record at the close of business on November 20, 2020. This dividend is an “eligible dividend” as per the Income Tax Act (R.C.S. (1985), Canada). Cascades did not purchase any shares for cancellation during the third quarter of 2020.


2020 Third Quarter Results Conference Call Details

Management will discuss the 2020 third quarter financial results during a conference call today at 9:00 a.m. EDT. The call can be accessed by dialing 1-888-231-8191 (international dial-in 1-647-427-7450). The conference call, including the investor presentation, will be broadcast live on the Cascades website (www.cascades.com under the “Investors” section). A replay of the call will be available on the Cascades website and may also be accessed by phone until December 12, 2020 by dialing 1-855-859-2056 (international dial-in 1-416-849-0833), access code 4158758.

Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs 12,000 women and men across a network of 88 facilities in North America and Europe. Driven by its participative management, half a century of experience in recycling, and continuous research and development efforts, Cascades continues to provide innovative products that customers have come to rely on, while contributing to the well-being of people, communities and the entire planet. Cascades’ shares trade on the Toronto Stock Exchange under the ticker symbol CAS. Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Corporation’s products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Corporation’s Securities and Exchange Commission filings.

CONSOLIDATED BALANCE SHEETS

(in millions of Canadian dollars) (unaudited)


September 30,
2020

December 31,
2019


Assets


Current assets

Cash and cash equivalents


227

155

Accounts receivable


661

606

Current income tax assets


23

32

Inventories


606

598

Current portion of financial assets


9

10


1,526

1,401


Long-term assets

Investments in associates and joint ventures


86

80

Property, plant and equipment


2,785

2,770

Intangible assets with finite useful life


166

182

Financial assets


19

16

Other assets


48

55

Deferred income tax assets


179

153

Goodwill and other intangible assets with indefinite useful life


534

527


5,343

5,184


Liabilities and Equity


Current liabilities

Bank loans and advances


9

11

Trade and other payables


800

788

Current income tax liabilities


19

17

Current portion of other debt without recourse to the Corporation to be refinanced


162

—

Current portion of long-term debt


91

85

Current portion of provisions for contingencies and charges


7

5

Current portion of financial liabilities and other liabilities


30

137


1,118

1,043


Long-term liabilities

Long-term debt


1,947

2,022

Provisions for contingencies and charges


55

49

Financial liabilities


4

5

Other liabilities


212

198

Deferred income tax liabilities


210

198


3,546

3,515


Equity

Capital stock


498

491

Contributed surplus


13

15

Retained earnings


1,089

1,003

Accumulated other comprehensive loss


(10)

(17)


Equity attributable to Shareholders


1,590

1,492

Non-controlling interests


207

177


Total equity


1,797

1,669


5,343

5,184

CONSOLIDATED STATEMENTS OF EARNINGS


For the 3-month periods ended
September 30,


For the 9-month periods ended
September 30,

(in millions of Canadian dollars, except per common share amounts and number of common shares) (unaudited)


2020

2019


2020

2019


Sales


1,275

1,264


3,873

3,769


Cost of sales and expenses

Cost of sales (including depreciation and amortization of $81 million
for 3-month period (2019 — $73 million) and $227 million 
for 9-month period (2019 — $212 million))


1,086

1,071


3,243

3,210

Selling and administrative expenses


107

105


348

320

Gain on acquisitions, disposals and others


(7)

(22)


(5)

(29)

Impairment charges and restructuring costs


16

1


31

11

Foreign exchange loss (gain)


1

—


—

(1)

Loss (gain) on derivative financial instruments


(1)

1


(1)

(4)


1,202

1,156


3,616

3,507


Operating income


73

108


257

262

Financing expense


25

24


79

74

Interest expense on employee future benefits and other liabilities


1

24


3

48

Loss on repurchase of long-term debt


6

—


6

—

Foreign exchange gain on long-term debt and financial instruments


(11)

—


(3)

(7)

Share of results of associates and joint ventures


(3)

(2)


(9)

(6)


Earnings before income taxes


55

62


181

153


Provision for (recovery of)  income taxes


(3)

12


24

30


Net earnings including non-controlling interests for the period


58

50


157

123


Net earnings attributable to non-controlling interests


9

7


32

25


Net earnings attributable to Shareholders for the period


49

43


125

98


Net earnings per common share

Basic


$


0.51

$

0.45


$


1.32

$

1.04

Diluted


$


0.50

$

0.44


$


1.30

$

1.02


Weighted average basic number of common shares outstanding


95,019,694

93,860,367


94,577,538

93,886,909


Weighted average number of diluted common shares


96,077,440

95,519,226


95,735,264

95,437,252

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


For the 3-month periods ended September 30,


For the 9-month periods ended September 30,

(in millions of Canadian dollars) (unaudited)


2020

2019


2020

2019


Net earnings including non-controlling interests for the period


58

50


157

123


Other comprehensive income (loss)


Items that may be reclassified subsequently to earnings


Translation adjustments

Change in foreign currency translation of foreign subsidiaries


(14)

1


43

(57)

Change in foreign currency translation related to net investment hedging activities


7

(3)


(27)

32


Cash flow hedges

Change in fair value of foreign exchange forward contracts


—

—


—

1

Change in fair value of interest rate swaps


—

—


—

(1)

Change in fair value of commodity derivative financial instruments


2

1


2

(1)


(5)

(1)


18

(26)


Items that are not released to earnings

Actuarial gain (loss) on employee future benefits


(4)

2


(19)

(13)

Recovery of income taxes


1

—


5

3


(3)

2


(14)

(10)


Other comprehensive income (loss)


(8)

1


4

(36)


Comprehensive income including non-controlling interests for the period


50

51


161

87


Comprehensive income attributable to non-controlling interests for the period


12

4


43

13


Comprehensive income attributable to Shareholders for the period


38

47


118

74

 

CONSOLIDATED STATEMENTS OF EQUITY


For the 9-month period ended September 30, 2020

(in millions of Canadian dollars)
(unaudited)

CAPITAL
STOCK

CONTRIBUTED
SURPLUS

RETAINED
EARNINGS

ACCUMULATED
OTHER
COMPREHENSIVE
LOSS

TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS

NON-
CONTROLLING
INTERESTS

TOTAL
EQUITY


Balance – End of previous
period, as reported


491


15


1,000


(17)


1,489


177


1,666

Business combinations


—


—


3


—


3


—


3


Adjusted balance – Beginning
of period


491


15


1,003


(17)


1,492


177


1,669

Comprehensive income (loss)

Net earnings


—


—


125


—


125


32


157

Other comprehensive income (loss)


—


—


(14)


7


(7)


11


4


—


—


111


7


118


43


161

Dividends


—


—


(22)


—


(22)


(13)


(35)

Issuance of common shares upon exercise of stock options


9


(2)


—


—


7


—


7

Redemption of common shares


(2)


—


(3)


—


(5)


—


(5)


Balance – End of period


498


13


1,089


(10)


1,590


207


1,797

For the 9-month period ended September 30, 2019

(in millions of Canadian dollars)
(unaudited)

CAPITAL
STOCK

CONTRIBUTED
SURPLUS

RETAINED
EARNINGS

ACCUMULATED
OTHER
COMPREHENSIVE
INCOME (LOSS)

TOTAL EQUITY
ATTRIBUTABLE TO
SHAREHOLDERS

NON-
CONTROLLING
INTERESTS

TOTAL
EQUITY


Adjusted balance – Beginning of period

490

16

989

2

1,497

180

1,677

Comprehensive income (loss)

Net earnings

—

—

98

—

98

25

123

Other comprehensive loss

—

—

(10)

(14)

(24)

(12)

(36)

—

—

88

(14)

74

13

87

Dividends

—

—

(15)

—

(15)

(14)

(29)

Issuance of common shares upon exercise of stock options

5

(1)

—

—

4

—

4

Redemption of common shares

(5)

—

(3)

—

(8)

—

(8)

Disposal of a subsidiary

—

—

—

—

—

(1)

(1)

Capital contribution from a non-controlling interest

—

—

(3)

—

(3)

—

(3)


Balance – End of period

490

15

1,056

(12)

1,549

178

1,727

 

CONSOLIDATED STATEMENTS OF CASH FLOWS


For the 3-month periods ended
September 30,


For the 9-month periods
ended September 30,

(in millions of Canadian dollars) (unaudited)


2020

2019


2020

2019


Operating activities

Net earnings attributable to Shareholders for the period


49

43


125

98

Adjustments for:

Financing expense and interest expense on employee future benefits and other liabilities


26

48


82

122

Loss on repurchase of long-term debt


6

—


6

—

Depreciation and amortization


81

73


227

212

Gain on acquisitions, disposals and others


(7)

(26)


(5)

(32)

Impairment charges and restructuring costs


16

1


31

6

Unrealized loss (gain) on derivative financial instruments


(1)

1


(1)

(4)

Foreign exchange gain on long-term debt and financial instruments


(11)

—


(3)

(7)

Provision for (recovery of)  income taxes


(3)

12


24

30

Share of results of associates and joint ventures


(3)

(2)


(9)

(6)

Net earnings attributable to non-controlling interests


9

7


32

25

Net financing expense paid


(49)

(42)


(73)

(101)

Premium paid on repurchase of long-term debt


(4)

—


(4)

—

Net income taxes received (paid)


(1)

(12)


1

(14)

Dividends received


2

1


7

3

Employee future benefits and others


(4)

—


(19)

(22)


106

104


421

310

Changes in non-cash working capital components


30

53


(38)

(13)


136

157


383

297


Investing activities

Disposals of associates and joint ventures


4

—


3

1

Payments for property, plant and equipment


(52)

(66)


(165)

(185)

Proceeds from disposals of property, plant and equipment


7

19


9

21

Change in intangible and other assets


(3)

(1)


(8)

(3)

Cash paid for business combinations


—

(300)


—

(314)

Proceeds on disposals of a subsidiary, net of cash disposed


—

9


—

9


(44)

(339)


(161)

(471)


Financing activities

Bank loans and advances


—

(2)


(2)

(2)

Change in credit facilities


(138)

252


(81)

317

Issuance of unsecured senior notes, net of related expenses


409

—


409

—

Repurchase of unsecured senior notes


(264)

—


(264)

—

Increase in other long-term debt


—

—


—

7

Payments of other long-term debt


(22)

(15)


(64)

(94)

Settlement of derivative financial instruments


—

—


1

—

Issuance of common shares upon exercise of stock options


—

4


7

4

Redemption of common shares


—

(3)


(5)

(8)

Partial disposal of a subsidiary to non-controlling interests


—

—


—

—

Payment of other liabilities


—

—


(121)

—

Dividends paid to non-controlling interests


(4)

(4)


(13)

(14)

Dividends paid to the Corporation’s Shareholders


(7)

(8)


(22)

(15)


(26)

224


(155)

195


Change in cash and cash equivalents during the period


66

42


67

21


Currency translation on cash and cash equivalents


(1)

(2)


5

(6)


Cash and cash equivalents – Beginning of period


162

98


155

123


Cash and cash equivalents – End of period


227

138


227

138

SEGMENTED INFORMATION

The Corporation analyzes the performance of its operating segments based on their operating income before depreciation and amortization, which is not a measure of performance under International Financial Reporting Standards (IFRS). However, the chief operating decision-maker (CODM) uses this performance measure to assess the operating performance of each reportable segment. Earnings for each segment are prepared on the same basis as those of the Corporation. Intersegment operations are recorded on the same basis as sales to third parties, which are at fair market value. The accounting policies of the reportable segments are the same as the Corporation’s accounting policies described in its most recent audited consolidated financial statements for the year ended December 31, 2019.

The Corporation’s operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The Chief Executive Officer has authority for resource allocation and management of the Corporation’s performance and is therefore the CODM.

The Corporation’s operations are managed in four segments: Containerboard, Boxboard Europe and Specialty Products (which constitutes the Corporation’s Packaging Products), and Tissue Papers.

SALES


For the 3-month periods ended September 30,

Canada

United States

Italy

Other countries

Total

(in millions of Canadian dollars)
(unaudited)


2020

2019


2020

2019


2020

2019


2020

2019


2020

2019


Packaging Products

Containerboard


307

289


199

184


—

—


—

—


506

473

Boxboard Europe


—

—


—

—


79

88


182

168


261

256

Specialty Products


42

35


75

74


—

—


—

14


117

123

Intersegment sales


(2)

(4)


(2)

—


—

—


—

—


(4)

(4)


347

320


272

258


79

88


182

182


880

848


Tissue Papers


72

64


292

320


—

—


—

3


364

387

Intersegment sales and Corporate Activities


32

28


(1)

1


—

—


—

—


31

29


451

412


563

579


79

88


182

185


1,275

1,264

SALES


For the 9-month periods ended September 30,

Canada

United States

Italy

Other countries

Total

(in millions of Canadian dollars)
(unaudited)


2020

2019


2020

2019


2020

2019


2020

2019


2020

2019


Packaging Products

Containerboard


835

824


582

550


—

—


1

2


1,418

1,376

Boxboard Europe


—

—


—

—


240

247


558

558


798

805

Specialty Products


119

104


229

233


—

1


2

49


350

387

Intersegment sales


(9)

(10)


(3)

(1)


—

—


—

—


(12)

(11)


945

918


808

782


240

248


561

609


2,554

2,557


Tissue Papers


207

192


1,026

910


—

—


1

10


1,234

1,112

Intersegment sales and Corporate Activities


86

93


(1)

7


—

—


—

—


85

100


1,238

1,203


1,833

1,699


240

248


562

619


3,873

3,769

 

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION


For the 3-month periods ended
September 30,


For the 9-month periods



ended September 30,

(in millions of Canadian dollars) (unaudited)


2020

2019


2020

2019


Packaging Products

Containerboard


101

120


286

345

Boxboard Europe


31

25


104

84

Specialty Products


16

14


43

43


148

159


433

472


Tissue Papers


25

49


118

70


Corporate Activities


(19)

(27)


(67)

(68)


Operating income before depreciation and amortization


154

181


484

474

Depreciation and amortization


(81)

(73)


(227)

(212)

Financing expense and interest expense on employee future benefits and other liabilities


(26)

(48)


(82)

(122)

Loss on repurchase of long-term debt


(6)

—


(6)

—

Foreign exchange gain on long-term debt and financial instruments


11

—


3

7

Share of results of associates and joint ventures


3

2


9

6


Earnings before income taxes


55

62


181

153

 

PAYMENTS FOR PROPERTY, PLANT AND EQUIPMENT


For the 3-month periods ended
September 30,


For the 9-month periods
ended September 30,

(in millions of Canadian dollars) (unaudited)


2020

2019


2020

2019


Packaging Products

Containerboard


36

19


67

55

Boxboard Europe


14

13


23

41

Specialty Products


6

4


15

11


56

36


105

107


Tissue Papers


23

27


62

74


Corporate Activities


5

19


16

40


Total acquisitions


84

82


183

221

Proceeds from disposals of property, plant and equipment


(7)

(19)


(9)

(21)

Right-of-use assets acquisitions and acquisitions included in other debts


(23)

(9)


(36)

(42)


54

54


138

158

Acquisitions for property, plant and equipment included in “Trade and other payables”

Beginning of period


19

24


46

37

End of period


(28)

(31)


(28)

(31)


Payments for property, plant and equipment net of proceeds from disposals


45

47


156

164

SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES

SPECIFIC ITEMS

The Corporation incurs some specific items that adversely or positively affect its operating results. We believe it is useful for readers to be aware of these items as they provide additional information to measure performance, compare the Corporation’s results between periods, and assess operating results and liquidity, notwithstanding these specific items. Management believes these specific items are not necessarily reflective of the Corporation’s underlying business operations in measuring and comparing its performance and analyzing future trends. Our definition of specific items may differ from those of other corporations and some of them may arise in the future and may reduce the Corporation’s available cash.

They include, but are not limited to, charges for (reversals of) impairment of assets, restructuring gains or costs, loss on refinancing and repurchase of long-term debt, some deferred tax asset provisions or reversals, premiums paid on repurchase of long-term debt, gains or losses on the acquisition or sale of a business unit, gains or losses on the share of results of associates and joint ventures, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, unrealized gains or losses on interest rate swaps, foreign exchange gains or losses on long-term debt and financial instruments, specific items of discontinued operations and other significant items of an unusual, non-cash or non-recurring nature.

RECONCILIATION OF NON-IFRS MEASURES

To provide more information for evaluating the Corporation’s performance, the financial information included in this analysis contains certain data that are not performance measures under IFRS (“non-IFRS measures”), which are also calculated on an adjusted basis to exclude specific items. We believe that providing certain key performance measures and non-IFRS measures is useful to both Management and investors, as they provide additional information to measure the performance and financial position of the Corporation. This also increases the transparency and clarity of the financial information. The following non-IFRS measures are used in our financial disclosures:

  • Operating income before depreciation and amortization (OIBD): Used to assess operating performance and the contribution of each segment when excluding depreciation and amortization. OIBD is widely used by investors as a measure of a corporation’s ability to incur and service debt and as an evaluation metric.
  • Adjusted OIBD: Used to assess operating performance and the contribution of each segment on a comparable basis.
  • Adjusted operating income: Used to assess operating performance of each segment on a comparable basis.
  • Adjusted net earnings: Used to assess the Corporation’s consolidated financial performance on a comparable basis.
  • Adjusted free cash flow: Used to assess the Corporation’s capacity to generate cash flows to meet financial obligations and/or discretionary items such as share repurchase, dividend increase and strategic investments.
  • Net debt to adjusted OIBD ratio: Used to measure the Corporation’s credit performance and evaluate financial leverage.
  • Net debt to adjusted OIBD ratio on a pro-forma basis: Used to measure the Corporation’s credit performance and evaluate the financial leverage on a comparable basis, including significant business acquisitions and excluding significant business disposals, if any.

Non-IFRS measures are mainly derived from the consolidated financial statements, but do not have meanings prescribed by IFRS. These measures have limitations as an analytical tool and should not be considered on their own or as a substitute for an analysis of our results as reported under IFRS. In addition, our definitions of non-IFRS measures may differ from those of other corporations. Any such modification or reformulation may be significant.

The reconciliation of operating income (loss) to OIBD, to adjusted operating income (loss) and to adjusted OIBD by business segment is as follows:


Q3 2020

(in millions of Canadian dollars) (unaudited)


Containerboard


Boxboard
Europe


Specialty
Products


Tissue Papers


Corporate
Activities


Consolidated


Operating income (loss)


71


19


11


3


(31)


73

Depreciation and amortization


30


12


5


22


12


81


Operating income (loss) before depreciation and amortization


101


31


16


25


(19)


154

Specific items:

Gain on acquisitions, disposals and others


(5)


—


—


(2)


—


(7)

Impairment charges


—


—


—


13


—


13

Restructuring costs


3


—


—


—


—


3

Unrealized loss (gain) on financial instruments


1


(2)


—


—


—


(1)


(1)


(2)


—


11


—


8


Adjusted operating income (loss) before depreciation and
amortization


100


29


16


36


(19)


162


Adjusted operating income (loss)


70


17


11


14


(31)


81

 

Q2 2020

(in millions of Canadian dollars) (unaudited)

Containerboard

Boxboard
Europe

Specialty
Products

Tissue Papers

Corporate
Activities

Consolidated


Operating income (loss)

54

30

11

31

(32)

94

Depreciation and amortization

29

12

5

17

12

75


Operating income (loss) before depreciation and amortization

83

42

16

48

(20)

169

Specific items :

Loss on acquisitions, disposals and others

—

—

1

—

—

1

Impairment charges

8

—

—

5

—

13

Restructuring costs

1

—

—

1

—

2

Unrealized loss (gain) on derivative financial instruments

2

1

—

—

(2)

1

11

1

1

6

(2)

17


Adjusted operating income (loss) before depreciation and
amortization

94

43

17

54

(22)

186


Adjusted operating income (loss)

65

31

12

37

(34)

111

 

Q3 2019

(in millions of Canadian dollars) (unaudited)

Containerboard

Boxboard
Europe

Specialty
Products

Tissue Papers1

Corporate
Activities

Consolidated


Operating income (loss)

91

14

10

34

(41)

108

Depreciation and amortization

29

11

4

15

14

73


Operating income (loss) before depreciation and amortization

120

25

14

49

(27)

181

Specific items:

Loss (gain) on acquisitions, disposals and others

(2)

—

1

(25)

4

(22)

Impairment charges

—

—

1

—

—

1

Unrealized loss on financial instruments

—

—

—

—

1

1

(2)

—

2

(25)

5

(20)


Adjusted operating income (loss) before depreciation and
amortization

118

25

16

24

(22)

161


Adjusted operating income (loss)

89

14

12

9

(36)

88


1 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

Net earnings, as per IFRS, is reconciled below with operating income, adjusted operating income and adjusted operating income before depreciation and amortization:

(in millions of Canadian dollars) (unaudited)


Q3 2020

Q2 2020

Q3 20191


Net earnings attributable to Shareholders for the period


49

54

43

Net earnings attributable to non-controlling interests


9

12

7

Provision for (recovery of) income taxes


(3)

12

12

Share of results of associates and joint ventures


(3)

(3)

(2)

Foreign exchange gain on long-term debt and financial instruments


(11)

(9)

—

Financing expense and interest expense on employee future benefits and other liabilities and other liabilities and loss on
repurchase of long-term debt


32

28

48


Operating income


73

94

108

Specific items:

Loss (gain) on acquisitions, disposals and others


(7)

1

(22)

Impairment charges


13

13

1

Restructuring costs


3

2

—

Unrealized loss (gain) on derivative financial instruments


(1)

1

1


8

17

(20)


Adjusted operating income


81

111

88

Depreciation and amortization


81

75

73


Adjusted operating income before depreciation and amortization


162

186

161


1 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

The following table reconciles net earnings and net earnings per share, as per IFRS, with adjusted net earnings and adjusted net earnings per share:

(in millions of Canadian dollars, except amounts per share) (unaudited)


NET EARNINGS


NET EARNINGS PER SHARE 1


Q3 2020

Q2 2020

Q3 20192


Q3 2020

Q2 2020

Q3 20192


As per IFRS


49

54

43


$


0.51

$

0.57

$

0.45

Specific items:

Loss (gain) on acquisitions, disposals and others


(7)

1

(22)


$


(0.05)

—

$

(0.24)

Impairment charges


13

13

1


$


0.10

$

0.10

0.01

Restructuring costs


3

2

—


$


0.03

$

0.02

—

Unrealized loss (gain) on derivative financial instruments


(1)

1

1


—

$

0.01

$

0.01

Loss on repurchase of long-term debt


6

—

—


$


0.05

—

—

Unrealized loss on interest rate swaps and option fair value


—

—

7


—

—

$

0.07

Foreign exchange gain on long-term debt and financial instruments


(11)

(9)

—


$


(0.12)

$

(0.09)

—

Tax effect on specific items, other tax adjustments and attributable
to non-controlling interest1


(4)

(4)

(2)


$


(0.02)

—

—


(1)

4

(15)


$


(0.01)

$

0.04

$

(0.15)


Adjusted


48

58

28


$


0.50

$

0.61

$

0.30


1 Specific amounts per share are calculated on an after-tax basis and are net of the portion attributable to non-controlling interests. Per share amounts in line item ”Tax effect on specific items, other tax adjustments and attributable to non-controlling interests” only include the effect of tax adjustments.


2 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

The following table reconciles cash flow from operating activities with operating income and operating income before depreciation and amortization:

(in millions of Canadian dollars) (unaudited)


Q3 2020

Q2 2020

Q3 20191


Cash flow from operating activities


136

128

157

Changes in non-cash working capital components


(30)

34

(53)

Depreciation and amortization


(81)

(75)

(73)

Net income taxes paid


1

7

12

Net financing expense paid


49

7

42

Premium paid on long-term debt repurchase


4

—

—

Gain (loss) on acquisitions, disposals and others


7

(1)

26

Impairment charges and restructuring costs


(16)

(15)

(1)

Unrealized gain (loss) on derivative financial instruments


1

(1)

(1)

Dividend received, employee future benefits and others


2

10

(1)


Operating income


73

94

108

Depreciation and amortization


81

75

73


Operating income before depreciation and amortization


154

169

181


1 2019 third quarter consolidated results have been adjusted to reflect retrospective adjustments of purchase price allocation.

The following table reconciles cash flow from operating activities with cash flow from operating activities (excluding changes in non-cash working capital components) and adjusted cash flow from operating activities. It also reconciles adjusted cash flow from operating activities to adjusted free cash flow, which is also calculated on a per share basis:

(in millions of Canadian dollars, except amount per share or otherwise mentioned) (unaudited)


Q3 2020

Q2 2020

Q3 2019


Cash flow from operating activities


136

128

157

Changes in non-cash working capital components


(30)

34

(53)


Cash flow from operating activities (excluding changes in non-cash working capital components)


106

162

104

Specific items paid


9

—

4


Adjusted cash flow from operating activities


115

162

108

Capital expenditures & other assets1 and right-of-use assets payments, net of disposals


(60)

(51)

(58)

Dividends paid to the Corporation’s Shareholders and to non-controlling interests


(11)

(14)

(12)


Adjusted free cash flow


44

97

38


Adjusted free cash flow per share


$


0.46

$

1.02

$

0.40


Weighted average basic number of shares outstanding


95,019,694

94,459,257

93,860,367

1 Excluding increase in investments

The following table reconciles total debt and net debt with the ratio of net debt to adjusted operating income before depreciation and amortization (adjusted OIBD): 

(in millions of Canadian dollars)


September
 
30,
2020

June 30,

2020

September 30,
2019

Long-term debt


1,947

1,975

2,107

Current portion of long-term debt


253

255

87

Bank loans and advances


9

9

14


Total debt


2,209

2,239

2,208

Less: Cash and cash equivalents


227

162

138


Net debt


1,982

2,077

2,070

Adjusted OIBD (last twelve months)


661

660

565


Net debt / Adjusted OIBD ratio


3.0
x

3.1x

3.7x

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SOURCE Cascades Inc.