Market Newsdesk

November 12, 2020 5:04 pm

The Walt Disney Company Board Decides to Forgo Next Semi-Annual Cash Dividend

The Walt Disney Company Board Decides to Forgo Next Semi-Annual Cash Dividend

BURBANK, Calif.–(BUSINESS WIRE)–
The Walt Disney Company (NYSE: DIS) Board of Directors today announced that it will not declare a semi-annual cash dividend for the second half of fiscal 2020, in light of the ongoing impact of COVID-19 and the Company’s decision to prioritize investment in its direct-to-consumer initiatives.

Forward Looking Statements

Certain statements and information in this communication may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements identified by the words “will not” or similar words and other statements that are not historical in nature. These statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update these statements.

Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, integration initiatives and timing of synergy realization, new or expanded business lines or cessation of certain operations) or other business decisions, as well as from developments beyond the Company’s control, including:

changes in domestic and global economic conditions, competitive conditions and consumer preferences;
adverse weather conditions or natural disasters;
health concerns;
international, regulatory, political, or military developments;
technological developments; and
labor markets and activities;

each such risk includes the current and future impacts of, and is amplified by, COVID-19 and related mitigation efforts.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

the performance of the Company’s theatrical and home entertainment releases;
the advertising market for broadcast and cable television programming;
demand for our products and services;
construction;
expenses of providing medical and pension benefits;
income tax expense;
performance of some or all company businesses either directly or through their impact on those who distribute our products; and
achievement of anticipated benefits of the TFCF transaction.

Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended September 28, 2019 under Item 1A, “Risk Factors,” Item 7, “Management’s Discussion and Analysis,” Item 1, “Business,” and subsequent reports, including, among others, quarterly reports on Form 10-Q.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006101/en/

Media Contacts

Zenia Mucha

[email protected]

(818) 560-5300

David Jefferson

[email protected]

(818) 560-4832

Investor Contact

Lowell Singer

[email protected]

(818) 560-6601

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Entertainment Theme Parks Mobile Entertainment Other Entertainment General Entertainment TV and Radio Film & Motion Pictures Music Licensing (Entertainment)

MEDIA:

November 12, 2020 5:03 pm

Monarch Gold Reports Its First Quarter Results

PR Newswire

MONTREAL, Nov. 12, 2020 /PRNewswire/ – MONARCH GOLD CORPORATION (“Monarch” or the “Corporation“) (TSX: MQR) (OTCQX: MRQRF) (FRANKFURT: MR7) reported its results today for the first quarter ended September 30, 2020. Amounts are in Canadian dollars unless otherwise indicated.

Summary of financial results

(In dollars, except per share data )	THREE MONTHS ENDED SEPTEMBER 30
	2020	2019
Revenues	–	3,144,699
Gross margin	–	1,586,598
Net earnings (net loss)	(2,531,837)	1,178,934
Net earnings (net loss) per share, basic and diluted	(0.009)	0.005

(In dollars)	SEPTEMBER 30, 2020	JUNE 30, 2020
Cash and cash equivalents	15,809,741	11,274,470
Investments	14,825,617	14,939,261
Total assets	98,449,289	92,987,397

“The recently announced transaction with Yamana Gold (see press release dated November 2, 2020) is the highlight of this new fiscal year for Monarch and will change the face of Monarch forever for the benefit of our shareholders,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarch.

“The new company that will result from the transaction with Yamana Gold will be called Monarch Mining Corp (“Monarch Mining“). It will be a fully integrated mining company, from exploration through to production. Its assets will include the Beaufor mine, the Croinor Gold, McKenzie Break and Swanson gold properties and the Beacon mill, as well as $14 million in cash. It is important to note that all those assets will be wholly owned, and that 100% of our titles will be free and clear once the transaction is completed.”

“Monarch Mining’s mission will be to become a gold producer, while continuing to develop its projects with strong exploration potential. A 42,500-metre drilling program is currently under way at the Beaufor mine to increase the mine’s resources with a view to resuming production and exploration is ongoing at McKenzie Break to build the resource on this very promising high-grade gold project, with results expected in the coming weeks on both projects. Furthermore, given the bull market for gold, we intend to pursue of efforts to find a partner to help us put Croinor Gold into production. The material mined from Croinor Gold and Beaufor could be processed at our fully permitted and operational Beacon mill. Overall, our plan is straightforward, and we intend to execute it to the best of our abilities to make Monarch Mining a success for our shareholders as well,” concluded Mr. Lacoste.

The technical and scientific content of this press release has been reviewed and approved by Marc-André Lavergne, P.Eng., the Corporation’s qualified person under National Instrument 43–101.

Forward-Looking Statements
The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that may cause Monarch’s actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this press release.

www.monarquesgold.com

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SOURCE Monarch Gold Corporation

November 12, 2020 5:03 pm

Creative Realities Reports Third Quarter 2020 Results

PR Newswire

LOUISVILLE, Ky., Nov. 12, 2020 /PRNewswire/ — Creative Realities, Inc. (“Creative Realities,” “CRI,” or the “Company”) (NASDAQ: CREX, CREXW), a leading provider of digital marketing solutions, announced its financial results for the three- and nine-months ended September 30, 2020.

Rick Mills, Chief Executive Officer, commented, “CRI’s third quarter results highlight the tremendous adaptability and commitment that our personnel have shown in the face of adversity and challenges in our core business throughout the COVID-19 pandemic, specifically both (1) the flexibility to pivot our business to Safe Space Solutions’ products and services that remain relevant in a marketplace with continued business closures, and (2) the ability to continue to drive reductions in expenses despite the incremental costs associated with launching new products and services.”

Mr. Mills continued, “Revenue for the third quarter 2020 increased approximately $1.4 million as compared to the first and second quarter of 2020 as we began to see adoption of our Thermal Mirror product in the marketplace. We continue to believe that CRI’s solution is a market leader and has opportunity for continued adoption in the marketplace throughout the remainder of 2020 and into 2021 as employers seek to adopt technology that will further enhance the safety of the workplace for their employees. We continued to focus on reducing controllable expenses, reducing total operating expenses by approximately $0.7 million, or 23%, versus the same quarter in 2019, exclusive of non-cash charges in each period. Net loss in the quarter reduced to $0.6 million, which resulted in the generation of $0.3 million of EBITDA, an improvement of $2.0 million versus the second quarter of 2020. As we look forward and into 2021, and as businesses continue to reopen throughout the United States and Canada, we fully expect our Safe Space Solutions, including the Thermal Mirror product, to be a go-to consideration for return to work products and for our core digital signage revenues to return to growth.”

Third Quarter Financial Update

Revenue, gross profit, and gross margin:

Revenues were $5.1 million for the three months ended September 30, 2020, a decrease of $1.6 million, or 24%, as compared to the same period in 2019.
Hardware revenues were $2.8 million for the three months ended September 30, 2020, an increase of $0.8 million, or 40%, as compared to the same quarter in the prior year, driven by the introduction of the Thermal Mirror product which generated approximately $1.8 million in hardware sales during the quarter. Gross margin on hardware revenue was 34.0% in the third quarter of 2020 as compared to 27.0% during the same period in 2019 due to the shift in mix of hardware revenues from displays to the Thermal Mirror product which generates higher gross profit.
Services and other revenues were $2.3 million for the three months ended September 30, 2020, a decrease of $2.4 million, or 52%, as compared to the same period in 2019, driven primarily by a reduction in installation services of $1.5 million year-over-year combined with a general reduction in other software and managed services revenue due to customer closures in response to the COVID-19 pandemic. Gross margin on services and other revenue was 65.4% in the quarter ended September 30, 2020 compared to 58.9% in the same period in 2019 driven by less labor-intensive services offerings related to the Thermal Mirror product.
Managed services revenue, which includes both software-as-a-service (“SaaS”) and help desk technical subscription services for our traditional digital signage and new Thermal Mirror product offerings, were $1.3 million for the three months ended September 30, 2020, a reduction of $0.5 million, or 28%, driven by customer closures in response to the COVID-19 pandemic.
Gross profit was $2.4 million for the three months ended September 30, 2020, a decrease of $0.9 million, or 26%, compared to the same period in 2019. Consolidated gross margin decreased to 47.9% for the three months ended September 30, 2020 from 49.1% in the same quarter in the prior year, driven primarily by a higher ratio of hardware revenue to total revenue in the period on continued sales of the Thermal Mirror product.

Operating expenses:

For the three months ended September 30, 2020 as compared to the same period in the prior year:

Sales and marketing expenses decreased by $0.1 million, or 21% while research and development expenses decreased by $0.1 million, or 25%, each driven by a reduction in employee-related expenses as a result of a combination of headcount reductions, salary reductions implemented for retained personnel, and a reduction in travel-related expenses in the current year including the elimination of participation in industry trade shows.
General and administrative expenses decreased by $0.3 million, or 12%; inclusive of incremental non-cash charges related to the amortization of stock compensation of $0.2 million during the period. Exclusive of the incremental year-over-year increase in non-cash charges, general and administrative expenses decreased by $0.5 million, or 22%, for the three months ended September 30, 2020 as compared to the same period in 2019.

Operating loss, net loss, and EBITDA:

Operating loss was $0.4 million for the three months ended September 30, 2020 as compared to operating income of $0.1 million during the same period in 2019, despite a reduction in revenue period-over-period of $1.6 million.
Net loss was $0.6 million for the three months ended September 30, 2020 as compared to net income of $0.2 million for the same period in 2019.
EBITDA was $0.3 million for the three months ended September 30, 2020 as compared to $0.8 million the same period in 2019. Adjusted EBITDA was $0.2 million for the three months ended September 30, 2020, compared to $0.4 million for the same period in 2019. See below for a description of these non-GAAP financial measures and reconciliation to our net loss.

Mr. Mills concluded, “We believe that we have weathered the worst of the COVID-19 pandemic and that the incremental changes we have made to both our business operations and cost structure will continue to benefit us well into the future as CRI returns to revenue growth. Despite the challenges that 2020 has brought, we believe that CRI has gained momentum against our peers within the industry by remaining an open, flexible, and transparent business partner to our vendors and customers and our flexibility and responsiveness during this crisis will contribute to our continued success as businesses reopen and markets stabilize.”

Conference Call Details
The Company will host a conference call to review the third quarter results and provide additional commentary about the Company’s recent performance, on Friday, November 13, 2020 at 9:00 am Eastern Time.

Prior to the call, participants should register at http://bit.ly/criearnings2020Q3. Once registered, participants can use the weblink provided in the registration email to listen to the live webcast. An archived edition of the second quarter earnings conference call will also be posted on our website at www.cri.com later that same day and will remain available to interested parties via the same link for one year.

About Creative Realities, Inc.
Creative Realities helps clients use the latest omnichannel technologies to inspire better customer experiences. Founded over 15 years ago, CRI designs, develops and deploys consumer experiences for high-end enterprise level networks, and is actively providing recurring SaaS and support services for more than fifteen diverse vertical markets, including Automotive, Advertising Networks, Apparel & Accessories, Convenience Stores, Foodservice/QSR, Gaming, Movie Theater, and Stadium Venues.

Use of Non-GAAP Measures
Creative Realities, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding “EBITDA” and “Adjusted EBITDA.” CRI defines “EBITDA” as earnings before interest, income taxes, depreciation and amortization of intangibles. CRI defines “Adjusted EBITDA” as EBITDA excluding stock-based compensation, fair value adjustments and both cash and non-cash non-recurring gains and charges. EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, EBITDA and Adjusted EBITDA are used internally in planning and evaluating the Company’s operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the Company’s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income/(loss) or to net cash used in operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Company’s performance. A reconciliation of GAAP net income/(loss) to EBITDA and Adjusted EBITDA is included in the accompanying financial schedules.

For further information, please refer to Creative Realities, Inc.’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 12, 2020, and its other filings available online at www.sec.gov.

Cautionary Note on Forward-Looking Statements
This press release contains certain statements that are deemed “forward-looking statements” under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and includes, among other things, discussions of our business strategies, future operations and capital resources. Words such as “may,” “likely,” “anticipate,” “expect,” “intend,” “plans,” “seeks,” will,” should,” “future,” “propose,” “believe” and variations of these words or similar expressions (or the negative versions of such words or expressions) indicate forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Some of these risks are discussed in the “Risk Factors” section contained in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2019, and Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and the Company’s subsequent filings with the U.S. Securities and Exchange Commission. Important factors, among others, that may affect actual results or outcomes include: the inability to recognize the anticipated benefits of our acquisition of Allure Global Solutions, Inc.; our ability to meet Nasdaq’s continued listing standards; our ability to execute on our business plan; our ability to retain key personnel; potential litigation; and general economic and market conditions impacting demand for our products and services, including those as a result of the COVID-19 pandemic.

Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(in thousands, unaudited)

Creative Realities, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding “EBITDA” and “Adjusted EBITDA.” CRI defines “EBITDA” as earnings before interest, income taxes, depreciation and amortization of intangibles. CRI defines “Adjusted EBITDA” as EBITDA excluding stock-based compensation, fair value adjustments and both cash and non-cash non-recurring gains and charges.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered as a substitute for net income (loss), operating income (loss) or any other performance measure derived in accordance with United States generally accepted accounting principles (“GAAP”) or as an alternative to net cash provided by operating activities as a measure of CRI’s profitability or liquidity. CRI’s management believes EBITDA and Adjusted EBITDA are useful financial metrics because they allow external users of CRI’s financial statements, such as industry analysts, investors, lenders and rating agencies, to more effectively evaluate CRI’s operating performance, compare the results of its operations from period to period and against CRI’s peers without regard to CRI’s financing methods, hedging positions or capital structure and because it highlights trends in CRI’s business that may not otherwise be apparent when relying solely on GAAP measures. CRI also presents EBITDA and Adjusted EBITDA because it believes EBITDA and Adjusted EBITDA are important supplemental measures of its performance that are frequently used by others in evaluating companies in its industry. Because EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income (loss) and may vary among companies, the EBITDA and Adjusted EBITDA CRI presents may not be comparable to similarly titled measures of other companies.

The following table presents a reconciliation of EBITDA and Adjusted EBITDA from net loss, CRI’s most directly comparable financial measure calculated and presented in accordance with GAAP.

	September 30,		June 30,		March 31,		December 31,		September 30,
Quarters ended	2020		2020		2020		2019		2019
GAAP net loss	$	(585)	$	(2,459)	$	(13,183)	$	563	$	242
Interest expense:
Amortization of debt discount		85		84		85		105		105
Other interest, net		179		176		142		109		94
Depreciation/amortization:
Amortization of intangible assets		161		158		159		204		147
Amortization of finance lease assets		5		5		7		7		8
Amortization of share-based awards		248		100		50		21		31
Depreciation of property, equipment & software		212		216		200		167		123
Income tax expense/(benefit)		(1)		4		(155)		128		51
EBITDA	$	304	$	(1,716)	$	(12,695)	$	1,304	$	801
Adjustments
Change in fair value of Special Loan		–		551		151		–		–
Gain on settlement of obligations		(114)		(1)		(40)		(1,632)		(406)
Gain on earnout liability		–		–		–		(250)		–
Loss on disposal of assets		13		–		–		–		–
Loss on goodwill impairment		–		–		10,646		–		–
Stock-based compensation – Director grants		25		19		31		31		31
Stock-based compensation – PRSU vesting		–		–		–		–		–
Adjusted EBITDA	$	228	$	(1,147)	$	(1,907)	$	(547)	$	426

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SOURCE Creative Realities, Inc.

November 12, 2020 5:03 pm

American Homes 4 Rent Announces Distributions

PR Newswire

AGOURA HILLS, Calif., Nov. 12, 2020 /PRNewswire/ — American Homes 4 Rent (NYSE: AMH) (the “Company”), a leading provider of high-quality single-family homes for rent, today announced that the Board of Trustees declared a dividend of $0.05 per share on the Company’s common shares for the fourth quarter of 2020. The distribution will be payable in cash on January 11, 2021 to shareholders of record on January 4, 2021.

The Board of Trustees also declared a per share quarterly distribution on the Company’s cumulative redeemable perpetual preferred shares of $0.40625 per share on the 6.5% Series D shares, $0.39688 per share on the 6.35% Series E shares, $0.36719 per share on the 5.875% Series F shares, $0.36719 per share on the 5.875% Series G shares and $0.39063 per share on the 6.25% Series H shares payable in cash on December 31, 2020 to shareholders of record on December 15, 2020.

About American Homes 4 Rent

American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and “American Homes 4 Rent” is fast becoming a nationally recognized brand for rental homes, known for high-quality, good value and tenant satisfaction. We are an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, developing, renovating, leasing, and operating attractive, single-family homes as rental properties. As of September 30, 2020, we owned 53,229 single-family properties in selected submarkets in 22 states.

Additional information about American Homes 4 Rent is available on our website at www.americanhomes4rent.com.

Forward-Looking Statements

This press release contains “forward-looking statements” that relate to beliefs, expectations or intentions and similar statements concerning matters that are not of historical fact and are generally accompanied by words such as “believe,” “expect,” “will,” “intend,” “anticipate” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements include the payment and anticipated timing of the payment of distributions of the Company’s common and preferred shares. The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company’s management considers these expectations to be reasonable, they are inherently subject to risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control and could adversely affect our cash flows and ability to pay distributions. Additional information about these and other important factors that may cause our actual results to differ materially from anticipated results expressed or implied by these forward-looking statements is available in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement to conform to actual results or changes in expectations, except as required by applicable law.

Contact:
American Homes 4 Rent
Investor Relations
Phone: (855) 794-2447
Email: [email protected]

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SOURCE American Homes 4 Rent

November 12, 2020 5:03 pm

Randon Reports Third Quarter 2020 Results

PR Newswire

CAXIAS DO SUL, Brazil, Nov. 12, 2020 /PRNewswire/ — Randon S.A – Implementos e Participações (B3 – RAPT3 and RAPT4), which operates within the segments of vehicles and trailers, auto parts and services, reports its results for the third quarter of 2020 (3Q2020) and nine months of 2020 (9M2020), ended in September 30, 2020. The financial and operating information of the Company, except when otherwise stated, are consolidated in accordance with the international standards of IFRS – International Financial Reporting Standards and the monetary values are denominated in Reais.

HIGHLIGHTS

The main highlights of the 3Q2020 are as follows:

3Q20 Total Gross Revenue, before consolidation, is R$ 2.1 billion, an increase of 7.3% as compared to 3Q19 (R$ 2.0 billion);
3Q20 Consolidated Net Revenue is R$ 1.5 billion, 10.5% higher than the revenue achieved in 3Q19 (R$ 1.4 billion);
3Q20 Consolidated EBITDA is R$ 270.0 million, with EBITDA margin of 17.8% and 3Q20 Adjusted EBITDA of R$ 260.6 million, with adjusted EBITDA margin of 17.2%.
3Q20 Net Income is R$ 116.0 million, and net margin of 7.7%, as compared to net income of R$ 78.5 million and net margin of 5.7% in 3Q19.

CONFERENCE CALL RESULTS

November 13, 2020, Friday,

11:00AM Brasília, 09:00AM New York and 3:00PM London

Dial–in from Brazil: +55 (11) 3181-8565 / 4210-1803

Dial–in from USA: +1 844 204-8942 / +1 412 717-9627

Ticker: RANDON

The webcasting presentation of the company will be available at:
ri.randon.com.br

IR Contact

Esteban Mario Angeletti

[email protected]

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SOURCE Randon S.A. Implementos e Participações

November 12, 2020 5:03 pm

Hollysys Automation Technologies Reports Unaudited Financial Results for the First Quarter Ended September 30, 2020

PR Newswire

First Quarter of Fiscal Year 2021

Financial Highlights

Non-GAAP net income attributable to Hollysys was $20.8 million, a decrease of 30.2% compared to the comparable prior year period.
Total revenues were $129.5 million, an increase of 5.1% compared to the comparable prior year period.
Non-GAAP gross margin was at 33.7%, compared to 37.7% for the comparable prior year period.
Non-GAAP diluted EPS was $0.34, a decrease of 30.6% compared to the comparable prior year period.
Net cash provided by operating activities was $21.6 million for the current quarter.
DSO of 185 days, compared to 204 days for the comparable prior year period.
Inventory turnover days of 58 days, compared to 56 days for the comparable prior year period.

BEIJING
, Nov. 12, 2020 /PRNewswire/ — Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) (“Hollysys” or the “Company”), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for the first quarter of fiscal year 2021 ended September 30, 2020 (see attached tables). The management of Hollysys, stated:

Industrial Automation (“IA”) business finished the quarter with revenue and contract at $81.9 million and $107.8 million, representing 26.8% and 28.4% YOY growth, respectively.

In power sector, we continued our effort in strengthening our market position in high-end coal fire market (600MW and plus power unit). Meanwhile, with respect to our current client base in this sector, we are actively responding to various regular and value-added service demand covering old system replacement, system upgrade, part component sales and annual maintenance, etc.
In chemical and petro-chemical sector, contract growth remains healthy. We continued our effort in key projects winning, key client cooperation, key marketing events and development and demonstration of solution capability to penetrate the market and build our reputation.
Sector highlights of the past quarter include:

– Winning the bidding of DCS+ESD (emergency shutdown device) + AMS (asset management system) +F&G (fire and gas) integrated solution for two offshore oil platforms. It is the 8^th oil platform solution that the Company has won since the beginning of the calendar year, marking a remarkable progress for our exploration in the oil and gas industry.

– Signing a CCS (Coordination Control System) contract with a client on its 400,000 tons/year tert-butyl alcohol and 200,000 tons/year MMA (methyl methacrylate) projects, marking a breakthrough as it is the Company’s first contract in MMA.

– Signing a DCS + SIS + GDS + MES + OTS + AMS + information security integrated solution contract with a client on its 100,000 tons polycarbonate project. The DCS control points for the project amount to approximately 20,000, making it the largest project ever for the Company in similar craft.

In food & beverage and pharmaceutical sector, we continue to see healthy growth in contract. With our core control solution capability and inclusion of engineering design capability, we are building our EPC (engineering design + procurement + construction) capability so as to provide more comprehensive solution to our clients. Periodic progress was made in such model as we signed our first workshop-level EPC contract with a client for its 7-ACA (7-aminocephalosporanic acid) refining project, which is expected to lay foundation for our further pursuit of larger scale EPC project in the future.
In smart factory business, we continue to actively engage the potential clients through various marketing events, to stay close for in-depth grasp of market demand, and to develop and improve our solution for real value creation in economic benefit and operation safety. Highlights of the past quarter include:

– Signing a contract with a new client from the thermal-power sector to provide a total solution with control-level and management-level data integration that covers comprehensive function modules including control optimization, smart diagnosis, equipment management, decision making and operation management, etc. We expect such project to become a key demonstration of solution for the thermal-power sector.

– Signing a contract with a client from the coal-fire sector for its new 2*660MW power plant. Contract covers a similar total solution at control and management level, and marks a significant breakthrough in our smart factory solution for high-end coal-fire market.

– Signing a contract with an existing client from the petro-chemical sector to provide management-level solution based on our industrial internet platform.

Aftersales business of IA is keeping the healthy pace. We continued to engage our valuable client base and respond with both regular and value-adding initiatives covering old system upgrade and replacement, part component sales, annual maintenance, control optimization, data integration and energy management, etc.
Under our big automation initiatives, we continued to improve our capability for wider range of solution covering entire life cycle. By end of September, we have put into operation our in-house instrument production line, with which we will be capable of manufacturing certain types of instruments contained in our total control solution. Such is expected to be a valuable addition to our project delivery, market opportunities and operation.

Rail business finished the quarter with revenue and contract at $28.7 million and $24.2 million, recording 35.6% YOY decrease and 15.0% YOY growth, respectively.

In high-speed rail (“HSR”) sector, we continued our delivery of on-ground solution along with the rail-road construction progress. Periodic progress was achieved for the smart solution initiatives for the sector, and we have completed our top-level design of the smart maintenance solution. Meanwhile, bidding from the client was seeing its gradual recovery in the post-pandemic period, both for on-ground and on-board equipment. Highlights of the quarter include:

– Winning the bidding of 140 sets (out of the total package of 274 sets) of ATP for C2 (250km) China Standard High-speed train in August.

In subway sector, our cloud-based SCADA project for Shenzhen Subway Line 6 was fully delivered, which was the second cloud-based SCADA project of the Company and represents our constant effort in innovation for continued value creation for our clients. In delivery, our enhancement in supply chain management and engineering standardization has contributed to improved quality and efficiency of project execution.

In aftersales business, we continued to strengthen local service network, to expand service solution and to develop technology-and-service-centered service for better differentiation. In HSR sector, we continued to respond to regular services including advanced maintenance, system and software upgrade and part component sales, as well as total replacement. We continued to act as the service provider to Hong Kong–Shenzhen high-speed rail, with our service quality being highly recognized. In subway sector, we continued to explore potentials from the current client base and signed contracts covering system upgrade, maintenance and product sales.

Under our big transportation initiatives, the Company has established the smart highway solution and was actively involved in marketing events for new contracts breakthrough in new business. Highlight for the quarter includes:

– Signing a breakthrough contract of smart traffic meteorology solution for a section of the highway connecting Sichuan and Yunnan province. The data-driven solution targets highway administration as the intended clients and through collection and processing of meteorological, geographical and traffic data, advices the highway administration on more effective decision making in highway management, in particular under extreme weather condition.

Mechanical and Electrical Solutions (“M&E”) business finished the quarter with revenue and contract at $18.8 million and $12.3 million, recording 34.4% increase and 63.4% YOY decrease respectively.

COVID-19 remains a challenge to M&E and overseas business. We will keep monitoring the impact on this sector and risk control remains to be the key focus.

Fiscal Quarter Ended September 30, 2020 Unaudited Financial Results Summary

(In USD thousands, except for number of shares and per share data)
		Three months ended
		Sep 30, 2020	Sep 30, 2019	% Change

Revenues	$	129,468	123,230	5.1%
Integrated solutions contracts revenue	$	105,706	104,466	1.2%
Products sales	$	6,569	6,123	7.3%
Service rendered	$	17,193	12,641	36.0%
Cost of revenues	$	85,891	76,771	11.9%
Gross profit	$	43,577	46,459	(6.2)%
Total operating expenses	$	22,558	23,291	(3.1)%
Selling	$	8,176	7,277	12.4%
General and administrative	$	10,179	10,592	(3.9)%
Research and development	$	9,981	8,942	11.6%
VAT refunds and government subsidies	$	(5,778)	(3,520)	64.1%
Income from operations	$	21,019	23,168	(9.3)%
Other income, net	$	1,229	2,025	(39.3)%
Foreign exchange (loss) gain	$	(2,323)	604	(484.6)%
Gains on disposal of an investment in an equity investee	$	–	5,763	(100.0)%
Share of net income of equity investees	$	1,891	1,541	22.7%
Interest income	$	3,798	3,029	25.4%
Interest expenses	$	(137)	(113)	21.2%
Income tax expenses	$	4,760	6,209	(23.3)%
Net (losses) income attributable to non-controlling interests	$	(80)	26	(407.7)%
Non-GAAP net income attributable to Hollysys Automation Technologies Ltd.	$	20,797	29,782	(30.2)%
Non-GAAP basic EPS	$	0.34	0.49	(30.6)%
Non-GAAP diluted EPS	$	0.34	0.49	(30.6)%
	$
Share-based compensation expenses		175	26	573.1%
Amortization of acquired intangible assets	$	76	75	1.3%
GAAP Net income attributable to Hollysys Automation Technologies Ltd.	$	20,546	29,681	(30.8)%
GAAP basic EPS	$	0.34	0.49	(30.6)%
GAAP diluted EPS	$	0.34	0.49	(30.6)%

Basic weighted average common shares outstanding		60,552,099	60,470,611	0.1%

Diluted weighted average common shares outstanding		60,552,099	60,483,884	0.1%

Operational Results Analysis for the First Quarter Ended September 30, 2020

Comparing to the first quarter of the prior fiscal year, the total revenues for the three months ended September 30, 2020 increased from $123.2 million to $129.5 million, representing an increase of 5.1%. Broken down by the revenue types, integrated contracts revenue increased by 1.2% to $105.7 million, products sales revenue increased by 7.3% to $6.6 million, and services revenue increased by 36.0% to $17.2 million.

The Company’s total revenues can also be presented in segments as shown in the following chart:

(In USD thousands)
	Three months ended Sep 30,
	2020		2019
	$	% to Total Revenue	$	% to Total Revenue
Industrial Automation	81,931	63.2%	64,637	52.4%
Rail Transportation Automation	28,696	22.2%	44,576	36.2%
Mechanical and Electrical Solution	18,841	14.6%	14,017	11.4%
Total	129,468	100.0%	123,230	100.0%

Overall
gross margin
excluding non-cash amortization of acquired intangibles (non-GAAP
gross margin) was 33.7% for the three months ended September 30, 2020, as compared to 37.7% for the same period of the prior year. The non-GAAP gross margin for integrated contracts, product sales, and services rendered were 25.3%, 73.7% and 70.0% for the three months ended September 30, 2020, as compared to 32.6%, 79.9% and 59.5% for the same period of the prior year, respectively. The gross margin fluctuation was mainly due to the different revenue mix with different margins. The GAAP overall gross margin which includes non-cash amortization of acquired intangibles was 33.6% for the three months ended September 30, 2020, as compared to 37.6% for the same period of the prior year. The GAAP gross margin for integrated contracts, product sales, and service rendered was 25.2%, 73.7% and 70.0% for the three months ended September 30, 2020, as compared to 32.5%, 79.9% and 59.5% for the same period of the prior year, respectively.

S
elling expenses were $8.2 million for the three months ended September 30, 2020, representing an increase of $0.9 million or 12.4% compared to $7.3 million for the same quarter of the prior year. Presented as a percentage of total revenues, selling expenses were 6.3% and 5.9% for the three months ended September 30, 2020, and 2019, respectively.

G
eneral and administrative

expenses
, excluding non-cash share-based compensation expenses (non-GAAP G&A expenses), were $10.2 million for the quarter ended September 30, 2020, representing a decrease of $0.4 million or 3.9% compared to $10.6 million for the same quarter of the prior year. Presented as a percentage of total revenues, non-GAAP G&A expenses were 7.9% and 8.6% for quarters ended September 30, 2020 and 2019, respectively. The GAAP G&A expenses which include the non-cash share-based compensation expenses were $10.4 million and $10.6 million for the three months ended September 30, 2020 and 2019, respectively.

Research and development expenses were $10.0 million for the three months ended September 30, 2020, representing an increase of $1.0 million or 11.6% compared to $8.9 million for the same quarter of the prior year. Presented as a percentage of total revenues, R&D expenses were 7.7% and 7.3% for the quarter ended September 30, 2020 and 2019, respectively.

The VAT refunds and government subsid
ies were $5.8 million for three months ended September 30, 2020, as compared to $3.5 million for the same period in the prior year, representing a $2.3 million or 64.1% increase, which was primarily due to increase of the VAT refunds.

The income tax expenses and the effective tax rate were $4.8 million and 18.9% for the three months ended September 30, 2020, as compared to $6.2 million and 17.3% for comparable prior year period. The effective tax rate fluctuation was mainly due to the different pre-tax income mix with different tax rates, as the Company’s subsidiaries are subject to different tax rates in various jurisdictions.

The non-GAAP net income attributable to Hollysys, which excludes the non-cash share-based compensation expenses calculated based on the grant-date fair value of shares or options granted, amortization of acquired intangible assets, and fair value adjustments of a bifurcated derivative, was $20.8 million or $0.34 per diluted share based on 60.6 million diluted weighted average ordinary shares outstanding for the three months ended September 30, 2020. This represents a 30.2% decrease over $29.8 million or $0.49 per share based on 60.5 million diluted weighted average ordinary shares outstanding reported in the comparable prior year period. On a GAAP basis, net income attributable to Hollysys was $20.5 million or $0.34 per diluted share representing a decrease of 30.8% over $29.7 million or $0.49 per diluted share reported in the comparable prior year period.

Contracts and

Backlog Highlights

Hollysys achieved $144.3 million of new contracts for the three months ended September 30, 2020. The backlog as of September 30, 2020 was $596.1 million. The detailed breakdown of new contracts and backlog by segments is shown below:

(In USD thousands)	New contracts achieved			Backlog
	for the three months ended Sep 30, 2020			as of Sep 30, 2020
	$		% to Total Contract	$	% to Total Backlog
Industrial Automation		107,806	74.7%	252,299	42.3%
Rail Transportation		24,167	16.8%	254,833	42.7%
Mechanical and Electrical Solutions		12,304	8.5%	89,005	14.9%
Total		144,277	100.0%	596,137	100.0%

Ca

sh Flow Highlights

For the three months ended September 30, 2020, the total net cash inflow was $34.9 million. The net cash provided by operating activities was $21.6 million. The net cash provided by investing activities was $2.6 million and mainly consisted of $114.6 million of matured time deposits, which were partially offset by $108.8 million of time deposits placed with banks. The net cash used in financing activities was $0.2 million.

Balance Sheet Highlights

The total amount of cash and cash equivalents were $321.6 million, $288.8 million, and $340.0 million as of September 30, 2020, June 30, 2020 and September 30, 2019, respectively.

For the three months ended September 30, 2020, DSO was 185 days, as compared to 204 days for the comparable prior year period and 167 days for the last quarter; and inventory turnover was 58 days, as compared to 56 days for the comparable prior year period and 66 days for the last quarter.

Conference Call

The Company will host a conference call at 8:00 pm November 12, 2020 U.S. Eastern Time / 9:00 amNovember 13, 2020 Beijing Time, to discuss the financial results for fiscal year 2021 first quarter ended September 30, 2020 and business outlook.

Joining the Conference Call:

Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID.
In the 10 minutes prior to the call start time, you will need to use the conference access information provided in the email received at the point of registering.

Note: Due to regional restrictions some participants may receive operator assistance when joining this conference call and will not be automatically connected.

Helpful keypad commands:
*0 – Operator assistance
*6 – Self mute/unmute

Direct Event online registration: http://apac.directeventreg.com/registration/event/3446698. Please use Conference ID 3446698 for entry if the link fails to lead directly to the registration page.

SAFE HARBOUR:

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements,” including statements regarding: the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Such forward-looking statements, based upon the current beliefs and expectations of Hollysys’ management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:

Hollysys Automation Technologies Ltd.
www.hollysys.com
+8610-58981386
[email protected]

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In USD thousands except for number of shares and per share data)
		Three months ended
		Sep 30,
		2020		2019
		(Unaudited)		(Unaudited)
Net revenues
Integrated solutions contracts revenue	$	105,706	$	104,466
Products sales		6,569		6,123
Revenue from services		17,193		12,641
Total net revenues		129,468		123,230

Costs of integrated solutions contracts		79,081		70,500
Cost of products sold		1,729		1,231
Costs of services rendered		5,157		5,115
Gross profit		43,501		46,384

Operating expenses
Selling		8,176		7,277
General and administrative		10,354		10,618
Research and development		9,981		8,942
VAT refunds and government subsidies		(5,778)		(3,520)
Total operating expenses		22,733		23,317

Income from operations		20,768		23,067

Other income, net		1,229		2,025
Foreign exchange (loss) gain		(2,323)		604
Gains on disposal of investments in an equity investee		–		5,763
Share of net income of equity investees		1,891		1,541
Interest income		3,798		3,029
Interest expenses		(137)		(113)
Income before income taxes		25,226		35,916

Income taxes expenses		4,760		6,209
Net income		20,466		29,707

Less: Net (losses) income attributable to non-controlling interests		(80)		26
Net income attributable to Hollysys Automation Technologies Ltd.	$	20,546	$	29,681

Other comprehensive income, net of tax of nil
Translation adjustments		38,950		(34,174)
Comprehensive income (loss)		59,416		(4,467)

Less: Comprehensive income (loss) attributable to non-controlling interests		80		(25)
Comprehensive income (loss) attributable to Hollysys Automation Technologies Ltd.	$	59,336	$	(4,442)

Net income per share:
Basic		0.34		0.49
Diluted		0.34		0.49
Shares used in income per share computation:
Basic		60,552,099		60,470,611
Diluted		60,552,099		60,483,884

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.
CONSOLIDATED BALANCE SHEETS
(In USD thousands except for number of shares and per share data)

				Sep 30,		Jun 30,
				2020		2020
				(Unaudited)		(audited)
ASSETS
	Current assets
		Cash and cash equivalents	$	321,641	$	288,782
		Time deposits with maturities over three months		330,432		324,949
		Restricted cash		11,827		8,663
		Accounts receivable, net of allowance for doubtful accounts of $54,069 and $41,618 as of September 30, 2020 and June 30, 2020, respectively		268,270		242,449
		Costs and estimated earnings in excess of billings, net of allowance for doubtful accounts of $8,185 and $6,150 as of September 30, 2020 and June 30, 2020, respectively		189,834		186,879
		Accounts receivable retention		5,227		6,088
		Other receivables, net of allowance for doubtful accounts of $6,382 and $6,224 as of September 30, 2020 and June 30, 2020, respectively		28,408		28,257
		Advances to suppliers		18,614		17,255
		Amounts due from related parties		22,222		21,444
		Inventories		56,805		48,210
		Prepaid expenses		654		648
		Income tax recoverable		87		870
	Total current assets			1,254,021		1,174,494

	Non-current assets
		Restricted cash		20,558		21,652
		Costs and estimated earnings in excess of billings		1,771		2,309
		Accounts receivable retention		5,559		4,717
		Prepaid expenses		8		6
		Property, plant and equipment, net		84,261		78,050
		Prepaid land leases		16,168		15,742
		Intangible assets, net		1,665		1,713
		Investments in equity investees		45,814		41,133
		Investments securities		4,816		4,640
		Goodwill		1,516		1,460
		Deferred tax assets		10,738		8,909
		Operating lease right-of-use assets		6,496		6,010
	Total non-current assets			199,370		186,341
	Total assets			1,453,391		1,360,835

LIABILITIES AND STOCKHOLDERS’ EQUITY
	Current liabilities
		Current portion of long-term loans		334		320
		Accounts payable		129,336		117,460
		Construction cost payable		1,762		2,350.00
		Deferred revenue		161,692		139,242
		Accrued payroll and related expenses		21,766		17,245
		Income tax payable		7,021		3,142
		Warranty liabilities		6,074		6,604
		Other tax payables		4,129		3,279
		Accrued liabilities		36,738		31,595
		Amounts due to related parties		3,394		3,576
		Operating lease liabilities		2,211		2,489
	Total current liabilities			374,457		327,302

	Non-current liabilities
		Accrued liabilities		3,000		5,635
		Long-term loans		15,885		15,780
		Accounts payable		3,221		2,530
		Deferred tax liabilities		14,307		13,940
		Warranty liabilities		1,847		3,460
		Operating lease liabilities		3,901		3,302
	Total non-current liabilities			42,161		44,647
	Total liabilities			416,618		371,949

	Commitments and contingencies			–		–

	Stockholders’ equity:
		Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares issued and outstanding as of September 30, 2020 and June 30, 2020		61		61
		Additional paid-in capital		224,218		224,043
		Statutory reserves		49,423		49,423
		Retained earnings^*		783,315		774,473
		Accumulated other comprehensive income		(24,728)		(63,517)
	Total Hollysys Automation Technologies Ltd. stockholder’s equity			1,032,289		984,483
		Non-controlling interests		4,484		4,403
	Total equity			1,036,773		988,886
	Total liabilities and equity		$	1,453,391	$	1,360,835
	* The adoption of ASC 326 started in July 1st had a one-off effect on the beginning of balance sheet accounts.

HOLLYSYS AUTOMATION TECHNOLOGIES LTD CONSOLIDATED STATEMENTS OF CASH FLOWS
(In USD thousands).
			Three months ended
			Sep 30, 2020
			(Unaudited)

Cash flows from operating activities:
	Net income	$	20,466
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation of property, plant and equipment		2,548
	Amortization of prepaid land leases		101
	Amortization of intangible assets		76
	Allowance for doubtful accounts		952
	Gains on disposal of long-lived assets		(11)
	Share of net income of equity investees		(1,891)
	Share-based compensation expenses		175
	Deferred income tax benefit		(1,363)
Changes in operating assets and liabilities:
	Accounts receivable and retention		(25,949)
	Costs and estimated earnings in excess of billings		4,397
	Inventories		(6,640)
	Advances to suppliers		(702)
	Other receivables		621
	Due from related parties		(1,148)
	Accounts payable		7,901
	Deferred revenue		16,963
	Accruals and other payables		154
	Due to related parties		(182)
	Income tax payable		4,499
	Other tax payables		713
	Operating lease right-of-use assets		(305)
	Operating lease liabilities		222
	Net cash provided by operating activities		21,597

Cash flows from investing activities:
	Time deposits placed with banks		(108,757)
	Purchases of property, plant and equipment		(3,354)
	Proceeds from disposal of property, plant and equipment		65
	Maturity of time deposits		114,597
	Net cash provided by investing activities		2,551

Cash flows from financing activities:
	Proceeds from long-term bank loans		37
	Repayments of long-term bank loans		(194)
	Net cash used in financing activities		(157)

	Effect of foreign exchange rate changes		10,938
	Net increase in cash, cash equivalents and restricted cash	$	34,929

	Cash, cash equivalents and restricted cash, beginning of period	$	319,097
	Cash, cash equivalents and restricted cash, end of period		354,026

Non-GAAP Measures

In evaluating our results, the non-GAAP measures of “Non-GAAP cost of integrated contracts”, “Non-GAAP general and administrative expenses”, “Non-GAAP other income (expenses), net”, “Non-GAAP net income attributable to Hollysys Automation Technologies Ltd. stockholders”, “Non-GAAP basic earnings per share”, and “Non-GAAP diluted earnings per share” serve as additional indicators of our operating performance and not as a replacement for other measures in accordance with U.S. GAAP. We believe these non-GAAP measures are useful to investors, as they exclude the non-cash share-based compensation expenses, which is calculated based on the number of shares or options granted and the fair value as of the grant date, amortization of acquired intangible assets, and fair value adjustments of a bifurcated derivative. They will not result in any cash inflows or outflows. We believe that using non-GAAP measures help our shareholders to have a better understanding of our operating results and growth prospects. In addition, given the business nature of the Company, it has been a common practice for investors to use such non-GAAP measures to evaluate the Company.

The following table provides a reconciliation of the non-GAAP measures with the most directly comparable U.S. GAAP measures for the periods indicated:

*(In USD thousands, except for number of shares and per share data)*
			Three months ended
			Sep 30,
			2020		2019
			(Unaudited)		(Unaudited)

Cost of integrated solutions contracts		$	79,081	$	70,500
Less: Amortization of intangible assets			76		75
Non-GAAP cost of integrated solutions contracts		$	79,005	$	70,425

General and administrative expenses		$	10,354	$	10,618
Less: Share-based compensation expenses			175		26
Non-GAAP general and administrative expenses		$	10,179	$	10,592

Net income attributable to Hollysys Automation Technologies Ltd.		$	20,546	$	29,681
Add:
Share-based compensation expenses			175		26
Amortization of intangible assets			76		75
Non-GAAP net income attributable to Hollysys Automation Technologies Ltd.		$	20,797	$	29,782
Weighted average number of basic ordinary shares			60,552,099		60,470,611
Weighted average number of diluted ordinary shares			60,552,099		60,483,884
Non-GAAP basic earnings per share	$		0.34	$	0.49
Non-GAAP diluted earnings per share	$		0.34	$	0.49

View original content:http://www.prnewswire.com/news-releases/hollysys-automation-technologies-reports-unaudited-financial-results-for-the-first-quarter-ended-september-30-2020-301171659.html

SOURCE Hollysys Automation Technologies Ltd.

November 12, 2020 5:03 pm

Sumitovant Biopharma and Urovant Sciences Announce Sumitovant’s Acquisition of Remaining Stake in Urovant

– Sumitovant Biopharma to acquire all outstanding shares of Urovant it does not already own

– Transaction increases Urovant’s ability to provide patient therapies and achieve commercial success as it prepares to launch its first potential therapy, vibegron, for the treatment of patients with overactive bladder (OAB)

– Agreement unanimously recommended by Special Committee of Urovant Independent Directors

PR Newswire

NEW YORK and LONDON and IRVINE, Calif. and BASEL, Switzerland, Nov. 12, 2020 /PRNewswire/ — Sumitovant Biopharma and Urovant Sciences (Nasdaq: UROV) today announced that they have entered into a definitive merger agreement for Sumitovant to acquire the outstanding shares of Urovant common stock not already owned by Sumitovant at a price of $16.25 per share in cash. Sumitovant currently owns 72% of the outstanding shares of Urovant common stock.

The acquisition consideration represents an equity value for Urovant of $584 million and an enterprise value of $681 million. The per share consideration represents a premium of 96% to Urovant’s closing price on November 12, 2020, and a premium of 92% to Urovant’s 30-day volume weighted average share price on November 12, 2020. The merger agreement has been unanimously approved by a special committee of Urovant’s Board of Directors. The special committee of Urovant’s Board of Directors has recommended that Urovant’s shareholders vote in favor of the transaction.

“After careful consideration and consultation with our financial advisors, the special committee of the Urovant Board of Directors has found that Sumitovant’s offer represents exceptional value for shareholders,” said Pierre Legault, lead independent member of the Urovant Board of Directors and chairman of the special committee.

“Our foremost purpose is to give Urovant access to capital for its long-term business objectives and ensure focus on its mission to develop and commercialize innovative therapies for its patients,” said Myrtle Potter, Chief Executive Officer of Sumitovant Biopharma. “By bringing Urovant into the fold as a privately-held company under the Sumitovant family of companies, we can enable the Urovant team to fully concentrate on the important task of preparing for its potential commercial launch of vibegron, the first new branded prescription drug for the treatment of OAB in nearly a decade.”

“During this pivotal phase of growth, fully becoming a part of our parent company, Sumitovant, positions Urovant to invest in all opportunities around vibegron including launching and building our commercial organization while maintaining our strategic direction, our commitment to patients with urologic conditions, and our unique corporate culture for employees,” said James Robinson, Chief Executive Officer of Urovant. “This transaction benefits Urovant shareholders by derisking our future and providing current and certain value going forward.”

Additional Transaction Details

The transaction is subject to the approval of Urovant’s shareholders, including holders of a majority of Urovant’s outstanding shares that are not held by Sumitovant and other customary closing conditions. The transaction is not subject to any financing condition.

Upon closing, Urovant will become a wholly owned subsidiary of Sumitovant and Urovant’s common stock will cease trading on the Nasdaq stock market. The closing of the transaction is expected to take place in the first quarter of 2021.

Citi is acting as exclusive financial advisor to Sumitovant. Jones Day is serving as Sumitovant’s legal counsel. Lazard Frères & Co. LLC is acting as exclusive financial advisor to the special committee of Urovant’s Board of Directors. O’Melveny & Myers is serving as the special committee’s legal counsel.

About Sumitovant Biopharma Ltd.

Sumitovant is a global biopharmaceutical company with offices in New York City and London. Sumitovant is a wholly owned subsidiary of Sumitomo Dainippon Pharma. Sumitovant is the majority shareholder of Urovant Sciences and Myovant Sciences, and wholly owns Enzyvant Therapeutics, Spirovant Sciences, and Altavant Sciences. Sumitovant’s promising pipeline is comprised of early-through late-stage investigational medicines across a range of disease areas targeting high unmet need. For further information about Sumitovant, please visit https://www.sumitovant.com.

About Urovant Sciences

Urovant is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions. Urovant’s lead product candidate, vibegron, is an oral, once-daily small molecule beta-3 agonist that is being evaluated for overactive bladder (OAB). Urovant reported positive data from the vibegron 12-week, Phase 3 pivotal EMPOWUR study and demonstrated favorable longer-term efficacy, safety, and tolerability in a 40-week extension study. Urovant submitted a New Drug Application to the FDA seeking approval of vibegron for the treatment of patients with OAB in December 2019. Vibegron is also being evaluated for treatment of OAB in men with benign prostatic hyperplasia (OAB+BPH) and for abdominal pain associated with irritable bowel syndrome (IBS). Urovant’s second product candidate, URO-902, is a novel gene therapy being developed for patients with OAB who have failed oral pharmacologic therapy. Urovant, a subsidiary of Sumitovant Biopharma Ltd., which is a wholly-owned subsidiary of Sumitomo Dainippon Pharma, intends to develop novel treatments for additional urologic diseases. Learn more about us at www.urovant.com.

About Sumitomo Dainippon Pharma Co., Ltd.

Sumitomo Dainippon Pharma is among the top-ten listed pharmaceutical companies in Japan, operating globally in major pharmaceutical markets, including Japan, the U.S., China, and the European Union. Sumitomo Dainippon Pharma is based on the 2005 merger between Dainippon Pharmaceutical Co., Ltd., and Sumitomo Pharmaceuticals Co., Ltd. Today, Sumitomo Dainippon Pharma has more than 6,000 employees worldwide. Additional information about Sumitomo Dainippon Pharma is available through its corporate website at https://www.ds-pharma.com.

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction involving Urovant and Sumitovant. Urovant intends to file with the Securities and Exchange Commission (“SEC”) relevant materials, including a proxy statement in connection with the proposed transaction with Sumitovant on Schedule 14A, and Urovant and certain other persons, including Sumitovant, intend to file a Schedule 13E-3 transaction statement with the SEC. The definitive proxy statement and Schedule 13E-3 transaction statement will be sent or given to the stockholders of Urovant and will contain important information about the proposed transaction and related matters. UROVANT’S SECURITYHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement, Schedule 13E-3 and other relevant materials (when they become available), and any other documents filed by Urovant with the SEC, may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, securityholders of Urovant will be able to obtain free copies of the proxy statement and Schedule 13E-3 through Urovant’s website, www.Urovant.com, or by contacting Urovant by mail at Attn: Investor Relations.

Participants in the Solicitation

Urovant, Sumitovant and its directors, executive officers and other members of management and certain other people may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information about Urovant’s directors and executive officers is included in Urovant’s Annual Report on Form 10-K for the year ended March 31, 2020 filed with the SEC on June 19, 2020, and the proxy statement for Urovant’s annual meeting of stockholders for 2020, filed with the SEC on July 27, 2020. Additional information regarding these persons and their interests in the merger will be included in the proxy statement and Schedule 13E-3 relating to the proposed merger when they are filed with the SEC. These documents, when available, can be obtained free of charge from the sources indicated above. This press release does not constitute a solicitation of a proxy, an offer to purchase or a solicitation of an offer to sell any securities.

Safe Harbor for Forward-looking Statements

This press release contains forward-looking statements. Forward-looking statements include all statements that are not historical statements of fact and statements regarding Urovant’s intent, belief or expectations and can be identified by words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “to be,” “will,” “would,” or the negative or plural of these words or other similar expressions or variations, although not all forward-looking statements contain these identifying words. In this press release, forward-looking statements include, but are not limited to, statements regarding expectations about the proposed transaction involving Urovant and Sumitovant and statements regarding Urovant’s expectations for the commercialization of vibegron for the treatment of overactive bladder and plans and strategies for the clinical development of vibegron and other treatments for urologic diseases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and reported results should not be considered as an indication of future performance. Risks and uncertainties related to the proposed merger include, but are not limited to, the risk that the merger transaction does not close, due to the failure of one or more conditions to closing or otherwise; the risk that required Urovant shareholder approvals of the merger transaction will not be obtained or that such approvals will be delayed or conditioned beyond current expectations; risks related to the disruption of management time from ongoing business operations due to the proposed transaction and possible difficulties in maintaining customer, supplier, key personnel and other strategic relationships; and the possibility of unexpected costs, liabilities or litigation related to the proposed transaction. Additional risks and uncertainties related to Urovant and its business include, but are not limited to, Urovant’s dependence on the success of its lead product candidate, vibegron, including uncertainties regarding FDA approval; the failure to achieve the market acceptance necessary for commercial success for vibegron or any other product candidate; the success and cost of Urovant’s efforts to commercialize vibegron; the impact on Urovant’s business, financial results, results of operations and ongoing clinical trials from the effects of the COVID-19 pandemic; risks related to clinical trials, including uncertainties relating to the success of Urovant’s clinical trials for vibegron and URO-902 and any future therapy or product candidates; uncertainties surrounding the regulatory landscape that governs gene therapy products; Urovant’s dependence on Merck Sharp & Dohme Corp. and Ion Channel Innovations, LLC to have accurately reported results and collected and interpreted data related to vibegron and URO-902 prior to Urovant’s acquisition of the rights related to these product candidates; reliance on a single supplier for the enzyme used to manufacture vibegron; the ability to obtain, maintain, and enforce intellectual property protection for Urovant’s technology and products; risks related to significant competition from other biotechnology and pharmaceutical companies; Urovant’s ability to realize the anticipated benefits of the co-promotion agreement with Sunovion in the manner or timeline expected; and other risks and uncertainties listed in Urovant’s filings with the SEC, including under the heading “Risk Factors” in Urovant’s most recently filed Quarterly Report on Form 10-Q, as such risk factors may be amended, supplemented or superseded from time to time by other filings with the SEC. Given these risks and uncertainties, you should not place undue reliance on any forward-looking statements. These forward-looking statements are based on information available to Sumitovant as of the date of this press release and speak only as of the date of this release. Urovant and Sumitovant disclaims any obligation to update these forward-looking statements, except as may be required by law.

M
edia Contacts:

Sumitovant Biopharma

Mary Stutts

[email protected]

Urovant Sciences

Ryan Kubota

[email protected]

View original content:http://www.prnewswire.com/news-releases/sumitovant-biopharma-and-urovant-sciences-announce-sumitovants-acquisition-of-remaining-stake-in-urovant-301172414.html

SOURCE Sumitovant Biopharma

November 12, 2020 5:03 pm

Centrus Reports Third Quarter 2020 Results

– Raised approximately $25 million, before expenses, through an underwritten public offering of Class A Common Stock

– Announced cash tender offer to retire up to $60 million of Series B Senior Preferred Stock

– Net loss of $7.0 million – a decrease of $29.8 million compared to the net income of $22.8 million in 3Q 2019 — due to variability in the timing of customer deliveries

– Signed an agreement with TerraPower to pursue commercial-scale, domestic production capabilities for High-Assay, Low-Enriched Uranium (HALEU)

– Consolidated cash balance of $152.8 million as of September 30, 2020

PR Newswire

BETHESDA, Md., Nov. 12, 2020 /PRNewswire/ — Centrus Energy Corp. (NYSE American: LEU) today reported a net loss of $7.0 million for the quarter ended September 30, 2020, compared to a net income of $22.8 million for the third quarter of 2019. The net loss allocable to common stockholders was $8.9 million, or $0.83 (basic and diluted) per common share, compared to a net income allocable to common stockholders of $20.9 million or $2.18 (basic) and $2.17 (diluted) per common share, for the third quarter of 2019.

“This has been an exciting quarter for the company, with the launch of the Department of Energy’s Advanced Reactor Demonstration Program – which could jump-start commercial demand for HALEU – and our successful capital raise,” said Daniel B. Poneman, Centrus president and chief executive officer. “Construction of our HALEU demonstration plant is on schedule and on budget, and we are poised to be first to market with this promising new fuel when the demonstration is completed in 2022. We are continuing our efforts to improve our capital structure, having raised approximately $25 million and launched our tender offer to retire up to $60 million of the preferred.”

Financial Results

Centrus generated total revenue of $33.6 million for the third quarter of 2020, a decrease of $71.1 million from the prior year period.

As noted in previous filings, Centrus’ LEU segment is primarily built upon multi-year contracts contained in our sales order book to deliver SWU in which our utility customers have annual, not quarterly, purchase commitments, and Centrus recognizes the revenue from those sales in whatever quarter the customer elects to take delivery of their annual purchase commitment. Revenue in this segment varies considerably from quarter to quarter based on the timing of customer deliveries. That said, there were no SWU deliveries in the three months ended September 30, 2020, with revenue of $0.1 million for ancillary services. As a result, revenue from the LEU segment declined $69.1 million (or 79%) in the three months and $12.7 million (or 10%) in the nine months ended September 30, 2020, compared to the corresponding periods in 2019. SWU sales volume in the nine months ended September 30, 2020, declined 54% compared to the corresponding period in 2019 reflecting the variability in timing of utility customer orders. SWU revenue in the nine months ended September 30, 2020, includes $32.4 million collected in the second quarter from a customer in settlement of a supply contract rejected in bankruptcy court. Excluding these proceeds, the average price per SWU increased 42% in the nine-month period compared to 2019, reflecting the particular contracts under which SWU were sold during the periods.

Revenue from uranium sales increased $5.8 million in the three months and declined $14.7 million in nine months ended September 30, 2020, compared to the corresponding periods in 2019. For the nine-month period, the volume of uranium sold declined 45% and the average price increased 12%.

We anticipate that revenue in the fourth quarter of this year for LEU segment will be the highest of any quarter for 2020, assuming there are no interruptions to our planned customer deliveries based on changes in the market or Covid-19. Cost of sales for the LEU segment declined $34.8 million in the three months and $48.6 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019. There were no SWU deliveries in the three months ended September 30, 2020. For the nine-month period, the decline in cost of sales reflects the 54% decline in SWU sales volume and the 45% decline in uranium sales volume, partially offset by a 10% increase in the average unit cost of sales for uranium. Cost of sales includes legacy costs related to former employees of the Portsmouth and Paducah Gaseous Diffusion Plants of $2.4 million in the nine months ended September 30, 2020, compared to $2.8 million in the nine months ended September 30, 2019. The average cost of sales per SWU excluding legacy costs declined approximately 3% in the nine months ended September 30, 2020, compared to the corresponding period in 2019. Our inventories are valued at the lower of cost or net realizable value. Valuation adjustments for our uranium inventory to reflect declines in uranium market price indicators totaled $2.3 million in the nine months ended September 30, 2019.

Revenue from the technical solutions segment declined $2.0 million in the three months and increased $13.0 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019. The increases were primarily the result of work performed under the HALEU contract. Revenue in the current periods included work performed under the UT-Battelle contract and revenue in the prior periods included work performed under an agreement with DOE to decontaminate and decommission its K-1600 facility in Tennessee. The K-1600 contract was completed in October 2019.

Cost of sales for the technical solutions segment was flat in the three months and increased $12.0 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019, reflecting in part the mix of technical solutions work performed in each of the periods including work performed under the HALEU contract in the current period. Cost of sales benefited by $3.4 million in the three months and $8.7 million in the nine months ended September 30, 2020, for previously accrued contract losses attributable to work performed under the HALEU contract in 2020.

Centrus realized a gross loss of $0.8 million in the three months ended September 30, 2020, compared to a gross profit of $35.5 million in the corresponding period in 2019. In the nine months ended September 30, 2020, we realized a gross profit of $62.6 million compared to a gross profit of $25.7 million in the corresponding period in 2019. We ended the third quarter of 2020 with a consolidated cash balance of $152.8 million.

Selling, general and administrative (SG&A) expenses decreased $2.0 million in the three months compared to the corresponding period in 2019, primarily a result of a decrease in consulting costs of $1.3 million and a decrease in compensation expense of $0.8 million. The decrease in compensation expense is primarily due to a remeasurement of obligations under long-term incentive plans associated with the stock price. Other SG&A expenses increased by a net $0.1 million.

SG&A expenses increased $1.1 million in the nine months ended September 30, 2020, compared to the corresponding period in 2019, primarily due to an increase in consulting costs of $1.7 million related to initiatives including capital financing evaluation, claim recoveries and international trade. Travel and recruiting expenses declined by a total of $0.5 million and other SG&A expenses declined by a net $0.1 million.

About Centrus Energy Corp.

Centrus is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal.

With world-class technical capabilities, Centrus offers turnkey engineering and advanced manufacturing solutions to its customers. The Company is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future. Find out more at www.centrusenergy.com.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. In this context, forward-looking statements mean statements related to future events, may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include but are not limited to the following, which may be amplified by the novel coronavirus (COVID-19) pandemic: risks related to our significant long-term liabilities, including material unfunded defined benefit pension plan obligations and postretirement health and life benefit obligations; risks relating to our 8.25% notes (the “8.25% Notes”) maturing in February 2027 and our Series B Senior Preferred Stock; risks related to the use of our net operating loss (“NOLs”) carryforwards and net unrealized built-in losses (“NUBILs”) to offset future taxable income and the use of the Rights Agreement (as defined herein) to prevent an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and our ability to generate taxable income to utilize all or a portion of the NOLs and NUBILs prior to the expiration thereof; risks related to the limited trading markets in our securities; risks related to our ability to maintain the listing of our Class A Common Stock on the NYSE American LLC (the “NYSE American”); risks related to decisions made by our Class B stockholders and our Series B Senior Preferred stockholders regarding their investment in the Company based upon factors that are unrelated to the Company’s performance; risks related to the Company’s capital concentration; risks related to natural and other disasters, including the continued impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the impact and potential extended duration of the current supply/demand imbalance in the market for low-enriched uranium (“LEU”); our dependence on others for deliveries of LEU including deliveries from the Russian government-owned entity TENEX, Joint-Stock Company (“TENEX”), under a commercial supply agreement with TENEX and deliveries under a long-term supply agreement with Orano Cycle (“Orano”); risks related to existing or new trade barriers and contract terms that limit our ability to deliver LEU to customers; risks related to actions, including government reviews, that may be taken by the United States government, the Russian government or other governments that could affect our ability to perform under our contract obligations or the ability of our sources of supply to perform under their contract obligations to us, including the imposition of sanctions, restrictions or other requirements, and risks relating to the 1992 Russian Suspension Agreement (“RSA”); risks related to our ability to sell the LEU we procure pursuant to our purchase obligations under our supply agreements; risks relating to our sales order book, including uncertainty concerning customer actions under current contracts and in future contracting due to market conditions and lack of current production capability; risks related to financial difficulties experienced by customers, including possible bankruptcies, insolvencies or any other inability to pay for our products or services or delays in making timely payment; pricing trends and demand in the uranium and enrichment markets and their impact on our profitability; movement and timing of customer orders; risks related to the value of our intangible assets related to the sales order book and customer relationships; risks associated with our reliance on third-party suppliers to provide essential products and services to us; the impact of government regulation including by the U.S. Department of Energy (“DOE”) and the U.S. Nuclear Regulatory Commission; uncertainty regarding our ability to commercially deploy competitive enrichment technology; risks and uncertainties regarding funding for deployment of the American Centrifuge technology and our ability to perform and absorb costs under our agreement with DOE to demonstrate the capability to produce high assay low enriched uranium (“HALEU”) and our ability to obtain and/or perform under other agreements; risks relating to whether or when government or commercial demand for HALEU will materialize; the potential for further demobilization or termination of our American Centrifuge work; risks related to our ability to perform and receive timely payment under agreements with DOE or other government agencies, including risk and uncertainties related to the ongoing funding of the government and potential audits; the competitive bidding process associated with obtaining a federal contract; risks related to our ability to perform fixed-price and cost-share contracts, including the risk that costs could be higher than expected; risks that we will be unable to obtain new business opportunities or achieve market acceptance of our products and services or that products or services provided by others will render our products or services obsolete or noncompetitive; risks that we will not be able to timely complete the work that we are obligated to perform; failures or security breaches of our information technology systems; risks related to pandemics and other health crises, such as the global COVID-19 pandemic; potential strategic transactions, which could be difficult to implement, disrupt our business or change our business profile significantly; the outcome of legal proceedings and other contingencies (including lawsuits and government investigations or audits); the competitive environment for our products and services; changes in the nuclear energy industry; the impact of financial market conditions on our business, liquidity, prospects, pension assets and insurance facilities; the risks of revenue and operating results fluctuating significantly from quarter to quarter, and in some cases, year to year; and other risks and uncertainties discussed in this and our other filings with the Securities and Exchange Commission, including under Part II, Item1A – “Risk Factors” in this report and under Part I, Item1A – “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should be not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this report and in our other filings with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this Quarterly Report on Form 10-Q, except as required by law.

Contacts:

Investors: Dan Leistikow (301) 564-3399 or [email protected]
Media: Lindsey Geisler (301) 564-3392 or [email protected]

CENTRUS ENERGY CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) ( Unaudited; in millions, except share and per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue:
Separative work units	$	0.1	$	75.0	$	89.4	$	87.4
Uranium	18.6		12.8		23.4		38.1
Technical solutions	14.9		16.9		41.5		28.5
Total revenue	33.6		104.7		154.3		154.0
Cost of Sales:
Separative work units and uranium	19.6		54.4		51.8		100.4
Technical solutions	14.8		14.8		39.9		27.9
Total cost of sales	34.4		69.2		91.7		128.3
Gross profit (loss)	(0.8)		35.5		62.6		25.7
Advanced technology costs	0.2		1.3		1.8		13.0
Selling, general and administrative	6.7		8.7		25.6		24.5
Amortization of intangible assets	1.2		1.8		4.3		4.1
Special charges (credits) for workforce reductions	0.6		0.8		0.5		(2.2)
Gain on sales of assets	—		(0.2)		—		(0.7)
Operating income (loss)	(9.5)		23.1		30.4		(13.0)
Nonoperating components of net periodic benefit expense (income)	(2.2)		(0.1)		(6.6)		(0.2)
Interest expense	—		0.9		0.1		2.9
Investment income	(0.1)		(0.5)		(0.5)		(1.9)
Income (loss) before income taxes	(7.2)		22.8		37.4		(13.8)
Income tax expense (benefit)	(0.2)		—		(0.6)		(0.1)
Net income (loss) and comprehensive income (loss)	(7.0)		22.8		38.0		(13.7)
Preferred stock dividends – undeclared and cumulative	1.9		1.9		5.9		5.9
Net income (loss) allocable to common stockholders	$	(8.9)	$	20.9	$	32.1	$	(19.6)

Net income (loss) per common share:
Basic	$	(0.83)	$	2.18	$	3.21	$	(2.05)
Diluted	$	(0.83)	$	2.17	$	3.12	$	(2.05)
Average number of common shares outstanding (in thousands):
Basic	10,723		9,582		10,008		9,560
Diluted	10,723		9,626		10,282		9,560

CENTRUS ENERGY CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; in millions, except share and per share data)

	September 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	152.8	$	130.7
Accounts receivable	14.1		21.1
Inventories	66.6		64.5
Deferred costs associated with deferred revenue	145.4		144.1
Other current assets	7.4		9.2
Total current assets	386.3		369.6
Property, plant and equipment, net of accumulated depreciation of $2.5 as of September 30, 2020 and $2.2 as of December 31, 2019	4.4		3.7
Deposits for financial assurance	5.7		5.7
Intangible assets, net	65.2		69.5
Other long-term assets	6.6		7.4
Total assets	$	468.2	$	455.9

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	52.2	$	50.7
Payables under SWU purchase agreements	—		8.1
Inventories owed to customers and suppliers	7.8		5.6
Deferred revenue and advances from customers	249.7		266.3
Current debt	6.1		6.1
Total current liabilities	315.8		336.8
Long-term debt	108.0		114.1
Postretirement health and life benefit obligations	131.3		138.6
Pension benefit liabilities	121.2		141.8
Advances from customers	44.9		29.4
Other long-term liabilities	22.6		32.1
Total liabilities	743.8		792.8
Commitments and contingencies (Note 13)
Stockholders’ deficit:
Preferred stock, par value $1.00 per share, 20,000,000 shares authorized
Series A Participating Cumulative Preferred Stock, none issued	—		—
Series B Senior Preferred Stock, 7.5% cumulative, 104,574 shares issued and outstanding and an aggregate liquidation preference of $133.1 as of September 30, 2020 and $127.2 as of December 31, 2019	4.6		4.6
Class A Common Stock, par value $0.10 per share, 70,000,000 shares authorized, 11,320,689 and 8,347,427 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	1.1		0.8
Class B Common Stock, par value $0.10 per share, 30,000,000 shares authorized, 719,200 and 1,117,462 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively	0.1		0.1
Excess of capital over par value	84.8		61.5
Accumulated deficit	(367.0)		(405.0)
Accumulated other comprehensive income, net of tax	0.8		1.1
Total stockholders’ deficit	(275.6)		(336.9)
Total liabilities and stockholders’ deficit	$	468.2	$	455.9

CENTRUS ENERGY CORP. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ( Unaudited; in millions)

	Nine Months Ended September 30,
	2020		2019
OPERATING
Net income (loss)	$	38.0	$	(13.7)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization	4.7		4.5
PIK interest on paid-in-kind toggle notes	—		1.1
Gain on sales of assets	—		(0.7)
Inventory valuation adjustments	—		2.3
Changes in operating assets and liabilities:
Accounts receivable	7.0		31.3
Inventories, net	17.1		(9.3)
Accounts payable and other liabilities	(0.3)		(11.2)
Payables under SWU purchase agreements	(8.1)		(33.0)
Deferred revenue and advances from customers, net of deferred costs	(17.5)		18.9
Accrued loss on long-term contract	(8.7)		—
Pension and postretirement benefit liabilities	(28.1)		(15.9)
Other, net	1.1		(0.8)
Cash provided by (used in) operating activities	5.2		(26.5)

INVESTING
Capital expenditures	(0.9)		—
Proceeds from sales of assets	—		0.7
Cash (used in) provided by investing activities	(0.9)		0.7

FINANCING
Proceeds from the sale of common stock, net	23.8		—
Exercise of stock options	0.2		—
Principal payments on debt	—		(27.5)
Payment of deferred issuance costs	(0.1)		(0.2)
Payment of interest classified as debt	(6.1)		(6.1)
Cash provided by (used) in financing activities	17.8		(33.8)

Increase (decrease) in cash, cash equivalents and restricted cash	22.1		(59.6)
Cash, cash equivalents and restricted cash, beginning of period (Note 4)	136.6		159.7
Cash, cash equivalents and restricted cash, end of period (Note 4)	$	158.7	$	100.1

Supplemental cash flow information:
Interest paid in cash	$	—	$	1.5
Non-cash activities:
Conversion of interest payable-in-kind to debt	$	—	$	0.7
Deferred financing costs included in accounts payable and accrued liabilities	$	0.7	$	0.4
Right to use lease assets acquired under operating leases	$	—	$	2.9
Disposal of right to use lease assets for early termination	$	—	$	0.2
Property, plant and equipment included in accounts payable and accrued liabilities	$	0.1	$	—

View original content to download multimedia:http://www.prnewswire.com/news-releases/centrus-reports-third-quarter-2020-results-301172409.html

SOURCE Centrus Energy Corp.

November 12, 2020 5:03 pm

Superior Drilling Products, Inc. Executes Sale-Leaseback Transaction for $4.5 million

Superior Drilling Products, Inc. Executes Sale-Leaseback Transaction for $4.5 million

VERNAL, Utah–(BUSINESS WIRE)–Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or the “Company”), an innovator and manufacturer of drilling tool technologies, today announced that it has entered into sale-leaseback agreements for its facilities in Vernal, Utah. The transaction is subject to customary due diligence and the Company expects it to close before year end.

Under the terms of the transaction, SDP will sell its facilities for $4.5 million and simultaneously enter into a 15-year lease. After fees, the Company is expected to net approximately $4.2 million in proceeds of which $2.5 million will be used to repay its outstanding mortgage. Lease terms are for monthly payments that are $17 thousand less than current mortgage debt service.

Chris Cashion, Chief Financial Officer, commented, “This transaction was an excellent opportunity given current market conditions for us to monetize our Vernal property. The proceeds will enable us to completely pay off our mortgage and improve liquidity with approximately $1.7 million in additional cash. The additional cash helps bolster our balance sheet providing us the flexibility to continue to expand internationally and develop additional revenue streams. The Drill-N-Ream®, our unique, patented wellbore conditioning tool, is being deployed more frequently in international markets while it also continues to gain new customers in the U.S. We believe this bodes well for our future and these opportunities are further bolstered as the oil & gas industry begins to improve.”

About Superior Drilling Products, Inc.

Superior Drilling Products, Inc. is an innovative, cutting-edge drilling tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. The Company designs, manufactures, repairs and sells drilling tools. SDP drilling solutions include the patented Drill-N-Ream® well bore conditioning tool and the patented Strider^™ oscillation system technology. In addition, SDP is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for a leading oil field service company. SDP operates a state-of-the-art drill tool fabrication facility, where it manufactures its solutions for the drilling industry, as well as customers’ custom products. The Company’s strategy for growth is to leverage its expertise in drill tool technology and innovative, precision machining in order to broaden its product offerings and solutions for the oil and gas industry.

Additional information about the Company can be found at: www.sdpi.com.

Safe Harbor Regarding Forward Looking Statements

This news release contains forward-looking statements and information that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this release, including, without limitations, the continued impact of COVID-19 on the business, the Company’s strategy, future operations, success at developing future tools, the Company’s effectiveness at executing its business strategy and plans, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management, and ability to outperform are forward-looking statements. The use of words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project”, “forecast,” “should” or “plan, and similar expressions are intended to identify forward-looking statements, although not all forward -looking statements contain such identifying words. These statements reflect the beliefs and expectations of the Company and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, the duration of the COVID-19 pandemic and related impact on the oil and natural gas industry, the effectiveness of success at expansion in the Middle East, options available for market channels in North America, the deferral of the commercialization of the Strider technology, the success of the Company’s business strategy and prospects for growth; the market success of the Company’s specialized tools, effectiveness of its sales efforts, its cash flow and liquidity; financial projections and actual operating results; the amount, nature and timing of capital expenditures; the availability and terms of capital; competition and government regulations; and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the Company’s plans and described herein. The Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006100/en/

For more information, contact investor relations:

Deborah K. Pawlowski

Kei Advisors LLC

(716) 843-3908

[email protected]

KEYWORDS: Utah United States North America

INDUSTRY KEYWORDS: Energy Natural Resources Mining/Minerals Oil/Gas

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November 12, 2020 5:03 pm

FSD Pharma Announces Third Quarter 2020 Financial Results and Provides Corporate Update

FSD Pharma Announces Third Quarter 2020 Financial Results and Provides Corporate Update

TORONTO–(BUSINESS WIRE)–
FSD Pharma Inc. (Nasdaq: HUGE) (CSE: HUGE) (“FSD Pharma” or the “Company”) today announced its financial results for the third quarter ending September 30, 2020 and provided a corporate update. The filing is available on SEDAR.

Financial and corporate highlights include:

Completion of financings for gross proceeds of $19.5 million USD through two registered direct offerings. As of September 30, 2020, cash & non-cash assets are $56.2 million CAD and short & long term liabilities are $13.6 million CAD.
Filing an Investigational New Drug Application (“IND”) application with the U.S. Food and Drug Administration (“FDA”) and receiving approval to initiate a Phase 2 clinical trial for the use of our lead compound, ultramicronized-palmitoylethanolamide (or ultramicronized PEA) (“FSD201”), to treat 352 hospitalized COVID-19 patients in a double-blind study. We believe FSD201 to be a safe drug with anti-inflammatory properties which may have the potential to address the over-exuberant inflammatory response characterized by COVID-19 infection that may lead to a cytokine storm and ultimately death. The Company believes it has sufficient cash on hand to complete the study. More information on the clinical trial is available on the U.S. National Library of Medicine Website at: https://clinicaltrials.gov/ct2/show/NCT04619706?term=palmitoylethanolamide&cond=Covid19&draw=2&rank=2. The contents of such website are not incorporated by reference herein.
Entry into a definitive settlement agreement with respect to the class action litigation commenced by a plaintiff shareholder in the Ontario Superior Court of Justice in February 2019 relating to the build out of the Company’s facility in Cobourg, Ontario. The Company is obligated to pay $5.5 million CAD in settlement; of which, approximately $4.6 million CAD will be funded from insurance proceeds and $0.9 million CAD will be paid from cash on hand by the Company. The settlement agreement is subject to customary conditions.
Entry into a conditional contract to sell non-core real estate asset in Cobourg, Ontario which is expected to close before year end 2020 and is subject to customary conditions.

Three and Nine Months’ Financial Results (All Figures in C$)

For the three and nine months ended September 30, 2020, total operating expenses were $17,486,928 and $32,791,748, respectively, compared to $11,119,296 and $21,474,025 for the comparative periods in the prior year. This represents an increase of $6,367,632 or 57% for the three months ended September 30, 2020 and an increase of $11,317,723 or 53% for the nine months ended September 30, 2020, compared to the equivalent periods in the prior year. The increase for the three and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019 is primarily related to pharmaceutical R&D expense of the Phase 1 safety & tolerability study of FSD201, ongoing Phase 2 clinical study of FSD201 to evaluate treatment of hospitalized COVID-19 patients, higher stock based compensation, higher professional fees, and insurance expense as a result of the Nasdaq listing in January 2020.

For the three and nine months ended September 30, 2020, net loss was $18,034,382 and $36,450,247, respectively, compared to $16,962,007 and $34,949,559 for the three and nine months ended September 30, 2019. This represents an increase of $1,072,375 or 6% for the three months ended September 30, 2020 and an increase of $1,500,688 or 4% for the nine months ended September 30, 2020, compared to the equivalent periods in the prior year. The net loss in the three, and, nine month period ending September 30 2020 includes share based compensation of $6,870,177 and one time charge of $928,541 for the class action settlement.

The Company is not making any express or implied claims that its product has the ability to eliminate, cure or contain the COVID-19 (or SARS-2-Coronavirus) at this time.

About FSD Pharma

FSD Pharma Inc. is a publicly-traded holding company.

FSD Pharma BioSciences, Inc., a wholly-owned subsidiary, is a specialty biotech pharmaceutical R&D company focused on developing over time multiple applications of its lead compound, FSD201, by down-regulating the cytokines to effectuate an anti-inflammatory response.

The Company filed an IND with the FDA on August 28, 2020 and was approved on September 25, 2020 to initiate a phase 2 clinical trial for the use of FSD201 to treat COVID-19, the disease caused by the SARS-CoV-2 virus.

Severe COVID-19 is characterized by an over-exuberant inflammatory response that may lead to a cytokine storm and ultimately death. The Company is focused on developing FSD201 for its anti-inflammatory properties to avoid the cytokine storm associated with acute lung injury in hospitalized COVID-19 patients.

Forward-Looking Statements

Neither the Canadian Securities Exchange nor its regulation services provider accept responsibility for the adequacy or accuracy of this press release.

Certain statements contained in this press release constitute “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and U.S. securities laws (collectively, “Forward-Looking Information”). Forward-Looking Information includes, but is not limited to, information with respect to FSD Pharma’s strategy, plans or future financial or operating performance, receipt of any FDA approvals, the completion of any trials regarding the use of FSD201 to treat COVID-19, the safety of FSD201 or whether FSD201 may be effective in treating COVID-19, the costs associated with such planned trials and our belief that we have sufficient cash to complete the Phase 2 study, our ability to obtain required funding and the terms and timing thereof, the ultimate development of any FDA approved synthetic compounds, the expected insurance recovery related to the settlement agreement, the completion of the settlement contemplated in the settlement agreement and the timing and closing of the sale of certain non-core real estate assets. The use of words such as “budget”, “intend”, “anticipate”, “believe”, “expect”, “plan”, “forecast”, “future”, “target”, “project”, “capacity”, “could”, “should”, “focus”, “proposed”, “scheduled”, “outlook”, “potential”, “estimate” and other similar words, and similar expressions and statements relating to matters that are not historical facts, or statements that certain events or conditions “may” or “will” occur, are intended to identify Forward-Looking Information and are based on FSD Pharma’s current beliefs or assumptions as to the outcome and timing of such future events. Such beliefs or assumptions necessarily involve known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such Forward‐Looking Information. Certain of these risks and uncertainties are described in the Company’s continuous disclosure filings available under the Company’s SEDAR profile at www.sedar.com and under the Company’s EDGAR profile at www.sec.gov. Forward‐Looking Information is not a guarantee of performance. The Forward-Looking Information contained in this press release is made as of the date hereof, and FSD Pharma is not obligated to update or revise any Forward- Looking Information, whether as a result of new information, future events or otherwise, except as required by law. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on Forward Looking-Information. The foregoing statements expressly qualify any Forward-Looking Information contained herein.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201112006099/en/

For further information:

Sandy Huard, Head of Communications, FSD Pharma Inc.

[email protected]

(647) 864-7969

Donal Carroll, Chief Financial Officer, FSD Pharma Inc.

[email protected]

Investor Relations

[email protected]

KEYWORDS: North America Canada

INDUSTRY KEYWORDS: Biotechnology Pharmaceutical Health

MEDIA:

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