CERENIS Therapeutics annonce sa position de trésorerie et fait le point sur ses perspectives d’ici la fin de l’année 2018

TOULOUSE, France & FORT WORTH, Texas–()–Regulatory News:

CERENIS Therapeutics (Paris:CEREN) (FR0012616852 – CEREN – Éligible PEA PME), société biopharmaceutique internationale dédiée à la découverte et au développement de nouvelles thérapies innovantes basées sur les HDL pour le traitement des maladies cardiovasculaires et métaboliques, ainsi que de nouveaux vecteurs HDL pour la délivrance ciblée de médicaments dans le domaine de l’oncologie, annonce sa position de trésorerie au 30 juin 2018 et rappelle les faits marquants déjà communiqués du premier semestre 2018 ainsi que les perspectives d’ici la fin de l’exercice.

Une trésorerie solide de 13,5 M€ au 30 juin 2018

La trésorerie et les équivalents de trésorerie s’élèvent à 13,5 M€ au 30 juin 2018. La société a reçu au mois de juin le remboursement du crédit impôt recherche pour un montant de 1,3 M€ qui fait partie intégrante de la trésorerie au 30 juin 2018. Conformément aux attentes, Cerenis Therapeutics n’a pas généré de chiffre d’affaires au cours du premier semestre 2018, les produits de la Société étant en phase de recherche et développement.

Des avancées solides au 1er semestre 2018 : atteinte de l’objectif primaire pour les premiers résultats de l’étude de phase II, TARGET et accord stratégique avec le North Texas Health Science Center

Les premiers résultats de l’étude de phase II, TARGET qui ont fait l’objet d’un communiqué en date du 25 juin 2018, démontrent la capacité de CER-001 à cibler la tumeur chez les patients atteints du cancer de l’œsophage. L’objectif primaire est atteint avec le ciblage cliniquement significatif des tissus tumoraux, chez des patients atteints d’un cancer de l’œsophage par CER-001, un mimétique de HDL. Le marquage prolongé de la tumeur détermine l’utilisation future des particules HDL pour améliorer la délivrance d’un agent thérapeutique. Ces résultats encourageants ont été observés chez des patients atteints d’un cancer de l’œsophage, une indication souvent réfractaire à la thérapie standard, et aucun problème de sécurité et de tolérance n’a été observé.

Au premier semestre, CERENIS Therapeutics a également annoncé un accord stratégique avec le North Texas Health Science Center (Fort Worth, USA) pour développer de nouveaux produits pharmaceutiques à base de HDL. Un programme commun a été établi pour le développement de nouvelles technologies de délivrance de médicaments par les HDL en collaboration avec le Docteur Andras Lacko, éminent scientifique et pionnier dans le développement de systèmes HDL de délivrance de médicaments anticancéreux. Ce programme commun marque une étape importante dans l’évolution stratégique de CERENIS vers une société disposant de plateformes HDL pour la délivrance de médicaments en immuno-oncologie.

Des perspectives importantes : résultats de Phase III, TANGO, pour CER-001 chez des patients atteints de déficience en HDL et de Phase I pour CER-209 dans la NAFLD/NASH à doses multiples

Après les premiers résultats positifs de Phase II de l’étude TARGET, deux autres résultats majeurs sont attendus d’ici la fin de l’exercice 2018 :

CER-001 : la thérapie HDL pour les patients atteints de FPHA Phase III (TANGO)
CER-001 est un mimétique de HDL pour traiter les patients atteints d’une déficience en HDL (FPHA) due à des mutations génétiques. L’EMEA a accordé deux désignations de médicament orphelin pour CER-001. Le HDL est le médiateur du Transport Retour des Lipides, ou RLT, la seule voie naturelle par laquelle l’excès de cholestérol est retiré des artères et transporté vers le foie pour être éliminé. Les résultats de cette étude de Phase III, TANGO, sont attendus à la fin du T4 2018. Le dépôt du dossier d’autorisation de mise sur le marché est prévu pour fin 2019.

CER-209 pour adresser les NAFLD/NASH et l’athérosclérose associée au travers d’un mécanisme d’action validé – Phase I doses multiples
CER-209 est un candidat-médicament qui augmente la reconnaissance des HDL chargées en lipides par le foie et facilite l’élimination de ceux-ci chez les patients atteints de NAFLD/NASH et d’athérosclérose. L’étude de tolérance de phase I en dose unique ayant été achevée avec succès, l’étude de doses répétées et croissantes a été autorisée et les premiers patients ont été inclus en avril dernier. Les résultats sont attendus au S2 2018.

A propos de CERENIS : www.cerenis.com

Cerenis Therapeutics Holding est une société biopharmaceutique internationale dédiée à la découverte et au développement de thérapies innovantes basées sur les HDL et le métabolisme de lipides pour le traitement des maladies cardiovasculaires et métaboliques ainsi que de nouveaux vecteurs HDL pour la délivrance ciblée de médicaments dans le domaine de l’oncologie.
Le HDL est le médiateur primaire du transport retour du cholestérol (ou RLT), la seule voie métabolique par laquelle le cholestérol en excès est retiré des artères et transporté vers le foie pour élimination du corps. Cerenis développe un portefeuille de thérapies basées sur le métabolisme des lipides, dont des mimétiques de particules HDL pour les patients souffrant de déficience en HDL, ainsi que des médicaments qui augmentent les HDL chez les patients ayant un faible nombre de HDL, pour traiter pour traiter l’athérosclérose et les maladies métaboliques associées telles que la StéatoHépatite Non Alcoolique (NASH) et les Hépatites Graisseuses Non Alcooliques (NAFLD).
Cerenis est bien positionné pour devenir l’un des leaders du marché des thérapies HDL avec un riche portefeuille de programmes en développement.

A propos de la deìlivrance cibleìe de meìdicaments par les HDL

Les particules HDL chargeìes avec un agent theìrapeutique, pourraient cibler et tuer seìlectivement les cellules malignes tout en eìpargnant les cellules saines. Une large varieìteì de meìdicaments peut être transporteìe dans ces particules qui cibleront des marqueurs speìcifiques des cellules canceìreuses pour y deìlivrer de puissants meìdicaments sur les sites d’action souhaiteìs, avec une toxiciteì systeìmique moindre.
Les CargomersTM, particules multimeìriques d’apo-AI, et les particules HDL telles que CER-001, ont le potentiel d’être des vecteurs de plusieurs meìdicaments anticanceìreux, d’antigeÌnes, d’acides nucleìiques et d’oligonucleìotides antisens, ouvrant ainsi aÌ Cerenis de nombreuses opportuniteìs attractives de partenariat pour sa plateforme.
Cerenis compte deìvelopper la premieÌre plateforme de deìlivrance par des particules HDL, deìdieìe au marcheì de l’oncologie, dont l’immuno-oncologie et la chimiotheìrapie.

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Cerenis Therapeutics: Cash Position and Activity Update for H1 2018 and Key Perspectives for the End of 2018

TOULOUSE, France & LAKELAND, Fla.–()–Regulatory News:

Cerenis Therapeutics (Paris:CEREN) (FR0012616852 – CEREN – PEA PME eligible), an international biopharmaceutical company dedicated to the discovery and development of HDL-based innovative therapies for treating cardiovascular, metabolic diseases, and HDL platform technologies today recapitulates the major events previously communicated and announced its cash position at June 30, 2018 and perspectives for the end of 2018.

Solid cash position of €13.5 million at June 30, 2018
Cash and cash equivalents totaled €13.5 million at June 30, 2018. In June, the Company was granted €1.3 million in research tax credit for R&D expenses. In line with expectations, Cerenis Therapeutics did not generate any revenue during the first half of 2018, the Company’s products being at the Research and Development stage.

Key highlights in the first half-year of 2018: Primary objective met in the first results of TARGET PHASE II study and strategic partnership with the University of North Texas Health Science Center
The first results of TARGET PHASE II study published on June 25th, 2018, demonstrate the ability of CER-001, an HDL mimetic, to target tumor in patients with esophageal cancer. The primary objective is met with clinically meaningful targeting of esophageal tumor tissue by radiolabeled CER-001. The sustained tumor labeling supports future use of HDL mimetics to improve effective delivery of therapeutic agents. Results are consistent with preclinical studies using HDL mimetics. These encouraging results were observed in patients with esophageal cancer, often refractory to standard therapy. No safety or tolerability issues were observed.

In the first half-year of 2018 CERENIS Therapeutics announced the signing of a strategic partnership with the University of North Texas Health Science Center to develop new HDL technologies for drug delivery. The joint program will focus on the development of new HDL drug delivery products and technologies in collaboration with Andras Lacko, PhD, a prominent pioneering scientist in the development of HDL delivery systems for cancer drugs. This initiative is another marker of Cerenis’ strategic evolution into a company with novel HDL platforms for drug delivery in immunotherapy.

Key perspectives by the end of 2018: results of TANGO PHASE III study with CER-001 with HDL deficiency patients and PHASE I study of repeated and increasing doses to assess CER-209 in NASH/NAFLD NAFLD/NASH

Following the first results of TARGET PHASE II study, two other outstanding results are expected by the end of 2018:

CER-001: results of TANGO PHASE III study with CER-001 with HDL deficiency patients. The Phase III TANGO trial is designed to assess both the efficacy of CER-001 to regress atherosclerosis and its safety in patients with FPHA. Cerenis Therapeutics has received two Orphan Drug Designations from the European Medicines Agency (EMA) for the use of CER-001 in the treatment of HDL deficiency patients. CER-001 reconstituted the reverse lipid transport (RLT) pathway in individuals who have defects in the natural HDL pathway, facilitating elimination of cholesterol from the body. The results of the PHASE III study are expected by the end of 2018. Positive TANGO results could lead to market authorization of CER-001 in the end of 2019.

CER-209 in NAFLD/NASH and atherosclerosis with a validated mechanism of action: PHASE I of repeated and increasing doses. CER-209, by activating the natural metabolic pathways mediated by the P2Y13 receptor, promotes HDL recognition and lipid elimination by the liver. The Phase 1 Single Dose Tolerance Study was completed with success. First patients were included last April and no tolerability issues were observed in the safety study. After approval to launch the Phase I Study with escalating doses the results of the study are expected in the second half year of 2018.

About CERENIS: www.cerenis.com
CERENIS Therapeutics is an international biopharmaceutical company dedicated to the discovery and development of innovative lipid metabolism therapies for the treatment of cardiovascular, metabolic diseases, and HDL platform technologies. HDL is the primary mediator of the reverse lipid transport, or RLT, the only natural pathway by which excess lipids are removed from arteries and transported to the liver for elimination from the body.

In addition to advancing HDL technologies for drug delivery, CERENIS is developing a portfolio of lipid metabolism therapies, including HDL mimetics for patients with genetic HDL deficiency, as well as drugs which increase HDL for patients with a low number of HDL particles to treat atherosclerosis and associated metabolic diseases including Non-Alcoholic Fatty Liver Disease (NAFLD) and Non-Alcoholic Steato-Hepatitis (NASH). CERENIS is well positioned to become one of the leaders in the HDL therapeutic market, with a broad portfolio of programs in development.

About Targeted HDL Drug Delivery
HDL particles, loaded with an active agent, hold the promise to target and selectively kill malignant cells while sparing healthy ones. A wide variety of drugs can be embedded in these particles targeting markers specific to cancer cells and bring these potent drugs to their intended site of action, with lowered systemic toxicity.

CargomerTM, apo-AI multimeric nanoparticles, and HDL particles such as CER-001 have the future potential to serve as carriers of multiple anti-cancer drugs, antigens, interfering RNA (siRNA’s), and anti-sense oligonucleotides (ASOs) opening the path for the Cerenis platform.

Cerenis intends to develop the first HDL-based targeting drug delivery platform dedicated to the oncology market, including immuno-oncology and chemotherapy.

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Xilam: H1 2018 Revenue: +50%

PARIS–()–Regulatory News:

The Xilam Group (Paris:XIL) posted consolidated H1 2018 revenue of EUR 13,866 thousand, an increase of 50%. This increase represents an excellent performance, as it follows on the heels of growth of 54% in H1 2017. Revenue for the first part of this financial year breaks down as follows.

In thousands of euros   30.06.2018(1)   30.06.2017  

Change

New productions   8,465   4,571   +85%
Catalogue   5,385   4,652   +16%
Other   16   16   +0%
Revenue and subsidies   13,866   9,239   +50%

(1) Unaudited data.

Remarkable success for new releases +85%

Excellent H1 growth was driven by the two main businesses, New Productions and Catalogue.

In New Productions, H1 deliveries generated record revenue of EUR 8,465 thousand, an 85% increase compared with H1 2017, and confirmed Xilam’s position as a major European animation company.

Catalogue revenue was up 16% compared with H1 2017, thanks again to traditional TV channels and digital platforms, in both France and abroad.

A fast-paced delivery schedule

Thanks to its increasing production capacity in recent years, Xilam delivered 37 half-hour programmes over the half year, and has thus completed production of all episodes of:

  • the fifth season of Oggy & the Cockroaches, which has notably been pre-purchased by Gulli in France, and Cartoon Network and Netflix internationally; this season is already ranked among the top audience figures of the main broadcasters associated with the brand;
  • Paprika, the Group’s first preschool show, which has been pre-purchased by France Télévisions, Disney Channel and Netflix; Initial launches in France, Italy and Australia are already very promising.
  • The second season of Magic, pre-purchased by Gulli in France, Discovery and Amazon internationally, which will be launched at the end of the year.
  • If I were an animal, a wildlife series designed especially for children, pre-purchased notably by France Télévisions and Netflix, and for which international pre-sales point to excellent longevity as a catalogue property.

A well-furnished catalogue which has again provided record catalogue revenue

H1 saw yet another historical performance for the catalogue, with sales up a further 16%.

YouTube income rocketed 73%, driven by almost 1.9 billion video views over the period, confirming Xilam’s position among the leading animated content providers on the largest global streaming platform.

This growth was mainly due to the success of Oggy & the Cockroaches and Zig & Sharko, with the number of video views for the latter now equalling that of Oggy & the Cockroaches.

The Group’s other content also contributed to sales growth in France, Italy and India, such as the two seasons of The Daltons.

Record sales expected in 2018

After this successful H1, the delivery of new productions will continue in H2 at a rapid rate, and catalogue sales are expected to enjoy a fresh increase, thus confirming continued robust growth.

Mr. Magoo, Zig & Sharko 3, Coach me if you can: expected global success

H2 will see the delivery of the first episodes of Mr. Magoo, Zig & Sharko 3 and Coach me if you can:

  • Mr. Magoo, based on the famous American character from the 1950s (which won several Oscars), has already broken Xilam’s all-time pre-sale record, as its broadcast is already guaranteed in at least 150 countries.
  • The keenly awaited and widely pre-purchased season three of Zig & Sharko, should again ensure the content’s strength worldwide, placing Zig & Sharko side by side with Oggy & the Cockroaches.
  • Coach me if you can: an original, football-themed creation from the Xilam studio that is expected to be released worldwide and will be gradually launched at the end of 2019 to be fully broadcast to coincide with Euro 2020.

In view of this highly favourable outlook, Xilam is confident in its ability to post further record-breaking results for the financial year as a whole.

Xilam is also currently working on Tiny Bad Wolf (a new preschool series) and The Fabulous Adventures of Prince Moka (a new comedy), confirming its target of delivering 100 half-hour programmes per year as of 2020.

Xilam thus confirms its growing ability to create, produce and distribute high-quality animated programmes and market them at an increasingly rapid rate on the world’s largest global broadcasting platforms, providing these programmes, which it fully owns, with an excellent long-term asset value.

NB: The Group has adopted IFRS 15 – Revenue from Contracts with Customers, and this document therefore presents 2018 revenue after the application of this new standard. Using the same revenue recognition method as in 2017, H1 2018 revenue would have been EUR 8,094 thousand for New Productions and EUR 4,771 thousand for the Catalogue business. As the Group has opted for the cumulative recovery method, H1 2018 and FY 2018 financial statements will be restated in the notes to the financial statements for the effects of the application of this new standard.

About Xilam

Xilam is one of Europe’s leading animation companies, creating, producing and distributing original children’s and family entertainment content across TV, film and digital media platforms.

Founded in 1999 by Marc du Pontavice, Xilam owns a catalogue of more than 2,000 animated episodes and three feature films including strong brands such as Oggy & the Cockroaches, Zig & Sharko, The Daltons and its first pre-school series, Paprika.

Broadcast in over 190 countries on all the major TV networks and digital platforms, including YouTube with over 300 million video views monthly, Xilam’s programme catalogue makes the company one of the top global content providers in animation.

Xilam employs more than 400 people, including 300 artists, who are based across its four studios located in Paris, Lyon, Angoulême and Ho-Chi-Minh City in Vietnam.

Xilam is listed on Compartment B of Euronext Paris
PEA-eligible
SRD long-eligible
ISIN code: FR0004034072 / Ticker: XIL

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Winmark Corporation Announces Second Quarter Results

MINNEAPOLIS–()–Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended June 30, 2018 of $7,143,000 (or $1.73 per share diluted) compared to net income of $5,530,700 (or $1.23 per share diluted) in the second quarter of 2017. For the six months ended June 30, 2018, net income was $14,103,400 (or $3.42 per share diluted) compared to net income of $11,081,500 (or $2.48 per share diluted) for the same period last year.

Brett D. Heffes, Chief Executive Officer, commented, “The strong start to 2018 has been highlighted by the positive performance of our franchisees. We continue to be pleased with the results of the overall business.”

Winmark Corporation creates, supports and finances business. At June 30, 2018, there were 1,224 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. An additional 62 retail franchises have been awarded but are not open. In addition, at June 30, 2018, the Company had a lease portfolio of $43.4 million.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

WINMARK CORPORATION

CONDENSED BALANCE SHEETS

(unaudited)

           
June 30, 2018 December 30, 2017 (1)
ASSETS
Current Assets:
Cash and cash equivalents $ 1,232,900 $ 1,073,200
Restricted cash 105,000 90,000
Receivables, net 1,502,000 1,796,000
Net investment in leases – current 17,046,100 15,332,300
Income tax receivable 2,161,800
Inventories 150,100 97,100
Prepaid expenses 765,800   901,600  
Total current assets 20,801,900 21,452,000
 
Net investment in leases – long-term 26,380,400 25,945,300
Property and equipment, net 630,400 486,800
Goodwill 607,500 607,500
Other assets 396,800   350,400  
$ 48,817,000   $ 48,842,000  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Notes payable, net $ 3,236,100 $ 3,236,100
Accounts payable 1,502,900 2,073,000
Income tax payable 237,200
Accrued liabilities 3,214,400 1,837,300
Discounted lease rentals 1,637,100 570,800
Deferred revenue 3,047,200   3,012,700  
Total current liabilities 12,874,900 10,729,900
 
Long-Term Liabilities:
Line of credit 18,400,000 35,400,000
Notes payable, net 27,223,000 28,841,000
Discounted lease rentals 2,260,900 1,121,600
Deferred revenue 7,294,500 7,297,500
Other liabilities 1,161,300 845,000
Deferred income taxes 360,200   320,500  
Total long-term liabilities 56,699,900 73,825,600
 
Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized, 3,868,526 and 3,843,078 shares issued and outstanding

3,329,600 1,476,200
Retained earnings (accumulated deficit) (24,087,400 ) (37,189,700 )
 
Total shareholders’ equity (deficit) (20,757,800 ) (35,713,500 )
$ 48,817,000   $ 48,842,000  
 

(1) Adjusted for the adoption of ASU 2014-09 under the retrospective method.

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

                       
Quarter Ended   Six Months Ended
June 30, 2018  

July 1, 2017 (1)

  June 30, 2018   July 1, 2017 (1)
REVENUE:    
Royalties $ 11,821,000 $ 11,094,400 $ 22,870,000 $ 21,548,400
Leasing income 4,857,100 3,946,600 10,385,900 9,806,200
Merchandise sales 704,900 537,100 1,481,800 1,285,400
Franchise fees 378,100 468,800 779,000 837,400
Other 398,700   382,800   804,100   763,200  
Total revenue 18,159,800 16,429,700 36,320,800 34,240,600
COST OF MERCHANDISE SOLD 681,000 499,100 1,423,500 1,214,100
LEASING EXPENSE 495,800 660,600 1,050,700 1,932,000
PROVISION FOR CREDIT LOSSES 109,000 (11,500 ) 204,000 (12,900 )
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 6,799,300   6,468,400   13,493,700   12,980,900  
Income from operations 10,074,700 8,813,100 20,148,900 18,126,500
INTEREST EXPENSE (657,900 ) (446,300 ) (1,401,700 ) (945,400 )
INTEREST AND OTHER INCOME (EXPENSE) (11,300 ) 100   (12,300 ) 1,900  
Income before income taxes 9,405,500 8,366,900 18,734,900 17,183,000
PROVISION FOR INCOME TAXES (2,262,500 ) (2,836,200 ) (4,631,500 ) (6,101,500 )
NET INCOME $ 7,143,000   $ 5,530,700   $ 14,103,400   $ 11,081,500  
EARNINGS PER SHARE – BASIC $ 1.85   $ 1.32   $ 3.66   $ 2.65  
EARNINGS PER SHARE – DILUTED $ 1.73   $ 1.23   $ 3.42   $ 2.48  
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC 3,858,446   4,201,982   3,852,880   4,184,558  
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED 4,133,535   4,483,647   4,129,055   4,467,072  
 

(1) Adjusted for the adoption of ASU 2014-09 under the retrospective method.

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XILAM : CHIFFRE D’AFFAIRES 1er SEMESTRE 2018 : +50%

PARIS–()–Regulatory News:

Le chiffre d’affaires consolidé du 1er semestre 2018 du Groupe Xilam (Paris:XIL) s’établit à 13 866 milliers d’euros, en progression de 50%. Cette évolution favorable constitue une excellente performance. Pour rappel, le Groupe affichait déjà une progression de 54% au premier semestre 2017. Le chiffre d’affaires de cette première partie de l’exercice se décompose comme suit.

En milliers d’euros   30.06.2018(1)   30.06.2017  

Variation

Nouvelles productions   8 465   4 571   +85%
Catalogue   5 385   4 652   +16%
Autres   16   16   +0%
Chiffre d’affaires et subventions   13 866   9 239   +50%

(1) données non auditées

Succès remarquable des nouvelles productions : +85%

La très forte croissance enregistrée sur la période est portée par les deux principales activités, Nouvelles Productions et Catalogue.

Sur les Nouvelles Productions, les livraisons du semestre ont généré un chiffre d’affaires record de 8 465 milliers d’euros, en progression de 85% par rapport au premier semestre 2017, confortant Xilam dans sa position de studio majeur de l’animation en Europe.

Le chiffre d’affaires Catalogue est en progression de 16% par rapport au premier semestre 2017, à nouveau soutenu par les opérateurs historiques et les plateformes numériques, en France comme à l’international.

Un rythme de livraison soutenu

Grâce à la montée en puissance de ses capacités de production ces dernières années, Xilam a pu livrer 37 demi-heures de programme sur le semestre, et a ainsi achevé la production de l’ensemble des épisodes de :

  • la cinquième saison d’Oggy et les Cafards, préachetée notamment par Gulli en France, Cartoon Network et Netflix à l’international ; cette saison s’est d’ores et déjà classée dans le top audiences des grands diffuseurs associés à la marque.
  • Paprika, première série préscolaire du groupe, préachetée notamment par France Télévisions, Disney Channel et Netflix. Les premiers lancements en France, en Italie et en Australie sont d’ores et déjà très prometteurs.
  • La deuxième saison de Magic, préachetée par Gulli en France, Discovery et Amazon à l’international, dont le lancement en diffusion interviendra à la fin de l’année.
  • Si j’étais un animal, série documentaire animalière spécialement conçue pour les enfants, préachetée notamment par France Télévisions et Netflix, et dont le niveau de préventes à l’international augure d’une belle longévité de catalogue.

Un catalogue dense conduisant à un nouveau record du chiffre d’affaires catalogue

Le semestre est à nouveau marqué par la performance historique du catalogue, dont les ventes affichent encore une progression de 16%.

Les revenus YouTube affichent quant à eux une progression de 73%, soutenus par près de 1,9 milliard de vidéos vues sur la période, confirmant le positionnement de Xilam parmi les tout premiers fournisseurs de programmes d’animation de la plus importante plateforme de diffusion mondiale.

Cette croissance est notamment portée par le succès des séries Oggy et les Cafards et Zig et Sharko, le nombre de vidéos vues de cette dernière faisant désormais jeu égal avec celui d’Oggy et les cafards.

Les autres propriétés du Groupe ont également contribué à la croissance des ventes en France, en Italie et en Inde, à l’instar des deux saisons de la série Daltons.

Vers des ventes record en 2018

Après ce premier semestre réussi, les livraisons de nouvelles productions se poursuivront au cours du second semestre à un rythme soutenu, et les ventes catalogue devraient être marquées par une nouvelle progression, confirmant ainsi la poursuite vigoureuse de la croissance.

Mr. Magoo, Zig et Sharko 3, Coach me if you can : succès mondiaux en perspective

Le deuxième semestre sera marqué par la livraison des premiers épisodes des séries Mr. Magoo, Zig et Sharko 3 et Coach me if you can :

  • Mr. Magoo, la série adaptée du célèbre personnage américain des années 50 (qui a remporté plusieurs oscars), affiche d’ores et déjà un niveau de préventes sans précédent dans l’histoire de Xilam, puisqu’elle est déjà assurée d’une diffusion dans au moins 150 pays.
  • La troisième saison de Zig et Sharko, très attendue et largement prévendue, devrait à nouveau renforcer la puissance de la propriété dans le monde entier, plaçant ainsi Zig et Sharko au coude à coude avec Oggy et les Cafards.
  • Coach me if you can : une création originale du studio Xilam qui, sur le thème du football, devrait rayonner dans le monde entier et dont la diffusion montera en puissance à la fin 2019 pour culminer à l’occasion de l’Euro 2020.

Au regard de ces perspectives très favorables, Xilam est confiant quant à sa capacité à afficher un nouveau record d’activité sur l’ensemble de l’exercice.

Xilam travaille également sur le développement des séries Petit Méchant Loup (un nouveau programme préscolaire) et les fabuleuses aventures du prince Moka (une nouvelle comédie), confirmant ainsi son intention d’atteindre un niveau de livraison de 100 demi-heures par an à compter de 2020.

XILAM fait ainsi la preuve de sa capacité croissante à créer, produire et distribuer des programmes d’animation de haut niveau et à les imposer de plus en plus rapidement sur les plus grandes plateformes de diffusion mondiale, conférant à ces programmes une très belle valeur d’actif à long terme dont elle demeure seule propriétaire.

NB : Le groupe a mis en œuvre la norme IFRS 15 – Produits des activités ordinaires tirés des contrats conclus avec des clients, et présente ici le chiffre d’affaires 2018 après application de cette nouvelle norme. En appliquant la même méthode de reconnaissance du revenu qu’en 2017, le chiffre d’affaires du premier semestre 2018 aurait été de 8 094 milliers d’euros sur l’activité Nouvelles Productions et 4 771 sur l’activité catalogue. Le Groupe ayant fait le choix de la méthode du rattrapage cumulatif, les états financiers du premier semestre 2018 et de l’année 2018 seront retraités en annexe des effets de l’application de cette nouvelle norme.

A propos de Xilam

Studio majeur de l’animation européenne, Xilam crée, produit et distribue des programmes originaux destinés aux enfants et à toute la famille, pour la télévision, le cinéma et les plateformes numériques.

Fondée en 1999 par Marc du Pontavice, Xilam dispose d’un catalogue de plus de 2 000 épisodes et de 3 longs métrages, dont certains succès incontournables comme Oggy et les cafards, Zig & Sharko, Les Dalton et sa toute première série préscolaire : Paprika.

Diffusé dans plus de 190 pays sur les plus grandes chaînes de télévision et plateformes numériques, cumulant notamment sur YouTube plus de 300 millions de vidéos vues par mois, ce catalogue de programmes fait ainsi de Xilam l’un des premiers fournisseurs mondiaux d’animation.

Xilam emploie plus de 400 personnes, dont 300 artistes, répartis sur ses quatre studios à Paris, Lyon, Angoulême et Hô-Chi-Minh Ville au Vietnam.

Xilam est cotée sur Euronext Paris Compartiment B
Eligibilité PEA
Eligibilité SRD long
Code ISIN : FR0004034072/ Mnémo : XIL

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LICT Corporation Reports Second Quarter 2018 Results

RYE, N.Y.–()–LICT Corporation (“LICT” or the “Company”; OTC Pink®: LICT) reports financial results for the second quarter ended June 30, 2018.

SECOND QUARTER RESULTS – In 2018, LICT’s second quarter revenues increased by $0.9 million, or 3.5%, to $27.5 million compared to $26.6 million for the corresponding quarter in 2017. Non-regulated revenues gained 9.8%, to $12.6 million from the prior year’s $11.5 million due to increased broadband and competitive local exchange carrier (“CLEC”) revenues. Regulated revenues decreased slightly by 1.3%, to $14.9 million in the second quarter of 2018 from the prior year’s $15.1 million.

EBITDA before corporate costs was $12.8 million as compared to $12.2 million in the previous year’s second quarter, a 5.2% increase. Non-regulated EBITDA, including affiliate distributions, rose 14.6% to $5.6 million, from $4.9 million, while regulated EBITDA decreased slightly to $7.2 million, from $7.3 million.

ALTERNATIVE – CONNECT AMERICA COST MODEL” (“A-CAM”) PROGRAM – Effective January 1, 2017, ten of LICT’s rural telephone companies elected to participate in the FCC’s A-CAM program. The A-CAM program is designed to speed and expand the deployment of broadband capacities throughout the nation’s rural areas and replaced two prior USF mechanisms for companies electing A-CAM. During 2018, the FCC expanded the A-CAM program for companies whose support was initially capped and offered the LICT companies an additional $2.9 million in annual A-CAM funding, which is retroactive to January 1, 2017. LICT expects to receive an additional $5.8 million from the expanded A-CAM program in 2018, $2.9 million of which relates to the twelve months of 2017. Through June 30, 2018, no A-CAM revenues from the expanded program have been recorded. Funding is expected to begin in the third quarter of 2018.

FULL YEAR RESULTS – Bolstered by the additional A-CAM revenues, the Company forecasts that revenues for 2018 will approximate $116 million and EBITDA before corporate costs, charitable contributions and non-operating income will approximate $57 million, of which $54 million is recurring. The previous estimates were $110 million and $50 million, respectively.

LIQUIDITY EVENT FROM INVESTMENT– We recorded, in other income, in the second quarter of 2018, a gain from the partial proceeds from the sale of assets in a minority position we own, this resulted in an increase in earnings per share of $120, after tax effects.

EARNINGS PER SHARE – Diluted earnings per share, excluding the spectrum gain during the second quarter were $248 per share in 2018 as compared to $180 per share in 2017 ($368 per share after including this non-recurring gain). Shares outstanding at June 30, 2018, were 20,304 versus 20,509 at December 31, 2017.

BALANCE SHEET – Our net debt was $12.4 million at June 30, 2018, as compared to $23.9 million on December 31, 2017.

CEO SEARCH – As previously announced, we are searching for a successor to Mario J. Gabelli as Chief Executive Officer of LICT. The individual should have knowledge of broadband and, in particular, of rural communities, as well as opportunities to serve colleges, universities, hospitals, small businesses and residences. Mr. Gabelli will continue to serve as Executive Chairman upon the completion of the search.

SHAREHOLDER DESIGNATED CHARITABLE CONTRIBUTION PROGRAM — On April 30, 2018 the Company announced it was continuing its shareholder Charitable Contribution Program in 2018 for all registered shareholders. The program was originally adopted in 2016 and all registered shareholders as of July 20, 2018, will be eligible to designate charities to which the company will make a donation of $100 per share on behalf of the shareholder. Subsequent to July 27, 2018, we will send a letter to each registered shareholder, requesting their designated 501 (c) (3) organization. During 2017, the Company conducted a similar Shareholder Designated Contribution Program, also at $100 per share, and charitable contributions totaled $1.2 million.

CONNECT AMERICA FUND II (“CAF II”) Reverse Auction 903 – The Company is an accepted bidder in the FCC Auction 903 – CAF II. In this Auction, the FCC is providing qualified bidders the right to receive annual support payments for ten years in exchange for a bidder’s commitment to provide specified levels of broadband service to certain rural areas of the United States that are currently unserved or under-served. In the Auction, which is scheduled to begin on July 24, 2018, bidders bid for declining amounts of annual support until the Auction meets its specified target level of approximately $200 million.

TAX CUTS AND JOBS ACT – On December 22, 2017, the United States Congress passed the Tax Cuts and Jobs Act of 2017 (“Act”). Two aspects of this Act significantly impacted LICT: (a) reducing the Federal corporate income tax rate to 21%, from LICT’s 35% 2017 rate, (b) 100% expensing of capital expenditures through 2023. As previously reported, the change in the Federal tax rate reduced our liability for deferred income taxes at the end of 2017 by $7.1 million, and lower over effective tax rate in the first half of 2018 to 26.4%, from 39.5% in the first half of 2017.

GROWING THE COMPANY – The Board of Directors and management have implemented measures which have improved liquidity and reduced the Company’s debt position. At this time, the Board continues to re-evaluate its acquisition activity and related refinancing alternatives.

CAPITAL EXPENDITURES – In the first half of 2018, capital expenditures were $9.9 million, of which $5.6 million was for non-regulated activities and $4.3 million for regulated activities. In order to expand the Company’s non-regulated fiber initiatives and provide a high level of broadband to our customers in the rural areas of the United States, we are expecting capital expenditures of $21 million in 2018. This capital enables us to offer enhanced broadband speeds and will increase the overall fiber route miles in our network. As of June 30, 2018, LICT operations deployed 4,511 miles of fiber optic cable, 12,042 miles of copper cable, and 695 miles of coaxial cable.

SHARE REPURCHASES – During the six months ended June 30, 2018, the Company repurchased 240 shares for $2.9 million, with an average price of $11,997 per share. In addition, in the first quarter of 2018, 35 shares were issued under the Company’s Restricted Stock Awards program. As of June 30, 2018, 20,304 shares were outstanding.

OPERATING STATISTICS – As of June 30, 2018, the Company’s DSL penetration in its franchised telephone service territories, based on its total Incumbent Local Exchange Carrier (“ILEC”) voice lines, was 80.9%, compared to 79.5% as of December 31, 2017. Our summary operating statistics are as follows:

       
Dec. 31, Percent
Jun. 30, Increase Increase
2018   2017   (Decrease)   (Decrease)

Broadband lines

32,878   31,521   1,357     4.3 %
Voice Lines
ILEC 26,403 26,655 (252 ) (0.9 %)
CLEC 7,229   7,006   223     3.2 %
Total 33,632   33,661   (29 )   (0.1 %)
Video Subscribers 5,733   5,985   (252 )   (4.2 %)
Revenue Generating Units 72,243   71,167   1,076     1.5 %
 

This release contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation anticipated financial results, financing, capital expenditures and corporate transactions. It should be recognized that such information is based upon certain assumptions, projections and forecasts, including without limitation, business conditions and financial markets, regulatory and other approvals, and the cautionary statements set forth in documents filed by LICT on its website, www.lictcorp.com. As a result, there can be no assurance that any possible transactions will be accomplished or be successful, or that financial targets will be met. Such forward-looking information is subject to uncertainties, risks and inaccuracies, which could be material.

LICT Corporation is a holding company with subsidiaries in broadband and other telecommunications services that actively seeks acquisitions, principally in its existing business areas.

LICT Corporation is listed on the OTC Pink® under the symbol LICT. For further information visit our website at http://www.lictcorp.com.

Release 18-8

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Community Trust Bancorp, Inc. Reports Earnings for the Second Quarter 2018

PIKEVILLE, Ky.–()–Community Trust Bancorp, Inc. (NASDAQ: CTBI):

                   
Earnings Summary
(in thousands except per share data)     2Q

2018

    1Q

2018

    2Q

2017

    6 Months

2018

    6 Months

2017

Net income $11,599 $15,814 $11,541 $27,413 $22,818
Earnings per share $0.66 $0.89 $0.65 $1.55 $1.29
Earnings per share – diluted $0.66 $0.89 $0.65 $1.55 $1.29
 
Return on average assets 1.11% 1.55% 1.14% 1.33% 1.15%
Return on average equity 8.56% 12.00% 8.97% 10.26% 9.00%
Efficiency ratio 66.05% 59.24% 59.32% 62.67% 60.23%
Tangible common equity 11.51% 11.43% 11.19%
 
Dividends declared per share $0.33 $0.33 $0.32 $0.66 $0.64
Book value per share $30.59 $30.33 $29.14
 
Weighted average shares 17,687 17,671 17,626 17,679 17,621
Weighted average shares – diluted 17,703 17,687 17,645 17,695 17,641
 

Community Trust Bancorp, Inc. (NASDAQ: CTBI) reports earnings for the second quarter 2018 of $11.6 million, or $0.66 per basic share, compared to $15.8 million, or $0.89 per basic share, earned during the first quarter 2018 and $11.5 million, or $0.65 per basic share, earned during the second quarter 2017. Earnings for the six months ended June 30, 2018 were $27.4 million, or $1.55 per basic share, compared to $22.8 million or $1.29 per basic share earned during the six months ended June 30, 2017.

As disclosed by CTBI in Annual Reports on Form 10-K for the years ended December 31, 2017 and 2016, and previous Quarterly Reports on Form 10-Q, CTB will be required to make certain customer reimbursements related to two deposit add-on products. CTBI further disclosed in such filings that management had established a related accrual, and that the actual reimbursement amount could materially vary from the amount management had evaluated as most likely. On June 14, 2018, CTBI filed a Form 8-K disclosing an increase in the accrual from $1.2 million to $4.75 million to reflect a change in the amount management determined to be the most likely amount as a result of communications with regulatory agency representatives. As a result of the increased accrual, a charge to earnings was reflected in the second quarter 2018 financial results of $2.8 million after-tax, or $0.16 per share.

2nd Quarter 2018 Highlights

  • Net interest income for the quarter of $35.1 million was an increase of $0.6 million, or 1.6%, from first quarter 2018 and $0.9 million, or 2.7%, from prior year second quarter.
  • Provision for loan losses for the quarter ended June 30, 2018 increased $1.0 million from prior quarter but decreased $0.8 million from prior year same quarter.
  • Our loan portfolio increased $50.8 million, an annualized 6.5%, during the quarter and $81.7 million, or 2.6%, from June 30, 2017.
  • Net loan charge-offs for the quarter ended June 30, 2018 were $1.3 million, or 0.17% of average loans annualized, compared to $1.9 million, or 0.25%, experienced for the first quarter 2018 and $1.3 million, or 0.18%, for the second quarter 2017.
  • Nonperforming loans at $22.0 million decreased $3.9 million from March 31, 2018 and $6.0 million from June 30, 2017. Nonperforming assets at $52.3 million decreased $5.7 million from March 31, 2018 and $8.3 million from June 30, 2017.
  • Deposits, including repurchase agreements, decreased $6.3 million during the quarter but increased $195.4 million from June 30, 2017.
  • Noninterest income for the quarter ended June 30, 2018 of $13.7 million was an increase of $0.4 million, or 3.2%, from prior quarter and $1.4 million, or 11.6%, from prior year same quarter. The increase in noninterest income was primarily due to a gain on the sale of a partnership interest resulting from a low income housing tax credit recapture and an increase in deposit service charges.
  • Noninterest expense for the quarter ended June 30, 2018 of $32.4 million increased $3.8 million, or 13.1%, from prior quarter, and $4.9 million, or 17.7%, from prior year same quarter. The variance in noninterest expense from prior quarter was primarily due to the above mentioned increase in the customer reimbursement accrual. Additionally, personnel expense increased from prior year same quarter with increases in bonuses and the cost of group medical and life insurance.
  • Income tax expense continues to be positively impacted by the change in the corporate income tax rate from 35% to 21%. We utilize various tax exempt investments and loans, including municipal bonds, bank owned life insurance, and low income housing projects, to lower our effective income tax rate. With the current tax laws, our effective tax rate for the six months ended June 30, 2018 was 16% compared to 28% for the six months ended June 30, 2017.

Net Interest Income

Net interest income for the quarter of $35.1 million was an increase of $0.6 million, or 1.6%, from first quarter 2018 and $0.9 million, or 2.7%, from prior year second quarter. Our net interest margin at 3.61% decreased 4 basis points from prior quarter and 7 basis points from prior year same quarter, while our average earning assets increased $57.8 million and $145.5 million, respectively, during those same periods. Our yield on average earning assets increased 3 basis points from prior quarter and 18 basis points from prior year same quarter, and our cost of funds increased 11 basis points from prior quarter and 37 basis points from prior year same quarter. Our ratio of average loans to deposits, including repurchase agreements, was 88.1% for the quarter ended June 30, 2018 compared to 88.6% for the quarter ended March 31, 2018 and 89.9% for the quarter ended June 30, 2017.

Noninterest Income

Noninterest income for the quarter ended June 30, 2018 of $13.7 million was an increase of $0.4 million, or 3.2%, from prior quarter and $1.4 million, or 11.6%, from prior year same quarter. The increase in noninterest income was primarily due to a gain on the sale of a partnership interest totaling $1.0 million related to one of our tax credit investments. As a result of the sale of this interest, a portion of the tax credits previously claimed was recaptured during the current quarter totaling $0.8 million, which was recorded in income tax expense. The variance in noninterest income from prior quarter was also impacted by a $0.3 million increase in deposit service charges and a $0.3 million decrease in losses on the sale of securities, offset by a $1.0 million decrease in bank owned life insurance income and a $0.2 million decrease in loan related fees as a result of fluctuations in the fair value adjustments of our mortgage servicing rights. The increase from prior year same quarter was also positively impacted by a $0.2 million increase in trust revenue. Additionally, noninterest income for the second quarter 2017 included a $0.6 million gain on the repurchase of trust preferred securities. Noninterest income for the six months ended June 30, 2018 was a $3.2 million, or 13.2%, increase from prior year.

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2018 of $32.4 million increased $3.8 million, or 13.1%, from prior quarter, and $4.9 million, or 17.7%, from prior year same quarter. The variance in noninterest expense from prior quarter was primarily due to the above mentioned $3.6 million increase in the customer reimbursement accrual. Personnel expense increased from prior year same quarter with increases in bonuses ($0.7 million) and the cost of group medical and life insurance ($0.4 million). Noninterest expense for the six months ended June 30, 2018 was $61.1 million, a $5.9 million or 10.7% increase over the first six months of 2017, primarily due to the same items detailed above.

Balance Sheet Review

CTBI’s total assets at $4.2 billion increased $9.4 million, or 0.9% annualized, from March 31, 2018 and $124.1 million, or 3.0%, from June 30, 2017. Loans outstanding at June 30, 2018 were $3.2 billion, an increase of $50.8 million, or an annualized 6.5%, from March 31, 2018 and $81.7 million, or 2.6%, from June 30, 2017. We experienced an increase during the quarter of $16.1 million in the commercial loan portfolio, $5.7 million in the residential loan portfolio, $20.2 million in the indirect loan portfolio, and $8.8 million in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $19.1 million, or an annualized 12.7%, from March 31, 2018 and $24.8 million, or 4.1%, from June 30, 2017. Deposits, including repurchase agreements, at $3.6 billion decreased $6.3 million, or an annualized 0.7%, from March 31, 2018 but increased $195.4 million, or 5.8%, from June 30, 2017.

Shareholders’ equity at June 30, 2018 was $542.2 million, a 3.5% annualized increase from the $537.5 million at March 31, 2018 and a 5.3% increase from the $514.9 million at June 30, 2017. CTBI’s annualized dividend yield to shareholders as of June 30, 2018 was 2.64%.

Asset Quality

CTBI’s total nonperforming loans, not including troubled debt restructurings, were $22.0 million, or 0.69% of total loans, at June 30, 2018 compared to $25.9 million, or 0.83% of total loans, at March 31, 2018 and $28.0 million, or 0.91% of total loans, at June 30, 2017. Accruing loans 90+ days past due decreased $1.8 million from prior quarter and $1.2 million from June 30, 2017. Nonaccrual loans decreased $2.1 million during the quarter and $4.8 million from June 30, 2017. Accruing loans 30-89 days past due at $23.5 million was an increase of $6.6 million from March 31, 2018 and $8.3 million from June 30, 2017. The increase in past due loans 30-89 days is due to one relationship which is well-collateralized, and no loss is expected. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss. Impaired loans, loans not expected to meet contractual principal and interest payments other than insignificant delays, at June 30, 2018 totaled $46.7 million, a $1.5 million decrease from the $48.2 million at March 31, 2018 and a $4.0 million decrease from the $50.7 million at June 30, 2017.

Our level of foreclosed properties at $30.3 million at June 30, 2018 was a $1.7 million decrease from the $32.0 million at March 31, 2018 and a $2.4 million decrease from the $32.6 million at June 30, 2017. Sales of foreclosed properties for the quarter ended June 30, 2018 totaled $2.4 million while new foreclosed properties totaled $1.6 million. At June 30, 2018, the book value of properties under contracts to sell was $1.9 million; however, the closings had not occurred at quarter-end. Write-downs on foreclosed properties for the second quarter 2018 totaled $0.9 million compared to $0.5 million in the first quarter 2018 and $1.4 million in the second quarter 2017.

Net loan charge-offs for the quarter ended June 30, 2018 were $1.3 million, or 0.17% of average loans annualized, compared to $1.9 million, or 0.25%, experienced for the first quarter 2018 and $1.3 million, or 0.18%, for the second quarter 2017. Of the net charge-offs for the quarter, $0.5 million were in commercial loans, $0.4 million were in indirect auto loans, $0.2 million were in residential loans, and $0.2 million were in consumer direct loans. Allocations to loan loss reserves were $1.9 million for the quarter ended June 30, 2018 compared to $0.9 million for the quarter ended March 31, 2018 and $2.8 million for the quarter ended June 30, 2017. Our reserve coverage (allowance for loan and lease loss reserve to nonperforming loans) at June 30, 2018 was 162.6% compared to 135.6% at March 31, 2018 and 132.6% at June 30, 2017. Our loan loss reserve as a percentage of total loans outstanding remained at 1.13% from March 31, 2018 to June 30, 2018, down from the 1.20% at June 30, 2017.

Forward-Looking Statements

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Community Trust Bancorp, Inc.’s (“CTBI”) actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could.” These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; results of various investment activities; the effects of competitors’ pricing policies, changes in laws and regulations, competition, and demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; and the resolution of legal proceedings and related matters. In addition, the banking industry in general is subject to various monetary, operational, and fiscal policies and regulations, which include, but are not limited to, those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, and state regulators, whose policies and regulations could affect CTBI’s results. These statements are representative only on the date hereof, and CTBI undertakes no obligation to update any forward-looking statements made.

Community Trust Bancorp, Inc., with assets of $4.2 billion, is headquartered in Pikeville, Kentucky and has 70 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, four banking locations in northeastern Tennessee, four trust offices across Kentucky, and one trust office in Tennessee.

Additional information follows.

 
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
June 30, 2018
(in thousands except per share data and # of employees)
               
Three Three Three Six Six
Months Months Months Months Months
Ended Ended Ended Ended Ended
June 30, 2018 March 31, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Interest income $ 42,025 $ 40,580 $ 38,411 $ 82,605 $ 75,179
Interest expense   6,877     5,989     4,171     12,866     7,849  
Net interest income 35,148 34,591 34,240 69,739 67,330
Loan loss provision 1,929 946 2,764 2,875 3,993
 
Gains on sales of loans 304 279 251 583 507
Deposit service charges 6,480 6,221 6,199 12,701 12,159
Trust revenue 2,856 2,958 2,649 5,814 5,235
Loan related fees 919 1,144 773 2,063 1,778
Securities gains (losses) 2 (288 ) 18 (286 ) 10
Other noninterest income   3,179     2,996     2,421     6,175     4,201  
Total noninterest income 13,740 13,310 12,311 27,050 23,890
 
Personnel expense 15,422 15,619 14,044 31,041 28,968
Occupancy and equipment 2,770 2,833 2,720 5,603 5,533
Data processing expense 1,634 1,636 1,757 3,270 3,546
FDIC insurance premiums 279 314 315 593 607
Other noninterest expense   12,334     8,279     8,730     20,613     16,556  
Total noninterest expense 32,439 28,681 27,566 61,120 55,210
 
Net income before taxes 14,520 18,274 16,221 32,794 32,017
Income taxes   2,921     2,460     4,680     5,381     9,199  
Net income $ 11,599   $ 15,814   $ 11,541   $ 27,413   $ 22,818  
 
Memo: TEQ interest income $ 42,253 $ 40,804 $ 38,910 $ 83,057 $ 76,187
 
Average shares outstanding 17,687 17,671 17,626 17,679 17,621
Diluted average shares outstanding 17,703 17,687 17,645 17,695 17,641
Basic earnings per share $ 0.66 $ 0.89 $ 0.65 $ 1.55 $ 1.29
Diluted earnings per share $ 0.66 $ 0.89 $ 0.65 $ 1.55 $ 1.29
Dividends per share $ 0.33 $ 0.33 $ 0.32 $ 0.66 $ 0.64
 
Average balances:
Loans $ 3,131,964 $ 3,111,116 $ 3,027,044 $ 3,121,597 $ 2,990,865
Earning assets 3,928,066 3,870,216 3,782,548 3,899,301 3,743,834
Total assets 4,196,693 4,144,105 4,052,791 4,170,544 4,014,155
Deposits, including repurchase agreements 3,556,340 3,511,260 3,366,489 3,533,925 3,364,651
Interest bearing liabilities 2,818,168 2,782,467 2,731,147 2,800,416 2,696,164
Shareholders’ equity 543,513 534,278 515,834 538,921 511,560
 
Performance ratios:
Return on average assets 1.11 % 1.55 % 1.14 % 1.33 % 1.15 %
Return on average equity 8.56 % 12.00 % 8.97 % 10.26 % 9.00 %
Yield on average earning assets (tax equivalent) 4.31 % 4.28 % 4.13 % 4.30 % 4.10 %
Cost of interest bearing funds (tax equivalent) 0.98 % 0.87 % 0.61 % 0.93 % 0.59 %
Net interest margin (tax equivalent) 3.61 % 3.65 % 3.68 % 3.63 % 3.68 %
Efficiency ratio (tax equivalent) 66.05 % 59.24 % 59.32 % 62.67 % 60.23 %
 
Loan charge-offs $ 2,526 $ 2,977 $ 2,189 $ 5,503 $ 4,680
Recoveries   (1,179 )   (1,069 )   (845 )   (2,248 )   (1,887 )
Net charge-offs $ 1,347 $ 1,908 $ 1,344 $ 3,255 $ 2,793
 
Market Price:
High $ 53.00 $ 50.70 $ 46.90 $ 53.00 $ 50.40
Low $ 43.95 $ 43.00 $ 41.07 $ 43.00 $ 41.07
Close $ 49.95 $ 45.20 $ 43.75 $ 49.95 $ 43.75
 
As of As of As of
June 30, 2018 March 31, 2018 June 30, 2017
Assets:
Loans $ 3,169,042 $ 3,118,241 $ 3,087,342
Loan loss reserve   (35,771 )   (35,189 )   (37,133 )
Net loans 3,133,271 3,083,052 3,050,209
Loans held for sale 1,093 1,145 4,624
Securities AFS 585,764 604,890 610,368
Securities HTM 659 659 858
Other equity investments 22,814 22,814 22,814
Other earning assets 150,880 159,608 90,711
Cash and due from banks 54,987 44,792 51,224
Premises and equipment 46,483 45,860 47,036
Goodwill and core deposit intangible 65,490 65,490 65,543
Other assets   143,745     167,427     137,726  
Total Assets $ 4,205,186   $ 4,195,737   $ 4,081,113  
 
Liabilities and Equity:
NOW accounts $ 51,563 $ 55,034 $ 48,476
Savings deposits 1,156,601 1,131,371 1,070,706
CD’s >=$100,000 694,641 705,978 592,794
Other time deposits   587,078     601,942     610,770  
Total interest bearing deposits 2,489,883 2,494,325 2,322,746
Noninterest bearing deposits   819,525     825,345     782,864  
Total deposits 3,309,408 3,319,670 3,105,610
Repurchase agreements 248,781 244,822 257,208
Other interest bearing liabilities 68,121 67,241 167,455
Noninterest bearing liabilities   36,701     26,515     35,925  
Total liabilities 3,663,011 3,658,248 3,566,198
Shareholders’ equity   542,175     537,489     514,915  
Total Liabilities and Equity $ 4,205,186   $ 4,195,737   $ 4,081,113  
 
Ending shares outstanding 17,725 17,721 17,671
Memo: Market value of HTM securities $ 660 $ 660 $ 858
 
30 – 89 days past due loans $ 23,488 $ 16,914 $ 15,234
90 days past due loans 7,189 9,027 8,362
Nonaccrual loans 14,812 16,923 19,651
Restructured loans (excluding 90 days past due and nonaccrual) 56,814 56,119 53,786
Foreclosed properties 30,262 32,004 32,638
Other repossessed assets 83 118 45
 
Common equity Tier 1 capital 15.80 % 15.73 % 14.91 %
Tier 1 leverage ratio 13.11 % 13.14 % 12.72 %
Tier 1 risk-based capital ratio 17.67 % 17.62 % 16.81 %
Total risk based capital ratio 18.84 % 18.78 % 18.05 %
Tangible equity to tangible assets ratio 11.51 % 11.43 % 11.19 %
FTE employees 988 986 1,000

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Long Island’s Gold Coast Bancorp Reports 7% Deposit and 5% Loan Growth in 2018

ISLANDIA, N.Y.–()–Gold Coast Bancorp, Inc. (OTC:GLDT) (“Gold Coast”), the holding company of Gold Coast Bank, known as “Long Island’s Community Bank”sm, (the”Bank”) today reported net income for the quarter ended June 30, 2018 of $504,000, or $0.13 per share compared with net income of $645,000, or $0.16 per share for the quarter ended June 30, 2017. Return on average assets and return on average equity was 0.40 percent and 4.76 percent, respectively, in the second quarter of 2018, compared to 0.57 percent and 6.24 percent in the 2017 second quarter. The decrease in net income was largely due to increases in staff to support the Bank’s growth, which was facilitated by the Company’s Subordinated Debt offering in September 2017.

For the six months ended June 30, 2018, Gold Coast earned $1,035,000, or $0.26 per share compared with net income of $1,160,000, or $0.29 per share for the same period in 2017. Return on average assets and return on average equity was 0.42 percent and 4.69 percent, respectively, for the six months ended June 30, 2018, compared to 0.53 percent and 5.70 percent, respectively, for the six months ended June 30, 2017. The decrease in net income in 2018, resulting from the Bank’s expansion, was partially offset by an increase in net interest income during the period.

Total assets at June 30, 2018 were $498 million, an increase of $28 million, or 6 percent from total assets of $470 million at December 31, 2017. Total assets increased $36 million, or 8 percent from $462 million at June 30, 2017.

Deposits at June 30, 2018 totaled $420 million, an increase of $28 million, or 7 percent from $392 million at December 31, 2017. Deposits totaled $417 million at June 30, 2017. Non-interest bearing demand deposits were 23 percent of the total deposit portfolio at June 30, 2018, compared to 25 percent at both December 31, 2017 and June 30, 2017, respectively. FHLB borrowings were $20 million at both June 30, 2018 and December 31, 2017, respectively. There were no FHLB borrowings outstanding at June 30, 2017.

Total loans outstanding at June 30, 2018 were $402 million, an increase of $21 million, or 6 percent from $381 million at December 31, 2017 and an increase of $37 million, or 10 percent from $365 million at June 30, 2017. Loan originations and draws were $19 million in the second quarter of 2018, compared to $41 million in the second quarter of 2017. The Bank experienced loan repayments and pay downs of $8 million in the second quarter of 2018 compared to $20 million in the second quarter of 2017. Loan originations and draws were $50 million in the six months ended June 30, 2018 compared to $72 million in the same period in 2017. The Bank experienced loan repayments and pay downs of $29 million in the six months ended June 30, 2018, compared to $48 million in the same period in 2017. The decrease in loan originations and repayments in 2018 was largely due to the decrease in refinancing activity due to the recent increase in market interest rates.

Asset quality continues to remain strong: The Bank’s nonperforming loans were 0.02 percent of gross loans at June 30, 2018. Allowance for loan losses was 0.98 percent of total loans at June 30, 2018.

The Bank remained well capitalized at June 30, 2018, with the following regulatory capital ratios:
– Tier 1 Leverage Capital Ratio of 11.1 percent
– Common Equity Tier 1 Risk-Based Capital and Tier 1 Risk-Based Capital Ratios of 15.1 percent
– Total Risk-Based Capital Ratio of 16.2 percent

At June 30, 2018 book value per share was $10.80, increasing from $10.69 per share at December 31, 2017 and $10.61 per share at June 30, 2017.

Net interest income was $3.5 million in both the second quarter of 2018 and 2017, respectively, largely due to an 11 percent increase in average interest earning assets, offset by a decrease in the net interest margin to 2.78 percent in the second quarter of 2018 compared to 3.08 percent in the second quarter of 2017. The decrease in the net interest margin is largely due to an increase in the cost of funds, primarily due to the issuance of $13.5 million of 6.50% subordinated notes on September 29, 2017. Net interest income grew $256,000, or 4 percent for the six months ended June 30, 2018, compared to the same six month period in 2017, largely due to a 13 percent increase in average interest earning assets, partially offset by a decrease in the net interest margin to 2.86 percent in the most recent six month period compared to 3.12 percent in the 2017 six month period. The decrease in the net interest margin in the 2018 six month period was also largely due to the interest expense associated with the Company’s subordinated notes.

There was no provision for loan losses required in the second quarter of 2018 compared to $114,000 in the second quarter of 2017. The provision for loan losses for the six months ended June 30, 2018 was $80,000 compared to $114,000 for the six months ended June 30, 2017.

Non-interest income was $110,000 in the second quarter of 2018 compared to $141,000 in the second quarter of 2017. Non-interest income was $217,000 for the six months ended June 30, 2018, compared to $240,000 for the six months ended June 30, 2017. Non-interest expense increased $306,000, or 12 percent in the second quarter of 2018 compared to the second quarter of 2017, largely due to the opening of the Bank’s newest branch in Brooklyn and the addition of staff to support the bank’s expanded lending activities in the NYC metropolitan area. Non-interest expense for the six months ended June 30, 2018 increased $611,000, or 12 percent also due to expansion of staff.

John C. Tsunis, Chairman and CEO stated, “Gold Coast is digesting the planned expansion of our personnel infrastructure as we recruit and engage quality and experienced bankers from money center banks that have been attracted to our community/private banking model. We have installed credit trained personnel at our Brooklyn and Setauket branches to bring relationship bankers closer to our markets, encouraging our borrowing customers to include us as a team member adding value while strengthening our relationship. These opportunities are critical as all community banks in our markets have encountered compressed loan margins due to higher deposit costs as well as intense pressure on lending rates for quality loans. We believe the Gold Coast experience will bear dividends as our lending and underwriting process fast track our loan pipeline to the closing table, accelerating interest income to our bottom line. Notwithstanding the intensity of competition for loans and deposits, we believe in participating in the communities we serve, Gold Coast’s current pipeline of quality loans and mortgages will translate to additional income to our bottom line in the third and fourth quarters of 2018. “

About Gold Coast Bancorp, Inc.

Gold Coast Bancorp, Inc. is the holding company for Gold Coast Bank. Headquartered in Islandia with additional branches located in Huntington, Setauket, Farmingdale, Mineola, Southampton and Brooklyn, Gold Coast Bank is a New York State chartered bank whose popularity and reputation stems from the strong, long-term relationships cultivated among its large and diverse customer base. The bank’s deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Gold Coast Bank prides itself on providing businesses and individuals with quality lending and banking services. Fulfilling a unique niche within our metropolitan New York trade area, Gold Coast Bank delivers specialty lending capabilities in a variety of areas that include real estate, equipment finance, and lines of credit for privately owned businesses.

For more information about Gold Coast Bancorp, Inc. and Gold Coast Bank, please visit www.gcbny.com. Our press releases, and other material information published by the Company and the Bank, may be found on our website under the tab “Investor Relations”.

Forward-Looking Statements

This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company’s market area and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

             
Consolidated Balance Sheets
(dollars in thousands, except per share data)
 
(unaudited) (unaudited)
June 30, December 31, June 30,
2018 2017 2017
ASSETS
Total cash and cash equivalents $ 27,571 $ 21,343 $ 38,765
Securities available for sale, at fair value 57,209 56,960 48,158
Securities held to maturity 8,406 8,437 7,468
Loans 402,336 381,452 364,828
Allowance for loan losses   (3,956 )   (3,919 )   (3,547 )
Loans, net 398,380 377,533 361,281
Premises and equipment, net 1,633 1,778 1,984
Other assets   4,703     4,384     4,417  
Total assets $ 497,902   $ 470,435   $ 462,073  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Non-interest bearing $ 97,698 $ 99,153 $ 105,827
Interest bearing   321,863     293,120     311,589  
Total deposits 419,561 392,273 417,416
Borrowings 20,000 20,000
Subordinated debt, net 13,309 13,299
Other liabilities   2,571     2,815     2,954  
Total Liabilities   455,441     428,387     420,370  
Total Shareholders’ Equity   42,461     42,048     41,703  
Total Liabilities and Shareholders’ Equity $ 497,902   $ 470,435   $ 462,073  
 
 
Selected Financial Data (unaudited)
Allowance for loan losses to total loans 0.98 % 1.03 % 0.97 %
Non-performing loans to total loans 0.02 % 0.13 % 0.22 %
Book value per share $ 10.80 $ 10.69 $ 10.61
 
Capital Ratios (unaudited) (1)
Tier 1 leverage ratio 11.10 % 11.39 % 9.19 %
Common equity Tier 1 risk-based capital ratio 15.14 % 15.31 % 11.99 %
Tier 1 risk-based capital ratio 15.14 % 15.31 % 11.99 %
Total risk-based capital ratio 16.21 % 16.40 % 13.00 %
 
(1) Regulatory capital ratios presented on bank-only basis
 
                 
Consolidated Statements of Income (unaudited)
(dollars in thousands, except share and per share data)
 
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
  2018     2017     2018     2017  
Interest income $ 4,831 $ 4,099 $ 9,628 $ 8,004
Interest expense   1,361     627     2,565     1,197  
Net interest income 3,470 3,472 7,063 6,807
Provision for loan losses       114     80     114  
Net interest income after provision for loan losses 3,470 3,358 6,983 6,693
Non interest income 110 141 217 240
Non interest expense   2,918     2,612     5,839     5,228  
Income before income taxes 662 887 1,361 1,705
Income tax expense   158     242     326     545  
Net income (loss) $ 504   $ 645   $ 1,035   $ 1,160  
 
Basic earnings (loss) per share $ 0.13 $ 0.16 $ 0.26 $ 0.29
Diluted earnings (loss) per share $ 0.13 $ 0.16 $ 0.26 $ 0.29
Weighted average common and equivalent
shares outstanding 3,931,634 3,931,634 3,931,634 3,931,634
 
Selected Financial Data (unaudited)
Return on average assets 0.40 % 0.57 % 0.42 % 0.53 %
Return on average equity 4.76 % 6.24 % 4.69 % 5.70 %
Net interest margin 2.78 % 3.08 % 2.86 % 3.12 %
Efficiency ratio 81.51 % 72.29 % 80.21 % 74.19 %
 

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Farmers National Banc Corp. Announces 2018 Second Quarter Financial Results

CANFIELD, Ohio–()–Farmers National Banc Corp. (Farmers) (NASDAQ: FMNB) today reported financial results for the three months ended June 30, 2018.

Net income for the three months ended June 30, 2018 was $8.1 million, or $0.29 per diluted share, which compares to $5.7 million, or $0.21 per diluted share, for the three months ended June 30, 2017 and $7.7 million, or $0.28 per diluted share, for the linked quarter. Annualized return on average assets and return on average equity were 1.47% and 13.28%, respectively, for the three month period ending June 30, 2018, compared to 1.11% and 10.25% for the same three month period in 2017, and 1.45% and 13.03% for the linked quarter. Farmers’ return on average tangible equity (Non-GAAP) also improved to 16.24% for the quarter ended June 30, 2018 compared to 12.77% for the same quarter in 2017 and 15.84% for the linked quarter.

Net income for the six months ended June 30, 2018 was $15.8 million, or $0.57 per diluted share, compared to $11.5 million or $0.42 per diluted share for the same six month period in 2017. Return on average assets and return on average equity were 1.46% and 13.13%, respectively, for the six months ended June 30, 2018, compared to 1.14% and 10.52% for the same period in 2017.

On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. H.R.1, among other things, reduced the corporate income tax rate to 21% effective January 1, 2018. As a result of passage of the new tax law, Farmers effective tax rate decreased from 25.7% for the six months ended June 30, 2017 to 15.7% for the six months ended June 30, 2018. It is important to note that also as a result of the new tax law, Farmers determined that its net deferred tax assets needed to be reduced in the fourth quarter of 2017 by approximately $1.8 million, representing an impact on earnings per share of approximately $0.06 per diluted share for that fourth quarter, based on that quarter’s weighted average diluted shares outstanding of approximately 27.5 million.

Kevin J. Helmick, President and CEO, stated, “We are pleased to report record earnings which are the result of the successful integration of previous mergers, continued strong loan growth, higher levels of noninterest income and a lower effective income tax rate.”

2018 Second Quarter Financial Highlights

  • Loan growth
    Total loans were $1.64 billion at June 30, 2018, compared to $1.51 billion at June 30, 2017, representing an increase of 8.9%. The increase in loans is a direct result of Farmers’ focus on loan growth utilizing a talented lending and credit team, while adhering to a sound underwriting discipline. The increase in loans has occurred in the commercial and commercial real estate, residential real estate and agricultural loan portfolios. Loans now comprise 78.6% of the Bank’s average earning assets for the quarter ended June 30, 2018, an improvement compared to 77.6% for the same period in 2017. This improvement, along with the growth in earning assets, has resulted in a 12.3% increase in loan income in the second quarter of 2018 compared to the same quarter in 2017.
  • Loan quality
    Non-performing assets to total assets remain at a low level, currently at 0.38%. Early stage delinquencies also continue to remain at low levels, at $10.6 million, or 0.65% of total loans, at June 30, 2018. Net charge-offs for the current quarter were $536 thousand, compared to $523 thousand in the same quarter in 2017 and annualized net charge-offs as a percentage of average net loans outstanding is only 0.13% for the quarter ended June 30, 2018. Lending to the energy sector is insignificant and less than 1% of the loan portfolio.
  • Net interest margin
    The net interest margin for the three months ended June 30, 2018 was 3.93%, a 12 basis points decrease from the quarter ended June 30, 2017, but 1 basis point higher than the first quarter of 2018. In comparing the second quarter of 2018 to the same period in 2017, asset yields increased 9 basis points, while the cost of interest-bearing liabilities increased 30 basis points. Most of this increase was the result of higher rates paid on short-term borrowings and time deposits, consistent with increases in the federal funds sold rate. The net interest margin is impacted by the additional accretion as a result of the discounted loan portfolios acquired in the previous mergers, which increased the net interest margin by 5 and 2 basis points for the quarters ended June 30, 2018 and 2017, respectively.
  • Noninterest income
    Noninterest income increased 4.2% to $6.3 million for the quarter ended June 30, 2018 compared to $6.1 million in the same quarter of 2017. Trust fees increased $217 thousand or 14.3% in comparing the second quarter of 2018 to the same quarter in 2017, retirement plan consulting fees increased $66 thousand or 16.5% and investment commissions increased $62 thousand or 24.5%. These increases were offset by a drop in the gains on the sale of mortgage loans of $285 thousand or 32%; however, the current quarter’s income of $606 thousand was $119 thousand or 24% higher than the linked quarter.
  • Noninterest expenses
    Farmers has remained committed to managing its level of noninterest expenses. Total noninterest expenses for the second quarter of 2018 decreased 1.9% to $15.5 million compared to $15.8 million in the same quarter in 2017, primarily a result of decreases in other operating expenses of $136 thousand and merger related costs of $104 thousand. It is important to note that annualized noninterest expenses measured as a percentage of quarterly average assets decreased from 3.08% in the first quarter of 2017 to 2.82% in the first quarter of 2018.
  • Efficiency ratio
    The efficiency ratio for the quarter ended June 30, 2018 improved to 57.31% compared to 60.79% for the same quarter in 2017. The main factors leading to this improvement were the increase in net interest income and noninterest income and a slightly lower level of noninterest expenses relative to average assets as explained in the preceding paragraphs.

2018 Outlook

Mr. Helmick added, “We are encouraged by our financial results for the first half of 2018 and look to use this momentum to sustain strong performance for all of 2018. As always, we will remain focused on delivering for the businesses, families and communities we serve.”

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $2.2 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 41 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, Farmers Trust Company, which operates four trust offices and offers services in the same geographic markets, and National Associates, Inc. Total wealth management assets under care at June 30, 2018 are $2.6 billion. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity and net income excluding costs related to acquisition activities, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures are included in the tables following Consolidated Financial Highlights below.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements can be found in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2017, which has been filed with the Securities and Exchange Commission (SEC) and is available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

             
Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share results) Unaudited
                                 
 
Consolidated Statements of Income For the Three Months Ended   For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, Percent
2018   2018   2017   2017   2017   2018   2017   Change
Total interest income $22,474 $21,282 $21,084 $20,551 $20,042 $43,756 $38,892 12.5%
Total interest expense 2,912   2,336   2,017   1,876   1,669   5,248   2,988   75.6%
Net interest income 19,562 18,946 19,067 18,675 18,373 38,508 35,904 7.3%
Provision for loan losses 750 775 400 950 950 1,525 2,000 -23.8%
Noninterest income 6,306 6,010 6,051 6,058 6,055 12,316 11,942 3.1%
Acquisition related costs 0 25 88 270 104 25 166 -84.9%
Other expense 15,458   15,071   15,311   15,521   15,660   30,529   30,211   1.1%
Income before income taxes 9,660 9,085 9,319 7,992 7,714 18,745 15,469 21.2%
Income taxes 1,587   1,359   4,084   2,009   2,004   2,946   3,976   -25.9%
Net income $8,073   $7,726   $5,235   $5,983   $5,710   $15,799   $11,493   37.5%
 
Average shares outstanding 27,641 27,918 27,941 27,654 27,395 27,610 27,371
Basic and diluted earnings per share 0.29 0.28 0.19 0.22 0.21 0.57 0.42
Cash dividends 1,935 1,935 1,653 1,653 1,353 3,870 2,707
Cash dividends per share 0.07 0.07 0.06 0.06 0.05 0.14 0.10
Performance Ratios
Net Interest Margin (Annualized) 3.93% 3.92% 3.98% 3.96% 4.05% 3.92% 4.03%
Efficiency Ratio (Tax equivalent basis) 57.31% 57.98% 59.13% 59.93% 60.79% 57.64% 59.81%
Return on Average Assets (Annualized) 1.47% 1.45% 0.96% 1.12% 1.11% 1.46% 1.14%
Return on Average Equity (Annualized) 13.28% 13.03% 8.60% 10.15% 10.25% 13.13% 10.52%
Dividends to Net Income 23.97% 25.05% 31.58% 27.63% 23.70% 24.50% 23.55%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets 1.50% 1.46% 0.99% 1.15% 1.14% 1.48% 1.16%
Return on Average Tangible Equity 16.24% 15.84% 10.69% 12.69% 12.77% 15.99% 13.10%
Return on Average Tangible Equity excluding acquisition costs and deferred tax asset adjustments 16.24% 15.88% 14.25% 13.09% 12.98% 16.01% 13.26%
 
         
Consolidated Statements of Financial Condition
June 30, March 31, Dec. 31, Sept. 30, June 30,
2018   2018   2017   2017   2017
Assets
Cash and cash equivalents $76,623 $52,149 $57,614 $84,006 $64,640
Securities available for sale 389,325 384,396 392,937 395,235 391,628
 
Loans held for sale 1,987 399 272 502 583
Loans 1,639,191 1,599,339 1,577,381 1,551,437 1,505,273
Less allowance for loan losses 12,764   12,550   12,315   12,104   11,746
Net Loans 1,626,427   1,586,789   1,565,066   1,539,333   1,493,527
 
Other assets 143,577   143,784   143,180   142,949   135,286
Total Assets $2,237,939   $2,167,517   $2,159,069   $2,162,025   $2,085,664
 
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing $420,991 $402,499 $412,346 $413,991 $387,596
Interest-bearing 1,229,346   1,234,660   1,192,373   1,195,533   1,153,407
Total deposits 1,650,337 1,637,159 1,604,719 1,609,524 1,541,003
Other interest-bearing liabilities 322,565 274,816 296,559 295,270 298,827
Other liabilities 17,527   14,302   15,717   19,348   19,147
Total liabilities 1,990,429 1,926,277 1,916,995 1,924,142 1,858,977
Stockholders’ Equity 247,510   241,240   242,074   237,883   226,687

 

Total Liabilities and Stockholders’ Equity

$2,237,939   $2,167,517   $2,159,069   $2,162,025   $2,085,664
 
Period-end shares outstanding 27,544 27,641 27,544 27,544 27,067
Book value per share $8.99 $8.73 $8.79 $8.64 $8.38
Tangible book value per share (Non-GAAP)* 7.36 7.10 7.14 6.98 6.73
 
* Tangible book value per share is calculated by dividing tangible common equity by average outstanding shares
 
Capital and Liquidity
Common Equity Tier 1 Capital Ratio (a) 12.16% 12.06% 11.86% 12.00% 11.80%
Total Risk Based Capital Ratio (a) 12.89% 12.94% 12.73% 12.86% 12.67%
Tier 1 Risk Based Capital Ratio (a) 12.16% 12.19% 11.99% 12.13% 11.93%
Tier 1 Leverage Ratio (a) 9.73% 9.68% 9.50% 9.70% 9.47%
Equity to Asset Ratio 11.06% 11.13% 11.21% 11.00% 10.87%
Tangible Common Equity Ratio 9.25% 9.24% 9.31% 9.08% 8.93%
Net Loans to Assets 72.68% 73.21% 72.49% 71.20% 71.61%
Loans to Deposits 99.32% 97.69% 98.30% 96.39% 97.68%
Asset Quality
Non-performing loans $8,406 $7,893 $7,695 $6,900 $6,355
Other Real Estate Owned 0 59 171 219 236
Non-performing assets 8,406 7,952 7,866 7,119 6,591
Loans 30 – 89 days delinquent 10,636 6,973 10,191 8,680 7,053
Charged-off loans 777 782 809 809 725
Recoveries 241 242 620 217 202
Net Charge-offs 536 540 189 592 523

Annualized Net Charge-offs to Average Net Loans Outstanding

0.13% 0.14% 0.05% 0.16% 0.14%
Allowance for Loan Losses to Total Loans 0.78% 0.78% 0.78% 0.78% 0.78%
Non-performing Loans to Total Loans 0.51% 0.49% 0.49% 0.44% 0.42%
Allowance to Non-performing Loans 151.84% 159.00% 160.04% 175.42% 184.83%
Non-performing Assets to Total Assets 0.38% 0.37% 0.36% 0.33% 0.32%
                     

(a) June 30, 2018 ratio is estimated

 
           

For the Six Months
Ended

Reconciliation of Total Assets to Tangible Assets
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30,   June 30,
2018   2018   2017   2017   2017   2018   2017
Total Assets $2,237,939 $2,167,517 $2,159,069 $2,162,025 $2,085,664 $2,237,939 $2,085,664
Less Goodwill and other intangibles 44,661   45,015   45,369   45,755   44,425   44,661   44,425
Tangible Assets $2,193,278   $2,122,502   $2,113,700   $2,116,270   $2,041,239   $2,193,278   $2,041,239
Average Assets 2,199,960 2,162,706 2,158,895 2,118,170 2,055,758 2,181,431 2,025,939
Less average Goodwill and other intangibles 44,893   45,248   45,622   45,263   44,665   45,070   44,845
Average Tangible Assets $2,155,067   $2,117,458   $2,113,273   $2,072,907   $2,011,093   $2,136,361   $1,981,094
 
 

For the Six Months
Ended

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
June 30,

March 31,

Dec. 31, Sept. 30, June 30, June 30, June 30,
2018   2018   2017   2017   2017   2018   2017
Stockholders’ Equity $247,510 $241,240 $242,074 $237,883 $226,687 $247,510 $226,687
Less Goodwill and other intangibles 44,661   45,015   45,369   45,755   44,425   44,661   44,425
Tangible Common Equity $202,849   $196,225   $196,705   $192,128   $182,262   $202,849   $182,262
Average Stockholders’ Equity 243,792 240,387 241,554 233,843 223,544 242,682 220,308
Less Average Goodwill and other intangibles 44,893   45,248   45,622   45,263   44,665   45,070   44,845
Average Tangible Common Equity $198,899   $195,139   $195,932   $188,580   $178,879   $197,612   $175,463
 
 
Reconciliation of Net Income, Excluding Acquisition Related Costs and Deferred Tax Asset Adjustments

For the Six Months
Ended

For the Three Months Ended  
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
2018   2018   2017   2017   2017   2018   2017
Net income $8,073 $7,726 $5,235 $5,983 $5,710 $15,799 $11,493
Acquisition related costs – tax equated 0 22 (48) 190 94 22 141
Deferred tax asset adjustments 0   0   1,793   0   0   0   0
Net income – Adjusted $8,073   $7,748   $6,980   $6,173   $5,804   $15,821   $11,634
Average shares outstanding 27,641 27,918 27,941 27,654 27,395 27,610 27,371
EPS excluding acquisition costs and deferred tax asset adjustments $0.29   $0.28   $0.25   $0.22   $0.21   $0.57   $0.43
 
         
For the Three Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
End of Period Loan Balances 2018   2018   2017   2017   2017
Commercial real estate $523,417 $511,628 $513,707 $500,426 $476,844
Commercial 232,672 231,498 220,441 218,946 215,676
Residential real estate 479,486 472,350 469,442 459,702 445,991
Consumer 219,138 210,088 207,851 213,918 220,454
Agricultural loans 181,173   170,725   163,081   155,336   142,687
Total, excluding net deferred loan costs $1,635,886   $1,596,289   $1,574,522   $1,548,328   $1,501,652
 
For the Three Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
Noninterest Income 2018   2018   2017   2017   2017
Service charges on deposit accounts $985 $1,003 $1,060 $1,077 $989
Bank owned life insurance income 219 222 246 193 191
Trust fees 1,740 1,807 1,622 1,608 1,523
Insurance agency commissions 713 699 530 531 672
Security gains 27 18 5 0 (14)
Retirement plan consulting fees 465 379 465 480 399
Investment commissions 315 256 260 184 253
Net gains on sale of loans 606 487 810 758 891
Debit card and EFT fees 870 806 830 770 836
Other operating income 366   333   223   457   315
Total Noninterest Income $6,306   $6,010   $6,051   $6,058   $6,055
 
For the Three Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
Noninterest Expense 2018   2018   2017   2017   2017
Salaries and employee benefits $8,828 $8,738 $8,697 $8,922 $8,853
Occupancy and equipment 1,611 1,704 1,528 1,546 1,631
State and local taxes 479 459 386 436 424
Professional fees 737 698 643 726 775
Merger related costs 0 25 88 270 104
Litigation settlement expense 0 0 0 0 155
Advertising 379 275 561 405 317
FDIC insurance 225 222 165 235 234
Intangible amortization 355 354 386 379 364
Core processing charges 794 739 806 702 717
Telephone and data 238 237 241 249 242
Other operating expenses 1,812   1,645   1,898   1,921   1,948

Total Noninterest Expense

$15,458   $15,096   $15,399   $15,791   $15,764
 
           
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
 
Three Months Ended Three Months Ended
June 30, 2018   June 30, 2017
AVERAGE AVERAGE
INTEREST INTEREST
BALANCE (1) RATE (1) BALANCE (1) RATE (1)
EARNING ASSETS
Loans (2) $1,606,993 $19,636 4.90% $1,472,575 $17,572 4.79%
Taxable securities 202,588 1,228 2.43 216,414 1,265 2.34
Tax-exempt securities (2) 190,494 1,737 3.66 164,369 1,791 4.37
Equity securities 11,214 154 5.51 10,216 123 4.83
Federal funds sold and other 33,541   167 2.00 33,053   82 1.00
Total earning assets 2,044,830 22,922 4.50 1,896,627 20,833 4.41
Nonearning assets 155,130 159,131
Total assets $2,199,960 $2,055,758
INTEREST-BEARING LIABILITIES
Time deposits $283,429 $957 1.35% $234,952 $652 1.11%
Savings deposits 477,365 256 0.22 526,398 183 0.14
Demand deposits 469,609 510 0.44 399,413 281 0.28
Short term borrowings 298,802 1,140 1.53 271,313 501 0.74
Long term borrowings 6,674   49 2.94 9,705   52 2.15
Total interest-bearing liabilities $1,535,879 2,912 0.76 $1,441,781 1,669 0.46

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY

Demand deposits 408,567 378,499
Other liabilities 11,722 11,934
Stockholders’ equity 243,792 223,544

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$2,199,960     $2,055,758    
Net interest income and interest rate spread $20,010   3.74% $19,164   3.95%
Net interest margin 3.93% 4.05%
 

(1)

 

Interest and yields are calculated on a tax-equivalent basis where applicable.

 

(2)

For 2018, adjustments of $91 thousand and $357 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2017, adjustments of $170 thousand and $621 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

     
Six Months Ended Six Months Ended
June 30, 2018   June 30, 2017
AVERAGE     AVERAGE    
INTEREST INTEREST
BALANCE (1) RATE (1) BALANCE (1) RATE (1)
EARNING ASSETS
Loans (2) $1,586,140 $38,145 4.85% $1,454,599 $34,210 4.74%
Taxable securities 204,455 2,461 2.43 214,076 2,383 2.24
Tax-exempt securities 188,041 3,417 3.66 158,674 3,430 4.36
Equity securities (2) 11,051 300 5.47 10,071 238 4.77
Federal funds sold and other 34,308   312 1.83 33,637   145 0.87
Total earning assets 2,023,995 44,635 4.45 1,871,057 40,406 4.35
Nonearning assets 157,436 154,882
Total assets $2,181,431 $2,025,939
INTEREST-BEARING LIABILITIES
Time deposits $277,408 $1,770 1.29% $235,036 $1,152 0.99%
Savings deposits 479,870 438 0.18 523,257 353 0.14
Demand deposits 460,503 926 0.41 392,049 525 0.27
Short term borrowings 290,617 2,021 1.40 260,469 828 0.64
Long term borrowings 6,768   93 2.77 10,991   130 2.39
Total interest-bearing liabilities $1,515,166 5,248 0.70 $1,421,802 2,988 0.42

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY

Demand deposits $409,705 $370,790
Other liabilities 13,878 13,039
Stockholders’ equity 242,682 220,308

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$2,181,431     $2,025,939    
Net interest income and interest rate spread $39,387   3.75% $37,418   3.93%
Net interest margin 3.92% 4.03%
 

(1)

 

Interest and yields are calculated on a tax-equivalent basis where applicable.

 

(2)

For 2018, adjustments of $173 thousand and $706 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2017, adjustments of $325 thousand and $1.2 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

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Washington Federal Announces Record Quarterly Earnings Per Share Of $0.61

SEATTLE–()–Washington Federal, Inc. (Nasdaq: WAFD) (the “Company”), parent company of Washington Federal, National Association, today announced record quarterly earnings of $51,394,000 or $0.61 per diluted share for the quarter ended June 30, 2018 compared to $44,112,000 or $0.49 per diluted share for the quarter ended June 30, 2017, a $0.12 or 24% increase in fully diluted earnings per share. Return on equity for the quarter ended June 30, 2018 was 10.30% compared to 8.70% for the quarter ended June 30, 2017. Return on assets for the quarter ended June 30, 2018 was 1.31% compared to 1.17% for the same quarter in the prior year.

President and Chief Executive Officer Brent J. Beardall commented, “The Company’s 24% increase in earnings per share is attributable to loan growth, improved net interest margin, fewer shares outstanding and a lower tax rate. It is notable that these results are inclusive of a 17% increase in operating costs, which include previously announced investments in our colleagues, technology and higher regulatory compliance costs. We are pleased that the impact of rising short-term interest rates on our funding costs has been more than offset by the combination of the re-pricing of variable rate assets and loan growth.”

On July 17, 2018, the Company and Anchor Bancorp (“Anchor”) mutually agreed to terminate the previously announced Agreement and Plan of Merger dated as of April 11, 2017, as amended. President and Chief Executive Officer Brent J. Beardall commented, “We are disappointed the transaction will not be consummated, but wish to thank the Board and Management of Anchor for their cooperation during this process. We wish Anchor the best going forward.”

Total assets were $15.8 billion as of June 30, 2018 compared to $15.3 billion as of September 30, 2017, the Company’s fiscal year-end. Asset growth since September 30, 2017 resulted primarily from a $443 million increase in net loans receivable.

Customer deposits increased by $452 million or 4.2% since September 30, 2017 and totaled $11.3 billion as of June 30, 2018. Transaction accounts increased by $212 million or 3.3% during that period, while time deposits increased $241 million or 5.4%. The Company continues to focus on growing transaction accounts to lessen sensitivity to rising interest rates and reduce interest expense. As of June 30, 2018, 58.2% of the Company’s deposits were in transaction accounts. Core deposits, defined as all transaction accounts and time deposits less than $250,000, totaled 93.6% of deposits at June 30, 2018.

Borrowings from the Federal Home Loan Bank (“FHLB”) totaled $2.4 billion as of June 30, 2018 and $2.2 billion at September 30, 2017. The weighted average rate for FHLB borrowings was 2.64% as of June 30, 2018 and 2.80% at September 30, 2017, the decline being due to the refinancing of some long-term FHLB advances that matured.

Loan originations totaled $1,096 million for our third fiscal quarter 2018 compared to $1,031 million of originations in the same quarter one year ago. Partially offsetting loan originations in each of these quarters were loan repayments of $891 million and $793 million, respectively. Commercial loans represented 68% of all loan originations during our third fiscal quarter 2018 and consumer loans accounted for the remaining 32%. The Company views organic loan growth as the highest and best use of its capital and prefers commercial loans as they generally have floating interest rates and shorter durations. The weighted average interest rate on loans was 4.42% as of June 30, 2018, an increase from 4.28% as of September 30, 2017.

Asset quality remained strong and the ratio of non-performing assets to total assets improved to 0.46% as of June 30, 2018 compared to 0.50% at June 30, 2017 and 0.46% at September 30, 2017. Since September 30, 2017, real estate owned decreased by $9 million, or 45%, and non-accrual loans increased by $11 million, or 22%. Delinquent loans were 0.40% of total loans at June 30, 2018 compared to 0.50% at June 30, 2017 and 0.40% at September 30, 2017. The allowance for loan losses and reserve for unfunded commitments totaled $135 million as of June 30, 2018 and was 1.06% of gross loans outstanding, as compared to $131 million or 1.07% of gross loans outstanding at September 30, 2017.

On May 25, 2018, the Company paid a regular cash dividend of $0.17 per share, which represented the 141st consecutive quarterly cash dividend. During the quarter, the Company repurchased 1,224,384 shares of common stock at a weighted average price of $32.64 per share and has authorization to repurchase 2,855,765 additional shares. The Company varies the pace of share repurchases depending on several factors, including share price, lending opportunities and capital levels. Since September 30, 2017, tangible common stockholders’ equity per share increased by $0.47 or 2.4% to $20.05 and the ratio of tangible common equity to tangible assets remained strong at 10.83% as of June 30, 2018.

Net interest income was $120 million for the quarter, an increase of $11.2 million or 10.3% from the same quarter in the prior year. The increase in net interest income from the prior year was primarily due to both higher balances and yield. Average earning assets increased by $710 million, or 5.1%. Net interest margin increased to 3.29% in the third fiscal quarter of 2018 from 3.13% for the same quarter in the prior year. The margin increase is primarily due to changes in the mix of interest earning assets, higher yields on variable rate loans, cash and investments, as well as a lower rate on FHLB advances due to the maturity of some higher cost long-term advances.

The Company recorded a provision for loan losses of $1.0 million in the third fiscal quarter of 2018 compared with no provision in the same quarter of 2017. Net recoveries were $90 thousand for the third fiscal quarter of 2018 compared to $1.3 million for the prior year’s quarter.

Total other income was $12.5 million for the third fiscal quarter of 2018, a decrease of $1.5 million from $13.9 million in the same quarter of the prior year. The decrease is primarily due to gains recognized on bank owned life insurance in the prior year. Deposit fee income increased by $0.7 million from the prior year due to the full roll-out of the Company’s new “Green Checking” product since that time. In May 2018, the Company terminated all of its FDIC loss share agreements. All future recoveries, gains, losses and expenses related to the previously covered assets will now be recognized entirely by the Company and the FDIC will no longer share in such gains or losses.

Total operating expenses were $67.0 million in the third fiscal quarter of 2018, an increase of $9.9 million or 17.4% from the prior year’s quarter. In the current quarter the Company had Bank Secrecy Act (BSA) related costs of approximately $4.9 million and projects that it will incur an additional $10 million of non-recurring costs for BSA improvements spread over the next four quarters. Once the program is steadied, BSA costs are expected to be approximately $2 million per quarter. Compensation and benefits costs increased by $2.3 million over the prior year quarter primarily due to headcount increases and cost of living adjustments since last year. Information technology costs increased by $3.5 million and other expenses increased by $2.7 million as both were elevated primarily due to the aforementioned BSA program enhancements and other technology platform improvements. The Company’s efficiency ratio in the third fiscal quarter of 2018 was 50.6% compared to 46.6% for the same period one year ago. The increase in the efficiency ratio is due to the elevated expenses noted above. The efficiency ratio was 49.5% for the nine months ended June 30, 2018.

On December 22, 2017, a new tax law was enacted that provides for significant changes to the U.S. Internal Revenue Code of 1986, as amended, such as a reduction in the federal corporate tax rate from 35% to 21% effective from January 1, 2018 forward and changes or limitations to certain tax deductions. The Company has a fiscal year end of September 30, resulting in a blended federal statutory tax rate for its fiscal year 2018. The financial statements for the first fiscal quarter of 2018 were impacted by discrete tax benefits of $3.7 million related to the revaluation of deferred tax assets and liabilities as well as tax benefits related to stock based compensation. For the nine months ended June 30, 2018, the Company recorded federal and state income tax expense of $37.6 million, which equates to a 19.8% effective tax rate. The Company estimates that its annual effective tax rate for its full fiscal 2018 (blended rate year) will be approximately 21%. This compares to an effective tax rate of 32.3% for the fiscal year ended September 30, 2017.

Washington Federal, a national bank with headquarters in Seattle, Washington, has 236 branches in eight western states. To find out more about Washington Federal, please visit our website www.washingtonfederal.com. Washington Federal uses its website to distribute financial and other material information about the Company.

Non-GAAP Financial Measures

Adjusted pre-tax income of $198.5 million for the nine months ended June 30, 2018 is calculated by adding back the FDIC loss share valuation adjustments of $8.6 million to pre-tax income of $189.9 million. The $8.6 million valuation adjustment was recorded in the quarter ended December 31, 2017.

Adjusted other income of $40.4 million for the nine months ended June 30, 2018 is calculated by adding back the FDIC loss share valuation adjustments of $8.6 million to other income of $31.8 million.

Adjusted efficiency ratio of 49.5% for the nine months ended June 30, 2018 is calculated by dividing total operating expense of $194.7 million by adjusted total income of $393.3 million (net interest income of $352.9 million plus adjusted other income of $40.4 million).

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2017 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

This press release contains statements about the Company’s future that are not statements of historical fact. These statements are “forward looking statements” for purposes of applicable securities laws, and are based on current information and/or management’s good faith belief as to future events. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. By their nature, forward-looking statements involve inherent risk and uncertainties, which change over time; and actual performance, could differ materially from those anticipated by any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement.

   
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
 
June 30, 2018 September 30, 2017
(In thousands, except share and ratio data)
ASSETS
Cash and cash equivalents $ 345,919 $ 313,070
Available-for-sale securities, at fair value 1,255,401 1,266,209
Held-to-maturity securities, at amortized cost 1,670,450 1,646,856
Loans receivable, net of allowance for loan losses of $128,666 and $123,073 11,325,971 10,882,622
Interest receivable 43,670 41,643
Premises and equipment, net 269,674 263,694
Real estate owned 11,275 20,658
FHLB and FRB stock 128,790 122,990
Bank owned life insurance 214,752 211,330
Intangible assets, including goodwill of $301,368 and $293,153 311,796 298,682
Federal and state income tax assets, net 4,293
Other assets 184,330   185,826  
$ 15,766,321   $ 15,253,580  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Customer accounts
Transaction deposit accounts $ 6,572,766 $ 6,361,158
Time deposit accounts 4,714,707   4,473,850  
11,287,473 10,835,008
FHLB advances 2,370,000 2,225,000
Advance payments by borrowers for taxes and insurance 32,632 56,631
Accrued expenses and other liabilities 89,953   131,253  
13,780,058 13,247,892
Stockholders’ equity
Common stock, $1.00 par value, 300,000,000 shares authorized; 135,343,437 and 134,957,511 shares issued; 83,534,098 and 87,193,362 shares outstanding 135,344 134,958
Additional paid-in capital 1,665,421 1,660,885
Accumulated other comprehensive (loss) income, net of taxes 8,137 5,015
Treasury stock, at cost; 51,809,339 and 47,764,149 shares (975,001 ) (838,060 )
Retained earnings 1,152,362   1,042,890  
1,986,263   2,005,688  
$ 15,766,321   $ 15,253,580  
CONSOLIDATED FINANCIAL HIGHLIGHTS
Common stockholders’ equity per share $ 23.78 $ 23.00
Tangible common stockholders’ equity per share 20.05 19.58
Stockholders’ equity to total assets 12.60 % 13.15 %
Tangible common stockholders’ equity to tangible assets 10.83 % 11.41 %
 
Weighted average rates at period end
Loans and mortgage-backed securities 4.13 % 3.96 %
Combined loans, mortgage-backed securities and investments 4.01 3.82
Customer accounts 0.75 0.54
Borrowings 2.64 2.80
Combined cost of customer accounts and borrowings 1.08 0.92
Net interest spread 2.93 2.90
 
   
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
Three Months Ended June 30, Nine Months Ended June 30,
2018   2017 2018   2017
(In thousands, except share and ratio data) (In thousands, except share and ratio data)
INTEREST INCOME
Loans receivable $ 131,541 $ 117,457 $ 382,581 $ 348,326
Mortgage-backed securities 18,022 15,992 52,588 45,007
Investment securities and cash equivalents 5,509   4,267   14,762   13,345  
155,072 137,716 449,931 406,678
INTEREST EXPENSE
Customer accounts 18,887 12,764 49,939 38,173
FHLB advances and other borrowings 16,333   16,337   47,104   49,011  
35,220 29,101 97,043 87,184
Net interest income 119,852 108,615 352,888 319,494
Provision (release) for loan losses 1,000     50   (1,600 )
Net interest income after provision (release) for loan losses 118,852 108,615 352,838 321,094
 
OTHER INCOME
Gain on sale of investment securities 968
FDIC loss share valuation adjustments (8,550 )
Loan fee income 1,094 889 2,909 3,310
Deposit fee income 6,411 5,714 19,500 15,803
Other Income 4,946   7,319   17,974   15,873  
12,451 13,922 31,833 35,954
OTHER EXPENSE
Compensation and benefits 31,223 28,947 92,467 84,774
Occupancy 9,095 8,829 26,779 26,370
FDIC insurance premiums 2,950 2,842 8,622 8,591
Product delivery 4,356 3,246 11,977 10,096
Information technology 10,118 6,617 26,828 19,754
Other 9,235   6,581   28,032   19,285  
66,977 57,062 194,705 168,870
Gain (loss) on real estate owned, net 168   (124 ) (64 ) 1,069  
Income before income taxes 64,494 65,351 189,902 189,247
Income tax provision 13,100   21,239   37,567   61,819  
NET INCOME $ 51,394   $ 44,112   $ 152,335   $ 127,428  
 
PER SHARE DATA
Basic earnings per share $ 0.61 $ 0.49 $ 1.78 $ 1.43
Diluted earnings per share 0.61 0.49 1.78 1.42
Cash dividends per share 0.17 0.15 0.49 0.69
Basic weighted average shares outstanding 84,168,992 89,199,823 85,589,588 89,297,471
Diluted weighted average shares outstanding 84,252,659 89,497,264 85,698,888 89,653,955
 
PERFORMANCE RATIOS
Return on average assets 1.31 % 1.17 % 1.31 % 1.14 %
Return on average common equity 10.30 8.70 10.12 8.46
Net interest margin 3.29 3.13 3.27 3.10
Efficiency ratio (a) 50.62 46.57 49.51 47.51
(a) Efficiency ratio for the nine months ended June 30, 2018 excludes the impact of $8.55 million reduction to other income related to FDIC loss share valuation adjustments.

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The Marketing Alliance Announces Financial Results for Its Fiscal 2018 Fourth Quarter and Year Ended March 31, 2018

ST. LOUIS–()–The Marketing Alliance, Inc. (OTC: MAAL) (“TMA”), today announced financial results for its fiscal 2018 fourth quarter and year ended March 31, 2018.

Timothy M. Klusas, TMA’s Chief Executive Officer, commented, “We were pleased with our financial results for the fiscal year as the construction and insurance distribution businesses recorded notable increases in revenues. The addition of new carriers and adoption of new digital processes has helped to drive revenue growth for the insurance distribution business. We have received a positive response from our distributors with the addition of our newest carrier, Pacific Life, a relationship that was initiated in the prior fiscal year. The continued adoption of digital applications by our distributors has also contributed to the increase in revenue for our insurance business, as more producers began using our digital platform to submit applications. Revenues more than doubled in our construction business from the prior fiscal year, as TMA realigned its focus on new uses for the Company’s equipment. We began providing drainage for roadway projects as part of larger jobs managed by larger general contractors. This allowed TMA to undertake and complete several projects during the year in new areas of business, as opposed to being limited exclusively to agricultural projects prior to the planting season or after the harvest season, as was the case in prior years. Finally, in the family entertainment business, although we recorded a 4% increase in revenue for the three months ended March 31, 2018, we have undertaken steps to change the business to grow revenues at a higher rate. During the fiscal year, we assessed our pricing strategy at each of our Monkey Joe facilities in an effort to find the ideal balance of offering a superior family entertainment experience at a value to our customers, while capturing more revenues for our business. While we believe that during the previous quarter we started to see some of the benefits of our new pricing model, our expense level relative to sales was identified as needing further improvement, and the execution of that plan was expected to continue forward.”

Fiscal 2018 Fourth Quarter Financial Review

  • Total revenues for the three-month period ended March 31, 2018, were $8,555,984 as compared to $7,057,547 in the prior year quarter. This was due to increases in insurance commission and family entertainment revenue for the period which offset a decrease in construction revenue over the prior year period.
  • Net operating revenue (gross profit) for the quarter was $2,908,347 compared to net operating revenue of $3,033,667 in the prior-year fiscal period. The decrease in gross profit for the quarter was partially the result of increases in distributor bonuses and commissions paid, which exceeded a corresponding increase in revenue. A contributing factor of this change was related to the annuity business, where proposed changes due to the Department of Labor’s Fiduciary Rule caused many producers to cease selling annuities in expectation of the implementation of the Fiduciary Rule and certain related actions by insurance carriers attributed to the rule. The negative expense (credit) associated with business processing and distributor costs in the quarter relates to the revaluation of an annual accrued liability that occurs during the quarter, which is also the end of the fiscal year.
  • Operating expenses slightly increased to $2,238,227 or 26.2% of total revenues for the fiscal 2018 fourth quarter as compared to $2,194,979, or 31.1% of total revenues for the same period of the prior year. This increase is due in part to increases in compensation and rent and occupancy expenses.
  • Operating income decreased to $670,120, compared to operating income of $838,688 reported in the prior-year period. Operating income for the quarter decreased, in part, as a result of an increase in expenses and due to the timing of bonuses and commissions being paid, less annuity sales as mentioned above, and less construction revenue.
  • Operating EBITDA (excluding investment portfolio income) for the quarter was $871,138 compared to $1,044,148 in the prior-year period. A note reconciling operating EBITDA to operating income can be found at the end of this release.
  • Investment gain, net (from investment portfolio) for the fourth quarter ended March 31, 2018 was $144,096, as compared to $412,977, for the same quarter of the previous fiscal year.
  • Net income for the fiscal 2018 fourth quarter was $611,672, or $0.08 per share, as compared to a net income of $746,445, or $0.09 per share, in the prior year period. The decrease in net income was attributable to a decrease in income before provision for income taxes and less investment gain, net, as compared to the prior year, which was partially offset by an increase in total revenues for the period.

Fiscal 2018 Financial Review

  • Total revenues for the 2018 fiscal year increased 17.6% to $31,228,916, compared to $26,552,613, for the prior-year period. The increase was due to gains in insurance distribution and construction revenue for the period, which offset a decrease in the family entertainment business.
  • Net operating revenue (gross profit) was $9,774,020, which compares to net operating revenue of $9,239,376 in the prior-year fiscal period.
  • Operating expenses for the 2018 fiscal year was $8,856,143, a slight increase when compared to the same twelve-month period of the prior year.
  • The Company reported operating income of $917,877 for the year-ended March 31, 2018, compared to operating income of $516,592 for the prior-year period due to the factors discussed above.
  • Operating EBITDA (excluding investment revenue) for the fiscal 2018 year was $1,691,704 as compared to $1,484,142 for the prior-year period. A note reconciling Operating EBITDA to Operating Income can be found at the end of this release.
  • Investment gain, net (from investment portfolio) for the twelve months ended March 31, 2018 was $839,471, as compared to $1,324,211, for the same period of the previous fiscal year.
  • Net income for the year ended March 31, 2018, was $1,450,272, or $0.18 per share, compared to a net income of $1,063,149, or $0.13 per share, for the prior-year period. The year over year increase was supported in part by an increase in total revenue, an increase in operating income, and recorded tax benefits.
  • The Tax Cuts and Jobs Act (“The Tax Act”) signed into law on December 22, 2017, changed many aspects of U.S. corporate income taxation and included the reduction of the corporate income tax rate from 35% to 21%, effective January 1, 2018. As a result of this change, the Company revalued its net deferred tax assets at December 31, 2017. For the fiscal year ended March 31, 2018, the Company anticipated a blended federal statutory tax of 30.75%. The Company recognized the tax effect of The Tax Act in the quarter ended December 31, 2017, and as a result, recorded $335,015 in tax benefits as it relates to the re-measurement of deferred tax assets and liabilities to the 21% tax rate.

Balance Sheet Information

  • TMA’s balance sheet at March 31, 2018 reflected cash and cash equivalents of approximately $3.4 million, working capital of $9.7 million, and shareholders’ equity of $10.4 million; compared to cash and cash equivalents of approximately $4.5 million, working capital of $10.4 million, and shareholders’ equity of $10.8 million, at March 31, 2017.

About The Marketing Alliance, Inc.

Headquartered in St. Louis, MO, TMA operates three businesses. TMA provides support to independent insurance brokerage agencies, with a goal of providing members value-added services on a more efficient basis than they can achieve individually. The Company also owns an earth moving and excavating business and nine children’s play and party facilities. Investor information can be accessed through the shareholder section of TMA’s website at: http://www.themarketingalliance.com/shareholder-information.

TMA’s common stock is quoted on the OTC Markets (http://www.otcmarkets.com) under the symbol “MAAL”.

Forward Looking Statement

Investors are cautioned that forward-looking statements involve risks and uncertainties that may affect TMA’s business and prospects. Examples of forward-looking statements include, among others, statements we make regarding our expectations for our performance during fiscal 2018 and future periods and the production of favorable returns to shareholders, our ability to obtain industry acceptance and competitive advantages of a multi-carrier digital platform for life insurance applications, our expectations with respect to the distribution of new life insurance products, the effects of ongoing uncertainty regarding the Department of Labor’s Fiduciary Rule in our annuity business, our ability to diversify our earth moving and excavating business and our ability to increase revenue and reduce costs from our family entertainment business. Any forward-looking statements contained in this press release represent our estimates, expectations or intentions only as of the date hereof, or as of such earlier dates as are indicated, and should not be relied upon as representing our views as of any subsequent date. These statements involve a number of risks and uncertainties, including, but not limited to, expectations of the economic environment; material adverse changes in economic conditions in the markets we serve and in the general economy; future regulatory actions and conditions in the states in which we conduct our business; our ability to work with carriers on marketing, distribution and product development; pricing and other payment decisions and policies of the carriers in our insurance distribution business, weather and environmental conditions in the areas served by our earth moving and excavation business, the integration of our operations with those of businesses or assets we have acquired or may acquire in the future and the failure to realize the expected benefits of such acquisition and integration. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

Consolidated Statement of Operations
 
Three-months ended   Twelve-months ended
March 31, March 31,
(Unaudited) (Unaudited)
2018   2017 2018   2017
 
Commission revenue $ 6,851,514 $ 5,406,606 $ 25,049,876 $ 20,559,833
Construction revenue 4,311 100,706 901,270 413,010
Family entertainment revenue 1,412,959 1,358,649 4,809,029 5,189,950
Other operating income   287,200     191,586     468,741     389,820  
Total revenues   8,555,984     7,057,547     31,228,916     26,552,613  
 
Distributor related expenses:
Distributor bonuses and commissions 5,290,777 3,647,899 18,337,855 14,216,912
Business processing and distributor costs (112,414 ) (15,577 ) 1,096,628 1,322,465
Depreciation   2,064     2,527     8,200     10,575  
Total   5,180,427     3,634,849     19,442,683     15,549,952  
 
Family entertainment costs of sales:   396,824     317,729     1,337,571     1,272,350  
 
Costs of construction:
Direct and indirect costs of construction 42,637 59,321 618,607 342,401
Depreciation   27,749     11,981     56,035     148,534  
Total   70,386     71,302     674,642     490,935  
 
Net operating revenue   2,908,347     3,033,667     9,774,020     9,239,376  
 
Operating Expenses   2,238,227     2,194,979     8,856,143     8,722,784  
 
Operating income   670,120     838,688     917,877     516,592  
 
Other income (expense):
Investment (loss) gain, net 144,096 412,977 839,471 1,324,211
Interest expense (78,260 ) (67,561 ) (282,773 ) (233,127 )
(Loss) Gain on disposal of assets (577 ) (6,924 ) (13,100 )
Swap settlement (expense) income (295 ) (8,926 ) (13,207 ) (49,267 )
Interest rate swap, fair value adjustment   26,310     15,485     47,998     117,115  
 
Income (loss) before provision for income taxes 761,971 1,190,086 1,502,442 1,662,424
 
Provision for income taxes (benefit)   150,299     443,641     52,170     599,275  
 
Net income $ 611,672 $ 746,445 $ 1,450,272 $ 1,063,149
 
Average Shares Outstanding 8,032,266 8,032,266 8,032,266 8,032,266
 
Operating Income per Share $ 0.08 $ 0.10 $ 0.11 $ 0.06
Net Income per Share $ 0.08 $ 0.09 $ 0.18 $ 0.13
 
 

Consolidated Selected Balance Sheet Items

 
    As of
Assets 3/31/18   3/31/17
Cash & Equivalents $ 3,431,155 $ 4,538,393
Investments 8,627,202 7,719,319
Receivables 8,917,928 7,664,743
Other   889,233   1,230,189
Total Current Assets 21,865,518 21,152,644
 
Property and Equipment, Net 2,234,797 2,629,719
Intangible Assets, net 1,169,497 1,316,807
Other   871,738   807,273

Total Non Current Assets

  4,276,032   4,753,799
 
Total Assets $ 26,141,550 $ 25,906,443
 
Liabilities & Stockholders’ Equity
Total Current Liabilities $ 12,154,086 $ 10,784,318
 
Long Term Liabilities  

3,593,254

 

4,330,766

 
Total Liabilities   15,747,340   15,115,084
 
Stockholders’ Equity   10,394,210   10,791,359
 
Liabilities & Stockholders’ Equity $ 26,141,550 $ 25,906,443
 

Note – Operating EBITDA (excluding investment portfolio income)

Q4FY2018 Operating EBITDA (excluding investment portfolio income) was determined by adding Q4FY 2018 Operating Income of $670,120 and Depreciation and Amortization Expense of $201,018 for a total of $871,138. Q4FY2017 Operating EBITDA (excluding investment portfolio income) was determined by adding Q4FY 2017 Operating Income of $838,688 and Depreciation and Amortization Expense of $205,460 for a total of $1,044,148. The Company elects not to include investment portfolio income because the Company believes it is non-operating in nature.

Fiscal 2018 year-end Operating EBITDA (excluding investment portfolio income) was determined by adding FY2018 year-end Operating Income of $917,877 and Depreciation and Amortization Expense of $773,827 for a sum of $1,691,704. FY2017 year-end Operating EBITDA (excluding investment portfolio income) was determined by adding Operating Income of $516,592 and Depreciation and Amortization Expense of $967,550 for a sum of $1,484,142. The Company elects not to include investment portfolio income because the Company believes it is non-operating in nature.

The Company uses Operating EBITDA as a measure of operating performance. However, Operating EBITDA is not a recognized measurement under U.S. generally accepted accounting principles, or GAAP, and when analyzing its operating performance, investors should use Operating EBITDA in addition to, and not as an alternative for, income as determined in accordance with GAAP. Because not all companies use identical calculations, its presentation of Operating EBITDA may not be comparable to similarly titled measures of other companies and is therefore limited as a comparative measure. Furthermore, as an analytical tool, Operating EBITDA has additional limitations, including that (a) it is not intended to be a measure of free cash flow, as it does not consider certain cash requirements such as tax payments; (b) it does not reflect changes in, or cash requirements for, its working capital needs; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and Operating EBITDA does not reflect any cash requirements for such replacements, or future requirements for capital expenditures or contractual commitments. To compensate for these limitations, the Company evaluates its profitability by considering the economic effect of the excluded expense items independently as well as in connection with its analysis of cash flows from operations and through the use of other financial measures.

The Company believes Operating EBITDA is useful to an investor in evaluating its operating performance because it is widely used to measure a company’s operating performance without regard to certain non-cash or unrealized expenses (such as depreciation and amortization) and expenses that are not reflective of its core operating results over time. The Company believes Operating EBITDA presents a meaningful measure of corporate performance exclusive of its capital structure, the method by which assets were acquired and non-cash charges, and provides additional useful information to measure performance on a consistent basis, particularly with respect to changes in performance from period to period.

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Intuit Accelerates Cloud Strategy, Sells Data Center

MOUNTAIN VIEW, Calif.–()–Intuit Inc. (Nasdaq: INTU) today announced the sale of its largest data center as the company advances its strategy and continues migrating its services to the public cloud, moving away from investing in owning hosting platforms.

Intuit is selling its Data Center in Quincy, Wash. to H5 Data Centers, one of the leading privately-owned data center operators in the United States.

We chose to move to Amazon Web Services (AWS) to accelerate developer productivity and innovation for our customers, and to accommodate spikes in customer usage through the tax season,” said H. Tayloe Stansbury, Intuit Executive Vice President and Chief Technology Officer. “Our TurboTax Online customers were served entirely from AWS during the latter part of this tax season, and we expect to finish transitioning QuickBooks Online this year. Now that most of our core applications are in AWS, the time is right to transition the ownership and operation of this data center to a team who will expertly manage the infrastructure through the remainder of this transition.”

Intuit was one of the first companies of scale with enterprise-class data to move to the public cloud. With the data center sale complete, Intuit will continue to leverage the public cloud’s scalable and reliable service to ultimately deliver better outcomes for customers.

Expected Impact to Financials

The sale is expected to result in a GAAP operating loss of $75 to $85 million. The impact of this GAAP operating loss on net income and EPS is expected to be offset by tax benefits related to the sale, share based compensation and the reorganization of a subsidiary during the quarter.

The net impact is expected to result in no change to GAAP Earnings per Share (EPS).

Forward-looking Guidance

Intuit revised GAAP operating income guidance and reiterated revenue, non-GAAP operating income and EPS guidance for the fourth quarter and full fiscal year 2018, which ends July 31.

For the fourth quarter of fiscal 2018, the company now expects:

  • Revenue of $940 million to $960 million, growth of 12 to 14 percent.
  • GAAP operating loss of $100 million to $110 million.
  • Non-GAAP operating income of $75 million to $85 million.
  • GAAP diluted earnings per share of $0.04 to $0.06.
  • Non-GAAP diluted earnings per share of $0.22 to $0.24.

For the full fiscal year 2018, the company now expects:

  • Revenue of $5.915 billion to $5.935 billion, growth of 14 to 15 percent.
  • GAAP operating income of $1.465 billion to $1.475 billion, growth of 5 to 6 percent.
  • Non-GAAP operating income of $1.950 billion to $1.960 billion, growth of 12 to 13 percent.
  • GAAP diluted earnings per share of $4.50 to $4.52, growth of 21 to 22 percent.
  • Non-GAAP diluted earnings per share of $5.51 to $5.53, growth of 25 percent.

About Intuit

Intuit’s mission is to Power Prosperity Around the World. Its global products and platforms, including TurboTax, QuickBooks, Mint and Turbo, are designed to empower consumers, self-employed, and small businesses to improve their financial lives, finding them more money with the least amount of work, while giving them complete confidence in their actions and decisions. Intuit’s innovative ecosystem of financial management solutions serves partners and 46 million customers worldwide, unleashing the power of many for the prosperity of one. For the latest news and in-depth information about Intuit and its brands, visit Intuit.com and follow on Facebook.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the section of the accompanying tables titled “About Non-GAAP Financial Measures” as well as the related Table 1. A copy of the press release issued by Intuit today can be found on the investor relations page of Intuit’s website.

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including forecasts of expected growth and future financial results of Intuit and its reporting segments; Intuit’s prospects for the business in fiscal 2018 and beyond; and all of the statements under the headings “Expected Impact to Financials” and “Forward-looking Guidance”.

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: inherent difficulty in predicting consumer behavior; difficulties in receiving, processing, or filing customer tax submissions; consumers may not respond as we expected to our advertising and promotional activities; changes in the total number of tax filings that are submitted to government agencies due to economic conditions or otherwise; the competitive environment; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns; our ability to innovate and adapt to technological change and global trends; our ability to adequately protect our intellectual property rights; our ability to develop and maintain brand awareness and our reputation; disruptions, expenses and risks associated with our acquisitions and divestitures; we may issue additional shares in an acquisition causing our number of outstanding shares to grow; any failure to properly use and protect personal customer or employee information and data; a security breach could result in third-party access to confidential customer, employee and business information; privacy and cybersecurity concerns relating to our offerings, or online offerings in general; any failure to process transactions effectively or to adequately protect against potential fraudulent activities; any loss of confidence in using our software as a result of publicity regarding such fraudulent activity; availability of our products and services could be impacted by business interruption or failure of our information technology and communication systems; our ability to develop, manage and maintain critical third-party business relationships; our ability to attract, retain and develop highly skilled employees; any significant product accuracy or quality problems or delays; any problems with implementing upgrades to our customer facing applications and supporting information technology infrastructure; increased risks associated with international operations; increases in or changes to government regulation of our businesses; the cost of, and potential adverse results in, litigation involving intellectual property, antitrust, shareholder and other matters; the seasonal and unpredictable nature of our revenue; unanticipated changes in our income tax rates; adverse global economic conditions; amortization of acquired intangible assets and impairment charges; our use of significant amounts of debt to finance acquisitions or other activities; any lost revenue opportunities or cannibalization of our traditional paid franchise due to our participation in the Free File Alliance; and changes in the amounts or frequency of share repurchases or dividends. More details about the risks that may impact our business are included in our Form 10-K for fiscal 2017 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Forward-looking statements are based on information as of July 18, 2018 and we do not undertake any duty to update any forward-looking statement or other information in these materials.

 

TABLE 1

INTUIT INC.

RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES

TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS

(In millions, except per share amounts)

(Unaudited)

 
Forward-Looking Guidance
GAAP

Range of Estimate

      Non-GAAP

Range of Estimate

From   To Adjmts From   To
Three Months Ended July 31, 2018
Revenue $ 940 $ 960 $ 940 $ 960
Operating income (loss) $ (110 ) $ (100 ) $ 185 [a] $ 75 $ 85
Diluted earnings per share $ 0.04 $ 0.06 $ 0.18 [b] $ 0.22 $ 0.24
 
Twelve Months Ending July 31, 2018
Revenue $ 5,915 $ 5,935 $ 5,915 $ 5,935
Operating income $ 1,465 $ 1,475 $ 485 [c] $ 1,950 $ 1,960
Diluted earnings per share $ 4.50 $ 4.52 $ 1.01 [d] $ 5.51 $ 5.53
 
[a] Reflects estimated adjustments for share-based compensation expense of approximately $99 million; loss on sale of data center of approximately $80 million; amortization of acquired technology of approximately $5 million; and amortization of other acquired intangible assets of approximately $1 million.
 
[b] Reflects the estimated adjustments in item [a], income taxes related to these adjustments, and other income tax effects related to the use of the non-GAAP tax rate.
 
[c] Reflects estimated adjustments for share-based compensation expense of approximately $383 million; loss on sale of data center of approximately $80 million; amortization of acquired technology of approximately $15 million; amortization of other acquired intangible assets of approximately $5 million; and professional fees for business combinations of approximately $2 million.
 
[d] Reflects the estimated adjustments in item [c], income taxes related to these adjustments, and other income tax effects related to the use of the non-GAAP tax rate. Includes provisional tax charge related to the Tax Cuts and Jobs Act and other income from divested businesses.
 

INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES

The accompanying press release dated July 18, 2018 contains non-GAAP financial measures. Table 1 reconciles the non-GAAP financial measures in that press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss) and non-GAAP net income per share.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.

We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We exclude the following items from all of our non-GAAP financial measures:

  • Share-based compensation expense
  • Amortization of acquired technology
  • Amortization of other acquired intangible assets
  • Goodwill and intangible asset impairment charges
  • Gains and losses on disposals of businesses and long-lived assets
  • Professional fees for business combinations

We also exclude the following items from non-GAAP diluted net income per share:

  • Gains and losses on debt and equity securities and other investments
  • Income tax effects and adjustments
  • Discontinued operations

We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments, or our senior management. Segment managers are not held accountable for share-based compensation expense, amortization, or the other excluded items and, accordingly, we exclude these amounts from our measures of segment performance. We believe that our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods.

The following are descriptions of the items we exclude from our non-GAAP financial measures.

Share-based compensation expenses. These consist of non-cash expenses for stock options, restricted stock units, and our Employee Stock Purchase Plan. When considering the impact of equity awards, we place greater emphasis on overall shareholder dilution rather than the accounting charges associated with those awards.

Amortization of acquired technology and amortization of other acquired intangible assets. When we acquire an entity, we are required by GAAP to record the fair values of the intangible assets of the entity and amortize them over their useful lives.

Amortization of acquired technology in cost of revenue includes amortization of software and other technology assets of acquired entities. Amortization of other acquired intangible assets in operating expenses includes amortization of assets such as customer lists, covenants not to compete, and trade names.

Goodwill and intangible asset impairment charges. We exclude from our non-GAAP financial measures non-cash charges to adjust the carrying value of goodwill and other acquired intangible assets to their estimated fair values.

Gains and losses on disposals of businesses and long-lived assets. We exclude from our non-GAAP financial measures gains and losses on disposals of businesses and long-lived assets because they are unrelated to our ongoing business operating results.

Professional fees for business combinations. We exclude from our non-GAAP financial measures the professional fees we incur to complete business combinations. These include investment banking, legal, and accounting fees.

Gains and losses on debt and equity securities and other investments. We exclude from our non-GAAP financial measures gains and losses that we record when we sell or impair available-for-sale debt and equity securities and other investments.

Income tax effects and adjustments. In our fiscal 2017 and the first quarter of our fiscal 2018 we used a long-term non-GAAP tax rate for evaluating operating results and for planning, forecasting, and analyzing future periods. This long-term non-GAAP tax rate excluded the income tax effects of the non-GAAP pre-tax adjustments described above, and eliminates the effects of non-recurring and period specific items which can vary in size and frequency. Based on our long-term projections at that time we used a long-term non-GAAP tax rate of 33%. This rate was consistent with the average of our normalized fiscal year tax rate over a four year period that included the past three fiscal years plus the current fiscal year forecast.

In the second quarter of our fiscal 2018, we revised our estimated annual effective non-GAAP tax rate to reflect a change in the U.S. federal statutory rate, as a result of the 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”). The federal statutory rate change, to 21%, is effective January 1, 2018, and therefore, the change will result in a blended U.S. federal statutory rate of 26.9% for our fiscal year 2018. Effective in the third quarter of fiscal 2018, we adjusted our effective non-GAAP tax rate from 27% to 26.3%, based on continued analysis of the impacts from the 2017 Tax Act, as well as updates to the estimated full year impacts of our tax rate drivers such as the research and experimentation credit and the domestic production activities deduction. We have applied this tax rate to year to date pre-tax income, after the elimination of the effects of the non-GAAP adjustments to our operating results described above. Because of the transitional impact of the 2017 Tax Act provisions, the fiscal 2018 non-GAAP tax rate is based on our current year forecast only, without reference to long-term forecasts. This non-GAAP tax rate excludes the income tax effects of the non-GAAP pre-tax adjustments described above, and eliminates the effects of non-recurring and period specific items.

We will fully benefit from the U.S. federal statutory rate change in our fiscal year 2019. We expect to use the long-term non-GAAP tax rate for fiscal 2019, once the 2017 Tax Act’s provisions are in full effect and consistent for the periods included in the long-term forecast.

We evaluate the non-GAAP tax rate on an annual basis and whenever any significant events occur which may materially affect this rate. This non-GAAP tax rate could be subject to change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.

Operating results and gains and losses on the sale of discontinued operations. From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of discontinued operations as well as gains and losses on the sale of these discontinued operations from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude these amounts from our non-GAAP financial measures.

The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in Table 1 include all information reasonably available to Intuit at the date of this press release. This table includes adjustments that we can reasonably predict. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments, sales of available-for-sale debt securities and other investments, and disposals of businesses and long-lived assets.

http://www.businesswire.com/news/home/20180718005259/en/Intuit-Accelerates-Cloud-Strategy-Sells-Data-Center/?feedref=JjAwJuNHiystnCoBq_hl-fZYqiffDpHIASjea2DwvsWD1w08bW43U_zsPK9s38B4rCOi9QzgjCezTS3Nw_X6kJUrpSBm-Hav1w-UkdSlG3nBCddZ7R8TUqSJPYIyhFzD7nKdfLXU1CD0fwzlM5l88g==

Kemper Announces Schedule for Second Quarter 2018 Earnings Call; Estimates Second Quarter 2018 Catastrophe Losses

CHICAGO–()–Kemper Corporation (NYSE: KMPR) announced today that before the markets open on Monday, July 30, 2018, Kemper will issue its second quarter 2018 earnings release and financial supplement and will also file its quarterly report on Form 10-Q with the Securities and Exchange Commission (the “SEC”). Following their publication, these documents will be available on the investor section of kemper.com.

Kemper will host its conference call to discuss second quarter 2018 results on Monday, July 30, 2018, at 4:15 p.m. Eastern (3:15 p.m. Central). The conference call will be accessible via the internet and by telephone at 844.826.3041. To listen via webcast, register online at the investor section of kemper.com at least 15 minutes prior to the webcast to install any necessary software.

A replay of the webcast will be available online at the investor section of kemper.com.

Kemper also announced today that it estimates its second quarter 2018 results will include pre-tax catastrophe losses in the range of $42 million to $47 million. The company does not expect to recover any of these losses under its catastrophe reinsurance programs. The losses were related to more than 15 storms throughout the country and adversely impacted losses for both homeowners and auto lines.

About Kemper

The Kemper family of companies is one of the nation’s leading insurers. With $11 billion in assets, Kemper is improving the world of insurance by offering personalized solutions for individuals, families and businesses. Through our businesses, Kemper:

  • Offers insurance for auto, home, life, health and valuables
  • Services approximately seven million policies
  • Is represented by more than 30,000 agents and brokers
  • Employs over 7,800 associates dedicated to providing exceptional service
  • Is licensed to sell insurance in 50 states and the District of Columbia

Learn more about Kemper.

Caution Regarding Forward-Looking Statements

This press release may contain or incorporate by reference information that includes or is based on forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events, and can be identified by the fact that they relate to future actions, performance or results rather than strictly to historical or current facts.

Any or all forward-looking statements may turn out to be wrong, and, accordingly, readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that are difficult to predict, and are not guarantees of future performance. Among the general factors that could cause actual results and financial condition to differ materially from estimated results and financial condition are those listed in periodic reports filed by Kemper with the SEC. No assurances can be given that the results and financial condition contemplated in any forward-looking statements will be achieved or will be achieved in any particular timetable. Kemper assumes no obligation to publicly correct or update any forward-looking statements as a result of events or developments subsequent to the date of this press release. The reader is advised, however, to consult any further disclosures Kemper makes on related subjects in its filings with the SEC.

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Crocs, Inc. Announces Conference Call to Review Second Quarter 2018 Results

NIWOT, Colo.–()–Crocs, Inc. (NASDAQ:CROX) today announced that on Tuesday August 7, 2018 at 8:30 a.m. ET, it will host a conference call to discuss the results of its second quarter ended June 30, 2018.

The call participation number is (888) 771-4371. A replay of the conference call will be available two hours after the completion of the call at (888) 843-7419 and will remain available through 11:59 p.m. ET on August 14, 2018. International participants can dial (847) 585-4405 to take part in the conference call, and can access a replay of the call at (630) 652-3042. All of the above calls will require the input of the conference identification number: 47215397.

The call also will be streamed live on the Crocs website, www.crocs.com. This audio webcast will remain available at www.crocs.com through August 7, 2019.

About Crocs, Inc.:

Crocs, Inc. (Nasdaq: CROX) is a world leader in innovative casual footwear for women, men and children, combining comfort and style with a value that consumers know and love. Every pair of shoes within Crocs’ collection contains Croslite™ material, a proprietary, molded footwear technology, delivering extraordinary comfort with each step.

In 2018, Crocs reinforces its mission of “everyone comfortable in their own shoes” with the second year of its global Come As You Are™ campaign. To learn more about Crocs or Come As You Are, please visit www.crocs.com or follow @Crocs on Facebook, Instagram and Twitter.

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Textron Reports Second Quarter 2018 Income from Continuing Operations of $0.87 per Share; Raises Full-Year EPS and Cash Guidance

PROVIDENCE, R.I.–()–Textron Inc. (NYSE: TXT) today reported second quarter 2018 income from continuing operations of $0.87 per share. This compares to $0.57 per share in the second quarter of 2017, or $0.60 per share of adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release.

“Operationally, we saw continued strength in our execution with margin improvements at Aviation, Systems, and Bell,” said Textron Chairman and CEO Scott C. Donnelly. “We are encouraged by revenue growth resulting from improving commercial demand across many of our end markets.”

Cash Flow

Net cash provided by operating activities of continuing operations of the manufacturing group for the second quarter totaled $468 million, compared to $413 million in last year’s second quarter. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $399 million compared to $341 million during last year’s second quarter.

In the quarter, Textron returned $571 million to shareholders through share repurchases, compared to $143 million in the second quarter of 2017.

Outlook

Textron now expects 2018 earnings per share from continuing operations to be in a range of $3.15 to $3.35, up $0.20 from our previous outlook. The company also expects full-year 2018 cash flow from continuing operations of the manufacturing group before pension contributions to be in a range of $750 to $850 million, up $50 million from its previous expectation.

Textron expects a one-time gain of approximately $400 million from the Tools & Test divestiture in the third quarter of 2018, which is not reflected in this updated outlook.

“Our updated outlook reflects our strong first-half performance and the continuation of our strategy of growth through new product investments and acquisitions to increase long-term shareholder value,” Donnelly concluded.

Second Quarter Segment Results

Textron Aviation

Revenues at Textron Aviation of $1.3 billion were up 9%, primarily due to higher volume and price.

Textron Aviation delivered 48 jets, up from 46 last year, and 47 commercial turboprops, up from 33 last year.

Segment profit was $104 million in the second quarter, up from $54 million a year ago, due to the favorable volume, mix, and price.

Textron Aviation backlog at the end of the second quarter was $1.6 billion.

Bell

Bell revenues were $831 million, up 1% primarily on higher commercial volume, partially offset by lower military revenues.

Bell delivered 57 commercial helicopters in the quarter, up from 21 last year.

Segment profit of $117 million was up $5 million.

Bell backlog at the end of the second quarter was $5.5 billion.

Textron Systems

Revenues at Textron Systems were $380 million, down from $477 million last year, largely on lower volumes at Weapons & Sensors related to the discontinuance of SFW production in 2017 and lower TAPV deliveries at Textron Marine & Land Systems.

Segment profit was down $2 million, primarily reflecting the lower net volume partially offset by favorable performance.

Textron Systems’ backlog at the end of the second quarter was $1.2 billion.

Industrial

Industrial revenues increased $109 million largely related to higher volumes across all of our product lines and a favorable impact from foreign exchange.

Segment profit was down $2 million despite the increase in revenues from the second quarter of 2017, due to the mix of products sold.

Finance

Finance segment revenues and profit were both flat with last year’s second quarter.

Conference Call Information

Textron will host its conference call today, July 18, 2018 at 8:00 a.m. (Eastern) to discuss its results and outlook. The call will be available via webcast at www.textron.com or by direct dial at (800) 230-1951 in the U.S. or (612) 288-0340 outside of the U.S. (request the Textron Earnings Call).

In addition, the call will be recorded and available for playback beginning at 10:30 a.m. (Eastern) on Wednesday, July 18, 2018 by dialing (320) 365-3844; Access Code: 431861.

A package containing key data that will be covered on today’s call can be found in the Investor Relations section of the company’s website at www.textron.com.

About Textron Inc.

Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell, Cessna, Beechcraft, Hawker, Jacobsen, Kautex, Lycoming, E-Z-GO, Textron Off Road, Arctic Cat, Textron Systems, and TRU Simulation + Training. For more information visit: www.textron.com.

Forward-looking Information

Certain statements in this release and other oral and written statements made by us from time to time are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which may describe strategies, goals, outlook or other non-historical matters, or project revenues, income, returns or other financial measures, often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “guidance,” “project,” “target,” “potential,” “will,” “should,” “could,” “likely” or “may” and similar expressions intended to identify forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. In addition to those factors described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors”, among the factors that could cause actual results to differ materially from past and projected future results are the following: Interruptions in the U.S. Government’s ability to fund its activities and/or pay its obligations; changing priorities or reductions in the U.S. Government defense budget, including those related to military operations in foreign countries; our ability to perform as anticipated and to control costs under contracts with the U.S. Government; the U.S. Government’s ability to unilaterally modify or terminate its contracts with us for the U.S. Government’s convenience or for our failure to perform, to change applicable procurement and accounting policies, or, under certain circumstances, to withhold payment or suspend or debar us as a contractor eligible to receive future contract awards; changes in foreign military funding priorities or budget constraints and determinations, or changes in government regulations or policies on the export and import of military and commercial products; volatility in the global economy or changes in worldwide political conditions that adversely impact demand for our products; volatility in interest rates or foreign exchange rates; risks related to our international business, including establishing and maintaining facilities in locations around the world and relying on joint venture partners, subcontractors, suppliers, representatives, consultants and other business partners in connection with international business, including in emerging market countries; our Finance segment’s ability to maintain portfolio credit quality or to realize full value of receivables; performance issues with key suppliers or subcontractors; legislative or regulatory actions, both domestic and foreign, impacting our operations or demand for our products; our ability to control costs and successfully implement various cost-reduction activities; the efficacy of research and development investments to develop new products or unanticipated expenses in connection with the launching of significant new products or programs; the timing of our new product launches or certifications of our new aircraft products; our ability to keep pace with our competitors in the introduction of new products and upgrades with features and technologies desired by our customers; pension plan assumptions and future contributions; demand softness or volatility in the markets in which we do business; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or, operational disruption; difficulty or unanticipated expenses in connection with integrating acquired businesses; the risk that acquisitions do not perform as planned, including, for example, the risk that acquired businesses will not achieve revenue and profit projections; the impact of changes in tax legislation (including the recently enacted Tax Cuts and Jobs Act); and risks related to the timing and scope of future repurchases of our common stock.

 

TEXTRON INC.
Revenues by Segment and Reconciliation of Segment Profit to Net Income
(Dollars in millions, except per share amounts)
(Unaudited)

                       
Three Months Ended Six Months Ended
June 30, 2018     July 1, 2017 June 30, 2018     July 1, 2017

REVENUES

               
MANUFACTURING:
Textron Aviation $ 1,276 $ 1,171 $ 2,286 $ 2,141
Bell 831 825 1,583 1,522
Textron Systems 380 477 767 893
Industrial   1,222     1,113     2,353     2,105  
3,709 3,586 6,989 6,661
 

FINANCE

  17     18     33     36  
Total revenues $ 3,726   $ 3,604   $ 7,022   $ 6,697  
 

SEGMENT PROFIT

MANUFACTURING:
Textron Aviation $ 104 $ 54 $ 176 $ 90
Bell 117 112 204 195
Textron Systems 40 42 90 62
Industrial   80       82     144       158  
341 290 614 505
 
FINANCE   5     5     11     9  

Segment Profit

346 295 625 514
 
Corporate expenses and other, net (51 ) (31 ) (78 ) (58 )
Interest expense, net for Manufacturing group (35 ) (36 ) (69 ) (70 )
Special charges (a)       (13 )       (50 )
 
Income from continuing operations before income taxes 260 215 478 336
Income tax expense   (36 )   (62 )   (65 )   (83 )
 
Income from continuing operations 224 153 413 253
Discontinued operations, net of income taxes               1  
Net income $ 224   $ 153   $ 413   $ 254  
 
Earnings per share:
Income from continuing operations $ 0.87 $ 0.57 $ 1.59 $ 0.94
Discontinued operations, net of income taxes                
Net income $ 0.87   $ 0.57   $ 1.59   $ 0.94  
 
Diluted average shares outstanding     257,177,000       269,299,000         260,462,000       271,076,000  
 
At the beginning of 2018, we adopted the new revenue recognition accounting standard using a modified retrospective transition method applied to contracts that were not substantially complete at the end of 2017. We recorded a $90 million adjustment to increase retained earnings to reflect the cumulative impact of adopting this standard at the beginning of 2018, primarily related to long-term contracts with the U.S. Government. Revenues associated with these contracts in 2018 are primarily recognized as costs are incurred, while revenues for 2017 were primarily recognized as units were delivered. The comparative information has not been restated and is reported under the accounting standards in effect for those periods.
 
Income from Continuing Operations and Diluted Earnings Per Share (EPS) GAAP to Non-GAAP Reconciliation:
                                         

Three Months Ended
July 1, 2017

Six Months Ended
July 1, 2017

          Diluted EPS           Diluted EPS
Income from continuing operations – GAAP $         153         $ 0.57 $         253         $ 0.94
Restructuring, net of taxes of $4 million and $9 million, respectively 8 0.03 18 0.07

Arctic Cat restructuring, integration and transaction costs,
net of taxes of $0 million and $7 million, respectively

          1             16   0.05
Total Special charges, net of income taxes           9   0.03           34   0.12
Adjusted income from continuing operations – Non-GAAP (b) $         162 $ 0.60 $         287 $ 1.06
 
(a)     Special charges for the three and six months ended July 1, 2017 include $12 million and $27 million, respectively, related to a 2016 restructuring plan and $1 million and $23 million, respectively, of restructuring and transaction costs related to the Arctic Cat acquisition.
 
(b) Adjusted income from continuing operations and adjusted diluted earnings per share are non-GAAP financial measures as defined in “Non-GAAP Financial Measures” attached to this release.
 
 

Textron Inc.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)

                       

June 30,
2018

   

December 30,
2017

Assets (a)    
Cash and equivalents $ 554 $ 1,079
Accounts receivable, net 1,121 1,363
Inventories 3,925 4,150
Assets of businesses held for sale (b) 407
Other current assets 763 435
Net property, plant and equipment 2,608 2,721
Goodwill 2,207 2,364
Other assets 1,869 2,059
Finance group assets   1,104       1,169
Total Assets $ 14,558     $ 15,340
 
 
Liabilities and Shareholders’ Equity (a)
Short-term debt and current portion of long-term debt $ 9 $ 14
Current liabilities 3,322 3,646
Liabilities of businesses held for sale (b) 66
Other liabilities 1,809 2,006
Long-term debt 3,070 3,074
Finance group liabilities   920       953
Total Liabilities 9,196 9,693
 
Total Shareholders’ Equity   5,362       5,647
Total Liabilities and Shareholders’ Equity $ 14,558     $ 15,340
 
(a)     At the beginning of 2018, we adopted the new revenue recognition accounting standard using a modified retrospective transition method applied to contracts that were not substantially complete at the end of 2017. We recorded a $90 million adjustment to increase retained earnings to reflect the cumulative impact of adopting this standard at the beginning of 2018, primarily related to long-term contracts with the U.S. Government. Revenues associated with these contracts in 2018 are primarily recognized as costs are incurred, while revenues for 2017 were primarily recognized as units were delivered. The comparative information has not been restated and is reported under the accounting standards in effect for those periods.
 
(b) On April 18, 2018, we entered into a definitive agreement to sell the businesses that manufacture and sell the products in our Tools and Test Equipment product line within our Industrial segment. The assets and liabilities of these businesses have been classified as held for sale at June 30, 2018. We completed this disposition on July 2, 2018.
 
 
TEXTRON INC.
MANUFACTURING GROUP
Condensed Schedule of Cash Flows
(In millions)
(Unaudited)
                                   
Three Months Ended   Six Months Ended
June 30,     July 1,   June 30,     July 1,
2018     2017   2018     2017
Cash flows from operating activities:
Income from continuing operations $ 219 $ 150 $ 398 $ 244
Depreciation and amortization 109 108 212 211
Changes in working capital (a) 98 88 (278 ) (249 )
Changes in other assets and liabilities and non-cash items (a) 42 67 33 42
Dividends received from TFC                 50          
Net cash from operating activities of continuing operations (a)   468         413       415         248  
Cash flows from investing activities:
Capital expenditures (82 ) (85 ) (159 ) (161 )
Net proceeds from corporate-owned life insurance policies (a) 40 98 22
Proceeds from the sale of property, plant and equipment 1 10
Net cash used in acquisitions (11 ) (329 )
Other investing activities, net                       1  
Net cash from investing activities (a)   (41 )       (96 )   (51 )       (467 )
Cash flows from financing activities:
Decrease in short-term debt (2 ) (100 )
Proceeds from long-term debt 347
Purchases of Textron common stock (571 ) (143 ) (915 ) (329 )
Other financing activities, net   30         (3 )     33         10  
Net cash from financing activities   (543 )       (246 )     (882 )       28  
Total cash flows from continuing operations (116 ) 71 (518 ) (191 )
Total cash flows from discontinued operations (1 ) 2 (1 ) (23 )
Effect of exchange rate changes on cash and equivalents   (17 )       7       (6 )       15  
Net change in cash and equivalents (134 ) 80 (525 ) (199 )
Cash and equivalents at beginning of period   688         858       1,079         1,137  
Cash and equivalents at end of period $ 554       $ 938     $ 554       $ 938  
 
Manufacturing Cash Flow GAAP to Non-GAAP Reconciliation:
                 
Net cash from operating activities of continuing operations – GAAP $ 468 $ 413 $ 415 $ 248
Less: Capital expenditures (82 ) (85 ) (159 ) (161 )
Dividends received from TFC (50 )
Plus: Total pension contributions 12 13 25 27
Proceeds from the sale of property, plant and equipment   1               10          
Manufacturing cash flow before pension contributions- Non-GAAP (a) $ 399       $ 341     $ 241       $ 114  
 
(a)     For the six months ended July 1, 2017, $22 million of net cash proceeds received from the settlement of corporate-owned life insurance policies were reclassified from operating activities to investing activities as a result of the adoption of a new accounting standard at the beginning of 2018.
 
(b) Manufacturing cash flow before pension contributions is a non-GAAP financial measure as defined in “Non-GAAP Financial Measures” attached to this release.
 
 

TEXTRON INC.
Condensed Consolidated Schedule of Cash Flows
(In millions)
(Unaudited)

                                   
Three Months Ended   Six Months Ended
June 30,     July 1,   June 30,     July 1,
2018     2017   2018     2017
Cash flows from operating activities:
Income from continuing operations $ 224 $ 153 $ 413 $ 253
Depreciation and amortization 111 112 216 218
Changes in working capital (a) 105 128 (264 ) (243 )
Changes in other assets and liabilities and non-cash items (a)   43         65       33         39  
Net cash from operating activities of continuing operations (a)   483         458       398         267  
Cash flows from investing activities:
Capital expenditures (82 ) (85 ) (159 ) (161 )
Net proceeds from corporate-owned life insurance policies (a) 40 98 22
Finance receivables repaid 9 9 25 24
Net cash used in acquisitions (11 ) (329 )
Other investing activities, net   21         21       30         34  
Net cash from investing activities (a)   (12 )       (66 )     (6 )       (410 )
Cash flows from financing activities:
Decrease in short-term debt (2 ) (100 )
Principal payments on long-term debt and nonrecourse debt (15 ) (36 ) (34 ) (74 )
Proceeds from long-term debt 13 375
Purchases of Textron common stock (571 ) (143 ) (915 ) (329 )
Other financing activities, net   30         (3 )     33         10  
Net cash from financing activities   (558 )       (269 )     (916 )       (18 )
Total cash flows from continuing operations (87 ) 123 (524 ) (161 )
Total cash flows from discontinued operations (1 ) 2 (1 ) (23 )
Effect of exchange rate changes on cash and equivalents   (17 )       7       (6 )       15  
Net change in cash and equivalents (105 ) 132 (531 ) (169 )
Cash and equivalents at beginning of period   836         997       1,262         1,298  
Cash and equivalents at end of period $ 731       $ 1,129     $ 731       $ 1,129  
 
(a)     For the six months ended July 1, 2017, $22 million of net cash proceeds received from the settlement of corporate-owned life insurance policies were reclassified from operating activities to investing activities as a result of the adoption of a new accounting standard at the beginning of 2018.
 

TEXTRON INC.
Non-GAAP Financial Measures
(Dollars in millions, except per share amounts)

 
We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures. These non-GAAP financial measures exclude certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures may be useful for period-over-period comparisons of underlying business trends and our ongoing business performance, however, they should be used in conjunction with GAAP measures. Our non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define similarly named measures differently. We encourage investors to review our financial statements and publicly-filed reports in the entirety and not to rely on any single financial measure. We utilize the following definitions for the non-GAAP financial measures included in this release:
 

Adjusted income from continuing operations and adjusted diluted earnings per share

Adjusted income from continuing operations and adjusted diluted earnings per share both exclude Special charges, net of income taxes. We consider items recorded in Special charges such as enterprise-wide restructuring and acquisition-related restructuring, integration and transaction costs, to be of a non-recurring nature that is not indicative of ongoing operations.
 

Manufacturing cash flow before pension contributions

Manufacturing cash flow before pension contributions adjusts net cash from operating activities of continuing operations (GAAP) for the following:
 

• Deducts capital expenditures and includes proceeds from the sale of property, plant and equipment to arrive at the net capital investment required to support ongoing manufacturing operations;

• Excludes dividends received from Textron Financial Corporation (TFC) and capital contributions to TFC provided under the Support Agreement and debt agreements as these cash flows are not representative of manufacturing operations;

• Adds back pension contributions as we consider our pension obligations to be debt-like liabilities. Additionally, these contributions can fluctuate significantly from period to period and we believe that they are not representative of cash used by our manufacturing operations during the period.

 
While we believe this measure provides a focus on cash generated from manufacturing operations, before pension contributions, and may be used as an additional relevant measure of liquidity, it does not necessarily provide the amount available for discretionary expenditures since we have certain non-discretionary obligations that are not deducted from the measure.
 
Income from Continuing Operations and Diluted Earnings Per Share (EPS) GAAP to Non-GAAP Reconciliation:
                                 
Three Months Ended

July 1, 2017

Six Months Ended
July 1, 2017

      Diluted EPS       Diluted EPS
Income from continuing operations – GAAP $ 153       $ 0.57 $ 253     $ 0.94
Restructuring, net of taxes of $4 million and $9 million, respectively 8 0.03 18 0.07
Arctic Cat restructuring, integration and transaction costs,

net of taxes of $0 million and $7 million, respectively

  1         16     0.05  
Total Special charges, net of income taxes   9     0.03     34     0.12  
Adjusted income from continuing operations – Non-GAAP $ 162   $ 0.60   $ 287   $ 1.06  
 
Manufacturing Cash Flow Before Pension Contributions GAAP to Non-GAAP Reconciliation and Outlook:
                   

Three Months Ended

Six Months Ended

June 30, 2018

    July 1, 2017

June 30, 2018

    July 1, 2017
Net cash from operating activities of continuing operations – GAAP (a) $ 468 $ 413 $ 415 $ 248
Less: Capital expenditures (82 ) (85 ) (159 ) (161 )
Dividends received from TFC (50 )
Plus: Total pension contributions 12 13 25 27
Proceeds from the sale of property, plant and equipment   1         10      
Manufacturing cash flow before pension contributions – Non-GAAP (a) $ 399   $ 341   $ 241   $ 114  
 
         

2018 Outlook

Net cash from operating activities of continuing operations – GAAP $ 1,235

 

$ 1,335
Less: Capital expenditures

(500)

 

Dividends received from TFC

 

(50)

 

Plus: Total pension contributions

55

 

Proceeds from the sale of property, plant and equipment    

10

 

 
Manufacturing cash flow before pension contributions – Non-GAAP $ 750    

 

$ 850  
 
(a)     For the six months ended July 1, 2017, $22 million of net cash proceeds received from the settlement of corporate-owned life insurance policies were reclassified from operating activities to investing activities as a result of the adoption of a new accounting standard at the beginning of 2018.

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Genesee & Wyoming Reports Traffic for June 2018

DARIEN, Conn.–()–Genesee & Wyoming Inc. (G&W) (NYSE:GWR) today reported traffic volumes for June 2018 and the second quarter of 2018.

G&W’s total traffic in June 2018 was 271,166 carloads, a decrease of 3,422 carloads, or 1.2%, compared with June 2017. G&W’s same railroad traffic in June 2018 increased 5,740 carloads, or 2.2%, compared with G&W’s traffic in June 2017, excluding carloads from G&W’s former Continental European intermodal business (ERS), which was sold in June 2018.

G&W’s total traffic in the second quarter of 2018 was 834,363 carloads, an increase of 24,281 carloads, or 3.0%, compared with the second quarter of 2017. G&W’s same railroad traffic in the second quarter of 2018 was 812,297 carloads, an increase of 29,863, or 3.8%, compared with G&W’s same railroad traffic in the second quarter of 2017. Second quarter same railroad traffic excludes all traffic from ERS in Q2 2018 and Q2 2017 as well as April 2018 and May 2018 traffic from the Heart of Georgia Railroad, Inc. (HOG) which was acquired on May 31, 2017.

The table below sets forth summary total carloads by segment.

Segment       June 2018     June 2017     Change    

%

Change

North American Operations 143,337 135,654 7,683 5.7%
Australian Operations(1) 48,487 45,998 2,489 5.4%
U.K./European Operations 79,342 92,936 (13,594) (14.6%)
Total G&W Operations 271,166 274,588 (3,422) (1.2%)
Carloads From Divested Operations(2) 9,162 (9,162) NM
Same Railroad Carloads 271,166 265,426 5,740 2.2%

 

(1)  

51.1% owned by G&W.

(2) Total carloads from ERS, which was sold in June 2018.
 

Highlights by Segment

  • North American Operations: Traffic in June 2018 was 143,337 carloads, an increase of 5.7% compared with June 2017, primarily due to metals, coal & coke and other commodity group traffic.
  • Australian Operations: Traffic in June 2018 was 48,487 carloads, an increase of 5.4% compared with June 2017, primarily due to increased coal & coke traffic, partially offset by decreased metallic ores and agricultural products traffic. Carload information for G&W’s 51.1% owned Australian Operations is presented on a 100% basis.
  • U.K./European Operations: Traffic in June 2018 was 79,342 carloads, a decrease of 14.6% compared with June 2017. Excluding traffic from ERS, same railroad traffic in June 2018 was 79,342 carloads, a decrease of 5.3% compared with same railroad traffic in June 2017 of 83,774 carloads, primarily due to decreased intermodal traffic in the U.K.

The table below sets forth North American Operations carload information by commodity group.

North American Operations:       June 2018     June 2017     Change    

%

Change

Agricultural Products 16,122 17,330 (1,208) (7.0%)
Autos & Auto Parts 2,946 3,114 (168) (5.4%)
Chemicals & Plastics 14,524 14,359 165 1.1%
Coal & Coke 20,241 17,513 2,728 15.6%
Food & Kindred Products 4,682 4,911 (229) (4.7%)
Intermodal 1,252 975 277 28.4%
Lumber & Forest Products 12,288 11,895 393 3.3%
Metallic Ores 1,443 1,464 (21) (1.4%)
Metals 14,359 11,571 2,788 24.1%
Minerals & Stone 21,105 20,033 1,072 5.4%
Petroleum Products 8,246 8,479 (233) (2.7%)
Pulp & Paper 14,031 13,495 536 4.0%
Waste 5,025 5,075 (50) (1.0%)
Other 7,073 5,440 1,633 30.0%
Total Carloads 143,337 135,654 7,683 5.7%
 
  • Metals traffic increased 2,788 carloads, or 24.1%, primarily due to increased scrap steel and coil shipments in G&W’s Southern Region and scrap steel in G&W’s Midwest Region.
  • Coal & coke traffic increased 2,728 carloads, or 15.6%, primarily due to increased shipments in G&W’s Midwest and Northeast regions, partially offset by decreased shipments in G&W’s Central Region.
  • Other commodity group traffic increased 1,633 carloads, or 30.0%, primarily due to increased empty overhead car shipments in most G&W regions.
  • All remaining traffic increased by a net 534 carloads.

The table below sets forth carload information for G&W’s 51.1% owned Australian Operations by commodity group.

Australian Operations(1):       June 2018     June 2017     Change    

%

Change

Agricultural Products 4,143 5,172 (1,029) (19.9%)
Coal & Coke 32,084 27,336 4,748 17.4%
Intermodal 4,836 5,090 (254) (5.0%)
Metallic Ores 1,894 2,974 (1,080) (36.3%)
Minerals & Stone 5,500 5,404 96 1.8%
Petroleum Products 30 22 8 36.4%
Total Carloads 48,487 45,998 2,489 5.4%

 

(1)   51.1% owned by G&W.
 
  • Coal & coke traffic increased 4,748, or 17.4%, primarily due to increased spot coal shipments for various customers in the Hunter Valley.
  • Metallic ores traffic decreased 1,080 carloads, or 36.3%, primarily due to the planned, temporary shutdown of an iron ore mine in October 2017.
  • Agricultural products traffic decreased 1,029 carloads, or 19.9%, primarily due to a weaker 2017-2018 harvest in South Australia.
  • All remaining traffic decreased by a net 150 carloads.

The table below sets forth U.K./European Operations carload information by commodity group.

U.K./European Operations:       June 2018     June 2017     Change    

%

Change

Agricultural Products 244 176 68 38.6%
Coal & Coke 1,225 600 625 NM
Intermodal 60,880 75,559 (14,679) (19.4%)
Minerals & Stone 16,973 16,601 372 2.2%
Petroleum Products 20 20 NM
Total Carloads 79,342 92,936 (13,594) (14.6%)
Carloads From Divested Operations(1) 9,162 (9,162) NM
Same Railroad Carloads 79,342 83,774 (4,432) (5.3%)

 

(1)   Total intermodal carloads from ERS, which was sold in June 2018.
 

The following highlights relate to U.K./European same railroad traffic.

  • Intermodal traffic decreased 5,517 carloads, or 8.3%, due to decreased shipments in the U.K. in part due to operational issues at a U.K. port.
  • All remaining traffic increased by a net 1,085 carloads.

Second Quarter of 2018 Traffic

The table below sets forth summary total carloads by segment.

Segment       Q2 2018     Q2 2017     Change    

%

Change

North American Operations 430,353 397,047 33,306 8.4%
Australian Operations(1) 147,965 146,089 1,876 1.3%
U.K./European Operations 256,045 266,946 (10,901) (4.1%)
Total G&W Operations 834,363 810,082 24,281 3.0%
Adjusted Carloads(2) 22,066 27,648 (5,582) NM
Same Railroad Carloads 812,297 782,434 29,863 3.8%

 

(1)   51.1% owned by G&W.
(2) Adjusted to exclude 1,243 carloads (April-May 2018) from HOG, which was acquired on May 31, 2017, and all carloads from ERS, which was sold in June 2018 and contributed 20,823 intermodal carloads in Q2 2018 (April-May 2018) and 27,648 intermodal carloads in Q2 2017.
 

The table below sets forth North American Operations carload information by commodity group.

North American Operations:       Q2 2018     Q2 2017     Change    

%

Change

Agricultural Products 51,762 52,953 (1,191) (2.2%)
Autos & Auto Parts 9,106 9,184 (78) (0.8%)
Chemicals & Plastics 45,285 44,814 471 1.1%
Coal & Coke 59,346 46,501 12,845 27.6%
Food & Kindred Products 14,907 14,806 101 0.7%
Intermodal 3,816 2,367 1,449 61.2%
Lumber & Forest Products 37,733 35,619 2,114 5.9%
Metallic Ores 4,448 4,249 199 4.7%
Metals 40,806 34,695 6,111 17.6%
Minerals & Stone 62,156 56,768 5,388 9.5%
Petroleum Products 24,340 23,912 428 1.8%
Pulp & Paper 41,762 39,813 1,949 4.9%
Waste 14,837 14,387 450 3.1%
Other 20,049 16,979 3,070 18.1%
Total Carloads 430,353 397,047 33,306 8.4%
Carloads From New Operations(1) 1,243 1,243 NM
Same Railroad Carloads 429,110 397,047 32,063 8.1%

 

(1)   Total carloads from HOG (April-May 2018), which contributed 676 carloads of lumber & forest products traffic and 567 carloads from all other commodities.
 

The table below sets forth carload information for G&W’s 51.1% owned Australian Operations by commodity group.

Australian Operations(1):       Q2 2018     Q2 2017     Change    

%

Change

Agricultural Products 14,175 15,375 (1,200) (7.8%)
Coal & Coke 97,282 92,659 4,623 5.0%
Intermodal 13,957 15,159 (1,202) (7.9%)
Metallic Ores 5,586 8,854 (3,268) (36.9%)
Minerals & Stone 16,891 13,978 2,913 20.8%
Petroleum Products 74 64 10 15.6%
Total Carloads 147,965 146,089 1,876 1.3%

 

(1)   51.1% owned by G&W.
 

The table below sets forth U.K./European Operations carload information by commodity group.

U.K./European Operations:

      Q2 2018     Q2 2017     Change    

%

Change

Agricultural Products 607 746 (139) (18.6%)
Coal & Coke 4,038 3,974 64 1.6%
Intermodal 201,058 217,091 (16,033) (7.4%)
Minerals & Stone 50,322 45,135 5,187 11.5%
Petroleum Products 20 20 NM
Total Carloads 256,045 266,946 (10,901) (4.1%)
Carloads From Divested Operations(1) 20,823 27,648 (6,825) NM
Same Railroad Carloads 235,222 239,298 (4,076) (1.7%)

 

(1)   Total intermodal carloads from ERS, which was sold in June 2018.
 

Other

The term carload represents physical railcars and estimated railcar equivalents of commodities for which G&W is paid on a metric ton or other measure to move freight, as well as intermodal units.

Historically, G&W has found that traffic information may be indicative of freight revenues on its railroads. Freight revenues are revenues for which G&W is paid on a per car, per container or per metric ton basis to move freight. Activities such as railcar switching, port terminal shunting, traction services and other similar freight-related services are excluded from our traffic information as the resulting revenues are not classified as freight revenue. Traffic information may not be indicative of total operating revenues, operating expenses, operating income or net income. Please refer to the documents G&W files from time to time with the Securities and Exchange Commission, such as its Form 10-Q and 10-K, which contain additional information on G&W’s freight traffic and segment reporting.

About G&W

G&W owns or leases 121 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers.

  • G&W’s seven North American regions serve 41 U.S. states and four Canadian provinces and include 115 short line and regional freight railroads with more than 13,000 track-miles.
  • G&W’s Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
  • G&W’s UK/Europe Region includes the U.K.’s largest rail maritime intermodal operator and second-largest freight rail provider, as well as regional rail services in Continental Europe.

G&W subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.

For more information, visit gwrr.com.

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Easterly Government Properties Schedules Second Quarter 2018 Earnings Release and Conference Call

WASHINGTON–()–Easterly Government Properties, Inc. (NYSE: DEA) today announced that the Company will release its second quarter 2018 financial results on August 7, 2018.

A conference call will be held Tuesday, August 7, 2018 at 10:00am Eastern Daylight time. The management team will review second quarter performance, discuss recent events and conduct a question-and-answer session.

Webcast:

The conference call will be available in the Investor Relations section of the Company’s website at ir.easterlyreit.com. To listen to a live broadcast, please visit the site at least 15 minutes prior to the scheduled start time in order to register and to download and install any necessary audio software. A replay of the call will also be available for ten business days on the Company’s website.

To Participate in the Conference Call:

Dial in at least 5 minutes prior to start time:
Domestic: 877-705-6003
International: 201-493-6725

Conference Call Playback:

Domestic: 844-512-2921
International: 412-317-6671
Passcode: 13680471
The playback can be accessed through August 21, 2018.

About Easterly Government Properties, Inc.

Easterly Government Properties, Inc. (NYSE:DEA) is based in Washington, D.C. and focuses primarily on the acquisition, development and management of Class A commercial properties that are leased to the U.S. Government. Easterly’s experienced management team brings specialized insight into the strategy and needs of mission-critical U.S. Government agencies for properties leased to such agencies either directly or through the U.S. General Services Administration (GSA). For further information on the company and its properties, please visit www.easterlyreit.com.

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Fitbit Schedules Q218 Financial Results for August 1, 2018

SAN FRANCISCO–()–Fitbit (NYSE: FIT), the leading global wearables brand, today announced that it expects to release results for its second quarter 2018 on Wednesday, August 1, after market close. In conjunction with a press release, management will host a conference call at 5:00 p.m. Eastern Time/2:00 p.m. Pacific Time that afternoon.

A live webcast of the conference call will be available on the Investor section of the company’s website at investor.fitbit.com.

The call can also be accessed by dialing (888) 468-2440 or (719) 325-4750, access code 7830797. A replay of the call will be archived on the Company’s website for the following six months.

About Fitbit, Inc. (NYSE: FIT)

Fitbit helps people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals. As the leading global wearables brand, Fitbit designs products and experiences that track and provide motivation for everyday health and fitness. Fitbit’s diverse line of innovative and popular products include Fitbit Blaze®, Fitbit Charge 2®Fitbit Alta HR™, Fitbit Alta®Fitbit Ace™, Fitbit Flex 2®, and Fitbit Zip® activity trackers, as well as the Fitbit Ionic™ and Fitbit Versa™ smartwatches, Fitbit Flyer™ wireless headphones and Fitbit Aria 2™ Wi-Fi Smart Scales. Fitbit products are carried in over 45,000 retail stores and in 86 countries around the globe. Powered by one of the world’s largest social fitness networks and databases of health and fitness data, the Fitbit platform delivers personalized experiences, insights and guidance through leading software and interactive tools, including the Fitbit and Fitbit Coach apps, and the Fitbit OS for smartwatches. Fitbit Health Solutions develops health and wellness solutions designed to help increase engagement, improve health outcomes, and drive a positive return for employers, health plans and health systems.

Fitbit and the Fitbit logo are trademarks or registered trademarks of Fitbit, Inc. in the U.S. and other countries. Additional Fitbit trademarks can be found at www.fitbit.com/legal/trademark-list. Third-party trademarks are the property of their respective owners.

Connect with us on FacebookInstagram or Twitter and share your Fitbit experience.

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Mellanox Achieves Another Record Quarter

SUNNYVALE, Calif. & YOKNEAM, Israel–()–Mellanox® Technologies, Ltd. (NASDAQ: MLNX), a leading supplier of high-performance, end-to-end interconnect solutions for data center servers and storage systems, today announced financial results for its second quarter 2018 ended June 30, 2018.

“Mellanox has achieved another record financial performance in the second quarter 2018. Our strong revenue growth reflects years of investment in 25 gigabit per second and above Ethernet and InfiniBand technologies. Our record profitability demonstrates the leverage we are producing in the business by focusing our investments in the right products,” said Eyal Waldman, President and CEO of Mellanox Technologies. “We continue to see strong traction with our 25 gigabit per second and above solutions as they become the preferred solution of choice in hyperscale, cloud, high performance computing, artificial intelligence, storage, financial services and other markets across the globe. Our Ethernet revenue grew 81 percent year-over-year driven by network adapter and switch growth with hyperscale and OEM customers. We are proud to see our InfiniBand solutions accelerate the world’s top three and four of the top five supercomputers, as seen in the recently published TOP500 supercomputers list. Our performance in the second quarter further shows the benefit of our investment in diversifying our revenue base and the operational focus that is driving our higher profitability.”

Second Quarter 2018 – Highlights

  • Revenue of $268.5 million, an increase of 26.7 percent, compared to $212.0 million in the second quarter of 2017.
  • GAAP gross margins of 61.4 percent in the second quarter, compared to 65.4 percent in the second quarter of 2017.
  • Non-GAAP gross margins of 69.1 percent in the second quarter, compared to 70.6 percent in the second quarter of 2017.
  • GAAP operating income of $16.6 million, compared to operating loss of $4.4 million in the second quarter of 2017.
  • Non-GAAP operating income of $66.2 million, or 24.7 percent of revenue, compared to $26.5 million, or 12.5 percent of revenue in the second quarter of 2017.
  • GAAP net income of $16.5 million, compared to net loss of $8.0 million in the second quarter of 2017.
  • Non-GAAP net income of $66.6 million, compared to $22.4 million in the second quarter of 2017.
  • GAAP net income per diluted share of $0.30 in the second quarter, compared to net loss per diluted share of $0.16 in the second quarter of 2017.
  • Non-GAAP net income per diluted share of $1.25 in the second quarter, compared to $0.44 in the second quarter of 2017.
  • $46.7 million in cash provided by operating activities, compared to $6.4 million in the second quarter of 2017.
  • Cash and investments totaled $282.6 million at June 30, 2018, compared to $273.8 million at December 31, 2017.

First Half 2018 – Highlights

  • Revenue of $519.5 million, an increase of 29.7 percent, compared to $400.6 million in the first half of 2017.
  • GAAP operating income of $28.5 million, compared to operating loss of $17.0 million in the first half of 2017.
  • Non-GAAP operating income of $118.4 million, or 22.8 percent of revenue, compared to $42.1 million, or 10.5 percent of revenue in first half of 2017.
  • GAAP benefit from taxes on income of $26.7 million, mainly due to a reversal of valuation allowance on deferred tax assets.
  • GAAP net income of $54.4 million, compared to net loss of $20.2 million in the first half of 2017.
  • Non-GAAP net income of $118.0 million, compared to $37.0 million in the first half of 2017.
  • GAAP net income per diluted share of $1.00, compared to net loss per diluted share of $0.41 in the first half of 2017.
  • Non-GAAP net income per diluted share of $2.23, compared to $0.73 in the first half of 2017.
  • $102.1 million in cash provided by operating activities, compared to $41.4 million in the first half of 2017.

Eyal Waldman continued, “In the first half of 2018 our revenue growth has proven the value of our investments and we look forward to continuing our momentum into the second half of the year. We grew our revenue almost 30% in the first half and more than doubled our non-GAAP operating income year over year. We expect our margin expansion to continue with further revenue growth and operational efficiency. We are confident that our strategy, investments and innovation will continue to produce market-leading products that drive growth for Mellanox for the rest of 2018 and beyond.”

Third Quarter 2018 Outlook

We currently project:

  • Quarterly revenue of $270 million to $280 million
  • Non-GAAP gross margins of 68.5 percent to 69.5 percent
  • Non-GAAP operating expenses of $122 million to $124 million
  • Share-based compensation expense of $19.0 million to $19.5 million
  • Non-GAAP diluted share count of 53.5 million to 54.0 million

Full Year 2018 Outlook

We currently project:

  • Revenue of $1,065 million to $1,085 million
  • Non-GAAP gross margins of 68.5 percent to 69.5 percent
  • Non-GAAP operating margin of 23.0 percent to 24.0 percent

Recent Mellanox Press Release Highlights

June 25, 2018     InfiniBand Accelerates the World-Fastest HPC and Artificial Intelligence Supercomputer at Oak Ridge National Laboratory
June 25, 2018 InfiniBand Accelerates New Large Scale Supercomputer at Forschungszentrum Jülich
June 25, 2018 InfiniBand Accelerates the Top Three Supercomputers on TOP500 Supercomputer List
June 19, 2018 InfiniBand to Connect World’s Top Arm-Based Supercomputer at Sandia National Laboratory
June 19, 2018 Mellanox Announces Agreement with Starboard
May 29, 2018 Mellanox Launches Ground-Breaking Open Hyper-Scalable Enterprise Framework
May 24, 2018 Mellanox Shareholders Overwhelmingly Support Company’s Best-in-Class Governance Proposals
May 17, 2018 Mellanox Technologies Increases Second Quarter and Full Year 2018 Outlook
May 8, 2018 Mellanox and Red Hat Deliver Enhanced Performance and Simplicity for NFV Infrastructure and Agile Cloud Data Centers
May 7, 2018 Mellanox Sends Letter to Shareholders
April 23, 2018 Eyal Waldman, CEO and President of Mellanox Technologies Receives the 2018 Global Industry Leader Award
 

Conference Call

Mellanox will hold its second quarter 2018 financial results conference call today, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time), to discuss the company’s financial results. To listen to the call, dial +1-877-876-9176, or for investors outside the U.S., +1-785-424-1667, approximately 10 minutes prior to the start time.

The Mellanox financial results conference call will be available via live webcast on the investor relations section of the Mellanox website at: http://ir.mellanox.com. A replay of the webcast will also be available on the Mellanox website after the call.

About Mellanox

Mellanox Technologies (NASDAQ: MLNX) is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance. Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at: www.mellanox.com.

Mellanox has achieved and maintained the highest ISS Quality Score possible beginning in May of 2017 and through the date of this release, July 17, 2018.

GAAP to Non-GAAP Reconciliation

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Mellanox uses non-GAAP measures of net income which are adjusted from results based on GAAP to exclude share-based compensation expense, amortization expense of acquired intangible assets, settlement costs, acquisition and other charges, restructuring charges, and income tax effects and adjustments. Settlement costs represent the charges related to the settlement of a contingent royalty obligation. Acquisition and other charges include expenses related to acquisitions of other companies and expenses related to the proxy contest. Restructuring charges include costs that are the result of restructuring, consisting of employee termination and severance costs, facilities related costs, contract cancellation charges, and impairment of long-lived assets. The purpose of income tax effects and adjustments is to exclude tax consequences associated with the above excluded expenses items, as well as the non-cash impact on the tax provision pertaining to changes in deferred tax assets associated with carryforward losses of group entities subject to tax holiday in Israel. The company believes the non-GAAP results provide useful information to both management and investors, as these non-GAAP results exclude expenses that are not indicative of our core operating results. Management believes it is useful to exclude share-based compensation expense, amortization expense of acquired intangible assets, settlement costs, acquisition and other charges, restructuring charges, and income tax effects and adjustments because it enhances investors’ ability to understand our business from the same perspective as management, which believes that such items are not directly attributable to nor reflect the underlying performance of the company’s business operations. Further, management believes certain non-cash charges such as share-based compensation, amortization of acquired intangible assets, changes related to recognition of deferred taxes and the net impact on the company’s tax provision for non-GAAP adjustments do not reflect the cash operating results of the business. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. These non-GAAP measures may be different than the non-GAAP measures used by other companies. A reconciliation of GAAP to non-GAAP condensed consolidated statements of operations is also presented in the financial statements portion of this release and is posted under the “Investor Relations” section on our website.

The company has not reconciled its non-GAAP gross margins or non-GAAP operating expenses to GAAP gross margins or GAAP operating expenses, respectively, in the outlook section of this press release, because it does not provide an outlook for GAAP gross margins or GAAP operating expenses due to uncertainty and variability of acquired intangibles, acquisition and other charges, and restructuring charges, which are reconciling items between non-GAAP gross margins and non-GAAP operating expenses, and GAAP gross margins and GAAP operating expenses, respectively. The company has not reconciled its non-GAAP diluted share count to GAAP diluted share count in this press release because it does not provide an outlook for GAAP diluted share count due to the uncertainty in its GAAP net income (loss) due to variability of GAAP gross margins and operating expenses described above. Because such items cannot be reasonably predicted and could have a significant impact on the calculation of GAAP gross margins, GAAP operating expenses and GAAP diluted share count, a reconciliation of our outlook of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort.

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

All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward-looking statements, including the outlook for the three months ending September 30, 2018 and full fiscal 2018, statements related to trends in the market for our solutions and services, opportunities for our company in 2018 and beyond, and future product capabilities. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management’s beliefs and certain assumptions made by us, all of which are subject to change.

Forward-looking statements can often be identified by words such as “projects,” “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include the continued expansion of our product line, customer base and the total available market of our products, the continued growth in demand for our products, the continued, increased demand for industry standards-based technology, our ability to react to trends and challenges in our business and the markets in which we operate, our ability to anticipate market needs or develop new or enhanced products to meet those needs, the adoption rate of our products, our ability to establish and maintain successful relationships with our OEM partners, our ability to effectively compete in our industry, fluctuations in demand, sales cycles and prices for our products and services, our success converting design wins to revenue-generating product shipments, the continued launch and volume ramp of large customer sales opportunities, our ability to protect our intellectual property rights, our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses, our success in realizing the anticipated benefits of mergers and acquisitions, and our ability to obtain debt at competitive rates or in sufficient amounts in order to fund our contractual commitments. Furthermore, the majority of our quarterly revenues are derived from customer orders received and fulfilled in the same quarterly period. We have limited visibility into actual end-user demand as such demand impacts us and our OEM customer inventory balances in any given quarter. Consequently, this introduces risk and uncertainty into our revenue and production forecasts and business planning and could negatively impact our financial results. In addition, current uncertainty in the global economic environment poses a risk to the overall economy as businesses may defer purchases in response to tighter credit conditions, changing overall demand for our products, and negative financial news. Consequently, our results could differ materially from our prior results due to these general economic and market conditions, political events and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission.

More information about the risks, uncertainties and assumptions that may impact our business is set forth in our annual report on Form 10-K filed with the SEC on February 16, 2018. All forward-looking statements in this press release, including the outlook for the three months ending September 30, 2018 and full fiscal 2018, are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Mellanox is a registered trademark of Mellanox Technologies, Ltd. All other trademarks are property of their respective owners.

 
Mellanox Technologies, Ltd.
Condensed Consolidated Statements of Operations
(in thousands, except per share data, unaudited)
 
 

Three Months Ended June 30,

 

Six Months Ended June 30,

2018   2017 2018   2017
 
Total revenues $ 268,462 $ 211,962 $ 519,462 $ 400,613
Cost of revenues 103,668   73,427   192,666   137,877  
Gross profit 164,794   138,535   326,796   262,736  
Operating expenses:
Research and development 87,152 92,348 173,578 180,839
Sales and marketing 35,673 38,110 75,167 73,867
General and administrative 23,635 12,476 40,151 24,995
Restructuring charges 1,774     9,361    
Total operating expenses 148,234   142,934   298,257   279,701  
Income (loss) from operations 16,560 (4,399 ) 28,539 (16,965 )
Interest expense (871 ) (1,996 ) (2,042 ) (3,989 )
Other income, net 533   827   1,171   1,510  
Interest and other, net (338 ) (1,169 ) (871 ) (2,479 )
Income (loss) before taxes on income 16,222 (5,568 ) 27,668 (19,444 )
Provision for (benefit from) taxes on income (304 ) 2,423   (26,701 ) 791  
Net income (loss) $ 16,526   $ (7,991 ) $ 54,369   $ (20,235 )
Net income (loss) per share — basic $ 0.31   $ (0.16 ) $ 1.04   $ (0.41 )
Net income (loss) per share — diluted $ 0.30   $ (0.16 ) $ 1.00   $ (0.41 )
Shares used in computing net income (loss) per share:
Basic 52,615 50,056 52,219 49,698
Diluted 54,466 50,056 54,149 49,698
 
Mellanox Technologies, Ltd.
Reconciliation of Non-GAAP Adjustments
(in thousands, percentages, unaudited)
 
 

Three Months Ended June 30,

 

Six Months Ended June 30,

2018   2017 2018   2017

Reconciliation of GAAP net income (loss) to non-GAAP:

GAAP net income (loss) $ 16,526 $ (7,991 ) $ 54,369 $ (20,235 )
Adjustments:
Share-based compensation expense:
Cost of revenues 415 575 826 1,056
Research and development 8,340 10,297 16,514 18,988
Sales and marketing 3,646 4,010 7,245 7,348
General and administrative 2,515   2,783   5,305   5,041  
Total share-based compensation expense 14,916 17,665 29,890 32,433
Amortization of acquired intangibles:
Cost of revenues 11,106 10,614 21,988 21,200
Research and development 194 194 386 386
Sales and marketing 2,033   2,230   4,263   4,460  

Total amortization of acquired intangibles

13,333 13,038 26,637 26,046
Settlement costs:
Cost of revenues 9,161     9,161    
Total settlement costs 9,161 9,161
Acquisition and other charges (1):
Research and development 88 153 375 436
Sales and marketing 48 208 60
General and administrative 10,366     14,197   134  
Total acquisition and other charges 10,502 153 14,780 630
Restructuring charges 1,774 9,361
Tax effects and adjustments 366   (492 ) (26,237 ) (1,843 )
Non-GAAP net income $ 66,578   $ 22,373   $ 117,961   $ 37,031  
 

Reconciliation of GAAP gross profit to non-GAAP:

Revenues $ 268,462 $ 211,962 $ 519,462 $ 400,613
GAAP gross profit 164,794 138,535 326,796 262,736
GAAP gross margin

61.4

%

65.4

%

62.9

%

65.6

%

Share-based compensation expense 415 575 826 1,056
Amortization of acquired intangibles 11,106 10,614 21,988 21,200
Settlement costs 9,161     9,161    
Non-GAAP gross profit $ 185,476   $ 149,724   $ 358,771   $ 284,992  
Non-GAAP gross margin 69.1 % 70.6 % 69.1 % 71.1 %
 

Reconciliation of GAAP operating expenses to non-GAAP:

GAAP operating expenses $ 148,234 $ 142,934 $ 298,257 $ 279,701
Share-based compensation expense (14,501 ) (17,090 ) (29,064 ) (31,377 )
Amortization of acquired intangibles (2,227 ) (2,424 ) (4,649 ) (4,846 )
Acquisition and other charges (1) (10,502 ) (153 ) (14,780 ) (630 )
Restructuring charges (1,774 )   (9,361 )  
Non-GAAP operating expenses $ 119,230   $ 123,267   $ 240,403   $ 242,848  
 
Mellanox Technologies, Ltd.
Reconciliation of Non-GAAP Adjustments
(in thousands, except per share data, unaudited)
 
 

Three Months Ended June 30,

 

Six Months Ended June 30,

2018   2017 2018   2017
 

Reconciliation of GAAP income (loss) from operations to non-GAAP:

GAAP income (loss) from operations $ 16,560 $ (4,399 ) $ 28,539 $ (16,965 )
Share-based compensation expense 14,916 17,665 29,890 32,433
Settlement costs 9,161 9,161
Amortization of acquired intangibles 13,333 13,038 26,637 26,046
Acquisition and other charges (1) 10,502 153 14,780 630
Restructuring charges 1,774     9,361    
Non-GAAP income from operations $ 66,246   $ 26,457   $ 118,368   $ 42,144  
 
Shares used in computing GAAP diluted earnings per share 54,466 50,056 54,149 49,698
Adjustments:
Effect of dilutive securities under GAAP (1,851 ) (1,930 )
Total options vested and exercisable 600   1,069   600   1,069  
Shares used in computing non-GAAP diluted earnings per share 53,215   51,125   52,819   50,767  
 
GAAP diluted net income (loss) per share $ 0.30 $ (0.16 ) $ 1.00 $ (0.41 )
Adjustments:
Share-based compensation expense 0.28 0.36 0.55 0.66
Amortization of acquired intangibles 0.24 0.26 0.49 0.53
Settlement costs 0.17 0.17
Acquisition and other charges (1) 0.19 0.27 0.01
Restructuring charges 0.03 0.17
Tax effects and adjustments 0.01 (0.01 ) (0.48 ) (0.04 )
Effect of dilutive securities under GAAP 0.04 0.08
Total options vested and exercisable (0.01 ) (0.01 ) (0.02 ) (0.02 )
Non-GAAP diluted net income per share $ 1.25   $ 0.44   $ 2.23   $ 0.73  
 
(1) Acquisition and other charges include $10.1 million and $13.5 million of expenses related to the proxy contest for the three and six months ended June 30, 2018, respectively.
 
Mellanox Technologies, Ltd.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
 
  June 30,   December 31,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 63,422 $ 62,473
Short-term investments 219,225 211,281
Accounts receivable, net 155,664 154,213
Inventories 94,484 64,657
Other current assets 12,007   14,295
Total current assets 544,802 506,919
Property and equipment, net 106,746 109,919
Severance assets 17,111 18,302
Intangible assets, net 208,450 228,195
Goodwill 473,916 472,437
Deferred taxes and other long-term assets 98,744   66,162
Total assets $ 1,449,769   $ 1,401,934
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 71,137 $ 59,090
Accrued liabilities 124,792 114,058
Deferred revenue 20,719   23,485
Total current liabilities 216,648 196,633
Accrued severance 21,464 23,205
Deferred revenue 17,791 17,820
Term debt 72,761
Other long-term liabilities 32,117   34,067
Total liabilities 288,020   344,486
Shareholders’ equity:
Ordinary shares 229 221
Additional paid-in capital 923,202 873,979
Accumulated other comprehensive income (loss) (2,182 ) 1,618
Retained earnings 240,500   181,630
Total shareholders’ equity 1,161,749   1,057,448
Total liabilities and shareholders’ equity $ 1,449,769   $ 1,401,934
 
Mellanox Technologies, Ltd.
Condensed Consolidated Statement of Cash Flows
(in thousands, unaudited)
 
  Six Months Ended June 30,
2018   2017
 
Cash flows from operating activities:
Net income (loss) $ 54,369 $ (20,235 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 52,674 50,814
Deferred income taxes (28,085 ) (704 )
Share-based compensation 29,890 32,433
Gain on investments, net (1,828 ) (1,701 )
Impairment and loss on disposal of property and equipment 1,567
Changes in assets and liabilities:
Accounts receivable (1,451 ) (7,780 )
Inventories (30,598 ) (7,679 )
Prepaid expenses and other assets 718 (2,667 )
Accounts payable 12,530 48
Accrued liabilities and other liabilities 12,334   (1,141 )
Net cash provided by operating activities 102,120   41,388  
 
Cash flows from investing activities:
Purchase of severance-related insurance policies (612 ) (651 )
Purchase of short-term investments (82,486 ) (69,110 )
Proceeds from sales of short-term investments 13,893 74,359
Proceeds from maturities of short-term investments 62,396 13,590
Proceeds from sales of property and equipment 3,239
Purchase of property and equipment (20,078 ) (27,120 )
Purchase of intangible assets (6,383 ) (1,647 )
Purchase of investments in private companies (6,000 ) (11,000 )
Acquisition, net of cash acquired (7,129 )  
Net cash used in investing activities (43,160 ) (21,579 )
 
Cash flows from financing activities:
Principal payments on term debt (74,000 ) (30,000 )
Payments on capital lease and intangible asset financings (3,446 ) (3,263 )
Proceeds from issuances of ordinary shares through employee equity incentive plans 19,341   12,396  
Net cash used in financing activities (58,105 ) (20,867 )
 
Net increase (decrease) in cash, cash equivalents, and restricted cash 855 (1,058 )
Cash, cash equivalents, and restricted cash at beginning of period 70,498   56,780  
Cash, cash equivalents, and restricted cash at end of period $ 71,353   $ 55,722  

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The Container Store Group, Inc. Announces First Quarter Fiscal 2018 Earnings Conference Call

DALLAS–()–The Container Store Group, Inc. (NYSE:TCS) today announced that its first quarter of fiscal 2018 financial results will be released after market close on Tuesday, July 31, 2018. The Company will host a conference call at 4:30 p.m. Eastern Time to discuss the financial results. This call will include both live, prepared remarks as well as a Q&A session.

Investors and analysts interested in participating in the call are invited to dial 877-407-3982 (international callers please dial 201-493-6780) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at investor.containerstore.com.

A taped replay of the conference call will be available within two hours of the conclusion of the call and can be accessed both online and by dialing 844-512-2921 (international callers please dial 412-317-6671). The pin number to access the telephone replay is 13681548. The replay will be available until August 31, 2018.

About The Container Store, Inc.

The Container Store (NYSE:TCS) is the nation’s leading retailer of storage and organization products — a concept they originated in 1978. Today, with locations nationwide, the retailer offers more than 10,000 products designed to help customers accomplish their storage and organization projects and maximize any size space. The Container Store also offers a suite of custom closet systems, and a wide variety of convenient online and mobile shopping services. Visit www.containerstore.com for more information about store locations, the product collection and services offered. Visit www.containerstore.com/blog for inspiration, tips and real solutions to everyday organization challenges, and www.whatwestandfor.com to learn more about the company’s unique culture.

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