The NBA’s Billion-Dollar Bear Market

Isaiah Thomas was looking forward to this summer. One year ago, he dreamed of signing a five-year contract that would pay him almost $180 million, including more in the first season than he’d banked in his entire NBA career. Instead he signed a one-year, $2.1 million deal—the least amount of money any team could pay him. He went from a maximum contract to a minimum contract.

He’s an extreme but unfortunate example of the curious economy in today’s NBA.

https://www.wsj.com/articles/nba-free-agency-billion-dollar-bear-market-1533048001?mod=pls_whats_news_us_business_f

Ocular Therapeutix™ To Report Second Quarter 2018 Financial Results

BEDFORD, Mass.–()–Ocular Therapeutix™, Inc. (NASDAQ: OCUL), a biopharmaceutical company focused on the formulation, development, and commercialization of innovative therapies for diseases and conditions of the eye, today announced that it will report second quarter ended June 30, 2018 financial results on Tuesday, August 7, 2018. Following distribution of the earnings release via wire services, the Ocular Therapeutix management team will host a live conference call and webcast at 4:30 p.m. Eastern Time to review the Company’s financial results and provide a general business update.

The live webcast can be accessed by visiting the Investors section of the Company’s website at investors.ocutx.com. Please connect at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. Alternatively, please call (844) 464-3934 (U.S.) or (765) 507-2620 (International) to listen to the live conference call. The conference ID number for the live call will be 7875199. An archive of the webcast will be available until November 7, 2018 on the Company’s website.

About Ocular Therapeutix, Inc.

Ocular Therapeutix, Inc. is a biopharmaceutical company focused on the formulation, development, and commercialization of innovative therapies for diseases and conditions of the eye using its proprietary bioresorbable hydrogel-based formulation technology. Ocular Therapeutix has resubmitted an NDA for post-surgical pain for its lead product candidate, DEXTENZA® (dexamethasone insert), which has completed Phase 3 clinical development for the treatment of ocular pain and inflammation following ophthalmic surgery. OTX-TP (travoprost insert) is in Phase 3 clinical development for the reduction of intraocular pressure in patients with primary open-angle glaucoma and ocular hypertension. The Company’s earlier stage assets include OTX-TIC, an extended-delivery travoprost intracameral implant for the reduction of intraocular pressure in patients with glaucoma and ocular hypertension, as well as sustained release intravitreal implants for the treatment of retinal diseases. These intravitreal implants include OTX-TKI, a tyrosine kinase inhibitor (TKI), and, in collaboration with Regeneron, OTX-IVT, an extended-delivery protein-based anti-vascular endothelial growth factor (VEGF) trap, both for the treatment of retinal diseases. Ocular Therapeutix’s first product, ReSure® Sealant, is FDA-approved to seal corneal incisions following cataract surgery.

http://www.businesswire.com/news/home/20180731005845/en/Ocular-Therapeutix%E2%84%A2-Report-Quarter-2018-Financial-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

BKF Capital Group, Inc. Reports Second Quarter 2018 Results

WESTLAKE VILLAGE, Calif.–()–BKF Capital Group, Inc. (OTC: BKFG), a closely-held holding company that provides capital primarily in the form of share ownership, today announced net income of $192,000 or $0.27 per share, for the three months ended June 30, 2018. For the three months ended June 30, 2017, the Company recorded a net loss of $10,000 or $0.00 per share. For the six months ended June 30, 2018, BKF Capital reported a net loss of $763,000 or $1.08 per share, compared to a net loss of $20,000 for the six months ended June 30, 2017 or $0.00 per share.

The 2017 results do not include unrealized gains and losses in marketable securities. Effective January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, that amends existing guidance around classification and measurement of certain financial assets and liabilities. Under ASU 2016-1, unrealized gains or losses on marketable securities are now recognized through earnings. Prior to January 1, 2018, unrealized gains and losses were recognized in other comprehensive income. For the three months ended June 30, 2017, the Company recorded net unrealized losses in other comprehensive income of $543,000 or $0.77 per share. For the six months ended June 30, 2017 the Company recorded net unrealized gains in other comprehensive income of $1,463,000 or $2.06 per share.

“BKF continues to be well funded and through our wholly owned subsidiary, BKF Asset Holdings, Inc., we will continue to pursue strategic investments in securities, often representing controlling positions, to seek long-term growth,” stated Steven N. Bronson, CEO of BKF Capital Group, Inc. “While we are always looking to generate value opportunities through investments, in the short-term we are focusing our resources and attention to permanently resolving legacy environmental remediation exposure.” The Company is responding to a claim received under the Comprehensive Environmental Response, Compensation, and Liability Act. The claim is a remediation of certain pesticides and other chemicals used on land owned by the Company from 1971 to 1999.

Mr. Bronson continued, “We believe that the Company has valid factual and legal defenses to this claim and we are vigorously defending the claim. The Company has no specific reserve for this action as the matter contains a reasonable degree of uncertainty and the Company believes it will prevail on the merits of the case.”

Over a period of July 5 through July 18, 2018, subsequent to quarter-end, the Company sold its remaining shares of Coda Octopus Group for cash proceeds of $4.2 million. This represents a realized gain of $1.9 million over adjusted carrying value, and a realized gross gain of $3.4 million over original cost basis. The $1.9 million realized gain, or $2.68 per share, will be recognized in the third quarter of 2018.

Mr. Bronson continued, “We are pleased with our investment performance, particularly with Coda Octopus Group (NASDAQ: CODA). Over the twenty-six month period, we were able to realize a 475% return on our investment. We are actively seeking similar opportunities to reinvest in high-growth companies.”

About BKF Capital Group, Inc.

BKF Capital Group, Inc. is a holding company that invests in innovative and high-growth technology companies. We make capital investments through our wholly owned subsidiary, BKF Asset Holdings, Inc. Our most prominent assets are Interlink Electronics, Inc. (NASDAQ:LINK), a global leader in human-machine interface and sensor technologies, and Qualstar Corporation (NASDAQ:QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies.

Our principal executive office is located at 31248 Oak Crest Drive, Suite 110, Westlake Village, CA 91361. The Company’s securities were registered under Section 12(g) of the Securities Exchange Act of 1934. On May 20, 2015, we filed Form 15 to terminate the registration and reporting obligations under Section 12(g). Since May 20, 2015, we make available our annual financial statements, quarterly financial statements, and other significant reports and amendments to such reports, free of charge, on our website as soon as reasonably practicable after such reports are prepared. Our website address is www.bkfcapital.com.

Forward Looking Statements

This release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company’s views on future financial performance and are generally identified by phrases such as “thinks,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management’s own knowledge and assessment of the Company’s industry, competition and capital requirements. Other factors and uncertainties that could affect the Company’s forward-looking statements include, among other things, the following: our success in predicting markets and success of the companies we invest in; efficient management of our infrastructure; the pace of technological developments and industry standards evolution and their effect on our market choices; competition by alternative sophisticated as well as generic investors; risks of international investments and operations including fluctuations in exchange rates; and compliance with regulatory requirements applicable to our operations. These and other risks are more fully described in the Company’s most recently filed quarterly financial statements, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Appendix:

Consolidated financial information for period ended June 30, 2018 can be found on our website www.bkfcapital.com:
Quarter ended June 30, 2018

http://www.businesswire.com/news/home/20180731005809/en/BKF-Capital-Group-Reports-Quarter-2018-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

EVERTEC Reports Second Quarter 2018 Results

SAN JUAN, Puerto Rico–()–EVERTEC, Inc. (NYSE: EVTC) (“Evertec” or the “Company”) today announced results for the second quarter ended June 30, 2018.

Second Quarter 2018 and Recent Highlights

  • Revenue grew 10% to $113.3 million
  • GAAP Net Income attributable to common shareholders was $20.1 million or $0.27 per diluted share flat when compared with the prior year
  • Adjusted EBITDA increased 7% to $53.8 million
  • Adjusted earnings per common share was $0.46, an increase of 5%
  • Quarterly dividend reinstated at $0.05 per share

Six-Month Year-to-Date 2018 Highlights

  • Revenue grew 9% to $223.6 million
  • GAAP Net Income attributable to common shareholders was $43.1 million or $0.58 per diluted share
  • Adjusted EBITDA increased 9% to $107.7 million
  • Adjusted earnings per common share was $0.93, an increase of 4%

Mac Schuessler, President and Chief Executive Officer stated, “We are pleased with our second quarter financial results and given our expectation for the remainder of the year, we have increased our 2018 guidance.”

Second Quarter 2018 Results

Revenue. Total revenue for the quarter ended June 30, 2018 was $113.3 million an increase of 10% compared with $103.5 million in the prior year. Revenue growth in the quarter reflected the impact of the acquisition of PayGroup as well as elevated sales volumes in Puerto Rico driven by post-hurricane recovery activity, federal relief and benefit programs and insurance proceeds.

Net Income attributable to common shareholders. For the quarter ended June 30, 2018, GAAP Net Income attributable to common shareholders was $20.1 million, or $0.27 per diluted share, flat as compared to the prior year.

Adjusted EBITDA. For the quarter ended June 30, 2018, Adjusted EBITDA was $53.8 million, an increase of 7% compared to the prior year. Adjusted EBITDA margin (Adjusted EBITDA as a percentage of total revenues) decreased 100 basis points to 47.4% compared with 48.4% in the prior year. The decrease in Adjusted EBITDA margin was primarily driven by the impact of PayGroup’s lower margin contribution, which was partially offset by other revenue mix changes and the benefit of expense management actions.

Adjusted Net Income. For the quarter ended June 30, 2018, Adjusted Net Income was $34.5 million, an increase of 7% compared with $32.2 million in the prior year and included the impact of increased interest expense and a higher tax rate in the current year. Adjusted earnings per common share was $0.46, an increase of 5% as compared to $0.44 in the prior year.

2018 Outlook

The Company is increasing its financial outlook for 2018 as follows:

  • Total consolidated revenue between $435 million and $445 million representing growth of 7% to 9%
  • Adjusted earnings per common share guidance of $1.68 to $1.77 representing a range of 14% to 20% as compared to $1.47 in 2017
  • Capital expenditures ranging between $35 and $40 million
  • Non-GAAP effective tax rate ranging between 13% to 14%.

Earnings Conference Call and Audio Webcast

The Company will host a conference call to discuss its second quarter 2018 financial results today at 4:30 p.m. ET. Hosting the call will be Mac Schuessler, President and Chief Executive Officer, and Peter Smith, Executive Vice President and Chief Financial Officer. The conference call can be accessed live over the phone by dialing (888) 338-7153 or for international callers by dialing (412) 317-5117. A replay will be available one hour after the end of the conference call and can be accessed by dialing (877) 344-7529 or (412) 317-0088 for international callers; the pin number is 10122245. The replay will be available through Tuesday, August 7, 2018. The call will be webcast live from the Company’s website at www.evertecinc.com under the Investor Relations section or directly at http://ir.evertecinc.com. A supplemental slide presentation that accompanies this call and webcast can be found on the investor relations website at ir.evertecinc.com and will remain available after the call.

About Evertec

EVERTEC, Inc. (NYSE: EVTC) is a leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business solutions services. The Company manages a system of electronic payment networks that process more than two billion transactions annually and offers a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, Evertec owns and operates the ATH® network, one of the leading personal identification number (“PIN”) debit networks in Latin America. Based in Puerto Rico, the Company operates in 26 Latin American countries and serves a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions. For more information, visit www.evertecinc.com.

Use of Non-GAAP Financial Information

The non-GAAP measures referenced in this release material are supplemental measures of the Company’s performance and are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America (“GAAP”). They are not measurements of the Company’s financial performance under GAAP and should not be considered as alternatives to total revenue, net income or any other performance measures derived in accordance with GAAP or as alternatives to cash flows from operating activities, as indicators of operating performance or as measures of the Company’s liquidity. In addition to GAAP measures, management uses these non-GAAP measures to focus on the factors the Company believes are pertinent to the daily management of the Company’s operations and believes that they are also frequently used by analysts, investors and other interested parties to evaluate companies in the industry. Reconciliations of the non-GAAP measures to the most directly comparable GAAP measure are included in the schedules to this release. These non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share and are defined below.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments. This measure is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. For this reason, Adjusted EBITDA, as it relates to our segments, is presented in conformity with Accounting Standards Codification 280, Segment Reporting, and is excluded from the definition of non-GAAP financial measures under the Securities and Exchange Commission’s Regulation G and Item 10(e) of Regulation S-K. Our presentation of Adjusted EBITDA is substantially consistent with the equivalent measurements that are contained in the senior secured credit facilities in testing EVERTEC Group’s compliance with covenants therein such as the senior secured leverage ratio.

Adjusted Net Income is defined as net income adjusted to exclude unusual items and other adjustments.

Adjusted Earnings per common share is defined as Adjusted Net Income divided by diluted shares outstanding.

We use Adjusted Net Income to measure our overall profitability because we believe it better reflects our comparable operating performance by excluding the impact of the non-cash amortization and depreciation that was created as a result of Apollo Global Management LLC’s acquisition of a 51% indirect ownership in EVERTEC Group. In addition, in evaluating EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per common share, you should be aware that in the future we may incur expenses such as those excluded in calculating them. Further, our presentation of these measures should not be construed as an inference that our future operating results will not be affected by unusual or nonrecurring items.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of EVERTEC to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” and “plans” and similar expressions of future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements.

Various factors that could cause actual future results and other future events to differ materially from those estimated by management include, but are not limited to: the Company’s reliance on its relationship with Popular for a significant portion of revenue; our ability to renew our client contracts on terms favorable to us; the effectiveness of our risk management procedures; our dependence on our processing systems, technology infrastructure, security systems and fraudulent-payment-detection systems, and the risk that our systems may experience breakdowns or fail to prevent security breaches or fraudulent transfers; our ability to develop, install and adopt new technology; a decreased client base due to consolidations in the banking and financial-services industry; the credit risk of our merchant clients, for which we may also be liable; the continuing market position of the ATH® network; reduction in consumer confidence leading to decreased consumer spending; the Company’s dependence on credit card associations; regulatory limitations on our activities, including the potential need to seek regulatory approval to consummate transactions, due to our relationship with Popular and our role as a service provider to financial institutions; changes in the regulatory environment and changes in international, legal, tax, political, administrative or economic conditions; the geographical concentration of the Company’s business in Puerto Rico; operating an international business in multiple regions with potential political and economic instability; increased compliance risks associated with operating an international business; operating in countries and counterparties that put us at risk of violating U.S. sanctions laws; our ability to execute our expansion and acquisition strategies; our ability to protect our intellectual property rights; our ability to recruit and retain qualified personnel; our ability to comply with federal, state, and local regulatory requirements; evolving industry standards; the Company’s high level of indebtedness and restrictions contained in the Company’s debt agreements; and the Company’s ability to generate sufficient cash to service the Company’s indebtedness and to generate future profits.

Consideration should be given to the areas of risk described above, as well as those risks set forth under the headings “Forward-Looking Statements” and “Risk Factors” in the reports the Company files with the SEC from time to time, in connection with considering any forward-looking statements that may be made by the Company and its businesses generally. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

EVERTEC, Inc.

Schedule 1: Unaudited Consolidated Condensed Statements of Income and Comprehensive Income

   
Three months ended June 30, Six months ended June 30,
2018   2017 2018   2017
(Dollar amounts in thousands, except share data)    
Revenues $ 113,347   $ 103,511   $ 223,621   $ 204,791  
 
Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below 49,131 43,030 96,551 87,203
Selling, general and administrative expenses 17,848 14,588 31,280 25,419
Depreciation and amortization 15,728   15,899   31,595   31,583  
Total operating costs and expenses 82,707   73,517   159,426   144,205  
Income from operations 30,640   29,994   64,195   60,586  
Non-operating income (expenses)
Interest income 164 216 321 401
Interest expense (7,665 ) (7,406 ) (15,344 ) (14,442 )
Earnings of equity method investment 175 115 374 258
Other income (expense) (69 ) 1,363   748   2,637  
Total non-operating expenses (7,395 ) (5,712 ) (13,901 ) (11,146 )
Income before income taxes 23,245 24,282 50,294 49,440
Income tax expense 3,112   4,068   7,047   6,088  
Net income 20,133 20,214 43,247 43,352
Less: Net income attributable to non-controlling interest 81   125   173   234  
Net income attributable to EVERTEC, Inc.’s common stockholders 20,052 20,089 43,074 43,118
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments (4,307 ) (1,956 ) (1,900 ) (2,601 )
Gain on cash flow hedge 387   (242 ) 1,890   376  
Total comprehensive income attributable to EVERTEC, Inc.’s common stockholders $ 16,132 $ 17,891 $ 43,064 $ 40,893
Net income per common share:
Basic $ 0.28 $ 0.28 $ 0.59 $ 0.59
Diluted $ 0.27 $ 0.27 $ 0.58 $ 0.59
Shares used in computing net income per common share:
Basic 72,637,733 72,508,852 72,524,228 72,572,157
Diluted 74,389,126 73,074,591 73,905,690 73,087,387

EVERTEC, Inc.

Schedule 2: Unaudited Consolidated Condensed Balance Sheets

   
(Dollar amounts in thousands) June 30, 2018 December 31, 2017
Assets
Current Assets:
Cash and cash equivalents $ 59,333 $ 50,423
Restricted cash 11,076 9,944
Accounts receivable, net 82,447 83,328
Prepaid expenses and other assets 29,444   25,011  
Total current assets 182,300 168,706
Investment in equity investee 13,335 13,073
Property and equipment, net 38,336 37,924
Goodwill 397,221 398,575
Other intangible assets, net 266,253 279,961
Deferred tax asset 1,071 988
Other long-term assets 5,653   3,561  
Total assets $ 904,169   $ 902,788  
Liabilities and stockholders’ equity
Current Liabilities:
Accrued liabilities $ 41,822 $ 38,451
Accounts payable 34,561 41,135
Unearned income 9,633 7,737
Income tax payable 3,892 1,406
Current portion of long-term debt 21,820 46,487
Short-term borrowings   12,000  
Total current liabilities 111,728 147,216
Long-term debt 547,551 557,251
Deferred tax liability 12,976 13,820
Unearned income – long term 24,049 23,486
Other long-term liabilities 10,502   13,039  
Total liabilities 706,806   754,812  
Stockholders’ equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued

Common stock, par value $0.01; 206,000,000 shares authorized; 72,717,138
shares issued and outstanding at June 30, 2018 (December 31, 2017 – 72,393,933)

727 723
Additional paid-in capital 10,654 5,350
Accumulated earnings 192,819 148,887
Accumulated other comprehensive loss, net of tax (10,858 ) (10,848 )
Total EVERTEC, Inc. stockholders’ equity 193,342 144,112
Non-controlling interest 4,021   3,864  
Total equity 197,363   147,976  
Total liabilities and equity $ 904,169   $ 902,788  

EVERTEC, Inc.

Schedule 3: Unaudited Consolidated Condensed Statements of Cash Flows

 
Six months ended June 30,
2018   2017
Cash flows from operating activities
Net income $ 43,247 $ 43,352
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 31,595 31,583
Amortization of debt issue costs and accretion of discount 2,361 2,490
Provision for doubtful accounts and sundry losses 369 107
Deferred tax benefit (1,113 ) (1,799 )
Share-based compensation 7,322 4,189
Loss on disposition of property and equipment and other intangibles 11 176
Earnings of equity method investment (374 ) (258 )
Dividend received from equity method investment 390
(Increase) decrease in assets:
Accounts receivable, net 811 953
Prepaid expenses and other assets (4,236 ) (6,067 )
Other long-term assets (333 ) 188
(Decrease) increase in liabilities:
Accounts payable and accrued liabilities (8,856 ) (9,215 )
Income tax payable 2,487 932
Unearned income 3,102 4,126
Other long-term liabilities 73   297  
Total adjustments 33,609   27,702  
Net cash provided by operating activities 76,856   71,054  
Cash flows from investing activities
Additions to software (9,015 ) (9,989 )
Property and equipment acquired (6,837 ) (5,485 )
Proceeds from sales of property and equipment 14   25  
Net cash used in investing activities (15,838 ) (15,449 )
Cash flows from financing activities
Statutory withholding taxes paid on share-based compensation (2,014 ) (1,485 )
Net (decrease) increase in short-term borrowings (12,000 ) 20,000
Repayment of short-term borrowing for purchase of equipment and software (700 ) (996 )
Dividends paid (14,523 )
Repurchase of common stock (7,671 )
Repayment of long-term debt (36,262 ) (9,707 )
Net cash used in financing activities (50,976 ) (14,382 )
Net increase in cash, cash equivalents and restricted cash 10,042 41,223
Cash, cash equivalents and restricted cash at beginning of the period 60,367   60,032  
Cash, cash equivalents and restricted cash at end of the period $ 70,409   $ 101,255  

EVERTEC, Inc.

Schedule 4: Unaudited Segment Information

 
Three months ended June 30, 2018
(In thousands)

Payment
Services –
Puerto Rico & Caribbean

 

Payment
Services –
Latin America

 

Merchant
Acquiring, net

 

Business
Solutions

 

Corporate and Other (1)

 

Total

 
Revenues $ 28,043 $ 19,236 $ 25,964 $ 49,233 $ (9,129 ) $ 113,347
Operating costs and expenses 13,130 18,407 14,112 30,351 6,707 82,707
Depreciation and amortization 2,409 2,249 421 3,520 7,129 15,728
Non-operating income (expenses) 551   1,401   4   66   (1,916 ) 106
EBITDA 17,873   4,479   12,277   22,468   (10,623 ) 46,474
Compensation and benefits (2) 485 317 360 684 2,627 4,473
Transaction, refinancing and other fees (3)     1     2,820   2,821
Adjusted EBITDA $ 18,358   $ 4,796   $ 12,638   $ 23,152   $ (5,176 ) $ 53,768
 
(1)   Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $9.1 million processing fee from Payments Services – Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2) Primarily represents share-based compensation, other compensation expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.
  Three months ended June 30, 2017
(In thousands)

Payment
Services –
Puerto Rico & Caribbean

 

Payment
Services –
Latin America

 

Merchant
Acquiring, net

 

Business
Solutions

 

Corporate and Other (1)

 

Total

 
Revenues $ 27,144 $ 12,973 $ 23,506 $ 48,672 $ (8,784 ) $ 103,511
Operating costs and expenses 11,682 13,603 13,688 29,600 4,944 73,517
Depreciation and amortization 2,269 1,848 596 4,082 7,104 15,899
Non-operating income (expenses) 556   2,724     3   (1,805 ) 1,478
EBITDA 18,287   3,942   10,414   23,157   (8,429 ) 47,371
Compensation and benefits (2) 125 156 121 286 1,439 2,127
Transaction, refinancing and other fees (3)         632   632
Adjusted EBITDA $ 18,412   $ 4,098   $ 10,535   $ 23,443   $ (6,358 ) $ 50,130
 
(1)   Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $8.8 million processing fee from Payments Services – Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2) Primarily represents share-based compensation, other compensation expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.
  Six months ended June 30, 2018
(In thousands) Payment
Services –
Puerto Rico & Caribbean
  Payment
Services –
Latin America
  Merchant
Acquiring, net
  Business
Solutions
  Corporate and Other (1)   Total
 
Revenues $ 55,211 $ 39,627 $ 49,343 $ 97,154 $ (17,714 ) $ 223,621
Operating costs and expenses 26,063 36,467 27,253 59,366 10,277 159,426
Depreciation and amortization 4,725 4,698 841 7,039 14,292 31,595
Non-operating income (expenses) 1,367   3,214   8   366   (3,833 ) 1,122
EBITDA 35,240   11,072   22,939   45,193   (17,532 ) 96,912
Compensation and benefits (2) 678 717 550 1,124 5,233 8,302
Transaction, refinancing and other fees (3) (250 )   1     2,771   2,522
Adjusted EBITDA $ 35,668   $ 11,789   $ 23,490   $ 46,317   $ (9,528 ) $ 107,736
 
(1)   Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $17.7 million processing fee from Payments Services – Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2) Primarily represents share-based compensation, other compensation expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.
  Six months ended June 30, 2017
(In thousands) Payment
Services –
Puerto Rico & Caribbean
  Payment
Services –
Latin America
  Merchant
Acquiring, net
  Business
Solutions
  Corporate and Other (1)   Total
 
Revenues $ 53,596 $ 25,937 $ 45,991 $ 96,669 $ (17,402 ) $ 204,791
Operating costs and expenses 23,484 25,869 27,101 59,365 8,386 144,205
Depreciation and amortization 4,418 3,719 1,195 8,096 14,155 31,583
Non-operating income (expenses) 1,109   5,455   1   3   (3,673 ) 2,895
EBITDA 35,639   9,242   20,086   45,403   (15,306 ) 95,064
Compensation and benefits (2) 224 307 216 512 2,944 4,203
Transaction, refinancing and other fees (3) (660 )       682   22
Adjusted EBITDA $ 35,203   $ 9,549   $ 20,302   $ 45,915   $ (11,680 ) $ 99,289
 
(1)   Corporate and Other consists of corporate overhead, certain leveraged activities, other non-operating expenses and intersegment eliminations. Intersegment eliminations predominantly reflect the $17.4 million processing fee from Payments Services – Puerto Rico and Caribbean to Merchant Acquiring and cost transfer fees from Corporate and Other to Payment Services Latin America for leveraged services and management fees.
(2) Primarily represents share-based compensation, other compensation expense and severance payments.
(3) Primarily represents fees and expenses associated with corporate transactions as defined in the Credit Agreement.

EVERTEC, Inc.

Schedule 5: Reconciliation of GAAP to Non-GAAP Operating Results

   
Three months ended June 30, Six months ended June 30,
(Dollar amounts in thousands, except share data) 2018   2017 2018   2017
Net income $ 20,133 $ 20,214 $ 43,247 $ 43,352
Income tax expense 3,112 4,068 7,047 6,088
Interest expense, net 7,501 7,190 15,023 14,041
Depreciation and amortization 15,728   15,899   31,595   31,583  
EBITDA 46,474 47,371 96,912 95,064
Equity income (1) 258 (115 ) 59 (258 )
Compensation and benefits (2) 4,473 2,127 8,302 4,203
Transaction, refinancing and other fees (3) 2,563   747   2,463   280  
Adjusted EBITDA 53,768 50,130 107,736 99,289
Operating depreciation and amortization (4) (7,223 ) (7,696 ) (14,544 ) (15,157 )
Cash interest expense, net (5) (6,555 ) (6,036 ) (12,923 ) (11,738 )
Income tax expense (6) (5,367 ) (4,072 ) (10,934 ) (6,969 )
Non-controlling interest (7) (126 ) (170 ) (264 ) (325 )
Adjusted net income $ 34,497   $ 32,156   $ 69,071   $ 65,100  
Net income per common share (GAAP):
Diluted $ 0.27 $ 0.27 $ 0.58 $ 0.59
Adjusted Earnings per common share (Non-GAAP):
Diluted $ 0.46 $ 0.44 $ 0.93 $ 0.89
Shares used in computing adjusted earnings per common share:
Diluted 74,389,126 73,074,591 73,905,690 73,087,387
 
1)   Represents the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., net of cash dividends received.
2)

Primarily represents share-based compensation and other compensation expense of $3.7 million and $2.2 million for the quarters ended June 30, 2018 and 2017 and severance payments $0.8 million for the quarter ended June 30, 2018. Primarily represents share-based compensation and other compensation expense of $7.3 million and $4.2 million for the six months ended June 30, 2018 and 2017 and severance payments $1.0 million and $0.1 million for the same periods, respectively.

3) Represents fees and expenses associated with corporate transactions as defined in the Credit Agreement, recorded as part of selling, general and administrative expenses and cost of revenues.
4) Represents operating depreciation and amortization expense, which excludes amounts generated as a result of the Merger and other from purchase accounting intangibles generated from acquisitions.
5) Represents interest expense, less interest income, as they appear on our consolidated statements of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issue costs, premium and accretion of discount.
6) Represents income tax expense calculated on adjusted pre-tax income using the applicable GAAP tax rate.
7) Represents the 35% non-controlling equity interest in Processa, net of amortization for intangibles created as part of the purchase.

EVERTEC, Inc.

Schedule 6: Outlook Summary and Reconciliation to Non-GAAP Adjusted Earnings per Share

     
2018 Outlook

2017 Actual

(Dollar amounts in millions, except share data)    
 
Revenues $ 435 to $ 445 $ 407
 
Earnings per Share (EPS) – Diluted (GAAP) $ 1.07 to $ 1.16 $ 0.76
 
Per share adjustment to reconcile GAAP EPS to Non-GAAP Adjusted EPS:
Share-based comp, non-cash equity earnings and other (1) $ 0.23 $ 0.23 $ 0.33
Merger related depreciation and amortization (2) $ 0.42 $ 0.42 $ 0.42
Non-cash interest expense (3) $ 0.07 $ 0.07 $ 0.07
Tax effect of non-GAAP adjustments (4) $ (0.10 ) $ (0.10 ) $ (0.10 )
Non-controlling interest (5) $ (0.01 ) $ (0.01 ) $ (0.01 )
Total adjustments $ 0.61 $ 0.61 $ 0.71
 
Adjusted Earnings per common share (Non-GAAP) $ 1.68 to $ 1.77 $ 1.47
Shares used in computing adjusted earnings per share (in millions) 74.2 72.9
 
1)   Represents share based compensation, the elimination of non-cash equity earnings from our 19.99% equity investment in Consorcio de Tarjetas Dominicanas S.A., and other adjustments to reconcile GAAP EPS to Non-GAAP EPS.
2) Represents depreciation and amortization expenses amounts generated as a result of the Merger and other M&A transactions.
3) Represents non-cash amortization of the debt issue costs, premium and accretion of discount.
4) Represents income tax expense on non-GAAP adjustments using the applicable GAAP tax rate ranging between 13% to 14%.
5) Represents the 35% non-controlling equity interest in Processa, net of amortization of intangibles created as part of the purchase.

http://www.businesswire.com/news/home/20180731005904/en/EVERTEC-Reports-Quarter-2018-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Qumu Announces Second Quarter 2018 Results, Reports Strong License Revenue Growth

MINNEAPOLIS–()–Qumu Corporation (NASDAQ: QUMU) today reported financial results for the second quarter ending June 30, 2018. The Company reported strong growth in both license revenue and sales pipeline, increasing gross margins, paydown of its long-term debt, and reiteration of its 2018 full year revenue guidance.

Second quarter 2018 revenue was $7.6 million, compared to $6.7 million in the second quarter 2017, and net loss for the second quarter 2018 was $(1.5) million, or $(0.16) per diluted share, compared to a net loss of $(2.6) million, or $(0.28) per diluted share, in the second quarter 2017. Second quarter adjusted EBITDA, a non-GAAP measure, was $71,000 for the second quarter 2018, compared to $(1.0) million for the second quarter 2017.

“During the second quarter of 2018 we not only brought revenue into line, but also created a strong balance sheet by monetizing our investment in BriefCam,” said Vern Hanzlik, Qumu’s President and CEO. “Now we are focused on carrying that momentum through the second half of 2018, as our software-as-a-service video solutions gain traction within the enterprise.”

For the six months ended June 30, 2018, revenue was $12.5 million, compared to $13.4 million last year, and net loss was $(6.1) million, or a loss of $(0.64) per diluted share, compared to $(6.2) million, or a loss of $(0.66) per diluted share, last year. For the six months ended June 30, 2018, adjusted EBITDA was negative $(2.8) million, compared to negative adjusted EBITDA of $(3.0) million last year.

The year-over-year revenue comparisons were negatively impacted by approximately $240,000 and $424,000 for the three and six months ended June 30, 2018, respectively, due to the adoption of the new revenue recognition standard (ASC Topic 606). Additionally, the loss of a large customer, which was previously announced as lost in the fourth quarter 2017, negatively impacted the year-over-year revenue comparisons by approximately $800,000 and $1.6 million in the three and six months ended June 30, 2018, respectively. The Company incurred severance expense relating to cost reduction initiatives of $6,000 and $16,000 in the three months ended June 30, 2018 and 2017, respectively, and $168,000 and $123,000 for the six months ended June 30, 2018 and 2017, respectively.

Other Financial Highlights

  • Software license and appliance revenue was $2.9 million and $0.9 million for the three months ended June 30, 2018 and 2017, respectively, and $3.3 million and $2.1 million for the six months ended June 30, 2018 and 2017, respectively, with the increases attributable to both new license sales and expansion of existing customers.
  • Subscription, maintenance and support revenue was $4.1 million and $5.1 million for the three months ended June 30, 2018 and 2017, respectively, and $8.2 million and $9.9 million for the six months ended June 30, 2018 and 2017, respectively. The year-over-year revenue comparisons were negatively impacted by approximately $246,000 and $443,000 for the three and six months ended June 30, 2018, respectively, due to the adoption of the new revenue recognition standard (ASC Topic 606). Additionally, the loss of a large customer which was previously announced as lost in the fourth quarter 2017, negatively impacted the year-over-year revenue comparisons by approximately $800,000 and $1.6 million in the three and six months ended June 30, 2018, respectively.
  • Offsetting for the negative impacts noted above is growth in our core business and subscription growth. Contributing to subscription, maintenance and support revenue in the current period was the arrangement with iStudy Co. Ltd., Qumu’s sales partner in Japan. iStudy has agreed to pay Qumu $1 million in non-refundable Qumu Cloud license fees to expand the strategic relationship between the companies.
  • Gross margin for the second quarter 2018 was 68.5%, compared to 65.6% for the second quarter 2017. Gross margin for the six months ended June 30, 2018 was 63.7%, compared to 63.6% for the six months ended June 30, 2017. The change in gross margin compared to the prior year periods was favorably impacted by increased perpetual license revenue in the quarter.
  • Cash and cash equivalents totaled $5.2 million as of June 30, 2018, compared to $7.7 million as of December 31, 2017, reflecting the 2018 first half operating loss offset by changes in working capital.
  • Subsequent to June 30, 2018, the Company received net cash proceeds of $9.6 million on July 6, 2018 from the sale of its investment in BriefCam Ltd., which was recently acquired by Canon Inc.
  • From the BriefCam net proceeds, the Company paid on July 19, 2018 $6.0 million of principal and $463,000 of accrued interest on its outstanding term loan with ESW Holdings, Inc. As of July 20, 2018, after the receipt of BriefCam proceeds and prepayment on its outstanding term loan, the Company had cash on hand of $7.3 million.

Given the performance to date and sales pipeline, the Company is confident in the achievement of its previously issued revenue guidance for the full year 2018. Core bookings growth is expected to be 25% in 2018, emphasizing growth in sales of the Qx platform. Revenue for 2018 is expected to be approximately $25 million, which includes an approximately $1.1 million unfavorable revenue impact due to the adoption of the new revenue recognition standard (ASC Topic 606) in 2018, as well as the loss of a large customer in the fourth quarter 2017, representing revenue of approximately $3.2 million annually. Gross margin percentage is expected to be in the mid to high 60s. Adjusted EBITDA for 2018 is expected to be approximately $(3.5) million, which is unchanged from previously issued guidance. The Company expects to achieve positive adjusted EBITDA, a non-GAAP measure, in the fourth quarter 2018. Adjusted EBITDA for 2018 excludes the net gain of approximately $5.2 million on the sale of BriefCam Ltd. and subsequent paydown of term debt, stock-based compensation expense of approximately $1.0 million, amortization of acquired intangible assets of approximately $2.1 million, depreciation expense of approximately $0.5 million, income tax benefit of approximately $0.2 million, and interest expense of approximately $1.8 million. Net loss for 2018 is expected to be approximately $(3.5) million, which includes the gain on the sale of its investment in BriefCam Ltd. in the third quarter 2018 and results for the six months ended June 30, 2018.

Conference Call
The Company has scheduled a conference call and webcast to review its second quarter 2018 results tomorrow, August 1, 2018 at 10:00 a.m. Eastern Time. The dial-in number for the conference call is 877-456-6914 for domestic participants and 929-387-3794 for international participants. Investors can also access a webcast of the live conference call by linking through the investor relations section of the Qumu website, www.qumu.com. Webcasts will be archived on Qumu’s website.

Non-GAAP Information
To supplement the Company’s condensed consolidated financial statements presented on a GAAP basis, the Company uses adjusted EBITDA, a non-GAAP measure, which excludes certain items from net income (loss), a GAAP measure. Adjusted EBITDA excludes items related to interest income and expense, the impact of income-based taxes, depreciation and amortization, stock-based compensation, change in fair value of warrant liabilities, foreign currency gains and losses, the gain on the sale of BriefCam and other non-operating income and expenses.

The Company uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the Company’s performance. The Company believes that adjusted EBITDA is useful to investors because it provides supplemental information that allows investors to review the Company’s results of operations from the same perspective as management and the Company’s board of directors. Non-GAAP results are presented for supplemental informational purposes only for understanding our operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

See the attached Supplemental Financial Information for a reconciliation of net loss, a GAAP measure, to adjusted EBITDA, a non-GAAP measure, for the three and six months ended June 30, 2018 and 2017.

Forward-Looking Statements
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” or “estimate” or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements include, for example, statements about: the Company’s future revenue and operating performance, cash balances, future product mix or the timing of recognition of revenue, the demand for the Company’s products or software, and the expected tax effects of the Company’s disposition of its investment in BriefCam. The statements made by the Company are based upon management’s current expectations and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and other factors set forth in the Company’s filings with the Securities and Exchange Commission.

About Qumu
Qumu is the leading provider of best-in-class tools to create, manage, secure, distribute and measure the success of live and on-demand video for the enterprise. Backed by the most trusted and experienced team in the industry, the Qumu platform enables global organizations to drive employee engagement, increase access to video, and modernize the workplace by providing a more efficient and effective way to share knowledge.

 
QUMU CORPORATION
Condensed Consolidated Statements of Operations
(unaudited – in thousands, except per share data)
 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
2018     2017 2018     2017
Revenues:
Software licenses and appliances $ 2,867 $ 929 $ 3,318 $ 2,149
Service   4,759     5,725     9,139     11,216  
Total revenues   7,626     6,654     12,457     13,365  
Cost of revenues:
Software licenses and appliances 804 368 1,139 862
Service   1,602     1,918     3,379     4,008  
Total cost of revenues   2,406     2,286     4,518     4,870  
Gross profit   5,220     4,368     7,939     8,495  
Operating expenses:
Research and development 1,639 1,798 3,542 3,907
Sales and marketing 2,412 2,524 4,592 4,975
General and administrative 1,747 2,009 3,928 4,469
Amortization of purchased intangibles   227     226     456     449  
Total operating expenses   6,025     6,557     12,518     13,800  
Operating loss   (805 )   (2,189 )   (4,579 )   (5,305 )
Other income (expense):
Interest expense, net (510 ) (334 ) (1,354 ) (651 )
Decrease (increase) in value of warrant liability (278 ) 11 109 (67 )
Other, net   (16 )   (124 )   (403 )   (179 )
Total other expense, net   (804 )   (447 )   (1,648 )   (897 )
Loss before income taxes (1,609 ) (2,636 ) (6,227 ) (6,202 )
Income tax benefit   (78 )   (25 )   (166 )   (29 )
Net loss $ (1,531 ) $ (2,611 ) $ (6,061 ) $ (6,173 )
 
Net loss per share – basic:
Net loss per share $ (0.16 ) $ (0.28 ) $ (0.64 ) $ (0.66 )
Weighted average shares outstanding

9,484

9,356 9,427 9,301
Net loss per share – diluted:
Net loss per share $ (0.16 ) $ (0.28 ) $ (0.64 ) $ (0.66 )
Weighted average shares outstanding

9,484

9,357 9,427 9,301
 
 
QUMU CORPORATION
Condensed Consolidated Balance Sheets
(unaudited – in thousands)
 
Assets

   June 30,   
2018

  December 31,
2017
Current assets:
Cash and cash equivalents $ 5,202 $ 7,690
Receivables, net 4,954 5,529
Contract assets 339
Income taxes receivable 277 156
Prepaid expenses and other current assets   1,934     1,830  
Total current assets 12,706 15,205
Property and equipment, net 533 911
Intangible assets, net 5,202 6,295
Goodwill 7,224 7,390
Deferred income taxes, non-current 69 77
Other assets, non-current   4,200     4,398  
Total assets $ 29,934   $ 34,276  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and other accrued liabilities $ 2,961 $ 3,878
Accrued compensation 1,216 1,824
Deferred revenue 8,514 8,923
Deferred rent 49 181
Financing obligations 226 1,047
Warrant liability   2,886     819  
Total current liabilities   15,852     16,672  
Long-term liabilities:
Deferred revenue, non-current 947 141
Income taxes payable, non-current 3
Deferred tax liability, non-current 76 153
Deferred rent, non-current 298 507
Term loan and other financing obligations, non-current 7,956 7,608
Other liabilities, non-current   485      
Total long-term liabilities   9,762     8,412  
Total liabilities   25,614     25,084  
Stockholders’ equity:
Common stock 95 94
Additional paid-in capital 68,435 68,035
Accumulated deficit (61,319 ) (56,197 )
Accumulated other comprehensive loss   (2,891 )   (2,740 )
Total stockholders’ equity   4,320     9,192  
Total liabilities and stockholders’ equity $ 29,934   $ 34,276  
 
 
QUMU CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited – in thousands)
 
    Six Months Ended
June 30,
2018     2017
Operating activities:
Net loss $ (6,061 ) $ (6,173 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 1,347 1,548
Stock-based compensation 438 783
Accretion of debt discount and issuance costs 1,035 236
Loss on lease contract termination 177
Change in value of warrant liability (109 ) 67
Deferred income taxes (72 ) (71 )
Changes in operating assets and liabilities:
Receivables 588 2,425
Contract assets 211
Income taxes receivable / payable (130 ) 135
Prepaid expenses and other assets 197 710
Accounts payable and other accrued liabilities (1,019 ) 315
Accrued compensation (604 ) (522 )
Deferred revenue 938 (368 )
Deferred rent (144 ) (150 )
Other non-current liabilities   436      
Net cash used in operating activities   (2,772 )   (1,065 )
Investing activities:
Purchases of property and equipment   (73 )   (20 )
Net cash used in investing activities   (73 )   (20 )
Financing activities:
Proceeds from term loan and warrant issuance 10,000
Principal payment on term loan (8,000 )
Payments for term loan issuance costs (1,308 ) (125 )
Principal payments on financing obligations (247 ) (255 )
Common stock repurchases to settle employee withholding liability   (27 )   (11 )
Net cash provided by (used in) financing activities   418     (391 )
Effect of exchange rate changes on cash   (61 )   94  
Net decrease in cash and cash equivalents (2,488 ) (1,382 )
Cash and cash equivalents, beginning of period   7,690     10,364  
Cash and cash equivalents, end of period $ 5,202   $ 8,982  
 
 
QUMU CORPORATION
Supplemental Financial Information
(unaudited – in thousands)
 

A summary of revenue is as follows:

       
Three Months Ended
June 30,
Six Months Ended
June 30,
2018     2017 2018     2017
Software licenses and appliances $ 2,867 $ 929 $ 3,318 $ 2,149
Service
Subscription, maintenance and support 4,122 5,110 8,160 9,948
Professional services and other   637     615     979     1,268  
Total service   4,759     5,725     9,139     11,216  
Total revenue $ 7,626   $ 6,654   $ 12,457   $ 13,365  
 

A reconciliation from GAAP results to adjusted EBITDA is as follows:

 
Three Months Ended
June 30,
Six Months Ended
June 30,
2018 2017 2018 2017
Net loss $ (1,531 ) $ (2,611 ) $ (6,061 ) $ (6,173 )
Interest expense, net 510 334 1,354 651
Income tax benefit (78 ) (25 ) (166 ) (29 )
Depreciation and amortization expense:
Depreciation and amortization in cost of revenues 2 9 5 19
Depreciation and amortization in operating expenses   126     241     295     489  
Total depreciation and amortization expense   128     250     300     508  
Amortization of intangibles included in cost of revenues 293 298 591 591
Amortization of intangibles included in operating expenses   227     226     456     449  
Total amortization of intangibles expense   520     524     1,047     1,040  
Total depreciation and amortization expense   648     774     1,347     1,548  
EBITDA (451 ) (1,528 ) (3,526 ) (4,003 )
Increase (decrease) in fair value of warrant liability 278 (11 ) (109 ) 67
Other expense, net 16 124 403 179
Stock-based compensation expense:
Stock-based compensation included in cost of revenues 8 18 18 32
Stock-based compensation included in operating expenses   220     352     420     751  
Total stock-based compensation expense   228     370     438     783  
Adjusted EBITDA $ 71   $ (1,045 ) $ (2,794 ) $ (2,974 )
 

http://www.businesswire.com/news/home/20180731005901/en/Qumu-Announces-Quarter-2018-Results-Reports-Strong/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Pandora Reports Q2 2018 Financial Results

OAKLAND, Calif.–()–Pandora (NYSE: P) today announced financial results for the second quarter ended June 30, 2018.

“We made continued progress against our strategy with total revenue growing 12%, subscription revenue up 67% and ad hour trends improving for the third straight quarter,” said Pandora CEO Roger Lynch. “New partnerships with top brands like Snap and AT&T, as well as enhancements to our ad tech and programmatic offerings, position us to further accelerate growth and ownership of the expanding digital audio marketplace.”

Second Quarter 2018 Financial Results & Highlights

Revenue: For the second quarter of 2018, total consolidated revenue was $384.8 million, an approximate 12% year-over-year increase compared to the year-ago quarter, excluding Australia, New Zealand and Ticketfly. This included $271.1 million in advertising revenue and $113.7 million in subscription revenue. We discontinued our service in Australia and New Zealand on July 31, 2017, and Ticketfly was sold to Eventbrite on September 1, 2017.

GAAP Net Loss and Adjusted EBITDA: For the second quarter of 2018, GAAP net loss was $92.0 million or $0.38 per share. This compared to a net loss of $275.1 million or $1.20 per share in the same quarter last year. Net loss included an unforecasted non-cash charge of $14.6 million related to the convertible debt exchange, a $7.2 million tax benefit for the release of a valuation allowance associated with the Adswizz acquisition and additional expense relating to restructuring and the AdsWizz transaction fees, all of which impacted net income by approximately $10.5 million, or $0.04 per share.

Our non-GAAP net loss was $38.9 million, or $0.15 per share. This compared to $50.1 million net loss or $0.21 in the year ago quarter. Adjusted EBITDA was a loss of $34.6 million, compared to a loss of $54.3 million in the same quarter last year.

Cash and Investments: For the second quarter of 2018, the Company ended with $420.8 million in cash and investments, compared to $544.4 million at the end of the prior quarter. This included $66.9 million use of cash for the AdsWizz acquisition, net of cash acquired.

Strategic Announcement: Pandora closed the acquisition of Adswizz on May 25, 2018. Final consideration was $146.6 million, comprised of $73.7 million in cash and 9.6 million shares.

Additionally, Pandora announced the general availability of audio programmatic, Pandora’s first product integration with AdsWizz, which will allow Pandora to access additional demand, optimize pricing and increase efficiency of the company’s ad operations.

Product Launches: Pandora launched its Premium Family Plan that provides all the benefits of ad-free, on-demand music with Premium, for up to six people under one billing account for just $14.99 a month.

Listener Hours: Total listener hours were 5.09 billion for the second quarter of 2018, compared to 5.22 billion for the same period of the prior year.

Active Users: Active users were 71.4 million at the end of the second quarter of 2018.

Subscribers: Pandora Plus and Pandora Premium subscribers were approximately 6 million at the end of the second quarter of 2018.

Other Information

Guidance: Guidance will be discussed during the second quarter 2018 conference call.

Second Quarter 2018 Financial Results Conference Call: Pandora will host a conference call today at 2 p.m. PT/5 p.m. ET to discuss second quarter 2018 financial results with the investment community. A live webcast of the event will be available on the Pandora Investor Relations website at http://investor.pandora.com. A live domestic dial-in is available at (877) 355-0067 or (614) 999-7532 internationally. A domestic replay will be available at (855) 859-2056 or (404) 537-3406 internationally, using passcode 7592268, and available via webcast replay until August 14, 2018.

ABOUT PANDORA

Pandora is the world’s most powerful music discovery platform—a place where artists find their fans and listeners find music they love. We are driven by a single purpose: unleashing the infinite power of music by connecting artists and fans, whether through earbuds, car speakers, or anywhere fans want to experience it. Our team of highly trained musicologists analyze hundreds of attributes for each recording which powers our proprietary Music Genome Project®, delivering billions of hours of personalized music tailored to the tastes of each music listener, full of discovery, making artist/fan connections at unprecedented scale. Founded by musicians, Pandora empowers artists with valuable data and tools to help grow their careers and connect with their fans.

www.pandora.com | @pandoramusic | www.pandoraforbrands.com | @PandoraBrands | amp.pandora.com

“Safe harbor” Statement: This press release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding expected revenue and adjusted EBITDA, and the benefits to Pandora from the acquisition of AdsWizz. These forward-looking statements are based on Pandora’s current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our operation in an emerging market and our relatively new and evolving business model; our ability to estimate revenue reserves; our ability to increase our listener base and listener hours; our ability to attract and retain advertisers; our ability to generate additional revenue on a cost-effective basis; competitive factors; our ability to continue operating under existing laws and licensing regimes; our ability to enter into and maintain commercially viable direct licenses with record labels for the right to reproduce and publicly perform sound recordings on our service; our ability to establish and maintain relationships with makers of mobile devices, consumer electronic products and automobiles; our ability to manage our growth and geographic expansion; our ability to continue to innovate and keep pace with changes in technology and our competitors; our ability to expand our operations to delivery of non-music content; our ability to protect our intellectual property; risks related to service interruptions or security breaches; and general economic conditions worldwide. Further information on these factors and other risks that may affect the business are included in filings with the Securities and Exchange Commission (SEC) from time to time, including under the heading “Risk Factors” in our most recent reports on Form 10-K and Form 10-Q.

The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q, each as they may be amended from time to time. Our results of operations for the current period are not necessarily indicative of our operating results for any future periods.

These documents are available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at investor.pandora.com. Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to the Company, which assumes no obligation to update these forward-looking statements in light of new information or future events.

Non-GAAP Financial Measures: To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company uses the following non-GAAP measures of financial performance: non-GAAP gross profit, non-GAAP net loss, non-GAAP basic and diluted net loss per common share, adjusted EBITDA, non-GAAP product development, non-GAAP sales and marketing and non-GAAP general and administrative. The presentation of this additional financial information is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. These non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. In addition, these non-GAAP financial measures may be different from the non-GAAP financial measures used by other companies. These non-GAAP measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Management compensates for these limitations by reconciling these non-GAAP financial measures to the most comparable GAAP financial measures within our earnings releases.

Non-GAAP gross profit, non-GAAP net loss, non-GAAP basic and diluted net loss per common share, non-GAAP product development, non-GAAP sales and marketing and non-GAAP general and administrative differ from GAAP in that they exclude stock-based compensation expense, intangible amortization expense, amortization of non-recoupable ticketing contract advances, expense associated with the restructurings, transaction costs, loss on sales of subsidiaries and loss on extinguishment of convertible debt. The income tax effects of non-GAAP pre-tax loss have been reflected in non-GAAP net loss and non-GAAP basic and diluted net loss per common share.

Adjusted EBITDA: Adjusted EBITDA excludes stock-based compensation expense, provision for income taxes, depreciation and intangible amortization expense, amortization of non-recoupable ticketing contract advances, other expense, expense associated with the restructurings, transaction costs and loss on sales of subsidiaries.

Stock-based Compensation Expense: consists of expenses for stock options, restricted stock units and other awards under our equity incentive plans. Stock-based compensation is included in the following cost and expense line items of our GAAP presentation: cost of revenue—other, cost of revenue—ticketing service, product development, sales and marketing and general and administrative.

Although stock-based compensation is an expense for the Company and is viewed as a form of compensation, management excludes stock-based compensation from our non-GAAP measures and adjusted EBITDA results for purposes of evaluating our continuing operating performance primarily because it is a non-cash expense not believed by management to be reflective of our core business, ongoing operating results or future outlook. In addition, the value of stock-based instruments is determined using formulas that incorporate variables, such as market volatility, that are beyond our control.

Provision for Income Taxes: consists of expense recognized related to U.S. and foreign income taxes. The Company considers its adjusted EBITDA results without these charges when evaluating its ongoing performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Depreciation and Intangible Amortization Expense: consists of non-cash charges that can be affected by the timing and magnitude of business combinations and asset purchases. Depreciation and intangible amortization expense is included in the following cost and expense line items of our GAAP presentation: cost of revenue—other, cost of revenue—ticketing service, product development, sales and marketing and general and administrative. Depreciation and intangible amortization expense also consists of non-cash amortization of non-recoupable amounts paid in advance to the Company’s clients pursuant to ticketing agreements. Amortization of non-recoupable ticketing contract advances is included in the sales and marketing line of our GAAP presentation. Management considers its operating results without intangible amortization expense and amortization of non-recoupable ticketing contract advances when evaluating its ongoing non-GAAP performance and without depreciation, intangible amortization expense and amortization of non-recoupable ticketing contract advances when evaluating its ongoing adjusted EBITDA performance because these charges are non-cash expenses that can be affected by the timing and magnitude of business combinations, asset purchases and new client agreements and may not be reflective of our core business, ongoing operating results or future outlook.

Other Expense: consists primarily of interest expense related to our Convertible Senior Notes and our Credit Facility. The Company considers its adjusted EBITDA results without these charges when evaluating its ongoing performance because it is not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Expense Associated with the Restructurings: consists of employee-related expense recognized in connection with the workforce reductions in the first quarters of 2018 and 2017 and the restructuring in Australia and New Zealand. These costs are included in the following cost and expense line items of our GAAP presentation: cost of revenue—other, product development, sales and marketing and general and administrative. This also consists of professional fees recognized in connection with the reorganization of the Company in the first quarters of 2017 and 2018, which are included in the general and administrative line item of our GAAP presentation. The Company considers its non-GAAP and adjusted EBITDA results without these charges when evaluating its ongoing performance because these charges are not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Transaction Costs: consists of professional and legal fees recognized during the period, primarily related to the AdsWizz acquisition. These costs are included in the general and administrative line item of our GAAP presentation. The Company considers its non-GAAP and adjusted EBITDA results without these charges when evaluating its ongoing performance because these charges are not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Loss on Sales of Subsidiaries: consists of loss on sales of subsidiaries recognized during the period, primarily related to the Ticketfly disposition, including the cancellation of the convertible promissory note receivable. These amounts were calculated as the decrease in the fair value less costs to sell for sales of our subsidiaries and were recorded as loss on sales during the period. The Company considers its operating results without these charges when evaluating its ongoing non-GAAP and adjusted EBITDA results because these charges are not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Loss on Extinguishment of Convertible Debt: consists of loss on extinguishment of convertible debt recognized during the period. This amount were calculated as the difference in the fair value and carrying value of the convertible debt immediately prior to extinguishment and was recorded as loss on extinguishment of convertible debt during the period. The Company considers its operating results without these charges when evaluating its ongoing non-GAAP and adjusted EBITDA results because these charges are not believed by management to be reflective of our core business, ongoing operating results or future outlook.

Income Tax Effects of Non-GAAP Pre-tax Loss: The Company adjusts non-GAAP pre-tax net loss by considering the income tax effects of its non-GAAP adjustments. The Company is currently forecasting a non-GAAP effective tax rate of approximately 22% to 25% cumulatively for each quarter and the full year 2018. However, the Company is not expected to incur any material cash taxes due to its net operating loss position.

Management believes these non-GAAP financial measures and adjusted EBITDA serve as useful metrics for our management and investors because they enable a better understanding of the long-term performance of our core business and facilitate comparisons of our operating results over multiple periods and to those of peer companies, and when taken together with the corresponding GAAP financial measures and our reconciliations, enhance investors’ overall understanding of our current financial performance.

In the financial tables below, the Company provides a reconciliation of the most comparable GAAP financial measure to the historical non-GAAP financial measures used in this earnings release.

   

Pandora Media, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 
Three months ended
June 30,
Six months ended
June 30,
  2017 (1 )     2018 (1 )   2017 (1 )     2018 (1 )
Revenue
Advertising $ 278,204 $ 271,056 $ 501,512 $ 485,624
Subscription and other 68,900 113,738 133,778 218,403
Ticketing service   29,730         57,548      
Total revenue   376,834     384,794     692,838     704,027  
Cost of revenue
Cost of revenue—Content acquisition costs 195,875 226,860 383,295 444,440
Cost of revenue—Other (2) 27,440 32,727 52,972 59,576
Cost of revenue—Ticketing service (2)   20,510         39,128      
Total cost of revenue   243,825     259,587     475,395     504,016  
Gross profit 133,009 125,207 217,443 200,011
Gross margin 35 % 33 % 31 % 28 %
Operating expenses
Product development (2) 41,233 40,351 80,821 76,235
Sales and marketing (2) 145,891 125,375 270,993 249,591
General and administrative (2) 57,954 53,617 102,479 95,248
Goodwill impairment 131,997 131,997
Contract termination fees   23,467         23,467      
Total operating expenses   400,542     219,343     609,757     421,074  
Loss from operations (267,533 ) (94,136 ) (392,314 ) (221,063 )
Interest expense (7,404 ) (6,745 ) (14,785 ) (14,031 )
Other income, net   78     1,767     307     4,349  
Total other expense, net   (7,326 )   (4,978 )   (14,478 )   (9,682 )
Loss before provision for income taxes (274,859 ) (99,114 ) (406,792 ) (230,745 )
Provision for income taxes   (277 )   7,132     (611 )   7,058  
Net loss   (275,136 )   (91,982 )   (407,403 )   (223,687 )
Net loss available to common stockholders $ (289,664 ) $ (99,455 ) $ (421,931 ) $ (238,523 )
Basic and diluted net loss per common share $ (1.20 ) $ (0.38 ) $ (1.76 ) $ (0.93 )
Weighted-average basic and diluted common shares   241,320     259,822     239,428     256,397  
 

 (1) Includes results for Australia, New Zealand and Ticketfly, where applicable

 (2) Includes stock-based compensation expense as follows:

 

Three months ended
 June 30,

Six months ended
 June 30,

2017

2018

2017

2018

Cost of revenue—Other

$

814

$

800

$

1,629

$

1,542

Cost of revenue—Ticketing service

34

63

Product development

9,422

8,028

17,337

14,445

Sales and marketing

15,102

11,092

28,598

22,909

General and administrative

 

13,236

 

7,608

 

20,599

 

15,068

 

Total stock-based compensation expense

$

38,608

$

27,528

$

68,226

$

53,964

 
 
   

Pandora Media, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 
As of December 31, As of June 30,
2017 2018
(audited) (unaudited)
Assets
Current assets
Cash and cash equivalents $ 499,597 $ 292,996
Short-term investments 1,250 127,791
Accounts receivable, net 336,429 339,592
Prepaid content acquisition costs 55,668 24,379
Prepaid expenses and other current assets 19,220   21,799  
Total current assets 912,164 806,557
Convertible promissory note receivable 35,471
Property and equipment, net 116,742 110,583
Goodwill 71,243 178,917
Intangible assets, net 19,409 59,863
Other long-term assets 11,293   12,023  
Total assets $ 1,166,322   $ 1,167,943  
Liabilities, redeemable convertible preferred stock and stockholders’ equity
Current liabilities
Accounts payable $ 14,896 $ 17,704
Accrued liabilities 34,535 60,047
Accrued content acquisition costs 97,751 125,791
Accrued compensation 47,635 48,184
Deferred revenue 31,464   43,512  
Total current liabilities 226,281 295,238
Long-term debt, net 273,014 250,267
Other long-term liabilities 23,500   25,919  
Total liabilities 522,795   571,424  
Redeemable convertible preferred stock 490,849 505,684
Stockholders’ equity
Common stock 25 27
Additional paid-in capital 1,422,221 1,598,905
Accumulated deficit (1,269,351 ) (1,507,874 )
Accumulated other comprehensive loss (217 ) (223 )
Total stockholders’ equity 152,678   90,835  
Total liabilities, redeemable convertible preferred stock and stockholders’ equity $ 1,166,322   $ 1,167,943  
 
   

Pandora Media, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 
Three months ended
June 30,
Six months ended
June 30,
2017   2018 2017   2018
Operating activities
Net loss $ (275,136 ) $ (91,982 ) $ (407,403 ) $ (223,687 )
Adjustments to reconcile net loss to net cash used in operating activities
Loss on dispositions 2,173
Goodwill impairment 131,997 131,997
Loss on extinguishment of convertible debt 14,600 14,600
Depreciation and amortization 17,435 14,283 35,115 28,062
Stock-based compensation 38,608 27,528 68,226 53,964
Amortization of premium on investments, net 20 (552 ) 73 (670 )
Accretion of discount on convertible promissory note receivable (534 )
Other operating activities (179 ) 166 186 231
Amortization of debt discount 4,913 5,022 9,799 10,418
Interest income (810 )
Provision for bad debt 7,884 1,831 9,274 1,516
Changes in operating assets and liabilities
Accounts receivable (32,347 ) (51,049 ) 12,594 16,111
Prepaid content acquisition costs 8,673 11,522 6,441 31,289
Prepaid expenses and other assets (3,567 ) 242 (9,146 ) (1,346 )
Accounts payable, accrued and other current liabilities 1,880 (1,148 ) 15,072 3,601
Accrued content acquisition costs (1,713 ) 19,537 (5,475 ) 28,040
Accrued compensation 16 2,517 (13,191 ) 1,170
Other long-term liabilities 420 (8,241 ) 176 (9,027 )
Deferred revenue 120 5,830 4,116 12,047
Reimbursement of cost of leasehold improvements   537   5,236   894  
Net cash used in operating activities (100,976 ) (49,357 ) (136,910 ) (31,958 )
Investing activities
Purchases of property and equipment (6,561 ) (1,580 ) (8,541 ) (4,990 )
Internal-use software costs (3,129 ) (5,089 ) (10,894 ) (10,578 )
Payments related to acquisition, net of cash acquired (66,924 ) (66,924 )
Purchases of investments (75,245 ) (164,586 )
Proceeds from maturities of investments 14,054 37,500 25,274 38,750
Proceeds from cancellation of convertible promissory note receivable       34,742  
Net cash provided by (used in) investing activities 4,364   (111,338 ) 5,839   (173,586 )
Financing activities
Proceeds from issuance of redeemable convertible preferred stock 172,500 172,500
Payments of issuance costs (12,625 ) (4,516 ) (12,625 ) (4,516 )
Proceeds from employee stock purchase plan 3,348 2,237 6,146 2,274
Proceeds from exercise of stock options 750 175 3,138 423
Tax withholdings related to net share settlements of restricted stock units   (190 )   (477 )
Net cash provided by (used in) financing activities 163,973   (2,294 ) 169,159   (2,296 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash 82   (10 ) 292   (18 )
Net increase (decrease) in cash, cash equivalents and restricted cash 67,443   (162,999 ) 38,380   (207,858 )
Less: Cash held for sale (28,101 ) (28,101 )
Cash, cash equivalents and restricted cash at beginning of period 172,757   455,995   201,820   500,854  
Cash, cash equivalents and restricted cash at end of period $ 212,099   $ 292,996   $ 212,099   $ 292,996  
 
   

Pandora Media, Inc.

Condensed Consolidated Statements of Cash Flows continued

(in thousands) (unaudited)

 
Three months ended
June 30,
Six months ended
June 30,
2017   2018 2017   2018
Reconciliation of cash, cash equivalents and restricted cash as shown in the statements of cash flows
Cash and cash equivalents $ 209,581 $ 292,996 $ 209,581 $ 292,996
Restricted cash included in other long-term assets line item of Condensed Consolidated Balance Sheets 2,518     2,518  
Total cash, cash equivalents and restricted cash $ 212,099   $ 292,996   $ 212,099   $ 292,996
 
   

Pandora Media, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except per share amounts)

(unaudited)

 
Three months ended
June 30,
Six months ended
June 30,
2017   2018 2017   2018
Gross profit
GAAP gross profit $ 133,009 $ 125,207 $ 217,443 $ 200,011
Stock-based compensation—Cost of revenue 848 800 1,692 1,542
Amortization of intangibles—Cost of revenue 2,514 1,951 3,933 3,106
Expense associated with the restructurings 78     390    
Non-GAAP gross profit $ 136,449   $ 127,958   $ 223,458   $ 204,659  
Non-GAAP gross margin 36 % 33 % 32 % 29 %
 
Adjusted EBITDA and non-GAAP net loss
GAAP net loss $ (275,136 ) $ (91,982 ) $ (407,403 ) $ (223,687 )
Depreciation and amortization 17,435 14,283 35,115 28,062
Stock-based compensation 38,608 27,528 68,226 53,964
Other expense, net 7,326 4,978 14,478 9,682
Provision for income taxes 277 (7,132 ) 611 (7,058 )
Expense associated with the restructurings 1,733 1,379 7,913 10,247
Transaction costs 1,700 4,059
Goodwill impairment 131,997 131,997

Loss on extinguishment of convertible debt

14,600 14,600
Loss on sale of subsidiaries 2,173
Contract termination fees 23,467     23,467    
Adjusted EBITDA $ (54,293 ) $ (34,646 ) $ (125,596 ) $ (107,958 )
Income tax effects of non-GAAP pre-tax loss 23,596 5,247 55,754 26,997
Other expense, net (7,326 ) (4,978 ) (14,478 ) (9,682 )
Provision for income taxes (277 ) $ 7,132 $ (611 ) $ 7,058
Depreciation (11,821 ) (11,655 ) (22,378 ) (23,916 )
Non-GAAP net loss $ (50,121 ) $ (38,900 ) $ (107,309 ) $ (107,501 )
 
Non-GAAP net loss per common share – basic and diluted (0.21 ) (0.15 ) (0.45 ) (0.42 )
Weighted average basic and diluted common shares 241,320 259,822 239,428 256,397
 
   

Pandora Media, Inc.

Reconciliation of GAAP to Non-GAAP Measures continued

(in thousands, except per share amounts)

(unaudited)

 
Three months ended
June 30,
Six months ended
June 30,
2017   2018 2017   2018
Product development
GAAP product development $ 41,233 $ 40,351 $ 80,821 $ 76,235
Stock-based compensation (9,422 ) (8,028 ) (17,337 ) (14,445 )
Amortization of intangibles (254 ) (97 ) (2,076 ) (194 )
Expense associated with the restructurings (8 )   (710 )   (622 )
Non-GAAP product development $ 31,549   $ 32,226   $ 60,698     $ 60,974  
 
Sales and marketing
GAAP sales and marketing $ 145,891 $ 125,375 $ 270,993 $ 249,591
Stock-based compensation (15,102 ) (11,092 ) (28,598 ) (22,909 )
Amortization of intangibles (1,170 ) (397 ) (2,883 ) (480 )
Amortization of non-recoupable ticketing contract advances (1,493 ) (3,479 )
Loss on sale of subsidiaries (100 )
Expense associated with the restructurings (1,551 )   (5,207 ) (4,608 )
Non-GAAP sales and marketing $ 126,575   $ 113,886   $ 230,826   $ 221,494  
 
General and administrative
GAAP general and administrative $ 57,954 $ 53,617 $ 102,479 $ 95,248
Stock-based compensation (13,236 ) (7,608 ) (20,599 ) (15,068 )
Amortization of intangibles (183 ) (183 ) (366 ) (366 )
Transaction costs (1,700 ) (4,059 )

Loss on extinguishment of convertible debt

(14,600 ) (14,600 )
Loss on sale of subsidiaries (2,073 )
Expense associated with the restructurings (96 ) (1,379 ) (1,606 ) (5,017 )
Non-GAAP general and administrative $ 44,439   $ 28,147   $ 79,908   $ 54,065  
 
   

Pandora Media, Inc.

Ad RPM and LPM History

(unaudited)

 
Three months ended June 30, Six months ended June 30,
2017   2018 2017   2018
Advertising RPM $ 66.15 $ 68.75 $ 58.34 $ 62.15
Advertising LPM $ 35.84 $ 36.87 $ 34.61 $ 36.61
 
   

Pandora Media, Inc.

Subscription ARPU and LPU History

(unaudited)

 
Three months ended June 30, Six months ended June 30,
2017   2018 2017   2018
Subscription ARPU $ 4.82 $ 6.52 $ 4.79 $ 6.41
Subscription LPU $ 3.11 $ 4.78 $ 3.03 $ 4.72

http://www.businesswire.com/news/home/20180731005898/en/Pandora-Reports-Q2-2018-Financial-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Whiting Petroleum Corporation Announces Second Quarter 2018 Financial and Operating Results

DENVER–()–Whiting’s (NYSE: WLL) production in the second quarter 2018 totaled 11.5 million barrels of oil equivalent (MMBOE), comprised of 84% crude oil/natural gas liquids (NGLs). Second quarter 2018 production averaged 126,180 barrels of oil equivalent per day (BOE/d) and came in at the high end of guidance. Capital expenditures for the second quarter 2018 were $203 million. Second quarter 2018 net cash provided by operating activities of $310 million exceeded capital expenditures by $107 million. Lease operating expense (LOE) of $7.81 per BOE came in below the low end of guidance which called for $8.20 per BOE at the midpoint.

During the second quarter 2018, the Company added to its hedges and is now 72% hedged for 2018 and 23% hedged for the first half of 2019 as a percentage of June 2018 production as detailed later in the press release.

Operating and Financial Results

The following table summarizes the operating and financial results for the second quarter of 2018 and 2017, including non-cash charges recorded during those periods:

        Three Months Ended
June 30,
2018     2017
Production (MBOE/d) (1) 126.18 112.66
Net cash provided by operating activities-MM $ 310.4 $ 111.0
Discretionary cash flow-MM (2) $ 269.0 $ 139.3
Realized price ($/BOE) $ 41.20 $ 30.83
Total operating revenues-MM $ 526.4 $ 311.5
Net income (loss) attributable to common shareholders-MM (3) $ 2.1 $ (66.0 )
Per basic share (4) $ 0.02 $ (0.73 )
Per diluted share (4) $ 0.02 $ (0.73 )
 
Adjusted net income (loss) attributable to common shareholders-MM (5) $ 57.3 $ (65.3 )
Per basic share (4) $ 0.63 $ (0.72 )
Per diluted share (4) $ 0.62 $ (0.72 )

(1)

  Second quarter 2017 includes 7,855 BOE/d from properties that have since been divested.

(2)

A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.

(3)

Net income (loss) attributable to common shareholders includes $50 million of pre-tax, non-cash derivative losses and $16 million of pre-tax, non-cash derivative gains for the three months ended June 30, 2018 and 2017, respectively.

(4)

All per share amounts have been retroactively adjusted for the 2017 period to reflect the Company’s one-for-four reverse stock split in November 2017.

(5)

A reconciliation of net income (loss) attributable to common shareholders to adjusted net income (loss) attributable to common shareholders is included later in this news release.
 
 

The following table summarizes the first six months operating and financial results for 2018 and 2017, including non-cash charges recorded during those periods:

        Six Months Ended
June 30,
2018     2017
Production (MBOE/d) (1) 126.61 115.00
Net cash provided by operating activities-MM $ 543.3 $ 191.1
Discretionary cash flow-MM (2) $ 559.5 $ 321.9
Realized price ($/BOE) $ 42.03 $ 33.10
Total operating revenues-MM $ 1,041.5 $ 682.8
Net income (loss) attributable to common shareholders-MM (3) $ 17.1 $ (152.9 )
Per basic share (4) $ 0.19 $ (1.69 )
Per diluted share (4) $ 0.19 $ (1.69 )
 
Adjusted net income (loss) attributable to common shareholders-MM (5) $ 141.0 $ (119.5 )
Per basic share (4) $ 1.55 $ (1.32 )
Per diluted share (4) $ 1.54 $ (1.32 )

(1)

  The six months ended June 30, 2017 includes 8,035 BOE/d from properties that have since been divested.

(2)

A reconciliation of net cash provided by operating activities to discretionary cash flow is included later in this news release.

(3)

Net income (loss) attributable to common shareholders includes $78 million and $22 million of pre-tax, non-cash derivative losses for the six months ended June 30, 2018 and 2017, respectively.

(4)

All per share amounts have been retroactively adjusted for the 2017 period to reflect the Company’s one-for-four reverse stock split in November 2017.

(5)

A reconciliation of net income (loss) attributable to common shareholders to adjusted net income (loss) attributable to common shareholders is included later in this news release.
 
 

Bradley J. Holly, Whiting’s President, Chairman and CEO, commented, “In the second quarter, Whiting continued its streak of delivering production results above forecast and generating significant cash flow above capital expenditures. Since the beginning of the fourth quarter 2017, Whiting has generated a total of $269 million of operating cash flow above capital expenditures. We are also pleased to announce a bolt-on acquisition that fits well with our current core acreage position in the western Williston Basin. We consider this acreage highly prospective for generation 4.0 completions because it lies geologically on trend with the prolific Mallow well announced in the first quarter. This acquisition demonstrates our commitment to the Williston Basin and builds on our strategy to unlock value in new areas through the application of an industry leading development process.”

Williston Basin Bolt-On Acquisition Adds 55,000 Net Acres Contiguous to Core Areas

Whiting has completed a $130 million acquisition of Williston Basin properties contiguous with the East Missouri Breaks and Hidden Bench areas. The properties encompass 54,833 net acres and have current production of 1,290 BOE/d and estimated proved reserves of 26 MMBOE.

Operations Update

In the second quarter 2018, total net production for the Company averaged 126,180 BOE/d. The Bakken/Three Forks plays in the Williston Basin averaged 103,480 BOE/d. The Redtail Niobrara/Codell plays in the DJ Basin averaged 22,005 BOE/d. Whiting drilled 33 wells in the Williston Basin area and no wells in the Redtail area during the quarter. The Company put 22 wells on production in the Williston Basin and 16 wells on production at Redtail during the quarter.

North Polar Optimized Completions Enhance Capital Productivity. During the quarter, the Company completed four noteworthy generation 4.0 north Polar wells in Williams County, North Dakota. The Anna 14-8 / Nelson 14-8 wells were completed with 6.5 – 7.0 million pounds of proppant and the latest diversion techniques. Production profiles for the wells are, on average, stronger than an earlier generation well completed with 10 million pounds. The generation 4.0 completion approach enables Whiting to achieve superior results with a 30% smaller completion, which translates into approximately $400,000 of capex savings per well. Also, the new completion strategy allows the Company to better contain the fracture stimulation within the productive zone of the rock. This results in a lower water cut that is estimated to reduce LOE by $600,000 over the life of the well.

Second Quarter 2018 Capital Expenditures Summary

During the second quarter 2018, Whiting’s capital expenditures totaled $203 million. This includes $8 million for non-operated drilling and completion, $5 million for land and $1 million for facilities.

Other Financial and Operating Results

The following table summarizes the Company’s net production and commodity price realizations for the quarters ended June 30, 2018 and 2017:

    Three Months Ended    
June 30,
2018     2017 Change

Production

Oil (MMBbl) 7.71 6.91 12 %
NGLs (MMBbl) 1.88 1.65 14 %
Natural gas (Bcf) 11.34 10.17 12 %
Total equivalent (MMBOE) (1) 11.48 10.25 12 %
 

Average sales price

Oil (per Bbl):
Price received $ 62.61 $ 40.12 56 %
Effect of crude oil hedging (2)   (6.92 )   0.66
Realized price (3) $ 55.69   $ 40.78 37 %
Weighted average NYMEX price (per Bbl) (4) $ 67.91   $ 48.32 41 %
 
NGLs (per Bbl):
Realized price $ 15.26   $ 10.41 47 %
 
Natural gas (per Mcf):
Realized price $ 1.32   $ 1.68 (21 %)
Weighted average NYMEX price (per MMBtu) (4) $ 2.77   $ 3.09 (10 %)

(1)

  Second quarter 2017 includes 7,855 BOE/d from properties that have since been divested.

(2)

Whiting paid $53 million and received $5 million in pre-tax cash settlements on its crude oil hedges during the second quarter of 2018 and 2017, respectively. A summary of Whiting’s outstanding hedges is included later in this news release.

(3)

Whiting’s realized price was reduced by $1.10 per Bbl and $2.72 per Bbl in the second quarter of 2018 and 2017, respectively, due to the Redtail deficiency payment. The remaining contract ends in April 2020.

(4)

Average NYMEX prices weighted for monthly production volumes.
 
 

Second Quarter and First Half 2018 Costs and Margins

A summary of production and cash revenues and cash costs on a per BOE basis is as follows:

    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
(per BOE, except production)
Production (MMBOE) 11.48 10.25 22.92 20.81
 
Sales price, net of hedging $ 41.20 $ 30.83 $ 42.03 $ 33.10
Lease operating expense 7.81 8.41 7.95 8.49
Production tax 3.77 2.64 3.54 2.84
Cash general & administrative 2.62 2.45 2.49 2.39
Exploration 0.43 0.62 0.42 0.60
Cash interest expense 3.55 3.93 3.75 3.88
Cash income tax benefit     (0.13 )     (0.15 )
$ 23.02 $ 12.91   $ 23.88 $ 15.05  
 
 

Outlook for Third Quarter and Full-Year 2018

The following table provides guidance for the third quarter and full-year 2018 based on current forecasts, including Whiting’s full-year 2018 capital budget of $750 million:

        Guidance
Third Quarter         Full Year
2018 2018
Production (MMBOE) 11.7 – 12.2 47.0 – 47.7
Lease operating expense per BOE $ 7.70 – $ 8.20 $ 7.70 – $ 8.20
General and administrative expense per BOE $ 2.60 – $ 2.90 $ 2.60 – $ 2.90
Interest expense per BOE $ 3.80 – $ 4.20 $ 4.00 – $ 4.40
Depreciation, depletion and amortization per BOE $16.75 – $17.75 $16.50 – $17.50
Production taxes (% of sales revenue) 8.1% – 8.5% 7.9% – 8.3%
Oil price differential to NYMEX per Bbl (1) ($4.50) – ($5.50) ($4.50) – ($5.50)
Gas price differential to NYMEX per Mcf ($1.50) – ($2.00) ($1.50) – ($2.00)
 

(1) Does not include the effects of NGLs.

 
 

Commodity Derivative Contracts

Whiting is 72% hedged for 2018 as a percentage of June 2018 production.

The following summarizes Whiting’s crude oil hedges as of July 1, 2018:

            Weighted Average     As a Percentage of
Derivative Hedge Contracted Crude NYMEX Price June 2018
Instrument Period (Bbls per Month) (per Bbl) Oil Production
 
Three-way collars (1) 2018 Sub-Floor/Floor/Ceiling
Q3 1,450,000 $37.07 – $47.07 – $57.30 56.6%
Q4 1,450,000 $37.07 – $47.07 – $57.30 56.6%
 
Swaps 2018 Fixed Price
Q3 400,000 $61.74 15.6%
Q4 400,000 $61.74 15.6%
 
Collars 2019 Floor/Ceiling
Q1 600,000 $50.00 – $71.80 23.4%
Q2 600,000 $50.00 – $71.80 23.4%

(1)

  A three-way collar is a combination of options: a sold call, a purchased put and a sold put. The sold call establishes a maximum price (ceiling) we will receive for the volumes under contract. The purchased put establishes a minimum price (floor), unless the market price falls below the sold put (sub-floor), at which point the minimum price would be NYMEX plus the difference between the purchased put and the sold put strike price.
 
 

Selected Operating and Financial Statistics

    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
Selected operating statistics:
Production
Oil, MBbl 7,711 6,911 15,450 14,209
NGLs, MBbl 1,882 1,647 3,698 3,266
Natural gas, MMcf 11,337 10,166 22,610 20,039
Oil equivalents, MBOE (1) 11,482 10,252 22,917 20,814
Average prices
Oil per Bbl (excludes hedging) $ 62.61 $ 40.12 $ 60.61 $ 42.07
NGLs per Bbl $ 15.26 $ 10.41 $ 19.34 $ 14.02
Natural gas per Mcf $ 1.32 $ 1.68 $ 1.48 $ 1.96
Per BOE data
Sales price (including hedging) $ 41.20 $ 30.83 $ 42.03 $ 33.10
Lease operating $ 7.81 $ 8.41 $ 7.95 $ 8.49
Production taxes $ 3.77 $ 2.64 $ 3.54 $ 2.84
Depreciation, depletion and amortization $ 17.36 $ 21.46 $ 16.90 $ 22.12
General and administrative $ 2.75 $ 3.12 $ 2.75 $ 3.01
Selected financial data:

(In thousands, except per share data)

Total operating revenues $ 526,403 $ 311,515 $ 1,041,486 $ 682,832
Total operating expenses $ 476,633 $ 368,229 $ 893,525 $ 817,052
Total other expense, net $

47,650

 

$

47,494

 

$

130,829

 

$

96,435

 

Net income (loss) attributable to common shareholders $ 2,120 $ (65,981 ) $ 17,132 $ (152,938 )
Income (loss) per common share, basic (2) $ 0.02 $ (0.73 ) $ 0.19 $ (1.69 )
Income (loss) per common share, diluted (2) $ 0.02 $ (0.73 ) $ 0.19 $ (1.69 )
Weighted average shares outstanding, basic (2) 90,940 90,684 90,916 90,668
Weighted average shares outstanding, diluted (2) 91,869 90,684 91,821 90,668
Net cash provided by operating activities $ 310,413 $ 110,993 $ 543,280 $ 191,063
Net cash provided by (used in) investing activities $ (224,853 ) $ (204,126 ) $ (402,300 ) $ 39,014
Net cash provided by (used in) financing activities $ (99,462 ) $ 99,947 $ (1,003,746 ) $ (280,059 )
 

Selected financial data:

Nine Months Ended

(In thousands)

June 30, 2018

Net cash provided by operating activities

$

829,983

Net cash used in investing activities

$

(606,503

)

Net cash used in financing activities

$

(218,039

)

(1)

  The three and six months ended June 30, 2017 include 7,855 BOE/d and 8,035 BOE/d, respectively, from properties that have since been divested.

(2)

All share and per share amounts have been retroactively adjusted for the 2017 periods to reflect the Company’s one-for-four reverse stock split in November 2017.
 
 

Selected Financial Data

For further information and discussion on the selected financial data below, please refer to Whiting Petroleum Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 to be filed with the Securities and Exchange Commission.

WHITING PETROLEUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
 
        June 30,     December 31,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 16,613 $ 879,379
Accounts receivable trade, net 287,494 284,214
Prepaid expenses and other   38,051     26,035  
Total current assets   342,158     1,189,628  
Property and equipment:
Oil and gas properties, successful efforts method 11,667,902 11,293,650
Other property and equipment   137,497     134,524  
Total property and equipment 11,805,399 11,428,174
Less accumulated depreciation, depletion and amortization   (4,620,868 )   (4,244,735 )
Total property and equipment, net   7,184,531     7,183,439  
Other long-term assets   34,935     29,967  
TOTAL ASSETS $ 7,561,624   $ 8,403,034  
 
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $ $ 958,713
Accounts payable trade 88,233 32,761
Revenues and royalties payable 180,234 171,028
Accrued capital expenditures 64,620 69,744
Accrued interest 59,261 40,971
Accrued liabilities and other 98,747 118,815
Taxes payable 33,208 28,771
Derivative liabilities   149,420     132,525  
Total current liabilities 673,723 1,553,328
Long-term debt 2,778,232 2,764,716
Asset retirement obligations 135,514 129,206
Other long-term liabilities   34,889     36,642  
Total liabilities   3,622,358     4,483,892  
Commitments and contingencies
Equity:
Common stock, $0.001 par value, 225,000,000 shares authorized; 92,185,043 issued and 90,967,365 outstanding as of June 30, 2018 and 92,094,837 issued and 90,698,889 outstanding as of December 31, 2017 92 92
Additional paid-in capital 6,408,482 6,405,490
Accumulated deficit   (2,469,308 )   (2,486,440 )
Total equity   3,939,266     3,919,142  
TOTAL LIABILITIES AND EQUITY $ 7,561,624   $ 8,403,034  
 
 
WHITING PETROLEUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
OPERATING REVENUES
Oil, NGL and natural gas sales $ 526,403 $ 311,515 $ 1,041,486 $ 682,832
 
OPERATING EXPENSES
Lease operating expenses 89,730 86,269 182,302 176,662
Production taxes 43,306 27,066 81,144 59,122
Depreciation, depletion and amortization 199,294 220,035 387,213 460,442
Exploration and impairment 13,234 25,295 27,981 46,136
General and administrative 31,601 31,943 63,081 62,560
Derivative (gain) loss, net 103,483 (20,163 ) 156,147 16,414
(Gain) loss on sale of properties (1,090 ) 1,024 1,486 2,298
Amortization of deferred gain on sale   (2,925 )   (3,240 )   (5,829 )   (6,582 )
Total operating expenses   476,633     368,229     893,525     817,052  
 
INCOME (LOSS) FROM OPERATIONS 49,770 (56,714 ) 147,961 (134,220 )
 
OTHER INCOME (EXPENSE)
Interest expense (48,331 ) (47,937 ) (101,230 ) (95,948 )
Loss on extinguishment of debt (808 ) (31,968 ) (1,540 )
Interest income and other   1,489     443     2,369     1,053  
Total other expense   (47,650 )   (47,494 )   (130,829 )   (96,435 )
INCOME (LOSS) BEFORE INCOME TAXES 2,120 (104,208 ) 17,132 (230,655 )
 
INCOME TAX BENEFIT
Current (1,316 ) (3,206 )
Deferred       (36,911 )       (74,497 )
Total income tax benefit       (38,227 )       (77,703 )
 
NET INCOME (LOSS) 2,120 (65,981 ) 17,132 (152,952 )
Net loss attributable to noncontrolling interests               14  
 
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 2,120   $ (65,981 ) $ 17,132   $ (152,938 )
 
INCOME (LOSS) PER COMMON SHARE (1)
Basic $ 0.02   $ (0.73 ) $ 0.19   $ (1.69 )
Diluted $ 0.02   $ (0.73 ) $ 0.19   $ (1.69 )
WEIGHTED AVERAGE SHARES OUTSTANDING (1)
Basic   90,940     90,684     90,916     90,668  
Diluted   91,869     90,684     91,821     90,668  

(1)

  All share and per share amounts have been retroactively adjusted for the 2017 periods to reflect the Company’s one-for-four reverse stock split in November 2017.
 
 
WHITING PETROLEUM CORPORATION
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to
Adjusted Net Income (Loss) Attributable to Common Shareholders
(in thousands, except per share data)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
Net income (loss) attributable to common shareholders $ 2,120 $ (65,981 ) $ 17,132 $ (152,938 )
Adjustments:
Amortization of deferred gain on sale (2,925 ) (3,240 ) (5,829 ) (6,582 )
(Gain) loss on sale of properties (1,090 ) 1,024 1,486 2,298
Impairment expense 8,260 18,943 18,310 33,646
Loss on extinguishment of debt 808 31,968 1,540
Total measure of derivative (gain) loss reported under U.S. GAAP 103,483 (20,163 ) 156,147 16,414
Total net cash settlements received (paid) on commodity derivatives during the period (53,379 ) 4,588 (78,216 ) 6,058
Tax impact of adjustments above       (429 )       (19,908 )
Adjusted net income (loss) attributable to common shareholders (1) $ 57,277   $ (65,258 ) $ 140,998   $ (119,472 )
 
Adjusted net income (loss) attributable to common shareholders per share, basic (2) $ 0.63   $ (0.72 ) $ 1.55   $ (1.32 )
Adjusted net income (loss) attributable to common shareholders per share, diluted (2) $ 0.62   $ (0.72 ) $ 1.54   $ (1.32 )

(1)

  Adjusted Net Income (Loss) Attributable to Common Shareholders is a non-GAAP financial measure. Management believes it provides useful information to investors for analysis of Whiting’s fundamental business on a recurring basis. In addition, management believes that Adjusted Net Income (Loss) Attributable to Common Shareholders is widely used by professional research analysts and others in valuation, comparison and investment recommendations of companies in the oil and gas exploration and production industry, and many investors use the published research of industry research analysts in making investment decisions. Adjusted Net Income (Loss) Attributable for Common Shareholders should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.

(2)

All per share amounts have been retroactively adjusted for the 2017 periods to reflect the Company’s one-for-four reverse stock split in November 2017.
 
 
WHITING PETROLEUM CORPORATION
Reconciliation of Net Cash Provided by Operating Activities to Discretionary Cash Flow and
Operating Cash Flow in Excess of Capital Expenditures
(in thousands)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
2018     2017 2018     2017
Net cash provided by operating activities $ 310,413 $ 110,993 $ 543,280 $ 191,063
Operating cash outflow for settlement of commodity derivative contract 61,036
Exploration 4,974 6,352 9,671 12,490
Changes in working capital   (46,348 )   22,003   (54,479 )   118,384
Discretionary cash flow (1) $ 269,039   $ 139,348 $ 559,508   $ 321,937
                       
Three Months Ended Nine Months Ended
June 30, 2018 June 30, 2018
Net cash provided by operating activities $ 310,413 $ 829,983
Capital expenditures   (203,250 )   (561,151 )
Operating cash flow in excess of capital expenditures (1) $ 107,163   $ 268,832  

(1)

  Discretionary cash flow and operating cash flow in excess of capital expenditures are non-GAAP measures. Such measures are presented because management believes they provide useful information to investors for analysis of the Company’s ability to internally fund acquisitions, exploration and development. Such measures should not be considered in isolation or as a substitute for net income, income from operations, net cash provided by operating activities or other income, cash flow or liquidity measures under U.S. GAAP and may not be comparable to other similarly titled measures of other companies.
 
 

Conference Call

The Company’s management will host a conference call with investors, analysts and other interested parties on Wednesday, August 1, 2018 at 11:00 a.m. ET (10:00 a.m. CT, 9:00 a.m. MT) to discuss Whiting’s second quarter 2018 financial and operating results. Participants are encouraged to pre-register for the conference call by clicking on the following link: http://dpregister.com/10122141. Callers who pre-register will be given a unique telephone number and PIN to gain immediate access on the day of the call.

Those without internet access or unable to pre-register may join the live call by dialing: (877) 328-5506 (U.S.), (866) 450-4696 (Canada) or (412) 317-5422 (International) to be connected to the call. Presentation slides will be available at http://www.whiting.com by clicking on the “Investor Relations” box on the menu and then on the link titled “Presentations & Events.”

A telephonic replay will be available beginning one to two hours after the call on Wednesday, August 1, 2018 and continuing through Wednesday, August 8, 2018. You may access this replay at (877) 344-7529 (U.S.), 855-669-9658 (Canada) or (412) 317-0088 (International) and enter the pass code 10122141. You may also access a web archive at http://www.whiting.com beginning one to two hours after the conference call.

About Whiting Petroleum Corporation

Whiting Petroleum Corporation, a Delaware corporation, is an independent oil and gas company that develops, produces, acquires and explores for crude oil, natural gas and natural gas liquids primarily in the Rocky Mountains region of the United States. The Company’s largest projects are in the Bakken and Three Forks plays in North Dakota and Montana and the Niobrara play in northeast Colorado. The Company trades publicly under the symbol WLL on the New York Stock Exchange. For further information, please visit http://www.whiting.com.

Forward-Looking Statements

This news release contains statements that we believe to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than historical facts, including, without limitation, statements regarding our future financial position, business strategy, projected revenues, earnings, costs, capital expenditures and debt levels, and plans and objectives of management for future operations, are forward-looking statements. When used in this news release, words such as we “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe” or “should” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements.

These risks and uncertainties include, but are not limited to: declines in or extended periods of low oil, NGL or natural gas prices; our level of success in exploration, development and production activities; risks related to our level of indebtedness, ability to comply with debt covenants and periodic redeterminations of the borrowing base under our credit agreement; impacts to financial statements as a result of impairment write-downs; our ability to successfully complete asset dispositions and the risks related thereto; revisions to reserve estimates as a result of changes in commodity prices, regulation and other factors; adverse weather conditions that may negatively impact development or production activities; the timing of our exploration and development expenditures; inaccuracies of our reserve estimates or our assumptions underlying them; risks relating to any unforeseen liabilities of ours; our ability to generate sufficient cash flows from operations to meet the internally funded portion of our capital expenditures budget; our ability to obtain external capital to finance exploration and development operations; federal and state initiatives relating to the regulation of hydraulic fracturing and air emissions; unforeseen underperformance of or liabilities associated with acquired properties; the impacts of hedging on our results of operations; failure of our properties to yield oil or gas in commercially viable quantities; availability of, and risks associated with, transport of oil and gas; our ability to drill producing wells on undeveloped acreage prior to its lease expiration; shortages of or delays in obtaining qualified personnel or equipment, including drilling rigs and completion services; uninsured or underinsured losses resulting from our oil and gas operations; our inability to access oil and gas markets due to market conditions or operational impediments; the impact and costs of compliance with laws and regulations governing our oil and gas operations; the potential impact of changes in laws, including tax reform, that could have a negative effect on the oil and gas industry; our ability to replace our oil and natural gas reserves; any loss of our senior management or technical personnel; competition in the oil and gas industry; cyber security attacks or failures of our telecommunication systems; and other risks described under the caption “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2017. We assume no obligation, and disclaim any duty, to update the forward-looking statements in this news release.

http://www.businesswire.com/news/home/20180731005873/en/Whiting-Petroleum-Corporation-Announces-Quarter-2018-Financial/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Frontier Communications Reports 2018 Second Quarter Results

NORWALK, Conn.–()–Frontier Communications Corporation (NASDAQ:FTR) today reported financial results for the second quarter ended June 30, 2018.

“We continued to make further progress in the second quarter with the key initiatives that we have underway across the company,” said Dan McCarthy, President and CEO. “We are pleased to have maintained good subscriber momentum despite facing typical second-quarter seasonal headwinds. Underlying trends should continue improving in the latter half of this year, once summer seasonality is behind us. I am also pleased that our efforts in Commercial have begun to drive improved revenue trends.”

“We successfully concluded our $350 million synergy program in the second quarter,” said McCarthy. “We have begun our next phase of corporate transformation, which entails both revenue enhancement and productivity improvement initiatives with targeted EBITDA benefits of $500 million by year-end 2020. The entire Frontier team remains focused on enhancing the customer experience, achieving further improvements in churn and subscriber trends, maintaining strong cash flow, strengthening the balance sheet, and improving shareholder value.”

______________________________

1 See “Non-GAAP Measures” for a description of this measure and its calculation. See Schedule A for a reconciliation to net income/(loss).
 

Consolidated Results

Consolidated revenue for the second quarter 2018 was $2.16 billion. Within consolidated revenue, consumer revenue was $1.10 billion, commercial revenue was $970 million, and subsidy and other regulatory revenue was $97 million.

Net loss for the second quarter of 2018 was $18 million. Net loss for the second quarter attributable to common shares was $72 million, for a diluted net loss per common share of $0.92. Adjusted EBITDA totaled $884 million, for an adjusted EBITDA margin2 of 40.9%.

The Company successfully completed its program to attain $350 million in annualized cost synergies in the second quarter, in line with its stated target.

For the second quarter of 2018, net cash provided from operating activities was $672 million and operating free cash flow3 was $351 million. Over the four-quarter period ending June 30, 2018, net cash provided from operating activities was $1,944 million and operating free cash flow was $721 million.

Consumer Business Highlights

  • Revenue of $1.10 billion.
  • Customer churn of 1.95% (1.76% for Legacy and 2.25% for CTF operations) reflected the impact of summer seasonality.
  • Average Revenue Per Customer (ARPC) of $85.28 ($83.17 excluding adoption of ASC 606, stable sequentially).

Commercial Business Highlights

  • Revenue of $970 million.
  • Total commercial customers of 430,000 compared to 441,000 during the first quarter of 2018.
  • Wholesale revenue was stable sequentially, and the trend in SME revenue improved sequentially.

______________________________

2 See Note 1, above. Adjusted EBITDA margin is a non-GAAP measure of performance, calculated as adjusted EBITDA, divided by total revenue. See “Non-GAAP Measures” for a description of this measure and its calculation. See Schedule A for a reconciliation to net loss.

3 Operating free cash flow is a non-GAAP measure of liquidity derived from net cash provided from operating activities. See “Non-GAAP Measures” for a description of this measure and its calculation and Schedules A for a reconciliation to net cash provided from operating activities.
 

Capital Structure and Capital Allocation

  • As of June 30, 2018, Frontier’s leverage ratio was 4.70:1.
  • Frontier remains committed to reducing debt and improving its financial leverage profile.
    • Frontier purchased $48 million principal amount of its 2018 senior unsecured notes on the open market during the second quarter of 2018.
    • On July 3, 2018 Frontier added $240 million to its existing Term Loan B facility maturing June 15, 2024. Proceeds were used to repay the entire $228 million of the CoBank senior term loan maturing October 24, 2019 and $6 million of the CoBank senior term loan maturing October 12, 2021.
  • Frontier’s 11.125% Mandatory Convertible Preferred Stock converted into shares of Frontier common stock on June 29, 2018. The mandatory conversion increased common shares outstanding by 25.5 million, resulting in total common shares outstanding of 105.8 million as of June 30, 2018.

Guidance

Guidance for 2018 remains unchanged.

  • Adjusted EBITDA – Approximately $3.6 billion
  • Capital expenditures – $1.0 billion to $1.15 billion
  • Cash taxes – Less than $25 million
  • Cash pension/OPEB – Approximately $150 million
  • Cash interest expense – Approximately $1.5 billion for the full year; third quarter cash interest payments of approximately $600 million
  • Operating free cash flow – Approximately $800 million

Non-GAAP Financial Measures

Frontier uses certain non-GAAP financial measures in evaluating its performance, including EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, operating free cash flow, and adjusted operating expenses, each of which is described below. Management uses these non-GAAP financial measures internally to (i) assist in analyzing Frontier’s underlying financial performance from period to period, (ii) analyze and evaluate strategic and operational decisions, (iii) establish criteria for compensation decisions, and (iv) assist in the understanding of Frontier’s ability to generate cash flow and, as a result, to plan for future capital and operational decisions. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors regarding Frontier’s financial condition and results of operations because these measures, when used in conjunction with related GAAP financial measures (i) provide a more comprehensive view of Frontier’s core operations and ability to generate cash flow, (ii) provide investors with the financial analytical framework upon which management bases financial, operational, compensation, and planning decisions and (iii) present measurements that investors and rating agencies have indicated to management are useful to them in assessing Frontier and its results of operations.

A reconciliation of these measures to the most comparable financial measures calculated and presented in accordance with GAAP is included in the accompanying tables. These non-GAAP financial measures are not measures of financial performance or liquidity under GAAP, nor are they alternatives to GAAP measures and they may not be comparable to similarly titled measures of other companies.

EBITDA is defined as net income (loss) less income tax expense (benefit), interest expense, investment and other income, pension settlement costs, gains/losses on extinguishment of debt, and depreciation and amortization. EBITDA margin is calculated by dividing EBITDA by total revenue.

Adjusted EBITDA is defined as EBITDA, as described above, adjusted to exclude acquisition and integration costs, certain pension/OPEB expenses, restructuring costs and other charges, stock-based compensation expense, goodwill impairment charges, and certain other non-recurring items including work stoppage costs. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by total revenue.

Management uses EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin to assist it in comparing performance from period to period and as measures of operational performance. Management believes that these non-GAAP measures provide useful information for investors in evaluating Frontier’s operational performance from period to period because they exclude depreciation and amortization expenses related to investments made in prior periods and are determined without regard to capital structure or investment activities. By excluding capital expenditures, debt repayments and dividends, among other factors, these non-GAAP financial measures have certain shortcomings. Management compensates for these shortcomings by utilizing these non-GAAP financial measures in conjunction with the comparable GAAP financial measures.

Adjusted net income (loss) attributable to Frontier common shareholders is defined as net income (loss) attributable to Frontier common shareholders and excludes acquisition and integration costs, restructuring costs and other charges, pension settlement costs, goodwill impairment charges, certain income tax items and the income tax effect of these items, and certain other non-recurring items including work stoppage costs. Adjusting for these items allows investors to better understand and analyze Frontier’s financial performance over the periods presented.

Management defines operating free cash flow, a non-GAAP measure, as net cash provided from operating activities less capital expenditures. Management uses operating free cash flow to assist it in comparing liquidity from period to period and to obtain a more comprehensive view of Frontier’s core operations and ability to generate cash flow. Management believes that this non-GAAP measure is useful to investors in evaluating cash available to service debt and pay dividends. This non-GAAP financial measure has certain shortcomings; it does not represent the residual cash flow available for discretionary expenditures, as items such as debt repayments and preferred stock dividends are not deducted in determining such measure. Management compensates for these shortcomings by utilizing this non-GAAP financial measure in conjunction with the comparable GAAP financial measure.

Adjusted operating expenses is defined as operating expenses adjusted to exclude depreciation and amortization, acquisition and integration costs, restructuring and other charges, goodwill impairment charges, certain pension/OPEB expenses, stock-based compensation expense, and certain other non-recurring items including work stoppage costs. Investors have indicated that this non-GAAP measure is useful in evaluating Frontier’s performance.

The information in this press release should be read in conjunction with the financial statements and footnotes contained in Frontier’s documents filed with the U.S. Securities and Exchange Commission.

Conference Call and Webcast

Frontier will host a conference call today at 4:30 P.M. Eastern time. In connection with the conference call and as a convenience to investors, Frontier furnished today, under cover of a Current Report on Form 8-K, additional materials regarding second quarter 2018 results. The conference call will be webcast and may be accessed in the Webcasts & Presentations section of Frontier’s Investor Relations website at www.frontier.com/ir.

A telephonic replay of the conference call will be available from 7:30 P.M. Eastern Time on Tuesday, July 31, 2018, through 7:30 P.M. Eastern Time on Sunday, August 5, 2018 at 888-203-1112. Use the passcode 3090153 to access the replay. A webcast replay of the call will be available at www.frontier.com/ir.

About Frontier Communications

Frontier Communications Corporation (NASDAQ: FTR) is a leader in providing communications services to urban, suburban, and rural communities in 29 states. Frontier offers a variety of services to residential customers over its fiber-optic and copper networks, including video, high-speed internet, advanced voice, and Frontier Secure® digital protection solutions. Frontier Business offers communications solutions to small, medium, and enterprise businesses. More information about Frontier is available at www.frontier.com.

Forward-Looking Statements

This earnings release contains “forward-looking statements,” related to future events. Forward-looking statements address Frontier’s expected future business, financial performance, and financial condition, and contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “may,” “will,” “would,” or “target.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Frontier, particular uncertainties that could cause actual results to be materially different than those expressed in such forward-looking statements include: competition from cable, wireless and wireline carriers, satellite, and OTT companies, and the risk that Frontier will not respond on a timely or profitable basis; Frontier’s ability to successfully adjust to changes in the communications industry, including the effects of technological changes and competition on its capital expenditures, products and service offerings; declines in revenue from Frontier’s voice services, switched and non-switched access and video and data services that it cannot stabilize or offset with increases in revenue from other products and services; Frontier’s ability to successfully implement strategic initiatives, including opportunities to enhance revenue and realize operational improvements; risks related to disruptions in Frontier’s networks, infrastructure and information technology that may result in customer loss and/or incurrence of additional expenses; Frontier’s ability to retain or attract new customers and to maintain relationships with customers, employees or suppliers; Frontier’s ability to realize anticipated benefits from recent acquisitions; Frontier’s ability to successfully introduce new product offerings; Frontier’s ability to dispose of certain assets or asset groups on terms that are attractive to Frontier, or at all; the effects of governmental legislation and regulation on Frontier’s business; the impact of regulatory, investigative and legal proceedings and legal compliance risks; government infrastructure projects that impact capital expenditures; continued reductions in switched access revenue as a result of regulation, competition or technology substitutions; the effects of changes in the availability of federal and state universal service funding or other subsidies to Frontier and its competitors; Frontier’s ability to meet its remaining CAF II funding obligations on a timely basis and the risk of penalties or obligations to return certain CAF II funds; Frontier’s ability to effectively manage service quality and meet mandated service quality metrics;; the effects of changes in accounting policies or practices, including potential future impairment charges with respect to intangible assets;; the effects of increased medical expenses and pension and postemployment expenses; the effects of changes in income tax rates, tax laws, regulations or rulings, or federal or state tax assessments; Frontier’s ability to successfully renegotiate union contracts; changes in pension plan assumptions, interest rates, discount rates, regulatory rules and/or the value of Frontier’s pension plan assets, which could require Frontier to make increased contributions to its pension plans; Frontier’s ability to effectively manage its operations, operating expenses, capital expenditures, debt service requirements and cash paid for income taxes and liquidity; adverse changes in the credit markets, which could impact the availability and cost of financing; adverse changes in the ratings given to Frontier’s debt securities by nationally accredited ratings organizations;; covenants in Frontier’s indentures and credit agreements that may limit Frontier’s operational and financial flexibility as well as its ability to access the capital markets in the future; the effects of state regulatory cash management practices that could limit Frontier’s ability to transfer cash among its subsidiaries or dividend funds up to the parent company; the effects of changes in both general and local economic conditions in the markets that Frontier serves; Frontier’s ability to hire or retain key personnel; the effects of severe weather events or other natural or man-made disasters, which may increase operating and capital expenses or adversely impact customer revenue; the impact of potential information technology or data security breaches or other disruptions; and the risks and other factors contained in Frontier’s filings with the U.S. Securities and Exchange Commission, including its reports on Forms 10-K and 10-Q. These risks and uncertainties may cause actual future results to be materially different than those expressed in such forward-looking statements. Frontier has no obligation to update or revise these forward-looking statements and does not undertake to do so.

                 
Frontier Communications Corporation
Consolidated Financial Data
 
For the quarter ended For the six months ended
($ in millions and shares in thousands, except per share amounts) June 30, 2018 (1) March 31, 2018 (1) June 30, 2017 June 30, 2018 (1) June 30, 2017
 
Statement of Operations Data
Revenue $ 2,162 $ 2,199 $ 2,304 $ 4,361 $ 4,660
 
Operating expenses:
Network access expenses 369 372 408 741 819
Network related expenses 478 483 477 (2) 961 970 (2)
Selling, general and administrative expenses 460 469 531 (2) 929 1,073 (2)
Depreciation and amortization 486 505 552 991 1,131
Goodwill impairment 670 670
Acquisition and integration costs 12 14
Restructuring costs and other charges   2   4   29   6   41
Total operating expenses   1,795   1,833   2,679 (2)   3,628   4,718 (2)
(1) (1)
(1) (1)
Operating income (loss) 367 366 (375) (2) 733 (58) (2)
(1) (1)
Investment and other income (loss), net 5 8 (2) 13 (2)
Pension settlement costs 25 19 25 62
Gain (Loss) on extinguishment of debt 33 (90) 33 (90)
Interest expense   385   374   388   759   776
 
Income (loss) before income taxes (38) 33 (872) (5) (986)
Income tax expense (benefit)   (20)   13   (210)   (7)   (249)
 
Net income (2)
Less: Income attributable to the noncontrolling
interest in a partnership
Net Income (loss) (18) 20 (662) 2 (737)
 
Less: Dividends on preferred stock   54   53   53   107   107
Net loss attributable to Frontier
common shareholders $ (72) $ (33) $ (715) $ (105) $ (844)
 
Weighted average shares outstanding – basic (3) 78,026 77,416 77,795 77,685 77,679
Weighted average shares outstanding – diluted (3) 78,026 77,416 77,951 77,685 77,835
 
Basic net loss per common share $ (0.92) $ (0.44) $ (9.20) $ (1.35) $ (10.88)
Diluted net loss per common share $ (0.92) $ (0.44) $ (9.21) $ (1.35) $ (10.89)
 
Other Financial Data:
Capital expenditures – Business operations $ 321 $ 297 $ 263 $ 618 $ 578
Capital expenditures – Integration activities $ $ $ 4 $ $ 5
Dividends declared – Common stock $ $ $ 48 $ $ 172
Dividends declared – Preferred stock $ 54 $ 53 $ 53 $ 107 $ 107
 
(1) We adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (ASC 606)” on January 1, 2018, using the modified retrospective application. This method does not impact the prior periods, which continue to reflect the accounting treatment prior to the adoption of ASC 606. As a result, for items that were affected by our adoption of ASC 606, financial results of periods prior to January 1, 2018 are not comparable to the current period financial results. To provide comparability to our results, we provide a supplemental schedule (see Schedule D) which contains certain financial information on a pre adoption of ASC 606 basis.
 
(2) Effective January 1, 2018, Frontier adopted ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The standard requires certain benefit costs to be reclassified from operating expenses to non-operating expenses. This change in policy was applied using a retrospective approach and accordingly we have reclassified $0 and $3 million of net operating expenses as non-operating expense for the three and six months ended June 30, 2017, respectively. Additional pension settlement costs of $19 million and $62 million for the three and six months ended June 30, 2017, respectively, were reclassified from operating expense to non-operating expense.
 
(3) As of June 30, 2018, there were 106 million of common shares outstanding and 0 shares of preferred stock.
 
                 
Frontier Communications Corporation
Consolidated Financial Data
 
For the quarter ended For the six months ended
June 30, 2018 (1) March 31, 2018 (1) June 30, 2017 June 30, 2018 (1) June 30, 2017

($ in millions)

 
Selected Statement of Operations Data
Revenue:
Data and internet services $ 973 $ 985 $ 974 ((2 )) $ 1,958 $ 1,967 ((2 ))
Voice services 682 702 724 1,384 1,475
Video services 270 280 329 550 676
Other   140   135   79   275   147
Customer revenue 2,065 2,102 2,106 ((2 )) 4,167 4,265 ((2 ))
Subsidy and other regulatory revenue   97   97   198   194   395
Total revenue $ 2,162 $ 2,199 $ 2,304 ((2 )) $ 4,361 $ 4,660 ((2 ))
 
Other Financial Data
Revenue:
Consumer $ 1,095 $ 1,128 $ 1,124 $ 2,223 $ 2,288
Commercial   970   974   982 ((2 ))   1,944   1,977 ((2 ))
Customer revenue 2,065 2,102 2,106 ((2 )) 4,167 4,265 ((2 ))
Subsidy and other regulatory revenue   97   97   198   194   395
Total revenue $ 2,162 $ 2,199 $ 2,304 ((2 )) $ 4,361 $ 4,660 ((2 ))
 
(1) We adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (ASC 606)” on January 1, 2018, using the modified retrospective application. This method does not impact the prior periods, which continue to reflect the accounting treatment prior to the adoption of ASC 606. As a result, for items that were affected by our adoption of ASC 606, financial results of periods prior to January 1, 2018 are not comparable to the current period financial results. To provide comparability to our results, we provide a supplemental schedule (see Schedule D) which contains certain financial information on a pre adoption of ASC 606 basis.
 

(2) Includes revenue from Frontier Secure Strategic Partnerships business, which was sold in May of 2017, of $15 million and $40 million for the three and six months ended June 30, 2017, respectively.

 
           
Frontier Communications Corporation
Consolidated Financial and Operating Data
 
 
For the quarter ended For the six months ended
June 30, 2018 March 31, 2018 June 30, 2017 June 30, 2018   June 30, 2017
 
Customers (in thousands) 4,667 4,765 5,058 4,667 5,058
 
Consumer customer metrics
Customers (in thousands) 4,237 4,324 4,585 4,237 4,585
Net customer additions/(losses) (86 ) (74 ) (151 ) (160 ) (306 )
Average monthly consumer
revenue per customer $ 85.28

(1

)

$ 86.21

(1

)

$ 80.38 $ 85.79

(1

)

$ 80.59
Customer monthly churn 1.95 % 1.94 % 2.24 % 1.94 % 2.31 %
 
Commercial customer metrics
Customers (in thousands) 430 441 473 430 473
Broadband subscriber metrics (in thousands)
Broadband subscribers 3,863 3,895 4,063 3,863 4,063
Net subscriber additions/(losses) (32 ) (43 ) (100 ) (75 ) (208 )
 
Video (excl. DISH) subscriber metrics (in thousands)
Video subscribers 902 934 1,007 902 1,007
Net subscriber additions/(losses) (32 ) (28 ) (58 ) (60 ) (138 )
 
Video – DISH subscriber metrics (in thousands)
DISH subscribers 219 227 254 219 254
Net subscriber additions/(losses) (8 ) (8 ) (12 ) (16 ) (20 )
 
Employees 21,718 22,081 23,924 21,718 23,924
 
(1) We adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (ASC 606)” on January 1, 2018, using the modified retrospective application. This method does not impact the prior periods, which continue to reflect the accounting treatment prior to the adoption of ASC 606. As a result, for items that were affected by our adoption of ASC 606, financial results of periods prior to January 1, 2018 are not comparable to the current period financial results. To provide comparability to our results, we provide a supplemental schedule (see Schedule D) which contains certain financial information on a pre adoption of ASC 606 basis.
 
       
Frontier Communications Corporation
Condensed Consolidated Balance Sheet Data
 
 

($ in millions)

June 30, 2018 December 31, 2017
 

ASSETS

Current assets:
Cash and cash equivalents $ 384 $ 362
Accounts receivable, net 751 819
Other current assets   293   142
Total current assets 1,428 1,323
 
Property, plant and equipment, net 14,282 14,377
Other assets – principally goodwill   9,020   9,184
Total assets $ 24,730 $ 24,884
 

LIABILITIES AND EQUITY

Current liabilities:
Long-term debt due within one year $ 1,228 $ 656
Accounts payable and other current liabilities   1,828   1,852
Total current liabilities 3,056 2,508
 
Deferred income taxes and other liabilities 3,064 3,132
Long-term debt 16,209 16,970
Equity   2,401   2,274
Total liabilities and equity $ 24,730 $ 24,884
 
       
Frontier Communications Corporation
Consolidated Cash Flow Data
 
For the six months ended

($ in millions)

June 30, 2018 June 30, 2017
 
Cash flows provided from (used by) operating activities:
Net income (loss) $ 2 $ (737)
Adjustments to reconcile net loss to net cash provided from

(used by) operating activities:

Depreciation and amortization 991 1,131
(Gain) loss on extinguishment of debt (33) 90
Pension settlement costs 25 62
Stock-based compensation expense 9 6
Amortization of deferred financing costs 17 17
Other adjustments (20) (4)
Deferred income taxes (9) (254)
Goodwill impairment 670
Change in accounts receivable 37 151
Change in accounts payable and other liabilities (72) (253)
Change in other current assets   (24)   (50)
Net cash provided from operating activities 923 829
 
Cash flows provided from (used by) investing activities:
Capital expenditures – Business operations (618) (578)
Capital expenditures – Integration activities (5)
Proceeds on sale of assets 11 94
Other   (10)   5
Net cash used by investing activities (617) (484)
 
Cash flows provided from (used by) financing activities:
Proceeds from long-term debt borrowings 1,600 1,500
Long-term debt payments (1,714) (1,576)
Financing costs paid (39) (15)
Premium paid to retire debt (17) (80)
Dividends paid on common stock (172)
Dividends paid on preferred stock (53) (107)
Capital lease obligation payments (17) (25)
Other   (8)   (5)
Net cash provided used by financing activities (248) (480)
 
Increase/(Decrease) in cash, cash equivalents, and restricted cash 58 (135)
Cash, cash equivalents, and restricted cash at January 1,   376   522
 
Cash, cash equivalents, and restricted cash at June 30, $ 434 $ 387
 
Supplemental cash flow information:
Cash paid (received) during the period for:
Interest $ 716 $ 797
Income tax payments (refunds), net $ 5 $ (3)
 
                    SCHEDULE A
Frontier Communications Corporation
Reconciliation of Non-GAAP Financial Measures
 
For the quarter ended For the six months ended

($ in millions)

June 30, 2018 March 31, 2018 June 30, 2017 June 30, 2018 June 30, 2017
 

EBITDA

Net income (loss) $ (18) $ 20 $ (662) $ 2 $ (737)
Add back (subtract):
Income tax expense (benefit) (20) 13 (210) (7) (249)
Interest expense 385 374 388 759 776
Investment and other (income) loss, net (5) (8) (13)
Pension settlement costs 25 19 25 62
(Gain) Loss on extinguishment of debt     (33)   90   (33)   90
Operating income (loss) 367 366 (375) 733 (58)
Depreciation and amortization   486   505   552   991   1,131
EBITDA 853 871 177 1,724 1,073
 
Add back:
Acquisition and integration costs 12 14
Pension/OPEB expense 23 22 25 45 47
Restructuring costs and other charges 2 4 29 6 41
Stock-based compensation expense 5 4 3 9 6
Work stoppage costs 1 7 8
Goodwill impairment       670     670
Adjusted EBITDA $ 884 $ 908 $ 916 $ 1,792 $ 1,851
 
EBITDA margin 39.5% 39.6% 7.7% 39.5% 23.0%
Adjusted EBITDA margin 40.9% 41.3% 39.8% 41.1% 39.7%
 

Free Cash Flow

 
Net cash provided from operating activities $ 672 $ 251 $ 529 $ 923 $ 829
Add back (subtract):
Capital expenditures – Business operations (321) (297) (263) (618) (578)
Capital expenditures – Integration       (4)     (5)
Operating free cash flow $ 351 $ (46) $ 262 $ 305 $ 246
 
            SCHEDULE B
Frontier Communications Corporation
Reconciliation of Non-GAAP Financial Measures
 
For the quarter ended
June 30, 2018 March 31, 2018 June 30, 2017

($ in millions, except per share amounts)

Net Income
(Loss)

Basic Earnings
(Loss) Per
Share

Net Income
(Loss)

Basic Earnings
(Loss) Per
Share

Net Income
(Loss)

 

Basic Earnings
(Loss) Per
Share

 
Net loss attributable to
 
Frontier common shareholders $ (72) $ (0.92) $ (33) $ (0.44) $ (715) $ (9.20)
 
Acquisition and integration costs 12
Restructuring costs and other charges 2 4 29
Pension settlement costs 25 19
(Gain) Loss on extinguishment of debt (33) 90
Goodwill impairment 670
Work stoppage costs 1 7
Certain other tax items (1) (12) 4 4
Income tax effect on above items:
Acquisition and integration costs (4)
Restructuring costs and other charges (1) (11)
Pension settlement costs (6) (8)
(Gain) Loss on extinguishment of debt 9 (33)
Goodwill impairment (138)
Work stoppage costs         (2)          
10 0.12 (12) (0.15) 630 8.10
Adjusted net loss attributable to
Frontier common shareholders(2) $ (62) $ (0.80) $ (45) $ (0.58) $ (85) $ (1.10)
 
For the six months ended
June 30, 2018 June 30, 2017

Net Income
(Loss)

Basic Earnings
(Loss) Per
Share

Net Income
(Loss)

Basic Earnings
(Loss) Per
Share

 
Net loss attributable to
Frontier common shareholders $ (105) $ (1.35) $ (844) $ (10.88)
 
Acquisition and integration costs 14
Restructuring costs and other charges 6 41
Pension settlement costs 25 62
(Gain) Loss on extinguishment of debt (33) 90
Goodwill impairment 670
Work stoppage costs 8
Certain other tax items (1) (8) 5
Income tax effect on above items:
Acquisition and integration costs (5)
Restructuring costs and other charges (1) (15)
Pension settlement costs (6) (23)
(Gain) Loss on extinguishment of debt 9 (33)
Goodwill impairment (138)
Work stoppage costs   (2)          
(2) (0.03) 668 8.60
Adjusted net loss attributable to
Frontier common shareholders(2) $ (107) $ (1.38) $ (176) $ (2.28)
 
(1) Includes impact arising from federal research and development credits, changes in certain deferred tax balances, state tax law changes, state filing method change, and the net impact of uncertain tax positions.
 
(2) Adjusted net income (loss) attributable to Frontier common shareholders may not sum due to rounding.
 
SCHEDULE C
Frontier Communications Corporation
Reconciliation of Non-GAAP Financial Measures
                   
For the quarter ended For the six months ended

($ in millions)

June 30, 2018 March 31, 2018 June 30, 2017 June 30, 2018 June 30, 2017
 

Adjusted Operating Expenses

 
Total operating expenses $ 1,795 $ 1,833 $ 2,679 (1) $ 3,628 $ 4,718 (1)
 
Subtract:
Depreciation and amortization 486 505 552 991 1,131
Goodwill impairment 670 670
Acquisition and integration
costs 12 14
Pension/OPEB expense 23 22 25 (1) 45 47 (1)
Restructuring costs and other charges 2 4 29 6 41
Stock-based compensation expense 5 4 3 9 6
Work stoppage costs   1   7     8  
Adjusted operating expenses $ 1,278 $ 1,291 $ 1,388 $ 2,569 $ 2,809
 
(1) Effective January 1, 2018, Frontier adopted ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The standard requires certain benefit costs to be reclassified from operating expenses to non-operating expenses. This change in policy was applied using a retrospective approach and accordingly we have reclassified $0 and $3 million of net operating expenses as non-operating expense for the three and six months ended June 30, 2017, respectively. Additional pension settlement costs of $19 million and $62 million for the three and six months ended June 30, 2017, respectively, were reclassified from operating expense to non-operating expense.
 
SCHEDULE D
 
Comparability Disclaimer:
We adopted Accounting Standard Update 2014-09, “Revenue from Contracts with Customers (ASC 606)” on January 1, 2018, using the modified retrospective application. This method does not impact the prior periods, which continue to reflect the accounting treatment prior to the adoption of ASC 606. As a result, for items that were affected by our adoption of ASC 606, financial results of periods prior to January 1, 2018 are not comparable to the current period financial results. To provide comparability to our results, we provide the following supplemental schedule which contains certain financial information on a pre-adoption of ASC 606 basis.
Frontier Communications Corporation
Consolidated Financial Data
               
As reported Amounts Excluding Adoption of ASC 606
For the three months ended For the three months ended
($ in millions) June 30, 2018 March 31, 2018 June 30, 2018 March 31, 2018
 
Selected Statement of Operations Data
Revenue:
Data and Internet services $ 973 $ 985 $ 948 $ 942
Voice services 682 702 648 670
Video services 270 280 297 309
Other   140   135   86   85
Revenue from contracts with customers 2,065 2,102 1,979 2,006
Subsidy and other regulatory revenue   97   97   181   187
Total revenue $ 2,162 $ 2,199 $ 2,160 $ 2,193
 
Other Revenue Data
Revenue:
Consumer $ 1,095 $ 1,128 $ 1,068 $ 1,089
Commercial   970   974   911   917
Revenue from contracts
Revenue from contracts with customers 2,065 2,102 1,979 2,006
Subsidy and other regulatory revenue   97   97   181   187
Total revenue $ 2,162 $ 2,199 $ 2,160 $ 2,193
 
 
As reported Amounts Excluding Adoption of ASC 606
For the three months ended For the three months ended

($ in millions)

June 30, 2018 March 31, 2018 June 30, 2018 March 31, 2018
 
Statement of Operations Data
Revenue $ 2,162 $ 2,199 $ 2,160 $ 2,193
Operating expenses:
Network access expenses 369 372 366 369
Network related expenses 478 483 478 483
Selling, general and administrative expenses 460 469 469 473
Depreciation and amortization 486 505 486 505
Restructuring costs and other charges   2   4   2   4
Total operating expenses   1,795   1,833   1,801   1,834
 
Operating income (loss) 367 366 359 359
 
Investment and other income (loss), net 5 8 5 8
Pension settlement costs 25 25
Gain on extinguishment of debt 33 33
Interest expense   385   374   385   374
 
Income (loss) before income taxes (38) 33 (46) 26
Income tax expense (benefit)   (20)   13   (22)   12
 
Net Income (loss) (18) 20 (24) 14
 
Less: Dividends on preferred stock   54   53   54   53
Net loss attributable to Frontier
common shareholders $ (72) $ (33) $ (78) $ (39)
 
Other financial data:
Consumer ARPC $ 85.28 $ 86.21 $ 83.17 $ 83.26

http://www.businesswire.com/news/home/20180731005853/en/Frontier-Communications-Reports-2018-Quarter-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Fiserv Reports Second Quarter 2018 Results

BROOKFIELD, Wis.–()–Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the second quarter of 2018.

Second Quarter 2018 GAAP Results

GAAP revenue for the company increased 2 percent to $1.42 billion in the second quarter of 2018 compared to the prior year period, with 7 percent growth in the Payments segment and 5 percent decline in the Financial segment. For the first six months of 2018, GAAP revenue increased 3 percent to $2.86 billion compared to the prior year period, with 7 percent growth in the Payments segment and 3 percent decline in the Financial segment. The sale of a 55 percent interest of the company’s Lending Solutions business (the “Lending Transaction”) in the first quarter of 2018 resulted in a decline of GAAP revenue in 2018 for the Financial segment.

GAAP earnings per share was $0.60 in the second quarter and $1.61 in the first six months of 2018, increasing 18 percent and 49 percent, respectively, compared to the prior year periods. GAAP earnings per share in the first six months of 2018 included a gain of $0.36 per share on the Lending Transaction. The company completed a two-for-one stock split in the first quarter of 2018. Accordingly, all share data and per share amounts are presented on a split-adjusted basis.

GAAP operating margin was 25.2 percent in the second quarter and 33.8 percent in the first six months of 2018, respectively, compared to 26.8 percent in the second quarter and 26.5 percent in the first six months of 2017, respectively. GAAP operating margin in the first six months of 2018 included a $229 million gain resulting from the Lending Transaction.

Net cash provided by operating activities was $613 million in the first six months of 2018, which did not reflect $419 million of sale proceeds from the Lending Transaction. Net cash provided by operating activities was $691 million in the first six months of 2017, which included cash distributions of $31 million from StoneRiver Group, L.P. (“StoneRiver”), a joint venture in which the company owns a 49 percent interest.

“Our second quarter results were excellent and have us well-positioned to achieve our full-year objectives,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “We continue to focus on service quality, innovation and integration which is reflected in both our current results and sales pipeline entering the second half of the year.”

Second Quarter 2018 Non-GAAP Results and Additional Information

  • Adjusted revenue increased 2 percent to $1.35 billion in the second quarter and 3 percent to $2.72 billion in the first six months of 2018 compared to the prior year periods.
  • Internal revenue growth for the company was 6 percent in the second quarter, with 5 percent growth in the Payments segment and 7 percent growth in the Financial segment.
  • Internal revenue growth for the company was 5 percent in the first six months of 2018, with 5 percent growth in the Payments segment and 4 percent growth in the Financial segment.
  • Adjusted earnings per share increased 32 percent to $0.75 in the second quarter and 27 percent to $1.51 in the first six months of 2018 compared to the prior year periods.
  • Adjusted operating margin increased 40 basis points to 32.4 percent in the second quarter and increased 20 basis points to 32.5 percent in the first six months of 2018 compared to the prior year periods.
  • Free cash flow was $491 million in the first six months of 2018 compared to $555 million in the prior year period.
  • Sales results were up 6 percent in the quarter and 9 percent in the first six months of 2018 compared to the prior year periods.
  • The company repurchased 5.4 million and 11.0 million shares of common stock for $390 million and $789 million in the second quarter and first half of 2018, respectively. The company had 10.4 million remaining shares authorized for repurchase as of June 30, 2018.

Outlook for 2018

Fiserv continues to expect internal revenue growth of at least 4.5 percent and adjusted earnings per share in a split-adjusted range of $3.02 to $3.15, which represents growth of 22 to 27 percent over 2017 as adjusted for the Lending Transaction.

“Our first-half performance has set us up for strong full-year results and additional momentum as we look into 2019,” said Yabuki.

Earnings Conference Call

The company will discuss its second quarter 2018 results on a conference call and webcast at 4 p.m. CT on Tuesday, July 31, 2018. To register for the event, go to Fiserv.com and click on the Q2 Earnings webcast link. Supplemental materials will be available in the “Investor Relations” section of the website.

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) enables clients worldwide to create and deliver financial services experiences in step with the way people live and work today. For more than 30 years, Fiserv has been a trusted leader in financial services technology, helping clients achieve best-in-class results by driving quality and innovation in payments, processing services, risk and compliance, customer and channel management, and insights and optimization. Fiserv is a member of the FORTUNE® 500 and has been named among the FORTUNE Magazine World’s Most Admired Companies® for five consecutive years, recognized for strength of business model and innovation leadership. For more information, visit Fiserv.com.

Use of Non-GAAP Financial Measures

In this earnings release, the company supplements its reporting of information determined in accordance with GAAP, such as revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities, with “adjusted revenue,” “internal revenue growth,” “adjusted operating income,” “adjusted operating margin,” “adjusted net income,” “adjusted earnings per share,” “adjusted earnings per share, as adjusted for the Lending Transaction,” and “free cash flow.” Management believes that adjustments for certain non-cash or other items and the exclusion of certain pass-through revenue and expenses should enhance shareholders’ ability to evaluate the company’s performance, as such measures provide additional insights into the factors and trends affecting its business. Therefore, the company excludes these items from GAAP revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities to calculate these non-GAAP measures. The corresponding reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are included in this earnings release, except for forward-looking measures where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the non-cash and other items described below that are excluded from the non-GAAP outlook measures. See page 11 for additional information regarding the company’s forward-looking non-GAAP financial measures.

Examples of non-cash or other items may include, but are not limited to, non-cash deferred revenue adjustments arising from acquisitions, non-cash intangible asset amortization expense associated with acquisitions, non-cash impairment charges, severance costs, merger and integration costs, certain costs associated with the achievement of the company’s operational effectiveness objectives, gains or losses from dispositions and unconsolidated affiliates, and certain discrete tax benefits. The company excludes these items to more clearly focus on the factors management believes are pertinent to its operations, and management uses this information to make operating decisions, including the allocation of resources to the company’s various businesses.

Internal revenue growth and free cash flow are non-GAAP financial measures and are described on page 10. Management believes internal revenue growth is useful because it presents revenue growth excluding acquisitions, dispositions and the impact of postage reimbursements in the company’s Output Solutions business, and including deferred revenue purchase accounting adjustments. Management believes free cash flow is useful to measure the funds generated in a given period that are available for debt service requirements and strategic capital decisions. Management believes this supplemental information enhances shareholders’ ability to evaluate and understand the company’s core business performance.

These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be considered in addition to, and not as a substitute for, revenue, operating income, operating margin, income from continuing operations, net income, earnings per share from continuing operations, earnings per share and net cash provided by operating activities or any other amount determined in accordance with GAAP.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated internal revenue growth, adjusted earnings per share and adjusted earnings per share growth. Statements can generally be identified as forward-looking because they include words such as “believes,” “anticipates,” “expects,” “could,” “should” or words of similar meaning. Statements that describe the company’s future plans, objectives or goals are also forward-looking statements. Forward-looking statements are subject to assumptions, risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements. The factors that may affect the company’s results include, among others: pricing and other actions by competitors; the capacity of the company’s technology to keep pace with a rapidly evolving marketplace; the impact of a security breach or operational failure on the company’s business; the effect of legislative and regulatory actions in the United States and internationally; the company’s ability to comply with government regulations; the company’s ability to successfully identify, complete and integrate acquisitions, and to realize the anticipated benefits associated with the same; the impact of the company’s strategic initiatives; the impact of market and economic conditions on the financial services industry; and other factors included in the company’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2017, and in other documents that the company files with the SEC. You should consider these factors carefully in evaluating forward-looking statements and are cautioned not to place undue reliance on such statements. The company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

 
 
 
 
 
Fiserv, Inc.
Condensed Consolidated Statements of Income
(In millions, except per share amounts, unaudited)
 
        Three Months Ended
June 30,
    Six Months Ended
June 30,
2018     2017 2018     2017
Revenue
Processing and services $ 1,207 $ 1,186 $ 2,445 $ 2,364
Product 213   200   415   416  
Total revenue 1,420   1,386   2,860   2,780  
 
Expenses
Cost of processing and services 560 573 1,128 1,143
Cost of product 179 175 370 357
Selling, general and administrative 320 276 625 553
(Gain) loss on sale of businesses 3   (10 ) (229 ) (10 )
Total expenses 1,062   1,014   1,894   2,043  
 
Operating income 358 372 966 737
Interest expense (45 ) (44 ) (90 ) (86 )
Non-operating income 3   2   3   2  
 
Income before income taxes and income
from investments in unconsolidated affiliates
316 330 879 653
Income tax provision (72 ) (109 ) (212 ) (211 )
Income from investments in unconsolidated affiliates 7     7   26  
 
Net income $ 251   $ 221   $ 674   $ 468  
 
GAAP earnings per share – diluted $ 0.60 $ 0.51 $ 1.61 $ 1.08
 
Diluted shares used in computing earnings per share 416.4 432.5 419.0 435.5
 
Earnings per share is calculated using actual, unrounded amounts.
 
 
 
 
 
 
Fiserv, Inc.
Reconciliation of GAAP to
Adjusted Net Income and Adjusted Earnings Per Share
(In millions, except per share amounts, unaudited)
       
Three Months Ended
June 30,
Six Months Ended
June 30,
2018   2017 2018 2017
 
GAAP net income $ 251 $ 221 $ 674 $ 468
Adjustments:
Merger, integration and other costs 1 29 15 52 29
Severance costs 7 7 12 19
Amortization of acquisition-related intangible assets 40 40 80 78
Lending Transaction impact 2 (17 ) (17 )
Tax impact of adjustments 3 (17 ) (15 ) (32 ) (36 )
(Gain) loss on sale of businesses 4 3 (10 ) (229 ) (10 )
Tax impact of gain/loss on sale of businesses 3 (1 ) 5 77 5
StoneRiver transactions 5 (1 ) (1 ) (26 )
Tax impact of StoneRiver transactions 3       9  
Adjusted net income $ 311   $ 246   $ 633   $ 519  
 
GAAP earnings per share $ 0.60 $ 0.51 $ 1.61 $ 1.08
Adjustments – net of income taxes:
Merger, integration and other costs 1 0.05 0.02 0.10 0.04
Severance costs 0.01 0.01 0.02 0.03
Amortization of acquisition-related intangible assets 0.08 0.06 0.15 0.12
Lending Transaction impact 2 (0.03 ) (0.02 )
(Gain) loss on sale of businesses 4 0.01 (0.01 ) (0.36 ) (0.01 )
StoneRiver transactions 5       (0.04 )
Adjusted earnings per share $ 0.75   $ 0.57   $ 1.51   $ 1.19  
 

1 Merger, integration and other costs include acquisition and related integration costs of $29 million in 2018 and $13 million in 2017, and certain costs associated with the achievement of the company’s operational effectiveness objectives of $23 million in 2018 and $16 million in 2017, primarily consisting of expenses related to data center consolidation activities.

 

2 Represents the earnings attributable to the disposed 55 percent interest of the company’s Lending Solutions business.

 

3 The tax impact of adjustments is calculated using tax rates of 22 percent and 33 percent in 2018 and 2017, respectively, which approximates the company’s annual effective tax rate for the respective years, exclusive of the actual tax impacts associated with the gain/loss on sale of businesses and StoneRiver transactions.

 

4 Represents the (gain) loss on the Lending Transaction in 2018 and the sale of the company’s Australian item processing business in 2017.

 

5 Represents the company’s share of the net gains on the sales of businesses at StoneRiver.

 

See page 3 for disclosures related to the use of non-GAAP financial measures.

Earnings per share is calculated using actual, unrounded amounts.

 
 
 
 
 
 
Fiserv, Inc.
Financial Results by Segment
(In millions, unaudited)
                   
Three Months Ended
June 30,
Six Months Ended
June 30,
2018 2017 2018 2017
Total Company
Revenue $ 1,420 $ 1,386 $ 2,860 $ 2,780
Output Solutions postage reimbursements (67 ) (64 ) (141 ) (139 )
Deferred revenue purchase accounting adjustments 1   1   3   2  
Adjusted revenue $ 1,354   $ 1,323   $ 2,722   $ 2,643  
 
Operating income $ 358 $ 372 $ 966 $ 737
Merger, integration and other costs 31 15 54 29
Severance costs 7 7 12 19
Amortization of acquisition-related intangible assets 40 40 80 78
(Gain) loss on sale of businesses 3   (10 ) (229 ) (10 )
Adjusted operating income $ 439   $ 424   $ 883   $ 853  
Operating margin 25.2 % 26.8 % 33.8 % 26.5 %
Adjusted operating margin 32.4 % 32.0 % 32.5 % 32.3 %
 
Payments and Industry Products (“Payments”)
Revenue $ 837 $ 779 $ 1,679 $ 1,573
Output Solutions postage reimbursements (67 ) (64 ) (141 ) (139 )
Deferred revenue purchase accounting adjustments 1   1   3   2  
Adjusted revenue $ 771   $ 716   $ 1,541   $ 1,436  
 
Operating income $ 269 $ 238 $ 540 $ 497
Merger, integration and other costs 1   1   2   2  
Adjusted operating income $ 270   $ 239   $ 542   $ 499  
Operating margin 32.1 % 30.5 % 32.2 % 31.6 %
Adjusted operating margin 35.0 % 33.3 % 35.2 % 34.7 %
 
Financial Institution Services (“Financial”)
Revenue $ 590   $ 623   $ 1,206   $ 1,243  
 
Operating income $ 201   $ 214   $ 403   $ 410  
Operating margin 34.0 % 34.3 % 33.4 % 33.0 %
 
Corporate and Other
Revenue $ (7 ) $ (16 ) $ (25 ) $ (36 )
 
Operating income (loss) $ (112 ) $ (80 ) $ 23 $ (170 )
Merger, integration and other costs 30 14 52 27
Severance costs 7 7 12 19
Amortization of acquisition-related intangible assets 40 40 80 78
(Gain) loss on sale of businesses 3   (10 ) (229 ) (10 )
Adjusted operating loss $ (32 ) $ (29 ) $ (62 ) $ (56 )
 
See page 3 for disclosures related to the use of non-GAAP financial measures.
Operating margin percentages are calculated using actual, unrounded amounts.
 
 
 
 
 
 
Fiserv, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions, unaudited)
          Six Months Ended
June 30,
2018   2017
Cash flows from operating activities
Net income $ 674 $ 468
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and other amortization 190 141
Amortization of acquisition-related intangible assets 80 78
Share-based compensation 36 33
Deferred income taxes 80
Gain on sale of businesses (229 ) (10 )
Income from investments in unconsolidated affiliates (7 ) (26 )
Dividends from unconsolidated affiliates 1 31
Non-cash impairment charges 1 10
Other operating activities (1 )
Changes in assets and liabilities, net of effects from acquisitions and dispositions:
Trade accounts receivable (11 ) 59
Prepaid expenses and other assets (64 ) (13 )
Contract costs (76 ) (12 )
Accounts payable and other liabilities 17 (40 )
Contract liabilities (79 ) (27 )
Net cash provided by operating activities 613   691  
 
Cash flows from investing activities
Capital expenditures, including capitalization of software costs (169 ) (136 )
Proceeds from sale of businesses 419 19
Payments for acquisition of business, net of cash acquired (78 )
Purchases of investments (2 )
Other investing activities (12 ) 1  
Net cash provided by (used in) investing activities 236   (194 )
 
Cash flows from financing activities
Debt proceeds 1,161 1,173
Debt repayments (1,257 ) (1,005 )
Proceeds from issuance of treasury stock 44 47

Purchases of treasury stock, including employee shares withheld for tax obligations

(824 ) (713 )
Other financing activities 7    
Net cash used in financing activities (869 ) (498 )
 
Net change in cash and cash equivalents (20 ) (1 )
Net cash flows from discontinued operations 43
Cash and cash equivalents, beginning balance 325   300  
Cash and cash equivalents, ending balance $ 348   $ 299  
 
Certain prior period amounts have been reclassified to conform to current period presentation.
 
 
 
 
 
 
Fiserv, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
           

June 30,

2018

December 31,

2017

Assets
Cash and cash equivalents $ 348 $ 325
Trade accounts receivable – net 932 997
Prepaid expenses and other current assets 524 603
Assets held for sale 50
Total current assets 1,804 1,975
 
Property and equipment – net 374 390
Intangible assets – net 1,833 1,882
Goodwill 5,456 5,590
Contract costs – net 398 84
Other long-term assets 353 368
Total assets $ 10,218 $ 10,289
 
Liabilities and Shareholders’ Equity
Accounts payable and accrued expenses $ 1,302 $ 1,359
Current maturities of long-term debt 1 3
Contract liabilities 352 576
Total current liabilities 1,655 1,938
 
Long-term debt 4,805 4,897
Deferred income taxes 692 552
Long-term contract liabilities 71 54
Other long-term liabilities 145 117
Total liabilities 7,368 7,558
Shareholders’ equity 2,850 2,731
Total liabilities and shareholders’ equity $ 10,218 $ 10,289
 
Certain prior period amounts have been reclassified to conform to current period presentation.
 
 
 
 
 
 

Fiserv, Inc.
Selected Non-GAAP Financial Measures
($ in millions, unaudited)

 
Internal Revenue Growth 1        

Three Months Ended

June 30, 2018

   

Six Months Ended

June 30, 2018

Payments Segment 5 % 5 %
Financial Segment 7 % 4 %
Total Company 6 % 5 %
 

1

  Internal revenue growth is measured as the increase in adjusted revenue (see page 7) for the current period excluding acquired revenue and revenue attributable to dispositions, divided by adjusted revenue from the prior year period excluding revenue attributable to dispositions. Revenue attributable to dispositions includes transition services revenue within Corporate and Other.
 
In the second quarter of 2018, acquired revenue was $17 million ($16 million in the Payments segment and $1 million in the Financial segment). Revenue attributable to dispositions was $10 million (all in Corporate and Other) and $71 million (all in the Financial segment) in the second quarter of 2018 and 2017, respectively, primarily from the Lending Transaction.
 
During the first six months of 2018, acquired revenue was $35 million ($33 million in the Payments segment and $2 million in the Financial segment). Revenue attributable to dispositions was $64 million ($54 million in the Financial segment and $10 million in Corporate and Other) and $135 million (all in the Financial segment) in the first six months of 2018 and 2017, respectively, primarily from the Lending Transaction.
 
Free Cash Flow         Six Months Ended
June 30,
2018     2017
Net cash provided by operating activities $ 613 $ 691
Capital expenditures (169 ) (136 )
Adjustments:
Severance, merger and integration payments 56 42
StoneRiver cash distributions (1 ) (31 )
Other (3 )
Tax payments on adjustments (8 ) (8 )
Free cash flow $ 491   $ 555  
 

See page 3 for disclosures related to the use of non-GAAP financial measures.

 
 
 
 
 
 

Fiserv, Inc.
Full Year Forward-Looking Non-GAAP Financial Measures

Internal Revenue Growth – The company’s internal revenue growth outlook for 2018 excludes acquisitions, dispositions, and the impact of postage reimbursements in its Output Solutions business, and includes deferred revenue purchase accounting adjustments. These adjustments are subject to variability and are anticipated to lower 2018 GAAP revenue growth by approximately 2.5 percentage points as compared to the internal revenue growth rate, primarily due to the Lending Transaction.

Adjusted Earnings Per Share – The company’s adjusted earnings per share outlook for 2018 excludes certain non-cash or other items which should enhance shareholders’ ability to evaluate the company’s performance, as such measures provide additional insights into the factors and trends affecting its business. Non-cash or other items may be significant and include, but are not limited to, non-cash deferred revenue adjustments arising from acquisitions, non-cash intangible asset amortization expense associated with acquisitions, non-cash impairment charges, severance costs, merger and integration costs, certain costs associated with the achievement of the company’s operational effectiveness objectives, gains or losses from dispositions and unconsolidated affiliates, and certain discrete tax benefits. The company estimates that the amortization expense with respect to acquired intangible assets as of June 30, 2018 will be approximately $160 million in 2018. Other adjustments to earnings per share that have been incurred to date are presented on page 6. Estimates of these other adjustments on a forward-looking basis are not available due to the variability, complexity and limited visibility of these items.

The company’s adjusted earnings per share growth outlook for 2018 reflects 2017 performance as adjusted for the Lending Transaction. The information below is presented with a reconciliation to the most comparable GAAP measure, consistent with the fourth quarter 2017 earnings materials on a split-adjusted basis.

2017 GAAP income from continuing operations     $ 1,232
Adjustments:
Merger, integration and other costs 1 74
Severance costs 24
Amortization of acquisition-related intangible assets 159
Tax impact of adjustments 2 (85 )
Gain on sale of business 3 (10 )
Tax impact of gain on sale of business 2 5
StoneRiver transactions 4 (32 )
Tax impact of StoneRiver transactions 2 11
Tax benefit 5 (275 )
2017 adjusted net income $ 1,103  
 
2017 GAAP earnings per share from continuing operations $ 2.86
Adjustments (0.30 )
2017 adjusted earnings per share 2.56
Lending Transaction impact (0.08 )
2017 adjusted earnings per share, as adjusted for the Lending Transaction $ 2.48  
 
2018 adjusted earnings per share outlook $3.02 – $3.15
2018 adjusted earnings per share growth outlook 22% – 27%
 

1 Merger, integration and other costs include acquisition and related integration costs of $47 million and certain costs associated with the achievement of the company’s operational effectiveness objectives of $27 million, including expenses related to data center consolidation activities.

2 The tax impact of adjustments is calculated using a tax rate of 33 percent, which approximates the company’s annual effective tax rate in 2017, exclusive of discrete income tax benefits associated with The Tax Cuts and Jobs Act and the actual tax impacts associated with StoneRiver transactions and the gain on sale of business.

3 Represents the gain on the sale of the company’s Australian item processing business.

4 Represents the company’s share of net gains on the disposition of a business at StoneRiver.

5 Represents discrete income tax benefits associated with The Tax Cuts and Jobs Act enacted in December 2017.
 

See page 3 for disclosures related to the use of non-GAAP financial measures.

 
 

FISV-E

http://www.businesswire.com/news/home/20180731005841/en/Fiserv-Reports-Quarter-2018-Results/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Agilent Announces CFO Transition

SANTA CLARA, Calif–()–Agilent Technologies Inc. (NYSE:A) today announced that Didier Hirsch, senior vice president and chief financial officer, has decided to retire on Oct 31, 2018. The company has appointed Robert W. McMahon, currently chief financial officer, Hologic, Inc., as his successor. McMahon will join Agilent on August 3, as senior vice president, and will become CFO on Sept. 1, 2018, when Hirsch will step down as CFO. Hirsch will continue as an active member of the executive staff until his retirement date at the end of the fiscal year, focused on working with McMahon to ensure a smooth transition.

Hirsch has led Agilent’s global finance organization as CFO since 2010. Before that he had oversight of the corporate controllership and tax functions. He joined Agilent at its inception in 1999 as VP of treasury and investor relations. He held various international finance positions at HP, Agilent’s predecessor, from 1989 until joining Agilent.

“Didier has been a brilliant CFO. Under his financial stewardship, the valuation of the company has increased significantly, exceeding the growth rate of the S&P 500 over the same period,” said President and CEO, Mike McMullen. “I value his business insights and his leadership, and I deeply appreciate his unwavering integrity that is a hallmark of everything he does. We will miss him, but wish him the very best in his retirement.”

“I am pleased to welcome Bob McMahon to Agilent. He brings significant experience in the diagnostics and healthcare industries, both areas of strategic growth for Agilent,” McMullen said. “I am impressed with Bob’s strategic view and innovative approach. He is joining us at an important time for the company, and I am excited about the role he will play in driving the next phase of Agilent’s journey.”

“Among all of the interesting projects and accomplishments during my years at Agilent, I am most proud of the excellent Finance team we have created,” said Hirsch. “Their achievements have been extraordinary, particularly as we have grown, created new companies and completed a record number of acquisitions. The work of this team has been essential to the company’s success. Bob McMahon is a great choice to lead Finance for Agilent as the company further expands in the coming years. I am looking forward to working closely with him on a seamless transition.”

About Robert W. McMahon

McMahon has been chief financial officer since 2014 for Hologic, Inc., an innovative medical technology company, primarily focused on improving women’s health and well-being, based in Massachusetts, USA. In 2017, Hologic had revenues of $3.1 billion, spanning breast and skeletal health, diagnostics, surgical and aesthetic products. Prior to Hologic, McMahon spent 20 years with Johnson & Johnson, most recently as worldwide vice president of finance and business development for Ortho Clinical Diagnostics, a division of Johnson & Johnson’s Medical Device and Diagnostics Group. Prior to that he held a variety of financial leadership positions within Johnson & Johnson after joining the company in 1993. McMahon began his career with Harris Corporation in Florida.

He has an MBA in Finance from the University of Central Florida and an undergraduate degree in Finance from the University of Florida. McMahon is also a certified management accountant. He will relocate to Agilent’s headquarters from Massachusetts in the coming months.

About Agilent Technologies

Agilent Technologies Inc. (NYSE:A) is a global leader in life sciences, diagnostics, and applied chemical markets. With more than 50 years of insight and innovation, Agilent instruments, software, services, solutions, and people provide trusted answers to customers’ most challenging questions. The company generated revenues of $4.47 billion in fiscal 2017 and employs 14,200 people worldwide. Information about Agilent is available at www.agilent.com.

http://www.businesswire.com/news/home/20180731005823/en/Agilent-Announces-CFO-Transition/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Orthofix to Present at Canaccord Genuity Growth Conference

LEWISVILLE, Texas–()–Orthofix International N.V. (NASDAQ:OFIX), a global medical device company focused on musculoskeletal products and therapies, today announced that President and Chief Executive Officer Brad Mason will present at the Canaccord Genuity Growth Conference in Boston on Wednesday, August 8, 2018 at 11:00 a.m. ET.

A live audio webcast will be available on the Company’s website at ir.orthofix.com/events.cfm.

About Orthofix

Orthofix International N.V. is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients’ lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic extremities products are distributed in over seventy countries via the Company’s sales representatives and distributors. For more information, please visit www.orthofix.com.

http://www.businesswire.com/news/home/20180731005925/en/Orthofix-Present-Canaccord-Genuity-Growth-Conference/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

QIAGEN Reports Results for Second Quarter and First Half of 2018

VENLO, the Netherlands–()–QIAGEN N.V. (NYSE:QGEN; Frankfurt Prime Standard:QIA) announced results of operations for the second quarter and first half of 2018, delivering on the target for net sales growth and exceeding on adjusted earnings per share while driving the expansion of its Sample to Insight portfolio of molecular testing solutions.

“Our results for the second quarter of 2018 demonstrated a solid performance and further progress toward our goals for an exciting year of growth,” said Peer M. Schatz, Chief Executive Officer of QIAGEN N.V. “We are on track to achieve our targets for higher sales and adjusted earnings while building momentum across our Sample to Insight portfolio and creating value for our customers and stakeholders.”

Please find the full press release here

http://www.businesswire.com/news/home/20180731005893/en/QIAGEN-Reports-Results-Quarter-2018/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

SHAREHOLDER NOTICE: Kaskela Law LLC Announces Investigation of LogMeIn, Inc. and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm

RADNOR, Pa.–()–Kaskela Law LLC is investigating LogMeIn, Inc. (NASDAQ: LOGM) (“LogMeIn” or the “Company”) on behalf of the Company’s shareholders. The investigation seeks to determine whether LogMeIn and certain of its officers and/or directors have violated the federal securities laws by issuing misleading statements to investors, and whether LogMeIn investors have been harmed as a result.

LogMeIn investors are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq.) at (484) 258 – 1585 or (888) 715 – 1740 to discuss this investigation and their legal rights and options. Investors may also contact the firm online and submit their information at http://kaskelalaw.com/case/logmein/.

On February 1, 2017, LogMeIn announced it completed its merger with the GoTo business of Citrix Systems, Inc.

On July 26, 2018, LogMeIn announced quarterly financial and operational results for the second quarter of fiscal 2018, and lowered certain financial guidance for fiscal 2018. During a subsequent conference call, the Company’s management disclosed that LogMeIn’s performance during the quarter did not meet expectations in part due to the “combination of imperfect execution and some hangover effects of last year’s merger with the GoTo business led to disappointing renewal rates.”

Following this disclosure, shares of the Company’s stock declined $26.60 per share, or over 25% in value, to close on July 27, 2018 at $77.85.

LogMeIn investors are encouraged to contact Kaskela Law LLC and/or submit their information at http://kaskelalaw.com/case/logmein/. Kaskela Law LLC exclusively represents investors in state and federal courts throughout the country. For additional information about Kaskela Law LLC please visit www.kaskelalaw.com. This notice may constitute attorney advertising in certain jurisdictions.

http://www.businesswire.com/news/home/20180731005928/en/SHAREHOLDER-NOTICE-Kaskela-Law-LLC-Announces-Investigation/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Le Myalepta d’Aegerion®▼ est approuvé en Europe et devient le premier traitement indiqué pour les patients atteints de lipodystrophie, une maladie ultra-rare

WINDSOR, Angleterre–()–Aegerion Pharmaceuticals a annoncé aujourd’hui avoir reçu une autorisation de mise sur le marché en Europe pour le Myalepta (métréleptine) de la part de la Commission européenne. Le Myalepta est un traitement pour la lipodystrophie, une maladie ultra-rare; il a été approuvé comme complément alimentaire en thérapie de substitution pour traiter les complications liées à la carence en leptine chez les patients atteints de lipodystrophie. Grâce à cette autorisation, le Myalepta devient le premier et le seul médicament homologué pour traiter la carence sous-jacente en leptine, qui est au cœur de cette maladie ultra-rare.

Sir Stephen O’Rahilly, professeur de biochimie clinique et de médecine à l’Addenbrooke’s Hospital de Cambridge, a déclaré: “La lipodystrophie est une maladie rare qui, en raison de sa complexité, nécessite un traitement hautement spécialisé. Les patients atteints de lipodystrophie devaient jusqu’à présent compter sur des changements de leur mode de vie et sur des traitements comme des injections d’insuline pour gérer les complications associées à leur état. Cette approbation marque aujourd’hui une évolution significative dans la façon de traiter la lipodystrophie. Pour la première fois, nous serons en mesure d’offrir aux patients en Europe une option thérapeutique traitant l’un des aspects fondamentaux de la maladie elle-même.”

Rebecca Sanders, fondatrice et présidente de Lipodystrophy UK, a ajouté: “La lipodystrophie représente de multiples défis, aussi bien physiques que psychologiques, pour les personnes vivant avec cette maladie. Les options thérapeutiques actuelles sont limitées, ne traitent que certaines des complications et ne sont pas spécifiques à la lipodystrophie. Le Myalepta est une solution à long terme et nous sommes ravis qu’il existe désormais un traitement spécifique pour remédier aux complications liées à la carence en leptine caractéristique de la lipodystrophie. Cette solution attendue depuis longtemps par les patients va leur apporter des améliorations aussi bien au plan de la maladie elle-même qu’en termes de qualité de vie.”

La lipodystrophie est une maladie ultra-rare et incurable qui affecte la capacité du malade à stocker les graisses dans son corps. La lipodystrophie peut se présenter sous une forme généralisée (LG) ou partielle (LP).1 La maladie est associée à divers problèmes métaboliques critiques, comme un diabète sévère, et peut provoquer de graves lésions organiques si elle n’est pas contrôlée.2 Au niveau mondial, la lipodystrophie touche environ 1 à 4 personnes sur un million.1

Paul Greenland, président de la région EMEA chez Aegerion Pharmaceuticals, a déclaré: “Nous sommes très heureux que les patients atteints de lipodystrophie en Europe disposent à présent d’une option thérapeutique spécifique. C’est également un événement important pour Aegerion, car le Myalepta devient disponible sur l’un des plus grands marchés pharmaceutiques au monde. Nous travaillerons en collaboration avec les groupes de patients, les professionnels de la santé et les services de santé de toute l’Europe pour permettre son accès au plus grand nombre possible de patients.”

#FIN#

NOTES AUX RÉDACTEURS

Données soutenant l’approbation du Myalepta

L’innocuité et l’efficacité du Myalepta pour le traitement des troubles métaboliques associés aux syndromes de la lipodystrophie chez des patients pédiatriques et adultes ont été évaluées dans une étude à long terme, ouverte et à groupe unique réalisée sous l’égide du National Institutes of Health (NIH) aux États-Unis.

Les résultats des paramètres primaires d’efficacité observés chez les patients atteints de lipodystrophie généralisée sont les suivants:

  • Une variation moyenne de -2,2% par rapport au niveau de base au mois 12 en HbA1c*; et
  • Une variation moyenne de -32,1% par rapport au niveau de base au mois 12 pour les triglycérides.3

En outre, 41% (16 sur 39) des patients LG traités à l’insuline au niveau de base n’en prenaient plus après le traitement, 22% (7 sur 32) des patients LG prenant des antidiabétiques oraux au niveau de base ont pu en abandonner la prise, et 24% (8 sur 34) des patients LG suivant des thérapies de réduction lipidique au niveau de base ont pu arrêter ces thérapies durant le traitement au Myalepta.4

Les résultats des paramètres primaires d’efficacité observés dans le sous-groupe de patients PL sont les suivants:

  • Une variation moyenne de -0,9% par rapport au niveau de base au mois 12 en HbA1c; et
  • Une variation moyenne de -37,4% par rapport au niveau de base au mois 12 pour les triglycérides.3

Les effets indésirables les plus fréquents constatés lors des études cliniques sont l’hypoglycémie (14%) et la perte de poids (17%). Les effets indésirables courants (se produisant chez 1 à 10% des patients) sont la perte d’appétit, les céphalées, les douleurs abdominales, les nausées, l’alopécie, la ménorragie, la fatigue, un hématome/un érythème/une réaction au point d’injection, la production d’anticorps neutralisants**.3

À propos de la lipodystrophie

La lipodystrophie est une maladie ultra-rare qui se caractérise par la perte irréversible du tissu adipeux.1 Chez les patients atteints de lipodystrophie, la réduction du tissu adipeux provoque une diminution de la production de leptine. La leptine, une hormone naturelle produite par la graisse sous-cutanée, est un important régulateur de l’homéostasie énergétique, du métabolisme des graisses et du glucose, de la capacité reproductrice et de diverses autres fonctions physiologiques.5

La lipodystrophie peut être génétique ou acquise à la suite d’un état immunodéficient et apparaît à l’enfance ou à l’adolescence.6 Une lipodystrophie généralisée est une absence totale de graisses sur l’ensemble du corps.7 La lipodystrophie partielle est généralement associée à un manque de graisses dans les bras, les jambes, la tête, le tronc, alors que les graisses peuvent s’accumuler dans d’autres zones du corps, notamment le cou, le visage et les zones intra-abdominales, et toucher des organes vitaux comme le foie et le cœur.7

À propos d’Aegerion Pharmaceuticals

AegerionPharmaceuticals est une filiale de Novelion Therapeutics Inc., une société biopharmaceutique spécialisée dans le développement et la commercialisation de thérapies novatrices pour les personnes atteintes de maladies rares et orphelines. Aegerion a été acquis par Novelion Therapeutics Inc. en novembre 2016. Le siège européen de la société est situé à Windsor, au Royaume-Uni.

Ce médicament fait l’objet d’une surveillance supplémentaire qui permettra l’identification rapide de nouvelles informations relatives à son innocuité. Vous pouvez contribuer à ce processus en signalant tout effet indésirable éventuel. Les effets indésirables peuvent êtres signalés à Aegerion en appelant le

00800 23437466 ou en écrivant à l’adresse: medinfo.emea@aegerion.com

* HbA1c est un test standard utilisé pour mesurer la glycémie moyenne d’une personne

Les triglycérides sont un type de lipide présent dans le sang

** Le résumé des caractéristiques du produit (fourni avec le présent communiqué de presse) inclut une liste exhaustive des effets indésirables

Références

1 Chiquette, E., et al. Estimating the prevalence of generalized and partial lipodystrophy: findings and challenges. Diabetes Metab Syndr Obes, 2017. 10: p.375-383.

2 Pope, E., et al., Childhood acquired lipodystrophy: A retrospective study. Journal of the American Academy of Dermatology, 2006. 55(6): p. 947-950.

3 Résumé des caractéristiques du produit, EMEA. Myalepta 11,3 mg, en poudre, pour solution injectable. (fourni avec le présent document)

4 Brown, RJ., et al., Long-term effectiveness and safety of metreleptin in the treatment of patients with generalized lipodystrophy. Endocrine, 2018. 60(3): p.479-489.

5 Kelesidis, T., et al., Narrative Review: The Role of Leptin in Human Physiology: Emerging Clinical Applications. Ann Intern Med, 2010. 152(2): p.93–100.

6 Brown, R.J., et al., The Diagnosis and Management of Lipodystrophy Syndromes: A Multi-Society Practice Guideline. J Clin Endocrinol Metab, 2016. 101(12): p. 4500-4511.

7 Fiorenza, C.G., et al., Lipodystrophy: Pathophysiology and Advances in Treatment. Nat Rev Endocrinol, 2011. 7(3): p. 137-150.

Le texte du communiqué issu d’une traduction ne doit d’aucune manière être considéré comme officiel. La seule version du communiqué qui fasse foi est celle du communiqué dans sa langue d’origine. La traduction devra toujours être confrontée au texte source, qui fera jurisprudence.

http://www.businesswire.com/news/home/20180731005927/fr/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

New Relic Delivers Distributed Tracing

SAN FRANCISCO–()–New Relic, Inc. (NYSE:NEWR), provider of real-time insights for software-driven businesses, today announced the general availability of New Relic distributed tracing. Customers, such as Dealer.com and others, are now leveraging New Relic distributed tracing to better understand the performance of applications running in modern, complex architectures.

As more and more companies increasingly adopt distributed application architectures, the ability to track the performance of a single request across all the services and microservices involved becomes essential. New Relic’s distributed tracing provides DevOps teams with the ability to trace the path of a single request to understand a complex system, discover what is causing latencies for that request, find where an error originated, and identify opportunities to optimize code to improve customer experience.

Key Features of New Relic’s Distributed Tracing

Distributed tracing is an important addition to the New Relic platform, designed to give software teams an easy way to manage the performance of modern environments.

  • Automatic instrumentation to get up and running quickly – features built-in trace instrumentation for hundreds of frameworks and libraries out-of-the-box, so customers see immediate value, and avoid the toil of having to manually instrument their code.
  • Depth of detail across modern and traditional systems – the combination of distributed tracing, in conjunction with New Relic’s existing tracing functionality, is purpose-built for organizations that are in the process of transitioning to microservices environments. New Relic offers both tracing solutions in one powerful platform that delivers visibility into infrastructure, application, and customer experience.
  • Powerful analytics to quickly find root causes – DevOps teams can easily add custom attributes to traces so they can narrow problems down to individual customers, accounts, or any other dimension of their business using advanced filtering. They can also create dashboards using trace information filtered to specific attributes.
  • Delivers immediate value – New Relic’s SaaS platform delivers value as soon as the agent is deployed. There is no infrastructure to provision, secure, or run. DevOps teams can focus on delivering software for their customers, not instrumenting and building their monitoring solution.

“With our flexible, out-of-the-box instrumentation and deep performance data, New Relic’s distributed tracing empowers fast-moving DevOps teams to cut through the complexity of modern architectures,” said Nadya Duke Boone, vice president of product management, New Relic. “Our customers don’t have to choose between a solution with automatic or manual instrumentation; New Relic delivers both, integrated with all the other tools and data in the New Relic platform essential for monitoring modern software environments.”

“We’ve found New Relic’s distributed tracing to be super-easy to integrate with,” said Andrew Potter, senior developer at Dealer.com, a Cox Automotive brand. “With New Relic, we simply updated our agent, and all of the sudden we had distributed tracing. It was a great experience.”

Pricing and availability

New Relic distributed tracing is now available to all APM Pro customers. To learn how to get started today, please visit New Relic Documentation. For more information, please visit the New Relic Blog.

About New Relic

New Relic provides the real-time insights that software-driven businesses need to innovate faster. New Relic’s cloud platform makes every aspect of modern software and infrastructure observable, so companies can find and fix problems faster, build high-performing DevOps teams, and speed up transformation projects. Learn why more than 50% of the Fortune 100 trust New Relic at newrelic.com.

Social Media Links: Facebook | Twitter | YouTube | LinkedIn

New Relic is a registered trademark of New Relic, Inc.

All product and company names herein may be trademarks of their registered owners.

http://www.businesswire.com/news/home/20180731005912/en/New-Relic-Delivers-Distributed-Tracing/?feedref=JjAwJuNHiystnCoBq_hl-bV7DTIYheT0D-1vT4_bKFzt_EW40VMdK6eG-WLfRGUE1fJraLPL1g6AeUGJlCTYs7Oafol48Kkc8KJgZoTHgMu0w8LYSbRdYOj2VdwnuKwa

Quality Systems, Inc. Reports Fiscal 2019 First Quarter Results

IRVINE, Calif.–()–Quality Systems, Inc. (QSII), known to its clients as NextGen Healthcare, announced today its fiscal 2019 first quarter ended June 30, 2018 operating results.

“We are pleased with continuing progress executing our plan, as illustrated by our team’s delivery of another solid performance in the first quarter of fiscal 2019 with revenue and EPS in-line with our expectations. Most importantly, we saw continued momentum in quarterly bookings with first quarter bookings up 23% year over year, which marks our second consecutive quarter of growth. Based on these results, we remain confident in the current year guidance and committed to our multi-year growth targets,” commented Rusty Frantz, president and chief executive officer of NextGen Healthcare.

Fiscal 2019 First Quarter Highlights

As a result of the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASC 606”), the GAAP comparisons below compare fiscal 2019 first quarter results under ASC 606 to the fiscal 2018 first quarter results under ASC 605. A reconciliation of fiscal 2019 first quarter results from ASC 606 to ASC 605 can be found in the tables at the end of the press release.

On a GAAP basis, revenue for the fiscal 2019 first quarter of $133.2 million compared to $130.9 million a year-ago. On a pro forma basis under ASC 605, revenue for the fiscal 2019 first quarter was also $133.2 million.

On a GAAP basis, net income for the fiscal 2019 first quarter was $2.6 million, compared with net income of $3.9 million in the fiscal 2018 first quarter. On a pro forma basis under ASC 605, net income for the fiscal 2019 first quarter was $1.7 million.

On a GAAP basis, fully diluted net income per share was $0.04 in the fiscal 2019 first quarter compared with earnings per share of $0.06 for the same period a year ago. On a non-GAAP basis, fully diluted earnings per share for the fiscal 2019 first quarter was $0.19 versus $0.17 reported in the first quarter a year ago. On a pro forma non-GAAP basis under ASC 605, fully diluted earnings per share for the fiscal 2019 first quarter was $0.18.

Fiscal 2019 Financial Outlook

The company is reiterating its outlook for fiscal 2019 and expects:

  • Revenue of between $532 million and $548 million
  • Non-GAAP EPS of between $0.70 and $0.78

Conference Call Information

NextGen Healthcare will host a conference call to discuss its fiscal 2019 first quarter results on Tuesday, July 31, 2018 at 5:00 PM ET (2:00 PM PT). Shareholders and interested participants may listen to a live broadcast of the conference call by dialing 866-750-8947 or 720-405-1352 for international callers, and referencing participant code 2995586 approximately 15 minutes prior to the call. A live webcast of the conference call will be available on the investor relations section of the company’s web site and an audio file of the call will also be archived for 90 days at investor.qsii.com. After the conference call, a replay will be available until August 14, 2018 and can be accessed by dialing 800-585-8367 or 404-537-3406 for international callers, and referencing participant code 2995586.

2018 Analyst Day Meeting

The Company will host an Analyst Day Meeting on Friday, September 7, 2018 at 9:00 AM ET in New York, NY. To RSVP or for further information, please contact Jordan Kohnstam at Jordan.Kohnstam@westwicke.com or 443-450-4189.

About Quality Systems, Inc.

Quality Systems, Inc., known to its clients as NextGen Healthcare, provides a range of software, services, and analytics solutions to medical and dental group practices. The company’s portfolio delivers foundational capabilities to empower physician success, enrich the patient care experience, and enable the transition to value-based healthcare. Visit www.qsii.com and www.nextgen.com for additional information.

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS

This news release may contain forward-looking statements within the meaning of the federal securities laws, including but not limited to, statements regarding future events, developments in the healthcare sector and regulatory framework, the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future (including, without limitation, statements concerning revenue, net income, and earnings per share). Risks and uncertainties exist that may cause the results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements and additional risks and uncertainties are set forth in Part I, Item A of our most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, including but not limited to: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; seasonal patterns of sales and customer buying behavior; impact of incentive payments under The American Recovery and Reinvestment Act on sales and the ability of the Company to meet continued certification requirements; uncertainties related to the future impact of U.S. tax reform; the impact of governmental and regulatory agency investigations; the development by competitors of new or superior technologies; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; undetected errors or bugs in software; product liability; changing economic, political or regulatory influences in the health-care industry; changes in product-pricing policies; availability of third-party products and components; competitive pressures including product offerings, pricing and promotional activities; the Company’s ability or inability to attract and retain qualified personnel; possible regulation of the Company’s software by the U.S. Food and Drug Administration; changes of accounting estimates and assumptions used to prepare the prior periods’ financial statements; disruptions caused by acquisitions of companies, products, or technologies; and general economic conditions. A significant portion of the Company’s quarterly sales of software product licenses and computer hardware is concluded in the last month of a fiscal quarter, generally with a concentration of such revenues earned in the final ten business days of that month. Due to these and other factors, the Company’s revenues and operating results are very difficult to forecast. A major portion of the Company’s costs and expenses, such as personnel and facilities, are of a fixed nature and, accordingly, a shortfall or decline in quarterly and/or annual revenues typically results in lower profitability or losses. As a result, comparison of the Company’s period-to-period financial performance is not necessarily meaningful and should not be relied upon as an indicator of future performance. These forward-looking statements speak only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

USE OF NON-GAAP FINANCIAL MEASURES

This news release contains certain non-GAAP (Generally Accepted Accounting Principles) financial measures, which are provided only as supplemental information. Investors should consider these non-GAAP financial measures only in conjunction with the comparable GAAP financial measures. These non-GAAP measures are not in accordance with or a substitute for U.S. GAAP. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying financial tables. Other companies may calculate non-GAAP measures differently than Quality Systems, which limits comparability between companies. The Company believes that its presentation of non-GAAP diluted earnings per share provides useful supplemental information to investors and management regarding the Company’s financial condition and results. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. The Company calculates non-GAAP diluted earnings per share by excluding net acquisition costs, amortization of acquired intangible assets, amortization of deferred debt issuance costs, restructuring costs, net securities litigation defense costs and settlement, share-based compensation, and other non-run-rate expenses from GAAP income before provision for income taxes. The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations.

The normalized non-GAAP tax rate applied to fiscal year 2019 was 22.0%, compared to 30.5% for fiscal year 2018, which was updated as a result of the enactment of the new tax reform legislation on December 22, 2017. The determination of this rate is based on the consideration of both historic and projected financial results. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

The Company’s future period guidance in this release includes adjustments for items not indicative of the Company’s core operations. Such adjustments are generally expected to be of a nature similar to those adjustments applied to the Company’s historic GAAP financial results in the determination of the Company’s non-GAAP diluted earnings per share. Such adjustments, however, may be affected by changes in ongoing assumptions and judgments as to the items that are excluded in the calculation of non-GAAP adjusted net income and adjusted diluted earnings per share, as described in this release. The exact amount and probable significance of these adjustments, including net acquisition costs, net securities litigation defense costs, and other non-run-rate expenses, are not currently determinable without unreasonable efforts, but may be significant. These items cannot be reliably quantified or forecasted due to the combination of their historic and expected variability. It is therefore not practicable to reconcile this non-GAAP guidance to the most comparable GAAP measures.

 

TABLE #1

 
QUALITY SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 
Three Months Ended June 30,
2018   2017
Revenues:
Recurring $ 120,007 $ 119,178
Software, hardware, and other non-recurring   13,193   11,744
Total revenues 133,200 130,922
Cost of revenue:
Recurring 48,153 48,458
Software, hardware, and other non-recurring 7,154 6,040
Amortization of capitalized software costs and acquired intangible assets   6,544   4,671
Total cost of revenue   61,851   59,169
Gross profit 71,349 71,753
Operating expenses:
Selling, general and administrative 44,636 42,977
Research and development costs, net 22,128 19,989
Amortization of acquired intangible assets   1,168   2,047
Total operating expenses   67,932   65,013
Income from operations 3,417 6,740
Interest income 29 9
Interest expense (730 ) (677 )
Other income (expense), net   374   (22 )
Income before provision for income taxes 3,090 6,050
Provision for income taxes   442   2,154
Net income $ 2,648 $ 3,896
Net income per share:
Basic $ 0.04 $ 0.06
Diluted $ 0.04 $ 0.06
Weighted-average shares outstanding:
Basic 64,019 62,636
Diluted 64,054 62,643
   

TABLE #2

QUALITY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 
June 30, 2018 March 31, 2018
ASSETS
Current assets:
Cash and cash equivalents $ 26,544 $ 28,845
Restricted cash and cash equivalents 7,520 2,373
Accounts receivable, net 86,064 84,962
Contract assets 10,448
Inventory 161 180
Income taxes receivable 7,677 8,122
Prepaid expenses and other current assets   17,397   17,180
Total current assets 155,811 141,662
Equipment and improvements, net 26,567 26,795
Capitalized software costs, net 28,846 26,318
Deferred income taxes, net 6,249 9,219
Contract assets, net of current 2,768
Intangibles, net 68,636 74,091
Goodwill 218,875 218,875
Other assets   27,383   18,795
Total assets $ 535,135 $ 515,755
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,133 $ 4,213
Contract liabilities 52,196 54,079
Accrued compensation and related benefits 17,567 27,910
Income taxes payable 111 73
Other current liabilities   62,067   48,317