doc
stringlengths 495
21.2k
| summaries
stringlengths 24
3.79k
| labels
stringlengths 5
303
|
|---|---|---|
Pass code for both numbers is 36941.
In the first quarter, earnings more than doubled from the same quarter of last year to $3.18 per share.
LyondellBasell's first quarter net income improved by 25% relative to the fourth quarter as we earned approximately $1.6 billion of EBITDA.
Strong cash generation enabled us to pay down $500 million of debt in January and end the first quarter with nearly $5 billion of cash and available liquidity.
After the quarter closed, we paid down an additional $500 million of debt in April.
In the days after the Texas freeze, North American PG exports fell by 13% for the month of February, and we expect the March data to reflect further decline in exports.
It will likely require quite some time before North American polyethylene industry can fulfill backlogs, satisfy domestic demand and returned to last year's pace of selling 40% of production into the export market to serve global demand.
We look forward to continued progress on our journey toward our goal of 0 injuries.
Over the past 70 years, our polymers have played a central role in advancing modern living by reducing food waste with protective packaging, delivering safe drinking water through plastic pipes and advancing healthcare with sterile and affordable devices and equipment.
With the introduction of our Circulen product line, we are making further progress toward LyondellBasell's goal of producing and marketing two million metric tons of recycle- and renewal-based polymers annually by 2030.
As you can see in the chart, Hyperzone HDPE blended with 25% PCR can still exceed the crack resistance of standard polyethylene by 70%.
Northeast Asian demand increased by an astounding 23% driven by the postpandemic strength of the Chinese economy.
Since imports account for approximately 40% of China's demand needs for polyethylene, China's growth benefited LyondellBasell's production sites in the United States and the Middle East that export polyethylene to China.
Global demand for polyolefins has grown by 14% over the past two years, far above the long-term trends of 4% and 5% annual demand growth for polyethylene and polypropylene, respectively.
Strong global demand and constrained production have supported polyethylene contract price increases of $950 per metric ton in the US from May 2020 through March of this year, with $420 per ton occurring since November and more than $300 per ton of additional price increases on the table for April and May of 2021.
Most consultants now believe that global polyolefin demand grew by approximately 4% in 2020, similar to growth rates seen consistently over the past 30 years.
Adjusting these forecasts to 4% demand growth for both '20 and '21 results in a predicted operating rate shown by the dotted gray line.
Last quarter, we suggested that 2021 would likely follow the patterns seen after prior recessions, and this year's demand growth could be higher than the historical trend of 4%.
A 7% growth in demand during 2021 for only one year with reversion to the historical mean in 2022 and beyond would generate the robust operating rate forecast depicted by the dotted orange line.
Today, with global polyolefin demand growing in the first quarter by 14% over the past two years, we are even more confident that the recovering economy is likely to facilitate a more orderly absorption of this new capacity by the global market, which should support robust margins.
Over the last 12 months, LyondellBasell converted almost 80% of our EBITDA into $3.4 billion of cash from operating activities.
In the first quarter of 2021, our businesses delivered over 40% more free operating cash flow relative to the same period last year.
In the first quarter, while paying dividends of $352 million and investing a similar amount in capital expenditures, we reduced the balance on our term loan by $500 million to close the first quarter with cash and liquid investments of $1.8 billion.
After the quarter closed, we repaid an additional $500 million on the term loan in April.
We continue to be on track to invest approximately $2 billion in capital expenditures during 2021, targeted equally toward profit-generating growth projects and sustaining maintenance.
And based on expected volumes and margins, we estimate that the third quarter EBITDA impact due to lost production associated with planned maintenance across the company will increase by $30 million to $75 million.
In total, the EBITDA impact associated with all of LyondellBasell's 2021 planned maintenance downtime should decrease by $30 million relative to our original guidance to approximately $140 million for the year.
In the first quarter of 2021, LyondellBasell's business portfolio delivered EBITDA of $1.6 billion.
This was an improvement of more than $300 million relative to the fourth quarter, exceeding typical first quarter seasonal trends.
On the left side of the chart, our all-time high quarterly EBITDA, excluding LCM of approximately $2.2 billion reported in the third quarter of 2015, provides useful perspective.
Third quarter EBITDA was $867 million, $145 million higher than the fourth quarter.
Olefin results increased approximately $155 million compared to the fourth quarter.
The ethylene cracker at the joint venture ran continuously throughout the weather events and exceeded ethylene nameplate operating rates by 9% during March.
Polyolefin results for the segment decreased by about $15 million during the first quarter.
During the first quarter, EBITDA was $412 million, $161 million higher than the fourth quarter.
Olefins results increased $30 million driven by increased margins and volumes.
Demand was robust during the quarter, and we increased volumes by operating our crackers at a rate of 98%, almost 10% above industry benchmarks for the first quarter.
Combined polyolefin results increased approximately $150 million compared to the prior quarter.
First quarter EBITDA was $182 million, $14 million lower than the prior quarter.
First quarter Propylene Oxide & Derivatives results decreased by approximately $35 million due to lower volumes, offsetting stronger margins driven by tight market supply.
Intermediate chemical results decreased about $55 million due to lower volumes as a result of the weather events.
Oxyfuels and related products results increased by approximately $25 million as a result of higher margins benefiting from improved gasoline prices that were partially offset by constrained volumes.
First quarter EBITDA was $135 million, $9 million higher than the fourth quarter.
Advanced Polymer results increased by approximately $15 million due to both higher margins and volumes.
First quarter EBITDA was negative $110 million, a $36 million decrease versus the fourth quarter of 2020.
Higher cost for renewable fuel credits, or RINs, and lower crude throughput overwhelmed improvements in the Maya 2-1-1 industry crack spread.
In the first quarter, the Maya 2-1-1 crack spread increased by $5.21 per barrel to $15.32 per barrel.
As a result of the Texas weather event, the average crude throughput at the refinery fell to 152,000 barrels per day.
First quarter Technology segment EBITDA was $94 million, $49 million higher than the prior quarter.
In the years following the 2008 Great Recession, our company nimbly captured the benefits of low-cost feedstocks that arose from the development of North American oil and gas resources.
LyondellBasell typically delivered between $6 billion to $7 billion of EBITDA over the past 10 years.
Our EBITDA after LCM inventory adjustments reached $8.1 billion in 2015 during my first year as CEO of our company.
Increased utilization of our capacity should provide greater visibility on the more than $200 million in synergies that we've built into the business since acquiring A. Schulman.
In 2020, we added 500,000 tons of polyethylene capacity utilizing our next-generation Hyperzone technology. | In the first quarter, earnings more than doubled from the same quarter of last year to $3.18 per share. | 0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
First quarter sales were 122% of budget, representing a 25% increase over the same period last year.
These results were driven by a 13% increase in trained Business Performance Advisors and a 10% improvement in sales efficiency.
Mid-market sales were particularly impressive throughout the period, core sales exceeded forecast for the full quarter despite a fall-off in March to 83% of budget as the pandemic escalated.
The best empirical evidence is our paid worksite employee decline in April, which was only 3.3% lower than March.
Our experience over the years with hurricanes and other disasters proved beneficial as we were totally prepared to work remotely on a broad basis with 93% of our employees working at home and only 7% of employees with the need to be at the workplace to accomplish their responsibilities.
Two days later, these reports became available on Insperity Premier and by Friday, the first day the banks began accepting applications, over 67% of Insperity clients had to run the necessary reports to submit their applications.
According to our survey, approximately 80% of our clients applied for a loan under the Paycheck Protection Program.
We are very pleased for our clients when survey results indicated 59% of these applicants receive their PPP funding in the first round before funds ran out on April 16.
This compares very favorably against the National Federation of Independent Business survey, which reported 20% of respondents had received their funding.
Since March 9, through the end of April, 25% of our clients have reported layoffs totaling approximately 22,000 employees or about 9% of the total worksite employee base.
35% of these layoffs were processed as permanent layoffs.
In 65% as furloughs or temporary layoffs expecting to be rehired in the coming months.
Approximately 15,000 of these layoffs were reported before the end of March with the remaining 7,000 in April as layoffs moderated.
Over the same period, we've already seen approximately 2,200 employees or 10% of the total rehired, which we believe is somewhat due to our early success with clients in the Paycheck Protection Program.
With all these factors in and finalized at the end of April, the result was the 3.3% reduction in paid worksite employees for the one -- that I mentioned earlier.
In this case, we assume about 65% of the furloughed employees would be rehired over the next couple of months in time for clients to include them in their calculation for loan forgiveness of their PPP loan.
Even though this is the high case, we are assuming 35% of furloughed employees did not return within that period as Business Leader stretch out their funds allowing time for the economic activity to increase.
New client sales considered within the high end of our guidance, assumes sales at 80% of our original budget over the balance of the year.
We have included an approximately 15% increase in worksite employee attrition from client terminations over our original budget.
In this case sales results are assumed to be approximately 60% of our original budget over the last three quarters in the year.
The low end of our range also anticipates a 20% higher level of worksite employee attrition due to client terminations above our original budget.
Full-year retention is expected to be 80% in this scenario.
One of my grandfather's was only 16 years old when he arrived in 1909.
We reported Q1 adjusted earnings per share of $1.70 at the high end of our forecasted range.
Adjusted EBITDA totaled $101 million for the quarter.
Average paid worksite employees increased by 5.5% over Q1 of 2019 to just over 238,000.
Gross profit increased by 3.2% over the first quarter of 2019.
As for large healthcare claim activity, we continue to see a decline in the number of claims over $100,000 since the initial spike in the second quarter of 2019, although it's still slightly elevated from a historical perspective.
Now an outlier in Q1 was a shift in the timing of approximately $4 million of pharmacy costs into the quarter.
As you may be aware, as a result of the COVID-19 stay-at-home orders, many benefit plan participants across the country accelerated their pharmacy refills with many extending the refill period from 30 to 90 days.
So all things combine the good news is that benefit costs for Q1 of 2020 came in favorable when compared to our budget in spite of the additional $4 million of pharmacy costs.
Our first quarter adjusted operating expenses increased 5.3% over Q1 of 2019 below budgeted levels.
It's important to note that we continue to invest in our growth as we increased our trained BPA count by 13% over Q1 of 2019.
Finally, our Q1 effective tax rate came in at expected 27%, which was significantly higher than the 12% rate in Q1 of 2019 due to a lower tax benefit associated with the vesting of long-term incentive stock awards in Q1 of this year.
During the quarter, we repurchased a total of 878,000 shares at a cost of $61 million.
These repurchases included those shares bought in the open market and under our corporate 10b5-1 plan in mid-February and early March and shares repurchased in connection with tax withholdings upon the vesting of employee restricted shares.
We also paid $16 million in cash dividends under our regular dividend program and invested $16 million in capital expenditures.
While we continue to have a strong balance sheet and liquidity position in the latter part of the quarter, we drew down $100 million from our credit facility to provide further flexibility in this uncertain business environment.
So we ended the quarter with $167 million of adjusted cash and $130 million available under our $500 million credit facility.
And based on the details that Paul just shared on our expected worksite employee levels, we are now forecasting a 1% to 5% decrease in the average number of paid worksite employees for the Q2 stand-alone quarter and a 1% to 6% decrease for the full-year 2020 as compared to the 2019 periods.
For the full-year 2020, we are forecasting adjusted EBITDA in a range of $215 million to $250 million, which is flat to down 14% from 2019.
As for adjusted EPS, we are forecasting a range of $3.19 to $3.86.
And this assumes an effective tax rate of 28% in 2020 as compared to a rate of 20% in 2019.
Now as for our Q2 earnings guidance, we are forecasting adjusted EBITDA range of $65 million to $79 million, a 15% to 39% increase over Q2 of 2019 and adjusted earnings per share in a range of $1 to $1.29, an increase of 23% to 55%. | We reported Q1 adjusted earnings per share of $1.70 at the high end of our forecasted range.
So we ended the quarter with $167 million of adjusted cash and $130 million available under our $500 million credit facility.
As for adjusted EPS, we are forecasting a range of $3.19 to $3.86.
Now as for our Q2 earnings guidance, we are forecasting adjusted EBITDA range of $65 million to $79 million, a 15% to 39% increase over Q2 of 2019 and adjusted earnings per share in a range of $1 to $1.29, an increase of 23% to 55%. | 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
0
1 |
We reported revenue of $212.1 million during the third quarter of 2020, compared to $238.5 million during the third quarter of 2019.
However, volume across all segments increased significantly in June, and net sales in July exceeded prior year on a consolidated basis.
We reported net income of $10.8 million or $0.33 per diluted share for the three months ended July 31, 2020, compared to $11.8 million or $0.36 per diluted share during the three months ended July 31, 2019.
On an adjusted basis, net income was $11.1 million or $0.34 per diluted share during the third quarter of 2020, compared to $13.7 million or $0.41 per diluted share during the third quarter of 2019.
On an adjusted basis, EBITDA for the quarter was $27.7 million, compared to $32.8 million during the same period of last year.
Cash provided by operating activities was $45.1 million for the three months ended July 31, 2020, which represents an increase of 50.8% compared to the three months ended July 31, 2019.
Cash provided by operating activities was $47.6 million for the nine months ended July 31, 2020, which represents an increase of 58.7% compared to the nine months ended July 31, 2019.
Free cash flow improved significantly during the third quarter to $40.7 million, which represents an increase of 57.1% compared to the third quarter of 2019.
Year-to-date 2020, free cash flow more than doubled to $26.9 million compared to the same period of 2019.
Our balance sheet is healthy, our liquidity position is strong and getting stronger, and our leverage ratio of net debt to last 12 months adjusted EBITDA improved to 1.1 times as of July 31, 2020, which is lower than where we exited fiscal 2019.
We will continue to focus on generating cash and paying down debt in the fourth quarter, which should allow us to exit fiscal 2020 with a leverage ratio of net debt to last 12 months adjusted EBITDA at or below one time.
Having said that, the recovery has been more robust than expected on all fronts, and we are now comfortable providing the following full-year 2020 guidance: net sales of $832 million to $837 million, adjusted EBITDA of $97 million to $102 million, capex of approximately $25 million and free cash flow of approximately $50 million.
Revenue in this segment was $122.4 million, down 10.2% from prior-year third quarter.
Adjusted EBITDA of $17.8 million was $4.8 million less than prior-year third quarter.
We generated revenue of $38.3 million in our European fenestration segment, which was 13.7% less than prior year or down 12.9% after excluding the foreign exchange impact.
Despite low volume in May, this segment was able to realize adjusted EBITDA of $7.7 million in the quarter, which represents margin improvement of approximately 290 basis points over prior year.
Our North American cabinet components segment reported revenue of $51.9 million, which was 11.5% less than prior year.
However, revenue was only down 7.5% if you adjust for the customer that exited the cabinet manufacturing business in late 2019.
Adjusted EBITDA for the segment was $3.1 million, down $1.7 million from prior-year third quarter.
It is important to note, though, that EBITDA was negatively impacted by a $1.7 million accrual for writing off the final amount of customer-specific inventory associated with a customer that exited the cabinet business.
Absent this write-off, we would have realized margin expansion of approximately 90 basis points in this segment as well.
Finally, unallocated corporate and SG&A costs were $1.4 million better than prior-year third quarter. | We reported revenue of $212.1 million during the third quarter of 2020, compared to $238.5 million during the third quarter of 2019.
However, volume across all segments increased significantly in June, and net sales in July exceeded prior year on a consolidated basis.
We reported net income of $10.8 million or $0.33 per diluted share for the three months ended July 31, 2020, compared to $11.8 million or $0.36 per diluted share during the three months ended July 31, 2019.
On an adjusted basis, net income was $11.1 million or $0.34 per diluted share during the third quarter of 2020, compared to $13.7 million or $0.41 per diluted share during the third quarter of 2019.
Having said that, the recovery has been more robust than expected on all fronts, and we are now comfortable providing the following full-year 2020 guidance: net sales of $832 million to $837 million, adjusted EBITDA of $97 million to $102 million, capex of approximately $25 million and free cash flow of approximately $50 million. | 1
1
1
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0 |
We're also seeing improving customer engagement, including 8,000 registrations for our annual Legal, Tax and Corporates SYNERGY conferences around the world.
Our leadership team, including the president of our Corporates business, Sunil Pandita; and the president of our Tax & Accounting Professionals business, Elizabeth Beastrom, will be joining nearly 2,000 of our customers for the upcoming SYNERGY conferences in November in Nashville.
Four of our five business segments recorded organic revenue growth of 6%.
That performance resulted in total company organic revenue growth of 5%, putting us well above the 3.5% to 4% third quarter guidance provided in August.
Full year total company organic revenue growth is now forecast to be between 4.5% and 5% and approximately 6% for the Big 3 businesses.
Free cash flow for the year is now forecast to be approximately $1.2 billion.
As of September 30, we recorded run rate savings of about $130 million, putting us on a path to achieve $200 million by year end.
I'll remind you, our aggregate savings target is $600 million by the end of 2023, $200 million of which we plan to reinvest in the business.
Finally, we were active during the quarter executing on the $1.2 billion share buyback program we announced in August.
We've already bought back $1.1 billion of stock, and we expect to complete the program before year end.
Contributing to this performance was strong organic growth of more than 20% from our Latin American businesses and nearly 10% growth from our Asia and emerging markets businesses.
Adjusted EBITDA declined 7% to $458 million due to costs related to the Change Program, resulting in a margin of 30%.
Excluding Change Program costs, adjusted EBITDA margin was 33.5%.
Adjusted earnings per share for the quarter was $0.46, compared to $0.39 per share in the prior-year period.
The Big 3 businesses achieved organic revenue growth of 6% for the quarter.
Legal's third quarter performance was again strong with organic revenue growth of 6%.
This was Legal's second consecutive quarter of 6% growth, its highest quarterly growth rate in over a decade.
For example, Westlaw Edge continues to achieve strong sales growth and ended the quarter with an annual contract value or ACV penetration of 60%, achieving our full year ACV penetration guidance.
Third, our Government business, which is managed within our Legal segment, continues to perform and grew 10% organically.
And fourth, FindLaw grew over 10%, and our Legal businesses in Canada, Europe and Asia all grew mid-single-digit in the quarter.
Organic revenue growth increased to 6% from 4% in the first half of the year.
Reuters News organic revenues also increased 6%, the second consecutive quarter of 6% growth.
This was driven by the Professional business, which includes Reuters Events, which grew over 60% and continues to recover from the negative impact of COVID-19 in 2020.
Finally, Global Print organic revenues declined 5%, less than expected, due to a continued gradual return to office by our customers and higher third-party print revenues.
We still have much work to do in executing our Change Program, and we've assembled a talented team over the past 18 months who are working well together and clearly understand our goals and our timelines.
As you can see on this slide, momentum has been building for our Big 3 businesses over the past 11 quarters, which we believe will continue in the fourth quarter and into next year.
These factors position us well to achieve the upper end of the range of our 2022 revenue guidance of 4% to 5%.
This release features key integrations with Practical Law, Contract Express, Elite 3E and Microsoft Teams and includes more than 50 enhancements and upgrades.
Today, these four legal products are growing double digit, comprising over 10% of total company revenue and are contributing to the improving growth in both our Legal and Corporates segments.
Two weeks ago, we announced the establishment of a $100 million corporate venture capital fund focused on the future of professionals.
Let me start by discussing the third quarter revenue performance of our Big 3 segments.
Organic revenues and revenues at constant currency were both up 6% for the quarter.
This marks the fifth consecutive quarter our Big 3 segments have grown at least 5%.
Legal Professionals total and organic revenues increased 6% in the third quarter.
Recurring organic revenue grew 6%.
And transaction revenues increased 10% related to our Elite, FindLaw and Government businesses.
Westlaw Edge added about 100 basis points to Legal's organic growth rate, is maintaining a healthy premium and is expected to continue to contribute at a similar level going forward.
Our Government business, which is reported within Legal and includes much of our risk, fraud, and compliance businesses, had a strong quarter, with total revenue growth of 11% and organic growth of 10%.
In our Corporates segment, total and organic revenues increased 6% due to recurring organic revenue growth of 7% and transactions organic revenue growth of 2%.
And finally, Tax & Accounting's total and organic revenues grew 6%, driven by 10% recurring organic revenue growth.
Transactions organic revenue declined 9%, resulting from the year-over-year timing of individual tax filing deadlines.
Normalizing for this timing, organic revenues for Tax & Accounting were up 11% in Q3.
Third quarter performance was strong, achieving total and organic revenue growth of 6%, primarily due to the Agency business and Professional business, which includes Reuters Events.
In Global Print, total and organic revenues declined 5%, at the lower end of the range we had forecast of minus 5% to minus 8%.
We expect full year Global Print revenue to decline between 4% and 6%.
On a consolidated basis, third quarter total and organic revenues each increased 5%.
Starting on the left side, total company organic revenue for the third quarter of 2021 was up 5% compared to 2% in the third quarter of 2020 due to the impact of COVID.
If we look at Q3 2021 performance for the Big 3, you will see organic revenues increased 6% compared to 5% in the same period last year.
Total company recurring organic revenues grew 6% in Q3, 230 basis points above Q3 2020.
And the Big 3 recurring organic revenues grew 7%, which was above last year's third quarter growth of 5%.
Transaction revenues were up 8%, as the third quarter of 2020 was impacted by COVID, which affected our implementation services and the Reuters Events business.
Starting with the total TR chart on the top left, we now estimate full year total and organic revenues will grow between 4.5% and 5%.
This is an increase from the previous guidance of 4% to 4.5%.
The Big 3 total and organic revenues are now forecast to grow approximately 6% for the full year, up from the previous guidance of 5.5% to 6%.
We forecast full year total and organic revenues to grow between 3% and 5%, driven mainly by our Reuters Professional business.
This is an increase from the previous guidance of 2% to 3%.
Finally, Global Print full year revenues are expected to decline between 4% and 6%, an improvement from our previous guidance of a 4% to 7% decline.
Adjusted EBITDA for the Big 3 segments was $468 million, up 7% from the prior-year period.
Adjusted EBITDA was $25 million, $2 million more than the prior-year period, driven by revenue growth.
Global Print adjusted EBITDA was $52 million with a margin of 35%, a decline of about 600 basis points due to the decrease in revenues and the dilutive impact of lower margin third-party print revenue.
So in aggregate, total company adjusted EBITDA was $458 million, a 7% decrease versus Q3 2020.
Excluding costs related to the Change Program, adjusted EBITDA increased 4%.
The third quarter's adjusted EBITDA margin was 30% and was 33.5% on an underlying basis, excluding costs related to the Change Program.
Starting with earnings per share, adjusted earnings per share was $0.46 per share versus $0.39 per share in the prior-year period, an 18% increase.
For the full year, we have decreased our tax rate guidance to between 14% and 16% due to favorable results from the settlement of prior tax years in various jurisdictions.
Currency had a $0.01 positive impact on adjusted earnings per share in the quarter.
Our reported free cash flow was $1 billion versus $881 million in the prior-year period, an improvement of $120 million.
Working from the bottom of the slide upwards, the cash outflows from the discontinued operations component of our free cash flow was $59 million more than the prior-year period.
In the first nine months, we made $94 million of Change Program payments as compared to Refinitiv-related separation cost of $87 million in the prior-year period.
So if you adjust for these items, comparable free cash flow from continuing operations was just shy of $1.2 billion, $327 million better than the prior-year period.
In the third quarter, we achieved $42 million of annual run rate operating expense savings.
This brings the cumulative annual run rate operating expense savings up to $132 million for the Change Program.
We are forecasting to achieve $200 million of cumulative annual run rate operating expense savings by the end of this year.
As a reminder, we anticipate operating expense savings of $600 million by 2023 while reinvesting $200 million back into the business or net savings of $400 million.
Achieving $200 million of operating expense savings by the end of 2021 would put us a third of the way toward our goal of $600 million of gross savings by 2023.
Spend during the third quarter was $79 million, which included $53 million of opex and $26 million of capex.
Total spend in the first nine months of the year was $170 million.
We now anticipate opex and capex spending between $120 million and $150 million in the fourth quarter.
For the full year, we now expect Change Program opex and capex spend to be between $290 million and $320 million.
This is slightly lower than the previous guidance range of $300 million to $350 million.
We expect the lower spend in 2021 to carry over into 2022 as we are still expecting to incur approximately $600 million over the course of the program.
There is no change in the anticipated split of about 60% opex and 40% capex.
And as Steve outlined, today, we increased our full year outlook for total TR and Big 3 revenue growth.
We also increased our full year free cash flow guidance to approximately $1.2 billion.
Lastly, we reaffirm the balance of our full year 2021 guidance as well as our 2022 and 2023 guidance previously provided. | Free cash flow for the year is now forecast to be approximately $1.2 billion.
We've already bought back $1.1 billion of stock, and we expect to complete the program before year end.
Adjusted earnings per share for the quarter was $0.46, compared to $0.39 per share in the prior-year period.
Legal Professionals total and organic revenues increased 6% in the third quarter.
In Global Print, total and organic revenues declined 5%, at the lower end of the range we had forecast of minus 5% to minus 8%.
Starting with the total TR chart on the top left, we now estimate full year total and organic revenues will grow between 4.5% and 5%.
Starting with earnings per share, adjusted earnings per share was $0.46 per share versus $0.39 per share in the prior-year period, an 18% increase.
Lastly, we reaffirm the balance of our full year 2021 guidance as well as our 2022 and 2023 guidance previously provided. | 0
0
0
0
0
1
0
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1 |
Poultry represents about 40% of the $3 billion global opportunity that's been created by the elimination of antibiotics in the human food chain.
And so you're talking a $1.2 billion opportunity, where from Fred to that team that I just mentioned, their -- with a quick phone call, they can get to every level at all the major decision-makers around the world, and we are getting interest like never before.
We have 100 million proven, but we have to equal that amount inferred, meaning we don't even bother doing the drilling because we're not going to need it in any of our lifetimes, but mother nature put it there.
We have always a minimum of 40 years reserves in every product line.
And 11 markets really are where we think we have a unique position to go after a large percentage of that $1.2 billion opportunity.
My math is it's between $700 million and $800 million of that $1.2 billion, so maybe two-thirds.
So in our second quarter of fiscal 2021, Oil-Dri delivered another solid quarter of top-line growth with net sales of $74.5 million, growing 5% over net sales during the same quarter in the prior year.
Both our business-to-business products group, which grew 7%, and our retail and wholesale products group, which grew 4%, contributed to this growth, demonstrating that as Dan said, we are achieving success in two of the key areas of our strategic focus, and those are mineral-based animal feed additives and lightweight cat litter.
We are seeing evidence that the focus on our mineral-based strategy in animal health and nutrition products is paying off, with 20% net sales growth during the quarter over the second quarter of the prior year.
Agricultural and horticultural products also had a strong quarter, achieving 10% growth over the same quarter in the prior year, driven primarily by increased sales with existing customers.
And in our fluids purification products, the decrease in sales of our jet fuel purification products that have been adversely impacted by the reductions in air travel due to the global pandemic were more than offset by the growth of our other products as our overall fluids purification products grew 3% in the quarter over the prior year.
And finally, our co-packaged cat litter product, which sits within our business-to-business products portfolio, grew 5% during the second quarter of fiscal 2021.
Now similarly, within our consumer products group, cat litter sales grew 6% over the prior year.
Our second-quarter gross profit of $18.2 million was down $800,000 from the same quarter in the prior year, representing a 4% year-over-year decrease.
Despite the favorable growth in net sales, the quarter was unfavorably impacted by cost increases particularly in the categories of freight, which was up 13% per manufactured ton over the same quarter in the prior year due to domestic trucking supply constraints that resulted in significant increases in transportation costs.
Our packaging costs were also up 13% per manufacturing ton as increased resin pricing resulted in increased costs, particularly in our jugs and pales, and natural gas costs were up 8% per manufactured tons, which we used to operate kilns to dry our clay.
Overall, our cost of goods sold per manufactured ton was up 8% over the same quarter in the prior year, driven, in large part, by these market-based factors that were partially offset by operating cost reductions and efficiencies during the quarter.
Switching to our total selling, general and administrative expenses for the second quarter of $13.9 million, they were $843,000 higher than the prior year, representing a 6% increase.
However, the second quarter of the prior fiscal year included a onetime curtailment gain of $1.3 million related to the freeze of the company's supplemental executive retirement plan, which has since been terminated.
Excluding that $1.3 million onetime gain in the prior year, SG&A was down 3% during the quarter.
However, there was also an underlying shift in costs as corporate expenses, including the impact of the fiscal 2020 onetime gain or excluding the impact of the onetime gain of $1.3 million, decreased from the prior year and SG&A costs to support our business-to-business products, particularly the investments that we're talking about in our animal health and nutrition products, grew 26% or approximately $600,000 over the same quarter of the prior year.
Our second-quarter other income of $1.1 million included an $800,000 gain upon the annual actuarial valuation of our pension plan.
And finally, net income attributed to Oil-Dri for the second quarter of fiscal 2021 was $4.3 million, which represents an 11% decrease from the prior year for the cost and investment reasons we just reviewed.
We ended the quarter with cash and cash equivalents of $31 million and have very little debt, equating to a debt to total capital ratio of only 6%.
During the first six months of fiscal 2021, our accounts receivable increased $3.8 million, reflecting our sales growth and a shift in our customer mix, including an increase of sales to foreign customers who tend to have longer payment terms.
Because of our strong position during the quarter, we also repurchased 33,594 shares of Oil-Dri common stock for $1.2 million at an average price of $36.09 per share. | So in our second quarter of fiscal 2021, Oil-Dri delivered another solid quarter of top-line growth with net sales of $74.5 million, growing 5% over net sales during the same quarter in the prior year. | 0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
Despite the sequential 36% decline in US onshore rig count, two hurricane storms that came through the Gulf of Mexico and the continued overhang from COVID-19, our team's focus on execution of our strategies resulted in positive EBITDA for each of our segments and sequential improved EBITDA margins.
On a consolidated basis, we achieved $30 million of adjusted EBITDA in the third quarter with the related margin improving 150 basis points sequentially as a result of our focus on cost management and maximizing the value of our latest technology.
Compared to the third quarter of last year, we've reduced our cost by $345 million on an annualized basis or 41% as it impacts EBITDA.
This compares to an annualized decline of revenue of $373 million, reducing cost by $0.92 for every $1 decline in revenue.
TETRA only generated $7.7 million of free cash flow from continuing operations in the quarter and ended the quarter with $59 million of cash at the TETRA level.
Year-to-date September, we've generated $43.5 million of TETRA-only cash from continued operations, an improvement of $66.6 million from last year.
And products third-quarter revenue decreased 27% sequentially, reflecting the seasonal second-quarter peak from our industrial European business and also due to project delays in the Gulf of Mexico as we experienced two major hurricanes in the third quarter.
Despite the lower revenue and sudden impact from the hurricanes, we achieved higher adjusted EBITDA margins by 110 basis points sequentially.
The third-quarter adjusted EBITDA margin of 26.8% was also 310 basis points better than a year ago.
International sales for completion fluids, excluding the industrial business, increased sequentially by 84%, led by some large sales for some major national oil companies in the Middle East.
Our industrial chemicals business continues to perform well and made up approximately 36% of the total revenue for this segment.
Water and flowback third-quarter adjusted EBITDA remained positive despite revenue decreasing sequentially 13%.
Integrated projects increased from 16 with 14 different customers at the end of the second quarter to 17 with 10 different customers at the end of the third quarter.
In September, 63% of our water management work was associated with integrated projects with multiple services provided by our BlueLinx automation system.
Our SandStorm technology was able to achieve 99.4% sand filtration.
We far exceeded the current solution the customer was using, with zero wash downstream and at a peak flow rate of 40 million standard cubic feet per day.
Excluding new equipment sales, which we have now exited, revenue decreased 1% sequentially to $72 million.
Third-quarter adjusted EBITDA of $22.9 million was down $3.4 million from the second quarter.
Adjusted EBITDA margins improved 170 basis points sequentially.
Compression services revenue decreased 5% sequentially, and gross margins decreased 200 basis points to 52.9%.
Utilization declined from 82.1% in the second quarter to 80.3% in the third quarter.
We believe that our strategy to invest in high horsepower equipment will allow us to maintain utilization above the low point of 75.2% that was seen during the last downturn.
In the third quarter, horsepower was on standby decreased from a peak of 20% back in May to approximately 8% at the end of September as our key customers started bringing production and units back online.
We've completed 25% of the hardware upgrade rollouts and expect to be fully deployed by the end of 2021.
Aftermarket services revenue declined 12% from the second quarter, while gross margins improved 200 basis points sequentially.
Brady mentioned that we generated $43.5 million of free cash flow year to date on a TETRA-only basis, which is an improvement of $67 million from the same time a year ago.
TETRA-only adjusted EBITDA was $7 million in the third quarter.
TETRA-only capital expenditures in the third quarter were $1.6 million.
Of the $43.5 million of free cash flow that we generated so far this year, $11.4 million is year-to-date earnings less capex, less interest expense and less taxes.
The other $32 million has been from monetizing working capital, and monetizing receivables in this environment is not easy given the financial struggles by many of our customers.
Our ability to generate $11 million in free cash flow this year without the benefit of working capital talks to the aggressive cost management we have implemented, the benefit of deploying technology to the US onshore market, and a very flexible, vertically integrated business model on the fluids side.
In the third quarter, we were slightly over $0.5 million positive free cash flow without the benefit of monetizing working capital.
For the full year of 2020, we expect TETRA-only capital expenditures to be between 9 and $12.5 million, slightly lower than the prior guidance.
TETRA-only liquidity ended the third quarter improved approximately $22 million in the same period a year ago, positioning us to be able to continue to manage through this downturn as activity begins to slowly recover.
TETRA-only net debt at the end of September was $148 million with cash on hand of $59 million.
Our $221 million term loan is not due until August 2025, and our $100 million asset-based revolver does not mature until September 2023.
Annual interest expense on this term loan is approximately 15.5 to $17 million.
CSI Compressco's cash on hand at the end of September was $16.7 million, up from $2.4 million at the beginning of the year.
At the end of September, there were no amounts outstanding on the revolver compared to $2.6 million that was outstanding at the beginning of the year.
The reduction in the outstanding amount of revolver plus the increasing cash represents almost a $17 million improvement from the beginning of the year despite very challenging market conditions.
And this is how CSI Compressco paid almost $5 million of legal and advisor fees to complete the debt swap in June of this year, which resulted in a net reduction of $9 million and pushed $215 million of maturities into 2025 and 2026.
CSI Compressco sold our Midland fabrication facility and related real estate and have targeted the sale of $13 million in compressor assets in the second half of this year.
Their objective is to generate between $15 million and $25 million of free cash flow by early in the third quarter of 2021 to partially pay down the maturing $81 million of unsecured notes and to refinance the remaining amount.
For the full-year 2020, CSI Compressco expects capital expenditures of between 6 and $7 million, and maintenance capital expenditures of between 20 and $21 million.
And this year, they expect to spend between 5 and $6 million.
Other than the $81 million of unsecured notes that are due August of 2022 for CSI Compressco, the $555 million of first and second lien bonds are not due until 2025 and 2026.
CSI Compressco's net leverage ratio at the end of September was 5.4 times.
CSI Compressco generated $14 million of free cash flow in the quarter.
And year-to-date, free cash flow is $24.7 million.
Distributable cash flow was $10.5 million in the third quarter, which increased by 25% as they benefited from the sale of used assets.
Through September, distributable cash flow was $27 million.
On an annualized basis, distributable cash flow will be $36.5 million or approximately $0.77 per common unit.
This compares to CSI Compressco's unit price at the close of business last week of $0.85, which is not a bad cash flow yield.
And other than $81 million of unsecured debt that is due August of 2022 for CSI Compressco, there are no near-term maturities. | And products third-quarter revenue decreased 27% sequentially, reflecting the seasonal second-quarter peak from our industrial European business and also due to project delays in the Gulf of Mexico as we experienced two major hurricanes in the third quarter.
For the full-year 2020, CSI Compressco expects capital expenditures of between 6 and $7 million, and maintenance capital expenditures of between 20 and $21 million. | 0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0 |
And as most of you know, we've historically held our calls at 9 AM on Friday, but there is a calendar conflict this quarter and we moved our call to accommodate that.
But going forward, we do expect to move our call back to Friday's at 9 AM Central.
And then in January, we are attending the Raymond James Deer Valley Summit in person on January 3 through 5 and Citi's Apps Economy Conference virtually on January 6.
From our founding over 50 years ago, TDS believes that being a good corporate citizen is fundamental to our long-term success.
These responsible practices, which make up the S in ESG are what we call our 3 Cs; customer, culture and community.
Before turning the call over, I want to remind everyone that due to the FCC's anti-collusion rules related to the ongoing Auction 1-10, we will not be responding to any questions related to spectrum auctions.
As you can see, we've raised $3.4 billion since the beginning of 2020 at an average cost of 4.9% and redeemed six separate bond series comprising $1.6 billion in debt with a weighted average cost of 7%.
Finally, before turning the call over to LT, I want to point out that our income tax rate for the quarter was 29%.
We're offering commercial millimeter wave fixed wireless access speeds of up to 300 megabits per second and to date we're seeing many customers experiencing speeds that far exceed that.
We recently received a net promoter score 40, which is an amazing loyalty score.
Postpaid handset gross additions increased by 3,000 year-over-year, largely due to higher switching activity in combination with our strong promotional activity.
We saw connected device gross additions declined 26,000 year-over-year.
Total smartphone connections increased by 8,000 during the quarter and by 65,000 over the course of the past 12 months.
We saw prepaid gross additions improved by 9,000 year-over-year.
Postpaid handset churn depicted by the blue bars was 0.95% up from 0.88% a year ago.
Total postpaid churn combining handsets and connected devices was 1.15% for the third quarter of 2021 higher than a year ago as we've also seen churn increase on connected devices due to certain business and government customers disconnecting devices that were activated during the peak periods of the pandemic in 2020.
Total operating revenues for the third quarter were $1.016 billion, a decrease of $11 million or 1% year-over-year.
Retail service revenues increased by $25 million to $699 million.
Inbound roaming revenue was $30 million, that was a decrease of $12 million year-over-year driven by a decrease in data volume and rates.
Other service revenues were $59 million flat year-over-year.
Finally, equipment sales revenues decreased by $24 million year-over-year due to a decrease in average revenue per unit, in large part as a result of an increase in promotional activity as well as a decrease in overall sales volume.
As a result of the combined impact of these factors [Indecipherable] equipment increased $19 million year-over-year from $5 million in 2020 to $24 million in 2021, this change in [Phonetic] loss of equipment was the primary driver of our decline in profitability year-over-year.
Now a few more comments about postpaid revenue shown on Slide 12, the average revenue per user or connection was $48.12 for the third quarter up $1.02 or approximately 2% year-over-year.
On a per account basis, average revenue grew by $2.72 or 2% year-over-year.
Third quarter tower rental revenues increased by 6% year-over-year.
As shown at the bottom of the slide, adjusted operating income was $213 million, a decrease of 8% year-over-year.
As I commented earlier, total operating revenues were $1.016 billion, a 1% decrease year-over-year.
Total cash expenses were $803 million, an increase of $8 million or 1% year-over-year.
Total system operations expense increased 1% year-over-year.
Excluding roaming expense, system operations expense increased by 7% due to higher circuit costs, cell site rent and maintenance expense.
Roaming expense decreased $8 million or 17% year-over-year driven by lower data rates and lower voice usage.
Cost of equipment sold decreased $5 million or 2% year-over-year due to a significant decline in Connected Device sales, partially offset by slightly higher average cost per unit sold as a result of the mix shifting more heavily toward smartphone sales.
Selling general and administrative expenses increased $11 million or 3% year-over-year, driven primarily by an increase in bad debts expense and cost associated with supporting enterprise projects and billing system upgrades.
Adjusted EBITDA for the quarter was $262 million, a decrease of $20 million or 7% year-over-year.
First, we have narrowed our guidance for service revenues to range of $3.075 billion to $3.125 billion, maintaining the midpoint.
For adjusted operating income and adjusted EBITDA, we are maintaining our guidance ranges of $850 million to $950 million and $1.025 billion to $1.125 billion respectively.
For capital expenditures, we are decreasing our guidance range to $700 million to $800 million as we are moving certainly equipment and project spend into 2022, this shift did not impact our 2021 build plan and as LT mentioned our multi-year 5G and network modernization program remains on track.
TDS Telecom grew its footprint 6% from a year ago, now serving $1.4 million service addresses across its market.
In addition, we are now capable of delivering 2 gig Internet speeds in our Spokane, Washington and Meridian, Idaho market and going forward, we will launch 2 gig product in all of our new fiber expansion market.
2 gig provides an exceptional customer experience, doubling our previous maximum speed offering and helping to further differentiate us from the cable competition.
Also in the quarter, we completed fiber to the home construction in our Southern Wisconsin cluster where we are seeing total broadband penetration of 38% in the fully launched cluster.
In total, during the quarter, we added 20,000 fiber service addresses surpassing 40% of our wireline service addresses, a key milestone for us.
From a financial perspective, overall, we grew our topline 2% while planned investment spending on new market launches resulted in lower adjusted EBITDA as expected.
Moving to Slide 19, total residential connections increased 3% due to broadband growth in new and existing markets, partially offset by a decrease in voice connection.
Total telecom broadband residential connections grew 7% in the quarter as we continue to fortify our network with fiber and expand into new market.
Overall, higher value product mix and price increases drove a 4% increase in average residential revenue per connection.
Our focus on fast reliable service has generated a 13% increase in total residential broadband revenue.
We are offering 1 gig broadband speeds to 57% of our total footprint, including both our fiber and DOCSIS 3.1 market.
The 1 gig product along with our 2 gig product in certain expansion markets are important tool that will allow us to defend and to win new customers.
In areas where we offer 1 gig service, we are now seeing 20% of our new customers taking the superior product.
A majority of TDS Telecom's residential customers take advantage of bundling options as 63% of customers subscribed to more than one service which helps to keep our churn well.
Residential video connections were nearly flat, wireline growth of 6% driven by our expansion market nearly offset losses in the cable market.
For example, we are experiencing a 38% video attachment rate to every broadband connection in our wireline market where we offer IPTV services.
The rollout of this product currently cover 61% of our total operations including cable.
As a result of this strategy, 40% of our wireline service addresses are now served by fiber, which is up from 34% a year ago.
This is driving revenue growth while also expanding the total wireline footprint 8% to 891,000 service addresses.
In total, these communities add more than 270,000 additional service addresses to our existing fiber deployment plan.
Through the third quarter, we have 358,000 total fiber service addresses and are working to build out the footprint in these announced market growing to 929,000 service addresses over the next several years.
Year-to-date, we completed construction of 51,000 fiber addresses, adding 20,000 service addresses in the quarter.
For example in Meridian, Idaho, we experienced a temporary delay on more than 35,000 service addresses and just recently have restarted construction.
On Slide 25, total revenues increased 2% year-over-year to $252 million driven by the strong growth in residential revenue, which increased 6% in total.
Incumbent wireline markets also showed solid residential growth of 3% due to increases in broadband connections as well as increases from within the broadband product mix, partially offset by a 4% decrease in residential voice connection.
Cable residential revenue grew 6%, also due to increases in broadband connections as well as the product mix.
Commercial revenues decreased 6% in the quarter, primarily driven by lower CLEC connections, partially offset by a 5% increase in broadband connection, wholesale revenues decreased 5% due to certain state USF support timing.
Total revenues increased 2% from the prior year as growth from our fiber expansions that increases in broadband subscribers exceeded the declines we experienced in our legacy business.
Cash expenses increased 3% due to both supporting our current growth as well as spending related to future expansion into new market, which is not yet reflected in our revenue.
As a result, adjusted EBITDA decreased 2% to $77 million as expected.
Capital expenditures were down 1% to $91 million as increased investment in fiber to finance were offset by decreased cent on core operation and on Slide 27, we provided our updated 2021 guidance.
We expect revenues to be between $990 million and $1 billion, $20 million and adjusted EBITDA to be between $295 million and $315 million.
With the construction delays and build challenges I mentioned earlier, we are lowering our expectations for capital expenditures to be between $400 million and $450 million. | Total operating revenues for the third quarter were $1.016 billion, a decrease of $11 million or 1% year-over-year.
As I commented earlier, total operating revenues were $1.016 billion, a 1% decrease year-over-year.
Also in the quarter, we completed fiber to the home construction in our Southern Wisconsin cluster where we are seeing total broadband penetration of 38% in the fully launched cluster.
For example, we are experiencing a 38% video attachment rate to every broadband connection in our wireline market where we offer IPTV services. | 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
During the first quarter 2022, we restarted 10 additional ships, resulting in 60% of our fleet capacity in guest cruise operations for the whole of the first quarter.
This was a substantial increase from 47% during the fourth quarter 2021.
As of today, 75% of our fleet capacity has resumed guest cruise operations.
And we now expect each brand's full fleet to be back in guest cruise operations for its respective summer season where we historically generate the largest share of our operating income.
For the first quarter, occupancy was 54% across the ships in service.
However, we had anticipated first quarter occupancy would exceed the 58% achieved in the fourth quarter of 2021.
We started the quarter with over 55% cabin occupancy booked for the first quarter and expected to improve upon that during the quarter.
All of this inhibited our ability to build on our cabin occupancy book position for the first quarter 2022 during the first quarter, resulting in occupancy for the first quarter 2022 at 54% being lower than the 58% occupancy we achieved in the fourth quarter of 2021.
Despite all that, during the first quarter, we carried over one million guests, which was nearly a 20% increase from the fourth quarter 2021.
Revenue per passenger day for the first quarter 2022 increased approximately 7.5% compared to a strong 2019 despite our lucrative world cruises and exotic voyages being shelved this year.
Over the past 2.5 years, we have offered and our guests have chosen more and more bundled package options.
On the cost side, our adjusted cruise cost without fuel per available lower berth day, or ALBD as it is more commonly called, for the first quarter 2022 was up 25%.
The increase in adjusted cruise costs without fuel per ALBD is driven essentially by five things: first, the cost of a portion of the fleet being in pause status; second, restart related expenses; third, 15 ships being in dry dock during the quarter, which resulted in nearly double the number of dry dock days during the first quarter versus the first quarter 2019; fourth, the cost of maintaining enhanced health and safety protocols; and finally, inflation.
We anticipate that many of these costs and expenses driving adjusted cruise costs without fuel per ALBD higher will end during 2022 and will not reoccur in 2023.
As a result of all of the above, we expect to see a significant improvement in adjusted cruise costs, excluding fuel per ALBD, from the first half of 2022 to the second half of 2022 with a low double-digit increase expected for the full year 2022 compared to 2019.
We ended the first quarter 2022 with $7.2 billion in liquidity versus $9.4 million at the end of the fourth quarter.
The change in liquidity during the quarter was driven essentially by four things: first, an improved negative adjusted EBITDA of $1 billion due to our ongoing resumption of guest cruise operations despite the impact of the omicron variant.
Second, our investment of $400 million in capital expenditures net of export credits.
Third, $500 million of debt principal payments.
And fourth, $400 million of interest expense during the quarter.
Since the middle of January, we have seen an improving trend in booking volumes for future sailings.
Recent weekly booking volumes have been higher than at any point since the restart of guest cruise operations.
We continue to expect that occupancy will build throughout 2022 and return to historical levels in 2023.
Our cumulative advanced book position for the first half of 2023 continues to be at the higher end of the historical range, also at higher prices with or without FCCs normalized for bundled packages as compared to 2019 sailings.
However, as I've already said, adjusted EBITDA over the first half of 2022 has been or will be impacted by the restart-related spending and dry dock expenses as 39 ships, over 40% of our fleet, will have been in dry dock during the first half of fiscal 2022.
Given all these factors combined, we expect monthly adjusted EBITDA to continue to improve and turn consistently positive at the beginning of our summer season.
We continue to expect a net loss for the second quarter of 2022 on both a U.S. GAAP and adjusted basis.
However, we expect the profit for the third quarter of 2022.
Looking to brighter days ahead in 2023, with the full fleet back in service all year, 8% more capacity than 2019 and improved fleet profile with nearly a quarter of our capacity consisting of newly delivered ships, continuing momentum on our outstanding Net Promoter Scores and occupancy returning to historical levels, we are looking forward to providing memorable vacation experiences to nearly 14 million guests and generating potentially greater adjusted EBITDA than 2019. | As of today, 75% of our fleet capacity has resumed guest cruise operations.
And we now expect each brand's full fleet to be back in guest cruise operations for its respective summer season where we historically generate the largest share of our operating income.
Despite all that, during the first quarter, we carried over one million guests, which was nearly a 20% increase from the fourth quarter 2021.
Revenue per passenger day for the first quarter 2022 increased approximately 7.5% compared to a strong 2019 despite our lucrative world cruises and exotic voyages being shelved this year.
We anticipate that many of these costs and expenses driving adjusted cruise costs without fuel per ALBD higher will end during 2022 and will not reoccur in 2023.
As a result of all of the above, we expect to see a significant improvement in adjusted cruise costs, excluding fuel per ALBD, from the first half of 2022 to the second half of 2022 with a low double-digit increase expected for the full year 2022 compared to 2019.
We ended the first quarter 2022 with $7.2 billion in liquidity versus $9.4 million at the end of the fourth quarter.
Since the middle of January, we have seen an improving trend in booking volumes for future sailings.
Recent weekly booking volumes have been higher than at any point since the restart of guest cruise operations.
We continue to expect that occupancy will build throughout 2022 and return to historical levels in 2023.
Our cumulative advanced book position for the first half of 2023 continues to be at the higher end of the historical range, also at higher prices with or without FCCs normalized for bundled packages as compared to 2019 sailings.
Given all these factors combined, we expect monthly adjusted EBITDA to continue to improve and turn consistently positive at the beginning of our summer season.
We continue to expect a net loss for the second quarter of 2022 on both a U.S. GAAP and adjusted basis.
However, we expect the profit for the third quarter of 2022. | 0
0
1
1
0
0
0
0
1
1
0
0
0
1
1
1
0
0
0
0
1
1
1
1
0
1
1
1
0 |
Revenue in the quarter was $20.2 million, $16.7 million was organic and $3.5 million was due to the acquisition of Barber-Nichols that closed June 1.
Defense revenue was 35% of total revenue in the quarter.
We do expect that defense revenue will approach 50% of total quarterly revenue with Barber-Nichols fully in future quarters.
You might recall that our first quarter last year operated at nominally 50% capacity due to COVID-19, thus impacting revenue and profitability due to under-absorption.
Orders from our crude oil refining and chemical/petrochemical markets were very low during the third and fourth quarters last fiscal year where non-Navy orders totaled $17.5 million for both quarters.
Orders in the first quarter were $20.9 million and were principally organic.
Barber-Nichols orders were $200,000 for the month of June.
Somewhat encouragingly, there were strong orders from our crude oil refining market in the quarter that totaled $11.5 million.
And now, 25 years later, we won back the installation and replaced the original supplier with our own vacuum systems.
Consolidated backlog at June 30 was $236 million, of which 80% is for defense.
As announced earlier today and as Debbie had mentioned, I'm very pleased to confirm that I will retire effective August 31 at the end of this month and Dan Thoren will succeed me as President and CEO of the corporation.
It has been a tremendous honor and great privilege for me to serve Graham shareholders and the corporation as its Principal Executive Officer since 2006.
As I discuss that first quarter, I would like you to keep in mind that our full year guidance is unchanged.
Sales in the quarter improved by $3.5 million, which was due to the one month that we owned Barber-Nichols.
However, in that quarter, we did have a $5 million project which was recognized on a completed contract basis and because of COVID had shifted from fiscal 2020 into Q1 of 2021.
We also had a small amount of acquisition expenses, about $169,000 pre-tax, and the first month of purchase price accounting related costs for Barber-Nichols.
To clarify the latter, the purchase accounting amortization costs were $225,000 before taxes in June.
Before we move on, I want to mention that we expect approximately $2.7 million pre-tax and $2.15 million after-tax related to acquisition purchase accounting.
90% of this is amortization costs, with the rest being a step-up in depreciation and inventory.
We expect the amount of amortization will be similar in fiscal 2023 as fiscal 2022 since we will have 12 rather than 10 months of amortization in fiscal 2023.
It will decrease in future years and level off at approximately $1.1 million pre-tax.
We have added $20 million of low-cost term debt as part of the acquisition and we have access to a much larger revolving line of credit.
We expect the acquisition of Barber-Nichols to be accretive in fiscal 2022, even with the $2.15 million or approximately $0.20 a share in added amortization costs.
With a $236 million backlog, we are well positioned for long-term growth.
80% of that backlog is in the defense market, which provides an excellent baseline for our business, not just this year, but in upcoming years as well.
Before I pass it over to Dan, I would be remiss if I didn't recognize Jim for his 37 years of service at Graham, the last 15 years being as leader.
Graham manufacturing second quarter orders are $9.5 million to date, while Barber-Nichols has booked $9.1 million.
Based on the timing of customers' projects, we are holding our revenue guidance at $130 million to $140 million of which Barber-Nichols is expected to contribute between $45 million and $48 million.
Combined, the Defense segment is expected to account for almost half of the revenue and EBITDA is expected to be in the $7 million to $9 million range.
Capital expenditures are planned to be in the $3.5 million to $4 million range, including the Barber-Nichols capital expenditure. | Revenue in the quarter was $20.2 million, $16.7 million was organic and $3.5 million was due to the acquisition of Barber-Nichols that closed June 1.
Defense revenue was 35% of total revenue in the quarter.
And now, 25 years later, we won back the installation and replaced the original supplier with our own vacuum systems.
As I discuss that first quarter, I would like you to keep in mind that our full year guidance is unchanged. | 1
1
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
CMC's exceptional fiscal-2021 performance translated to a return on invested capital of 14%, more than double the average for the three-year period proceeding our fiscal 2019 rebar asset acquisition.
CMC shipped more product out of our mills than ever before, with six of our 10 mills setting all-time shipment records and seven achieving best-ever production levels.
To underscore the strength of this accomplishment, particularly with an inflationary environment, I would point out that over the same time frame, the Census Bureau's producer price index increased almost 10%.
Following the full closure of CMC's former Steel California operations, we're now capturing an annual EBITDA benefit of approximately $25 million, while continuing to serve the West Coast market effectively and efficiently with bar source from lower-cost CMC mills.
When these actions complete, we are halfway to our stated target of $50 million on an annual optimization benefits.
On the sustainability front, CMC published its latest report in June, featuring enhanced disclosures and a commitment to achieve ambitious environmental goals by the year 2030.
CMC has been sustainable since its inception 106 years ago as a single location recycling operation in Dallas, Texas, and we have carried that legacy forward into the 21st century.
CMC generated earnings from continuing operations of $152.3 million or $1.24 per diluted share.
Excluding the impact of a small one-time charge related to the write down of a recycling asset, adjusted earnings from continuing operations were $154.2 million, or $1.26 per diluted share.
This level of adjusted earnings represents a 21% sequential increase and a 62% year-over-year increase, driven by strong margins on steel products and raw materials, as well as robust demand from nearly every end market we serve.
During the quarter, CMC generated an annualized return on invested capital of 20%, which is far in excess of our cost of capital and a clear indication of the economic value we are creating for our shareholders.
The only comment to add is that during the two months of commercial production at our new rolling line, EBITDA on an annualized basis far exceeded the $20 million target used to justify the project.
Construction of our revolutionary third micro mill the Arizona 2 remains on schedule for an early calendar 2023 start-up.
When CMC announced the construction of Arizona 2 in August of 2020, we also indicated that a meaningful portion of the investment costs would be funded through the sale of the land underlying our former Steel California operations.
On September 29, CMC entered into an agreement to sell that parcel for roughly $300 million.
I would note that the sale price was much higher than the figure we estimated in August 2020 when we gave an expected net investment figure of $300 million for Arizona 2.
The new rate of $0.14 per share of CMC common stock is payable to stockholders of record on October 27, 2021.
Additionally, as announced yesterday, the board of directors also authorized a new share repurchase program of $350 million.
As Barbara noted, we reported record earnings from continuing operations of $152.3 million or $1.24 per diluted share, more than double prior-year levels of $67.8 million and $0.56, respectively.
Results this quarter include a net after-tax charge of $1.9 million related to the write-down of recycling assets.
Excluding the impact of this item, adjusted earnings from continuing operations were $154.2 million or $1.26 per diluted share.
Core EBITDA from continuing operations was $255.9 million for the fourth quarter of 2021, up 45% from a year-ago period and 11% on a sequential basis.
Both of our North America and Europe segments contributed significantly to year-over-year earnings growth, while core EBITDA per ton of finished steel reached a record level of $155 per ton.
The fourth quarter marked the tenth consecutive quarter in which CMC generated an annualized return on invested capital at or above 10%, which is above our cost of capital.
North American segment recorded adjusted EBITDA of $212 million for the quarter, an all-time high, compared to adjusted EBITDA of $174.2 million in the same period last year.
The largest drivers of this 22% improvement were significant increase in margins on steel products and raw materials, as well as solid volume growth.
Selling prices for steel products from our mills increased by $300 per ton on a year-over-year basis and $106 per ton sequentially.
Margin over scrap on steel products increased by $103 per ton from a year ago and $41 per ton sequentially.
The average selling price of downstream products increased by $44 per ton from the prior year, reaching $1,014.
Shipments of finished product in the fourth quarter increased 2% from a year ago.
Volumes of merchant and other steel products hit a record level during the quarter, increasing 29% on a year-over-year basis and were 20% higher than the trailing three-year average.
Downstream product shipments were impacted by a reduced backlog we had at the beginning of the year and resulted in a 3% volume decline from the fourth quarter of fiscal 2020.
Our Europe segment generated record adjusted EBITDA of $67.7 million for the fourth quarter of 2021, compared to adjusted EBITDA of $22.9 million in the prior-year quarter.
I should note that the prior-year period included a roughly $11 million energy credit that the current period does not.
Margins over scrap increased by $119 per ton on a year-over-year basis and were up $27 per ton from the prior quarter.
Tight market conditions provided the backdrop to achieve the segment's highest average selling price in more than a decade, reaching $763 per ton during the fourth quarter.
This level represented an increase of $317 per ton compared to a year ago and $99 per ton sequentially.
Europe volumes increased 21% compared to the prior year and reached their highest level on record.
The new share repurchase program equates to roughly 9% of our market capitalization and will replace the previous program enacted in 2015.
As of August 31, 2021, cash and cash equivalents totaled $498 million.
In addition, we had approximately $699 million of availability under our credit and accounts receivable programs.
During the quarter, we generated $134 million of cash from operations despite a $48 million increase in working capital.
As can be seen on Slide 17, our net debt-to-EBITDA ratio now sits at just 0.8%, while our net debt to capitalization is at 17%.
CMC's effective tax rate for the quarter was 21%.
For the year, our effective tax rate was 22.7%.
Absent enactment of any new corporate tax legislation, we forecast our tax rate to be between 25% and 26% in fiscal '22.
We currently expect to invest between $450 million to $500 million this year with a little over half of which can be attributed to Arizona 2.
Total gross investment for Arizona 2 is forecast to be approximately $500 million.
Against which, we'll apply roughly $260 million net after-tax proceeds from the land transaction.
This nets out to be $240 million of spend for the new mill, compared to the $300 million net investment figure we had previously provided.
We entered fiscal 2022 confident about what lies ahead.
The PCA expects growth in cement consumption of 2.2% in fiscal 2022 and 1.4% in 2023.
The AIA consensus outlook for private nonresidential spending anticipates an increase of roughly 5% in 2022. | CMC generated earnings from continuing operations of $152.3 million or $1.24 per diluted share.
Excluding the impact of a small one-time charge related to the write down of a recycling asset, adjusted earnings from continuing operations were $154.2 million, or $1.26 per diluted share.
The new rate of $0.14 per share of CMC common stock is payable to stockholders of record on October 27, 2021.
As Barbara noted, we reported record earnings from continuing operations of $152.3 million or $1.24 per diluted share, more than double prior-year levels of $67.8 million and $0.56, respectively.
Excluding the impact of this item, adjusted earnings from continuing operations were $154.2 million or $1.26 per diluted share.
We entered fiscal 2022 confident about what lies ahead. | 0
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
1
0
1
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0 |
And I'm pleased to announce that we have appointed Tolani Azis, a six-year Fluor employee with 20 years of EPC experience, to lead our diversity, equity and inclusion efforts.
Currently, well over 90% of our project sites and about 80% of our offices are operating at limited operations or better.
Our 1,500 New Delhi employees are all now working safely and productively from home.
In the first quarter, our book-to-bill ratio was 1.25, with new awards led by the Dos Bocas in our Energy Solutions Group.
On April 5, we announced a $40 million equity contribution from JGC.
We know JGC well, having executed projects with them for more than 10 years.
In Energy Solutions, this quarter, our ICA Fluor joint venture was awarded three contracts totaling $2.8 billion for the PEMEX Dos Bocas refinery in Mexico.
We have a long and successful history of PEMEX contracts, and we are pleased to be adding our $1.4 billion share of this refinery program to backlog.
And as a result, we removed approximately $1 billion from backlog while slightly increasing Energy Solutions total backlog to $11.1 billion.
In infrastructure, we completed the handover for the 183 South Highway project outside of Austin, just a few miles from the Oak Hill Parkway project we booked in 2020.
We are currently completing FEED work that represents $20 billion of potential projects, and we see a robust pipeline of FEED and feasibility studies ahead of us.
As we have seen over the last 18 months, vaccine development is an integral part of our global economy, and facilities like this one will be essential going forward in protecting the population.
This reimbursable 12-month contract with two six-month options is valued at $690 million.
Peter is the last of a long line of family members to serve the company since our founding in 1912.
Joining the Board in 1984, he continued the Fluor family legacy of a commitment to excellence, integrity and ethics, always putting the safety and well-being of employees first and recognizing that teamwork is a key component of our success.
For the first quarter of 2021, we are reporting adjusted earnings per share of $0.07.
Our overall segment profit for the quarter was $60 million or 2% and includes the $29 million embedded derivative in Energy Solutions and quarterly NuScale expenses of $15 million.
This compares favorably to $55 million in the first quarter of 2020.
Removing NuScale expenses and the effect of the embedded derivative would improve our total segment profit margin to 3.6%.
We anticipate project activities will accelerate as we move through 2021.
As David mentioned, we received a $40 million investment in NuScale from JGC this quarter and are anticipating other significant investments in the near future.
Note here that even though partners are meeting NuScale's cash needs, we will continue to expense 100% of this investment on our income statement on a consolidated basis.
Our G&A expense in the quarter was $66 million.
We have identified cost savings above the $100 million target previously discussed.
On Slide 12, our ending cash for the quarter was $2 billion, 25% of this domestically available.
Our operating cash flow for the quarter was an outflow of $231 million and was negatively impacted by increased funding of COVID costs on our projects, higher cash payments of corporate G&A, including the timing and extent of employee bonuses, and increased tax payments.
We used approximately $50 million in cash for challenged legacy projects in the first quarter.
As I stated in February, we expect to spend an additional $65 million over the balance of 2021 to fund these projects.
As we announced earlier this week, we have divested our AMECO North America business for $73 million.
We are maintaining our adjusted earnings per share guidance of between $0.50 and $0.80 for the full year.
We are also maintaining our previous segment level guidance and expect 2021 full year segment margins to be approximately 2.5% to 3.5% in Energy Solutions, which excludes any fluctuation from the embedded foreign currency derivative; 2% to 3% in Urban Solutions; and 2.5% to 3% in Mission Solutions. | For the first quarter of 2021, we are reporting adjusted earnings per share of $0.07.
We anticipate project activities will accelerate as we move through 2021.
We are maintaining our adjusted earnings per share guidance of between $0.50 and $0.80 for the full year. | 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0 |
For the first quarter, organic growth was negative 1.8% which positions us for a very strong recovery for 2021.
Getting back to our organic growth by geography, in the United States organic growth was down 1% an improvement of over 8% from the fourth quarter.
The UK was down 6.4%, about half the decline in the fourth quarter.
The Euro and the non-Euro markets were down 3.2% as compared to a negative 9.2% in Q4.
As you turn positive in Q1 with organic growth of 2.5% Australia continued to perform well and we saw a significant return to growth in our events business in China which combined with improvements in the other operations in the market resulted in double-digit growth.
Latin America experienced negative 2.4% growth in Q1 and meaningful sequential improvement compared to the fourth quarter.
EBIT margin in the first quarter was 13.6% as compared to 12.3% in the first quarter of 2020.
Net income for the quarter was $287.8 million, an improvement of 11.5% from 2020 and earnings per share was $1.33 per share, a year-over-year increase of 11.8%.
We generated $383 million in free cash flow in the quarter and ended with $4.9 billion in cash.
This follows our recent decision to increase our dividend by 7.7% to $0.70 per share.
Since we launched Omni 3 years ago, we've continued to [Indecipherable] and insights platform.
In Q2, we will be launching Omni 2.0 using next generation API connections to seamlessly orchestrate, identity sources and platforms -- insights and superior decisioning for our clients across all our networks and practice areas.
Just as important Omni 2.0 continues to build on our commitment to consumer privacy and transparency.
At the same time, we orchestrate datasets from about 100 privacy compliance sources to provide a comprehensive view of the consumer across devices.
Through this master framework agreement, Omnicom will produce work for Alliance on a global and local level, offering creative solutions to activate the global brand strategy for more than 70 countries, where Alliance operates.
BBDO, TBWA and Goodby Silverstein & Partners, were all named to Fast Company's prestigious list of Most Innovative Companies for 2021 making Omnicom the only holding company -- there are three agencies ranked in the top 10 in the advertising sector.
With our launch of OPEN2.0 last year, we have made a clear action plan for achieving systemic equity across Omnicom.
As John said, as we move through the first quarter of 2021, we continue to see an improvement in business conditions particularly when compared to the peak of the pandemic during the second quarter of 2020.
As we anticipated, we again saw a sequential improvement in organic revenue performance, a decrease of 1.8% in the first quarter of this year which is a considerable improvement in comparison to the last three quarters of 2020.
Turning to slide 3 for a summary of our revenue performance for the first quarter, organic revenue performance was negative $60.6 million or 1.8% for the quarter.
The decrease represented a sequential improvement versus the last three quarters of 2020, including the unprecedented decrease in organic revenue of 23% in Q2 11.7% in Q3 and 9.6% in Q4.
The impact of foreign exchange rates increased our revenue by 2.8% in the quarter.
Above the 250 basis point increase we estimated entering the quarter, as the dollar continued to weaken against some of our larger currencies compared to the prior year.
The impact on revenue from acquisitions, net of dispositions decreased revenue by 0.4% in line with our previous projection, and as a result our reported revenue in the first quarter increased 0.6% the $3.43 billion when compared to Q1 of 2020.
Returning to slide one, our reported operating profit for the quarter was $465 million, up 10.8% when compared to Q1 of 2020 and operating margin for the quarter improved to 13.6% compared to 12.3% during Q1 of 2020.
Our operating profit and the 130 basis point improvement in our margins this quarter was again positively impacted from our actions to reduce payroll and real estate costs during the second quarter of 2020, as well as continued savings from our discretionary addressable spend cost categories including T&E general office expenses, professional fees, personnel fees and other items, including cost savings resulting primarily from the remote working environment.
Our reported EBITDA for the quarter was $485 million and EBITDA margin was 14.2% also up 130 basis points when compared to Q1 of last year.
They increased by about $7 million in the quarter but excluding the impact of exchange rates, these costs were down by about 2.6%.
In comparison, these costs which are directly linked to changes in our revenue decreased nearly 40% in the second quarter of last year, 20% in the third quarter and 12.7% in the fourth quarter of 2020, consistent with the decline in our revenues across all of our businesses in those quarters.
Occupancy and other costs, which are less linked to changes in revenue declined by approximately $18 million reflecting our continuing efforts to reduce our infrastructure Call as well as the decrease in general office expenses since the majority of our staff has continue to work remotely.
In addition, finally, depreciation and amortization declined by 3.7 million.
Net interest expense for the quarter was $47.5 million compared to Q1 of last year and down $500,000 versus Q4 of 2020 -- 2020 our gross interest expense was down $1.5 million an interest income decreased by $1 million.
When compared to the first quarter of 2020, interest expense was down -- from $4.7 million, mainly resulting from $7.7 million charge we took in Q1 of 2020 in connection with the early retirement of $600 million of senior notes that were due to mature in Q3 of 2020.
That was offset by the incremental increase in interest expense from the additional interest on the incremental $600 million of debt we issued at the onset of the pandemic in early April 2020.
Net interest expense was also negatively impacted by a decrease in interest income of $6.4 million versus Q1 of 2020 due to lower interest rates on our cash balances.
Our effective tax rate for the first quarter was 26.8% up a bit from the Q1 2020 tax rate of 26% but in line with the range, we estimate for 2021 of 26.5% to 27%.
As a result, our reported net income for the first quarter was $287.8 million up 11.5% or 29.7% million when compared to Q1 of 2020.
Our diluted share count for the quarter decreased 0.3% versus Q1 of last year to 216.8 million shares.
As a result, our diluted earnings per share for the first quarter was $1.33 up $0.14 or 11.8% per share when compared to the prior year.
While helped by FX -- was [Technical Issues] or up $20 million 0.6% from Q1 of 2020.
The net impact of changes in exchange rates increased reported revenue by 2.8% or $95.7 million in revenue for the quarter.
In light of the recent strengthening of our basket of foreign currencies against the US dollar and where currency rates currently are, our current estimate is that FX could increase our reported revenues by around 3.5% to 4% in the second quarter and moderate in the second half of 2021 resulting in a full year projection of approximately 2% positive.
The impact of our acquisition and disposition activities over the past 12 months resulted in a decrease in revenue of $15.1 million in the quarter or 0.4% which is consistent with our estimate entering the year.
As previously mentioned, our organic revenue decreased $60.6 million or 1.8% in the first quarter when compared to the prior year.
We expect to return to positive organic growth in the second quarter and for the full year.
For the first quarter -- the split was 59% for advertising and 41% for marketing services.
As for the organic change by discipline, advertising was up 1.2% Our media businesses achieved positive organic growth for the first time since Q1 of 2020 and our global and national advertise -- when compared to the last three quarters although performance mixed by agency.
[Technical Issues] 7.2% on a continued strong performance and the delivery of a superior [Technical Issues] service offering.
CRM commerce and brand consulting was down 4.2% mainly related to decreased activity in our shopper marketing businesses due to client losses in prior quarters.
In the quarter, the discipline was down over 33%.
CRM Execution and Support was down 13% as our field marketing non-for profit and research businesses continue to lag.
PR was negative 3.5% in Q1 on mixed performance from our global PR agencies, and finally, our healthcare agencies again facing a very difficult comparison back to the performance of Q1 2020 when they experienced growth in excess of 9% were flat organically.
Now, turning to the details of our regional mix of business on page 5 you can see the quarterly split was 54.5% in the US, 3% for the rest of North America.
10.4% in the UK, 17.1% for the rest of Europe, 11.7% for Asia-Pacific, 1.8% for Latin America and 1.5% for the Middle East and Africa.
In reviewing the details of our performance by region, organic revenue in the first quarter in the US was down $18 million or 1%.
Our advertising discipline was positive for the quarter on the strength of our media businesses and our CRM precision [Technical Issues] which once again experienced our largest organic decline over 34% in the US while our other disciplines were down single-digits [Technical Issues] down 3.2%.
These were down 6.4% organically.
The rest of Europe was down 3.2% organically.
Outside the Eurozone organic growth was up around 5% during the quarter and organic revenue performance in Asia-Pacific for the quarter was up 2.5%.
Latin America was down 2.4% organically in the quarter.
And lastly, the Middle East and Africa was down 10% for the quarter.
Turning to our cash flow performance on Slide 7, you can see that in the first quarter, we generated $382 million of free cash flow, excluding changes in working capital which was up about $20 million versus the first quarter of last year.
As for our primary uses of cash on Slide 8 dividends paid to our common shareholders were up $140 million, effectively unchanged when compared to last year.
The $0.05 per share increase in the quarterly dividend that we announced in February will impact our cash payments from Q2 forward.
Dividends paid to our non-controlling interest shareholders totaled $14 million.
Capital expenditures in Q1 were $12 million, down as expected when compared to last year.
Acquisitions including earn-out payments totaled $9 million and since we stopped stock repurchases, the positive $2.7 million in net proceeds in net proceeds represents cash received from stock issuances under our employee share plans.
As a result of our continuing efforts to prudently manage the use of our cash, we were able to generate $210 million in free cash flow during the first 3 months of the year.
Regarding our capital structure at the end of the quarter, our total debt is $5.76 billion, up about $650 million since this time last year, but down $50 million as of this past year end.
When compared to March 31 of last year, the major components of the change were the issuance of $600 million of 10-year senior notes due in 2030, which were issued in early April at the outset of the pandemic.
Along with the increase in debt of approximately $80 million resulting from the FX impact of converting our billion-euro denominated borrowings into dollars at the balance sheet date.
Our net debt position as of March 31 was $863 million up about $650 million from last year-end, but down $1.5 billion when compared to Q1 of 2020.
The increase in net debt since year-end was the result of the typical uses of working capital that historically occur which totaled about $840 million and was partially offset by the $210 million we generated in free cash flow during the past three months.
Over the past 12 months, the improvement of net debt is primarily due to our positive free cash flow of $860 million.
Positive changes in operating capital of $537 million and the impact of FX on our cash and debt balances which decreased our net debt position by about $190 million.
As for our debt ratios, our total debt to EBITDA ratio was 3.1 times and our net debt to EBITDA ratio was 0.5 times and finally, moving to our historical returns on Slide 10. | EBIT margin in the first quarter was 13.6% as compared to 12.3% in the first quarter of 2020.
Net income for the quarter was $287.8 million, an improvement of 11.5% from 2020 and earnings per share was $1.33 per share, a year-over-year increase of 11.8%.
As John said, as we move through the first quarter of 2021, we continue to see an improvement in business conditions particularly when compared to the peak of the pandemic during the second quarter of 2020.
The impact on revenue from acquisitions, net of dispositions decreased revenue by 0.4% in line with our previous projection, and as a result our reported revenue in the first quarter increased 0.6% the $3.43 billion when compared to Q1 of 2020.
Returning to slide one, our reported operating profit for the quarter was $465 million, up 10.8% when compared to Q1 of 2020 and operating margin for the quarter improved to 13.6% compared to 12.3% during Q1 of 2020.
As a result, our diluted earnings per share for the first quarter was $1.33 up $0.14 or 11.8% per share when compared to the prior year.
We expect to return to positive organic growth in the second quarter and for the full year. | 0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
Our underlying underwriting income of $572 million pre-tax was up $254 million over the prior-year quarter, benefiting from solid net earned premium and a 3.5 point improvement in the underlying combined ratio to a strong 91.4%.
For us in the quarter, $114 million of direct losses and $63 million of audit premium adjustments were about offset by initial estimates of favorable loss activity, most of which is in short-tail lines.
As I shared last quarter, our high quality surety book was effectively stress tested in the 2008 financial crisis and performed well.
We're very pleased with our production results, excluding the other premium refunds we provided to our customers, net written premiums grew by 2% as the impact of COVID-19 on insurance exposures was more than offset by strong renewal rate change in all three segments.
In Business Insurance, we achieved renewal rate change of 7.4%, the highest level since 2013 and close to the record level we achieved that year.
In Bond & Specialty Insurance, net written premiums increased by 3%, as our domestic management liability business achieved a record renewal rate change while maintaining strong retention.
In Personal Insurance, excluding the auto premium refund, net written premiums increased by 6% driven by strong retention and new business in both Agency Auto and Agency Homeowners.
In our Agency Homeowners business, renewal premium change remained strong at 7.7% and we hit a record for new business.
And on top of that, the pandemic and related economic fallout, added sense of incremental uncertainty making this feel like one of those times, not unlike in the wake of 9/11 and Hurricane Katrina when the market recalibrates risk.
Our core loss for the second quarter was $50 million compared to core income of $537 million in the prior year quarter.
Our second quarter results include $854 million of pre-tax cat losses compared to only $367 million in last year second quarter.
This quarter's cat's includes severe storms in several regions of the United States as well as $91 million of losses related to civil unrest.
Regarding our property aggregate catastrophe XOL treaty for 2020, as of June 30th, we have accumulated about $1.4 billion of qualifying losses toward the aggregate retention of $1.55 billion.
The treaty provides aggregate coverage of $280 million out of $500 million of losses, above that $1.55 billion retention.
The underlying combined ratio was 91.4%, which excludes the impacts of cats and PYD improved by 3.5 points compared to 94.9% in last year's second quarter.
The underlying loss ratio improved by more than 4 points and benefited from a lower level of non-cat weather losses, favorable frequency in personal auto from the shelter-in-place environment, net of related premium refunds and the impact of earned pricing in excess of loss trend.
The expense ratio of 31% is 0.8 of a point higher than the prior year quarter and above our recent run rate.
The net impact of COVID-19 and its related effects on the economy were modest in terms of our overall second quarter underwriting result.
Our top-line was resilient, excluding the premium refunds in Personal Insurance, net written premiums increased by 2% driven by strong renewal rate change in all three segments that more than offset lower insured exposures.
For example, losses directly related to COVID-19 totaled $114 million, primarily workers' comp in Business Insurance and management liability losses in our Bond & Specialty business.
Taking a step back, on a year-to-date basis, the impact on our results excluding net investment income from COVID-19 and its related effects is a net charge of about $50 million pre-tax.
In Bond & Specialty Insurance, we saw larger losses than expected in management liability, resulting in prior year strengthening of $33 million, largely offsetting the favorable development in Personal Insurance.
After-tax net investment income decreased by 54% from the prior year quarter to $251 million, somewhat better result than we had previewed in our call last quarter.
Fixed income returns decreased by $24 million after tax as the benefit from higher levels of invested assets was more than offset by the decline in interest rates and the mix change, as we chose to maintain a somewhat higher level of liquidity and held more short-term investments than in prior quarters.
For the remainder of 2020, we expect that fixed income NII will decrease by approximately $35 million to $40 million after-tax per quarter compared to the corresponding periods of 2019.
Turning to capital management, Operating cash flows for the quarter of $1.7 billion were again, very strong.
All our capital ratios were at or better than target levels and we ended the quarter with holding company liquidity of slightly more than $2 billion, well above our target level.
Recall that in April, we pre-funded as we normally do, $500 million of debt coming due in November, with the new 30-year $500 million debt issuance at 2.55%.
Investment yields decreased as credit spreads tightened during the second quarter and accordingly, our net unrealized investment gains increased from $1.8 billion after tax as of March 31st, to $3.6 billion after tax at June 30th.
Adjusted book value per share, which excludes net unrealized investment gains and losses was $92.01 at quarter end, down less than 1% from year-end and up 2% year-over-year.
We returned $218 million of capital to our shareholders this quarter via dividends.
In the annual reset for the 2020 hurricane season the attachment point was adjusted from $1.79 billion to $1.87 billion, while the total cost of the program was flat year-over-year.
As for the quarter's results, business Insurance had a loss for the quarter of $58 million due to lower net investment income and higher catastrophe losses, as both Alan and Dan discussed.
The combined ratio of 107.1% included more than 10 points of catastrophes, impacted by both weather related losses and civil unrest.
The underlying combined ratio of 97% improved by 0.4 points, reflecting a 0.2 point improvement in each of the underlying loss ratio and expense ratio.
Turning to the top line, net written premiums were 3% lower than the prior-year quarter due to the impact of the economic disruption on insured exposures.
Turning to domestic production, we achieved strong renewal rate change of 7.4% while retention remained high at 83%.
The renewal rate change of 7.4% was up almost 4 points from the second quarter of last year and more than a point from the first quarter of this year, not withstanding the persistent downward pressure in workers' compensation pricing.
We achieved positive rate at about 80% of our middle market accounts this quarter, which was up from about two-third in the second quarter of last year.
At these rate levels, our rate change continues to exceed loss trend even after about a 0.5 point increase toward loss trend assumption.
New business of $473 million was down 10% from the prior-year quarter.
As for the individual businesses, in Select, renewal rate change was up to 2.1% making the sixth consecutive quarter where renewal rate was higher than the corresponding prior-year quarter while retention was strong at 82%.
In Middle Market renewal rate change was up to 7.9% while retention remained strong at 86%.
The 7.9% was up almost 4.5 points from the second quarter of 2019 and 1.5 points from the first quarter of 2020.
New business of $255 million was down from the prior-year quarter, driven by both economic disruption and our continued focus on disciplined risk selection underwriting and pricing.
Segment income was $72 million, a decrease of $102 million from the prior-year quarter.
As Dan mentioned, the combined ratio of 93.8% reflects unfavorable prior-year reserve development in the quarter as compared to favorable PYD in the prior-year quarter and a higher underlying combined ratios.
The underlying combined ratio of 88.1% increased 7.1 points from the prior-year quarter, primarily driven by the impacts of higher loss estimates for management liability coverages, about half of which was due to COVID-19 and related economic conditions.
Turning to the top line, net written premiums grew 3% for the quarter, reflecting strong growth in our management liability and international businesses, partially offset by lower surety production.
In our domestic management liability business, we are pleased that renewal premium change increased to 7.8%.
As Alan noted, renewal rate change was a record for the quarter, while retention remained at a historically high 89%.
Domestic management liability new business for the quarter decreased $13 million reflecting a disruption associated with COVID-19 and our thoughtful underwriting in this elevated risk environment.
Domestic surety net premium, net written premium was down $24 million in the quarter, reflecting the impact of COVID-19, which slowed public project procurement and related bond demand.
Personal Insurance segment income for the second quarter of 2020 was $10 million down from $88 million in the prior year quarter, driven by a higher level of catastrophe losses and lower net investment income.
Our combined ratio for the quarter was 101.3%, an increase of 1.1 points, and a 12.5 point increase in catastrophe losses was largely offset by a 10.6 point improvement in the underlying combined ratio.
The increase of 2.6 points on the underwriting expense ratio was primarily driven by the reduction in net earned premiums resulting from the auto premium refunds.
Excluding the impact of premium refunds of $216 million, net written premiums grew 6%.
Agency homeowners and other net written premiums were up an impressive 13% and agency automobile net written premiums were up 3% excluding premium refunds.
Agency automobile delivered strong results with a combined ratio of 85.7% for the quarter.
The loss ratio improved over 12 points while the underwriting expense ratio increased by about 4 points.
The underlying combined ratio of 84.2% improved 9.6 points relative to the prior year quarter, continuing to reflect improvements in frequency, primarily due to fewer miles driven as a result of the pandemic.
In the U.S., the program provided a 15% premium refund on April, May and June premiums.
In agency homeowners and other, the second quarter combined ratio was 113.9%, 9.4 points higher than the prior year quarter due primarily to higher catastrophes, partially offset by a lower underlying combined ratio.
This quarter, we experienced significant storm activity, resulting in 34 points of catastrophe losses, an increase of 21 points compared to the prior year quarter where catastrophes were relatively low.
The underlying combined ratio for the quarter was 81.4%, down over 11 points from the prior year quarter, driven primarily by lower non-catastrophe weather-related losses.
Agency automobile retention was 85% and new business increased 7% from the prior year quarter.
Renewal premium change was 1.5% as we continue to moderate pricing given the improved performance in our book over the past few years.
Agency homeowners and other delivered another very strong quarter, with retention of 87%, renewal premium change of 7.7% and a 17% increase in new business as we continue to seek to improve returns while growing the business.
Higher new business levels again benefited from the successful roll out of our Quantum Home 2.0 product, now available in over 40 markets.
We introduced Quantum Home 2.0 in four new states including California.
In addition, we launched IntelliDrive 2.0 which add distracted driving monitoring to our auto telematics product and delivers significant improvements to the user experience.
And after reaching our goal of planting one million trees for customer enrollment in paperless billing, we extended our partnership with American Forests to plant another 500,000 trees by Earth Day 2021.
Finally, I'll remind you that on a year-to-date basis, setting aside net investment income, the impact on our results from COVID-19 and its related effects is a net charge of about $50 million pre-tax. | Our second quarter results include $854 million of pre-tax cat losses compared to only $367 million in last year second quarter.
The underlying combined ratio was 91.4%, which excludes the impacts of cats and PYD improved by 3.5 points compared to 94.9% in last year's second quarter.
The expense ratio of 31% is 0.8 of a point higher than the prior year quarter and above our recent run rate.
The net impact of COVID-19 and its related effects on the economy were modest in terms of our overall second quarter underwriting result.
Adjusted book value per share, which excludes net unrealized investment gains and losses was $92.01 at quarter end, down less than 1% from year-end and up 2% year-over-year. | 0
0
0
0
0
0
0
0
0
0
1
0
0
0
1
0
1
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
We now expect to achieve ROE in the range of 16% to 17% this year, above our long-term target of 15%.
Our year-to-date free cash flow is $602 million, down $10 million from the prior year as higher vehicle capital spending was largely offset by higher proceeds from the sale of used vehicles and property.
We're increasing our full-year free cash flow forecast to $650 million to $750 million, up from $400 million to $700 million, primarily to reflect the anticipated impact from delays for new vehicle deliveries from the OEMs. We're encouraged by our performance and by the market trends we're seeing in the areas that we're investing for future growth.
RyderVentures, our corporate venture capital fund, aims to invest $50 million over the next five years through direct investment in start-ups, primarily where we can partner to develop new products and services for our customers.
We're enhancing RyderView's capabilities and plan to launch Version 2.0 later this year.
We're also rolling out a customer experience that is branded for our customers, the retailer so that RyderView 2.0 serves as an extension of their brand.
We're confident that RyderView 2.0 will be a market differentiator that will enhance the customer experience and propel further profitable growth for Ryder Last Mile.
Operating revenue of $1.9 billion in the second quarter increased 18% from the prior year, reflecting double-digit revenue growth across all three of our business segments.
Comparable earnings per share from continuing operations was $2.40 in the second quarter as compared to a loss of $0.95 in the prior year.
Year-to-date free cash flow was $602 million below prior year as planned.
Fleet Management Solutions operating revenue increased 14%, primarily reflecting higher rental and lease revenue.
Rental revenue increased 58%, driven by higher demand and pricing.
Rental pricing increased by 13%, which is significantly higher than we've seen historically, reflecting pricing actions taken over the past year, prior year COVID effects, and a larger mix of higher-return pure rental business in the current quarter.
ChoiceLease revenue increased 5%, reflecting higher pricing and miles driven, partially offset by smaller fleet.
FMS realized pre-tax earnings of $158 million are up by $262 million from the prior year.
$131 million of this improvement resulted from lower depreciation expense related to the prior residual value estimate changes and higher used vehicle sales results.
Rental utilization on the power fleet was 80% in the quarter, significantly above the prior-year 56%, which included COVID impact, and was close to historical second quarter high.
FMS EBT as a percentage of operating revenue was 12.9% in the second quarter and surpassed the company's long-term target of high single digits.
For the trailing 12-month period, it was 6.3%, primarily reflecting higher depreciation expense from prior residual value estimate changes.
Globally, year-over-year proceeds were up 73% for tractors and 72% for trucks.
Sequentially, tractor proceeds were up 22% and truck proceeds were up 27% versus the first quarter.
As you may recall, in the second quarter of last year, we provided a sensitivity noting that a 10% price increase for trucks and a 30% price increase for tractors in the U.S. would be needed by 2022 in order to maintain current policy depreciation residual estimates.
Since the second quarter 2020, U.S. truck proceeds were up 59% and tractor proceeds were up 67%.
During the quarter, we sold 6,000 used vehicles, down 5% versus the prior year, reflecting lower trailer sales.
Used vehicle inventory held for sale was 4,300 vehicles at quarter-end and is below our target range of 7,000 to 9,000 vehicles.
Inventory is down by 9,700 vehicles from the prior year and down by 1,900 vehicles sequentially.
Operating revenue versus the prior year increased 32% due to new business and increased volumes and COVID effects in the prior year.
SCS pre-tax earnings increased 11%, benefiting from revenue growth, partially offset by strategic investments in marketing and technology as well as increased incentive compensation and medical costs.
SCS EBT as a percent of operating revenue was 7.7% for the quarter and below the company's long-term target of high-single digits.
However, it was 8.2% for the trailing 12-month period, in line with our long-term target of high single digits.
Moving to dedicated on Page 11.
Operating revenue increased 12% due to new business and higher volumes.
DTS earnings before tax decreased 38%, reflecting increased labor costs, higher insurance expense, and strategic investments.
DTS EBT as a percentage of operating revenue was 5.1% for the quarter.
It was 6.9% for the trailing 12-month period, below our high single-digit target.
Lease capital spending of $501 million was above prior year as planned due to increased lease sales activity.
Rental capital spending of $397 million increased significantly year-over-year, reflecting higher planned investment in the rental fleet.
We plan to grow the rental fleet by approximately 13% in 2021, mostly in light- and medium-duty vehicles in order to capture increased demand expected from strong e-commerce and free-market activity.
Our full-year 2021 forecast for gross capital expenditures of $2.2 billion to $2.3 billion is at the high end of our initial forecast range and is shown in the chart at the bottom of the page.
Our 2021 free cash flow forecast has increased to a range of $650 million to $750 million from our previous forecast of $400 million to $700 million.
Balance sheet leverage this year is expected to finish below 250%, which is the bottom end of our target range.
Importantly, as Robert mentioned, we now expect to achieve ROE of 16% to 17% this year, with a declining depreciation impact and a stronger-than-expected recovery in the used vehicle sales market.
Turning now to our earnings per share outlook on Page 14.
We're raising our full-year comparable earnings per share forecast to $720 million to $750 million from a prior forecast of $550 to $590 and well above a loss of $0.27 in the prior year, which included COVID effects.
We're also providing a third-quarter comparable earnings per share forecast of $1.95 to $2.05, significantly above our prior year of $1.21.
We're forecasting quarterly gains around $35 million for the balance of the year, reflecting higher pricing, partially offset by fewer vehicles sold due to low inventory levels.
In FMS, the depreciation impact from prior residual value estimate changes is expected to continue to decline, resulting in a year-over-year benefit of approximately $40 million in the third quarter of 2021.
In supply chain and dedicated, we're on track to meet or exceed our high single-digit revenue growth targets.
Our multi-year maintenance cost initiative delivered more than $50 million in annual savings through the end of last year, and we are on track to achieve an additional $30 million in savings in 2021.
Substantially, all leases, with the exception of those signed in 2013, are expected to perform above our target return.
The leases signed in 2013 represent only 8% of our lease fleet.
Although we are encouraged that we expect to exceed our target ROE of 15% in 2021, we remain focused on taking action -- additional actions to position our business to generate long-term returns of 15% ROE over the cycle.
As a reminder, in recent years, we significantly lowered the residual value estimates for our entire fleet to a level where used tractor prices have only been below these estimates in four of the last 21 years.
We expect these changes will increase depreciation expense in 2021 by $18 million, representing approximately 1% of total depreciation expense for the year. | Comparable earnings per share from continuing operations was $2.40 in the second quarter as compared to a loss of $0.95 in the prior year.
Our full-year 2021 forecast for gross capital expenditures of $2.2 billion to $2.3 billion is at the high end of our initial forecast range and is shown in the chart at the bottom of the page.
We're also providing a third-quarter comparable earnings per share forecast of $1.95 to $2.05, significantly above our prior year of $1.21.
In supply chain and dedicated, we're on track to meet or exceed our high single-digit revenue growth targets.
Substantially, all leases, with the exception of those signed in 2013, are expected to perform above our target return. | 0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
1
0
0
1
0
1
0
0
0
0 |
With our full year coming into better view, we are poised for continued returns-focused growth expanding our scale to about $6 billion in revenues and generating a return on equity of roughly 20%.
As for the details of the quarter, we produced total revenues of $1.44 billion and diluted earnings per share of $1.50.
We achieved an operating income margin of 11.3% driven by several factors.
Our profitability per unit grew meaningfully on a sequential basis to nearly $47,000.
With the progression of our work in process and our success in accelerating starts, we are confident in our ability to achieve full-year deliveries of between 14,000 and 14,500 homes.
We recently completed a $390 million debt offering, the net proceeds from which together with a portion of our existing cash will be used to retire our '21 maturity in full.
In the second quarter, we invested $575 million in land acquisition and development, expanding our lot position sequentially by 7,800 lots to roughly 77,500 lots owned or controlled with 45% of the total optioned.
In addition, we are pursuing moderately sized deals in our preferred submarkets averaging between 100 and 150 lots and staying on strategy and positioning these new communities to be attainable near the median household income for that sub-market.
Along with our success in Seattle and recent reentry into Charlotte, we are announcing today that we have started up a division in Boise, Idaho, a top 25 housing market.
We now have over 900 lots under control and anticipate our first land parcel closing in the third quarter.
We successfully opened 33 new communities in the second quarter.
And although it operates at a higher ASP, it is still below the median resale price of homes in its submarkets which are as much as $100,000 higher and selling within a few weeks of being listed.
Although we offer floor plans below 1,600 square feet in over 75% of our communities, buyers are still selecting homes averaging 2,100 feet, which is consistent with their choices over the past couple of years.
The first is an acute shortage of supply stemming not only from limited resale inventory, but also from the under production of new homes over the past 15 years.
These demographic groups value personalization and we believe we are well positioned to capture increases in home sales given our expertise in serving the first-time buyer which represents 64% of our deliveries this past quarter with our built-to-order approach.
Net orders were 4,300, our best second quarter since 2007 with strength throughout the quarter resulting in year-over-year growth of 145%.
We are matching starts to sales and in the first half of this year we have quickly scaled up our production to start over 8,500 homes.
To put this in context, the homes we started in the past two quarters represent about 75% of the total homes we started for the full year 2020.
Almost 95% of the homes in production are already sold and we remain committed to our built-to-order business model.
Nearly 80% of our orders in the second quarter were for personalized homes, which also creates an additional revenue stream from our design studios and with lot premiums.
Our studio revenue per unit rose sequentially in the second quarter and is continuing to average about 9% of our higher base prices.
Between studio revenue and lot premiums, we are averaging about $40,000 per home today and believe there is opportunity to continue to grow this going forward.
We ended the quarter with a robust backlog value of $4.3 billion, up 126% year-over-year representing over 10,000 homes.
KBHS Home Loans, our mortgage joint venture, continued to be a solid partner for our customers handling the financing for 75% of the homes we delivered in the second quarter.
These buyers have a strong and consistent credit profile with an average down payment of about 13% or over $50,000 and an average FICO score that inched up to 727.
We've been on this journey for over 15 years.
We have built over 150,000 ENERGY STAR certified homes to-date, more than any other builder, and have the lowest published average Home Energy Rating System, or HERS, index score among production homebuilders.
And we're striving to be even better with an aggressive goal to further improve our average HERS score from 50 down to 45 by 2025, a level which translates into an additional estimated reduction in a KB Home's carbon emission of about 8% per year.
With our operations performing well, we leveraged 58% growth in housing revenues to generate a 216% increase in operating income for the quarter.
In addition, our net orders reached their highest second-quarter level in 14 years.
Our housing revenues of $1.44 billion for the quarter increased from $910 million in the prior-year period, reflecting a 40% increase in homes delivered and a 13% increase in overall average selling price.
Considering our current backlog and construction cycle times, we anticipate our 2021 third quarter housing revenues will be in a range of $1.5 billion to $1.58 billion.
For the full year, we are projecting housing revenues in the range of $5.9 billion to $6.1 billion.
We believe we are very well positioned to achieve this top line performance due to our strong second quarter net orders and ending backlog of over 10,000 homes, representing nearly $4.3 billion in ending backlog value.
In the second quarter, our overall average selling price of homes delivered increased to nearly $410,000, reflecting strong housing market conditions, which enabled us to raise prices in the vast majority of our communities, as well as product and geographic mix shifts of homes delivered.
For the 2021 third quarter we are projecting an overall average selling price of $420,000.
We believe our ASP for the full year will be in a range of $415,000 to $425,000.
Homebuilding operating income significantly improved to $162.9 million as compared to $51.6 million in the year-earlier quarter, reflecting an increase of 560 basis points in operating income margin to 11.3% due to meaningful improvements in both our housing gross profit margin and SG&A expense ratio.
Excluding inventory related charges of $0.5 million in the current quarter and $4.4 million of inventory-related charges and $6.7 million of severance charges in the year-earlier quarter, this metric improved to 11.4% from 6.9%.
We expect our homebuilding operating income margin, excluding the impact of any inventory-related charges, to further improve to a range of 11.7% to 12.1% for the 2021 third quarter.
For the full year, we expect our operating margin, excluding any inventory-related charges, to be in the range of 11.5% to 12%.
Our housing gross profit margin for the second quarter expanded to 21.4%, up 320 basis points from the prior-year period.
Excluding inventory related charges, our gross margin for the quarter increased to 21.5% from 18.7% for the prior-year period.
Our adjusted housing gross profit margin, which excludes inventory-related charges as well as the amortization of previously capitalized interest, was 24.2% for the 2021 second quarter compared to 21.9% for the same 2020 period.
Assuming no inventory-related charges, we expect a sequential increase in our 2021 third quarter housing gross profit margin to approximately 21.7% and further improvement in the fourth quarter.
Considering this expected favorable trend, we believe our full year housing gross profit margin, excluding inventory-related charges, will be within the range of 21.5% to 22% representing a 215 basis point year-over-year increase at the midpoint.
Our selling, general and administrative expense ratio of 10.1% for the quarter improved from 12.6% for the 2020 second quarter.
The 250 basis point improvement reflected the continued benefit of overhead cost reductions implemented last year in the early stages of the pandemic, increased operating leverage from higher revenues and the severance charges in the year-earlier quarter.
Considering anticipated increases in future revenues and our continuing actions to contain costs, we believe that our 2021 third quarter SG&A expense ratio will be approximately 9.8% and our full year ratio will be in a range of 9.8% to 10.2%.
Our income tax expense for the quarter of $30.3 million, which represented an effective tax rate of 17%, reflected the favorable impact of $14.8 million of federal energy tax credits recorded in the quarter relating to qualifying energy-efficient homes.
We expect our effective tax rate for the full year to be approximately 20%, including the expected favorable impact of additional federal energy tax credits in the third and fourth quarters.
Overall, we produced net income for the second quarter of $143.4 million or $1.50 per diluted share compared to $52 million or $0.55 per diluted share for the prior-year period.
Turning now to community count, our second quarter average of 205 communities decreased 17% from the year-earlier quarter.
We ended the quarter with 200 communities as compared to 244 communities at the end of the 2020 second quarter.
On a sequential basis, our average community count decreased 8% from the first quarter and ending community count was down 4%.
The decreases were due to our strong absorption pace of seven monthly net orders per community during the quarter, which show 42 close-outs as well as community openings that were delayed to the third quarter.
Over the past 12 months our robust absorption pace has driven the close-out of over 150 selling communities.
Although they will not generate additional net orders, we will continue to produce revenues and profit in future quarters associated with nearly 80% of these sold-out communities as we work through the construction and delivery of the sold homes.
We anticipate our 2021 third quarter ending community count will increase sequentially by approximately 5%, followed by another modest sequential improvement in the fourth quarter.
Favorable operating cash flow in the quarter generated primarily from homes delivered net of higher levels of land investment resulted in quarter and total liquidity of approximately $1.4 billion including $608 million of cash and $788 million available under our unsecured revolving credit facility.
Earlier this month, we completed the $390 million issuance of 4% 10-year senior notes and used a portion of the proceeds to redeem approximately $270 million of tendered 7% notes that mature on December 15, 2021.
We expect to realize a charge of approximately $5 million for this early extinguishment of debt in the third quarter.
It is our intention to redeem the remaining $180 million of the 7% notes at par value on September 15.
Once completed, this redemption, partially offset by the new issuance, will result in a net $16 million reduction in debt and an annualized interest savings of nearly $16 million, contributing to our continuing trend of lowering the interest amortization included in future housing gross profit margins.
In addition, we believe the $350 million of our maturity in 2022 of 7.5% senior notes represents another opportunity to reduce incurred interest and enhanced future gross margins.
In summary, given the size and composition of our quarter-end backlog of over 10,000 homes, along with our expanded production capacity, we expect further improvement in our financial results and return metrics in 2021 as compared to our expectations at the time of our last earnings call.
Using the midpoints of our new guidance ranges, we now expect a 45% year-over-year increase in housing revenues and further expansion in our operating margin to 11.75%.
This profitability level should drive a return on average equity of approximately 20% for the full year. | As for the details of the quarter, we produced total revenues of $1.44 billion and diluted earnings per share of $1.50.
Net orders were 4,300, our best second quarter since 2007 with strength throughout the quarter resulting in year-over-year growth of 145%.
Our housing revenues of $1.44 billion for the quarter increased from $910 million in the prior-year period, reflecting a 40% increase in homes delivered and a 13% increase in overall average selling price.
Overall, we produced net income for the second quarter of $143.4 million or $1.50 per diluted share compared to $52 million or $0.55 per diluted share for the prior-year period. | 0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
As to the details of the quarter, we generated total revenues of $1.14 billion and diluted earnings per share of $1.02, up 62% year-over-year.
Texas is our largest market by units and the severe weather shut down our operations for roughly 10 days in mid-February.
Our profitability was substantially higher year-over-year with a more than 400 basis point increase in our operating income margin to 10.4%, excluding inventory-related charges.
Our profitability per unit grew meaningfully to over $41,000 in the first quarter, 73% higher than in the prior-year period.
In the first quarter, we increased our land investments by 37% year-over-year to roughly $560 million.
We grew our lot position by approximately 3,000 lots since year-end to nearly 70,000 lots owned and controlled and maintained our option lots at 40% of our total.
This division has increased its annual deliveries by almost 50% in the last three years and has achieved the number one ranking in the market.
In the first quarter, we successfully opened 22 new communities out of the approximately 150 openings we anticipate for this year.
We remain well positioned to extend this growth into 2022 and still expect year-over-year community count expansion of at least 10% next year.
Our monthly absorption per community accelerated to 6.4 net orders during the first quarter, a year-over-year gain of 39%.
Municipalities have increased our capacity for processing permits, heightening our ability to accelerate our starts, which were up 40% year-over-year in the first quarter.
We offer floor plans below 1,600 square feet in approximately 75% of our communities.
However, the median square footage of our homes in backlog is almost 2,100 square feet which is consistent with the median footage of homes we delivered in 2020.
As to overall market conditions, supply remains tight with existing home inventory down nearly 30% year-over-year.
In terms of demand, mortgage rates while higher relative to where they were in January, are down year-over-year and remain attractive generally around the low 3% range for a 30-year fixed-rate mortgage.
Most notably, demographic trends are favorable especially with respect to first-time buyers as over 70 million millennials are in their prime homebuying years with an even larger Gen Z cohort right behind them now entering their homebuying age.
Net orders in the first quarter grew 23% year-over-year to nearly 4,300, a solid result given the strength in net orders that we experienced in the prior year's first quarter.
The increasing presence of this cohort in our order activity is naturally translating into a higher percentage of deliveries to first-time buyers at 65% of our deliveries in the first quarter up 11 percentage points year-over-year.
We lead the industry in building ENERGY STAR certified new homes having delivered more than 150,000 of these homes to date as well as over 11,000 solar-powered homes.
Our backlog value grew substantially in the first quarter to $3.7 billion.
The 9,200 homes we have in backlog together with our first-quarter deliveries represent about 85% of the deliveries that were implied in our full year outlook we provided in January.
Our JV handled the financing for 79% of our deliveries in the first quarter, up 8 percentage points year-over-year, producing a significant increase in its income.
Consistent with the past few years, conventional loans represented the majority of KBHS volume and the credit profile of our buyers remained very healthy with an average down payment of about 13% and an average FICO score of 724 which is striking considering our high percentage of first-time buyers.
We are positioned for remarkable 2021 and achieving our objectives of expanding our scale and improving our profitability while driving a meaningfully higher return on equity which we now anticipate will be above 18%.
We are very pleased with our first quarter results with higher housing revenues and considerable expansion in our operating margin driving a 62% increase in our diluted earnings per share.
In addition, strong net orders in the quarter combined with our substantial beginning backlog resulted in a 74% year-over-year increase in our quarter-end backlog value supporting our raised revenue and margin outlook for 2021.
In the first quarter our housing revenues of $1.14 billion rose 6% from a year ago, reflecting increases in both homes delivered and the overall average selling price of those homes.
Looking ahead to the 2021 second quarter, we expect to generate housing revenues in the range of $1.42 billion to $1.5 billion.
For the full year, we are forecasting housing revenues in the range of $5.7 billion to $6.1 billion, up $150 million at the midpoint, as compared to our prior guidance.
We believe we are well positioned to achieve this top line performance supported by our first quarter ending backlog value of approximately $3.7 billion and our expectation of continued strong housing market conditions.
In the first quarter, our overall average selling price of homes delivered increased 2% year-over-year to approximately $397,000 reflecting variances ranging from a 5% decline in our West Coast region to an 11% increase in our Southwest region.
For the 2021 second quarter we are projecting an average selling price of approximately $405,000.
We believe our overall average selling price for the full year will be in the range of $405,000 to $415,000, a relatively modest year-over-year increase and a result of our focus on offering affordable product across our footprint.
Homebuilding operating income for the first quarter increased 90% to $114.1 million from $60.2 million for the year-earlier quarter.
The current quarter included inventory related charges of $4.1 million versus $5.7 million a year ago.
Our homebuilding operating income margin improved to 10% compared to 5.6% for the 2020 first quarter.
Excluding inventory related charges, our operating margin for the current quarter increased 430 basis points year-over-year to 10.4%, reflecting improvements in both our gross margin and SG&A expense ratio which I will cover in more detail in a moment.
For the 2021 second quarter, we anticipate our homebuilding operating income margin, excluding the impact of any inventory related charges, will be in a range of 10% to 10.5%.
For the full year, we expect this metric to be in a range of 11% to 11.8%, which represents an improvement of 310 basis points at the midpoint, as compared to the prior year.
Our 2021 first quarter housing gross profit margin improved 340 basis points to 20.8%.
Excluding inventory related charges, our gross margin for the quarter increased to 21.1% from 17.9% for the prior-year quarter.
Assuming no inventory related charges, we are forecasting a housing gross profit margin for the 2021 second quarter in a range of 20.5% to 21.1%.
We expect our full year gross margin, excluding inventory related charges, to be in a range of 21% to 22%, an improvement of 70 basis points at the midpoint compared to our prior guidance and up 190 basis points year-over-year.
Our selling, general and administrative expense ratio of 10.7% for the first quarter reflected an improvement of 110 basis points from a year ago, mainly due to the continued containment of costs following overhead reductions implemented in the early stages of the COVID-19 pandemic, lower advertising costs and increased operating leverage from higher housing revenues.
We are forecasting our 2021 second quarter SG&A ratio to be in a range of 10.4% to 10.8%, a significant improvement compared to the pandemic impacted prior-year period as we expect to realize favorable leverage impacts from an anticipated increase in housing revenues.
We still expect that our full year SG&A expense ratio will be approximately 9.9% to 10.3%, which represents an improvement of 120 basis points at the midpoint compared to the prior year.
Our income tax expense of $26.5 million for the first quarter represented an effective tax rate of approximately 21% and was favorably impacted by excess tax benefits from stock-based compensation and federal tax credits relating to current-year deliveries of energy-efficient homes, the cornerstone of our industry-leading sustainability program.
We currently expect our effective tax rate for both the 2021 second quarter and full year to be approximately 24%, including the impact of energy tax credits relating to current-year deliveries.
Overall, we reported net income of $97.1 million or $1.02 per diluted share for the first quarter compared to $59.7 million or $0.63 per diluted share for the prior-year period.
Our first-quarter average of 223 was down 11% from the corresponding 2020 quarter primarily due to strong net order activity driving accelerated community close-outs over the past 12 months.
Consistent with our forecast, we ended the quarter with 209 communities, down 16% from a year ago.
While we expect this dynamic to result in a sequential increase of five to 10 communities by the end of the second quarter, we anticipate our second-quarter average community count will be down by a low to mid double-digit percentage on a year-over-year basis.
Given our land pipeline and current schedule of community openings, we are confident that we will achieve at least a 10% increase in our 2022 community count to support further market share gains and growth in housing revenues.
During the first quarter to drive future community openings, we invested $556 million in land and land development including a 43% year-over-year increase in land acquisition investments to $275 million.
At quarter-end total liquidity was approximately $1.4 billion, including $788 million of available capacity under our unsecured revolving credit facility.
Our debt-to-capital ratio was 38.9% at quarter-end and we expect continued improvement through the end of the year.
In summary, using the midpoints of our new guidance ranges, we expect a 42% year-over-year increase in housing revenues and significant expansion of our operating margin to 11.4% driven by improvements in both gross margin and our SG&A expense ratio.
In addition, achieving our new revenue and profitability expectations would drive a return on equity of over 18% for the year. | As to the details of the quarter, we generated total revenues of $1.14 billion and diluted earnings per share of $1.02, up 62% year-over-year.
Net orders in the first quarter grew 23% year-over-year to nearly 4,300, a solid result given the strength in net orders that we experienced in the prior year's first quarter.
In addition, strong net orders in the quarter combined with our substantial beginning backlog resulted in a 74% year-over-year increase in our quarter-end backlog value supporting our raised revenue and margin outlook for 2021.
In the first quarter our housing revenues of $1.14 billion rose 6% from a year ago, reflecting increases in both homes delivered and the overall average selling price of those homes.
Overall, we reported net income of $97.1 million or $1.02 per diluted share for the first quarter compared to $59.7 million or $0.63 per diluted share for the prior-year period. | 1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0 |
I want to begin my remarks by highlighting an exciting milestone, we took past 15% of our patients dialyzing at home.
This means that approximately 30,000 of our patients receive the clinical and lifestyle benefits of home dialysis.
Our current network of centers provides that easy access such that 80% of our dialysis patients live within 10 miles of a DaVita home center.
On to our Q3 results.
Q3 operating income grew approximately 9% year-over-year, and adjusted earnings per share grew by more than 31% over the same period However, the ongoing COVID pandemic continues to take its toll on too many human lives in the world at large, and among our patients.
Incremental mortality increased from fewer than 500 in Q2 to approximately 2000 in Q3.
After quarter end, COVID infections continue to decline, with our new case count during the week ending October 16 down by approximately 60%, relative to the recent Delta peak.
Switching to vaccines, approximately 73% of our patients have now been vaccinated.
At the end of Q3, we now have over 22,000 patients in some form of integrated care arrangements, representing 1.7 billion of value-based care contracts.
Operating income was $475 million and earnings per share was $2.36.
Our Q3 results include a net COVID headwind of approximately $55 million, an increase relative to the quarterly impact that we experienced in the first half of the year.
As Javier mentioned, the latest COVID surge resulted in excess mortality in the quarter of approximately 2000 compared to fewer than 500 in Q2.
Our current view of the OI impact of COVID for the year is worse by approximately $40 million compared to our expectations from last quarter.
For 2021, we now expect a total net COVID impact of approximately $210 million.
Treatments per day were down by 536 or 0.6% in Q3 compared to q2.
In addition, the quarter had a higher ratio of Tuesdays, Thursdays and Saturdays, which lowered treatments per day for the quarter by approximately 300.
Revenue per treatment was essentially flat quarter-over-quarter, patient care cost per treatment was up approximately $5 quarter-over-quarter, primarily due to higher teammate compensation and benefit expenses.
Other loss for the quarter was 7.6 million, primarily due to a $9 million decline in the mark to market of our investment in Miromatrix.
The value of this investment at quarter end was $14 million.
Now that we've seen the impact of the Delta surge, we are increasing our estimate of COVID impact for the year by $40 million.
Given where we are in the year, we are now incorporating this COVID impact into our revised adjusted OI guidance of $1.76 billion to $1.81 billion.
We are also narrowing our guidance for adjusted earnings per share to $8.80 to $9.15 per share.
And we are maintaining our free cash flow guidance of $1 billion to $1.2 billion, although there is some chance that our free cash flow may fall below the bottom end of the range, depending on the timing of our DSO recovery.
Our guidance anticipates Q4 operating income to be negatively impacted by approximately $75 million of seasonally high or one-time items, including certain compensation expenses, elevated training costs, higher health benefit expenses, and G&A.
We anticipate a year-over-year incremental investment in the range of $15 million as we continue to grow our ITC business.
And we will also begin depreciating our new clinical IP platform, which we expect to be approximately $40 million.
We are anticipating the end of the temporary sequestration suspension, which would be a $70 million headwind for the full year.
Our current estimate is a net headwind of $50 million to $75 million.
While the range of potential outcomes for 2022 is broad, a reasonable scenario could result in an OI decline of $150 million from our 2021 guidance.
Finally, during the third quarter, we repurchase 2.7 million shares of our stock and in October to date, we repurchased an additional 1.2 million shares. | On to our Q3 results.
Operating income was $475 million and earnings per share was $2.36.
We are also narrowing our guidance for adjusted earnings per share to $8.80 to $9.15 per share. | 0
0
0
1
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0 |
Subscription revenues were up 31%.
Subscription billings were up 30%.
Operating margin was 25%.
And the number of deals greater than $1 million was 51, up 28% year over year.
Free cash flow for the first half of the year was up 34% year over year.
The global economy is recovering at the fastest pace in 80 years.
Every 30 million parts are processed daily and are dispatched to more than 4,000 supplier locations to production centers in Europe and Mexico.
ServiceNow analyzes 300,000 data points per month, optimizing the performance of each aspect of the value chain.
ITSM was in 16 of our top 20 deals, with 14 deals over $1 million.
ITOM was in 15 of our top 20 deals, with six deals over $1 million.
Employee Workflows were in 13 of our top 20 deals, with six deals over $1 million.
Customer Workflows were in 10 of our top 20 deals, with four deals over $1 million.
We now have over 2,000 customers running customer service management.
IDC predicts that more than 500 million apps will be developed by 2023.
This is equivalent to the total number of apps that were developed in the past 40 years.
Manufacturing transportation incidents have dropped 20%.
In Q2, Creator Workflows were in 18 of our top 20 deals.
Also in our partner ecosystem, we recently announced our integration with Microsoft Windows 365.
Q2 subscription revenues were $1.33 billion, $35 million above the high end of our guidance range and growing 31% year over year, inclusive of a 450-basis-point tailwind from FX.
Remaining performance obligations, or RPO, ended the quarter at approximately $9.5 billion, representing 35% year-over-year growth.
Current RPO was approximately $4.7 billion, representing 34% year-over-year growth and a four-point beat versus our guidance.
Currency was a 300 basis point tailwind year over year.
Q2 subscription billings were $1.328 billion, representing 30% year-over-year growth and a $73 million beat versus the high end of our guidance.
The Now Platform remains a mission-critical part of our customers' operations, reflected by our strong 97% renewal rate.
As of the end of Q2, we had 1,201 customers paying us over $1 million in ACV, up 25% year over year.
This included 62 customers paying us over $10 million in ACV.
Overall, we closed 51 deals greater than $1 million net new ACV in the quarter.
We're also seeing robust net new ACV growth from new customers, with the average deal size growing over 50% year over year.
In Q2, 18 of our top 20 deals included three or more products.
Operating margin was 25%, three points above our guidance, driven by the strong revenue beat, cost savings and some marketing spend that was pushed into the second half of the year.
Our free cash flow margin was 19%.
Our Knowledge 2021 event in May included two amazing weeks of keynotes, panels and discussions that brought together experts and thought leaders of every industry across 141 countries to focus on these topics.
The pipeline generated per attending account was up 45% year over year.
We are raising our subscription revenue outlook by $73 million at the midpoint to a range of $5.53 billion to $5.54 billion, representing 29% year-over-year growth, including 250 basis points of FX tailwind.
We are raising our subscription billings outlook by $123 million at the midpoint to a range of $6.315 billion to $6.325 billion, representing 27% year-over-year growth.
Excluding the early customer payments in 2020, our normalized subscription billings growth outlook for the year would be 31% at the midpoint.
Growth includes the net tailwinds in FX and duration of 200 basis points.
We continue to expect 2021 subscription gross margin at 85%, and we are raising our full-year 2021 operating margin from 23.5% to 24.5%.
We are raising our full-year 2021 free cash flow margin by one point from 30% to 31%.
I'd note that from a seasonality perspective, we're expecting 40% of our total free cash flow in Q4.
And lastly, we expect diluted weighted average outstanding shares of 202 million.
For Q3, we expect subscription revenues between $1.4 billion and $1.405 billion, representing 28% to 29% year-over-year growth, including the 150-basis-point FX tailwind.
We expect CRPO growth of 30% year over year, including 150-basis-point FX tailwind.
We expect subscription billings between $1.32 billion and $1.325 billion, representing 22% to 23% year-over-year growth.
Growth includes a net tailwind from FX and duration of 50 basis points.
On that basis, our Q3 subscription billings guidance would represent 31% year-over-year growth.
We expect an operating margin of 23%.
There's 202 million diluted weighted outstanding shares for the quarter.
We are the platform company for digital business, and we are well on our way to becoming a $15 billion revenue company. | On that basis, our Q3 subscription billings guidance would represent 31% year-over-year growth. | 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0 |
We've certified over 25,000 professionals to serve the complex tax and financial needs of small business owners.
These efforts are paying off as we grew third-quarter revenue over 30% at Wave, continuing on the path toward pre-pandemic levels.
As a result, we reported revenue of $308 million for our third quarter, a decline of 41%.
This was primarily related to the delayed return volume, while approximately $69 million was due to the deferral of tax prep fees and the delayed recognition of refund transfer fees to Q4.
Partially offsetting this decline was continued strong performance at Wave, where we posted an increase of over 30% for the second consecutive quarter.
Total operating expenses decreased 15% to $572 million.
Interest expense declined $4 million, which reflects lower draws on our line of credit, as well as a lower interest rate on our debt issuance earlier in the fiscal year.
The changes in revenue and expenses resulted in pre-tax loss from continuing operations of $284 million.
GAAP loss per share increased from $0.66 to $1.27, while adjusted loss per share increased from $0.59 to $1.17.
Turning to our outlook for the fiscal year.
Based on these expectations and the positive trends Jeff mentioned earlier, we continue to expect revenue in the range of $3.5 billion to $3.6 billion and EBITDA of $950 million to $1 billion.
We have identified additional favorability in corporate taxes and, as such, now expect our effective tax rate to come in at the low end of our 18% to 20% outlook range.
All in, these costs total approximately $20 million to $25 million in fiscal '21.
The health of our business and our outlook for the future have allowed us to increase the dividend in four of the last five years, amounting to a total increase of 30% during that span.
This fiscal year, we have repurchased 5% of shares outstanding.
And during my tenure as CFO, we have repurchased 19% of shares outstanding.
The dedication and resolve they've shown over the past 12 months are truly remarkable. | As a result, we reported revenue of $308 million for our third quarter, a decline of 41%.
GAAP loss per share increased from $0.66 to $1.27, while adjusted loss per share increased from $0.59 to $1.17.
Turning to our outlook for the fiscal year. | 0
0
1
0
0
0
0
0
1
1
0
0
0
0
0
0
0 |
These strengths were evident in our third quarter results with revenue up 8%, gross margin up 310 basis points to a record 51% and solid adjusted earnings per share performance at $0.31.
Let's turn next to our regions, starting with North America, where revenue was up 8% to $1 billion, indicative of improving brand health in our largest market, we had stronger-than-expected back-to-school and direct-to-consumer demand.
Compared to 2019, North American revenue was up 2% in the third quarter.
Revenue in our Asia Pacific region was up 19%, driven primarily by wholesale growth.
We attribute this to the investments we're making into marketing, CRM and store expansions, including opening our 1,000th store in the region.
Versus 2019, third quarter APAC revenue was up 37%, so solid progress on a two year stack.
Next up is EMEA, where revenue was up 15%, driven by wholesale, which saw continued momentum from our distributor partnerships and a solid direct-to-consumer performance.
Versus 2019, third quarter revenue in EMEA was up 50%.
And finally, our Latin America region was up 27%, driven by strength in our full-price wholesale and distributor businesses.
Versus 2019, third quarter revenue in Latin America was up 8%.
Another highlight is the performance of our direct-to-consumer business, which was up 12%.
Versus 2019, direct-to-consumer was up 31% for the third quarter.
Compared to the prior year, revenue was up 8% to $1.5 billion.
Third quarter wholesale revenue was up 10%, driven by higher-than-expected demand in our full-price business, particularly in North American wholesale, which was tempered by a reduction in sales to the off-price channel as we continue to work to elevate our brand positioning.
Our direct-to-consumer business increased 12%, led by 21% growth in our owned and operated retail stores, partially offset by a 4% decline in e-commerce, which faced a difficult comparison to last year's third quarter.
But I would also note that when compared to the third quarter of 2019, our e-commerce business was up over 50%.
And licensing revenue was up 24%, driven by improving strength within our North American partner businesses.
By product type, apparel revenue was up 14% with strength across all categories, particularly in train and golf.
Footwear was up 10%, driven primarily by strength in running.
And our accessories business was down 13% due to lower sales of our sports masks compared to last year's third quarter.
Relative to gross margin, our third quarter improved 310 basis points over last year, landing at 51%.
This expansion was driven by 400 basis points of pricing improvements due primarily to lower promotional activity within our DTC channel, along with lower promotions and markdowns within our wholesale business and 120 basis points of benefit due to channel mix, primarily related to lower mix of off-price sales versus last year's third quarter.
Partially offsetting these improvements was about 100 basis points of negative impact related to the absence of MyFitnessPal and 90 basis points of negative impacts from higher freight and logistics costs due to COVID-related supply chain pressures.
SG&A expenses were up 8% to $599 million due to increased marketing investments, incentive compensation and nonsalaried workforce wages.
Relative to our 2020 restructuring plan, we recorded $17 million of charges in the third quarter.
So we now expect to recognize total planned charges ranging from $525 million to $575 million.
Thus far, we've realized $500 million of pre-tax restructuring and related charges.
Our third quarter operating income was $172 million.
Excluding restructuring and impairment charges, adjusted operating income was $189 million.
After tax, we realized a net income of $113 million or $0.24 of diluted earnings per share during the quarter.
Excluding restructuring charges, loss on extinguishment of $169 million in principal amount of senior convertible notes and the noncash amortization of debt discount on our senior convertible notes.
Our adjusted net income was $145 million or $0.31 of adjusted diluted earnings per share.
In this respect, we are excited to report that the $0.71 of adjusted diluted earnings per share that we've realized year-to-date has surpassed our highest previous full year split adjusted earnings, thus solid traction and excellent progress.
Inventory was down 21% to $838 million, driven by improvements in our operating model and inbound shipping delays due to COVID-related supply chain pressures.
Our cash and cash equivalents were $1.3 billion at the end of the quarter and we had no borrowings under our $1.1 billion revolving credit facility.
With respect to debt, during the third quarter, we entered into exchange agreements with certain convertible bondholders for $169 million in principal amount of our outstanding convertible notes and terminated certain related cap call transactions.
We utilized net $168 million in cash, issued 7.7 million shares of our Class C stock and recorded a related loss of approximately $24 million, which is captured in other income and expenses.
Following this transaction and our actions in the second quarter, $81 million of convertible notes remain outstanding.
Let's start with revenue, which we now expect to be up approximately 25% for the full year.
On a GAAP basis, we expect the full year rate to be up approximately 130 basis points against our 2020 adjusted gross margin of 48.6%, with benefits from pricing and changes in foreign currency being partially offset by higher expected freight expenses and the sale of MyFitnessPal, which carried a high gross margin rate.
Versus 2020, we now expect that full year SG&A will be up 6% to 7%.
With that, we now expect operating income to reach approximately $425 million this year or $475 million on an adjusted basis.
Translated to rate, we expect to deliver an operating margin of just under 8% or an adjusted operating margin of approximately 8.5% in 2021.
All of this takes us to an expected diluted earnings per share of approximately $0.55 or adjusted diluted earnings per share of approximately $0.74 in 2021, with an average weighted diluted share count of approximately 468 million shares.
And finally, from a balance sheet perspective, we expect to end the year with inventory relatively flat against 2020's year-end and we expect to close the year with approximately $1.5 billion in cash and cash equivalents. | These strengths were evident in our third quarter results with revenue up 8%, gross margin up 310 basis points to a record 51% and solid adjusted earnings per share performance at $0.31.
Compared to the prior year, revenue was up 8% to $1.5 billion.
Relative to gross margin, our third quarter improved 310 basis points over last year, landing at 51%.
After tax, we realized a net income of $113 million or $0.24 of diluted earnings per share during the quarter.
Our adjusted net income was $145 million or $0.31 of adjusted diluted earnings per share.
Inventory was down 21% to $838 million, driven by improvements in our operating model and inbound shipping delays due to COVID-related supply chain pressures.
Let's start with revenue, which we now expect to be up approximately 25% for the full year.
On a GAAP basis, we expect the full year rate to be up approximately 130 basis points against our 2020 adjusted gross margin of 48.6%, with benefits from pricing and changes in foreign currency being partially offset by higher expected freight expenses and the sale of MyFitnessPal, which carried a high gross margin rate.
With that, we now expect operating income to reach approximately $425 million this year or $475 million on an adjusted basis.
All of this takes us to an expected diluted earnings per share of approximately $0.55 or adjusted diluted earnings per share of approximately $0.74 in 2021, with an average weighted diluted share count of approximately 468 million shares. | 1
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
1
0
1
0
1
0
0
0
0
1
1
0
1
0
1
0 |
Our recordable incident rate at the end of September was just 0.24 incidents per 200,000 labor hours, significantly better than industry averages.
Our trailing 12-month net cash from operations was $1.7 billion and free cash flow was $1 billion.
While there is always some uncertainty about the volume of ammonia that will be applied in Q4, given the dependency on weather, we would expect full year 2021 adjusted EBITDA to land between $2.2 billion and $2.4 billion.
On the balance sheet, we are quickly closing in on our target of $3 billion of gross debt and expect to repay the remaining $500 million outstanding on our 2023 notes on or before their maturity.
And as such, the Board has authorized a new $1.5 billion share repurchase program to facilitate the return of capital to shareholders.
Meanwhile, lower global production and government actions have created a supply constrained global market.
The impact of this can be seen on Slides 11 and 12, where both our spot cost curve and 2022 cost curve are much higher and steeper than in recent years.
For the first nine months of 2021, the company reported net earnings attributable to common stockholders of $212 million or $0.98 per diluted share.
EBITDA was $984 million and adjusted EBITDA was approximately $1.5 billion.
The trailing 12 months net cash provided by operating activities was approximately $1.7 billion and free cash flow was $1 billion.
In 2021, we completed a record level of maintenance activity that included turnarounds at seven of our 17 ammonia plants.
As a result, we expect to return to our typical high ammonia utilization rates, with gross ammonia production between 9.5 million and 10 million tons.
We expect to sell everything we produce and achieve sales volume between 19 million and 20 million tons in 2022.
As Tony said, our Board authorized the new $1.5 billion share repurchase program, which becomes effective January 1, 2022.
We continue to operate under our existing program, which has enabled us to acquire more than 11 million shares to be repurchased since 2019.
We expect the business to produce between $2.2 billion to $2.4 billion of adjusted EBITDA this year. | Meanwhile, lower global production and government actions have created a supply constrained global market.
For the first nine months of 2021, the company reported net earnings attributable to common stockholders of $212 million or $0.98 per diluted share. | 0
0
0
0
0
1
0
1
0
0
0
0
0
0
0
0 |
The indirect lending business had a great Q2 with outstandings up 8% over Q1.
Deposit service fees continue to rebound from the pandemic impact and were up 18% from the depressed Q2 of 2020.
Our financial services businesses were the star performers of the quarter with combined revenues up 14% and pre-tax earnings of 25% over 2020.
As we announced last week, our Board has approved a $0.01 per quarter increase in our dividend, which marks the 29th consecutive year of dividend increases and we think a validation of our disciplined and diversified business model.
As Mark noted, the second quarter earnings results were solid with fully diluted GAAP and operating earnings per share of $0.88.
The GAAP earnings results were $0.22 per share or 33.3% higher than the second quarter of 2020 GAAP earnings results, and $0.12 per share or 15.8% better on an operating basis.
Comparatively the company recorded GAAP earnings and operating earnings per share of $0.97 in the linked first quarter of 2021.
The company reported total revenues of $151.6 million in the second quarter of 2021 a $6.7 million or 4.6% increase over the prior year's second quarter revenues of $144.9 million.
The increase in total revenues between the periods was driven by a $5.3 million or 13.7% increase in financial services business revenues and a $1.2 million or 8.6% increase in banking-related non-interest revenues.
Net interest income of $92.1 million was up $0.2 million or 0.2% over the second quarter 2020 results.
Total revenues were down $0.9 million or 0.6% from the linked quarter first quarter driven by a $1.9 million decrease in net interest income, offset in part by higher non-interest revenues.
The company's tax equivalent net interest margin for the second quarter of 2021 was 2.79%.
This compares to 3.03% in the first quarter of 2021 and 3.37% one year prior.
The tax equivalent yield on earning assets was 2.89% in the second quarter of 2021 as compared to 3.15% in the linked first quarter and 3.56% one year prior.
During the second quarter, the company recognized $3.9 million of PPP-related interest income, including $2.9 million of net deferred loan fees.
This compares to $6.9 million of PPP-related interest income recognized in the first quarter, including $5.9 million of net deferred loan fees.
The company's total cost of deposits remained low, averaging 10 basis points during the second quarter of 2021.
Employee benefit services revenues were up $3.4 million or 14.2% over the prior year's second quarter, driven by increases in employee benefit trust and custodial fees.
Wealth management revenues were also up $1.9 million or 29.2%, driven by a higher investment management advisory and trust services revenues.
The increase in banking-related non-interest revenues was driven by a $2.3 million or 17.6% increase in deposit service and other banking fees, offset in part by a $1 million decrease in mortgage banking income.
During the second quarter of 2021, the company reported a net benefit in the provision for credit losses of $4.3 million.
This compares to a $9.8 million provision for credit losses reported in the second quarter of 2020, $3.2 million of which was due to the acquisition of Steuben Trust Corporation with the remaining $6.6 million largely driven by pandemic-related factors.
During the second quarter of 2021, the company reported 3 basis points of net loan recoveries and the post-vaccine economic outlook remain positive.
In addition, at the end of the second quarter, there were only 12 borrowers representing $2.4 million in loans outstanding and that remained in the pandemic-related forbearance.
This compares to 47 borrowers in pandemic-related forbearance representing $75.6 million at the end of the first quarter, and 3,700 borrowers with approximately $700 million of loans outstanding one year earlier.
The company recorded $93.5 million in total operating expenses in the second quarter of 2021 as compared to $87.5 million in the second quarter of 2020, excluding $3.4 million of acquisition-related expenses.
The $6 million or 6.9% increase in operating expenses was attributable to a $3.2 million or 5.8% increase in salaries and employee benefits, a $1.9 million or 17.8% increase in data processing and communications expenses, and a $0.7 million or 7.7% increase in other expenses and a $0.5 million or 5.3% increase in occupancy and equipment expense, offset, in part, by a $0.3 million or 7.9% decrease in the amortization of intangible assets.
In comparison, the company recorded $93.2 million of total operating expenses in the first quarter of 2021, $0.3 million or 0.3% lower than the second quarter 2021 total operating expenses.
The effective tax rate for the second quarter of 2021 was 23.1%, up from 20.3% in the second quarter of 2020.
The company closed the second quarter of 2021 with total assets of $14.8 billion.
This was up $181.1 million or 1.2% from the end of the linked first quarter and up $1.36 billion or 10.1% from a year earlier.
Average interest earning assets for the second quarter of 2021 of $13.37 billion were up $680.6 million or 5.4% from the linked first quarter of 2021, and up $2.27 billion, or 20.4% from one year prior.
The very large increases in total assets and average interest earning assets over the prior 12 months was driven by the second quarter 2020 acquisition of Steuben and margin flows of government stimulus-related deposit funding PPP originations.
The company's ending loan balances of $7.24 billion were down $124.2 million or 1.7% from the end of the first quarter.
Excluding the net decrease in PPP loans of $126.1 million and the seasonal decrease in municipal loans totaling $41.2 million, ending loans increased $43.1 million or 0.6%.
As of June 30, 2021, the company's business lending portfolio included 317 first draw PPP loans with a total balance of $72.5 million and 2,254 second draw PPP loans with a total balance $212.3 million.
The company expects to recognize, through interest income, the majority of its remaining first draw net deferred PPP fees totaling $0.9 million during the third quarter of 2021 and the majority of its second draw net deferred PPP fees totaling $9.2 million over the next few quarters.
On a linked quarter basis, the average book value of the investment securities portfolio increased $290.2 million or 7.9% from $3.67 billion during the first quarter to $3.96 billion during the second quarter.
During the second quarter, the company's average cash equivalents of $2.07 billion represented approximately 16% of the company's average earning assets.
This compares to $1.67 billion in average cash equivalents during the first quarter of 2021 and $823 million in the second quarter of 2020.
The $408 million or 24.5% increase in average cash equivalents during the quarter was driven by the continued inflow of federal stimulus funds and the origination of second draw PPP loans and first draw PPP loan forgiveness.
The company's net tangible equity to net tangible assets ratio was 9.02% at June 30, 2021.
This was down from 10.08% a year earlier, but up 8.48% at the end of the first quarter.
The company's Tier 1 leverage ratio was 9.36% at June 30, 2021, which is nearly 2 times the well-capitalized regulatory standard of 5%.
Borrowing availability at the Federal Reserve Bank, borrowing capacity at the Federal Home Loan Bank and unpledged available-for-sale investment securities portfolio provides the company with over $6.1 billion of immediately available sources of liquidity.
At June 30, 2021, the company's allowance for credit losses totaled $51.8 million or 0.71% of of loans outstanding.
This compares to $55.1 million or 0.75% of total loans outstanding at the end of the first quarter of 2021 and $64.4 million or 0.86% of total loans outstanding at June 30, 2020.
Non-performing loans decreased in the second quarter to $70.2 million or 0.97% of loans outstanding, down from $75.5 million or 1.02% of loans outstanding at the end of the linked first quarter of 2021, but up from $26.8 million or 0.36% of loans outstanding at the end of the second quarter of 2020 due primarily to the reclassification of certain hotel loans under extended forbearance from accrual to non-accrual status between the periods.
The specifically identified reserves held against the company's non-performing loans totaled only $2.8 million at June 30, 2021.
Loans 30 to 89 days delinquent totaled 0.25% of loans outstanding at June 30, 2021.
This compares to 0.37% one year prior and 0.27% at the end of the linked first quarter. | As Mark noted, the second quarter earnings results were solid with fully diluted GAAP and operating earnings per share of $0.88.
The company reported total revenues of $151.6 million in the second quarter of 2021 a $6.7 million or 4.6% increase over the prior year's second quarter revenues of $144.9 million.
Net interest income of $92.1 million was up $0.2 million or 0.2% over the second quarter 2020 results. | 0
0
0
0
1
0
0
1
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
We delivered very strong revenue growth of 32% year over year, which also represents growth above 2019 levels, driven by robust and sustained consumer demand and the execution of our pricing actions.
Next, our decisive response plan to address volatile industry dynamics and broad supply constraints delivered ongoing earnings per share of $6.64, a $4.57 improvement year over year.
Ongoing EBIT margin of 11.4%, a year-over-year improvement of 640 basis points overcoming 400 basis points of cost inflation.
Additionally, we generated positive free cash flow of $769 million, led by strong earnings and the successful completion of a partial tender offer of our Whirlpool China business and the divestiture of our Turkish subsidiary.
The execution of these actions and the sustained consumer demand delivered very strong Q2 results and give us the confidence to significantly raise our guidance to approximately $26 per share.
Price and mix delivered 600 basis points of margin expansion driven by reduced promotions and the further implementation of a previously announced cost-based pricing actions.
Additionally, structural cost takeout actions, higher volumes, and ongoing cost productivity initiatives delivered 550 basis points of net cost margin improvement.
These margin benefits were partially offset by a raw material inflation, particularly steel and resins, which resulted in an unfavorable impact of 400 basis points.
Lastly, increased investment in marketing and technology and the continued impact from currency in Latin America impacted margin by a combined 100 basis points.
In North America, we delivered 22% revenue growth driven by sustained strong consumer demand in the region.
Double-digit growth in all key countries drove a fourth consecutive quarter of revenue growth above 10% in the region.
Additionally, the region delivered year-over-year EBIT improvement of $97 million led by increased revenue and strong cost take-out overcoming inflationary pressures.
Net sales increased 76% led by strong demand across Brazil and Mexico, and the continued growth of our direct-to-consumer business.
The region delivered very strong EBIT margins of 9.7% with continued robust demand and the execution of cost-based price actions, offsetting inflation and currency devaluation.
In Asia, revenue decline of 1% reflects the successful partial tender offer for our Whirlpool China business which was completed in May.
Despite this disruption, the region delivered year-over-year EBIT growth of $23 million led by pricing and cost productivity actions.
We are raising our guidance and are expecting to drive net sales growth of, approximately, 16% and EBIT margin of 10.5% plus.
Additionally, we now expect to deliver $1.7 billion in free cash flow or 7.5% of net sales, driven by higher earnings and the completed divestitures.
Excluding the impact of divestitures, we expect to deliver on our long-term goal of free cash flow at 6% of net sales.
Finally, we are significantly raising our earnings per share guidance to approximately $26, a year-over-year increase of over 40%.
We continue to expect 600 basis points of margin expansion driven by price and mix as we demonstrate the disciplined execution of our go-to-market strategy and capture the benefits of our previously announced cost-based pricing actions.
We have increased our expectation for net cost to 175 basis points as we realize further efficiencies from higher revenues and strong cost takeout initiatives.
As we closely monitor cost inflation globally, particularly in steel and resins, we continue to expect our business to be negatively impacted by about $1 billion due to peak increases to materialize in the third quarter.
Increased investments in marketing and technology and unfavorable currency, primarily in Latin America, are expected to impact the margin by 125 basis points.
Overall, based on our track record, we are confident in our ability to continue to navigate this uncertain environment, and delivered 0.5%-plus EBIT margin, representing our fourth consecutive year of margin expansion.
We have increased our North America industry expectation to 10% plus to reflect the continued demand strength.
This brings our EBIT guidance for North America to approximately 17%.
Lastly, we continue to expect to deliver strong growth and significant EBIT expansion across our international regions with each region contributing to our global EBIT margin of 10.5% plus.
We now expect to drive free cash flow of approximately $1.7 billion, an increase of $450 million.
Driven by expectations for stronger top line growth and improved EBIT margins, we increased our cash earnings guidance by $250 million.
This represents free cash flow generation of 7.5% of sales delivering above our long-term goal of 6%.
We continue to expect to invest over $1 billion in capital expenditures and research and development, highlighting our commitment to driving innovation and growth in the future.
This includes industry-leading externally recognized innovation, such as our newly launched 2-in-1 Removable Agitator in our top-load laundry machine in North America and the launch of new products in EMEA, such as our new built-in refrigerator, which is recognized as the quietest built-in fridge in the marketplace.
Next, with a clear focus on returning strong levels of cash to shareholders and a signal of our confidence in the business, we expect to increase our rate of share repurchases in the second half of 2021 to at or above $300 million.
Lastly, we repaid a $300 million maturing bond and issued our inaugural sustainability bond, focusing on actions to drive positive environmental and social impacts. | We delivered very strong revenue growth of 32% year over year, which also represents growth above 2019 levels, driven by robust and sustained consumer demand and the execution of our pricing actions.
Next, our decisive response plan to address volatile industry dynamics and broad supply constraints delivered ongoing earnings per share of $6.64, a $4.57 improvement year over year.
We are raising our guidance and are expecting to drive net sales growth of, approximately, 16% and EBIT margin of 10.5% plus. | 1
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
During our first fiscal quarter, industry same restaurant sales decreased 26%.
The progress we made in these areas combined with our operating results, gave us the confidence to repay the $270 million term loan and reinstate a quarterly dividend.
At the end of August, we had completed installation in just over 500 restaurants in our total portfolio.
For our three largest brands combined, more than 50% of our off-premise sales during the quarter were fully digital transactions where guest ordered and paid online.
The results of all these efforts to transform our business model can be seen in the fact that we generated adjusted EBITDA of $185 million for the quarter.
Olive Garden delivered strong average weekly sales per restaurant of $70,000 while significantly strengthening our business model, resulting in higher segment profit margin than last year.
Olive Garden same-restaurant sales for the quarter declined 28.2%, 220 basis points below the industry benchmark.
In fact, restaurants that had some level of dining room capacity for the entire quarter averaged more than $75,000 in weekly sales, retaining nearly 80% of their last year's sales.
Additionally, off-premise continue to see strong growth with off-premise sales increasing 123% in the quarter, representing 45% of total sales.
Same-restaurant sales declined 18.1%, outperforming the industry benchmark by 790 basis points.
Off-premise sales grew by more than 240%, representing 28% of total sales.
And lastly, our other business segment also delivered strong operational improvement with segment profit margin of 12.8%.
This was only 130 basis points below last year despite a 39% decline in same-restaurant sales.
For the quarter, total sales were $1.5 billion, a decrease of 28.4%.
Same-restaurant sales decreased 29%.
Adjusted EBITDA was $185 million.
And adjusted diluted net earnings per share were $0.56.
However, beef inflation of over 7%, primarily impacting LongHorn, drove food and beverage expense 20 basis points higher than last year for the company.
Restaurant labor was 20 basis points lower than last year, with hourly labor as a percent of sales improving by over 350 basis points, driven by operational simplifications.
Restaurant expense, including $10 million of business interruption insurance proceeds related to COVID-19 claims submitted in the fourth quarter of fiscal 2020.
Excluding this benefit, we reduced restaurant expense per operating week by over 20% this quarter.
For marketing, we lowered absolute spending by over $40 million, bringing marketing as a percent of sales to 1.9%, 130 basis points less than last year.
As a result, restaurant-level EBITDA margin was 17.8%, 20 basis points below last year, but particularly strong given the sales decline of 28%.
General and administrative expenses were $10 million lower than last year as we effectively reduced expenses and rightsized our support structure.
Interest was $5 million higher than last year, mostly related to the term loan that was outstanding for the majority of the quarter.
And finally, our first quarter adjusted effective tax rate was 9%.
All of this culminated in adjusted earnings after-tax of $73 million, which excludes $48 million of performance-adjusted expenses.
Approximately $10 million of this expense is non-cash and the remaining will be cash outflows through Q2 of fiscal 2022.
This restructuring resulted in a net 11% reduction in our workforce in the restaurant support center and field operations leadership positions.
It is expected to save between $25 million and $30 million annually.
Despite a sales decline of 28%, Olive Garden increased segment profit margin by 110 basis points to 22.1%.
LongHorn Steakhouse, Fine Dining and the other business segment delivered strong positive segment profit margins of 15.1%, 11.9% and 12.8% respectively despite a significant sales decline experienced in the quarter.
In the first quarter, 68% of our restaurants operated with at least partial dining room capacity for the entire quarter.
These restaurants had average weekly sales per restaurant of $69,000 and the same-restaurant sales decline of 21.9%.
And while Olive Garden and the Fine Dining segment had fewer dining rooms opened than our average, these restaurants had the highest average weekly sales per restaurant of almost $76,000 and $90,000 respectively.
At the start of the second quarter, we had approximately 91% of our restaurants with dining rooms opened operating in at least limited capacity.
We fully repaid the $270 million term loan we took out in April.
We ended the first quarter with $655 million in cash and another $750 million available in our untapped credit facility, giving us over $1.4 million of available liquidity.
We generated over $160 million of free cash flow in the quarter and improved our adjusted debt to adjusted capital to 59% at the end of the quarter, well within our debt covenant of below 75%.
The board declared a quarterly cash dividend of $0.30 per share.
This dividend represents 53% of our first quarter adjusted earnings after-tax within our long-term framework for value creation.
We anticipate EBITDA between $200 million and $215 million and diluted net earnings per share between $0.65 and $0.75 on a diluted share base of 131 million shares.
Based on our strong business model enhancements, we now think we can get to our pre-COVID EBITDA dollars at approximately 90% of pre-COVID sales, while still making appropriate investments in our business. | Olive Garden same-restaurant sales for the quarter declined 28.2%, 220 basis points below the industry benchmark.
And adjusted diluted net earnings per share were $0.56.
For marketing, we lowered absolute spending by over $40 million, bringing marketing as a percent of sales to 1.9%, 130 basis points less than last year.
We anticipate EBITDA between $200 million and $215 million and diluted net earnings per share between $0.65 and $0.75 on a diluted share base of 131 million shares. | 0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0 |
Providence core earnings of $0.43 per share were impacted by continued margin compression, albeit slight and increased expenses primarily from consulting fees related to CECL modeling and implementation.
Our core return on average assets was 1.13% and core return on average tangible equity was 11.36% for the quarter.
We experienced only 2 basis points of margin compression in Q4 and forecast it being relatively neutral in 2020.
Regulatory costs were being $10 billion and technology investments to remain relevant in the new digital banking paradigm.
We can fund our organic growth and support a solid and consistently above average cash dividend with only a 54% pay-out ratio and supportive buybacks when they meet our total return criteria.
Our net income was $26 million or $0.40 per diluted share compared with $35.8 million or $0.55 per diluted share for the fourth quarter of 2018 and $31.4 million or $0.49 per diluted share in the trailing quarter.
Current [Phonetic] quarter earnings were adversely impacted by a $2 million or $0.03 per basic and diluted share net of tax expense increase in the estimated fair value of the contingent consideration liability related to the April 1st, 2019 acquisition of New York City-based RAI Tirschwell & Loewy.
At December 31st, 2019, the contingent liability was $9.4 million with maximum potential future payments totaling $11 million.
Excluding this charge, the Company would have reported net income of $27.9 million or $0.43 per basic and diluted share and net income of $114.6 million or $1.77 per basic and diluted share for the quarter and year ended December 31st, 2019 respectively.
Our net interest margin contracted 2 basis points versus the trailing quarter and 23 basis points versus the same period last year.
This deposit rate management coupled with an $80 million or 21% annualized increase in average non-interest bearing deposits resulted in a 3 basis point decrease in the total cost of deposits this quarter to 65 basis points.
Noninterest-bearing deposits averaged $1.6 billion or 23% of average total deposits for the quarter.
Quarter-end loan totals increased $66 million or 3.6% annualized from September 30th as growth in CRE construction and residential mortgage loans was partially offset by net reductions in C&I multifamily and consumer loans.
Loan originations excluding line of credit advances reached their best levels of the year, up $106 million or 30% versus the trailing quarter to $461 million.
But payoffs remained elevated, up $46 million or 18% versus the trailing quarter to $298 million.
The pipeline at December 31st decreased to $905 million from $1.1 billion at the trailing quarter end, reflecting strong year-end closing activity.
The pipeline rate has decreased 14 basis points since last quarter to 3.97% at December 31st.
Our provision for loan losses was $2.9 million for the current quarter compared with $0.5 million in the trailing quarter.
Our annualized net charge-offs as a percentage of average loans were 26 basis points for the quarter and 18 basis points for the full year.
Overall, credit metrics remained stable this quarter with non-performing assets totalling 55 basis points of total assets at quarter end.
The allowance for loan losses to total loans decreased to 76 basis points from 79 basis points in the trailing quarter largely as a result of improvements in qualitative allowance factors.
Non-interest income decreased slightly versus the trailing quarter to $17.7 million as lower swap fee income offset increased bank-owned life insurance benefits and loan prepayment fees.
Excluding the increase in the fair value of the contingent consideration liability related to the T&L acquisition, non-interest expenses were an annualized 2.05% of average assets for the quarter.
Core expenses increased $1.2 million versus the trailing quarter with consultancy and audit costs related to CECL implementation, additional examination and consulting fees that totaled $1.4 million driving the increase.
We did, once again, benefit this quarter from an FDIC insurance small bank assessment credit of $758,000 and our total remaining FDIC credit potentially realizable in future quarters is $1 million.
Our effective tax rate decreased to 23.6% from 24% for the trailing quarter and we are currently projecting an effective tax rate of approximately 24% for 2020. | Our net income was $26 million or $0.40 per diluted share compared with $35.8 million or $0.55 per diluted share for the fourth quarter of 2018 and $31.4 million or $0.49 per diluted share in the trailing quarter. | 0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 |
End of preview. Expand
in Dataset Viewer.
README.md exists but content is empty.
Use the Edit dataset card button to edit it.
- Downloads last month
- 11