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Tech Data Reports First Quarter Fiscal Year 2020 Results
CLEARWATER, Fla.–(BUSINESS WIRE)–Tech Data (NASDAQ: TECD) (the “Company”) today announced its financial
results for the first quarter ended April 30, 2019.
First quarter ended April 30, | ||||||
($ in millions,
except per share amounts) |
2019 | 2018 |
Y/Y |
|||
Net Sales | $8,406.4 | $8,548.3 | -2% | |||
Gross profit | $509.4 | $523.1 | -3% | |||
Gross margin | 6.06% | 6.12% | -6 bps | |||
SG&A expenses (GAAP) | $405.8 | $422.4 | -4% | |||
% of net sales | 4.83% | 4.94% | -11 bps | |||
SG&A expenses (Non-GAAP) | $384.6 | $399.1 | -4% | |||
% of net sales | 4.58% | 4.67% | -9 bps | |||
Operating income (GAAP) | $97.6 | $70.5 | 38% | |||
Operating margin (GAAP) | 1.16% | 0.82% | 34 bps | |||
Operating income (Non-GAAP) | $124.8 | $124.1 | 1% | |||
Operating margin (Non-GAAP) | 1.48% | 1.45% | 3 bps | |||
Net income (GAAP) | $55.4 | $33.7 | 64% | |||
Net income (Non-GAAP) | $75.9 | $70.8 | 7% | |||
EPS – diluted (GAAP) | $1.49 | $0.87 | 71% | |||
EPS – diluted (Non-GAAP) | $2.04 | $1.84 | 11% |
A reconciliation of GAAP to non-GAAP financial measures is presented in
the financial tables of this press release.
This information is
also available on the Investor Relations section of Tech Data’s website
at www.techdata.com/investor.
“We are pleased to report a solid start to Tech Data’s fiscal year 20.
In Q1 we delivered double-digit earnings per share growth, generated
positive cash flow and earned an industry-leading return on invested
capital – all while making good progress on our strategy and continuing
to invest for the future. Our worldwide teams executed well in the
quarter, despite market uncertainty,” said Rich Hume, chief executive
officer. “Looking ahead, although IT market growth has slowed somewhat
from the year-ago levels, demand continues to be solid, and we remain
positive on the overall IT spending outlook.”
Regional Financial Highlights for the First Quarter Ended April 30,
2019:
First quarter ended April 30, | ||||||
($ in millions) | 2019 | 2018 |
Y/Y |
|||
AMERICAS |
||||||
Net Sales | $3,789.2 | $3,618.2 | 5% | |||
% of WW net sales | 45% | 42% | ||||
Operating income (GAAP) | $68.6 | $61.3 | 12% | |||
% of net sales | 1.81% | 1.70% | 11 bps | |||
Operating income (Non-GAAP) | $84.7 | $85.9 | -1% | |||
% of net sales | 2.24% | 2.38% | -14 bps | |||
EUROPE |
||||||
Net Sales | $4,309.5 | $4,661.7 | -8% | |||
% of WW net sales | 51% | 55% | ||||
Operating income (GAAP) | $36.4 | $17.3 | 110% | |||
% of net sales | 0.85% | 0.37% | 48 bps | |||
Operating income (Non-GAAP) | $45.6 | $43.6 | 4% | |||
% of net sales | 1.06% | 0.94% | 12 bps | |||
ASIA PACIFIC |
||||||
Net Sales | $307.7 | $268.4 | 15% | |||
% of WW net sales | 4% | 3% | ||||
Operating income (loss) (GAAP) | $0.9 | ($0.6) | NM | |||
% of net sales | 0.28% | -0.21% | 49 bps | |||
Operating income (Non-GAAP) | $2.8 | $1.1 | 161% | |||
% of net sales | 0.91% | 0.40% | 51 bps |
Note: NM = not meaningful, WW = worldwide
Stock-based compensation
expense was $8.3 million, an increase of $0.7 million, compared to the
prior-year quarter. These expenses are excluded from the regional
operating results and presented as a separate line item in the company’s
segment reporting (see the GAAP to non-GAAP reconciliation in the
financial tables of this press release).
-
Net sales were $8.4 billion, a decrease of 2 percent compared to the
prior-year quarter. On a constant currency basis, net sales increased
3 percent.-
Americas: Net sales were $3.8 billion, an increase of 5 percent
compared to the prior-year quarter. On a constant currency basis,
net sales increased 6 percent. -
Europe: Net sales were $4.3 billion, a decrease of 8 percent
compared to the prior-year quarter. On a constant currency basis,
net sales increased 1 percent. -
Asia Pacific: Net sales were $0.3 billion, an increase of 15
percent compared to the prior-year quarter. On a constant currency
basis, net sales increased 19 percent.
-
Americas: Net sales were $3.8 billion, an increase of 5 percent
- Net cash generated by operations during the quarter was $63 million.
-
Return on invested capital for the trailing twelve months was 13
percent, compared to 4 percent in the prior year. Adjusted return on
invested capital for the trailing twelve months was 14 percent,
compared to 11 percent in the prior year.
“During Q1, we generated $63 million in cash from operations, returned
$36 million to our shareholders through share repurchases, and for the
trailing twelve-month period, earned an adjusted return on invested
capital of 14 percent. In addition, we recently improved our liquidity
profile to enhance our financial strength and flexibility – all of which
reflect our disciplined approach to optimizing our business and
commitment to creating shareholder value,” said Chuck Dannewitz,
executive vice president, chief financial officer.
Business Outlook
-
For the quarter ending July 31, 2019, the Company anticipates:
-
Worldwide net sales to be in the range of $8.6 billion to $8.9
billion -
EPS to be in the range of $1.53 to $1.83 and non-GAAP EPS to be in
the range of $2.15 to $2.45 - An effective tax rate in the range of 24 percent to 26 percent
-
Worldwide net sales to be in the range of $8.6 billion to $8.9
-
This guidance assumes an average U.S. dollar to euro exchange rate of
$1.12 to €1.00 which compares to $1.17 to €1.00 in the year-ago period.
Webcast Details
Tech Data will hold a conference call today at 9:00 a.m. (ET) to discuss
its financial results for the first quarter ended April 30, 2019. A
webcast of the call, including supplemental schedules, will be available
to all interested parties and can be obtained at www.techdata.com/investor.
The webcast will be available for replay for three months.
Non-GAAP Financial Information
The non-GAAP financial information contained in this release is included
with the intention of providing investors a more complete understanding
of the Company’s operational results and trends, but should only be used
in conjunction with results reported in accordance with Generally
Accepted Accounting Principles (“GAAP”). Certain non-GAAP measures
presented in this release or other releases, presentations and similar
documents issued by the Company include sales, income or expense items
as adjusted for the impact of changes in foreign currencies (referred to
as “constant currency”), non-GAAP operating income, non-GAAP operating
margin, non-GAAP net income, non-GAAP earnings per diluted share and
Adjusted Return on Invested Capital. Certain non-GAAP measures also
exclude acquisition-related intangible assets amortization expense,
benefits associated with legal settlements, acquisition, integration and
restructuring expenses, value-added tax assessments and related interest
expense, tax indemnifications and changes in deferred tax valuation
allowances. A detailed reconciliation of the adjustments between results
calculated using GAAP and non-GAAP in this release is contained in the
attached financial schedules. This information can also be obtained from
the Company’s Investor Relations website at www.techdata.com/investor.
Forward-Looking Statements
Certain statements in this communication may contain “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements, including statements regarding
Tech Data’s plans, objectives, expectations and intentions, Tech Data’s
financial results and estimates and/or business prospects, involve a
number of risks and uncertainties and actual results could differ
materially from those projected. These forward looking statements are
based on current expectations, estimates, forecasts, and projections
about the operating environment, economies and markets in which Tech
Data operates and the beliefs and assumptions of our management. Words
such as “expects,” “anticipates,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such
words, and similar expressions are intended to identify such forward
looking statements. In addition, any statements that refer to
projections of Tech Data’s future financial performance, our anticipated
growth and trends in our businesses, and other characterizations of
future events or circumstances, are forward looking statements. These
forward looking statements are only predictions and are subject to
risks, uncertainties, and assumptions. Therefore, actual results may
differ materially and adversely from those expressed in any forward
looking statements.
For additional information with respect to risks and other factors which
could occur, see Tech Data’s Annual Report on Form 10-K for the year
ended January 31, 2019, including Part I, Item 1A, “Risk Factors”
therein, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other securities filings with the Securities and Exchange Commission
(the “SEC”) that are available at the SEC’s website at www.sec.gov
and other securities regulators. Readers are cautioned not to place
undue reliance upon any such forward-looking statements, which speak
only as of the date made. Many of these factors are beyond Tech Data’s
control. Unless otherwise required by applicable securities laws, Tech
Data disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Tech Data undertakes no duty to update any
forward looking statements contained herein to reflect actual results or
changes in Tech Data’s expectations.
About Tech Data
Tech Data connects the world with the power of technology. Our
end-to-end portfolio of products, services and solutions, highly
specialized skills, and expertise in next-generation technologies enable
channel partners to bring to market the products and solutions the world
needs to connect, grow and advance. Tech Data is ranked No. 88 on the
Fortune 500® and has been named one of Fortune’s “World’s
Most Admired Companies” for 10 straight years. To find out more, visit www.techdata.com or
follow us on Twitter, LinkedIn,
and Facebook.
TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED STATEMENT OF OPERATIONS | ||||||
(In thousands, except per share amounts) | ||||||
(Unaudited) | ||||||
Three months ended April 30, | ||||||
2019 | 2018 | |||||
Net sales | $ | 8,406,424 | $ | 8,548,319 | ||
Cost of products sold | 7,897,045 | 8,025,202 | ||||
Gross profit | 509,379 | 523,117 | ||||
Operating expenses: | ||||||
Selling, general and administrative expenses | 405,816 | 422,361 | ||||
Acquisition, integration, and restructuring expenses | 6,221 | 33,225 | ||||
Legal settlements and other, net | (282) | (2,965) | ||||
411,755 | 452,621 | |||||
Operating income | 97,624 | 70,496 | ||||
Interest expense | 26,257 | 25,922 | ||||
Other (income) expense, net | (693) | 1,917 | ||||
Income before income taxes | 72,060 | 42,657 | ||||
Provision for income taxes | 16,660 | 8,958 | ||||
Net income | $ | 55,400 | $ | 33,699 | ||
Earnings per share: | ||||||
Basic | $ | 1.50 | $ | 0.88 | ||
Diluted | $ | 1.49 | $ | 0.87 | ||
Weighted average common shares outstanding: | ||||||
Basic | 37,011 | 38,281 | ||||
Diluted | 37,247 | 38,561 |
TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEET | ||||||
(In thousands, except par value and share amounts) | ||||||
(Unaudited) | ||||||
April 30, | January 31, | |||||
2019 | 2019 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 797,500 | $ | 799,123 | ||
Accounts receivable, net | 5,423,370 | 6,241,740 | ||||
Inventories | 3,260,840 | 3,297,385 | ||||
Prepaid expenses and other assets | 367,858 | 354,601 | ||||
Total current assets | 9,849,568 | 10,692,849 | ||||
Property and equipment, net | 271,906 | 274,917 | ||||
Goodwill | 887,175 | 892,990 | ||||
Intangible assets, net | 924,338 | 950,858 | ||||
Other assets, net | 378,762 | 174,938 | ||||
Total assets | $ | 12,311,749 | $ | 12,986,552 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 6,715,555 | $ | 7,496,466 | ||
Accrued expenses and other liabilities | 984,366 | 1,000,126 | ||||
Revolving credit loans and current maturities of long-term debt, net | 123,092 | 110,368 | ||||
Total current liabilities | 7,823,013 | 8,606,960 | ||||
Long-term debt, less current maturities | 1,297,943 | 1,300,554 | ||||
Other long-term liabilities | 274,887 | 142,315 | ||||
Total liabilities | $ | 9,395,843 | $ | 10,049,829 | ||
Shareholders’ equity: | ||||||
Common stock, par value $0.0015; 200,000,000 shares authorized; 59,245,585 |
$ | 89 | $ | 89 | ||
shares issued at April 30, 2019 and January 31, 2019 | ||||||
Additional paid-in capital | 836,508 | 844,206 | ||||
Treasury stock, at cost (22,483,529 and 22,305,464 shares at April 30, 2019 |
||||||
and January 31, 2019) | (1,065,657) | (1,037,872) | ||||
Retained earnings | 3,141,914 | 3,086,514 | ||||
Accumulated other comprehensive income | 3,052 | 43,786 | ||||
Total shareholders’ equity | 2,915,906 | 2,936,723 | ||||
Total liabilities and shareholders’ equity | $ | 12,311,749 | $ | 12,986,552 |
TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three months ended April 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Cash received from customers | $ | 11,913,347 | $ | 11,514,374 | ||||
Cash paid to vendors and employees | (11,800,318 | ) | (12,038,399 | ) | ||||
Interest paid, net | (35,101 | ) | (33,763 | ) | ||||
Income taxes paid | (14,739 | ) | (8,830 | ) | ||||
Net cash provided by (used in) operating activities | 63,189 | (566,618 | ) | |||||
Cash flows from investing activities: | ||||||||
Expenditures for property and equipment | (7,745 | ) | (4,894 | ) | ||||
Software and software development costs | (7,534 | ) | (3,561 | ) | ||||
Other | (548 | ) | (267 | ) | ||||
Net cash used in investing activities | (15,827 | ) | (8,722 | ) | ||||
Cash flows from financing activities: | ||||||||
Principal payments on long-term debt | (5,224 | ) | (2,899 | ) | ||||
Cash paid for debt issuance costs | (1,028 | ) | — | |||||
Net borrowings (repayments) on revolving credit loans | 14,227 | (13,291 | ) | |||||
Payments for employee tax withholdings on equity awards | (8,602 | ) | (6,255 | ) | ||||
Proceeds from the reissuance of treasury stock | 495 | 442 | ||||||
Repurchases of common stock | (35,681 | ) | — | |||||
Net cash used in financing activities |
(35,813 | ) | (22,003 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (13,172 | ) | (12,708 | ) | ||||
Net decrease in cash and cash equivalents | (1,623 | ) | (610,051 | ) | ||||
Cash and cash equivalents at beginning of year | 799,123 | 955,628 | ||||||
Cash and cash equivalents at end of period | $ | 797,500 | $ | 345,577 | ||||
Reconciliation of net income to net cash provided by operating activities: |
||||||||
Net income | $ | 55,400 | $ | 33,699 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
37,257 | 40,481 | ||||||
Provision for losses on accounts receivable | 1,765 | 924 | ||||||
Stock-based compensation expense | 8,305 | 7,587 | ||||||
Accretion of debt discount and debt issuance costs | 378 | 378 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 751,836 | 670,528 | ||||||
Inventories | 2,450 | (7,387 | ) | |||||
Prepaid expenses and other assets | 2,245 | (30,344 | ) | |||||
Accounts payable | (706,381 | ) | (1,132,019 | ) | ||||
Accrued expenses and other liabilities | (90,066 | ) | (150,465 | ) | ||||
Total adjustments | 7,789 | (600,317 | ) | |||||
Net cash provided by (used in) operating activities | $ | 63,189 | $ | (566,618 | ) |
TECH DATA CORPORATION AND SUBSIDIARIES | ||||||||||||
GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
(In thousands) | ||||||||||||
Three months ended April 30, 2019 | ||||||||||||
Americas (1) | Europe (1) | Asia Pacific (1) |
Stock |
Consolidated | ||||||||
Net Sales | $ 3,789,198 | $ 4,309,500 | $ 307,726 | $ 8,406,424 | ||||||||
Operating income (GAAP) (1) | $ 68,633 | $ 36,420 | $ 876 | $ (8,305) | $ 97,624 | |||||||
Acquisition, integration and restructuring expenses | 2,911 | 3,024 | 286 | – | 6,221 | |||||||
Legal settlements and other, net | (282) | – | – | (282) | ||||||||
Tax indemnifications | – | – | 320 | 320 | ||||||||
Acquisition-related intangible assets amortization expense | 13,440 | 6,115 | 1,324 | 20,879 | ||||||||
Total non-GAAP operating income adjustments | $ 16,069 | $ 9,139 | $ 1,930 | $ – | $ 27,138 | |||||||
Operating income (non-GAAP) | $ 84,702 | $ 45,559 | $ 2,806 | $ (8,305) | $ 124,762 | |||||||
Operating margin (GAAP) | 1.81% | 0.85% | 0.28% | 1.16% | ||||||||
Operating margin (non-GAAP) | 2.24% | 1.06% | 0.91% | 1.48% | ||||||||
(1) GAAP operating income does not include stock compensation expense at the regional level. |
||||||||||||
Three months ended April 30, 2018 | ||||||||||||
Americas (1) | Europe (1) | Asia Pacific (1) |
Stock |
Consolidated | ||||||||
Net Sales | $ 3,618,206 | $ 4,661,702 | $ 268,411 | $ 8,548,319 | ||||||||
Operating income (loss) (GAAP) (1) | $ 61,342 | $ 17,318 | $ (577) | $ (7,587) | $ 70,496 | |||||||
Acquisition, integration and restructuring expenses | 13,916 | 17,988 | 321 | 1,000 | 33,225 | |||||||
Legal settlements and other, net | (2,965) | – | – | (2,965) | ||||||||
Acquisition-related intangible assets amortization expense | 13,643 | 8,329 | 1,332 | 23,304 | ||||||||
Total non-GAAP operating income adjustments | $ 24,594 | $ 26,317 | $ 1,653 | $ 1,000 | $ 53,564 | |||||||
Operating income (non-GAAP) | $ 85,936 | $ 43,635 | $ 1,076 | $ (6,587) | $ 124,060 | |||||||
Operating margin (GAAP) | 1.70% | 0.37% | -0.21% | 0.82% | ||||||||
Operating margin (non-GAAP) | 2.38% | 0.94% | 0.40% | 1.45% | ||||||||
(1) GAAP operating income does not include stock compensation expense at the regional level. |
TECH DATA CORPORATION AND SUBSIDIARIES | ||||||
GAAP TO NON-GAAP RECONCILIATION | ||||||
(In thousands) | ||||||
Selling, general and administrative expenses (“SG&A”) | Three months ended April 30, | |||||
2019 | 2018 | |||||
Net Sales | $ | 8,406,424 | $ | 8,548,319 | ||
SG&A Expenses (GAAP) | $ | 405,816 | $ | 422,361 | ||
Tax indemnifications | (320) | – | ||||
Acquisition-related intangible assets amortization expense | (20,879) | (23,304) | ||||
SG&A Expenses (non-GAAP) | $ | 384,617 | $ | 399,057 | ||
SG&A Expenses (GAAP) % | 4.83% | 4.94% | ||||
SG&A Expenses (non-GAAP) % | 4.58% | 4.67% |
Three months ended April 30, | ||||||||
2019 | 2018 | |||||||
Net Income | Diluted EPS | Net Income | Diluted EPS | |||||
GAAP Results | $55,400 | $1.49 | $33,699 | $0.87 | ||||
Acquisition, integration and restructuring expenses | 6,221 | 0.17 | 33,225 | 0.86 | ||||
Legal settlements and other, net | (282) | (0.01) | (2,965) | (0.08) | ||||
Value added tax assessments and related interest expense | – | – | (928) | (0.02) | ||||
Tax indemnifications | 320 | 0.01 | – | – | ||||
Acquisition-related intangible assets amortization expense | 20,879 | 0.56 | 23,304 | 0.61 | ||||
Income tax effect of tax indemnifications | (320) | (0.01) | – | – | ||||
Income tax effect of other adjustments above | (6,321) | (0.17) | (12,908) | (0.33) | ||||
Change in deferred tax valuation allowances | – | – | (2,600) | (0.07) | ||||
Non-GAAP Results | $75,897 | $2.04 | $70,827 | $1.84 |
Return on Invested Capital (ROIC) |
||||||
Twelve months ended April 30, | ||||||
TTM Net Operating Profit After Tax (NOPAT)*: | 2019 | 2018 | ||||
Operating income | $ | 520,930 | $ | 405,497 | ||
Income taxes on operating income (1) | (52,272) | (242,229) | ||||
NOPAT | $ | 468,658 | $ | 163,268 | ||
Average Invested Capital: | ||||||
Short-term debt (5-qtr end average) | $ | 115,018 | $ | 262,413 | ||
Long-term debt (5-qtr end average) | 1,361,506 | 1,683,828 | ||||
Shareholders’ Equity (5-qtr end average) | 2,881,968 | 2,745,501 | ||||
Total average capital | 4,358,492 | 4,691,742 | ||||
Less: Cash (5-qtr end average) | (676,308) | (751,732) | ||||
Average invested capital less average cash | $ | 3,682,184 | $ | 3,940,010 | ||
ROIC | 13% | 4% | ||||
* Trailing Twelve Months is abbreviated as TTM. | ||||||
(1) Income taxes on operating income was calculated using the trailing twelve months effective tax rate. |
Adjusted Return on Invested Capital (ROIC)
Twelve months ended April 30, | |||
TTM Net Operating Profit After Tax (NOPAT), as adjusted*: | 2019 | 2018 | |
Non-GAAP operating income (1) | $ 708,588 | $ 603,559 | |
Income taxes on non-GAAP operating income (2) | (179,283) | (178,518) | |
NOPAT, as adjusted | $ 529,305 | $ 425,041 | |
Average Invested Capital, as adjusted: | |||
Short-term debt (5-qtr end average) | $ 115,018 | $ 262,413 | |
Long-term debt (5-qtr end average) | 1,361,506 | 1,683,828 | |
Shareholders’ Equity (5-qtr end average) | 2,881,968 | 2,745,501 | |
Tax effected impact of non-GAAP adjustments (3) | 44,860 | 95,713 | |
Total average capital, as adjusted | 4,403,352 | 4,787,455 | |
Less: Cash (5-qtr end average) | (676,308) | (751,732) | |
Average invested capital less average cash | $ 3,727,044 | $ 4,035,723 | |
Adjusted ROIC | 14% | 11% |
* | Trailing Twelve Months is abbreviated as TTM. | |
(1) |
Represents operating income as adjusted to exclude acquisition, integration and restructuring expenses, legal settlements and other, net, gain on disposal of subsidiary, value added tax assessments, acquisition-related intangible assets amortization expense, goodwill impairment and tax indemnifications. |
|
(2) |
Income taxes on non-GAAP operating income was calculated using the trailing twelve months effective tax rate adjusted for the impact of non-GAAP adjustments during the respective periods. |
|
(3) |
Represents the 5 quarter average of the year-to-date impact of non-GAAP adjustments. |
Guidance Reconciliation
Three months ending July 31, 2019 | |||
Low end of |
High end of |
||
Earnings per share – diluted | $1.53 | $1.83 | |
Acquisition, integration and restructuring expenses | 0.59 | 0.59 | |
Acquisition-related amortization of intangibles | 0.24 | 0.24 | |
Income tax effect of the above adjustments | (0.21) | (0.21) | |
Non-GAAP earnings per share – diluted | $2.15 | $2.45 |
Contacts
Investor Contact
Tania Almond
Investor Relations
Director
+1 727.538.7064
[email protected]
Media Contact
Bobby Eagle
Director, External
Communications
+1 727.538.5864
[email protected]
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HERZLIYA, Israel and CALGARY, AB, April 22, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), is pleased to announce that is has reached a key milestone: the Company submitted its letter of application for a Pre-IND meeting, the first phase in the FDA approval process in the United States for Innocan’s Liposome-Cannabidiol (LPT-CBD) injectable treatment of chronic pain.
With the global market for pain therapeutics widely expected to exceed US$100 billion by 2032[1], LPT therapy which requires only one single monthly subcutaneous injection, is positioned as a highly attractive alternative to opioid-based approaches. Opioids have and continue to take a significant human toll in recent years, with more than three-quarters of drug overdose deaths in the United States involving opioids, according to the United States Center for Disease Control and Prevention[2].
Innocan’s therapy has shown consistent efficacy in multiple pre-clinical trials in recent years of it’s LPT-CBD injectable treatment through prolonged and controlled release of CBD in animals with chronic pain conditions. Innocan’s Pre-IND Meeting Request Letter to the FDA is a key milestone and important first step in seeking approval of its LPT-CBD therapy for use in humans. At the Pre-IND meeting, the objective will be to obtain guidance from the FDA on the preclinical and clinical development plan, enabling the initiation of an Investigational New Drug (IND) program in the United States.
Iris Bincovich, CEO of Innocan, commented: “We are extremely excited to embark on this next stage in the development of LPT-CBD injectables, this is a major Milestone for Innocan Pharma. We have invested significant effort and many thousands of person-hours in its research and development, accumulating a wealth of preclinical data that will serve as the foundation for our participation in the FDA process. This is a key milestone for Innocan and marks our first step towards the FDA’s recognition of our technology. We see significant potential for our therapy, with an addressable market for pain management therapeutics expected to exceed US $100 billion by 2032, and we look forward to tapping that.“
Dr. Joseph Pergolizzi, Innocan’s FDA Advisory Board Member, added:
“We have worked hard to catalogue the data collected as part of our animal LPT therapy testing program and prepare it for the FDA. We look forward to working under FDA guidance, with the goal of completing the review process as quickly and efficiently as possible. We believe that Innocan’s unique treatment method, if and when it should become FDA-approved has the potential of being a highly valuable non-opioid addition in the medical arsenal of the management of chronic pain.”
About Innocan
Innocan is a pharmaceutical tech company that operates under two main segments: Pharmaceuticals and Consumer Wellness. In the Pharmaceuticals segment, Innocan focuses on developing innovative drug delivery platform technologies based on advanced cannabinoids science, to treat various conditions to improve patients’ quality of life. This segment involves two drug delivery technologies: (i) LPT CBD- loaded liposome platform facilitating exact dosing and the prolonged and controlled release of CBD into the blood stream. The LPT delivery platform research is in the preclinical trial phase for: Pain Management. In the Consumer Wellness segment, Innocan develops and markets a wide portfolio of innovative and high-performance self-care products to promote a healthier lifestyle. Under this segment, Innocan has established a joint venture by the name of BI Sky Global Ltd. that focuses on advanced targeted online sales. https://innocanpharma.com/
For further information, please contact:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1-516-210-4025
+972-54-3012842
+442037699377
[email protected]
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Cautionary note regarding forward-looking information
Certain information set forth in this news release, including, without limitation, information regarding research and development, collaborations, the filing of potential applications with the FDA and other regulatory authorities, the potential achievement of future regulatory milestones, the potential for treatment of conditions and other therapeutic effects resulting from research activities and/or the Company’s products, requisite regulatory approvals and the timing for market entry, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Innocan’s control. The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Innocan, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of requisite production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include but are not limited to: general global and local (national) economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and relationships with suppliers, manufacturers, customers, business partners and competitors. There are also risks that are inherent in the nature of product distribution, including import / export matters and the failure to obtain any required regulatory and other approvals (or to do so in a timely manner) and availability in each market of product inputs and finished products. The anticipated timeline for entry to markets may change for a number of reasons, including the inability to secure necessary regulatory requirements, or the need for additional time to conclude and/or satisfy the manufacturing and distribution arrangements. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of launch of product distribution. A comprehensive discussion of other risks that impact Innocan can also be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedar.com.
Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Innocan does not undertake to update, correct or revise any forward looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
[1] https://www.gminsights.com/industry-analysis/pain-management-drugs-market
[2] https://www.cdc.gov/opioids/data/index.html
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Curaleaf
Curaleaf Completes Acquisition of Northern Green Canada
Bolsters Company’s Advantage in Several Key Emerging Markets, including Australia, New Zealand, Germany, Poland and the United Kingdom
NEW YORK, April 22, 2024 /PRNewswire/ — Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer cannabis products, announced today the closing of its acquisition of Northern Green Canada (“NGC”), a vertically integrated Canadian licensed cannabis producer focused primarily on expanding in the international market through its EU-GMP certification. The accretive acquisition amplifies the Company’s strategic advantage in established European markets including Germany, Poland and the United Kingdom and provides a foothold in the emerging markets of Australia and New Zealand.
Integrating NGC’s international operation will equip Curaleaf with a secure and consistent high quality, non-irradiated, indoor EU-GMP flower supply, essential to maintaining its leading positions in Germany, the United Kingdom and Poland.
“We are thrilled to welcome NGC formally to the Curaleaf family of global brands,” said Boris Jordan, Founder and Executive Chairman of Curaleaf. “This is an incredibly important deal for our international expansion strategy, as we’ll be able to bolster our supply of high quality EU-GMP certified flower immediately to key European markets as well as enter the fast-growing markets of Australia and New Zealand.”
The global cannabis market is projected to generate $55 billion in sales by 2027. Emerging markets beyond the United States and Canada, including Germany, Australia and New Zealand are expected to contribute $6.3 billion of the $55 billion projection.
Terms of the acquisition of NGC include an initial payment at closing of the Company’s Subordinate Voting Shares valued at approximately US $16 million, subject to a typical post-closing adjustment. An earnout may also be paid in 2025 based upon 2024 performance of NGC’s operations, up to 50% of which will be cash and the rest paid in additional Subordinate Voting Shares. The issuance of Subordinate Voting Shares in connection with the acquisition of NGC has been conditionally approved by the Toronto Stock Exchange, subject to fulfilling customary listing conditions.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to enhance lives by cultivating, sharing and celebrating the power of the plant. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf, Select, Grassroots, JAMS, Find and Zero Proof provide industry-leading service, product selection and accessibility across the medical and adult use markets. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Toronto Stock Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com.
Forward Looking Statements
This media advisory contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward–looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “expects” or, “proposed”, “is expected”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the expected benefits of the acquisition of NGC, and the Company’s planned expansion on internal markets, the Company’s anticipated strategic advantages in European markets and emerging markets, the integration of NGC’s internal operations, the anticipated global cannabis market, and the listing of shares issuable in connection with the acquisition on the Toronto Stock Exchange. Such forward-looking statements and information reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company with respect to the matters described in this new release, including the Company’s ability to successfully realize the expected benefits of the acquisition, and the Company’s ability to fulfil the listing conditions imposed by the Toronto Stock Exchange. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including the failure to realize the expected benefits of the acquisition, or the Company’s failure to fulfil the listing conditions imposed by the Toronto Stock Exchange. Additional information about these assumptions and risks and uncertainties is contained under “Risk Factors and Uncertainties” in the Company’s latest annual information form filed on March 6, 2024, which is available under the Company’s SEDAR profile at http://www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. The Toronto Stock Exchange has not reviewed, approved or disapproved the content of this news release.
INVESTOR CONTACT
Curaleaf Holdings, Inc.
Camilo Lyon, Chief Investment Officer
[email protected]
MEDIA CONTACT
Curaleaf Holdings, Inc.
Tracy Brady, SVP Corporate Communications
[email protected]
View original content:https://www.prnewswire.co.uk/news-releases/curaleaf-completes-acquisition-of-northern-green-canada-302123010.html
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