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Insight Enterprises, Inc. Reports Strong First Quarter 2019 Results
TEMPE, Ariz.–(BUSINESS WIRE)–Insight Enterprises, Inc. (NASDAQ: NSIT) (the “Company”) today
reported financial results for the quarter ended March 31, 2019 compared
to the quarter ended March 31, 2018.
- Gross profit increased 3% to $248.5 million
- Gross margin increased 90 basis points to 14.7%
- Earnings from operations increased 13% to $57.0 million
- Diluted earnings per share of $1.09 increased 20% year over year
In the first quarter of 2019, net sales decreased by 3%, year to year,
while gross profit increased 3%, year over year and gross margin
increased 90 basis points compared to the first quarter of 2018. The
increase in gross profit and gross margin reflects a higher mix of cloud
solutions reported net and higher margin Insight delivered services.
Earnings from operations grew 13%, year over year, with each of our
geographic segments generating growth.
“I am pleased to report we have started the new year with strong
earnings performance in the first quarter,” stated Ken Lamneck,
President and Chief Executive Officer. “Our top line results decreased
in the first quarter against a tough comparison last year, but we
focused on profitable business, growing our services sales and helping
our clients migrate to the cloud, which led to strong gross margin
expansion in the quarter. At the same time we controlled our expenses,
which allowed us to deliver another quarter of double digit earnings
growth year over year, with each of our operating segments contributing
to these results,” stated Lamneck.
KEY HIGHLIGHTS
-
Consolidated net sales for the first quarter of 2019 of $1.69 billion
decreased 3% year to year when compared to the first quarter of 2018.-
Net sales in North America decreased 3% year to year to $1.24
billion; - Net sales in EMEA decreased 4% year to year to $390.2 million; and
- Net sales in APAC decreased 7% year to year to $52.9 million.
-
Net sales in North America decreased 3% year to year to $1.24
-
Excluding the effects of fluctuating foreign currency exchange rates,
consolidated net sales decreased 1% year to year, with a decline in
net sales in North America of 3%, year to year, partially offset by
growth in net sales in EMEA and APAC of 2% and 1%, respectively, year
over year. -
Consolidated gross profit increased 3% compared to the first quarter
of 2018 to $248.5 million, with consolidated gross margin expanding 90
basis points to 14.7% of net sales.-
Gross profit in North America increased 4% year over year to
$182.6 million (14.7% gross margin); -
Gross profit in EMEA increased 2% year over year to $57.0 million
(14.6% gross margin); and -
Gross profit in APAC was relatively flat year over year,
increasing less than 1% to $8.9 million (16.8% gross margin).
-
Gross profit in North America increased 4% year over year to
-
Excluding the effects of fluctuating foreign currency exchange rates,
consolidated gross profit increased 6% year over year, with gross
profit growth in North America, EMEA and APAC of 4%, 9% and 9%,
respectively, year over year. -
Consolidated earnings from operations increased 13% compared to the
first quarter of 2018 to $57.0 million, or 3.4% of net sales.-
Earnings from operations in North America increased 7% year over
year to $45.3 million, or 3.6% of net sales; -
Earnings from operations in EMEA increased 48% year over year to
$9.9 million, or 2.5% of net sales; and -
Earnings from operations in APAC increased 23% year over year to
$1.8 million, or 3.4% of net sales.
-
Earnings from operations in North America increased 7% year over
-
Excluding the effects of fluctuating foreign currency exchange rates,
consolidated earnings from operations increased 14% year over year,
with earnings from operations growth in North America, EMEA and APAC
of 8%, 53% and 31%, respectively, year over year. -
Consolidated net earnings and diluted earnings per share for the first
quarter of 2019 were $39.3 million and $1.09, respectively, at an
effective tax rate of 23.5%. -
Adjusted consolidated net earnings and Adjusted diluted earnings per
share for the first quarter of 2019 were $39.6 million and $1.10,
respectively.
In discussing financial results for the three months ended March 31,
2019 and 2018 in this press release, the Company refers to certain
financial measures that are not prepared in accordance with United
States generally accepted accounting principles (“GAAP”). When referring
to non-GAAP measures, the Company refers to such measures as “Adjusted.”
See “Use of Non-GAAP Financial Measures” for additional information. A
tabular reconciliation of financial measures prepared in accordance with
GAAP to the non-GAAP financial measures is included at the end of this
press release.
In some instances the Company refers to changes in net sales, gross
profit and earnings from operations on a consolidated basis and in North
America, EMEA and APAC excluding the effects of fluctuating foreign
currency exchange rates. In computing these changes and percentages, the
Company compares the current year amount as translated into U.S. dollars
under the applicable accounting standards to the prior year amount in
local currency translated into U.S. dollars utilizing the weighted
average translation rate for the current period.
The tax effect of Adjusted amounts referenced herein were computed using
the statutory tax rate for the taxing jurisdictions in the operating
segment in which the related expenses were recorded, adjusted for the
effects of valuation allowances on net operating losses in certain
jurisdictions.
GUIDANCE
For the full year 2019, the Company expects to deliver sales growth in
the low single digit range compared to 2018. The Company also expects
Adjusted diluted earnings per share for the full year of 2019 to be
between $4.75 and $4.85.
This outlook assumes:
- an effective tax rate of 25% to 26% for the balance of 2019;
- capital expenditures of $20 to $25 million for the full year; and
-
an average share count for the full year of approximately 36.2 million
shares.
This outlook does not reflect the repurchase of any shares under the
Company’s currently authorized share repurchase program, assumes no
current year acquisition-related expenses and excludes severance and
restructuring expenses incurred during the first quarter of 2019 and
those that may be incurred during the balance of 2019. Due to the
inherent difficulty of forecasting these types of expenses, which impact
net earnings and diluted earnings per share, the Company is unable to
reasonably estimate the related impact of such expenses, if any, to net
earnings and diluted earnings per share. Accordingly, the Company is
unable to provide a reconciliation of GAAP to non-GAAP diluted earnings
per share for the full year 2019 forecast.
CONFERENCE CALL AND WEBCAST
The Company will host a conference call and live web cast today at 8:00
a.m. ET to discuss first quarter 2019 results of operations. A live web
cast of the conference call (in listen-only mode) will be available on
the Company’s web site at http://investor.insight.com/,
and a replay of the web cast will be available on the Company’s web site
for a limited time following the call. To listen to the live web cast by
telephone, call 1-877-524-8416 if located in the U.S., 412-902-1028 for
international callers, and enter the access code 13689759.
USE OF NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures are referred to as “Adjusted.” Adjusted
consolidated earnings from operations, Adjusted consolidated net
earnings and Adjusted diluted earnings per share exclude (i) severance
and restructuring expenses and (ii) the tax effects of severance and
restructuring expenses. The Company excludes these items when internally
evaluating earnings from operations, tax expense, net earnings and
diluted earnings per share for the Company and earnings from operations
for each of the Company’s operating segments. Adjusted free cash flow is
the Company’s net cash provided or used by operating activities adjusted
for (i) purchases of property and equipment and (ii) the net borrowings
or repayments under the inventory financing facility. Adjusted return on
invested capital (“ROIC”) excludes (i) severance and restructuring
expenses, (ii) acquisition related expenses, (iii) loss on sale of the
Company’s Russia business, and (iv) the tax effects of each of these
items, as applicable.
These non-GAAP measures are used to evaluate financial performance
against budgeted amounts, to calculate incentive compensation, to assist
in forecasting future performance and to compare the Company’s results
to those of the Company’s competitors. The Company believes that these
non-GAAP financial measures are useful to investors because they allow
for greater transparency, facilitate comparisons to prior periods and
the Company’s competitors’ results and assist in forecasting performance
for future periods. These non-GAAP financial measures are not prepared
in accordance with GAAP and may be different from non-GAAP financial
measures presented by other companies. Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures
of financial performance prepared in accordance with GAAP.
|
FINANCIAL SUMMARY TABLE (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) |
|||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2019 | 2018 | change | |||||||||||||||
| Insight Enterprises, Inc. | |||||||||||||||||
| Net sales: | |||||||||||||||||
| Products | $ | 1,466,672 | $ | 1,557,792 | (6%) | ||||||||||||
| Services | $ | 218,794 | $ | 184,702 | 18% | ||||||||||||
| Total net sales | $ | 1,685,466 | $ | 1,742,494 | (3%) | ||||||||||||
| Gross profit | $ | 248,472 | $ | 240,263 | 3% | ||||||||||||
| Gross margin | 14.7 | % | 13.8 | % | 90 bps | ||||||||||||
| Selling and administrative expenses | $ | 191,063 | $ | 188,180 | 2% | ||||||||||||
| Severance and restructuring expenses | $ | 370 | $ | 1,644 | (77%) | ||||||||||||
| Earnings from operations | $ | 57,039 | $ | 50,439 | 13% | ||||||||||||
| Net earnings | $ | 39,327 | $ | 33,003 | 19% | ||||||||||||
| Diluted earnings per share | $ | 1.09 | $ | 0.91 | 20% | ||||||||||||
| North America | |||||||||||||||||
| Net sales: | |||||||||||||||||
| Products | $ | 1,070,416 | $ | 1,134,401 | (6%) | ||||||||||||
| Services | $ | 172,025 | $ | 143,979 | 19% | ||||||||||||
| Total net sales | $ | 1,242,441 | $ | 1,278,380 | (3%) | ||||||||||||
| Gross profit | $ | 182,607 | $ | 175,371 | 4% | ||||||||||||
| Gross margin | 14.7 | % | 13.7 | % | 100 bps | ||||||||||||
| Selling and administrative expenses | $ | 136,950 | $ | 132,640 | 3% | ||||||||||||
| Severance and restructuring expenses | $ | 331 | $ | 443 | (25%) | ||||||||||||
| Earnings from operations | $ | 45,326 | $ | 42,288 | 7% | ||||||||||||
| Sales Mix | ** | ||||||||||||||||
| Hardware | 60 | % | 68 | % | (14%) | ||||||||||||
| Software | 26 | % | 21 | % | 23% | ||||||||||||
| Services | 14 | % | 11 | % | 19% | ||||||||||||
| 100 | % | 100 | % | (3%) | |||||||||||||
| EMEA | |||||||||||||||||
| Net sales: | |||||||||||||||||
| Products | $ | 354,673 | $ | 377,212 | (6%) | ||||||||||||
| Services | $ | 35,502 | $ | 29,922 | 19% | ||||||||||||
| Total net sales | $ | 390,175 | $ | 407,134 | (4%) | ||||||||||||
| Gross profit | $ | 56,983 | $ | 56,050 | 2% | ||||||||||||
| Gross margin | 14.6 | % | 13.8 | % | 80 bps | ||||||||||||
| Selling and administrative expenses | $ | 47,145 | $ | 48,283 | (2%) | ||||||||||||
| Severance and restructuring expenses | $ | (85 | ) | $ | 1,074 | > 100% | |||||||||||
| Earnings from operations | $ | 9,923 | $ | 6,693 | 48% | ||||||||||||
| Sales Mix | ** | ||||||||||||||||
| Hardware | 44 | % | 46 | % | (8%) | ||||||||||||
| Software | 47 | % | 47 | % | (4%) | ||||||||||||
| Services | 9 | % | 7 | % | 19% | ||||||||||||
| 100 | % | 100 | % | (4%) | |||||||||||||
| APAC | |||||||||||||||||
| Net sales: | |||||||||||||||||
| Products | $ | 41,583 | $ | 46,179 | (10%) | ||||||||||||
| Services | $ | 11,267 | $ | 10,801 | 4% | ||||||||||||
| Total net sales | $ | 52,850 | $ | 56,980 | (7%) | ||||||||||||
| Gross profit | $ | 8,882 | $ | 8,842 | — | ||||||||||||
| Gross margin | 16.8 | % | 15.5 | % | 130 bps | ||||||||||||
|
Selling and administrative expenses |
$ | 6,968 | $ | 7,257 | (4%) | ||||||||||||
|
Severance and restructuring expenses |
$ | 124 | $ | 127 | (2%) | ||||||||||||
| Earnings from operations | $ | 1,790 | $ | 1,458 | 23% | ||||||||||||
| Sales Mix | ** | ||||||||||||||||
| Hardware | 12 | % | 13 | % | (9%) | ||||||||||||
| Software | 67 | % | 68 | % | (10%) | ||||||||||||
| Services | 21 | % | 19 | % | 4% | ||||||||||||
| 100 | % | 100 | % | (7%) | |||||||||||||
| ** |
Change in sales mix represents growth/decline in category net sales on a U.S. dollar basis and does not exclude the effects of fluctuating foreign currency exchange rates. |
||
FORWARD-LOOKING INFORMATION
Certain statements in this release and the related conference call and
web cast are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements, including the Company’s expected 2019 financial results,
sales growth and Adjusted diluted earnings per share for the full year
2019, and the assumptions relating thereto, as well as the Company’s
anticipated effective tax rate, capital expenditures and plans
concerning repurchases under the Company’s currently authorized share
repurchase program, and the Company’s expectations regarding cash flow,
are inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified. Future events and actual results could
differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. There can be no assurances
that the results discussed by the forward-looking statements will be
achieved, and actual results may differ materially from those set forth
in the forward-looking statements. Some of the important factors that
could cause the Company’s actual results to differ materially from those
projected in any forward-looking statements, include, but are not
limited to, the following, which are discussed in “Risk Factors” in Part
I, Item 1A of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2018 and in the Company’s subsequent filings with the
Securities and Exchange Commission:
-
actions of the Company’s competitors, including manufacturers and
publishers of products the Company sells; -
the Company’s reliance on partners for product availability,
competitive products to sell and marketing funds and purchasing
incentives, which can change significantly in the amounts made
available and the requirements year over year; -
changes in the information technology (“IT”) industry and/or rapid
changes in technology; -
risks associated with the integration and operation of acquired
businesses; -
possible significant fluctuations in the Company’s future operating
results; - the risks associated with the Company’s international operations;
- general economic conditions;
-
increased debt and interest expense and decreased availability of
funds under the Company’s financing facilities; -
the security of the Company’s electronic and other confidential
information; - disruptions in the Company’s IT systems and voice and data networks;
-
failure to comply with the terms and conditions of the Company’s
commercial and public sector contracts; -
legal proceedings and the results of client and public sector audits
and failure to comply with laws and regulations; -
accounts receivable risks, including increased credit loss experience
or extended payment terms with the Company’s clients; - the Company’s reliance on independent shipping companies;
- the Company’s dependence on certain key personnel;
- natural disasters or other adverse occurrences;
-
exposure to changes in, interpretations of, or enforcement trends
related to tax rules and regulations; and -
intellectual property infringement claims and challenges to the
Company’s registered trademarks and trade names.
Additionally, there may be other risks that are otherwise described from
time to time in the reports that the Company files with the Securities
and Exchange Commission. Any forward-looking statements in this release
should be considered in light of various important factors, including
the risks and uncertainties listed above, as well as others. The Company
assumes no obligation to update, and, except as may be required by law,
does not intend to update, any forward-looking statements. The Company
does not endorse any projections regarding future performance that may
be made by third parties.
|
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) |
||||||||||||||||||
|
Three Months Ended
March 31, |
||||||||||||||||||
| 2019 | 2018 | |||||||||||||||||
| Net sales: | ||||||||||||||||||
| Products | $ | 1,466,672 | $ | 1,557,792 | ||||||||||||||
| Services | 218,794 | 184,702 | ||||||||||||||||
| Total net sales | 1,685,466 | 1,742,494 | ||||||||||||||||
| Costs of goods sold: | ||||||||||||||||||
| Products | 1,337,308 | 1,414,986 | ||||||||||||||||
| Services | 99,686 | 87,245 | ||||||||||||||||
| Total costs of goods sold | 1,436,994 | 1,502,231 | ||||||||||||||||
| Gross profit | 248,472 | 240,263 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling and administrative expenses | 191,063 | 188,180 | ||||||||||||||||
| Severance and restructuring expenses | 370 | 1,644 | ||||||||||||||||
| Earnings from operations | 57,039 | 50,439 | ||||||||||||||||
| Non-operating (income) expense: | ||||||||||||||||||
| Interest income | (271 | ) | (153 | ) | ||||||||||||||
| Interest expense | 4,823 | 6,015 | ||||||||||||||||
| Net foreign currency exchange loss (gain) | 711 | (245 | ) | |||||||||||||||
| Other expense, net | 339 | 302 | ||||||||||||||||
| Earnings before income taxes | 51,437 | 44,520 | ||||||||||||||||
| Income tax expense | 12,110 | 11,517 | ||||||||||||||||
| Net earnings | $ | 39,327 | $ | 33,003 | ||||||||||||||
| Net earnings per share: | ||||||||||||||||||
| Basic | $ | 1.10 | $ | 0.92 | ||||||||||||||
| Diluted | $ | 1.09 | $ | 0.91 | ||||||||||||||
| Shares used in per share calculations: | ||||||||||||||||||
| Basic | 35,609 | 35,913 | ||||||||||||||||
| Diluted | 36,103 | 36,263 | ||||||||||||||||
|
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED) |
||||||||||||||||||
|
March 31,
2019 |
December 31,
2018 |
|||||||||||||||||
| ASSETS | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 124,831 | $ | 142,655 | ||||||||||||||
| Accounts receivable, net | 1,723,817 | 1,931,736 | ||||||||||||||||
| Inventories | 187,146 | 148,503 | ||||||||||||||||
| Other current assets | 117,199 | 115,683 | ||||||||||||||||
| Total current assets | 2,152,993 | 2,338,577 | ||||||||||||||||
| Property and equipment, net | 74,038 | 72,954 | ||||||||||||||||
| Goodwill | 166,073 | 166,841 | ||||||||||||||||
| Intangible assets, net | 108,856 | 112,179 | ||||||||||||||||
| Deferred income taxes | 7,345 | 7,967 | ||||||||||||||||
| Other assets | 247,162 | 77,429 | ||||||||||||||||
| $ | 2,756,467 | $ | 2,775,947 | |||||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable – trade | $ | 897,609 | $ | 978,104 | ||||||||||||||
| Accounts payable – inventory financing facility | 260,160 | 304,130 | ||||||||||||||||
| Accrued expenses and other current liabilities | 183,678 | 190,733 | ||||||||||||||||
| Current portion of long-term debt | 1,161 | 1,395 | ||||||||||||||||
| Deferred revenue | 66,646 | 62,300 | ||||||||||||||||
| Total current liabilities | 1,409,254 | 1,536,662 | ||||||||||||||||
| Long-term debt | 113,227 | 195,525 | ||||||||||||||||
| Deferred income taxes | 604 | 683 | ||||||||||||||||
| Other liabilities | 207,164 | 56,088 | ||||||||||||||||
| 1,730,249 | 1,788,958 | |||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||||
| Preferred stock | — | — | ||||||||||||||||
| Common stock | 358 | 355 | ||||||||||||||||
| Additional paid-in capital | 321,606 | 323,622 | ||||||||||||||||
| Retained earnings | 743,992 | 704,665 | ||||||||||||||||
|
Accumulated other comprehensive loss – foreign currency |
(39,738 | ) | (41,653 | ) | ||||||||||||||
| Total stockholders’ equity | 1,026,218 | 986,989 | ||||||||||||||||
| $ | 2,756,467 | $ | 2,775,947 | |||||||||||||||
|
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) |
||||||||||||||||||
|
Three Months Ended
March 31, |
||||||||||||||||||
| 2019 | 2018 | |||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||
| Net earnings | $ | 39,327 | $ | 33,003 | ||||||||||||||
|
Adjustments to reconcile net earnings to net cash provided by |
||||||||||||||||||
| Depreciation and amortization of property and equipment | 5,044 | 5,433 | ||||||||||||||||
| Amortization of intangible assets | 3,823 | 3,611 | ||||||||||||||||
| Provision for losses on accounts receivable | 1,413 | 346 | ||||||||||||||||
| Write-downs of inventories | 1,408 | 629 | ||||||||||||||||
| Write-off of property and equipment | — | 303 | ||||||||||||||||
| Non-cash stock-based compensation | 4,115 | 3,184 | ||||||||||||||||
| Deferred income taxes | 547 | 979 | ||||||||||||||||
| Changes in assets and liabilities: | ||||||||||||||||||
| Decrease in accounts receivable | 210,691 | 184,877 | ||||||||||||||||
| (Increase) decrease in inventories | (39,658 | ) | 4,444 | |||||||||||||||
| Increase in other assets | (107,314 | ) | (25,514 | ) | ||||||||||||||
| Decrease in accounts payable | (82,246 | ) | (97,104 | ) | ||||||||||||||
| Increase in deferred revenue | 7,117 | 16,177 | ||||||||||||||||
| Increase in accrued expenses and other liabilities | 77,646 | 20,377 | ||||||||||||||||
| Net cash provided by operating activities | 121,913 | 150,745 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||
| Purchases of property and equipment | (5,352 | ) | (5,044 | ) | ||||||||||||||
| Acquisitions, net of cash and cash equivalents acquired | (762 | ) | — | |||||||||||||||
| Net cash used in investing activities | (6,114 | ) | (5,044 | ) | ||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||
| Borrowings on senior revolving credit facility | 49,936 | 276,684 | ||||||||||||||||
| Repayments on senior revolving credit facility | (49,936 | ) | (392,184 | ) | ||||||||||||||
| Borrowings on accounts receivable securitization financing facility | 1,010,500 | 1,024,000 | ||||||||||||||||
| Repayments on accounts receivable securitization financing facility | (1,092,500 | ) | (955,000 | ) | ||||||||||||||
| Repayments under Term Loan A | — | (3,281 | ) | |||||||||||||||
| Repayments under other financing agreements | — | (1,234 | ) | |||||||||||||||
| Payments on finance lease obligations | (542 | ) | (288 | ) | ||||||||||||||
| Net repayments under inventory financing facility | (43,970 | ) | (91,366 | ) | ||||||||||||||
|
Payment of payroll taxes on stock-based compensation through |
(6,128 | ) | (2,884 | ) | ||||||||||||||
| Repurchases of common stock | — | (7,679 | ) | |||||||||||||||
| Net cash used in financing activities | (132,640 | ) | (153,232 | ) | ||||||||||||||
|
Foreign currency exchange effect on cash, cash equivalents and |
(986 | ) | 1,937 | |||||||||||||||
| Decrease in cash, cash equivalents and restricted cash | (17,827 | ) | (5,594 | ) | ||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 144,293 | 107,445 | ||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 126,466 | $ | 101,851 | ||||||||||||||
|
INSIGHT ENTERPRISES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) |
|||||||||||||||||||
|
Three Months Ended
March 31, |
|||||||||||||||||||
| 2019 | 2018 | ||||||||||||||||||
|
Adjusted Consolidated Earnings from Operations: |
|||||||||||||||||||
| GAAP consolidated EFO | $ | 57,039 | $ | 50,439 | |||||||||||||||
| Severance and restructuring expenses | 370 | 1,644 | |||||||||||||||||
| Adjusted non-GAAP consolidated EFO | $ | 57,409 | $ | 52,083 | |||||||||||||||
| Adjusted Consolidated Net Earnings: | |||||||||||||||||||
| GAAP consolidated net earnings | $ | 39,327 | $ | 33,003 | |||||||||||||||
| Severance and restructuring expenses | 370 | 1,644 | |||||||||||||||||
| Income taxes on non-GAAP adjustments | (100 | ) | (291 | ) | |||||||||||||||
| Adjusted non-GAAP consolidated net earnings | $ | 39,597 | $ | 34,356 | |||||||||||||||
| Adjusted Diluted Earnings Per Share: | |||||||||||||||||||
| GAAP diluted EPS | $ | 1.09 | $ | 0.91 | |||||||||||||||
| Severance and restructuring expenses | 0.01 | 0.05 | |||||||||||||||||
| Income taxes on non-GAAP adjustments | — | (0.01 | ) | ||||||||||||||||
| Adjusted non-GAAP diluted EPS | $ | 1.10 | $ | 0.95 | |||||||||||||||
|
Adjusted North America Earnings from Operations: |
|||||||||||||||||||
| GAAP EFO from North America segment | $ | 45,326 | $ | 42,288 | |||||||||||||||
| Severance and restructuring expenses | 331 | 443 | |||||||||||||||||
|
Adjusted non-GAAP EFO from North America segment |
$ | 45,657 | $ | 42,731 | |||||||||||||||
| Adjusted EMEA Earnings from Operations: | |||||||||||||||||||
| GAAP EFO from EMEA segment | $ | 9,923 | $ | 6,693 | |||||||||||||||
| Severance and restructuring expenses | (85 | ) | 1,074 | ||||||||||||||||
| Adjusted non-GAAP EFO from EMEA segment | $ | 9,838 | $ | 7,767 | |||||||||||||||
| Adjusted APAC Earnings from Operations: | |||||||||||||||||||
| GAAP EFO from APAC segment | $ | 1,790 | $ | 1,458 | |||||||||||||||
| Severance and restructuring expenses | 124 | 127 | |||||||||||||||||
| Adjusted non-GAAP EFO from APAC segment | $ | 1,914 | $ | 1,585 | |||||||||||||||
|
Three Months Ended
March 31, |
|||||||||||||||||||
| 2019 | 2018 | ||||||||||||||||||
| Adjusted free cash flow: | |||||||||||||||||||
| Net cash provided by operating activities | $ | 121,913 | $ | 150,745 | |||||||||||||||
| Purchases of property and equipment | (5,352 | ) | (5,044 | ) | |||||||||||||||
| Net repayments under inventory financing facility | (43,970 | ) | (91,366 | ) | |||||||||||||||
| Adjusted non-GAAP free cash flow | $ | 72,591 | $ | 54,335 | |||||||||||||||
|
Twelve Months Ended
March 31, |
|||||||||||||||||||
| 2019 | 2018 | ||||||||||||||||||
| Adjusted return on invested capital: | |||||||||||||||||||
| GAAP consolidated EFO | $ | 240,082 |
$ |
206,751 |
|||||||||||||||
| Severance and restructuring expenses | 2,151 |
|
5,951 |
||||||||||||||||
| Loss on sale of foreign entity | — |
|
3,646 |
||||||||||||||||
| Acquisition-related expenses | 282 |
|
382 |
||||||||||||||||
| Adjusted non-GAAP consolidated EFO | 242,515 |
|
216,730 |
||||||||||||||||
| Income tax expense* | 66,692 |
|
59,601 |
||||||||||||||||
| Adjusted non-GAAP consolidated EFO, net of tax | $ | 175,823 |
$ |
157,129 |
|||||||||||||||
| Average stockholders’ equity** | $ | 948,764 |
$ |
814,107 |
|||||||||||||||
| Average debt** | 200,748 |
|
360,289 |
||||||||||||||||
| Average cash** | (145,380 | ) |
|
(164,194 |
) | ||||||||||||||
| Invested Capital | $ | 1,004,132 |
$ |
1,010,202 |
|||||||||||||||
| Adjusted non-GAAP ROIC (from GAAP consolidated EFO) *** | 17.33 | % |
|
14.84 |
% | ||||||||||||||
| Adjusted non-GAAP ROIC (from non-GAAP consolidated EFO) **** | 17.51 | % |
|
15.55 |
% | ||||||||||||||
| * | Assumed tax rate of 27.5% for 2019 and 2018. | ||
| ** | Average of previous five quarters. | ||
| *** |
Computed as GAAP consolidated EFO, net of tax of $66,023 and $56,857 for the twelve months ended March 31, 2019 and 2018, respectively, divided by invested capital. |
||
| **** |
Computed as Adjusted non-GAAP consolidated EFO, net of tax, divided by invested capital. |
||
Contacts
Glynis Bryan
Chief Financial Officer
480-333-3390
[email protected]
Helen Johnson
Senior VP, Finance
480-333-3234
[email protected]
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Cannabis
Cannabis Capsule Global Analysis Report 2024: Market to Reach $79.2 Billion in 2028 – Forecast to 2033 Featuring GW Pharmaceuticals, Trulieve Cannabis, Green Thumb Industries, Tilray, Columbia Care
Innocan
Innocan Pharma Initiates FDA Approval Process for Liposome Injection Therapy for Chronic Pain
With its submission of a Pre-IND Meeting Request Letter, Innocan initiates the regulatory process with the U.S. Food and Drug Administration (FDA) for the approval of its prolonged CBD release technology for human use
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
Logo – https://mma.prnewswire.com/media/2046271/3968398/Innocan_Pharma_Corporation_Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/innocan-pharma-initiates-fda-approval-process-for-liposome-injection-therapy-for-chronic-pain-302122779.html
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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