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Graham Corporation Reports Fiscal 2019 Fourth Quarter and Full Year Results
Reading Time: 14 minutes
-
Revenue grew 18% to $92 million for fiscal 2019; loss per share
was $0.03, adjusted EPS was $0.51 -
Backlog remains strong at $132 million; Fiscal 2019 book-to-bill
ratio was 1.1x -
Expecting fiscal 2020 revenue between $95 million and $100
million; represents 14% to 20% growth, excluding commercial nuclear
utility business which is for sale
BATAVIA, N.Y.–(BUSINESS WIRE)–Graham
Corporation (NYSE: GHM), a global business that designs,
manufactures and sells critical equipment for the oil refining,
petrochemical, power and defense industries, today reported financial
results for its fourth quarter and year ended March 31, 2019 (“fiscal
2019”).
Net sales in the fourth quarter of fiscal 2019 were $23.6 million, up 7%
compared with the fourth quarter of the fiscal year ended March 31, 2018
(“fiscal 2018”). Net loss in the fiscal 2019 fourth quarter was $4.6
million, or $0.46 loss per diluted share. Excluding non-cash charges for
goodwill and intangible and other long-lived asset impairments, adjusted
net income and adjusted EPS, both of which are non-GAAP measures, for
the fourth quarter of fiscal 2019 were $0.8 million, and $0.08,
respectively. Net income and earnings per share (“EPS”) in the fiscal
2018 fourth quarter were $0.8 million and $0.09, respectively. Excluding
the impact of the U.S. Tax Cuts and Jobs Act tax reform legislation
passed in December 2017, adjusted net income and adjusted EPS, both of
which are non-GAAP measures, for the fourth quarter of fiscal 2018 were
$0.6 million and $0.07, respectively. Refer to the Company’s disclosures
regarding the use of non-GAAP measures later in this release.
Net sales for fiscal 2019 were $91.8 million, up 18% compared with $77.5
million in fiscal 2018. Fiscal 2019 net loss was $0.3 million, or a loss
of $0.03 per diluted share, compared with a net loss of $9.8 million, or
$1.01 per diluted share, in fiscal 2018. Excluding unusual charges,
adjusted net income for fiscal 2019 was $5.0 million, or $0.51 per
diluted share, compared with adjusted net income of $1.8 million, or
$0.18 per diluted share, in fiscal 2018, all on a non-GAAP basis. Refer
to the Company’s disclosures regarding the use of non-GAAP measures
later in this release.
James R. Lines, Graham’s President and Chief Executive Officer,
commented, “We had solid revenue growth in the quarter and the year, as
expected. However, the mix of projects and performance of our commercial
nuclear utility business dampened gross margins throughout the year.
While disappointing, we remain focused on solid execution and quality
service for our customers, and strong cost discipline to strengthen our
earnings potential. Likewise, we will continue to invest in our business
in line with our strategy to drive our long-term future.”
He added, “Our investments in personnel for our strategy are affecting
margins in the near term but remain important as we identify and capture
opportunities to achieve our growth and profitability goals. We are
encouraged by our solid order activity and strong backlog, which give us
confidence in a healthy outlook for the coming fiscal year and beyond.”
Fourth Quarter Fiscal 2019 Sales Summary
(See
accompanying financial tables for a breakdown of sales by industry and
region)
Consolidated net sales were up $1.4 million, or 7%, driven by $3.8
million and $1.7 million increases in sales to the
chemical/petrochemical and refining industries, respectively. These
increases were partially offset by $2.8 million and $1.2 million of
lower sales to the Company’s other commercial, industrial and defense
markets, and the power industry, respectively.
From a geographic perspective, U.S. sales represented 70% of
consolidated sales in the fiscal 2019 fourth quarter compared with 66%
in the fourth quarter of fiscal 2018. International sales were 30% of
consolidated sales in the fiscal 2019 quarter, compared with 34% in the
prior-year comparable period. U.S. based sales were driven by the
chemical/petrochemical and refining markets noted above.
Fluctuations in Graham’s sales among geographic locations and
industries can vary measurably from quarter-to-quarter based on the
timing and magnitude of projects. Graham does not believe that
such quarter-to-quarter fluctuations are indicative of business trends,
which it believes are more apparent on a trailing twelve month basis.
Fourth Quarter Fiscal 2019 Operating Performance Review
| ($ in millions except per share data) | Q4 FY19 | Q4 FY18 | Change | |||||||||
| Net sales | $ | 23.6 | $ | 22.2 | $ | 1.4 | ||||||
| Gross profit | $ | 4.8 | $ | 5.0 | $ | (0.1 | ) | |||||
| Gross margin | 20.3 | % | 22.4 | % | ||||||||
| Operating (loss) profit | $ | (5.8 | ) | $ | 0.7 | $ | (6.5 | ) | ||||
| Operating margin | (24.7 | %) | 3.3 | % | ||||||||
| Net (loss) income | $ | (4.6 | ) | $ | 0.8 | $ | (5.4 | ) | ||||
| Diluted EPS | $ | (0.46 | ) | $ | 0.09 | $ | (0.55 | ) | ||||
| Non-GAAP financial measures: | ||||||||||||
| Adjusted operating profit | $ | 0.6 | $ | 0.7 | $ | (0.1 | ) | |||||
| Adjusted operating margin | 2.6 | % | 3.3 | % | ||||||||
| Adjusted net income | $ | 0.8 | $ | 0.6 | $ | 0.2 | ||||||
| Adjusted diluted EPS | $ | 0.08 | $ | 0.07 | $ | 0.01 | ||||||
| Adjusted EBITDA | $ | 1.4 | $ | 1.4 | $ | (0.0 | ) | |||||
| Adjusted EBITDA margin | 5.8 | % | 6.3 | % | ||||||||
Refer to pages 11 and 12 of this press release.
Graham believes that, when used in conjunction with measures prepared in
accordance with GAAP, adjusted operating profit, adjusted operating
margin (adjusted operating profit as a percentage of sales), adjusted
net income, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA
margin (adjusted EBITDA as a percentage of sales), which are non-GAAP
measures, help in the understanding of its operating performance.
Moreover, Graham’s credit facility also contains ratios based on EBITDA. See
the attached tables for additional important disclosures regarding
Graham’s use of adjusted operating profit, adjusted operating margin,
adjusted net income, adjusted diluted EPS, adjusted EBITDA and
adjusted EBITDA margin as well as reconciliations of operating (loss)
profit to adjusted operating profit and reconciliations of net (loss)
income to adjusted net income and adjusted EBITDA. This
disclosure regarding Graham’s use of non-GAAP measures for the fourth
quarters also applies to fiscal year data reflected later in this
release.
The results for the fiscal 2019 and 2018 fourth quarters were relatively
comparable on a non-GAAP basis, with adjusted EPS of $0.08 in the fiscal
2019 fourth quarter compared with $0.07 in the fiscal 2018 fourth
quarter. While gross margin was lower in the fiscal 2019 quarter, net
income benefited from higher interest and other income.
Fourth quarter fiscal 2019 gross profit and margin were unfavorably
impacted by project mix, including the commercial nuclear utility
business.
Selling, general and administrative (“SG&A”) expenses were $4.2 million
in the fourth quarters of both fiscal 2019 and 2018. SG&A as a percent
of sales was approximately 18% and 19% in the fourth quarters of fiscal
2019 and fiscal 2018, respectively.
Given ongoing challenges in the nuclear industry faced by relatively
small market participants, during the fourth quarter of fiscal 2019 the
Company decided to divest its commercial nuclear utility business,
Energy Steel. Upon evaluating the potential market value of the Energy
Steel business, Graham determined that the intangible assets, goodwill,
and other long-lived assets were impaired. Accordingly, the Company
recorded a $6.4 million impairment charge, $5.3 million net of tax, in
the fiscal 2019 fourth quarter.
Jeffrey Glajch, Graham’s Vice President and Chief Financial Officer,
noted, “While Energy Steel was successful in prior years, the changes in
the commercial nuclear utility industry over the last several years have
caused significant erosion of this business. Accordingly, we have
decided that it has more potential with a different partner and we are
in discussions to sell the business.”
During the fourth quarter of fiscal 2019, Graham’s effective tax rate
was not meaningful due to the non-deductibility of the goodwill portion
of the commercial nuclear utility business write down. The prior year’s
fourth quarter effective tax rate benefited from the impact of adopting
the 2017 U.S. Tax Cuts and Jobs Act.
Fourth quarter fiscal 2019 adjusted net income and adjusted diluted EPS
excluded $5.3 million of net-of-tax impairment charges. Fourth quarter
fiscal 2018 adjusted net income and adjusted diluted EPS excluded a $0.2
million tax benefit for adoption of the new federal tax rates as a
result of the tax reform legislation adopted in December 2017.
Adjusted EBITDA (defined as consolidated net (loss) income before net
interest income, income taxes, depreciation and amortization, goodwill
and other impairments and other charges associated with the revaluation
of the commercial nuclear utility business, and a nonrecurring
restructuring charge, where applicable) was approximately the same
during the fiscal 2019 and fiscal 2018 fourth quarters.
Full Year Fiscal 2019 Review
| ($ in millions except per share data) | FY19 | FY18 | Change | ||||||||
| Net sales | $ | 91.8 | $ | 77.5 | $ | 14.3 | |||||
| Gross profit | $ | 21.9 | $ | 17.0 | $ | 4.9 | |||||
| Gross margin | 23.9 | % | 21.9 | % | |||||||
| Operating loss | $ | (2.4 | ) | $ | (13.9 | ) | $ | 11.5 | |||
| Operating margin | (2.6 | %) | (18.0 | %) | |||||||
| Net loss | $ | (0.3 | ) | $ | (9.8 | ) | $ | 9.5 | |||
| Diluted EPS | $ | (0.03 | ) | $ | (1.01 | ) | $ | 0.98 | |||
| Non-GAAP financial measures: | |||||||||||
| Adjusted operating profit | $ | 4.0 | $ | 1.5 | $ | 2.5 | |||||
| Adjusted operating margin | 4.4 | % | 1.9 | % | |||||||
| Adjusted net income | $ | 5.0 | $ | 1.8 | $ | 3.2 | |||||
| Adjusted diluted EPS | $ | 0.51 | $ | 0.18 | $ | 0.33 | |||||
| Adjusted EBITDA | $ | 7.1 | $ | 4.2 | $ | 2.9 | |||||
| Adjusted EBITDA margin | 7.7 | % | 5.4 | % | |||||||
Refer to pages 11 and 12 of this press release.
The improvement in operating loss, operating margin, net loss and
diluted EPS during fiscal 2019 compared with fiscal 2018 was primarily
driven by the change in impairment charges for goodwill and intangible
and other long-lived assets. Adjusted net income and adjusted EPS
exclude such charges as well as other items, resulting in a $3.2 million
and $0.33 improvement over the prior year, respectively, driven by
higher sales and improved operating performance.
International sales grew 27% to $32.4 million in fiscal 2019 and
represented 35% of total sales, compared with $25.6 million, or 33% of
sales in the prior year. Sales to the U.S. grew 14% to $59.4 million, or
65% of fiscal 2019 net sales, compared with $51.9 million, or 67% of
fiscal 2018 net sales.
The increase in gross profit and margin were driven by higher volume
stemming from the 18% increase in sales when compared with the prior
year, as well as ongoing improvement to backlog quality and project mix,
partially offset by higher production costs.
SG&A in fiscal 2019 was $17.9 million, up 13%, or $2.1 million. The
increase in SG&A was primarily due to higher compensation costs for new
personnel, higher sales-related costs, and higher performance-based
compensation. As a percent of sales, SG&A was 20% for both fiscal 2019
and 2018.
Similar to the fourth quarter, Graham’s effective tax rate for fiscal
2019 was not meaningful due to the non-deductibility of the goodwill
portion of the commercial nuclear utility business write down. Fiscal
2018 results were impacted by a $0.8 million favorable adjustment to
income taxes upon implementation of the 2017 U.S. Tax Cuts and Jobs Act,
which also had a beneficial impact on the fiscal 2019 overall effective
tax rate.
Fiscal 2019 adjusted net income and adjusted diluted EPS excluded $5.3
million of net-of-tax impairment charges. Fiscal 2018 adjusted net
income and adjusted diluted EPS excluded $12.0 million of net-of-tax
impairment charges, $0.2 million of net-of-tax bad debt charges
associated with the revaluation of the Company’s commercial nuclear
utility business, $0.2 million for a net-of-tax nonrecurring
restructuring charge and a $0.8 million tax benefit for adoption of the
new federal tax rates as a result of the 2017 U.S. Tax Cuts and Jobs Act.
Adjusted EBITDA for fiscal 2019 benefited from higher revenue and gross
margin improvement, partially offset by investments in SG&A.
Balance Sheet Strength Supports Growth
Cash, cash equivalents and investments at March 31, 2019 were $77.8
million, up from $76.5 million at March 31, 2018.
Fiscal 2019 cash provided by operations was $7.9 million, compared with
$8.5 million in fiscal 2018. The decrease was primarily the result of
timing of changes in working capital, partially offset by higher
adjusted net income.
Capital expenditures were $2.1 million in fiscal 2019, approximately the
same level as the prior year. The Company expects capital expenditures
for fiscal 2020 to be between $2.5 million and $2.8 million, the
majority of which are expected to be used for productivity enhancements.
Dividend payments were $3.8 million and $3.5 million in fiscal 2019 and
fiscal 2018, respectively.
Graham had neither borrowings under its credit facility, nor any
long-term debt outstanding, at March 31, 2019.
Backlog Level Indicates Continued Growth
Backlog at the end of fiscal 2019 was $132.1 million, near its record
level of $133.6 million at the end of the third quarter, and up 12% from
$117.9 million at the end of the prior fiscal year. Excluding the
commercial nuclear utility business which is held for sale, backlog at
the end of fiscal 2019 was $124.1 million.
The Company believes that its backlog mix by industry highlights the
success of its diversification strategy to increase sales to the U.S.
Navy. Backlog by industry at March 31, 2019 was approximately:
- 49% for U.S. Navy projects
- 22% for refinery projects
- 19% for chemical/petrochemical projects
-
7% for power projects, including commercial nuclear utility (of which
89% is for the business held for sale) - 3% for other industrial applications
The expected timing for the Company’s backlog to convert to sales is as
follows:
- Within next 12 months: 55% to 60%
- Within 12 to 24 months: 10% to 15%
- Beyond 24 months: 25% to 35%
Orders were $21.6 million in the fourth quarter of fiscal 2019, driven
by the refining and chemical/petrochemical industries in North America.
In the fiscal 2019 fourth quarter, orders from U.S. and international
customers were nearly evenly split with $11.1 million from the U.S and
$10.5 million from international markets. This compares with total
orders of $43.5 million in the fourth quarter of fiscal 2018, of which
81% were from the U.S. and 19% were from international markets. The
fiscal 2018 fourth quarter orders included $24.5 million, or 56% of the
total, from other commercial, industrial and defense markets, which
includes the U.S. Navy.
Orders for fiscal 2019 were $101.2 million, compared with $112.2 million
in fiscal 2018. Excluding orders from the Company’s other commercial,
industrial and defense markets which benefited from significant U.S.
Navy orders in fiscal 2018, orders from the Company’s other markets
increased by $15.9 million in fiscal 2019, driven by orders from the
chemical/petrochemical industry which were up $20.8 million. Orders from
U.S. customers were $62.2 million, or 61% of the total, and orders from
international markets were $39 million, or 39% of the total, in fiscal
2019. Approximately 35% of international orders were from the Middle
East, 27% were from Canada and 27% were from Asia. In fiscal 2018, 69%
of orders were from U.S. customers and 31% were international. The
fiscal 2019 book-to-bill ratio was 1.1x.
Graham expects that the balance between domestic and international
orders, as well as orders by industry, will continue to be variable
between quarters.
Introducing FY 2020 Guidance
Graham is also announcing its fiscal 2020 guidance, as follows:
-
Revenue anticipated to be between $95 million and $100 million,
excluding the commercial nuclear utility business which is held for
sale. For fiscal 2019, consolidated revenue excluding that business
was $83.5 million. - Gross margin expected to be between 23% and 24%
- SG&A expense expected to be between $17 million and $18 million
- Effective tax rate anticipated to be approximately 20%
Mr. Lines concluded, “I believe that the energy cycle continues to show
signs of recovery, which is embedded in our fiscal 2020 expectation for
14% to 20% revenue growth for our ongoing business. Our strong pipeline
of projects combined with the Navy work currently in backlog provides us
solid confidence in our outlook for the year. Additionally, we remain
very active in the pursuit of strategic opportunities to put our capital
to work and complement our organic growth initiatives.”
Webcast and Conference Call
Graham’s management will host a conference call and live webcast today
at 11:00 a.m. Eastern Time to review its financial condition and
operating results for the fourth quarter and full year fiscal 2019, as
well as its strategy and outlook. The review will be accompanied by a
slide presentation which will be made available immediately prior to the
conference call on Graham’s website at www.graham-mfg.com
under the heading “Investor Relations.” A question-and-answer session
will follow the formal presentation.
Graham’s conference call can be accessed by calling (201) 689-8560.
Alternatively, the webcast can be monitored on Graham’s website at www.graham-mfg.com
under the heading “Investor Relations.”
A telephonic replay will be available from 2:00 p.m. ET today through
Thursday, June 6, 2019. To listen to the archived call, dial (412)
317-6671 and enter conference ID number 13689951. A transcript of the
call will be placed on Graham’s website, once available.
ABOUT GRAHAM CORPORATION
Graham is a global business that designs, manufactures and sells
critical equipment for the energy, defense and chemical/petrochemical
industries. Energy markets include oil refining, cogeneration, and
alternative power. For the defense industry, the Company’s equipment is
used in nuclear propulsion power systems for the U.S. Navy. Graham’s
global brand is built upon world-renowned engineering expertise in
vacuum and heat transfer technology, responsive and flexible service and
unsurpassed quality. Graham designs and manufactures custom-engineered
ejectors, vacuum pumping systems, surface condensers and vacuum systems.
Graham’s equipment can also be found in other diverse applications such
as metal refining, pulp and paper processing, water heating,
refrigeration, desalination, food processing, pharmaceutical, heating,
ventilating and air conditioning. Graham’s reach spans the globe and its
equipment is installed in facilities from North and South America to
Europe, Asia, Africa and the Middle East.
Graham routinely posts news and other important information on its
website, www.graham-mfg.com,
where additional comprehensive information on Graham Corporation and its
subsidiaries can be found.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements are subject to risks, uncertainties and
assumptions and are identified by words such as “expects,” “estimates,”
“confidence,” “projects,” “typically,” “outlook,” “anticipates,”
“believes,” “appears,” “could,” “opportunities,” “seeking,” “plans,”
“aim,” “pursuit,” “look towards” and other similar words. All statements
addressing operating performance, events, or developments that Graham
Corporation expects or anticipates will occur in the future, including
but not limited to, expected expansion and growth opportunities within
its domestic and international markets, anticipated revenue, the timing
of conversion of backlog to sales, market presence, profit margins, tax
rates, foreign sales operations, its ability to improve cost
competitiveness, customer preferences, changes in market conditions in
the industries in which it operates, changes in commodities prices, the
effect on its business of volatility in commodities prices, changes in
general economic conditions and customer behavior, forecasts regarding
the timing and scope of the economic recovery in its markets, its
acquisition and growth strategy and the expected performance of Energy
Steel & Supply Co. and its operations in China and other international
locations, are forward-looking statements. Because they are
forward-looking, they should be evaluated in light of important risk
factors and uncertainties. These risk factors and uncertainties are more
fully described in Graham Corporation’s most recent Annual Report filed
with the Securities and Exchange Commission, included under the heading
entitled “Risk Factors.”
Should one or more of these risks or uncertainties materialize, or
should any of Graham Corporation’s underlying assumptions prove
incorrect, actual results may vary materially from those currently
anticipated. In addition, undue reliance should not be placed on Graham
Corporation’s forward-looking statements. Except as required by law,
Graham Corporation disclaims any obligation to update or publicly
announce any revisions to any of the forward-looking statements
contained in this news release.
FINANCIAL TABLES FOLLOW.
| Graham Corporation | |||||||||||||||||||||||
| Fourth Quarter Fiscal 2019 | |||||||||||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||||||||||
|
(Amounts in thousands, except per share data) |
|||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||||
| 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||
| Net sales | $ | 23,641 | $ | 22,178 | 7 | % | $ | 91,831 | $ | 77,534 | 18 | % | |||||||||||
| Cost of products sold | 18,843 | 17,218 | 9 | % | 69,922 | 60,559 | 15 | % | |||||||||||||||
| Gross profit | 4,798 | 4,960 | (3 | %) | 21,909 | 16,975 | 29 | % | |||||||||||||||
| Gross margin | 20.3 | % | 22.4 | % | 23.9 | % | 21.9 | % | |||||||||||||||
| Other expenses and income: | |||||||||||||||||||||||
| Selling, general and administrative | 4,123 | 4,171 | (1 | %) | 17,641 | 15,533 | 14 | % | |||||||||||||||
| Selling, general and administrative – amortization | 59 | 59 | 0 | % | 237 | 236 | 0 | % | |||||||||||||||
| Goodwill and other impairments | 6,449 | – | N/A | 6,449 | 14,816 | (56 | %) | ||||||||||||||||
| Restructuring charge | – | – | N/A | – | 316 | (100 | %) | ||||||||||||||||
| Operating (loss) profit | (5,833 | ) | 730 | N/A | (2,418 | ) | (13,926 | ) | (83 | %) | |||||||||||||
| Operating margin | (24.7 | %) | 3.3 | % | (2.6 | %) | (18.0 | %) | |||||||||||||||
| Other income | (205 | ) | (120 | ) | N/A | (823 | ) | (478 | ) | 72 | % | ||||||||||||
| Interest income | (418 | ) | (151 | ) | 177 | % | (1,462 | ) | (606 | ) | 141 | % | |||||||||||
| Interest expense | 4 | 4 | 0 | % | 12 | 12 | 0 | % | |||||||||||||||
| (Loss) income before provision for income taxes | (5,214 | ) | 997 | N/A | (145 | ) | (12,854 | ) | (99 | %) | |||||||||||||
| (Benefit) provision for income taxes | (661 | ) | 164 | N/A | 163 | (3,010 | ) | N/A | |||||||||||||||
| Net (loss) income | $ | (4,553 | ) | $ | 833 | N/A | $ | (308 | ) | $ | (9,844 | ) | (97 | %) | |||||||||
| Per share data: | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net (loss) income | $ | (0.46 | ) | $ | 0.09 | N/A | $ | (0.03 | ) | $ | (1.01 | ) | (97 | %) | |||||||||
| Diluted: | |||||||||||||||||||||||
| Net (loss) income | $ | (0.46 | ) | $ | 0.09 | N/A | $ | (0.03 | ) | $ | (1.01 | ) | (97 | %) | |||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 9,837 | 9,772 | 9,823 | 9,764 | |||||||||||||||||||
| Diluted | 9,837 | 9,781 | 9,823 | 9,764 | |||||||||||||||||||
| Dividends declared per share | $ | 0.10 | $ | 0.09 | $ | 0.39 | $ | 0.36 | |||||||||||||||
| N/A: Not Applicable | |||||||||||||||||||||||
| Graham Corporation | |||||||
| Fourth Quarter Fiscal 2019 | |||||||
| Consolidated Balance Sheets | |||||||
|
(Amounts in thousands, except per share data) |
|||||||
| March 31, | |||||||
| 2019 | 2018 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 15,021 | $ | 40,456 | |||
| Investments | 62,732 | 36,023 | |||||
| Trade accounts receivable, net of allowances ($33 and $339 | |||||||
| at March 31, 2019 and 2018, respectively) | 17,582 | 17,026 | |||||
| Unbilled revenue | 7,522 | 8,079 | |||||
| Inventories | 24,670 | 11,566 | |||||
| Prepaid expenses and other current assets | 1,333 | 772 | |||||
| Income taxes receivable | 1,073 | 1,478 | |||||
| Assets held for sale | 4,850 | – | |||||
| Total current assets | 134,783 | 115,400 | |||||
| Property, plant and equipment, net | 17,071 | 17,052 | |||||
| Prepaid pension asset | 4,267 | 4,369 | |||||
| Goodwill | – | 1,222 | |||||
| Permits | – | 1,700 | |||||
| Other intangible assets, net | – | 3,388 | |||||
| Other assets | 149 | 202 | |||||
| Total assets | $ | 156,270 | $ | 143,333 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities: | |||||||
| Current portion of capital lease obligations | $ | 51 | $ | 88 | |||
| Accounts payable | 12,405 | 16,151 | |||||
| Accrued compensation | 5,126 | 4,958 | |||||
| Accrued expenses and other current liabilities | 2,933 | 2,885 | |||||
| Customer deposits | 30,847 | 13,213 | |||||
| Liabilities held for sale | 3,525 | – | |||||
| Total current liabilities | 54,887 | 37,295 | |||||
| Capital lease obligations | 95 | 55 | |||||
| Deferred income tax liability | 1,056 | 1,427 | |||||
| Accrued pension liability | 662 | 565 | |||||
| Accrued postretirement benefits | 604 | 642 | |||||
| Total liabilities | 57,304 | 39,984 | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, $1.00 par value, 500 shares authorized | – | – | |||||
| Common stock, $.10 par value, 25,500 shares authorized | |||||||
|
10,650 and 10,579 shares issued and 9,843 and 9,772 shares |
|||||||
| respectively | 1,065 | 1,058 | |||||
| Capital in excess of par value | 25,277 | 23,826 | |||||
| Retained earnings | 93,847 | 99,011 | |||||
| Accumulated other comprehensive loss | (8,833 | ) | (8,250 | ) | |||
| Treasury stock (807 shares at each of March 31, 2019 and 2018) | (12,390 | ) | (12,296 | ) | |||
| Total stockholders’ equity | 98,966 | 103,349 | |||||
| Total liabilities and stockholders’ equity | $ | 156,270 | $ | 143,333 | |||
Contacts
For more information:
Jeffrey F. Glajch
Vice
President – Finance and CFO
Phone: (585) 343-2216
jglajch@graham-mfg.com
Deborah K. Pawlowski / Karen L. Howard
Kei Advisors LLC
Phone:
(716) 843-3908 / (716) 843-3942
dpawlowski@keiadvisors.com
/ khoward@keiadvisors.com
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Innocan
Innocan Pharma Submits Investigational New Animal Drug Application to FDA’s Veterinary Center
HERZLIYA, Israel and CALGARY, AB, July 26, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), a pioneer in the pharmaceutical and biotechnology industries, is pleased to announce that the FDA’s Center for Veterinary Medicine (CVM) has granted the Company a sponsor fee waiver and assigned an Investigational New Animal Drug (INAD) number for its LPT-CBD (Liposome Platform Technology-Cannabidiol) product. This represents a significant step for the Company, as an INAD designation facilitates correspondence and data exchange with CVM to support LPT-CBD development as a new veterinary drug.
The Company further announced that following the assessment of LPT-CBD’s scientific package, the CVM recognized Innocan’s contribution to pursuing innovative animal drug products and technology and granted the company a sponsor fee waiver for fiscal year 2024.
Innocan’s LPT-CBD is a proprietary drug delivery platform designed to provide prolonged-release CBD for chronic pain and well-being management in animals. Over the past year, repeated administration of LPT-CBD in dogs and other animals has demonstrated both efficacy and tolerability, providing sufficient evidence for the INAD application.
“We are thrilled by CVM’s response,” said Prof. Chezy Barenholz, CSO of Innocan Pharma. “The granted INAD will allow us to advance the investigational studies of LPT-CBD and share knowledge to support future discussions with CVM on LPT-CBD’s development plan. Moreover, the fee waiver, granted by CVM, supports our development and pursuit of innovative animal drug products and technology, further validating our approach and potential impact in veterinary medicine.”
Dr. Eyal Kalo, R&D Director at Innocan, added, “LPT-CBD is a unique technology that has proven itself worthy of the INAD fee waiver granted by CVM. This will streamline our efforts to deliver a unique solution for chronic pain management to the animal market.”
About Innocan Pharma:
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 comprises with 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 two indications: Epilepsy and 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 developing on advanced targeted online sales. https://innocanpharma.com/
Contact Information:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1 5162104025
+972-54-3012842
+442037699377
info@innocanpharma.com
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution Regarding Forward-Looking Information
Certain information set forth in this news release, including, without limitation, the Company’s plans for human trials of its LPT-CBD platform, 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 production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties that 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: global and local (national) economic, political, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and potential disruption of 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). 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. A comprehensive discussion of other risks that impact Innocan can be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedarplus.ca.
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.
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View original content:https://www.prnewswire.co.uk/news-releases/innocan-pharma-submits-investigational-new-animal-drug-application-to-fdas-veterinary-center-302207435.html
Cannabis
Verano Announces the Opening of Zen Leaf Fairless Hills, the Company’s Newest Affiliated Dispensary in Pennsylvania, in Prime New Location
- Zen Leaf Fairless Hills, the Company’s newest affiliated dispensary in Pennsylvania, relocated from its former home in Chester to 203 Lincoln Highway, a busy thoroughfare with daily traffic of over 17,000 vehicles per day1
- As the first medical cannabis dispensary in the city, Zen Leaf Fairless Hills will offer an elevated experience for area patients, including increased convenience and accessibility with numerous point-of-sale stations and kiosks for seamless in-store browsing and ordering
- Verano’s active operations span 13 states, comprised of 142 dispensaries and 13 cultivation and processing facilities with more than 1 million square feet of cultivation capacity
CHICAGO, July 26, 2024 (GLOBE NEWSWIRE) — Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF) (“Verano” or the “Company”), a leading multi-state cannabis company, today announced the opening of Zen Leaf Fairless Hills in Pennsylvania on Friday, July 26th, following a ceremonial ribbon cutting at 11 a.m. local time. Zen Leaf Fairless Hills is located at 203 Lincoln Highway and will be open Monday through Saturday from 9 a.m. to 8 p.m. and Sunday from 10 a.m. to 6 p.m. local time.
The dispensary is located in Bucks County, the fourth largest county in the Commonwealth with a total population of over 630,0002 residents. To increase accessibility and convenience, Zen Leaf Fairless Hills features large in-store kiosks and numerous point-of-sale stations to enhance the browsing and ordering experience for patients. To celebrate the grand opening of Zen Leaf Fairless Hills and following a ceremonial ribbon cutting, patients will be greeted with complimentary deals and doorbusters on featured branded products.
“We are excited to bring the Zen Leaf experience to local patients in Fairless Hills, where our talented team members will continue to deliver hospitality-driven care and top-quality products for local patients,” said George Archos, Verano Founder and Chief Executive Officer. “As the Pennsylvania medical cannabis patient population continues to grow, we are grateful for the opportunity to deepen our roots in Bucks County at our newest Zen Leaf location in the Commonwealth, and look forward to providing a warm and welcoming environment for current and future patients.”
Zen Leaf Fairless Hills adds another convenient outlet for Philadelphia area patients, and solidifies Verano’s footprint in the state as one of the Company’s 18 affiliated Pennsylvania dispensaries. Verano’s Pennsylvania operations also include a state-of-the-art 62,000 square foot cultivation and processing facility in Chester, where the Company produces its signature Verano Reserve flower and Troches, concentrates and vapes; (the) Essence and Savvy flower and extracts; and Avexia RSO cannabis oil and topicals. For additional convenience and accessibility, patients can choose to order ahead at ZenLeafDispensaries.com for express in-store pickup.
About Verano
Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNOF), one of the U.S. cannabis industry’s leading companies based on historical revenue, geographic scope and brand performance, is a vertically integrated, multi-state operator embracing a mission of saying Yes to plant progress and the bold exploration of cannabis. Verano provides a superior cannabis shopping experience in medical and adult use markets under the Zen Leaf™ and MÜV™ dispensary banners, including Cabbage Club™, an innovative annual membership program offering exclusive benefits for cannabis consumers. Verano produces a comprehensive suite of high-quality, regulated cannabis products sold under its diverse portfolio of trusted consumer brands including Verano™, (the) Essence™, MÜV™, Savvy™, BITS™, Encore™, and Avexia™. Verano’s active operations span 13 U.S. states, comprised of 13 production facilities with over 1,000,000 square feet of cultivation capacity. Learn more at Verano.com.
Contacts:
Media
Verano
Steve Mazeika
VP, Communications
Steve.Mazeika@verano.com
Investors
Verano
Julianna Paterra, CFA
VP, Investor Relations
Julianna.Paterra@verano.com
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans, strategies, or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “future”, “scheduled”, “estimates”, “forecasts”, “projects,” “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or may contain statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “will continue”, “will occur” or “will be achieved”. Forward-looking statements involve and are subject to assumptions and known and unknown risks, uncertainties, and other factors which may cause actual events, results, performance, or achievements of the Company to be materially different from future events, results, performance, and achievements expressed or implied by forward-looking statements herein, including, without limitation, the risk factors described in the Company’s annual report on Form 10-K for the year ended December 31, 2023, its quarterly report on Form 10-Q for the quarter ended March 31, 2024 and any subsequent quarterly reports on Form 10-Q, in each case, filed with the U.S. Securities and Exchange Commission at www.sec.gov. The Company makes no assurances and cannot predict the outcome of all or any part of the on-going litigation with Goodness Growth referenced in this press release, including whether the Company will prevail on its Notice of Application and its counterclaim, or whether Goodness Growth will prevail on its claim for damages against the Company. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information or forward-looking statements that are contained or referenced herein, except as may be required in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice regarding forward-looking information and statements.
###
1 Pennsylvania Department of Transportation
2 United States Census Bureau
Cannabis
Unlocking New Horizons in Health: TNR, The Niche Research Reveals the Transformative Power of Minor Cannabinoids
Wilmington, Delaware, July 25, 2024 (GLOBE NEWSWIRE) — Minor cannabinoids refer to the lesser-known compounds found in the cannabis plant, distinct from the well-known THC (tetrahydrocannabinol) and CBD (cannabidiol). While THC and CBD dominate the market, minor cannabinoids such as CBG (cannabigerol), CBC (cannabichromene), and CBN (cannabinol) are gaining attention for their potential therapeutic benefits. These compounds are extracted from both marijuana and hemp plants, with varying legal restrictions depending on their THC content. The minor cannabinoids market is poised for significant growth, driven by increasing consumer awareness and demand for alternative health and wellness products. As regulatory environments around cannabis products evolve, companies are exploring the potential of minor cannabinoids in various applications, including pharmaceuticals, nutraceuticals, cosmetics, and food and beverages.
Minor cannabinoids are being researched for their potential therapeutic effects, including anti-inflammatory, analgesic, and neuroprotective properties. This versatility facilitates product diversification in various industries. Companies are investing in research and development to create novel formulations and delivery methods for minor cannabinoids. This includes nano-emulsions, encapsulation technologies, and controlled-release systems to enhance bioavailability and efficacy. For example, in January 2022, CBDA + CBGA Tincture a new product was launched by Hometown Hero CBD. This 30ml tincture contains 600mg each of CBGA, CBDA, CBG, and CBD. Derived from hemp, the cannabinoids in this tincture comply with legal requirements across all 50 states in the USA. There is an increasing consumer preference for natural as well as plant-based remedies, which in turn is driving the demand for cannabinoid-infused products. This trend is particularly strong among younger demographics seeking alternatives to traditional pharmaceuticals. Evolving regulatory frameworks, particularly in regions like North America and Europe, are creating opportunities for legal market expansion. Regulatory clarity is crucial for market participants to navigate compliance and market entry.
Global Minor Cannabinoids Market: Key Datapoints
|
Market Value in 2023 |
US$ 17.8 Bn |
|
Market Value Forecast by 2034 |
US$ 42.3 Bn |
|
Growth Rate
|
8.2% |
|
Historical Data
|
2016 – 2022 |
|
Base Year
|
2023 |
|
Forecast Data
|
2024 – 2034 |
Increasing consumer interest in health and wellness products, coupled with the perceived therapeutic benefits of cannabinoids, is a major driver of market growth. Progressive cannabis legalization in various parts of the world, including the United States and parts of Europe, is expanding the addressable market for minor cannabinoids. Significant investments in research and development by pharmaceutical and biotechnology companies are accelerating product innovation and clinical trials. The market remains fragmented with opportunities for new entrants and niche players to introduce specialized products catering to specific consumer needs.
The COVID-19 pandemic initially disrupted supply chains and retail channels for minor cannabinoids products. However, the crisis also underscored the importance of health and wellness, leading to increased interest in natural remedies, including cannabinoids. As economies recover, the market is expected to rebound stronger.
The geopolitical tensions, such as the Russia-Ukraine conflict, have also affected global markets, including the minor cannabinoids sector. Fluctuating currency values, supply chain disruptions, and geopolitical uncertainty have impacted production and distribution channels. However, the long-term impact will depend on geopolitical developments and their influence on global trade and regulatory environments.
The minor cannabinoids market presents significant opportunities for growth and innovation, driven by evolving consumer preferences, regulatory advancements, and expanding research initiatives. Companies that can navigate regulatory complexities, invest in research and development, and respond to shifting consumer trends are well-positioned to capitalize on this emerging market. As the market matures, collaboration across sectors and regions will be crucial in unlocking the full potential of minor cannabinoids in various industries worldwide.
Global Minor Cannabinoids Market: Key Takeaways of the Report
- Cannabigerol (CBG) segment by product type is expected to grow at a CAGR of 6.7% in the minor cannabinoids market due to increasing research highlighting its potential therapeutic benefits, including anti-inflammatory, antimicrobial, and neuroprotective properties. As consumer awareness grows and regulatory environments become more favorable, there is heightened interest in CBG-based products for their diverse health applications, ranging from skincare to pharmaceutical formulations, driving sustained market demand and expansion.
- Pharmaceutical segment by application, leads the minor cannabinoids market with a significant revenue share of 35.8% owing to growing recognition of cannabinoids’ potential in therapeutic applications. Cannabinoids like CBD, CBG, and others show promise in treating conditions such as epilepsy, chronic pain, and anxiety disorders, backed by increasing clinical research and favorable regulatory developments. Pharmaceutical companies are investing heavily in cannabinoid-based drug development, driving market growth as they seek to capitalize on these compounds’ efficacy and market potential in addressing unmet medical needs.
- In 2023, Latin America is anticipated as fastest growing region in the global minor cannabinoids market due to evolving regulatory landscapes favoring cannabis legalization and cultivation. This shift is fostering a burgeoning industry infrastructure for cannabis extraction and product development. Additionally, increasing consumer acceptance of cannabinoid-based products for medicinal and wellness purposes is driving market expansion. With a vast potential consumer base and supportive regulatory frameworks, Latin America presents significant growth opportunities for companies seeking to enter or expand within the minor cannabinoids market.
Key Development:
- In December 2023, Rare Cannabinoid Company introduced Uplift Gummies infused with THC and THCV. These gummies combine the relaxing properties of Delta-9-THC with the energizing and appetite-controlling effects of CBD and THCV.
- In October 2022, High Tide Inc., a cannabis retailer, announced that its Colorado-based subsidiary, NuLeaf Naturals, had launched plant-based softgels and full-spectrum multicannabinoid oil in Manitoba. The products feature CBC, CBD, CBG, Delta-9 tetrahydrocannabinol (Delta 9), and CBN.
Browse Related Category Reports
Global Minor Cannabinoids Market:
- Aurora Europe GmbH
- BulKanna
- CBD. INC.
- Fresh Bros Hemp Company
- GCM Holdings, LLC (Global Cannabinoids)
- GenCanna.
- High Purity Natural Products.
- Laurelcrest
- Mile High Labs
- PBG Global
- Rhizo Sciences
- ZERO POINT EXTRACTION, LLC
- Other Industry Participants
Global Minor Cannabinoids Market
By Product Type
- Cannabigerol (CBG)
- Cannabichromene (CBC)
- Cannabinol (CBN)
- Cannabidivarin (CBDV)
- Tetrahydrocannabutol (THCB)
- Tetrahydrocannabivarin (THCV)
- Tetrahydrocannabiphorol (THCP)
- Others
By Application
- Pharmaceutical
- Pain Management
- Mental Health
- Sleep Disorders
- Anti-inflammatory
- Others
- Nutraceuticals
- Cosmetics and Personal Care
- Food and Beverages
- Others
By Region
- North America (U.S., Canada, Mexico, Rest of North America)
- Europe (France, The UK, Spain, Germany, Italy, Nordic Countries (Denmark, Finland, Iceland, Sweden, Norway), Benelux Union (Belgium, The Netherlands, Luxembourg), Rest of Europe)
- Asia Pacific (China, Japan, India, New Zealand, Australia, South Korea, Southeast Asia (Indonesia, Thailand, Malaysia, Singapore, Rest of Southeast Asia), Rest of Asia Pacific)
- Middle East & Africa (Saudi Arabia, UAE, Egypt, Kuwait, South Africa, Rest of Middle East & Africa)
- Latin America (Brazil, Argentina, Rest of Latin America)
Consult with Our Expert:
Jay Reynolds
The Niche Research
Japan (Toll-Free): +81 663-386-8111
South Korea (Toll-Free): +82-808- 703-126
Saudi Arabia (Toll-Free): +966 800-850-1643
United Kingdom: +44 753-710-5080
United States: +1 302-232-5106
Email: askanexpert@thenicheresearch.com
Website: www.thenicheresearch.com
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