SAIC Announces First Quarter of Fiscal Year 2020 Results

Published

5 years ago

June 6, 2019

Zoltan_Tundik

Reading Time: 12 minutes

Revenues: $1.6 billion; 37% revenue growth

Diluted earnings per share: $0.92; Adjusted diluted earnings per
share⁽¹⁾: $1.36

Adjusted EBITDA⁽¹⁾ as a %
of revenues: 8.3%

Cash flows provided by operating activities: $178 million

Contract awards of $1.9 billion, including $300 million of single
award IDIQ value; Net bookings of $1.4 billion

Repurchased 591 thousand shares for $44 million

RESTON, Va.–(BUSINESS WIRE)–Science Applications International Corporation (NYSE: SAIC), a leading
technology integrator providing high-end solutions in engineering, IT,
and mission solutions across the defense, space, civilian, and
intelligence markets, today announced results for the first quarter
ended May 3, 2019.

“SAIC is off to a strong start to fiscal year 2020, keeping our
attention on strong operational performance while continuing the
integration of Engility,” said SAIC CEO-Elect, Nazzic Keene. “The
transition of CEO responsibilities has gone smoothly while executing our
business strategy to accelerate sustained profitable growth through our
newly acquired capabilities, talent, and customer access.”


First Quarter of Fiscal Year 2020: Summary Operating Results Advertisement

	Three Months Ended
	May 3, 2019			Percent change		May 4, 2018
	(in millions, except per share amounts)
Revenues	$	1,615		37	%	$	1,175
Operating income	93			41	%	66
Operating income as a percentage of revenues	5.8		%	20	bps	5.6		%
Adjusted operating income⁽¹⁾	101			53	%	66
Adjusted operating income as a percentage of revenues	6.3		%	70	bps	5.6		%
Net income attributable to common stockholders	55			12	%	49
EBITDA⁽¹⁾	126			66	%	76
EBITDA as a percentage of revenues	7.8		%	130	bps	6.5		%
Adjusted EBITDA⁽¹⁾	134			76	%	76
Adjusted EBITDA as a percentage of revenues	8.3		%	180	bps	6.5		%
Diluted earnings per share	$	0.92		(19	)%	$	1.13
Adjusted diluted earnings per share⁽¹⁾	$	1.36		11	%	$	1.23
Net cash provided by operating activities	$	178		102	%	$	88
Free cash flow⁽¹⁾	$	169		106	%	$	82

⁽¹⁾Non-GAAP measure, see Schedule 5 for information
about this measure.

Revenues for the quarter increased $440 million, or 37%, compared to the
prior year quarter due to the acquisition of Engility. Excluding
acquired revenues, revenues contracted 2.8%, attributable to
humanitarian relief materials in the prior year quarter and the effect
of acquisition related revenue dis-synergies.

Operating income as a percentage of revenues of 5.8%, increased from
5.6% in the comparable prior year period, due to the acquisition of
Engility, cost synergies related to the acquisition, and improved
performance across our portfolio, partially offset by higher costs
associated with the acquisition and integration of Engility.

Net income attributable to common stockholders for the quarter increased
$6 million as compared to the same period in the prior year primarily
due to increased operating income ($24 million, net of tax), partially
offset by higher interest expense and a higher effective tax rate.

Adjusted EBITDA⁽¹⁾ as a percentage of revenues for the
quarter increased to 8.3%, compared to 6.5% for the prior year quarter,
driven by the acquisition of Engility, cost synergies related to the
acquisition, and improved performance across our portfolio including
higher net favorable changes in estimates.

Diluted earnings per share was $0.92 for the quarter and adjusted
diluted earnings per share⁽¹⁾ was $1.36. The weighted-average
diluted shares outstanding during the quarter was 60 million shares.

⁽¹⁾Non-GAAP measure, see Schedule 5 for information
about this measure.

Cash Generation and Capital Deployment

Cash flows provided by operating activities for the first quarter were
$178 million, compared to $88 million during the same period in the
prior year. The improvement is primarily due to customer collections
recouped from the U.S. federal government partial shutdown that occurred
in the prior quarter, strong customer collections across several
programs, and cash provided from the operating activities of Engility.

During the quarter, SAIC deployed $70 million of capital, consisting of
$44 million in plan share repurchases (591 thousand shares) under SAIC’s
previously announced share repurchase program, $23 million in cash
dividends, and a $3 million mandatory term loan repayment.

Quarterly Dividend Declared

Subsequent to quarter end, the Company’s Board of Directors declared a
cash dividend of $0.37 per share of the Company’s common stock payable
on July 26, 2019 to stockholders of record on July 12, 2019. SAIC
intends to continue paying dividends on a quarterly basis, although the
declaration of any future dividends will be determined by the Board of
Directors each quarter and will depend on earnings, financial condition,
capital requirements and other factors.

New Business Awards

Contract awards for the quarter were $1.9 billion, including
approximately $300 million from single-award indefinite-delivery,
indefinite-quantity (IDIQ) value. Net bookings for the quarter were
approximately $1.4 billion, which reflects a book-to-bill ratio of 0.9.
Of the net bookings for the quarter, 70% were for new business. SAIC’s
estimated backlog of signed business orders at the end of the quarter
was approximately $13.6 billion of which $3.0 billion was funded.

SAIC was awarded the following contracts during the quarter:

U.S. Intelligence Community: SAIC was awarded a mix of recompete
and new business contracts and task orders valued at approximately $300
million, if all options are exercised, by the U.S. national security,
space, and intelligence customers. Although these customers and the
specific nature of these contracts are classified, they all encompass
strategic, end-to-end services that help bolster national security.

Notable Recompete Awards:

NASA: SAIC was awarded NASA’s Safety and Mission Assurance
Engineering Contract (SMAEC) II worth up to $292 million. Under this
contract, SAIC will continue to provide safety engineering, reliability
engineering, quality engineering, quality assurance, and software
assurance in support of NASA programs and projects. The contract has a
five year period of performance, if all options are exercised.

The U.S. Air Force: SAIC was awarded a $58 million contract by
the Air Force Research Laboratory to research laser bioeffects, advance
vision science, conduct modeling and simulation, and perform safety
engineering. The Optical Radiation Bioeffects and Safety contract
enhances airman combat survivability by enabling U.S. forces to counter
optical hazards and threats. The contract has a 75-month period of
performance.

The U.S. Navy: SAIC was awarded a prime position on a $98 million
multi-award IDIQ contract to provide support to the Department of
Defense Air Traffic Control and Landing Systems, as well as
developmental programs such as the Joint Precision Approach and Landing
Systems (JPALS). The company will compete for task orders to support the
Naval Air Warfare Center Aircraft Division at Patuxent River, Maryland.
The contract has a five-year ordering period.

Notable New Business Awards:

The Defense Threat Reduction Agency (DTRA): SAIC was awarded a
position on the $535 million DTRA IT Service Design multiple-award IDIQ
contract to integrate IT services across DTRA. As one of five awardees,
SAIC will compete for task orders over a 10-year period of performance,
if all options are exercised.

The U.S. Marine Corps: SAIC was awarded a prime position on the
Marine Air-Ground Task Force Training Systems Support multiple-award
IDIQ contact. The company will compete for task orders to support
pre-deployment training programs to Marine Corps operating forces to
improve Marine warfighting skills. The contract is valued at $245
million and has a 10-year period of performance.

Webcast Information

SAIC management will discuss operations and financial results in an
earnings conference call beginning at 8:00 a.m. Eastern time on June 6,
2019. The conference call will be webcast simultaneously to the public
through a link on the Investor Relations section of the SAIC website (http://investors.saic.com).
We will be providing webcast access only – “dial-in” access is no longer
available. Additionally, a supplemental presentation will be available
to the public through links to the Investor Relations section of the
SAIC website. After the call concludes, an on-demand audio replay of the
webcast can be accessed on the Investor Relations website.

About SAIC

SAIC® is a premier technology integrator solving our nation’s most
complex modernization and readiness challenges. Our robust portfolio of
offerings across the defense, space, civilian, and intelligence markets
includes high-end solutions in engineering, IT, and mission solutions.
Using our expertise and understanding of existing and emerging
technologies, we integrate the best components from our own portfolio
and our partner ecosystem to deliver innovative, effective, and
efficient solutions.

We are 23,000 strong; driven by mission, united by purpose, and inspired
by opportunities. Headquartered in Reston, Virginia, SAIC has pro forma
annual revenues of approximately $6.5 billion. For more information,
visit saic.com. For
ongoing news, please visit our newsroom.

Forward-Looking Statements

Certain statements in this release contain or are based on
“forward-looking” information within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by words such as “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,” “guidance,”
and similar words or phrases. Forward-looking statements in this release
may include, among others, estimates of future revenues, operating
income, earnings, earnings per share, charges, total contract value,
backlog, outstanding shares and cash flows, as well as statements about
future dividends, share repurchases and other capital deployment plans.
Such statements are not guarantees of future performance and involve
risk, uncertainties and assumptions, and actual results may differ
materially from the guidance and other forward-looking statements made
in this release as a result of various factors. Risks, uncertainties and
assumptions that could cause or contribute to these material differences
include those discussed in the “Risk Factors,” “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and
“Legal Proceedings” sections of our Annual Report on Form 10-K, as
updated in any subsequent Quarterly Reports on Form 10-Q and other
filings with the SEC, which may be viewed or obtained through the
Investor Relations section of our website at www.saic.com
or on the SEC’s website at www.sec.gov.
Due to such risks, uncertainties and assumptions you are cautioned not
to place undue reliance on such forward-looking statements, which speak
only as of the date hereof. SAIC expressly disclaims any duty to update
any forward-looking statement provided in this release to reflect
subsequent events, actual results or changes in SAIC’s expectations.
SAIC also disclaims any duty to comment upon or correct information that
may be contained in reports published by investment analysts or others.


Schedule 1:

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


	Three Months Ended
	May 3, 2019			May 4, 2018
	(in millions, except per share amounts)
Revenues	$	1,615		$	1,175
Cost of revenues	1,435			1,074
Selling, general and administrative expenses	77			35
Acquisition and integration costs	10			—
Operating income	93			66
Interest expense	25			12
Other (income) expense, net	(2		)	(1		)
Income before income taxes	70			55
Provision for income taxes	(14		)	(6		)
Net income	$	56		$	49
Net income attributable to non-controlling interest	1			—
Net income attributable to common stockholders	$	55		$	49
Weighted-average number of shares outstanding:
Basic	59.3			42.4
Diluted	60.0			43.4
Earnings per share:
Basic	$	0.93		$	1.16
Diluted	$	0.92		$	1.13


Schedule 2: Advertisement

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED AND CONSOLIDATED BALANCE SHEETS (Unaudited)


	May 3, 2019		February 1, 2019
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	151	$	237
Receivables, net		1,039		1,050
Inventory, prepaid expenses and other current assets		127		146
Total current assets		1,317		1,433
Goodwill		2,120		2,120
Intangible assets, net		778		803
Property, plant, and equipment, net		103		103
Other assets		289		104
Total assets	$	4,607	$	4,563
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	714	$	632
Accrued payroll and employee benefits		259		241
Long-term debt, current portion		37		24
Total current liabilities		1,010		897
Long-term debt, net of current portion		1,902		2,065
Other long-term liabilities		222		102
Total common stockholders’ equity		1,462		1,485
Non-controlling interest		11		14
Total stockholders’ equity		1,473		1,499
Total liabilities and stockholders’ equity	$	4,607	$	4,563


Schedule 3:

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION Advertisement CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended
	May 3, 2019			May 4, 2018
	(in millions)
Cash flows from operating activities:
Net income	$	56		$	49
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		36			11
Deferred income taxes		9			—
Stock-based compensation expense		8			8
Increase (decrease) resulting from changes in operating assets and liabilities:
Receivables		11			8
Inventory, prepaid expenses and other current assets		16			7
Other assets		11			(6	)
Accounts payable and accrued liabilities		20			(24	)
Accrued payroll and employee benefits		18			34
Other long-term liabilities		(7	)		1
Net cash provided by operating activities		178			88
Cash flows from investing activities:
Expenditures for property, plant, and equipment		(9	)		(6	)
Purchases of marketable securities		(21	)		—
Net cash used in investing activities		(30	)		(6	)
Cash flows from financing activities:
Dividend payments to stockholders		(23	)		(14	)
Principal payments on borrowings		(153	)		(8	)
Issuances of stock		2			2
Stock repurchased and retired or withheld for taxes on equity awards		(56	)		(53	)
Debt issuance costs		—			(1	)
Distributions to non-controlling interest		(4	)		—
Net cash used in financing activities		(234	)		(74	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(86	)		8
Cash, cash equivalents and restricted cash at beginning of period		246			152
Cash, cash equivalents and restricted cash at end of period	$	160		$	160


Schedule 4:

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION BACKLOG (Unaudited)

The estimated value of our total backlog as of the dates presented was:
	May 3, 2019		February 1, 2019

Funded backlog	$	2,982	$	2,753
Negotiated unfunded backlog		10,587		11,048
Total backlog	$	13,569	$	13,801

Backlog represents the estimated amount of future revenues to be
recognized under negotiated contracts and task orders as work is
performed and excludes contract awards which have been protested by
competitors until the protest is resolved in our favor. SAIC segregates
backlog into two categories, funded backlog and negotiated unfunded
backlog. Funded backlog for contracts with government agencies primarily
represents contracts for which funding is appropriated less revenues
previously recognized on these contracts, and does not include the
unfunded portion of contracts where funding is incrementally
appropriated or authorized by the U.S. government and other customers
even though the contract may call for performance over a number of
years. Funded backlog for contracts with non-government agencies
represents the estimated value of contracts which may cover multiple
future years under which SAIC is obligated to perform, less revenues
previously recognized on these contracts. Negotiated unfunded backlog
represents the estimated future revenues to be earned from negotiated
contracts for which funding has not been appropriated or authorized,
and unexercised priced contract options. Negotiated unfunded backlog
does not include any estimate of future potential task orders expected
to be awarded under indefinite delivery, indefinite quantity (IDIQ),
U.S. General Services Administration (GSA) schedules or other master
agreement contract vehicles.

Schedule 5:

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP
FINANCIAL MEASURES
(Unaudited)

This schedule describes the non-GAAP financial measures included in this
earnings release. While we believe that these non-GAAP financial
measures may be useful in evaluating our financial information, they
should be considered as supplemental in nature and not as a substitute
for financial information prepared in accordance with GAAP.
Reconciliations, definitions, and how we believe these measures are
useful to management and investors are provided below. Other companies
may define similar measures differently.


EBITDA, Adjusted EBITDA and Adjusted Operating Income

	Three Months Ended
	May 3, 2019			May 4, 2018
	(in millions)
Net income attributable to common stockholders	$	55		$	49
Interest expense		25			12
Interest income		(1	)		(1	)
Provision for income taxes		14			6
Depreciation and amortization		33			10
EBITDA⁽¹⁾		126			76
EBITDA as a percentage of revenues		7.8	%		6.5	%
Acquisition and integration costs		10			—
Recovery of acquisition and integration costs		(2	)		—
Adjusted EBITDA⁽¹⁾	$	134		$	76
Adjusted EBITDA as a percentage of revenues		8.3	%		6.5	%

Operating income	$	93		$	66
Operating income as a percentage of revenues		5.8	%		5.6	%
Acquisition and integration costs		10			—
Recovery of acquisition and integration costs		(2	)		—
Adjusted operating income⁽¹⁾	$	101		$	66
Adjusted operating income as a percentage of revenues		6.3	%		5.6	%

EBITDA is a performance measure that is calculated by taking net
income attributable to common stockholders and excluding interest,
provision for income taxes, and depreciation and amortization. Adjusted
EBITDA and adjusted operating income are performance measures that
exclude acquisition and integration costs that we do not consider to be
indicative of our ongoing operating performance. The acquisition and
integration costs relate to the Company’s significant acquisition of
Engility. The recovery of acquisition and integration costs relate to
acquisition and integration costs recovered through the Company’s
indirect rates in accordance with Cost Accounting Standards. We believe
that these performance measures provide management and investors with
useful information in assessing trends in our ongoing operating
performance and may provide greater visibility in understanding the
long-term financial performance of the Company.

⁽¹⁾Non-GAAP measure, see above for definition.


Schedule 5 (continued):

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)


Adjusted Diluted Earnings Per Share

	Three Months Ended
	May 3, 2019			May 4, 2018
Diluted earnings per share	$	0.92		$	1.13

Acquisition and integration costs, divided by diluted ‘weighted-average number of shares outstanding’ (WASO)		0.13			—
Tax effect of acquisition and integration costs, divided by diluted WASO		(0.03	)		—
Net effect of acquisition and integration costs, divided by diluted WASO		0.10			—

Amortization of intangible assets, divided by diluted WASO		0.42			0.12
Tax effect of amortization of intangible assets, divided by diluted WASO		(0.08	)		(0.02	)
Net effect of amortization of intangible assets, divided by diluted WASO		0.34			0.10

Adjusted diluted earnings per share⁽¹⁾	$	1.36		$	1.23

Adjusted diluted earnings per share is a performance measure that
excludes acquisition and integration costs that we do not consider to be
indicative of our ongoing operating performance. The acquisition and
integration costs relate to the Company’s recent acquisition of Engility
and is net of the recovery of acquisition and integration costs
recovered through the Company’s indirect rates in accordance with Cost
Accounting Standards. Adjusted diluted earnings per share also
excludes amortization of intangible assets because we do not have a
history of significant acquisition activity, we do not acquire
businesses on a predictable cycle, and the amount of an acquisition’s
purchase price allocated to intangible assets and the related
amortization term are unique to each acquisition. We believe that this
performance measure provides management and investors with useful
information in assessing trends in our ongoing operating performance and
may provide greater visibility in understanding the long-term financial
performance of the Company.

⁽¹⁾Non-GAAP measure, see above for definition.


Schedule 5 (continued):

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION Advertisement NON-GAAP FINANCIAL MEASURES (Unaudited)


Free Cash Flow

	Three Months Ended
	May 3, 2019			May 4, 2018 Advertisement
	(in millions)
Net cash provided by operating activities	$	178		$	88
Expenditures for property, plant, and equipment		(9	)		(6	)
Free cash flow⁽¹⁾	$	169		$	82

Free cash flow is calculated by taking cash flows provided by
operating activities less expenditures for property, plant, and
equipment. We believe that free cash flow provides management and
investors with useful information in assessing trends in our cash flows
and in comparing them to other peer companies, many of whom present a
similar non-GAAP liquidity measure. This measure should not be
considered as a measure of residual cash flow available for
discretionary purposes.

⁽¹⁾Non-GAAP measure, see above for definition.

Contacts

Investor Relations: Shane Canestra, +1.703.676.2720, [email protected]

Media: Lauren Presti, +1.703.676.8982, [email protected]

Cannabis

IM Cannabis Announces Appointment of Shmulik Arbel to Board of Directors

Published

3 days ago

September 11, 2024

CISION (PR Newswire)

im-cannabis-announces-appointment-of-shmulik-arbel-to-board-of-directors

TORONTO and GLIL YAM, Israel, Sept. 11, 2024 /PRNewswire/ — IM Cannabis Corp. (“IMC” or the “Company“) (NASDAQ: IMCC) (CSE: IMCC), a leading medical cannabis company with operations in Israel and Germany, is pleased to announce that Mr. Shmulik Arbel has been appointed to the Company’s board of directors (the “Board“) effective September 9, 2024. Mr. Arbel brings a wealth of experience in strategic plans that drive profitability, as well as, finance and corporate governance, further strengthening the company’s commitment to driving growth while focusing on sustainable profitability.

“We are thrilled to welcome Shmulik to our Board of Directors,” said Oren Shuster, Chief Executive Officer of IM Cannabis. “Shmulik’s extensive international experience at Leumi, coupled with his proven track record in banking and finance will be invaluable as we continue to deliver on our strategic initiatives.”

Mr. Arbel retired as Deputy CEO from Leumi, Israel’s largest banking group, in April 2023, where he was instrumental in business growth and leading the service revolution. With over 25 years of experience at Leumi, Arbel has held senior roles throughout the organization, such as head of retail banking, head of the corporate division, and as chairman of Leumi UK. With key roles in Israel, New York and London, Mr. Arbel has a wide view on international business.

“I am honored to join the Board of Directors at IMCC,” said Mr. Arbel. “I look forward to leveraging my experience in banking and finance, providing guidance as IMCC continues to establish itself as the go-to brand in the cannabis world. I look forward to contributing to the company’s growth.”

Arbel holds a BA and MBA from Tel Aviv University.

About IM Cannabis Corp.

IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has focused its resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.

The IMC ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms, distribution centers, and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients.

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and United States securities laws (collectively, “forward-looking statements“). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to: the stated benefits Mr. Arbel’s appointment, including the further strengthening the Company’s commitment to driving growth in the German market while focusing on sustainable profitability; and Mr. Arbel’s international experience and track record in banking and finance will be invaluable to the Company.

Forward-looking statements are based on assumptions that may prove to be incorrect, including but not limited to: the Company’s ability to realize upon the stated benefits Mr. Arbel’s appointment; and Mr. Arbel’s international experience and track record in banking and finance becoming invaluable to the Company.

The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include: the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company’s ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and its subsidiaries (collectively, the “Group“) to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group’s obligations; the Group’s possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group’s cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt; risks surrounding war, conflict and civil unrest in Eastern Europe and the Middle East, including the impact of the Israel-Hamas war on the Company, its operations and the medical cannabis industry in Israel; risks associated with the Company focusing on the Israel and Germany markets; the inability of the Company to achieve sustainable profitability and/or increase shareholder value; the inability of the Company to actively manage costs and/or improve margins; the inability of the company to grow and/or maintain sales; the inability of the Company to meet its goals and/or strategic plans; the inability of the Company to reduce costs and/or maintain revenues; the Company’s inability to take advantage of the legalization of medicinal cannabis in Germany; and the Company’s inability to realize upon the stated benefits Mr. Arbel’s appointment; and Mr. Arbel’s international experience and track record in banking and finance not becoming valuable to the Company.

Please see the other risks, uncertainties and factors set out under the heading “Risk Factors” in the Company’s annual report dated March 28, 2024, which is available on the Company’s issuer profile on SEDAR+ at www.sedarplus.ca and Edgar at www.sec.gov/edgar. Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Company Contact:

Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
[email protected]

Oren Shuster, CEO
IM Cannabis Corp.
[email protected]

Logo: https://mma.prnewswire.com/media/1742228/IM_Cannabis_Logo.jpg

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Cannabis

One World Products Issues Shareholder Update Letter

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GlobeNewswire

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Indivior Provides Update on Aelis Farma’s Clinical Phase 2B Study Results with AEF0117 in Participants with Cannabis Use Disorder

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September 4, 2024

CISION (PR Newswire)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT FORMS PART OF DOMESTIC LAW IN THE UK BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018).

Primary and Secondary End Points of the Study were Not Met
Indivior Does Not Currently Expect to Exercise AEF0117 Option

SLOUGH, United Kingdom and RICHMOND, Va., Sept. 4, 2024 /PRNewswire/ — Indivior PLC (Nasdaq/LSE: INDV) is today providing an update following Aelis Farma’s announcement of the results from its clinical Phase 2B trial with AEF0117¹, evaluating the efficacy and safety in treatment-seeking participants with moderate to severe Cannabis Use Disorder (CUD). The purpose of this trial was twofold: (1) to show that AEF0117 (0.1, 0.3, 1 mg once a day for 12 weeks) lowers cannabis use and (2) to determine the endpoints and optimal dosage of AEF0117 for use in future studies. In this phase 2B study, patients were treatment-seeking participants, 84% of whom had severe CUD.

The results of the study demonstrated that the primary endpoint, the proportion of participants who reduced their cannabis use to ≤1 day per week, as well as secondary endpoints measuring the proportion of participants reaching either complete abstinence or who used ≤2 day per week, were not met. Although these results are disappointing, they indicate that significant work remains to be done to understand subpopulations of patients with CUD, specifically those with severe CUD.

This clinical Phase 2B study is part of the strategic collaboration between Aelis Farma and Indivior, which includes an exclusive option for Indivior to license the global rights to AEF0117. Given the lack of separation from placebo on primary and secondary endpoints and before seeing further additional favorable clinical data, Indivior does not currently expect to exercise its option.

Important Cautionary Note Regarding Forward-Looking Statements

This news release contains certain statements that are forward-looking. Forward-looking statements include, among other things, express and implied statements regarding whether: we will be able to ultimately demonstrate the safety and efficacy of AEF0117, which is a prerequisite to filing any New Drug Application; we might ever exercise our option for AEF0117 and, if so, when; and other statements containing the words “believe,” “anticipate,” “plan,” “expect,” “intend,” “estimate,” “forecast,” “strategy,” “target,” “guidance,” “outlook,” “potential,” “project,” “priority,” “may,” “will,” “should,” “would,” “could,” “can,” “outlook,” “guidance,” the negatives thereof, and variations thereon and similar expressions. By their nature, forward-looking statements involve risks and uncertainties as they relate to events or circumstances that may or may not occur in the future.

Actual results may differ materially from those because they relate to future events. Various factors may cause differences between Indivior’s expectations and actual results, including, among others, the risks described in our most recent annual report on Form 20-F beginning on page 9 as filed with the U.S. SEC and in subsequent releases; legal and market restrictions that may limit how quickly we can repurchaser our shares; the substantial litigation and ongoing investigations to which we are or may become a party; our reliance on third parties to manufacture commercial supplies of most of our products, conduct our clinical trials and at times to collaborate on products in our pipeline; our ability to comply with legal and regulatory settlements, healthcare laws and regulations, requirements imposed by regulatory agencies and payment and reporting obligations under government pricing programs; risks related to the manufacture and distribution of our products, most of which contain controlled substances; market acceptance of our products as well as our ability to commercialize our products and compete with other market participants; competition; the uncertainties related to the development of new products, including through acquisitions, and the related regulatory approval process; our dependence on third-party payors for the reimbursement of our products and the increasing focus on pricing and competition in our industry; unintended side effects caused by the clinical study or commercial use of our products; our ability to successfully execute acquisitions, partnerships, joint ventures, dispositions or other strategic acquisitions; our ability to protect our intellectual property rights and the substantial cost of litigation or other proceedings related to intellectual property rights; the risks related to product liability claims or product recalls; the significant amount of laws and regulations that we are subject to, including due to the international nature of our business; macroeconomic trends and other global developments such as armed conflicts and pandemics; the terms of our debt instruments, changes in our credit ratings and our ability to service our indebtedness and other obligations as they come due; changes in applicable tax rate or tax rules, regulations or interpretations and our ability to realize our deferred tax assets; and volatility in our share price due to factors unrelated to our operating performance or that may result from the potential move of our primary listing to the U.S.

Forward-looking statements speak only as of the date that they are made and should be regarded solely as our current plans, estimates and beliefs. Except as required by law, we do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

This release is being made by Kathryn Hudson, Company Secretary Indivior PLC.

About Indivior

Indivior is a global pharmaceutical company working to help change patients’ lives by developing medicines to treat substance use disorders (SUD), overdose and serious mental illnesses. Our vision is that all patients around the world will have access to evidence-based treatment for the chronic conditions and co-occurring disorders of SUD. Indivior is dedicated to transforming SUD from a global human crisis to a recognized and treated chronic disease.

Building on its global portfolio of OUD treatments, Indivior has a pipeline of product candidates designed to both expand on its heritage in this category and potentially address other chronic conditions and co-occurring disorders of SUD. Headquartered in the United States in Richmond, VA, Indivior employs over 1,000 individuals globally and its portfolio of products is available in over 30 countries worldwide. Visit www.indivior.com to learn more. Connect with Indivior on LinkedIn by visiting www.linkedin.com/company/indivior.

References:

National Library of Medicine (U.S.) (2022, April). Effect of AEF0117 on treatment-seeking patients with cannabis use disorder (CUD) (SICA2). Identifier
NCT05322941 https://www.clinicaltrials.gov/study/NCT05322941

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