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Elektros Announces Agreement with Next Realm AI as Potential Data Advisory Firm for EV Operations SUNNY ISLES BEACH, FL / ACCESSWIRE / February 8, 2023 / Elektros (OTC PINK:ELEK), an emerging leader in the electric mobility industry, announced it has signed a Memorandum of Understanding (MOU) with Next Realm AI to explore integration of machine learning technologies for electric vehicle (EV) operations. The Company announced agreement with Next Realm AI, a New York based technology research firm, to explore integrating machine learning and analytical capabilities to improve customer experiences, accelerate the modernization of product development, manufacturing and supply chain management, and fast track the implementation of data-driven business models for the EV market. Battery Analytics: Intelligent battery analytics improve the performance of lithium-ion batteries by monitoring performance, state of charge, stress from rapid acceleration and deceleration, temperature and the number of charge cycles. The Company's Patent Pending Multi-Port Charging Assembly will allow users to use multiple charging features on electric vehicles, which the company plans to market to major EV manufacturers under royalty licensing agreements. Mining Operations: Artificial intelligence provides many economic benefits for the mining industry through cost reduction, efficiency, and improving productivity, reducing exposure of workers to hazardous conditions, continuous production, and improved safety. Smart sensors and cameras aid automated equipment while also monitoring the safety of workers, and environmental impacts at mines. Customer Service: Built on top of a Large Language Model (LLM), ChatGPT interacts in a dialogue format understanding a diverse range of prompts and generating human-like responses by predicting future words. Applications can be trained to understand and classify the sentiment of customer inquiries by identifying customers' emotions, brands can be more equipped to respond in an appropriate manner. To receive updates on this project visit https://nextrealm.ai/register/ About Next Realm AI Next Realm AI is a New York based research lab and consulting firm focused on commercial development of next generation technologies such as artificial intelligence, data analytics, quantum computing, and cybersecurity. https://nextrealm.ai/ About Elektros, Inc. Elektros (OTC:ELEK) is an American electric transportation company that innovates mobility solutions for consumers and businesses. The automotive landscape faces existential disruption over the next decade to reach carbon neutrality. Elektros addresses this paradigm shift with mobility technologies that support sustainability for a transformative user experience. Elektros aims to present a compelling and completely new electric vehicle experience known as Elektros Sonic to consumers beginning as early as 2023. www.elektrosmotors.com Twitter: https://twitter.com/elektrosenergy Cautionary Language Concerning Forward-Looking Statements This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential," and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for Elektros, Inc.'s products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time to time in Elektros Inc.'s filings with the United States Securities and Exchange Commission. Examples of such forward-looking statements in this release include statements regarding future sales, costs, and market acceptance of products as well as regulatory actions at the State or Federal level. For a more detailed description of the risk factors and uncertainties affecting Elektros Inc., please refer to the Company's Securities and Exchange Commission filings, which are available at www.sec.gov. Elektros, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. CONTACT: Elektros, Inc. IR and Media Inquiries Email: info@elektrosmotors.com SOURCE: Elektros, Inc.
SINGAPORE, Feb. 10, 2023 /PRNewswire/ -- Announcing the formation of Eleos Labs, the anti-fraud solution for Web3 assets, strengthened by security veterans with decades of leadership expertise at Brave Browser, Microsoft, Google, and Ethlas. The team seeks to combat fraud and theft of on-chain assets, which continually plagues wider adoption of Web3. The Eleos Labs suite of security tools is bolstered by ongoing partnerships with government agencies, blockchain projects, and wallet providers. Eleos Labs is backed by a team of security veterans from Brave Browser, Zilliqa, Microsoft, Google, and Ethlas. Dr. Gennady "Ari" Medvinsky will serve as the Technical Advisor, having spent the last 20 years leading security teams at Google, Grab, and Microsoft. Wui Ngiap Foo, previously Head of Technology & Integrity at Grab, will join as Group Advisor. They are also joined by Dr. Ben Livshits as Scientific Advisor, former CEO of Zilliqa Research and Chief Scientist of Brave Browser. Together with these leading security experts, Eleos Labs intends to launch a suite of protection products that help enterprises protect their users against Web3 threats. "The team's expertise and unique forward-looking approach towards solving security in Web3 is particularly exciting – the platforms that manage to integrate these proactive cybersecurity tools for tomorrow's attacks will be the ones to build the trust required for mass adoption of Web3," says Dr. Ben Livshits. With a reported $14 billion in cryptocurrency accounted for fraud and theft in 2021[1], Eleos Labs is building a resilient anti-theft system based on enterprise cybersecurity tools to ensure a safer crypto ecosystem. With the recent collapse of well known crypto institutions, there is an apparent need for increased regulation and consumer protection in the space. FailSafe, which is Eleos Labs' suite of solutions to tackle Web3 security issues, and is at the forefront of the company's effort to secure decentralized systems and protect against modern Web3 security threats. "All organizations have a responsibility to protect their users from theft and should be prepared for an attack in the worst case scenario: we offer a fail-safe system that not only prevents theft, but ensures minimal harm to targeted users and assets through layers of protection via a defense-in-depth design," says Dr. Ari Medvinsky. The FailSafe suite of security solutions strengthens an enterprise's defense against Web3 security threats for both its networks and users. FailSafe will offer an advanced suite of Web3 threat protection, including entity reputation scoring, transaction intervention, and solutions to mitigate the imminent threat that quantum computing poses to commonly used signature algorithms, which is the foundation of Web3 key management. "We're committed to implementing cybersecurity solutions with our partners for a more secure Web3 ecosystem. We are open to partnering with government agencies, blockchains, and wallet providers to build more compliant and safer tools for Web3," says Wui Ngiap Foo. To enquire about partnerships and find out more, Eleos Labs at EleosLabs.io or LinkedIn for further media enquiries. Website www.eleoslabs.io Linkedin www.linkedin.com/company/eleos-group/ Email info@eleoslabs.io Phone +65 9642 2471 [1] The Chainalysis 2022 Crypto Crime Report https://go.chainalysis.com/2022-Crypto-Crime-Report.html
Fourth Quarter 2022 Highlights Product revenue of $540.1 million, up 43% year over year Service revenue of $742.9 million, up 27% year over year Total revenue of $1.28 billion, up 33% year over year Billings of $1.72 billion, up 32% year over year1 GAAP operating income of $357.8 million, up 66% year over year Non-GAAP operating income of $417.6 million, up 52% year over year1 GAAP operating margin of 27.9% Non-GAAP operating margin of 32.5%1 GAAP diluted net income per share attributable to Fortinet, Inc. of $0.40, up 67% year over year2 Non-GAAP diluted net income per share attributable to Fortinet, Inc. of $0.44, up 76% year over year1 2 Cash flow from operations of $528.1 million Free cash flow of $497.2 million1 Full Year 2022 Highlights Product revenue of $1.78 billion, up 42% year over year Service revenue of $2.64 billion, up 26% year over year Total revenue of $4.42 billion, up 32% year over year Billings of $5.59 billion, up 34% year over year1 Deferred revenue of $4.64 billion, up 34% year over year GAAP operating income of $969.6 million, up 49% year over year Non-GAAP operating income of $1.21 billion, up 38% year over year1 GAAP operating margin of 21.9% Non-GAAP operating margin of 27.3%1 GAAP diluted net income per share attributable to Fortinet, Inc. of $1.06, up 45% year over year2 Non-GAAP diluted net income per share attributable to Fortinet, Inc. of $1.19, up 49% year over year1 2 Cash flow from operations of $1.73 billion Free cash flow of $1.45 billion1 Cash paid for share repurchases of $1.99 billion SUNNYVALE, Calif., Feb. 07, 2023 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global leader in broad, integrated and automated cybersecurity solutions, today announced financial results for the fourth quarter and full year ended December 31, 2022. “Total revenue grew 32% in 2022 and year-over-year to $4.42 billion, and we generated GAAP net income of $857.3 million. This marks the 14th consecutive year that we have been GAAP profitable, including every year since our 2009 IPO. Cash flow from operations was $1.73 billion and free cash flow was a Fortinet record of $1.45 billion for the year,” said Ken Xie, Founder, Chairman and Chief Executive Officer. “Our market share gains are being driven by Fortinet's integrated and single platform approach to cybersecurity combined with FortiASIC technology, which lowers the management costs and the total cost of ownership for organizations. Given our cost-for-performance advantage, the convergence of security and networking, and the consolidation of products and vendors, we expect to continue our solid growth trajectory.” Financial Highlights for the Fourth Quarter of 2022 Product Revenue: Product revenue was $540.1 million for the fourth quarter of 2022, an increase of 42.5% compared to $378.9 million for the same quarter of 2021. Service Revenue: Service revenue was $742.9 million for the fourth quarter of 2022, an increase of 27.1% compared to $584.7 million for the same quarter of 2021. Revenue: Total revenue was $1.28 billion for the fourth quarter of 2022, an increase of 33.1% compared to $963.6 million for the same quarter of 2021. Billings1: Total billings were $1.72 billion for the fourth quarter of 2022, an increase of 31.6% compared to $1.31 billion for the same quarter of 2021. GAAP Operating Income and Margin: GAAP operating income was $357.8 million for the fourth quarter of 2022, representing a GAAP operating margin of 27.9%. GAAP operating income was $214.9 million for the same quarter of 2021, representing a GAAP operating margin of 22.3%. Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $417.6 million for the fourth quarter of 2022, representing a non-GAAP operating margin of 32.5%. Non-GAAP operating income was $274.7 million for the same quarter of 2021, representing a non-GAAP operating margin of 28.5%. GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.2: GAAP net income was $313.8 million for the fourth quarter of 2022, compared to GAAP net income of $199.0 million for the same quarter of 2021. GAAP diluted net income per share was $0.40 for the fourth quarter of 2022, based on 791.8 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.24 for the same quarter of 2021, based on 835.0 million diluted weighted-average shares outstanding. Non-GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.1 2: Non-GAAP net income was $349.7 million for the fourth quarter of 2022, compared to non-GAAP net income of $205.8 million for the same quarter of 2021. Non-GAAP diluted net income per share was $0.44 for the fourth quarter of 2022, based on 791.8 million diluted weighted-average shares outstanding, compared to $0.25 for the same quarter of 2021, based on 835.0 million diluted weighted-average shares outstanding. Cash Flow: Cash flow from operations was $528.1 million for the fourth quarter of 2022, compared to $366.8 million for the same quarter of 2021. Free Cash Flow1: Free cash flow was $497.2 million for the fourth quarter of 2022, compared to $215.5 million for the same quarter of 2021. Financial Highlights for the Full Year 2022 Product Revenue: Product revenue was $1.78 billion for 2022, an increase of 41.9% compared to $1.26 billion in 2021. Service Revenue: Service revenue was $2.64 billion for 2022, an increase of 26.3% compared to $2.09 billion in 2021. Revenue: Total revenue was $4.42 billion for 2022, an increase of 32.2% compared to $3.34 billion in 2021. Billings1: Total billings were $5.59 billion for 2022, an increase of 33.8% compared to $4.18 billion in 2021. Deferred Revenue: Total deferred revenue was $4.64 billion as of December 31, 2022, an increase of 34.4% compared to $3.45 billion as of December 31, 2021. GAAP Operating Income and Margin: GAAP operating income was $969.6 million for 2022, representing a GAAP operating margin of 21.9%. GAAP operating income was $650.4 million for 2021, representing a GAAP operating margin of 19.5%. Non-GAAP Operating Income and Margin1: Non-GAAP operating income was $1.21 billion for 2022, representing a non-GAAP operating margin of 27.3%. Non-GAAP operating income was $875.5 million for 2021, representing a non-GAAP operating margin of 26.2%. GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.2: GAAP net income was $857.3 million for 2022, compared to GAAP net income of $606.8 million for 2021. GAAP diluted net income per share was $1.06 for 2022, based on 805.3 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.73 for 2021, based on 835.3 million diluted weighted-average shares outstanding. Non-GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.1 2: Non-GAAP net income was $961.6 million for 2022, compared to non-GAAP net income of $666.0 million for 2021. Non-GAAP diluted net income per share was $1.19 for 2022, based on 805.3 million diluted weighted-average shares outstanding, compared to $0.80 for 2021, based on 835.3 million diluted weighted-average shares outstanding. Cash Flow: Cash flow from operations was $1.73 billion in 2022 compared to $1.50 billion in 2021. Free Cash Flow1: Free cash flow was $1.45 billion in 2022, compared to $1.20 billion in 2021. Share Repurchase Program2: During the year ended December 31, 2022 and 2021, Fortinet repurchased 36.0 million and 12.9 million shares of its common stock at an average price of $55.37 and $57.45 per share, respectively, and for an aggregate purchase price of $1.99 billion and $741.8 million, respectively. Guidance For the first quarter of 2023, Fortinet currently expects: Revenue in the range of $1.180 billion to $1.220 billion Billings in the range of $1.415 billion to $1.465 billion Non-GAAP gross margin in the range of 75.0% to 76.0% Non-GAAP operating margin in the range of 23.0% to 24.0% Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of $0.27 to $0.29, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 795 million to 805 million. For the fiscal year 2023, Fortinet currently expects: Revenue in the range of $5.370 billion to $5.430 billion Service revenue in the range of $3.335 billion to $3.365 billion Billings in the range of $6.710 billion to $6.790 billion Non-GAAP gross margin in the range of 75.0% to 76.0% Non-GAAP operating margin in the range of 25.0% to 26.0% Diluted non-GAAP net income per share attributable to Fortinet, Inc. in the range of $1.39 to $1.41, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 805 million to 815 million. These statements are forward looking and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements. Our guidance with respect to non-GAAP financial measures excludes stock-based compensation, amortization of acquired intangible assets and gain on intellectual property matters. We have not reconciled our guidance with respect to non-GAAP financial measures to the corresponding GAAP measures because certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted. Accordingly, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort. 1 A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”. 2 All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022. Conference Call Details Fortinet will host a conference call today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss the earnings results. A live webcast of the conference call and supplemental slides will be accessible from the Investor Relations page of Fortinet’s website at https://investor.fortinet.com and a replay will be archived and accessible at https://investor.fortinet.com/events-and-presentations. First Quarter 2023 Conference Participation Schedule: Baird’s Silicon Slopes Event March 2, 2023 Morgan Stanley Technology, Media & Telecom Conference March 7, 2023 Members of Fortinet’s management team are expected to present at these conferences and discuss the latest company strategies and initiatives. Fortinet’s conference presentations are expected to be available via webcast on the company’s web site. To access the most updated information, pre-register and listen to the webcast of each event, please visit the Investor Presentation & Events page of Fortinet’s website at https://investor.fortinet.com/events-and-presentations. The schedule is subject to change. About Fortinet (www.fortinet.com) Fortinet (NASDAQ: FTNT) makes possible a digital world that we can trust through its mission to protect people, devices and data everywhere. This is why many of the world’s largest enterprises, service providers and government organizations choose Fortinet to securely accelerate their digital journey. The Fortinet Core Platform and Platform Extension products deliver broad, integrated and automated protections across the entire digital attack surface, securing critical devices, data, applications, and connections from the data center to the cloud to the home office. The Fortinet NSE Training Institute, an initiative of Fortinet’s Training Advancement Agenda, provides one of the largest and broadest training programs in the industry to make cyber training and new career opportunities available to everyone. Learn more at https://www.fortinet.com, the Fortinet Blog or FortiGuard Labs. Copyright © 2022 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiMail, FortiSandbox, FortiADC, FortiAI, FortiAIOps, FortiAntenna, FortiAP, FortiAPCam, FortiAuthenticator, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCASB, FortiCentral, FortiCNP, FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec, FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFone, FortiGSLB, FortiGuest, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMonitor, FortiNAC, FortiNDR, FortiPenTest, FortiPhish, FortiPolicy, FortiPortal, FortiPresence, FortiProxy, FortiRecon, FortiRecorder, FortiSASE, FortiSDNConnector, FortiSIEM, FortiSMS, FortiSOAR, FortiSwitch, FortiTester, FortiToken, FortiTrust, FortiVoice, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLM and FortiXDR. Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments. FTNT-F Forward-Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding any indications related to future market share gains, guidance and expectations around future financial results, including guidance and expectations for the first quarter and full year 2023, statements regarding the momentum in our business and future growth expectations, and any statements regarding our market opportunity and market size, and business momentum. Although we attempt to be accurate in making forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based such that actual results are materially different from our forward-looking statements in this release. Important factors that could cause results to differ materially from the statements herein include the following: general economic risks, including those caused by economic challenges, expectations of a recession or any actual recession, and the effects of increased inflation and interest rates in certain geographies or as a result of the COVID-19 pandemic and the war in Ukraine; supply chain challenges due to the current global environment; negative impacts from the COVID-19 pandemic on sales, billings, revenue, demand and buying patterns, component supply and ability to manufacture products to meet demand in a timely fashion, and costs such as possible increased costs for shipping and components; global economic conditions, country-specific economic conditions, and foreign currency risks; competitiveness in the security market; the dynamic nature of the security market and its products and services; specific economic risks worldwide and in different geographies, and among different customer segments; uncertainty regarding demand and increased business and renewals from existing customers; uncertainties around continued success in sales growth and market share gains; uncertainties in market opportunities and the market size; actual or perceived vulnerabilities in our supply chain, products or services, and any actual or perceived breach of our network or our customers’ networks; longer sales cycles, particularly for larger enterprise, service providers, government and other large organization customers; the effectiveness of our salesforce and failure to convert sales pipeline into final sales; risks associated with successful implementation of multiple integrated software products and other product functionality risks; risks associated with integrating acquisitions and changes in circumstances and plans associated therewith, including, among other risks, changes in plans related to product and services integrations, product and services plans and sales strategies; sales and marketing execution risks; execution risks around new product development and introductions and innovation; litigation and disputes and the potential cost, distraction and damage to sales and reputation caused thereby or by other factors; cybersecurity threats, breaches and other disruptions; market acceptance of new products and services; the ability to attract and retain personnel; changes in strategy; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; risks associated with the adoption of, and demand for, our products and services in general and by specific customer segments, including those caused by the COVID-19 pandemic; competition and pricing pressure; product inventory shortages for any reason, including those caused by the effects of increased inflation and interest rates in certain geographies, the COVID-19 pandemic and the war in Ukraine; risks associated with business disruption caused by natural disasters and health emergencies such as earthquakes, fires, power outages, typhoons, floods, health epidemics and viruses such as the COVID-19 pandemic, and by manmade events such as civil unrest, labor disruption, international trade disputes, international conflicts such as the war in Ukraine, terrorism, wars, and critical infrastructure attacks; tariffs, trade disputes and other trade barriers, and negative impact on sales based on geo-political dynamics and disputes and protectionist policies; any political and government disruption around the world, including the impact of any future shutdowns of the U.S. government; and the other risk factors set forth from time to time in our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and our other filings with the Securities and Exchange Commission (“SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Non-GAAP Financial Measures We have provided in this release financial information that has not been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial and liquidity measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with peer companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables below. Billings (non-GAAP). We define billings as revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period, less any deferred revenue balances acquired from business combination(s) and adjustment due to adoption of new accounting standard during the period. We consider billings to be a useful metric for management and investors because billings drive current and future revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings instead of GAAP revenue. First, billings include amounts that have not yet been recognized as revenue and are impacted by the term of security and support agreements. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. Management accounts for these limitations by providing specific information regarding GAAP revenue and evaluating billings together with GAAP revenue. Free cash flow (non-GAAP). We define free cash flow as net cash provided by operating activities minus purchases of property and equipment and excluding any significant non-recurring items. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after capital expenditures and net of proceeds from intellectual property matter, can be used for strategic opportunities, including repurchasing outstanding common stock, investing in our business, making strategic acquisitions and strengthening the balance sheet. A limitation of using free cash flow rather than the GAAP measures of cash provided by or used in operating activities, investing activities, and financing activities is that free cash flow does not represent the total increase or decrease in the cash and cash equivalents balance for the period because it excludes cash flows from significant non-recurring items, investing activities other than capital expenditures and cash flows from financing activities. Management accounts for this limitation by providing information about our capital expenditures and other investing and financing activities on the face of the cash flow statement and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting cash flows from investing and financing activities in our reconciliation of free cash flow. In addition, it is important to note that other companies, including companies in our industry, may not use free cash flow, may calculate free cash flow in a different manner than we do or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of free cash flow as a comparative measure. Non-GAAP operating income and operating margin. We define non-GAAP operating income as operating income plus stock-based compensation, impairment and amortization of acquired intangible assets, less gain on intellectual property matter and, when applicable, other significant non-recurring items in a given quarter. Non-GAAP operating margin is defined as non-GAAP operating income divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the items noted above so that our management and investors can compare our recurring core business operating results over multiple periods. There are a number of limitations related to the use of non-GAAP operating income instead of operating income calculated in accordance with GAAP. First, non-GAAP operating income excludes the items noted above. Second, the components of the costs that we exclude from our calculation of non-GAAP operating income may differ from the components that peer companies exclude when they report their non-GAAP results of operations. Management accounts for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating income and evaluating non-GAAP operating income together with operating income calculated in accordance with GAAP. Non-GAAP net income and diluted net income per share attributable to Fortinet, Inc. We define non-GAAP net income as net income plus the items noted above under non-GAAP operating income and operating margin. In addition, we adjust non-GAAP net income and diluted net income per share for a non-cash charge on equity method investment comprised of impairment and other intervening events, a tax adjustment required for an effective tax rate on a non-GAAP basis and adjustments attributable to non-controlling interests, which differs from the GAAP effective tax rate. We define non-GAAP diluted net income per share as non-GAAP net income divided by the non-GAAP diluted weighted-average shares outstanding. We consider these non-GAAP financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income and non-GAAP operating margin. However, in order to provide a more complete picture of our recurring core business operating results, we include in non-GAAP net income and non-GAAP diluted net income per share, the tax adjustment required resulting in an effective tax rate on a non-GAAP basis, which often differs from the GAAP tax rate. We believe the non-GAAP effective tax rates we use are reasonable estimates of normalized tax rates for our current and prior fiscal years under our global operating structure. The same limitations described above regarding our use of non-GAAP operating income and non-GAAP operating margin apply to our use of non-GAAP net income and non-GAAP diluted net income per share. We account for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and non-GAAP diluted net income per share and evaluating non-GAAP net income and non-GAAP diluted net income per share together with net income and diluted net income per share calculated in accordance with GAAP. FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions) December 31, 2022 December 31, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,682.9 $ 1,319.1 Short-term investments 502.6 1,194.0 Marketable equity securities 25.5 38.6 Accounts receivable—net 1,261.7 807.7 Inventory 264.6 175.8 Prepaid expenses and other current assets 73.1 65.4 Total current assets 3,810.4 3,600.6 LONG-TERM INVESTMENTS 45.5 440.8 PROPERTY AND EQUIPMENT—NET 898.5 687.6 DEFERRED CONTRACT COSTS 518.2 423.3 DEFERRED TAX ASSETS 569.4 342.3 GOODWILL AND OTHER INTANGIBLE ASSETS—NET 184.0 188.7 OTHER ASSETS 202.0 235.8 TOTAL ASSETS $ 6,228.0 $ 5,919.1 LIABILITIES AND EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 243.4 $ 148.4 Accrued liabilities 266.3 197.3 Accrued payroll and compensation 219.4 195.0 Deferred revenue 2,349.3 1,777.4 Total current liabilities 3,078.4 2,318.1 DEFERRED REVENUE 2,291.0 1,675.5 INCOME TAX LIABILITIES 67.8 79.5 LONG-TERM DEBT 990.4 988.4 OTHER LIABILITIES 82.0 59.2 Total liabilities 6,509.6 5,120.7 COMMITMENTS AND CONTINGENCIES EQUITY (DEFICIT): Common stock 0.8 0.8 Additional paid-in capital 1,284.2 1,253.6 Accumulated other comprehensive loss (20.2 ) (4.8 ) Accumulated deficit (1,546.4 ) (467.9 ) Total Fortinet, Inc. stockholders’ equity (deficit) (281.6 ) 781.7 Non-controlling interests — 16.7 Total equity (deficit) (281.6 ) 798.4 TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 6,228.0 $ 5,919.1 FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts) Three Months Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 REVENUE: Product $ 540.1 $ 378.9 $ 1,780.5 $ 1,255.0 Service 742.9 584.7 2,636.9 2,087.2 Total revenue 1,283.0 963.6 4,417.4 3,342.2 COST OF REVENUE: Product 189.9 146.5 691.3 487.7 Service 107.4 81.8 393.6 295.3 Total cost of revenue 297.3 228.3 1,084.9 783.0 GROSS PROFIT: Product 350.2 232.4 1,089.2 767.3 Service 635.5 502.9 2,243.3 1,791.9 Total gross profit 985.7 735.3 3,332.5 2,559.2 OPERATING EXPENSES: Research and development 128.9 112.6 512.4 424.2 Sales and marketing 455.9 367.7 1,686.1 1,345.7 General and administrative 44.3 41.3 169.0 143.5 Gain on intellectual property matter (1.2 ) (1.2 ) (4.6 ) (4.6 ) Total operating expenses 627.9 520.4 2,362.9 1,908.8 OPERATING INCOME 357.8 214.9 969.6 650.4 INTEREST INCOME 9.1 1.0 17.4 4.5 INTEREST EXPENSE (4.5 ) (4.5 ) (18.0 ) (14.9 ) OTHER INCOME (EXPENSE)—NET 5.8 (4.1 ) (13.5 ) (11.6 ) INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENT 368.2 207.3 955.5 628.4 PROVISION FOR INCOME TAXES 9.2 3.7 30.8 14.1 LOSS FROM EQUITY METHOD INVESTMENT (45.2 ) (4.8 ) (68.1 ) (7.6 ) NET INCOME INCLUDING NON-CONTROLLING INTERESTS 313.8 198.8 856.6 606.7 Less: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX — (0.2 ) (0.7 ) (0.1 ) NET INCOME ATTRIBUTABLE TO FORTINET, INC. $ 313.8 $ 199.0 $ 857.3 $ 606.8 Net income per share attributable to Fortinet, Inc.(a): Basic $ 0.40 $ 0.24 $ 1.08 $ 0.74 Diluted $ 0.40 $ 0.24 $ 1.06 $ 0.73 Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.(a): Basic 780.9 814.9 791.4 816.1 Diluted 791.8 835.0 805.3 835.3 (a) All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022. FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in millions) Year Ended December 31, 2022 December 31, 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income including non-controlling interests $ 856.6 $ 606.7 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 217.3 207.9 Amortization of deferred contract costs 223.3 175.9 Depreciation and amortization 104.3 84.4 Amortization of investment premiums 4.4 6.9 Loss from equity method investment 68.1 7.6 Other 23.6 7.9 Changes in operating assets and liabilities, net of impact of business combinations: Accounts receivable—net (456.7 ) (72.5 ) Inventory (109.1 ) (19.4 ) Prepaid expenses and other current assets (7.7 ) (17.7 ) Deferred contract costs (318.2 ) (294.5 ) Deferred tax assets (226.4 ) (94.0 ) Other assets (35.3 ) (19.0 ) Accounts payable 105.2 (13.1 ) Accrued liabilities 55.2 49.9 Accrued payroll and compensation 25.0 44.0 Other liabilities 23.5 (0.7 ) Deferred revenue 1,177.5 839.4 Net cash provided by operating activities 1,730.6 1,499.7 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (389.1 ) (2,308.0 ) Sales of investments 3.0 85.5 Maturities of investments 1,462.0 1,470.3 Purchases of property and equipment (281.2 ) (295.9 ) Purchases of investment in privately held company — (160.0 ) Payments made in connection with business combinations, net of cash acquired (30.8 ) (74.9 ) Purchases of marketable equity securities — (42.5 ) Other — 0.4 Net cash provided by (used in) investing activities 763.9 (1,325.1 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term borrowings, net of discount and underwriting fees — 989.4 Payments for debt issuance costs — (2.4 ) Repurchase and retirement of common stock (1,991.2 ) (741.8 ) Proceeds from issuance of common stock 26.1 26.0 Taxes paid related to net share settlement of equity awards (160.4 ) (167.9 ) Payments of debt assumed in connection with business combinations — (19.5 ) Other (4.8 ) (1.0 ) Net cash provided by (used in) financing activities (2,130.3 ) 82.8 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (0.4 ) (0.1 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 363.8 257.3 CASH AND CASH EQUIVALENTS—Beginning of year 1,319.1 1,061.8 CASH AND CASH EQUIVALENTS—End of year $ 1,682.9 $ 1,319.1 Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (Unaudited, in millions, except per share amounts) Reconciliation of net cash provided by operating activities to free cash flow Three Months Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Net cash provided by operating activities $ 528.1 $ 366.8 $ 1,730.6 $ 1,499.7 Less: Purchases of property and equipment (30.9 ) (151.3 ) (281.2 ) (295.9 ) Free cash flow $ 497.2 $ 215.5 $ 1,449.4 $ 1,203.8 Net cash provided by (used in) investing activities $ 217.4 $ (265.9 ) $ 763.9 $ (1,325.1 ) Net cash provided by (used in) financing activities $ (27.4 ) $ (633.6 ) $ (2,130.3 ) $ 82.8 Reconciliation of GAAP operating income to non-GAAP operating income, operating margin, net income attributable to Fortinet, Inc. and diluted net income per share attributable to Fortinet, Inc. Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results Operating income $ 357.8 $ 59.8 (a) $ 417.6 $ 214.9 $ 59.8 (b) $ 274.7 Operating margin 27.9 % 32.5 % 22.3 % 28.5 % Adjustments: Stock-based compensation 55.3 54.2 Amortization of acquired intangible assets 5.7 6.8 Gain on intellectual property matter (1.2 ) (1.2 ) Tax adjustment (63.6 ) (c) (52.4 ) (c) Non-cash charge on equity method investment 39.7 (d) — Adjustments attributable non-controlling interests — (0.6 ) (e) Net income attributable to Fortinet, Inc. $ 313.8 $ 35.9 $ 349.7 $ 199.0 $ 6.8 $ 205.8 Diluted net income per share attributable to Fortinet, Inc.(f) $ 0.40 $ 0.44 $ 0.24 $ 0.25 Shares used in diluted net income per share attributable to Fortinet, Inc. calculations(f) 791.8 791.8 835.0 835.0 (a) To exclude $55.3 million of stock-based compensation and $5.7 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended December 31, 2022. (b) To exclude $54.2 million of stock-based compensation and $6.8 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended December 31, 2021. (c) Non-GAAP financial information is adjusted to an overall effective tax rate of 17% and 21% in the three months ended December 31, 2022 and 2021, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate. (d) To exclude a $39.7 million non-cash charge, primarily comprised of the impairment charge on our equity method investment in Linksys Holdings Inc. (“Linksys”) and other intervening events related to the establishment of a valuation allowance against Linksys deferred tax assets. (e) Adjustments related to the non-GAAP results attributable to non-controlling interests, which were adjusted to an effective tax rate of 31% for the subsidiary of Alaxala Networks Corporation (“Alaxala”) in the three months ended December 31, 2021. (f) All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022. Year Ended December 31, 2022 Year Ended December 31, 2021 GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results Operating income $ 969.6 $ 238.5 (a) $ 1,208.1 $ 650.4 $ 225.1 (b) $ 875.5 Operating margin 21.9 % 27.3 % 19.5 % 26.2 % Adjustments: Stock-based compensation 219.8 211.2 Amortization of acquired intangible assets 23.3 18.5 Gain on intellectual property matter (4.6 ) (4.6 ) Tax adjustment (172.2 ) (c) (165.1 ) (c) Non-cash charge on equity method investment 39.7 (d) — Adjustments attributable non-controlling interests (1.7 ) (e) (0.8 ) (e) Net income attributable to Fortinet, Inc. $ 857.3 $ 104.3 $ 961.6 $ 606.8 $ 59.2 $ 666.0 Diluted net income per share attributable to Fortinet, Inc.(f) $ 1.06 $ 1.19 $ 0.73 $ 0.80 Shares used in diluted net income per share calculations(f) 805.3 805.3 835.3 835.3 (a) To exclude $219.8 million of stock-based compensation and $23.3 million of amortization of acquired intangible assets, offset by a $4.6 million gain on intellectual property matter in 2022. (b) To exclude $211.2 million of stock-based compensation and $18.5 million of amortization of acquired intangible assets, offset by a $4.6 million gain on intellectual property matter in 2021. (c) Non-GAAP financial information is adjusted to an overall effective tax rate of 17% and 21% in 2022 and 2021, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate. (d) To exclude a $39.7 million non-cash charge, primarily comprised of the impairment charge on our equity method investment in Linksys and other intervening events related to the establishment of a valuation allowance against Linksys deferred tax assets. (e) Adjustments related to the non-GAAP results attributable to non-controlling interests, which were adjusted to an effective tax rate of 31% for the subsidiary of Alaxala in 2022 and 2021. (f) All share and per share amounts presented herein have been retroactively adjusted to reflect the five-for-one forward stock split which was effective June 22, 2022. Reconciliation of total revenue to total billings Three Months Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Total revenue $ 1,283.0 $ 963.6 $ 4,417.4 $ 3,342.2 Add: Change in deferred revenue 446.8 346.5 1,187.4 847.6 Less: Deferred revenue balance acquired in business acquisitions (10.8 ) — (10.8 ) (4.1 ) Less: Adjustment due to adoption of ASU 2021-083 — (4.3 ) — (4.3 ) Total billings $ 1,719.0 $ 1,305.8 $ 5,594.0 $ 4,181.4 3 We early adopted ASU 2021-08 on a retrospective basis and effective for us beginning on January 1, 2021. The adoption of ASU 2021-08 resulted in a $4.3 million adjustment attributable to the acquisition of Alaxala in 2021, as a result of the revised measurement of deferred revenue for acquisition. Investor Contact: Media Contact: Peter Salkowski John Welton Fortinet, Inc. Fortinet, Inc. 408-331-4595 408-235-7700 psalkowski@fortinet.com pr@fortinet.com
Complex Natural Language Comprehension from OpenAI Adds "Ask Hailey" Understanding of Language Nuances to Powerful 6clicks GRC AI Engine MELBOURNE, Australia, Feb. 8, 2023 /PRNewswire/ -- 6clicks, the GRC innovators, today announced "Ask Hailey," the next step in Governance, Risk Management and Compliance (GRC) through the integration of GPT-3 natural language technology from its partnering with OpenAI and Microsoft. The new, complex natural language comprehension accommodates the nuances and variety of language used in risk and compliance documents around the world and speeds the automated compliance mapping of the 6clicks platform. The new capabilities evolve the already language-intelligent 6clicks AI engine, Hailey, to become "Ask Hailey" with the industry's most advanced capacity to quickly and accurately address risk and legal requirements. "The constantly changing risk, regulatory and compliance landscape with its subtle differences in wording and grammar make GRC increasingly more challenging and difficult," said Anthony Stevens, Co-Founder and CEO, 6clicks. "Evolving our Hailey AI engine with GPT-3 enables organizations to better deal with the realities of increasing scope, difficulty and detail of GRC." The 6clicks platform, launched in 2020, automates compliance mapping between standards and identifies an organization's control gaps in policies when compared against given standards or regulations. Customer experience showed in 2021, even without the addition of GPT-3, a typical time savings of 14-fold compared to manual processes, effectively reducing a workload that would otherwise take days to just minutes. "Integrating GPT-3 into 6clicks dramatically accelerates our mission to make GRC smarter, easier and better able to streamline risk and compliance processes, especially at scale," said Louis Strauss, Co-Founder and Chief Product Officer, 6clicks. "Our indicators thus far suggest that the Ask Hailey version of our GRC AI engine will result in workforce productivity increases of over 100-fold, enabling under-resourced teams to keep current with growing workloads of greater complexity to minimize risk and ensure compliance." The integration of GPT-3 into Hailey marks a significant milestone in the platform's evolution and will make it the most advanced risk and compliance platform available on the market. With the power of GPT-3, Ask Hailey can now understand and interpret nuanced text more naturally, making it easier to map compliance protocols and speed up risk and control definition with landmark levels of speed, accuracy and consistency. Ask Hailey not only provides data about standards and regulations, but it can also provide critical information about the implications of those standards and regulations. This enables organizations to have a complete understanding of their compliance requirements rapidly and make more informed decisions faster and with greater confidence. For example, when defining a cybersecurity access management policy in 6clicks based on ISO 27001 and NIST CSF, "Ask Hailey" will understand the specific wording and context of those standards as well as the policy scope and generate a bespoke description of the policy. Likewise, for specific controls, "Ask Hailey" will take the context of the linked requirements and automatically generate the related control definition. This saves the individual creating the policy an enormous amount of time. With the introduction of "Ask Hailey" and its integration of GPT-3, the 6clicks GRC platform can now, at the click of a button: Generate policy and control documentation based on related standards, frameworks or regulations Generate control definitions based on the control context, risks and associated references Map standards, laws and regulations to demonstrate compliance across related standards, laws and regulations based on a single assessment Identify the overlap and gaps between company controls and policies and external standards, laws and regulations Hailey has been developed using technology and OpenAI and uses bleeding-edge computer science technology related to natural language processing and machine learning. In 2023, the hyper-acuity of risk and compliance challenges cannot be underestimated, especially in relation to evolving cybersecurity requirements and threats across virtually every industry worldwide. With advancements in AI and ongoing digital transformation, the skills organizations need will undoubtedly change where practitioners spend time and how productivity is defined and evaluated. AI advancements in GRC ultimately create opportunity: more can be done faster with less. Request a demo of 6clicks here: https://www.6clicks.com/get-started About 6clicks Recognizing the immense challenges facing risk and compliance teams, 6clicks was founded to apply the power of AI within a productive management framework to exponentially advance teams. Aside from being fast to implement and easy to use, 6clicks is making waves in the market through: Hub & Spoke architecture – designed from the ground up to support multi-tenanted distributed deployment - perfect for large enterprises, advisors and MSPs. Hailey, the 6clicks AI engine that does in seconds what would take weeks, including compliance mapping and policy gap analysis, and now control set and control description automation – a boon for compliance professionals. Fully integrated content – no 'uploads', external data feeds or a lack of traceability – all you need is baked into the platform. As the name suggests (read: "The founder's story: How 6clicks was born and what's behind the name"), 6clicks makes it easy to manage risk and compliance—faster and with greater accuracy, consistency and scalability. Designed for advisors and businesses and powered by AI and integrated content, 6clicks is taking on giants like ServiceNow, Dilligent, OneTrust, RSA Archer and Galvanize by reinventing how automated GRC operates. Elaine Suezoelaine.suezo@6clicks.com
Noventiq's purpose-built unified collaboration and communication platform outpaces competitors with its superior design, latency, reliability, while also keeping sound governance and savings as its central pillars. SAN ANTONIO, Feb. 8, 2023 /PRNewswire/ -- Frost & Sullivan recently conducted research on the collaboration services market and, based on the results of their analysis, have recognized Noventiq (formerly Softline) with the 2022 Latin America Product Leadership Award. Noventiq, the London-headquartered leading digital transformation and cybersecurity solutions and services provider for emerging markets, is one of Microsoft's top global partners, empowering customers to measure and manage their voice with specificity and granular detail through continuous innovation and leadership. Hosted on Microsoft Azure, TOTAL VOICE uses a single, centralized telecommunications infrastructure to achieve significant cost savings, deliver latency and reliability, and address the challenge of cloud communications. Noventiq Noventiq's TOTAL VOICE uses real-time communication protocols for customer-facing and back-end connections. The solution is compatible with digital, analog, or IP telephony and can be used with any system that combines these technologies. It also supports operations with any blend of trunking devices, such as network border controllers and gateways from diverse manufacturers, enabling routing and cost-tracking across any company's network. The solution allows organizations to make automated routing decisions on voice networks based on carriers, tariffs, minute rates, or congestion. Customers also benefit from the opportunity to add advanced capabilities, such as click-to-call and click-to-video, to existing websites, portals, and applications. TOTAL VOICE is a transition and operation tool that enables companies with a mix of analog, digital and/or IP on-premise to migrate their voice networks to Microsoft Teams at their own pace, and according to the depreciation of their existing voice technology assets. Post-migration, the solution is ideal for managing and reporting for an enterprise-grade voice network, due to the significant number of traditional telecommunications features available. Noventiq TOTAL VOICE's billing module improves visibility and allows organizations to track and assign expenses to cost centers or individual users, as well as to set cost controls, reminders, alerts, and external call restrictions. The calling module supplies local and international numbers and consumption plans without any capital expenditure required on the front end. The adopting module provides analytics on usage, allowing companies to supervise employees, optimize deployments, and configure governance model policies for their specific needs. The engaging module serves as a console for generating call center service queues for incoming voice campaigns and an easy-to-use attendant interface for seamless switching. TOTAL VOICE also developed call center functionalities for Microsoft Teams to upgrade traditional Voice (PBX) to a Call Center environment via the engaging module. Noventiq addressed the requirements of both worlds, telecommunication (telco) and IT, with an adopting module, providing a useful tool for implementing complex governance models and analyzing adoption (usually required by IT departments), and IP communications analysis—a must for any telco division. Sebastian Menutti, Frost & Sullivan's Industry Principal, noted, "By displaying and selling the inventory of carriers via an application programming interface and providing it through the Azure marketplace, Noventiq serves as a voice broker. The flexible and agile configuration offers immediate access to inventory with seamless execution, differentiating Noventiq from the competition." "By incorporating extensive customer feedback in its product design and comprehensive change management support to guarantee seamless deployment, Noventiq helps organizations move their voice network seamlessly to the cloud while adhering to limited budgets," added Riana Barnard, Best Practices Research Analyst for Frost & Sullivan. Ricardo Pardo, Director UCaaS Noventiq Latin America, comments: "We are incredibly proud to receive this recognition from Frost & Sullivan. At Noventiq, we work every day to help organizations transform and operate efficiently and securely in an increasingly digital economy. Thanks to the great partners we work with, such as Microsoft, we are achieving this goal." With a robust overall performance, Noventiq has earned Frost & Sullivan's 2022 Latin America Product Leadership Award in the collaboration services industry. Each year, Frost & Sullivan presents this award to the company that has developed a product with innovative features and functionality which is gaining rapid acceptance in the market. The award recognizes the quality of the solution and the customer value enhancements it enables. Frost & Sullivan Best Practices awards recognize companies in various regional and global markets for demonstrating outstanding achievement and superior performance in leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analyses, and extensive secondary research to identify best practices in the industry. About Frost & Sullivan For six decades, Frost & Sullivan has been world-renowned for helping investors, corporate leaders, and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models, and companies to action, resulting in a continuous flow of growth opportunities to drive future success. Contact us: Start the discussion. Contact:Lindsey WhitakerP: 1.210.477.8457E: Lindsey.Whitaker@frost.com About Noventiq Noventiq is the new brand name of Softline Holding plc, one of the fastest growing players in the sector. It is a leading global solutions and services provider in digital transformation and cybersecurity, headquartered in London. Under this brand, the company enables, facilitates and accelerates the digital transformation of its customers' businesses, connecting over 75,000 organizations from all industries with hundreds of best-in-class IT vendors, and delivering its own services and solutions. The company delivered turnover of approximately US$1.1 billion in the fiscal year of 2021. It is listed on the London Stock Exchange following its successful IPO in October 2021.The company´s ~3,900 employees work in almost 60 countries throughout Asia, Latin America, Europe, Middle East and Africa - markets with significant growth potential. Additional information about the company can be found here: https://noventiq.com/ Contact:Rocio HerraizGlobal Head of Communicationspr@noventiq.com
December 2022 quarter: GAAP EPS of 30.9 cps; Adjusted EPS of 18.5 cps, up 7% on a comparable constant currency basis Highlights - Six Months Ended December 31, 2022 Net sales of $7,354 million, up 6%; GAAP Net income of $691 million, up 62%; GAAP diluted earnings per share (EPS) of 46.1 cps, up 65%; Adjusted EPS of 36.6 cps, up 8% on a comparable constant currency basis; Adjusted EBIT of $791 million, up 8% on a comparable constant currency basis; Increasing cash returns to shareholders: quarterly dividend of 12.25 cents per share; and up to $500 million of share repurchases expected in fiscal 2023, including an additional $100 million announced today; and Fiscal 2023 outlook: Maintaining adjusted EPS and Free Cash Flow ranges at 77-81 cps and $1-1.1 billion, respectively. ZURICH, Feb. 8, 2023 /PRNewswire/ -- Amcor CEO Ron Delia said: "Amcor delivered strong financial performance for the first half of fiscal 2023, demonstrating excellent operating leverage amid ongoing challenges in the macroeconomic environment. For the year-to-date, organic net sales growth of 2% drove an 8% increase in adjusted earnings per share on a comparable constant currency basis. We continue to make good progress on our commercial and strategic agenda and our teams are doing an excellent job navigating through volatile market conditions, while recovering general inflation and higher raw material costs. Our exposure to consumer staples and healthcare end markets positions our business well despite some softening in the demand environment and customer destocking through the December quarter. We also completed the sale of our Russian plants and announced a bolt-on acquisition in China to strengthen our healthcare packaging business in the Asia Pacific region. Notwithstanding a more cautious near term outlook, we remain focused on executing against our strategy for long term growth. Our ability to generate significant annual cash flow allows us to continue to invest in multiple growth opportunities, pay an attractive and growing dividend and regularly repurchase shares. We are confident in the strength of our underlying business, execution capabilities and capital allocation framework, all of which support our compelling investment case." Key Financials Six Months Ended December 31, GAAP results 2021 $ million 2022 $ million Net sales 6,927 7,354 Net income attributable to Amcor plc 427 691 EPS (diluted US cents) 27.9 46.1 Comparableconstantcurrency ∆% Six Months Ended December 31, Reported ∆% Adjusted non-GAAP results(1) 2021 $ million 2022 $ million Net sales(2) 6,927 7,354 6 2 EBITDA 976 994 2 7 EBIT 769 791 3 8 Net income 548 548 — 6 EPS (diluted US cents) 35.8 36.6 2 8 Free Cash Flow 105 (61) (1) Adjusted non-GAAP results exclude items which are not considered representative of ongoing operations. Comparable constant currency ∆% excludes the translation impact of movements in foreign exchange rates and items affecting comparability. Further details related to non-GAAPmeasures and reconciliations to GAAP measures can be found under "Presentation of non-GAAP information" in this release. (2) Comparable constant currency ∆% for net sales excludes a 5% unfavorable currency translation impact and a 10% favorable impact from thepass through of higher raw material costs. Note: All amounts referenced throughout this document are in US dollars unless otherwise indicated and numbers may not add up precisely to thetotals provided due to rounding. Completed sale of Russian business The sale of Amcor's Russian business was completed on December 23, 2022, with the Company receiving cash proceeds of approximately $365 million, in addition to approximately $65 million of cash on hand in Russia which was repatriated upon close. Approximately $120 million of the cash received is expected to be invested in a range of additional cost saving initiatives to partly offset divested earnings. Of the remaining cash received, Amcor plans to repurchase up to $100 million in additional shares with the balance expected to be used to reduce net debt. Acquisition of MDK On January 16, 2023, the Company announced it had entered into an agreement to acquire Shanghai-based MDK. MDK is a leading provider of flexible packaging for the medical device segment generating annual sales of approximately $50 million. MDK's coating capabilities, medical paper-based packaging products and customer base complement Amcor's existing portfolio, further enhancing the Company's leadership position in the Chinese and broader Asia Pacific medical packaging segment. The acquisition is expected to close by the end of the third quarter of fiscal 2023. Shareholder returns Amcor generates significant annual cash flow, maintains strong credit metrics, and is committed to an investment grade credit rating. The Company's strong annual cash flow and balance sheet provide substantial capacity to simultaneously reinvest in the business for organic growth, pursue acquisitions and return cash to shareholders through a compelling and growing dividend as well as regular share repurchases. During the six months ended December 31, 2022, the Company returned approximately $400 million to shareholders through cash dividends and share repurchases. Dividend The Amcor Board of Directors today declared a quarterly cash dividend of 12.25 cents per share (compared with 12.00 cents per share in the same quarter last year). The dividend will be paid in US dollars to holders of Amcor's ordinary shares trading on the NYSE. Holders of CDIs trading on the ASX will receive an unfranked dividend of 17.30 Australian cents per share, which reflects the quarterly dividend of 12.25 cents per share converted at an AUD:USD average exchange rate of 0.7082 over the five trading days ended February 3, 2023. The ex-dividend date will be February 28, 2023, the record date will be March 1, 2023 and the payment date will be March 21, 2023. Share repurchases Amcor repurchased approximately 3 million shares during the six months ended December 31, 2022 for a total cost of approximately $40 million. In addition to $400 million of share repurchases announced previously, the Company expects to allocate up to $100 million of proceeds from recently divested businesses towards share purchases, bringing the total expected to be repurchased in fiscal 2023 to up to $500 million. Financial results - Six Months Ended December 31, 2022 Segment information Six Months Ended December 31, 2021 Six Months Ended December 31, 2022 Adjusted non-GAAPresults Net sales $ million EBIT $ million EBIT / Sales % EBIT / Averagefunds employed%(1) Net sales$ million EBIT $ million EBIT /Sales % EBIT / Averagefunds employed %(1) Flexibles 5,347 691 12.9 5,591 706 12.6 Rigid Packaging 1,580 117 7.4 1,763 123 7.0 Other(2) — (39) — (38) Total Amcor 6,927 769 11.1 15.6 7,354 791 10.8 16.7 (1) Return on average funds employed includes shareholders' equity and net debt, calculated using a four quarter average and last twelve monthsadjusted EBIT. (2) Represents corporate expenses. December 2022 half year: Net sales of $7,354 million increased by 6% on a reported basis, which includes an unfavorable impact of 5% related to movements in foreign currency exchange rates and price increases of approximately $670 million (representing 10% growth) related to the pass through of higher raw material costs. Items affecting comparability had no material impact on net sales. Net sales on a comparable constant currency basis were 2% higher than the same period last year reflecting price/mix benefits of approximately 3%, partly offset by approximately 1% lower volumes. GAAP Net Income was $691 million and includes a $215 million gain on the sale of the business in Russia. Adjusted EBIT of $791 million was 8% higher than last year on a comparable constant currency basis. Adjusted EBIT margin of 10.8% includes an adverse impact of approximately 100 basis points related to the increased sales dollars associated with passing through higher raw material costs. December 2022 quarter: Net sales of $3,642 million increased by 4% on a reported basis, which includes an unfavorable impact of 5% related to movements in foreign currency exchange rates and price increases of approximately $270 million (representing 8% growth) related to the pass through of higher raw material costs. Items affecting comparability had no material impact on net sales. Net sales on a comparable constant currency basis were 1% higher than the same quarter last year reflecting price/mix benefits of approximately 3%, partly offset by approximately 2% lower volumes. GAAP Net Income was $459 million and includes a $215 million gain on the sale of the business in Russia. Adjusted EBIT of $399 million was 7% higher than the same quarter last year on a comparable constant currency basis. Flexibles segment result Six Months Ended December 31, Reported∆% Comparableconstant currency ∆% 2021 $ million 2022 $ million Net sales 5,347 5,591 5 3 Adjusted EBIT 691 706 2 8 Adjusted EBIT / Sales % 12.9 12.6 December 2022 half year: On a reported basis, net sales of $5,591 million were 5% higher than the same period last year, which includes an unfavorable impact of 7% related to movements in foreign exchange rates and price increases of approximately $460 million (representing 9% growth) related to the pass through of higher raw material costs. Items affecting comparability had no material impact on net sales. Net sales on a comparable constant currency basis were 3% higher than the same period last year reflecting price/mix benefits of approximately 4%, partly offset by approximately 1% lower volumes. In North America, net sales grew in the low single digit range driven by price/mix benefits, partly offset by lower volumes. Volumes were higher in healthcare, cheese, pet care and home and personal care categories, more than offset by lower volumes in categories including condiments, fresh meat, snacks and confectionary. In Europe, net sales grew in the mid single digit range driven by price/mix benefits, partly offset by lower volumes. Higher volumes in pharmaceuticals, capsules and pet care were more than offset by lower volumes in home and personal care, coffee, yogurt and confectionary. Net sales grew at low single digit rates across the Asia Pacific region reflecting price/mix benefits partly offset by lower volumes. Growth was strong in India, Australia and in the pan Asian healthcare and meat end markets, partly offset by lower volumes in China where demand was unfavorably impacted by COVID related lockdowns, particularly in the December 2022 quarter. In Latin America, net sales grew at low single digit rates driven by favorable price/mix benefits, partly offset by lower volumes which weakened in the December 2022 quarter across Brazil and Chile. Adjusted EBIT of $706 million was 8% higher than the same period last year on a comparable constant currency basis, reflecting price/mix benefits, strong management of inflation and favorable operating cost performance. Adjusted EBIT margin of 12.6% includes an adverse impact of approximately 120 basis points related to the increased sales dollars associated with passing through higher raw material costs. December 2022 quarter: On a reported basis, net sales of $2,812 million were 4% higher than the same quarter last year, which includes an unfavorable impact of 6% related to movements in foreign exchange rates and price increases of approximately $190 million (representing 7% growth) related to the pass through of higher raw material costs. Items affecting comparability had no material impact on net sales. Net sales on a comparable constant currency basis were 3% higher than the same quarter last year reflecting price/mix benefits of approximately 4%, partly offset by 1.5% lower volumes. Adjusted EBIT of $353 million was 5% higher than the same quarter last year on a comparable constant currency basis. Rigid Packaging segment result Six Months Ended December 31, Reported ∆% Comparableconstant currency ∆% 2021 $ million 2022 $ million Net sales 1,580 1,763 12 (1) Adjusted EBIT 117 123 5 7 Adjusted EBIT / Sales % 7.4 7.0 December 2022 half year: On a reported basis, net sales of $1,763 million were 12% higher than the same period last year, which includes an unfavorable impact of 1% related to movements in foreign exchange rates and price increases of approximately $210 million (representing 13% growth) related to the pass through of higher raw material costs. Net sales on a comparable constant currency basis were 1% lower than the same period last year reflecting approximately 2% lower volumes, partly offset by price/mix benefits of approximately 1%. In North America, overall beverage volumes were 5% lower than the same period last year. Hot fill beverage container volumes were up 2% as a result of continued growth in key categories, offset by lower combined preform and cold fill container volumes compared to the prior period. In the December 2022 quarter, overall beverage volumes were 7% lower than the same quarter last year which reflects lower consumer demand and customer destocking, partly offset by new business wins. December 2022 quarter hot fill beverage container volumes were 2% lower than last year, in line with the market. Year to date specialty container volumes were higher than the same period last year driven by growth in the healthcare, dairy and nutrition end markets. In Latin America, volumes were marginally higher than last year with volume growth in Argentina and Mexico offset by lower volumes in Brazil. December 2022 quarter volumes were unfavorably impacted by softening demand mainly in Argentina and Brazil and overall volumes declined at mid single digit rates. Adjusted EBIT of $123 million was 7% higher than the same period last year on a comparable constant currency basis, reflecting improved cost performance. Adjusted EBIT margin of 7.0% includes an adverse impact of approximately 90 basis points related to the increased sales dollars associated with passing through higher raw material costs. December 2022 quarter: On a reported basis, net sales of $830 million were 4% higher than the same quarter last year, which includes an unfavorable impact of 1% related to movements in foreign exchange rates and price increases of approximately $80 million (representing 10% growth) related to the pass through of higher raw material costs. Net sales on a comparable constant currency basis were 5% lower than the same quarter last year reflecting lower volumes. Adjusted EBIT of $57 million was 6% higher than the same quarter last year on a comparable constant currency basis. Net interest and income tax expense For the half year ended 31 December, 2022, net interest expense of $118 million was $49 million higher than the same period last year reflecting higher interest rates. GAAP income tax expense was $91 million compared with $124 million in the same period last year. Excluding amounts related to non-GAAP adjustments, adjusted tax expense for the half year ended December 31, 2022 was $121 million compared with $147 million in the same period last year. Adjusted tax expense represents an effective tax rate of 18.0%, compared with 21.0% in the same period last year. Free Cash Flow For the December 2022 half year, adjusted free cash outflow was $61 million compared with an inflow of $105 million in the same period last year. As expected, the variance compared with last year largely reflects the impact of higher inventory levels to mitigate supply chain constraints mainly through the 2022 fiscal year, along with the unfavorable impact on the working capital cycle related to higher raw material costs. December 2022 quarter adjusted Free cash inflow of $338 million was in line with the same quarter last year. Net debt was $6,065 million at December 31, 2022. Leverage, measured as net debt divided by adjusted trailing twelve month EBITDA, was 2.8 times. Fiscal 2023 guidance For the twelve month period ending June 30, 2023, assuming current foreign exchange rates prevail through the balance of the year, the Company expects: Adjusted EPS on a reported basis of 77 to 81 cents per share, however, entering the second half of the year the Company is more cautious in relation to the demand environment. Adjusted EPS expectations include: - Growth of approximately 3-8% on a comparable constant currency basis comprising approximately 5-10% growth from the underlying business performance and a benefit of approximately 2% from share repurchases, partly offset by a negative impact of approximately 4% related to higher combined interest and tax expense; - A negative impact of approximately 3% related to the sale of the Company's three plants in Russia on December 23, 2022 (updated from a negative 2% previously); and - A negative impact of approximately 4% related to a stronger US dollar (updated from a negative 5% previously). Adjusted Free Cash Flow of approximately $1.0 billion to $1.1 billion. Up to $500 million of cash to be allocated towards share repurchases (updated from $400 million previously). Amcor's guidance contemplates a range of factors which create a degree of uncertainty and complexity when estimating future financial results, and is provided in the context of greater than usual volatility in demand. The Company provides guidance on a non-GAAP basis as we are unable to predict with reasonable certainty the ultimate outcome and timing of certain significant forward-looking items without unreasonable effort. Further information can be found under 'Cautionary Statement Regarding Forward-Looking Statements' in this release. Conference Call Amcor is hosting a conference call with investors and analysts to discuss these results on February 7, 2023 at 5.30pm US Eastern Daylight Time / February 8, 2023 at 9.30am Australian Eastern Daylight Time. Investors are invited to listen to a live webcast of the conference call at our website, www.amcor.com, in the "Investors" section. Those wishing to access the call should use the following numbers, with the Conference ID 8080870: US & Canada – 888 440 4149 (toll-free), 646 960 0661 (local) Australia – 1800 519 630 (toll free), 02 9133 7103 (local) United Kingdom – 0800 358 0970 (toll free), 020 3433 3846 (local) Singapore – +65 3159 5133 (local number) Hong Kong – +852 3002 3410 (local number) From all other countries, the call can be accessed by dialing +1 646 960 0661 (toll). A replay of the webcast will also be available in the "Investors" section at www.amcor.com following the call. About Amcor Amcor is a global leader in developing and producing responsible packaging solutions for food, beverage, pharmaceutical, medical, home and personal-care, and other products. Amcor works with leading companies around the world to protect their products, differentiate brands, and improve supply chains through a range of flexible and rigid packaging, specialty cartons, closures and services. The Company is focused on making packaging that is increasingly light-weighted, recyclable and reusable, and made using an increasing amount of recycled content. In fiscal 2022, 44,000 Amcor people generated $14.5 billion in annual sales from operations that span 220 locations in 43 countries. NYSE: AMCR; ASX: AMC www.amcor.com I LinkedIn I Facebook I Twitter I YouTube Contact Information Investors Tracey Whitehead Damien Bird Damon Wright Global Head of Investor Relations Vice President Investor Relations Asia Pacific Vice President Investor Relations North America Amcor Amcor Amcor +61 3 9226 9028 / +1 2244785790 +61 3 9226 9070 +1 224 313 7141 tracey.whitehead@amcor.com damien.bird@amcor.com damon.wright@amcor.com Media - Australia Media - Europe & North America James Strong Ernesto Duran Partner Head of Global Communications Citadel-MAGNUS Amcor +61 448 881 174 +41 78 698 69 40 jstrong@citadelmagnus.com ernesto.duran@amcor.com Amcor plc UK Establishment Address: 83 Tower Road North, Warmley, Bristol, England, BS30 8XP, United KingdomUK Overseas Company Number: BR020803Registered Office: 3rd Floor, 44 Esplanade, St Helier, JE4 9WG, JerseyJersey Registered Company Number: 126984, Australian Registered Body Number (ARBN): 630 385 278 Cautionary Statement Regarding Forward-Looking Statements This document contains certain statements that are "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified with words like "believe," "expect," "target," "project," "may," "could," "would," "approximately," "possible," "will," "should," "intend," "plan," "anticipate," "commit," "estimate," "potential," "ambitions," "outlook," or "continue," the negative of these words, other terms of similar meaning, or the use of future dates. Such statements are based on the current expectations of the management of Amcor and are qualified by the inherent risks and uncertainties surrounding future expectations generally. Actual results could differ materially from those currently anticipated due to a number of risks and uncertainties. None of Amcor or any of its respective directors, executive officers, or advisors provide any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Risks and uncertainties that could cause actual results to differ from expectations include, but are not limited to: changes in consumer demand patterns and customer requirements; the loss of key customers, a reduction in production requirements of key customers; significant competition in the industries and regions in which Amcor operates; failure by Amcor to expand its business; challenging current and future global economic conditions, including inflation and supply chain disruptions; impact of operating internationally, including negative impacts from the Russia-Ukraine conflict; price fluctuations or shortages in the availability of raw materials, energy, and other inputs; disruptions to production, supply, and commercial risks, which may be exacerbated in times of economic volatility; global health outbreaks, including COVID-19; an inability to attract and retain key personnel; costs and liabilities related to current and future environment, health, and safety laws and regulations; labor disputes; risks related to climate change; failures or disruptions in information technology systems; cybersecurity risks; a significant increase in indebtedness or a downgrade in the credit rating; foreign exchange rate risk; rising interest rates; a significant write-down of goodwill and/or other intangible assets; failure to maintain an effective system of internal control over financial reporting; inability of the Company's insurance policies to provide adequate protections; challenges to or the loss of intellectual property rights; litigation, including product liability claims; increasing scrutiny and changing expectations with respect to Amcor Environmental, Social and Governance policies resulting in increased costs; changing government regulations in environmental, health, and safety matters; changes in tax laws or changes in our geographic mix of earnings; and other risks and uncertainties identified from time to time in Amcor's filings with the U.S. Securities and Exchange Commission (the "SEC"), including without limitation, those described under Item 1A. "Risk Factors" of Amcor's annual report on Form 10-K for the fiscal year ended June 30, 2022 and any subsequent quarterly reports on Form 10-Q. You can obtain copies of Amcor's filings with the SEC for free at the SEC's website (www.sec.gov). Forward-looking statements included herein are made only as of the date hereof and Amcor does not undertake any obligation to update any forward-looking statements, or any other information in this communication, as a result of new information, future developments or otherwise, or to correct any inaccuracies or omissions in them which become apparent, except as expressly required by law. All forward-looking statements in this communication are qualified in their entirety by this cautionary statement. Presentation of non-GAAP information Included in this release are measures of financial performance that are not calculated in accordance with U.S. GAAP. These measures include adjusted EBITDA and EBITDA (calculated as earnings before interest and tax and depreciation and amortization), adjusted EBIT and EBIT (calculated as earnings before interest and tax), adjusted net income, adjusted earnings per share, adjusted free cash flow and net debt. In arriving at these non-GAAP measures, we exclude items that either have a non-recurring impact on the income statement or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not singled out, potentially cause investors to extrapolate future performance from an improper base. While not all inclusive, examples of these items include: material restructuring programs, including associated costs such as employee severance, pension and related benefits, impairment of property and equipment and other assets, accelerated depreciation, termination payments for contracts and leases, contractual obligations, and any other qualifying costs related to the restructuring plan; material sales and earnings from disposed or ceased operations and any associated profit or loss on sale of businesses or subsidiaries; impairments in goodwill and equity method investments; material acquisition compensation and transaction costs such as due diligence expenses, professional and legal fees, and integration costs; material purchase accounting adjustments for inventory; amortization of acquired intangible assets from business combination; significant property impairments, net of insurance recovery; payments or settlements related to legal claims; impacts from hyperinflation accounting; and impacts related to the Russia-Ukraine conflict. Amcor also evaluates performance on a comparable constant currency basis, which measures financial results assuming constant foreign currency exchange rates used for translation based on the average rates in effect for the comparable prior year period. In order to compute comparable constant currency results, we multiply or divide, as appropriate, current-year U.S. dollar results by the current year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. We then adjust for other items affecting comparability. While not all inclusive, examples of items affecting comparability include the difference between sales or earnings in the current period and the prior period related to acquired, disposed, or ceased operations. Comparable constant currency net sales performance also excludes the impact from passing through movements in raw material costs. Management has used and uses these measures internally for planning, forecasting and evaluating the performance of the Company's reporting segments and certain of the measures are used as a component of Amcor's Board of Directors' measurement of Amcor's performance for incentive compensation purposes. Amcor believes that these non-GAAP measures are useful to enable investors to perform comparisons of current and historical performance of the Company. For each of these non-GAAP financial measures, a reconciliation to the most directly comparable U.S. GAAP financial measure has been provided herein. These non-GAAP financial measures should not be construed as an alternative to results determined in accordance with U.S. GAAP. The Company provides guidance on a non-GAAP basis as we are unable to predict with reasonable certainty the ultimate outcome and timing of certain significant forward-looking items without unreasonable effort. These items include but are not limited to the impact of foreign exchange translation, restructuring program costs, asset impairments, possible gains and losses on the sale of assets, and certain tax related events. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP earnings and cash flow measures for the guidance period. Dividends Amcor has received a waiver from the ASX's settlement operating rules, which will allow the Company to defer processing conversions between its ordinary share and CDI registers from February 28, 2023 to March 1, 2023, inclusive. U.S. GAAP Condensed Consolidated Statements of Income (Unaudited) Three Months Ended December 31, Six Months Ended December 31, ($ million) 2021 2022 2021 2022 Net sales 3,507 3,642 6,927 7,354 Cost of sales (2,862) (2,980) (5,632) (6,024) Gross profit 645 662 1,295 1,330 Selling, general, and administrative expenses (303) (298) (616) (600) Research and development expenses (23) (24) (48) (49) Restructuring and other related activities, net (10) 213 (18) 212 Other income, net 13 6 5 8 Operating income 322 559 618 901 Interest expense, net (34) (68) (69) (118) Other non-operating income, net 2 3 7 3 Income before income taxes 290 494 556 786 Income tax expense (61) (33) (124) (91) Net income 229 461 432 695 Net income attributable to non-controlling interests (4) (2) (5) (4) Net income attributable to Amcor plc 225 459 427 691 USD:EUR average FX rate 0.8748 0.9799 0.8615 0.9870 Basic earnings per share attributable to Amcor 0.148 0.309 0.280 0.465 Diluted earnings per share attributable to Amcor 0.148 0.307 0.279 0.461 Weighted average number of shares outstanding – Basic 1,520 1,475 1,524 1,474 Weighted average number of shares outstanding – Diluted 1,524 1,485 1,528 1,486 U.S. GAAP Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended December 31, ($ million) 2021 2022 Net income 432 695 Depreciation, amortization and impairment 332 284 Net gain on disposal of businesses — (219) Changes in operating assets and liabilities (525) (696) Other non-cash items 84 81 Net cash provided by operating activities 323 145 Purchase of property, plant and equipment and other intangible assets (255) (250) Proceeds from sales of property, plant and equipment and other intangible assets 6 8 Business acquisitions and investments in affiliated companies, and other (11) (103) Proceeds from divestitures — 370 Net debt proceeds 471 406 Dividends paid (368) (365) Share buyback/cancellations (295) (40) Treasury shares purchases, net (41) (89) Other, including effect of exchange rates on cash and cash equivalents (54) (95) Net decrease in cash and cash equivalents (224) (13) Cash and cash equivalents at the beginning of the year (1) 850 850 Cash and cash equivalents at the end of the period 626 837 (1) Cash and cash equivalents at the beginning of the fiscal year 2023 include $75 million of cash and cash equivalents classified as held for sale U.S. GAAP Condensed Consolidated Balance Sheets (Unaudited) ($ million) June 30, 2022 December 31, 2022 Cash and cash equivalents 775 837 Trade receivables, net 1,935 1,972 Inventories, net 2,439 2,509 Property, plant, and equipment, net 3,646 3,687 Goodwill and other intangible assets, net 6,942 6,858 Assets held for sale, net 192 — Other assets 1,497 1,612 Total assets 17,426 17,475 Trade payables 3,073 2,785 Short-term debt and current portion of long-term debt 150 62 Long-term debt, less current portion 6,340 6,840 Liabilities held for sale 65 — Accruals and other liabilities 3,657 3,377 Shareholders' equity 4,141 4,411 Total liabilities and shareholders' equity 17,426 17,475 Components of Fiscal 2023 Net Sales growth Three Months Ended December 31, 2022 Six Months Ended December 31, 2022 ($ million) Flexibles RigidPackaging Total Flexibles RigidPackaging Total Net sales fiscal year 2023 2,812 830 3,642 5,591 1,763 7,354 Net sales fiscal year 2022 2,713 794 3,507 5,347 1,580 6,927 Reported Growth % 4 4 4 5 12 6 FX % (6) (1) (5) (7) (1) (5) Constant Currency Growth % 10 5 9 12 12 12 RM Pass Through % 7 10 8 9 13 10 Items affecting comparability — — — — — — Comparable Constant Currency Growth % 3 (5) 1 3 (1) 2 Volume % (1) (5) (2) (1) (2) (1) Price/ Mix % 4 — 3 4 1 3 Reconciliation of Non-GAAP Measures Reconciliation of adjusted Earnings before interest, tax, depreciation, and amortization (EBITDA), Earnings before interest and tax (EBIT), Net income, and Earnings per share (EPS) Three Months Ended December 31, 2021 Three Months Ended December 31, 2022 ($ million) EBITDA EBIT Net Income EPS(Diluted US cents) EBITDA EBIT NetIncome EPS(DilutedUScents) Net income attributable to Amcor 225 225 225 14.8 459 459 459 30.7 Net income attributable to non-controllinginterests 4 4 2 2 Tax expense 61 61 33 33 Interest expense, net 34 34 68 68 Depreciation and amortization 143 141 EBITDA, EBIT, Net income and EPS 467 324 225 14.8 703 562 459 30.7 Material restructuring programs 10 10 10 0.6 — — — — Net loss on disposals 9 9 9 0.6 — — — — Impact of hyperinflation 2 2 2 0.1 5 5 5 0.3 Property and other losses, net (1) (1) (1) — — — — — Pension settlements 3 3 3 0.2 — — — — Russia-Ukraine conflict impacts — — — — (207) (207) (207) (13.8) Other — — — — (1) (1) (1) — Amortization of acquired intangibles 41 41 2.6 40 40 2.6 Tax effect of above items (12) (0.8) (19) (1.3) Adjusted EBITDA, EBIT, Net income andEPS 490 388 277 18.1 500 399 277 18.5 Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBITDA, EBIT, Net income, and EPS 2 3 — 2 % items affecting comparability 1 1 1 1 % currency impact 4 3 4 4 % comparable constant currency growth 7 7 5 7 Six Months Ended December 31, 2021 Six Months Ended December 31, 2022 ($ million) EBITDA EBIT Net Income EPS(Diluted UScents)(1) EBITDA EBIT NetIncome EPS (DilutedUS cents)(1) Net income attributable to Amcor 427 427 427 27.9 691 691 691 46.1 Net income attributable to non-controllinginterests 5 5 4 4 Tax expense 124 124 91 91 Interest expense, net 69 69 118 118 Depreciation and amortization 289 283 EBITDA, EBIT, Net income, and EPS 914 625 427 27.9 1,187 904 691 46.1 Material restructuring programs 17 17 17 1.1 — — — — Net loss on disposals (2) 9 9 9 0.6 — — — — Impact of hyperinflation 4 4 4 0.3 13 13 13 0.9 Property and other losses, net(3) 27 27 27 1.8 — — — — Pension settlements 3 3 3 0.2 — — — — Russia-Ukraine conflict impacts(4) — — — — (204) (204) (204) (13.6) Other 2 2 2 0.1 (2) (2) (2) (0.1) Amortization of acquired intangibles 82 82 5.3 80 80 5.3 Tax effect of above items (23) (1.5) (30) (2.0) Adjusted EBITDA, EBIT, Net income and EPS 976 769 548 35.8 994 791 548 36.6 Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBITDA, EBIT, Net income, and EPS 2 3 — 2 % items affecting comparability(5) 1 1 1 1 % currency impact 4 4 5 5 % comparable constant currency growth 7 8 6 8 (1) Calculation of diluted EPS for the three and six months ended December 31, 2022 excludes net income attributable to shares to be repurchasedunder forward contracts of $3 million and $6 million respectively and $1 million for the three and six months ended December 31, 2021. (2) Net loss on disposals for the six months ended December 31, 2021 includes an expense of $9 million, triggered by a commitment to sell non-core assets. (3) Property and other losses, net includes property and related business losses primarily associated with the destruction of the Company's Durban,South Africa, facility during general civil unrest in July 2021, net of insurance recovery. (4) Includes the net gain on disposal of the Russian business and incremental restructuring and other costs associated with the Russia-Ukraineconflict. (5) Reflects the impact of acquired, disposed and ceased operations. Reconciliation of adjusted EBIT by reporting segment Three Months Ended December 31, 2021 Three Months Ended December 31, 2022 ($ million) Flexibles Rigid Packaging Other Total Flexibles Rigid Packaging Other Total Net income attributable to Amcor 225 459 Net income attributable to non-controlling interests 4 2 Tax expense 61 33 Interest expense, net 34 68 EBIT 295 49 (20) 324 516 50 (4) 562 Material restructuring programs 10 — — 10 — — — — Net loss on disposals 9 — — 9 — — — — Impact of hyperinflation — 2 — 2 — 5 — 5 Property and other gains, net (1) — — (1) — — — — Pension settlements — 2 1 3 — — — — Russia-Ukraine conflict impacts — — — — (207) — — (207) Other — — — — 6 — (7) (1) Amortization of acquired intangibles 39 2 — 41 38 2 — 40 Adjusted EBIT 352 55 (19) 388 353 57 (11) 399 Adjusted EBIT / sales % 13.0 % 6.9 % 11.1 % 12.5 % 6.9 % 11.0 % Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBIT — 5 3 % items affecting comparability 1 — 1 % currency impact 4 1 3 % comparable constant currency 5 6 7 Six Months Ended December 31, 2021 Six Months Ended December 31, 2022 ($ million) Flexibles RigidPackaging Other Total Flexibles RigidPackaging Other Total Net income attributable to Amcor 427 691 Net income attributable to non-controlling interests 5 4 Tax expense 124 91 Interest expense, net 69 118 EBIT 559 108 (42) 625 827 107 (30) 904 Material restructuring programs 17 — — 17 — — — — Net loss on disposals(1) 9 — — 9 — — — — Impact of hyperinflation — 4 4 — 13 — 13 Property and other losses, net(2) 27 — — 27 — — — — Pension settlements 2 1 3 — — — — Russia-Ukraine conflict impacts(3) — — — — (204) — — (204) Other — — 2 2 6 — (8) (2) Amortization of acquired intangibles 79 3 — 82 77 3 — 80 Adjusted EBIT 691 117 (39) 769 706 123 (38) 791 Adjusted EBIT / sales % 12.9 % 7.4 % 11.1 % 12.6 % 7.0 % 10.8 % Reconciliation of adjusted growth to comparable constant currency growth % growth - Adjusted EBIT 2 5 3 % items affecting comparability(4) 1 — 1 % currency impact 5 2 4 % comparable constant currency 8 7 8 (1) Net loss on disposals for the six months ended December 31, 2021 includes an expense of $9 million, triggered by a commitment to sell non-core assets. (2) Property and other losses, net includes property and related business losses primarily associated with the destruction of the Company's Durban, South Africa, facility during general civil unrest in July 2021, net of insurance recovery. (3) Includes the net gain on disposal of the Russian business and incremental restructuring and other costs associated with the Russia-Ukraine conflict. (4) Reflects the impact of acquired, disposed and ceased operations. Reconciliations of Adjusted Free Cash Flow Six Months Ended December 31, ($ million) 2021 2022 Net cash provided by operating activities 323 145 Purchase of property, plant, and equipment, and other intangible assets (255) (250) Proceeds from sales of property, plant, and equipment, and other intangible assets 6 8 Russia-Ukraine conflict impacts, material transaction and integration related costs 31 36 Adjusted Free Cash Flow(1) 105 (61) (1) Adjusted Free Cash Flow excludes Russia-Ukraine conflict impacts, material transaction and integration related cash costs because these cashflows are not considered to be directly related to ongoing operations. Six Months Ended December 31, ($ million) 2021 2022 Adjusted EBITDA 976 994 Interest paid, net (47) (112) Income tax paid (110) (91) Purchase of property, plant, and equipment and other intangible assets (255) (250) Proceeds from sales of property, plant, and equipment and other intangible assets 6 8 Movement in working capital (440) (610) Other (25) — Adjusted Free Cash Flow(1) 105 (61) (1) Adjusted Free Cash Flow excludes Russia-Ukraine conflict impacts, material transaction and integration related cash costs because these cashflows are not considered to be directly related to ongoing operations. Reconciliation of net debt ($ million) June 30, 2022 December 31, 2022 Cash and cash equivalents (775) (837) Short-term debt 136 48 Current portion of long-term debt 14 14 Long-term debt, less current portion 6,340 6,840 Net debt 5,715 6,065
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