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2022 年第二季度報告和調整後每股收益*均為 2.12 美元，而 2021 年第二季度報告和調整後每股收益分別為 2.62 美元和 2.05 美元 2022 年迄今報告和調整後的 EPS 分別為 4.04 美元和 4.06 美元，而去年同期分別為 (1.01) 美元和 3.90 美元 公司預計 2022 年全年調整後每股盈利將在 6.90 美元至 7.45 美元之間 伊利諾伊州威斯特徹斯特郡, Aug. 11, 2022 (GLOBE NEWSWIRE) -- 全球領先的食品及飲品製造業成分解決方案供應商 Ingredion Incorporated (NYSE: INGR) 今天宣佈 2022 年第二季度的業績。該結果根據 2022 年及 2021 年美國公認會計原則 (「GAAP」) 報告，包括從公司提供的非公認會計原則 (non-GAAP) 財務指標中排除的項目。 Ingredion 總裁兼行政總裁 Jim Zallie 表示「我們的團隊實現了自 2017 年以來最強勁的季度。16% 的淨銷售額增長反映了強勁的客戶需求，這推動了可比較的銷量增長，這與積極的價格組合管理一起，使我們能夠完全抵消較高的投入成本。因此，我們調整後的營運收入比去年的強勁表現有所上升，並且高於我們的預期。」 Zallie 續稱：「在穩健執行我們的推動增長路線圖下，特種原料繼續保持增長勢頭。值得注意的是，在我們所有四個地區，穩健增長的兩位數淨銷售額超過我們四年的專業增長前景。為了回應對清潔標籤調質澱粉的持續強勁需求，我們加快印第安納波利斯工廠新產能的投產。此外，我們的減糖和特種甜味劑平台又迎來一個出色的季度，淨銷售額增長了 20% 以上，這得益於 PureCircle 甜葉菊專營權的兩位數收入增長。 也有助第二季度的業績，核心成分實現了中雙位數淨銷售額增長。我們的銷量增長源於啤酒和糖果等類別的強勁客戶需求。此外，增強的合約條款使我們能夠更快解決最大市場中不斷變化的投入成本。隨著我們繼續將重點轉至這些地區快速增長的類別，南美和墨西哥引領了更高的淨銷售額增長。」 Zallie 總結道：「整體而言，我為我們的全球團隊如何在這種通脹環境中持續表現感到非常自豪。雖然業務環境仍然充滿挑戰，但我們在今年上半年取得的積極成果使我們能夠好好實現下半年的強勁表現，因我們將繼續執行四個策略增長支柱。」 *調整後攤薄每股收益（「調整後每股收益」）、調整後營運收入、調整後有效所得稅率及已發行調整後稀釋後加權平均普通股均為非公認會計原則財務指標。本新聞稿中包含的簡明綜合財務報表後，在參閱名為「非公認會計準則資訊」的補充財務資訊第二部分，以將這些非 GAAP 財務指標與最直接可比的 GAAP 指標進行對賬。 每股攤薄收益 (EPS) 2Q21 2Q22 YTD21 YTD22 Reported EPS $2.62 $2.12 $(1.01) $4.04 Impairment/Restructuring costs 0.03 0.01 0.15 0.03 Acquisition/Integration costs 0.02 - 0.02 0.01 Impairment*** - - 5.35 - Tax items and other matters (0.62) (0.01) (0.58) (0.02) Diluted share impact - - (0.03) - Adjusted EPS** $2.05 $2.12 $3.90 $4.06 影響報告及調整後 EPS 變化的估計因素 2Q22 YTD22 Total items affecting EPS** 0.07 0.16 Total operating items 0.07 0.22 Margin 0.24 0.44 Volume (0.11) (0.13) Foreign exchange (0.07) (0.11) Other income 0.01 0.02 Total non-operating items 0.00 (0.06) Other non-operating income (0.01) (0.01) Financing costs 0.02 (0.03) Shares outstanding 0.02 - Non-controlling interests - 0.01 Tax rate (0.03) (0.03) **由於四捨五入的原因，總數可能不足*** 與阿根廷合資企業公告相關，報告的業績反映出銷售減損費用為 3.6 億美元，其中包括 3.11 億美元的累計轉換損失。 財政摘要 截至 2022 年 6 月 30 日，債務及現金包括短期投資總額分別為 24 億美元及 3.22 億美元，與 2021 年 12 月 31 日相比分別為 20 億美元及 3.32 億美元。 第二季度的淨融資成本為 1,700 萬美元，而去年同期為 1,900 萬美元。 第二季度報告及調整後的有效稅率分別為 11.7% 及 25.7%，與去年同期相比分別為 26.0% 及 26.8%。報告稅率的增加主要是由於 2021 年第二季度外國子公司未匯入收益應計金額的逆轉。 年初至今的淨資本支出為 1.37 億美元，比去年同期上升了 3,500 萬美元。 業務評述 總計 Ingredion 淨銷售額 $ in millions 2021 FX Impact Volume Price/mix 2022 Change Change excl. FX Second Quarter 1,762 (41) (5) 328 2,044 16% 18% Year-to-Date 3,376 (66) 14 612 3,936 17% 19% 報告營運收入 $ in millions 2021 FX Impact Business Drivers Acquisition / Integration Restructuring / Impairment Other 2022 Change Change excl. FX Second Quarter 222 (7) 14 (3) 2 (15) 213 -4% -1% Year-to-Date 52 (11) 30 (3) 10 345 423 713% 735% 調整後的營運收入 $ in millions 2021 FX Impact Business Drivers 2022 Change Change excl. FX Second Quarter 208 (7) 14 215 3% 7% Year-to-Date 409 (11) 30 428 5% 7% 淨銷售額 第二季度及年初至今的淨銷售額與去年同期相比有所上升。增長的原因是強勁的價格組合，包括更高的玉米和投入成本。除匯率影響後，本季與年初至今的淨銷售額分別上升了 18% 及 19%。 營運收入 第二季度報告及調整後營運收入分別為 2.13 億美元及 2.15 億美元，與去年同期相比分別下降 4% 和上升了 3%。報告的營運收入減少是因上年有關巴西間接稅的有利法院判決。調整後營運收入的增加是由於強勁的價格組合足以抵消上漲的玉米和投入成本。排除匯率影響後，報告及調整後的營運收入分別比去年同期下降了 1% 和上升了 7%。 年初至今報告和調整後的營運收入分別為 4.23 億美元和 4.28 億美元，與去年同期相比分別上升了 713％ 和 5％。報告營運收入上升主要由於上年與阿根廷合資企業相關的持有銷售減損費用。調整後營運收入的增加是由於強勁的價格組合足以抵消上漲的玉米和投入成本。排除匯率影響後，報告及調整後的營運收入分別比去年同期上升了 735% 和 7%。 主要由於重組成本，第二季度及年初至今報告的營運收入比調整後的營運收入分別低 200 萬美元和 500 萬美元。 北美洲 淨銷售額 $ in millions 2021 FX Impact Volume Price mix 2022 Change Change excl. FX Second Quarter 1,068 (4) 11 209 1,284 20% 21% Year-to-Date 2,013 (4) 52 397 2,458 22% 22% 部門營運收入 $ in millions 2021 FX Impact Business Drivers 2022 Change Change excl. FX Second Quarter 149 (1) 13 161 8% 9% Year-to-Date 283 (1) 35 317 12% 12% 第二季度的營運收入為 1.61 億美元，比去年同期增加 1,200 萬美元，而年初至今的營業收入為 3.17 億美元，比去年同期增加 3,400 萬美元。本季度和年初至今，增長均由有利的價格組合和更高的產量所推動，這足以抵消更高的玉米和投入成本。 南美洲 淨銷售額 $ in millions 2021 FX Impact Volume Excluding Argentina JV Volume Price mix 2022 Change Change excl. FX Second Quarter 268 7 30 (62) 47 290 8% 6% Year-to-Date 541 7 23 (128) 99 542 0% -1% 部門營運收入 $ in millions 2021 FX Impact Business Drivers 2022 Change Change excl. FX Second Quarter 33 1 5 39 18% 15% Year-to-Date 73 2 2 77 5% 3% 第二季度的營業收入為 3,900 萬美元，比去年同期增加 600 萬美元，而年初至今的營業收入為 7,700 萬美元，比去年同期增加 400 萬美元。本季度和年初至今，增長均由有利的價格組合所推動，這足以抵消上漲的玉米和投入成本。排除匯率影響後，第二季度和年初至今的部門營運收入分別增加了 15% 和 3%。 亞太區 淨銷售額 $ in millions 2021 FX Impact Volume Price mix 2022 Change Change excl. FX Second Quarter 248 (19) 9 37 275 11% 19% Year-to-Date 483 (31) 42 53 547 13% 20% 部門營運收入 $ in millions 2021 FX Impact Business Drivers 2022 Change Change excl. FX Second Quarter 24 (2) (1) 21 -13% -4% Year-to-Date 49 (4) (2) 43 -12% -4% 第二季度的營運收入為 2,100 萬美元，比去年同期減少了 300 萬美元，而年初至今的營業收入為 4,300 萬美元，比去年同期減少了 600 萬美元。第二季度和年初至今，下降的原因是韓國玉米和投入成本上升、中國因 2019 冠狀病毒病受中斷以及外匯逆風。排除匯率影響後，本季度和年初至今的界別營運收入下降了 4%。 歐洲、中東及非洲 (EMEA) 淨銷售 $ in millions 2021 FX Impact Volume Price mix 2022 Change Change excl. FX Second Quarter 178 (25) 7 35 195 10% 24% Year-to-Date 339 (38) 25 63 389 15% 26% 部門營運收入 $ in millions 2021 FX Impact Business Drivers 2022 Change Change excl. FX Second Quarter 32 (5) 2 29 -9% 6% Year-to-Date 63 (8) 5 60 -5% 8% 第二季度的營運收入為 2,900 萬美元，比去年同期下隆了 300 萬美元，而年初至今的營運收入為 6,000 萬美元，比去年同期減少了 300 萬美元。第二季度和年初至今，歐洲的有利因素被巴基斯坦不利的業績和整個地區的匯率逆風所抵消。排除匯率影響，第二季度和年初至今的部門營運收入分別增加了 6% 和 8%。 股息和股份回購 2022 年上半年，公司已支付 9,000 萬美元總股息，第二季度宣佈第三季度支付每股 0.65 美元的季度股息。本季度，公司回購了 4,400 萬美元的普通股流通股，使 Ingredion 在 2022 年上半年的股票回購總額達到 8,300 萬美元。Ingredion 認為透過現金股息及股票回購為股東帶來價值回報是其資本分配策略的一部分，以支撐股東的總回報。 2022 年全年展望 2022 年第三季度，與 2021 年第三季度相比，公司預計淨銷售額增長將達到高雙位數，營運收入增長將達到高個位數。 公司預計 2022 年全年報告的每股收益將在 6.95 美元至 7.35 美元之間，調整後的每股收益將在 6.90 美元至 7.45 美元之間，而 2021 年的調整後每股收益為 6.67 美元。該預期不包括與收購相關的、整合及調整成本，以及任何潛在的減值成本。 與去年相比，2022 年全年展望假設如下：受有利的價格組合推動，北美營運收入預計將上升到中雙位數，而不是抵消較高的玉米和投入成本；在有利的價格組合推動下，南美營運收入預計將保持兩位數的低位增長；由於與烏克蘭衝突而令相關的韓國玉米成本上漲，以及中國因 2019 冠狀病毒病封城的影響，預計亞太區的營運收入將與去年持平，抵消了 PureCircle 的增長；由於投入成本增加和負面匯率影響，預計歐洲、中東和非洲地區的營運收入將持平至低個位數。預計企業成本將上升中個位數。 公司預計 2022 年全年調整後營運收入將達到低雙位數。 對於 2022 全年，公司預計報告的有效稅率為 27.0% 至 29.5%，調整後的有效稅率為 28.0% 至 29.0%。 現在預計 2022 年全年的運營現金將介乎 3 億美元至 3.6 億美元之間，反映了由於玉米成本上漲導致我們的營運資金餘額預計增加。全年的資本支出預計在 2.9 億美元至 3.2 億美元之間。 電話會議及網絡直播詳情 Ingredion 於 2022 年 8 月 9 日（星期二）上午 8 時 （中部時間）／上午 9 時（東部時間）由主席兼行政總裁 Jim Zallie 及執行副主席兼財務總監 Jim Gray 主持。電話會議將實時進行網絡直播，並可在 https://ir.ingredionincorporated.com/events-and-presentations 存取。隨附的報告可在電話會議開始前幾個小時透過公司網站登入。網絡廣播的重播將在有限的時間內在網站 https://ir.ingredionincorporated.com/financial-information/quarterly-results 提供。 關於公司 Ingredion Incorporated (NYSE: INGR)，它是全球領先的原料解決方案供應商，為 120 多個國家的客戶提供服務。該公司 2021 年的淨銷售額為 69 億美元，將穀物、水果、蔬菜及其他植物性原料轉變為食品、飲品、動物營養、釀造及工業市場的增值原料成分解決方案。而 Ingredion 的 Idea Labs® 創新中心遍布全球及有約 12,000 名員工，將與客戶共同創造並實現了將人、自然及技術的潛力融合在一起以改善生活為目標。瀏覽 ingredion.com 以了解更多資訊及公司的最新消息。 前瞻性聲明 本新聞稿可能包含《1933 年證券法》（修訂版）第 27A 節及《1934 年證券交易法》（修訂版）第 21E 節所規定的前瞻性聲明。本公司擬將這些前瞻性聲明納入此類聲明的安全港原則。 前瞻性陳述包括，除其他外，關於公司對 2022 年第三季度淨銷售額和營運收入的預期、對 2022 年全年調整後營運收入、報告和調整後每股收益、分部營運收入、報告和調整後有效稅收的預期的任何陳述稅率、營運現金流和資本支出，以及關於公司前景及其未來營運、財務狀況、淨銷售額、營運收入、銷量、公司成本、稅率、資本開支、現金流、費用或其他財務項目的任何其他聲明，包括管理層的計劃或策略及目標，以及任何基於上述各項的假設、預期或信念。 這些聲明有時可透過使用前瞻性詞語來識別，例如「可」、「將」、「應」、「預計」、「假設」、「相信」、「計劃」、「預料」、「估計」、「期望」、「意圖」、「繼續」、「備考」、「預測」、「展望」、「前景」、「機會」、「潛在」、「臨時」、或其他類似的表達方式或其反面用法。除本新聞稿中的歷史事實陳述或本新聞稿中提及的所有陳述均為「前瞻性陳述」。 這些聲明基於當前的情況或期望，但受某些固有風險及，不確定因素的影響，其中許多風險及，不確定因素很難預測並且超出我們的控制範圍。儘管我們相信我們在這些前瞻性陳述中明示或暗示的預期是基於合理假設的，但我們提醒投資者，我們不能保證預期將會是正確的。 由於各種風險和不確定性因素，實際結果及發展可能與這些聲明表達或暗示的預期存在重大差異，其中包括：2019 冠狀病毒病對我們產品需求和財務結果的影響；消費偏好及觀念的變化，包括與高果糖粟米糖漿和我們生產的其他產品有關的偏好；全球經濟狀況以及影響我們購買原材料或製造或出售產品的各個地理區域和國家／地區的客戶及消費者的總體政治、經濟、商業及市場條件的影響，尤其是南美的經濟、貨幣及政治狀況以及歐洲的經濟及政治狀況，以及這些因素可能對我們的銷售量、產品定價，以及我們從客戶收取應收款的能力產生影響；我們服務並從中獲得很大部分營業額，包括但不限於食品、飲品、動物營養廠及釀造行業的主要行業未來購買我們的產品；接受透過基因改造和生物技術開發產品的不確定性；我們以足以獲得市場認可的價格或質量開發或獲取新產品和服務的能力；玉米提煉行業及相關行業的競爭和／或客戶壓力增加，包括在我們的主要產品和副產品（尤其是粟米油）的市場和價格方面；原材料的可用性，包括馬鈴薯澱粉、木薯澱粉、阿拉伯樹膠及我們某些建基於特定粟米品種的產品，以及我們將粟米或其他原材料的潛在成本增加轉嫁給客戶的能力；能源成本及可用性，包括巴基斯坦的能源問題；我們控制成本、實現預算和實現預期協同效應的能力，包括我們按時、按預算完成計劃維護和投資項目的能力以及貨運和運輸成本；氣候變化的影響以及應對氣候變化的法律、監管和市場措施；我們以優惠條件成功確定並完成收購或策略聯盟的能力，以及我們成功整合所收購業務或實施和維持策略聯盟並在上述所有方面實現預期協同作用的能力；我們製造工廠的運作困難；金融和資本市場的行為，包括由於外幣波動、利率和匯率波動及市場變化，以及對沖此類波動的相關風險；俄羅斯和烏克蘭之間衝突的影響，包括對原材料和能源供應的供應和價格以及匯率和利率波動的影響；我們吸引、發展、激勵並與我們的員工保持良好關係的能力；自然災害、戰爭、威脅或恐怖主義行為、像 2019 冠狀病毒病等疫情的爆發或延續，或其他我們無法控制的重大事件的發生對我們業務的影響；減值準備對我們的商譽或長期資產的影響；政府政策、法律或法規的變化以及法律合規成本，包括遵守環境法規改變我們的稅率或承擔額外所得稅責任；利率上升可能導致我們的借貸成本增加；我們以合理利率籌集資金的能力及其他影響我們獲得足夠資金用於未來增長和擴展業務的因素；有關資訊技術系統、程序和網站的安全漏洞；股票市場的動盪以及其他可能對我們的股價產生不利影響的因素；影響我們繼續執行股息政策的風險；以及我們維持財務報告有效內部控制的能力。 我們的前瞻性聲明僅代表截止日期，我們沒有義務更新任何前瞻性聲明，以反映新聲明或未來事件後聲明日期後的事件或情況或發展。如果我們更新或更正其中的一個或多個聲明，投資者及，其他人不應該斷定我們將進行額外的更新或更正。有關這些風險和其他風險的進一步說明，請參閱我們截至 2021 年 12 月 31 日的 10-K 表格年度報告、我們截至 2022 年 3 月 31 日的季度的 10-Q 表格季度報告中的「風險因素」和其他資訊以及我們隨後向美國美國證券交易委員會提交的 10-Q 及 8-K 表格報告。 聯絡人： 投資者：Jason Payant | 電話：708-551-2584 傳媒：Becca Hary | 電話：708-551-2602 Ingredion Incorporated Condensed Consolidated Statements of Income (Loss) (Unaudited) (in millions, except per share amounts) Three Months Ended June 30, Change % Six Months Ended June 30, Change % 2022 2021 2022 2021 Net sales $ 2,044 $ 1,762 16 % $ 3,936 $ 3,376 17 % Cost of sales 1,654 1,395 3,167 2,658 Gross profit 390 367 6 % 769 718 7 % Operating expenses 179 167 7 % 348 320 9 % Other operating (income) (4 ) (26 ) (6 ) (28 ) Restructuring/impairment charges 2 4 4 374 Operating income 213 222 (4 %) 423 52 713 % Financing costs 17 19 41 38 Other non-operating (income) - (2 ) (1 ) (3 ) Income before income taxes 196 205 (4 %) 383 17 2153 % Provision for income taxes 51 24 105 79 Net income (loss) 145 181 (20 %) 278 (62 ) 548 % Less: Net income attributable to non-controlling interests 3 3 6 6 Net income (loss) attributable to Ingredion $ 142 $ 178 (20 %) $ 272 $ (68 ) 500 % Earnings per common share attributable to Ingredion common shareholders: Weighted average common shares outstanding: Basic 66.4 67.2 66.6 67.3 Diluted 67.1 67.9 67.3 67.3 Earnings (loss) per common share of Ingredion: Basic $2.14 $2.65 (19 %) $4.08 ($1.01 ) 504 % Diluted $2.12 $2.62 (19 %) $4.04 ($1.01 ) 500 % Ingredion Incorporated Condensed Consolidated Balance Sheets (in millions, except share and per share amounts) June 30, 2022 December 31, 2021 (Unaudited) Assets Current assets Cash and cash equivalents $ 318 $ 328 Short-term investments 4 4 Accounts receivable – net 1,396 1,130 Inventories 1,403 1,172 Prepaid expenses 56 63 Total current assets 3,177 2,697 Property, plant and equipment – net 2,375 2,423 Intangible assets – net 1,313 1,348 Other assets 524 531 Total assets $ 7,389 $ 6,999 Liabilities and equity Current liabilities Short-term borrowings $ 652 $ 308 Accounts payable and accrued liabilities 1,193 1,204 Total current liabilities 1,845 1,512 Long-term debt 1,739 1,738 Other non-current liabilities 537 524 Total liabilities 4,121 3,774 Share-based payments subject to redemption 37 36 Redeemable non-controlling interests 70 71 Equity Ingredion stockholders' equity: Preferred stock – authorized 25,000,000 shares – $0.01 par value, none issued - - Common stock – authorized 200,000,000 shares – $0.01 par value, 77,810,875 shares issued at June 30, 2022 and December 31, 2021 1 1 Additional paid-in capital 1,133 1,158 Less: Treasury stock (common stock; 11,972,479 and 11,154,203 shares at June 30, 2022 and December 31, 2021, respectively) at cost (1,133 ) (1,061 ) Accumulated other comprehensive loss (940 ) (897 ) Retained earnings 4,085 3,899 Total Ingredion stockholders' equity 3,146 3,100 Non-redeemable non-controlling interests 15 18 Total equity 3,161 3,118 Total liabilities and equity $ 7,389 $ 6,999 Ingredion Incorporated Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (in millions) 2022 2021 Cash (used for) provided by operating activities: Net income (loss) $ 278 $ (62 ) Adjustments to reconcile net income (loss) to net cash (used for) provided by operating activities: Depreciation and amortization 107 103 Mechanical stores expense 27 27 Deferred income taxes (2 ) (21 ) Impairment charge for assets held for sale - 360 Margin accounts (5 ) (20 ) Changes in other trade working capital (454 ) (221 ) Other 45 (37 ) Cash (used for) provided by operating activities (4 ) 129 Cash used for investing activities: Capital expenditures and mechanical stores purchases (144 ) (117 ) Proceeds from disposal of manufacturing facilities and properties 7 15 Payments for acquisitions, net of cash acquired - (40 ) Other 1 (15 ) Cash used for investing activities (136 ) (157 ) Cash provided by (used for) financing activities: Proceeds from borrowings, net 38 14 Commercial paper borrowings, net 308 - Repurchases of common stock, net (83 ) (24 ) Purchases of non-controlling interests (27 ) - (Settlements) issuances of common stock for share-based compensation, net (1 ) 9 Dividends paid, including to non-controlling interests (90 ) (93 ) Cash provided by (used for) financing activities 145 (94 ) Effect of foreign exchange rate changes on cash (15 ) (1 ) Decrease in cash and cash equivalents (10 ) (123 ) Cash and cash equivalents, beginning of period 328 665 Cash and cash equivalents, end of period $ 318 $ 542 Ingredion Incorporated Supplemental Financial Information (Unaudited) I. Geographic Information of Net Sales and Operating Income (in millions, except for percentages) Three Months Ended June 30, Change Six Months Ended June 30, Change 2022 2021 Change Excl. FX 2022 2021 Change Excl. FX Net Sales North America $ 1,284 $ 1,068 20 % 21 % $ 2,458 $ 2,013 22 % 22 % South America 290 268 8 % 6 % 542 541 0 % (1 %) Asia-Pacific 275 248 11 % 19 % 547 483 13 % 20 % EMEA 195 178 10 % 24 % 389 339 15 % 26 % Total Net Sales $ 2,044 $ 1,762 16 % 18 % $ 3,936 $ 3,376 17 % 19 % Operating Income North America $ 161 $ 149 8 % 9 % $ 317 $ 283 12 % 12 % South America 39 33 18 % 15 % 77 73 5 % 3 % Asia-Pacific 21 24 (13 %) (4 %) 43 49 (12 %) (4 %) EMEA 29 32 (9 %) 6 % 60 63 (5 %) 8 % Corporate (35 ) (30 ) (17 %) (17 %) (69 ) (59 ) (17 %) (17 %) Sub-total 215 208 3 % 7 % 428 409 5 % 7 % Acquisition/integration costs - 3 (1 ) 2 Restructuring/impairment charges (2 ) (4 ) (4 ) (14 ) Impairment charge for assets held for sale - - - (360 ) Other matters - 15 - 15 Total Operating Income $ 213 $ 222 (4 %) (1 %) $ 423 $ 52 713 % 735 % II. Non-GAAP Information To supplement the consolidated financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), we use non-GAAP historical financial measures, which exclude certain GAAP items such as acquisition and integration costs, restructuring and impairment costs, Mexico tax (benefit), and other specified items. We generally use the term “adjusted” when referring to these non-GAAP amounts. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of our operating results and trends for the periods presented. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures are not prepared in accordance with GAAP; so our non-GAAP information is not necessarily comparable to similarly titled measures presented by other companies. A reconciliation of each non-GAAP financial measure to the most comparable GAAP measure is provided in the tables below. Ingredion Incorporated Reconciliation of GAAP Net Income (Loss) attributable to Ingredion and Diluted Earnings Per Share ("EPS") to Non-GAAP Adjusted Net Income attributable to Ingredion and Adjusted Diluted EPS (Unaudited) Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 (in millions) Diluted EPS (in millions) Diluted EPS (in millions) Diluted EPS (in millions) Diluted EPS Net income (loss) attributable to Ingredion $ 142 $ 2.12 $ 178 $ 2.62 $ 272 $ 4.04 $ (68 ) $ (1.01 ) Add back: Acquisition/integration costs, net of an insignificant amount of income taxes for the three and six months ended June 30, 2022 and net of income tax expense of $4 million for the three and six months ended June 30, 2021 (i) - - 1 0.02 1 0.01 2 0.02 Restructuring/impairment charges, net of income tax benefit of $1 million for the three and six months ended June 30, 2022, and net of income tax benefit of $2 million and $4 million for the three and six months ended June 30, 2021, respectively (ii) 1 0.01 2 0.03 3 0.03 10 0.15 Impairment on assets held for sale, net of $ - million of income tax benefit for the six months ended June 30, 2021 (iii) - - - - - - 360 5.35 Other matters, net of income tax expense of $5 million for the three and six months ended June 30, 2021 (iv) - - (10 ) (0.15 ) - - (10 ) (0.15 ) Tax (benefit) - Mexico (v) - - (4 ) (0.06 ) (1 ) (0.01 ) (1 ) (0.01 ) Other tax matters (vi) (1 ) (0.01 ) (28 ) (0.41 ) (1 ) (0.01 ) (28 ) (0.42 ) Diluted share impact (vii) - - - - - - - (0.03 ) Non-GAAP adjusted net income attributable to Ingredion $ 142 $ 2.12 $ 139 $ 2.05 $ 274 $ 4.06 $ 265 $ 3.90 Net income, EPS and tax rates may not foot or recalculate due to rounding. Notes (i) During the six months ended June 30, 2022, we recorded $1 million of pre-tax acquisition and integration charges related to our acquisition and integration of KaTech, as well as our investment in the Argentina joint venture. During the three and six months ended June 30, 2021, we recorded a net pre-tax acquisition and integration gain of $3 million and $2 million, respectively, for our acquisition of PureCircle Limited, as well as our investment in the Argentina joint venture. (ii) During the three and six months ended June 30, 2022, we recorded $2 million and $4 million, respectively, of remaining pre-tax restructuring-related charges for the Cost Smart program. During the three and six months ended June 30, 2021, we recorded pre-tax restructuring-related charges of $4 million and $14 million, respectively, for our Cost Smart programs. These charges are net of a $5 million gain on the sale of Stockton, California land and building that occurred during the second quarter of 2021. (iii) During the first quarter of 2021, we recorded a $360 million held for sale impairment charge related to entering the Argentina joint venture. The impairment charge primarily reflected a $49 million write-down of contributed net assets to the agreed upon fair value and a $311 million valuation allowance for the cumulative foreign translation losses related to the net assets to be contributed. (iv) During the second quarter of 2021, we recorded a pre-tax benefit of $15 million to reflect a ruling the Brazilian Supreme Court issued in May 2021 that affirmed that we were entitled to certain indirect taxes. (v) We recorded a tax benefit of $1 million for the six months ended June 30, 2022, and tax benefits of $4 million and $1 million for the three and six months ended June 30, 2021, respectively, as a result of the movement of the Mexican peso against the U.S. dollar and its impact on the remeasurement of the Company's Mexico financial statements during the periods. (vi) This item relates to prior year tax liabilities and contingencies, the reversal of tax liabilities related to certain unremitted earnings from foreign subsidiaries and tax results of the above non-GAAP addbacks. (vii) When GAAP net income is negative and Non-GAAP Adjusted net income is positive, adjusted diluted weighted average common shares outstanding will include any options, restricted share units, or performance share units that would be otherwise dilutive. During the first half of 2021, the incremental dilutive share impact of these instruments was 0.6 million shares of common stock equivalents. Ingredion Incorporated Reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, (in millions, pre-tax) 2022 2021 2022 2021 Operating income $ 213 $ 222 $ 423 $ 52 Add back: Acquisition/integration costs (i) - (3 ) 1 (2 ) Restructuring/impairment charges (ii) 2 4 4 14 Impairment on assets held for sale (iii) - - - 360 Other matters (iv) - (15 ) - (15 ) Non-GAAP adjusted operating income $ 215 $ 208 $ 428 $ 409 For notes (i) through (iv), see notes (i) through (iv) included in the Reconciliation of GAAP Net Income (Loss) attributable to Ingredion and Diluted EPS to Non-GAAP Adjusted Net Income attributable to Ingredion and Adjusted Diluted EPS. II. Non-GAAP Information (continued) Ingredion Incorporated Reconciliation of GAAP Effective Income Tax Rate to Non-GAAP Adjusted Effective Income Tax Rate (Unaudited) Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Income before Provision for Effective Income Income before Provision for Effective Income (in millions) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) As Reported $ 196 $ 51 26.0 % $ 383 $ 105 27.4 % Add back: Acquisition/integration costs (i) - - 1 - Restructuring/impairment charges (ii) 2 1 4 1 Tax item - Mexico (v) - - - 1 Other tax matters (vi) - 1 - 1 Adjusted Non-GAAP $ 198 $ 53 26.8 % $ 388 $ 108 27.8 % Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Income (Loss) before Provision for Effective Income Income before Provision for Effective Income (in millions) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) As Reported $ 205 $ 24 11.7 % $ 17 $ 79 464.7 % Add back: Acquisition/integration costs (i) (3 ) (4 ) (2 ) (4 ) Restructuring/impairment charges (ii) 4 2 14 4 Impairment on assets held for sale (iii) - - 360 - Other matters (iv) (15 ) (5 ) (15 ) (5 ) Tax item - Mexico (v) - 4 - 1 Other tax matters (vi) - 28 - 28 Adjusted Non-GAAP $ 191 $ 49 25.7 % $ 374 $ 103 27.5 % For notes (i) through (vi), see notes (i) through (vi) included in the Reconciliation of GAAP Net Income (Loss) attributable to Ingredion and Diluted EPS to Non-GAAP Adjusted Net Income attributable to Ingredion and Adjusted Diluted EPS. II. Non-GAAP Information (continued) Ingredion Incorporated Reconciliation of Expected GAAP Diluted Earnings per Share ("GAAP EPS") to Expected Adjusted Diluted Earnings per Share ("Adjusted EPS") (Unaudited) Expected EPS Range for Full-Year 2022 Low End of Guidance High End of Guidance GAAP EPS $ 6.95 $ 7.35 Add: Acquisition/integration costs (i) 0.01 0.01 Restructuring/impairment charges (ii) 0.03 0.03 Tax item - Mexico (iii) (0.08 ) 0.07 Other tax matters (iv) (0.01 ) (0.01 ) Adjusted EPS $ 6.90 $ 7.45 Above is a reconciliation of our expected full-year 2022 diluted EPS to our expected full-year 2022 adjusted diluted EPS. The amounts above may not reflect certain future charges, costs and/or gains that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance. These amounts include, but are not limited to, adjustments to GAAP EPS for acquisition and integration costs, impairment and restructuring costs, and certain other items. We generally exclude these adjustments from our adjusted EPS guidance. For these reasons, we are more confident in our ability to forecast adjusted EPS than we are in our ability to forecast GAAP EPS. These adjustments to GAAP EPS for 2022 include the following: (i) Pre-tax acquisition and integration charges for our acquisition and integration of KaTech, as well as our investment in the Argentina joint venture. (ii) Remaining pre-tax restructuring-related charges for the Cost Smart programs. (iii) Tax (benefit) expense as a result of the movement of the Mexican peso against the U.S. dollar and its impact on the remeasurement of the Company's Mexico financial statements during the period. (iv) This item relates to prior year tax liabilities and contingencies. II. Non-GAAP Information (continued) Ingredion Incorporated Reconciliation of Expected U.S. GAAP Effective Tax Rate ("GAAP ETR") to Expected Adjusted Effective Tax Rate ("Adjusted ETR") (Unaudited) Expected Effective Tax Rate Range for Full-Year 2022 Low End of Guidance High End of Guidance GAAP ETR 27.0 % 29.5 % Add: Acquisition/integration costs (i) - % - % Restructuring/impairment charges (ii) 0.2 % 0.2 % Tax item - Mexico (iii) 0.9 % (0.6 ) % Other Tax Matters (iv) 0.2 % 0.2 % Impact of adjustment on Effective Tax Rate (v) (0.3 ) % (0.3 ) % Adjusted ETR 28.0 % 29.0 % Above is a reconciliation of our expected full-year 2022 GAAP ETR to our expected full-year 2022 adjusted ETR. The amounts above may not reflect certain future charges, costs and/or gains that are inherently difficult to predict and estimate due to their unknown timing, effect and/or significance. These amounts include, but are not limited to, adjustments to GAAP ETR for acquisition and integration costs, impairment and restructuring costs, and certain other items. We generally exclude these adjustments from our adjusted ETR guidance. For these reasons, we are more confident in our ability to forecast adjusted ETR than we are in our ability to forecast GAAP ETR. These adjustments to GAAP ETR for 2022 include the following: (i) Tax impact on acquisition and integration charges for our acquisition and integration of KaTech, as well as our investment in the Argentina joint venture. (ii) Tax impact on remaining restructuring-related charges for the Cost Smart programs. (iii) Tax benefit (expense) as a result of the movement of the Mexican peso against the U.S. dollar and its impact to the remeasurement of the Company's Mexico financial statements during the periods. (iv) This item relates to prior year tax liabilities and contingencies. (v) Indirect impact of tax rate after items (i) and (ii).
Orders on hand increase to around €770 million Revenue increase by around 21 percent Full-year guidance for 2022 remains subject to change COLOGNE, GERMANY - EQS Newswire - 11 August 2022 - After a successful start to the year, DEUTZ – one of the world's leading manufacturers of innovative drive systems for off-highway applications – continued to benefit from the sustained recovery in relevant downstream industries in the second quarter and improved its earnings in the first half of 2022. The outbreak of the war in Ukraine has not had a negative impact on demand so far. In this respect, it is proving favorable for DEUTZ that business activities in Russia, Belarus, and Ukraine account for only around €20 million of total annual revenue. Moreover, DEUTZ has no branches in Ukraine or Belarus and also no direct suppliers based in the crisis regions. "In spite of the outbreak of the war in Ukraine, we increased our revenue by around 21 percent to €930.4 million. At the same time, we raised our adjusted EBIT margin by 2.4 percentage points to 4.6 percent. We want to sustain this growth because we still have a long way to go to reach our envisaged target range. But we have taken the first important steps toward achieving this goal, for example by strengthening our focus on disciplined cost management," says CEO Dr. Sebastian C. Schulte. Looking ahead to the second half of 2022, he adds: "Our orders on hand totaled more than three-quarters of a billion euros at the end of June and were thus at a very high level. This means that we are tackling the coming months from a solid position. Nonetheless, our full-year guidance is still subject to change. The supply situation remains challenging and the geopolitical implications of the war in Ukraine are very uncertain. The trajectory of macroeconomic conditions is a cause for concern and highlights once again that we need to make DEUTZ even more resilient to economic downturns. However, we are making good progress on this front." As well as a healthy operating performance, DEUTZ reached further strategic milestones. At the start of 2022, the Company initiated a multi-phase strategy process called Powering Progress in order to secure its long-term competitiveness. Its objectives include improving the Company's commercial performance and technological capabilities. To this end, four priority areas of action were defined together with a range of sub-initiatives, such as passing on increased costs to customers in the short term in the form of multiple rounds of price increases and establishing a process to completely overhaul pricing in the Classic business. The aim for 2022 is to implement price increases of between 8 and 12 percent for the new engine portfolio. DEUTZ also set itself the target of increasing the amount of annual revenue generated by its high-margin service business to over €500 million by 2025 through both organic growth and growth by acquisition. Two initial acquisitions for the service business were made at the start of May, with DEUTZ acquiring its former service partners AUSMA Motorenrevisie B.V. (Netherlands) and South Coast Diesels (Ireland). The two companies sell and service diesel engines in their home markets, where they operate as multi-brand dealers. The newly launched strategy program also aims to accelerate the development of alternative drive solutions. At the end of June, DEUTZ reached a key milestone on the path toward preparing its TCG 7.8 H2 hydrogen engine for volume production. An H2 genset has gone into operation in a joint pilot project between DEUTZ and Cologne-based energy provider RheinEnergie. The combination of a DEUTZ hydrogen engine and a generator will deliver electric power of up to 170 kilovolt-amperes during the initial six-month test phase. This electricity will be fed directly into the local power grid. In a second step, the genset's waste heat is to be utilized. The solution being piloted by DEUTZ and RheinEnergie has huge potential for the local, carbon-neutral supply of energy in urban centers. With an output of around 200 kilowatts, the hydrogen engine is generally suitable for all current DEUTZ applications. Volume production of this engine model is scheduled to begin in 2024. Solid rise in new orders; double-digit increases in unit sales and revenue In the first half of 2022, new orders received by DEUTZ increased by 4.7 percent year on year to €1,077.6 million. All regions contributed to this growth. Orders on hand climbed to a substantial €768.9 million as at June 30, 2022 (June 30, 2021: €531.3 million). This points to a consistently stable order situation in the months ahead. The proportion of orders on hand attributable to the service business stood at €36.6 million (June 30, 2021: €35.1 million). Having sold a total of 108,741 engines, the DEUTZ Group grew its unit sales by 16.1 percent in the first half of 2022 with the two largest sales regions, EMEA and the Americas, contributing double-digit percentage growth. Unit sales of DEUTZ engines[1] rose by 19.9 percent to reach 90,462 engines sold. Unit sales of electric boat drives at DEUTZ's subsidiary Torqeedo were slightly higher year on year at 18,279 (H1 2021: 18,196 electric drives). All the major segments generated significant growth, with Material Handling making the largest contribution to unit sales growth in absolute figures. Reflecting the growth in unit sales, DEUTZ's revenue swelled by 20.8 percent to €930.4 million in the reporting period. This rise was driven by all regions and major application segments. Only the Miscellaneous application segment fell short of the figure for the prior-year period. This was due to lower revenue from engines with capacities over 8 liters and from older engine series, which the increase in revenue from electric boat drives at DEUTZ subsidiary Torqeedo could not offset. Strong improvement in profitability Despite a rise in research and development spending, EBIT before exceptional items (adjusted EBIT) improved significantly to €42.6 million in the first half of 2022, compared with €16.8 million in the prior-year period. This rise was mainly attributable to growth in the volume of business, economies of scale, and the effects of cost-saving measures. The impact of additional costs stemming from persistent supply bottlenecks and higher materials prices is being increasingly mitigated thanks to these costs being passed on to our customers through price increases. In addition, DEUTZ benefited from positive currency effects. However, the Group's adjusted EBIT was once again squeezed by the loss reported by DEUTZ subsidiary Torqeedo, which has not yet managed to break even. The adjusted EBIT margin made a strong year-on-year improvement from 2.2 percent to 4.6 percent. The increase in adjusted EBIT meant that net income before exceptional items improved to €34.0 million (H1 2021: €14.0 million) while earnings per share before exceptional items rose to €0.28 (H1 2021: €0.12). Financial position remains comfortable Cash flow from operating activities amounted to €14.6 million in the first half of 2022 (H1 2021: €44.7 million). This reduction was predominantly driven by the need to increase inventories in order to manage the significant expansion in the volume of business and longer sea freight times and to secure production in a challenging procurement environment. As a result of the decrease in cash flow from operating activities, free cash flow amounted to minus €24.7 million. This equated to a deterioration of €34.4 million compared with the first half of 2021. As a result of drawing down an existing credit line in an amount of around €60 million, net financial debt rose to €123.2 million as at June 30, 2022. This equates to an increase of €43.5 million compared with the end of 2021. The equity ratio stood at 44.5 percent, compared with 45.6 percent at the end of 2021. The DEUTZ Group's financial position therefore remains comfortable. The unused volume of the syndicated loan stood at around €155 million at the end of the reporting period. DEUTZ thus has sufficient financial means to be able to fund its operating business, invest in its transformation, and generate growth through acquisitions. Guidance for 2022 still subject to change due to persistently high levels of uncertainty Although the outbreak of the war in Ukraine did not have a material adverse impact on demand in the first half of 2022, the geopolitical implications of the war and its future trajectory are still creating significant uncertainty that does affect DEUTZ, for example with regard to energy and commodity prices, the availability of materials and freight capacity, and the possibility of Russia cutting off the supply of gas to parts of Europe. For this reason, the guidance published in the 2021 annual report for the full 2022 financial year continues to be subject to change. After discontinuing all new engine business with Russia and Belarus until further notice immediately after the outbreak of the war in Ukraine, DEUTZ decided to go one step further by suspending all technical and sales activities in these markets. The interim report for the first half of 2022 is available on our website at www.deutz.com/en/investor-relations. DEUTZ Group: Overview of key figures € million H1 2022 H1 2021 Change Q2 2022 Q2 2021 Change New orders 1,077.6 1,028.8 4.7% 568.0 564.0 0.7% Group unit sales (units) 108,741 93,627 16.1% 58,726 55,243 6.3% thereof Torqeedo 18,279 18,196 0.5% 11,825 12,061 -2.0% Revenue 930.4 770.2 20.8% 482.5 426.8 13.1% EBIT 35.5 16.1 120.5% 26.5 15.7 68.8% thereof exceptional items[2] -7.1 -0.7 914.3% -0.3 -0.3 0.0% Adjusted EBIT (EBIT before exceptional items) 42.6 16.8 153.6% 26.8 16.0 67.5% EBIT margin (%) 3.8 2.1 +1.7pp 5.5 3.7 +1.8pp EBIT margin before exceptional items (%) 4.6 2.2 +2.4pp 5.6 3.7 +1.9pp Net income 28.0 13.3 110.5% 21.2 14.2 49.3% Net income before exceptional items 34.0 14.0 142.9% 21.5 14.5 48.3% Earnings per share (€) 0.23 0.11 109.1% 0.17 0.12 41.7% Earnings per share before exceptional items (€) 0.28 0.12 133.3% 0.18 0.12 50.0% Equity (Jun. 30) 620.8 555.1 11.8% Equity ratio (Jun. 30, %) 44.5 44.3 +0.2pp Cash flow from operating activities 14.6 44.7 -67.3% 4.9 27.6 -82.2% Free cash flow -24.7 9.7 - -19.8 11.4 - Net financial position (Jun. 30) -123.2 -84.3 46.1% Employees[3] (Jun. 30) 4,946 4,631 6.8% [1] Excluding electric boat drives from DEUTZ subsidiary Torqeedo. [2] Significant income generated or expenses incurred outside the scope of the Company's ordinary business activities that are unlikely to recur. [3] Number of employees expressed in FTEs (full-time equivalents); including trainees, excluding temporary workers. Hashtag: #DEUTZAGThe issuer is solely responsible for the content of this announcement.About DEUTZ AGDEUTZ AG, a publicly traded company headquartered in Cologne, Germany, is one of the world's leading manufacturers of innovative drive systems. Its core competencies are the development, production, distribution, and servicing of drive solutions in the power range up to 620 kW for off-highway applications. The current portfolio extends from diesel, gas, and hydrogen engines to hybrid and all-electric drives. DEUTZ drives are used in a wide range of applications including construction equipment, agricultural machinery, material handling equipment such as forklift trucks and lifting platforms, commercial vehicles, rail vehicles, and boats used for private or commercial purposes. DEUTZ has around 4,750 employees worldwide and over 800 sales and service partners in more than 130 countries. It generated revenue of around €1.6 billion in 2021. Further information is available at www.deutz.com.
Profit attributable to owners of the Company increased 22.2% HONG KONG SAR - Media OutReach - 9 August 2022 - The world's largest telecommunications infrastructure service provider China Tower Corporation Limited ("China Tower", or the "Company") (Stock Code: 0788.HK) is pleased to announce its interim results for the six months ended 30 June 2022. Performance Highlights RMB Million For the six months ended 30 June 2022 2021 Change Operating revenue 45,479 42,673 +6.6% EBITDA 31,958 31,184 +2.5% Profit attributable to owners of the Company 4,224 3,457 +22.2% Basic earnings per share (RMB yuan) 0.0242 0.0198 +22.2% Key operating data Number of tower sites (thousand) 2,049 2,035 +0.7% Number of tower tenants (thousand) 3,521 3,423 +2.9% Tower tenancy ratio (tower tenants / tower sites) 1.72 1.68 +2.4% Our revenue maintained healthy growth while profitability continued to improve in the first half of 2022, with operating revenue reaching RMB45,479 million, up by 6.6% year-on-year. Our EBITDA1 amounted to RMB31,958 million, an increase of 2.5% over the same period last year, with an EBITDA margin2 of 70.3%. Profit attributable to owners of the Company totaled RMB4,224 million, up by 22.2% year-on-year, with a net profit margin of 9.3%. Our cash flow remained strong. In the first half of 2022, net cash generated from operating activities amounted to RMB31,306 million, an increase of 29.2% year-on-year. Capital expenditures were RMB9,085 million, a reduction of 12.3 year-on-year. As a result, our free cash flow3 reached RMB22,221 million, up by 60.1% year-on-year. Our financial position remained stable and healthy, with the Company's total assets reaching RMB313,523 million as of 30 June 2022. Our interest-bearing liabilities stood at RMB92,428 million with a gearing ratio4 of 31.1%, 5.9 percentage points lower than the same period last year. In the first half of 2021, despite the adverse impact of the pandemic re-emerging in various regions in China, we orchestrated our Covid-19 containment measures and operating activities under the guidance of established strategy, strengthening our capabilities in resource coordination and sharing. Building on the stable development of our telecommunication service provider ("TSP") business, our Smart Tower business and Energy business continued to experience rapid growth. Dual growth engines of "5G + DAS" enabled stable growth in TSP business Given the increasing coverage and penetration of 5G network in China, we maintained our focus on the latest market trends and evolving customer demands over the first half of the year and furthered resource coordination and sharing. As a result, we were able to build large-scale 5G networks in a cost- effective and highly efficient manner through offering innovative service and construction models. The Company undertook 318,000 5G base-station demand in the first half of 2022, with the cumulative number reaching 1.544 million as of 30 June 2022, of which 97% were fulfilled by sharing existing resources. Additionally, increasing DAS construction demand promoted even greater growth of DAS business. Given this, "5G + DAS" have emerged as dual growth engines, which secured stable growth of TSP business and cemented our leadership in the construction and operation of telecommunications infrastructure in China. As of 30 June 2022, the Company was managing a total of 2.049 million tower sites, representing a net increase of 11,000 sites compared to the end of 2021. During the same period, we gained 42,000 new TSP tenants, bringing the total number to 3.302 million. Our TSP tenancy ratio also grew from 1.60 as at the end of 2021 to 1.62. With regard to our DAS business, we had covered buildings with a cumulative area of 5,970 million square meters, up by 35.4% from the same period last year, while the high-speed railway tunnels and subway coverage totaled a cumulative length of 18,276 kilometers, an increase of 26.6% over the same period last year. In the first half of 2022, our TSP business revenue reached RMB41,345 million, up by 3.9% year-on- year, among which tower business revenue accounted for RMB38,592 million while DAS business represented RMB2,753 million, a year-on-year growth of 2.3% and 32.0% respectively. Strengthening advantages in resources and capabilities, Two Wings business maintained the momentum of growth The development of the digital economy and the national "dual carbon" goals have presented ample opportunities to our business. We leveraged our resources and strengths to scale up and explore new possibilities of sharing, enabling the advancement of digitalization and adoption of new energy applications in society. As a result, our Two Wings business continued to experience rapid growth. Over the first half of the year, Two Wings business recorded revenue of RMB4,010 million, a year-on- year increase of 46.5%, accounting for 8.8% of our overall operating revenue and contributing 45.4% of the incremental operating revenue. Smart Tower business expanded industry applications and sharpened competitive edge. We seized new opportunities flowing from the rapid development of the digital economy and sped up the upgrading of "telecommunication tower" to "digital tower" by utilizing our existing site resources, localized operations and maintenance, and centralized digital platform. For Tower Monitoring service, we increased investment on research and development, launching differentiated products to meet customer needs while enhancing our digital services, with a focus on key sectors including environmental protection, forestry, agriculture and land. In the first half of 2022, Smart Tower business recorded revenue of RMB2,584 million, representing a growth of 39.4% year-on-year. Of this, Tower Monitoring business revenue reached RMB1,584 million, accounting for 61.3% of Smart Tower business revenue. Energy business focused on core segments and continued to scale up. We further strengthened our core business segments of battery exchange and power backup to enhance the economies of scale in Energy business as well as the quality of delicate management approach. We have deepened our penetration of the delivery and courier markets and consolidated our leadership in the battery exchange market for light electric vehicle. In addition, we offered four-in-one comprehensive solutions covering power backup, generation, monitoring and maintenance, to key industries including telecommunications, finance, healthcare and education. As of 30 June 2022, we had attained a cumulative 782,000 battery exchange users, an increase of 170,000 since the end of 2021. Energy business recorded revenue of RMB1,426 million in the first half of 2022, representing an increase of 61.3% year-on-year, among which, revenue from battery exchange business accounted for RMB802 million, or 56.2%. Mr. Zhang Zhiyong, Chairman of China Tower said, "To capture growth opportunities in the second half of 2022, we will set a clear focus on realizing our goal of becoming a 'world-class integrated information and communications infrastructure service provider and a highly competitive information and new energy applications provider'. This positioning will drive the development of the Company centering around sharing, service, innovation, technology and value creation, and build upon an operating system that is professional, intensive, delicate, efficient and digitalized. We will strive to sustain stable revenue growth and generate higher value for our shareholders, customers and society as a whole." Note 1: EBITDA is calculated by operating profit plus depreciation and amortization. Note 2: EBITDA margin is calculated by dividing EBITDA by operating revenue, and multiplying the resulting value by 100%. Note 3: Free cash flow is the net cash generated from operating activities minus the capital expenditures. Note 4: Gearing ratio is calculated as net debt divided by the sum of total equity and net debt, then multiplied by 100%. Net debt is calculated as the amount of interest-bearing liabilities minus the amount of cash and cash equivalents. Hashtag: #ChinaTowerThe issuer is solely responsible for the content of this announcement.About China TowerSince its incorporation on 15 July 2014, China Tower Corporation Limited ("China Tower") has developed into the world's largest telecommunications tower infrastructure service provider with compelling market advantage under the national strategy of Cyberpower. The Company implements the strategy of "One Core and Two Wings". "One core" refers to the traditional tower business and indoor Distributed Antenna System (DAS) business, which provide services to the TSPs based on site resources; while "Two Wings" refers to the Smart Tower business which mainly provides tower site resources and information services to different industries, as well as Energy business to satisfy the growing demands on innovative energy services in the society, such as battery exchange, power backup and charging. China Tower adheres to the "sharing" philosophy for business development. It promotes site co-location and provides a wide range of services to fulfill the specific needs of its customers. As of the end of June 2022, the Company's total assets amounted to RMB313,523 million. China Tower operated and managed 2.049 million tower sites across 31 provinces, municipalities and autonomous regions in the PRC, and served over 3.521 million tenants with the tenancy ratio of 1.72.
REGULATED INFORMATION Nyxoah Reports Second Quarter and First Half 2022 Financial and Operating Results DREAM enrollment complete, 12-month clinical data expected in fall of 2023 Mont-Saint-Guibert, Belgium – August 8, 2022, 10:05pm CET / 4:05pm ET – Nyxoah SA (Euronext Brussels/Nasdaq: NYXH) (“Nyxoah” or the “Company”), a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA), today reported financial and operating results for the second quarter and first half of 2022. Second Quarter 2022 Financial and Operating Highlights Completed enrollment in DREAM U.S. pivotal trial; expect 12-month clinical data in the fall of 2023 and regulatory approval in the first half of 2024 Generated revenue of €935,000 from the commercialization of Genio® in Europe, primarily in Germany, which represents growth of more than five times the amount achieved in the second quarter of 2021 Activated 11 new implanting sites in Germany during the second quarter, bringing the total to 26 as of June 30, 2022; expecting to have at least 35 active implanting sites by the end of 2022 Received FDA approval of IDE submission to commence the ACCCESS study to treat complete concentric collapse (CCC) patients in the U.S., with first patient implant expected in the fourth quarter of 2022 Received FDA approval of the next generation Genio® 2.1 system for use in the DREAM study and CE mark for use in commercial patients in Europe; this improves patient comfort and compliance with a new smartphone application and upgraded external activation chip, which leverages Nyxoah’s scalable platform to continuously enhance patient comfort and therapy efficacy without requiring a new implant Partnered with Acurable to distribute the AcuPebble SA100 wearable home sleep test to OSA patients in Germany; launch is expected in the fourth quarter of 2022 Included in the newly formed Euronext Tech Leaders Index, which is composed of 100+ innovative and high-growth technology companies with greater than €1 trillion in aggregate market capitalization “We made significant progress on all of our key strategic priorities this quarter, including activating 11 new commercial sites in Germany, completing enrollment in our DREAM trial, and receiving approval for our ACCCESS IDE,” commented Olivier Taelman, Nyxoah’s Chief Executive Officer. “From a commercial standpoint, our second quarter performance showing 42% quarter-over-quarter growth strengthens our confidence that we will achieve market leadership status in Germany by the end of 2022.” “As the only commercially available hypoglossal nerve stimulation (HGNS) therapy approved for the treatment of CCC patients, we are encouraged by the first strong results from patients who are six months post-implantation. These results, combined with no longer having to perform a drug-induced sleep endoscopy (DISE) procedure prior to implant, are driving physicians to recommend Genio for their CCC and non-CCC patients,” continued Mr. Taelman. Mr. Taelman concluded, “In the meantime, we have already begun investing in our U.S. market access organization. As for our ACCCESS study, we expect to implant the first patients before year end.” Second Quarter and First Half 2022 Results UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION – INTERIM CONSOLIDATED STATEMENTS OF LOSS AND OTHER COMPREHENSIVE LOSS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2022 (in thousands) For the three months ended June 30 For the six months ended June 30 2022 2021 2022 2021 Revenue € 935 € 170 € 1 595 € 355 Cost of goods sold (€ 334) (€ 63) (€ 623) (€ 115) Gross profit € 601 € 107 € 972 € 240 Research and Development Expense (€ 3 470) (€ 2 398) (€ 7 065) (€ 5 492) Selling, General and Administrative Expense (€ 4 536) (€ 3 913) (€ 8 729) (€ 6 279) Other income/(expense) € 14 (€ 101) € 150 (€ 97) Operating loss for the period (€ 7 391) (€ 6 305) (€ 14 672) (€ 11 628) Financial income € 4 670 € 39 € 6 246 € 43 Financial expense (€ 2 162) (€ 574) (€ 2 950) (€ 899) Loss for the period before taxes (€ 4 883) (€ 6 840) (€ 11 376) (€ 12 484) Income taxes (€ 107) (€ 99) (€ 315) (€ 124) Loss for the period (€ 4 990) (€ 6 939) (€ 11 691) (€ 12 608) Loss attributable to equity holders (€ 4 990) (€ 6 939) (€ 11 691) (€ 12 608) Other comprehensive loss Items that may be subsequently reclassified to profit or loss (net of tax) Currency translation differences (€ 12) € 262 (€ 114) € 192 Total comprehensive loss for the year, net of tax (€ 5 002) (€ 6 677) (€ 11 805) (€ 12 416) Loss attributable to equity holders (€ 5 002) (€ 6 677) (€ 11 805) (€ 12 416) Basic Loss Per Share (in EUR) (€ 0,193) (€ 0,314) (€ 0,453) (€ 0,570) Diluted Loss Per Share (in EUR) (€ 0,193) (€ 0,314) (€ 0,453) (€ 0,570) UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION – INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT JUNE 30, 2022 (in thousands) As at June 30 2022 December 31 2021 ASSETS Non-current assets Property, plant and equipment € 2 111 € 2 020 Intangible assets 32 570 25 322 Right of use assets 3 410 3 218 Deferred tax asset 1 429 46 Other long-term receivables 180 164 € 39 700 € 30 770 Current assets Inventory 506 346 Trade receivables 957 226 Other receivables 1 548 2 286 Other current assets 852 1 693 Financial assets 47 717 − Cash and cash equivalents 75 602 135 509 € 127 182 € 140 060 Total assets € 166 882 € 170 830 EQUITY AND LIABILITIES Capital and reserves Capital 4 438 4 427 Share premium 228 158 228 033 Share based payment reserve 4 411 3 127 Other comprehensive income 88 202 Retained loss (98 850) (87 167) Total equity attributable to shareholders € 138 245 € 148 622 LIABILITIES Non-current liabilities Financial debt 8 089 7 802 Lease liability 2 859 2 737 Pension liability 80 80 Provisions 44 12 Deferred tax liability − 5 € 11 072 € 10 636 Current liabilities Financial debt 661 554 Lease liability 672 582 Trade payables 4 301 3 995 Current tax liability 4 391 2 808 Other payables 7 540 3 633 € 17 565 € 11 572 Total liabilities € 28 637 € 22 208 Total equity and liabilities € 166 882 € 170 830 UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION - INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS AS AT JUNE 30, 2022 (in thousands) For the six months ended June 30 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax for the year € (11 376) € (12 484) Adjustments for Finance income (6 246) (43) Finance expenses 2 950 899 Depreciation and impairment of property, plant and equipment and right-of-use assets 536 377 Amortization of intangible assets 402 428 Share-based payment transaction expense 1 292 − Increase/(Decrease) in provisions 32 − Other non-cash items 37 11 Cash generated before changes in working capital € (12 373) € (10 812) Changes in working capital Decrease/(Increase) in inventory (160) (27) (Increase)/Decrease in trade and other receivables 1 011 (3 463) Increase/(Decrease) in trade and other payables 2 053 6 061 Cash generated from changes in operations € (9 469) € (8 241) Income tax paid ( 254) ( 111) Net cash used in operating activities € (9 723) € (8 352) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (302) (795) Capitalization of intangible assets (7 650) (3 726) (Increase)/Decrease in financial assets - current (44 032) − Net cash used in investing activities € (51 984) € (4 521) CASH FLOWS FROM FINANCING ACTIVITIES Payment of principal portion of lease liabilities (317) (236) Repayment of other loan (42) (42) Interests paid (134) (258) Repayment of recoverable cash advance − (105) Proceeds from issuance of shares, net of transaction costs 136 362 Other financial costs (8) (10) Net cash generated from financing activities € (365) € (289) Movement in cash and cash equivalents € (62 072) € (13 162) Effect of exchange rates on cash and cash equivalents 2 165 33 Cash and cash equivalents at January 1 € 135 509 € 92 300 Cash and cash equivalents at June 30 € 75 602 € 79 171 Revenue Revenue was €935,000 for the second quarter ending June 30, 2022, compared to €170,000 for the second quarter ending June 30, 2021. Revenue for the first half of 2022 was €1.6 million, compared to €355,000 for the first half of 2021. The increase in revenue was attributable to the Company’s commercialization of the Genio® system, primarily in Germany. Cost of Goods Sold Cost of goods sold was €334,000 for the three months ending June 30, 2022, representing a gross profit of €601,000, or gross margin of 64.3%. This compares to total cost of goods sold of €63,000 in the second quarter of 2021, for a gross profit of €107,000, or gross margin of 62.9%. For the six months ending June 30, 2022, total cost of goods sold was €623,000, representing a gross profit of €972,000, or gross margin of 60.9%. This compares to total cost of goods sold of €115,000 in the first half of 2021, for a gross profit of €240,000, or gross margin of 67.6%. Research and Development Expenses Research and Development expenses were €3.5 million for the three months ending June 30, 2022, versus €2.4 million for the prior year period, reflecting the Company’s investments in the development of next generation versions of the Genio® system as well as ongoing clinical studies, most notably DREAM in the U.S. For the six months ending June 30, 2022, Research and Development expenses were €7.1 million, versus €5.5 million for the first half of 2021. Selling, General and Administrative Expenses Selling, General and Administrative expenses rose to €4.5 million for the second quarter of 2022, up from €3.9 million in the second quarter of 2021. This was due primarily to increased commercial efforts in Germany and other European markets, as well as investments in Nyxoah’s corporate infrastructure. The Company expects to continue adding headcount across the organization ahead of the U.S. commercial launch. For the six months ending June 30, 2022, Selling, General and Administrative expenses were €8.7 million, up from €6.3 million in the first half of 2021 due to increased commercial efforts in Germany and investments in Nyxoah’s corporate infrastructure. Operating Loss Total operating loss for the second quarter and first half of 2022 was €7.4 million and €14.7 million, respectively, versus €6.3 million and €11.6 million in the second quarter and first half of 2021, respectively. This was driven by the acceleration in the Company’s R&D spending, as well as ongoing commercial and clinical activities. Nyxoah realized a net loss of €5.0 million and €11.8 million for the second quarter and first half of 2022, respectively, compared to a net loss of €6.7 million and €12.4 million for the second quarter and first half of 2021, respectively. Cash Position As of June 30, 2022, cash and financial assets totaled €123.3 million, compared to €135.5 million on December 31, 2021. Total cash burn was approximately €2.0 million per month during the first half of 2022. Nyxoah expects monthly cash burn to increase in the second half of 2022 to account for the commencement of the ACCCESS IDE trial in the U.S., and the current cash position provides ample liquidity to get to U.S. commercialization in 2024. First Half 2022 Report Nyxoah’s financial report for the first half of 2022, including details of the audited consolidated results, are available on the investor page of Nyxoah’s website (https://investors.nyxoah.com/financials). Conference call and webcast presentation Nyxoah will conduct a conference call open to the public today at 10:30 p.m. CET / 4:30 p.m. ET, which will also be webcast. To participate in the conference call, please access the following link to register for a dial-in number: https://register.vevent.com/register/BIfc3a52c9352e4e42958e9d816245b3b9 A question-and-answer session will follow the presentation of the results. To access the live webcast, go to https://investors.nyxoah.com/events. The archived webcast will be available for replay shortly after the close of the call. About Nyxoah Nyxoah is a medical technology company focused on the development and commercialization of innovative solutions to treat Obstructive Sleep Apnea (OSA). Nyxoah’s lead solution is the Genio® system, a patient-centered, leadless and battery-free hypoglossal neurostimulation therapy for OSA, the world’s most common sleep disordered breathing condition that is associated with increased mortality risk and cardiovascular comorbidities. Nyxoah is driven by the vision that OSA patients should enjoy restful nights and feel enabled to live their life to its fullest. Following the successful completion of the BLAST OSA study, the Genio® system received its European CE Mark in 2019. Nyxoah completed two successful IPOs: on Euronext Brussels in September 2020 and NASDAQ in July 2021. Following the positive outcomes of the BETTER SLEEP study, Nyxoah received CE mark approval for the expansion of its therapeutic indications to Complete Concentric Collapse (CCC) patients, currently contraindicated in competitors’ therapy. Additionally, the Company is currently conducting the DREAM IDE pivotal study for FDA and US commercialization approval. For more information, please visit http://www.nyxoah.com/. Caution – CE marked since 2019. Investigational device in the United States. Limited by U.S. federal law to investigational use in the United States. Forward-looking statements Certain statements, beliefs and opinions in this press release are forward-looking, which reflect the Company's or, as appropriate, the Company directors' or managements' current expectations regarding the Genio® system; planned and ongoing clinical studies of the Genio® system; the potential advantages of the Genio® system; Nyxoah’s goals with respect to the development, regulatory pathway and potential use of the Genio® system; the utility of clinical data in potentially obtaining FDA approval of the Genio® system; and the Company's results of operations, financial condition, liquidity, performance, prospects, growth and strategies. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties, assumptions and factors could adversely affect the outcome and financial effects of the plans and events described herein. Additionally, these risks and uncertainties include, but are not limited to, the risks and uncertainties set forth in the “Risk Factors” section of the Company’s Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 24, 2022, and subsequent reports that the Company files with the SEC. A multitude of factors including, but not limited to, changes in demand, competition and technology, can cause actual events, performance or results to differ significantly from any anticipated development. Forward looking statements contained in this press release regarding past trends or activities are not guarantees of future performance and should not be taken as a representation that such trends or activities will continue in the future. In addition, even if actual results or developments are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in future periods. No representations and warranties are made as to the accuracy or fairness of such forward-looking statements. As a result, the Company expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements in this press release as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based, except if specifically required to do so by law or regulation. Neither the Company nor its advisers or representatives nor any of its subsidiary undertakings or any such person's officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this press release or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this press release. Contacts: Nyxoah Loic Moreau, Chief Financial Officer corporate@nyxoah.com +32 473 33 19 80 Jeremy Feffer, VP IR and Corporate Communications jeremy.feffer@nyxoah.com +1 917 749 14 Attachment ENGLISH_Q2 2022 Earnings PR Draft Final
Second Quarter 2022 Highlights Product revenue of $400.7 million, up 34% year over year Total revenue of $1.03 billion, up 29% year over year Bookings of $1.38 billion, up 42% year over year1 Billings of $1.30 billion, up 36% year over year2 Deferred revenue of $3.93 billion, up 35% year over year GAAP operating margin of 19.0% Non-GAAP operating margin of 24.8%2 GAAP diluted net income per share attributable to Fortinet, Inc. of $0.213 Non-GAAP diluted net income per share attributable to Fortinet, Inc. of $0.242,3 Cash flow from operations of $323.4 million Free cash flow of $283.5 million2 Cash paid for share repurchases of $800.0 million SUNNYVALE, Calif., Aug. 03, 2022 (GLOBE NEWSWIRE) -- Fortinet® (Nasdaq: FTNT), a global leader in broad, integrated and automated cybersecurity solutions, today announced financial results for the second quarter ended June 30, 2022. “We delivered strong revenue and billings growth in the second quarter driven by an over 50% year-over-year increase in the number of transactions larger than one million dollars. Large enterprise companies continue to favor Fortinet’s industry leading cost for performance advantage and integrated platform strategy,” said Ken Xie, Founder, Chairman, and Chief Executive Officer. “Fortinet’s market share gains are being driven by the convergence of networking and security and an accelerating focus on vendor consolidation with our Core Platform and Platform Extension solutions designed to secure our customers’ entire infrastructure from the data center to the cloud.” Financial Highlights for the Second Quarter of 2022 Revenue: Total revenue was $1.03 billion for the second quarter of 2022, an increase of 28.6% compared to $801.1 million for the same quarter of 2021. Product Revenue: Product revenue was $400.7 million for the second quarter of 2022, an increase of 34.3% compared to $298.3 million for the same quarter of 2021. Service Revenue: Service revenue was $629.4 million for the second quarter of 2022, an increase of 25.2% compared to $502.8 million for the same quarter of 2021. Bookings1: Total bookings were $1.38 billion for the second quarter of 2022, an increase of 42.1% compared to $967.9 million for the same quarter of 2021. Backlog was $349.9 million as of June 30, 2022, an increase of $188.0 million compared to $161.9 million as of December 31, 2021. Billings2: Total billings were $1.30 billion for the second quarter of 2022, an increase of 35.7% compared to $960.9 million for the same quarter of 2021. Deferred Revenue: Total deferred revenue was $3.93 billion as of June 30, 2022, an increase of 35.3% compared to $2.91 billion as of June 30, 2021. GAAP Operating Income and Margin: GAAP operating income was $195.3 million for the second quarter of 2022, representing a GAAP operating margin of 19.0%. GAAP operating income was $147.5 million for the same quarter of 2021, representing a GAAP operating margin of 18.4%. Non-GAAP Operating Income and Margin2: Non-GAAP operating income was $255.4 million for the second quarter of 2022, representing a non-GAAP operating margin of 24.8%. Non-GAAP operating income was $203.3 million for the same quarter of 2021, representing a non-GAAP operating margin of 25.4%. GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.3: GAAP net income was $173.5 million for the second quarter of 2022, compared to GAAP net income of $137.5 million for the same quarter of 2021. GAAP diluted net income per share was $0.21 for the second quarter of 2022, based on 810.1 million diluted weighted-average shares outstanding, compared to GAAP diluted net income per share of $0.16 for the same quarter of 2021, based on 835.4 million diluted weighted-average shares outstanding. Non-GAAP Net Income and Diluted Net Income Per Share Attributable to Fortinet, Inc.2,3: Non-GAAP net income was $194.1 million for the second quarter of 2022, compared to non-GAAP net income of $158.7 million for the same quarter of 2021. Non-GAAP diluted net income per share was $0.24 for the second quarter of 2022, based on 810.1 million diluted weighted-average shares outstanding, compared to $0.19 for the same quarter of 2021, based on 835.4 million diluted weighted-average shares outstanding. Cash Flow: Cash flow from operations was $323.4 million for the second quarter of 2022, compared to $418.2 million for the same quarter of 2021. Free Cash Flow2: Free cash flow was $283.5 million for the second quarter of 2022, compared to $394.7 million for the same quarter of 2021. Share Repurchase Program3: During the three and six months ended June 30, 2022, Fortinet repurchased 14.4 million and 25.8 million shares of its common stock at an average price of $55.45 and $57.82 per share and for an aggregate purchase price of $800.0 million and $1.49 billion, respectively. During the three and six months ended June 30, 2021, Fortinet repurchased 2.3 million shares of its common stock at an average price of $40.28 per share and for an aggregate purchase price of $91.6 million. In July 2022, Fortinet’s board of directors authorized a $1.0 billion increase in the authorized stock repurchase under our share repurchase program. As of August 1, 2022, approximately $1.03 billion remained available for future share repurchases. Guidance For the third quarter of 2022, Fortinet currently expects: Revenue in the range of $1.105 billion to $1.135 billion Billings in the range of $1.385 billion to $1.415 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 $0.26 to $0.28, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 810 million to 820 million. For the fiscal year 2022, Fortinet currently expects: Revenue in the range of $4.350 billion to $4.400 billion Service revenue in the range of $2.620 billion to $2.670 billion Billings in the range of $5.560 billion to $5.640 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 $1.01 to $1.06, assuming a non-GAAP effective tax rate of 17%. This assumes a diluted share count of 810 million to 820 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 Bookings represents the total value of all orders received during the period. Backlog represents orders received but not fulfilled and excludes Alaxala Networks Corporation. When an order is fulfilled, billings and revenue are recognized. 2 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”. 3 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. Third Quarter 2022 Conference Participation Schedule: KeyBanc Technology Leadership Conference August 8, 2022 Stifel Tech Executive Summit Deer Valley August 29-31, 2022 Citibank Investor Conference September 7, 2022 Evercore Investor Conference September 8, 2022 Goldman Sachs Communicopia Conference September 12, 2022 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, FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDB, FortiDDoS, FortiDeceptor, FortiDeploy, FortiDevSec, FortiEdge, FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFone, FortiGSLB, FortiHypervisor, FortiInsight, FortiIsolator, FortiLAN, FortiLink, FortiMoM, FortiMonitor, FortiNAC, FortiNDR, FortiPenTest, FortiPhish, FortiPlanner, 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 third quarter and full year 2022, 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 the COVID-19 pandemic, the war in Ukraine, economic challenges, fears of a recession, and any actual recession, and the effects of increased inflation in certain geographies; significantly heightened 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 COVID-19 pandemic, the war in Ukraine and the effects of increased inflation in certain geographies; 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. COVID-19 Impact While the broader implications of the COVID-19 pandemic on our employees and overall financial performance remain uncertain, we have seen certain impacts on our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources. Going forward, the situation is uncertain, rapidly changing and hard to predict, and the COVID-19 pandemic may have a material negative impact on our future periods, including our results for the three months ending September 30, 2022, our annual results for 2022, and beyond. To highlight the uncertainty remaining for the three-month period ending September 30, 2022, it should be noted that, due to customer buying patterns and the efforts of our sales force and channel partners to meet or exceed quarterly quotas, we have historically received a substantial portion of each quarter’s sales orders and generated a substantial portion of each quarter’s billings and revenue during the last two weeks of the quarter. Additionally, significantly heightened supply chain challenges are impacting businesses around the globe. If we experience significant changes in our billings growth rates or if we are unable to supply product to meet demand, it will impact product revenue in the current quarter and FortiGuard and FortiCare service revenues in subsequent quarters, as we sell annual and multi-year service contracts that are recognized ratably over the contractual service term. In addition, the broader implications of the pandemic on our business and operations and our financial results, including the extent to which the effects of the pandemic will impact future results and growth in the cybersecurity industry, remain uncertain. The duration and severity of the economic downturn from the pandemic may negatively impact our business and operations, results of operations, financial condition, cash flows, liquidity and capital and financial resources in a material way. As a result, the effects of the pandemic may not be fully reflected in our results of operations until future periods. 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, such as proceeds from intellectual property matter. 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, such as proceeds from intellectual property matter, 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, such as non-recurring gains or losses on litigation-related matters. 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 or loss 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 gains or losses on investments in privately held companies, 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 or loss and diluted net income per share calculated in accordance with GAAP. FORTINET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in millions) June 30, 2022 December 31, 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 710.0 $ 1,319.1 Short-term investments 1,020.6 1,194.0 Marketable equity securities 24.3 38.6 Accounts receivable—net 919.5 807.7 Inventory 195.2 175.8 Prepaid expenses and other current assets 83.3 65.4 Total current assets 2,952.9 3,600.6 LONG-TERM INVESTMENTS 188.5 440.8 PROPERTY AND EQUIPMENT—NET 814.6 687.6 DEFERRED CONTRACT COSTS 456.9 423.3 DEFERRED TAX ASSETS 480.2 342.3 GOODWILL AND OTHER INTANGIBLE ASSETS—NET 166.7 188.7 OTHER ASSETS 234.7 235.8 TOTAL ASSETS $ 5,294.5 $ 5,919.1 LIABILITIES AND EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable $ 193.1 $ 148.4 Accrued liabilities 241.2 197.3 Accrued payroll and compensation 187.4 195.0 Deferred revenue 2,013.2 1,777.4 Total current liabilities 2,634.9 2,318.1 DEFERRED REVENUE 1,918.8 1,675.5 INCOME TAX LIABILITIES 67.1 79.5 LONG-TERM DEBT 989.4 988.4 OTHER LIABILITIES 63.9 59.2 Total liabilities 5,674.1 5,120.7 COMMITMENTS AND CONTINGENCIES EQUITY (DEFICIT): Common stock 0.8 0.8 Additional paid-in capital 1,237.3 1,253.6 Accumulated other comprehensive loss (23.4 ) (4.8 ) Accumulated deficit (1,607.6 ) (467.9 ) Total Fortinet, Inc. stockholders’ equity (deficit) (392.9 ) 781.7 Non-controlling interests 13.3 16.7 Total equity (deficit) (379.6 ) 798.4 TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 5,294.5 $ 5,919.1 FORTINET, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in millions, except per share amounts) Three Months Ended Six Months Ended June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 REVENUE: Product $ 400.7 $ 298.3 $ 771.7 $ 539.0 Service 629.4 502.8 1,213.2 972.4 Total revenue 1,030.1 801.1 1,984.9 1,511.4 COST OF REVENUE: Product 155.2 115.6 316.2 206.9 Service 95.6 71.3 188.4 136.6 Total cost of revenue 250.8 186.9 504.6 343.5 GROSS PROFIT: Product 245.5 182.7 455.5 332.1 Service 533.8 431.5 1,024.8 835.8 Total gross profit 779.3 614.2 1,480.3 1,167.9 OPERATING EXPENSES: Research and development 124.3 106.6 249.2 203.8 Sales and marketing 415.5 326.9 803.1 630.9 General and administrative 45.4 34.4 84.0 66.4 Gain on intellectual property matter (1.2 ) (1.2 ) (2.3 ) (2.3 ) Total operating expenses 584.0 466.7 1,134.0 898.8 OPERATING INCOME 195.3 147.5 346.3 269.1 INTEREST INCOME 2.4 1.2 3.7 2.3 INTEREST EXPENSE (4.5 ) (4.5 ) (9.0 ) (5.8 ) OTHER INCOME (EXPENSE)—NET (9.3 ) 0.8 (18.4 ) (1.2 ) INCOME BEFORE INCOME TAXES AND LOSS FROM EQUITY METHOD INVESTMENT 183.9 145.0 322.6 264.4 PROVISION FOR (BENEFIT FROM) INCOME TAXES 2.4 7.5 (5.7 ) 19.7 LOSS FROM EQUITY METHOD INVESTMENT (8.1 ) — (16.6 ) — NET INCOME INCLUDING NON-CONTROLLING INTERESTS 173.4 137.5 311.7 244.7 Less: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS, NET OF TAX (0.1 ) — (0.2 ) — NET INCOME ATTRIBUTABLE TO FORTINET, INC. $ 173.5 $ 137.5 $ 311.9 $ 244.7 Net income per share attributable to Fortinet, Inc.(a): Basic $ 0.22 $ 0.17 $ 0.39 $ 0.30 Diluted $ 0.21 $ 0.16 $ 0.38 $ 0.29 Weighted-average shares used to compute net income per share attributable to Fortinet, Inc.(a): Basic 795.4 816.7 799.4 815.9 Diluted 810.1 835.4 815.4 833.7 (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) Six Months Ended June 30, 2022 June 30, 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income including non-controlling interests $ 311.7 $ 244.7 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 107.9 102.1 Amortization of deferred contract costs 107.1 81.8 Depreciation and amortization 50.6 36.2 Amortization of investment premiums 2.8 2.9 Loss from equity method investment 16.6 — Other 22.8 0.3 Changes in operating assets and liabilities, net of impact of business combinations: Accounts receivable—net (119.3 ) 135.6 Inventory (31.2 ) (20.1 ) Prepaid expenses and other current assets (18.2 ) (16.4 ) Deferred contract costs (140.6 ) (124.8 ) Deferred tax assets (136.3 ) (25.8 ) Other assets (16.7 ) (11.8 ) Accounts payable 52.7 (9.5 ) Accrued liabilities 30.1 21.3 Accrued payroll and compensation (6.8 ) 18.7 Other liabilities 5.7 (1.2 ) Deferred revenue 480.6 300.1 Net cash provided by operating activities 719.5 734.1 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of investments (389.1 ) (1,262.5 ) Sales of investments 3.0 71.4 Maturities of investments 797.3 600.3 Purchases of property and equipment (162.5 ) (75.6 ) Purchases of investment in privately held company — (75.0 ) Payments made in connection with business combinations, net of cash acquired — (10.3 ) Net cash provided by (used in) investing activities 248.7 (751.7 ) 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 (1,491.2 ) (91.6 ) Proceeds from issuance of common stock 15.9 15.8 Taxes paid related to net share settlement of equity awards (99.9 ) (76.0 ) Other (1.1 ) (0.1 ) Net cash provided by (used in) financing activities (1,576.3 ) 835.1 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (1.0 ) — NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (609.1 ) 817.5 CASH AND CASH EQUIVALENTS—Beginning of period 1,319.1 1,061.8 CASH AND CASH EQUIVALENTS—End of period $ 710.0 $ 1,879.3 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 June 30, 2022 June 30, 2021 Net cash provided by operating activities $ 323.4 $ 418.2 Less: Purchases of property and equipment (39.9 ) (23.5 ) Free cash flow $ 283.5 $ 394.7 Net cash provided by (used in) investing activities $ 294.1 $ (278.2 ) Net cash used in financing activities $ (830.3 ) $ (120.9 ) 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 June 30, 2022 Three Months Ended June 30, 2021 GAAP Results Adjustments Non-GAAP Results GAAP Results Adjustments Non-GAAP Results Operating income $ 195.3 $ 60.1 (a) $ 255.4 $ 147.5 $ 55.8 (b) $ 203.3 Operating margin 19.0 % 24.8 % 18.4 % 25.4 % Adjustments: Stock-based compensation 55.3 53.5 Amortization of acquired intangible assets 6.0 3.5 Gain on intellectual property matter (1.2 ) (1.2 ) Tax adjustment (39.1 ) (c) (34.6 ) (c) Adjustments attributable non-controlling interests (0.4 ) (d) — Net income attributable to Fortinet, Inc. $ 173.5 $ 20.6 $ 194.1 $ 137.5 $ 21.2 $ 158.7 Diluted net income per share attributable to Fortinet, Inc.(e) $ 0.21 $ 0.24 $ 0.16 $ 0.19 Shares used in diluted net income per share attributable to Fortinet, Inc. calculations(e) 810.1 810.1 835.4 835.4 (a) To exclude $55.3 million of stock-based compensation and $6.0 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended June 30, 2022. (b) To exclude $53.5 million of stock-based compensation and $3.5 million of amortization of acquired intangible assets, offset by a $1.2 million gain on intellectual property matter in the three months ended June 30, 2021. (c) Non-GAAP financial information is adjusted to an effective tax rate of 17% and 21% in the three months ended June 30, 2022 and 2021, respectively, on a non-GAAP basis, which differs from the GAAP effective tax rate. (d) 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 in the three months ended June 30, 2022. (e) 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 June 30, 2022 June 30, 2021 Total revenue $ 1,030.1 $ 801.1 Add: Change in deferred revenue 274.1 159.8 Total billings $ 1,304.2 $ 960.9 Investor Contact: Media Contact: Peter Salkowski Sandra Wheatley Fortinet, Inc. Fortinet, Inc. 408-331-4595 408-391-9408 psalkowski@fortinet.com swheatley@fortinet.com
Continued Execution of Growth Strategy Drives Operational Outperformance and Increased 2022 Outlook PHOENIX, Aug. 03, 2022 (GLOBE NEWSWIRE) -- WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini Holdings” or the “Company”) (Nasdaq: WSC), the North American leader in innovative flexible workspace and portable storage solutions, today announced second quarter 2022 results and provided an update on operations and the current market environment, including the following highlights: Execution across multiple organic and inorganic growth levers resulted in second quarter revenue of $582 million, net income of $73 million, and Adjusted EBITDA of $233 million. Closed six acquisitions year to date through July 2022 with consistent pipeline for H2 2022 to expand our fleet of mobile offices and portable storage containers. Generated $188 million of Cash From Operations and $69 million of Free Cash Flow in the quarter with Free Cash Flow Margin of 12% over the last twelve months. Returned $250 million to shareholders by repurchasing 7.2 million shares of Common Stock and stock equivalents during the quarter, reducing economic share count by 5.6% over the last 12 months as of June 30, 20221. Increased full-year 2022 Adjusted EBITDA outlook range to between $900 million and $940 million, representing 22% to 27% growth versus 2021. Board replenished share repurchase authorization to $1.0 billion as of July 21, 2022. Brad Soultz, Chief Executive Officer of WillScot Mobile Mini Holdings, commented, "Our results in the second quarter demonstrated our team's laser focus on executing the idiosyncratic growth strategy that we articulated at our November 2021 Investor Day. While end market strength continued to be broad-based, the momentum in our business is being driven by growth initiatives such as pricing, valued-added products, cross-selling, and acquisitions that compound powerfully together and are within our control. Our team delivered strong organic and inorganic volume growth, driving 2% year-over-year growth in average modular units on rent in NA Modular and 24% year-over-year growth in average portable storage units on rent in NA Storage and NA Modular combined. Together these fundamentals compounded to drive 200 basis points of Adjusted EBITDA margin expansion year-over-year during the quarter. And following the SAP cutover in 2021, our infrastructure is highly scalable, as evidenced by our continued M&A cadence. We successfully closed and integrated four regional acquisitions during the second quarter and completed another in July, bringing our year-to-date total transactions to six. Each acquisition represents an opportunity to expand our offering, grow our team of dedicated professionals, integrate scarce equipment into our portfolio, and deliver more value to our customers." Soultz added, "We are allocating capital aggressively where we see opportunities to compound growth and returns. Based on demand, we are fully funding organic capex for value-added products (VAPS), additional portable storage units, and modular unit refurbishments. Our M&A pipeline supports a consistent cadence of tuck-in transactions, and we will continue to pursue smart and accretive acquisitions. And over the last 12 months, we have repurchased 14.3 million shares for $481 million, representing about 7% of our market capitalization as of June 30, 2022. In recognition of the value creation opportunities across our portfolio, our Board proactively replenished our $1.0 billion share repurchase authorization. We have a uniquely resilient business with powerful idiosyncratic growth levers. I am excited about our outlook for the remainder of the year and beyond and am extremely proud of the execution by our team." Three Months Ended June 30, Six Months Ended June 30, (in thousands, except share data) 2022 2021 2022 2021 Revenue $ 581,642 $ 461,102 $ 1,090,536 $ 886,425 Consolidated net income $ 73,376 $ 20,371 $ 124,547 $ 24,818 Adjusted EBITDA2 $ 233,335 $ 175,495 $ 425,158 $ 339,080 Adjusted EBITDA Margin (%)2 40.1 % 38.1 % 39.0 % 38.3 % Net cash provided by operating activities $ 188,326 $ 139,537 $ 333,853 $ 261,608 Free Cash Flow2 $ 69,418 $ 82,056 $ 124,042 $ 173,216 Fully Diluted Shares Outstanding 227,484,012 236,536,713 226,983,150 234,898,911 Free Cash Flow Margin (%)2 11.9 % 17.8 % 11.4 % 19.5 % Return on Invested Capital2 14.6 % 10.3 % 13.0 % 10.3 % Three Months Ended June 30, Six Months Ended June 30, Adjusted EBITDA by Segment (in thousands)2 2022 2021 2022 2021 NA Modular $ 127,881 $ 103,545 $ 231,829 $ 200,916 NA Storage 80,762 49,526 144,587 95,848 UK Storage 12,230 12,328 24,774 23,392 Tank and Pump 12,462 10,096 23,968 18,924 Consolidated Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080 Second Quarter 2022 Results2 Tim Boswell, President and Chief Financial Officer of WillScot Mobile Mini Holdings, commented, "Q2 was another strong quarter, driven by our leasing fundamentals. We grew volumes, increased VAPS penetration, and accelerated pricing in all segments, while supplementing our organic results with smart acquisitions. Revenues of $582 million increased by 26%, Adjusted EBITDA of $233 million increased by 33%, Consolidated Adjusted EBITDA margin of 40.1% expanded by 200 basis points, and Net Income of $73 million and diluted EPS of $0.32 increased by 260% and 303%, respectively. Our team continued to execute effectively across all growth initiatives and we are capitalizing on this unique inflationary and supply constrained macroeconomic backdrop, as evidenced by the substantial margin expansion in our results and outlook. Notably, we expect that the benefits of inflationary impacts on our prices will continue to roll through our income statement over the next 18 to 24 months, supporting margin expansion well into 2023 and beyond." Boswell continued, "Our forward visibility into growth gives us confidence to reinvest where we see opportunities to compound returns. Cash flows from operations of $188 million increased by 35% year-over-year, consistent with our expectations. Reinvestment in organic capital expenditures was entirely demand driven and increased to $119 million to support organic expansion of our storage fleet and value-added products, as well as modular refurbishments. We invested $46 million in acquisitions during the quarter, which are compounding with our organic initiatives and accelerating our run-rate heading into 2023. Complementing these operational investments, we repurchased 7.2 million shares of Common Stock and stock equivalents for $250 million in Q2, and over the last 12 months, we reduced our economic share count by 5.6%, representing a powerful return to our shareholders." Boswell also shared, "As a validation of our growth strategy and execution, we opportunistically amended and upsized our asset-based revolving credit facility (ABL) on June 30, 2022, increasing the facility size from $2.4 billion to $3.7 billion, extending the term for five years to June 2027, and reducing our interest rate spread over SOFR by approximately 50 basis points to partly offset broader benchmark rate increases. Our current annualized cash interest expense is approximately $130 million, and we have $1.0 billion of excess availability under the ABL, which gives us ample liquidity to support our strategy. We are incredibly grateful to our investors who supported us in this process and for their confidence in our plans. "With the first half of 2022 complete, we are raising our full year guidance to $2.2 billion to $2.3 billion of revenue and $900 million to $940 million of Adjusted EBITDA. We continue to expect that Adjusted EBITDA margins will be up approximately 200 basis points for the year and that our Free Cash Flow run-rate will accelerate to approximately $500 million as we head into 2023. We have a clear formula to drive sustainable growth and returns, and we are executing predictably." Consolidated Revenue of $581.7 million increased by 26.1% year-over-year due to organic revenue growth levers in the business and due to the impact of acquisitions. Recent acquisitions contributed approximately $19.0 million to total revenues. Adjusted EBITDA of $233.3 million increased by 32.9% year-over-year and Consolidated Adjusted EBITDA margin of 40.1% increased 200 bps year-over-year due to strong pricing and volume trends, offset by increased variable costs from higher activity levels, inflationary pressures, and discretionary resource additions to support growth. NA Modular Revenue of $347.7 million increased by 20.1% year-over-year. Average modular space monthly rental rate increased $130 year-over-year, or 16.2% to $931. Average modular space units on rent increased 1,804 units year-over-year, or 2.1% to 86,558. Units on rent have grown 2.4% year-to-date from 12/31/2021 to 6/30/2022, which has been split evenly between organic growth and via acquisition. Value-Added Products (VAPS) average monthly rate, a component of average modular space monthly rental rate above, increased $43 year-over-year, or 19% to $266. For delivered units over the last 12 months, VAPS average monthly rate increased $70 year-over-year, or 20%, to $430. Adjusted EBITDA of $127.9 million increased by 23.6% year-over-year. The transfer of the NA Modular portable storage fleet to the NA Storage segment in Q3 2021 represented a decline of about $5 million of revenue and EBITDA in Q2 2022, which has not been adjusted historically. NA Storage Revenue of $175.2 million increased by 51.3% year-over-year. Average portable storage monthly rental rate increased $35 year-over-year, or 23.2% to $186. Average portable storage units on rent increased by 42,859 units year-over-year, or 38.0% to 155,721. Of this increase, approximately 12,000 of the units on rent increase was driven by organic volume growth. The remainder of the increase was driven by the acquisition of approximately 18,700 average units on rent from Q3 2021 to Q2 2022 and the transfer of approximately 12,000 units from NA Modular (legacy WillScot) into the NA Storage segment that was completed in Q3 2021. Average modular space monthly rental rate increased $110 year-over-year, or 19.2%, to $683, and modular space average units on rent increased 1,697 year-over-year, or 10.4%, to 18,057. Adjusted EBITDA of $80.8 million increased by 63.2% year-over-year. The transfer of the NA Modular portable storage fleet to the NA Storage segment in Q3 2021 represented an increase of about $5 million of revenue and EBITDA in Q2 2022, which has not been adjusted historically. UK Storage Revenue of $26.7 million decreased 6.0% year-over-year and Adjusted EBITDA of $12.2 million decreased by 0.8%, driven by the weakening of the British Pound relative to the US Dollar. In local currency, revenue increased 4.4% year-over-year, driven by a 17.5% increase in portable storage average monthly rental rates and a 7.9% increase in average portable storage units on rent, and Adjusted EBITDA increased by 10.4% year-over-year. Tank and Pump Revenue of $32.1 million increased 16.7% year-over-year, driven by increased OEC utilization and improved pricing, and Adjusted EBITDA of $12.5 million increased by 23.8%. Capitalization and Liquidity Update2 As of June 30, 2022: Repurchased 7.2 million shares of Common Stock and stock equivalents for $250 million in the second quarter 2022, contributing to a 5.6% reduction in our economic share count over the last 12 months. On July 21, 2022, the Board of Directors approved an increase in the repurchase authority, which reset the amount to $1.0 billion. Amended our asset-based revolving credit facility to provide additional capacity for growth by increasing the aggregate principal amount of revolving credit facilities to $3.7 billion from $2.4 billion, extended the facility for five years to June 2027, increased capacity available under the facility's accordion feature, reduced the interest rate spread above the Term SOFR base rate to 150 basis points, and included an option to incorporate pricing adjustments linked to the Company's Environmental, Social, and Governance initiatives. Maintained $1.0 billion of excess availability under the asset-based revolving credit facility; a flexible covenant structure and accelerating free cash flow provide ample liquidity to fund multiple capital allocation priorities. As of August 3, 2022, weighted average interest rate is approximately 4.2% and annual cash interest expense based on the current debt structure and benchmark rates is approximately $130 million. No debt maturities prior to 2025. Maintained leverage at 3.7x last-12-months Adjusted EBITDA of $826 million, above our target range of 3.0x to 3.5x, while supporting strong organic demand, executing four tuck-in transactions, and repurchasing shares. 2022 Outlook2, 3, 4 This guidance is subject to risks and uncertainties, including those described in "Forward-Looking Statements" below. 2021 Results Prior 2022 Outlook Current 2022 Outlook Revenue $1,895 million $2,100 million - $2,200 million $2,200 million - $2,300 million Adjusted EBITDA2,3 $740 million $860 million - $900 million $900 million - $940 million Net CAPEX3,4 $237 million $275 million - $325 million $325 million - $375 million 1 - Assumes common shares outstanding plus treasury stock method from warrants outstanding as of June 30, 2022 versus June 30, 2021 and the closing stock price of $32.42 on June 30, 2022. 2 - Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, and Return on Invested Capital are non-GAAP financial measures. Further information and reconciliations for these non-GAAP measures to the most directly comparable financial measure under generally accepted accounting principles in the US ("GAAP") is included at the end of this press release. 3 - Information reconciling forward-looking Adjusted EBITDA and Net CAPEX to GAAP financial measures is unavailable to the Company without unreasonable effort and therefore no reconciliation to the most comparable GAAP measures is provided. 4 - Net CAPEX is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release. Non-GAAP Financial Measures This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Free Cash Flow Margin, Return on Invested Capital, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net Income Excluding Gain/Loss from Warrants, and Net CAPEX. Adjusted EBITDA is defined as net income (loss) plus net interest (income) expense, income tax expense (benefit), depreciation and amortization adjusted to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations, including net currency gains and losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, costs incurred related to transactions, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by revenue. Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (income) expense, amortization adjusted for non-cash items considered non-core to business operations including net currency (gains) losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses, reduced by our estimated statutory tax rate. Given we are not a significant US taxpayer due to our current tax attributes, we include estimated taxes at our current statutory tax rate of approximately 25%. Net assets is total assets less goodwill and intangible assets, net and all non-interest bearing liabilities and is calculated as a five quarter average. Adjusted Gross Profit is defined as gross profit plus depreciation of rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue. Net Income Excluding Gain/Loss from Warrants is defined as net income plus or minus the change in the fair value of the common stock warrant liability. Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. The Company believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of the Company to its competitors; (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends; and (v) align with definitions in our credit agreement. The Company believes that Free Cash Flow and Free Cash Flow Margin are useful to investors because they allow investors to compare cash generation performance over various reporting periods and against peers. The Company believes that Return on Invested Capital provides information about the long-term health and profitability of the business relative to the Company's cost of capital. The Company believes that Adjusted Gross Profit and Adjusted Gross Profit Percentage are useful to investors because they allow investors to assess gross profit excluding non-cash expenses, which provides useful information regarding our results of operations and assists in analyzing the underlying performance of our business. The Company believes that Net Income Excluding Gain/Loss from Warrants is useful to investors because it removes the impact of stock market volatility from our operational results. The Company believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore the Company's non-GAAP financial measures may not be directly comparable to similarly-titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see “Reconciliation of Non-GAAP Financial Measures" included in this press release. Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort. We cannot provide reconciliations of forward-looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. The Company provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above. Conference Call Information WillScot Mobile Mini Holdings will host a conference call and webcast to discuss its second quarter 2022 results and outlook at 10 a.m. Eastern Time on Thursday, August 4, 2022. The live call may be accessed by dialing (800) 715-9871, Conference ID: 5178595 (US/Canada toll-free) or (646) 307-1963, Conference ID: 5178595 (international) and asking to be connected to the WillScot Mobile Mini Holdings call. A live webcast will also be accessible via the "Events & Presentations" section of the Company's investor relations website www.willscotmobilemini.com. Choose "Events" and select the information pertaining to the WillScot Mobile Mini Holdings Second Quarter 2022 Conference Call. Additionally, there will be slides accompanying the webcast. Please allow at least 15 minutes prior to the call to register, download and install any necessary software. For those unable to listen to the live broadcast, an audio webcast of the call will be available for 12 months on the Company’s investor relations website. About WillScot Mobile Mini Holdings WillScot Mobile Mini Holdings trades on the Nasdaq stock exchange under the ticker symbol “WSC.” Headquartered in Phoenix, Arizona, the Company is a leading business services provider specializing in innovative flexible workspace and portable storage solutions. WillScot Mobile Mini services diverse end markets across all sectors of the economy from a network of approximately 280 branch locations and additional drop lots throughout the United States, Canada, Mexico, and the United Kingdom. Forward-Looking Statements This press release contains forward-looking statements (including the guidance/outlook contained herein) within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The words "estimates," "expects," "anticipates," "believes," "forecasts," "plans," "intends," "may," "will," "should," "shall," "outlook" and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature. Certain of these forward-looking statements include statements relating to: robust demand continuing, our ability to continue acceleration of commercial momentum, our pipeline, further acceleration of our run rate, the timing of our achievement of our three to five year milestones, our ability to grow predictable reoccurring revenue streams, compound cash generation, drive higher returns on invested capital, and Adjusted EBITDA margin expansion. Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, they are predictions and we can give no assurance that any such forward-looking statement will materialize. Important factors that may affect actual results or outcomes include, among others, our ability to acquire and integrate new assets and operations; our ability to achieve planned synergies related to acquisitions; our ability to successfully execute our growth strategy, manage growth and execute our business plan; our estimates of the size of the markets for our products; the rate and degree of market acceptance of our products; the success of other competing modular space and portable storage solutions that exist or may become available; rising costs adversely affecting our profitability; potential litigation involving our Company; general economic and market conditions impacting demand for our products and services and our ability to benefit from an inflationary environment; our ability to maintain an effective system of internal controls; and such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our Form 10-K for the year ended December 31, 2021), which are available through the SEC’s EDGAR system at www.sec.gov and on our website. Any forward-looking statement speaks only at the date which it is made, and the Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Additional Information and Where to Find It Additional information can be found on the company's website at www.willscotmobilemini.com. Contact Information Investor Inquiries: Media Inquiries: Nick Girardi Jessica Taylor investors@willscotmobilemini.com jetaylor@willscotmobilemini.com WillScot Mobile Mini Holdings Corp. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands, except share and per share data) 2022 2021 2022 2021 Revenues: Leasing and services revenue: Leasing $ 428,620 $ 343,179 $ 821,812 $ 658,841 Delivery and installation 125,403 91,680 225,734 175,184 Sales revenue: New units 11,094 11,008 17,691 21,963 Rental units 16,525 15,235 25,299 30,437 Total revenues 581,642 461,102 1,090,536 886,425 Costs: Costs of leasing and services: Leasing 96,912 83,032 185,790 152,927 Delivery and installation 93,587 77,153 175,102 147,289 Costs of sales: New units 6,139 7,052 10,465 14,161 Rental units 8,955 8,162 14,099 17,267 Depreciation of rental equipment 67,176 62,893 129,392 118,591 Gross profit 308,873 222,810 575,688 436,190 Expenses: Selling, general and administrative 162,164 122,387 312,374 239,716 Other depreciation and amortization 19,054 21,622 38,658 39,946 Lease impairment expense and other related charges (9 ) 474 254 1,727 Restructuring costs (86 ) 6,960 (86 ) 10,102 Currency (gains) losses, net (127 ) 33 11 69 Other (income) expense, net (3,784 ) 719 (5,093 ) (1,269 ) Operating income 131,661 70,615 229,570 145,899 Interest expense 33,574 29,212 64,564 59,176 Fair value (gain) loss on common stock warrant liabilities — (610 ) — 26,597 Loss on extinguishment of debt — 2,814 — 5,999 Income before income tax 98,087 39,199 165,006 54,127 Income tax expense 24,711 18,828 40,459 29,309 Net Income $ 73,376 $ 20,371 $ 124,547 $ 24,818 Earnings per share: Basic $ 0.33 $ 0.09 $ 0.56 $ 0.11 Diluted $ 0.32 $ 0.08 $ 0.55 $ 0.11 Weighted average shares: Basic 223,376,276 228,406,812 222,196,986 228,350,318 Diluted 227,484,012 236,536,713 226,983,150 234,898,911 Unaudited Segment Operating Data Comparison of Three Months Ended June 30, 2022 and 2021 Three Months Ended June 30, 2022 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 347,670 $ 175,220 $ 26,666 $ 32,086 $ 581,642 Gross profit $ 153,808 $ 121,404 $ 17,089 $ 16,572 $ 308,873 Adjusted EBITDA $ 127,881 $ 80,762 $ 12,230 $ 12,462 $ 233,335 Capital expenditures for rental equipment $ 82,482 $ 34,282 $ 7,604 $ 5,785 $ 130,153 Average modular space units on rent 86,558 18,057 8,387 — 113,002 Average modular space utilization rate 67.6 % 74.2 % 71.0 % — % 68.8 % Average modular space monthly rental rate $ 931 $ 683 $ 409 $ — $ 853 Average portable storage units on rent 476 155,721 27,595 — 183,792 Average portable storage utilization rate 53.7 % 85.5 % 89.8 % — % 86.0 % Average portable storage monthly rental rate $ 211 $ 186 $ 93 $ — $ 172 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.7 % 75.7 % Three Months Ended June 30, 2021 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 289,382 $ 115,794 $ 28,432 $ 27,494 $ 461,102 Gross profit $ 116,136 $ 75,721 $ 17,937 $ 13,016 $ 222,810 Adjusted EBITDA $ 103,545 $ 49,526 $ 12,328 $ 10,096 $ 175,495 Capital expenditures for rental equipment $ 49,364 $ 8,773 $ 4,226 $ 2,919 $ 65,282 Average modular space units on rent 84,754 16,360 9,354 — 110,468 Average modular space utilization rate 67.7 % 78.4 % 84.3 % — % 70.3 % Average modular space monthly rental rate $ 801 $ 573 $ 438 $ — $ 736 Average portable storage units on rent 13,301 112,862 25,573 — 151,736 Average portable storage utilization rate 69.8 % 76.1 % 91.8 % — % 77.7 % Average portable storage monthly rental rate $ 133 $ 151 $ 88 $ — $ 139 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 71.2 % 71.2 % Comparison of Six Months Ended June 30, 2022 and 2021 Six Months Ended June 30, 2022 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 647,356 $ 326,704 $ 54,106 $ 62,370 $ 1,090,536 Gross profit $ 282,739 $ 226,534 $ 35,010 $ 31,405 $ 575,688 Adjusted EBITDA $ 231,829 $ 144,587 $ 24,774 $ 23,968 $ 425,158 Capital expenditures for rental equipment $ 140,059 $ 54,453 $ 17,219 $ 13,658 $ 225,389 Average modular space units on rent 85,783 18,308 8,420 — 112,511 Average modular space utilization rate 67.3 % 75.3 % 72.3 % — % 68.9 % Average modular space monthly rental rate $ 908 $ 638 $ 418 $ — $ 836 Average portable storage units on rent 469 154,023 27,522 — 182,014 Average portable storage utilization rate 53.1 % 84.4 % 89.8 % — % 85.0 % Average portable storage monthly rental rate $ 186 $ 176 $ 93 $ — $ 164 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 75.8 % 75.8 % Six Months Ended June 30, 2021 (in thousands, except for units on rent and rates) NA Modular NA Storage UK Storage Tank and Pump Total Revenue $ 555,606 $ 223,542 $ 55,439 $ 51,838 $ 886,425 Gross profit $ 229,138 $ 148,340 $ 34,430 $ 24,282 $ 436,190 Adjusted EBITDA $ 200,916 $ 95,848 $ 23,392 $ 18,924 $ 339,080 Capital expenditures for rental equipment $ 88,499 $ 12,245 $ 10,996 $ 6,077 $ 117,817 Average modular space units on rent 84,737 16,399 9,235 — 110,371 Average modular space utilization rate 67.6 % 78.9 % 84.1 % — % 70.3 % Average modular space monthly rental rate $ 769 $ 554 $ 420 $ — $ 703 Average portable storage units on rent 14,186 109,355 25,112 — 148,653 Average portable storage utilization rate 64.8 % 75.0 % 90.5 % — % 76.1 % Average portable storage monthly rental rate $ 128 $ 150 $ 85 $ — $ 137 Average tank and pump solutions rental fleet utilization based on original equipment cost N/A N/A N/A 69.3 % 69.3 % WillScot Mobile Mini Holdings Corp. Condensed Consolidated Balance Sheets (in thousands, except share data) June 30, 2022 (Unaudited) December 31, 2021 Assets Cash and cash equivalents $ 11,706 $ 12,699 Trade receivables, net of allowances for credit losses at June 30, 2022 and December 31, 2021 of $53,544 and $47,629, respectively 440,993 399,887 Inventories 41,824 32,739 Prepaid expenses and other current assets 44,245 36,761 Assets held for sale 1,518 954 Total current assets 540,286 483,040 Rental equipment, net 3,257,475 3,080,981 Property, plant and equipment, net 322,707 312,178 Operating lease assets 235,266 247,064 Goodwill 1,171,725 1,178,806 Intangible assets, net 446,578 460,678 Other non-current assets 4,771 10,852 Total long-term assets 5,438,522 5,290,559 Total assets $ 5,978,808 $ 5,773,599 Liabilities and equity Accounts payable $ 155,901 $ 118,271 Accrued expenses 115,124 100,195 Accrued employee benefits 63,331 68,414 Deferred revenue and customer deposits 189,333 159,639 Operating lease liabilities - current 52,495 53,005 Current portion of long-term debt 20,663 18,121 Total current liabilities 596,847 517,645 Long-term debt 3,017,678 2,694,319 Deferred tax liabilities 390,092 354,879 Operating lease liabilities - non-current 183,851 194,256 Other non-current liabilities 16,390 15,737 Long-term liabilities 3,608,011 3,259,191 Total liabilities 4,204,858 3,776,836 Commitments and contingencies Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at June 30, 2022 and December 31, 2021 — — Common Stock: $0.0001 par, 500,000,000 shares authorized and 216,090,996 and 223,939,527 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively 22 22 Additional paid-in-capital 3,295,747 3,616,902 Accumulated other comprehensive loss (55,276 ) (29,071 ) Accumulated deficit (1,466,543 ) (1,591,090 ) Total shareholders' equity 1,773,950 1,996,763 Total liabilities and shareholders' equity $ 5,978,808 $ 5,773,599 Reconciliation of Non-GAAP Financial Measures In addition to using GAAP financial measurements, we use certain non-GAAP financial information that we believe is important for purposes of comparison to prior periods and development of future projections and earnings growth prospects. This information is also used by management to measure the profitability of our ongoing operations and analyze our business performance and trends. We evaluate business segment performance on Adjusted EBITDA, a non-GAAP measure that excludes certain items as described in the reconciliation of our consolidated net income (loss) to Adjusted EBITDA reconciliation below. We believe that evaluating segment performance excluding such items is meaningful because it provides insight with respect to intrinsic operating results of the Company. We also regularly evaluate gross profit by segment to assist in the assessment of the operational performance of each operating segment. We consider Adjusted EBITDA to be the more important metric because it more fully captures the business performance of the segments, inclusive of indirect costs. We also evaluate Free Cash Flow, a non-GAAP measure that provides useful information concerning cash flow available to fund our capital allocation alternatives. Adjusted EBITDA We define EBITDA as net income (loss) plus interest (income) expense, income tax expense (benefit), depreciation and amortization. Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations: Currency (gains) losses, net: on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency. Substantially all such currency gains (losses) are unrealized and attributable to financings due to and from affiliated companies. Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment. Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs. Transaction costs including legal and professional fees and other transaction specific related costs. Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies. Non-cash charges for stock compensation plans. Gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities. Other expense includes consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment. Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing the Company’s results as reported under US GAAP. Some of these limitations are: Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs; Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness; Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes; Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations; although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as measures of cash that will be available to meet our obligations. The following table provides an unaudited reconciliation of Net income to Adjusted EBITDA: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818 Income tax expense 24,711 18,828 40,459 29,309 Loss on extinguishment of debt — 2,814 — 5,999 Fair value (gain) loss on common stock warrant liabilities — (610 ) — 26,597 Interest expense 33,574 29,212 64,564 59,176 Depreciation and amortization 86,230 84,515 168,050 158,537 Currency (gains) losses, net (127 ) 33 11 69 Restructuring costs, lease impairment expense and other related charges (95 ) 7,434 168 11,829 Transaction costs 22 — 41 844 Integration costs 5,203 7,622 9,291 14,964 Stock compensation expense 9,292 4,707 15,687 8,221 Other 1,149 569 2,340 (1,283 ) Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080 Net Income Excluding Gain/Loss from Warrants We define Net Income Excluding Gain/Loss from Warrants as net income plus or minus the impact of the change in the fair value of the common stock warrant liability. Management believes that the presentation of our financial statements excluding the impact of this mark-to-market adjustment provides useful information regarding our results of operations and assists in the review of the actual operating performance of our business. The following table provides an unaudited reconciliation of Net income to Net Income Excluding Gain/Loss from Warrants: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net income $ 73,376 $ 20,371 $ 124,547 $ 24,818 Fair value (gain) loss on common stock warrant liabilities — (610 ) — 26,597 Net Income Excluding Gain/Loss from Warrants $ 73,376 $ 19,761 $ 124,547 $ 51,415 Adjusted EBITDA Margin We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Revenue. Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business. The following table provides an unaudited reconciliation of Adjusted EBITDA Margin: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Adjusted EBITDA (A) $ 233,335 $ 175,495 $ 425,158 $ 339,080 Revenue (B) 581,642 461,102 1,090,536 886,425 Adjusted EBITDA Margin (A/B) 40.1 % 38.1 % 39.0 % 38.3 % Net Income (C) $ 73,376 $ 20,371 $ 124,547 $ 24,818 Net Income Margin % (C/B) 12.6 % 4.4 % 11.4 % 2.8 % Free Cash Flow and Free Cash Flow Margin We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and property, plant and equipment, which are all included in cash flows from investing activities. Free Cash Flow Margin is defined as Free Cash Flow divided by Revenue. Management believes that the presentation of Free Cash Flow and Free Cash Flow Margin provides useful information to investors concerning cash flow available to fund our capital allocation alternatives. The following table provides an unaudited reconciliation of net cash provided by operating activities to Free Cash Flow. Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net cash provided by operating activities $ 188,326 $ 139,537 $ 333,853 $ 261,608 Purchase of rental equipment and refurbishments (130,153 ) (65,282 ) (225,389 ) (117,817 ) Proceeds from sale of rental equipment 20,526 15,235 35,080 30,437 Purchase of property, plant and equipment (9,772 ) (10,143 ) (20,253 ) (17,450 ) Proceeds from the sale of property, plant and equipment 491 2,709 751 16,438 Free Cash Flow (A) $ 69,418 $ 82,056 $ 124,042 $ 173,216 Revenue (B) $ 581,642 $ 461,102 $ 1,090,536 $ 886,425 Free Cash Flow Margin (A/B) 11.9 % 17.8 % 11.4 % 19.5 % Net cash provided by operating activities (D) $ 188,326 $ 139,537 $ 333,853 $ 261,608 Net cash provided by operating activities margin (D/B) 32.4 % 30.3 % 30.6 % 29.5 % Adjusted Gross Profit and Adjusted Gross Profit Percentage We define Adjusted Gross Profit as gross profit plus depreciation on rental equipment. Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by Revenue. Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP. In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies. Our management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations because it assists in analyzing the performance of our business. The following table provides an unaudited reconciliation of gross profit to Adjusted Gross Profit and Adjusted Gross Profit Percentage. Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2022 2021 2022 2021 Revenue (A) $ 581,642 $ 461,102 $ 1,090,536 $ 886,425 Gross profit (B) $ 308,873 $ 222,810 $ 575,688 $ 436,190 Depreciation of rental equipment 67,176 62,893 129,392 118,591 Adjusted Gross Profit (C) $ 376,049 $ 285,703 $ 705,080 $ 554,781 Gross Profit Percentage (B/A) 53.1 % 48.3 % 52.8 % 49.2 % Adjusted Gross Profit Percentage (C/A) 64.7 % 62.0 % 64.7 % 62.6 % Net CAPEX We define Net CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities. Our management believes that the presentation of Net CAPEX provides useful information to investors regarding the net capital invested into our rental fleet and plant, property and equipment each year to assist in analyzing the performance of our business. The following table provides an unaudited reconciliation of Net CAPEX: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2022 2021 2022 2021 Total purchases of rental equipment and refurbishments $ (130,153 ) $ (65,282 ) $ (225,389 ) $ (117,817 ) Total proceeds from sale of rental equipment 20,526 15,235 35,080 30,437 Net CAPEX for Rental Equipment (109,627 ) (50,047 ) (190,309 ) (87,380 ) Purchase of property, plant and equipment (9,772 ) (10,143 ) (20,253 ) (17,450 ) Proceeds from sale of property, plant and equipment 491 2,709 751 16,438 Net CAPEX $ (118,908 ) $ (57,481 ) $ (209,811 ) $ (88,392 ) Return on Invested Capital Return on Invested Capital is defined as adjusted earnings before interest and amortization divided by net assets. Adjusted earnings before interest and amortization is the sum of income (loss) before income tax expense, net interest (income) expense, amortization adjusted for non-cash items considered non-core to business operations including net currency (gains) losses, goodwill and other impairment charges, restructuring costs, costs to integrate acquired companies, non-cash charges for stock compensation plans, gains and losses resulting from changes in fair value and extinguishment of common stock warrant liabilities, and other discrete expenses, reduced by estimated taxes. Given we are not a significant US taxpayer due to our current tax attributes, we include estimated taxes at our current statutory tax rate of approximately 25%. Net assets is total assets less goodwill, and intangible assets, net and all non-interest bearing liabilities. Denominator is calculated as a five quarter average for annual metrics and two quarter average for quarterly metrics. The Company believes that Return on Invested Capital provides information about the long-term health and profitability of the business relative to the Company's cost of capital. The following table provides an unaudited reconciliation of Return on Invested Capital: Three Months Ended Six Months Ended June 30, June 30, (in thousands) 2022 2021 2022 2021 Total Assets $ 5,978,808 $ 5,559,713 $ 5,978,808 $ 5,559,713 Less: Goodwill (1,171,725 ) (1,180,737 ) (1,171,725 ) (1,180,737 ) Less: Intangible assets, net (446,578 ) (474,327 ) (446,578 ) (474,327 ) Less: Total Liabilities (4,204,858 ) (3,554,300 ) (4,204,858 ) (3,554,300 ) Add: Long Term Debt 3,017,678 2,506,295 3,017,678 2,506,295 Net Assets excluding interest bearing debt and goodwill and intangibles $ 3,173,325 $ 2,856,644 $ 3,173,325 $ 2,856,644 Average Invested Capital (A) $ 3,149,640 $ 2,827,969 $ 3,119,208 $ 2,826,437 Adjusted EBITDA $ 233,335 $ 175,495 $ 425,158 $ 339,080 Less: Depreciation (79,615 ) (78,469 ) (154,793 ) (144,706 ) Adjusted EBITA (B) $ 153,720 $ 97,026 $ 270,365 $ 194,374 Statutory Tax Rate (C) 25 % 25 % 25 % 25 % Estimated Tax (B*C) $ 38,430 $ 24,256 $ 67,591 $ 48,593 Adjusted earnings before interest and amortization (D) $ 115,290 $ 72,770 $ 202,774 $ 145,781 ROIC (D/A), annualized 14.6 % 10.3 % 13.0 % 10.3 % Operating income (E) $ 131,661 $ 70,615 $ 229,570 $ 145,899 Total Assets (F) $ 5,978,808 $ 5,559,713 $ 5,978,808 $ 5,559,713 Operating income / Total Assets (E/F), annualized 8.9 % 5.1 % 7.8 % 5.3 %
