US Navy says it will trial using AI to track Chinese submarines in the Pacific
The plans are part of Aukus Pillar II, a trilateral security arrangement that aims to "help sustain peace and stability in the Indo-Pacific region." MARK SCHIEFELBEIN / GettyThe US, Australia, and the UK will use AI to counter China's growing military assertiveness in the Pacific.The move is part of the Aukus Pillar II alliance between the countries.The US has reported a spike in aggressive behavior by China in the region.The US, UK, and Australia have unveiled new plans to trial the use of AI to track Chinese submarines in the Pacific.Speaking on Friday at a joint meeting in Mountain View, California, defense leaders from each country announced two new plans under Aukus Pillar II, a trilateral security arrangement set up in 2021 that aims to "help sustain peace and stability in the Indo-Pacific region."One of the new efforts announced was the use of advanced AI on patrol aircraft — including the US's P-8A Poseidon aircraft, which is equipped for anti-submarine warfare — to process information from underwater detection devices used by each country. Data processed by AI will enable the three countries to track Chinese submarines with more speed and accuracy."These joint advances will allow for timely high-volume data exploitation, improving our anti-submarine warfare capabilities," they said in a joint statement.The P-8A poseidon maritime patrol and reconnaissance aircraft will be equipped with AI-powered tools to help tackle rising Chinese aggression.MLADEN ANTONOV / GettyAI algorithms and machine learning will also be used to "enhance force protection, precision targeting, and intelligence, surveillance, and reconnaissance."In addition to AI, the three countries said they were collaborating in other technological areas such as quantum technologies, electronic warfare, and hypersonic weapons.Speaking at the press conference, the Australian Deputy Prime Minister Richard Marles said that China's rising aggression had increased the need for collaboration.Just weeks ago a team of Australian naval divers were injured by a Chinese warship's sonar weapon, despite making their presence known to the vessel's crew."This is unsafe and unprofessional conduct," Marles said about the incident, per The Guardian. "The safety and wellbeing of our [Australian Defence Force] personnel continues to be our utmost priority."Australia expects all countries, including China, to operate their militaries in a professional and safe manner," he added.The Pentagon's recent China Military Power Report noted a significant concern "of an operational incident or miscalculation spiraling into crisis or conflict." Read the original article on Business Insider.....»»
Back To 2-And-A-Half Wars?
Back To 2-And-A-Half Wars? Authored by John Mills via The Epoch Times (emphasis ours), A plaque of the Department of Defense seal is seen at the Pentagon in Washington, D.C., on Jan. 26, 2012. (Mandel Ngan/AFP via Getty Images) Commentary An overarching tenet for decades in the American national security planning environment was the ability for the U.S. military to simultaneously conduct two-and-a-half major regional conflicts (MRCs). Translated, this meant that the United States had the military size to generate and project military force for a major conflict in the European area, a major conflict in the Asian area, and a smaller “brushfire” conflict somewhere else. Going back 30 years, the 1993 “Bottom Up Review” was the seminal Department of Defense planning document that defined the beginning of the pivot away from this classic Cold War viewpoint to a new, post-Soviet era one. The budget process descended into decades of arguing that to pay for new systems, force structure had to be diminished. The flip side of the argument was that peacekeeping requirements (Bosnia, Rwanda, etc.), as well as the massive increase in deployment cycles brought on by the War on Terror, prevented the diminishment of the number of military units. This led to an unsolvable impasse on the topic. New systems had a bill that could only be paid by cutting units and military personnel. Units and military personnel couldn’t be cut because of the demands of the deployment cycle. And now the world seems to have descended into a real situation of two-and-a-half conflicts without seeking permission from the force structure planning community. China Threat Re-awakening This National Security Imperative The war in Ukraine drags on, but with some momentum perceptible as Ukrainian forces appear to have established a firm beachhead across the Dnipro River in a drive toward Crimea. After decades of relative peace, now the Middle East is inflamed as Israel strikes into the Gaza Strip to destroy Hamas terrorists while holding additional Iranian-backed proxies in southern Lebanon, Syria, the West Bank, and Houthi missile fire from Yemen in check. Meanwhile, there's the specter of even greater conflict in the possibility of strategic strikes as Iran threatens Israel (and America). In the two-and-a-half MRC calculus, it’s not clear whether these contagions are the “two-and-a-half,” or even possibly the “two-and-a-half-plus,” of the retro MRC worldview. Hamas and the Houthis are proxies for Iran; Iran is a proxy for China. Russia, mired in the death and destruction it created, is a proxy for China. In December 2021, Xi Jinping and Vladimir Putin met virtually, weeks before Russia invaded Ukraine, and agreed to a “no limits” partnership to topple American leadership of the world system. Tensions in the Pacific have increased as China has greatly elevated its military exercises—demonstrations toward Taiwan and the Philippines. The Fiscal Year 2023 National Defense Authorization Act and related appropriations greatly increased American military spending while making numerous declarative statements of support for Taiwan, which has significantly displeased China. Air Force and Navy in the Lead With the upward trajectory of the American defense budget and the existence of an ongoing or building two-and-a-half-plus MRC world whether we like it or not, the question is, what force structure strategy and policy should be in effect? The common outcome of the national security budget debate is what’s called “salami slicing,” where all military services and requirements take equal cuts or equal plus-ups. This is often the normalcy of the defense debate within and between the executive and legislative branches of the U.S. government. With the surging two-and-a-half-plus MRC world, intuitive priorities come to the forefront. The American border should be the first priority, and, beyond that, capabilities and force structure that can project deterrence and, if necessary, war-winning capabilities should receive the highest priorities for a unified joint operational concept. These are more resident in air, naval, space, cyber, and special operations domains, with a special emphasis on artificial intelligence-enabled autonomous systems. The Army and Marines will have a key role in the burgeoning two-and-a-half-plus MRC world, and they need to find where they create the best value as “supporting” services to the primary “supported” services who should be in the lead. The Army has made bold moves toward this in its multi-domain doctrine development, which emphasizes long-range fires, rejuvenated air and missile defense capabilities, and a return to strong operational experience and capabilities in maritime and amphibious operations. The Army and the Marine Corps have similar interests and should work closely together in partnership to develop a larger and more capable maritime transport capability of smaller vessels that complement the Navy’s larger amphibious warfare ship structure and robust special operations capabilities. The Army should retain a world-class armored force capability but ensure it's postured for maximum ability to be in the right place at the right time. The rest of the conventional “Big” Army may have to shrink somewhat to ensure the priorities are properly resourced. Countering Unrestricted Warfare The Chinese Communist Party is achieving some success in its worldwide campaign of unrestricted warfare to include civil-military fusion, Belt and Road influence operations, and pernicious and deadly adjuncts such as fentanyl production in northern Mexico that is introduced into American society on a broad scale in an “Opium War” initiative to destabilize American society. This implies that the American solution must be whole-of-government and inclusive of key strategic partners. The historic challenges of military recruiting and retention need to be addressed in an open and honest dialogue that addresses all core causal factors that can no longer be dismissed. Even the U.S. Coast Guard is achieving a striking inability to deploy ships: It has the budget and equipment, but it doesn’t have the personnel—an extremely perplexing inverse of the world they have lived in for years. The two-and-a-half MRC world is only growing, and the best response is to build the right capabilities to deter the developing storm as fast as possible. Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge. Tyler Durden Fri, 12/01/2023 - 16:20.....»»
Toronto-Dominion (TD) Q4 Earnings Decline on Higher Provisions
Toronto-Dominion (TD) records a rise in adjusted revenues and expenses in the fourth quarter of fiscal 2023. Toronto-Dominion Bank TD reported fiscal fourth-quarter (ended Oct 31) and 2023 results. Quarterly adjusted net income of C$3.51 billion ($2.58 billion) decreased 13.8% from the prior-year quarter.Results were adversely impacted by higher expenses and a rise in provision for credit losses. Nonetheless, a rise in adjusted revenues and a strong balance sheet position acted as tailwinds during the quarter.Net income of C$2.89 billion ($2.13 billion) decreased 56.7% year over year.Adjusted Revenues & Expenses RiseQuarterly adjusted revenues came in at C$13.19 billion ($9.71 billion), increasing 7.7% on a year-over-year basis.Net interest income (NII) declined 1.8% year over year to C$7.49 billion ($5.52 billion). Non-interest income of C$5.63 billion ($4.14 billion) decreased 29.1% year over year.Adjusted non-interest expenses rose 12.6% year over year to C$7.24 billion ($5.33 billion).The adjusted efficiency ratio was 54.9% as of Oct 31, 2023, up from 52.5% recorded in the prior-year period.In the reported quarter, Toronto-Dominion recorded a provision of credit losses of C$878 million ($646.6 million) compared with C$617 million recorded in the year-ago quarter.Balance Sheet SolidTotal assets were C$1.96 trillion ($1.41 trillion) as of Oct 31, 2023, rising 3.7% from the end of the third quarter of fiscal 2023. Net loans rose 3.2% on a sequential basis to C$895.9 billion ($646.68 billion) and deposits increased 3.3% to C$1.20 trillion ($0.86 trillion).Capital Ratios & Profitability Ratio WeakenAs of Oct 31, 2023, the common equity Tier I capital ratio was 14.4%, down from 16.2% as of Oct 31, 2022. The total capital ratio was 18.1% compared with the prior-year quarter's 20.7%.Toronto-Dominion’s return on common equity (on an adjusted basis) was 13%, down from 16% a year ago.Concurrent with the earnings release, TD announced a cash dividend of C$1.02 per share, indicating a sequential rise of 6.3%. The dividend will be paid out on Jan 31, 2024, to shareholders of record as of Jan 10, 2024.Also, in a move to reduce its cost base and achieve greater efficiency, the bank undertook certain measures in the fourth quarter of fiscal 2023. As a result of these measures, it incurred C$363 million of restructuring charges, which primarily relate to employee severance and other personnel-related costs, real estate optimization and asset impairments. In addition, TD is also axing 3% of its full-time equivalent workforce.Management expects to incur additional restructuring charges in the first half of 2024.Our TakeSupported by a diverse geographical presence, Toronto-Dominion’s efforts toward improving revenues and market share, both organically and inorganically, seem impressive. Also, high interest rates will support the company’s financials.Toronto Dominion Bank (The) Price, Consensus and EPS Surprise Toronto Dominion Bank (The) price-consensus-eps-surprise-chart | Toronto Dominion Bank (The) QuoteTD currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other Foreign BanksThe Bank of Nova Scotia BNS reported fiscal fourth-quarter (ended Oct 31) and fiscal 2023 results. Adjusted net income was C$1.67 billion ($1.23 billion), which declined 36% year over year. Results excluded certain one-time items.A rise in expenses, a significant surge in provisions for credit losses and a lower loan balance hurt the results. However, higher non-interest income, net interest income and solid capital ratios were tailwinds.Mitsubishi UFJ Financial Group, Inc. MUFG reported profits attributable to owners of the parent for the first half of fiscal 2024 (ended Sep 30) of ¥927.3 billion ($6.42 billion), up significantly year over year.Increased gross profits, a rise in net fees and commissions and net trading profits acted as tailwinds. Also, a rise in loan and deposit balances was positive. On the flip side, a decline in NII was a dampener. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Toronto Dominion Bank (The) (TD): Free Stock Analysis Report Bank of Nova Scotia (The) (BNS): Free Stock Analysis Report Mitsubishi UFJ Financial Group, Inc. (MUFG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Apellis Pharmaceuticals, Inc. (APLS) Up 9.2% Since Last Earnings Report: Can It Continue?
Apellis Pharmaceuticals, Inc. (APLS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Apellis Pharmaceuticals, Inc. (APLS). Shares have added about 9.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Apellis Pharmaceuticals, Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Apellis’ Q3 Loss Wider Than Expected, Syfovre Drives SalesApellis reported third-quarter 2023 loss of $1.17 per share, which was wider than the Zacks Consensus Estimate of a loss of 84 cents. The company had reported a loss of $1.75 per share in the year-ago quarter.Total revenues amounted to $110.4 million in the third quarter, surpassing the Zacks Consensus Estimate of $101 million. In the year-ago quarter, the company had reported revenues of $22.1 million. The top line jumped almost 400% year over year owing to higher sales of Syfovre (pegcetacoplan injection) in the reported quarter.Quarter in DetailRevenues in the reported quarter included product sales of the marketed drugs — Empaveli (pegcetacoplan) and Syfovre — and licensing and other revenues under the collaboration agreement with Sobi.Syfovre recorded sales of $75.3 million in the third quarter, up around 12% sequentially.Apellis delivered more than 37,000 commercial vials and nearly 10,000 samples of Syfovre to doctors in the third quarter. As of Oct 5, 2023, the total number of vials of the drug delivered since launch was reportedly more than 100,000.Empaveli recorded sales of $23.9 million in the reported quarter, up 35% from the year-ago quarter’s figure owing to the increasing number of patient switches from AstraZeneca’s Ultomiris (ravulizumab).Licensing and other revenues came in at $11.2 million, up 154.5% from the year-ago quarter’s figure.Research and development expenses decreased 16.6% to $79.4 million from the prior-year quarter’s level. This was due to a decrease in contract manufacturing expenses and lower personnel-related as well as other developmental costs.General and administrative expenses totaled $145.6 million, up 85.7% from the year-ago quarter’s figure. This was driven by higher employee-related costs and an increase in professional and consulting fees.As of Sep 30, 2023, Apellis had cash, cash equivalents and marketable securities worth $452.4 million compared with $616.3 million as of Jun 30, 2023. APLS expects its cash balance, combined with cash anticipated to be generated from sales of marketed products as well as Sobi reimbursements, to fund its operations into the second quarter of 2025.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in estimates revision.VGM ScoresAt this time, Apellis Pharmaceuticals, Inc. has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Apellis Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apellis Pharmaceuticals, Inc. (APLS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
Exelixis (EXEL) Up 8.4% Since Last Earnings Report: Can It Continue?
Exelixis (EXEL) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Exelixis (EXEL). Shares have added about 8.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Exelixis due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Exelixis Q3 Earnings and Sales Miss, Annual View UpdatedExelixis reported earnings of 10 cents per share in the third quarter of 2023, missing the Zacks Consensus Estimate of 17 cents and down from 31 cents in the year-ago quarter.Including stock-based compensation expense, earnings per share were breakeven compared with 23 cents per share in the year-ago quarter due to a significant increase in R&D expenses.Net revenues came in at $471.9 million, marginally missing the Zacks Consensus Estimate of $476 million. Revenues were, however, up 14.6% year over year. Quarter in DetailNet product revenues came in at $426.5 million, up 16.4% year over year. The increases in net product revenues were primarily due to a rise in sales volume and the average net selling price.Cabometyx (cabozantinib) generated revenues of $422.2 million and beat the Zacks Consensus Estimate and our model estimate of $416 million and $417.6 million, respectively. The drug is approved for advanced renal cell carcinoma (“RCC”) and previously treated hepatocellular carcinoma (“HCC”). Cometriq generated $4.3 million in net product revenues (cabozantinib capsules) for treating medullary thyroid cancer. Collaboration revenues, comprising license revenues and collaboration services revenues, were $45.4 million in the quarter compared with $45.3 million in the year-ago quarter. In the reported quarter, research and development expenses were $332.6 million, up 67.2% year over year. The significant surge was primarily related to the $80 million up-front payment associated with the in-licensing of XL309, increases in license and other collaboration costs, personnel expenses and manufacturing costs to support development candidates. Selling, general and administrative expenses were $138.1 million, up 20% due to an increase in personnel expenses.In March, Exelixis announced that its board authorized the repurchase of up to $550 million of the company’s common stock before the end of 2023. Under this program, Exelixis repurchased 16.943 million shares of the company’s common stock for a total of $344.8 million as of Sep 30. Litigation UpdateIn July, Exelixis announced that it entered into a settlement and license agreement with Teva Pharmaceuticals. This settlement resolves patent litigation brought by Exelixis in response to Teva’s abbreviated new drug application seeking approval to market a generic version of Cabometyx prior to the expiration of the applicable patents. Per the settlement terms, Exelixis will grant Teva a license to market its generic version of the drug in the United States beginning on Jan 1, 2031, upon the FDA’s approval.Consequently, both companies will terminate the ongoing litigation.Pipeline UpdatesIn August, Exelixis and partner Ipsen announced that the phase III CONTACT-02 pivotal trial met one of two primary endpoints, demonstrating a statistically significant improvement in progression-free survival (“PFS”) at the primary analysis. The study is evaluating cabozantinib in combination with atezolizumab compared with a second novel hormonal therapy (“NHT”) in patients with metastatic castration-resistant prostate cancer and measurable soft-tissue disease who have been previously treated with one NHT. At a prespecified interim analysis for the primary endpoint of overall survival (“OS”), a trend toward improvement of OS was observed, but the data was immature and did not meet the threshold for statistical significance.Therefore, the trial will continue to the next analysis of OS, as planned.Exelixis plans to discuss a potential regulatory submission when the results of the next OS analysis are available based on feedback from the FDA.Detailed results from the late-stage CABINET study evaluating cabozantinib in advanced pancreatic and extra-pancreatic neuroendocrine tumors demonstrated a statistically significant and clinically meaningful improvement in PFS in those patients treated with cabozantinib. Earlier, The Alliance for Clinical Trials in Oncology’s independent Data and Safety Monitoring Board unanimously recommended unblinding and stopping the trial early due to a dramatic improvement in efficacy observed at an interim analysis.In September, Exelixis received global rights to develop and commercialize XL309 from Insilico. The candidate is a potentially best-in-class small-molecule inhibitor of USP1, which has emerged as a synthetic lethal target in the context of BRCA-mutated tumors. Under the terms of the agreement, Insilico granted Exelixis an exclusive, worldwide license to develop and commercialize XL309 and other USP1-targeting compounds in exchange for an upfront payment of $80 million and potential future development and commercial milestone payments, as well as tiered royalties on net sales.2023 Guidance UpdatedRevenues are now projected between $1.825 billion and $1.850 billion compared with the previous estimate of $1.775-$1.875 billion.Product revenues are estimated in the range of $1.625-$1.650 billion compared with the earlier guidance of $1.575-1.675 billion.R&D expenses are now projected between $1.050 billion and $1.075 billion, up from the previous guidance of $1.0-$1.050 billion. How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in estimates review.The consensus estimate has shifted 51.64% due to these changes.VGM ScoresAt this time, Exelixis has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Exelixis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerExelixis belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Deciphera Pharmaceuticals, Inc. (DCPH), has gained 7.4% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.Deciphera Pharmaceuticals, Inc. reported revenues of $43.31 million in the last reported quarter, representing a year-over-year change of +20.4%. EPS of -$0.58 for the same period compares with -$0.55 a year ago.Deciphera Pharmaceuticals, Inc. is expected to post a loss of $0.59 per share for the current quarter, representing a year-over-year change of +1.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.Deciphera Pharmaceuticals, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Exelixis, Inc. (EXEL): Free Stock Analysis Report Deciphera Pharmaceuticals, Inc. (DCPH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»
34 US Military Firearms That Are All-American
The United States military is renowned worldwide not only for its size but for having the largest defense budget of any nation on the planet. They come in at number one in many areas of Global Firepower’s ranking and resume their top position of the most powerful militaries in the world. According to the Office […] The post 34 US Military Firearms That Are All-American appeared first on 24/7 Wall St.. The United States military is renowned worldwide not only for its size but for having the largest defense budget of any nation on the planet. They come in at number one in many areas of Global Firepower’s ranking and resume their top position of the most powerful militaries in the world. According to the Office of Management and Budget, in 2022, the Department of Defense (DOD) spent $766 billion, which is not even at the top of previous expenditures. As a result, a domestic military-industrial complex has grown into a burgeoning industry. Many of the aircraft, vehicles, and small arms that are used in the U.S. armed forces are produced domestically for a number of reasons. The prime one is quality control. (See every combat drone used by the U.S. military.) The Buy American Act of 1933 requires that small arms for the military, as well as other weapons, vessels, and aircraft among others, be produced within the U.S. While there are some weapons that originated outside of the U.S., they are still mostly produced here. A significant amount of small arms produced by the United States are some of the most recognized weapons within the U.S. military. As a result of their longevity, or popularity within U.S. gun culture, many of these weapons have become household names. Accordingly, guns made by Remington or Colt have a place in American military history, and iterations still continue in active service. (Here is every standard issue U.S. military rifle since the American Revolution.) To identify which small arms used by the U.S. military are made in the United States, 24/7 Wall St. reviewed a range of sources, including military handbooks, government press releases, and firearms publications. Data from Military Factory, an online database of military vehicles, aircraft, arms, and more used by militaries across the world, is included on the type of weapon, caliber, maximum range, and year entered service. The list of these American-made weapons ranges from sniper rifles, shotguns, battle rifles, and even mortars. Some of these active-service small arms even reach as far back as the Korean War era. Here’s a look at U.S. military small arms made in the United States: Accuracy International Mk 13 (SOCOM) > Type: Bolt-action sniper rifle > Caliber: .300 Win Mag > Length: 47.4 in > Maximum range: 3,940 ft > Military branches used: Navy, Marines > Year entered service: 2017 Barrett M107 > Type: Anti-material / anti-personnel sniper rifle > Caliber: .50 BMG > Length: 57.1 in > Maximum range: 1,850 ft > Military branches used: Army, Marine Corps, Navy, Air Force, Coast Guard,USSOCOM > Year entered service: 2008 24/7 Wall St. Every Standard Issue US Military Rifle Since the American Revolution Browning M2 > Type: Multi-role heavy machine gun > Caliber: .50 BMG > Length: 61.4 in > Maximum range: 6,550 ft > Military branches used: Army, Air Force, Marine Corps, Navy, Coast Guard > Year entered service: 1921 Colt M16 (Series) > Type: Infantry assault rifle / assault carbine > Caliber: 5.56×45 mm > Length: 39.5 in > Maximum range: 1,800 ft > Military branches used: Marine Corps, U.S. Navy SEALs > Year entered service: 1963 Colt M1911 > Type: Semi-automatic service pistol > Caliber: .45 ACP > Length: 8.3 in > Maximum range: 82 ft > Military branches used: Marine Corps, U.S. Army Special Operations > Year entered service: 1911 Colt M4 > Type: Assault carbine > Caliber: 5.56×45 mm > Length: 33.0 in > Maximum range: 1,640 ft > Military branches used: All branches > Year entered service: 1994 Fabrique Nationale M249 SAW / LMG > Type: Light machine gun / squad support weapon > Caliber: 5.56×45 mm > Length: 40.8 in > Maximum range: 2,600 ft > Military branches used: Army, Navy, Air Force, Marines > Year entered service: 1984 24/7 Wall St. The US Military’s Bombs and Missiles, and How They’re Used in Combat Fabrique Nationale FN SCAR (Mk 16 / Mk 17) > Type: Modular automatic assault rifle > Caliber: 5.56Ã45 mm and 7.62Ã51mm > Length: 13.8 in > Maximum range: 1,980 ft > Military branches used: United States Special Operations Command (USSOCOM) > Year entered service: 2009 Fabrique Nationale M240 > Type: General purpose machine gun / medium machine gun > Caliber: 7.62mm x 51mm > Length: 49.0 in > Maximum range: 5,905 ft > Military branches used: Army, Marine Corps, Air Force, Coast Guard > Year entered service: 1977 GA MSSR (Marine Scout Sniper Rifle) > Type: Semi-automatic sniper rifle / designated marksman rifle > Caliber: 7.62x51mm > Length: 42.3 in > Maximum range: 3,610 ft > Military branches used: Army > Year entered service: 1996 GAU-19 > Type: Gatling gun > Caliber: .50 BMG > Length: 53.9 in > Maximum range: 19,685 ft > Military branches used: Army, Navy > Year entered service: 1983 General Dynamics / Raytheon FIM-92 Stinger > Type: Man-portable, air defense missile system > Caliber: Varied > Length: 59.8 in > Maximum range: 15,750 ft > Military branches used: Army, Marine Corps > Year entered service: 1981 24/7 Wall St. The Biggest US Army Tanks of All Time General Dynamics Mk 47 Striker AGL (Mk 47 Mod 0) > Type: 40mm automatic grenade launcher > Caliber: 40 mm grenades > Length: 37.0 in > Maximum range: 5,600 ft > Military branches used: SOCOM > Year entered service: 2006 General Electric GAU-17/A Minigun > Type: Six barrel gatling gun > Caliber: 7.62mm x 51mm > Length: 31.5 in > Maximum range: 3,280 ft > Military branches used: Army, Air Force, Marine Corps, Navy > Year entered service: 1965 Heckler & Koch HK M27 IAR (Infantry Automatic Rifle) > Type: Squad support / designated marksman weapon > Caliber: 5.56×45 mm > Length: 37.0 in > Maximum range: 1,800 ft > Military branches used: Marine Corps > Year entered service: 2011 M110 SASS (Semi-Automatic Sniper System) > Type: Designated marksman rifle / sniper rifle > Caliber: 7.62x51mm > Length: 40.5 in > Maximum range: 2,624 ft > Military branches used: Amy, Marines, SOCOM > Year entered service: 2007 M120, 120mm Mortar > Type: Towed heavy field mortar > Caliber: 120mm > Length: N/A > Maximum range: 23,750 ft > Military branches used: Army, Marine Corps > Year entered service: 1991 24/7 Wall St. Every US Military Combat Drone M136 Light Anti-Armor Weapon (AT4) > Type: Man-portable, disposable anti-armor rocket launcher > Caliber: 84mm > Length: 40.2 in > Maximum range: 985 ft > Military branches used: Army, Air Force > Year entered service: 1987 M167 Vulcan > Type: Towed / static air defense system > Caliber: 20Ã102mm > Length: 186 in > Maximum range: 14,763 ft > Military branches used: Army, Air Force, Marine Corps, Navy, Coast Guard > Year entered service: 1967 M224, 60mm Mortar > Type: 60mm lightweight mortar > Caliber: 60mm > Length: 41.7 in > Maximum range: 11,447 ft > Military branches used: Army, Marine Corps > Year entered service: 1978 M252, 81 Mortar > Type: Medium weight extended range mortar > Caliber: 81mm > Length: 50.0 in > Maximum range: 18,618 ft > Military branches used: Army, Marine Corps > Year entered service: 1987 M26 (MASS) > Type: Modular accessory shotgun system > Caliber: 12 gauge > Length: 19.7 in > Maximum range: 130 ft > Military branches used: Army > Year entered service: 2003 ALSO READ: How Much US Military Servicemembers Are Paid at Every Pay Grade M39 Enhanced Marksman Rifle (EMR) > Type: Designated marksman rifle / sniper rifle > Caliber: 7.62x51mm > Length: 44.2 in > Maximum range: 2,550 ft > Military branches used: Marines > Year entered service: 2008 MK 20 Mod 0 Sniper Support Rifle > Type: Bolt-action sniper rifle > Caliber: 7.62x51mm > Length: 40.5 in > Maximum range: 1,980 ft > Military branches used: Army > Year entered service: 2004 Mk14 Mod 0 EBR (Enhanced Battle Rifle) > Type: Battle rifle / designated marksman rifle > Caliber: 7.62x51mm > Length: 35.0 in > Maximum range: 1,500 ft > Military branches used: Army, Navy, Coast Guard > Year entered service: 2004 Mossberg Model 590 > Type: Pump-action shotgun > Caliber: 12 gauge > Length: 18.5 in > Maximum range: 130 ft > Military branches used: Army, Navy, Air Force, Marines > Year entered service: 1975 Raytheon . Lockheed Martin FGM-148 Javelin > Type: Anti-tank guided missile launcher > Caliber: 127mm explosive > Length: 47.0 in > Maximum range: 8,202 ft > Military branches used: Army, Marines > Year entered service: 1996 ALSO READ: Every Standard Issue US Military Rifle Since the American Revolution Remington M2010 ESR (Enhanced Sniper Rifle) > Type: Bolt-action sniper rifle > Caliber: .300 Win Mag > Length: 46.5 in > Maximum range: 3,935 ft > Military branches used: N/A > Year entered service: 2011 Remington M24 SWS (Sniper Weapon System) > Type: Bolt-action sniper rifle > Caliber: 7.62x51mm > Length: 43.0 in > Maximum range: 2,624 ft > Military branches used: Army, Air Force, USSOCOM > Year entered service: 1987 Remington Model 870 > Type: Pump-action shotgun > Caliber: 12 gauge > Length: 50.4 in > Maximum range: 140 ft > Military branches used: Army, Marine Corps, Navy, Coast Guard > Year entered service: 1950 Remington MSR (Modular Sniper Rifle) > Type: Remington MSR (modular sniper rifle) > Caliber: 7.62Ã51 mm, .300 Norma Magnum, and .338 Norma Magnum > Length: 47.2 in > Maximum range: 4,920 ft > Military branches used: Army, SOCOM > Year entered service: 2013 Saco M60 > Type: General purpose machine gun > Caliber: 7.62mm x 51mm > Length: 43.5 in > Maximum range: 3,280 ft > Military branches used: Army, Marine Corps, Navy, Air Force, Coast Guard, USSOCOM > Year entered service: 1957 24/7 Wall St. The US Military’s Bombs and Missiles, and How They’re Used in Combat Saco Mk19 > Type: 40mm automatic grenade launcher > Caliber: 40 mm grenades > Length: 43.1 in > Maximum range: 4,500 ft > Military branches used: Army, Air Force, Marine Corps, Navy > Year entered service: 1967 Sponsored: Want to Retire Early? 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Patterson Companies, Inc. (NASDAQ:PDCO) Q2 2024 Earnings Call Transcript
Patterson Companies, Inc. (NASDAQ:PDCO) Q2 2024 Earnings Call Transcript November 29, 2023 Patterson Companies, Inc. misses on earnings expectations. Reported EPS is $0.5 EPS, expectations were $0.59. Operator: Thank you for standing by, and welcome to the Patterson Companies, Inc. Second Quarter Fiscal 2024 Earnings Conference Call. I would now like to welcome John Wright, […] Patterson Companies, Inc. (NASDAQ:PDCO) Q2 2024 Earnings Call Transcript November 29, 2023 Patterson Companies, Inc. misses on earnings expectations. Reported EPS is $0.5 EPS, expectations were $0.59. Operator: Thank you for standing by, and welcome to the Patterson Companies, Inc. Second Quarter Fiscal 2024 Earnings Conference Call. I would now like to welcome John Wright, VP of Investor Relations, to begin the call. John, over to you. John Wright: Thank you, operator. Good morning, everyone. And thank you for participating in Patterson Companies fiscal 2024 second quarter conference call. Joining me today are Patterson President and Chief Executive Officer, Don Zurbay; and Patterson Chief Financial Officer, Kevin Barry. After a review of our results and outlook by management, we will open the line to your questions. Before we begin, let me remind you that certain comments made during this conference call are forward-looking in nature and subject to certain risks and uncertainties. These factors, which could cause actual results to materially differ from those indicated in such forward-looking statements, are discussed in detail in our Form 10-K and our other filings with the Securities and Exchange Commission. We encourage you to review this material. In addition, comments about the markets we serve, including growth rates and market shares, are based upon the company’s internal analysis and estimates. The content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, November 29, 2023. Patterson undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Also, a financial slide presentation can be found in the Investor Relations section of our Web site at pattersoncompanies.com. Please note that in this morning’s conference call, we will reference our adjusted results for the second quarter of fiscal 2024. The reconciliation tables in our press release are provided to adjust various reported GAAP measures for the impact of deal amortization and an interest rate swap along with any related tax effect of these items. We will also discuss free cash flow as defined in our earnings release, which is a non-GAAP measure and use the term internal sales to represent net sales adjusted to exclude the impact of foreign currency, contributions from recent acquisitions and the net impact of an interest rate swap. These non-GAAP measures are not intended to be a substitute for our GAAP results. This call is being recorded and will be available for replay starting today at 10:00 a.m. Central Time for a period of one week. Now I’d like to hand the call over to Don Zurbay. Don Zurbay: Thanks, John, and welcome, everyone, to Patterson’s Fiscal 2024 second quarter conference call. I will begin my remarks today with highlights of our consolidated results before providing more details on the performance of each of our segments. Our team executed well against the evolving backdrop of macroeconomic uncertainty and other industry factors that had varied impacts on discrete categories within our Dental and Animal Health segments. I’ll start with key highlights and strong performance in the quarter. In the Dental segment, Patterson’s broad and resilient consumables portfolio enabled us to deliver sales growth above market growth amidst steady patient demand. And our core equipment category delivered solid year-over-year growth despite a tough comparison to last year’s strong second quarter performance. In Animal Health, our market leading production animal business achieved strong sales growth primarily due to the leading omnichannel presence that Patterson has built to best serve producers. And in both of our business segments, our value added services categories, including our software offerings, achieved significant growth that outpaced overall sales and sales within the Dental and Animal Health segments. Offsetting these results, we experienced softer than expected demand in two areas of our business. Macroeconomic conditions impacted our performance in the high tech dental equipment categories, and our companion animal business was impacted by a decline in vet clinic visits and spending. Ultimately, we delivered second quarter adjusted EPS of $0.50. We also returned $86 million in capital to shareholders through our dividend and share repurchases. Looking forward, we believe that macroeconomic and industry challenges are likely to persist for the duration of our fiscal year. We, therefore, have adjusted our fiscal 2024 guidance to reflect our revised expectations for the year. We now expect to deliver adjusted earnings in the range of $2.35 to $2.45 per diluted share, a decline of 4% at the midpoint of our previous range. We remain focused on executing against our proven strategy, which, as a reminder, is designed to achieve four core objectives; first, drive revenue growth above the current end market growth rates; second, build upon the progress we’ve made to enhance our margin performance; third, evolve our products, channels and services to best serve the customers in our end markets; and fourth, improve efficiency and optimization. Despite a more challenging macroeconomic environment during the second quarter, we continued investing across our business in service of our long term strategic objectives. This includes investments in our distribution capabilities, software offerings and value added services to further differentiate Patterson as a partner of choice for our customers. We are focused on managing Patterson for the long term because we are confident in the strength and resilience of our end markets and in Patterson’s ability to perform for our customers and our shareholders. I’d like to touch on some of the targeted investments we made during the second quarter that we expect will drive our efficiency and optimization over the long term. First, we recently completed the expansion of a distribution facility dedicated to our Dental business in Canada. We believe the expanded facility in Montreal will enhance our ability to serve customers on the east side of the country and add state of the art features that will drive efficiencies. Second, we successfully completed the implementation of our ERP system in Canada. This is an important milestone in our ERP rollout, connecting our US and Canada operations to provide greater visibility across our North American operations to drive meaningful efficiencies. And finally, Patterson also continued to invest behind our robust suite of software solutions in both our Dental and Animal Health segments. As we’ve discussed previously, we believe the opportunity for growth within software is meaningful. And we’re investing to build upon our strong foundation, add to our capabilities and address evolving customer preferences. In our fiscal 2024 second quarter, we added technical personnel and other resources to our Dental software team and are pleased with the progress we have made toward an even stronger offering and customer experience. We’re building a track record and driving returns from our strategic investments, and we expect that performance to continue. For example, last year, Patterson completed acquisitions of Dairy Tech and RSVP and ACT. Today, those businesses are performing even better than our expectations. The Dairy Tech owned brand is a positive margin contributor in our production animal business and the RSVP platform for veterinarian staffing is solving today’s most critical challenge for our animal health customers. And to meet that demand, we continue to expand RSVP to serve more of Patterson’s customers. As we move through the second half of fiscal ’24, we plan to continue to balance our investment strategy with cost discipline to calibrate our expenses appropriately within the macroeconomic environment. I am proud of the Patterson team and the way we are navigating a dynamic macroeconomic environment to deliver value for our customers and our shareholders. We continue to believe that the strength of our team, the resiliency of the Dental and Animal Health end markets and our comprehensive value proposition make Patterson well positioned to drive enhanced growth, profitability and value creation over the long term. Now I’ll provide more detail on the performance of each of our two business segments during the fiscal second quarter. Let’s start with Dental. In the second quarter, Dental segment internal sales declined 0.2% year-over-year. As I mentioned, our consumables category performed very well in the quarter with 3% internal sales growth, including the negative deflationary impact of certain infection control product prices. Excluding those infection control products, we saw a nearly 5% sales growth. We attribute this strong performance to a few key factors; first, steady patient traffic for standard dentistry; second, our long-term consistent commitment to strengthening our relationships with our customers; third, our broad and resilient Dental consumables portfolio, including an expansive suite of private label products, which targets our customer base; and finally, the strong execution by our team. Taken together, these factors enabled Patterson to perform well in the consumables category and insulated us from macroeconomic headwinds that caused some patients to postpone specialty procedures. On the Dental equipment side, internal sales declined 6% year-over-year. Patterson achieved continued growth in core equipment during the quarter, even on top of last year’s strong growth. However, this growth was more than offset by declining sales of high tech equipment during the quarter. Our digital and CAD/CAM businesses faced industry headwinds from the broader economic environment as well as lengthening upgrade cycles and continued pricing pressure. Moving forward, we are encouraged by the fact that our manufacturing partners have indicated long term plans to invest and innovate in these important product categories. This is a testament to the continued long term demand for these types of products. And when there’s new innovation, Patterson has a leading capability to sell, finance, install and service all Dental equipment. And finally, Dental internal sales in our value added services category increased approximately 3% over the prior year period. Value added services represent the entire suite of offerings we provide to our customers that enhance the customer experience, drive loyalty and help make Patterson an indispensable partner to their practice. Dental value added services continued to grow at a pace exceeding the rate of the Dental segment sales overall and remain a key strategic focus and significant growth opportunity for Patterson. We are dedicated to continuously deepening Patterson’s Dental value position and positioning ourselves for continued success in a healthy and attractive market that is supported by enduring trends, including an aging population, a drive towards practice modernization and heightened awareness of the link between oral health and overall health. We remain confident in our team’s ability to effectively navigate ongoing macroeconomic and industry challenges and achieve our long term goals. Now let’s move on to our Animal Health segment. During the second quarter, Patterson’s Animal Health segment internal sales increased 0.2% year-over-year. Even in environment of modest growth, we’re seeing evidence that Patterson’s deep and broad value proposition across species and multiple channels continues to be a driver of our success. In companion animal, our internal sales declined by low single digits as veterinary clinic business decreased and spending moderated. As I mentioned, we attribute this decrease to moderation in the companion animal industry [hastened] by a tough economic climate for consumers navigating inflation and other challenges. However, it’s important to put this quarter into broader context of the long term health of this end market. As we look ahead, we expect this market as a whole to grow in the low single digits over the long term, supported by positive long term trends in pet parenting. On the production animal side, second quarter internal sales grew by mid single digits. A strong performance in production reaffirms the strength of our omnichannel presence, highly tailored distribution strategy and comprehensive offering across animal species. Those strategies executed by our talented and tenured team enabled us to continue to win new business and outperform the broader production animal market. Secondarily, our performance also benefited because of the more historical timing of the annual fall run and movement of cattle to feed yards. Across the Animal Health segment, our value added services category grew rapidly due to increased demand for our software solutions and equipment services, as well as new programs to drive revenue and operational efficiency in freight. We’re also confident that the opportunity for continued growth within software remains significant, and we continue to invest in existing solutions to better leverage our strong foundation, add to our capabilities and address evolving customer preferences. Now I’ll turn the call over to Kevin Barry to provide more detail on our financial results. Kevin Barry: Thank you, Don, and good morning, everyone. In my prepared remarks this morning, I will cover the financial results for our second quarter of fiscal ’24, which ended on October 28, 2023 and then conclude with our outlook for the remainder of the fiscal year. So let’s begin by covering the results for our second quarter of fiscal ’24. Consolidated reported sales for Patterson Companies in our fiscal ’24 second quarter were $1.65 billion, an increase of 1.6% over the second quarter of one year ago. Internal sales, which are adjusted for the effects of currency translation, contributions from recent acquisitions and the net impact of an interest rate swap increased 1% compared to the same period last year. Gross margin for the second quarter of fiscal ’24 was 20.5%, an increase of 30 basis points compared to the prior year period. Beginning with our fiscal ’24 second quarter, we have also provided adjusted gross margin, which is a non-GAAP financial measure that adjusts gross margin for the impact of the mark to market accounting related to our equipment financing portfolio and the associated interest rate swap hedging instruments. We will provide this additional non-GAAP financial measure going forward as it adjusts for the impact of interest rate fluctuations net of the mark to market swap adjustment within the P&L. In particular, this adjustment classifies the gain or loss on the interest rate swap from other income expense to net sales to align the swap impact with the impact on customer financing net sales. Remember, the accounting impact of the mark to market adjustment impacts our total company gross margin but not the gross margin within our business segment. And as before, the net impact of interest rate fluctuations between the swap and the equipment financing portfolio has a minimal impact on net income. For the second quarter of fiscal ’24, our adjusted gross margin was 20.6% compared to 20.8% in the year ago period. We provided these comparative numbers for the second quarter and on a year-to-date basis, and we have included reconciliations for the first quarter in today’s press release. Importantly, during the second quarter of fiscal ’24, both of our business units posted a year-over-year increase to their respective gross margins compared to the prior year period. The initiatives we have put in place to improve gross margin, working more closely with strategic vendors who reward us for our sales performance, drive improved mix, exercise expense discipline and leverage our cost structure, have translated into improved gross margins for both of our business units. Adjusted operating expenses as a percentage of net sales for the second quarter of fiscal ’24 were 16.5% and unfavorable by 70 basis points compared to the second quarter of fiscal ’23. In the second quarter of fiscal ’24, our consolidated adjusted operating margin was 4.2%, a decrease of 80 basis points compared to the second quarter of last year. Note that our adjusted operating margin now includes the impact of the interest rate swap adjustment mentioned previously. In the second half of fiscal ’24, we plan to continue to effectively manage our expenses, while executing on the margin initiatives that have been yielding results within our business segments and for the company overall. Our adjusted tax rate for the second quarter of fiscal ’24 was 25.1%, an increase of 90 basis points compared to the prior year period. Reported net income attributable to Patterson Companies, Inc. for the second quarter of fiscal ’24 was $40 million or $0.42 per diluted share. This compares to reported net income in the second quarter of last year of $54.1 million or $0.55 per diluted share. Adjusted net income attributable to Patterson Companies, Inc. in the second quarter of fiscal ’24 was $47.3 million or $0.50 per diluted share. This compares to $61.2 million or $0.63 per diluted share in the second quarter of fiscal ’23. This decrease in adjusted earnings per diluted share for the fiscal second quarter was primarily due to lower sales of Dental high technology equipment and increased operating expenses compared to the prior year period. Now let’s turn to our business segments, starting with the Dental business. In the second quarter of fiscal ’24, internal sales for our Dental business decreased 0.2% compared to the second quarter of fiscal ’23. Internal sales of Dental consumables in the fiscal second quarter increased 2.9% compared to one year ago despite being impacted by continued price deflation of certain infection control products. Internal sales of non-infection control products increased 4.7% in the second quarter of fiscal ’24 compared to the year ago period. This negative impact from infection control product deflation has steadily moderated over the past year and we expect the year-over-year deflationary effect to continue moderating and fully normalize at the end of fiscal year ’24. In the second quarter of fiscal ’24, internal sales of Dental equipment decreased 6.3% compared to one year ago. This quarter, core equipment posted positive growth that was more than offset by a decline in the digital X-ray and CAD/CAM product category as compared to the prior year period. We believe the year-over-year decline in these two categories was the result of macroeconomic concerns on some equipment purchasing decisions as well as selling price declines within the imaging categories. Internal sales of value added services in the second quarter of fiscal ’24 increased 3.1% over the prior year period led by the continued growth of our software business and increased year-over-year contribution from our technical service team. Value added services, including our software offerings, represent the entire suite of offerings we provide to our customers that help make us an indispensable partner to their practice and these valuable offerings are also mix favorable to our P&L. The adjusted operating margin in Dental was 9.4% in the second quarter of fiscal ’24, which represents an 80 basis point decrease over the prior year period. While gross margins in the Dental business for the second quarter of fiscal ’24 improved year-over-year, increased operating expenses related to our SAP implementation and warehouse expansion in Canada along with investments in our software and technical service business drove the unfavorability in adjusted operating margin on a year-over-year basis. Now let’s move to our Animal Health segment. In the second quarter of fiscal ’24, internal sales for our Animal Health business increased 0.2% compared to the second quarter of fiscal ’23. Internal sales for our companion animal business in the second quarter of fiscal ’24 decreased 3.6% over the prior year period. Strong sales performance from our NVS business in the UK was more than offset by declines in the US companion animal business. Internal sales for our production animal business in the fiscal second quarter increased 4.1% in the quarter compared to the prior year period. Our production animal team continues to execute well in the market and our omnichannel approach across several species continues to pay off with sales growth above the overall market. The adjusted operating margin in our Animal Health segment was 3.6% in the fiscal ’24 second quarter, a decrease of 20 basis points from the prior year period. Gross margins in our Animal Health segment were up in the fiscal ’24 second quarter and an increase in operating expenses on a year-over-year basis drove the operating margin decrease compared to the second quarter of fiscal ’23. Now let me cover cash flow and balance sheet items. During the first six months of fiscal ’24, our free cash flow improved by $28.0 million compared to the same period one year ago. This was primarily due to a decreased level of working capital in the first sixmonths of fiscal ’24 compared to the year ago period. Turning now to capital allocation. Our capital spending in the first 6 months of fiscal ’24 was $33.5 million and $6.7 million higher than the first six months of fiscal ’23. This increased spending reflects the investments we are making in our distribution capabilities as well as software and value added services. We continue to execute on our strategy to return cash to our shareholders. In the first quarter of fiscal ’24, we declared a quarterly cash dividend of $0.26 per diluted share, which was then paid at the beginning of the second quarter of fiscal ’24. We also repurchased approximately $61 million of shares during the second quarter of fiscal ’24, thereby returning a total of $85.9 million to shareholders through dividends and share repurchases. Let me conclude with our outlook for the remainder of fiscal ’24. Today, we are revising our fiscal ’24 GAAP earnings guidance to a range of $2.04 to $2.14 per diluted share and our adjusted earnings guidance range to $2.35 to $2.45 per diluted share. We have made these revisions to our GAAP and adjusted earnings per share guidance to account for the macroeconomic environment and uncertainty that we believe will persist for the remainder of our fiscal ’24 year. Now I will turn the call back over to Don for some additional comments. Don Zurbay: Thanks, Kevin. Before we open it up for Q&A, I want to thank the entire Patterson team for their continued hard work and commitment to our strategy serving our customers. Looking forward, the macroeconomic challenges we experienced during the second quarter do not change our strategic objectives or confidence in the health and attractiveness of our end markets. We continue to believe that Patterson is well positioned to drive enhanced growth, profitability and value creation as we execute our strategy over the long term. That concludes our prepared remarks. Kevin and I will be glad to take questions. Operator, please open the line. Operator: [Operator Instructions] Our first question comes from the line of Brandon Vazquez with William Blair. See also 25 States With Highest Tourism Revenue in the US and 12 Best Quality Stocks To Buy Now. Q&A Session Follow Patterson Companies Inc. (NASDAQ:PDCO) Follow Patterson Companies Inc. (NASDAQ:PDCO) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Brandon Vazquez: Maybe just to start, there’s a lot of moving pieces on the macro side, kind of hard for us to see through it all, but you guys have a good exposure in both Dental and Animal Health. So maybe as you look at your updated guidance, can you talk a little bit about what is assumed in kind of the end markets for both of those segments for the rest of the year? Don Zurbay: So I think if you kind of break things down a little bit, our consumables business on the Dental side, as you could see, we had another strong quarter. So we expect that trend to continue. On the equipment side, that’s kind of where we’re talking about the guidance revision is really the equipment, specifically the high tech equipment. We’re expecting that market to be somewhat soft as we go through the rest of our fiscal year or the second half. And then on the Animal Health side, another really strong performance in our production business, and there’s a lot of good reasons for that, that are sustainable. So that business, we’d expect to benefit from that. And then on the companion side, we saw a little bit of a slowdown in visits and spend. Again, we think that’s a bit of an enduring dynamic as we go through the rest of the year. Think if you kind of peel back from that, we’re talking about and putting into place some cost actions to help ourselves in the back half of the year. And some of the disruption in the industry that everyone’s been focused on will get us some benefit as well. So when you kind of put all that in the hopper that got us back to a $0.10 reduction in the guidance as we move through the back half. Brandon Vazquez: And then maybe as a follow-up, kind of staying on equipment is first just clarifying, it sounds like in the past, we’ve talked about equipment a lot being lumpy. You might have a down quarter, then up double digits quarter, but this seems like it’s different, this might be a little bit more sustained decline through the rest of the year. So just clarifying that. And then any — you guys have a unique view on financing a lot of this equipment. Any notable kind of read throughs that you would make to the financing of the equipment business or delinquencies changing? Is it just higher interest rates are making people less willing to finance? Anything you could call out there? Don Zurbay: And maybe I’ll take the first question and kick it over to Kevin for the next. I think the dynamics in the equipment business for us, it was a little bit different. It’s lumpy, as you know, and we’ve said that repeatedly, hard to really take trends from one month, even three months. I think in this case, it was particularly interesting because a lot of the slowdown really happened right at the end of the quarter, which is what we would talk about in terms of the miss for the quarter on our expectations was really driven late in the quarter, which is, as you can imagine, harder to mitigate. But if you take the longer view on the year, that’s where we think, okay, this is the dynamic we saw. We’re going to be obviously monitoring that as we go through Q3 to see how much of that was really just timing versus slowdown and then with some cost actions and then that sort of thing, we’re going to — the plan is to help mitigate that. And then maybe I’ll let Kevin answer the question on the financing. Kevin Barry: So like Don said, within the quarter here, we did see growth in our core equipment. And the declines that offset it were really in the 2D and 3D imaging and CAD/CAM spaces, and those are pressured. We saw some unit demand pressure as well as continuing price pressure in the market, some downward ASP pressure that hit that. And from a financing standpoint, you’re right, we do in-house financing and it really is mostly directed towards those categories. So that’s most of the stuff that we finance. And we’re working internally and we’ve obviously raised our interest rates as the overall external market’s gone up. But we’re looking internally and working with our manufacturers on promotional strategies to keep driving demand in those categories as we go through the year, and financing is certainly a lever that we’d be looking at. Operator: Our next question comes from the line of Jon Block with Stifel. Jon Block: Don, just for the guidance, you missed the quarter by roughly $0.08 relative to consensus. So you lowered by $0.10 for the full year. So the back part is sort of unchanged and I know that can be a little bit difficult to tease out because you guys don’t guide specifically by quarter. You’re saying you expect the macro to remain challenging. I guess where I’m going with this is it would seem that the full year would come down by more because, again, the quarter miss was almost a full $0.10. So maybe you could just talk to that, like what do you — what are you building in with anything as a buffer? And maybe what I’m trying to get at, are there any tailwinds from Henry Schein share gains in there that would be offsetting, call it, a weaker core as we work our way throughout fiscal ’24?.....»»
The Bank of Nova Scotia (NYSE:BNS) Q4 2023 Earnings Call Transcript
The Bank of Nova Scotia (NYSE:BNS) Q4 2023 Earnings Call Transcript November 28, 2023 The Bank of Nova Scotia misses on earnings expectations. Reported EPS is $0.93 EPS, expectations were $1.19. John McCartney: Good morning, and welcome to Scotiabank’s 2023 Fourth Quarter Results Presentation. My name is John McCartney, and I am Head of Investor […] The Bank of Nova Scotia (NYSE:BNS) Q4 2023 Earnings Call Transcript November 28, 2023 The Bank of Nova Scotia misses on earnings expectations. Reported EPS is $0.93 EPS, expectations were $1.19. John McCartney: Good morning, and welcome to Scotiabank’s 2023 Fourth Quarter Results Presentation. My name is John McCartney, and I am Head of Investor Relations here at Scotiabank. Presenting to you this morning are Scott Thomson, Scotiabank’s President and Chief Executive Officer; Raj Viswanathan, our Chief Financial Officer; and Phil Thomas, our Chief Risk Officer. Following our comments, we will be glad to take your questions. Also present to take questions are the following Scotiabank Executives: Aris Bogdaneris from Canadian Banking; Glen Gowland from Global Wealth Management; Francisco Aristeguieta from International Banking; and Jake Lawrence from Global Banking and Markets. Before we start, and on behalf of those speaking today, I’ll refer you to Slide 2 of our presentation, which contains Scotiabank’s caution regarding forward-looking statements. With that, I will turn the call over to Scott. Scott Thomson: Thank you, John, and good morning, everyone. This month marks the completion of my first year in this role as President. I’m pleased to have had the opportunity to spend the year listening to and learning from our shareholders, clients and employees. I have seen personally the passion and commitment that Scotiabankers across the footprint have to making us a better bank. Our results for the year reflect a period of decelerating industry loan growth as well as our own deliberate actions to focus on balanced growth, and a thoughtful approach to improving the profitability of our businesses and client relationships. We’ve made significant progress on key initiatives that are fundamental to strengthening our balance sheet and improving our business mix. Both will be important as we embark on our next phase of growth. The Bank reported adjusted earnings of $8.4 billion or $6.54 per share in fiscal 2023. Our return on equity was 11.7%. We believe our improved balance sheet strength and liquidity positions us to manage through potentially a more difficult economic scenario that could materialize. We took actions to strengthen our capital position to meet my January 2023 commitment to a CET1 ratio of greater than 12%, up from a 11.5% at this time last year. Raj will explain in more detail the impact of the regulatory capital changes, which began in Q2 and will continue to impact us in the future. We also bolstered liquidity over the course of the year, meaningfully improving the liquidity coverage ratio to 136%, up from 119%, and the net stable funding ratio from 111% to 116%. Importantly, we made progress focusing the organization on deposits. Deposits across the Bank increased 9% year-over-year. The all bank loan-to-deposit ratio improved to 110% from 116%, resulting in the wholesale funding ratio dropping 100 basis points year-over-year to 20.6%. 2023 reflects early success in our enterprise-wide focus on thoughtfully growing both sides of the balance sheet. In keeping with our commitment to ensure the Bank is well positioned to manage through periods of slow growth and uncertain macroeconomic times, we have significantly increased the allowances for credit losses throughout the year across all portfolios by approximately $1.1 billion, mostly in performing allowances. As previously announced, in conjunction with our strategy review process, we made adjustments to our global workforce in the fourth quarter. This productivity effort reflects a continuation of the Bank’s long-term commitment to achieving positive operating leverage, while ensuring the appropriate resource allocation in support of our future growth initiatives. Turning to our economic outlook, our base case assumption is that economic growth will continue to moderate in the near-term in North America. Higher interest rates are having central bank’s desired economic impact which we are seeing through moderating inflation and our own clients’ behavior. Recognizing that rates could remain elevated for the foreseeable future, we do expect some interest rate easing in North America later next year, which will be a tailwind to our profitability. Our international banking markets experienced more notable impacts of higher rates given an earlier and more rapid tightening response to inflationary cycle. Chile and Peru are currently in the midst of modest economic contractions, and have seen central bank easing this past quarter. Economic growth is expected to rebound in the region later next year. Mexico has consistently seen GDP growth beyond expectations, currently forecast to deliver 3.5% growth this year and 3%-plus growth again next year, significantly outpacing the sub-1% growth expected for Canada and the U.S. We expect consumer spending to moderate as this higher rate environment persists, leading to the very modest growth in our Canadian economic forecast. Our current balance sheet strength, structural interest rate positioning and deliberate approach to loan growth reflect our cautious near-term outlook. We look forward to sharing detailed business line strategic plans with you at our upcoming Investor Day, so I’ll be brief today with a few updates on each business. In Canadian Banking, the performing ACL build materially impacted our profitability in Q4. However, I was encouraged by progress in certain key operating performance metrics. Deposits, up 10% year-over-year in Q4, outpaced loan growth in the Canadian bank for the fourth consecutive quarter, resulting in notable early progress on reducing our loan-to-deposit ratio, which moved from 138% to 125% over the course of the year. Solid net interest margin expansion of 21 basis points benefiting from higher deposit growth, loans repricing at higher rates, and business mix changes driven by more balanced loan growth across products. In retail, growth in the Scene+ loyalty program continues to outpace expectations, surpassing 14 million members this quarter. The program continues to accelerate as a strong customer growth engine responsible for over half our new to bank customers in the recent quarter. New day-to-day account acquisition is up 6% year-over-year, aligned to our commitment to grow everyday banking relationships. Tangerine delivered another year of strong earnings, a result of its strong deposit position and continues to widen its lead as J.D. Power’s number one ranked bank in its class for retail banking client satisfaction for the 12th year in a row. Global Wealth results this quarter reflect the impact of more challenged market performance in recent months, and the resulting impact on investment industry fund flows, which have been negative throughout 2023. We continue to broaden what is already a very robust product offering with the announcement last month of a new alternative asset partnership with Sun Life to bring a more complete offering of private credit, real estate and infrastructure products to our high-net-worth clients. We have a differentiated wealth offering in Canada through our total wealth advice model and a unique international opportunity that our team is delivering on. Our international wealth management business delivered double-digit earnings growth again this year. Our Global Banking and Markets business has delivered resilient results in a challenging year for capital markets businesses while continuing to add product capabilities and sectorial advisory expertise. Loan growth has moderated considerably in recent quarters as our GBM team continues to take a more targeted approach to client selection with a focus on industries and geographies where we can deliver higher returns and more multi-product value-add to our clients. We continue to target deeper client relationships and leverage our footprint to grow our business. International Banking had a solid 2023. Results were negatively impacted by higher PCLs and moderating capital markets activity, offset somewhat by encouraging margin expansion and continued momentum in our deposit-strong Caribbean franchise. Deposit growth in Q4 continued, up 3% quarter-over-quarter and 9% year-over-year. This, combined with a more disciplined approach to loan growth, has seen our loan-to-deposit ratio improve from 140% to 129%. Despite inflationary pressures, International Banking held expense growth to a modest 3% on a constant dollar basis for the year, as a result of continuous efforts to rationalize our operations and further digitize the Bank. International Banking continued to deliver positive operating leverage. Our 2023 financial results reflect a year of transition; economic transition in the markets in which we operate and transition within the Bank as we prepare for our next phase of growth. We are seeing early signs of progress across the Bank on the strategic priorities previously outlined that will lead us to more consistent earnings growth over time, more specifically: client primacy, earning a greater share of the client wallet with a focus beyond the balance sheet; disciplined capital allocation, managing resources with a view to value over volume; and operational excellence, a continuous focus on productivity, process simplification and a relentless effort to build a culture that will give us competitive advantage better, faster, and at a lower cost. All underpinned by a strong balance sheet, ample liquidity and appropriate allowances for credit losses. I’m encouraged by the franchise strength across our businesses. We are recognized again this year by The Banker magazine with both the Bank of the Year in Canada Award, and the Global Award for Banking in the Community, recognizing our ScotiaRISE Program and the positive impact it is having in our communities. The Bank is also a recognized leader for our commitment to fostering a more sustainable and inclusive future for our stakeholders. We were recognized by Global Finance with five awards for Leadership in Sustainable Finance, including Global Leadership in Sustainability Transparency and Best Bank for Sustainable Finance in Canada. And, we continue to build on our position as an employer of choice. This year, we were recognized as one of the best workplaces in Canada by Great Places to Work, and we are once again included in the Bloomberg Gender-Equality Index for a sixth consecutive year. Going forward, as we focus on execution of our strategy and a cohesive enterprise-wide mindset to meeting the needs of our clients, we’ve also made important senior leadership additions to the Bank. I’m confident in the strengthened leadership team as we focus on the future and our plans to deliver sustainable, profitable growth for our shareholders. I would like to sincerely thank Glen Gowland for his contribution since joining the Bank over 20 years ago. I am delighted that we will continue to benefit from his expertise as he transitions to the role of Vice Chair, reporting directly to me. As previously announced, Jacqui Allard will assume the role of Group Head, Global Wealth Management on December 1st this year. I realize 2023 has been a difficult year financially, but the actions taken have been decisive, deliberate and necessary. A strong balance sheet, a relentless focus on becoming more efficient and appropriate allowances will set the Bank up for success going forward. As I look to 2024, I’m confident earnings will increase, driven by benefits from the productivity initiatives and a more stable rate environment. We look forward to sharing our new strategy at our Investor Day on December 13. With that, I will turn the call over to Raj for a detailed financial review of our results. Raj Viswanathan: Thank you, Scott, and good morning, everyone. This quarter’s net income was impacted by adjusting items of $289 million after-tax or $0.24 of earnings per share, and about 6 basis points on the common equity Tier 1 ratio, all of which were recorded in the Other segment. This consisted of a $258 million restructuring charge relating to workforce reductions, a $63 million charge related to the exit of certain real estate and service contracts, a $159 million impairment charge to the Bank’s investment in Bank of Xi’an, a $114 million impairment of certain software. These were partly offset by a $319 million gain from the sale of the Bank’s 20% equity interest in Canadian Tire Financial Services. The full year results were also impacted by the $579 million Canada Recovery Dividend recorded in Q1 2023. All my comments that follow will be after adjusting for these items, and the usual acquisition-related costs on a year-over-year basis, unless specified otherwise. Starting on Slide 5 on fiscal 2023 performance. The Bank ended the year with adjusted diluted earnings per share of $6.54, and a return on equity of 11.7%. Revenue was up 1%, and expenses increased 9%, resulting in negative operating leverage of 8.3% for the year. Provision for credit losses were $3.4 billion in 2023, approximately $2 billion higher, of which over $1 billion was performing allowance build. Phil will speak to this later. Canadian Banking earnings were $4 billion, down $757 million or 16%, primarily due to higher provision for credit losses that increased by $1.2 billion, while revenues grew a strong 7%. International Banking earnings were $2.5 billion, down 4% on a constant dollar basis. Revenues were up $710 million or a strong 7%, while provision for credit losses increased $638 million. Global Wealth Management earnings of $1.5 billion were down $126 million or 8%, as a result of the very challenging market environment. Canadian wealth was down 12%, impacted by lower fee income, while international wealth earnings grew 19%. Global Banking and Markets reported earnings of $1.8 billion, down $143 million or 7%. Even in a slow capital markets environment, revenues grew 7%, but expenses were up 15% to support business growth initiatives. The provision for credit losses were higher by $167 million compared to the prior year. The Other segment reported a net loss of $1.4 billion, compared to a loss of $229 million in 2022. The higher loss of approximately $1.2 billion was due to lower revenues driven by higher funding costs and lower investment gains that were partly offset by higher income from liquid assets. The segment had some offsetting benefits from a lower provision for taxes and lower non-interest expenses. The Bank’s earnings in 2024 are expected to benefit from strong net interest income growth while non-interest revenues are expected to grow modestly. Loan growth is expected to be modest; however, we expect the benefits of repricing to support net interest margin expansion. Expense growth is expected to moderate largely in-line with inflation, as strategic investments are mostly offset by efficiency savings. The Bank expects to generate positive operating leverage in 2024. The Bank’s earnings are expected to improve marginally this year despite higher PCLs and a higher tax rate with first half profitability improving from the current quarter and the second half of the year being stronger than the first. Moving to Slide 6 for a review of the fourth quarter results. The Bank reported quarterly adjusted earnings of $1.7 billion and diluted earnings per share of $1.26. The return on equity was 8.9%. Net interest income was $4.7 billion, up 1% year-over-year and 2% quarter-over-quarter from a 6 basis point margin expansion from higher lending margins and business mix changes, including deposit growth across all business lines. Deposit growth outpaced loan growth again this quarter, resulting in a loan-to-deposit ratio of 110% compared to 116% in the prior year. Non-interest income was $3.3 billion, down 3% year-over-year, mainly due to lower trading revenues and investment gains, offset by higher fee and commission and wealth management revenues. The provision for credit losses increased $437 million or 53% from the last quarter, driven by higher-performing loan provisions which were $454 million this quarter. The PCL ratio was 65 basis points this quarter, of which 23 basis points were performing PCLs. Quarter-over-quarter expenses were up 4%, mainly from higher technology costs, performance-based compensation and professional fees. Expenses increased 10% year-over-year or 7% excluding the unfavorable impact of foreign currency translation, reflecting higher staffing-related costs, technology costs and performance, and share-based compensation. The productivity ratio is 59.5% this quarter, an increase of 340 basis points quarter-over-quarter. The effective tax rate was 14.7% this quarter compared to 17.6% a year ago, driven by higher tax exempt income and higher income from lower tax jurisdictions, partly offsetting an increase in the Bank’s statutory tax rate and lower inflationary adjustments. Moving to Slide 7, the Bank reported a common equity Tier 1 ratio of 13%, an increase of approximately 30 basis points this quarter. Net internal capital generation was 19 basis points. The sale of our 20% equity interest in Canadian Tire Financial Services contributed 16 basis points, and the dividend reinvestment plan contributed 11 basis points. This is partly offset by 10 basis points impact from the restructuring and one-time items, and the negative 8 basis points from the fair value impact of available for sale securities. Risk weighted assets were $440 billion, flat quarter-over quarter as the decline in book size was offset by the impact of foreign exchange. The estimated impact from the adoption of the Basel III reforms is approximately 75 basis points in Q1 2024. The 2.5% increase of the capital floor to 67.5% is approximately 40 — 45 basis points, and the implementation of the fundamental review of the trading book is approximately 30 basis points. In addition, the Bank’s liquidity coverage ratio improved to 136%, and was significantly up from 119% last year. The net stable funding ratio also improved at 116% from 111% in the prior year. The capital and liquidity ratios are expected to remain strong in 2024 with our plan to manage our common equity Tier 1 ratio in the 12.5% range. Turning now to the Q4 business line results beginning on Slide 8. Canadian Banking reported earnings of $810 million, a decrease of 31% year-over-year due to higher provision for credit losses and higher non-interest expenses. Year-over-year revenues grew 6%, while expense growth was 9%. Average loans and acceptances were in-line with prior year and down 1% from the prior quarter, while the mix changed. We saw continued growth in our higher-yielding portfolios as business loans grew 11%, personal loans grew 3%, and credit cards increased 18%. This was offset by a decline of 4% in residential mortgage businesses. We continue to see deposit growth, primarily in term products with average deposits up 2% quarter-over-quarter. Year-over-year deposits grew 10%, and the loan-to-deposit ratio improved to 125 basis points — sorry 125% from 138% last year. Net interest income increased 8% year-over-year as deposits grew a strong 10%. Quarter-over-quarter margin expanded by 12 basis points, benefiting from asset repricing and intentional changes in business mix. Non-interest income was in-line with last year due to lower banking fees, mostly offset by higher insurance revenue. Expenses increased 9% year-over-year primarily due to higher personnel costs and inflationary adjustments. Quarter-over-quarter expenses were up 4%. The PCL ratio was 63 basis points, an increase of 36 basis points quarter-over-quarter from significantly higher performing loan provisions. Looking forward to 2024, deposit and loan growth is expected to moderate from 2023 levels. This, along with the improving net interest margins, is expected to drive revenue growth. Solid revenue growth in retail, including Tangerine is expected to continue, while business banking revenues are expected to moderate. The segment will grow expenses in-line with revenue growth while balancing strategic growth investments. Turning now to Global Wealth Management on Slide 9. Earnings of $333 million declined 10% year-over-year as strong 8% growth within international wealth was offset by Canadian wealth results declining 12%, largely due to lower average assets under management. Revenues grew 3% year-over-year due primarily to higher brokerage revenues in Canada and private banking revenues within our international business. Expenses were up 11% year-over-year, driven by higher volume-related expenses and technology costs. Spot assets under management increased 2% year-over-year to $317 billion as market appreciation was mostly offset by net redemptions. Assets under administration increased 5% over the same period to $610 billion from higher net sales and market appreciation. Investment fund sales in Canada continued to be under pressure with approximately $60 billion in net redemptions over the last year. Under this backdrop, Scotia Global Asset Management investment results continue to perform well against their benchmarks. International wealth management generated earnings of $52 million, driven by higher revenues from business volume growth. AUA and AUM grew 12% and 16%, respectively, year-over-year. Global Wealth Management expects to deliver revenue growth in 2024, driven by retail mutual fund volume growth, solid growth across our Canadian advisory businesses, and continued expansion across key international markets. Earnings are expected to grow in-line with recovering market conditions and strong new business volume growth. Turning to Slide 10. Global Banking and Markets generated earnings of $414 million, down 14% year-over-year. Capital markets revenue was up 9% year-over-year as global equities grew 25%. However, business banking revenues declined 5% as loans were flat year-over-year. Net interest income was down 19% year-over-year as a result of higher trading-related funding costs and lower corporate lending margins. Non-interest income grew $95 million, or 11% year-over-year, primarily due to higher fee and commission revenue, partly offset by lower trading-related revenue. Expenses were up a modest 3% quarter-over-quarter, mainly from higher technology costs, and the negative impact of foreign exchange. On a year-over-year basis, expenses were up 12%, due mainly to higher personnel costs and technology investments related to business growth. The provision for credit losses increased 13 basis points quarter-over-quarter to $39 million, mostly on performing loans. The U.S. business generated strong earnings of $228 million. GBM Latin America, which is reported as part of the International Banking segment, reported earnings of $251 million, down $63 million from a record third quarter with lower earnings in Chile, Peru and Mexico due to lower capital markets activities. In 2024, in capital markets, revenue growth will be led by FICC, while business banking is expected to grow fee-based revenues. Expense growth will be focused on key investments in priority segments and markets. Earnings in GBM LatAm are expected to moderate in 2024 to more normal levels from the elevated earnings in 2023, and the impact of reduced capital allocation. Moving to Slide 11 for a review of International Banking. My comments that follow are on an adjusted and constant dollar basis. The segment reported net income of $570 million, down 12% or $75 million quarter-over-quarter, primarily from lower earnings from GBM LatAm of $63 million. Revenue was up 3% year-over-year, driven by higher net interest margins. Year-over-year loan growth moderated to 2%. Mortgages were up 7%, while business banking decreased 1%. Deposits grew a strong 9% year-over-year and 3% quarter-over-quarter. The loan-to-deposit ratio improved by over 1,000 basis points year-over-year to 129%. Net interest margin expanded 8 basis points quarter-over-quarter from asset margin expansion and business mix changes. The provision for credit losses was 119 basis points, or $512 million, up a modest 1 basis point quarter-over-quarter. Expenses were up 3% year-over-year due to inflationary pressure, partly offset by the benefits of cost reduction initiatives. Expenses were up 2% quarter-over-quarter driven by technology expense. Operating leverage was positive for the year. Looking ahead to 2024, revenues in International Banking are expected to benefit from loan growth and net interest margin expansion. Expenses are expected to grow at a lower rate than revenue, reflecting expense saving initiatives. Earnings are expected to be impacted by higher provision for credit losses and a higher tax rate. Turning to Slide 12. The Other segment reported an adjusted net loss attributable to equity holders of $487 million, that was higher by $188 million compared to the prior quarter. Revenue was lower than last quarter by $222 million. Higher interest from liquid assets was more than offset by increase in funding costs. Also contributing was further improvement in our liquidity levels which comes at a net cost. Revenue was also impacted by minimal investment gains and lower income from associated corporations and unrealized gains on non-trading derivatives. This was partly offset by lower taxes and non-interest expenses. In 2024, the Other segment loss is expected to remain elevated as funding costs are expected to remain at these levels for most of the year with significantly lower investment gains. We will see improvements in this segment as rates decline towards the second half of 2024. I will now turn the call over to Phil to discuss risk. Phil Thomas: Thank you, Raj. Good morning, everyone. We continue to strengthen our balance sheet by increasing our ACL ratio from 71 basis points to 85 basis points this year. With this, we have now increased our allowances for credit losses by $1.1 billion in 2023 with $780 million of this increase from performing allowances. Given the macroeconomic backdrop of higher unemployment levels, higher for longer interest rates and upcoming renewals of fixed rate mortgages in Canada, we have focused on strengthening the balance sheet, including: a further increase in performing allowances this quarter of $440 million leveraging expert credit judgment for Canadian banking and global banking and markets; higher quality originations with a focus on affluence in international, and higher credit quality in business banking; shifting business mix to a more secured across our footprint; and finally, a continued focus on building performance allowances in international, resulting in an approximate $200 million increase over the past six quarters. This improved ACL coverage provides us with a solid foundation to manage through periods of slow growth and an uncertain macroeconomic environment. It is important to note that while delinquencies are still within historical norms, consumer health in Canada continues to weaken, and we expect households may continue to experience financial pressure through 2024 with the build in ACL addressing this. In business banking, we are not seeing increased defaults due to high quality of our portfolios. However, we are increasing our coverage ratio given the expectation of continued elevated interest rates and the potential impact on client performance. Moving to Slide 15. The quarter-over-quarter PCL increase was primarily driven by the performing allowance build which was 23 basis points. This compares to 4 basis points last quarter. The build was primarily in Canadian banking. As a result of the increased ACL, our total PCLs in Q4 were $1.26 billion, including $454 million of performing PCLs. Total PCLs were up $437 million quarter-over-quarter. This translates to a PCL ratio of 65 basis points. Impaired PCLs trended higher at 42 basis points compared to 38 basis points in Q3. Canadian banking total PCLs were 63 basis points. Quarter-over-quarter, total PCLs increased by $393 million, resulting in a total PCL of $700 million. $414 million or 37 basis points of the PCLs were related to performing allowance build, of which $240 million was for Canadian retail and $174 million was for business banking. Retail customers in Canada continue to spend less on discretionary goods and more on essential items year-over-year. Overall, spending has continued to slow as total debit and credit card spend fell 3% quarter-over-quarter and remained flat year-over-year, despite inflation. Variable rate mortgage customers continue to spend less than their fixed rate counterparts with total spend down 11% year-over-year, while spending for fixed rate customers is only down 5%. Additionally, delinquencies continue to trend up across all products in Canada. 90-day delinquency levels were 3 basis points quarter-over-quarter to 25 basis points, and were up 10 basis points year-over-year. Quarter-over-quarter, we saw a deterioration in HELOCs and auto, increasing 9 basis points and 6 basis points, respectively. In Canadian business banking, we are cognizant of uncertain macroeconomic conditions. Included in our ACL coverage is an additional build for our real estate portfolio, which includes impacts to collateral values. Our exposure to U.S. real estate is largely to investment grade borrowers, and as disclosed in the investor presentation, our U.S. office exposure is immaterial. Global Banking and Markets provisions for credit losses were $39 million or 11 basis points this quarter and included a performing allowance build of $30 million. Total PCLs in International Banking were $512 million or 119 basis points, up 1 basis point from the prior quarter. Total retail PCLs decreased $17 million quarter-over-quarter to bring the PCL ratio to 211 basis points, driven by lower allowances and increases in Colombia and Chile. Performance in these markets have started to stabilize with improving macroeconomic outlook. Central banks have paused interest rate hikes in Colombia and in Chile. They have started reducing rates. Mexico continues to perform within expectations, supported by resilient underlying economic fundamentals. Headwinds persist in Peru, with delinquencies remaining elevated and GDP contracted. Peru entered a recession and will likely be further impacted by the upcoming El Nino. Contingency plans and loss mitigation tools are ready, and have been deployed where needed. Looking to fiscal 2024, we expect a challenging environment will persist for consumers and businesses. Canadian GDP growth is expected to remain muted and inflationary pressures on households is expected to persist with the outlook for rate cuts uncertain. We expect PCLs in 2024 to be in the 45 basis point to 55 basis point range, assuming no significant changes to our expected economic scenarios. With that, I’ll pass the call back to John. John McCartney: Great. Thanks, Phil. Operator, could you open the lines for questions? See also 20 States With Highest Migrant Workers in the US and 25 Most Affordable Places to Retire in the World. Q&A Session Follow Bank Of Nova Scotia (NYSE:BNS) Follow Bank Of Nova Scotia (NYSE:BNS) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question is from Ebrahim Poonawala from Bank of America. Please go ahead. Ebrahim Poonawala: Hey, good morning. So, I guess maybe, Raj, you went through a lot in terms of the outlook for next year. I just want to make sure we heard you right. It sounds like you’re guiding for PTPP to be up either year-over-year and from fourth quarter levels given revenue growth should exceed expense growth and revenue growth driven by NIM expansion. So, if you don’t mind, just quantify the level of margin expansion you expect at the all bank level if we don’t see any action from Bank of Canada from here on? And what is the expense growth that we should think about would be the right way for ’24, either year-over-year or relative to fourth quarter expense run rate? Thank you. Raj Viswanathan: Thanks, Ebrahim. I’ll start. Margin expansion should continue for the whole bank in 2024, Ebrahim. Couple of reasons. One is repricing of our loans has already commenced, as you saw this quarter. Frankly, you saw it in last couple of quarters across our portfolios, and that should continue in 2024. We know our deposit margin contribution to 2023 will be muted in ’24, because there’s been lots of deposit growth. And I said in my prepared remarks that deposit growth is expected to be lower than what we saw in 2023. The net of it is, you should see pretty decent margin expansion from where we finished Q4 2023, both in the business lines as well as across the Bank. Like you pointed out, with the Bank of Canada and the U.S. Fed expected to stop rate increases. Obviously, if they do increase, it’ll be a headwind to this Bank. So, I think margins will be a good news story. That’s where we expect net interest income to grow next quarter, in my prepared remarks what I talked about. Expenses is, Q4 tends to be seasonally higher. I think it’s not unusual for us. Like Q1, next year will be higher because we have what we call eligible to retire costs that comes through our business lines, which gets recorded in Q1 across our employee base. But for the whole year, like I mentioned, we expect to generate positive operating leverage for the Bank, i.e., revenue growth exceeding expense growth by some margin. We know that the Canadian bank has to invest, so there we think our revenue growth will be strong and offset the expense growth that is expected as we look forward. International bank will continue to generate positive operating leverage, as it did this year. And the Wealth and GBM businesses, it depends a bit on the markets. But I think for the whole bank, we expect to generate positive operating leverage. Expense growth will be significantly lower than what you saw this year. Adjusted for FX, like I said, it was about 7% for the whole year. And next year, we’re going to benefit from the productivity initiatives that we took as well, part of it is expected to come through in ’24, and the full year benefit should come through in ’25. So, all that points to an expense growth, I would call, in the low-end of the mid-single-digit range is what we expect next year. Ebrahim Poonawala: That was helpful. Thank you. And just on a separate question, Raj, you laid out the 75 basis point impact to CET1 from the Basel FRTB-CVA changes and the floor factor in 1Q. So, as we get to [12.25%] (ph), remind us where you want to be on CET1 as we think about the DRIP? And are there any actions that you can take to materially optimize the balance sheet to reduce that drag either on the market risk side or on floor factor? Thanks. Raj Viswanathan: Thank you, Ebrahim. I think as far as capital ratio goes, we’d like to run around the 12.5% range for the rest of 2024, and the DRIP is a contributor to that without any doubt. Lot of the actions that you referred to on muting loan growth, you’ve already seen it. You’ve seen our — we’ve been targeted about where we want to deploy our capital, and we’ve been pulling back capital from certain parts of the business where it has not been providing the appropriate returns in a capital constrained environment with higher cost of capital coming at us. So, 12.50% is what we expect to run for 2024. Obviously, it also depends on what OSFI will do and some of the other regulatory changes that can come across starting December 8. We want to be prudent. We want to run at 12.5%, and we’ll revisit all the actions that we need to take or not as we see how the regulatory environment evolves through 2024. Beyond that, we’ll talk about it at Investor Day to see what is the right capital levels that this Bank should be running at. But for ’24, that’s what you should expect from us. Ebrahim Poonawala: Thank you. Raj Viswanathan: Thanks. Operator: Thank you. The following question is from Gabriel Dechaine from National Bank Financial. Please go ahead. Gabriel Dechaine: Hi. Good morning. I just want to put a fine tune on the outlook commentary there, and I heard a few things from Scott and then in the MD&A, of course. You’re suggesting that earnings growth will be marginal in 2024. That’s off of the full year adjusted base from 2023, I assume. And if we’re looking at it from an earnings per share standpoint, you got marginal earnings growth, then you’ve got the DRIP, which might be ongoing for the full year, we’re probably going to see lower than marginal EPS growth. Is that a reasonable interpretation? Raj Viswanathan: No, I think — Gabe, I’ll start and Scott might have a comment or two on that. I think on an EPS basis, you should see growth, like marginal growth, right, from the $6.54 that we reported this year......»»
JOYY Inc. (NASDAQ:YY) Q3 2023 Earnings Call Transcript
JOYY Inc. (NASDAQ:YY) Q3 2023 Earnings Call Transcript November 30, 2023 Operator: Ladies and gentlemen, thank you for standing by. And welcome to the JOYY Incorporates’ Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session. I’d now like […] JOYY Inc. (NASDAQ:YY) Q3 2023 Earnings Call Transcript November 30, 2023 Operator: Ladies and gentlemen, thank you for standing by. And welcome to the JOYY Incorporates’ Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session. I’d now like to hand the conference over to your host today, Jane Xie, the company’s Senior Manager of Investor Relations. Please go ahead, Jane. Jane Xie: Thank you, Operator. Hello, everyone. Welcome to JOYY’s third quarter 2023 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY; Ms. Ting Li, our COO; and Mr. Alex Liu, the Vice President of Finance. For today’s call, management will first provide a review of the quarter and then we will conduct a Q&A session. The financial results and webcast of this conference call are available at ir.joyy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollar. I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li. Please go ahead, sir. David Xueling Li: Hello, everyone. Welcome to our third quarter 2023 earnings call. First, we will provide a quick snapshot of our performance for the quarter. During the third quarter, we once again delivered a strong performance. Our group revenue came in at $567.1 million, a 3.6% sequential increase, approaching the high end of our guidance. We hit a non-GAAP net profit of $81.2 million, a 5.5% year-over-year increase, with a non-GAAP net margin of 14.3%. Our core business segment BIGO maintained its recovery momentum and recorded revenues of $494.1 million, a sequential increase of 4.9% and a year-over-year increase of 2.2%, the first year-over-year topline growth for BIGO in six quarters. BIGO’s revenue rebound was accompanied by improvements in user activity and monetization efficiency. At the group level, our global average mobile MAUs grew by 2.6% year-over-year to 276.8 million. Notably, BIGO Live’s MAUs maintained its strong growth trajectory, increasing by 14% year-over-year to 40.3 million. BIGO’s number of paying users experienced a steady increase of 6.6% year-over-year, with ARPPU also improving sequentially during the quarter. With monetization recovering and as we continued to enhance our operational efficiency, BIGO’s non-GAAP operating profit grew by 11.7% year-over-year, reaching $81.9 million, representing an expanded non-GAAP operating profit margin of 16.6%. As one of the leaders in the global social entertainment sector, we have always been committed to building an equitable, diverse and inclusive global user community. We aim to provide users with unique value and exceptional experiences through our broad range of social entertainment products. We firmly believe that creation of positive user value and experiences are the foundations of effective user engagement and monetization. To maximize product value for our users we have always [Audio Gap] Our highly localized operations and innovative product optimization are our most effective instruments for enhancing user content and improving users’ social interaction experiences. To give you a better understanding of our progress on these two fronts, I’d like to share some examples from the third quarter. On the content front, BIGO Live expanded its collaborations with top KOLs and introduced more diverse and viral content. We also launched several major updates for our content segregation strategies and recommendation algorithms. These upgrades improved our ability to effective — efficiently channel users to content they enjoy, particularly our new user cohorts. On the social interaction front, we prioritized the optimization of interactive tools within BIGO Live’s Family feature and allocated additional operational resources to support Families. We also further intrade — enter the — iterated new social features, such as Real Match, which cater to different use cases and help users expand their social networks. These targeted initiatives have effectively driven positive progress in user engagement and monetization. The introduction of more diverse and viral content, alongside collaborations with KOLs have successfully enhanced our brand exposure, expanded product outreach and fostered organized user growth — organic user growth. This acceleration of organic traffic has been the primary reason for our robust user growth in recent quarters, even as we adhered to a disciplined marketing spend. At the same time, our amplification of Families’ social functions has yielded positive results in terms of user acquisition, payment conversion and the recruitment of long-tail streamers. Our improved user engagement and user experiences, coupled with exciting seasonal promotions such as the regional midyear galas have fueled a recovery in users’ paying activity and overall monetization. Looking ahead to the fourth quarter, we anticipate that BIGO’s global business will maintain its recovery trajectory on a year-over-year basis. However, given the ongoing uncertainty in the global macro landscape, we believe the pace of recovery across different markets will vary and short-term fluctuations in users’ paying sentiment may persist. We will remain cautiously optimistic, stay focused on our operational strategy and prioritize high quality growth. We will also continue to explore innovations across our products and operations and drive the steady recovery of our global business with a sustained focus on improving operating cash flows. Now, let’s take a closer look at our products. We will start with BIGO Live. BIGO Live maintained its double-digit user growth momentum in the third quarter, with MAUs increasing by 14% year-over-year to 40.3 million. We saw growth across several key regions, with year-over-year increases of 12.9% in Europe and 15.3% in the Middle East and 44 — 14.4% in Southeast Asia and other emerging markets. In the third quarter, BIGO Live recorded mid-single-digit revenue growth on a sequential basis. The developed countries region, especially Europe and Eastern Pacific countries outpaced other markets and generated high-single-digit sequential growth in revenue. As mentioned earlier, BIGO Live introduced a diverse range of high quality and viral content during the third quarter. In the Middle East, BIGO Live premiered The Acting Coach, an exclusive show in which a legendary Jordanian actor shares his personal insights into the art of acting. In Indonesia, BIGO Live debuted Friends for Life, a collaborative mini-series featuring three BIGO Live streamers and some local up-and-coming actors. The show was broadcast on a popular Indonesian video platform called Vidio, introducing BIGO Live’s streamers to new audiences. BIGO Live also expanded its collaborations with top KOLs in the third quarter. We launched a Summer Vibe campaign in the MENA region and teamed up with several local KOLs who have tens of millions of followers to share the freshest summer fashion trends and travel experiences, significantly boosting user engagement and inspiring creativity. Building upon the success of last quarter’s Family Month Campaign, we continued to encourage users to explore and participate in Family activities on BIGO Live. The third quarter saw a steady increase in the size of Families, with a 5.1% sequential increase in DAUs and a 17.4% sequential increase in the number of contracted streamers in Families. With regards to iteration and optimization of our product features, we retained our focus on content enrichment and improving social interactions. We further refined our content recommendation algorithms and continued to incentivize BAR creators. We started to develop a premium content pool on our BAR channel, covering popular genres such as K-pop, pets and workout. In the third quarter, the number of users sharing videos on BAR surged by 42.8% from the prior quarter, while the average effective views per person for video content rose by 29.3% in the same period. At the same time, we fine-tuned the features to enhance the appeal and interactive — interactivity inside livestreaming rooms. This drove an 8.5% sequential increase in the total number of livestreamers, along with a 3.7% sequential increase in the number of livestreamers in multi-guest rooms. In line with our commitment to fostering social interaction and forging relationships, we enhanced BIGO Live’s Real Match feature to make it easier to connect with people nearby by simply swiping through profiles. The upgrade fueled a 16.3% sequential increase in the number of people mutually following each other through Real Match and a 21% sequential increase in direct chat messages. Next, let me share some updates for other products. As we have previously mentioned, when compared to BIGO Live, our other products have a much larger aggregated user base, but they are generally in the early phases of monetization, as their contributions to revenue and profit are relatively small. As such, our main objective for these products is to systematically enhance their monetization efficiency and profitability, while strengthening their ability to organically acquire new users. Once these products start to generate consistent profits, we will have a solid foundation from which we can reinvigorate their user growth. Let’s begin with Likee. In the third quarter, Likee’s revenue grew by mid-single digits sequentially and it continued to be profitable at the product level. On the user front, despite a sequential decline in Likee’s MAUs this quarter, its DAUs in core regions, particularly in the Developed Countries Region, maintained high single-digit sequential growth. In September, Likee orchestrated a series of offline community events in celebration of Saudi National Day. These included streamers parties and movie days accompanied by online discussions designed to deepen connections among users, creators, and the platform. During the quarter, Likee also partnered with a number of popular creators to exhibit at the Asian Culture Festival, an event and that captivated fans of anime, K-pop and more, highlighting the ACG that is an integral component of Likee’s content ecosystem and community. At the product level, Likee remained dedicated to fostering community interaction during — driving a 14.7% overall sequential increase in average user time spent. Overall user engagement, as measured by the ratio of DAUs to MAUs, increased by 1% sequentially, while the IM penetration rate rose by 1.5% over the same period. Next, let’s take a look at Hago. During the third quarter, Hago achieved a sequential mid-single-digit percentage increase in revenue and its operating cash flow remained positive during the quarter. Efficiently content remained a priority along with a refined push notification strategy designed to boost participation in multi-guest interactive rooms across regions. Hago also iterated and enhanced its IM and interactive features, helping to drive increased social activity among users. Notably, average user time spent in social channels reached nearly 95.8 minutes per day and average time spent in multi-guest audio livestreaming rooms grew by 1.2% sequentially. Besides Hago 3D Space, Hago is actively exploring alternative social interactive applications and combining livestreaming and interactive gaming experiences powered by AI. Finally, some updates on cash flow and capital return. We continued to generate robust positive operating cash flows reach $72.9 million in the third quarter. Meanwhile, we maintained an active pace of share repurchases and bought back an additional $43.5 million of our shares. Our Board has authorized an extension of the buyback program, which stood at $530 million as of the end of the third quarter until November 2024. To summarize, effective execution of our operational strategies has driven the ongoing recovery of BIGO’s revenue, profit and user activity. Looking ahead into the remainder of 2023 and beyond, we remain committed to our long-term targeted strategy to pursue high quality growth. We will continue to explore ways to innovate across our products and operations and drive the steady recovery of our global business with a continued focus on improving operating cash flows. We will further concentrate our resources on building our core strengths and global businesses that align with our long-term strategies and effectively pursue growth opportunities. At the same time, we will continue to enhance shareholder returns through share buybacks. This concludes my prepared remarks. I will now turn the call to our Vice President of Finance, Alex Liu, for our financial updates. Alex Liu: Thanks, David. Hello, everyone. Despite the ongoing macro uncertainties, we achieved solid progress in the third quarter. Our global business segment BIGO booked positive year-over-year growth in both revenue and non-GAAP operating income during the quarter. We continued to grow our global MAUs even as we adhered to our disciplined marketing spend. The monetization efficiency ratios were also up during the quarter, with the number of BIGO’s quarterly paying users up by 5.1% and ARPPU up by 2.2% quarter-over-quarter. It’s a result of our continuing dedicated strategy to optimize product value and user experience and the strong execution of our global operational team. Now let’s look at the numbers in detail. Our total net revenues were $567.1 million in the third quarter. Revenues from BIGO segment were $494.1 million, up by 2.2% year-over-year, the first year-over-year topline growth in six quarters, mainly driven by strong growth in the developed countries. Cost of revenues for the quarter decreased to $357.9 million, among which our revenue sharing fees and content costs decreased to $232.3 million. BIGO’s cost of revenues were $299.2 million, which was up year-over-year, consistent with rebound in livestreaming revenue. Gross profit was $209.2 million in the quarter, with a gross margin of 36.9%. BIGO’s gross profit was $194.8 million, with a gross margin of 39.4%. Our group’s operating expenses for the quarter were $191.3 million, compared with $202.2 million in the same period of 2022. Among the operating expenses, sales and marketing expenses decreased to $92.5 million from $96.8 million in the same period of 2022, primarily due to the optimization of overall sales and marketing strategies across various product lines to be more focused on ROI and effectiveness of user acquisition. R&D expenses increased to $71.6 million from $61.2 million in the same period of 2022, primarily due to increased R&D personnel related expenses as we prioritized resources into building our technological capabilities. BIGO’s operating expenses for the quarter were $126.7 million, down by 5.3% year-over-year. Our group’s GAAP operating income for the quarter was $12 million. Our non-GAAP operating income for the quarter, which excludes SBC expenses, amortization of intangible assets from business acquisitions, loss on deconsolidation and disposal of subsidiaries, as well as impairment of goodwill and investments was $40.4 million in this quarter, with a non-GAAP operating income margin of 7.1%. BIGO’s GAAP operating income for the quarter was $68.5 million and BIGO’s non-GAAP operating income was $81.9 million, representing a non-GAAP operating income margin of 16.6%, up from 15.2% in the same period last year. Our group’s GAAP net income attributable to controlling interest of JOYY in the quarter was $72.9 million, compared to net income of $515.3 million in the same period of 2022. GAAP net income margin was 12.9% in the third quarter of 2023, compared to net income margin of 87.8% in the corresponding period of 2022. Our group’s GAAP net income was larger in the third quarter last year, primarily due to a one-off re-measurement gain of an equity investment. BIGO’s GAAP net income in the quarter was $70.2 million, with a GAAP net margin of 14.2%. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $81.2 million, compared to $76.9 million in the same period of 2022. The group’s non-GAAP net income margin was 14.3% in the quarter, compared to 13.1% in the same period of 2022. BIGO’s non-GAAP net income was $81.9 million, with a non-GAAP net margin of 16.6%. For the third quarter of 2023, we booked net cash inflows from operating activities of $72.9 million. We remain a healthy balance sheet with a strong cash position of $3.8 billion as of September 30, 2023. In the third quarter, we continued to enhance returns to shareholders and repurchased an additional of approximately $43.5 million of our shares. In the first three quarters of 2023, we have returned an aggregate amount of $355.4 million to our shareholders through dividends and share buybacks, which altogether represent 155.6% of our aggregated non-GAAP net income during the corresponding periods. We will continue to actively utilize our share repurchase program in the coming quarters. Turning now to our business outlook. We anticipate continued recovery in our global operations. However, due to the ongoing uncertainty in the global macro landscape, we recognize that the pace of recovery may vary across different markets and there may be short-term fluctuations in users’ paying sentiment. Separately, as previously communicated, we had made proactive adjustments to certain non-core operations in line with our commitment to high quality growth and global positioning. Taking all factors into consideration, we expect our net revenues for the fourth quarter of 2023 to be between $551 million and $579 million. This forecast reflects our preliminary views on the market and operational conditions and business adjustments, which are subject to changes. In conclusion, our dedicated efforts to enhance product value and optimize user experience are yielding positive results, as shown in our reaccelerating user growth and topline recovery. Simultaneously, our financial discipline has allowed us to further expand profitability and fortify our financial standing. Moving forward, we will maintain a focused operational strategy and direct our resources towards high potential businesses that align with our long-term objectives. We will also strive for a steady recovery in our global operations while prioritizing improvements in operating cash flows. With a stronger foundation and our proven execution capabilities, we are confident that we are well-positioned to seize growth opportunities and deliver sustainable value to our shareholders. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. See also 20 Most Advanced Countries in Science and Technology and 18 Hardest Countries to Get Citizenship in 2023. Q&A Session Follow Joyy Inc. (NASDAQ:YY) Follow Joyy Inc. (NASDAQ:YY) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Your first question comes from Thomas Chong from Jefferies. Please go ahead. Thomas Chong: [Foreign Language] Thanks management for taking my questions. My first question is about the margin trend for BIGO in 2024, as well as the outlook for the group branded margin. And my second question is about shareholders’ capital return. Can management share your thoughts on this front? Thank you. Alex Liu: Hi, Thomas. [Foreign Language] Jane Xie: Thank you, Thomas. Mr. Alex Liu will take your first question. So if you look at our Q3 results, we actually delivered better than our previous expectations. BIGO’s segment non-GAAP gross margin was improved from 39% to 39.5% this quarter, with a non-GAAP op margin improved from 16% to 16.6%. Although, we did spend more on content incentives and sales and marketing for our midyear gala, our better than expected profit was mainly due to accelerating topline recovery. Looking ahead to Q4, as we enter the year-end peak of operational activities, we expect BIGO’s content cost and sales and marketing expenses to be sequentially up. Therefore, BIGO will have a slightly lower gross margin and non-GAAP operating margin in Q4 as a result. However, if you look at our progress so far, in the first three quarters of 2023, we have already — for BIGO segment we have already achieved a non-GAAP op of 15.4%. So for the full year of 2023, we are still expecting the non-GAAP op of BIGO’s segment to be higher than the level of 2022, which was 14.4%. Alex Liu: [Foreign Language] Jane Xie: And as for the outlook for Q4, we believe it’s still early to give detailed guidance, our profit potential also depends on the pace of topline recovery. In general, we aim to strike a balance between scale and efficiency, and on a constant currency basis, we expect BIGO’s segment to pursue steadily topline recovery, while maintaining a relatively stable op margin — non-GAAP op margin. As for the all other segments, excluding the impact from our proactive adjustments to certain products, it has been on a continuing trend of narrowing operating losses, which we expect to continue in 2024. So to sum up, we continue to value profit and positive cash flow and drive further improvement in our operating efficiency. And at a good level, we still expect to remain profitable and continue to generate positive operating cash flow. Alex Liu: [Foreign Language] Jane Xie: And for your second question on capital return, if you look at Q3, we had repurchased approximately 43.5 million of our shares during the quarter and in the first three quarters of 2023. Our aggregated capital was US$355 million through dividends and share buyback, which is representing 156% of our aggregated non-GAAP net income during the corresponding period. So as of the end of Q3, we still have $530 million unused lines quota under our previous share buyback plan and our Board has just authorized an extension of the program for another year. So shareholder return will remain one of our top focuses and we will continue to steadily execute our share buyback. Thank you. Next question, please. Operator: Next question comes from Brian Gong from Citi. Please go ahead. Brian Gong: [Foreign Language] I will translate myself. Good morning, management. Thanks for taking my question. Regarding BIGO Live’s recovery, can you elaborate a little bit more on the expected growth momentum across different regions in 2024? What factors are driving this recovery? Thank you. David Xueling Li: [Foreign Language] Jane Xie: Thank you, Brian. David Xueling Li: [Foreign Language] Go ahead. Jane Xie: Thank you, Brian. This is David. On your question about BIGO Live’s recovery, if you look at our Q3 results, you can see that our revenue recovery in the quarter was better than expected. Looking at products done on their own basis, BIGO Live actually delivered a higher Q-o-Q growth than the BIGO segment and that was mainly driven by a high single-digit Q-o-Q growth from the developed countries region. Actually, the developed countries have been on sequential recovery momentum for quite a few quarters already and we have also booked a positive growth, a decent Q-o-Q recovery for the Southeast Asia region as well during the quarter. And if we look at the driving factors, we believe it mainly attributes to a strong MAU growth and also ARRPU recovery. I think it’s the result of our continued implementation of highly targeted operational strategies, which actually prioritizes our user acquisition, spending, product optimization and operational — and other operational resources towards premium end-users and also the developed countries. David Xueling Li: [Foreign Language] Jane Xie: However, as I just mentioned, given the global macro uncertainties, we believe the pace of recovery across different regions still vary and that user’s payment sentiment are still in a fluctuating status. Therefore, our — in our current Q4 guidance, we actually expect BIGO Live to achieve a modest growth year-over-year. I think it’s still early to give guidance on 2024, but generally speaking, we expect BIGO Live to resume a topline year-over-year recovery gradually driven by MAU growth together with stabilizing monetization efficiency. Next question, please......»»
Duluth Holdings Inc. (NASDAQ:DLTH) Q3 2023 Earnings Call Transcript
Duluth Holdings Inc. (NASDAQ:DLTH) Q3 2023 Earnings Call Transcript November 30, 2023 Duluth Holdings Inc. misses on earnings expectations. Reported EPS is $-0.32 EPS, expectations were $-0.31. Operator: Good morning, and welcome to the Duluth Holdings Inc Third Quarter 2023 Earnings Conference Call. All participants are in a listen only mode. [Operator Instructions] After today’s […] Duluth Holdings Inc. (NASDAQ:DLTH) Q3 2023 Earnings Call Transcript November 30, 2023 Duluth Holdings Inc. misses on earnings expectations. Reported EPS is $-0.32 EPS, expectations were $-0.31. Operator: Good morning, and welcome to the Duluth Holdings Inc Third Quarter 2023 Earnings Conference Call. All participants are in a listen only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions [Operator Instruction] Please note this event is being recorded. I would now like to turn the conference over to Nitza McKee. Please go ahead. Nitza McKee: Thank you-, and welcome to today’s call to discuss Duluth Trading’s third quarter financial results. Our earnings release, which was issued this morning, is available on our Investor Relations website at ir.duluthtrading.com under Press Releases. I’m here today with Sam Sato, President and Chief Executive Officer; and Mike Murphy, Vice President, Chief Accounting Officer and Interim Chief Financial Officer. On today’s call, management will provide prepared remarks, and then we will open the call to your questions. Before we begin, I would like to remind you that the comments on today’s call will include forward-looking statements, which can be identified by the use of words such as estimate, anticipate, expect and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties. That could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to those that are described in our most recent annual report on Form 10-K and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. And with that, I’ll turn the call over to Sam Sato, President and Chief Executive Officer. Sam? Sam Sato: Thank you for joining today’s call. Reflecting on what has remained a dynamic consumer environment in which we continue to see customers gravitating to value. Our third quarter performance was hampered by lower traffic in both our direct and retail channels as well as an under penetrated position in spring/summer goods following strong unit sell-throughs during the second quarter. In addition to managing the business prudently on both the inventory and expense fronts, we strategically post a higher-than-planned level of events, combined with select pull-forward of fall/winter receipts enabling us to maintain high levels of in-store shopper conversion as well as improve our conversion and retention rates in our direct channel. To be clear, we are not satisfied with our performance, and we’ve made adjustments to improve the trend in the business for the final quarter of the fiscal year. I’m pleased to report that we’ve experienced a solid improvement in business trends over the Black Friday through Cyber Monday period, which gives us confidence. That tactical adjustments we are making are resonating with our customers. Let me outline at a high level the actions we’re taking to improve our business performance. In the fourth quarter, we’re introducing more new products than we ever have as well as pulling forward select items from our spring 2024 assortments. We’re chasing and, in some cases, expediting freight for targeted best sellers to capitalize on these winning products throughout the holiday season. And we’ve added back global events and pulsed our Black Friday deals throughout November. Despite the challenging third quarter results, we registered notable merchandising wins highlighting that our brand and sub brands remain strong, and our product innovation engine is creating winning assortments. Key wins for the third quarter included continued strength in our garden landscaping and planting category, which now represents over 10% of our total women’s business. Our Arlon Garden Collection posted triple-digit growth in the quarter over last year, fueled by new prints and colors and expanding offering into extended sizes and a very successful line version of the Arlon gardening bib. The customer is loving the added warm from the line bib, so she can wear her favorite overalls year-round. The Arlon gardening bid is our newest hero product. In fact, this product is the first purchase for nearly 40% of all new female customers and is number one in organic search for the Garden overhauls. A clear indication that our apparel styles have a foothold in this space. We’ve continued to see strength in women’s bras, which posted another quarter of year-over-year growth of 50%. [Indiscernible] is responding well to innovation in the broad category with an emphasis on soft fabrications and the seamless look and feel. Our top collections include Armachillo, gestabust and Free range. Our newest bra, our Armachillo TeeLUXE, which leverages our Jade infused Armachillo fabric, and first ever molded cup bra has quickly become our #1 style. Women’s AKHG had another solid quarter of growth and increased by just under 20%. Customer continues to respond well to our melt water collection and we’re also seeing a strong start to outerwear sales driven by the Puffin collection. We also introduced the first women’s parka in AKHG, and she’s loving the added length and new waterproof innovation. Duluth continues to show strength in its core programs. Within men’s, Duluth Flex Fire Hose and denim were up double digits, supported by our pants destination marketing our Duluth Flex Fire Hose pants delivered solid growth in the quarter with notable strength in standard and slim fits an indication that these fits are attracting a younger customer. Now a brief review of our third quarter results. Total net sales for the third quarter were $138 million, down 6.1% with our retail channel down 9%. And our direct channel down 4%. As I mentioned, the third quarter was impacted by lower traffic across channels and our under penetrated position in spring/summer goods during the first half of the quarter. To maintain brand integrity, we remain competitive with our offers, but made the strategic decision to limit the depth of discounts in the third quarter. And while this may have also contributed to lower top line sales, we believe holding the line on price integrity is paramount to the long-term health of our business. Further, our product gross margin declined to last year stabilized considerably in the third quarter. And the erosion that we did see was almost exclusively from mix as customers shopped less at full price and gravitated to maximizing their spend during periods in which we post events. When looking across our full price, promotional and clearance sales buckets, product gross margins were essentially flat to slightly up in each. We’ll continue to balance our efforts in the fourth quarter to stay competitive and drive the business while preserving the long-term price integrity of our brands. Mike will provide greater details on the P&L but our net loss per share in the third quarter was $0.32 versus a loss of $0.19 in the third quarter last year. As our teams continue to optimize efficiencies in our marketing spend, and with customers gravitating to a greater mix of promotional sales throughout the quarter, we made the strategic decision to pull back on advertising spend. And delevered ad leverage in the third quarter. Our Q3 marketing spend effectively balanced brand awareness and high converting digital tactics within our media mix. Digital conversion media achieved strong year-over-year performance within both paid social and e-mail, which drove an 11% increase in reactivated customers. Importantly, our inventory is in a very healthy position with a significantly higher level of newness coupled with a 30% decrease in clearance inventory. Our quarter end inventory balance of $174 million was 15% below last year with a strong mix of fall/winter and year-round goods. Our continued focus on effectively managing our inventory will enable us to increase profitability, enhance cash flows and better serve our customers both now and in the future. As touched on last quarter, we’re also excited about our pipeline of new and innovative products that we have begun to introduce during the fourth quarter. This includes newness in our core categories of buck naked and fire hose as well as within our sub-brand, AKHG. Our customer loves the performance of our Dry on the Fly technology, so we’ve added this to underwear and also to a new team. This high-performance fabric has superior wicking and drying benefits that derives from the special fiber shape and fabric blend, which is unique to Duluth. The new T combines the performance of a technical fabric the weight and hand feel of a cotton tea and comes in both Longtail and on long tail silhouettes. We will also be offering a new men’s fire host Carpenter pants featuring the strongest Flex fabric on the marketplace, but still with a lighter weight than our original Flex firehose. We’re confident this will be a hero product and another example of Duluth’s DNA by offering customers innovative products that solve a problem. In November, we also delivered newness in No-Yank. This is our favorite layering tank, and we’re offering it in a new rip fabric in 2 different styles and also brought in a boat next silhouette in our core fabric. She’s told us she loves this collection, and now there will be even more options to complete her outfit. And finally, as I mentioned earlier, women’s AKHG continues to deliver significant growth. We’re very excited to announce this January, we will be launching a new women’s AKHG fitness apparel line, which will include an assortment of styles from tanks, shorts, to hybrid jackets and after sweat sweats. We’re bringing in product for the new year as customers are focused on self-care and starting the new year off right. Given the strong start to the holiday season over Black Friday through Cyber Monday, coupled with our strong assortment of new and innovative products, we’re positioned well heading into the remaining weeks of peak holiday selling. There’s still a lot of business in front of us and the trend we are seeing gives us confidence that our high-quality solution-based products will continue to resonate with our customers, gift givers and new-to-file consumers. Looking forward, we remain resolute on executing critical foundational strategic investments, and I’d like to provide updates on a few key components that represent cornerstones to our Big Dam Blueprint. We’re making great progress on several important initiatives that will serve as enablers for long-term profitable growth, including our global supply chain strategy, our sourcing and product innovation strategy as well as our technology road map. First, as I shared during the second quarter call, our new highly automated fulfillment center in Adairsville, Georgia went live in September, with a ramp-up plan to process up to 60% of all online orders and store replenishment volume by the end of Q3. I’m pleased to report that we reached this goal and the facility is fully operational and exceeding output expectations thus far in the fourth quarter. In addition to shortening delivery times to keep pace with evolving customer expectations, the enhanced capabilities in this facility will provide both labor and shipping efficiency gains. In October, we already benefited from lower cost per unit to fulfill an order in this facility, which is less than half the cost of our 3 legacy fulfillment centers and will result in meaningful cost savings over time. We also continue to make progress with the growth of our sourcing and product innovation functions, which we believe is another critical strategic initiative to drive sustainable long-term profitable growth. Several team members were onboarded in the second quarter, and I’m pleased to share that we have recently hired a new Vice President of sourcing, someone with deep and extensive sourcing experience who previously led large sourcing functions, including at J.Crew. This initiative will enable us to further accelerate the introduction of high-quality innovative products more frequently while increasing our speed to market at a reduced cost. In fact, as we move into and throughout next year, we expect this initiative to deliver significant improvement in our initial markups across our assortments and these will continue to build over time. Finally, we have also made great strides with completing several foundational initiatives to execute our technology and transformation road map. Which becomes the primary focus of our capital expenditure outlays in fiscal 2024. That said, total capital spend in 2024 will be down considerably compared to 2023. With the successful completion of Adairsville, and the progress we’ve made on our sourcing and product innovation and technology initiatives, our confidence only continues to grow in the investment strategy outlined by our Big Dam Blueprint. I look forward to sharing more on our fourth quarter call, and we’ll now turn it over to Mike to provide more details on our third quarter results. Mike? Mike Murphy: Thanks, Sam, and good morning. For the third quarter, we reported total net sales of $138.2 million, down 6.1% compared to $147.1 million last year. which brings our year-to-date sales decline to 2.5% versus last year. Our direct channel sales declined 4.4% as lower web visits were partially offset by increased conversion of 70 basis points. However, sales on mobile devices increased roughly 2% with even greater improvement in conversion up 80 basis points, indicating that our investments and continued focus on the mobile experience is paying off. Our retail channel sales were down 8.8%, driven by a store traffic decline of more than 6% compared to last year, coupled with a moderate decrease in shopper conversion. Total men’s division sales decreased 7% during the quarter, while women’s was down 3%. Women’s momentum from the previous 3 quarters slowed but continued to grow as a percentage of our overall business as compared to the prior year. As Sam mentioned, the actions we are taking have resulted in improvements in business trends over Black Friday through Cyber Monday. We are pleased with our improved quarter-to-date sales trends, but we also recognize that we have many important selling days ahead of us leading up to Christmas. That said, we are lowering our guidance largely based on our Q3 results which I will provide more details on shortly. Our third quarter gross profit margin was 50.2% compared to 52.3% last year, and reflects a lower mix of full price sales this quarter versus last year, while gross profit dollars of $69.4 million declined 9.8% from last year. As mentioned last quarter, we started to see our year-over-year product gross margin decline stabilized at the end of Q2, and that remained consistent throughout Q3. However, as noted by Sam, we continue to see customers gravitate towards value and choosing to purchase during sale events more often. Turning to expenses. SG&A for the third quarter decreased 2.9%. To $81.8 million or 59.2% of sales compared to $84.3 million last year or 57.3% of sales. This included an increase of $700,000 in general and administrative expenses, a decrease of $1.8 million in advertising and marketing expenses and a decrease of $1.4 million in selling expenses. Selling expenses as a percentage of net sales increased 10 basis points to 17.2% compared to 17.1% last year, driven by higher outbound shipping costs that resulted from contractual rate increases as well as lower average order values on our direct channel orders. Within our selling costs, expenses related to variable labor across the store fleet and the fulfillment centers declined to last year. And the year-over-year leverage gain as a percentage of sales in Q2 nearly doubled in Q3. This is a direct result of the efficiency gains we continue to realize from the investments made across our fulfillment center network most notably our new highly automated center in Adairsville, that went live in September. As Sam mentioned and worth repeating, the cost per unit we achieved in October at this new facility reflects savings of more than 50% on compared to our other 3 centers. We expect the cost per unit benefits to be even more meaningful in Q4 and continue into fiscal 2024. Advertising and marketing costs were $17.8 million in the third quarter compared to $19.6 million last year, and as a percentage of sales decreased 40 basis points to 12.9%. Compared to 13.3% last year. Our investment in brand awareness through national ad channels and TV streaming increased slightly versus last year, while our digital media channel spend was reduced. During Q4, we will continue to balance brand awareness and conversion marketing tactics with new cutter creative concepts and a planned increase of digital media investments. These digital media investments focus on social media and influencers and online video and streaming supplemented with a strong investment in search and shopping channels. We expect to deliver greater year-over-year advertising lever in the fourth quarter compared to what we experienced in Q3. General and administrative expenses during the third quarter were $40.3 million, or 29.1% of net sales compared to $39.6 million or 26.9% last year. The increase in G&A expenses over last year reflect incremental costs associated with the aforementioned strategic initiatives. Including depreciation and personnel expenses associated with the new Adairsville, fulfillment center as well as additional personnel costs to support the growth of our sourcing and product innovation functions. We expect our fourth quarter overhead expenses to be slightly less than Q4 of last year. Adjusted EBITDA for the third quarter was negative $1.6 million or negative 1.9% of sales compared to a positive $1.7 million or 0.7% of net sales last year. Our net loss per share was $0.32 versus a net loss per share of $0.19 in the third quarter last year. Moving on to the balance sheet. We ended the quarter with net working capital of $62 million, including $8 million in cash and $36 million outstanding on our $200 million line of credit. Our Q3 debt levels were in line with plans, and importantly, we expect all outstanding debt balances to be fully paid off by the end of next week. Our inventory balance ended the quarter down 15% compared to the third quarter last year. We planned inventories down year-over-year throughout 2023, which is reflective of our continued focus on being more efficient and driving increased inventory turns. Importantly, we feel good about the current mix between year-round and seasonal goods heading into the peak selling season. With total clearance units on hand down by more than 30% from last year, driven by higher sell-through of spring summer items in Q2. We remain on track for our total capital expenditure plan of approximately $55 million this year, which will be funded by cash. And as we’ve shared on previous calls, the bulk of which relates to our new fulfillment center in Adairsville, Georgia. Now moving on to full year guidance. We are updating as follows: net sales in the range of $640 million to $655 million. EPS in the range of negative $0.25 to negative $0.15. And adjusted EBITDA in the range of $35 million to $39 million. These estimates reflect a full year gross profit margin decline of approximately 150 basis points and full year SG&A expenses as a percentage of sales to be roughly flat to up 70 basis points compared to last year. Our teams remain focused on prudently managing the business, controlling what’s within our control and continuing to execute on a strong peak season. On behalf of Sam and the entire leadership team, I’d like to wish everyone a happy and healthy holiday season. With that, we’ll open up the call for questions. See also 11 Best December Dividend Stocks To Buy and 20 States With the Cheapest Gas Prices in the US. Q&A Session Follow Duluth Holdings Inc. (NASDAQ:DLTH) Follow Duluth Holdings Inc. (NASDAQ:DLTH) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] And our first question will come from Janine Stichter of BTIG. Janine Stichter: I wanted to ask about Black Friday and Cyber Monday specifically, understanding it was very strong Sam starts the holiday season. How do you think about extrapolating that into your go-forward outlook? Just knowing that, I think, for you and for the industry in general, we’ve seen consumer shopping more around promotions. And then I have a follow-up. Sam Sato: Yes, I mean, we’re obviously pleased with the solid start to the holiday shopping period and saw a solid trend improvement in the business from Black Friday through Cyber Monday. Obviously, we continue to see the consumer sensitivity around price. And certainly, the Q3 results as we look at it by price bucket is a clear indicator of that. And so while the trend certainly improved, we’re taking a slight tempered look to the remaining upcoming weeks, still a lot of business to do, and we’re watching that closely. I still think that there’s some consumer sensitivity and we’re watching that closely. At the same time, as we continue to share while we’ve got to be promotional and in the case of Q3, we post events more frequently than we have historically. We’re not going to chase bad sales, meaning we’re not going to discount the product to the point where it’s not providing both top line and flow through to the bottom line. And damaging the brand position. So while the trend changed over the course of Black Friday weekend, through Cyber Monday, it was during a highly promotional time. And so we’re just being cautious in terms of extrapolating that throughout the rest of the quarter. Janine Stichter: Great. And then I also wanted to ask around the inventory. It sounds like there’s a fairly large bifurcation between some of the items that are really working some of the hero products. And then kind of the balance of the assortment. So how does that inform how you think about SKU intensity and bringing product to market going forward? Is there an opportunity to kind of maybe shrink the SKU intensity and invest more deeply behind some of these clear winners? Sam Sato: Yes, absolutely. So I mean it’s a dynamic kind of fluid scenario. So we’ve got some hero products, key year-round goods that we’re on pretty fast recovery. So we’re writing orders on a regular basis and flowing those goods, whether it’s Flex Fire Hose or some of our key under products. At the same time, we’re looking at these opportunities of products and categories that we’re starting to see greater growth, and we’re working hard to not only ensure that we stay in stock at the right time, but that we’re looking forward and exploiting those opportunities. I think what’s interesting about some of the things we’ve got going right now is the continued innovation against franchise like Fire hose, Carpenter pant that that is coming in, then we identify new categories like our AKHG fitness line across women and men’s. No-Yank has been a staple for us and the team worked hard to introduce a few new silhouettes and new fabrications. And so it’s kind of we’re looking at new opportunities within new categories that we aren’t currently participating in as well as evolving, expanding kind of true blue categories and items that have really made dilute what we are today. Operator: The next question comes from Jonathan Komp of Baird. Jonathan Komp: Sam, I just want to follow up on the topic of promotions and discounting and just understand the strategy. You highlighted clearance units down a lot, you’re not intending to chase sales. But I think through yesterday, you had 40% off everything there’s still more frequency of deals. Just could you maybe go a little more in depth of strategy there, why pursue those deals at all versus maybe a more profitable base of revenue if you didn’t — and then how should we think about the gross margin level you need going forward for this to be a healthy level of profitability to the total company? Sam Sato: Yes, sure. Thanks, Jonathan. Yes, I mean, it’s a complex and kind of tricky scenario when you’re balancing brand integrity with market competitiveness. And so the whole house, what we call whole house global events that we have, we’re comping those and — and actually, we’re not adding a lot more of those. We are pulsing in certain item kind of promotions. And as I said, it’s considerably more price promotional out there than it has been over the last couple of years. And so in order to remain competitive, yes, we’re having to promote a bit more frequently. But as I said, the depth of our promotion in terms of the discount — discounting is not significantly deeper, and that’s where we’re going to draw the line a bit. So yes, I mean, we’re always thinking about how much is too much, how much is too little how do we ensure that we continue to drive sell-through brand awareness because all of those things have implications into the future. And certainly, as it relates to kind of mind share, could we do less promoting? Yes. I mean we always could. Does that necessarily improve or help us meet some of our other required measurements like sell-throughs and market share, no, we probably give some of that back margin rate, the rate itself might increase. But total profitability for the company, both near term and in the immediate kind of future would be hurt. So, I mean, it’s tricky. And I know the basis of your question, Jonathan, you and I have talked about this a lot, and I think just know that we’re internally talking about the balance of promotions versus regular price. The fact of the matter is when we look at our sales mix, as I shared in the prepared remarks, customers are just gravitating more greatly to value. And so when we do run these events, the sales numbers jump during those events and they’re just — they’re choosing to purchase less during regular price periods. The great news is in all of our buckets, clearance included, although clearance is significantly down from a year ago, but all 3 of our buckets, regular price promotions and clearance, our margin rates are actually slightly flat to slightly up in all 3 buckets. And so in totality versus a year ago and even when we look back a couple of years ago, margin rates by bucket aren’t that far off just the percentage of sales are being driven more by that promotional bucket right now than they are regular priced or clearance......»»
Seadrill Limited (NYSE:SDRL) Q3 2023 Earnings Call Transcript
Seadrill Limited (NYSE:SDRL) Q3 2023 Earnings Call Transcript November 28, 2023 Operator: Good morning, and welcome to Seadrill’s Third Quarter 2023 Earnings Call. All participants are in a listen-only mode. After the speaker’s presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like […] Seadrill Limited (NYSE:SDRL) Q3 2023 Earnings Call Transcript November 28, 2023 Operator: Good morning, and welcome to Seadrill’s Third Quarter 2023 Earnings Call. All participants are in a listen-only mode. After the speaker’s presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Benjamin Wiseman, Corporate Finance Manager and Investor Relations. Thank you. Please go ahead. Benjamin Wiseman: Thank you, operator. Welcome to Seadrill’s Third Quarter 2023 Earnings Call. With me today are Simon Johnson, our President and Chief Executive Officer; Grant Creed, Executive Vice President and Chief Financial Officer; Samir Ali, Executive Vice President and Chief Commercial Officer; and Leif Nelson, Executive Vice President and Chief Operating and Technology Officer. Before we begin, I would like to remind you that some of today’s comments are forward-looking statements within the meaning of securities laws. They involve risks and uncertainties, and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest Forms 20-F and 6-K filed with the U.S. Securities and Exchange Commission. Our comments also include non-GAAP measures. Reconciliations to the nearest corresponding GAAP measures are in the earnings release available on our website. Later in the call, following our prepared remarks, we will host a question-and-answer session. Please limit yourself to one question and one follow-up to permit more participation. Now, let me turn the call over to Simon. Simon Johnson: Hello, everyone, and thank you for joining us today. I’ll begin with some opening comments about the third quarter results, followed by a few corporate updates before Samir covers our recent commercial activity and the market outlook. Grant will then provide a financial overview before opening up for Q&A. For the third quarter of 2023, Seadrill reported adjusted EBITDA of $151 million on $414 million of revenues resulting in a margin of 36.5%, which screens favorably across our peer group. Adjusted EBITDA was robust, and therefore, we have increased our full year 2023 guidance with the range now $485 million to $505 million. Moving to shareholder returns. We initiated a $250 million buyback program in mid-September. And as of last week’s close, it executed 85% of the total facility at an average of $42.76 per share. By our estimation, this is highly accretive for shareholders, and we are pleased with the progress to date. Given the success of the existing program, the company’s robust financial position and our constructive view on the market outlook, we’re delighted to announce today that Seadrill’s Board of Directors has increased our share repurchase authorization by a further $250 million, taking the aggregate authorization to an industry-leading $500 million. Now, I’d like to touch on the potential sale of our cutter jack-up fleet and related joint venture interest. There has been a strong level of interest in these assets, but we have not concluded a sale at this time. Put simply, we intend to transact at a level that reflects our beliefs as to jackup asset values and the underlying day rate environment, both of which continue to develop positively. We firmly believe that these are attractive drilling rigs and arguably the most prospective jackup market on the planet right now. Although, we remain focused on our strategy of exiting noncore asset categories and simplifying our company’s value proposition, we’re in no rush to sell these non-operated rigs, and we will do so only if a buyer meets our pricing expectations. On the topic of our ongoing initiatives to simplify and realize cost efficiencies, we can announce today that we’ve decided to close our London office and consolidate our corporate headquarters in Houston, Texas. We anticipate this will occur before the end of the first quarter in 2024. First and foremost, I’d like to take this opportunity to personally thank the dedicated and talented team in London. The London office has been a hub of entrepreneurship and excellence, and everyone who’s been a part of that can be justifiably proud of what has been achieved, especially in the past two years. In addition to the executive team, only a modest number of staff will transition to Houston. Nevertheless, looking ahead, the management team and I are excited about the opportunities for improved collaboration and for cost efficiencies that we anticipate will result from centralizing our executive, operational and functional leadership under one roof in much closer proximity to key customers, suppliers and target markets. In our view the fundamentals remain robust. We believe the length and durability of this cycle and also crucially, Seadrill’s advantageous positioning relative to most of our trade rivals. Looking forward to 2025 and 2026, we expect a reduction in the impact of SPSs, boosting our revenues and cash flow profile, and we anticipate a significant uptick in earnings particularly as the West Carina, West Jupiter and West Talos all of existing legacy contracts. We’re very positive about the outlook for South America. And last week’s five-year plan from Petrobras only confirmed this view with total E&P spending up 14% and notably, exploration up 25% compared to the prior plan. Now I hand the line over to Samir to take us through the commercials in more detail. Over to you, Samir. Samir Ali: Thank you, Simon. I’ll begin with two recent pictures, both from the Gulf of Mexico. First, The West Neptune secured an extension with LLOG, representing a total contract value of approximately $76 million. The extension will be in direct continuation of the current term, keeping the rig busy until the second quarter of 2025. We are proud to continue this long-standing partnership with LLOG that started nine years ago when The West Neptune was delivered to Seadrill. Next. The West Vela secured a short-term campaign with QuarterNorth Energy, representing a total contract value of approximately $45 million. This is a well-based contract, and the estimated term is approximately three months. As a reminder, the West Vela was acquired by our Aquadrill transaction, which closed earlier this year and is currently managed by a third-party drilling contractor. Once the current program is completed, the rig will undergo a short reintegration into the Seadrill platform and then commence with the QuarterNorth campaign. Moving to some comments on the upcoming rollovers. We currently anticipate that Sevan Louisiana will finish its work with TELUS [ph] next month, subject to well in progress, then undertake its 10-year SPS. Despite the contract term that we observed here in the Gulf of Mexico, we remain cautiously optimistic about securing further work. Shifting east, the West Polaris is scheduled to conclude early next year in India. The rig is currently managed by a third-party drilling contractor, but she will transition to Seadrill once the campaign finishes. As stated previously, we may choose to opportunistically relocate rigs to more attractive markets where we see more demand and where we can achieve economies of scale. With this in mind, we do expect several months of idle time on the West Polaris in 2024. Currently, our active fleet contracted utilization for 2024 through 2026 stands at 77%, 47% and 21%, respectively, providing a smooth contract rollover profile. We’re increasingly excited as we look to the future, anticipating a considerable repricing from rigs rolling on to prevailing market rates. Our order backlog currently stands at $2.2 billion as of November 27, 2023. Turning to an overview of the market. The IEA recently published its World Energy Outlook, forecasting a meaningful need for hydrocarbons through 2050, while OPEC has projected that oil demand will continue to expand until 2045, primarily driven by population growth in the developing world taken together with the low breakeven points of deepwater projects and the supportive commodity prices, we believe in the long-term outlook of our industry. Taking a closer look at offshore. Drillship marketed utilization continues to track in the 90s, while the leading-edge day rates recently breached the much anticipated $500,000 per day mark, albeit for a one-well job. Even so, this is just the beginning. Demand is expected to increase over the coming years, particularly in the Golden Triangle and in our view, there are major barriers to additional additions of new supply. The lead times and cost of delivery are meaningful and should not be underestimated. As the market continues to develop, we have average lead times to secure drillships increased to 319 days, an almost 60% improvement compared to 2020. Operators are focused on synchronizing startups with the delivery of well equipment, which continues to slip to the right. Admittedly, we haven’t hit that the average lead time seen in the last peak when operators often had a year between fixing and commencement. But the fact that we’re even making in comparison is a testament to the current strength of the market, and the prospects of this up cycle. Our view on duration remains consistent. At a high level, it’s increasing on average, mainly driven by fixtures in Brazil. We anticipate average duration continuing its upward trend, especially as operators trade term for favorable day rates in the near term. We are also expecting operators to borrow with other aspects of total contract value to mitigate day rate progression, a positive signal, we believe. The market naturally focuses on headline day rates, but this is just the tip of the iceberg. We are just as focused on other terms and conditions below the water surface, such as escalation mechanisms to help improve margins. As the offshore market further tightens, we will target such terms and conditions given they can have a meaningful impact on stakeholder value. With that, I’ll hand it over to Grant. Grant Creed: Thanks, Samir. I’ll discuss our third quarter results before giving some other financial updates. In the third quarter, Seadrill generated $414 million in total operating revenues, consistent with the prior quarter. This includes $324 million of contract drilling revenues, which decreased sequentially by $5 million, primarily due to planned other service days on the West Phoenix and Sevan, Louisiana. We reported economic utilization of 93% for the third quarter, which was negatively impacted by the above-mentioned other service time. Beyond contract drilling revenues, we generated additional revenues from management contracts, largely relating to Sonadrill joint venture totaling $68 million. We also earned an additional $22 million in reimbursable and other revenues, the majority of which relates to bareboat charter income for the 3 Gulfdrill rigs. Operating expenses for the quarter reduced by $4 million sequentially to $304 million, primarily due to onetime expenses in the prior quarter relating to Aquadrill acquisition and subsequent integration. This translated into adjusted EBITDA of $151 million, resulting in a margin of 36.5%. Net income for the third quarter was $90 million or $1.10 per diluted share. Now on to the balance sheet and cash flow statement. As of September 30, 2023, Seadrill gross principal debt of $625 million, comprising $575 million in secured second lien notes and $50 million in unsecured convertible notes. The second lien notes were issued at our refinancing in July, raising net proceeds of approximately $230 million after redeeming the existing secured debt. At the same time, we established a new first lien revolving facility of $225 million, which remains undrawn. At the end of the quarter, we had approximately $837 million of unrestricted cash. This includes $82 million of cash previously pledged as collateral for a tax case in Brazil. This case remains ongoing, but we are able to agree a new arrangement, thereby unrestricting this cash. Total CapEx for the third quarter was $61 million. Approximately half of this was long-term maintenance and the other half related to rig equipment additions. In line with US GAAP, long-term maintenance costs are included in operating activities on the cash flow statement. The $61 million of total CapEx represents a sequential increase of $24 million compared to the prior quarter, driven by long lead items led to oncoming SPSs. Looking ahead to the fourth quarter, we do expect a quarter-on-quarter uptick once again. Cash flow from operations was $112 million for the third quarter. This represents a sequential increase in operational cash flow of $92 million compared to the prior quarter as we were no longer impacted by adverse one-off working capital movements. Moving to our updated full year guidance for 2023. Our total revenues are now expected to be between $1.495 and $1.515 billion, while our adjusted EBITDA range has also increased now $485 million to $505 million. The increase primarily relates to strong operational performance across the fleet, planned maintenance moving to 2024 and a higher number of operating days on the West Polaris. With our year-to-date results and the updated guidance range, you’ll note that we anticipate a sequential decrease in adjusted EBITDA in the fourth quarter. This is mainly driven by planned out-of-service time for maintenance, higher operating costs related to special projects, fewer operating days on the Sevan Louisiana and higher personnel costs due to our initiatives to retain talent in an increasingly tight labor market. Lastly on the CapEx guidance, our CapEx range now stands at $185 million to $205 million for 2023, a reduction compared to prior guidance. However, this is largely a timing issue as opposed to a permanent reduction in CapEx altogether. And as such, we do expect these items will push into next year. Next, I’d like to take a moment to provide more color on our upcoming SPS and rig maintenance schedule. These projects can affect our financials on two fronts. First, out-of-service time to undertake the work negatively affects revenue and in turn earnings; and second, CapEx has an impact on cash flows. Looking forward to next year, the Sevan Louisiana and West Neptune will each have an estimated 45 days out-of-service. We expect to undertake regulatory work on the West Phoenix at some point following the conclusion of the Vela Energy contract. And elsewhere across the fleet, we anticipate SPS-related work to be completed on our four drillships in Brazil but with no associated out-of-service time. Despite this, we do expect to be cash flow positive next year. Now I’d like to briefly comment on synergies for our Aquadrill acquisition. As Samir outlined, we recently secured work for the West Vela with QuarterNorth. This campaign start-up will signify the return of the second of Aquadrill’s four drillships to Seadrill, after the transition of the West Polaris in the first quarter of 2024. What’s more, we expect West Auriga and West Capella to return after their respective contracts next year, while the West Carina semi-submersible transition back to us earlier this year, which remains cold stacked. Overall, we continue to be on track to realize the previously guided synergies. Furthermore, as part of our continued efforts to simplify the organization, following the sale of Paratus Energy Services earlier this year, we have now terminated the associated management agreements, subject to limited transition services that we expect to finish in the fourth quarter. Turning to our share repurchases. As Simon touched on earlier, we initiated a $250 million program in mid-September. As of last Friday, we had repurchased 6.2% of our share capital of 5 million shares at an average of $42.76 per share. This translates to a total value of $213 million. We’re delighted with both the speed and realized price level to date and we anticipate concluding the program in the next few weeks, subject to market conditions. Next, we’ve announced today that Seadrill’s Board of Directors has increased our share repurchase authorization by a further $250 million taking the aggregate authorization to $500 million. Any purchases we make in connection with this additional authorization will be at the discretion of our Board and in accordance with our capital allocation principles. We cannot predict when or if we’ll make any purchases under this facility. We are proud to be a shareholder-friendly company, as we have said before, returning capital to shareholders is central to our capital allocation strategy. And with that, we’ll open up for Q&A. Operator, over to you. See also 25 Most Affordable Places to Retire in the World and 20 Highest Paying Jobs in Europe for Non EU Citizens. Q&A Session Follow Seadrill Ltd (NYSE:SDRL) Follow Seadrill Ltd (NYSE:SDRL) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question comes from Greg Lewis from BTIG. Please go ahead. Your line is open. Greg Lewis: Yes. Thank you and good afternoon and good morning. Thanks for taking my question. I was hoping to get a little bit more color on the market. Really what I’m wondering is [Technical Difficulty] Simon Johnson : Hey, Greg, come here. Can you speak up? Greg Lewis: Hey, sir. Simon Johnson : We can’t hear you. Greg Lewis: Sure. Is this better? Simon Johnson : Yes. Thank you. Greg Lewis: Okay. Hey, guys. Thanks. Sorry about that. I was hoping to get some comments on the broader market, clearly, white space has been something that’s been talked about, congrats on getting that QuarterNorth contract in the Gulf of Mexico. It looks like maybe there’s going to be 30, 40 days a downtime in between. As you look at the market in 2024, realizing there is activity coming, but there’s always looks like to be a little bit of a timing issue. Any kind of broad strokes how we should be thinking about idle time between contracts as rigs roll off? Simon Johnson : Yes. Thanks for the question, Greg. Perhaps let me kick off and then I’ll pass to Samir. So look, I think the thing to realize is that markets evolve through time. They really take a straight path. We’re not concerned by what we see as a near term supply congestion, the fundamentals are just so strong. So what’s most important for us is to see consistent measured improvement in demand. That’s what we’re focused on, and that’s what the market is delivering through time. I think it’s important to reflect on the fact that day rates are now almost back to pre-downturn levels, the sort of levels that we were seeing in Q1 2014, Q4 2013. So there’s been tremendous improvement since early 2021. But most of the momentum has obviously been delivered over the last two years. So I think there’s — that’s not always a straight walk, and what we’re seeing is just a short-term fluctuation. Samir Ali : Yes, Greg, the only thing I’d add is we’ve been pretty consistent that there was some churn and some headwinds kind of coming early, probably first half of next year, as we go into the second half of next year in 2025, demand is starting to stack up and looks pretty good. So I think it is transitory. And I think I’d reiterate, we’ve been pretty consistent that we saw it coming, and it’s not a surprise to us. Greg Lewis: Yes. No, absolutely. And then I did have — I was hoping to get a little bit more color on the Louisiana, that’s kind of the semi in the Gulf of Mexico. As you kind of look at the opportunities, one of the things we’ve been hearing is just given the configuration structure of the rig, it might be better suited in an area like West Africa. Any kind of thoughts around that? And really what I’m kind of wondering is, if it were to leave — since it’s not a drillship, if were to leave the Gulf of Mexico and relocate, any kind of color around the time it would take to reposition that rig and maybe some expenses if that is indeed what could happen for that rig as you market it globally? Samir Ali: Yes, sure. So, I’d say she is a unique design, but she’s well-loved around here. I’d say we are marketing her globally, obviously. She will roll off contract next month as I said in my prepared remarks. We’re looking at — she’s got an SPS too and then after that, we’re looking at opportunities both in the Gulf and abroad. I’d say for us, if we’re going to move it, we’re going to try to get the customer to pay for it. So, for us, it’s a value maximization and we’re not going to limit ourselves to one market with that asset. Greg Lewis: Okay. Operator: Our next question comes from Eddie Kim from Barclays. Please go ahead, your line is open. Eddie Kim: Hi, good morning. Just wanted to get your preliminary thoughts on 2024, if I could. The current consensus has you pegged at around $510 million in EBITDA, just based on where things stand today, do you believe that’s a fairly reasonable estimate? Or would a lot of things sort of need to break your way in order to hit that target? Grant Creed: Hey Eddie, thanks for the question. And look, I’ll say that we’re not in a position to provide guidance for next year, that’s really just because certain revenue and cost items are still in flux and really need to firm up before we can provide precise reliable guidance. I think doing anything now would be premature. So, I’d rather just stay away from that, if you don’t mind, on the call today. Eddie Kim: Okay. Understood. Second, just my follow-up is just a clarification on the day rate of well, Samir, you highlighted $45 million in backlog over three months, which works out to a day rate of exactly $500,000 a day on my math. First of all, is that math correct? And if so, is that a fairly clean day rate or does that $45 million in backlog include maybe some move fees or other services that would maybe take that clean day rate a bit lower? Samir Ali: So, we’re not going to get into the contract specifics, but we did say approximately around a lot of things. So, it is a well-based contract. So, things can ebb and flow is what I tell you. Eddie Kim: Okay. Okay. Understood. All right, that was all I had. I’ll turn it back. Thank you. Operator: Our next question comes from Fredrik Stene from Clarkson Securities. Please go ahead, your line is open. Fredrik Stene: Hey guys. Hope you are well. Solid quarter and good to see that you continue to return cash or at least you’re paying your shareholders through share repurchases. I have a couple of questions. You have — starting actually with the jackups that you announced earlier this year that you were in the process of selling at least having advanced discussions with customers, as you said, now they’re no longer held for sale and you have — you’re in no rush to sell them. Are you able to give some color on whether or not that’s because your price expectations have changed or because the potential counterpart expectations or willingness to pay have changed......»»
5 Most Respected Professions in the US
In this article, we will look at the 5 most respected professions in the US. We have also discussed about the big giants that are helping to reduce the work burden for these professions. If you are interested in reading about that along with a more extensive list, head straight to the 20 Most Respected […] In this article, we will look at the 5 most respected professions in the US. We have also discussed about the big giants that are helping to reduce the work burden for these professions. If you are interested in reading about that along with a more extensive list, head straight to the 20 Most Respected Professions in the US. 5. Military Officers IM Score: 35 In the United States, military personnel, especially officers, are held in high regard, with their profession considered among the most prestigious. Public opinion has evolved over time, reaching its peak of admiration in the late 1990s. Despite fluctuations tied to specific wars, the military maintains a massive level of respect, as indicated by favorable opinions from diverse demographic groups in the country......»»
After years of building up its navy, Saudi Arabia is testing its new warships with real-world missions
The Saudis are changing how their navy operates in response to growing threats and out of a desire to rely less on the US for defense. Royal Saudi Naval Force frigate Makkah in the Bab el-Mandeb Strait in November 2022.US Navy/MCS3 Louis Thompson Staats IV Saudi Arabia has invested heavily in its navy in recent years, buying a number of new warships. Riyadh has also demonstrating more willingness to participate in and even lead maritime task forces. The moves are a response to growing threats and reflect a desire to rely less on the US for defense. Saudi Arabia's naval forces have come a long way in recent years, with Riyadh acquiring more advanced warships and demonstrating increasing willingness to participate in and even lead maritime task forces in the Persian Gulf.That change reflects Saudi investment in its own military in response to a growing array of threats in the region, as well as Riyadh's desire to reduce its dependence on the US to defend Saudi territory and interests.The Royal Saudi Naval Forces made a departure from their "decades-long reputation as a reluctant naval power" by taking command of two naval task forces in the region — belonging to the Combined Maritime Forces and International Maritime Security Construct, respectively — in late August, which showed "a significant turnaround" in Riyadh's "maritime thinking," Leonardo Jacopo Maria Mazzucco, an analyst at Gulf State Analytics, wrote for the Stimson Center in October.A US Navy officer waves to Royal Saudi Naval Force corvette HMS Badr during an exercise in the Persian Gulf in December 2022.US Navy/MCS3 Louis Thompson Staats IVThe kingdom has long relied on US protection and military support, as the Saudi military has primarily focused on countering air and land threats and lacks well-trained personnel.But as the asymmetric threats facing Saudi Arabia from rivals like Iran and the Houthi rebels in Yemen have proliferated, Riyadh has proved increasingly willing to reduce its dependency on Washington as a guarantor of its security.Mazzucco noted Saudi Arabia is taking tangible steps to modernize its fleet and demonstrate its capabilities to use its new warships in "real-world scenarios," which include "scaling up its contributions to US-led maritime security coalitions" and taking on a "more prominent role" in protecting sea routes along its lengthy coasts.In recent years, the Saudi navy primarily consisted of Al-Madinah and Al-Riyadh-class frigates supplemented by Badr-class corvettes and Al-Siddiq-class patrol vessels, many commissioned in the 1980s.The corvette Al Jubail is launched at Navantia's shipyard in Cádiz on July 22, 2020.Juan Carlos Toro/Getty ImagesRiyadh is modernizing that fleet with five new Avante 2200-class corvettes, ordered from Spain in 2018 under a contract valued at $1.79 billion. These warships come equipped with torpedoes, Harpoon anti-ship missiles, RIM-162 air-defense missiles, and a 76mm gun capable of engaging air and surface targets.The first of the Spanish-built corvettes, Al Jubail, arrived at the Saudi naval base in Jeddah in August 2022. Riyadh expects to receive all five vessels by 2024. They will join the Saudi Western Fleet, responsible for protecting Saudi Arabia's vast Red Sea coastline, where the Yemen-based Houthis have repeatedly threatened international shipping and foreign warships.The Western Fleet isn't the only Saudi naval force receiving shiny new warships. The Saudi Eastern Fleet expects to begin receiving the four Multi-Mission Surface Combatant ships it ordered as part of a $1.96 billion contract awarded to Lockheed Martin in 2019.The MMSC vessels are based on the Freedom-class littoral combat ship and will be the most sophisticated vessels in the Eastern Fleet when they enter service in the second half of this decade.Patrol boats for Saudi Arabia at a German shipyard in April 2019.Stefan Sauer/picture alliance via Getty ImagesProcuring such warships and taking the lead in multilateral naval task forces demonstrates Riyadh's commitment to remain a formidable naval power in the region.In the 1970s, the Nixon administration outsourced security in the Persian Gulf to Iran under the last Shah, who built the most powerful naval force in the region and dominated that small but strategically important body of water, mainly with frigates acquired from the UK. Before his regime fell in 1979, the Shah envisioned Iranian warships patrolling along East Africa and, ultimately, the Indian Ocean.Iran's naval power was greatly diminished during the Iran-Iraq War in the 1980s. During that decade, Saudi Arabia initiated the first Saudi Naval Enhancement Program, which equipped its navy with modern American, French, and British warships.The current buildup, called Saudi Naval Enhancement Program II, or SNEP II, is the most significant one since then.HMS Badr in the Persian Gulf in December 2020.US Navy/MCS3 Louis Thompson Staats IVOn the other side of the Gulf, Iran is investing more in its powerful Islamic Revolutionary Guard Corps paramilitary force than in its regular armed forces.Unlike Iran's conventional navy, which has a standard fleet of frigates and corvettes, the IRGC Navy uses speed boats and primarily trains for hit-and-run operations against bigger, better-equipped adversaries.Saudi Arabia's gradual expansion and modernization of its naval forces under SNEP II is meant to improve its ability to monitor and patrol the waters around and defend against possible attacks by Iran or its proxies.The buildup doesn't mean Saudi Arabia expects or seeks war with Iran or is looking to win an arms race and displace Iranian naval power. What Riyadh's investments and increasingly active role in the region indicate is a desire to be equipped and prepared to respond to crises, threats, or conflicts without having to wait for the American cavalry to come to its rescue.Paul Iddon is a freelance journalist and columnist who writes about Middle East developments, military affairs, politics, and history. His articles have appeared in a variety of publications focused on the region.Read the original article on Business Insider.....»»
I drove Nevada"s Extraterrestrial Highway. No one got abducted, but it was one of the strangest experiences of my life.
During our trip down the Extraterrestrial Highway, we peered inside the Black Mailbox, and explored Rachel, Nevada, the closest town to Area 51. The Extraterrestrial Highway comprises 98 miles of Nevada's State Route 375. Agnes GroonwaldI spent a day traveling the Extraterrestrial Highway, 98 miles of alien fun in the Nevada desert.The town of Rachel, Nevada, is the quintessential road-trip stop for alien enthusiasts.I didn't see any flying saucers, but this stretch of road is still one of the quirkiest in the US.I'm no stranger to weird road trips in my travels.As a product of the generation that grew up on "Unsolved Mysteries" and "The X-Files," I'm also naturally predisposed to the unexplained.So when I heard we'd be within a short drive of Nevada's Extraterrestrial Highway on a recent trip through the state, visiting was a no-brainer.The 98 miles of Nevada's State Route 375 have been known as the Extraterrestrial Highway since an official name change by the state's tourism commission in 1996.The road's proximity to Area 51, a top-secret government base that many believe to be home to extraterrestrial secrets, is one reason alien enthusiasts flock to the area.Although we didn't see anything hovering above, we did encounter some other weird sights along the way.Our first stop was E.T. Fresh Jerky in Hiko, NevadaWe stopped at E.T. Fresh Jerky in Hiko, Nevada.Agnes GroonwaldMy husband and I started our road trip in Las Vegas.We traveled north along US Route 93 for just under two hours until we hit Hiko, Nevada, a farming community of about 120 people outside of Crystal Springs.Both Hiko and Crystal Springs can be found on lists of ghost towns in the area. After watching a loose cow cross the road with not much else in either direction, we could see why.Before hitting the fork at State Route 318 and State Route 375, the official start of the Extraterrestrial Highway, we fueled up on treats at E.T. Fresh Jerky.We knew we were there when we saw the giant saucer outside.The giant saucer outside of E.T. Fresh Jerky helped us find our way.Agnes GroonwaldThe decor inside was very much on theme, with life-sized aliens manning dozens of different types of jerky, spicy nuts, and dried fruit.We couldn't leave E.T. Fresh Jerky without making a purchase. Agnes GroonwaldAfter acquiring some whisky-BBQ beef jerky, we ate our purchase in the car. Mid-bag, we spotted a pair of travelers that we thought were about to stock up on jerky for their own adventure.Instead, they removed a bucket and shovel from the bed of their truck and started digging right outside the snack shop.As they filled up their pail, we heard a large boom in the distance and decided that was more than enough intrigue so early in the drive.We didn't engage further with the diggers or the noise, but the whole scene set the stage for an even stranger trip than we'd expected.Next, we hit the highway's 'welcome' centerAt the welcome center, we were greeted by a giant metal alien.Agnes GroonwaldThe Alien Research Center is a gift shop known for carrying alien-themed souvenirs like T-shirts, mugs, hats, and even tequila.Unfortunately, it was closed during our trip there, so we had to settle for posing with the giant metal alien outside.We stopped by the Black Mailbox, where visitors can leave messages for aliensThe Black Mailbox allows visitors to leave messages for the aliens. Agnes GroonwaldCurving past the Mount Irish Wilderness, we nearly missed our next stop, the Black Mailbox. For many, this box marks the best way to reach any aliens that have taken the Extraterrestrial Highway for a whirl.A peek inside the box revealed the best of Americana. If aliens landed here to retrieve their mail, they'd find we love Pop-Tarts, "Rugrats" cartoons, and Jack in the Box.There was an actual letter inside, but reading someone's personal notes to their friends above felt invasive — especially since I didn't have any of my own treats and secrets to leave behind.We spent time in Rachel, Nevada, which was filled with odditiesRachel, Nevada, is the closest town to Area 51. The government officially uses the base as a flight testing facility, but many alien enthusiasts believe the base holds the country's extraterrestrial secrets.All I know is you don't want to get anywhere near Area 51. It's manned by military personnel, and they don't offer tours.On our way to Rachel, we passed by one of two Extraterrestrial Highway signs. The one covered in stickers is one of the most photographed stops in the area.One of the two iconic Extraterrestrial Highway signs is covered in stickers.Agnes GroonwaldWhile in Rachel, we stopped at the Alien Cowpoke Gas & General Store, a shop that only sometimes serves gas.The Alien Cowpoke Gas & General Store made for a bizarre stop in Rachel, Nevada. Agnes GroonwaldThe gas pumps were not working when we were there, which reminded us why travelers are advised to fill up their tanks before hitting the road.A car out front appeared to hide a family of aliens. I didn't get too close.I found a family of aliens inside a car outside the Alien Cowpoke Gas & General Store.Agnes GroonwaldThe Little A'Le'Inn just up the road was more impressive. Here, guests can sleep, eat a world-famous Alien Burger, or just pull over to check out the town's time capsule, which was given to the people of Rachel from the producers of "Independence Day" after filming there.We had our pup in tow, so we kept our exploring to the outside. The truck parked out front looked like a survivor of some kind of abduction.The Little A'Le'Inn is an alien-lover's paradise.Agnes GroonwaldThe folks we interacted with here were all tourists trying to walk the same line we were.We weren't sure what we all believed, but if there was anywhere in the country that would be a hub for aliens, the middle of Nevada could definitely be it.The end of our adventure came at the second Extraterrestrial Highway sign at the fork with US Route 6.We hadn't had our fill of curiosities just yet, so we drove to Tonopah, Nevada, to check out the world-famous Clown Motel.They call themselves the scariest motel in America, but I'll have to take their word for it. I draw the line at clowns.Read the original article on Business Insider.....»»
Every US Military Armored Vehicle From Oldest to Newest
During World War II, the United States was dubbed the “arsenal of democracy” due to its unmatched industrial capabilities. Throughout the conflict, 86,000 tanks, 96,000 bombers, and 2.4 million trucks rolled off American assembly lines. This ushered in a new era of mechanized warfare. Prior to the U.S. formally declaring war on Japan and Germany […] The post Every US Military Armored Vehicle From Oldest to Newest appeared first on 24/7 Wall St.. During World War II, the United States was dubbed the “arsenal of democracy” due to its unmatched industrial capabilities. Throughout the conflict, 86,000 tanks, 96,000 bombers, and 2.4 million trucks rolled off American assembly lines. This ushered in a new era of mechanized warfare. Prior to the U.S. formally declaring war on Japan and Germany in December 1941, the federal government issued a request for proposal for auto manufacturers to design a go-anywhere, do-anything vehicle to supplant horses and mules in the Army. The original prototype was developed by Bantam and designed in just 18 hours by a freelance auto designer named Karl Probst. Due to manufacturing concerns, the US government eventually went with Ford and Willys-Overland. The result was the now iconic vehicle nicknamed “Jeep,” short for GP, or general-purpose vehicle. Ford and Willys-Overland produced over 600,000 Jeeps during the war. Since then, the U.S. has continuously developed and improved its fleet of overland military vehicles. (Here is a look at the U.S. military’s 15 future weapons.) 24/7 Wall St. reviewed a range of government websites and military publications, including militaryfactory.com, to identify each overland vehicle most widely used by the U.S. military. Vehicles are listed alphabetically. This list of every US military armored vehicle from oldest to newest is comprised of material and personnel carriers, tanks, and other assault vehicles. Some are highly specialized for certain environments and purposes. Others, like the Humvee, serve more general-purpose functions, and like the Jeeps of World War II, have themselves become iconic. (These are the newest guns to see everyday U.S. military use.) Here is every US armored vehicle from oldest to youngest. 1. AAV-7 (LVTP-7) Vehicle type: Amphibious assault vehicle (AAV) First Entered service: 1972 Crew size: 3 2. Amphibious Combat Vehicle (ACV) Vehicle type: Amphibious assault vehicle (AAV) First Entered service: 2019 Crew size: 3 3. Buffalo H Vehicle type: Mine-resistant, ambush-protected (MRAP) First Entered service: 2004 Crew size: 2 4. Cougar Vehicle type: Troop transport First Entered service: 2002 Crew size: 2 5. Flyer-72 ALSV (Advanced Light Strike Vehicle) Vehicle type: Special operations vehicle First Entered service: 2014 Crew size: 3 6. FMTV (Family of Medium Tactical Vehicles) Vehicle type: Military truck First Entered service: 1996 Crew size: 1 7. Heavy Expanded Mobility Tactical Truck Vehicle type: Military truck First Entered service: 1982 Crew size: 2 8. HMMWV (Humvee) Vehicle type: Multi-purpose wheeled vehicle First Entered service: 1985 Crew size: 1 9. Infantry Squad Vehicle (ISV) Vehicle type: Light utility vehicle First Entered service: 2021 Crew size: 2 10. LAV-25 Vehicle type: Light armored vehicle (LAV) First Entered service: 1983 Crew size: 3-9 11. M1 Abrams Vehicle type: Main battle tank First Entered service: 1980 Crew size: 4 12. M104 Wolverine Vehicle type: Armored vehicle-launched bridge (AVLB) First Entered service: 2003 Crew size: 2 13. M109 (Paladin) Vehicle type: Self-propelled artillery First Entered service: 1963 Crew size: 4 14. M1117 Guardian ASV Vehicle type: Armored security vehicle First Entered service: 1999 Crew size: 3 15. M113 APC Vehicle type: Armored personnel carrier First Entered service: 1960 Crew size: 2 16. M1150 Assault Breacher Vehicle Vehicle type: Battlefield engineering vehicle First Entered service: 2008 Crew size: 2 17. M1161 Growler Vehicle type: Fast attack vehicle First Entered service: 2009 Crew size: 3 18. M142 High Mobility Artillery Rocket System (HIMARS) Vehicle type: Multiple launch rocket system (MLRS) First Entered service: 2005 Crew size: 3 19. M2 Bradley Vehicle type: Infantry fighting vehicle (IFV) First Entered service: 1981 Crew size: 3 20. M270 Vehicle type: Multiple launch rocket system (MLRS) First Entered service: 1983 Crew size: 3 21. M60 AVLB Vehicle type: Armored vehicle-launched bridge (AVLB) First Entered service: 1967 Crew size: 2 22. M88 Hercules Vehicle type: Armored recovery vehicle (ARV) First Entered service: 1961 Crew size: 3 23. M9 ACE (Armored Combat Earthmover) Vehicle type: Military bulldozer First Entered service: 1986 Crew size: 1 24. M915A5 Vehicle type: Military tractor First Entered service: 2000 Crew size: 2 25. M93 Fox Vehicle type: Reconnaissance vehicle First Entered service: 1990 Crew size: 3 26. M939 Truck Vehicle type: Military truck First Entered service: 1982 Crew size: 1 27. M-ATV Vehicle type: Mine-resistant, ambush-protected (MRAP) First Entered service: 2009 Crew size: 5 28. MaxxPro Vehicle type: Mine-resistant, ambush-protected (MRAP) First Entered service: 2007 Crew size: 2 29. MIM-104 Patriot Vehicle type: Surface-to-air missile (SAM) First Entered service: 1981 Crew size: 12 30. RG-31 Nyala Vehicle type: Infantry mobility vehicle (IMV) First Entered service: 2006 Crew size: 2-8 31. RG-33 Vehicle type: Infantry mobility vehicle (IMV) First Entered service: 2007 Crew size: 2 32. Scorpion DPV (Desert Patrol Vehicle) Vehicle type: Lightweight all-terrain First Entered service: 1987 Crew size: 3 33. Special Operations Vehicle (SOV) Vehicle type: Light attack vehicle (LAV) First Entered service: 1992 Crew size: 3 34. Stryker Vehicle type: Armored fighting vehicle (AFV) First Entered service: 2002 Crew size: 3 Methodology 24/7 Wall St. reviewed a variety of military tech resources to identify the tracked and wheeled land vehicles in use by the U.S. military. This list does not include a number of utility vehicles, unmanned land vehicles, prototypes, or other miscellaneous vehicles that have not yet entered widespread military use. The majority of the vehicles on this list came from the military research site militaryfactory.com, and crew counts and the year the vehicle first entered service are from that source. 24/7 Wall St. narrowed militaryfactory’s list to reflect, whenever possible, vehicles being phased out or new vehicles being introduced. However, there are some facts for which conclusive information was not publicly available. We excluded variants of the same vehicle, such as the HMMWV, better known as the Humvee, of which there are several unique configurations in use by the armed forces. 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The US Military’s Biggest Weapons Programs
In a statement announcing the federal government’s fiscal 2023 budget, President Joe Biden quoted his father, saying: “Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.” And, as has been the case for decades, this year’s budget unambiguously positions the military near the top of the hierarchy […] The post The US Military’s Biggest Weapons Programs appeared first on 24/7 Wall St.. In a statement announcing the federal government’s fiscal 2023 budget, President Joe Biden quoted his father, saying: “Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.” And, as has been the case for decades, this year’s budget unambiguously positions the military near the top of the hierarchy of American values. At $857.9 billion in fiscal 2023, the U.S. defense budget surpasses that of the next 10 highest-spending countries combined – including China, Russia, India, the United Kingdom, and Ukraine. While the bulk of the U.S. military budget goes toward immediate needs – such as operations, maintenance, and personnel – a significant portion is allocated to more forward-looking initiatives. In anticipation of future challenges, and to better ensure America’s continued global military dominance, the Department of Defense spent $276.0 billion in the 2023 fiscal year researching, developing, testing, evaluating, and procuring weapons systems. This funding included a historic level of investment in space-based weapons, as well as significant year-over-year increases in spending on missile defense technology, shipbuilding, and munitions and missile procurement. (Here is a look at the 20 most lethal weapons in modern warfare.) Using data from the Department of Defense’s April 2023 Program Acquisition Cost By Weapon System report, 24/7 Wall St. identified the U.S. military’s biggest weapons programs. Weapons systems were ranked based on total funding — a composite of research, development, test and evaluation (RDT&E) and procurement costs — for the 2023 fiscal year. Data used to calculate the percentage change in funding from fiscal 2022 to fiscal 2023, as well as data on primary contractors by weapons system, are also from the report. Driven by a more than $26 billion investment in shipbuilding and maritime systems, the U.S. Navy was by far the largest recipient of RDT&E and procurement spending in 2023. Much of this money was spent on the Columbia Class Ballistic Missile Submarine and Virginia Class Submarine programs. The Air Force received the second largest share of funding, driven by $5.0 billion in investments in the B-21 Raider stealth bomber program, $3.6 billion on ground-based strategic deterrent missiles, and $3.5 billion on F-15 Eagle fighter aircraft. (Here is a look at the 26 military aircraft of the future.) Across all service branches, the DOD spent $24.7 billion on missiles and munitions and $12.3 billion on missile defense, more than in any year since at least 2010. The Pentagon has also been aggressively integrating the Space Force into America’s national security strategy over the last three years, and for the first time, annual Space Force RDT&E and procurement spending topped $20 billion in 2023. Here are the biggest weapons programs of the U.S. military. 50. LRASM Long Range Anti-Ship Missile FY 2023 budget: $464.3 million Change in funding, FY 2022 to FY 2023: +100.1% Weapons category: Missiles and Munitions Prime contractors: Lockheed Martin Missiles and Fire Control 49. PrSM Precision Strike Missile FY 2023 budget: $472.7 million Change in funding, FY 2022 to FY 2023: +33.3% Weapons category: Missiles and Munitions Prime contractors: Lockheed Martin Missiles and Fire Control 48. VC-25B Presidential Aircraft Recapitalization FY 2023 budget: $492.9 million Change in funding, FY 2022 to FY 2023: -24.8% Weapons category: Aircraft and Related Systems Prime contractors: The Boeing Company 47. MQ-9 Reaper FY 2023 budget: $496.9 million Change in funding, FY 2022 to FY 2023: -32.2% Weapons category: Aircraft and Related Systems Prime contractors: Aeronautical Systems Incorporated 46. V-22 Osprey FY 2023 budget: $615.1 million Change in funding, FY 2022 to FY 2023: -65.5% Weapons category: Aircraft and Related Systems Prime contractors: Bell Helicopter Textron, Incorporated 45. PIM Paladin Integrated Management FY 2023 budget: $629.7 million Change in funding, FY 2022 to FY 2023: -24.9% Weapons category: Ground Systems Prime contractors: BAE Systems 44. ACV Amphibious Combat Vehicle FY 2023 budget: $631.2 million Change in funding, FY 2022 to FY 2023: +6.2% Weapons category: Ground Systems Prime contractors: BAE Systems 43. M-1 Abrams Tank Modification/Upgrades FY 2023 budget: $717.6 million Change in funding, FY 2022 to FY 2023: -43.1% Weapons category: Ground Systems Prime contractors: General Dynamics Land Systems 42. CVN Refueling Complex Overhaul FY 2023 budget: $718.5 million Change in funding, FY 2022 to FY 2023: -72.9% Weapons category: Shipbuilding and Maritime Systems Prime contractors: Huntington Ingalls Industries 41. HMS Handheld, Manpack, and Small Form Fit Radios FY 2023 budget: $732.9 million Change in funding, FY 2022 to FY 2023: -2.7% Weapons category: C4I Systems Prime contractors: L3Harris Radio Corporation 40. AMRAAM Advanced Medium Range Air-to-Air Missile FY 2023 budget: $739.6 million Change in funding, FY 2022 to FY 2023: +148.3% Weapons category: Missiles and Munitions Prime contractors: Raytheon Missile & Defense 39. Stryker Stryker Family of Armored Vehicles FY 2023 budget: $742.4 million Change in funding, FY 2022 to FY 2023: -33.3% Weapons category: Ground Systems Prime contractors: General Dynamics Corporation 38. HH-60W Combat Rescue Helicopter FY 2023 budget: $769.1 million Change in funding, FY 2022 to FY 2023: -4.6% Weapons category: Aircraft and Related Systems Prime contractors: Sikorsky Aircraft Corporation 37. PATRIOT/PAC–3 PATRIOT Advanced Capability FY 2023 budget: $788.1 million Change in funding, FY 2022 to FY 2023: +25.3% Weapons category: Missile Defense Programs Prime contractors: Raytheon Integrated Defense Systems 36. AH-64E Apache: Remanufacture/New Build FY 2023 budget: $790.0 million Change in funding, FY 2022 to FY 2023: -33.2% Weapons category: Aircraft and Related Systems Prime contractors: The Boeing Company 35. Standard Standard Missile-6 FY 2023 budget: $809.1 million Change in funding, FY 2022 to FY 2023: -10.5% Weapons category: Missiles and Munitions Prime contractors: Raytheon Missiles & Defense 34. Tomahawk Tactical Tomahawk Cruise Missile FY 2023 budget: $867.1 million Change in funding, FY 2022 to FY 2023: +63.2% Weapons category: Missiles and Munitions Prime contractors: Raytheon Missiles & Defense 33. UH-60 Black Hawk FY 2023 budget: $897.2 million Change in funding, FY 2022 to FY 2023: -23.2% Weapons category: Aircraft and Related Systems Prime contractors: Sikorsky, A Lockheed Martin Company 32. JASSM Joint Air-to-Surface Standoff Missile FY 2023 budget: $960.7 million Change in funding, FY 2022 to FY 2023: +16.0% Weapons category: Missiles and Munitions Prime contractors: Lockheed Martin Missiles and Fire Control 31. T-AO 205 John Lewis Class Fleet Replenishment Oiler FY 2023 budget: $970.5 million Change in funding, FY 2022 to FY 2023: -38.3% Weapons category: Shipbuilding and Maritime Systems Prime contractors: General Dynamics, National Steel and Shipbuilding Co. 30. LRSO Long Range Stand-Off Weapon FY 2023 budget: $980.8 million Change in funding, FY 2022 to FY 2023: +63.7% Weapons category: Missiles and Munitions Prime contractors: Raytheon Company 29. GMLRS Guided Multiple Launch Rocket System FY 2023 budget: $999.8 million Change in funding, FY 2022 to FY 2023: -11.3% Weapons category: Missiles and Munitions Prime contractors: Lockheed Martin Corporation 28. PAC-3/MSE PAC-3/Missile Segment Enhancement FY 2023 budget: $1.0 billion Change in funding, FY 2022 to FY 2023: +34.4% Weapons category: Missile Defense Programs Prime contractors: Lockheed Martin Missiles and Fire Control 27. MQ-4C/RQ-4 Triton/Global Hawk/NATO AGS FY 2023 budget: $1.0 billion Change in funding, FY 2022 to FY 2023: +36.3% Weapons category: Aircraft and Related Systems Prime contractors: Northrop Grumman 26. JLTV Joint Light Tactical Vehicle FY 2023 budget: $1.1 billion Change in funding, FY 2022 to FY 2023: +1.0% Weapons category: Ground Systems Prime contractors: Oshkosh Defense, LLC 25. Chem-Demil Chemical Demilitarization FY 2023 budget: $1.1 billion Change in funding, FY 2022 to FY 2023: -3.1% Weapons category: Missiles and Munitions Prime contractors: Bechtel National Incorporated 24. C-130J Hercules FY 2023 budget: $1.1 billion Change in funding, FY 2022 to FY 2023: -71.0% Weapons category: Aircraft and Related Systems Prime contractors: Lockheed Martin Corporation 23. MQ-25 Stingray FY 2023 budget: $1.2 billion Change in funding, FY 2022 to FY 2023: +205.4% Weapons category: Aircraft and Related Systems Prime contractors: Boeing 22. B-1, B-2, B-52 Bombers FY 2023 budget: $1.2 billion Change in funding, FY 2022 to FY 2023: +22.3% Weapons category: Aircraft and Related Systems Prime contractors: Northrop Grumman Aerospace Systems 21. FFG(X) Constellation Class Guided Missile Frigate FY 2023 budget: $1.3 billion Change in funding, FY 2022 to FY 2023: +7.4% Weapons category: Shipbuilding and Maritime Systems Prime contractors: Fincantieri Marinette Marine 20. F-22 Raptor FY 2023 budget: $1.3 billion Change in funding, FY 2022 to FY 2023: +25.5% Weapons category: Aircraft and Related Systems Prime contractors: Lockheed Martin 19. E-2D Advanced Hawkeye FY 2023 budget: $1.3 billion Change in funding, FY 2022 to FY 2023: +10.6% Weapons category: Aircraft and Related Systems Prime contractors: Northrop Grumman Corporation 18. NSSL & RSLP Launch Enterprise FY 2023 budget: $1.6 billion Change in funding, FY 2022 to FY 2023: -9.4% Weapons category: Space Based Systems Prime contractors: SpaceX 17. SATCOM Projects Satellite Communications (SATCOM) Projects FY 2023 budget: $1.6 billion Change in funding, FY 2022 to FY 2023: +58.6% Weapons category: Space Based Systems Prime contractors: Lockheed Martin Corporation 16. Aegis Sea-Based Weapons System FY 2023 budget: $1.6 billion Change in funding, FY 2022 to FY 2023: -4.3% Weapons category: Missile Defense Programs Prime contractors: Lockheed Martin Corporation 15. Trident II Trident II Ballistic Missile Modifications FY 2023 budget: $1.7 billion Change in funding, FY 2022 to FY 2023: +7.1% Weapons category: Missiles and Munitions Prime contractors: Lockheed Martin Corporation 14. GPS III & Projects Global Positioning System Enterprise FY 2023 budget: $1.8 billion Change in funding, FY 2022 to FY 2023: -9.5% Weapons category: Space Based Systems Prime contractors: Raytheon Company 13. CH-53K Heavy Lift Replacement Helicopter FY 2023 budget: $2.3 billion Change in funding, FY 2022 to FY 2023: +12.4% Weapons category: Aircraft and Related Systems Prime contractors: Sikorsky Aircraft Corporation 12. GMD Ground-based Midcourse Defense FY 2023 budget: $2.6 billion Change in funding, FY 2022 to FY 2023: +55.5% Weapons category: Missile Defense Programs Prime contractors: Boeing Defense and Space 11. KC-46A Tanker FY 2023 budget: $2.9 billion Change in funding, FY 2022 to FY 2023: +22.3% Weapons category: Aircraft and Related Systems Prime contractors: The Boeing Company 10. CVN 78 Gerald R. Ford Class Nuclear Aircraft Carrier FY 2023 budget: $3.2 billion Change in funding, FY 2022 to FY 2023: +13.2% Weapons category: Shipbuilding and Maritime Systems Prime contractors: Huntington Ingalls Industries 9. Cyberspace Cyberspace Activities FY 2023 budget: $3.4 billion Change in funding, FY 2022 to FY 2023: +5.7% Weapons category: C4I Systems Prime contractors: Various 8. F-15 Eagle FY 2023 budget: $3.5 billion Change in funding, FY 2022 to FY 2023: +71.8% Weapons category: Aircraft and Related Systems Prime contractors: Boeing 7. GBSD Ground Based Strategic Deterrent FY 2023 budget: $3.6 billion Change in funding, FY 2022 to FY 2023: +41.1% Weapons category: Missiles and Munitions Prime contractors: Northrop Grumman Corporation 6. OPIR Space Based Missile Warning Systems FY 2023 budget: $4.7 billion Change in funding, FY 2022 to FY 2023: +86.8% Weapons category: Space Based Systems Prime contractors: Lockheed Martin 5. B-21 Raider FY 2023 budget: $5.0 billion Change in funding, FY 2022 to FY 2023: +69.1% Weapons category: Aircraft and Related Systems Prime contractors: Northrop Grumman Corporation 4. DDG 51 Arleigh Burke Class Destroyer FY 2023 budget: $5.6 billion Change in funding, FY 2022 to FY 2023: +32.2% Weapons category: Shipbuilding and Maritime Systems Prime contractors: General Dynamics Corporation 3. SSBN 826 Columbia Class Ballistic Missile Submarine FY 2023 budget: $6.3 billion Change in funding, FY 2022 to FY 2023: +21.1% Weapons category: Shipbuilding and Maritime Systems Prime contractors: General Dynamics 2. SSN 774 Virginia Class Submarine FY 2023 budget: $7.3 billion Change in funding, FY 2022 to FY 2023: +5.2% Weapons category: Shipbuilding and Maritime Systems Prime contractors: General Dynamics Corporation 1. F-35 Joint Strike Fighter FY 2023 budget: $11.0 billion Change in funding, FY 2022 to FY 2023: -7.7% Weapons category: Aircraft and Related Systems Prime contractors: Lockheed Martin Corporation Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post The US Military’s Biggest Weapons Programs appeared first on 24/7 Wall St.......»»
Elon Musk thinks OpenAI may have made a dangerous discovery — and that"s behind the Sam Altman drama
Elon Musk questioned why Sam Altman was initially ousted from OpenAI during an interview on Wednesday. Elon Musk questioned why Sam Altman was initially ousted from OpenAI.Michael M. SantiagoElon Musk said he's concerned OpenAI discovered a "dangerous element" of AI.The billionaire said he has "mixed feelings" about OpenAI CEO Sam Altman.Musk has warned about the dangers of AI in the past.Elon Musk has some theories about why Sam Altman was initially ousted from OpenAI.Despite initially helping found OpenAI, Musk told Andrew Sorkin during an interview at the Dealbook Summit on Wednesday that he doesn't have an inside scoop on the drama involving Altman's abrupt departure and equally quick return, but he's "concerned" about what it means for artificial intelligence."I have mixed feelings about Sam. The ring of power can corrupt," Musk said, evoking "The Lord of the Rings."Musk added that he wanted to know why OpenAI cofounder and chief scientist Ilya Sutskever "felt so strongly as to fight Sam. That sounds like a serious thing. I don't think it was trivial. And I'm quite concerned that there's some dangerous element of AI that they've discovered," he added.A spokesperson for OpenAI did not immediately respond to a request for comment.It's still unclear why the board attempted to push Altman out. Business Insider's Kali Hays previously reported that OpenAI employees were told Altman was fired due to a statement he'd made to the board regarding personnel, but employees did not appear to buy the reasons they were given.Altman was briefly ousted from OpenAI by the organization's six-person board of directors earlier this month. He was welcomed back to the company five days later after the majority of OpenAI employees threatened to quit if Altman was not brought back.Sutskever was one of the board members who initially voted to oust Altman. Though, he later appeared to backtrack on the issue.Musk defended Sutskever after he faced criticism for his involvement in Altman's ousting and the billionaire told CNBC earlier this year that he was initially responsible for hiring Sutskever to OpenAI. Musk left the company's board in 2018 and has since created an OpenAI competitor called X.ai.On Wednesday, Musk said he believes Sutskever has a "strong moral compass.""He really sweats it over questions of what is right," Musk told Sorkin. "And if Ilya felt strongly enough to want to fire Sam. Well, I think the world should know what was that reason."Musk and Altman have traded barbs on social media in the past.Earlier this month, Altman implied that Musk's AI bot, a competitor to OpenAI's ChatGPT, was "cringey boomer humor."The billionaire has also warned in the past that companies need to be cautious with technology involving AI as it could pose "a danger to the public."Read the original article on Business Insider.....»»
Night Of The Living Ed: Zombie Public Schools, Drained Of Pandemic Lifeblood, Haunt The Land
Night Of The Living Ed: Zombie Public Schools, Drained Of Pandemic Lifeblood, Haunt The Land Authored by Vince Bielski via RealClear Wire, Call them “zombie” schools. A significant but unknown number of public schools across the U.S., particularly in big cities, have lost so many students in the last half-decade that many of their classrooms sit empty. Gone is the loud clatter of students bursting through crowded hallways and slamming lockers. The harm from these half-empty schools is inflicted directly on all students in a district. Without enough per-pupil state funding to cover their costs, they require financial subsidies to remain open, forcing district-wide cutbacks in academic programs. “I visited one school that takes up an entire city block but there were only five classrooms used, plus a library, a computer room, and an afterschool room,” said Sam Davis, a member of the Board of Education in Oakland, California. “As our budget officer said, if you don’t have enough students for two teams to play kickball, there are a lot of other academic activities that are not going to be sustainable either.” But nothing in public education is more controversial and difficult than closing a neighborhood school. The protests that recently flared up in cities like Oakland and Denver over proposals to shut low-enrollment schools, which also tend to be the worst academic performers in districts, are just a prelude of the reckoning to come, according to interviews with school leaders, researchers, educators, and charter officials. The permanent closure of schools slowed drastically during the pandemic, even though many urban districts suffered a major exodus of students, with double-digit losses in New York City and Los Angeles. Many hollowed-out districts have temporarily sidestepped the tempest of shutting schools because Congress provided them with a historic windfall of pandemic-related funding and wide latitude in spending it, said Georgetown Professor Marguerite Roza, who directs the Edunomics Lab. But the $190 billion lifeline – called the Elementary and Secondary School Emergency Relief Fund – ends next September. So school leaders are facing mounting pressure to shrink their oversized districts, setting up the next battleground over public schools. “Many districts have too many schools, not enough kids, and are propping them up with federal relief funds,” Roza said. “And they haven’t laid the groundwork for closures when the funding goes away. Imagine the anger and protests when families learn suddenly that their schools are on the list to close.” With aid flowing during the pandemic, districts shut an average of 810 schools a year in 2021 and 2022, according to the National Center for Education Statistics. That’s far less than the 1,350 average from 2011 to 2020, a difference that underscores the magnitude of the problem of zombie schools. Why Schools Are Hard to Close In the business and nonprofit sectors, wasteful spending is typically reined in by downsizing operations into fewer buildings and personnel. But public schools often find protection from the calls for efficiency. The first wave of pandemic-era proposals to shut schools in several districts has been countered by a formidable coalition of local advocates, forcing school boards to backpedal on their consolidation plans. Families are leading the protests at school board meetings. Some have sentimental ties to neighborhood schools that go back generations, and others cite transportation issues in switching to another location that’s further from home. Teachers unions have joined the fight in Oakland and other cities, arguing that closures pose unfair labor practices. And racial justice advocates have succeeded in reframing the issue as a matter of equality rather than wasteful spending since nearly all the schools to be closed serve mostly black and Latino kids. Districts like Seattle that aim to shutter schools often cite reasons that are out of their control. The birth rate has been dropping since 2007, according to federal data, chipping away at enrollment. Families are also leaving cities like Los Angeles and Chicago because of the rising cost of living and concerns over crime and homelessness. San Francisco, for instance, lost 7.5% of its population between 2020 and 2022, according to the census. But public schools share in the blame. With test scores on the Nation’s Report Card in decline since 2012, families have been quitting traditional schools in search of a better education and a safer environment at charters, micro, and home schools. Charter enrollment, for instance, grew 7% from 2020 to 2022, while district schools lost 3.5% of students, according to the National Alliance of Public Charter Schools. School districts can’t do anything about the birth rate. But many of them do control the fate of charters. In Los Angeles and other cities facing closures, school boards that formerly encouraged the expansion of charters have grown hostile toward them and blocked their expansion, in part to preserve their own enrollment. How Zombie Schools Hurt Education Some districts are now devising proposals to close under-enrolled facilities because of the financial burden they create. Even a school at half capacity needs a principal, support and food service staff, custodians, and sometimes a nurse, librarian, and counselor. Education is highly labor-intensive, with compensation comprising at least 85% of a school’s expenses, Georgetown’s Roza says. Since zombie schools don’t cover their own expenses, superintendents have to pull resources from other schools and programs to subsidize them. Funding for art, music, special education, and advanced placement classes may be cut, affecting students throughout the district. “In the end, districts have to spread resources too thinly, across too many buildings, and nobody gets served well,” Roza says. In Denver, Superintendent Alex Marrero detailed the financial benefit of shutting schools in a memo to families last year. In proposing to close 10 out of about 155 traditional and innovation schools – one of which had only 93 students – Marrero said the cost to the district to subsidize them was $5 million annually. That money was pulled from healthier schools and programs. But if the 10 skeletal schools were closed, the superintendent added, the district could hire an additional 50 full-time employees to benefit students. The financial logic of school closures has won the day in some districts. Indianapolis announced it was shutting six schools in May to promote the efficient use of taxpayer funding and higher student achievement. St. Louis said it would lock the gates on eight schools, some of them half-empty, two years ago. The city of Jackson, Miss., may approve a sweeping closure plan in December. The superintendent is calling for the elimination of more than a quarter of its 55 district schools after community outcries scuttled plans over the years to close under-enrolled facilities. “The closures are long overdue and I think they will happen,” says Rachel Canter, executive director of Mississippi First, a nonpartisan education policy group. “The reality is that the population has declined so much that Jackson cannot support the number of schools it has and provide a quality education.” Opponents Prevail in Oakland But in many cities, schools that are almost empty shells are protected from closing. Consider the heated battle in Oakland. The performance of the Oakland school district, which is two-thirds Latino and black, is among the worst in California: Just 25% of students meet or exceed math standards, and only 33% reach this bar in English. The poor results have contributed to a steady drop in enrollment to about 34,000 last year from more than 50,000 two decades ago. Many students left for charters, which now educate about a quarter of students in Oakland. To improve performance, the district had set up a number of small schools with about 400 kids. That provided enough funding for a couple of teachers at each grade, as well as art and music programs, to create a rich learning environment. That’s now mostly gone. “Several of our campuses have dwindled to what I call micro schools that are each under 250 students, with only one class at every grade level and without much enrichment,” said Davis, the school board member. “We no longer have that robust environment for teachers or students.” The urgency for Oakland to close schools, in addition to buildings it shut years ago, is underscored by the state takeover of the district in 2003 to prevent bankruptcy. The district is still paying off the bailout loan, so wasting money on under-enrolled schools could prompt another intervention by its Alameda County overseer. To stave off more financial trouble, the board approved a plan in 2022 to shut or merge 11 schools, beginning with two that year. The savings would give the district a chance to reinvigorate the remaining schools with more teachers and programs. But weeks of community demonstrations and a hunger strike by a group of protestors culminated in the election of new board members who opposed school closures. Two of the winners were backed by the Oakland Education Association teachers’ union. In January, the new board hastily overturned the earlier vote on closures, saving five schools from shuttering without considering the financial impact in apparent violation of its own policy. Sasha Ritzie-Hernandez, who has numerous relatives attending Oakland schools, helped rally thousands of protesters to keep them open. She says the schools targeted by the board were disproportionally black and low-income and questioned whether the savings would actually benefit students or get absorbed in what she considers a bloated district bureaucracy. “I oppose closing schools,” said Ritzie-Hernandez, who lost a race for an open board seat in November. “Families in Oakland didn’t feel like they were involved in the decision-making process, so we mobilized parents to the board meetings because there was not robust community engagement.” The decision to keep the schools open adds at least $5 million a year to the district’s budget, forcing the board to consider across-the-board cuts to its 78 schools, which could only add to their struggles. Up Next: Denver The Denver school district is now in the throes of a closures fight after enrollment has suffered from a declining birth rate and gentrification. While Latinos make up the biggest group of students, their families are having fewer children. At the same time, rising housing costs are pushing lower-income families out of the city, and young couples without kids are moving in. The district is becoming whiter and smaller. Enrollment peaked in 2019 at about 94,000 students and has fallen each year to 89,000 in 2022, according to the district. It projects it will lose thousands more students in the next few years. When birth rates fall, elementary schools are emptied first. At the beginning of the year, the Board of Education expected that 15 district-run elementary and middle schools would have fewer than 215 students. Two elementary schools would have fewer than 120 students and not enough incoming kindergarteners to form a viable class. After more than a year of gathering community feedback and analysis by an advisory committee, Superintendent Marrero, in the fall of 2022, recommended closing 10 of the 15 schools with fewer than 215 students. Nine of them were predominately Latino and black. In the racial politics of Denver, the plan drew swift blowback from families and some members of the school board, which was entirely backed by the influential Denver Classroom Teachers Association. Vice President Auon’tai Anderson declared in the media that the closure plan was a “tactic of white supremacy culture” – despite the fact that it was developed by a Latino superintendent. Bowing to pressure, several weeks later, Marrero was expected to cut the list in half to five schools, targeting those that required the largest subsidies. Instead, he chopped the list to just two schools. Still, that wasn’t good enough. The school board rejected the slimmed-down plan, saying more input from the community was needed. A few months later, in early 2023, as the financial burden of zombie schools sank in, the board finally acted, closing just three of them. What will happen to the rest of the under-enrolled schools is anyone’s guess. This month, Denver voters signaled they wanted a more moderate school board, electing three new members – none of them backed by the teachers union – to the seven-person panel. One new member is the former CEO of a charter network in Colorado who has expressed support for closing under-enrolled schools. If Denver shutters more schools, it will likely happen slowly over many years, says William Anderson, a former public school teacher in the city who’s now on the faculty at the University of Denver. “Maybe they close three next year, and see if it’s working the way they expected, and then they tweak the process before closing three more,” he says. Charters on the Firing Line As a subplot in the battle over vacated schools, districts in Oakland and Denver have rejected several requests by charters to expand. While that may help protect a district’s funding, it’s not good for families looking for better options for educating their children. Charters, which are publicly funded but privately managed, have been particularly effective in accelerating the academic growth of low-income students, outperforming traditional schools by a significant margin, according to a 2023 study by the Center for Research on Education Outcomes (CREDO) at Stanford. This is true in Denver, according to a separate CREDO study of the city, where charters make up about a quarter of all public schools. DSST, a charter network in Denver with waiting lists for many of its schools, stands out. It won national acclaim for the outstanding academic results of its disadvantaged students, 80% of whom are Latino or black. All of its graduates have been admitted to college since 2008, according to its website. Yet DSST’s expansion in Denver has come to an abrupt halt. It last started a school in 2021, and that required the charter to appeal to the state after the school board sought to delay the opening for years. Since 2020, the Denver board has received three requests for new charter schools and rejected all of them, citing the potential difficulties they would have in recruiting students and other reasons, according to board memos. “The local school board has been controlled by members who are hostile to authorizing new charter schools,” says Todd Ziebarth, senior vice president for state advocacy at the National Alliance for Public Charter Schools. “While Colorado’s law does create an appeals process, the time-consuming nature of it can serve as a deterrent to growth." In Oakland, the school board has rejected two charter proposals it has received since 2020: a new school was denied because it didn’t have a sound educational program, and an expansion was shot down because of the financial impact on the district from losing more students to the charter, said Davis, the board member. Even Yu Ming, the top performing K-8 public school in Alameda County, which includes Oakland, encountered resistance in its request to grow its enrollment in the city. Students in the Mandarin immersion charter—30% of whom are low-income—performed about three times better than Oakland students on a 2022 state test, an extraordinary margin. Although Yu Ming has a waiting list, the Oakland board passed a resolution to compel the county, which controls the charter, to allow it to expand into a neighboring city. “The problem is that if we expand enrollment at charter schools, including the highly successful ones, that contributes to the decreasing enrollment in the district and leads to us closing more neighborhood schools, which is very painful,” Davis said. But the benefit to students who would have enrolled in an expanded charter like Yu Ming could be significant. One of the most effective ways to deal with the chronic academic problems of low-income students is simply to put them in a better school. That alone makes a big difference, according to a CREDO study of school closures in 26 states. The research showed that students – particularly blacks and Latinos – who transferred to superior schools made greater academic gains than their peers who remained in poorly performing schools. But a little less than half of the displaced students were moved to higher quality schools, which are in short supply in many cities. Margaret Raymond, the CREDO director, says local boards closing facilities should also focus on finding ways to transfer students to better schools, including charters, even if districts take a financial hit. “The lesson is that choosing the worst schools to close is probably a good thing, but that’s only half the exercise,” Raymond said. “Districts also have to figure out how to marshal those kids into settings where they have a chance of recovering academically.” Tyler Durden Wed, 11/29/2023 - 16:20.....»»
The 11 Newest American Military Bases Stateside
More than 1.3 million active-duty personnel serve in the U.S. military. While about 160,000 of them are deployed abroad, the majority are stationed at one of over 450 military installations in the U.S. Some military bases date back to the 1700s, but the majority were built in the first part of the 20th century, around […] The post The 11 Newest American Military Bases Stateside appeared first on 24/7 Wall St.. More than 1.3 million active-duty personnel serve in the U.S. military. While about 160,000 of them are deployed abroad, the majority are stationed at one of over 450 military installations in the U.S. Some military bases date back to the 1700s, but the majority were built in the first part of the 20th century, around the time of the two world wars. A few are also considerably newer. (Also see: This is the newest American military base overseas.) To find America’s newest military bases, constructed since 1950, 24/7 Wall St. reviewed and independently verified the history of active military installations listed on MilitaryBases.com. Bases were ordered by the year they opened, from least to most recently opened. The number of active-duty personnel assigned to each base came from the 2019 Demographics Report, compiled by Defense Department contractor Military OneSource. Installations with less than 1,000 active duty personnel or where that data is classified, or those outside the 50 states were not considered. Newly joined bases were also not included. For the most part, military installations can last centuries with regular maintenance, modernization, and expansions, which perhaps explains why just 11 new bases have been built since 1950. This includes the U.S. Marine Corps Ground Combat Center in 29 Palms, California, which was opened in 1952 during the Korean War. (These are the biggest U.S. military bases.) All of the most recent U.S. domestic military bases are Navy or Air Force. The Schriever Space Force Base in El Paso County, California, originally was built as an Air Force installation in 1985 but renamed in 2021 to reflect its new orbital defense objectives. It is not, however, the newest of the 11 newest military bases. Here are the 11 newest military bases in the U.S. 11. Marine Corps Air Ground Combat Center Twentynine Palms Year opened: 1952 Location: Twentynine Palms, California Total active-duty personnel: 9,490 Military branch: Marines This base was built at the site of a former airbase used to train glider crews and Army pilots during World War II and was later as a bombing range for the U.S. Navy. The U.S. Marine Corps took over the site in 1952 as a training center. Today, the combined arms training facility also trains Marines in communications and electronics. 10. Little Rock Air Force Base Year opened: 1955 Location: Jacksonville, Arkansas Total active-duty personnel: 3,536 Military branch: Air Force Little Rock AFB is not only home to the largest fleet of C-130s, this base is also home to numerous wings and groups of the U.S. Air Force, including the 19th Airlift Wing that can deploy massive transport aircraft throughout the world. The base trains aircrews, including members of the Coast Guard and service members from dozens of foreign nations. 9. Naval Submarine Base Kings Bay Year opened: 1979 Location: Camden County, Georgia Total active-duty personnel: 2,918 Military branch: Navy The NSB Kings Bay is the home port for the U.S. Navy Atlantic Fleet’s ballistic missile nuclear subs armed with Trident nuclear missiles. The base is the home port for six Ohio-class Trident submarines and the USS Florida and USS Georgia guided missile subs. 8. Grand Forks Air Force Base Year opened: 1957 Location: Grand Forks, North Dakota Total active-duty personnel: 1,659 Military branch: Air Force The Grand Forks AFB is home to the 319th Reconnaissance Wing, which provides operational and infrastructural support for the Global Hawk high-altitude remotely piloted surveillance aircraft. The Global Hawk is still used over Afghanistan in intelligence, reconnaissance, and surveillance operations following the U.S. pullout of ground forces in August 2021. 7. Minot Air Force Base Year opened: 1957 Location: Ward County, North Dakota Total active-duty personnel: 5,625 Military branch: Air Force The Minot AFB is the headquarters of the 5th Bomb Wing Mission and its fleet of B-52H Stratofortress bombers, which can be deployed anywhere in the world to deliver precision nuclear-guided bombs and other types of ordnance and munitions. Base units also maintain and operate the Minuteman III ICBMs located in underground launch facilities scattered across the northwest part of the state as well as other advanced cruise missiles. 6. Naval Air Station Meridian Year opened: 1961 Location: Meridian, Mississippi Total active-duty personnel: 1,126 Military branch: Navy Initially opened as an airfield in 1961, the NASM grew to become an official Naval Air Station in 1967. It is one of the U.S. Navy’s air strike fighter pilot training centers and operates a military airport for this purpose. The base also has a counterdrug training center and a support center for naval operations. 5. Naval Air Station Lemoore Year opened: 1961 Location: Kings County, Fresno County, California Total active-duty personnel: 6,590 Military branch: Navy NAS Lemoore was initially established to support the U.S. Navy Pacific Fleet and provides support to the Strike Fighter Wing Pacific that maintains combat-ready carrier- or shore-based warplanes in the Pacific Rim. Lemoore was identified as an ideal central California location because it has ideal year-round weather for aircraft deployment and less air traffic. 4. Los Angeles Air Force Base Year opened: 1964 Location: El Segundo, California Total active-duty personnel: 1,435 Military branch: Space Force The Los Angeles AFB was first designated as an Air Force air station on the site of a former air research development command center dating back to 1954. It was re-designated as an Air Force base in 1987. The base includes Fort MacArthur, 20 miles to the south of the main base. The base supports U.S. Space Force operations. 3. Naval Support Activity Saratoga Springs Year opened: 1974 Location: Saratoga Springs, New York Total active-duty personnel: 3,000 Military branch: Navy NSA Saratoga Springs supports naval command activities in New York’s Capital Region in upstate New York. The base provides support to the nearby Naval Propulsion Training Unit in Ballston Spa, New York, one of two facilities used to train officers in the design, operation, and maintenance of nuclear propulsion systems used by submarines and aircraft carriers. 2. Schriever Space Force Base Year opened: 1985 Location: El Paso County, Colorado Total active-duty personnel: 1,853 Military branch: Space Force Though the U.S. Space Force was established in 2019 as the eighth and most recent U.S. military branch, the Schriever Space Force Base was always intended to be part of military space programs dating back to the 1970s when the Department of Defense sought to consolidate operations involving military satellites. The name of the base was changed in 2021 to reflect its realigned affiliation from the Air Force to the new Space Force. 1. Naval Station Everett Year opened: 1994 Location: Everett, Washington Total active-duty personnel: 2,576 Military branch: Navy NS Everett was selected as an ideal location on the West Coast for homeporting a naval battle group. The base is currently the home port of seven guided missile destroyers, including the USS John McCain, and two Coast Guard ships used for patrolling the Northwest coast and tending to navigational buoys. Sponsored: Want to Retire Early? Here’s a Great First Step Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances? Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free. Click here to match with up to 3 financial pros who would be excited to help you make financial decisions. The post The 11 Newest American Military Bases Stateside appeared first on 24/7 Wall St.......»»
US Military Aircraft Crashes Into Ocean Near Japanese Island With Eight On Board, Coast Guard Confirms
The aircraft had eight personnel onboard when it went down near Yakushima Island. read more.....»»