Baidu Granted Permits To Operate Humanless Robotaxis In Beijing

(All amounts in U.S. dollars. Per share information based on diluted shares outstanding unless otherwise noted.) TORONTO, Jan. 25, 2023 (GLOBE NEWSWIRE) -- Celestica Inc. (TSX:CLS) (NYSE:CLS), a leader in design, manufacturing, hardware platform and supply chain solutions for the world's most innovative companies, today announced financial results for the quarter ended December 31, 2022 (Q4 2022)†. "Celestica finished with a strong fourth quarter and had an outstanding 2022, resulting in 46% year-over-year non-IFRS adjusted EPS* growth. Our ability to successfully execute on our long-term strategy has allowed us to win in markets where we see opportunity for long-term, profitable growth," said Rob Mionis, President and CEO, Celestica. "For the full year, we achieved $7.25 billion in revenue, a 29% increase over 2021 and our highest annual non-IFRS operating margin* and non-IFRS adjusted EPS* in our company's history." "We are very pleased with the strength and consistency of our financial results. This performance is made possible by the exceptional efforts of the global Celestica team, in the context of a challenging environment. As we look ahead to 2023, we expect to build on the successes of this past year, and continue to advance our long-term goals of generating revenue growth and improving our profitability." Q4 2022 Highlights Key measures: Revenue: $2.04 billion, increased 35% compared to $1.51 billion for the fourth quarter of 2021 (Q4 2021). Non-IFRS operating margin*: 5.3%, compared to 4.9% for Q4 2021. ATS segment revenue: increased 30% compared to Q4 2021; ATS segment margin was 4.4%, compared to 5.6% for Q4 2021. CCS segment revenue: increased 39% compared to Q4 2021; CCS segment margin was 5.9%, compared to 4.4% for Q4 2021. Adjusted earnings per share (EPS) (non-IFRS)*: $0.56, compared to $0.44 for Q4 2021. Adjusted return on invested capital (ROIC) (non-IFRS)*: 20.7%, compared to 16.6% for Q4 2021. Adjusted free cash flow (non-IFRS)*: $42.6 million, compared to $35.6 million for Q4 2021. IFRS financial measures (directly comparable to non-IFRS measures above): Earnings from operations as a percentage of revenue: 4.0%, compared to 3.3% for Q4 2021. EPS: $0.35, compared to $0.26 for Q4 2021. Return on invested capital (IFRS ROIC): 15.7%, compared to 11.1% for Q4 2021. Cash provided by operations: $101.3 million, compared to $65.8 million for Q4 2021. Repurchased 1.2 million subordinate voting shares (SVS) for cancellation for $12.0 million. † Celestica has two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 25 to our 2021 audited consolidated financial statements, included in our Annual Report on Form 20-F for the year ended December 31, 2021 (2021 20-F), available at www.sec.gov and www.sedar.com, for further detail.* Non-International Financial Reporting Standards (IFRS) financial measures (including ratios based on non-IFRS financial measures) do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar financial measures presented by other public companies that report under IFRS or U.S. generally accepted accounting principles (GAAP). See "Non-IFRS Supplementary Information" below for information on our rationale for the use of non-IFRS financial measures. See Schedule 1 for, among other items, non-IFRS financial measures included in this press release, their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures, and a description of recent modifications to: (i) the IFRS financial measures to which non-IFRS operating earnings and non-IFRS operating margin are reconciled; and (ii) the IFRS financial measure on which the measure we refer to as IFRS ROIC is based. Prior period reconciliations and calculations included herein reflect the current presentation. Schedule 1 also includes a description of the anticipated modification of specified non-IFRS financial measures (by the addition of a newly-applicable exclusion) for future periods. The most directly-comparable IFRS financial measures to non-IFRS operating margin, non-IFRS adjusted EPS, non-IFRS adjusted return on invested capital and non-IFRS adjusted free cash flow are earnings from operations as a percentage of revenue, EPS, IFRS ROIC, and cash provided by operations, respectively. First Quarter of 2023 (Q1 2023) Guidance   Q1 2023 Guidance Revenue (in billions)         $1.725 to $1.875 Non-IFRS operating margin*         5.0% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions)         $56 to $58 Adjusted EPS (non-IFRS)*         $0.41 to $0.47 For Q1 2023, we expect a negative $0.22 to $0.28 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges; and a non-IFRS adjusted effective tax rate* of approximately 21% (which does not account for foreign exchange impacts or unanticipated tax settlements). 2023 Outlook Following our solid performance in 2022, we are pleased to reaffirm our 2023 outlook of: revenue of at least $7.5 billion; non-IFRS operating margin* of between 4.5% and 5.5%; and target non-IFRS adjusted EPS* of between $1.95 and $2.05. Achievement of the midpoint of our 2023 non-IFRS adjusted EPS* range would represent a two-year non-IFRS adjusted EPS* average annual growth rate of 24% for 2022 and 2023(1). Looking beyond 2023, our average annual non-IFRS adjusted EPS* growth objective continues be 10%+ for 2024 and 2025. Although we have incorporated the anticipated impact of supply chain constraints into the foregoing financial guidance and outlook to the best of our ability, their adverse impact (in terms of duration and severity) cannot be estimated with certainty, and may be materially in excess of our expectations. * See Schedule 1 for the definitions of these non-IFRS financial measures. We do not provide reconciliations for forward-looking non-IFRS financial measures, as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various events that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact the most directly comparable forward-looking IFRS financial measure. For these same reasons, we are unable to address the probable significance of the unavailable information. Forward-looking non-IFRS financial measures may vary materially from the corresponding IFRS financial measures. See Schedule 1 for a description of the anticipated modification of specified non-IFRS financial measures (by the addition of a newly-applicable exclusion) for future periods. (1) Further, achievement of this midpoint would represent the achievement of the 2025 non-IFRS adjusted EPS* target disclosed in our March 24, 2022 press release, putting us ahead of the trajectory set forth therein. Summary of Selected Q4 2022 Results   Q4 2022 Actual   Q4 2022 Guidance (2) Key measures:       Revenue (in billions) $ 2.04     $1.875 to $2.025 Non-IFRS operating margin*   5.3 %   5.1% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions) $ 68.5     $64 to $66 Adjusted EPS (non-IFRS)* $ 0.56     $0.49 to $0.55         Directly comparable IFRS financial measures:       Earnings from operations as a % of revenue   4.0 %   N/A SG&A (in millions) $ 77.1     N/A EPS (1) $ 0.35     N/A             * See Schedule 1 for, among other things, the definitions of, and exclusions used to determine, these non-IFRS financial measures, a reconciliation of such non-IFRS financial measures to the most directly comparable IFRS financial measures for Q4 2022, and a description of recent modifications to the IFRS financial measures to which non-IFRS operating earnings and non-IFRS operating margin are reconciled. Schedule 1 also includes a description of the anticipated modification of specified non-IFRS financial measures (by the addition of a newly-applicable exclusion) for future periods. (1) IFRS EPS of $0.35 for Q4 2022 included an aggregate charge of $0.21 (pre-tax) per share for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges. See the tables in Schedule 1 and note 10 to our December 31, 2022 unaudited interim condensed consolidated financial statements (Q4 2022 Interim Financial Statements) for per-item charges. This aggregate charge was at the high end of our Q4 2022 guidance range of between $0.15 to $0.21 per share for these items. IFRS EPS for Q4 2022 included a $0.03 per share negative impact arising from taxable temporary differences associated with the anticipated repatriation of undistributed earnings from certain of our Chinese subsidiaries (Repatriation Expense), a $0.02 per share negative impact attributable to restructuring charges, and a $0.01 per share negative taxable foreign exchange impact arising from the fluctuation of the Chinese renminbi relative to the U.S. dollar (Currency Impact). IFRS EPS of $0.26 for Q4 2021 included a $0.06 per share negative impact attributable to other charges (consisting most significantly of a $0.02 per share negative impact attributable to restructuring charges, and a $0.02 per share negative impact attributable to specified credit facility-related charges, each as described in note 10 to the Q4 2022 Interim Financial Statements), and as a result of supply chain constraints and COVID-19-related workforce expenses and constraints, an $0.08 per share negative impact attributable to estimated Constraint Costs (defined as both direct and indirect costs, including manufacturing inefficiencies related to lost revenue due to our inability to secure materials, idled labor costs, and incremental costs for labor, expedite fees and freight premiums, cleaning supplies, personal protective equipment, and/or IT-related services to support our work-from-home arrangements). IFRS EPS for Q4 2021 also included the following tax impacts: a favorable tax impact related to the geographical mix of our profits, a $0.01 per share positive impact attributable to a deferred tax recovery recorded in connection with the revaluation of certain temporary differences using the future effective tax rate of our Thailand subsidiary related to the then-forthcoming reduction of the income tax exemption rate in 2022 under an applicable tax incentive (Revaluation Impact) and a $0.02 per share negative impact arising from taxable temporary differences associated with the anticipated repatriation of undistributed earnings from certain of our Chinese subsidiaries (Repatriation Expense), each as described in note 11 to the Q4 2022 Interim Financial Statements. (2) For Q4 2022, our revenue and non-IFRS adjusted EPS exceeded the high end of our guidance ranges, and our non-IFRS operating margin exceeded the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges, driven by continued strong demand across the majority of our businesses and improved materials availability in some markets relative to expectations. Non-IFRS adjusted SG&A for Q4 2022 was higher than our guidance range due to the impact of foreign exchange. Our IFRS effective tax rate for Q4 2022 was 32%. Our non-IFRS adjusted effective tax rate for Q4 2022 was 23%, higher than our anticipated estimate of approximately 21%, mainly due to repatriation expense, partially offset by favorable jurisdictional profit mix. Summary of Selected Full Year 2022 Results 2022 was another successful year for Celestica, in which we continued to demonstrate solid performance, including the following achievements: Key measures Revenue: $7.25 billion, compared to $5.63 billion in 2021, an increase of 29%. Non-IFRS operating margin*: 4.9%, compared to 4.2% for 2021, an improvement of 70 basis points. Adjusted EPS (non-IFRS)*: $1.90, compared to $1.30 for 2021, a growth rate of 46%. Adjusted ROIC (non-IFRS)*: 17.5%, compared to 13.9% for 2021, a growth of 360 basis points. IFRS financial measures (directly comparable to non-IFRS measures above): IFRS earnings from operations as a percentage of revenue: 3.6%, compared to 3.0% for 2021, an improvement of 60 basis points. IFRS EPS(1): $1.18, compared to $0.82 per share for 2021, a growth rate of 44%. IFRS ROIC: 12.9%, compared to 10.0% for 2021, a growth of 290 basis points. (1) IFRS EPS of $1.18 for 2022 included: (i) a $0.05 per share net negative impact attributable to other charges (recoveries) (consisting most significantly of a $0.07 per share negative impact attributable to restructuring charges and a $0.01 per share negative impact attributable to Transition Costs, partially offset by a $0.03 per share positive impact attributable to Transition Recoveries (each defined in Schedule 1)); (ii) a $0.03 per share negative impact attributable to estimated Constraint Costs; (iii) a $0.03 per share negative Currency Impact; and (iv) a $0.03 per share negative Repatriation Expense, all offset in part by a $0.04 per share favorable tax impact attributable to the reversal of tax uncertainties in one of our Asian subsidiaries. See notes 10 and 11 to the Q4 2022 Interim Financial Statements. IFRS EPS of $0.82 for 2021 included a $0.25 per share negative impact attributable to Constraints Costs, an $0.08 per share negative impact attributable to net other charges (consisting most significantly of a $0.08 per share negative impact attributable to net restructuring charges and a $0.06 per share negative impact attributable to acquisition costs, offset in part by an $0.08 per share positive impact attributable to legal recoveries, as described in note 10 to the Q4 2022 Interim Financial Statements), all offset in part by an aggregate $0.09 per share positive impact attributable to approximately $11 million of government subsidies, grants and credits related to COVID-19 and $1 million of customer recoveries related to COVID-19. IFRS EPS for 2021 also included the following tax impacts: a $0.06 per share positive impact attributable to the Revaluation Impact, offset in large part by a $0.05 per share negative impact attributable to a Repatriation Expense (each as described in note 11 to the Q4 2022 Interim Financial Statements). * See Schedule 1 for, among other things, the definitions of, and exclusions used to determine, these non-IFRS financial measures, a reconciliation of such non-IFRS financial measures to the most directly comparable IFRS financial measures for 2022 and 2021, and a description of recent modifications to: (i) the IFRS financial measures to which non-IFRS operating earnings and non-IFRS operating margin are reconciled; and (ii) the IFRS financial measure on which the measure we refer to as IFRS ROIC is based. Prior period reconciliations and calculations included herein reflect the current presentation. Schedule 1 also includes a description of the anticipated modification of specified non-IFRS financial measures (by the addition of a newly-applicable exclusion) for future periods. Acceptance of Normal Course Issuer Bid On December 8, 2022, the Toronto Stock Exchange accepted our notice to launch a new NCIB (2022 NCIB). The 2022 NCIB allows us to repurchase, at our discretion, from December 13, 2022 until the earlier of December 12, 2023 or the completion of purchases thereunder, up to approximately 8.8 million SVS in the open market, or as otherwise permitted, subject to the normal terms and limitations of such bids. See note 9 to the Q4 2022 Interim Financial Statements. Q4 2022 Webcast Management will host its Q4 2022 results conference call on January 26, 2023 at 8:00 a.m. Eastern Standard Time (EST). The webcast can be accessed at www.celestica.com. Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS financial measures to consider in evaluating the company's operating performance. Management uses adjusted net earnings and other non-IFRS financial measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's business; and to set management incentive targets. We believe investors use both IFRS and non-IFRS financial measures to assess management's past, current and future decisions associated with our priorities and our allocation of capital, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact our core operations. See Schedule 1 below. About Celestica Celestica enables the world's best brands. Through our recognized customer-centric approach, we partner with leading companies in Aerospace and Defense, Communications, Enterprise, HealthTech, Industrial, and Capital Equipment to deliver solutions for their most complex challenges. As a leader in design, manufacturing, hardware platform and supply chain solutions, Celestica brings global expertise and insight at every stage of product development - from the drawing board to full-scale production and after-market services. With talented teams across North America, Europe and Asia, we imagine, develop and deliver a better future with our customers. For more information on Celestica, visit www.celestica.com. Our securities filings can be accessed at www.sedar.com and www.sec.gov. Cautionary Note Regarding Forward-looking Statements This press release contains forward-looking statements, including, without limitation, those related to: our anticipated financial and/or operational results and outlook, including statements made, and guidance and outlook provided, under the headings "First Quarter of 2023 (Q1 2023) Guidance" and "2023 Outlook"; our credit risk; our liquidity; anticipated charges and expenses, including restructuring charges; the potential impact of tax and litigation outcomes; mandatory prepayments under our credit facility; and interest rates. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "continues," "project," "target," "goal," "potential," "possible," "contemplate," "seek," or similar expressions, or may employ such future or conditional verbs as "may," "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and for forward-looking information under applicable Canadian securities laws. Forward-looking statements are provided to assist readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including, among others, risks related to: customer and segment concentration; price, margin pressures, and other competitive factors and adverse market conditions affecting, and the highly competitive nature of, the electronics manufacturing services (EMS) industry in general and our segments in particular (including the risk that anticipated market conditions do not materialize); delays in the delivery and availability of components, services and/or materials, as well as their costs and quality; challenges of replacing revenue from completed, lost or non-renewed programs or customer disengagements; our customers' ability to compete and succeed using our products and services; changes in our mix of customers and/or the types of products or services we provide, including negative impacts of higher concentrations of lower margin programs; managing changes in customer demand; rapidly evolving and changing technologies, and changes in our customers' business or outsourcing strategies; the cyclical and volatile nature of our semiconductor business; the expansion or consolidation of our operations; the inability to maintain adequate utilization of our workforce; defects or deficiencies in our products, services or designs; volatility in the commercial aerospace industry; integrating and achieving the anticipated benefits from acquisitions and "operate-in-place" arrangements; the potential loss of PCI Private Limited (PCI) customers as a result of the recent fire at our Batam facility in Indonesia (Batam Fire); an inability to fully recover our tangible losses caused by the Batam Fire through insurance claims; compliance with customer-driven policies and standards, and third-party certification requirements; challenges associated with new customers or programs, or the provision of new services; the impact of our restructuring actions and/or productivity initiatives, including a failure to achieve anticipated benefits therefrom; negative impacts on our business resulting from our third-party indebtedness; the incurrence of future restructuring charges, impairment charges, other unrecovered write-downs of assets (including inventory) or operating losses; managing our business during uncertain market, political and economic conditions, including among others, global inflation and/or recession, and geopolitical and other risks associated with our international operations, including military actions, protectionism and reactive countermeasures, economic or other sanctions or trade barriers, including in relation to the Russia/Ukraine conflict; disruptions to our operations, or those of our customers, component suppliers and/or logistics partners, including as a result of events outside of our control (including those described in "External Factors that May Impact our Business" in Item 5 of our 2021 20-F); the scope, duration and impact of the COVID-19 pandemic and materials constraints; changes to our operating model; rising commodity, materials and component costs as well as rising labor costs and changing labor conditions; execution and/or quality issues (including our ability to successfully resolve these challenges); non-performance by counterparties; maintaining sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; negative impacts on our business resulting from any significant uses of cash, securities issuances, and/or additional increases in third-party indebtedness (including as a result of an inability to sell desired amounts under our uncommitted accounts receivable sales program or supplier financing programs); foreign currency volatility; our global operations and supply chain; competitive bid selection processes; customer relationships with emerging companies; recruiting or retaining skilled talent; our dependence on industries affected by rapid technological change; our ability to adequately protect intellectual property and confidential information; increasing taxes (including as a result of global tax reform), tax audits, and challenges of defending our tax positions; obtaining, renewing or meeting the conditions of tax incentives and credits; the management of our information technology systems, and the fact that while we have not been materially impacted by computer viruses, malware, ransomware, hacking attempts or outages, we have been (and may in the future be) the target of such events; the inability to prevent or detect all errors or fraud; the variability of revenue and operating results; unanticipated disruptions to our cash flows; compliance with applicable laws and regulations; our pension and other benefit plan obligations; changes in accounting judgments, estimates and assumptions; our ability to maintain compliance with applicable credit facility covenants; interest rate fluctuations and the discontinuation of LIBOR; our entry into a total return swap transaction; our ability to refinance our indebtedness from time to time; deterioration in financial markets or the macro-economic environment, including as a result of global inflation and/or recession; our credit rating; the interest of our controlling shareholder; current or future litigation, governmental actions, and/or changes in legislation or accounting standards; negative publicity; the impermissibility of SVS repurchases, or a determination not to repurchase SVS under any NCIB; the impact of climate change; and our ability to achieve our environmental, social and governance (ESG) initiative goals, including with respect to climate change and greenhouse gas emissions reduction. The foregoing and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our most recent MD&A, our 2021 Annual Report on Form 20-F filed with, and subsequent reports on Form 6-K furnished to, the U.S. Securities and Exchange Commission, and as applicable, the Canadian Securities Administrators. The forward-looking statements contained in this press release are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: continued growth in our end markets; growth in manufacturing outsourcing from customers in diversified end markets; no significant unforeseen negative impacts to our operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS industry in general or our segments in particular, as well as those related to the following: the scope and duration of materials constraints (i.e., that they do not materially worsen) and the COVID-19 pandemic and their impact on our sites, customers and suppliers; our ability to fully recover our tangible losses caused by the Batam Fire through insurance claims; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success of our customers' products; our ability to retain programs and customers; the stability of currency exchange rates; supplier performance and quality, pricing and terms; compliance by third parties with their contractual obligations; the costs and availability of components, materials, services, equipment, labor, energy and transportation; that our customers will retain liability for product/component tariffs and countermeasures; global tax legislation changes; our ability to keep pace with rapidly changing technological developments; the timing, execution and effect of restructuring actions; the successful resolution of quality issues that arise from time to time; the components of our leverage ratio (as defined in our credit facility); our ability to successfully diversify our customer base and develop new capabilities; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding SVS under NCIBs, compliance with applicable credit facility covenants; anticipated demand levels across our businesses; the impact of anticipated market conditions on our businesses; that global inflation and/or recession will not have a material impact on our revenues or expenses; our ability to achieve the expected long-term benefits from our PCI acquisition; and our maintenance of sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities. Although management believes its assumptions to be reasonable under the current circumstances, they may prove to be inaccurate, which could cause actual results to differ materially (and adversely) from those that would have been achieved had such assumptions been accurate. Forward-looking statements speak only as of the date on which they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.    All forward-looking statements attributable to us are expressly qualified by these cautionary statements. Schedule 1 Supplementary Non-IFRS Financial Measures The non-IFRS financial measures (including ratios based on non-IFRS financial measures) included in this press release are: adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, non-IFRS operating earnings (or adjusted EBIAT), non-IFRS operating margin (non-IFRS operating earnings or adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted EPS, adjusted return on invested capital (adjusted ROIC), adjusted free cash flow, adjusted tax expense and adjusted effective tax rate. Adjusted EBIAT, adjusted ROIC, adjusted free cash flow, adjusted tax expense and adjusted effective tax rate are further described in the tables below. Prior to the second quarter of 2022 (Q2 2022), adjusted free cash flow was referred to as free cash flow, but has been renamed. Its composition remains unchanged. In addition, prior to Q2 2022, non-IFRS operating earnings (adjusted EBIAT) was reconciled to IFRS earnings before income taxes, and non-IFRS operating margin was reconciled to IFRS earnings before income taxes as a percentage of revenue, but commencing in Q2 2022, are reconciled to IFRS earnings from operations, and IFRS earnings from operations as a percentage of revenue, respectively (as the most directly comparable IFRS financial measures). This modification did not impact either resultant non-IFRS financial measure. Since non-IFRS adjusted ROIC is based on non-IFRS operating earnings, in comparing this measure to the most directly-comparable financial measure determined using IFRS measures (which we refer to as IFRS ROIC), commencing in the third quarter of 2022 (Q3 2022), our calculation of IFRS ROIC is based on IFRS earnings from operations (instead of IFRS earnings before income taxes). This modification did not impact the determination of non-IFRS adjusted ROIC. Prior period reconciliations and calculations included herein reflect the current presentation. In Q4 2022, we entered into a total return swap (TRS). Similar to employee stock-based compensation (SBC) expense, quarterly fair value adjustments of our TRS (TRS FVAs) will be classified in SG&A expenses and costs of sales in our consolidated statement of operations. The TRS FVAs will be excluded in our determination of the following non-IFRS financial measures included herein: adjusted gross profit, adjusted SG&A, non-IFRS operating earnings, non-IFRS operating margin, adjusted net earnings and adjusted EPS (for the reasons described below). However, as the impact of TRS FVAs on our Q4 2022 Interim Financial Statements was de minimis, no such exclusion was applicable to such non-IFRS financial measures in either Q4 2022 or FY 2022. In calculating our non-IFRS financial measures, management excludes the following items (where indicated): employee SBC expense, TRS FVAs, amortization of intangible assets (excluding computer software), Other Charges, net of recoveries (defined below), and specified Finance Costs (defined below) paid, all net of the associated tax adjustments (quantified in the table below), and non-core tax impacts (tax adjustments related to acquisitions, and certain other tax costs or recoveries related to restructuring actions or restructured sites). We believe the non-IFRS financial measures we present herein are useful to investors, as they enable investors to evaluate and compare our results from operations in a more consistent manner (by excluding specific items that we do not consider to be reflective of our core operations), to evaluate cash resources that we generate from our business each period, and to provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. In addition, management believes that the use of a non-IFRS adjusted tax expense and a non-IFRS adjusted effective tax rate provide improved insight into the tax effects of our core operations, and are useful to management and investors for historical comparisons and forecasting. These non-IFRS financial measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of our core operations. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies that report under IFRS, or who report under U.S. GAAP and use non-GAAP financial measures to describe similar financial metrics. Non-IFRS financial measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any IFRS financial measure. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS financial measures are nonetheless recognized under IFRS and have an economic impact on us. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of our performance, and reconciling non-IFRS financial measures back to the most directly comparable financial measures determined under IFRS. The economic substance of these exclusions described above (where applicable to the periods presented) and management's rationale for excluding them from non-IFRS financial measures is provided below: Employee SBC expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee SBC expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do. TRS FVAs represent mark-to-market adjustments to our TRS, as the TRS is recorded at fair value at each quarter end. We exclude the impact of these non-cash fair value adjustments (both positive and negative), as they reflect fluctuations in the market price of our SVS from period to period, and not our ongoing operating performance. In addition, we believe that excluding these non-cash adjustments permits a better comparison of our core operating results to those of our competitors. Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance. Other Charges, net of recoveries, consist of, when applicable: Restructuring Charges, net of recoveries (defined below); Transition Costs (Recoveries) (defined below); net Impairment charges (defined below); consulting, transaction and integration costs related to potential and completed acquisitions, and charges or releases related to the subsequent re-measurement of indemnification assets or the release of indemnification or other liabilities recorded in connection with acquisitions, when applicable; legal settlements (recoveries); specified credit facility-related charges; and post-employment benefit plan losses. We exclude these charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities or incurrence of the relevant costs. Our competitors may record similar charges at different times, and we believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these types of charges, net of recoveries, in assessing operating performance. Restructuring Charges, net of recoveries, consist of costs relating to: employee severance, lease terminations, site closings and consolidations, write-downs of owned property and equipment which are no longer used and are available for sale and reductions in infrastructure. Transition Costs consist of costs recorded in connection with: (i) the transfer of manufacturing lines from closed sites to other sites within our global network; and (ii) the sale of real properties unrelated to restructuring actions (Property Dispositions). Transition Costs in prior periods also included costs in connection with the relocation of our Toronto manufacturing operations and corporate headquarters in connection with the 2019 sale of our former Toronto real property. Transition Costs consist of direct relocation and duplicate costs (such as rent expense, utility costs, depreciation charges, and personnel costs) incurred during the transition periods, as well as cease-use and other costs incurred in connection with idle or vacated portions of the relevant premises that we would not have incurred but for these relocations, transfers and dispositions. Transition Recoveries consist of any gains recorded in connection with Property Dispositions. We believe that excluding these costs and recoveries permits a better comparison of our core operating results from period-to-period, as these costs or recoveries do not reflect our ongoing operations once these specified events are complete. Impairment charges, which consist of non-cash charges against goodwill, intangible assets, property, plant and equipment, and right-of-use (ROU) assets, result primarily when the carrying value of these assets exceeds their recoverable amount. Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our accounts receivable sales program and customers' supplier financing programs, and interest expense on our lease obligations, net of interest income earned. We believe that excluding Finance Costs paid (other than debt issuance costs and credit-agreement-related waiver fees paid, which are not considered part of our ongoing financing expenses) from cash provided by operations in the determination of non-IFRS adjusted free cash flow provides useful insight for assessing the performance of our core operations. Non-core tax impacts are excluded, as we believe that these costs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these costs or recoveries in assessing operating performance. The following table (which is unaudited) sets forth, for the periods indicated, the various non-IFRS financial measures discussed above, and a reconciliation of non-IFRS financial measures to the most directly comparable financial measures determined under IFRS (in millions, except percentages and per share amounts):   Three months ended December 31   Year ended December 31     2021       2022       2021       2022       % of revenue     % of revenue     % of revenue     % of revenue IFRS revenue $ 1,512.1       $ 2,042.6       $ 5,634.7       $ 7,250.0                             IFRS gross profit $ 142.1   9.4 %   $ 186.2   9.1 %   $ 487.0   8.6 %   $ 636.3   8.8 % Employee SBC expense   3.6         5.6         13.0         20.3     Non-IFRS adjusted gross profit $ 145.7   9.6 %   $ 191.8   9.4 %   $ 500.0   8.9 %   $ 656.6   9.1 %                         IFRS SG&A $ 65.5   4.3 %   $ 77.1   3.8 %   $ 245.1   4.3 %   $ 279.9   3.9 % Employee SBC expense   (5.6 )       (8.6 )       (20.4 )       (30.7 )   Non-IFRS adjusted SG&A $ 59.9   4.0 %   $ 68.5   3.4 %   $ 224.7   4.0 %   $ 249.2   3.4 %                         IFRS earnings from operations $ 49.9   3.3 %   $ 81.6   4.0 %   $ 167.7   3.0 %   $ 263.3   3.6 % Employee SBC expense   9.2         14.2         33.4         51.0     Amortization of intangible assets (excluding computer software)   7.8         9.2         22.5         37.0     Other Charges, net of recoveries   7.4         2.8         10.3         6.7     Non-IFRS operating earnings (adjusted EBIAT)(1) $ 74.3   4.9 %   $ 107.8   5.3 %   $ 233.9   4.2 %   $ 358.0   4.9 %                         IFRS net earnings $ 31.9   2.1 %   $ 42.4   2.1 %   $ 103.9   1.8 %   $ 145.5   2.0 % Employee SBC expense   9.2         14.2         33.4         51.0     Amortization of intangible assets (excluding computer software)   7.8         9.2         22.5         37.0     Other Charges, net of recoveries   7.4         2.8         10.3         6.7     Adjustments for taxes(2)   (1.1 )       (0.2 )       (5.8 )       (5.8 )   Non-IFRS adjusted net earnings $ 55.2       $ 68.4       $ 164.3       $ 234.4                             Diluted EPS                       Weighted average # of shares (in millions)   124.8         122.4         126.7         123.6     IFRS earnings per share $ 0.26       $ 0.35       $ 0.82       $ 1.18     Non-IFRS adjusted earnings per share $ 0.44       $ 0.56       $ 1.30       $ 1.90     # of shares outstanding at period end (in millions)   124.7         121.6         124.7         121.6                             IFRS cash provided by operations $ 65.8       $ 101.3       $ 226.8       $ 297.9     Purchase of property, plant and equipment, net of sales proceeds   (14.3 )       (32.3 )       (49.6 )       (108.9 )   Lease payments   (10.0 )       (9.9 )       (40.0 )       (46.0 )   Finance Costs paid (excluding debt issuance costs paid)   (5.9 )       (16.5 )       (22.4 )       (49.2 )   Non-IFRS adjusted free cash flow (3) $ 35.6       $ 42.6       $ 114.8       $ 93.8                             IFRS ROIC % (4)   11.1 %       15.7 %       10.0 %       12.9 %   Non-IFRS adjusted ROIC % (4)   16.6 %       20.7 %       13.9 %       17.5 %                                           (1) Management uses non-IFRS operating earnings (adjusted EBIAT) as a measure to assess performance related to our core operations. Non-IFRS operating earnings is defined as earnings from operations before employee SBC expense, TRS FVAs (defined above), amortization of intangible assets (excluding computer software), and Other Charges (recoveries) (defined above). See note 10 to our Q4 2022 Interim Financial Statements for separate quantification and discussion of the components of Other Charges (recoveries). (2) The adjustments for taxes, as applicable, represent the tax effects of our non-IFRS adjustments and non-core tax impacts (see below). The following table sets forth a reconciliation of our IFRS tax expense and IFRS effective tax rate to our non-IFRS adjusted tax expense and our non-IFRS adjusted effective tax rate for the periods indicated, in each case determined by excluding the tax benefits or costs associated with the listed items (in millions, except percentages) from our IFRS tax expense for such periods:   Three months ended December 31   Year ended December 31     2021   Effective tax rate     2022   Effective tax rate     2021   Effective tax rate     2022   Effective tax rate IFRS tax expense and IFRS effective tax rate $ 9.7   23 %   $ 19.9   32 %   $ 32.1   24 %   $ 58.1   29 %                         Tax costs (benefits) of the following items excluded from IFRS tax expense:                       Employee SBC expense   (0.1 )       (1.0 )       2.8         2.5     Amortization of intangible assets (excluding computer software)   0.5         0.7         0.5         3.0     Other Charges, net of recoveries   0.7         0.5         1.4         0.3     Non-core tax impact related to restructured sites*   —         —         1.1         —     Non-IFRS adjusted tax expense and non-IFRS adjusted effective tax rate $ 10.8   16 %   $ 20.1   23 %   $ 37.9   19 %   $ 63.9   21 %                                                 * Consists of the reversals of tax uncertainties related to one of our Asian subsidiaries that completed its liquidation and dissolution during the first quarter of 2021.                                                 (3) Management uses non-IFRS adjusted free cash flow as a measure, in addition to IFRS cash provided by (used in) operations, to assess our operational cash flow performance. We believe non-IFRS adjusted free cash flow provides another level of transparency to our liquidity. Non-IFRS adjusted free cash flow is defined as cash provided by (used in) operations after the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus equipment and property), lease payments and Finance Costs (defined above) paid (excluding any debt issuance costs and when applicable, credit facility waiver fees paid). We do not consider debt issuance costs paid (nil and $0.8 million in Q4 2022 and the full year 2022, respectively; $3.6 million in Q4 2021 and the full year 2021) or such waiver fees (when applicable) to be part of our ongoing financing expenses. As a result, these costs are excluded from total Finance Costs paid in our determination of non-IFRS adjusted free cash flow. Note, however, that non-IFRS adjusted free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures. (4) Management uses non-IFRS adjusted ROIC as a measure to assess the effectiveness of the invested capital we use to build products or provide services to our customers, by quantifying how well we generate earnings relative to the capital we have invested in our business. Non-IFRS adjusted ROIC is calculated by dividing annualized non-IFRS adjusted EBIAT by average net invested capital for the period. Net invested capital (calculated in the table below) is derived from IFRS financial measures, and is defined as total assets less: cash, ROU assets, accounts payable, accrued and other current liabilities, provisions, and income taxes payable. We use a two-point average to calculate average net invested capital for the quarter and a five-point average to calculate average net invested capital for the year. Average net invested capital for Q4 2022 is the average of net invested capital as at September 30, 2022 and December 31, 2022, and average net invested capital for the full year 2022 is the average of net invested capital as at December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022. A comparable financial measure to non-IFRS adjusted ROIC determined using IFRS measures would be calculated by dividing annualized IFRS earnings from operations by average net invested capital for the period. The following table sets forth, for the periods indicated, our calculation of IFRS ROIC % and non-IFRS adjusted ROIC % (in millions, except IFRS ROIC % and non-IFRS adjusted ROIC %).       Three months ended   Year ended       December 31   December 31         2021       2022       2021       2022                       IFRS earnings from operations   $ 49.9     $ 81.6     $ 167.7     $ 263.3   Multiplier to annualize earnings     4       4       1       1   Annualized IFRS earnings from operations   $ 199.6     $ 326.4     $ 167.7     $ 263.3                       Average net invested capital for the period   $ 1,794.9     $ 2,085.4     $ 1,682.2     $ 2,040.3                       IFRS ROIC % (1)     11.1 %     15.7 %     10.0 %     12.9 %                           Three months ended   Year ended       December 31   December 31         2021       2022       2021       2022                       Non-IFRS operating earnings (adjusted EBIAT)   $ 74.3     $ 107.8     $ 233.9     $ 358.0   Multiplier to annualize earnings     4       4       1       1   Annualized non-IFRS adjusted EBIAT   $ 297.2     $ 431.2     $ 233.9     $ 358.0                       Average net invested capital for the period   $ 1,794.9     $ 2,085.4     $ 1,682.2     $ 2,040.3                       Non-IFRS adjusted ROIC % (1)     16.6 %     20.7 %     13.9 %     17.5 %                       December 312021   March 312022   June 302022   September 30 2022   December 31 2022 Net invested capital consists of:                   Total assets $ 4,666.9     $ 4,848.0     $ 5,140.5     $ 5,347.9     $ 5,628.0   Less: cash   394.0       346.6       365.5       363.3       374.5   Less: ROU assets   113.8       109.8       133.6       128.0       138.8   Less: accounts payable, accrued and other current liabilities, provisions and income taxes payable   2,202.0       2,347.4       2,612.1       2,797.5       3,003.0   Net invested capital at period end (1) $ 1,957.1     $ 2,044.2     $ 2,029.3     $ 2,059.1     $ 2,111.7                         December 31 2020   March 31 2021   June 30 2021   September 30 2021   December 31 2021 Net invested capital consists of:                   Total assets $ 3,664.1     $ 3,553.4     $ 3,745.4     $ 4,026.1     $ 4,666.9   Less: cash   463.8       449.4       467.2       477.2       394.0   Less: ROU assets   101.0       98.4       100.5       115.4       113.8   Less: accounts payable, accrued and other current liabilities, provisions and income taxes payable   1,478.4       1,407.0       1,575.8       1,800.8       2,202.0   Net invested capital at period end (1).....»»

Results exceed guidance ranges; full year 2022 outlook raised TORONTO, Oct. 24, 2022 (GLOBE NEWSWIRE) -- Celestica Inc. (TSX:CLS) (NYSE:CLS), a leader in design, manufacturing, hardware platform and supply chain solutions for the world's most innovative companies, today announced financial results for the quarter ended September 30, 2022 (Q3 2022)†. "Our exceptional performance during the third quarter was marked by our highest non-IFRS operating margin* in our history and our highest non-IFRS adjusted EPS* in more than 20 years," said Rob Mionis, President and CEO, Celestica. "We continue to execute on our strategy to drive profitable growth, and we are pleased with our solid financial results and the momentum that has been building. Year to date, our revenues are up 26%, and our non-IFRS adjusted EPS* is up 56%, compared to the prior year period. The strong performance in recent quarters continues to be driven by new project ramps in our ATS segment and strong demand with market share gains in our Hardware Platform Solutions business. Based on our strong momentum, we are raising our revenue and non-IFRS adjusted EPS* outlook for 2022, and expect revenue and non-IFRS adjusted EPS* growth in 2023." Q3 2022 Highlights • Key measures: Revenue: $1.92 billion, increased 31% compared to $1.47 billion for the third quarter of 2021 (Q3 2021). Non-IFRS operating margin*: 5.1%, compared to 4.2% for Q3 2021. ATS segment revenue: increased 30% compared to Q3 2021; ATS segment margin was 5.0%, compared to 4.3% for Q3 2021. CCS segment revenue: increased 32% compared to Q3 2021; CCS segment margin was 5.2%, compared to 4.1% for Q3 2021. Adjusted earnings per share (EPS) (non-IFRS)*: $0.52, compared to $0.35 for Q3 2021. Adjusted return on invested capital (non-IFRS)*: 19.2%, compared to 15.2% for Q3 2021. Adjusted free cash flow (non-IFRS)*: $7.4 million, compared to $27.1 million for Q3 2021. • IFRS financial measures (directly comparable to non-IFRS measures above): Earnings from operations as a percentage of revenue: 4.1%, compared to 3.5% for Q3 2021. EPS: $0.37, compared to $0.28 for Q3 2021. Return on invested capital (IFRS ROIC): 15.3%, compared to 12.8% for Q3 2021. Cash provided by operations: $74.4 million, compared to $55.7 million for Q3 2021. • Repurchased and cancelled 0.5 million subordinate voting shares (SVS) for $5.0 million under our normal course issuer bid (NCIB). † Celestica has two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market and is comprised of our Aerospace and Defense (A&D), Industrial, HealthTech and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 25 to our 2021 audited consolidated financial statements, included in our Annual Report on Form 20-F for the year ended December 31, 2021 (2021 20-F), available at www.sec.gov and www.sedar.com, for further detail. * Non-International Financial Reporting Standards (IFRS) financial measures (including ratios based on non-IFRS financial measures) do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar financial measures presented by other public companies that report under IFRS or U.S. generally accepted accounting principles (GAAP). Adjusted free cash flow was previously referred to as free cash flow, but has been renamed. Its composition remains unchanged. In addition, prior to the second quarter of 2022 (Q2 2022), non-IFRS operating earnings (adjusted EBIAT) was reconciled to IFRS earnings before income taxes, and non-IFRS operating margin was reconciled to IFRS earnings before income taxes as a percentage of revenue, but commencing in Q2 2022, are reconciled to IFRS earnings from operations, and IFRS earnings from operations as a percentage of revenue, respectively (as the most directly comparable IFRS financial measures), with no change to either resultant non-IFRS financial measure. Since non-IFRS adjusted return on invested capital (adjusted ROIC) is based on non-IFRS operating earnings, in comparing this measure to the most directly-comparable financial measure determined using IFRS measures (which we refer to as IFRS ROIC), commencing in Q3 2022, our calculation of IFRS ROIC is based on IFRS earnings from operations (instead of IFRS earnings before income taxes), with no change to the determination of non-IFRS adjusted ROIC. Prior period reconciliations and calculations included herein reflect the current presentation. See "Non-IFRS Supplementary Information" below for information on our rationale for the use of non-IFRS financial measures, and Schedule 1 for, among other items, non-IFRS financial measures included in this press release, as well as their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. The most directly-comparable IFRS financial measures to non-IFRS operating margin, non-IFRS adjusted EPS, non-IFRS adjusted ROIC and non-IFRS adjusted free cash flow are earnings from operations as a percentage of revenue, EPS, IFRS ROIC, and cash provided by operations, respectively. Fourth Quarter of 2022 (Q4 2022) Guidance   Q4 2022 Guidance Revenue (in billions)         $1.875 to $2.025 Non-IFRS operating margin*         5.1% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions)         $64 to $66 Adjusted EPS (non-IFRS)*         $0.49 to $0.55 For Q4 2022, we expect a negative $0.15 to $0.21 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges; and a non-IFRS adjusted effective tax rate* of approximately 21% (which does not account for foreign exchange impacts or unanticipated tax settlements). 2022 and 2023 Outlook Based on our strong performance in the first nine months of 2022 and our Q4 2022 guidance, we have raised our 2022 revenue outlook to between $7.08 billion and $7.23 billion, and our non-IFRS adjusted EPS* outlook to between $1.83 and $1.89. Achievement of the mid-point of these ranges would represent 27% and 43% year- over-year growth for revenue and non-IFRS adjusted EPS*, respectively. Additionally, our 2022 non-IFRS adjusted free cash flow* outlook is $75 million, as we continue to make strategic investments to support our strong growth. For 2023, our outlook consists of: revenue of at least $7.5 billion; non-IFRS operating margin* of between 4.5% and 5.5%; and target non-IFRS adjusted EPS* of between $1.95 and $2.05. Although we have incorporated the anticipated impact of supply chain constraints into the foregoing financial guidance and outlook to the best of our ability, their adverse impact (in terms of duration and severity) cannot be estimated with certainty, and may be materially in excess of our expectations. * See Schedule 1 for the definitions of these non-IFRS financial measures. We do not provide reconciliations for forward-looking non-IFRS financial measures, as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various events that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact the most directly comparable forward-looking IFRS financial measure. For these same reasons, we are unable to address the probable significance of the unavailable information. Forward-looking non-IFRS financial measures may vary materially from the corresponding IFRS financial measures. Summary of Selected Q3 2022 Results   Q3 2022 Actual   Q3 2022 Guidance (2) Key measures:       Revenue (in billions)          $1.92   $1.65 to $1.80 Non-IFRS operating margin*          5.1%   4.8% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions)         $60.9   $64 to $66 Adjusted EPS (non-IFRS)*         $0.52   $0.41 to $0.47         Directly comparable IFRS financial measures:       Earnings from operations as a % of revenue          4.1%   N/A SG&A (in millions)         $66.1   N/A EPS (1)         $0.37   N/A * See Schedule 1 for, among other things, the definitions of, and exclusions used to determine, these non-IFRS financial measures, and a reconciliation of such financial measures to the most directly comparable IFRS financial measures for Q3 2022. (1) IFRS EPS of $0.37 for Q3 2022 included an aggregate charge of $0.16 (pre-tax) per share for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges. See the tables in Schedule 1 and note 9 to our September 30, 2022 unaudited interim condensed consolidated financial statements (Q3 2022 Interim Financial Statements) for per-item charges. This aggregate charge was within our Q3 2022 guidance range of between $0.13 to $0.19 per share for these items. IFRS EPS for Q3 2022 included a $0.02 per share negative taxable foreign exchange impact arising from the weakening of the Chinese renminbi relative to the U.S. dollar (Currency Impact) and a $0.01 per share negative impact attributable to restructuring charges. IFRS EPS of $0.83 for the first nine months of 2022 (YTD 2022) included: (i) a $0.03 per share net negative impact attributable to other charges (recoveries) (consisting most significantly of a $0.05 per share negative impact attributable to restructuring charges and a $0.01 per share negative impact attributable to Transition Costs, partially offset by a $0.03 per share positive impact attributable to Transition Recoveries (each defined in Schedule 1)); (ii) as a result of supply chain constraints and COVID-19-related workforce expenses and constraints, a $0.03 per share negative impact attributable to estimated Constraint Costs (defined as both direct and indirect costs, including manufacturing inefficiencies related to lost revenue due to our inability to secure materials, idled labor costs, and incremental costs for labor, expedite fees and freight premiums, cleaning supplies, personal protective equipment, and/or IT-related services to support our work-from-home arrangements); (iii) a $0.04 per share favorable tax impact attributable to the reversal of tax uncertainties in one of our Asian subsidiaries; and (iv) a $0.02 per share negative Currency Impact. See notes 9 and 10 to the Q3 2022 Interim Financial Statements. IFRS EPS of $0.28 for Q3 2021 included a $0.04 per share positive impact attributable to a deferred tax recovery recorded in connection with the revaluation of certain temporary differences using the future effective tax rate of our Thailand subsidiary related to the then-forthcoming income tax exemption rate reduction in 2022 under an applicable tax incentive (Revaluation Impact), and a $0.03 per share positive impact attributable to net other recoveries (consisting most significantly of a $0.07 per share positive impact attributable to legal recoveries, offset in part by a $0.05 per share negative impact attributable to Acquisition Costs, each as described in note 9 to the Q3 2022 Interim Financial Statements), all offset in part by a $0.05 per share negative impact attributable to estimated Constraint Costs net of recognized COVID-19-related government subsidies, credits and grants (COVID Subsidies). IFRS EPS of $0.57 for the first nine months of 2021 (YTD 2021) included a $0.17 per share negative impact attributable to estimated Constraint Costs, and a $0.02 per share negative impact attributable to net other charges (consisting most significantly of a $0.06 per share negative impact attributable to net restructuring charges and a $0.04 per share negative impact attributable to Acquisition Costs, offset in part by a $0.08 per share positive impact attributable to legal recoveries, each as described in note 9 to the Q3 2022 Interim Financial Statements), all offset in part by a $0.09 per share positive impact attributable to approximately $11 million of recognized COVID Subsidies and $1 million of customer recoveries related to COVID-19, as well as the $0.04 per share positive Revaluation Impact. For the estimated impact of supply chain constraints on our revenues and costs in YTD 2022, Q3 2021 and YTD 2021, see "Recent Developments — Segment Environment — Operational Impacts" of our Q3 2022 Management's Discussion and Analysis of Financial Condition and Results of Operations, to be filed today at www.sedar.com and furnished on Form 6-K at www.sec.gov. (2) For Q3 2022, our revenue and non-IFRS adjusted EPS exceeded the high end of our guidance ranges, and our non-IFRS operating margin exceeded the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges, driven by continued strong demand across the majority of our businesses and improved materials availability in some markets relative to expectations. Non-IFRS adjusted SG&A for Q3 2022 was lower than our guidance range due to the impact of foreign exchange and cost efficiency improvement measures. Our IFRS effective tax rate for Q3 2022 was 25%. As anticipated, our non-IFRS adjusted effective tax rate for Q3 2022 was 21%. Intention to Launch New NCIB We intend to file a notice of intention with the Toronto Stock Exchange (TSX) to commence a new NCIB in Q4 2022, after our current NCIB expires in December 2022. If this notice is accepted by the TSX, we expect to be permitted to repurchase for cancellation, at our discretion during the 12 months following such acceptance, up to 10% of the "public float" (calculated in accordance with the rules of the TSX) of our issued and outstanding SVS. Purchases under the new NCIB, if accepted, will be conducted in the open market or as otherwise permitted, subject to applicable terms and limitations, and will be made through the facilities of the TSX and the New York Stock Exchange. We believe that a new NCIB is in the interest of the Company. Q3 2022 Webcast Management will host its Q3 2022 results conference call on October 25, 2022 at 8:00 a.m. Eastern Daylight Time (EDT). The webcast can be accessed at www.celestica.com. Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS financial measures to consider in evaluating the company's operating performance. Management uses adjusted net earnings and other non-IFRS financial measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's business; and to set management incentive targets. We believe investors use both IFRS and non-IFRS financial measures to assess management's past, current and future decisions associated with our priorities and our allocation of capital, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact our core operations. See Schedule 1 below. About CelesticaCelestica enables the world's best brands. Through our recognized customer-centric approach, we partner with leading companies in Aerospace and Defense, Communications, Enterprise, HealthTech, Industrial, and Capital Equipment to deliver solutions for their most complex challenges. As a leader in design, manufacturing, hardware platform and supply chain solutions, Celestica brings global expertise and insight at every stage of product development - from the drawing board to full-scale production and after-market services. With talented teams across North America, Europe and Asia, we imagine, develop and deliver a better future with our customers. For more information on Celestica, visit www.celestica.com. Our securities filings can be accessed at www.sedar.com and www.sec.gov. Cautionary Note Regarding Forward-looking Statements This press release contains forward-looking statements, including, without limitation, those related to: our anticipated financial and/or operational results and outlook, including statements made and guidance provided under the headings "Fourth Quarter of 2022 (Q4 2022) Guidance" and "2022 and 2023 Outlook"; our intention to launch a new NCIB and anticipated terms; our credit risk; our liquidity; anticipated charges and expenses, including restructuring charges; the potential impact of tax and litigation outcomes; mandatory prepayments under our credit facility; our intangible asset amortization; and interest rates. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "continues," "project," "target," "goal," "potential," "possible," "contemplate," "seek," or similar expressions, or may employ such future or conditional verbs as "may," "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and for forward-looking information under applicable Canadian securities laws. Forward-looking statements are provided to assist readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including, among others, risks related to: customer and segment concentration; price, margin pressures, and other competitive factors and adverse market conditions affecting, and the highly competitive nature of, the electronics manufacturing services (EMS) industry in general and our segments in particular (including the risk that anticipated market conditions do not materialize); delays in the delivery and availability of components, services and/or materials, as well as their costs and quality; challenges of replacing revenue from completed, lost or non-renewed programs or customer disengagements; our customers' ability to compete and succeed using our products and services; changes in our mix of customers and/or the types of products or services we provide, including negative impacts of higher concentrations of lower margin programs; managing changes in customer demand; rapidly evolving and changing technologies, and changes in our customers' business or outsourcing strategies; the cyclical and volatile nature of our semiconductor business; the expansion or consolidation of our operations; the inability to maintain adequate utilization of our workforce; defects or deficiencies in our products, services or designs; volatility in the commercial aerospace industry; integrating and achieving the anticipated benefits from acquisitions (including our acquisition of PCI Private Limited (PCI)) and "operate-in-place" arrangements; the potential loss of PCI customers as a result of the recent fire at our Batam facility in Indonesia (Batam Fire); an inability to recover our tangible losses caused by the Batam Fire through insurance claims; compliance with customer-driven policies and standards, and third-party certification requirements; challenges associated with new customers or programs, or the provision of new services; the impact of our restructuring actions and/or productivity initiatives, including a failure to achieve anticipated benefits therefrom; negative impacts on our business resulting from our third-party indebtedness; the incurrence of future restructuring charges, impairment charges, other unrecovered write-downs of assets (including inventory) or operating losses; managing our business during uncertain market, political and economic conditions, including among others, global inflation and/or recession, and geopolitical and other risks associated with our international operations, including military actions, protectionism and reactive countermeasures, economic or other sanctions or trade barriers, including in relation to the evolving Ukraine/Russia conflict; disruptions to our operations, or those of our customers, component suppliers and/or logistics partners, including as a result of events outside of our control (see "External Factors that May Impact our Business" in Item 5 of our 2021 20-F); the scope, duration and impact of the COVID-19 pandemic and materials constraints; changes to our operating model; rising commodity, materials and component costs as well as rising labor costs and changing labor conditions; execution and/or quality issues (including our ability to successfully resolve these challenges); non-performance by counterparties; maintaining sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; negative impacts on our business resulting from any significant uses of cash (including for the acquisition of PCI), securities issuances, and/or additional increases in third-party indebtedness (including as a result of an inability to sell desired amounts under our uncommitted accounts receivable sales program or supplier financing programs); foreign currency volatility; our global operations and supply chain; competitive bid selection processes; customer relationships with emerging companies; recruiting or retaining skilled talent; our dependence on industries affected by rapid technological change; our ability to adequately protect intellectual property and confidential information; increasing taxes (including as a result of global tax reform), tax audits, and challenges of defending our tax positions; obtaining, renewing or meeting the conditions of tax incentives and credits; the management of our information technology systems, and the fact that while we have not been materially impacted by computer viruses, malware, ransomware, hacking attempts or outages, we have been (and may continue to be) the target of such events; the inability to prevent or detect all errors or fraud; the variability of revenue and operating results; unanticipated disruptions to our cash flows; compliance with applicable laws and regulations; our pension and other benefit plan obligations; changes in accounting judgments, estimates and assumptions; our ability to maintain compliance with applicable credit facility covenants; interest rate fluctuations and the discontinuation of LIBOR; our ability to refinance our indebtedness from time to time; deterioration in financial markets or the macro-economic environment, including as a result of global inflation and/or recession; our credit rating; the interest of our controlling shareholder; current or future litigation, governmental actions, and/or changes in legislation or accounting standards; negative publicity; a lack of acceptance by the TSX of a new NCIB; the impermissibility of SVS repurchases, or a determination not to repurchase SVS under any NCIB; the impact of climate change; and our ability to achieve our environmental, social and governance (ESG) initiative goals, including with respect to climate change and greenhouse gas emissions reduction. The foregoing and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our most recent MD&A, our 2021 Annual Report on Form 20-F filed with, and subsequent reports on Form 6-K furnished to, the U.S. Securities and Exchange Commission, and as applicable, the Canadian Securities Administrators. The forward-looking statements contained in this press release are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: continued growth in our end markets; growth in manufacturing outsourcing from customers in diversified end markets; no significant unforeseen negative impacts to Celestica's operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS industry in general or our segments in particular, as well as those related to the following: the scope and duration of materials constraints (i.e., that they do not materially worsen) and the COVID-19 pandemic and their impact on our sites, customers and suppliers; our ability to recover our tangible losses caused by the Batam Fire through insurance claims; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success of our customers' products; our ability to retain programs and customers; the stability of currency exchange rates; supplier performance and quality, pricing and terms; compliance by third parties with their contractual obligations; the costs and availability of components, materials, services, equipment, labor, energy and transportation; that our customers will retain liability for product/component tariffs and countermeasures; global tax legislation changes; our ability to keep pace with rapidly changing technological developments; the timing, execution and effect of restructuring actions; the successful resolution of quality issues that arise from time to time; the components of our leverage ratio (as defined in our credit facility); our ability to successfully diversify our customer base and develop new capabilities; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding SVS under NCIBs, acceptance of a new NCIB and compliance with applicable laws and regulations pertaining to NCIBs; compliance with applicable credit facility covenants; anticipated demand levels across our businesses; the impact of anticipated market conditions on our businesses; that global inflation and/or recession will not have a material impact on our revenues or expenses; our ability to successfully integrate PCI and achieve the expected long-term benefits from the acquisition; and our maintenance of sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities. Although management believes its assumptions to be reasonable under the current circumstances, they may prove to be inaccurate, which could cause actual results to differ materially (and adversely) from those that would have been achieved had such assumptions been accurate. Forward-looking statements speak only as of the date on which they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.    All forward-looking statements attributable to us are expressly qualified by these cautionary statements.                                           Schedule 1 Supplementary Non-IFRS Financial Measures The non-IFRS financial measures (including ratios based on non-IFRS financial measures) included in this press release are: adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, non-IFRS operating earnings (or adjusted EBIAT), non-IFRS operating margin (non-IFRS operating earnings or adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted EPS, adjusted return on invested capital (adjusted ROIC), adjusted free cash flow, adjusted tax expense and adjusted effective tax rate. Adjusted EBIAT, adjusted ROIC, adjusted free cash flow, adjusted tax expense and adjusted effective tax rate are further described in the tables below. Adjusted free cash flow was previously referred to as free cash flow, but has been renamed. Its composition remains unchanged. In addition, prior to the second quarter of 2022 (Q2 2022), non-IFRS operating earnings (adjusted EBIAT) was reconciled to IFRS earnings before income taxes, and non-IFRS operating margin was reconciled to IFRS earnings before income taxes as a percentage of revenue, but commencing in Q2 2022, are reconciled to IFRS earnings from operations, and IFRS earnings from operations as a percentage of revenue, respectively (as the most directly comparable IFRS financial measures), with no change to either resultant non-IFRS financial measure. Since non-IFRS adjusted ROIC is based on non-IFRS operating earnings, in comparing this measure to the most directly-comparable financial measure determined using IFRS measures (which we refer to as IFRS ROIC), commencing in Q3 2022, our calculation of IFRS ROIC is based on IFRS earnings from operations (instead of IFRS earnings before income taxes), with no change to the determination of non-IFRS adjusted ROIC. Prior period reconciliations and calculations included herein reflect the current presentation. In calculating our non-IFRS financial measures, management excludes the following items (where indicated): employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), Other Charges, net of recoveries (defined below), and specified Finance Costs (defined below), all net of the associated tax adjustments (quantified in the table below), and non-core tax impacts (tax adjustments related to acquisitions, and certain other tax costs or recoveries related to restructuring actions or restructured sites). We believe the non-IFRS financial measures we present herein are useful to investors, as they enable investors to evaluate and compare our results from operations in a more consistent manner (by excluding specific items that we do not consider to be reflective of our core operations), to evaluate cash resources that we generate from our business each period, and to provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. In addition, management believes that the use of a non-IFRS adjusted tax expense and a non-IFRS adjusted effective tax rate provide improved insight into the tax effects of our core operations, and are useful to management and investors for historical comparisons and forecasting. These non-IFRS financial measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of our core operations. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies that report under IFRS, or who report under U.S. GAAP and use non-GAAP financial measures to describe similar financial metrics. Non-IFRS financial measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any IFRS financial measure. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS financial measures are nonetheless recognized under IFRS and have an economic impact on us. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of our performance, and reconciling non-IFRS financial measures back to the most directly comparable financial measures determined under IFRS. The economic substance of these exclusions described above (where applicable to the periods presented) and management's rationale for excluding them from non-IFRS financial measures is provided below: Employee SBC expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee SBC expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do. Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance. Other Charges, net of recoveries, consist of, when applicable: Restructuring Charges, net of recoveries (defined below); Transition Costs (Recoveries) (defined below); net Impairment charges (defined below); consulting, transaction and integration costs related to potential and completed acquisitions, and charges or releases related to the subsequent re-measurement of indemnification assets or the release of indemnification or other liabilities recorded in connection with acquisitions, when applicable; legal settlements (recoveries); specified credit facility-related charges; and post-employment benefit plan losses. We exclude these charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities or incurrence of the relevant costs. Our competitors may record similar charges at different times, and we believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these types of charges, net of recoveries, in assessing operating performance. Restructuring Charges, net of recoveries, consist of costs relating to: employee severance, lease terminations, site closings and consolidations, write-downs of owned property and equipment which are no longer used and are available for sale and reductions in infrastructure. Transition Costs consist of costs recorded in connection with: (i) the relocation of our Toronto manufacturing operations, and the move of our corporate headquarters into and out of a temporary location during, and upon completion, of the construction of space in a new office building at our former location (all in connection with the 2019 sale of our Toronto real property); (ii) the transfer of manufacturing lines from closed sites to other sites within our global network; and (iii) the sale of real properties unrelated to restructuring actions (Property Dispositions). Transition Costs consist of direct relocation and duplicate costs (such as rent expense, utility costs, depreciation charges, and personnel costs) incurred during the transition periods, as well as cease-use and other costs incurred in connection with idle or vacated portions of the relevant premises that we would not have incurred but for these relocations, transfers and dispositions. Transition Recoveries consist of any gains recorded in connection with Property Dispositions. We believe that excluding these costs and recoveries permits a better comparison of our core operating results from period-to-period, as these costs or recoveries will not reflect our ongoing operations once these relocations, manufacturing line transfers, and dispositions are complete. Impairment charges, which consist of non-cash charges against goodwill, intangible assets, property, plant and equipment, and right-of-use (ROU) assets, result primarily when the carrying value of these assets exceeds their recoverable amount. Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our accounts receivable sales program and customers' supplier financing programs, and interest expense on our lease obligations, net of interest income earned. We believe that excluding Finance Costs paid (other than debt issuance costs and credit-agreement-related waiver fees paid, which are not considered part of our ongoing financing expenses) from cash provided by operations in the determination of non-IFRS adjusted free cash flow provides useful insight for assessing the performance of our core operations. Non-core tax impacts are excluded, as we believe that these costs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these costs or recoveries in assessing operating performance. The following table (which is unaudited) sets forth, for the periods indicated, the various non-IFRS financial measures discussed above, and a reconciliation of non-IFRS financial measures to the most directly comparable financial measures determined under IFRS (in millions, except percentages and per share amounts):   Three months ended September 30   Nine months ended September 30     2021       2022       2021       2022       % of revenue     % of revenue     % of revenue     % of revenue IFRS revenue $ 1,467.4       $ 1,923.3       $ 4,122.6       $ 5,207.4                             IFRS gross profit $ 125.4   8.5 %   $ 167.7   8.7 %   $ 344.9   8.4 %   $ 450.1   8.6 % Employee SBC expense   3.1         3.8         9.4         14.7     Non-IFRS adjusted gross profit $ 128.5   8.8 %   $ 171.5   8.9 %   $ 354.3   8.6 %   $ 464.8   8.9 %                         IFRS SG&A $ 62.0   4.2 %   $ 66.1   3.4 %   $ 179.6   4.4 %   $ 202.8   3.9 % Employee SBC expense   (5.5 )       (5.2 )       (14.8 )       (22.1 )   Non-IFRS adjusted SG&A $ 56.5   3.9 %   $ 60.9   3.2 %   $ 164.8   4.0 %   $ 180.7   3.5 %                         IFRS earnings from operations $ 51.7   3.5 %   $ 78.4   4.1 %   $ 117.8   2.9 %   $ 181.7   3.5 % Employee SBC expense   8.6         9.0         24.2         36.8     Amortization of intangible assets (excluding computer software)   4.9         9.2         14.7         27.8     Other Charges (recoveries)   (3.9 )       1.6         2.9         3.9     Non-IFRS operating earnings (adjusted EBIAT)(1) $ 61.3   4.2 %   $ 98.2   5.1 %   $ 159.6   3.9 %   $ 250.2   4.8 %                         IFRS net earnings $ 35.2   2.4 %   $ 45.7   2.4 %   $ 72.0   1.7 %   $ 103.1   2.0 % Employee SBC expense   8.6         9.0         24.2         36.8     Amortization of intangible assets (excluding computer software)   4.9         9.2         14.7         27.8     Other Charges (recoveries)   (3.9 )       1.6         2.9         3.9     Adjustments for taxes(2)   (1.4 )       (1.9 )       (4.7 )       (5.6 )   Non-IFRS adjusted net earnings $ 43.4       $ 63.6       $ 109.1       $ 166.0                             Diluted EPS                       Weighted average # of shares (in millions)   125.5         123.2         127.3         124.0     IFRS earnings per share $ 0.28       $ 0.37       $ 0.57       $ 0.83     Non-IFRS adjusted earnings per share $ 0.35       $ 0.52       $ 0.86       $ 1.34     # of shares outstanding at period end (in millions)   124.7         122.6         124.7         122.6                             IFRS cash provided by operations $ 55.7       $ 74.4       $ 161.0       $ 196.6     Purchase of property, plant and equipment, net of sales proceeds   (13.2 )       (38.7 )       (35.3 )       (76.6 )   Lease payments   (10.0 )       (13.0 )       (30.0 )       (36.1 )   Finance Costs paid (excluding debt issuance costs paid)   (5.4 )       (15.3 )       (16.5 )       (32.7 )   Non-IFRS adjusted free cash flow (3) $ 27.1       $ 7.4       $ 79.2       $ 51.2                             IFRS ROIC % (4)   12.8 %       15.3 %       9.7 %       12.0 %   Non-IFRS adjusted ROIC % (4)   15.2 %       19.2 %       13.2 %       16.5 %   (1) Management uses non-IFRS operating earnings (adjusted EBIAT) as a measure to assess performance related to our core operations. Non-IFRS operating earnings is defined as earnings from operations before employee SBC expense, amortization of intangible assets (excluding computer software), and Other Charges (recoveries) (defined above). See note 9 to our Q3 2022 Interim Financial Statements for separate quantification and discussion of the components of Other Charges (recoveries).     (2) The adjustments for taxes, as applicable, represent the tax effects of our non-IFRS adjustments and non-core tax impacts (see below).       The following table sets forth a reconciliation of our IFRS tax expense and IFRS effective tax rate to our non-IFRS adjusted tax expense and our non-IFRS adjusted effective tax rate for the periods indicated, in each case determined by excluding the tax benefits or costs associated with the listed items (in millions, except percentages) from our IFRS tax expense for such periods:     Three months ended September 30   Nine months ended September 30     2021 Effective tax rate     2022 Effective tax rate     2021 Effective tax rate     2022   Effective tax rate IFRS tax expense and IFRS effective tax rate $ 8.7 20 %   $ 15.2 25 %   $ 22.4 24 %   $ 38.2   27 %                         Tax costs (benefits) of the following items excluded from IFRS tax expense:                       Employee SBC expense   1.4       0.5       2.9       3.5     Amortization of intangible assets (excluding computer software)   —       0.8       —       2.3     Other Charges (recoveries)   —       0.6       0.7       (0.2 )   Non-core tax impact related to restructured sites*   —       —       1.1       —     Non-IFRS adjusted tax expense and non-IFRS adjusted effective tax rate $ 10.1 19 %   $ 17.1 21 %   $ 27.1 20 %   $ 43.8   21 %     • Consists of the reversals of tax uncertainties related to one of our Asian subsidiaries that completed its liquidation and dissolution during the first quarter of 2021.     (3) Management uses non-IFRS adjusted free cash flow as a measure, in addition to IFRS cash provided by (used in) operations, to assess our operational cash flow performance. We believe non-IFRS adjusted free cash flow provides another level of transparency to our liquidity. Non-IFRS adjusted free cash flow is defined as cash provided by (used in) operations after the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus equipment and property), lease payments and Finance Costs (defined above) paid (excluding any debt issuance costs and when applicable, credit facility waiver fees paid). We do not consider debt issuance costs paid (nil and $0.8 million in Q3 2022 and YTD 2022, respectively; nil in Q3 2021 or YTD 2021) or such waiver fees (when applicable) to be part of our ongoing financing expenses. As a result, these costs are excluded from total Finance Costs paid in our determination of non-IFRS adjusted free cash flow. Note, however, that non-IFRS adjusted free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures.     (4) Management uses non-IFRS adjusted ROIC as a measure to assess the effectiveness of the invested capital we use to build products or provide services to our customers, by quantifying how well we generate earnings relative to the capital we have invested in our business. Non-IFRS adjusted ROIC is calculated by dividing annualized non-IFRS adjusted EBIAT by average net invested capital for the period. Net invested capital (calculated in the table below) is derived from IFRS financial measures, and is defined as total assets less: cash, ROU assets, accounts payable, accrued and other current liabilities, provisions, and income taxes payable. We use a two-point average to calculate average net invested capital for the quarter and a four-point average to calculate average net invested capital for the nine-month period. Average net invested capital for Q3 2022 is the average of net invested capital as at June 30, 2022 and September 30, 2022, and average net invested capital for YTD 2022 is the average of net invested capital as at December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022. A comparable financial measure to non-IFRS adjusted ROIC determined using IFRS measures would be calculated by dividing annualized IFRS earnings from operations by average net invested capital for the period. The following table sets forth, for the periods indicated, our calculation of IFRS ROIC % and non-IFRS adjusted ROIC % (in millions, except IFRS ROIC % and non-IFRS adjusted ROIC %).       Three months ended   Nine months ended       September 30   September 30         2021       2022       2021       2022                       IFRS earnings from operations   $ 51.7     $ 78.4     $ 117.8     $ 181.7   Multiplier to annualize earnings     4       4       1.333       1.333   Annualized IFRS earnings from operations   $ 206.8     $ 313.6     $ 157.0     $ 242.2                       Average net invested capital for the period   $ 1,617.3     $ 2,044.2     $ 1,613.5     $ 2,022.4                       IFRS ROIC % (1)     12.8 %     15.3 %     9.7 %     12.0 %                           Three months ended   Nine months ended       September 30   September 30         2021       2022       2021       2022                       Non-IFRS operating earnings (adjusted EBIAT)   $ 61.3     $ 98.2     $ 159.6     $ 250.2   Multiplier to annualize earnings     4       4       1.333       1.333   Annualized non-IFRS adjusted EBIAT   $ 245.2     $ 392.8     $ 212.7     $ 333.5                       Average net invested capital for the period   $ 1,617.3     $ 2,044.2     $ 1,613.5     $ 2,022.4                       Non-IFRS adjusted ROIC % (1)     15.2 %     19.2 %     13.2 %     16.5 %                           December 31 2021   March 31 2022   June 30 2022   September 30 2022 Net invested capital consists of:                 Total assets   $ 4,666.9     $ 4,848.0     $ 5,140.5     $ 5,347.9   Less: cash     394.0       346.6       365.5       363.3   Less: ROU assets     113.8       109.8       133.6       128.0   Less: accounts payable, accrued and other current liabilities, provisions and income taxes payable     2,202.0       2,347.4       2,612.1       2,797.5   Net invested capital at period end (1)   $ 1,957.1     $ 2,044.2     $ 2,029.3.....»»

Q2 2022 Revenue and non-IFRS adjusted EPS* at the high end of guidance rangeFull Year Outlook raised TORONTO, July 25, 2022 (GLOBE NEWSWIRE) -- Celestica Inc. (TSX:CLS) (NYSE:CLS), a leader in design, manufacturing, hardware platform and supply chain solutions for the world's most innovative companies, today announced financial results for the quarter ended June 30, 2022 (Q2 2022)†. "We are pleased to deliver another quarter of strong performance in Q2 2022, as our positive momentum continues to build," said Rob Mionis, President and CEO, Celestica. "Despite continued challenges in the macro environment, our Q2 2022 results met the high end of our revenue guidance range and non-IFRS adjusted earnings per share (EPS)* guidance range. As we look forward to a strong second half to the year, we remain on track to achieve solid double digit revenue and non-IFRS adjusted EPS* growth in 2022." Q2 2022 Highlights • Key measures: Revenue: $1.72 billion, increased 21% compared to $1.42 billion for the second quarter of 2021 (Q2 2021). Non-IFRS operating margin*: 4.8%, compared to 3.9% for Q2 2021. ATS segment revenue: increased 24% compared to Q2 2021; ATS segment margin was 4.5%, compared to 4.1% for Q2 2021. CCS segment revenue: increased 19% compared to Q2 2021; CCS segment margin was 5.0%, compared to 3.7% for Q2 2021. Adjusted EPS (non-IFRS)*: $0.44, compared to $0.30 for Q2 2021. Adjusted return on invested capital (non-IFRS)*: 16.2%, compared to 13.7% for Q2 2021. Adjusted free cash flow (non-IFRS)*: $43.3 million, compared to $31.2 million for Q2 2021. • IFRS financial measures (directly comparable to non-IFRS measures above): Earnings from operations as a percentage of revenue: 3.7%, compared to 3.0% for Q2 2021. EPS: $0.29, compared to $0.21 per share for Q2 2021. Return on invested capital: 9.7%, compared to 8.7% for Q2 2021. Cash provided by operations: $86.9 million, compared to $56.5 million for Q2 2021. • Repurchased and cancelled 1.0 million shares for $9.8 million under our normal course issuer bid. † Celestica has two operating and reportable segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market and is comprised of our Aerospace and Defense (A&D), Industrial (including PCI Private Limited (PCI) and energy), HealthTech and Capital Equipment businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 25 to our 2021 audited consolidated financial statements, included in our Annual Report on Form 20-F for the year ended December 31, 2021 (2021 20-F), available at www.sec.gov and www.sedar.com, for further detail. * Non-International Financial Reporting Standards (IFRS) financial measures (including ratios based on non-IFRS financial measures) do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar financial measures presented by other public companies that report under IFRS or U.S. generally accepted accounting principles (GAAP). Adjusted free cash flow was previously referred to as free cash flow, but has been renamed. Its composition remains unchanged. In addition, non-IFRS operating earnings (adjusted EBIAT) was previously reconciled to IFRS earnings before income taxes, and non-IFRS operating margin was previously reconciled to IFRS earnings before income taxes as a percentage of revenue, but are now (and in future periods will be) reconciled to IFRS earnings from operations, and IFRS earnings from operations as a percentage of revenue, respectively (as the most directly comparable IFRS financial measures), with no change to either resultant non-IFRS measure. Prior period reconciliations included herein reflect the current presentation. See "Non-IFRS Supplementary Information" below for information on our rationale for the use of non-IFRS financial measures, and Schedule 1 for, among other items, non-IFRS financial measures included in this press release, as well as their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. The most directly-comparable IFRS financial measures to non-IFRS operating margin, non-IFRS adjusted EPS, non-IFRS adjusted return on invested capital and non-IFRS adjusted free cash flow are earnings from operations as a percentage of revenue, EPS, return on invested capital, and cash provided by operations, respectively. Third Quarter of 2022 (Q3 2022) Guidance   Q3 2022 Guidance Revenue (in billions)         $1.650 to $1.800 Non-IFRS operating margin*         4.8% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions)         $64 to $66 Adjusted EPS (non-IFRS)*         $0.41 to $0.47 For Q3 2022, we expect a negative $0.13 to $0.19 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges; and a non-IFRS adjusted effective tax rate* of approximately 21% (which does not account for foreign exchange impacts or unanticipated tax settlements). 2022 Outlook Based on our strong execution in Q2 2022, and current and expected levels of demand, we have raised our 2022 revenue outlook to at least $6.7 billion, and tightened our 2022 non-IFRS adjusted EPS* target to between $1.65 and $1.75. We continue to anticipate 2022 non-IFRS operating margin* to be between 4% and 5%. The above financial guidance and outlook assume that the supply chain constraint impact on our revenue and expenses does not materially worsen during the remainder of 2022 as compared to Q2 2022. In addition, although the Q2 2022 financial impact of a recent fire at our facility in Batam, Indonesia (Batam Fire), described in note 14 to our June 30, 2022 unaudited interim condensed consolidated financial statements (Q2 2022 Interim Financial Statements) was minimal, anticipated supply chain delays in procuring replacement Batam inventories are expected to result in unfulfilled revenue in 2022 of less than $100 million (we anticipate such revenues to be shifted to 2023). We expect to fully recover our tangible losses from the Batam Fire through insurance coverage. Although we have incorporated the anticipated impact of supply chain constraints and the Batam Fire into the foregoing financial guidance and outlook to the best of our ability, their adverse impact (in terms of duration and severity) cannot be estimated with certainty, and may be materially in excess of our expectations. * See Schedule 1 for the definitions of these non-IFRS financial measures. We do not provide reconciliations for forward-looking non-IFRS financial measures, as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various events that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact the most directly comparable forward-looking IFRS financial measure. For these same reasons, we are unable to address the probable significance of the unavailable information. Forward-looking non-IFRS financial measures may vary materially from the corresponding IFRS financial measures. Summary of Selected Q2 2022 Results   Q2 2022 Actual   Q2 2022 Guidance (2) Key measures:       Revenue (in billions)          $1.72   $1.575 to $1.725 Non-IFRS operating margin*         4.8%   4.6% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges Adjusted SG&A (non-IFRS)* (in millions)         $63.1   $62 to $64 Adjusted EPS (non-IFRS)*         $0.44   $0.38 to $0.44         Directly comparable IFRS financial measures:       Earnings from operations as a % of revenue         3.7%   N/A SG&A (in millions)         $71.0   N/A EPS (1)         $0.29   N/A * See Schedule 1 for, among other things, the definitions of, and exclusions used to determine, these non-IFRS financial measures, and a reconciliation of such financial measures to the most directly comparable IFRS financial measures for Q2 2022. (1) IFRS EPS of $0.29 for Q2 2022 included an aggregate charge of $0.19 (pre-tax) per share for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges. See the tables in Schedule 1 and note 9 to our Q2 2022 Interim Financial Statements for per-item charges. This aggregate charge was within our Q2 2022 guidance range of between $0.14 to $0.20 per share for these items. IFRS EPS for Q2 2022 included a $0.02 per share net positive impact attributable to other charges (recoveries), consisting primarily of a $0.03 per share positive impact attributable to Transition Recoveries (defined in Schedule 1), offset in part by a $0.01 per share negative impact attributable to restructuring charges. Although $92 million in write-downs to inventories, a building and equipment due to the Batam Fire were recorded in other charges (recoveries), an equivalent amount was also recorded in other charges (recoveries) as a recovery, as we expect to fully recover the written-down amounts pursuant to the terms and conditions of our insurance policies. IFRS EPS of $0.46 for the first half of 2022 (1H 2022) included: (i) a $0.02 per share net negative impact attributable to other charges (recoveries) (consisting most significantly of a $0.03 per share negative impact attributable to restructuring charges and a $0.01 per share negative impact attributable to Transition Costs, substantially offset by a $0.03 per share positive impact attributable to Transition Recoveries (each defined in Schedule 1)); (ii) as a result of supply chain constraints and COVID-19-related workforce expenses and constraints, a $0.03 per share negative impact attributable to estimated Constraint Costs (defined as both direct and indirect costs, including manufacturing inefficiencies related to lost revenue due to our inability to secure materials, idled labor costs, and incremental costs for labor, expedite fees and freight premiums, cleaning supplies, personal protective equipment, and/or IT-related services to support our work-from-home arrangements); and (iii) a $0.04 favorable tax impact attributable to the reversal of tax uncertainties in one of our Asian subsidiaries. See notes 9 and 10 to the Q2 2022 Interim Financial Statements. See the preceding paragraph for a discussion of offsetting charges and recoveries pertaining to the Batam Fire. IFRS EPS of $0.21 for Q2 2021 included a $0.02 per share negative impact attributable to restructuring charges, and, as a result of supply chain constraints and COVID-19-related workforce expenses and constraints, a $0.02 per share negative impact attributable to estimated Constraint Costs, net of recognized COVID-19-related government subsidies, credits and grants and customer recoveries (collectively, COVID Recoveries). IFRS EPS of $0.29 for the first half of 2021 (1H 2021) included a $0.07 per share negative impact attributable to restructuring charges and a $0.03 per share negative impact attributable to estimated Constraint Costs, net of recognized COVID Recoveries. For the estimated impact of supply chain constraints on our revenues and costs in 1H 2022, Q2 2021 and 1H 2021, see "Segment Updates — Operational Impacts" of our Q2 2022 Management's Discussion and Analysis of Financial Condition and Results of Operations, to be filed today at www.sedar.com and furnished on Form 6-K at www.sec.gov. (2) For Q2 2022, our revenue and non-IFRS adjusted EPS met the high end of our guidance ranges, and our non-IFRS operating margin exceeded the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges, driven by solid results in both of our segments. Non-IFRS adjusted SG&A for Q2 2022 was within our guidance range. Our IFRS effective tax rate for Q2 2022 was 28%. Our non-IFRS adjusted effective tax rate for Q2 2022 was 22%, higher than our anticipated estimate of approximately 20%, mainly due to jurisdictional profit mix. Q2 2022 Webcast Management will host its Q2 2022 results conference call on July 26, 2022 at 8:00 a.m. Eastern Daylight Time (EDT). The webcast can be accessed at www.celestica.com. Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS financial measures to consider in evaluating the company's operating performance. Management uses adjusted net earnings and other non-IFRS financial measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's business; and to set management incentive targets. We believe investors use both IFRS and non-IFRS financial measures to assess management's past, current and future decisions associated with our priorities and our allocation of capital, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact our core operations. See Schedule 1 below. About CelesticaCelestica enables the world's best brands. Through our recognized customer-centric approach, we partner with leading companies in Aerospace and Defense, Communications, Enterprise, HealthTech, Industrial, and Capital Equipment to deliver solutions for their most complex challenges. As a leader in design, manufacturing, hardware platform and supply chain solutions, Celestica brings global expertise and insight at every stage of product development - from the drawing board to full-scale production and after-market services. With talented teams across North America, Europe and Asia, we imagine, develop and deliver a better future with our customers. For more information on Celestica, visit www.celestica.com. Our securities filings can be accessed at www.sedar.com and www.sec.gov. Cautionary Note Regarding Forward-looking Statements This press release contains forward-looking statements, including, without limitation, those related to: our anticipated financial and/or operational results and outlook, including our anticipated Q3 2022 non-IFRS adjusted effective tax rate, and our expectations with respect to the impact of, and insurance recoveries for tangible losses in connection with, the Batam Fire; our credit risk; our liquidity; anticipated charges and expenses, including restructuring charges; the potential impact of tax and litigation outcomes; mandatory prepayments under our credit facility; our intangible asset amortization; and interest rates. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "continues," "project," "target," "potential," "possible," "contemplate," "seek," or similar expressions, or may employ such future or conditional verbs as "may," "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and for forward-looking information under applicable Canadian securities laws. Forward-looking statements are provided to assist readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including, among others, risks related to: customer and segment concentration; price, margin pressures, and other competitive factors and adverse market conditions affecting, and the highly competitive nature of, the electronics manufacturing services industry in general and our segments in particular (including the risk that anticipated market improvements do not materialize); delays in the delivery and availability of components, services and/or materials, as well as their costs and quality; challenges of replacing revenue from completed, lost or non-renewed programs or customer disengagements; our customers' ability to compete and succeed using our products and services; changes in our mix of customers and/or the types of products or services we provide, including negative impacts of higher concentrations of lower margin programs; managing changes in customer demand; rapidly evolving and changing technologies, and changes in our customers' business or outsourcing strategies; the cyclical and volatile nature of our semiconductor business; the expansion or consolidation of our operations; the inability to maintain adequate utilization of our workforce; defects or deficiencies in our products, services or designs; volatility in the commercial aerospace industry; integrating and achieving the anticipated benefits from acquisitions (including our acquisition of PCI) and "operate-in-place" arrangements; an inability to recover our tangible losses caused by the Batam Fire through insurance claims; an inability to return to pre-Batam Fire production rates when anticipated; operational disruptions caused by the Batam Fire that may have a more severe impact on our financial results than anticipated; compliance with customer-driven policies and standards, and third-party certification requirements; challenges associated with new customers or programs, or the provision of new services; the impact of our restructuring actions and/or productivity initiatives, including a failure to achieve anticipated benefits therefrom; negative impacts on our business resulting from newly-increased third-party indebtedness; the incurrence of future restructuring charges, impairment charges, other unrecovered write-downs of assets or operating losses; managing our business during uncertain market, political and economic conditions, including among others, geopolitical and other risks associated with our international operations, including military actions, protectionism and reactive countermeasures, economic or other sanctions or trade barriers, including in relation to the evolving Ukraine/Russia conflict; disruptions to our operations, or those of our customers, component suppliers and/or logistics partners, including as a result of events outside of our control (see "External Factors that May Impact our Business" in Item 5 of our 2021 20-F); the scope, duration and impact of the COVID-19 pandemic and material constraints; changes to our operating model; rising commodity, materials and component costs as well as rising labor costs and changing labor conditions; execution and/or quality issues (including our ability to successfully resolve these challenges); non-performance by counterparties; maintaining sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; negative impacts on our business resulting from any significant uses of cash (including for the acquisition of PCI), securities issuances, and/or additional increases in third-party indebtedness (including as a result of an inability to sell desired amounts under our uncommitted accounts receivable sales program or supplier financing programs); foreign currency volatility; our global operations and supply chain; competitive bid selection processes; customer relationships with emerging companies; recruiting or retaining skilled talent; our dependence on industries affected by rapid technological change; our ability to adequately protect intellectual property and confidential information; increasing taxes (including as a result of global tax reform), tax audits, and challenges of defending our tax positions; obtaining, renewing or meeting the conditions of tax incentives and credits; the management of our information technology systems, and the fact that while we have not been materially impacted by computer viruses, malware, ransomware, hacking attempts or outages, we have been (and may continue to be) the target of such events; the inability to prevent or detect all errors or fraud; the variability of revenue and operating results; unanticipated disruptions to our cash flows; compliance with applicable laws and regulations; our pension and other benefit plan obligations; changes in accounting judgments, estimates and assumptions; our ability to maintain compliance with applicable credit facility covenants; interest rate fluctuations and the discontinuation of LIBOR; our ability to refinance our indebtedness from time to time; deterioration in financial markets or the macro-economic environment; our credit rating; the interest of our controlling shareholder; current or future litigation, governmental actions, and/or changes in legislation or accounting standards; negative publicity; that we will not be permitted to, or do not, repurchase subordinate voting shares (SVS) under any normal course issuer bid (NCIB); the impact of climate change; and our ability to achieve our environmental, social and governance (ESG) initiative goals, including with respect to diversity and inclusion and climate change. The foregoing and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our most recent MD&A, our 2021 Annual Report on Form 20-F filed with, and subsequent reports on Form 6-K furnished to, the U.S. Securities and Exchange Commission, and as applicable, the Canadian Securities Administrators. The forward-looking statements contained in this press release are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include: continued growth (and recovery from adverse impacts due to COVID-19) in the broader economy and our end markets; growth in manufacturing outsourcing from customers in diversified end markets; no significant unforeseen negative impacts to Celestica's operations; no unforeseen materials price increases, margin pressures, or other competitive factors affecting the EMS industry in general or our segments in particular, as well as those related to the following: the scope and duration of materials constraints (i.e., that they do not materially worsen) and the COVID-19 pandemic and their impact on our sites, customers and suppliers; our ability to recover our tangible losses caused by the Batam Fire through insurance proceeds; our ability to return our Batam operations to pre-Batam Fire production rates when anticipated; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success of our customers' products; our ability to retain programs and customers; the stability of general economic and market conditions and currency exchange rates; supplier performance and quality, pricing and terms; compliance by third parties with their contractual obligations; the costs and availability of components, materials, services, equipment, labor, energy and transportation; that our customers will retain liability for product/component tariffs and countermeasures; global tax legislation changes; our ability to keep pace with rapidly changing technological developments; the timing, execution and effect of restructuring actions; the successful resolution of quality issues that arise from time to time; the components of our leverage ratio (as defined in our credit facility); our ability to successfully diversify our customer base and develop new capabilities; the availability of capital resources for, and the permissibility under our credit facility of, repurchases of outstanding SVS under NCIBs, and compliance with applicable laws and regulations pertaining to NCIBs; compliance with applicable credit facility covenants; anticipated demand strength in certain of our businesses; anticipated demand weakness in, and/or the impact of anticipated adverse market conditions on, certain of our businesses; our ability to successfully integrate PCI and achieve the expected long-term benefits from the acquisition; and our maintenance of sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities. Although management believes its assumptions to be reasonable under the current circumstances, they may prove to be inaccurate, which could cause actual results to differ materially (and adversely) from those that would have been achieved had such assumptions been accurate. Forward-looking statements speak only as of the date on which they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.    All forward-looking statements attributable to us are expressly qualified by these cautionary statements.   Schedule 1 Supplementary Non-IFRS Financial Measures The non-IFRS financial measures (including ratios based on non-IFRS financial measures) included in this press release are: adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, non-IFRS operating earnings (or adjusted EBIAT), non-IFRS operating margin (non-IFRS operating earnings or adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted EPS, adjusted return on invested capital (adjusted ROIC), adjusted free cash flow, adjusted tax expense and adjusted effective tax rate. Adjusted EBIAT, adjusted ROIC, adjusted free cash flow, adjusted tax expense and adjusted effective tax rate are further described in the tables below. Adjusted free cash flow was previously referred to as free cash flow, but has been renamed. Its composition remains unchanged. In addition, non-IFRS operating earnings (adjusted EBIAT) was previously reconciled to IFRS earnings before income taxes, and non-IFRS operating margin was previously reconciled to IFRS earnings before income taxes as a percentage of revenue, but are now (and in future periods will be) reconciled to IFRS earnings from operations, and IFRS earnings from operations as a percentage of revenue, respectively (as the most directly comparable IFRS financial measures), with no change to either resultant non-IFRS measure. Prior period reconciliations included herein reflect the current presentation. In calculating our non-IFRS financial measures, management excludes the following items (where indicated): employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), Other Charges, net of recoveries (defined below), and specified Finance Costs (defined below), all net of the associated tax adjustments (quantified in the table below), and non-core tax impacts (tax adjustments related to acquisitions, and certain other tax costs or recoveries related to restructuring actions or restructured sites). We believe the non-IFRS financial measures we present herein are useful to investors, as they enable investors to evaluate and compare our results from operations in a more consistent manner (by excluding specific items that we do not consider to be reflective of our core operations), to evaluate cash resources that we generate from our business each period, and to provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. In addition, management believes that the use of a non-IFRS adjusted tax expense and a non-IFRS adjusted effective tax rate provide improved insight into the tax effects of our core operations, and are useful to management and investors for historical comparisons and forecasting. These non-IFRS financial measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of our core operations. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies that report under IFRS, or who report under U.S. GAAP and use non-GAAP financial measures to describe similar financial metrics. Non-IFRS financial measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any IFRS financial measure. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS financial measures are nonetheless recognized under IFRS and have an economic impact on us. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of our performance, and reconciling non-IFRS financial measures back to the most directly comparable IFRS financial measures. The economic substance of these exclusions described above (where applicable to the periods presented) and management's rationale for excluding them from non-IFRS financial measures is provided below: Employee SBC expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee SBC expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do. Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance. Other Charges, net of recoveries, consist of, when applicable: Restructuring Charges, net of recoveries (defined below); Transition Costs (Recoveries) (defined below); net Impairment charges (defined below); consulting, transaction and integration costs related to potential and completed acquisitions, and charges or releases related to the subsequent re-measurement of indemnification assets or the release of indemnification or other liabilities recorded in connection with acquisitions, when applicable; legal settlements (recoveries); specified credit facility-related charges; and post-employment benefit plan losses. We exclude these charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities or incurrence of the relevant costs. Our competitors may record similar charges at different times, and we believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these types of charges, net of recoveries, in assessing operating performance. Restructuring Charges, net of recoveries, consist of costs relating to: employee severance, lease terminations, site closings and consolidations; write-downs of owned property and equipment which are no longer used and are available for sale; and reductions in infrastructure. Transition Costs consist of costs recorded in connection with: (i) the relocation of our Toronto manufacturing operations, and the move of our corporate headquarters into and out of a temporary location during, and upon completion, of the construction of space in a new office building at our former location (all in connection with the 2019 sale of our Toronto real property), (ii) the transfer of manufacturing lines from closed sites to other sites within our global network; and (iii) consistent with the treatment of our Toronto real property sale, the sale of real properties unrelated to restructuring actions (Property Dispositions). Transition Costs consist of direct relocation and duplicate costs (such as rent expense, utility costs, depreciation charges, and personnel costs) incurred during the transition periods, as well as cease-use and other costs incurred in connection with idle or vacated portions of the relevant premises that we would not have incurred but for these relocations, transfers and dispositions. Transition Recoveries consist of any gains recorded in connection with Property Dispositions. We believe that excluding these costs and recoveries permits a better comparison of our core operating results from period-to-period, as these costs or recoveries will not reflect our ongoing operations once these relocations, manufacturing line transfers, and dispositions are complete. Impairment charges, which consist of non-cash charges against goodwill, intangible assets, property, plant and equipment, and right-of-use (ROU) assets, result primarily when the carrying value of these assets exceeds their recoverable amount. Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our accounts receivable sales program and customers' supplier financing programs, and interest expense on our lease obligations, net of interest income earned. We believe that excluding Finance Costs paid (other than debt issuance costs and credit-agreement-related waiver fees paid, which are not considered part of our ongoing financing expenses) from cash provided by operations in the determination of non-IFRS adjusted free cash flow provides useful insight for assessing the performance of our core operations. Non-core tax impacts are excluded, as we believe that these costs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these costs or recoveries in assessing operating performance. The following table (which is unaudited) sets forth, for the periods indicated, the various non-IFRS financial measures discussed above, and a reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures (in millions, except percentages and per share amounts):   Three months ended June 30   Six months ended June 30     2021       2022       2021       2022       % ofrevenue     % ofrevenue     % ofrevenue     % ofrevenue IFRS revenue         $ 1,420.3       $ 1,717.2       $ 2,655.2       $ 3,284.1                             IFRS gross profit         $ 118.0   8.3 %   $ 149.9   8.7 %   $ 219.5   8.3 %   $ 282.4   8.6 % Employee SBC expense           1.4         5.3         6.3         10.9     Non-IFRS adjusted gross profit         $ 119.4   8.4 %   $ 155.2   9.0 %   $ 225.8   8.5 %   $ 293.3   8.9 %                         IFRS SG&A         $ 58.8   4.1 %   $ 71.0   4.1 %   $ 117.6   4.4 %   $ 136.7   4.2 % Employee SBC expense           (4.1 )       (7.9 )       (9.3 )       (16.9 )   Non-IFRS adjusted SG&A         $ 54.7   3.9 %   $ 63.1   3.7 %   $ 108.3   4.1 %   $ 119.8   3.6 %                         IFRS earnings from operations         $ 42.4   3.0 %   $ 62.7   3.7 %   $ 66.1   2.5 %   $ 103.3   3.1 % Employee SBC expense           5.5         13.2         15.6         27.8     Amortization of intangible assets (excluding computer software)           4.9         9.3         9.8         18.6     Other Charges            2.2         (2.5 )       6.8         2.3     Non-IFRS operating earnings (adjusted EBIAT)(1)         $ 55.0   3.9 %   $ 82.7   4.8 %   $ 98.3   3.7 %   $ 152.0   4.6 %                         IFRS net earnings         $ 26.3   1.9 %   $ 35.6   2.1 %   $ 36.8   1.4 %   $ 57.4   1.7 % Employee SBC expense           5.5         13.2         15.6         27.8     Amortization of intangible assets (excluding computer software)           4.9         9.3         9.8         18.6     Other Charges            2.2         (2.5 )       6.8         2.3     Adjustments for taxes(2)           (1.0 )       (1.4 )       (3.3 )       (3.7 )   Non-IFRS adjusted net earnings         $ 37.9       $ 54.2       $ 65.7       $ 102.4                             Diluted EPS                       Weighted average # of shares (in millions)            127.6         124.0         128.3         124.3     IFRS earnings per share          $ 0.21       $ 0.29       $ 0.29       $ 0.46     Non-IFRS adjusted earnings per share         $ 0.30       $ 0.44       $ 0.51       $ 0.82     # of shares outstanding at period end (in millions)           126.8         123.2         126.8         123.2                             IFRS cash provided by operations         $ 56.5       $ 86.9       $ 105.3       $ 122.2     Purchase of property, plant and equipment, net of sales proceeds            (9.5 )       (21.5 )       (22.1 )       (37.9 )   Lease payments            (10.4 )       (11.9 )       (20.0 )       (23.1 )   Finance Costs paid (excluding debt issuance costs paid)            (5.4 )       (10.2 )       (11.1 )       (17.4 )   Non-IFRS adjusted free cash flow (3)         $ 31.2       $ 43.3       $ 52.1       $ 43.8                             IFRS ROIC % (4)           8.7 %       9.7 %       6.3 %       8.0 %   Non-IFRS adjusted ROIC % (4)           13.7 %       16.2 %       12.2 %       15.1 %   (1) Management uses non-IFRS operating earnings (adjusted EBIAT) as a measure to assess performance related to our core operations. Non-IFRS operating earnings is defined as earnings from operations before employee SBC expense, amortization of intangible assets (excluding computer software), and Other Charges (recoveries) (defined above). See note 9 to our Q2 2022 Interim Financial Statements for separate quantification and discussion of the components of Other Charges (recoveries). (2) The adjustments for taxes, as applicable, represent the tax effects of our non-IFRS adjustments and non-core tax impacts (see below). The following table sets forth a reconciliation of our IFRS tax expense and IFRS effective tax rate to our non-IFRS adjusted tax expense and our non-IFRS adjusted effective tax rate for the periods indicated, in each case determined by excluding the tax benefits or costs associated with the listed items (in millions, except percentages) from our IFRS tax expense for such periods:   Three months ended June 30   Six months ended June 30     2021 Effectivetax rate     2022   Effectivetax rate     2021 Effectivetax rate     2022   Effectivetax rate IFRS tax expense and IFRS effective tax rate         $ 8.5 24%   $ 14.0   28%   $ 13.7 27%   $ 23.0   29%                         Tax costs (benefits) of the following items excluded from IFRS tax expense:                       Employee SBC expense           0.6       1.5         1.5       3.0     Amortization of intangible assets (excluding computer software)           —       0.7         —       1.5     Other Charges            0.4       (0.8 )       0.7       (0.8 )   Non-core tax impact related to restructured sites*           —       —         1.1       —     Non-IFRS adjusted tax expense and non-IFRS adjusted effective tax rate         $ 9.5 20%   $ 15.4   22%   $ 17.0 21%   $ 26.7   21% Consists of the reversals of tax uncertainties related to one of our Asian subsidiaries that completed its liquidation and dissolution during the first quarter of 2021. (3) Management uses non-IFRS adjusted free cash flow as a measure, in addition to IFRS cash provided by (used in) operations, to assess our operational cash flow performance. We believe non-IFRS adjusted free cash flow provides another level of transparency to our liquidity. Non-IFRS adjusted free cash flow is defined as cash provided by (used in) operations after the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus equipment and property), lease payments and Finance Costs (defined above) paid (excluding any debt issuance costs and when applicable, credit facility waiver fees paid). We do not consider debt issuance costs (nil and $0.8 million paid in Q1 2022 and 1H 2022, respectively; nil in Q2 2021 or 1H 2021) or such waiver fees (when applicable) to be part of our ongoing financing expenses. As a result, these costs are excluded from total Finance Costs paid in our determination of non-IFRS adjusted free cash flow. Note, however, that non-IFRS adjusted free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures. (4) Management uses non-IFRS adjusted ROIC as a measure to assess the effectiveness of the invested capital we use to build products or provide services to our customers, by quantifying how well we generate earnings relative to the capital we have invested in our business. Non-IFRS adjusted ROIC is calculated by dividing non-IFRS adjusted EBIAT by average net invested capital. Net invested capital (calculated in the table below) is derived from IFRS financial measures, and is defined as total assets less: cash, ROU assets, accounts payable, accrued and other current liabilities, provisions, and income taxes payable. We use a two-point average to calculate average net invested capital for the quarter and a three-point average to calculate average net invested capital for the six-month period. Average net invested capital for Q2 2022 is calculated using the average of net invested capital as at March 31, 2022 and June 30, 2022, and average net invested capital for 1H 2022 is calculated using the average of net invested capital as at December 31, 2021, March 31, 2022 and June 30, 2022. A comparable financial measure under IFRS would be determined by dividing IFRS earnings before income taxes by average net invested capital. The following table sets forth, for the periods indicated, our calculation of IFRS ROIC % and non-IFRS adjusted ROIC % (in millions, except IFRS ROIC % and non-IFRS adjusted ROIC %).     Three months ended   Six months ended     June 30   June 30       2021       2022       2021       2022                     IFRS earnings before income taxes           $ 34.8     $ 49.6     $ 50.5     $ 80.4   Multiplier to annualize earnings             4       4       2       2   Annualized IFRS earnings before income taxes           $ 139.2     $ 198.4     $ 101.0     $ 160.8                     Average net invested capital for the period            $ 1,600.3     $ 2,036.8     $ 1,607.1     $ 2,010.2                     IFRS ROIC % (1)             8.7 %     9.7 %     6.3 %     8.0 %                       Three months ended   Six months ended     June 30   June 30       2021       2022       2021       2022                     Non-IFRS operating earnings (adjusted EBIAT)           $ 55.0     $ 82.7     $ 98.3     $ 152.0   Multiplier to annualize earnings             4       4       2       2   Annualized non-IFRS adjusted EBIAT           $ 220.0     $ 330.8     $ 196.6     $ 304.0                     Average net invested capital for the period           $ 1,600.3     $ 2,036.8     $ 1,607.1     $ 2,010.2                     Non-IFRS adjusted ROIC % (1)             13.7 %     16.2 %     12.2 %     15.1 %                           December 312021   March 312022   June 302022 Net invested capital consists of:                 Total assets   $ 4,666.9     $ 4,848.0     $ 5,140.5   Less: cash     394.0       346.6       365.5   Less: ROU assets     113.8       109.8       133.6   Less: accounts payable, accrued and other current liabilities, provisions and income taxes payable     2,202.0       2,347.4       2,612.1   Net invested capital at period end (1)   $ 1,957.1     $ 2,044.2     $.....»»

(All amounts in U.S. dollars.Per share information based on dilutedshares outstanding unless otherwise noted.) TORONTO, Oct. 25, 2021 (GLOBE NEWSWIRE) -- Celestica Inc. (TSX:CLS) (NYSE:CLS), a leader in design, manufacturing and supply chain solutions for the world's most innovative companies, today announced financial results for the quarter ended September 30, 2021 (Q3 2021)†. "Celestica's strong third quarter performance reflects our consistent execution and the resiliency of our business, as we continue to successfully navigate challenges related to the pandemic and the global supply chain. Our non-IFRS operating margin* of 4.2% marks our seventh consecutive quarter of year-to-year improvement, and represents the highest operating margin in Celestica's history as a publicly-traded company," said Rob Mionis, President and CEO, Celestica. "Our performance in recent quarters serves as a validation of our long-term strategy and transformation actions in the face of a challenging and constantly evolving business environment." "The fourth quarter of 2021 serves as an important inflection point in our business, as our focus now turns squarely to growth and maintaining the momentum we've built in recent quarters. We remain on track to complete our acquisition of PCI in November. Achievement of our revenue guidance for the fourth quarter of 2021 will represent a return to top-line growth, and achievement of our non-IFRS operating margin* mid-point guidance of 4.5% will set a new high-water mark for our business. As we approach the final months of 2021, we believe we are well positioned to continue building on our success, and we reaffirm our strong outlook for 2022." Q3 2021 Highlights Revenue: $1.47 billion, decreased 5% compared to $1.55 billion for the third quarter of 2020 (Q3 2020); Revenue of our non-Cisco business** increased 6% compared to Q3 2020. Operating margin (non-IFRS)*: 4.2%, compared to 3.9% for Q3 2020. ATS segment revenue: increased 12% compared to Q3 2020; ATS segment margin was 4.3%, compared to 3.7% for Q3 2020. CCS segment revenue: decreased 14% compared to Q3 2020; CCS segment margin was 4.1%, compared to 4.0% for Q3 2020; Non-Cisco CCS revenue*** increased 2% compared to Q3 2020. Lifecycle Solutions portfolio revenue (combined ATS segment and HPS revenue): increased 15% compared to Q3 2020, and represented 60% of total revenue, compared to 50% of total revenue for Q3 2020. IFRS earnings per share (EPS): $0.28, compared to $0.24 per share for Q3 2020. Adjusted EPS (non-IFRS)*: $0.35, compared to $0.32 for Q3 2020. Adjusted return on invested capital (non-IFRS)*: 15.2%, flat compared to Q3 2020. Free cash flow (non-IFRS)*: $27.1 million, compared to $15.8 million for Q3 2020. Repurchased and cancelled 2.1 million subordinate voting shares for $17.2 million under our normal course issuer bid (NCIB). Q4 2021 Guidance Our fourth quarter of 2021 (Q4 2021) guidance assumes consummation of the acquisition of PCI Private Limited (PCI) (described below) in November 2021, and incorporates our estimated impact of supply chain constraints. IFRS revenue: $1.425 billion to $1.575 billion Operating margin (non-IFRS)*: 4.5% at the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges Adjusted SG&A (non-IFRS)*: $62 million to $64 million Adjusted EPS (non-IFRS)*: $0.35 to $0.41 For Q4 2021, we expect a negative $0.11 to $0.17 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee SBC expense, amortization of intangible assets (excluding computer software), and restructuring charges, and an non-IFRS adjusted effective tax rate of approximately 19% (which does not account for foreign exchange impacts or any unanticipated tax settlements). Full-Year 2021 Commentary We believe that 2021 is on track to be a successful year for Celestica, and one where we make meaningful progress towards the achievement of our long-term strategic objectives. Achievement of the mid-point of our guidance ranges for Q4 2021 (see above), would represent the following financial accomplishments for 2021: Adjusted EPS (non-IFRS)* of $1.24, compared to $0.98 for 2020, a growth rate of 27% Operating margin (non-IFRS)* of 4.0%, compared to 3.5% for 2020, an improvement of 50 basis points Non-Cisco business revenue** growth of 7% compared to 2020 Lifecycle Solutions portfolio revenue concentration of approximately 60%, compared to 51% for 2020 The foregoing commentary represents operating measures that would result if the mid-point of our Q4 2021 guidance ranges are achieved, and are not intended to be projections or forecasts of future performance. Our future performance is subject to risks, uncertainties and other factors that could cause actual outcomes and results to differ materially those described in this section. 2022 Outlook As we look to 2022, we expect the markets to remain dynamic. However, we believe that secular tailwinds in several of our end markets, strong operational performance and the ramping of new programs bode well for Celestica. Assuming the severity of supply chain constraints expected for the remainder of 2021 do not significantly worsen, and consummation of the PCI acquisition (see below) in November 2021, we anticipate the following for 2022: IFRS revenue to grow to at least $6.3 billion Operating margin (non-IFRS)* in the range of 4.0% to 5.0% Adjusted EPS (non-IFRS)* to increase by at least 20% compared to 2021 We do not provide reconciliations for forward-looking non-IFRS financial measures, as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various events that have not yet occurred, are out of our control and/or cannot be reasonably predicted, and that would impact the most directly comparable forward-looking IFRS financial measure. For these same reasons, we are unable to address the probable significance of the unavailable information. Forward-looking non-IFRS financial measures may vary materially from the corresponding IFRS financial measures. See Schedule 1 for the definitions of the foregoing non-IFRS financial measures, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. Also see "Non-IFRS Supplementary Information" below. † Celestica has two operating and reportable segments - Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS). Our ATS segment consists of our ATS end market, and is comprised of our Aerospace and Defense (A&D), Industrial, Energy, HealthTech and Capital Equipment (semiconductor, display, and power & signal distribution equipment) businesses. Our CCS segment consists of our Communications and Enterprise (servers and storage) end markets. Segment performance is evaluated based on segment revenue, segment income and segment margin (segment income as a percentage of segment revenue). See note 26 to our 2020 audited consolidated financial statements, included in our Annual Report on Form 20-F for the year ended December 31, 2020 (2020 20-F), available at www.sec.gov and www.sedar.com, for further detail. * Non-International Financial Reporting Standards (IFRS) financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar financial measures presented by other public companies that use IFRS or U.S. generally accepted accounting principles (GAAP). See "Non-IFRS Supplementary Information" below for information on our rationale for the use of non-IFRS financial measures, and Schedule 1 for, among other items, non-IFRS financial measures included in this press release, as well as their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. We do not provide reconciliations for forward-looking non-IFRS financial measures, as we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. See the paragraph after "2022 Outlook." ** total revenue from programs with customers other than Cisco Systems, Inc. (Cisco). *** aggregate CCS segment revenue from programs with customers other than Cisco. Summary of Selected Q3 2021 Results For information on the impact of coronavirus disease 2019 and related mutations (COVID-19) on our business in Q3 2021, see "Segment Updates" below and footnote (1) to the following table. Also see the "Recent Developments" section of each of our Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for Q3 2021, to be filed at www.sedar.com and www.sec.gov, and in Item 5 of our 2020 20-F.   Q3 2021 Actual (1)   Q3 2021 Guidance (2) IFRS revenue (in billions) $1.47   $1.40 to $1.55 IFRS EPS (1) $0.28   N/A IFRS earnings before income taxes as a % of revenue 3.0%   N/A Non-IFRS operating margin 4.2%   4.0% at the mid-point of ourrevenue and non-IFRS adjustedEPS guidance ranges IFRS SG&A (in millions) $62.0   N/A Non-IFRS adjusted SG&A (in millions) $56.5   $56 to $58 Non-IFRS adjusted EPS $0.35   $0.30 to $0.36 (1) IFRS EPS of $0.28 for Q3 2021 included an aggregate charge of $0.10 (pre-tax) per share for employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), and restructuring charges. See the tables in Schedule 1 and note 8 to our September 30, 2021 unaudited interim condensed consolidated financial statements (Q3 2021 Interim Financial Statements) for per-item charges. This aggregate charge was within our Q3 2021 guidance range of between $0.09 and $0.15 per share for these items. IFRS EPS for Q3 2021 included a $0.04 per share positive impact attributable to a deferred tax recovery recorded in connection with the revaluation of certain temporary differences using the future effective tax rate of our Thailand subsidiary related to the forthcoming reduction of the income tax exemption rate in 2022 under an applicable tax incentive (Revaluation Impact) (see note 9 to our Q3 2021 Interim Financial Statements), and a $0.03 per share positive impact attributable to net other recoveries (consisting most significantly of a $0.07 per share positive impact attributable to legal recoveries, offset in part by a $0.05 per share negative impact attributable to Acquisition Costs, as described in note 8 to our Q3 2021 Interim Financial Statements), all offset in part by a $0.05 per share negative impact attributable to estimated COVID-19 Costs, net of $1 million of recognized COVID Subsidies (each defined below). IFRS EPS of $0.24 for Q3 2020 included a $0.06 per share negative impact attributable to estimated COVID-19 Costs and a $0.03 per share negative impact attributable to restructuring charges, more than offset by a $0.085 per share positive impact attributable to approximately $11 million of recognized COVID-19-related government subsidies, grants and credits (COVID Subsidies) and $0.3 million of customer recoveries related to COVID-19 (Customer Recoveries), and a $0.05 per share positive impact to reflect SBC expense reversals recorded in Q3 2020 to reflect a reduction in the estimated number of certain share-based awards that were expected to vest in January 2021 (SBC Reversal). IFRS EPS of $0.57 for the first three quarters of 2021 (YTD 2021) included a $0.17 per share negative impact attributable to estimated COVID-19 Costs, and a $0.02 per share negative impact attributable to net other charges (consisting most significantly of a $0.06 per share negative impact attributable to net restructuring charges and a $0.04 per share negative impact attributable to Acquisition Costs, offset in part by an $0.08 per share positive impact attributable to legal recoveries, as described in note 8 to our Q3 2021 Interim Financial Statements), all offset in part by a $0.09 per share positive impact attributable to approximately $11 million of recognized COVID Subsidies and $1 million of Customer Recoveries, as well as the $0.04 per share positive Revaluation Impact. IFRS EPS of $0.31 for the first three quarters of 2020 (YTD 2020) included a $0.22 per share negative impact attributable to estimated COVID-19 Costs, and a $0.15 per share negative impact attributable to restructuring charges, offset in part by a $0.21 per share positive impact attributable to approximately $26 million of recognized COVID Subsidies and $1 million in Customer Recoveries, as well as the $0.05 per share positive impact of the SBC Reversal. See Schedule 1 for the exclusions used to determine non-IFRS adjusted EPS for Q3 2021, Q3 2020, YTD 2021 and YTD 2020. COVID-19 Costs consist of both direct and indirect costs, including manufacturing inefficiencies related to lost revenue due to our inability to secure materials, idled labor costs, and incremental costs for labor, expedite fees and freight premiums, cleaning supplies, personal protective equipment, and/or IT-related services to support our work-from-home arrangements. (2) For Q3 2021, our revenue was at the mid-point of our guidance range, our non-IFRS adjusted EPS was towards the high end of our guidance range, and our non-IFRS operating margin exceeded the mid-point of our revenue and non-IFRS adjusted EPS guidance ranges. Non-IFRS adjusted SG&A for Q3 2021 was within our guidance range and our non-IFRS adjusted effective tax rate for Q3 2021 was 19% (compared to our anticipated estimate of approximately 20%). Q3 2021 non-IFRS operating margin and adjusted EPS benefited from strong performance in both of our segments, despite adverse revenue impacts attributable to materials shortages. See "Non-IFRS Supplementary Information" below for information on our rationale for the use of non-IFRS financial measures, and Schedule 1 for, among other items, non-IFRS financial measures included in this press release, as well as their definitions, uses, and a reconciliation of historical non-IFRS financial measures to the most directly comparable IFRS financial measures. Segment Updates ATS Segment: ATS segment revenue increased 12% in Q3 2021 compared to Q3 2020, driven by strong revenue growth in our Capital Equipment and HealthTech businesses, and the continuing recovery in our Industrial business. These increases more than offset continued softness in the commercial aerospace portion of our A&D business related to COVID-19. Also see "Supply Chain and Workforce Constraints" below for a description of the estimated adverse impact of such matters on ATS segment revenue in Q3 2021 and the prior year period. We remain on track to achieve our target of 10% revenue growth in our ATS segment in 2021 as compared to 2020. ATS segment margin increased to 4.3% in Q3 2021 compared to 3.7% in Q3 2020, primarily due to profitable growth in our Capital Equipment business, which more than offset the impact of lower revenues in our A&D business. This marks the sixth consecutive quarter of sequential ATS segment margin expansion. We anticipate our ATS segment margin will enter our target range of 5% to 6% in Q4 2021. Revenue from our semiconductor Capital Equipment customers increased in Q3 2021 compared to Q3 2020. The growth was driven by continued strong end market demand, in combination with new program wins and market share gains. We expect continued strength in our Capital Equipment business in Q4 2021 and into 2022, and anticipate that revenue from our Capital Equipment business for 2021 will exceed $700 million, which would represent at least 30% growth over 2020. While A&D revenue in Q3 2021 was lower than in Q3 2020, primarily due to soft demand driven by the ongoing impact of COVID-19, headwinds have stabilized, resulting in modest sequential growth. Although we do not expect our commercial aerospace business to return to pre-COVID-19 levels in the near term, we expect modest sequential growth to continue in Q4 2021 and into 2022, supported by new program wins. During Q3 2021, revenue from our Industrial business increased compared to Q3 2020. Demand in our Industrial business continues to recover after being significantly impacted by COVID-19 in 2020. We expect year-over-year revenue and sequential growth in Q4 2021 supported by strong bookings and a general recovery in demand, as well as the addition of PCI assuming consummation of the acquisition in November 2021 as anticipated (see "PCI Acquisition" below). We expect PCI's portfolio, as well as our existing Industrial business, to achieve solid organic growth in 2022. HealthTech revenue increased in Q3 2021 compared to Q3 2020. While we expect to see some moderation in revenue growth in Q4 2021 due to softening demand in our COVID-19-related programs, we continue to expect our overall HealthTech business to grow in 2022, supported by the ramping of new non-COVID-related programs. CCS Segment: CCS segment revenue decreased in Q3 2021 compared to Q3 2020, primarily due to our disengagement from programs with Cisco Systems, Inc. (Cisco Disengagement), completed in the fourth quarter of 2020, as well as program-specific demand softness from certain server customers in our Enterprise end market. Also see "Supply Chain and Workforce Constraints" below for a description of the estimated adverse impact of such matters on CCS segment revenue in Q3 2021 and the prior year period. These decreases were partially offset by strong demand from service provider customers, including in our HPS business, as well as strength in demand from certain storage customers in our Enterprise end market. We expect that year-to-year Enterprise revenue declines will begin to stabilize in Q4 2021. Our HPS business recorded strong revenue growth in Q3 2021, increasing 22% to approximately $300 million compared to Q3 2020. CCS segment revenue from programs with customers other than Cisco increased 2% in Q3 2021 compared to Q3 2020, and increased 5% YTD 2021 compared to YTD 2020. Although total CCS segment revenue for 2021 is anticipated to decline compared to 2020, we currently expect approximately 20% revenue growth in our HPS business in 2021 compared to 2020, as HPS revenue is expected to exceed $1 billion for 2021. We also expect HPS revenue to increase by at least 10% in 2022 compared to 2021. Despite lower revenue levels, CCS segment margin improved to 4.1% in Q3 2021 compared to 4.0% in Q3 2020, primarily due to a more favorable mix, driven by our portfolio reshaping activities, and an increased concentration of revenue from our HPS business. This represents our sixth consecutive quarter with CCS segment margin above our target range. We expect CCS segment margin to exceed our 2% to 3% target range in Q4 2021, and to be at the high end of the target range, or slightly higher, for 2022. Supply Chain and Workforce Constraints: Global supply chain constraints, including as a result of COVID-19, continued to impact both of our segments in Q3 2021, resulting in extended lead times for certain components, and impacting the availability of materials required to support customer programs. However, our advanced planning processes, supply chain management, and collaboration with our customers and suppliers helped to partially mitigate the impact of these constraints on our revenue. We expect this pressure to persist in Q4 2021 and throughout 2022, particularly in our CCS segment. While we have incorporated these dynamics into our Q4 2021 guidance and 2022 annual outlook to the best of our ability, their adverse impact (in terms of duration and severity) cannot be estimated with certainty, and may be materially in excess of our expectations. As a result of recent resurgences of COVID-19 outbreaks, the governments of various jurisdictions have mandated periodic lockdowns or workforce constraints. However, because Celestica's operations have been considered an essential service by relevant local government authorities to date, our manufacturing sites have generally continued to operate in impacted countries (including Malaysia, Mexico, Thailand and Laos in Q3 2021), albeit at reduced capacities (due to reduced attendance, shift reductions or temporary shutdowns). Although these lockdowns and workforce constraints present a challenge to our business performance when in force, due to effective resource management and planning, we have been able to largely mitigate the impact of these actions to date on our manufacturing capacity and our revenues. We estimate that we had an aggregate adverse revenue impact of approximately $30 million in Q3 2021 as a result of supply chain constraints and, to a lesser extent, lockdowns/workforce constraints, consistent with Q2 2021. Such constraints adversely impacted revenue in our ATS segment by approximately $21 million and our CCS segment by approximately $9 million in Q3 2021 (Q3 2020 — approximately $16 million (ATS segment — approximately $7 million; CCS segment — approximately $9 million)). We also incurred approximately $7 million of estimated COVID-19 Costs during Q3 2021 (Q3 2020 — $8 million), and recognized approximately $1 million of COVID Subsidies and no Customer Recoveries (Q3 2020 — approximately $11 million in COVID Subsidies and $0.3 million in Customer Recoveries), each as defined in footnote 1 to the "Summary of Selected Q3 2021 Results" above. PCI Acquisition On September 21, 2021, we entered into a definitive agreement to acquire PCI, a fully-integrated design, engineering and manufacturing solutions provider with five manufacturing and design facilities across Asia. The purchase price is estimated to be approximately $306 million (subject to a working capital adjustment). We expect to finance the acquisition with a combination of cash and borrowings of up to $220 million under our current credit facility (described below). The transaction is expected to close in November 2021, subject to satisfaction of customary closing conditions. There can be no assurance, however, that this transaction will be consummated, in a timely manner, or at all. We intend to use borrowings under our revolver to finance this portion of the PCI acquisition at closing. However, we are currently pursuing the addition of a new term loan under our credit facility with the Administrative Agent thereunder, which if obtained, will be used to repay the amounts borrowed under the revolver for the acquisition. Although we believe that such term loan will be provided on acceptable terms, there can be no assurance that this will be the case. Intention to Launch New NCIB We intend to file a notice of intention with the Toronto Stock Exchange (TSX) to commence a new NCIB in Q4 2021, after our current NCIB expires in November 2021. If this notice is accepted by the TSX, we expect to be permitted to repurchase for cancellation, at our discretion during the 12 months following such acceptance, up to 10% of the "public float" (calculated in accordance with the rules of the TSX) of our issued and outstanding subordinate voting shares. Purchases under the new NCIB, if accepted, will be conducted in the open market or as otherwise permitted, subject to applicable terms and limitations, and will be made through the facilities of the TSX and the New York Stock Exchange. We believe that a new NCIB is in the interest of the Company. Q3 2021 Webcast Management will host its Q3 2021 results conference call on October 26, 2021 at 8:00 a.m. Eastern Daylight Time (EDT). The webcast can be accessed at www.celestica.com. Non-IFRS Supplementary Information In addition to disclosing detailed operating results in accordance with IFRS, Celestica provides supplementary non-IFRS financial measures to consider in evaluating the company's operating performance. Management uses adjusted net earnings and other non-IFRS financial measures to assess operating performance and the effective use and allocation of resources; to provide more meaningful period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of Celestica's business; and to set management incentive targets. We believe investors use both IFRS and non-IFRS financial measures to assess management's past, current and future decisions associated with our priorities and our allocation of capital, as well as to analyze how our business operates in, or responds to, swings in economic cycles or to other events that impact our core operations. See Schedule 1 below. About Celestica Celestica enables the world's best brands. Through our recognized customer-centric approach, we partner with leading companies in Aerospace and Defense, Communications, Enterprise, HealthTech, Industrial, Capital Equipment, and Energy to deliver solutions for their most complex challenges. As a leader in design, manufacturing, hardware platform and supply chain solutions, Celestica brings global expertise and insight at every stage of product development - from the drawing board to full-scale production and after-market services. With talented teams across North America, Europe and Asia, we imagine, develop and deliver a better future with our customers. For more information on Celestica, visit www.celestica.com. Our securities filings can be accessed at www.sedar.com and www.sec.gov. Cautionary Note Regarding Forward-looking Statements This press release contains forward-looking statements, including, without limitation, those related to the impact of the COVID-19 pandemic on our business; our priorities, goals and strategies; trends in the electronics manufacturing services (EMS) industry and our segments (and/or constituent businesses), and their anticipated impact; the anticipated impact of current market conditions on each of our segments (and/or constituent businesses) and near term expectations (positive and negative); our anticipated financial and/or operational results and outlook, including our anticipated Q4 2021 non-IFRS adjusted effective tax rate; our anticipated acquisition of PCI, the expected timing, cost, and funding thereof, and the expected impact of such acquisition, if consummated, on our Q4 2021 and 2022 financial results; our intention to launch a new NCIB and anticipated terms; our pursuit of a new term loan under our credit facility; materials, components and supply chain constraints; our credit risk; our liquidity; anticipated charges and expenses, including restructuring charges; the potential impact of tax and litigation outcomes; mandatory prepayments under our credit facility; interest rates; and our financial statement estimates and assumptions. Such forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "continues," "project," "target," "potential," "possible," "contemplate," "seek," or similar expressions, or may employ such future or conditional verbs as "may," "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995, where applicable, and applicable Canadian securities laws. Forward-looking statements are provided to assist readers in understanding management's current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements are not guarantees of future performance and are subject to risks that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including, among others, risks related to: customer and segment concentration; challenges of replacing revenue from completed, lost or non-renewed programs or customer disengagements; our customers' ability to compete and succeed using our products and services; price, margin pressures, and other competitive factors and adverse market conditions affecting, and the highly competitive nature of, the EMS industry in general and our segments in particular (including the risk that anticipated market improvements do not materialize); changes in our mix of customers and/or the types of products or services we provide, including negative impacts of higher concentrations of lower margin programs; the cyclical and volatile nature of our semiconductor business; delays in the delivery and availability of components, services and/or materials; managing changes in customer demand; rapidly evolving and changing technologies, and changes in our customers' business or outsourcing strategies; the expansion or consolidation of our operations; volatility in the commercial aerospace industry; the inability to maintain adequate utilization of our workforce; the nature of the display market; defects or deficiencies in our products, services or designs; integrating and achieving the anticipated benefits from acquisitions and "operate-in-place" arrangements; compliance with customer-driven policies and standards, and third-party certification requirements; challenges associated with new customers or programs, or the provision of new services; the impact of our restructuring actions, divestitures and/or productivity initiatives, including a failure to achieve anticipated benefits therefrom; the incurrence of future restructuring charges, impairment charges, other write-downs of assets or operating losses; managing our business during uncertain market, political and economic conditions, including among others, geopolitical and other risks associated with our international operations, including military actions, protectionism and reactive countermeasures, economic or other sanctions or trade barriers; disruptions to our operations, or those of our customers, component suppliers and/or logistics partners, including as a result of events outside of our control, including, among others: policies or legislation instituted by the former or current administration in the U.S., U.S. and global tax reform, the potential impact of significant tariffs on items imported into the U.S. and related countermeasures, and/or the impact of (in addition to COVID-19) other widespread illness or disease; the scope, duration and impact of the COVID-19 pandemic, including its continuing adverse impact on the commercial aerospace industry; changes to our operating model; changing commodity, materials and component costs as well as labor costs and conditions; execution and/or quality issues (including our ability to successfully resolve these challenges); non-performance by counterparties; maintaining sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities; negative impacts on our business resulting from current outstanding third-party indebtedness; negative impacts on our business resulting from any significant uses of cash, securities issuances, and/or additional increases in third-party indebtedness (including increased third-party indebtedness for the acquisition of PCI, and/or as a result of an inability to sell desired amounts under our uncommitted accounts receivable sales program); the failure to obtain an additional term loan in connection with our acquisition of PCI on acceptable terms, in a timely manner, or at all, and if obtained, that such term loan includes additional restrictive financial or operational covenants, significantly increased interest rates and/or additional significant fees; the failure to satisfy the closing conditions required for our purchase of PCI; a material adverse change at PCI; operational impacts that may affect PCI's ability to achieve anticipated financial results; the purchase price for PCI varying from the expected amount; the inability to use cash on hand and/or borrowings under our credit facility to fund the acquisition as anticipated; the failure to consummate the purchase of PCI when anticipated, in a timely manner, or at all, and if the acquisition is consummated, a failure to successfully integrate the acquisition, further develop our capabilities and/or customer base in expected markets or otherwise expand our portfolio of solutions, and/or achieve the other expected synergies and benefits from the acquisition; foreign currency volatility; our global operations and supply chain; competitive bid selection processes; customer relationships with emerging companies; recruiting or retaining skilled talent; our dependence on industries affected by rapid technological change; our ability to adequately protect intellectual property and confidential information; increasing taxes, tax audits, and challenges of defending our tax positions; obtaining, renewing or meeting the conditions of tax incentives and credits; computer viruses, malware, ransomware, hacking attempts or outages that may disrupt our operations; the inability to prevent or detect all errors or fraud; the variability of revenue and operating results; unanticipated disruptions to our cash flows; compliance with applicable laws, regulations, and government subsidies, grants or credits; the management of our information technology systems; our pension and other benefit plan obligations; changes in accounting judgments, estimates and assumptions; our ability to maintain compliance with applicable (or any new) credit facility covenants; interest rate fluctuations and changes to LIBOR; deterioration in financial markets or the macro-economic environment; our credit rating; the interest of our controlling shareholder; current or future litigation, governmental actions, and/or changes in legislation or accounting standards; negative publicity; that the TSX will not accept a new NCIB; that we will not be permitted to, or do not, repurchase subordinate voting shares (SVS) under any NCIB; and our ability to achieve our environmental, social and governance (ESG) initiative goals, including with respect to climate change. The foregoing and other material risks and uncertainties are discussed in our public filings at www.sedar.com and www.sec.gov, including in our most recent MD&A, our 2020 Annual Report on Form 20-F filed with, and subsequent reports on Form 6-K furnished to, the U.S. Securities and Exchange Commission, and as applicable, the Canadian Securities Administrators. The forward-looking statements contained in this press release are based on various assumptions, many of which involve factors that are beyond our control. Our material assumptions include those related to the following: the scope and duration of materials constraints and the COVID-19 pandemic and its impact on our sites, customers and suppliers; fluctuation of production schedules from our customers in terms of volume and mix of products or services; the timing and execution of, and investments associated with, ramping new business; the success of our customers' products; our ability to retain programs and customers; the stability of general economic and market conditions and currency exchange rates; supplier performance, pricing and terms; compliance by third parties with their contractual obligations; the costs and availability of components, materials, services, equipment, labor, energy and transportation; that our customers will retain liability for product/component tariffs and countermeasures; global tax legislation changes; our ability to keep pace with rapidly changing technological developments; the timing, execution and effect of restructuring actions; the successful resolution of quality issues that arise from time to time; the components of our leverage ratio (as defined in our credit facility); our ability to successfully diversify our customer base and develop new capabilities; the availability of cash resources for, and the permissibility under our credit facility of, repurchases of outstanding SVS under NCIBs, acceptance of a new NCIB and compliance with applicable laws and regulations pertaining to NCIBs; receipt of an additional term loan under our credit facility on acceptable terms and in a timely manner; that we will maintain compliance with applicable (or any new) credit facility covenants; anticipated demand strength in certain of our businesses; anticipated demand weakness in, and/or the impact of anticipated adverse market conditions on, certain of our businesses; and that: the closing conditions to our purchase of PCI will be satisfied in a timely manner; no material adverse change will have occurred at PCI; anticipated financial results by PCI will be achieved; our purchase of PCI will be consummated in a timely manner and on anticipated terms; our ability to use available cash on hand and incur further indebtedness under our credit facility will be as expected in order to finance the PCI acquisition as anticipated; once acquired, we are able to successfully integrate PCI, further develop our ATS segment business, and achieve the other expected synergies and benefits from the acquisition; all financial information provided by PCI is accurate and complete, and all forecasts of PCI's operating results are reasonable and were provided to Celestica in good faith; and we will continue to have sufficient financial resources to fund currently anticipated financial actions and obligations and to pursue desirable business opportunities. Although management believes its assumptions to be reasonable under the current circumstances, they may prove to be inaccurate, which could cause actual results to differ materially (and adversely) from those that would have been achieved had such assumptions been accurate. Forward-looking statements speak only as of the date on which they are made, and we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements. Schedule 1Supplementary Non-IFRS Financial Measures The non-IFRS financial measures included in this press release are: adjusted gross profit, adjusted gross margin (adjusted gross profit as a percentage of revenue), adjusted selling, general and administrative expenses (SG&A), adjusted SG&A as a percentage of revenue, operating earnings (or adjusted EBIAT), operating margin (operating earnings or adjusted EBIAT as a percentage of revenue), adjusted net earnings, adjusted EPS, adjusted return on invested capital (adjusted ROIC), free cash flow, adjusted tax expense and adjusted effective tax rate. Adjusted EBIAT, adjusted ROIC, free cash flow, adjusted tax expense and adjusted effective tax rate are further described in the tables below. In calculating our non-IFRS financial measures, management excludes the following items where indicated in the table below: employee stock-based compensation (SBC) expense, amortization of intangible assets (excluding computer software), Other Charges, net of recoveries (defined below), Finance Costs (defined below), and acquisition inventory fair value adjustments, all net of the associated tax adjustments (quantified in the table below), and non-core tax impacts (tax adjustments related to acquisitions, and certain other tax costs or recoveries related to restructuring actions or restructured sites). We believe the non-IFRS financial measures we present herein are useful to investors, as they enable investors to evaluate and compare our results from operations in a more consistent manner (by excluding specific items that we do not consider to be reflective of our core operations), to evaluate cash resources that we generate from our business each period, and to provide an analysis of operating results using the same measures our chief operating decision makers use to measure performance. In addition, management believes that the use of a non-IFRS adjusted tax expense and a non-IFRS adjusted effective tax rate provide improved insight into the tax effects of our core operations, and are useful to management and investors for historical comparisons and forecasting. These non-IFRS financial measures result largely from management's determination that the facts and circumstances surrounding the excluded charges or recoveries are not indicative of our core operations. Non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies that report under IFRS, or who report under U.S. GAAP and use non-GAAP financial measures to describe similar financial metrics. Non-IFRS financial measures are not measures of performance under IFRS and should not be considered in isolation or as a substitute for any IFRS financial measure. The most significant limitation to management's use of non-IFRS financial measures is that the charges or credits excluded from the non-IFRS financial measures are nonetheless recognized under IFRS and have an economic impact on us. Management compensates for these limitations primarily by issuing IFRS results to show a complete picture of our performance, and reconciling non-IFRS financial measures back to the most directly comparable IFRS financial measures. The economic substance of the exclusions described above (where applicable to the periods presented) and management's rationale for excluding them from non-IFRS financial measures is provided below: Employee SBC expense, which represents the estimated fair value of stock options, restricted share units and performance share units granted to employees, is excluded because grant activities vary significantly from quarter-to-quarter in both quantity and fair value. In addition, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude employee SBC expense in assessing operating performance, who may have different granting patterns and types of equity awards, and who may use different valuation assumptions than we do. Amortization charges (excluding computer software) consist of non-cash charges against intangible assets that are impacted by the timing and magnitude of acquired businesses. Amortization of intangible assets varies among our competitors, and we believe that excluding these charges permits a better comparison of core operating results with those of our competitors who also generally exclude amortization charges in assessing operating performance. Other Charges, net of recoveries, consist of, when applicable: Restructuring Charges, net of recoveries (defined below); Transition Costs (defined below); net Impairment charges (defined below); consulting, transaction and integration costs related to potential and completed acquisitions, and charges or releases related to the subsequent re-measurement of indemnification assets or the release of indemnification or other liabilities recorded in connection with our acquisition of Impakt Holdings, LLC (such releases were first recorded in the first quarter of 2021) (collectively, Acquisition Costs (Recoveries)); legal settlements (recoveries); credit facility-related charges; and post-employment benefit plan losses. We exclude these charges, net of recoveries, because we believe that they are not directly related to ongoing operating results and do not reflect expected future operating expenses after completion of these activities or incurrence of the relevant costs. Our competitors may record similar charges at different times, and we believe these exclusions permit a better comparison of our core operating results with those of our competitors who also generally exclude these types of charges, net of recoveries, in assessing operating performance. Restructuring Charges, net of recoveries, consist of costs relating to: employee severance, lease terminations, site closings and consolidations; write-downs of owned property and equipment which are no longer used and are available for sale; and reductions in infrastructure. Transition Costs consist of: (i) costs recorded in connection with the relocation of our Toronto manufacturing operations, and the move of our corporate headquarters into and out of a temporary location during, and upon completion, of the construction of space in a new office building at our former location (all in connection with the 2019 sale of our Toronto real property) and (ii) costs recorded in connection with the transfer of manufacturing lines from closed sites to other sites within our global network. Transition Costs consist of direct relocation and duplicate costs (such as rent expense, utility costs, depreciation charges, and personnel costs) incurred during the transition periods, as well as cease-use costs incurred in connection with idle or vacated portions of the relevant premises that we would not have incurred but for these relocations and transfers. We believe that excluding these costs permits a better comparison of our core operating results from period-to-period, as these costs will not reflect our ongoing operations once these relocations and manufacturing line transfers are complete. Impairment charges, which consist of non-cash charges against goodwill, intangible assets, property, plant and equipment, and right-of-use (ROU) assets, result primarily when the carrying value of these assets exceeds their recoverable amount. Finance Costs consist of interest expense and fees related to our credit facility (including debt issuance and related amortization costs), our interest rate swap agreements, our accounts receivable sales program and customers' supplier financing programs, and interest expense on our lease obligations, net of interest income earned. We believe that excluding these costs provides useful insight for assessing the performance of our core operations. Acquisition inventory fair value adjustments relate to the write-up of the inventory acquired in connection with our acquisitions, representing the difference between the cost and fair value of such inventory. We exclude the impact of the recognition of these adjustments, when incurred, because we believe such exclusion permits a better comparison of our core operating results from period-to-period, as their impact is not indicative of our ongoing operating performance. Non-core tax impacts are excluded, as we believe that these costs or recoveries do not reflect core operating performance and vary significantly among those of our competitors who also generally exclude these costs or recoveries in assessing operating performance. The following table sets forth, for the periods indicated, the various non-IFRS financial measures discussed above, and a reconciliation of non-IFRS financial measures to the most directly comparable IFRS financial measures (in millions, except percentages and per share amounts):   Three months ended September 30   Nine months ended September 30   2020   2021   2020   2021     % ofrevenue     % ofrevenue     % ofrevenue     % ofrevenue IFRS revenue $ 1,550.5       $ 1,467.4       $ 4,361.5       $ 4,122.6                             IFRS gross profit $ 124.2   8.0 %   $ 125.4   8.5 %   $ 323.8   7.4 %   $ 344.9   8.4 % Employee SBC expense 1.1       3.1       8.9       9.4     Non-IFRS adjusted gross profit $ 125.3   8.1 %   $ 128.5   8.8 %   $ 332.7   7.6 %   $ 354.3   8.6 %                         IFRS SG&A $ 56.9   3.7 %   $ 62.0   4.2 %   $ 171.3   3.9 %   $ 179.6   4.4 % Employee SBC expense (0.6 )     (5.5 )     (11.8 )     (14.8 )   Non-IFRS adjusted SG&A $ 56.3   3.6 %   $ 56.5   3.9 %   $ 159.5   3.7 %   $ 164.8   4.0 %                         IFRS earnings before income taxes $ 40.3   2.6 %   $ 43.9   3.0 %   $ 63.8   1.5 %   $ 94.4   2.3 % Finance Costs 8.9       7.8       28.6       23.4     Employee SBC expense 1.7       8.6       20.7       24.2     Amortization of intangible assets (excluding computer software) 5.5       4.9       16.9       14.7     Other Charges (recoveries) 3.7       (3.9 )     19.0       2.9     Non-IFRS operating earnings (adjusted EBIAT) (1) $ 60.1   3.9 %   $ 61.3   4.2 %   $ 149.0   3.4 %   $ 159.6   3.9 %                         IFRS net earnings $ 30.4   2.0 %   $ 35.2   2.4 %   $ 40.5   0.9 %   $ 72.0   1.7 % Employee SBC expense 1.7       8.6       20.7       24.2     Amortization of intangible assets (excluding computer software) 5.5       4.9       16.9       14.7     Other Charges (recoveries) 3.7       (3.9 )     19.0       2.9     Adjustments for taxes (2) (0.4 )     (1.4 )     (3.8 )     (4.7 )   Non-IFRS adjusted net earnings $ 40.9       $ 43.4       $ 93.3       $ 109.1                             Diluted EPS                       Weighted average # of shares (in millions) 129.1       125.5       129.1       127.3     IFRS earnings per share $ 0.24       $ 0.28       $ 0.31       $ 0.57     Non-IFRS adjusted earnings per share $ 0.32       $ 0.35       $ 0.72       $ 0.86     # of shares outstanding at period end (in millions) 129.1       124.7       129.1       124.7                             IFRS cash provided by operations $ 42.0       $ 55.7       $ 189.9       $ 161.0     Purchase of property, plant and equipment, net of sales proceeds (9.9 )     (13.2 )     (32.2 )     (35.3 )   Lease payments (3) (9.9 )     (10.0 )     (27.9 )     (30.0 )   Finance Costs paid (excluding debt issuance costs paid) (3) (6.4 )     (5.4 )     (22.3 )     (16.5 )   Non-IFRS free cash flow (3) $ 15.8       $ 27.1       $ 107.5       $ 79.2                             IFRS ROIC % (4) 10.2 %     10.9 %     5.3 %     7.8 %   Non-IFRS adjusted ROIC % (4) 15.2 %     15.2 %     12.5 %     13.2 %   (1)   Management uses non-IFRS operating earnings (adjusted EBIAT) as a measure to assess performance related to our core operations. Non-IFRS adjusted EBIAT is defined as earnings (loss) before income taxes, Finance Costs (defined above), employee SBC expense, amortization of intangible assets (excluding computer software), Other Charges (recoveries) (defined above), and in applicable periods, acquisition inventory fair value adjustments. See note 8 to our Q3 2021 Interim Financial Statements for separate quantification and discussion of the components of Other Charges (recoveries). (2)   The adjustments for taxes, as applicable, represent the tax effects of our non-IFRS adjustments and non-core tax impacts (see below). The following table sets forth a reconciliation of our IFRS tax expense and IFRS effective tax rate to our non-IFRS adjusted tax expense and our non-IFRS adjusted effective tax rate for the periods indicated, in each case determined by excluding the tax benefits or costs associated with the listed items (in millions, except percentages) from our IFRS tax expense for such periods:   Three months ended   Nine months ended   September 30   September 30   2020 Effectivetax rate   2021 Effectivetax rate   2020 Effectivetax rate   2021 Effectivetax rate                     IFRS tax expense and IFRS effective tax rate $ 9.9   25 %   $ 8.7   20 %   $ 23.3   37 %   $ 22.4   24 %                         Tax costs (benefits) of the following items excluded from IFRS tax expense:                       Employee SBC expense 0.2       1.4       1.2       2.9     Other Charges (recoveries) 0.2       —       2.2       0.7     Non-core tax impacts related to tax uncertainties* —       —       0.4       —     Non-core tax impact related to restructured sites** —       —       —       1.1     Non-IFRS adjusted tax expense and non-IFRS adjusted effective tax rate $ 10.3   20 %   $ 10.1   19 %   $ 27.1   23 %   $ 27.1   20 % * Consists of the reversal of certain tax uncertainties related to a prior acquisition that became statute-barred in the first quarter of 2020. ** Consists of the reversals of tax uncertainties related to one of our Asian subsidiaries that completed its liquidation and dissolution during the first quarter of 2021. (3)   Management uses non-IFRS free cash flow as a measure, in addition to IFRS cash provided by (used in) operations, to assess our operational cash flow performance. We believe non-IFRS free cash flow provides another level of transparency to our liquidity. Non-IFRS free cash flow is defined as cash provided by (used in) operations after the purchase of property, plant and equipment (net of proceeds from the sale of certain surplus equipment and property), lease payments and Finance Costs paid (excluding any debt issuance costs and when applicable, waiver fees related to our credit facility). We do not consider debt issuance costs (nil paid in Q3 2021 and YTD 2021; $0.3 million and $0.6 million paid in Q3 2020 and YTD 2020, respectively) or such waiver fees (when applicable) to be part of our ongoing financing expenses. As a result, these costs are excluded from total Finance Costs paid in our determination of non-IFRS free cash flow. Note, however, that non-IFRS free cash flow does not represent residual cash flow available to Celestica for discretionary expenditures. (4)   Management uses non-IFRS adjusted ROIC as a measure to assess the effectiveness of the invested capital we use to build products or provide services to our customers, by quantifying how well we generate earnings relative to the capital we have invested in our business. Non-IFRS adjusted ROIC is calculated by dividing non-IFRS adjusted EBIAT by average net invested capital. Net invested capital (calculated in the table below) is defined as total assets less: cash, ROU assets, accounts payable, accrued and other current liabilities, provisions, and income taxes payable. We use a two-point average to calculate average net invested capital for the quarter and a four-point average to calculate average net invested capital for the nine-month period. A comparable measure under IFRS would be determined by dividing IFRS earnings (loss) before income taxes by average net invested capital (which we have set forth in the charts above and below), however, this measure (which we have called IFRS ROIC), is not a measure defined under IFRS. The following table sets forth, for the periods indicated, our calculation of IFRS ROIC % and non-IFRS adjusted ROIC % (in millions, except IFRS ROIC % and non-IFRS adjusted ROIC %).   Three months ended   Nine months ended   September 30   September 30   2020   2021   2020   2021                 IFRS earnings before income taxes $ 40.3     $ 43.9     $ 63.8     $ 94.4   Multiplier to annualize earnings 4     4     1.333     1.333   Annualized IFRS earnings before income taxes $ 161.2     $ 175.6     $ 85.0     $ 125.8                   Average net invested capital for the period.....»»

Investors continue to be optimistic about QuidelOrtho (QDEL) owing to its strong product portfolio. QuidelOrtho Corporation QDEL is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by a solid fourth-quarter 2022 performance, along with a few regulatory clearances, is expected to contribute further. However, headwinds due to data security threats and overdependence on diagnostic tests persist.Over the past year, this Zacks Rank #3 (Hold) stock has lost 22.2% compared with a 39.7% decline of the industry and the S&P 500's 13.9% fall.The renowned rapid diagnostic testing solutions provider has a market capitalization of $5.72 billion. QuidelOrtho projects 11.4% growth for 2024 and expects to maintain its strong performance. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same in the other, the average surprise being 54.3%.Image Source: Zacks Investment ResearchLet’s delve deeper.Strong Product Portfolio: We are upbeat about QuidelOrtho’s products, which it sells directly to end users and distributors, in each case, for professional as well as individual, non-professional and over-the-counter use. Currently, QuidelOrtho’s diagnostic testing solutions include the Sofia and Sofia 2 Analyzers, QuickVue, and InflammaDry and AdenoPlus products. Some other notable products include the Solana system, and the Savanna multiplex molecular analyzer system and Savanna RVP4 assay.Regulatory Approvals: We are upbeat about a few recent regulatory clearances for QuidelOrtho’s products. This month, the company announced that it had been granted a De Novo request from the FDA, allowing the company to market its new Sofia 2 SARS Antigen+ FIA (fluorescent immunoassay).In December 2022, QuidelOrtho announced that its TriageTrue High-Sensitivity Troponin I Test on the Quidel Triage MeterPro had been approved for use in Canada by Health Canada.Strong Q4 Results: QuidelOrtho’s robust fourth-quarter 2022 results buoy optimism. The company recorded robust overall top-line performance and strong revenues in the majority of its business units at a constant exchange rate, excluding COVID-19 revenues. Excluding COVID-19 revenues, geographical results also improved in two regions. Strong Recurring revenues, which were up including and excluding COVID-19 revenues, and solid Instrument revenues were also seen. QuidelOrtho’s expanded global commercial footprint also raises optimism.DownsidesData Security Threats: QuidelOrtho utilizes complex information technology systems to transmit and store information, including proprietary information, to support its business and process. In the future, these systems may prove inadequate to its business needs and necessary upgrades may not operate as designed, resulting in high costs or disruptions in portions of the company’s business.Overdependence on Diagnostic Tests: A significant percentage of QuidelOrtho’s revenues comes from the sale of COVID-19 and influenza tests and these are expected to remain a significant portion of the company’s total revenues for at least in the near future. As a result, if sales or revenues of COVID-19 or influenza tests fall for any reason, the company’s operating results will be affected.Estimate TrendQuidelOrtho is witnessing a positive estimate revision trend for 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.9% north to $5.20.The Zacks Consensus Estimate for the company’s first-quarter 2023 revenues is pegged at $762.7 million, suggesting a 23.9% decline from the year-ago quarter’s reported number.Key PicksSome better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Henry Schein, Inc. HSIC and Avanos Medical, Inc. AVNS.Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Hologic has gained 4.6% against the industry’s 15.6% decline in the past year.Henry Schein, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.Henry Schein has lost 10.7% compared with the industry’s 9.8% decline over the past year.Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.Avanos has lost 12.8% compared with the industry’s 15.6% decline over the past year. Is THIS the Ultimate New Clean Energy Source? (4 Ways to Profit) The world is increasingly focused on eliminating fossil fuels and ramping up use of renewable, clean energy sources. Hydrogen fuel cells, powered by the most abundant substance in the universe, could provide an unlimited amount of ultra-clean energy for multiple industries.  Our urgent special report reveals 4 hydrogen stocks primed for big gains - plus our other top clean energy stocks.  See Stocks NowWant 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 Hologic, Inc. (HOLX): Free Stock Analysis Report Henry Schein, Inc. (HSIC): Free Stock Analysis Report QuidelOrtho Corporation (QDEL): Free Stock Analysis Report AVANOS MEDICAL, INC. (AVNS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Acquired exclusive license for oral, brain-penetrant, dual TYK2/JAK1 inhibitor for immune-mediated brain disorders in March 2023 covering global (ex-China) rights; Phase 1 clinical trial initiation anticipated in 2023 Completed Phase 1 SAD/MAD study with BHV-7000 from our Kv7 ion channel activator platform and reported preliminary safety and tolerability data Commenced enrollment in pivotal Phase 3 study with our myostatin targeting agent, adnectin taldefgrobep alfa, for spinal muscular atrophy Presented preclinical data from our IgG degrader, BHV-1300, showing robust reduction of IgG levels; observed depletion of IgG beginning within hours of dosing and reached 75% depletion of IgG from baseline within three days after a single dose As previously reported, Biohaven Ltd. launched post-closing of the Biohaven Pharmaceutical Holding Company Ltd. sale to Pfizer on October 4, 2022, completed a public offering of 28,750,000 Biohaven Ltd. common shares at a price of $10.50 per share on October 25, 2022, and as of December 31, 2022, had cash and equivalents of $465 million, and no debt Key industry executives added or promoted to management team, including: Bruce Car, Ph.D. as Chief Scientific Officer; Irfan Qureshi, M.D. as Chief Medical Officer, and Tanya Fischer, M.D., Ph.D. as Chief Development Officer and Head of Translational Medicine NEW HAVEN, Conn., March 23, 2023 /PRNewswire/ -- Biohaven Ltd. (NYSE:BHVN) ("Biohaven" or the "Company"), a global clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of life-changing therapies for people with debilitating neurological and neuropsychiatric diseases, including ultra-rare disorders, today reported financial results for the fourth quarter ended December 31, 2022, and provided a review of recent accomplishments and anticipated upcoming milestones. For periods prior to the October 3, 2022 spin-off, the reported financial results present, on a historical basis, the combined assets, liabilities, expenses and cash flows directly attributable to the Company, which have been prepared from Biohaven Pharmaceutical Holding Company Ltd., the former parent, consolidated financial statements and accounting records, and are presented on a stand-alone basis as if the operations had been conducted independently from the former parent. The financial statements for all periods presented, including the historical results of the Company prior to October 3, 2022, are now referred to as "Consolidated Financial Statements." Vlad Coric, M.D., Chairman and Chief Executive Officer of Biohaven, commented, "2022 was unequivocally the most defining year since our Company's formation; with the acquisition by Pfizer for a total consideration of approximately $13 billion including retirement of existing debt, Biohaven is well-capitalized to accelerate development across an extraordinary portfolio spanning mid-to-late-stage and promising discovery assets. The acquisition by Pfizer of Biohaven Pharmaceutical Holding Company Ltd. and the CGRP franchise was a testament to our incredible track record of innovating, developing, commercializing and delivering therapeutic breakthrough medicines, propelled by our unwavering patient focus and data-driven methodical approach. We ultimately delivered multiple first cycle FDA approvals of Nurtec ODT and Vydura ODT in both the acute and prevention of migraine as well as the first intranasal CGRP antagonist, Zavzpret—it's exciting to see Pfizer take the CGRP franchise global and the benefit that this will have for migraine patients around the world." Dr. Coric continued, "Today, Biohaven is well-capitalized to accelerate development across an extraordinary portfolio spanning mid-to-late-stage and promising discovery assets. Since the launch of our new company in October, we have already made substantial progress in advancing one of the most innovative and exciting neuroscience portfolios. Our Kv7 ion channel platform has the potential to change the treatment paradigm in the management of epilepsy and mood disorders. The first assets from Biohaven's Kv7 ion channel platform, BHV-7000 and BHV-7010, are selective Kv7.2 and Kv7.3 activators that lack off-target burdensome side effects. We were pleased to complete our SAD/MAD Phase 1 study of BHV-7000 and report preliminary safety, tolerability and pharmacokinetic data last month; in the study, single doses of up to 100 mg and multiple doses of up to 40 mg daily for 15 days were generally well-tolerated. Importantly, we were encouraged by the lack of sedation, dizziness, fatigue, and ataxia observed in this study – side effects that have historically plagued patients taking available anti-seizure medications. With these results, we plan to initiate an EEG study in the first half of 2023 and Phase 2/3 studies in focal epilepsy and bipolar disorder in the second half of 2023. We are also planning an IND submission for BHV-7010, in epilepsy and mood disorders, and an IND submission for our TRPM3 ion channel antagonist, BHV-2100, in chronic pain; both IND submissions are expected in the second half of 2023." "Beyond our ion channel platform, our team is advancing novel immune-targeting agents to target neuroinflammation with our degrader platform and recent acquisition of the TYK2/JAK1 asset we added to our pipeline only yesterday. We acquired an exclusive license for BHV-8000, an oral, brain-penetrant, dual TYK2/JAK1 inhibitor offering a unique and exquisite therapeutic approach to addressing brain disorders. There are currently no brain-penetrant, selective, dual TYK2/JAK1 inhibitors approved for brain disorders and we look forward to exploring the vast potential afforded by this compound's unique therapeutic profile. TYK2/JAK inhibition is a validated mechanism that has led to the approval of peripheral acting agents and our dual TYK2/JAK1 asset will bring one of the most exciting immunoscience targets to the potential treatment of brain disorders. In other pipeline developments, we continue to advance our Phase 3 study evaluating taldefgrobep alfa in patients with spinal muscular atrophy, with 22 sites now activated and enrollment ongoing in the US and EU, and remain on track to complete enrollment in our pivotal Phase 3 study evaluating troriluzole in patients with OCD by year-end 2023. In discovery efforts, we have taken encouraging strides with our burgeoning bispecific platform and were thrilled to share exciting non-human primate data with our IgG degrader, BHV-1300; we expect to submit an IND for BHV-1300 in the second half of 2023. I could not be more enthusiastic about the opportunities ahead for Biohaven – with a world-class, diverse portfolio of assets addressing some of the most critical life-threatening illnesses impacting patients, a plethora of upcoming milestones and multiple INDs supporting continued pipeline development, our highly experienced drug development team, and strengthened capital position – we are well positioned to continue delivering the same impressive results that patients, shareholders, and other key stakeholders have come to expect from our team," Dr. Coric concluded. Bruce Car, PhD, Chief Scientific Officer of Biohaven added, "We are excited about the promise of our bispecific platform which is advancing multiple compounds including degraders for IgG and IgA, our CD38 targeting therapy for multiple myeloma, and a next generation ADC technology. First, we were thrilled to report data with our first 'MoDE,' or molecular degrader of extracellular proteins, where we demonstrated in cynomolgus monkeys that a single dose of our IgG degrader, BHV-1300, reduced IgG levels by 75% from baseline in three days, in comparison to efgartigimod which took 5 to 7 days to achieve a 50% reduction. We separately reported preclinical data from our second MoDE designed to target galactose deficient IgA (Gd-IgA), which is thought to play a pathogenic role in IgA Nephropathy. These early preclinical studies showed the chimeric antibody-ASGPR ligand conjugate specifically mediated endocytosis of Gd-IgA, as opposed to normal IgA. Our team is also advancing next-generation antigen specific degraders that will allow for even more targeted approaches to treat disorders of extracellular proteins. With our antibody recruiting molecule program (ARM), a CD38 targeted cell therapy for multiple myeloma, we have now treated three patients in a Phase 1 trial at Dana-Farber Cancer Institute. The first patient treated has survived to one year, which is encouraging given historic survival rates in this aggressive disease. Taken together, these datasets provide early validation for the power of our bispecific platform and broader discovery efforts." Full Year and Recent Business Highlights Ion Channel Platforms - Milestones and Next Steps Acquired Kv7 channel platform for treatment of epilepsy and other neurologic disorders - In April 2022, the Company closed its acquisition of Channel Biosciences, LLC to acquire a Kv7 channel targeting platform, adding the latest advances in ion-channel modulation to Biohaven's growing neuroscience portfolio. BHV-7000 (formerly known as KB-3061) is the lead asset from the Kv7 platform and is a potassium channel activator with a profile suggestive of a wide therapeutic index, high selectivity, and significantly reduced GABA-ergic activity. As reported in the second quarter of 2022, the Clinical Trial Application for BHV-7000 was approved by Health Canada and Biohaven subsequently began clinical development. Reported preliminary Phase 1 results with BHV-7000 - In January 2023, the Company reported preliminary safety, tolerability and pharmacokinetic (PK) data from the Phase 1 SAD/MAD study with BHV-7000. In the study, single doses up to 100 mg and multiple doses up to 40 mg daily for 15 days were safe and well-tolerated, with low rates of adverse events. Most adverse events were mild and resolved spontaneously. No serious or severe adverse events and/or dose limiting toxicities were reported. Importantly, CNS adverse events typically associated with other anti-seizure medications were not reported with BHV-7000; in unblinded data from the MAD cohorts, mild headache was the most common adverse event reported across all dose groups. Drug-related signal for AEs of somnolence, dizziness, fatigue, and ataxia were not observed. With respect to preliminary PK results, the Company exceeded target concentrations for efficacy based on the preclinical maximal electroshock (MES) model, which is clinically validated and predictive of target concentration ranges in humans. Upcoming studies with BHV-7000 - The Company expects to initiate an EEG study in the first half of 2023 and expects to initiate Phase 2/3 studies in focal epilepsy patients and bipolar disorder patients in the second half of 2023. Upcoming studies with BHV-7010 - The Company expects to submit an IND with BHV-7010, a next generation Kv7 ion channel activator, in the second half of 2023; the Company intends to investigate its potential in epilepsy and mood disorders. Additional ion channel development expectations - The Company also intends to submit an IND in the second half of 2023 for BHV-2100, a TRPM3 ion channel antagonist targeting chronic pain. TYK2/JAK1 Inhibition Platform - Milestones and Next Steps Acquired BHV-8000, a brain-penetrant inhibitor of TYK2/JAK1, from Highlightll - In March 2023, the Company acquired exclusive rights (ex-China) to a novel, oral, first-in-class, brain-penetrant, dual inhibitor of TYK2/JAK1 offering wide therapeutic index with TYK2 inhibition and high selectivity for JAK1 inhibition without the severely limiting adverse class effects of JAK2/JAK3 inhibitors. Upcoming studies with BHV-8000 - The Company expects to commence Phase 1 development in 2023. Myostatin Targeting Taldefgrobep Alfa License - Milestones and Next Steps Fast Track Designation and Orphan Drug Designation Granted - In February 2023, Taldefgrobep alfa was granted Fast Track designation by the U.S. Food and Drug Administration (FDA). The Company had previously received Orphan Drug Designation in December 2022. Commenced enrollment in a Phase 3 study with taldefgrobep alfa, an anti-myostatin adnectin for SMA - In July 2022, the Company commenced enrollment in a Phase 3 clinical trial assessing the efficacy and safety of taldefgrobep in SMA. Taldefgrobep targets myostatin, a natural protein that limits skeletal muscle growth, through two mechanisms: lowering myostatin directly and blocking key downstream signaling mechanisms. The Company expects to enroll approximately 180 patients in this randomized, double-blind, placebo-controlled global trial. Glutamate Modulation Platform - Milestones and Next Steps: Pivotal Phase 3 trial ongoing with troriluzole in OCD - The Company continues accelerating Phase 3 clinical studies assessing the efficacy and safety of troriluzole in patients with Obsessive Compulsive Disorder (OCD). Biohaven is advancing a 280 mg once daily dose of troriluzole into two double-blind, placebo-controlled Phase 3 clinical trials with identical study designs and plans to enroll up to 700 patients in each of these adjunctive treatment trials across study sites in the United States, Canada and Europe. The Company made several enhancements to the trial to adequately power for previously observed treatment effect, including increasing the sample size in the trial, including a higher dose, and optimizing clinical trial design to minimize placebo effect. The Company expects to complete enrollment by the end of 2023. Regulatory engagement planned for first half of 2023 in SCA - In May 2022, the Company reported top-line results from a Phase 3 clinical trial evaluating the efficacy and safety of its investigational therapy, troriluzole, in patients with spinocerebellar ataxia (SCA). While the primary endpoint, did not reach statistical significance in the overall SCA population as there was less than expected disease progression over the course of the study, post hoc analysis of efficacy measures by genotype suggested a treatment effect in patients with the SCA Type 3 (SCA3) genotype. SCA3 represents the most common form of SCA and accounted for 41 percent of the study population. The Company intends to interact with the FDA and/or EMA in the first half of 2023. We could seek advice through various formal or informal interactions with regulatory agencies or we could choose to submit a New Drug Application (NDA) if we believe that is warranted from the results of our ongoing post-hoc analyses. Global Coalition for Adaptive Research (GCAR) commenced enrollment in Glioblastoma Adaptive Global Innovative Learning Environment (GBM Agile) Phase 2-3 adaptive platform trial for patients with glioblastoma - In July 2022, GCAR announced the activation of Biohaven's troriluzole in GBM AGILE, a patient-centered, adaptive platform trial for registration that tests multiple therapies for patients with newly-diagnosed and recurrent glioblastoma (GBM). GBM AGILE is an international, innovative platform trial designed to more rapidly identify and confirm effective therapies for patients with glioblastoma through response adaptive randomization. Bispecific Molecule Platform - Milestones and Next Steps: Reported preclinical data with extracellular target degrader platform technology (MoDE™), a pan-IgG degrader - In January 2023, the Company evaluated the effect of a single dose of immunoglobulin gamma (IgG) degrader, BHV-1300, in cynomolgus monkeys. The Company reported 75% reduction of IgG levels from baseline and noted the observation occurred in three days; the data in this pre-clinical study compares favorably to standard of care therapy efgartigimod, where reduction of IgG levels with efgartigimod was observed to be 50% and had taken 5-7 days. The Company expects BHV-1300 will be ready for IND submission in the second half of 2023. In October 2022, the Company had announced advancements in the development of its MoDE extracellular target degrader platform technology licensed from Yale University for various disease indications, including, but not limited to, neurological disorders, cancer, infectious and autoimmune diseases. Biohaven made further innovations in this ground-breaking technology with new patent applications covering additional targets and functionality. Reported preclinical data with second MoDE in bispecific platform targeting IgA Nephropathy - In January 2023, the Company reported preclinical data with a second MoDE targeting galactose deficient IgA (Gd-IgA), which is believed to play a pathogenic role in IgA Nephropathy. Specific removal of pathogenic Gd-IgA with preservation of normal IgA potentially permits disease remission without incurring an infection risk. The Company shared preliminary data demonstrating the chimeric antibody-ASGPR ligand conjugate specifically mediated endocytosis of Gd-IgA, as opposed to normal IgA, in an endocytosis assay with HepG2 cells. Provided update on ongoing Phase 1 trial with BHV-1100 in MRD + post-transplant multiple myeloma patients - In an ongoing Phase 1 study at Dana-Farber Cancer Institute, the first patient treated has survived to one year. Additional patients have been enrolled and recruitment for the study is ongoing. Corporate Updates: Company launch - On October 3, 2022, Biohaven Ltd. began operating as a separate independent entity in connection with the merger agreement entered into with Pfizer Inc. in May 2022. As of October 4, 2022, Biohaven Ltd. commenced regular way trading under the symbol "BHVN" on the New York Stock Exchange as an independent, publicly traded company focused on delivering innovative life-changing treatments for neurological and neuropsychiatric diseases, including rare disorders, and leveraging its proven drug development capabilities and proprietary technology platforms to advance a pipeline of therapies. The Company, led by Vlad Coric, M.D. as Chairman and Chief Executive ...Full story available on Benzinga.com.....»»

The "Airbnbust" proves the Wild West days of short-term online rentals are over. That's great news for your next vacation. Short-term rentals like those listed on Airbnb and Vrbo have never been in higher demand — or in greater supply. As the industry grows up, cities can no longer afford to take a hands-off approach.Arif Qazi / InsiderNick Sullivan was facing a sudden squeeze. For the past few years, his two Airbnb properties around Charlotte, North Carolina, had generated as much as $7,000 a month in revenue, which he and his wife stashed away for retirement. But this past fall, that income was slashed in half: Bookings dropped, his homes were empty more often than not, and his monthly revenue sank to $3,000.His cleaner was actually the first to point out the slowdown in bookings — she told Sullivan the same thing was happening with various rentals all over town. "We started panicking and started connecting with other folks who we know have short-term rentals," Sullivan told Insider. "We don't know what's going on." Sullivan is not alone. Whispers of an apocalyptic "Airbnbust" have spread online among short-term-rental hosts facing empty booking calendars, stiff competition for guests, and tumbling earnings. The shift has sparked fears of an irreversible slide in the business and a broader economic slowdown. But the hand-wringing over the idea of a downturn ignores a conflicting, but undeniable, reality: The short-term-rental business is bigger than ever, and some operators are thriving like never before. The number of nights booked at US short-term rentals reached a record high in 2022, as did total revenue, according to AirDNA, which tracks properties listed on the vacation-rental sites Airbnb and Vrbo. Rather than a collapse of the industry, the increasingly bifurcated state of the market — a bust for some, a boom for others — is a clear sign that we have hit a turning point in the long-running battle over short-term rentals. Some cities have allowed vacation-rental listings to multiply virtually unchecked, setting the stage for an oversupply that has come back to bite investors. Other places have cracked down and capped the number of permits, pacifying concerned citizens and preserving the profits of existing Airbnb owners. Regardless of their approach, most cities can't afford to lose the tourism dollars that flow from short-term rentals. That leaves local governments with a decision to make: Accept the boom-and-bust cycle that can come as a result of letting short-term rentals run wild, or craft rules to keep hosts happy and bring peace of mind to residents who fear their neighborhoods could one day be overrun by mini-hotels. Whichever way cities go, it's clear that the Wild West days of Airbnbs are swiftly drawing to a close. The industry is growing up — and that's good news for everyone involved. The makings of an AirbnbustEarly in the pandemic, the future of Airbnb looked grim. Bookings collapsed by more than 50% in New York, Seattle, and San Francisco, and the company's valuation plunged by $5 billion, or nearly 16%, as it prepared to go public. Some wondered aloud if home-sharing would even exist when the world emerged from lockdowns.But not only did Airbnb and competitors like Vrbo survive — they flourished. AirDNA estimated that bookings increased year over year by about 21% in 2021 and by another 21% in 2022. Encouraged by the soaring demand and record-low mortgage rates, investors jumped into the market, buying up homes in attractive locations and marketing them to the rising wave of vacationers and remote workers. The average number of short-term rentals on the market reached nearly 1.3 million in 2022, up by roughly 19% from the previous year and by about 7% from 2019, according to AirDNA. The sudden popularity was a boon for rental platforms — Airbnb recently reported that 2022 was its first profitable year ever. But the deluge of new listings foreshadowed an inevitable correction. As inflation ticked up and the pandemic travel frenzy died down, an oversupply of vacation rentals left hosts fighting over visitors. Jamie Lane, the vice president of research for AirDNA, said the supply shocks during the pandemic were unlike anything he'd seen in more than a decade of covering the lodging industry. Supply and demand were thrown "totally out of whack," Lane told Insider. In February, occupancy rates remained "well above pre-pandemic figures," according to AirDNA, but supply growth continued to outpace demand. As the market normalizes, some short-term-rental hosts are coming to grips with the fact that the banner days of 2021 are long gone. During a high-profile event like the Super Bowl, which draws hundreds of thousands of visitors for a weekend, hosts expect to be booked up. In past years, about 80% of available rooms in host cities like Miami and Los Angeles were taken during Super Bowl weekend. This year, however, some owners in Phoenix came up well short: As of the Thursday before the game, only 52% of rooms in Phoenix were claimed for that weekend, according to AirDNA. While occupancy creeped upwards the day before the game, some hosts had to lower prices to get rooms filled. Ric Kenworthy, who manages close to 100 properties for owners in and around the city, told Insider that in the run up to the game only half of the homes he looks after were rented out. As a result, he reduced the minimum number of nights he required for bookings and charged on average about 40% less than he'd expected. "Everyone's crying the blues right now," he said. Phoenix's problems are part of a larger trend: In the third quarter of 2022, the occupancy rate for short-term rentals fell year over year in 31 of the 50 largest US markets, according to AirDNA. The second-largest drop was in the Phoenix-Scottsdale metropolitan area, where occupancy dipped by more than 10 percentage points. This year, the story remains the same: In February, the month of the Super Bowl, occupancy in the Phoenix-Scottsdale metro was down 13.6% year over year, despite a 60% increase in demand. The number of listings, it turned out, was up 85%. Rather than some catastrophic collapse in demand, all signs point to massive oversupply as the culprit for the "Airbnbust" fears that have gripped many STR owners over the past year.Airbnb owners in cities that host the Super Bowl typically expect to be booked up — but occupancy ahead of this year's game in Phoenix was sorely lacking.Getty ImagesArizona's state government has encouraged the growth of short-term rentals, enacting a law in 2016 that prohibited cities and towns from placing caps on the number of vacation-rental properties. This paved the way for a surge in rentals across the state, particularly in the Phoenix metro area, where the number of listings on Airbnb alone surpassed 20,000 at the start of 2023, a whopping 68% year-over-year increase. Given the sharp rise of short-term rentals there, some local lawmakers have recently called for amending the law. One proponent of lacing new rules around Airbnbs is Solange Whitehead, a city councilwoman in Scottsdale. Whitehead said Scottsdale's local government is not interested in banning Airbnbs but hopes to exert more control over the number of rentals in the town and to weed out bad operators."There is a place for it," Whitehead said. "We just need regulations that protect everybody."A tale of 2 citiesRental hosts who've managed to avoid the bust may have their city government to thank, Nick Del Pego, the CEO of Deckard Technologies, told Insider. Del Pego, whose firm works with local governments around the country to keep tabs on short-term rentals, suggested that hosts in cities that have limited the number of rental properties have seen less of a drop-off in revenue in recent months."In some places, it's still the Wild West," Del Pego said. "In other places, they've put limitations, restrictions, and that in turn means that the legitimate operators tend to have a little less competition. It's certainly a mixed bag, and I've got clients on both ends of the spectrum."Cities must perform a delicate dance when it comes to short-term rentals like Airbnbs. On the one hand, they want to prevent neighborhoods from turning into blocks of hotels masquerading as single-family homes. But short-term rentals are often essential to a healthy tourism economy, particularly in vacation destinations. This push and pull has led towns — even some just a few miles apart — to take very different approaches.The local government in La Quinta, a resort city near Palm Springs in Southern California, stopped issuing new permits for short-term rentals in all but a few designated areas of the city in August 2020. And new rules that took effect in 2021 mandated that when a short-term-rental home trades hands, its permit expires. The total number of STR permits in the city has fallen by about 13% since January 2021, but the tax revenue collected from short-term rentals has steadily increased each year since 2019. In the first half of 2022, the city collected 30% more tax revenue from STRs than it did in the same period in the prior year, suggesting that rental operators there are prospering.Cities must perform a delicate dance when it comes to short-term rentals like AirbnbsAdi Gross, whose company, PD Vacation Rentals, manages 10 short-term rentals in La Quinta, said 2023 is shaping up to be her best year in more than a decade of operations. "We've already booked out our high-season calendar for 2024 and started to book out for 2025 with a waiting list," Gross said.The rules in La Quinta have kept existing rental owners mostly happy. They notched another victory this fall when residents narrowly voted down a ballot measure that would have dramatically reduced the number of short-term-rentals. Big Bear Lake, another popular vacation spot in Southern California, represents the flip side of La Quinta. The city has a permitting process for STRs but doesn't limit the number of rentals allowed to operate there. From 2020 to 2021, the number of nights available at short-term rentals there increased by 17.3%, but demand grew by only 7.2%. "While demand is up relative to any point in their time period before or after COVID, the supply of available short-term rentals is up, and so that's causing the daily rates to go down," Del Pego, whose firm works with the city of Big Bear Lake, told Insider. Evan Engle, the president and general manager of Destination Big Bear, which manages more than 400 rentals on behalf of homeowners in the area, has watched this play out firsthand. Engle said demand for rentals in Big Bear Lake increased sharply when COVID-19 hit, since the city offered a convenient escape for residents of Los Angeles, San Diego, and Las Vegas. Investors jumped in to capitalize on the boom, and the market soon became saturated with short-term rentals. Then the world began opening up, and Big Bear Lake fell down the list of options for travelers. In 2022, Big Bear Lake had the second-lowest occupancy rate of all US cities, at 43%, according to AirDNA. After posting record revenue numbers in 2020 and 2021, Engle's business has returned to its pre-pandemic pace, he said. But the outlook might not be so sunny for an investor who bought a home there when prices were at record highs."People who purchased homes within the last two years paid 30% or 40% more than the previous owner, expecting to have 30% or 40% more revenue, and that's just not happening," Engle said.Engle said that despite the wild fluctuations of the past few years, he's skeptical of the idea that more regulation, like a cap on the number of rentals, would help owners in the long term. Instead, he's betting the market will "self-correct." If an investor isn't making the money they'd hoped for, they may just end up selling or renting out the home to a long-term tenant, Engle said.The short-term-rental business grows upThe rise of short-term rentals during the pandemic, and the struggles of hosts confronting an oversupply, are evidence that local governments can no longer afford to ignore the impact of Airbnbs. They can take a hands-off approach or find a path for growth that ensures both residents and rental hosts end up on stable footing."What I think you're going to see is more caps, or at least more caps in certain neighborhoods," Del Pego said. "In a lot of places, I'm certainly seeing the idea of figuring out the right number for a community becoming more and more prevalent."Lane of AirDNA argued that some level of regulation, like requiring hosts to obtain a permit, is necessary to help bring the industry out of the shadows and reduce risk for investors."If you're investing into a market and there's no regulation, you just don't know the rules of the road," Lane said. "You don't know when regulations are going to be put in place and what those regulations are going to be." But Lane, like Engle, was averse to the idea of cities capping the number of short-term-rentals, saying it creates an "almost unfair advantage" for incumbent hosts and curbs competition.A decrease in the number of short-term rentals would probably mean higher nightly rates in the future as supply falls back in line with demand — AirDNA projects the average rate will rise to $278.19 a night this year, a roughly 2% increase. But the result of more regulation may be a better and more consistent experience for guests and their neighbors. In response to increasing concerns from residents during the pandemic, some cities have more strictly enforced rules meant to minimize noise complaints and other disruptions from short-term rentals and cracked down on hosts who don't have a license. Del Pego suggested that for guests, a more professionalized industry would also mean fewer hassles like exorbitant security deposits, hidden charges, or dirty rentals.  "I think the day has come that short-term rentals are now thought of like a lot of the other businesses: something that needs to be managed and controlled from a planning perspective so that the balance for a city or a county is healthy," Del Pego said. "A lot of cities and counties are leaning in, and I think when Airbnbs were new they were just standing back."Reaching that balance won't be easy. But when short-term rental owners do well — without disrupting neighborhoods — cities get more tax revenue and a thriving tourism economy.There's one thing pretty much everyone can agree on: Short-term rentals are here to stay. AirDNA has forecast that even with a drop in occupancy, the number of available listings is likely to increase to more than 1.4 million this year, which would be a 9% jump from 2022. A business the size of Airbnb "isn't going anywhere," Del Pego said. "The business is just maturing."James Rodriguez is a senior reporter for Insider.Dan Latu is a real estate reporter for Insider.Read the original article on Business Insider.....»»

The "Airbnbust" proves the Wild West days of short-term online rentals are over. That's great news for your next vacation. Short-term rentals like those listed on Airbnb and Vrbo have never been in higher demand — or in greater supply. As the industry grows up, cities can no longer afford to take a hands-off approach.Arif Qazi / InsiderNick Sullivan was facing a sudden squeeze. For the past few years, his two Airbnb properties around Charlotte, North Carolina, had generated as much as $7,000 a month in revenue, which he and his wife stashed away for retirement. But this past fall, that income was slashed in half: Bookings dropped, his homes were empty more often than not, and his monthly revenue sank to $3,000.His cleaner was actually the first to point out the slowdown in bookings — she told Sullivan the same thing was happening with various rentals all over town. "We started panicking and started connecting with other folks who we know have short-term rentals," Sullivan told Insider. "We don't know what's going on." Sullivan is not alone. Whispers of an apocalyptic "Airbnbust" have spread online among short-term-rental hosts facing empty booking calendars, stiff competition for guests, and tumbling earnings. The shift has sparked fears of an irreversible slide in the business and a broader economic slowdown. But the hand-wringing over the idea of a downturn ignores a conflicting, but undeniable, reality: The short-term-rental business is bigger than ever, and some operators are thriving like never before. The number of nights booked at US short-term rentals reached a record high in 2022, as did total revenue, according to AirDNA, which tracks properties listed on the vacation-rental sites Airbnb and Vrbo. Rather than a collapse of the industry, the increasingly bifurcated state of the market — a bust for some, a boom for others — is a clear sign that we have hit a turning point in the long-running battle over short-term rentals. Some cities have allowed vacation-rental listings to multiply virtually unchecked, setting the stage for an oversupply that has come back to bite investors. Other places have cracked down and capped the number of permits, pacifying concerned citizens and preserving the profits of existing Airbnb owners. Regardless of their approach, most cities can't afford to lose the tourism dollars that flow from short-term rentals. That leaves local governments with a decision to make: Accept the boom-and-bust cycle that can come as a result of letting short-term rentals run wild, or craft rules to keep hosts happy and bring peace of mind to residents who fear their neighborhoods could one day be overrun by mini-hotels. Whichever way cities go, it's clear that the Wild West days of Airbnbs are swiftly drawing to a close. The industry is growing up — and that's good news for everyone involved. The makings of an AirbnbustEarly in the pandemic, the future of Airbnb looked grim. Bookings collapsed by more than 50% in New York, Seattle, and San Francisco, and the company's valuation plunged by $5 billion, or nearly 16%, as it prepared to go public. Some wondered aloud if home-sharing would even exist when the world emerged from lockdowns.But not only did Airbnb and competitors like Vrbo survive — they flourished. AirDNA estimated that bookings increased year over year by about 21% in 2021 and by another 21% in 2022. Encouraged by the soaring demand and record-low mortgage rates, investors jumped into the market, buying up homes in attractive locations and marketing them to the rising wave of vacationers and remote workers. The average number of short-term rentals on the market reached nearly 1.3 million in 2022, up by roughly 19% from the previous year and by about 7% from 2019, according to AirDNA. The sudden popularity was a boon for rental platforms — Airbnb recently reported that 2022 was its first profitable year ever. But the deluge of new listings foreshadowed an inevitable correction. As inflation ticked up and the pandemic travel frenzy died down, an oversupply of vacation rentals left hosts fighting over visitors. Jamie Lane, the vice president of research for AirDNA, said the supply shocks during the pandemic were unlike anything he'd seen in more than a decade of covering the lodging industry. Supply and demand were thrown "totally out of whack," Lane told Insider. In February, occupancy rates remained "well above pre-pandemic figures," according to AirDNA, but supply growth continued to outpace demand. As the market normalizes, some short-term-rental hosts are coming to grips with the fact that the banner days of 2021 are long gone. During a high-profile event like the Super Bowl, which draws hundreds of thousands of visitors for a weekend, hosts expect to be booked up. In past years, about 80% of available rooms in host cities like Miami and Los Angeles were taken during Super Bowl weekend. This year, however, some owners in Phoenix came up well short: As of the Thursday before the game, only 52% of rooms in Phoenix were claimed for that weekend, according to AirDNA. While occupancy creeped upwards the day before the game, some hosts had to lower prices to get rooms filled. Ric Kenworthy, who manages close to 100 properties for owners in and around the city, told Insider that in the run up to the game only half of the homes he looks after were rented out. As a result, he reduced the minimum number of nights he required for bookings and charged on average about 40% less than he'd expected. "Everyone's crying the blues right now," he said. Phoenix's problems are part of a larger trend: In the third quarter of 2022, the occupancy rate for short-term rentals fell year over year in 31 of the 50 largest US markets, according to AirDNA. The second-largest drop was in the Phoenix-Scottsdale metropolitan area, where occupancy dipped by more than 10 percentage points. This year, the story remains the same: In February, the month of the Super Bowl, occupancy in the Phoenix-Scottsdale metro was down 13.6% year over year, despite a 60% increase in demand. The number of listings, it turned out, was up 85%. Rather than some catastrophic collapse in demand, all signs point to massive oversupply as the culprit for the "Airbnbust" fears that have gripped many STR owners over the past year.Airbnb owners in cities that host the Super Bowl typically expect to be booked up — but occupancy ahead of this year's game in Phoenix was sorely lacking.Getty ImagesArizona's state government has encouraged the growth of short-term rentals, enacting a law in 2016 that prohibited cities and towns from placing caps on the number of vacation-rental properties. This paved the way for a surge in rentals across the state, particularly in the Phoenix metro area, where the number of listings on Airbnb alone surpassed 20,000 at the start of 2023, a whopping 68% year-over-year increase. Given the sharp rise of short-term rentals there, some local lawmakers have recently called for amending the law. One proponent of lacing new rules around Airbnbs is Solange Whitehead, a city councilwoman in Scottsdale. Whitehead said Scottsdale's local government is not interested in banning Airbnbs but hopes to exert more control over the number of rentals in the town and to weed out bad operators."There is a place for it," Whitehead said. "We just need regulations that protect everybody."A tale of 2 citiesRental hosts who've managed to avoid the bust may have their city government to thank, Nick Del Pego, the CEO of Deckard Technologies, told Insider. Del Pego, whose firm works with local governments around the country to keep tabs on short-term rentals, suggested that hosts in cities that have limited the number of rental properties have seen less of a drop-off in revenue in recent months."In some places, it's still the Wild West," Del Pego said. "In other places, they've put limitations, restrictions, and that in turn means that the legitimate operators tend to have a little less competition. It's certainly a mixed bag, and I've got clients on both ends of the spectrum."Cities must perform a delicate dance when it comes to short-term rentals like Airbnbs. On the one hand, they want to prevent neighborhoods from turning into blocks of hotels masquerading as single-family homes. But short-term rentals are often essential to a healthy tourism economy, particularly in vacation destinations. This push and pull has led towns — even some just a few miles apart — to take very different approaches.The local government in La Quinta, a resort city near Palm Springs in Southern California, stopped issuing new permits for short-term rentals in all but a few designated areas of the city in August 2020. And new rules that took effect in 2021 mandated that when a short-term-rental home trades hands, its permit expires. The total number of STR permits in the city has fallen by about 13% since January 2021, but the tax revenue collected from short-term rentals has steadily increased each year since 2019. In the first half of 2022, the city collected 30% more tax revenue from STRs than it did in the same period in the prior year, suggesting that rental operators there are prospering.Cities must perform a delicate dance when it comes to short-term rentals like AirbnbsAdi Gross, whose company, PD Vacation Rentals, manages 10 short-term rentals in La Quinta, said 2023 is shaping up to be her best year in more than a decade of operations. "We've already booked out our high-season calendar for 2024 and started to book out for 2025 with a waiting list," Gross said.The rules in La Quinta have kept existing rental owners mostly happy. They notched another victory this fall when residents narrowly voted down a ballot measure that would have dramatically reduced the number of short-term-rentals. Big Bear Lake, another popular vacation spot in Southern California, represents the flip side of La Quinta. The city has a permitting process for STRs but doesn't limit the number of rentals allowed to operate there. From 2020 to 2021, the number of nights available at short-term rentals there increased by 17.3%, but demand grew by only 7.2%. "While demand is up relative to any point in their time period before or after COVID, the supply of available short-term rentals is up, and so that's causing the daily rates to go down," Del Pego, whose firm works with the city of Big Bear Lake, told Insider. Evan Engle, the president and general manager of Destination Big Bear, which manages more than 400 rentals on behalf of homeowners in the area, has watched this play out firsthand. Engle said demand for rentals in Big Bear Lake increased sharply when COVID-19 hit, since the city offered a convenient escape for residents of Los Angeles, San Diego, and Las Vegas. Investors jumped in to capitalize on the boom, and the market soon became saturated with short-term rentals. Then the world began opening up, and Big Bear Lake fell down the list of options for travelers. In 2022, Big Bear Lake had the second-lowest occupancy rate of all US cities, at 43%, according to AirDNA. After posting record revenue numbers in 2020 and 2021, Engle's business has returned to its pre-pandemic pace, he said. But the outlook might not be so sunny for an investor who bought a home there when prices were at record highs."People who purchased homes within the last two years paid 30% or 40% more than the previous owner, expecting to have 30% or 40% more revenue, and that's just not happening," Engle said.Engle said that despite the wild fluctuations of the past few years, he's skeptical of the idea that more regulation, like a cap on the number of rentals, would help owners in the long term. Instead, he's betting the market will "self-correct." If an investor isn't making the money they'd hoped for, they may just end up selling or renting out the home to a long-term tenant, Engle said.The short-term-rental business grows upThe rise of short-term rentals during the pandemic, and the struggles of hosts confronting an oversupply, are evidence that local governments can no longer afford to ignore the impact of Airbnbs. They can take a hands-off approach or find a path for growth that ensures both residents and rental hosts end up on stable footing."What I think you're going to see is more caps, or at least more caps in certain neighborhoods," Del Pego said. "In a lot of places, I'm certainly seeing the idea of figuring out the right number for a community becoming more and more prevalent."Lane of AirDNA argued that some level of regulation, like requiring hosts to obtain a permit, is necessary to help bring the industry out of the shadows and reduce risk for investors."If you're investing into a market and there's no regulation, you just don't know the rules of the road," Lane said. "You don't know when regulations are going to be put in place and what those regulations are going to be." But Lane, like Engle, was averse to the idea of cities capping the number of short-term-rentals, saying it creates an "almost unfair advantage" for incumbent hosts and curbs competition.A decrease in the number of short-term rentals would probably mean higher nightly rates in the future as supply falls back in line with demand — AirDNA projects the average rate will rise to $278.19 a night this year, a roughly 2% increase. But the result of more regulation may be a better and more consistent experience for guests and their neighbors. In response to increasing concerns from residents during the pandemic, some cities have more strictly enforced rules meant to minimize noise complaints and other disruptions from short-term rentals and cracked down on hosts who don't have a license. Del Pego suggested that for guests, a more professionalized industry would also mean fewer hassles like exorbitant security deposits, hidden charges, or dirty rentals.  "I think the day has come that short-term rentals are now thought of like a lot of the other businesses: something that needs to be managed and controlled from a planning perspective so that the balance for a city or a county is healthy," Del Pego said. "A lot of cities and counties are leaning in, and I think when Airbnbs were new they were just standing back."Reaching that balance won't be easy. But when short-term rental owners do well — without disrupting neighborhoods — cities get more tax revenue and a thriving tourism economy.There's one thing pretty much everyone can agree on: Short-term rentals are here to stay. AirDNA has forecast that even with a drop in occupancy, the number of available listings is likely to increase to more than 1.4 million this year, which would be a 9% jump from 2022. A business the size of Airbnb "isn't going anywhere," Del Pego said. "The business is just maturing."James Rodriguez is a senior reporter for Insider.Dan Latu is a real estate reporter for Insider.Read the original article on Business Insider.....»»

COYA and Dr. Reddy's enter into a license agreement where the latter will source proposed biosimilar of abatacept biosimilar to Coya to develop and commercialize COYA 302. Coya Therapeutics, Inc. COYA announced that it has entered into a worldwide agreement with Dr. Reddy’s Laboratories Limited RDY. Per the terms of the agreement, Coya will get the license to develop and commercialize Dr. Reddy’s proposed biosimilar for Orencia (abatacept) for the development and commercialization of combination product, COYA 302 for neurodegenerative diseases.In the year so far, the shares of Coya Therapeutics have fallen 14.7% compared with the industry’s decline of 7.2%.Image Source: Zacks Investment ResearchCOYA 302 is a combination product of COYA 301 and CTLA4-Ig, which intends to suppress neuroinflammation via multiple immunomodulatory pathways for the treatment of neurodegenerative diseases.Per the terms, Coya has obtained an exclusive, royalty-bearing license to Dr. Reddy’s proposed biosimilar Abatacept for the development and commercialization of Coya 302 for the treatment of certain neurological diseases for sale in multiple territories, including North and South America, EU, UK and Japan.In exchange, Coya is liable to pay a one-time non-refundable upfront fee to Dr. Reddy’s. Additionally, Coya will owe tiered payments to Dr. Reddy’s based on the former’s achievement of certain developmental milestones. The license agreement further includes royalties to Dr. Reddy’s on net sales of Coya 302 within its licensed territory on a tiered basis.Coya will develop COYA 301 itself while sourcing CTLA4-Ig from Dr. Reddy’s. Coya expects to file an investigational new drug application for COYA 302 with the FDA in the second half of 2023 and also plans to initiate a phase Ib/II study on COYA 302 as a potential treatment for Amyotrophic Lateral Sclerosis.The agreement also permits Dr. Reddy’s to commercialize COYA 302, by providing a license to COYA 301, Coya’s low-dose IL-2, in territories not otherwise granted to Coya. This will construe royalties on net sales from Dr. Reddy’s in its territories to Coya, based on the same tiered structure as Coya owes Dr. Reddy’s. Additionally, the agreement also grants permission to both parties to enter into a mutually satisfactory commercial supply agreement at an appropriate time.Zacks Rank and Stocks to ConsiderCoya currently has a Zacks Rank #3 (Hold).A couple of better-ranked stocks in the same industry are Aptinyx APTX and Annovis Bio ANVS, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.In the past 90 days, the estimate for Aptinyx’s 2023 loss per share has narrowed from 77 cents to 56 cents. In the year so far, the shares of Aptinyx have fallen by 51.3%.APTX’s earnings witnessed an average earnings surprise of 9.53%, beating all four estimates in the trailing four reported quarters.In the past 90 days, the consensus estimate for Annovis’ 2023 loss per share has narrowed from $2.94 to $2.93. In the year so far, the shares of Annovis have increased by 13.6%.ANVS’ reported loss per share was narrower than the estimated loss per share in the last reported quarter, delivering an earnings surprise of 20.51%. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How To Profit From Trillions On Spending For Infrastructure >>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 Dr. Reddy's Laboratories Ltd (RDY): Free Stock Analysis Report Aptinyx Inc. (APTX): Free Stock Analysis Report Annovis Bio, Inc. (ANVS): Free Stock Analysis Report Coya Therapeutics, Inc. (COYA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

VANCOUVER, BC, March 17, 2023 /CNW/ - Filo Mining Corp. (TSX:FIL) (Nasdaq First North Growth Market: FIL) (OTCQX:FLMMF) ("Filo Mining" or the "Company") announces its results for the three and twelve months ended December 31, 2022. PDF Version Jamie Beck, President & CEO, commented, "With a strong balance sheet and continued exploration success in 2022, we are accelerating our exploration efforts. There are nine rigs currently available at the project and we are planning for year-round operations throughout 2023. We look forward to another year of high impact drilling comprised of a mix of both large and small step-outs to the north and south of our current interpretation of the Aurora Zone, as well as resource definition drilling within it. Our exploration results continue to stand out on a global scale and showcase the project as one of the most significant copper-gold-silver discoveries of its generation." 2022 HIGHLIGHTS $82.5 million in exploration and project investigation costs incurred, yielding multiple successful holes highlighted by: Discovering what is interpreted to be a new porphyry centre along the broader Filo trend, now named the "Bonita Zone". The Bonita discovery supports the interpretation that Filo del Sol hosts a multikilometer, northeast-trending alignment of overlapping porphyry-centered hydrothermal systems which is open to expansion both to the south and to the north. The Bonita Zone is evidence of the untapped exploration potential that still exists at Filo del Sol despite the significant mineral discoveries made to date; Drilling the highest grade silver intersection on the project to date in hole FSDH055A which intersected 64m at 1,214 g/t silver; Extending the high-grade Breccia 41 Zone with new intersections in holes FSDH055C (126m @ 5.02% CuEq (2.12% Cu, 1.69 g/t Au, 188.7 g/t Ag)) and FSDH057 (289m @ 2.0% CuEq (1.18% Cu, 0.68 g/t Au, 36.0 g/t Ag)); Continued drilling of a combination of larger step-out holes to try to find the edges of the mineralized system, along with step-out and infill holes to further define the size of the remarkable Aurora Zone; Both the Aurora Zone and Breccia 41 remain open to expansion in several directions and drilling to further define them is ongoing; Pace of exploration accelerated with drilling rig count on site increasing from 6 at the beginning of the year to 9 currently; The first year in which drilling, and field operations continued year-round, through the South American winter; Funding secured via $100 million strategic investment by BHP Western Mining Resources International Pty Ltd ("BHP"), resulting in BHP owning approximately 5% of the Company; Added to the S&P/TSX Composite Index - the headline index for Canada, represented by the largest companies on the TSX, and is the principal benchmark measure for the Canadian equity markets; Added to the VanEck Junior Gold Miners ETF, recognizing the significant precious metals content at Filo del Sol, as well as the continued growth in our market capitalization and trading liquidity; Entered 2023 with strong balance sheet including cash of $74.9 million and working capital of $60.3 million; and On January 17, 2023, announced a proposed name change to "Filo Corp." to better align with the Company's strategic vision and plans to seek shareholder approval for the name change at its upcoming annual shareholder meeting. If approved by shareholders, the name change is also subject to TSX approval. FOURTH QUARTER 2022 DRILLING AND ASSAY RESULTS During and subsequent to the end of the fourth quarter of 2022, the Company announced the following results from the ongoing drill program: FSDH067, an infill hole in the Aurora Zone, intersected 1,131.6m at 1.11% CuEq from a depth of 132m, including 4m at 1.54% Cu, 12.08 g/t Au and 20.5 g/t Ag from 202m and 36m at 0.76% Cu, 0.71 g/t Au and 123.2 g/t Ag from 248m. The hole ended in strong mineralization at a depth of 1,263.6m; FSDH062 intersected 1,313.2m at 0.65% CuEq from a depth of 134m, including 520.4m at 0.82% CuEq from 400m. The hole ended in strong mineralization at a depth of 1,447.2m due to rig capacity. The hole was collared at the eastern edge of the current mineral resource of the Aurora Zone and is entirely outside it; FSDH064 intersected 1,356.0m at 1.09% CuEq from a depth of 44m, including 79.0m at 182.6 g/t Ag from 306.0m and 424.0m at 1.54% CuEq from 536.0m. The hole ended in mineralization at a depth of 1,400.0m. The hole is an Aurora Zone infill hole, filling a 300m gap between previously drilled holes. It tested an area which has particularly high-grade mineralization in the shallow, oxidized part of the deposit. The intersected silver zone correlates well with adjacent holes, although the silver zone here is thicker and higher-grade than expected. The porphyry interval in this hole also correlates well with adjacent holes; FSDH070A an infill hole in the Aurora Zone intersected 1,056.5m at 0.86% CuEq from a depth of 282m, including 670.4m at 0.97% CuEq from 369.7m. The hole ended in strong mineralization at a depth of 1,338.5m due to rig capacity; FSDH071 an infill hole in the Aurora Zone intersected 1,028.0m at 1.16% CuEq from a depth of 292m, including 172.0m at 2.14% CuEq from 408.0m and 237.5m at 1.49% CuEq from 776.0m. The hole ended in mineralization at a depth of 1,320m due to rig capacity. The entire hole is outside of the resource pit shell. FSDH068A intersected 1,776.0m at 0.70% CuEq from a depth of 18.0m, including 1,120.0m at 0.92% CuEq from 394.0m and 724.2m at 1.08% CuEq from 574.0m. The hole was planned to test for the eastern and depth extension of the high-grade Breccia 41 Zone intersected in three holes drilled on this same section. The hole is entirely outside of the resource pit shell; FSDH069A intersected 1,296.5m at 1.00% CuEq from a depth of 138.0m, including 31m at 127.0 g/t Ag from 404.0m in the Silver Zone, 598.0m at 1.51% CuEq from 498.0m and 94.0m at 3.01% CuEq from 792.0m. The hole ended in strong mineralization at a depth of 1,434.5m due to rig capacity. The hole is entirely outside of the resource pit shell; FSDH074 intersected 1,022.0m at 0.66% CuEq from a depth of 278.0m, including 516.0m at 0.79% CuEq from 644.0m and 252.0m at 0.85% CuEq from 840.0m. The hole was collared on Section 9200N, 200m east of FSDH068A and 400m east of FSDH041. The hole was stopped in porphyry mineralization at 1,509.0m. The hole is entirely outside of the resource pit shell; and FSDH077 intersected 2.0m at 10.35 g/t Au from a depth of 192.0m plus 516.2m at 0.20% CuEq from 404.0m. The hole was collared on Section 6000N and is the first hole into the new Flamenco target and there are no holes within 500m of it. The hole was stopped at 920.2m. Assay results received by the Company during and subsequent to 2022 are summarized in Appendix 1 to this news release. PRE-FEASIBILITY STUDY UPDATE The Company has completed an update to the pre-feasibility study ("PFS") on the Filo del Sol Project, with an effective date of February 28, 2023, which continued to demonstrate the project's robust economic potential. The PFS, which was based only on the oxide portion of the current Mineral Resource and used prices of US$3.65/lb copper, US$1,700/oz gold, and US$21/oz silver, yielded an after-tax net present value ("NPV") of US$1.3 billion at a discount rate of 8%, and generated an internal rate of return of 20%.  Positive valuations were also maintained across a wide range of sensitivities on key assumptions. The Company's most recent Mineral Resource and Mineral Reserve statement for the Filo del Sol Project is shown below. This Resource does not include any of the mineralization hosted in the Aurora, Breccia 41 or Bonita Zones and the Reserve only encompasses the oxide portion of the Resource. Category Tonnes (millions) Cu (%) Au (g/t) Ag (g/t) Lbs Cu (billions) Oz Au (millions) Oz Ag (millions) Mineral Resource Indicated 432.6 0.33 0.33 11.5 3.2 4.6 160.4 Inferred 211.6 0.27 0.31 7.4 1.3 2.1 50.3 Mineral Reserve Proven - - - - - - - Probable 259.6 0.39 0.34 16.0 2.2 2.9 133.3 Mineral Resource 1)  The Mineral Resource estimate has an effective date of January 18, 2023. 2)  The qualified person for the resource estimate is James N. Gray, P Geo. of Advantage Geoservices Ltd. 3)  The mineral resources were estimated in accordance with the CIM Definition Standards for Mineral Resources and Reserves. 4)  Sulphide copper equivalent (CuEq) assumes metallurgical recoveries of 84% for copper, 70% for gold and 77% for silver based on similar deposits, as no metallurgical testwork has been done on the sulphide mineralization, and metal prices of $4/lb copper, $1800/oz gold, $23/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0077+Au*0.5469. 5)  All figures are rounded to reflect the relative accuracy of the estimate. 6)  Mineral resources are not mineral reserves and do not have demonstrated economic viability. 7)  The resource was constrained by a Whittle® pit shell using the following parameters: Cu $4/lb, Ag $23/oz, Au $1800/oz, slope of 29° to 45°, a mining cost of $2.72/t and an average process cost of $9.86/t. 8)  Cut-off grades are 0.2 g/t Au for the AuOx material, 0.15% CuEq for the CuAuOx material and 20 g/t Ag for the Ag material. These three mineralization types have been amalgamated in the oxide total above. CuAuOx copper equivalent (CuEq) assumes metallurgical recoveries of 77% for copper, 72% for gold and 71% for silver based on preliminary metallurgical testwork, and metal prices of $4/lb copper, $1800/oz gold, $23/oz silver. The CuEq formula is: CuEq=Cu+Ag*0.0077+Au*0.6136. 9)  Mineral resources are inclusive of mineral reserves. Mineral Reserve 1)  The Mineral Reserve estimate has an effective date of February 28, 2023. 2)  The qualified person for the estimate is Mr. Gordon Zurowski, P.Eng. of AGP Mining Consultants, Inc. 3)  The mineral reserves were estimated in accordance with the CIM Definition Standards for Mineral Resources and Reserves. 4)  The mineral reserves are supported by a mine plan, based on a pit design, guided by a Lerchs-Grossmann (LG) pit shell. Inputs to that process are metal prices of Cu $3.50/lb, Ag $20/oz, Au $1600/oz; mining cost average of $2.72/t; an average processing cost of $9.65/t; general and administration cost of $1.46/t processed; pit slope angles varying from 29 to 45 degrees, inclusive of geotechnical berms and ramp allowances; process recoveries were based on rock type. The average recoveries applied were 83% for Cu, 73% for Au and 80% for Ag, which exclude the adjustments for operational efficiency and copper recovered as precipitate which were included in the financial evaluation. 5)  Dilution and mining loss adjustments were applied at ore/waste contacts using a mixing zone approach. The volumes of dilution gain and ore loss were equal, resulting reductions in grades of 1.0%, 1.3% and 1.0% for Cu, Au and Ag, respectively. 6)  Ore/waste delineation was based on a net value per tonne (NVPT) cut-off of $4.5/t considering metal prices, recoveries, royalties, process and G&A costs as per LG shell parameters stated above, elevated above break-even cut-off to satisfy processing capacity constraints. 7)  The life-of-mine stripping ratio in tonnes is 1.57:1. 8)  All figures are rounded to reflect the relative accuracy of the estimate. Totals may not sum due to rounding as required by reporting guidelines. The Company's Mineral Resource estimate is inclusive of the Mineral Reserve estimate as set forth above. The technical information relating to the PFS is described in a technical report titled "Filo del Sol Project NI 43-101 Technical Report, Updated Pre-feasibility Study" dated March 17, 2023, with an effective date of February 28, 2023 (the "Technical Report"). The Technical Report was prepared for Filo Mining by Ausenco Engineering Canada Inc. and is available for review under the Company's profile on SEDAR at www.sedar.com and on the Company's website at www.filo-mining.com. OUTLOOK Drilling continues to be the primary focus with nine drill rigs at site. As the summer drilling campaign continues, drilling is underway on new exploration targets outside of the Aurora and Breccia 41 Zones. Drilling will remain a mix of both large and small step-outs to the north and south of the Aurora Zone, as well as resource definition drilling within it. The Company continues to maintain a strong focus on improving drill productivity through a variety of initiatives, and is planning for year-around drilling and field operations. Data collected from the current campaign will be used to develop a comprehensive geological model which will guide further exploration and form the basis of an eventual update to the Mineral Resource estimate. The Company will continue preliminary metallurgical testwork on the sulphide mineralization, as well as environmental and social baseline programs in support of future project permitting. The Company's plans and timelines are subject to equipment and staff availability, along with being able to operate safely and effectively throughout the winter and in accordance with the Company's health and safety protocols. BHP exercises anti-dilutive top-up right to maintain pro rata shareholding Jamie Beck remarked, "Recently, BHP elected to exercise its right to maintain its pro rata interest in Filo Mining, and we are once again pleased to receive BHP's ongoing vote of confidence in our team and the Filo del Sol Project." On February 7, 2023, the Company closed a non-brokered private placement to BHP Western Mining Resources International Pty Ltd, a wholly owned subsidiary of BHP Group Limited (collectively, "BHP"), whereby the Company issued 43,711 common shares to BHP for gross proceeds of C$1,084,907 (the "Anti-dilution Top-Up"). The Anti-dilution Top-Up was undertaken pursuant to the terms of the March 11, 2022 private placement (the "Private Placement"), whereby BHP was granted certain anti-dilutive rights, allowing BHP to top-up and maintain its pro rata ownership interest in the Company from time to time (see news releases dated February 28, 2022 and March 11, 2022). SELECTED FINANCIAL INFORMATION (In thousands of Canadian dollars)  December 31, December 31, 2022 2021 Cash and cash equivalents 74,915 19,417 Working capital 60,296 13,052 Mineral properties 9,737.....»»

While the pandemic helped fuel the demand for online retail and eCommerce, in-store retail shopping remains a staple among millions of American consumers. In the United States, there are currently more than 153,597 small specialty retail stores as of 2023, an increase of 1.9% from last year. Q4 2022 hedge fund letters, conferences and more […] While the pandemic helped fuel the demand for online retail and eCommerce, in-store retail shopping remains a staple among millions of American consumers. In the United States, there are currently more than 153,597 small specialty retail stores as of 2023, an increase of 1.9% from last year. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   A wider economic outlook reveals that in recent years, consumers have relied heavily on their savings and credit cards to make up for higher costs due to soaring inflation. On the back of this, small business owners and entrepreneurs are considering new routes through which they can draw in customers, and save money while remaining operational during economic downturns. Regardless of the financial challenges posed by the dwindling economy, budgeting for a small business or any business for that matter is no easy challenge, and no one knows this better than entrepreneurs and small business owners. Keeping track of everyday operations, while also juggling to find a suitable store to rent does not come without a lot of protests. Ensuring a commercial or retail space is equipped with all the right resources that will help your business thrive can increase the level of uncertainty for any type of owner. Before signing a lease and while you’re still shopping around for the perfect store, you might want to consult a property management specialist that will highlight all the important factors you need to consider when opening a brick-and-mortar location. Retail And Commercial Pricing Structure Unlike leasing a house or apartment, which is typically rented at a predetermined price, retail and commercial pricing is somewhat different. Typically a commercial space will be rented based on the size of the premises, and the price per square foot or meter. This would imply that the larger the space, the more you will be paying per month to rent the entire facility. In the U.S., retail real estate prices average $20.85 per square footage, while the average monthly asking price per square foot of shopping mall real estate is $26.84 as of 2022. Retail real estate is often more affordable when a store is located in a separate building or a designated shopping zone of a town. This however does limit the potential foot traffic, but shopping malls are notorious for being exorbitantly expensive, especially for small startup businesses. Cost Of Shop Fitting Another cost factor to consider is how much you are willing or able to spend fitting out the shop. This usually includes fittings, equipment, and additional structures needed in the shop. Usually, a business owner will draw up a plan that can help them determine what is required for their store. This will not only include the layout and design of their store, but also the price of equipment and fittings, labor costs, and a timeline by which they need to be finished. Shop fitting can be an expensive endeavor, especially if you are renting a space that is bare, and requires a lot of work to be done beforehand. Aside from budgeting for the physical fittings and equipment that will be fitted into the store, you will need to have the additional cash flow available for any maintenance problems you may endure that are not covered by your monthly rental. Facilities And Utilities On top of having to pay for rent, businesses typically need to cover the cost of facilities and utilities they are using on the premises or building. Some commercial buildings will charge additional fees for bathrooms located outside of the premises, additional advertising space, signage above the store or any nearby billboards, and any additional floor space that is used. Then there are fees for maintenance and repairs, garbage disposal costs, and leasing application fees. Other expenses such as utilities can also drive up the cost of renting a retail space. According to research, energy is the fourth-largest in-store expense for businesses in America. While not all of these fees and expenses may be included in your rent, it’s important to read through the contract beforehand to get a clear understanding of what you’re going to be paying for a retail space, and what your potential capital return may be. Labor And Employee Overheads Hiring an employee or employees can help you as a business owner during the start and operation of the business. While having more hands around a store to help with managing inventory and assisting customers, there is however a price for their labor. In the United States, on average an in-store retail associate could be paid $11.94 per hour, while a store manager can earn anything between $27 and $41 per hour. Hourly wages can change depending on where a store is located, and local jurisdictions. In recent years there has been a push from union groups and employees to raise the average minimum wage to $15.00 per hour. Consider whether it is at all necessary to hire someone at first. Once the business starts growing, and the workload becomes unmanageable for you as a single owner, you can consider taking up the costly responsibility of hiring staff. Licensing And Permit Fees Before you can welcome your first customers, you will need to have registered your business as a legal entity with local authorities. If you haven’t done so until this point, you will need to decide on the type of legal structure you want to operate your business in. This may include either a limited liability company (LLC), sole proprietorship, partnership, or limited liability partnership, among others. On top of this, you may need to be required to apply and pay for appropriate licenses and permits to operate as a business. Some of the permits that might be required by law include an Employer Identification Number (EIN),  state licenses, resale certificates, and a seller’s permit. The process of having these permits approved can take several days or weeks, so be sure to apply well in advance. Make sure to keep all receipts or proof of payments when you apply. In-Store Technology Not all businesses may require technology or additional equipment for their day-to-day operations, but in the long term, having these systems up and running can save both time and money. Typical in-store tech such as a point of sale (POS), card machines, internet connectivity, cameras, inventory management, and even ordering infrastructure could come at additional costs. There also might be a need to purchase software to run several programs or systems, which will need to be installed by a professional. Before opening a shop, consider which systems will suit your business needs best, how they will help with store operations, and what the potential return on investment might be in the short term. Marketing Marketing is an important element for any business, especially in a digital age where the competition has grown increasingly strong. Making sure enough of the budget is allocated to an effective marketing plan or strategy will help ensure your new store will receive the online and in-person exposure it requires to become more self-sufficient. On top of this, marketing also requires assistance from professionals that might charge you additional fees for their services. Printing new banners, posters, pamphlets, or any other type of marketing material will also need to be worked into the budget. It’s best to shop around beforehand to see what your available options are, and how much you are willing to spend for having specific marketing material in your store.   Business Insurance Keeping your valuable insured is a way to give yourself some peace of mind, and for business owners that have a brick-and-mortar store that's constantly exposed to all sorts of risks, business insurance is non-negotiable. The average cost of business insurance can range between $65 to $261 per month, depending on the type of policy and product you select. Not all policies will cover your business, the store, or any inventory, meaning you will need to look for a plan that covers a broad range of interests at the most affordable price. Keep in mind, that in some cases, insurance providers may charge different rates for companies depending on the size of their business, the industry it operates in, and where it may be located. Final Thoughts Though it’s not impossible to open a brick-and-mortar store, even as the rise of online shopping becomes more mainstream, it’s important to be aware of the initial upfront costs that are involved when giving your business its own space from where it can operate. Setting up a budget is the best way to ensure you can cover all the necessary expenses, and that you have enough physical cash flow available in your business to pay for any additional fees, expenses, or emergencies. Make sure to double-check your figures with a professional, and also shop around for the best possible prices before making a final call. While it’s a daunting challenge at first, opening a new store for your small business can be a rewarding experience......»»

Shore (SHBI) and Community Financial (TCFC) receive regulatory approvals for their previously announced all-stock merger deal. Shore Bancshares, Inc. SHBI and The Community Financial Corporation TCFC have received the required regulatory approvals from the Office of the Comptroller of the Currency and the Maryland Office of the Commissioner of Financial Regulation for their previously announced merger deal.Also, the board of governors of the Federal Reserve System granted Shore and TCFC a waiver of its merger application requirements.The consummation of the merger remains subject to the approval of SHBI and TCFC’s shareholders and the satisfaction of other closing conditions.In December 2022, Shore, the holding company of Shore United Bank, N.A., announced an all-stock merger deal worth $254.4 million or $44.71 per share with Community Financial, wherein TCFC would merge with and into SHBI.The closing of the deal is expected on or about Jul 1, 2023.At the time of the deal announcement, it was projected that the merger would be more than 40% accretive to Shore’s earnings per share in 2024. The combined company is expected to have $6 billion in total assets on a pro forma.The holders of TCFC common stock have the right to receive 2.3287 shares of SHBI common stock. The existing Shore shareholders will own 60% of the outstanding shares of the combined company and TCFC shareholders will own the remaining 40%.Once the merger is complete, the combined company will trade under the Shore Bancshares name, with its administrative headquarters located in Easton, MD.The combined company will operate a desirable, contiguous footprint throughout the Delmarva Peninsula, Southern Maryland, the Greater Baltimore-Washington area and Central Virginia, with plans to expand into attractive neighboring counties such as Prince George's County, MD.At the time of the deal announcement, Lloyd L. "Scott" Beatty, the president and CEO of Shore, stated, “This combination creates a solid and very promising future for the combined organization. We are bringing together two well-known financial services brands that focus on providing remarkable client experiences, helping individuals and businesses reach their financial goals. The combined bank will remain committed to our employees and the relationships that they have developed over decades of serving our communities.”James M. Burke, the president and CEO of TCFC, said, “Shore and TCFC are both community-focused organizations, with similar cultures and visions for the future. Our combined size and resources will significantly enhance our scale and ability to help customers through higher loan limits, greater investment in technology and increased career opportunities for employees. This will allow the combined bank to continue to deepen its presence in our core markets and will also allow us to expand more effectively in the markets that we wish to serve.”Over the past six months, shares of Shore have lost 9.1%, while TCFC has gained 11.4%. This compares with their industry’s decline of 4%. Image Source: Zacks Investment Research Currently, both SHBI and TCFC carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Inorganic Expansion Efforts by Other FirmsLast month, LPL Financial LPLA announced that it closed the acquisition of the Private Client Group business of Boenning & Scattergood, a broker/dealer and registered investment adviser headquartered in West Conshohocken, PA.As a result of the transaction, $4 billion of client assets are expected to onboard to LPLA’s custodial platform.Rich Steinmeier, LPL Financial’s managing director and divisional president, said, “This is an exciting day for us, and we are proud to welcome the distinguished Boenning & Scattergood team to the LPL family. Boenning & Scattergood has a long history of helping its clients build their financial legacies. That aligns perfectly with our goal to provide the technology and support our advisors need to deliver the best client experience possible.” This Little-Known Semiconductor Stock Could Be Your Portfolio’s Hedge Against Inflation Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera or refrigerator (and that’s just the tip of the iceberg), you have a need for semiconductors. That’s why their importance can’t be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. Shockwaves to the international supply chain from the global pandemic have unearthed a tremendous opportunity for investors. And today, Zacks' leading stock strategist is revealing the one semiconductor stock that stands to gain the most in a new FREE report. It's yours at no cost and with no obligation.>>Yes, I Want to Help Protect My Portfolio During the RecessionWant 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 LPL Financial Holdings Inc. (LPLA): Free Stock Analysis Report Shore Bancshares Inc (SHBI): Free Stock Analysis Report The Community Financial Corporation (TCFC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

No matter how long you have been married or how many anniversaries you’ve celebrated, you’re sure to know that you’re stronger together than you are apart. Retirement savings are no different. When it comes to retirement planning specifically, they still need to keep an eye out for ways to manage it as a couple — […] No matter how long you have been married or how many anniversaries you’ve celebrated, you’re sure to know that you’re stronger together than you are apart. Retirement savings are no different. When it comes to retirement planning specifically, they still need to keep an eye out for ways to manage it as a couple — even if a couple keeps some aspects of their finances separate. In order to make retirement as enjoyable as possible for you and your spouse, here are some things to consider. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. A Couple’s Guide to Combining Retirement Accounts Your retirement accounts cannot be combined with your spouse like your joint checking account. The reason? 401(k) accounts are linked to an individual’s employment at a company. Therefore, only those individuals can enroll and contribute. What IRAs? As the name implies, these are “individual retirement accounts.” In other words, the account only has one owner. There is, however, a caveat. Retirement accounts allow spouses to designate the other as a beneficiary. Your spouse cannot contribute to your plan if he or she was named a beneficiary. However, if something were to happen to you, your account and funds would be accessible to them. When one spouse passes away, the other spouse would inherit the account and could roll it into their own 401(k) or IRA. In short, both of you are taken care of in the future by making each other the beneficiaries of your retirement accounts. Spousal IRAs are also available. Despite sounding like joint retirement accounts, they aren’t. The purpose of spousal IRAs is more for unemployed or low-income partners. Basically, spousal IRAs are traditional or Roth IRAs that a working spouse contributes to in the name of their non-working spouse with the intention of using the funds for their retirement. Individuals can typically contribute to IRAs only if they have earned income. Also, spousal IRAs can only be applied for by couples filing joint tax returns. The Benefits of Opening a Separate IRA for Each Spouse The best way to receive the highest tax benefits is to maximize your contribution to both IRAs while you can. There is no difference in contribution limits between traditional IRAs and Roth IRAs: Individually, you can contribute $6,500 to your IRA in 2023 if you’re younger than 50, and $7,500 if you’re older than 50. If you both open accounts, you can contribute a total of $13,000 each year. You can also contribute $1,000 each per year as a “catch-up” contribution if either of you is over 50, bringing your combined contribution to $15,000. There is an income limit for Roth IRAs, so people earning above this threshold can make reduced contributions. In turn, those making above that threshold are ineligible. Those whose income falls between $138,000 and $153,000 will be phased out starting in 2023. In the case of married couples filing jointly, the amount is $218,000 and $228,000. IRAs can be opened at brokerages such as Charles Schwab or Fidelity. If you prefer robo-advisors, check out Wealthfront, SoFi, and Betterment, which construct and manage customized portfolios for investors based on their age, risk tolerance, and investment goals. Besides traditional and Roth IRAs, each offers retirement planning tools to help you and your spouse prepare for retirement. How Couples Can Plan Together for Retirement Managing retirement plans as a couple may not be straightforward, but there are ways to make it work. Here are a few tips for combining retirement forces to make your golden years as fulfilling as possible. As a couple, discuss your retirement goals. To build a healthy financial plan, you need to talk openly and honestly about your finances. Getting your significant other to understand your retirement goals is a great first step. During your retirement years, do you plan to stay in the same house? Perhaps you would like to travel internationally once a year or travel across the country in a camper. You should also decide how much you want to retire with. The retirement number for each couple depends on their standard of living, but a Retirement Calculator can give you an idea. To find your target number today, subtract your current income from your estimated Social Security benefits, and divide the result by 0.04. Based on your numbers, you can calculate how much you can withdraw safely to make your retirement last as long as possible. Establish a retirement date for both of you. When will you and your partner retire? If you are under age 59 ½, you cannot withdraw penalty-free from retirement plans like 401(k)s and IRAs. With that in mind, putting some of your retirement funds into a taxable brokerage account that you can access at any time might make sense if you or your partner plan to retire earlier than 59 ½. You might think it would be best if both of you retired at the same time. But depending on your circumstances, you might want to retire separately. The size of Social Security benefits can be also affected considerably by being able to earn for a few more years during your peak earning years. By retiring early, you could lose out on this money. It is also important to consider whether both of you are eligible for Medicare. You might want to consider holding on to your job until you are eligible for Medicare if one of you is eligible and the other is not. Additionally, a 2019 study by Boston College’s Center for Retirement Research found that households with two incomes don’t save more for retirement. In most dual-earner households, only one member has a 401(k). The study suggests that dual-earner households with only one saver are saving less than they should. You shouldn’t assume that saving money through work is enough just because one of you does it. Consider making bigger 401(k) contributions if one of you does not have access to an employer’s plan. Choose an investment option and determine your contribution amount. Your retirement plans, goals, and needs need to be discussed as a couple. At the same time, couples disagree over how much to save for retirement and when to retire their partners. When these issues are not addressed, retirement plans can be derailed. It is particularly true if savings amounts are not calculated together. The only way to make sure you and your partner can enjoy your retirement is to talk with each other and come up with a plan. Ideally, you should decide on a budget amount that you both can afford and stick to consistently. However, there is no need for both of you to follow the same set of rules. But, if your company offers 401(k) plans with company matching, you should contribute the minimum. Each account is unique, so you should keep this in mind. As such, compare them carefully to see which one offers the most advantages. For instance, lower management fees and a greater variety of investment options. The better of the two should be prioritized. And don’t copy each other’s investments. You can better diversify your overall portfolio if you know what your partner invests in. Having trouble choosing a retirement plan? Well, here are some joint retirement accounts worth exploring. However, before moving on to a different retirement vehicle, it is ideal to maximize one type of retirement account first. By doing so, you will get the maximum benefit from the retirement account. Also, making the most of individual retirement accounts can be done in a variety of ways. From Roth IRAs to 401(k)s, here are the specific benefits and strategies for each. 401(k) plans Retirement plans sponsored by employers are available only to employees, so you are the only one eligible to enroll. You can make your spouse a beneficiary, but they won’t be able to make contributions. When both of your 401(k) plans are maxed out, you can defer taxes as a couple. The money you contribute to a 401(k) account is tax-deferred until you retire and begin withdrawing it. Contributions to 401(k)s, 403(b)s, most 457 plans, and Thrift Savings Plans will be limited to $22,500 in 2023, up from $20,500 in 2022. Roth IRAs and Traditional IRAs Whether a traditional or Roth IRA is right for you depends on your personal circumstances. However, there is one universal truth. An individual retirement account, such as a traditional or Roth IRA, can only be owned by one person. Although you cannot have a joint IRA account, you can designate your partner as a beneficiary, so that if you pass away, their funds would be distributed to them. Is it possible for married couples to combine their IRAs? Unfortunately, no. However, if both of you are interested in making the most use of IRAs, each of you can open an IRA and contribute up to $6,500 annually, for a combined $13,000. It’s important to note that some couples may not be able to deduct the full amount of their traditional IRA. The amount depends on their income and whether they are covered by a retirement plan at work. Those filing as singles will have an income phase-out range of $138,000 to $153,000 in 2023. For married couples filing jointly, it’s $218,000 and $228,000. If only one is covered by a retirement plan, the deduction is reduced if their modified AGI is more than $198,000; the deduction phases out at a modified AGI of $208,000. Spousal IRAs In IRS rules, a spouse without income or employment can fund an individual retirement account called a spousal IRA. Be aware that IRAs are not specifically designed for spouses. Instead, the rule permits nonworking spouses to contribute to a traditional IRA or Roth IRA as long as their spouse is working. Under spousal IRA rules, individual retirement accounts are not co-owned. The working spouse owns an IRA under his or her own name, and the non-working spouse owns an IRA under her or his name. The accounts may have been opened before they got married, while they were married and both working, or by the non-working spouse. In 2021 and 2022, spouses contributed the same amount to an IRA as any other individual: $6,000 per year. The the limit increased to $6,500 in 2023. In 2021 and 2022, the annual contribution limit for people 50 and older was $7,000 and increased to $7,500 in 2023. As per the IRS, “Each spouse can make a contribution up to the current limit.” For 2023, spousal IRA contributions will be limited to $13,000 for couples where one spouse works and $15,000 for couples over 50. Each account’s contribution limit is determined by its individual annual IRA contribution limit. Brokerage Accounts A brokerage account is not technically a retirement-only vehicle. However, you can surely use one (or several) to fund a joint retirement. In brokerage accounts, you can use the same funds as in 401(k)s and IRAs. Despite not offering tax benefits, these accounts offer the following benefits: When you withdraw your investment earnings in retirement, you will not be taxed on them. The money can be accessed or withdrawn at any time without additional penalties. Also, you can own a joint brokerage account with your partner equally. So, if money is moved or sold among some accounts, the other owner must also approve any transactions. In other accounts, though, one account holder can make a decision without the other’s approval. Choose the best health coverage. For families, health insurance is expensive. Based on a survey by the Kaiser Family Foundation, the average annual premiums for employer-sponsored health insurance in 2022 were $22,463. In the event that you and your spouse have access to health insurance through your work, you’ll need to decide whether to keep your own individual plans or join together under one plan. What if you have children? They can be covered under just one parent’s plan or under a family plan. In fact, a growing number of employers are tiering their coverage options. “Employees plus children,” for example, is often a cheaper category than “employees plus spouses” or “employees plus family.” The annual premiums for each option can be reduced by your employer’s incentives, such as HSA deposits for high-deductible plans. Large companies generally charge a $100 spousal surcharge per month. Ensure that you know the deductible and out-of-pocket maximum. If one spouse has better dental and vision coverage than the other, consider those options as well. Be sure to check for niche benefits, such as fertility treatments, mental health treatment, and special needs therapies. You should also make sure your preferred doctors are included in the Finally, consider your family’s frequency of seeking treatment. The best choice for your family may be a high-deductible policy that is eligible for an HSA if your family has a few ongoing medical issues. In general, these policies have lower premiums than preferred provider organizations (PPOs). Those who are eligible for a family HSA-eligible high-deductible plan will have to meet the deductible before the plan begins paying out benefits. For 2023, self-only HSA contribution limits are $3,850 and family contribution limits are $7,750. Pay attention to taxes. A married couple may file their federal income tax return jointly or separately. By extending several tax breaks to couples who file jointly, the IRS strongly encourages most couples to file joint tax returns. While most married couples should file jointly, there may be a few instances in which it is better to file separately. Advantages of filing jointly. Filing a joint tax return with your spouse has many advantages. When calculating their taxable income, joint filers receive one of the largest standard deductions each year. A couple filing jointly can usually qualify for multiple tax credits, including: Earned Income Tax Credit American Opportunity and Lifetime Learning Education Tax Credits Exclusion or credit for adoption expenses Child and Dependent Care Tax Credit Tax deductions and taxes are generally higher for joint filers, which allows them to earn more income and still be eligible for certain benefits. Consequences of filing your tax returns separately. Tax benefits are typically reduced for couples who file separately, on the other hand. It is possible that filing separate tax returns will result in more taxes. The standard deduction for married taxpayers filing separately in 2022 will be $12,950, compared to $25,900 for those filing jointly. As of 2023, single filers and married persons filing separate returns will have a standard deduction of $13,850, joint filers will have a standard deduction of $27,700, and heads of households will have a standard deduction of $20,800. Many of the tax deductions and credits mentioned above are automatically disqualified if you file a separate return from your spouse. In addition, separate filers usually have a smaller deduction for IRA contributions. They also cannot take the deduction for student loan interest. When filing separately, capital loss deductions are limited to $1,500, instead of $3,000 when filing jointly. When you might file separately. You may be able to save on your tax return by filing separately in rare circumstances. You and your spouse may not be able to claim most of your expenses in 2022 if you or your spouse have a large amount of out-of-pocket medical expenses to claim. Because the IRS only lets you deduct costs that exceed 7.5% of your adjusted gross income (AGI), if you and your spouse have high AGIs, it can be difficult to claim most of your expenses. Suppose you have $10,000 in medical expenses and $50,000 in income. This would be in compliance with the 7.5% threshold ($10,000 ÷ $50,000 = 20% of your income). In contrast, if both of you make $135,000, you cannot claim these medical expenses ($10,000 ÷ $135,000 = 7.4% of your income). If your incomes are not the same, filing separate returns may allow you to claim more medical deductions by applying the threshold to only one income. The standard deduction must be taken by both spouses when filing separately, or itemized deductions must be claimed by both spouses. The standard deduction cannot be taken by one spouse while the itemized deduction is taken by the other. If both spouses paid for the expense, each deduction can only be used by one spouse when itemizing deductions. If the total deduction claimed by both spouses does not exceed the total deduction, deductions can be split between spouses filing separately. Make your spouse a beneficiary. Unfortunately, there are no options that automatically operate as joint retirement accounts, despite the fact that there are many ways to start saving for retirement. The best way to prevent this is to make your spouse the beneficiary of your retirement account or make him/her the power of attorney for your account. That means your accounts and the money in them would be accessible to the other person even if one of you died.   FAQs What is the average retirement income for a couple? There is no simple answer to this question. In order to determine how much money you will need in retirement, many factors need to be considered. Among these factors are your age, health, lifestyle, and where you intend to reside. People who are young and healthy may be able to make do with less money than those who are older and have health problems. Nevertheless, the amount of money you need will also depend on your lifestyle. The amount of money you will need depends on your lifestyle, for example, if you plan to travel the world or enjoy a luxurious lifestyle. You should speak with a financial advisor to determine how much you will need for retirement. In order to create an effective retirement plan for you, they will take into account all the unique circumstances that you face. For a couple, what is a good monthly retirement income? This is another question that cannot be answered in a one-size-fits-all manner. A person’s age, health, lifestyle, and where they intend to live all play a role in what is a good monthly retirement income. A few general guidelines can, however, be followed. To be able to retire comfortably, you should aim to have at least 70% of your pre-retirement income each month. You would need at least $3500 per month in retirement income if you bring in a combined income of $5000 each month with your spouse. It is important to note that this is just a general guideline. There is a possibility that you will need more or less money based on your exact circumstances. Is it possible for both spouses to contribute to a 401(k)? A 401(k) account can only be contributed to by one spouse. The employee’s 401(k) plan is tied to his or her employment with the company offering the plan. It is possible, however, for a spouse to be a beneficiary of the plan. An inherited 401(k) can be rolled into an IRA or 401(k) of the spouse if the original plan holder passes away. Furthermore, 401(k) plans are individual plans, with each account being contributed to by only one individual – along with their employer, in some cases. In 2023, the maximum 401(k) contribution is $22,500 ($30,000 for those age 50 or older). Based on those numbers, a married couple can each contribute $22,500 a year to a 401(k) plan, for a total contribution of $45,000. How many IRAs can a married couple have? IRAs can be contributed to by each partner of a married couple filing jointly. However, there is a limit. Both IRA contributions “may not exceed your joint taxable income or the annual contribution limit on IRAs times two, whichever is less,” according to the IRS. The annual contribution limit is $6,500, so the total limit is $13,000.A $1000 “catch-up” contribution is available to those over age 50. In addition, Spousal IRAs can be traditional or Roth IRAs. Roth IRAs do not offer tax-free investments. Instead, the money comes from taxable income but can grow tax-free, so when you retire, you don’t have to pay taxes on the money taken out of the account. Although contribution limits vary depending on your tax filing status and income, they are typically the same as with traditional IRAs. What are the best ways to provide an income for a couple that will last their entire lives? There is only one guaranteed option: purchasing an annuity. You will receive an income for the rest of your life from an annuity or insurance company. And, with a guaranteed lifetime income rider will provide payments for as long as you both live, no matter how long that may be. For example, a couple aged 60 who wants to retire at 65 buys an annuity for $500,000 with a lifetime income rider. For the rest of their lives, they would receive $3,300 a month, or about $40,000. The remaining surviving spouse will receive a $3,300 monthly payment after the first spouse dies. Beneficiaries will receive a lump sum after both spouses pass away. It is also possible for lifetime payments to increase each year as inflation increases. Article by John Rampton, Due About the Author John Rampton is an entrepreneur and connector. When he was 23 years old, while attending the University of Utah, he was hurt in a construction accident. His leg was snapped in half. He was told by 13 doctors he would never walk again. Over the next 12 months, he had several surgeries, stem cell injections and learned how to walk again. During this time, he studied and mastered how to make money work for you, not against you. He has since taught thousands through books, courses and written over 5000 articles online about finance, entrepreneurship and productivity. He has been recognized as the Top Online Influencers in the World by Entrepreneur Magazine and Finance Expert by Time. He is the Founder and CEO of Due......»»

Denver, CO, March 06, 2023 (GLOBE NEWSWIRE) -- Intrepid Potash, Inc. (NYSE:IPI) ("Intrepid", the "Company", "we", "us", "our") today reports its financial results for the fourth quarter and full-year of 2022. Key Financial & Operational Highlights for Fourth Quarter and Full-Year 2022 Total sales of $66.7 million in the fourth quarter and $337.6 million for the full-year 2022, as potash and Trio® average net realized sales prices increased to $713 and $479 per ton, respectively. Net income of $4.0 million (or $0.30 per diluted share) and $72.2 million (or $5.37 per diluted share) in the fourth quarter and full-year 2022 respectively, and adjusted net income(1) of $11.0 million and $80.4 million, respectively. Adjusted EBITDA(1) of $23.1 million for the fourth quarter, bringing full-year 2022 adjusted EBITDA to $141.8 million. Cash flow from operations of $19.7 million in the fourth quarter, increasing full-year 2022 cash from operations to $88.8 million; the full-year figure includes an outflow of $32.6 million related to a customer refund in the third quarter of 2022. Income tax expense of approximately $24 million for 2022, but the utilization of our deferred tax assets resulted in cash taxes of approximately $1 million. In 2022, capital spending totaled $68.7 million, within our guidance range of $65 to $75 million. Share Repurchase Program During 2022, we repurchased 608,657 shares with a total cost of $22.0 million, or a weighted average price per share of $36.17. Liquidity & Investments We ended 2022 with cash and cash equivalents of $18.5 million and $149 million of available capacity on our credit facility. As of February 28, 2023, cash and cash equivalents totaled $5.9 million and available capacity on our credit facility totaled $149 million, for total liquidity of approximately $155 million. Intrepid maintains an investment account of short-and-long-term fixed income securities that had a balance of approximately $7.8 million as of February 28th, 2023. 2023 Capital Guidance For 2023, our capital budget guidance range is $60 to $75 million, with approximately $25 to $35 million for sustaining capital, and the remainder earmarked for growth projects, with the ultimate level of growth capital dependent on financial performance and market conditions. Strategic Focus for Growth Capital The strategic focus for our growth capital is to help ensure our potash solar solution mines have more reliable, high quality brine to help reduce production variances that may result from factors outside of our control, such as weather. We believe that the best use of our capital in 2023 is investing in our core potash assets to bring production closer to our productive capacity. As a business with higher fixed costs, increased levels of potash production can deliver significant operating leverage and sustained cash generation as we develop our long-life potash reserves in the decades to come. HB The installation of an improved pipeline system to the HB Solar Solution Mine is progressing well and we now expect to improve the injection rate capability of the pipeline system in Q2 2023, due to minor delays in permitting for railroad crossings. The upgraded pipeline system should allow us to efficiently produce additional solar tons and conduct the operations of our processing facilities at a lower cost as we increase the underground brine storage at HB. During the fourth quarter of 2022, we had an extraction well failure at HB, and as a result, we may deploy more growth capital for a new extraction well in 2023. Moab Drilling the additional potash cavern to increase production tons through higher extraction brine grade remains on track, and we expect this project to conclude in advance of the 2023 evaporation season. Intrepid South For the sand project on our strategically located Intrepid South property in the Delaware basin, we have been making continued progress on sourcing supplies and equipment, acquiring the necessary permits, and have started to engage in preliminary conversations with potential customers for sales agreements once production begins. After further evaluation of the sand resource, we are now targeting a larger plant, where annual production could total approximately one million tons per year of wet sand, with construction expected to begin in the fourth quarter of 2023. Consolidated Results, Management Commentary, & Outlook Intrepid generated fourth quarter and full-year 2022 sales of approximately $67 million and $338 million, respectively, which compares to fourth quarter and full-year 2021 sales of approximately $72 million and $270 million, respectively. The strong sales figures were driven by higher pricing for our key products, with our average net realized sales price for potash coming in at $713 per ton in 2022, while the average net realized sales price for Trio® totaled $479 per ton. During the fourth quarter, Intrepid generated adjusted net income of $11 million and adjusted EBITDA of $23 million, for full-year 2022 figures of approximately $80 million and $142 million, respectively, which compares to 2021 adjusted net income of approximately $22 million and adjusted EBITDA of $68 million. Bob Jornayvaz, Intrepid's Executive Chairman and CEO commented: "During the fourth quarter, the trend of our agriculture customers showing preference for just-in-time purchases mostly continued until we saw a key fill program announced in early-January. While some of the expected 2022 demand for our fertilizer products was deferred into 2023, during the fourth quarter, the diversity of our sales mix into feed and industrial markets helped provide a stable floor for sales volumes. Overall in 2022, high potash pricing drove very strong financial performance for Intrepid, which was among the best years in company history. Full-year adjusted EBITDA came in at $142 million, adjusted net income totaled $80 million, and our cash flow from operations totaled $89 million, which is net of the third quarter $32.6 million customer refund. Using our strong cash flow generation, we were able to begin our investments in growth projects with the key goal of increasing our potash production and improving our per unit economics. Moreover, under our share repurchase program, we also returned approximately $22 million in capital in 2022, reducing our outstanding share count by roughly 5% compared to the second quarter 2022 average. As for the outlook, we are pleased to share that this year is off to an encouraging start: U.S. farmers have wrapped up two consecutive years of very high profitability, are entering 2023 with strong balance sheets, and high prices for crop futures point to another year of robust farmer economics. For the first quarter, we have seen strong demand for our potash and Trio® which we expect to continue throughout the year as farmers will likely be incentivized to maximize their yields. Looking at the broader macro environment for potash, there continues to be a structural potash supply gap owing to the Belarusian sanctions and concerns around Russian supply, which should continue to provide a relatively high floor for pricing in 2023 and beyond, even as incremental supply from other projects starts to enter the market. For Intrepid, our key focus for this year will be successful execution on our growth projects, with the goal of improving the cost side of our potash production unit economics." Segment Highlights Potash     Three Months Ended December 31,   Year Ended December 31,       2022     2021     2022     2021     (in thousands, except per ton data) Sales   $         43,756           $         38,807           $         191,378           $         151,751         Gross margin   $         20,907           $         12,516           $         94,769           $         35,845                           Potash production volume (in tons)             106                     86                     270                     287         Potash sales volume (in tons)             50                     61                     222                     331                           Average potash net realized sales price per ton(1)   $         693           $         504           $         713           $         353         In the fourth quarter of 2022, potash sales increased $4.9 million to $43.8 million, which was driven by a higher average net realized sales price of $693 per ton, a 38% increase compared to the fourth quarter of 2021. The higher average net realized sales price offset lower sales volumes, with fourth quarter potash sales totaling 50 thousand tons, down from 61 thousand tons in the fourth quarter of 2021. Cost of goods sold in the potash segment totaled $18.1 million, down from $19.0 million in the prior year period, while gross margin totaled $20.9 million, an $8.4 million increase from the $12.5 million of gross margin generated in the fourth quarter of 2021. For the full-year 2022, sales totaled $191.4 million, a 26% increase from 2021, as the average potash net realized sales price per ton increased 102% to $713 per ton, which offset a 33% decrease in potash sales volumes. Global potash supply uncertainty helped drive higher potash prices in 2022, although in the back half of the year, our agricultural customers showed some reluctance to purchase potash that was not committed for immediate application. Steady sales into the feed market helped offset some of this deferred agricultural demand, and for the full-year 2022, sales to the feed market comprised 23% of our total potash sales. Potash cost of goods sold decreased $10.8 million, or 12%, in 2022, compared to 2021, mainly due to a 33% decrease in potash tons sold. While our potash tons sold decreased 33% in 2022, our weighted average carrying cost per ton increased due to increased royalties as our sales revenue increased, an increase in labor and benefits expense due to a company-wide salary increase in early-2022, and increased utility, property taxes, and insurance expenses due to inflationary pressures. Additionally, reduced production at our HB facility also increased our per ton of cost of goods sold because most of our production costs are fixed. For 2022, our potash production totaled 270 thousand tons, down from 287 thousand tons in 2021. Trio®     Three Months Ended December 31,   Year Ended December 31,       2022     2021     2022     2021     (in thousands, except per ton data) Sales   $         17,265           $         24,612           $         117,826           $         96,058         Gross margin   $         3,429           $         7,913           $         39,123           $         16,442                           Trio® production volume (in tons)             51                     53                     226                     228         Trio® sales volume (in tons)             28                     48                     197                     239                           Average Trio® net realized sales price per ton(1)   $         461           $         388           $         479           $         295         In the fourth quarter of 2022, sales decreased $7.3 million to $17.3 million. Although the fourth quarter 2022 average net realized sales price per ton of $461 was 19% higher compared to the prior year, sales volumes of 28 thousand tons were 20 thousand tons lower than the fourth quarter of 2021, as we saw reluctance from customers to purchase tons for the upcoming spring application season due to the anticipation of potential price declines. Cost of goods sold in the Trio® segment totaled $9.1 million, down from $11.5 million in the prior year period, while gross margin totaled $3.4 million, a $4.5 million decrease from the $7.9 million of gross margin generated in the fourth quarter of 2021. For the full-year 2022, our sales increased 23% to $117.8 million, as our average net realized sales price per ton increased 62% to $479, which was partially offset by an 18% decrease in Trio® tons sold. In 2022, our Trio® average net realized sales price per ton increased as generally strong crop prices and the relative value of Trio® compared to potash drove steady demand. Our Trio® production totaled 51 thousand tons in the fourth quarter and 226 thousand tons for 2022, which compares to 53 thousand tons and 228 thousand tons in the respective prior year periods. Our Trio® cost of goods sold in 2022 of $54.6 million was relatively unchanged from 2021, and although we sold 18% fewer Trio® tons in 2022, our weighted average carrying cost per ton of Trio® increased, which was due to higher contract labor expenses to operate an additional shift in 2022, higher labor and benefits expenses due to a company-wide salary increase in early 2022, increased royalty expenses due to increase sales revenues, and increased utility, property taxes, and insurance expenses from inflationary pressures. Oilfield Solutions     Three Months Ended December 31,   Year Ended December 31,       2022     2021     2022     2021     (in thousands) Sales   $         5,732           $         8,479           $         28,668           $         22,770         Gross margin   $         1,315           $         1,420           $         7,516           $         3,477         Our oilfield solutions segment sales increased 26% in 2022, compared to 2021. Water sales increased $1.9 million in 2022 to $17.5 million. Sales from right-of-way agreements, surface damages and easements increased $1.9 million, brine water sales increased $1.5 million, and produced water disposal royalties increased $0.5 million. Our oilfield solutions sales are highly correlated to oil and gas activities near our facilities in New Mexico. Overall sales increased due to increased oil and gas activities in 2022 compared to 2021, as oil prices continued to support oil and gas exploration activities in the Permian Basin near our Intrepid South property in southeast New Mexico. Cost of goods sold increased 10% in 2022 compared to 2021, as we incurred increased contract labor expenses to meet the additional demand for our oilfield solution segment products and services. We also incurred increased utility costs due to inflationary pressures, increased depreciation related to new infrastructure placed in service in 2022, and increased royalty expense due to increased water revenue. Gross margin increased $4.0 million, or 116%, in 2022 compared to 2021, due to the factors described above. Liquidity Cash flow from operations totaled $19.7 million in the fourth quarter and $88.8 million for the full-year 2022. As of February 28, 2023, cash and cash equivalents totaled $5.9 million and available capacity on our credit facility totaled $149 million, for total liquidity of approximately $155 million. Notes 1 Adjusted net income, average net realized sales price per ton and adjusted EBITDA are non-GAAP financial measures. See the non-GAAP reconciliations set forth later in this press release for additional information. Unless expressly stated otherwise or the context otherwise requires, references to tons in this press release refer to short tons. One short ton equals 2,000 pounds. One metric tonne, which many international competitors use, equals 1,000 kilograms or 2,204.62 pounds. Conference Call Information Intrepid will host a conference call on Tuesday, March 7, 2023, at 12:00 p.m. Eastern Time to discuss the results and other operating and financial matters and answer investor questions. Management invites you to listen to the conference call by using the toll-free dial-in number 1 (888) 210-4149 or toll-in dial-in 1 (646) 960-0145; please use conference ID 9158079. The call will also be streamed on the Intrepid website, intrepidpotash.com. A recording of the conference call will be available approximately two hours after the completion of the call by dialing 1 (800) 770-2030 for toll-free, 1 (647) 362-9199 for toll-in, or at intrepidpotash.com. The replay of the call will require the input of the conference identification number 9158079. The recording will be available through March 14, 2023. About Intrepid Intrepid is a diversified mineral company that delivers potassium, magnesium, sulfur, salt, and water products essential for customer success in agriculture, animal feed, and the oil and gas industry. Intrepid is the only U.S. producer of muriate of potash, which is applied as an essential nutrient for healthy crop development, utilized in several industrial applications, and used as an ingredient in animal feed. In addition, Intrepid produces a specialty fertilizer, Trio®, which delivers three key nutrients, potassium, magnesium, and sulfate, in a single particle. Intrepid also provides water, magnesium chloride, brine, and various oilfield products and services. Intrepid serves diverse customers in markets where a logistical advantage exists and is a leader in the use of solar evaporation for potash production, resulting in lower cost and more environmentally friendly production. Intrepid's mineral production comes from three solar solution potash facilities and one conventional underground Trio® mine. Intrepid routinely posts important information, including information about upcoming investor presentations and press releases, on its website under the Investor Relations tab. Investors and other interested parties are encouraged to enroll at intrepidpotash.com, to receive automatic email alerts for new postings. Forward-looking Statements This document contains forward-looking statements - that is, statements about future, not past, events. The forward-looking statements in this document relate to, among other things, statements about Intrepid's future financial performance and cash flows, water sales, production costs, and its market outlook. These statements are based on assumptions that Intrepid believes are reasonable. Forward-looking statements by their nature address matters that are uncertain. The particular uncertainties that could cause Intrepid's actual results to be materially different from its forward-looking statements include the following: changes in the price, demand, or supply of our products and services; challenges and legal proceedings related to our water rights; our ability to successfully identify and implement any opportunities to grow our business whether through expanded sales of water, Trio®, byproducts, and other non-potassium related products or other revenue diversification activities; the costs of, and our ability to successfully execute, any strategic projects; declines or changes in agricultural production or fertilizer application rates; declines in the use of potassium-related products or water by oil and gas companies in their drilling operations; our ability to prevail in outstanding legal proceedings against us; our ability to comply with the terms of our revolving credit facility, including the underlying covenants; further write-downs of the carrying value of assets, including inventories; circumstances that disrupt or limit production, including operational difficulties or variances, geological or geotechnical variances, equipment failures, environmental hazards, and other unexpected events or problems; changes in reserve estimates; currency fluctuations; adverse changes in economic conditions or credit markets; the impact of governmental regulations, including environmental and mining regulations, the enforcement of those regulations, and governmental policy changes; adverse weather events, including events affecting precipitation and evaporation rates at our solar solution mines; increased labor costs or difficulties in hiring and retaining qualified employees and contractors, including workers with mining, mineral processing, or construction expertise; changes in the prices of raw materials, including chemicals, natural gas, and power; our ability to obtain and maintain any necessary governmental permits or leases relating to current or future operations; interruptions in rail or truck transportation services, or fluctuations in the costs of these services; our inability to fund necessary capital investments; the impact of global health issues, such as the COVID-19 pandemic and other global disruptions on our business, operations, liquidity, financial condition and results of operations; and the other risks, uncertainties, and assumptions described in Intrepid's periodic filings with the Securities and Exchange Commission, including in "Risk Factors" in Intrepid's Annual Report on Form 10-K for the year ended December 31, 2021, as updated by subsequent Quarterly Reports on Form 10-Q. In addition, new risks emerge from time to time. It is not possible for Intrepid to predict all risks that may cause actual results to differ materially from those contained in any forward-looking statements Intrepid may make. All information in this document speaks as of the date of this release. New information or events after that date may cause our forward-looking statements in this document to change. We undertake no duty to update or revise publicly any forward-looking statements to conform the statements to actual results or to reflect new information or future events. Contact:Evan Mapes, CFA, Investor Relations Manager        Phone: 303-996-3042Email: evan.mapes@intrepidpotash.com INTREPID POTASH, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2022 AND 2021 (In thousands, except share and per share amounts)     Three Months Ended December 31,   Year Ended December 31,       2022       2021       2022       2021   Sales   $         66,677             $         71,828             $         337,568             $         270,332           Less:                 Freight costs             6,880                       7,786                       34,137                       37,892           Warehousing and handling costs             2,526                       2,208                       9,747                       9,282           Cost of goods sold             31,620                       37,606                       152,276                       161,421           Costs associated with abnormal production             —                       2,379                       —                       5,973           Gross Margin             25,651                       21,849                       141,408                       55,764                             Selling and administrative             9,241                       5,705                       31,799                       23,998           Accretion of asset retirement obligation             490                       535                       1,961                       1,858           Loss (gain) on sale of assets             6,294                       18                       7,470                       (2,542 ) Other operating expense             3,499                       564                       4,738                       178           Operating Income             6,127                       15,027                       95,440                       32,272                             Other Income (Expense)                 Equity in earnings of unconsolidated entities             (77 )             —                       689                       —           Interest expense, net             (16 )             (42 )             (101 )             (1,468 ) Interest income             82                       —                       176                       —           Other income             24                       6                       305                       48           Gain on extinguishment of debt             —                       —                       —                       10.113           Income Before Income Taxes             6,140                       14,991                       96,509                       40,965                             Income Tax Benefit (Expense)             (2,158 )             208,869                       (24,289 )             208,869           Net Income   $         3,982             $         223,860             $         72,220             $         249,834                             Weighted Average Shares Outstanding:                 Basic             12,946,415                       13,129,081                       13,151,752                       13,098,871           Diluted             13,160,627                       13,440,708                       13,452,233                       13,391,362           Income Per Share:                 Basic   $         0.31             $         17.05             $         5.49             $         19.07           Diluted   $         0.30             $         16.66             $         5.37             $         18.66           INTREPID POTASH, INC.CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)AS OF DECEMBER 31, 2022 AND 2021(In thousands, except share and per share amounts)     December 31,       2022       2021 ASSETS         Cash and cash equivalents   $         18,514             $         36,452         Short-term investments             5,959                       —         Accounts receivable:         Trade, net             26,737                       35,409         Other receivables, net             790                       989         Inventory, net             114,816                       78,856         Other current assets             4,863                       5,144         Total current assets             171,679                       156,850                   Property, plant, equipment, and mineral properties, net             375,630                       341,117         Water rights             19,184                       19,184         Long-term parts inventory, net             24,823                       29,251         Long-term investments             9,841                       4,576         Other assets, net             7,294                       6,842         Non-current deferred tax asset, net             185,752                       209,075         Total Assets   $         794,203             $         766,895                   LIABILITIES AND STOCKHOLDERS' EQUITY                   Accounts payable   $         18,645             $         9,068         Income taxes payable             8                       41         Accrued liabilities             16,212                       22,938         Accrued employee compensation and benefits             6,975                       6,805         Other current liabilities             7,036                       34,571         Total current liabilities             48,876                       73,423                   Asset retirement obligation             26,564                       27,024         Operating lease liabilities             2,206                       1,879         Other non-current liabilities             1,479                       1,166         Total Liabilities             79,125                       103,492                   Commitments and Contingencies                   Common stock, $0.001 par value; 40,000,000 shares authorized:         and 12,687,822 and 13,149,315 shares outstanding         at December 31, 2022 and 2021, respectively             13              .....»»

Fixing The Incentives: How Fiat Funds National Corruption Authored by Jimmy Song via BitcoinMagazine.com, In the first two parts of this series, I wrote about the individual-level incentives and company-level incentives of fiat money. The individual-level incentives made personal lives have much higher time preferences through ubiquitous debt and lack of savings vehicles. The company-level incentives made communal life much more zombie-like and artificial through unnaturally-large companies that have replaced our families. In this essay, I'm exploring the incentives at the nation-state level, where fiat money has perhaps its greatest effect. The power of fiat money gives governments the ability to become more authoritarian. Not only do we get a welfare/warfare state, but we also get a surveillance state, a police state and militaristic, corrupt tyrannies. The siren song of Marxism, of positivist law and an authoritarian vision are some of its rotten fruits. The unprecedented destructive power of governments in the last 100 years can be laid squarely at the feet of fiat money. Government authority and power have expanded more than the average American's waistline and the consequences have been just as deadly. WITH GREAT POWER COMES GREAT RESPONSIBILITY The central control of money is an enormous prize, like the Infinity Gauntlet of Marvel fame, giving those in power the ability to steal the wealth of their nations at will. This isn't obvious at first because the mechanisms of central banking don't make this monetary power dynamic easy to understand. Central banking is thus very attractive to governments and pretty much all fiat money since the 20th century has been of this type. The main beneficiary of this obscured ability to print is the government that can run deficits on its budget. This was not the de facto practice historically as taking on debt under sound money is very expensive. Free market interest rates usually hover around 5.6% or higher, depending on the economic circumstances and credit worthiness. Taking on debt under sound money generally means really having to tighten budgets or raising taxes later, neither of which are popular. There's an opportunity cost to spending that's inherent in sound money that more or less disappears under fiat money. The major budget battles in the past used to be about trade-offs of various budget items. Under fiat money, budget battles are about who will get to hand out more rent-seeking positions. Running a deficit means that hard choices don't have to be made. Instead of having to choose between high-interest debt, increased taxes or budget cuts, fiat money lets governments avoid all three with an additional option: implicit taxation through inflation in the form of low-interest, easily-renewed debt! The ability to run a deficit not only throws all discipline out the window, but it lets the people in charge use that money for the thing that people in charge tend to care about: staying in power. Hence, policies that favor certain constituencies or even straight up bribes proliferate. The power of controlling money is great and, unlike Spiderman, governments don't use this power with much responsibility as can be seen in how they run themselves. STAYING IN POWER Governments, no matter what form they take, have as a major priority the goal of staying in power. This is true not only of dictatorships, but also of representative democracies. The differences between them are the means employed. A dictatorship may arrest, jail and kill political dissidents. A representative democracy may give new entitlement benefits to political allies. The goal in each case is to neutralize threats to continued rule and to strengthen the government's supporters. What fiat money does to this desire is give those in power many more options. Under sound money, budgets had to be balanced, meaning that for every program that spent money, there had to be some revenue generator, such as taxes, to compensate. Generally, taxes are unpopular and too many taxes will cause a populace to revolt, which risks losing power. Fiat money is thus a godsend to those in power as it avoids making taxes explicit. With this power of money printing, those in power can benefit themselves in various ways, which we turn to now. ENTITLEMENTS Governments can provide benefits to various constituents to get their support. This can include everything from healthcare to food to pensions. Indeed, since the advent of fiat money, these entitlements have become common all over the world. They are generally sold to the public as a form of compassion and they're very popular due to the perception that they're "free." The hidden taxation of inflation is rarely even acknowledged, let alone blamed. The problem with welfare is that it becomes a cost center that grows uncontrollably. In the past, welfare recipients could only get what the government could afford within a budget. It had to be restrained and traded off against lots of other budget items. With fiat money, however, the welfare benefits never really stop growing. Fiat money funds entitlements, which enter the economy and causes the prices of everything else to rise. Soon, the benefits have to compensate for the loss in purchasing power which adds even more fiat money into the economy which causes the prices to go higher and so on. Social security, for example, started as a tiny program relatively in the U.S. budget. It's currently 21% of the budget and has grown enormously as more and more generous benefits have been granted. Similar programs like Medicare continue to grow. Food stamps covered three million people in 1969 and covered 15 million by 1974 and some 42 million today. We're well past the point where self-interested voting will guarantee escalation of money printing. The problem is that there's no political will to stop entitlement programs because they induce dependency. Dependent people are loyal and will keep the government in power. Thus, the only ways in which these programs expire is either through hyperinflation or through externally-imposed budget constraints. The latter is imposed by quasi-international organizations like the IMF, BIS and the World Bank. And indeed, that's the topic of the next essay, but in the event of hyperinflation, everything is thrown into chaos. This is an all too common economic result for many countries around the world, particularly those that don't have great relationships with the U.S. POLICE STATE Another usage of fiat money for political power is in the enhancement of the police state. Staying in power requires a lot of vigilance and watching for would-be revolutionaries is part of every government's agenda. Fiat money has several mechanisms for doing this. First, as fiat money is increasingly digital, governments can restrict its movement for those that are in opposition. Taking away bank accounts is a relatively cheap way for governments to defund their opposition. Many human rights activists around the world have felt the choking hand of government constriction over their money. Second, fiat money can fund direct surveillance. Governments have many programs for tracking individuals and from their points of view, surveillance is a small price to pay to prevent being overthrown. Surveillance is very difficult and costly, requiring a lot of technology and personnel, but since it's such a critical part of staying in power, governments will pay for it, inflating their own currencies to do so. Third, fiat money can fund more police and military. These are some of the most expensive budget items yet those in power will deficit spend to build these up. The reason is because they're insurance against any sort of coup. The ability to deficit spend means those in power can make an unnaturally large police and military to impose their rule. It's a terrible use of resources, especially in poorer places, but that's the power that fiat money gives, the ability to spend the resources of an entire country in whatever way the leaders want. The military can also be used for conquest outside the country's borders and that's what we turn to now. WAR Thus far, we've discussed the various ways in which governments can use fiat money to defend internal threats against their rule. The other major threat to staying in power are external threats, which take the form of other governments wanting to topple your country. Defending against external threats means building up the military, especially through highly-destructive weapons like nuclear warheads. Thus, many countries use fiat money to build up their militaries. While the military build up prevents smaller skirmishes, when war breaks out, there's a quick degeneration into total war. Under fiat money, war can be escalated easily through money printing. This is because the normal backstop of financial bankruptcy no longer exists. Because fiat money removes normal financial considerations, wars generally bring entire countries' economies into the war effort. Thus, wars are often waged until one side is completely destroyed. We saw this in action in both world wars where both sides went to total war, putting all resources of an economy toward the war effort and destroying a significant portion of civilization. RENT-SEEKING JOBS The final use of fiat money for staying in power is bribery. We usually think of bribery going the other way, where people in industry bribe officials in government for special favors. And indeed, that still happens, but what governments do is in many ways worse. They use fiat money to buy votes. In a sense, entitlements are a form of that, but more effective is bringing more people into government itself. Especially in countries with chronic unemployment, giving favored constituencies jobs is a much more effective way of ensuring loyalty. Combined with a moral imperative to take on more responsibility, governments can grow very large just in personnel. For example, about one third of Lebanon's active population is employed in civil service. Is it any wonder they are suffering from hyperinflation? Most of these people are rewarded more for their loyalty than for any functions they perform for the government, so they can rightfully be described as rent seekers. ENORMOUS GOVERNMENT In part two of this series, I showed how fiat money fuels the growth of large companies. The same dynamic supercharges the growth of the government, except instead of commercial banks that give the government large loans, it's the central bank. The dynamic is all the more potent as government is a natural monopoly and there's no pesky need to make a profit. The government grows like cancer well beyond levels necessary to fulfill the functions that it's assigned itself. The access to money for a government is even greater than for corporations and thus, governments grow by leaps and bounds through a few different mechanisms. Fiat money is the fertilizer on a fresh field getting invaded by the weeds of government. The first and most obvious way governments grow is through taking on more responsibility. As we'll see, there's a moral imperative for governments to provide solutions to any and all problems. Hence, the responsibilities it assigns itself grows ever larger. A taken responsibility, like creating enough energy for the country, becomes its own regulatory complex. Anything perceived to be too risky for the market, or uneconomical, are natural places where the government steps in. Thus, we get stuff like national flood insurance and rural electrification. Even if the government does a good job, these programs likely lose a lot of money, because if they made money, private industry would be all over them. The more likely scenario is that the government not only loses lots of money, but also does a poor job. A second way governments grow is through nationalization. Subsidizing large zombie companies is a normal part of a fiat economy, but at a certain point, their finances get so deep in the red that they can't get loans from commercial banks. At this point when serious money is required, governments often step in to provide bailouts. A government bailout necessarily means more say by the government, eventually to the point where the company will now belong to the government. Nationalization is the natural end of fiat companies. Bailouts are not the only path to nationalization, however. If an industry is perceived to be unfair in some way or if there's a sufficient war emergency, that industry may just be taken over by force. A third way governments grow is through bureaucratic bloat. Especially in poorer countries where there isn't much industry, creating jobs tends to be a responsibility that the government takes on. As there are often not enough responsibilities, these become make-work jobs, which are naturally rent seeking. This is the administrative equivalent of digging ditches and filling them back in. It is to this final method of growth that we now turn. GOVERNMENTS, LIKE COMPANIES BUT WORSE Government jobs are supposed to serve the country, by performing functions like adjudication, defense and infrastructure. These require some organization and, given that it's the government paying these people, such jobs are sought after. The reason is that generally, government jobs are very hard to get fired from. As I mentioned in the last essay, organizations past Dunbar's number have major disadvantages and governments, being even bigger than companies, have great disadvantages in this regard. In particular, it's very difficult for those in charge to know what the workers are doing and rent seeking in such organizations tends to proliferate. Further, there's little incentive for managers to even care about employee performance as there is no direct feedback from the market. The goods and services provided by the government aren't market driven and require election waves or regime changes for even a small amount of change. Hence, the only way that such rent seekers lose their jobs is through some form of political upheaval. The job security inherent in government work makes them very attractive, even if they don't pay as much as industry. As mentioned in the last essay, companies provide a lot of benefits besides salary and this is generally true of government as well. Health insurance, unemployment insurance, pensions, etc. are all available to government workers. Add job security, even for some of the worst performers, and we get a clamor for these jobs, especially in places where unemployment is high. This, combined with a government's desire to stay in power, generally means a gigantic bureaucratic bloat. Because fiat money obviates the need for any sort of fiscal discipline, jobs are handed out to politically-connected people. These might be political supporters, relatives or perhaps even former political opponents. Political problems are often easily solved by bribes, and these bribes can take the form of government jobs and, of course, bribes are funded by fiat money. The only limitation on the growth of government is hyperinflation, which is essentially the death of an economy. The cancer can only grow as long as the host is alive. NOT PRICE SENSITIVE The cancer of government waste spreads to companies through the procurement of goods and services. Not all government functions are performed by the government directly. For example, they don't generally produce their own computers or cell phones, so contracts to buy these are again extremely lucrative opportunities for corruption. The reason for external procurement is obvious: Government-created goods and services tend to be much poorer quality than their private industry equivalents. Just go to your local motor vehicle bureaucrat to see how poor government services can be. Thus, governments will contract out for a lot of goods and services they don’t offer on their own. These contracts are extremely valuable and there are many rent-seeking companies that sell exclusively to government. Many are defense contractors, but they can be everything from event planners, hardware vendors, food services and pretty much anything you can think of. The key here is that governments can deficit spend and aren't particularly worried about price. Laws and regulations may be written to try to get the government to care about price, but in practice, the budgets tend to be massively bloated. This was the case in one of the biggest IT disasters we've seen from the government, healthcare.gov. The website was one of the many parts of the legislation colloquially called “Obamacare.” To get people to sign up, The government spent over $1.7 billion to build this website. If this sounds like a lot of money, it is, and we'll get to just how bloated a bit later, but massive bloat is not unusual for government spending. The healthcare.gov website was contracted to a firm in September 2011. After launch, America found out that the website couldn't handle even 50 concurrent users and that the site was completely unusable. The Obama White House got into a panic and put people on the case to fix the problem. After finding out that the system was built extremely poorly and that they needed people from the outside to fix it, they hired some software engineers from Silicon Valley. They managed to get the website up and running, but it was a Herculean task, requiring months of startup-level hours from some of the most talented programmers in the country to fix. A normal website like that takes anywhere from $3 to $10 million and private industry builds them on timelines much shorter than the 24 months government contractors were given. That's how inefficient government is and how little they care about cost. The power of money printing has given them so much leeway that they spent 10-times the time and 100-times the budget of people who were actually competent. This was a high-profile failure, so it's easy to dismiss it as a one-off, but even if other parts of government are five times more efficient than the healthcare fiasco, there are a great amount of resources that are at minimum being mismanaged and wasted by the government. Think about how these resources would be used by the free market! Think about how much prosperity such resources could be used for. Instead, they're being wasted on bureaucracy, rent seeking, cronyism, corruption and embezzlement. MORAL OBLIGATIONS OF FIAT MONEY The ability to print money also has another effect on government: It increases the purview of government to be anything and everything. This is because it has the power of the money printer and can claim to use that to solve any problem. Indeed, this is what politicians promise. Morally, the logic is understandable. If you have the power to print money, that power should be used to relieve any and all suffering. Hence, there's a moral obligation to go solve any perceived problems and injustices. If someone is suffering, the government has an obligation now to step in. If someone is poor or disabled or sick or oppressed, the government has an obligation to fix it. There's no real limit to the government anymore because the government operates in a Keynesian fantasy. Governments think there are no tradeoffs to creating new money. Instead of measuring the good of one program versus another, which is what you're forced to do with a normal budget, there's just more money that can be printed to solve the problem through deficit spending. Thus, there are no personal problems anymore. All problems belong to the government. More people will eschew personal responsibility because the government has the power of money printing and that power gives them the power and responsibility to give the people a good life. Of course, this is a lie as there are tradeoffs. The value from printed money comes from savers and all of these government programs come at a cost of things that would empower individuals instead. A TREND TOWARD STANDARDIZATION Solving problems for people at a national scale tends toward one-size-fits-all solutions. The scale that companies have to operate at is large, but for a government, the scale is even larger. Combined with the monopoly and the long feedback loops from the market for government services, personalization of any kind gets thrown to the wayside. Big companies also operate this way, which is why the modern world feels so impersonal. We're being treated by companies and governments as interchangeable parts. The education system is a case in point. For government and companies to run reasonably, each person has to be a cog in the wheel that can be replaced. An irreplaceable part doesn't scale. Thus, corporate and government roles are very standardized and the education system facilitates this by churning out cog pieces. If you're an accountant, you can fit into many different companies. An engineer, the same thing. Indeed, many of these roles are protected by government regulation. Further, the process of being formed into these cog parts has implicitly given governments unprecedented authority. The government determines who can do what through licensing, from cutting hair to selling real estate. The government controls the supply of various professions and we get artificial restrictions on some of the most desirable jobs. Because we have been made to be cogs in a system, there's also a strong government tendency to standardize in other ways. TENDENCY TOWARD TYRANNY Given all the money available, and the moral responsibility they've taken on, most government leaders start working toward their version of utopia. Once they've been given a moral imperative of fixing all problems, it's a short step to directing all of this effort toward some sort of perceived ideal. Here's the problem: The ideal requires significant social engineering to make it work. And that social engineering quickly leads to totalitarianism. Nazi Germany and the USSR were two examples of countries that tried to usher in a utopia through totalitarianism. The massive human suffering that resulted was funded by fiat money. Of course, not every government will end up killing millions, but governments will want to control the behaviors of their people to aid in the bringing about of their utopia. The usual strategy to socially engineer a society toward a particular vision is to convince people of the righteousness of these outcomes. Propaganda is an outgrowth of this desire to control and the means, of course, are fiat money. Propaganda is the one thing governments tend to be good at because that's how those in power got into power in the first place. In addition, fiat money gives governments the ability to control behavior without obviously totalitarian laws. By paying for the outcomes they want, they can socially engineer their nations toward the outcome the authorities want through economic incentives. For example, healthcare can be a direct benefit, which would mean conscripting a lot of doctors and medical equipment and facilities. This tends to not work very well, as government management tends to run such systems badly. But by providing fiat money, the tyranny is more obscured. Government dependency increases and we head toward a totalitarian state through the back door. BITCOIN FIXES THIS Bitcoin fixes these incentives because the government no longer has the incredible power of money printing. Deficit spending becomes more expensive and thus less used. The apparatus of government will become much smaller simply because they'll be constrained by individuals sovereign over their own wealth. No longer will there be the option of stealth theft via inflation. The Infinity Gauntlet will be destroyed. The apparatus of government, including entitlements, bureaucracy and the military industrial complex will be sharply curtailed. The unpopularity of explicit taxation will shrink the public sector and the rent-seeking jobs that come with it. Tyranny will be limited because governments won't be able to induce dependence with endless money printing. As such, everything will get less political as politics won't be in everything. The moral imperative of government will no longer be to solve everyone's problems because their limitations will be obvious. This will reduce the role of government, especially in the sphere of moral demands. Instead of some authoritarian ideal, we'll get to live our own dreams and set our own goals. Bitcoin is freedom from tyranny. Tyler Durden Sun, 03/05/2023 - 08:10.....»»

Largest US Grid Supplier Warns Of An Energy Shortage Due To Undeliverable Mandates Authored by Mike Shedlock via MishTalk.com, Let's discuss the warnings of PJM Interconnect, the operator of the nation's largest competitive market for electricity. Before reviewing the PJM Interconnect February 2023 report, let's take a look at policies and regulations. Policies and Regulations EPA Coal Combustion Residuals (CCR): The U.S. Environmental Protection Agency (EPA) promulgated national minimum criteria for existing and new coal combustion residuals (CCR) landfills and existing and new CCR surface impoundments. This led to a number of facilities, approximately 2,700 MW in capacity, indicating their intent to comply with the rule by ceasing coal-firing operations, which is reflected in this study. EPA Effluent Limitation Guidelines (ELG): The EPA updated these guidelines in 2020, which triggered the announcement by Keystone and Conemaugh facilities (about 3,400 MW) to retire their coal units by the end of 2028. 14 Importantly, but not included in this study, the EPA is planning to propose a rule to strengthen and possibly broaden the guidelines applicable to waste (in particular water) discharges from steam electric generating units. The EPA is expecting this to impact coal units by potentially requiring investments when plants renew their discharge permits, and extending the time that plants can operate if they agree to a retirement date. EPA Good Neighbor Rule (GNR): This proposal requires units in certain states to meet stringent limits on emissions of nitrogen oxides (NOx), which, for certain units, will require investment in selective catalytic reduction to reduce NOx. For purposes of this study, it is assumed that unit owners will not make that investment and will retire approximately 4,400 MW of units instead. Please note that the EPA plans on finalizing the GNR in March, which may necessitate reevaluation of this assumption. Illinois Climate & Equitable Jobs Act (CEJA): CEJA mandates the scheduled phase-out of coal and natural gas generation by specified target dates: January 2030, 2035, 2040 and 2045. To understand CEJA criteria impacts and establish the timing of affected generation units’ expected deactivation, PJM analyzed each generating unit’s publicly available emissions data, published heat rate, and proximity to Illinois environmental justice communities and Restore, Reinvest, Renew (R3) zones. For this study, PJM focuses on the approximately 5,800 MW expected to retire in 2030.  Solar Projects On Hold Next, consider the Inside Climate News report The Largest U.S. Grid Operator Puts 1,200 Mostly Solar Projects on Hold for Two Years The nation’s largest electrical grid operator has approved a new process for adding power plants to the sprawling transmission system it manages, including a two-year pause on reviewing and potentially approving some 1,200 projects, mostly solar power, that are part of a controversial backlog. Over the last four years, PJM officials have said they have experienced a fundamental shift in the number and type of energy projects seeking to be added to a grid, each needing careful study to ensure reliability. It used to be that PJM would see fewer, but larger, fossil fuel proposals. Now, they are seeing a larger number of smaller, largely renewable energy projects. A new approval process will put projects that are the readiest for construction at the front of the line, and discourage those that might be more speculative or that have not secured all their financing. Then, an interim period will put a two-year delay on about 1,250 projects in their queue—close to half of the total—and defer the review of new projects until the fourth quarter of 2025, with final decisions on those coming as late as the end of 2027.  Energy Transition in PJM Now let's now take a look at Energy Transition in PJM: Resource Retirements, Replacements & Risks released February 24, 2023. Our research highlights four trends below that we believe, in combination, present increasing reliability risks during the transition, due to a potential timing mismatch between resource retirements, load growth and the pace of new generation entry under a possible “low new entry” scenario: The growth rate of electricity demand is likely to continue to increase from electrification coupled with the proliferation of high-demand data centers in the region. Retirements are at risk of outpacing the construction of new resources, due to a combination of industry forces, including siting and supply chain, whose long-term impacts are not fully known. PJM’s interconnection queue is composed primarily of intermittent and limited-duration resources. Given the operating characteristics of these resources, we need multiple megawatts of these resources to replace 1 MW of thermal generation.  The analysis shows that 40 GW of existing generation are at risk of retirement by 2030. This figure is composed of: 6 GW of 2022 deactivations, 6 GW of announced retirements, 25 GW of potential policy-driven retirements and 3 GW of potential economic retirements. Combined, this represents 21% of PJM’s current installed capacity. In addition to the retirements, PJM’s long-term load forecast shows demand growth of 1.4% per year for the PJM footprint over the next 10 years. Due to the expansion of highly concentrated clusters of data centers, combined with overall electrification, certain individual zones exhibit more significant demand growth – as high as 7% annually. For the first time in recent history, PJM could face decreasing reserve margins should these trends continue. The amount of generation retirements appears to be more certain than the timely arrival of replacement generation resources and demand response, given that the quantity of retirements is codified in various policy objectives, while the impacts to the pace of new entry of the Inflation Reduction Act, post-pandemic supply chain issues, and other externalities are still not fully understood.  Recent movement in the natural gas spot markets across the U.S. and Europe add another degree of uncertainty to future operations. In 2022, European natural gas supply faced many challenges resulting from the war in Ukraine and subsequent sanctions against Russia. Liquefied natural gas (LNG) imports into the EU and the U.K. in the first half of 2022 increased 66% over the 2021 annual average, primarily from U.S. exporters with operational flexibility. This international natural gas demand is a new competitor for domestic spot-market consumers, resulting in significantly higher fuel costs for PJM’s natural gas fleet.  Along with the energy transition, PJM is witnessing a large growth in data center activity. Importantly, the PJM footprint is home to Data Center Alley in Loudoun County, Virginia, the largest concentration of data centers in the world. PJM uses the Load Analysis Subcommittee (LAS) to perform technical analysis to coordinate information related to the forecast of electrical peak demand. In 2022, the LAS began a review of data center load growth and identified growth rates over 300% in some instances.  Additionally, PJM is expecting an increase in electrification resulting from state and federal policies and regulations. The study therefore incorporates an electrification scenario in the load forecast to provide insight on capacity need should accelerated electrification drive demand increases. Impacts of Electrification and Data Center Loads What Does This Mean for Resource Adequacy in PJM? Combining the resource exit, entry and increases in demand, summarized in Figure 7, the study identified some areas of concern. Approximately 40 GW PJM’s fossil fuel fleet resources may be pressured to retire as load grows into the 2026/2027 Delivery Year.  The projected total capacity from generating resources would not meet projected peak loads, thus requiring the deployment of demand response. By the 2028/2029 Delivery Year and beyond, at Low New Entry scenario levels, projected reserve margins would be 8%, as projected demand response may be insufficient to cover peak demand expectations, unless new entry progresses at a levels exhibited in the High New Entry scenario. This will require the ability to maintain needed existing resources, as well as quickly incentivize and integrate new entry    The 2024/2025 BRA, which executed in December 2022, highlighted another area of uncertainty. Queue capacity with approved ISAs/WMPAs is currently very high, approximately 35 GW-nameplate, but resources are not progressing into construction. There has only been about 10 GW-nameplate moving to in service in the past three years. There may still be risks to new entry, such as semiconductor supply chain disruptions or pipeline supply restrictions, which are preventing construction despite resources successfully navigating the queue process.    About that Queue After applying the logistical regression model for 10 years of historical project completion (Y-queue to present) without project stage, approximately 15.3 GW-nameplate/8.7 GW-capacity were deemed commercially probable out of 178 GW of projects examined.  The model results for thermal resources were reasonably in line with expectations. However, the model produced extremely low entry from onshore wind, offshore wind, solar, solar-hybrid and storage resources.   Mish Synopsis  Expect to pay much higher prices for electricity  Expect brownouts Expect missed targets  Expect most of the thousands of project requests on hold to be economically unviable. Expect many economically unviable projects to continue anyway paid for by taxpayer subsidies. Expect much higher inflation.  Don't expect any of this to do a damn thing for the environment. Question of the Day - How Fast Will the Shift to EVs happen? In case you missed it, please consider Question of the Day - How Fast Will the Shift to EVs happen? The faster the shift, the higher and faster the inflation. *  *  * Please Subscribe to MishTalk Email Alerts. Tyler Durden Wed, 03/01/2023 - 11:45.....»»

Continued progress in ongoing Phase 1/2 PYNNACLE study of PC14586, a first-in-class precision oncology investigational therapy in patients with advanced solid tumors with a p53 Y220C mutation; PMV expects to provide next clinical update in 2H 2023 Enrolled first patient in combination arm of the PYNNACLE study with PC14586 and KEYTRUDA® (pembrolizumab) Cash, cash equivalents, and marketable securities of $243.5 million as of December 31, 2022 PRINCETON, N.J., March 01, 2023 (GLOBE NEWSWIRE) -- PMV Pharmaceuticals, Inc. (NASDAQ:PMVP), a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53, today reported financial results for the full year ended December 31, 2022, and provided a corporate update. "Our team successfully delivered on key clinical development milestones in 2022, highlighted by the preliminary monotherapy data from the ongoing PYNNACLE study, and the initiation of a separate combination arm of PC14586 with KEYTRUDA," said David Mack, Ph.D., President and Chief Executive Officer. "The initial PC14586 data have demonstrated clinical proof of concept for PC14586 as a monotherapy to selectively reactivate p53 across multiple tumor types. In alignment with FDA draft guidance on Project Optimus, we continue to enroll additional patients in the PYNNACLE study and intend to provide a comprehensive clinical and regulatory update, including our recommended Phase 2 dose, in the second half of 2023."   Full Year 2022 and Recent Corporate Highlights: Preliminary results from the ongoing Phase 1/2 PYNNACLE study of PC14586 in patients with advanced solid tumors harboring a p53 Y220C mutation were featured in an oral presentation at the American Society of Clinical Oncology (ASCO) 2022 Annual Meeting. Patient enrollment in PYNNACLE continues on track. Enrolled the first patient in a combination arm of the PYNNACLE study evaluating PC14586 in combination with KEYTRUDA® (pembrolizumab) in patients with advanced solid tumors harboring a p53 Y220C mutation. PMV and Merck entered into a collaboration in 2022 under the terms of which Merck will supply KEYTRUDA for this study. Appointed Kirsten Flowers and Carol Gallagher, Pharm.D. to the Board of Directors. Ms. Flowers and Dr. Gallagher each bring decades of experience in drug development and commercialization. Promotion of Michael Carulli to Senior Vice President, Finance. Mr. Carulli joined PMV in 2020 and has made significant contributions in building the finance function as the company transitioned to becoming a publicly traded company. Primary focus on the clinical development of PC14586 and the pipeline program R282W. The WIP-1 and R273H programs have been put on hold which we expect will extend the company's projected cash runway to 1H 2025. Global headquarters moved to Princeton, NJ. Fiscal Year 2022 Financial Results As of December 31, 2022, PMV Pharma had $243.5 million in cash, cash equivalents, and marketable securities, compared to $314.1 million at December 31, 2021. Net cash used in operations was $63.8 million for the year ended December 31, 2022, compared to $46.6 million for the year ended December 31, 2021. Net loss for the year ended December 31, 2022, was $73.3 million compared to $57.8 million for the year ended December 31, 2021. Research and development (R&D) expenses were $52.0 million for the year ended December 31, 2022, compared to $36.5 million for the year ended December 31, 2021. The increase in R&D expenses was primarily related to increased headcount and clinical expenses for advancing PC14586, the Company's lead drug candidate. General and administrative (G&A) expenses were $25.1 million for the year ended December 31, 2022, compared to $21.8 million for the year ended December 31, 2021. The increase in G&A expenses was primarily due to expanding the infrastructure necessary for operating as a public company. KEYTRUDA®  (pembrolizumab)  is a registered trademark of Merck Sharp & Dohme LLC., a subsidiary of Merck & Co., Inc., Rahway, NJ, USA. About PC14586 PC14586 is a first-in-class, small molecule, p53 reactivator designed to selectively bind to the crevice present in the p53 Y220C mutant protein, hence, restoring the wild-type, or normal, p53 protein structure and tumor-suppressing function. The U.S. Food and Drug Administration granted Fast Track designation to PC14586 for the treatment of patients with locally advanced or metastatic solid tumors that have a p53 Y220C mutation. For more information about the Phase 1/2 PYNNACLE trial (PMV-586-101), refer to www.clinicaltrials.gov (NCT study identifier NCT04585750). About PMV Pharma PMV Pharma is a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53. p53 mutations are found in approximately half of all cancers. The field of p53 biology was established by our co-founder Dr. Arnold Levine when he discovered the p53 protein in 1979. Bringing together leaders in the field to utilize over four decades of p53 biology, PMV Pharma combines unique biological understanding with pharmaceutical development focus. PMV Pharma is headquartered in Princeton, New Jersey. For more information, please visit www.pmvpharma.com. Forward-Looking Statements Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include, but are not limited to, statements regarding the Company's future plans or expectations for PC14586, including expectations regarding progress and timing for its Phase 1 update for the PYNNACLE study and its Phase 1/2 combination trial of PC14586 and KEYTRUDA, as well as expectations regarding the success of its current clinical trial for PC14586 and any future commercialization plans for the product candidate, and its guidance on its expected cash runway. Any forward-looking statements in this statement are based on management's current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. Risks that contribute to the uncertain nature of the forward-looking statements include: the success, cost, and timing of the Company's product candidate development activities and clinical trials, the Company's ability to execute on its strategy and operate as an early clinical stage company, the potential for clinical trials of PC14586 or any future clinical trials of other product candidates to differ from preclinical, preliminary or expected results, the Company's ability to fund operations, and the impact that the current COVID-19 pandemic will have on the Company's clinical trials, supply chain, and operations, as well as those risks and uncertainties set forth in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 1, 2023, and its other filings filed with the SEC. All forward-looking statements contained in this press release speak only as of the date on which they were made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. PMV Pharmaceuticals, Inc.Balance Sheets(in thousands)     December 31,2022.....»»

Moving equipment to Ukraine amid the war "has proved to be very, very difficult," the head of US Special Operations Command Europe said in September. Ukrainian, Romanian, and US Army Special Forces soldiers conduct close-quarters-battle training in Romania in May 2021.Romanian army/Capt. Roxana Davidovits The challenges of waging modern warfare are on vivid display in Russia's ongoing attack on Ukraine. A less visible aspect has been the need for a robust logistical network to sustain frontline forces. For US special operators, the war is a reminder that such a network won't always be available. Russia's invasion of Ukraine has brought renewed attention to the challenges of a large-scale, nation-on-nation conventional conflict.After a year of fighting, the world has learned a lot about what it takes to wage modern war. Ukraine thwarted Russia's initial attack and, with extensive Western support, has driven Russia's forces back. Russia continues to struggle to achieve its objectives despite reducing its ambitions after the first few months of the war. So far, Moscow has lost an estimated 200,000 troops.Access to heavy weapons, ample ammunition, and a will to fight among troops have been important elements in each side's performance, as has the ability to set up an effective logistics enterprise.According to US special-operations leaders in Europe, Russia's logistical struggles in Ukraine have shown that in a major war, US commandos will to live without the logistical "tethers" they've relied on in past conflicts.Logistics and UkraineUkrainian soldiers reload a Grad multiple-launch rocket vehicle in the Donetsk Oblast in November.Diego Herrera Carcedo/Anadolu Agency via Getty ImagesUS Air Force Maj. Gen. Steven Edwards, commander of Special Operations Command Europe, outlined some of SOCEUR's lessons learned from Ukraine during an event hosted by the New America think tank in September.Edwards said that one of his command's biggest hurdles to being more effective in Ukraine has been finding ways to support Ukrainian forces remotely, as US troops were withdrawn from the country shortly before Russia attacked."Trying to get equipment and resourcing in to our partners has proved to be very, very difficult," Edwards said, pointing to the logistics required "to actually move it from one country inside Ukraine."One of the major logistical hurdles Ukrainian forces face is getting the right munitions and spare parts at the front. Over the past year, scores of Western nations have sent Ukraine billions of dollars in military gear and other assistance.Ukrainian troops now use an array of weapons that require different ammunition and have different maintenance needs, so the Ukrainian military's logisticians have had to be very organized and maintain good situational awareness of what equipment is needed where and went it is needed.For example, sending Western-made 155 mm ammunition to a unit that has 152 mm howitzers, which for decades was Ukraine's standard howitzer caliber, would be a waste of time and resources.Logistics and special operatorsRomanian, Ukrainian, and US Army Green Berets conduct close quarters battle training in Romania in May 2021.Romanian army/Capt. Roxana DavidovitsAt the same event, Michael Repass, who commanded SOCEUR before retiring from the US Army as a major general, also highlighted the importance of logistics not only for special-operations forces but also for militaries facing bigger, better-armed opponents."We know that logistics matters. It's very interesting to see SOF guys talking about how important logistics are," Repass said. "Stockpiling material to defend your nation has become an imperative for small nations in conflict with big states."Indeed, Russia's struggles in Ukraine are showing US commandos that in a conflict with a near-peer force like Russia and China, they will need to live without the stockpiles and short supply lines they were accustomed to during the war on terror.For US special-operations units, logistical demands in a conflict "would largely depend on the unit and the mission," a US Army Special Forces soldier in a National Guard unit told Insider.US special-operations forces "are designed to operate deep behind enemy lines in often austere environments with little to no support for outside. We are trained and mentally prepared to fight without much logistical support," said the Green Beret, who was granted anonymity to discuss potential future operations.Ukrainian troops train to clear a trench with guidance from US soldiers at a training center in Yavoriv, Ukraine in June 2017.US Army/Sgt. Anthony JonesGetting supplies to US special operators in the Indo-Pacific region would more challenging time the closer they are to China because of the weaponry China has developed to deny its rivals access to parts of the region, such as the South China Sea. The US Army is the service responsible for logistics across the Indo-Pacific area of operations."Again, depending on the unit and the mission, we will require some sort of logistical support eventually. That's where our relationships with the conventional military and any partner forces will be key," the Green Beret added.US Special Operations Command is trying to address the challenge of getting supplies to the frontline by pursuing what one SOCOM official described as "untethered logistics."SOCOM is considering new technology and other means would allow it to push supplies to special operators in austere environments or to enable those troops to produce what they need where they are. Some of the technology in the works involves 3D printing, which could allow frontline commandos to produce much-needed ammunition and spare parts on their own.Military logistics is not as sexy as some of the weapons and operations on display in Ukraine, but the war there has shown that it is as important to battlefield success as ever.Stavros Atlamazoglou is a defense journalist specializing in special operations, a Hellenic Army veteran (national service with the 575th Marine Battalion and Army HQ), and a Johns Hopkins University graduate. He is working toward a master's degree in strategy and cybersecurity at Johns Hopkins' School of Advanced International Studies.Read the original article on Business Insider.....»»

Time and time again, Tesla's CEO has said that it's right on the brink of solving self-driving tech. Experts have their doubts. Getty; Marianne Ayala/Insider Elon Musk has made developing autonomous driving technology one of Tesla's fundamental goals.  For years, he's said that Teslas are just a software update away from driving themselves.  Some automated driving experts think Tesla won't solve self-driving in the near future.  Elon Musk has spent much of the last decade assuring and reassuring customers and investors that driverless Teslas are right around the corner. Spoiler alert: You still can't take a snooze at the wheel or watch TikTok in traffic. There was the press conference in 2016 when Musk predicted that Tesla would send a car from Los Angeles to Times Square without human input by the following year. Then in 2019, he said he felt "very confident" that, by 2020, Tesla owners who bought the pricey Full Self-Driving option would be able to dispatch their cars as robotaxis and rake in passive income from their couches. "Today it's financially insane to buy anything other than a Tesla," Musk said at an event touting the carmaker's autonomous-vehicle development in 2019. "It'll be like owning a horse in three years." That revolutionary software update never came, and by 2022 the goalpost for bringing self-driving cars to the masses had shifted to 2023. Meanwhile, Musk has doubled down on the importance of driverless tech, going so far as to say the carmaker will be "worth basically zero" if it can't crack autonomous driving. Over the years, Tesla has hiked the price of Full Self-Driving to a whopping $15,000.While it's made strides and released an audacious prototype version of Full Self-Driving that owners are testing around the country, Tesla still hasn't delivered on its core promise of making cars that drive themselves. Some automated driving experts think it won't happen anytime soon. Full Self-Driving is far from actually being self-driving, some sayDespite its branding, Tesla's Full Self-Driving Beta currently requires total driver supervision, just like cruise control or smarter features like Autopilot. Unlike those systems, which work on the highway, Full Self-Driving aims to operate anywhere people drive, from rural roads to chaotic city intersections and everywhere in between. Once software updates improve the system sufficiently, the idea is to convert the driver into a passenger. But according to Phil Koopman, an engineering professor at Carnegie Mellon University who specializes in autonomous vehicles, Full Self-Driving doesn't look nearly reliable enough to function safely without a driver, given the types of simple mistakes it's still making. If the system were as close to ready as Musk claims, it would stumble only once in a blue moon and exclusively in freak scenarios that might trip up a human driver, he told Insider. That's not yet the case. For all the impressive-looking videos shared online of the Beta smoothly traversing intersections and roundabouts, plenty of clips show a jerky system struggling with routine driving tasks like slowing for speed bumps and choosing the correct lane. That's not to mention numerous recent crashes involving Tesla's automated systems and stopped emergency vehicles that are under federal investigation. "Tesla keeps saying next year, and I still don't see any reason to believe that promise," Koopman said. "There's no reason to believe that something magic will happen this year that failed to happen the year before and the year before and the year before."Tesla's goal to flip a switch and deploy Full Self-Driving everywhere, without limits, is beyond a stretch and won't happen safely in the near future, Daniel McGehee, director of the University of Iowa's Driving Safety Research Institute, told Insider. Some companies, like Alphabet's Waymo and GM's Cruise, have launched autonomous taxis in the US, but only in specific parts of certain cities. Starting with a confined, predictable environment and expanding from there is the right move, McGehee said. "Automation is going to be incremental and not just ready one day," he said. Tesla did not return a request for comment. Musk's big bet on camerasTesla does things differently. That mentality started with its bet on electric vehicles and extends to the very core of its approach to autonomous driving.While rivals like Cruise and Waymo use detailed maps and an extensive array of sensors to help their vehicles navigate the world, Musk wants to simplify things. If humans can drive with eyes and a brain, cars should be able to drive themselves using cameras and computing power, Musk argues. Koopman calls that a "completely ridiculous analogy," given that machine-learning programs just do statistical analysis and can't truly understand situations like humans can. He thinks Tesla needs to significantly alter its approach to make self-driving happen. "Why would you want to tie one hand behind your back doing something that's nearly impossible?" Koopman said. Likewise, McGehee says self-driving cars need a combination of overlapping sensors — whether that's cameras, radar, lidar, or ultrasonic sensors — to move through the world safely. He stresses the importance of redundancy to students in his automated vehicle engineering course. To be sure, others aren't so quick to write off Tesla's way of doing things. Alain Kornhauser, director of the program in transportation at Princeton University, supports the vision-only approach and thinks Tesla is well on its way to autonomous operation. But, he says, self-driving anywhere all the time isn't realistic.What do owners think?Musk's ambitious promises and the real-world performance of Full Self-Driving have left some Tesla owners — who paid anywhere from $5,000 to $15,000 for the feature over the years — feeling frustrated and disappointed. Kenji, a 2019 Tesla Model X owner who withheld his last name to avoid online harassment from Tesla fans, said he shelled out for Full Self-Driving after hearing Musk talk up the system's imminent potential. Years later, the system frequently makes unsettling mistakes, leaving Kenji feeling "duped." Reporting that Tesla staged an infamous 2016 video touting its autonomous tech added insult to injury, he said. "I almost wish I could get a refund," he told Insider. "Because it's not ready, and I don't think it's going to be ready for a while."Nick Nicastro, a Tesla Model Y owner in Ohio, called the software "absolutely phenomenal" but said it occasionally botches basic maneuvers, forcing him to intervene. He's satisfied with the feature, but reckons it may be another decade or more before Tesla drivers can kick back while their cars do the work. "As good as it is, the idea of me not having a steering wheel there is many, many, many years away," he said.Are you a Tesla owner, employee, or FSD Beta tester with a story to share? Contact this reporter at tlevin@insider.comRead the original article on Business Insider.....»»

China's Central Bank Likely Owns 4,309 Tonnes Of Gold, More Than Double What Is Officially Disclosed By Jan Nieuwenhuijs, of Gainesville Coins According to my analysis, the Chinese central bank owned 4,309 tonnes of gold on December 31, 2022, which is more than double than what is officially disclosed. My estimate would make China the second largest gold reserve country after the US. The Chinese private sector holds 23,745 tonnes, bringing the total amount of gold in China to 28,054 tonnes. China and European countries are in agreement to equalize their ratios of monetary gold relative to GDP in order to prepare for a global gold standard. Introduction For estimating the true size of the gold reserves of the Chinese central bank (the People’s Bank of China, PBoC), we first need to make a clear distinction between monetary gold (owned by a central bank) and non-monetary gold (owned by the private sector). Without getting into the exact mechanics of the Chinese gold market here, suffice to say that only non-monetary gold imports into China are publicly disclosed. These imports are required to be sold first through the Shanghai Gold Exchange (SGE), and for tax and liquidity reasons virtually all other supply (mine and recycled gold) in China is sold through the SGE as well. On the demand side, private market participants acquire gold at the SGE. It’s unlikely the PBoC buys at the SGE. Any analysis about the PBoC’s gold reserves based on known import numbers and domestic mine supply is flawed, therefore. It’s true that in the past the PBoC was the primary gold dealer in China—being the monopoly wholesale buyer and seller—but this has changed since the Chinese gold market was liberalized with the launch of the SGE in 2002. These are the reasons why the PBoC doesn’t buy gold on the SGE: The PBoC wants to diversify its foreign exchange reserves—worth more than $3 trillion at the time of writing—by buying gold mainly with US dollars. Gold on the SGE is exclusively quoted in renminbi: not suitable for the PBoC. As we shall see the PBoC prefers to buy gold covertly. If it buys gold abroad with US dollars, the monetary gold is exempt from being reported in international customs data when crossing borders (non-monetary gold is not exempt). Buying abroad allows the PBoC to purchase and repatriate gold without leaving a trace in the public realm. Gold on the SGE often trades at a premium. The PBoC is more likely to buy gold that is priced lower abroad. In 2015 I was in contact with a precious metals trader at a large Chinese state owned bank. He told me that the PBoC buys gold through Chinese proxy banks, such as the one he worked for, in the global OTC market from bullion banks and refineries in, for example, South Africa and Switzerland. Not at the SGE. Another person I had the opportunity to converse with in 2015, let’s call him Mister-X, worked at one of the big consultancy firms. He was well connected in the industry. Somewhat similar to my Chinese source, he told to me the PBoC uses proxies to purchase gold in the London OTC gold market. Early 2017, author and gold commentator Jim Rickards met with three heads of the precious metals departments of large Chinese banks. Rickards stated in the Gold Chronicles podcast published January 17, 2017 (25:00): What I don’t know is about the Shanghai Gold Exchange sales, they’re pretty transparent, how much of that is private and how much of that is the government [PBoC]. And I was sort of guessing 50/50, 70/30, whatever. What they told me, and these guys are the dealers, it’s 100% private. Meaning, the government operates through completely separate channels. The government does not operate through the Shanghai Gold Exchange. … None of what’s going on on the Shanghai Gold Exchange is going to the People’s Bank of China. Lastly, in 2014 the President of the SGE Transaction Department said in interview: The PBoC does not buy gold through the SGE. Until I bump into evidence convincing me of the opposite, my conclusion is the PBoC doesn’t buy gold on the SGE and thus all known supply in China (import, mine output, recycled gold) must be eliminated from our analysis for estimating the PBoC’s true holdings. Most likely, the PBoC buys gold abroad and from there ships it to vaults in Beijing. Estimating PBoC Gold Reserves Let us first have a look at what the PBoC has disclosed in the past. We often see long periods of no purchases and then a sudden large increase in reserves, which suggests they mostly buy by stealth. In June 2015 the Chinese central bank disclosed to have 1,658 tonnes, up from 1,054 tonnes a month prior. Obviously, 604 tonnes weren’t bought in one month. On one hand the PBoC wants to show the world they are buying gold to catch up with the West, support renminbi internationalization, and move away from the dollar. On the other hand, they don’t want to disclose too much, or they would rock the gold market and drive the price up, which is not in their interest, yet. The Chinese central bank’s interest is to accumulate gold for itself, but it also has a policy of “storing gold among the people” to strengthen China’s economic security (source, page 27). If the price rises, China as a whole can buy less gold. In March 2013, deputy Chinese central bank governor Yi Gang told the press: If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers. We will always keep gold in mind as an option in reserve assets and investments. We are able to import 500-600 tons a year, or more, but we will also take into consideration a stable gold market. Some analysts have interpreted the “500–600 tonnes a year” as what the PBoC buys every single year. It’s more likely, though, Yi referred to the weight imported in 2012 by the Chinese private sector and the PBoC in aggregate. Global cross-border statistics show countries net exported 590 tonnes in non-monetary gold to China in 2012. Add whatever the PBoC bought, and you get “500–600 tonnes a year, or more.” Another argument why the PBoC doesn’t buy 500 tonnes every year is because the gold market is in constant flux. If the price goes up the PBoC can’t buy much for reasons just mentioned. If the price goes down the PBoC can purchase hundreds of tonnes on sale. In a previous article I have explained that for at least 90 years the gold price is set in the West. The East dampens volatility by ramping up purchases when the price declines, and lowering purchases when the price rises. Many countries in Asia, like Thailand, even turn into net sellers when the price goes up. This analysis rhymes with Yi’s remarks from 2013: the Chinese don’t set the gold price. (In late 2022 and January 2023 Chinese buying was strong while the price went up, but it’s too soon to confirm a trend reversal.) After having researched the true size of the PBoC’s gold hoard for some years now, I conclude there is but one approach to get close to what they actually have: through intelligence from those dealing with the PBoC: bullion bankers and people at refineries and secure logistics companies around the world. The following analysis is solely based on industry sources. Every quarter the World Gold Council (WGC) publishes the Gold Demand Trends (GDT) report, which contains statistics provided by Metals Focus (MF) on mining output, scrap supply, newly fabricated jewelry sold, retail bar demand, ETF hoarding or dishoarding, etc. In these reports there is a single sum divulged for the official sector: a net purchase or sale by all central banks and international financial institutions, such as the Bank for International Settlements (BIS), International Monetary Fund (IMF), and European Central Bank (ECB), combined. This is an estimate based on MF’s field research and doesn’t necessarily align with what central banks openly declare. From the WGC: Central banks Net purchases (i.e. gross purchases less gross sales) by central banks and other official sector institutions, including supra national entities such as the IMF. Swaps … are excluded. A … vital source is confidential information [by MF] regarding unrecorded sales and purchases. For example, when MF—a consultancy firm in close contact with bullion bankers and people at refineries and secure logistics companies around the world—judges the PBoC bought 50 tonnes in Q1 2023, this tonnage will be attributed to official sector activity in its respective GDT report. By comparing MF’s official sector estimates to what the official sector publishes, we can deduct what’s bought surreptitiously. People familiar with the matter, but prefer to stay anonymous, told me that the majority of these clandestine acquisitions can be ascribed to the Chinese central bank. Saudi Arabia is also known for buying in secret. Let’s say 80% of the difference between MF’s data and the official numbers released by the IMF are PBoC acquisitions. Since 2010, when MF’s estimates started, the gross difference has mushroomed to 1,945 tonnes, as can be seen in the chart below. For the data “reported by the IMF,” I added the holdings of all central banks, the ECB, IMF, and the BIS’ total holdings, as the noted in the WGC’s “Quarterly times series on World Official Gold Reserves since 2000.” Of this total I subtracted the gold swaps (taken from the annual and monthly reports) of the BIS, because MF doesn’t consider these when estimating official sector buying. The resulting series differs from the IMF’s “World” series. The PBoC thus holds at least 1,556 tonnes (80% of 1,945 tonnes) more than what they disclosed last December (2,010 tonnes), which totals 3,566 tonnes. But how do we know what happened before 2010 when MF’s data begins? Mister-X told me in 2015 that it was very difficult for his company to go on record with what they truly think the Chinese central bank owns. The PBoC is very influential and upsetting them would make his company’s operations in the mainland impossible. Though he told me that when the PBoC announced to have 1,658 tonnes in June 2015, his firm estimated that in reality they held twice as much (3,317 tonnes). I’m tempted to believe Mister-X because this tonnage would make more sense than the official number relative to, i.e., China’s vast foreign exchange reserves. If we assume the PBoC held 3,317 tonnes in June 2015, and we add 80% of the furtive investments trailed by MF since then, we arrive at 4,309 tonnes on December 31, 2022. How much gold did the PBoC buy covertly before 2010? According to my math they did 1,700 tonnes in unreported procurements from the 1990s, when the PBoC held 395 tonnes, until 2010*. The further back in time the more interesting it gets. After China’s hardline communist leader Mao Zedong died in 1976, a more market oriented economy was structured under the guidance of Deng Xiaoping. Individual gold prospecting was allowed in 1978 (source, page 97), though all output was required to be sold to the PBoC. In 1983, the Bank of China—the PBoC’s commercial arm that handled overseas operations (source, page 98)—exported 120 tonnes of the PBoC’s gold, sourced from domestic mining, to London to exchange for dollars. China’s new economic model soon bore fruit. Instead of having to sell domestic mine output to raise foreign exchange, the PBoC was buying gold in London from the Dutch central bank (DNB) in 1992. An article in Dutch Newspaper NRC Handelsblad from March 27, 1993, about a 400 tonnes gold sale from DNB is profoundly informative: for traders in the international gold market there is no doubt that the People’s Bank of China (PBoC) has bought a part of the 400 tonnes of gold,… which DNB has sold late last year [1992] in utmost secrecy. “With 99 percent certainty we know that the People’s Bank of China has been one of the buyers of the Dutch gold”, said Philip Klapwijk from Goldfields Mining Services… Also other London bullion dealers have a strong suspicion that China was involved in the gold sales of DNB. “We have noted that the Chinese central bank has bought gold in recent months”, said John Coley of the London bullion dealer Sharp Pixley and spokesman of the London Bullion Market Association. On 29 September Duisenberg [DNB President] sent a letter to Kok [Dutch Minister of Finance] in which he explained that the sale was intended “to equalize our gold holdings relative to other important gold holding nations.”  Kok agreed on 2 October and in the fall several sales transaction followed in the London forward market. The Bank for International Settlements (BIS) acted as an intermediary.  Duisenberg expanded on the gold sales at a BIS meeting on January 12, 1993. The sale had already taken place, only the gold had yet to be delivered. Not all members of the BIS welcomed the Dutch move, nor were they consulted for its decision. It’s impossible DNB entered the gold market itself because this would immediately leak in the closed world of gold trading. The few remaining Dutch players in the gold market are tiny. In London, there are four major gold traders: Sharps Pixley, Samuel Montague, Mase Westpac and Rothschild. According to John Coley, spokesman of the London Bullion Market Association, it was obvious that DNB would use the BIS as an intermediary. Duisenberg is very well known in Basel because he was President of The Board of the BIS from 1988 to 1990. “Part of the sale was handled off the market”, says Philip Klapwijk… He says he came to this conclusion because the price of gold last year, although slightly down, should have shown much greater fluctuations if 400 tonnes had been sold in the market… The BIS probably contacted the People’s Bank of China as the buyer. Why the People’s Republic of China? “The Chinese love gold,” says an expert, and he refers to the huge Taiwanese gold purchases in 1987. Second, China has large dollar surpluses as a result of spectacular economic growth. And third, China announced that it is working to build up its reserves in order to bring it more in line with the size of Chinese GDP. Presumably, the increase in China’s gold reserves will never be visible. The statistics produced by the IMF for China record the same amount of gold for a decade [395 tonnes] …. China experts, however, know that the People’s Bank has additional secret gold reserves, which are held outside the statistics … If part of the gold reserves of DNB have been added to these, as many suspect, no one will ever officially know. NRC Handelsblad is a respected newspaper in the Netherlands. Knowledge by industry insiders with respect to covert PBoC acquisitions as early as 1992, may explain how the Chinese central bank had accumulated a total of 3,317 tonnes by 2015. To give you an idea, DNB sold 400 tonnes in 1992 and an additional 700 tonnes in the following years. Other European central banks sold another 3,000 tonnes over this period (“to equalize … gold holdings relative to other important gold holding nations”). Not all could have been bought by the PBoC, but still. In the 1990s the gold price was declining so there were more sellers than buyers: a situation the PBoC has likely exploited. The PBoC had the opportunity to buy substantial amounts of gold, in and off the market, for decades. It’s not evident all this gold was added to secret monetary reserves, though. Liberalization of the Chinese gold market, initiated in 2002, wasn’t completed until 2007. Chairman of the SGE Shen Xiangrong stated in 2003: Although four large domestic banks were granted approval to import and export gold back in 2002, they have not yet started these cross-border activities, and the PBOC still remains the only bridge connecting the international bullion market with China. Any shortfall in domestic mine and scrap supply to meet private demand in the mainland, from 1982 when jewelry sales were first allowed by the Communist Party, up until at least until 2003, was supplemented by gold imports by the PBoC. Even if we knew exactly how much the PBoC imported since 1992, we would only know the amount it accumulated for itself after offsetting those purchases against supply shortfalls in the domestic market. Estimating China’s Private Gold Reserves How the Chinese populace has accumulated 23,745 tonnes. China became a net importer of gold somewhere in the 1990s, according to the China Gold Market Report 2010 that was co-authored by the PBoC. This means Chinese domestic mine production hasn’t crossed a border afterwards. Precious Metals Insights (PMI) estimates that 2,500 tonnes of gold where held by the population in the mainland in 1994, which is the “jewelry base” we will start off with.   By 2004 the formal prohibition on bullion possession for Chinese people was lifted and private investment took off. In 2007, the Chinese gold market functioned as was intended by the PBoC, as total supply and demand went through the SGE that year for the first time. The China Gold Association (CGA) Yearbook 2007 states (page 39): 2007年，上海黄金交易所黄金入库量394.855 吨，即我国当年的黄金实际供给量 In 2007, the gold storage volume at the Shanghai Gold Exchange was 394.855 tonnes, that is, the actual supply of gold that year … 2007年，上海黄金交易所黄金出库量363.194 吨，即我国当年的黄金需求量， The amount of gold withdrawn from the warehouses of the Shanghai Gold Exchange in 2007, the total gold demand of that year, was 363.194 tonnes … 因而2007年出现了31.661吨未能交割的库存， Therefore, there was 31.661 tons of undelivered [SGE] inventory in 2007… Before 2007 not all supply and demand moved through the SGE, according to CGA Gold Yearbooks, indicating the PBoC was still be involved in the allocation of metal. We shall assume that starting in 2007 the PBoC was no longer interfering in the market. To calculate private reserves, I have added annual mine production and non-monetary import since 1994 to the jewelry base. From this total I have subtracted openly declared additions by the PBoC from before 2007, because these were presumably sourced, in part, from domestic mines. My methodology is not perfect, but it will do. The chart below is the result of my calculations on China’s official and private reserves from 1994 through 2022. All shades of blue are private reserves; red is central bank reserves. Conclusion All in all, 4,309 tonnes for China’s official gold reserves is the best estimate I can come up with. Not unrealistic, because from the moment China’s economy started expanding in the 1990s, and it ran a persistent current account surplus, it had sufficient foreign exchange reserves to buy gold with, and there was a drive to catch up with other large economies. There is no doubt in my mind the PBoC bought gold from DNB in 1992. In addition to the evidence in NRC Handelsblad, it’s cited in DNB’s Annual Report 1992 that “demand in the Far-East was strong” when they sold 400 tonnes. Previously, I have demonstrated on these pages that European central banks have been preparing for a global gold standard since the 1970s through equalizing their monetary gold to GDP ratios. Balanced gold to GDP ratios will smooth the transition to a gold standard (or gold price targeting system) if the current international monetary system is stretched beyond its limits. The Chinese were in on this plan since the 1990s. China communicated in 1993 (source, NRC Handelsblad) to “build up its [gold] reserves in order to bring it more in line with the size of Chinese GDP.” The significance of this statement is that it can’t be viewed in isolation. Gold is an internationally traded commodity, and its price is the same in everywhere. The Chinese didn’t say, “we aim to have gold reserves worth [i.e.] 10% of our GDP,” because they can buy gold and grow their economy, at the end of the day the gold price is what determines their gold to GDP ratio. What China implicitly said was that it’s aiming to bring its gold to GDP ratio more in line with other countries. DNB’s Annual Report 1992 states (emphasis mine): “Within the EC [European Community], the Netherlands was and is, when gold reserves are compared to GDP, one of the largest gold holding countries. On this basis, the Bank [DNB] lowered its gold stock from 1707 tonnes to 1307 tonnes in the fall of 1992.” We know DNB eventually lowered its reserves to 612 tonnes, brining it close to the European average (currently 4% of GDP). In the early 1990s, both the Netherlands and China were candid about equalizing their gold reserves relative to GDP internationally. However, when I asked DNB in 2020 about the reason for past gold sales, they evaded the subject. My question: Is it true that DNB wanted to achieve a more balanced distribution of official gold reserves worldwide with the sales of its gold since 1992? Answer: De Nederlandsche Bank (DNB) weighs several factors in forming an opinion on the total amount of gold in its possession .... We believe that … the current amount [is] balanced at this time. Furthermore, we have no insight into the motivation of other central banks to be able to make statements about their gold reserves and gold policy. A nonsensical answer because we know gold sales were coordinated in Europe and the overarching policy was balancing reserves. Why did this become a secret? Duisenberg must have agitated the US when he expanded on DNB’s sales to China at the BIS meeting on January 12, 1993. In NRC Handelsblad we read: “Not all members of the BIS welcomed the Dutch move…” Major economies balancing gold reserves, ready to be deployed during a dollar crisis to transit to new monetary system, is not in America's best interest to say the least. It’s feasible the countries that agreed on balancing gold reserves silenced themselves to avoid conflict with Uncle Sam. Because we know about an international effort of equalizing reserves, DNB selling gold to China in 1992 made sense as the Netherlands had too much gold (1,707 tonnes) and China too little (395 tonnes), both of their Gross Domestic Product being roughly the same. On the non-monetary side, China wants private gold reserves to be proportionate to its peers too. Sun Zhaoxue, President of the China Gold Association, wrote in 2012 in Qiushi magazine (the main academic journal of the Chinese Communist Party’s Central Committee): as an important part of China’s gold reserve system, we should also encourage individuals to invest in gold. Practice has proven that private gold reserves are an effective supplement to official reserves and are very important for maintaining national financial security. World Gold Council statistics show that Chinese individuals possess less than 5 grams of gold per capita, a significant difference to the global average of more than 20 grams. Multiplying 5 grams by 1.3 billion people (the Chinese population in 2012) equals nearly 7,000 tonnes, which matches my estimate of Chinese private reserves held at the end of 2011. My estimate for Chinese private reserves in 2022 is nearly 24,000 tonnes, divided by 1.4 billion people (the Chinese population in 2022), equals 17 grams per capita. China’s non-monetary gold reserves are close to the global average. China’s monetary gold to GDP ratio (computed with 4,309 tonnes) is 1.5%, which is still lower than 2% in the US and 4% in the eurozone. It’s clear that now is the time for the PBoC to speed up buying. One, China is still behind in its relative gold holdings vis-à-vis Western powers. Two, Russia’s dollar assets were frozen due to the war in Ukraine and the Chinese don’t want to suffer to same fate. Three, the Chinese population has accumulated enough already. Remember Yi Gang was considering private hoarding when he deliberated on how much the PBoC was able to buy in 2013? That doesn’t have to be an issue anymore. Tellingly, the PBoC bought a staggering 522 tonnes in 2022 (based on MF data), which was supportive of the gold price. I think future PBoC procurements, mostly from Russia I suspect, will be supportive of the gold price as well. *According to MF’s data the PBoC bought 1,556 tonnes from January 2010 until December 2022. Meaning, in 2010 the PBoC held 1,556 tonnes less than 4,309 (my estimate for 2022), which is 2,754 tonnes. Officially, the PBoC owned 395 tonnes in 1982. From then until 2010 the PBoC bought 659 tonnes, according to public records. The difference between my estimates and the official data on purchases over this period is 1,700 tonnes. Tyler Durden Sat, 02/25/2023 - 16:30.....»»