How The "Most Anticipated Recession" Is Still Unanticipated

2022 Diluted Earnings Per Share (EPS) were $4.14, Compared to $3.84 in 2021 2023 Diluted EPS Guidance Range Established at $4.25 to $4.45 2023 through 2027 Diluted EPS Compound Annual Growth Rate Guidance of 6% to 8% using 2023 Guidance Midpoint as a Base ST. LOUIS, Feb. 15, 2023 /PRNewswire/ -- Ameren Corporation (NYSE:AEE) today announced 2022 net income attributable to common shareholders of $1,074 million, or $4.14 per diluted share, compared to 2021 net income attributable to common shareholders of $990 million, or $3.84 per diluted share. Earnings results for 2022 were driven by solid operating performance and execution of the company's strategy. Higher earnings were the result of increased infrastructure investments across all business segments. Ameren Missouri earnings were positively impacted by higher weather-driven electric retail sales, new electric service rates effective Feb. 28, 2022, and higher energy efficiency performance incentives in 2022. Earnings also benefited from a higher allowed return on equity at Ameren Illinois Electric Distribution due to a higher 30-year U.S. Treasury bond yield in 2022 compared to 2021. Ameren Illinois Natural Gas earnings increased due to higher delivery service rates effective in late January 2021. These positive factors were partially offset by higher operations and maintenance expenses at Ameren Missouri and Ameren Illinois Natural Gas driven, in part, by unfavorable market returns in 2022 on company-owned life insurance investments compared to favorable market returns in the prior year and increased energy center-related costs. Finally, the earnings comparison also reflected increased interest expense, primarily due to higher long-term debt outstanding at Ameren Missouri and Ameren Parent. "We made significant strides in executing our strategy during 2022, for the benefit of our customers, communities and shareholders," said Martin J. Lyons Jr., president and chief executive officer of Ameren Corporation.  "This included advocating for constructive regulatory and legislative outcomes, accelerating our company-wide net zero carbon emissions goals and completing substantial energy infrastructure investments driving safer, more reliable and resilient service for customers as we transition to a cleaner energy future.  In 2022 our residential customers honored us for the third year in a row with top quartile Midwest utility customer satisfaction scores. We are confident our achievements this year will provide significant long-term value for our customers, communities we serve, shareholders and the environment." Ameren recorded net income attributable to common shareholders for the three months ended Dec. 31, 2022, of $163 million, or 63 cents per diluted share, compared to net income attributable to common shareholders of $125 million, or 48 cents per diluted share, for the same period in 2021. The year-over-year increase in fourth quarter 2022 earnings was due to increased infrastructure investments across all of our business segments. In addition, the improvement reflected higher weather-driven electric retail sales at Ameren Missouri from colder-than-normal winter temperatures compared to milder-than-normal winter temperatures in the year-ago quarter. Ameren Missouri also benefited from higher energy efficiency performance incentives in 2022. Ameren Illinois Electric Distribution earnings benefited from a higher allowed return on equity due to a higher 30-year U.S. Treasury bond yield in 2022 compared to 2021. These factors were partially offset by increased charitable donations, higher operations and maintenance expenses at Ameren Missouri, primarily due to increased energy center-related costs, and higher interest expense at Ameren Parent, primarily due to higher short-term rates. Earnings and Rate Base Guidance Ameren expects 2023 diluted earnings per share to be in a range of $4.25 to $4.45. Ameren expects diluted earnings per share to grow at a 6% to 8% compound annual rate from 2023 through 2027, using the 2023 guidance range midpoint of $4.35 per share as the base. Ameren's multi-year earnings growth is expected to be driven by strong projected rate base growth of approximately 8% compounded annually from 2022 through 2027. "We remain focused on strong long-term execution of our strategy, which includes investments to modernize the energy grid and transition to a cleaner energy portfolio in a responsible fashion. This, along with our relentless focus on disciplined cost management, will continue to deliver superior and consistent value to our customers, the communities we serve, our shareholders and the environment," Lyons said. Ameren's earnings guidance for 2023 and multi-year growth expectations assume normal temperatures and are subject to the effects of, among other things: 30-year U.S. Treasury bond yields in 2023; regulatory, judicial and legislative actions; energy center and energy distribution operations; energy, economic, capital and credit market conditions; severe storms; unusual or otherwise unexpected gains or losses; and other risks and uncertainties outlined, or referred to, in the Forward-looking Statements section of this press release. Ameren Missouri Segment Results Ameren Missouri 2022 earnings were $562 million, compared to 2021 earnings of $518 million. The year-over-year improvement reflected increased earnings on infrastructure investments, higher weather-driven electric retail sales and new electric service rates effective Feb. 28, 2022. Earnings also benefited from higher energy efficiency performance incentives in 2022. These favorable factors were partially offset by higher other operations and maintenance expenses driven, in part, by unfavorable market returns in 2022 on company-owned life insurance investments compared to favorable market returns in the prior year and an increase in energy center-related costs. Finally, the earnings comparison also reflected increased interest expense, primarily due to higher long-term debt outstanding. Ameren Illinois Electric Distribution Segment Results Ameren Illinois Electric Distribution 2022 earnings were $202 million, compared to 2021 earnings of $165 million. The year-over-year improvement reflected increased earnings on infrastructure investments and a higher allowed return on equity due to a higher average 30-year U.S. Treasury bond yield in 2022 compared to 2021. Ameren Illinois Natural Gas Segment Results Ameren Illinois Natural Gas 2022 earnings were $123 million, compared to 2021 earnings of $108 million. The year-over-year improvement reflected increased earnings on infrastructure investments and higher delivery service rates effective late January 2021, partially offset by higher other operations and maintenance expenses. Ameren Transmission Segment Results Ameren Transmission 2022 earnings were $263 million, compared to 2021 earnings of $230 million. The year-over-year improvement reflected increased earnings on infrastructure investments, as well as the absence of the 2021 FERC order addressing the historical recovery of materials and supplies inventories. Ameren Parent Results (includes items not reported in a business segment) Ameren Parent results for 2022 reflected a loss of $76 million, compared to a 2021 loss of $31 million. The year-over-year comparison reflected higher interest expense due to higher rates on short-term debt and higher long-term debt outstanding, increased charitable donations and a higher effective tax rate primarily driven by company-owned life insurance investment performance in 2022. Analyst Conference Call Ameren will conduct a conference call for financial analysts at 9 a.m. Central Time on Thursday, Feb. 16 to discuss 2022 earnings, 2023 earnings guidance and other matters. Investors, the news media and the public may listen to a live broadcast of the call at AmerenInvestors.com by clicking on "Webcast" under "Q4 2022 Earnings Conference Call," where an accompanying slide presentation will also be available. The conference call and presentation will be archived for one year in the "Investor News and Events" section of the website under "Events and Presentations." About Ameren St. Louis-based Ameren Corporation powers the quality of life for 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area through its Ameren Missouri and Ameren Illinois rate-regulated utility subsidiaries. Ameren Illinois provides electric transmission and distribution service and natural gas distribution service. Ameren Missouri provides electric generation, transmission and distribution service, as well as natural gas distribution service. Ameren Transmission Company of Illinois develops, owns and operates rate-regulated regional electric transmission projects. For more information, visit Ameren.com, or follow us at @AmerenCorp, Facebook.com/AmerenCorp, or LinkedIn/company/Ameren. Forward-looking Statements Statements in this release not based on historical facts are considered "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed under Risk Factors in Ameren's Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in this release and in our other filings with the Securities and Exchange Commission, could cause actual results to differ materially from management expectations suggested in such forward-looking statements: regulatory, judicial, or legislative actions, and any changes in regulatory policies and ratemaking determinations, that may change regulatory recovery mechanisms, such as those that may result from the impact of a final ruling to be issued by the United States District Court for the Eastern District of Missouri regarding its September 2019 remedy order for the Rush Island Energy Center, the MoPSC staff review of the planned Rush Island Energy Center retirement, Ameren Missouri's electric regulatory rate review filed in August 2022 with the MoPSC, Ameren Illinois' Multi-Year Rate Plan (MYRP) electric distribution service regulatory rate review filed in January 2023 with the ICC, Ameren Illinois' natural gas regulatory rate review filed in January 2023 with the ICC, and the August 2022 United States Court of Appeals for the District of Columbia Circuit ruling that vacated FERC's Midcontinent Independent System Operator (MISO) return on equity-determining orders and remanded the proceedings to the FERC; our ability to control costs and make substantial investments in our businesses, including our ability to recover costs and investments, and to earn our allowed return on equity (ROEs), within frameworks established by our regulators, while maintaining affordability of our services for our customers; the effect of Ameren Illinois' use of the performance-based formula ratemaking framework for its electric distribution service under the Illinois Energy Infrastructure Modernization Act, which established and allows for a reconciliation of electric distribution service rates through 2023, its participation in electric energy-efficiency programs, and the related impact of the direct relationship between Ameren Illinois' ROE and the 30-year United States Treasury bond yields; the effect and duration of Ameren Illinois' election to utilize MYRPs for electric distribution service ratemaking effective for rates beginning in 2024, including the effect of the reconciliation cap on electric distribution revenue requirement; the effect on Ameren Missouri of any customer rate caps or limitations on increasing the electric service revenue requirement pursuant to Ameren Missouri's election to use the plant-in-service accounting (PISA); Ameren Missouri's ability to construct and/or acquire wind, solar, and other renewable energy generation facilities and battery storage, as well as natural gas-fired combined cycle energy centers, retire fossil fuel-fired energy centers, and implement new or existing customer energy efficiency programs, including any such construction, acquisition, retirement, or implementation in connection with its Smart Energy Plan, integrated resource plan, or emissions reduction goals, and to recover its cost of investment, a related return, and, in the case of customer energy-efficiency programs, any lost margins in a timely manner, each of which is affected by the ability to obtain all necessary regulatory and project approvals, including certificates of convenience and necessity from the MoPSC or any other required approvals, for the addition of renewable resources; Ameren Missouri's ability to use or transfer federal production and investment tax credits related to renewable energy projects; the cost of wind, solar, and other renewable generation and storage technologies; and our ability to obtain timely interconnection agreements with the MISO or other regional transmission organizations (RTOs) at an acceptable cost for each facility; the success of competitive bids related to requests for proposals associated with the MISO's long-range transmission planning; the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments, including as they relate to the construction and acquisition of electric and natural gas utility infrastructure and the ability of counterparties to complete projects, which is dependent upon the availability of necessary materials and equipment, including those obligations that are affected by supply chain disruptions; advancements in energy technologies, including carbon capture utilization, and sequestration, hydrogen fuel for electric production and energy storage, next generation nuclear, and large-scale long-cycle battery energy storage, and the impact of federal and state energy and economic policies with respect to those technologies; the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, foreign trade, and energy policies; the effects of changes in federal, state, or local tax laws, or rates, including the effects of the Inflation Reduction Act (IRA), and the 15% minimum tax on adjusted financial statement income, as well as additional regulations, interpretations, amendments, or technical corrections to or in connection with the IRA, and challenges to the tax positions we have taken, if any, as well as resulting effects on customer rates and the recoverability of the minimum tax imposed under the IRA; the effects on energy prices and demand for our services resulting from technological advances, including advances in customer energy efficiency, electric vehicles, electrification of various industries, energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive; the cost and availability of fuel, such as low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of natural gas for distribution and purchased power, including capacity, zero emission credits, renewable energy credits, emission allowances; and the level and volatility of future market prices for such commodities and credits; disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies from the one Nuclear Regulatory Commission-licensed supplier of Ameren Missouri's Callaway Energy Center assemblies; the cost and availability of transmission capacity for the energy generated by Ameren Missouri's energy centers or required to satisfy Ameren Missouri's energy sales; the effectiveness of our risk management strategies and our use of financial and derivative instruments; the ability to obtain sufficient insurance, or in the absence of insurance, the ability to timely recover uninsured losses from our customers; the impact of cyberattacks and data security risks on us or our suppliers, which could, among other things, result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer, employee, financial, and operating system information; acts of sabotage, which have increased in frequency and severity within the utility industry, war, terrorism, or other intentionally disruptive acts; business, economic, and capital market conditions, including the impact of such conditions on interest rates, inflation, and investments; the impact of inflation or a recession on our customers and the related impact on our results of operations, financial position, and liquidity; disruptions of the capital markets, deterioration in our credit metrics, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity, and our ability to access the capital markets on reasonable terms when needed; the actions of credit rating agencies and the effects of such actions; the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages and the level of wind and solar resources; the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets; the ability to maintain system reliability during the transition to clean energy generation by Ameren Missouri and the electric utility industry as well as Ameren Missouri's ability to meet generation capacity obligations; the effects of failures of electric generation, electric and natural gas transmission or distribution, or natural gas storage facilities systems and equipment, which could result in unanticipated liabilities or unplanned outages; the operation of Ameren Missouri's Callaway Energy Center, including planned and unplanned outages, as well as the ability to recover costs associated with such outages and the impact of such outages on off-system sales and purchased power, among other things; Ameren Missouri's ability to recover the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs; the impact of current environmental laws and new, more stringent, or changing requirements, including those related to the New Source Review and carbon dioxide, other emissions and discharges, Illinois emission standards, cooling water intake structures, coal combustion residuals, energy efficiency, and wildlife protection, that could limit or terminate the operation of certain of Ameren Missouri's energy centers, increase our operating costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers' demand for electricity or natural gas, or otherwise have a negative financial effect; the impact of complying with renewable energy standards in Missouri and Illinois and with the zero emission standard in Illinois; the effectiveness of Ameren Missouri's customer energy-efficiency programs and the related revenues and performance incentives earned under its MEEIA programs; Ameren Illinois' ability to achieve the performance standards applicable to its electric distribution business and electric customer energy-efficiency goals and the resulting impact on its allowed ROE; labor disputes, work force reductions, changes in future wage and employee benefits costs, including those resulting from changes in discount rates, mortality tables, returns on benefit plan assets, and other assumptions; the impact of negative opinions of us or our utility services that our customers, investors, legislators, regulators, creditors, or other stakeholders may have or develop, which could result from a variety of factors, including failures in system reliability, failure to implement our investment plans or to protect sensitive customer information, increases in rates, negative media coverage, or concerns about environmental, social, and/or governance practices; the impact of adopting new accounting guidance; the effects of strategic initiatives, including mergers, acquisitions, and divestitures; legal and administrative proceedings; the length and severity of the COVID-19 pandemic, and its impacts on our results of operations, financial position, and liquidity; and the impacts of the Russian invasion of Ukraine, related sanctions imposed by the U.S. and other governments, and any broadening of the conflict, including potential impacts on the cost and availability of fuel, natural gas, enriched uranium, and other commodities, materials, and services, the inability of our counterparties to perform their obligations, disruptions in the capital and credit markets, and other impacts on business, economic, and geopolitical conditions, including inflation. New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.    AMEREN CORPORATION (AEE)CONSOLIDATED STATEMENT OF INCOME(Unaudited, in millions, except per share amounts) Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 Operating Revenues: Electric $      1,610 $      1,189 $     6,581 $      5,297 Natural gas 436 356 1,376 1,097 Total operating revenues 2,046 1,545.....»»

SEATTLE, Jan. 27, 2023 (GLOBE NEWSWIRE) -- Sound Financial Bancorp, Inc. (NASDAQ:SFBC), the holding company (the "Company") for Sound Community Bank (the "Bank"), today reported net income of $2.9 million for the quarter ended December 31, 2022, or $1.12 diluted earnings per share, as compared to net income of $2.5 million, or $0.97 diluted earnings per share, for the quarter ended September 30, 2022, and $1.9 million, or $0.70 diluted earnings per share, for the quarter ended December 31, 2021. The Company also announced today that its Board of Directors declared a cash dividend on Company common stock of $0.17 per share, payable on February 23, 2023 to stockholders of record as of the close of business on February 9, 2023. Comments from the President and Chief Executive Officer "Despite the continual increase in interest rates, and significant economic uncertainty, we sustained our loan origination efforts and posted our eighth consecutive quarter of loan growth," remarked Ms. Stewart, President and Chief Executive Officer. "Organic funding via deposits remains very competitive but we continue our emphasis on the development of full relationships and generation of business and consumer deposits," concluded Stewart. Q4 2022 Financial Performance         Total assets decreased $5.9 million or 0.6% to $976.4 million at December 31, 2022, from $982.2 million at September 30, 2022, and increased $56.7 million or 6.2% from $919.7 million at December 31, 2021.Loans held-for-portfolio increased $14.5 million or 1.7% to $866.0 million at December 31, 2022, compared to $851.4 million at September 30, 2022, and increased $179.6 million or 26.2% from $686.4 million at December 31, 2021. Total deposits decreased $6.6 million or 0.8% to $808.8 million at December 31, 2022, from $815.4 million at September 30, 2022, and increased $10.4 million or 1.3% from $798.3 million at December 31, 2021. Noninterest-bearing deposits decreased $19.1 million or 9.9% to $173.2 million at December 31, 2022 compared to $192.3 million at September 30, 2022, and decreased $17.3 million or 9.1% compared to $190.5 million at December 31, 2021.Our loan-to-deposit ratio was 107% at December 31, 2022, compared to 105% at September 30, 2022 and 86% at December 31, 2021.Total nonperforming loans increased $473 thousand or 19.0% to $3.0 million at December 31, 2022, from $2.5 million at September 30, 2022, and decreased $2.6 million or 46.7% from $5.6 million at December 31, 2021.     Net interest income increased $91 thousand or 0.9% to $9.7 million for the quarter ended December 31, 2022, from $9.6 million for the quarter ended September 30, 2022, and increased $2.0 million or 25.6% from $7.7 million for the quarter ended December 31, 2021.Net interest margin ("NIM"), annualized, was 4.05% for the quarter ended December 31, 2022, compared to 4.13% for the quarter ended September 30, 2022 and 3.53% for the quarter ended December 31, 2021.  A $125 thousand provision for loan losses was recorded for the quarter ended December 31, 2022, compared to a $375 thousand provision for loan losses for the quarter ended September 30, 2022 and no provision for loan losses for the quarter ended December 31, 2021. At December 31, 2022, the allowance for loan losses to total nonperforming loans and to total loans was 256.84% and 0.88%, respectively.  Net gain on sale of loans was $49 thousand for the quarter ended December 31, 2022, compared to $48 thousand for the quarter ended September 30, 2022 and $507 thousand for the quarter ended December 31, 2021.  The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at December 31, 2022.         Operating Results Net interest income increased $91 thousand, or 0.9%, to $9.7 million for the quarter ended December 31, 2022, compared to $9.6 million for the quarter ended September 30, 2022, and increased $2.0 million, or 25.6%, from $7.7 million for the quarter ended December 31, 2021. The increase in the current quarter, compared to the prior quarter and the fourth quarter of 2021 were primarily the result of a higher average balance of and yield earned on average interest-earning assets, partially offset by a higher average balance of and rate paid on average interest-bearing liabilities. Interest income increased $1.0 million, or 9.7%, to $11.8 million for the quarter ended December 31, 2022, compared to $10.8 million for the quarter ended September 30, 2022, and increased $3.5 million, or 41.4%, from $8.4 million for the quarter ended December 31, 2021. The increase from the prior quarter was primarily due to higher average loan balances, an 18 basis point rate increase in the average yield on loans and a 131 basis point rate increase in the average yield on investments and interest-bearing cash following increases in the targeted federal funds rate throughout 2022, partially offset by lower average balances of investments and interest-bearing cash. The increase in interest income from the same quarter last year was due primarily to higher average loan balances, a 37 basis point increase in the average loan yield and a 305 basis point increase in average yield on investments and interest-bearing cash, partially offset by a lower average balance of investments and interest-bearing cash. Interest income on loans increased $751 thousand, or 7.3%, to $11.1 million for the quarter ended December 31, 2022, compared to $10.3 million for the quarter ended September 30, 2022, and increased $2.8 million, or 34.5%, from $8.2 million for the quarter ended December 31, 2021. The average balance of total loans was $861.4 million for the quarter ended December 31, 2022, compared to $833.2 million for the quarter ended September 30, 2022 and $690.7 million for the quarter ended December 31, 2021. The average yield on total loans was 5.10% for the quarter ended December 31, 2022, compared to 4.92% for the quarter ended September 30, 2022 and 4.73% for the quarter ended December 31, 2021. The increase in the average loan yield during the current quarter compared to the prior quarter and fourth quarter of 2021 was primarily due to variable rate loans adjusting to higher market interest rates and new loan originations at higher interest rates. Interest income on investments and interest-bearing cash increased $292 thousand to $741 thousand for the quarter ended December 31, 2022, compared to $449 thousand for the quarter ended September 30, 2022, and increased $620 thousand from $121 thousand for the quarter ended December 31, 2021, due to a higher average yield on investments and interest-bearing cash, partially offset by a lower average balance as excess cash liquidity was deployed into higher yielding loans during the current quarter. Interest expense increased $952 thousand, or 80.7%, to $2.1 million for the quarter ended December 31, 2022, from $1.2 million for the quarter ended September 30, 2022, and increased $1.5 million, or 231.4%, from $643 thousand for the quarter ended December 31, 2021. The increase in interest expense during the current quarter from the prior quarter was primarily the result of a $12.9 million increase in the average balance of borrowings, comprised of Federal Home Loan Bank ("FHLB") advances, and a $55.7 million increase in the average balance of certificate accounts, as well as higher average rates paid on all interest-bearing deposits, partially offset by a $36.9 million decrease in the average balance of interest-bearing deposits other than certificate accounts. The increase in interest expense during the current quarter from the comparable period a year ago was primarily the result of a $59.3 million increase in the average balance of borrowings and a $75.3 million increase in the average balance of certificate accounts, as well as higher average rates paid on all interest-bearing deposits, partially offset by a $52.6 million decrease in the average balance of interest-bearing deposits other than certificate accounts. The average cost of total borrowings, comprised of FHLB advances and subordinated notes, increased to 4.20% for the quarter ended December 31, 2022, from 3.06% for the quarter ended September 30, 2022, and decreased from 5.73% for the quarter ended December 31, 2021, reflecting the increased use of lower cost FHLB advances during the second half of 2022 to supplement our liquidity needs. The average balance of our total borrowings increased $12.9 million to $71.0 million from $58.1 million for the quarter ended September 30, 2022, and increased $59.4 million from $11.6 million for the quarter ended December 31, 2021 as we used FHLB advances to fund loan growth. Net interest margin (annualized) was 4.05% for the quarter ended December 31, 2022, compared to 4.13% for the quarter ended September 30, 2022 and 3.53% for the quarter ended December 31, 2021. The decrease in net interest margin from the prior quarter was primarily due to cost of funding increasing at a faster pace than the yield earned on interest-earning assets, driven by the higher average balance of borrowings and certificate accounts, partially offset by the increase in the average balance of loans. The increase from the same quarter a year ago was the result of an increase in interest income on interest-earning assets, driven by the higher average balance of and yield earned on loans, partially offset by an increase in the cost of funding during the second half of 2022. The Company recorded a provision for loan losses of $125 thousand for the quarter ended December 31, 2022, as compared to $375 thousand for the quarter ended September 30, 2022 and no provision for the quarter ended December 31, 2021. The decrease in the provision for loan losses for the quarter ended December 31, 2022 compared to the quarter ended September 30, 2022 resulted primarily from the lower growth in our loans held-for-portfolio. The provision for loan losses in the fourth quarter of 2022 also reflects the inherent uncertainty related to the economic environment as a result of local, national and global events. Noninterest income remained essentially unchanged at $1.0 million for the quarters ended December 31, 2022 and September 30, 2022, and decreased $465 thousand, or 31.4%, from $1.5 million for the quarter ended December 31, 2021. The decrease in noninterest income from the comparable period in 2021 was primarily due to a $458 thousand decrease in net gain on sale of loans as a result of a decline in both the amount of loans originated for sale and gross margins for loans sold and a $13 thousand decrease in the fair value adjustment on mortgage servicing rights, partially offset by a $40 thousand increase in earnings on the cash surrender value of bank-owned life insurance ("BOLI"). Loans sold during the quarter ended December 31, 2022, totaled $3.5 million, compared to $2.3 million and $19.1 million during the quarters ended September 30, 2022 and December 31, 2021, respectively. Noninterest expense increased $82 thousand, or 1.2%, to $7.1 million for the quarter ended December 31, 2022, compared to $7.0 million for the quarter ended September 30, 2022 and increased $190 thousand, or 2.7%, from $6.9 million for the quarter ended December 31, 2021. The increase from the quarter ended September 30, 2022 was primarily a result of an increase in salaries and benefits expense of $190 thousand resulting from lower deferred compensation and higher medical expenses, partially offset by a decrease in incentive compensation expense as a result of lower loan and deposit growth. Operations expense decreased $92 thousand primarily due to decreases in various expenses including marketing expenses and charitable contributions, insurance costs, and office expenses, partially offset by an increase in audit and professional fees. The increase in noninterest expense compared to the quarter ended December 31, 2021 was primarily due to an increase in salaries and benefits of $448 thousand primarily due to higher wages and medical expenses and lower deferred compensation, partially offset by a decrease in incentive compensation as a result of a lower percentage earned on loans originated, changes to incentive compensation programs, such as the addition of non-production performance requirements, and lower commission expense related to a decline in mortgage originations. Operations expense decreased $243 thousand compared to the quarter ended December 31, 2021 due to lower loan origination costs due to lower mortgage origination volume, a lower reserve for unfunded commitments and decreases in various accounts including marketing, charitable contributions and professional fees. These decreases were partially offset by increases in various accounts including travel expenses, debit card processing, audit fees, fixed assets and office expenses. The efficiency ratio for the quarter ended December 31, 2022 was 66.49%, compared to 66.23% for the quarter ended September 30, 2022 and 75.31% for the quarter ended December 31, 2021. The improvement in the efficiency ratio for the current quarter compared to the same period in the prior year was primarily due to higher net interest income, partially offset by higher noninterest expense and lower noninterest income. Balance Sheet Review, Capital Management and Credit Quality Assets at December 31, 2022 totaled $976.4 million, compared to $982.2 million at September 30, 2022 and $919.7 million at December 31, 2021. The decrease in total assets from the sequential quarter was primarily due to a decrease in cash and cash equivalents as a result of a decrease in deposits and to repay borrowings. The increase from one year ago was primarily a result of increases in loans held-for-portfolio and investment securities, partially offset by lower balances in cash and cash equivalents. Cash and cash equivalents decreased $18.2 million, or 24.0%, to $57.8 million at December 31, 2022, compared to $76.1 million at September 30, 2022, and decreased $125.8 million, or 68.5%, from $183.6 million at December 31, 2021. The decrease from the prior quarter-end was primarily due to the deployment of excess liquidity into higher yielding loans. The decrease from one year ago was primarily due to deploying cash earning a nominal yield into higher interest-earning loans and investments securities, partially offset by an increase in deposits, primarily certificate accounts. Investment securities decreased $197 thousand, or 1.6%, to $12.4 million at December 31, 2022, compared to $12.6 million at September 30, 2022, and increased $4.0 million, or 47.4%, from $8.4 million at December 31, 2021. Held-to-maturity securities totaled $2.2 million at both December 31, 2022 and September 30, 2022, compared to zero at December 31, 2021. Available-for-sale securities totaled $10.2 million at December 31, 2022, compared to $10.4 million at September 30, 2022, and $8.4 million at December 31, 2021. The decrease in available-for-sale securities from the prior quarter-end was primarily due to the call of a municipal bond for $260 thousand and regularly scheduled payments, partially offset by a lower net unrealized losses resulting from an increase in market values during the quarter. The increase from one year ago was primarily due to investment purchases during the year, partially offset by the call of one municipal bond, regularly scheduled payments and maturities, and net unrealized losses resulting from the increases in market interest rates during the year. Loans held-for-portfolio increased to $866.0 million at December 31, 2022, compared to $851.4 million at September 30, 2022 and increased from $686.4 million at December 31, 2021. The increase in loans held-for-portfolio at December 31, 2022, compared to the prior quarter-end, primarily resulted from increases in residential, construction and land, and consumer loans, partially offset by a decline in commercial real estate and multifamily loans. The increase in loans held-for-portfolio at December 31, 2022, compared to one year ago, primarily resulted from increases across all loan categories, excluding commercial business loans which decreased between the periods primarily due to SBA loan forgiveness payments on Paycheck Protection Program loans. The increase in loans held-for-portfolio primarily resulted from focused marketing campaigns, increased utilization of digital marketing tools and the addition of experienced lending staff. Nonperforming assets ("NPAs"), which are comprised of nonaccrual loans, including nonperforming troubled debt restructurings ("TDRs"), other real estate owned ("OREO") and other repossessed assets, increased $473 thousand, or 15.0%, to $3.6 million at December 31, 2022, from $3.1 million at September 30, 2022 and decreased $2.6 million, or 41.7% from $6.2 million at December 31, 2021. The increase in nonperforming assets from the prior quarter-end was primarily due to the addition of four nonaccrual loans during the current quarter, including two one-to-four family loans, one home equity loan and one land loan. The decrease from one year ago was primarily due to the payoff of a $2.3 million nonperforming multifamily loan during 2022. Loans classified as TDRs totaled $2.0 million, $2.0 million and $2.6 million at December 31, 2022, September 30, 2022 and December 31, 2021, respectively, of which $103 thousand, $108 thousand and $422 thousand, respectively, were classified as nonperforming at those dates. NPAs to total assets were 0.37%, 0.32% and 0.68% at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. The allowance for loan losses to total loans outstanding was 0.88%, 0.88% and 0.92% at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. Net loan charge-offs for the fourth quarter of 2022 totaled $15 thousand, compared to $3 thousand for the third quarter of 2022, and $21 thousand for the fourth quarter of 2021. The following table summarizes our NPAs at the dates indicated (dollars in thousands):   December 31,2022   September 30,2022   June 30,2022   March 31,2022   December 31,2021 Nonperforming Loans:                   One-to-four family $ 2,135     $ 1,960     $ 1,670     $ 1,676     $ 2,207   Home equity loans   142       133       152       155       140   Commercial and multifamily   —       —       2,307       2,336       2,380   Construction and land   324       29       30       31       33   Manufactured homes   96       99       117       135       122   Floating homes   —       —       —       —       493   Commercial business   —       —       —       170       176   Other consumer   262       265       233       244       —   Total nonperforming loans   2,959       2,486       4,509       4,747       5,552   OREO and Other Repossessed Assets:                   One-to-four family   84       84       84       84       84   Commercial and multifamily   575       575       575       575       575   Total OREO and repossessed assets   659       659       659       659       659   Total nonperforming assets $ 3,618     $ 3,145     $ 5,168     $ 5,406     $ 6,211                       Nonperforming Loans:                   One-to-four family   59.0 %     62.3 %     32.3 %     31.0 %     35.5 % Home equity loans   3.9       4.2       2.9       2.9       2.3   Commercial and multifamily   —       —       44.7       43.2       38.3   Construction and land   9.0       0.9       0.6       0.6       0.5   Manufactured homes   2.7       3.2       2.3       2.5       2.0   Floating homes   —       —       —       —       7.9   Commercial business   —       —       —       3.1       2.8   Other consumer   7.2       8.4       4.5       4.5       —   Total nonperforming loans   81.8       79.0       87.3       87.8       89.3   OREO and Other Repossessed Assets:                   One-to-four family   2.3       2.7       1.6       1.6       1.4   Commercial and multifamily   15.9       18.3       11.1       10.6       9.3   Total OREO and repossessed assets   18.2       21.0       12.7       12.2       10.7   Total nonperforming assets   100.0 %     100.0 %     100.0 %     100.0 %     100.0 % The following table summarizes the allowance for loan losses for the periods indicated (dollars in thousands, unaudited):   For the Quarter Ended:   December 31,2022   September 30,2022   June 30,2022   March 31,2022   December 31,2021 Allowance for Loan Losses                   Balance at beginning of period $ 7,489     $ 7,117     $ 6,407     $ 6,306     $ 6,327   Provision for loan losses during the period   125       375       600       125       —   Net (charge-offs)/recoveries during the period   (15 )     (3 )     110       (24 )     (21 ) Balance at end of period $ 7,599     $ 7,489     $ 7,117     $ 6,407     $ 6,306   Allowance for loan losses to total loans   0.88 %     0.88 %     0.88 %     0.90 %     0.92 % Allowance for loan losses to total nonperforming loans   256.81 %     301.25 %     157.84 %     134.97 %     113.58 % Deposits decreased $6.6 million, or 0.8%, to $808.8 million at December 31, 2022, from $815.4 million at September 30, 2022 and increased $10.4 million, or 1.3%, from $798.3 million at December 31, 2021. The decrease in deposits compared to the prior quarter-end was primarily a result of lower balances in all deposit products, excluding certificate accounts, largely driven by seasonal declines in escrow accounts and year end distributions in business accounts. The increase in our deposits compared to one year ago was a result of an increase in certificate accounts, which was primarily used to fund organic loan growth in 2022. Our noninterest-bearing deposits decreased $19.1 million, or 9.9% to $173.2 million at December 31, 2022, compared to $192.3 million at September 30, 2022 and decreased $17.3 million, or 9.1% from $190.5 million at December 31, 2021. Noninterest-bearing deposits represented 21.4%, 23.6% and 23.9% of total deposits at December 31, 2022, September 30, 2022 and December 31, 2021, respectively. There were $43.0 million of outstanding FHLB advances at December 31, 2022, as compared to $44.5 million at September 30, 2022 and none at December 31, 2021. During 2022, FHLB advances were primarily used to support organic loan growth and to maintain liquidity ratios in line with our asset/liability objectives. Subordinated notes, net totaled $11.7 million at each of December 31, 2022, September 30, 2022 and December 31, 2021. Stockholders' equity totaled $97.7 million at December 31, 2022, an increase of $2.7 million, or 2.9%, from $95.0 million at September 30, 2022, and an increase of $4.3 million, or 4.7%, from $93.4 million at December 31, 2021. The increase in stockholders' equity from September 30, 2022 was primarily the result of $2.9 million of net income earned during the current quarter, a $148 thousand decrease in accumulated other comprehensive loss, net of tax, and $28 thousand in proceeds from exercises of stock options, partially offset by the payment of $441 thousand in dividends to Company stockholders . Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, and is headquartered in Seattle, Washington with full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one Loan Production Office located in the Madison Park neighborhood of Seattle, Washington. For more information, please visit www.soundcb.com. Forward Looking Statement Disclaimer When used in this press release and in documents filed or furnished by Sound Financial Bancorp, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), in the Company's other press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events, and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors listed below or because of other factors that we cannot foresee that could cause our actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. Factors which could cause actual results to differ materially, include, but are not limited to: potential adverse impacts to economic conditions in the Company's local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation or deflation, a potential recession or slowed economic growth caused by increasing political instability from acts of war including Russia's invasion of Ukraine, as well as supply chain disruptions and any governmental or societal responses to new COVID-19 variants; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; secondary market conditions for loans; results of examinations of the Company or its wholly owned bank subsidiary by their regulators; increased competition; changes in management's business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; and other factors described in the Company's latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other documents filed with or furnished to the Securities and Exchange Commission, which are available at www.soundcb.com and on the SEC's website at www.sec.gov. The risks inherent in these factors could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company and could negatively affect the Company's operating and stock performance. The Company does not undertake—and specifically disclaims any obligation—to revise any forward-looking statement to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statement. CONSOLIDATED INCOME STATEMENTS(Dollars in thousands, unaudited)     For the Quarter Ended     December 31,2022   September 30,2022   June 30,2022   March 31,2022   December 31,2021 Interest income   $ 11,819     $ 10,776     $ 8,986     $ 8,213     $ 8,359   Interest expense     2,131       1,179       594       595       643   Net interest income     9,688       9,597       8,392       7,618       7,716   Provision for loan losses     125       375       600       125       —   Net interest income after provision for loan losses     9,563       9,222       7,792       7,493       7,716   Noninterest income:                     Service charges and fee income     618       604       596       549       632   (Earnings) loss on cash surrender value of bank-owned life insurance     175       59       (35 )     21       135   Mortgage servicing income     303       306       313       320       323   Fair value adjustment on mortgage servicing rights     (127 )     9       57       268       (114 ) Net gain on sale of loans     49       48       84       365       507   Total noninterest income     1,018       1,026       1,015       1,523       1,483   Noninterest expense:                     Salaries and benefits     4,234       4,044       3,969       4,167       3,786   Operations     1,489       1,581       1,428      .....»»

(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).....»»

WALLA WALLA, Wash., Jan. 19, 2023 (GLOBE NEWSWIRE) -- Banner Corporation (NASDAQ GSM: BANR) ("Banner"), the parent company of Banner Bank, today reported net income of $54.4 million, or $1.58 per diluted share, for the fourth quarter of 2022, an 11% increase compared to $49.1 million, or $1.43 per diluted share, for the preceding quarter and a 9% increase compared to $49.9 million, or $1.44 per diluted share, for the fourth quarter of 2021. Banner's fourth quarter 2022 results include $6.7 million of provision for credit losses, compared to $6.1 million of provision for credit losses in the preceding quarter and $5.2 million in recapture of provision for credit losses in the fourth quarter of 2021. In addition, the current quarter included an accrual of $3.5 million of legal expense in relation to a potential settlement of a pending litigation matter. For the year ended December 31, 2022, net income decreased 3% to $195.4 million, or $5.67 per diluted share, compared to net income of $201.0 million, or $5.76 per diluted share for the prior year. Full year 2022 results include $10.4 million in provision for credit losses, compared to $33.4 million in recapture of provision for credit losses in 2021. In addition, Banner recognized a $7.8 million gain related to the branch sale completed during the second quarter of 2022. Banner announced that its Board of Directors increased its regular quarterly cash dividend by 9% to $0.48 per share. The dividend will be payable February 13, 2023, to common shareholders of record on February 02, 2023. "Banner's 2022 operating results reflect the continued successful execution of our super community bank strategy, and the benefits of implementing Banner Forward initiatives," said Mark Grescovich, President and CEO. "Our performance for the fourth quarter of 2022 benefited from solid loan growth and higher yields on interest-earning assets that led to net interest margin expansion. Our continued focus on fostering new client relationships contributed to our 13% growth in loans, excluding PPP loans, compared to 2021. Our asset sensitive balance sheet contributed to the expansion of our net interest margin. As we continue to grow, we remain true to our values and guiding principle: Do the right thing for our clients, communities, employees, and shareholders through all economic cycles." "During the fourth quarter of 2022, we published our inaugural Environmental, Social and Governance Highlights Report," said Grescovich. "This report identifies ongoing practices and recent accomplishments in the areas of environmental risk and impact management, social responsibility (including diversity, equity and inclusion) and governance. While we've been engaged in ESG activities and practices for a very long time, creating this report makes it easier to share more examples and greater detail with interested stakeholders in a single, dedicated document." The report can be found on our website, bannerbank.com/esg. "Banner Forward, our bank-wide initiative to enhance revenue growth and reduce operating expense, is having a meaningful impact on earnings," said Grescovich. "Beginning during the third quarter of 2021, Banner Forward is focused on accelerating growth in commercial banking, deepening relationships with retail clients, and advancing technology strategies to enhance our digital service channels, while streamlining underwriting and back office processes. The implementation of the revenue initiatives benefited the second half of 2022 and are expected to continue ramping up in 2023. The efficiency-related initiatives associated with Banner Forward have largely been completed. During the fourth quarter of 2022, we incurred expenses of $838,000 related to Banner Forward." At December 31, 2022, Banner Corporation had $15.83 billion in assets, $10.01 billion in net loans and $13.62 billion in deposits. Banner operates 137 full service branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population. Fourth Quarter 2022 Highlights Revenues increased 6% to $172.1 million, compared to $162.0 million in the preceding quarter, and increased 18% compared to $146.0 million in the fourth quarter a year ago. Net interest income increased 9% to $159.1 million in the fourth quarter of 2022, compared to $146.4 million in the preceding quarter and increased 31%, compared to $121.5 million in the fourth quarter a year ago. Net interest margin, on a tax equivalent basis, was 4.23%, compared to 3.85% in the preceding quarter and 3.17% in the fourth quarter a year ago. Mortgage banking revenues increased to $2.3 million, compared to $105,000 in the preceding quarter, and decreased 59% compared to $5.6 million in the fourth quarter a year ago. Return on average assets was 1.34%, compared to 1.18% in both the preceding quarter and fourth quarter a year ago. Net loans receivable increased 3% to $10.01 billion at December 31, 2022, compared to $9.69 billion at September 30, 2022, and increased 12% compared to $8.95 billion at December 31, 2021. Non-performing assets increased to $23.4 million, or 0.15% of total assets, at December 31, 2022, compared to $15.6 million, or 0.10% of total assets at September 30, 2022, and decreased slightly compared to $23.7 million, or 0.14% of total assets, at December 31, 2021. The allowance for credit losses - loans was $141.5 million, or 1.39% of total loans receivable, as of December 31, 2022, compared to $135.9 million, or 1.38% of total loans receivable as of September 30, 2022 and $132.1 million, or 1.45% of total loans receivable as of December 31, 2021. Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) decreased to $12.90 billion at December 31, 2022, compared to $13.51 billion at September 30, 2022, and $13.49 billion a year ago. Core deposits represented 95% of total deposits at December 31, 2022. Dividends paid to shareholders were $0.44 per share in the quarter ended December 31, 2022. Common shareholders' equity per share increased 3% to $42.59 at December 31, 2022, compared to $41.20 at the preceding quarter end, and decreased 14% from $49.35 a year ago. Tangible common shareholders' equity per share* increased 5% to $31.41 at December 31, 2022, compared to $29.97 at the preceding quarter end, and decreased 17% from $38.02 a year ago. *Non-GAAP (Generally Accepted Accounting Principles) measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16. Income Statement Review Net interest income was $159.1 million in the fourth quarter of 2022, compared to $146.4 million in the preceding quarter and $121.5 million in the fourth quarter a year ago. Banner's net interest margin on a tax equivalent basis was 4.23% for the fourth quarter of 2022, a 38 basis-point increase compared to 3.85% in the preceding quarter and a 106 basis-point increase compared to 3.17% in the fourth quarter a year ago. "Rising market interest rates during the quarter produced higher yields on loans and investment securities which improved our net interest margin. Our net interest margin was also enhanced by increases in average loan balances during the quarter," said Grescovich. Average yields on interest-earning assets increased 43 basis points to 4.40% for the fourth quarter of 2022, compared to 3.97% for the preceding quarter and increased 111 basis points compared to 3.29% in the fourth quarter a year ago. Since March 2022, in response to inflation, the Federal Open Market Committee ("FOMC") of the Federal Reserve System has increased the target range for the federal funds rate by 425 basis points, including 125 basis points during the fourth quarter of 2022, to a range of 4.25% to 4.50%. The increase in average yields on interest-earning assets during the current quarter reflects the benefit of variable rate interest-earning assets repricing higher, as well as new loans being originated at higher interest rates. Average loan yields increased 32 basis points to 5.14% compared to 4.82% in the preceding quarter and increased 57 basis points compared to 4.57% in the fourth quarter a year ago. The increase in average loan yields during the current quarter compared to the preceding and prior year quarters was primarily the result of rising interest rates. The year-over-year increase in average loan yields was partially offset by a decline in the recognition of deferred loan fee income due to loan repayments from U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loan forgiveness compared to the prior year quarter. Total deposit costs were 0.10% in the fourth quarter of 2022, which was a three basis-point increase compared to both the preceding quarter and fourth quarter a year ago. The total cost of funding liabilities was 0.18% during the fourth quarter of 2022, a five basis-point increase compared to 0.13% in both the preceding quarter and fourth quarter a year ago. Banner recorded a $6.7 million provision for credit losses in the current quarter (comprised of a $6.0 million provision for credit losses - loans, a $680,000 provision for credit losses - unfunded loan commitments and a $19,000 recapture of provision for credit losses - held-to-maturity debt securities). This compares to a $6.1 million provision for credit losses in the prior quarter (comprised of a $6.3 million provision for credit losses - loans, a $205,000 recapture of provision for credit losses - unfunded loan commitments and a $55,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $5.2 million recapture of provision for credit losses in the fourth quarter a year ago (comprised of an $8.1 million recapture of provision for credit losses - loans, a $2.3 million provision for credit losses - unfunded loan commitments and a $579,000 provision for credit losses - held-to-maturity debt securities). The provision for credit losses for the current and preceding quarter primarily reflects loan growth and, to a lesser extent, a deterioration in forecasted economic indicators utilized to estimate credit losses. Total non-interest income was $13.1 million in the fourth quarter of 2022, compared to $15.6 million in the preceding quarter and $24.5 million in the fourth quarter a year ago. The decrease in non-interest income during the current quarter, compared to the prior quarter was primarily due to a $628,000 decrease in deposit fees and other service charges and a $3.7 million net loss on the sale of securities recorded during the current quarter, partially offset by a $2.2 million increase in mortgage banking revenues. The decrease in non-interest income during the current quarter, compared to the prior year quarter was primarily due to a $3.3 million decrease in mortgage banking revenues, a $3.3 million decrease in miscellaneous non-interest income primarily due to a valuation adjustment recognized on the SBA servicing asset and higher gains related to SBA loans sold during the fourth quarter a year ago, and the previously mentioned net loss recognized on the sale of securities during the current quarter, partially offset by a $917,000 increase in bank-owned life insurance income. Deposit fees and other service charges were $10.8 million in the fourth quarter of 2022, compared to $11.4 million in the preceding quarter and $10.3 million in the fourth quarter a year ago. Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, were $2.3 million in the fourth quarter, compared to $105,000 in the preceding quarter and $5.6 million in the fourth quarter a year ago. The increase from the preceding quarter primarily reflects a negative fair value adjustment recognized in the previous quarter on multifamily held for sale loans. The decrease from the fourth quarter of 2021 primarily reflects a reduction in the volume and a decrease in the gain on sale margin for one- to four-family loans sold. The reduction in the volume of one-to four family loans sold primarily reflects reduced refinancing activity, as well as decreased purchase activity as interest rates increased during the current year. Home purchase activity accounted for 90% of one- to four-family mortgage loan originations in the fourth quarter of 2022, compared to 88% in the preceding quarter and was 64% in the fourth quarter of 2021. Mortgage banking revenue included a $723,000 lower of cost or market upward adjustment for the current quarter due to the transfer of multifamily held for sale loans to held for investment portfolio loans, partially offset by a negative fair value adjustment on multifamily held for sale loans. This compares to a $2.2 million lower of cost or market downward adjustment recorded during the preceding quarter on multifamily held for sale loans due to increases in market interest rates this year. Fourth quarter 2022 non-interest income also included a $157,000 net gain for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of certain investment securities held for trading and limited partnership investments, and a $3.7 million net loss on the sale of securities. In the preceding quarter, results included a $532,000 net gain for fair value adjustments and a $6,000 net gain on the sale of securities. In the fourth quarter a year ago, results included a $2.7 million net gain for fair value adjustments and a $136,000 net loss on the sale of securities. Total revenue increased 6% to $172.1 million for the fourth quarter of 2022, compared to $162.0 million in the preceding quarter, and increased 18% compared to $146.0 million in the fourth quarter of 2021. Adjusted revenue* (the total of net interest income and total non-interest income excluding the net gain or loss on the sale of securities, the net change in valuation of financial instruments, and the gain on sale of branches) was $175.7 million in the fourth quarter of 2022, compared to $161.5 million in the preceding quarter and $143.4 million in the fourth quarter a year ago. For the year ended December 31, 2022, total revenue was $628.4 million compared to $593.3 million during 2021, with adjusted revenue* totaling $623.1 million for the year ended December 31, 2022, compared to $588.2 million in 2021. Total non-interest expense was $99.0 million in the fourth quarter of 2022, compared to $95.0 million in the preceding quarter and $91.8 million in the fourth quarter of 2021. The increase in non-interest expense for the current quarter compared to the prior quarter primarily reflects a $1.1 million decrease in capitalized loan origination costs, primarily due to decreases in production for construction and land loans, a $1.5 million increase in occupancy and equipment expenses, primarily reflecting increased building rent expense due to lease buyouts during the quarter as well as weather related increases in building maintenance expense, and a $3.7 million increase in professional and legal expenses, primarily due to a $3.5 million accrual during the current quarter in relation to a potential settlement of a pending litigation matter, partially offset by a $1.3 million decrease in salary and employee benefits expense, primarily due to a decrease in commission expense. The increase in non-interest expense for the current quarter compared to the same quarter a year ago primarily reflects an increase in salary and employee benefits expense, a decrease in capitalized loan origination costs and an increase in professional and legal expenses, partially offset by a $2.3 million loss on extinguishment of debt as a result of the redemption of $8.2 million of junior subordinated debentures during fourth quarter of 2021. For the year ended December 31, 2022, total non-interest expense was $377.3 million, compared to $380.1 million in the prior year. Banner's efficiency ratio was 57.52% for the fourth quarter, compared to 58.65% in the preceding quarter and 62.88% in same quarter a year ago. Banner's adjusted efficiency ratio* was 54.43% for the fourth quarter, compared to 57.04% in the preceding quarter and 59.71% in the year ago quarter. Federal and state income tax expense totaled $12.0 million for the fourth quarter of 2022 resulting in an effective tax rate of 18.1%, reflecting the benefits from tax exempt income as well as some adjustments related to filing its annual tax returns. Banner's statutory income tax rate is 23.5%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates. * Non-GAAP measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16. Balance Sheet Review Total assets decreased 3% to $15.83 billion at December 31, 2022, compared to $16.36 billion at September 30, 2022, and decreased 6% when compared to $16.80 billion at December 31, 2021. The total of securities and interest-bearing deposits held at other banks was $4.28 billion at December 31, 2022, compared to $5.01 billion at September 30, 2022 and $6.26 billion at December 31, 2021. The decreases compared to the prior quarter and the prior year quarter were primarily due to a decrease in interest-bearing deposits. The average effective duration of Banner's securities portfolio was approximately 6.5 years at December 31, 2022, compared to 4.6 years at December 31, 2021. Total loans receivable increased to $10.15 billion at December 31, 2022, compared to $9.83 billion at September 30, 2022, and $9.08 billion at December 31, 2021. Excluding SBA PPP loans, total loans receivable increased $325.1 million from the preceding quarter and increased $1.19 billion from the fourth quarter a year ago. SBA PPP loans decreased 41% to $7.9 million at December 31, 2022, compared to $13.4 million at September 30, 2022, and decreased 94% to $133.9 million at December 31, 2021. One- to four-family residential loans increased to $1.17 billion at December 31, 2022, compared to $1.03 billion at September 30, 2022, and $657.5 million a year ago. The increase in one- to four-family residential loans from the preceding quarter was primarily the result of one- to four-family construction loans converting to one- to four-family portfolio loans as construction was completed and new production during the fourth quarter of 2022. Multifamily real estate loans increased 9% to $645.1 million at December 31, 2022, compared to $592.8 million at September 30, 2022, and increased 22% compared to $530.9 million a year ago. The current quarter increase in multifamily loans was due to transferring $54.0 million of multifamily held for sale loans to held for investment portfolio loans. Commercial real estate loans decreased slightly to $3.64 billion at December 31, 2022, compared to $3.66 billion at September 30, 2022 and decreased 4% when compared to $3.79 billion at December 31, 2021. Commercial business loans increased 4% to $2.23 billion at December 31, 2022, compared to $2.15 billion at September 30, 2022, and increased 14% compared to $1.96 billion a year ago. Excluding SBA PPP loans, commercial business loans increased 4% to $2.22 billion at December 31, 2022, compared to $2.14 billion at September 30, 2022, and increased 21% compared to $1.83 billion a year ago. Agricultural business loans decreased to $295.1 million at December 31, 2022, compared to $299.4 million at September 30, 2022, and increased from $280.6 million a year ago. Total construction, land and land development loans were $1.49 billion at December 31, 2022, a 3% increase from $1.44 billion at September 30, 2022, and a 14% increase from $1.31 billion at December 31, 2021, primarily due to an increase in multifamily construction loans. Consumer loans increased to $680.9 million at December 31, 2022, compared to $662.2 million at September 30, 2022, and increased from $555.9 million a year ago. The year-over-year increase in consumer loans was partially due to the purchase of a $25.6 million pool of consumer marine loans during the prior quarter. Loans held for sale were $56.9 million at December 31, 2022, compared to $84.4 million at September 30, 2022, and $96.5 million at December 31, 2021. The volume of one- to four- family residential mortgage loans sold was $39.3 million in the current quarter, compared to $49.7 million in the preceding quarter and $245.9 million in the fourth quarter a year ago. No multifamily loans were sold during the fourth quarter of 2022, compared to $10.5 million sold in the preceding quarter and none sold in the fourth quarter a year ago. Total deposits decreased to $13.62 billion at December 31, 2022, compared to $14.23 billion at September 30, 2022, and $14.33 billion a year ago. Non-interest-bearing account balances decreased 5% to $6.18 billion at December 31, 2022, compared to $6.51 billion at September 30, 2022, and 3% compared to $6.39 billion a year ago. Core deposits were 95% of total deposits at both December 31, 2022 and September 30, 2022 and 94% of total deposits at December 31, 2021. Certificates of deposit increased to $723.5 million at December 31, 2022, compared to $721.9 million at September 30, 2022, and decreased 14% compared to $838.6 million a year earlier. Banner had $50.0 million of FHLB borrowings at December 31, 2022, compared to none at September 30, 2022 and $50.0 million a year ago. At December 31, 2022, total common shareholders' equity was $1.46 billion, or 9.20% of assets, compared to $1.41 billion or 8.61% of assets at September 30, 2022, and $1.69 billion or 10.06% of assets a year ago. The increase in total common shareholders' equity at December 31, 2022 compared to September 30, 2022 was primarily due to a $39.1 million increase in retained earnings as a result of $54.4 million in net income, partially offset by the payment of cash dividends during the quarter. The decrease in total common shareholders' equity from December 31, 2021 reflects a $363.0 million decrease in accumulated other comprehensive income, primarily due to an increase in the unrealized loss on the security portfolio as a result of an increase in interest rates, the repurchase of 200,000 shares of common stock in the second quarter of 2022 at an average cost of $54.80 per share, and the payment of cash dividends, partially offset by a $134.5 million increase in retained earnings. At December 31, 2022, tangible common shareholders' equity*, which excludes goodwill and other intangible assets, net, was $1.07 billion, or 6.95% of tangible assets*, compared to $1.02 billion, or 6.41% of tangible assets, at September 30, 2022, and $1.30 billion, or 7.93% of tangible assets, a year ago. Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as "well-capitalized." At December 31, 2022, Banner's estimated common equity Tier 1 capital ratio was 11.44%, its estimated Tier 1 leverage capital to average assets ratio was 9.45%, and its estimated total capital to risk-weighted assets ratio was 14.04%. These regulatory capital ratios are estimates, pending completion and filing of Banner's regulatory reports. * Non-GAAP measure; see the discussion and reconciliation of Non-GAAP Financial Measures beginning on page 16. Credit Quality The allowance for credit losses - loans was $141.5 million, or 1.39% of total loans receivable and 615% of non-performing loans, at December 31, 2022, compared to $135.9 million, or 1.38% of total loans receivable and 895% of non-performing loans, at September 30, 2022, and $132.1 million, or 1.45% of total loans receivable and 578% of non-performing loans, at December 31, 2021. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $14.7 million at December 31, 2022, compared to $14.0 million at September 30, 2022 and $12.4 million at December 31, 2021. Net loan charge-offs totaled $496,000 in the fourth quarter of 2022, compared to net loan recoveries of $869,000 in the preceding quarter and $311,000 in the fourth quarter a year ago. Non-performing loans were $23.0 million at December 31, 2022, compared to $15.2 million at September 30, 2022, and $22.8 million a year ago. Banner's total substandard loans were $137.2 million at December 31, 2022, compared to $136.4 million at September 30, 2022, and $198.4 million a year ago. The year over year decrease primarily reflects the payoff of substandard loans as well as risk rating upgrades during the current year. Banner's total non-performing assets were $23.4 million, or 0.15% of total assets, at December 31, 2022, compared to $15.6 million, or 0.10% of total assets, at September 30, 2022, and $23.7 million, or 0.14% of total assets, a year ago. Conference Call Banner will host a conference call on Friday January 20, 2023, at 8:00 a.m. PST, to discuss its fourth quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (844) 200-6205 using access code 188909 to participate in the call. A replay will be available for one week at (866) 813-9403 using access code 733055 or at www.bannerbank.com. About the Company Banner Corporation is a $15.83 billion bank holding company operating one commercial bank in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com. Forward-Looking Statements When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "may," "believe," "will," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," "potential," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner's operating and stock price performance. Factors that could cause Banner's actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: (1) potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth caused by increasing political instability from acts of war including Russia's invasion of Ukraine, as well as increasing oil prices and supply chain disruptions, and any governmental or societal responses to the COVID-19 pandemic, including the possibility of new COVID-19 variants; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner's activities; (4) competitive pressures among depository institutions; (5) the effect of inflation on interest rate movements and their impact on client behavior and net interest margin; (6) the transition away from the London Interbank Offered Rate (LIBOR) toward new interest rate benchmarks; (7) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet clients' needs and developments in the market place; (10) the ability to access cost-effective funding; (11) disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (12) changes in financial markets; (13) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular, including the risk of inflation; (14) the costs, effects and outcomes of litigation; (15) legislation or regulatory changes, including but not limited to changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (16) changes in accounting principles, policies or guidelines; (17) future acquisitions by Banner of other depository institutions or lines of business; (18) future goodwill impairment due to changes in Banner's business or changes in market conditions; (19) the costs associated with Banner Forward; (20) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (21) other risks detailed from time to time in Banner's filings with the Securities and Exchange Commission including Banner's Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. RESULTS OF OPERATIONS Quarters Ended   Years Ended (in thousands except shares and per share data) Dec 31, 2022   Sep 30, 2022   Dec 31, 2021   Dec 31, 2022   Dec 31, 2021 INTEREST INCOME:                   Loans receivable $ 129,450     $ 116,610     $ 104,929     $ 450,916     $ 445,731   Mortgage-backed securities   19,099       17,558       13,220       67,585       45,723   Securities and cash equivalents   17,009       16,951       8,397       54,068       29,046       165,558       151,119       126,546       572,569       520,500   INTEREST EXPENSE:                   Deposits   3,623       2,407       2,384       10,124       11,770   Federal Home Loan Bank advances   198       —       348       489       2,592   Other borrowings   132       81       109       377       467   Subordinated debt   2,534       2,188       2,175       8,400       8,780       6,487       4,676       5,016       19,390       23,609   Net interest income   159,071       146,443       121,530       553,179       496,891   PROVISION (RECAPTURE) FOR CREDIT LOSSES   6,704       6,087       (5,243 )     10,364       (33,388 ) Net interest income after provision (recapture) for credit losses   152,367       140,356       126,773       542,815       530,279   NON-INTEREST INCOME:                   Deposit fees and other service charges   10,821       11,449       10,341       44,459       39,495   Mortgage banking operations   2,311       105       5,643       10,834       33,948   Bank-owned life insurance   2,120       1,804       1,203       7,794       5,000   Miscellaneous   1,382       1,689       4,702       6,805       12,875       16,634       15,047       21,889       69,892       91,318   Net (loss) gain on sale of securities   (3,721 )     6       (136 )     (3,248 )     482   Net change in valuation of financial instruments carried at fair value   157       532       2,721       807       4,616   Gain on sale of branches, including related deposits   —       —       —       7,804       —   Total non-interest income   13,070       15,585       24,474       75,255       96,416   NON-INTEREST EXPENSE:                   Salary and employee benefits   60,309       61,639       57,798       242,266       244,351   Less capitalized loan origination costs   (4,877 )     (5,984 )     (7,647 )     (24,313 )     (34,401 ) Occupancy and equipment   13,506       12,008       13,885       52,018       52,850   Information and computer data services   6,535       6,803       6,441       25,986       24,356   Payment and card processing services   5,109       5,508       5,062       21,195       20,544   Professional and legal expenses   6,328       2,619       2,251       14,005       22,274   Advertising and marketing   1,350       1,326       2,071       3,959       6,036   Deposit insurance   1,739       1,946       1,340       6,649       5,583   State and municipal business and use taxes   1,304       1,223       976       4,693       4,343   Real estate operations, net   28       68       49       (104 )     (22 ) Amortization of core deposit intangibles   1,215       1,215       1,574       5,279       6,571   Loss on extinguishment of debt   —       —       2,284       793       2,284   Miscellaneous   6,467       6,663       5,594       24,869       24,236       99,013       95,034       91,678       377,295       379,005   COVID-19 expenses   —       —       127       —       436   Merger and acquisition-related expenses   —       —       —       —       660   Total non-interest expense   99,013       95,034       91,805       377,295       380,101   Income before provision for income taxes   66,424       60,907       59,442       240,775       246,594   PROVISION FOR INCOME TAXES   12,044       11,837       9,515       45,397       45,546   NET INCOME $ 54,380     $ 49,070     $ 49,927     $ 195,378     $ 201,048   Earnings per common share:                   Basic $ 1.59     $ 1.43     $ 1.46     $ 5.70     $ 5.81   Diluted $ 1.58     $ 1.43     $ 1.44     $ 5.67     $ 5.76   Cumulative dividends declared per common share $ 0.44     $ 0.44     $ 0.41     $ 1.76     $ 1.64   Weighted average number of common shares outstanding:                   Basic   34,226,162       34,224,640       34,292,967       34,264,322       34,610,056   Diluted   34,437,151       34,416,017       34,575,607       34,459,922       34,919,188   Increase (decrease) in common shares outstanding   2,259       429       641       (58,614 )     (906,568 ) FINANCIAL CONDITION             Percentage Change (in thousands except shares and per share data) Dec 31, 2022   Sep 30, 2022   Dec 31, 2021   Prior Qtr   Prior Yr Qtr                     ASSETS                   Cash and due from banks $ 198,154     $ 273,052     $ 358,461     (27.4 )%   (44.7 )% Interest-bearing deposits   44,908       548,869       1,775,839     (91.8 )%   (97.5 )% Total cash and cash equivalents   243,062       821,921       2,134,300     (70.4 )%   (88.6 )% Securities - trading   28,694       28,383       26,981     1.1 %   6.3 % Securities - available for sale   2,789,031       2,996,173       3,638,993     (6.9 )%   (23.4 )% Securities - held to maturity   1,117,588       1,132,852       520,922     (1.3 )%   114.5 % Total securities   3,935,313       4,157,408       4,186,896     (5.3 )%   (6.0 )% Federal Home Loan Bank (FHLB) stock   12,000       10,000       12,000     20.0 %   — % Securities purchased under agreements to resell   300,000       300,000       300,000     — %   — % Loans held for sale   56,857       84,358       96,487     (32.6 )%   (41.1 )% Loans receivable   10,146,724       9,827,096       9,084,763     3.3 %   11.7 % Allowance for credit losses – loans   (141,465 )     (135,918 )     (132,099 )   4.1 %   7.1 % Net loans receivable   10,005,259       9,691,178       8,952,664     3.2 %   11.8 % Accrued interest receivable   57,284       50,689       42,916     13.0 %   33.5 % Real estate owned (REO) held for sale, net   340       340       852     — %   (60.1 )% Property and equipment, net   138,754       141,280       148,759     (1.8 )%   (6.7 )% Goodwill   373,121       373,121       373,121     — %   — % Other intangibles, net   9,440       10,655       14,855     (11.4 )%   (36.5 )% Bank-owned life insurance   297,565       295,443       244,156     0.7 %   21.9 % Operating lease right-of-use assets   49,283       51,908       55,257     (5.1 )%   (10.8 )% Other assets   355,153       372,508       242,609     (4.7 )%   46.4 % Total assets $ 15,833,431     $ 16,360,809     $ 16,804,872     (3.2 )%   (5.8 )% LIABILITIES                   Deposits:                   Non-interest-bearing $ 6,176,998     $ 6,507,523     $ 6,385,177     (5.1 )%   (3.3 )% Interest-bearing transaction and savings accounts   6,719,531       7,004,799       7,103,125     (4.1 )%   (5.4 )% Interest-bearing certificates   723,530       721,944       838,631     0.2 %   (13.7 )% Total deposits   13,620,059       14,234,266       14,326,933     (4.3 )%   (4.9 )% Advances from FHLB   50,000       —       50,000     — %   — % Other borrowings   232,799       234,006       264,490     (0.5 )%   (12.0 )% Subordinated notes, net   98,947       98,849       98,564     0.1 %   0.4 % Junior subordinated debentures at fair value   74,857       73,841       119,815     1.4 %   (37.5 )% Operating lease liabilities   55,205       58,031       59,756     (4.9 )%   (7.6 )% Accrued expenses and other liabilities   200,839       209,226       148,303     (4.0 )%   35.4 % Deferred compensation   44,293       43,931       46,684     0.8 %   (5.1 )% Total liabilities   14,376,999       14,952,150       15,114,545     (3.8 )%   (4.9 )% SHAREHOLDERS' EQUITY                   Common stock   1,293,959       1,291,741       1,299,381     0.2 %   (0.4 )% Retained earnings   525,242       486,108       390,762     8.1 %   34.4 % Accumulated other comprehensive (loss) income   (362,769 )     (369,190 )     184     (1.7 )%   nm Total shareholders' equity   1,456,432       1,408,659       1,690,327     3.4 %   (13.8 )% Total liabilities and shareholders' equity $ 15,833,431     $ 16,360,809     $ 16,804,872     (3.2 )%   (5.8 )% Common Shares Issued:                   Shares outstanding at end of period   34,194,018       34,191,759       34,252,632           Common shareholders' equity per share (1) $ 42.59     $ 41.20     $ 49.35           Common shareholders' tangible equity per share (1) (2) $ 31.41     $ 29.97     $ 38.02           Common shareholders' tangible equity to tangible assets (2)   6.95 %     6.41 %     7.93 %         Consolidated Tier 1 leverage capital ratio   9.45 %     9.06 %     8.76 %         (1 ) Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding. (2 ) Common shareholders' tangible equity excludes goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures. See also Non-GAAP Financial Measures reconciliation tables on the final two pages of the press release tables. ADDITIONAL FINANCIAL INFORMATION                   (dollars in thousands)                                 Percentage Change LOANS (1) Dec 31, 2022   Sep 30, 2022   Dec 31, 2021   Prior Qtr   Prior Yr Qtr                     Commercial real estate (CRE):                   Owner-occupied $ 845,320     $ 862,792     $ 831,623     (2.0 )%  .....»»

SEATTLE, Oct. 25, 2022 (GLOBE NEWSWIRE) -- Sound Financial Bancorp, Inc. (NASDAQ:SFBC), the holding company (the "Company") for Sound Community Bank (the "Bank"), today reported net income of $2.5 million for the quarter ended September 30, 2022, or $0.97 diluted earnings per share, as compared to net income of $1.6 million, or $0.61 diluted earnings per share, for the quarter ended June 30, 2022, and $2.6 million, or $0.98 diluted earnings per share, for the quarter ended September 30, 2021. The Company also announced today that the Board of Directors declared a cash dividend on Company common stock of $0.17 per share, payable on November 23, 2022 to stockholders of record as of the close of business on November 9, 2022.   Comments from the President and Chief Executive Officer "Consistent loan origination across all categories increased our average loan balance from $742 million for the three months ended June 30, 2022 to $833 million for the three months ended September 30, 2022," remarked Ms. Stewart, President and Chief Executive Officer. "This portfolio growth contributed to an improved net interest margin of 4.13% for the current quarter, despite deposit pricing and borrowings being higher than they were at the end of the second quarter of 2022," concluded Stewart. Q3 2022 Financial Performance Total assets increased $45.2 million or 4.8% to $982.2 million at September 30, 2022, from $937.0 million at June 30, 2022, and increased $54.1 million or 5.8% from $928.1 million at September 30, 2021.     Net interest income increased $1.2 million or 14.4% to $9.6 million for the quarter ended September 30, 2022, from $8.4 million for the quarter ended June 30, 2022, and increased $1.3 million or 15.4% from $8.3 million for the quarter ended September 30, 2021.         Net interest margin ("NIM"), annualized, was 4.13% for the quarter ended September 30, 2022, compared to 3.83% for the quarter ended June 30, 2022 and 3.74% for the quarter ended September 30, 2021. Loans held-for-portfolio increased $45.4 million or 5.6% to $851.4 million at September 30, 2022, compared to $806.1 million at June 30, 2022, and increased $183.9 million or 27.5% from $667.6 million at September 30, 2021. These increases are the result of organic loan growth and, coupled with a competitive deposit market, increased our loan-to-deposit ratio to 105% at September 30, 2022 from 103% at June 30, 2022 and 83% at September 30, 2021.         A $375 thousand provision for loan losses was recorded for the quarter ended September 30, 2022, compared to a $600 thousand provision for loan losses for the quarter ended June 30, 2022 and a $175 thousand for the quarter ended September 30, 2021. The allowance for loan losses to total nonperforming loans was 301.24% and to total loans was 0.88% at September 30, 2022.     Total deposits increased $29.4 million or 3.7% to $815.4 million at September 30, 2022, from $786.0 million at June 30, 2022, and increased $7.7 million or 1.0% from $807.7 million at September 30, 2021. Noninterest-bearing deposits increased $5.7 million or 3.0% to $192.3 million at September 30, 2022 compared to $186.6 million at June 30, 2022, and decreased $2.6 million or 1.3% compared to $194.8 million at September 30, 2021.         Net gain on sale of loans was $48 thousand for the quarter ended September 30, 2022, compared to $84 thousand for the quarter ended June 30, 2022 and $568 thousand for the quarter ended September 30, 2021.           The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at September 30, 2022. Total nonperforming loans decreased $2.0 million or 44.9% to $2.5 million at September 30, 2022, from $4.5 million at June 30, 2022, and decreased $582 thousand or 19.0% from $3.1 million at September 30, 2021.     Operating Results Net interest income increased $1.2 million, or 14.4%, to $9.6 million for the quarter ended September 30, 2022, compared to $8.4 million for the quarter ended June 30, 2022, and increased $1.3 million, or 15.4%, from $8.3 million for the quarter ended September 30, 2021. The increase from both prior quarters was primarily the result of a higher average balance of and yield earned on average interest-earning assets, partially offset by the higher average balance of and rate paid on average interest-bearing liabilities. Interest income increased $1.8 million, or 19.9%, to $10.8 million for the quarter ended September 30, 2022, compared to $9.0 million for the quarter ended June 30, 2022 and increased $1.7 million, or 18.4%, from $9.1 million for the quarter ended September 30, 2021. The increase from the prior quarter was primarily due to higher average loan balances, a 22 basis point rate increase in the average yield on loans and a 116 basis point rate increase in the average yield on investments and interest-bearing cash following recent increases in the targeted federal funds rate, partially offset by lower average investments and interest-bearing cash balances. The increase in interest income from the same quarter last year was due primarily to higher average loan balances and a 177 basis point increase in average yield on investments and interest-bearing cash, partially offset by a 54 basis point decline in the average loan yield and a lower average balance of investments and interest-bearing cash. Interest income on loans increased $1.6 million, or 18.7%, to $10.3 million for the quarter ended September 30, 2022, compared to $8.7 million for the quarter ended June 30, 2022, and increased $1.4 million, or 15.2%, from $9.0 million for the quarter ended September 30, 2021. The average balance of total loans was $833.2 million for the quarter ended September 30, 2022, compared to $741.6 million for the quarter ended June 30, 2022 and $652.3 million for the quarter ended September 30, 2021. The average yield on total loans was 4.92% for the quarter ended September 30, 2022, compared to 4.70% for the quarter ended June 30, 2022 and 5.45% for the quarter ended September 30, 2021. The increase in the average yield on loans during the current quarter compared to the prior quarter was primarily due to variable rate loans adjusting to higher market interest rates and new loan originations at higher interest rates. The decrease in the average yield on loans during the current quarter compared to the same quarter in 2021 was primarily due to lower recognition of net deferred fees due to a reduced volume of PPP loan repayments from U.S. Small Business Administration's ("SBA") loan forgiveness. The Bank recognized $24 thousand, $40 thousand, and $1.1 million in deferred fees and interest income related to PPP loan forgiveness repayments during the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively. Refer to the discussion below for the impact of PPP on our net interest margin. Interest income on investments and interest-bearing cash increased $160 thousand to $449 thousand for the quarter ended September 30, 2022, compared to $289 thousand for the quarter ended June 30, 2022, and increased $314 thousand from $135 thousand for the quarter ended September 30, 2021. These increases were both due to a higher average yield for investments and interest-bearing cash, partially offset by a lower average balance as excess cash liquidity was deployed into higher yielding loans. Interest expense increased $585 thousand, or 98.5%, to $1.2 million for the quarter ended September 30, 2022, compared to $594 thousand for the quarter ended June 30, 2022, and increased $394 thousand, or 50.2%, from $785 thousand for the quarter ended September 30, 2021. The increase in interest expense during the current quarter from the prior quarter was primarily the result of a $44.0 million increase in the average balance of borrowings, comprised of Federal Home Loan Bank ("FHLB") advances, and a $34.6 million increase in the average balance of certificate accounts, as well as higher rates paid on all interest-bearing deposits, partially offset by a $28.9 million decrease in the average balance of interest-bearing deposits other than certificate accounts. Compared to the prior period, total deposit costs were negatively impacted by the 20 basis point increase in the average cost of interest-bearing deposits resulting from higher rates paid on deposits and the $3.5 million decrease in the average balance of noninterest bearing deposits to $189.4 million for the three months ended September 30, 2022, compared to $192.8 million for the three months ended June 30, 2022. The increase in interest expense during the current quarter from the comparable period a year ago was primarily the result of a $46.5 million increase in the average balance of borrowings and higher rates paid on all interest-bearing deposits, partially offset by a $17.3 million decrease in the average balance of interest-bearing deposits. Compared to the same period last year, total deposit costs were negatively impacted by the higher rates paid on deposits and favorably impacted by the $6.9 million increase in the average balance of noninterest bearing deposits from $182.5 million at September 30, 2021. The average cost of total borrowings, comprised of borrowings and subordinated notes, decreased to 3.06% for the quarter ended September 30, 2022, from 5.13% for the quarter ended June 30, 2022, and decreased from 5.74% for the quarter ended September 30, 2021, reflecting the increased use of lower cost FHLB advances during the third quarter to supplement our liquidity needs. The average balance of our total borrowings increased $44.1 million to $58.1 million from $14.1 million for the quarter ended June 30, 2022, and increased $46.5 million from $11.6 million for the quarter ended September 30, 2021. Net interest margin (annualized) was 4.13% for the quarter ended September 30, 2022, compared to 3.83% for the quarter ended June 30, 2022 and 3.74% for the quarter ended September 30, 2021. These increases in net interest margin were primarily due to the higher interest income earned on interest-earning assets, driven by the higher average balance of loans and the increased average yield earned on investments and interest-bearing cash and, with respect to the same quarter a year ago, partially offset by lower recognition of net deferred fees related to PPP loan repayments from SBA loan forgiveness. During the third quarter of 2022, the average yield earned on PPP loans, including the recognition of the net deferred fees for PPP loans repaid and forgiven by the SBA, resulted in positive impact of one basis point to the net interest margin, compared to a positive impact of one basis point during the quarter ended June 30, 2022, and a positive impact of 41 basis points during the quarter ended September 30, 2021. The Company recorded a provision for loan losses of $375 thousand for the quarter ended September 30, 2022, as compared to $600 thousand for the quarter ended June 30, 2022 and $175 thousand for the quarter ended September 30, 2021. The decrease in the provision for loan losses for the quarter ended September 30, 2022 compared to the quarter ended June 30, 2022 resulted primarily from the lower growth in our loans held-for-portfolio, partially offset by a qualitative adjustment to manufactured home loans increasing the amount of the allowance for loan losses attributable to these loans. The provision for loan losses in the third quarter of 2022 also reflects the inherent uncertainty related to the economic environment as a result of local, national and global events. Noninterest income remained essentially unchanged at $1.0 million for both quarters ended September 30, 2022 and June 30, 2022, and decreased $405 thousand, or 28.3%, from $1.4 million for the quarter ended September 30, 2021. The decrease in noninterest income from the comparable period in 2021 was primarily due to a $520 thousand decrease in net gain on sale of loans as a result of a decline in both the amount of loans originated for sale and gross margins for loans sold and a $45 thousand decrease in earnings on the cash surrender value of bank-owned life insurance ("BOLI"), partially offset by a $134 thousand increase in the fair value adjustment on mortgage servicing rights due primarily from the effects of recent higher market interest rates causing a reduction in prepayment speeds. In addition, service charges and fee income increased $48 thousand primarily resulting from higher commercial loan and consumer deposit activity fees. Loans sold during the quarter ended September 30, 2022, totaled $2.3 million, compared to $2.9 million and $20.3 million during the quarters ended June 30, 2022 and September 30, 2021, respectively. Noninterest expense increased $252 thousand, or 3.7%, to $7.0 million for the quarter ended September 30, 2022, compared to $6.8 million for the quarter ended June 30, 2022 and increased $718 thousand, or 11.4%, from $6.3 million for the quarter ended September 30, 2021. The increase from the quarter ended June 30, 2022 was a result of an increase in operations expense of $153 thousand primarily due to increases in various expenses including marketing and charitable expenses, insurance costs, and professional fees, and an increase in salaries and benefits expense of $75 thousand resulting from lower deferred compensation, partially offset by a decrease in incentive compensation expense as a result of a lower percentage allocated and changes to the incentive compensation programs. The increase in noninterest expense compared to the quarter ended September 30, 2021 was primarily due to an increase in salaries and benefits of $532 thousand primarily due to higher wages and medical expenses and lower deferred compensation, partially offset by a decrease in incentive compensation as a result of a lower percentage allocated and changes to the incentive compensation programs and lower commission expense related to a decline in mortgage originations. Operations expense increased $115 thousand compared to the quarter ended September 30, 2021 due to increases in various accounts including marketing and travel expenses, legal fees associated with higher commercial loan volume, and debit card processing, partially offset by lower loan origination costs due to lower mortgage origination volume. The efficiency ratio for the quarter ended September 30, 2022 was 66.23%, compared to 72.12% for the quarter ended June 30, 2022 and 64.81% for the quarter ended September 30, 2021. The improvement in the efficiency ratio for the current quarter compared to the prior quarter is primarily due to higher net interest income from an increase in average balance of loans held-for-portfolio and a higher rate earned on reserve balances, partially offset by higher noninterest expense from reduced salaries and benefits costs. The weakening in the efficiency ratio for the current quarter compared to the same period in the prior year is primarily due to higher noninterest expense related to increased salaries and benefits and lower noninterest income primarily due to lower gain on sale of loans from mortgage banking, partially offset by higher net interest income primarily as a result of a higher average balance of loans held-for-portfolio at higher yields than prior investments. Balance Sheet Review, Capital Management and Credit Quality Assets at September 30, 2022 totaled $982.2 million, compared to $937.0 million at June 30, 2022 and $928.1 million at September 30, 2021. The increase in assets from the sequential quarter was primarily due to an increase in loans held-for-portfolio and investments, partially offset by a decrease in cash and cash equivalents. The loan growth primarily was funded by an increase of $29.4 million in deposits and a $44.5 million increase in FHLB advances. The increase from one year ago was primarily a result of increases in loans held-for-portfolio and investment securities, partially offset by lower balances in cash and cash equivalents. Cash and cash equivalents decreased $4.0 million, or 5.0%, to $76.1 million at September 30, 2022, compared to $80.1 million at June 30, 2022, and decreased $130.6 million, or 63.2%, from $206.7 million at September 30, 2021. The decrease from the prior quarter-end was primarily due to the deployment of excess liquidity into higher yielding loans, partially offset by an increase in deposits, primarily related to increases in certificate accounts. The decrease from one year ago was primarily due to deploying cash earning a nominal yield into higher interest-earning loans and investments securities. Investment securities increased $1.0 million, or 8.7%, to $12.6 million at September 30, 2022, compared to $11.6 million at June 30, 2022, and increased $5.5 million, or 78.5%, from $7.1 million at September 30, 2021. Held-to-maturity securities totaled $2.2 million at both September 30, 2022 and June 30, 2022, and totaled none at September 30, 2021. Available-for-sale securities totaled $10.4 million at September 30, 2022, compared to $9.4 million at June 30, 2022, and $7.1 million at September 30, 2021. The increase in available-for-sale securities from the prior quarter was primarily due to $1.6 million of investment purchases, partially offset by net unrealized losses resulting from the increases in market interest rates during the year and regularly scheduled payments. The increase from the same period one year ago was primarily due to investment purchases throughout the previous year, partially offset by calls of securities, regularly scheduled payments and maturities, and net unrealized losses resulting from the increases in market interest rates during the year. Loans held-for-portfolio increased to $851.4 million at September 30, 2022, compared to $806.1 million at June 30, 2022 and increased from $667.6 million at September 30, 2021. The increase in loans held-for-portfolio at September 30, 2022, compared to the prior quarter and one year ago, primarily resulted from increases across all loan categories, excluding commercial business loans which decreased between the periods due primarily to PPP loan SBA loan forgiveness payments. The increase in loans held-for-portfolio primarily resulted from focused marketing campaigns, increased utilization of digital marketing tools and the addition of experienced lending staff during 2021. Nonperforming assets ("NPAs"), which are comprised of nonaccrual loans, including nonperforming troubled debt restructurings ("TDRs"), other real estate owned ("OREO"), and other repossessed assets, decreased $2.0 million, or 39.1%, to $3.1 million at September 30, 2022, from $5.2 million at June 30, 2022 and decreased $583 thousand, or 15.6% from $3.7 million at September 30, 2021. The decrease in nonperforming assets during the current quarter compared to the prior quarter primarily was due to the payoff of a $2.3 million nonperforming multifamily loan during the period. Loans classified as TDRs totaled $2.0 million, $2.0 million and $2.6 million at September 30, 2022, June 30, 2022 and September 30, 2021, respectively, of which $108 thousand, $128 thousand and $411 thousand, respectively, were not performing pursuant to their contractual repayment terms at those dates. NPAs to total assets were 0.32%, 0.55% and 0.40% at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. The allowance for loan losses to total loans outstanding was 0.88%, 0.88% and 0.95% at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. Net loan charge-offs during the third quarter of 2022 totaled $3 thousand compared to net recoveries of $110 thousand for the second quarter of 2022, and net charge-offs of $5 thousand for the third quarter of 2021. The following table summarizes our NPAs (dollars in thousands):   September 30, 2022   June 30, 2022   March 31, 2022   December 31, 2021   September 30, 2021 Nonperforming Loans:                   One-to-four family $ 1,960     $ 1,669     $ 1,676     $ 2,207     $ 1,915   Home equity loans   133       152       155       140       150   Commercial and multifamily   —       2,307       2,336       2,380       —   Construction and land   29       30       31       33       220   Manufactured homes   99       117       135       122       98   Floating homes   —       —       —       493       504   Commercial business   —       —       170       176       182   Other consumer   265       233       244       —       —   Total nonperforming loans   2,486       4,509       4,747       5,552       3,069   OREO and Other Repossessed Assets:                   One-to-four family   84       84       84       84       84   Commercial and multifamily   575       575       575       575       575   Total OREO and repossessed assets   659       659       659       659       659   Total nonperforming assets $ 3,145     $ 5,168     $ 5,406     $ 6,211     $ 3,728                       Nonperforming Loans:                   One-to-four family   62.3 %     32.3 %     31.0 %     35.5 %     51.4 % Home equity loans   4.2       2.9       2.9       2.3       4.0   Commercial and multifamily   —       44.7       43.2       38.3       —   Construction and land   0.9       0.6       0.6       0.5       5.9   Manufactured homes   3.2       2.3       2.5       2.0       2.6   Floating homes   —       —       —       7.9       13.5   Commercial business   —       —       3.1       2.8       4.9   Other consumer   8.4       4.5       4.5       —       —   Total nonperforming loans   79.0       87.3       87.8       89.3       82.3   OREO and Other Repossessed Assets:                   One-to-four family   2.7       1.6       1.6       1.4       2.3   Commercial and multifamily   18.3       11.1       10.6       9.3       15.4   Total OREO and repossessed assets   21.0       12.7       12.2       10.7       17.7   Total nonperforming assets   100.0 %     100.0 %     100.0 %     100.0 %     100.0 % The following table summarizes the allowance for loan losses (dollars in thousands, unaudited):   For the Quarter Ended:   September 30, 2022   June 30, 2022   March 31, 2022   December 31, 2021   September 30, 2021 Allowance for Loan Losses                   Balance at beginning of period $ 7,117     $ 6,407     $ 6,306     $ 6,327     $ 6,157   Provision for loan losses during the period   375       600       125       —       175   Net recoveries/(charge-offs) during the period   (3 )     110       (24 )     (21 )     (5 ) Balance at end of period $ 7,489     $ 7,117     $ 6,407     $ 6,306     $ 6,327   Allowance for loan losses to total loans   0.88 %     0.88 %     0.90 %     0.92 %     0.95 % Allowance for loan losses to total nonperforming loans   301.25 %     157.84 %     134.97 %     113.58 %     206.16 % Deposits increased $29.4 million, or 3.7%, to $815.4 million at September 30, 2022, compared to $786.0 million at June 30, 2022 and increased $7.7 million, or 1.0%, from $807.7 million at September 30, 2021. The increase in deposits compared to the prior quarter and the same quarter one year ago was primarily a result of an increase in certificate accounts. The increase in our certificate accounts was primarily used to fund organic loan growth. Our noninterest-bearing deposits increased $5.7 million, or 3.0% to $192.3 million at September 30, 2022, compared to $186.6 million at June 30, 2022 and decreased $2.6 million, or 1.3% from $194.8 million at September 30, 2021. Noninterest-bearing deposits represented 23.6%, 23.7% and 24.1% of total deposits at September 30, 2022, June 30, 2022 and September 30, 2021, respectively. There were $44.5 million of outstanding FHLB advances at September 30, 2022, as compared to $30.0 million at June 30, 2022 and none at September 30, 2021. The increase in FHLB advances was primarily used to support organic loan growth and to maintain liquidity ratios in line with our asset/liability objectives. Subordinated notes, net totaled $11.7 million at each of September 30, 2022, June 30, 2022 and September 30, 2021. Stockholders' equity totaled $95.0 million at September 30, 2022, an increase of $1.9 million, or 2.0%, from $93.1 million at June 30, 2022, and an increase of $3.1 million, or 3.3%, from $91.9 million at September 30, 2021. The increase in stockholders' equity from June 30, 2022 was primarily the result of $2.5 million of net income earned during the current quarter and $110 thousand in proceeds from exercises of common stock, partially offset by the payment of $440 thousand in dividends to Company stockholders and a $316 thousand increase in accumulated other comprehensive loss, net of tax, resulting from the effects of higher interest rates on the fair value of our available-for-sale securities. Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, and is headquartered in Seattle, Washington with full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one Loan Production Office located in the Madison Park neighborhood of Seattle, Washington. For more information, please visit www.soundcb.com. Forward Looking Statement Disclaimer When used in filings by Sound Financial Bancorp, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events, and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors illustrated below or because of other important factors that we cannot foresee that could cause our actual results to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Factors which could cause actual results to differ materially, include, but are not limited to: potential adverse impacts to economic conditions in the Company's local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth caused by increasing political instability from acts of war including Russia's invasion of Ukraine, as well as increasing oil prices and supply chain disruptions, and any governmental or societal responses to the COVID-19 pandemic, including the possibility of new COVID-19 variants; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; secondary market conditions for loans; results of examinations of the Company or its wholly owned bank subsidiary by their regulators; increased competition; changes in management's business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; and other factors described in the Company's latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission – which are available at www.soundcb.com and on the SEC's website at www.sec.gov. Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause the Company's actual results for 2022 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of the Company and could negatively affect its operating and stock performance. CONSOLIDATED INCOME STATEMENTS(Dollars in thousands, unaudited)   For the Quarter Ended   September 30, 2022   June 30, 2022   March 31, 2022   December 31, 2021   September 30, 2021 Interest income $ 10,776   $ 8,986     $ 8,213   $ 8,359     $ 9,102   Interest expense   1,179     594       595     643       785   Net interest income   9,597     8,392       7,618     7,716       8,317   Provision for loan losses   375     600       125     —       175   Net interest income after provision for loan losses   9,222     7,792       7,493     7,716       8,142   Noninterest income:                   Service charges and fee income   604     596       549     632       556   (Earnings) loss on cash surrender value of bank-owned life insurance   59     (35 )     21     135       104   Mortgage servicing income   306.....»»

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.....»»

SEATTLE, July 26, 2022 (GLOBE NEWSWIRE) -- Sound Financial Bancorp, Inc. (NASDAQ:SFBC), the holding company (the "Company") for Sound Community Bank (the "Bank"), today reported net income of $1.6 million for the quarter ended June 30, 2022, or $0.61 diluted earnings per share, as compared to net income of $1.7 million, or $0.65 diluted earnings per share for the quarter ended March 31, 2022, and $2.3 million, or $0.85 diluted earnings per share for the quarter ended June 30, 2021. The Company also announced today that the Board of Directors has declared a cash dividend on Company common stock of $0.17 per share, payable on August 23, 2022 to stockholders of record as of the close of business on August 9, 2022. Comments from the President and Chief Executive Officer "Our quarterly loan growth of $96.6 million, or 13.6% over the prior quarter, was funded with our excess liquidity and returned our balance sheet composition and loan to deposit ratios to pre-pandemic levels," remarked Ms. Stewart, President and Chief Executive Officer. "The result was a significant increase in net interest income quarter over quarter and an improved net interest margin. While economic headwinds appear on the horizon, our credit quality remains sound and we repositioned staff to originate and manage our portfolio loan growth," concluded Stewart. Q2 2022 Financial Performance Total assets decreased $21.9 million or 2.3% to $937.0 million at June 30, 2022, from $958.9 million at March 31, 2022, and increased $13.8 million or 1.5% from $923.2 million at June 30, 2021.     Net interest income increased $774 thousand or 10.2% to $8.4 million for the quarter ended June 30, 2022, from $7.6 million for the quarter ended March 31, 2022, and increased $1.0 million or 14.2% from $7.4 million for the quarter ended June 30, 2021.         Net interest margin ("NIM"), annualized, was 3.83% for the quarter ended June 30, 2022, compared to 3.49% for the quarter ended March 31, 2022 and 3.36% for the quarter ended June 30, 2021. Loans held-for-sale decreased $1.2 million or 92.3% to $100 thousand at June 30, 2022, compared to $1.3 million at March 31, 2022 and decreased $3.6 million or 97.3% from $3.7 million at June 30, 2021.           A $600 thousand provision for loan losses was recorded for the quarter ended June 30, 2022, compared to $125 thousand provision for loan losses for the quarter ended March 31, 2022 and $250 thousand for the quarter ended June 30, 2021. The allowance for loan losses to total nonperforming loans was 157.85% and to total loans was 0.88% at June 30, 2022. Loans held-for-portfolio increased $96.6 million or 13.6% to $806.1 million at June 30, 2022, compared to $709.5 million at March 31, 2022, and increased $166.4 million or 26.0% from $639.6 million at June 30, 2021. Paycheck Protection Program ("PPP") loans totaled $429 thousand at June 30, 2022, compared to $2.1 million at March 31, 2022 and $36.0 million at June 30, 2021.                 Net gain on sale of loans was $84 thousand for the quarter ended June 30, 2022, compared to $365 thousand for the quarter ended March 31, 2022 and $1.1 million for the quarter ended June 30, 2021. Total deposits decreased $50.1 million or 6.0% to $786.0 million at June 30, 2022, from $836.1 million at March 31, 2022, and decreased $18.7 million or 2.3% from $804.7 million at June 30, 2021. Noninterest-bearing deposits decreased $22.2 million or 10.6% to $186.6 million at June 30, 2022 compared to $208.8 million at March 31, 2022, and increased $4.8 million or 2.6% compared to $181.8 million at June 30, 2021.         The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as "well-capitalized" at June 30, 2022.               Operating Results Net interest income increased $774 thousand, or 10.2%, to $8.4 million for the quarter ended June 30, 2022, compared to $7.6 million for the quarter ended March 31, 2022 and increased $1.0 million, or 14.2%, from $7.4 million for the quarter ended June 30, 2021. The increase from the prior quarter was primarily the result of higher interest income earned on loans and investments and interest-bearing cash. The increase from the same quarter last year was primarily the result of lower interest expense paid on deposits and higher interest income earned on loans, investments and interest-bearing cash. Interest income increased $773 thousand, or 9.4%, to $9.0 million for the quarter ended June 30, 2022, compared to $8.2 million for the quarter ended March 31, 2022 and increased $571 thousand, or 6.8%, from $8.4 million for the quarter ended June 30, 2021. The increase from the prior quarter was primarily due to higher average loan balances and a 55 basis point rate increase in average yield on investments and interest-bearing cash following recent increases in the targeted federal funds rate, partially offset by lower average investments and interest-bearing cash balances. The increase in interest income from the same quarter last year was due primarily to higher average loan balances and a 66 basis point increase in average yield on investments and interest-bearing cash, partially offset by a 60 basis point decline in the average loan yield and lower average investments and interest-bearing cash balances. Interest income on loans increased $622 thousand, or 7.7%, to $8.7 million for the quarter ended June 30, 2022, compared to $8.1 million for the quarter ended March 31, 2022, and increased $398 thousand, or 4.8%, from $8.3 million for the quarter ended June 30, 2021. The average balance of total loans was $741.6 million for the quarter ended June 30, 2022, compared to $694.9 million for the quarter ended March 31, 2022 and $628.1 million for the quarter ended June 30, 2021. The average yield on total loans was 4.70% for the quarter ended June 30, 2022, compared to 4.71% for the quarter ended March 31, 2022 and 5.30% for the quarter ended June 30, 2021. The slight decline in the average yield on loans during the current quarter compared to the prior quarter primarily was due to lower recognition of net deferred fees due to a reduced volume of PPP loan repayments from U.S. Small Business Administration's ("SBA") loan forgiveness, and new loan originations at lower rates, primarily related to fixed rate mortgage loans. The decrease in the average yield on loans during the current quarter compared to the same quarter in 2021 was primarily due to the decrease in the recognition of net deferred fees due to loan repayments from SBA loan forgiveness. The Bank recognized $40 thousand, $98 thousand, and $1.0 million in deferred fees and interest income related to PPP loan forgiveness repayments during the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Refer to the discussion below for the impact of PPP on our net interest margin. As of June 30, 2022, total unrecognized fees on PPP loans were $23 thousand. Interest income on investments and interest-bearing cash increased $151 thousand to $289 thousand for the quarter ended June 30, 2022, compared to $138 thousand for the quarter ended March 31, 2022, and increased $173 thousand from $116 thousand for the quarter ended June 30, 2021. This increase compared to the same quarter one year ago was due to a higher average yield for investments and interest-bearing cash, partially offset by lower average balances. Interest expense remained virtually unchanged at $594 thousand for the quarter ended June 30, 2022, compared to $595 thousand for the quarter ended March 31, 2022, and decreased $470 thousand, or 44.2%, from $1.1 million for the quarter ended June 30, 2021. The decrease in interest expense during the current quarter from the comparable period a year ago was primarily the result of a 24 basis point decline in the average cost of total deposits (including non-interest bearing deposits) reflecting reduced rates paid on all interest-bearing deposits, partially offset by a $55.8 million, or 12.4%, increase in the average balance of interest-bearing deposits other than certificate accounts. Contributing further to this decrease was a $78.8 million, or 45.1%, decline in the average balance of higher costing certificate accounts. In addition, total deposit costs were negatively impacted by the $1.7 million decrease in the average balance of noninterest bearing deposits to $192.8 million for the three months ended June 30, 2022, compared to $194.6 million for the three months ended March 31, 2022, and favorably impacted by the $13.2 million increase in average balance of noninterest bearing deposits from the same period last year. The average cost of total borrowings, including subordinated notes and borrowings, decreased to 5.13% for the quarter ended June 30, 2022, from 5.85% for the quarter ended March 31, 2022, and decreased from 5.81% for the quarter ended June 30, 2021. Net interest margin (annualized) was 3.83% for the quarter ended June 30, 2022, compared to 3.49% for the quarter ended March 31, 2022 and 3.36% for the quarter ended June 30, 2021. The increase in net interest margin from the prior quarter and the same quarter a year ago was primarily due to the higher interest income earned on interest-earning assets, driven by the higher average balance of loans and the higher average yield earned on investments and interest-bearing cash and, with respect to the same quarter a year ago, the decline in rates paid on interest-bearing liabilities. During the second quarter of 2022, the average yield earned on PPP loans, including the recognition of the net deferred fees for PPP loans repaid and forgiven by the SBA, resulted in a positive impact to the net interest margin of one basis point, compared to a positive impact of three basis points during the quarter ended March 31, 2022, and a positive impact of 24 basis points during the quarter ended June 30, 2021. The Company recorded a provision for loan losses of $600 thousand for the quarter ended June 30, 2022, as compared to $125 thousand for the quarter ended March 31, 2022 and $250 thousand for the quarter ended June 30, 2021. The increase in the provision for loan losses for the quarter ended June 30, 2022 compared to the quarter ended March 31, 2022 resulted primarily from the growth in our loans held-for-portfolio, partially offset by a shift in the loan portfolio composition to loan types requiring a lower general loan allowance as balances of lower risk one-to-four family loans and multifamily residential loans increased, thereby reducing the related general loan allowance. The provision for loan losses in the second quarter of 2022 also reflects the inherent uncertainty related to the economic environment as a result of local, national and global events. Noninterest income decreased $508 thousand, or 33.4%, to $1.0 million for the quarter ended June 30, 2022, compared to $1.5 million for the quarter ended March 31, 2022 and decreased $697 thousand, or 40.7%, from $1.7 million for the quarter ended June 30, 2021. The decreased noninterest income for the three months ended June 30, 2022 as compared to the three months ended March 31, 2022, primarily resulted from a $211 thousand decline in the fair value adjustment on mortgage servicing rights primarily due to a smaller servicing portfolio, and a $281 thousand decrease in the net gain on sale of loans as a result of decreased refinance activity over the past quarter, partially offset by a $47 thousand increase in service fees and income primarily resulting from higher commercial loan fees and consumer deposit activity fees as businesses continued to reopen in our market areas. The decrease in noninterest income from the comparable period in 2021 primarily was due to a $979 thousand decrease in net gain on sale of loans as a result of a decline in both the amount of loans originated for sale and gross margins for loans sold, partially offset by a $351 thousand increase in the fair value adjustment on mortgage servicing rights due primarily from the effects of recent higher market interest rates causing a reduction in prepayment speeds, a $131 thousand decline to a $35 thousand loss on cash surrender value of bank-owned life insurance ("BOLI"), and a $70 thousand increase in service fees and income primarily resulting from higher commercial loan fees and consumer deposit activity fees. Loans sold during the quarter ended June 30, 2022, totaled $2.9 million, compared to $12.2 million and $39.9 million during the quarters ended March 31, 2022 and June 30, 2021, respectively. Noninterest expense decreased $51 thousand, or 0.7%, to $6.8 million for the quarter ended June 30, 2022, compared to $6.8 million for the quarter ended March 31, 2022 and increased $796 thousand, or 13.3%, from $6.0 million for the quarter ended June 30, 2021. The decrease from the quarter ended March 31, 2022 was a result of a decrease in salaries and benefits expense of $198 thousand due to higher costs typically incurred in the first quarter from the impact of annual wage and stock compensation increases, partially offset by an increase in operations expense of $114 thousand primarily due to increases in various expenses including marketing and charitable expenses, insurance costs, and professional fees. The increase in noninterest expense compared to the quarter ended June 30, 2021 was primarily due to an increase in salaries and benefits of $655 thousand primarily due to higher wages and incentive compensation, higher medical expenses and lower deferred compensation, partially offset by a decrease in commission expense related to a decline in mortgage originations. Operations expense increased $67 thousand compared to the quarter ended June 30, 2021 due to increases in various accounts including marketing and travel expenses, legal fees associated with higher commercial loan volume, and debit card processing, partially offset by lower loan origination costs due to lower mortgage origination volume. The efficiency ratio for the quarter ended June 30, 2022 was 72.12%, compared to 74.77% for the quarter ended March 31, 2022 and 66.07% for the quarter ended June 30, 2021. The improvement in the efficiency ratio for the current quarter compared to the prior quarter is primarily due to higher net interest income from an increase in average balance of loans held-for-portfolio and a higher rate earned on reserve balances, and lower noninterest expense from reduced salaries and benefits costs, partially offset by lower noninterest income primarily as a result of lower gain on sale of loans from mortgage banking and a decline in the fair value adjustment on mortgage servicing rights. The weakening in the efficiency ratio for the current quarter compared to the same period in the prior year is primarily due to higher noninterest expense related to increased salaries and benefits and lower noninterest income primarily due to lower gain on sale of loans from mortgage bank, partially offset by higher net interest income primarily as a result of a higher average balance of loans held-for-portfolio at higher yields than prior investments and a reduction in rate paid on interest bearing deposits. Balance Sheet Review, Capital Management and Credit Quality Assets at June 30, 2022 totaled $937.0 million, compared to $958.9 million at March 31, 2022 and $923.2 million at June 30, 2021. The decrease in assets from the sequential quarter was primarily due to decreases in cash and cash equivalents, which primarily was funded by a $50.1 million reduction in deposits, and a $30.0 million increase in Federal Home Loan Bank ("FHLB") advances, partially offset by an increase in loans held-for-portfolio. The increase from one year ago was primarily a result of increases in loans held-for-portfolio, investment securities, and BOLI, partially offset by lower balances in cash and cash equivalents and a decrease in loans held-for-sale. Cash and cash equivalents decreased $117.0 million, or 59.4%, to $80.1 million at June 30, 2022, compared to $197.1 million at March 31, 2022, and decreased $156.8 million, or 66.2%, from $236.8 million at June 30, 2021. The decrease from the prior quarter-end was primarily due to the redeployment of excess liquidity into higher yielding loans, and to a lesser extent, to fund a decrease in deposits, primarily related to decreases in lawyer trust accounts and public funds. The decrease from one year ago was due to deploying cash earning a nominal yield into higher interest-earning loans and, to a much lesser extent, investments securities. Investment securities decreased $849 thousand, or 6.8%, to $11.6 million at June 30, 2022, compared to $12.4 million at March 31, 2022, and increased $4.1 million, or 54.1%, from $7.5 million at June 30, 2021. Held-to-maturity securities totaled $2.2 million at both June 30, 2022 and March 31, 2022, and totaled none at June 30, 2021. Available-for-sale securities totaled $9.4 million at June 30, 2022, compared to $10.2 million at March 31, 2022, and $7.5 million at June 30, 2021. The decrease in available-for-sale securities from the prior quarter was primarily due to higher net unrealized losses resulting from the increases in market interest rates during the year and regularly scheduled payments. The increase from the same period one year ago was primarily due to investment purchases throughout the previous year, partially offset by calls of securities and regularly scheduled payments and maturities. Loans held-for-sale totaled $100 thousand at June 30, 2022, compared to $1.3 million at March 31, 2022 and $3.7 million at June 30, 2021. The decreases were primarily due to a decline in mortgage originations reflecting reduced refinance activity. Loans held-for-portfolio increased to $806.1 million at June 30, 2022, compared to $709.5 million at March 31, 2022 and increased from $639.6 million at June 30, 2021. The increase in loans held-for-portfolio at June 30, 2022, compared to the prior quarter and one year ago, primarily resulted from increases across all loan categories, excluding commercial business loans which decreased between the periods due primarily to PPP loan SBA loan forgiveness payments. The increase in loans held-for-portfolio primarily resulted from focused marketing campaigns, increased utilization of digital marketing tools, and the addition of experienced lending staff during 2021, as well as United States Department of Agriculture guaranteed loan purchases of $6.8 million during the second six months of 2021 and the first six months of 2022. Nonperforming assets ("NPAs"), which are comprised of nonaccrual loans, including nonperforming troubled debt restructurings ("TDRs"), other real estate owned ("OREO"), and other repossessed assets, decreased $238 thousand, or 4.4%, to $5.2 million at June 30, 2022, from $5.4 million at March 31, 2022 and increased $3.0 million, or 140.3% from $2.2 million at June 30, 2021. The decrease in nonperforming assets during the current quarter compared to the prior quarter primarily was due to the pay-off of a $170 thousand nonperforming commercial business loan during the period. Loans classified as TDRs totaled $2.0 million, $2.3 million and $2.6 million at June 30, 2022, March 31, 2022 and June 30, 2021, respectively, of which $128 thousand, $273 thousand and $424 thousand, respectively, were on not performing pursuant to their contractual repayment terms at those dates. NPAs to total assets were 0.55%, 0.56% and 0.23% at June 30, 2022, March 31, 2022 and June 30, 2021, respectively. The allowance for loan losses to total loans outstanding was 0.88%, 0.90% and 0.96% at June 30, 2022, March 31, 2022 and June 30, 2021, respectively. Excluding PPP loans of $429 thousand which are 100% guaranteed by the SBA, the allowance for loan losses totaled 0.88% of total loans outstanding at June 30, 2022, compared to 0.91% of total loans outstanding at March 31, 2022, excluding PPP loans of $2.1 million, and 1.02% of total loans outstanding at June 30, 2021, excluding PPP loans of $36.0 million (See Non-GAAP reconciliation on page 14). Net loan recoveries during the second quarter of 2022 totaled $110 thousand compared to net charge-offs of $24 thousand for the first quarter of 2022, and net charge-offs of $28 thousand for the second quarter of 2021. The following table summarizes our NPAs (dollars in thousands):   June 30,2022   March 31,2022   December 31,2021   September 30,2021   June 30,2021 Nonperforming Loans:                   One-to-four family $ 1,669     $ 1,676     $ 2,207     $ 1,915     $ 457   Home equity loans   152       155       140       150       157   Commercial and multifamily   2,307       2,336       2,380       —       —   Construction and land   30       31       33       220       39   Manufactured homes   117       135       122       98       143   Floating homes   —       —       493       504       510   Commercial business   —       170       176       182       186   Other consumer   233       244       —       —       —   Total nonperforming loans   4,509       4,747       5,552       3,069       1,492   OREO and Other Repossessed Assets:                   One-to-four family   84       84       84       84       84   Commercial and multifamily   575       575       575       575       575   Total OREO and repossessed assets   659       659       659       659       659   Total nonperforming assets $ 5,168     $ 5,406     $ 6,211     $ 3,728     $ 2,151                       Nonperforming Loans:                   One-to-four family   32.3 %     31.0 %     35.5 %     51.4 %     21.2 % Home equity loans   2.9       2.9       2.3       4.0       7.3   Commercial and multifamily   44.7       43.2       38.3       —       —   Construction and land   0.6       0.6       0.5       5.9       1.8   Manufactured homes   2.3       2.5       2.0       2.6       6.6   Floating homes   —       —       7.9       13.5       23.8   Commercial business   —       3.1       2.8       4.9       8.6   Other consumer   4.5       4.5       —       —       —   Total nonperforming loans   87.3       87.8       89.3       82.3       69.4   OREO and Other Repossessed Assets:                   One-to-four family   1.6       1.6       1.4       2.3       3.9   Commercial and multifamily   11.1       10.6       9.3       15.4       26.7   Total OREO and repossessed assets   12.7       12.2       10.7       17.7       30.6   Total nonperforming assets   100.0 %     100.0 %     100.0 %     100.0 %     100.0 %   The following table summarizes the allowance for loan losses (dollars in thousands, unaudited):   For the Quarter Ended:   June 30,2022   March 31,2022   December 31,2021   September 30,2021   June 30,2021 Allowance for Loan Losses                   Balance at beginning of period $ 6,407     $ 6,306     $ 6,327     $ 6,157     $ 5,935   Provision for loan losses during the period   600       125       —       175       250   Net recoveries/(charge-offs) during the period   110       (24 )     (21 )     (5 )     (28 ) Balance at end of period $ 7,117     $ 6,407     $ 6,306     $ 6,327     $ 6,157   Allowance for loan losses to total loans   0.88 %     0.90 %     0.92 %     0.95 %     0.96 % Allowance for loan losses to total loans (excluding PPP loans) (1)   0.88 %     0.91 %     0.92 %     0.96 %     1.02 % Allowance for loan losses to total nonperforming loans   157.84 %     134.97 %     113.58 %     206.16 %     412.67 % (1) Represents a non-GAAP financial measure. See Non-GAAP Financial Measures at the end of this earnings release for a reconciliation of our non-GAAP measures to the most directly comparable GAAP financial measure. Deposits decreased $50.1 million, or 6.0%, to $786.0 million at June 30, 2022, compared to $836.1 million at March 31, 2022 and decreased $18.7 million, or 2.3%, from $804.7 million at June 30, 2021. The decrease in deposits compared to the prior quarter was primarily a result of a managed run-off of public funds, the expected outflow of temporary deposits from lawyer trust accounts, and a seasonal decrease in specialty business accounts. The decrease in deposits compared to the year ago quarter was primarily a result of a managed run-off of higher costing maturing certificates of deposits, partially offset by higher balances in all other deposit accounts. Our noninterest-bearing deposits decreased $22.2 million, or 10.6% to $186.6 million at June 30, 2022, compared to $208.8 million at March 31, 2022 and increased $4.8 million, or 2.6% from $181.8 million at June 30, 2021. Noninterest-bearing deposits represented 23.7%, 25.0% and 22.6% of total deposits at June 30, 2022, March 31, 2022 and June 30, 2021, respectively. There were $30.0 million of outstanding FHLB term advances at June 30, 2022, and no outstanding FHLB advances at March 31, 2022 and June 30, 2021. Subordinated notes, net totaled $11.7 million at each of June 30, 2022, March 31, 2022 and June 30, 2021. Stockholders' equity totaled $93.1 million at June 30, 2022, a decrease of $793 thousand, or 0.8%, from $93.9 million at March 31, 2022, and an increase of $3.5 million, or 3.9%, from $89.5 million at June 30, 2021. The decrease in stockholders' equity from March 31, 2022 was primarily the result of the repurchase of $1.6 million of Company common stock, the payment of $444 thousand in dividends to Company stockholders and a $480 thousand increase in accumulated other comprehensive loss, net of tax, resulting from the effects of higher interest rates on the market value of our available-for-sale securities, partially offset by $1.6 million of net income earned during the current quarter. Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, and is headquartered in Seattle, Washington with full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one Loan Production Office located in the Madison Park neighborhood of Seattle, Washington. For more information, please visit www.soundcb.com.  Forward Looking Statement Disclaimer When used in filings by Sound Financial Bancorp, Inc. (the "Company") with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "intends" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events, and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors illustrated below or because of other important factors that we cannot foresee that could cause our actual results to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Factors which could cause actual results to differ materially, include, but are not limited to: potential adverse impacts to economic conditions in the Company's local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, generally, resulting from the COVID-19 pandemic and any governmental or societal responses thereto; changes in consumer spending, borrowing and savings habits; changes in economic conditions, either nationally or in our market area, including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by increasing oil prices and supply chain disruptions; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company's ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company's market area; secondary market conditions for loans; results of examinations of the Company or its wholly owned bank subsidiary by their regulators; increased competition; changes in management's business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; and other factors described in the Company's latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission – which are available at www.soundcb.com and on the SEC's website at www.sec.gov. Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The Company does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause the Company's actual results for 2022 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of the Company and could negatively affect its operating and stock performance. CONSOLIDATED INCOME STATEMENTS(Dollars in thousands, unaudited)     For the Quarter Ended     June 30,2022   March 31,2022   December 31,2021   September 30,2021   June 30,2021 Interest income   $ 8,986     $ 8,213   $ 8,359     $ 9,102     $ 8,415   Interest expense     594       595     643       785       1,064   Net interest income     8,392       7,618     7,716       8,317       7,351   Provision for loan losses     600       125     —       175       250   Net interest income after provision for loan losses     7,792       7,493     7,716       8,142       7,101   Noninterest income:                     Service charges and fee income     596       549     632       556       526   (Loss) earnings on cash surrender value of bank-owned life insurance     (35 )     21     135       104       96   Mortgage servicing income     313       320     323       328       321   Fair value adjustment on mortgage servicing rights     57       268     (114 )     (125 )     (294 ) Net gain on sale of loans     84       365     507       568       1,063   Total noninterest income     1,015       1,523.....»»

Experts from the World Bank finally admitted that the risk of stagflation is getting bigger and more real. For gold, however, that’s pretty good news. Better Late Than Never First they ignore you, then they laugh at you, then they fight you, and finally you win. Indeed, several months ago, pundits were dismissing the possibility […] Experts from the World Bank finally admitted that the risk of stagflation is getting bigger and more real. For gold, however, that’s pretty good news. Better Late Than Never First they ignore you, then they laugh at you, then they fight you, and finally you win. Indeed, several months ago, pundits were dismissing the possibility of stagflation. The possibility that I was emphasizing almost from the very beginning of the pandemic-related economic crisis and the subsequent jump in inflation. In the summary of the Gold Market Overview for April 2021, I wrote: Q1 2022 hedge fund letters, conferences and more The US economy is likely to shift from an economic recovery to stagflation in the upcoming months. Even the Fed itself admits that inflation will jump this year. Of course, the central banks are trying to convince us that inflation will be only transitory, but it’s possible that they underestimate the inflationary risk and overestimate their ability to deal with it. This is exactly where we are right now. After months of saying inflation was temporary and laughing at warnings of stagflation, this time is different! In its latest report, Global Economic Prospects, the World Bank admitted that “stagflation risks are rising amid a sharp slowdown in growth.” The institution reduced its global growth forecast from 5.7 percent in 2021 to 2.9 percent in 2022, which is significantly lower than the 4.1 percent that was predicted in January. What’s really disturbing is that between 2021 and 2024, global growth is projected to have slowed by 2.7 percentage points—more than twice the deceleration between 1976 and 1979. Oops! Houston, we have a problem! Indeed, as World Bank President David Malpass said in the foreword to the report, the risk of stagflation is likely now: Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely, with potentially destabilizing consequences for low- and middle-income economies. It’s a phenomenon—stagflation—that the world has not seen since the 1970s (…). The danger of stagflation is considerable today (…). Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multidecade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer than currently anticipated. Treasury Secretary Janet Yellen also admitted this month that she was wrong a year ago when she said she anticipated inflation would be “a small risk,” “manageable” and “not a problem.” In an interview for CNN, she said: I was wrong about the path inflation would take. As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices. And supply bottlenecks that affected our economy so badly that I didn’t, at the time, fully understand. Rumors have it that Yellen has educated herself a bit recently. Implications for Gold What does it all mean for the economy and the gold market? Well, policymakers usually don’t admit that they were wrong. If they do, it’s only because they know how bad it’s about to get. The fact that the World Bank openly predicts stagflation is another indication that the economic situation is turning sour. You see, to combat high inflation in the 1970s, the Fed was forced to hike interest rates so steeply that it triggered a global recession. As the chart below shows, the nominal 10-year Treasury yields have just briefly surpassed 3%, which is a relatively high level in recent times, but it’s nothing similar to the levels seen in the 1970s and 1980s. What’s particularly disturbing here is that the debt levels are much higher today than during the Great Stagflation, so the Fed’s tightening cycle could be potentially even more harmful now. Stagflation should be positive for the gold bulls. The sample is small because there has only been one stagflation in the past, which overlapped with the end of the gold standard and the liberalization of the gold market, but still, a recession should make gold rally. The danger for gold is rising real interest rates, but the current path of monetary tightening is probably already priced in well by the markets, so only a more aggressive stance than the markets expect right now could harm the yellow metal. As the chart above shows, gold prices continue to trade around the $1,850 level, and it seems that gold is waiting for something to decide which path to take. Next week’s Fed monetary policy meeting may provide a needed catalyst – we’ll see! If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care Updated on Jun 9, 2022, 3:40 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Morgan Stanley Asks When Will Central Banks Worry More About Financial Stability Than Inflation By Seth Carpenter, Morgan Stanley chief global economist It Ain't Over 'Til It's Over Major central banks have hiked rates despite volatility in markets. They collectively said that inflation clearly means it is too soon to conclude that the hiking cycle is over. The banking sector developments haven't stopped the hiking, and indeed, I have noted that the idea of focusing on financial stability at the expense of inflation is a false dichotomy. Central banks are deliberately tightening financial conditions in order to slow their respective economies and thereby bring inflation down…while hopefully avoiding an unnecessarily painful recession. What the banks disruption does, however, is make it harder to calibrate the correct degree of tightening. Inflation is clearly the priority for central banks. On March 16, the ECB noted that it projects inflation to stay “too high for too long.” Chair Powell was similarly blunt, saying that “inflation remains too high.” And even though the BoE expects inflation to fall significantly in 2Q23, it worried that a strong labor market and an improving growth outlook could reinforce the persistence of inflation. So, what’s a poor central bank to do? Central banks’ main tool is the policy rate. Higher rates tighten financial conditions, which slows economic growth. That chain of causality becomes more important in the current circumstances, because while policy has tightened financial conditions, so too have disruptions in the banking sector. Ideally, central banks would separate the issues, using different tools to deal with macroeconomic issues versus financial stability, but they know an interaction exists. So, they are watching developments in the banking sector to see if continued rate hikes have an outsized or nonlinear effect on financial conditions. To date, their conclusion has been “no.” The ECB did not see volatility in financial markets as a reason to pause or to do a smaller hike. Nevertheless, the ECB did not provide particularly strong guidance about what the next policy move would be. It wants more tightening of financial conditions, but it also wants to understand what is in train. Similarly, the Fed followed through on its rate hike as we anticipated, and Chair Powell was explicit that credit market tightening works in the same direction as policy tightening. According to Powell, the banking sector disruption provides restraint akin to one or two more rate hikes. Thus, the dot plot did not show more hikes than in December, despite stronger incoming economic data. Instead of focusing on one objective versus another, central banks are keeping their eyes on inflation while trying to adjust to changing financial conditions. When would central banks worry more about financial stability than inflation? When inflation is no longer an issue, because in response to instability, the financial markets would deal such a blow to the real economy that we would experience a severe recession. If anything, the Fed told us that it was willing to absorb even more economic pain to reduce inflation than it had in the past. Not only is the Fed projecting three years of below-potential growth (2022, 2023, and 2024) to bring inflation down (almost) to target at the end of 2025, it also reduced its forecast for growth this year and next, along with a slightly higher path for policy. So how does it end? If disruption in the banking sector delays an extension of policy tightening, then a soft landing is still possible. Our banking analysts see higher funding costs and rising deposit betas combined with tighter lending standards restricting loan growth. This view is consonant with Powell’s. But the downside risks have gotten bigger. A broader, more persistent contraction in credit would cause a recession given that growth will be near zero in the best version of the world. And central banks will be ruling out the upper tail of possible outcomes. The ECB is clearly focused on inflation, so growth can be sacrificed, and upside surprises like last week’s PMIs will add to its resolve. January’s strong data in the US initially led Powell to re-open the door to 50bp rate hikes. The other lesson from the past two weeks is that the “no landing” notion never made any sense. Central banks were always going to force a landing, one way or another; the banking sector may hold the key to which kind. Tyler Durden Sun, 03/26/2023 - 20:30.....»»

The SVB collapse may have been just a taste of the struggles to come as the market enters a new and trying era, observers say. CHICAGO - SEPTEMBER 29: Jeff Linforth stands at the Chicago Board of Trade signal offers in the Standard & Poors stock index futures pit near the open of trading September 29, 2008 in Chicago, Illinois.Scott Olson/Getty Images Wall Street experts see a new era ahead for markets, marked by a more difficult investing environment.  Higher rates have burst the bubble in asset prices, while bank struggles threaten a wider downturn.  The new regime will be a far cry from the nearly ideal conditions investors navigated through the last decade.  The idyllic market environment that dominated the past decade is over, and investors are at the dawn of a more difficult era, Wall Street experts say.Warnings from commentators are coming after the stunning collapse of Silicon Valley Bank, which shook confidence in the US banking system after it was taken over by the FDIC earlier this month. More banks in both the US and Europe have since shown signs of weakness, sparking fears that a new financial crisis could soon unfold. Observers have blamed the banking panic on the Federal Reserve's aggressive rate hikes over the past year, which have dramatically raised the cost of borrowing, drained the market of liquidity, and put an end to the era of easy money.While ultra-low interest rates and ample liquidity previously caused stocks to swoon to new highs, SVB's collapse is a sign that bubble has burst, commentators say.Now, they're warning of a handful of obstacles in the new era that investors are going to be forced to navigate. A coming recessionA downturn is likely in the cards, as turmoil from SVB's downfall has significantly raised the odds of a recession, experts say. That's because banking woes naturally slow the economy. Combine that with tightening from the Fed, and the recipe for a recession is there. Central bankers have already raised interest rates over 1,700% over the last year to quell high prices. Despite the volatility in bank stocks, Fed officials raised interest rates another 25 basis-points this week, bringing the effective Fed funds rate to 4.75-5%.That's the highest interest rates have been since 2007, and the impact of SVB's collapse is likely equivalent to another 50-75 basis points in rate hikes, Moody's chief economist Mark Zandi estimated, meaning real interest rates are even more restrictive."That's a pretty significant increase in interest rates, and I do think that puts the economy in jeopardy," Zandi warned in a recent interview with CNBC.Goldman Sachs also raised its odds of recession in 2023 from 25% to 35%, and bond markets have flashed signs of an incoming downturn as the inverted Treasury yield curve begins to de-invert. Though the inversion itself is a classic recession warning, the undoing of the inversion is a signal that a recession could come in the next four months, "Bond King" Jeffrey Gundlach said, calling it a "red alert recession signal" in a recent tweet.More bank failuresMore banking troubles could also be looming, as the recent crisis is actually a worldwide phenomenon that started long before the SVB began to stumble, according to Harvard economist Kenneth Rogoff.Some experts have argued that SVB's collapse was due to the bank's uniquely high exposure to bonds, which have been weighed down heavily by rising interest rates. But the problem is likely more widespread, Rogoff warned, which will be exposed as rates tread higher. "What happened is Silicon Valley Bank is maybe a little extreme in its naivete, but almost any kind of investment strategy that had illiquid assets — longer term assets — is going to lose money like this," he said in a recent interview with Yahoo Finance. "I didn't know it would [start] in the US banking sector."Though Fed Chair Powell and Treasury Secretary Janet Yellen have assured markets the US banking system is sound, neither is in a position to offer blanket insurance on all banking deposits, according to market veteran Ed Yardeni, who said the banking sector may be weaker than officials have suggested. Luke Ellis, the CEO of the world's largest public hedge fund, Man Group, said he anticipated a "significant' number of banks failing within the next two years, adding that there were would similar deals like UBS's emergency takeover of Credit Suisse.Stagnant stock returnsFinally, stocks are unlikely to replicate the stunning returns over the last decade. Nouriel Roubini, Wall Street's "Dr. Doom" economist who has repeatedly warned of another financial crisis, predicted stocks and bonds would see dismal returns for years as inflation and interest rates remain high. Higher rates weigh heavily on both assets, he said, urging investors to flock to inflation hedges like gold and inflation indexed bonds.Billionaire investor Leon Cooperman warned that the US was already going through a "textbook" financial crisis -- meaning the S&P 500 won't notch a new high for a long time."I think the 4,800 on the S&P will be a high that will stand for quite some time," he said in an interview with Bloomberg, referring to high reached in January 2022. "I expect returns in the S&P to be very pedestrian." Stocks plummeted 20% in 2022 as the Fed began to raise interest rates, and, despite a blistering rally to start the year, the S&P 500 has already erased most of its gains in 2023.Bearish market commentators are warning of an even steeper drop in equities ahead, with Morgan Stanley forecasting a 26% drop in the next few months, and legendary investor Jeremy Grantham sounding the alarm for a 50% crash in stocks.Read the original article on Business Insider.....»»

Treasury curve suggests the widely-anticipated U.S. economic recession is near. Historically, the signal has brought pain to risk assets......»»

We have narrowed our search to five U.S.-based technology stocks with attractive valuations. These are: ABNB, OKTA, SPLK, MDB and ZS. In its March FOMC meeting, the Fed raised the benchmark interest rate by 25 basis points to the range of 4.75% to 5%. This is the highest level of the Fed fund rate since late 2007. However, Fed Chairman Jerome Powell signaled that rate hike cycle is approaching its end.March FOMC MeetingFed’s latest projection shows that the terminal interest rate at the end of 2023 will be 5.125%. This implies that just one more 25-basis point hike in the benchmark lending rate will complete this cycle. This is exactly what the central bank had projected after its December FOMC meeting.However, a sudden spike in the inflation rate in January and a series of strong economic data for January and February compelled Powell to say that the higher interest regime will continue for a longer period in his testimony before the U.S. Congress. Several Fed officials estimated that terminal interest rate should be 5.375% or more at the end of 2023.Meanwhile, the recent liquidity crisis of the banking sector in the United States and Europe has shaken the global financial markets. Market participants remain highly concerned regarding a recession this year. These developments have changed the entire landscape forcing the Fed to take a relatively dovish stance.Although no rate cut is anticipated in 2023, Powell signaled that the Fed fund rate will be reduced by 0.8% in 2024 and another 1.2% cut is expected in 2025.Tech Stocks Likely to GainGrowth-oriented sectors like technology, communication services and consumer discretionary are highly susceptible to interest rate movements. A high interest rate is detrimental to growth stocks. This was evident in the recent pandemic-induced turmoil.During the pandemic-ridden 2020 and 2021, the Fed kept the benchmark interest rate as low as 0-0.25%. Consequently, the tech sector witnessed an unprecedented rally that enabled Wall Street to exit a coronavirus-induced short bear market and form a new bull market.However, as the Fed hiked interest rate by 4.5% in 2022 to combat the 40-year high inflation, the growth sectors, especially technology stocks suffered the most. With the central bank stating that rate hike is approaching its end, technology stocks are likely to gain in the short to mid-term.Our Top PicksWe have narrowed our search to five large-cap (market capital > $10 billion) U.S.-based technology stocks with attractive valuations. The stocks have strong growth potential for 2023 and have seen positive earnings estimate revision in the past 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The chart below shows the price performance of our five picks yhear to date.Image Source: Zacks Investment ResearchAirbnb Inc. ABNB is riding on an improvement in the travel industry. Continued recovery in both longer-distance and cross-border travel owing to a reduction in travel restrictions is benefiting ABNB’s Nights & Experience bookings. Additionally, growth in average daily rates and gross booking value is a tailwind.Growing active listings in Latin America, North America and EMEA are contributing well to the top line. Growing sales and marketing initiatives along with continuous efforts to upgrade various aspects of the Airbnb service are helping the company gain momentum among hosts and guests.Zacks Rank #1 Airbnb has an expected revenue and earnings growth rate of 14.9% and 21.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.7% over the past 60 days. The stock price of ABNB is currently trading at a 32.8% discount from its 52-week high.Splunk Inc. SPLK has been gaining traction from healthy customer engagement, evident from the consistently high net retention and competitive win rates alongside solid momentum with large orders overall.SPLK is improving the resilience and security of its critical system and driving efficiencies within its own internal operation. Also, the business transition from perpetual licenses to subscription or renewable model is expected to benefit it in the long run. SPLK’s top line is benefiting from high demand for its cloud solutions.Zacks Rank #1 Splunk has expected revenue and earnings growth rates of 6.1% and 4.8%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 10.6% over the past 30 days. The stock price of SPLK is currently trading at a 39.5% discount from its 52-week high.Okta Inc. OKTA provides identity management platforms for enterprises, small and medium-sized businesses, universities, non-profits, and government agencies in the United States and internationally.OKTA’s products consist of Okta Information Technology Products and Okta for Developers. Okta IT Products include Single Sign-On, Mobility Management, Adaptive Multi-Factor Authentication, Lifecycle Management and Universal Directory. Okta for Developers include Complete Authentication, User Management, Application Programming Interface Access Management and Developer Tools.Zacks Rank #2 OKTA has expected revenue and earnings growth rates of 16.6% and more than 100%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days. The stock price of OKTA is currently trading at a 47.9% discount from its 52-week high.Zscaler Inc. ZS is benefiting from the rising demand for cyber-security solutions owing to the slew of data breaches. The increasing demand for privileged access security on digital transformation and cloud-migration strategies is a key growth driver of ZS.Zscaler’s portfolio boosts its competitive edge and helps add users. Moreover, a strong presence across verticals, such as banking, insurance, healthcare, the public sector, pharmaceuticals, telecommunications services, and education, is safeguarding Zscaler from the pandemic’s negative impact. Also, recent acquisitions, like Smokescreen and Trustdome, are expected to enhance ZS’ portfolio.Zacks Rank #2 Zscaler has expected revenue and earnings growth rates of 43.2% and more than 100%, respectively, for the current year (ending July 2023). The Zacks Consensus Estimate for current-year earnings has improved 19.4% over the past 30 days. ZS stock is currently trading at a 55.6% discount from its 52-week high.MongoDB Inc. MDB provides general purpose database platform worldwide. MDB offers MongoDB Enterprise Advanced, a commercial database server for enterprise customers to run in the cloud, on-premise, or in a hybrid environment, MongoDB Atlas, a hosted multi-cloud database-as-a-service solution, and Community Server, a free-to-download version of its database, which includes the functionality that developers need to get started with MongoDB.MongoDB also provides professional services comprising consulting and training. MDB serves financial services, government, healthcare, media and entertainment, technology, retail and telecommunications industries.Zacks Rank #2 MongoDB has expected revenue and earnings growth rates of 16.6% and 27.2%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the past 30 days. The stock of MDB is currently trading at a 53.4% discount from its 52-week high. 4 Oil Stocks with Massive Upsides Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."  Zacks Investment Research has just released an urgent special report to help you bank on this trend.  In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations. Download your free report now to see them.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 Splunk Inc. (SPLK): Free Stock Analysis Report Okta, Inc. (OKTA): Free Stock Analysis Report MongoDB, Inc. (MDB): Free Stock Analysis Report Zscaler, Inc. (ZS): Free Stock Analysis Report Airbnb, Inc. (ABNB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research.....»»

Second quarter net earnings of $179.8 million, or $1.51 per diluted share Core EBITDA of $302.8 million Volume and value of North America downstream backlog near all-time highs Project bid volumes grew by a double-digit percentage year-over-year, signaling strength in upcoming construction season Arizona 2 project start-up on target; expected to begin production in the spring of 2023 IRVING, Texas, March 23, 2023 /PRNewswire/ -- Commercial Metals Company (NYSE:CMC) today announced financial results for its fiscal second quarter ended February 28, 2023.  Net earnings were $179.8 million, or $1.51 per diluted share, on net sales of $2.0 billion, compared to prior year period net earnings of $383.3 million, or $3.12 per diluted share, on net sales of $2.0 billion. During the second quarter of fiscal 2023, the Company recorded a net after-tax benefit of $14.0 million related to the settlement of an incentive resulting from the previous capital investment at CMC's Steel Oklahoma micro mill. This benefit was partially offset by approximately $5.4 million in net after-tax costs associated with ongoing commissioning efforts at Arizona 2.  Excluding these items, second quarter adjusted earnings were $171.3 million, or $1.44 per diluted share, compared to adjusted earnings of $187.6 million, or $1.53 per diluted share, in the prior year period.  The second quarter of fiscal 2022 included a net after-tax benefit of $195.8 million, primarily related to a gain on the sale of real estate in Southern California. "Adjusted EBITDA," "core EBITDA," "adjusted earnings" and "adjusted earnings per diluted share" are non-GAAP financial measures. Details, including a reconciliation of each such non-GAAP financial measure to the most directly comparable measure prepared and presented in accordance with GAAP, can be found in the financial tables that follow. Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, said, "CMC achieved strong financial results during the second quarter while managing a number of challenges, including weather-related shipment disruptions in our core geographies, costs associated with a major planned outage and steel product metal margin pressures.  These headwinds notwithstanding, our key internal indicators remain positive, signaling a strong outlook for demand conditions in North America during the 2023 construction season and beyond.  We are entering spring with record backlog value for this time of year and continue to experience healthy project bid volumes, giving us confidence in the strength of our book of business.  Additionally, CMC stands to benefit from sustainable strong demand from reshoring-oriented industrial projects and public infrastructure work, the more rebar-intensive nature of which represents a long-term tailwind for our business." Ms. Smith continued, "The start-up of our Arizona 2 mill by the end of this spring positions CMC to capitalize on these emerging structural trends.  We are currently finalizing on-site preparation for commissioning and are excited to ramp up this world-class asset, the first in the world to have merchant bar production capabilities in a continuous process.  Together with our fourth micro mill under development in Berkeley County, West Virginia and our Tensar growth platform, we continue to expect that our strategic investments will meaningfully enhance CMC's through-the-cycle cash flows and return on capital, creating substantial value for our shareholders while also enhancing our leadership position in sustainability metrics." The Company's balance sheet and liquidity position remained strong as of February 28, 2023.  Cash and cash equivalents ended the quarter at $604.0 million, while available liquidity totaled $1.5 billion.  CMC repurchased 330,000 shares of common stock during the quarter, returning $17.2 million of cash to shareholders.  As of February 28, 2023, $121.8 million remained available under the current share repurchase authorization. On March 22, 2023, the board of directors declared a quarterly dividend of $0.16 per share of CMC common stock payable to stockholders of record on April 3, 2023. The dividend to be paid on April 12, 2023, marks the 234th consecutive quarterly payment by the Company, and represents a 14% increase from the dividend paid in April 2022.  Business Segments - Fiscal Second Quarter 2023 Review Demand for CMC's finished steel products in North America remained healthy during the quarter, though construction activity slowed in certain geographies due to weather-related disruptions.  Downstream bid volumes, a significant indicator of the construction project pipeline, improved from a year ago, resulting in expansion of contract backlog volume and value levels compared to the prior year period.  Demand from industrial end markets, which are important for merchant products, were stable on both a sequential and year-over-year basis. The North America segment reported adjusted EBITDA of $299.3 million for the second quarter of fiscal 2023, in comparison to $535.5 million in the prior year period.  Excluding a $273.3 million gain on the sale of real estate recognized during the prior year period, the current year results represent a 14% increase.  The improvement was driven by expanded margins over scrap cost on shipments of steel and downstream products.  Controllable costs per ton of finished steel increased compared to the first quarter of fiscal 2023, primarily due to a significant scheduled replacement project that occurred during the quarter, as well as lower fixed cost leverage on seasonally slower shipments.  Per unit costs of several key consumables continued to moderate throughout the quarter after reaching a peak late in fiscal 2022. Shipment volumes of finished steel, which include steel products and downstream products, were relatively unchanged from the prior year period.  Volume growth was constrained by weather challenges that included freezing and icy conditions in Texas and Oklahoma and flooding in California.  The average selling price for steel products decreased by $56 per ton compared to the second quarter of fiscal 2022, while the cost of scrap utilized declined $90 per ton, resulting in a year-over-year increase of $34 per ton in steel products margin over scrap.  The average selling price for downstream products increased by $249 per ton from the prior year period and $19 per ton on a sequential quarter basis.  The Europe segment reported adjusted EBITDA of $12.9 million for the second quarter of fiscal 2023, down 84% compared to adjusted EBITDA of $81.1 million for the prior year period.  The decline was driven by higher energy costs, lower metal margins, and a modest reduction in shipment volumes.  Europe end market demand was mixed during the quarter.  Polish construction activity continued to grow modestly on a year-over-year basis, while industrial production across Central Europe continued to contract. CMC's advantageous cost position and operational flexibility provided the ability to maintain strong shipment levels.  Second quarter of fiscal 2023 volume of 436,000 tons was 20% above the average quarterly level of the last 10 years. Average selling price decreased by $95 per ton in the second quarter compared to the prior year period, while the cost of scrap utilized declined $55 per ton. The result was a year-over-year decline in margin over scrap of $40 per ton.  Average selling price and margin over scrap also decreased on a sequential basis by $36 per ton and $59 per ton, respectively. Outlook Ms. Smith said, "We remain confident in our outlook for financial performance in fiscal 2023, and we expect to generate sequential improvement in core EBITDA during the third quarter.  North America finished steel product shipments are anticipated to improve from second quarter levels due to normal seasonality, the recovery of volumes delayed by weather disruptions, and the support of a historically high downstream backlog.  We expect current and new industrial projects, as well as growing levels of state and federal infrastructure spending, will support CMC's North America volumes in the quarters ahead.  In Europe, we anticipate seasonal improvement, and expect shipment levels will remain above the long-term historical average due to the enhanced production capabilities of our facilities."  Ms. Smith added, "In the third quarter, we look forward to commissioning our Arizona 2 micro mill, representing the next phase of growth at CMC, and we also anticipate that recent North America long steel price increase announcements will stabilize metal margins at historically high levels.  At the same time, the third quarter will be impacted by a scheduled upgrade project similar in magnitude to the planned outage taken during the second quarter." Conference Call CMC invites you to listen to a live broadcast of its second quarter fiscal 2023 conference call today, Thursday, March 23, 2023, at 11:00 a.m. ET.  Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer, will host the call. The call is accessible via our website at www.cmc.com. In the event you are unable to listen to the live broadcast, the call will be archived and available for replay on our website on the next business day. Financial and statistical information presented in the broadcast are located on CMC's website under "Investors." About Commercial Metals Company Commercial Metals Company and its subsidiaries manufacture, recycle and fabricate steel and metal products and provide related materials and services through a network of facilities that includes seven electric arc furnace ("EAF") mini mills, two EAF micro mills, one rerolling mill, steel fabrication and processing plants, construction-related product warehouses and metal recycling facilities in the United States and Poland. Through its Tensar operations, CMC is a leading global provider of innovative ground and soil stabilization solutions selling into more than 80 national markets through two major product lines: Tensar® geogrids and Geopier® foundation systems. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade actions, the effects of continued pressure on the liquidity of our customers, potential synergies and organic growth provided by acquisitions and strategic investments, demand for our products, shipment volumes, metal margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future availability and cost of supplies of raw materials and energy for our operations, share repurchases, legal proceedings, construction activity, international trade, the impact of the Russian invasion of Ukraine, capital expenditures, tax credits, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations, the expected capabilities and benefits of new facilities, the timeline for execution of our growth plan, and our expectations or beliefs concerning future events. The statements in this release that are not historical statements, are forward-looking statements. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "future," "intends," "may," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases, as well as by discussions of strategy, plans or intentions. Our forward-looking statements are based on management's expectations and beliefs as of the time this news release was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in our filings with the Securities and Exchange Commission, including, but not limited to, in Part I, Item 1A, "Risk Factors" of our annual report on Form 10-K for the fiscal year ended August 31, 2022 as well as the following: changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our downstream contracts due to rising commodity pricing; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; the impact of the Russian invasion of Ukraine on the global economy, inflation, energy supplies and raw materials, which is uncertain, but may prove to negatively impact our business and operations; increased attention to environmental, social and governance ("ESG") matters, including any targets or other ESG or environmental justice initiatives; operating and startup risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investments; impacts from global public health epidemics, including the COVID-19 pandemic, on the economy, demand for our products, global supply chain and on our operations; compliance with and changes in existing and future laws, regulations and other legal requirements and judicial decisions that govern our business, including increased environmental regulations associated with climate change and greenhouse gas emissions; involvement in various environmental matters that may result in fines, penalties or judgments; evolving remediation technology, changing regulations, possible third-party contributions, the inherent uncertainties of the estimation process and other factors that may impact amounts accrued for environmental liabilities; potential limitations in our or our customers' abilities to access credit and non-compliance with their contractual obligations, including payment obligations; activity in repurchasing shares of our common stock under our share repurchase program; financial and non-financial covenants and restrictions on the operation of our business contained in agreements governing our debt; our ability to successfully identify, consummate and integrate acquisitions and realize any or all of the anticipated synergies or other benefits of acquisitions; the effects that acquisitions may have on our financial leverage; risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals;  lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; the impact of goodwill or other indefinite lived intangible asset impairment charges; the impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including changes to current trade regulations, such as Section 232 trade tariffs and quotas, tax legislation and other regulations which might adversely impact our business; availability and pricing of electricity, electrodes and natural gas for mill operations; our ability to hire and retain key executives and other employees; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; information technology interruptions and breaches in security; our ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance; unexpected equipment failures; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.   COMMERCIAL METALS COMPANY FINANCIAL & OPERATING STATISTICS (UNAUDITED) Three Months Ended Six Months Ended (in thousands, except per ton amounts) 2/28/2023 11/30/2022 8/31/2022 5/31/2022 2/28/2022 2/28/2023 2/28/2022 North America Net sales $  1,640,933 $  1,816,899 $  1,997,636 $  2,033,150 $  1,614,224 $  3,457,832 $  3,267,846 Adjusted EBITDA 299,311 377,956 370,516 379,355 535,463 677,267 803,987 External tons shipped Raw materials 321 316 359 353 329 637 663 Rebar 425 461 451 505 407 886 849 Merchant and other 236 243 249 274 245 479 502 Steel products 661 704 700 779 652 1,365 1,351 Downstream products 311 382 432 399 327 693 727 Average selling price per ton Raw materials $           868 $           824 $           950 $       1,207 $       1,103 $           846 $       1,068 Steel products 985 1,020 1,104 1,110 1,041 1,003 1,007 Downstream products 1,418 1,399 1,348 1,244 1,169 1,408 1,126 Cost of raw materials per ton $           639 $           598 $           717 $           908 $           834 $           618 $           800 Cost of ferrous scrap utilized per ton $           346 $           325 $           387 $           472 $           436 $           335 $           432 Steel products metal margin per ton $           639 $           695 $           717 $           638 $           605 $           668 $           575.....»»

Software developer pay spans a notoriously wide range, but few would argue that U.S.-based development costs are “cheap.” According to a U.S. News & World Report analysis, the median U.S. software developer earned $120,730 in 2021. Experienced devs can easily command $200,000 per year in cash compensation alone, with incentive pay and company benefits adding […] Software developer pay spans a notoriously wide range, but few would argue that U.S.-based development costs are “cheap.” According to a U.S. News & World Report analysis, the median U.S. software developer earned $120,730 in 2021. Experienced devs can easily command $200,000 per year in cash compensation alone, with incentive pay and company benefits adding significantly to that total. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {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. You most likely know this already. You also most likely know that complex software development projects take months and involve multiple developers and engineers. “Cost spiral” doesn’t begin to describe the situation. You don’t need to be reminded how important it is to cut devops costs wherever possible. Your bosses and shareholders (perhaps one and the same) remind you enough. Fortunately, emerging technologies and tools are making it easier than ever to reduce software development expenses without compromising output, efficiency or quality. It’s no exaggeration to say that these new capabilities are revolutionizing software development and helping devops teams save money across the board. Let’s take a closer look at four types of emerging capabilities: next-generation project management tools, cloud computing services, task automation tools and ephemeral development environments. Each offers potentially game-changing opportunities for teams looking to work faster, smarter and more efficiently. Using next-generation project management tools to drive software development efficiency and collaboration Signs of bad project management include missed deadlines, poor quality control, and infighting within teams that need to collaborate closely. These and other direct results of poor project management are harmful to the broader organization (and to the careers of those responsible for them). Yet poor project management has a direct financial cost as well. This goes back to what we’ve already discussed: the high cost of labor in a product development environment and, specifically, the very high cost of labor in a software development context. Every day that passes without an anticipated deliverable is a day that brings unanticipated costs. And while every project budget has some built-in wiggle room, said costs eventually become unacceptable. The good news is that software development teams can turn to an already-existing library of scalable, easy-to-use project management tools that easily map to devops use cases. Your team may already use some basic project management tools to manage workflows and keep track of deliverables timeframes and responsibilities, but if you haven’t surveyed the landscape and assessed individual tools’ capabilities relative to your team’s needs, you’re likely not maximizing their potential. Look for project management tools with the following capabilities: Use cases specifically designed for your specific development framework. For example, Jira’s project management tool is specifically tailored to Agile development teams. Relevant integrations with third-party apps, from general-purpose tools like Google Docs (where your spreadsheets likely live already) to devops, cloud storage, and even CRM software. Sophisticated calendar views that enable visual-oriented team members to “see” their project responsibilities at a glance. Powerful developer APIs that allow you to customize the project management interface to your needs and produce efficiency-oriented outputs. Ideally, your team relies on one core project management tool to manage everything it’s working on together, with individual developers free to use additional tools to manage their personal workflows. That may require you to cut out a less optimal tool (or several) and disrupt legacy use cases, but it’s better to rip off the Band-Aid now, before a bona fide productivity crisis hits. Further down the road, untangling competing and deeply entrenched workflows will surely prove more costly and more disruptive. Leveraging cloud computing services for projects with multiple stakeholders Like project management software, cloud computing services no longer count as revolutionary. If your team is small, it might use GSuite for cloud-based storage and collaboration. If it’s larger, it might use Microsoft Azure or Amazon Web Services (whose incomprehensible value only underscores the critical importance of cloud computing). And so you’re already aware that cloud computing services make development more efficient by enhancing collaboration, reducing duplication of effort, and sharply cutting reliance on onsite database hosting, file storage and data processing. Your team can and should use cloud computing services in additional ways that even more directly improve devops efficiency and cost control: Containerization: Containerization enables software deployment on any computing infrastructure. Bundling app code and file libraries in a self-contained, platform-agnostic unit eliminates the need to match platform-specific software packages (i.e., Windows-compatible) with the correct machines. Containerized deployment is more portable, more scalable and more resilient — and it’s only possible in the cloud. Microservices (vs. monolithic architecture): Microservices break up the development architecture into many small, agile units that communicate via API. Rather than an inflexible “monolith” that needs to be reworked as it scales, microservices can be scaled internally (or new ones created) as needs arise. Like containerization, it’s a much more flexible, agile, and ultimately low-cost way to manage complex devops workflows. Automating repetitive tasks throughout the development lifecycle Task and workflow automation tools are improving at an incredible clip, and the advantages of next-generation automation are particularly impressive for devops teams. As just one example, telecom giant Ericsson drove significant cost savings by automating key aspects of their software development pipeline and transitioning to a continuous deployment model, according to a study published in Empirical Software Engineering. Transitioning to continuous deployment is a time- and cost-intensive process that may not be practical for smaller teams, at least not in the near term. But your team can leverage task automation in many other ways. Testing automation deserves special mention here. Automated testing and QA solutions like Robot Framework and Zephyr (respectively) reduce the need for repetitive, labor-intensive poking and prodding by human devs whose efforts are better spent elsewhere. By finding bugs and quality issues earlier in the development workflow, they also reduce the need for costly and time-consuming fixes further along in the process. Increasingly, code generation itself is automated, thanks to tools like Eclipse. These generative tools will only improve as processing power increases and training sets expand. Consequently, this sets the stage for a near-future scenario where devs will need to manually write far less code. That, in turn, will allow devops teams to stretch dev resources further. Additionally, it will free up person-hours for more creative or problem-focused work. Utilizing ephemeral environments to improve development speed and quality Finally, software development teams can achieve efficiency and cost improvements at virtually any scale by utilizing ephemeral environments. These are temporary staging environments that can be created at will, generally for a single-purpose feature test or bug fix, and then eliminated when no longer needed to keep costs low. Ephemeral environments offer clear advantages for development teams. They reduce pull request backlogs, a notorious sticking point (and cost driver) for larger teams. They’re isolated, which reduces the risk of bug-inducing branch conflicts. They’re fully automated, which frees up engineers to deal with more important matters. And because they enable more targeted, granular testing, they speed up the development process overall. They also reduce the risk of an unacceptable issue breaching the main code branch. Repairs on the main code branch are much more time-consuming and costly. The result is a faster, more efficient workflow that scales with your team in response to demand. For example, Uffizzi’s on-demand ephemeral environment tool helped Spotify add 20% more features to every release of its popular Backstage developer portal platform. Backstage grew rapidly after initial open-sourcing in 2020 and now averages some 400 active pull requests per month. The transition to ephemeral environments slashed average pull request completion times across the platform. Ephemeral environments can also help smaller development teams achieve the same economies of scale as larger teams. For example, moving to a continuous deployment model might seem out of reach for small teams under the old “bottlenecked” shared environment framework.  Start by streamlining this process and freeing up department resources for longer-term strategic work. Ephemeral environments (and other process automation tools) make such shifts possible. It’s no accident that Uffizzi’s out-of-the-box ephemeral environment solution supercharges the continuous integration/delivery process. Opportunities abound now, with more to come Change is already here for software teams accustomed to the old way of doing things. These four emerging or expanding technologies and tools — Next-generation project management software Expansive and flexible cloud computing services Increasingly intelligent and capable task automation tools Scalable, on-demand ephemeral environments for better testing and QA — are making life easier and development faster for devops departments around the world. Their capabilities and use cases will only expand as time goes on.   These four technologies aren’t the only emerging opportunities for software developers and the companies that employ them, however. Around-the-bend and over-the-horizon capabilities could change the tech industry in even more fundamental ways: AI-driven platforms for developers, like TensorFlow, that promise to dramatically speed up development timeframes and allow teams to do much more with much less Infrastructure as Code (IaC) capabilities that break down silos between devops teams and the rest of an organization and create trusted, reliable code frameworks that ultimately reduce developer and maintainer workloads Low- and no-code application development, which — while possibly overhyped in the short term — could further break down barriers and enable faster, more collaborative action Augmented reality tools and apps, whose potential impact remains speculative but which will likely play an increasingly important role in software and product development over the next decade Final Thoughts In the coming years, odds are you’ll integrate all four of these capabilities into your devops workflows by then. You’ll most likely take advantage of other emerging technologies and tools in the near future too. These may even include some we don’t yet know about. As the pace of innovation accelerates, staying one step ahead of the competition — and doing right by your firm’s stakeholders, financially and otherwise — means watching closely for new tech that can speed up your development timelines and reduce overall devops costs. But let’s not get ahead of ourselves. In many respects, the future is already here, and you have everything you need to streamline your operations today. Now it’s time to execute. Article by Deanna Ritchie, Due About the Author Deanna Ritchie is a managing editor at Due. She has a degree in English Literature. She has written 2000+ articles on getting out of debt and mastering your finances. She has edited over 60,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite......»»

European Spring? Germany Braces For Major Strikes While France Burns The "winter of discontent" that has been sweeping across Europe has now escalated into a "spring of discontent," with strikes and protests set to spread from France, Greece, and other surrounding countries to Germany.  According to Reuters, Germany's Verdi union and the railway and transport union EVG are preparing to unleash paralyzing strikes on the country's airports and railways next Monday. Verdi is negotiating for 2.5 million public sector workers, including ones at airports and other public transport hubs. The union has demanded higher wages due to persistent inflation pressures. EVG is negotiating for 230,000 employees at railway company Deutsche Bahn and bus companies.  Meanwhile, a recession looms for Europe's largest economy, which finds itself in the midst of an inflationary crisis. After experiencing a 0.4% GDP contraction in the fourth quarter of 2022, it's anticipated that the economy will once again contract in the first quarter.  "German economic activity will probably fall again in the current quarter," the Bundesbank said. "However, the decline is likely to be less than in the final quarter of 2022." Two consecutive quarters of negative growth indicate recession and come as inflation weighs heavily on consumption. The combination of the two crushes living standards and is sparking a wave of discontent.  While Germany braces for strikes and protests next week, France, Europe's third-largest economy, is already burning as President Emmanuel Macron rammed through unpopular pension reform.  With growing instability in Western nations and the threat of a broadening banking crisis, the primary concern is whether NATO is adequately equipped to handle future conflicts. Tyler Durden Wed, 03/22/2023 - 02:45.....»»

European Bank Bulls Are Resisting Capitulation By Michael Msika and Julien Ponthus, Bloomberg Markets Live reporters and strategists Some investors are tiptoeing back into European banking shares, greeting the swift takeover and central bank action that finally removed the yearslong Credit Suisse overhang. Yet, with confidence still fragile, buying banks remains a trade for the brave. Dip buyers stepped in after early-Monday stock market declines that were sparked by concerns over parts of the emergency Sunday-night deal between Credit Suisse and UBS. A lot of bad news is already priced in, many reckon. “We take the view that in 6 to 12 months, European banks will be higher than what they are now,” says Alexandre Hezez, chief investment officer at at Group Richelieu, a Paris-based asset manager. “One can’t say that the sector is overvalued. Results this year are expected to be good, we don’t see that changing significantly.” Several strategists applauded the UBS-Credit Suisse tie-up, with HSBC’s Max Kettner describing himself as “much more confident.” Kettner notes that Europe’s bank share prices already incorporate an awful lot of bad news, with their index down about 16% in March. “Sentiment has gone and de-rated sufficiently to bearish levels that I’d be very-very careful to throw in the towel on constructive views now,” he adds. The selloff slammed European bank valuations hard, taking them back to where they were in October. Average price-to-earnings ratios are now around 6.5 times forward earnings, not far off the levels seen during past crises, including ones in 2008 or 2011. The sector also offers the highest forward dividend yield in Europe, at about 7.6%. “I think that European banks are solid and resilient,” says Simon Outin, global head of financials credit research at Allianz Global Investors.  “For me, the sector is solid, in terms of solvency, in terms of liquidity. We are not in 2008, really not.” Concerns are by no means over. US authorities are fighting to head off potential deposit runs at regional banks. Rising interest rates and tightening financial conditions likely portend recession. A rise in default insurance costs at Deutsche Bank shows contagion fears still linger. So whether bulls do ultimately end up on top hinges now on a few things. First, how well central banks navigate the next phase of their inflation battle, and how severe the anticipated recession could be. Banks typically perform well as interest rates and bond yields rise, though not during economic downturns. Analysts reckon that current yield levels on euro-zone bonds still imply some upside for bank shares, given they did not fully capture last year’s surge in borrowing costs. Investors are also watching to see how policymakers calm the uproar around Credit Suisse’s Additional Tier 1 bonds — the riskiest bond category whose holders were wiped out in the merger. A rout in AT1 debt of other European lenders is raising fears of a seize-up in the market, which has been a key funding source for banks since the 2008 crisis. “The risk is that all AT1 bonds collapse - so beyond Credit Suisse. This will put major pressure on banks’ financial ratios,” says Charles-Henry Monchau, chief investment officer at Banque SYZ. Tyler Durden Tue, 03/21/2023 - 11:43.....»»

The most important chart in housing… The ultimate predictor of home prices… Are we in for another 2008? The 2008 Housing Crash You probably remember the 2008 housing crisis all too well… More than eight million Americans lost their homes. Another 10 million lost their jobs. And the average home lost over a quarter of […] The most important chart in housing… The ultimate predictor of home prices… Are we in for another 2008? The 2008 Housing Crash You probably remember the 2008 housing crisis all too well… More than eight million Americans lost their homes. Another 10 million lost their jobs. And the average home lost over a quarter of its value. .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 Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio 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 Now, many folks think we’re rushing toward another 2008-style housing crash. According to a recent survey by Cinch Home Services, 53% of prospective homebuyers believe the real estate market will crash this year. I understand where their fear is coming from… Zillow (NASDAQ:ZG), the US’s largest real estate marketplace, shows average US home prices have been falling for five straight months. In New York and Los Angeles, average home prices have fallen 10%. It’s even worse in San Francisco, where they’re down 13%. Those might not sound like huge losses… but you must understand that in America, houses aren’t just houses. The typical American has over 70% of their net worth in their house. The average middle-class family’s house IS their nest egg. When its value starts depreciating, it can feel like a comfortable retirement is slipping away. So, is this the start of the next great housing crash... or nothing to lose sleep over? Let’s look at two key indicators… Total US Housing Inventory The most important chart in housing is at its lowest level in decades… Back in 2008, construction firms were building homes at full steam. They were eager to profit from soaring property prices. From 2005 to 2008, the number of homes available for sale ballooned from two million to four million. The problem was homebuilders were creating a massive supply glut. Once the housing bubble popped, buyers disappeared. Millions of homes were left on the market... and prices crashed. The ‘08 housing bust was so bad, it turned off many ordinary Americans from investing in housing altogether. And it shattered the confidence of homebuilders, too… Scarred by the housing bust, homebuilders have been sitting on their hands for most of the past decade. But by building less, they’ve created a different kind of problem—a housing shortage. Today, available homes for sale are at the lowest level in decades… United States Total Housing Inventory Source: Trading Economics Total US housing inventory plunged from four million in 2008 to under one million today. To put that into perspective, there were four million homes sold in America last month alone! This makes today’s situation the polar opposite of 2008. Back then, the market was oversupplied. Today, housing inventory is alarmingly low. As long as this shortage persists, home prices won’t crash like they did in 2008. Even with mortgage rates jumping to their highest levels in over a decade, there are still more Americans looking to buy a home as there are homes available. Crystal Ball Indicator My “crystal ball” indicator is making a surprising prediction… Ever hear the phrase “stocks are forward-looking”? Stock prices don’t just reflect current reality. They reflect what investors anticipate will happen in the future. It’s why the stock market usually peaks before a recession begins, and bottoms before it ends. Likewise, individual stocks can predict what will happen to specific industries. DR Horton Inc (NYSE:DHI) is America’s largest homebuilder. It’s my “crystal ball” for home prices. No business is more exposed to the housing market than DR Horton. When the housing bubble burst in 2008, its sales plunged 85%. But the stock peaked a full year before home prices started falling. Investors “sniffed out” trouble long before it arrived. And DHI also anticipated the bottom, rallying a few months ahead of the housing recovery. DHI was correct last year, too… As I showed you earlier, US housing prices peaked in August. If you followed D.R. Horton stock, you’d have known what was coming. As you can see, DHI peaked in December 2021… You’ll notice something else as well… DHI bottomed in the summer months. And now it’s climbing higher. If it’s right—and it usually is—housing could be set for a rebound. Article by Stephen McBride - Chief Analyst, RiskHedge To get more ideas like this sent straight to your inbox every Monday, Wednesday, and Friday, make sure to sign up for The RiskHedge Report, a free investment letter focused on profiting from disruption. Expect smart insights and analysis on the latest breakthrough technologies, the big stories the mainstream media isn't reporting on, and much more... including actionable recommendations. Click here to sign up......»»

Amazon announced another headcount cut after slashing 18,000 jobs in January as waves of layoffs hit tech companies and spread to other industries. In a memo sent to employees on Monday, Amazon's CEO Andy Jassy said the company would be eliminating 9,000 positions from its ranks.Mike Blake/Reuters Amazon, Meta, and Twitter employees are the latest to be hit by a wave of layoffs. Over the past few months, layoffs have expanded outside of tech, media, and finance as Dow and 3M announced cuts. See the full list of layoffs so far in 2023. A wave of layoffs that hit dozens of US companies toward the end of 2022 shows no sign of slowing down into 2023. On Monday, e-commerce behemoth Amazon told employees that it would be eliminating 9,000 roles, which comes on top of the 18,000 job cuts it announced earlier this year. In a message to employees CEO Andy Jassy said, "Some may ask why we didn't announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Amazon joins a large group of major corporations that have made significant cuts in the new year: tech companies, including Meta and Google, and finance behemoths, like Goldman Sachs, announced massive layoffs in the first weeks of 2023 amid a continued economic downturn and stagnating sales.The downsizing followed significant reductions that companies including Meta and Twitter already made last year. The layoffs have primarily affected the tech sector, which is now hemorrhaging employees at a faster rate than at any point during the pandemic, the Journal reported. According to data cited by the Journal from Layoffs.fyi, a site tracking layoffs since the start of the pandemic, tech companies slashed more than 150,000 in 2022 alone — compared to 80,000 in 2020 and 15,000 in 2021. Here are the notable examples so far in 2023: Amazon: 9,000 more jobsAmazon CEO Andy Jassy announced on Monday that the company would be eliminating another 9,000 roles, on top of the 18,000 announced in January.Richard Brian/ReutersOn Monday, Amazon announced that it would be cutting 9,000 jobs from its workforce over the coming weeks. The cuts come on the heels of the 18,000 roles the company announced it was cutting back in January. In a message to employees shared on Amazon's site, CEO Andy Jassy noted that the impacted positions are largely in the Amazon Web Services, People Experience and Technology Solutions, Advertising, and Twitch departments. In the memo, Jassy said the company staggered its layoff announcements because "not all of the teams were done with their analyses in the late fall." He added, "rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Meta: 10,000 workersMeta CEO Mark ZuckerbergMark Lennihan/APRoughly 10,000 Meta workers will find out that their jobs have been cut between March and May, according to an announcement by the company's founder and CEO, Mark Zuckerberg. Zuckerberg also said the company would close around 5,000 open roles that haven't yet been filled as part of the company's effort to downsize. "My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead," Zuckerberg wrote in a post on Facebook announcing the layoffs. In the post, Zuckerberg said that members of Meta's recruiting team would learn about the fate of their jobs in March, while tech workers would find out in late April, and business groups would find out in May. "In a small number of cases, it may take through the end of the year to complete these changes," he wrote. The job cuts come less than 5 months after Meta slashed 11,000 workers, or about 13% of its workforce, in November. At the time, Zuckerberg called the layoffs a "last resort."  SiriusXM: 475 rolesJennifer Witz, CEO of SiriusXM said the company was cutting 475 roles on March 6.Cindy Ord / Staff/ Getty ImagesThe radio company said March 6th that it was cutting 8% of its staff or 475 roles according to a statement posted on the company's website from CEO Jennifer Witz.In the statement, Witz said "nearly every department" across the company will be impacted. She also noted that those impacted will be contacted directly and will have the opportunity to speak with a leader from their department as well as a member of the company's People + Culture team. Impacted employees will also be provided with exit packages that include severance, transitional health insurance benefits, Employee Advocacy Program continuation, and outplacement services, Witz noted.Citigroup: hundreds of jobsCiti CEO Jane FraserPatrick T. Fallon/AFP via Getty ImagesCiti plans to cut hundreds of jobs, with many focused on the company's investment bank division. The total headcount cut will reportedly amount to less than 1% of Citi's more than 240,000 workers and are part of Citi's normal course of activities.Citi's cuts were first reported by Bloomberg. In January, Citi's CFO told investors the company remained "focused on simplifying the organization, and we expect to generate further opportunities for expense reduction in the future."Citi declined Insider's request to provide comment on the record. Waymo: reported 209 roles so farWaymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 8% of the unit's staff has been cut this year.Peter Prado/Insider; Vaughn Ridley/Sportsfile via Getty ImagesAlphabet's self-driving car unit Waymo has reportedly laid off a total of 209 employees this year in two rounds of cuts, according to The Information. Waymo reportedly laid off 137 employees on March 1, according to The Information. Waymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 209 employees— approximately 8% of the company's staff— have been cut this year, according to an internal email seen by The Information.Waymo did confirm the cuts to Insider but did not specify the number of roles impacted or the date the first round of cuts ocurred.  Thoughtworks: reported 500 employeesThoughtworks laid off 500 employees on February 28. That day, CEO Guo Xiao said in the company's earnings release that it was "pleased" with its performance in the fourth quarter of 2022.Screenshot of Guo Xiao from the Thoughtworks website.Thoughtworks, a software consultancy firm, reportedly laid off 500 employees or 4% of its global workforce, according to TechCrunch. TechCrunch noted that the company "did not dispute" the figure when reached for comment on March 1. According to TechCrunch, Thoughtworks "initially informed" the affected employees about the decision on February 28. That same day, Thoughtworks reported that its revenue had increased 8.3% between the fourth quarter of 2022 and the fourth quarter of 2021. The company also reported a more than 21% year over year revenue increase for 2022. In the company's earnings release, Thoughtworks' CEO Guo Xiao said, "We are pleased with our performance in the fourth quarter and our clients continue to look to us to help them navigate these uncertain times and tackle their biggest technology challenges."General Motors: reported 500 salaried jobsGM CEO Mary Barra.Patrick T. Fallon/Getty ImagesGeneral Motors plans to cut 500 executive-level and salaried positions, according to a report from The Detroit News. The layoffs come only one month after CEO Mary Barra told investors and reporters on the company's earnings call, "I do want to be clear that we're not planning layoffs." In a memo to employees, seen by Insider, GM's chief people officer wrote, "we are looking at all the ways of addressing efficiency and performance. This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration." Employees who are getting laid off were informed on Feb. 28. General Motors confirmed the layoffs to Insider but did not confirm a specific number of employees getting cut. Twitter: about 200 employeesElon Musk is Twitter's CEO and ownerREUTERS/Jonathan ErnstThe layoffs reportedly haven't stopped at Twitter under Elon Musk. The social media company reportedly laid off 200 more employees on a Saturday night in late February, according to the New York Times. Some workers reportedly found out they had lost their jobs when they couldn't log into their company emails.Musk laid off 50% of Twitter's workforce in November after buying the company for $44 billion. Yahoo: 20% of employeesSOPA Images / Getty ImagesYahoo announced it will eliminate 20% of its staff, or more than 1,600 people, as part of an effort to restructure the company's advertising technology arm, Axios reported on February 9.Yahoo CEO Jim Lanzone told Axios that the cuts are part of a strategic overhaul of its advertising unit and will be  "tremendously beneficial for the profitability of Yahoo overall."    Disney: 7,000 jobsBob Iger, CEO of DisneyCharley Gallay/Stringer/Getty ImagesFresh off his return as Disney CEO, Bob Iger announced February 8 that Disney will slash 7,000 jobs as the company looks to reduce costs. Iger, who returned to the position in November 2022 to replace his successor Bob Chapek after first leaving in 2020, told investors the cuts are part of an effort to help save an estimated $5.5 billion. "While this is necessary to address the challenges we are facing today, I do not make this decision lightly," Iger said. "I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I am mindful of the personal impact of these changes."DocuSign: 10%Igor Golovniov/SOPA Images/LightRocket/Getty ImagesDocuSign plans to slash 10% of employees as part of a restructuring plan "designed to support the company's growth, scale, and profitability objectives," the electronic signature company wrote in a Securities and Exchange Commission filing on Feb. 16. The company said the restructuring plan is expected to be complete by the second quarter of fiscal 2024, per the filing. Affirm: 19% of its workforceAffirm co-founder and CEO Max LevchinAffirmAffirm announced on February 8 it plans to slash 19% of its workforce, after reporting declining sales that missed Wall Street expectations. Affirm co-founder and CEO Max Levchin said in a call with investors that the technology company "has taken appropriate action" in many areas of the business to navigate economic headwinds, including creating a "smaller, therefore, nimbler team.""I believe this is the right decision as we have hired a larger team that we can sustainably support in today's economic reality, but I am truly sorry to see many of our talented colleagues depart and we'll be forever grateful for their contributions to our mission," he said.  GoDaddy: 8% of workersGoDaddy's CEO Aman Bhutani in September 2019Don Feria/Invision/AP ImagesGoDaddy, the website domain company, announced on February 8 it will cut 8% of its global workforce. "Despite increasingly challenging macroeconomic conditions, we made progress on our 2022 strategic initiatives and continued our efforts to manage costs effectively," GoDaddy CEO Aman Bhutani wrote in an email to staffers."The discipline we embraced was important but, unfortunately, it was not sufficient to avoid the impacts of slower growth in a prolonged, uncertain macroeconomic environment."Zoom: 15% of staffZoom CEO Eric Yuan.AP Photo/Mark LennihanZoom CEO Eric Yuan announced in a memo to workers that the company would reduce its headcount by 15%, or about 1,300 employees, on February 7. He attributed the layoffs to "the uncertainty of the global economy and its effect on our customers" but also said the company "made mistakes" as it grew. "We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably toward the highest priorities," Yuan said. In the memo, Yuan also announced that he would cut his salary by 98% in 2023 and forgo his corporate bonus. In addition, other members of the executive leadership team will also reduce their base salaries by 20% this year, according to Yuan. eBay: 500 jobseBay CEO Jamie Iannone told employees Tuesday that the company would be eliminating 500 roles.Harry Murphy/Sportsfile for Web Summit via Getty ImagesOn Tuesday, e-commerce giant eBay told employees that it would be eliminating 500 roles, or about 4% of its workforce, according to a message included in a regulatory filing on Tuesday. In the message, CEO Jamie Iannone wrote "Today's actions are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform."He added, "this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape." Dell: 5% of workforceDell is eliminating approximately 5% of its workforce. The company's co-chief operating officer Jeff Clarke told employees in a memo, "market conditions continue to erode with an uncertain future."Kevork Djansezian / Staff/Getty ImagesOn February 6, Dell said in a regulatory filing that it would be eliminating about 5% of its workforce. The percentage amounts to approximately 6,650 roles based on numbers that Dell provided Insider. In a memo sent to employees posted on Dell's website, co-chief operating officer Jeff Clarke, said "market conditions continue to erode with an uncertain future." He also noted in the memo that the company had paused hiring, limited employee traveling, and decreased spending on outside services. He added, however, "the steps we've taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough."Pinterest: 150 jobsBen Silbermann is the founder and executive chair of Pinterest. He was the company's CEO until June 2022.Horacio Villalobos/Getty ImagesPinterest said it would cut 150 workers, or less than 5% of its workforce, on February 1, the company confirmed to Insider.  "We're making organizational changes to further set us up to deliver against our company priorities and our long-term strategy," a company representative said.The social media company was recently the target of activist investor Elliott Management, agreeing to add one of the firm's representatives to its board last month.   Rivian: 6% of jobsRivian CEO RJ Scaringe.Carlos Delgado/Associated PressRivian's CEO RJ Scaringe announced the EV company would cut 6% of its workforce in a memo to employees, the company confirmed to Insider. This is the company's second round of job cuts in the last 6 months after Scaringe announced a separate 6% workforce reduction in July 2022. In his memo to staff, Scaringe said Rivian needs to focus its resources on ramping up production and reaching profitability. BDG Media: 8% of staffScreengrab of Gawker's homepageGawkerBDG Media announced on February 1 that it was shutting down pop-culture site Gawker and laying off 8% of its staff, according to Axios. BDG owns Bustle, Elite Daily, and other lifestyle and news websites. "After experiencing a financially strong 2022, we have found ourselves facing a surprisingly difficult Q1 of 2023," CEO Bryan Goldberg wrote in a memo to staff seen by Axios. Splunk: 325 jobsGary Steele took over as Splunk's CEO in April 2022.YouTube/ProofpointSoftware and data platform Splunk is the latest in a long list of tech companies to announce layoffs in recent months. On February 1, the company said it would lay off 4% of its staff and scale back the use of consultants to cut costs, according to a filing viewed by Insider. The layoffs will reportedly be focused on workers in North America, and CEO Gary Steele told employees Splunk would continue to hire in "lower-cost areas."Intel: 343 jobsIntel CEO Pat Gelsinger.Pool Eric Lalmand/Getty ImagesIntel notified California officials per WARN Act requirements it plans to layoff 343 workers from its Folsom campus, local outlets reported on January 30. "These are difficult decisions, and we are committed to treating impacted employees with dignity and respect," Intel said in a statement to KCRA 3, noting that the cost-cutting comes as the company is faces a "challenging macro-economic environment." On February 1, the company announced CEO Pat Gelsinger will take a 25% pay cut, while other members of the executive team will take salary reductions in amounts ranging from 5% to 15%.  FedEx: more than 10% of top managersFedEx workers in New York City on March 16, 2021.Alexi Rosenfeld/Getty ImagesFedEx informed staffers on February 1 it plans to slash more than 10% of top managers in an effort to reduce costs.  "This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions," CEO Raj Subramaniam wrote in a letter to staff, which was shared with Insider's Emma Cosgrove. While the exact number of employees impacted was not specified, a FedEx spokesperson told Insider that since June 2022 the company has reduced its workforce by more than 12,000 staffers through "headcount management initiatives." "We will continue responsible headcount management throughout our transformation," the spokesperson said. PayPal: 7% of total workforceDan Schulman, president and CEO of PayPal announced that the company would be cutting 7% of its total workforce on January 31.PaypalPayPal announced on January 31 that it plans to cut 2,000 workers or approximately 7% of the company's total workforce over the coming weeks. In a statement announcing the layoffs on PayPal's website, CEO and president Dan Schulman cited the "challenging macro-economic environment." He added, "While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do."HubSpot: 7% of staffYamini Rangan is HubSpot's CEO.Matt Winkelmeyer/ Getty ImagesHubSpot's CEO Yamini Rangan announced that the company would lay off 500 workers, according to an email seen by Insider. "We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected. The year was challenging due to a perfect storm of inflation, volatile foreign exchange, tighter customer budgets, and longer decision making cycles," Rangan wrote to employees. IBM: 1.5% of staffIBM's CEO Arvind KrishnaBrian Ach / Stringer / Via GettyIBM plans would cut 1.5% of its staff, roughly 3,900 workers. The layoffs were first reported by Bloomberg but confirmed by Insider.The company said the cuts would cost IBM about $300 million and is related entirely to businesses the company has spun off. Bloomberg reports that CFO James Kavanaugh said the company is still hiring in "higher-growth areas." Hasbro: 15% of workersA Jenga game by Hasbro Gaming.Thomson ReutersHasbro reportedly plans to cut 1,000 workers after warning that the 2022 holiday season was weaker than expected, according to the toy and game company. The company said the layoffs come as it seeks to save between $250 million to $300 million per year by the end of 2025. "While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses," Chris Cocks, Hasbro's CEO said. Dow: 2,000 global employeesThe Dow Chemical logo is shown on a building in downtown Midland, home of the Dow Chemical Company corporate headquarters, December 10th, 2015 in Midland, MichiganBill Pugliano/Getty ImagesDow Inc. announced on January 26 that it will lay off 2,000 global employees, a move that indicates mass layoffs are spreading beyond just the technology sector, the Wall Street Journal reported. It's part of a $1 billion cost-cutting effort intended to help amid "challenging energy markets," Dow CEO Jim Fitterling said in a press release. The chemical company also  will shut down select assets, mostly in Europe, per the release."We are taking these actions to further optimize our cost structure and prioritize business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe," Fittlering said.   SAP: Up to 3,000 positionsSAP CEO Christian KleinULI DECK/POOL/AFP via Getty ImagesSoftware company SAP said on January 26 it will slash up to 3,000 jobs globally in response to a profit slump, with many of the cuts coming outside of its headquarters in Berlin, the Wall Street Journal reported.  The layoffs will impact an estimated 2.5% of the company's workforce and are part of a cost-cutting initiative aiming at reaching an annual savings of $382 million in 2024, according to the Journal. "The purpose is to further focus on strategic growth areas," said Luka Mucic, SAP's chief financial officer, per the Journal.   Spotify: 6% of the workforceDaniel Ek, Spotify cofounder and CEOGreg Sandoval/Business InsiderIn a memo to Spotify employees, CEO Daniel Ek said the company would cut 6% of its staff, about 600 people. "While we have made great progress in improving speed in the last few years, we haven't focused as much on improving efficiency. We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization," he wrote. As part of the changes, Dawn Ostroff, the company's chief content and advertising officer, who spent more than $1 billion signing exclusive podcast deals with Joe Rogan, the Obamas, and Prince Harry and Meghan Markle, has departed. 3M: 2,500 jobs cut3M3M, which makes Post-It notes, Scotch tape, and N95 masks, said it plans to cut 2,500 manufacturing jobs worldwide. CEO Mike Roman called it "a necessary decision to align with adjusted production volumes." "We expect macroeconomic challenges to persist in 2023. Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders," he said in a press release. Google: around 12,000 employeesBrandon Wade/ReutersSundar Pichai, CEO of Google parent company Alphabet, informed staffers on January 20 that the company will lay off 12,000 employees, or 6% of its global workforce. In a memo sent to employees and obtained by Insider, Pichai said the layoffs will "cut across Alphabet, product areas, functions, levels and regions" and were decided upon after a "rigorous review." Pichai said the company will hold a townhall meeting to further discuss the cuts, adding he took "full responsibility for the decisions that led us here" "Over the past two years we've seen periods of dramatic growth," Pichai wrote in the email. "To match and fuel that growth, we hired for a different economic reality than the one we face today." Vox: 7% of staffThe layoffs were reportedly announced in a memo from CEO Jim Bankoff.Vox MediaVox Media, the parent company of publications like Vox, The Verge, New York magazine, and Vulture, is laying off roughly 133 people, or 7% of its staff, according to a report by Axios. The cuts come just a few months after the media company laid off 39 roles in July. The decision was reportedly announced in a note to staff from CEO Jim Bankoff, who wrote that while the company is "not expecting further layoffs at this time, we will continue to assess our outlook, keep a tight control on expenses and consider implementing other cost savings measures as needed," according to Axios.Vox Media's layoffs come at a time when advertisers are tightening their belts in anticipation of an economic slowdown, taking a toll on the media industry. Capital One: more than 1,100 tech workersBrian Ach/AP ImagesCapital One slashed 1,100 technology positions on January 18, a company spokesperson told Insider. The cuts impacted workers in the "Agile job family," a department which was eliminated and its responsibilities integrated into "existing engineering and product manager roles," per the spokesperson. "Decisions that affect our associates, especially those that involve role eliminations, are incredibly difficult," the Capital One spokesperson said in the statement. "This announcement is not a reflection on these individuals or the work they have driven on behalf of our technology organization," the spokesperson continued. "Their contributions have been critical to maturing our software delivery model and our overall tech transformation."The eliminations came after the bank had invested heavily in tech efforts in recent years, including launching a new software business focused on cloud computing in June 2022. "This decision was made solely to meet the evolving skills and process enhancements needed to deliver on the next phase of our tech transformation," the spokesperson said.  WeWork: About 300 employeesReutersWeWork announced on January 19 it will cut about 300 positions as it scales back on coworking spaces in low-performing regions, Reuters reported. The layoffs come after the company said in November 2022 it planned to exit 40 locations in the US as part of a larger cost-cutting effort. The company announced the cuts in a press release listing its fourth-quarter earnings call date, stating only the reductions are "in connection with its portfolio optimization and in continuing to streamline operations."  Wayfair: more than 1,000 employeesPavlo Gonchar/SOPA Images/LightRocket via Getty ImagesWayfair is expected to lay off more than 1,000 employees, about 5% of its workforce, in the coming weeks in response to slumping sales, the Wall Street Journal reported on January 19.The cuts mark the second round of layoffs in six months for the online furniture and home goods company, after it nixed 900 staffers in August 2022. Though the company experienced significant growth during the pandemic-driven home improvement boom, sales began to stagnate as social distancing policies loosened and Americans began returning to offices."We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth. This year, that growth has not materialized as we had anticipated," Wayfair CEO Niraj Shah wrote in a letter to employees announcing the August 2022 layoffs, per CNN. In its most recent quarter, the Wayfair reported that net revenue decreased by $281 million, down 9% from the same period the year prior.  Microsoft: 10,000 workersMicrosoft CEO Satya NadellaStephen Brashear/Getty ImagesMicrosoft announced on January 18 that it planned to reduce its workforce by 10,000 jobs by the end of the third quarter of this year. CEO Satya Nadella attributed the layoffs to customers cutting back in anticipation of a recession. However, Nadella also told workers that the company still plans to grow in some areas, despite the firings, writing that the company will "continue to hire in key strategic areas." Microsoft's layoff announcement comes as the tech giant is reportedly in talks to invest $10 billion in OpenAI, which created the AI chatbot ChatGPT. On February 13, the company laid off staff at LinkedIn—which it acquired in 2016— according to The Information. The cuts were in the recruiting department, though the total number laid off is not immediately clear, The Information reported.Crypto.com: 20% of staffCrypto.com CEO Kris MarszalekCrypto.comCrypto.com announced on January 13 that it would let go of a fifth of its workforce amid a sagging crypto market and fallout from FTX's collapse. This is the second major round of firings for Crypto.com, which also had layoffs in July. "The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It's for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success," CEO Kris Marszalek wrote in a memo to employees. BlackRock: up to 3% of global workforceBlackRock CEO Larry FinkSpencer Platt/Getty ImagesBlackRock is cutting up to 500 roles in its first round of firings since 2019. Staff members were notified on January 11 about whether they were laid off. "Taking a targeted and disciplined approach to how we shape our teams, we will adapt our workforce to align even more closely with our strategic priorities and create opportunities for the immense talent inside the firm to develop and prosper," CEO Larry Fink and President Rob Kapito wrote in a memo to employees. Goldman Sachs: an estimated 6.5% of its global workforceGoldman Sachs is laying off an expected 3,200 employees.Photo by Michael M. Santiago/Getty ImagesGoldman Sachs began laying off employees on Jan. 11, with cuts expected to impact an estimated 6.5% of the company's global workforce — or roughly 3,200 staffers — a source told Insider. The company previously slashed roles on its media and tech teams in September 2022, and it was expected to issue further reductions in the first half of January. The cost-cutting efforts from the investment banking giant mirror reductions from competitors including Morgan Stanley and Citi, which also laid off employees in 2022. "We continue to see headwinds on our expense lines, particularly in the near term," Goldman Sachs CEO David Solomon said at a conference in December. "We've set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set."   BNY Mellon: 1,500 jobsBNY Mellon CEO Robin VinceBNY MellonBNY Mellon is planning to cut approximately 3% of its workforce, or 1,500 jobs, according to the Wall Street Journal, which cited people familiar with the matter. The cuts will be primarily aimed at talent management roles, according to the report. BNY Mellon will reportedly plan to invest more in junior staff. Verily (part of Alphabet): reportedly 15% of workersAlphabet CEO Sundar PichaiJerod Harris/Getty ImagesVerily, which is Alphabet's healthcare unit, is laying off more than 200 employees, according to an email seen by the Wall Street Journal. The Journal reports that the company will also scale down the number of projects it works on in an effort to cut costs."We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model," Verily's CEO, Stephen Gillet, wrote in the email, according to the Journal.This is the first significant layoff done by Google's parent company, which had so far avoided the massive waves of job cuts done by other big tech giants like Amazon and Meta. DirecTV: 10% of management staffDirecTV.Karen Bleier/AFP/Getty ImagesDirecTV employees were told in the first week of January that the company would lay off several hundred workers in management roles.The satellite TV business has faced slowing revenues as more people choose to cut the cord and pay for streaming services over cable TV. "The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming. We're adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements," a spokesperson for DirecTV told Insider. Coinbase: 950 workersCEO Brian Armstrong cited the downward trend in cryptocurrency prices and the broader economy as reasons for the layoffs.Patrick Fallon/Getty ImagesCoinbase announced on Tuesday, Jan. 10, that would lay off another 20% of its staff. The cuts came after the crypto company laid off over 1,000 employees in July. In a memo to employees, CEO Brian Armstrong said, "in hindsight, we could have cut further at that time," referencing the layoffs in July. Armstrong partially attributed the company's weakness to the "fallout from unscrupulous actors in the industry," likely referencing the alleged fraud that took place at FTX late last year under then-CEO Sam Bankman-Fried. Armstrong predicted "there could still be further contagion" from FTX in the crypto markets but assured remaining employees that Coinbase is well capitalized. Amazon: 18,000 employeesAmazon CEO Andy Jassy initially announced the company's latest round of layoffs in November.AmazonAmazon is in the midst of the most significant round of layoffs in the company's history. In a memo to employees, CEO Andy Jassy said the company would cut more than 18,000 workers in total — far more than what was initially expected based on reporting by the New York Times. Jassy cited "the uncertain economy" and rapid hiring as reasons for the layoffs. While most of Amazon's 1.5 million staff have warehouse jobs, the layoffs are concentrated in Amazon's corporate groups. Amazon's layoffs began late last year, though the Wall Street Journal reports cuts will continue through the first few weeks of 2023.Amazon's 18,000 jobs cuts are the largest of any major tech company amid the wave of recent layoffs.  Salesforce: 10% of its staffSalesforce said in the first month of 2023 that it would enact big job cuts.Noam Galai/Getty ImagesSalesforce co-CEO Marc Benioff announced on Jan. 4 that the software company plans to layoff 10% of its workforce — an estimated 7,000 employees — and close select offices as part of a restructuring and cost-cutting plan. "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff wrote in an email to staff. "With this in mind, we've made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks."He continued: "As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that."Everlane: 17% of corporate employeesEverlane founder and executive chair Michael Preysman.Lars Ronbog/Getty Images for Copenhagen Fashion SummitEverlane is slashing 17% of its 175-person corporate workforce, and 3% of its retail staff."We know there will be some bumpiness over the next few weeks as we navigate a lot of change at once. We ask for your patience as we do right by our departing team members," CEO Andrea O'Donnell wrote to employees, according to an internal memo seen by Insider. In a statement to Insider, a company spokesperson said the decision was intended to "improve profitability in 2023 and continue our efforts to help leave the fashion industry cleaner than we found it."The e-commerce clothing company previously laid off nearly 300 workers, mostly in retail in March 2020 amid the outbreak of the Covid-19 pandemic.Vimeo: 11% of its workforceAnjali Sud, CEO of Vimeo, speaks during the company's direct listing on Nasdaq, Tuesday, May 25, 2021, in New York.AP Photo/Mark LennihanVimeo CEO Anjali Sud told employees on Jan. 4 that the company would layoff 11% of its staff, the video platform's second major round of layoffs in less than a year, after cutting 6% of employees in July"This was a very hard decision that impacts each of us deeply," Sud wrote in an email to staff. "It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment."A spokesperson told Insider reduction is intended to assist with ongoing economic concerns and improve the company's balance sheet. Compass: size of layoffs not immediately disclosedCompass is letting go of more employees after two rounds of layoffs in the past eight months.CompassCompass CEO Robert Reffkin told staffers on Jan. 5 it would conduct more layoffs, following two previous rounds in the past eight months, as the brokerage continues to struggle with significant financial losses. "We've been focused over the last year on controlling our costs," Reffkin wrote in an email to employees. "As part of that work, today we reduced the size of some of our employee teams. While decisions like these are always hard, they are prudent and allow us to continue to build a long-term, successful business for all of you."While the size of the layoffs was not immediately disclosed, the brokerage let go of 450 corporate employees in June 2022, followed by an additional 750 people from its technology team in October 2022.   Stitch Fix: 20% of salaried jobsStitch Fix is laying off salaried employees.SOPA ImagesStitch Fix announced on Jan. 5 that it plans to slash 20% of its salaried workforce, the Wall Street Journal reported.The cuts come in tandem with the announcement that CEO Elizabeth Spaulding is stepping down, after less than 18 months at the helm of the struggling retail company."First as president and then as CEO, it has been a privilege to lead in an unprecedented time, and to chart the course for the future with the Stitch Fix team," Spaulding said in a statement. "It is now time for a new leader to help support the next phase."Stitch Fix founder Katrina Lake — who formerly served as chief executive and sits on the board of directors — will become interim CEO, the company said in a press release. Read the original article on Business Insider.....»»

Zomedica Corp. (AMEX:ZOM) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good afternoon, and welcome to Zomedica’s Fiscal Year 2022 Earnings Release Call. As a reminder, this call is being recorded and all participants are in a listen-only mode. The call will be open for questions and answers following the presentation. On today’s call […] Zomedica Corp. (AMEX:ZOM) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good afternoon, and welcome to Zomedica’s Fiscal Year 2022 Earnings Release Call. As a reminder, this call is being recorded and all participants are in a listen-only mode. The call will be open for questions and answers following the presentation. On today’s call is Zomedica’s CEO, Larry Heaton; and CFO, Ann Cotter. Before we begin, the company would like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Zomedica cautions that these are forward-looking statements and are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated including risks described in the company’s filings with the SEC. Any forward-looking statements made on this conference call speak only as of today’s date, Wednesday, March 15, 2023. And the company does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today. I will now pass the call over to Zomedica’s Chief Executive Officer, Larry Heaton. Please go ahead. Larry Heaton: Thank you. I’d like to start by thanking our shareholders for their support, and wishing our prospective investors and analysts and others a good afternoon, and welcome you to the Zomedica fiscal year 2022 earnings release call. On this call, I’ll be providing an update on the business, followed by Ann Cotter, our Chief Financial Officer, who will review our financial results. After our prepared remarks, we’ll open the line to your questions. In a bit, Zomedica will be releasing its financial results for the year ended December 31, 2022. As we reflect on these results, we’re very pleased with the progress the team has made on multiple fronts as we continue our transformation into a market leader in point-of-care diagnostics and therapeutic products for companion animals. At Zomedica, we’re bringing products to veterinarians to help them do the things they really love to do, improve the quality of care for the pets and the satisfaction of the pet parents, and to help them do the things that they really need to do, improve workflow, cash flow and profitability. 2022 was another transformational year for Zomedica through acquisitions of products that meet the standard, along with significant improvements in infrastructure, manufacturing capacity and commercial capabilities. In 2022, we significantly expanded our product portfolio to include five high-value technology platforms, expanded our sales and marketing organization and capabilities, built a comprehensive internal support infrastructure, grew our revenues from zero in 2020 to $4 million in 2021 to almost $19 million in 2022, and established a pipeline of several new product launches for 2023. We were pleased with our progress with our TRUFORMA platform during the year. This platform is a great example of the razor and blade model and that we provide the instruments at no cost to the customer in return for a lifetime and enduring revenue stream from high-value diagnostic tests. To build the value of this platform, we expand the installed base of instruments and expand the menu by introducing new assays. During the year, we launched two new TRUFORMA assays for ACTH and Free T4, both providing the only assay of their type available at the point-of-care. In January of this year, we entered new license agreements with our TRUFORMA development partner, giving us the opportunity to develop and manufacture assays and instruments ourselves. We are planning to continue our investment in the development of additional assays, which we believe will increase the utility of the TRUFORMA for our customers over time and generate higher revenue per installed instrument. For 2023, these include planned assays for non-infectious gastrointestinal disease and our first assays for horses both of which we expect to launch this year. Our PulseVet platform continues to perform strongly. While historically used in the treatment of horses, the recent introduction of the X-Trode hand piece, which enables use with small animals without sedation, is now being marketed to small animal veterinarians. Over the last decade, aquiline patients have benefited significantly from this clinically proven non-invasive therapy. Now small animals could be readily treated with Shock Wave Therapy for over 20 clinical applications, backed by peer-reviewed clinical literature and providing alternatives to costly medication therapy that carries potentially harmful side effects or expensive surgeries. We’ve been pleased with the uptake of this technology, which is covered by most pet insurance policies by small animal veterinarians and pet parents alike. In fact, small animal device sales grew 405% in 2022 from 21 devices in 2021 to 106 devices in 2022. We believe PulseVet set sales will remain strong into 2023, especially given the efforts around development of the small animal market. Our Assisi LOOP of products, which joined Zomedica’s portfolio of offerings in the third quarter proved to be a solid contributor to our 2022 results with roughly $2.1 million in sales for the year. Like our PulseVet products, the Assisi LOOP products, which generate targeted pulsed electromagnetic wave therapy to reduce inflammation and pain, they provided non-invasive and non-pharmacological approach to pain relief for pets. Also like PulseVet, our Assisi products showed year-over-year growth, both as part of Zomedica as well as when they were a standalone company. The difference between the two is that the Assisi products are positioned to be used at home by pet parents, including them in the treatment pathway for their pets. So the vet can treat the patient in the clinic with PulseVet Shock Wave therapy and then send the healing home with the Assisi LOOP products. As we leverage our communication and marketing networks, we expect Assisi recognition and brand awareness to increase resulting in expected growth in 2023. Although not part of our 2022 results, we do expect additional growth in revenue in 2023 from sales of the VetGuardian zero-touch wireless vital science monitoring system, which launched in early January, as well as our new TRUVIEW digital microscopy platform, featuring the first automatic slide preparation system available anywhere to improve both workflow and image quality, which is expected to launch in the second quarter. Overall, we’re pleased with our progress in 2022 and excited to continue building on this traction and growth trajectory. In addition to putting in place measures to grow our top line results, we have also put forth considerable focus and effort into developing and enhancing our internal processes, including hiring additional people, with significant increases in R&D, business development and sales and marketing. Included in these hires are industry experts, scientists, veterinarians and other personnel with extensive experience and knowledge in the companion animal field and investing over $1 million to develop our manufacturing capability and capacity through our new global manufacturing and distribution center in Roswell, Georgia. This facility, which we moved into in August of 2022, expands our manufacturing and distribution capabilities, enabling us to meet growing commercial global demand and support future growth and new product offerings. With a healthy cash position and projected sales growth at 2023, we feel we are setting ourselves on a strategic pathway to create and enhance shareholder value. We’re pleased with our progress along the pathway to cash flow breakeven and profitability, which we consider to be significant milestones for growth and shareholder value. We believe these require a combination of substantial growing revenue and efficient manufacturing producing substantial margins, while at the same time, investing in operating expense to enable both growth from organic sources and drove by acquisition. We have invested in an experienced leadership and growing commercial team and a robust marketing capability, along with expanding our manufacturing capacity. Now, we have the opportunity to leverage these investments by launching and growing new products and acquiring new ones as well, to generate increased revenue to move us further on the path to profitability. In closing, we are optimistic about Zomedica’s future. And with that, I’ll turn the call over to Anne to take us through Zomedica’s 2022 fiscal performance and provide additional thoughts on what to expect in fiscal 2023. Ann Cotter: Thank you, Larry, and good afternoon, everyone. During this portion of the call, I will be focusing on selected aspects of our income statement, cash flow statement and balance sheet. While I will be providing brief explanations on various drivers, much of this information is covered and broader depth within our recently filed 10-K. I encourage you to review this document for additional detail and commentary. Revenue for the fourth quarter of 2022 was a very healthy $6.2 million, an increase of $2.1 million or 51% from the fourth quarter of 2021. The primarily driven by an increase in PulseVet sales and the inclusion of our recently acquired Assisi products, we saw an upward trend of increasing revenue in 2022, going from $3.7 million in sales in Q1, $4.2 million in sales in Q2, $4.8 million in sales in Q3, and $6.2 million in sales in Q4. Revenue for the year ended 2022 was $18.9 million, an increase of $14.8 million or 361% from the year ended 2021. Again, primarily driven by a full year’s worth of PulseVet sales and the inclusion of the recently acquired Assisi products. When considering stand-alone sales or sales exit we had owned Assisi and PulseVet from January 1, 2021, our sales were up 25%. Given the continued uptick in sales of our current offerings, that is TRUFORMA, PulseVet and Assisi as well as our expected launch of VetGuardian and Revo related products. We expect revenue to continue to grow in 2023. Gross profit margin for the year ended 2022 was $13.7 million or 72% compared to $3.1 million or 74% for the year ended 2021, an increase of $10.6 million. Although, our margins continue to be extremely healthy, the drop in margin compared to 2021 relates to a changing mix of product sales, including Assisi, TRUFORMA and PulseVet small animal devices and trod. In general, we believe gross margins will remain relatively unchanged in percentage terms due to a variety of factors. Research and development expense for the year ended 2022 was $2.6 million, an increase of $0.9 million or 53% from the year ended 2021, primarily driven by an increase in contracted expenses for research fees and trials, as we continue to develop and test our next-generation TRUFORMA assays. Our new license agreements with our TRUFORMA development partner gives us the ability to expand our assay development program, which may result in increased total expenditures in the short term, although with a lower cost of development on a per-assay basis. Selling, general and administrative expenses for the year ended 2022 were $33 million, an increase of $10.2 million or 45% from the year ended 2021, primarily driven by salaries and noncash stock compensation expense associated with increased hiring campaign, the inclusion of PulseVet, Revo Squared and Assisi headcount, acquisition-related intangible amortization, increase in office expenses, travel and trade show attendance associated with lifting COVID restrictions and the marketing of our new TRUFORMA assays and our new product lines. Our net loss for the year ended 2022 was $17 million, a decrease of $1.4 million or 8% from the year ended 2021. The net loss in each period was attributed to the matters described earlier. We expect to continue to record net losses in the future periods until time — until such time as we have sufficient revenue from product sales to offset our operating expenses. Zomedica had cash, cash equivalents and available-for-sale securities of approximately $156 million, as of the year ended 2022, a decrease of $39 million or 20% from the year ended 2021, primarily driven by cash used in operating and investing activities, as I will discuss. Net cash and operating activities for the year ended 2022 was $11.7 million. The reduction — the reduction in operating expense is a result of the increased revenue we recognized and a reduction of overall operating expenses compared to the prior year. Net cash used in investing activities for the year ended 2022 was $155.9 million, an increase of $84 million or 117% from the prior year 2021, primarily driven by significant investments in available-for-sale securities, our acquisitions of Assisi, Revo Squared, and other leasehold improvements and expenditures to improve our e-commerce internal sales and accounting programs. Net cash provided by financing activities for the year ended 2022 was zero. This is a 100% decrease from 2021 of $219.2 million, as we did not complete a public offering of our shares in 2022. Our balance sheet continued to show strong ratios in 2022. Our working capital is strong at $115.7 million. Our current and quick ratios are strong at approximately 16% showing a high amount of liquidity, our debt-to-asset ratio is approximately 4%, showing a high level of solvency. Assets remained flat at $280 million as cash used for Revo and Assisi purchases were offset by related increases in goodwill and intangibles, as well as cash used to purchase PP&E associated with our manufacturing center upgrade. Liabilities increased primarily due to the earnout liability recorded from the acquisition of Revo and larger accruals in AP for inventory and other operating expenses, all of which are growth oriented. Due to our projected increase in sales and decrease in operating cash needs and a very strong balance sheet, we believe Zomedica has a strong future, and we are optimistic about the future of the company. With that, I’ll turn the call back over to Larry. Lucky Business/Shutterstock.com Larry Heaton: Thank you, Ann. And before we move to Q&A, I’d like to take this opportunity to thank you, Ann, not only for this report, but for your many years of tireless service to Zomedica. Ann has decided to retire from Zomedica and we have worked out a transition plan, whereby she will continue with the company for the next 30 days to ensure a smooth transition to a new CFO and is planning on continuing to consult with Zomedica afterwards. We’ll provide more information on the timing and transition over the next few days. But for now, on behalf of myself, our colleagues and the Board of Directors, I’d like to extend our deepest gratitude to Ann for her considerable contributions to Zomedica over the years, and thanks in advance for her assistance going forward. Ann Cotter: Thank you. Larry Heaton: And with that, I’ll turn the call over to the operator for Q&A. Operator: Thank you. At this time, we’ll be conducting a question-and-answer session. There are no audio questions at this time. Larry Heaton: Okay. So can you turn this over to our IR team now, so that we could get questions off the web? Paul Kuntz: Yes. This is Paul Kuntz with the IR team. We have a lot of questions on the webcast of 400-some people on here, so we’ll just jump into some of these right now. Larry, one of our first questions was, does the recent bank crisis have any impact on Zomedica? Larry Heaton: In a word, no. We have had no cash on deposit with either Silicon Valley Bank or with Signature Bank. And we also have pulled our major vendors to see whether they have any exposure and the answer has been no. And this is, of course, notwithstanding the fact that the government has also stepped in to address the issue. But we have — we see no impact on Zomedica from it. Paul Kuntz: Thank you, Larry. And we’ve had quite a few questions on this subject. Can you talk a little bit about when the company — the path to profitability, when the company will become profitable? Larry Heaton: Sure. So, we’re really striving to reach two important milestones: cash flow breakeven and profitability. And to get an idea of what it takes to get the cash flow positive, let’s dig into a couple of metrics. In 2022, per GAAP, we lost around $17 million, with operating expenses of $36 million. But of the OpEx, $12 million was booked for non-cash expenses, depreciation and amortization and non-cash stock comp for the many employees that we’ve hired over the last 18 months. So to get to cash flow breakeven, if everything else was equal year-over-year, we would need to generate an additional $5 million in cash. At 70% gross margins, that’s another $8 million in sales or about 42% up from 2022. Of course, sales above that or reduced expenses would push us past cash flow positive and further on the path to profitability. Now D&A and non-cash stock comp decrease over time. But if they didn’t, then we would need to generate an additional $17 million in sales to get to profitability, which explains why we are heavily focused on investing in revenue growth, both organic and through M&A. So given our cash position and track record of acquiring, integrating and growing products through M&A, you can be sure that we’re focused in this area so that we can accelerate reaching profitability. So, near-term goal is cash flow breakeven and cash flow positive, and then a little beyond that, trailing that will be our quest for profitability. Paul Kuntz: Thank you, Larry. And our next question, with the recent uptake of AI in the world, is there anything in the works to maybe acquire AI products or partner up with an AI company to take advantage of technology in the pet industry? Larry Heaton: I’m going to ask Greg Blair, our Vice President of Business Development, who’s working in this area to comment. Greg Blair: Thank you, Larry. AI is definitely gaining awareness and prominence across industries and the animal health industry is no exception. Through our My Zomedica platform, we do indeed collects data of varying types for most of our product lines. As we launch new product lines, including the TRUVIEW platform, we do see a role for AI going forward with our product lines. And we would anticipate that, that will play a part in managing the data that we’re collecting and improving the diagnostic capability of the products that we offer to our customers. Paul Kuntz: Thank you. And our next question is stock manipulation and naked short selling something you would consider addressing at all? And — or would you solely focus on the growth prospects of the company and believe the stock price will eventually follow. Larry Heaton: Right. So the easy answer to that is that we’re focused on building the value for our shareholders by building the value of the company, by generating revenue at high margins and ultimately getting to cash flow positive and profitability. A little more complex is the fact that, we’ve seen other companies fall victim to short selling. And we’ve seen other companies take action in this regard by engaging law firms and so on and so forth. As we look at it, we note that our stock price is relatively low at, I think, around $0.25 today. I haven’t checked it in the last hour or so, but $0.24, $0.25 and our market cap then is around $250 million, and we have $156 million in cash, and we’ve had significantly rising revenues at high margins. So it just doesn’t make a lot of sense to us that people would regard us as a significant target for short selling, because they’re upside is significantly limited while their downside is, I mean, it’s my boggling what could happen. And in fact, anyone that’s followed the stock over the last few years saw it really take a flyer a couple of years ago. So, my goodness, if you were shorted at that point, you would have not been really pleased. So I guess what I’m saying is that we continue to keep a look, keep a watch on it. We think that we’re probably more susceptible to swing traders, people that see that, for whatever reason, and I think it’s largely a result of the lack of institutional ownership of the stock, they see that it kind of travels pretty freely between around 23, 24 and 27 and trade those swings, which ends all legitimate and anyone that’s buying our stock, we’re a fan. On the other hand, we would encourage people to consider holding it for the long-term, because we think for the mid to long-term we have a great opportunity to increase shareholder value as reflected in share price. Paul Kuntz: Very good. Thank you, Larry. And our next question, how much is your customer acquisition cost? And do you see this number becoming lower in the future? Larry Heaton: So, easy to answer the second part. The first part is a little more difficult. As you know, we currently are commercializing three product lines. Actually, it’s 2023. We’re now selling four different products. We have another one that we’re launching next quarter. So there’s not an easy answer to customer acquisition costs on the whole. For example, our PulseVet products are sold primarily by direct sales representatives, while our Assisi products are sold through distribution and online. So it varies by product line. What I would say, however, is that the second part of the question is, I see it going down for sure. In fact, that’s been our strategy, right? When 18 months ago, we had only the single product and revenues were nominal, and we began to build the infrastructure and the sales and marketing engine that would expand to really any channel through which an animal health customer would like to acquire their products. And we did that in anticipation of first growing revenues with the products that we had, but also being able to plug additional products into those sales channels without any additional expense associated with them. And so hard to answer the first question with any sort of a broad answer that is going to vary significantly between the products, but easy to answer that we expect considerable operating leverage from our commercial organization as we add new products. Paul Kuntz: Thank you, Larry. And our next question, can you talk a little bit about the outlook for the coming year? Larry Heaton: Sure. We — I think as we have spoken in our prepared remarks, we expect continued growth, for sure, both from the organic growth of PulseVet, Assisi and TRUFORMA products, but also the introduction in January of the VetGuardian and next quarter of the TRUVIEW. Having said that, though, I do want to say that we do expect sales to be sequentially down in the first quarter of this year, due to the seasonality of PulseVet capital purchases, which are always highest in the fourth quarter and lowest in the following or first quarter, due to year-end tax rates for purchasing capital. We’re not providing revenue guidance for the full year as we prefer to wait to do that until after we’ve gained some experience with our newest products, the VetGuardian system, which was launched in January, which we’re pleased with, and the TRUVIEW digital microscopy platform, which we expect to launch next quarter. So we expect to see growth in the year, driven by organic growth as well as the new products. Obviously, we also will continue a robust M&A set of activities, but obviously can’t forecast that just now. So we should expect revenue down sequentially in Q1 and then up at each of the subsequent quarters. Paul Kuntz: Great. Thank you, Larry. And our next question, when will we do an official launch of the Revo Squared products, including the MicroView and there’s a second part, any prospect of releasing the cancer assay in late 2023? Larry Heaton: Okay. So two very different questions there, so let’s start with the Revo Squared. So, Revo Squared brought to us two products, the MicroView, which is what the product was called when we acquired it, which we’ve now transformed into the TRUVIEW System and we expect to launch that next quarter. In fact, we’re beginning to build those systems now in our facility in Georgia. So we expect to launch that next quarter. We also, while we haven’t made a big to do of it. We continue to sell the Revo Ultrasound System, which they call SonoView. It’s not one of our major products. There are plenty of competitors out in the animal health space. The thing that differentiates the SonoView is the fact that our staff can guide individual users in the vet clinic, as they perform Ultrasound, they can train them, they can coach them, they can proctor those Ultrasound procedures. So we have sold some systems. And as we look forward, we expect that we may expand that, but for now, we’re just sort of doing business as usual in Revo. On the other hand, the microscope, the TRUVIEW is something that we’re really looking forward to launching next quarter. The second part of that question was to do with the cancer test. So as you may, if you followed Zomedica for a while, you may know that, years ago they had a program, a partnership with a company called Celsee to develop a test for detection of cancer in dogs. Celsee was sold to a company called Bio-Rad and Bio-Rad has focused on other projects. They haven’t — they do not have an active program now in this Cancer Detection area. We note that we received issuance of a patent in 2022 that relates to the technology. But as of now, we do not have an active program underway to develop that product. And we would need a new partner if we decided to do that. We also note that there are a couple of other companies that are out in the market now, which wasn’t the case several years ago, that are already providing this product into the marketplace. So we have no immediate plans. And please don’t read into that that we, — well, it’s not immediate, but it’s downstream. We don’t have any plans at this point. Paul Kuntz: Great. Thank you, Larry. And actually the next two are related in this case. One of the questions is, it has been previously mentioned, considering a reverse split when markets and core business momentum is in the company’s favor. Is that still the plan, or would share buybacks also be in consideration with increasing revenue and condition of the business. And a related question is, is there a chance that the company could be de-listed as it’s been under $1 more than a year? Larry Heaton: All right. So I’ll take the last part of that first, because it’s pretty easy. There are some exchanges that require the stock price to be at $1 for or not below $1 for a certain period of time. That does not apply to the New York Stock Exchange — American Exchange, which is where we’re listed. There — they — their expectation is that your stock will remain above $0.20 per share and not go below $0.20 per share for some period of time. So, we’re currently trading above $0.20 a share. We did dip below that toward the end of last year into the first few days of this year. On the other hand, we did not receive any official notice of delisting or whatnot. So, it’s all up to the market. That’s who prices our shares. But as long as we stay above $0.20, we’ll be good. And it’s good that that’s the case because many times companies that are struggling with one or other aspect of their activities finds themselves in a position where they’re trying to do a reverse stock split really from a position of weakness. They need to do it to get the stock price above, but the reverse stock split in and of itself doesn’t make a company that’s been struggling all of a sudden not struggling. And so off times, those reverse stock splits are not — they don’t have great outcomes. In our case, we do believe that at some point, a stock — a reverse stock split would make sense, not because we’re in a position of weakness or we’re struggling, but rather because it would enable us to fairly quickly enable certain institutional investors that may otherwise have an interest in acquiring Zomedica stock, but can’t do it because our stock is not above the threshold that their charters require of $1 in some cases $2, in some cases, heck, I’ve heard of some of that you can’t invest in the stock that’s less than $5. So, for us, we think that it would be desirable to have institutions be able to acquire stock in Zomedica, not at the expense of retail investors, not at the expense of our many shareholders, but rather as a complement because these institutions typically take a large positions and longer view. They hold it for a little bit longer, normally. And we think that that sort of foundation, not only will that reduce the actively traded float, but it may also dissuade short sellers or swing traders from viewing Zomedica as an attractive target. So, what I have said before and what I’ll say now is that I think that in the future, a reverse stock split would make sense for us, but it’s not something that we would do until we believe that our shareholders and other potential investors would view us as doing it from a position of strength. In other words, we get cash flow positive. We get much closer to or realize profitability. And at that point, I think people would understand we’re not — this isn’t the beginning of a downward cycle, but rather the beginning of an upward movement. With respect to a stock buyback, we continue to believe that the best use of our available capital is to fund organic growth and enable additional M&A activity. So, we have no near-term plans for a stock buyback. Paul Kuntz: Thank you, Larry. And I’m going to pass the call now back to the operator for — we have a few callers in the queue. And for the rest of our webcast participants that have entered questions, we will request a follow-up with everyone in the next 24 to 48 hours. But for now, we’re going to go back to the phone queue. Rob, please go ahead. See also 25 Biggest Colorado Companies and 25 Biggest New Jersey Companies. Q&A Session Follow Zomedica Corp. Follow Zomedica Corp. We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. Our first question is from Clint Wilkerson , a private investor. Please proceed with your question. Hey, you’re live. Clint, are you muted? Unidentified Analyst: I’m sorry. My question was the CAC, which he has already covered. Operator: Okay. If you have no more questions, I’ll go to the next question. Okay? Unidentified Analyst: Thank you. Operator: You’re welcome. Our next question comes from with Zomedica Corp. Please proceed with your question. Unidentified Analyst: Hello, everyone. I have two questions. Recently, in January, they forecasted ZOM to be around $6, what’s your intake on that? And would they reach there if — would ZOM reach that without a reverse split? What do you think you have the assets to get to that without a reverse split? Second question, with the anticipated recession, if we don’t see a soft landing, would that affect the price of ZOM, would it go lower under $0.20 maybe? That’s it. Thank you. Larry Heaton: Okay. Just one point of clarification, I think the caller was identified as being with Zomedica Corp, but that’s not the case. He is not a member of Zomedica. So having said that, I’m happy to answer the questions. So we are covered by an analyst and that analyst did put a price target of $6 per share on our stock. If you read the report, which as you can imagine, we’ve done quite extensively. That $6 — the valuation of $6 does not assume a stock split. In other words, what he’s saying is that 10 years out in 2030, the stock, the company will be generating revenues. If you read the report, you could see revenues are quite substantial. And he believes that at that point, the price — the stock price would justify a $6, the performance of the company would justify a $6 price target. Now having said that, in the report, and he clarified this in the subsequent issuance. He does say that he thinks that Zomedica will do a reverse stock split at some point. And when and if Zomedica does do a reverse stock split, that at that point, he would come back and re-up is price target. In other words, if we — well, I think you all know the mechanics of reverse stock split, so that would obviously affect the price. But the $6 itself assumes no split although qualitatively, he looks at things kind of the same way we do, I guess, which is that a stock — a reverse stock split would make sense for us. So that’s the first part. Second part, had to do with the recession. And I think if we don’t have a soft landing, if we have a worsening recession and things get worse, obviously, that’s going to affect all of us as individuals everywhere. On the other hand, from a business standpoint, it’s not going to affect so much what we do for our pets. So what we’ve seen is that the pet animal healthcare market in the pet market is super large billions and billions of dollars and continues to grow in spite of inflation and so on. And this particular market has proven to be fairly recession resistant, if not recession proof as recent surveys have shown, there’s plenty of things that people would give up before they would give up health care for their pet. I think probably if I’m spending a whole lot of money on a special fancy dog food, I might decide to go with a little less fancy, but I’m also not going to go to nothing. But when it comes to our products, our products are sold to veterinarians to use when pets are sick, to use with pets or injury......»»

Superior Group of Companies, Inc. (NASDAQ:SGC) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good afternoon, everyone, and welcome to Superior Group of Companies Fourth Quarter 2022 Conference Call. With us today are Michael Benstock, the company’s Chief Executive Officer, Mike Koempel, the Chief Financial Officer. As a reminder, this conference call is being […] Superior Group of Companies, Inc. (NASDAQ:SGC) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Good afternoon, everyone, and welcome to Superior Group of Companies Fourth Quarter 2022 Conference Call. With us today are Michael Benstock, the company’s Chief Executive Officer, Mike Koempel, the Chief Financial Officer. As a reminder, this conference call is being recorded. This call may contain forward-looking statements regarding the company’s plans, initiatives and strategies and the anticipated financial performance of the company, including, but not limited to sales and revenue. Such statements are based upon management’s current expectations, projections, estimates and assumptions. Words such as will, expect, believe, anticipate, think, outlook, hope and variations of such words and similar expressions identify such word forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. Such risks and uncertainties are further disclosed in the company’s periodic filings with the Securities and Exchange Commission, including, but not limited to, the company’s annual report on Form 10-K and the quarterly reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein, and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements contained herein except as required by law. With that, I will turn the floor over to Mr. Benstock. Please go ahead. Michael Benstock: Thank you for your introduction and welcome everyone to our 2022 earnings call. I’ll begin today by sharing the highlights of our Q4 results. I’ll then discuss the performance for each of our three business segments, providing an update on the macro environment and our strategy to grow the business moving forward. After that, I’ll turn it over to Mike to walk us through the financial results in greater detail, and to provide our outlook for 2023. Mike and I will then be available for Q&A. We finished 2022 with continued top line growth in the fourth quarter. Consolidated revenues were $149 million, up 5% over the prior-year quarter, driven by growth in both our branded products and contact center segments. As a result, we achieved full year sales of $579 million in 2022 which was near the top end of our annual guidance range. Our consolidated fourth quarter adjusted EBITDA was $3 million, down from $8 million in the fourth quarter last year, primarily due to an incremental inventory write down of $6 million in our healthcare apparel segment. Let’s take a closer look now at our quarterly results by segments beginning with healthcare apparel. Revenues came in at $26 million relative to $31 million, the prior year quarter reflecting of the ongoing stock conditions of the broader healthcare market, healthcare apparel EBITDA declined by $8 million compared to prior year quarter, primarily due to the aforementioned inventory write-down. Based on our lower purchasing levels implemented in mid ’22, and adjustments store inventory valuation, we expect to see better inventory equilibrium by the end of the year. Looking ahead, our strategy involves capturing new customers in new markets primarily through an emphasis, an increased emphasis I should say on digital growth, including the launch of our own direct-to-consumer website during the second quarter. While we recognize that will take time and investment to build consumer awareness and demand, the expansion of digital within our omnichannel approach will enable us to grow our healthcare, apparel business overall with leaner inventories and a revitalized customer facing business strategy including an emphasis on digital growth. We’re confident in the strong growth prospects for healthcare apparel and our own ability to capture market share and prove profitability over time. We provide the widest range of products in the market, with more than 2 million essential caregivers wearing our highly recognizable brands every day. Branded products, our largest segment generated revenues of $102 million during the fourth quarter, which was up 7% year-over-year benefiting from a full quarter’s contribution from the Sutter’s Mill acquisition made during the fourth quarter of 2021. As well as the guardian acquisition that was completed in May of 2022. Organic demand declined mid-single digits, due in part to subdued demand in the current uncertain economic environment. Fourth quarter EBITDA was $11 million, up from $6 million last year, driven by higher sales, improved gross margin rates and laughing a PPE inventory right down last year partially offset by an increase in SG&A from investments in talent and technology to support future growth. Branded products is an attractive market highly fragmented, with a total addressable size of $26 billion domestically. Our compelling strategy is to continue to grow our very modest market share of less than 2% by offering unique, customized and high-quality products. Our contact center segment had another strong quarter with revenues of $21 million up 22% over the fourth quarter of 2021. Fourth quarter EBITDA of $4 million was flat to last year as investments in SG&A related to talent, technology and infrastructure to support future growth offset, increase in sales and gross margin. On a full year basis, contact centers finished 2022 with strong annual top-line growth of 31%, achieving our highest EBITDA margin with an SGC of 22%. With our investments in infrastructure combined with a strong pipeline of prospective customers, we continue to see Contact Centers as an exciting and profitable growth business going forward. I’ll now turn the call over to Mike to take us through our financial results and outlook for 2023. Mike? Photographee.eu/Shutterstock.com Mike Koempel: Thank you, Michael, and thanks everyone for joining the call. I’ll start by walking through our financial results and then I’ll turn to our initial full-year outlook. During the fourth quarter, SGC generated consolidated revenues of $149 million, up 5% from $142 million the prior year quarter. Our gross margin was 30.2% for the quarter, down 80 basis points year-over-year due to the $6 million incremental inventory write down for Healthcare Apparel. Excluding the incremental charge, our gross margin would have been 34%. SG&A expense was 29.8% of sales which sequentially improved from 32% in the third quarter, but was higher than the fourth quarter of 2021 at 26.7%. The improved expense trend from third quarter benefited from an adjustment to employee expense accruals, as well as improved leverage on higher sales and the benefit of cost reductions. The year-over-year increase as a percent of sales was due to continued deleverage from the decline in Healthcare Apparel sales as well as our continued investments in talent and infrastructure, especially within Branded Products and Contact Centers capitalize on compelling future growth opportunities. Our fourth quarter interest expense was $2.2 million, as compared to $295,000 in the fourth quarter of last year, driven by a combination of higher interest rates and a higher average debt balance outstanding during the quarter. Net income for the quarter was $2 million or $0.14 per diluted share, as compared to net income of $4 million or $0.27 per diluted share in a year ago quarter. During the fourth quarter, the company sold its corporate office building for $5 million in cash proceeds, resulting in a pretax non-operating gain of $3 million. Excluding the gain in the prior year fourth quarter’s pension termination charge, the fourth quarter 2022 net loss was $1 million or a $0.06 loss per share, compared to net income of $5 million or $0.31 per diluted share the prior year period. The decrease in adjusted results was primarily driven by the incremental inventory write down and increased interest expense. Turning to the balance sheet. Cash and cash equivalents as of December 31, 2022 increased to $18 million from $9 million last year, due in part to the sale of our corporate office near year end. In terms of our debt position, our net leverage ratio of 3.85 times, our covenant EBITDA remains elevated. Based on the fourth quarter inventory charge and the calendarization of our 2023 forecast, it is more likely than not that we will exceed our net leverage covenant ratio of 4 times covenant EBITDA. As a result, we have initiated discussions with the lending agent on ways to address a potential amendment should it be needed in order to maintain compliance throughout the year. We will continue to focus on cash flow enhancement by improving our working capital position, particularly by optimizing our inventory levels within our Healthcare Apparel segment as well as scrutinizing our operating expenses and capital expenditures. I’ll conclude my prepared remarks with our initial financial outlook for 2023. Overall, we expect current slow economic conditions to persist and are cautiously optimistic that business conditions will gradually improve throughout the year. With that in mind, we are forecasting full year 2023 sales to be between $585 million and $595 million versus 2022 sales of $579 million. And earnings per diluted share between $0.92 and $0.97, compared to adjusted earnings per diluted share of $0.62 in 2022, which reflected significant inventory write downs. At the segment level, our 2023 forecast assumes that healthcare apparel sales will be up low single digits versus last year, and will gradually improve throughout the year as inventory levels and customer demand returned to normalize levels. For branded products, we estimate segment sales to be flat to download single digits, as we expect the continuation of the challenging market conditions from the fourth quarter of 2022 into the first half of the year, with meaningful growth in the back half of 2023. Lastly, we expect the contact center segments to continue to grow well into double digits, consistent with a fourth quarter performance reported today. Given these expectations for our three business segments, we expect our 2023 results to be relatively back end loaded as underlying market conditions gradually returned towards equilibrium. We are confident in our ability to execute on our strategic plan to capitalize on multiple growth opportunities and enhance long-term shareholder value. That concludes our prepared remarks. And operator if you could please open the lines, we’d be happy to take questions. See also 10 Value Stocks with Big Buybacks and 25 Wealthiest Countries in the World by GDP per capita. Q&A Session Follow Superior Group Of Companies Inc. (NASDAQ:SGC) Follow Superior Group Of Companies Inc. (NASDAQ:SGC) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: We will now begin the question-and-answer session. . And your first question will come from Kevin Steinke with Barrington Research. Please go ahead. Kevin Steinke : Hi, good afternoon. I wanted to start off by asking about the outlook for 2023. You mentioned that you expect lower economic conditions to persist. But at the same time, you express some optimism that business conditions should gradually improve throughout the year for healthcare apparel. And that momentum will build and branded products leading to significant growth in the second half of the year. So, I’m just, if you could discuss more kind of line of sight to that improvement throughout the year or what do you think will drive that improvement? Are you seeing a clearing up of inventory in healthcare or building pipeline and branded products? I guess any color you can offer on that, overall outlook for 2023 would be helpful. Michael Benstock: Unfortunately, the answer is going to be a little bit longer because of the three segments. So, it’s a little different in each of our businesses. branded products has been affected mostly by people holding back on buying marketing budgets being curtailed or being put on pause. Mostly, we have a lot of clients in the tech space and gig economy that have experienced some mass layoffs and not spending a lot of money. But, as the year goes on, they’ll say this about each of our businesses. As the economy improves, which is expected later on in the year. Certainly, in the second half, we expect to benefit from that improvement as well as there will be pent up demand. You can only hold back so long before you have to buy uniforms for employees, and before you have to start gifting your employees and looking at how you create brand allegiance among your customers. And people have held back now for some time. We can’t control the macro environment. Obviously, we all read the diverse opinions about what to expect in 2023 and certainly the most, the latest banking crisis, who knows how that might impact things in the future? Now, when you get to our call center business, we certainly feel strongly that we’ll have continued growth throughout the year, the demand is very strong. It’s not weakening, because of the current economic conditions. In fact, it’s strengthening and typically in a recession, and especially a recession, where it’s so hard to hire in the United States right now, which is an entry level positions, which is kind of a unique situation. We’re seeing a demand, like we haven’t seen before. Healthcare apparel, it’s all a question of timing of when we’re able to completely right size our inventories, move past, what we’re sitting with, still in inventory, turning a lot of that to cash. And being able to present a lot of newness. Keep in mind that third quarter and fourth quarter will be slightly impacted by our favorably by our direct-to-consumer launch that we spoke about, as well as our continued omnichannel approach in those businesses, but we can control only what we can control. Our view of things is it’s going to be a tough year, but it’s going to be better in the second half of the year, then it will be in the first half. Kevin Steinke : All right. Thanks for the insight there. And also following up just on the outlook for 2023. You can maybe talk about assumptions you’d have baked in for operating margin and interest expense, do you think you’d get some margin expansion based on some of the cost savings actions you’ve taken? How meaningful the bike do you expect interest expense to be I guess?.....»»