Cost Accounting – After Hours http://after-hours.org/ Thu, 16 Sep 2021 11:52:45 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://after-hours.org/wp-content/uploads/2021/07/icon-1-150x150.png Cost Accounting – After Hours http://after-hours.org/ 32 32 Derby County: EFL says no decision has been made on point deduction https://after-hours.org/derby-county-efl-says-no-decision-has-been-made-on-point-deduction/ Thu, 16 Sep 2021 11:04:56 +0000 https://after-hours.org/derby-county-efl-says-no-decision-has-been-made-on-point-deduction/ Derby County is still waiting to see if it broke spending rules between 2016 and 2018 The English Football League say no decision has been taken on a possible point deduction for Derby County on their accounting policies. Media speculation had suggested the Championship team would be pegged at nine points, with three more suspended, […]]]>
Derby County is still waiting to see if it broke spending rules between 2016 and 2018

The English Football League say no decision has been taken on a possible point deduction for Derby County on their accounting policies.

Media speculation had suggested the Championship team would be pegged at nine points, with three more suspended, leaving them at the bottom of the table.

Their accounts for 2016, 2017 and 2018 are under review after it was found that they had violated the accounting rules.

Rams were fined £ 100,000 and reprimanded in July for this violation.

Under the EFL’s profit and sustainability rules, Derby cannot suffer losses greater than £ 39million over three seasons.

But having had the way they count players – known as depreciation – found to violate EFL rules, the club’s accounts were re-examined by the league to see if they exceeded the level of. loss of £ 39 million.

Depreciation rules should provide that the cost of any transfer fees will be factored in evenly over the term of that player’s contract. So a £ 5million fee on a five-year contract would be charged £ 1million per year and would not be worth anything at the end of the contract. period.

However, Derby gave the players “residual value” – meaning that at the end of the contract they still had value in the club’s accounts that would help the Rams cut costs – a practice it is. claimed does not comply with generally accepted accounting principles.

“In an attempt to resolve any remaining issues with the EFL regarding its P&S submissions, the club provided the EFL with information ahead of last month’s deadline and this remains under review by the executive. of the league, “said an EFL statement.

“In any disciplinary matter, the EFL will always consider whether it can be concluded by a concerted decision in accordance with the EFL 85 rules.

“A concerted decision, subject to independent ratification, is deemed appropriate in circumstances which justify reaching an effective and fair resolution without referral to a disciplinary commission.

“There is no time frame to close this deal and the league will not be providing any further comment at this time.”

In March 2019 Birmingham City was docked at nine points for breaking the rules of profit and sustainability, and Sheffield on Wednesday saw a deduction of 12 points reduced to six points on appeal last season.

If the Owls had not been tallied, Derby, who consequently finished three points above club Yorkshire, would have been relegated from the championship.

Derby had a second charge linked to the sale price of Pride Park to owner Mel Morris terminated by an independent disciplinary commission.

Charges related to the valuation of Pride Park when it was sold to Morris for £ 80million, when it was previously listed as worth £ 41million.

Uncertainty persists at Pride Park

Derby owner Morris is still trying to sell the club, after seeing two potential sales fail.

In March, Derventio Holdings, which was backed by Abu Dhabi’s Bin Zayed Group, saw end of their takeover bid while another of Spanish businessman Erik Alonso was canceled in May.

The club have been under a transfer embargo since before the summer window opened, meaning the Rams were only allowed to sign free agents with strict conditions on wages.

On the pitch, the Rams have won just one of their seven league games this season and have drawn four, leaving them two points above the relegation zone.

If they were to suffer a nine-point deduction, they would drop to minus two points and be behind fierce rivals Nottingham Forest, who currently back the table.


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Councilors ask chamber director about audit https://after-hours.org/councilors-ask-chamber-director-about-audit/ Sun, 12 Sep 2021 04:12:31 +0000 https://after-hours.org/councilors-ask-chamber-director-about-audit/ Andrea Moore, executive director of the Roswell Chamber of Commerce, discusses the three-year audit of the chamber’s finances at Thursday’s Roswell City Council meeting. (Photo by Juno Ogle) Copyright © 2021 Roswell Daily Record The director of the Roswell Chamber of Commerce said the organization was moving forward during a presentation on the three-year audit […]]]>

Andrea Moore, executive director of the Roswell Chamber of Commerce, discusses the three-year audit of the chamber’s finances at Thursday’s Roswell City Council meeting. (Photo by Juno Ogle)

Copyright © 2021 Roswell Daily Record

The director of the Roswell Chamber of Commerce said the organization was moving forward during a presentation on the three-year audit of its finances at the Roswell City Council meeting on Thursday, but some of the councilors asked her about the transparency of the chamber during the process.

The audits were performed by Kubiak Melton & Associates, Albuquerque. City manager Joe Neeb said the total cost to the city was around $ 42,000.

The review of the chamber’s financial reports for fiscal years 2018, 2019 and 2020 was requested by the city and accepted by the chamber after the chamber board abruptly decided in March 2020 to terminate its maintenance contract doing business with the city.

Under the three-year contract, which began in July 2018, the city allocated $ 76,600 in 2018 and 2019 and $ 38,350 before the contract was terminated in fiscal 2020, according to the audit.

Chaves County also has a similar deal with the chamber, to which it has allocated $ 57,500 per year, paid monthly to $ 4,792 over those three years.

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Andrea Moore, executive director of the chamber, acknowledged in her presentation that audits for the 2019 and 2020 fiscal years showed that the chamber suffered financial losses which raised doubts about the ability of the organization to continue its activity.

“There was going concern, which means there is uncertainty about the ability of the chamber to meet its debt obligations,” Moore said.

The 2020 audit shows that as of June 30, 2020, the chamber had a total liability of $ 171,324 which included $ 4,183 in overdraft cash, a balance of $ 29,623 on a line of credit of $ 30,000 and a balance of $ 14,552 on a promissory note of $ 23,400 executed in 2018. It ended the year with a negative net asset balance of $ 44,388.

At the end of fiscal 2019, the chamber had total liabilities of $ 184,457, including a balance of $ 26,100 on the line of credit and a balance of $ 17,809 on the promissory note. He ended this fiscal year with a net loss of $ 9,473.

Moore served on the board for two years before becoming its chairman in July 2020, then became interim executive director in August 2020 following the resignation of Candace Purcella. Moore was appointed executive director in January. Moore said last summer that the chamber began implementing new practices and policies.

“Prior to the audit, it was agreed that the auditors had little reason to review our accounting practices, rules and policies, as the chamber had none,” she said. “As of July 2020, we have implemented almost entirely new practices, rules and policies within the office. “

Moore said the chamber has met with listeners about the changes that have been made.

The 2020 audit notes that chamber leadership planned to fund operating costs with existing cash, COVID-19 relief funds and by collecting 60% to 70% of unpaid and overdue membership fees.

“After speaking with our auditors about the changes that have been made within the chamber of commerce, they are confident that the chamber will move out of going concern in our future audits,” she said.

Moore said these measures are expected to make the chamber viable by fiscal 2023.

She said the chamber is moving forward in its mission to promote economic and social prosperity and help with business development, tourism and community pride.

“We don’t look in the rearview mirror anymore, we only look through the windshield.” She noted that the chamber had launched a magazine and was rebuilding its relationships with businesses and the community.

While some councilors have said they would like to see the City and the Chamber rebuild their relationship, others asked Moore about what they said was a lack of transparency in the process.

Councilor Margaret Kennard asked about the lack of opinions offered by the auditors in each year’s report. Kennard worked for the chamber for several months from fall 2019 to January 2020. She was one of four staff to resign that month. She revealed her connection to the bedroom before making her comments on Thursday.

Generally, an audit will provide an opinion on whether or not the organization conforms to accepted accounting principles and whether the audit fairly represents the financial accounts of the organization. An unqualified opinion is the highest opinion offered. A qualified opinion is obtained when there are a few matters of concern and an unfavorable opinion means that there are serious problems.

An auditor may also issue an opinion disclaimer – i.e. no opinion – for reasons such as lack of records, as was the case every year of the audit of bedroom.

Following the departure of the employees, Kennard said, Neeb requested an audit on February 24, 2020. A little over two weeks later, the board of directors decided to terminate the contract with the city.

“I was hoping that this audit would allow the city and the chamber to work on fixing the relationship, but I didn’t really trust the transparency of the audit process,” said Kennard, who attended. the meeting virtually. .

Kennard said she didn’t understand how detailed records couldn’t be available when the chamber hired an outside accountant to manage the funds. She said she was also disappointed that the audit did not mention how cooperative staff were in the process, which she said the city’s annual audit provides, as well as a representative auditor was not available to discuss the audit.

“The reason I think this is a big deal is because we have other non-profit contracts and we have to make sure that taxpayer dollars are protected,” she said. declared.

Councilor Jeanine Best criticized Moore and other council members for not being aware of the state of the chamber’s finances. She noted that payroll taxes had not been paid for two years. Moore said that since taking office in August, all unpaid taxes have been paid.

“I understand there is trust, but you still have to watch your back and you and the rest of the board have not watched the backs of the citizens of Roswell and the citizens of Chaves County,” she declared.

Best said the room has been “blessed” by COVID-19 relief funds. The 2020 audit notes that in August 2020, the chamber received a loan of $ 73,253 from the Small Business Recovery Act through the New Mexico Finance Authority and a loan of $ 37,600 from the Paycheck Protection Program through of the US Small Business Administration. The latter can be forgiven if the room meets certain criteria.

“If you ever come back to town and ask for money, I think we need to know your checks and balances. We need to know who your accountant is. We need an audit every year, not every three years, ”said Best.

Councilor Juan Oropesa said that while he was initially opposed to the city paying for the audit, he agreed it was time for the chamber and the city to move forward.

“I think the city, the city council in particular, should also recognize the fact that the citizens have been injured, have been damaged. The majority of the board is the one that voted for the audit to take place, ”he said.

“It’s time to move on and I’m confident with what you’ve already said, that you’re ready to turn around and move on and hopefully make it a better room,” said he declared.

Councilors Angela Moore and Jacob Roebuck asked Neeb if he was convinced the city did not need to take further action regarding the audit and if he was comfortable reestablishing a relationship with the ‘organization. He answered yes to both.

Neeb said the purpose of a chamber is to help businesses speak with one voice and that a strong business community is important to the city.

“If the business community is strong, we have the economy that drives our community forward. We have already discussed the potential of working together on projects or what that relationship will look like, ”he said, adding that the city and the chamber would ensure that assurances were in place.

“I think it was a series of unfortunate incidents that brought us to this. I sincerely believe that the Roswell Chamber is doing very well in order to remain that important part of the business community that we need. I have no qualms about working with them, ”he said.

City / RISD reporter Juno Ogle can be reached at 575-622-7710, ext. 205, or reporter04@rdrnews.com.


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Reviews | Restless and Relentless Minds: Thinking Like a “Species Out of Context” https://after-hours.org/reviews-restless-and-relentless-minds-thinking-like-a-species-out-of-context/ Sat, 04 Sep 2021 13:49:25 +0000 https://after-hours.org/reviews-restless-and-relentless-minds-thinking-like-a-species-out-of-context/ This is an excerpt from the opening speech of the online conference on “Changing Configurations and New Directions” at Ajeenkya DY Patil University in Pune, India on July 27, 2021. Summary The stability of Earth’s ecosystems, and therefore the future of the human species, depends on the recognition and response of people to the multiple […]]]>

This is an excerpt from the opening speech of the online conference on “Changing Configurations and New Directions” at Ajeenkya DY Patil University in Pune, India on July 27, 2021.

Summary

The stability of Earth’s ecosystems, and therefore the future of the human species, depends on the recognition and response of people to the multiple cascading social and ecological crises that can easily overwhelm our imaginations. We must cultivate restless and relentless minds to deal with unprecedented analytical questions and moral challenges if we are to move beyond failed approaches to our current politics. It requires a deeper sense of history than what we typically see in current debates. Since the advent of agriculture over 10,000 years ago, humans have been a “species out of context”. This awareness will help us to formulate “questions that go beyond the available answers”, which are necessary if we are to shape effective responses to crises. In this presentation, Robert jensen highlights half a century of work by one of his elders, Wes jackson of The Land Institute in Kansas (USA), to propose approaches to analyzing threats at this time in history. This conference is based on Jensen’s 2021 book, The Restless and Relentless Mind of Wes Jackson: In Search of Sustainability (University Press of Kansas) and a forthcoming book co-authored with Jackson.

Introduction: Restless and Relentless

I have lived an extraordinary life. I don’t mean to say that as an individual my life has been anything special. In fact, most of the time I have to work hard to get back to normal.

But I was born in 1958 in the United States, the richest society in the history of the world, at a time when people, not only in the United States but all over the world, expected economic expansion without end. It has been a time in human history of an extraordinary level of more — a lot more people and a lot more made possible by a lot more energy. While the world’s wealth was not distributed equally or equitably, global politics and economics in my lifetime were premised on the assumption that there might be enough for all to live comfortably, even abundantly, in consuming at unprecedented levels, however many of us humans may be wandering the face of the earth.

But things are changing. The United States remains the richest society for the time being. Wealth is still considered the norm around the world for the time being. But this dream of endless expansion has left us with nightmare scenarios for the future. Drastic change is inevitable.

Today we face multiple cascading ecological crises including, but not limited to, rapid climate destabilization, accelerated extinction of species and loss of biodiversity, chemical contamination of land and land. water, as well as soil erosion and degradation. These realities will require our species to diminish its power, either consciously through rational planning, or as a result of greater forces beyond our control. The decades to come – not in a sci-fi future, but in the lives of many of us – will be marked by permanent contraction. If there is to be a decent human future – perhaps if there is to be a human future at all – we have to deal with the inevitability of fewer people consuming less energy and less material resources.

No one knows how the species will get there. No one knows if we can make it happen through rational planning. But our chances of maintaining a significant human presence on Earth, living in a way that we might call human, will be improved if we let go of the illusions about growth, whether related to “drill, baby, drill” or to a “Green New Deal.” The end of the fossil fuel era is inevitable and no combination of renewable energy sources can fuel continuous expansion.

The scale and scope of the challenge are unprecedented and beyond the reach of conventional policy proposals. But we can increase our chances of success by cultivating restless and relentless minds.

Restless, in the sense of never feeling settled or safe because there is no security, something that vulnerable people understand and which will eventually become a daily reality, even for the rich. Relentless, in the sense of being open to questioning every assumption, doubting every conclusion, taking on every challenge, because the moment we think we got it right is the moment we’ll make our biggest mistakes.

Restless and relentless because we will fail often and we need to develop the resolve to persevere, and because when we get something right it means that we will be aware of another set of problems to come.

We must cultivate restless and relentless minds not only because of the challenges we face, but also to foster a more joyful participation in Creation.

Key Concepts

Wes Jackson is the most restless and relentless spirit I know. He is an elder of two important projects of the last half of the 20th century: the creation of early environmental education programs, and then the construction of a major research institution in sustainable agriculture. These placed him well for his third act: a frank and honest calculation with the fragile future we face.

Jackson’s awareness of the beauty and complexity of the world began on his family’s farm. His formal education in biology, botany and genetics deepened this reverence. Daily experience and scientific knowledge were part of the process by which Jackson came to see the distress of ecosystems, beginning with agriculture.

For the past four decades, Jackson has suggested that we not only focus on the problems of agriculture, but that we fight “the problem of agriculture.” Since humans became dependent on these annual grains, Jackson points out, we have reduced the planet’s ecological capital beyond replacement levels. From this observation flows what I consider Jackson’s most important aphorism, his description of contemporary humans as “a species out of context.”

For most of our evolutionary history, we were foragers who lived in small, relatively egalitarian groups who spent less time working for food and shelter than we do today, which the anthropologist says. Marshal Sahlins called “the original abundance society”. Surplus, property and hierarchy were scarce, existing only in places particularly rich in resources.

The advent of large-scale grain farming, followed by what we call civilization, changed all that. We began to work harder in more unequal societies, often with poorer diets and an overall reduction in human health. Agriculture has led to sedentary communities, cities, empires and the modern nation state, and along the way we have obtained extensive and permanent writings and recording of human creativity in the arts. . We have also had deepened inequalities, not only in economic systems but also in patriarchy and later in white supremacy. We have air conditioning and we have had global warming. We have achieved social mobility and the ability to leave small communities behind when they limit our personal development, as well as the erosion of a sense of stability and meaning as communities atrophy.

We continue to try to remake humans to integrate into contemporary societies. We might want to start wondering how to remake contemporary societies to better match humans. There is no going back to the search for food as the main economy – not with nearly 8 billion people on the planet – but we can move forward with our evolutionary history in mind.

Happy participation

Jackson sees dramatic changes coming, many of which are potentially catastrophic but also some that will be healthy. In the meantime, there is work to be done and a world to be enjoyed.

There is a saying in what is sometimes called the minimalist movement that “less is more”: a good life is not only possible, but more likely when you reduce your consumption. Fair enough, but I think it is more honest to say “less is less, less is OK”.

It is easy to recognize that people in wealthy societies own too much and that too much can be more of a burden than a blessing. But we also have to recognize that there are advantages to having access to a lot of energy and materials. Anyone who’s ever spent all day digging a hole or a trench with a shovel, a task a backhoe could accomplish in minutes, knows that sometimes a lot of energy is easier on your back.

But life is a compromise, and too often we focus on the positive effects of energy and materials without considering the downsides. There is no way to identify all the costs and benefits, but we don’t even try to count the full cost, in terms of the ecological, political and psychological consequences of our technologies. We regularly stress the benefits and ignore the real costs.

Honest full cost accounting would take into account all of these complexities of contemporary societies – the pros and cons – so that we can begin to make rational collective decisions about what to cling to during the downturn. It won’t be easy, and often it won’t be fun. Declining power will mean suffering, even if we manage to become more human by taking care of each other.

We need to rethink our ideas about wealth, about what constitutes a good life. Sahlins put it bluntly: “[T]here are two possible routes to enrich yourself. Needs can be “easily met”, either by producing a lot or by desiring little.

Less is less, but less must be OK because we have no choice. The sooner we realize that the more time we have for rational planning to reduce the pain of a transition to a new way of organizing our lives.

Jackson was walking around his Kansas property one spring day and called me with a simple question, “Why isn’t that enough?” “

Jackson checked off a list of the plants he had cataloged on the boardwalk and described a spider web between two trees he had studied. He spoke of all the questions about these organisms that arose as he observed them.

“Why is that not enough? “

All of that – seeing, feeling, thinking, the emotions that arise in us when we talk about it – may be enough. We can find the authentic foundations of meaning and purpose in our own engagement with the world around us. If we can be happy with what the ecosphere gives us for free – if that can really be enough for us – perhaps we can find the strength to ask the tough questions and the imagination to go beyond the available solutions. Our restless and relentless minds can get down to business.


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These 4 measures indicate that Bouygues (EPA: EN) is using the debt reasonably well https://after-hours.org/these-4-measures-indicate-that-bouygues-epa-en-is-using-the-debt-reasonably-well/ Sun, 29 Aug 2021 06:31:11 +0000 https://after-hours.org/these-4-measures-indicate-that-bouygues-epa-en-is-using-the-debt-reasonably-well/ Berkshire Hathaway’s Charlie Munger-backed external fund manager Li Lu is quick to say “The biggest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital”. It is only natural to consider a company’s balance sheet when looking at its level of risk, as debt is often involved when […]]]>

Berkshire Hathaway’s Charlie Munger-backed external fund manager Li Lu is quick to say “The biggest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital”. It is only natural to consider a company’s balance sheet when looking at its level of risk, as debt is often involved when a business collapses. Like many other companies Bouygues SA (EPA: EN) uses debt. But does this debt worry shareholders?

When is debt dangerous?

Debt helps a business until the business struggles to repay it, either with new capital or with free cash flow. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. However, a more common (but still costly) event is when a company has to issue stock at bargain prices, constantly diluting shareholders, just to strengthen its balance sheet. That said, the most common situation is where a business manages its debt reasonably well – and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash flow and debt together.

See our latest analysis for Bouygues

How much debt does Bouygues have?

As you can see below, Bouygues had 6.73 billion euros in debt in June 2021, up from 8.59 billion euros the previous year. However, because it has a cash reserve of 3.93 billion euros, its net debt is less, at around 2.81 billion euros.

ENXTPA: FR History of debt versus equity August 29, 2021

A look at the liabilities of Bouygues

According to the latest report published, Bouygues had liabilities of € 21.2bn less than 12 months and liabilities of € 9.21bn over 12 months. In compensation for these obligations, he had cash of € 3.93 billion as well as receivables valued at € 13.9 billion within 12 months. Its liabilities therefore amount to € 12.6 billion more than the combination of its cash and short-term receivables.

That’s a mountain of leverage even compared to its gargantuan market capitalization of € 13.5 billion. If its lenders asked it to consolidate the balance sheet, shareholders would likely face severe dilution.

We use two main ratios to inform us about the levels of debt compared to earnings. The first is net debt divided by earnings before interest, taxes, depreciation, and amortization (EBITDA), while the second is the number of times its profit before interest and taxes (EBIT) covers its interest expense (or its coverage of interest, for short). Thus, we consider debt versus earnings with and without amortization charges.

With net debt of only 0.74 times EBITDA, Bouygues is undoubtedly fairly cautious. And it has 9.1 times interest coverage, which is more than enough. In addition, Bouygues has increased its EBIT by 70% over the past twelve months, and this growth will facilitate the processing of its debt. The balance sheet is clearly the area you need to focus on when analyzing debt. But in the end, it is the company’s future profitability that will decide whether Bouygues will be able to strengthen its balance sheet over time. So if you are focused on the future you can check this out free report showing analysts’ earnings forecasts.

Finally, a business needs free cash flow to pay off debts; accounting profits are not enough. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years, Bouygues has recorded free cash flow of 60% of its EBIT, which is close to normal, given that free cash flow is understood to be net of interest and taxes. This free cash flow puts the business in a good position to repay debt, if any.

Our point of view

Fortunately, Bouygues’ impressive EBIT growth rate means that it has the upper hand over its debt. But frankly, we think his total passive level undermines that feeling a bit. Considering all of the above factors together, it seems to us that Bouygues can manage its debt quite comfortably. On the plus side, this leverage can increase returns to shareholders, but the potential downside is more risk of loss, so it’s worth watching the balance sheet. When analyzing debt levels, the balance sheet is the obvious starting point. But at the end of the day, every business can contain risks that exist off the balance sheet. For example, we discovered 1 warning sign for Bouygues which you should know before investing here.

Of course, if you are the type of investor who prefers to buy stocks without going into debt, feel free to check out our exclusive list of cash growth net stocks today.

To trade on Bouygues or any other investment, use the platform considered by many to be the Gateway for Professionals to the Global Market, Interactive brokers. You get the cheapest * trading on stocks, options, futures, forex, bonds and funds from around the world from a single integrated account. Promoted

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.


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Lone Star Overnight simplifies rates in high season https://after-hours.org/lone-star-overnight-simplifies-rates-in-high-season/ Wed, 25 Aug 2021 22:15:00 +0000 https://after-hours.org/lone-star-overnight-simplifies-rates-in-high-season/ AUSTIN, Texas, 25 August 2021 / PRNewswire / – Responding to e-commerce shippers’ need for clear, consistent and affordable shipping costs, Lone Star Night (LSO) announces its high season supplement plan. In most cases, it is simpler and cheaper compared to those of its big domestic competitors. On average, LSO’s peak surcharge is a significantly […]]]>

AUSTIN, Texas, 25 August 2021 / PRNewswire / – Responding to e-commerce shippers’ need for clear, consistent and affordable shipping costs, Lone Star Night (LSO) announces its high season supplement plan. In most cases, it is simpler and cheaper compared to those of its big domestic competitors. On average, LSO’s peak surcharge is a significantly lower surcharge for each package that one of our ecommerce shippers sends with us between October 15, 2021, and January 13, 2022. There are no volume-based thresholds earlier in the year and no tiered top-up level. The exact surcharge varies by customer based on each customer’s unique characteristics and shipping volume throughout the year. There is a $ 0.00 advanced supplement for small business shippers.

“Our customers tell us that the complex and high surcharges from our competitors make their brains beat. It’s a real problem for their internal cost accounting teams and freight auditors to determine which packages are subject to a surcharge, and not. We choose to apply a lower overcharge to each package tailored to their specific shipping characteristics that most influence our peak costs.I think it makes sense to do the extra work to match the surcharge with the cost at one. granular level rather than an arbitrary formula. That way, if any of our customers have lower cost characteristics in high season, they don’t subsidize other customers whose plans are more expensive to maintain. This is the same approach we use when we develop a price and service proposal for a new customer. I call it our “Goldilocks Award. Strategy ‘… neither too hot nor too cold, just the right amount, ”said Richard metzler, CEO of LSO.

“Customers also tell us that they are withdrawing from other regional and national shippers to LSO and other regional parcel carriers for three basic reasons. 1. Better service; if you don’t believe me, ask the one of the experts who follow the parcel industry 2. Big savings, we’re lean, disjointed, and have less overheads We don’t have a football stadium named after our name and never will. Flexible and easier to use; at least we try to do it your way, and in many cases we do. Our personalized approach to pricing is a simple example of how LSO works differently. regularly do things that other guys can’t do, in a way that they won’t. “

Metzler went on to say, “Peak season is almost upon us and not all regional and national parcel carriers combined will have enough capacity to support the record level of online shopping. Some say there could be as much as a Capacity Shortfall of 5 million packages per day. I strongly encourage everyone to finalize their peak forecast and finalize their technology and operational implementation plans, regardless of your carrier choice. This is the best thing shippers can do to maximize service and minimize costs. We grew by 70% last year and our e-commerce product line by 185%. It will be another great year for us, fueled mainly by e-commerce. You have everyone’s commitment on the LSO team to stretch very hard to make it a prosperous holiday season for as much order volume from our online merchants as humanly possible. “

“We are not pursuing new business for 2021, but we are signing contracts for 2022. Anyone who signs an agreement for next year and starts shipping their target volume in the first quarter will not receive a General Rate Increase (GRI) in 2022. ”

For more information on LSO, please visit http://lso.com.

About Lone Star Overnight
Lone Star Overnight (LSO™) has its seat at Austin, Texas and over the past 30 years has grown into the premier regional parcel delivery company throughout the South West. LSO has a network of 23 operating sites and serves the 3,000 postal codes in Texas, ~ 10% of all e-commerce orders in the United States and 80% of the population in Oklahoma, Eastern New Mexico and Western louisiana. From September 2021, geographic coverage will expand to include Louisiana, Arkansas, Missouri and parts of Kansas and Illinois. Coverage of the LSO population will increase from ~ 31 million to ~ 43 million.

Media contact
Savannah Muir
[email protected]

Related images
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LSO

SOURCE Lone Star Night


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Beany brings its main accounting department to Australia https://after-hours.org/beany-brings-its-main-accounting-department-to-australia/ Tue, 24 Aug 2021 00:46:00 +0000 https://after-hours.org/beany-brings-its-main-accounting-department-to-australia/ Tuesday August 24, 2021, 12:46 PMPress release: Cap New Zealand’s first online accounting firm launched in Sydney and announces appointment of Australian Managing Director; ready to recruit to meet local demand from SMEs The launch comes amid lockdowns and the need for small businesses to access various government payments and programs led by the pandemic […]]]>

New Zealand’s first online accounting firm launched in Sydney and announces appointment of Australian Managing Director; ready to recruit to meet local demand from SMEs

The launch comes amid lockdowns and the need for small businesses to access various government payments and programs led by the pandemic

Sydney, Australia
– New Zealand’s leading online accounting firm Beany launched in Australia, offering easy access to leading accountants, its proactive approach to adding value to businesses, and its stable monthly fixed fee for small businesses and medium-sized enterprises (SMEs) across the country.

The company also announced that Julian Hutabarat CPA has been appointed Managing Director of Beany Australia as the company seeks to immediately hire local staff to meet the demand for its services, especially among professional services and traders.

Launched seven years ago in New Zealand, Beany is a unique online accounting firm that now has nearly 2,000 New Zealand companies among its clients, ranking it among the top two percent of accounting firms. top performers of the Tasman.

Beany relies on a team of experts working remotely to provide proactive service to its customers. The company has developed a unique, world-class software solution that, during the integration phase, collects all the necessary information required by accountants to undertake compliance, forecasting, budgets and more for SMBs. Once this online integration is complete, Beany appoints a personal accountant – who has all the information they need to start working immediately – for the client within minutes, with clients also having access to team support and advice. Extended Beany Expert for a fixed time, monthly fee.

Sue de Bievre, CEO and Founder of Beany, said the transparent process and unique software enables efficiencies that allow Beany’s team of experts to spend more time proactively meeting the needs of customers. customers, and the software also identifies when and where a customer needs assistance.

his team of accountants will work proactively to advise clients on how to improve their small business, such as providing advice and helping them apply various programs or benefits that the business owner might benefit from.

“We’re seeing interest among professional services and businesses in our services because we can add value to them rather than just being a cost to help them comply,” she said.

“In a context of a prolonged economic downturn, SMEs such as those in commerce, for example, often do not have the time during the day to invoice on time, let alone register and access disaster payments, keep abreast of updated tax rates. and undertake financial health checks.

“We are providing this to all of our customers for a stable monthly rate, which is why we have seen such rapid early traction in Australia.”

Software Powers Expertise and proactive accounting for SMEs

Joseph Lyons, Managing Director of Xero, Australia & Asia, said: “Beany’s team of specialists are a great foundation for any new business, but are also ideal for established businesses looking to use accounting to forecast and plan. in advance.

The company has already signed a number of clients in Australia, including Angela Loucks Alexander, director of the Auditory Processing Institute.

“I moved to Australia in November 2020 after using Beany a lot in New Zealand, and immediately contacted Beany to see if they were operating here,” Alexander said. “It’s the most proactive thing I can do for my organization.

“When I started my business I had huge bills and wasn’t getting the proactivity I needed from a service I was paying a premium for. So I found Beany and was up and running within an hour. Having the team of experts ready to help if I have any questions gave me peace of mind – especially since the cost was stable and I knew I wasn’t going to have a huge bill at the end.

“In addition, they have been at the forefront in giving me advice, such as informing me about tax rates or changed benefits, a proactive service that I had never experienced before. “

Newly appointed general manager responsible for growing the business locally and quickly adding staff

Julian Hutabarat brings a decade of experience in leadership roles to Beany, having most recently worked as a Director for BPI Accounting Services. He holds a CPA, as well as a Bachelor of Commerce (B.Com.) In Accounting and Finance from the University of New South Wales.

“I’ve always worked with companies that followed the traditional accounting process: billing by the hour and a lot of compliance work,” Hutabarat said. “But I’ve always found that the traditional accounting process doesn’t add long-term value to a business; he was not able to help a business project in the future.

“Beany has a huge opportunity to help Australian SMEs and independent traders both in the future and today, amid the latest bottlenecks that are causing undue stress to businesses across the country. Not only do we reduce the burden of accounting bill shock with stable monthly fees, but we help people request disaster payments quickly and hassle-free at no additional cost.

De Bievre said Beany was looking to hire more accountants immediately to meet a rapid interest in his service locally, but added that the company was ready to start by leveraging its existing network of experts under Hutabarat leadership.

“While we want to add staff quickly to help us grow faster, under the leadership of Julian and with the support of our team of accountants, we are ready to go for our clients in Australia,” said de Bievre. “He’s committed to delivering value to customers beyond compliance, and that makes him a perfect fit with our philosophy here at Beany. “

ABOUT BEANY

Beany is a team of accountants proven to put more money in the pockets of small business owners. Beany is completely online, which allows us to bring the smartest people to small and medium-sized businesses, at an affordable price. We transform accounting from a responsive department into a value-added arm of any small business, allowing them to look confidently into the future and plan ahead.

To learn more, visit www.beany.com.

© Scoop Media


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Consultants charge $ 550,000 for six weeks of work on the NSW rail entity https://after-hours.org/consultants-charge-550000-for-six-weeks-of-work-on-the-nsw-rail-entity/ Sun, 22 Aug 2021 19:00:00 +0000 https://after-hours.org/consultants-charge-550000-for-six-weeks-of-work-on-the-nsw-rail-entity/ A Herald An investigation in June revealed that TAHE was created in 2015 to allow the government to hide the costs of the rail system by shifting spending from the state budget to the new company. Loading The survey found that over the next few years the government could withdraw billions of dollars from the […]]]>

A Herald An investigation in June revealed that TAHE was created in 2015 to allow the government to hide the costs of the rail system by shifting spending from the state budget to the new company.

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The survey found that over the next few years the government could withdraw billions of dollars from the budget. But changes to accounting standards in 2018 put this so-called “accounting trick” at risk.

In an attempt to pursue what former NSW Auditor General Tony Harris described as a rort, the government hired various consultants to write reports on TAHE that helped stack it up.

Treasury officials confirmed at a parliamentary hearing on Friday that one of the reports, written by KPMG partner Heather Watson, was appointed without a tender and the partner was handpicked by the Treasury .

Ms Watson was hired to provide advice on TAHE based on a set of Treasury assumptions that would contradict the findings of a separate report by another KPMG partner, Brendan Lyon, which concluded that the company could end up costing the state more than it saved.

A whistleblower close to TAHE said it was easier to shell out millions to consulting firms than to admit the Treasury was wrong, and that “the budget will be hit by billions of dollars.” .

The crown corporation that controls $ 40 billion in trains and other rail assets has only 20 employees.Credit:Rhett wyman

TAHE also paid consulting fees for staff such as its Secretary General Andrew Alam. He was paid $ 465,814 over a year – more than double that of a secretary at a publicly traded company – through his consulting firm, without going through a tender.

Confidential e-mails released to Parliament show that Mr. Alam was instrumental in connecting BCG to the management of TAHE.

Days after becoming company secretary last year, he wrote to Anne Hayes, then CEO of TAHE, and Andrew Newsome, BCG partner. “We previously worked together on TAHE in 2017, where Andrew led a review of the operating model and company definition,” wrote Alam.

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BCG then emailed Ms Hayes to tell her that they would normally charge the government $ 800,982 for the work, but would reduce the total fee to $ 500,000 because it was a “customer to long term”. Figures exclude GST.

“We have a detailed understanding of how to market government assets, having worked with NSW Treasury on a number of highly sensitive asset marketing agreements including land registry, energy transactions and other confidential agreements “, they wrote.

Further emails to the TAHE chief show that Mr Alam’s role in BCG is earning a two-week work extension for TAHE. “We have just discussed with Andrew Alam how we might extend our support for another two weeks,” wrote the BCG.

The Herald can reveal that the six-week contract with BCG, concluded last July, has been extended for two weeks and cost $ 736,851. It cost TAHE an additional $ 1.375 million for a second job.

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In selecting BCG, TAHE did not follow procurement practices by not obtaining three quotes.

Mr Mookhey said that by not doing this TAHE has virtually guaranteed that the public will pay the big dollar for BCG. “TAHE’s judgment was appalling,” he said.

TAHE said in a statement that because it was a crown corporation, it was not required to adhere to the NSW government procurement framework, although it “may choose to do so if she wishes ”.

“All contract details and values ​​are disclosed in an appropriate manner in accordance with NSW government reporting requirements and guidelines,” he said.

Transport for NSW said it and the Treasury had considered a range of advice in developing and implementing TAHE. “Transport for NSW complies with all government regulations and requirements when entering into contracts with the private sector,” he said.

Lisa Davies sends out an exclusive newsletter to subscribers every week. Subscribe to receive his editor’s note.


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The search for the “new normal” in lease accounting https://after-hours.org/the-search-for-the-new-normal-in-lease-accounting/ Fri, 20 Aug 2021 13:00:00 +0000 https://after-hours.org/the-search-for-the-new-normal-in-lease-accounting/ ASC 842, the new lease accounting standard, represents the most significant change in decades in the way companies account for leases under US GAAP. For the first time, companies are required to present most of their operating leases on the balance sheet, which has resulted in a sharp increase in liability balances in the financial […]]]>

ASC 842, the new lease accounting standard, represents the most significant change in decades in the way companies account for leases under US GAAP. For the first time, companies are required to present most of their operating leases on the balance sheet, which has resulted in a sharp increase in liability balances in the financial statements of many organizations.

Although the new standard is not yet in effect for private companies, public companies have already adopted the new rules, and many have entered their second and third years under the new accounting. Add to this the economic turmoil caused by the coronavirus pandemic, many companies (especially those in sectors heavily dependent on rental) have been motivated to take a closer look at their lease portfolios and the impacts on their operations.

The adoption of the new lease accounting standard has had an impact on all companies with operating leases in their business model. However, some industries have experienced a greater increase in their liability balances than others due to the nature of their business and services. As seen in the recent LeaseQuery article Rental responsibility index report, several key sectors have been significantly affected by the new standard, including higher education, catering and retail. These same industries have also been directly affected by the global pandemic, which has changed their markets and the way they serve their customers. Companies in these sectors have likely thought about new strategies and innovations to respond to recent economic tensions and leasing decisions are a critical area that these types of companies can tap into.

Higher Education

The higher education sector has seen an increase of over 7,000% in liability balances due to ASC 842 and the requirement to present operating leases on the balance sheet. This industry also had to react immediately to the coronavirus pandemic with flexibility and swift action to maintain services in a new environment marked by social distancing. Colleges and universities have switched to a virtual learning model almost overnight. While online courses have been an option for many years now, the shift to a fully virtual environment has had lasting effects on the education industry and what students will expect in the future.

Even after social distancing and COVID restrictions are eased, virtual learning is a format that will remain in greater demand than ever. As more students seek to achieve their higher education goals through online courses, colleges and universities should expect a corresponding decrease in on-campus services such as accommodation and food. .

Higher education institutions now need to critically review their business model and operations to determine whether strategic decisions need to be made to better position themselves to reap the benefits of a more hybrid educational environment. For example, some colleges and universities might find savings opportunities by reducing their real estate footprint due to the decrease in activity on campus. On the other hand, the need for more technology to serve their stakeholders could mean that some institutions will rely on more technology assets in the future and new decisions regarding the purchase or lease of these assets will be. taken.

Restaurants

The restaurant industry was another environment that felt the immediate impact of the pandemic. Government restrictions on businesses along with society’s increased focus on social distancing and health concerns have meant that many restaurants have faced a drastic decrease in consumer activity. In many cases, this has resulted in closures and downsizing for some businesses.

Conversely, the sudden shift to online ordering and delivery services has created new opportunities for these businesses. Many consumers were participating in food delivery services for the first time out of necessity, but the convenience gained through these options translates into continued demand for them in the future.

The restaurant industry has a historically active rental environment, with many on-site restaurants managed through operating leases. As a result, not only has this industry seen an immediate impact on its balance sheet due to the adoption of the new rental standard (an average increase in liability of 41x), but it has also encountered new rental decisions due to of its response to changing consumer behavior. forced by the pandemic.

Increased demand for delivery options means catering businesses may consider reducing the size and number of on-site spaces needed to serve their customers. However, with improvements in food and safety standards and procedures, these same businesses may also need new equipment, which will result in more leases in the future.

Retail

Given the new lease accounting standard and the coronavirus pandemic, the retail industry has also seen significant changes. This industry has long relied on operating leases, with many retail stores leasing storefront space in malls and shopping centers comprising a variety of retail stores. Operating leases entered into by retail companies often include a payment structure based on business performance, as owners structure their leases to include payments based on the percentage of sales.

When the pandemic struck, many retail businesses struggled to stay operating and profitable given the shelter-in-place and self-quarantine proclamations. These companies were locked into operating leases that they had to continue to pay despite the fact that their financial performance was affected by reduced sales to consumers. As a result, 54% of retailers said they requested rent concessions to help manage the impact of the pandemic. Other retail companies have faced situations of abandonment and renegotiation of leases as their need for retail space changed.

Benefits beyond compliance

The effects of the new ASC 842 lease accounting rules and the economic changes due to the pandemic have had a lasting impact on businesses and the way they manage their operations and finances. While adopting ASC 842 is a time-consuming task, there are benefits to having a deeper understanding of an organization’s rental business. Adherence to the new lease accounting standards has prompted many companies to centralize and improve their lease data, making them better prepared to make beneficial leasing and sourcing decisions in the future.

In addition, by having more data, companies negatively affected by the pandemic have been able to respond more quickly and successfully to economic challenges by identifying opportunities to renegotiate leases, apply for rent concessions or modify their strategies. procurement and cost savings. Lease accounting software solutions help businesses simplify new accounting requirements and manage and analyze their rental business. Arming accountants with the best technology – one that offers reporting functionality that makes it easier and faster to access information and data analysis – can make the difference in making the right strategic decisions for the post-pandemic economy.


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Ralph Lauren Reports First Quarter Fiscal 2022 Results https://after-hours.org/ralph-lauren-reports-first-quarter-fiscal-2022-results/ Thu, 19 Aug 2021 09:16:29 +0000 https://after-hours.org/?p=2682 NEW YORK–(BUSINESS WIRE)–Ralph Lauren Corporation (NYSE:RL), a global leader in the design, marketing, and distribution of premium lifestyle products, today reported earnings per diluted share of $2.18 on a reported basis and $2.29 on an adjusted basis, excluding restructuring-related and other net charges for the first quarter of Fiscal 2022. This compared to earnings per […]]]>

NEW YORK–(BUSINESS WIRE)–Ralph Lauren Corporation (NYSE:RL), a global leader in the design, marketing, and distribution of premium lifestyle products, today reported earnings per diluted share of $2.18 on a reported basis and $2.29 on an adjusted basis, excluding restructuring-related and other net charges for the first quarter of Fiscal 2022. This compared to earnings per diluted share of ($1.75) on a reported basis and ($1.82) on an adjusted basis, excluding restructuring-related and other net charges for the first quarter of Fiscal 2021.

“Quality, a sense of timelessness and a feeling of optimism inspire everything we create,” said Ralph Lauren, Executive Chairman and Chief Creative Officer. “I cannot think of a time when these values have felt more essential or relevant as the world looks forward to a future marked by hope and possibility.”

“Against the backdrop of stronger than expected re-openings across North America and Europe, our teams delivered exceptional performance this quarter,” said Patrice Louvet, President and Chief Executive Officer. “Our timeless brand is resonating strongly with consumers around the world, and the breadth of our lifestyle portfolio is enabling us to deliver products that meet evolving consumer tastes and demand as we progressively emerge from the pandemic. Even as we continued to manage through COVID-related challenges in select markets and in our global supply chain, we are back on offense and excited about our future growth opportunities.”

Key Achievements in First Quarter Fiscal 2022

As we continued to navigate a volatile global retail environment, we delivered the following highlights across our strategic priorities in the first quarter of Fiscal 2022:

  • Win Over a New Generation of Consumers

    • Drove strong consumer engagement with first quarter highlights centered around our Summer of Sports including: our sponsorship of Team USA at this summer’s Tokyo Olympics, Wimbledon, and our first collection in partnership with Major League Baseball. We also announced our launch as the official outfitter of G2 Esports, a groundbreaking new partnership in fashion and gaming
    • Accelerated marketing investments as planned, with first quarter spend more than doubling to last year and up nearly 40% compared to first quarter Fiscal 2020 levels. Increased investments focused on supporting new customer acquisition, digitally-amplified brand campaigns and resumption of local in-store activations as markets reopened around the world
  • Energize Core Products and Accelerate Under-Developed Categories

    • Continued to drive our brand elevation strategy across every region with AUR growth of 17% in the first quarter, on top of 25% growth in the prior year. All geographies exceeded our long-term targets of low- to mid-single digit annual AUR growth, led by 39% growth in North America on improved quality of sales and distribution
    • Leveraged our icons and the breadth of our lifestyle brand to deliver the right balance of core and seasonal new products as regions emerged from the pandemic, while also continuing to develop high-potential categories led this quarter by outerwear, denim, footwear and home
  • Drive Targeted Expansion in Our Regions and Channels

    • Delivered strong growth across every region in the first quarter led by our sales recovery in North America and Europe, particularly in wholesale. Asia performed in-line with our expectations, with stronger performance in China and Korea more than offsetting extended COVID-19-related restrictions in Japan, our largest market in the region
    • Continued momentum in the Chinese mainland, with first quarter sales increasing more than 50% to last year and more than 70% compared to first quarter Fiscal 2020 in constant currency. Ralph Lauren opened its first digital-forward “Emblematic” retail concept partnering with Tencent in Beijing during the quarter, supporting our key city ecosystem strategy in the region
  • Lead With Digital

    • Global digital ecosystem revenues accelerated to more than 80% growth in the first quarter despite traffic starting to return to physical stores, with momentum across both owned and wholesale digital channels globally and led by improvement in North America
    • First quarter operating margin in our owned digital business expanded 70 basis points to last year and more than 1,400 basis points to first quarter Fiscal 2020 and were accretive to total company margin rate
  • Operate With Discipline to Fuel Growth

    • Adjusted operating margin expanded to 16.8% in the first quarter, compared to (35.7%) last year, driven by significantly better operating expense leverage on stronger revenues, more than offsetting increased marketing investments
    • Committed to achieving net zero greenhouse gas emissions by 2040 as part of our 2021 Design the Change report, along with establishing new targets around circularity and diversity and inclusion
    • Completed the sale of Club Monaco to Regent at the end of the first quarter as planned, with Chaps on track to transition to a licensed business in second quarter Fiscal 2022, enabling our teams to focus our resources on our core brands as part of our Next Great Chapter elevation strategy

First Quarter Fiscal 2022 Income Statement Review

Net Revenue. In the first quarter of Fiscal 2022, revenue increased by 182% to $1.4 billion on a reported basis and was up 176% in constant currency. Foreign currency favorably impacted revenue growth by approximately 650 basis points in the first quarter.

Revenue performance for the Company’s reportable segments in the first quarter compared to the prior year period was as follows:

  • North America Revenue. North America revenue in the first quarter increased 301% to $662 million. In retail, comparable store sales in North America were up 176%, with a 278% increase in brick and mortar stores and a 51% increase in digital commerce. North America wholesale revenue increased to $250 million compared to $23 million in the prior year period.
  • Europe Revenue. Europe revenue in the first quarter increased 194% to $355 million on a reported basis and increased 179% in constant currency. In retail, comparable store sales in Europe were up 98%, with a 154% increase in brick and mortar stores and a 23% increase in digital commerce. Europe wholesale revenue increased 344% on a reported basis and increased 324% in constant currency.
  • Asia Revenue.Asia revenue in the first quarter increased 68% to $288 million on a reported basis and 61% in constant currency. Comparable store sales in Asia increased 43%, with a 43% increase in our brick and mortar stores and a 42% increase in digital commerce.

Gross Profit. Gross profit for the first quarter of Fiscal 2022 was $968 million and gross margin was 70.3%. Adjusted gross margin was 69.8%, 200 basis points below the prior year on a reported basis and down 260 basis points in constant currency due to unusual mix benefits in the prior year period from COVID-19-related store closures across North America and Europe. Compared to first quarter Fiscal 2020, adjusted gross margins expanded 530 basis points on a reported basis on strong average unit retail growth.

Operating Expenses. Operating expenses in the first quarter of Fiscal 2022 were $747 million on a reported basis. On an adjusted basis, operating expenses were $729 million, up 39% to last year, primarily driven by higher compensation and rent expense following stores closures and staff furloughs due to COVID-19 in the prior year period, along with increased marketing investments as planned. Adjusted operating expense rate was 53.0%, compared to 107.5% in the prior year period.

Operating Income. Operating income for the first quarter of Fiscal 2022 was $221 million and operating margin was 16.0% on a reported basis. Adjusted operating income was $231 million and operating margin was 16.8%, 5,250 basis points above the prior year. Operating income for the Company’s reportable segments in the first quarter compared to the prior year period was as follows:

  • North America Operating Income. North America operating income in the first quarter was $186 million on a reported basis and $178 million on an adjusted basis. Adjusted North America operating margin was 26.9%, up 5,120 basis points to last year.
  • Europe Operating Income. Europe operating income in the first quarter was $95 million on a reported basis and $94 million on an adjusted basis. Adjusted Europe operating margin was 26.4%, up 4,120 basis points to last year. Foreign currency favorably impacted adjusted operating margin rate by 40 basis points in the first quarter.
  • Asia Operating Income. Asia operating income in the first quarter was $60 million on a reported basis and $61 million on an adjusted basis. Adjusted Asia operating margin was 21.3%, up 1,390 basis points to last year. Foreign currency favorably impacted adjusted operating margin rate by 130 basis points in the first quarter.

Net Income (Loss) and EPS. Net income in the first quarter of Fiscal 2022 was $165 million, or $2.18 per diluted share on a reported basis. On an adjusted basis, net income was $172 million, or $2.29 per diluted share. This compared to a net loss of $128 million, or ($1.75) per diluted share on a reported basis, and a net loss of $133 million, or ($1.82) per diluted share on an adjusted basis, for the first quarter of Fiscal 2021.

In the first quarter of Fiscal 2022, the Company had an effective tax rate of approximately 22% on both a reported basis and an adjusted basis. This compared to an effective tax rate of approximately 26% on both a reported basis and an adjusted basis in the prior year period.

Balance Sheet and Cash Flow Review

The Company ended the first quarter of Fiscal 2022 with $3.0 billion in cash and investments and $1.6 billion in total debt, compared to $2.7 billion and $1.9 billion, respectively, at the end of the first quarter of Fiscal 2021.

Inventory at the end of the first quarter of Fiscal 2022 was $803 million, up 4% compared to the prior year period.

Full Year Fiscal 2022 and Second Quarter Outlook

The Company continues to note the ongoing uncertainty and evolving situation surrounding COVID-19 impacting the timing and path of recovery in each market, including the potential for further outbreaks or resurgences of the pandemic across various markets as well as potential global supply chain disruptions. The full year Fiscal 2022 and second quarter guidance excludes restructuring-related and other charges, as described in the “Non-U.S. GAAP Financial Measures” section of this press release.

For Fiscal 2022, the Company now expects constant currency revenues to increase approximately 25% to 30% to last year on a 53-week reported basis. Foreign currency is expected to positively impact revenue growth by approximately 30 basis points. The 53rd week is expected to represent approximately 140 basis points of this year’s revenue growth.

The Company now expects operating margin for Fiscal 2022 of about 12.0% to 12.5%. This compares to operating margin of 4.8% in the prior year period and 10.3% in Fiscal 2020. Operating margin expansion is expected to be primarily driven by operating expense leverage. Gross margin is now expected to increase 50 to 70 basis points to last year, up from the Company’s previous outlook of a 40 to 60 basis point decline, with stronger average unit retail growth and favorable product mix more than offsetting increased freight headwinds.

For second quarter Fiscal 2022, revenues are expected to increase approximately 20% to 22% in constant currency to last year. Foreign currency is expected to positively impact revenue growth by approximately 50 basis points.

Operating margin for the second quarter is expected in the range of 13.0% to 14.0% driven primarily by operating expense leverage. Gross margin is expected to be flat to up 20 basis points to last year, with average unit retail growth and favorable product mix partly offset by challenging compares over COVID-19-related mix benefits due to store closures from the prior year.

The full year Fiscal 2022 tax rate is now expected to be approximately 24%, assuming a continuation of current tax laws. Second quarter Fiscal 2022 tax rate is expected to be approximately 24% to 25%.

Conference Call

As previously announced, the Company will host a conference call and live online webcast today, Tuesday, August 3, 2021, at 9:00 A.M. Eastern. Listeners may access a live broadcast of the conference call on the Company’s investor relations website at http://investor.ralphlauren.com or by dialing 517-623-4963 or 800-857-5209. To access the conference call, listeners should dial in by 8:45 a.m. Eastern and request to be connected to the Ralph Lauren First Quarter 2022 conference call.

An online archive of the broadcast will be available by accessing the Company’s investor relations website at http://investor.ralphlauren.com. A telephone replay of the call will be available from 12:00 P.M. Eastern, Tuesday, August 3, 2021 through 6:00 P.M. Eastern, Tuesday, August 10, 2021 by dialing 203-369-3505 or 800-945-6271 and entering passcode 3941.

ABOUT RALPH LAUREN

Ralph Lauren Corporation (NYSE:RL) is a global leader in the design, marketing and distribution of premium lifestyle products in five categories: apparel, footwear & accessories, home, fragrances and hospitality. For more than 50 years, Ralph Lauren’s reputation and distinctive image have been developed across a wide range of products, brands, sales channels and international markets. The Company’s brand names, which include Ralph Lauren, Ralph Lauren Collection, Ralph Lauren Purple Label, Polo Ralph Lauren, Double RL, Lauren Ralph Lauren, Polo Ralph Lauren Children, and Chaps, among others, constitute one of the world’s most widely recognized families of consumer brands. For more information, go to http://investor.ralphlauren.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made from time to time by representatives of the Company, may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company’s future results and financial condition, revenues, store openings and closings, employee reductions, margins, expenses, earnings, and citizenship and sustainability goals and are indicated by words or phrases such as “anticipate,” “outlook,” “estimate,” “expect,” “project,” “believe,” “envision,” “goal,” “target,” “can,” “will,” and similar words or phrases. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed in or implied by such forward-looking statements. Forward-looking statements are based largely on the Company’s expectations and judgments and are subject to certain risks and uncertainties, many of which are unforeseeable and beyond our control. The factors that could cause actual results to materially differ include, among others: the loss of key personnel, including Mr. Ralph Lauren, or other changes in our executive and senior management team or to our operating structure, including those resulting from the recent reduction to our global workforce in connection with our long-term growth strategy, and our ability to effectively transfer knowledge and maintain adequate controls and procedures during periods of transition; the impact to our business resulting from the COVID-19 pandemic, including periods of reduced operating hours and capacity limits and/or temporary closure of our stores, distribution centers, and corporate facilities, as well as those of our wholesale customers, licensing partners, suppliers, and vendors, and potential changes to consumer behavior, spending levels, and/or shopping preferences, such as willingness to congregate in shopping centers or other populated locations; our ability to achieve anticipated operating enhancements and cost reductions from our restructuring plans, as well as the impact to our business resulting from restructuring-related charges, which may be dilutive to our earnings in the short term; the impact to our business resulting from potential costs and obligations related to the early or temporary closure of our stores or termination of our long-term, non-cancellable leases; our ability to maintain adequate levels of liquidity to provide for our cash needs, including our debt obligations, tax obligations, capital expenditures, and potential payment of dividends and repurchases of our Class A common stock, as well as the ability of our customers, suppliers, vendors, and lenders to access sources of liquidity to provide for their own cash needs; the impact to our business resulting from changes in consumers’ ability, willingness, or preferences to purchase discretionary items and luxury retail products, which tends to decline during recessionary periods, and our ability to accurately forecast consumer demand, the failure of which could result in either a build-up or shortage of inventory; the impact of economic, political, and other conditions on us, our customers, suppliers, vendors, and lenders, including business disruptions related to pandemic diseases such as COVID-19, civil and political unrest such as the recent protests in the U.S., diplomatic tensions between the U.S. and China, and inflation; the potential impact to our business resulting from the financial difficulties of certain of our large wholesale customers, which may result in consolidations, liquidations, restructurings, and other ownership changes in the retail industry, as well as other changes in the competitive marketplace, including the introduction of new products or pricing changes by our competitors; our ability to successfully implement our long-term growth strategy; our ability to continue to expand and grow our business internationally and the impact of related changes in our customer, channel, and geographic sales mix as a result, as well as our ability to accelerate growth in certain product categories; our ability to open new retail stores and concession shops, as well as enhance and expand our digital footprint and capabilities, all in an effort to expand our direct-to-consumer presence; our ability to respond to constantly changing fashion and retail trends and consumer demands in a timely manner, develop products that resonate with our existing customers and attract new customers, and execute marketing and advertising programs that appeal to consumers; our ability to effectively manage inventory levels and the increasing pressure on our margins in a highly promotional retail environment; our ability to continue to maintain our brand image and reputation and protect our trademarks; our ability to competitively price our products and create an acceptable value proposition for consumers; our ability to access capital markets and maintain compliance with covenants associated with our existing debt instruments; a variety of legal, regulatory, tax, political, and economic risks, including risks related to the importation and exportation of products which our operations are currently subject to, or may become subject to as a result of potential changes in legislation, and other risks associated with our international operations, such as compliance with the Foreign Corrupt Practices Act or violations of other anti-bribery and corruption laws prohibiting improper payments, and the burdens of complying with a variety of foreign laws and regulations, including tax laws, trade and labor restrictions, and related laws that may reduce the flexibility of our business; the potential impact to our business resulting from the imposition of additional duties, tariffs, taxes, and other charges or barriers to trade, including those resulting from trade developments between the U.S. and China, as well as the trade agreement reached in December 2020 between the United Kingdom and the European Union, and any related impact to global stock markets, as well as our ability to implement mitigating sourcing strategies; the potential impact to our business resulting from supply chain disruptions, including those caused by capacity constraints, closed factories and/or labor shortages (stemming from pandemic diseases, labor disputes, strikes, or otherwise), scarcity of raw materials, and port congestion, which could result in inventory shortages and lost sales; the potential impact to our business resulting from increases in the costs of raw materials, transportation, and labor, including wages, healthcare, and other benefit-related costs; our ability and the ability of our third-party service providers to secure our respective facilities and systems from, among other things, cybersecurity breaches, acts of vandalism, computer viruses, ransomware, or similar Internet or email events; our efforts to successfully enhance, upgrade, and/or transition our global information technology systems and digital commerce platforms; the potential impact to our business if any of our distribution centers were to become inoperable or inaccessible; the potential impact on our operations and on our suppliers and customers resulting from man-made or natural disasters, including pandemic diseases such as COVID-19, severe weather, geological events, and other catastrophic events; changes in our tax obligations and effective tax rate due to a variety of factors, including potential changes in U.S. or foreign tax laws and regulations, accounting rules, or the mix and level of earnings by jurisdiction in future periods that are not currently known or anticipated; our exposure to currency exchange rate fluctuations from both a transactional and translational perspective; the impact to our business of events of unrest and instability that are currently taking place in certain parts of the world, as well as from any terrorist action, retaliation, and the threat of further action or retaliation; the potential impact to the trading prices of our securities if our Class A common stock share repurchase activity and/or cash dividend payments differ from investors’ expectations; our ability to maintain our credit profile and ratings within the financial community; our intention to introduce new products or brands, or enter into or renew alliances; changes in the business of, and our relationships with, major wholesale customers and licensing partners; our ability to achieve our goals regarding environmental, social, and governance practices, including those related to our human capital; our ability to make strategic acquisitions and successfully integrate the acquired businesses into our existing operations; and other risk factors identified in the Company’s Annual Report on Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

RALPH LAUREN CORPORATION

CONSOLIDATED BALANCE SHEETS

Prepared in accordance with U.S. Generally Accepted Accounting Principles

(Unaudited)

June 26,

2021

March 27,

2021

June 27,

2020

(millions)

ASSETS

Current assets:

Cash and cash equivalents

$

2,596.4

$

2,579.0

$

2,451.3

Short-term investments

368.0

197.5

259.3

Accounts receivable, net of allowances

367.2

451.5

108.7

Inventories

803.0

759.0

773.2

Income tax receivable

57.8

54.4

63.9

Prepaid expenses and other current assets

185.8

166.6

200.6

Total current assets

4,378.2

4,208.0

3,857.0

Property and equipment, net

974.6

1,014.0

945.8

Operating lease right-of-use assets

1,181.3

1,239.5

1,464.1

Deferred tax assets

290.2

283.9

309.5

Goodwill

937.8

934.6

921.9

Intangible assets, net

116.6

121.1

136.1

Other non-current assets

83.2

86.4

106.0

Total assets

$

7,961.9

$

7,887.5

$

7,740.4

LIABILITIES AND EQUITY

Current liabilities:

Current portion of long-term debt

$

498.7

$

$

299.9

Accounts payable

370.3

355.9

144.2

Current income tax payable

60.9

50.6

70.9

Current operating lease liabilities

284.1

302.9

314.7

Accrued expenses and other current liabilities

899.3

875.4

657.2

Total current liabilities

2,113.3

1,584.8

1,486.9

Long-term debt

1,135.0

1,632.9

1,630.1

Long-term operating lease liabilities

1,231.1

1,294.5

1,517.7

Non-current income tax payable

118.7

118.7

132.7

Non-current liability for unrecognized tax benefits

97.4

91.4

91.7

Other non-current liabilities

548.7

560.8

325.8

Total liabilities

5,244.2

5,283.1

5,184.9

Equity:

Common stock

1.3

1.3

1.3

Additional paid-in-capital

2,685.5

2,667.1

2,609.5

Retained earnings

5,987.1

5,872.9

5,866.3

Treasury stock, Class A, at cost

(5,844.9

)

(5,816.1

)

(5,812.3

)

Accumulated other comprehensive loss

(111.3

)

(120.8

)

(109.3

)

Total equity

2,717.7

2,604.4

2,555.5

Total liabilities and equity

$

7,961.9

$

7,887.5

$

7,740.4

Net Cash & Investments(a)

$

1,330.7

$

1,143.6

$

780.6

Cash & Investments(a)

2,964.4

2,776.5

2,710.6

_____________

(a) The Company’s investments were all classified as short-term for all periods presented.

 

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Prepared in accordance with U.S. Generally Accepted Accounting Principles

(Unaudited)

Three Months Ended

June 26,

2021

June 27,

2020

(millions, except per share data)

North America

$

662.1

$

165.1

Europe

354.9

120.7

Asia

288.2

171.9

Other non-reportable segments

71.1

29.8

Net revenues

1,376.3

487.5

Cost of goods sold

(408.2

)

(138.8

)

Gross profit

968.1

348.7

Selling, general, and administrative expenses

(728.2

)

(507.6

)

Impairment of assets

(18.6

)

(2.1

)

Restructuring and other charges

(0.7

)

(7.0

)

Total other operating expenses, net

(747.5

)

(516.7

)

Operating income (loss)

220.6

(168.0

)

Interest expense

(13.3

)

(9.6

)

Interest income

1.8

2.9

Other income, net

0.9

2.1

Income (loss) before income taxes

210.0

(172.6

)

Income tax benefit (provision)

(45.3

)

44.9

Net income (loss)

$

164.7

$

(127.7

)

Net income (loss) per common share:

Basic

$

2.23

$

(1.75

)

Diluted

$

2.18

$

(1.75

)

Weighted average common shares outstanding:

Basic

73.8

73.1

Diluted

75.4

73.1

Dividends declared per share

$

0.6875

$

 

RALPH LAUREN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Prepared in accordance with U.S. Generally Accepted Accounting Principles

(Unaudited)

Three Months Ended

June 26,

2021

June 27,

2020

(millions)

Cash flows from operating activities:

Net income (loss)

$

164.7

$

(127.7

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization expense

57.2

63.7

Deferred income tax expense (benefit)

3.8

(66.9

)

Non-cash stock-based compensation expense

18.4

15.1

Non-cash impairment of assets

18.6

2.1

Bad debt expense reversals

(1.0

)

(16.5

)

Other non-cash charges

1.1

Changes in operating assets and liabilities:

Accounts receivable

81.6

186.3

Inventories

(67.7

)

(29.0

)

Prepaid expenses and other current assets

(20.3

)

(37.4

)

Accounts payable and accrued liabilities

6.1

(119.2

)

Income tax receivables and payables

4.7

35.2

Deferred income

(0.8

)

0.3

Other balance sheet changes

(18.8

)

23.7

Net cash provided by (used in) operating activities

247.6

(70.3

)

Cash flows from investing activities:

Capital expenditures

(28.2

)

(21.3

)

Purchases of investments

(368.3

)

(63.6

)

Proceeds from sales and maturities of investments

197.7

301.9

Other investing activities

(0.6

)

3.7

Net cash provided by (used in) investing activities

(199.4

)

220.7

Cash flows from financing activities:

Repayments of credit facility borrowings

(475.0

)

Proceeds from the issuance of long-term debt

1,241.9

Payments of finance lease obligations

(5.5

)

(1.6

)

Payments of dividends

(49.8

)

Repurchases of common stock, including shares surrendered for tax withholdings

(28.8

)

(33.9

)

Other financing activities

(8.5

)

Net cash provided by (used in) financing activities

(34.3

)

673.1

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

3.3

7.6

Net increase in cash, cash equivalents, and restricted cash

17.2

831.1

Cash, cash equivalents, and restricted cash at beginning of period

2,588.0

1,629.8

Cash, cash equivalents, and restricted cash at end of period

$

2,605.2

$

2,460.9

 

RALPH LAUREN CORPORATION

SEGMENT INFORMATION

(Unaudited)

Three Months Ended

June 26,

2021

June 27,

2020

(millions)

Net revenues:

North America

$

662.1

$

165.1

Europe

354.9

120.7

Asia

288.2

171.9

Other non-reportable segments

71.1

29.8

Total net revenues

$

1,376.3

$

487.5

Operating income (loss):

North America

$

186.3

$

(24.8

)

Europe

94.5

(16.9

)

Asia

60.4

10.1

Other non-reportable segments

35.4

0.9

376.6

(30.7

)

Unallocated corporate expenses

(155.3

)

(130.3

)

Unallocated restructuring and other charges

(0.7

)

(7.0

)

Total operating income (loss)

$

220.6

$

(168.0

)

 

RALPH LAUREN CORPORATION

CONSTANT CURRENCY FINANCIAL MEASURES

(Unaudited)

Comparable Store Sales Data

Three Months Ended

June 26, 2021

% Change

Constant Currency

North America:

Digital commerce

51

%

Excluding digital commerce

278

%

Total North America

176

%

Europe:

Digital commerce

23

%

Excluding digital commerce

154

%

Total Europe

98

%

Asia:

Digital commerce

42

%

Excluding digital commerce

43

%

Total Asia

43

%

Total Ralph Lauren Corporation

108

%

Operating Segment Net Revenues Data

Three Months Ended

% Change

June 26,

2021

June 27,

2020

As

Reported

Constant

Currency

(millions)

North America

$

662.1

$

165.1

300.9

%

300.1

%

Europe

354.9

120.7

194.1

%

179.0

%

Asia

288.2

171.9

67.7

%

60.6

%

Other non-reportable segments

71.1

29.8

138.4

%

138.2

%

Net revenues

$

1,376.3

$

487.5

182.3

%

175.8

%

 

RALPH LAUREN CORPORATION

NET REVENUES BY SALES CHANNEL

(Unaudited)

Three Months Ended

June 26, 2021

June 27, 2020

North

America

Europe

Asia

Other

Total

North

America

Europe

Asia

Other

Total

(millions)

Sales Channel:

Retail

$

412.2

$

170.8

$

272.8

$

26.8

$

882.6

$

142.6

$

79.2

$

166.5

$

6.5

$

394.8

Wholesale

249.9

184.1

15.4

5.0

454.4

22.5

41.5

5.4

0.5

69.9

Licensing

39.3

39.3

22.8

22.8

Net revenues

$

662.1

$

354.9

$

288.2

$

71.1

$

1,376.3

$

165.1

$

120.7

$

171.9

$

29.8

$

487.5

 

RALPH LAUREN CORPORATION

GLOBAL RETAIL STORE NETWORK

(Unaudited)

June 26, 2021

June 27, 2020

North America

Ralph Lauren Stores

39

41

Polo Factory Stores

194

189

Total Directly Operated Stores

233

230

Concessions

1

2

Europe

Ralph Lauren Stores

34

31

Polo Factory Stores

60

64

Total Directly Operated Stores

94

95

Concessions

29

29

Asia

Ralph Lauren Stores

82

68

Polo Factory Stores

73

68

Total Directly Operated Stores

155

136

Concessions

617

619

Other

Club Monaco Stores

72

Club Monaco Concessions

4

Global Directly Operated Stores and Concessions

Ralph Lauren Stores

155

140

Polo Factory Stores

327

321

Club Monaco Stores

72

Total Directly Operated Stores

482

533

Concessions

647

654

Global Licensed Stores

Total Licensed Stores

141

273

 

RALPH LAUREN CORPORATION

RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES

(Unaudited)

Three Months Ended

June 26, 2021

As

Reported

Total

Adjustments(a)(b)

As

Adjusted

(millions, except per share data)

Net revenues

$

1,376.3

$

$

1,376.3

Gross profit

968.1

(8.0

)

960.1

Gross profit margin

70.3

%

69.8

%

Total other operating expenses, net

(747.5

)

18.4

(729.1

)

Operating expense margin

54.3

%

53.0

%

Operating income

220.6

10.4

231.0

Operating margin

16.0

%

16.8

%

Income before income taxes

210.0

10.4

220.4

Income tax provision

(45.3

)

(2.7

)

(48.0

)

Effective tax rate

21.6

%

21.8

%

Net income

$

164.7

$

7.7

$

172.4

Net income per diluted common share

$

2.18

$

2.29

Weighted average common shares outstanding – Diluted

75.4

75.4

SEGMENT INFORMATION – OPERATING INCOME:

North America

$

186.3

$

(8.0

)

$

178.3

Operating margin

28.1

%

26.9

%

Europe

94.5

(0.9

)

93.6

Operating margin

26.6

%

26.4

%

Asia

60.4

1.1

61.5

Operating margin

20.9

%

21.3

%

Other non-reportable segments

35.4

35.4

Operating margin

49.8

%

49.8

%

Unallocated corporate expenses and restructuring & other charges

(156.0

)

18.2

(137.8

)

Total operating income

$

220.6

$

10.4

$

231.0

RALPH LAUREN CORPORATION

RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (Continued)

(Unaudited)

Three Months Ended

June 27, 2020

As

Reported

Total

Adjustments(a)(c)

As

Adjusted

(millions, except per share data)

Net revenues

$

487.5

$

$

487.5

Gross profit

348.7

1.3

350.0

Gross profit margin

71.5

%

71.8

%

Total other operating expenses, net

(516.7

)

(7.4

)

(524.1

)

Operating expense margin

106.0

%

107.5

%

Operating loss

(168.0

)

(6.1

)

(174.1

)

Operating margin

(34.5

%)

(35.7

%)

Loss before income taxes

(172.6

)

(6.1

)

(178.7

)

Income tax benefit

44.9

0.6

45.5

Effective tax rate

26.0

%

25.5

%

Net loss

$

(127.7

)

$

(5.5

)

$

(133.2

)

Net loss per diluted common share

$

(1.75

)

$

(1.82

)

Weighted average common shares outstanding – Diluted

73.1

73.1

SEGMENT INFORMATION – OPERATING INCOME (LOSS):

North America

$

(24.8

)

$

(15.3

)

$

(40.1

)

Operating margin

(15.0

%)

(24.3

%)

Europe

(16.9

)

(1.0

)

(17.9

)

Operating margin

(14.0

%)

(14.8

%)

Asia

10.1

2.6

12.7

Operating margin

5.9

%

7.4

%

Other non-reportable segments

0.9

0.6

1.5

Operating margin

3.0

%

5.0

%

Unallocated corporate expenses and restructuring & other charges

(137.3

)

7.0

(130.3

)

Total operating loss

$

(168.0

)

$

(6.1

)

$

(174.1

)

 

RALPH LAUREN CORPORATION

RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES (Continued)

(Unaudited)

Three Months Ended

June 29, 2019

As

Reported

Total

Adjustments(a)(d)

As

Adjusted

(millions, except per share data)

Net revenues

$

1,428.8

$

$

1,428.8

Gross profit

920.8

0.6

921.4

Gross profit margin

64.4

%

64.5

%

Total other operating expenses, net

(777.5

)

30.8

(746.7

)

Operating expense margin

54.4

%

52.3

%

Operating income

143.3

31.4

174.7

Operating margin

10.0

%

12.2

%

Income before income taxes

146.6

31.4

178.0

Income tax provision

(29.5

)

(7.0

)

(36.5

)

Effective tax rate

20.1

%

20.5

%

Net income

$

117.1

$

24.4

$

141.5

Net income per diluted common share

$

1.47

$

1.77

Weighted average common shares outstanding – Diluted

79.9

79.9

SEGMENT INFORMATION – OPERATING INCOME:

North America

$

150.1

$

$

150.1

Operating margin

20.9

%

20.9

%

Europe

79.4

0.1

79.5

Operating margin

22.0

%

22.0

%

Asia

48.1

0.5

48.6

Operating margin

18.6

%

18.8

%

Other non-reportable segments

32.9

32.9

Operating margin

36.5

%

36.5

%

Unallocated corporate expenses and restructuring & other charges

(167.2

)

30.8

(136.4

)

Total operating income

$

143.3

$

31.4

$

174.7

 

RALPH LAUREN CORPORATION

FOOTNOTES TO RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES

 

(a)

Adjustments for inventory-related charges (benefits) are recorded within cost of goods sold in the consolidated statements of operations. Adjustments for COVID-19-related bad debt expense (benefit) is recorded within selling, general, and administrative (“SG&A”) expenses in the consolidated statements of operations. Adjustments for impairment-related charges are recorded within impairment of assets in the consolidated statements of operations. Adjustments for all other charges are recorded within restructuring and other charges in the consolidated statements of operations.

 

(b)

Adjustments for the three months ended June 26, 2021 include (i) net charges of $18.5 million recorded in connection with the Company’s restructuring activities, primarily consisting of restructuring charges, impairment of assets, and accelerated stock-based compensation expense; (ii) benefit of $8.0 million related to COVID-19-related inventory adjustments; (iii) benefit of $0.9 million related to COVID-19-related bad debt reserve adjustments; and (iv) other charges of $0.8 million primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired.

 

(c)

Adjustments for the three months ended June 27, 2020 include (i) benefit of $16.5 million related to COVID-19-related bad debt reserve adjustments; (ii) other charges of $4.4 million primarily related to rent and occupancy costs associated with certain previously exited real estate locations for which the related lease agreements have not yet expired; and (iii) charges of $6.0 million recorded in connection with the Company’s restructuring activities, primarily consisting of restructuring charges, impairment of assets, and inventory-related charges.

 

(d)

Adjustments for the three months ended June 29, 2019 include (i) other charges of $22.6 million primarily related to the charitable donation of the net cash proceeds received from the sale of the Company’s corporate jet, and rent and occupancy costs associated with previously exited real estate locations for which the related lease agreements have not yet expired; and (ii) charges of $8.8 million recorded in connection with the Company’s restructuring plans, consisting of restructuring charges, impairment of assets, inventory-related charges.

NON-U.S. GAAP FINANCIAL MEASURES

Because Ralph Lauren Corporation is a global company, the comparability of its operating results reported in U.S. Dollars is affected by foreign currency exchange rate fluctuations because the underlying currencies in which it transacts change in value over time compared to the U.S. Dollar. Such fluctuations can have a significant effect on the Company’s reported results. As such, in addition to financial measures prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”), the Company’s discussions often contain references to constant currency measures, which are calculated by translating current-year and prior-year reported amounts into comparable amounts using a single foreign exchange rate for each currency. The Company presents constant currency financial information, which is a non-U.S. GAAP financial measure, as a supplement to its reported operating results. The Company uses constant currency information to provide a framework for assessing how its businesses performed excluding the effects of foreign currency exchange rate fluctuations. Management believes this information is useful to investors for facilitating comparisons of operating results and better identifying trends in the Company’s businesses. The constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, the Company’s operating performance measures calculated in accordance with U.S. GAAP.

This earnings release also includes certain other non-U.S. GAAP financial measures relating to the impact of charges and other items as described herein. The Company uses non-U.S. GAAP financial measures, among other things, to evaluate its operating performance and to better represent the manner in which it conducts and views its business. The Company believes that excluding items that are not comparable from period to period helps investors and others compare operating performance between two periods. While the Company considers non-U.S. GAAP measures useful in analyzing its results, they are not intended to replace, nor act as a substitute for, any presentation included in the consolidated financial statements prepared in conformity with U.S. GAAP, and may be different from non-U.S. GAAP measures reported by other companies.

Adjustments made during the fiscal periods presented include charges recorded in connection with the Company’s restructuring activities, as well as certain other charges (benefits) associated with other non-recurring events, as described in the footnotes to the non-U.S. GAAP financial measures above. The income tax benefit (provision) has been adjusted for the tax-related effects of these charges, which were calculated using the respective statutory tax rates for each applicable jurisdiction. Included in this earnings release are reconciliations between the non-U.S. GAAP financial measures and the most directly comparable U.S. GAAP measures before and after these adjustments.

Additionally, the Company’s full year Fiscal 2022 and second quarter guidance excludes certain anticipated restructuring-related and other charges. The Company is not able to provide a full reconciliation of these non-U.S. GAAP financial measures to U.S. GAAP because certain material items that impact these measures, such as the timing and exact amount of charges related to its restructuring plans, have not yet occurred or are out of the Company’s control. Accordingly, a reconciliation of the Company’s non-U.S. GAAP based financial measure guidance to the most directly comparable U.S. GAAP measures is not available without unreasonable effort. However, the Company has identified the estimated impact of certain items excluded from its financial outlook. Specifically, the Company’s financial outlook excludes estimated pretax charges of approximately $45 million to $95 million related to its Fiscal 2021 Strategic Realignment Plan that have not yet been incurred.


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Progenity, Inc. (PROG) Q2 2021 Earnings Call Transcript https://after-hours.org/progenity-inc-prog-q2-2021-earnings-call-transcript/ Thu, 19 Aug 2021 09:11:58 +0000 https://after-hours.org/?p=3017 Image source: The Motley Fool. Progenity, Inc. (NASDAQ:PROG) Q2 2021 Earnings Call Aug 12, 2021, 4:30 p.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Welcome to the Progenity second-quarter 2021 earnings call. [Operator instructions] I will now turn the call over to Robert Uhl, managing director with Westwicke ICR, Progenity’s Investor Relations […]]]>

Image source: The Motley Fool.

Progenity, Inc. (NASDAQ:PROG)
Q2 2021 Earnings Call
Aug 12, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to the Progenity second-quarter 2021 earnings call. [Operator instructions] I will now turn the call over to Robert Uhl, managing director with Westwicke ICR, Progenity’s Investor Relations firm. Thank you. Please go ahead.

Robert UhlManaging Director, ICR

Thank you, operator. Good afternoon and welcome to Progenity’s second-quarter 2021 financial results conference call. Joining me on the call are Dr. Harry Stylli, chairman and chief executive officer; and Eric d’Esparbes, chief financial officer.

Before I turn the call over to Dr. Stylli, I would like to remind you that today’s call will include forward-looking statements within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our quarterly report on Form 10-Q that we will file later today and our subsequent periodic reports filed with the SEC, which will all be available on our website in the investor section. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control. Please note that the actual results could differ materially from those projected in any forward-looking statement.

For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, as well as risks related to our business, please see our periodic reports filed with the SEC. A slide deck with some supplemental information is also now on the website, but it will not be directly referenced by the speakers on the call today. With that, I will now turn the call over to Dr. Harry Stylli, chairman and CEO of Progenity.

Harry StylliChairman and Chief Executive Officer

Thank you, Robert, and thank you all for joining us this afternoon. In the second quarter, the company initiated a transformation directed at materially reducing its burn rate, was accelerating the transition to an innovation-led biotech company focused on its own delivery of biomolecules and STI IVD platforms. Progenity also successfully completed the PRO-104 validation study for its Preecludia RSA. In parallel, advanced dose single-molecule detection platform and is committed to making technical-commercial progress with these programs, including with partners.

We also continue to explore various financing options including generating nondilutive capital. Eric, our CFO will shortly elaborate on our financial operating performance. First, we recently announced the successful completion of the validation study PRO-104 for our Preecludia rule-out test for preeclampsia, as noted previously Preecludia achieved the primary hazard ratio endpoint of the study protocol and demonstrated strong performance. The results of our validation study are currently being drafted by the independent principal investigators for submission to a peer-reviewed journal, their results — as a result, we are limited in our ability to provide more detail regarding specific results here.

However, I can assure you that we are really pleased that the test performance as intended to be used clinically was consistent with what we observed in a PRO-129 verification and pre-validation set. The performance gives Preecludia the potential to transform Patient Management globally by enabling physicians to rule out preeclampsia in women with signs and symptoms of preeclampsia. Further, Progenity just recently received an important panel allowance for one of the key essays in our novel Preecludia test. This constitutes further strengthening of our growing Preecludia IP portfolio.

The Preecludia test is a multianalyte immunodiagnostic laboratory-developed test that is operationally ready for commercialization. As a reminder, preeclampsia is the second most common cause of maternal mortality in the US, with more than 700,000 women presenting each year with signs and symptoms of possible preeclampsia. The most effective treatment for preeclampsia is typically delivery that is most often premature. Preeclampsia is a global challenge and an effective operator-independent test that aids in the management of this complex disorder is simply not currently available.

Preecludia also has potential as an IBD immunodiagnostic kit, which can better serve the global community. Our preference is to identify commercial partners that can facilitate physician-patient access and reimbursement in partnership with us in the US market and do the same for the CEE IBD for the global markets. I could not be more excited about the potential for this test to positively change clinical practice in the management of preeclampsia and to generate economic benefit to the health system. I want to take this opportunity to congratulate the team and our other stakeholders for a successful Preecludia validation study.

Plus we continue to support the Preecludia development at this stage of our transformation. We are prioritizing our capital allocation to advancing our complimentary Oral Biotherapeutics Drug System or OBDS, followed by a Drug Delivery System or DDS platforms. We expect this year to generate key preclinical and clinical feasibility data, especially for our drug pipeline primarily with our prototype autonomous devices, and to further advance our platform technology. As a reminder, we have effectively contracted the manufacturer of APIs, including adalumimab.

Let’s start with our Oral Biotherapeutics program. The goal of this program is to achieve oral delivery and to maximize systemic distribution of Biotherapeutics especially monoclonal antibodies, but also other proteins, peptides, nucleic acids, and potentially vaccines, as the GI tract is the host to the majority of the immune system. In toto, we are targeting a vast $250 billion market that is primed for these oral delivery solutions. During the second-quarter 2021, we initiated preclinical studies of our lead candidates PGN-OB1 adalumimab and monoclonal which is subject to the BLA pathway and PGN-OB2, they are glutide, peptide, likely the fiber 5B2 pathway utilizing for the first time our prototype autonomous OBDS in a swine model of our own design.

The goal of these studies is to demonstrate bioavailability of our leads and utilize drug candidates within our autonomous OBDS and define its operating parameters and that of the preclinical models. Initial data with the prototype OBDS is very promising and supports the potential for the OBDS to achieve industry-leading bioavailability for proteins, peptides, and other biomolecules. Despite expected normal performance variability at this early stage of development, we recently demonstrated in a swine model, a significant drug was detected and approximately half the animals in a test group achieving an average bioavailability of approximately 15% to a maximum of 44% of IV for adalumimab following a single dose, highlighting the vast potential for this program. This is an unprecedented performance for a monoclonal antibody.

We continue to make rapid progress in tweaking the prototype delivery platform, including formulations, refining our animal models, and developing our understanding of likely performance in humans. We believe that an average bioavailability of around 10% to 15% of IV with repeat dosing will prove satisfactory for a large number of biomolecules. We anticipate that we will meet almost slightly exceed this range. We believe the OBDS platform can number one help improve patient compliance and lower IV infusion costs.

Two, help expand the market for GOP agonists and other drugs across a range of chronic use indications. Three, held by therapeutic such monoclonal has become more competitive with small molecule substitutes. And finally, we have the potential to target and treat a range of pathologies, especially liver diseases. Now strategies to advance around pipeline while continuing to partner with third parties leveraging their drug candidates and resources to meet the OBDS a leader in new oral delivery of Biotherapeutics.

As we are using no drugs but establish safety and efficacy profiles. We believe we should be able to generate compelling bioavailability data in animal models and provide clinical proof of concept with first in man studies. In parallel, our first two OBDS partnerships with major pharma are advancing as expected. While the OBDS is designed to achieve oral delivery and to maximize systemic distribution of Biotherapeutics.

The DDS is designed to treat GI localized disease with minimal systemic breakthrough. The goal of this program is to deliver and utilize high-dose pharmaceuticals to specific locations along the GI tract, initially to treat inflammatory bowel disease, or IBD. We are developing drug-device combination products that deliver proprietary solubilized formulations of drugs directly to the site of disease in the GI tract, thereby maximizing the available dose in tissue and achieving pan colonic distribution. We are first targeting the estimated $15 billion IBD market with our two new drugs, PGN-001 adalumimab, a monoclonal antibody, and PGN-600 tofacitinib, a small molecule normally absorbed in the stomach and the upper GI tract.

With our initial focus being ulcerative colitis or UC. Whilst the novel route of administration by the adalumimab is through the BLA regulatory pathway, we believe that tofacitinib device combination can exploit the 505-B2 pathway and allow us to take advantage of the primaries data and potentially benefit from a relatively short path to a commercial asset. We continue to believe we have the potential with this platform to achieve rapid induction, superior clinical remission rates, and reduce safety events for the treatment of IBD and colitis. As a reminder, during the first quarter, we completed our first clinical study with the prototype autonomous DDS successfully evaluated capsule safety, clogging, and tolerability in the gastrointestinal tract of 12 normal healthy volunteers.

No safety issues were reported. By specifically targeting the segment of the GI tract with disease burden, we have the potential to maximize drug exposure at the disease sites that minimize systemic exposure and off-target organ effects. We also completed during that period, a preclinical study evaluating the safety, tolerability, and PKPD effects of a seven-day administration in dogs of PGN-600 solubilized tofacitinib delivered by DDS at doses of 25 mg or 10 mg per day with direct comparison to a standard orally administered tofacitinib tablet at 10 mg day over a week. We were able to show that DDS can function as intended in the majority of cases and achieve tissue tofacitinib levels and tissue to plasma ratios of tofacitinib along the length of the colon.

And these were at least 25 to 50 times higher respectively with PGN-600 at 10 mg daily compared to the standard oral tablet formulation at the same dose. These results demonstrate that PGN-600 proprietary liquid formulation and targeted delivery can achieve pan colonial distribution and facilitate mucosal penetration. We made further progress during the second quarter in an ongoing clinical feasibility study in patients with ulcerative colitis, using the monoclonal BioTherapeutics Humira delivered by enema, which are both proxies for our PGN-001 adalumimab and our DDS platform. The first four subjects have completed the dosage regimen, and initial results are quite promising.

Next month, we expect to finalize the design of the first human feasibility studies delivering Humira tomorrow with the DDS, as well as the design of first human feasibility study with PGN-600. With both clinical feasibility studies anticipated to initiate in first half and 2022 pending IRB approval. You’ll hear more about this study likely in the September time frame. The Crohn’s & Colitis Foundation is also helping fund the development of the DDS for the treatment of IBD.

And we recently published a peer-reviewed article regarding the DDS. We believe that DDS platform momentarily advanced the treatment of GI disease initially for IBD and UC. Our strategy begins by transforming established drugs with known efficacy and safety profiles but has the potential to materially enhance any compatible drug directed at treating GI-localized disease, and in this instance, enables new effective IBD treatment regimens such as rapid induction and extending to drug combination therapies. While we focus on a broad pipeline of delivery platforms, we have moved the RSS and PIL Dx to primarily engineering development of second-generation pills to support larger-scale manufacturing.

And with this focus, we have limited preclinical studies at this time. We have discussed the SEBA application for PIL Dx in the past and continue to be excited by its vast potential. We also are evaluating the utility of the RSS and PIL Dx in IBD. Data from our studies and from existing literature illustrate that TNF levels in the lumen and mucosa of IBD patients may vary tremendously from patient to patient, and over time.

Further, new pathways for inflammation could supersede, for example, TNF as a mediator. We believe that we can measure TNF and other cytokines in situ using the RSS or PIL Dx, we can optimize as a consequence, we can optimize patient selection for clinical studies establish a more precise dosing regimen, and help with patient monitoring for disease progression. We believe that such a capability may further contribute to superior response rate for our drugs and the ability for physicians to most closely monitor the patient for disease progression. Completing innovation pipeline update with our single-molecule detection platform, we recently established its coefficient of variation using genomic DNA has approximately 0.5% which is supportive of a NIPTSA performance equivalent to next-generation sequencing.

We soon in terms of report on performance for detecting T2118 to 13 aneuploid and successful and preference today is the partner the platform, especially within NIPT test providers, we continue to believe a single molecule detection platform has the potential to reduce NIPT direct codes by up to 50% and achieve equivalent performance to traditional next-generation sequencing. Should also be noted that this platform is expected to be capable of detecting and counting specific DNA, RNA, epigenetic as well as protein targets with high sensitivity and low costs. As such, the platform may prove ideal for liquid biopsy applications in oncology. And now we’ll discuss our progress with the operational performance of our business transformation.

As we mentioned in our corporate update in June, we officially closed out another commercial laboratory and refocused our resources toward our innovation pipeline. Whilst business closures are difficult on a number of levels, the changes we implemented have already achieved a $97 million reduction in our annual operating expenses run rate and support improved control of our burn rate. And we will provide more details later on this call. As I mentioned earlier, we prioritize our capital allocation toward our drug-device platform progress of secondarily toward a refinement of our Preecludia tests and single-molecule detection platforms.

As you can see, we are on track to significantly moderate our cash burn requirements, gain considerable more control over a cash burn rate. And we will continue to pursue partnerships and asset divestitures that have the potential to strengthen our balance sheet or result in risk sharing. These goals when fully realized will extend our runway materially and reduce our dependency on the capital markets. In parallel, Avero affiliate laboratory operations continue to perform while we explore potential divestiture of that operation to generate non-dilutive capital.

Avero’s business is performing well in terms of volume demand, and we will update you when we have new developments. We may also choose to continue to operate the Avero business and explore its OB-GYN channel for Preecludia and nonsequencing NIPT if that proves to be optimal. I am pleased to share that we settled our lawsuit with Natera through a cashless agreement, we are pleased to have resolved the dispute amicably, and that we are able to avoid further legal costs and diversion of resources. In summary, our GI innovation pipeline is progressing well both the OBDS and the DDS now available as prototype autonomous devices that are enabling key studies to be performed and advance our programs and partnership opportunities.

I’m also very excited about the successful outcome from the Preecludia PRO-104 validation study and results, which we expect to be published as soon as practicable. We are also advancing our single-molecule platform and expect to have additional updates soon. In addition to the material reduction in operating expenses and tighter control of capital utilization, we anticipate multiple key catalysts this year and beyond. With that, I’ll now turn the call over to Eric d’Esparbes for a discussion of our financial results for the second quarter of 2021.

Eric d’EsparbesChief Financial Officer

Thank you, Harry, and good afternoon, everyone. I’ll provide a brief overview of our financial results and also invite you to review our second-quarter financial release. And our 10-Q for a more detailed description. As we progress in a company’s transition, the shift away from molecular testing operations will change our revenues profile, and as a result, our financial picture.

Consequently, we are also shifting our focus from revenues to concentrate on managing cash burn, and more precisely ensuring that we completed our company’s transformation and optimize capital allocation toward our innovation pipeline. I’m happy to confirm that we’ve now secured a reduction of $97 million in net operating expenses annual run rate to be realized in the second half of the year. And I’ve also line of sight on an additional $50 million reduction between now and the end of Q4 2021. When the remaining lab activities that are currently still required to support the operations of our Avero affiliate, are expected to be eliminated, assuming that we can successfully monetize the asset.

In the interim, we are aiming to maximize Avero’s revenue performance. While we reported $18.7 million in revenue in the second quarter of 2021 from discontinued operations, $8.6 million of which came from Avero, our focus is now shifting to our operating and SG&A cost management activities. Total operating expenses were $46 million in a second quarter of 2021. And as we gradually reduce spend associated with our lab operations during the second half, we expect total operating expenses before stock-based compensation expenses to reach less than $25 million by the fourth quarter.

More importantly, our monthly run-rate operating expenses before stock-based compensation expenses are expected to reduce from a $15 million level during the first half of 2021 to reach less than $7 million by the end of the fourth quarter. The majority of which to be allocated to R&D, illustrating the benefit of the company’s focus on our innovation pipeline. Of the spend profile sales and marketing expenses, mostly presented in discontinued operations are expected to go from approximately $28 million in the first half of 2021 to approximately $8 million in the second half as we continue to support our Avero commercial operations, and will eliminate if we completed the divestiture of our lab operations. G&A expenses in the second quarter were $20.7 million.

And before stock-based compensation expenses are expected to be approximately $25 million in Q3 as we have absorbed the company transition costs during that quarter, and reduced to $11 million in Q4 in line with our overall cost reduction profile. R&D expenses were $13.4 million in the second quarter and are expected to remain generally at current levels, but gradually shift toward our precision medicine drug programs in the later part of 2021 and into ’22 as they become the central focus of our capital allocation. But we also expect to maintain a stage gated data-driven approach to new capital commitments. In parallel, we expect to gradually reduce and shift our women’s health program R&D spending from the completion of existing studies and development toward partnership support activities including reimbursement.

As a result, our R&D expenses before stock-based compensation expenses are expected to be approximately $12 million in Q3, and $10 million in Q4. During the second quarter, we raised $40 million in gross proceeds through a private placement and had a cash balance of $67 million at the end of the second quarter. With that, I will now turn the call back over to Harry.

Harry StylliChairman and Chief Executive Officer

Thank you, Eric. Our transformation is advancing as expected at this juncture and we have already realized that $97 million reduction in operating expenses run rate with more on the way soon. We are sharpening up focus on disrupting the biomolecules market through oral delivery via the OBDS and potentially achieve rapid induction and superior response rates and clear safety issues with the DDS platform and the treatment of IBD colitis. We recently received funding from the Crohn’s & Colitis foundation to advance the DDS and have published on the platform’s potential.

We have two complementary, disruptive, broad platforms that will power and differentiate our clinical power environment, and which we believe will provide sufficient optionality for new partnerships with pharma, especially as we generate key data. I am also especially proud of our collective efforts and successfully advancing Preecludia through the PRO-104 validation study. Test for preeclampsia had proven elusive until development of Preecludia which promises to be a powerful tool in helping physicians manages patients with signs and symptoms of preeclampsia. And, as a consequence, potentially generate a multi-billion dollar market in the US alone and disrupt the reproductive health channel.

We now have the opportunity to optimize this commercialization in the US and global markets, ideally through partnerships. Future milestones as we discussed today, and as presented in our supporting materials are expected to enhance value as we make progress with our innovation pipeline. A number of our innovations address past markets and in certain instances have the potential to be commercially transformative. We’re excited by the continued reduction of our cash burn rate near some potential and the new focus and optionality we provide for future value creation.

So with that operator, we are now ready for questions.

Questions & Answers:

Operator

Understood. [Operator instructions] Your first question comes from the line of Steven Mah from Piper Sandler. Your line is open.

Steven MahPiper Sandler — Analyst

Great. Thanks, operator, and thanks for taking the questions.

Harry StylliChairman and Chief Executive Officer

Thanks, Steven.

Eric d’EsparbesChief Financial Officer

Hey, Steven.

Steven MahPiper Sandler — Analyst

Hey. How are you doing? Yes. So just a few questions on Preecludia. Can you give us a sense of the stature of the journal that your principal investigator intends to submit the Preecludia data to?

Harry StylliChairman and Chief Executive Officer

I believe they’re vying for a very top journal clinical journal, or a very top OB-GYN MSM journal. I can’t be specific, as you know, you are actually not permitted to name any journals.

Steven MahPiper Sandler — Analyst

Yes. No. I’m just sort of getting and trying a sense for the different tier. So it sounds like it’s one of the top-tier journals.

Harry StylliChairman and Chief Executive Officer

Yes.

Steven MahPiper Sandler — Analyst

OK. And yes, just continuing on Preecludia, Eric, does the opex guidance that you just gave does that include the any sort of scaling up for the Preecludia launch?

Eric d’EsparbesChief Financial Officer

So what it includes is the support work that we would do with commercial partners to get the test ready for commercialization, including work on reagents and supporting basically the clinical utility study that we would need to do in part and partnership.

Steven MahPiper Sandler — Analyst

OK. And so the opex does include expenses for the clinical utility studies?

Eric d’EsparbesChief Financial Officer

Our share, our part of the clinical utility study. Correct.

Steven MahPiper Sandler — Analyst

OK. Got it. But just to be clear, you don’t have any partners yet, right?

Eric d’EsparbesChief Financial Officer

Not yet. But the team is obviously progressing very well. And we had to wait until we have the actual validation study results in order to have a real conversation with the partners that we’ve already had either conversation or we’ve been approached by. And the other thing that is actually conducive, there is the increase in our IP portfolio strength.

So Harry talked about this as well. So all this basically triangulates to being in a good position to have those conversations.

Steven MahPiper Sandler — Analyst

OK. Got it. And do you guys have any sense for when Preecludia will launch or is that predicated with getting a partner, commercial partner, so there’s no, well, you guys would not launch it on your own. Do I understand that correctly?

Harry StylliChairman and Chief Executive Officer

We’re not likely to launch on our own. So it’s predicated on a partner.

Steven MahPiper Sandler — Analyst

OK. Got it. All right. And then my last question and then I’ll hop back in the queue.

So looking at the $0.5 million in revenue, it looks like the Avero revenue was put into discontinued ops. Do I have that correctly?

Eric d’EsparbesChief Financial Officer

That is correct. So all the lab-generated revenues are showed in discontinued operations because technically, the assets are either discontinued or held for sale. And it happened and you see there is the cost reimbursement that we are benefiting from the pharma partnerships when we run the feasibility studies.

Steven MahPiper Sandler — Analyst

OK. Got it. OK. So Avero has actually moved into a held for sale status now, from an accounting perspective.

Eric d’EsparbesChief Financial Officer

That is correct. And you’ll see this in the filing when the Q is filed shortly, yes.

Steven MahPiper Sandler — Analyst

OK. All right. All right. Thank you.

Eric d’EsparbesChief Financial Officer

Yes. No worries. Thanks for the questions.

Operator

Your next question comes from the line of Catherine Schulte from Baird. Your line is open.

Catherine SchulteBaird — Analyst

Hey, guys. First just staying on the topic of Preecludia, you mentioned conversations with potential partners, I guess, when do you think we can hear a potential announcement around that?

Harry StylliChairman and Chief Executive Officer

That’s going to be sometime next year probably.

Catherine SchulteBaird — Analyst

OK. And then on exploring strategic alternatives for the Avero business, I guess, how are those conversations progressing? And when could we hear an update there?

Harry StylliChairman and Chief Executive Officer

We choose to transact, it should be this year, if we decide to do to retain the business and you’ll hear it this year as well.

Catherine SchulteBaird — Analyst

OK. And then moving to precision medicine. We just had the Rani Therapeutics IPO. I guess how far ahead they are in terms of timing and development? And just from a technical perspective, how does your platform differentiate itself versus the Rani Pill capsule? And I believe they talked about bioavailability in the range of 40% to 78%.

So just wondering why you think that 10% to 15% would be sufficient?

Harry StylliChairman and Chief Executive Officer

Well, that’s for a specific drug, which is highly bioavailable. The Rani technology is actually very limited; you have to co-crystallize your drug in glucose oxidase formulation, which is unique and idiosyncratic. We have the ability to use a variety of formulations in solution. So that’s a very promising and distinct advantage.

The other, of course, is that 15% bioavailability is what we believe you need to achieve in order to be able to deliver a large number of drugs using our platform. However, we expect to be superior to that level of performance. The other of course, we’ve already demonstrated an ability to deliver monoclonal antibodies. And as far as we’re aware, no other entity has shown that capability.

And that’s just the beginning for us. OK. So there’s a variety of ways that we believe we’re going to be very well differentiated for folks like Rani and others. And we believe that technology is going to become as a consequence more versatile, and we’ll be able to address a broader range of Biotherapeutics in a much more face our way.

Catherine SchulteBaird — Analyst

Great. Thank you.

Harry StylliChairman and Chief Executive Officer

You’re welcome.

Operator

[Operator instructions] Your next question comes from the line of Mayank Mamtani from B. Riley Securities. Your line is open.

Unknown speaker

Thank you for taking our question. This is [Inaudible] on for Mayank. Many congrats on the progress, and also [Inaudible]. So on a high level, we would like to hear your thoughts on why did you focus on inflammatory bowel disease first and we also want to hear what other disease indications pill to be the next step for your OBDS and DDS platform.

And I have another follow-up question. Thank you.

Harry StylliChairman and Chief Executive Officer

OK. So for the OBDS platform, we decided to use drugs that are very accomplished, have clear evidence of efficacy and safety profiles. OK and of pan within the — for the early development cycle of our technology. So that’s one, because the technology is new.

We want to isolate as much of any variation to the technology and not to the drug and technology. So initially, we’re targeting an antibody, which is representative of many other antibodies in many other disease areas. It happens to be adalumimab which is similar to Humira, which is the world’s largest-selling drug, and has broad utility in autoimmune disorders, where an oral delivery capability could provide profound advantages, especially over the 15 or so biosimilar companies that are going through conventional routes. The other thing is that market is still projected post expiration of AbbVie’s plan for Humira is still projected to be a $14 billion to $15 billion global market.

So I think we’re perfectly beautifully positioned to deliver an oral formulation of adalumimab, which is in its own right, potentially very exciting, but also is an example of other monoclonals in other diseases. Behind that, we’re assessing a drug called liraglutide. Liraglutide is a GLP 1 agonist that’s known as Victoza. It’s one of Nova’s drugs.

And that can take advantage of the 505-B2 pathway. And what’s exciting here, assuming we could exploit the primary clinical data, is that it could emerge as a follow-on to RYBELSUS in both glucose management market, as well as the cardiovascular indications market, and potentially the obesity market. Now, that’s predicated on two things that we see compelling data that we’re seeing for adalumimab for that molecule. And then also we’re allowed to leverage fully the primary clinical data generated today.

Now, of course, liraglutide is an example of a peptide, not just as GLP 1 agonists but insolence, for example, and many, many other peptides. So if you see our approach is we’re taking a platform approach, where the lead drugs are exemplars of a class, but at the same time, have immense commercial potential in their own right. OK, then, behind that, we wait to see, there’s a very large number of potential candidates, for example, that we can exploit. And you can begin to look at treatment of hemophiliacs you have to inject every day, human growth hormones, by the oral route.

There’s many other antibodies and many other peptides. The other exciting feature is we have a partnership with our owners, where we’re exploring our technology to deliver antisense. And there’s also potential interest, if that goes well, to deliver mRNA vaccines by the oral route. OK.

So that’s the versatility of our platform. And Catherine asked a question, a distinct advantage we have is that we’re able to work with liquid formulations that are conventionally formulated or could take advantage of our formulation repertoire. OK, so that’s the OBDS. And we’re working toward area in the data that is of the right caliber that will lead to broader partnerships with our pharma partners and with new pharma partners.

There’s plenty of opportunity for more than one entity in this space, we really are on the ground floor.

Unknown speaker

OK. Yes. That’s very helpful review, and maybe my follow-up is on the general term while you are doing feasibility studies with your partners. So what are the key endpoints we are looking for like bioavailability or whether PKPD in your preclinical model is close to their simulation results or do we have any preference on preclinical model or animal? Thank you.

Harry StylliChairman and Chief Executive Officer

So I will give you a general response. So one is the general goal is about 15% by average bioavailability, with about a 50% CV, Coefficient of Variation. So as you can see, there’s a high tolerance to variability. Now that’s very much drug dependent, and dosing regimen dependent and PK dependent, but what I’ve shared with you is essentially one of the targets.

Now, we have to develop models, for example. So we are developing porcine models, as well as canine models. And that helps us not just demonstrate the potential of technology, but also helps us fine tune the parameters so that we can extrapolate command, which is really our goal, we’re not here to — in a way, when you’re at this stage of development or preclinical stage you have to demonstrate performance in an animal model that is related, and we should learn from in humans, but ultimately, they help inform the human case. The other great feature about technology is that we can choose.

So it’s like dish technology, we can choose a variety of parameters. So we’re not locked in, in a very rigid pathway. We have the ability to choose various parameters to help optimize delivery for a particular drug and a particular species. And that’s another powerful feature that we have.

OK?

Unknown speaker

Yes. Thank you very much.

Harry StylliChairman and Chief Executive Officer

You’re welcome. Thanks for the questions.

Operator

Your next question comes from the line of Andrew Cooper from Raymond James. Your line is open.

Andrew CooperRaymond James — Analyst

Hey. Thanks for the question, and I apologize now for any new background noise from the airport. But maybe just often asked, I guess, the high level one, can you just give some flavor? I think clearly what you talked about is a lot of optionalities a lot of different directions; you can go even within a given platform, or one of the four kind of precision medicine initiatives. So help us think about the latest and greatest on just sort of what are the stage gating factors to where you think you can see more pharma partnership interest, or what’s the first kind of domino to fall that you think can really get the ball rolling from that perspective?

Harry StylliChairman and Chief Executive Officer

Yes. So I’ll be happy to address that. So if you take the year-over-year essence performance we’ve shared regarding a monoclonal adalumimab. I think the next step for us to show similar levels of performance, with more devices performing at that level, and we believe that’s very accessible.

The second part we need to show is obviously, an amount of the obvious we have liraglutide it’s a peptide, we want to show similar performance that we’re already seeing, there’s evidence of that where that adalumimab and finally, it would be very cool if we can deliver antisense because that’s a whole new application. And this is in partnership. So I want to be very clear. We’re laser-focused on the OBDS and adalumimab and exploiting liraglutide, and then behind that the DDS exploiting at adalumimab again, so there’s operating leverage in our programs, but it’s very well, one drug, basically, two different delivery modalities.

One is very specific for inflammatory bowel disease. The other is pan autoimmune is a panel to — it is an immune suppressant and tofacitinib which again, is a unique drug to treat autoimmune, or in this case, IBD. So that’s our focus. Our partners are also interested in peptides; they’re also interested in nucleic acids.

And they’re also interested in monoclonal and the list, frankly, is growing. OK. I’ll stop there.

Andrew CooperRaymond James — Analyst

No. That’s super helpful. Maybe just one more and I don’t want to focus too much on things you’ve put into discontinued operations. But when we think about Avero and the decision there, what are the factors that make you swing one way or the other? Is it value you think you can recognize just purely from a sales perspective? Or are there some strategic dynamics when we think about Preecludia, when we think about some of the other pieces that maybe come into play there, just helping me think about what we need to see and what we shall make whether that sells or not.

Harry StylliChairman and Chief Executive Officer

So we have a preference to divest the business, however, as time goes on, and where we’re looking at it as a potential strategic opportunity, whereby we could exploit Preecludia and 104 through their OB-GYN channel. So both are attractive, although our bias presently is to divest the business.

Andrew CooperRaymond James — Analyst

OK. Thank you. I appreciate that. I’ll stop there.

Thanks for the questions.

Harry StylliChairman and Chief Executive Officer

You’re welcome. Thank you, Andrew.

Operator

There are no more questions at this time, turning the call back over to Mr. Harry Stylli.

Harry StylliChairman and Chief Executive Officer

Thank you all once again for participating on the call, and thank you all for your interest in Progenity. If you have any additional questions, please feel free to contact us directly. Have a good evening, everyone, and thank you for listening.

Operator

[Operator signoff]

Duration: 47 minutes

Call participants:

Robert UhlManaging Director, ICR

Harry StylliChairman and Chief Executive Officer

Eric d’EsparbesChief Financial Officer

Steven MahPiper Sandler — Analyst

Catherine SchulteBaird — Analyst

Unknown speaker

Andrew CooperRaymond James — Analyst

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