Kentucky First Federal Bancorp(KFFB) - 2025 Q4 - Annual Report
2025-09-30 20:22
[FORM 10-K Cover Page](index=1&type=section&id=FORM%2010-K) The cover page provides essential identifying information for the annual report on Form 10-K [INDEX](index=3&type=section&id=INDEX) This section serves as the table of contents for the entire annual report [PART I](index=4&type=section&id=PART%20I) This part details the company's business operations, risk factors, properties, and legal proceedings [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Kentucky First Federal Bancorp operates two independent savings institutions, focusing on deposits and real estate-secured loans in Kentucky, subject to extensive regulation - **Total Assets**: **$371.2 million** as of June 30, 2025[17](index=17&type=chunk) - **Deposits**: **$277.6 million** as of June 30, 2025[17](index=17&type=chunk) - **Stockholders' Equity**: **$48.4 million** as of June 30, 2025[17](index=17&type=chunk) - The company operates First Federal of Hazard and First Federal of Kentucky as two independent, community-oriented savings institutions, following its incorporation in 2005 and subsequent acquisitions[14](index=14&type=chunk)[15](index=15&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section identifies forward-looking statements and outlines inherent risks that could cause actual results to differ materially from projections - Forward-looking statements are identified by words like 'believe,' 'expect,' 'anticipate,' 'plan,' 'estimate,' 'intend,' and 'potential,' or future/conditional verbs such as 'should,' 'could,' or 'may'[12](index=12&type=chunk) - Actual results may materially differ due to risks including general economic conditions, real estate prices, interest rate environment, ability to increase earnings and core deposits, regulatory approvals for dividends, competitive conditions, inflation, demand for financial services, credit losses, employee retention, data security, litigation, and changes in law and regulations[12](index=12&type=chunk) [General Company Overview](index=4&type=section&id=General) Kentucky First Federal Bancorp, incorporated in 2005, operates two independent savings institutions, First Federal of Hazard and First Federal of Kentucky, regulated by the OCC and FDIC - Kentucky First Federal Bancorp was incorporated on March 2, 2005, following the reorganization of First Federal Savings and Loan Association of Hazard and the acquisition of Frankfort First Bancorp, Inc[14](index=14&type=chunk) - On December 31, 2012, Kentucky First Federal acquired CFK Bancorp, Inc., expanding its customer base in central Kentucky[15](index=15&type=chunk) Bank Financials (June 30, 2025) | Bank | Total Assets | Net Loans | Deposits | Total Capital | | :----------------------------- | :--------------------------- | :------------------------ | :----------------------- | :---------------------------- | | First Federal of Hazard | $85.8 million | $77.2 million | $59.5 million | $17.9 million | | First Federal of Kentucky | $286.1 million | $250.0 million | $219.4 million | $29.3 million | [Market Areas](index=5&type=section&id=Market%20Areas) First Federal of Hazard operates in economically distressed eastern Kentucky, while First Federal of Kentucky serves more affluent central Kentucky counties - First Federal of Hazard's market area in eastern Kentucky is economically distressed, with a median household income of **$46,572** and a July 2025 unemployment rate of **6.9%**, higher than state and national averages[22](index=22&type=chunk) First Federal of Kentucky Market Area Demographics | County (First Federal of Kentucky) | Population | Median Household Income | Unemployment Rate | | :--------------------------------- | :--------- | :---------------------- | :---------------- | | Franklin County | 51,913 | $66,095 | 4.4% | | Boyle County | 31,139 | $58,397 | 5.5% | | Garrard County | 17,916 | $61,034 | 5.0% | [Lending Activities](index=7&type=section&id=Lending%20Activities) The company's loan portfolio is primarily residential mortgages, with 83.6% of the total and 93.8% of these being adjustable-rate loans, and it implemented the CECL model for credit losses - Residential mortgage loans, including construction and multi-family, totaled **$276.2 million**, representing **83.6%** of the total loan portfolio at June 30, 2025[27](index=27&type=chunk) - Adjustable-rate residential mortgage loans constituted **$258.9 million**, or **93.8%**, of the Company's residential mortgage loan portfolio at June 30, 2025[28](index=28&type=chunk) Loan Portfolio Composition (June 30, 2025) | Loan Type (June 30, 2025) | Amount (in millions) | % of Total Loan Portfolio | | :------------------------ | :------------------- | :------------------------ | | Construction Loans | $9.3 | 2.8% | | Multi-Family Loans | $15.5 | 4.7% | | Nonresidential Loans | $31.7 | 9.6% | | Commercial Non-mortgage | $0.7 | 0.2% | | Consumer Loans | $16.3 | 5.0% | - Upon implementation of ASU 2016-13 (CECL model) at July 1, 2023, the Banks began utilizing a separate liability for anticipated credit losses on loan commitments, which totaled **$59,000** at June 30, 2025[46](index=46&type=chunk) [Investment Activities](index=10&type=section&id=Investment%20Activities) The company invests in low-risk liquid assets like mortgage-backed securities to maintain liquidity, manage interest rate risk, and generate returns - Investment objectives include providing an alternate source of low-risk investments, maintaining liquidity, diversifying investments, providing collateral, managing interest rate risk, and generating favorable returns[54](index=54&type=chunk) - At June 30, 2025, the investment portfolio consisted of mortgage-backed securities issued and guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae[53](index=53&type=chunk) [Bank Owned Life Insurance](index=10&type=section&id=Bank%20Owned%20Life%20Insurance) First Federal of Kentucky holds **$3.0 million** in BOLI policies to offset employee benefit costs, generating tax-exempt income, but faces risks from insurer failure and tax law changes - First Federal of Kentucky owns **$3.0 million** in Bank Owned Life Insurance (BOLI) policies as of June 30, 2025, to offset future non-salary employee benefit costs[55](index=55&type=chunk) - The income from BOLI policies is exempt from federal income taxes, and the cash value growth is recorded as other operating income[55](index=55&type=chunk) - Key risks include insurer failure, changes in tax laws, crediting rate not keeping pace with market rates, and potential regulatory prohibition of such plans[56](index=56&type=chunk) [Deposit Activities and Other Sources of Funds](index=11&type=section&id=Deposit%20Activities%20and%20Other%20Sources%20of%20Funds) The company primarily funds operations through deposits, loan repayments, and securities, supplementing with **$44.0 million** in brokered funds and FHLB borrowings - Major sources of funds include deposits, loan repayments, and maturities/redemptions/sales of investment and mortgage-backed securities[57](index=57&type=chunk) - The company began utilizing brokered funds in June 2023, with **$44.0 million** in such deposits at June 30, 2025[58](index=58&type=chunk) - First Federal of Hazard and First Federal of Kentucky borrow from the FHLB-Cincinnati to supplement investable funds and meet deposit withdrawal requirements[59](index=59&type=chunk) [Subsidiary Activities](index=11&type=section&id=Subsidiary%20Activities) Kentucky First Federal Bancorp's wholly-owned subsidiaries are First Federal of Hazard and First Federal of Kentucky, with authorized subsidiary investment limits based on assets - Kentucky First Federal Bancorp's wholly-owned subsidiaries are First Federal of Hazard and Frankfort First Bancorp, which owns First Federal of Kentucky[60](index=60&type=chunk) Authorized Subsidiary Investment (as of June 30, 2025) | Bank | Authorized Subsidiary Investment | | :----------------------------- | :--------------------------------------------------- | | First Federal of Hazard | Up to $1.7 million | | First Federal of Kentucky | Up to $5.0 million | [Competition](index=11&type=section&id=Competition) The company faces intense competition for deposits and loans from larger financial institutions, with competition expected to increase due to industry changes and consolidation - The company faces significant competition for deposits and loans from banks, credit unions, and other financial services companies, with larger competitors having greater resources[62](index=62&type=chunk) - Competition is expected to increase due to legislative, regulatory, and technological changes, and the continuing trend of consolidation in the financial services industry[62](index=62&type=chunk) Deposit Market Share (June 30, 2025) | Bank | Market Area | Deposit Market Share | | :----------------------------- | :---------- | :----------------------------------- | | First Federal of Hazard | Perry County | 7.2% | | First Federal of Kentucky | Franklin County | 8.2% | | First Federal of Kentucky | Boyle County | 8.2% | | First Federal of Kentucky | Garrard County | 17.5% | [Personnel](index=12&type=section&id=Personnel) As of June 30, 2025, the company employed 56 individuals, none of whom are unionized, maintaining a positive relationship with its workforce - At June 30, 2025, the company had **54 full-time** and **two part-time** employees[65](index=65&type=chunk) - No employees were represented by a collective bargaining unit, and the company believes its relationship with employees is good[65](index=65&type=chunk) [Regulation and Supervision](index=12&type=section&id=Regulation%20and%20Supervision) The company and its subsidiaries are extensively regulated by federal agencies, with First Federal of Kentucky currently under an OCC agreement and subject to Individual Minimum Capital Requirements - First Federal of Hazard and First Federal of Kentucky are subject to extensive regulation by the OCC and FDIC, while Kentucky First and First Federal MHC are supervised by the Federal Reserve Board[66](index=66&type=chunk) - The Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA) have significantly impacted the regulatory regime for financial institutions[67](index=67&type=chunk)[68](index=68&type=chunk) - First Federal of Kentucky entered a formal written agreement with the OCC on August 13, 2024, placing it in 'troubled condition' and imposing Individual Minimum Capital Requirements (IMCRs)[69](index=69&type=chunk) [Agreements with Regulators](index=13&type=section&id=Agreements%20with%20Regulators) First Federal of Kentucky is classified as in 'troubled condition' under an August 2024 OCC agreement, mandating specific capital ratios and corrective actions - First Federal of Kentucky entered a formal written agreement with the OCC on August 13, 2024, resulting in its classification as in 'troubled condition'[69](index=69&type=chunk) Individual Minimum Capital Requirements (IMCRs) | Individual Minimum Capital Requirements (IMCRs) | | :---------------------------------------------- | | Common Equity Tier 1 Capital Ratio: ≥ 9.0% | | Tier 1 Capital Ratio: ≥ 11.0% | | Total Capital Ratio: ≥ 12.0% | | Leverage Ratio: ≥ 9.0% | - Required actions include establishing a compliance committee, submitting revised strategic and succession plans, and adopting enhanced liquidity and interest rate risk management programs[71](index=71&type=chunk) [Regulation of Federal Savings Associations](index=14&type=section&id=Regulation%20of%20Federal%20Savings%20Associations) Federal savings associations are governed by federal laws and OCC regulations, including minimum capital standards and prompt corrective actions, with First Federal of Kentucky exceeding its higher IMCRs - Federal savings associations are subject to federal laws and OCC regulations governing business activities, including lending authority limits[72](index=72&type=chunk) Minimum Capital Standards (Effective Jan 1, 2015) | Minimum Capital Standards (Effective Jan 1, 2015) | | :---------------------------------------------- | | Tier 1 Leverage Ratio: 4.0% | | Common Equity Tier 1 Ratio: 4.5% | | Tier 1 Capital to Risk-Weighted Assets Ratio: 6.0% | | Total Capital to Risk-Weighted Assets Ratio: 8.0% | | Capital Conservation Buffer: 2.5% | - First Federal of Kentucky's capital levels at June 30, 2025, exceeded its IMCRs: common equity tier 1 (**16.83%**), tier 1 (**16.83%**), total capital (**16.83%**), and leverage ratio (**9.97%**)[77](index=77&type=chunk) - Both First Federal of Hazard and First Federal of Kentucky received a 'Satisfactory' rating in their most recent Community Reinvestment Act assessments[94](index=94&type=chunk) [Holding Company Regulation](index=18&type=section&id=Holding%20Company%20Regulation) Kentucky First and First Federal MHC are regulated by the Federal Reserve Board as savings and loan holding companies, exempt from consolidated capital requirements, and have suspended quarterly dividends - Kentucky First and First Federal MHC are regulated by the Federal Reserve Board as savings and loan holding companies[99](index=99&type=chunk) - Savings and loan holding companies with less than **$3.0 billion** in assets, such as Kentucky First, are exempt from consolidated capital requirements[105](index=105&type=chunk) - The company announced the suspension of quarterly dividends indefinitely on January 16, 2024, and First Federal MHC suspended efforts to seek member approval for dividend waivers[108](index=108&type=chunk) [Federal and State Taxation](index=22&type=section&id=Federal%20and%20State%20Taxation) The company is subject to a 21% federal income tax rate, with potential recapture of **$5.2 million** in bad debt reserves for First Federal of Kentucky, and is also subject to Kentucky corporate income tax - The federal statutory tax rate was **21%** for the fiscal years ended June 30, 2025 and 2024[112](index=112&type=chunk) - Approximately **$5.2 million** of First Federal of Kentucky's accumulated bad debt reserves would be recaptured into taxable income if 'non-dividend distributions' are made[114](index=114&type=chunk) - Effective January 1, 2021, the Savings and Loan Tax no longer applies to financial institutions in Kentucky, which are now subject to the corporate income tax[117](index=117&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks, including interest rate fluctuations, lending activity exposures, liquidity challenges, regulatory compliance, and operational and holding company structure risks - Net interest income decreased by **$1.8 million (20.3%)** in the year ended June 30, 2024, compared to the prior fiscal year, but improved to **$8.3 million** in the year ended June 30, 2025, from **$6.9 million** in the prior year, primarily due to higher asset returns and declining cost of funds[119](index=119&type=chunk) - At June 30, 2025, **93.8%** of the residential real estate loan portfolio consisted of adjustable-rate loans, increasing default risk during rising interest rates[122](index=122&type=chunk) - The company had **$29.2 million** in available liquidity, including **$19.5 million** in cash and cash equivalents, and **$80.3 million** in off-balance sheet liquidity sources, including **$71.0 million** in FHLB-Cincinnati borrowing capacity, as of June 30, 2025[130](index=130&type=chunk) - The company announced the indefinite suspension of quarterly dividends on January 16, 2024, which could adversely impact the market price of its common stock[132](index=132&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) Rising interest rates pose a significant risk by potentially reducing net interest income, decreasing loan demand, and impairing borrower repayment ability for adjustable-rate loans - Net interest income decreased **$1.8 million (20.3%)** in the year ended June 30, 2024, compared to the prior fiscal year, but improved to **$8.3 million** in the year ended June 30, 2025, from **$6.9 million** in the prior year, due to higher asset returns and declining cost of funds[119](index=119&type=chunk) - At June 30, 2025, accumulated other comprehensive loss, representing the decrease in fair value of available-for-sale securities due to rising interest rates, totaled **$145,000**, or **1.5%** of the securities portfolio[121](index=121&type=chunk) - **93.8%** of the residential real estate loan portfolio at June 30, 2025, consisted of adjustable-rate loans, increasing the risk of default if interest rates rise and borrower payments increase[122](index=122&type=chunk) [Risks Related to Our Lending Activities](index=25&type=section&id=Risks%20Related%20to%20Our%20Lending%20Activities) Lending activities face risks from inflation, adequacy of credit loss allowance, high concentration in real estate collateral, and volatility in mortgage banking revenue - Inflationary pressures are expected to remain elevated throughout 2025, potentially increasing costs for customers and making loan repayment more difficult[123](index=123&type=chunk) - Approximately **99.3%** of the loan portfolio at June 30, 2025, was collateralized by real estate, exposing the company to significant risk from real estate market disruptions[125](index=125&type=chunk) - Residential mortgage loans secured by one-to-four family real estate constituted **$275.3 million**, or **83.6%**, of the loan portfolio at June 30, 2025, making the company sensitive to regional and local economic conditions[126](index=126&type=chunk) - Non-interest income increased **$249,000 (99.2%)** to **$500,000** in the fiscal year ended June 30, 2025, primarily due to increased net gains on sales of loans of **$187,000**[128](index=128&type=chunk) [Liquidity Risk](index=26&type=section&id=Liquidity%20Risk) The company faces liquidity risk from potential deposit outflows, with **$37.1 million** in uninsured deposits, and has indefinitely suspended dividends, impacting stock price and future payments - At June 30, 2025, uninsured deposits were approximately **$37.1 million**, or **13.4%** of total deposits[130](index=130&type=chunk) Liquidity Metrics (June 30, 2025) | Liquidity Metric (June 30, 2025) | Amount (in millions) | | :------------------------------- | :------------------- | | Available Liquidity | $29.2 | | Cash and Cash Equivalents | $19.5 | | Off-Balance Sheet Liquidity Sources | $80.3 | | FHLB-Cincinnati Borrowing Capacity | $71.0 | - The company announced the indefinite suspension of quarterly dividends on January 16, 2024, which could adversely impact the market price of its common stock[132](index=132&type=chunk) - First Federal MHC suspended efforts to seek member approval to obtain the dividend waiver for periods after the third quarter of 2024, and prior regulatory approval has expired[135](index=135&type=chunk) [Risks Related to Our Business and Industry Generally](index=28&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry%20Generally) The company faces intense competition for loans and deposits from larger, more resourced financial institutions, which is expected to intensify due to industry changes and consolidation - The company faces intense competition for loans and deposits, which could reduce net interest income due to price competition[136](index=136&type=chunk) - Competition is expected to increase due to legislative, regulatory, and technological changes, and the continuing trend of consolidation in the financial services industry[136](index=136&type=chunk) [Risks Related to Laws and Regulations](index=28&type=section&id=Risks%20Related%20to%20Laws%20and%20Regulations) First Federal of Kentucky is under an OCC agreement with IMCRs, and the company is broadly affected by regulatory changes, compliance costs, and federal monetary and tax policies - First Federal of Kentucky is in 'troubled condition' due to a formal written agreement with the OCC, effective August 13, 2024, and is subject to IMCRs[137](index=137&type=chunk) First Federal of Kentucky Capital Ratios vs. IMCR Requirement (June 30, 2025) | First Federal of Kentucky Capital Ratios (June 30, 2025) | IMCR Requirement | | :------------------------------------------------------- | :--------------- | | Common Equity Tier 1 Capital Ratio: 16.83% | ≥ 9.0% | | Tier 1 Capital Ratio: 16.83% | ≥ 11.0% | | Total Capital Ratio: 16.83% | ≥ 12.0% | | Leverage Ratio: 9.97% | ≥ 9.0% | - Changes in tax laws, such as the Tax Cuts and Jobs Act and the 'One Big Beautiful Bill Act,' may adversely affect the market for residential properties and demand for mortgage loans[145](index=145&type=chunk)[146](index=146&type=chunk) - Federal law requires a holding company to act as a source of financial and managerial strength to its subsidiary banks, potentially requiring capital injections even when resources are limited[149](index=149&type=chunk) [Risks Related to Accounting Matters](index=32&type=section&id=Risks%20Related%20to%20Accounting%20Matters) The company's financial statements rely on significant management estimates, and changes in accounting standards can materially impact reported financial condition and operating results - Significant estimates and assumptions are made in evaluating the adequacy of the allowance for loan losses, the valuation of mortgage servicing rights, and the fair value of financial instruments[150](index=150&type=chunk) - Changes in accounting standards by bodies like the FASB and SEC can materially impact reported financial condition and results of operations, potentially retroactively[151](index=151&type=chunk) [Risks Related to Operational Matters](index=33&type=section&id=Risks%20Related%20to%20Operational%20Matters) The company faces operational risks from technology reliance, including cyber attacks, system failures, and third-party provider issues, necessitating continuous investment in security and personnel - The security of computer systems and networks is vulnerable to breaches, unauthorized access, misuse, computer viruses, and cyber attacks, which could jeopardize confidential information and disrupt operations[152](index=152&type=chunk) - Outsourcing data processing and other operational functions to third-party providers introduces risks if these providers encounter difficulties or communication issues arise[154](index=154&type=chunk) - Failure to keep pace with technological advances and invest in new technology could materially adversely impact the business and financial condition[156](index=156&type=chunk) [Risks Related to Our Holding Company Structure](index=34&type=section&id=Risks%20Related%20to%20Our%20Holding%20Company%20Structure) First Federal MHC's majority ownership grants voting control, potentially conflicting with other stockholders' interests, and the company's ability to pay dividends is constrained by regulatory approvals and MHC waivers - First Federal MHC owns a majority of the common stock and can exercise voting control, potentially preventing transactions favorable to other stockholders[157](index=157&type=chunk) - The ability to pay future dividends depends on the Banks' capital distributions to Kentucky First Federal and First Federal MHC's waiver of dividends[158](index=158&type=chunk) - The company announced the indefinite suspension of dividend payments on January 16, 2024[163](index=163&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[165](index=165&type=chunk) [Item 1C. Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity program with Board oversight, risk management, continuous investment, and an Incident Response Plan, reporting no material losses in FY2025 - The company employs comprehensive methodologies for risk assessment, identifying and evaluating potential cybersecurity threats and vulnerabilities[167](index=167&type=chunk) - An Incident Response Plan is in place to guide actions for real and suspected information security incidents, with material threats escalated to the Incident Response Team[169](index=169&type=chunk) - The company has not experienced any material losses relating to cybersecurity threats or incidents for the year ended June 30, 2025[172](index=172&type=chunk) - The Board of Directors has oversight responsibilities for cybersecurity risk management, and the Information Security Officer (ISO) reports directly to the CEO and provides regular briefings to the Board and Audit Committee[173](index=173&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk) [Cybersecurity Risk Management and Strategy](index=36&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) The company safeguards information and data through comprehensive risk assessments, continuous security investments, end-user training, and enhanced monitoring - The company regards information and data as valuable assets and has implemented safeguards to protect their integrity, availability, and privacy[166](index=166&type=chunk) - Comprehensive methodologies are used for risk assessment, including regular examinations of emerging threats, penetration tests, vulnerability scanning, and analysis of industry-specific risks[167](index=167&type=chunk) - Investments in information technology security are expanding, focusing on end-user training, layered defenses, critical asset protection, and strengthening monitoring and alerting[168](index=168&type=chunk) [Integration into Overall Risk Management System](index=36&type=section&id=Integration%20into%20Overall%20Risk%20Management%20System) Cybersecurity is integrated into the company's overall risk management through comprehensive threat identification, an Incident Response Plan, and regular tabletop exercises - The company employs comprehensive methodologies for risk assessment, diligently identifying and evaluating potential cybersecurity threats and vulnerabilities[167](index=167&type=chunk) - An Incident Response Plan guides actions for real and suspected information security incidents, including Distributed Denial of Service attacks, Corporate Account Takeover schemes, or ransomware[169](index=169&type=chunk) - Tabletop exercises are held regularly at senior and executive management levels to validate roles, responsibilities, and response protocols for cybersecurity threats[170](index=170&type=chunk) [Third-party Access](index=36&type=section&id=Third-party%20Access) The company manages third-party cybersecurity risks through a dedicated program, assigning risk ratings to vendors and contractually requiring appropriate security measures - The company has a fully integrated third-party risk management program to identify, assess, monitor, and mitigate cybersecurity risks associated with vendors[171](index=171&type=chunk) - Risk ratings are assigned to vendors based on their access to networks, systems, and confidential information[171](index=171&type=chunk) - Third parties with access to company systems or customer data must have appropriate security measures and agree by contract to manage their cybersecurity risks[171](index=171&type=chunk) [Material Cybersecurity Threat Risks](index=36&type=section&id=Material%20Cybersecurity%20Threat%20Risks) The company reported no material losses from cyber threats in FY2025 and is unaware of any risks likely to materially affect its business, but acknowledges that absolute security cannot be guaranteed - The company has not experienced any material losses relating to cybersecurity threats or incidents for the year ended June 30, 2025[172](index=172&type=chunk) - The company is not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect its business strategy, results of operations, or financial condition[172](index=172&type=chunk) - Despite a robust cybersecurity program, absolute surety against vulnerabilities or incidents cannot be provided, and future incidents could harm the business, reputation, or lead to regulatory actions or litigation[172](index=172&type=chunk) [Cybersecurity Governance](index=37&type=section&id=Cybersecurity%20Governance) The Board of Directors oversees cybersecurity risk management, with the ISO reporting directly to the CEO and regularly informing the Board and Audit Committee on risks and initiatives - The Board of Directors is responsible for the oversight of cybersecurity risk management, with members possessing expertise in risk management, technology, and finance[174](index=174&type=chunk) - The Information Security Officer (ISO) reports directly to the CEO and regularly informs the Board and Audit Committee on cybersecurity risks, initiatives, incidents, and compliance[175](index=175&type=chunk)[177](index=177&type=chunk) - The Board actively participates in strategic decisions related to cybersecurity, offering guidance and approval for major initiatives[176](index=176&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) The company operates through seven owned offices across Kentucky, with a total net book value of premises and equipment at **$4.2 million** as of June 30, 2025 - The company conducts its business through seven owned offices[181](index=181&type=chunk) Office Locations and Details (June 30, 2025) | Office Location | Year Opened/Acquired | Ownership | Net Book Value (in thousands) | Approximate Square Footage | | :-------------------------------- | :------------------- | :-------- | :------------------------------------------- | :------------------------- | | First Federal of Hazard Main Office: 655 Main Street, Hazard, Kentucky 41701 | 2016 | Owned | $630 | 5,600 | | First Federal of Kentucky Main Office: 216 West Main Street, Frankfort, Kentucky 40601 | 2005 | Owned | $722 | 14,000 | | First Federal of Kentucky: 194 Versailles Road, Frankfort, Kentucky 40601 | 2015 | Owned | $748 | 2,700 | | First Federal of Kentucky: 1220 US 127 South, Frankfort, Kentucky 40601 | 2005 | Owned | $404 | 2,480 | | First Federal of Kentucky: 340 West Main Street, Danville, Kentucky 40422 | 2012 | Owned | $476 | 8,700 | | First Federal of Kentucky: 120 Skywatch Drive, Danville, Kentucky 40422 | 2012 | Owned | $627 | 2,300 | | First Federal of Kentucky: 208 Lexington Street, Lancaster, Kentucky 40444 | 2012 | Owned | $360 | 4,300 | - The net book value of the company's investment in premises and equipment was **$4.2 million** at June 30, 2025[182](index=182&type=chunk) [Item 3. Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any pending legal proceedings expected to have a material adverse effect on its financial condition or operations - The company is not a party to any pending legal proceedings that are believed to have a material adverse effect on its financial condition, results of operations, or cash flows[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable[184](index=184&type=chunk) [PART II](index=39&type=section&id=PART%20II) This part covers market information for common equity, financial statements, and internal controls [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase any equity securities in FY2024 or FY2025 and has no repurchase plan, with other information incorporated by reference - No stock was purchased in the fiscal years ended June 30, 2024 and 2025[187](index=187&type=chunk) - There is no stock repurchase plan in place as of June 30, 2025[187](index=187&type=chunk) - The company repurchased no equity securities registered under the Securities Exchange Act of 1934 during any quarter of the fiscal year ended June 30, 2025[189](index=189&type=chunk) [Item 6. [Reserved]](index=40&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Information for Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated by reference from the Annual Report to Stockholders - Information for Management's Discussion and Analysis of Financial Condition and Results of Operations is incorporated by reference from the Annual Report to Stockholders[190](index=190&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company as it qualifies as a smaller reporting company - This item is not applicable, as the Company is a smaller reporting company[191](index=191&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=40&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The Consolidated Financial Statements, Notes, Independent Auditor's Report, and Selected Financial Data are incorporated by reference from the Annual Report to Stockholders - The Consolidated Financial Statements, Notes to Consolidated Financial Statements, Report of Independent Registered Public Accounting Firm and Selected Financial Data are incorporated by reference from the Annual Report to Stockholders[192](index=192&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=40&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants regarding accounting and financial disclosure - There are no changes in and disagreements with accountants on accounting and financial disclosure[193](index=193&type=chunk) [Item 9A. Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2025, with no material changes during the quarter - The company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[194](index=194&type=chunk) - Management assessed the effectiveness of the company's internal control over financial reporting as of June 30, 2025, based on the COSO 2013 framework, and concluded it was effective[200](index=200&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[202](index=202&type=chunk) [Disclosure Controls and Procedures](index=40&type=section&id=Disclosure%20Controls%20and%20Procedures) The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[194](index=194&type=chunk) [Internal Control Over Financial Reporting](index=40&type=section&id=Internal%20Control%20Over%20Financial%20Reporting) Management affirmed the effectiveness of internal control over financial reporting as of June 30, 2025, based on the COSO 2013 framework, with no auditor attestation due to filer status - Management is responsible for establishing and maintaining adequate internal control over financial reporting[199](index=199&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of June 30, 2025, based on COSO 2013, and concluded it was effective[200](index=200&type=chunk) - The report does not include an attestation report from the public accounting firm due to the company's exemption as a non-accelerated filer[201](index=201&type=chunk) [Changes to Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20to%20Internal%20Control%20Over%20Financial%20Reporting) There were no material changes to the company's internal control over financial reporting during the quarter ended June 30, 2025 - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect it[202](index=202&type=chunk) [Item 9B. Other Information](index=41&type=section&id=Item%209B.%20Other%20Information) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b-5 trading arrangements during the three months ended June 30, 2025 - No director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b-5 trading arrangement during the three months ended June 30, 2025[203](index=203&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=41&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[204](index=204&type=chunk) [PART III](index=42&type=section&id=PART%20III) This part provides information on directors, executive compensation, security ownership, related transactions, and principal accountant fees [Item 10. Directors, Executive Officers and Corporate Governance](index=42&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, corporate governance, and ethics policies is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement - Information on Directors, Executive Officers, and Corporate Governance is incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - The company has adopted a Code of Ethics and Business Conduct applicable to all directors, officers, and employees[211](index=211&type=chunk) - Insider trading policies and procedures have been adopted to promote compliance with insider trading laws, rules, and regulations[212](index=212&type=chunk) [Item 11. Executive Compensation](index=42&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement - Information on Executive Compensation is incorporated by reference from the Proxy Statement[213](index=213&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=43&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and changes in control is incorporated by reference from the proxy statement, with no outstanding equity compensation options as of June 30, 2025 - Information on Security Ownership of Certain Beneficial Owners and Management is incorporated by reference to the 'Stock Ownership' section in the Proxy Statement[219](index=219&type=chunk) - Management knows of no arrangements that may result in a change in control of the company[219](index=219&type=chunk) Equity Compensation Plans (as of June 30, 2025) | Equity Compensation Plans (as of June 30, 2025) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | :---------------------------------------------- | :------------------------------------------------------------------------ | :------------------------------------------------------------------------ | :------------------------------------------------------------------------------------------------------------------------------------------ | | Equity compensation plans approved by security holders | — | — | — | | Equity compensation plans not approved by security holders | — | — | — | | Total | — | — | — | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=43&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the proxy statement - Information on Certain Relationships and Related Transactions and Director Independence is incorporated by reference from the Proxy Statement[216](index=216&type=chunk)[217](index=217&type=chunk) [Item 14. Principal Accountant Fees and Services](index=43&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the proxy statement - Information on Principal Accountant Fees and Services is incorporated by reference from the 'Audit Related Matters' section in the Proxy Statement[218](index=218&type=chunk) [PART IV](index=44&type=section&id=PART%20IV) This part includes exhibits, financial statement schedules, and the Form 10-K summary [Item 15. Exhibits and Financial Statement Schedules](index=44&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists consolidated financial statements, financial statement schedules, and exhibits filed as part of the Annual Report on Form 10-K - The consolidated financial statements are incorporated by reference from Item 8[221](index=221&type=chunk) - All financial statement schedules are omitted because conditions for their requirement are absent or the information is included in the consolidated financial statements and related notes[221](index=221&type=chunk) - A list of exhibits filed as part of this Annual Report on Form 10-K is provided, including corporate documents, employment agreements, and regulatory filings[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 16. Form 10-K Summary](index=45&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Form 10-K Summary is not applicable[224](index=224&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) This section contains the required signatures of the company's authorized officers
Nanobiotix(NBTX) - 2025 Q2 - Quarterly Report
2025-09-30 20:19
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________ FORM 6-K ________________________ REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 Date of report: September 30, 2025 Commission File Number: 001-39777 ________________________ NANOBIOTIX S.A. (Exact name of registrant as specified in its charter) _________________________ Nanobiotix S.A. 60 rue de Wattignies 75012 Paris, France (Address of principal ex ...
NIKE(NKE) - 2026 Q1 - Quarterly Results
2025-09-30 20:15
[1. Fiscal 2026 First Quarter Results Overview](index=1&type=section&id=1.%20Fiscal%202026%20First%20Quarter%20Results%20Overview) [1.1 Executive Summary of Financial Performance](index=1&type=section&id=1.1%20Executive%20Summary%20of%20Financial%20Performance) NIKE, Inc. reported fiscal 2026 first quarter revenues of **$11.7 billion**, a **1%** increase reported, with gross margin down **320 bps** and diluted EPS decreasing **30%** to **$0.49** Fiscal 2026 First Quarter Key Financial Highlights | Metric | Value (millions) | Reported % Change YoY | Currency-Neutral % Change YoY | | :--- | :--- | :--- | :--- | | Total Revenues | $11,700 | 1 % | -1 % | | NIKE Direct Revenues | $4,500 | -4 % | -5 % | | Wholesale Revenues | $6,800 | 7 % | 5 % | | Gross Margin | 42.2 % | -320 bps | | | Diluted EPS | $0.49 | -30 % | | [1.2 Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) Management noted progress in North America and Wholesale, expressing confidence in the 'Sport Offense' strategy despite non-linear recovery and external headwinds - NIKE drove progress through Win Now actions in priority areas of North America, Wholesale, and Running[3](index=3&type=chunk) - Confidence in the new alignment in the Sport Offense as key to maximizing NIKE, Inc.'s complete portfolio over the long-term[3](index=3&type=chunk) - Progress will not be linear as dimensions of the business recover on different timelines, navigating several external headwinds[3](index=3&type=chunk) [2. Consolidated Financial Statements](index=3&type=section&id=2.%20Consolidated%20Financial%20Statements) [2.1 Consolidated Statements of Income](index=3&type=section&id=2.1%20Consolidated%20Statements%20of%20Income) Revenues increased **1%** to **$11.72 billion**, but gross profit decreased **6%** due to a **320 bps** margin decline, leading to a **31%** net income drop to **$727 million** Consolidated Statements of Income (Three Months Ended August 31) | Metric (in millions, except per share data) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $11,720 | $11,589 | 1 % | | Cost of sales | $6,777 | $6,332 | 7 % | | Gross profit | $4,943 | $5,257 | -6 % | | Gross margin | 42.2 % | 45.4 % | | | Total selling and administrative expense | $4,016 | $4,048 | -1 % | | Income before income taxes | $922 | $1,307 | -29 % | | Income tax expense | $195 | $256 | -24 % | | Effective tax rate | 21.1 % | 19.6 % | | | NET INCOME | $727 | $1,051 | -31 % | | Diluted EPS | $0.49 | $0.70 | -30 % | [2.1.1 Revenue Breakdown](index=3&type=section&id=2.1.1%20Revenue%20Breakdown) This section details revenue and cost of sales performance, showing a slight revenue increase but a notable rise in cost of sales Revenue and Cost of Sales Performance | Metric (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $11,720 | $11,589 | 1 % | | Cost of sales | $6,777 | $6,332 | 7 % | | Gross profit | $4,943 | $5,257 | -6 % | [2.1.2 Gross Margin and Profitability](index=3&type=section&id=2.1.2%20Gross%20Margin%20and%20Profitability) Gross margin significantly declined by **320 basis points** to **42.2%**, primarily due to lower average selling prices and higher tariffs Gross Margin Performance | Metric | 8/31/2025 | 8/31/2024 | Change | | :--- | :--- | :--- | :--- | | Gross margin | 42.2 % | 45.4 % | -320 bps | - Gross margin decreased primarily due to lower average selling price, reflecting higher discounts and channel mix, as well as higher tariffs in North America[6](index=6&type=chunk) [2.1.3 Operating Expenses](index=3&type=section&id=2.1.3%20Operating%20Expenses) Total selling and administrative expense saw a slight decrease, driven by lower demand creation expense offset by flat operating overhead Selling and Administrative Expense (Three Months Ended August 31) | Expense Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Demand creation expense | $1,188 | $1,226 | -3 % | | Operating overhead expense | $2,828 | $2,822 | 0 % | | Total selling and administrative expense | $4,016 | $4,048 | -1 % | | % of revenues | 34.3 % | 34.9 % | | - Demand creation expense decreased primarily due to lower brand marketing expense reflecting higher investment in key sports events in the prior year, partially offset by higher sports marketing expense in the current year[6](index=6&type=chunk) - Operating overhead expense was flat, primarily due to higher wage-related expense, offset by lower other administrative costs[6](index=6&type=chunk) [2.1.4 Net Income and Earnings Per Share](index=3&type=section&id=2.1.4%20Net%20Income%20and%20Earnings%20Per%20Share) Net income decreased significantly by **31%** to **$727 million**, with diluted EPS falling **30%** to **$0.49**, impacted by a higher effective tax rate Net Income and EPS (Three Months Ended August 31) | Metric | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | NET INCOME | $727 million | $1,051 million | -31 % | | Basic EPS | $0.49 | $0.70 | -30 % | | Diluted EPS | $0.49 | $0.70 | -30 % | Effective Tax Rate | Metric | 8/31/2025 | 8/31/2024 | | :--- | :--- | :--- | | Effective tax rate | 21.1 % | 19.6 % | - The effective tax rate increased to **21.1%** from 19.6% primarily due to decreased benefits from stock-based compensation[6](index=6&type=chunk) [2.2 Consolidated Balance Sheets](index=4&type=section&id=2.2%20Consolidated%20Balance%20Sheets) Total assets decreased **1%** to **$37.33 billion**, driven by lower cash and investments, while current liabilities rose **3%** and shareholders' equity fell **3%** Consolidated Balance Sheet Summary (August 31) | Metric (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | TOTAL ASSETS | $37,334 | $37,867 | -1 % | | Total current liabilities | $10,911 | $10,628 | 3 % | | Shareholders' equity | $13,468 | $13,944 | -3 % | [2.2.1 Assets](index=4&type=section&id=2.2.1%20Assets) Total current assets decreased by **5%**, primarily due to significant reductions in cash and equivalents and short-term investments Current Assets (August 31) | Asset Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Cash and equivalents | $7,024 | $8,485 | -17 % | | Short-term investments | $1,551 | $1,809 | -14 % | | Accounts receivable, net | $4,962 | $4,764 | 4 % | | Inventories | $8,114 | $8,253 | -2 % | | Prepaid expenses and other current assets | $2,247 | $1,729 | 30 % | | Total current assets | $23,898 | $25,040 | -5 % | - Inventories were down **2%** compared to the prior year, reflecting a decrease in units, partially offset by increased product costs, primarily due to higher tariffs in North America[12](index=12&type=chunk) - Cash and equivalents and short-term investments were down approximately **$1.7 billion** from last year, as cash generated by operations was more than offset by cash dividends, share repurchases, bond repayment and capital expenditures[12](index=12&type=chunk) [2.2.2 Liabilities and Shareholders' Equity](index=4&type=section&id=2.2.2%20Liabilities%20and%20Shareholders'%20Equity) Total current liabilities increased by **3%**, driven by higher accounts payable and accrued liabilities, while shareholders' equity decreased by **3%** Current Liabilities and Shareholders' Equity (August 31) | Category (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | Current portion of long-term debt | $0 | $1,000 | -100 % | | Accounts payable | $3,772 | $3,357 | 12 % | | Accrued liabilities | $5,923 | $5,075 | 17 % | | Total current liabilities | $10,911 | $10,628 | 3 % | | Shareholders' equity | $13,468 | $13,944 | -3 % | [3. Divisional and Brand Performance](index=5&type=section&id=3.%20Divisional%20and%20Brand%20Performance) [3.1 NIKE Brand Divisional Revenues](index=5&type=section&id=3.1%20NIKE%20Brand%20Divisional%20Revenues) NIKE Brand revenues grew **2%** reported to **$11.4 billion**, flat currency-neutral, with North America growing and Greater China declining significantly NIKE Brand Divisional Revenues (Reported % Change, Three Months Ended August 31) | Region | Footwear | Apparel | Equipment | Total | | :--- | :--- | :--- | :--- | :--- | | North America | 0 % | 11 % | 16 % | 4 % | | Europe, Middle East & Africa | 4 % | 11 % | 3 % | 6 % | | Greater China | -11 % | 1 % | -32 % | -9 % | | Asia Pacific & Latin America | 1 % | 7 % | -6 % | 2 % | | TOTAL NIKE BRAND | -1 % | 9 % | 4 % | 2 % | NIKE Brand Divisional Revenues (Currency-Neutral % Change, Three Months Ended August 31) | Region | Footwear | Apparel | Equipment | Total | | :--- | :--- | :--- | :--- | :--- | | North America | 0 % | 11 % | 16 % | 4 % | | Europe, Middle East & Africa | -2 % | 6 % | -2 % | 1 % | | Greater China | -12 % | 0 % | -33 % | -10 % | | Asia Pacific & Latin America | 0 % | 5 % | -7 % | 1 % | | TOTAL NIKE BRAND | -2 % | 7 % | 3 % | 0 % | - Currency-neutral growth in North America was offset by a decline in Greater China for the NIKE Brand[6](index=6&type=chunk) [3.2 Converse Brand Revenues](index=5&type=section&id=3.2%20Converse%20Brand%20Revenues) Converse revenues significantly declined by **27%** reported and **28%** currency-neutral, driven by declines across all territories Converse Revenues (Three Months Ended August 31) | Metric (in millions) | 8/31/2025 | 8/31/2024 | Reported % Change | Currency-Neutral % Change | | :--- | :--- | :--- | :--- | :--- | | Converse Revenues | $366 | $501 | -27 % | -28 % | - Converse revenues declined due to declines across all territories[6](index=6&type=chunk) [3.3 Earnings Before Interest and Taxes (EBIT) by Segment](index=6&type=section&id=3.3%20Earnings%20Before%20Interest%20and%20Taxes%20(EBIT)%20by%20Segment) Total NIKE, Inc. EBIT decreased **28%** to **$904 million**, with EBIT margin at **7.7%**, as all segments, especially Converse and Greater China, saw declines EBIT by Segment (Three Months Ended August 31) | Segment (in millions) | 8/31/2025 | 8/31/2024 | % Change | | :--- | :--- | :--- | :--- | | North America | $1,134 | $1,216 | -7 % | | Europe, Middle East & Africa | $735 | $792 | -7 % | | Greater China | $377 | $502 | -25 % | | Asia Pacific & Latin America | $350 | $402 | -13 % | | TOTAL NIKE BRAND | $1,404 | $1,685 | -17 % | | Converse | $39 | $121 | -68 % | | TOTAL NIKE, INC. EBIT | $904 | $1,264 | -28 % | | EBIT margin | 7.7 % | 10.9 % | | [4. Shareholder Returns](index=2&type=section&id=4.%20Shareholder%20Returns) [4.1 Shareholder Returns Overview](index=2&type=section&id=4.1%20Shareholder%20Returns%20Overview) NIKE, Inc. returned approximately **$714 million** to shareholders in Q1 through dividends and share repurchases, maintaining **23 years** of dividend increases - The Company returned approximately **$714 million** to shareholders in the first quarter[8](index=8&type=chunk) Shareholder Returns Q1 Fiscal 2026 | Metric | Amount (millions) | % Change YoY | | :--- | :--- | :--- | | Dividends | $591 | 6 % | | Share repurchases | $123 | | - NIKE has a strong track record of returns to shareholders, including **23 consecutive years** of increasing dividend payouts[8](index=8&type=chunk) - **1.8 million shares** were retired as part of the Company's four-year, **$18 billion** share repurchase program approved in June 2022[12](index=12&type=chunk) [5. Company Information and Disclosures](index=2&type=section&id=5.%20Company%20Information%20and%20Disclosures) [5.1 About NIKE, Inc.](index=2&type=section&id=5.1%20About%20NIKE,%20Inc.) NIKE, Inc. is a global leader in athletic footwear, apparel, and equipment, with Converse as its athletic lifestyle subsidiary - NIKE, Inc. is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities[10](index=10&type=chunk) - Converse, a wholly-owned NIKE, Inc. subsidiary brand, designs, markets and distributes athletic lifestyle footwear, apparel and accessories[10](index=10&type=chunk) [5.2 Forward-Looking Statements](index=2&type=section&id=5.2%20Forward-Looking%20Statements) This section discloses forward-looking statements, which are subject to risks and uncertainties detailed in SEC filings, potentially causing actual results to differ - This press release contains forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially[11](index=11&type=chunk) - These risks and uncertainties are detailed from time to time in reports filed by NIKE with the U.S. Securities and Exchange Commission (SEC), including Forms 8-K, 10-Q and 10-K[11](index=11&type=chunk) [5.3 Conference Call Information](index=2&type=section&id=5.3%20Conference%20Call%20Information) NIKE, Inc. management hosted a conference call on September 30, 2025, to discuss Q1 results, with a live broadcast and archived version available online - NIKE, Inc. management hosted a conference call on September 30, 2025, at approximately 2:00 p.m. PT to review fiscal first quarter results[9](index=9&type=chunk) - The conference call was broadcast live via the Internet and an archived version is available at https://investors.nike.com through approximately October 21, 2025[9](index=9&type=chunk)
Veradigm (MDRX) - 2025 Q2 - Quarterly Results
2025-09-30 20:10
[Company Overview and Strategic Direction](index=1&type=section&id=Company%20Overview%20and%20Strategic%20Direction) [Introduction and Key Updates](index=1&type=section&id=Introduction%20and%20Key%20Updates) Veradigm released Q2 2025 estimates, reaffirmed FY2025 outlook, and appointed Donald Trigg as CEO - Veradigm provided **Q2 2025 financial estimates**, details on **recent financing activities**, and **reaffirmed its FY2025 outlook**[1](index=1&type=chunk) - Donald Trigg joined Veradigm as **Chief Executive Officer and Board member** on **September 2, 2025**[2](index=2&type=chunk) [New Leadership and Strategic Vision](index=1&type=section&id=New%20Leadership%20and%20Strategic%20Vision) New CEO Donald Trigg outlined plans to boost profitability, revive growth, and ensure timely SEC filings - CEO Don Trigg outlined Veradigm's immediate path: **enhance profitability**, **revitalize growth**, and **timely complete SEC financial filings**[3](index=3&type=chunk) - The company possesses a **large national physician practice base** and **differentiated data assets** offering a 'mainstream health' perspective[3](index=3&type=chunk) [About Veradigm](index=2&type=section&id=About%20Veradigm) Veradigm is a healthcare technology company providing advanced insights and data-driven solutions - Veradigm is a healthcare technology company that creates value through its **unique combination of platform, data, expertise, connectivity, and scale**[9](index=9&type=chunk) - The Veradigm network provides **advanced insights, technology, and data-driven solutions** for healthcare providers, payers, and the biopharmaceutical market[9](index=9&type=chunk) [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) [Preliminary Unaudited Financial Overview](index=1&type=section&id=Preliminary%20Unaudited%20Financial%20Overview) Veradigm reported preliminary Q2 2025 GAAP revenue of $145-$148 million, with $350M cash and $283M debt Financial Metrics Overview | Metric | Q2 2025 Estimate | YoY Change (Midpoint) | | :----- | :--------------- | :--------------------- | | Revenue (GAAP) | $145 million - $148 million | -2% | | Cash & Equivalents (as of Jun 30, 2025) | $350 million | Increase of ~$78M from Mar 31, 2025 | | Debt (as of Jun 30, 2025) | $283 million | | [Revenue Performance](index=4&type=section&id=Revenue%20Performance) Q2 2025 GAAP revenue projected at $145-$148 million, with provider revenue at $115-$117 million Revenue Breakdown | Revenue Segment | Q2 2025 (Estimate) | Q2 2024 | H1 2025 (Estimate) | H1 2024 | | :-------------- | :----------------- | :-------- | :----------------- | :-------- | | Provider Revenue (GAAP) | $115 million - $117 million | $119 million - $120 million | $228 million - $232 million | $234 million - $236 million | | Payer & Life Sciences Revenue (GAAP) | $30 million - $31 million | $29 million - $30 million | $61 million - $63 million | $58 million - $60 million | | **Total Veradigm Revenue (GAAP)** | **$145 million - $148 million** | **$148 million - $150 million** | **$289 million - $295 million** | **$292 million - $296 million** | [Cash and Debt Position](index=5&type=section&id=Cash%20and%20Debt%20Position) As of June 30, 2025, cash and equivalents totaled $350 million, up $78M from March 31, with total debt at $283M Cash and Debt Summary | Metric | Jun 30, 2025 | Dec 31, 2024 | | :----- | :------------ | :---------------- | | Cash & Cash Equivalents | $350 million | $294 million | | Debt | $283 million | $208 million | - Cash and equivalents increased by approximately **$78 million** from March 31, 2025, reflecting **$72 million in net debt financing inflows**, **$23 million in net portfolio activity inflows**, **$7 million in capital expenditure outflows**, and **$10 million in net operating activity outflows**[5](index=5&type=chunk) [Operational Highlights](index=2&type=section&id=Operational%20Highlights) Q2 2025 commercial team secured over $30 million in ACV, consistent with Q1, with stable revenue - The commercial team completed over **$30 million in annual contract value (ACV) transactions** in Q2 2025, consistent with Q1[7](index=7&type=chunk) - The interim CFO stated that **stable revenue performance** and a **robust capital base** are foundational pillars for the company's future success[7](index=7&type=chunk) [Financing Activities](index=1&type=section&id=Financing%20Activities) [Convertible Notes Repurchases](index=1&type=section&id=Convertible%20Notes%20Repurchases) Veradigm completed two convertible note repurchases totaling $230 million, reducing outstanding notes - On July 1, 2025, the company repurchased approximately **$180 million of convertible notes** using cash on hand, including **$164 million in principal** and **$16 million in contractual repurchase premium plus accrued interest**[5](index=5&type=chunk) - On September 29, 2025, the company repurchased approximately **$50 million of convertible notes** using cash on hand, including **$44 million in principal** and **$6 million in contractual repurchase premium plus accrued interest**[5](index=5&type=chunk) [Debt Structure Post-Repurchases](index=2&type=section&id=Debt%20Structure%20Post-Repurchases) Post-repurchases as of September 29, 2025, Veradigm's debt is primarily $75 million from a senior secured term loan - As of September 29, 2025, post-convertible note repurchases, the majority of the company's debt consists of **$75 million outstanding** under its senior secured term loan facility[6](index=6&type=chunk) - As of September 29, 2025, the company had **108.9 million common shares outstanding** and **10.6 million unvested restricted stock units**[6](index=6&type=chunk) [Fiscal Year 2025 Outlook](index=2&type=section&id=Fiscal%20Year%202025%20Outlook) [Reaffirmed Financial Expectations](index=2&type=section&id=Reaffirmed%20Financial%20Expectations) Veradigm reaffirmed FY2025 outlook, projecting GAAP revenue flat with FY2024 ($583-$588 million) and positive net cash FY 2025 Financial Outlook | Metric | FY 2025 Outlook | FY 2024 Estimate Range | | :----- | :------------------ | :---------------------- | | Revenue (GAAP) | Largely Flat | $583 million - $588 million | | Net Cash | Expected to Remain Positive | | [Investor Relations](index=2&type=section&id=Investor%20Relations) [Conference Call and Webcast Details](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Details) Veradigm management will host an investor conference call and webcast on October 1, 2025, at 8:00 AM ET - Veradigm management plans to host an **investor conference call and webcast** on **October 1, 2025, at 8:00 AM ET**[7](index=7&type=chunk) - Participants can access the call via the **Veradigm Investor Relations website** or by dialing **877-405-1224** or **201-389-0848 (Access ID 13755960)**, with a replay available on the website for one year[8](index=8&type=chunk) [Legal and Forward-Looking Statements](index=3&type=section&id=Legal%20and%20Forward-Looking%20Statements) [Disclaimer on Preliminary Results](index=3&type=section&id=Disclaimer%20on%20Preliminary%20Results) Preliminary, unaudited financial estimates are subject to change upon completion of financial closing procedures - The financial performance estimates in this press release are **preliminary, unaudited results**, and final results may change upon completion of the company's financial closing procedures[12](index=12&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This release contains forward-looking statements based on management's beliefs, subject to risks like unlisted common stock, delayed reporting, internal control issues, SEC investigation, and litigation - This press release contains **forward-looking statements** based on management's current beliefs and expectations regarding future events, subject to **significant risks and uncertainties**[13](index=13&type=chunk) - Key factors that could cause actual results to differ materially from forward-looking statements include risks such as **common stock not trading on a national securities exchange**, **delayed financial reporting**, **internal control deficiencies**, **SEC investigation**, **litigation**, **leadership recruitment**, and **additional indebtedness**[14](index=14&type=chunk)
Paychex(PAYX) - 2026 Q1 - Quarterly Report
2025-09-30 20:02
Filing Information This chapter presents the company's quarterly report filing information, including the reporting period, corporate details, and registrant status - The document is a Quarterly Report on Form 10-Q for the quarterly period ended **August 31, 2025**[1](index=1&type=chunk)[2](index=2&type=chunk) - **Paychex, Inc.** is a Delaware corporation, with its principal executive offices in Rochester, NY[2](index=2&type=chunk)[3](index=3&type=chunk) Registrant Status and Stock Information | Metric | Value | | :------------------------------------ | :-------------------- | | Filer Status | Large accelerated filer | | Common Stock Trading Symbol | PAYX | | Exchange Registered | Nasdaq Global Select Market | | Common Stock Outstanding (as of Aug 31, 2025) | 359,894,143 shares | PART I. FINANCIAL INFORMATION This part presents the unaudited consolidated financial statements and management's discussion and analysis of financial condition and operations [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Paychex, Inc.'s unaudited consolidated financial statements for the three months ended August 31, 2025, covering income, balance sheets, equity, and cash flows [Consolidated Statements of Income and Comprehensive Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Consolidated Statements of Income and Comprehensive Income (YoY Change) | Metric | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | Change (%) | | :---------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :--------- | | **Revenue:** | | | | | Management Solutions | $1,163.3 | $961.7 | 21.0% | | PEO and Insurance Solutions | $329.1 | $319.3 | 3.1% | | Total service revenue | $1,492.4 | $1,281.0 | 16.5% | | Interest on funds held for clients | $47.6 | $37.5 | 26.9% | | Total revenue | $1,540.0 | $1,318.5 | 16.8% | | **Expenses:** | | | | | Cost of service revenue | $413.8 | $380.0 | 8.9% | | Selling, general and administrative expenses | $584.3 | $391.8 | 49.1% | | Total expenses | $998.1 | $771.8 | 29.3% | | Operating income | $541.9 | $546.7 | (0.9%) | | Interest expense | $(68.2) | $(9.6) | 610.4% | | Other income, net | $23.8 | $20.0 | 19.0% | | Income before income taxes | $497.5 | $557.1 | (10.7%) | | Income taxes | $113.7 | $129.7 | (12.4%) | | Net income | $383.8 | $427.4 | (10.2%) | | Other comprehensive income, net of tax | $28.7 | $64.8 | (55.7%) | | Comprehensive income | $412.5 | $492.2 | (16.2%) | | Basic earnings per share | $1.07 | $1.19 | (10.1%) | | Diluted earnings per share | $1.06 | $1.18 | (10.2%) | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheets (QoQ Change) | Metric | August 31, 2025 (Millions) | May 31, 2025 (Millions) | Change (%) | | :------------------------------------------ | :------------------------- | :------------------------ | :--------- | | **Assets:** | | | | | Cash and cash equivalents | $809.0 | $1,628.6 | (50.3%) | | Corporate investments | $861.9 | $34.5 | 2398.3% | | Funds held for clients | $4,927.4 | $4,813.3 | 2.4% | | Total current assets | $9,040.0 | $8,916.5 | 1.4% | | Total assets | $16,663.0 | $16,564.1 | 0.6% | | **Liabilities:** | | | | | Client fund obligations | $4,948.4 | $4,867.0 | 1.7% | | Total current liabilities | $7,128.7 | $6,956.3 | 2.5% | | Long-term borrowings, net of debt issuance costs | $4,550.3 | $4,548.4 | 0.0% | | Total liabilities | $12,692.4 | $12,436.1 | 2.1% | | **Stockholders' Equity:** | | | | | Total stockholders' equity | $3,970.6 | $4,128.0 | (3.8%) | [Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Consolidated Statements of Stockholders' Equity (QoQ Change) | Metric | Balance as of May 31, 2025 (Millions) | For the three months ended August 31, 2025 (Millions) | Balance as of August 31, 2025 (Millions) | | :------------------------------------------ | :------------------------------------ | :---------------------------------------------------- | :----------------------------------- | | Total Stockholders' Equity | $4,128.0 | | $3,970.6 | | Net income | | $383.8 | | | Unrealized gains on securities, net of tax | | $24.3 | | | Cash dividends declared ($1.08 per share) | | $(389.0) | | | Repurchases of common shares | | $(160.1) | | | Stock-based compensation costs | | $26.8 | | | Foreign currency translation adjustment | | $4.4 | | | Activity related to equity-based plans | | $(47.6) | | - The company repurchased **1.1 million common shares** for **$160.1 million** during the three months ended August 31, 2025, at a weighted-average price of **$145.59 per share**[15](index=15&type=chunk) - Cash dividends declared were **$1.08 per share**, totaling **$389.0 million** for the three months ended August 31, 2025[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows (YoY Change) | Activity | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | Change (Millions) | | :-------------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | :---------------- | | Net cash provided by operating activities | $718.4 | $546.1 | $172.3 | | Net cash used in investing activities | $(1,302.7) | $(110.0) | $(1,192.7) | | Net cash used in financing activities | $(515.4) | $(485.0) | $(30.4) | | Net change in cash, restricted cash, and equivalents | $(1,099.7) | $(48.9) | $(1,050.8) | | Cash, restricted cash, and equivalents, end of period | $1,634.6 | $1,848.1 | $(213.5) | - Investing activities for the three months ended August 31, 2025, included **$3,731.9 million** in purchases of AFS securities and **$2,547.3 million** in proceeds from sales and maturities of AFS securities[17](index=17&type=chunk) - Financing activities for the three months ended August 31, 2025, included **$389.1 million** in dividends paid and **$160.1 million** in repurchases of common shares[17](index=17&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note A: Description of Business, Basis of Presentation, and Significant Accounting Policies](index=7&type=section&id=Note%20A:%20Description%20of%20Business,%20Basis%20of%20Presentation,%20and%20Significant%20Accounting%20Policies) Paychex, Inc. is a human capital management (HCM) company offering HR, employee benefits, insurance, and payroll processing services across the U.S. and parts of Europe, operating as a single segment - Paychex is an industry-leading human capital management (HCM) company providing technology and advisory services in HR, employee benefit solutions, insurance, and payroll processing across the U.S. and parts of Europe, with operations also in India[19](index=19&type=chunk) - The company reports as **one segment**[19](index=19&type=chunk) Stock-Based Compensation Costs (YoY Change) | Metric | For the three months ended August 31, 2025 (Millions) | For the three months ended August 31, 2024 (Millions) | | :-------------------------- | :---------------------------------------------------- | :---------------------------------------------------- | | Stock-based compensation costs | $26.8 | $16.5 | - Recently issued ASUs (2023-09, 2024-03, 202
Better Choice pany (BTTR) - 2025 Q2 - Quarterly Report
2025-09-30 18:38
Cover Page & Preliminary Information [General Information](index=1&type=section&id=General%20Information) The section identifies SRx Health Solutions Inc. as a non-accelerated, smaller reporting company filing its Q2 2025 Form 10-Q - Filing Type: **Quarterly Report on Form 10-Q** for the period ended **June 30, 2025**[2](index=2&type=chunk) - Registrant Name: **SRx Health Solutions Inc.** (formerly **Better Choice Company, Inc.**)[2](index=2&type=chunk) - Trading Symbol: **SRXH** on **NYSE American**[3](index=3&type=chunk) - Filer Status: **Non-accelerated filer** and **Smaller reporting company**[4](index=4&type=chunk) - Common Stock Outstanding (as of **Sep 29, 2025**): **24,853,633 shares**[5](index=5&type=chunk) [Explanatory Note](index=3&type=section&id=EXPLANATORY%20NOTE) This note clarifies the business combination (Merger) on April 24, 2025, where SRx Canada merged with Better Choice Company, Inc - Business Combination Date: **April 24, 2025**[6](index=6&type=chunk) - Accounting Acquirer: **SRx Health Solutions, Inc.** (formerly **SRx Canada**)[7](index=7&type=chunk) - Legal Acquirer: **Better Choice Company, Inc.**[6](index=6&type=chunk) - Post-Merger Name: **SRx Health Solutions, Inc.**[7](index=7&type=chunk) [Forward-Looking Statements](index=5&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements discuss current expectations and projections relating to financial condition, results of operations, plans, objectives, future performance, and business[13](index=13&type=chunk) - Key risks include: ability to continue as a **going concern**, impact of **cyber-attacks**, business interruptions from geopolitical actions, ability to implement growth strategy, achieve/maintain profitability, loss of key management, ability to generate cash flow or raise capital, dependence on subsidiaries, product development, competition, customer retention, product allegations, supply chain management, regulatory compliance (**FDA**, **FTC**, **USDA**), product recalls, shifting customer demand, and inflationary pressures[14](index=14&type=chunk)[18](index=18&type=chunk) [Note Regarding Trademarks](index=6&type=section&id=NOTE%20REGARDING%20TRADEMARKS) This standard disclosure confirms the company's ownership or rights to use trademarks and trade names mentioned in the report - Company owns or has rights to use trademarks and trade names in its business operations[17](index=17&type=chunk) - References without ® or ™ symbols do not waive rights to these trademarks and trade names[17](index=17&type=chunk) Part I [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for SRx Health Solutions Inc., including the statements of operations, balance sheets, shareholders' equity, and cash flows, along with comprehensive notes detailing the company's financial position, performance, and significant accounting policies. The statements reflect the impact of the recent reverse merger and highlight the company's ongoing liquidity challenges and going concern uncertainty [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations, detailing the company's financial performance over specified periods | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | 11,447 | 42,670 | (31,223) | (73.2%) | | Cost of goods sold | 8,028 | 33,254 | (25,226) | (75.9%) | | Gross margin | 3,419 | 9,416 | (5,997) | (63.7%) | | Operating loss | (17,422) | (1,322) | (16,100) | (1217.9%) | | Net loss after taxes | (15,133) | (3,115) | (12,018) | (385.8%) | | Net loss per share, basic | (0.74) | (0.14) | (0.60) | (428.6%) | | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net sales | 41,082 | 117,122 | (76,040) | (65.0%) | | Cost of goods sold | 30,786 | 93,695 | (62,909) | (67.1%) | | Gross margin | 10,296 | 23,427 | (13,131) | (56.1%) | | Operating loss | (32,177) | (8,200) | (23,977) | (292.4%) | | Net loss after taxes | (29,745) | (11,077) | (18,668) | (168.5%) | | Net loss per share, basic | (1.54) | (0.50) | (1.04) | (208.0%) | [Unaudited Condensed Consolidated Balance Sheets](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section provides the unaudited condensed consolidated balance sheets, outlining the company's financial position at specific dates | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Total Assets | 33,985 | 33,764 | 221 | 0.7% | | Total Liabilities | 79,865 | 88,884 | (9,019) | (10.1%) | | Total Shareholders' Deficit | (45,880) | (55,119) | 9,239 | 16.8% | | Cash and cash equivalents | 912 | 106 | 806 | 760.4% | | Working Capital Deficiency | (49,581) | (67,667) | 18,086 | 26.7% | [Unaudited Condensed Consolidated Statements of Shareholders' Equity (Deficit)](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Deficit%29) This section details the unaudited condensed consolidated statements of shareholders' equity (deficit), showing changes in equity over time | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Common Stock Amount | 21 | 22 | (1) | (4.5%) | | Additional Paid-in Capital | 38,642 | 12,491 | 26,151 | 209.4% | | Accumulated Deficit | (98,424) | (70,031) | (28,393) | (40.5%) | | Accumulated Other Comprehensive Loss | 13,881 | 2,399 | 11,482 | 478.6% | | Total Shareholders' Deficit | (45,880) | (55,119) | 9,239 | 16.8% | - Shares redeemed in connection with business combinations: (**26,323,200 shares**), reducing common stock by **$26K** and additional paid-in capital by **$7,244K**[26](index=26&type=chunk) - Shares issued for private placement, post-merger: **1,280,000 shares**, increasing common stock by **$9K** and additional paid-in capital by **$8,791K**[26](index=26&type=chunk) - Fair value of shares issued to acquire Better Choice: **8,898,069 shares**, increasing common stock by **$9K** and additional paid-in capital by **$8,930K**[26](index=26&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows, summarizing cash inflows and outflows from operating, investing, and financing activities | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Operating activities | (15,744) | 613 | (16,357) | (2668.3%) |\ | Investing activities | 13,280 | (4,490) | 17,770 | (395.8%) |\ | Financing activities | 3,154 | 3,841 | (687) | (17.9%) |\n| Net increase (decrease) in cash | 690 | (36) | 726 | (2016.7%) |\ | Cash and cash equivalents, end of period | 912 | 488 | 424 | 86.9% | - Cash used in operating activities increased significantly due to a higher net loss, partially offset by non-cash adjustments and working capital changes[300](index=300&type=chunk) - Cash provided by investing activities increased due to proceeds from asset sales and cash acquired in the merger, offsetting prior period acquisitions[301](index=301&type=chunk) - Cash provided by financing activities decreased slightly, with private placement proceeds offset by senior secured facility paydowns[302](index=302&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements, covering significant accounting policies, the reverse merger, specific asset and liability accounts, revenue recognition, segment performance, income taxes, related party transactions, share activity, financial instruments, asset disposals, commitments, and crucial subsequent events like the CCAA filing [Note 1 – Nature of business and summary of significant accounting policies](index=11&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20business%20and%20summary%20of%20significant%20accounting%20policies) This note outlines the company's business operations, the impact of the reverse merger, and key accounting policies - Company operates as a vertically integrated healthcare organization (Canadian pharmacy and healthcare services via **SRx Canada**) and a branded pet wellness company (premium pet health and nutrition products via **Halo**)[35](index=35&type=chunk) - Reverse Merger: **SRx Canada** (Accounting Acquirer) consummated a business combination with **Better Choice Company, Inc.** (Legal Acquirer) on **April 24, 2025**. **Better Choice** changed its name to **SRx Health Solutions, Inc.**[32](index=32&type=chunk)[33](index=33&type=chunk) - **Halo** Spin-Out Distribution: On **April 25, 2025**, **17%** of **Halo's** capital stock was distributed to **Better Choice** stockholders, treated as a common control equity reorganization with **Halo** remaining fully consolidated[36](index=36&type=chunk)[38](index=38&type=chunk) - **SRx Canada** filed for protection under the **Companies' Creditors Arrangement Act (Canada)** ('**CCAA**') on **August 12, 2025**[39](index=39&type=chunk) [Note 2 – Basis of Preparation](index=11&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Preparation) This note details the basis of financial statement preparation, identifies an immaterial error, and highlights going concern uncertainties - Financial statements prepared in accordance with **U.S. GAAP** and **SEC rules** for interim reports[40](index=40&type=chunk) - Immaterial error identified in **FY2024** revenue related to billed but undispensed prescriptions, resulting in a **$1.8 million** reduction to accumulated deficit as of **September 30, 2024**[43](index=43&type=chunk)[44](index=44&type=chunk) - Going Concern Uncertainty: Company has accumulated deficit (**$98.4M**), working capital deficiency (**$49.6M**), recurring net losses (**$15.1M** for **3 months**, **$29.7M** for **9 months ended June 30, 2025**), and non-compliance with **CWB** debt covenants[49](index=49&type=chunk)[50](index=50&type=chunk) - Management plans to address going concern include raising capital, debt restructuring, cost control, scaling high-margin services, and divesting non-core assets. However, there is no assurance of success[53](index=53&type=chunk)[59](index=59&type=chunk) - **CCAA** Filing: **SRx Canada** initiated **CCAA** proceedings in **August 2025**, leading to operational changes (divestiture, workforce reductions) to stabilize liquidity, but outcome remains uncertain[54](index=54&type=chunk) - U.S. pet food business (legacy Better Choice) faces significant liquidity constraints and operating losses, with management evaluating strategic alternatives[55](index=55&type=chunk) [Note 3 – Summary of significant accounting policies](index=14&type=section&id=Note%203%20%E2%80%93%20Summary%20of%20significant%20accounting%20policies) This note summarizes the company's significant accounting policies, including segment reporting, business combinations, revenue recognition, and asset impairment - Segment Information: Following the reverse merger, the Company reports two segments: **Health Solutions** (Canadian pharmacy/healthcare) and **Consumer Products** (legacy **Halo** pet food business, primarily U.S.)[62](index=62&type=chunk)[63](index=63&type=chunk) - Business Combinations: Accounted for using the acquisition method (**ASC 805**). Goodwill is measured as excess consideration over net identifiable assets. A bargain purchase gain is recognized if net assets acquired exceed consideration[64](index=64&type=chunk)[66](index=66&type=chunk)[70](index=70&type=chunk) - Revenue Recognition: For healthcare services, revenue is recognized when control of goods/services transfers (e.g., prescription dispensed, service completed). For **Halo** pet food, revenue is recognized upon product shipment[78](index=78&type=chunk)[80](index=80&type=chunk)[85](index=85&type=chunk) - Impairment of Non-Financial Assets: Long-lived assets (property, equipment, finite-lived intangibles, ROU assets) are reviewed for impairment when circumstances indicate carrying amount may not be recoverable (**ASC 360**). Goodwill is tested annually or more frequently (**ASC 350**)[105](index=105&type=chunk)[106](index=106&type=chunk) - Share Repurchases: Board authorized a stock repurchase plan for up to **$6.5 million**. **76,800 shares** repurchased between **April 24, 2025**, and **June 30, 2025**[75](index=75&type=chunk) [Note 4 – Business Combinations](index=24&type=section&id=Note%204%20%E2%80%93%20Business%20Combinations) This note details the reverse merger, the resulting bargain purchase gain, acquisition-related costs, and prior pharmacy acquisitions - Reverse Merger (**April 24, 2025**): **Better Choice** issued **8,898,069 shares** and **19,701,935 exchangeable shares**. Former **SRx Canada** shareholders hold **~88%** of combined voting power. Accounted for as a reverse acquisition with **SRx Canada** as accounting acquirer[142](index=142&type=chunk)[143](index=143&type=chunk) - Bargain Purchase Gain: Preliminary gain of **$1.69 million** recognized in **Q2 2025** due to total consideration transferred being less than the fair value of net assets acquired[144](index=144&type=chunk)[150](index=150&type=chunk) - Acquisition-Related Costs: Issued **1,599,231 common shares** for advisory and professional services, totaling **$3.3 million**, expensed in **Q2 2025**[146](index=146&type=chunk) - Private Placement: Completed on **April 24, 2025**, issuing **1,280,000 common shares** and **2,756,697 pre-funded warrants** for **$8.8 million** gross proceeds[147](index=147&type=chunk) - Prior Pharmacy Acquisitions (**9 months ended June 30, 2024**): Acquired Elora Apothecary Ltd., Trailside Pharmacy Ltd., 0864009 B.C. Ltd. (Mediglen), and Vaughan Endoscopy Clinic Inc., totaling **$4.019 million** in consideration and **$2.441 million** in goodwill[152](index=152&type=chunk) [Note 5 – Trade and other receivables](index=27&type=section&id=Note%205%20%E2%80%93%20Trade%20and%20other%20receivables) This note provides a breakdown of trade and other receivables, including the allowance for current expected credit losses | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Receivables from third-party customers | 5,519 | 4,223 | 1,296 | 30.7% | | Other receivables | 2,460 | 2,883 | (423) | (14.7%) | | Sales and income tax receivables | 247 | 2,371 | (2,124) | (89.6%) | | Less: Allowance for CECL | (88) | (202) | 114 | (56.4%) | | Total Accounts Receivable, net | 8,138 | 9,275 | (1,137) | (12.3%) | - Allowance for current expected credit losses (**CECL**) decreased from **$202K** to **$88K**[165](index=165&type=chunk) [Note 6 – Inventory](index=28&type=section&id=Note%206%20%E2%80%93%20Inventory) This note presents the composition of the company's inventory, including finished goods and packaging supplies | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Finished goods | 4,582 | 3,369 | 1,213 | 36.0% | | Inventory packaging and supplies | 550 | - | 550 | N/A | | Total Inventory, net | 5,132 | 3,369 | 1,763 | 52.3% | [Note 7 – Fixed assets](index=28&type=section&id=Note%207%20%E2%80%93%20Fixed%20assets) This note details the company's fixed assets, accumulated depreciation, and depreciation expense | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Total fixed assets | 7,698 | 11,207 | (3,509) | (31.3%) | | Accumulated depreciation | (4,628) | (5,176) | 548 | (10.6%) | | Fixed assets, net | 3,070 | 6,031 | (2,961) | (49.1%) | - Depreciation expense for the **nine months ended June 30, 2025**, was **$0.5 million**, compared to **$0.4 million** for the same period in **2024**[167](index=167&type=chunk) [Note 8 – Intangible assets](index=28&type=section&id=Note%208%20%E2%80%93%20Intangible%20assets) This note outlines the company's intangible assets, amortization expense, and impairment losses | Metric (USD in thousands) | June 30, 2025 (Net Carrying Amount) | September 30, 2024 (Net Carrying Amount) | Change ($) | Change (%) | | :------------------------ | :---------------------------------- | :--------------------------------------- | :--------- | :--------- | | Computer software | 30 | 50 | (20) | (40.0%) | | Domain/website | 1 | 1 | 0 | 0.0% | | Customer lists | 424 | 6,210 | (5,786) | (93.2%) | | Charter license | 669 | 740 | (71) | (9.6%) | | Total Intangible Assets | 1,124 | 7,001 | (5,877) | (83.9%) | - Amortization expense for the **nine months ended June 30, 2025**, was **$2.4 million**, compared to **$1.0 million** for the same period in **2024**, an increase of **140%**[169](index=169&type=chunk) - Impairment loss of **$2.7 million** recognized during the **nine months ended June 30, 2025**, related to customer list intangible assets, driven by a decline in estimated fair value[170](index=170&type=chunk) [Note 9 – Goodwill](index=29&type=section&id=Note%209%20%E2%80%93%20Goodwill) This note details the company's goodwill, including impairment charges and their underlying causes | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Beginning balance | - | 18,346 | (18,346) | (100.0%) | | Acquisitions | - | 2,438 | (2,438) | (100.0%) | | Impairment expense | - | (19,669) | 19,669 | (100.0%) | | Ending balance | - | - | 0 | N/A | - A goodwill impairment charge of **$19.7 million** was recognized for the **three and twelve months ended September 30, 2024**, for the Pharmacy and Prescription Drug Sales reporting unit[173](index=173&type=chunk) - Impairment was primarily due to the loss of a key contract, reduced projected revenue, increased pricing pressure, lower long-term growth expectations, and a higher discount rate[172](index=172&type=chunk) [Note 10 – Leases](index=30&type=section&id=Note%2010%20%E2%80%93%20Leases) This note provides information on the company's operating lease assets, liabilities, and associated costs | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Operating lease assets | 4,717 | 6,490 | (1,773) | (27.3%) | | Total Operating lease liabilities | 5,044 | 7,092 | (2,048) | (28.9%) | - Total lease cost for the **nine months ended June 30, 2025**, was **$1.707 million**, a decrease of **6%** from **$1.816 million** in **2024**[176](index=176&type=chunk) - Weighted average remaining lease term is **4.78 years**, with a weighted average discount rate of **7.74%**[176](index=176&type=chunk) [Note 11 – Debt](index=31&type=section&id=Note%2011%20%E2%80%93%20Debt) This note details the company's debt structure, including short-term borrowings, CWB facilities, and covenant non-compliance | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Short-term borrowings | 4,077 | 3,715 | 362 | 9.7% | | CWB Term Facilities | 23,054 | 30,603 | (7,549) | (24.7%) | | Other borrowings | 3,685 | 1,668 | 2,017 | 120.9% | | Total Debt | 30,816 | 35,986 | (5,170) | (14.4%) | | Current portion of long-term borrowings | 24,836 | 31,575 | (6,739) | (21.3%) | | Long-term portion of other borrowings | 1,903 | 696 | 1,207 | 173.4% | - Company was not in compliance with **CWB** loan covenants (**Senior Funded Debt to Adjusted EBITDA < 4.0x** and **Fixed Charge Coverage Ratio > 1.0x**) as of **June 30, 2025**, and **September 30, 2024**, leading to reclassification of the entire **CWB** loan as a current liability[183](index=183&type=chunk) - Revolving Loan with **Better Choice Company Inc. (BTTR)** was converted into common shares upon the reverse merger on **April 24, 2025**, and is no longer outstanding[181](index=181&type=chunk)[182](index=182&type=chunk) [Note 12 – Convertible debentures](index=32&type=section&id=Note%2012%20%E2%80%93%20Convertible%20debentures) This note describes the company's convertible debentures, including conversions and new issuances | Metric (USD in thousands) | June 30, 2025 | September 30, 2024 | Change ($) | Change (%) | | :------------------------ | :------------ | :----------------- | :--------- | :--------- | | Convertible debentures | 1,145 | 2,230 | (1,085) | (48.7%) | - **Better Choice** Convertible Note (**$1.45 million** principal) converted into common shares upon the reverse merger on **April 24, 2025**, and is no longer outstanding[190](index=190&type=chunk)[191](index=191&type=chunk) - During the **nine months ended June 30, 2025**, an additional **$1.0 million** in convertible debentures were issued[189](index=189&type=chunk) [Note 13 – Revenue](index=33&type=section&id=Note%2013%20%E2%80%93%20Revenue) This note provides a detailed breakdown of the company's revenue by channel for various periods | Revenue Channel (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Retail pharmacy | 6,790 | 41,438 | (34,648) | (83.6%) | 33,598 | 113,921 | (80,323) | (70.5%) | | Infusion services | 207 | 428 | (221) | (51.6%) | 724 | 948 | (224) | (23.6%) | | Specialty clinics | 142 | 111 | 31 | 27.9% | 411 | 417 | (6) | (1.4%) | | Wholesale distribution | 1 | 245 | (244) | (99.6%) | 31 | 612 | (581) | (95.0%) | | Patient support program | 193 | 262 | (69) | (26.3%) | 731 | 744 | (13) | (1.7%) | | Clinical trial | 213 | 7 | 206 | 2942.9% | 792 | 8 | 784 | 9800.0% | | Consumer packaged goods | 2,673 | - | 2,673 | N/A | 2,673 | - | 2,673 | N/A | | Other service revenue | 1,228 | 179 | 1,049 | 586.0% | 2,122 | 472 | 1,650 | 349.6% | | Total revenue | 11,447 | 42,670 | (31,223) | (73.2%) | 41,082 | 117,122 | (76,040) | (65.0%) | [Note 14 – Segment information](index=33&type=section&id=Note%2014%20%E2%80%93%20Segment%20information) This note outlines the company's two reportable segments: Health Solutions and Consumer Products, and their respective financial contributions - Company operates two reportable segments: Health Solutions (Canadian pharmacies, core business) and Consumer Products (legacy Halo pet food, primarily U.S.)[195](index=195&type=chunk) - CODM (Board of Directors) evaluates segments based on revenues, gross margin, and Adjusted EBITDA, but not total assets[196](index=196&type=chunk)[197](index=197&type=chunk) | Segment (USD in thousands) | 3 Months Ended June 30, 2025 (Net Sales) | 3 Months Ended June 30, 2024 (Net Sales) | 9 Months Ended June 30, 2025 (Net Sales) | 9 Months Ended June 30, 2024 (Net Sales) | | :------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Health Solutions | 8,774 | 42,670 | 38,409 | 117,122 | | Consumer Products | 2,673 | - | 2,673 | - | | Total | 11,447 | 42,670 | 41,082 | 117,122 | - U.S. revenue (Consumer Products) for **9 months ended June 30, 2025**, was **$2.673 million** (N/A in 2024). Canadian revenue (Health Solutions) for **9 months ended June 30, 2025**, was **$38.409 million**, down from **$117.122 million** in **2024**[201](index=201&type=chunk) - Long-lived assets in the U.S. increased to **$4.090 million** as of **June 30, 2025** (from **$0** in **2024**), while Canadian long-lived assets decreased to **$0.104 million** (from **$13.032 million** in **2024**)[202](index=202&type=chunk) [Note 15 – Income taxes](index=36&type=section&id=Note%2015%20%E2%80%93%20Income%20taxes) This note details the company's income tax provision, deferred tax income, and effective tax rates | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income tax provision | 100 | 300 | 800 | 200 | | Deferred tax income (expense) | 1,700 | (400) | 1,500 | 600 | - U.S. operations have a federal statutory tax rate of **21%**, but the effective tax rate was **less than 1%** due to a full valuation allowance against deferred tax assets related to net operating losses[205](index=205&type=chunk) [Note 16 – Related party transactions](index=36&type=section&id=Note%2016%20%E2%80%93%20Related%20party%20transactions) This note describes transactions with related parties, including working capital advances and balances due to former executives - Historical non-interest-bearing working capital advances with largest shareholder and common control entities were forgiven, resulting in a capital contribution[206](index=206&type=chunk)[207](index=207&type=chunk) - As of **June 30, 2025**, net related party balances transitioned to a payable position of **$82K** (from a receivable of **$81K** in **Sep 2024**)[210](index=210&type=chunk) - A **$1.4 million** balance due to former CEO Adesh Vora was recorded as an increase to beginning accumulated deficit and a non-cash capital distribution[208](index=208&type=chunk) [Note 17 – Share issuances and warrants](index=37&type=section&id=Note%2017%20%E2%80%93%20Share%20issuances%20and%20warrants) This note details the company's share issuances, private placements, and warrant activity | Metric | June 30, 2025 | September 30, 2024 | Change | | :------------------------ | :------------ | :----------------- | :----- | | Warrants Outstanding () | 3,075,042 | 232,438 | 2,842,604 | | Weighted average price ($)| 14.94 | 2.02 | 12.92 | - On **April 24, 2025**, issued **1,280,000 common shares** and **2,756,697 pre-funded warrants** for **$8.8 million** in a private placement[212](index=212&type=chunk) - Issued **1,941,120 shares** for settlement of **$2.9 million** inventory-related accounts payable and **$3.1 million** professional fee-related accounts payable during the **nine months ended June 30, 2025**[213](index=213&type=chunk) [Note 18 – Loss per share](index=38&type=section&id=Note%2018%20%E2%80%93%20Loss%20per%20share) This note presents the company's net loss per share, including basic and diluted calculations | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | (15,133) | (3,115) | (29,745) | (11,077) | | Weighted average shares (basic & diluted) | 20,401,138 | 21,922,889 | 19,334,671 | 22,005,842 | | Net loss per share (basic & diluted) | (0.74) | (0.14) | (1.54) | (0.50) | - Basic and diluted net loss per share are the same as potentially dilutive securities were anti-dilutive due to net losses[215](index=215&type=chunk)[216](index=216&type=chunk) [Note 19 – Share-based compensation](index=38&type=section&id=Note%2019%20%E2%80%93%20Share-based%20compensation) This note outlines the company's share-based compensation expense, incentive plans, and restricted stock unit activity | Metric (USD in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Share-based compensation expense | 2,900 | 800 | 4,500 | 2,600 | - Amended **2019 Incentive Award Plan** adopted post-Merger, authorizing **1,928,023 shares** for issuance[217](index=217&type=chunk)[222](index=222&type=chunk) - Granted **890,192 shares** of immediately vested restricted common stock in **April 2025** for performance bonus compensation (**$1.9 million** expense)[220](index=220&type=chunk) - **RSUs** outstanding decreased from **1,594,641** (**Sep 30, 2024**) to **0** (**June 30, 2025**) due to vesting and conversion in the Reverse Merger[222](index=222&type=chunk) [Note 20 – Financial instruments](index=39&type=section&id=Note%2020%20%E2%80%93%20Financial%20instruments) This note discusses the fair value of financial instruments, exposure to credit, liquidity, and market risks, and contractual maturities - Fair value of cash, receivables, and payables approximate carrying amounts due to short-term maturities[224](index=224&type=chunk) - Convertible debt classified as **Level 3** financial instrument due to unobservable inputs in valuation[225](index=225&type=chunk) - Company is exposed to credit risk, liquidity risk, and market risk (interest rate risk)[227](index=227&type=chunk) - Liquidity risk is monitored through cash flow forecasts and access to credit facilities[228](index=228&type=chunk) | Contractual Maturities (USD in thousands) | Year 1 (June 30, 2025) | Year 2 (June 30, 2025) | Total (June 30, 2025) | Year 1 (Sep 30, 2024) | Year 3 (Sep 30, 2024) | Total (Sep 30, 2024) | | :---------------------------------------- | :--------------------- | :--------------------- | :-------------------- | :-------------------- | :-------------------- | :------------------- | | Long-term borrowings | 24,836 | 1,903 | 26,739 | 31,575 | 696 | 32,271 | | Convertible debentures | 1,145 | - | 1,145 | 2,230 | - | 2,230 | | Due to related parties | 82 | - | 82 | 288 | - | 288 | | Short-term borrowings | 4,077 | - | 4,077 | 3,715 | - | 3,715 | | Trade and other payables | 41,638 | - | 41,638 | 41,697 | - | 41,697 | | Total | 71,778 | 1,903 | 73,681 | 79,505 | 696 | 80,201 | [Note 21 – Disposal of assets](index=40&type=section&id=Note%2021%20%E2%80%93%20Disposal%20of%20assets) This note details the gains recognized from the disposal of various assets during the period - Net total gain of **$4.3 million** from asset disposals for the **nine months ended June 30, 2025**[236](index=236&type=chunk) - Key asset sales include **Niagara Community Pharmacy Ltd.** (gain of **$1.3M**), **P.A. Pharmacy Limited** (gain of **$2.1M**), warehouse building (gain of **$0.4M**), **Clearbrook Pharmacy (1987)** (gain of **$0.4M**), and **Greg's Drug Ltd.** (gain of **$0.4M**)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Note 22 – Commitments and contingencies](index=40&type=section&id=Note%2022%20%E2%80%93%20Commitments%20and%20contingencies) This note addresses the company's involvement in legal proceedings, claims, and regulatory inquiries, and related loss contingencies - Company is involved in legal proceedings, claims, and regulatory inquiries in the ordinary course of business[237](index=237&type=chunk) - Loss contingencies are accrued when probable and estimable; management is not aware of any claims that would have a material adverse effect[237](index=237&type=chunk)[238](index=238&type=chunk) [Note 23 – Subsequent events](index=41&type=section&id=Note%2023%20%E2%80%93%20Subsequent%20events) This note discloses significant events occurring after the reporting period, including asset sales, financing activities, share cancellations, and the CCAA filing - Asset Sale: On **July 11, 2025**, sold assets of **3788602 Manitoba Ltd.** for **$1.8 million**, resulting in a gain of **$1.066 million**[240](index=240&type=chunk) - Equity Line of Credit (**ELOC**): On **July 7, 2025**, entered agreement to sell up to **$50 million** of common shares (capped at **19.99%** unless stockholder approval). Issued **$1 million** in Commitment Shares[241](index=241&type=chunk) - Convertible Note and Warrant Financing: On **July 7, 2025**, issued **$7.65 million** senior secured convertible notes (**8% interest**, due **July 8, 2027**, convertible at **$0.6274/share**) and warrants for **21,338,062 shares** (exercisable at **$0.6274**)[242](index=242&type=chunk) - Share Cancellation: On **August 1, 2025**, **18,839,332 shares** (common and exchangeable) were forfeited and cancelled by original founders/officers, representing **~46%** of fully diluted capital stock prior to settlement[243](index=243&type=chunk) - **CCAA** Filing: On **August 11, 2025**, **SRx Canada** commenced proceedings under the **Companies' Creditors Arrangement Act (Canada)** due to liquidity constraints and inability to refinance maturing obligations[244](index=244&type=chunk) - Pro-forma financial information for U.S. operations (not subject to **CCAA**) shows net income of **$1.710 million** for **3 months ended June 30, 2025**, and net loss of **$(0.651) million** for **9 months ended June 30, 2025**[247](index=247&type=chunk)[248](index=248&type=chunk) - Issued **2,193,355 shares** in **July 2025** for professional advisory fees (**$0.61/share** weighted average price)[249](index=249&type=chunk) - Share Exchange Agreement: On **August 21, 2025**, acquired **17%** interest in **Halo** from **Halo Spin-Out SPV, Inc.** by issuing **4,950,000 common shares**, regaining **100% ownership** of **Halo**[250](index=250&type=chunk) - Issued **2,396,697 shares** of restricted common stock to directors/officers/employees as performance bonus compensation in **August 2025** (**$0.40/share** weighted average price)[251](index=251&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=43&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial performance and condition for the nine months ended June 30, 2025, compared to the prior year. It details the business overview, recent corporate developments including the reverse merger and CCAA filing, and a comprehensive analysis of revenue, gross profit, operating expenses, and liquidity, emphasizing the significant challenges faced due to liquidity constraints and covenant non-compliance [Overview and Outlook](index=43&type=section&id=Overview%20and%20Outlook) This section provides an overview of SRx's integrated Canadian healthcare services business and its strategic outlook - **SRx** is a fully integrated Canadian healthcare services provider, focusing on specialty healthcare at the intersection of pharmacy, clinical services, and pharmaceutical distribution[255](index=255&type=chunk) - The **SRx Network** includes **~30 specialty pharmacies**, **37 specialty health clinics**, **2 clinical trial sites**, a diagnostics lab, national Patient Support Programs (**PSPs**), and a wholesale/distribution facility, operating across **all ten Canadian provinces**[256](index=256&type=chunk) - Specialty drugs, high-cost and complex therapies, are the core focus, requiring advanced logistics and clinical oversight[257](index=257&type=chunk) - Outlook: Expects increasing demand for specialty medications and health system capacity challenges to drive growth, leveraging established footprint and partnerships[259](index=259&type=chunk) [Recent Corporate Developments](index=43&type=section&id=Recent%20Corporate%20Developments) This section summarizes key corporate events, including CWB loan covenant non-compliance, the reverse merger, and management changes - **2023** focused on strategic acquisitions; **2024** shifted to integration, operational optimization, and organic growth[260](index=260&type=chunk) - Non-compliance with **CWB** loan financial covenants as of **June 30, 2025**, led to debt being callable. Subsequent to **June 30, 2025**, the Company sought creditor protection under **CCAA**[261](index=261&type=chunk) - Reverse merger with **Better Choice Company, Inc.** completed on **April 24, 2025**; **Better Choice** changed name to **SRx Health Solutions Inc.** and began trading as '**SRXH**'[262](index=262&type=chunk)[263](index=263&type=chunk) - Multiple management and Board of Directors changes occurred between **April** and **August 2025**, including changes in **CEO** and **Chairman** roles, and the resignation of Adesh Vora[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - Cancellation of approximately **18.8 million shares** of fully diluted capital stock announced on **August 14, 2025**[266](index=266&type=chunk) [Arrangement Agreement](index=44&type=section&id=Arrangement%20Agreement) This section details the all-stock arrangement agreement with Better Choice Company Inc., which closed on April 24, 2025 - Arrangement Agreement with **Better Choice Company Inc.** (publicly listed) for **SRx's** acquisition through an all-stock transaction, closed on **April 24, 2025**[267](index=267&type=chunk)[270](index=270&type=chunk) - **SRx** common shares converted into **Better Choice** common stock or exchangeable shares (1:1 convertible). Former **SRx** shareholders hold **~88%** of combined voting power[143](index=143&type=chunk)[269](index=269&type=chunk) - Transaction reflects an assigned equity value of **SRx** of USD **$80 million**, assuming net debt of USD **$43 million**[269](index=269&type=chunk) - Combined Company aims to be a leading global health and wellness platform, continuing **Halo** pet product brands and **SRx** healthcare business[271](index=271&type=chunk)[272](index=272&type=chunk) [Results of Operations for the nine months ended June 30, 2025 and 2024](index=46&type=section&id=Results%20of%20Operations%20for%20the%20nine%20months%20ended%20June%2030%2C%202025%20and%202024) The company experienced a significant decline in net sales and gross profit for the nine months ended June 30, 2025, primarily due to operational disruptions and liquidity constraints. Operating expenses increased due to transaction-related professional fees and share-based compensation, while other income improved from asset sales. The net loss widened considerably [Net sales](index=46&type=section&id=Net%20sales) This section analyzes the significant decrease in net sales, primarily attributed to operational disruptions and liquidity constraints - Net sales decreased by **$76.0 million (65%)** to **$41.1 million** for the **nine months ended June 30, 2025**, from **$117.1 million** in **2024**[273](index=273&type=chunk)[276](index=276&type=chunk) - Primary drivers for decrease: significant operational disruptions due to liquidity constraints, limiting ability to purchase and dispense high-cost specialty medications, leading to reduced patient volumes and prescription fulfillment rates[276](index=276&type=chunk) - Retail pharmacy revenue, the core driver, decreased by **$80.3 million (70.5%)** for the **nine months ended June 30, 2025**[194](index=194&type=chunk) [Gross profit](index=47&type=section&id=Gross%20profit) This section examines the decline in gross profit, driven by reduced net sales and operational challenges - Gross profit decreased by **$13.1 million (56%)** to **$10.3 million** for the **nine months ended June 30, 2025**, from **$23.4 million** in **2024**[273](index=273&type=chunk)[279](index=279&type=chunk) - Decrease primarily driven by significant decline in net sales, operational and liquidity challenges, and under-absorption of fixed costs[279](index=279&type=chunk) - Company is collaborating with supply chain partners for cost-saving opportunities but expects ongoing margin variability due to macroeconomic factors (inflationary pressures)[280](index=280&type=chunk) [Operating expenses](index=47&type=section&id=Operating%20expenses) This section details the increase in total operating expenses, including SG&A, share-based compensation, and professional fees - Total operating expenses increased by **$10.8 million (34%)** to **$42.5 million** for the **nine months ended June 30, 2025**, from **$31.6 million** in **2024**[273](index=273&type=chunk) - Selling, general and administrative (**SG&A**) expenses increased by **$8.2 million (26%)** to **$39.8 million**[273](index=273&type=chunk) - Sales and marketing costs increased by **$0.3 million (389%)** due to **Better Choice** integration[281](index=281&type=chunk) - Employee compensation and benefits remained constant at **$16.8 million**, as headcount reductions were offset by **Better Choice** personnel costs[281](index=281&type=chunk) - Share-based compensation increased by **$1.8 million (71%)** to **$4.4 million**, primarily due to **Better Choice** consolidation[281](index=281&type=chunk) - Impairment of long-lived intangible assets resulted in a **$2.7 million charge** in **2025** (none in **2024**)[283](index=283&type=chunk) - Professional fees increased by **$3.9 million (285%)** to **$5.2 million**, driven by reverse merger transaction-related expenses[288](index=288&type=chunk) [Other income (expense), net](index=48&type=section&id=Other%20income%20%28expense%29%2C%20net) This section explains the improvement in other income, primarily due to gains from asset sales - Other income improved by **$3.5 million** to **$3.457 million** for the **nine months ended June 30, 2025**, from an expense of **$0.069 million** in **2024**[273](index=273&type=chunk)[284](index=284&type=chunk) - Improvement primarily driven by a gain on the sale of assets at the SRx level, as part of asset base optimization and liquidity strengthening[284](index=284&type=chunk) [Interest expense, net](index=48&type=section&id=Interest%20expense%2C%20net) This section discusses the company's interest expense, which remained relatively constant year-over-year - Interest expense remained constant at **$3.3 million** for the **nine months ended June 30, 2025**, compared to **$3.26 million** in **2024**[273](index=273&type=chunk)[285](index=285&type=chunk) - Comprised of interest on **CWB** term loan, CEBA loans, and other borrowings; not materially impacted by Better Choice consolidation[285](index=285&type=chunk) [Income taxes](index=48&type=section&id=Income%20taxes) This section analyzes the income tax recovery and the effective tax rate, influenced by valuation allowances against deferred tax assets - Income tax recovery of **$0.63 million** for the **nine months ended June 30, 2025**, compared to an expense of **$0.45 million** in **2024**[286](index=286&type=chunk) - Effective tax rate was **(2.46%)** in **2025** vs. **(3.92%)** in **2024**, differing from the **26.5%** Canadian statutory rate due to a significant increase in valuation allowances against deferred tax assets (primarily **NOLs**)[286](index=286&type=chunk) [Non-GAAP Measures](index=49&type=section&id=Non-GAAP%20Measures) This section defines and reconciles Adjusted EBITDA, a non-GAAP measure used by management for performance evaluation and strategic decisions - **Adjusted EBITDA** is a non-GAAP measure used by management to evaluate operating performance, generate future plans, and make strategic capital allocation decisions[290](index=290&type=chunk) - **Adjusted EBITDA** is calculated by adding interest expense, tax expense (benefit), depreciation and amortization, share-based compensation, gain on extinguishment of debt and accounts payable, loss on disposal of assets, transaction-related expenses, and other non-recurring expenses to net loss[289](index=289&type=chunk) | Metric (USD in thousands) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Net loss | (29,745) | (11,077) | (18,668) | (168.5%) | | EBITDA | (24,104) | (4,947) | (19,157) | (387.3%) | | Adjusted EBITDA | (19,142) | (135) | (19,
Lamb Weston(LW) - 2026 Q1 - Quarterly Report
2025-09-30 17:03
Table of Contents For the quarterly period ended August 24, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-37830 _________________________________________________________________ LAMB WESTON HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________________________________________ FORM 10-Q ______________________________________________ ...
Paychex(PAYX) - 2026 Q1 - Quarterly Results
2025-09-30 12:41
[First Quarter Fiscal 2026 Results Overview](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Overview) Paychex delivered robust double-digit revenue growth in the first quarter of fiscal 2026, driven by the Paycor acquisition and strong segment performance, leading to increased adjusted operating income and an updated full-year earnings outlook [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Paychex reported a strong start to fiscal 2026 with robust double-digit revenue growth, driven by the integration of Paycor and sustained demand for HCM solutions. The company also raised its full-year earnings outlook | In millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Total revenue | $1,540.0 | $1,318.5 | 17 % | | Operating income | $541.9 | $546.7 | (1) % | | Adjusted operating income | $626.7 | $546.7 | 15 % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | - CEO John Gibson highlighted **robust double-digit revenue growth** and continued progress in integrating Paycor, noting early realization of cost and revenue synergies and significant cross-selling potential[2](index=2&type=chunk) - Strategic investments in AI and technology are driving innovation, elevating client experience, and delivering operational efficiency, positioning Paychex to navigate the complex labor and regulatory landscape[2](index=2&type=chunk) - Delivered **Strong Double-Digit Revenue Growth** in the First Quarter[3](index=3&type=chunk) - Raises Full Year Earnings Outlook[3](index=3&type=chunk) - Successfully Completed Key Paycor Integration Milestones[3](index=3&type=chunk) [Segmental Revenue Performance](index=1&type=section&id=Segmental%20Revenue%20Performance) Revenue growth was primarily driven by Management Solutions, significantly boosted by the Paycor acquisition, alongside steady growth in PEO and Insurance Solutions and increased interest on client funds | Revenue Segment | August 31, 2025 | August 31, 2024 | Change | | :------------------------------ | :-------------- | :-------------- | :----- | | Management Solutions | $1.2 billion | | 21 % | | PEO and Insurance Solutions | $329.1 million | | 3 % | | Interest on funds held for clients | $47.6 million | | 27 % | - Management Solutions revenue increased **21% to $1.2 billion**, with Paycor contributing approximately **17%** to this growth, driven by an increase in clients (primarily from Paycor) and higher revenue per client due to Paycor's upmarket base, price realization, and product penetration[4](index=4&type=chunk) - PEO and Insurance Solutions revenue increased **3% to $329.1 million**, attributed to growth in average PEO worksite employees and an increase in PEO insurance revenues[9](index=9&type=chunk) - Interest on funds held for clients increased **27% to $47.6 million**, primarily due to higher average investment balances resulting from the Paycor acquisition[9](index=9&type=chunk) [Expense and Profitability Analysis](index=2&type=section&id=Expense%20and%20Profitability%20Analysis) Total expenses rose significantly due to the Paycor acquisition and strategic investments, leading to a slight GAAP operating income decrease but a substantial adjusted operating income increase. Interest expense also surged due to acquisition financing, while the effective tax rate slightly decreased | Metric | August 31, 2025 | August 31, 2024 | Change | | :-------------------------- | :-------------- | :-------------- | :----- | | Total expenses | $998.1 million | | 29 % | | Operating income | $541.9 million | $546.7 million | (1) % | | Adjusted operating income | $626.7 million | $546.7 million | 15 % | | Operating margin | 35.2% | 41.5% | | | Adjusted operating margin | 40.7% | 41.5% | | | Interest expense | $68.2 million | $9.6 million | n/m | | Effective income tax rate | 22.9% | 23.3% | | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | - Total expenses increased **29% to $998.1 million**, primarily due to compensation-related expenses, amortization of intangible assets, and higher technology, selling, and marketing investments, all driven by the Paycor acquisition and strategic initiatives[5](index=5&type=chunk)[9](index=9&type=chunk) - Adjusted operating income, excluding **$84.1 million** of Paycor acquisition-related costs, grew **15% to $626.7 million**, demonstrating core business strength despite a **1% GAAP operating income decrease**[5](index=5&type=chunk) - Interest expense increased significantly by **$58.6 million to $68.2 million**, mainly due to incremental debt issued to finance the Paycor acquisition[6](index=6&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) The company maintained a strong financial position with substantial cash flow, while strategically utilizing borrowings for acquisitions and returning capital to shareholders through dividends and share repurchases [Liquidity and Balance Sheet](index=2&type=section&id=Liquidity%20and%20Balance%20Sheet) Paychex maintained a strong financial position and cash flow generation, with substantial cash and investments, alongside increased borrowings primarily for the Paycor acquisition - Cash, restricted cash, and total corporate investments: **$1.7 billion** as of August 31, 2025[10](index=10&type=chunk) - Short-term and long-term borrowings, net of debt issuance costs: **$5.0 billion** as of August 31, 2025[10](index=10&type=chunk) - Cash flow from operations: **$718.4 million** for the first quarter[10](index=10&type=chunk) [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) The company returned capital to stockholders through cumulative dividends and share repurchases during the first quarter - Paid cumulative dividends of **$1.08 per share**, totaling **$389.1 million**[10](index=10&type=chunk) - Repurchased **1.1 million shares** of common stock for **$160.1 million**[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Paychex provides non-GAAP financial measures to offer additional insights into core business performance by excluding acquisition-related costs and certain tax benefits, complementing GAAP results [Reconciliation and Explanation](index=3&type=section&id=Reconciliation%20and%20Explanation) Paychex provides non-GAAP financial measures, including adjusted operating income, net income, diluted EPS, and EBITDA, to offer additional insights into core business performance by excluding acquisition-related costs and certain tax benefits. These measures are not GAAP substitutes but are used in conjunction with GAAP results | $ in millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :-------------------------------------- | :-------------- | :-------------- | :----- | | Operating income | $541.9 | $546.7 | (1) % | | Acquisition-related costs | 84.8 | — | | | Adjusted operating income | $626.7 | $546.7 | 15 % | | Adjusted operating margin | 40.7% | 41.5% | | | Net income | $383.8 | $427.4 | (10) % | | Acquisition-related costs | 84.8 | — | | | Income tax benefit for acquisition-related costs | (20.6) | — | | | Excess tax benefits related to employee stock-based compensation payments | (7.2) | (6.2) | | | Adjusted net income | $440.8 | $421.2 | 5 % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | | Acquisition-related costs | 0.23 | — | | | Income tax benefit for acquisition-related costs | (0.06) | — | | | Excess tax benefits related to employee stock-based compensation payments | (0.02) | (0.02) | | | Adjusted diluted earnings per share | $1.22 | $1.16 | 5 % | | EBITDA | $656.3 | $585.8 | 12 % | | Acquisition-related costs | 23.7 | — | | | Adjusted EBITDA | $680.0 | $585.8 | 16 % | - Acquisition-related costs for the first quarter totaled **$84.8 million**, including **$61.1 million** in amortization of acquired intangibles, **$18.7 million** in compensation costs, and **$5.0 million** in other professional service fees related to the Paycor acquisition[11](index=11&type=chunk) - Non-GAAP measures are presented as indicators of core business performance and should not be considered substitutes for U.S. GAAP measures[11](index=11&type=chunk)[12](index=12&type=chunk) [Business Outlook and Corporate Information](index=4&type=section&id=Business%20Outlook%20and%20Corporate%20Information) Paychex updated its fiscal 2026 guidance, raising adjusted diluted EPS expectations, and provides comprehensive investor resources and company information [Fiscal 2026 Guidance Update](index=4&type=section&id=Fiscal%202026%20Guidance%20Update) Paychex has updated its business outlook for fiscal 2026, raising the anticipated growth range for adjusted diluted earnings per share, while other guidance aspects remain unchanged - Adjusted diluted earnings per share is now anticipated to grow in the range of **9% to 11%** for fiscal 2026[15](index=15&type=chunk) - Other aspects of the fiscal 2026 guidance remain unchanged[15](index=15&type=chunk) - The business outlook incorporates current assumptions and market conditions and excludes acquisition-related costs, with potential alterations due to macroeconomic environment changes[13](index=13&type=chunk) [Investor Resources](index=4&type=section&id=Investor%20Resources) Paychex provides access to its financial reports, earnings call webcasts, and investor information through its investor relations portal - Anticipates filing Form 10-Q for the first quarter within the next couple of days, available at https://investor.paychex.com[13](index=13&type=chunk) - Earnings Conference Call webcast scheduled for September 30, 2025, at 9:30 a.m. Eastern Time, accessible at https://investor.paychex.com, with replay available[14](index=14&type=chunk) - Investor Relations contact: Rachel White at **(513) 954-7388** or investors@paychex.com[16](index=16&type=chunk) - Media Relations contact: Tracy Volkmann at **(585) 387-6705** or tvolkmann@paychex.com[16](index=16&type=chunk) [About Paychex](index=5&type=section&id=About%20Paychex) Paychex, Inc. is a leading human capital management (HCM) company, offering comprehensive, flexible, and innovative HR solutions to approximately 800,000 customers in the U.S. and Europe, serving one out of every 11 American private sector workers - Paychex is a digitally driven HR leader reimagining how companies address workforce needs with comprehensive, flexible, and innovative HCM solutions for organizations of all sizes[17](index=17&type=chunk) - The company pays **one out of every 11 American private sector workers** and serves approximately **800,000 customers** in the U.S. and Europe[17](index=17&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements, emphasizing inherent risks and uncertainties that could cause actual results to differ materially from projections [Nature of Forward-Looking Statements](index=5&type=section&id=Nature%20of%20Forward-Looking%20Statements) This section clarifies that certain statements in the press release are forward-looking, based on current beliefs and expectations, and are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are identified by words like "expect," "outlook," "will," "guidance," and similar phrases, covering matters not historical facts, such as Paycor integration, operating performance, revenue growth, and earnings projections[18](index=18&type=chunk) - These statements are not assurances of future performance and are subject to known and unknown uncertainties, risks, and changes in circumstances, many outside the company's control, meaning actual outcomes may differ materially[19](index=19&type=chunk) [Key Risk Factors](index=5&type=section&id=Key%20Risk%20Factors) The company identifies several factors that could materially affect its actual results, including technological changes, software defects, cybersecurity risks, acquisition integration challenges, regulatory compliance, and macroeconomic impacts - Ability to keep pace with technology changes or provide timely enhancements to solutions[19](index=19&type=chunk) - Software defects, undetected errors, and development delays[20](index=20&type=chunk) - Cyberattacks, security vulnerabilities, data security/privacy leaks, and business interruptions[20](index=20&type=chunk) - Risks related to acquisitions and business integration, specifically Paycor[20](index=20&type=chunk) - Changes in health insurance and workers' compensation rates and claim trends[20](index=20&type=chunk) - Impact of macroeconomic factors on the U.S. and global economy, especially small- and medium-sized business clients[21](index=21&type=chunk) - Volatility in the political and economic environment, including inflation and interest rate changes[21](index=21&type=chunk) - Ability to comply with U.S. and foreign laws and regulations, including data privacy and artificial intelligence laws[21](index=21&type=chunk) [Unaudited Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) The unaudited consolidated financial statements detail the company's income, financial position, and cash flows, reflecting revenue growth, increased expenses, and strategic capital movements [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) The unaudited consolidated statements of income show a 17% increase in total revenue for the three months ended August 31, 2025, compared to the prior year, driven by Management Solutions and interest on funds held for clients. However, net income and diluted EPS decreased due to higher expenses and interest costs | In millions, except per share amounts | August 31, 2025 | August 31, 2024 | Change | | :---------------------------------- | :-------------- | :-------------- | :----- | | Revenue: | | | | | Management Solutions | $1,163.3 | $961.7 | 21 % | | PEO and Insurance Solutions | 329.1 | 319.3 | 3 % | | Total service revenue | 1,492.4 | 1,281.0 | 17 % | | Interest on funds held for clients | 47.6 | 37.5 | 27 % | | Total revenue | 1,540.0 | 1,318.5 | 17 % | | Expenses: | | | | | Cost of service revenue | 413.8 | 380.0 | 9 % | | Selling, general and administrative expenses | 584.3 | 391.8 | 49 % | | Total expenses | 998.1 | 771.8 | 29 % | | Operating income | 541.9 | 546.7 | (1) % | | Interest expense | (68.2) | (9.6) | n/m | | Other income, net | 23.8 | 20.0 | 19 % | | Income before income taxes | 497.5 | 557.1 | (11) % | | Income taxes | 113.7 | 129.7 | (12) % | | Net income | $383.8 | $427.4 | (10) % | | Basic earnings per share | $1.07 | $1.19 | (10) % | | Diluted earnings per share | $1.06 | $1.18 | (10) % | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The unaudited consolidated balance sheets as of August 31, 2025, show an increase in total assets, primarily driven by corporate investments and goodwill, while total liabilities also increased, notably in long-term borrowings and client fund obligations | In millions, except per share amounts | August 31, 2025 | May 31, 2025 | | :---------------------------------- | :-------------- | :----------- | | ASSETS | | | | Cash and cash equivalents | $809.0 | $1,628.6 | | Corporate investments | 861.9 | 34.5 | | Funds held for clients | 4,927.4 | 4,813.3 | | Total current assets | 9,040.0 | 8,916.5 | | Intangible assets, net | 1,886.8 | 1,947.3 | | Goodwill | 4,523.6 | 4,514.1 | | Total assets | $16,663.0 | $16,564.1 | | LIABILITIES | | | | Client fund obligations | 4,948.4 | 4,867.0 | | Total current liabilities | 7,128.7 | 6,956.3 | | Long-term borrowings, net | 4,550.3 | 4,548.4 | | Total liabilities | 12,692.4 | 12,436.1 | | Total stockholders' equity | 3,970.6 | 4,128.0 | | Total liabilities and stockholders' equity | $16,663.0 | $16,564.1 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The unaudited consolidated statements of cash flows indicate strong cash provided by operating activities, but significant cash used in investing activities due to purchases of available-for-sale securities and cash used in financing activities for dividends and share repurchases, resulting in a net decrease in cash, restricted cash, and equivalents | In millions | August 31, 2025 | August 31, 2024 | | :---------------------------------------- | :-------------- | :-------------- | | OPERATING ACTIVITIES | | | | Net cash provided by operating activities | $718.4 | $546.1 | | INVESTING ACTIVITIES | | | | Purchases of AFS securities | (3,731.9) | (1,029.7) | | Proceeds from sales and maturities of AFS securities | 2,547.3 | 1,013.0 | | Net cash used in investing activities | (1,302.7) | (110.0) | | FINANCING ACTIVITIES | | | | Net change in client fund obligations | 81.4 | (25.1) | | Dividends paid | (389.1) | (353.4) | | Repurchases of common shares | (160.1) | (104.0) | | Net cash used in financing activities | (515.4) | (485.0) | | Net change in cash, restricted cash, and equivalents | (1,099.7) | (48.9) | | Cash, restricted cash, and equivalents, end of period | $1,634.6 | $1,848.1 |
NewtekOne(NEWT) - 2025 Q2 - Quarterly Results
2025-09-30 12:33
[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section details the Form 8-K filing, covering company specifics, forward-looking statements, dividend declaration, and accompanying exhibits [Company and Filing Details](index=1&type=section&id=Company%20and%20Filing%20Details) This section outlines NewtekOne, Inc.'s identification, jurisdiction, and registered securities on the Nasdaq Global Market LLC - The filing is a Current Report on Form 8-K, dated **September 29, 2025**, for NewtekOne, Inc., a Maryland corporation[1](index=1&type=chunk)[2](index=2&type=chunk) Registered Securities on Nasdaq Global Market LLC | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--------------------------------------------------------------------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | Common Stock, par value $0.02 per share | NEWT | Nasdaq Global Market LLC | | 5.50% Notes due 2026 | NEWTZ | Nasdaq Global Market LLC | | 8.00% Notes due 2028 | NEWTI | Nasdaq Global Market LLC | | 8.50% Notes due 2029 | NEWTG | Nasdaq Global Market LLC | | 8.625% Notes due 2029 | NEWTH | Nasdaq Global Market LLC | | Depositary Shares, each representing a 1/40th interest in a share of 8.500% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series B | NEWTP | Nasdaq Global Market LLC | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section disclaims forward-looking statements, noting their inherent risks and the company's non-obligation to update them - Statements in the Form 8-K and its Exhibit contain forward-looking statements subject to significant risks and uncertainties, with actual results potentially differing materially from expectations[6](index=6&type=chunk) - NewtekOne does not undertake to update forward-looking statements to reflect the impact of circumstances or events arising after their initial making[6](index=6&type=chunk) [Item 2.02. Results of Operations and Financial Condition](index=4&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) This section details NewtekOne, Inc.'s declaration of a dividend on Series B Preferred Shares via a press release, furnished as Exhibit 99.1 - On **September 29, 2025**, NewtekOne, Inc. issued a press release titled 'NewtekOne, Inc. Declares Dividend on Series B Preferred Shares'[7](index=7&type=chunk) - The Press Release is furnished as **Exhibit 99.1** to this Current Report on Form 8-K[7](index=7&type=chunk) - The information in this report and Exhibit 99.1 is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, nor is it incorporated by reference into any registration statement unless expressly set forth[7](index=7&type=chunk) [Item 9.01 Financial Statement and Exhibits](index=4&type=section&id=Item%209.01%20Financial%20Statement%20and%20Exhibits) This section enumerates the exhibits accompanying the Form 8-K filing, including the dividend press release and interactive data file Form 8-K Exhibits | Exhibit Number | Description | | :------------- | :-------------------------------------------- | | 99.1 | NewtekOne, Inc. Press Release dated September 29, 2025 | | 104 | Cover Page Interactive Data File | [Signatures](index=5&type=section&id=SIGNATURES) This section confirms the official signing of the report by NewtekOne, Inc.'s Chief Executive Officer, President, and Chairman of the Board - The report was signed on **September 29, 2025**, by Barry Sloane, Chief Executive Officer, President, and Chairman of the Board of NEWTEKONE, INC[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)
Lamb Weston(LW) - 2026 Q1 - Quarterly Results
2025-09-30 12:32
[Executive Summary & Outlook Reaffirmation](index=1&type=section&id=Lamb%20Weston%20Reports%20First%20Quarter%20Fiscal%202026%20Results%3B%20Reaffirms%20Fiscal%20Year%202026%20Outlook) [First Quarter Fiscal 2026 Highlights](index=1&type=section&id=Summary%20of%20First%20Quarter%20FY%202026%20Results) Lamb Weston reported a strong start to fiscal year 2026 with solid volume growth and positive customer momentum, driven by its 'Focus to Win' strategy, with adjusted income from operations and adjusted EBITDA showing modest growth despite declines in GAAP net income and EPS Q1 2026 Key Financial Highlights (YoY) | Metric | Q1 2026 ($ millions) | Year-Over-Year Growth | | :----------------------------- | :------------------- | :-------------------- | | Net sales | 1,659.3 | — % | | Income from operations | 156.5 | (26)% | | Net income | 64.3 | (50)% | | Diluted EPS | 0.46 | (48)% | | Adjusted Income from Operations | 206.5 | 5 % | | Adjusted Net Income | 103.0 | (9)% | | Adjusted Diluted EPS | 0.74 | (5)% | | Adjusted EBITDA | 302.2 | 1 % | | Capital returned to shareholders | 62.1 | | - CEO Mike Smith noted a strong start to the fiscal year with **solid volume growth** and **positive customer momentum**, attributing it to the 'Focus to Win' strategy[3](index=3&type=chunk) [Fiscal Year 2026 Outlook Reaffirmation](index=1&type=section&id=Reaffirms%20Fiscal%20Year%202026%20Outlook) Lamb Weston reaffirmed its full-year financial targets for fiscal 2026, indicating confidence in its strategic direction and operational execution - Lamb Weston reaffirmed its full year financial targets for fiscal 2026[1](index=1&type=chunk) [First Quarter Fiscal 2026 Financial Performance](index=1&type=section&id=Q1%202026%20Commentary) [Consolidated Results of Operations](index=1&type=section&id=Q1%20Results%20of%20Operations) Consolidated net sales saw a slight year-over-year increase, primarily due to favorable foreign currency, though constant currency sales declined, while profitability metrics experienced declines largely influenced by unfavorable price/mix and a higher effective tax rate, partially offset by cost savings and higher volumes Q1 2026 Consolidated Financial Performance (YoY) | Metric | Q1 2026 ($ millions) | YoY Change ($ millions) | YoY % Change | | :----------------------------- | :------------------- | :---------------------- | :----------- | | Net sales | 1,659.3 | +5.2 | — % | | Net sales (constant currency) | 1,635.6 | -1% | -1% | | Gross profit | 342.4 | (13.6) | -3.8% | | Adjusted Gross Profit | 338.9 | (14.2) | -4.0% | | SG&A | 153.6 | +9.7 | +6.7% | | Adjusted SG&A | 132.4 | (24.0) | -15.3% | | Net income | 64.3 | (63.1) | (50)% | | Diluted EPS | 0.46 | (0.42) | (48)% | | Adjusted Net Income | 103.0 | (9.7) | (9)% | | Adjusted Diluted EPS | 0.74 | (0.04) | (5)% | | Adjusted EBITDA | 302.2 | +2.8 | 1 % | - Volume growth of **6%** was driven by customer wins and retention, particularly in North America and Asia, and lapping an approximately **$15 million** charge in the prior year quarter related to a voluntary product withdrawal[4](index=4&type=chunk) - Price/mix declined **7%**, reflecting the carryover impact of fiscal 2025 price and trade investments, ongoing price and trade support, and unfavorable channel product mix[4](index=4&type=chunk) [Net Sales Analysis](index=1&type=section&id=Net%20sales) Net sales increased slightly by $5.2 million to $1,659.3 million, primarily due to a favorable foreign currency impact of $23.7 million, while at constant currency, net sales declined 1% as a 6% volume increase was more than offset by a 7% price/mix decline - Net sales increased **$5.2 million** to **$1,659.3 million**, including a favorable foreign currency impact of **$23.7 million**[4](index=4&type=chunk) - Net sales at constant currency declined **1%**, as a **6%** increase in volume was more than offset by a **7%** decline in price/mix[4](index=4&type=chunk) [Profitability Metrics (Gross Profit, SG&A, Net Income, EPS, EBITDA)](index=2&type=section&id=Gross%20profit%20declined) Gross profit and adjusted gross profit declined due to unfavorable price/mix, partially mitigated by higher sales volumes and lower manufacturing costs, while SG&A increased but adjusted SG&A decreased due to cost savings and miscellaneous income, and net income and diluted EPS saw significant declines, while Adjusted EBITDA increased slightly due to lower Adjusted SG&A - Gross profit declined **$13.6 million** to **$342.4 million**, and Adjusted Gross Profit declined **$14.2 million** to **$338.9 million**, primarily due to unfavorable price/mix, partially offset by higher sales volumes and lower manufacturing costs[5](index=5&type=chunk) - SG&A increased **$9.7 million** to **$153.6 million**, but Adjusted SG&A declined **$24.0 million** to **$132.4 million**, reflecting cost savings initiatives and **$7.3 million** of miscellaneous income[5](index=5&type=chunk) - Net income declined **$63.1 million** to **$64.3 million**, and Diluted EPS declined **$0.42** to **$0.46**, while Adjusted Net Income declined **$9.7 million** to **$103.0 million**, and Adjusted Diluted EPS declined **$0.04** to **$0.74**[5](index=5&type=chunk) [Effective Tax Rate](index=2&type=section&id=effective%20tax%20rate) The effective tax rate for Q1 2026 was 42.7%, significantly higher than 28.5% in Q1 2025, primarily due to a $10.2 million discrete tax expense related to a non-cash full valuation allowance against certain international deferred tax assets, with the rate being 30.2% versus 30.8% in the prior year when excluding these items - The effective tax rate in Q1 2026 was **42.7%**, compared to **28.5%** in Q1 2025, including **$10.2 million** of discrete tax expense primarily for a valuation allowance against international deferred tax assets[5](index=5&type=chunk) - Excluding these items, the effective tax rate was **30.2%** in Q1 2026, versus **30.8%** in the prior year quarter[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Q1%202026%20Segment%20Highlights) The North America segment experienced a decline in net sales and Adjusted EBITDA due to price/mix pressures despite volume growth, while the International segment saw an increase in net sales driven by foreign currency and an improvement in Adjusted EBITDA, benefiting from higher volumes and lower costs even with new facility start-up expenses Q1 2026 Segment Performance (YoY) | Segment | Net Sales Q1 2026 ($ millions) | Net Sales YoY % Change | Net Sales Constant Currency YoY % Change | Volume YoY % Change | Price/Mix YoY % Change | Adjusted EBITDA Q1 2026 ($ millions) | Adjusted EBITDA YoY % Change | | :-------------- | :----------------------------- | :--------------------- | :--------------------------------------- | :------------------ | :--------------------- | :----------------------------------- | :--------------------------- | | North America | 1,084.6 | (2%) | (2%) | 5% | (7%) | 260.0 | (6%) | | International | 574.7 | 4% | —% | 6% | (6%) | 57.2 | 11% | [North America Segment](index=2&type=section&id=North%20America%20Summary) North America net sales declined 2% to $1,084.6 million, as a 7% price/mix decline more than offset a 5% volume increase, while Adjusted EBITDA decreased 6% to $260.0 million, primarily reflecting price and trade support partially offset by higher volumes and cost savings - North America net sales declined **2%** to **$1,084.6 million**, with volume increasing **5%** and price/mix declining **7%**[6](index=6&type=chunk) - Volume growth was supported by recent customer contract wins and growth across channels, while price/mix declined due to fiscal 2025 price investments, ongoing customer support, and unfavorable channel mix[6](index=6&type=chunk) - North America Segment Adjusted EBITDA decreased **$18.0 million** to **$260.0 million**, primarily reflecting price and trade in support of customers, partially offset by higher sales volumes, lower manufacturing costs, and cost savings initiatives[7](index=7&type=chunk) [International Segment](index=2&type=section&id=International%20Summary) International net sales increased 4% to $574.7 million, including a $24.5 million favorable foreign currency impact, resulting in flat net sales at constant currency, with volume increasing 6% and price/mix declining 6%, while Adjusted EBITDA increased 11% to $57.2 million, driven by higher volumes, lower potato prices, and cost savings despite $3.5 million in start-up costs for a new Argentina facility - International net sales increased **4%** to **$574.7 million**, including a favorable **$24.5 million** from foreign currency translation, with net sales at constant currency being flat[8](index=8&type=chunk) - Volume increased **6%**, led primarily by growth in Asia and with multinational chain customers, while price/mix at constant currency declined **6%**[8](index=8&type=chunk) - International Segment Adjusted EBITDA increased **$5.8 million** to **$57.2 million**, reflecting higher sales volumes and lower manufacturing costs per pound, partially offset by **$3.5 million** in start-up costs for the new Argentina facility[8](index=8&type=chunk) [Equity Method Investment Earnings (Loss)](index=3&type=section&id=Equity%20Method%20Investment%20Earnings%20(Loss)) Equity method investment earnings shifted from a gain of $11.3 million in Q1 2025 to a loss of $0.6 million in Q1 2026, primarily due to lower net sales and an unfavorable mix of sales from the Lamb Weston/RDO Frozen joint venture Equity Method Investment Earnings (Loss) | Period | Earnings (Loss) ($ millions) | | :------------------- | :--------------------------- | | Q1 Fiscal 2026 | (0.6) | | Q1 Fiscal 2025 | 11.3 | - The decline in earnings was primarily the result of lower net sales and an unfavorable mix of sales from the unconsolidated joint venture, Lamb Weston/RDO Frozen[9](index=9&type=chunk) [Financial Position and Cash Flows](index=3&type=section&id=Cash%20Flows%2C%20Capital%20Expenditures%20and%20Liquidity) [Cash Flows from Operating Activities](index=3&type=section&id=Net%20cash%20provided%20by%20operating%20activities) Net cash provided by operating activities increased by $21.8 million to $352.0 million, primarily reflecting favorable working capital, led by lower finished goods inventories in North America - Net cash provided by operating activities increased **$21.8 million** to **$352.0 million**, primarily reflecting favorable working capital, led by lower finished goods inventories in North America[10](index=10&type=chunk) [Capital Expenditures and Liquidity](index=3&type=section&id=Capital%20expenditures%2C%20net%20of%20proceeds) Capital expenditures significantly decreased by $256.4 million to $79.2 million, reflecting the completion of growth-based investments in Argentina, the Netherlands, and the U.S., while the company maintained strong liquidity with $98.6 million in cash and $1,318.4 million available under its revolving credit facility - Capital expenditures, net of proceeds from blue chip swap transactions, were **$79.2 million**, down **$256.4 million** from the prior year, reflecting the completion of growth-based investments[11](index=11&type=chunk) Liquidity as of August 24, 2025 | Metric | Amount ($ millions) | | :-------------------------- | :------------------ | | Cash and cash equivalents | 98.6 | | Available revolving credit | 1,318.4 | [Capital Returned to Shareholders](index=3&type=section&id=Capital%20Returned%20to%20Shareholders) In the first quarter of fiscal 2026, Lamb Weston returned $62.1 million to shareholders, comprising $51.7 million in cash dividends and $10.4 million in share repurchases (187,259 shares at an average price of $55.34), while the Board also declared a quarterly dividend of $0.37 per share payable in November 2025, and approximately $348 million remains authorized for share repurchases - The Company returned **$62.1 million** to shareholders in Q1 FY26, including **$51.7 million** through cash dividends and **$10.4 million** through share repurchases (**187,259 shares** at an average price of **$55.34**)[2](index=2&type=chunk)[12](index=12&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.37 per share**, payable on November 28, 2025, with approximately **$348 million** remaining authorized and available for repurchase under the share repurchase program[12](index=12&type=chunk)[13](index=13&type=chunk) [Strategic Initiatives and Fiscal 2026 Outlook](index=3&type=section&id=Fiscal%202026%20Outlook) [Focus to Win Strategy](index=3&type=section&id=Focus%20to%20Win) The 'Focus to Win' strategy, announced in Q4 fiscal 2025, aims to improve execution and drive profitable growth through four guiding principles: focusing investments on priority global markets, strengthening customer partnerships, achieving executional excellence, and setting the pace for innovation, including a Cost Savings Program targeting at least $250 million in annualized run rate savings by end of FY28, with $100 million expected by end of FY26, plus $60 million in working capital improvements, and total pre-tax charges of $70-100 million are expected, with $32 million recorded in Q1 FY26 - The 'Focus to Win' strategic plan aligns the organization around four guiding principles: focusing investments on priority global markets and segments; strengthening customer partnerships; achieving executional excellence; and setting the pace for innovation[14](index=14&type=chunk) - The Cost Savings Program is expected to deliver at least **$250 million** of annualized run rate savings by the end of fiscal year 2028, with at least **$100 million** of expected savings and an additional **$60 million** of working capital improvements by the end of fiscal year 2026[14](index=14&type=chunk) - In connection with these strategic initiatives, the Company expects to recognize total pre-tax charges of **$70 million** to **$100 million**, including approximately **$32 million** recorded in the first fiscal quarter[14](index=14&type=chunk) [Fiscal 2026 Financial Targets](index=3&type=section&id=Fiscal%202026%20Outlook%20Targets) Lamb Weston reaffirmed its fiscal 2026 financial targets, including net sales at constant currency in the range of $6.35 billion to $6.55 billion, Adjusted EBITDA between $1.00 billion and $1.20 billion, and capital expenditures of approximately $500 million, with the guidance incorporating enacted tariffs but excluding potential effects of evolving trade policies Fiscal 2026 Financial Targets | Metric | Target Range | | :-------------------------------- | :-------------------------------- | | Net sales at constant currency | $6.35 billion to $6.55 billion | | Adjusted EBITDA | $1.00 billion to $1.20 billion | | Cash used for capital expenditures | Approximately $500 million | - The Company's guidance includes its current view of the anticipated impact of enacted tariffs but does not include potential effects of evolving trade policies[15](index=15&type=chunk) [Additional Information](index=4&type=section&id=End%20Notes) [Webcast and Conference Call Information](index=4&type=section&id=Webcast%20and%20Conference%20Call%20Information) Lamb Weston hosted a conference call on September 30, 2025, to discuss its first quarter fiscal 2026 results, with details provided for live access and a rebroadcast - Lamb Weston hosted a conference call to review its first quarter fiscal 2026 results at **10:00 a.m. ET** on **September 30, 2025**, with a rebroadcast available online[17](index=17&type=chunk)[18](index=18&type=chunk) [About Lamb Weston](index=4&type=section&id=About%20Lamb%20Weston) Lamb Weston is a leading global supplier of frozen potato products to restaurants and retailers, known for 75 years of innovation in simplifying back-of-house management and enhancing customer experience - Lamb Weston is a leading supplier of frozen potato products to restaurants and retailers around the world, with **75 years** of industry leadership in innovation[19](index=19&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes various non-GAAP financial measures (e.g., Adjusted Gross Profit, Adjusted EBITDA, constant currency metrics) to supplement GAAP information, providing useful insights into core operating performance for investors and management decision-making by excluding certain non-recurring or non-operational impacts, with reconciliations to comparable GAAP measures provided and limitations of non-GAAP measures acknowledged - Lamb Weston presents non-GAAP financial measures such as Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, and constant currency metrics to supplement GAAP financial information[20](index=20&type=chunk) - Management uses these non-GAAP measures to analyze core operating performance, providing investors with useful supplemental information by excluding impacts of foreign currency exchange translation, unrealized derivative activities, and other items affecting comparability[21](index=21&type=chunk) - Prospective quantification of certain unpredictable items for forward-looking non-GAAP measures is not feasible without unreasonable efforts, thus a reconciliation to GAAP has not been provided for guidance[24](index=24&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding the company's outlook, strategies, capital expenditures, and industry conditions, which are subject to uncertainties and risks, with readers cautioned not to place undue reliance on these statements, and the company undertakes no obligation to update them, except as required by law, with key risks including consumer preferences, raw material availability, operational challenges, successful implementation of strategic plans, competitive environment, and global economic conditions - The press release contains forward-looking statements regarding the Company's business and financial outlook, plans and strategies (including Focus to Win and the Cost Savings Program), capital expenditures, and anticipated industry conditions[25](index=25&type=chunk) - These statements are based on management's current expectations and are subject to uncertainties and changes in circumstances, with many factors potentially causing actual results to vary materially[25](index=25&type=chunk) - Readers are cautioned not to place undue reliance on any forward-looking statements, and the Company undertakes no responsibility for updating these statements, except as required by law[25](index=25&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Earnings](index=6&type=section&id=Consolidated%20Statements%20of%20Earnings) The consolidated statements of earnings provide a detailed breakdown of revenues, costs, and profits for the thirteen weeks ended August 24, 2025, and August 25, 2024, highlighting significant year-over-year declines in net income and diluted EPS, influenced by restructuring expenses and a higher tax rate in the current period Consolidated Statements of Earnings (Thirteen Weeks Ended) | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net sales | 1,659.3 | 1,654.1 | | Cost of sales | 1,316.9 | 1,298.1 | | Gross profit | 342.4 | 356.0 | | Selling, general and administrative expenses | 153.6 | 143.9 | | Restructuring expense | 32.3 | — | | Income from operations | 156.5 | 212.1 | | Interest expense, net | 43.7 | 45.2 | | Income before income taxes and equity method earnings | 112.8 | 166.9 | | Income tax expense | 47.9 | 50.8 | | Equity method investment earnings (loss) | (0.6) | 11.3 | | Net income | 64.3 | 127.4 | | Diluted EPS | 0.46 | 0.88 | | Dividends declared per common share | 0.37 | 0.36 | - Net income for the thirteen weeks ended August 24, 2025, reflects total pre-tax cash charges totaling **$31.9 million** (**$24.2 million** after-tax, or **$0.18 per share**) primarily related to the Cost Savings Program[27](index=27&type=chunk) - The thirteen weeks ended August 25, 2024, included an approximately **$39 million** charge (**$30 million** after-tax, or **$0.21 per share**) related to a voluntary product withdrawal, impacting net sales and cost of sales[29](index=29&type=chunk) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of August 24, 2025, and May 25, 2025, with key changes including a decrease in total current assets, primarily driven by lower inventories, and a slight increase in total stockholders' equity Consolidated Balance Sheets (as of) | Metric | August 24, 2025 ($ millions) | May 25, 2025 ($ millions) | | :------------------------------------------ | :--------------------------- | :-------------------------- | | **ASSETS:** | | | | Cash and cash equivalents | 98.6 | 70.7 | | Receivables, net | 772.7 | 781.6 | | Inventories | 906.8 | 1,035.4 | | Total current assets | 1,873.3 | 2,032.7 | | Property, plant and equipment, net | 3,686.7 | 3,687.9 | | Total assets | 7,236.7 | 7,392.6 | | **LIABILITIES & STOCKHOLDERS' EQUITY:** | | | | Short-term borrowings | 215.4 | 370.8 | | Accounts payable | 544.9 | 616.4 | | Total current liabilities | 1,258.0 | 1,476.0 | | Long-term debt and financing obligations | 3,670.9 | 3,682.8 | | Total liabilities | 5,446.9 | 5,654.9 | | Total stockholders' equity | 1,789.8 | 1,737.7 | | Total liabilities and stockholders' equity | 7,236.7 | 7,392.6 | - Inventories decreased from **$1,035.4 million** as of May 25, 2025, to **$906.8 million** as of August 24, 2025[31](index=31&type=chunk) - Total stockholders' equity increased from **$1,737.7 million** to **$1,789.8 million**[31](index=31&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows detail the cash movements for the thirteen weeks ended August 24, 2025, and August 25, 2024, with operating activities generating more cash, while investing activities used significantly less cash due to completed capital projects, and financing activities shifted from providing cash to using cash, primarily due to higher net repayments of short-term borrowings Consolidated Statements of Cash Flows (Thirteen Weeks Ended) | Cash Flow Activity | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | 352.0 | 330.2 | | Net cash used for investing activities | (76.3) | (335.6) | | Net cash (used for) provided by financing activities | (248.5) | 52.2 | | Net increase in cash and cash equivalents | 27.9 | 49.4 | | Cash and cash equivalents, end of period | 98.6 | 120.8 | - Net cash provided by operating activities increased by **$21.8 million**, primarily reflecting favorable working capital, led by lower finished goods inventories[10](index=10&type=chunk)[33](index=33&type=chunk) - Net cash used for investing activities decreased substantially from **$335.6 million** in Q1 FY25 to **$76.3 million** in Q1 FY26, reflecting the completion of growth-based investments[11](index=11&type=chunk)[33](index=33&type=chunk) - Net cash from financing activities shifted from a **$52.2 million** inflow in Q1 FY25 to a **$248.5 million** outflow in Q1 FY26, primarily due to higher net repayments of short-term borrowings[33](index=33&type=chunk) [Segment Information and Non-GAAP Reconciliations](index=10&type=section&id=Segment%20Information%20and%20Reconciliation%20of%20Net%20Sales%20at%20Constant%20Currency) [Segment Net Sales and Adjusted EBITDA](index=10&type=section&id=Segment%20net%20sales) This section provides a detailed breakdown of net sales and Adjusted EBITDA by segment (North America and International) for Q1 fiscal 2026 and 2025, including constant currency adjustments, highlighting the differing drivers of performance in each segment, with North America experiencing price/mix pressure and International benefiting from volume growth and foreign currency Segment Net Sales and Adjusted EBITDA (Thirteen Weeks Ended) | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | % Increase (Decrease) | % Increase (Decrease) at Constant Currency | Price/Mix | Volume | | :-------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :----------------------------------------- | :-------- | :------- | | **Segment net sales:** | | | | | | | | North America | 1,084.6 | 1,103.7 | (2%) | (2%) | (7%) | 5% | | International | 574.7 | 550.4 | 4% | —% | (6%) | 6% | | **Total Net Sales** | 1,659.3 | 1,654.1 | —% | (1%) | (7%) | 6% | | **Segment Adjusted EBITDA:** | | | | | | | | North America | 260.0 | 278.0 | (6%) | (6%) | | | | International | 57.2 | 51.4 | 11% | 4% | | | | **Total Adjusted EBITDA** | 317.2 | 329.4 | | | | | - Foreign currency translation had a minimal impact on overall Segment Adjusted EBITDA, with a favorable impact of approximately **$4 million** to the International segment[36](index=36&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of various GAAP financial measures to their non-GAAP counterparts, including Adjusted Gross Profit, SG&A, Income from Operations, Net Income, Diluted EPS, and Adjusted EBITDA, itemizing adjustments for unrealized derivative gains/losses, foreign currency, stock-based compensation, and specific items impacting comparability like the Cost Savings Program and pension settlement - Reconciliations are provided for Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Net Income, and Adjusted Diluted EPS, detailing adjustments for unrealized derivative gains, foreign currency exchange, stock-based compensation, and specific comparability items[39](index=39&type=chunk) - Adjusted EBITDA is reconciled from Net Income by adding back interest expense, income tax expense, depreciation and amortization, and adjusting for unrealized derivative gains/losses, foreign currency exchange, blue chip swap transactions, stock-based compensation, and other comparability items[44](index=44&type=chunk)[45](index=45&type=chunk) [Adjusted Gross Profit, SG&A, Income from Operations, Net Income, EPS Reconciliation](index=11&type=section&id=As%20reported) This sub-section details the adjustments made to GAAP figures to arrive at adjusted non-GAAP measures for gross profit, SG&A, income from operations, net income, and diluted EPS for both Q1 FY26 and Q1 FY25, with key adjustments in Q1 FY26 including restructuring expense, shareholder activism expense, and pension settlement charges Reconciliation of GAAP to Adjusted Financial Measures (Q1 FY26) | Metric | As Reported ($ millions) | Total Adjustments ($ millions) | Adjusted ($ millions) | | :----------------------------- | :----------------------- | :----------------------------- | :-------------------- | | Gross Profit | 342.4 | (3.5) | 338.9 | | SG&A | 153.6 | (21.2) | 132.4 | | Restructuring Expense | 32.3 | (32.3) | — | | Income From Operations | 156.5 | 50.0 | 206.5 | | Net Income | 64.3 | 38.7 | 103.0 | | Diluted EPS | 0.46 | 0.28 | 0.74 | - Adjustments for Q1 FY26 include **$32.3 million** for restructuring expense, **$4.0 million** for shareholder activism expense, and **$13.1 million** for pension settlement, which significantly impact reported GAAP figures[39](index=39&type=chunk) [Adjusted EBITDA Reconciliation](index=12&type=section&id=Adjusted%20EBITDA) This sub-section provides the reconciliation of net income to Adjusted EBITDA, a key non-GAAP measure, for Q1 FY26 and Q1 FY25, detailing the add-backs for interest, taxes, depreciation, amortization, and other non-operating or non-recurring items to arrive at the adjusted profitability metric Reconciliation of Net Income to Adjusted EBITDA | Metric | August 24, 2025 ($ millions) | August 25, 2024 ($ millions) | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net income | 64.3 | 127.4 | | Interest expense, net | 43.7 | 45.2 | | Income tax expense | 47.9 | 50.8 | | Depreciation and amortization | 96.3 | 91.4 | | Unrealized derivative gains | (4.9) | (8.9) | | Foreign currency exchange (gains) losses | (4.7) | 0.6 | | Blue chip swap transaction gains | — | (16.6) | | Stock-based compensation | 10.6 | 9.5 | | Cost Savings Program, Restructuring Plan, and other expenses | 31.9 | — | | Shareholder activism expense | 4.0 | — | | Pension settlement | 13.1 | — | | **Adjusted EBITDA** | **302.2** | **299.4** | - Adjusted EBITDA increased from **$299.4 million** in Q1 FY25 to **$302.2 million** in Q1 FY26, after accounting for various non-GAAP adjustments[45](index=45&type=chunk) - Unallocated corporate costs, which are excluded from Segment Adjusted EBITDA, were **($15.0) million** in Q1 FY26, compared to **($30.0) million** in Q1 FY25[45](index=45&type=chunk)