Computer Modelling Group Announces Second Quarter Results

Computer Modelling Group Ltd

CALGARY, Alberta, Nov. 13, 2023 (GLOBE NEWSWIRE) -- Computer Modelling Group Ltd. (“CMG” or the “Company”) announces its financial results for the three and six months ended September 30, 2023.

Second Quarter Fiscal 2024 (“Q2 2024”) Overview

Key Financial Metrics

For the Three Months Ended	For the Six Months Ended
September 30, 2023 and compared to the same period of the previous fiscal year, when appropriate:
Annuity/maintenance license revenue increased by 19%;	Annuity/maintenance license revenue increased by 17%;
Total revenue increased by 25%;	Total revenue increased by 27%;
Total operating expenses increased by 14%. Adjusted for acquisition costs in the current quarter and restructuring charges in the prior year’s second quarter, operating expenses increased by 39%, primarily due to stock-based compensation expense, increased headcount and headcount-related costs, higher professional services, travel-related and office-related costs;	Total operating expenses increased by 6%. Adjusted for acquisition costs in the current year and restructuring charges in the prior year, operating expenses increased by 28% from the comparative period in the prior year, primarily due to stock-based compensation expenses, increased headcount and headcount related costs, higher professional services, travel-related and office-related costs;
Quarterly operating profit margin was 34%, increasing from 31% in the comparative quarter. Adjusted for acquisition costs in the current quarter and restructuring charges in the prior year’s second quarter, operating profit margin was 37%, decreasing from 44% in the comparative quarter;	Year-to-date operating profit margin was 40%, increasing from 31% in the comparative period. Adjusted for acquisition costs in the current year and restructuring charges in the prior year, operating profit margin was 42%, which remained consistent with the comparative period;
Basic EPS of $0.08, up $0.03 per share from the comparative quarter in the prior fiscal year;	Basic EPS of $0.17, up $0.10 per share from the comparative period in the prior fiscal year;
Achieved free cash flow per share of $0.14;	Achieved free cash flow per share of $0.23;
Declared and paid a dividend of $0.05 per share.	Declared and paid dividends of $0.10 per share.

Second Quarter Business Highlights

• Completed the Company’s first major acquisition, Bluware-Headwave Ventures Inc. (“BHV” or “Bluware”), on September 25, 2023;

• Generated total revenue of $22.6 million in the second quarter of fiscal 2024 compared to $18.1 million in the prior year’s quarter, an increase of 25%;

• Operating profit margin increased to 34%, compared to 31% in the same period of last fiscal year;

• Reported free cash flow of $11.0 million, representing $0.14 per share;

• Subsequent to quarter-end, declared a quarterly cash dividend of $0.05 per share to be paid on December 15, 2023 to all shareholders on record at the close of business on December 7, 2023.

Quarterly Performance

		Fiscal 2022				Fiscal 2023			Fiscal 2024
($ thousands, unless otherwise stated)			Q3	Q4	Q1	Q2	Q3	Q4		Q1	Q2
Annuity/maintenance license revenue			13,575	14,306	13,529	14,825	15,533	15,803		15,607	17,610
Perpetual license revenue			1,497	2,351	386	780	518	1,556		1,849	1,176
Software license revenue			15,072	16,657	13,915	15,605	16,051	17,359		17,456	18,786
Professional services revenue			1,973	2,137	2,192	2,477	3,341	2,906		3,292	3,847
Total revenue			17,045	18,794	16,107	18,082	19,392	20,265		20,748	22,633
Operating profit			7,755	7,312	4,961	5,555	8,435	6,909		9,764	7,726
Operating profit (%)			45	39	31	31	43	34		47	34
Profit before income and other taxes			7,310	6,563	5,182	5,989	8,350	7,127		9,148	8,793
Income and other taxes			1,736	1,611	1,369	1,579	2,002	1,901		2,244	2,277
Net income for the period			5,574	4,952	3,813	4,410	6,348	5,226		6,904	6,516
Adjusted EBITDA(1)			8,273	7,819	6,775	8,435	10,595	8,515		9,948	10,718
Cash dividends declared and paid			4,017	4,016	4,017	4,025	4,025	4,032		4,039	4,043
Funds flow from operations			7,022	7,105	4,558	4,974	8,169	7,656		7,920	11,491
Free cash flow(1)			6,227	6,584	4,255	4,505	7,545	5,396		7,463	11,028
Per share amounts – ($/share)
Earnings per share (EPS) – basic			0.07	0.06	0.05	0.05	0.08	0.07		0.09	0.08
Earnings per share (EPS) - diluted			0.07	0.06	0.05	0.05	0.08	0.06		0.08	0.08
Cash dividends declared and paid			0.05	0.05	0.05	0.05	0.05	0.05		0.05	0.05
Funds flow from operations per share – basic			0.09	0.09	0.06	0.06	0.10	0.09		0.10	0.14
Free cash flow per share – basic(1)			0.08	0.08	0.05	0.06	0.09	0.07		0.09	0.14
(1)   This is a non-IFRS financial measure. See the “Non-IFRS Financial Measures” section.

Revenue

	Three months ended September 30					Six months ended September 30
		2023	2022	$ change	% change			2023	2022	$ change	% change
($ thousands)
Software license revenue		18,786	15,605	3,181	20		%	36,241	29,520	6,721	23		%
Professional services revenue		3,847	2,477	1,370	55		%	7,139	4,669	2,470	53		%
Total revenue (1)		22,633	18,082	4,551	25		%	43,381	34,189	9,192	27		%
Software license revenue as a % of total revenue		83%	86%					84%	86%
Professional services revenue as a % of total revenue		17%	14%					16%	14%
(1)   BHV consolidated revenue for the three and six months ended September 30, 2023 was $0.6 million.

CMG’s revenue is comprised of software license sales, which provides the majority of the Company’s revenue, and fees for professional services. Total revenue for the three and six months ended September 30, 2023 increased by 25% and 27% respectively, over the comparable period of the previous fiscal year due to increases in both software license revenue and professional services revenue.

Software License Revenue

	Three months ended September 30					Six months ended September 30
	2023	2022	$ change	% change		2023	2022	$ change	% change
($ thousands)
Annuity/maintenance	17,610	14,825	2,786	19	%	33,217	28,354	4,863	17	%
Perpetual license	1,176	780	396	51	%	3,025	1,166	1,859	159	%
Total software license revenue (1)	18,786	15,605	3,181	20	%	36,242	29,520	6,722	23	%
Annuity/maintenance as a % of total software license revenue	94%	95%				92%	96%
Perpetual as a % of total software license revenue	6%	5%				8%	4%
(1)   For the three and six months ended September 30, 2023, BHV’s total software license revenue was $0.2 million.

Total software license revenue for the three months and six months ended September 30, 2023 increased by 20% and 23% respectively, due to increases in both annuity/maintenance license revenue and perpetual license revenue.

Software Revenue by Geographic Region

		Three months ended September 30					Six months ended September 30
	2023	2022	$ change	% change		2023	2022	$ change	% change
($ thousands)
Annuity/maintenance license revenue
Canada	3,318	3,181	137	4	%	6,558	6,131	427	7	%
United States(1)	4,583	3,704	879	24	%	8,838	7,054	1,784	25	%
South America	2,477	1,894	583	31	%	4,300	3,593	707	20	%
Eastern Hemisphere(1)(2)	7,232	6,046	1,186	20	%	13,521	11,576	1,945	17	%
	17,610	14,825	2,785	19	%	33,217	28,354	4,863	17	%
Perpetual license revenue
Canada	-	-	-	0	%	115	-	115	100	%
United States	-	157	(157	(100	%)	233	157	76	48	%
South America	324	-	324	100	%	324	-	324	100	%
Eastern Hemisphere	852	623	229	37	%	2,353	1,009	1,344	133	%
	1,176	780	396	51	%	3,025	1,166	1,859	159	%
Total software license revenue
Canada	3,318	3,181	137	4	%	6,673	6,131	542	9	%
United States(1)	4,583	3,861	722	19	%	9,071	7,211	1,860	26	%
South America	2,802	1,894	908	48	%	4,624	3,593	1,031	29	%
Eastern Hemisphere(1)(2)	8,083	6,669	1,414	21	%	15,874	12,585	3,288	26	%
	18,786	15,605	3,181	20	%	36,242	29,520	6,722	23	%
(1)   BHV’s consolidated total software license revenue for the three and six months ended September 30, 2023 was $0.2 million and is predominantly domiciled in the United States and Norway.
(2)   Includes Europe, Africa, Asia and Australia.

During the three and six months ended September 30, 2023, compared to the same periods of the previous fiscal year, total software license revenue increased in all regions.

The Canadian region (representing 18% of year-to-date total software license revenue) experienced increases of 4% and 7% in annuity/maintenance license revenue during the three and six months ended September 30, 2023, respectively, mainly due to license fee increases and increased licensing by existing customers. While no perpetual license revenue was generated in the current quarter, it increased by 100% during the six months ended September 30, 2023, due to a license sale in the first quarter of the current fiscal year.

The United States (representing 25% of year-to-date total software license revenue) experienced increases of 24% and 25% in annuity/maintenance license revenue during the three and six months ended September 30, 2023, respectively, due to new customers, increased license fees and increased licensing by existing customers. There were no perpetual license sales in the current quarter. Perpetual license revenue increased by 48% for the six months ended September 30, 2023 due to a new customer license purchase.

South America (representing 13% of year-to-date total software license revenue) experienced increases of 31% and 20% in annuity/maintenance license revenue during the three and six months ended September 30, 2023, due to increased licensing by existing customers. Perpetual license revenue increased by 100% for both the three and six months ended September 30, 2023 due to a new customer license purchase.

The Eastern Hemisphere (representing 44% of year-to-date total software license revenue) experienced increases of 20% and 17% in annuity/maintenance license revenue during the three and six months ended September 30, 2023, respectively, due to increased license fees and licensing by existing customers. Perpetual license revenue increased by 37% and 133% for the three and six months ended September 30, 2023, respectively, primarily due to new perpetual license sales in Asia relating to energy transition.

Deferred Revenue

($ thousands)	Fiscal 2024	Fiscal 2023	Fiscal 2022	$ change	% change
Deferred revenue at:
Q1 (June 30)	26,616	24,409		2,207	9%
Q2 (September 30)	32,339(1)	24,164		8,175	34%
Q3 (December 31)		26,717	23,056	3,661	16%
Q4 (March 31)		34,797	30,454	4,343	14%
(1)   BHV represents approximately $2.8 million of the deferred revenue balance as at Q2 2024.

CMG’s deferred revenue consists primarily of amounts for prepaid licenses. Our annuity/maintenance revenue is deferred and recognized rateably over the license period, which is generally one year or less. Amounts are deferred for licenses that have been provided and revenue recognition reflects the passage of time.

The above table illustrates the normal trend in the deferred revenue balance from the beginning of the calendar year (which corresponds with Q4 of our fiscal year), when most renewals occur, to the end of the calendar year (which corresponds with Q3 of our fiscal year). Our fourth quarter corresponds with the beginning of the fiscal year for most oil and gas companies, representing a time when they enter a new budget year and sign/renew their contracts.

The deferred revenue balance at the end of Q2 of fiscal 2024 was 34% higher than in Q2 of fiscal 2023. While 12% of the increase is related to BHV acquisition, we did not note significant timing differences in the remaining balance.

Cost of Revenue

	Three months ended September 30					Six months ended September 30
	2023	2022	$ change	% change		2023	2022	$ change	% change
($ thousands)
Cost of revenue(1)	2,493	1,657	836	50	%	4,398	3,421	977	28%
(1)   BHV consolidated cost of revenue for the three and six months ended September 30, 2023 was $0.2 million.

Cost of revenue increased by 50% and 28% for the three and six months ended September 30, 2023, respectively compared to the same periods of the previous fiscal year related to increased headcount and headcount-related costs.

Operating Expenses

		Three months ended September 30							Six months ended September 30
	2023		2022	$ change		% change		2023		2022	$ change		% change
($ thousands)
Sales and marketing	3,384		2,291	1,093		48	%	5,739		4,194	1,545		37	%
Research and development	4,767		5,043	(276	)	(5	%)	8,819		9,172	(353	)	(4	%)
General and administrative	4,263		3,536	727		21	%	6,935		6,886	49		1	%
Total operating expenses(1)	12,414		10,870	1,544		14	%	21,493		20,252	1,241		6	%
Direct employee costs(2)	8,538		8,263	275		3	%	14,696		15,752	(1,056	)	-7	%
Other corporate costs(2)	3,876		2,607	1,269		49	%	6,797		4,500	2,297		51	%
	12,414		10,870	1,544		14	%	21,493		20,252	1,241		6	%
(1)   BHV contributed $0.1 million, $0.1 million, and $0.1 million to sales and marketing, research and development and general and administrative respectively for the three and six months ended September 30, 2023.
(2)   This is a non-IFRS financial measure. See the “Non-IFRS Financial Measures” section.

Adjusted total operating expenses, adjusted direct employee costs and adjusted other corporate costs are non-IFRS financial measures. They do not have a standard meaning prescribed by IFRS and, accordingly, may not be comparable to measures used by other companies. Restructuring charges are excluded from total operating expenses. Management believes that analyzing the Company’s expenses exclusive of these items illustrates underlying trends in our costs and provides better comparability between periods.

The following tables provide a reconciliation of total operating expenses to adjusted total operating expenses, direct employee costs to adjusted direct employee costs and other corporate costs to adjusted other corporate costs:

	Three months ended September 30								Six months ended September 30
	2023		2022		$ change		% change		2023		2022		$ change		% change
($ thousands)
Total operating expenses	12,414		10,870		1,544		14	%	21,493		20,252		1,241		6	%
Acquisition-related costs	(573	)	-		(573	)	(100	%)	(573	)	-		(573	)	(100	%)
Restructuring charge	-		(2,341	)	2,341		100	%	-		(3,943	)	3,943		100	%
Adjusted total operating expenses	11,841		8,529		3,312		39	%	20,920		16,309		4,611		28	%
Direct employee costs	8,538		8,264		274		3	%	14,696		15,752		(1,056	)	(7	%)
Restructuring charge	-		(2,293	)	2,293		100	%	-		(3,771	)	3,771		100	%
Adjusted direct employee costs	8,538		5,971		2,567		43	%	14,696		11,981		2,715		23	%
Other corporate costs	3,876		2,607		1,269		49	%	6,797		4,500		2,297		51	%
Acquisition-related costs	(573	)	-		(573	)	(100	%)	(573	)	-		(573	)	(100	%)
Restructuring charge	-		(48	)	48		100	%	-		(172	)	172		100	%
Adjusted other corporate costs	3,303		2,559		744		29	%	6,224		4,328		1,896		44	%

As a technology company, CMG’s largest investment is its people, and approximately 69% of total operating expenses relate to direct employee costs At September 30, 2023, CMG’s full-time equivalent staff complement was 296 employees and consultants (CMGL Canada – 185; BHV – 111; (September 30, 2022 – CMGL Canada - 159). For the three and six months ended September 30, 2023, adjusted direct employee costs increased by 43% and 23% respectively, compared to the same period of the previous fiscal year primarily due to an increase in headcount and share-based payment expense as a result of an increase in share price in the current quarter.

Adjusted other corporate costs increased by 29% and 44% respectively, compared to the same period of the previous fiscal year, primarily due to increased agent commissions and other office-related costs.

Additional IFRS Measure

Funds flow from operations is an additional IFRS measure that the Company presents in its consolidated statements of cash flows. Funds flow from operations is calculated as cash flows provided by operating activities adjusted for changes in non-cash working capital. Management believes that this measure provides useful supplemental information about operating performance and liquidity, as it represents cash generated during the period, regardless of the timing of collection of receivables and payment of payables, which may reduce comparability between periods.

Non-IFRS Financial Measures and Reconciliation of Non-IFRS Measures

Certain financial measures in this MD&A – namely, Adjusted EBITDA, free cash flow, adjusted total operating expenses, direct employee costs, adjusted direct employee costs, other corporate costs, adjusted other corporate costs, adjusted operating profit, and adjusted net income – do not have a standard meaning prescribed by IFRS and, accordingly, may not be comparable to measures used by other companies. Management believes that these indicators nevertheless provide useful measures in evaluating the Company’s performance. Reconciliations of the non-IFRS financial measures to the most directly comparable IFRS financial measure are presented below:

Free Cash Flow Reconciliation to Funds Flow from Operations

		Fiscal 2022				Fiscal 2023			Fiscal 2024
($ thousands, unless otherwise stated)			Q3	Q4	Q1	Q2	Q3	Q4		Q1	Q2
Funds flow from operations			7,022	7,105	4,558	4,974	8,169	7,656		7,920	11,491
Capital expenditures			(481)	(62)	-	(130)	(211)	(1,707)		(45)	(51)
Repayment of lease liabilities			(314)	(459)	(303)	(339)	(413)	(553)		(412)	(412)
Free cash flow			6,227	6,584	4,255	4,505	7,545	5,396		7,463	11,028
Weighted average shares – basic (thousands)			80,335	80,335	80,335	80,412	80,511	80,603		80,685	80,834
Free cash flow per share – basic			0.08	0.08	0.05	0.06	0.09	0.07		0.09	0.14

Adjusted EBITDA and Adjusted EBITDA as a % of Total Revenue

	Three months ended September 30					Six months ended September 30
	2023	2022	$ change	% change	2023		2022	$ change	% change
($ thousands, except per share data)
Net income	6,516	4,410	2,106	48%	13,420		8,223	5,197	63%
Add (deduct):
Depreciation and amortization	1,021	937	84	9%	1,982		1,868	114	6%
Stock-based compensation	2,291	427	1,864	437%	2,395		501	1,894	378%
Acquisition costs	573	-	573	100%	573		-	573	100%
Restructuring charges	-	2,341	(2,341)	(100%)	-		3,943	(3,943)	(100%)
Income and other tax expense	2,277	1,579	698	44%	4,521		2,948	1,573	53%
Interest income	(692)	(377)	(315)	84%	(1,452)		(557)	(895)	161%
Foreign exchange loss (gain)	(856)	(543)	(313)	59%	51		(1,074)	1,125	(105%)
Repayment of lease liabilities	(412)	(339)	(73)	19%	(824)		(642)	(182)	27%
Adjusted EBITDA	10,718	8,435	2,283	27%	20,666		15,210	5,456	36%
Adjusted EBITDA as a % of total revenue	47%	47%			48%		44%

Corporate Profile

CMG (TSX:CMG) is a global software and consulting company that combines science and technology with deep industry expertise to solve complex subsurface and surface challenges for the new energy industry around the world. CMG is headquartered in Calgary, AB, with offices in Houston, Oxford, Dubai, Bogota, Rio de Janeiro, Bengaluru, and Kuala Lumpur. For more information, please visit www.cmgl.ca.

Quarterly Filings and Related Quarterly Financial Information

Management’s Discussion and Analysis (“MD&A”) and condensed consolidated interim financial statements and the notes thereto for the three and six-months ended September 30, 2023 can be obtained from CMG’s website www.cmgl.ca. The documents will also be available under CMG’s SEDAR profile www.sedarplus.ca. Additionally, CMG has published on the Investor Relations section of its website (www.cmgl.ca/investors) a Q2 2024 Investor Presentation.

Consolidated Statements of Financial Position

UNAUDITED (thousands of Canadian $)	September 30, 2023	March 31, 2023
Assets
Current assets:
Cash	48,225	66,850
Restricted cash	97	-
Trade and other receivables	26,625	23,910
Prepaid expenses	1,085	1,060
Prepaid income taxes	1,739	444
	77,771	92,264
Intangible assets	25,012	1,321
Right-of-use assets	30,875	30,733
Property and equipment	9,919	10,366
Goodwill	6,571	-
Deferred tax asset	-	2,444
Total assets	150,148	137,128
Liabilities and shareholders’ equity
Current liabilities:
Trade payables and accrued liabilities	12,446	9,883
Income taxes payable	75	33
Acquisition holdback payable	3,561	-
Deferred revenue	32,339	34,797
Lease liabilities	3,106	1,829
	51,527	46,542
Lease liabilities	35,386	36,151
Stock-based compensation liabilities	2,090	1,985
Acquisition earnout	1,507	-
Other long-term liabilities	213	-
Deferred tax liabilities	65	-
Total liabilities	90,788	84,678
Shareholders’ equity:
Share capital	83,246	81,820
Contributed surplus	15,612	15,471
Cumulative translation adjustment	4	-
Deficit	(39,502)	(44,841)
Total shareholders’ equity	59,360	52,450
Total liabilities and shareholders' equity	150,148	137,128

Consolidated Statements of Operations and Comprehensive Income

	Three months ended September 30				Six months ended September 30
UNAUDITED (thousands of Canadian $ except per share amounts)	2023		2022 (note 2(e))		2023		2022 (note 2(e))
Revenue Cost of revenue	22,633 2,493		18,082 1,657		43,381 4,398		34,189 3,421
Gross profit	20,140		16,425		38,983		30,768
Operating expenses
Sales and marketing	3,384		2,291		5,739		4,194
Research and development	4,767		5,043		8,819		9,172
General and administrative	4,263		3,536		6,935		6,886
	12,414		10,870		21,493		20,252
Operating profit	7,726		5,555		17,490		10,516
Finance income	1,548		920		1,452		1,631
Finance costs	(481	)	(486	)	(1,001	)	(976	)
Profit before income and other taxes	8,793		5,989		17,941		11,171
Income and other taxes	2,277		1,579		4,521		2,948
Net income for the period	6,516		4,410		13,420		8,223
Other comprehensive income:
Foreign currency translation adjustment	4		-		4		-
Other comprehensive income	4		-		4		-
Total comprehensive income	6,520		4,410		13,424		8,223
Net income per share – basic	0.08		0.05		0.17		0.10
Net income per share – diluted	0.08		0.05		0.16		0.10
Dividend per share	0.05		0.05		0.10		0.10

Consolidated Statements of Cash Flows

	Three months ended September 30				Six months ended September 30
UNAUDITED (thousands of Canadian $)	2023		2022		2023		2022
Operating activities
Net income	6,516		4,410		13,420		8,223
Adjustments for:
Depreciation and amortization of property, equipment, right- of use assets	892		937		1,796		1,868
Amortization of intangible assets	129		-		186		-
Deferred income tax expense (recovery)	2,028		235		1,978		81
Stock-based compensation	1,604		(608	)	1,709		(640	)
Foreign exchange and other non-cash items	322		-		322		-
Funds flow from operations	11,491		4,974		19,411		9,532
Movement in non-cash working capital:
Trade and other receivables	(581	)	1,428		3,301		3,824
Trade payables and accrued liabilities	405		323		(2,389	)	(622	)
Prepaid expenses and other assets	291		(360	)	290		(422	)
Income taxes receivable (payable)	(1,612	)	(264	)	(1,251	)	(424	)
Deferred revenue	3,044		(245	)	(5,137	)	(6,290	)
Change in non-cash working capital	1,547		882		(5,186	)	(3,934	)
Net cash provided by operating activities	13,038		5,856		14,225		5,598
Financing activities
Repayment of acquired line of credit	(2,012	)	-		(2,012	)	-
Proceeds from issuance of common shares	512		415		1,213		415
Repayment of lease liabilities	(412	)	(339	)	(824	)	(642	)
Dividends paid	(4,042	)	(4,025	)	(8,081	)	(8,042	)
Net cash used in financing activities	(5,954	)	(3,949	)	(9,704	)	(8,269	)
Investing activities
Corporate acquisition, net of cash acquired	(23,050	)	-		(23,050	)	-
Property and equipment additions	(51	)	(130	)	(96	)	(130	)
Net cash used in investing activities	(23,101	)	(130	)	(23,146	)	(130	)
Increase (decrease) in cash	(16,017	)	1,777		(18,625	)	(2,801	)
Cash, beginning of period	64,242		55,082		66,850		59,660
Cash, end of period	48,225		56,859		48,225		56,859
Supplementary cash flow information
Interest received	692		377		1,452		557
Interest paid	481		486		950		976
Income taxes paid	2,580		1,387		4,358		2,883

For further information, please contact:

Pramod Jain Chief Executive Officer (403) 531-1300 pramod.jain@cmgl.ca	or	Sandra Balic Vice President, Finance & CFO (403) 531-1300 sandra.balic@cmgl.ca

For investor inquiries, please contact:
Kim MacEachern
Manager, Investor Relations
cmg-investors@cmgl.ca

For media inquiries, please contact:
marketing@cmgl.ca
Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements". Forward-looking statements can be identified by words such as: "anticipate", "intend", "plan", "goal", "seek", "believe", "project", "estimate", "expect", "strategy", "future", "likely", "may", "should", "will", and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding the benefits of the acquired technology, the ongoing development thereof; and the ability of data analytics to improve efficiency, cut costs and reduce risks.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are detailed in the companies’ public filings.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by applicable securities laws, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.