Day: November 7, 2024

EDINBURG, Va., Nov. 07, 2024 (GLOBE NEWSWIRE) — Shenandoah Telecommunications Company (“Shentel” or the “Company”) SHEN announced third quarter 2024 financial and operating results.

Third Quarter 2024 Highlights

• Glo Fiber Expansion Markets¹ experienced growth in a number of key metrics:
  • Added approximately 6,000 subscribers in the third quarter of 2024, ending the quarter with over 59,000 subscribers.
  • Passings grew approximately 22,000 to a total of approximately 320,000.
  • Revenue grew $5.8 million or 62% to $15.1 million compared to the same period in 2023. Excluding Horizon markets, revenue grew 56% over the same period in 2023.
• Integration of Horizon ahead of schedule and on track to exceed synergy targets.

“We had a record quarter for Glo Fiber net additions and revenue driving top line revenue growth.” said President and CEO, Christopher E. French. “We made great progress with the integration of our Horizon acquisition, converting four of the six Horizon back-office systems to-date with clear line of sight to finish the integration in early 2025. We now expect to realize $11 million in annual synergy savings. We expect Glo Fiber and synergies will be key growth catalysts in 2025 and drivers of margin expansion.”

Shentel’s third-quarter earnings conference call will be webcast at 8:00 a.m. ET on Thursday, November 7, 2024. The webcast and related materials will be available on Shentel’s Investor Relations website at https://investor.shentel.com/.

Third Quarter 2024 Results

• Revenue in the third quarter of 2024 grew $20.2 million, or 30.0%, to $87.6 million, primarily driven by $16.9 million of revenue resulting from the acquisition of Horizon. Excluding Horizon, revenues grew $3.3 million or 4.9% primarily driven by Glo Fiber Expansion Markets Residential & SMB revenue growth of $5.3 million partially offset by declines in commercial fiber and Incumbent Broadband Markets² Residential & SMB revenue. Glo Fiber Expansion Markets revenue growth was driven by a 54% increase in broadband data subscribers and an 7% increase in broadband data Average Revenue per User (“ARPU”). Commercial Fiber revenue decreased, as expected, due to the previously disclosed decline in T-Mobile revenue from prior period backhaul circuit disconnects as part of decommissioning the former Sprint network. Incumbent Broadband Markets revenue declined 3% due to lower video and other revenue.

• Cost of services for the three months ended September 30, 2024, increased approximately $8.1 million, or 31.0%, compared with the three months ended September 30, 2023, primarily driven by $8.6 million of cost of services from Horizon partially offset by $0.4 million decline in the legacy Shentel markets due primarily to lower programming costs as customers continue to migrate to video service alternatives.

• Selling, general and administrative expense for the three months ended September 30, 2024, increased $5.1 million, or 22.0%, compared with the three months ended September 30, 2023, primarily driven by $3.7 million of selling, general and administrative costs from Horizon and higher advertising and sales headcount to support the Glo Fiber expansion.

• Integration and acquisition expense for the three months ended September 30, 2024 increased $0.5 million compared with the three months ended September 30, 2023, primarily driven by non-recurring acquisition-related costs related to the Horizon acquisition and integration.

• Depreciation and amortization for the three months ended September 30, 2024, increased $11.6 million, or 71.7%, compared with the three months ended September 30, 2023, primarily driven by $8.3 million of depreciation and amortization expense resulting from Horizon. The remaining increase in depreciation and amortization expense is attributable to the Company’s expansion of its Glo Fiber network.

• Net loss from continuing operations was $5.3 million in the third quarter of 2024 compared with net loss from continuing operations of $0.2 million in the third quarter of 2023. The increase in the net loss was due primarily to higher depreciation and amortization from Horizon and Glo Fiber network expansion and higher interest expense from higher borrowings.

• Adjusted EBITDA for the three months ended September 30, 2024 increased to $26.6 million, representing a $6.3 million, or 31.3%, increase compared with the three months ended September 30, 2023. The former Horizon markets contributed $4.7 million. Excluding the former Horizon markets, Adjusted EBITDA grew $1.7 million, or 8.3%, driven by the previously disclosed revenue growth partially offset by higher sales and marketing expenses to support new Glo Fiber markets. Adjusted EBITDA margins grew sequentially from 27% in the second quarter to 30% in the third quarter.

• Total homes passed grew 23,800 to approximately 554,000 including 320,000 Glo Fiber Expansion Market passings and 234,000 Incumbent Broadband Markets passings. Glo Fiber Expansion Markets broadband data subscriber net additions was approximately 6,000. Incumbent Broadband Markets data subscriber net additions were flat in the third quarter 2024.

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¹ _{Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.}
² _{Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.}

Other Information

• Capital expenditures were $226.5 million for the nine months ended September 30, 2024 compared with $189.3 million in the comparable 2023 period. The $37.1 million increase in capital expenditures was primarily driven by $20.8 million of capital expenditures in the former Horizon markets and expansion of the networks in Glo Fiber Expansion Markets and government-subsidized markets.

• As of September 30, 2024, our cash and cash equivalents totaled $43.1 million.

Earnings Call Webcast

Date: Thursday, November 7, 2024
Time: 8:00 a.m. ET
Listen via Internet: https://investor.shentel.com/
For Analysts, please register to dial-in at this link.

A replay of the call will be available for a limited time on the Investor Relations page of the Company’s website.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company (Shentel) provides broadband services through its high speed, state-of-the-art fiber optic and cable networks to residential and commercial customers in eight contiguous states in the eastern United States. The Company’s services include: broadband internet, video, voice, high-speed Ethernet, dark fiber leasing, and managed network services. The Company owns an extensive regional network with over 16,300 route miles of fiber. For more information, please visit www.shentel.com.

This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, its prospects and its financial position. These statements can be identified by the use of forward-looking terminology such as “believes,” “estimates,” “expects,” “intends,” “may,” “will,” “plans,” “should,” “could,” or “anticipates” or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and our Quarterly Reports on Form 10-Q. Those factors may include, among others, the expected savings and synergies from the Horizon Transaction may not be realized or may take longer or cost more than expected to realize, changes in overall economic conditions including rising inflation, regulatory requirements, changes in technologies, changes in competition, demand for our products and services, availability of labor resources and capital, natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, and other conditions. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.

CONTACTS:
Shenandoah Telecommunications Company
Jim Volk
Senior Vice President and Chief Financial Officer
540-984-5168
Jim.Volk@emp.shentel.com

Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin

The Company defines Adjusted EBITDA as net (loss) income from continuing operations calculated in accordance with GAAP, adjusted for the impact of depreciation and amortization, impairment expense, other income (expense), net, interest income, interest expense, income tax expense (benefit), stock compensation expense, transaction costs related to acquisition and disposition events (including professional advisory fees, integration costs, and related compensatory matters), restructuring expense, tax on equity award vesting and exercise events, and other non-comparable items. A reconciliation of net (loss) income from continuing operations, which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is provided below herein.

Adjusted EBITDA margin is the Company’s calculation of Adjusted EBITDA, divided by revenue calculated in accordance with GAAP.

The Company uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of performance to evaluate operating effectiveness and assess its ability to increase revenues while controlling expense growth and the scalability of the Company’s business growth strategy. Adjusted EBITDA is also a significant performance measure used by the Company in its incentive compensation programs. The Company believes that the exclusion of the expense and income items eliminated in calculating Adjusted EBITDA and Adjusted EBITDA margin provides management and investors a useful measure for period-to-period comparisons of the Company’s core operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operations. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating the Company’s operating results. However, use of Adjusted EBITDA and Adjusted EBITDA margin as analytical tools has limitations, and investors and others should not consider them in isolation or as substitutes for analysis of our financial results as reported under GAAP. In addition, other companies may calculate Adjusted EBITDA and Adjusted EBITDA margin or similarly titled measures differently, which may reduce their usefulness as comparative measures.

Supplemental Information

Operating Statistics

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(1) Homes and businesses are considered passed (“passings”) if we can connect them to our network without further extending the distribution system. Passings is an estimate based upon the best available information. Passings will vary among video, broadband data and voice services.
(2) Penetration is calculated by dividing the number of users by the number of passings or available homes, as appropriate.
(3) Total fiber miles are measured by taking the number of fiber strands in a cable and multiplying that number by the route distance. For example, a 10 mile route with 144 fiber strands would equal 1,440 fiber miles.
(4) Incumbent Broadband Markets consists of Shentel Incumbent Cable Markets and Horizon Incumbent Telephone Markets with Fiber-To-The-Home (“FTTH”) passings.
(5) Glo Fiber Expansion Markets consists of FTTH passings in greenfield expansion markets in the Shentel and former Horizon markets.

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^{(1) Average Revenue Per RGU calculation = (Residential & SMB Revenue) / average RGUs / 3 months.}

Total revenues increased 14.8%
Net income of $2.1 million and Adjusted EBITDA growth of 18% to $25.6 million
9 new system-wide restaurants opened in 8 states

BRADENTON, Fla., Nov. 07, 2024 (GLOBE NEWSWIRE) — First Watch Restaurant Group, Inc. FWRG (“First Watch” or the “Company”), the leading Daytime Dining concept serving breakfast, brunch and lunch, today reported financial results for the thirteen weeks ended September 29, 2024 (“Q3 2024”).

“We are pleased with our performance in Q3 as it reflects our teams’ superb restaurant-level operations, especially considering an uneven consumer backdrop. Traffic picked up through the quarter, our employee turnover once again improved and remains favorable relative to the industry as a whole and Adjusted EBITDA grew 18%,” said Chris Tomasso, First Watch CEO and President. “We are committed to ensuring our people and real estate pipelines are in place to support our growth to 2,200 locations.”

Highlights:

• Total revenues increased 14.8% to $251.6 million in Q3 2024 from $219.2 million in Q3 2023
• System-wide sales increased 8.0% to $291.8 million in Q3 2024 from $270.3 million in Q3 2023
• Same-restaurant sales growth of negative 1.9% and same-restaurant traffic growth of negative 4.4%*
• Income from operations margin decreased to 2.5% in Q3 2024 from 3.6% in Q3 2023
• Restaurant level operating profit margin** increased to 18.9% in Q3 2024 from 18.7% in Q3 2023
• Net income decreased to $2.1 million, or $0.03 per diluted share, in Q3 2024 from $5.4 million, or $0.09 per diluted share, in Q3 2023
• Adjusted EBITDA** increased to $25.6 million in Q3 2024 from $21.6 million in Q3 2023
• Opened 9 system-wide restaurants in 8 states, resulting in a total of 547 system-wide restaurants (466 company-owned and 81 franchise-owned) across 29 states
• Update regarding Hurricane Milton: All company-owned First Watch restaurants were fully operational shortly after Hurricane Milton and, as such, the storm is not expected to have a material impact on same-restaurant sales in the fourth quarter. As a result of associated construction-related disruptions, five company-owned new restaurant openings, previously expected in December 2024, have been rescheduled to January 2025.
• The Company experienced no check management in the third quarter, though planned, targeted marketing campaigns had a small impact on net per person average.

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* Comparing the thirteen-week periods ended September 29, 2024 and October 1, 2023 in order to compare like-for-like periods. See “Key Performance Indicators” for additional information.
** See Non-GAAP Financial Measures Reconciliations section below.

For additional financial information related to the thirteen weeks ended September 29, 2024, refer to the Company’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2024, which can be accessed at https://investors.firstwatch.com in the Financials & Filings section.

Updated Outlook Fiscal Year 2024

Based upon third quarter results and current trends, the Company updated the following guidance metrics for the 52-week fiscal year ending December 29, 2024:

• Same-restaurant sales growth of around negative 1.0% with same restaurant traffic growth of negative 4.0%-4.5%
• Total revenue growth in the range of 16.5% to 17.0%⁽¹⁾
• Adjusted EBITDA⁽²⁾ in the range of $110.0 million to $112.0 million⁽¹⁾
• Total new system-wide restaurant openings anticipated to be 47, net of 2 company-owned restaurant closures (43 new company-owned restaurants and 6 new franchise-owned restaurants), which reflects the effect of five new restaurant openings delayed by Hurricane Milton and rescheduled to early 2025.
• Blended tax rate of around 33.0%
• Capital expenditures of around $130.0 million invested primarily in new restaurant projects and planned remodels⁽³⁾

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(1) Includes net impact of approximately 7.0% in total revenue growth and approximately $14.0 million in Adjusted EBITDA associated with completed acquisitions.
(2) We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, a reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort.
(3) Does not include the capital outlays associated with the acquisition of franchise-owned restaurants.

Conference Call and Webcast

Chris Tomasso, Chief Executive Officer and President, and Mel Hope, Chief Financial Officer, will host a conference call and webcast to discuss these financial results for Q3 2024 on November 7, 2024 at 8:00 AM ET.

Interested parties may listen to the conference call via any one of two options:

The webcast will be archived shortly after the call has concluded.

Definitions

The following definitions apply to these terms as used in this release:

System-wide restaurants: the total number of restaurants, including all company-owned and franchise- owned restaurants.

System-wide sales: consists of restaurant sales from our company-owned restaurants and franchise-owned restaurants. We do not recognize the restaurant sales from our franchise-owned restaurants as revenue.

Same-restaurant sales growth: the percentage change in year-over-year restaurant sales (excluding gift card breakage) for the comparable restaurant base, which is defined as the number of company-owned First Watch branded restaurants open for 18 months or longer as of the beginning of the fiscal year (“Comparable Restaurant Base“). For the thirteen weeks ended September 29, 2024 and October 1, 2023, there were 344 restaurants and 327 restaurants, respectively, in our Comparable Restaurant Base.

Same-restaurant traffic growth: the percentage change in traffic counts as compared to the same period in the prior year using the Comparable Restaurant Base. For the thirteen weeks ended September 29, 2024 and October 1, 2023, there were 344 restaurants and 327 restaurants, respectively, in our Comparable Restaurant Base.

Adjusted EBITDA: a non-GAAP measure, is defined as net income (loss) before depreciation and amortization, interest expense, income taxes and items that the Company does not consider in the evaluation of its ongoing core operating performance.

Adjusted EBITDA margin: a non-GAAP measure, is defined as Adjusted EBITDA as a percentage of total revenues.

Restaurant level operating profit: a non-GAAP measure, is defined as restaurant sales, less restaurant operating expenses, which include food and beverage costs, labor and other related expenses, other restaurant operating expenses, pre-opening expenses and occupancy expenses. In addition, Restaurant level operating profit excludes corporate-level expenses and items that are not considered in the Company’s evaluation of its ongoing core operating performance.

Restaurant level operating profit margin: a non-GAAP measure, is defined as Restaurant level operating profit as a percentage of restaurant sales.

About First Watch

First Watch is the leading Daytime Dining concept serving made-to-order breakfast, brunch and lunch using fresh ingredients. A recipient of hundreds of local “Best Breakfast” and “Best Brunch” accolades, First Watch’s chef-driven menu rotates five times a year and includes elevated executions of classic favorites alongside specialties such as its Quinoa Power Bowl, Lemon Ricotta Pancakes, Chickichanga, Morning Meditation fresh juice and signature Million Dollar Bacon. After first appearing on the list in 2022 and 2023, First Watch was named 2024’s #1 Most Loved Workplace® in America by Newsweek and the Best Practice Institute. In 2023, First Watch was named the top restaurant brand in Yelp’s inaugural list of the top 50 most-loved brands in the U.S. In 2022, First Watch was awarded a sought-after MenuMasters honor by Nation’s Restaurant News for its seasonal Braised Short Rib Omelet. First Watch operates more than 540 First Watch restaurants in 29 states. For more information, visit www.firstwatch.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different from the statements made herein. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to any historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “outlook,” “potential,” “project,” “projection,” “plan,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other similar expressions. You should evaluate all forward-looking statements made in this press release in the context of the risks and uncertainties disclosed herein, in our Annual Report on Form 10-K as of and for the year ended December 31, 2023, including under Part I. Item 1A. “Risk Factors” and Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investors Relations section of the Company’s website at https://investors.firstwatch.com/financial-information/sec-filings. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: uncertainty regarding the Russia and Ukraine war, Israel-Hamas war and the related impact on macroeconomic conditions, including inflation, as a result of such conflicts or other related events; our vulnerability to changes in economic conditions and consumer preferences; our inability to successfully open new restaurants or establish new markets; our inability to effectively manage our growth; potential negative impacts on sales at our and our franchisees’ restaurants as a result of our opening new restaurants; a decline in visitors to any of the retail centers, lifestyle centers, or entertainment centers where our restaurants are located; lower than expected same-restaurant sales growth; unsuccessful marketing programs and limited time new offerings; changes in the cost of food; unprofitability or closure of new restaurants or lower than previously experienced performance in existing restaurants; our inability to compete effectively for customers; unsuccessful financial performance of our franchisees; our limited control over our franchisees’ operations; our inability to maintain good relationships with our franchisees; conflicts of interest with our franchisees; the geographic concentration of our system-wide restaurant base in the southeast portion of the United States; damage to our reputation and negative publicity; our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media; our limited number of suppliers and distributors for several of our frequently used ingredients and shortages or disruptions in the supply or delivery of such ingredients; information technology system failures or breaches of our network security; our failure to comply with federal and state laws and regulations relating to privacy, data protection, advertising and consumer protection, or the expansion of current or the enactment of new laws or regulations relating to privacy, data protection, advertising and consumer protection; our potential liability with our gift cards under the property laws of some states; our failure to enforce and maintain our trademarks and protect our other intellectual property; litigation with respect to intellectual property assets; our dependence on our executive officers and certain other key employees; our inability to identify, hire, train and retain qualified individuals for our workforce; our failure to obtain or to properly verify the employment eligibility of our employees; our failure to maintain our corporate culture as we grow; unionization activities among our employees; employment and labor law proceedings; labor shortages or increased labor costs or health care costs; risks associated with leasing property subject to long-term and non-cancelable leases; risks related to our sale of alcoholic beverages; costly and complex compliance with federal, state and local laws; changes in accounting principles applicable to us; our vulnerability to natural disasters, unusual weather conditions, pandemic outbreaks, political events, war and terrorism; our inability to secure additional capital to support business growth; our level of indebtedness; failure to comply with covenants under our credit facility; and the interests of our largest stockholder may differ from those of public stockholders.

The forward-looking statements included in this press release are made only as of the date hereof and are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. All information presented herein is based on our fiscal calendar. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years and the associated quarters, months and periods of those fiscal years.

Investor Relations Contact

Steven L. Marotta
941-500-1918
investors@firstwatch.com

Media Relations Contact

Jenni Glester
407-864-5823
jglester@firstwatch.com

Non-GAAP Financial Measures (Unaudited)

To supplement the consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we use the following non-GAAP measures, which present operating results on an adjusted basis: (i) Adjusted EBITDA, (ii) Adjusted EBITDA margin, (iii) Restaurant level operating profit and (iv) Restaurant level operating profit margin. Our presentation of these non-GAAP measures includes isolating the effects of some items that are either nonrecurring in nature or vary from period to period without any correlation to our ongoing core operating performance. These supplemental measures of performance are not required by or presented in accordance with GAAP. Management believes these non-GAAP measures provide investors with additional visibility into our operations, facilitate analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance, help to identify operational trends and allow for greater transparency with respect to key metrics used by management in our financial and operational decision making. Our non-GAAP measures may not be comparable to similarly titled measures used by other companies and have important limitations as analytical tools. These non-GAAP measures should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP as they may not provide a complete understanding of our performance. These non-GAAP measures should be reviewed in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

Management uses Adjusted EBITDA and Adjusted EBITDA margin (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the Company’s operating results and the effectiveness of our business strategies and (iii) internally as benchmarks to compare the Company’s performance to that of its competitors.

Non-GAAP Financial Measures Reconciliations

Adjusted EBITDA and Adjusted EBITDA margin – The following table reconciles Net income and Net income margin, the most directly comparable GAAP measures to Adjusted EBITDA and Adjusted EBITDA margin for the periods indicated:

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(1) Represents costs related to process improvements and strategic initiatives. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(2) Represents non-cash, stock-based compensation expense which is recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(3) Represents professional service costs incurred in connection with the Delaware Voluntary Disclosure Agreement Program related to unclaimed or abandoned property. These costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(4) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, expenses related to debt, secondary offering costs and, in 2024, an offsetting gain on release of contingent consideration liability.
(5) Represents insurance recoveries, net of costs incurred, in connection with hurricane damage, which were recorded in Other income, net on the Consolidated Statements of Operations and Comprehensive Income.
(6) Represents costs related to the disposal of assets due to retirements, replacements or certain restaurant closures. There were no impairments recognized during the periods presented.
(7) Represents costs incurred for hiring qualified individuals. These costs are recorded within General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(8) Severance costs are recorded in General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.
(9) Represents the non-cash portion of straight-line rent expense recorded within both Occupancy expenses and General and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income.

Restaurant level operating profit and Restaurant level operating profit margin

Restaurant level operating profit and Restaurant level operating profit margin are not indicative of our overall results, and because they exclude corporate-level expenses, do not accrue directly to the benefit of our stockholders. We will continue to incur such expenses in the future. Restaurant level operating profit and Restaurant level operating profit margin are important measures we use to evaluate the performance and profitability of each operating restaurant, individually and in the aggregate and to make decisions regarding future spending and other operational decisions. We believe that Restaurant level operating profit and Restaurant level operating profit margin provide useful information about our operating results, identify operational trends and allow for transparency with respect to key metrics used by us in our financial and operational decision-making.

The following tables reconcile Income from operations and Income from operations margin, the most directly comparable GAAP financial measures, to Restaurant level operating profit and Restaurant level operating profit margin for the periods indicated:

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(1) Represents costs incurred in connection with the acquisition of franchise-owned restaurants, expenses related to debt, secondary offering costs and, in 2024, an offsetting gain on release of contingent consideration liability.
(2) Represents costs related to the disposal of assets due to retirements, replacements or certain restaurant closures. There were no impairments recognized during the periods presented.
(3) Represents the non-cash portion of straight-line rent expense recorded within Occupancy expenses on the Consolidated Statements of Operations and Comprehensive Income.

• WELL surpassed $1 billion annualized revenue run-rate with record revenue of $251.7 million in Q3-2024, marking a 27%⁽¹⁾ increase compared to Q3-2023, mainly driven by organic growth of 23%.
• WELL achieved record Adjusted EBITDA⁽²⁾ of $32.7 million in Q3-2024, an increase of 16% as compared to Q3-2023.
• WELL achieved a record total of 1.5 million total patient visits in Q3-2024 an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis.
• WELL increases its 2024 annual guidance range for revenue of $985 million to $995 million, while maintaining Adjusted EBITDA guidance to be in the upper half of $125 million to $130 million.

VANCOUVER, BC, Nov. 7, 2024 /PRNewswire/ – WELL Health Technologies Corp. WELL WHTCF (the “Company” or “WELL“), a digital healthcare company focused on positively impacting health outcomes by leveraging technology to empower healthcare practitioners and their patients globally, is pleased to announce its interim consolidated financial results for the quarter ended September 30, 2024.

Hamed Shahbazi, Founder and CEO of WELL, commented, “Third quarter of 2024 was one of the best quarters in the Company’s history by just about every objective and important metric. WELL delivered record quarterly performances for revenue, Adj EBITDA, free cashflow, patient visits and organic growth in the third quarter. We are also pleased to report that we surpassed $1 billion in annualized revenue run-rate, one quarter ahead of our previously stated plan. Record results were driven by our Canadian Patient Services business which delivered robust revenue growth of 35% YoY. Our current pipeline of acquisitions, which includes 17 signed LOIs and definitive agreements pending close, is the strongest we’ve had representing over $100 million in revenues with a heavy emphasis on our Canadian lines of business. As of the end of Q3-2024, WELL proudly supports a network of over 4,000 providers and clinicians delivering care through our physical and virtual clinics. We also continue to evolve and innovate our clinical offerings and are pleased to announce that this past week we launched a new weight care and GLP-1 offering in Canada on our Tia Health virtual care platform. This is just the beginning as we are excited about innovating and delivering superior patient outcomes for Canadians in this category. I am proud to raise our 2024 annual revenue guidance to $985 to $995 million, not including any un-announced acquisitions. As we close out 2024, our focus remains on enhancing profitability as we are projecting a healthy year-over-year increase in free cash flow to shareholders this year. We are a very healthy and growing Company and getting stronger as we are on track to deliver record revenue, Adjusted EBITDA, and Adjusted Net Income for 2024, while boosting cash flow, reducing debt, minimizing net share issuances to the lowest yearly rate ever, and reflecting significant reductions in earnout payments.”

Mr. Shahbazi further added, “Both of WELL’s US based virtual care platforms, Wisp and Circle Medical continue to outperform with Wisp experiencing 35% revenue growth in Q3-2024 versus Q3-2023 and recently successfully launching their weight care and GLP-1 offering in 20 states. Also, Circle Medical achieved 61% year-over-year quarterly revenue growth while maintaining profitability. The strategic review process, including potential sale of these two assets, is continuing, and making progress.”

Eva Fong, WELL’s Chief Financial Officer, added, “Earlier this year we implemented a comprehensive cost-cutting program to support our 2024 operating plan, which is contributing to our record Adjusted EBITDA results this quarter and on a YTD basis. In Q3-2024, we generated $16.2 million in Adjusted Free Cashflow⁽²⁾ available to shareholders or 6.5 cents per share and our aim is to improve on this next year. Along with these savings and strong cash flows, we are on track to reduce annual share dilution to its lowest level this fiscal year, driven in part by shifting much of our earnout payment obligations to cash and transitioning some of our employee incentive programs to be more cash-based rather than relying on share-based compensation. Additionally, we plan to sustain our share buyback program as we haven’t issued any new shares since beginning this program and continue to favour cash vs shares, as our Board of Directors believes the current share price does not fully reflect the underlying value of the Company. I am pleased to report that WELL is in a strong financial position and is able to continue funding organic growth and future acquisitions through cash flows from operations.”

Third Quarter 2024 Financial Highlights:

• WELL achieved record quarterly revenue of $251.7 million in Q3-2024, an increase of 23% as compared to revenue of $204.5 million generated in Q3-2023 (or 27%⁽¹⁾ with reference to continuing operations). This growth was primarily driven by organic growth of 23%. Growth from acquisitions of 4% was offset by the impact from divestitures.
• Canadian Patient Services revenue was $78.0 million in Q3-2024, an increase of 35% as compared to $57.8 million in Q3-2023.
• U.S. Patient Services revenue was $158.2 million in Q3-2024, an increase of 21% as compared to $130.7 million in Q3-2023.
• SaaS and Technology Services revenue from continuing businesses was $15.6 million in Q3-2024, an increase of 19% as compared to $13.1 million in Q3-2023.
• Adjusted Gross Profit⁽²⁾ was $112.3 million in Q3-2024, an increase of 19% as compared to Adjusted Gross Profit⁽²⁾ of $94.2 million in Q3-2023.
• Adjusted Gross Margin⁽²⁾ percentage was 44.6% during Q3-2024 compared to Adjusted Gross Margin⁽²⁾ percentage of 46.1% in Q3-2023. The decrease in Adjusted Gross Margin⁽²⁾ percentage was primarily driven by the addition of recruiting revenue from the acquisition of CarePlus, which has lower margins compared to other Patient Services and SaaS and Technology Services revenue.
• Adjusted EBITDA⁽²⁾ was $32.7 million in Q3-2024, an increase of 16% as compared to Adjusted EBITDA⁽²⁾ of $28.2 million in Q3-2023.
• Adjusted EBITDA to WELL shareholders⁽²⁾ was $25.1 million in Q3-2024, an increase of 10% as compared to Adjusted EBITDA to WELL shareholders⁽²⁾ of $22.9 million in Q3-2023.
• Adjusted Net Income⁽²⁾ was $13.0 million, or $0.05 per share in Q3-2024, as compared to Adjusted Net Income⁽²⁾ of $12.9 million, or $0.05 per share in Q3-2023.

Third Quarter 2024 Patient Visit Metrics:

WELL achieved a record 1.5 million total patient visits in Q3-2024, an increase of 41% compared to Q3-2023 and representing 5.9 million total patient visits on an annualized run-rate basis. Total patient visits were comprised of 798,000 patient visits in Canada and 682,000 patient visits in the US. Canadian patient visits increased 46% while US patient visits increased 35%, on a year-over-year basis. Growth in total patient visits over the past year was primary driven by organic growth, including the clinic absorption program as well as acquisitions.

Total Care Interactions were 2.2 million in Q3-2024, a year-over-year increase of 41% compared to Q3-2023 and representing 9.0 million Total Care Interactions on an annualized run-rate basis.  

Third Quarter 2024 Business Highlights:

On July 10, 2024, the Company announced the approval of a historic $44 million project, Health Compass II, the largest DIGITAL project ever awarded to advance AI-powered tech enablement for care providers. This initiative, led by WELL and its consortium partners, aims to enhance AI and interoperability in Canadian healthcare. As the lead commercialization partner and first customer, WELL will provide expertise and interoperability, enabling the development of new AI tools to support healthcare providers and improve patient outcomes.

On July 17, 2024, the Company announced the launch of its AI-powered co-pilot for cardiologists, powered by HEALWELL AI, to improve the detection of cardiovascular disease (CVD). This co-pilot, an extension of the WELL AI Decision Support (WAIDS) product offering, will be deployed in WELL Diagnostic Centers, Canada’s largest cardiology and medical diagnostic group, across over 40 locations in Ontario. This initiative aims to assist cardiologists in identifying high-risk patients, enhancing early detection and management of CVD.

On August 13, 2024, the Company announced that its majority-owned subsidiary, Circle Medical, surpassed a $100 million USD revenue run rate, reporting $8.87 million in revenue for July 2024, reflecting 65% year-over-year growth. Circle Medical has been profitable on an Adjusted EBITDA basis for over 2.5 years and maintains a gross margin of approximately 55%.

On August 21, 2024, the Company announced that its majority-owned subsidiary, Wisp, surpassed one million patients served and achieved a revenue run rate of over CAD$100 million, based on July 2024 results. Wisp recorded USD$6.5 million in revenue for July, reflecting 30% year-over-year growth. Wisp also launched over ten new products in 2024, expanding its offerings in fertility, menopause, and at-home testing, while preparing for additional product launches.

On September 10, 2024, the Company announced the acquisition of three primary care clinics in British Columbia and definitive agreements to acquire four diagnostic imaging clinics in Alberta. WELL also reported a Pre-Tax Unlevered ROIC of 14% for its Canadian clinics business. The Company’s acquisition pipeline includes 5 signed LOIs representing $11.8 million in revenue.

Events Subsequent to September 30, 2024:

On October 17, 2024, the Company announced the launch of a comprehensive weight care vertical by its majority-owned subsidiary, Wisp. This new service provides personalized online consultations and access to four weight care solutions, including GLP-1 medications, to support women with hormonal imbalances such as perimenopause, menopause, PCOS, and endometriosis. Wisp also introduced its first over-the-counter weight-loss supplement designed to promote women’s metabolic health, further expanding its menopause care offerings. Wisp now serves over 1.2 million patients as it continues to enhance its women’s healthcare services.

On November 4, 2024, the Company announced the acquisition of Canadian clinical assets from Jack Nathan Medical Corp. including a network of 16 owned and operated clinics, which generated revenue of over $10 million in the past 12 months. The portfolio of owned and operated clinics is expected to operate profitably on an adjusted EBITDA basis in 2025, following immediate synergies with WELL’s shared services program and application of WELL’s clinic transformation program. WELL will also acquire 62 licensee clinics that generate approximately $2.2 million annually in high margin revenue and will become the model for WELL’s new ‘Affiliate Clinic’ business stream. On closing, WELL will acquire Jack Nathan’s rights to operate medical clinics in Walmart Canada stores, creating a platform to expand its network within Walmart Canada’s footprint of over 400 Canadian locations.

Outlook: 

WELL anticipates maintaining its strong performance through the remainder of 2024, with a strategic focus on enhancing operations for organic growth and profitability. The company continues to pursue capital-efficient growth opportunities while effectively managing costs to deliver robust growth and sustained cash flow to shareholders. Management is pleased to update its guidance, which includes only announced acquisitions:

• Annual revenue for 2024 is projected to be in the range of $985 million to $995 million.
• Adjusted EBITDA⁽²⁾ for 2024 is projected to be in the upper half of $125 million to $130 million.
• Adjusted Free Cashflow⁽²⁾ available to shareholders is expected to be approximately $55 million, before the potential impact of increases in capital expenditures in Q4 and timing of tax payments. Management believes these capital expenditures to be a prudent use of cash given WELL’s strong cash flow generation.

WELL plans to advance its U.S. and Canadian Patient Services businesses through both organic and strategic growth, prioritizing capital efficiency. This approach will enable the company to optimize per share financial performance. In Canada, WELL aims to strengthen its market leadership as the nation’s premier pan-Canadian clinical network, offering a highly integrated, tech-enabled outpatient healthcare system. WELL is also committed to growing its WELL Provider Solutions or WPS business both organically and inorganically and demonstrating clear leadership in the Canadian healthcare IT landscape.

Leveraging its deep technological expertise and strategic relationship with HEALWELL AI, WELL is prioritizing investments in AI technologies, with plans to continue to develop and launch innovative products and enhancements across its provider and clinic network.

To boost operational efficiency and profitability, earlier this year WELL has implemented a cost optimization program, including staff restructuring and other cost-saving measures. The company’s strong organic growth and healthy cash flow position it well to continue executing its growth strategies while progressively reducing debt.

Conference Call:

WELL will hold a conference call to discuss its 2024 Third Quarter financial results on Thursday, November 7, 2024, at 1:00 pm ET (10:00 am PT). Please use the following dial-in numbers: 416-764-8650 (Toronto local), 778-383-7413 (Vancouver local), 1-888-664-6383 (Toll-Free) or +1-416-764-8650 (International).

The conference call will also be simultaneously webcast and can be accessed at the following audience URL: https://well.company/events.

Selected Unaudited Financial Highlights:

Please see SEDAR for complete copies of the Company’s condensed interim consolidated financial statements and interim MD&A for the quarter ended September 30, 2024.

Footnotes:

1. Relates to revenue from continuing operations excluding the revenue impact from businesses divested in the prior periods.
2. Non-GAAP Financial Measures
   
   In addition to results reported in accordance with IFRS, the Company uses certain non-GAAP financial measures as supplemental indicators of its financial and operating performance. These non-GAAP financial measures include Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted EBITDA attributable to WELL Shareholders/Non-controlling interests, Adjusted Net Income, and Adjusted Net Income Per Share (basic and diluted). The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.
   
   Adjusted Gross Profit and Adjusted Gross Margin
   The Company defines Adjusted Gross Profit as revenue less cost of sales (excluding depreciation and amortization) and Adjusted Gross Margin as adjusted gross profit as a percentage of revenue. Adjusted gross profit and adjusted gross margin should not be construed as an alternative for revenue or net income (loss) determined in accordance with IFRS. The Company does not present gross profit in its consolidated financial statements as it is a non-GAAP financial measure. The Company believes that adjusted gross profit and adjusted gross margin are meaningful metrics that are often used by readers to measure the Company’s efficiency of selling its products and services.
   
   Adjusted EBITDA
   The Company defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization less (i) net rent expense on premise leases considered to be finance leases under IFRS and before (ii) transaction, restructuring, and integration costs, time-based earn-out expense, change in fair value of investments, share of income (loss) of associates, foreign exchange gain/loss, and stock-based compensation expense, and (iii) gains/losses that are not reflective of ongoing operating performance. The Company considers Adjusted EBITDA to be a financial metric that measures cash flow that the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives. Adjusted EBITDA should not be considered alternatives to net income (loss), cash flow from operating activities or other measures of financial performance defined under IFRS.
   
   Adjusted EBITDA Attributable to WELL Shareholders/Non-Controlling Interests
   The Company defines Adjusted EBITDA attributable to WELL Shareholders (or Shareholder EBITDA) and Adjusted EBITDA attributable to Non-controlling interests as the sum of the Adjusted EBITDA for each relevant legal entity multiplied by WELL’s or the non-controlling interests’ equity ownership, respectively.
   
   Adjusted Net Income and Adjusted Net Income Per Share, Basic and Diluted
   The Company defines Adjusted Net Income as net income (loss), after excluding the effects of stock-based compensation expense, amortization of acquired intangible assets, time-based earnout expense, change in fair value of investments, share of income (loss) of associates, and non-controlling interests. The Company revised its definition of Adjusted Net Income for the three and nine months ended September 30, 2024 to exclude share of income (loss) of associates. Comparative figures have been adjusted to conform to the current period definition. Adjusted Net Income Per Share is Adjusted Net Income divided by weighted average number of shares outstanding. The Company believes that these non-GAAP financial measures provide useful information to analyze our results, enhance a reader’s understanding of past financial performance and allow for greater understanding with respect to key metrics used by management in decision making. More specifically, the Company believes Adjusted Net Income is a financial metric that tracks the earning power of the business that is available to WELL shareholders.
   
   Adjusted Free Cashflow
   The Company defines Adjusted Free Cashflow as Adjusted EBITDA Attributable to Shareholders, less cash interest, less cash taxes and less capital expenditures.
   
   Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, Adjusted EBITDA attributable to WELL Shareholders/Non-controlling interests, Adjusted Net Income, and Adjusted Net Income per Share (basic and diluted), and Adjusted Free Cashflow are not recognized measures for financial statement presentation under IFRS and do not have standardized meanings. As such, these measures may not be comparable to similar measures presented by other companies and should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with IFRS.
   
   
3. Total Care Interactions are defined as Total Patient Visits plus Technology Interactions plus Billed Provider Hours.

WELL HEALTH TECHNOLOGIES CORP.
Per: “Hamed Shahbazi”
Hamed Shahbazi
Chief Executive Officer, Chairman and Director 

About WELL Health Technologies Corp.

WELL’s mission is to tech-enable healthcare providers. We do this by developing the best technologies, services, and support available, which ensures healthcare providers are empowered to positively impact patient outcomes. WELL’s comprehensive healthcare and digital platform includes extensive front and back-office management software applications that help physicians run and secure their practices. WELL’s solutions enable more than 38,000 healthcare providers between the US and Canada and power the largest owned and operated healthcare ecosystem in Canada with 185 clinics supporting primary care, specialized care, and diagnostic services. In the United States WELL’s solutions are focused on specialized markets such as the gastrointestinal market, women’s health, primary care, and mental health. WELL is publicly traded on the Toronto Stock Exchange under the symbol “WELL” and on the OTC Exchange under the symbol “WHTCF”. To learn more about WELL, please visit: www.well.company.  

Forward-Looking Statements

This news release may contain “Forward-Looking Information” within the meaning of applicable Canadian securities laws, including, without limitation: information regarding the Company’s goals, strategies and growth plans; expectations regarding continued revenue and EBITDA growth; the expected benefits and synergies of completed acquisitions; capital allocation plans in the form of more acquisitions or share repurchases; the expected financial performance as well as information in the “Outlook” section herein. Forward-Looking Information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. Forward-Looking Information generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-Looking Information involve known and unknown risks, uncertainties and other factors that may cause future results, performance, or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by the Forward-Looking Information and the Forward-Looking Information are not guarantees of future performance. WELL’s comments expressed or implied by such Forward-Looking Information are subject to a number of risks, uncertainties, and conditions, many of which are outside of WELL ‘s control, and undue reliance should not be placed on such information. Forward-Looking Information are qualified in their entirety by inherent risks and uncertainties, including: direct and indirect material adverse effects from the COVID-19 pandemic; adverse market conditions; risks inherent in the primary healthcare sector in general; regulatory and legislative changes; that future results may vary from historical results; inability to obtain any requisite future financing on suitable terms; any inability to realize the expected benefits and synergies of acquisitions; that market competition may affect the business, results and financial condition of WELL and other risk factors identified in documents filed by WELL under its profile at www.sedar.com, including its most recent Annual Information Form. Except as required by securities law, WELL does not assume any obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.

This news release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about estimated annual run-rate revenue and Adjusted EBIDTA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of WELL may vary from the amounts set out herein and such variation may be material. WELL and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, WELL undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about WELL’s anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.

Neither the TSX nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

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CHESTERBROOK, Pa., Nov. 07, 2024 (GLOBE NEWSWIRE) — Trevena, Inc. TRVN, a biopharmaceutical company focused on the development and commercialization of novel medicines for patients with central nervous system (CNS) disorders, today reported its financial results for the third quarter ended September 30, 2024 and provided an overview of its recent operational updates.

Third Quarter 2024 and Recent Corporate Updates

• $2 million Non-Dilutive Financing Tranche. In July 2024, the Company announced receipt of a non-dilutive, $2 million tranche in connection with an amendment (the “Amendment”) to its existing ex-US royalty financing with R-Bridge Healthcare Fund (“R-Bridge”). The Company is further eligible to receive up to an additional $8 million based on future milestones. As part of the Amendment, (i) certain OLINVYK Chinese IP that had been previously pledged to R-Bridge under the Royalty Financing was transferred to R-Bridge, (ii) warrants previously issued to R-Bridge as part of the Royalty Financing were amended to reduce the exercise price to a 15% premium to the then-current stock price and to extend the exercise period to five years from the effective date of the Amendment, (iii) the existing cap on the US royalty payable to R-Bridge was increased from $10 million to $12 million (with no minimum or fixed payments), and (iv) R-Bridge agreed to forgive $10.0 million of the amount that was outstanding to them prior to the Amendment. This $10.0 million forgiveness was determined to be a troubled debt restructuring and therefore no gain will be recognized by the Company for accounting purposes.
• Reverse Stock Split. In August 2024 the Company effected a 1-for-25 reverse stock of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each 25 shares of the Company’s issued and outstanding common stock were automatically combined into one validly issued, fully paid and non-assessable share of common stock. In addition, proportional adjustments were made to the number of shares of the Company’s common stock issuable under the Company’s equity incentive plans and all outstanding securities and other rights convertible or exercisable into shares of the Company’s common stock, including all stock options and warrants outstanding immediately prior to the effectiveness of the Reverse Stock Split. The Reverse Stock Split did not have any effect on the stated par value of the Company’s common stock.
• Nasdaq Delisting and Subsequent Initiation of Trading on OTC Pink Sheets. On October 4, 2024, the Company announced that it had received notice that the Nasdaq Hearings Panel (the “Panel”) had determined to delist the Company’s common stock from The Nasdaq Stock Market LLC (“Nasdaq”) due to the Company’s failure to comply with the minimum stockholder’s equity requirement under Nasdaq Listing Rule 5550(b)(1) (the “Equity Standard Rule”). As previously disclosed, the Panel had provided the Company until October 2, 2024, to regain compliance with the Equity Standard Rule. Trading in the Company’s common stock was suspended on Nasdaq effective with the open of business on October 8, 2024, and the Company’s common stock began trading on the Pink Open Market operated by the OTC Markets Group, Inc. (commonly referred to as the “pink sheets”) on October 8, 2024 under the trading symbol “TRVN.”
• Additional Cost-Cutting Measures. On October 5, 2024, in connection with certain cost-cutting measures, the Board of Directors (“the Board”) approved the termination of employment, without cause, of three senior executives: Carrie Bourdow (President & CEO), Mark Demitrack (SVP & CMO), and Barry Shin (EVP & COO/CFO). The terminations did not involve any disagreement concerning the Company’s operations, policies or practices, and the Board thanked these executives for their service to the Company. Following the effectiveness of these terminations, Ms. Bourdow continues to serve as Chairman of the Board and Acting CEO; Mr. Demitrack continues to serve as Acting CMO; Mr. Shin continues to serve as Acting COO/CFO; and all entered into consulting agreements with the Company. Following these cost-cutting measures, the Company has four employees.  
• Resignation of Certain Directors. On November 5, 2024, in connection with the ongoing cost-cutting measures, Mark Corrigan, M.D.; Marvin H. Johnson, Jr.; Jake R. Nunn; and Anne M. Phillips each informed the Company of his or her intent to resign from the Board and the committees thereof, effective as of November 5, 2024. None of these resignations was related to any disagreement with the Company over any of its operations, policies or practices. Carrie Bourdow continues to serve as Chairman of the Board and Scott Braunstein, M.D. and Barbara Yanni continue to serve as directors of the Company.
• Continued Strategic Review. The Company continues its review of strategic alternatives, including for OLINVYK, TRV045 and its other pipeline assets. There can be no assurance regarding the schedule for completion of the strategic review process, that this strategic review process will result in the Company pursuing any transaction or that any transaction, if pursued, will be completed. Potential strategic alternatives that may be explored or evaluated include, but are not limited to, a sale, license, divestiture or discontinuation of US commercial sales of OLINVYK; a sale, license or divestiture of our pipeline assets; or a sale, merger or wind down of the Company.

Financial Results and Other Updates for Third Quarter 2024
For the third quarter of 2024, the Company reported a net loss attributable to common stockholders of $4.9 million, or $5.79 per share, compared to $7.9 million, or $14.20 per share in the third quarter of 2023. Cash and cash equivalents were $13.5 million as of September 30, 2024.

About Trevena

Trevena, Inc. is a biopharmaceutical company focused on the development and commercialization of innovative medicines for patients with CNS disorders. The Company has one approved product in the United States, OLINVYK^® (oliceridine) injection, indicated in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate. The Company’s novel pipeline is based on Nobel Prize winning research and includes three differentiated investigational drug candidates: TRV045 for diabetic neuropathic pain and epilepsy, TRV250 for the acute treatment of migraine and TRV734 for maintenance treatment of opioid use disorder.

For more information, please visit www.Trevena.com 

About TRV045

TRV045 is a novel, highly selective sphingosine-1-phosphate subtype 1 (S1P₁) receptor modulator being developed as a potential treatment for acute and chronic neuropathic pain secondary to diabetic peripheral neuropathy. Through a collaboration with the National Institutes of Health, Trevena is also exploring TRV045 as a potential treatment for epilepsy.

S1P receptors are located throughout the body, including the central nervous system, where they are believed to play a role in modulating neurotransmission and membrane excitability.

Trevena’s discovery efforts have identified a family of compounds that are highly selective for the S1P₁ receptor. TRV045 reversed thermal hyperalgesia, a measure of neuropathic pain, in nonclinical models of diabetic peripheral neuropathy and chemotherapy-induced peripheral neuropathy. TRV045 was not associated with lymphopenia and produced no changes in blood pressure, heart rate, or respiratory function at or above pharmacologically active doses in nonclinical studies. TRV045 is an investigational product and is not yet approved by the FDA. Subjects in both studies referenced in this press release were enrolled outside of the United States, and the studies were not conducted under the Investigational New Drug Application for TRV045.

About OLINVYK^® (oliceridine) injection

OLINVYK is a new chemical entity approved by the FDA in August 2020. OLINVYK contains oliceridine, an opioid, which is a Schedule II controlled substance with a high potential for abuse similar to other opioids. It is indicated in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate. OLINVYK is available in 1 mg/1 mL and 2 mg/2 mL single-dose vials, and a 30 mg/30 mL single-patient-use vial for patient-controlled analgesia (PCA). Approved PCA doses are 0.35 mg and 0.5 mg and doses greater than 3 mg should not be administered. The cumulative daily dose should not exceed 27 mg. Please see Important Safety Information, including the BOXED WARNING, and full prescribing information at www.OLINVYK.com.

IMPORTANT SAFETY INFORMATION

WARNING: SERIOUS AND LIFE-THREATENING RISKS FROM USE

OF OLINVYK

Addiction, Abuse, and Misuse

Because the use of OLINVYK exposes patients and other users to the risks of opioid addiction, abuse, and misuse, which can lead to overdose and death, assess each patient’s risk prior to prescribing and reassess all patients regularly for the development of these behaviors and conditions.

Life-Threatening Respiratory Depression

Serious, life-threatening, or fatal respiratory depression may occur with use of OLINVYK, especially during initiation or following a dosage increase. To reduce the risk of respiratory depression, proper dosing and titration of OLINVYK are essential.

Risks From Concomitant Use With Benzodiazepines Or Other CNS Depressants

Concomitant use of opioids with benzodiazepines or other central nervous system (CNS) depressants, including alcohol, may result in profound sedation, respiratory depression, coma, and death. Reserve concomitant prescribing of OLINVYK and benzodiazepines or other CNS depressants for use in patients for whom alternative treatment options are inadequate.

Neonatal Opioid Withdrawal Syndrome

If opioid use is required for an extended period of time in a pregnant woman, advise the patient of the risk of NOWS, which may be life-threatening if not recognized and treated. Ensure that management by neonatology experts will be available at delivery.

INDICATIONS AND USAGE

OLINVYK is an opioid agonist indicated in adults for the management of acute pain severe enough to require an intravenous opioid analgesic and for whom alternative treatments are inadequate.

Limitations of Use

Because of the risks of addiction, abuse, and misuse with opioids, which can occur at any dosage or duration, reserve OLINVYK for use in patients for whom alternative treatment options [e.g., non-opioid analgesics or opioid combination products]:

• Have not been tolerated or are not expected to be tolerated.
• Have not provided adequate analgesia or are not expected to provide adequate analgesia.

The cumulative total daily dose should not exceed 27 mg.

CONTRAINDICATIONS

OLINVYK is contraindicated in patients with:

• Significant respiratory depression
• Acute or severe bronchial asthma in an unmonitored setting or in absence of resuscitative equipment
• Known or suspected gastrointestinal obstruction, including paralytic ileus
• Known hypersensitivity to oliceridine (e.g. anaphylaxis)

WARNINGS AND PRECAUTIONS

• OLINVYK contains oliceridine, a Schedule II controlled substance, that exposes users to the risks of addiction, abuse, and misuse. Although the risk of addiction in any individual is unknown, it can occur in patients appropriately prescribed OLINVYK. Assess risk, counsel, and monitor all patients receiving opioids.
• Serious, life-threatening respiratory depression has been reported with the use of opioids, even when used as recommended, especially in patients with chronic pulmonary disease, or in elderly, cachectic and debilitated patients. The risk is greatest during initiation of OLINVYK therapy, following a dose increase, or when used with other drugs that depress respiration. Proper dosing of OLINVYK is essential, especially when converting patients from another opioid product to avoid overdose. Management of respiratory depression may include close observation, supportive measures, and use of opioid antagonists, depending on the patient’s clinical status.
• Opioids can cause sleep-related breathing disorders including central sleep apnea (CSA) and sleep-related hypoxemia with risk increasing in a dose-dependent fashion. In patients who present with CSA, consider decreasing the dose of opioid using best practices for opioid taper.
• Profound sedation, respiratory depression, coma, and death may result from the concomitant use of OLINVYK with benzodiazepines and/or other CNS depressants (e.g., non-benzodiazepine sedatives/hypnotics, anxiolytics, tranquilizers, muscle relaxants, general anesthetics, antipsychotics, other opioids, or alcohol). Because of these risks, reserve concomitant prescribing of these drugs for use in patients for whom alternative treatment options are inadequate, prescribe the lowest effective dose, and minimize the duration.
• Use of OLINVYK for an extended period of time during pregnancy can result in withdrawal in the neonate that may be life-threatening. Observe newborns for signs of neonatal opioid withdrawal syndrome and manage accordingly. Advise pregnant women using opioids for a prolonged period of the risk of neonatal opioid withdrawal syndrome and ensure that appropriate treatment will be available.
• OLINVYK was shown to have mild QTc interval prolongation in thorough QT studies where patients were dosed up to 27 mg. Total cumulative daily doses exceeding 27 mg per day were not studied and may increase the risk for QTc interval prolongation. Therefore, the cumulative total daily dose of OLINVYK should not exceed 27 mg.
• Increased plasma concentrations of OLINVYK may occur in patients with decreased Cytochrome P450 (CYP) 2D6 function or normal metabolizers taking moderate or strong CYP2D6 inhibitors; also in patients taking a moderate or strong CYP3A4 inhibitor, in patients with decreased CYP2D6 function who are also receiving a moderate or strong CYP3A4 inhibitor, or with discontinuation of a CYP3A4 inducer. These patients may require less frequent dosing and should be closely monitored for respiratory depression and sedation at frequent intervals. Concomitant use of OLINVYK with CYP3A4 inducers or discontinuation of a moderate or strong CYP3A4 inhibitor can lower the expected concentration, which may decrease efficacy, and may require supplemental doses.
• Opioid-Induced Hyperalgesia (OIH) occurs when an opioid analgesic paradoxically causes an increase in pain, or an increase in sensitivity to pain. This differs from tolerance where increasing doses are required to maintain the desired effect. Symptoms of OIH include, but may not be limited to, increased levels of pain upon dose increase, decreased levels of pain upon dose decrease, or pain from ordinarily non-painful stimuli (allodynia). These symptoms may suggest OIH only if there is no evidence of disease progression, opioid tolerance, withdrawal, or addictive behavior. If OIH is suspected, carefully consider appropriately decreasing the dose of the current opioid analgesic or opioid rotation.
• Cases of adrenal insufficiency have been reported with opioid use (usually greater than one month). Presentation and symptoms may be nonspecific and include nausea, vomiting, anorexia, fatigue, weakness, dizziness, and low blood pressure. If confirmed, treat with physiologic replacement doses of corticosteroids and wean patient from the opioid.
• OLINVYK may cause severe hypotension, including orthostatic hypotension and syncope in ambulatory patients. There is increased risk in patients whose ability to maintain blood pressure has already been compromised by a reduced blood volume or concurrent administration of certain CNS depressant drugs (e.g., phenothiazines or general anesthetics). Monitor these patients for signs of hypotension. In patients with circulatory shock, avoid the use of OLINVYK as it may cause vasodilation that can further reduce cardiac output and blood pressure.  
• Avoid the use of OLINVYK in patients with impaired consciousness or coma. OLINVYK should be used with caution in patients who may be susceptible to the intracranial effects of CO₂ retention, such as those with evidence of increased intracranial pressure or brain tumors, as a reduction in respiratory drive and the resultant CO₂ retention can further increase intracranial pressure. Monitor such patients for signs of sedation and respiratory depression, particularly when initiating therapy.
• As with all opioids, OLINVYK may cause spasm of the sphincter of Oddi, and may cause increases in serum amylase. Monitor patients with biliary tract disease, including acute pancreatitis, for worsening symptoms.
• OLINVYK may increase the frequency of seizures in patients with seizure disorders and may increase the risk of seizures in vulnerable patients. Monitor patients with a history of seizure disorders for worsened seizure control.
• Do not abruptly discontinue OLINVYK in a patient physically dependent on opioids. Gradually taper the dosage to avoid a withdrawal syndrome and return of pain. Avoid the use of mixed agonist/antagonist (e.g., pentazocine, nalbuphine, and butorphanol) or partial agonist (e.g., buprenorphine) analgesics in patients who are receiving OLINVYK, as they may reduce the analgesic effect and/or precipitate withdrawal symptoms.
• OLINVYK may impair the mental or physical abilities needed to perform potentially hazardous activities such as driving a car or operating machinery.
• Although self-administration of opioids by patient-controlled analgesia (PCA) may allow each patient to individually titrate to an acceptable level of analgesia, PCA administration has resulted in adverse outcomes and episodes of respiratory depression. Health care providers and family members monitoring patients receiving PCA analgesia should be instructed in the need for appropriate monitoring for excessive sedation, respiratory depression, or other adverse effects of opioid medications.

ADVERSE REACTIONS

Adverse reactions are described in greater detail in the Prescribing Information.

The most common (incidence ≥10%) adverse reactions in Phase 3 controlled clinical trials were nausea, vomiting, dizziness, headache, constipation, pruritus, and hypoxia.

MEDICAL INFORMATION

For medical inquiries or to report an adverse event, other safety-related information or product complaints for a company product, please contact the Trevena Medical Information Contact Center at 1-844-465-4686 or email MedInfo@Trevena.com.

You are encouraged to report suspected adverse events of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.

PLEASE see www.OLINVYK.com for full prescribing information including BOXED warning and important safety information

Forward-Looking Statements

Any statements in this press release about future expectations, plans and prospects for the Company, including statements about the Company’s strategy, future operations, clinical development and trials of its therapeutic candidates, plans for potential future product candidates and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “suggest,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the expectations surrounding the continued advancement of the Company’s product pipeline; the potential safety and efficacy of the Company’s product candidates and their regulatory and clinical development; the Company’s intention to pursue strategic alternatives for OLINVYK and the ability of any such strategic alternative to provide shareholder value; the expected financial and operational impacts of the Company’s decision to reduce commercial support for OLINVYK; the status, timing, costs, results and interpretation of the Company’s clinical trials or any future trials of any of the Company’s investigational drug candidates; the uncertainties inherent in conducting clinical trials; expectations for regulatory interactions, submissions and approvals, including the Company’s assessment of discussions with FDA; available funding; uncertainties related to continued listing on NASDAQ; uncertainties related to the Company’s intellectual property; uncertainties related to other matters that could affect the availability or commercial potential of the Company’s therapeutic candidates and approved product; and other factors discussed in the Risk Factors set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and in other filings the Company makes with the SEC from time to time. In addition, the forward-looking statements included in this press release represent the Company’s views only as of the date hereof. The Company anticipates that subsequent events and developments may cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, except as may be required by law.

For more information, please contact:

Company Contact:

Bob Yoder
SVP, Chief Business Officer & Head of Commercial Operations
Trevena, Inc.
(610) 354-8840