Ryerson Reports Third Quarter 2024 Results
Quarterly business highlights include operating cash flow of $134.6 million, Central Steel & Wire’s University Park, IL distribution hub and service center open house, progress on expansion and modernization of the Shelbyville, KY non-ferrous processing center, closing of the Production Metals acquisition and entry into aerospace, defense, and semiconductor metals markets, and ongoing cost-reduction work across our North America service center network
CHICAGO, Oct. 29, 2024 /PRNewswire/ — Ryerson Holding Corporation RYI, a leading value-added processor and distributor of industrial metals, today reported results for the third quarter ended September 30, 2024.
Highlights:
- Generated $1.13 billion of revenue from 485,000 tons shipped and average selling price of $2,323 per ton
- Incurred Net Loss attributable to Ryerson Holding Corporation of $6.6 million, or Diluted Loss Per Share of $0.20 and Adjusted EBITDA1, excluding LIFO of $21.0 million as counter-cyclical and seasonal bottoming continues
- Generated Operating Cash Flow of $134.6 million and Free Cash Flow of $103.4 million
- Reduced inventory by $80.8 million on a FIFO cost basis2, compared to the second quarter of 2024
- Returned $42.0 million to shareholders during the quarter, comprised of $36.0 million in share repurchases and $6.0 million in dividends
- Ended the quarter with debt of $522 million and net debt3 of $487 million as of September 30, 2024, compared to $525 million and $497 million, respectively, on June 30, 2024
- Progressing well towards $60 million of annualized cost reduction expectations from operating expenses4
- Acquired Production Metals, a value-added processor of aluminum, stainless, and specialty steel
- Hosted open house at Central Steel & Wire’s University Park, IL distribution hub and service center for customers, suppliers, vendors, investors, and employees
- Declared a fourth-quarter 2024 dividend of $0.1875 per share
A reconciliation of non-GAAP financial measures to the comparable GAAP measure is included below in this news release.
|
$ in millions, except tons (in thousands), average selling prices, and earnings per share |
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|
Financial Highlights: |
Q3 2024 |
Q2 2024 |
Q3 2023 |
QoQ |
YoY |
9MO 2024 |
9MO 2023 |
YoY |
||||||||
|
Revenue |
$1,126.6 |
$1,225.5 |
$1,246.7 |
(8.1) % |
(9.6) % |
$3,591.3 |
$3,996.3 |
(10.1) % |
||||||||
|
Tons shipped |
485 |
508 |
478 |
(4.5) % |
1.5 % |
1,490 |
1,493 |
(0.2) % |
||||||||
|
Average selling price/ton |
$2,323 |
$2,412 |
$2,608 |
(3.7) % |
(10.9) % |
$2,410 |
$2,677 |
(10.0) % |
||||||||
|
Gross margin |
17.9 % |
18.2 % |
20.0 % |
-30 bps |
-210 bps |
17.9 % |
19.4 % |
-150 bps |
||||||||
|
Gross margin, excl. LIFO |
16.3 % |
17.4 % |
17.3 % |
-110 bps |
-100 bps |
17.2 % |
18.4 % |
-120 bps |
||||||||
|
Warehousing, delivery, selling, general, and |
$196.9 |
$199.0 |
$193.0 |
(1.1) % |
2.0 % |
$612.7 |
$589.8 |
3.9 % |
||||||||
|
As a percentage of revenue |
17.5 % |
16.2 % |
15.5 % |
130 bps |
200 bps |
17.1 % |
14.8 % |
230 bps |
||||||||
|
Net income (loss) attributable to Ryerson Holding Corporation |
$(6.6) |
$9.9 |
$35.0 |
(166.7) % |
(118.9) % |
$(4.3) |
$119.9 |
(103.6) % |
||||||||
|
Diluted earnings (loss) per share |
$(0.20) |
$0.29 |
$1.00 |
$(0.49) |
$(1.20) |
$(0.13) |
$3.34 |
$(3.47) |
||||||||
|
Adjusted diluted earnings (loss) per share |
$(0.20) |
$0.33 |
$1.00 |
$(0.53) |
$(1.20) |
$(0.05) |
$3.34 |
$(3.39) |
||||||||
|
Adj. EBITDA, excl. LIFO |
$21.0 |
$42.6 |
$45.0 |
(50.7) % |
(53.3) % |
$103.8 |
$205.2 |
(49.4) % |
||||||||
|
Adj. EBITDA, excl. LIFO margin |
1.9 % |
3.5 % |
3.6 % |
-160 bps |
-170 bps |
2.9 % |
5.1 % |
-220 bps |
||||||||
|
Balance Sheet and Cash Flow Highlights: |
||||||||||||||||
|
Total debt |
$522.1 |
$525.4 |
$365.9 |
(0.6) % |
42.7 % |
$522.1 |
$365.9 |
42.7 % |
||||||||
|
Cash and cash equivalents |
$35.0 |
$28.0 |
$37.4 |
25.0 % |
(6.4) % |
$35.0 |
$37.4 |
(6.4) % |
||||||||
|
Net debt |
$487.1 |
$497.4 |
$328.5 |
(2.1) % |
48.3 % |
$487.1 |
$328.5 |
48.3 % |
||||||||
|
Net debt / LTM Adj. EBITDA, excl. LIFO |
3.8x |
3.2x |
1.4x |
0.6x |
2.4x |
3.8x |
1.4x |
2.4x |
||||||||
|
Cash conversion cycle (days) |
79.3 |
77.6 |
78.3 |
1.7 |
1.0 |
76.5 |
77.6 |
(1.1) |
||||||||
|
Net cash provided by operating activities |
$134.6 |
$25.9 |
$79.3 |
$108.7 |
$55.3 |
$112.7 |
$275.0 |
$(162.3) |
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Management Commentary
Eddie Lehner, Ryerson’s President, Chief Executive Officer, and Director, said, “I want to thank all my Ryerson teammates for working safely while striving to create an always improving Ryerson that delivers the industry’s best customer experience safely, enjoyably, and productively. Two things can be true at the same time: 1) the industry is experiencing a cyclical bottoming marked by twenty-four months of moving average demand and price contraction; and 2) Ryerson’s record investments in systems, capital expenditures, and acquisitions over this same period are positioning the company well for the next cyclical upturn. Over the third quarter we managed the business effectively through a contractionary industrial metals and manufacturing environment that produced compressed margins, most notably in carbon steels and across the commodity spectrum with lagging OEM customer contract price resets. Despite these challenges, we experienced improvements in key performance indicators including cash flow, expense and working capital management, and most importantly, we are seeing investment related growth pains and disruptions across our network beginning to subside as we move through the balance of 2024 with budding optimism for 2025. Ryerson has emerged more efficient and better through every previous counter-cycle and, looking forward, our optimization phase will bring together a greatly modernized service center network, enhanced value-added capabilities, across a digitally enabled enterprise to provide Ryerson’s best-ever customer experience while setting the table for realization of our next stage financial targets.”
Third Quarter Results
Ryerson generated net sales of $1.13 billion in the third quarter of 2024, a decrease of 8.1%, compared to the second quarter of 2024, and within our guidance expectations. Revenue performance during the quarter was impacted by seasonal and weather impacted volume declines of 4.5%, in addition to average selling prices decreasing 3.7%.
Gross margin contracted sequentially by 30 basis points to 17.9% in the third quarter of 2024, compared to 18.2% in the second quarter of 2024. Due to further declines in inventory costs, in the third quarter of 2024, LIFO income of $18 million was greater than our guidance expectations of LIFO income of $12 million. Excluding the impact of LIFO, gross margin contracted 110 basis points to 16.3% in the third quarter of 2024, compared to 17.4% in the second quarter. Gross margins continued to be under pressure in the quarter as demand conditions saw continuing contraction and selling price declines continued to outpace the decline in our average inventory costs.
Warehousing, delivery, selling, general and administrative expenses decreased 1.1%, or $2.1 million, to $196.9 million in the third quarter of 2024, compared to $199.0 million in the second quarter of 2024. Cost reductions were noted in personnel-related expenses, operating expenses, and general administrative expenses. Decreases in expenses were partially offset by increases in start-up, pre-operating, and reorganization expenses associated with Ryerson investments in capital expenditures and acquisitions.
Net Loss Attributable to Ryerson Holding Corporation for the third quarter of 2024 was $6.6 million, or $0.20 per diluted share, compared to net income of $9.9 million, or $0.29 per diluted share in the previous quarter. Ryerson generated Adjusted EBITDA, excluding LIFO, of $21.0 million in the third quarter of 2024, compared to the second quarter of 2024 Adjusted EBITDA, excluding LIFO of $42.6 million.
Liquidity & Debt Management
Ryerson generated $134.6 million of operating cash flow in the third quarter of 2024 due to a working capital release of $129 million. The Company ended the third quarter of 2024 with $522 million of debt and $487 million of net debt, sequential decreases of $3 million and $10 million, respectively, compared to the second quarter of 2024. Ryerson’s net leverage ratio as of the third quarter of 2024 was 3.8x above the Company’s target leverage range of 0.5x – 2.0x, but still well below Ryerson’s prior 10-year average. Ryerson’s global liquidity, composed of cash and cash equivalents and availability on its revolving credit facilities, decreased to $491 million as of September 30, 2024, compared to $585 million as of June 30, 2024.
Shareholder Return Activity
Dividends. On October 29, 2024, the Board of Directors declared a quarterly cash dividend of $0.1875 per share of common stock, payable on December 19, 2024, to stockholders of record as of December 5, 2024, unchanged from the prior quarter. During the third quarter of 2024, Ryerson’s quarterly dividend amounted to a cash return of approximately $6.0 million.
Share Repurchases and Authorization. Ryerson repurchased 1,849,017 shares for $36.0 million in the open market during the third quarter of 2024. Ryerson made these repurchases in accordance with its share repurchase authorization. As of September 30, 2024, $38.4 million remained under the existing authorization.
Outlook Commentary
For the fourth quarter of 2024, Ryerson expects customer shipments to seasonally and counter-cyclically decrease 8% to 10%, quarter-over-quarter. The Company anticipates fourth-quarter net sales to be in the range of $1.00 billion to $1.04 billion, with average selling prices between decreasing 1% to increasing 1%. LIFO income in the fourth quarter of 2024 is expected to be $10 million. We expect adjusted EBITDA, excluding LIFO in the range of $10 million to $12 million and loss per diluted share in the range of $0.53 to $0.47.
Sales by Product Metrics
As we continue to integrate our acquisitions of the past eight quarters into our systems and processes, we have refined our methodology for allocating their net sales and tons to our major product categories. As such, in addition to the third quarter and the first nine months of 2024 product metrics provided here under the refined methodology, we are providing updated sales by product information from the first quarter of 2023 to the second quarter of 2024 to provide comparable numbers. We note that consolidated net sales, tons shipped, and average selling price per ton as previously reported are unchanged and that the updates below are only at the product level.
|
Third Quarter 2024 Major Product Metrics |
||||||||||||
|
Net Sales (millions) |
||||||||||||
|
Q3 2024 |
Q2 2024 |
Q3 2023 |
Quarter-over- quarter |
Year-over-year |
||||||||
|
Carbon Steel |
$ |
585 |
$ |
644 |
$ |
642 |
(9.2) % |
(8.9) % |
||||
|
Aluminum |
$ |
250 |
$ |
277 |
$ |
276 |
(9.7) % |
(9.4) % |
||||
|
Stainless Steel |
$ |
276 |
$ |
286 |
$ |
308 |
(3.5) % |
(10.4) % |
||||
|
Tons Shipped (thousands) |
||||||||||||
|
Q3 2024 |
Q2 2024 |
Q3 2023 |
Quarter-over- quarter |
Year-over-year |
||||||||
|
Carbon Steel |
382 |
397 |
371 |
(3.8) % |
3.0 % |
|||||||
|
Aluminum |
44 |
49 |
48 |
(10.2) % |
(8.3) % |
|||||||
|
Stainless Steel |
58 |
59 |
57 |
(1.7) % |
1.8 % |
|||||||
|
Average Selling Prices (per ton) |
||||||||||||
|
Q3 2024 |
Q2 2024 |
Q3 2023 |
Quarter-over- quarter |
Year-over-year |
||||||||
|
Carbon Steel |
$ |
1,531 |
$ |
1,622 |
$ |
1,730 |
(5.6) % |
(11.5) % |
||||
|
Aluminum |
$ |
5,682 |
$ |
5,653 |
$ |
5,750 |
0.5 % |
(1.2) % |
||||
|
Stainless Steel |
$ |
4,759 |
$ |
4,847 |
$ |
5,404 |
(1.8) % |
(11.9) % |
||||
|
First Nine Months 2024 Major Product Metrics |
||||||||||
|
Net Sales (millions) |
||||||||||
|
2024 |
2023 |
Year-over-year |
||||||||
|
Carbon Steel |
$ |
1,873 |
$ |
2,007 |
(6.7) % |
|||||
|
Aluminum |
$ |
806 |
$ |
889 |
(9.3) % |
|||||
|
Stainless Steel |
$ |
859 |
$ |
1,031 |
(16.7) % |
|||||
|
Tons Shipped (thousands) |
||||||||||
|
2024 |
2023 |
Year-over-year |
||||||||
|
Carbon Steel |
1,163 |
1,156 |
0.6 % |
|||||||
|
Aluminum |
143 |
151 |
(5.3) % |
|||||||
|
Stainless Steel |
178 |
179 |
(0.6) % |
|||||||
|
Average Selling Prices (per ton) |
||||||||||
|
2024 |
2023 |
Year-over-year |
||||||||
|
Carbon Steel |
$ |
1,610 |
$ |
1,736 |
(7.2) % |
|||||
|
Aluminum |
$ |
5,636 |
$ |
5,887 |
(4.3) % |
|||||
|
Stainless Steel |
$ |
4,826 |
$ |
5,760 |
(16.2) % |
|||||
|
Restated Major Product Metrics |
|||||||||||||||||||||
|
Net Sales (millions) |
|||||||||||||||||||||
|
Q1 2023 |
Q2 2023 |
1H 2023 |
Q3 2023 |
9MO 2023 |
Q4 2023 |
2023 |
Q1 2024 |
Q2 2024 |
1H 2024 |
||||||||||||
|
Carbon Steel |
$ |
687 |
$ |
678 |
$ |
1,365 |
$ |
642 |
$ |
2,007 |
$ |
574 |
$ |
2,581 |
$ |
644 |
$ |
644 |
$ |
1,288 |
|
|
Aluminum |
$ |
313 |
$ |
300 |
$ |
613 |
$ |
276 |
$ |
889 |
$ |
244 |
$ |
1,133 |
$ |
279 |
$ |
277 |
$ |
556 |
|
|
Stainless Steel |
$ |
381 |
$ |
342 |
$ |
723 |
$ |
308 |
$ |
1,031 |
$ |
275 |
$ |
1,306 |
$ |
297 |
$ |
286 |
$ |
583 |
|
|
Tons Shipped (thousands) |
|||||||||||||||||||||
|
Q1 2023 |
Q2 2023 |
1H 2023 |
Q3 2023 |
9MO 2023 |
Q4 2023 |
2023 |
Q1 2024 |
Q2 2024 |
1H 2024 |
||||||||||||
|
Carbon Steel |
401 |
384 |
785 |
371 |
1,156 |
352 |
1,508 |
384 |
397 |
781 |
|||||||||||
|
Aluminum |
52 |
51 |
103 |
48 |
151 |
43 |
194 |
50 |
49 |
99 |
|||||||||||
|
Stainless Steel |
64 |
58 |
122 |
57 |
179 |
52 |
231 |
61 |
59 |
120 |
|||||||||||
|
Average Selling Prices (per ton) |
|||||||||||||||||||||
|
Q1 2023 |
Q2 2023 |
1H 2023 |
Q3 2023 |
9MO 2023 |
Q4 2023 |
2023 |
Q1 2024 |
Q2 2024 |
1H 2024 |
||||||||||||
|
Carbon Steel |
$ |
1,713 |
$ |
1,766 |
$ |
1,739 |
$ |
1,730 |
$ |
1,736 |
$ |
1,631 |
$ |
1,712 |
$ |
1,677 |
$ |
1,622 |
$ |
1,649 |
|
|
Aluminum |
$ |
6,019 |
$ |
5,882 |
$ |
5,951 |
$ |
5,750 |
$ |
5,887 |
$ |
5,674 |
$ |
5,840 |
$ |
5,580 |
$ |
5,653 |
$ |
5,616 |
|
|
Stainless Steel |
$ |
5,953 |
$ |
5,897 |
$ |
5,926 |
$ |
5,404 |
$ |
5,760 |
$ |
5,288 |
$ |
5,654 |
$ |
4,869 |
$ |
4,847 |
$ |
4,858 |
|
Earnings Call Information
Ryerson will host a conference call to discuss third quarter 2024 financial results for the period ended September 30, 2024, on Wednesday, October 30, 2024, at 10 a.m. Eastern Time. The live online broadcast will be available on the Company’s investor relations website, ir.ryerson.com. A replay will be available at the same website for 90 days.
About Ryerson
Ryerson is a leading value-added processor and distributor of industrial metals, with operations in the United States, Canada, Mexico, and China. Founded in 1842, Ryerson has around 4,300 employees and over 110 locations. Visit Ryerson at www.ryerson.com.
Notes:
1For EBITDA, Adjusted EBITDA and Adjusted EBITDA excluding LIFO please see Schedule 2
2FIFO cost basis is inventory cost excluding LIFO
3Net debt is defined as long term debt plus short term debt less cash and cash equivalents and excludes restricted cash
4Operating expenses are Warehousing, delivery, selling, general, and administrative expenses
Legal Disclaimer
The contents herein are provided for general information purposes only and do not constitute an offer to sell or buy, or a solicitation of an offer to buy, any security (“Security”) of the Company or its affiliates (“Ryerson”) in any jurisdiction. Ryerson does not intend to solicit, and is not soliciting, any action with respect to any Security or any other contractual relationship with Ryerson. Nothing in this release, individually or taken in the aggregate, constitutes an offer of securities for sale or buy, or a solicitation of an offer to buy, any Security in the United States, or to U.S. persons, or in any other jurisdiction in which such an offer or solicitation is unlawful.
Safe Harbor Provision
Certain statements made in this release and other written or oral statements made by or on behalf of the Company constitute “forward-looking statements” within the meaning of the federal securities laws, including statements regarding our future performance, as well as management’s expectations, beliefs, intentions, plans, estimates, objectives, or projections relating to the future. Such statements can be identified by the use of forward-looking terminology such as “objectives,” “goals,” “preliminary,” “range,” “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans,” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business are: the cyclicality of our business; the highly competitive, volatile, and fragmented metals industry in which we operate; the impact of geopolitical events; fluctuating metal prices; our indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; the influence of a single investor group over our policies and procedures; work stoppages; obligations under certain employee retirement benefit plans; currency fluctuations; and consolidation in the metals industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and those set forth under “Risk Factors” in our most recent our annual report on Form 10-K and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise.
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
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|
Selected Income and Cash Flow Data – Unaudited |
||||||||||||||||||||
|
(Dollars and Shares in Millions, except Per Share and Per Ton Data) |
||||||||||||||||||||
|
2024 |
2023 |
First Nine Months Ended |
||||||||||||||||||
|
Third |
Second |
Third |
September 30, |
|||||||||||||||||
|
Quarter |
Quarter |
Quarter |
2024 |
2023 |
||||||||||||||||
|
NET SALES |
$ |
1,126.6 |
$ |
1,225.5 |
$ |
1,246.7 |
$ |
3,591.3 |
$ |
3,996.3 |
||||||||||
|
Cost of materials sold |
924.6 |
1,002.0 |
997.4 |
2,948.2 |
3,221.9 |
|||||||||||||||
|
Gross profit |
202.0 |
223.5 |
249.3 |
643.1 |
774.4 |
|||||||||||||||
|
Warehousing, delivery, selling, general, and administrative |
196.9 |
199.0 |
193.0 |
612.7 |
589.8 |
|||||||||||||||
|
Gain on insurance settlement |
(1.3) |
— |
— |
(1.3) |
— |
|||||||||||||||
|
Restructuring and other charges |
1.1 |
1.7 |
— |
2.8 |
— |
|||||||||||||||
|
OPERATING PROFIT |
5.3 |
22.8 |
56.3 |
28.9 |
184.6 |
|||||||||||||||
|
Other income and (expense), net |
(0.2) |
1.8 |
1.2 |
1.4 |
0.8 |
|||||||||||||||
|
Interest and other expense on debt |
(11.5) |
(11.3) |
(9.3) |
(32.9) |
(25.2) |
|||||||||||||||
|
INCOME (LOSS) BEFORE INCOME TAXES |
(6.4) |
13.3 |
48.2 |
(2.6) |
160.2 |
|||||||||||||||
|
Provision (benefit) for income taxes |
(0.4) |
3.0 |
12.9 |
0.5 |
39.8 |
|||||||||||||||
|
NET INCOME (LOSS) |
(6.0) |
10.3 |
35.3 |
(3.1) |
120.4 |
|||||||||||||||
|
Less: Net income attributable to noncontrolling interest |
0.6 |
0.4 |
0.3 |
1.2 |
0.5 |
|||||||||||||||
|
NET INCOME (LOSS) ATTRIBUTABLE TO RYERSON HOLDING CORPORATION |
$ |
(6.6) |
$ |
9.9 |
$ |
35.0 |
$ |
(4.3) |
$ |
119.9 |
||||||||||
|
EARNINGS (LOSS) PER SHARE |
||||||||||||||||||||
|
Basic |
$ |
(0.20) |
$ |
0.29 |
$ |
1.02 |
$ |
(0.13) |
$ |
3.40 |
||||||||||
|
Diluted |
$ |
(0.20) |
$ |
0.29 |
$ |
1.00 |
$ |
(0.13) |
$ |
3.34 |
||||||||||
|
Shares outstanding – basic |
32.7 |
34.2 |
34.3 |
33.6 |
35.2 |
|||||||||||||||
|
Shares outstanding – diluted |
32.7 |
34.4 |
34.9 |
33.6 |
35.9 |
|||||||||||||||
|
Dividends declared per share |
$ |
0.1875 |
$ |
0.1875 |
$ |
0.1825 |
$ |
0.5625 |
$ |
0.5325 |
||||||||||
|
Supplemental Data : |
||||||||||||||||||||
|
Tons shipped (000) |
485 |
508 |
478 |
1,490 |
1,493 |
|||||||||||||||
|
Shipping days |
64 |
64 |
63 |
192 |
191 |
|||||||||||||||
|
Average selling price/ton |
$ |
2,323 |
$ |
2,412 |
$ |
2,608 |
$ |
2,410 |
$ |
2,677 |
||||||||||
|
Gross profit/ton |
416 |
440 |
522 |
432 |
519 |
|||||||||||||||
|
Operating profit/ton |
11 |
45 |
118 |
19 |
124 |
|||||||||||||||
|
LIFO income per ton |
(37) |
(20) |
(70) |
(18) |
(26) |
|||||||||||||||
|
LIFO income |
(18.1) |
(10.0) |
(33.4) |
(27.1) |
(38.4) |
|||||||||||||||
|
Depreciation and amortization expense |
19.5 |
18.0 |
13.6 |
54.9 |
42.4 |
|||||||||||||||
|
Cash flow provided by operating activities |
134.6 |
25.9 |
79.3 |
112.7 |
275.0 |
|||||||||||||||
|
Capital expenditures |
(31.6) |
(22.7) |
(22.4) |
(76.1) |
(96.5) |
|||||||||||||||
|
See Schedule 1 for Condensed Consolidated Balance Sheets |
||||||||||||||||||||
|
See Schedule 2 for EBITDA and Adjusted EBITDA reconciliation |
||||||||||||||||||||
|
See Schedule 3 for Adjusted EPS reconciliation |
||||||||||||||||||||
|
See Schedule 4 for Free Cash Flow reconciliation |
||||||||||||||||||||
|
See Schedule 5 for Fourth Quarter 2024 Guidance reconciliation |
||||||||||||||||||||
|
Schedule 1 |
||||
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
||||
|
Condensed Consolidated Balance Sheets |
||||
|
(In millions, except shares) |
||||
|
September 30, |
December 31, |
|||
|
2024 |
2023 |
|||
|
Assets |
(unaudited) |
|||
|
Current assets: |
||||
|
Cash and cash equivalents |
$35.0 |
$54.3 |
||
|
Restricted cash |
1.8 |
1.1 |
||
|
Receivables, less provisions of $3.0 at September 30, 2024 and $1.7 at December 31, 2023 |
499.7 |
467.7 |
||
|
Inventories |
681.4 |
782.5 |
||
|
Prepaid expenses and other current assets |
83.5 |
77.8 |
||
|
Total current assets |
1,301.4 |
1,383.4 |
||
|
Property, plant, and equipment, at cost |
1,134.8 |
1,071.5 |
||
|
Less: accumulated depreciation |
499.7 |
481.9 |
||
|
Property, plant, and equipment, net |
635.1 |
589.6 |
||
|
Operating lease assets |
348.4 |
349.4 |
||
|
Other intangible assets |
71.0 |
73.7 |
||
|
Goodwill |
160.2 |
157.8 |
||
|
Deferred charges and other assets |
17.2 |
15.7 |
||
|
Total assets |
$2,533.3 |
$2,569.6 |
||
|
Liabilities |
||||
|
Current liabilities: |
||||
|
Accounts payable |
$443.9 |
$463.4 |
||
|
Salaries, wages, and commissions |
35.7 |
51.9 |
||
|
Other accrued liabilities |
68.0 |
75.9 |
||
|
Short-term debt |
1.8 |
8.2 |
||
|
Current portion of operating lease liabilities |
31.7 |
30.5 |
||
|
Current portion of deferred employee benefits |
4.0 |
4.0 |
||
|
Total current liabilities |
585.1 |
633.9 |
||
|
Long-term debt |
520.3 |
428.3 |
||
|
Deferred employee benefits |
97.4 |
106.7 |
||
|
Noncurrent operating lease liabilities |
338.0 |
336.8 |
||
|
Deferred income taxes |
135.8 |
135.5 |
||
|
Other noncurrent liabilities |
14.7 |
13.9 |
||
|
Total liabilities |
1,691.3 |
1,655.1 |
||
|
Commitments and contingencies |
||||
|
Equity |
||||
|
Ryerson Holding Corporation stockholders’ equity: |
||||
|
Preferred stock, $0.01 par value; 7,000,000 shares authorized and no shares issued at September 30, 2024 and December 31, 2023 |
— |
— |
||
|
Common stock, $0.01 par value; 100,000,000 shares authorized; 39,896,148 and 39,450,659 shares issued at September 30, 2024 and December 31, 2023, respectively |
0.4 |
0.4 |
||
|
Capital in excess of par value |
422.7 |
411.6 |
||
|
Retained earnings |
789.9 |
813.2 |
||
|
Treasury stock, at cost – Common stock of 8,051,226 shares at September 30, 2024 and 5,413,434 shares at December 31, 2023 |
(234.4) |
(179.3) |
||
|
Accumulated other comprehensive loss |
(145.7) |
(140.0) |
||
|
Total Ryerson Holding Corporation Stockholders’ Equity |
832.9 |
905.9 |
||
|
Noncontrolling interest |
9.1 |
8.6 |
||
|
Total Equity |
842.0 |
914.5 |
||
|
Total Liabilities and Stockholders’ Equity |
$2,533.3 |
$2,569.6 |
||
|
Schedule 2 |
||||||||||||||||||||
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||||
|
Reconciliations of Net Income (Loss) Attributable to Ryerson Holding Corporation to EBITDA and Gross profit to Gross profit excluding LIFO |
||||||||||||||||||||
|
(Dollars in millions) |
||||||||||||||||||||
|
2024 |
2023 |
First Nine Months Ended |
||||||||||||||||||
|
Third |
Second |
Third |
September 30, |
|||||||||||||||||
|
Quarter |
Quarter |
Quarter |
2024 |
2023 |
||||||||||||||||
|
Net income (loss) attributable to Ryerson Holding Corporation |
$ |
(6.6) |
$ |
9.9 |
$ |
35.0 |
$ |
(4.3) |
$ |
119.9 |
||||||||||
|
Interest and other expense on debt |
11.5 |
11.3 |
9.3 |
32.9 |
25.2 |
|||||||||||||||
|
Provision (benefit) for income taxes |
(0.4) |
3.0 |
12.9 |
0.5 |
39.8 |
|||||||||||||||
|
Depreciation and amortization expense |
19.5 |
18.0 |
13.6 |
54.9 |
42.4 |
|||||||||||||||
|
EBITDA |
$ |
24.0 |
$ |
42.2 |
$ |
70.8 |
$ |
84.0 |
$ |
227.3 |
||||||||||
|
Gain on insurance settlement |
(1.3) |
— |
— |
(1.3) |
— |
|||||||||||||||
|
Reorganization |
15.8 |
12.7 |
8.0 |
48.6 |
14.7 |
|||||||||||||||
|
Pension settlement loss |
— |
— |
— |
2.2 |
— |
|||||||||||||||
|
Benefit plan curtailment gain |
— |
— |
— |
(0.3) |
— |
|||||||||||||||
|
Foreign currency transaction (gains) losses |
0.6 |
(0.4) |
(0.8) |
(1.0) |
0.4 |
|||||||||||||||
|
Purchase consideration and other transaction costs (credits) |
(0.4) |
(1.1) |
0.3 |
(1.4) |
1.0 |
|||||||||||||||
|
Other adjustments |
0.4 |
(0.8) |
0.1 |
0.1 |
0.2 |
|||||||||||||||
|
Adjusted EBITDA |
$ |
39.1 |
$ |
52.6 |
$ |
78.4 |
$ |
130.9 |
$ |
243.6 |
||||||||||
|
Adjusted EBITDA |
$ |
39.1 |
$ |
52.6 |
$ |
78.4 |
$ |
130.9 |
$ |
243.6 |
||||||||||
|
LIFO income |
(18.1) |
(10.0) |
(33.4) |
(27.1) |
(38.4) |
|||||||||||||||
|
Adjusted EBITDA, excluding LIFO income |
$ |
21.0 |
$ |
42.6 |
$ |
45.0 |
$ |
103.8 |
$ |
205.2 |
||||||||||
|
Net sales |
$ |
1,126.6 |
$ |
1,225.5 |
$ |
1,246.7 |
$ |
3,591.3 |
$ |
3,996.3 |
||||||||||
|
Adjusted EBITDA, excluding LIFO income, as a percentage of net sales |
1.9 |
% |
3.5 |
% |
3.6 |
% |
2.9 |
% |
5.1 |
% |
||||||||||
|
Gross profit |
$ |
202.0 |
$ |
223.5 |
$ |
249.3 |
$ |
643.1 |
$ |
774.4 |
||||||||||
|
Gross margin |
17.9 |
% |
18.2 |
% |
20.0 |
% |
17.9 |
% |
19.4 |
% |
||||||||||
|
Gross profit |
$ |
202.0 |
$ |
223.5 |
$ |
249.3 |
$ |
643.1 |
$ |
774.4 |
||||||||||
|
LIFO income |
(18.1) |
(10.0) |
(33.4) |
(27.1) |
(38.4) |
|||||||||||||||
|
Gross profit, excluding LIFO income |
$ |
183.9 |
$ |
213.5 |
$ |
215.9 |
$ |
616.0 |
$ |
736.0 |
||||||||||
|
Gross margin, excluding LIFO income |
16.3 |
% |
17.4 |
% |
17.3 |
% |
17.2 |
% |
18.4 |
% |
||||||||||
|
Note: EBITDA represents net income (loss) before interest and other expense on debt, provision (benefit) for income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, reorganization expenses, gain on insurance settlement, pension settlement loss, benefit plan curtailment gain, and foreign currency transaction gains and losses. We believe that the presentation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), provides useful information to investors regarding our operational performance because they enhance an investor’s overall understanding of our core financial performance and provide a basis of comparison of results between current, past, and future periods. We also disclose the metric Adjusted EBITDA, excluding LIFO expense (income), to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), are three of the primary metrics management uses for planning and forecasting in future periods, including trending and analyzing the core operating performance of our business without the effect of U.S. generally accepted accounting principles, or GAAP, expenses, revenues, and gains (losses) that are unrelated to the day to day performance of our business. We also establish compensation programs for our executive management and regional employees that are based upon the achievement of pre-established EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), targets. We also use EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), to benchmark our operating performance to that of our competitors. EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), do not represent, and should not be used as a substitute for, net income or cash flows from operations as determined in accordance with generally accepted accounting principles, and neither EBITDA, Adjusted EBITDA, and Adjusted EBITDA, excluding LIFO expense (income), is necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. This release also presents gross margin, excluding LIFO expense (income), which is calculated as gross profit minus LIFO expense (income), divided by net sales. We have excluded LIFO expense from gross margin and Adjusted EBITDA as a percentage of net sales metrics in order to provide a means of comparison amongst our competitors who may not use the same basis of accounting for inventories as we do. Our definitions of EBITDA, Adjusted EBITDA, Adjusted EBITDA, excluding LIFO expense (income), gross margin, excluding LIFO expense (income), and Adjusted EBITDA, excluding LIFO expense (income), as a percentage of sales may differ from that of other companies. |
||||||||||||||||||||
|
Schedule 3 |
||||||||||||||||||||
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per Share |
||||||||||||||||||||
|
(Dollars and Shares in Millions, Except Per Share Data) |
||||||||||||||||||||
|
2024 |
2023 |
First Nine Months Ended |
||||||||||||||||||
|
Third |
Second |
Third |
September 30, |
|||||||||||||||||
|
Quarter |
Quarter |
Quarter |
2024 |
2023 |
||||||||||||||||
|
Net income (loss) attributable to Ryerson Holding Corporation |
$ |
(6.6) |
$ |
9.9 |
$ |
35.0 |
$ |
(4.3) |
$ |
119.9 |
||||||||||
|
Gain on insurance settlement |
(1.3) |
— |
— |
(1.3) |
— |
|||||||||||||||
|
Restructuring and other charges |
1.1 |
1.7 |
— |
2.8 |
— |
|||||||||||||||
|
Pension settlement loss |
— |
— |
— |
2.2 |
— |
|||||||||||||||
|
Benefit plan curtailment gain |
— |
— |
— |
(0.3) |
— |
|||||||||||||||
|
Provision (benefit) for income taxes |
0.1 |
(0.4) |
— |
(0.8) |
— |
|||||||||||||||
|
Adjusted net income (loss) attributable to Ryerson Holding Corporation |
$ |
(6.7) |
$ |
11.2 |
$ |
35.0 |
$ |
(1.7) |
$ |
119.9 |
||||||||||
|
Adjusted diluted earnings (loss) per share |
$ |
(0.20) |
$ |
0.33 |
$ |
1.00 |
$ |
(0.05) |
$ |
3.34 |
||||||||||
|
Shares outstanding – diluted |
32.7 |
34.4 |
34.9 |
33.6 |
35.9 |
|||||||||||||||
|
Note: Adjusted net income (loss) and Adjusted earnings (loss) per share is presented to provide a means of comparison with periods that do not include similar adjustments. |
||||||||||||||||||||
|
Schedule 4 |
||||||||||||||||||||
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
||||||||||||||||||||
|
Cash Flow from Operations to Free Cash Flow Yield |
||||||||||||||||||||
|
(Dollars in Millions) |
||||||||||||||||||||
|
2024 |
2023 |
First Nine Months Ended |
||||||||||||||||||
|
Third |
Second |
Third |
September 30, |
|||||||||||||||||
|
Quarter |
Quarter |
Quarter |
2024 |
2023 |
||||||||||||||||
|
Net cash provided by operating activities |
$ |
134.6 |
$ |
25.9 |
$ |
79.3 |
$ |
112.7 |
$ |
275.0 |
||||||||||
|
Capital expenditures |
(31.6) |
(22.7) |
(22.4) |
(76.1) |
(96.5) |
|||||||||||||||
|
Proceeds from sales of property, plant, and equipment |
0.4 |
0.1 |
— |
1.9 |
0.1 |
|||||||||||||||
|
Free cash flow |
$ |
103.4 |
$ |
3.3 |
$ |
56.9 |
$ |
38.5 |
$ |
178.6 |
||||||||||
|
Market capitalization |
$ |
634.0 |
$ |
657.0 |
$ |
996.5 |
$ |
634.0 |
$ |
996.5 |
||||||||||
|
Free cash flow yield |
16.3 |
% |
0.5 |
% |
5.7 |
% |
6.1 |
% |
17.9 |
% |
||||||||||
|
Note: Market capitalization is calculated using September 30, 2024, June 30, 2024, and September 30, 2023 stock prices and shares outstanding. |
||||||||||||||||||||
|
Schedule 5 |
||||
|
RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES |
||||
|
Reconciliation of Fourth Quarter 2024 Net Income Attributable to Ryerson Holding Corporation to Adj. EBITDA, excl. LIFO Guidance |
||||
|
(Dollars in Millions, except Per Share Data) |
||||
|
Fourth Quarter 2024 |
||||
|
Low |
High |
|||
|
Net loss attributable to Ryerson Holding Corporation |
$(17) |
$(16) |
||
|
Diluted loss per share |
$(0.53) |
$(0.47) |
||
|
Interest and other expense on debt |
10 |
10 |
||
|
Benefit for income taxes |
(6) |
(5) |
||
|
Depreciation and amortization expense |
19 |
19 |
||
|
EBITDA |
$6 |
$8 |
||
|
Adjustments |
14 |
14 |
||
|
Adjusted EBITDA |
$20 |
$22 |
||
|
LIFO income |
(10) |
(10) |
||
|
Adjusted EBITDA, excluding LIFO |
$10 |
$12 |
||
|
Note: See the note within Schedule 2 for a description of EBITDA and Adjusted EBITDA. |
||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/ryerson-reports-third-quarter-2024-results-302290713.html
SOURCE Ryerson Holding Corporation
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Chevron's Options Frenzy: What You Need to Know
Financial giants have made a conspicuous bearish move on Chevron. Our analysis of options history for Chevron CVX revealed 12 unusual trades.
Delving into the details, we found 25% of traders were bullish, while 66% showed bearish tendencies. Out of all the trades we spotted, 8 were puts, with a value of $839,579, and 4 were calls, valued at $462,055.
Predicted Price Range
Based on the trading activity, it appears that the significant investors are aiming for a price territory stretching from $130.0 to $152.5 for Chevron over the recent three months.
Volume & Open Interest Development
Examining the volume and open interest provides crucial insights into stock research. This information is key in gauging liquidity and interest levels for Chevron’s options at certain strike prices. Below, we present a snapshot of the trends in volume and open interest for calls and puts across Chevron’s significant trades, within a strike price range of $130.0 to $152.5, over the past month.
Chevron 30-Day Option Volume & Interest Snapshot
Noteworthy Options Activity:
| Symbol | PUT/CALL | Trade Type | Sentiment | Exp. Date | Ask | Bid | Price | Strike Price | Total Trade Price | Open Interest | Volume |
|---|---|---|---|---|---|---|---|---|---|---|---|
| CVX | PUT | SWEEP | BULLISH | 11/15/24 | $1.03 | $0.98 | $1.0 | $140.00 | $420.6K | 5.3K | 4.9K |
| CVX | CALL | TRADE | BEARISH | 11/08/24 | $9.25 | $9.05 | $9.12 | $140.00 | $319.1K | 3 | 350 |
| CVX | PUT | SWEEP | BEARISH | 11/22/24 | $3.75 | $3.75 | $3.75 | $148.00 | $95.2K | 51 | 2 |
| CVX | CALL | TRADE | NEUTRAL | 11/15/24 | $18.65 | $18.35 | $18.51 | $130.00 | $92.5K | 89 | 65 |
| CVX | PUT | SWEEP | BEARISH | 11/15/24 | $4.85 | $4.75 | $4.85 | $152.50 | $91.1K | 626 | 229 |
About Chevron
Chevron is an integrated energy company with exploration, production, and refining operations worldwide. It is the second-largest oil company in the United States with production of 3.1 million of barrels of oil equivalent a day, including 7.7 million cubic feet a day of natural gas and 1.8 million of barrels of liquids a day. Production activities take place in North America, South America, Europe, Africa, Asia, and Australia. Its refineries are in the US and Asia for total refining capacity of 1.8 million barrels of oil a day. Proven reserves at year-end 2023 stood at 11.1 billion barrels of oil equivalent, including 6.0 billion barrels of liquids and 30.4 trillion cubic feet of natural gas.
After a thorough review of the options trading surrounding Chevron, we move to examine the company in more detail. This includes an assessment of its current market status and performance.
Where Is Chevron Standing Right Now?
- Currently trading with a volume of 4,059,401, the CVX’s price is down by -1.37%, now at $148.48.
- RSI readings suggest the stock is currently is currently neutral between overbought and oversold.
- Anticipated earnings release is in 3 days.
What The Experts Say On Chevron
5 market experts have recently issued ratings for this stock, with a consensus target price of $168.6.
Unusual Options Activity Detected: Smart Money on the Move
Benzinga Edge’s Unusual Options board spots potential market movers before they happen. See what positions big money is taking on your favorite stocks. Click here for access.
* Consistent in their evaluation, an analyst from UBS keeps a Buy rating on Chevron with a target price of $192.
* An analyst from RBC Capital downgraded its action to Outperform with a price target of $170.
* An analyst from Scotiabank has decided to maintain their Sector Outperform rating on Chevron, which currently sits at a price target of $163.
* Consistent in their evaluation, an analyst from Truist Securities keeps a Hold rating on Chevron with a target price of $150.
* An analyst from B of A Securities downgraded its action to Buy with a price target of $168.
Options trading presents higher risks and potential rewards. Astute traders manage these risks by continually educating themselves, adapting their strategies, monitoring multiple indicators, and keeping a close eye on market movements. Stay informed about the latest Chevron options trades with real-time alerts from Benzinga Pro.
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
First Solar Stock Sinks After Worse-Than-Expected Q3 Results, Cut FY24 Guidance
First Solar, Inc. FSLR reported its third-quarter results after Tuesday’s closing bell. Here’s a look at the key figures from the quarter.
The Details: First Solar reported quarterly earnings of $2.91 per share, which missed the analyst consensus estimate of $3.13. The company said its earnings were impacted by a $50 million product warranty reserve charge during the quarter.
Quarterly revenue came in at $887.67 million, which missed the analyst consensus estimate of $1.07 billion. First Solar reported year-to-date net bookings of 4.0 GW with 0.4 GW since the company’s second-quarter earnings call. The company said it has an expected sales backlog of 73.3 GW.
“As we approach the end of 2024, we remain pleased with the progress made across our business, navigating against a backdrop of industry volatility and political uncertainty, with a continued focus on balancing growth, profitability and liquidity,” said Mark Widmar, CEO of First Solar.
“We expect that our disciplined, long-term approach will allow us to work through the outcomes of the upcoming U.S. elections as well as the continued volatility across the solar manufacturing industry,” Widmar added.
Outlook: First Solar revised its fiscal 2024 net sales forecast from a range of $4.4 billion to $4.6 billion to a new range of $4.1 billion to $4.25 billion, versus the $4.44 billion estimate. The company also revised its full-year earnings forecast from between $13 and $14 per share to between $13 and $13.50 per share, versus the $13.49 estimate.
FSLR Price Action: According to Benzinga Pro, First Solar shares are down 4.84% after-hours at $190.38 at the time of publication Tuesday.
Read Also:
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
United Airlines Holdings's Options Frenzy: What You Need to Know
Deep-pocketed investors have adopted a bullish approach towards United Airlines Holdings UAL, and it’s something market players shouldn’t ignore. Our tracking of public options records at Benzinga unveiled this significant move today. The identity of these investors remains unknown, but such a substantial move in UAL usually suggests something big is about to happen.
We gleaned this information from our observations today when Benzinga’s options scanner highlighted 28 extraordinary options activities for United Airlines Holdings. This level of activity is out of the ordinary.
The general mood among these heavyweight investors is divided, with 60% leaning bullish and 39% bearish. Among these notable options, 17 are puts, totaling $2,995,539, and 11 are calls, amounting to $1,077,053.
Predicted Price Range
Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $50.0 to $90.0 for United Airlines Holdings over the last 3 months.
Volume & Open Interest Trends
In terms of liquidity and interest, the mean open interest for United Airlines Holdings options trades today is 1819.93 with a total volume of 39,377.00.
In the following chart, we are able to follow the development of volume and open interest of call and put options for United Airlines Holdings’s big money trades within a strike price range of $50.0 to $90.0 over the last 30 days.
United Airlines Holdings Option Volume And Open Interest Over Last 30 Days
Largest Options Trades Observed:
| Symbol | PUT/CALL | Trade Type | Sentiment | Exp. Date | Ask | Bid | Price | Strike Price | Total Trade Price | Open Interest | Volume |
|---|---|---|---|---|---|---|---|---|---|---|---|
| UAL | PUT | SWEEP | BEARISH | 06/20/25 | $8.65 | $8.6 | $8.65 | $75.00 | $716.3K | 4.2K | 831 |
| UAL | CALL | TRADE | BULLISH | 01/17/25 | $2.91 | $2.84 | $2.89 | $85.00 | $476.8K | 3.3K | 1.6K |
| UAL | PUT | SWEEP | BEARISH | 06/20/25 | $8.65 | $8.6 | $8.65 | $75.00 | $426.4K | 4.2K | 2.2K |
| UAL | PUT | SWEEP | BEARISH | 06/20/25 | $8.65 | $8.6 | $8.65 | $75.00 | $390.1K | 4.2K | 1.5K |
| UAL | CALL | TRADE | BULLISH | 11/01/24 | $0.77 | $0.67 | $0.75 | $78.00 | $262.5K | 1.3K | 10.1K |
About United Airlines Holdings
United Airlines is a major US network carrier with hubs in San Francisco, Chicago, Houston, Denver, Los Angeles, New York/Newark, and Washington, D.C. United operates a hub-and-spoke system that is more focused on international and long-haul travel than its large US peers.
After a thorough review of the options trading surrounding United Airlines Holdings, we move to examine the company in more detail. This includes an assessment of its current market status and performance.
Current Position of United Airlines Holdings
- Trading volume stands at 4,058,299, with UAL’s price up by 1.45%, positioned at $77.19.
- RSI indicators show the stock to be may be overbought.
- Earnings announcement expected in 84 days.
Professional Analyst Ratings for United Airlines Holdings
5 market experts have recently issued ratings for this stock, with a consensus target price of $85.4.
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* An analyst from Susquehanna has decided to maintain their Positive rating on United Airlines Holdings, which currently sits at a price target of $85.
* An analyst from B of A Securities has decided to maintain their Buy rating on United Airlines Holdings, which currently sits at a price target of $84.
* Consistent in their evaluation, an analyst from Jefferies keeps a Buy rating on United Airlines Holdings with a target price of $95.
* Maintaining their stance, an analyst from Morgan Stanley continues to hold a Overweight rating for United Airlines Holdings, targeting a price of $88.
* An analyst from Jefferies persists with their Buy rating on United Airlines Holdings, maintaining a target price of $75.
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Blue Ridge Bankshares, Inc. Announces 2024 Third Quarter Results
Performance reflects improvement across a range of metrics such as deposit growth, noninterest expense reduction, and nonperforming asset reduction
Bank to complete exit from fintech banking-as-a-service depository operations by the end of 2024
Regulatory remediation efforts on track
RICHMOND, Va., Oct. 29, 2024 /PRNewswire/ — Blue Ridge Bankshares, Inc. (the “Company”) BRBS, the holding company of Blue Ridge Bank, National Association (“Blue Ridge Bank” or the “Bank”) and BRB Financial Group, Inc. (“BRB Financial Group”), today announced financial results for the quarter and year-to-date period ended September 30, 2024.
For the quarter ended September 30, 2024, the Company reported net income of $0.9 million, or $0.01 per diluted common share, compared to a net loss of $11.4 million, or $0.47 per diluted common share, for the quarter ended June 30, 2024, and a net loss of $41.4 million, or $2.18 per diluted common share, for the third quarter of 2023. Net income for the third quarter of 2024 included a $6.6 million after-tax recovery of credit losses on a specialty finance loan for which the sale of the loan was completed in the quarter upon the receipt of all contractual amounts due. The second quarter 2024 loss included a $6.7 million non-cash, after-tax negative fair value adjustment recorded for an equity investment in a fintech company. The third quarter 2023 net loss included a non-cash, after-tax goodwill impairment charge of $26.8 million, which was the entirety of the goodwill balance, and a $4.7 million after-tax settlement reserve for the previously disclosed and now settled Employee Stock Ownership Plan (“ESOP”) litigation assumed in the 2019 acquisition of Virginia Community Bankshares, Inc (“VCB”).
For the year-to-date period ended September 30, 2024, the Company reported a net loss of $13.4 million, or $0.34 per diluted common share, compared to a net loss of $46.0 million, or $2.43 per diluted common share, for the same period of 2023.
A Message From Blue Ridge Bankshares, Inc. President and CEO, G. William “Billy” Beale:
“Our 2024 third quarter marks one year since we began – in earnest – our journey toward restoring Blue Ridge Bank to its core strengths as a community-focused banking institution.
“Today, we are focused on three vital areas of initiative: our remediation work in response to the directives of our primary regulator; our initiatives to improve operational efficiency across the organization; and third, positioning Blue Ridge Bank for future growth.
“During our third quarter, we advanced and generated additional momentum in all three areas. We are increasingly seeing the benefits of these initiatives in several key metrics that reflect a healthier Blue Ridge Bank:
- “With respect to our regulatory remediation work, we made additional progress in exiting our fintech banking-as-a-service (“BaaS”) deposit operations. I am pleased to say that we remain ahead of schedule on this initiative and expect to be fully exited from this business by the end of the year. Consequently, deposits from fintech BaaS sources were down to only 3% of total deposits at quarter end. This is reduced from 18% of total deposits on a year-over-year basis.
- “The second area of initiative is our focus on operational efficiency. Over the next several quarters, we will be accelerating our efforts to drive new levels of efficiency across our entire organization. We have already begun to take some important steps down this path. For the third quarter, our noninterest expense was sequentially down nearly 10% from the second quarter and approximately 30% lower than the third quarter of last year when excluding the goodwill impairment charge.
- “The third vital area of initiative is pursuing profitable growth. Blue Ridge Bank’s proximity to strong commercial and consumer markets and favorable demographic trends across Virginia gives us opportunities we can take full advantage of. This combined with our capital levels necessary to fuel growth and our new commercial banking leader will help give us the ability to continue to drive deposit and to renew loan growth. Encouragingly, during the 2024 third quarter, we grew our deposits, excluding fintech-related and wholesale, by $74 million and by $144 million year-to-date. This is the third consecutive quarter we were able to grow this deposit base and lower our reliance on fintech-related deposits and wholesale funding.
- “Alongside these initiatives has been our focus on improving the quality and strength of our lending portfolio, which we have heavily scrutinized over the past year. At the end of the third quarter, our nonperforming loans to total assets ratio was 1.1%. This is compared to 1.4% as of the prior quarter-end and 2.5% as of the third quarter of last year. Under the guidance of our credit risk leadership and revised loan policy, I believe we have a much tighter and stronger credit profile today.
“As we exit the fintech BaaS business, we have moved to reposition the balance sheet to reflect a more traditional community bank. This multi-year process will focus on growing deposits in our footprint, reducing the number of out-of-market loans, and decreasing dependency on brokered deposits. We have achieved good progress on all of these during 2024.
“As we head toward the end of the year, I’m confident that we will finish 2024 in a fundamentally stronger position than we began. I am hopeful that we will continue to see further progress in those key metrics that are the best gauge of the strategies we are pursuing. Lastly, I am grateful for the support of this leadership team, our employees, our newly constituted board of directors, and importantly, our shareholders.”
Q3 2024 Highlights
(Comparisons for Third Quarter 2024 are relative to Second Quarter 2024 unless otherwise noted.)
Net Income:
- Net income for the quarter was $0.9 million, or $0.01 per diluted common share, compared to a net loss of $11.4 million, or $0.47 per diluted common share, for the prior quarter. Income before income taxes of $1.5 million for the quarter included a $6.2 million recovery of credit losses resulting primarily from an $8.4 million recovery upon the completion of the previously mentioned specialty finance loan sale. The prior quarter loss before income taxes of $12.1 million included a $3.1 million provision for credit losses and an $8.5 million, non-cash, negative fair value adjustment of an equity investment the Company holds in a fintech company. Excluding the second quarter fair value adjustment and the provision for (or recovery of) credit losses, the Company’s pre-tax income decreased by $4.4 million, with $5.9 million of the decline attributable to fair value adjustments and a loss on the sale of mortgage servicing rights (“MSRs”). Noninterest expenses for the quarter declined $2.8 million.
Asset Quality:
- Nonperforming loans, which include nonaccrual loans and loans past due 90 days or more and accruing interest, improved to $32.1 million, or 1.09% of total assets, at quarter end compared to $41.2 million, or 1.40% of total assets, at the prior quarter end. The decline in nonperforming loans primarily reflects the third quarter sale of the previously noted specialty finance loan.
- The recovery of credit losses was $6.2 million for the quarter compared to a provision for credit losses of $3.1 million for the prior quarter. The recovery of credit losses was primarily attributable to an $8.4 million recovery from the sale of the previously mentioned specialty finance loan and lower reserve needs due to loan portfolio balance reductions, partially offset by higher specific reserves for certain purchased loans. The provision for credit losses in the prior quarter was related primarily to reserve needs for certain purchased loans and increased reserves for the non-guaranteed portion of government-guaranteed loans (“GGL”), which offset lower reserve needs due to loan portfolio balance reductions.
- The allowance for credit losses (“ACL”) as a percentage of total loans held for investment was 1.17% at quarter end compared to 1.24% at the prior quarter end. The decline was primarily due to charge-offs of certain GGL and purchased loans in the current quarter. Net loan recoveries were $3.4 million in the quarter, which includes the $8.4 million recovery from the sale of the previously noted specialty finance loan. This recovery was the primary driver of the lower net loan (recovery) charge-off to average loans outstanding ratio (year-to-date annualized), which was (0.61)%, compared to 1.81% for the prior quarter.
Capital:
- The ratio of tangible common stockholders’ equity to tangible total assets was 10.6%1, compared to 10.3%1 at the prior quarter end. Tangible book value per common share (“TBV”) was $4.251 compared to $4.101 at the prior quarter end. The improvement in these ratios was primarily due to a reduction in accumulated other comprehensive losses, driven by $10.0 million in after-tax unrealized gains in the quarter on the Company’s portfolio of securities available for sale, resulting from lower market interest rates. TBV at the end of the third and second quarters did not include the conversion of the Series C Preferred Stock shares into common shares, which conversion is at the option of the holder. The assumed conversion of these shares would result in a negative impact of $0.31 and $0.29 on TBV as of September 30, 2024 and June 30, 2024, respectively.
- For the quarter ended September 30, 2024, the Bank’s tier 1 leverage ratio, tier 1 risk-based capital ratio, common equity tier 1 capital ratio, and total risk-based capital ratio were 11.56%, 15.68%, 15.68%, and 16.64%, respectively, compared to 11.02%, 14.19%, 14.19%, and 15.18%, respectively, at the prior quarter end. Capital ratios for the Company at September 30, 2024 were tier 1 leverage ratio of 11.46%, tier 1 risk-based capital ratio of 15.58%, common equity tier 1 capital ratio of 15.58%, and total risk-based capital ratio of 19.26%.
- As of September 30, 2024 and June 30, 2024, the Bank’s tier 1 leverage and total risk-based capital ratios exceeded the minimum capital ratios set forth in the Bank’s Consent Order with the Office of the Comptroller of the Currency (the “OCC”), which requires the Bank to maintain a minimum tier 1 leverage ratio of 10.00% and a total risk-based capital ratio of 13.00%.
Net Interest Income / Net Interest Margin:
- Net interest income was $19.1 million, a decline of $1.0 million from the prior quarter, primarily due to a decline in average balances of interest-earning assets, primarily loans held for investment, and the reversal of interest income due to loans placed on nonaccrual. This decline was partially offset by lower average balances of and rates paid on fintech-related deposits and lower average balances of wholesale funding. Net interest margin declined in the quarter to 2.74% from 2.79%; six basis points of the decline was due to loans placed on nonaccrual.
Noninterest Income / Noninterest Expense:
- Noninterest income for the quarter was $2.7 million compared to $0.3 million for the prior quarter, which included the $8.5 million previously noted negative fair value adjustment for an equity investment. Excluding the fair value adjustment, lower noninterest income for the quarter was primarily due to a $4.9 million negative variance in fair value adjustment on MSRs, primarily due to changes in future interest rate expectations, and a $1.0 million loss on the sale of a portion of the Company’s portfolio of MSRs. The Company expects to sell the majority of its remaining MSRs in the fourth quarter.
- Noninterest expense for the quarter was $26.5 million compared to $29.3 million in the prior quarter, a decrease of $2.8 million. The decrease was primarily due to lower salaries and employee benefits expense, lower regulatory remediation expenses, and lower Federal Deposit Insurance Corporation (“FDIC”) insurance assessments. Salaries and employee benefits expense in the quarter reflected lower headcount, primarily in the Bank’s GGL and compliance areas. Lower regulatory remediation expenses reflect the reduction in the use of third-party resources in the Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) area, as the Bank submitted certain requirements under the Consent Order. Lower FDIC assessments in the quarter were primarily due to a lower assessment rate and a smaller balance sheet.
Income Tax:
- The effective income tax rate for the quarter was 38.8% compared to 5.1% for the prior quarter. Income tax expense and the effective tax rate for the quarter reflected the vesting of restricted stock awards where the fair value of the underlying stock at the time of vesting was lower than that at award date and recognized for expense purposes. The income tax benefit and effective rate for the prior quarter included $2.0 million of provision expense recognized upon surrendering bank owned life insurance policies, representing the tax effect of the life-to-date income earned on the policies. Taxes on such earnings were previously permanently deferred but became subject to tax upon the surrender of the policies.
Balance Sheet:
- Total assets increased to $2.94 billion from $2.93 billion at the prior quarter end, an increase of $11.6 million. This increase was primarily due to higher cash and due from banks balances of $157.1 million at quarter end, primarily due to elevated deposit balances of a fintech lending partner ahead of its normal business cycle of early month fundings. This increase was partially offset by lower balances of loans held for investment and loans held for sale, which collectively declined $111.2 million in the quarter. Other asset balance declines included bank owned life insurance and MSRs, which declined $27.5 million and $10.4 million, respectively. The Company surrendered the majority of its bank owned life insurance policies in the second quarter and received a substantial portion of the proceeds in the third quarter, with the remaining amounts expected in the fourth quarter. Of the balance change in MSRs, $7.4 million was attributable to the sale of a portion of the MSRs portfolio, with the majority of the remaining MSRs expected to be sold in the fourth quarter. These actions, along with and in support of the exit of fintech BaaS depository operations, support the repositioning of the Bank towards a more traditional community bank model.
- Loans held for investment were $2.18 billion at quarter end, a decrease of $78.9 million from the prior quarter end, and $250.5 million from year-end 2023. The Company purposefully and selectively reduced balances of loans, primarily where borrowers did not represent in-market relationships.
- Total deposit balances increased to $2.35 billion from $2.33 billion at the prior quarter end, an increase of $20.7 million. Deposits, excluding fintech-related and wholesale deposits, increased $73.7 million in the quarter and $143.5 million in the year-to-date period. Brokered deposit balances declined $33.9 million in the quarter and $84.7 million in the year-to-date period. Estimated uninsured deposits as a percentage of total deposits were 16.8% at quarter end compared to 17.9% at the prior quarter end and 22.3% at year-end 2023.
- Deposits related to fintech relationships were $187.5 million at September 30, 2024, a decline of $19.2 million in the quarter and $278.4 million in the year-to-date period. Of the decline, fintech BaaS deposits decreased $108.8 million in the quarter, partially offset by an increase in fintech corporate deposits, including those of the previously noted fintech lending partner. For the year-to-date period, fintech BaaS deposits have declined by $307.3 million. Excluding brokered deposits, deposits related to fintech relationships represented 9.8%, 11.1%, and 22.7% of total deposits at September 30, 2024, June 30, 2024, and December 31, 2023, respectively.
- Sources of liquidity as of September 30, 2024, consisting of on-balance sheet cash, available credit under secured borrowing facilities, and unpledged securities available for sale, totaled approximately $805.0 million, or 202.7% of uninsured deposits as of the same date.
Income Statement:
Net interest income was $19.1 million for the third quarter of 2024, compared to $20.1 million for the second quarter of 2024, and $22.2 million for the third quarter of 2023. The decline from the second quarter of 2024 was primarily attributable to lower interest and fee income on loans due to lower average balances and the reversal of interest income due to loans placed on nonaccrual. This decline was partially offset by lower average balances and rates paid on interest-bearing demand accounts and lower average balances of wholesale funding. The majority of fintech BaaS deposits are in interest-bearing demand accounts.
Average balances of interest-earning assets decreased $90.1 million to $2.80 billion in the third quarter of 2024, relative to the prior quarter, and decreased $242.7 million from the year-ago quarter period. Relative to the prior quarter and the year-ago period, the decrease reflected primarily lower average balances of loans held for investment. The yield on average loans held for investment was 5.80% for the third and second quarters of 2024, compared to 5.88% for the third quarter of 2023. Nonaccrual interest had a negative impact of seven basis points on loan yield in the quarter.
Average balances of interest-bearing liabilities decreased $106.7 million to $2.12 billion in the third quarter of 2024, relative to the prior quarter, and decreased $233.0 million from the year-ago quarter period.
Cost of funds was 3.09% for the third quarter of 2024, compared to 3.02% for the second quarter of 2024, and 2.73% for the third quarter of 2023, while cost of deposits was 2.91%, 2.84%, and 2.46%, for the same respective periods. Higher deposit and overall funding costs in the 2024 periods reflect the impact of higher market interest rates and a shift in the mix of funding. Cost of deposits, excluding wholesale deposits, was 1.71% for the quarter compared to 2.28% for the prior quarter, and 2.50% for the year-ago period. The sequential quarter decline was primarily due to lower average balances of higher rate fintech-related deposits.
Net interest margin was 2.74% for the third quarter of 2024 compared to 2.79% in the prior quarter and 2.92% in the year-ago period. The decrease in net interest margin relative to the prior periods primarily reflects the impact of a slight increase in funding costs.
The Company recorded a recovery of credit losses of $6.2 million for the third quarter of 2024, compared to a provision for credit losses of $3.1 million for the second quarter of 2024, and a provision for credit losses of $11.1 million for the third quarter of 2023. The recovery of credit losses for the third quarter of 2024 was primarily attributable to an $8.4 million recovery from the sale of the previously noted specialty finance loan and lower reserve needs due to loan portfolio balance reductions, partially offset by higher specific reserves for certain purchased loans. The provision for credit losses for the second quarter of 2024 was primarily related to specific reserves on certain purchased loans and increased reserves for the non-guaranteed portion of the GGL portfolio, while the provision for credit losses for the third quarter of 2023 was primarily attributable to specific reserves for the previously reported group of specialty finance loans.
Noninterest income was $2.7 million for the third quarter of 2024, compared to $0.3 million for the second quarter of 2024, and $7.4 million for the third quarter of 2023. The increase in the third quarter relative to the second quarter was primarily due to the previously noted second quarter $8.5 million, non-cash, negative fair value adjustment of an equity investment. Excluding the fair value adjustment, lower noninterest income in the third quarter of 2024 was primarily due to negative fair value adjustments on MSRs, primarily due to change in future interest rate expectations, and a loss on the sale of a portion of the Company’s portfolio of MSRs. The decline in noninterest income for the third quarter of 2024 relative to the year-ago period was primarily attributable to fair value adjustments on MSRs.
Noninterest expense was $26.5 million for the third quarter of 2024, compared to $29.3 million for the second quarter of 2024, and $64.6 million for the third quarter of 2023. Noninterest expense decreased $2.8 million from the prior quarter and decreased $38.1 million from the year-ago period. The decrease relative to the second quarter of 2024 was primarily driven by lower salaries and employee benefits, lower regulatory remediation expenses, and lower FDIC insurance assessments. The decrease relative to the year-ago was primarily due to the 2023 non-cash goodwill impairment charge of $26.8 million, which was the entirety of the goodwill balance, and the $6.0 million settlement reserve for the previously disclosed, now settled, VCB ESOP litigation. Excluding these amounts and regulatory remediation expenses, noninterest expense declined $1.9 million relative to the year-ago period.
Balance Sheet:
Loans held for investment were $2.18 billion at September 30, 2024, compared to $2.26 billion at June 30, 2024, and $2.45 billion at September 30, 2023. These declines are attributable to the Company’s plan to purposefully and selectively reduce assets to partially meet the liquidity needs of the fintech BaaS depository operations wind down.
Total deposits were $2.35 billion at September 30, 2024, an increase of $20.7 million for the quarter, and a decrease of $219.6 million for the year-to-date period. Fintech-related deposits declined $19.2 million in the third quarter of 2024, while fintech BaaS deposits decreased $108.8 million in the quarter. Year-to-date fintech BaaS deposits decreased $307.3 million. Excluding fintech-related and brokered deposits, total deposits increased $73.7 million from the prior quarter end and $143.5 million from year-end 2023.
The Company previously reported that it was prohibited from the acceptance, renewal, or rollover of brokered deposits, as a result of the Consent Order. In the third quarter, the Bank received approval from the FDIC allowing the Bank to accept, renew, or rollover brokered deposits for a six-month period of time and in the amount of maturities during this period. The Bank expects to file another application for waiver of this prohibition in the fourth quarter. Brokered deposits at September 30, 2024 were $430.5 million, a decline of $33.9 million from June 30, 2024 and $84.7 million from December 31, 2023. The Company has used brokered deposits in anticipation of the liquidity requirements of the fintech BaaS winddown.
Noninterest-bearing deposits represented 19.6%, 20.2%, and 20.6% of total deposits at September 30, 2024, June 30, 2024, and September 30, 2023, respectively. Fintech-related balances represented 8.0%, 8.9%, and 28.8% of total deposits as of the same respective dates.
The held for investment loan to deposit ratio was 92.9% at September 30, 2024, compared to 97.1% at the prior quarter end, and 88.1% at the year-ago period-end.
About Blue Ridge Bankshares, Inc.:
Blue Ridge Bankshares, Inc. is the holding company for Blue Ridge Bank and BRB Financial Group. The Company, through its subsidiaries and affiliates, provides a wide range of financial services including retail and commercial banking, and retail mortgage lending. The Company also provides investment and wealth management services and management services for personal and corporate trusts, including estate planning and trust administration. Visit www.mybrb.com for more information.
Non-GAAP Financial Measures:
The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (“GAAP”) and prevailing practices in the banking industry. However, management uses certain non-GAAP measures, including tangible assets, tangible common equity, tangible book value per common share, and tangible common equity to tangible total assets to supplement the evaluation of the Company’s financial condition and performance. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the financial condition and capital position of the Company’s business. These non-GAAP disclosures should not be viewed as a substitute for financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP measures are included at the end of this release.
Forward-Looking Statements:
This release of the Company contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phrases of similar meaning. The Company cautions that the forward-looking statements are based largely on its expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements.
The following factors, among others, could cause the Company’s financial performance to differ materially from that expressed in such forward-looking statements:
- the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations;
- the effects of, and changes in, the macroeconomic environment and financial market conditions, including monetary and fiscal policies, interest rates and inflation;
- the impact of, and the ability to comply with, the terms of the Consent Order with the OCC, including the heightened capital requirements and other restrictions therein, and other regulatory directives;
- the imposition of additional regulatory actions or restrictions for noncompliance with the Consent Order or otherwise;
- the Company’s involvement in, and the outcome of, any litigation, legal proceedings or enforcement actions that may be instituted against the Company;
- reputational risk and potential adverse reactions of the Company’s customers, suppliers, employees, or other business partners;
- the Company’s ability to manage its fintech relationships, including implementing enhanced controls and procedures, complying with OCC directives and applicable laws and regulations, maintaining deposit levels and the quality of loans associated with these relationships and, in certain cases, winding down certain of these partnerships;
- the quality and composition of the Company’s loan and investment portfolios, including changes in the level of the Company’s nonperforming assets and charge-offs;
- the Company’s management of risks inherent in its loan portfolio, the credit quality of its borrowers, and the risk of a prolonged downturn in the real estate market, which could impair the value of the Company’s collateral and its ability to sell collateral upon any foreclosure;
- the ability to maintain adequate liquidity by retaining deposits and secondary funding sources, especially if the Company’s or the banking industry’s reputation becomes damaged;
- the ability to maintain capital levels adequate to support the Company’s business and to comply with OCC directives;
- the timely development of competitive new products and services and the acceptance of these products and services by new and existing customers;
- changes in consumer spending and savings habits;
- the willingness of users to substitute competitors’ products and services for the Company’s products and services;
- deposit flows;
- changes in technological and social media;
- potential exposure to fraud, negligence, computer theft, and cyber-crime;
- adverse developments in the banking industry generally, such as recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior;
- changing bank regulatory conditions, policies or programs, whether arising as new legislation or regulatory initiatives, that could lead to restrictions on activities of banks generally, or Blue Ridge Bank in particular, more restrictive regulatory capital requirements, increased costs, including deposit insurance premiums, regulation or prohibition of certain income producing activities or changes in the secondary market for loans and other products;
- the impact of changes in financial services policies, laws, and regulations, including laws, regulations, and policies concerning taxes, banking, securities, real estate, and insurance, and the application thereof by regulatory bodies;
- the effect of changes in accounting standards, policies, and practices as may be adopted from time to time;
- estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Company’s assets and liabilities;
- geopolitical conditions, including acts or threats of terrorism and/or military conflicts, or actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad;
- the occurrence or continuation of widespread health emergencies or pandemics, significant natural disasters, severe weather conditions, floods and other catastrophic events; and
- other risks and factors identified in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and in filings the Company makes from time to time with the U.S. Securities and Exchange Commission (“SEC”).
The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in filings the Company makes from time to time with the SEC. Any one of these risks or factors could have a material adverse impact on the Company’s results of operations or financial condition, or cause the Company’s actual results, performance or achievements to differ materially from those expressed in, or implied by, forward-looking information and statements contained in this release. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on its forward-looking statements. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements, which speak only as of the date of this release. The Company does not undertake to, and will not, update or revise these forward-looking statements after the date hereof, whether as a result of new information, future events, or otherwise.
1 Non-GAAP financial measure. Further information can be found at the end of this press release.
|
Blue Ridge Bankshares, Inc |
||||
|
Consolidated Balance Sheets |
||||
|
(Dollars in thousands, except share data) |
(unaudited) |
December 31, |
||
|
Assets |
||||
|
Cash and due from banks |
$ 281,698 |
$ 110,491 |
||
|
Restricted cash |
4,160 |
10,660 |
||
|
Federal funds sold |
2,910 |
4,451 |
||
|
Securities available for sale, at fair value |
314,784 |
321,081 |
||
|
Restricted equity investments |
20,891 |
18,621 |
||
|
Other equity investments |
4,525 |
12,905 |
||
|
Other investments |
21,344 |
29,467 |
||
|
Loans held for sale |
22,082 |
46,337 |
||
|
Loans held for investment, net of deferred fees and costs |
2,180,413 |
2,430,947 |
||
|
Less: allowance for credit losses |
(25,453) |
(35,893) |
||
|
Loans held for investment, net |
2,154,960 |
2,395,054 |
||
|
Accrued interest receivable |
13,171 |
14,967 |
||
|
Premises and equipment, net |
21,621 |
22,348 |
||
|
Right-of-use lease asset |
7,764 |
8,738 |
||
|
Bank owned life insurance |
14,953 |
48,453 |
||
|
Other intangible assets |
4,201 |
5,382 |
||
|
Mortgage servicing rights, net |
19,502 |
27,114 |
||
|
Deferred tax asset, net |
18,248 |
21,556 |
||
|
Other assets |
17,877 |
19,929 |
||
|
Total assets |
$ 2,944,691 |
$ 3,117,554 |
||
|
Liabilities and Stockholders’ Equity |
||||
|
Deposits: |
||||
|
Noninterest-bearing demand |
$ 459,793 |
$ 506,248 |
||
|
Interest-bearing demand and money market deposits |
748,416 |
1,049,536 |
||
|
Savings |
103,820 |
117,923 |
||
|
Time deposits |
1,034,463 |
892,325 |
||
|
Total deposits |
2,346,492 |
2,566,032 |
||
|
FHLB borrowings |
190,000 |
210,000 |
||
|
FRB borrowings |
— |
65,000 |
||
|
Subordinated notes, net |
39,806 |
39,855 |
||
|
Lease liability |
8,537 |
9,619 |
||
|
Other liabilities |
23,509 |
41,059 |
||
|
Total liabilities |
2,608,344 |
2,931,565 |
||
|
Commitments and contingencies |
||||
|
Stockholders’ Equity: |
||||
|
Common stock, no par value; 150,000,000 and 50,000,000 shares |
300,763 |
197,636 |
||
|
Preferred stock, $50 per share par value; 250,000 shares authorized at |
137 |
— |
||
|
Additional paid-in capital |
50,155 |
252 |
||
|
Retained earnings |
19,775 |
33,157 |
||
|
Accumulated other comprehensive loss, net of tax |
(34,483) |
(45,056) |
||
|
Total stockholders’ equity |
336,347 |
185,989 |
||
|
Total liabilities and stockholders’ equity |
$ 2,944,691 |
$ 3,117,554 |
||
|
(1) Derived from audited December 31, 2023 Consolidated Financial Statements |
||||
|
Blue Ridge Bankshares, Inc |
||||||
|
Consolidated Statements of Income (unaudited) |
||||||
|
For the Three Months Ended |
||||||
|
(Dollars in thousands, except per common share data) |
September 30, 2024 |
June 30, 2024 |
September 30, 2023 |
|||
|
Interest income: |
||||||
|
Interest and fees on loans |
$ 34,747 |
$ 36,196 |
$ 38,551 |
|||
|
Interest on taxable securities |
2,282 |
2,399 |
2,492 |
|||
|
Interest on nontaxable securities |
62 |
62 |
72 |
|||
|
Interest on deposit accounts and federal funds sold |
2,134 |
1,974 |
1,370 |
|||
|
Total interest income |
39,225 |
40,631 |
42,485 |
|||
|
Interest expense: |
||||||
|
Interest on deposits |
16,984 |
17,272 |
16,115 |
|||
|
Interest on subordinated notes |
566 |
552 |
566 |
|||
|
Interest on FHLB and FRB borrowings |
2,574 |
2,722 |
3,612 |
|||
|
Total interest expense |
20,124 |
20,546 |
20,293 |
|||
|
Net interest income |
19,101 |
20,085 |
22,192 |
|||
|
(Recovery of) provision for credit losses – loans |
(6,000) |
3,600 |
11,600 |
|||
|
Recovery of credit losses – unfunded commitments |
(200) |
(500) |
(550) |
|||
|
Total (recovery of) provision for credit losses |
(6,200) |
3,100 |
11,050 |
|||
|
Net interest income after provision for credit losses |
25,301 |
16,985 |
11,142 |
|||
|
Noninterest income: |
||||||
|
Fair value adjustments of other equity investments |
160 |
(8,537) |
55 |
|||
|
Residential mortgage banking income |
2,939 |
3,090 |
2,917 |
|||
|
Mortgage servicing rights |
(2,915) |
2,019 |
894 |
|||
|
Loss on sale of mortgage servicing rights |
(1,011) |
— |
— |
|||
|
Wealth and trust management |
730 |
623 |
462 |
|||
|
Service charges on deposit accounts |
417 |
423 |
365 |
|||
|
Increase in cash surrender value of BOLI |
127 |
333 |
311 |
|||
|
Bank and purchase card, net |
690 |
513 |
357 |
|||
|
Loss on sale of securities available for sale |
— |
— |
(649) |
|||
|
Other |
1,602 |
1,844 |
2,703 |
|||
|
Total noninterest income |
2,739 |
308 |
7,415 |
|||
|
Noninterest expense: |
||||||
|
Salaries and employee benefits |
13,938 |
14,932 |
14,640 |
|||
|
Occupancy and equipment |
1,394 |
1,303 |
1,475 |
|||
|
Technology and communications |
2,767 |
2,332 |
2,891 |
|||
|
Legal and regulatory filings |
614 |
363 |
912 |
|||
|
Advertising and marketing |
222 |
183 |
350 |
|||
|
Audit fees |
498 |
295 |
791 |
|||
|
FDIC insurance |
1,130 |
1,817 |
1,322 |
|||
|
Intangible amortization |
265 |
276 |
308 |
|||
|
Other contractual services |
1,374 |
1,760 |
1,492 |
|||
|
Other taxes and assessments |
759 |
588 |
802 |
|||
|
Regulatory remediation |
357 |
1,397 |
3,782 |
|||
|
Goodwill impairment |
— |
— |
26,826 |
|||
|
ESOP litigation |
— |
— |
6,000 |
|||
|
Other |
3,177 |
4,098 |
3,030 |
|||
|
Total noninterest expense |
26,495 |
29,344 |
64,621 |
|||
|
Income (loss) before income taxes |
1,545 |
(12,051) |
(46,064) |
|||
|
Income tax expense (benefit) |
599 |
(616) |
(4,693) |
|||
|
Net income (loss) |
$ 946 |
$ (11,435) |
$ (41,371) |
|||
|
Basic and diluted earnings (loss) per common share |
$ 0.01 |
$ (0.47) |
$ (2.18) |
|||
|
Blue Ridge Bankshares, Inc |
||||
|
Consolidated Statements of Income (unaudited) |
||||
|
For the Nine Months Ended |
||||
|
(Dollars in thousands, except per common share data) |
September 30, 2024 |
September 30, 2023 |
||
|
Interest income: |
||||
|
Interest and fees on loans |
$ 109,289 |
$ 114,009 |
||
|
Interest on taxable securities |
7,119 |
7,663 |
||
|
Interest on nontaxable securities |
184 |
257 |
||
|
Interest on deposit accounts and federal funds sold |
5,795 |
3,906 |
||
|
Total interest income |
122,387 |
125,835 |
||
|
Interest expense: |
||||
|
Interest on deposits |
52,741 |
42,070 |
||
|
Interest on subordinated notes |
1,677 |
1,666 |
||
|
Interest on FHLB andFRB borrowings |
8,433 |
10,821 |
||
|
Total interest expense |
62,851 |
54,557 |
||
|
Net interest income |
59,536 |
71,278 |
||
|
(Recovery of) provision for credit losses – loans |
(2,400) |
21,103 |
||
|
Recovery of credit losses – unfunded commitments |
(1,700) |
(1,550) |
||
|
Total (recovery of) provision for credit losses |
(4,100) |
19,553 |
||
|
Net interest income after provision for credit losses |
63,636 |
51,725 |
||
|
Noninterest income: |
||||
|
Fair value adjustments of other equity investments |
(8,384) |
(277) |
||
|
Residential mortgage banking income |
8,693 |
9,261 |
||
|
Mortgage servicing rights |
(166) |
148 |
||
|
Loss on sale of mortgage servicing rights |
(1,011) |
— |
||
|
Gain on sale of government guaranteed loans |
131 |
4,799 |
||
|
Wealth and trust management |
1,873 |
1,356 |
||
|
Service charges on deposit accounts |
1,238 |
1,057 |
||
|
Increase in cash surrender value of BOLI |
797 |
885 |
||
|
Bank and purchase card, net |
1,444 |
1,257 |
||
|
Loss on sale of securities available for sale |
(67) |
(649) |
||
|
Other |
6,324 |
6,597 |
||
|
Total noninterest income |
10,872 |
24,434 |
||
|
Noninterest expense: |
||||
|
Salaries and employee benefits |
44,918 |
44,447 |
||
|
Occupancy and equipment |
4,221 |
4,957 |
||
|
Technology and communications |
7,378 |
7,670 |
||
|
Legal and regulatory filings |
1,424 |
4,899 |
||
|
Advertising and marketing |
701 |
973 |
||
|
Audit fees |
1,948 |
1,440 |
||
|
FDIC insurance |
4,324 |
3,297 |
||
|
Intangible amortization |
828 |
998 |
||
|
Other contractual services |
4,851 |
5,649 |
||
|
Other taxes and assessments |
2,290 |
2,407 |
||
|
Regulatory remediation |
4,398 |
7,304 |
||
|
Goodwill impairment |
— |
26,826 |
||
|
ESOP litigation |
— |
6,000 |
||
|
Other |
11,033 |
10,653 |
||
|
Total noninterest expense |
88,314 |
127,520 |
||
|
Loss before income taxes |
(13,806) |
(51,361) |
||
|
Income tax benefit |
(424) |
(5,347) |
||
|
Net loss |
$ (13,382) |
$ (46,014) |
||
|
Basic and diluted loss per common share |
$ (0.34) |
$ (2.43) |
||
|
Blue Ridge Bankshares, Inc |
||||||||||
|
Quarter Summary of Selected Financial Data (unaudited) |
||||||||||
|
As of and for the Three Months Ended |
||||||||||
|
(Dollars and shares in thousands, except per common share data) |
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
|||||
|
Income Statement Data: |
2024 |
2024 |
2024 |
2023 |
2023 |
|||||
|
Interest income |
$ 39,225 |
$ 40,631 |
$ 42,531 |
$ 43,160 |
$ 42,485 |
|||||
|
Interest expense |
20,124 |
20,546 |
22,182 |
21,397 |
20,293 |
|||||
|
Net interest income |
19,101 |
20,085 |
20,349 |
21,763 |
22,192 |
|||||
|
(Recovery of) provision for credit losses |
(6,200) |
3,100 |
(1,000) |
2,770 |
11,050 |
|||||
|
Net interest income after provision for credit losses |
25,301 |
16,985 |
21,349 |
18,993 |
11,142 |
|||||
|
Noninterest income |
2,739 |
308 |
7,825 |
4,107 |
7,415 |
|||||
|
Noninterest expenses, excluding goodwill impairment |
26,495 |
29,344 |
32,474 |
30,583 |
37,795 |
|||||
|
Goodwill impairment |
— |
— |
— |
— |
26,826 |
|||||
|
Income (loss) before income taxes |
1,545 |
(12,051) |
(3,300) |
(7,483) |
(46,064) |
|||||
|
Income tax expense (benefit) |
599 |
(616) |
(407) |
(1,724) |
(4,693) |
|||||
|
Net income (loss) |
946 |
(11,435) |
(2,893) |
(5,759) |
(41,371) |
|||||
|
Per Common Share Data: |
||||||||||
|
Earnings (loss) per common share – basic and diluted |
$ 0.01 |
$ (0.47) |
$ (0.15) |
$ (0.30) |
$ (2.18) |
|||||
|
Book value per common share |
4.30 |
4.15 |
9.24 |
9.69 |
9.53 |
|||||
|
Tangible book value per common share – Non-GAAP |
4.25 |
4.10 |
9.04 |
9.47 |
9.30 |
|||||
|
Balance Sheet Data: |
||||||||||
|
Total assets |
$ 2,944,691 |
$ 2,933,072 |
$ 3,076,187 |
$ 3,117,554 |
$ 3,262,713 |
|||||
|
Average assets |
2,967,774 |
3,084,643 |
3,164,932 |
3,165,886 |
3,249,229 |
|||||
|
Average interest-earning assets |
2,796,116 |
2,886,186 |
2,966,491 |
2,979,065 |
3,038,795 |
|||||
|
Loans held for investment |
2,180,413 |
2,259,279 |
2,394,089 |
2,430,947 |
2,446,370 |
|||||
|
Allowance for credit losses |
25,453 |
28,036 |
35,025 |
35,893 |
49,631 |
|||||
|
Purchase accounting adjustments (discounts) on acquired loans |
4,162 |
4,408 |
4,873 |
5,117 |
5,831 |
|||||
|
Loans held for sale |
22,082 |
54,377 |
34,902 |
46,337 |
69,640 |
|||||
|
Securities available for sale, at fair value |
314,784 |
307,427 |
314,394 |
321,081 |
313,930 |
|||||
|
Noninterest-bearing demand deposits |
459,793 |
470,128 |
496,375 |
506,248 |
572,969 |
|||||
|
Fintech Banking-as-a-Service (“BaaS”) deposits |
63,674 |
172,456 |
272,973 |
370,968 |
493,009 |
|||||
|
Total deposits |
2,346,492 |
2,325,839 |
2,465,776 |
2,566,032 |
2,776,151 |
|||||
|
Subordinated notes, net |
39,806 |
39,822 |
39,838 |
39,855 |
39,871 |
|||||
|
FHLB and FRB advances |
190,000 |
202,900 |
345,000 |
275,000 |
215,000 |
|||||
|
Average interest-bearing liabilities |
2,121,402 |
2,228,071 |
2,411,683 |
2,362,774 |
2,354,360 |
|||||
|
Total stockholders’ equity |
336,347 |
325,614 |
180,906 |
185,989 |
182,837 |
|||||
|
Average stockholders’ equity |
326,880 |
318,042 |
183,901 |
223,840 |
238,530 |
|||||
|
Weighted average common shares outstanding – basic |
73,366 |
24,477 |
19,178 |
19,033 |
19,015 |
|||||
|
Weighted average common shares outstanding – diluted |
87,086 |
24,477 |
19,178 |
19,033 |
19,015 |
|||||
|
Financial Ratios: |
||||||||||
|
Return on average assets (1) |
0.13 % |
-1.48 % |
-0.37 % |
-0.73 % |
-5.09 % |
|||||
|
Return on average equity (1) |
1.16 % |
-14.38 % |
-6.29 % |
-10.29 % |
-69.38 % |
|||||
|
Total loan to deposit ratio |
93.9 % |
99.5 % |
98.5 % |
96.5 % |
90.6 % |
|||||
|
Held for investment loan-to-deposit ratio |
92.9 % |
97.1 % |
97.1 % |
94.7 % |
88.1 % |
|||||
|
FintechBaaS deposits to total deposits ratio |
2.7 % |
7.4 % |
11.1 % |
14.5 % |
17.8 % |
|||||
|
Net interest margin (1) |
2.74 % |
2.79 % |
2.75 % |
2.92 % |
2.92 % |
|||||
|
Cost of deposits (1) |
2.91 % |
2.84 % |
2.85 % |
2.73 % |
2.46 % |
|||||
|
Cost of funds (1) |
3.09 % |
3.02 % |
3.03 % |
2.91 % |
2.73 % |
|||||
|
Efficiency ratio |
121.3 % |
143.9 % |
115.3 % |
118.2 % |
127.7 % |
|||||
|
Regulatory remediation expenses |
357 |
1,397 |
2,644 |
3,155 |
3,782 |
|||||
|
Capital and Asset Quality Ratios: |
||||||||||
|
Average stockholders’ equity to average assets |
11.0 % |
10.3 % |
5.8 % |
7.1 % |
7.3 % |
|||||
|
Allowance for credit losses to loans held for investment |
1.17 % |
1.24 % |
1.46 % |
1.48 % |
2.03 % |
|||||
|
Ratio of net (recoveries) charge-offs to average loans outstanding (1) |
-0.61 % |
1.81 % |
0.14 % |
2.84 % |
0.09 % |
|||||
|
Nonperforming loans to total assets |
1.09 % |
1.40 % |
1.73 % |
2.02 % |
2.51 % |
|||||
|
Nonperforming assets to total assets |
1.09 % |
1.40 % |
1.73 % |
2.02 % |
2.51 % |
|||||
|
Nonperforming loans to total loans |
1.46 % |
1.78 % |
2.19 % |
2.55 % |
3.25 % |
|||||
|
Reconciliation of Non-GAAP Financial Measures (unaudited): |
||||||||||
|
Tangible Common Equity: |
||||||||||
|
Total stockholders’ equity |
$ 336,347 |
$ 325,614 |
$ 180,906 |
$ 185,989 |
$ 182,837 |
|||||
|
Less: preferred stock (including additional paid-in capital) |
(20,605) |
(20,605) |
— |
— |
— |
|||||
|
Common stockholders’ equity |
$ 315,742 |
$ 305,009 |
$ 180,906 |
$ 185,989 |
$ 182,837 |
|||||
|
Less: Goodwill and other intangibles, net of deferred tax liability (2) |
(3,281) |
(3,552) |
(3,913) |
(4,179) |
(4,286) |
|||||
|
Tangible common equity (Non-GAAP) |
$ 312,461 |
$ 301,456 |
$ 176,993 |
$ 181,810 |
$ 178,551 |
|||||
|
Total common shares outstanding |
73,474 |
73,504 |
19,584 |
19,198 |
19,192 |
|||||
|
Book value per common share |
$ 4.30 |
$ 4.15 |
$ 9.24 |
$ 9.69 |
$ 9.53 |
|||||
|
Tangible book value per common share (Non-GAAP) |
4.25 |
4.10 |
9.04 |
9.47 |
9.30 |
|||||
|
Tangible Common Equity to Tangible Total Assets |
||||||||||
|
Total assets |
$ 2,944,691 |
$ 2,933,072 |
$ 3,076,187 |
$ 3,117,554 |
$ 3,262,713 |
|||||
|
Less: Goodwill and other intangibles, net of deferred tax liability (2) |
(3,281) |
(3,552) |
(3,913) |
(4,179) |
(4,286) |
|||||
|
Tangible total assets (Non-GAAP) |
$ 2,941,410 |
$ 2,929,520 |
$ 3,072,274 |
$ 3,113,375 |
$ 3,258,427 |
|||||
|
Tangible common equity (Non-GAAP) |
$ 312,461 |
$ 301,456 |
$ 176,993 |
$ 181,810 |
$ 178,551 |
|||||
|
Tangible common equity to tangible total assets (Non-GAAP) |
10.6 % |
10.3 % |
5.8 % |
5.8 % |
5.5 % |
|||||
|
(1) Annualized |
||||||||||
|
(2) Excludes mortgage servicing rights |
||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/blue-ridge-bankshares-inc-announces-2024-third-quarter-results-302290711.html
SOURCE Blue Ridge Bankshares, Inc.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Alphabet Q3 Earnings Highlights: Revenue Beat, EPS Beat, Google Cloud Up 35%, 'Momentum Across The Company Is Extraordinary'
Technology giant Alphabet Inc GOOG GOOGL reported third-quarter financial results after the market close Tuesday.
Here are the key highlights.
What Happened: Alphabet reported third-quarter revenue of $88.27 billion, up 15% year-over-year. The total beat a Street consensus estimate of $86.31 billion, according to data from Benzinga Pro.
The company reported third-quarter earnings per share of $2.12, which beat a Street consensus estimate of $1.84.
Revenue was broken down as follows in the third quarter, with the prior year’s total in parentheses:
- Google Search: $49.4 billion ($44 billion)
- YouTube ads: $8.9 billion ($8 billion)
- Google Network: $7.5 billion ($7.7 billion)
- Total Google Advertising: $65.9 billion ($59.6 billion)
The company also reported Google subscribers, platform and devices revenue of $10.7 billion, up from $8.3 billion in the prior year and Google Cloud revenue of $11.4 billion, up from $8.45 billion in the third quarter of the prior year.
Google Cloud revenues were up 35% year-over-year in the quarter, with the company highlighting continued growth from artificial intelligence.
“The momentum across the company is extraordinary,” Alphabet CEO Sundar Pichai said. “Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools.”
Pichai said AI features are expanding what people search for and how they search for it.
The company is winning larger deals and attracting new customers thanks to its AI solutions in cloud, the CEO said.
YouTube passed $50 billion in total ads and subscription revenues over the last four quarters for the first time, he said.
“I’m looking forward to driving more advances for consumers, customers and creators globally.”
GOOG Price Action: Alphabet Class C stock is up 3.38% to $176.93 in after-hours trading Tuesday versus a 52-week trading range of $123.88 to $193.30.
Read Next:
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
NEW GOLD REPORTS THIRD QUARTER 2024 RESULTS
Strong All-in Sustaining Costs Drive Increasing Margins and Record Free Cash Flow Generation, Provides 2024 Operational Outlook Update
(All amounts are in U.S. dollars unless otherwise indicated)
TORONTO, Oct. 29, 2024 /PRNewswire/ – New Gold Inc. (“New Gold” or the “Company”) NGD NGD reports third quarter results for the Company as of September 30, 2024. Third quarter 2024 production was 78,369 gold ounces and 12.6 million pounds of copper, at operating expenses of $1,021 per gold ounce sold (co-product basis)3 and all-in sustaining costs1 of $1,195 per gold ounce sold (by-product basis). The strong cost performance allows the Company to leverage higher metal prices, resulting in record cash flow from operations of $128 million and record free cash flow1 of $57 million.
Third Quarter Delivers Highest Production and Lowest Costs This Year, Trends Expected to Continue into the Fourth Quarter
“New Afton delivered a strong operating quarter and completed critical C-Zone milestones ahead of schedule, while Rainy River delivered costs as planned, with all-in sustaining costs 29% lower quarter-over-quarter,” stated Patrick Godin, President and CEO. “The Company continues to expect the fourth quarter of 2024 to be its strongest quarter of the year, concluding a successful year that has seen New Gold reach its free cash flow inflection point and deliver on key project milestones in pursuit of our objective to target a sustainable production platform of approximately 600,000 gold equivalent ounces per year until at least 2030.”
- Third quarter consolidated production was 78,369 ounces of gold and 12.6 million pounds of copper at all-in sustaining costs1 of $1,195 per gold ounce sold (by-product basis).
- New Afton third quarter production was 16,477 ounces of gold and 12.6 million pounds of copper at all-in sustaining costs1 of ($408) per gold ounce sold (by-product basis). The B3 cave continues to perform as planned, and C-Zone ore production is ramping up concurrently with construction of the cave footprint. Commercial production from C-Zone and crusher commissioning occurred early in the fourth quarter, two months ahead of schedule.
- Rainy River third quarter production was 61,892 ounces of gold at all-in sustaining costs1 of $1,327 per gold ounce sold (by-product basis). Although Rainy River achieved the highest production quarter year-to-date, operations were impacted by a voluntary suspension following a fatality in July, after which open pit production gradually returned to full capacity.
New Gold Achieves Record Quarterly Free Cash Flow, Further Strengthening the Balance Sheet
“Financially, the third quarter was excellent for New Gold, highlighted by record quarterly free cash flow generation of $57 million,” added Mr. Godin. “Similarly, financial discipline allowed the Company to maintain an excellent liquidity position and strong balance sheet while making the $43 million payment to Ontario Teachers and repaying $50 million on the credit facility.”
- The Company delivered record quarterly revenue of $252 million, record cash flow from operations of $128 million, and record free cash flow1 of $57 million, driven by higher metal prices, operational discipline and efficient capital management.
- During the third quarter, the Company made a payment of $43 million to the Ontario Teachers’ Pension Plan (“Ontario Teachers”) as part of the minimum cash guarantee under the terms of the original 2020 New Afton strategic partnership. The Company also repaid $50 million of the $100 million drawn on its credit facility to fund the payment under the amending agreement with Ontario Teachers pursuant to which the strategic partnership was amended to reduce the free cash flow interest from 46.0% to 19.9% (the “Amending Agreement”).
- New Gold exits the third quarter with a strong financial position, with cash and cash equivalents of $133 million, and a liquidity position of $459 million as at September 30, 2024.
2024 Operational Outlook Update, Highlighted by Strong Cost Performance
“Although we expect consolidated gold production to be slightly below the original guidance range, copper production, cash costs, all-in sustaining costs and capital spending are all trending in-line with or better than the outlook presented at the beginning of this year,” stated Mr. Godin. “On an asset basis, New Afton full-year gold production is expected to be at the top end of the guidance range and Rainy River gold production is expected to be lower than planned, mainly due to less high-grade tonnes on two open pit benches, and our decision to voluntarily suspend operations in July and gradually return to full production.”
“Considering the performance to date, and after reviewing the open pit ore blocks planned at Rainy River in the fourth quarter, together with the excellent performance at New Afton, we are confident in our updated consolidated production forecasts to the end of this year and our previously provided 2025 and 2026 outlook. Furthermore, through operational discipline and capital management, we continue to successfully manage costs to generate significant free cash flow and offset the financial impact of lower production at Rainy River. Following the free cash flow inflection point, achieved in the middle of this year, and with the completion of key growth project milestones, the Company is well positioned to continue delivering on our targets and leverage the current metal price environment,” added Mr. Godin.
- Gold production is expected to be in the range of 300,000 to 310,000 ounces (previously 310,000 to 350,000 ounces). New Afton gold production is expected to be at the top end of the guidance range of 60,000 to 70,000 ounces. Rainy River gold production is expected to be in the range of 230,000 to 240,000 ounces (previously 250,000 to 280,000 ounces).
- Copper production is expected to be at the mid-point of the guidance range of 50 to 60 million pounds.
- Cash costs1 are trending in-line with the mid-point of the guidance range of $725 to $825 per gold ounce sold, on a by-product basis, despite the slightly lower gold production outlook and lower capitalized waste stripping, as a result of lower mining and processing costs, achieved through operational discipline at both operations, and higher by-product revenues from higher copper prices. Overall, the unit mining cost per tonne is lower than plan due to operational efficiency improvements and cost reduction initiatives.
- All-in sustaining costs1 are expected to be at the low end of the guidance range of $1,240 to $1,340 per gold ounce sold, on a by-product basis, as a result of strong cash costs and lower sustaining capital spend. Rainy River’s all-in sustaining costs are expected to be at the top end of its guidance range as lower mining and processing costs offset the lower expected production. All-in sustaining costs at New Afton are expected to be below the low end of its guidance range.
- Operating expenses per gold ounce (co-product) are now tracking to the high end or slightly above the top end of the guidance range of $965 to $1,065 per gold ounce sold as a result of lower capitalized waste stripping and slightly lower gold production, which offset the impact of lower mining and processing costs. Operating expenses per copper pound (co-product) are trending in-line with the mid-point of the guidance range of $1.90 to $2.40 per copper pound sold.
- Sustaining capital1 is tracking approximately $20 million below the low end of the guidance range of $115 million to $130 million, due to efficient capital management, savings related to execution of the Rainy River tailings dam raise, lower capitalized waste stripping and timing of capital spend at New Afton.
- Growth capital1 is tracking to the low end of the guidance range of $175 million to $200 million, due to efficient capital management and early commissioning of the materials handling system at New Afton.
Notable Exploration Successes With a Focus on Near Mine Targets
“Our exploration strategy continued to advance during the third quarter, with positive exploration results released on both assets earlier in September. With the previously announced increased exploration budgets at both Rainy River and New Afton, the fourth quarter is expected to have the most metres drilled in 2024, as we work towards updating our Mineral Reserves and Resources early in 2025,” stated Mr. Godin.
- At Rainy River, exploration drilling continues to advance on underground targets. During the third quarter, the Company provided an update on the ongoing Rainy River exploration program (see September 11, 2024 news release), highlighting successful expansion of gold mineralized zones. These results are expected to have a positive impact on Rainy River’s Mineral Resource estimate at year-end 2024 and form the basis of additional exploration opportunities in the coming years. Exploration drilling in the fourth quarter will continue testing the down-dip continuity of existing underground zones while exploring for potential new mining zones.
- At New Afton, the Company continues to prioritize exploration drilling from the underground drift previously completed in the second quarter. During the third quarter, the Company provided an additional update on the ongoing exploration program at New Afton (see September 16, 2024 news release), highlighting positive exploration results in the eastern part of the mine where high-grade copper-gold porphyry mineralization was intersected. Exploration efforts during the fourth quarter will remain focused on potential near-mine copper-gold zones located above the C-Zone extraction level.
Consolidated Financial Highlights
|
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
|
Revenue ($M) |
252.0 |
201.3 |
662.3 |
587.3 |
|
Operating expenses ($M) |
107.6 |
107.5 |
323.9 |
329.6 |
|
Depreciation and depletion ($M) |
58.3 |
58.8 |
190.8 |
168.2 |
|
Net earnings (loss) ($M) |
37.9 |
(2.7) |
47.5 |
(37.1) |
|
Net earnings (loss), per share ($) |
0.05 |
— |
0.06 |
(0.05) |
|
Adj. net earnings ($M)1 |
64.3 |
23.1 |
94.3 |
53.1 |
|
Adj. net earnings, per share ($)1 |
0.08 |
0.03 |
0.13 |
0.08 |
|
Cash generated from operations ($M) |
127.9 |
100.1 |
283.2 |
217.0 |
|
Cash generated from operations, per share ($) |
0.16 |
0.15 |
0.38 |
0.32 |
|
Cash generated from operations, before changes in non-cash operating working capital ($M)1 |
120.0 |
87.7 |
283.1 |
228.5 |
|
Cash generated from operations, before changes in non-cash operating working capital, per share ($)1 |
0.15 |
0.13 |
0.38 |
0.33 |
|
Free cash flow ($M)1 |
57.0 |
21.6 |
62.8 |
(17.3) |
- Revenue in the third quarter increased over the prior-year period primarily due to higher metal prices and gold sales volume, partially offset by lower copper sales volume. For the nine months ended September 30, 2024, the increase in revenue relative to the prior-year period was primarily due to higher metal prices, partially offset by lower gold sales volume.
- Operating expenses in the third quarter and for the nine months ended September 30, 2024 were in-line with the prior year periods.
- Depreciation expense in the third quarter was in-line compared to the prior-year period as the higher depreciable cost basis at Rainy River was offset by the lower depreciable cost basis at New Afton due to the disposition of mineral interest properties as a result of the accounting for the Amending Agreement with Ontario Teachers. For the nine months ended September 30, 2024, depreciation and depletion increased due to a higher depreciable cost basis when compared to the prior-year period, partially offset by an inventory write-up at Rainy River. Depreciation expense in the fourth quarter is expected to increase as C-Zone has reached commercial production and increases the depreciable cost basis.
- Net earnings increased over the prior-year periods due to higher revenue. For the nine months ended September 30, 2024, the increase in net earnings was also attributable to a net gain on the derecognition of the New Afton free cash flow obligation.
- Adjusted net earnings1 increased over the prior-year periods due to higher revenue, partially offset by higher depreciation in the nine months ended September 30, 2024.
- Cash generated from operations and free cash flow1 increased over the prior-year periods primarily due to higher revenue, lower sustaining capital spend, and positive working capital movements. The Company delivered record quarterly free cash flow of $57 million.
- September 30, 2024 cash and cash equivalents were $133 million.
Consolidated Operational Highlights
|
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
|
Gold production (ounces)2 |
78,369 |
82,986 |
217,865 |
241,991 |
|
Gold sold (ounces)2 |
81,791 |
79,821 |
219,565 |
241,247 |
|
Copper production (Mlbs)2 |
12.6 |
13.2 |
39.5 |
35.5 |
|
Copper sold (MIbs)2 |
11.0 |
13.0 |
36.4 |
32.5 |
|
Gold revenue, per ounce ($)3 |
2,485 |
1,900 |
2,297 |
1,902 |
|
Copper revenue, per pound ($)3 |
3.98 |
3.57 |
3.97 |
3.65 |
|
Average realized gold price, per ounce ($)1 |
2,507 |
1,924 |
2,324 |
1,926 |
|
Average realized copper price, per pound ($)1 |
4.18 |
3.78 |
4.19 |
3.89 |
|
Operating expenses per gold ounce sold ($/ounce, co-product)3 |
1,021 |
982 |
1,090 |
1,014 |
|
Operating expenses per copper pound sold ($/pound, co-product)3 |
2.18 |
2.24 |
2.33 |
2.61 |
|
Depreciation and depletion per gold ounce sold ($/ounce) |
715 |
739 |
872 |
699 |
|
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 |
741 |
749 |
783 |
858 |
|
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 |
1,195 |
1,333 |
1,317 |
1,418 |
|
Sustaining capital ($M)1 |
19.8 |
35.6 |
77.2 |
97.5 |
|
Growth capital ($M)1 |
42.7 |
35.0 |
118.6 |
107.8 |
|
Total capital ($M) |
62.5 |
70.6 |
195.8 |
205.3 |
Rainy River Mine
Operational Highlights
|
Rainy River Mine |
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
Gold production (ounces)2 |
61,892 |
64,970 |
164,908 |
191,053 |
|
Gold sold (ounces)2 |
67,228 |
62,426 |
169,837 |
193,846 |
|
Gold revenue, per ounce ($)3 |
2,501 |
1,921 |
2,323 |
1,920 |
|
Average realized gold price, per ounce ($)1 |
2,501 |
1,921 |
2,323 |
1,920 |
|
Operating expenses per gold ounce sold ($/ounce)3 |
1,089 |
1,056 |
1,195 |
1,074 |
|
Depreciation and depletion per gold ounce sold ($/ounce) |
681 |
641 |
809 |
613 |
|
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 |
1,028 |
1,015 |
1,130 |
1,032 |
|
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 |
1,327 |
1,535 |
1,582 |
1,532 |
|
Sustaining capital ($M)1 |
17.9 |
28.7 |
69.5 |
82.6 |
|
Growth capital ($M)1 |
14.0 |
3.3 |
31.8 |
13.5 |
|
Total capital ($M) |
31.9 |
32.0 |
101.3 |
96.1 |
Operating Key Performance Indicators
|
Rainy River Mine |
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
Open Pit Only |
||||
|
Tonnes mined per day (ore and waste) |
81,619 |
121,011 |
97,352 |
123,336 |
|
Ore tonnes mined per day |
24,374 |
36,177 |
19,527 |
35,567 |
|
Operating waste tonnes per day |
52,080 |
44,393 |
53,299 |
55,458 |
|
Capitalized waste tonnes per day |
5,164 |
40,442 |
24,526 |
32,311 |
|
Total waste tonnes per day |
57,245 |
84,835 |
77,825 |
87,769 |
|
Strip ratio (waste:ore) |
2.35 |
2.35 |
3.99 |
2.47 |
|
Underground Only |
||||
|
Ore tonnes mined per day |
834 |
801 |
755 |
856 |
|
Waste tonnes mined per day |
1,117 |
474 |
1,166 |
456 |
|
Lateral development (metres) |
1,018 |
649 |
3,275 |
2,371 |
|
Open Pit and Underground |
||||
|
Tonnes milled per calendar day |
24,528 |
25,308 |
25,204 |
23,664 |
|
Gold grade milled (g/t) |
0.95 |
0.97 |
0.84 |
1.01 |
|
Gold recovery (%) |
93 |
90 |
92 |
91 |
- Third quarter gold production was 61,892 ounces. For the nine months ended September 30, 2024, gold production was 164,908 ounces. The decrease over the prior year periods was primarily due to increased mill feed from low-grade stockpiles.
- Operating expenses per gold ounce sold for the third quarter was in-line with the prior-year period. Operating expenses per gold ounce sold for the nine months ended September 30, 2024, increased over the prior-year period primarily due to lower sales volumes.
- All-in sustaining costs1 per gold ounce sold (by-product basis) for the third quarter decreased over the prior-year period due to higher sales volumes and lower sustaining capital spend. All-in sustaining costs per gold ounce sold (by-product basis) for the nine months ended September 30, 2024, increased over the prior-year period due to lower sales volumes, partially offset by lower sustaining capital spend.
- Total capital for the third quarter is in-line with the prior-year period, and higher for the nine months ended September 30, 2024. The increase over the prior-year period is due to higher growth capital spend, partially offset by lower sustaining capital spend. Sustaining capital1 is primarily related to capitalized waste, capital components, and tailings management. Growth capital1 is related to underground development as the Underground Main and Intrepid zones continue to advance.
- Free cash flow for the third quarter and nine months ended September 30, 2024, was $44 million and $53 million (net of stream payments) respectively, an increase compared to the prior-year periods primarily due to an increase in revenue from higher gold prices, partially offset by higher growth capital spend.
- At Rainy River, first development ore was mined from Underground Main in late September, ahead of schedule. Underground Main contains the majority of underground mineral reserves at Rainy River and will be an important source of higher-grade production in the coming years to supplement mill feed from the open pit and the Intrepid underground zone. Mining of first ore follows the completion of the main fresh air raise and in-pit portal in the third quarter. With these important milestones completed, the Underground Main project is on track to commence stoping in the first half of 2025 and ramp up to an underground production rate of approximately 5,500 tonnes per day by 2027.
New Afton Mine
Operational Highlights
|
New Afton Mine |
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
Gold production (ounces)2 |
16,477 |
18,016 |
52,957 |
50,937 |
|
Gold sold (ounces)2 |
14,564 |
17,395 |
49,728 |
47,401 |
|
Copper production (Mlbs)2 |
12.6 |
13.2 |
39.5 |
35.5 |
|
Copper sold (Mlbs)2 |
11.0 |
13.0 |
36.4 |
32.5 |
|
Gold revenue, per ounce ($)3 |
2,413 |
1,823 |
2,208 |
1,827 |
|
Copper revenue, per ounce ($)3 |
3.98 |
3.57 |
3.97 |
3.65 |
|
Average realized gold price, per ounce ($)1 |
2,536 |
1,932 |
2,330 |
1,948 |
|
Average realized copper price, per pound ($)1 |
4.18 |
3.78 |
4.19 |
3.89 |
|
Operating expenses ($/oz gold, co-product)3 |
709 |
718 |
730 |
769 |
|
Operating expenses ($/lb copper, co-product)3 |
2.18 |
2.24 |
2.33 |
2.61 |
|
Depreciation and depletion ($/ounce) |
864 |
1,077 |
1,078 |
1,042 |
|
Cash costs per gold ounce sold (by-product basis) ($/ounce)1 |
(583) |
(206) |
(401) |
145 |
|
Cash costs per gold ounce sold ($/ounce,co-product)1 |
775 |
786 |
799 |
844 |
|
Cash costs per copper pound sold ($/pound, co-product)1 |
2.39 |
2.46 |
2.55 |
2.87 |
|
All-in sustaining costs per gold ounce sold (by-product basis) ($/ounce)1 |
(408) |
223 |
(195) |
502 |
|
All-in sustaining costs per gold ounce sold ($/ounce, co-product)1 |
828 |
915 |
861 |
951 |
|
All-in sustaining costs per copper pound sold ($/pound, co-product)1 |
2.55 |
2.86 |
2.74 |
3.23 |
|
Sustaining capital ($M)1 |
1.9 |
6.7 |
7.7 |
14.8 |
|
Growth capital ($M)1 |
28.7 |
31.7 |
86.8 |
94.3 |
|
Total capital ($M) |
30.6 |
38.4 |
94.5 |
109.1 |
Operating Key Performance Indicators
|
New Afton Mine |
Q3 2024 |
Q3 2023 |
9M 2024 |
9M 2023 |
|
New Afton Mine Only |
||||
|
Tonnes mined per day (ore and waste) |
9,614 |
9,790 |
10,188 |
9,716 |
|
Tonnes milled per calendar day |
11,302 |
8,651 |
10,851 |
8,326 |
|
Gold grade milled (g/t) |
0.57 |
0.72 |
0.62 |
0.69 |
|
Gold recovery (%) |
86 |
90 |
88 |
89 |
|
Copper grade milled (%) |
0.62 |
0.80 |
0.67 |
0.77 |
|
Copper recovery (%) |
88 |
91 |
90 |
91 |
|
Gold production (ounces) |
16,283 |
17,255 |
52,241 |
46,694 |
|
Copper production (Mlbs) |
12.6 |
13.2 |
39.5 |
35.5 |
|
Ore Purchase Agreements4 |
||||
|
Gold production (ounces) |
195 |
761 |
716 |
4,243 |
- Third quarter production was 16,477 ounces of gold (inclusive of ore purchase agreements) and 12.6 million pounds of copper. For the nine months ended September 30, 2024, gold production was 52,957 ounces (inclusive of ore purchase agreements) and copper production was 39.5 million pounds. Third quarter production decreased over the prior year period due to lower grade and recovery. For the nine months ended September 30, 2024, the increase in gold and copper production over the prior-year period is due to higher tonnes processed, partially offset by lower grade and recovery.
- Operating expenses per gold ounce sold and per copper pound sold for the third quarter decreased over the prior-year period due to lower underground mining cost in the third quarter. Operating expenses per gold ounce sold and per copper pound sold for the nine months ended September 30, 2024, decreased over the prior-year period due to lower underground mining cost and higher gold and copper sales volumes.
- All-in sustaining costs1 per gold ounce sold (by-product basis) for the third quarter and nine months ended September 30, 2024, decreased over the prior-year periods due to the benefit of higher by-product revenues, lower operating expenses, and lower sustaining capital spend.
- Total capital decreased over the prior-year periods, primarily due to lower sustaining and growth capital1 spend. Sustaining capital1 primarily related to tailings management and stabilization activities. Growth capital primarily related to the C-Zone underground mine development and cave construction.
- Free cash flow1 for the third quarter and nine months ended September 30, 2024, was $19 million and $31 million, respectively, a significant improvement over the prior-year periods primarily due to higher revenue and lower overall capital spend.
- C-Zone, New Afton’s fourth block cave, has achieved commercial production ahead of schedule with the materials handling system coming online in October and the cave footprint reaching the targeted hydraulic radius for self-cave propagation. Installation of the gyratory crusher and conveyor system was completed ahead of schedule and C-Zone is now set up for high capacity, low-cost, low-emission ore transportation for the life-of-mine. Additionally, construction of the C-Zone cave footprint has reached the targeted 18 draw bells for hydraulic radius. These two milestones are expected to have an immediate positive impact on unit operating costs and ultimately facilitate a ramp-up to previously achieved processing rates of more than 14,500 tonnes per day by 2026.
Third Quarter 2024 Conference Call and Webcast
The Company will host a webcast and conference call tomorrow, Wednesday, October 30, 2024 at 8:30 am Eastern Time to discuss the Company’s third quarter consolidated results.
- Participants may listen to the webcast by registering on our website at www.newgold.com or via the following link https://app.webinar.net/xPwpa23nj6B
- Participants may also listen to the conference call by calling North American toll free 1-888-510-2154, or 1-437-900-0527 outside of the U.S. and Canada, passcode 45265.
- To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3TCTEZb to receive an instant automated call back.
- A recorded playback of the conference call will be available until November 30, 2024 by calling North American toll free 1-888-660-6345, or 1-289-819-1450 outside of the U.S. and Canada, passcode 45265. An archived webcast will also be available at www.newgold.com.
About New Gold
New Gold is a Canadian-focused intermediate mining Company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. New Gold’s vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility. For further information on the Company, visit www.newgold.com.
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Endnotes |
|
|
1. |
“Cash costs per gold ounce sold”, “all-in sustaining costs (AISC) per gold ounce sold”, “adjusted net earnings/(loss)”, “adjusted tax expense”, “sustaining capital and sustaining leases”, “growth capital”, “cash generated from operations before changes in non-cash operating working capital”, “free cash flow”, and “average realized gold/copper price per ounce/pound” are all non-GAAP financial performance measures that are used in this news release. These measures do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information about these measures, why they are used by the Company, and a reconciliation to the most directly comparable measure under IFRS, see the “Non-GAAP Financial Performance Measures” section of this news release. |
|
2. |
Production is shown on a total contained basis while sales are shown on a net payable basis, including final product inventory and smelter payable adjustments, where applicable. |
|
3. |
These are supplementary financial measures which are calculated as follows: “revenue per ounce and pound sold” is total revenue divided by total gold ounces sold and copper pounds sold, “Operating expenses per gold ounce sold” is total operating expenses divided by total gold ounces sold; “depreciation and depletion per gold ounce sold” is total depreciation and depletion divided by total gold ounces sold; and “operating expenses ($/oz gold, co-product)” and “operating expenses ($/lb copper, co-product)” is operating expenses apportioned to each metal produced on a percentage of activity basis, and subsequently divided by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. |
|
4. |
Key performance indicator data is inclusive of ounces from ore purchase agreements for New Afton. The New Afton Mine purchases small amounts of ore from local operations, subject to certain grade and other criteria. During the quarter these ounces represented approximately 1% of total gold ounces produced using New Afton’s excess mill capacity. All other ounces are mined and produced at New Afton. |
Non-GAAP Financial Performance Measures
Cash Costs per Gold Ounce Sold
“Cash costs per gold ounce sold” is a common non-GAAP financial performance measure used in the gold mining industry but does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold reports cash costs on a sales basis and not on a production basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, this measure, along with sales, is a key indicator of the Company’s ability to generate operating earnings and cash flow from its mining operations. This measure allows investors to better evaluate corporate performance and the Company’s ability to generate liquidity through operating cash flow to fund future capital exploration and working capital needs.
This measure is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of cash generated from operations under IFRS or operating costs presented under IFRS.
Cash cost figures are calculated in accordance with a standard developed by The Gold Institute, a worldwide association of suppliers of gold and gold products that ceased operations in 2002. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Cash costs include mine site operating costs such as mining, processing and administration costs, royalties, and production taxes, but are exclusive of amortization, reclamation, capital and exploration costs and net of by-product revenue. Cash costs are then divided by gold ounces sold to arrive at the cash costs per gold ounce sold.
The Company produces copper and silver as by-products of its gold production. The calculation of total cash costs per gold ounce for Rainy River is net of by-product silver sales revenue, and the calculation of total cash costs per gold ounce sold for New Afton is net of by-product copper sales revenue. New Gold notes that in connection with New Afton, the copper by-product revenue is sufficiently large to result in a negative total cash cost on a single mine basis. Notwithstanding this by-product contribution, as a Company focused on gold production, New Gold aims to assess the economic results of its operations in relation to gold, which is the primary driver of New Gold’s business. New Gold believes this metric is of interest to its investors, who invest in the Company primarily as a gold mining Company. To determine the relevant costs associated with gold only, New Gold believes it is appropriate to reflect all operating costs, as well as any revenue related to metals other than gold that are extracted in its operations.
To provide additional information to investors, New Gold has also calculated total cash costs on a co-product basis, which removes the impact of other metal sales that are produced as a by-product of gold production and apportions the cash costs to each metal produced on a percentage of revenue basis, and subsequently divides the amount by the total gold ounces, silver ounces or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. Unless indicated otherwise, all total cash cost information is net of by-product sales.
Sustaining Capital and Sustaining Leases
“Sustaining capital” and “sustaining lease” are non-GAAP financial performance measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold defines “sustaining capital” as net capital expenditures that are intended to maintain operation of its gold producing assets. Similarly, a “sustaining lease” is a lease payment that is sustaining in nature. To determine “sustaining capital” expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially increase production. Management uses “sustaining capital” and “sustaining lease” to understand the aggregate net result of the drivers of all-in sustaining costs other than cash costs. These measures are intended to provide additional information only and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS.
Growth Capital
“Growth capital” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold considers non-sustaining capital costs to be “growth capital”, which are capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially increase production. To determine “growth capital” expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are capital expenditures that are intended to maintain operation of its gold producing assets. Management uses “growth capital” to understand the cost to develop new operations or related to major projects at existing operations where these projects will materially increase production. This measure is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
All-In Sustaining Costs (AISC) per Gold Ounce Sold
“All-in sustaining costs per gold ounce sold” (“AISC”) is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold calculates “all-in sustaining costs per gold ounce sold” based on guidance announced by the World Gold Council (“WGC”) in September 2013. The WGC is a non-profit association of the world’s leading gold mining companies established in 1987 to promote the use of gold to industry, consumers and investors. The WGC is not a regulatory body and does not have the authority to develop accounting standards or disclosure requirements. The WGC has worked with its member companies to develop a measure that expands on IFRS measures to provide visibility into the economics of a gold mining company. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. New Gold believes that “all-in sustaining costs per gold ounce sold” provides further transparency into costs associated with producing gold and will assist analysts, investors, and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value. In addition, the Human Resources and Compensation Committee of the Board of Directors uses “all-in sustaining costs”, together with other measures, in its Company scorecard to set incentive compensation goals and assess performance.
“All-in sustaining costs per gold ounce sold” is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other mining companies. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
New Gold defines all-in sustaining costs per gold ounce sold as the sum of cash costs, net capital expenditures that are sustaining in nature, corporate general and administrative costs, sustaining leases, capitalized and expensed exploration costs that are sustaining in nature, and environmental reclamation costs, all divided by the total gold ounces sold to arrive at a per ounce figure. To determine sustaining capital expenditures, New Gold uses cash flow related to mining interests from its unaudited condensed interim consolidated statement of cash flows and deducts any expenditures that are non-sustaining (growth). Capital expenditures to develop new operations or capital expenditures related to major projects at existing operations where these projects will materially benefit the operation are classified as growth and are excluded. The definition of sustaining versus non-sustaining is similarly applied to capitalized and expensed exploration costs. Exploration costs to develop new operations or that relate to major projects at existing operations where these projects are expected to materially benefit the operation are classified as non-sustaining and are excluded.
Costs excluded from all-in sustaining costs per gold ounce sold are non-sustaining capital expenditures, non-sustaining lease payments and exploration costs, financing costs, tax expense, and transaction costs associated with mergers, acquisitions and divestitures, and any items that are deducted for the purposes of adjusted earnings.
To provide additional information to investors, the Company has also calculated all-in sustaining costs per gold ounce sold on a co-product basis for New Afton, which removes the impact of other metal sales that are produced as a by-product of gold production and apportions the all-in sustaining costs to each metal produced on a percentage of revenue basis, and subsequently divides the amount by the total gold ounces, or pounds of copper sold, as the case may be, to arrive at per ounce or per pound figures. By including cash costs as a component of all-in sustaining costs, the measure deducts by-product revenue from gross cash costs.
The following tables reconcile the above non-GAAP measures to the most directly comparable IFRS measure on an aggregate and mine-by-mine basis.
Cash Costs and All-in Sustaining Costs per Gold Ounce Reconciliation Tables
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
CONSOLIDATED CASH COST AND AISC RECONCILIATION |
||||
|
Operating expenses |
107.6 |
107.5 |
323.9 |
329.6 |
|
Treatment and refining charges on concentrate sales |
4.1 |
4.7 |
14.1 |
13.7 |
|
By-product silver revenue |
(5.0) |
(3.3) |
(13.7) |
(10.0) |
|
By-product copper revenue |
(46.1) |
(49.2) |
(152.4) |
(126.4) |
|
Total cash cost1 |
60.6 |
59.8 |
172.0 |
206.9 |
|
Gold ounces sold2 |
81,791 |
79,821 |
219,565 |
241,247 |
|
Cash costs per gold ounce sold (by-product basis)1 |
741 |
749 |
783 |
858 |
|
Sustaining capital expenditures1 |
19.8 |
35.6 |
77.2 |
97.5 |
|
Sustaining exploration – expensed |
0.1 |
0.3 |
0.3 |
0.7 |
|
Sustaining leases1 |
0.1 |
1.5 |
1.9 |
7.7 |
|
Corporate G&A including share-based compensation |
14.3 |
6.2 |
29.5 |
20.1 |
|
Reclamation expenses |
2.9 |
3.1 |
8.3 |
9.3 |
|
Total all-in sustaining costs1 |
97.8 |
106.4 |
289.1 |
342.1 |
|
Gold ounces sold2 |
81,791 |
79,821 |
219,565 |
241,247 |
|
All-in sustaining costs per gold ounce sold (by-product basis)1 |
1,195 |
1,333 |
1,317 |
1,418 |
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
RAINY RIVER CASH COSTS AND AISC RECONCILIATION |
||||
|
Operating expenses |
73.2 |
65.9 |
203.0 |
208.1 |
|
By-product silver revenue |
(4.1) |
(2.5) |
(11.1) |
(8.1) |
|
Total cash costs net of by-product revenue |
69.1 |
63.4 |
191.9 |
200.0 |
|
Gold ounces sold2 |
67,228 |
62,426 |
169,837 |
193,846 |
|
Cash costs per gold ounce sold (by-product basis)1 |
1,028 |
1,015 |
1,130 |
1,032 |
|
Sustaining capital expenditures1 |
17.9 |
28.7 |
69.5 |
82.6 |
|
Sustaining leases1 |
0.0 |
1.3 |
1.0 |
7.2 |
|
Reclamation expenses |
2.2 |
2.4 |
6.3 |
7.3 |
|
Total all-in sustaining costs1 |
89.2 |
95.8 |
268.7 |
297.1 |
|
Gold ounces sold2 |
67,228 |
62,426 |
169,837 |
193,846 |
|
All-in sustaining costs per gold ounce sold (by-product basis)1 |
1,327 |
1,535 |
1,582 |
1,532 |
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
NEW AFTON CASH COSTS AND AISC RECONCILIATION |
||||
|
Operating expenses |
34.4 |
41.6 |
120.9 |
121.5 |
|
Treatment and refining charges on concentrate sales |
4.1 |
4.7 |
14.1 |
13.7 |
|
By-product silver revenue |
(0.8) |
(0.7) |
(2.6) |
(1.9) |
|
By-product copper revenue |
(46.1) |
(49.2) |
(152.4) |
(126.4) |
|
Total cash costs net of by-product revenue |
(8.5) |
(3.6) |
(19.9) |
6.9 |
|
Gold ounces sold2 |
14,564 |
17,395 |
49,728 |
47,401 |
|
Cash costs per gold ounce sold (by-product basis)1 |
(583) |
(206) |
(401) |
145 |
|
Sustaining capital expenditures1 |
1.9 |
6.7 |
7.7 |
14.8 |
|
Sustaining leases1 |
0.0 |
0.1 |
0.5 |
0.1 |
|
Reclamation expenses |
0.6 |
0.7 |
2.0 |
2.0 |
|
Total all-in sustaining costs1 |
(5.9) |
3.9 |
(9.7) |
23.8 |
|
Gold ounces sold2 |
14,564 |
17,395 |
49,728 |
47,401 |
|
All-in sustaining costs per gold ounce sold (by-product basis)1 |
(408) |
223 |
(195) |
502 |
|
Three months ended September 30, 2024 |
||||||
|
(in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Total |
|||
|
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) |
||||||
|
Operating expenses |
10.3 |
24.1 |
34.4 |
|||
|
Units of metal sold |
14,564 |
11.0 |
||||
|
Operating expenses ($/oz gold or lb copper sold, co-product)3 |
709 |
2.18 |
||||
|
Treatment and refining charges on concentrate sales |
1.2 |
2.9 |
4.1 |
|||
|
By-product silver revenue |
(0.3) |
(0.6) |
(0.8) |
|||
|
Cash costs (co-product)3 |
11.3 |
26.4 |
37.6 |
|||
|
Cash costs per gold ounce sold or lb copper sold (co-product)3 |
775 |
2.39 |
||||
|
Sustaining capital expendituresI |
0.6 |
1.4 |
1.9 |
|||
|
Sustaining leases |
0.0 |
0.0 |
0.0 |
|||
|
Reclamation expenses |
0.2 |
0.4 |
0.6 |
|||
|
All-in sustaining costs (co-product)2 |
12.1 |
28.1 |
40.2 |
|||
|
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 |
828 |
2.55 |
||||
|
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
||||||
|
Three months ended September 30, 2023 |
||||||
|
(in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Total |
|||
|
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) |
||||||
|
Operating expenses |
12.5 |
29.1 |
41.6 |
|||
|
Units of metal sold |
17,395 |
13.0 |
||||
|
Operating expenses ($/oz gold or lb copper sold, co-product)3 |
718 |
2.24 |
||||
|
Treatment and refining charges on concentrate sales |
1.4 |
3.3 |
4.7 |
|||
|
By-product silver revenue |
(0.2) |
(0.5) |
(0.7) |
|||
|
Cash costs (co-product)3 |
13.7 |
31.9 |
45.6 |
|||
|
Cash costs per gold ounce sold or lb copper sold (co-product)3 |
786 |
2.46 |
||||
|
Sustaining capital expendituresI |
2.0 |
4.7 |
6.7 |
|||
|
Reclamation expenses |
0.2 |
0.5 |
0.7 |
|||
|
All-in sustaining costs (co-product)2 |
15.9 |
37.1 |
53.0 |
|||
|
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 |
915 |
2.86 |
||||
|
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
||||||
|
Nine months ended September 30, 2024 |
||||||
|
(in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Total |
|||
|
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) |
||||||
|
Operating expenses |
36.3 |
84.7 |
120.9 |
|||
|
Units of metal sold |
49,728 |
36.4 |
||||
|
Operating expenses ($/oz gold or lb copper sold, co-product)3 |
730 |
2.33 |
||||
|
Treatment and refining charges on concentrate sales |
4.2 |
9.9 |
14.1 |
|||
|
By-product silver revenue |
(0.8) |
(1.8) |
(2.6) |
|||
|
Cash costs (co-product)3 |
39.7 |
92.7 |
132.4 |
|||
|
Cash costs per gold ounce sold or lb copper sold (co-product)3 |
799 |
2.55 |
||||
|
Sustaining capital expendituresI |
2.3 |
5.4 |
7.7 |
|||
|
Sustaining leases |
0.1 |
0.3 |
0.4 |
|||
|
Reclamation expenses |
0.6 |
1.4 |
2.0 |
|||
|
All-in sustaining costs (co-product)2 |
42.8 |
99.8 |
142.6 |
|||
|
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 |
861 |
2.74 |
||||
|
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
||||||
|
Nine months ended September 30, 2023 |
||||||
|
(in millions of U.S. dollars, except where noted) |
Gold |
Copper |
Total |
|||
|
NEW AFTON CASH COST AND AISC RECONCILIATION (ON A CO-PRODUCT BASIS) |
||||||
|
Operating expenses |
36.5 |
85.1 |
121.5 |
|||
|
Units of metal sold |
47,401 |
32.5 |
||||
|
Operating expenses ($/oz gold or lb copper sold, co-product)3 |
769 |
2.61 |
||||
|
Treatment and refining charges on concentrate sales |
4.1 |
9.6 |
13.7 |
|||
|
By-product silver revenue |
(0.6) |
(1.3) |
(1.9) |
|||
|
Cash costs (co-product)3 |
40.0 |
93.3 |
133.3 |
|||
|
Cash costs per gold ounce sold or lb copper sold (co-product)3 |
844 |
2.87 |
||||
|
Sustaining capital expendituresI |
4.4 |
10.4 |
14.8 |
|||
|
Reclamation expenses |
0.6 |
1.4 |
2.0 |
|||
|
All-in sustaining costs (co-product)2 |
45.1 |
105.2 |
150.2 |
|||
|
All-in sustaining costs per gold ounce sold or lb copper sold (co-product)2 |
951 |
3.23 |
||||
|
I Apportioned to each metal produced on a percentage of activity basis. For the above reconciliation table, 30% of operating costs were attributed to gold production and 70% of operating costs were attributed to copper production. |
||||||
Sustaining Capital Expenditures Reconciliation Table
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
TOTAL SUSTAINING CAPITAL EXPENDITURES |
||||
|
Mining interests per consolidated statement of cash flows |
62.5 |
70.6 |
195.8 |
205.3 |
|
New Afton growth capital expenditures1 |
(28.7) |
(31.7) |
(86.8) |
(94.3) |
|
Rainy River growth capital expenditures1 |
(14.0) |
(3.3) |
(31.8) |
(13.5) |
|
Sustaining capital expenditures1 |
19.8 |
35.6 |
77.2 |
97.5 |
Adjusted Net Earnings/(Loss) and Adjusted Net Earnings per Share
“Adjusted net earnings” and “adjusted net earnings per share” are non-GAAP financial performance measures that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. “Adjusted net earnings” and “adjusted net earnings per share” exclude “other gains and losses” as per Note 3 of the Company’s unaudited condensed interim consolidated financial statements; and loss on redemption of long-term debt. Net earnings have been adjusted, including the associated tax impact, for the group of costs in “Other gains and losses” on the unaudited condensed interim consolidated income statements. Key entries in this grouping are: fair value changes for the Rainy River gold stream obligation, fair value changes and gain on the disposal of the New Afton free cash flow interest obligation, foreign exchange gains/loss and fair value changes in investments. The income tax adjustments reflect the tax impact of the above adjustments and is referred to as “adjusted tax expense”.
The Company uses “adjusted net earnings” for its own internal purposes. Management’s internal budgets and forecasts and public guidance do not reflect the items which have been excluded from the determination of “adjusted net earnings”. Consequently, the presentation of “adjusted net earnings” enables investors to better understand the underlying operating performance of the Company’s core mining business through the eyes of management. Management periodically evaluates the components of “adjusted net earnings” based on an internal assessment of performance measures that are useful for evaluating the operating performance of New Gold’s business and a review of the non-GAAP financial performance measures used by mining industry analysts and other mining companies. “Adjusted net earnings” and “adjusted net earnings per share” are intended to provide additional information only and should not be considered in isolation or as substitutes for measures of performance prepared in accordance with IFRS. These measures are not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following table reconciles these non-GAAP financial performance measures to the most directly comparable IFRS measure.
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
ADJUSTED NET EARNINGS (LOSS) RECONCILIATION |
||||
|
Income (loss) before taxes |
36.1 |
4.9 |
18.6 |
(28.4) |
|
Other losses |
29.1 |
20.3 |
84.6 |
84.6 |
|
Adjusted net earnings before taxes |
65.2 |
25.2 |
103.2 |
56.2 |
|
Income tax recovery (expense) |
1.8 |
(7.6) |
28.9 |
(8.7) |
|
Income tax adjustments |
(2.7) |
5.5 |
(37.8) |
5.6 |
|
Adjusted income tax expense1 |
(0.9) |
(2.1) |
(8.9) |
(3.1) |
|
Adjusted net earnings1 |
64.3 |
23.1 |
94.3 |
53.1 |
|
Adjusted net earnings per share (basic and diluted)1 |
0.08 |
0.03 |
0.13 |
0.08 |
Cash Generated from Operations, before Changes in Non-Cash Operating Working Capital
“Cash generated from operations, before changes in non-cash operating working capital” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Other companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by other companies. “Cash generated from operations, before changes in non-cash operating working capital” excludes changes in non-cash operating working capital. New Gold believes this non-GAAP financial measure provides further transparency and assists analysts, investors and other stakeholders of the Company in assessing the Company’s ability to generate cash from its operations before temporary working capital changes.
Cash generated from operations, before non-cash changes in working capital is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following table reconciles this non-GAAP financial performance measure to the most directly comparable IFRS measure.
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars) |
2024 |
2023 |
2024 |
2023 |
|
CASH RECONCILIATION |
||||
|
Cash generated from operations |
127.9 |
100.1 |
283.2 |
217.0 |
|
Change in non-cash operating working capital |
(7.9) |
(12.4) |
(0.1) |
11.5 |
|
Cash generated from operations, before changes in non-cash operating working capital1 |
120.0 |
87.7 |
283.1 |
228.5 |
Free Cash Flow
“Free cash flow” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. New Gold defines “free cash flow” as cash generated from operations and proceeds of sale of other assets less capital expenditures on mining interests, lease payments, and settlement of non-current derivative financial liabilities which include the Rainy River gold stream obligation and the New Afton free cash flow interest obligation. New Gold believes this non-GAAP financial performance measure provides further transparency and assists analysts, investors and other stakeholders of the Company in assessing the Company’s ability to generate cash flow from current operations. “Free cash flow” is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of operating profit or cash flows from operations as determined under IFRS. The following tables reconcile this non-GAAP financial performance measure to the most directly comparable IFRS measure on an aggregate and mine-by-mine basis.
|
Three months ended September 30, 2024 |
||||
|
(in millions of U.S. dollars) |
Rainy River |
New Afton |
Other |
Total |
|
FREE CASH FLOW RECONCILIATION |
||||
|
Cash generated from operations |
84.0 |
49.9 |
(6.0) |
127.9 |
|
Less Mining interest capital expenditures |
(32.0) |
(30.6) |
— |
(62.6) |
|
Add Proceeds of sale from other assets |
— |
— |
— |
— |
|
Less Lease payments |
— |
— |
(0.1) |
(0.1) |
|
Less Cash settlement of non-current derivative financial liabilities |
(8.2) |
— |
— |
(8.2) |
|
Free Cash Flow1 |
43.8 |
19.3 |
(6.1) |
57.0 |
|
Three months ended September 30, 2023 |
||||
|
(in millions of U.S. dollars) |
Rainy River |
New Afton |
Other |
Total |
|
FREE CASH FLOW RECONCILIATION |
||||
|
Cash generated from operations |
54.7 |
43.5 |
1.8 |
100.1 |
|
Less Mining interest capital expenditures |
(32.0) |
(38.4) |
(0.1) |
(70.5) |
|
Add Proceeds of sale from other assets |
— |
— |
— |
— |
|
Less Lease payments |
(1.3) |
— |
(0.1) |
(1.4) |
|
Less Cash settlement of non-current derivative financial liabilities |
(6.6) |
— |
— |
(6.6) |
|
Free Cash Flow1 |
14.8 |
5.1 |
1.6 |
21.6 |
|
Nine months ended September 30, 2024 |
||||
|
(in millions of U.S. dollars) |
Rainy River |
New Afton |
Other |
Total |
|
FREE CASH FLOW RECONCILIATION |
||||
|
Cash generated from operations |
178.4 |
125.6 |
(20.8) |
283.2 |
|
Less Mining interest capital expenditures |
(101.3) |
(94.5) |
— |
(195.8) |
|
Add Proceeds of sale from other assets |
— |
0.2 |
— |
0.2 |
|
Less Lease payments |
(0.9) |
(0.5) |
(0.5) |
(1.9) |
|
Less Cash settlement of non-current derivative financial liabilities |
(22.9) |
— |
— |
(22.9) |
|
Free Cash Flow1 |
53.3 |
30.8 |
(21.3) |
62.8 |
|
Nine months ended September 30, 2023 |
||||
|
(in millions of U.S. dollars) |
Rainy River |
New Afton |
Other |
Total |
|
FREE CASH FLOW RECONCILIATION |
||||
|
Cash generated from operations |
156.0 |
76.0 |
(15.0) |
217.0 |
|
Less Mining interest capital expenditures |
(96.1) |
(109.1) |
(0.1) |
(205.3) |
|
Add Proceeds of sale from other assets |
0.1 |
— |
— |
0.1 |
|
Less Lease payments |
(7.2) |
(0.1) |
(0.4) |
(7.7) |
|
Less Cash settlement of non-current derivative financial liabilities |
(21.4) |
— |
— |
(21.4) |
|
Free Cash Flow1 |
31.4 |
(33.2) |
(15.5) |
(17.3) |
Average Realized Price
“Average realized price per gold ounce or per copper pound sold” is a non-GAAP financial performance measure that does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Other companies may calculate this measure differently and this measure is unlikely to be comparable to similar measures presented by other companies. Management uses this measure to better understand the price realized for gold sales in each reporting period. “Average realized price per ounce of gold sold or copper pound sold” is intended to provide additional information only and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following tables reconcile this non-GAAP financial performance measure to the most directly comparable IFRS measure on an aggregate and mine-by-mine basis.
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
TOTAL AVERAGE REALIZED PRICE |
||||
|
Revenue from gold sales |
203.3 |
151.7 |
504.3 |
458.9 |
|
Treatment and refining charges on gold concentrate sales |
1.8 |
1.9 |
6.0 |
5.8 |
|
Gross revenue from gold sales |
205.1 |
153.6 |
510.3 |
464.7 |
|
Gold ounces sold |
81,791 |
79,821 |
219,565 |
241,247 |
|
Total average realized price per gold ounce sold ($/ounce)1 |
2,507 |
1,924 |
2,324 |
1,926 |
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
RAINY RIVER AVERAGE REALIZED PRICE |
||||
|
Revenue from gold sales |
168.1 |
120.0 |
394.5 |
372.3 |
|
Gold ounces sold |
67,228 |
62,426 |
169,837 |
193,846 |
|
Rainy River average realized price per gold ounce sold ($/ounce)1 |
2,501 |
1,921 |
2,323 |
1,920 |
|
Three months ended September 30 |
Nine months ended September 30 |
|||
|
(in millions of U.S. dollars, except where noted) |
2024 |
2023 |
2024 |
2023 |
|
NEW AFTON AVERAGE REALIZED PRICE |
||||
|
Revenue from gold sales |
35.1 |
31.7 |
109.8 |
86.6 |
|
Treatment and refining charges on gold concentrate sales |
1.8 |
1.9 |
6.0 |
5.7 |
|
Gross revenue from gold sales |
36.9 |
33.6 |
115.8 |
92.3 |
|
Gold ounces sold |
14,564 |
17,395 |
49,728 |
47,401 |
|
New Afton average realized price per gold ounce sold ($/ounce)1 |
2,536 |
1,932 |
2,330 |
1,948 |
For additional information with respect to the non-GAAP measures used by the Company, refer to the detailed “Non-GAAP Financial Performance Measure” section disclosure in the MD&A for the three and nine months ended September 30, 2024 filed on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
Cautionary Note Regarding Forward-Looking Statements
Certain information contained in this news release, including any information relating to New Gold’s future financial or operating performance are “forward-looking”. All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New Gold expects to occur are “forward-looking statements”. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “targeted”, “estimates”, “forecasts”, “intends”, “anticipates”, “projects”, “potential”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation of such terms. Forward-looking statements in this news release include, among others, statements with respect to: the Company’s expectations and guidance with respect to production, costs, capital investment and expenses on a mine-by-mine and consolidated basis, associated timing and successfully accomplishing the factors contributing to those expectations; expectations regarding the fourth quarter of 2024 being the strongest quarter of the year; successfully generating sustaining free cash flow beyond 2030; successfully delivering on the Company’s guidance targets, consolidated operational outlook and operational objectives and continuing to leverage the current metal price environment; continuing to successfully manage costs and offset the lower production financial impact at Rainy River; expectations regarding the fourth quarter having the most exploration metres drilled in 2024; successfully updating the Company’s Mineral Reserves and Resources in early 2025; expectations regarding exploration results having a positive impact on Rainy River’s mineral resource estimate at year-end and successfully forming the basis of additional exploration opportunities in the coming years; planned activities in 2024 and future years at the Rainy River Mine and New Afton Mine, including planned development and exploration activities, and projected accuracy of timing and related expenses; expectations regarding depreciation expenses in the fourth quarter being in-line with the first half of 2024; expectations regarding Underground Main being an important source of higher-grade production in the coming years; successfully commencing stoping in the first half of 2025 for the Underground Main project and ramping up underground production rate to approximately 5,500 tonnes per day by 2027; successfully achieving high-capacity, low-cost, low-emission ore transportation for the life-of-mine at C-Zone; successfully achieving the expected immediate positive impacts on unit operating costs, production and processing rates resulting from achieving the noted C-Zone milestones; and successfully achieving processing rates of more than 14,500 tonnes per day by 2026 at New Afton.
All forward-looking statements in this news release are based on the opinions and estimates of management as of the date such statements are made and are subject to important risk factors and uncertainties, many of which are beyond New Gold’s ability to control or predict. Certain material assumptions regarding such forward-looking statements are discussed in this news release, its most recent Annual Information Form and NI 43-101 Technical Reports on the Rainy River Mine and New Afton Mine filed on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. In addition to, and subject to, such assumptions discussed in more detail elsewhere, the forward-looking statements in this news release are also subject to the following assumptions: (1) there being no significant disruptions affecting New Gold’s operations, including material disruptions to the Company’s supply chain, workforce or otherwise; (2) political and legal developments in jurisdictions where New Gold operates, or may in the future operate, being consistent with New Gold’s current expectations; (3) the accuracy of New Gold’s current Mineral Reserve and Mineral Resource estimates and the grade of gold, silver and copper expected to be mined; (4) the exchange rate between the Canadian dollar and U.S. dollar, and commodity prices being approximately consistent with current levels and expectations for the purposes of 2024 guidance and otherwise; (5) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (6) equipment, labour and materials costs increasing on a basis consistent with New Gold’s current expectations; (7) arrangements with First Nations and other Indigenous groups in respect of the New Afton Mine and Rainy River Mine being consistent with New Gold’s current expectations; (8) all required permits, licenses and authorizations being obtained from the relevant governments and other relevant stakeholders within the expected timelines and the absence of material negative comments or obstacles during the applicable regulatory processes; and (9) the results of the life of mine plans for the Rainy River Mine and the New Afton Mine being realized.
Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Such factors include, without limitation: price volatility in the spot and forward markets for metals and other commodities; discrepancies between actual and estimated production, between actual and estimated costs, between actual and estimated Mineral Reserves and Mineral Resources and between actual and estimated metallurgical recoveries; equipment malfunction, failure or unavailability; accidents; risks related to early production at the Rainy River Mine, including failure of equipment, machinery, the process circuit or other processes to perform as designed or intended; the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to: uncertainties and unanticipated delays associated with obtaining and maintaining necessary licenses, permits and authorizations and complying with permitting requirements; changes in project parameters as plans continue to be refined; changing costs, timelines and development schedules as it relates to construction; the Company not being able to complete its construction projects at the Rainy River Mine or the New Afton Mine on the anticipated timeline or at all; volatility in the market price of the Company’s securities; changes in national and local government legislation in the countries in which New Gold does or may in the future carry on business; compliance with public company disclosure obligations; controls, regulations and political or economic developments in the countries in which New Gold does or may in the future carry on business; the Company’s dependence on the Rainy River Mine and New Afton Mine; the Company not being able to complete its exploration drilling programs on the anticipated timeline or at all; inadequate water management and stewardship; tailings storage facilities and structure failures; failing to complete stabilization projects according to plan; geotechnical instability and conditions; disruptions to the Company’s workforce at either the Rainy River Mine or the New Afton Mine, or both; significant capital requirements and the availability and management of capital resources; additional funding requirements; diminishing quantities or grades of Mineral Reserves and Mineral Resources; actual results of current exploration or reclamation activities; uncertainties inherent to mining economic studies including the Technical Reports for the Rainy River Mine and New Afton Mine; impairment; unexpected delays and costs inherent to consulting and accommodating rights of First Nations and other Indigenous groups; climate change, environmental risks and hazards and the Company’s response thereto; ability to obtain and maintain sufficient insurance; actual results of current exploration or reclamation activities; fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States and, to a lesser extent, Mexico; global economic and financial conditions and any global or local natural events that may impede the economy or New Gold’s ability to carry on business in the normal course; inflation; compliance with debt obligations and maintaining sufficient liquidity; the responses of the relevant governments to any disease, epidemic or pandemic outbreak not being sufficient to contain the impact of such outbreak; disruptions to the Company’s supply chain and workforce due to any disease, epidemic or pandemic outbreak; an economic recession or downturn as a result of any disease, epidemic or pandemic outbreak that materially adversely affects the Company’s operations or liquidity position; taxation; fluctuation in treatment and refining charges; transportation and processing of unrefined products; rising costs or availability of labour, supplies, fuel and equipment; adequate infrastructure; relationships with communities, governments and other stakeholders; labour disputes; effectiveness of supply chain due diligence; the uncertainties inherent in current and future legal challenges to which New Gold is or may become a party; defective title to mineral claims or property or contests over claims to mineral properties; competition; loss of, or inability to attract, key employees; use of derivative products and hedging transactions; reliance on third-party contractors; counterparty risk and the performance of third party service providers; investment risks and uncertainty relating to the value of equity investments in public companies held by the Company from time to time; the adequacy of internal and disclosure controls; conflicts of interest; the lack of certainty with respect to foreign operations and legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law; the successful acquisitions and integration of business arrangements and realizing the intended benefits therefrom; and information systems security threats. In addition, there are risks and hazards associated with the business of mineral exploration, development, construction, operation and mining, including environmental events and hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as “Risk Factors” included in New Gold’s Annual Information Form and other disclosure documents filed on and available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Forward-looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements. All of the forward-looking statements contained in this news release are qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.
Technical Information
All scientific and technical information contained in this news release has been reviewed and approved by Yohann Bouchard, Executive Vice President and Chief Operating Officer of New Gold. Mr. Bouchard is a Professional Engineer and a member of the Professional Engineers of Ontario. Mr. Bouchard is a “Qualified Person” for the purposes of NI 43-101 Standards of Disclosure for Mineral Projects.
View original content to download multimedia:https://www.prnewswire.com/news-releases/new-gold-reports-third-quarter-2024-results-302290421.html
SOURCE New Gold Inc.
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