Bausch Health reports full-year earnings, to appoint activist investor picks to board

Bausch Health Cos. Inc. on Wednesday reported fourth-quarter and full-year results, beating Street estimates. The company also said it plans to add two directors as a result of pressure from activist investor Carl Icahn.

For the fourth quarter ended Dec. 31, sales were down slightly to $2.21 billion from $2.22 billion in the year-ago quarter. Bausch & Lomb Inc. revenues were more than half of that at $1.24 billion. Bausch Health reported a net loss for the quarter of $153 million, compared with a net loss of $1.52 billion in the same quarter last year. Adjusted net income for the quarter was $478 million, up from $404 million a year ago.

On a per-share basis, Bausch Health reported a 43-cent loss, compared with a $4.30 loss in the year-ago quarter.

For the full year, revenues were $8.03 billion, down 7 percent from $8.6 billion in fiscal 2019. Bausch & Lomb sales were $4.41 billion for the year, down from $4.74 billion in 2019. The company reported a $560 million net loss for the full year, compared with a loss of $1.79 billion in 2019. Adjusted net income for the year was $1.43 billion, compared with $1.56 billion in 2019.

Bausch Health reported a $1.58 loss per share for the year, compared with a $5.08 loss in fiscal 2019.

“Despite unprecedented business challenges resulting from the COVID-19 pandemic, I’m proud that Bausch Health finished the year strong and outperformed the high end of our latest revenue guidance range,” said Joseph Papa, Bausch Health chairman and CEO. “During the pandemic-related downturn, we focused our efforts on growing market share for key promoted products, carefully managed our expenses and continued to invest in our pipeline for future growth opportunities. We generated cash from operations of more than $1.1 billion, which helped us to repay approximately $900 million of our debt.”

The company repaid debt of $900 million in 2020 using cash generated from operations and more efficient cash management, officials noted.

“We are continuing to execute on our business recovery from the pandemic, and we are well positioned to benefit from recovery-related tailwinds and capitalize on our key growth drivers and catalysts in 2021 as we remain focused on how best to unlock value in the Company, including the planned spinoff of Bausch & Lomb,” Papa said.

Bausch Health expects full-year sales to range from $8.6 billion to $8.8 billion, with adjusted EBITDA of $3.4 billion to $3.55 billion.

Separately, the company said it will expand its board of directors to add two designees from Carl Icahn and the Icahn Group, including Icahn’s son, Brett Icahn and Steven Miller, both portfolio managers at Icahn Capital. Icahn and Miller will join the board in mid-March and will be up for re-election at the company’s annual meeting in April, officials said.

“We are pleased to have reached this agreement with the Icahn Group and welcome Messrs. B. Icahn and Miller to our board of directors,” Papa said in a statement. “Our new colleagues bring a wealth of transaction experience to our board, which will serve us well as we continue to execute on our strategic priorities, including our previously announced intention to spin off our leading eye health business. Together, we are aligned and focused on unlocking unrecognized value in Bausch Health, and we look forward to building on the significant progress we have already made in capitalizing on areas of unmet medical need, gaining market share in key growth areas and positioning our businesses to deliver long-term, sustainable value for our shareholders.”

Weeks ago, the elder Icahn — who led the charge in dismantling Xerox Holdings Corp.’s board when its previous leadership attempted to merge with FujiFilm in 2018 — disclosed that he owned a nearly 8 percent stake in the Canadian Bausch Health.

“Our discussions with Bausch Health have been productive,” Carl Icahn said. “We continue to believe there are opportunities to drive further value for all shareholders, and we look forward to collaborating with the board and management and contributing meaningfully to the company’s ongoing strategic review.”

In addition to their board appointments Icahn and Miller will be appointed to two board committees, the Finance and Transactions Committee and the committee assisting with evaluating strategic alternatives, including the potential spin off of Bausch & Lomb.

Shares of company stock Wednesday (NYSE: BHC) opened at $31.39 and by midafternoon had grown to $31.64.

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Conduent reports Q4 loss, beats Street estimates

Conduent Inc., a business process services and solutions company with a significant base in Rochester, on Thursday reported strong fourth-quarter and full-year financial results, beating Street estimates for revenues.

For the quarter ended Dec. 31, sales were down 4 percent to $1.06 billion. The company, which spun off from Xerox Holdings Corp. several years ago, reported a net loss of $11 million in the quarter, compared with a $635 million loss in the same quarter a year ago. On a per-share basis, the loss was 7 cents, compared with a $2.76 per-share loss in the fourth quarter of 2019.

Analysts had expected a 1-cent loss on sales of $1.025 billion.

“Despite a challenging macro environment, the team delivered on our financial commitments, met our clients’ needs and strengthened the operational foundation of our business. We continue to focus on improving growth, quality and efficiency by leveraging improvements across our people, processes and technology environments. During 2020, we meaningfully improved both client retention and sales performance, overachieving on our initial sales goal and delivering 94 percent new business signings growth compared with 2019,” said Conduent CEO Cliff Skelton in a statement. “We also added talent to the organization and enhanced client confidence within the year. Through the dedicated efforts of 63,000 Conduent associates, clients have rewarded us with expanded relationships, which is strong evidence that our strategy is working. While we have more hard work ahead of us, we are convinced that we will continue to drive value for our stakeholders and position Conduent for long-term success.”

The company reported strong sales performance in the fourth quarter, with $519 million in new business signings, a 148 percent increase from the fourth quarter of 2019.

For the full year, revenue was $4.16 billion, down $304 million from 2019. The 6 percent decline was driven primarily by COVID-19 impacts, officials said. Commercial and transportation segment declines were primarily driven by the pandemic. The government segment growth was driven by COVID-19, but was partially offset by a legacy contract loss.

The company reported a GAAP loss for the year of $118 million, compared with a $1.93 billion loss in fiscal 2019. On a per-share basis, the full-year loss was 61 cents, compared with a loss of $9.29 in 2019.

“We performed well in 2020, with results at or exceeding the top-end of the initial guidance ranges that we provided in February 2020. Our efficiency improvements positively impacted margins. Adjusted Free Cash Flow was particularly strong for 2020 and we ended the year with a strong balance sheet,” said company CFO Brian Webb-Walsh. “We remain confident in our 2021 game plan and the progress we are making in positioning the company for top-line growth.”

Shares of company stock (Nasdaq: CNDT) dropped to less than $5 per share Friday, but have rebounded slightly to $5.09 per share in heavy volume Monday.

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Seneca Foods shares soar on impressive third-quarter earnings

Seneca Foods Corp. on Wednesday posted a nearly 300 percent increase in third-quarter earnings and a 23 percent improvement in sales.

For the quarter ended Dec. 26, 2020, the Wayne County manufacturer reported revenue of $484.4 million, up from $393 million in the year-ago quarter. Net income was $72.4 million, up from $25.4 million a year ago. On a per-share basis, diluted earnings were $7.90 for the quarter, compared with $2.73 in the third quarter last year.

Paul Palmby
Paul Palmby

“Our results for the quarter reflect the gain on sale of our prepared foods business as well as continued strong sales in our core business. I remain humbled by the dedication of all of our loyal employees during the pandemic as we continue to help do our part in meeting customer needs with our products,” said President and CEO Paul Palmby.

Gross margin percentage increased from 13.3 percent to 16.0 percent compared with the prior year three months due to higher selling prices and higher sales volume in the third quarter of 2021.

With headquarters in the Wayne County town of Marion, Seneca Foods provides packaged fruits and vegetables, sold under the brands of Libby’s, Aunt Nellie’s, Green Valley, CherryMan, READ and Seneca labels, including Seneca snack chips.

Shares of company stock (Nasdaq: SENEB) soared some 15 percent Thursday to $42.87.

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Ultralife grows sales to nine-year high

Newark’s Ultralife Corp. on Thursday reported a drop in fourth-quarter sales, but an improvement in its bottom line.

For the quarter ended Dec. 31, revenue was $29 million, a nearly 7 percent decline from $31 million in the fourth quarter last year. Net income was $2.1 million, or 13 cents per diluted share on a GAAP basis, compared with $1.6 million, or 10 cents per diluted share for the fourth quarter of 2019. Adjusted earnings were 17 cents, up from 13 cents in the year-ago quarter.

Michael D. Popielec
Michael D. Popielec

“Fourth-quarter operating results were in line with our internal expectations and reflect the continuing negative economic impact of the global pandemic, including oil and gas market sluggishness. Battery & Energy Products medical sales were up 94 percent and government/defense sales were up 19 percent, yet these were offset by reductions in oil and gas and Communications Systems sales. During the quarter, we also recognized a $1.6 million gain upon resolution of Ultralife’s claim in a class-action lawsuit,” said Ultralife President and CEO Michael Popielec.

For the full year, sales were $107.7 million, compared with $106.8 million in fiscal 2019. Net income was $5.23 million, up slightly from $5.2 million in the previous year. On a per-share basis, diluted earnings were 33 cents, compared with 32 cents in 2019.

“Notwithstanding the unprecedented challenges we faced during 2020, results for the year demonstrate the resiliency of our business model, the efficacy of our end-market diversification strategy and the strength of our balance sheet. We grew total year sales to the highest level in nine years, sustained profitability, generated operating cash flow and repaid nearly all of the SWE acquisition-related debt,” Popielec said. “While the outlook for demand in our end markets is less visible than we would like, we will remain focused on what we can control: organic growth initiatives, including completing transformational new product development projects and investments in strategic capital expenditure, and synergistic acquisitions.”

Ultralife serves its markets with products and services ranging from power solutions to communications and electronics systems. Ultralife serves government, defense and commercial customers globally.

Shares of company stock (Nasdaq: ULBI) were up nearly 5 percent to $6.25 in midday trading Thursday.

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Transcat posts Q3 improvement, beats Street estimates

Transcat Inc. on Tuesday reported a third-quarter operating income increase of 20 percent, with service revenue up more than 12 percent.

For the quarter ended Dec. 26, the Rochester provider of accredited calibration, repair, inspection and laboratory instrument services posted revenue of $44.1 million, up 2 percent from $43.2 million in the year-ago quarter. Net income was $1.76 million, up from $1.48 million in the same quarter last year. On a per-share basis, earnings were 23 cents, up from 20 cents a year ago.

Analysts had expected earnings of 19 cents on sales of $42.99 million.

Lee Rudow
Lee Rudow

“In an environment that continues to be significantly impacted by the COVID-19 pandemic, our third-quarter results demonstrated the resiliency of our business and effectiveness of our strategy as we delivered better than expected results,” said President and CEO Lee Rudow. “Our service segment delivered another excellent quarter, growing revenue 12.2 percent and increasing gross margin by 590 basis points from the prior-year period. We were certainly encouraged by organic growth of 5.9 percent as our strategy to capture opportunities in highly-regulated end markets, including life sciences, continues to serve us well. Our gross margin improvement was driven by technician productivity, expense reductions, operating leverage on our fixed costs and the strong performance of”

Transcat’s distribution segment continues to be negatively impacted by the current market environment but performed in line with expectations, Rudow said.

“Overall, our service segment performance drove third-quarter consolidated operating income of $2.5 million, exceeding our expectations and growing 20 percent from prior year. Year-to-date cash flow from operations of $15.6 million was nearly double from prior year and was used, in part, to fund technology investments and our acquisition strategy,” he added.

The company’s business delivered strong results and its acquisition of
BioTek increases Transcat’s exposure to the growing pipettes market, as well as broadens its geographic footprint, Rudow noted. BioTek also gives Transcat additional on-site technician capabilities, complementing the largely in-house technician business model at

“The results of the third quarter were excellent and we are pleased with our service segment’s return to organic growth and its continued margin expansion. Our balance sheet is solid and the M&A pipeline is growing and active,” Rudow said. “We are confident that our disciplined focus on highly-regulated end markets and our new customer pipeline positions us well for strong organic growth as we continue to operate in a very challenging environment.”

For the fourth quarter, Transcat expects solid service revenue growth compared with last year’s fourth quarter. The company expects an improvement in service gross margin year-over-year, but not to the same degree as experienced in the last two quarters, largely due to more difficult technician productivity comparisons and the anniversary of the company’s acquisition of Distribution is expected to continue to be negatively impacted by the current operating environment.

Shares of company stock (Nasdaq: TRNS) were trading up more than 6 percent Wednesday afternoon at $40.14.

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IEC profits increase in Q1

Wayne County’s IEC Electronics Corp. on Wednesday reported a first-quarter increase in sales and earnings.

For the first quarter ended Jan. 1, the Newark manufacturer reported revenue of $47.5 million, up more than 6 percent from $44.7 million in the same quarter last year. Net income for the quarter was $1.5 million, up more than 29 percent from $1.2 million in the first quarter last year. Diluted earnings per share were 14 cents, compared with 11 cents a year ago.

IEC President and CEO Jeffrey Schlarbaum
IEC President and CEO Jeffrey Schlarbaum

“We delivered a strong start to fiscal 2021, achieving revenue growth, improved gross margin and enhanced profitability. Revenue grew both year over year and sequentially despite employee absenteeism across several of our manufacturing facilities due to COVID-19, largely related to contact tracing precautions rather than positive cases,” said IEC President and CEO Jeffrey Schlarbaum. “This resulted in underutilization on the production floor for a portion of the first quarter of fiscal 2021. The post-holiday spike in virus cases appears to be receding, and with workforce attendance returning to normal levels, we expect to see production levels normalize.”

Schlarbaum said he believes IEC is well-positioned to drive continued organic growth, maintain industry-leading margins and deliver enhanced profitability.

“Our reputation as a consistent and reliable manufacturing partner for high complexity, life-saving and mission-critical products continues to gain traction with customers in the marketplace. Likewise, as a 100 percent U.S.-based manufacturer with a full suite of vertically integrated production services, we believe we have a competitive advantage in attracting partners from a variety of regulated industries who are looking for the highest levels of intellectual property protection and supply chain management,” he added.

The company reported operating cash usage of $4.9 million during the first quarter of fiscal 2021, compared with $2.3 million of cash provided by operating activities for the same period in fiscal 2020. IEC reported cash on hand of $102,000 on Jan. 1, compared with $312,000 at the end of the first quarter 2020.

Shares of company stock (Nasdaq: IEC) were trading down more than 8 percent Wednesday afternoon at $15.31.

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Plug Power reports strong bookings in 2020, ups guidance for 2021

Plug Power Inc., the Albany-based provider of hydrogen engines and fueling solutions, last week said it had exceeded its 2020 sales expectations and has upped its guidance for 2021 and 2024.

Gross billings were more than $330 million for the year, said Plug Power President and CEO Andy Marsh in an earnings call. With its strong bookings, the company has set its 2021 sales guidance at $475 million.

Andy Marsh
Andy Marsh

“We are also announcing today a fourth pedestal customer,” Marsh said in the call. “This customer is an automotive manufacturer with over 50 plants worldwide. We will be doing four sites at the beginning of this year in 2021 to start. Part of our long term plan includes Plug Power penetrating the on-road vehicle market and large scale stationary market.”

Marsh hinted that Spring Hill, Tenn., could have something to do with the fourth pedestal customer; General Motors Corp. employs some 3,700 people at a manufacturing facility there.

Marsh noted that the company had set four major goals for 2021: to accelerate its push into green hydrogen; to complete the formation of joint ventures with its two new partners, Renault and SK Group; to build out the first nationwide green hydrogen network; and to achieve a 40 percent sales growth.

Marsh said he expects to have some hydrogen-powered vehicles, as part of the joint venture with Renault, on the road this year, and that by 2025 Renault feels that the two companies could have 20,000 vehicles on the road; by 2030, it is targeting 30 percent of the 500,000 vehicle markets for light commercial vehicles in Europe.

“By 2025, we will have 500 tons of capacity and 1000 tons of green hydrogen by 2028 around the world. Our relationship with Renault and SK will help ignite our on-road and stationery business. We will have a global cell and manufacturing footprint. We will partner with others to achieve these goals,” Marsh said. “We also have the financial wherewithal to achieve these goals. And have necessary foundations to be an industrial leader in the future $10 trillion hydrogen economy. And that is where Plug Power is today.”

Plug Power has a significant presence in Rochester and is expected to add more than 375 jobs when its $125 million Innovation Center on John Street in Henrietta is complete. In 2019, the clean energy company completed its nearly $4 million expansion in Rochester. The move came less than a year after the opening of its Eastman Business Park facility.

Since the beginning of 2021, Plug Power shares (NasdaqCM: PLUG) have more than doubled to an opening price of $65.91 on Wednesday.

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Graham profits up in Q3

Batavia’s Graham Corp. on Thursday reported an improvement in third-quarter sales and earnings, beating Street estimates for revenue.

For the quarter ended Dec. 31, the global designer and manufacturer of critical equipment for the energy, defense and chemical/petrochemical industries posted revenue of $27.2 million, up from $25.3 million in the same quarter last year. Net income for the quarter improved to $1.1 million. On a per-share basis, earnings were 11 cents. In the year-ago quarter, Graham reported no earnings.

James Lines
James Lines

“We delivered a solid quarter as strong refining sales in Asia offset our weaker domestic refining and petrochemical markets, resulting in 7 percent year-over-year growth. In fact, despite difficult current macroeconomic conditions, our team delivered both top and bottom-line growth,” said Graham President and CEO James Lines. “A significant takeaway in the quarter was our record level of orders and backlog. As we have discussed over the last several years, we have focused significant resources on building our defense business because we believe requirements in that market provide operational synergies and align with our capabilities.”

Those capabilities include vacuum and heat transfer know-how; complex, long-cycle project management; and precision fabrication of large weldments, Lines said.

Orders were $61.8 million in the quarter, including $52.3 million from the defense industry. Graham reported a record backlog of $149.7 million, with 45 to 50 percent expected to ship in the next twelve months.

Geographically, refinery projects in Asia drove international sales to 61 percent of total sales, compared with 47 percent in the prior-year period. Domestic sales in the fiscal 2021 third quarter were 39 percent of total sales, compared with 53 percent in the third quarter of fiscal 2020.

Fluctuations in Graham’s sales among geographic locations and industries can vary measurably from quarter to quarter based on the timing and magnitude of projects, officials said, and the company noted that year-over-year trends are more accurate.

Capital spending was $700,000 in the third quarter of fiscal 2021 and was $1.5 million in fiscal 2021 year-to-date. The company expects capital expenditures for fiscal 2021 to be between $2 million and $2.5 million, of which 80 to 85 percent is expected to be for machinery and equipment and the remainder to be used for other items.

As of Dec. 31, 2020, Graham had no debt.

For the full year, Graham expects revenue to be $93 million to $97 million, with a gross margin between 21 and 22 percent.

“Importantly, we believe defense markets offer long-term growth potential, provide improved visibility that reduces investment and planning risk, and are less cyclical than our historic core markets. Notably, more than 80 percent of the $62 million in new orders in the quarter and approximately 70 percent of the record $150 million in backlog are from the U.S. Navy,” Lines said. “We intend to consistently intensify our focus on sales to the stronger and more stable defense market while staying committed to our core markets. We are also actively participating in the energy transition into renewable fuels and other areas of growth in alternative energy markets.”

Shares of company stock (NYSE: GHM) were down nearly 8 percent to $14.35 mid-afternoon Thursday.

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Monro sales, profits drop in third quarter

Monro Inc. on Wednesday reported a nearly 65 percent drop in third-quarter earnings and a 14 percent drop in sales, driven primarily by significant declines in maintenance and brake services.

For the quarter ended Dec. 26, 2020, the Rochester-based undercar repair and tire services company reported revenue of $284.6 million, down 13.6 percent from $329.3 million in the third quarter last year. Net income for the quarter fell to $6.7 million from $18.9 million in the year-ago quarter. Adjusted earnings for the quarter fell to 22 cents from 60 cents in the same quarter last year.

Analysts’ expectations for earnings ranged from 38 to 43 cents per share on sales of $299.42 million.

Comparable store sales — or sales at stores open for at least one year — fell 13 percent, including an 8 percent drop for tires, 16 percent for alignments, 17 percent for front end/shocks, 19 percent for maintenance services and 21 percent for brakes compared to the prior-year period.

Robert Mellor
Robert Mellor

“Our results for the third quarter were impacted by general market conditions and lower labor productivity levels, particularly in the first two months of the quarter. After proactively decreasing staffing at the outset of the COVID-19 pandemic, we quickly ramped up staffing in our stores over the past two quarters as demand returned. As a result, we added approximately 700 new teammates since July that required time to fully ramp,” said Chairman and Interim CEO Robert Mellor. “Improving market conditions, as well as the successful onboarding and training of our new teammates led to improved top-line performance in December, which posted the best comparable-store sales since the beginning of the pandemic. This has continued into January with a comparable store sales increase of 3 percent.”

Total operating expenses in the quarter decreased $12.3 million to $80.5 million, or 28.3 percent of sales, compared with $92.8 million, or 28.2 percent of sales in the prior-year period. The year-over-year dollar decrease primarily resulted from targeted cost reductions and lower expenses from 29 fewer stores compared to the prior-year period, company officials reported.

During the third quarter, Monro opened 19 company-operated stores, while temporarily closing one store as a result of storm damage and permanently closing one franchise location. Additionally, four company-operated stores remain temporarily closed as a result of damage sustained during Hurricane Laura in Louisiana and Tropical Storm Isaias in the Northeast. Monro ended the quarter with 1,260 company-operated stores and 96 franchised locations.

“We remain financially strong and well-positioned to execute against all of our growth initiatives and made significant progress during the third quarter,” Mellor said. “Importantly, we substantially completed the transformation of 104 stores and our rebranded and reimaged stores continue to outperform our chain average. Additionally, we completed the rollout of our store staffing and scheduling optimization tool and tire category management and pricing system, both of which are instrumental in driving profitable growth. Our initiatives are working and we look forward with confidence in our business.”

During the first nine months of fiscal 2021, the company generated roughly $159 million in operating cash flow, compared with $126 million for the same period last year. Monro’s strong cash flow allows the company to support its business operations and Monro.Forward initiatives as well as invest in attractive acquisition opportunities intended to drive long-term growth, while paying down debt and returning cash to shareholders through its dividend program, officials said.

The company completed the previously announced acquisition of 17 stores in Southern California, further expanding Monro’s geographic footprint in the West Coast region. The locations are expected to add some $20 million in annualized sales.

Monro did not provide fiscal 2021 guidance.

Shares of company stock (Nasdaq: MNRO) were down more than 3 percent to $54.68 in midday trading Wednesday.

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Xerox Q4 revenue, earnings down, plans business segment restructuring

Xerox Holdings Corp. on Tuesday reported a more than 20 percent year-over-year decline in revenue and a 60 percent decline in earnings for the fourth quarter.

For the quarter ended Dec. 31, 2020, Xerox reported revenue of $1.93 billion, down roughly 21 percent from $2.44 billion in the year-ago quarter. Net income for the quarter was $77 million, compared with $818 million in the fourth quarter of 2019. On a per-share basis, diluted earnings were 36 cents for the quarter, down from $3.61 per share in the same quarter a year ago.

Analysts had expected GAAP earnings of 42 cents on revenue of $1.63 billion.

John Visentin
John Visentin

“Times of adversity require working in unison, and I couldn’t be prouder of the way our team came together. We put our strategy to the test in 2020, delivering positive earnings per share and free cash flow, while returning capital to shareholders and continuing to invest in our future. The team’s discipline allowed us to turn on a dime, tightly controlling expenses while steadfastly supporting clients,” said Xerox Vice Chairman and CEO John Visentin. “Though the impact of the pandemic continues in 2021, we expect to return to growth this year as we increase the breadth of offerings and reach new customers in existing and new businesses.”

Xerox reported $235 million of operating cash flow from continuing operations in the fourth quarter, up $129 million from the previous quarter, but down $163 million year-over-year.

For the full year, the document company reported revenue of $7.02 billion, down more than 22 percent from $9.07 billion in 2019. Earnings for the full year were 84 cents per share, down 70 percent from $2.78 per share in 2019.

Xerox said it plans to separate its Software, Financing and Innovation organizations into separate and distinct businesses by 2022.

• The Software business will include a growing portfolio comprised of: DocuShare, a cloud-based content management system; XMPie, software that supports multichannel marketing campaigns; and CareAR, an augmented reality business Xerox acquired in late 2020. CareAR has signed agreements with a number of major companies.
• Xerox Financial Services (XFS) will become a global payment solutions business, offering leasing for Xerox and third-party technology and office equipment. This will expand the company’s customer base, create cross-selling opportunities and provide more leasing options for small and medium-sized businesses.
• The Palo Alto Research Center (PARC) has been central in advancing the company’s innovation portfolio including 3D Printing and Digital Manufacturing, IoT Sensors and Services and Clean Technology. Xerox installed its first 3D printer for a client in December, and IoT solutions are at work with the U.S. Defense Advanced Research Projects Agency and other clients.

In the coming months, officials said Xerox will establish a $250 million corporate venture capital fund to invest in start-ups and early and mid-stage growth companies aligned with the company’s innovation pillars and targeted adjacencies. The corporate venture capital fund will further enhance the company’s existing innovation ecosystem and drive growth through investment, commercial partnerships and co-development of new technologies, officials said.

Xerox on Tuesday also offered 2021 guidance of $7.2 billion in full-year revenue, or roughly 2.5 percent growth, as well as operating cash flow of $600 million or more and free cash flow of $500 million or more.

Shares of company stock (NYSE: XRX) were trading down nearly 2 percent mid-morning Tuesday at $20.39.

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Paychex posts decline in revenue, improvement in bottom line

Paychex Inc. reported a slight decline in revenue in the second quarter, but an earnings improvement of 4 percent.

For the second quarter ended Nov. 30, 2020, the Rochester payroll and benefits company posted a 1 percent drop in revenue to $983.7 million, with service revenue coming in at $968.9 million. Net income for the quarter increased 5 percent to $272.4 million, or 75 cents per diluted share. Adjusted net income was $264.8 million, or 73 cents per share.

Martin Mucci
Martin Mucci

“Financial results for the second quarter showed continued recovery in our key business metrics. The effects of the COVID-19 pandemic impacted our results and year-over-year comparisons, however, client retention remains strong and our sales performance has resulted in year-over-year growth in the number of clients sold and serviced,” said Paychex President and CEO Martin Mucci. “We remain focused on providing excellent customer service, human resource expertise, and product innovations to support our clients through the challenges of the pandemic. In addition, our margins have demonstrated sequential improvement as our cost-saving initiatives have proceeded as expected.”

Company officials said operations in the second quarter improved but continued to be impacted by COVID-19. Total revenues grew 6 percent from the first quarter, while earnings grew 16 percent compared with the previous quarter.

“More than ever before, companies are turning to technology solutions to maintain operations, stay connected with employees and keep their people productive,” Mucci said, noting that the company recently introduced additional enhancements to its Paychex Flex platform to help clients manage risk, stay compliant, better assess performance and adapt to mobile and artificial intelligence-driven trends.

“Headlining these product releases are an Apple Watch/Google Assistant device integration allowing employees greater access to their information, a professional employer organization Protection Plus Package to protect clients against unforeseen costs and additional forward-looking solutions in our platform to help employers and their employees complete key tasks quickly, safely, and accurately in a paperless, mobile fashion,” he added. “We believe our continuing investments in our service delivery platforms strongly position us to meet the demands of the current business environment and support employers no matter where they are in their HR journey.”

For the first six months, total revenue decreased 3 percent to $1.9 billion. Operating income decreased 8 percent to $638.3 million, with adjusted operating income of $670.5 million. Diluted earnings per share fell 8 percent to $1.34, with adjusted earnings per share of $1.36.

Cash, restricted cash and total corporate investments at quarter’s end were $963.4 million. Total short-term and long-term borrowings were $803.9 million. During the six months ended Nov. 30, Paychex paid dividends of $446.7 million and repurchased 400,000 shares of common stock for $28.8 million.

Looking ahead, Paychex expects full-year total revenue to range from a 3 percent loss to flat, with a loss in adjusted diluted earnings per share of 1 to 4 percent.

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CooperVision parent beats Street estimates in Q4

The CooperCompanies Inc. last week beat Street estimates, despite reporting a decrease in sales and earnings for the fourth quarter.

For the quarter ended Oct. 31, the global medical device company and parent of local CooperVision reported a 1 percent drop in revenue to $681.6 million. Adjusted earnings per share for the quarter were $3.16, which beat the Zacks consensus estimate of $3.11 by nearly 2 percent.

For the full year, the company reported sales of $2.43 billion, down 8.4 percent from the previous year, but meeting the consensus estimate. Full-year adjusted EPS were $9.64, slightly outpacing consensus estimates. Earnings fell nearly 22 percent from fiscal 2019.

Fourth-quarter CooperVision revenue was $506.3 million, down 1 percent from the year-ago quarter. Sales of the company’s Toric and multifocal lenses grew in the fourth quarter, while single-use and non-single-use sphere lenses fell.

“This was a solid quarter where we took market share globally in both contact lenses and fertility,” said company President and CEO Al White. “We’re continuing to have success with our daily silicone hydrogel portfolio, with unique products like Biofinity Energys, and with our myopia management program which includes MiSight and our Ortho K lenses.”

The company declined to offer full-year guidance but expects a 3 percent drop in first-quarter total revenue to $642 to $670 million. Sales for CooperVision are expected to be $482 to $502 million in the first quarter. CooperCompanies is anticipating first quarter diluted earnings between $2.66 and $2.86.

Shares of company stock (NYSE: COO) initially dipped on Friday following the earnings report but has since bounced back to $343.17 midday Wednesday.

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IEC continues to improve bottom line in Q4

Newark’s IEC Electronics Corp. on Friday reported growth in fourth-quarter sales and earnings.

For the quarter ended Sept. 30, the Wayne County manufacturer posted revenue of $46.4 million, up nearly 6 percent from year-ago revenues of $43.9 million. Net income for the quarter was $1.9 million, up from $1.8 million in the fourth quarter last year. Diluted earnings per share were 18 cents for the quarter, compared with 17 cents a year ago.

For the full year, IEC reported revenues of $182.7 million, a more than 16 percent increase from $157 million for fiscal 2019. The company reported net income of $6.8 million, or 65 cents per basic and 63 cents per diluted share for fiscal 2020, compared with net income of $4.7 million, or 46 cents per basic and 45 cents per diluted share in fiscal 2019.

Adjusted for the impact of a one-time inventory reserve taken in the first quarter of fiscal 2020, adjusted net income per common share would have been 72 cents per basic and 70 cents per diluted share for fiscal 2020.

Schlarbaum (Photo provided)
Jeffrey Schlarbaum

“Our fourth fiscal quarter showed continued solid performance, closing out a strong year for IEC. At the start of fiscal 2020, we established three primary goals for our company: to drive double-digit organic growth for the fiscal year, continue to achieve industry-leading margins and to generate operating cash flow and we delivered on all three,” said President and CEO Jeffrey Schlarbaum. “Our ability to reach these goals is a credit to our employees, who continued to execute our strategy despite adverse circumstances, and a testament to our growing reputation as a premier partner for the manufacture of life-saving and mission-critical products.”

IEC also reported operating cash flow of $15 million during fiscal 2020, compared with $10.5 million of cash flows used by operations in fiscal 2019, an increase of more than $25 million year over year.

“Our robust year-end backlog of $194.5 million is derived from a diverse range of customers. Notably, $180.2 million of the backlog is expected to ship within the next 12 months, which represents a year-over-year increase of 19.1 percent when compared to $151.3 million at the end of fiscal 2019,” Schlarbaum said. “We are focused on continuing to enhance our offerings to build upon our leadership position as a 100 percent U.S.-based integrated manufacturing partner. We are pleased with the operational and financial success that we achieved in fiscal 2020, despite the challenges presented by the global pandemic, and we are energized by the opportunities ahead in fiscal 2021 to drive continued growth and profitability.”

Shares of company stock (Nasdaq: IEC) were trading at $10 Monday morning.

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Vuzix posts Q3 record sales

Rochester’s Vuzix Corp. this week reported record sales in the third quarter but a weak bottom line.

For the quarter ended Sept. 30, the supplier of smart glasses and augmented reality technologies and products posted revenues of $2.69 million, up from $1.39 million in the third quarter last year. Operating expenses were down roughly $200,000 for the quarter.

Vuzix posted a net loss of $4.76 million, compared with a loss of $5.48 million in the year-ago quarter. On a per-share basis, the loss was 13 cents, compared with an 18-cent loss last year.

Paul Travers
Paul Travers

“Our third quarter 2020 revenue grew 140 percent over the comparable 2019 period largely due to our core enterprise smart glasses business. The worldwide coronavirus outbreak has impacted the day-to-day operations of many enterprise customers across numerous market verticals, including health care, manufacturing, logistics and field service, and has furthered adoption and overall acceptance of smart glasses within business operations,” said Vuzix President and CEO Paul Travers.

The company delivered a record $2.7 million of Vuzix smart glasses during the third quarter, a 156 percent increase from the year-ago quarter, driven primarily by both follow-on orders from existing customers and interest from new customers to support their business operations.

“Health care, including telemedicine and telehealth solutions related to patient care, training and surgery, as well as supporting health care companies like medical device manufacturers that have active equipment installations in hospitals and medical facilities, continued to be an important new business segment for Vuzix in the quarter,” Travers said.

The third quarter also was active in the company’s OEM business group as the company negotiated an engineering services project with a new major defense company in October, as well as phase 2 work with an existing major defense company, Travers noted. The company also is working actively on advancements of its next-generation near-eye waveguide and micro-display technologies.

Shares of company stock (Nasdaq: VUZI) tumbled immediately following Monday’s earnings release but have bounced back some to $3.77 at midday Thursday.

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Kodak reports Q3 loss

After the bell on Tuesday, Eastman Kodak Co. reported a third-quarter decline in sales of $63 million and a net loss for the quarter of $445 million. Shares of company stock (NYSE: KODK) were down roughly 2 percent to $6.55 in light trading Wednesday at midday.

For the quarter ended Sept. 30, the one-time photo giant reported revenue of $249 million, down from $313 million in the year-ago quarter. The quarterly loss of $445 million compares to a $5 million net loss in the third quarter last year.

Eastman Kodak Co. Executive Chairman Jim Continenza
Eastman Kodak Co. Executive Chairman Jim Continenza

“As the pandemic continued during the third quarter, Kodak stayed focused on keeping our employees safe and serving customers while carefully managing our costs and cash,” said Kodak Executive Chairman and CEO Jim Continenza. “We continue to invest in leading-edge digital print technology, and winning eight awards recently in three prestigious print industry competitions provides external validation of that commitment. Looking forward, we’ll continue to build on our strengths in print and advanced materials and chemicals, including our existing business in manufacturing pharmaceutical ingredients.”

Kodak ended the quarter with a cash balance of $193 million.

“Kodak delivered improved revenue compared with the second quarter of the year while improving its financial position,” said Kodak CFO David Bullwinkle. “During the third quarter, the company reduced its debt by $100 million due to the conversion of the convertible notes and its cash balance increased by $13 million.”

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