REG - Somero Enterprises - Interim Results
29/08/2024 07:00
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RNS Number : 0430C Somero Enterprises Inc. 29 August 2024
For immediate release
29 August 2024
Somero(®) Enterprises, Inc.
("Somero" or "the Company" or "the Group")
Interim Results for the six months ended June 30, 2024
H1 2024 H1 2023 % Change
US$ US$
Revenue $51.8m $58.9m -12%
Adjusted EBITDA((1,2)) $12.4m $17.3m -28%
Adjusted EBITDA margin((1,2)) 23.8% 29.5% -570bps
Profits before tax $10.6m $15.6m -32%
Adjusted net income((1,3)) $8.0m $12.2m -34%
Diluted adjusted net income per share((1,3)) $0.14 $0.22 -36%
Cash flow from operations $2.9m $8.8m -67%
Net cash((4)) $20.8m $25.2m -17%
Interim dividend per share $ 0.08 $ 0.10 -20%
Financial Highlights
· Non-residential construction markets remain healthy across a range of sectors
and customers continue to report robust project backlogs giving us confidence
in H2 trading
· North America revenues declined 8% as trading continued to be impeded by
project delays driven by elevated interest rates, labor shortages and concrete
rationing, as previously reported in the 30 July 2024 announcement, in
addition to significant inclement weather in H1 2024
· Mixed results outside North America, with Europe trading comparably to prior
year, while trading in Australia was also adversely impacted by inclement
weather
· Revenue from ROW declined 38% mainly driven by lower volume in Middle East
compared to prior year
· Products released since 2019 contributed US$ 3.1m in revenues, up from US$
0.8m in H1 2023
· Profitability impacted by reduction in revenues, but operational efficiencies
enabled EBITDA margins of 23.8%
· Cashflow impacted by sales decline and higher working capital investment
· Expected improvement in H2 2024 trading, in line with expectations for 2024
revenues of approximately US$ 110.0m, EBITDA of approximately US$ 30.0m, and
year-end cash of approximately US$ 27.0m
Operational Highlights
· Launched two new products in H1 2024, including the first Somero electric
powered laser screed, with a third scheduled for release in H2 2024
· High level of new product and business development activities continue with on
job site visits and innovation council events, including exploring new
technologies and automation to incorporate into future products
· Established a new service, repair, and training center in Belgium to serve
customers in the European Union more efficiently and effectively
· Implemented company-wide workforce reduction of 15% combined with strict cost
controls for the remainder of 2024 to partly offset the profitability impact
of the revised 2024 revenue expectations
Notes:
1. The Company uses non-US GAAP financial measures to provide supplemental
information regarding the Company's operating performance. See further
information regarding non-GAAP measures below.
2. Adjusted EBITDA as used herein is a calculation of the Company's net
income plus tax provision, interest expense, interest income, foreign exchange
loss, other expense, depreciation, amortization stock-based compensation and
non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. Net cash is defined as cash and cash equivalents less borrowings under
bank obligations exclusive of deferred financing costs.
Jack Cooney, President & CEO of Somero, said:
"I am pleased with how the Company has navigated the challenges presented by
the first half of the year. While revenue decline in North America and
Australia impacted performance, our focus on operational efficiency and the
enduring nature of our long-term growth drivers ensure we are well placed for
when conditions improve.
"The launch of two new products in the period demonstrates our commitment to
our long-term growth strategy, and the introduction of our first electric
powered laser screed is an exciting milestone for the business. A third new
product will be released in the second half, and we will continue to leverage
these innovations to deepen our international presence.
"Looking ahead, the resilience of the non-residential market gives us
confidence that, as external challenges subside, our performance will improve.
Given our history of successfully navigating challenging market conditions,
and our proven ability to swiftly adapt, I am confident that we will emerge
from this testing period even stronger."
For further information, please contact:
Enquiries:
Somero Enterprises,
Inc.
www.somero.com
Jack Cooney, President &
CEO
+1 239 210 6500
Vincenzo LiCausi, CFO
Howard Hohmann, EVP Sales
Cavendish Capital Markets Ltd (NOMAD and Broker)
Matt Goode /Seamus Fricker (Corporate Finance) +44 (0)20 7220 0500
Tim Redfern/Harriet Ward (ECM)
Alma Strategic Communications (Financial PR Advisor)
somero@almastrategic.com
David
Ison
+44 (0)20 3405
0205
Rebecca Sanders-Hewett
Will Merison
Notes to Editors:
Somero Enterprises provides industry-leading concrete-levelling equipment,
training, education and support to customers in over 90 countries. The
Company's cutting-edge technology allows its customers to install high-quality
horizontal concrete floors faster, flatter and with fewer people. Somero®
equipment that incorporates laser-technology and wide-placement methods is
used to place and screed the concrete slab in all building types and has been
specified for use in a wide range of commercial construction projects for
numerous global blue-chip companies.
Somero pioneered the Laser Screed® market in 1986 and has maintained its
market-leading position by continuing to focus on bringing new products to
market and developing patent-protected proprietary designs. In addition to its
products, Somero offers customers unparalleled global service, technical
support, training and education, reflecting the Company's emphasis on helping
its customers achieve their business and profitability goals, a key
differentiator to its peers.
For more information, visit www.somero.com (http://www.somero.com)
Chairman's and Chief Executive Officer's Statement
Overview
The Board is pleased with the Company's ability to adapt swiftly and
meaningfully to sustain profitability to mitigate external factors, while
remaining steadfast in executing its long-term growth strategy of introducing
new products and deepening its penetration in international markets. Taking
into consideration the magnitude and persistency of factors outside of
Somero's control impacting the pace of trading in North America and the
inclement weather in North America and Australia, the Board believes the
overall performance in H1 2024 was sound. Group H1 2024 revenues totaled US$
51.8m (H1 2023: US$58.9m), with the 12% decline driven by the trading decline
in North America and Australia.
Leveraging the Company's flexible cost structure, which enabled it to quickly
adjust to the changing circumstances, H1 2024 adjusted EBITDA margin remained
healthy at 23.8% (H1 2023: 29.5%). H1 2024 adjusted EBITDA was US$ 12.4m (H1
2023: US$ 17.3m), with the decline primarily due to lower volume and to a
lesser degree to strategically added headcount to support the new Belgium
service, repair and training facility. The Company was able to partly offset
cost inflation affecting wages and material costs with price increases and
operational efficiency gains. As a result of all these factors, H1 2024 gross
margin remained within the targeted range at 54.6% (H1 2023: 57.0%). Operating
cash flow in H1 2024 was US$ 2.9m (H1 2023: US$ 8.8m), translating to a June
30, 2024 cash balance of US$ 20.8m, notwithstanding the dividend payment of
US$ 11.4m in May 2024. The Company is taking steps to minimize inventory
levels in the second half of the year and maintain accounts receivable at
moderate levels which is anticipated to have a positive impact on year-end
cash.
Regional Review
North America
H1 2024 North American sales declined 8% from H1 2023 to US$ 38.8m mostly
driven by lower sales of Boomed screeds. Customers in the US continue to
report healthy project levels, however they are not operating at full capacity
due to project start delays and pauses caused by elevated interest rates,
labor shortages and concrete rationing, as reported in the 30 July 2024
Trading Update. Underlying non-residential market demand remains positive
driven by onshoring of manufacturing, electric vehicle and battery plants, and
chip manufacturing, which provide long-term demand for our products.
Furthermore, the long-standing and worsening shortage of skilled labor
necessitating the need for automation and work productivity continues to drive
demand for our products in the territory.
Europe
Europe continues to deliver strong results, reporting sales of US$ 7.1m in H1
2024, up slightly from US$ 7.0m in H1 2023. The Company's investments in
customer facing resources and capabilities continues to deliver good results
from new customer acquisitions and penetration of new and existing products,
alongside continued strong parts and service revenue. Moreover, the European
market, which is more environmentally conscious, has embraced the first Somero
electric powered laser screed, the S-940e, which meaningfully contributed to
H1 2024 results in this territory. The Company remains focused on attracting
new customers by leveraging entry-level equipment such as the SRS-4 and the
newly launched SRS-6 in the boomed screed category and the EcoScreed in the
ride-on category. Furthermore, a third new product planned to be released in
H2 2024 is expected to also be well received in Europe.
Australia
Australia is also a target international market where we see meaningful
opportunity for growth through increased market penetration across our product
offering. However, in H1 2024, sales declined 40% to US$ 3.2m, from the US$
5.3m in H1 2023., with inclement weather in H1 2024 having a significant
impact on trading. Nevertheless, new customer acquisitions remained high. We
continue to focus on growing revenue in this territory by broadening awareness
and educating the marketplace about Somero's value proposition premised on
delivering quality and productivity.
Rest of World
Our Rest of World region, which includes Latin America, the Middle East,
India, Southeast Asia, Korea and China, reported H1 2024 sales of US$ 2.7m,
representing a 39% decrease compared to H1 2023. The main contributors to H1
2024 revenues were Latin America and India, which reported respective sales of
US$ 1.3m and US$ 1.1m, compared to US$ 1.6m and US$ 1.1 in H1 2023,
respectively. Middle East reported sales of US$ 0.1m in H1 2024, down from as
strong H1 2023 of US$ 1.1m. As previously stated, given the relatively small
base of business in each region, trading will fluctuate from period to period.
The Company intends to maintain the resources allocated to the regions and add
personnel as appropriate.
Product Review
Demand for our product categories is impacted by the type and size of
projects, and applications, which are ultimately driven by end users. Large
Boomed screeds are suitable for large footprint projects such as warehousing,
medical facilities and manufacturing facilities, while Ride-on screeds are
suitable for smaller footprint projects and smaller concrete slabs.
Different applications drive demand for other equipment, such as exterior
applications for the 3D Profiler Systems and the Somero Broom+Cure(TM). As
these variables shift, our product mix fluctuates accordingly.
Revenue from sales of Boomed screeds decreased compared to H1 2023, driven by
the factors in the US noted in the 30 July 2024 Trading Update and in the
section above. Nonetheless, there continues to be healthy support for large
Boomed screeds driven by onshoring efforts, an increase in electric vehicle
and battery plants and US legislation including the CHIPS Act, a statute
providing roughly US$ 280 billion in new funding to boost domestic research
and manufacturing of semiconductors in the United States. There also continues
to be healthy demand for our Ride-on screeds, including smaller concrete slab
pours necessitated by the shortage and rationing of concrete. Ride-on screeds
decreased 4.5% from H1 2023 contributing US$ 10.7m to H1 2024 revenues. Sales
of 3D Profiler System contributed US$ 4.3m to H1 2024 revenue, consistent with
H1 2023. Sales of Remanufactured machines increased 21% in H1 2024 compared to
H1 2023 due to heightened availability as a result of a higher level of
trade-ins at the end of 2023. Given the price point and product offering,
Remanufactured machines are very attractive to new market entrants and offer
an economical option for projects that require secondary back-up machines
on-site. Although Remanufactured machines generally yield gross margins in the
range of 20% - 25%, the program allows us to monetize trade-ins. Other
revenues decreased 11% mostly driven by weaker sales of the Line Dragon. The
products within the Other category, other than parts, which were down in H1
2024 compared to H1 2023, address niche applications and therefore demand will
vary from period to period.
Products released since 2019, the SkyScreed® 36, S-PS50, SkyStrip®, SRS-6,
S-940e and the Somero Broom+Cure(TM), combined to contribute US$ 3.1m in H1
2024 revenues, up from H1 2023 of US$ 0.8m. Most of the growth in this
category was driven by the SRS-6 and the S-940e. Both products have gained
immediate traction and are expected to deliver greater results in H2 2024 as
availability becomes more widespread. As noted above, a third new product is
planned for release in H2 2024. Our new products are inventions, some of which
address entirely new market segments and customer bases, and therefore market
acceptance can be gradual, and trading can be somewhat volatile. Nevertheless,
we are confident in the value proposition of the offerings and will continue
to work to increase the market penetration.
We continue to dedicate significant organizational time and resources to
engage customers directly to develop a pipeline of ideas for solutions that
address pain points. H1 2024 was an active period in this regard, with
extensive jobsite visits and innovation council sessions both in the US and
internationally. Additionally, we are exploring new technological advancements
and investigating the impact they could have on our current and future product
offering.
Cashflow and Balance Sheet
Somero reported operating cash flow in H1 2024 of US$ 2.9m, down from US$ 8.8m
reported in H1 2023, primarily due to lower profits and an increase in working
capital. The increased working capital in H1 2024 came mostly from a higher
level of ending inventory as a result of lower sales unit volume and product
mix. Based on the revised full year revenue expectation, the Company has taken
actions to adjust incoming inventory levels in H2 2024. Additionally,
working capital was impacted by the timing of estimated income taxes for 2023
and 2024.
The Company spent US$ 1.6m in H1 2024 on capital expenditures (2023: US$
1.7m), relating to office renovations at the Michigan, USA facility, on-going
product software programs, and other activities in the ordinary course of
business. The Company also paid dividends in H1 2024 totaling US$ 11.4m (2023:
US$ 14.2m), reflecting the Company's ongoing commitment to disciplined return
of cash to shareholders, as well as repurchasing US$ 1.9m in common stock
under the 2023 and 2024 share buyback programs.
The Company ended H1 2024 with US$ 20.8m in net cash down from the US$ 33.3m
reported at the end of 2023, primarily reflecting the US$ 11.4m dividend
payment, but still providing ample liquidity to support the business
activities and allow it to continue making strategic investments. The balance
sheet remains debt-free with access to an unutilized US$ 25.0m secured
revolving line of credit. All of which provide a secure financial position to
fund future growth.
Dividend and Share Buyback Program
Based on the results in H1 2024, our strong financial position and confidence
in the outlook for the remainder of 2024, we are pleased to report that the
Board has decided to declare an interim 2024 dividend of US$ 0.08 per share,
maintaining a balance between interim ordinary dividend and final ordinary
dividend comparable to prior year. The dividend, representing a total payment
of approximately US$ 4.4m, will be payable on October 18, 2024 to shareholders
on the register as of September 20, 2024. The common stock ex-dividend date is
19 September 2024.
In H1 2024, the Company repurchased a total of 435,593 shares of common stock
under the Company's share buyback program put in place to offset dilution from
on-going equity award programs. It is intended that any shares repurchased
will be immediately cancelled and the Company will make further announcements
to the market as and when share purchases are made.
Our People
On behalf of the Board, we would like to thank all our global employees for
their performance in H1 2024. A core strength of the Somero team is its
ability to quickly adjust to changing conditions while always delivering the
highest level of products and service to our customers. This core strength
that underpins the Company's highly flexible cost model that enables it to
deliver healthy profits. On 3 May 2024, the Company announced a senior
management appointment and succession plan appointing Jesse Aho as Chief
Operating Officer of Global Operations and New Product Development. The Board
and management team remain as committed as ever to providing all our employees
with a rewarding and challenging working environment that is full of
opportunity.
Environmental, Social and Governance
The Board closely monitors environmental, social and governance topics that
materially impact our stakeholders. These topics are routinely discussed to
ensure Somero strikes the appropriate balance of meeting shareholder
expectations and addressing the concerns of key stakeholders necessary to
ensure sustainability of the business. A primary material topic is the
environmental impact of our business including the use of our equipment in the
construction process. The release of the S-940e represents Company's first
step in the electrification evolution and remains committed to making further
progress to support environmental, social and governance matters.
Outlook
The overall non-residential construction market remains healthy with support
from on-shoring, manufacturing, electric vehicle and battery plants, and chip
factories, underscored by customers reporting robust project backlogs and
positive outlooks. We do not see any indications of fundamental changes in the
non-residential construction market, and the factors that have impacted the
pace of work have not caused project cancellations as reported by our
customers.
The Company anticipates improvement in H2 2024 trading in compared to H1 2024,
driven by a combination of new product revenue growth, including the launch of
a third new machine, and an expectation of improved weather conditions. This
confidence is supported by our primary means of gauging market health, which
is direct feedback from customers.
As such, the Board remains confident that 2024 results will fall in line with
the revised market expectations published following our 30 July 2024 Trading
Update, with revenues of approximately US$ 110.0m, EBITDA of approximately US$
30.0m, and year-end cash of approximately US$ 27.0m.
Larry Horsch
Non-Executive Chairman
Jack Cooney
President & Chief Executive Officer
August 29, 2024
FINANCIAL REVIEW
Summary of financial results For the six months ended June 30
* unaudited 2024 2023
US$ 000 US$ 000
Except per share data Except per share data
Revenue 51,839 58,850
Cost of sales 23,527 25,281
Gross profit 28,312 33,569
Operating expenses
Selling, marketing and customer support 8,183 7,634
Engineering and product development 1,347 1,386
General and administrative 7,953 8,641
Total operating expenses 17,483 17,661
Operating income 10,829 15,908
Other income (expense)
Interest expense (20) (11)
Interest income 194 37
Foreign exchange impact (522) (472)
Other 122 173
Income before income taxes 10,603 15,635
Provision for income taxes 2,462 3,234
Net income 8,141 12,401
Per Share
Per Share
US$ US$
Basic earnings per share 0.15 0.22
Diluted earnings per share 0.15 0.22
Basic adjusted net income per share ((1), (2), (4)) 0.15 0.22
Diluted adjusted net income per share ((1), (2), (4)) 0.14 0.22
Other data
Adjusted EBITDA ((1), (2), (4)) 12,350 17,337
Adjusted net income ((1), (3), (4)) 8,046 12,230
Depreciation expense 789 640
Amortization of intangibles 71 68
Capital expenditures 1,650 1,005
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements of the
Company's financial performance under US GAAP and should not be considered as
an alternative to net income, operating income or any other performance
measures derived in accordance with US GAAP or as an alternative to US GAAP
cash flow from operating activities as a measure of profitability or
liquidity. Adjusted EBITDA and Adjusted net income are presented herein
because management believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA is also
used to determine pricing and covenant compliance under the Company's credit
facility and as a measurement for calculation of management incentive
compensation. The Company understands that although Adjusted EBITDA is
frequently used by securities analysts, lenders, and others in their
evaluation of companies, its calculation of Adjusted EBITDA may not be
comparable to other similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of net income plus tax
provision, interest expense, interest income, foreign exchange gain (loss),
other expense, depreciation, amortization, stock-based compensation, and
non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. The Company uses non-US GAAP financial measures to provide supplemental
information regarding the Company's operating performance. The non-US GAAP
financial measures presented herein should not be considered in isolation
from, or as a substitute to, financial measures calculated in accordance with
US GAAP. Investors are cautioned that there are inherent limitations
associated with the use of each non-US GAAP financial measure. In particular,
non-US GAAP financial measures are not based on a comprehensive set of
accounting rules or principles, and many of the adjustments to the US GAAP
financial measures reflect the exclusion of items that may have a material
effect on the Company's financial results calculated in accordance with US
GAAP.
Net income to adjusted EBITDA reconciliation and
Adjusted net income reconciliation
* unaudited Six months ended June 30
2024 2023
US$ 000 US$ 000
Adjusted EBITDA reconciliation
Net income 8,141 12,401
Tax provision 2,462 3,234
Interest expense 20 11
Interest income (194) (37)
Foreign exchange impact 522 472
Other (122) (173)
Depreciation 789 640
Amortization 71 68
Non-cash lease expense 183 173
Stock-based compensation 478 548
Adjusted EBITDA 12,350 17,337
Adjusted net income reconciliation
Net income 8,141 12,401
Amortization 71 68
Tax impact of stock option & RSU settlements (166) (239)
Adjusted net income reconciliation 8,046 12,230
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements of the
Company's financial performance under US GAAP and should not be considered as
an alternative to net income, operating income or any other performance
measures derived in accordance with US GAAP or as an alternative to US GAAP
cash flow from operating activities as a measure of profitability or
liquidity. Adjusted EBITDA and Adjusted net income are presented herein
because management believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA is also
used to determine pricing and covenant compliance under the Company's credit
facility and as a measurement for calculation of management incentive
compensation. The Company understands that although Adjusted EBITDA is
frequently used by securities analysts, lenders, and others in their
evaluation of companies, its calculation of Adjusted EBITDA may not be
comparable to other similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of the Company's net income
plus tax provision, interest expense, interest income, foreign exchange gain
(loss), other expense, depreciation, amortization, stock-based compensation,
and non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. The Company uses non-US GAAP financial measures in order to provide
supplemental information regarding the Company's operating performance. The
non-US GAAP financial measures presented herein should not be considered in
isolation from, or as a substitute to, financial measures calculated in
accordance with US GAAP. Investors are cautioned that there are inherent
limitations associated with the use of each non-US GAAP financial measure. In
particular, non-US GAAP financial measures are not based on a comprehensive
set of accounting rules or principles, and many of the adjustments to the US
GAAP financial measures reflect the exclusion of items that may have a
material effect on the Company's financial results calculated in accordance
with US GAAP.
Revenues
The Company's consolidated revenues decreased by 12% to approximately US$ 51.8
(H1 2023: US$ 58.9m). The Company's revenues consist primarily of sales from
Boomed Screed products, which include the S-28EZ, S22-EZ, S-15R, S-10A, SRS-6
and SRS-4 Laser Screed machines, sales from Ride-on Screed products, which are
drive through the concrete machines that include the S-485, S-940, S940e and
S-158C Laser Screed machines, remanufactured machines sales, 3-D Profiler
Systems, SkyScreed®, and Other revenues which consist of revenue from sales
of parts and accessories, sales of other equipment, service, training and
shipping charges. The overall decrease for the period was primarily driven
by lower volume of the Boomed Screeds, particularly the S-28EZ, and 3-D
Profiler System.
Boomed Screed sales decreased to approximately US$ 19.0m (H1 2023: US$ 24.4m)
as unit volume decrease to 60 units (H1 2023: 84 units), Ride-on screed
sales decreased to approximately US$ 10.7m (H1 2023: US$ 11.2m) due to a
decrease in volume to 86 units (H1 2023: 94), remanufactured machine sales
increased to approximately US$ 4.0m (H1 2023: US$ 3.4m) due to an increase in
volume to 20 units (H1 2023: 14), 3-D Profiler System sales remained
consistent at US$ 4.3m, there were no sales of the SkyScreed® in H1 2024 and
H1 2023. Other revenues decreased to approximately US$ 13.8m (H1 2023: US$
15.6m) mostly due to a decrease in parts sales and Line Dragon unit volume.
The following table shows the breakdown during the six months ended June 30,
2024 and 2023:
Revenue breakdown by geography
North America EMEA((1)) ROW((2)) Total
US$ in millions US$ in millions US$ in millions US$ in millions
2024 2023
2024 2023 2024 2023 2024 2023 Net sales % of Net sales Net sales % of Net sales
Boomed screeds ((3)) 13.6 16.8 3.1 4.2 2.3 3.4 19.0 36.7% 24.4 41.4%
Ride-on screeds ((4)) 7.3 8.4 1.9 1.0 1.5 1.8 10.7 20.7% 11.2 19.0%
Remanufactured machines 3.3 2.2 0.6 0.9 0.1 0.3 4.0 7.7% 3.4 5.8%
3D Profiler System 3.9 3.1 0.1 0.1 0.3 1.1 4.3 8.3% 4.3 7.3%
SkyScreed® - - - - - - - - - -
Other ((5)) 10.7 11.7 1.5 1.9 1.6 2.0 13.8 26.6% 15.6 26.5%
Total 38.8 42.2 7.2 8.1 5.8 8.6 51.8 100% 58.9 100%
Notes:
1. EMEA includes the Europe, Middle East, and Scandinavia.
2. ROW includes Australia, Latin America, India, China, Korea, and Southeast
Asia
3. Boomed Screeds include the S-22EZ, S-28EZ, S-15R, S-10A, SRS-4 and SRS-6.
4. Ride-on Screeds include the S-940,S-940e, S-485, and S-158C.
5. Other includes parts, accessories, services, and freight, as well as other
equipment such as the Somero Line Dragon®, Somero Broom+Cure(TM), STS-11M
Topping Spreader, Copperhead, Mini Screed C and S-PS50.
H1 2024 H1 2023
Units by product line
Boomed screeds 60 84
Ride-on screeds 86 94
Remanufactured machines 20 14
3-D Profiler System 40 41
SkyScreed® 0 0
Other ((1)) 35 47
Total 241 280
Notes:
1. Other includes equipment such as the Somero Line Dragon®, Somero
Broom+Cure(TM), STS-11M Topping Spreader, Copperhead, Mini Screed C and
S-PS50.
Sales to customers located in North America contributed 75% of total revenue
(H1 2023: 72%), sales to customers in EMEA (Europe, Middle East, and
Scandinavia) contributed 14% (H1 2023: 14%) and sales to customers in ROW
(Southeast Asia, Australia, Latin America, India and China) contributed 11%
(H1 2023: 14%).
Sales in North America totaled approximately US$ 38.8m (H1 2023: US$ 42.2m)
down 8%, primarily driven by a decrease in Boomed Screeds. Sales to
customers in EMEA were approximately US$ 7.2m (H1 2023: US$ 8.1m) down 11%,
driven by a decrease in Boomed Screeds in the Middle East. Sales to
customers in ROW were approximately US$ 5.8m (H1 2023: US$ 8.6m) decreasing by
32% driven by a decrease across most product categories in Australia and Latin
America.
US$ in millions
Regional sales H1 2024 H1 2023
North America 38.8 42.2
Europe 7.1 7.0
Australia 3.2 5.3
Rest of World((1)) 2.7 4.4
Total 51.8 58.9
Notes:
(1) Includes India, Middle East, China, Southeast Asia, Korea and Latin
America.
Gross profit
Gross profit decreased to approximately US$ 28.3m (2023: US$ 33.6m), with
gross margins decreased to 54.6% compared to 57.0% in H1 2023, reflecting
higher input and logistical costs and lower volume scale, partly offset by a
price increase.
Operating expenses
Operating expenses excluding depreciation, amortization and stock-based
compensation for H1 2024 were approximately US$ 16.4m (H1 2023: US$ 16.5m),
which is primarily reflective of lower incentive compensation and sales
commissions, partly offset by higher expenses related to the new Belgium
facility.
Debt
As of June 30, 2024, the Company had no outstanding debt. In August 2022,
the Company updated its credit facility to a US$ 25.0m secured revolving line
of credit, with a maturity date of August 2027. The interest rate on the
revolving credit line is based on the BSBY Index plus 1.25%. The Company's
credit facility is secured by substantially all of its business assets.
Provision for income taxes
The provision for income taxes decreased to approximately US$ 2.5m, at an
overall effective tax rate of 23%, compared to a provision of approximately
US$ 3.2m in H1 2023, at an overall effective tax rate of 21%.
Earnings per share
Basic earnings per share represents income available to common stockholders
divided by the weighted average number of shares outstanding during the
period. Diluted earnings per share reflect additional common shares that
would have been outstanding if dilutive potential common shares had been
issued, as well as any adjustments to income that would result from the
assumed issuance. Potential common shares that may be issued by the Company
relate to outstanding stock options and restricted stock units.
Earnings per common share has been computed based on the following:
Six months ended June 30
2024 2023
US$ 000 US$ 000
Income available to stockholders 8,141 12,401
Basic weighted shares outstanding 55,296,172 55,823,370
Net dilutive effect of stock options and restricted stock units 617,468 647,699
Diluted weighted average shares outstanding 55,913,640 56,471,069
Per Share Per Share
US$ US$
Basic earnings per share 0.15 0.22
Diluted earnings per share 0.15 0.22
Basic adjusted net income per share 0.15 0.22
Diluted adjusted net income per share 0.14 0.22
Consolidated Balance Sheets
As of June 30, 2024 and December 31, 2023
As of June 30, 2024 As of December 31, 2023
* unaudited US$ 000
US$ 000
Assets
Current assets:
Cash and cash equivalents 20,762 33,311
Accounts receivable - net 8,474 8,835
Inventories - net 24,115 19,375
Prepaid expenses and other current assets 2,166 2,388
Total current assets 55,517 63,909
Accounts receivable, non-current - net 679 431
Property, plant, and equipment - net 26,825 25,928
Financing lease right-of-use assets - net 529 346
Operating lease right-of-use assets - net 2,471 1,606
Intangible assets - net 1,049 1,120
Goodwill 3,294 3,294
Deferred tax asset 2,368 1,674
Other assets 346 242
Total assets 93,078 98,550
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 5,562 3,410
Accrued expenses 6,270 7,768
Financing lease liability - current 222 199
Operating lease liability - current 337 342
Income tax payable 2 2,099
Total current liabilities 12,393 13,818
Financing lease liability - long-term 240 110
Operating lease liability - long-term 2,179 1,305
Other liabilities 78 82
Total liabilities 14,890 15,315
Stockholders' equity
Preferred stock, US$.001 par value, 50,000,000 shares authorized, no shares - -
issued and outstanding
Common stock, US$.001 par value, 80,000,000 shares authorized, 55,086,985 and 26 26
55,550,697 shares issued on June 30, 2024 and December 31, 2023,
respectively, and 55,081,485 and 55,499,368 shares outstanding on June 30,
2024 and December 31, 2023, respectively
Less: treasury stock, 5,500 shares as of June 30, 2024 and 51,329 shares as of (40) (213)
December 31, 2023 at cost
Additional paid in capital 10,930 13,253
Retained earnings 69,266 72,498
Other comprehensive loss (1,994) (2,329)
Total stockholders' equity 78,188 83,235
Total liabilities and stockholders' equity 93,078 98,550
See Notes to unaudited consolidated financial statements.
Consolidated Statements of Comprehensive Income
For the six months ended June 30, 2024 and 2023
* unaudited Six months ended June 30
2024 2023
US$ 000 US$ 000
Except per share data Except per share data
Revenue 51,839 58,850
Cost of sales 23,527 25,281
Gross profit 28,312 33,569
Operating expenses
Sales, marketing, and customer support 8,183 7,634
Engineering and product development 1,347 1,386
General and administrative 7,953 8,641
Total operating expenses 17,483 17,661
Operating income 10,829 15,908
Other income (expense)
Interest expense (20) (11)
Interest income 194 37
Foreign exchange impact (522) (472)
Other 122 173
Income before income taxes 10,603 15,635
Provision for income taxes 2,462 3,234
Net income 8,141 12,401
Other comprehensive income
Cumulative translation adjustment 335 (333)
Comprehensive income 8,476 12,068
Earnings per common share
Earnings per share - basic 0.15 0.22
Earnings per share - diluted 0.15 0.22
Weighted average number of common shares outstanding
Basic 55,296,172 55,823,370
Diluted 55,913,640 56,471,069
See Notes to unaudited consolidated financial statements.
Consolidated Statements of Changes in Stockholders' Equity
For the six months ended June 30, 2024
* unaudited
Common stock Treasury stock Other
Retained earnings Comprehensive
US$ 000 loss
US$ 000
Additional Total
paid-in Stockholders'
capital equity
US$ 000 US$ 000
Shares Amount Amount
US$ 000 Shares US$ 000
Balance - December 31, 2023 55,550,697 26 13,253 51,329 (213) 72,498 (2,329) 83,235
Cumulative translation adjustment - - - - - - 335 335
Net income - - - - - 8,141 - 8,141
Stock-based compensation - - 478 - - - - 478
Dividend - - - - - (11,373) - (11,373)
Cancellation of treasury stock (481,422) - (2,088) (481,422) 2,088 - - -
RSUs settled for cash - - (713) - - - - (713)
Share buyback - - 435,593 (1,915) - - (1,915)
New shares issued 17,710 - - - - - - -
Balance - June 30, 2024 55,086,985 26 10,930 5,500 (40) 69,266 (1,994) 78,188
See Notes to unaudited consolidated financial statements.
Consolidated Statements of Cash Flows
For the six months ended June 30, 2024 and 2023
*unaudited Six months ended June 30
2024 2023
US$ 000 US$ 000
Cash flows from operating activities:
Net income 8,141 12,401
Adjustments to reconcile net income to net cash provided by operating
activities:
Deferred taxes (694) (784)
Depreciation and amortization 860 708
Non-cash lease expense 183 173
Provision for credit losses (recoveries) (203) 96
Stock-based compensation 478 548
(Gain)/loss on sale of property and equipment (37) 3
Working capital changes:
Accounts receivable 315 2,707
Inventories (4,741) (2,557)
Prepaid expenses and other current assets 222 361
Other assets (104) (12)
Accounts payable, accrued expenses and other liabilities (1,533) (4,809)
Net cash provided by operating activities 2,887 8,835
Cash flows from investing activities:
Property and equipment purchases (1,650) (1,005)
Net cash used in investing activities (1,650) (1,005)
Cash flows from financing activities:
Payment of dividend (11,373) (14,238)
RSUs settled for cash (713) (1,156)
Payments under financing leases (120) (124)
Share buy back (1,915) (435)
Net cash used in financing activities (14,121) (15,953)
Effect of exchange rates on cash and cash equivalents 335 (333)
Net decrease in cash and cash equivalents (12,549) (8,456)
Cash and cash equivalents:
Beginning of period 33,311 33,699
End of period 20,762 25,243
See Notes to unaudited consolidated financial statements.
Notes to the Consolidated Financial Statements
As of June 30, 2024 and December 31, 2023
1. Organization and description of business
Nature of business
Somero Enterprises, Inc. (the "Company" or "Somero") designs, assembles,
remanufactures, sells, and distributes concrete levelling, contouring, and
placing equipment, related parts and accessories, and training services
worldwide. Somero's Operations and Support Offices are located in Michigan,
USA with Global Headquarters and Training Facilities in Florida, USA. Sales
and service offices are in Chesterfield, England; Kampenhout, Belgium;
Melbourne, Australia and New Delhi, India.
2. Summary of significant accounting policies
Basis of presentation
The consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States
of America.
Principles of consolidation
The consolidated financial statements include the accounts of Somero
Enterprises, Inc., and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual results could
differ from those estimates.
Cash and cash equivalents
Cash includes cash on hand, cash in banks, and temporary investments with a
maturity of three months or less when purchased. The Company maintains
deposits in a number of financial institutions globally, which may at times
exceed amounts covered by insurance provided by the U.S. Federal Deposit
Insurance Corporation ("FDIC"). The Company has not experienced any losses
related to amounts in excess of FDIC limits.
Restricted Cash
Restricted cash of approximately US$ 325,000 and US$ 258,000 is included in
"Cash and cash equivalents" on the consolidated balance sheet as of June 30,
2024 and December 31, 2023. This represents cash deposited by the Company into
a guaranteed deposit account and designated as collateral for the building
lease in Australia and Belgium, in accordance with the lease agreement.
Accounts receivable and allowances for credit losses
Financial instruments which potentially subject the Company to concentrations
of credit risk consist primarily of accounts receivable. The Company's
accounts receivable are derived from revenue earned from a diverse group of
customers. The Company performs credit evaluations of its commercial customers
and maintains an allowance for credit losses based upon the expected ability
to collect accounts receivable. Allowances, if necessary, are established
for amounts determined to be uncollectible based on specific identification
and historical experience. As of June 30, 2024 and December 31, 2023, the
allowance for credit losses was approximately US$ 1,648,000 and US$ 1,862,000,
respectively. Provision for credit losses (recovery) for the six months
ended June 30, 2024 and 2023, was approximately US$ (203,000) and US$ 96,000,
respectively. The opening balance of accounts receivable on January 1, 2023
was US$ 10,729,000, which includes US$ 414,000 of non-current accounts
receivable.
Inventories
Inventories are stated using the first in, first out ("FIFO") method, at the
lower of cost or net realizable value ("NRV"). Provision for potentially
obsolete or slow-moving inventory is made based on management's analysis of
inventory levels and future sales forecasts. As of June 30, 2024 and
December 31, 2023, the provision for obsolete and slow-moving inventory was
approximately US$ 616,000 and US$ 707,000, respectively.
Intangible assets and goodwill
Intangible assets consist primarily of customer relationships, trademarks, and
patents, and are carried at their fair value when acquired, less accumulated
amortization. Intangible assets are amortized using the straight-line method
over a period of three to twelve years, which is their estimated period of
economic benefit.
Goodwill is not amortized but is subject to impairment tests on an annual
basis, and the Company has chosen December 31 as its periodic assessment
date. Goodwill represents the excess cost of the business combination over
the Company's interest in the fair value of the identifiable assets and
liabilities. Goodwill arose from the Company's prior sale from Dover
Corporation to The Gores Group in 2005 and the purchase of the Line Dragon,
LLC business assets in January 2019. The Company did not incur a goodwill
impairment loss for the periods ended June 30, 2024 nor December 31, 2023.
Revenue recognition
The Company generates revenue by selling equipment, parts, accessories,
service agreements and training. The Company recognizes revenue for equipment,
parts, and accessories when it satisfies the performance obligation of
transferring the control to the customer. For product sales where shipping
terms are FOB shipping point, revenue is recognized upon shipment. For
arrangements which include FOB destination shipping terms, revenue is
recognized upon delivery to the customer. The Company recognizes the revenue
for service agreements and training once the service or training has occurred.
As of June 30, 2024 and December 31, 2023, there were approximately US$
577,000 and US$ 600,000, respectively, of extended service agreement
liabilities. The opening balance of extended service agreement liabilities on
January 1, 2023 was US$ 582,000. During the six months ended June 30, 2024 and
2023, approximately US$ 363,000 and US$ 304,000, respectively, of revenue was
recognized related to the amounts recorded as liabilities on the balance
sheets in the prior year (deferred contract revenue).
As of June 30, 2024 and December 31, 2023, there were approximately US$
1,964,000 and US$ 1,635,000, respectively, in customer deposit liabilities for
advance payments received during the period for contracts expected to ship
following the end of the period. The opening balance of customer deposit
liabilities for advance payments received on January 1, 2023 was US$
2,180,000. As of June 30, 2024 and December 31, 2023, there are no significant
contract costs such as sales commissions or costs deferred. Interest income
on financing arrangements is recognized as interest accrues, using the
effective interest method.
Warranty liability
The Company provides warranties on all equipment sales ranging from 60 days to
three years, depending on the product. Warranty liabilities are estimated
net of the warranty passed through to the Company from vendors, based on
specific identification of issues and historical experience.
US$ 000
Balance, January 1, 2023 (1,448)
Warranty charges 986
Accruals (828)
Balance, December 31, 2023 (1,290)
Balance, January 1, 2024 (1,290)
Warranty charges 300
Accruals (284)
Balance, June 30, 2024 (1,274)
Property, plant, and equipment
Property, plant, and equipment is stated at cost, net of accumulated
depreciation and amortization. Land is not depreciated. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets, which is 31.5 to 40 years for buildings (depending on the nature of
the building), 15 years for improvements, and 3 to 10 years for machinery and
equipment.
Income taxes
The Company determines income taxes using the asset and liability approach.
Tax laws require items to be included in tax filings at different times than
the items are reflected in the consolidated financial statements. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to temporary differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis and operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date. Deferred tax assets are reduced
by a valuation allowance, if necessary, to the extent that it appears more
likely than not that such assets will be unrecoverable.
The Company evaluates tax positions that have been taken or are expected to be
taken in its tax returns and records a liability for uncertain tax
positions. This involves a two-step approach to recognizing and measuring
uncertain tax positions. First, tax positions are recognized if the weight
of available evidence indicates that it is more likely than not that the
position will be sustained upon examination, including resolution of related
appeals or litigation processes, if any. Second, the tax position is measured
as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon settlement.
Stock-based compensation
The Company recognizes the cost of employee services received in exchange for
an award of equity instruments in the financial statements over the period the
employee is required to perform the services in exchange for the award
(presumptively the vesting period). The Company measures the cost of
employee services in exchange for an award based on the grant-date fair value
of the award. Compensation expense related to stock-based payments was
approximately US$ 478,000 and US$ 548,000 for the six months ended June 30,
2024 and 2023, respectively. In addition, the Company settled approximately
US$ 713,000 and US$ 1,155,000 in restricted stock units for cash during the
six months ended June 30, 2024 and 2023, respectively.
Transactions in and translation of foreign currency
The functional currency for the Company's subsidiaries outside the United
States is the applicable local currency. The preparation of the consolidated
financial statements requires the translation of these financial statements to
USD. Balance sheet amounts are translated at period-end exchange rates and
the statement of comprehensive income accounts are translated at average
rates. The resulting gains or losses are charged directly to accumulated
other comprehensive income. The Company is also exposed to market risks
related to fluctuations in foreign exchange rates because some sales
transactions, and some assets and liabilities of its foreign subsidiaries, are
denominated in foreign currencies other than the designated functional
currency. Gains and losses from transactions are included as foreign
exchange impact in the accompanying consolidated statements of comprehensive
income.
Comprehensive income
Comprehensive income is the combination of reported net income and other
comprehensive income ("OCI"). OCI is changes in equity of a business
enterprise during a period from transactions and other events and
circumstances from non-owner sources not included in net income.
Earnings per share
Basic earnings per share represents income available to common stockholders
divided by the weighted average number of common shares outstanding during the
year. Diluted earnings per share reflect additional common shares that would
have been outstanding if dilutive potential common shares had been issued
using the treasury stock method. Potential common shares that may be issued
by the Company relate to outstanding stock options and restricted stock units.
Earnings per common share have been computed based on the
following:
Six months ended June 30
2024 2023
US$ 000 US$ 000
Net income 8,141 12,401
Basic weighted shares outstanding 55,296,172 55,823,370
Net dilutive effect of stock options and restricted stock units 617,468 647,699
Diluted weighted average shares outstanding 55,913,640 56,471,069
Fair value
The carrying values of cash and cash equivalents, accounts receivable,
accounts payable, and other current assets and liabilities approximate fair
value because of the short-term nature of these instruments. The carrying
value of our long-term debt approximates fair value due to the variable nature
of the interest rates under our Credit Facility.
3. Inventories
Inventories consisted of the following:
June 30, December 31,
2024 2023
US$ 000 US$ 000
Raw material 11,234 10,607
Finished goods and work in process 9,730 5,161
Remanufactured 3,151 3,607
Total 24,115 19,375
4. Goodwill and intangible assets
Goodwill represents the excess of the cost of a business combination over the
fair value of the net assets acquired. The Company is required to test
goodwill for impairment, at the reporting unit level, annually and when events
or circumstances indicate the fair value of a unit may be below its carrying
value.
The following table reflects other intangible assets:
Weighted average June 30, December 31,
Amortization 2024 2023
Period US$ 000 US$ 000
Capitalized cost Patents 12 years 19,247
19,247
Intangible Assets 7,434 7,434
26,681 26,681
Accumulated amortization Patents 12 years 18,794 18,770
Intangible Assets 6,838 6,791
25,632 25,559
Net carrying costs Patents 12 years 453 477
Intangible Assets 596 643
1,049 1,120
Amortization expense associated with the intangible assets in each of the six
months ended June 30, 2024 and 2023 was approximately US$ 71,000 and US$
68,000, respectively. The amortization expense for each of the next 5 years
will be approximately US$ 142,000 and the remaining amortization thereafter
will be approximately US$ 339,000.
5. Property, plant, and equipment
Property, plant, and equipment consist of the following:
June 30, December 31,
2024 2023
US$ 000 US$ 000
Land 864 864
Building and improvements 26,178 25,465
Machinery and equipment 9,369 8,487
36,411 34,816
Less: accumulated depreciation and amortization (9,586) (8,888)
26,825 25,928
Depreciation expense for the six months ended June 30, 2024 and 2023 was
approximately US$ 789,000 and US$ 640,000, respectively.
6. Line of credit
In August 2022, the Company updated its credit facility to a US$ 25.0m secured
revolving line of credit, with a maturity date of August 2027. The interest
rate on the revolving credit line is based on the BSBY Index plus 1.25%. The
Company's credit facility is secured by substantially all its business assets.
No amounts were drawn under the secured revolving line of credit as of June
30, 2024 and December 31, 2023.
Interest expense for the six months ended June 30, 2024 and 2023 was
approximately US$ 19,900 and US$ 10,800, respectively, and relates primarily
to interest costs on leased vehicles.
7. Retirement program
The Company has a savings and retirement plan for its employees, which is
intended to qualify under Section 401(k) of the Internal Revenue Code ("IRC").
This savings and retirement plan provides for voluntary contributions by
participating employees, not to exceed maximum limits set forth by the IRC.
The Company's matching contributions vest immediately. The Company
contributed approximately US$ 563,000 and US$ 579,000 to the savings and
retirement plan during the six months ended June 30, 2024 and 2023,
respectively.
8. Leases
The Company leases property, vehicles, and equipment under leases accounted
for as operating and finance leases. The leases have remaining lease terms of
less than 1 year to 10 years, some of which include options for renewal. The
exercise of these renewal options is at the sole discretion of the Company.
The right-of-use assets and related liabilities presented on the Consolidated
Balance Sheets, reflect management's current expectations regarding the
exercise of renewal options. The components for lease expense were as
follows:
Six Months Ended Six Months Ended
June 30, 2024 June 30,
2023
US$ 000 US$ 000
Operating lease cost 260 205
Finance lease cost:
Amortization of right-of-use assets 183 137
Interest on lease liabilities 12 8
Total finance lease cost 195 145
As of June 30, 2024, the weighted average remaining lease term for finance and
operating leases was 2.4 years and 7.1 years, respectively, and the weighted
average discount rate was 7.8% and 6.0%, respectively. As of June 30, 2023,
the weighted average remaining lease term for finance and operating leases was
1.5 years and 6.3 years, respectively, and the weighted average discount rate
was 4.7% and 5.1%, respectively.
Maturities of lease liabilities represent the remaining six months for 2024
and the full 12 months of each successive period as follows:
Operating Leases Finance Leases
US$ 000 US$ 000
2024 253 143
2025 478 206
2026 478 94
2027 478 57
2028 353 9
Thereafter 1,053 -
Total 3,093 509
Less imputed interest (577) (47)
Total
2,516
462
9. Supplemental cash flow and non-cash financing disclosures
Six months ended June 30
2024 2023
US$ 000 US$ 000
Cash paid for interest 20 11
Cash paid for taxes 4,475 2,594
Finance lease liabilities arising from obtaining right-of-use assets 153 31
Operating lease liabilities arising from obtaining right-of-use assets 869 744
10. Business and credit concentration
The Company's line of business could be significantly impacted by, among other
things, the state of the general economy, the Company's ability to continue to
protect its intellectual property rights, and the potential future growth of
competitors. Any of the foregoing may significantly affect management's
estimates and the Company's performance. On June 30, 2024 and December 31,
2023, the Company had five customers which represented 29% and three customers
that represented 32% of total accounts receivable, respectively.
11. Commitments and contingencies
The Company has entered into employment agreements with certain members of
senior management. The terms of these are for renewable one-year periods and
include non-compete and non-disclosure provisions as well as provide for
defined severance payments in the event of termination or change in control.
The Company is also subject to various unresolved legal actions which arise in
the normal course of its business. Although it is not possible to predict with
certainty the outcome of these unresolved legal actions or the range of
possible losses, the Company believes these unresolved legal actions will not
have a material effect on its consolidated financial statements.
12. Income taxes
The Company's total effective tax rate for the six months ended June 30, 2024
was 23%. The Company is subject to US federal income tax with a statutory
rate of 21%, as well as income tax of multiple state and foreign
jurisdictions. The Company was formed in 2005. The statute of limitations for
all federal, foreign, and state income tax matters for tax years from 2019
forward is still open. The Company has no federal, foreign, or state income
tax returns currently under examination.
As of June 30, 2024, and December 31, 2023 the Company had income tax payable
of approximately US$ 2,000 and US$ 2,099,000, respectively.
On June 30, 2024, the Company had approximately US$ 2,368,000 in non-current
net deferred tax assets recorded on its balance sheet. In assessing the
realizability of deferred tax assets, management considers whether it is more
likely than not that some portion or all the deferred tax assets will not be
realized. The ultimate realization of the deferred tax assets is dependent
upon the generation of future taxable income during the periods in which those
temporary differences become deductible.
13. Share buyback
In February 2024 and 2023, the Board authorized on-market share buyback
programs for such number of its listed shares of common stock as are equal to
US$ 2,000,000 for each program. The maximum price paid per common share was
no more than the higher of 105 percent of the average middle market closing
price of common share for the five business days preceding the date of the
share buyback, the price of the last independent trade and the highest current
independent purchase bid. As of June 30, 2024, the Company purchased 154,074
shares of common stock for an aggregate value of US$ 679,000 pursuant to the
share buyback program authorized in 2024, and 281,519 shares of common stock
for an aggregate value of US$ 1,236,000, which completed the share buyback
program authorized in 2023. The Company estimates the share buyback program
authorized in 2024 will be completed by the end of 2024. In connection with
the Company's share buyback programs authorized in 2024 and 2023, 481,422
shares held in treasury were cancelled in 2024.
14. Subsequent events
In preparing the consolidated financial statements, the Company has evaluated
all subsequent events and transactions for potential recognition or disclosure
through August 29, 2024, the date the consolidated financial statements were
available for issuance.
Dividend
The Board declared an interim dividend for the six months ended June 30, 2024
of 8.0 US cents per share. This dividend will be paid on October 18, 2024
to shareholders on the register as of September 20, 2024.
All dividends, including both ordinary and supplemental, have the option of
being paid in two currencies, GBP, and USD. In addition, there is also the
option of being paid by check or through CREST for either currency or
additionally via BACS for GBP payments. If no election is made, dividends
will be paid in USD and via Check. If shareholders wish to change their
current currency or payment methods, forms are available through Computershare
Investor Services PLC at
https://www-uk.computershare.com/Investor/#Help/PrintableForms
(https://www-uk.computershare.com/Investor/#Help/PrintableForms)
Distribution amount: $0.08 cents per share
Ex-dividend date: 19 September 2024
Dividend record date: 20 September 2024
Final day for currency election: 4 October 2024
Payment date: 18 October 2024
All dividends have the option of being paid in either GBP or USD. Payments
in USD can be paid by Check or through Crest. Payments in GBP can be paid via
Check, Crest and BACS. The default option if no election is made will be for
a USD payment via check. Should shareholders wish to change their current
currency or payment methods, forms are available through Computershare
Investor Services PLC at
https://www uk.computershare.com/Investor/#Help/PrintableForms
If shares are held as Depositary Interests through a broker or nominee, the
holding company must be contacted and advised of the payment preferences. Such
requests are subject to the terms and conditions of the broker or nominee.
Additional information on currency election and tax withholding can be found
at: https://investors.somero.com/aim-rule-26
(https://investors.somero.com/aim-rule-26) . Shareholders can also contact
Computershare Investor Services PLC by telephone at +44 (0370) 702 0000 or
email via webcorres@computershare.co.uk (mailto:webcorres@computershare.co.uk)
.
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AnnouncementREG - Somero Enterprises - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Somero Enterprises - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Somero Enterprises - Interim Results
Announcement