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Barrett Business Services Inc (BBSI) Q2 2020 Earnings Call Transcript | The Motley Fool

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Barrett Business Services Inc (NASDAQ:BBSI)
Q2 2020 Earnings Call
Aug 7, 2020, 11:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, everyone. Thank you for participating in today’s conference call to discuss BBSI’s financial results for the second quarter ended June 30, 2020. Joining us today are BBSI’s President and CEO, Mr. Gary Kramer; and the Company’s CFO, Mr. Anthony Harris. Following their remarks, we’ll open the call for your questions.

Before we go further, please take note of the Company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statement provides important cautions regarding forward-looking statements. The Company’s remarks during today’s conference call will include forward-looking statements. These statements, along with other information presented that does not reflect historical fact, are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by these forward-looking statements. Please refer to the Company’s recent earnings release and to the Company’s quarterly and annual reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ.

I would like to remind everyone that this call will be available for replay through September 5, 2020, starting at 3:00 p.m. Eastern Time this afternoon. A webcast replay will also be available via the link provided in today’s press release, as well as available on the Company’s website at www.mybbsi.com.

Now, I would like to turn the call over to the President and Chief Executive Officer of BBSI, Mr. Gary Kramer. Sir, please go ahead.

Gary KramerChief Executive Officer

Thank you, David. Good morning, everyone, and thank you for joining the call. I hope that everyone has stayed safe and healthy during these times. The second quarter proved to be a complex environment as a result of COVID-19 and the subsequent economic downturn. Our business teams around the country executed flawlessly in working remotely, while supporting our clients in these trying times. I want to again thank everyone in the BBSI family, many of whom are listening to this call, for their exceptional response to this crisis. We continue to provide outstanding and uninterrupted service to our clients and distribution partners.

I’m very proud of the work and support that we delivered to our clients as we assisted in the challenging situations of layoffs and furloughs, while deciphering all of the various legislations from essential versus nonessential to FFCRA to the CARES Act. We developed reports or made introductions to assist the clients with applying for these various grants, loans and subsidies. And then, we assisted on work-from-home programs and then fortunately, return-to-work programs. Simply put, our product has never been more relevant. Unfortunate situations like COVID are why BBSI is here and why we exist to advocate for the success of the business owner.

I’m going to divide my remaining remarks into three sections. In the first section, I will discuss the Company’s financial strength. Then the section’s (Phonetic) section will be commentary on the second quarter operations. And in the third, I will provide an update on our strategy for growth. Then Anthony Harris will deliver his prepared remarks regarding the second quarter, as well as financial and capital review for the remainder of the year. Finally, we will open the line for questions.

Regarding the Company’s financial strength, our balance sheet is in an excellent position. We previously discussed building a financial moat around the Company, and I am pleased to say that the moat is deeper this quarter as a result of closing a loss portfolio transfer. This is another step in the direction of de-risking our workers’ compensation structure. The transaction generated a onetime increase in unrestricted cash of $48 million with additional cash flow benefits to be realized later in the year.

At quarter end, our true available cash and securities on hand increased $36 million from Q1 to $130 million, and we continue to have an additional $50 million credit facility behind us. Anthony will discuss our liquidity in more detail during his prepared remarks, but I will say that we have made significant strides to bolster our already strong balance sheet despite market uncertainties created around the world from COVID-19. This is a very telling statement about the intrinsic value of our company.

Regarding the second quarter operations, our gross billings decreased 6% over the prior year. We provided interim financials last quarter and stated that April’s gross billings felt like the bottom, and we are very pleased to say that it was. Our breakdown for gross billings by month over the prior year was a decrease of 14% in April, and May and June averaged a decrease of 2.6%. Overall, we are extremely pleased with the resiliency of our customer base. And gross billings exceeded our internal forecast for the quarter. We believe that Q2 will be the low watermark for the year.

Last quarter, we provided additional information regarding BBSI’s client base and we thought the pandemic would affect them and their industries. As you know, our client portfolio skewed heavily to the blue and gray collar industries. We do not have clients in the most distressed industries such as airlines and cruises and have a very low concentration in other industries such as retail, restaurants, gyms and salons.

Overall, we are extremely fortunate that our market approach of working with all clients rather than focusing on industry verticals has helped us avoid concentration risks that are affected by COVID. Of our client base in the quarter, 44% of our clients as a percentage of gross billings grew 1% on average. This would include construction, contractors, warehousing and storage. 17% of our clients as a percentage of gross billings were minimally affected and decreased 3%. This would include waste management, landscaping and maintenance. 33% of our clients as a percentage of gross billings were moderately affected and decreased 12%. This would include transportation and logistics, manufacturing, professional services, wholesale and retail sales. 6% of our clients as a percentage of gross billings were severely affected and decreased 34%. This would include restaurants and hospitality, real estate, rental and leasing services.

Regarding our client count, we added 227 new PEO clients. We mentioned last quarter that we saw referral partners and business owners go into their bunker in reaction to COVID. Our additions in the quarter are obviously less than our plan and less than prior year but are in line with where we think it should be in a COVID environment. In April, we experienced the steepest decrease in prospect meetings. May was not much better, but we started to see more business flow in June. July is shaping up to be better than June but is still about 20% below prior year. Client acquisition in a COVID world is our number one priority as an organization, and I will speak about this more shortly.

We experienced attrition of 142 clients, which was better than planned and better than prior. This was the inverse of our client acquisitions. As folks went into the bunker, our product was needed more than ever. Regarding client attrition, we lost four due to accounts receivable, five for lack of peer progression, seven due to risk profile, 14 businesses sold, seven businesses closed, 22 businesses closed due to COVID, 83 left due to pricing competition or companies that moved away from the outsource model. This represents a build in the quarter of 85 net new clients.

Our staffing business slowed the quickest and the deepest and was down 26% in the quarter. When businesses need to make cuts, one of the first places they go to is the temporary workforce, and we experienced swift deceleration in staffing revenue as a result. We are not seeing the staffing business rebound as quickly as the economy. We have the orders but not the supply, as the majority of the individuals can earn more money on unemployment stimulus versus working wages.

At the end of June, we had 57 branches, and the stratification is as follows: 18 mature branches with run rates in excess of $100 million. This is a measure we use to indicate a branch’s ability to increase leverage. 20 emerging branches running between $30 million and $100 million, 19 branches we consider developing with run rates up to $30 million. Our business unit teams totaled 114. All in, this resulted in gross billings being down by 6%. All things considered, we are pleased and optimistic regarding our gross billing stability. When projecting for the full year and taking all of these factors into consideration, we forecast that our gross billings will decrease by 3%.

Next, I’m going to provide an update on actions we have taken to manage through COVID-19 in the quarter. Our SG&A was down significantly in the quarter compared to prior year. We took swift and decisive action at the end of Q1 to reduce any discretionary spending. We consolidated branches and also created satellite branches, which removed management layers. This resulted in rounds of layoffs and furloughs. All of these actions were done with the intent to reduce expense, while not sacrificing revenue or quality of product. As of today, we are pleased to have returned more than half of our employees that were furloughed.

Next, I’m going to discuss the various initiatives and strategies we’ve embarked on as we operate in a COVID-19 world. We continue to be focused on sales and organic growth. In Q3, we will open a new branch in Albuquerque and a second branch in Phoenix. Our products will be the same, but how we approach the market will be slightly different in a COVID environment. The new area managers have been hired and trained and will approach their market focused on sales and pipeline development. We will not commit to commercial real estate but will utilize alternative lease options to keep costs down. The support of these branches will be hubbed by adjacent markets or at corporate until they reach a critical mass, and then we will invest in local teams to support the business.

We’ve also been exploring acquisitions of smaller PEOs that are located in geographies that we are not. The ideal target would be a PEO that culturally aligns with our value proposition, has less than 10,000 work site employees and utilizes a similar distribution strategy. We believe that our balanced approach of reinvesting organically in new branches and in additional business units, coupled with tuck-in acquisitions in geographies that we aren’t currently located, is the proper strategy to become a truly national and geographically diversified PEO with powerful gross billings growth over a normal economic cycle.

In June, we announced the successful launch of myBBSI for all clients — all new clients. Client feedback thus far has been overwhelmingly positive, and they appreciate the ease, simplicity and individualization of the system. We are extremely excited about bringing this technology to market and have been executing our marketing and sales campaigns, including informing our referral partners about our new technology. We will be converting our existing client bases in waves throughout the remainder of the year and anticipate being fully transitioned by the end of the year.

We’ve also applied for our PEO license in every state and expect to be fully licensed in the next two months. We added 16 states since our last call and are now currently licensed in 35 states. As previously mentioned, not having an all-states license can sometimes prohibit us from doing business with clients. We have made the system changes, which will allow for the servicing of the business, and we have also expanded our insurance offering to support the business. This change will be an important catalyst to growth, as we will be able to go wherever our clients go. And we will be able to land new clients that may have been historically too large for us.

When we go to market, we are offering the best of BBSI. We have various products and assets consisting of strategic consulting, human resources, information technology, insurance, risk management, retirement services, staffing and recruiting. When we meet with a potential client, they may join BBSI because they have a certain pain point today, but they will stay because we deliver our whole suite of products flawlessly.

People have been and continue to be our product, which has never been more relevant to the business owner than it is today, packaging their knowledge and expertise with our new technology platform and the ability to transact nationally, strategically positions us to go after larger, more tech-savvy clients and increases our total available market. To say that we are poised for incredible future growth and are eager to accelerate our sales effort post COVID-19 is an understatement.

Now, I’m going to turn the call over to Anthony for his prepared remarks.

Anthony HarrisVice President-Finance, Secretary and Treasurer

Thanks Gary. Similar to last quarter, I will begin with an overview of our quarter results and current capital position, and I will conclude with more commentary on how COVID-19 is currently impacting our business and our outlook for the year.

Net income for the quarter was $11.5 million compared to $13.9 million in Q2 ’19. Gross billings declined 6% to $1.37 billion. PEO gross billings declined 6% to $1.35 billion, while staffing revenues declined 26% to $20.5 million. Net revenues of $201 million were down 13% from Q2 ’19. Remember that our GAAP revenue presentation differs from PEO and staffing services, so a change in mix will impact our net revenue trend.

As Gary noted, April was the low point for our billings in the COVID-19 slowdown, and we are pleased with the speed of the recovery of billings in May and June. Gross billings by region varied in part due to the actions taken by various states in the different geographies. In the quarter, gross billings by region were as follows: Mountain States grew 11% over the prior year quarter, East Coast grew by 4%, Northwest billings declined by 7% and California billings declined by 10%.

Customer growth trends also came in line with our expectations relative to the current environment. As Gary noted, new customer adds slowed in the quarter, which was partially offset by slower client runoff. There remains a headwind to net customer adds in this environment.

Workers’ compensation expense as a percent of gross billings was 3.8% this quarter, which is below our expected range of 4.2% to 4.4%. This decline is partly attributable to actuarially determined reductions of prior year estimated liabilities of $1.4 million in the second quarter and additional reductions due to cost-saving measures. Our workers’ compensation claims frequency also continues to trend favorably. In the quarter, we saw trailing 12-month relative frequency of claims as a percentage of payroll decrease 18% compared to the second quarter of ’19.

SG&A in the quarter was $33.3 million compared to $39 million in the prior year quarter, representing a decline of 15%.

As we described in our first quarter call, the BBSI management team was quick to plan for and respond to declining business volumes due to COVID-19. We executed on those plans, which included meaningful expense reduction and cash flow management in the second quarter. In addition, a key part of our employee compensation comprises profit share and other incentive-based payments, and our accrued expenses for these programs has decreased based off our reduced profitability in the COVID-19 slowdown. As business volumes have recovered, SG&A levels will continue to increase as we bring employees back from furlough and incur other employee compensation costs.

Our investment portfolios earned $1.8 million in the second quarter compared to $3.3 million in the prior year. The decrease in investment income is directly attributable to the decline in interest rates in the period and is consistent with our expectations communicated in the prior quarter.

Turning to the balance sheet, we are very pleased to report the progress we have made in our workers’ compensation program structure. As part of our long-term goal of continuing to de-risk our business model, we entered into a loss portfolio transfer agreement in Q2 to transfer $116 million of workers’ compensation claims liabilities off of our balance sheet. This transfer of claims for accident years 2014 through 2017 represented approximately 27% of our outstanding claims liabilities. As a result of this transfer, BBSI has no exposure for any potential adverse development on those claims. However, the terms of the transaction do allow us to continue to participate in favorable development in future years based off certain predefined benchmarks. In summary, there’s only upside for the Company. By transferring these claims, we were also able to unlock excess collateral that was tied to those claims, which resulted in the immediate transfer of $48 million of restricted cash investments moving back to the Company’s unrestricted accounts at June 30.

In addition, the Company’s renewal of its fronted program with Chubb as of July 1 also included several positive achievements. We were able to renew at favorable rates with considerably lower collateral funding requirements than prior years. The result is expected collateral savings over the next 12 months of approximately $30 million compared to what we would have funded under the previous terms. This will be reflected as an increase in our unrestricted cash and investments over the coming year. In addition, we lowered the Company’s loss retention from $5 million per occurrence to $3 million. And lastly, we also agreed to a multiyear term with Chubb for the first time with coverage secured through June 2022. Not only do these arrangements de-risk our model, they speak again to the success we have had in managing our workers’ compensation program and the consistency of the Company’s results in this area.

After the loss portfolio transfer and collateral returns I just discussed, our ending unrestricted cash and investments balance at June 30 was $130 million compared to $94 million at March 31 and $101 million at the prior June 30. Also remember that we typically build cash in the third and fourth quarters, due primarily to the timing of payroll tax payments that occur earlier in the year. Because of these transfers, our restricted cash and investments at June 30 declined to $322 million from $467 million at March 31. These restricted balances will now grow at a slower pace due to our more favorable collateral terms.

Our investments continue to be managed conservatively. As market yields have dropped, our unrealized gains on our investments increased significantly to $9.6 million. Our average duration remains conservative at 1.6 years and the average quality of investments remains at AA. As expected, our interest income is down due to a combination of our variable rate investments, comprising approximately 26% of the total portfolio, and lower interest rates on all new fixed rate investments acquired since March. Our average book yield has decreased to 1.8% from 2.3% at year-end.

We continued to be debt-free at quarter end except for our $4 million mortgage on our corporate headquarters. We discussed in our first quarter call that we had agreed with Wells Fargo to increase our line of credit in the second quarter from $33 million to $50 million, and that agreement was subsequently executed as planned. This has (Technical Issues) a vote of confidence from Wells Fargo and a source of additional financial flexibility, given the economic uncertainty. Our agreement with Wells Fargo provides management the option to revert to the lower credit line if we wish.

I will now move to our discussion of how COVID-19 has continued to impact our business. The effects of the pandemic on our operations are now reflected in a full quarter of results and they are more favorable than expected. Client payrolls and, therefore, gross billings recovered at an encouraging pace in May, and we have still not seen a meaningful increase in customer defaults or bad debts. Because billings have recovered from their low, we have brought back many of our employees from furlough. We also continue to believe our workers’ compensation program is well insulated from the effects of COVID-19.

As noted last quarter, less than 2% of our work site employees were in the healthcare sector or were considered first responders as generally defined. Through underwriting actions, we have now reduced our exposure to these categories to less than 1% of our work site employees. As of July 31, we had 16 reported claims for cases of COVID-19 with only two being accepted. Both claims are for immaterial dollar amounts and both individuals have returned to work.

Our claims frequency has also trended favorably. This is consistent with our expectation that the economic downturn related to COVID-19 would not necessarily translate to a significant increase in claims frequency. That is in part due to the nature of this economic contraction, as well as the significant amount of financial stimulus that has been made available to individuals through a variety of programs.

We continue to monitor legislative and executive actions that could impact our workers’ compensation exposure, and there have been some positive developments there recently. A California executive order related to workers’ compensation coverage expired on July 5 and related pending legislation in that state is more restrictive in scope than the original order. Even with these positive trends and although the amounts today are much smaller than they were a quarter ago, we have continued to approach our workers’ compensation accruals conservatively.

Moving to our outlook for the remainder of the year, while there continues to be real uncertainty in the market created by the pandemic, we are reinstating our full year outlook based on the information that we have today. Our forecast does not contemplate the return to shelter-in-place orders like we saw in April. We expect our gross billings for the year to decline by 3% compared to the full year of 2019. Within this figure, we expect staffing revenues to decline by 19% for the year. We expect gross workers’ compensation expense as a percent of gross billings to range between 3.8% and 4%. This range includes our favorable experience recorded year-to-date. We expect our full year diluted earnings per share to be $3.70, which assumes an effective tax rate of 21%.

In closing, we are pleased with the results of the quarter and the pace of the recovery so far. While there remains continued macroeconomic uncertainty, we have been able to de-risk our business model, strengthen our balance sheet and streamline our operations in the second quarter, and we are well positioned for the future. I will now turn the call back to Gary for closing remarks.

Gary KramerChief Executive Officer

Thanks Anthony. In conclusion, our product, fundamentals and financials are solid, and I am confident that we will weather this pandemic and emerge stronger. Our client base is situated in industries that are not heavily affected by COVID, and I am optimistic that we can return to growth as normalcy resumes. We continue to always think of the client first and to advocate for the success of the business owner.

Now, I’ll turn the call over to the operator. David?

Questions and Answers:

Operator

(Operator Instructions) Our first question is from Chris Moore with CJS Securities.

Christopher MooreCJS Securities — Analyst

Hey, good morning, guys. Impressive quarter. Thanks for taking a few questions. Maybe start just with workers’ comp. Obviously, workers’ comp as a percentage of gross billings has come down meaningfully. It was closer to 5% a few years back. Two questions on the 3.8% to 4% range. One is, that range is just for fiscal ’20, correct? It includes $2.2 million of favorable adjustments in the first half. So that’s just applies for ’20?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Yes, that’s correct. So we don’t include actuarial adjustments in our forecast. But for this year, for the full year guide, we were already accounting for the first half of the year, the $2 million that we recorded. That’s correct.

Christopher MooreCJS Securities — Analyst

Got it. And what’s kind of the theoretical limit here on the workers’ comp as a percentage? Could it be meaningfully below 4%? Or is that kind of a fair place to be?

Anthony HarrisVice President-Finance, Secretary and Treasurer

So, we are seeing a long-term trend in reductions of workers’ compensation costs that I think we’ve approached that trend cautiously in terms of our reserving. And I think you’ve seen that come through our favorable actuarial adjustments, right? So the manifestation of that is the prior accident year guides (Phonetic) that we’ve been taking each quarter. So there were reforms, especially in California several years ago, that have favorably impacted the cost structure. There’s still some unknowns with how COVID will play out. But I’ll say, in this last quarter, the data on that has been very favorable as well. So, even though we continue to be cautious, the trends are very favorable on cost reductions.

Gary KramerChief Executive Officer

Yeah, Chris, if you just look at the quarter for us, the claims reported in Q2 compared to prior year was down 20%, which is a good sign, right? We — I’ll say we’re fortunate that we’re not in healthcare, which is where the COVID claims really are, on the workers’ comp side. So, we dodged that bullet. We haven’t seen COVID claims. We don’t think COVID claims are going to be an issue for us. So, we were conservative going through our first half of the year accrual just because there’s unknown out there. But if things continue to trend the way they are and we’re getting some tightness on the legislative slide, I could see our accrual rate coming down just because of the experiences in there.

Christopher MooreCJS Securities — Analyst

Got it. That’s helpful. And maybe just switch gears, in terms of — kind of looking at post COVID revenue growth, you had mentioned during a recent conference a big picture goal of 15% revenue growth, kind of split between same-store, new clients and M&A. Can you — I think the M&A was roughly 5%. Can you just break down the same-store versus new clients? Would that be roughly equivalent as well? Or kind of just how you’re looking at it at this stage?

Gary KramerChief Executive Officer

Yeah. We haven’t given any guidance yet for ’21. And honestly, the reason we can’t do that is because it’s even hard to give revenue guidance for Q3 or Q4 with the unknowable factors that are happening in the economy right now. But when we think of the business over a long-term cycle, organically, between our investing in business units, investing in additional branches with the capacity we have at the Company, there’s really no reason that we shouldn’t be organically 10-plus percent of a gross billings grower. And then if we were to layer a M&A on top of that, it would just be accretive, which would get you up in that mid-teens plus range.

Christopher MooreCJS Securities — Analyst

Got it. That’s helpful. And I give that qualifier post COVID, obviously. I’ll jump back in line. Thanks guys.

Gary KramerChief Executive Officer

Thanks Chris.

Operator

Our next question is from Josh Vogel with Sidoti.

Josh VogelSidoti & Company — Analyst

Hey, good afternoon, guys. A couple of questions about the outlook for the balance of the year. You talked about payroll trends had improved significantly in May and June versus April. I think you said down 2.6% on average. And I’m curious how much of that do you think was just some pent-up and maybe not sustainable? And then to build off that, understanding that net client builds are expected to be slower than you’ve achieved historically, I’m just curious, what are the assumptions behind the implied 4% to 5% annual gross revenue declines that you built into your second half guidance?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Sure. Yeah. So first of all, on the revenue — kind of shape of the recovery, we definitely saw what I would call a mini V-shaped recovery. So, it was a deep cut in April as everybody went to shelter-in-place and companies immediately furloughed and laid off employees, and that bounced back rapidly in May. And that payroll, we saw that level off pretty quickly. So, June payroll sequentially were up over May but not much. And July payroll sequentially are trending fairly flat as well. So, it definitely was a V-shaped recovery. And so we’re seeing that as a fairly stable base at this point.

In terms of the future growth and our expectations for customer adds, our Q1 customer adds were in line with our plan. Q2 adds were obviously well off of plan, as Gary noted. What’s interesting about that is, our sales conversion rate, when we were able to meet with a prospect, was actually steady with prior quarters, and that’s generally held steady for us as a company. So, we were able to convince potential clients of our value proposition when we were able to get those meetings, but our prospect meetings were down 40% in the quarter over year-ago quarter. So the question is, can we continue to get those meetings? And we’ve seen that trend up, as Gary noted, as we’ve all adapted to a virtual world and learned how to sell over — through a webcam, that is improving. But the reality is, there’s still headwinds there. And so, we do see an upward trend. So it’s not going to be down 40% like it was in Q2. But could it be down 20%? Yes. So, we’re factoring that into our model.

Gary KramerChief Executive Officer

Yeah. I would say, when we — when we’re forecasting Q3 and Q4, we’re making it based upon the assumption that is going to look and behave like June and July, right? And that’s how we’re saying that the economy is going to behave and how we’re looking at the remainder of the year. The one thing that’s unknowable is the effect of the PPP. So, we’ve kind of made some assumptions based upon PPP. But if you take that and then say, OK, well, how is our adds and our retention going to be for Q3, Q4? Our adds are going to be less than what we planned. And we’ve made assumptions and changes in our models to say, we’re not going to add as many clients in Q3. It will pick up more in Q4. But the inverse is, our retention is going to be better as well. So when we’re thinking about Q3 specifically, we’re saying, all right, it’s going to behave similar to Q2, and we selected our assumptions based upon that for adds and retention.

Josh VogelSidoti & Company — Analyst

That’s helpful. Thanks. And just thinking about the comment on the sales conversion rate, you had 227 new client adds. How many prospect meetings did you have?

Gary KramerChief Executive Officer

We run at about a 34% closing ratio. So, our closing ratio was consistent. We just didn’t get as many pitches. So, we had a good batting average. We just didn’t get as many pitches. So, if you do the math…

Anthony HarrisVice President-Finance, Secretary and Treasurer

Really all the same there.

Josh VogelSidoti & Company — Analyst

So, Anthony, you said the SG&A spend over the balance of the year will increase as the year progresses. But I wanted to focus on that incremental. I think it was $5.6 million you mentioned at the — coming out of 2019 for the new portal rollout. And how much of that should we see hitting up in Qs three and four, respectively?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Yeah. And that’s, I think, what also makes the SG&A decline extra impressive, right, is the 15% decline, that’s year-over-year. But of course, you correctly note that at year-end, we had guided for an SG&A increase this year, right? So our decrease from plan really demonstrates kind of the effort that was put into that. The $5.6 million, I think at this point, that’s kind of baked in — that’s obviously baked into our model. That does ramp up a little bit in Q3 and Q4. There’s not much there in terms of incremental second half shape versus the first half. But what I will say is the big trend difference is going to be our employee costs, right? And it’s for the two things I mentioned. Not only are we going to bring more employees back and therefore have headcount adds in the second half of the year as our business volumes stabilize and increase, we’re also going to have an increase in our profit share and incentive compensation accruals, which, if you followed us, you’ll know that’s an important part of our compensation strategy for our teams. And so, as our branch profitability improves and as our company profitability improves from what we saw in the first half of the year, we’re going to see those accruals increase as well.

Josh VogelSidoti & Company — Analyst

Okay. And a quick question on the workers’ comp benefit in the quarter. Was that from this 2014 to 2017 time period?

Anthony HarrisVice President-Finance, Secretary and Treasurer

No. So the two — no, so the $1.4 million actuarial adjustment, is that what you’re referring to?

Josh VogelSidoti & Company — Analyst

Yes.

Anthony HarrisVice President-Finance, Secretary and Treasurer

No. So, that would be for the claims that are remaining with us at June 30.

Gary KramerChief Executive Officer

And that would be that would be for the ’19 and prior, but ’19 is still a little — ’19 is still too green to take action on. So, if you think about the adjustments, it would be for ’18 and prior.

Josh VogelSidoti & Company — Analyst

Okay. And just lastly, the comments around inorganic growth, can you just talk about the pipeline? Is this something you’re looking to be active on in the second half of the year? Or you just want the dust to completely settle with COVID?

Gary KramerChief Executive Officer

So, I don’t want you to leave here thinking that we’ve got an itchy trigger finger, and we got to go spend money, right? We’re good stewards of the capital, right? We will always look to invest in the business and IT. We will look to invest in business units. We’ll look to invest in branches. We will continue to support the dividend, which we announced in our press release. And then after we get through those, it’s going to be where are you going to get a better return on capital for investors? Are you going to get it through M&A? Are you going to get it through buybacks? And we run through that decision-making process. But when you think of — after going through that, we — when you think of the PEO business in the industry, it’s a fragmented industry now. There’s 900-ish — there’s like 920 PEOs now in the United States. If you look at — of these businesses, how many of them are large or small? The overwhelming majority are small or smaller. So, if you just kind of say there’s 900 PEOs, only 30 of them have work site employees over 20,000.

So, when you get down into the stratification, there’s a fair amount of smaller and a fair amount of regional players. And that’s where we would look. We would look at a regional player, say, in Texas that has four to five branches that when we — we’re not looking to buy a book roll, we’re looking to buy a company that has people in those geographies and product in those geographies. And then, we could take that product, that — those people and make the best of BBSI available to their clients as well, right? So — and then we would have our — call it, our anchor points in there, and then we can continue to grow organically in those states after we get there. So, when we’re thinking about it, it’s — we’re out there, we’re talking, we’re active, but we don’t feel like we need to be aggressive or rush considering where the economy is right now.

Josh VogelSidoti & Company — Analyst

Great. Well, thanks for taking my questions.

Operator

Our next question is from Jeff Martin with ROTH Capital Partners.

Jeff MartinROTH Capital Partners — Analyst

Thanks. Good morning, Kramer and Anthony, hope you’re doing well. I want to — I didn’t hear you mention the same-store sales number for the quarter. If you have that number handy and kind of how that breaks down, it would be helpful.

Anthony HarrisVice President-Finance, Secretary and Treasurer

Yeah. So, same customer sales for the quarter was down 4.5%. And so, as expected, clients reduced headcount. It’s kind of a weird quarter for same customer sales. And in that sense, obviously, it’s highly impacted by COVID. But that reduction was split pretty evenly between headcount, of course, hours reductions. We have seen wage inflation over the year. We have been mentioning that, and there’s some wage inflation that continued to come through there just because that’s a year-over-year number. So, there’s some inflation baked into that as well.

Jeff MartinROTH Capital Partners — Analyst

Okay. And then, what have — Anthony, what was the unencumbered cash number at the end of the quarter?

Anthony HarrisVice President-Finance, Secretary and Treasurer

$130 million.

Jeff MartinROTH Capital Partners — Analyst

Okay. And then, Kramer, you mentioned expanded service offerings for insurance. Curious what specifically that entails. And then secondly, could you touch on your longer-term strategy in terms of de-risking workers’ compensation from the model?

Gary KramerChief Executive Officer

Sure. For the — think of it this way of us being a PEO in these other states now, we had to make some system changes so that we can handle the payroll, the processing, the billing, right? And that’s done, check the box. And then, the other piece is, with our partnership with our front end carrier, we can now offer our workers’ comp insurance product in those states. So check the box, that’s done. So as far as being ready, we are now ready to do the business in, I forget the number, 36 states. And we’re going to — we’re working on the other ones. It’s a little slower than we had hoped. Just as imagined, COVID affects the state government as well, and that’s causing a little bit of a drag for us. But we are — we’ve got a plan to get — to round out the additional 14 states in the next two to three months.

That was the first question. What was the second question?

Jeff MartinROTH Capital Partners — Analyst

De-risking the workers’ comp, longer-term strategy?

Gary KramerChief Executive Officer

Okay. So, we — when we think about our insurance product, right, we’ve come leaps and bounds from where we were as far as how do we bring on risk, how do we price for risk. If we have a claim, how do we handle a claim, good process procedures, controls around the whole process of insurance. And that’s showing with the predictability in our losses. That’s showing with the predictability, I’ll say, or the redundancies that are coming through for the prior accident year. So, being able to do a loss portfolio transfer and being able to sell it at what we had it carried at is a very good sign for investors and for the market because an independent third party was willing to take what we had at the price we had it carried at. And we all know that those companies are in the business to make money, not to lose money. So, they felt comfortable that with that price, they would make money on the trade.

So, with that, it kind of steps into the next evolution of, all right, when we renewed our program, we moved our retention down from $5 million to $3 million. And then, we were able to get our funding and things in line with what we view the losses as, which is another good sign of the carriers coming in at what we think our view of — we all have the same view of the world. But we would look to — if these make sense in the future, we would look to pick off years in the future, right? And we would look to enter into some sort of relationships that potentially de-risk the company on a prospective basis where we don’t take 100% of the risk, maybe we would take a portion of the risk. But we’re able to do this because of how well we do what we do, right? Doing what we do well, being conservative, this affords us the opportunities to explore financial structures like this that honestly were not available to us four years ago.

Jeff MartinROTH Capital Partners — Analyst

Okay. That’s very helpful. Could you elaborate a bit more on the geographic growth and contraction differences between, say, Mountain States and California? Are there specific things going on that are either BBSI-specific or state-specific that are causing that separation in terms of how those different areas are performing?

Gary KramerChief Executive Officer

Sure. It’s a good question. It’s twofold, Jeff. It’s — the Mountain States had a very strong close to 2019 as far as their client adds and client retention, growing very well in the Mountain states. So, if you think of — in the quarter two, they added business at the end of the year, which gives them, call it, revenue in Q2 that wasn’t there in the prior. So, they had a strong client stat (Phonetic). And then, when you look at the Mountain States, they weren’t hit — their economies just were not hit as hard as, say, COVID for shelter-in-place as we were in California. California was down 10%. Ironically, Northern Cal was down 10%. Southern Cal was down 10%. When we look at California in total, it was down 10%. But the Mountain States, I’ll say, their economy has been a little more resilient as far as having the incidents for COVID and the restrictions for the shelter-in-place.

Jeff MartinROTH Capital Partners — Analyst

Got it. Makes sense. Okay. Is there anything specific you would attribute the higher client retention in the quarter? I would imagine — I mean, you’ve already said that you expect that to kind of remain at a better level than it’s been historically. But just curious, is it the value of the assistance you’re providing? Is it companies focusing on getting through this and not making any changes right now? Curious to know what your perspective is on that.

Gary KramerChief Executive Officer

Yeah. The product we’ve been delivering has been phenomenal. Our HR folks in the field have just been rock stars with supporting our clients. And this was a tough time to be a business owner. And I could not imagine doing it without BBSI or somebody like BBSI to have the weight of the world on your shoulders and not have somebody like us that can help support you in that time. So I think the value is there more now than ever. But we — I can’t — we can’t take full credit for that, right? There’s a couple other things of — if you’re a business owner and you’ve got all this risk at your doorstep, right, which is the COVID world, are you going to take additional risk and try to leave BBSI? The answer there is, no. So, we’re seeing — that cuts both ways, right? So that’s why part of the reason we’re not seeing clients go-to-market or come join BBSI is because the risk — they have so much risk right now, why introduce a new variable, why try to change your payroll provider, why try to monkey with your PPP, forgiveness reports and things of that nature. So, there are some influences that are helping us and hurting us the same way.

Jeff MartinROTH Capital Partners — Analyst

Right. Okay. And then final question is, would there be any shift in strategy if this slowdown were to extend well into the middle of next year? And if so, what might those changes in the strategy be?

Gary KramerChief Executive Officer

Yeah. We talked about — we’re learning some lessons in COVID, right? And that’s that we can do our job remotely. We can do our job, arguably, just as efficient, if not more efficient. So, that’s part of the reason when we’re talking about opening our branch in Albuquerque and the second branch in Phoenix. When we open that branch, we’re not going to put any support staff in those branches. That support staff will be hubbed at other branches or at (Phonetic) corporate until they get enough critical mass that we’ll then start to staff at those branches. So we’re looking at things like that, and we’re looking at, call it, structuring our branches in the field of how do they — how can they, in a virtual world, be more efficient and effective and arguably service more clients in this market. So, we’re looking at both. But I’d say the first thing we’re doing, which we’ll open one of the branches this month and the second branch in September, is that true model of supporting the business elsewhere until they get critical mass.

Jeff MartinROTH Capital Partners — Analyst

Great. Thanks for your time, guys.

Gary KramerChief Executive Officer

Thanks Jeff.

Operator

Our next question is from Vincent Colicchio with Barrington Research.

Vincent ColicchioBarrington Research — Analyst

Yeah. Hi, guys. Well, most of mine have been answered already. Just one or two. Just curious, how did pricing change in the quarter and what is your outlook for the second half?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Pricing, the fee we charge our clients is — our admin is relatively consistent. It’s hard to try to push rate in a time when business owners are worried about their own operations. So, now is not the time to try to be aggressive and push rate, even though we think that the value of our service is not going to be contested. I think we’re worth it. The one thing we continue to see is more pricing pressure in California workers’ comp. We continue — or I continue to try to call the bottom, and I get it wrong every quarter. My expectation was with all the uncertainty with COVID, with the capital things that were happening as far as lower investment income and things of that nature, that we would have seen rates start to rise in California, but we haven’t seen that yet. So, there’s definitely still — there’s still some competition, and there’s some competition that is not being good stewards of their capital right now, I’ll say, and it makes it a little more challenging for us in the marketplace. But our teams are pros, and they know how to sell the value of BBSI and not just sell workers’ comp.

Vincent ColicchioBarrington Research — Analyst

Okay. Thanks. And then, does your forecast for the balance of the year assume California improves from the current level of economic activity?

Gary KramerChief Executive Officer

It’s California operates how it did in June and July for us.

Vincent ColicchioBarrington Research — Analyst

Okay. So, you’re not assuming any improvement there per se?

Gary KramerChief Executive Officer

We’re not — it’s both ways, right? We’re not saying it’s going to get better, and we’re not saying that there’s going to be a second shelter-in-place order.

Vincent ColicchioBarrington Research — Analyst

Okay. That’s from me. Thanks.

Operator

Our next question is from Bill Dezellem with Tieton Capital Management.

Bill DezellemTieton Capital Management — Analyst

Thank you. I have a group of questions. First of all, the reference you made earlier in response to someone else’s question that you would hope to be able to grow the business 10% organically, the gross billings, that is. What would that equate to? Assuming no acquisitions, you were just growing 10% organically. What do you want that to translate into for a net income growth?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Net income growth, if we — our target is 15%. That included some investment income. Investment income, we’ve got a — I’ll say, a headwind there now, right? I don’t know if you realize, but in our earnings guide, we moved our investment income number down by $4 million, and that’s just because of the Fed moving the rates 100 bps, right? So, when we were talking about our 15%, that was with rates being where they were after taking the haircut on the rates. I think we should be at a multiple of revenue growth, but it won’t be at 15%. And with rates where they are, I think it will be somewhere around 13%.

Bill DezellemTieton Capital Management — Analyst

That’s helpful. Thank you. And actually, I do want to follow up, take that one step further. If rates stay flat, does that 13% still hold? And I’m sorry, I’m not able to think about this quickly enough. Or after you’ve annualized the lower rates, then would you be able to move up to that 15% income growth, assuming a 10% billings growth?

Anthony HarrisVice President-Finance, Secretary and Treasurer

Yeah. When rates move, if you look at our balance sheet, our OCI, we moved $9 million in the quarter, right? As rates went down, our investments went up. So, we had $9 million of unrealized gains in the quarter. That’s not a P&L impact. That’s a balance sheet impact. So, for the P&L impact, where we saw the rates move was on our cash that we were getting a good deal on, that’s no longer a good deal. Because rates are so low, we were getting the three month plus 25 bps. And the three month was flat to — zero to negative. So in the quarter, you’re seeing our investment income be down because of that variable part. So, when we think about how that’s going to trend over the future, we’re still going to be — our investment income will be less than it was last year. But as we continue to grow and continue to add more assets, that investment income, even at rates this low, will grow in ’20 over ’19. So, when you think about how that’s going to give you your return on capital, or call it, your net income growth, when we think about that 13% number, that 13% number has that baked in there regarding the investments at such a low level here, right? It’s unfortunately, if you’re a saver, you’re getting punished at these levels.

Bill DezellemTieton Capital Management — Analyst

Right. Okay. I’ll shift, if I could, to the inorganic side. The increased credit line, given that you have lots of cash, should we interpret that to mean that you are thinking about acquisitions from the borrowing perspective and you’re really preparing the banking facility for acquisitions? Or is it truly tied to the — solely the uncertainty of whatever COVID may bring?

Gary KramerChief Executive Officer

Yeah. They — those are completely separate and apart. When we increased the credit line, it was just in the abundance of caution in a COVID world. When we think of acquisition, when we talk about our financial moat, we have capital above our financial moat, and that capital above the financial moat would be what we would look, first and foremost, to fund any kind of acquisition. We’re not looking at — I don’t want to scare anybody and think we’re looking at doing debt offerings or looking at doing a stock offering and then diluting our shares. That’s not — we’ve done a lot of hard work to build capital, and it’s just how we put that capital to use.

Bill DezellemTieton Capital Management — Analyst

Thank you. That’s helpful. And speaking of that capital, your restricted cash and investments took a big drop in the Q2 versus the Q1. And of course, that moved to not restricted. But I was a bit surprised to see that given that the $116 million transfer of liabilities didn’t happen until July 1. So, what was it that led to the Q2 improvement in — improvement being a decline in restricted cash?

Anthony HarrisVice President-Finance, Secretary and Treasurer

So, the loss portfolio transfer actually was in June, Bill. So the $116 million transferred out in June, the $48 million release of excess collateral happened in June. So, you really have both of those reducing restricted cash in the quarter. That would be offset, of course, by continued regular funding into the trusts for ongoing business operations.

Bill DezellemTieton Capital Management — Analyst

All right. I’ll need to read that press release more carefully again. Thank you. And then lastly, did the — all of the new clients that you did bring on in Q2, did they all go on to the new myBBSI platform?

Gary KramerChief Executive Officer

Yes. We have about 500 clients now on our new platform. So far, the field is excited. Our clients are excited. The feedback we’ve received has all been positive. And then, in — we’re going to be rolling in anywhere from our conversion side, anywhere from depending upon the week, over the next, call it, until the end of November. We’ll transfer or transition about 400 clients a week onto the old — transfer them from the old system to the new system. And we’re not concerned about the IT side of that or the conversion side. Really, it’s education to the client and to be able to handle and service questions, which is why we don’t go with the big bang. So we’ve got the system up. The system is running really well. June, our new business is on there. We’re out there selling it in the market. And now we’re starting to do our conversions for our clients from the old systems to the new system.

Bill DezellemTieton Capital Management — Analyst

And you had mentioned that your win rate with prospects basically held steady. Would you expect your win rate to increase with time here now that you are selling on a more robust platform?

Gary KramerChief Executive Officer

That is the goal, right? The goal is to get better at what you do and you get more at what you do, right? So you get more in the pipe and you get better at what comes in the pipe, and that’s what we work on, and we’ve got teams that are focused on that as far as sales and marketing initiatives. Too early to say, Bill. I don’t want to — I can tell you what we aspire to be, but I can’t tell you it’s in the numbers yet.

Bill DezellemTieton Capital Management — Analyst

Understood. Thank you for taking my question, and congratulations on a solid quarter in a crazy environment.

Gary KramerChief Executive Officer

Thank you.

Anthony HarrisVice President-Finance, Secretary and Treasurer

Thanks Bill.

Operator

Ladies and gentlemen, we have reached the end of the question-and-answer session and are out of time for today’s call. I’ll now turn the call back to Gary Kramer for closing remarks.

Gary KramerChief Executive Officer

Thank you. Thank you, everybody, for taking the time to be on the call. Thank you for all the BBSI employees for all the hard work they did in the quarter. This was a challenging quarter for the business owner and a challenging quarter for all of our employees that were helping service our clients. So for them, I thank them from the bottom of my heart. With no BBSI employees, there is no BBSI. And I just want to thank everybody for all their hard work.

Operator

(Operator Closing Remarks)

Duration: 60 minutes

Call participants:

Gary KramerChief Executive Officer

Anthony HarrisVice President-Finance, Secretary and Treasurer

Christopher MooreCJS Securities — Analyst

Josh VogelSidoti & Company — Analyst

Jeff MartinROTH Capital Partners — Analyst

Vincent ColicchioBarrington Research — Analyst

Bill DezellemTieton Capital Management — Analyst

More BBSI analysis

All earnings call transcripts


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Radius Health Business Update

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Radius Health Business Update
  • TYMLOS® new patient adds in April: modest growth vs. previous 4-month trailing averages

  • ~67% of new patients in April were initiated by a fracture focused bone health account

  • Meaningful FDA guidance on generic peptide requirements published on May 19, 2021

  • Anticipate abaloparatide depot formulation technical development work to commence 2H, 2021

  • RAD011 Type C meeting with the FDA on Prader Willi Syndrome (“PWS”) the week of June 14

BOSTON, June 02, 2021 (GLOBE NEWSWIRE) — Radius Health, Inc. (“Radius” or the “Company”) (NASDAQ: RDUS), provided a business update covering continued progress for the Company. Additional business updates will be provided as progress is achieved.

ABALOPARATIDE ASSET

U.S. TYMLOS Commercial Performance:

  • TYMLOS added ~1,650 new patients in April; 1% growth vs. trailing 4-month average

  • New patients: defined as those who have been prescribed TYMLOS and received their first dose

  • ~67% of new patients in April were initiated by a fracture focused bone health account

  • Added 45 new fracture / bone health focused prescribers during the month of April

Life Cycle:

  • ATOM (Male) Phase 3 pivotal study on schedule for readout: 2H, 2021

  • wearABLe (Transdermal System) Phase 3 pivotal study on schedule for readout: 2H, 2021

  • Anticipate abaloparatide depot formulation technical development work to commence 2H, 2021

Geographic Footprint:

  • Europe: re-submission expected for abaloparatide SC to EMA in 2H, 2021

  • Canada: abaloparatide SC submission – by our partner – expected in January, 2022

  • Japan: ‘planning discussions’ with PMDA, a precursor to potential abaloparatide-TD agreement with Teijin

  • Rest of world: multiple discussions ongoing with variety of counterparties

Intellectual Property Portfolio Advancement:

  • Three U.S. patents are presently listed in the Orange Book for TYMLOS: U.S. Patent No. 7,803,770 which expires on April 28, 2031 and U.S. Patent Nos. 8,148,333 and 8,748,382 which each expire on October 30, 2027

  • A fourth U.S. patent, U.S. Patent No. 10,996,208 directed to certain methods of analyzing abaloparatide to detect and quantify presence of beta Asp10, was issued on May 4, 2021 and will be added to the Orange book listing shortly; this patent expires on April 30, 2038

  • A new Japanese patent covering the abaloparatide transdermal system and its use in treating osteoporosis was granted in April, 2021 and will expire October 8, 2036

FDA Guidance on Synthetic Peptides:

On May 19, 2021 the FDA published updated guidance and requirements for synthetic peptides and what would be required in any generic filings and advancement. Radius views this new guidance as meaningful in assessing the probability of a generic synthetic peptide being filed and gaining market entry.

In sum, the Company views these newly communicated FDA requirements as making it significantly more challenging to advance and develop a generic version of abaloparatide.

The key components of the new FDA guidelines include:

  • Recombinantly sourced peptides cannot be approved in an ANDA and must be submitted in a 505(b)(2) NDA

  • Explicit references to the potential for significant consequences if anti-drug antibodies cross-react against endogenous peptides

  • New impurities must be within the FDA’s threshold; if greater, must be submitted as a 505(b)(2)

  • Explicit expectation: ANDA with new impurity must evaluate immunogenicity risks prior to filing

RAD011 ASSET

  • FDA Type C meeting for PWS will take place the week of June 14

  • Written minutes from the FDA meeting expected by the end of July

  • Post FDA discussion, expectation is to initiate a pivotal PWS trial before year end

  • Additional orphan indications being assessed in parallel – decisions and clarity in 2H, 2021

  • Multiple Advisory Board meetings completed: U.S., UK, EU for PWS plus a Psychiatry meeting

  • Internal team formed: clinical, pharm. science, regulatory, bio-stats, CMC, global franchise

  • External team established: manufacturing & supply chain, development, regulatory, advocacy

About Radius
Radius is a commercialized biopharmaceutical company committed to serving patients with unmet medical needs in endocrinology and other therapeutic areas. Radius’ lead product, TYMLOS® (abaloparatide) injection, was approved by the U.S. Food and Drug Administration for the treatment of postmenopausal women with osteoporosis at high risk for fracture. The Radius clinical pipeline includes investigational abaloparatide injection for potential use in the treatment of men with osteoporosis; an investigational abaloparatide transdermal system for potential use in the treatment of postmenopausal women with osteoporosis; the investigational drug, elacestrant (RAD1901), for potential use in the treatment of hormone-receptor positive breast cancer out-licensed to Menarini Group; and the investigational drug RAD011, a synthetic cannabidiol oral solution with potential utilization in multiple endocrine and metabolic orphan diseases, initially targeting Prader-Willi syndrome.

About TYMLOS (abaloparatide) injection
TYMLOS (abaloparatide) injection was approved by the U.S. Food and Drug Administration for the treatment of postmenopausal women with osteoporosis at high risk for fracture defined as history of osteoporotic fracture, multiple risk factors for fracture, or patients who have failed or are intolerant to other available osteoporosis therapy.

About ATOM Phase 3 Study
The ATOM Phase 3 study is a randomized, double-blind, placebo-controlled study to assess efficacy and safety of abaloparatide injection in 228 men with osteoporosis. The primary endpoint is change in lumbar spine BMD at 12 months compared with placebo, and if successful, will form the basis of a supplemental NDA seeking to expand the use of TYMLOS to treat men with osteoporosis at high risk for fracture.

About the Abaloparatide Transdermal System and wearABLe Phase 3 Study
The abaloparatide transdermal system was developed in a collaboration between Radius and Kindeva Drug Delivery (“Kindeva”) (formerly 3M Drug Delivery Systems) with the application of Kindeva’s innovative microstructured transdermal system technology. The Phase 3 wearABLe study is the first pivotal study to evaluate treatment using a novel non-injectable delivery of an anabolic therapy. The wearABLe study is a pivotal, randomized, open label, active-controlled, bone mineral density (“BMD”) non-inferiority bridging study that will evaluate the efficacy and safety of abaloparatide transdermal system versus TYMLOS (abaloparatide) injection in approximately 500 patients with postmenopausal osteoporosis at high risk for fracture. The primary endpoint of the study is the percentage change in lumbar spine BMD at 12 months.

About Elacestrant (RAD1901) and EMERALD Phase 3 Study
Elacestrant is a selective estrogen receptor degrader (SERD), out-licensed to Menarini Group, which is being evaluated for potential use as a once daily oral treatment in patients with ER+/ HER2- advanced breast cancer. Studies completed to date indicate that the compound has the potential for use as a single agent or in combination with other therapies for the treatment of breast cancer. The EMERALD Phase 3 trial is a randomized, open label, active-controlled study evaluating elacestrant as second- or third-line monotherapy in ER+/HER2- advanced/metastatic breast cancer patients. The study has enrolled 466 patients who have received prior treatment with one or two lines of endocrine therapy, including a cyclin-dependent kinase (CDK) 4/6 inhibitor. Patients in the study were randomized to receive either elacestrant or the investigator’s choice of an approved hormonal agent. The primary endpoint of the study is progression-free survival (PFS) in the overall patient population and in patients with estrogen receptor 1 gene (ESR1) mutations. Secondary endpoints include evaluation of overall survival (OS), objective response rate (ORR), and duration of response (DOR).

About RAD011
Investigational drug RAD011 is a pharmaceutical-grade synthetic cannabidiol oral solution, manufactured utilizing traditional pharmaceutical manufacturing processes. The product has purity specifications that meet standardized regulatory and quality control requirements and, compared to the process of developing a plant-derived product, the synthetic manufacturing process usually enables increased consistency and greater precision in the product supply. RAD011 has been assessed in over 150 patients across multiple indications and has potential utilization in multiple endocrine and metabolic orphan diseases. Radius is initially targeting Prader-Willi syndrome (PWS) and anticipates initiating a pivotal Phase 2/3 study for patients with PWS in the second half of 2021 pending regulatory discussion with the U.S. Food and Drug Administration (FDA).

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations regarding continued commercialization of TYMLOS in the U.S.; our expectations regarding our clinical trials, studies and other regulatory initiatives, including our wearABLe and ATOM Phase 3 clinical trials; and the progress in the development of our product candidates, including RAD011.

These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the adverse impact the ongoing COVID-19 pandemic is having and is expected to continue to have on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials, preclinical studies, and employees; quarterly fluctuation in our financial results; our dependence on the success of TYMLOS, and our inability to ensure that TYMLOS will obtain regulatory approval outside the U.S. or be successfully commercialized in any market in which it is approved, including as a result of risk related to coverage, pricing and reimbursement; risks related to competitive products; risks related to our ability to successfully enter into collaboration, partnership, license or similar agreements; risks related to clinical trials, including our reliance on third parties to conduct key portions of our clinical trials and uncertainty that the results of those trials will support our product candidate claims; the risk that adverse side effects will be identified during the development of our product candidates or during commercialization, if approved; risks related to manufacturing, supply and distribution; and the risk of litigation or other challenges regarding our intellectual property rights. These and other important risks and uncertainties discussed in our filings with the Securities and Exchange Commission, or SEC, including under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2020 and subsequent filings with the SEC, could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor & Media Relations Contact:
Ethan Holdaway
Email: investor-relations@radiuspharm.com
Phone: (617) 583-2017

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Central Maine business briefs: UMA vice president receives award

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Central Maine business briefs: Kennebec Savings Bank, Kennebec Federal Savings merger approved

 

Jonathan Henry, University of Maine at Augusta vice president of enrollment management and marketing, received the Martin Gallant Distinguished Counseling Professional Award from the Maine Counseling Association recognizing his distinguished career in the field. Jeremy Bouford, UMA coordinator of recruitment and outgoing president of the counseling association, presented him the award at the organization’s annual meeting this May.

“It was my distinct pleasure to present this award to Jon Henry not only on behalf of the Maine Counseling Association but also as a trusted and valued colleague,” said Bouford, according to a news release from UMA.

Jonathan Henry Photo courtesy of UMA

“I am honored to receive this award from the Maine Counseling Association,” said Henry. “Over 36 years in the admissions counseling and enrollment profession, I recognize now more than ever the role that having a counseling background has played in helping me succeed in my work with students, and helping to administer a university.”

Henry has worked in college admissions counseling and enrollment management for 36 years, the last 22 in Maine.

“Marty” Gallant was a long-serving school counselor in Caribou, who was actively involved with and dedicated to the Maine Counseling Association and the profession of school counseling. Maine Counseling Association established this award to honor him upon his retirement in 2016.

Association members work in a variety of settings across the profession including K-12 schools, colleges and universities, community-based agencies, clinical facilities and private practice.

Benton company names director of programs

BENTON — Assistance Plus,  a 29-year-old home health care, behavioral health and intellectual disability agency headquartered in Benton, has promoted Natalie Childs to director of programs.

Natalie Childs Contributed photo

Childs has been employed by Assistance Plus since June 2010, starting as a daily living support specialist, and most recently serving as the organization’s BH/DD program manager. According to Crystal Bailey, the agency’s human resources director, the promotion is a result of her hard work and dedication. Natalie will remain in her current office location at the company’s headquarters in Benton.

Childs graduated from Erskine Academy and holds a bachelor’s degree in criminal justice from Thomas College. She  is completing a master’s degree in health care administration from Fitchburg State University.

Assistance Plus has offices in Benton, Waterville and Wilton.

2021 Mainebiz Woman to Watch nominees sought

PORTLAND — Mainebiz seeks nominations for female business owners, CEOs, presidents and top executives with established track records of success and who have been trailblazers and mentors to be its 2021 Women to Watch.

Criteria:
• The nominee must be the president, CEO or executive director at her company or organization.
• The nominee should have an established track record of business success.
• The nominee and her company must have made outstanding contributions to their company, industry and community.

Nominate a 2021 Mainebiz Woman to Watch by June 28. Visit mainebiz.biz/nominations and complete the short form.

The Women to Watch awards program is sponsored by Drummond Woodsum, Northeast Delta Dental, TD Bank and Vistage. Chosen nominees will be featured in the Aug. 9 issue of Mainebiz and will be honored at the annual Women to Watch reception in person during the middle of September. The date and location will be announced soon.

Kennebec Savings Bank announces new hires

Paige O’Donnell Contributed photo

AUGUSTA – Kennebec Savings Bank President and CEO Andrew Silsby recently announced two new hires, each of whom come with strong backgrounds in banking and customer service.

Paige O’Donnell, who has joined Kennebec Savings Bank as vice president of retail banking, brings more than eight years of banking experience. Her most recent position was on TD Bank’s Small Business Banking Team as their team manager.

Amanda Dyer Contributed photo

“Paige brings new insight and energy to our retail team,” said Silsby, according to a news release from the bank. “We are fortunate to have her join Kennebec Savings Bank at such an exciting time in our history. The bank is growing, and Paige will help us continue to offer competitive and quality products to our customers.”

Amanda Dyer joins the bank with 12 years of experience. Prior to joining the bank, Dyer served as branch manager and loan officer for Norway Savings Bank at their Topsham location. Dyer is originally from the Freeport area and graduated from Freeport High School.

“Amanda will be a great asset to our Freeport Team,” said Silsby. “She is familiar with the Freeport area, and will bring valuable knowledge and expertise to our team. We look forward to her leadership.”

Kennebec Behavioral Health leaders recognized

Rob Rogers Contributed photo

AUGUSTA — At the 2021 Maine Prevention Professionals Conference held on May 19, KBH’s Robert Rogers was recognized with the 2021 Neill E. Miner Memorial Prevention Award. This award recognizes an individual who has made a significant contribution in the field of prevention. He has been at the forefront of so many initiatives and approaches to evidence-based prevention in Maine. He has been able to forge a unique bridge between the prevention and treatment disciplines. “Rob is an extraordinary prevention professional who has made significant contributions to the field and positively impacted the lives of countless youth and adults throughout central Maine,” said Tom McAdam, KBH chief executive officer, according to a news release from KBH. A surprise guest, McKenna Rogers, Rob’s daughter who also works in behavioral health, presented him with the award.

Dr. Alane O’Connor Contributed photo

At the Co-Occurring Collaborative Serving Maine Annual Summit held on May 6, the Visionary Leadership award was presented to Dr. Alane O’Connor. O’Connor is the first director of perinatal addiction treatment at Maine Medical Center, serving pregnant women in the Portland area. O’Connor also provides addiction medicine through Kennebec Behavioral Health’s Opioid Health Home in Skowhegan and is chairperson of Maine’s Opioid Response Clinical Advisory Committee. The collaborative’s Visionary Leadership Award recognizes an individual, organization or an initiative in the behavioral health care field that has demonstrated outstanding leadership in improving the lives of individuals with mental illnesses and substance use disorders and/or their communities. “For her dedication to advance the quality of substance use treatment and raising awareness to the needs of pregnant and parenting women living with this disease,” said Liam Shaw, CCSME Board Member, in the release.

Kennebec Behavioral Health was founded in 1960 and operates clinics in Waterville, Skowhegan, Winthrop, Augusta and Farmington.

Northern Light Health announces finance leadership changes

Chris Frauenhofer, vice president of finance of Northern Light Inland Hospital and interim administrator of Northern Light Continuing Care, Lakewood in Waterville, has been named as the new vice president of finance for Northern Light Health’s system Medical Group.

Chris Frauenhofer

Frauenhofer joined Northern Light Health in 2013, starting at Maine Coast Memorial Hospital before moving to Inland Hospital in 2017. Before joining Northern Light Health, he served in senior finance roles for more than 20 years at hospitals in New York, including Alice Hyde Medical Center and Niagara Falls Memorial Medical Center.

Frauenhofer received a master’s in business administration degree from Niagara University (New York) and a Bachelor of Science degree in business administration/registered accounting (program from State University of New York at Buffalo).

Frauenhofer lives in Mariaville. He will remain in the interim role at Lakewood until a new administrator is recruited.

Randy Clark Contributed photo

Randy Clark, vice president of finance and operations at Northern Light Sebasticook Valley Hospital in Pittsfield, will expand his duties to include Inland Hospital and Lakewood, becoming vice president of finance for both hospitals and the continuing care facility.

A resident of Vassalboro, Clark just celebrated 25 years with Northern Light Health. He started as a controller at Sebasticook Valley Hospital in 1996 and became vice president of finance in 2005. In 2016, operations was added to his leadership role. For a few years, he oversaw finance as vice president for both CA Dean Hospital in Greenville and Sebasticook Valley Hospital.

Clark earned his Bachelor of Science degree in business administration from the University of Maine (Orono) and his Master of Business Administration degree from Thomas College (Waterville).

“Chris and Randy have been vital to our local leadership teams, and integral to system finance work. We know they will continue to help our system and member organizations succeed in their new and expanded roles — not only when it comes to finance, but with all aspects of our mission to improve the health of the people and communities we serve. Both Chris and Randy have a passion for excellent service and finding new ways to deliver on our brand promise,” said Terri Vieira, president of Inland Hospital, Continuing Care, Lakewood, and Sebasticook Valley Hospital, according to a news release from Northern Light Health.

Maine Dental Association partners with Maine Needs

The Maine Dental Association recently partnered with nonprofit organization Maine Needs to assemble and distribute 200 cleaning and hygiene kits to four sites.

The association, though its donation campaign called Maine Needs a Smile, collected personal hygiene items such as toothbrushes, toothpaste, soap, deodorant and shampoo, and basic cleaning supplies, such as laundry detergent, all-purpose cleaner and trash bags, to help Maine families in need.

The initiative was started by three MDA member dentists, Dr. Meg Dombroski, Dr. Kathryn Horutz and Dr. Nicole Kimmes, along with MDA Executive Director Angela Westhoff. The group was familiar with the Maine Needs nonprofit organization, which strives to help individuals and families in Maine meet basic, material needs by providing donated clothing and essential products and household items, and which partners with schools, caseworkers, nurses and nonprofits throughout the state to provide those material resources.

“One of the most rewarding aspects of dentistry is the opportunity to make a difference in people’s lives every day. The Maine Needs A Smile community effort made it possible for dental professionals across Maine to join together to have a positive impact beyond our chairs,” said Kimmes, according to a news release from the association

One of the ways Maine Needs provides for individuals and families is through different “kits” that the public can put together and donate.

The Maine Needs a Smile initiative originally had a goal of assembling 100 cleaning and hygiene kits. Because of the support of MDA member dentists, dental staff, and the general public, 200 kits were put together and were distributed between four sites. Kits were distributed at the Community Concepts Early Learning Center in Farmington, River Valley Free Store in Mexico, Kaydenz Kitchen Food Pantry in Lewiston, and Penney Memorial United Baptist Church in Augusta.

Gardiner FCU gives to local food pantries, organizations

Gardiner Federal Credit Union recently hosted a small reception to distribute the funds raised in 2020. The guests were representatives of area food pantries and organizations that help local people with food insecurities. There are eight organizations, each receiving a check in the amount of $2,482.38.

When the pandemic hit the number of people in need of these services grew. There were many new faces. Initially, some pantries were overwhelmed. Thankfully, those able to give dug deep and helped them make certain no one was turned away empty-handed. Individuals, grocers and businesses helped keep them afloat.

The Tanzanian proverb, “Little by little, a little becomes a lot.” In most cases, GFCU raises its Ending Hunger funds, one dollar at a time. So, to the staff and the members, they may think that dollar won’t make a difference, but it does. In this case it added up to almost 20,000 of those dollars. Their efforts and the generosity of many, do make a difference and the funds add up to a lot.

Throughout the months of June and July, GFCU will sell Cash Calendars for Ending Hunger. The calendars are $10 each. A total of $2,400 in prizes, will be drawn each weekday in August. Winners will receive either $100 or $200, depending on which day(s) they win. Anyone with $10 can purchase a calendar. It is not necessary to be a member to support any of its fundraisers.

For more business news, visit CentralMaine.com.

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Here are 100+ AAPI-owned businesses to shop in 2021

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Here are 100+ AAPI-owned businesses to shop in 2021

As it did for companies across the globe, pandemic-related freight issues increasingly complicated the supply chain for Sahra Nguyen, founder and CEO of Nguyen Coffee Supply — and made it much more expensive to manage. And the spike in anti-Asian American and Pacific Islander violence increasingly strained an already difficult year:

“The biggest challenge is staying mentally, emotionally and physically safe so that I can continue to show up for my business, family and community,” said Nguyen.

AAPI-owned businesses have suffered tremendously since the onset Covid, according to a survey from the Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (ACE). Of the approximately 900 AAPI small business owners surveyed…

  • More than 80 percent reported negative effects
  • 10 percent have closed their business
  • And 45 percent have lost or let go of employees

In general, there’s been a 169-percent increase in hate crimes in major cities — nonprofit advocacy group Stop AAPI Hate received more than 6,600 reports of anti-AAPI violence since it launched in March 2020 — unemployment rates rose disproportionately and solutions have made headway, such as the Covid-19 Hate Crimes Act. All of it has added to an increased national focus on the challenges and realities that AAPI communities face.

Within the past year, the visibility of anti-AAPI violence in the U.S. — which goes back centuries — caused a large mobilization of people, organizations and retailers to up their support of the AAPI community through advocacy, donations and awareness in light of AAPI Heritage Month. Multiple online retailers and brands have been increasing efforts to highlight AAPI-owned businesses.

  • Amazon and Etsy launched storefronts highlighting AAPI small businesses.
  • Reviews site Yelp announced a new feature last month by which businesses can self-identify as “Asian-owned,” making it easier for shoppers to find them.
  • Shop by Shopify, a free app to navigate small businesses, unveiled a directory of Asian-owned businesses in March.
  • Food delivery giant Grubhub began its Donate the Change program this month, giving all proceeds to National ACE and AAPI-owned restaurants across the nation.

Jan Lo, CEO of travel brand Lo & Sons, said reports of attacks on members of the AAPI community this year — specifically involving anyone around his mom’s age — brought his family’s heritage a lot more personal. “We’re extremely proud of our AAPI heritage, but we have also tried to build an ethos around inclusivity,” he said. The challenges “can also be viewed as opportunities, as I think many people can connect to our story of our mom inspiring her sons to help her achieve her professional dreams — not just because we’re Asian.”

AAPI Heritage Month “gives us an opportunity to lift each other up, to celebrate and express pride in different parts of our community,” explained Ian Shin, assistant professor of history and American culture at the University of Michigan, adding that it also offers an “opportunity to revisit history and remind people that, in fact, anti-AAPI violence is not un-American — it’s woven into the fabric of American society from the mid 19th century onward.”

AAPI-owned businesses in 2021

AAPI-owned businesses nationwide were the most negatively impacted throughout the pandemic, demographically speaking, according to CNBC: The number of working AAPI business owners fell by 20 percent last year. Among the most affected areas was San Francisco’s Chinatown, which saw 75 percent of its storefronts become nonoperational at some point last year.

But what is an AAPI-owned business in the first place? The U.S. Small Business Administration (SBA) told us that it doesn’t specifically define what constitutes an AAPI-owned business. The U.S. Census Bureau does, however: having persons of Asian or Native Hawaiian and Pacific Islander origin owning 51 percent or more of the business — akin to its definitions of Black-owned businesses and women-owned businesses. This definition covers East Asia (like China, Japan and more), Southeast Asia (including the Philippines, Vietnam and more) and the Indian subcontinent (Pakistan, Bangladesh and more) — the three comprise more than 19 countries and 20 million citizens in the U.S. can trace their origins to here — as well as the Polynesia, Micronesia and Melanesia subregions, which include Native Hawaiian, Samoan, Fijian and Tahitian people, among others.

Despite these definitions, or lack thereof, the two agencies do provide some noteworthy insights. Based on the most recent data released by the Census Bureau, here’s what we know:

  • In 2012, there were roughly 2 million AAPI-owned businesses in the U.S. (2016 data)
  • In 2018, there were more than 577,000 Asian-owned and over 6,600 Pacific Islander-owned employer businesses in the U.S. (2021 data)

Sarah Paiji Yoo, co-founder and CEO of eco-friendly cleaning brand Blueland, said she’s “incredibly proud” to be an Asian American running a business but is often subject to racism, especially on social media — people comment assumptions regarding where Blueland manufactures its products, for example. Then there’s the “model minority myth,” a harmful argument that typically praises Asian Americans for economic, academic and cultural success based entirely on stereotypes. It’s yet another challenge for Lin Chen, founder and CEO of wellness brand Pink Moon. “People continue to generalize, stereotype and be selective in who they want to listen to, invest in [and] purchase from,” she told us.

In our guide to women-owned brands, owner and founder of Hero Cosmetics Ju Rhyu told us that running a business is accompanied by “a lot of responsibility” to support her community, “especially as a business owner, since there is privilege and influence in being in this position.” That privilege comes at a time when 44 percent of unemployed Asian American women have been out of work for at least six months. This year, over 1,000 AAPI executives like DoorDash founder Tony Xu and Zoom CEO Eric Yuan donated $10 million to groups supporting the AAPI community, including nonprofit Asian Pacific Fund and the Asian-Americans Advancing Justice, a legal advocacy group for hate crime victims. Other business leaders pledged $125 million to launch the Asian American Foundation, which will support AAPI organizations and causes over the next five years — the largest philanthropic commitment in history fully focused on the AAPI community. The foundation raised another $125 million from organizations like Walmart, Bank of America and the Ford Foundation.

While noteworthy efforts, the AAPI community receives less than 1 percent of philanthropic funds despite making up 7 percent of the population and the country’s fastest growing racial group, according to the Pew Research Center.

Being a South Asian founder, Silk + Sonder’s Meha Agrawal said “it often feels like all the odds are stacked up against us: We have to work harder [and] prove ourselves every step of the way.” But throughout her career, she’s learned that “the most important thing a female founder or woman of color can do is make sure that people in seats of privilege are brought along on our journey” to have transparent conversations while building a business.

Each Fall and Spring, AAPI nonprofit Gold House hosts the Gold Rush cohort of Founders — Sahra Nguyen participated last year — wherein founders attend weekly master classes and panels led by advisors, expose their brands to potential investors and influencers, and join a network of founders that meet regularly to share insights and build partnerships. ACE National also provides guidance for starting and maintaining a business, including how to navigate the Covid-19 pandemic, loans, government programs and health and wellness matters.

Business owners said messaging and connecting with other founders on social media, from Twitter to LinkedIn, helped them network. Founders “will be extremely helpful and crucial as you build [your business] and oftentimes they’ll be the only ones who can empathize and understand what you are going through in successes and failures,” noted Rhyu.

Pink Moon’s Lin Chen said she’s part of multiple networking groups on Facebook for Asian creatives and entrepreneurs, including Asian Hustle Network and Asian Creative Network.

Notable AAPI-owned products in 2021

Here are 14 items from AAPI-owned brands that stood out to us, from travel essentials and skincare products to eco-friendly tools and home goods. Since there is no central directory of AAPI-owned businesses, as defined by the Census Bureau’s 51-percent edict, we asked each business below to confirm that it meets the criteria: having persons of Asian or Native Hawaiian and Pacific Islander origin owning 51 percent or more of the business.

Pink Moon allows users to filter wellness and skincare products they see by skin type, age and goals.

One of their bestsellers includes this rose quartz gua sha that stimulates lymphatic drainage to reduce puffiness and increase elasticity in the skin, according to the brand. In including this product in their line, Chen initially wanted to celebrate Traditional Chinese Medicine and her heritage, “I want to contribute to the diverse voices in this industry and push for more inclusivity and positive change,” she said. For maximum results, the brand suggests users of the gua sha pair it with the Over the Moon Gua Sha Facial Oil, which is made from a sunflower-moringa oil blend that soothes skin inflammation.

Amy Liu originally started the company to deal with her own eczema and now Tower 28 is the “first and only makeup brand to 100-percent follow the National Eczema Association’s ingredient guidelines and avoid every known skin irritant and allergen for all skin sensitivities,” she shared. This AAPI month, Liu wants consumers to realize AAPI heritage “is about recognizing the incredible people in our community who are pushing the boundaries and speaking up about racism and the need for more Asian representation.”

Made with apricot and raspberry seed oil, this lip gloss is one of the most popular products. Designed to hydrate your lips without drying them out, according to the brand, the gloss comes in four shades: Coconut, Cashew, Oat and Almond.

Frustrated with the fit of his dress shirts, Taiwanese-American Wesley Kang founded Nimble Made “to bring more representation and inclusion in sizing standards, starting with a slim fit that actually fits,” he elaborated.

Made from 100-percent cotton, the brand’s machine-washable dress shirts feature 2-button adjustable rounded cuffs and a Franklin semi-spread collar.

Terrence Santos founded his company in 2015 when he was expecting his first child. Originally, he started looking for toys that would teach the Filipino language to his child, but found nothing — so he created a toy company that provided options. Now his company sells toys that teach Tagalog, Ilocano, Bisaya and Hawaiian. On each of the ten blocks, the company has engraved the Roman number, Tagalog translation, Mahjong character and an English translation.

Eunice Byun and Dave Nguyen are challenging the notion that we need dozens of gadgets to cook delicious meals. A few years ago, the ex Chanel and Revlon executives founded Material Kitchen, a direct-to-consumer company that offers a simplified kitchen starter set at an affordable price. This seven-piece set, which has a 5.0-star average rating from almost 100 consumers, features an 8” knife, 4” knife, tongs, wooden spoon, metal spoon, slotted spatula and wooden holder. What’s more is you can customize the set’s wood type and handle color.

Private Policy is a “genderless” clothing company founded by Haoran Li and Siying Qu, two former Parsons graduates. Inspired by the youth culture in New York City, the pair design clothes without the traditional menswear and womenswear labels. Made from 100-percent Rayon, this jacket can be worn with the sleeves on or off, serving multiple purposes. You can also shop their collection at Selfridges.

Nearly two decades ago, Taiwanese American Melinda Hwang’s father worked with a scientist (and family friend) to come up with a nanofiber membrane mask during the 2003 SARs epidemic. When the Covid-19 pandemic hit the U.S., Hwang’s family sent her those masks from Taiwan and, thus, Happy Masks was born.

The brand’s Pro Series offers a range of sizes — with the small size fitting ages three to 10 — and can withstand at least 50 washes by hand. It has adjustable ear straps and a nose wire to fit different face shapes, while its “parrot beak” design leaves enough room between the mask and the mouth and nose in order to breathe comfortably for long-term wear.

Nguyen Coffee Supply imports Vietnamese coffee beans from its partner farms in Vietnam and roasts them fresh weekly in Brooklyn. The Original Vietnamese Coffee Trio features three different coffee blends: Moxy, Truegrit and Loyalty Arabica-Robusta. The coffee comes finely ground, and you can brew it using the brand’s Phin Filter.

CEO and founder Sahra Nguyen said AAPI month is an important time for the community to share their stories. “Many people don’t understand our community because we’ve been erased and ignored for so long,” Nguyen said. “Taking the time to learn about our community’s unique experiences will deepen our connection and sense of shared humanity. From here, we can effectively work together to build a better world.”

CEO Jan Lo said the brand was inspired by his mom’s need for a lightweight, stylish and functional carry-on bag to take with her while traveling. While designing the brand’s first bag — The O.G. — Lo said he “quickly found that it wasn’t just my mother in need of a travel bag that didn’t sacrifice style for functionality.” Lo & Sons, which was co-founded by Lo, his mother and his brother, sells a variety of bags for men and women, including The Catalina Deluxe, which is featured in our roundup of the best weekender bags. The company sells apparel and face masks, too.

Edward and Judy Kwon founded the family-owned CALPAK in 1989 with the mission of making quality bags at an accessible price. Their daughter Jennifer Kwon has run the company since 2013. CALPAK’s bags range in size, style and color from the Kaya Laptop Backpack to the Hue Duffel Bag, which was also featured in our roundup of the best weekender bags. Beyond bags, luggage and organizers, CALPACK also sells men’s and women’s apparel, as well as wellness items like face masks, hand sanitizer and linen and room spray.

After five years of running gr8nola as a side hustle, founder Erica Liu Williams left her 10 year tech career to pursue the brand full time. gr8nola sells granola that’s free from refined sugar, dairy, soy and GMOs in a variety of flavors, from Peanut Butter and Matcha to Cacao and Cinnamon Chai. Williams said she feels it’s her responsibility to use her platform to share her perspective and the voices of others in the AAPI community. “I feel socially responsible to myself, family and broader community to be a role model for others by leading by example and showing other young girls and people who look like me that you can achieve success on your own terms, without succumbing to becoming a “model minority” stereotype,” Williams said.

Silk + Sonder is a subscription service that sends members guided monthly journals with prompts inspired by positive psychology, as well as gives them access to virtual programming for peer-to-peer support. “Silk + Sonder’s mission is to solve the emotional health epidemic for customers versus being a band-aid fix,” said Meha Agrawal, the company’s founder. “At its core, Silk + Sonder is a space for mindfulness, journaling, planning, tracking and creative expression all in one.”

When Sarah Paiji Yoo, Blueland’s CEO, decided to reduce her personal plastic consumption, she quickly realized how difficult it was to do. “Many household items use single-use plastic in their packaging,” said Yoo. “This ultimately is what led me to found Blueland, as no one should have to sacrifice a clean home and clean clothes for a clean planet.” Blueland sells refillable cleaning products like Glass + Mirror, Multi-Surface and Bathroom sprays — included in The Clean Up Kit — all of which are certified by the EPA’s Safer Choice program, as we previously reported in our guide to eco-friendly cleaning supplies.

Stephanie Hon launched Cadence with the mission to eliminate single-use travel-sized plastic in February of last year — a month before the Covid-19 pandemic hit the U.S. “We definitely put a pause on talking about air-travel, going to the gym before work, date nights, etcetera,” said Hon. But despite launching in the midst of the pandemic, the brand’s sustainable capsules repeatedly sold out. Cadence specializes in magnetic and refillable containers made from recycled ocean bound plastic that snap together and can keep your small travel essentials and daily items organized. You can buy the capsules individually or get them a bundle of six, and they come in a variety of colors including Lavender and Terracotta. Hon said one of her biggest challenges as an AAPI business owner was being “bullish” and retraining her inclinations. “To say I think we’re going to be a $XM company, to say it’s a great opportunity for people to be involved. There’s a perfect balance of humility and confidence that comes to light,” she said.

109 AAPI-owned brands to support in 2021

In addition to our favorite products from AAPI-owned brands, we’ve rounded up some businesses across various Shopping reader interests, including home, food, beauty and wellness. We asked each business below to confirm it meets the Census Bureau’s criteria of at least 51 percent AAPI ownership. While this list of AAPI-owned companies and products isn’t exhaustive, we aim to actively update this feature to help keep you informed about AAPI-owned companies worth considering.

AAPI-owned home and kitchen brands

Revamp your kitchen decor with a new apron or oven mitts from The Homebodies or treat yourself or your favorite friend to a new indoor plant from Bark & Vine.

  1. Aerangis
  2. Anak Toy Kompany
  3. Bark & Vine
  4. Blueland
  5. The Homebodies
  6. ILHA Candles
  7. KonMari
  8. Material Kitchen
  9. O-M Ceramics
  10. Pawena Studio
  11. Rooted
  12. Soothi
  13. Trail575
  14. Woo Ceramics

AAPI-owned beauty and skincare brands

Update your skincare regime by shopping for a Gua Sha facial tool from Mount Lai or combat maskne with Soko Glam’s Pimple Patch. You can also shop from dozens of AAPI-owned makeup brands, fragrance shops like Ellis Brooklyn or nail care brands like Sundays.

  1. Acaderma
  2. Asutra
  3. AVYA Skincare
  4. Bluelene
  5. Blume
  6. Cle Cosmetics
  7. Caire Beauty
  8. Circumference
  9. Ellis Brooklyn
  10. EM Cosmetics
  11. Essance Skincare
  12. Glow Recipe
  13. Happy 2nd Birthday
  14. Hero Cosmetics
  15. Krave Beauty
  16. LAPCOS
  17. Mount Lai
  18. Peach & Lily
  19. Pink Moon
  20. Soko Glam
  21. Sundays
  22. Supernal
  23. Tower 28 Beauty
  24. YINA

AAPI-owned food and beverages brands

These 17 standout food and beverage options are worth a try, especially if you’re looking to try out some spiced ice cream or a side of kimchi.

  1. Brightland
  2. ChocoVivo
  3. Fly By Jing
  4. Gr8nola
  5. Indifix
  6. Kasama
  7. Lunar
  8. Malai Ice Cream
  9. Mother-in-Law’s
  10. Nguyen Coffee Supply
  11. Omsom
  12. One Stripe Chai
  13. The Qi
  14. Red Boat Fish Sauce
  15. Sanzo
  16. Spicewalla
  17. Umamicart
  18. Wing on Wo & Co.

AAPI-owned bookstores

Looking to expand your at-home library but don’t know where to start? These AAPI-owned bookstores from across the country have a wide variety of options, from used to brand new.

  1. A Good Used Book
  2. Arkipelago Books
  3. Bel Canto Books
  4. Eastwind Books
  5. Femme Fire Books
  6. Maomi Bookstore
  7. Orphan Books
  8. Philippine Expressions Bookshop
  9. Townie Books

AAPI-owned fashion and accessories brands

These 26 fashion and accessory brands can help you update your wardrobe going into the summer. They include everything from on-trend chunky rings at BONBONWHIMS to Gentle Monster’s chic sunglasses.

  1. Abacaxi
  2. Bellemere NY
  3. BONBONWHIMS
  4. Chunks
  5. Gentle Monster
  6. Haerfest
  7. Hey Maeve
  8. Jason Wu
  9. JW Pei
  10. Kahili Creations
  11. KERISMA
  12. Kinn
  13. LEYT
  14. MOMMA
  15. Nimble Made
  16. NOTTE Jewelry
  17. Paper Project
  18. Pepper
  19. PH5
  20. Private Policy
  21. Proclaim
  22. Rastah
  23. Rue Saint Paul
  24. Sonia Hou Jewelry
  25. SVNR
  26. Verlas

AAPI-owned wellness and fitness brands

You can shop for face masks at Airpop and Happy Masks, get a good night’s sleep with Pluto Pillow or enhance your workout routine with Blogilates.

  1. Airpop
  2. Apothékary
  3. Asutra
  4. AVRE
  5. Blogilates
  6. CocoFloss
  7. Happy Masks
  8. L’Oeuf Poche
  9. Mono B
  10. Neuro
  11. Pluto Pillow
  12. Silk + Sonder

AAPI-owned travel brands

If you’re planning a few summer trips, you can get your hands on multiple AAPI-owned travel essentials, including a travel backpack from Brevitē or a versatile carry-on bag from Planeket.

  1. Brevitē
  2. Cadence
  3. Calpak
  4. Lo and Sons
  5. Planeket
  6. Senreve

Catch up on the latest from NBC News Shopping guides and recommendations and download the NBC News app for full coverage of the coronavirus outbreak.

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