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Arrival’s president reveals how his electric-van startup landed an order from UPS worth up to $1 billion

Arrival could end up bringing in around $1 billion from an order placed by UPS. Arrival The startup Arrival is developing electric vans and bu…

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Arrival UPS vanArrival could end up bringing in around $1 billion from an order placed by UPS.

Arrival

In 2016, just a year after it was founded, the electric van and bus startup Arrival caught the eye of what would be a dream customer for any commercial-vehicle company: UPS.

In an interview with Insider, Arrival president Avinash Rugoobur said he didn’t remember which company reached out to the other first, but, he said, UPS quickly saw Arrival’s potential and sent employees to the startup’s offices to work with its engineers.

Over the next four years, UPS tested components and prototype vehicles and, in 2020, announced it had ordered 10,000 vans from Arrival with an option to purchase another 10,000. If UPS ends up buying all 20,000 vans, the deal could bring in a little over $1 billion, Arrival said in a 2020 investor presentation.

Read more: Elon Musk said Tesla plans to build an electric van eventually, but has been held back by battery cell output

Though it has yet to deliver a final vehicle to UPS or anyone else, Arrival didn’t have to do much persuading to close its deal with the logistics giant, Rugoobur said. Their multi-year collaboration meant UPS was already familiar with Arrival’s technology. In a press release, UPS said Arrival was the first company that had developed an electric delivery vehicle that met its standards.

“I think they knew if we kept going the way we were going that we would have something very unique and special for them,” Rugoobur said.

It also helped that, due to Arrival’s small-scale production strategy, UPS knew it could buy a smaller number of vans than a major manufacturer would have been comfortable offering, he said.

A promising but unproven business model arrival busIn addition to a van, Arrival is also developing an electric bus.

Arrival

Arrival’s investors and partners, which include BlackRock and Hyundai, are betting on a business model that has plenty of upside, but is still unproven. Using novel materials and an innovative production process, Arrival says it can build electric vans and buses that are lighter, more spacious, and cheaper to own than their gas and diesel-powered competitors. And, the company says, its manufacturing strategy will allow it to start making a profit faster than other automotive startups while earning better margins in the long run.

“Arrival is transforming the way the industry is going to operate,” Rugoobur said.

In November, the special-purpose acquisition company (SPAC) CIIG Merger Corp. announced it would take Arrival public, likely in 2021.

Read more: Tesla, Nio, and other EV stocks soared in 2020. These 4 key factors can keep the rally going, an expert says.

Among the primary reasons the automotive industry is so difficult to crack for startups is that developing vehicles and building factories is very expensive. Before your first model rolls off the assembly line, you have to spend hundreds of millions, or even billions, of dollars to get all the pieces in place.

Those daunting fixed costs mean it’s important to sell as many vehicles as possible. With each sale, you get closer to recouping the money you spent to prepare it for production.

That logic leads automakers to build large factories that can produce hundreds of thousands of units each year. Though buses and vans are made in lower numbers than sedans and SUVs, they’re built using a similar manufacturing process and philosophy, said Steve Tam, an analyst at ACT Research who covers the commercial-vehicle industry.

Smaller is better Arrival factoryWhere Tesla has “gigafactories,” Arrival is building “microfactories.”

Arrival

Arrival thinks large factories are inefficient. Where Tesla calls many of its plants “gigafactories,” Arrival is constructing what it calls “microfactories.” In the 2020 investor presentation, Arrival predicted that building the capacity to produce a total of 100,000 vehicles per year across 10 smaller factories will require less cumulative space than a single Volkswagen plant. Since Arrival projects that each factory will be less expensive to build and operate than the average auto plant, it can make a profit off a smaller number of vehicles than a typical automaker would need, Michael Ableson, Arrival’s CEO of North America, told Insider. And spreading factories across a larger number of cities means the company will save on transportation costs, since it won’t have to, for example, ship a bus built in California to New York.

The key to making the microfactory strategy possible was developing a composite material for body panels that, according to Arrival, is stronger and lighter than steel. The material can be dyed, turned into interior and exterior panels through extrusion – a process in which material is pushed through a mold to change its shape – and joined to other panels with a strong adhesive. That means Arrival doesn’t need some of the expensive equipment – like stamping presses, paint machines, or welding robots – that other vehicle manufacturers do, Ableson said.

Put all of those pieces together, and Arrival thinks that for every 100,000 vans and buses it makes, it will have to spend about half of what Volkswagen does to produce the same number of vans at its factory in Wrzesnia, Poland.

The impact of Arrival’s unconventional strategy could ripple beyond the commercial-vehicle industry – if it works. Rugoobur said there’s no reason a production system modeled on Arrival’s couldn’t make 10 million vehicles per year.

If Arrival succeeds, the likes of General Motors, Toyota, and Volkswagen might start taking notes.

Are you a current or former Arrival employee? Do you have a news tip or opinion you’d like to share? Contact this reporter at mmatousek@businessinsider.com, on Signal at 646-768-4712, or via his encrypted email address mmatousek@protonmail.com.

Source: https://markets.businessinsider.com/news/stocks/arrival-ups-electric-van-bus-2021-1-1030022083

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Canadian Market Modestly Higher In Cautious Trade

(RTTNews) – After staying somewhat sluggish till around noon, Canadian stocks are finding some meaningful support in afternoon trades on Friday ev…

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(RTTNews) – After staying somewhat sluggish till around noon, Canadian stocks are finding some meaningful support in afternoon trades on Friday even as the mood continues to remain cautious.

Data showing a much smaller than expected addition in U.S. jobs in the month of August is weighing on sentiment.

The benchmark S&P/TSX Composite Index is up 44.14 or 0.2% at 20,839.26.

Materials shares are faring well, contributing significantly to market’s modest uptick. A few stocks from information technology sector are also moving up. Healthcare stocks are weak, while stocks from other sectors are turning in a mixed performance.

New Gold Inc. (NGD.TO), up 11%, is the top gainer in the Capped Materials Index, which is up more than 2%. Endeavour Silver Corp (EDR.TO) is climbing 7.5%, while Silvercorp Metals (SVM.TO), Equinox Gold Corp (EQX.TO), MAG Silver Corp (MAG.TO), Interfor Corp (IFP.TO), Fortuna Silver Mines (FVI.TO), Canfor Corp (CFP.TO), B2Gold Corp (BTO.TO), Torex Gold Resources (TXG.TO), Osisko Mining (OSK.TO), Iamgold Corp (IMG.TO), First Majestic Silver Corp (FR.TO) and Eldorado Gold (ELD.TO) are gaining 4 to 5%.

Healthcare shares Organigram Holdings (OGI.TO), Canopy Growth Corp (WEED.TO), Tilray Inc (TLRY.TO) and Cronos Group Inc (CRON.TO) are down 2 to 3.5%.

In Canadian economic news, labour productivity in Canada edged up 0.6% in the second quarter, rebounding from a 1.7% decline in the previous quarter.

In the U.S., the Labor Department’s monthly employment report showed non-farm payroll employment rose by 235,000 jobs in August after soaring by an upwardly revised 1.053 million jobs in July.

Economists had expected employment to jump by about 750,000 jobs compared to the spike of 943,000 jobs originally reported for the previous month.

Despite the much weaker than expected job growth, the unemployment rate fell to 5.2% in August from 5.4% in July, matching economist estimates.

The weak jobs data could prompt the Federal Reserve to push back its plans to begin scaling back stimulus.

Fed officials have indicated inflation has reached their target but they need to see further improvement in the labor market before they begin tapering asset purchases and raising interest rates.

Materials shares are faring well, contributing significantly to market’s modest uptick. A few stocks from information technology sector are also moving up. Healthcare stocks are weak, while stocks from other sectors are turning in a mixed performance.

Source: https://markets.businessinsider.com/news/stocks/canadian-market-modestly-higher-in-cautious-trade-1030780283

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CXW: 2Q21 Underscores Recent Balance Sheet Improvements & Strong FFO

By M. Marin NYSE:CXW READ THE FULL CXW RESEARCH REPORT • CXW continues to strengthen its balance sheet • Recent asset divestitures enabled a…

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By M. Marin

NYSE:CXW

READ THE FULL CXW RESEARCH REPORT

• CXW continues to strengthen its balance sheet

• Recent asset divestitures enabled acceleration of debt repayments

• Average occupancy declined y/y but was up sequentially from 1Q21 as vaccine rates increased

• CXW has minimal exposure to executive orders …

• … while several new contracts are expected to boost revenue

• CXW expects USMS needs to remain relatively steady; USMS accounts for ~23% of CXW revenue

CoreCivic’s (NYSE:CXW) 2Q21 results mirror improving trends in its core operations, as occupancies rebound, although occupancies have still not recovered to pre-COVID levels. The lower occupancies reflect ongoing government and ICE measures to curb the spread of COVID-19 among prison and detainee populations. CXW’s average compensated occupancy for the Safety and Community units was 71.6% compared to 74.9% in 2Q20, but up sequentially from 69.9% in 1Q21. The quarter-to-quarter improvement notwithstanding, with cases on the rise in many areas of the country and emerging variants of the virus, the company expects the COVID-19 pandemic could continue to impact utilization levels of CXW’s facilities in the near-term.

Revenue of $464.6 million was down 1.7% year-over-year. This decline primarily reflected lower occupancy rates noted above, as well as the recent divestiture of assets. Revenue from recently signed contracts partially offset these factors. With only one prison contract with the Bureau of Prisons (BOP), which accounts for only about 2% of total revenue, CXW has minimal exposure to the executive order to not renew DOJ contracts with private operators. Conversely, contracts with the U.S. Marshals Service (USMS) represent about 23% of CXW’s annual revenue and CXW expects USMS need to remain relatively steady.

Despite the slight revenue decline compared to the same period in 2020, adjusted EBITDA was $101.7 million, up from $101.1 million in 2Q20. Normalized FFO, excluding non-recurring items, was $0.46 per share compared with $0.56 in 2Q20. However, the company is now structured as a C Corp. and was structured as a REIT in 2020 and the decline in FFO reflects the tax impact from CXW’s conversion to a taxable C Corp. On an apples-to-apples basis, normalized FFO of $0.46 per share was down only slightly from pro forma 2Q20 $0.47 per share, after applying a tax rate of 27.5% to last year’s 2Q FFO.

Strengthening balance sheet

The company has sold several non-core assets over the past few quarters, consistent with its objective to focus on the core business and strengthen its balance sheet. Recent asset sales helped accelerate debt repayments. Long-term debt declined to $1.48 billion from $1.75 billion at year-end 2020, through the combination of cash flow generation and proceeds from asset sales. The total leverage ratio was 3.3x TTM adjusted EBITDA, down from 4.3x at the end of 2Q20. CXW targets a leverage ratio of 2.25x to 2.75x. CXW had $162.9 million of cash at the end of 2Q21, plus an additional $8.9 million of restricted cash and about $688 million available under its $800 million revolver. Recent refinancing measures enabled CXW to extend the weighted average debt maturity from 5.3 years to 6.0 years. Moreover, the company now has no major debt maturities coming due before 2023.

10-year historical average renewal rate exceeds 90% per annum

Several recent contracts and renewals and potential new ones coming up are expected to help offset the decline in occupancies and revenue caused by the pandemic. For instance, ICE has notified CXW that it intends to exercise its renewal option to extend a contract that was set to expire in 3Q21 at the Elizabeth Detention Center through 3Q23. Over the past decade or so, contract renewals have averaged over 90% per annum. This renewal rate has been steady regardless of the administration in office. We anticipate that it will remain steady in the foreseeable future, as government entities need to house prison populations and also face budgetary issues that likely constrain construction of new facilities.

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Source: https://markets.businessinsider.com/news/stocks/cxw-2q21-underscores-recent-balance-sheet-improvements-strong-ffo-1030766561

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Tobii Interim Report for the Second Quarter 2021

STOCKHOLM, Aug. 20, 2021 /PRNewswire/ — Comment by Tobii’s CEO Henrik Eskilsson:’Our result was severely affected by supply disruptions and the c…

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STOCKHOLM, Aug. 20, 2021 /PRNewswire/ — Comment by Tobii’s CEO Henrik Eskilsson:

“Our result was severely affected by supply disruptions and the continuing impact of the pandemic. Business activity, however, developed favorably across all divisions, which was demonstrated by good order intake. We now look forward to a strong second half of 2021, which we kick-started with the announcement of our entry into the Automotive DMS market with several partnerships and the acquisition of Phasya. Both investments have a great strategic rationale and are fantastic complements to our current portfolio.”

Second quarter April – June 2021

  • Revenue was SEK 282 million (333), corresponding to organic decline of 4%. In line with previous communication, supply disruptions in Tobii Dynavox resulted in a large deferral of revenue from the second to mainly the third quarter 2021.
  • Gross margin was 66% (69%).
  • The Group’s operating result was SEK -99 million (-45).
  • The net profit for the period amounted to SEK -114 million (-74).
  • Earnings per share amounted to SEK -1.14 (-0.75).

Business development

  • Order intake was strong with Tobii Pro now back at around the same level as before the pandemic and order intake for Tobii Dynavox was higher than levels seen before the pandemic.
  • Tobii Tech received five design wins, including a VR headset and several medical applications.
  • Tobii partnered with Nvidia to, based on Tobii´s Spotlight Technology, introduce a no-code dynamic foveated rendering solution which furthers widespread adoption of eye tracking in VR.
  • After the quarter, Tobii announced its entry into the Automotive Driver Monitoring-Systems market.
  • After the quarter, Tobii announced that is has acquired Phasya. This acquisition will speed up Tobii´s product roadmap within automotive as well as several other markets that Tobii addresses.
  • The preparations for the listing of Tobii Dynavox and the integration of Tobii Tech and Tobii Pro are progressing according to plan.

Comments from the CEO

Our result was severely affected by supply disruptions and the continuing impact of the pandemic. Business activity, however, developed favorably across all divisions, which was demonstrated by good order intake. We now look forward to a strong second half of 2021, which we kick-started with the announcement of our entry into the Automotive DMS market with several partnerships and the acquisition of Phasya. Both investments have a great strategic rationale and are fantastic complements to our current portfolio.

Tobii Dynavox´s revenue decreased by 15 percent organically. This was a result of the previously announced supply disruptions following component shortages, which led to an exceptionally large order book and sales pipeline. Deferred revenue from the first and second quarter corresponds to approximately SEK 70 million, which will materialize as additional revenue, mainly in the third quarter of 2021.
This shows a strong underlying demand and it paves the way for a return to solid growth in the second half of 2021. We have resolved the acute supply disruptions and already delivered most of the order book at the beginning of the third quarter.

Tobii Pro´s revenue increased by 40 percent organically despite a temporary budget freeze for most universities in China, and a continued negative impact of the pandemic where important markets have had extended restrictions.
Nevertheless, I am very pleased with the development as order intake strengthened markedly and was 50 percent higher than in the second quarter 2020, and around the same level as in 2019, and as we saw a very good development in customer interest and activity.
Tobii Pro launched a solution for market research with eye tracking on smartphones, which is an important step to grow our business in attention data analytics.

Tobii Tech´s revenue decreased by 15 percent organically. The pandemic has delayed the introduction and slowed the ramp up of products for our integration customers. The situation is becoming more manageable and the outlook for our customers is becoming more favorable. Intake of new customers and leads developed well and we obtained five new design wins in the quarter – one for the next generation VR headset with an existing customer, four for medical applications.
After the quarter ended, we announced our automotive driver monitoring system (DMS) initiative. Automotive DMS is a vertical that will grow rapidly over the next 5-10 years and Tobii is uniquely positioned to build a leading product and market position.
We also acquired Phasya, an innovative AI software company whose technology and expertise are a great complement to Tobii´s existing portfolio, primarily in automotive, but also with applications in other parts of Tobii. With Tobii´s breadth we can significantly accelerate the scaling of Phasya´s sales and bring its products into more verticals and application areas. We warmly welcome the Phasya team into the Tobii family.

Looking forward to a strong second half of the year
For the group, we have seen business activity pick-up which is demonstrated in sales and marketing expenses returning to more normal levels, however, profitability was impacted by the supply chain disruptions, continued pandemic effects, and some costs related to the spin-off and listing of Tobii Dynavox. Reaching profitability for the full year 2021 remains our ambition but has become more challenging due to the extending negative impacts of the pandemic.
The preparations for the spin-off and listing of Tobii Dynavox towards the end of the year are progressing according to plan. In parallel with this, we are executing on the integration of Tobii Pro and Tobii Tech, successfully fighting our way out of the pandemic, and on top driving innovation and new initiatives. This, together with the continued improving business environment in all three divisions, is setting the stage for a strong and exciting fall.

Henrik Eskilsson
CEO

Conference call
Today at 09:00 a.m. CET, Tobii will host a conference call with web cast presentation for media, analyst and investors. Please find dial-in details on Tobii’s website under Calendar.

This report has not been subjected to review by the Company’s auditors.

This information is information that Tobii AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, on August 20, 2021, at 7:30 a.m. CET.

CONTACT:

Contact

Henrik Mawby, Head of Investor Relations, Tobii Group, phone: +46 (0)72 219 82 15, email: henrik.mawby@tobii.com

This information was brought to you by Cision https://news.cision.com

https://news.cision.com/tobii-ab/r/tobii-interim-report-for-the-second-quarter-2021,c3400180

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Business development

Source: https://markets.businessinsider.com/news/stocks/tobii-interim-report-for-the-second-quarter-2021-1030748018

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