Evoqua Water Technologies Reports Fourth Quarter and Full Year 2021 Results
Evoqua Water Technologies (NYSE:AQUA) reported its fourth quarter and full year financial results for FY 2021. The fourth quarter revenue was $426.0 million, an 11% increase year-over-year, while organic revenue grew by 9.5%. Net income declined by 13.5% to $26.9 million, affected by rising operating expenses. Full year revenue was $1.46 billion, up 2.4%, but net income saw a significant drop of 54.8% to $51.7 million. The company announced sustainability goals aimed at achieving net-zero greenhouse gas emissions by 2050 and recycling more water than withdrawn by 2035.
- Fourth quarter revenue rose to $426.0 million, an 11.0% increase year-over-year.
- Fourth quarter adjusted EBITDA of $81.9 million increased by 8.3% compared to the prior year.
- The company reported an organic revenue growth of 9.5% in the fourth quarter.
- Full year revenue of $1.46 billion grew by 2.4% versus the previous year.
- Net income for Q4 declined by 13.5% to $26.9 million.
- Full year net income fell by 54.8% to $51.7 million, impacted by increased operating expenses.
- Increased labor costs and supply chain challenges are anticipated to persist in the coming year.
Fourth Quarter 2021 Financial Highlights:
-
Revenue of
$426.0 million 11.0% compared to the prior year period; organic revenue growth of9.5% -
Net income of
$26.9 million 13.5% compared to the prior year period -
Adjusted EBITDA of
$81.9 million 8.3% compared to the prior year period
Full Year 2021 Financial Highlights:
-
Revenue of
$1.46 billion 2.4% compared to the prior year; organic revenue growth of1.6% -
Net income of
$51.7 million 54.8% compared to the prior year -
Adjusted EBITDA of
$250.9 million 4.7% compared to the prior year
Sustainability Goals Announced:
- Recycle and reuse more water than withdrawn by 2035
- Net-zero greenhouse gas emissions by 2050
Revenue for the fourth quarter of fiscal 2021 was
For fiscal 2021, revenue was
“We completed a solid fiscal year with an outstanding fourth quarter performance. I am very proud of our team’s accomplishments as we navigated an unprecedented two-year period of managing the impacts of the COVID-19 pandemic. During this time, organic revenue growth has been resilient, gross profit margin has improved, price/cost has been positive, cash flow has grown, the balance sheet has strengthened, and investments in the business continued and backlog increased substantially. Our business strategy has proven resilient, and we continue to make great progress on our sustainability journey with improved ESG scores from prominent rating agencies. We are also pleased, at this time, to announce our two new sustainability goals: recycle and reuse more water than we withdraw by 2035 and achieve net-zero greenhouse gas emissions by 2050,” said Mr.
Fourth Quarter Segment Results
Evoqua has two reportable operating segments - Integrated Solutions and Services and Applied Product Technologies. The results of our segments for the fourth quarter are as follows:
Integrated Solutions and Services
Segment revenue increased by
-
Service and aftermarket revenue increased by
$11.1 million $8.7 million -
Capital revenue increased by
$12.1 million
Operating profit increased by
-
Segment profitability increased by
$12.2 million -
Higher employee related expenses driven by higher labor costs, partially offset by subsidies received from the Canadian government related to the COVID-19 pandemic, decreased profitability by
$1.5 million $0.5 million -
Depreciation and amortization expense increased by
$1.5 million -
Restructuring and other non-recurring expense decreased by
$0.5 million
Segment adjusted EBITDA increased by
Applied Product Technologies
Segment revenue increased by
- Revenue increased across multiple product lines and all regions, driven by higher volume and favorable pricing.
-
Foreign currency translation favorably impacted revenue by
$2.4 million
Operating profit increased by
-
Segment profitability increased by
$3.3 million -
Higher employee related expenses reduced segment profitability by
$3.7 million -
Lower restructuring and other non-recurring costs increased operating profit by
$4.5 million $0.3 million -
Depreciation and amortization expense increased by
$0.3 million -
Foreign currency translation favorably impacted segment profitability by
$0.8 million
Segment adjusted EBITDA increased by
Fourth Quarter Earnings Call and Webcast
The Company will hold its fourth quarter fiscal 2021 earnings conference call
Conference telephone number:
Participant Details |
Dial-In Numbers: |
Toll Free US: 877-876-9173 |
International: +1 785-424-1667 |
Conference ID: AQUA21 |
|
The link to the webcast replay as well as the presentation slides will also be posted on Evoqua’s Investor Relations website. |
|
Replay details: |
US Toll Free Phone #: 800 839 5634 |
International Phone #: 402 220 2560 |
(Conference ID is not needed to access replay) |
|
Replay available: Beginning |
|
Webcast Audience URL: |
https://event.on24.com/wcc/r/3417629/5AFC7FD664BE71BC74038B02EA051585 |
Dissemination of Company Information
The Company intends to make future announcements regarding developments and financial performance through the Investor Relations section of its website, http://aqua.evoqua.com, as well as through press releases, filings with the
About
Non-GAAP Financial Measures
This press release contains financial measures that are not calculated and presented in accordance with generally accepted accounting principles in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can generally identify forward-looking statements by our use of forward-looking terminology such as “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “plan,” “progress,” “potential,” “predict,” “projection,” “seek,” “should,” “will,” or “would” or the negative thereof or other variations thereon or comparable terminology. All of these forward-looking statements are based on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect our share price. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, among other things, general global economic and business conditions, including the impacts of the COVID-19 pandemic; our ability to execute projects on budget and on schedule; material, freight, and labor inflation, commodity availability constraints, and disruptions in global supply chains and transportation services; the potential for us to incur liabilities to customers as a result of warranty claims or failure to meet performance guarantees; our ability to meet our own and our customers’ safety standards; failure to effectively treat emerging contaminants; our ability to continue to develop or acquire new products, services and solutions that allow us to compete successfully in our markets; our ability to implement our growth strategy, including acquisitions, and our ability to identify suitable acquisition targets; our ability to operate or integrate any acquired businesses, assets or product lines profitably; our ability to achieve the expected benefits of our restructuring actions; delays in enactment or repeals of environmental laws and regulations; the potential for us to become subject to claims relating to handling, storage, release or disposal of hazardous materials; our ability to retain our senior management, skilled technical, engineering, sales, and other key personnel and to attract and retain key talent in increasingly competitive labor markets; risks associated with international sales and operations; our ability to adequately protect our intellectual property from third-party infringement; risks related to our contracts with federal, state, and local governments, including risk of termination or modification prior to completion; risks associated with product defects and unanticipated or improper use of our products; our ability to accurately predict the timing of contract awards; risks related to our substantial indebtedness; our increasing dependence on the continuous and reliable operation of our information technology systems; risks related to foreign, federal, state and local environmental, health and safety laws and other applicable laws and regulations and the costs associated therewith; and other risks and uncertainties, including those listed under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
(In thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue from product sales and services |
$ |
425,991 |
|
|
$ |
383,861 |
|
|
$ |
1,464,429 |
|
|
$ |
1,429,456 |
|
Cost of product sales and services |
(286,932 |
) |
|
(261,213 |
) |
|
(1,007,077 |
) |
|
(979,653 |
) |
||||
Gross profit |
$ |
139,059 |
|
|
$ |
122,648 |
|
|
$ |
457,352 |
|
|
$ |
449,803 |
|
General and administrative expense |
(60,407 |
) |
|
(39,830 |
) |
|
(206,455 |
) |
|
(192,597 |
) |
||||
Sales and marketing expense |
(39,481 |
) |
|
(34,322 |
) |
|
(143,110 |
) |
|
(136,167 |
) |
||||
Research and development expense |
(3,516 |
) |
|
(3,543 |
) |
|
(13,445 |
) |
|
(13,198 |
) |
||||
Total operating expenses |
$ |
(103,404 |
) |
|
$ |
(77,695 |
) |
|
$ |
(363,010 |
) |
|
$ |
(341,962 |
) |
Other operating income (expense), net |
2,940 |
|
|
(418 |
) |
|
4,975 |
|
|
60,607 |
|
||||
Income before interest expense and income taxes |
$ |
38,595 |
|
|
$ |
44,535 |
|
|
$ |
99,317 |
|
|
$ |
168,448 |
|
Interest expense |
(9,283 |
) |
|
(9,362 |
) |
|
(37,575 |
) |
|
(46,682 |
) |
||||
Income before income taxes |
$ |
29,312 |
|
|
$ |
35,173 |
|
|
$ |
61,742 |
|
|
$ |
121,766 |
|
Income tax expense |
(2,408 |
) |
|
(4,035 |
) |
|
(10,080 |
) |
|
(7,371 |
) |
||||
Net income |
$ |
26,904 |
|
|
$ |
31,138 |
|
|
$ |
51,662 |
|
|
$ |
114,395 |
|
Net income (loss) attributable to non‑controlling interest |
46 |
|
|
(170 |
) |
|
180 |
|
|
746 |
|
||||
Net income attributable to |
$ |
26,858 |
|
|
$ |
31,308 |
|
|
$ |
51,482 |
|
|
$ |
113,649 |
|
Basic income per common share |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.43 |
|
|
$ |
0.97 |
|
Diluted income per common share |
$ |
0.22 |
|
|
$ |
0.26 |
|
|
$ |
0.42 |
|
|
$ |
0.94 |
|
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except per share amounts) |
|||||||
|
(Unaudited) |
|
|
||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets |
$ |
678,458 |
|
|
$ |
695,712 |
|
Cash and cash equivalents |
146,244 |
|
|
193,001 |
|
||
Receivables, net |
277,995 |
|
|
260,479 |
|
||
Inventories, net |
158,503 |
|
|
142,379 |
|
||
Contract assets |
72,746 |
|
|
80,759 |
|
||
Other current assets |
22,970 |
|
|
19,094 |
|
||
Property, plant, and equipment, net |
374,988 |
|
|
364,461 |
|
||
|
407,376 |
|
|
397,205 |
|
||
Intangible assets, net |
290,075 |
|
|
309,967 |
|
||
Operating lease right-of-use assets, net |
45,521 |
|
|
45,965 |
|
||
Other non-current assets |
72,473 |
|
|
31,148 |
|
||
Total assets |
$ |
1,868,891 |
|
|
$ |
1,844,458 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
Current liabilities |
$ |
405,989 |
|
|
$ |
349,555 |
|
Accounts payable |
164,535 |
|
|
153,890 |
|
||
Current portion of debt, net of deferred financing fees and discounts |
12,775 |
|
|
14,339 |
|
||
Contract liabilities |
55,883 |
|
|
26,259 |
|
||
Accrued expenses and other liabilities |
160,367 |
|
|
143,389 |
|
||
Other current liabilities |
12,429 |
|
|
11,678 |
|
||
Non-current liabilities |
880,683 |
|
|
1,012,840 |
|
||
Long-term debt, net of deferred financing fees and discounts |
730,430 |
|
|
861,695 |
|
||
Obligation under operating leases |
37,935 |
|
|
37,796 |
|
||
Other non-current liabilities |
112,318 |
|
|
113,349 |
|
||
Total liabilities |
$ |
1,286,672 |
|
|
$ |
1,362,395 |
|
Shareholders’ equity |
|
|
|
||||
Common stock, par value |
$ |
1,223 |
|
|
$ |
1,189 |
|
|
(2,837 |
) |
|
(2,837 |
) |
||
Additional paid-in capital |
582,052 |
|
|
564,928 |
|
||
Retained deficit |
(11,182 |
) |
|
(62,664 |
) |
||
Accumulated other comprehensive income (loss), net of tax |
11,415 |
|
|
(20,472 |
) |
||
|
$ |
580,671 |
|
|
$ |
480,144 |
|
Non-controlling interest |
1,548 |
|
|
1,919 |
|
||
Total shareholders’ equity |
$ |
582,219 |
|
|
$ |
482,063 |
|
Total liabilities and shareholders’ equity |
$ |
1,868,891 |
|
|
$ |
1,844,458 |
|
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS (Unaudited) |
|||||||
(In thousands) |
|||||||
|
Year Ended |
||||||
|
2021 |
|
2020 |
||||
Operating activities |
|
|
|
||||
Net income |
$ |
51,662 |
|
|
$ |
114,395 |
|
Reconciliation of net income to cash flows provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
113,664 |
|
|
107,268 |
|
||
Amortization of deferred financing fees (includes |
3,280 |
|
|
4,026 |
|
||
Deferred income taxes |
(2,363 |
) |
|
(1,234 |
) |
||
Share-based compensation |
15,524 |
|
|
10,509 |
|
||
Loss on sale of property, plant and equipment |
1,287 |
|
|
950 |
|
||
Loss (gain) on sale of business |
193 |
|
|
(68,051 |
) |
||
Foreign currency exchange gains on intercompany loans and other non-cash items |
(1,094 |
) |
|
(8,202 |
) |
||
Changes in assets and liabilities |
(3,448 |
) |
|
17,365 |
|
||
Net cash provided by operating activities |
178,705 |
|
|
177,026 |
|
||
Investing activities |
|
|
|
||||
Purchase of property, plant, and equipment |
(75,293 |
) |
|
(88,456 |
) |
||
Purchase of intangibles |
(3,780 |
) |
|
(6,529 |
) |
||
Proceeds from sale of property, plant, and equipment |
2,041 |
|
|
1,191 |
|
||
Proceeds from sale of business, net of cash of |
897 |
|
|
118,894 |
|
||
Acquisitions, net of cash received |
(21,037 |
) |
|
(13,108 |
) |
||
Net cash (used in) provided by investing activities |
(97,172 |
) |
|
11,992 |
|
||
Financing activities |
|
|
|
||||
Issuance of debt, net of deferred issuance costs |
761,915 |
|
|
21,959 |
|
||
Borrowings under credit facility |
— |
|
|
2,597 |
|
||
Repayment of debt |
(898,024 |
) |
|
(117,131 |
) |
||
Repayment of finance lease obligation |
(13,396 |
) |
|
(13,441 |
) |
||
Payment of earn-out related to previous acquisitions |
(170 |
) |
|
(470 |
) |
||
Proceeds from issuance of common stock |
21,205 |
|
|
10,091 |
|
||
Taxes paid related to net share settlements of share-based compensation awards |
(1,323 |
) |
|
(9,832 |
) |
||
Distribution to non‑controlling interest |
(551 |
) |
|
(1,890 |
) |
||
Net cash used in financing activities |
(130,344 |
) |
|
(108,117 |
) |
||
Effect of exchange rate changes on cash |
2,054 |
|
|
2,219 |
|
||
Change in cash and cash equivalents |
(46,757 |
) |
|
83,120 |
|
||
Cash and cash equivalents |
|
|
|
||||
Beginning of period |
193,001 |
|
|
109,881 |
|
||
End of period |
$ |
146,244 |
|
|
$ |
193,001 |
|
Use of Non-GAAP Measures
The Company reports its financial results in accordance with GAAP. However, management believes that certain non-GAAP financial measures provide users of the Company's financial information with additional useful information in evaluating operating performance. We use the non-GAAP financial measures adjusted EBITDA, adjusted net income and adjusted EPS, organic revenue and net leverage ratio in evaluating the strength and financial performance of our core business.
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss) before interest expense, income tax benefit (expense), and depreciation and amortization, adjusted for the impact of certain other items, including restructuring and related business transformation costs, share-based compensation, transaction costs, and other gains, losses and expenses that we believe do not directly reflect our underlying business operations.
Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate and compare operating performance and value companies within our industry. Further, we believe it is helpful in highlighting trends in our operating results and provides greater clarity and comparability period over period to management and our investors regarding the operational impact of long-term strategic decisions relating to capital structure, the tax jurisdictions in which we operate and capital investments. In addition, adjusted EBITDA highlights true business performance by removing the impact of certain items that management believes do not directly reflect our underlying operations and provides investors with greater visibility into the ongoing organic drivers of our business performance.
Management uses adjusted EBITDA to supplement GAAP measures of performance as follows:
- to assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance;
- in our management incentive compensation, which is based in part on components of adjusted EBITDA;
- in certain calculations under our senior secured credit facilities, which use components of adjusted EBITDA;
- to evaluate the effectiveness of our business strategies;
- to make budgeting decisions; and
- to compare our performance against that of other peer companies using similar measures.
In addition to the above, our chief operating decision maker uses adjusted EBITDA of each reportable operating segment to evaluate the operating performance of such segments. Adjusted EBITDA on a segment basis is defined as earnings before depreciation and amortization, adjusted for the impact of certain other items that have been reflected at the segment level. Adjusted EBITDA of the reportable operating segments do not include certain charges that are presented within corporate activities. These charges include certain restructuring and other business transformation charges that have been incurred to align and reposition the Company to the current reporting structure, acquisition related costs (including transaction costs and integration costs) and share-based compensation charges.
Adjusted EBITDA should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. The financial results prepared in accordance with GAAP and the reconciliations from these results included below should be carefully evaluated. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. In addition, in evaluating adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
With respect to our guidance, we have not presented a quantitative reconciliation of the forward-looking non-GAAP financial measure adjusted EBITDA to its most directly comparable GAAP financial measure, net income, because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of, and the periods in which, such items, including foreign exchange impact and certain expenses for which we adjust, may be recognized. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
The following is a reconciliation of our net income to adjusted EBITDA (unaudited):
|
Three Months Ended
|
|
Year Ended
|
||||||||||||||||||
(In millions) |
2021 |
|
2020 |
|
% Variance |
|
2021 |
|
2020 |
|
% Variance |
||||||||||
Net income |
$ |
26.9 |
|
|
$ |
31.1 |
|
|
(13.5 |
)% |
|
$ |
51.7 |
|
|
$ |
114.4 |
|
|
(54.8 |
)% |
Income tax expense |
2.4 |
|
|
4.1 |
|
|
(41.5 |
)% |
|
10.1 |
|
|
7.4 |
|
|
36.5 |
% |
||||
Interest expense |
9.2 |
|
|
9.4 |
|
|
(2.1 |
)% |
|
37.5 |
|
|
46.6 |
|
|
(19.5 |
)% |
||||
Operating profit |
$ |
38.5 |
|
|
$ |
44.6 |
|
|
(13.7 |
)% |
|
$ |
99.3 |
|
|
$ |
168.4 |
|
|
(41.0 |
)% |
Depreciation and amortization |
30.1 |
|
|
27.2 |
|
|
10.7 |
% |
|
113.7 |
|
|
107.3 |
|
|
6.0 |
% |
||||
EBITDA |
$ |
68.6 |
|
|
$ |
71.8 |
|
|
(4.5 |
)% |
|
$ |
213.0 |
|
|
$ |
275.7 |
|
|
(22.7 |
)% |
Restructuring and related business transformation costs(a) |
2.3 |
|
|
6.4 |
|
|
(64.1 |
)% |
|
11.3 |
|
|
17.4 |
|
|
(35.1 |
)% |
||||
Share-based compensation(b) |
5.9 |
|
|
1.9 |
|
|
210.5 |
% |
|
17.7 |
|
|
10.5 |
|
|
68.6 |
% |
||||
Transaction costs(c) |
— |
|
|
0.9 |
|
|
(100.0 |
)% |
|
1.6 |
|
|
1.9 |
|
|
(15.8 |
)% |
||||
Other losses (gains) and expenses(d) |
5.1 |
|
|
(5.4 |
) |
|
(194.4 |
)% |
|
7.3 |
|
|
(65.9 |
) |
|
(111.1 |
)% |
||||
Adjusted EBITDA |
$ |
81.9 |
|
|
$ |
75.6 |
|
|
8.3 |
% |
|
$ |
250.9 |
|
|
$ |
239.6 |
|
|
4.7 |
% |
(a) |
Restructuring and related business transformation costs | |||||
| Adjusted EBITDA is calculated prior to considering certain restructuring or business transformation events. These events may occur over extended periods of time, and in some cases it is reasonably possible that they could reoccur in future periods based on reorganizations of the business, cost reduction or productivity improvement needs, or in response to economic conditions. For the periods presented such events include the following: | ||||||
(i) |
Certain costs and expenses in connection with various restructuring initiatives, including severance and other employee-related costs, relocation and facility consolidation costs and third-party consultant costs to assist with these initiatives. This includes: | |||||
(A) |
amounts related to the Company’s restructuring initiatives to reduce the cost structure and rationalize location footprint following the sale of the Memcor product line; |
|||||
(B) |
amounts related to the Company’s transition from a three-segment structure to a two-segment operating model designed to better serve the needs of customers worldwide; and |
|||||
(C) |
amounts related to various other initiatives implemented to restructure and reorganize our business with the appropriate management team and cost structure. |
|||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In millions) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Post Memcor divestiture restructuring |
$ |
1.0 |
|
|
$ |
4.2 |
|
|
$ |
5.6 |
|
|
$ |
9.1 |
|
Cost of product sales and services ("Cost of sales") |
0.1 |
|
|
2.9 |
|
|
3.5 |
|
|
6.6 |
|
||||
Sales and marketing expense (“S&M expense”) |
0.1 |
|
|
0.2 |
|
|
0.3 |
|
|
0.2 |
|
||||
General and administrative expense (“G&A expense”) |
0.8 |
|
|
0.7 |
|
|
1.5 |
|
|
1.9 |
|
||||
Other operating (income) expense |
— |
|
|
0.4 |
|
|
0.3 |
|
|
0.4 |
|
||||
Two-segment restructuring |
$ |
0.2 |
|
|
$ |
0.2 |
|
|
$ |
1.0 |
|
|
$ |
2.1 |
|
Cost of sales |
— |
|
|
— |
|
|
0.3 |
|
|
1.0 |
|
||||
G&A expense |
0.2 |
|
|
0.2 |
|
|
0.7 |
|
|
1.1 |
|
||||
Various other initiatives |
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
2.8 |
|
|
$ |
0.4 |
|
Cost of sales |
— |
|
|
0.0 |
|
|
1.0 |
|
|
0.3 |
|
||||
S&M expense |
(0.1 |
) |
|
— |
|
|
0.1 |
|
|
0.1 |
|
||||
G&A expense |
0.5 |
|
|
— |
|
|
0.9 |
|
|
— |
|
||||
Other operating (income) expense |
0.4 |
|
|
— |
|
|
0.8 |
|
|
— |
|
||||
Total(1) |
$ |
2.0 |
|
|
$ |
4.4 |
|
|
$ |
9.4 |
|
|
$ |
12.2 |
|
| (1) |
Of which |
||||
|
|
||||
| (ii) | Legal settlement costs and intellectual property related fees, including fees and settlement costs associated with legacy matters related to product warranty litigation on MEMCOR®(1) products and certain discontinued products. This includes: |
||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In millions) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Cost of sales |
$ |
0.1 |
|
|
$ |
1.0 |
|
|
$ |
0.4 |
|
|
$ |
1.5 |
|
G&A expense |
0.1 |
|
|
0.4 |
|
|
0.6 |
|
|
0.7 |
|
||||
Total |
$ |
0.2 |
|
|
$ |
1.4 |
|
|
$ |
1.0 |
|
|
$ |
2.2 |
|
(1) |
Memcor ® is a trademark of |
||||
|
|
||||
| (iii) | Expenses associated with our information technology and functional infrastructure transformation, including activities to optimize information technology systems and functional infrastructure processes. This includes: |
||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In millions) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Cost of sales |
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
0.1 |
|
G&A expense |
0.1 |
|
|
0.3 |
|
|
0.2 |
|
|
0.9 |
|
||||
Total |
$ |
0.1 |
|
|
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
1.0 |
|
| (iv) | Costs associated with the secondary public offering of common stock held by certain shareholders of the Company, as well as costs incurred by us in connection with establishment of our public company compliance structure and processes, including consultant costs. This includes: |
|||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In millions) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
G&A expense |
$ |
— |
|
|
$ |
0.3 |
|
|
$ |
0.6 |
|
|
$ |
2.0 |
|
Total |
$ |
— |
|
|
$ |
0.3 |
|
|
$ |
0.6 |
|
|
$ |
2.0 |
|
(b) |
Share-based compensation |
|
Adjusted EBITDA is calculated prior to considering share-based compensation expenses related to equity awards. See Note 18, “Share-Based Compensation,” to our Consolidated Financial Statements to be included in our Annual Report on Form 10-K for the year ended |
||
(c) |
Transaction related costs |
|
Adjusted EBITDA is calculated prior to considering transaction, integration and restructuring costs associated with business combinations because these costs are unique to each transaction and represent costs that were incurred as a result of the transaction decision. Integration and restructuring costs associated with a business combination may occur over several years and include, but are not limited to, consulting fees, legal fees, certain employee-related costs, facility consolidation and product rationalization costs and fair value changes associated with contingent consideration. This includes: |
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(In millions) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Cost of sales |
$ |
0.4 |
|
|
$ |
0.2 |
|
|
$ |
0.7 |
|
|
$ |
0.1 |
|
G&A expense |
(0.4 |
) |
|
0.7 |
|
|
0.9 |
|
|
1.8 |
|
||||
Total |
$ |
— |
|
|
$ |
0.9 |
|
|
$ |
1.6 |
|
|
$ |
1.9 |
|
(d) |
Other losses, (gains) and expenses | |||
| Adjusted EBITDA is calculated prior to considering certain other significant losses, (gains) and expenses. For the periods presented such events include the following: | ||||
(i) |
impact of foreign exchange gains and losses; |
|||
(ii) |
net expense reduction related to the remediation of manufacturing defects caused by a third-party vendor for which partial restitution was received; |
|||
(iii) |
charges incurred by the Company related to product rationalization in its electrochlorination business; |
|||
(iv) |
amounts related to the prior year sale of the Memcor product line; |
|||
(v) |
expenses incurred by the Company as a result of the COVID-19 pandemic, including additional charges for personal protective equipment, increased costs for facility sanitization and one-time payments to certain employees; |
|||
(vi) |
legal fees incurred in excess of amounts covered by the Company’s insurance related to the Securities Litigation and |
|||
(vii) |
loss on divestiture of the Lange containment system, geomembrane and geosynthetic liner product line (“Lange Product Line”). |
|||
Other losses, (gains) and expenses include the following for the periods presented below:
Three Months Ended |
|||||||||||||||||||||||||||||||
|
Other Adjustments |
||||||||||||||||||||||||||||||
(In millions) |
(i) |
|
(ii) |
|
(iii) |
|
(iv) |
|
(v) |
|
(vi) |
|
(vii) |
|
Total |
||||||||||||||||
Cost of sales |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
G&A expense |
3.4 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.6 |
|
|
— |
|
|
5.0 |
|
||||||||
Total |
$ |
3.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
1.6 |
|
|
$ |
— |
|
|
$ |
5.1 |
|
Three Months Ended |
|||||||||||||||||||||||||||||||
|
Other Adjustments |
||||||||||||||||||||||||||||||
(In millions) |
(i) |
|
(ii) |
|
(iii) |
|
(iv) |
|
(v) |
|
(vii) |
|
(vii) |
|
Total |
||||||||||||||||
Cost of sales |
$ |
(0.1 |
) |
|
$ |
(0.1 |
) |
|
$ |
0.3 |
|
|
$ |
(0.1 |
) |
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
G&A expense |
(6.1 |
) |
|
— |
|
|
— |
|
|
0.2 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
(5.8 |
) |
||||||||
Other operating (income) expense |
— |
|
|
0.1 |
|
|
— |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
||||||||
Total |
$ |
(6.2 |
) |
|
$ |
— |
|
|
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
0.2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(5.4 |
) |
Year Ended |
|||||||||||||||||||||||||||||||
|
Other Adjustments |
||||||||||||||||||||||||||||||
(In millions) |
(i) |
|
(ii) |
|
(iii) |
|
(iv) |
|
(vi) |
|
(vii) |
|
(vii) |
|
Total |
||||||||||||||||
Cost of sales |
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
2.4 |
|
|
$ |
0.2 |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3.0 |
|
G&A expense |
(1.8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
5.7 |
|
|
— |
|
|
4.1 |
|
||||||||
Other operating (income) expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
||||||||
Total |
$ |
(1.7 |
) |
|
$ |
— |
|
|
$ |
2.4 |
|
|
$ |
0.2 |
|
|
$ |
0.5 |
|
|
$ |
5.7 |
|
|
$ |
0.2 |
|
|
$ |
7.3 |
|
Year Ended |
|||||||||||||||||||||||||||||||
|
Other Adjustments |
||||||||||||||||||||||||||||||
(In millions) |
(i) |
|
(ii) |
|
(iii) |
|
(iv) |
|
(vi) |
|
(vii) |
|
(vii) |
|
Total |
||||||||||||||||
Cost of sales |
$ |
(0.2 |
) |
|
$ |
— |
|
|
$ |
0.7 |
|
|
$ |
0.1 |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1.4 |
|
G&A expense |
(8.5 |
) |
|
— |
|
|
— |
|
|
0.3 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
(7.7 |
) |
||||||||
Other operating (income) expense |
— |
|
|
(1.5 |
) |
|
— |
|
|
(58.1 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(59.6 |
) |
||||||||
Total |
$ |
(8.7 |
) |
|
$ |
(1.5 |
) |
|
$ |
0.7 |
|
|
$ |
(57.7 |
) |
|
$ |
1.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(65.9 |
) |
Adjusted EBITDA on a segment basis is defined as earnings before interest expense, income tax benefit (expense) and depreciation and amortization, adjusted for the impact of certain other items that have been reflected at the segment level. We do not present net income on a segment basis because we do not allocate interest expense or income tax benefit (expense) to our segments, making operating profit the most comparable GAAP metric. The following is a reconciliation of our segment operating profit to our segment adjusted EBITDA:
|
Three Months Ended |
|
$ Variance |
|
% Variance |
||||||||||||||||||||||||
|
2021 |
|
2020 |
|
|
||||||||||||||||||||||||
(In millions) |
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
||||||||||||||
Operating Profit |
$ |
52.4 |
|
|
$ |
28.7 |
|
|
$ |
43.2 |
|
|
$ |
23.8 |
|
|
$ |
9.2 |
|
|
$ |
4.9 |
|
|
21.3 |
% |
|
20.6 |
% |
Depreciation and amortization |
18.3 |
|
|
3.8 |
|
|
16.8 |
|
|
3.5 |
|
|
1.5 |
|
|
0.3 |
|
|
8.9 |
% |
|
8.6 |
% |
||||||
EBITDA |
$ |
70.7 |
|
|
$ |
32.5 |
|
|
$ |
60.0 |
|
|
$ |
27.3 |
|
|
$ |
10.7 |
|
|
$ |
5.2 |
|
|
17.8 |
% |
|
19.0 |
% |
Restructuring and related business transformation costs (a) |
0.4 |
|
|
0.7 |
|
|
0.3 |
|
|
4.1 |
|
|
0.1 |
|
|
(3.4 |
) |
|
33.3 |
% |
|
(82.9 |
)% |
||||||
Transaction costs (b) |
(0.6 |
) |
|
(0.1 |
) |
|
— |
|
|
0.7 |
|
|
(0.6 |
) |
|
(0.8 |
) |
|
n/a |
|
(114.3 |
)% |
|||||||
Other losses (gains) and expenses (c) |
— |
|
|
— |
|
|
— |
|
|
0.6 |
|
|
— |
|
|
(0.6 |
) |
|
n/a |
|
(100.0 |
)% |
|||||||
Adjusted EBITDA |
$ |
70.5 |
|
|
$ |
33.1 |
|
|
$ |
60.3 |
|
|
$ |
32.7 |
|
|
$ |
10.2 |
|
|
$ |
0.4 |
|
|
16.9 |
% |
|
1.2 |
% |
(a) |
Represents costs and expenses in connection with restructuring initiatives in the three months ended |
|
(b) |
Represents costs associated with a change in the current estimate of certain acquisitions achieving their earn-out targets. |
|
(c) |
Other losses, (gains) and expenses, as discussed above, distinct to our Integrated Solutions and Services (“ISS”) and Applied Product Technologies (“APT”) segments include the following: |
|
Three Months Ended |
||||||||||||||
|
2021 |
|
2020 |
||||||||||||
(In millions) |
ISS |
|
APT |
|
ISS |
|
APT |
||||||||
Net pre-tax benefit on sale of the Memcor product line |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.3 |
|
Product rationalization in electro-chlorination business |
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
||||
Total |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.6 |
|
|
Year Ended |
|
$ Variance |
|
% Variance |
||||||||||||||||||||||||
|
2021 |
|
2020 |
|
|
||||||||||||||||||||||||
(In millions) |
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
|
Integrated
|
|
Applied
|
||||||||||||||
Operating Profit |
$ |
147.3 |
|
|
$ |
82.9 |
|
|
$ |
145.7 |
|
|
$ |
134.3 |
|
|
$ |
1.6 |
|
|
$ |
(51.4 |
) |
|
1.1 |
% |
|
(38.3 |
)% |
Depreciation and amortization |
70.6 |
|
|
14.4 |
|
|
67.4 |
|
|
14.2 |
|
|
3.2 |
|
|
0.2 |
|
|
4.7 |
% |
|
1.4 |
% |
||||||
EBITDA |
$ |
217.9 |
|
|
$ |
97.3 |
|
|
$ |
213.1 |
|
|
$ |
148.5 |
|
|
$ |
4.8 |
|
|
$ |
(51.2 |
) |
|
2.3 |
% |
|
(34.5 |
)% |
Restructuring and related business transformation costs (a) |
1.8 |
|
|
5.9 |
|
|
0.6 |
|
|
9.7 |
|
|
1.2 |
|
|
(3.8 |
) |
|
200.0 |
% |
|
(39.2 |
)% |
||||||
Transaction costs (b) |
(0.6 |
) |
|
(0.1 |
) |
|
— |
|
|
(0.5 |
) |
|
(0.6 |
) |
|
0.4 |
|
|
n/a |
|
(80.0 |
)% |
|||||||
Other losses (gains) and expenses (c) |
0.2 |
|
|
2.6 |
|
|
— |
|
|
(58.5 |
) |
|
0.2 |
|
|
61.1 |
|
|
n/a |
|
(104.4 |
)% |
|||||||
Adjusted EBITDA |
$ |
219.3 |
|
|
$ |
105.7 |
|
|
$ |
213.7 |
|
|
$ |
99.2 |
|
|
$ |
5.6 |
|
|
$ |
6.5 |
|
|
2.6 |
% |
|
6.6 |
% |
(a) |
Represents costs and expenses in connection with restructuring initiatives in the year ended |
|
(b) |
Represents costs associated with a change in the current estimate of certain acquisitions achieving their earn-out targets. |
|
(c) |
Other losses, (gains) and expenses, as discussed above, distinct to our ISS and APT segments include the following: |
|
Year Ended |
||||||||||||||
|
2021 |
|
2020 |
||||||||||||
(In millions) |
ISS |
|
APT |
|
ISS |
|
APT |
||||||||
Trailing costs from the sale of the Memcor product line |
$ |
— |
|
|
$ |
0.2 |
|
|
$ |
— |
|
|
$ |
— |
|
Net pre-tax benefit on sale of the Memcor product line |
— |
|
|
— |
|
|
— |
|
|
(57.7 |
) |
||||
Remediation of manufacturing defects |
— |
|
|
— |
|
|
— |
|
|
(1.5 |
) |
||||
Product rationalization in electro-chlorination business |
— |
|
|
2.4 |
|
|
— |
|
|
0.7 |
|
||||
Loss on divestiture of Lange Product Line |
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
||||
Total |
$ |
0.2 |
|
|
$ |
2.6 |
|
|
$ |
— |
|
|
$ |
(58.5 |
) |
Adjusted Net Income and Adjusted EPS
Adjusted net income and adjusted EPS are additional metrics used by management to evaluate the performance of our business. Adjusted net income is defined as net income adjusted for the impact of certain items, including restructuring and related business transformation costs, share-based compensation, transaction costs, and other gains, losses and expenses that we believe do not directly reflect our underlying business operations. Adjusted EPS is defined as adjusted net income on a per share basis, presented as both adjusted basic EPS and adjusted diluted EPS. Management believes that reporting adjusted net income and adjusted EPS provides useful information to investors by removing the impact of certain items that management believes do not directly reflect our underlying operations.
The following is a reconciliation of net income to adjusted net income and earnings per share for the year ended
|
Year Ended |
||||||||||||||||||||||||||
(In millions, except per share amounts) |
GAAP
|
|
Restructuring
|
|
Share-based
|
|
Transaction
|
|
Other (Gains)
|
|
Extraordinary
|
|
Non-GAAP
|
||||||||||||||
Revenue from product sales and services |
$ |
1,464.4 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,464.4 |
|
Cost of product sales and services |
(1,007.0 |
) |
|
5.3 |
|
|
|
|
0.7 |
|
|
3.0 |
|
|
— |
|
|
(998.0 |
) |
||||||||
Gross profit |
457.4 |
|
|
5.3 |
|
|
— |
|
|
0.7 |
|
|
3.0 |
|
|
— |
|
|
466.4 |
|
|||||||
General and administrative expense |
(206.5 |
) |
|
4.5 |
|
|
17.7 |
|
|
0.9 |
|
|
4.1 |
|
|
— |
|
|
(179.3 |
) |
|||||||
Sales and marketing expense |
(143.1 |
) |
|
0.4 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(142.7 |
) |
|||||||
Research and development expense |
(13.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(13.4 |
) |
|||||||
Other operating income (expense), net |
4.9 |
|
|
1.1 |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
— |
|
|
6.2 |
|
|||||||
Interest expense |
(37.5 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6.4 |
|
|
(31.1 |
) |
|||||||
Income before income taxes |
61.8 |
|
|
11.3 |
|
|
17.7 |
|
|
1.6 |
|
|
7.3 |
|
|
6.4 |
|
|
106.1 |
|
|||||||
Income tax expense(1) |
(10.1 |
) |
|
(2.9 |
) |
|
(4.6 |
) |
|
(0.4 |
) |
|
(1.9 |
) |
|
(1.7 |
) |
|
(21.6 |
) |
|||||||
Net income |
51.7 |
|
|
8.4 |
|
|
13.1 |
|
|
1.2 |
|
|
5.4 |
|
|
4.7 |
|
|
84.5 |
|
|||||||
Net income attributable to non‑controlling interest |
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|||||||
Net income attributable to |
$ |
51.5 |
|
|
$ |
8.4 |
|
|
$ |
13.1 |
|
|
$ |
1.2 |
|
|
$ |
5.4 |
|
|
$ |
4.7 |
|
|
$ |
84.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic income per common share |
$ |
0.43 |
|
|
$ |
0.07 |
|
|
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.05 |
|
|
$ |
0.04 |
|
|
$ |
0.71 |
|
Diluted income per common share |
$ |
0.42 |
|
|
$ |
0.07 |
|
|
$ |
0.11 |
|
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
0.04 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic # of shares (in millions) |
119.6 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted # of shares (in millions) |
122.9 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(1) |
The blended statutory tax rate was |
|||
(2) |
Refer to adjustments on the adjusted EBITDA reconciliation above. |
|||
(3) |
In |
The following is a reconciliation of net income to adjusted net income and earnings per share for the year ended
|
Year Ended |
||||||||||||||||||||||||||
(In millions, except per share amounts) |
GAAP
|
|
Restructuring
|
|
Share-based
|
|
Transaction
|
|
Other (gains)
|
|
Extraordinary
|
|
Non-GAAP
|
||||||||||||||
Revenue from product sales and services |
$ |
1,429.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,429.5 |
|
Cost of product sales and services |
(979.7 |
) |
|
9.9 |
|
|
— |
|
|
0.1 |
|
|
1.4 |
|
|
— |
|
|
(968.3 |
) |
|||||||
Gross profit |
449.8 |
|
|
9.9 |
|
|
— |
|
|
0.1 |
|
|
1.4 |
|
|
— |
|
|
461.2 |
|
|||||||
General and administrative expense |
(192.6 |
) |
|
6.8 |
|
|
10.5 |
|
|
1.8 |
|
|
(7.7 |
) |
|
— |
|
|
(181.2 |
) |
|||||||
Sales and marketing expense |
(136.2 |
) |
|
0.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(135.9 |
) |
|||||||
Research and development expense |
(13.2 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(13.2 |
) |
|||||||
Other operating income (expense), net |
60.6 |
|
|
0.4 |
|
|
— |
|
|
— |
|
|
(59.6 |
) |
|
— |
|
|
1.4 |
|
|||||||
Interest expense |
(46.6 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.8 |
|
|
(44.8 |
) |
|||||||
Income (loss) before income taxes |
121.8 |
|
|
17.4 |
|
|
10.5 |
|
|
1.9 |
|
|
(65.9 |
) |
|
1.8 |
|
|
87.5 |
|
|||||||
Income tax (expense) benefit(1) |
(7.4 |
) |
|
(0.7 |
) |
|
(0.4 |
) |
|
(0.1 |
) |
|
2.6 |
|
|
(0.1 |
) |
|
(6.1 |
) |
|||||||
Net income (loss) |
114.4 |
|
|
16.7 |
|
|
10.1 |
|
|
1.8 |
|
|
(63.3 |
) |
|
1.7 |
|
|
81.4 |
|
|||||||
Net income attributable to non‑controlling interest |
0.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.8 |
|
|||||||
Net income (loss) attributable to |
$ |
113.6 |
|
|
$ |
16.7 |
|
|
$ |
10.1 |
|
|
$ |
1.8 |
|
|
$ |
(63.3 |
) |
|
$ |
1.7 |
|
|
$ |
80.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic income (loss) per common share |
$ |
0.97 |
|
|
$ |
0.14 |
|
|
$ |
0.09 |
|
|
$ |
0.02 |
|
|
$ |
(0.54 |
) |
|
$ |
0.01 |
|
|
$ |
0.69 |
|
Diluted income (loss) per common share |
$ |
0.94 |
|
|
$ |
0.14 |
|
|
$ |
0.08 |
|
|
$ |
0.01 |
|
|
$ |
(0.51 |
) |
|
$ |
0.01 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic # of shares (in millions) |
116.7 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted # of shares (in millions) |
121.1 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(1) |
The blended annual projected tax rate of |
|||
(2) |
Refer to adjustments on the adjusted EBITDA reconciliation above. |
|||
(3) |
In |
The following is a reconciliation of the change in adjusted net income and adjusted earnings per share for the years ended
|
Year Ended |
|
$ Variance |
|||||||
(In millions) |
2021 |
2020 |
|
|||||||
Net income (loss) attributable to |
$ |
51.5 |
|
$ |
113.6 |
|
|
$ |
(62.1 |
) |
Restructuring and Related Business Transformation Costs(1) |
8.4 |
|
16.7 |
|
|
(8.3 |
) |
|||
Share-based Compensation(1) |
13.1 |
|
10.1 |
|
|
3.0 |
|
|||
Transaction Costs(1) |
1.2 |
|
1.8 |
|
|
(0.6 |
) |
|||
Other (gains) losses(1) |
5.4 |
|
(63.3 |
) |
|
68.7 |
|
|||
Extraordinary interest expense(2) |
4.7 |
|
1.7 |
|
|
3.0 |
|
|||
Adjusted Net Income |
$ |
84.3 |
|
$ |
80.6 |
|
|
$ |
3.7 |
|
|
|
|
|
|
||||||
Adjusted Basic EPS |
$ |
0.71 |
|
$ |
0.69 |
|
|
$ |
0.02 |
|
Adjusted Diluted EPS |
$ |
0.69 |
|
$ |
0.67 |
|
|
$ |
0.02 |
|
|
|
|
|
|
||||||
Basic # of shares (in millions) |
119.6 |
116.7 |
|
|
||||||
Diluted # of shares (in millions) |
122.9 |
121.1 |
|
|
||||||
(1) |
Refer to adjustments on the adjusted net income reconciliations above. |
|||
(2) |
In |
Organic Revenue
Organic revenue is another metric used by management to evaluate the performance of our business. Organic revenue is defined as revenue excluding the impact of foreign currency translation and inorganic revenue. Inorganic revenue represents the impact from acquisitions and divestitures during the first 12 months following the closing of the acquisition or divestiture. Divestitures include sales of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. Management believes that reporting organic revenue provides useful information to investors by helping identify underlying growth trends in our core business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. We exclude the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. We exclude the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long-term performance difficult between the Company and its peers due to the varying nature, size and number of transactions from period to period.
The following is a reconciliation of total revenue to organic revenue for the three months ended
|
Total Revenue |
|
Foreign Currency |
|
Inorganic Revenue(1) |
|
Organic Revenue |
||||||||||||
|
Three Months Ended
|
% Variance |
|
Three Months Ended
|
% Variance |
|
Three Months Ended
|
% Variance |
|
Three Months Ended
|
% Variance |
||||||||
(In millions) |
2020 |
2021 |
|
2020 |
2021 |
|
2020 |
2021 |
|
2020 |
2021 |
||||||||
|
|
|
11.0 |
% |
|
n/a |
|
0.8 |
% |
|
|
|
0.7 |
% |
|
|
|
9.5 |
% |
Integrated Solutions & Services |
|
|
12.8 |
% |
|
n/a |
|
0.3 |
% |
|
|
|
1.0 |
% |
|
|
|
11.5 |
% |
Applied Product Technologies |
|
|
7.6 |
% |
|
n/a |
|
1.8 |
% |
|
$— |
$— |
— |
% |
|
|
|
5.8 |
% |
(1) |
Includes divestiture of the Lange Product Line on |
The following is a reconciliation of total revenue to organic revenue for the years ended
|
Total Revenue |
|
Foreign Currency |
|
Inorganic Revenue(1) |
|
Organic Revenue |
||||||||||||
|
Year Ended
|
% Variance |
|
Year Ended
|
% Variance |
|
Year Ended
|
% Variance |
|
Year Ended
|
% Variance |
||||||||
(In millions) |
2020 |
2021 |
|
2020 |
2021 |
|
2020 |
2021 |
|
2020 |
2021 |
||||||||
|
|
|
2.4 |
% |
|
n/a |
|
1.3 |
% |
|
|
|
(0.4) |
% |
|
|
|
1.6 |
% |
Integrated Solutions & Services |
|
|
1.7 |
% |
|
n/a |
|
0.3 |
% |
|
|
|
0.9 |
% |
|
|
|
0.5 |
% |
Applied Product Technologies |
|
|
4.0 |
% |
|
n/a |
|
3.2 |
% |
|
|
$— |
(3.0) |
% |
|
|
|
3.8 |
% |
(1) |
Includes acquisition of our interest in |
Immaterial rounding differences may be present in the tables above.
Net Leverage Ratio
Net leverage ratio is defined as total net debt divided by net income, as well as adjusted EBITDA. Total net debt is defined as total debt including finance leases less unamortized deferred financing fees minus cash and cash equivalents. The following is a reconciliation of net leverage ratio for both net income, as well as adjusted EBITDA, at
|
As of and for the Year Ended
|
||||||
(In millions) |
2021 |
|
2020 |
||||
Cash and cash equivalents |
$ |
146.2 |
|
|
$ |
193.0 |
|
|
|
|
|
||||
AR Securitization Program |
$ |
150.1 |
|
|
$ |
— |
|
Revolving Credit Facility |
37.3 |
|
|
— |
|
||
First Lien Term Facility |
473.8 |
|
|
819.3 |
|
||
Mortgage |
— |
|
|
1.7 |
|
||
Equipment financing facilities |
93.8 |
|
|
64.5 |
|
||
Finance lease obligations |
38.2 |
|
|
37.6 |
|
||
Total debt including finance leases |
$ |
793.2 |
|
|
$ |
923.1 |
|
Less unamortized deferred financing fees |
(11.7 |
) |
|
(9.4 |
) |
||
Total net debt |
$ |
635.3 |
|
|
$ |
720.7 |
|
|
|
|
|
||||
Net income |
$ |
51.7 |
|
|
$ |
114.4 |
|
Net leverage ratio based on net income |
12.3x |
|
6.3x |
||||
|
|
|
|
||||
Adjusted EBITDA |
$ |
250.9 |
|
|
$ |
239.6 |
|
Net leverage ratio based on adjusted EBITDA |
2.5x |
|
3.0x |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211116005308/en/
Investors
Vice President, Investor Relations
Telephone: 724-720-1605
Email: dan.brailer@evoqua.com
Media
Director of Corporate Communications
Telephone: 506-454-5495
Email: sarah.brown@evoqua.com
Source:
FAQ
What were Evoqua's fourth quarter results for 2021?
How did Evoqua perform in fiscal year 2021?
What are Evoqua's sustainability goals?
What was the adjusted EBITDA for Evoqua in Q4 2021?
What were the organic revenue growth figures for Evoqua in Q4 2021?
