Itron Announces Second Quarter 2022 Financial Results and Updated Full-Year 2022 Guidance
Itron, Inc. (NASDAQ:ITRI) reported a 12% decrease in revenue for Q2 2022, totaling $432 million, down from $489 million in 2021. The company faced operational challenges due to supply constraints, resulting in a gross margin of 29.2%, down from 30.6%. The GAAP net loss was $(37) million or $(0.82 per share, compared to $(33) million or $(0.73 per share the prior year. Total backlog reached a record $4.1 billion, while guidance for 2022 revenue has been revised down to $1.85 to $1.9 billion.
- Total backlog increased to $4.1 billion, up from $3.5 billion.
- Bookings in Q2 totaled $612 million, indicating strong demand for solutions.
- Revenue down 12% year-over-year, showing significant sales decline.
- GAAP net loss increased to $(37) million, reflecting operational struggles.
- Guidance for 2022 revenue reduced from $2.0-$2.1 billion to $1.85-$1.9 billion.
-
Revenue of
, compared with$432 million ;$489 million -
Gross margin of
29.2% ; compared with30.6% ; -
GAAP net loss of
, compared with$(37) million ;$(33) million -
GAAP loss per share (EPS) of
, compared with$(0.82) ;$(0.73) -
Non-GAAP diluted EPS of
, compared with$0.07 ;$0.28 -
Adjusted EBITDA of
, compared with$17 million ;$36 million -
Free cash flow of
, compared with$10 million ; and$64 million -
Total backlog of
, compared with$4.1 billion .$3.5 billion
"In the second quarter of 2022, we continued to be impacted operationally by supply constraints and manufacturing inefficiencies. Meanwhile demand for our solutions remained strong with a healthy book-to-bill ratio and another record set for total ending backlog as well as 12-month backlog," said
Summary of Second Quarter Consolidated Financial Results
(All comparisons made are against the prior year period unless otherwise noted)
Revenue
Total second quarter revenue decreased
Device Solutions revenue declined
Gross Margin
Consolidated company gross margin of
Operating Expenses and Operating Income (Loss)
GAAP operating expenses of
GAAP operating loss of
Net Income (Loss) and Earnings (Loss) per Share
Net loss attributable to
Non-GAAP net income, which excludes certain charges including amortization of intangible assets, amortization of debt placement fees, debt extinguishment, restructuring, loss on sale of business, strategic initiatives, acquisition and integration, goodwill impairment, and the income tax effect of those adjustments, was
Cash Flow
Net cash provided by operating activities was
Other Measures
Total backlog was
Financial Guidance Update
Itron's guidance for the full year 2022 has been updated as follows:
-
Revenue between
to$1.85 vs. previous guidance of$1.9 billion to$2.0 $2.1 billion -
Non-GAAP diluted EPS between
to$0.70 vs. previous guidance of$0.90 to$1.25 $1.75
The guidance assumes a Euro to
A reconciliation of forward-looking non-GAAP diluted EPS to the GAAP diluted EPS has not been provided because we are unable to predict with reasonable certainty the potential amount or timing of restructuring and acquisition and integration-related expenses and their related tax effects without unreasonable effort. These items are uncertain, depend on various factors and could have a material impact on GAAP results for the guidance period.
Earnings Conference Call
Itron will host a conference call to discuss the financial results and guidance contained in this release at
About Itron
Itron® enables utilities and cities to safely, securely and reliably deliver critical infrastructure services to communities in more than 100 countries. Our portfolio of smart networks, software, services, meters and sensors helps our customers better manage electricity, gas and water resources for the people they serve. By working with our customers to ensure their success, we help improve the quality of life, ensure the safety and promote the well-being of millions of people around the globe. Itron is dedicated to creating a more resourceful world. Join us: www.itron.com.
Itron® is a registered trademark of
Cautionary Note Regarding Forward Looking Statements
This release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the
Non-GAAP Financial Information
To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in
|
|||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
(Unaudited, in thousands, except per share data) |
|
|
|
|
|||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
|
|
|
|
|
||||||||||
|
Product revenues |
$ |
359,898 |
|
$ |
411,719 |
|
|
$ |
759,708 |
|
$ |
854,523 |
|
|
|
Service revenues |
|
71,984 |
|
|
77,693 |
|
|
|
147,505 |
|
|
154,463 |
|
|
|
|
Total revenues |
|
431,882 |
|
|
489,412 |
|
|
|
907,213 |
|
|
1,008,986 |
|
Cost of revenues |
|
|
|
|
|
||||||||||
|
Product cost of revenues |
|
265,278 |
|
|
295,064 |
|
|
|
560,098 |
|
|
602,755 |
|
|
|
Service cost of revenues |
|
40,499 |
|
|
44,473 |
|
|
|
85,786 |
|
|
89,312 |
|
|
|
|
Total cost of revenues |
|
305,777 |
|
|
339,537 |
|
|
|
645,884 |
|
|
692,067 |
|
Gross profit |
|
126,105 |
|
|
149,875 |
|
|
|
261,329 |
|
|
316,919 |
|
||
|
|
|
|
|
|
|
|
||||||||
Operating expenses |
|
|
|
|
|
||||||||||
|
Sales, general and administrative |
|
72,877 |
|
|
74,144 |
|
|
|
149,278 |
|
|
150,136 |
|
|
|
Research and development |
|
45,055 |
|
|
48,763 |
|
|
|
94,651 |
|
|
100,490 |
|
|
|
Amortization of intangible assets |
|
6,485 |
|
|
8,997 |
|
|
|
13,038 |
|
|
17,970 |
|
|
|
Restructuring |
|
(3,459 |
) |
|
192 |
|
|
|
(9,825 |
) |
|
(1,788 |
) |
|
|
Loss on sale of business |
|
194 |
|
|
24,711 |
|
|
|
2,415 |
|
|
26,103 |
|
|
|
|
|
38,480 |
|
|
— |
|
|
|
38,480 |
|
|
— |
|
|
|
|
Total operating expenses |
|
159,632 |
|
|
156,807 |
|
|
|
288,037 |
|
|
292,911 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
(33,527 |
) |
|
(6,932 |
) |
|
|
(26,708 |
) |
|
24,008 |
|
||
Other income (expense) |
|
|
|
|
|
||||||||||
|
Interest income |
|
349 |
|
|
432 |
|
|
|
566 |
|
|
974 |
|
|
|
Interest expense |
|
(1,660 |
) |
|
(14,004 |
) |
|
|
(3,252 |
) |
|
(24,479 |
) |
|
|
Other income (expense), net |
|
(1,386 |
) |
|
(12,157 |
) |
|
|
(2,075 |
) |
|
(14,923 |
) |
|
|
|
Total other income (expense) |
|
(2,697 |
) |
|
(25,729 |
) |
|
|
(4,761 |
) |
|
(38,428 |
) |
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes |
|
(36,224 |
) |
|
(32,661 |
) |
|
|
(31,469 |
) |
|
(14,420 |
) |
||
Income tax benefit (provision) |
|
(641 |
) |
|
216 |
|
|
|
(4,500 |
) |
|
(4,445 |
) |
||
Net loss |
|
(36,865 |
) |
|
(32,445 |
) |
|
|
(35,969 |
) |
|
(18,865 |
) |
||
|
Net income attributable to noncontrolling interests |
|
102 |
|
|
678 |
|
|
|
92 |
|
|
1,655 |
|
|
Net loss attributable to |
$ |
(36,967 |
) |
$ |
(33,123 |
) |
|
$ |
(36,061 |
) |
$ |
(20,520 |
) |
||
|
|
|
|
|
|
|
|
||||||||
Net loss per common share - Basic |
$ |
(0.82 |
) |
$ |
(0.73 |
) |
|
$ |
(0.80 |
) |
$ |
(0.47 |
) |
||
Net loss per common share - Diluted |
$ |
(0.82 |
) |
$ |
(0.73 |
) |
|
$ |
(0.80 |
) |
$ |
(0.47 |
) |
||
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - Basic |
|
45,066 |
|
|
45,142 |
|
|
|
45,042 |
|
|
43,344 |
|
||
Weighted average common shares outstanding - Diluted |
|
45,066 |
|
|
45,142 |
|
|
|
45,042 |
|
|
43,344 |
|
|
|||||||||||||||
SEGMENT INFORMATION |
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
(Unaudited, in thousands) |
|
|
|
|
|
||||||||||
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
Product revenues |
|
|
|
|
|
||||||||||
|
Device Solutions |
$ |
103,433 |
|
$ |
160,647 |
|
|
$ |
241,319 |
|
$ |
330,978 |
|
|
|
Networked Solutions |
|
241,592 |
|
|
235,167 |
|
|
|
490,860 |
|
|
493,870 |
|
|
|
Outcomes |
|
14,873 |
|
|
15,905 |
|
|
|
27,529 |
|
|
29,675 |
|
|
|
|
|
$ |
359,898 |
|
$ |
411,719 |
|
|
$ |
759,708 |
|
$ |
854,523 |
|
|
|
|
|
|
|
|
|
||||||||
Service revenues |
|
|
|
|
|
||||||||||
|
Device Solutions |
$ |
1,377 |
|
$ |
2,320 |
|
|
$ |
3,056 |
|
$ |
4,770 |
|
|
|
Networked Solutions |
|
27,870 |
|
|
29,891 |
|
|
|
57,422 |
|
|
59,502 |
|
|
|
Outcomes |
|
42,737 |
|
|
45,482 |
|
|
|
87,027 |
|
|
90,191 |
|
|
|
|
|
$ |
71,984 |
|
$ |
77,693 |
|
|
$ |
147,505 |
|
$ |
154,463 |
|
|
|
|
|
|
|
|
|
||||||||
Total revenues |
|
|
|
|
|
||||||||||
|
Device Solutions |
$ |
104,810 |
|
$ |
162,967 |
|
|
$ |
244,375 |
|
$ |
335,748 |
|
|
|
Networked Solutions |
|
269,462 |
|
|
265,058 |
|
|
|
548,282 |
|
|
553,372 |
|
|
|
Outcomes |
|
57,610 |
|
|
61,387 |
|
|
|
114,556 |
|
|
119,866 |
|
|
|
|
|
$ |
431,882 |
|
$ |
489,412 |
|
|
$ |
907,213 |
|
$ |
1,008,986 |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
|
|
|
|
||||||||||
|
Device Solutions |
$ |
13,878 |
|
$ |
30,452 |
|
|
$ |
35,684 |
|
$ |
62,748 |
|
|
|
Networked Solutions |
|
89,909 |
|
|
95,953 |
|
|
|
181,260 |
|
|
208,712 |
|
|
|
Outcomes |
|
22,318 |
|
|
23,470 |
|
|
|
44,385 |
|
|
45,459 |
|
|
|
|
|
$ |
126,105 |
|
$ |
149,875 |
|
|
$ |
261,329 |
|
$ |
316,919 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
|
|
|
||||||||||
|
Device Solutions |
$ |
5,459 |
|
$ |
19,988 |
|
|
$ |
17,037 |
|
$ |
41,689 |
|
|
|
Networked Solutions |
|
62,282 |
|
|
64,630 |
|
|
|
123,289 |
|
|
143,921 |
|
|
|
Outcomes |
|
9,109 |
|
|
12,537 |
|
|
|
17,450 |
|
|
22,873 |
|
|
|
Corporate unallocated |
|
(110,377 |
) |
|
(104,087 |
) |
|
|
(184,484 |
) |
|
(184,475 |
) |
|
|
|
|
$ |
(33,527 |
) |
$ |
(6,932 |
) |
|
$ |
(26,708 |
) |
$ |
24,008 |
|
CONSOLIDATED BALANCE SHEETS |
|||||||||
|
|
|
|
|
|
||||
(Unaudited, in thousands) |
|
|
|
||||||
ASSETS |
|
|
|
||||||
Current assets |
|
|
|
||||||
|
Cash and cash equivalents |
$ |
208,500 |
|
|
$ |
162,579 |
|
|
|
Accounts receivable, net |
|
259,657 |
|
|
|
298,459 |
|
|
|
Inventories |
|
174,522 |
|
|
|
165,799 |
|
|
|
Other current assets |
|
113,409 |
|
|
|
123,092 |
|
|
|
|
Total current assets |
|
756,088 |
|
|
|
749,929 |
|
|
|
|
|
|
|
||||
Property, plant, and equipment, net |
|
150,663 |
|
|
|
163,184 |
|
||
Deferred tax assets, net |
|
187,178 |
|
|
|
181,472 |
|
||
Other long-term assets |
|
41,395 |
|
|
|
42,178 |
|
||
Operating lease right-of-use assets, net |
|
58,083 |
|
|
|
65,523 |
|
||
Intangible assets, net |
|
78,030 |
|
|
|
92,529 |
|
||
|
|
1,036,160 |
|
|
|
1,098,975 |
|
||
|
|
Total assets |
$ |
2,307,597 |
|
|
$ |
2,393,790 |
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||||
Current liabilities |
|
|
|
||||||
|
Accounts payable |
$ |
169,368 |
|
|
$ |
193,129 |
|
|
|
Other current liabilities |
|
52,102 |
|
|
|
81,253 |
|
|
|
Wages and benefits payable |
|
88,933 |
|
|
|
113,532 |
|
|
|
Taxes payable |
|
13,371 |
|
|
|
12,208 |
|
|
|
Current portion of warranty |
|
17,378 |
|
|
|
18,406 |
|
|
|
Unearned revenue |
|
120,038 |
|
|
|
82,816 |
|
|
|
|
Total current liabilities |
|
461,190 |
|
|
|
501,344 |
|
|
|
|
|
|
|
||||
Long-term debt, net |
|
451,369 |
|
|
|
450,228 |
|
||
Long-term warranty |
|
11,331 |
|
|
|
13,616 |
|
||
Pension benefit obligation |
|
77,396 |
|
|
|
87,863 |
|
||
Deferred tax liabilities, net |
|
1,849 |
|
|
|
2,000 |
|
||
Operating lease liabilities |
|
50,082 |
|
|
|
57,314 |
|
||
Other long-term obligations |
|
121,280 |
|
|
|
138,666 |
|
||
|
|
Total liabilities |
|
1,174,497 |
|
|
|
1,251,031 |
|
|
|
|
|
|
|
||||
Equity |
|
|
|
||||||
|
Common stock |
|
1,777,476 |
|
|
|
1,779,775 |
|
|
|
Accumulated other comprehensive loss, net |
|
(115,705 |
) |
|
|
(148,098 |
) |
|
|
Accumulated deficit |
|
(551,661 |
) |
|
|
(515,600 |
) |
|
|
|
|
|
1,110,110 |
|
|
|
1,116,077 |
|
|
Noncontrolling interests |
|
22,990 |
|
|
|
26,682 |
|
|
|
|
Total equity |
|
1,133,100 |
|
|
|
1,142,759 |
|
|
|
Total liabilities and equity |
$ |
2,307,597 |
|
|
$ |
2,393,790 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||
|
|
|
|
||||||
(Unaudited, in thousands) |
Six Months Ended |
||||||||
|
|
|
|
2022 |
|
|
|
2021 |
|
Operating activities |
|
|
|
||||||
|
Net loss |
$ |
(35,969 |
) |
|
$ |
(18,865 |
) |
|
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|||||
|
|
Depreciation and amortization of intangible assets |
|
33,251 |
|
|
|
42,919 |
|
|
|
Non-cash operating lease expense |
|
8,234 |
|
|
|
8,647 |
|
|
|
Stock-based compensation |
|
12,532 |
|
|
|
12,586 |
|
|
|
Amortization of prepaid debt fees |
|
1,720 |
|
|
|
4,315 |
|
|
|
Deferred taxes, net |
|
(4,061 |
) |
|
|
(2,942 |
) |
|
|
Loss on sale of business |
|
2,415 |
|
|
|
26,103 |
|
|
|
Loss on extinguishment of debt, net |
|
— |
|
|
|
10,000 |
|
|
|
|
|
38,480 |
|
|
|
— |
|
|
|
Restructuring, non-cash |
|
(817 |
) |
|
|
878 |
|
|
|
Other adjustments, net |
|
194 |
|
|
|
13,913 |
|
Changes in operating assets and liabilities, net of acquisition and sale of business: |
|
|
|
||||||
|
Accounts receivable |
|
28,924 |
|
|
|
29,549 |
|
|
|
Inventories |
|
(13,592 |
) |
|
|
70 |
|
|
|
Other current assets |
|
(10,688 |
) |
|
|
22,164 |
|
|
|
Other long-term assets |
|
(3,134 |
) |
|
|
6,207 |
|
|
|
Accounts payable, other current liabilities, and taxes payable |
|
(24,604 |
) |
|
|
(43,115 |
) |
|
|
Wages and benefits payable |
|
(22,264 |
) |
|
|
17,815 |
|
|
|
Unearned revenue |
|
36,093 |
|
|
|
17,106 |
|
|
|
Warranty |
|
(2,501 |
) |
|
|
(4,744 |
) |
|
|
Other operating, net |
|
(21,557 |
) |
|
|
(19,926 |
) |
|
|
|
Net cash provided by operating activities |
|
22,656 |
|
|
|
122,680 |
|
|
|
|
|
|
|
||||
Investing activities |
|
|
|
||||||
|
Net proceeds related to the sale of business |
|
55,933 |
|
|
|
3,142 |
|
|
|
Acquisitions of property, plant, and equipment |
|
(10,663 |
) |
|
|
(20,476 |
) |
|
|
Business acquisitions, net of cash and cash equivalents acquired |
|
23 |
|
|
|
— |
|
|
|
Other investing, net |
|
1,722 |
|
|
|
2,819 |
|
|
|
|
Net cash provided by (used in) investing activities |
|
47,015 |
|
|
|
(14,515 |
) |
|
|
|
|
|
|
||||
Financing activities |
|
|
|
||||||
|
Proceeds from borrowings |
|
— |
|
|
|
460,000 |
|
|
|
Payments on debt |
|
— |
|
|
|
(915,000 |
) |
|
|
Issuance of common stock |
|
1,797 |
|
|
|
3,255 |
|
|
|
Proceeds from common stock offering |
|
— |
|
|
|
389,419 |
|
|
|
Proceeds from sale of warrants |
|
— |
|
|
|
45,349 |
|
|
|
Purchases of convertible note hedge contracts |
|
— |
|
|
|
(84,139 |
) |
|
|
Repurchase of common stock |
|
(16,972 |
) |
|
|
— |
|
|
|
Prepaid debt fees |
|
(695 |
) |
|
|
(12,021 |
) |
|
|
Other financing, net |
|
(4,206 |
) |
|
|
4,993 |
|
|
|
|
Net cash used in financing activities |
|
(20,076 |
) |
|
|
(108,144 |
) |
|
|
|
|
|
|
||||
Effect of foreign exchange rate changes on cash and cash equivalents |
|
(3,674 |
) |
|
|
177 |
|
||
Increase in cash and cash equivalents |
|
45,921 |
|
|
|
198 |
|
||
Cash and cash equivalents at beginning of period |
|
162,579 |
|
|
|
206,933 |
|
||
Cash and cash equivalents at end of period |
$ |
208,500 |
|
|
$ |
207,131 |
|
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, free cash flow, and constant currency. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and other companies may define such measures differently. For a reconciliation of each non-GAAP measure to the most comparable financial measure prepared and presented in accordance with GAAP, please see the table captioned Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures.
We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as acquisition and integration related expenses, loss on sale of business, strategic initiative expenses, goodwill impairment, or restructuring charges. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.
Non-GAAP operating expenses and non-GAAP operating income – We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, loss on sale of business, strategic initiative, goodwill impairment, and acquisition and integration. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, loss on sale of business, strategic initiative, goodwill impairment, and acquisition and integration. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are related to acquisitions and restructuring projects. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income.
Non-GAAP net income and non-GAAP diluted EPS – We define non-GAAP net income as net income (loss) attributable to
For interim periods the budgeted annual effective tax rate (AETR) is used, adjusted for any discrete items, as defined in Accounting Standards Codification (ASC) 740 - Income Taxes. The budgeted AETR is determined at the beginning of the fiscal year. The AETR is revised throughout the year based on changes to our full-year forecast. If the revised AETR increases or decreases by 200 basis points or more from the budgeted AETR due to changes in the full-year forecast during the year, the revised AETR is used in place of the budgeted AETR beginning with the quarter the 200 basis point threshold is exceeded and going forward for all subsequent interim quarters in the year. We continue to assess the AETR based on latest forecast throughout the year and use the most recent AETR anytime it increases or decreases by 200 basis points or more from the prior interim period.
Adjusted EBITDA – We define adjusted EBITDA as net income (loss) (a) minus interest income, (b) plus interest expense, depreciation and amortization, debt extinguishment, restructuring, loss on sale of business, strategic initiative, goodwill impairment, acquisition and integration, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income (loss).
Free cash flow – We define free cash flow as net cash provided by operating activities less cash used for acquisitions of property, plant and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of adjusted EBITDA apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts and reconciling to free cash flow.
Constant currency – We refer to the impact of foreign currency exchange rate fluctuations in our discussions of financial results, which references the differences between the foreign currency exchange rates used to translate operating results from the entity's functional currency into
The tables below reconcile the non-GAAP financial measures of operating expenses, operating income, net income, diluted EPS, adjusted EBITDA, and free cash flow with the most directly comparable GAAP financial measures.
|
||||||||||||||||
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES |
||||||||||||||||
TO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
(Unaudited, in thousands, except per share data) |
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
||||||||
TOTAL COMPANY RECONCILIATIONS |
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
|
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
NON-GAAP OPERATING EXPENSES |
|
|
|
|
|
||||||||||
|
|
GAAP operating expenses |
$ |
159,632 |
|
$ |
156,807 |
|
|
$ |
288,037 |
|
$ |
292,911 |
|
|
|
|
|
Amortization of intangible assets |
|
(6,485 |
) |
|
(8,997 |
) |
|
|
(13,038 |
) |
|
(17,970 |
) |
|
|
|
Restructuring |
|
3,459 |
|
|
(192 |
) |
|
|
9,825 |
|
|
1,788 |
|
|
|
|
Loss on sale of business |
|
(194 |
) |
|
(24,711 |
) |
|
|
(2,415 |
) |
|
(26,103 |
) |
|
|
|
Strategic initiative |
|
(710 |
) |
|
— |
|
|
|
(710 |
) |
|
— |
|
|
|
|
|
|
(38,480 |
) |
|
— |
|
|
|
(38,480 |
) |
|
— |
|
|
|
|
Acquisition and integration |
|
(154 |
) |
|
109 |
|
|
|
(216 |
) |
|
486 |
|
|
|
Non-GAAP operating expenses |
$ |
117,068 |
|
$ |
123,016 |
|
|
$ |
243,003 |
|
$ |
251,112 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
NON-GAAP OPERATING INCOME |
|
|
|
|
|
||||||||||
|
|
GAAP operating income (loss) |
$ |
(33,527 |
) |
$ |
(6,932 |
) |
|
$ |
(26,708 |
) |
$ |
24,008 |
|
|
|
|
|
Amortization of intangible assets |
|
6,485 |
|
|
8,997 |
|
|
|
13,038 |
|
|
17,970 |
|
|
|
|
Restructuring |
|
(3,459 |
) |
|
192 |
|
|
|
(9,825 |
) |
|
(1,788 |
) |
|
|
|
Loss on sale of business |
|
194 |
|
|
24,711 |
|
|
|
2,415 |
|
|
26,103 |
|
|
|
|
Strategic initiative |
|
710 |
|
|
— |
|
|
|
710 |
|
|
— |
|
|
|
|
|
|
38,480 |
|
|
— |
|
|
|
38,480 |
|
|
— |
|
|
|
|
Acquisition and integration |
|
154 |
|
|
(109 |
) |
|
|
216 |
|
|
(486 |
) |
|
|
Non-GAAP operating income |
$ |
9,037 |
|
$ |
26,859 |
|
|
$ |
18,326 |
|
$ |
65,807 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
NON-GAAP NET INCOME & DILUTED EPS |
|
|
|
|
|
||||||||||
|
|
GAAP net loss attributable to |
$ |
(36,967 |
) |
$ |
(33,123 |
) |
|
$ |
(36,061 |
) |
$ |
(20,520 |
) |
|
|
|
|
Amortization of intangible assets |
|
6,485 |
|
|
8,997 |
|
|
|
13,038 |
|
|
17,970 |
|
|
|
|
Amortization of debt placement fees |
|
836 |
|
|
12,695 |
|
|
|
1,632 |
|
|
15,347 |
|
|
|
|
Debt extinguishment |
|
— |
|
|
10,000 |
|
|
|
— |
|
|
11,681 |
|
|
|
|
Restructuring |
|
(3,459 |
) |
|
192 |
|
|
|
(9,825 |
) |
|
(1,788 |
) |
|
|
|
Loss on sale of business |
|
194 |
|
|
24,711 |
|
|
|
2,415 |
|
|
26,103 |
|
|
|
|
Strategic initiative |
|
710 |
|
|
— |
|
|
|
710 |
|
|
— |
|
|
|
|
Acquisition and integration |
|
154 |
|
|
(109 |
) |
|
|
216 |
|
|
(486 |
) |
|
|
|
|
|
38,480 |
|
|
— |
|
|
|
38,480 |
|
|
— |
|
|
|
|
Income tax effect of non-GAAP adjustments |
|
(3,300 |
) |
|
(10,719 |
) |
|
|
(2,301 |
) |
|
(13,716 |
) |
|
|
Non-GAAP net income attributable to |
$ |
3,133 |
|
$ |
12,644 |
|
|
$ |
8,304 |
|
$ |
34,591 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Non-GAAP diluted EPS |
$ |
0.07 |
|
$ |
0.28 |
|
|
$ |
0.18 |
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Non-GAAP weighted average common shares outstanding - Diluted |
|
45,228 |
|
|
45,478 |
|
|
|
45,234 |
|
|
43,731 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
ADJUSTED EBITDA |
|
|
|
|
|
||||||||||
|
|
GAAP net loss attributable to |
$ |
(36,967 |
) |
$ |
(33,123 |
) |
|
$ |
(36,061 |
) |
$ |
(20,520 |
) |
|
|
|
|
Interest income |
|
(349 |
) |
|
(432 |
) |
|
|
(566 |
) |
|
(974 |
) |
|
|
|
Interest expense |
|
1,660 |
|
|
14,004 |
|
|
|
3,252 |
|
|
24,479 |
|
|
|
|
Income tax provision (benefit) |
|
641 |
|
|
(216 |
) |
|
|
4,500 |
|
|
4,445 |
|
|
|
|
Debt extinguishment |
|
— |
|
|
10,000 |
|
|
|
— |
|
|
11,681 |
|
|
|
|
Depreciation and amortization |
|
16,414 |
|
|
21,109 |
|
|
|
33,251 |
|
|
42,919 |
|
|
|
|
Restructuring |
|
(3,459 |
) |
|
192 |
|
|
|
(9,825 |
) |
|
(1,788 |
) |
|
|
|
Loss on sale of business |
|
194 |
|
|
24,711 |
|
|
|
2,415 |
|
|
26,103 |
|
|
|
|
Strategic initiative |
|
710 |
|
|
— |
|
|
|
710 |
|
|
— |
|
|
|
|
|
|
38,480 |
|
|
— |
|
|
|
38,480 |
|
|
— |
|
|
|
|
Acquisition and integration |
|
154 |
|
|
(109 |
) |
|
|
216 |
|
|
(486 |
) |
|
|
Adjusted EBITDA |
$ |
17,478 |
|
$ |
36,136 |
|
|
$ |
36,372 |
|
$ |
85,859 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
FREE CASH FLOW |
|
|
|
|
|
||||||||||
|
|
|
Net cash provided by operating activities |
$ |
15,065 |
|
$ |
72,725 |
|
|
$ |
22,656 |
|
$ |
122,680 |
|
|
|
|
Acquisitions of property, plant, and equipment |
|
(5,294 |
) |
|
(9,064 |
) |
|
|
(10,663 |
) |
|
(20,476 |
) |
|
|
Free Cash Flow |
$ |
9,771 |
|
$ |
63,661 |
|
|
$ |
11,993 |
|
$ |
102,204 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005200/en/
Vice President, Investor Relations
(669) 770-4643
Director, Investor Relations
(737) 242-8448
Source:
FAQ
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