Power Solutions International Announces Third Quarter 2024 Financial Results
Power Solutions International (PSIX) reported strong Q3 2024 financial results with net income of $17.3 million, up 122% year-over-year. Net sales increased 9% to $125.8 million, driven by higher power systems sales, particularly in the data center sector. Gross margin improved to 28.9%, up 4.8 percentage points from Q3 2023. The company completed refinancing with a new $120 million credit facility and secured a $105 million shareholder loan agreement with Weichai. Stockholders' equity turned positive at $42.1 million, up from a deficit of $3.9 million in December 2023. For 2024, PSI expects net sales to increase approximately 3% versus 2023.
Power Solutions International (PSIX) ha riportato risultati finanziari solidi per il terzo trimestre del 2024, con un reddito netto di 17,3 milioni di dollari, in aumento del 122% rispetto all'anno precedente. Le vendite nette sono aumentate del 9%, raggiungendo i 125,8 milioni di dollari, grazie all’aumento delle vendite di sistemi di alimentazione, in particolare nel settore dei data center. Il margine lordo è migliorato al 28,9%, in crescita di 4,8 punti percentuali rispetto al terzo trimestre del 2023. L'azienda ha completato il rifinanziamento con una nuova linea di credito di 120 milioni di dollari e ha assicurato un accordo di prestito per azionisti di 105 milioni di dollari con Weichai. Il patrimonio netto degli azionisti è diventato positivo a 42,1 milioni di dollari, rispetto a un deficit di 3,9 milioni di dollari a dicembre 2023. Per il 2024, PSI prevede un aumento delle vendite nette di circa il 3% rispetto al 2023.
Power Solutions International (PSIX) reportó sólidos resultados financieros en el tercer trimestre de 2024, con un ingreso neto de 17.3 millones de dólares, lo que representa un aumento del 122% interanual. Las ventas netas aumentaron un 9%, alcanzando los 125.8 millones de dólares, impulsadas por mayores ventas de sistemas de energía, especialmente en el sector de los centros de datos. El margen bruto mejoró al 28.9%, aumentando 4.8 puntos porcentuales desde el tercer trimestre de 2023. La compañía completó un refinanciamiento con una nueva línea de crédito de 120 millones de dólares y aseguró un acuerdo de préstamo para accionistas de 105 millones de dólares con Weichai. El patrimonio neto de los accionistas se volvió positivo en 42.1 millones de dólares, en comparación con un déficit de 3.9 millones de dólares en diciembre de 2023. Para 2024, PSI espera que las ventas netas aumenten aproximadamente un 3% en comparación con 2023.
파워 솔루션즈 인터내셔널 (PSIX)는 2024년 3분기에 강력한 금융 실적을 보고했으며, 순이익은 1,730만 달러로 작년 대비 122% 증가했습니다. 순매출은 9% 증가하여 1억 2,580만 달러에 이르렀으며, 이는 데이터 센터 분야에서의 전력 시스템 판매 증가에 의해 주도되었습니다. 총 마진이 개선되었습니다 28.9%로, 2023년 3분기 대비 4.8포인트 상승했습니다. 회사는 1억 2,000만 달러의 새로운 신용 시설로 재정 지원을 완료하였고, Weichai와 1억 5,000만 달러의 주주 대출 계약을 체결했습니다. 주주 자본은 4,210만 달러로 긍정적인 상태가 되었으며, 2023년 12월의 390만 달러 적자에서 개선되었습니다. 2024년에는 PSI가 2023년 대비 약 3%의 순매출 증가를 예상하고 있습니다.
Power Solutions International (PSIX) a annoncé des résultats financiers solides pour le troisième trimestre 2024, avec un revenu net de 17,3 millions de dollars, en hausse de 122 % par rapport à l'année précédente. Les ventes nettes ont augmenté de 9 % pour atteindre 125,8 millions de dollars, soutenues par des ventes de systèmes de puissance plus élevées, en particulier dans le secteur des centres de données. La marge brute s'est améliorée à 28,9 %, en hausse de 4,8 points de pourcentage par rapport au troisième trimestre 2023. La société a achevé son refinancement avec une nouvelle facilité de crédit de 120 millions de dollars et a sécurisé un accord de prêt aux actionnaires de 105 millions de dollars avec Weichai. Les capitaux propres des actionnaires sont devenus positifs à 42,1 millions de dollars, contre un déficit de 3,9 millions de dollars en décembre 2023. Pour 2024, PSI s'attend à une augmentation des ventes nettes d'environ 3 % par rapport à 2023.
Power Solutions International (PSIX) berichtete über starke Finanzresultate im dritten Quartal 2024, mit einem Nettoeinkommen von 17,3 Millionen Dollar, was einem Anstieg von 122% im Vergleich zum Vorjahr entspricht. Der Nettoumsatz stieg um 9% auf 125,8 Millionen Dollar, was durch höhere Verkäufe von Energiesystemen, insbesondere im Rechenzentrumssektor, angetrieben wurde. Die Bruttomarge verbesserte sich auf 28,9%, was einen Anstieg um 4,8 Prozentpunkte im Vergleich zum dritten Quartal 2023 bedeutet. Das Unternehmen hat ein Refinanzierungsverfahren mit einer neuen Kreditfazilität von 120 Millionen Dollar abgeschlossen und eine 105 Millionen Dollar umfassende Aktionärsdarlehensvereinbarung mit Weichai gesichert. Das Eigenkapital der Aktionäre wurde positiv und beträgt 42,1 Millionen Dollar, im Vergleich zu einem Defizit von 3,9 Millionen Dollar im Dezember 2023. Für 2024 erwartet PSI einen Anstieg der Nettoumsätze um etwa 3% im Vergleich zu 2023.
- Net income surged 122% to $17.3 million
- Net sales increased 9% to $125.8 million
- Gross margin improved by 4.8 percentage points to 28.9%
- Secured new $120 million credit facility at better interest rates
- Stockholders' equity improved by $46 million to $42.1 million
- Interest expense decreased from $4.2M to $2.8M
- Industrial end market sales decreased due to lower demand and UFLPA restrictions
- Transportation end market sales declined by $6.2 million
- SG&A expenses increased by 3%
- Total debt remains high at $135.2 million
Net Income of
Gross Margin of
Diluted Earnings Per Share of
Shareholders’ Equity of
WOOD DALE, Ill., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Power Solutions International, Inc. (the “Company” or “PSI”) (OTC Pink: PSIX), a leader in the design, engineering and manufacture of emission-certified engines and power systems, reported its financial results for the third quarter 2024.
Financial Highlights
| ($ in millions, except per share amounts) | Quarter Ended | ||||
| September 30, 2024 | September 30, 2023 | Change | |||
| Net sales | |||||
| Gross Profit | |||||
| Net Income | |||||
| Diluted Earnings per Share | |||||
Today, Power Solutions International, Inc., reported strong profit for the three months ended September 30, 2024, with net income of
Dino Xykis, Chief Executive Officer, commented, “We continued to deliver strong profit in the third quarter, driven by higher sales from our power systems business, including contributions from the expanding data center sector, along with ongoing operational excellence. To meet growing customer demand, our team is actively working on several projects to expand manufacturing capacity. The Company also is committed to efficiently managing expenses, including streamlining operating expenses and prioritizing certain R&D investments in support of long-term growth objectives.”
Kenneth Li, Chief Financial Officer, commented, “During the quarter, we successfully completed the refinancing of our debt with a new credit facility. This strategic facility provides access to up to
Net sales for the third quarter of 2024 were
Gross profit of
Research and development expenses during the three months ended September 30, 2024 and 2023 were
Selling, general and administrative expenses of
Interest expense was
Net income was
Balance Sheet Update
On August 30, 2024, the Company completed its refinancing, securing a new uncommitted secured revolving credit agreement. This agreement provides the Company with access to up to
Stockholders' Equity was
Outlook for 2024
The Company expects its net sales in 2024 to increase by approximately
About Power Solutions International, Inc.
Power Solutions International, Inc. (PSI) is a leader in the design, engineering and manufacture of a broad range of advanced, emission-certified engines and power systems. PSI provides integrated turnkey solutions to leading global original equipment manufacturers and end-user customers within the power systems, industrial and transportation end markets. The Company’s unique in-house design, prototyping, engineering and testing capabilities allow PSI to customize clean, high-performance engines using a fuel agnostic strategy to run on a wide variety of fuels, including natural gas, propane, gasoline, diesel and biofuels.
PSI develops and delivers complete power systems that are used worldwide in stationary and mobile power generation applications supporting standby, prime, demand response, microgrid, and co-generation power (CHP) applications; and industrial applications that include forklifts, agricultural and turf, arbor care, industrial sweepers, aerial lifts, irrigation pumps, ground support, and construction equipment. In addition, PSI develops and delivers powertrains purpose-built for medium-duty trucks and buses including school and transit buses, work trucks, terminal tractors, and various other vocational vehicles. For more information on PSI, visit www.psiengines.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements regarding the current expectations of the Company about its prospects and opportunities. These forward-looking statements are entitled to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may involve risks and uncertainties. These statements often include words such as “anticipate,” “believe,” “budgeted,” “contemplate,” “estimate,” “expect,” “forecast,” “guidance,” “may,” “outlook,” “plan,” “projection,” “should,” “target,” “will,” “would” or similar expressions, but these words are not the exclusive means for identifying such statements. These statements are not guarantees of performance or results, and they involve risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect the Company’s results of operations and liquidity and could cause actual results, performance or achievements to differ materially from those expressed in, or implied by, the Company’s forward-looking statements.
The Company cautions that the risks, uncertainties and other factors that could cause its actual results to differ materially from those expressed in, or implied by, the forward-looking statements include, without limitation: the impact of the macro-economic environment in both the U.S. and internationally on our business and expectations regarding growth of the industry; uncertainties arising from global events (including the Russia-Ukraine and Israel-Hamas conflicts), natural disasters or pandemics, and their impact on material prices; the effects of strategic investments on our operations, including our efforts to expand our global market share and actions taken to increase sales growth; the ability to develop and successfully launch new products; labor costs and other employment-related costs; loss of suppliers and disruptions in the supply of raw materials; the Company’s ability to continue as a going concern; the Company’s ability to raise additional capital when needed and its liquidity; uncertainties around the Company’s ability to meet funding conditions under its financing arrangements and access to capital thereunder; the potential acceleration of the maturity at any time of the loans under the Company’s uncommitted senior secured revolving credit facility through the exercise by Standard Chartered Bank of its demand right; the impact of rising interest rates; changes in economic conditions, including inflationary trends in the price of raw materials; our reliance on information technology and the associated risk involving potential security lapses and/or cyber-attacks; the ability of the Company to accurately forecast sales, and the extent to which sales result in recorded revenues; changes in customer demand for the Company’s products; volatility in oil and gas prices; the impact of U.S. tariffs on imports, the impact of supply chain interruptions and raw material shortages, including compliance disruptions such as the UFLPA delaying goods from China; the potential impact of higher warranty costs and the Company’s ability to mitigate such costs; any delays and challenges in recruiting and retaining key employees consistent with the Company’s plans; any negative impacts from trading of the Company’s common stock, par value
The Company’s forward-looking statements are presented as of the date hereof. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Power Solutions International, Inc.
Randall D. Lehner
General Counsel
630-373-1637
rlehner@psiengines.com
Results of operations for the three and nine months ended September 30, 2024, compared with the three and nine months ended September 30, 2023 (UNAUDITED):
| (in thousands, except per share amounts) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||||||||||||||
| 2024 | 2023 | Change | % Change | 2024 | 2023 | Change | % Change | ||||||||||||||||||||||
| Net sales (from related parties | $ | 125,842 | $ | 115,884 | $ | 9,958 | 9 | % | $ | 331,668 | $ | 354,218 | $ | (22,550 | ) | (6 | )% | ||||||||||||
| Cost of sales (from related parties | 89,418 | 87,979 | 1,439 | 2 | % | 234,300 | 275,890 | (41,590 | ) | (15 | )% | ||||||||||||||||||
| Gross profit | 36,424 | 27,905 | 8,519 | 31 | % | 97,368 | 78,328 | 19,040 | 24 | % | |||||||||||||||||||
| Gross margin % | 28.9 | % | 24.1 | % | 4.8 | % | 29.4 | % | 22.1 | % | 7.4 | % | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Research and development expenses | 4,651 | 4,762 | (111 | ) | (2 | )% | 14,807 | 14,028 | 779 | 6 | % | ||||||||||||||||||
| Research and development expenses as a % of sales | 3.7 | % | 4.1 | % | (0.4 | )% | 4.5 | % | 4.0 | % | 0.5 | % | |||||||||||||||||
| Selling, general and administrative expenses | 10,957 | 10,595 | 362 | 3 | % | 25,009 | 31,050 | (6,041 | ) | (19 | )% | ||||||||||||||||||
| Selling, general and administrative expenses as a % of sales | 8.7 | % | 9.1 | % | (0.4 | )% | 7.5 | % | 8.8 | % | (1.3 | )% | |||||||||||||||||
| Amortization of intangible assets | 365 | 436 | (71 | ) | (16 | )% | 1,095 | 1,309 | (214 | ) | (16 | )% | |||||||||||||||||
| Total operating expenses | 15,973 | 15,793 | 180 | 1 | % | 40,911 | 46,387 | (5,476 | ) | (12 | )% | ||||||||||||||||||
| Operating income | 20,451 | 12,112 | 8,339 | 69 | % | 56,457 | 31,941 | 24,516 | 77 | % | |||||||||||||||||||
| Interest expense (from related parties | 2,837 | 4,164 | (1,327 | ) | (32 | )% | 9,092 | 13,474 | (4,382 | ) | (33 | )% | |||||||||||||||||
| Income before income taxes | 17,614 | 7,948 | 9,666 | 122 | % | 47,365 | 18,467 | 28,898 | 156 | % | |||||||||||||||||||
| Income tax expense | 277 | 153 | 124 | 81 | % | 1,373 | 531 | 842 | 159 | % | |||||||||||||||||||
| Net income | $ | 17,337 | $ | 7,795 | $ | 9,542 | 122 | % | $ | 45,992 | $ | 17,936 | $ | 28,056 | 156 | % | |||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||
| Basic | $ | 0.75 | $ | 0.34 | $ | 0.41 | 121 | % | $ | 2.00 | $ | 0.78 | $ | 1.22 | 156 | % | |||||||||||||
| Diluted | $ | 0.75 | $ | 0.34 | $ | 0.41 | 121 | % | $ | 2.00 | $ | 0.78 | $ | 1.22 | 156 | % | |||||||||||||
| Non-GAAP Financial Measures: | |||||||||||||||||||||||||||||
| Adjusted net income * | $ | 17,341 | $ | 8,861 | $ | 8,480 | 96 | % | $ | 40,941 | $ | 19,029 | $ | 21,912 | 115 | % | |||||||||||||
| Adjusted net income per share – diluted* | $ | 0.75 | $ | 0.39 | $ | 0.36 | 92 | % | $ | 1.79 | $ | 0.84 | $ | 0.95 | 113 | % | |||||||||||||
| EBITDA * | $ | 21,747 | $ | 13,498 | $ | 8,249 | 61 | % | $ | 60,388 | $ | 36,175 | $ | 24,213 | 67 | % | |||||||||||||
| Adjusted EBITDA * | $ | 21,751 | $ | 14,564 | $ | 7,187 | 49 | % | $ | 55,337 | $ | 37,268 | $ | 18,069 | 48 | % | |||||||||||||
| NM | Not meaningful |
| * | See reconciliation of non-GAAP financial measures to GAAP results below |
| POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (in thousands, except par values) | As of September 30, 2024 (unaudited) | As of December 31, 2023 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 40,456 | $ | 22,758 | |||
| Restricted cash | 3,217 | 3,836 | |||||
| Accounts receivable, net of allowances of | 77,493 | 66,979 | |||||
| Income tax receivable | 666 | 550 | |||||
| Inventories, net | 104,889 | 84,947 | |||||
| Prepaid expenses and other current assets | 15,786 | 8,518 | |||||
| Contract Asset | 20,006 | 15,554 | |||||
| Other current assets | 2,655 | 2,240 | |||||
| Total current assets | 265,168 | 205,382 | |||||
| Property, plant and equipment, net | 14,100 | 14,928 | |||||
| Right-of-use assets, net | 24,319 | 27,145 | |||||
| Intangible assets, net | 2,819 | 3,914 | |||||
| Goodwill | 29,835 | 29,835 | |||||
| Other noncurrent assets | 2,894 | 3,099 | |||||
| TOTAL ASSETS | $ | 339,135 | $ | 284,303 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
| Current liabilities: | |||||||
| Accounts payable (to related parties | $ | 76,615 | $ | 67,355 | |||
| Current maturities of long-term debt | 74 | 139 | |||||
| Revolving line of credit | 100,000 | 50,000 | |||||
| Finance lease liability, current | 78 | 76 | |||||
| Operating lease liability, current | 4,373 | 3,912 | |||||
| Other short-term financing (from related parties | 35,000 | 94,820 | |||||
| Other accrued liabilities (to related parties | 43,080 | 31,999 | |||||
| Total current liabilities | 259,220 | 248,301 | |||||
| Deferred income taxes | 1,640 | 1,478 | |||||
| Long-term debt, net of current maturities | 51 | 90 | |||||
| Finance lease liability, long-term | 35 | 94 | |||||
| Operating lease liability, long-term | 21,845 | 25,070 | |||||
| Noncurrent contract liabilities | 1,949 | 2,401 | |||||
| Other noncurrent liabilities | 12,289 | 10,786 | |||||
| TOTAL LIABILITIES | $ | 297,029 | $ | 288,220 | |||
| Commitments and Contingencies (Note 10) | |||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
| Preferred stock – | $ | — | $ | — | |||
| Common stock – | 23 | 23 | |||||
| Additional paid-in capital | 157,741 | 157,770 | |||||
| Accumulated deficit | (114,798 | ) | (160,790 | ) | |||
| Treasury stock, at cost, 127 and 149 shares at September 30, 2024 and December 31, 2023, respectively | (860 | ) | (920 | ) | |||
| TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 42,106 | (3,917 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 339,135 | $ | 284,303 | |||
See Notes to Consolidated Financial Statements
| POWER SOLUTIONS INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||||
| (in thousands) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cash provided by operating activities | |||||||||||||||
| Net income | $ | 17,337 | $ | 7,795 | $ | 45,992 | $ | 17,936 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
| Amortization of intangible assets | 365 | 436 | 1,095 | 1,309 | |||||||||||
| Depreciation | 931 | 950 | 2,836 | 2,925 | |||||||||||
| Amortization of right-of-use assets | 1,026 | 1,021 | 3,967 | (1,184 | ) | ||||||||||
| Stock-based compensation expense | 4 | 26 | 52 | 132 | |||||||||||
| Amortization of financing fees | 75 | 244 | 348 | 938 | |||||||||||
| Deferred income taxes | 54 | 44 | 162 | 131 | |||||||||||
| (Credit) provision for losses in accounts receivable | (1,477 | ) | (706 | ) | (2,085 | ) | 2,998 | ||||||||
| Increase in allowance for inventory obsolescence | 1,147 | 762 | 2,498 | 2,560 | |||||||||||
| Other adjustments, net | (6 | ) | 11 | 45 | 3 | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||
| Accounts receivable | (11,755 | ) | 7,481 | (8,428 | ) | 15,476 | |||||||||
| Inventories | (9,283 | ) | 18,064 | (19,133 | ) | 23,611 | |||||||||
| Prepaid expenses | (3,020 | ) | (1,627 | ) | (7,268 | ) | 4,097 | ||||||||
| Contract assets | 6,700 | (4,326 | ) | (4,452 | ) | 3,494 | |||||||||
| Other assets | 78 | (1,219 | ) | 149 | (1,268 | ) | |||||||||
| Accounts payable | 9,702 | 4,165 | 9,164 | (1,268 | ) | ||||||||||
| Income taxes receivable | (373 | ) | — | (116 | ) | — | |||||||||
| Accrued expenses | 2,236 | 4,392 | 7,694 | 2,638 | |||||||||||
| Other noncurrent liabilities | (1,166 | ) | (1,970 | ) | (2,781 | ) | (1,631 | ) | |||||||
| Net cash provided by operating activities | 12,575 | 35,543 | 29,739 | 72,897 | |||||||||||
| Cash used in investing activities | |||||||||||||||
| Capital expenditures | (430 | ) | (1,424 | ) | (1,957 | ) | (2,678 | ) | |||||||
| Net cash used in investing activities | (430 | ) | (1,424 | ) | (1,957 | ) | (2,678 | ) | |||||||
| Cash used in financing activities | |||||||||||||||
| Repayment of long-term debt and lease liabilities | (51 | ) | (60 | ) | (153 | ) | (161 | ) | |||||||
| Proceeds from short-term financings | 100,000 | — | 100,000 | — | |||||||||||
| Repayment of short-term financings | (99,820 | ) | (29,899 | ) | (109,820 | ) | (50,593 | ) | |||||||
| Payments of deferred financing costs | (592 | ) | 1 | (709 | ) | (983 | ) | ||||||||
| Tax benefit from exercise of stock based compensation | (1 | ) | — | (21 | ) | — | |||||||||
| Other financing activities, net | — | (2 | ) | — | (2 | ) | |||||||||
| Net cash used in financing activities | (464 | ) | (29,960 | ) | (10,703 | ) | (51,739 | ) | |||||||
| Net increase in cash, cash equivalents, and restricted cash | 11,681 | 4,058 | 17,079 | 18,480 | |||||||||||
| Cash, cash equivalents, and restricted cash at beginning of the period | 31,992 | 31,542 | 26,594 | 27,900 | |||||||||||
| Cash, cash equivalents, and restricted cash at end of the period | $ | 43,673 | $ | 35,600 | $ | 43,673 | $ | 46,380 | |||||||
Non-GAAP Financial Measures
In addition to the results provided in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) above, this press release also includes non-GAAP (adjusted) financial measures. Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the consolidated financial statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations within the Company’s Form 10-Q for the quarter ended September 30, 2024. Management does not use these non-GAAP financial measures for any purpose other than the reasons stated below.
| Non-GAAP Financial Measure | Comparable GAAP Financial Measure |
| Adjusted net income | Net income |
| Adjusted net income per share – diluted | Net income per share – diluted |
| EBITDA | Net income |
| Adjusted EBITDA | Net income |
The Company believes that Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA provide relevant and useful information, which is widely used by analysts, investors and competitors in its industry as well as by the Company’s management in assessing the performance of the Company. Adjusted net income is defined as net income as adjusted for certain items that the Company believes are not indicative of its ongoing operating performance. Adjusted net income per share – diluted is a measure of the Company’s diluted earnings per common share adjusted for the impact of special items. EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA further excludes the effects of other non-cash charges and certain other items that do not reflect the ordinary earnings of the Company’s operations.
Adjusted net income, Adjusted net income per share – diluted, EBITDA, and Adjusted EBITDA are used by management for various purposes, including as a measure of performance of the Company’s operations and as a basis for strategic planning and forecasting. Adjusted net income, Adjusted net income per share – diluted, and Adjusted EBITDA may be useful to an investor because these measures are widely used to evaluate companies’ operating performance without regard to items excluded from the calculation of such measures, which can vary substantially from company to company depending on the accounting methods, the book value of assets, the capital structure and the method by which the assets were acquired, among other factors. They are not, however, intended as alternative measures of operating results or cash flow from operations as determined in accordance with U.S. GAAP.
The following table presents a reconciliation from Net income to Adjusted net income for the three and nine months ended September 30, 2024 and 2023 (UNAUDITED):
| (in thousands) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Net income | $ | 17,337 | $ | 7,795 | $ | 45,992 | $ | 17,936 | |||||
| Stock-based compensation 1 | 4 | 26 | 52 | 132 | |||||||||
| Other legal matters 2 | — | 1,040 | (5,103 | ) | 1,061 | ||||||||
| Insurance proceeds 3 | — | — | — | (100 | ) | ||||||||
| Adjusted net income | $ | 17,341 | $ | 8,861 | $ | 40,941 | $ | 19,029 | |||||
The following table presents a reconciliation from Net income per share – diluted to Adjusted net income per share – diluted for the three and nine months ended September 30, 2024 and 2023 (UNAUDITED):
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net income per share – basic | $ | 0.75 | $ | 0.34 | $ | 2.00 | $ | 0.78 | ||||
| Stock-based compensation 1 | — | — | — | 0.01 | ||||||||
| Other legal matters 2 | — | 0.05 | (0.21 | ) | 0.05 | |||||||
| Adjusted net income per share – diluted | $ | 0.75 | $ | 0.39 | $ | 1.79 | $ | 0.84 | ||||
| Diluted shares (in thousands) | 23,043 | 22,974 | 23,003 | 22,969 | ||||||||
The following table presents a reconciliation from Net income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (UNAUDITED):
| (in thousands) | For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Net income | $ | 17,337 | $ | 7,795 | $ | 45,992 | $ | 17,936 | |||||
| Interest expense | 2,837 | 4,164 | 9,092 | 13,474 | |||||||||
| Income tax expense | 277 | 153 | 1,373 | 531 | |||||||||
| Depreciation | 931 | 950 | 2,836 | 2,925 | |||||||||
| Amortization of intangible assets | 365 | 436 | 1,095 | 1,309 | |||||||||
| EBITDA | 21,747 | 13,498 | 60,388 | 36,175 | |||||||||
| Stock-based compensation 1 | 4 | 26 | 52 | 132 | |||||||||
| Other legal matters 2 | — | 1,040 | (5,103 | ) | 1,061 | ||||||||
| Insurance proceeds 3 | — | — | — | (100 | ) | ||||||||
| Adjusted EBITDA | $ | 21,751 | $ | 14,564 | $ | 55,337 | $ | 37,268 | |||||
- Amounts reflect non-cash stock-based compensation expense and have no material impact on the Adjusted net income per share – diluted for the three and nine months ended September 30, 2024 and 2023.
- Amounts include legal settlements for the three and nine months ended September 30, 2024 and 2023.
- Amounts include insurance recoveries related to a prior year incident and have no material impact on the Adjusted net income per share – diluted for the three and nine months ended September 30, 2024 and 2023.
FAQ
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