Infrastructure and Energy Alternatives, Inc. (NASDAQ: IEA) (“IEA”
or the “Company”), a leading infrastructure construction company
with renewable energy and specialty civil expertise, today
announced its financial results for the quarter ended June 30,
2021.
Second Quarter Highlights
- Backlog increased by $86.0 million
during the quarter to a record amount of $2.8 billion; the Company
expects to recognize $1.8 billion of backlog over the next 12
months.
- Record quarterly revenue totaling
$560.1 million, as compared to $480.6 million for last year’s
second quarter.
- Net income of $4.7 million, or
$0.12 per diluted share, as compared to $3.6 million, or $0.09 per
diluted share, for last year’s second quarter.
- Adjusted EBITDA of $35.7 million,
as compared to $39.3 million for last year’s second quarter.
- Reaffirming full year 2021 guidance, including revenue to range
from $1.80 billion to $1.95 billion and Adjusted EBITDA to range
from $130 million to $140 million.
- Company to host earnings conference call at 11 AM ET on
Tuesday, August 10, 2021.
Management Commentary
“IEA generated record revenue in the second
quarter and ended the quarter with more business in backlog than at
any time in our Company’s history. Backlog increased by $86.0
million during the quarter to a record $2.8 billion. The growth in
our revenue and backlog during the second quarter reflects
continued strong demand in our Renewables Segment, particularly in
our solar business where revenues totaled $108 million, up nearly
1,500% year-over-year. 2021 is unfolding as expected, and so we are
reaffirming the revenue and Adjusted EBITDA guidance we provided in
May. We expect our earnings to accelerate, however, throughout the
remainder of the year as COVID-19-related project delays abate and
we return to normal permitting and construction timelines,” said
J.P. Roehm, IEA’s President and Chief Executive Officer.
Mr. Roehm continued, “I am very excited about
what the future holds for IEA. The United States is still in the
early innings of what will be a multi-decade transformation of the
power industry from predominantly fossil-fueled generation to
renewables. As one of the largest builders of wind and solar
projects in the country, IEA will be a direct beneficiary of that
transformation. We are also seeing growth ahead for our Specialty
Civil Segment, with the prospect for increased federal spending on
rail and highway projects. Our environmental business will also be
a major growth engine for our Company in the future as we win
additional coal ash remediation contracts like our recently
announced agreement with Dominion Energy.”
Second Quarter Results
Revenue by segment was as follows:
|
Three Months Ended June 30, |
(in
thousands) |
2021 |
|
2020 |
Segment |
Revenue |
% of TotalRevenue |
|
Revenue |
% of TotalRevenue |
Wind |
$ |
317,066 |
|
56.6 |
% |
|
$ |
317,151 |
|
66.0 |
% |
Solar |
107,788 |
|
19.2 |
% |
|
7,111 |
|
1.5 |
% |
Renewables Segment |
$ |
424,854 |
|
75.8 |
% |
|
$ |
324,262 |
|
67.5 |
% |
Specialty Civil Segment |
135,294 |
|
24.2 |
% |
|
156,342 |
|
32.5 |
% |
Total revenue |
$ |
560,148 |
|
100.0 |
% |
|
$ |
480,604 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Renewables Segment revenue totaled $424.9
million, an increase of 31.0%, or $100.6 million compared to the
prior year, as a result of a $100.7 million increase in solar
revenue from last year’s second quarter.
Specialty Civil Segment revenue totaled $135.3
million, a decrease of 13.5%, or $21.0 million year-over-year,
primarily due to lower revenue in the heavy civil market as a
result of unseasonably rainy conditions in parts of the country and
in comparison to a large project in the last year quarter which was
not repeated this year, partially offset by higher revenue from the
environmental remediation market.
Segment Gross Profit
Gross profit by segment was as follows:
|
Three Months Ended June 30, |
(in
thousands) |
2021 |
|
2020 |
Segment |
Gross Profit |
Gross ProfitMargin |
|
Gross Profit |
Gross ProfitMargin |
Renewables |
$ |
42,883 |
|
10.1 |
% |
|
$ |
36,983 |
|
11.4 |
% |
Specialty Civil |
10,600 |
|
7.8 |
% |
|
17,258 |
|
11.0 |
% |
Total gross profit |
$ |
53,483 |
|
9.5 |
% |
|
$ |
54,241 |
|
11.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Renewables Segment gross profit was $42.9
million, or 10.1% of revenue, for the second quarter of 2021,
compared to $37.0 million, or 11.4% of revenue, for the same period
in 2020. The decrease in gross profit margin for the Renewables
Segment was primarily related to adding more craft labor and rented
and leased equipment in anticipation of higher work volumes and
greater operating intensity in the second half of the year.
Specialty Civil Segment gross profit was $10.6
million, or 7.8% of revenue, for the second quarter of 2021, as
compared to $17.3 million, or 11.0% of revenue, for the same period
in 2020. This decrease resulted from fewer projects under
construction in the second quarter of 2021, which resulted in lower
utilization of labor and equipment.
Selling, general and administrative expenses of $30.9 million
increased 10.0%, or $2.8 million, in the second quarter of 2021
compared to the same period in 2020. The increase in selling,
general and administrative expenses was primarily driven by higher
overall compensation and benefit expenses in the second quarter
compared to last year’s quarter. As a percent of revenues, selling,
general and administrative expenses were 5.5% in the second quarter
of 2021, compared to 5.8% in the same period in 2020.
Interest expense decreased by $1.7 million compared to the same
period in 2020. This decrease was primarily driven by lower
effective interest rates on the Company’s term loan, partially
offset by an increase in the dividend rate on the Company's Series
B Preferred Stock.
Other income increased by $2.4 million to $0.8 million in the
second quarter of 2021, compared to other expense of $1.6 million
for the same period in 2020. This increase was primarily from the
fair value adjustment of the Company’s Series B Preferred Stock and
private warrant liabilities.
Provision for income taxes decreased $0.6 million to an expense
of $4.2 million in the second quarter of 2021, compared to an
expense of $4.7 million for the same period in 2020. The effective
tax rates for the period ended June 30, 2021 and 2020 were 47.0%
and 56.8%, respectively. The higher effective tax rate in the
second quarter of 2021 was primarily attributable to an expected
increase in non-deductible compensation.
Net income was $4.7 million in the second quarter of 2021, an
increase of 30.6%, or $1.1 million, compared to the second quarter
of 2020. Earnings per diluted share were $0.12 per diluted share
for the quarter, compared to $0.09 per diluted share in the second
quarter of 2020.
Adjusted EBITDA was $35.7 million for the second quarter,
compared to $39.3 million in the second quarter of 2020. For a
reconciliation of net income to Adjusted EBITDA, please see the
appendix to this release.
Balance Sheet
As of June 30, 2021, the Company had $117.7
million of cash and cash equivalents and total debt of $364.3
million, which consisted of $173.3 million outstanding under its
credit facility, $4.3 million of commercial equipment loans, and
$186.7 million of Series B Preferred Stock. Series B Preferred
Stock is mandatorily redeemable in 2025 and therefore is
categorized as long-term debt. At the end of the quarter, the
Company had $53.3 million of availability under its credit
facility.
Backlog
IEA defines “backlog” as the amount of revenue
the Company expects to realize from the uncompleted portions of
existing construction contracts, including new contracts under
which work has not begun and awarded contracts for which the
definitive project documentation is being prepared.
The following table summarizes the Company’s
backlog by segment for the periods below:
(in
millions) |
|
|
|
Segments |
June 30, 2021 |
December 31, 2020 |
June 30, 2020 |
Wind |
$ |
1,061.0 |
|
$ |
1,093.1 |
|
$ |
852.1 |
|
Solar |
800.1 |
|
420.3 |
|
325.5 |
|
Renewables |
$ |
1,861.1 |
|
$ |
1,513.4 |
|
$ |
1,177.6 |
|
Specialty Civil |
900.7 |
|
556.1 |
|
579.8 |
|
Total |
$ |
2,761.8 |
|
$ |
2,069.5 |
|
$ |
1,757.4 |
|
|
|
|
|
|
|
|
|
|
|
The Company expects to realize approximately $1,811.0 million of
its estimated backlog in the next twelve months.
Outlook
For the full year 2021, IEA is reaffirming its
revenue and Adjusted EBITDA guidance ranges. The Company continues
to expect full year 2021 revenue in the range of $1.80 billion to
$1.95 billion and Adjusted EBITDA for the year in the range of $130
million to $140 million. For a reconciliation of Adjusted EBITDA,
please see the table at the end of this release.
Conference Call
IEA will hold a conference call to discuss its
second quarter 2021 results on Tuesday, August 10, 2021 at 11:00
a.m. Eastern Time. To join the conference call, please dial (877)
407-0784 (domestic) or (201) 689-8560 (international) and ask for
Infrastructure & Energy Alternatives’ Second Quarter 2021
Conference Call. To listen via the Internet, please visit the
investor section of the Company’s website at
https://ir.iea.net at least 15 minutes prior to the start of
the call to download and install any necessary audio software. The
conference call webcast will be archived on the Company’s website
as well as available for replay by dialing (844) 512-2921 or (412)
317-6671 (international) and providing the PIN code: 13721228.
About IEA
Infrastructure and Energy Alternatives, Inc.
(IEA) is a leading infrastructure construction company with
renewable energy and specialty civil expertise. Headquartered in
Indianapolis, Indiana, with operations throughout the country,
IEA’s service offering spans the entire construction process. The
Company offers a full spectrum of delivery models including full
engineering, procurement, and construction, turnkey, design-build,
balance of plant, and subcontracting services. IEA is one of the
larger providers in the renewable energy industry and has completed
more than 240 utility scale wind and solar projects across North
America. In the heavy civil space, IEA offers a number of specialty
services including environmental remediation, industrial
maintenance, specialty transportation infrastructure and other site
development for public and private projects. For more information,
please visit IEA’s website at www.iea.net or follow IEA on
Facebook, LinkedIn and Twitter for the latest company news and
events.
Forward Looking Statements
This release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The
forward-looking statements can be identified by the use of
forward-looking terminology including “may,” “should,” “likely,”
“will,” “believe,” “expect,” “anticipate,” “estimate,” “forecast,”
“seek,” “target,” “continue,” “plan,” “intend,” “project,” or other
similar words. All statements, other than statements of historical
fact, included in this press release regarding expectations for the
impact of COVID-19, future financial performance, business
strategies, expectations for our business, future operations,
liquidity positions, availability of capital resources, financial
position, estimated revenues and losses, projected costs,
prospects, plans, objectives and beliefs of management are
forward-looking statements. These forward-looking statements are
based on information available as of the date of this release and
our management’s current expectations, forecasts and assumptions,
and involve a number of judgments, risks and uncertainties.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot give any
assurance that such expectations will prove correct.
Forward-looking statements should not be relied upon as
representing our views as of any subsequent date. As a result of a
number of known and unknown risks and uncertainties, our actual
results or performance may be materially different from those
expressed or implied by these forward-looking statements. Some
factors that could cause actual results to differ include:
- potential risks and uncertainties relating to COVID-19,
including the geographic spread, the severity of the disease, the
scope and duration of the COVID-19 pandemic, actions that may be
taken by governmental authorities to contain the COVID-19 pandemic
or to treat its impact, and the potential negative impacts of
COVID-19 on permitting and project construction cycles, the U.S.
economy and financial markets;
- availability of commercially reasonable and accessible sources
of liquidity and bonding;
- our ability to generate cash flow and liquidity to fund
operations;
- the timing and extent of fluctuations in geographic, weather
and operational factors affecting our customers, projects and the
industries in which we operate;
- our ability to identify acquisition candidates and integrate
acquired businesses;
- our ability to grow and manage growth profitably;
- the possibility that we may be adversely affected by economic,
business, and/or competitive factors;
- market conditions, technological developments, regulatory
changes or other governmental policy uncertainty that affects us or
our customers;
- our ability to manage projects effectively and in accordance
with management estimates, as well as the ability to accurately
estimate the costs associated with our fixed price and other
contracts, including any material changes in estimates for
completion of projects;
- the effect on demand for our services and changes in the amount
of capital expenditures by customers due to, among other things,
economic conditions, commodity price fluctuations, the availability
and cost of financing, and customer consolidation;
- the ability of customers to terminate or reduce the amount of
work, or in some cases, the prices paid for services, on short or
no notice;
- customer disputes related to the performance of services;
- disputes with, or failures of, subcontractors to deliver
agreed-upon supplies or services in a timely fashion;
- our ability to replace non-recurring projects with new
projects;
- the impact of U.S. federal, local, state, foreign or tax
legislation and other regulations affecting the renewable energy
industry and related projects and expenditures;
- the effect of state and federal regulatory initiatives,
including costs of compliance with existing and future safety and
environmental requirements;
- fluctuations in equipment, fuel, materials, labor and other
costs;
- our beliefs regarding the state of the renewable energy market
generally; and
- the “Risk Factors” described in our Annual Report on Form 10-K
filed with the SEC on March 8, 2021, and in our quarterly reports,
other public filings and press releases.
We do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws.
Contacts:
Peter J. Moerbeek |
Kimberly Esterkin |
Chief Financial Officer |
ADDO Investor Relations |
Pete.Moerbeek@iea.net |
iea@addo.com |
800-688-3775 |
310-829-5400 |
INFRASTRUCTURE AND ENERGY ALTERNATIVES,
INC.Consolidated Statements of
Operations($ in thousands, except per share
data)(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
$ |
560,148 |
|
|
|
$ |
480,604 |
|
|
|
$ |
836,560 |
|
|
|
$ |
838,767 |
|
|
Cost of revenue |
506,665 |
|
|
|
426,363 |
|
|
|
766,536 |
|
|
|
751,485 |
|
|
Gross profit |
53,483 |
|
|
|
54,241 |
|
|
|
70,024 |
|
|
|
87,282 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
30,894 |
|
|
|
28,074 |
|
|
|
55,740 |
|
|
|
57,558 |
|
|
Income from operations |
22,589 |
|
|
|
26,167 |
|
|
|
14,284 |
|
|
|
29,724 |
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net: |
|
|
|
|
|
|
|
Interest expense, net |
(14,495 |
) |
|
|
(16,200 |
) |
|
|
(28,854 |
) |
|
|
(32,265 |
) |
|
Other income (expense) |
770 |
|
|
|
(1,631 |
) |
|
|
608 |
|
|
|
(2,733 |
) |
|
Income (loss) before benefit
for income taxes |
8,864 |
|
|
|
8,336 |
|
|
|
(13,962 |
) |
|
|
(5,274 |
) |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
(4,165 |
) |
|
|
(4,739 |
) |
|
|
(1,773 |
) |
|
|
(3,872 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
4,699 |
|
|
|
$ |
3,597 |
|
|
|
$ |
(15,735 |
) |
|
|
$ |
(9,146 |
) |
|
Less: Convertible Preferred
Stock dividends |
(676 |
) |
|
|
(606 |
) |
|
|
(1,332 |
) |
|
|
(1,372 |
) |
|
Less: Net income allocated to
participating securities |
(788 |
) |
|
|
(802 |
) |
|
|
— |
|
|
|
— |
|
|
Net income (loss) available
for common stockholders |
$ |
3,235 |
|
|
|
$ |
2,189 |
|
|
|
$ |
(17,067 |
) |
|
|
$ |
(10,518 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share - basic |
0.13 |
|
|
|
0.11 |
|
|
|
(0.72 |
) |
|
|
(0.51 |
) |
|
Net income (loss) per common
share - diluted |
0.12 |
|
|
|
0.09 |
|
|
|
(0.72 |
) |
|
|
(0.51 |
) |
|
Weighted average shares -
basic |
24,471,286 |
|
|
|
20,751,673 |
|
|
|
23,768,413 |
|
|
|
20,636,944 |
|
|
Weighted average shares -
diluted |
33,439,303 |
|
|
|
39,978,382 |
|
|
|
23,768,413 |
|
|
|
20,636,944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INFRASTRUCTURE AND ENERGY ALTERNATIVES,
INC.Consolidated Balance Sheets($
in thousands, except per share
data)(Unaudited)
|
June 30, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
117,674 |
|
|
|
$ |
164,041 |
|
|
Accounts receivable, net |
232,323 |
|
|
|
163,793 |
|
|
Contract assets |
176,958 |
|
|
|
145,183 |
|
|
Prepaid expenses and other
current assets |
33,007 |
|
|
|
19,352 |
|
|
Total current assets |
559,962 |
|
|
|
492,369 |
|
|
|
|
|
|
Property, plant and equipment,
net |
135,514 |
|
|
|
130,746 |
|
|
Operating lease assets |
37,701 |
|
|
|
36,461 |
|
|
Intangible assets, net |
22,202 |
|
|
|
25,434 |
|
|
Goodwill |
37,373 |
|
|
|
37,373 |
|
|
Company-owned life
insurance |
4,760 |
|
|
|
4,250 |
|
|
Deferred income taxes |
295 |
|
|
|
2,069 |
|
|
Other assets |
533 |
|
|
|
438 |
|
|
Total assets |
$ |
798,340 |
|
|
|
$ |
729,140 |
|
|
|
|
|
|
Liabilities and
Stockholder's Equity (Deficit) |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
149,352 |
|
|
|
$ |
104,960 |
|
|
Accrued liabilities |
201,828 |
|
|
|
129,594 |
|
|
Contract liabilities |
90,566 |
|
|
|
118,235 |
|
|
Current portion of finance
lease obligations |
24,842 |
|
|
|
25,423 |
|
|
Current portion of operating
lease obligations |
9,817 |
|
|
|
8,835 |
|
|
Current portion of long-term
debt |
2,277 |
|
|
|
2,506 |
|
|
Total current liabilities |
478,682 |
|
|
|
389,553 |
|
|
|
|
|
|
Finance lease obligations,
less current portion |
27,370 |
|
|
|
32,146 |
|
|
Operating lease obligations,
less current portion |
29,355 |
|
|
|
29,154 |
|
|
Long-term debt, less current
portion |
161,266 |
|
|
|
159,225 |
|
|
Debt - Series B Preferred
Stock |
176,556 |
|
|
|
173,868 |
|
|
Warrant obligations |
8,834 |
|
|
|
9,200 |
|
|
Deferred compensation |
7,930 |
|
|
|
8,672 |
|
|
Total liabilities |
$ |
889,993 |
|
|
|
$ |
801,818 |
|
|
|
|
|
|
Commitments and
contingencies: |
|
|
|
|
|
|
|
Series A Preferred Stock, par
value, $0.0001 per share; 1,000,000 shares authorized; 17,483
shares and 17,483 shares issued and outstanding at June 30,
2021 and December 31, 2020, respectively |
17,483 |
|
|
|
17,483 |
|
|
|
|
|
|
Stockholders' equity
(deficit): |
|
|
|
Common stock, par value,
$0.0001 per share; 150,000,000 and 150,000,000 shares authorized;
25,150,306 and 21,008,745 shares issued and 25,150,306 and
21,008,745 outstanding at June 30, 2021 and December 31, 2020,
respectively |
3 |
|
|
|
2 |
|
|
Additional paid in
capital |
32,064 |
|
|
|
35,305 |
|
|
Accumulated deficit |
(141,203 |
) |
|
|
(125,468 |
) |
|
Total stockholders' deficit |
(109,136 |
) |
|
|
(90,161 |
) |
|
Total liabilities and stockholders' deficit |
$ |
798,340 |
|
|
|
$ |
729,140 |
|
|
|
|
|
|
|
|
|
|
|
|
INFRASTRUCTURE AND ENERGY ALTERNATIVES,
INC.Condensed Consolidated Statements of Cash
Flows($ in
thousands)(Unaudited)
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
Cash flows from
operating activities: |
|
|
|
Net loss |
$ |
(15,735 |
) |
|
|
$ |
(9,146 |
) |
|
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
Depreciation and amortization |
21,830 |
|
|
|
24,001 |
|
|
Warrant liability fair value adjustment |
(366 |
) |
|
|
2,828 |
|
|
Amortization of debt discounts and issuance costs |
5,814 |
|
|
|
5,379 |
|
|
Share-based compensation expense |
2,653 |
|
|
|
1,957 |
|
|
Loss on sale of equipment |
— |
|
|
|
574 |
|
|
Deferred compensation |
(742 |
) |
|
|
(830 |
) |
|
Accrued dividends on Series B Preferred Stock |
— |
|
|
|
7,959 |
|
|
Deferred income taxes |
1,773 |
|
|
|
3,659 |
|
|
Other, net |
(172 |
) |
|
|
227 |
|
|
Change in operating assets and liabilities: |
|
|
|
Accounts receivable |
(68,531 |
) |
|
|
(8,349 |
) |
|
Contract assets |
(31,775 |
) |
|
|
(41,565 |
) |
|
Prepaid expenses and other assets |
(13,752 |
) |
|
|
(16,685 |
) |
|
Accounts payable and accrued liabilities |
115,294 |
|
|
|
(42,097 |
) |
|
Contract liabilities |
(27,669 |
) |
|
|
7,458 |
|
|
Net cash used in operating activities |
(11,378 |
) |
|
|
(64,630 |
) |
|
|
|
|
|
Cash flow from
investing activities: |
|
|
|
Company-owned life insurance |
(510 |
) |
|
|
812 |
|
|
Purchases of property, plant and equipment |
(14,649 |
) |
|
|
(5,171 |
) |
|
Proceeds from sale of property, plant and equipment |
1,527 |
|
|
|
2,837 |
|
|
Net cash used in investing activities |
(13,632 |
) |
|
|
(1,522 |
) |
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from long-term debt |
— |
|
|
|
72,000 |
|
|
Payments on long-term debt |
(1,314 |
) |
|
|
(82,357 |
) |
|
Payments on finance lease obligations |
(15,481 |
) |
|
|
(12,468 |
) |
|
Proceeds from issuance of Series B Preferred Stock |
— |
|
|
|
350 |
|
|
Proceeds of issuance of employee stock awards |
— |
|
|
|
760 |
|
|
Shares repurchased for tax withholding on release of restricted
stock units |
(4,762 |
) |
|
|
— |
|
|
Proceeds from exercise of warrants |
200 |
|
|
|
— |
|
|
Net cash used in financing activities |
(21,357 |
) |
|
|
(21,715 |
) |
|
|
|
|
|
Net change in cash and cash
equivalents |
(46,367 |
) |
|
|
(87,867 |
) |
|
|
|
|
|
Cash and cash equivalents,
beginning of the period |
164,041 |
|
|
|
147,259 |
|
|
|
|
|
|
Cash and cash equivalents, end
of the period |
$ |
117,674 |
|
|
|
$ |
59,392 |
|
|
|
|
|
|
Non-U.S. GAAP Financial Measures
We define EBITDA as net income (loss),
determined in accordance with GAAP, for the period presented,
before depreciation and amortization, interest expense and
provision (benefit) for income taxes. We define Adjusted EBITDA as
EBITDA plus restructuring expenses, acquisition or disposition
related expenses, non-cash stock compensation expense, and certain
other non-cash charges, unusual, non-operating or non-recurring
items and other items that we believe are not representative of our
core business or future operating performance.
Adjusted EBITDA is a supplemental non-GAAP
financial measure and, when considered along with other performance
measures, is a useful measure as it reflects certain drivers of the
business, such as revenue growth and operating costs. We believe
Adjusted EBITDA can be useful in providing an understanding of the
underlying operating results and trends and an enhanced overall
understanding of our financial performance and prospects for the
future. While Adjusted EBITDA is not a recognized measure under
GAAP, management uses this financial measure to evaluate and
forecast business performance. Adjusted EBITDA is not intended to
be a measure of liquidity or cash flows from operations or a
measure comparable to net income as it does not consider certain
requirements, such as capital expenditures and depreciation,
principal and interest payments, and tax payments. Adjusted EBITDA
is not a presentation made in accordance with GAAP, and our use of
the term Adjusted EBITDA may vary from the use of similarly-titled
measures by others in our industry due to the potential
inconsistencies in the method of calculation and differences due to
items subject to interpretation.
The presentation of non-GAAP financial
information should not be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP.
The following table outlines the reconciliation
from net income (loss) to Adjusted EBITDA for the periods
indicated:
|
Three Months Ended |
|
Six Months Ended |
(in thousands) |
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss) |
$ |
4,699 |
|
|
|
$ |
3,597 |
|
|
$ |
(15,735 |
) |
|
|
$ |
(9,146 |
) |
|
Interest expense, net |
14,495 |
|
|
|
16,200 |
|
|
28,854 |
|
|
|
32,265 |
|
|
Provision for income taxes |
4,165 |
|
|
|
4,739 |
|
|
1,773 |
|
|
|
3,872 |
|
|
Depreciation and
amortization |
11,031 |
|
|
|
12,113 |
|
|
21,830 |
|
|
|
24,001 |
|
|
EBITDA |
34,390 |
|
|
|
36,649 |
|
|
36,722 |
|
|
|
50,992 |
|
|
|
|
|
|
|
|
|
|
Non-cash stock compensation
expense |
1,926 |
|
|
|
844 |
|
|
2,653 |
|
|
|
1,957 |
|
|
Warrant liability fair value
adjustment (1) |
(666 |
) |
|
|
1,771 |
|
|
(366 |
) |
|
|
2,828 |
|
|
Adjusted EBITDA |
$ |
35,650 |
|
|
|
$ |
39,264 |
|
|
$ |
39,009 |
|
|
|
$ |
55,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects an adjustment to the fair value of the Company’s
Series B Preferred Stock and Private warrant liabilities. The
warrant liability fair value adjustment is a mark-to-market
adjustment based on fluctuation in the Company's stock price or
warrant stock price.
The following table outlines the reconciliation
from 2021 projected net income to 2021 projected Adjusted EBITDA
using estimated amounts:
|
|
Guidance |
|
|
For the year ended December 31, 2021 |
(in
thousands) |
|
Low Estimate |
|
High Estimate |
|
|
|
|
|
Net income (loss) |
|
$ |
4,000 |
|
|
$ |
11,500 |
|
|
|
|
|
|
Interest expense, net |
|
61,000 |
|
|
61,000 |
|
Depreciation and
amortization |
|
50,000 |
|
|
50,000 |
|
Expense for income taxes |
|
10,000 |
|
|
11,000 |
|
EBITDA |
|
125,000 |
|
|
133,500 |
|
|
|
|
|
|
Non-cash stock compensation
expense |
|
4,000 |
|
|
4,500 |
|
Warrant liability fair value
adjustment |
|
1,000 |
|
|
2,000 |
|
Adjusted EBITDA |
|
$ |
130,000 |
|
|
$ |
140,000 |
|
|
|
|
|
|
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