Exterran Corporation (NYSE: EXTN) (“Exterran” or the “Company”)
today reported first quarter financial results.
Andrew Way, Exterran’s President and Chief Executive Officer
commented, “We had a strong commercial start to the year with over
$450 million of product sales bookings along with over $200 million
of Contract Operations bookings, and a new sizeable contract within
Aftermarket Services. Along with these commercial successes, our
crisis management group’s early planning allowed all of our
critical operations to remain open and operational throughout the
quarter. This has allowed us to aggressively address the challenges
our industry is facing with the COVID-19 pandemic and with the
impacts associated with oil price declines. We continue to monitor
the impact of COVID-19 on our operations with a focus on the health
and well-being of our employees and the communities where we work
and serve.”
“During these times we have planned for a range of scenarios for
our business, as we cannot predict the depth and duration of the
COVID-19 pandemic and the ancillary fallout in oil prices. We are
seeing logistical and supply chain challenges throughout our
organization due to travel restrictions and border closures. We are
taking actions to reduce costs to ensure the long-term strength of
the organization. This includes, adjusting our cost structure where
necessary, including reducing CEO salary and Board
compensation, eliminating discretionary spending, and scrutinizing
our maintenance and other capital expenditures. That said, backed
by our strong contracted backlog, over $430 million in liquidity,
low leverage, and no near-term maturities, we believe we are well
positioned to succeed through this downturn and as the industry
recovers.”
Net loss from continuing operations was $18.2 million, or $0.56
per share, on revenue of $210.4 million for the first quarter of
2020. This compares to net loss from continuing operations of $80.2
million, or $2.45 per share, on revenue of $272.7 million for the
fourth quarter of 2019 and net loss from continuing operations of
$5.6 million, or $0.16 per share, on revenue of $351.4 million for
the first quarter of 2019. Net loss was $18.3 million for the first
quarter of 2020, as compared to net loss of $79.8 million for the
fourth quarter of 2019 and net loss of $5.4 million for the first
quarter of 2019. EBITDA, as adjusted, was $33.8 million for the
first quarter of 2020, as compared to $47.3 million for the fourth
quarter of 2019 and $50.2 million for the first quarter of 2019.
Loss before taxes was $8.8 million as compared to loss before taxes
of $75.2 million for the fourth quarter of 2019 and income before
taxes of $3.6 million for the first quarter of 2019.
Selling, general and administrative expenses were $38.1 million
in the first quarter of 2020, as compared with $37.5 million in the
fourth quarter of 2019 and $43.5 million in the first quarter of
2019. The year over year reduction was driven primarily by
aggressive cost reductions and improved efficiencies it has
executed. The company also recorded additional restructuring
charges of $1.2 million.
Contract Operations SegmentContract operations
revenue in the first quarter of 2020 was $94.8 million, a 2%
decrease from fourth quarter of 2019 revenue of $96.5 million and
an 11% increase from first quarter of 2019 revenue of $85.7
million.
Contract operations gross margin in the first quarter of 2020
was $63.3 million, a 3% increase from the fourth quarter of 2019
gross margin of $61.6 million and an 11% increase from the first
quarter of 2019 gross margin of $57.1 million. Gross margin
percentage in the first quarter of 2020 was 67%, as compared with
64% in the fourth quarter of 2019 and 67% in the first quarter of
2019.
Aftermarket Services SegmentAftermarket
services revenue in the first quarter of 2020 was $27.9 million, a
24% decrease from fourth quarter of 2019 revenue of $36.9 million
and a 2% increase from first quarter of 2019 revenue of $27.3
million.
Aftermarket services gross margin in the first quarter of 2020
was $6.7 million, a 26% decrease from the fourth quarter of 2019
gross margin of $9.1 million and a 2% increase from the first
quarter of 2019 gross margin of $6.6 million. Gross margin
percentage in the first quarter of 2020 was 24%, as compared with
25% in the fourth quarter of 2019 and 24% in the first quarter of
2019.
Revenue decline was driven by the typical seasonality that we
see during the first quarter along with some logistical challenges
that arose late in the quarter due to COVID-19 travel and supply
chain restrictions.
Product Sales SegmentProduct sales revenue in
the first quarter of 2020 was $87.7 million, a 37% decrease from
fourth quarter of 2019 revenue of $139.3 million, and a 63%
decrease from first quarter of 2019 revenue of $238.4 million.
Product sales gross margin in the first quarter of 2020 was $3.2
million, a 73% decrease from fourth quarter of 2019 gross margin of
$12.0 million and an 89% decrease as compared to the first quarter
of 2019 gross margin of $28.9 million. Gross margin percentage in
the first quarter of 2020 was 4%, as compared with 9% in the fourth
quarter of 2019 and 12% in the first quarter of 2019.
Revenue declined sequentially driven by the low backlog we had
entering the quarter. Margin declined sequentially driven by
negative mix and expected under absorption costs.
Product sales backlog was $648.3 million at March 31, 2020,
as compared to $278.0 million at December 31, 2019 and $553.5
million at March 31, 2019. Product sales bookings for the
first quarter of 2020 were $458.0 million, resulting in a
book-to-bill ratio of 522%. This compares to bookings of $108.8
million for the fourth quarter of 2019 and bookings of $86.2
million for the first quarter of 2019.
Conference Call InformationThe Company will
host a conference call at 10:00 a.m. Central Time on Monday,
May 11, 2020. The call can be accessed from the Company’s
website at www.exterran.com or by telephone at
877-524-8416. For those who cannot listen to the live call, a
telephonic replay will be available through May 18, 2020 and may be
accessed by calling 877-660-6853 and using the pass code 13701979.
A presentation will also be posted on the Company’s website prior
to the conference call.
About Exterran CorporationExterran
Corporation (NYSE: EXTN) is a global systems and process
company offering solutions in the oil, gas, water and power
markets. We are a leader in natural gas processing and treatment
and compression products and services, providing critical midstream
infrastructure solutions to customers throughout the
world. Exterran Corporation is headquartered
in Houston, Texas and operates in approximately 25
countries.
For more information, contact:Blake Hancock,
Vice President of Investor Relations, at 281-854-3043Or visit
www.exterran.com
Non-GAAP and Other Financial InformationGross
margin is defined as revenue less cost of sales (excluding
depreciation and amortization expense). Gross margin percentage is
defined as gross margin divided by revenue. The Company evaluates
the performance of its segments based on gross margin for each
segment.
EBITDA, as adjusted, a non-GAAP measure, is defined as net
income (loss) excluding income (loss) from discontinued operations
(net of tax), cumulative effect of accounting changes (net of tax),
income taxes, interest expense (including debt extinguishment
costs), depreciation and amortization expense, impairment charges,
restructuring and other charges, non-cash gains or losses from
foreign currency exchange rate changes recorded on intercompany
obligations, expensed acquisition costs and other items. EBITDA, as
adjusted, excludes the benefit of the two previously announced
sales of our Venezuelan assets.
Adjusted net income (loss) from continuing operations and
diluted adjusted net income (loss) from continuing operations per
common share, non-GAAP measures, are defined as net income (loss)
and earnings per share, excluding the impact of income (loss) from
discontinued operations (net of tax), cumulative effect of
accounting changes (net of tax), impairment charges (net of tax),
restructuring and other charges (net of tax), the benefit of the
previously announced sale of our joint ventures’ Venezuelan assets,
the effect of income tax adjustments that are outside of the
Company’s anticipated effective tax rates and other items.
See tables below for additional information concerning non-GAAP
financial information, including a reconciliation of the non-GAAP
financial information presented in this press release to the most
directly comparable financial information presented in accordance
with GAAP. Non-GAAP financial information supplements should be
read together with, and are not an alternative or substitute for,
the Company’s financial results reported in accordance with GAAP.
Because non-GAAP financial information is not standardized, it may
not be possible to compare these financial measures with other
companies’ non-GAAP financial measures having the same or similar
names.
Forward-Looking StatementsAll statements in
this release (and oral statements made regarding the subjects of
this release) other than historical facts are forward-looking
statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These statements may include
words such as “guidance,” “anticipate,” “estimate,” “expect,”
“forecast,” “project,” “plan,” “intend,” “believe,” “confident,”
“may,” “should,” “can have,” “likely,” “future” and other words and
terms of similar meaning in connection with any discussion of the
timing or nature of future operating or financial performance or
other events. Examples of forward-looking information in this
release include, but are not limited to: Exterran’s financial and
operational strategies and ability to successfully effect those
strategies; Exterran’s expectations regarding future economic and
market conditions; the expected impact of COVID-19 and oil price
declines on Exterran’s business; Exterran’s financial and
operational outlook and ability to fulfill that outlook; demand for
Exterran’s products and services and growth opportunities for those
products and services; and statements regarding industry activity
levels and infrastructure build-out opportunities.
These forward-looking statements rely on a number of assumptions
concerning future events and are subject to a number of
uncertainties and factors, many of which are outside Exterran’s
control, which could cause actual results to differ materially from
such statements. As a result, any such forward-looking statements
are not guarantees of future performance or results. While Exterran
believes that the assumptions concerning future events are
reasonable, it cautions that there are inherent difficulties in
predicting certain important factors that could impact the future
performance or results of its business. Among the factors that
could cause results to differ materially from those indicated by
such forward-looking statements are: conditions in the oil and
natural gas industry, including a sustained imbalance in the level
of supply or demand for oil or natural gas or a sustained low price
of oil or natural gas, which could depress or reduce the demand or
pricing for Exterran’s natural gas compression and oil and natural
gas production and processing equipment and services; reduced
profit margins or the loss of market share resulting from
competition or the introduction of competing technologies by other
companies; economic or political conditions in the countries in
which Exterran does business, including civil developments such as
uprisings, riots, terrorism, kidnappings, violence associated with
drug cartels, legislative changes and the expropriation,
confiscation or nationalization of property without fair
compensation; risks associated with natural disasters, pandemics
and other public health crisis, and other catastrophic events
outside of Exterran’s control, including the continued spread and
impact of, and the response to, the COVID-19 pandemic; changes in
currency exchange rates, including the risk of currency
devaluations by foreign governments, and restrictions on currency
repatriation; risks associated with cyber-based attacks or network
security breaches; changes in international trade relationships,
including the imposition of trade restrictions or tariffs relating
to any materials or products (such as aluminum and steel) used in
the operation of Exterran’s business; risks associated with
Exterran’s operations, such as equipment defects, equipment
malfunctions, environmental discharges and natural disasters; the
risk that counterparties will not perform their obligations under
their contracts with Exterran or other changes that could impact
Exterran’s ability to recover its fixed asset investment; the
financial condition of Exterran’s customers; Exterran’s ability to
timely and cost-effectively obtain components necessary to conduct
its business; employment and workforce factors, including
Exterran’s ability to hire, train and retain key employees;
Exterran’s ability to implement its business and financial
objectives, including: (i) winning profitable new business, (ii)
timely and cost-effective execution of projects, (iii) enhancing or
maintaining Exterran’s asset utilization, particularly with respect
to its fleet of compressors and other assets, (iv) integrating
acquired businesses, (v) generating sufficient cash to satisfy
Exterran’s operating needs, existing capital commitments and other
contractual cash obligations, including Exterran’s debt
obligations, and (vi) accessing the financial markets at an
acceptable cost; Exterran’s ability to accurately estimate its
costs and time required under its fixed price contracts; liability
related to the use of Exterran’s products and services; changes in
governmental safety, health, environmental or other regulations,
which could require Exterran to make significant expenditures; and
Exterran’s level of indebtedness and ability to fund its
business.
These forward-looking statements are also affected by the risk
factors, forward-looking statements and challenges and
uncertainties described in Exterran’s Annual Report on Form 10-K
for the year ended December 31, 2019, and other filings with the
Securities and Exchange Commission available on the Securities and
Exchange Commission’s website www.sec.gov. A discussion of these
risks is expressly incorporated by reference into this release.
Except as required by law, Exterran 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.
EXTERRAN CORPORATION |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
Revenues: |
|
|
|
|
|
|
Contract operations |
|
$ |
94,788 |
|
|
$ |
96,481 |
|
|
$ |
85,700 |
|
Aftermarket services |
|
27,909 |
|
|
36,909 |
|
|
27,302 |
|
Product sales |
|
87,660 |
|
|
139,299 |
|
|
238,444 |
|
|
|
210,357 |
|
|
272,689 |
|
|
351,446 |
|
Costs and expenses: |
|
|
|
|
|
|
Cost of sales (excluding depreciation and amortization
expense): |
|
|
|
|
|
|
Contract operations |
|
31,460 |
|
|
34,880 |
|
|
28,591 |
|
Aftermarket services |
|
21,181 |
|
|
27,793 |
|
|
20,718 |
|
Product sales |
|
84,439 |
|
|
127,296 |
|
|
209,535 |
|
Selling, general and administrative |
|
38,052 |
|
|
37,524 |
|
|
43,452 |
|
Depreciation and amortization |
|
32,610 |
|
|
45,888 |
|
|
38,217 |
|
Impairments |
|
— |
|
|
65,484 |
|
|
— |
|
Restatement related charges |
|
— |
|
|
28 |
|
|
48 |
|
Restructuring and other charges |
|
1,188 |
|
|
746 |
|
|
384 |
|
Interest expense |
|
9,953 |
|
|
10,426 |
|
|
8,163 |
|
Other (income) expense, net |
|
294 |
|
|
(2,208 |
) |
|
(1,245 |
) |
|
|
219,177 |
|
|
347,857 |
|
|
347,863 |
|
Income (loss) before income
taxes |
|
(8,820 |
) |
|
(75,168 |
) |
|
3,583 |
|
Provision for income
taxes |
|
9,330 |
|
|
5,081 |
|
|
9,140 |
|
Loss from continuing
operations |
|
(18,150 |
) |
|
(80,249 |
) |
|
(5,557 |
) |
Income (loss) from
discontinued operations, net of tax |
|
(154 |
) |
|
412 |
|
|
163 |
|
Net loss |
|
$ |
(18,304 |
) |
|
$ |
(79,837 |
) |
|
$ |
(5,394 |
) |
|
|
|
|
|
|
|
Basic net loss per common
share: |
|
|
|
|
|
|
Loss from continuing operations per common share |
|
$ |
(0.56 |
) |
|
$ |
(2.45 |
) |
|
$ |
(0.16 |
) |
Income from discontinued operations per common share |
|
— |
|
|
0.01 |
|
|
0.01 |
|
Net loss per common share |
|
$ |
(0.56 |
) |
|
$ |
(2.44 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
Diluted net loss per common
share: |
|
|
|
|
|
|
Loss from continuing operations per common share |
|
$ |
(0.56 |
) |
|
$ |
(2.45 |
) |
|
$ |
(0.16 |
) |
Income from discontinued operations per common share |
|
— |
|
|
0.01 |
|
|
0.01 |
|
Net loss per common share |
|
$ |
(0.56 |
) |
|
$ |
(2.44 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
Weighted average common shares
outstanding used in net loss per common share: |
|
|
|
|
|
|
Basic |
|
32,653 |
|
|
32,714 |
|
|
35,646 |
|
Diluted |
|
32,653 |
|
|
32,714 |
|
|
35,646 |
|
|
|
|
|
|
|
|
|
|
|
EXTERRAN CORPORATION |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
18,138 |
|
|
$ |
16,683 |
|
Restricted cash |
14 |
|
|
19 |
|
Accounts receivable, net |
196,298 |
|
|
202,337 |
|
Inventory, net |
137,881 |
|
|
143,538 |
|
Contract assets |
41,554 |
|
|
46,537 |
|
Other current assets |
24,982 |
|
|
22,477 |
|
Current assets associated with discontinued operations |
4,388 |
|
|
4,332 |
|
Total current assets |
423,255 |
|
|
435,923 |
|
Property, plant and equipment,
net |
815,064 |
|
|
844,410 |
|
Operating lease right of use
assets |
27,343 |
|
|
26,783 |
|
Deferred income taxes |
10,102 |
|
|
13,994 |
|
Intangible and other assets,
net |
82,424 |
|
|
93,300 |
|
Long-term assets held for
sale |
624 |
|
|
624 |
|
Long-term assets associated
with discontinued operations |
2,786 |
|
|
2,970 |
|
Total assets |
$ |
1,361,598 |
|
|
$ |
1,418,004 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable, trade |
$ |
84,970 |
|
|
$ |
123,444 |
|
Accrued liabilities |
95,229 |
|
|
104,081 |
|
Contract liabilities |
106,399 |
|
|
82,854 |
|
Current operating lease liabilities |
7,079 |
|
|
6,268 |
|
Current liabilities associated with discontinued operations |
8,562 |
|
|
9,998 |
|
Total current liabilities |
302,239 |
|
|
326,645 |
|
Long-term debt |
455,341 |
|
|
443,587 |
|
Deferred income taxes |
742 |
|
|
993 |
|
Long-term contract
liabilities |
145,211 |
|
|
156,262 |
|
Long-term operating lease
liabilities |
31,515 |
|
|
30,958 |
|
Other long-term
liabilities |
45,877 |
|
|
49,263 |
|
Long-term liabilities
associated with discontinued operations |
1,045 |
|
|
758 |
|
Total liabilities |
981,970 |
|
|
1,008,466 |
|
Total stockholders’ equity |
379,628 |
|
|
409,538 |
|
Total liabilities and stockholders’ equity |
$ |
1,361,598 |
|
|
$ |
1,418,004 |
|
|
|
|
|
|
|
|
|
EXTERRAN CORPORATION |
UNAUDITED SUPPLEMENTAL INFORMATION |
(In thousands, except percentages) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
Revenues: |
|
|
|
|
|
|
Contract operations |
|
$ |
94,788 |
|
|
$ |
96,481 |
|
|
$ |
85,700 |
|
Aftermarket services |
|
27,909 |
|
|
36,909 |
|
|
27,302 |
|
Product sales |
|
87,660 |
|
|
139,299 |
|
|
238,444 |
|
|
|
$ |
210,357 |
|
|
$ |
272,689 |
|
|
$ |
351,446 |
|
|
|
|
|
|
|
|
Gross margin: |
|
|
|
|
|
|
Contract operations |
|
$ |
63,328 |
|
|
$ |
61,601 |
|
|
$ |
57,109 |
|
Aftermarket services |
|
6,728 |
|
|
9,116 |
|
|
6,584 |
|
Product sales |
|
3,221 |
|
|
12,003 |
|
|
28,909 |
|
Total |
|
$ |
73,277 |
|
|
$ |
82,720 |
|
|
$ |
92,602 |
|
|
|
|
|
|
|
|
Gross margin percentage: |
|
|
|
|
|
|
Contract operations |
|
67 |
% |
|
64 |
% |
|
67 |
% |
Aftermarket services |
|
24 |
% |
|
25 |
% |
|
24 |
% |
Product sales |
|
4 |
% |
|
9 |
% |
|
12 |
% |
Total |
|
35 |
% |
|
30 |
% |
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
$ |
38,052 |
|
|
$ |
37,524 |
|
|
$ |
43,452 |
|
% of revenue |
|
18 |
% |
|
14 |
% |
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted |
|
$ |
33,810 |
|
|
$ |
47,269 |
|
|
$ |
50,157 |
|
% of revenue |
|
16 |
% |
|
17 |
% |
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
$ |
17,025 |
|
|
$ |
21,156 |
|
|
$ |
76,354 |
|
|
|
|
|
|
|
|
Revenue by Geographical
Regions: |
|
|
|
|
|
|
North America |
|
$ |
58,539 |
|
|
$ |
109,281 |
|
|
$ |
181,005 |
|
Latin America |
|
76,797 |
|
|
79,673 |
|
|
78,487 |
|
Middle East and Africa |
|
55,713 |
|
|
70,005 |
|
|
82,791 |
|
Asia Pacific |
|
19,308 |
|
|
13,730 |
|
|
9,163 |
|
Total revenues |
|
$ |
210,357 |
|
|
$ |
272,689 |
|
|
$ |
351,446 |
|
|
|
|
|
|
|
|
|
|
As of |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
Contract Operations
Backlog: |
|
|
|
|
|
|
Contract operations services |
|
$ |
1,352,627 |
|
|
$ |
1,252,001 |
|
|
$ |
1,357,411 |
|
|
|
|
|
|
|
|
Product Sales
Backlog: |
|
|
|
|
|
|
Compression equipment |
|
$ |
142,679 |
|
|
$ |
160,946 |
|
|
$ |
367,226 |
|
Processing and treating equipment |
|
465,535 |
|
|
69,912 |
|
|
161,206 |
|
Production equipment |
|
15 |
|
|
593 |
|
|
— |
|
Other product sales |
|
40,051 |
|
|
46,501 |
|
|
25,059 |
|
Total product sales backlog |
|
$ |
648,280 |
|
|
$ |
277,952 |
|
|
$ |
553,491 |
|
EXTERRAN CORPORATION |
UNAUDITED NON-GAAP FINANCIAL MEASURES |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, 2020 |
|
December 31, 2019 |
|
March 31, 2019 |
Non-GAAP Financial
Information—Reconciliation of Income (loss) before income taxes to
Total gross margin: |
|
|
|
|
|
|
Income (loss) before income taxes |
|
$ |
(8,820 |
) |
|
$ |
(75,168 |
) |
|
$ |
3,583 |
|
Selling, general and administrative |
|
38,052 |
|
|
37,524 |
|
|
43,452 |
|
Depreciation and amortization |
|
32,610 |
|
|
45,888 |
|
|
38,217 |
|
Impairments |
|
— |
|
|
65,484 |
|
|
— |
|
Restatement related charges |
|
— |
|
|
28 |
|
|
48 |
|
Restructuring and other charges |
|
1,188 |
|
|
746 |
|
|
384 |
|
Interest expense |
|
9,953 |
|
|
10,426 |
|
|
8,163 |
|
Other (income) expense, net |
|
294 |
|
|
(2,208 |
) |
|
(1,245 |
) |
Total gross margin (1) |
|
$ |
73,277 |
|
|
$ |
82,720 |
|
|
$ |
92,602 |
|
|
|
|
|
|
|
|
Non-GAAP Financial
Information—Reconciliation of Net loss to EBITDA, as adjusted: |
|
|
|
|
|
|
Net loss |
|
$ |
(18,304 |
) |
|
$ |
(79,837 |
) |
|
$ |
(5,394 |
) |
(Income) loss from discontinued operations,
net of tax |
|
154 |
|
|
(412 |
) |
|
(163 |
) |
Depreciation and amortization |
|
32,610 |
|
|
45,888 |
|
|
38,217 |
|
Impairments |
|
— |
|
|
65,484 |
|
|
— |
|
Restatement related charges |
|
— |
|
|
28 |
|
|
48 |
|
Restructuring and other charges |
|
1,188 |
|
|
746 |
|
|
384 |
|
Interest expense |
|
9,953 |
|
|
10,426 |
|
|
8,163 |
|
Gain on currency exchange rate remeasurement of intercompany
balances |
|
(1,121 |
) |
|
(135 |
) |
|
(238 |
) |
Provision for income taxes |
|
9,330 |
|
|
5,081 |
|
|
9,140 |
|
EBITDA, as adjusted (2) |
|
$ |
33,810 |
|
|
$ |
47,269 |
|
|
$ |
50,157 |
|
|
|
|
|
|
|
|
Non-GAAP Financial
Information—Reconciliation of Net loss to Adjusted net loss from
continuing operations: |
|
|
|
|
|
|
Net loss |
|
$ |
(18,304 |
) |
|
$ |
(79,837 |
) |
|
$ |
(5,394 |
) |
(Income) loss from discontinued operations, net of tax |
|
154 |
|
|
(412 |
) |
|
(163 |
) |
Loss from continuing operations |
|
(18,150 |
) |
|
(80,249 |
) |
|
(5,557 |
) |
Adjustment for items: |
|
|
|
|
|
|
Impairments |
|
— |
|
|
65,484 |
|
|
— |
|
Restatement related charges |
|
— |
|
|
28 |
|
|
48 |
|
Restructuring and other charges |
|
1,188 |
|
|
746 |
|
|
384 |
|
Tax impact of adjustments (3) |
|
— |
|
|
(613 |
) |
|
(73 |
) |
Adjusted net loss from continuing operations (4) |
|
$ |
(16,962 |
) |
|
$ |
(14,604 |
) |
|
$ |
(5,198 |
) |
|
|
|
|
|
|
|
Diluted loss from continuing operations per common share |
|
$ |
(0.56 |
) |
|
$ |
(2.45 |
) |
|
$ |
(0.16 |
) |
Adjustment for items, after-tax, per diluted common share |
|
0.04 |
|
|
2.00 |
|
|
0.01 |
|
Diluted adjusted net loss from continuing operations per common
share (4) (5) |
|
$ |
(0.52 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Management
evaluates the performance of each of the Company’s segments based
on gross margin. Total gross margin, a non-GAAP measure, is
included as a supplemental disclosure because it is a primary
measure used by our management to evaluate the results of revenue
and cost of sales (excluding depreciation and amortization
expense), which are key components of our operations. Management
believes total gross margin is important supplemental information
for investors because it focuses on the current performance of our
operations and excludes the impact of the prior historical costs of
the assets acquired or constructed that are utilized in those
operations, the indirect costs associated with our SG&A
activities, the impact of our financing methods, restatement
related charges (recoveries), restructuring and other charges and
income taxes. In addition, the inclusion of depreciation and
amortization expense may not accurately reflect the costs required
to maintain and replenish the operational usage of our assets and
therefore may not portray the costs from current operating
activity. |
|
(2) Management
believes EBITDA, as adjusted, is an important measure of operating
performance because it allows management, investors and others to
evaluate and compare our core operating results from period to
period by removing the impact of our capital structure (interest
expense from outstanding debt), asset base (depreciation and
amortization), our subsidiaries’ capital structure (non-cash gains
or losses from foreign currency exchange rate changes on
intercompany obligations), tax consequences, impairment charges,
restatement related charges (recoveries), restructuring and other
charges, expensed acquisition costs and other items. Management
uses EBITDA, as adjusted, as supplemental measures to review
current period operating performance, comparability measures and
performance measures for period to period comparisons. In addition,
the Company's compensation committee has used EBITDA, as adjusted,
in evaluating the performance of the Company and management and in
evaluating certain components of executive compensation, including
performance-based annual incentive programs. |
|
|
|
|
|
|
|
(3) The tax impacts
of adjustments were based on the Company’s statutory tax rates
applicable to each item in the appropriate taxing jurisdictions.
Using statutory tax rates for presentation of the non-GAAP measures
allows a consistent basis for investors to understand financial
performance of the Company across historical periods. The overall
effective tax rate on adjustments was impacted by the inability to
recognize tax benefits from charges in jurisdictions that are in
cumulative-loss positions. |
|
|
|
|
|
|
|
(4) Management
believes adjusted net income (loss) from continuing operations and
diluted adjusted net income (loss) from continuing operations per
common share provides useful information to investors because it
allows management, investors and others to evaluate and compare our
core operating results from period to period by removing the impact
of impairment charges, restructuring and other charges, restatement
related charges (recoveries), expensed acquisition costs and other
items not appropriately reflective of our core business. |
|
|
|
|
|
|
|
(5) Diluted adjusted
net income (loss) from continuing operations per common share, was
computed using the two-class method to determine the net income
(loss) per share for each class of common stock and participating
security (certain of our restricted stock and restricted stock
units) according to participation rights in undistributed
earnings. |
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