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8-K - 8-K - INTERLINE BRANDS, INC./DE | a10-4152_18k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
February 19, 2010
Interline Brands, Inc. Announces Fourth Quarter and Fiscal 2009 Sales and Earnings Results
Jacksonville, Fla. February 19, 2010 - Interline Brands, Inc. (NYSE: IBI) (Interline or the Company), a leading distributor and direct marketer of maintenance, repair and operations products, reported sales and earnings for the fourth quarter and fiscal year ended December 25, 2009.
Sales for the fourth quarter of 2009 decreased 8.3% compared to the fourth quarter of 2008. Earnings per diluted share were $0.19 for the fourth quarter of 2009, a decrease of 14% compared to earnings per diluted share of $0.22 for the same period last year. Earnings per diluted share for the fourth quarter of 2009 included a $0.01 per diluted share charge associated with our ongoing efforts to improve our distribution network. Earnings per diluted share for the fourth quarter of 2008 included a $0.05 per diluted share gain on the early extinguishment of debt and a $0.01 per diluted share charge associated with the closing of certain professional contractor showrooms.
Sales for 2009 decreased 11.4% compared to 2008. Earnings per diluted share were $0.79 for 2009, a decrease of 37% compared to earnings per diluted share of $1.25 for 2008.
Michael Grebe, Interlines Chairman and Chief Executive Officer, commented, In 2009, we carefully evaluated our cost structure, our supply chain, and our go-to-market strategies. We took decisive action throughout the year to strengthen the operations of our business to better serve our customers and offer greater earnings leverage to our
shareholders over time. Mr. Grebe continued, We executed these initiatives while delivering record free cash flow and strengthening our balance sheet. For the full year 2009, we generated over $133 million in free cash flow, and paid down $98 million of debt. We are pleased to close out the year in a stronger financial position than when we entered it, and I am very optimistic about the future of our Company.
Fourth Quarter 2009 Performance
Sales for the quarter ended December 25, 2009 were $254.6 million, an 8.3% decrease compared to sales of $277.6 million in the comparable 2008 period. Interlines facilities maintenance end-market, which comprised 71% of sales, declined 3.7% during the fourth quarter on an average daily sales basis. The professional contractor end-market, which comprised 17% of sales, declined 20.2% for the quarter. The specialty distributor end-market, which comprised 12% of sales, declined 15.0% for the quarter.
Institutional sales were essentially flat compared to the fourth quarter of 2008, driven by the strength of our core MRO and janitorial-sanitation products. In addition, multi-family housing sales were down approximately 3% for the quarter when excluding our Renovations Plus business, which focuses on larger discretionary multi-family housing remodeling projects, said Mr. Grebe.
Gross profit decreased $6.0 million, or 5.9%, to $96.8 million for the fourth quarter of 2009, compared to $102.8 million for the fourth quarter of 2008. As a percentage of net sales, gross profit increased 100 basis points to 38.0% compared to 37.0% for the fourth quarter of 2008.
Selling, general and administrative (SG&A) expenses for the fourth quarter of 2009 decreased $5.2 million, or 6.4%, to $77.1 million from $82.4 million for the fourth quarter of 2008. As a percentage of net sales, SG&A expenses were 30.3% compared to 29.7% for the fourth quarter of 2008.
As a result, fourth quarter 2009 operating income of $14.7 million, or 5.8% of sales, decreased 7.8% compared to $15.9 million, or 5.7% of sales, in the fourth quarter of 2008.
Diluted earnings per share for the fourth quarter of 2009 were $0.19, a decrease of 14% compared to diluted earnings per share of $0.22 for the fourth quarter of 2008.
Fiscal Year 2009 Performance
During 2009 we made significant progress towards streamlining our distribution platform and improving our working capital efficiency. In 2010, we will continue to pursue our strategy of larger and more productive distribution centers that will enable us to further improve the customer experience and enhance our ability to scale our business as conditions improve, commented Kenneth D. Sweder, Interlines Chief Operating Officer.
Sales for the year ended December 25, 2009 were $1.06 billion, an 11.4% decrease compared to sales of $1.20 billion for the year ended December 26, 2008. Average organic daily sales decreased 12.5% for the year.
Gross profit decreased $55.7 million, or 12.4%, to $394.0 million for the year ended December 25, 2009, compared to $449.6 million in 2008. As a percentage of net sales, gross profit decreased to 37.2% from 37.6% for the year ended December 26, 2008.
SG&A expenses for the year ended December 25, 2009 were reduced by $27.7 million, or 8.0%, to $316.1 million compared to $343.8 million for the year ended December 26, 2008. As a percentage of net sales, SG&A expenses were 29.8% compared to 28.8% in 2008. SG&A expenses for 2009 include $4.6 million related to the previously announced reduction in force, consolidation of certain distribution centers, and closing of certain underperforming professional contractor showrooms; a $3.0 million charge for bad debt resulting from a customer seeking Chapter 11 bankruptcy protection; and a $0.7 million charge associated with the adoption of a new accounting standard on business combinations. SG&A expenses for 2008 include $3.0 million of costs related to employee separation benefits and the closing of certain professional contractor showrooms.
Operating income was $59.2 million, or 5.6% of sales, for the year ended December 25, 2009 compared to $89.0 million, or 7.4% of sales, for the year ended December 26, 2008, a 33.4% decrease.
Earnings per diluted share were $0.79 for the year ended December 25, 2009, a decrease of 37% compared to earnings per diluted share of $1.25 for the year ended December 26, 2008.
Cash flow from operating activities for the year ended December 25, 2009 was $144.3 million compared to $56.2 million for the year ended December 26, 2008. During the year ended December 25, 2009, the Company repaid $98.0 million of debt.
Business Outlook
Mr. Grebe stated, We believe the worst may now be behind us, but visibility remains low and we anticipate continued variability within our end-markets. Looking ahead to the first quarter of 2010, we expect the demand environment to remain similar to what we experienced over the past few months.
While cash flow generation remains a key focus for us, we do not expect to duplicate the record free cash flow we generated in 2009 as we enter the year leaner and more efficient from a working capital perspective. However, we will continue to carefully manage our working capital, which in combination with our more streamlined distribution network, will yield productivity gains over time. I am proud of the dedication and leadership that my teammates displayed in 2009, and I am encouraged by our execution of key efficiency actions, all aimed at strengthening our position in 2010 and beyond.
Conference Call
Interline will host a conference call on February 19, 2010 at 9:00 a.m. Eastern Standard Time. Interested parties may listen to the call toll free by dialing 1-800-427-0638 or 1-706-634-1170. A digital recording will be available for replay two hours after the completion of the conference call by calling 1-800-642-1687 or 1-706-645-9291 and referencing Conference I.D. Number 55217734. This recording will expire on March 5, 2010.
About Interline
Interline Brands, Inc. is a leading international distributor and direct marketer with headquarters in Jacksonville, Florida. Interline provides maintenance, repair and operations (MRO) products to a diversified customer base made up of facilities maintenance professionals, professional contractors, and specialty distributors primarily throughout North America, Central America and the Caribbean.
Non-GAAP Financial Information
This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (US GAAP). Interlines management uses non-US GAAP measures in its analysis of the Companys performance. Investors are encouraged to review the reconciliation of non-US GAAP financial measures to the comparable US GAAP results available in the accompanying tables.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, forward-looking statements. The Company has tried, whenever possible, to identify these forward-looking statements by using words such as projects, anticipates, believes, estimates, expects, plans, intends, and similar expressions. Similarly, statements herein that describe the Companys business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. The risks and uncertainties involving forward-looking statements include, for example, economic slowdowns,
general market conditions, credit market contractions, consumer spending and debt levels, adverse changes in trends in the home improvement and remodeling and home building markets, the failure to realize expected benefits from acquisitions, material facilities systems disruptions and shutdowns, the failure to locate, acquire and integrate acquisition candidates, commodity price risk, foreign currency exchange risk, interest rate risk, the dependence on key employees and other risks described in the Companys Quarterly Report on Form 10-Q for the period ended September 25, 2009 and in the Companys Annual Report on Form 10-K for the fiscal year ended December 26, 2008. These statements reflect the Companys current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time. The Company does not currently intend, however, to update the information provided today prior to its next earnings release.
CONTACT: John Ebner
PHONE: 904-421-1441
INTERLINE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 25, 2009 AND DECEMBER 26, 2008
(in thousands, except share and per share data)
|
|
December 25, |
|
December 26, |
|
||
|
|
2009 |
|
2008 |
|
||
ASSETS |
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
99,223 |
|
$ |
62,724 |
|
Investments |
|
1,479 |
|
|
|
||
Accounts receivable - trade (net of allowance for doubtful accounts of $12,975 and $12,140) |
|
120,004 |
|
139,522 |
|
||
Inventory |
|
173,422 |
|
211,200 |
|
||
Prepaid expenses and other current assets |
|
18,552 |
|
22,884 |
|
||
Prepaid income taxes |
|
|
|
1,452 |
|
||
Deferred income taxes |
|
16,459 |
|
19,010 |
|
||
Total current assets |
|
429,139 |
|
456,792 |
|
||
|
|
|
|
|
|
||
Property and equipment, net |
|
46,804 |
|
46,033 |
|
||
Goodwill |
|
319,006 |
|
317,117 |
|
||
Other intangible assets, net |
|
124,835 |
|
132,787 |
|
||
Other assets |
|
9,054 |
|
10,119 |
|
||
Total assets |
|
$ |
928,838 |
|
$ |
962,848 |
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
||
Accounts payable |
|
$ |
85,982 |
|
$ |
68,255 |
|
Accrued expenses and other current liabilities |
|
41,715 |
|
31,394 |
|
||
Accrued interest |
|
1,050 |
|
1,072 |
|
||
Income taxes payable |
|
1,285 |
|
|
|
||
Current portion of long-term debt |
|
1,590 |
|
1,625 |
|
||
Capital lease - current |
|
222 |
|
239 |
|
||
Total current liabilities |
|
131,844 |
|
102,585 |
|
||
|
|
|
|
|
|
||
Long-Term Liabilities: |
|
|
|
|
|
||
Deferred income taxes |
|
40,369 |
|
37,210 |
|
||
Long-term debt, net of current portion |
|
304,088 |
|
401,765 |
|
||
Capital lease - long term |
|
4 |
|
226 |
|
||
Other liabilities |
|
798 |
|
989 |
|
||
Total liabilities |
|
477,103 |
|
542,775 |
|
||
Commitments and contingencies |
|
|
|
|
|
||
Senior preferred stock; $0.01 par value, 20,000,000 authorized; none outstanding as of December 25, 2009 and December 26, 2008 |
|
|
|
|
|
||
|
|
|
|
|
|
||
Shareholders Equity: |
|
|
|
|
|
||
Common stock; $0.01 par value, 100,000,000 authorized; 32,640,957 issued and 32,524,251 outstanding as of December 25, 2009 and 32,561,360 issued and 32,449,946 outstanding as of December 26, 2008 |
|
326 |
|
326 |
|
||
Additional paid-in capital |
|
576,747 |
|
571,868 |
|
||
Accumulated deficit |
|
(124,745 |
) |
(150,833 |
) |
||
Accumulated other comprehensive income |
|
1,483 |
|
695 |
|
||
Treasury stock, at cost, 116,706 shares as of December 25, 2009 and 111,414 as of December 26, 2008 |
|
(2,076 |
) |
(1,983 |
) |
||
Total shareholders equity |
|
451,735 |
|
420,073 |
|
||
Total liabilities and shareholders equity |
|
$ |
928,838 |
|
$ |
962,848 |
|
INTERLINE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE AND TWELVE MONTHS ENDED DECEMBER 25, 2009 AND DECEMBER 26, 2008
(in thousands, except share and per share data)
|
|
Three Months Ended |
|
Twelve Months Ended |
|
||||||||
|
|
December 25, |
|
December 26, |
|
December 25, |
|
December 26, |
|
||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
254,617 |
|
$ |
277,584 |
|
$ |
1,059,278 |
|
$ |
1,195,663 |
|
Cost of sales |
|
157,799 |
|
174,744 |
|
665,327 |
|
746,037 |
|
||||
Gross profit |
|
96,818 |
|
102,840 |
|
393,951 |
|
449,626 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating Expenses: |
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
77,128 |
|
82,367 |
|
316,137 |
|
343,793 |
|
||||
Depreciation and amortization |
|
5,019 |
|
4,566 |
|
18,580 |
|
16,866 |
|
||||
Total operating expense |
|
82,147 |
|
86,933 |
|
334,717 |
|
360,659 |
|
||||
Operating income |
|
14,671 |
|
15,907 |
|
59,234 |
|
88,967 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
(Loss) Gain on extinguishment of debt, net |
|
(38 |
) |
2,775 |
|
1,257 |
|
2,775 |
|
||||
Interest expense |
|
(4,371 |
) |
(6,682 |
) |
(19,044 |
) |
(28,482 |
) |
||||
Interest and other income |
|
430 |
|
85 |
|
1,714 |
|
2,198 |
|
||||
Income before income taxes |
|
10,692 |
|
12,085 |
|
43,161 |
|
65,458 |
|
||||
Provision for income taxes |
|
4,379 |
|
4,837 |
|
17,073 |
|
24,625 |
|
||||
Net income |
|
$ |
6,313 |
|
$ |
7,248 |
|
$ |
26,088 |
|
$ |
40,833 |
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
0.19 |
|
$ |
0.22 |
|
$ |
0.80 |
|
$ |
1.26 |
|
Diluted |
|
$ |
0.19 |
|
$ |
0.22 |
|
$ |
0.79 |
|
$ |
1.25 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-Average Shares Outstanding: |
|
|
|
|
|
|
|
|
|
||||
Basic |
|
32,531,831 |
|
32,423,454 |
|
32,503,306 |
|
32,396,764 |
|
||||
Diluted |
|
33,154,625 |
|
32,439,039 |
|
32,908,510 |
|
32,573,552 |
|
INTERLINE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
TWELVE MONTHS ENDED DECEMBER 25, 2009 AND DECEMBER 26, 2008
(in thousands)
|
|
Twelve Months Ended |
|
||||
|
|
December 25, |
|
December 26, |
|
||
|
|
2009 |
|
2008 |
|
||
Cash Flows from Operating Activities: |
|
|
|
|
|
||
Net income |
|
$ |
26,088 |
|
$ |
40,833 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
19,174 |
|
17,414 |
|
||
Gain on extinguishment of debt, net |
|
(1,257 |
) |
(2,890 |
) |
||
Amortization of debt issuance costs |
|
1,084 |
|
1,143 |
|
||
Amortization of discount on 81/8% senior subordinated notes |
|
145 |
|
148 |
|
||
Write-off of deferred acquisition costs |
|
672 |
|
115 |
|
||
Share-based compensation |
|
3,794 |
|
3,782 |
|
||
Excess tax benefits from share-based compensation |
|
(45 |
) |
(147 |
) |
||
Deferred income taxes |
|
5,684 |
|
(680 |
) |
||
Provision for doubtful accounts |
|
10,522 |
|
6,711 |
|
||
Loss on disposal of property and equipment |
|
217 |
|
191 |
|
||
|
|
|
|
|
|
||
Changes in assets and liabilities which provided (used) cash: |
|
|
|
|
|
||
Accounts receivable - trade |
|
9,216 |
|
10,303 |
|
||
Inventory |
|
38,098 |
|
(19,148 |
) |
||
Prepaid expenses and other current assets |
|
4,343 |
|
1,461 |
|
||
Other assets |
|
394 |
|
661 |
|
||
Accounts payable |
|
17,671 |
|
6,871 |
|
||
Accrued expenses and other current liabilities |
|
5,880 |
|
(6,800 |
) |
||
Accrued interest |
|
(22 |
) |
234 |
|
||
Income taxes |
|
2,804 |
|
(2,558 |
) |
||
Other liabilities |
|
(180 |
) |
(1,452 |
) |
||
Net cash provided by operating activities |
|
144,282 |
|
56,192 |
|
||
Cash Flows from Investing Activities: |
|
|
|
|
|
||
Purchase of property and equipment, net |
|
(11,157 |
) |
(20,582 |
) |
||
Purchase of short-term investments |
|
(3,034 |
) |
(35,531 |
) |
||
Proceeds from sales and maturities of short-term investments |
|
1,557 |
|
84,071 |
|
||
Purchase of businesses, net of cash acquired |
|
(1,881 |
) |
(10,243 |
) |
||
Net cash (used in) provided by investing activities |
|
(14,515 |
) |
17,715 |
|
||
Cash Flows from Financing Activities: |
|
|
|
|
|
||
Increase (Decrease) in purchase card payable, net |
|
1,379 |
|
(2,909 |
) |
||
Repayment of term debt |
|
(61,535 |
) |
(2,486 |
) |
||
Repayment of 81/8% senior subordinated notes |
|
(34,157 |
) |
(9,984 |
) |
||
Payments on capital lease obligations |
|
(239 |
) |
(218 |
) |
||
Proceeds from stock options exercised |
|
1,005 |
|
656 |
|
||
Excess tax benefits from share-based compensation |
|
45 |
|
147 |
|
||
Treasury stock acquired to satisfy minimum statutory tax withholding requirements |
|
(58 |
) |
(1,050 |
) |
||
Net cash used in financing activities |
|
(93,560 |
) |
(15,844 |
) |
||
Effect of exchange rate changes on cash and cash equivalents |
|
292 |
|
(314 |
) |
||
Net increase in cash and cash equivalents |
|
36,499 |
|
57,749 |
|
||
Cash and cash equivalents at beginning of period |
|
62,724 |
|
4,975 |
|
||
Cash and cash equivalents at end of period |
|
$ |
99,223 |
|
$ |
62,724 |
|
|
|
|
|
|
|
||
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
||
Interest |
|
$ |
17,697 |
|
$ |
16,823 |
|
Income taxes, net of refunds |
|
$ |
8,958 |
|
$ |
21,124 |
|
|
|
|
|
|
|
||
Schedule of Non-Cash Investing Activities: |
|
|
|
|
|
||
Property acquired through lease incentives |
|
$ |
3,009 |
|
$ |
|
|
Adjustments to liabilities assumed and goodwill on businesses acquired |
|
$ |
8 |
|
$ |
1,027 |
|
INTERLINE BRANDS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-US GAAP INFORMATION
THREE AND TWELVE MONTHS ENDED DECEMBER 25, 2009 AND DECEMBER 26, 2008
(in thousands)
Free Cash Flow
|
|
Three Months Ended |
|
Twelve Months Ended |
|
||||||||
|
|
December 25, |
|
December 26, |
|
December 25, |
|
December 26, |
|
||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
42,099 |
|
$ |
42,147 |
|
$ |
144,282 |
|
$ |
56,192 |
|
Less capital expenditures |
|
(2,079 |
) |
(1,870 |
) |
(11,157 |
) |
(20,582 |
) |
||||
Free cash flow |
|
$ |
40,020 |
|
$ |
40,277 |
|
$ |
133,125 |
|
$ |
35,610 |
|
We define free cash flow as net cash provided by operating activities, as defined under US GAAP, less capital expenditures. We believe that free cash flow is an important measure of our liquidity and therefore our ability to reduce debt and make strategic investments after considering the capital expenditures necessary to operate the business. We use free cash flow in the evaluation of the Companys business performance. A limitation of this measure, however, is that it does not reflect payments made in connection with investments and acquisitions, which reduce liquidity. To compensate for this limitation, management evaluates its investments and acquisitions through other return on capital measures.
Daily Sales Calculations
|
|
Three Months Ended |
|
Twelve Months Ended |
|
||||||||||||
|
|
December 25, |
|
December 26, |
|
|
|
December 25, |
|
December 26, |
|
|
|
||||
|
|
2009 |
|
2008 |
|
% Variance |
|
2009 |
|
2008 |
|
% Variance |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
254,617 |
|
$ |
277,584 |
|
-8.3 |
% |
$ |
1,059,278 |
|
$ |
1,195,663 |
|
-11.4 |
% |
Less acquisitions: |
|
|
|
|
|
|
|
(13,058 |
) |
|
|
|
|
||||
Organic sales |
|
$ |
254,617 |
|
$ |
277,584 |
|
-8.3 |
% |
$ |
1,046,220 |
|
$ |
1,195,663 |
|
-12.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Daily sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ship days |
|
61 |
|
61 |
|
|
|
252 |
|
252 |
|
|
|
||||
Average daily sales (1) |
|
$ |
4,174 |
|
$ |
4,551 |
|
-8.3 |
% |
$ |
4,203 |
|
$ |
4,745 |
|
-11.4 |
% |
Average organic daily sales (2) |
|
$ |
4,174 |
|
$ |
4,551 |
|
-8.3 |
% |
$ |
4,152 |
|
$ |
4,745 |
|
-12.5 |
% |
(1) Average daily sales are defined as sales for a period of time divided by the number of shipping days in that period of time.
(2) Average organic daily sales are defined as sales for a period of time divided by the number of shipping days in that period of time excluding any sales from acquisitions made subsequent to the beginning of the prior year period.
Average organic daily sales is presented herein because we believe it to be relevant and useful information to our investors since it is used by management to evaluate the operating performance of our business, as adjusted to exclude the impact of acquisitions, and compare our organic operating performance with that of our competitors. However, average organic daily sales is not a measure of financial performance under US GAAP and it should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with US GAAP, such as net sales. Management utilizes average organic daily sales as an operating performance measure in conjunction with US GAAP measures such as net sales.
Adjusted EBITDA
|
|
Three Months Ended |
|
Twelve Months Ended |
|
||||||||
|
|
December 25, |
|
December 26, |
|
December 25, |
|
December 26, |
|
||||
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
Net income (GAAP) |
|
$ |
6,313 |
|
$ |
7,248 |
|
$ |
26,088 |
|
$ |
40,833 |
|
Interest expense |
|
4,371 |
|
6,682 |
|
19,044 |
|
28,482 |
|
||||
Interest income |
|
(64 |
) |
(15 |
) |
(215 |
) |
(1,105 |
) |
||||
Loss (Gain) on extinguishment of debt |
|
38 |
|
(2,775 |
) |
(1,257 |
) |
(2,775 |
) |
||||
Income tax provision |
|
4,379 |
|
4,837 |
|
17,073 |
|
24,625 |
|
||||
Depreciation and amortization |
|
5,005 |
|
4,719 |
|
19,174 |
|
17,414 |
|
||||
Adjusted EBITDA |
|
$ |
20,042 |
|
$ |
20,696 |
|
$ |
79,907 |
|
$ |
107,474 |
|
Adjusted EBITDA differs from Consolidated EBITDA per our credit facility agreement for purposes of determining our net leverage ratio. We define Adjusted EBITDA as net income plus interest expense (income), net, (gain) loss on extinguishment of debt, provision for income taxes and depreciation and amortization. Adjusted EBITDA is presented herein because we believe it to be relevant and useful information to our investors since it is consistently used by our management to evaluate the operating performance of our business and to compare our operating performance with that of our competitors. Management also uses Adjusted EBITDA for planning purposes, including the preparation of annual operating budgets, and to determine appropriate levels of operating and capital investments. Adjusted EBITDA excludes certain items, which we believe are not indicative of our core operating results. We therefore utilize Adjusted EBITDA as a useful alternative to net income as an indicator of our operating performance compared to the Companys plan. However, Adjusted EBITDA is not a measure of financial performance under US GAAP. Accordingly, Adjusted EBITDA should not be used in isolation or as a substitute for other measures of financial performance reported in accordance with US GAAP, such as gross margin, operating income, net income, cash flows from operating, investing and financing activities or other income or cash flow statement data prepared in accordance with US GAAP. While we believe that some of the items excluded from Adjusted EBITDA are not indicative of our core operating results, these items do impact our income statement, and management therefore utilizes Adjusted EBITDA as an operating performance measure in conjunction with US GAAP measures, such as gross margin, operating income, net income, cash flows from operating, investing and financing activities or other income or cash flow statement data prepared in accordance with US GAAP.