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Exhibit 99.1

Goodman Networks Reports Third Quarter 2016

Revenue and Earnings

FRISCO, TX, November 14, 2016 – Goodman Networks Incorporated today announced financial results for the three and nine months ended September 30, 2016.

Revenue from continuing operations was $104.3 million and $282.2 million for the three and nine months ended September 30, 2016, respectively, an increase of $10.4 million and $27.3 million from the same periods in 2015, respectively. The revenue growth from continuing operations was driven by increased volume in our Field Services segment offset slightly by decreased revenues in our Professional Services and Infrastructure Services segment for the nine months ended September 30, 2016.

On July 6, 2016, we sold certain assets to Dycom, and Dycom assumed certain liabilities of the Company, related to the Company’s former wireless network deployment and wireline businesses within the Infrastructure Services segment. As a result, the Company has classified the results of the wireless network deployment and the wireline businesses as discontinued operations in the consolidated statements of operations and comprehensive loss for all periods presented. Additionally, the related assets and liabilities associated with the discontinued operations are classified as held for sale in the consolidated balance sheets.

Field Services revenue increased 15.1% and 22.4% for the three and nine months ended September 30, 2016, as compared to the same periods in 2015, respectively, driven primarily by an increased volume in work orders related to satellite installation and repair services. Professional Services revenue decreased 4.6% and 13.9% for the three and nine months ended September 30, 2016 as compared to the same periods in 2015, respectively, resulting from a decrease in engineering services provided to Alcatel-Lucent and a decline resulting from the completion of certain long term Distributed Antenna Systems (“DAS”) services contracts. Infrastructure Services revenue, now consisting primarily of decommissioning and maintenance services for carriers, increased for the three months ended September 30, 2016 by 12.9% and decreased 61.3% for the nine months ended September 30, 2016, respectively, compared to the same periods in 2015 due to the decline in services provided under a decommissioning program for a major carrier. We expect revenue for our Infrastructure Services segment to increase through the fourth quarter of 2016 as we continue ramp to up a new program with Sprint.

“After the Dycom asset sale, this is truly a new Goodman with a new focus and strategic direction,” stated Ron Hill, Goodman Networks’ executive chairman and chief executive officer.  “As capacity and densification constraints on the wireless network grow due to exponentially increasing consumer demand from streaming video and the Internet of Things, Goodman is postured to take advantage of these trends with its wireless expertise in DAS and WiFi and significant ‘feet on the street’ presence.  We will continue to grow the top line with new business opportunities and continue our emphasis on cash flow and overall profitability for all of our stakeholders.”

Overall gross profit of $12.9 million decreased $4.0 million for the three months ended September 30, 2016 when compared to the same period in the prior year. Gross margin for the three months ended September 30, 2016 of 12.4% decreased from 18.0% from the same period in 2015, primarily due to increased costs within our Field Services segment due to workforce ramp up costs and work order mix within our Field Services Segment and Infrastructure Services segment and the closure of long term projects with low margins in our Professional Services segment. Gross profits for the nine months ended September 30, 2016 increased by $0.4 million to $40.9 million from $40.5 million for the same period in the prior year.

Gross profit for the Field Services segment of $11.0 million decreased $1.8 million for three months ended September 30, 2016 from $12.8 million in the same period in the prior year. Field Services gross margin decreased from 17.8% to 13.3% compared to the same three month period in the prior year. Field Services gross profit of $35.4 million for the nine months ended September 30, 2016 increased $0.9 million from $34.5 million for the same period in the prior year while Field Services margins declined from 18.0% to 15.1%.  The Field Services segment gross profit and margin declines were due to workforce ramp up costs in addition to a product mix shift.

.


Gross profit for the Professional Services segment of $2.1 million for the three months ended September 30, 2016 decreased $2.3 million compared to $4.4 million for the same period in the prior year. Gross margins for the three months ended September 30, 2016 decreased to 11.7%, from 23.3% during the same period in 2015. Margins declined during the period due to the delay and completion of certain long term distributed antenna systems (“DAS”) projects which lower margins. Margins in the same period in prior year were higher due the completion of higher margin projects subsequent to the CSG acquisition as we further integrated the business.  Gross profit for the Professional Services segment for the nine months ended September 30, 2016 remained relatively flat at $5.4 million when compared to the same period prior year.  Gross margin increased to 12.8% from 11.0% for the nine months ended September 30, 2016.

Infrastructure Services gross margin for the three months ended September 30, 2016 of negative 5.8% increased from a negative 10.6% during the same period in 2015. Gross Margins for the nine months ended September 30, 2016 decreased from 3.7% to 2.6%.  The Infrastructure Services segment incurred ramp up costs relating to the new Sprint program, which in the short term has yielded lower margins as the Company incurs additional costs with little associated revenue for the quarter. The program is expected to increase in both revenue and margins in the future periods as we continue to ramp the program.

Income (Loss) from continuing operations was $4.0 million and $(27.6) million for the three and nine months ended September 30, 2016, respectively, compared to a loss from continuing operations of $(12.5) million and $(61.9) million for the three and nine months ended September 30, 2015, respectively.

Adjusted EBITDA from continuing operations was $1.7 million for the three months ended September 30, 2016, compared to $1.4 million from the same period in 2015. Adjusted EBITDA from continuing operations for the nine months ended September 30, 2016 was $6.5 million compared to ($7.0) million for the same period in 2015.

Summary financial statements for the three and nine months ended September 30, 2016 are included in Exhibit A to this earnings announcement.



Results for the three and nine months ended September 30, 2015 and 2016 (dollars in thousands)

  

 

Three Months Ended September 30,

 

 

 

 

 

Nine Months Ended September 30,

 

 

2015

 

2016

 

 

 

 

 

2015

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount

 

 

 

Amount

 

 

 

Change ($)

 

 

Amount

 

 

Amount

 

 

Change ($)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Field Services

$

72,299

 

 

 

$

83,188

 

 

 

$

10,889

 

 

$

191,514

 

 

$

234,388

 

 

$

42,874

 

Professional Services

 

18,760

 

 

 

 

17,896

 

 

 

 

(864

)

 

 

49,164

 

 

 

42,312

 

 

 

(6,852

)

Infrastructure Services

 

2,879

 

 

 

 

3,251

 

 

 

 

372

 

 

 

14,257

 

 

 

5,492

 

 

 

(8,765

)

Total revenues

 

93,938

 

 

 

 

104,335

 

 

 

 

10,397

 

 

 

254,935

 

 

 

282,192

 

 

 

27,257

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Field Services

 

59,463

 

 

 

 

72,141

 

 

 

 

12,678

 

 

 

156,947

 

 

 

198,950

 

 

 

42,003

 

Professional Services

 

14,385

 

 

 

 

15,801

 

 

 

 

1,416

 

 

 

43,736

 

 

 

36,906

 

 

 

(6,830

)

Infrastructure Services

 

3,184

 

 

 

 

3,439

 

 

 

 

255

 

 

 

13,723

 

 

 

5,350

 

 

 

(8,373

)

Total cost of revenues

 

77,032

 

 

 

 

91,381

 

 

 

 

14,349

 

 

 

214,406

 

 

 

241,206

 

 

 

26,800

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Field Services

 

12,836

 

 

 

 

11,047

 

 

 

 

(1,789

)

 

 

34,567

 

 

 

35,438

 

 

 

871

 

Professional Services

 

4,375

 

 

 

 

2,095

 

 

 

 

(2,280

)

 

 

5,428

 

 

 

5,406

 

 

 

(22

)

Infrastructure Services

 

(305

)

 

 

 

(188

)

 

 

 

117

 

 

 

534

 

 

 

142

 

 

 

(392

)

Total gross profit

 

16,906

 

 

 

 

12,954

 

 

 

 

(3,952

)

 

 

40,529

 

 

 

40,986

 

 

 

457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin as percent of segment revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Field Services

 

17.8

%

 

 

 

13.3

%

 

 

 

 

 

 

 

18.0

%

 

 

15.1

%

 

 

 

 

Professional Services

 

23.3

%

 

 

 

11.7

%

 

 

 

 

 

 

 

11.0

%

 

 

12.8

%

 

 

 

 

Infrastructure Services

 

(10.6

)%

 

 

 

(5.8

)%

 

 

 

 

 

 

 

3.7

%

 

 

2.6

%

 

 

 

 

Total gross margin

 

18.0

%

 

 

 

12.4

%

 

 

 

 

 

 

 

15.9

%

 

 

14.5

%

 

 

 

 

Selling, general and administrative expenses

 

18,068

 

 

 

 

15,745

 

 

 

 

(2,323

)

 

 

59,143

 

 

 

43,235

 

 

 

(15,908

)

Restructuring expense

 

250

 

 

 

 

221

 

 

 

 

(29

)

 

 

7,892

 

 

 

1,621

 

 

 

(6,271

)

Impairment expense

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

2,142

 

 

 

8,767

 

 

 

6,625

 

Operating loss

 

(1,412

)

 

 

 

(3,012

)

 

 

 

(1,600

)

 

 

(28,648

)

 

 

(12,637

)

 

 

16,011

 

Interest income

 

(43

)

 

 

 

(121

)

 

 

 

(78

)

 

 

(116

)

 

 

(201

)

 

 

(85

)

Interest expense

 

11,096

 

 

 

 

11,234

 

 

 

 

138

 

 

 

33,041

 

 

 

33,301

 

 

 

260

 

Loss before income taxes

 

(12,465

)

 

 

 

(14,125

)

 

 

 

(1,660

)

 

 

(61,573

)

 

 

(45,737

)

 

 

15,836

 

Income tax expense

 

48

 

 

 

 

(18,153

)

 

 

 

(18,201

)

 

 

387

 

 

 

(18,087

)

 

 

(18,474

)

Net income (loss) from continuing operations

 

(12,513

)

 

 

 

4,028

 

 

 

 

16,541

 

 

 

(61,960

)

 

 

(27,650

)

 

 

34,310

 

Discontinued operations, net of income taxes

 

190

 

 

 

 

60,316

 

 

 

 

60,126

 

 

 

11,365

 

 

 

58,765

 

 

 

47,400

 

Net income (loss)

$

(12,323

)

 

 

$

64,344

 

 

 

$

76,667

 

 

$

(50,595

)

 

$

31,115

 

 

$

81,710

 

 

SG&A expense of $15.7 million for the three months ended September 30, 2016 decreased by $2.3 million from $18.0 million for the same period in the prior year.  SG&A of $43.2 million for the nine months ended September 30, 2016, decreased $15.9 million from $59.1 million for the same period in the prior year.  We continue to take steps to reduce our SG&A costs ensuring it aligns with revenue forecasts and the shift in our business after the sale of assets to Dycom.

We recorded a non-cash impairment charge of $8.7 million in the nine months ended September 30, 2016 due to the impairment of goodwill related to our Core Network Deployment (“CND”) reporting unit within our Professional Services segment. The determination to test for goodwill impairment prior to our October 1st impairment dates was based on certain indicators of impairment, including the reduction in backlog for enterprise customers as a result of current market conditions.

Net interest expense was $11.1 million for both the three months period ended 2016 and 2015. Net interest expense for the nine months ended September 30, 2016, was $33.1 million and remained relatively flat compared to $32.9 million for the same period in 2015.


Net cash used in continuing operating activities was $41.2 million for nine months ended September 30, 2016 compared to $37.9 million for the same period in the prior year. The increase is due primarily to the increase in accounts receivable. Capital spending was $2.7 million for the nine months ended September 30, 2016 compared to $1.8 million for the same period in the prior year. Cash provided by financing activities for the nine months ended September 30, 2016 of $7.3 million compared to cash used in financing activities of $4.8 million in the nine months ended September 30, 2015. The change was primarily related to a $4.0 million payment on a guarantee in the nine months ended September 30, 2015 and borrowings on our line of credit in September 2016. As of September 30, 2016, cash on hand was $85.4.million and we ended the quarter with additional borrowing capacity on our credit facility of $12.7 million, representing total net liquidity of $98.1 million, of which $20 million has been deposited into an indemnity escrow account pursuant to the Dycom purchase agreement and will be held in escrow until certain conditions are fulfilled.

Goodman Networks Conference Call Information

Goodman Networks will host a conference call to discuss its financial and operational results at 8:30 AM Central Time (CT) on Monday, November 14, 2016. Dial-in information for the conference call is as follows:

 

Date:

  

Monday, November 14, 2016

Time:

  

8:30 AM CT

Call-in number:

  

(844) 308-5977 or (408) 427-3705

Participant Passcode:

  

16653369

 

Please plan on accessing the conference call 5 minutes prior to the scheduled start time. A replay of the call will be available within two hours of completion of the call and accessible for seven days. To listen to a replay of the call, please dial (855) 859-2056 or (404) 537-3406 and use passcode 16653369 prior to 10:59 PM CT on Monday, November 21, 2016.

About Goodman Networks Incorporated

Goodman Networks is a leading provider of field services to the satellite television industry and network infrastructure and professional services to the wireless telecommunications industry. Additional information can be found at www.goodmannetworks.com.

Forward-Looking Statements

This earnings release and the conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations, estimates and projections. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this earnings release. Such risks and uncertainties include our ability to manage or refinance our substantial level of indebtedness and our ability to generate sufficient cash to service our indebtedness, our reliance on one customer for the vast majority of our revenues, our ability to maintain a level of service quality satisfactory to this customer across a broad geographic area, our ability to raise additional capital to fund our operations and meet our obligations, our ability to translate amounts included in our estimated backlog into revenue or profits, our ability to weather business and economic conditions and trends affecting our customers and the cyclical nature of the telecommunications and subscription television service industries, the adequacy of our insurance and other reserves and allowances for doubtful accounts, whether the carrying value of our assets may be impaired, the future impact of any acquisitions or dispositions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs and the availability of financing, and the other risks detailed in our filings with the Securities and Exchange Commission. We do not undertake to update forward-looking statements.

Non-GAAP Financial Measures

EBITDA represents net income from continuing operations before income tax expense, interest income and expense, depreciation and amortization. We present EBITDA because we consider it to be an important supplemental measure of our operating performance and we believe that such information will be used by securities analysts, investors and other interested parties in the evaluation of high yield issuers, many of which present EBITDA when reporting their results. We consider EBITDA to be an operating performance measure, and not a liquidity measure, that provides a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. We also present Adjusted EBITDA, which is defined by the Company, as EBITDA plus (i) share-based compensation; (ii) certain restructuring fees and expenses; (iii) impairment charges recognized on our long-lived assets; (iv) fees and expense related to the issuance of equity of equity and debt and (v) transaction fees and expenses related to acquisitions and dispositions; (vi) board approved bonuses related to the asset sale to Dycom and the Midcap transactions; (vii) Executive severance.


In previous presentations of Adjusted EBITDA, we adjusted for amortization of debt issuance costs. We have determined to stop making such adjustment to Adjusted EBITDA as we do not believe this gives an accurate reflection of the business. Adjusted EBITDA is not a measurement under GAAP and may not be used in the same way by other companies. Management believes that Adjusted EBITDA is an important part of our Company’s internal reporting and is a key measure used by management to evaluate profitability and operating performance of the Company. Management also uses Adjusted EBITDA to compare the Company’s performance to that of its competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period its ability to fund capital expenditures, fund growth, service debt and determine bonuses.

Adjusted EBITDA excludes non-cash impairment charges and non-cash stock compensation expense because of the non-cash nature of these items. Adjusted EBITDA excludes net other expense because these items are not related to the primary operations of the Company.

The following table reconciles our net income to EBITDA and EBITDA to Adjusted EBITDA (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September  30,

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

EBITDA and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

$

(12,513

)

 

$

4,028

 

 

$

(61,960

)

 

$

(27,650

)

Income tax expense

48

 

 

 

(18,153

)

 

 

387

 

 

 

(18,087

)

Interest expense, net

 

11,053

 

 

 

11,113

 

 

 

32,925

 

 

 

33,100

 

Depreciation and amortization

 

2,346

 

 

 

1,656

 

 

 

7,615

 

 

 

4,793

 

EBITDA from continuing operations

$

934

 

 

$

(1,356

)

 

$

(21,033

)

 

$

(7,844

)

Share-based compensation (a)

 

1,106

 

 

 

(93

)

 

 

4,036

 

 

 

643

 

Restructuring expense (b)

 

250

 

 

 

221

 

 

 

7,892

 

 

 

1,621

 

Asset impairments (c)

 

-

 

 

 

-

 

 

 

2,142

 

 

 

8,767

 

Debt restructuring fees (d)

 

-

 

 

 

-

 

 

 

-

 

 

 

457

 

Transaction bonuses (e )

 

-

 

 

 

2,728

 

 

 

-

 

 

 

2,728

 

Executive Severance (f)

 

-

 

 

 

156

 

 

 

-

 

 

 

156

 

Adjusted EBITDA from continuing operations

$

2,290

 

 

$

1,656

 

 

$

(6,963

)

 

$

6,528

 

Estimated Backlog

The Company refers to the amount of revenue it expects to recognize over the next 18 months from future work on uncompleted contracts, including master service agreements and new contractual agreements on which work has not begun, as its “estimated backlog.” The Company determines the amount of estimated backlog for work under master service agreements based on historical trends, anticipated seasonal impacts and estimates of customer demand based upon communications with customers. The Company’s estimated 18-month backlog as of September 30, 2016 was $645.6 million.

Goodman Networks Contact:

 

Investor Relations:

 

Shakeeb Mir

 

 

Chief of Staff

 

 

smir@goodmannetworks.com

 

 

(972) 421-5771

 


Exhibit A

Goodman Networks Incorporated

Consolidated Balance Sheets

(In Thousands, Except Share Amounts and Par Value)

(Unaudited)

 

 

 

December 31, 2015

 

 

September 30, 2016

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash

$

39,832

 

 

$

62,911

 

Restricted Cash

 

-

 

 

 

22,500

 

Accounts receivable, net of allowances for doubtful accounts of $107 at December 31, 2015

   and $119 at September 30, 2016

 

21,179

 

 

 

32,331

 

Unbilled revenue on completed projects

 

695

 

 

 

1,939

 

Costs in excess of billings on uncompleted projects

 

3,428

 

 

 

3,565

 

Inventories

 

10,175

 

 

 

11,977

 

Prepaid expenses and other current assets

 

3,147

 

 

 

5,931

 

Assets held for sale

 

41,749

 

 

 

 

Income tax receivable

 

204

 

 

 

214

 

Total current assets

 

120,409

 

 

 

141,368

 

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $30,140 at December 31, 2015 and

   $22,167 at September 30, 2016

 

19,036

 

 

 

19,140

 

Deposits and other assets

 

2,357

 

 

 

5,003

 

Insurance collateral

 

15,035

 

 

 

14,747

 

Deferred financing costs

 

98

 

 

 

1,196

 

Intangible assets, net of accumulated amortization of $14,508 at December 31, 2015 and $16,397

   at September 30, 2016

 

14,412

 

 

 

12,523

 

Long-term assets held for sale

 

4,131

 

 

 

 

Goodwill

 

67,296

 

 

 

58,648

 

Total assets

$

242,774

 

 

$

252,625

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Deficit

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Line of credit

$

 

 

$

7,696

 

Accounts payable

 

23,748

 

 

 

26,713

 

Accrued expenses

 

47,451

 

 

 

33,639

 

Income taxes payable

 

311

 

 

 

891

 

Billings in excess of costs on uncompleted projects

 

2,930

 

 

 

1,277

 

Deferred revenue

 

2,295

 

 

 

1,536

 

Liabilities related to assets held for sale and discontinued operations

 

35,076

 

 

 

12,196

 

Deferred rent

 

51

 

 

 

40

 

Current portion of capital leases

 

775

 

 

 

574

 

Total current liabilities

 

112,637

 

 

 

84,562

 

 

 

 

 

 

 

 

 

Notes payable, net of deferred financing cost

 

315,846

 

 

 

318,416

 

Capital lease obligations

 

400

 

 

 

242

 

Long-term liabilities held for sale and discontinued operations

 

325

 

 

 

1,293

 

Accrued expenses, non-current

 

6,842

 

 

 

7,273

 

Deferred revenue, non-current

 

8,973

 

 

 

11,671

 

Deferred tax liability

 

1,714

 

 

 

1,359

 

Deferred rent, non-current

 

168

 

 

 

177

 

Total liabilities

 

446,905

 

 

 

424,993

 

 

 

 

 

 

 

 

 

Shareholders' Deficit

 

 

 

 

 

 

 

Common stock, $0.01 par value, 10,000,000 shares authorized; 1,029,072 issued and 912,754

   outstanding at December 31, 2015 and September 30, 2016

 

10

 

 

 

10

 

Treasury stock, at cost, 116,318 shares at December 31, 2015 and September 30, 2016

 

(11,756

)

 

 

(11,756

)

Additional paid-in capital

 

25,914

 

 

 

26,557

 

Accumulated other comprehensive income

 

18

 

 

 

23

 

Accumulated deficit

 

(218,317

)

 

 

(187,202

)

Total shareholders' deficit

 

(204,131

)

 

 

(172,368

)

Total liabilities and shareholders' deficit

$

242,774

 

 

$

252,625

 


Goodman Networks Incorporated

Consolidated Statements of Operations

(In Thousands)

(Unaudited)

  

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

Revenues

 

$

93,938

 

 

$

104,335

 

 

$

254,935

 

 

$

282,192

 

Cost of revenues

 

 

77,032

 

 

 

91,381

 

 

 

214,406

 

 

 

241,206

 

Gross profit (exclusive of depreciation and amortization included

   in selling, general and administrative expense shown below)

 

 

16,906

 

 

 

12,954

 

 

 

40,529

 

 

 

40,986

 

Selling, general and administrative expenses

 

 

18,068

 

 

 

15,745

 

 

 

59,143

 

 

 

43,235

 

Restructuring expense

 

 

250

 

 

 

221

 

 

 

7,892

 

 

 

1,621

 

Impairment expense

 

 

-

 

 

 

-

 

 

 

2,142

 

 

 

8,767

 

Operating loss

 

 

(1,412

)

 

 

(3,012

)

 

 

(28,648

)

 

 

(12,637

)

Interest expense, net

 

 

11,053

 

 

 

11,113

 

 

 

32,925

 

 

 

33,100

 

Loss before income taxes and discontinued operations

 

 

(12,465

)

 

 

(14,125

)

 

 

(61,573

)

 

 

(45,737

)

Income tax expense (benefit)

 

 

48

 

 

 

(18,153

)

 

 

387

 

 

 

(18,087

)

Income (Loss) from continuing operations before discontinued operations

 

 

(12,513

)

 

 

4,028

 

 

 

(61,960

)

 

 

(27,650

)

Discontinued operations, net of income taxes

 

 

190

 

 

 

60,316

 

 

 

11,365

 

 

 

58,765

 

Net income (loss)

 

 

(12,323

)

 

 

64,344

 

 

 

(50,595

)

 

 

31,115

 

Other comprehensive income (loss):

 

 

26

 

 

 

(14

)

 

 

26

 

 

 

(5

)

Comprehensive income (loss)

 

$

(12,297

)

 

$

64,330

 

 

$

(50,569

)

 

$

31,110

 


Goodman Networks Incorporated

Consolidated Statements of Cash Flows

(In Thousands)

  

 

 

Nine Months Ended September 30,

 

 

 

2015

 

 

2016

 

Operating Activities

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(50,595

)

 

$

31,115

 

Net income from discontinued operations

 

 

(11,365

)

 

 

(58,765

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization of property and equipment

 

 

3,258

 

 

 

2,904

 

Amortization of intangible assets

 

 

4,357

 

 

 

1,889

 

Amortization of debt discounts and deferred financing costs

 

 

2,691

 

 

 

1,472

 

Impairment  charges

 

 

2,142

 

 

 

8,767

 

Change in estimate of doubtful accounts

 

 

(176

)

 

 

581

 

Deferred tax expense (benefit)

 

 

279

 

 

 

(355

)

Share-based compensation expense

 

 

4,468

 

 

 

643

 

Change in fair value of contingent consideration

 

 

(726

)

 

 

 

Disposal on property and equipment

 

 

 

 

 

119

 

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(7,704

)

 

 

(5,410

)

Unbilled revenue

 

 

(3,510

)

 

 

(1,244

)

Costs in excess of billings on uncompleted projects

 

 

(2,512

)

 

 

(136

)

Inventories

 

 

9,191

 

 

 

(1,802

)

Prepaid expenses and other assets

 

 

(3,915

)

 

 

(5,144

)

Accounts payable and other liabilities

 

 

14,932

 

 

 

(10,407

)

Income taxes payable / receivable

 

 

(1,693

)

 

 

570

 

Billings in excess of costs on uncompleted projects

 

 

1,276

 

 

 

(1,653

)

Deferred revenue

 

 

1,968

 

 

 

1,939

 

Deferred rent

 

 

(329

)

 

 

(2

)

Net cash used in continuing operating activities

 

 

(37,963

)

 

 

(34,919

)

Net cash provided by discontinued operating activities

 

 

5,889

 

 

 

(15,521

)

Net cash used in operating activities

 

 

(32,074

)

 

 

(50,440

)

 

 

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,780

)

 

 

(2,704

)

Proceeds from the sale of property and equipment

 

 

11

 

 

 

 

Net cash used in continuing investing activities

 

 

(1,769

)

 

 

(2,704

)

Net cash (used in) provided by discontinued investing activities

 

 

(738

)

 

 

91,391

 

Net cash (used in) provided by investing activities

 

 

(2,507

)

 

 

88,687

 

 

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

 

Proceeds from lines of credit

 

 

568,302

 

 

 

459,361

 

Payments on lines of credit

 

 

(568,302

)

 

 

(451,665

)

Payments on capital leases, notes payable

 

 

(815

)

 

 

(359

)

Payments on guarantee arrangements

 

 

(4,000

)

 

 

 

Net cash (used in) provided by continuing financing activities

 

 

(4,815

)

 

 

7,337

 

Net cash (used in) provided by financing activities

 

 

(4,815

)

 

 

7,337

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

 

26

 

 

 

(5

)

Increase (decrease) in cash

 

 

(39,370

)

 

 

45,579

 

Cash, Beginning of Period

 

 

76,703

 

 

 

39,832

 

Cash, End of Period

 

$

37,333

 

 

$

85,411