ZAGG Inc (Nasdaq: ZAGG), a leading global mobile lifestyle company,
today announced financial results for the second quarter ended
June 30, 2019.
Second Quarter 2019 Review (Comparisons versus Second
Quarter 2018)
- Net sales of $106.8 million compared to $118.6 million
- Gross profit of 35% compared to 32%
- Net loss of $(5.3) million compared to net income of $3.2
million
- Diluted loss per share of $(0.18) compared to diluted earnings
per share of $0.11
- Adjusted EBITDA of $2.4 million compared to $10.9 million
Year-to-Date 2019 Review (Comparisons versus
Year-to-Date 2018)
- Net sales of $185.5 million compared to $230.6 million
- Gross profit of 33% compared to 33%
- Net loss of $(19.8) million compared to net income of $10.2
million
- Diluted loss per share of $(0.68) compared to diluted earnings
per share of $0.36
- Adjusted EBITDA of $(6.6) million compared to $24.5
million
Chris Ahern, chief executive officer, commented, “Our second
quarter results were in-line with our recent expectations and on a
year-over-basis reflect the impact of our three recent
acquisitions, which are heavily back half-weighted in terms of
sales, combined with an increasingly challenging domestic selling
environment for our core business. We continue to make good
progress capitalizing on the growth prospects for our newly
acquired brands and we remain confident that Gear4, HALO and BRAVEN
are on track to exceed the growth targets we established at the
start of the year. Unfortunately, their combined performance is not
enough to offset the pressure we are experiencing in our core
business as the result of a decline in consumer demand for
smartphone devices the market has experienced this year. While our
brands continue to maintain industry leading positions, retail
sell-through for screen protection and our other categories has
continued to slow following a difficult start to 2019. Based on
current market trends and the additional tariffs recently
announced, along with a softer market view on smartphone unit sales
in the near-term, we have taken a more conservative outlook for the
remainder of 2019.”
“Although we're confident in our long-term strategy, we are
disappointed with the way 2019 is unfolding,” continued Ahern. “In
response to the headwinds we are currently facing, we are
implementing a series of cost savings initiatives in order to help
preserve profitability. These initiatives include headcount
reductions of approximately 10% of our global headcount,
acceleration of cost synergies from recent acquisitions into 2019,
and the reduction of a number of discretionary operating expense
categories. Despite the step back in earnings we are taking
this year, we are confident that ZAGG is well positioned to
profitably grow its share of the mobile lifestyle accessory market
in the U.S and overseas in the years ahead. Our confidence is
rooted in the strength of our brand portfolio, product teams and
distribution relationships combined with our ability to capitalize
on the market opportunities created by the upcoming industry
roll-out of 5G technology.”
“While we remain very excited about our future and prospects, we
have determined it is appropriate to announce at this time that the
Company has retained BofA Merrill Lynch to assist the Company in
exploring strategic alternatives to maximize stockholder
value. We do not expect to comment further on this process
until we have made a decision and are prepared to announce its
final outcome.”
Second Quarter Results
(Amounts in millions, except per share amounts)
| |
For the Three Months Ended |
| |
June 30, 2019 |
|
June 30, 2018 |
| |
|
|
|
|
Net sales |
$ |
106.8 |
|
|
$ |
118.6 |
| Gross
profit |
$ |
37.8 |
|
|
$ |
37.7 |
| Gross profit
margin |
|
35% |
|
|
|
32% |
| Net (loss)
income |
$ |
(5.3 |
) |
|
$ |
3.2 |
| Diluted (loss)
earnings per share |
$ |
(0.18 |
) |
|
$ |
0.11 |
| Diluted operating
(loss) earnings per share |
$ |
(0.09 |
) |
|
$ |
0.11 |
| Adjusted
EBITDA |
$ |
2.4 |
|
|
$ |
10.9 |
| |
|
|
|
|
|
|
Net sales decreased 10% to $106.8 million, compared to $118.6
million. The decrease in net sales was primarily attributable to
(1) a decrease in sales of screen protection products due to a pull
forward of shipments into the fourth quarter of 2018 ahead of a
potential tariff increase and (2) decreased sales of mophie power
management due to challenging sell-in comparisons during the second
quarter of 2019 compared to the same period last year. Decreases in
mophie power management were offset by HALO product sales. In
addition, decreases in net sales were partially offset by (1)
increased sales of Gear4 cases, and (2) a reduction of credits and
discounts.
Gross profit was $37.8 million (35% of net sales) compared to
$37.7 million (32% of net sales). The increase in gross profit
margin was primarily attributable to an increase in sales of Gear4
brand cases, HALO branded power products, and InvisibleShield
VisionGuard products, all which have a higher margin than
historical averages.
Operating expenses increased 35% to $44.0 million (41% of net
sales) compared to $32.5 million (27% of net sales). The increase
in operating expenses was primarily attributable to (1) additional
selling, general and administrative expense associated with the
newly acquired BRAVEN, Gear4 and HALO brands, (2) increased
marketing investments to support our growing portfolio of brands
and products, (3) increased selling, general and administrative
expense to support online channel and international geographic
expansion, and (4) higher amortization of long-lived intangibles
related to the BRAVEN, Gear4 and HALO acquisitions.
Net loss was $(5.3) million, or $(0.18) per diluted share
compared to net income of $3.2 million, or $0.11 per diluted
share.
Adjusted EBITDA was $2.4 million compared to $10.9 million.
Year-to-Date Results(Amounts in millions,
except per share amounts)
| |
For the Six Months Ended |
| |
June 30, 2019 |
|
June 30, 2018 |
| |
|
|
|
|
Net sales |
$ |
185.5 |
|
|
$ |
230.6 |
| Gross
profit |
$ |
61.6 |
|
|
$ |
75.3 |
| Gross profit
margin |
|
33% |
|
|
|
33% |
| Net (loss)
income |
$ |
(19.8 |
) |
|
$ |
10.2 |
| Diluted (loss)
earnings per share |
$ |
(0.68 |
) |
|
$ |
0.36 |
| Diluted operating
(loss) earnings per share |
$ |
(0.52 |
) |
|
$ |
0.36 |
| Adjusted
EBITDA |
$ |
(6.6 |
) |
|
$ |
24.5 |
| |
|
|
|
|
|
|
Net sales decreased 20% to $185.5 million, compared to $230.6
million. The decrease in net sales was primarily attributable to
(1) a decrease in sales of screen protection products due to a pull
forward of shipments into the fourth quarter of 2018 ahead of a
then-expected tariff increase and (2) decreased sales of mophie
power management due to challenging sell-in comparisons during the
first half of 2019. Decreases in mophie power management were
offset by HALO product sales. In addition, decreases in net sales
were partially offset by increased sales of Gear4 cases.
Gross profit was 61.6 million (33% of net sales) compared to
75.3 million (33% of net sales). Gross profit margin has not
changed significantly due to decreases in our screen protection
sales offset by (1) a reduction of credits and discounts, and (2)
an increase in sales of Gear4 brand cases, HALO branded power
products, and InvisibleShield VisionGuard products, all which have
a higher margin than historical averages.
Operating expenses increased 37% to $84.9 million (46% of
net sales) compared to $62.1 million (27% of net sales). The
increase in operating expenses was primarily attributable to (1)
additional selling, general and administrative expense associated
with the newly acquired BRAVEN, Gear4 and HALO brands, (2)
increased marketing investments to support our growing portfolio of
brands and products, (3) increased selling, general and
administrative expense to support online channel and international
geographic expansion, and (4) higher amortization of long-lived
intangibles related to the BRAVEN, Gear4 and HALO acquisitions.
Net loss was $(19.8) million, or $(0.68) per diluted share
compared to net income of $10.2 million, or $0.36 per diluted
share.
Adjusted EBITDA was $(6.6) million compared to $24.5
million.
Restructuring
In response to 2019 profitability headwinds and to position the
Company for long-term profitable growth, the Company initiated a
restructuring plan during the second quarter of 2019 and which
extended into the third quarter of 2019. These initiatives include
headcount reductions of approximately 10% of our global headcount,
acceleration of cost synergies from recent acquisitions into 2019,
and the reduction of a number of discretionary operating expense
categories.
It is expected that 2019 results will include one-time severance
restructuring charges totaling approximately $1.9 million, of which
$0.4 million was recorded in the second quarter and the remaining
will be recorded in the third quarter of 2019. These amounts have
been incorporated into the guidance ranges provided. The headcount
reductions are expected to provide gross annualized savings of
approximately $8.0 million.
2019 Business Outlook
For the full year of 2019, the Company now expects:
- Net sales of $520 to $550 million
- Gross profit margin as a percentage of net sales in the mid
30's range
- Adjusted EBITDA of $52 million to $62 million
- Diluted operating earnings per share of $0.75 to $1.00.
Conference Call
A conference call will be held today, August 6, 2019, at
5:00 p.m. Eastern to review these results. Interested parties may
access via the Internet on the Company's website at:
investors.zagg.com (the URLs are included here in this exhibit as
inactive textual references and information contained on, or
accessible through, our websites is not a part of, and is not
incorporated by reference into, this report).
About Non-U.S. GAAP Financial Information
This press release includes Adjusted EBITDA and Diluted
Operating Earnings Per Share, which are not financial measures
prepared in accordance with accounting principles generally
accepted in the United States of America (“U.S. GAAP”). Readers are
cautioned that (1) Adjusted EBITDA (earnings before stock-based
compensation expense, depreciation and amortization, other income
(expense), net, transaction costs, BRAVEN employee retention bonus,
former CFO retention bonus, inventory step-up in conjunction with
2018 and 2019 acquisitions, consulting fee to former CEO,
restructuring expenses and income tax (benefit) provision) and (2)
Diluted Operating (Loss) Earnings Per Share (diluted (loss)
earnings per share excluding the impact of transaction costs,
inventory step-up, and amortization expense – all in conjunction
with the BRAVEN, Gear4 and HALO acquisitions, BRAVEN employee
retention bonus, restructuring expenses and share-based
compensation issued as retention) are not financial measures under
U.S. GAAP. In addition, this financial information should not be
construed as an alternative to any other measure of performance
determined in accordance with U.S. GAAP, or as an indicator of
operating performance, liquidity or cash flows generated by
operating, investing and financing activities, as there may be
significant factors or trends that it fails to address. As such, it
should be read only in conjunction with our consolidated financial
statements prepared in accordance with U.S. GAAP. We present
Adjusted EBITDA and Diluted Operating Earnings Per Share because we
believe that these measures are helpful to some investors as a
measure of performance and to normalize the impact of acquisitions.
We caution readers that non-U.S. GAAP financial information, by its
nature, departs from traditional accounting conventions.
Accordingly, its use can make it difficult to compare current
results with results from other reporting periods and with the
financial results of other companies. We have provided a
reconciliation of Adjusted EBITDA and Diluted Operating Earnings
Per Share to the most directly comparable U.S. GAAP measures in the
supplemental financial information attached to this press
release.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains (and oral communications made by us
may contain) “forward-looking statements” within the meaning of the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be
identified by words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “predict,” “project,” “target,”
“future,” “seek,” “likely,” “strategy,” “may,” “should,” “will” and
similar references to future periods. Examples of forward-looking
statements include, among others, statements we make regarding our
outlook for the Company and statements that estimate or project
future results of operations or the performance of the Company.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following:
- the ability to design, produce, and distribute the
creative product solutions required to retain existing customers
and to attract new customers;
- building and maintaining marketing and distribution functions
sufficient to gain meaningful international market share for our
products;
- the ability to respond quickly with appropriate products after
the adoption and introduction of new mobile devices by major
manufacturers like Apple®, Samsung®, and Google®;
- changes or delays in announced launch schedules for (or recalls
or withdrawals of) new mobile devices by major manufacturers like
Apple, Samsung, and Google;
- the ability to successfully integrate new operations or
acquisitions;
- the impacts of inconsistent quality or reliability of new
product offerings;
- the impacts of lower profit margins in certain new and existing
product categories, including certain mophie products;
- the impacts of changes in economic conditions, including on
customer demand;
- managing inventory in light of constantly shifting consumer
demand;
- the failure of information systems or technology solutions or
the failure to secure information system data, failure to comply
with privacy laws, security breaches, or the effect on the Company
from cyber-attacks, terrorist incidents or the threat of terrorist
incidents;
- changes in U.S. and international trade policy and tariffs,
including the possible effect of recent U.S. tariff proposals on
selected materials used in the manufacture of products sold by the
Company which are sourced from China;
- adoption of or changes in accounting policies, principles, or
estimates; and
- changes in the law, economic and financial conditions,
including the effect of enactment of US tax reform or other tax law
changes.
Any forward-looking statement made by us in this press release
speaks only as of the date on which such statement is made. New
factors emerge from time to time and it is not possible for
management to predict all such factors, nor can it assess the
impact of any such factor on the business or the extent to which
any factor, or combination of factors, may cause results to differ
materially from those contained in any forward-looking statement.
Readers should also review the risks and uncertainties listed in
our most recent Annual Report on Form 10-K and other reports we
file with the U.S. Securities and Exchange Commission, including
(but not limited to) Item 1A - “Risk Factors” in the Form 10-K and
Management's Discussion and Analysis of Financial Condition and
Results of Operations and the risks described therein from time to
time. We undertake no obligation to publicly update any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise. The forward-looking
statements contained in this press release are intended to qualify
for the safe harbor provisions of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended.
About ZAGG Inc
ZAGG Inc (NASDAQ:ZAGG) is a global leader in accessories and
technologies that empower mobile lifestyles. The Company has an
award-winning product portfolio that includes screen protection,
mobile keyboards, power management solutions, social tech, and
personal audio sold under the ZAGG®, mophie®, InvisibleShield®,
IFROGZ®, BRAVEN®, Gear4® and HALO® brands. ZAGG has operations in
the United States, Ireland, and China. ZAGG products are available
worldwide, and can be found at leading retailers including Best
Buy, Verizon, AT&T, Sprint, T-Mobile, Walmart, Target, and
Amazon.com. For more information, please visit the Company’s
websites at www.ZAGG.com, www.mophie.com, www.Gear4.com, and
www.BestHALO.com and follow us on Facebook, Twitter and
Instagram.
CONTACT:
Investor Relations:ICR Inc.Brendon
Frey203-682-8216brendon.frey@icrinc.com
Company:ZAGG IncJeff DuBois801-506-7336jeff.dubois@ZAGG.com
ZAGG INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands, except par value
amounts)(Unaudited)
| |
|
June 30, 2019 |
|
December 31, 2018 |
| |
|
|
|
|
|
ASSETS |
|
|
|
| Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
12,885 |
|
|
$ |
15,793 |
|
| |
Accounts receivable, net of
allowances of $431 and $885 |
102,578 |
|
|
156,667 |
|
| |
Income tax receivable |
3,427 |
|
|
375 |
|
| |
Inventories |
110,565 |
|
|
82,919 |
|
| |
Prepaid expenses and other
current assets |
6,393 |
|
|
5,473 |
|
| Total
current assets |
235,848 |
|
|
261,227 |
|
| |
|
|
|
|
| Property and
equipment, net of accumulated depreciation of $13,860 and
$11,844 |
17,714 |
|
|
16,118 |
|
| Intangible assets,
net of accumulated amortization of $87,692 and $78,627 |
70,542 |
|
|
52,054 |
|
| Deferred income
tax assets |
15,396 |
|
|
19,403 |
|
| Operating lease
right of use assets |
10,380 |
|
|
— |
|
| Goodwill |
43,560 |
|
|
27,638 |
|
| Other assets |
1,315 |
|
|
1,571 |
|
| Total
assets |
$ |
394,755 |
|
|
$ |
378,011 |
|
| |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| Current
liabilities: |
|
|
|
| |
Accounts payable |
$ |
70,988 |
|
|
$ |
80,908 |
|
| |
Sales returns liability |
37,522 |
|
|
54,432 |
|
| |
Accrued wages and wage related
expenses |
6,665 |
|
|
6,624 |
|
| |
Accrued liabilities |
9,511 |
|
|
13,723 |
|
| |
Current portion of operating
lease liabilities |
2,154 |
|
|
— |
|
| Total
current liabilities |
126,840 |
|
|
155,687 |
|
| |
|
|
|
|
| Line of
credit |
95,363 |
|
|
58,363 |
|
| Operating lease
liabilities |
11,889 |
|
|
— |
|
| Other long-term
liabilities |
7,913 |
|
|
5,470 |
|
| Total
liabilities |
242,005 |
|
|
219,520 |
|
| |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
| |
Common stock, $0.001 par
value; 100,000 shares authorized; 36,140 and 34,457 shares
issued |
36 |
|
|
34 |
|
| |
Treasury stock, 7,055 and
6,983 common shares at cost |
(50,455 |
) |
|
(49,733 |
) |
| |
Additional paid-in
capital |
111,279 |
|
|
96,486 |
|
| |
Accumulated other
comprehensive loss |
(1,425 |
) |
|
(1,410 |
) |
| |
Retained earnings |
93,315 |
|
|
113,114 |
|
| Total
stockholders’ equity |
152,750 |
|
|
158,491 |
|
| Total
liabilities and stockholders’ equity |
$ |
394,755 |
|
|
$ |
378,011 |
|
| |
|
|
|
|
ZAGG INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS(Amounts in thousands, except per share
amounts)(Unaudited)
| |
For the Three Months Ended |
|
For the Six Months Ended |
| |
June 30, 2019 |
|
June 30, 2018 |
|
June 30, 2019 |
|
June 30, 2018 |
| |
|
|
|
|
|
|
|
|
Net sales |
$ |
106,796 |
|
|
$ |
118,565 |
|
|
$ |
185,546 |
|
|
$ |
230,631 |
|
| Cost of
sales |
69,037 |
|
|
80,908 |
|
|
123,965 |
|
|
155,381 |
|
| Gross
profit |
37,759 |
|
|
37,657 |
|
|
61,581 |
|
|
75,250 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
Advertising and marketing |
4,514 |
|
|
2,638 |
|
|
9,099 |
|
|
5,233 |
|
|
Selling, general and administrative |
34,491 |
|
|
27,035 |
|
|
66,075 |
|
|
51,342 |
|
|
Transaction costs |
374 |
|
|
18 |
|
|
621 |
|
|
18 |
|
|
Amortization of intangible assets |
4,599 |
|
|
2,773 |
|
|
9,065 |
|
|
5,545 |
|
| Total operating
expenses |
43,978 |
|
|
32,464 |
|
|
84,860 |
|
|
62,138 |
|
| |
|
|
|
|
|
|
|
| (Loss) income from
operations |
(6,219 |
) |
|
5,193 |
|
|
(23,279 |
) |
|
13,112 |
|
| |
|
|
|
|
|
|
|
| Other income
(expense): |
|
|
|
|
|
|
|
|
Interest expense |
(1,103 |
) |
|
(346 |
) |
|
(2,113 |
) |
|
(846 |
) |
|
Other income (expense) |
1,192 |
|
|
(681 |
) |
|
676 |
|
|
(186 |
) |
| Total other income
(expense) |
89 |
|
|
(1,027 |
) |
|
(1,437 |
) |
|
(1,032 |
) |
| |
|
|
|
|
|
|
|
| (Loss) income before
provision for income taxes |
(6,130 |
) |
|
4,166 |
|
|
(24,716 |
) |
|
12,080 |
|
| |
|
|
|
|
|
|
|
| Income tax benefit
(provision) |
794 |
|
|
(950 |
) |
|
4,956 |
|
|
(1,835 |
) |
| |
|
|
|
|
|
|
|
| Net (loss)
income |
$ |
(5,336 |
) |
|
$ |
3,216 |
|
|
$ |
(19,760 |
) |
|
$ |
10,245 |
|
| |
|
|
|
|
|
|
|
| (Loss) earnings per
share attributable to stockholders: |
|
|
|
|
|
|
|
| Basic (loss) earnings per
share |
$ |
(0.18 |
) |
|
$ |
0.11 |
|
|
$ |
(0.68 |
) |
|
$ |
0.36 |
|
| Diluted (loss) earnings per
share |
$ |
(0.18 |
) |
|
$ |
0.11 |
|
|
$ |
(0.68 |
) |
|
$ |
0.36 |
|
ZAGG INC AND
SUBSIDIARIESRECONCILIATION OF NON-U.S. GAAP
FINANCIAL INFORMATION TO U.S. GAAP(Amounts in
thousands)(Unaudited)
UNAUDITED SUPPLEMENTAL DATA
The following information are not financial measures prepared in
accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). In addition, they should
not be construed as an alternative to any other measures of
performance determined in accordance with U.S. GAAP, or as an
indicator of our operating performance, liquidity, or cash flows
generated by operating, investing, and financing activities as
there may be significant factors or trends that it fails to
address. We present this financial information because we believe
that these measures are helpful to some investors as a measure of
our operations. We caution investors that non-U.S. GAAP financial
information, by its nature, departs from traditional accounting
conventions; accordingly, its use can make it difficult to compare
our results with our results from other reporting periods and with
the results of other companies.
| |
|
|
|
|
|
|
|
|
ADJUSTED EBITDA RECONCILIATION |
Three Months Ended |
|
Six Months Ended |
|
|
June 30, 2019 |
|
June 30, 2018 |
|
June 30, 2019 |
|
June 30, 2018 |
|
| |
|
|
|
|
|
|
|
|
|
|
Net (loss) income in accordance with U.S.
GAAP |
$ |
(5,336 |
) |
|
$ |
3,216 |
|
$ |
(19,760 |
) |
|
$ |
10,245 |
|
| |
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
| a. |
Stock-based compensation
expense |
1,475 |
|
|
807 |
|
2,660 |
|
|
1,408 |
|
| b. |
Depreciation and
amortization |
6,199 |
|
|
4,200 |
|
12,256 |
|
|
9,230 |
|
| c. |
Other (income) expense,
net |
(89 |
) |
|
1,027 |
|
1,437 |
|
|
1,032 |
|
| d. |
Transaction costs |
374 |
|
|
18 |
|
621 |
|
|
18 |
|
| e. |
BRAVEN employee retention
bonus |
46 |
|
|
— |
|
93 |
|
|
— |
|
| f. |
Former CFO retention
bonus |
— |
|
|
— |
|
110 |
|
|
— |
|
| g. |
Inventory step-up amount in
connection with acquisition of 2018 and 2019 |
142 |
|
|
— |
|
573 |
|
|
— |
|
| h. |
Consulting fee to former
CEO |
— |
|
|
700 |
|
— |
|
|
700 |
|
| i |
Restructuring expenses |
407 |
|
|
— |
|
407 |
|
|
— |
|
| j |
Income tax (benefit)
provision |
(794 |
) |
|
950 |
|
(4,956 |
) |
|
1,835 |
|
| Total
Adjustments |
7,760 |
|
|
7,702 |
|
13,201 |
|
|
14,223 |
|
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
2,424 |
|
|
$ |
10,918 |
|
$ |
(6,559 |
) |
|
$ |
24,468 |
|
| |
|
|
|
|
|
|
|
|
|
ZAGG INC AND
SUBSIDIARIESRECONCILIATION OF NON-U.S. GAAP
FINANCIAL INFORMATION TO U.S. GAAP(Amounts in thousands,
except per share amounts)(Unaudited)
|
DILUTED OPERATING (LOSS) EARNINGS PER SHARE
RECONCILIATION |
Three Months Ended |
|
Six Months Ended |
|
June 30, 2019 |
|
June 30, 2018 |
|
June 30, 2019 |
|
June 30, 2018 |
| |
|
|
|
|
|
|
|
|
|
Net (loss) income in accordance with U.S.
GAAP |
$ |
(5,336 |
) |
|
$ |
3,216 |
|
$ |
(19,760 |
) |
|
$ |
10,245 |
| |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
| a. |
Amortization expense related
to 2018 and 2019 acquisitions |
2,047 |
|
|
— |
|
3,951 |
|
|
— |
| b. |
Transaction costs related to
2018 and 2019 acquisitions |
374 |
|
|
— |
|
621 |
|
|
— |
| c. |
Inventory step-up amortization
related to 2018 and 2019 acquisitions |
142 |
|
|
— |
|
573 |
|
|
— |
| d. |
BRAVEN employee retention
bonus |
46 |
|
|
— |
|
93 |
|
|
— |
| e. |
Restructuring expenses |
407 |
|
|
— |
|
407 |
|
|
— |
| f. |
Share-based compensation
issued as retention |
690 |
|
|
— |
|
690 |
|
|
— |
| Total
adjustments before tax |
3,706 |
|
|
— |
|
6,335 |
|
|
— |
|
|
Tax effect 1 |
(1,002 |
) |
|
— |
|
(1,713 |
) |
|
— |
| |
Adjustments, net of tax |
2,704 |
|
|
— |
|
4,622 |
|
|
— |
| Adjusted
net (loss) income |
$ |
(2,632 |
) |
|
$ |
3,216 |
|
$ |
(15,138 |
) |
|
$ |
10,245 |
| |
|
|
|
|
|
|
|
|
| Diluted shares
outstanding |
29,064 |
|
|
28,666 |
|
28,974 |
|
|
28,679 |
| Diluted
operating (loss) earnings per share |
$ |
(0.09 |
) |
|
$ |
0.11 |
|
$ |
(0.52 |
) |
|
$ |
0.36 |
1 Income tax effect calculated using the estimated 2019
statutory rate of 27.04%
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