Farmer Bros. Co. (NASDAQ: FARM) (the "Company") today reported
financial results for its first fiscal quarter ended September 30,
2018.
First Quarter Fiscal 2019 Highlights:
- Volume of green coffee processed and sold increased by 2.2
million pounds, reaching 25.4 million pounds, a 9.6% increase over
the prior year period;
- Gross profit increased $2.2 million to $48.2 million and gross
margin decreased 230 basis points to 32.7% over the prior year
period;
- Net loss was $(3.0) million compared to net income of $0.8
million in the prior year period; and
- Adjusted EBITDA was $11.0 million compared to $12.5 million in
the prior year period.*
(*Adjusted EBITDA, a non-GAAP financial measure, is reconciled
to its corresponding GAAP measure at the end of this press
release.)
“As we have entered our new fiscal year, our team has continued
to take important steps forward in executing our strategy and we
generated Adjusted EBITDA for the first quarter ahead of plan,”
said Mike Keown, President and CEO. “We have passed the one-year
mark since the closing of the Boyd’s acquisition and remain very
pleased with the integration of this business. We are gaining
traction in our DSD channel sales strategy and taking additional
steps to optimize our routes and branches while enhancing our
street sales teams. We continue to focus on leveraging the
investments we have made in our roasting facilities by adding new
customers and increasing business with existing customers. Looking
ahead, we remain excited about Farmer Brothers’ long-term growth
opportunities.”
First Quarter Fiscal 2019 Results:
Selected Financial Data
The selected financial data presented below under the captions
“Income statement data,” “Operating data” and “Other data”
summarizes certain performance measures for the three months ended
September 30, 2018 and 2017 (unaudited). Reported prior periods
have been retrospectively adjusted to reflect the impact of certain
changes in accounting principles and corrections to previously
issued financial statements adopted in the fourth quarter of fiscal
2018, and the adoption of new accounting standards in the three
months ended September 30, 2018 that required retrospective
application.
|
|
Three Months Ended September
30, |
|
|
2018 |
|
2017 |
(In thousands, except per share data) |
|
|
|
|
Income statement data: |
|
|
|
|
Net sales |
|
$ |
147,440 |
|
|
$ |
131,713 |
|
Gross margin |
|
32.7 |
% |
|
35.0 |
% |
(Loss) income from operations |
|
$ |
(2,078 |
) |
|
$ |
1,845 |
|
Net (loss) income |
|
$ |
(2,986 |
) |
|
$ |
841 |
|
Net (loss) income available to common stockholders per common
share—diluted |
|
$ |
(0.18 |
) |
|
$ |
0.05 |
|
|
|
|
|
|
Operating data: |
|
|
|
|
Coffee pounds |
|
25,449 |
|
|
23,215 |
|
EBITDA |
|
$ |
4,659 |
|
|
$ |
9,209 |
|
EBITDA Margin |
|
3.2 |
% |
|
7.0 |
% |
Adjusted EBITDA |
|
$ |
11,020 |
|
|
$ |
12,455 |
|
Adjusted EBITDA Margin |
|
7.5 |
% |
|
9.5 |
% |
|
|
|
|
|
Other data: |
|
|
|
|
Capital expenditures related to maintenance |
|
$ |
5,462 |
|
|
$ |
4,510 |
|
Total capital expenditures |
|
$ |
7,787 |
|
|
$ |
7,775 |
|
Depreciation and amortization expense |
|
$ |
7,728 |
|
|
$ |
7,253 |
|
|
|
|
|
|
|
|
|
|
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA
Margin are non-GAAP financial measures; a reconciliation of these
non-GAAP measures to their corresponding GAAP measures is included
at the end of this press release.
Volume of green coffee processed and sold increased 9.6% for the
quarter to 25.4 million pounds, with volume associated with the
Boyd business acquired in October 2017 contributing approximately
3.7 million pounds of this total volume.
In the first quarter of fiscal 2019, green coffee pounds
processed and sold through our DSD network were 8.9 million, or
34.9% of total green coffee pounds processed and sold, while direct
ship customers represented 16.3 million, or 64.1%, of total green
coffee pounds processed and sold. Distributor customers represented
0.3 million pounds, or 1.0%, of total green coffee pounds processed
and sold.
Net sales in the first quarter of fiscal 2019 were $147.4
million, an increase of $15.7 million, or 11.9%, over the prior
year period. This increase was driven by a $12.5 million increase
in net sales of roasted coffee products, a $2.2 million increase in
net sales of culinary products, a $1.2 million increase in net
sales of tea products, and a $0.7 million increase in net sales of
frozen liquid coffee, offset by a $(1.0) million decrease in net
sales of other beverages and a $(0.1) million decrease in net sales
of spice products. The addition of the Boyd business contributed
$20.5 million to net sales, offset by a $(4.8) million decline in
our base business driven largely by lower volume on a few large
direct ship customers and the impact of pricing to our cost plus
customers.
Gross profit in the first quarter of fiscal 2019 increased $2.2
million, or 4.7%, to $48.2 million from $46.1 million in the
prior year period, and gross margin decreased 230 basis points to
32.7% from 35.0% in the prior year period. The increase in gross
profit was primarily due to the addition of the Boyd business,
while the decrease in gross margin was primarily due to a lower
gross margin rate on the Boyd business, higher coffee brewing
equipment costs associated with increased installation activity
during the quarter and higher freight costs.
Operating expenses in the first quarter of fiscal 2019 increased
$6.1 million, or 13.7%, to $50.3 million, or 34.1% of net sales,
from $44.2 million, or 33.6% of net sales, in the prior year
period. The increase in operating expenses during the period was
primarily due to a $4.5 million increase in selling expenses and a
$4.3 million increase in restructuring and other transition
expenses, including $3.4 million in pension withdrawal liability
due to the Company's partial withdrawal from the Western Conference
of Teamsters Pension Plan (“WCTPP”) as a result of employment
actions taken by the Company in 2016 in connection with the
corporate relocation plan, and $1.1 million in DSD restructuring
plan expenses. The increase in operating expenses was partially
offset by a $(2.7) million decrease in general and administrative
expenses primarily due to a decline in acquisition and integration
costs compared to the prior year period of $1.4 million. The
increase in selling expenses during the first quarter of fiscal
2019 was primarily driven by the addition of the Boyd business
which added $4.3 million to selling expenses exclusive of related
depreciation and amortization expense, and an increase of $0.5
million in depreciation and amortization expense.
As a result of the foregoing factors, loss from operations in
the first quarter of fiscal 2019 was $(2.1) million, as compared to
income from operations of $1.8 million in the prior year
period.
Total other expense in the first quarter of fiscal 2019 was
$(2.2) million as compared to $(0.4) million in the prior year
period, primarily due to higher outstanding borrowings on the
revolving credit which resulted in higher interest expense, and net
losses on coffee-related derivative instruments. In the first
quarter of fiscal 2019, net losses on coffee-related derivative
instruments were $(1.1) million compared to net gains of
$0.1 million in the prior year period. Interest expense in the
three months ended September 30, 2018 was $2.9 million as compared
to $2.2 million in the prior year period.
Income tax benefit was $(1.3) million in the first quarter of
fiscal 2019 as compared to income tax expense of $0.6 million in
the prior year period. The decrease in income tax expense was
primarily a result of the change in net (loss) income.
As a result of the foregoing factors, net loss was $(3.0)
million in the first quarter of fiscal 2019 as compared to net
income of $0.8 million in the prior year period. Net loss
available to common stockholders was $(3.1) million, or $(0.18) per
common share available to common stockholders-diluted, in the first
quarter of fiscal 2019, compared to net income available to common
stockholders of $0.8 million, or $0.05 per common share
available to common stockholders-diluted, in the prior year
period.
Non-GAAP Financial Measures:
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA
Margin are non-GAAP financial measures; a reconciliation of these
non-GAAP measures to their corresponding GAAP measures is included
at the end of this press release.
Adjusted EBITDA was $11.0 million in the first quarter of fiscal
2019, as compared to $12.5 million in the prior year period, and
Adjusted EBITDA Margin was 7.5% in the first quarter of fiscal
2019, as compared to 9.5% in the prior year period.
About Farmer Bros. Co.
Founded in 1912, Farmer Bros. Co. is a national coffee roaster,
wholesaler and distributor of coffee, tea and culinary products.
The Company’s product lines include organic, Direct Trade and
sustainably-produced coffee. With a robust line of coffee, hot and
iced teas, cappuccino mixes, spices, and baking/biscuit mixes, the
Company delivers extensive beverage planning services and culinary
products to its U.S. based customers. The Company serves a wide
variety of customers, from small independent restaurants and
foodservice operators to large institutional buyers like restaurant
and convenience store chains, hotels, casinos, healthcare
facilities, and gourmet coffee houses, as well as grocery chains
with private brand coffee and consumer branded coffee and tea
products, and foodservice distributors.
Headquartered in Northlake, Texas, Farmer Bros. Co. generated
net sales of over $600 million in fiscal 2018 and has approximately
1,500 employees nationwide. The Company’s primary brands include
Farmer Brothers®, Artisan Collection by Farmer Brothers™,
Superior®, Metropolitan™, China Mist® and Boyds®.
Investor Conference Call
Mike Keown, President and CEO, and David G. Robson, Treasurer
and CFO, will host an audio-only investor conference call today,
November 7, 2018, at 5:00 p.m. Eastern time (4:00 p.m. Central
time) to review the Company’s financial results for the first
quarter ended September 30, 2018. The Company’s earnings press
release will be available on the Company’s website at
www.farmerbros.com under “Investor Relations.”
The call will be open to all interested investors through a live
audio web broadcast via the Internet at
https://edge.media-server.com/m6/p/vypdqxhu and at the Company’s
website www.farmerbros.com under “Investor Relations.” The
call also will be available to investors and analysts by dialing
Toll Free: 1-(844) 423-9890 or international: 1-(716)
247-5805. The passcode/ID is 3566786.
The audio-only webcast will be archived for at least 30 days on
the Investor Relations section of the Farmer Bros. Co. website, and
will be available approximately two hours after the end of the live
webcast.
Forward-Looking Statements
Certain statements contained in this press release are not based
on historical fact and are forward-looking statements within the
meaning of federal securities laws and regulations. These
statements are based on management's current expectations,
assumptions, estimates and observations of future events and
include any statements that do not directly relate to any
historical or current fact. These forward-looking statements can be
identified by the use of words like “anticipates,” “estimates,”
“projects,” “expects,” “plans,” “believes,” “intends,” “will,”
“could,” “assumes” and other words of similar meaning. Owing to the
uncertainties inherent in forward- looking statements, actual
results could differ materially from those set forth in
forward-looking statements. The Company intends these
forward-looking statements to speak only at the time of this press
release and does not undertake to update or revise these statements
as more information becomes available except as required under
federal securities laws and the rules and regulations of the
Securities and Exchange Commission (“SEC”). Factors that could
cause actual results to differ materially from those in
forward-looking statements include, but are not limited to, the
success of our corporate relocation plan, the timing and success of
implementation of our direct-store-delivery restructuring plan, our
success in consummating acquisitions and integrating acquired
businesses, the impact of capital improvement projects, the
adequacy and availability of capital resources to fund our existing
and planned business operations and our capital expenditure
requirements, the relative effectiveness of compensation-based
employee incentives in causing improvements in Company performance,
the capacity to meet the demands of the Company’s large national
account customers, the extent of execution of plans for the growth
of Company business and achievement of financial metrics related to
those plans, the success of the Company to retain and/or attract
qualified employees, the effect of the capital markets as well as
other external factors on stockholder value, fluctuations in
availability and cost of green coffee, competition,
organizational changes, the effectiveness of our hedging strategies
in reducing price risk, changes in consumer preferences, our
ability to provide sustainability in ways that do not materially
impair profitability, changes in the strength of the economy,
business conditions in the coffee industry and food industry in
general, the Company's continued success in attracting new
customers, variances from budgeted sales mix and growth rates,
weather and special or unusual events, as well as other risks
described in this press release and other factors described from
time to time in the Company's filings with the SEC. The results of
operations for the three months ended September 30, 2018 are not
necessarily indicative of the results that may be expected for any
future period.
FARMER
BROS. CO.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(In thousands, except share
and per share data)
|
|
Three Months Ended September 30, |
|
|
2018 |
|
2017 |
Net sales |
|
$ |
147,440 |
|
|
$ |
131,713 |
|
Cost of goods sold |
|
99,205 |
|
|
85,630 |
|
Gross profit |
|
48,235 |
|
|
46,083 |
|
Selling expenses |
|
37,310 |
|
|
32,856 |
|
General and
administrative expenses |
|
8,617 |
|
|
11,359 |
|
Restructuring and other
transition expenses |
|
4,467 |
|
|
120 |
|
Net gains from sale of
spice assets |
|
(252 |
) |
|
(150 |
) |
Net losses from sales
of other assets |
|
171 |
|
|
53 |
|
Operating expenses |
|
50,313 |
|
|
44,238 |
|
(Loss) income from
operations |
|
(2,078 |
) |
|
1,845 |
|
Other (expense)
income: |
|
|
|
|
Dividend
income |
|
— |
|
|
5 |
|
Interest
income |
|
— |
|
|
1 |
|
Interest
expense |
|
(2,852 |
) |
|
(2,168 |
) |
Other,
net |
|
657 |
|
|
1,750 |
|
Total
other expense |
|
(2,195 |
) |
|
(412 |
) |
(Loss) income before
taxes |
|
(4,273 |
) |
|
1,433 |
|
Income tax (benefit)
expense |
|
(1,287 |
) |
|
592 |
|
Net (loss) income |
|
$ |
(2,986 |
) |
|
$ |
841 |
|
Less: Cumulative
preferred dividends, undeclared and unpaid |
|
132 |
|
|
— |
|
Net (loss) income
available to common stockholders |
|
$ |
(3,118 |
) |
|
$ |
841 |
|
Net (loss) income
available to common stockholders per common share—basic |
|
$ |
(0.18 |
) |
|
$ |
0.05 |
|
Net (loss) income
available to common stockholders per common share—diluted |
|
$ |
(0.18 |
) |
|
$ |
0.05 |
|
Weighted average common
shares outstanding—basic |
|
16,886,718 |
|
|
16,699,822 |
|
Weighted average common
shares outstanding—diluted |
|
16,886,718 |
|
|
16,801,562 |
|
|
|
|
|
|
|
|
FARMER
BROS. CO.CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)(In thousands, except share and
per share data)
|
September 30,
2018 |
|
June 30, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
5,503 |
|
|
$ |
2,438 |
|
Restricted cash |
2,628 |
|
|
— |
|
Accounts receivable, net |
62,504 |
|
|
58,498 |
|
Inventories |
115,572 |
|
|
104,431 |
|
Income tax receivable |
322 |
|
|
305 |
|
Prepaid expenses |
7,615 |
|
|
7,842 |
|
Total current assets |
194,144 |
|
|
173,514 |
|
Property, plant and equipment, net |
191,138 |
|
|
186,589 |
|
Goodwill |
36,224 |
|
|
36,224 |
|
Intangible assets, net |
30,855 |
|
|
31,515 |
|
Other assets |
8,653 |
|
|
8,381 |
|
Deferred income taxes |
42,237 |
|
|
39,308 |
|
Total assets |
$ |
503,251 |
|
|
$ |
475,531 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
73,860 |
|
|
56,603 |
|
Accrued payroll expenses |
20,052 |
|
|
17,918 |
|
Short-term borrowings under revolving credit
facility |
101,807 |
|
|
89,787 |
|
Short-term obligations under capital leases |
150 |
|
|
190 |
|
Short-term derivative liabilities |
7,245 |
|
|
3,300 |
|
Other current liabilities |
9,848 |
|
|
10,659 |
|
Total current liabilities |
212,962 |
|
|
178,457 |
|
Accrued pension liabilities |
41,310 |
|
|
40,380 |
|
Accrued postretirement benefits |
18,976 |
|
|
20,473 |
|
Accrued workers’ compensation liabilities |
5,354 |
|
|
5,354 |
|
Other long-term liabilities |
2,061 |
|
|
1,812 |
|
Total liabilities |
$ |
280,663 |
|
|
$ |
246,476 |
|
Commitments and contingencies |
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock, $1.00 par value, 500,000 shares
authorized; Series A Convertible Participating Cumulative Perpetual
Preferred Stock, 21,000 shares authorized; 14,700 shares issued and
outstanding as of September 30, 2018 and June 30, 2018; liquidation
preference of $15,221 and $15,089 as of September 30, 2018 and June
30, 2018, respectively |
15 |
|
|
15 |
|
Common stock, $1.00 par value, 25,000,000 shares
authorized; 16,977,701 and 16,951,659 shares issued and outstanding
as of September 30, 2018 and June 30, 2018, respectively |
16,978 |
|
|
16,952 |
|
Additional paid-in capital |
57,227 |
|
|
55,965 |
|
Retained earnings |
217,189 |
|
|
220,307 |
|
Unearned ESOP shares |
(2,145 |
) |
|
(2,145 |
) |
Accumulated other comprehensive loss |
(66,676 |
) |
|
(62,039 |
) |
Total stockholders’ equity |
$ |
222,588 |
|
|
$ |
229,055 |
|
Total liabilities and stockholders’ equity |
$ |
503,251 |
|
|
$ |
475,531 |
|
|
|
|
|
|
|
|
|
FARMER BROS. CO. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(In thousands) |
|
Three Months Ended September 30, |
|
2018 |
|
2017 |
Cash flows from
operating activities: |
|
|
|
Net (loss) income |
$ |
(2,986 |
) |
|
$ |
841 |
|
Adjustments
to reconcile net (loss) income to net cash provided by operating
activities: |
|
|
Depreciation and amortization |
7,728 |
|
|
7,253 |
|
Provision
for doubtful accounts |
903 |
|
|
62 |
|
Restructuring and other transition expenses, net of payments |
3,712 |
|
|
(573 |
) |
Deferred
income taxes |
(1,334 |
) |
|
407 |
|
Net gains
from sales of spice assets and other assets |
(81 |
) |
|
(97 |
) |
ESOP and
share-based compensation expense |
963 |
|
|
806 |
|
Net
losses (gains) on derivative instruments and investments |
3,068 |
|
|
(968 |
) |
Change in
operating assets and liabilities: |
|
|
|
Accounts
receivable |
(4,658 |
) |
|
(470 |
) |
Inventories |
(11,062 |
) |
|
(10,393 |
) |
Income
tax receivable |
(17 |
) |
|
120 |
|
Derivative assets (liabilities), net |
(5,198 |
) |
|
(493 |
) |
Prepaid
expenses and other assets |
(44 |
) |
|
(133 |
) |
Accounts
payable |
13,049 |
|
|
10,222 |
|
Accrued
payroll expenses and other current liabilities |
(1,395 |
) |
|
1,550 |
|
Accrued
postretirement benefits |
(1,497 |
) |
|
(329 |
) |
Other
long-term liabilities |
(71 |
) |
|
(701 |
) |
Net cash provided by
operating activities |
$ |
1,080 |
|
|
$ |
7,104 |
|
Cash flows from
investing activities: |
|
|
|
Acquisition of businesses, net of cash acquired |
$ |
— |
|
|
$ |
(553 |
) |
Purchases
of property, plant and equipment |
(7,733 |
) |
|
(6,931 |
) |
Purchases
of assets for construction of new facility |
— |
|
|
(844 |
) |
Proceeds
from sales of property, plant and equipment |
53 |
|
|
74 |
|
Net cash used in
investing activities |
$ |
(7,680 |
) |
|
$ |
(8,254 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds
from revolving credit facility |
$ |
12,020 |
|
|
$ |
11,698 |
|
Repayments on revolving credit facility. |
— |
|
|
(9,249 |
) |
Payments
of capital lease obligations |
(53 |
) |
|
(243 |
) |
Proceeds
from stock option exercises |
326 |
|
|
— |
|
Net cash provided by
financing activities |
$ |
12,293 |
|
|
$ |
2,206 |
|
Net increase in cash,
cash equivalents, and restricted cash |
$ |
5,693 |
|
|
$ |
1,056 |
|
Cash, cash equivalents,
and restricted cash at beginning of period |
2,438 |
|
|
6,241 |
|
Cash, cash equivalents,
and restricted cash at end of period |
$ |
8,131 |
|
|
$ |
7,297 |
|
Reconciliation of cash and cash equivalents, and restricted
cash: |
|
|
|
Cash and cash
equivalents |
$ |
5,503 |
|
|
$ |
7,297 |
|
Restricted cash |
2,628 |
|
|
— |
|
Total
cash, cash equivalents, and restricted cash |
$ |
8,131 |
|
|
$ |
7,297 |
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
Net change in derivative
assets and liabilities included in other comprehensive loss, net of
tax |
$ |
(4,637 |
) |
|
$ |
(1,200 |
) |
Non-cash
additions to property, plant and equipment |
$ |
6,976 |
|
|
$ |
207 |
|
Non-cash
portion of earnout receivable recognized—spice assets sale |
$ |
252 |
|
|
$ |
150 |
|
Cumulative preferred dividends, undeclared and unpaid |
$ |
132 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
In addition to net (loss) income determined in accordance with
U.S. generally accepted accounting principles (“GAAP”), we use the
following non-GAAP financial measures in assessing our operating
performance:
“EBITDA” is defined as net (loss) income excluding the impact
of:
- income taxes;
- interest expense; and
- depreciation and amortization expense.
“EBITDA Margin” is defined as EBITDA expressed as a percentage
of net sales.
“Adjusted EBITDA” is defined as net (loss) income excluding the
impact of:
- income taxes;
- interest expense;
- (loss) income from short-term investments;
- depreciation and amortization expense;
- ESOP and share-based compensation expense;
- non-cash impairment losses;
- non-cash pension withdrawal expense;
- other similar non-cash expenses;
- restructuring and other transition expenses;
- net gains and losses from sales of assets; and
- acquisition and integration costs.
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA expressed
as a percentage of net sales.
Restructuring and other transition expenses are expenses that
are directly attributable to (i) the corporate relocation plan,
consisting primarily of employee retention and separation benefits,
pension withdrawal expense, facility-related costs and other
related costs such as travel, legal, consulting and other
professional services; and (ii) the DSD restructuring plan,
consisting primarily of severance, prorated bonuses for bonus
eligible employees, contractual termination payments and
outplacement services, and other related costs, including legal,
recruiting, consulting, other professional services, and
travel.
We believe these non-GAAP financial measures provide a useful
measure of the Company’s operating results, a meaningful comparison
with historical results and with the results of other companies,
and insight into the Company’s ongoing operating performance.
Further, management utilizes these measures, in addition to GAAP
measures, when evaluating and comparing the Company’s operating
performance against internal financial forecasts and budgets.
We believe that EBITDA facilitates operating
performance comparisons from period to period by isolating the
effects of certain items that vary from period to period without
any correlation to core operating performance or that vary widely
among similar companies. These potential differences may be caused
by variations in capital structures (affecting interest expense),
tax positions (such as the impact on periods or companies of
changes in effective tax rates or net operating losses) and the age
and book depreciation of facilities and equipment (affecting
relative depreciation expense). We also
present EBITDA and EBITDA Margin because (i) we believe
that these measures are frequently used by securities analysts,
investors and other interested parties to evaluate companies in our
industry, (ii) we believe that investors will find these measures
useful in assessing our ability to service or incur indebtedness,
and (iii) we use these measures internally as benchmarks to
compare our performance to that of our competitors.
EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA
Margin, as defined by us, may not be comparable to similarly titled
measures reported by other companies. We do not intend for non-GAAP
financial measures to be considered in isolation or as a substitute
for other measures prepared in accordance with GAAP.
Prior year periods set forth in the tables below have been
retrospectively adjusted to reflect the impact of certain changes
in accounting principles and corrections to previously issued
financial statements, and the adoption of new accounting standards
in the three months ended September 30, 2018 that required
retrospective application.
Set forth below is a reconciliation of reported net (loss)
income to EBITDA (unaudited):
|
|
Three Months Ended September
30, |
(In thousands) |
|
2018 |
|
2017 |
Net (loss) income, as reported |
|
$ |
(2,986 |
) |
|
$ |
841 |
|
Income tax (benefit) expense |
|
(1,287 |
) |
|
592 |
|
Interest expense(1) |
|
1,204 |
|
|
523 |
|
Depreciation and amortization expense |
|
7,728 |
|
|
7,253 |
|
EBITDA |
|
$ |
4,659 |
|
|
$ |
9,209 |
|
EBITDA Margin |
|
3.2 |
% |
|
7.0 |
% |
|
|
|
|
|
|
|
____________(1) Excludes interest expense of $1.6 million in
each of the three months ended September 30, 2018 and 2017
resulting from the adoption of ASU 2017-07.
Set forth below is a reconciliation of reported net (loss)
income to Adjusted EBITDA (unaudited):
|
|
Three Months Ended September
30, |
(In thousands) |
|
2018 |
|
2017 |
Net (loss) income, as reported |
|
$ |
(2,986 |
) |
|
$ |
841 |
|
Income tax (benefit) expense |
|
(1,287 |
) |
|
592 |
|
Interest expense(1) |
|
1,204 |
|
|
523 |
|
Loss from short-term investments |
|
— |
|
|
7 |
|
Depreciation and amortization expense |
|
7,728 |
|
|
7,253 |
|
ESOP and share-based compensation expense |
|
963 |
|
|
806 |
|
Restructuring and other transition expenses(2) |
|
4,467 |
|
|
120 |
|
Net gains from sale of spice assets |
|
(252 |
) |
|
(150 |
) |
Net losses from sales of other assets |
|
171 |
|
|
53 |
|
Acquisition and integration costs |
|
1,012 |
|
|
2,410 |
|
Adjusted EBITDA |
|
$ |
11,020 |
|
|
$ |
12,455 |
|
Adjusted EBITDA Margin |
|
7.5 |
% |
|
9.5 |
% |
|
|
|
|
|
|
|
____________(1) Excludes interest expense of $1.6 million in
each of the three months ended September 30, 2018 and 2017
resulting from the adoption of ASU 2017-07.(2) Includes $3.4
million, including interest, assessed by the Western Conference of
Teamsters Pension Trust in the three months ended September 30,
2018, representing the Company’s share of the WCTPP unfunded
benefits due to the Company’s partial withdrawal from the WCTPP as
a result of employment actions taken by the Company in 2016 in
connection with the corporate relocation plan.
Contact:Joele Frank, Wilkinson Brimmer
KatcherLeigh Parrish / Kaitlin Kikalo212-355-4449
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