Hydrofarm Holdings Group, Inc. (“Hydrofarm” or the “Company”)
(Nasdaq: HYFM), a leading independent manufacturer and distributor
of branded hydroponics equipment and supplies for controlled
environment agriculture (“CEA”), today announced financial results
for its first quarter ended March 31, 2022.
First Quarter 2022 Highlights vs. Prior
Year Period:
- Net sales remained flat at $111.4
million.
- Gross Profit decreased to $16.6
million compared to $23.2 million. Adjusted Gross Profit(1)(2) was
$22.3 million compared to $23.4 million.
- Net loss was ($23.3) million, or a
loss of ($0.52) per diluted share, compared to net income of $4.9
million, or $0.13 per diluted share. Adjusted Net Loss(1)(2) was
($7.8) million, or ($0.17) per diluted share, compared to Adjusted
Net Income(1) of $7.2 million, or $0.18 per diluted share.
- Adjusted EBITDA(1)(2) decreased to
$3.1 million compared to $9.9 million.
- The Company recorded a $3.2 million
inventory reserve during the quarter, which was not treated as an
adjustment.
Full Year 2022
Outlook:
- Net sales of approximately $480
million to $520 million.
- Adjusted EBITDA(1) of $46 million
to $54 million, or approximately 10% of net sales.(1) Adjusted
Gross Profit, Adjusted Gross Profit Margin, Adjusted Net (Loss)
Income, Adjusted SG&A, Adjusted SG&A as a percent of net
sales, and Adjusted EBITDA are non-GAAP measures. For
reconciliations of GAAP to non-GAAP measures see the
“Reconciliation of Non-GAAP Measures” accompanying the release.(2)
As a result of the $3.2 million inventory reserve, Adjusted Gross
Profit, Adjusted Net Income and Adjusted EBITDA were negatively
impacted.
Bill Toler, Chairman and Chief Executive Officer
of Hydrofarm, said, “Over the past year, our team has strengthened
our business through a number of initiatives, including our five
acquisitions, the expansion of our distribution and manufacturing
footprint, and the creation of new leadership roles.
While we remain optimistic about the health of our business and our
long-term potential, our ability to reap the benefits of our
actions has been impacted by the agricultural oversupply that has
hampered cannabis growing activity across the US and Canada. This
dynamic was apparent in our first quarter results.”
Mr. Toler added, “We believe these industry
challenges are transient, and we continue to take aggressive
actions to optimize our business through pricing and cost controls
that we believe will benefit our business over time.
Moreover, we are seeing bright spots in our IGE business, in our
commercial business, in newer legalized states, and in our peat
business. With a strong product portfolio and healthy balance
sheet, we remain well positioned to capture the tremendous
long-term growth opportunities in the CEA industry.”
First Quarter 2022 Financial
Results
Net sales in the first quarter of 2022 remained
flat at $111.4 million compared to the first quarter of 2021,
driven by an approximate 2.1% decrease in volume of products sold,
offset by an approximate 2.2% increase in price and mix of products
sold, and an approximate 0.1% decline from unfavorable foreign
exchange rates.
Gross profit decreased to $16.6 million, or
14.9% of sales, during the first quarter of 2022 and included $3.9
million of expenses related to acquisitions completed in 2021 and a
$3.2 million inventory reserve. Adjusted Gross Profit(1)(2) was
$22.3 million or 20.0% of net sales, compared to $23.4 million or
21.0% in the first quarter of 2021. Adjusted gross profit
margin(1)(2) was negatively impacted by a $3.2 million increase in
inventory reserves primarily related to a surplus of lighting
inventory. During the first quarter of 2022, we experienced higher
freight and labor costs, offset by pricing actions and favorable
sales mix of the Company’s proprietary brand
products.
Selling, general and administrative (“SG&A”)
expense was $43.0 million in the first quarter of 2022, or 38.6% of
net sales, compared to $16.8 million in the first quarter of 2021.
The increase in SG&A expense was primarily related to several
non-cash charges including amortization expense and other
acquisition-related costs, and distribution center relocation
expenses. Adjusted SG&A(1) increased to $19.2
million or 17.2% of net sales in the first quarter of 2022,
compared to $13.5 million or 12.1% of net sales in the prior year
period. The increase in Adjusted SG&A(1) primarily relates to
an increase in compensation costs, facility costs, and insurance
expenses. The added costs were largely the result of the five
acquisitions completed in 2021 as well as the Company’s preparation
for future growth.
Net loss was ($23.3) million, or ($0.52) per
diluted share, in the first quarter of 2022, compared to a net
income of $4.9 million, or $0.13 per diluted share in the first
quarter of 2021. Adjusted Net Loss(1)(2) was ($7.8 million), or
($0.17) per diluted share, in the first quarter of 2022, compared
to Adjusted Net Income(1) of $7.2 million, or $0.18 per diluted
share, in the first quarter of 2021.
Adjusted EBITDA(1)(2) was $3.1 million, or 2.8%
of net sales, for the first quarter of 2022, compared to $9.9
million, or 8.9% of net sales, in the first quarter of 2021. The
decrease in Adjusted EBITDA(1)(2) was primarily related to higher
Adjusted SG&A(1) expenses on relatively flat net sales as our
business has been impacted by agricultural oversupply, as well as
the $3.2 million inventory reserve mentioned
above.
Balance Sheet and Liquidity
As of March 31, 2022, the Company had
unrestricted cash and cash equivalents of approximately $12.2
million and approximately $99.7 million of available borrowing
capacity under its revolving credit facility. The Company also
carried a principal amount of debt outstanding of $124.7 million
under our Term Loan at the end of the quarter.
Full Year 2022 Outlook
Based on first quarter performance and recent
sales trends, the Company is providing an update to its outlook for
the full fiscal year 2022:
- Net sales of approximately $480
million to $520 million.
- Adjusted EBITDA(1) of $46 million
to $54 million, representing a range of approximately 9.6% to 10.4%
of net sales for the full fiscal year.
The Company’s 2022 outlook includes the
following updated assumptions:
- Sequential improvement from
negative organic growth in Q1 to positive organic growth in
Q4.
- Capital expenditures of
approximately $8.0 million to $10.0 million; and
- An estimated tax provision between
$0 and $3 million for the full year, excluding the large discrete
tax benefit of $8.5 million recognized in Q1 2022.
With respect to projected fiscal year 2022
Adjusted EBITDA, a quantitative reconciliation is not available
without unreasonable effort due to the variability, complexity and
low visibility with respect to certain items, including, but not
limited to, stock-based compensation and employer payroll taxes,
uncertainties caused by the global COVID-19 pandemic, changes to
the regulatory landscape, and certain potential future transaction
expenses, which are excluded from Adjusted EBITDA. The Company
expects the variability of these items to have a potentially
unpredictable, and potentially significant, impact on its future
GAAP financial results.
(1) Adjusted Gross Profit, Adjusted Gross Profit Margin,
Adjusted Net (Loss) Income, Adjusted SG&A, Adjusted SG&A as
a percent of net sales, and Adjusted EBITDA are non-GAAP measures.
For reconciliations of GAAP to non-GAAP measures see the
“Reconciliation of Non-GAAP Measures” accompanying the release.
(2) As a result of the $3.2 million inventory reserve, Adjusted
Gross Profit, Adjusted Net Income and Adjusted EBITDA were
negatively impacted.
Conference Call
The Company will host a conference call to
discuss financial results for the first quarter 2022 today at 4:30
p.m. Eastern Time. Bill Toler, Chairman and Chief Executive
Officer, and John Lindeman, Chief Financial Officer, will host the
call.
The conference call can be accessed live over
the phone by dialing 201-389-0879. A replay will be available after
the call until Tuesday, May 17, 2022 and can be accessed by dialing
412-317-6671. The passcode is 13728344. The conference call will
also be webcast live and archived on the corporate website at
www.hydrofarm.com, under the “Investors” section.
About Hydrofarm
Hydrofarm is a leading independent manufacturer
and distributor of branded hydroponics equipment and supplies for
controlled environment agriculture, including grow lights, climate
control solutions, growing media and nutrients, as well as a broad
portfolio of innovative and proprietary branded products. For over
40 years, Hydrofarm has helped growers make growing easier and more
productive. The Company’s mission is to empower growers, farmers
and cultivators with products that enable greater quality,
efficiency, consistency and speed in their grow projects.
Cautionary Note Regarding
Forward-Looking Statements
Statements contained in this press release,
other than statements of historical fact, which address activities,
events and developments that the Company expects or anticipates
will or may occur in the future, including, but not limited to,
information regarding the future economic performance and financial
condition of the Company, the plans and objectives of the Company’s
management, and the Company’s assumptions regarding such
performance and plans are “forward-looking statements” within the
meaning of the U.S. federal securities laws that are subject to
risks and uncertainties. These forward-looking statements generally
can be identified as statements that include phrases such as
“guidance,” “outlook,” “projected,” “believe,” “target,” “predict,”
“estimate,” “forecast,” “strategy,” “may,” “goal,” “expect,”
“anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,”
“should” or other similar words or phrases. Actual results could
differ materially from the forward-looking information in this
release due to a variety of factors, including, but not limited
to:
The ongoing COVID-19 pandemic could have a
material adverse effect on the Company’s business, results of
operation, financial condition and/or cash flows; Interruptions in
the Company's supply chain, whether due to COVID-19 or otherwise
could adversely impact expected sales growth and operations; The
highly competitive nature of the Company’s markets could adversely
affect its ability to maintain or grow revenues; Certain of the
Company’s products may be purchased for use in new or emerging
industries or segments, including the cannabis industry, and/or be
subject to varying, inconsistent, and rapidly changing laws,
regulations, administrative and enforcement approaches, and
consumer perceptions and, among other things, such laws,
regulations, approaches and perceptions may adversely impact the
market for the Company’s products; the market for the Company’s
products may be impacted by conditions impacting its customers,
including related crop prices and other factors impacting growers;
Compliance with environmental and other public health regulations
or changes in such regulations or regulatory enforcement priorities
could increase the Company’s costs of doing business or limit the
Company’s ability to market all of its products; Damage to the
Company’s reputation or the reputation of its products or products
it markets on behalf of third parties could have an adverse effect
on its business; If the Company is unable to effectively execute
its e-commerce business, its reputation and operating results may
be harmed; The Company’s operations may be impaired if its
information technology systems fail to perform adequately or if it
is the subject of a data breach or cyber-attack; The Company may
not be able to adequately protect its intellectual property and
other proprietary rights that are material to the Company’s
business; Acquisitions, other strategic alliances and investments
could result in operating and integration difficulties, dilution
and other harmful consequences that may adversely impact the
Company’s business and results of operations. Additional detailed
information concerning a number of the important factors that could
cause actual results to differ materially from the forward-looking
information contained in this release is readily available in the
Company’s annual, quarterly and other reports. The Company
disclaims any obligation to update developments of these risk
factors or to announce publicly any revision to any of the
forward-looking statements contained in this release, or to make
corrections to reflect future events or developments.
Contacts:Investor
ContactFitzhugh Taylor / ICRir@hydrofarm.com
Media ContactHydrofarm
MarketingLisa Gallagher, 513-505-2334, lgallagher@hydrofarm.com
Hydrofarm Holdings Group,
Inc.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(In thousands, except share
and per share amounts)
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net sales |
|
$ |
111,377 |
|
|
$ |
111,389 |
|
Cost of goods sold |
|
|
94,771 |
|
|
|
88,166 |
|
Gross profit |
|
|
16,606 |
|
|
|
23,223 |
|
Operating expenses: |
|
|
|
|
Selling, general and administrative |
|
|
43,003 |
|
|
|
16,841 |
|
(Loss) income from operations |
|
|
(26,397 |
) |
|
|
6,382 |
|
Interest expense |
|
|
(2,366 |
) |
|
|
(90 |
) |
Loss on debt extinguishment |
|
|
— |
|
|
|
(680 |
) |
Other (expense) income, net |
|
|
(102 |
) |
|
|
84 |
|
(Loss) income before tax |
|
|
(28,865 |
) |
|
|
5,696 |
|
Income tax benefit (expense) |
|
|
5,569 |
|
|
|
(756 |
) |
Net (loss) income |
|
$ |
(23,296 |
) |
|
$ |
4,940 |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share: |
|
|
|
|
Basic |
|
$ |
(0.52 |
) |
|
$ |
0.15 |
|
Diluted |
|
$ |
(0.52 |
) |
|
$ |
0.13 |
|
Weighted-average shares of common stock outstanding: |
|
|
|
|
Basic |
|
|
44,718,510 |
|
|
|
33,717,103 |
|
Diluted |
|
|
44,718,510 |
|
|
|
38,997,031 |
|
Hydrofarm Holdings Group,
Inc.CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(In thousands, except share and per
share amounts)
|
|
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
12,157 |
|
|
$ |
26,607 |
|
Restricted cash |
|
|
1,777 |
|
|
|
1,777 |
|
Accounts receivable, net |
|
|
45,319 |
|
|
|
41,484 |
|
Inventories |
|
|
189,996 |
|
|
|
189,134 |
|
Notes receivable |
|
|
475 |
|
|
|
622 |
|
Prepaid expenses and other current assets |
|
|
11,312 |
|
|
|
9,760 |
|
Total current assets |
|
|
261,036 |
|
|
|
269,384 |
|
Property and equipment,
net |
|
|
51,349 |
|
|
|
50,473 |
|
Operating lease right-of-use
assets |
|
|
54,566 |
|
|
|
45,245 |
|
Goodwill |
|
|
183,338 |
|
|
|
204,868 |
|
Intangible assets, net |
|
|
327,011 |
|
|
|
314,819 |
|
Other assets |
|
|
4,170 |
|
|
|
6,453 |
|
Total assets |
|
$ |
881,470 |
|
|
$ |
891,242 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
36,374 |
|
|
$ |
26,685 |
|
Accrued expenses and other current liabilities |
|
|
31,549 |
|
|
|
33,996 |
|
Deferred revenue |
|
|
10,887 |
|
|
|
18,273 |
|
Current portion of lease liabilities |
|
|
7,773 |
|
|
|
7,198 |
|
Current portion of long-term debt |
|
|
2,298 |
|
|
|
2,263 |
|
Total current liabilities |
|
|
88,881 |
|
|
|
88,415 |
|
Long-term lease
liabilities |
|
|
46,755 |
|
|
|
38,595 |
|
Long-term debt |
|
|
119,194 |
|
|
|
119,517 |
|
Long-term deferred tax
liabilities |
|
|
6,575 |
|
|
|
5,631 |
|
Other long-term
liabilities |
|
|
4,608 |
|
|
|
3,904 |
|
Total liabilities |
|
|
266,013 |
|
|
|
256,062 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders’
equity |
|
|
|
|
Common stock ($0.0001 par value; 300,000,000 shares authorized;
44,822,866 and 44,618,357 shares issued and outstanding at March
31, 2022 and December 31, 2021, respectively) |
|
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
|
778,463 |
|
|
|
777,074 |
|
Accumulated other comprehensive income (loss) |
|
|
802 |
|
|
|
(1,382 |
) |
Accumulated deficit |
|
|
(163,812 |
) |
|
|
(140,516 |
) |
Total stockholders’ equity |
|
|
615,457 |
|
|
|
635,180 |
|
Total liabilities and stockholders’ equity |
|
$ |
881,470 |
|
|
$ |
891,242 |
|
Hydrofarm Holdings Group,
Inc.RECONCILIATION OF NON-GAAP
MEASURES(In thousands, except share and per share
amounts) (Unaudited)
|
Three months ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
Adjusted Gross Profit: |
|
|
|
Gross Profit
(GAAP) |
$ |
16,606 |
|
|
$ |
23,223 |
|
Depreciation, depletion and amortization (9) |
|
1,709 |
|
|
|
214 |
|
Acquisition expenses (3) |
|
3,938 |
|
|
|
— |
|
Impairment, restructuring and other (2) |
|
9 |
|
|
|
— |
|
Adjusted Gross Profit
(Non-GAAP) |
$ |
22,262 |
|
|
$ |
23,437 |
|
Gross Profit as a percent of
net sales (Gross Profit Margin) |
|
14.9 |
% |
|
|
20.8 |
% |
Adjusted Gross Profit as a
percent of net sales (Adjusted Gross Profit Margin) |
|
20.0 |
% |
|
|
21.0 |
% |
|
Three months ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
Adjusted SG&A: |
|
|
|
Selling, general and
administrative ("SG&A") (GAAP) |
$ |
43,003 |
|
|
$ |
16,841 |
|
Depreciation, depletion and amortization (9) |
|
15,232 |
|
|
|
1,377 |
|
Acquisition expenses (3) |
|
1,048 |
|
|
|
659 |
|
Distribution center exit costs and other (6) |
|
1,086 |
|
|
|
— |
|
Impairment, restructuring and other (2) |
|
3,384 |
|
|
|
15 |
|
Stock-based compensation (4) |
|
3,076 |
|
|
|
1,258 |
|
Adjusted SG&A
(Non-GAAP) |
$ |
19,177 |
|
|
$ |
13,532 |
|
SG&A as a percent of net
sales |
|
38.6 |
% |
|
|
15.1 |
% |
Adjusted SG&A as a percent
of net sales |
|
17.2 |
% |
|
|
12.1 |
% |
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
Adjusted EBITDA: |
|
|
|
|
Net (loss) income
(GAAP) |
|
$ |
(23,296 |
) |
|
$ |
4,940 |
|
Interest expense (1) |
|
|
2,366 |
|
|
|
90 |
|
Income tax (benefit) expense |
|
|
(5,569 |
) |
|
|
756 |
|
Distribution center exit costs and other (6) |
|
|
1,086 |
|
|
|
— |
|
Depreciation, depletion and amortization (9) |
|
|
16,941 |
|
|
|
1,591 |
|
Impairment, restructuring and other (2) |
|
|
3,393 |
|
|
|
15 |
|
Acquisition expenses (3) |
|
|
4,986 |
|
|
|
659 |
|
Other expense (income), net |
|
|
102 |
|
|
|
(84 |
) |
Stock-based compensation (4) |
|
|
3,076 |
|
|
|
1,258 |
|
Loss on debt extinguishment (5) |
|
|
— |
|
|
|
680 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
3,085 |
|
|
$ |
9,905 |
|
Net (loss) income as a percent
of net sales |
|
|
(20.9) |
% |
|
|
4.4 |
% |
Adjusted EBITDA as a percent
of net sales |
|
|
2.8 |
% |
|
|
8.9 |
% |
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
Adjusted Net (loss) income: |
|
|
|
|
Net (loss) income
(GAAP) |
|
$ |
(23,296 |
) |
|
$ |
4,940 |
|
Impairment, restructuring and other (2) |
|
|
3,393 |
|
|
|
15 |
|
Acquisition expenses (3) |
|
|
4,986 |
|
|
|
659 |
|
Stock-based compensation (4) |
|
|
3,076 |
|
|
|
1,258 |
|
Loss on debt extinguishment (5) |
|
|
— |
|
|
|
680 |
|
Distribution center exit costs and other (6) |
|
|
1,086 |
|
|
|
— |
|
Depreciation, depletion and amortization related to acquisitions
(9) |
|
|
15,146 |
|
|
|
— |
|
Income tax effect of adjustments (7) |
|
|
(3,599 |
) |
|
|
(340 |
) |
Income tax benefit relating to acquisitions (8) |
|
|
(8,543 |
) |
|
|
— |
|
Adjusted Net (loss)
income (Non-GAAP) |
|
$ |
(7,751 |
) |
|
$ |
7,212 |
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Reconciliation of
Adjusted EPS: |
|
|
|
|
Net (loss) income per share ("EPS") - Diluted
(GAAP): |
|
$ |
(0.52 |
) |
|
$ |
0.13 |
|
Impact of adjustments to Net (loss) income (above) |
|
|
0.35 |
|
|
|
0.05 |
|
Adjusted Net (loss) income per share - Diluted
(Non-GAAP): |
|
$ |
(0.17 |
) |
|
$ |
0.18 |
|
|
|
|
|
|
Diluted weighted-average shares outstanding: |
|
|
44,718,510 |
|
|
|
38,997,031 |
|
Notes to reconciliations presented above (Adjusted
EBITDA, Adjusted Gross Profit, Adjusted SG&A, Adjusted Net
(loss) income, and Adjusted Net (loss) income per share -
Diluted):
- Reflects the adjustment to eliminate the historical interest
expense for the periods presented.
- Reflects the elimination of the impairment, restructuring and
other for the periods presented. During the quarter ended March 31,
2022, impairment primary related to a note receivable that
originated in 2019 associated with a third party independent
processor serving the CBD market.
- For the quarter ended March 31, 2022, this includes non-cash
purchase accounting inventory adjustments for House and Garden,
Aurora, Greenstar and Innovative Growers Equipment $3.9 million,
the elimination of acquisition and integration consulting,
transaction services and legal fees incurred for the completed
Heavy 16, House and Garden, Aurora, Greenstar, and Innovative
Growers Equipment acquisitions and certain potential acquisitions
of $2.6 million, partially offset by the change in fair value of
contingent consideration for Aurora of ($1.6 million).
- Reflects the elimination of the stock-based compensation and
related employer payroll taxes on stock-based compensation for the
periods presented.
- Reflects the elimination of one-time charges for loss on debt
extinguishment.
- Reflects the elimination of charges for distribution center
exit and relocation costs.
- Reflects the tax effect related with adjustments to net (loss)
income at the normalized tax rate of 13%, which reflects an
appropriate tax rate based on the nature of these adjustments.
- Discrete tax (benefit) resulting from a reduction in the
Company's valuation allowance against deferred tax assets due to
the allocation of assets acquired and adjusting provisional amounts
from business combinations.
- Depreciation, depletion and amortization increased
significantly over the prior year due primarily to several
acquisition related purchase-accounting adjustments impacting the
quarter ended March 31, 2022. For purposes of computing adjusted
net (loss) income for the quarter ended March 31, 2022, the Company
is including the impacts from 2021 acquisitions for comparability
to the prior year, including (i) amortization relating to 2021
acquisitions of $7.6 million, (ii) amortization expense of $5.9
million related to adjustments to the preliminary allocation of
useful lives for intangibles assets for 2021 acquisitions, and
(iii) depreciation relating to 2021 acquisitions of $1.6
million.
Non-GAAP Financial Measures
We report our financial results in accordance
with generally accepted accounting principles in the U.S. (“GAAP”).
Management believes that certain non-GAAP financial measures
provide investors with additional useful information in evaluating
our performance and that excluding certain items that may vary
substantially in frequency and magnitude period-to-period from net
(loss) income provides useful supplemental measures that assist in
evaluating our ability to generate earnings and to more readily
compare these metrics between past and future periods. These
non-GAAP financial measures may be different than similarly titled
measures used by other companies.
To supplement our condensed consolidated
financial statements which are prepared in accordance with GAAP, we
use "Adjusted EBITDA", "Adjusted Gross Profit", "Adjusted
SG&A", "Adjusted Net (loss) income", and "Adjusted Net (loss)
income per diluted share" which are non-GAAP financial measures.
Our non-GAAP financial measures should not be considered in
isolation from, or as substitutes for, financial information
prepared in accordance with GAAP. There are several limitations
related to the use of our non-GAAP financial measures as compared
to the closest comparable GAAP measures. Some of these limitations
include:
We define Adjusted EBITDA as
net (loss) income excluding interest expense, income taxes,
depreciation, depletion, and amortization, share-based
compensation, employer payroll taxes on share-based compensation
and other non-cash, unusual and/or infrequent costs (i.e.,
impairment, restructuring and other expenses, acquisition-related
expenses, distribution center exit costs, loss on debt
extinguishment and other income, net), which we do not consider in
our evaluation of ongoing operating performance.
We define Adjusted EBITDA
as a percent of net sales as adjusted EBITDA as
defined above divided by net sales realized in the respective
period.
We define Adjusted Gross Profit
as gross profit excluding depreciation, depletion, and
amortization, and other non-cash, unusual and/or infrequent costs
(i.e., impairment, restructuring and other expenses, and
acquisition-related expenses), which we do not consider in our
evaluation of ongoing operating performance.
We define Adjusted SG&A as
SG&A excluding depreciation, depletion, and amortization, and
other non-cash, unusual and/or infrequent costs (i.e., impairment,
restructuring and other expenses, acquisition-related expenses,
share-based compensation, employer payroll taxes on share-based
compensation, and distribution center exit costs), which we do not
consider in our evaluation of ongoing operating performance.
We define Adjusted Net (loss)
income as net (loss) income excluding adjustments to
stock-based compensation and employer payroll taxes on stock-based
compensation, and certain other non-cash, unusual and/or infrequent
costs including those relating to our five acquisitions in 2021
(i.e., Depreciation, depletion and amortization related to
acquisitions, impairment, restructuring and other expenses,
acquisition-related expenses, loss on debt extinguishment, and
distribution center exit costs), which we do not consider in our
evaluation of ongoing operating performance, and the income tax
impact resulting from the above adjustments to net (loss)
income.
We define Adjusted Net (loss) income per
share - Diluted as adjusted net (loss) income as defined
above divided by the weighted average diluted shares
outstanding.
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