SMTC Corporation (Nasdaq:SMTX), a global electronics manufacturing
services provider and winners of Frost & Sullivan’s 2019 Best
Practices Award for Customer Value Leadership in the Electronics
Manufacturing Services Industry, today announced first quarter 2020
results.
Business Highlights
- First quarter 2020 revenue of $95.1 million represents a 5.4%
sequential increase
- Stable customer demand in nearly all markets served
- Added four new customers in the first quarter
- Awarded new programs from new and existing customers through
May that could generate in excess of $57 million of revenue over
the life of those programs
- All SMTC facilities currently remain in operation and in
compliance with applicable COVID-19 health and safety measures
- As of March 29, 2020, SMTC had additional borrowing capacity of
$31.2 million under its asset-based lending credit facility
- Q2 Revenue and Adjusted EBITDA are expected to range between
$96 million to $99 million and $5.7 million and $6.4 million,
respectively, exclusive of $1.2 million of COVID-19 related
expenditures
$s in
thousands |
Q1 2020 |
Q4 2019 |
Change |
Q1 2019 |
Change |
Revenue |
$95.1 |
|
$90.2 |
|
5.4% |
|
$102.6 |
|
(7.3%) |
|
GAAP |
|
|
|
|
|
Gross Profit |
$9.6 |
|
$10.5 |
|
(8.1%) |
|
$8.6 |
|
11.8% |
|
Gross Profit
Percentage |
|
10.1% |
|
|
11.6% |
|
|
|
8.4% |
|
|
Net Income (Loss) |
$0.8 |
|
$1.0 |
|
(22.2%) |
|
$1.2 |
|
(36.0%) |
|
EPS |
$0.03 |
|
$0.03 |
|
0.0% |
|
$0.05 |
|
(46.4%) |
|
Non-GAAP |
|
|
|
|
|
Adjusted Gross Profit |
$11.7 |
|
$12.2 |
|
(4.0%) |
|
$10.5 |
|
11.5% |
|
Adjusted Gross Profit Percentage |
|
12.3% |
|
|
13.5% |
|
|
|
10.2% |
|
|
Adjusted Net Income |
$2.2 |
|
$2.9 |
|
(23.5%) |
|
$0.7 |
|
215.3% |
|
Adjusted EPS |
$0.08 |
|
$0.10 |
|
(20.0%) |
|
$0.03 |
|
163.9% |
|
Adjusted EBITDA |
$6.2 |
|
$7.0 |
|
(10.7%) |
|
$5.5 |
|
13.5% |
|
Adjusted EBITDA Percentage |
|
6.5% |
|
|
7.7% |
|
|
|
5.3% |
|
|
Net Debt |
$83.6 |
|
$82.1 |
|
1.8% |
|
|
95.9 |
|
|
Note: Adjusted Gross Profit, Adjusted Gross Profit Percentage,
Adjusted Net Income, Adjusted Earnings Per Common Share (Adjusted
EPS), Adjusted EBITDA, Adjusted EBITDA Percentage, and Net Debt
(each as defined below) are non-GAAP measures. Please refer to the
section below labeled “Non-GAAP Information” and the various
reconciliations to the applicable most directly comparable GAAP
measures shown below in this press release.
Management Commentary
“We experienced stable demand in the first quarter from our
customers in nearly all of the markets we serve. The sequentially
higher first quarter revenue due primarily to revenue increases
from our test and measurement, retail and payment systems, and
avionics, aerospace and defense customers,” said Ed Smith, SMTC’s
President and Chief Executive Officer.
Sequential revenue growth by industry sector is noted in the
table below:
Industry Sector |
|
|
|
|
|
|
(Dollars in Millions) |
Q1 2020 |
Q4 2019 |
Change |
Test and Measurement |
$29.4 |
30.9% |
|
$28.0 |
31.0% |
|
$1.40 |
|
5.0% |
|
Industrial, Power and Clean Technology |
$18.9 |
19.8% |
|
$19.1 |
21.2% |
|
($0.20) |
|
(1.0%) |
|
Retail and Payment Systems |
$12.3 |
13.0% |
|
$10.6 |
11.7% |
|
$1.70 |
|
16.0% |
|
Medical |
$11.3 |
11.9% |
|
$11.3 |
12.5% |
|
$0.00 |
|
0.0% |
|
Avionics, Aerospace and Defense |
$10.4 |
10.9% |
|
$7.7 |
8.5% |
|
$2.70 |
|
35.1% |
|
Telecom, Networking and Communications |
$7.5 |
7.9% |
|
$8.8 |
9.7% |
|
($1.30) |
|
(14.8%) |
|
Semiconductors |
$5.3 |
5.6% |
|
$4.8 |
5.3% |
|
$0.50 |
|
10.4% |
|
Total |
$95.1 |
100.0% |
|
$90.2 |
100.0% |
|
$4.80 |
|
5.4% |
|
|
|
|
|
|
|
|
“At $95.1 million, our first quarter sales were in-line with our
forecasts, and bookings continued to show strength with further
expansion of our customer base. We were awarded multi-year programs
from four new customers plus new programs from five existing
customers in the first quarter that have the potential to generate
in excess of $50 million of revenue over the life of those
programs, including wins in the avionics, aerospace and defense
markets,” said Ed Smith. “We are excited that our new business
pipeline continues to grow with an additional $7 million in new
programs awarded to us in April and May, bringing the total of new
orders received in 2020 to $57 million. With these new program
awards, we expect the first half of 2020 will involve making
incremental investments in our program management teams, production
certifications and start-up phase costs to support the launch of
new products before they reach volume production later this year
and into 2021,” added Smith.
“In order to meet our customers’ delivery requirements, we
incurred COVID-19 related expenses in the first quarter of
approximately $0.2 million. We also expect to incur an
additional $1.2 million of COVID-19 related expenses in the second
quarter. These additional expenses are primarily due to incremental
logistics costs associated with expediting inventory purchases from
existing and new sources, and labor and production inefficiencies
and retention of temporary replacement labor to address workplace
absenteeism due to illness, potential COVID-19 exposure or personal
commitments. We are currently taking steps to limit our
expenses, including putting a pause on all non-essential new hiring
and new programs, and reducing our second quarter capital
expenditures,” continued Smith.
“To meet the demands of our customers in industries deemed
essential, including defense, medical devices, telecom
infrastructure, and test and measurement systems, all of our
facilities currently remain open and are operating in accordance
with applicable health and safety regulations. The wellness and
safety of our employees remain a top priority for SMTC. We have
instructed those employees at higher risk of COVID-19 to stay home
and have directed all non-essential employees to work remotely. For
those employees who continue to work at our facilities, we have
instituted programs of temperature metering, intensive cleaning and
disinfection, social distancing and we are prohibiting visitors to
our sites. We are also carefully monitoring the potential impact of
the COVID-19 pandemic, including by proactively coordinating with
our customers and key suppliers,” said Smith.
For the three months ended March 30, 2020, cash provided by
operations was $2.9m million and capital expenditures were $0.9
million. As of March 30, 2020, SMTC had $31.2 million
available for borrowing under its asset-based lending facility.
Outlook
“While we believe we have been successful so far in mitigating
the impacts of the COVID-19 pandemic and are encouraged by our
continued success in winning new business, we also recognize the
potential for additional negative impacts of the COVID-19 pandemic
on our business, such as changes in customer demand, supply chain
or product build-shipment interruptions, new or changing government
regulations, impacts on our employees or our manufacturing
facilities and impacts on the global economy. Thus, we believe it
is prudent at this time to withdraw the full year 2020 guidance,
initially provided on September 19, 2019 and reaffirmed on March
12, 2020, until such time that visibility returns to pre-COVID-19
levels,” Smith added.
Based on the Company’s current demand and supply chain
visibility, and assuming its facilities continue to operate at
currently planned levels, SMTC expects the following for the second
quarter 2020:
- Revenue to range between $96 million to $99 million
- Adjusted EBITDA to range between $5.7 million and $6.4 million,
exclusive of $1.2 million of COVID-19 related expenditures
Financial Results Conference Call
SMTC will host a conference call which will start at 8:30 am
Eastern Time on Thursday, May 7, 2020 to discuss its financial
results. The conference call can be accessed by visiting the
Investor Relations section of SMTC’s web site on the Investor
Relations Calendar
page at https://www.smtc.com/investors/news-events/ir-calendar or
dialing 1-844-369-8770 (for U.S. and Canadian participants) or
1-862-298-0840 (for participants outside of the U.S.) ten minutes
prior to the start of the call and requesting to join the SMTC
Corporation’s First Quarter Results Conference Call.
The conference call will be available for rebroadcast from the
Investor Relations section of SMTC’s web site on the Investor
Relations Calendar page.
Non-GAAP information
Adjusted Gross Profit, Adjusted Gross Profit Percentage,
Adjusted Net Income, Adjusted Earnings Per Common Share (Adjusted
EPS), Adjusted EBITDA, Adjusted EBITDA Percentage, and Net Debt are
non-GAAP measures and are referred to herein as “Non-GAAP Financial
Measures.” Adjusted Gross Profit is computed as gross profit
excluding amortization of intangible assets and unrealized foreign
exchange gains or losses on unsettled forward foreign exchange
contracts. Adjusted Gross Profit Percentage is computed as Adjusted
Gross Profit divided by revenue. Adjusted Net Income is computed as
net income (loss) before amortization of intangible assets,
unrealized foreign exchange gains and losses on unsettled forward
foreign exchange contracts, restructuring charges, stock-based
compensation, fair value adjustment of warrant liability, merger
and acquisition related expenses and fair value adjustment to
contingent consideration. Adjusted EPS is computed as Adjusted Net
Income divided by Diluted Weighted Average Shares Outstanding.
Adjusted EBITDA is computed as net income (loss) before interest,
taxes, depreciation and amortization and adjusted to exclude
restructuring charges, stock-based compensation, fair value
adjustment of warrant liability, merger and acquisition related
expenses, fair value adjustment to contingent consideration and
unrealized foreign exchange gains and losses on unsettled forward
foreign exchange contracts. Adjusted EBITDA Percentage is computed
as Adjusted EBITDA divided by revenue. Net Debt is computed as
Total debt minus cash. Reconciliations of Adjusted Gross Profit to
gross profit, Adjusted Gross Profit Percentage to gross profit
percentage, Adjusted Net Income to net income (loss), Net Debt to
total debt, Adjusted EBITDA to net income (loss), and Adjusted
EBITDA Percentage to net income (loss) percentage are each included
in this press release below. Management believes that these
Non-GAAP Financial Measures, when used in conjunction with GAAP
financial measures, provide useful information about operating
results, enhance the overall understanding of past financial
performance and future prospects, and allow for greater
transparency with respect to the key metrics SMTC uses in its
financial and operational decision making. These Non-GAAP Financial
Measures are also frequently used by analysts, investors and other
interested parties to evaluate companies in SMTC’s industry. The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP, and should not be construed as an inference that SMTC’s
future results will be unaffected by any items adjusted for in
these Non-GAAP Financial Measures. In evaluating these non-GAAP
measures, you should be aware that in the future SMTC may incur
expenses that are the same as or similar to some of those adjusted
in the presentation below. The Non-GAAP Financial Measures that
SMTC uses are not necessarily comparable to similarly titled
measures used by other companies due to different methods of
calculation.
Forward-Looking Statements
The statements contained in this release that are not purely
historical are forward-looking statements, which involve risk and
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. These
statements may be identified by their use of forward looking
terminology such as “anticipates,” “believes,” “can,”
“continue,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “should,” or “will” or the
negative of these terms or other and similar words, and include,
but are not limited to, statements regarding stability of customer
demand, SMTC’s expected financial results in the second quarter of
2020, including revenue, adjusted EBITDA, as well as the
anticipated revenue from specific new programs, SMTC’s expected
investments in program management teams, production certifications
and new customer-program start-up costs and COVID-19 related
expenses in the second quarter, the anticipated impact of the
COVID-19 pandemic, including SMTC’s health and safety measures at
its facilities, its ability to meet customers’ production
requirements, and its ability to continue operations in accordance
with applicable regulations, and access to additional funding
under its credit facilities. For these statements, SMTC claims
the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
Risks and uncertainties that may cause future results to differ
from forward looking statements include the effect of the expanded
outbreak of the COVID-19 pandemic on the economy generally and on
SMTC, its operations, fluctuations in demand for customers’
products and changes in customers’ product sources, disruptions to
the supply chain, availability of labor resources, and delivery
logistics, component shortages, availability of credit or lending
facilities, challenges of managing quickly expanding operations,
competition in the electronics manufacturing
services industry, changes in regulations and guidance from
federal, state and local governments and public health officials,
and others risks and uncertainties discussed in SMTC’s most recent
filings with the Securities and Exchange Commission. The
forward-looking statements contained in this release are made as of
the date hereof and SMTC assumes no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ materially from those projected in the
forward-looking statements.
About SMTC
SMTC Corporation was founded in 1985 and acquired MC Assembly
Holdings, Inc. in November 2018. SMTC has more than 50
manufacturing and assembly lines in the United States and Mexico
which creates a powerful low-to-medium volume, high-mix, end-to-end
global electronics manufacturing services (EMS) provider. With
local support and expanded manufacturing capabilities globally,
including fully integrated contract manufacturing services with a
focus on global original equipment manufacturers and emerging
technology companies, including those in the Avionics, Aerospace of
Defense, Industrial, Power and Clean Technology, Medical and
Safety, Retail and Payment Systems, Semiconductors and Telecom,
Networking and Communications, and Test and Measurement industries.
As a mid-size provider of end-to-end EMS, SMTC provides printed
circuit boards assemblies production, systems integration and
comprehensive testing services, enclosure fabrication, as well as
product design, and sustaining engineering and supply chain
management services. SMTC services extend over the entire
electronic product life cycle from the development and introduction
of new products through to the growth, maturity and end-of-life
phases. For further information on SMTC Corporation, please visit
our website at www.smtc.com.
Consolidated Statements of Operations and Comprehensive
Income |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars, except number of shares
and per share amounts) |
March 29, 2020 |
|
March 31, 2019 |
|
December 29, 2019 |
|
|
|
|
|
|
|
Revenue |
|
$ |
95,138 |
|
|
$ |
102,649 |
|
|
$ |
90,244 |
|
Cost of
sales |
|
|
85,499 |
|
|
|
94,025 |
|
|
|
79,750 |
|
Gross profit |
|
|
9,639 |
|
|
|
8,624 |
|
|
|
10,494 |
|
Selling, general and
administrative expenses |
|
|
7,219 |
|
|
|
6,799 |
|
|
|
7,132 |
|
Gain on Contingent
Consideration |
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
Restructuring charges |
|
|
(221 |
) |
|
|
624 |
|
|
|
(669 |
) |
|
|
|
|
|
|
|
Operating earnings |
|
|
2,641 |
|
|
|
4,251 |
|
|
|
4,031 |
|
Change in fair value of
warrant liability |
|
|
(517 |
) |
|
|
(101 |
) |
|
|
640 |
|
Interest expense |
|
|
2,093 |
|
|
|
2,870 |
|
|
|
2,213 |
|
Net income before income
taxes |
|
|
1,065 |
|
|
|
1,482 |
|
|
|
1,178 |
|
Income tax expense
(recovery) |
|
|
|
|
|
|
Current |
|
|
275 |
|
|
|
279 |
|
|
|
356 |
|
Deferred |
|
|
15 |
|
|
|
(8 |
) |
|
|
(174 |
) |
|
|
|
290 |
|
|
|
271 |
|
|
|
182 |
|
Net
income and comprehensive income |
|
$ |
775 |
|
|
$ |
1,211 |
|
|
$ |
996 |
|
|
|
|
|
|
|
|
Basic income per share |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
0.04 |
|
Diluted income per share |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding |
|
|
|
|
|
|
Basic |
|
|
28,195,300 |
|
|
|
23,248,918 |
|
|
|
28,117,372 |
|
Diluted |
|
|
29,228,403 |
|
|
|
24,465,435 |
|
|
|
29,402,054 |
|
Consolidated Balance
Sheets |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
(Expressed in thousands of U.S. dollars) |
|
|
March 29, 2020 |
|
December 29, 2019 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash |
|
|
$ |
1,354 |
|
|
$ |
1,368 |
|
Accounts receivable - net |
|
|
|
70,613 |
|
|
|
69,919 |
|
Unbilled contract assets |
|
|
|
28,779 |
|
|
|
26,271 |
|
Inventories - net |
|
|
|
43,321 |
|
|
|
47,826 |
|
Prepaid expenses and other
assets |
|
|
|
6,393 |
|
|
|
7,044 |
|
Income
taxes receivable |
|
|
|
160 |
|
|
|
- |
|
|
|
|
|
150,620 |
|
|
|
152,428 |
|
Property, plant and equipment
- net |
|
|
|
24,410 |
|
|
|
25,310 |
|
Operating lease right of use
assets - net |
|
|
|
6,588 |
|
|
|
3,330 |
|
Goodwill |
|
|
|
18,165 |
|
|
|
18,165 |
|
Intangible assets - net |
|
|
|
11,229 |
|
|
|
12,747 |
|
Deferred financing costs -
net |
|
|
|
804 |
|
|
|
859 |
|
Deferred income taxes - net |
|
|
|
525 |
|
|
|
540 |
|
Total
assets |
|
|
$ |
212,341 |
|
|
$ |
213,379 |
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Revolving credit facility |
|
|
|
33,340 |
|
|
|
34,701 |
|
Accounts payable |
|
|
|
67,736 |
|
|
|
74,126 |
|
Accrued liabilities |
|
|
|
14,702 |
|
|
|
11,164 |
|
Warrant liability |
|
|
|
1,213 |
|
|
|
1,730 |
|
Restructuring liability |
|
|
|
887 |
|
|
|
1,597 |
|
Derivative liabilities |
|
|
|
512 |
|
|
|
- |
|
Income taxes payable |
|
|
|
276 |
|
|
|
157 |
|
Current portion of long-term
debt |
|
|
|
1,562 |
|
|
|
1,250 |
|
Current portion of operating
lease obligations |
|
|
|
1,566 |
|
|
|
1,128 |
|
Current
portion of finance lease obligations |
|
|
|
1,166 |
|
|
|
1,226 |
|
|
|
|
|
122,960 |
|
|
|
127,079 |
|
|
|
|
|
|
|
Long-term debt |
|
|
|
33,365 |
|
|
|
33,750 |
|
Operating lease
obligations |
|
|
|
5,446 |
|
|
|
2,615 |
|
Finance
lease obligations |
|
|
|
8,536 |
|
|
|
8,838 |
|
Total liabilities |
|
|
|
170,307 |
|
|
|
172,282 |
|
|
|
|
|
|
|
Shareholders’
equity: |
|
|
|
|
|
Capital stock |
|
|
|
508 |
|
|
|
508 |
|
Additional paid-in
capital |
|
|
|
293,551 |
|
|
|
293,389 |
|
Deficit |
|
|
|
(252,025 |
) |
|
|
(252,800 |
) |
|
|
|
|
42,034 |
|
|
|
41,097 |
|
Total
liabilities and shareholders' equity |
|
|
$ |
212,341 |
|
|
$ |
213,379 |
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows |
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
Three months ended |
(Expressed in thousands of U.S. dollars) |
|
|
|
|
Cash
provided by (used in): |
|
March 29, 2020 |
|
March 31, 2019 |
Operations: |
|
|
|
|
Net income |
|
$ |
775 |
|
|
$ |
1,211 |
|
Items not involving cash: |
|
|
|
|
Depreciation on property,
plant and equipment |
|
|
1,603 |
|
|
|
1,627 |
|
Amortization of acquired
Intangible assets |
|
|
1,518 |
|
|
|
1,844 |
|
Change in fair value of
warrant liability |
|
|
(517 |
) |
|
|
(101 |
) |
Unrealized foreign exchange
loss on unsettled forward |
|
|
|
|
exchange contracts |
|
|
512 |
|
|
|
- |
|
Write down of property, plant
and equipment |
|
|
- |
|
|
|
- |
|
Deferred income taxes
(recovery) |
|
|
15 |
|
|
|
(8 |
) |
Amortization of deferred
financing fees |
|
|
294 |
|
|
|
271 |
|
Stock-based compensation |
|
|
162 |
|
|
|
88 |
|
Change in fair value of
contingent consideration |
|
|
- |
|
|
|
(3,050 |
) |
|
|
|
|
|
Change in non-cash operating
working capital: |
|
|
|
|
Accounts receivable |
|
|
(694 |
) |
|
|
(1,194 |
) |
Unbilled contract assets |
|
|
(2,508 |
) |
|
|
(3,803 |
) |
Inventories |
|
|
4,505 |
|
|
|
4,543 |
|
Prepaid expenses and other assets |
|
|
651 |
|
|
|
(1,067 |
) |
Income taxes payable |
|
|
(41 |
) |
|
|
29 |
|
Accounts payable |
|
|
(6,196 |
) |
|
|
1,970 |
|
Accrued liabilities |
|
|
3,475 |
|
|
|
242 |
|
Restructuring liability |
|
|
(644 |
) |
|
|
244 |
|
Net change in operating lease right of use asset and liability |
|
|
11 |
|
|
|
- |
|
|
|
|
2,921 |
|
|
|
2,846 |
|
Financing: |
|
|
|
|
Repayments of revolving credit
facility |
|
|
(1,361 |
) |
|
|
(1,384 |
) |
Repayments of long-term
debt |
|
|
(312 |
) |
|
|
(313 |
) |
Net advances of long-term
debt |
|
|
- |
|
|
|
- |
|
Principal repayments of
finance lease obligations |
|
|
(362 |
) |
|
|
(417 |
) |
Repayment of equipment
facility |
|
|
- |
|
|
|
- |
|
|
|
|
(2,035 |
) |
|
|
(2,114 |
) |
Investing: |
|
|
|
|
Acquisition of MC Assembly -
net of cash acquired |
|
|
- |
|
|
|
- |
|
Purchase of property, plant
and equipment |
|
|
(900 |
) |
|
|
(737 |
) |
Proceeds from leaseholding
improvement |
|
|
|
|
|
|
|
(900 |
) |
|
|
(737 |
) |
Decrease in cash |
|
|
(14 |
) |
|
|
(5 |
) |
Cash,
beginning of period |
|
|
1,368 |
|
|
|
1,601 |
|
Cash,
end of the period |
|
$ |
1,354 |
|
|
$ |
1,596 |
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
|
|
|
Reconciliation of
Adjusted Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
March 29, 2020 |
|
March 31, 2019 |
|
December 29, 2019 |
|
|
|
|
|
|
|
Gross Profit |
|
$ |
9,639 |
|
|
$ |
8,624 |
|
|
$ |
10,494 |
|
Add (deduct): |
|
|
|
|
|
|
Amortization of intangible
assets |
|
|
1,518 |
|
|
|
1,844 |
|
|
|
1,656 |
|
Unrealized foreign exchange loss |
|
|
|
|
|
|
on unsettled forward exchange contracts |
|
|
512 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
Adjusted Gross Profit |
|
$ |
11,669 |
|
|
$ |
10,468 |
|
|
$ |
12,150 |
|
|
|
|
|
|
|
|
Adjusted Gross Profit Percentage |
|
|
12.3% |
|
|
|
10.2% |
|
|
|
13.5% |
|
|
|
Supplementary
Information: |
|
|
|
|
|
|
Reconciliation of Adjusted Net Income and Adjusted
EPS |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
March 29, 2020 |
|
March 31, 2019 |
|
December 29, 2019 |
|
|
|
|
|
|
|
Net income |
|
$ |
775 |
|
|
$ |
1,211 |
|
|
$ |
996 |
|
Add (deduct): |
|
|
|
|
|
|
Amortization of intangible assets |
|
|
1,518 |
|
|
|
1,844 |
|
|
|
1,656 |
|
Restructuring charges |
|
|
(221 |
) |
|
|
624 |
|
|
|
(669 |
) |
Stock compensation expense |
|
|
162 |
|
|
|
88 |
|
|
|
238 |
|
Fair value adjustment of warrant liability |
|
|
(517 |
) |
|
|
(101 |
) |
|
|
640 |
|
Merger and acquisitions related expenses |
|
|
- |
|
|
|
91 |
|
|
|
54 |
|
Fair value adjustment of contingent consideration |
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
Unrealized foreign exchange loss |
|
|
|
|
|
|
on unsettled forward exchange contracts |
|
|
512 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net income |
|
$ |
2,229 |
|
|
$ |
707 |
|
|
$ |
2,915 |
|
Adjusted EPS |
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
$ |
0.10 |
|
Weighted average number of
shares outstanding |
|
|
|
|
|
|
Basic |
|
|
28,195,300 |
|
|
|
23,248,918 |
|
|
|
28,117,372 |
|
Diluted |
|
|
29,228,403 |
|
|
|
24,465,435 |
|
|
|
29,402,054 |
|
Supplementary
Information: |
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
March 29, 2020 |
|
March 31, 2019 |
|
December 29, 2019 |
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
775 |
|
|
$ |
1,211 |
|
|
$ |
996 |
|
Add (deduct): |
|
|
|
|
|
|
Depreciation of property, plant and equipment |
|
|
1,603 |
|
|
|
1,627 |
|
|
|
1,646 |
|
Amortization of Intangible assets |
|
|
1,518 |
|
|
|
1,844 |
|
|
|
1,656 |
|
Interest |
|
|
2,093 |
|
|
|
2,870 |
|
|
|
2,213 |
|
Income tax expense |
|
|
290 |
|
|
|
271 |
|
|
|
182 |
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
6,279 |
|
|
$ |
7,823 |
|
|
$ |
6,693 |
|
|
|
|
|
|
|
|
Add (deduct): |
|
|
|
|
|
|
Stock compensation expense |
|
|
162 |
|
|
|
88 |
|
|
|
238 |
|
Fair value adjustment of warrant liability |
|
|
(517 |
) |
|
|
(101 |
) |
|
|
640 |
|
Restructuring charges |
|
|
(221 |
) |
|
|
624 |
|
|
|
(669 |
) |
Merger and acquisitions related expenses |
|
|
- |
|
|
|
91 |
|
|
|
54 |
|
Fair value adjustment of contingent consideration |
|
|
- |
|
|
|
(3,050 |
) |
|
|
- |
|
Unrealized foreign exchange loss |
|
|
512 |
|
|
|
- |
|
|
|
- |
|
on unsettled forward exchange contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
6,215 |
|
|
$ |
5,475 |
|
|
$ |
6,956 |
|
|
|
|
|
|
|
|
Adjusted EBITDA Percentage |
|
|
6.5% |
|
|
|
5.3% |
|
|
|
7.7% |
|
|
|
|
|
|
|
|
Supplementary
Information: |
|
|
|
|
|
Reconciliation of
Adjusted Net Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 29, 2020 |
|
December 29, 2019 |
|
|
|
|
|
|
Revolver |
|
|
$ |
33,340 |
|
|
$ |
34,701 |
|
Long-term debt |
|
|
|
38,438 |
|
|
|
38,750 |
|
Discount (long-term debt) |
|
|
|
(3,511 |
) |
|
|
(3,750 |
) |
Finance lease obligations |
|
|
|
9,702 |
|
|
|
10,064 |
|
Operating lease obligations |
|
|
|
7,012 |
|
|
|
3,743 |
|
|
|
|
$ |
84,981 |
|
|
$ |
83,508 |
|
Cash |
|
|
$ |
(1,354 |
) |
|
$ |
(1,368 |
) |
Net Debt |
|
|
$ |
83,627 |
|
|
$ |
82,140 |
|
|
|
|
|
|
|
Note:
Impact of new Fremont lease $3.6 million included as at March 29,
2020 |
Supplementary
Information: |
|
|
Reconciliation of
Adjusted EBITDA |
|
|
|
|
|
|
|
Forecasted Three months ended |
|
|
June 28, 2020 |
|
|
|
Net Income* |
|
$ |
500 |
Add (deduct): |
|
|
Depreciation |
|
|
1,700 |
Amortization of Intangible |
|
|
850 |
Interest |
|
|
2,100 |
Income tax expense |
|
|
300 |
|
|
|
EBITDA |
|
$ |
5,450 |
|
|
|
Add (deduct): |
|
|
Stock compensation expense |
|
|
150 |
Unrealized foreign exchange loss on forward contracts |
|
|
400 |
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
6,000 |
*Excludes COVID-19 related expenditures of up to $1,200
Relations Contact
Peter Seltzberg Managing Director Darrow Associates, Inc.
516-419-9915 pseltzberg@darrowir.com
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