Charah® Solutions, Inc. (NYSE:CHRA) (“Charah Solutions” or the
“Company”), a leading provider of environmental and maintenance
services to the power generation industry, today announced
financial results for the quarter and year to date ended June 30,
2019. Revenues for the second quarter of 2019 were $120.9 million
with a net loss attributable to Charah Solutions of $(18.0)
million, or $(0.61) per basic share. Adjusted net loss1 and
adjusted loss per basic share1 were $(9.5) million and $(0.32),
respectively. Adjusted EBITDA1 was $(2.4) million. Second quarter
results include the impact of a $10 million reversal in revenue
associated with the Brickhaven contract termination payment of $80
million.
“While our second quarter results were disappointing, in this
transition year, we are committed to making adjustments to improve
our operating efficiency, reduce our debt levels and increase our
margin potential,” said Scott Sewell, President and Chief Executive
Officer of Charah Solutions. “We were pleased to finalize an $80
million recovery for the Brickhaven termination, and we have
secured approximately $275 million in new awards year-to-date.
Additionally, we have $400 million in verbal awards currently under
negotiation, and we continue to expect additional positive proposal
developments in the second half of 2019 and 2020. The combination
of backlog generated year-to-date and verbal awards under
negotiation is trending towards one of our strongest business
development years on record.”
“Going forward, we are focused on utilizing our positive cash
flows to significantly reduce net debt and position the company to
take advantage of the estimated $75+ billion in coal ash
remediation opportunities in the U.S. and the increasing demand for
coal ash by cement and concrete producers,” said Mr. Sewell. “We
believe the growth potential for Charah Solutions remains very
strong. More than 1,000 ash ponds and landfills still require
EPA-mandated closure or remediation, and we are a leading provider
of those services. With our ability to provide custom solutions
that combine our market-leading ash management capabilities and our
proprietary beneficiation technologies, along with a regulatory
environment increasingly conducive to our business, we believe
we’re ideally positioned to expand our revenue-generating
potential. While our highest priority will always be our commitment
to safety, we are intensely focused on capturing a significant
share of profitable growth opportunities.”
Summary of
Financial Results
(Unaudited, in thousands, except per share and margin data)
Three Months Ended June
30,
2019
2018
Total revenue
$
120,936
$
195,723
Gross (loss) profit
$
(2,065
)
$
30,549
Gross margin
(1.7
)%
15.6
%
Net (loss) income attributable to Charah
Solutions, Inc.
$
(18,026
)
$
3,220
(Loss) earnings per common share
(basic/diluted)
$
(0.61
)
$
0.13
Non-GAAP Financial
Measures
Adjusted net (loss) income1
$
(9,488
)
$
7,857
Adjusted EBITDA1
$
(2,353
)
$
25,999
Adjusted EBITDA margin1
(1.9
)%
13.3
%
1 Adjusted net (loss) income, Adjusted (loss) earnings per
basic/diluted share, Adjusted EBITDA and Adjusted EBITDA margin are
non-GAAP financial measures. A reconciliation of Adjusted net
(loss) income, Adjusted (loss) earnings per basic/diluted share and
Adjusted EBITDA to the most directly comparable GAAP financial
measures and a calculation of the Company’s Adjusted EBITDA margin
are included in the financial tables accompanying this release.
Second Quarter 2019
Results
Revenue for the second quarter of 2019 was $120.9 million, a
decrease of $74.8 million, or 38.2%, from $195.7 million in the
second quarter of 2018 due primarily to project completions,
reduced nuclear maintenance services and a reversal of revenue
related to the Brickhaven termination payment. Gross profit
decreased $32.6 million, or (106.8)%, to $(2.1) million from $30.5
million in the second quarter of 2018. Gross profit as a percentage
of revenue, or gross margin, declined to (1.7)% from 15.6% in the
second quarter of 2018, primarily due to lower gross margin in the
Company’s Environmental Solutions segment resulting from the $10
million revenue reversal associated with the Brickhaven contract
payment and one project-specific issue continuing from the first
quarter of 2019.
Environmental Solutions Segment: Environmental Solutions
generated revenue of $37.0 million, a decrease of $53.2 million, or
59.0%, from the second quarter of 2018, primarily driven by the
project completions within our remediation and compliance services
business and the $10.0 million revenue reversal associated with the
Brickhaven contract payment, and one project-specific issue
continuing from the first quarter, which was completed in the
second quarter. Gross profit declined to $(9.2) million from $22.1
million in the second quarter of 2018 primarily due to a
combination of the project-specific issue, which resulted in
unanticipated cost increases, the reversal in revenue related to
the Brickhaven contract, and the delay in anticipated new business
awards. Gross margin declined to (24.9)% from 24.5% in the second
quarter of 2018.
Maintenance and Technical Services Segment: Maintenance
and Technical Services generated revenue of $84.0 million, a
decrease of $21.6 million, or 20.5%, from the second quarter of
2018. The decrease was primarily attributable to lower revenues in
the Company’s nuclear services business, which resulted from fewer
nuclear refueling outage services. Gross profit decreased $1.3
million, or 15.7%, to $7.1 million from $8.5 million in the second
quarter of 2018. Gross margin rose to 8.5% from 8.0% in the second
quarter of 2018.
Net loss attributable to Charah Solutions was $(18.0) million,
while Adjusted EBITDA1 for the second quarter of 2019 was $(2.4)
million, a decrease of $28.4 million from $26.0 million in the
second quarter of 2018. Interest expense declined during the second
quarter of 2019 by $1.4 million to $4.1 million from $5.5 million
in the second quarter of 2018, primarily as a result of a reduction
in the cost of debt associated with the refinancing of our term
loan in September 2018, partially offset by a non-cash $0.4 million
mark-to-market expense associated with the change in value of the
Company’s interest rate swap during the period.
Brickhaven Payment
Update
On May 29, 2019, the ash remediation contract for Charah’s
Brickhaven location was deemed terminated, consistent with the
Company’s previously communicated expectations. Per the terms of
this contract, the customer is obligated to pay Charah for the
recovery of project development costs, expected site closure costs,
and post-maintenance costs upon deemed termination. After
negotiations to date with customer, the Company expects the amount
of the recovered costs will be approximately $80 million and
expects the payment of these costs to be received by the payment
deadline of August 27, 2019.
Credit Agreement
Amendment
On August 13, 2019, the Company entered into an amendment to its
existing credit agreement that provided for a financial covenant
holiday through December 31, 2019, and amends the financial
covenants for the period beginning March 31, 2020, through
September 29, 2020. In recognition of the covenant relief, the
amendment provides for scheduled debt reductions and reprices the
borrowing rates.
2019 and 2020 Guidance
Our current guidance for 2019 and our outlook for 2020 have been
lowered to reflect delays in new awards and the loss of a
significant international business opportunity. Our current
expectations for 2019 and our outlook for 2020 include incremental
revenue that is mostly represented by booked projects, contract
renewals, verbal awards and only a modest amount of new prospective
awards. Our current 2020 outlook reflects a level of conservatism
based on high confidence projections. The outcome in 2020 could be
better than the upper end of our range in the event we are awarded
one or more large prospective contracts from current or future
proposals. Our current 2019 guidance has been revised as
follows:
- Revenues of $510 million to $560 million
- Net (loss) of $(27) million to $(20) million
- Adjusted EBITDA2 of $25 million to $30 million
- Free cash flow positive
Our 2020 outlook has been revised as follows:
- Revenues of $560 million to $610 million
- Net income of $9 million to $14 million
- Adjusted EBITDA2 of $45 million to $50 million
- Free cash flow positive
2 The forward looking measures of 2019 and 2020 Adjusted EBITDA
are non-GAAP financial measures that cannot be reconciled to net
income as the most directly comparable GAAP financial measure
without unreasonable effort primarily because of the uncertainties
involved in estimating forward-looking measures.
Business Update
Delays in new work awards coupled with unanticipated cost
increases at one remediation site led to disappointing results in
the second quarter of 2019. The pace of new awards in 2019 has not
been sufficient to offset the impact of projects rolling off during
the year due to an increase in the size, scope, and complexity of
remediation and compliance projects. As these projects have become
larger and more complex, utility customers are seeking regulatory
clarity as well as cost recovery through rate relief. Though this
delay is impacting our 2019 results, we expect demand for our
remediation and compliance services to grow as more than 1,000 ash
ponds and landfills still require EPA-mandated closure or
remediation. Our success rate in winning awards for the three and
six months ended June 30, 2019, has been in line with the three and
six months ended June 30, 2018, though the size of projects awarded
has been smaller than anticipated. We have signed approximately
$275 million in new contracts year-to-date and are in exclusive
negotiations on approximately $400 million in additional contracts.
Though the timing of future awards is difficult to determine, we
believe we are well-positioned to capture a significant portion of
a large and growing addressable market.
The maintenance and technical services segment results for the
three and six months ended June 30, 2019, were in line with our
expectations but were lower than the results for the three and six
months ended June 30, 2018, primarily as a result of fewer nuclear
refueling outages and a reduction in the scope of work. A
substantial portion of our nuclear services operations is driven by
scheduled nuclear maintenance outages, which are typically planned
for every 12 to 24 months.
Within our byproduct sales offerings, which is a part of our
environmental solutions segment, the roll-out of our technology
initiatives, including our MP618 thermal beneficiation technology
and our grinding technology, has been slower than previously
anticipated, resulting in a lower than expected contribution to
operating results. Customer interest in our MP618 technology has
been strong, and contracts are currently under negotiation.
Management continues to see regulatory and public policy trends
as increasingly driving customer needs for creative remediation
solutions, including where beneficiation, or recycling of ash,
plays a significant role. The EPA recently finalized the Affordable
Clean Energy regulations and released proposed amendments to the
2015 Coal Combustion Residuals regulations that clarify issues
identified by ash producers and the ash management and recycling
industry. In each case, management believes the EPA will continue
to extend its support for the beneficial use of coal ash consistent
with its objective of reducing the carbon footprint in the U.S.
CONFERENCE CALL
Charah Solutions will host a conference call at 8:30 a.m. ET
today to discuss the second quarter results. Information contained
within this press release will be referenced and should be
considered in conjunction with the call.
Participants may access the conference call live via webcast on
the Investors section of the Charah Solutions website at
ir.charah.com. To participate via telephone, please dial (877)
273-7219 within the United States or (647) 689-5395 outside the
United States, approximately 15 minutes prior to the scheduled
start time. The conference ID for the call is 4583919.
A webcast replay will be available on the Investors section of
the Charah Solutions website at ir.charah.com after 11:30 a.m. ET
on Wednesday, August 14, 2019. In addition, an audio replay will be
available for one week following the call and will be accessible by
dialing (800) 585-8367 within the United States or (416) 621-4642
outside the United States. The replay ID is 4583919.
A supplementary presentation will also be available on the
Investors section of the Charah Solutions website at
ir.charah.com.
ABOUT CHARAH SOLUTIONS
With 30 years of experience, Charah® Solutions, Inc. is a
leading provider of environmental and maintenance services to the
power generation industry, with operations in fossil fuel and
nuclear power generation sites across the country. Based in
Louisville, Kentucky, Charah Solutions assists utilities with all
aspects of managing and recycling ash byproducts generated from the
combustion of coal in the production of electricity as well as
routine power plant maintenance and outage services for the fossil
fuel and nuclear power generation industry. The company also
designs and implements solutions for ash pond management and
closure, landfill construction, fly ash and slag sales, and
structural fill projects. Charah Solutions is the partner of choice
for solving customers’ most complex environmental challenges, and
as an industry leader in quality, safety, and compliance, the
company is committed to reducing greenhouse gas emissions for a
cleaner energy future. For more information, please visit
www.charah.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Company expects, believes or anticipates will or may occur in the
future are forward-looking statements. These forward-looking
statements are identified by their use of terms and phrases such as
“may,” “expect,” “estimate,” “project,” “plan,” “believe,”
“intend,” “achievable,” “anticipate,” “will,” “continue,”
“potential,” “should,” “could,” and similar terms and phrases.
These statements are based on certain assumptions made by the
Company based on management’s experience and perception of
historical trends, current conditions, anticipated future
developments and other factors believed to be appropriate. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company,
which may cause actual results to differ materially from those
implied or expressed by the forward-looking statements.
Any forward-looking statement speaks only as of the date on
which such statement is made and the Company undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
NON-GAAP FINANCIAL MEASURES
Adjusted net (loss) income and Adjusted (loss) earnings per
basic/diluted share are not financial measures determined in
accordance with GAAP. Charah Solutions defines Adjusted net (loss)
income as Net (loss) income attributable to Charah Solutions plus,
on a post-tax basis, non-recurring legal and start-up costs and
expenses, and transaction-related expenses and other items.
Adjusted (loss) earnings per basic/diluted share is based on
Adjusted Net (loss) income.
Adjusted EBITDA and Adjusted EBITDA margin are not financial
measures determined in accordance with GAAP. Charah Solutions
defines Adjusted EBITDA as net (loss) income before interest
expense, income taxes, depreciation and amortization, equity-based
compensation, non-recurring legal and start-up costs and expenses,
Brickhaven termination revenue reversal, and transaction-related
expenses and other items. Adjusted EBITDA margin represents the
ratio of Adjusted EBITDA to total revenues.
Management believes Adjusted EBITDA and Adjusted EBITDA margin
are useful performance measures because they allow for an effective
evaluation of our operating performance when compared to our peers,
without regard to our financing methods or capital structure.
Management excludes the items listed above from net (loss) income
in arriving at Adjusted EBITDA because these amounts are either
non-recurring or can vary substantially within Charah Solutions’
industry depending upon accounting methods and book values of
assets, capital structures and the method by which the assets were
acquired. Adjusted EBITDA should not be considered as an
alternative to, or more meaningful than, net (loss) income
determined in accordance with GAAP. Certain items excluded from
Adjusted EBITDA are significant components in understanding and
assessing a company’s financial performance, such as a company’s
cost of capital and tax structure, as well as the historic costs of
depreciable assets, none of which are reflected in Adjusted EBITDA.
Charah Solutions’ presentation of Adjusted EBITDA should not be
construed as an indication that the Company’s results will be
unaffected by the items excluded from Adjusted EBITDA. Charah
Solutions’ computations of Adjusted EBITDA may not be identical to
other similarly titled measures of other companies. Charah
Solutions uses Adjusted EBITDA margin to measure the success for
the Company’s business in managing its cost base and improving
profitability. A reconciliation between Adjusted EBITDA to net
(loss) income, Charah Solutions’ most directly comparable financial
measure calculated and presented in accordance with GAAP, along
with a calculation of the Company’s Adjusted EBITDA margin is
included in the supplemental financial data attached to this press
release.
CHARAH SOLUTIONS, INC.
Condensed Consolidated Balance
Sheets
(dollars in thousands except
per share data)
(Unaudited)
June 30, 2019
December 31, 2018
Assets
Current assets:
Cash
$
9,581
$
6,900
Trade accounts receivable
47,706
60,742
Receivable from affiliates
828
894
Costs and estimated earnings in excess of
billings
90,375
86,710
Inventory
22,306
25,797
Prepaid expenses and other current
assets
3,946
5,133
Total current assets
174,742
186,176
Property and equipment:
Plant, machinery and equipment
73,482
74,896
Structural fill site improvements
55,760
55,760
Vehicles
19,726
17,407
Office equipment
2,322
1,623
Buildings and leasehold improvements
262
262
Structural fill sites
7,110
7,110
Construction in progress
9,596
3,488
Total property and equipment
168,258
160,546
Less accumulated depreciation
(80,969
)
(71,605
)
Property and equipment, net
87,289
88,941
Other assets:
Trade names, net
34,850
34,920
Customer relationships, net
59,951
63,898
Technology, net
1,753
1,853
Non-compete and other agreements, net
108
180
Other intangible assets, net
—
22
Goodwill
74,213
74,213
Other assets
—
891
Deferred tax asset
9,136
2,747
Equity method investments
5,218
5,060
Total assets
$
447,260
$
458,901
CHARAH SOLUTIONS, INC.
Condensed Consolidated Balance
Sheets
(dollars in thousands except
per share data)
(Unaudited)
June 30, 2019
December 31, 2018
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
29,273
$
24,821
Billings in excess of costs and estimated
earnings
160
1,352
Notes payable, current maturities
18,722
23,268
Accrued payroll and bonuses
11,588
15,480
Asset retirement obligation, current
portion
14,126
14,704
Purchase option liability, current
portion
7,110
10,017
Accrued expenses
20,628
22,473
Other liabilities
905
—
Total current liabilities
102,512
112,115
Long-term liabilities:
Contingent payments for acquisitions
11,349
11,214
Asset retirement obligation, less current
portion
6,819
11,361
Line of credit
35,174
19,799
Notes payable, less current maturities
217,837
211,022
Total liabilities
373,691
365,511
Commitments and contingencies (see Note
11)
Stockholders’ equity:
Retained (losses) earnings
(11,632
)
9,414
Common Stock, $0.01 par value; 200,000,000
shares authorized; 29,586,165 and 29,082,988 shares issued and
outstanding as of June 30, 2019, and December 31, 2018,
respectively
296
291
Additional paid-in capital
83,882
82,880
Total stockholders’ equity
72,546
92,585
Non-controlling interest
1,023
805
Total equity
73,569
93,390
Total liabilities and equity
$
447,260
$
458,901
CHARAH SOLUTIONS, INC.
Condensed Consolidated &
Combined Statements of Operations
(dollars in thousands except
per share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2019
June 30, 2018
June 30, 2019
June 30, 2018
Revenue
$
120,936
$
195,723
$
284,194
$
351,252
Cost of sales
123,001
165,174
270,880
301,605
Gross (loss) profit
(2,065
)
30,549
13,314
49,647
General and administrative expenses
17,400
18,937
31,385
33,319
Operating (loss) income
(19,465
)
11,612
(18,071
)
16,328
Interest expense, net
(4,102
)
(5,543
)
(9,154
)
(9,674
)
Income from equity method investment
663
699
1,217
1,286
(Loss) income before income
taxes
(22,904
)
6,768
(26,008
)
7,940
Income tax provision
(5,628
)
2,906
(6,389
)
2,906
Net (loss) income
(17,276
)
3,862
(19,619
)
5,034
Less income attributable to
non-controlling interest
750
642
1,226
1,009
Net (loss) income attributable to
Charah Solutions, Inc.
$
(18,026
)
$
3,220
$
(20,845
)
$
4,025
(Loss) earnings per common share:
Basic
$
(0.61
)
$
0.13
$
(0.71
)
$
0.17
Diluted
$
(0.61
)
$
0.13
$
(0.71
)
$
0.16
Weighted-average shares outstanding used
in (loss) earnings per common share:
Basic
29,558,752
24,477,829
29,374,295
24,096,186
Diluted
29,558,752
25,347,887
29,374,295
24,942,199
Pro forma net (loss) income information
(see Note 1):
Net (loss) income attributable to Charah
Solutions, Inc. before provision for income taxes
$
(23,654
)
$
6,126
$
(27,234
)
$
6,931
Pro forma provision for income taxes
(5,628
)
1,517
(6,389
)
1,720
Pro forma net (loss) income
attributable to Charah Solutions, Inc.
$
(18,026
)
$
4,609
$
(20,845
)
$
5,211
CHARAH SOLUTIONS, INC.
Condensed Consolidated &
Combined Statements of Cash Flows
(dollars in thousands)
(Unaudited)
Six Months Ended
June 30, 2019
June 30, 2018
Cash flows from operating
activities:
Net (loss) income
$
(19,619
)
$
5,034
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
11,635
17,135
Amortization of debt issuance costs
342
784
Deferred income tax provision
(6,389
)
1,919
Loss on sale of assets
1,305
582
Income from equity method investment
(1,217
)
(1,286
)
Distributions received from equity
investment
1,059
938
Non-cash share-based compensation
1,007
1,403
Loss (gain) on interest rate swap
1,796
(2,228
)
Interest accreted on contingent earnout
liability
135
—
Changes in cash due to changes in:
Trade accounts receivable
13,036
(5,289
)
Receivable from affiliates
66
(82
)
Costs and estimated earnings in excess of
billings
(3,665
)
(22,305
)
Inventory
3,491
(825
)
Prepaid expenses and other current
assets
1,187
(2,126
)
Accounts payable
4,452
8,587
Billings in excess of costs and estimated
earnings
(1,192
)
(8,783
)
Accrued payroll and bonuses
(3,892
)
1,946
Asset retirement obligation
(5,120
)
14
Accrued expenses
(1,845
)
2,396
Net cash used in operating activities
(3,428
)
(2,186
)
Cash flows from investing
activities:
Proceeds from the sale of equipment
1,507
1,102
Purchases of property and equipment
(11,491
)
(8,233
)
Payments for business acquisitions, net of
cash received
—
(19,983
)
Purchase of intangible assets
—
(31
)
Net cash used in investing activities
(9,984
)
(27,145
)
Cash flows from financing
activities:
Net proceeds on line of credit
15,375
—
Proceeds from long-term debt
9,994
8,400
Principal payments on long-term debt
(8,067
)
(45,547
)
Repurchases of shares
(201
)
—
Payments of offering costs
—
(8,622
)
Issuance of common stock
—
59,241
Distributions to non-controlling
interest
(1,008
)
(721
)
Distributions to members
—
(686
)
Net cash provided by financing
activities
16,093
12,065
Net increase (decrease) in cash
2,681
(17,266
)
Cash, beginning of period
6,900
32,264
Cash, end of period
$
9,581
$
14,998
Supplemental disclosures of cash flow
information:
Cash paid during the year for interest
$
4,889
$
11,163
Cash paid during the year for taxes
$
—
$
—
CHARAH SOLUTIONS, INC.
Segment Results and Adjusted
EBITDA
(dollars in thousands unless
otherwise indicated)
Three Months Ended
June 30,
Change
2019
2018
$
%
(dollars in thousands)
Revenues:
Environmental Solutions
$
36,950
$
90,113
$
(53,163
)
(59.0
)%
Maintenance and Technical Services
83,986
105,610
(21,624
)
(20.5
)%
Total revenue
120,936
195,723
(74,787
)
(38.2
)%
Cost of sales
123,001
165,174
(42,173
)
(25.5
)%
Gross (Loss) Profit:
Environmental Solutions
(9,188
)
22,096
(31,284
)
(141.6
)%
Maintenance and Technical Services
7,123
8,453
(1,330
)
(15.7
)%
Total gross (loss) profit
(2,065
)
30,549
(32,614
)
(106.8
)%
General and administrative
expenses
17,400
18,937
(1,537
)
(8.1
)%
Operating (loss) income
(19,465
)
11,612
(31,077
)
(267.6
)%
Interest expense, net
(4,102
)
(5,543
)
1,441
26.0
%
Income from equity method investment
663
699
(36
)
(5.2
)%
(Loss) income before taxes
(22,904
)
6,768
(29,672
)
(438.4
)%
Income tax provision
(5,628
)
2,906
(8,534
)
(100.0
)%
Net (loss) income
(17,276
)
3,862
(21,138
)
(547.3
)%
Less income attributable to
non-controlling interest
750
642
108
16.8
%
Net (loss) income attributable to
Charah Solutions, Inc.
(18,026
)
3,220
(21,246
)
(659.8
)%
Adjusted EBITDA(1)
$
(2,353
)
$
25,999
$
(28,352
)
(109.1
)%
Adjusted EBITDA margin(1)
(1.9
)%
13.3
%
(15.2
)%
N/A
- Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures.
CHARAH SOLUTIONS, INC.
Non-GAAP Reconciliation: Net
(Loss) Income to Adjusted EBITDA
(dollars in thousands)
Three Months Ended
June 30,
2019
2018
Net (loss) income attributable to Charah
Solutions, Inc.
$
(18,026
)
$
3,220
Interest expense, net
4,102
5,543
Income tax provision
(5,628
)
2,906
Depreciation and amortization
5,378
8,704
Elimination of certain non-recurring legal
costs and expenses(1)
-
2,489
Elimination of certain non-recurring
start-up costs(2)
-
688
Equity-based compensation
799
1,292
Brickhaven termination revenue
reversal
10,000
-
Transaction related expenses and other
items(3)
1,022
1,157
Adjusted EBITDA
$
(2,353
)
$
25,999
Adjusted EBITDA margin(4)
(1.9
)%
13.3
%
- Represents non-recurring legal costs and accruals associated
with outstanding or settled legal claims, which amounts are not
representative of legal costs that we historically incur in the
ordinary course of our business.
- Represents non-recurring start-up costs associated with the
startup of Allied Power Management, LLC (“Allied”) and our nuclear
services offerings, including the setup of financial operations
systems and modules, pre-contract expenses to obtain initial
contracts and the hiring of operational staff. Because these costs
are associated with the initial setup of the Allied business to
initiate the operations involved in our nuclear services offerings,
these costs are non-recurring in the normal course of our
business.
- Represents SCB transaction expenses, executive severance costs,
IPO-related costs and other miscellaneous items.
- Adjusted EBITDA margin is a non-GAAP financial measure that
represents the ratio of Adjusted EBITDA to total revenues. We use
Adjusted EBITDA margin to measure the success of our businesses in
managing our cost base and improving profitability.
CHARAH SOLUTIONS, INC.
Non-GAAP Reconciliation: Net
(Loss) Income to Adjusted Net (Loss) Income and
Adjusted (Loss) Earnings per
Diluted Share
(dollars in thousands except
per share data)
(Unaudited)
Three Months Ended
June 30,
(in thousands, except per share
data)
2019
2018
Net (loss) income attributable to Charah
Solutions, Inc.
$
(18,026
)
$
3,220
Income tax provision
(5,628
)
2,906
Elimination of certain non-recurring legal
costs and expenses(1)
-
2,489
Elimination of certain non-recurring
start-up costs(2)
-
688
Brickhaven termination revenue
reversal
10,000
-
Transaction-related expenses and other
items(3)
1,022
1,157
Adjusted (loss) income before income taxes
attributable to Charah Solutions, Inc.
(12,632
)
10,460
Adjusted income tax provision(4)
3,144
(2,603
)
Adjusted net (loss) income attributable to
Charah Solutions, Inc.
(9,488
)
7,857
Weighted average basic / diluted share
count(5)
29,559
25,348
Adjusted (loss) earnings per diluted
share
$
(0.32
)
$
0.31
- Represents non-recurring legal costs and expenses, which
amounts are not representative of legal costs that we historically
incur in the ordinary course of our business. Negative amounts
represent insurance recoveries related to these matters.
- Represents non-recurring start-up costs associated with the
startup of Allied and our nuclear services offerings, including the
setup of financial operations systems and modules, pre-contract
expenses to obtain initial contracts and the hiring of operational
staff. Because these costs are associated with the initial setup of
the Allied business to initiate the operations involved in our
nuclear services offerings, these costs are non-recurring in the
normal course of our business.
- Represents SCB transaction expenses, executive severance costs,
IPO-related costs and other miscellaneous items.
- Represents the statutory income tax rate of 24.89%, multiplied
by adjusted income before income taxes attributable to Charah
Solutions, Inc.
- As a result of net loss per share for the three months ended
June 30, 2019, the inclusion of all potentially dilutive shares
would be anti-dilutive. Therefore, dilutive shares (in thousands)
of 1,413 were excluded from the computation of weighted-average
shares.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190814005310/en/
Investor Contact Tony Semak, Head of Investor Relations
Charah Solutions, Inc. ir@charah.com (502) 245-1353 Media
Contact Katrina Gallagher PriceWeber Marketing media@charah.com
(502) 472-6003
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