Exhibit 99.2
Non-GAAP Financial Measures
We define Non-GAAP Adjusted Net Income as Net Income before inventory step-up charges, certain other legal and professional fees, other acquisition and integration-related costs, the applicable tax impacts associated with these items and the tax impacts of state tax rate adjustments and other non-deductible items. We define Non-GAAP Free Cash Flow as Net Cash provided by operating activities less cash paid for capital expenditures. We define Non-GAAP Operating Cash Flow as net cash provided by operating activities plus payments associated with acquisitions for integration, transition and other payments associated with acquisitions and additional debt premium payments and acceleration of debt discount and debt finance costs due to debt refinancing. We define Non-GAAP Adjusted Free Cash Flow as Non-GAAP Operating Cash Flow less purchases of property and equipment. We calculate Non-GAAP Free Cash Flow Conversion by dividing Non-GAAP Adjusted Free Cash Flow by Non-GAAP Adjusted Net Income.
Non-GAAP Adjusted Net Income, Non-GAAP Free Cash Flow and Non-GAAP Adjusted Free Cash Flow may not be comparable to similarly titled measures reported by other companies. The following tables set forth the reconciliation of Non-GAAP Adjusted Net Income, Non-GAAP Free Cash Flow, Non-GAAP Adjusted Free Cash Flow and the calculation of Non-GAAP Adjusted Free Cash Flow Conversion, all of which are non-GAAP financial measures, to GAAP Net Income and GAAP Net cash provided by operating activities, our most directly comparable financial measures presented in accordance with GAAP.
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income:
|
| | | | | | | | | | | | | | | |
| | Year Ended March 31, | | Six Months Ended September 30, | | LTM September 30, |
| | 2014 | | 2014 | | 2013 | | 2014 |
| ($ In thousands) | | | | | | | |
| GAAP Net Income | $ | 72,615 |
| | $ | 33,195 |
| | $ | 53,484 |
| | $ | 52,326 |
|
| Adjustments: | | | | | | | |
| Inventory step-up charges and other costs associated with Care and Hydralyte acquisitions | 577 |
| | 246 |
| | 577 |
| | 246 |
|
| Inventory step-up charges associated with Insight acquisition | — |
| | 653 |
| | — |
| | 653 |
|
| Care acquisition related inventory costs | 407 |
| | — |
| | 407 |
| | — |
|
| Legal and professional fees associated with acquisitions and divestitures | 1,111 |
| | 9,857 |
| | 668 |
| | 10,300 |
|
| Stamp/Duty Tax on Australian acquisition | — |
| | 2,940 |
| | — |
| | 2,940 |
|
| Integration, transition and other costs associated with acquisitions | — |
| | 4,432 |
| | — |
| | 4,432 |
|
| Accelerated amortization of debt discount and debt issue costs | 5,477 |
| | | | | | 5,477 |
|
| Loss on extinguishment of debt | 18,286 |
| | | | | | 18,286 |
|
| Tax impact of adjustments | (9,100 | ) | | (3,469 | ) | | (356 | ) | | (12,213 | ) |
| Impact of state tax adjustments | (9,465 | ) | | — |
| | (9,085 | ) | | (380 | ) |
| Total adjustments | 7,293 |
| | 14,659 |
| | (7,789 | ) | | 29,741 |
|
| Non-GAAP Adjusted Net Income | $ | 79,908 |
| | $ | 47,854 |
| | $ | 45,695 |
| | $ | 82,067 |
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Free Cash Flow and Non-GAAP Free Cash Flow:
|
| | | | | | | | | | | | | | | |
| | Year Ended March 31, | | Six Months Ended September 30, | | LTM September 30, |
| | 2014 | | 2014 | | 2013 | | 2014 |
| ($ In thousands) | | | | | | | |
| GAAP Net Income | $ | 72,615 |
| | $ | 33,195 |
| | $ | 53,484 |
| | $ | 52,326 |
|
| Adjustments: | | | | | | | |
| Adjustments to reconcile net income to net cash provided by operating activities as shown in the Statement of Cash Flows | 50,912 |
| | 24,855 |
| | 16,174 |
| | 59,593 |
|
| Changes in operating assets and liabilities, net of effects from acquisitions as shown in the Statement of Cash Flows | (11,945 | ) | | (992 | ) | | (14,060 | ) | | 1,123 |
|
| Total adjustments | 38,967 |
| | 23,863 |
| | 2,114 |
| | 60,716 |
|
| GAAP Net cash provided by operating activities | 111,582 |
| | 57,058 |
| | 55,598 |
| | 113,042 |
|
| Premium payment on 2010 Senior Notes | 15,527 |
| | — |
| | — |
| | 15,527 |
|
| Accelerated interest payments due to debt refinancing | 4,675 |
| | — |
| | — |
| | 4,675 |
|
| Integration, transition and other payments associated with acquisitions | | | 12,417 |
| | — |
| | 12,417 |
|
| Non-GAAP Operating Cash Flow | 131,784 |
| | 69,475 |
| | 55,598 |
| | 145,661 |
|
| Purchases of property and equipment | (2,764 | ) | | (1,380 | ) | | (2,319 | ) | | (1,825 | ) |
| Non-GAAP Adjusted Free Cash Flow | $ | 129,020 |
| | $ | 68,095 |
| | $ | 53,279 |
| | $ | 143,836 |
|
| | | | | | | | |
| | | | | | | | |
| GAAP Net cash provided by operating activities | $ | 111,582 |
| | $ | 57,058 |
| | $ | 55,598 |
| | $ | 113,042 |
|
| Purchases of property and equipment | (2,764 | ) | | (1,380 | ) | | (2,319 | ) | | (1,825 | ) |
| Non-GAAP Free Cash Flow | $ | 108,818 |
| | $ | 55,678 |
| | $ | 53,279 |
| | $ | 111,217 |
|
Calculation of Non-GAAP Adjusted Free Cash Flow Conversion:
|
| | | | | | | | | | | | | | | |
| | Year Ended March 31, | | Six Months Ended September 30, | | LTM September 30, |
| | 2014 | | 2014 | | 2013 | | 2014 |
| ($ In thousands) | | | | | | | |
| Non-GAAP Adjusted Free Cash Flow | $ | 129,020 |
| | $ | 68,095 |
| | $ | 53,279 |
| | $ | 143,836 |
|
| Non-GAAP Adjusted Net Income | $ | 79,908 |
| | $ | 47,854 |
| | $ | 45,695 |
| | $ | 82,067 |
|
| Non-GAAP Adjusted Free Cash Flow Conversion | 161 | % | | 142 | % | | 117 | % | | 175 | % |
