| NEWS RELEASE |  |
AEROFLEX ANNOUNCES FOURTH QUARTER AND FULL YEAR FISCAL 2012 RESULTS
PLAINVIEW, New York — August 16, 2012 — Aeroflex Holding Corp. ("Aeroflex") (NYSE: ARX), a leading global provider of high performance microelectronic components, and test and measurement equipment, today announced its financial results for the fourth quarter and full fiscal year 2012, which ended June 30, 2012.
For the fourth quarter of fiscal 2012:
| · | Net sales were $184.7 million compared to $198.7 million in the fourth quarter of fiscal 2011. As in prior quarters during this fiscal year, the performance of our wireless test business was the primary contributor to the decline in sales in the comparative quarters. |
| · | Operating income was $31.0 million and net income was $17.2 million, or $0.20 per share, compared to operating income of $30.0 million and a net loss of $(21.6) million, or $(0.25) per share, in the fourth quarter of fiscal 2011. The fourth quarter of fiscal 2011 contained a $34.2 million loss on extinguishment of debt and related costs due to the refinancing of Aeroflex’s term loan. |
| · | On a Non-GAAP basis, operating income was $39.0 million, net income was $19.2 million, or $0.23 per share, and Adjusted EBITDA was $43.6 million compared to operating income of $53.2 million, net income of $29.9 million, or $0.35 per share, and Adjusted EBITDA of $57.9 million, in the fourth quarter of fiscal 2011. |
For the full fiscal year 2012:
| · | Net sales were $673.0 million compared to $729.4 million in fiscal 2011. |
| · | Operating loss was $(21.3) million compared to operating income of $52.7 million in fiscal 2011. The primary reason for the difference is due to a goodwill impairment charge of $56.7 million in fiscal 2012. Net loss was $(53.6) million, or $(0.63) per share, compared to a net loss of $(34.7) million, or $(0.45) per share, in fiscal 2011. |
| · | On a Non-GAAP basis, operating income was $112.7 million, net income was $48.8 million or $0.58 per share, and Adjusted EBITDA was $131.5 million compared to operating income of $164.8 million, net income of $71.3 million, or $0.92 per share, and Adjusted EBITDA of $183.7 million, in fiscal 2011. |
”Over the last few months we have been working to reposition our wireless test business for the future. We have made significant operational changes that will reduce costs and enable the business to improve profitability. We have continued to focus on our customers, technology and products,” said Len Borow, Chief Executive Officer of Aeroflex. “Our AMS business has performed well despite the strong economic uncertainty that exists within our end markets. Overall, our business model continues to deliver strong cash flow which enabled us to prepay over $80 million in debt this past fiscal year and an additional $20 million to date in the first quarter of fiscal 2013.”
The following tables present selected financial information for the three months and year ended June 30, 2012 and 2011 prepared in accordance with generally accepted accounting principles (“GAAP”) and on a basis other than GAAP (“Non-GAAP”). The GAAP and Non-GAAP effective tax rates for the year ended June 30, 2012 were 8% and 38%, respectively. The GAAP and Non-GAAP effective tax rates for the year ended June 30, 2011 were 53% and 31%, respectively. The GAAP and Non-GAAP tax rates are a result of Aeroflex’s geographic mix of pre-tax income. A reconciliation between GAAP and Non-GAAP amounts is presented at the end of this press release.
Selected GAAP Results
(In thousands, except percentages and per share data)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| | | | | | | | | | | | | |
| Net sales | | $ | 184,731 | | | $ | 198,685 | | | $ | 673,015 | | | $ | 729,414 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 95,503 | | | | 111,076 | | | | 338,886 | | | | 392,100 | |
| Gross margin | | | 51.7 | % | | | 55.9 | % | | | 50.4 | % | | | 53.8 | % |
| | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | 30,963 | | | | 30,031 | | | | (21,316 | ) | | | 52,715 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 17,201 | | | $ | (21,575 | ) | | $ | (53,637 | ) | | $ | (34,668 | ) |
| | | | | | | | | | | | | | | | | |
| Net income (loss) per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.20 | | | $ | (0.25 | ) | | $ | (0.63 | ) | | $ | (0.45 | ) |
| Diluted | | $ | 0.20 | | | $ | (0.25 | ) | | $ | (0.63 | ) | | $ | (0.45 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 84,828 | | | | 84,789 | | | | 84,811 | | | | 77,153 | |
| Diluted | | | 84,872 | | | | 84,789 | | | | 84,811 | | | | 77,153 | |
Selected Non-GAAP Results
(In thousands, except percentages and per share data)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Net sales | | $ | 184,731 | | | $ | 198,773 | | | $ | 673,015 | | | $ | 729,571 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 95,718 | | | | 111,154 | | | | 339,212 | | | | 393,366 | |
| Gross margin | | | 51.8 | % | | | 55.9 | % | | | 50.4 | % | | | 53.9 | % |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 38,993 | | | | 53,205 | | | | 112,679 | | | | 164,844 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 19,218 | | | $ | 29,900 | | | $ | 48,806 | | | $ | 71,283 | |
| | | | | | | | | | | | | | | | | |
| Net income per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.23 | | | $ | 0.35 | | | $ | 0.58 | | | $ | 0.92 | |
| Diluted | | $ | 0.23 | | | $ | 0.35 | | | $ | 0.58 | | | $ | 0.92 | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 84,828 | | | | 84,789 | | | | 84,811 | | | | 77,153 | |
| Diluted | | | 84,872 | | | | 84,789 | | | | 84,846 | | | | 77,153 | |
| | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 43,571 | | | $ | 57,860 | | | $ | 131,482 | | | $ | 183,698 | |
Business Outlook
Mr. Borow continued, “We expect our performance to improve in fiscal 2013 and are planning to deliver better financial results.” For the first fiscal quarter ending September 30, 2012, Aeroflex expects net sales to be between $134 million and $142 million, GAAP net loss to be between $(15) million and $(13) million, Adjusted EBITDA to be between $15 million and $18 million, GAAP net (loss) per share to be between $(0.18) and $(0.15) and Non-GAAP net income per share to be between $0.00 and $0.02.
The range of expected GAAP and Non-GAAP net income per share for the fiscal first quarter was calculated using GAAP and Non-GAAP effective tax rates of 20% and 34%, respectively.
Non-GAAP Presentation
This press release contains Non-GAAP financial measures that are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from Non-GAAP measures used by other companies. In addition, these Non-GAAP measures: (i) are not based on any comprehensive set of accounting rules or principles; and (ii) have limitations in that they do not reflect all of the amounts associated with Aeroflex's results of operations as determined in accordance with GAAP. As such, these measures should only be used to evaluate Aeroflex's results of operations in conjunction with the corresponding GAAP measures.
Aeroflex believes that the presentation of Non-GAAP financial measures, when shown in conjunction with the corresponding GAAP measures, provides useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations because they exclude certain non-cash charges or items that management does not believe are reflective of its ongoing operating results when assessing the performance of its business.
Aeroflex believes that these Non-GAAP financial measures also facilitate the comparison by management and investors of results between periods and among its peer companies. However, its peer companies may calculate similar Non-GAAP financial measures differently than Aeroflex, limiting the information’s usefulness as comparative measures.
Webcast and Conference Call Information
Aeroflex will host a live webcast and conference call at 8:15 a.m. eastern standard time on Thursday, August 16th during which management will discuss the financial results. To participate in the live webcast, please visit the events page of the website located athttp://ir.aeroflex.com. Please plan to join five to ten minutes before the start of the webcast to facilitate a timely connection. If you are unable to participate and would like to hear a replay of the call, an audio replay of the webcast will be available on the Aeroflex website or can be accessed telephonically for domestic callers at (888) 286-8010 or internationally at (617) 801-6888 with pass code 83778348.
About Aeroflex
Aeroflex Holding Corp. is a leading global provider of high performance microelectronic components, and test and measurement equipment used by companies in the space, avionics, defense, commercial wireless communications, medical and other markets.
Forward-looking Statements
All statements other than statements of historical fact included in this press release regarding Aeroflex’s business strategy, financial results and plans and objectives of its management for future operations are forward-looking statements. When used in this press release, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to Aeroflex or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of Aeroflex’s management, as well as assumptions made by and information currently available to its management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to, adverse developments in the global economy; changes in government spending; dependence on growth in customers’ businesses; the ability to remain competitive in the markets Aeroflex serves; the inability to continue to develop, manufacture and market innovative, customized products and services that meet customer requirements for performance and reliability; any failure of suppliers to provide raw materials and/or properly functioning component parts; the inability to meet covenants contained in debt agreements; the termination of key contracts, including technology license agreements, or loss of key customers; the inability to protect intellectual property; the failure to comply with regulations such as International Traffic in Arms Regulations and any changes in regulations; the failure to realize anticipated benefits from completed acquisitions, divestitures or restructurings, or the possibility that such acquisitions, divestitures or restructurings could adversely affect Aeroflex; the loss of key employees; exposure to foreign currency exchange rate risks; and terrorist acts or acts of war. Such statements reflect the current views of management with respect to the future and are subject to these and other risks, uncertainties and assumptions. Aeroflex does not undertake any obligation to update such forward-looking statements. Any projections in this release are based on limited information currently available to Aeroflex, which is subject to change. Although any such projections and the factors influencing them will likely change, Aeroflex will not necessarily update the information, since Aeroflex will only provide guidance at certain points during the year.
Contact:
Andrew Kaminsky
Aeroflex Holding Corp.
(516) 752-6401
andrew.kaminsky@aeroflex.com
Aeroflex Holding Corp. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
| | | Three Months Ended June 30, | |
| | | 2012 | | | 2011 | |
| | | | | | | |
| Net sales | | $ | 184,731 | | | $ | 198,685 | |
| Cost of sales | | | 89,228 | | | | 87,609 | |
| Gross profit | | | 95,503 | | | | 111,076 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| Selling, general and administrative costs | | | 38,518 | | | | 38,834 | |
| Research and development costs | | | 20,822 | | | | 21,611 | |
| Amortization of acquired intangibles | | | 15,653 | | | | 15,966 | |
| Restructuring charges | | | 1,397 | | | | 3,993 | |
| Adjustment to impairment of goodwill and other long-lived assets | | | (3,000 | ) | | | - | |
| Change in fair value of acquisition contingent consideration liability | | | (8,850 | ) | | | 641 | |
| Total operating expenses | | | 64,540 | | | | 81,045 | |
| Operating income | | | 30,963 | | | | 30,031 | |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense | | | (8,851 | ) | | | (10,401 | ) |
| Loss on extinguishment of debt and write-off of deferred financing costs | | | (368 | ) | | | (34,217 | ) |
| Other income (expense), net | | | (801 | ) | | | (249 | ) |
| Total other income (expense), net | | | (10,020 | ) | | | (44,867 | ) |
| | | | | | | | | |
| Income (loss) before income taxes | | | 20,943 | | | | (14,836 | ) |
| Provision for income taxes | | | 3,742 | | | | 6,739 | |
| Net income (loss) | | $ | 17,201 | | | $ | (21,575 | ) |
| | | | | | | | | |
| Net income (loss) per common share: | | | | | | | | |
| Basic | | $ | 0.20 | | | $ | (0.25 | ) |
| Diluted | | $ | 0.20 | | | $ | (0.25 | ) |
| | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | |
| Basic | | | 84,828 | | | | 84,789 | |
| Diluted | | | 84,872 | | | | 84,789 | |
Aeroflex Holding Corp. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
| | | Year Ended June 30, | |
| | | 2012 | | | 2011 | |
| | | | | | | |
| Net sales | | $ | 673,015 | | | $ | 729,414 | |
| Cost of sales | | | 334,129 | | | | 337,314 | |
| Gross profit | | | 338,886 | | | | 392,100 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| Selling, general and administrative costs | | | 151,818 | | | | 150,875 | |
| Research and development costs | | | 89,762 | | | | 90,088 | |
| Amortization of acquired intangibles | | | 62,696 | | | | 63,672 | |
| Termination of Sponsor Advisory Agreement | | | - | | | | 18,133 | |
| Restructuring charges | | | 6,779 | | | | 14,783 | |
| Impairment of goodwill and other long-lived assets | | | 56,700 | | | | - | |
| Change in fair value of acquisition contingent consideration liability | | | (7,553 | ) | | | 1,834 | |
| Total operating expenses | | | 360,202 | | | | 339,385 | |
| Operating income (loss) | | | (21,316 | ) | | | 52,715 | |
| | | | | | | | | |
| Other income (expense): | | | | | | | | |
| Interest expense | | | (34,237 | ) | | | (66,204 | ) |
| Loss on extinguishment of debt and write-off of deferred financing costs | | | (1,232 | ) | | | (59,395 | ) |
| Gain from a bargain purchase of a business | | | - | | | | 173 | |
| Other income (expense), net | | | (1,745 | ) | | | (775 | ) |
| Total other income (expense), net | | | (37,214 | ) | | | (126,201 | ) |
| | | | | | | | | |
| Income (loss) before income taxes | | | (58,530 | ) | | | (73,486 | ) |
| Provision (benefit) for income taxes | | | (4,893 | ) | | | (38,818 | ) |
| Net income (loss) | | $ | (53,637 | ) | | $ | (34,668 | ) |
| | | | | | | | | |
| Net income (loss) per common share: | | | | | | | | |
| Basic | | $ | (0.63 | ) | | $ | (0.45 | ) |
| Diluted | | $ | (0.63 | ) | | $ | (0.45 | ) |
| | | | | | | | | |
| Weighted average number of common shares outstanding: | | | | | | | | |
| Basic | | | 84,811 | | | | 77,153 | |
| Diluted | | | 84,811 | | | | 77,153 | |
Selected Segment Data
(In thousands except percentages)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Net sales: | | | | | | | | | | | | | | | | |
| Microelectronic solutions ("AMS") | | $ | 109,060 | | | $ | 105,649 | | | $ | 366,745 | | | $ | 370,035 | |
| Test solutions ("ATS") | | | 75,671 | | | | 93,036 | | | | 306,270 | | | | 359,379 | |
| Total net sales | | $ | 184,731 | | | $ | 198,685 | | | $ | 673,015 | | | $ | 729,414 | |
| | | | | | | | | | | | | | | | | |
| Gross profit: | | | | | | | | | | | | | | | | |
| - AMS | | $ | 59,078 | | | $ | 57,108 | | | $ | 188,743 | | | $ | 192,494 | |
| - ATS | | | 36,425 | | | | 53,968 | | | | 150,143 | | | | 199,606 | |
| Total gross profit | | $ | 95,503 | | | $ | 111,076 | | | $ | 338,886 | | | $ | 392,100 | |
| | | | | | | | | | | | | | | | | |
| Gross Margin: | | | | | | | | | | | | | | | | |
| - AMS | | | 54.2 | % | | | 54.1 | % | | | 51.5 | % | | | 52.0 | % |
| - ATS | | | 48.1 | % | | | 58.0 | % | | | 49.0 | % | | | 55.5 | % |
| Total gross margin | | | 51.7 | % | | | 55.9 | % | | | 50.4 | % | | | 53.8 | % |
Aeroflex Holding Corp. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | |
| Assets | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 41,324 | | | $ | 66,278 | |
| Accounts receivable, less allowance for doubtful accounts of $981 and $1,210 | | | 146,597 | | | | 168,141 | |
| Inventories | | | 158,090 | | | | 186,370 | |
| Deferred income taxes | | | 33,315 | | | | 51,855 | |
| Income taxes receivable | | | 4,935 | | | | - | |
| Prepaid expenses and other current assets | | | 11,942 | | | | 10,044 | |
| Total current assets | | | 396,203 | | | | 482,688 | |
| | | | | | | | | |
| Property, plant and equipment, net of accumulated depreciation of $102,310 and $82,581 | | | 101,632 | | | | 105,162 | |
| Deferred financing costs, net | | | 15,720 | | | | 15,289 | |
| Other assets | | | 34,955 | | | | 29,000 | |
| Intangible assets with definite lives, net | | | 119,476 | | | | 183,614 | |
| Intangible assets with indefinite lives | | | 113,461 | | | | 114,730 | |
| Goodwill | | | 408,361 | | | | 465,443 | |
| | | | | | | | | |
| Total assets | | $ | 1,189,808 | | | $ | 1,395,926 | |
| | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Current portion of long-term debt | | $ | - | | | $ | 7,635 | |
| Accounts payable | | | 26,822 | | | | 48,737 | |
| Advance payments by customers and deferred revenue | | | 23,433 | | | | 25,859 | |
| Income taxes payable | | | 593 | | | | 8,371 | |
| Accrued payroll expenses | | | 18,635 | | | | 22,063 | |
| Accrued expenses and other current liabilities | | | 37,559 | | | | 45,772 | |
| Total current liabilities | | | 107,042 | | | | 158,437 | |
| | | | | | | | | |
| Long-term debt | | | 641,375 | | | | 717,750 | |
| Deferred income taxes | | | 94,022 | | | | 117,150 | |
| Other long-term liabilities | | | 20,592 | | | | 19,065 | |
| Total liabilities | | | 863,031 | | | | 1,012,402 | |
| | | | | | | | | |
| Stockholders' equity: | | | | | | | | |
| Preferred stock, par value $.01 per share; 50,000,000 shares authorized, no shares issued and outstanding | | | - | | | | - | |
| Common stock, par value $.01 per share; 300,000,000 shares authorized; 84,845,687 and 84,789,180 shares issued and outstanding | | | 848 | | | | 848 | |
| Additional paid-in capital | | | 648,092 | | | | 644,262 | |
| Accumulated other comprehensive income (loss) | | | (39,476 | ) | | | (32,536 | ) |
| Accumulated deficit | | | (282,687 | ) | | | (229,050 | ) |
| Total stockholders' equity | | | 326,777 | | | | 383,524 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 1,189,808 | | | $ | 1,395,926 | |
Aeroflex Holding Corp. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
| | | Year Ended June 30, | |
| | | 2012 | | | 2011 | |
| Cash flows from operating activities: | | | | | | | | |
| Net income (loss) | | $ | (53,637 | ) | | $ | (34,668 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | | | | | |
| Depreciation and amortization | | | 84,298 | | | | 83,459 | |
| Gain from a bargain purchase of a business | | | - | | | | (173 | ) |
| Change in fair value of acquisition contingent consideration liability | | | (7,553 | ) | | | 1,834 | |
| Acquisition related adjustment to cost of sales | | | - | | | | 998 | |
| Acquisition related adjustment to sales | | | - | | | | 157 | |
| Impairment of goodwill and other long-lived assets | | | 56,700 | | | | - | |
| Loss on extinguishment of debt and write-off of deferred financing costs | | | 1,232 | | | | 59,395 | |
| Deferred income taxes | | | (3,724 | ) | | | (53,626 | ) |
| Share-based compensation | | | 3,527 | | | | 2,254 | |
| Non - cash restructuring charges | | | 1,015 | | | | 4,860 | |
| Amortization of deferred financing costs | | | 2,023 | | | | 4,755 | |
| Paid in kind interest | | | - | | | | 2,434 | |
| Other, net | | | 613 | | | | 1,103 | |
| Change in operating assets and liabilities, net of effects from purchases of businesses: | | | | | | | | |
| Decrease (increase) in accounts receivable | | | 19,884 | | | | (20,577 | ) |
| Decrease (increase) in inventories | | | 25,494 | | | | (54,993 | ) |
| Decrease (increase) in prepaid expenses and other assets | | | (6,359 | ) | | | (5,519 | ) |
| Increase (decrease) in accounts payable, accrued expenses and other liabilities | | | (33,066 | ) | | | 2,849 | |
| | | | | | | | | |
| Net cash provided by (used in) operating activities | | | 90,447 | | | | (5,458 | ) |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Payments for purchase of businesses, net of cash acquired | | | (5,106 | ) | | | (23,717 | ) |
| Capital expenditures | | | (21,773 | ) | | | (25,957 | ) |
| Proceeds from sale of marketable securities | | | - | | | | 10,357 | |
| Proceeds from the sale of property, plant and equipment | | | 420 | | | | 995 | |
| | | | | | | | | |
| Net cash provided by (used in) investing activities | | | (26,459 | ) | | | (38,322 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Credit facility borrowings | | | - | | | | 725,000 | |
| Net proceeds from issuance of common stock | | | - | | | | 243,995 | |
| Repurchase of senior unsecured notes and senior subordinated unsecured term loans, including premiums and fees | | | - | | | | (432,526 | ) |
| Payment of contingent consideration related to business acquisition | | | (948 | ) | | | - | |
| Debt repayments | | | (84,010 | ) | | | (510,923 | ) |
| Deferred financing costs | | | (3,685 | ) | | | (18,903 | ) |
| Other, net | | | (37 | ) | | | - | |
| | | | | | | | | |
| Net cash provided by (used in) financing activities | | | (88,680 | ) | | | 6,643 | |
| | | | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | | (262 | ) | | | 2,752 | |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | (24,954 | ) | | | (34,385 | ) |
| Cash and cash equivalents at beginning of year | | | 66,278 | | | | 100,663 | |
| | | | | | | | | |
| Cash and cash equivalents at end of year | | $ | 41,324 | | | $ | 66,278 | |
Aeroflex Holding Corp. and Subsidiaries
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income
(In thousands)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Operating income (loss) -GAAP | | $ | 30,963 | | | $ | 30,031 | | | $ | (21,316 | ) | | $ | 52,715 | |
| Amortization of acquired intangibles | | | 15,653 | | | | 15,966 | | | | 62,696 | | | | 63,672 | |
| Impact of purchase accounting adjustments | | | 71 | | | | 157 | | | | 282 | | | | 1,645 | |
| Change in fair value of acquisition contingent consideration liability | | | (8,850 | ) | | | 641 | | | | (7,553 | ) | | | 1,834 | |
| Merger related expenses | | | - | | | | - | | | | - | | | | 1,222 | |
| Restructuring costs and related pro forma savings (a) | | | 2,832 | | | | 5,253 | | | | 14,783 | | | | 21,085 | |
| Share-based compensation | | | 878 | | | | 599 | | | | 3,527 | | | | 2,254 | |
| Termination of Sponsor Advisory Agreement | | | - | | | | - | | | | - | | | | 18,133 | |
| Impairment of goodwill and other long-lived assets | | | (3,000 | ) | | | - | | | | 56,700 | | | | - | |
| Other adjustments | | | 446 | | | | 558 | | | | 3,560 | | | | 2,284 | |
| Operating income - non-GAAP | | $ | 38,993 | | | $ | 53,205 | | | $ | 112,679 | | | $ | 164,844 | |
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
(In thousands)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Net income (loss) -GAAP | | $ | 17,201 | | | $ | (21,575 | ) | | $ | (53,637 | ) | | $ | (34,668 | ) |
| Amortization of acquired intangibles | | | 15,653 | | | | 15,966 | | | | 62,696 | | | | 63,672 | |
| Impact of purchase accounting adjustments | | | 71 | | | | 157 | | | | 282 | | | | 1,645 | |
| Change in fair value of acquisition contingent consideration liability | | | (8,850 | ) | | | 641 | | | | (7,553 | ) | | | 1,834 | |
| Merger related expenses | | | - | | | | - | | | | - | | | | 1,222 | |
| Restructuring costs and related pro forma savings (a) | | | 2,832 | | | | 5,253 | | | | 14,783 | | | | 21,085 | |
| Share-based compensation | | | 878 | | | | 599 | | | | 3,527 | | | | 2,254 | |
| Termination of Sponsor Advisory Agreement | | | - | | | | - | | | | - | | | | 18,133 | |
| Impairment of goodwill and other long-lived assets | | | (3,000 | ) | | | - | | | | 56,700 | | | | - | |
| Loss on extinguishment of debt and write-off of deferred financing costs | | | 368 | | | | 34,217 | | | | 1,232 | | | | 59,395 | |
| Gain from a bargain purchase of a business | | | - | | | | - | | | | - | | | | (173 | ) |
| Amortization of deferred financing costs | | | 508 | | | | 779 | | | | 2,023 | | | | 4,755 | |
| Other adjustments | | | 446 | | | | 558 | | | | 3,560 | | | | 2,972 | |
| Tax impact of adjustments | | | (6,889 | ) | | | (6,695 | ) | | | (34,807 | ) | | | (70,843 | ) |
| Net income -non-GAAP | | $ | 19,218 | | | $ | 29,900 | | | $ | 48,806 | | | $ | 71,283 | |
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands)
| | | Three Months Ended | | | Year Ended | |
| | | June 30, | | | June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| Net income (loss) -GAAP | | $ | 17,201 | | | $ | (21,575 | ) | | $ | (53,637 | ) | | $ | (34,668 | ) |
| Interest expense | | | 8,851 | | | | 10,401 | | | | 34,237 | | | | 66,204 | |
| Provision (benefit) for income taxes | | | 3,742 | | | | 6,739 | | | | (4,893 | ) | | | (38,818 | ) |
| Depreciation and amortization | | | 21,435 | | | | 21,033 | | | | 84,298 | | | | 83,459 | |
| EBITDA | | | 51,229 | | | | 16,598 | | | | 60,005 | | | | 76,177 | |
| | | | | | | | | | | | | | | | | |
| Non-cash purchase accounting adjustments | | | - | | | | 88 | | | | - | | | | 1,155 | |
| Change in fair value of acquisition contingent consideration liability | | | (8,850 | ) | | | 641 | | | | (7,553 | ) | | | 1,834 | |
| Merger related expenses | | | - | | | | - | | | | - | | | | 1,222 | |
| Restructuring costs and related pro forma savings (a) | | | 2,832 | | | | 5,253 | | | | 14,783 | | | | 21,085 | |
| Share-based compensation | | | 878 | | | | 599 | | | | 3,527 | | | | 2,254 | |
| Termination of Sponsor Advisory Agreement | | | - | | | | - | | | | - | | | | 18,133 | |
| Impairment of goodwill and other long-lived assets | | | (3,000 | ) | | | - | | | | 56,700 | | | | - | |
| Loss on extinguishment of debt and write-off of deferred | | | | | | | | | | | | | | | | |
| financing costs | | | 368 | | | | 34,217 | | | | 1,232 | | | | 59,395 | |
| Gain from a bargain purchase of a business | | | - | | | | - | | | | - | | | | (173 | ) |
| Other defined items (b) | | | 114 | | | | 464 | | | | 2,788 | | | | 2,616 | |
| Adjusted EBITDA | | $ | 43,571 | | | $ | 57,860 | | | $ | 131,482 | | | $ | 183,698 | |
| (a) | Primarily reflects costs associated with the reorganization of our European operations and consolidation of certain of our U.S. components facilities. Pro forma savings reflect the costs that we estimate would have been eliminated during the fiscal year in which a restructuring occurred had the restructuring occurred as of the first day of that fiscal year. Pro forma savings were estimated to be $8.0 million for the year ended June 30, 2012, $1.4 million of which is applicable to the three months ended June 30, 2012, $1.9 million applicable to the three months ended March 31, 2012, $2.1 million applicable to the three months ended December 31, 2011 and $2.6 million applicable to the three months ended September 30, 2011. Pro forma savings were estimated to be $6.3 million for the year ended June 30, 2011, $1.3 million of which is applicable to the three months ended June 30, 2011, $1.7 million applicable to the three months ended March 31, 2011, $1.9 million applicable to the three months ended December 31, 2010 and $1.4 million applicable to the three months ended September 30, 2010. |
| (b) | Reflects other adjustments required in calculating our debt covenant compliance. These other defined items include legal fees related to litigation, business acquisition costs and pro forma EBITDA for periods prior to the acquisition dates for companies acquired during the respective fiscal year. |
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