IMMEDIATE RELEASE
TOWNSQUARE REPORTS THIRD QUARTER 2018 RESULTS
Greenwich, CT - November 6, 2018 - Townsquare Media, Inc. (NYSE: TSQ) ("Townsquare," the "Company," "we," "us," or "our") today announced its financial results for the third quarter ended September 30, 2018.
“We are pleased to announce another strong quarter at Townsquare, our fourth since Bill Wilson and I started our partnership as Co-Chief Executive Officers one year ago,” commented Dhruv Prasad, Co-Chief Executive Officer of Townsquare. “We implemented a strategic plan focused on the stability and profitable growth of Townsquare’s local branded media, marketing solutions, and live events businesses, and that plan has helped yield three consecutive quarters of revenue and EBITDA growth so far in 2018.”
“Our third quarter results were at the top end of our previously issued guidance and are reflective of the strong performance we have generated with our ‘local first’ strategy," commented Bill Wilson, Co-Chief Executive Officer of Townsquare. “Net revenue increased 1.9% and Adjusted EBITDA increased 6.9% in the third quarter, driven by the continued impressive growth of our digital businesses, particularly Townsquare Interactive and Townsquare Ignite."
The Company also announced today that its Board of Directors approved a quarterly cash dividend of $0.075 per share. The dividend will be payable on February 15, 2019 to shareholders of record as of the close of business on December 27, 2018.
Third Quarter Highlights*
| |
| • | As compared to the third quarter of 2017 on a GAAP basis: |
| |
| • | Net revenue increased 1.9%, and 9.5% excluding live events net revenue |
| |
| • | Net revenue increased 0.1% excluding political revenue |
| |
| • | Net income decreased 32.2%, and net income from continuing operations increased 38.6% |
| |
| • | Adjusted EBITDA increased 6.9% |
| |
| • | Townsquare Interactive net revenue increased 22.9% |
| |
| • | As compared to the third quarter 2017 on a pro forma basis: |
| |
| • | Net revenue increased 0.3% and 7.3% excluding live events revenue |
| |
| • | Net income decreased 34.8% |
| |
| • | Adjusted EBITDA increased 4.6% |
| |
| • | Diluted net income per share from continuing operations and diluted Adjusted Net Income Per Share were $0.35 and $0.36, respectively |
| |
| • | Townsquare Interactive added 850 net subscribers, ending the quarter with approximately 14,500 subscribers |
Year to Date Highlights*
| |
| • | As compared to the nine months ended September 30, 2017: |
| |
| • | Net revenue increased 2.4%, and 6.5% excluding live events net revenue |
| |
| • | Net revenue increased 1.4% excluding political revenue |
| |
| • | Net income decreased $32.1 million, and net income from continuing operations increased 46.1% |
| |
| • | Adjusted EBITDA increased 6.7% |
| |
| • | Townsquare Interactive net revenue increased 18.8% |
| |
| • | As compared to the nine months ended September 30, 2017 on a pro forma basis: |
| |
| • | Net revenue increased 1.8% and 5.7% excluding live events net revenue |
| |
| • | Net income decreased $32.6 million |
| |
| • | Adjusted EBITDA increased 5.8% |
| |
| • | Repaid $9.5 million of long-term debt |
* See below for discussion of non-GAAP measures and reconciliations to GAAP measures.
Quarter Ended September 30, 2018 Compared to the Quarter Ended September 30, 2017
Net Revenue
Net revenue for the quarter ended September 30, 2018 increased $2.2 million, or 1.9%, to $114.1 million, as compared to $111.9 million in the same period last year. Excluding political revenue, net revenue increased $0.1 million, or 0.1%, to $111.8 million, as compared to $111.7 million in the same period last year. Excluding live events net revenue, which was budgeted to decline in 2018, net revenue increased $8.7 million, or 9.5%, to $101.1 million, as compared to $92.3 million in the same period last year.
Pro forma net revenue for the quarter ended September 30, 2018 increased $0.3 million, or 0.3%, to $114.1 million, as compared to $113.8 million in the same period last year. As used in this release, the term “pro forma” means pro forma for our acquisition of three radio stations in Princeton, NJ on July 2, 2018. Excluding political revenue, net revenue decreased $1.8 million, or 1.6%, to $111.8 million, as compared to $113.6 million in the same period last year. Excluding live events net revenue, which was budgeted to decline in 2018, net revenue increased $6.9 million, or 7.3%, to $101.1 million, as compared to $94.2 million in the same period last year.
Net Income
Net income for the quarter ended September 30, 2018 decreased $4.6 million, or 32.2%, to $9.7 million, as compared to $14.3 million in the same period last year. Net income from continuing operations increased $2.7 million or 38.6%, to $9.8 million, as compared to $7.1 million in the same period last year.
Pro forma net income for the quarter ended September 30, 2018 decreased $5.2 million, or 34.8%, to $9.7 million, as compared to $14.9 million in the same period last year.
Adjusted EBITDA
Adjusted EBITDA for the quarter ended September 30, 2018 increased $1.8 million, or 6.9%, to $27.8 million, as compared to $26.0 million in the same period last year.
Pro forma Adjusted EBITDA for the quarter ended September 30, 2018 increased $1.2 million, or 4.6%, to $27.8 million as compared to $26.6 million in the same period last year.
Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017
Net Revenue
Net revenue for the nine months ended September 30, 2018 increased $7.5 million, or 2.4%, to $321.6 million, as compared to $314.1 million in the same period last year. Excluding political revenue, net revenue increased $4.4 million, or 1.4%, to $317.3 million, as compared to $312.9 million in the same period last year. Excluding live events net revenue, which was budgeted to decline in 2018, net revenue increased $17.2 million, or 6.5%, to $281.4 million, as compared to $264.2 million in the same period last year.
Pro forma net revenue for the nine months ended September 30, 2018 increased $5.7 million, or 1.8%, to $325.3 million, as compared to $319.5 million in the same period last year. Excluding political revenue, net revenue increased $2.6 million, or 0.8%, to $320.9 million, as compared to $318.3 million in the same period last year. Excluding live events net revenue, which was budgeted to decline in 2018, net revenue increased $15.5 million, or 5.7%, to $284.9 million, as compared to $269.4 million in the same period last year.
Net (Loss) Income
Net (loss) income for the nine months ended September 30, 2018 decreased $32.1 million, to a net loss of $15.3 million, as compared to net income of $16.8 million in the same period last year. Net income from continuing operations increased $7.2 million, or 46.1%, to $22.7 million, as compared to $15.5 million in the same period last year.
Pro forma net (loss) income for the nine months ended September 30, 2018 decreased $32.6 million, to a net loss of $14.2 million, as compared to net income of $18.4 million in the same period last year.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2018 increased $4.5 million, or 6.7%, to $72.7 million, as compared to $68.1 million in the same period last year.
Pro forma Adjusted EBITDA for the nine months ended September 30, 2018 increased $4.0 million, or 5.8%, to $73.7 million, as compared to $69.7 million in the same period last year.
Liquidity and Capital Resources
As of September 30, 2018, we had a total of $49.6 million of cash on hand and $50.0 million of available borrowing capacity under our revolving credit facility. As of September 30, 2018, we had $562.4 million of outstanding indebtedness, representing 5.8x and 5.3x gross and net leverage, respectively, based on pro forma Adjusted EBITDA for the twelve months ended September 30, 2018 of $96.2 million.
The table below presents a summary, as of November 5, 2018, of our outstanding common stock and securities convertible into common stock, excluding options issued under our 2014 Omnibus Incentive Plan.
|
| | | | |
| Security | | Number Outstanding1 | Description |
| Class A common stock | | 14,297,066 |
| One vote per share. |
| Class B common stock | | 3,011,634 |
| 10 votes per share.2 |
| Class C common stock | | 1,636,341 |
| No votes.2 |
| Warrants | | 8,977,676 |
| Each warrant is exercisable for one share of Class A common stock, at an exercise price of $0.0001 per share. The aggregate exercise price for all warrants currently outstanding is $898.3 |
| Total | | 27,922,717 |
| |
| | | | |
1 Each of the shares of common stock listed below, including the shares of Class A common stock issuable upon exercise of the warrants, has equal economic rights. |
2 Each share converts into 1 share of Class A common stock upon transfer or at the option of the holder, subject to certain conditions, including compliance with FCC rules. |
3 The warrants are fully vested and exercisable for shares of Class A common stock, subject to certain conditions, including compliance with FCC rules. |
Conference Call
Townsquare Media, Inc. will host a conference call to discuss certain third quarter 2018 financial results on Tuesday, November 6, 2018 at 8:00 a.m. Eastern Time. The conference call dial-in number is 1-877-407-0784 (U.S. & Canada) or 1-201-689-8560 (International) and the confirmation code is 13683816. A live webcast of the conference call will also be available on the equity investor relations page of the Company's website at www.townsquaremedia.com.
A replay of the conference call will be available through November 15, 2018. To access the replay, please dial 1-844-512-2921 (U.S. & Canada) or 1-412-317-6671 (International) and enter confirmation code 13683816. A web-based archive of the conference call will also be available at the above website for thirty days after the call.
About Townsquare Media, Inc.
Townsquare is a radio, digital media, entertainment and digital marketing solutions company principally focused on being the premier local advertising and marketing solutions platform in small and mid-sized markets across the U.S. Our assets include 321 radio stations and more than 330 local websites in 67 U.S. markets, a digital marketing solutions company (Townsquare Interactive) serving approximately 14,500 small to medium sized businesses, a proprietary digital programmatic advertising platform (Townsquare Ignite) and approximately 200 live events with over one million attendees each year. Our brands include local media assets such as WYRK, KLAQ, K2 and NJ101.5; iconic regional and national events such as the Taste of Country Music Festival, WE Fest, Country Jam, the Boise Music Festival, the Red Dirt BBQ & Music Festival and Taste of Fort Collins; and leading tastemaker music and entertainment websites such as XXLmag.com, TasteofCountry.com and Loudwire.com. For more information, please visit www.townsquaremedia.com, www.townsquareinteractive.com, and www.townsquareignite.com.
Forward-Looking Statements
Except for the historical information contained in this press release, the matters addressed are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “believe,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms. By nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. See “Risk Factors” and “Forward-Looking Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on or about the date hereof, for a discussion of factors that could cause our actual results to differ from those expressed or implied by forward-looking statements. Townsquare Media, Inc. assumes no responsibility to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures and Definitions
In this press release, we refer to Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income, and Adjusted Net Income Per Share which are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
We define Adjusted EBITDA as net income (loss) before the deduction of income taxes, interest expense, net, transaction costs, depreciation and amortization, stock-based compensation, business realignment costs, goodwill and other intangible impairment charges, net (income) loss from discontinued operations, net of income taxes, net gain (loss) on sale and retirement of assets, and other expense (income) net. Adjusted EBITDA Less Interest, Capex and Taxes is defined as Adjusted EBITDA less net cash interest expense, capital expenditures and cash paid for taxes. Adjusted Net Income is defined as net income (loss) before the deduction of transaction costs, business realignment costs, goodwill and other intangible impairment charges, net (loss) income from discontinued operations, net of income taxes, and net (gain) loss on sale and retirement of assets. Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the weighted average shares outstanding. These measures do not represent, and should not be considered as alternatives to, net income (loss), or cash flows from operations, as determined under GAAP. In addition, these non-GAAP measures may not be comparable to similarly-named measures reported by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are set forth in the tables below. Where we use the term “pro forma”, it refers to pro forma financial information for our acquisition of three radio stations in Princeton, NJ on July 2, 2018. as if the acquisition had occurred on January 1, 2017.
We use Adjusted EBITDA to facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in capital structures (affecting interest expense), taxation and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. We use Adjusted Net Income and Adjusted Net Income Per Share to assess total company operating performance on a consistent basis. We believe that these measures, when considered together with our GAAP financial results, provide management and investors with a more complete understanding of our business operating results, including underlying trends, by excluding the effects of transaction costs, net (loss) gain on sale and retirement of assets, business realignment costs, certain impairments, and net income (loss) from discontinued operations. Further, while discretionary bonuses for members of management are not determined with reference to specific targets, our Board of Directors may consider Adjusted EBITDA, Adjusted EBITDA Less Interest, Capex and Taxes, Adjusted Net Income, and Adjusted Net Income Per Share when determining discretionary bonuses.
Investor Relations
Claire Yenicay
(203) 900-5555
investors@townsquaremedia.com
TOWNSQUARE MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in Thousands, Except Share and Per Share Data)
(unaudited)
|
| | | | | | | |
| | September 30,
2018 | | December 31,
2017 |
| ASSETS | | | |
| Current assets: | | | |
| Cash | $ | 49,632 |
| | $ | 61,205 |
|
| Accounts receivable, net of allowance of $1,797 and $1,079, respectively | 68,438 |
| | 61,558 |
|
| Prepaid expenses and other current assets | 9,002 |
| | 7,540 |
|
| Current assets held for sale | — |
| | 879 |
|
| Current assets of discontinued operations | 38 |
| | 7,222 |
|
| Total current assets | 127,110 |
| | 138,404 |
|
| Property and equipment, net | 110,306 |
| | 104,030 |
|
| Intangible assets, net | 500,641 |
| | 495,501 |
|
| Goodwill | 251,802 |
| | 241,888 |
|
| Investments | 14,512 |
| | 8,092 |
|
| Other assets | 7,159 |
| | 8,965 |
|
| Long-term assets of discontinued operations | — |
| | 59,478 |
|
| Total assets | $ | 1,011,530 |
| | $ | 1,056,358 |
|
| | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| Current liabilities: | | | |
| Accounts payable | $ | 10,875 |
| | $ | 13,442 |
|
| Current portion of long-term debt | 5 |
| | 9,524 |
|
| Deferred revenue | 9,303 |
| | 17,281 |
|
| Accrued expenses and other current liabilities | 26,286 |
| | 24,919 |
|
| Accrued interest | 9,227 |
| | 5,699 |
|
| Current liabilities of discontinued operations | 223 |
| | 2,440 |
|
| Total current liabilities | 55,919 |
| | 73,305 |
|
| Long-term debt, less current portion (net of deferred finance costs of $5,568 and $6,803, respectively) | 556,849 |
| | 555,618 |
|
| Deferred tax liabilities | 30,502 |
| | 26,283 |
|
| Other long-term liabilities | 8,767 |
| | 9,390 |
|
| Long-term liabilities of discontinued operations | — |
| | 10,682 |
|
| Total liabilities | 652,037 |
| | 675,278 |
|
| Stockholders’ equity: | | | |
| Class A common stock, par value $0.01 per share; 300,000,000 shares authorized; 14,297,066 and 13,819,639 shares issued and outstanding, respectively | 143 |
| | 138 |
|
| Class B common stock, par value $0.01 per share; 50,000,000 shares authorized; 3,011,634 and 3,022,484 shares issued and outstanding, respectively | 30 |
| | 30 |
|
| Class C common stock, par value $0.01 per share; 50,000,000 shares authorized; 1,636,341 shares issued and outstanding | 17 |
| | 17 |
|
| Total common stock | 190 |
| | 185 |
|
| Additional paid-in capital | 365,366 |
| | 367,041 |
|
| Retained (deficit) earnings | (6,956 | ) | | 13,265 |
|
| Accumulated other comprehensive loss | — |
| | (532 | ) |
| Non-controlling interest | 893 |
| | 1,121 |
|
| Total stockholders' equity | 359,493 |
| | 381,080 |
|
| Total liabilities and stockholders' equity | $ | 1,011,530 |
| | $ | 1,056,358 |
|
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in Thousands, Except Per Share Data)
(unaudited)
|
| | | | | | | | | | | | | | | |
| Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| | | | | | | | |
| Net revenue | $ | 114,073 |
| | $ | 111,897 |
| | $ | 321,641 |
| | $ | 314,129 |
|
| | | | | | | | |
| Operating costs and expenses: | | | | | | | |
| Direct operating expenses, excluding depreciation, amortization and stock-based compensation | 79,384 |
| | 79,473 |
| | 229,176 |
| | 227,640 |
|
| Depreciation and amortization | 4,854 |
| | 4,833 |
| | 14,082 |
| | 14,779 |
|
| Corporate expenses | 6,863 |
| | 6,390 |
| | 19,802 |
| | 18,375 |
|
| Stock-based compensation | 597 |
| | 193 |
| | 1,033 |
| | 549 |
|
| Transaction costs | 167 |
| | 218 |
| | 1,003 |
| | 606 |
|
| Net (gain) loss on sale and retirement of assets | (4 | ) | | (63 | ) | | (401 | ) | | 652 |
|
| Total operating costs and expenses | 91,861 |
| | 91,044 |
| | 264,695 |
| | 262,601 |
|
| Operating income | 22,212 |
| | 20,853 |
| | 56,946 |
| | 51,528 |
|
| Other expenses: | | | | | | | |
| Interest expense, net | 8,640 |
| | 8,230 |
| | 25,600 |
| | 24,474 |
|
| Other expense, net | 42 |
| | 250 |
| | 122 |
| | 326 |
|
| Income from continuing operations before income taxes | 13,530 |
| | 12,373 |
| | 31,224 |
| | 26,728 |
|
| Provision from income taxes | 3,699 |
| | 5,279 |
| | 8,517 |
| | 11,185 |
|
| Net income from continuing operations | 9,831 |
| | 7,094 |
| | 22,707 |
| | 15,543 |
|
| Net (loss) income from discontinued operations, net of income taxes | (140 | ) | | 7,198 |
| | (37,972 | ) | | 1,303 |
|
| Net income (loss) | $ | 9,691 |
| | $ | 14,292 |
| | $ | (15,265 | ) | | $ | 16,846 |
|
| | | | | | | | |
| Net income (loss) attributable to | | | | | | | |
| Controlling interests | $ | 9,295 |
| | $ | 14,216 |
| | $ | (16,215 | ) | | $ | 16,320 |
|
| Non-controlling interests | 396 |
| | 76 |
| | 950 |
| | 526 |
|
| | | | | | | | |
| Basic income (loss) per share: | | | | | | | |
| Continuing operations | $ | 0.52 |
| | $ | 0.38 |
| | $ | 1.21 |
| | $ | 0.84 |
|
| Discontinued operations | $ | (0.01 | ) | | $ | 0.39 |
| | $ | (2.03 | ) | | $ | 0.07 |
|
| | | | | | | | |
| Diluted income (loss) per share: | | | | | | | |
| Continuing operations | $ | 0.35 |
| | $ | 0.25 |
| | $ | 0.82 |
| | $ | 0.55 |
|
| Discontinued operations | $ | (0.01 | ) | | $ | 0.26 |
| | $ | (1.37 | ) | | $ | 0.05 |
|
| | | | | | | | |
| Weighted average shares outstanding: | | | | | | | |
| Basic | 18,941 |
| | 18,478 |
| | 18,690 |
| | 18,459 |
|
| Diluted | 27,919 |
| | 27,994 |
| | 27,668 |
| | 28,221 |
|
| | | | | | | | |
| Cash dividend declared per share | $ | 0.075 |
| | $ | — |
| | $ | 0.225 |
| | $ | — |
|
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in Thousands)
(unaudited) |
| | | | | | | |
| | Nine Months Ended
September 30, |
| | 2018 | | 2017 |
| Cash flows from operating activities: | | | |
| Net (loss) income | $ | (15,265 | ) | | $ | 16,846 |
|
| (Loss) income from discontinued operations | (37,972 | ) | | 1,303 |
|
| Income from continuing operations | 22,707 |
| | 15,543 |
|
| Adjustments to reconcile income from continuing operations to net cash flows from operating activities: | | | |
| Depreciation and amortization | 14,082 |
| | 14,779 |
|
| Amortization of deferred financing costs | 1,140 |
| | 1,232 |
|
| Deferred income tax expense | 8,517 |
| | 11,185 |
|
| Provision for doubtful accounts | 2,072 |
| | 1,734 |
|
| Stock-based compensation expense | 1,033 |
| | 549 |
|
| Trade activity, net | (10,197 | ) | | (7,256 | ) |
| Non-cash interest expense | (15 | ) | | — |
|
| Write-off of deferred financing costs | 97 |
| | 83 |
|
| Net (gain) loss on sale and retirement of assets | (401 | ) | | 652 |
|
| Changes in assets and liabilities, net of acquisitions: | | | |
| Accounts receivable | (4,579 | ) | | (4,535 | ) |
| Prepaid expenses and other assets | (191 | ) | | (1,669 | ) |
| Accounts payable | (5,913 | ) | | (2,372 | ) |
| Accrued expenses | (8,823 | ) | | (3,803 | ) |
| Accrued interest | 3,559 |
| | 4,580 |
|
| Other long-term liabilities | (623 | ) | | (623 | ) |
| Net cash provided by operating activities - continuing operations | 22,465 |
| | 30,079 |
|
| Net cash used in operating activities - discontinued operations | (10,442 | ) | | (5,008 | ) |
| Net cash provided by operating activities | 12,023 |
| | 25,071 |
|
| Cash flows from investing activities: | | | |
| Purchase of property and equipment | (12,684 | ) | | (12,277 | ) |
| Payments for acquisitions, net of cash acquired | (21,128 | ) | | (5,496 | ) |
| Payment for investment | — |
| | (807 | ) |
| Acquisition of intangibles | — |
| | (150 | ) |
| Proceeds from sale of assets | 726 |
| | 167 |
|
| Net cash used in investing activities - continuing operations | (33,086 | ) | | (18,563 | ) |
| Net cash provided by (used in) investing activities - discontinued operations | 23,792 |
| | (5,777 | ) |
| Net cash used in investing activities | (9,294 | ) | | (24,340 | ) |
| Cash flows from financing activities: | | | |
| Repayment of long-term debt | (9,519 | ) | | (6,662 | ) |
| Dividend payments | (4,120 | ) | | — |
|
| Deferred financing costs | (2 | ) | | (432 | ) |
| Proceeds from exercise of employee stock options | — |
| | 346 |
|
| Cash distribution to non-controlling interest | (514 | ) | | (293 | ) |
| Repayments of capitalized obligations | (4 | ) | | (90 | ) |
| Net cash used in financing activities - continuing operations | (14,159 | ) | | (7,131 | ) |
| Net cash used in financing activities - discontinued operations | (19 | ) | | (581 | ) |
| Net cash used in financing activities | (14,178 | ) | | (7,712 | ) |
| Effect of exchange rate changes | (124 | ) | | 43 |
|
| Net decrease in cash | (11,573 | ) | | (6,938 | ) |
| Cash and restricted cash: | | | |
| Beginning of period | 61,205 |
| | 47,145 |
|
| End of period | $ | 49,632 |
| | $ | 40,207 |
|
TOWNSQUARE MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in Thousands)
(unaudited)
|
| | | | | | | |
| | Nine Months Ended
September 30, |
| | 2018 | | 2017 |
| Supplemental Disclosure of Cash Flow Information: | | | |
| Cash payments: | | | |
| Interest | $ | 20,895 |
| | $ | 18,575 |
|
| Income taxes | 913 |
| | 588 |
|
| | | | |
| Supplemental Disclosure of Non-cash Activities: | | | |
| Dividends declared during the period | $ | 6,277 |
| | $ | — |
|
The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted Net Income for the three and nine months ended September 30, 2018 and 2017, respectively (dollars in thousands):
|
| | | | | | | | | | | | | | | |
| | Actual |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Net income from continuing operations | $ | 9,831 |
| | $ | 7,094 |
| | $ | 22,707 |
| | $ | 15,543 |
|
| Net (loss) income from discontinued operations, net of income taxes | (140 | ) | | 7,198 |
| | (37,972 | ) | | 1,303 |
|
| Net income (loss) | 9,691 |
| | 14,292 |
| | (15,265 | ) | | 16,846 |
|
| Provision for income taxes | 3,699 |
| | 5,279 |
| | 8,517 |
| | 11,185 |
|
| Income (loss) before income taxes | 13,390 |
| | 19,571 |
| | (6,748 | ) | | 28,031 |
|
| Transaction costs | 167 |
| | 218 |
| | 1,003 |
| | 606 |
|
| Net (gain) loss on sale and retirement of assets | (4 | ) | | (63 | ) | | (401 | ) | | 652 |
|
| Net loss (income) from discontinued operations, net of income taxes | 140 |
| | (7,198 | ) | | 37,972 |
| | (1,303 | ) |
| Adjusted net income before income taxes | 13,693 |
| | 12,528 |
| | 31,826 |
| | 27,986 |
|
| Provision for income taxes | 3,738 |
| | 5,187 |
| | 8,688 |
| | 11,586 |
|
| Adjusted Net Income | $ | 9,955 |
| | $ | 7,341 |
| | $ | 23,138 |
| | $ | 16,400 |
|
| | | | | | | | |
| Adjusted Net Income Per Share | | | | | | | |
| Basic | $ | 0.53 |
| | $ | 0.40 |
| | $ | 1.24 |
| | $ | 0.89 |
|
| Diluted | $ | 0.36 |
| | $ | 0.26 |
| | $ | 0.84 |
| | $ | 0.58 |
|
| | | | | | | | |
| Weighted average shares outstanding | | | | | | | |
| Basic | 18,941 |
| | 18,478 |
| | 18,690 |
| | 18,459 |
|
| Diluted | 27,919 |
| | 27,994 |
| | 27,668 |
| | 28,221 |
|
The following table reconciles net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis and for the twelve months ended September 30, 2018 (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | |
| | Actual |
| | Quarter Ended | | Twelve Months Ended |
| | December 31, 2017 | | March 31, 2018 | | June 30, 2018 | | September 30, 2018 | | September 30, 2018 |
| Net income (loss) | $ | 12,746 |
| | $ | (26,591 | ) | | $ | 1,634 |
| | $ | 9,691 |
| | $ | (2,520 | ) |
| Provision for income taxes | (18,331 | ) | | 1,095 |
| | 3,723 |
| | 3,699 |
| | (9,814 | ) |
| Interest expense, net | 8,279 |
| | 8,427 |
| | 8,532 |
| | 8,640 |
| | 33,878 |
|
| Transaction costs | 569 |
| | 160 |
| | 677 |
| | 167 |
| | 1,573 |
|
| Depreciation and amortization | 4,220 |
| | 4,601 |
| | 4,628 |
| | 4,854 |
| | 18,303 |
|
| Stock-based compensation | 177 |
| | 190 |
| | 246 |
| | 597 |
| | 1,210 |
|
| Business realignment costs | 1,328 |
| | — |
| | — |
| | — |
| | 1,328 |
|
| Goodwill and other intangible impairment charges | 16,858 |
| | — |
| | — |
| | — |
| | 16,858 |
|
| Net (income) loss from discontinued operations, net of income taxes | (3,743 | ) | | 29,392 |
| | 8,441 |
| | 140 |
| | 34,230 |
|
Other (a) | (227 | ) | | (290 | ) | | (28 | ) | | 38 |
| | (507 | ) |
| Adjusted EBITDA | $ | 21,876 |
| | $ | 16,984 |
| | $ | 27,853 |
| | $ | 27,826 |
| | $ | 94,539 |
|
(a) Other includes net (gain) loss on sale and retirement of assets and other expense (income), net.
The following table reconciles on a pro forma basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA on a quarterly basis and for the twelve months ended September 30, 2018 (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | | |
| | Pro Forma |
| | Quarter Ended | | Twelve Months Ended |
| | December 31, 2017 | | March 31, 2018 | | June 30, 2018 | | September 30, 2018 | | September 30, 2018 |
| Net income (loss) | $ | 12,746 |
| | $ | (26,591 | ) | | $ | 1,634 |
| | $ | 9,691 |
| | $ | (2,520 | ) |
| Net income from acquisition | 582 |
| | 282 |
| | 762 |
| | — |
| | 1,626 |
|
| Pro forma net income (loss) | 13,328 |
| | (26,309 | ) | | 2,396 |
| | 9,691 |
| | (894 | ) |
| Provision for income taxes | (18,331 | ) | | 1,095 |
| | 3,723 |
| | 3,699 |
| | (9,814 | ) |
| Interest expense, net | 8,279 |
| | 8,427 |
| | 8,532 |
| | 8,640 |
| | 33,878 |
|
| Transaction costs | 569 |
| | 160 |
| | 677 |
| | 167 |
| | 1,573 |
|
| Depreciation and amortization | 4,220 |
| | 4,601 |
| | 4,628 |
| | 4,854 |
| | 18,303 |
|
| Stock-based compensation | 177 |
| | 190 |
| | 246 |
| | 597 |
| | 1,210 |
|
| Business realignment costs | 1,328 |
| | — |
| | — |
| | — |
| | 1,328 |
|
| Goodwill and other intangible impairment charges | 16,858 |
| | — |
| | — |
| | — |
| | 16,858 |
|
| Net (income) loss from discontinued operations, net of income taxes | (3,743 | ) | | 29,392 |
| | 8,441 |
| | 140 |
| | 34,230 |
|
Other (a) | (227 | ) | | (290 | ) | | (28 | ) | | 38 |
| | (507 | ) |
| Pro Forma Adjusted EBITDA | $ | 22,458 |
| | $ | 17,266 |
| | $ | 28,615 |
| | $ | 27,826 |
| | $ | 96,165 |
|
(a) Other includes net (gain) loss on sale and retirement of assets and other (income) expense, net.
The following table reconciles on a GAAP basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA Less Interest, Capex and Taxes for the three and nine months ended September 30, 2018 and 2017, respectively (dollars in thousands):
|
| | | | | | | | | | | | | | | |
| | Actual |
| | Three Months Ended September 30, | | Nine Months Ended
September 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Net income from continuing operations | $ | 9,831 |
| | $ | 7,094 |
| | $ | 22,707 |
| | $ | 15,543 |
|
| Net (loss) income from discontinued operations, net of income taxes | (140 | ) | | 7,198 |
| | (37,972 | ) | | 1,303 |
|
| Net income (loss) | 9,691 |
| | 14,292 |
| | (15,265 | ) | | 16,846 |
|
| Provision for income taxes | 3,699 |
| | 5,279 |
| | 8,517 |
| | 11,185 |
|
| Interest expense, net | 8,640 |
| | 8,230 |
| | 25,600 |
| | 24,474 |
|
| Transaction costs | 167 |
| | 218 |
| | 1,003 |
| | 606 |
|
| Depreciation and amortization | 4,854 |
| | 4,833 |
| | 14,082 |
| | 14,779 |
|
| Stock-based compensation | 597 |
| | 193 |
| | 1,033 |
| | 549 |
|
| Net loss (income) from discontinued operations, net of income taxes | 140 |
| | (7,198 | ) | | 37,972 |
| | (1,303 | ) |
Other (a) | 38 |
| | 187 |
| | (279 | ) | | 978 |
|
| Adjusted EBITDA | $ | 27,826 |
| | $ | 26,034 |
| | $ | 72,663 |
| | $ | 68,114 |
|
| Net cash paid for interest | (3,719 | ) | | (3,262 | ) | | (20,895 | ) | | (18,575 | ) |
| Capital expenditures | (3,923 | ) | | (3,862 | ) | | (12,684 | ) | | (12,277 | ) |
| Cash paid for taxes | (186 | ) | | (36 | ) | | (913 | ) | | (588 | ) |
| Adjusted EBITDA Less Interest, Capex and Taxes | $ | 19,998 |
| | $ | 18,874 |
| | $ | 38,171 |
| | $ | 36,674 |
|
(a) Other includes net (gain) loss on sale and retirement of assets and other expense, net.
The following table reconciles on a pro forma basis net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA and Adjusted EBITDA Less Interest, Capex and Taxes for the three and nine months ended September 30, 2018 and 2017, respectively (dollars in thousands):
|
| | | | | | | | | | | | | | | |
| | Pro Forma |
| | Three Months Ended September 30, | | Nine Months Ended
September 30, |
| | 2018 | | 2017 | | 2018 | | 2017 |
| Net income from continuing operations | $ | 9,831 |
| | $ | 7,094 |
| | $ | 22,707 |
| | $ | 15,543 |
|
| Net (loss) income from discontinued operations, net of income taxes | (140 | ) | | 7,198 |
| | (37,972 | ) | | 1,303 |
|
| Net income (loss) | 9,691 |
| | 14,292 |
| | (15,265 | ) | | 16,846 |
|
| Net income from acquisition | — |
| | 572 |
| | 1,043 |
| | 1,576 |
|
| Pro forma net income (loss) | 9,691 |
| | 14,864 |
| | (14,222 | ) | | 18,422 |
|
| Provision for income taxes | 3,699 |
| | 5,279 |
| | 8,517 |
| | 11,185 |
|
| Interest expense, net | 8,640 |
| | 8,230 |
| | 25,600 |
| | 24,474 |
|
| Transaction costs | 167 |
| | 218 |
| | 1,003 |
| | 606 |
|
| Depreciation and amortization | 4,854 |
| | 4,833 |
| | 14,082 |
| | 14,779 |
|
| Stock-based compensation | 597 |
| | 193 |
| | 1,033 |
| | 549 |
|
| Net loss (income) from discontinued operations, net of income taxes | 140 |
| | (7,198 | ) | | 37,972 |
| | (1,303 | ) |
Other (a) | 38 |
| | 187 |
| | (279 | ) | | 978 |
|
| Pro Forma Adjusted EBITDA | $ | 27,826 |
| | $ | 26,606 |
| | $ | 73,706 |
| | $ | 69,690 |
|
| Net cash paid for interest | (3,719 | ) | | (3,262 | ) | | (20,895 | ) | | (18,575 | ) |
| Capital expenditures | (3,923 | ) | | (3,864 | ) | | (12,714 | ) | | (12,292 | ) |
| Cash paid for taxes | (186 | ) | | (36 | ) | | (913 | ) | | (588 | ) |
| Pro Forma Adjusted EBITDA Less Interest, Capex and Taxes | $ | 19,998 |
| | $ | 19,444 |
| | $ | 39,184 |
| | $ | 38,235 |
|
(a) Other includes net (gain) loss on sale and retirement of assets and other expense, net.
The following table provides the Company's quarterly net revenue on a GAAP basis for the five quarters ended September 30, 2018 (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | |
| | Actual |
| | September 30, 2017 | December 31, 2017 | | March 31, 2018 | | June 30, 2018 | | September 30, 2018 |
| Net Revenue | $ | 111,897 |
| $ | 97,263 |
| | $ | 87,991 |
| | $ | 119,577 |
| | $ | 114,073 |
|
The following table provides the Company's quarterly net revenue on a pro forma basis for the five quarters ended September 30, 2018 (dollars in thousands):
|
| | | | | | | | | | | | | | | | | | |
| | Pro Forma |
| | September 30, 2017 | December 31, 2017 | | March 31, 2018 | | June 30, 2018 | | September 30, 2018 |
| Pro Forma Net Revenue | $ | 113,781 |
| $ | 99,344 |
| | $ | 89,536 |
| | $ | 121,666 |
| | $ | 114,073 |
|
