ADVANTAGE SOLUTIONS INC.
SUMMARIZED QUARTERLY RESULTS
AS RECAST
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
(in thousands) | | June 30,
2024(a) | | | March 31,
2024 | | | December 31,
2023 | | | September 30,
2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31,
2022 | | | September 30,
2022 | | | June 30,
2022 | | | March 31,
2022 | | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Branded Services | | $ | 322,340 | | | $ | 329,054 | | | $ | 431,282 | | | $ | 451,173 | | | $ | 447,265 | | | $ | 428,697 | | | $ | 480,963 | | | $ | 444,317 | | | $ | 428,044 | | | $ | 410,752 | | |
Experiential Services | | | 319,508 | | | | 307,351 | | | | 308,727 | | | | 308,381 | | | | 285,174 | | | | 257,167 | | | | 253,557 | | | | 245,752 | | | | 221,863 | | | | 183,058 | | |
Retailer Services | | | 231,509 | | | | 225,007 | | | | 251,939 | | | | 260,152 | | | | 231,319 | | | | 238,849 | | | | 260,270 | | | | 264,976 | | | | 230,941 | | | | 221,849 | | |
Total revenues from continuing operations | | $ | 873,357 | | | $ | 861,412 | | | $ | 991,948 | | | $ | 1,019,706 | | | $ | 963,758 | | | $ | 924,713 | | | $ | 994,790 | | | $ | 955,045 | | | $ | 880,848 | | | $ | 815,659 | | |
Revenues from discontinued operations | | | 28,874 | | | | 44,634 | | | | 87,801 | | | | 76,353 | | | | 73,297 | | | | 87,270 | | | | 107,973 | | | | 96,050 | | | | 100,228 | | | | 99,149 | | |
Previously reported revenues from continuing and discontinued operations(b) | | $ | 902,231 | | | $ | 906,046 | | | $ | 1,079,749 | | | $ | 1,096,059 | | | $ | 1,037,055 | | | $ | 1,011,983 | | | $ | 1,102,763 | | | $ | 1,051,095 | | | $ | 981,076 | | | $ | 914,808 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating (Loss) Income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Branded Services | | $ | (107,280 | ) | | $ | (22,118 | ) | | $ | 33,779 | | | $ | (599 | ) | | $ | 8,920 | | | $ | 3,286 | | | $ | (800,471 | ) | | $ | 24,033 | | | $ | 10,123 | | | $ | 9,057 | | |
Experiential Services | | | 6,453 | | | | (3,642 | ) | | | 845 | | | | 1,971 | | | | 4,805 | | | | (4,326 | ) | | | (358,628 | ) | | | (1,390 | ) | | | (5,379 | ) | | | (6,503 | ) | |
Retailer Services | | | 9,568 | | | | (4,190 | ) | | | (13,962 | ) | | | 5,281 | | | | 1,526 | | | | 5,063 | | | | (392,537 | ) | | | 14,722 | | | | 5,511 | | | | 7,519 | | |
Total operating (loss) income from continuing operations | | $ | (91,259 | ) | | $ | (29,950 | ) | | $ | 20,662 | | | $ | 6,653 | | | $ | 15,251 | | | $ | 4,023 | | | $ | (1,551,636 | ) | | $ | 37,365 | | | $ | 10,255 | | | $ | 10,073 | | |
Operating income (loss) from discontinued operations | | | 9,820 | | | | 61,287 | | | | 25,530 | | | | 9,330 | | | | 7,020 | | | | (12,279 | ) | | | 14,098 | | | | 9,477 | | | | 18,011 | | | | 12,951 | | |
Previously reported operating (loss) income from continuing and discontinued operations(b) | | $ | (81,439 | ) | | $ | 31,337 | | | $ | 46,192 | | | $ | 15,983 | | | $ | 22,271 | | | $ | (8,256 | ) | | $ | (1,537,538 | ) | | $ | 46,842 | | | $ | 28,266 | | | $ | 23,024 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Branded Services | | $ | 42,856 | | | $ | 34,335 | | | $ | 49,385 | | | $ | 50,710 | | | $ | 51,787 | | | $ | 51,801 | | | $ | 64,663 | | | $ | 62,418 | | | $ | 58,289 | | | $ | 52,642 | | |
Experiential Services | | | 22,611 | | | | 16,693 | | | | 13,211 | | | | 16,584 | | | | 16,202 | | | | 7,006 | | | | 7,161 | | | | 10,520 | | | | 4,587 | | | | 3,281 | | |
Retailer Services | | | 24,431 | | | | 19,613 | | | | 24,229 | | | | 26,023 | | | | 21,865 | | | | 23,445 | | | | 18,433 | | | | 29,289 | | | | 24,720 | | | | 22,490 | | |
Total Adjusted EBITDA by segment from continuing operations | | $ | 89,898 | | | $ | 70,641 | | | $ | 86,825 | | | $ | 93,317 | | | $ | 89,854 | | | $ | 82,252 | | | $ | 90,257 | | | $ | 102,227 | | | $ | 87,596 | | | $ | 78,413 | | |
Adjusted EBITDA from discontinued operations | | | 7,938 | | | | 8,119 | | | | 28,091 | | | | 19,832 | | | | 14,358 | | | | 9,818 | | | | 22,409 | | | | 16,041 | | | | 20,726 | | | | 18,326 | | |
Previously reported Adjusted EBITDA from Continuing and Discontinued Operations(b) | | $ | 97,836 | | | $ | 78,760 | | | $ | 114,916 | | | $ | 113,149 | | | $ | 104,212 | | | $ | 92,070 | | | $ | 112,666 | | | $ | 118,268 | | | $ | 108,322 | | | $ | 96,739 | | |
__________________
(a)Results for the three months ended June 30, 2024 have not been previously reported.
(b)For the three months ended March 31, 2024 and 2023 revenues related to discontinued operations as reported were $44.6 million and $87.3 million, respectively. For the three months ended March 31, 2024 operating income related to discontinued operations as reported was $61.3 million. For the three months ended March 31, 2023 operating loss related to discontinued operations as reported was $12.3 million. For the three months ended March 31, 2024 and 2023 Adjusted EBITDA from Discontinued Operations was not previously reported. During the three months ended June 30, 2024, additional businesses met the criteria as held for sale representing an additional $5.0 million and $3.6 million during the three months ended March 31, 2024 and 2023, respectively.
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(UNAUDITED)
This supplemental financial information includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including Adjusted EBITDA from Continuing Operations and Discontinued Operations, Adjusted EBITDA by segment, Adjusted EBITDA from Discontinued Operations, Revenues net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations. These are not measures of financial performance calculated in accordance with GAAP and may exclude items that are significant in understanding and assessing the financial results for Advantage Solutions Inc. (“Advantage”). Therefore, the measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and should not be considered in isolation or as an alternative to operating income, net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Advantage’s presentation of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of historical non-GAAP measures to their most directly comparable GAAP counterparts are included below.
Advantage believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to Advantage’s financial condition and results of operations. Advantage believes that the use of Adjusted EBITDA from Continuing and Discontinued Operations, Adjusted EBITDA by segment, Adjusted EBITDA from Discontinued Operations, Revenues net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations each provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Advantage’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Advantage believes that Adjusted EBITDA from Continued and Discontinued Operations will help management and investors reconcile to previously reported amounts. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore Advantage’s non-GAAP measures may not be directly comparable to similarly titled measures of other companies.
Adjusted EBITDA from Continuing and Discontinued Operations are supplemental non-GAAP financial measures of our operating performance. Adjusted EBITDA from Continuing and Discontinued Operations, means net (loss) income before (i) interest expense, net, (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill and indefinite-lived assets, (vi) gain on deconsolidation of subsidiaries, (vii) loss (gain) on divestitures, (viii) changes in fair value of warrant liability, (ix) stock based compensation expense, (x) equity-based compensation of Karman Topco L.P., (xi) fair value adjustments of contingent consideration related to acquisitions, (xii) acquisition and divestiture related expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recoveries), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with the Take 5 Matter, net of (recoveries), (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.
Adjusted EBITDA by segment and Adjusted EBITDA from Discontinued Operations means, with respect to such segment or discontinued operations, as applicable, operating income (loss) before (i) depreciation, (ii) impairment of goodwill and indefinite-lived assets, (iii) amortization of intangible assets, (iv) gain on deconsolidation of subsidiaries, (v) (gain) loss on divestitures, (vi) equity-based compensation of Karman Topco L.P., (vii) changes in fair value of warrant liability, (viii) stock-based compensation expense, (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) costs associated with COVID-19, net of benefits received, (xii) EBITDA for economic interests in investments, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with the Take 5 Matter, net of (recoveries) and (xvi) other adjustments that management believes are helpful in evaluating our operating performance.
Revenue net of pass-through costs by segment and Revenues net of pass-through costs from discontinued operations means revenues less pass-through costs that are paid by Advantage's clients, including media, sample, retailer fees and other marketing and production costs.
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(Unaudited)
Reconciliations of Adjusted EBITDA from Continuing and Discontinued Operations to Net (loss) income are provided in the following table:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | |
(in thousands) | | June 30,
2024(a) | | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30,
2022 | | | March 31,
2022 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Previously reported revenues from continuing and discontinued operations | | $ | 902,231 | | | $ | 906,046 | | | $ | 1,079,749 | | | $ | 1,096,059 | | | $ | 1,037,055 | | | $ | 1,011,983 | | | $ | 1,102,763 | | | $ | 1,051,095 | | | $ | 981,076 | | | $ | 914,808 | |
Less: Pass-through costs(b) | | | (124,391 | ) | | | (134,592 | ) | | | (134,132 | ) | | | (131,926 | ) | | | (123,217 | ) | | | (110,068 | ) | | | (127,040 | ) | | | (109,480 | ) | | | (94,951 | ) | | | (73,138 | ) |
Total revenues net of pass-through costs from continuing and discontinued operations | | $ | 777,840 | | | $ | 771,454 | | | $ | 945,617 | | | $ | 964,133 | | | $ | 913,838 | | | $ | 901,915 | | | $ | 975,723 | | | $ | 941,615 | | | $ | 886,125 | | | $ | 841,670 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (100,835 | ) | | $ | (3,115 | ) | | $ | 17,788 | | | $ | (22,582 | ) | | $ | (7,846 | ) | | $ | (47,678 | ) | | $ | (1,421,729 | ) | | $ | 23,227 | | | $ | 3,676 | | | $ | 17,534 | |
Add: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net | | | 39,770 | | | | 35,793 | | | | 45,850 | | | | 42,301 | | | | 30,460 | | | | 47,191 | | | | 40,831 | | | | 23,557 | | | | 28,188 | | | | 11,883 | |
(Benefit from) provision for income taxes | | | (19,688 | ) | | | (1,628 | ) | | | (16,573 | ) | | | (4,323 | ) | | | (416 | ) | | | (7,696 | ) | | | (156,860 | ) | | | 1,158 | | | | 1,316 | | | | 9,049 | |
Depreciation and amortization | | | 53,200 | | | | 52,356 | | | | 54,390 | | | | 56,465 | | | | 56,738 | | | | 57,104 | | | | 59,078 | | | | 57,785 | | | | 58,444 | | | | 57,768 | |
Impairment of goodwill and indefinite-lived assets | | | 99,670 | | | | — | | | | 43,500 | | | | — | | | | — | | | | — | | | | 1,572,523 | | | | — | | | | — | | | | — | |
Gain on deconsolidation of subsidiaries | | | — | | | | — | | | | (58,891 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
(Gain) loss on divestitures | | | (13,179 | ) | | | (57,016 | ) | | | (1,140 | ) | | | 2,553 | | | | 1,158 | | | | 16,497 | | | | 81 | | | | — | | | | — | | | | 2,782 | |
Changes in fair value of warrant liability | | | (686 | ) | | | 287 | | | | (873 | ) | | | 587 | | | | 73 | | | | (73 | ) | | | 220 | | | | (1,100 | ) | | | (4,914 | ) | | | (15,442 | ) |
Stock-based compensation expense(c) | | | 7,630 | | | | 7,220 | | | | 10,370 | | | | 10,074 | | | | 11,226 | | | | 11,210 | | | | 9,919 | | | | 7,174 | | | | 14,961 | | | | 7,771 | |
Equity-based compensation of Karman Topco L.P.(d) | | | (872 | ) | | | 392 | | | | 754 | | | | 209 | | | | (1,218 | ) | | | (2,269 | ) | | | 208 | | | | (828 | ) | | | (3,519 | ) | | | (2,795 | ) |
Fair value adjustments related to contingent consideration related to acquisitions(e) | | | 2,872 | | | | 689 | | | | (1,229 | ) | | | 2,231 | | | | 5,068 | | | | 4,292 | | | | (674 | ) | | | (340 | ) | | | 3,654 | | | | 2,134 | |
Acquisition and divestiture related expenses(f) | | | 450 | | | | 1,319 | | | | 2,503 | | | | 1,591 | | | | 498 | | | | 2,432 | | | | 3,978 | | | | 4,260 | | | | 5,998 | | | | 6,803 | |
Reorganization expenses(g) | | | 25,502 | | | | 37,126 | | | | 17,620 | | | | 22,416 | | | | 5,837 | | | | 11,148 | | | | 1,636 | | | | 3,562 | | | | 253 | | | | 643 | |
Litigation (recovery) expenses(h) | | | (993 | ) | | | 284 | | | | 855 | | | | 4,314 | | | | 4,350 | | | | — | | | | 6,157 | | | | — | | | | (800 | ) | | | — | |
Costs associated with COVID-19, net of benefits received(i) | | | — | | | | — | | | | (2 | ) | | | (49 | ) | | | 2,317 | | | | 1,017 | | | | 2,263 | | | | 2,009 | | | | 1,362 | | | | 1,574 | |
Costs associated with the Take 5 Matter, net of (recoveries)(j) | | | 456 | | | | 240 | | | | 63 | | | | 53 | | | | (1,576 | ) | | | 80 | | | | 377 | | | | 278 | | | | 723 | | | | 1,087 | |
EBITDA for economic interests in investments(k) | | | 4,539 | | | | 4,813 | | | | (69 | ) | | | (2,691 | ) | | | (2,457 | ) | | | (1,185 | ) | | | (5,342 | ) | | | (2,474 | ) | | | (1,020 | ) | | | (4,052 | ) |
Previously reported Adjusted EBITDA from Continuing and Discontinued Operations | | $ | 97,836 | | | $ | 78,760 | | | $ | 114,916 | | | $ | 113,149 | | | $ | 104,212 | | | $ | 92,070 | | | $ | 112,666 | | | $ | 118,268 | | | $ | 108,322 | | | $ | 96,739 | |
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(Unaudited)
Financial information by segment, including reconciliations of Adjusted EBITDA by segment to Operating income (loss), the closest GAAP financial measure, is provided in the following tables:
Branded Services Segment
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | |
(in thousands) | | June 30,
2024 | | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30,
2022 | | | March 31,
2022 | |
Branded Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues | | $ | 322,340 | | | $ | 329,054 | | | $ | 431,282 | | | $ | 451,173 | | | $ | 447,265 | | | $ | 428,697 | | | $ | 480,963 | | | $ | 444,317 | | | $ | 428,044 | | | $ | 410,752 | |
Less: Pass-through costs(b) | | | (38,206 | ) | | | (46,629 | ) | | | (48,497 | ) | | | (46,227 | ) | | | (45,052 | ) | | | (39,252 | ) | | | (61,739 | ) | | | (48,383 | ) | | | (38,459 | ) | | | (29,893 | ) |
Total revenues net of pass-through costs | | $ | 284,134 | | | $ | 282,425 | | | $ | 382,785 | | | $ | 404,946 | | | $ | 402,213 | | | $ | 389,445 | | | $ | 419,224 | | | $ | 395,934 | | | $ | 389,585 | | | $ | 380,859 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating (loss) income | | $ | (107,280 | ) | | $ | (22,118 | ) | | $ | 33,779 | | | $ | (599 | ) | | $ | 8,920 | | | $ | 3,286 | | | $ | (800,471 | ) | | $ | 24,033 | | | $ | 10,123 | | | $ | 9,057 | |
Depreciation and amortization | | | 32,327 | | | | 31,987 | | | | 34,382 | | | | 35,369 | | | | 35,609 | | | | 35,572 | | | | 35,720 | | | | 35,718 | | | | 36,206 | | | | 36,710 | |
Impairment of goodwill and indefinite-lived assets | | | 99,670 | | | | — | | | | 43,500 | | | | — | | | | — | | | | — | | | | 831,008 | | | | — | | | | — | | | | — | |
Gain on deconsolidation of subsidiaries | | | — | | | | — | | | | (58,891 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Loss (gain) on divestitures | | | — | | | | — | | | | (18,193 | ) | | | — | | | | — | | | | — | | | | 81 | | | | — | | | | — | | | | 2,782 | |
Stock based compensation expense(c) | | | 2,797 | | | | 3,926 | | | | 4,342 | | | | 3,689 | | | | 4,318 | | | | 3,302 | | | | 2,826 | | | | 1,470 | | | | 3,815 | | | | 2,009 | |
Equity-based compensation of Karman Topco L.P.(d) | | | 24 | | | | 498 | | | | 522 | | | | 275 | | | | (463 | ) | | | (1,021 | ) | | | 327 | | | | (164 | ) | | | (1,558 | ) | | | (1,255 | ) |
Fair value adjustments related to contingent consideration related to acquisitions(e) | | | 900 | | | | 778 | | | | 665 | | | | 1,518 | | | | 4,632 | | | | 4,321 | | | | (1,606 | ) | | | (985 | ) | | | 7,111 | | | | 2,052 | |
Acquisition and divestiture related expenses(f) | | | 30 | | | | 74 | | | | 293 | | | | 159 | | | | 258 | | | | 1,067 | | | | (824 | ) | | | 2,307 | | | | 2,905 | | | | 3,779 | |
Reorganization expenses(g) | | | 9,248 | | | | 13,656 | | | | 8,459 | | | | 10,730 | | | | 3,015 | | | | 6,535 | | | | 1,236 | | | | 1,573 | | | | 99 | | | | 526 | |
Litigation expenses(h) | | | 50 | | | | 191 | | | | 187 | | | | 1,994 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Costs associated with COVID-19, net of benefits received(i) | | | — | | | | — | | | | 3 | | | | 6 | | | | (361 | ) | | | 29 | | | | 1,400 | | | | 914 | | | | 91 | | | | 195 | |
Costs associated with the Take 5 Matter, net of (recoveries)(j) | | | 456 | | | | 240 | | | | 63 | | | | 53 | | | | (1,576 | ) | | | 80 | | | | 377 | | | | 278 | | | | 723 | | | | 1,087 | |
EBITDA for economic interests in investments(k) | | | 4,634 | | | | 5,103 | | | | 274 | | | | (2,484 | ) | | | (2,565 | ) | | | (1,370 | ) | | | (5,411 | ) | | | (2,726 | ) | | | (1,226 | ) | | | (4,300 | ) |
Total Adjusted EBITDA | | $ | 42,856 | | | $ | 34,335 | | | $ | 49,385 | | | $ | 50,710 | | | $ | 51,787 | | | $ | 51,801 | | | $ | 64,663 | | | $ | 62,418 | | | $ | 58,289 | | | $ | 52,642 | |
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(Unaudited)
Experiential Services Segment
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
(in thousands) | | June 30,
2024 | | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30,
2022 | | | March 31,
2022 | | |
Experiential Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues | | $ | 319,508 | | | $ | 307,351 | | | $ | 308,727 | | | $ | 308,381 | | | $ | 285,174 | | | $ | 257,167 | | | $ | 253,557 | | | $ | 245,752 | | | $ | 221,863 | | | $ | 183,058 | | |
Less: Pass-through costs(b) | | | (84,689 | ) | | | (85,015 | ) | | | (81,506 | ) | | | (81,848 | ) | | | (75,204 | ) | | | (69,053 | ) | | | (63,076 | ) | | | (59,014 | ) | | | (54,222 | ) | | | (41,378 | ) | |
Total revenues net of pass-through costs | | $ | 234,819 | | | $ | 222,336 | | | $ | 227,221 | | | $ | 226,533 | | | $ | 209,970 | | | $ | 188,114 | | | $ | 190,481 | | | $ | 186,738 | | | $ | 167,641 | | | $ | 141,680 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | $ | 6,453 | | | $ | (3,642 | ) | | $ | 845 | | | $ | 1,971 | | | $ | 4,805 | | | $ | (4,326 | ) | | $ | (358,628 | ) | | $ | (1,390 | ) | | $ | (5,379 | ) | | $ | (6,503 | ) | |
Depreciation and amortization | | | 11,015 | | | | 9,920 | | | | 9,298 | | | | 9,221 | | | | 9,002 | | | | 9,063 | | | | 10,465 | | | | 9,485 | | | | 9,466 | | | | 8,491 | | |
Impairment of goodwill and indefinite-lived assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 354,452 | | | | — | | | | — | | | | — | | |
Stock based compensation expense(c) | | | 2,170 | | | | 1,928 | | | | (1,560 | ) | | | (778 | ) | | | (646 | ) | | | (436 | ) | | | (456 | ) | | | (19 | ) | | | (424 | ) | | | (443 | ) | |
Equity-based compensation of Karman Topco L.P.(d) | | | (458 | ) | | | (44 | ) | | | 129 | | | | (29 | ) | | | (358 | ) | | | (547 | ) | | | (45 | ) | | | (267 | ) | | | (792 | ) | | | (594 | ) | |
Fair value adjustments related to contingent consideration related to acquisitions(e) | | | — | | | | — | | | | — | | | | — | | | | 7 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
Acquisition and divestiture related expenses(f) | | | (101 | ) | | | 106 | | | | 71 | | | | 19 | | | | 48 | | | | 374 | | | | 319 | | | | 670 | | | | 1,144 | | | | 1,224 | | |
Reorganization expenses(g) | | | 3,472 | | | | 8,252 | | | | 3,869 | | | | 4,960 | | | | 1,304 | | | | 1,966 | | | | 299 | | | | 1,079 | | | | 98 | | | | 29 | | |
Litigation expenses (recovery)(h) | | | 60 | | | | 173 | | | | 566 | | | | 1,276 | | | | — | | | | — | | | | — | | | | — | | | | (700 | ) | | | — | | |
Costs associated with COVID-19, net of benefits received(i) | | | — | | | | — | | | | (7 | ) | | | (56 | ) | | | 2,040 | | | | 912 | | | | 755 | | | | 962 | | | | 1,174 | | | | 1,077 | | |
Total Adjusted EBITDA | | $ | 22,611 | | | $ | 16,693 | | | $ | 13,211 | | | $ | 16,584 | | | $ | 16,202 | | | $ | 7,006 | | | $ | 7,161 | | | $ | 10,520 | | | $ | 4,587 | | | $ | 3,281 | | |
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(Unaudited)
Retailer Services Segment
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
(in thousands) | | June 30,
2024 | | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30,
2022 | | | March 31,
2022 | | |
Retailer Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues | | $ | 231,509 | | | $ | 225,007 | | | $ | 251,939 | | | $ | 260,152 | | | $ | 231,319 | | | $ | 238,849 | | | $ | 260,270 | | | $ | 264,976 | | | $ | 230,941 | | | $ | 221,849 | | |
Less: Pass-through costs(b) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |
Total revenues net of pass-through costs | | $ | 231,509 | | | $ | 225,007 | | | $ | 251,939 | | | $ | 260,152 | | | $ | 231,319 | | | $ | 238,849 | | | $ | 260,270 | | | $ | 264,976 | | | $ | 230,941 | | | $ | 221,849 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | $ | 9,568 | | | $ | (4,190 | ) | | $ | (13,962 | ) | | $ | 5,281 | | | $ | 1,526 | | | $ | 5,063 | | | $ | (392,537 | ) | | $ | 14,722 | | | $ | 5,511 | | | $ | 7,519 | | |
Depreciation and amortization | | | 7,975 | | | | 7,841 | | | | 7,740 | | | | 7,825 | | | | 7,866 | | | | 7,909 | | | | 8,322 | | | | 8,485 | | | | 8,493 | | | | 8,486 | | |
Impairment of goodwill and indefinite-lived assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 387,063 | | | | — | | | | — | | | | — | | |
Loss on divestitures | | | — | | | | — | | | | 18,193 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |
Stock based compensation expense(c) | | | 2,561 | | | | 2,700 | | | | 6,751 | | | | 6,072 | | | | 6,340 | | | | 7,539 | | | | 6,265 | | | | 4,515 | | | | 10,037 | | | | 5,506 | | |
Equity-based compensation of Karman Topco L.P.(d) | | | (438 | ) | | | (62 | ) | | | 103 | | | | (37 | ) | | | (397 | ) | | | (701 | ) | | | (74 | ) | | | (397 | ) | | | (1,169 | ) | | | (946 | ) | |
Fair value adjustments related to contingent consideration related to acquisitions(e) | | | — | | | | — | | | | — | | | | — | | | | 9 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
Acquisition and divestiture related expenses(f) | | | (1,703 | ) | | | 260 | | | | (222 | ) | | | 154 | | | | 89 | | | | 896 | | | | 3,102 | | | | 983 | | | | 1,765 | | | | 1,576 | | |
Reorganization expenses(g) | | | 7,571 | | | | 13,144 | | | | 5,501 | | | | 5,682 | | | | 1,475 | | | | 2,637 | | | | 101 | | | | 823 | | | | 56 | | | | 51 | | |
Litigation (recovery) expenses(h) | | | (1,103 | ) | | | (80 | ) | | | 102 | | | | 1,044 | | | | 4,350 | | | | — | | | | 6,157 | | | | — | | | | (100 | ) | | | — | | |
Costs associated with COVID-19, net of benefits received(i) | | | — | | | | — | | | | 2 | | | | 1 | | | | 638 | | | | 76 | | | | 108 | | | | 133 | | | | 97 | | | | 302 | | |
EBITDA for economic interests in investments(k) | | | — | | | | — | | | | 21 | | | | 1 | | | | (31 | ) | | | 26 | | | | (74 | ) | | | 25 | | | | 30 | | | | (4 | ) | |
Total Adjusted EBITDA | | $ | 24,431 | | | $ | 19,613 | | | $ | 24,229 | | | $ | 26,023 | | | $ | 21,865 | | | $ | 23,445 | | | $ | 18,433 | | | $ | 29,289 | | | $ | 24,720 | | | $ | 22,490 | | |
ADVANTAGE SOLUTIONS INC.
NON-GAAP ADJUSTED EBITDA RECONCILIATIONS
AS RECAST
(Unaudited)
Discontinued Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
(in thousands) | | June 30,
2024 | | | March 31, 2024 | | | December 31, 2023 | | | September 30, 2023 | | | June 30,
2023 | | | March 31,
2023 | | | December 31, 2022 | | | September 30, 2022 | | | June 30,
2022 | | | March 31,
2022 | | |
Discontinued Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues | | $ | 28,874 | | | $ | 44,634 | | | $ | 87,801 | | | $ | 76,353 | | | $ | 73,297 | | | $ | 87,270 | | | $ | 107,973 | | | $ | 96,050 | | | $ | 100,228 | | | $ | 99,149 | | |
Less: Pass-through costs(b) | | | (1,496 | ) | | | (2,948 | ) | | | (4,129 | ) | | | (3,851 | ) | | | (2,961 | ) | | | (1,763 | ) | | | (2,225 | ) | | | (2,083 | ) | | | (2,270 | ) | | | (1,867 | ) | |
Total revenues net of pass-through costs | | $ | 27,378 | | | $ | 41,686 | | | $ | 83,672 | | | $ | 72,502 | | | $ | 70,336 | | | $ | 85,507 | | | $ | 105,748 | | | $ | 93,967 | | | $ | 97,958 | | | $ | 97,282 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | $ | 9,820 | | | $ | 61,287 | | | $ | 25,530 | | | $ | 9,330 | | | $ | 7,020 | | | $ | (12,279 | ) | | $ | 14,098 | | | $ | 9,477 | | | $ | 18,011 | | | $ | 12,951 | | |
Depreciation and amortization | | | 1,883 | | | | 2,608 | | | | 2,970 | | | | 4,050 | | | | 4,261 | | | | 4,560 | | | | 4,571 | | | | 4,097 | | | | 4,279 | | | | 4,081 | | |
Loss on divestitures | | | (13,179 | ) | | | (57,016 | ) | | | (1,140 | ) | | | 2,553 | | | | 1,158 | | | | 16,497 | | | | — | | | | — | | | | — | | | | — | | |
Stock based compensation expense(c) | | | 102 | | | | (1,334 | ) | | | 837 | | | | 1,091 | | | | 1,214 | | | | 805 | | | | 1,284 | | | | 1,208 | | | | 1,533 | | | | 699 | | |
Fair value adjustments related to contingent consideration related to acquisitions(e) | | | 1,972 | | | | (89 | ) | | | (1,894 | ) | | | 713 | | | | 420 | | | | (29 | ) | | | 932 | | | | 645 | | | | (3,457 | ) | | | 82 | | |
Acquisition and divestiture related expenses(f) | | | 2,224 | | | | 879 | | | | 2,361 | | | | 1,259 | | | | 103 | | | | 95 | | | | 1,381 | | | | 300 | | | | 184 | | | | 224 | | |
Reorganization expenses(g) | | | 5,211 | | | | 2,074 | | | | (209 | ) | | | 1,044 | | | | 43 | | | | 10 | | | | — | | | | 87 | | | | — | | | | 37 | | |
EBITDA for economic interests in investments(k) | | | (95 | ) | | | (290 | ) | | | (364 | ) | | | (208 | ) | | | 139 | | | | 159 | | | | 143 | | | | 227 | | | | 176 | | | | 252 | | |
Total Adjusted EBITDA from Discontinued Operations | | $ | 7,938 | | | $ | 8,119 | | | $ | 28,091 | | | $ | 19,832 | | | $ | 14,358 | | | $ | 9,818 | | | $ | 22,409 | | | $ | 16,041 | | | $ | 20,726 | | | $ | 18,326 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
__________________
(a)Results for the three months ended June 30, 2024 have not been previously reported.
(b)Pass-through costs are costs that are paid by our clients, including media, sample, retailer fees and other marketing and production costs.
(c)Represents non-cash compensation expense related to performance stock units, restricted stock units, and stock options under the 2020 Advantage Solutions Incentive Award Plan and the Advantage Solutions 2020 Employee Stock Purchase Plan.
(d)Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors, and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.
(e)Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.
(f)Represents fees and costs associated with activities related to our acquisitions, divestitures, and related reorganization activities, including professional fees, due diligence, and integration activities.
(g)Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.
(h)Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.
(i)Represents (i) costs related to implementation of strategies for workplace safety in response to COVID-19, including employee-relief fund, additional sick pay for front-line associates, medical benefit payments for furloughed associates, and personal protective equipment; and (ii) benefits received from government grants for COVID-19 relief.
(j)Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily, professional fees and other related costs.
(k)Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.
