US Ecology Announces Fourth Quarter and Full Year 2016 Results2016 Net Income of $34.3 Million; 2016 Adjusted EBITDA of $112.8 Million; 2017 Adjusted EBITDA forecast of $120-$130 Million
BOISE, ID -- (Marketwired - February 16, 2017) - US Ecology, Inc. (NASDAQ: ECOL) ("the Company") today reported total revenue of $117.2 million and net income of $7.7 million, or $0.35 per diluted share for the quarter-ended December 31, 2016.
"We saw another quarter of sluggishness in the industrial sector, including lower spending and continued project deferment, which resulted in Pro Forma adjusted EBITDA for 2016 at the low end of our guidance range," commented Jeff Feeler, Chairman and Chief Executive Officer. "Winter weather conditions, which affected shipping and production schedules, combined with lower December industrial waste volumes contributed to a 4% decline in Base Business in our Environmental Services segment in the fourth quarter compared to the fourth quarter of 2015. Our Environmental Services segment Event Business was down 17% during the quarter as compared to the same quarter last year due to prior year project completions that were not fully replaced and continued project delays. Our Field and Industrial Services segment also delivered lower than anticipated results on the softer market conditions as we closed out the year. The recent uptick in the industrial sector seen so far in the first quarter, however, while not yet resulting in improved volumes, bodes well for our 2017 business outlook given the tendency of the hazardous waste industry to lag industrial cycles."
Total revenue for the fourth quarter of 2016 of $117.2 million was down from $138.3 million in the same quarter last year. Revenue for the fourth quarter of 2015 included $8.1 million of revenue for Allstate Power Vac ("Allstate"), which was divested on November 1, 2015. Revenue for the Environmental Services ("ES") segment was $85.7 million for the fourth quarter of 2016, down from $92.7 million in the fourth quarter of 2015. This decline consisted of a 4% decrease in treatment and disposal ("T&D") revenue and a 24% decrease in transportation revenue compared to the fourth quarter of 2015. Revenue for the Field and Industrial Services ("FIS") segment was $31.5 million for the fourth quarter of 2016 compared to $45.5 million in the same period of 2015. After taking into account the divested Allstate business, which contributed $8.1 million of revenue in the fourth quarter of 2015, our remaining FIS revenue was down 16% from the same quarter in the prior year reflecting the expiration of a contract that was not renewed and softer overall market conditions.
Gross profit for the fourth quarter of 2016 was $36.1 million, down from $44.2 million in the same quarter last year. Gross profit for the ES segment was $32.1 million in the fourth quarter of 2016, down from $36.3 million in the same quarter of 2015. T&D gross margin for the ES segment was 41% for the fourth quarter of 2016, compared to 44% for the fourth quarter of 2015. Gross profit for the FIS segment in the fourth quarter of 2016 was $4.0 million. This compares to gross profit of $7.8 million in the fourth quarter of 2015, which included $1.6 million from the divested Allstate business, representing therefore a year-over-year decline of 36% in the remaining FIS business. The decline was due to the reduced revenue as well as year-end accrual and reserve adjustments in the fourth quarter of 2016.
Selling, general and administrative ("SG&A") expense for the fourth quarter of 2016 was $19.9 million compared with $22.0 million in the same quarter last year, which included $1.0 million related to the divested Allstate business. Excluding the decline related to the Allstate divestiture, SG&A expense decreased due to lower incentive compensation costs, lower consulting and professional services and lower bad debt expense in the fourth quarter of 2016 compared to the fourth quarter of 2015.
Operating income for the fourth quarter of 2016 was $16.2 million compared to $22.2 million in the fourth quarter of 2015. Allstate had operating income of $538,000 in the fourth quarter of 2015.
Net interest expense for the fourth quarter of 2016 was $4.2 million, down from $7.2 million in the fourth quarter of 2015. The decrease was due to lower debt levels and a $2.4 million charge for deferred financing costs recorded in the fourth quarter last year.
The Company's consolidated effective income tax rate for the fourth quarter of 2016 was 35.5%, down from 45.5% for the fourth quarter of 2015. The decrease was due to a decline in our U.S. effective tax rate, primarily driven by a non-recurring capital loss in the fourth quarter of 2015 as a result of the sale of Allstate, as well as changes in our apportionments between the various states in which we operate. Also contributing to the decrease in our effective tax rate is a higher proportion of earnings from our Canadian operations in the fourth quarter of 2016, which are taxed at a lower corporate tax rate.
Net income for the fourth quarter of 2016 was $7.7 million, or $0.35 per diluted share, consistent with the fourth quarter of 2015. Adjusted earnings per share, which excludes loss on sale of divested businesses, the divested Allstate business, foreign currency translation gains and losses and business development expenses, was $0.36 per diluted share in the fourth quarter of both 2016 and 2015.
Adjusted EBITDA for the fourth quarter of 2016 was $27.3 million, down 17% from $33.0 million in the same period last year. Pro Forma adjusted EBITDA, which excludes the divested Allstate business and business development expenses, was $27.4 million in the fourth quarter of 2016 compared to $32.6 million in the fourth quarter of 2015.
Reconciliations of earnings per diluted share to adjusted earnings per diluted share and net income to adjusted EBITDA and Pro Forma adjusted EBITDA are attached as Exhibit A to this release.
2016 Results
Total revenue for 2016 was $477.7 million compared to $563.1 million in 2015. 2015 included $59.1 million of revenue for the divested Allstate business. ES segment revenue was $337.8 million for 2016, down from $359.0 million in 2015 on a 30% decline in Event Business, partially offset by a 2% increase in Base Business. This decline consisted of a 5% decrease in T&D revenue and a 9% reduction in transportation revenue compared to 2015. Revenue for the FIS segment was $139.9 million in 2016 compared to $204.0 million in 2015. After taking into account the divested Allstate business, FIS revenue was down approximately 3% in 2016 compared to 2015.
Gross profit for 2016 was $147.6 million, down from $171.4 million in the same period last year. Gross profit for the ES segment was $126.8 million in 2016, down from $137.6 million in 2015. T&D gross margin for the ES segment was 42% for 2016 compared to 43% for 2015. Gross profit for the FIS segment in 2016 was $20.8 million. This compares to $33.8 million in 2015, which included $12.4 million from the divested Allstate business, and reflects a year-over-year gross profit decline of approximately 3% in the remaining FIS business.
SG&A expense for 2016 was $77.6 million compared with $93.1 million in the same period last year, which included $10.9 million related to the divested Allstate business. Excluding the decline related to the Allstate divestiture, SG&A expense decreased due to lower business development costs, incentive compensation and consulting and professional services in 2016 compared to 2015.
2016 operating income was $70.0 million, down 2% from $71.6 million in 2015. Allstate had an operating loss of $4.9 million in 2015.
Net interest expense for 2016 was $17.2 million, down from $23.3 million in 2015. The decrease was due to lower debt levels in 2016 compared with 2015 and a reduction in non-cash amortization of deferred financing fees.
The Company's consolidated effective income tax rate for 2016 was 38.1%, down from 39.3% when excluding the non-deductible goodwill impairment charge in 2015. This decrease primarily reflects a lower U.S. effective tax rate for 2016 driven by changes in our apportionment between the various states in which we operate.
Net income was $34.3 million, or $1.57 per diluted share, in 2016 compared to $25.6 million, or $1.18 per diluted share, in 2015. Adjusted earnings per share, which excludes the gain/loss on sale of divested businesses, goodwill impairment charges, the divested Allstate business, foreign currency translation gains and losses and business development expenses, was $1.53 for 2016 compared to $1.57 per diluted share for 2015.
Adjusted EBITDA was $112.8 million in 2016, down 10% from $125.5 million in 2015. Pro Forma adjusted EBITDA, which excludes the divested Allstate business and business development expenses, was $113.4 million in 2016 compared to $122.6 million in 2015.
Reconciliations of earnings per diluted share to adjusted earnings per diluted share and net income to adjusted EBITDA and Pro Forma adjusted EBITDA are attached as Exhibit A to this release.
2017 Outlook
"The positive trends emerging in the industrial economy and the improving outlook for many of our customers, gives us increasing confidence that US Ecology will return to growth in 2017," commented Feeler. "Supporting this optimism is the growing pipeline of Event Business opportunities that will supplement those projects deferred in 2016 that are now slated for 2017. Despite this improving outlook, we remain cautious at the rate of growth we can expect in 2017. Growth in our Environmental Services segment Base Business is projected to improve from 2016 levels, growing between 3-5% in 2017. We also expect that our Environmental Services segment Event Business will return to growth in 2017 as we receive volume from multi-year projects currently under contract, the growing pipeline of new opportunities and the commencement of projects deferred from last year. Our Field and Industrial Services segment is expected to be up slightly in 2017 despite cycling some larger completed contracts and a field services contract that was not renewed in the fourth quarter of 2016."
Based on current business conditions, management is projecting 2017 earnings per diluted share between $1.69 and $1.93 and adjusted EBITDA of $120 to $130 million. This guidance reflects adjusted EBITDA growth of up to 15%, compared to 2016 Pro Forma adjusted EBITDA of $113.4 million and growth of up to 26% from adjusted earnings per share of $1.53 in 2016.
2017 revenue is anticipated to range from $495 million to $533 million, compared to $478 million in 2016. Breaking down our revenue guidance by segment, we expect our 2017 ES segment revenue to range between $357 and $389 million and our FIS segment revenue to range between $138 and $144 million.
The following table reconciles our adjusted EBITDA guidance range to our projected net income.
For the Year Ending
December 31, 2017
------------------------
(in thousands) Low High
----------- -----------
Net Income $ 36,900 $ 42,000
Income tax expense 22,600 27,000
Interest expense 16,400 16,400
Other income (500) (500)
Depreciation and amortization of plant and
equipment 26,800 27,300
Amortization of intangible assets 9,800 9,800
Stock-based compensation 3,900 3,900
Accretion of closure & post-closure obligations 4,100 4,100
----------- -----------
Adjusted EBITDA $ 120,000 $ 130,000
=========== ===========
Projections exclude any foreign currency translation gains or losses, business development expenses or other unusual transactions.
2017 capital spending is estimated to range from $34 to $37 million, including 2016 carryover amounts. This is in line with the $35.7 million spent in 2016. Capital expenditures for 2017 will focus on constructing additional disposal space, ongoing infrastructure improvements and equipment replacement at our operating facilities and information system upgrades.
Dividend
On January 3, 2017, the Company declared a quarterly dividend of $0.18 per common share for stockholders of record on January 20, 2017. The $3.9 million dividend was paid on January 27, 2017.
Conference Call
US Ecology, Inc. will hold an investor conference call on Friday, February 17, 2017 at 10:00 a.m. Eastern Standard Daylight Time (8:00 a.m. Mountain Standard Daylight Time) to discuss these results and its current financial position and business outlook. Questions will be invited after management's presentation. Interested parties can access the conference call by dialing 877-512-4138 or 412-317-5478. The conference call will also be broadcast live on our website at www.usecology.com. An audio replay will be available through February 24, 2017 by calling 877-344-7529 or 412-317-0088 and using the passcode 10100324. The replay will also be accessible on our website at www.usecology.com.
About US Ecology, Inc.
US Ecology, Inc. is a leading North American provider of environmental services to commercial and government entities. The Company addresses the complex waste management needs of its customers, offering treatment, disposal and recycling of hazardous, non-hazardous and radioactive waste, as well as a wide range of complementary field and industrial services. US Ecology's focus on safety, environmental compliance, and best-in-class customer service enables us to effectively meet the needs of our customers and to build long-lasting relationships. Headquartered in Boise, Idaho, with operations in the United States, Canada and Mexico, the Company has been protecting the environment since 1952. For more information, visit www.usecology.com.
Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on management's beliefs and assumptions, which in turn are based on currently available information. Important assumptions include, among others, those regarding demand for Company services, expansion of service offerings geographically or through new or expanded service lines, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include the replacement of non-recurring event clean-up projects, a loss of a major customer, our ability to permit and contract for timely construction of new or expanded disposal cells, our ability to renew our operating permits or lease agreements with regulatory bodies, loss of key personnel, compliance with and changes to applicable laws, rules, or regulations, access to insurance, surety bonds and other financial assurances, a deterioration in our labor relations or labor disputes, our ability to perform under required contracts, failure to realize anticipated benefits and operational performance from acquired operations, adverse economic or market conditions, government funding or competitive pressures, incidents or adverse weather conditions that could limit or suspend specific operations, access to cost effective transportation services, fluctuations in foreign currency markets, lawsuits, our willingness or ability to repurchase shares or pay dividends, implementation of new technologies, limitations on our available cash flow as a result of our indebtedness and our ability to effectively execute our acquisition strategy and integrate future acquisitions.
Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission (the "SEC"), we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance. Before you invest in our common stock, you should be aware that the occurrence of the events described in the "Risk Factors" sections of our annual and quarterly reports could harm our business, prospects, operating results, and financial condition.
US ECOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended For the Year Ended
December 31, December 31,
---------------------- ----------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Revenue
Environmental Services $ 85,666 $ 92,725 $ 337,771 $ 359,040
Field & Industrial
Services 31,506 45,548 139,894 204,030
---------- ---------- ---------- ----------
Total 117,172 138,273 477,665 563,070
Gross Profit
Environmental Services 32,132 36,326 126,818 137,633
Field & Industrial
Services 3,995 7,830 20,777 33,777
---------- ---------- ---------- ----------
Total 36,127 44,156 147,595 171,410
Selling, General &
Administrative Expenses
Environmental Services 5,626 5,944 21,418 22,752
Field & Industrial
Services 2,383 3,620 10,115 21,961
Corporate 11,874 12,440 46,033 48,366
---------- ---------- ---------- ----------
Total 19,883 22,004 77,566 93,079
Impairment Charges
Field & Industrial
Services - - - 6,700
---------- ---------- ---------- ----------
Operating income 16,244 22,152 70,029 71,631
Other income (expense):
Interest income 6 1 96 65
Interest expense (4,167) (7,162) (17,317) (23,370)
Foreign currency loss (330) (427) (138) (2,196)
Other 151 (431) 2,631 725
---------- ---------- ---------- ----------
Total other expense (4,340) (8,019) (14,728) (24,776)
Income before income taxes 11,904 14,133 55,301 46,855
Income tax expense 4,221 6,429 21,049 21,244
---------- ---------- ---------- ----------
Net income $ 7,683 $ 7,704 $ 34,252 $ 25,611
========== ========== ========== ==========
Earnings per share:
Basic $ 0.35 $ 0.36 $ 1.58 $ 1.18
Diluted $ 0.35 $ 0.35 $ 1.57 $ 1.18
Shares used in earnings per
share calculation:
Basic 21,717 21,676 21,704 21,637
Diluted 21,814 21,748 21,789 21,733
Dividends paid per share $ 0.18 $ 0.18 $ 0.72 $ 0.72
========== ========== ========== ==========
US ECOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, December 31,
2016 2015
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 7,015 $ 5,989
Receivables, net 96,819 106,380
Prepaid expenses and other current assets 7,458 8,484
Income tax receivable 4,076 2,017
------------- -------------
Total current assets 115,368 122,870
Property and equipment, net 226,237 210,334
Restricted cash and investments 5,787 5,748
Intangible assets, net 234,356 239,571
Goodwill 193,621 191,823
Other assets 1,031 1,641
------------- -------------
Total assets $ 776,400 $ 771,987
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 13,948 $ 17,169
Deferred revenue 7,820 8,078
Accrued liabilities 22,605 25,634
Accrued salaries and benefits 10,720 11,513
Income tax payable 165 117
Current portion of closure and post-closure
obligations 2,256 2,787
Revolving credit facilitiy 2,177 -
Current portion of long-term debt 2,903 3,056
------------- -------------
Total current liabilities 62,594 68,354
Long-term closure and post-closure obligations 72,826 68,367
Long-term debt 274,459 290,684
Other long-term liabilities 5,164 5,825
Deferred income taxes 81,333 82,622
------------- -------------
Total liabilities 496,376 515,852
Contingencies and commitments
Stockholders' Equity
Common stock 218 217
Additional paid-in capital 172,704 169,873
Retained earnings 121,879 103,300
Treasury stock (52) (189)
Accumulated other comprehensive loss (14,725) (17,066)
------------- -------------
Total stockholders' equity 280,024 256,135
------------- -------------
Total liabilities and stockholders' equity $ 776,400 $ 771,987
============= =============
US ECOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the Year Ended
December 31,
------------------------
2016 2015
----------- -----------
Cash Flows From Operating Activities:
Net income $ 34,252 $ 25,611
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 25,304 27,931
Amortization of intangible assets 10,575 12,307
Accretion of closure and post-closure
obligations 3,953 4,584
(Gain) loss on disposition of business (2,034) 542
Unrealized foreign currency loss 65 3,271
Deferred income taxes (2,704) (2,714)
Share-based compensation expense 2,925 2,297
Net (gain) loss on disposal of property and
equipment (569) 741
Amortization of debt issuance costs 2,006 4,428
Amortization of debt discount 148 148
Impairment charges - 6,700
Changes in assets and liabilities:
Receivables 10,912 1,565
Income tax receivable (2,043) 4,830
Other assets 1,149 734
Accounts payable and accrued liabilities (7,735) (6,481)
Deferred revenue (281) (4,449)
Accrued salaries and benefits (864) (901)
Income tax payable 49 (3,918)
Closure and post-closure obligations (481) (5,679)
----------- -----------
Net cash provided by operating activities 74,627 71,547
Cash Flows From Investing Activities:
Purchases of property and equipment (35,696) (39,370)
Business acquistion (net of cash acquired) (9,983) -
Purchases of restricted cash and investments (2,317) (2,075)
Proceeds from divestitures (net of cash
divested) 2,723 58,728
Proceeds from sale of restricted cash and
investments 2,278 2,057
Proceeds from sale of property and equipment 991 948
----------- -----------
Net cash (used in) provided by investing
activities (42,004) 20,288
Cash Flows From Financing Activities:
Proceeds from revolving credit facility 49,405 10,316
Payments on revolving credit facility (47,228) (10,316)
Payments on long-term debt and capital lease
obligations (18,133) (94,623)
Dividends paid (15,673) (15,612)
Proceeds from exercise of stock options 229 1,823
Other (189) 54
----------- -----------
Net cash used in financing activities (31,589) (108,358)
Effect of foreign exchange rate changes on cash (8) (459)
Increase (decrease) in cash and cash equivalents 1,026 (16,982)
Cash and cash equivalents at beginning of period 5,989 22,971
----------- -----------
Cash and cash equivalents at end of period $ 7,015 $ 5,989
----------- -----------
EXHIBIT A
Non-GAAP Results and Reconciliation
US Ecology reports adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share results, which are non-GAAP financial measures, as a complement to results provided in accordance with generally accepted accounting principles in the United States (GAAP) and believes that such information provides analysts, stockholders, and other users information to better understand the Company's operating performance. Because adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations they may not be comparable to similar measures used by other companies. Items excluded from adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share are significant components in understanding and assessing financial performance.
Adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Adjusted EBITDA, Pro Forma adjusted EBITDA and adjusted earnings per diluted share have limitations as analytical tools and should not be considered in isolation or a substitute for analyzing our results as reported under GAAP. Some of the limitations are:
-- Adjusted EBITDA does not reflect changes in, or cash requirements for,
our working capital needs;
-- Adjusted EBITDA does not reflect our interest expense, or the
requirements necessary to service interest or principal payments on our
debt;
-- Adjusted EBITDA does not reflect our income tax expenses or the cash
requirements to pay our taxes;
-- Adjusted EBITDA does not reflect our cash expenditures or future
requirements for capital expenditures or contractual commitments; and
-- Although depreciation and amortization charges are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in
the future, and adjusted EBITDA does not reflect cash requirements for
such replacements.
-- Pro Forma adjusted EBITDA does not reflect our business development
expenses, which may vary significantly quarter to quarter.
Adjusted EBITDA
The Company defines adjusted EBITDA as net income before interest expense, interest income, income tax expense, depreciation, amortization, stock based compensation, accretion of closure and post-closure liabilities, foreign currency gain/loss, non-cash impairment charges and other income/expense, which are not considered part of usual business operations.
Pro Forma adjusted EBITDA
The Company defines Pro Forma adjusted EBITDA as adjusted EBITDA (see definition above) less the adjusted EBITDA related to the divested Allstate business, plus business development expenses incurred during the period. We believe Pro Forma adjusted EBITDA is helpful in understanding our business and how it relates to our 2017 guidance which includes neither the divested Allstate business nor business development expenses.
The following reconciliation itemizes the differences between reported net income and adjusted EBITDA and Pro Forma adjusted EBITDA for the three months and year ended December 31, 2016 and 2015:
Three Months Ended For the Year Ended
(in thousands) December 31, December 31,
---------------------- ----------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
Net Income $ 7,683 $ 7,704 $ 34,252 $ 25,611
Income tax expense 4,221 6,429 21,049 21,244
Interest expense 4,167 7,162 17,317 23,370
Interest income (6) (1) (96) (65)
Foreign currency loss 330 427 138 2,196
Other (income) expense (151) 431 (2,631) (725)
Depreciation and
amortization of plant and
equipment 6,743 6,205 25,304 27,931
Amortization of intangible
assets 2,668 2,749 10,575 12,307
Stock-based compensation 744 561 2,925 2,297
Accretion and non-cash
adjustments of closure &
post-closure obligations 872 1,376 3,953 4,584
Impairment charges - - - 6,700
---------- ---------- ---------- ----------
Adjusted EBITDA 27,271 33,043 112,786 125,450
---------- ---------- ---------- ----------
EBITDA related to divested
Allstate business - (502) - (5,055)
Business development
expenses 138 88 637 2,212
---------- ---------- ---------- ----------
Pro Forma adjusted EBITDA $ 27,409 $ 32,629 $ 113,423 $ 122,607
========== ========== ========== ==========
Adjusted Earnings Per Diluted Share
The Company defines adjusted earnings per diluted share as net income adjusted for the after-tax impact of the gains and losses on sale of divested businesses, non-cash foreign currency translation gains or losses, the after-tax impact of business development costs, the after-tax impact of the divested Allstate business, and non-cash impairment charges, divided by the number of diluted shares used in the earnings per share calculation.
Impairment charges excluded from the earnings per diluted share calculation are related to the Company's decision to explore strategic alternatives for our industrial services business. The foreign currency translation gains or losses excluded from the earnings per diluted share calculation are related to intercompany loans between our Canadian subsidiaries and the U.S. parent which have been established as part of our tax and treasury management strategy. These intercompany loans are payable in Canadian dollars ("CAD") requiring us to revalue the outstanding loan balance through our consolidated income statement based on the CAD/United States currency movements from period to period. Business development costs relate to expenses incurred to evaluate businesses for potential acquisition or costs related to closing and integrating successfully acquired businesses.
We believe excluding gains and losses on sale of divested businesses, non-cash foreign currency translation gains or losses, the after-tax impact of business development costs, the after-tax impact of the divested Allstate business, and non-cash impairment charges provides meaningful information to investors regarding the operational and financial performance of the Company.
The following reconciliation itemizes the differences between reported net income and earnings per diluted share to adjusted net income and adjusted earnings per diluted share for the three months and year ended December 31, 2016 and 2015:
(in
thousands,
except
per share
data) Three Months Ended December 31,
----------------------------------------------------------------
2016 2015
-------------------------------- -------------------------------
Income Income
before before
income Income Net per income Income Net per
taxes tax income share taxes tax income share
As
Reported $ 11,904 $ (4,221)$ 7,683 $ 0.35 $14,133 $ (6,429)$ 7,704 $ 0.35
Adjust-
ments:
Plus:
Loss on
sale of
divested
business-
es - - - - 542 (247) 295 0.01
Non-cash
foreign
currency
translat-
ion
(gain)
loss 411 (146) 265 0.01 153 (65) 88 0.01
Plus:
Business
developm-
ent
costs 138 (49) 89 - 88 (37) 51 -
Less:
Divested
Allstate
business
operat-
ing income - - - - (549) 209 (340) (0.01)
-------- -------- ------- ------ ------- -------- ------- ------
As
Adjusted $ 12,453 $ (4,416)$ 8,037 $ 0.36 $14,367 $ (6,569)$ 7,798 $ 0.36
======== ======== ======= ====== ======= ======== ======= ======
Shares
used in
earnings
per
diluted
share
calculat-
ion 21,814 21,748
======= =======
(in
thousands,
except per
share
data) For the Year Ended December 31,
----------------------------------------------------------------
2016 2015
-------------------------------- -------------------------------
Income Income
before before
income Income Net per income Income Net per
taxes tax income share taxes tax income share
As
Reported $ 55,301 $(21,049)$34,252 $ 1.57 $46,855 $(21,244)$25,611 $ 1.18
Adjust-
ments:
(Less)/
plus:
(Gain)/
loss on
sale of
divested
business-
es (2,034) 774 (1,260) (0.06) 542 (247) 295 0.01
Non-cash
foreign
currency
translat-
ion
(gain)
loss 88 (33) 55 - 2,019 (852) 1,167 0.05
Plus:
Business
develop-
ment
costs 637 (242) 395 0.02 2,212 (933) 1,279 0.06
Plus:
Impair-
ment
charges
(1) - - - - 6,700 - 6,700 0.31
Less:
Divested
Allstate
business
operat-
ing income - - - - (1,502) 571 (931) (0.04)
-------- -------- ------- ------ ------- -------- ------- ------
As
Adjusted $ 53,992 $(20,550)$33,442 $ 1.53 $56,826 $(22,705)$34,121 $ 1.57
======== ======== ======= ====== ======= ======== ======= ======
Shares
used in
earnings
per
diluted
share
calcula-
tion 21,789 21,733
======= =======
(1)Impairment charges were not deductible for income tax purposes
Contact:
Alison Ziegler
Darrow Associates
(201)220-2678
aziegler@darrowir.com
www.usecology.com
