| | • | | the impact of price downs in the ordinary course, additional increased pricing pressures from the Company’s customers, and the ability to pass through a portion of the increase in supply cost due to supply chain challenges; |
| | • | | the feasibility of Company’s development of new products on a timely, cost effective basis, or at all; |
| | • | | security breaches and other disruptions to the Company’s IT systems; |
| | • | | work stoppages impacting the Company, its suppliers or customers; |
| | • | | changes in free trade agreements or the implementation of additional tariffs, and the Company’s ability to pass-through tariff costs; |
| | • | | unfavorable changes to currency exchange rates; |
| | • | | the Company’s ability to protect its intellectual property in certain jurisdictions; |
| | • | | the Company’s ability to effectively implement ongoing restructuring and other cost-savings measures or realize the full amount of estimated savings; and |
| | • | | compliance with, and increased costs related to, domestic and international regulations. |
The foregoing risks should be read in conjunction with the Company’s filings with the Securities and Exchange Commission (the “SEC”), including “Risk Factors”, in its most recent Annual Report on Form 10-K and subsequent SEC filings, for a discussion of these and other risks and uncertainties. In addition, the business outlook discussed in this Form 8-K does not include the potential impact of any business combinations, acquisitions, divestitures, strategic investments and other significant transactions that may be completed after the date hereof, each of which may present material risks to the Company’s future business and financial results.
Except as required by law, the Company expressly disclaims any obligation or undertaking to update any forward-looking statements to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Use of Non-GAAP Financial Measures
The Company has provided information regarding adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) and Adjusted EBITDA margin, each a non-GAAP financial measure. This Form 8-K also includes an estimate of future Adjusted EBITDA margin. Such forward-looking non-GAAP measure may differ significantly from the corresponding GAAP measures, due to depreciation and amortization, tax expense, interest expense and/or other adjustments, some or all of which management has not quantified for the future periods.
The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, deferred financing cost amortization, and other gains and losses not reflective of the Company’s ongoing operations and related tax effects including transaction expenses, debt retirement expenses, impairment of assets held for sale, gain or loss on sale of business, restructuring expense, unrealized currency gain or loss and unrealized revaluation of derivatives. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by product revenues.
In evaluating its business, the Company considers and uses these non-GAAP financial measures as supplemental measures of its operating performance. Management provides such non-GAAP financial measures so that investors will have the same financial information that management uses with the belief that it will assist investors in properly assessing the Company’s performance on a period-over-period basis by excluding matters not indicative of the Company’s ongoing operating or liquidity results. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur revenues, expenses, and cash and non-cash obligations that are the same as or similar to some of the adjustments in our presentation of non-GAAP financial measures. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There also can be no assurance that we will not modify the presentation of our non-GAAP financial measures in the future, and any such modification may be material. Other companies in our industry may define and calculate these non-GAAP financial measures differently than we do and those calculations may not be comparable to our metrics. These non-GAAP measures have limitations as analytical tools, and when assessing the Company’s operating performance or liquidity, investors should not consider these non-GAAP measures in isolation, or as a substitute for net income, revenue or other consolidated income statement or cash flow statement data prepared in accordance with GAAP.
