MTS Reports Fiscal 2020 Second Quarter Financial Results
SECOND QUARTER FINANCIAL AND OPERATING HIGHLIGHTS
- Record orders of
$277.4 million , an increase of 31.1%, reflecting record orders in both our Test & Simulation and Sensors Business Units - Backlog strong at
$500.1 million , an increase of 1.4% over prior year - Revenue of
$211.5 million , a decline of 9.3% - Sensors revenue growth of 4.6%
- GAAP diluted loss per share of
$(0.06) , reflecting the impact of the restructuring actions taken amidst economic uncertainty - Adjusted diluted earnings per share of
$0.27 , including$0.26 of amortization expense
FINANCIAL TABLE |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
(in thousands, except per share data - unaudited) |
|
|
|
|
|||||||||||
Revenue |
$ |
211,463 |
$ |
233,046 |
$ |
417,306 |
$ |
436,227 |
|||||||
Revenue % increase (decrease) |
(9.3) |
% |
21.8 |
% |
(4.3) |
% |
13.2 |
% |
|||||||
Gross margin |
33.7 |
% |
37.5 |
% |
35.4 |
% |
38.0 |
% |
|||||||
Operating margin |
3.8 |
% |
10.4 |
% |
5.5 |
% |
9.7 |
% |
|||||||
Earnings (loss) before taxes |
$ |
(1,069) |
$ |
17,076 |
$ |
5,386 |
$ |
28,273 |
|||||||
Net income (loss) |
(1,071) |
14,160 |
4,235 |
24,661 |
|||||||||||
Diluted earnings (loss) per share |
(0.06) |
0.73 |
0.22 |
1.27 |
|||||||||||
Adjusted diluted earnings per share1 |
0.27 |
0.76 |
0.64 |
1.36 |
|||||||||||
Adjusted EBITDA1 |
31,527 |
37,554 |
61,154 |
67,656 |
|||||||||||
Cash and cash equivalents, end of period |
66,582 |
74,122 |
|||||||||||||
Backlog, end of period |
500,135 |
493,468 |
|||||||||||||
Total debt, end of period |
600,592 |
464,420 |
1 |
Refer to the "Non-GAAP Financial Measures" section below for discussion of the calculation of these non-GAAP financial measures. |
EXECUTIVE COMMENTARY - DR.
"As we confront the ongoing effects of the global COVID-19 pandemic, we are focused on protecting the well-being of our employees and continuing to service our long-standing customer base while managing our cash, maximizing liquidity, and reducing our cost infrastructure. Despite the pandemic's impact, we achieved record orders in the second quarter in both our Test & Simulation and Sensors businesses and a near-record backlog. Notably, our Test & Simulation segment was awarded the largest order in MTS history for an advanced seismic simulation system in
Towards the end of the quarter, we saw softer demand as the pandemic forced many customers to temporarily shut down their operations and delay orders. Additionally, temporary closures of some of our facilities as well as government restrictions on cross-border access created logistical delays and further limited our employees' access to customers. Nevertheless, as an essential critical infrastructure business, we are continuing to serve clients in the
We continue to act decisively to mitigate COVID-19's impact on our business. While the decision to restructure the business and reduce costs was difficult, we completed these initiatives rapidly to improve operating efficiencies and strengthen our financial position. We took further short-term cost actions, including implementing furloughs, extending paid time-off, and reducing work schedules, to address the immediate effects of the virus' impact on our customers, our suppliers and our internal operations. We suspended our dividend to maximize liquidity, helping ensure that we are able to meet our financial obligations while continuing to make the most critical investments in our business.
We remain confident we will emerge from this crisis stronger owing to our highly diverse customer base, our broad geographic footprint, and the critical nature of the MTS product portfolio relative to the markets we serve. While the duration and scale of COVID-19's economic impact remains unknown, we believe companies globally will continue to prioritize R&D over the long-term and that we are uniquely positioned to shorten their development cycles and decrease their costs, supporting their product development and ultimately their success."
HIGHLIGHTS FOR THE 2020 SECOND FISCAL QUARTER
Revenue
Revenue was
Orders
Test & Simulation orders for the quarter were a record at
Sensors orders for the quarter were
Backlog
Backlog of
Net Income and Diluted Earnings Per Share
GAAP diluted earnings (loss) per share was
Second quarter of fiscal year 2020 and 2019 results include
Adjusted EBITDA
Adjusted EBITDA declined to
Coronavirus 2019 (COVID-19) Pandemic
The global spread of COVID-19 has created significant volatility, uncertainty and economic disruption. As an essential critical infrastructure business, we have continued to operate in the
Cost Reductions and Restructuring Actions
Although we believe our financial position is strong, given the level of economic uncertainty, our cost reduction actions provide an increased level of flexibility during these challenging times. We expect to incur total restructuring charges of approximately
Additionally, we have implemented temporary, incremental cost reduction measures that will provide for further short-term flexibility and will remain in place until we begin to see marked improvement in the markets we serve. These temporary measures will save at least
Our combined permanent restructuring actions and temporary cost reduction measures will reduce our expense infrastructure exceeding
Balance Sheet and Liquidity Estimates
During the quarter, our total debt balance increased by
"Our liquidity position remains sound, with over
Dividend Suspension
During the second quarter of fiscal year 2020, the Board of Directors declared a quarterly dividend of $0.30 per share. The dividend was paid on March 30, 2020 to shareholders of record as of the close of business on
Guidance Suspension
Consistent with our announcement on
SECOND QUARTER CONFERENCE CALL
As announced on
Call toll free +1-800-367-2403 (international toll +1-334-777-6978) and reference the conference pass code 3918217. The conference call replay will be available at
A transcript of the call can also be accessed from the MTS website at http://investor.mts.com/events-and-presentations/presentations beginning on
ABOUT
NON-GAAP FINANCIAL MEASURES
We believe that disclosing adjusted diluted earnings per share, which is diluted earnings per share excluding the impact from restructuring expenses, acquisition-related expenses and the acquisition inventory fair value adjustment is useful to investors as a measure of operating performance. We use this as one measure to monitor and evaluate operating performance. Adjusted diluted earnings per share is a financial measure that does not reflect United States Generally Accepted Accounting Principles (GAAP). We calculate this measure by adding back the after-tax effect of the restructuring expenses, acquisition-related expenses and the acquisition inventory fair value adjustment to net income and dividing the result by the diluted weighted average shares outstanding.
We believe that disclosing earnings before interest, taxes, depreciation and amortization (EBITDA), EBITDA excluding the impact from stock-based compensation, restructuring expenses, acquisition-related expenses and the acquisition inventory fair value adjustment (Adjusted EBITDA) and Adjusted EBITDA divided by revenue (Adjusted EBITDA margin) are useful to investors as a measure of leverage and operating performance. We use these measures to monitor and evaluate leverage and operating performance. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are financial measures that do not reflect GAAP. We calculate EBITDA by adding back interest, taxes, depreciation and amortization expense to net income. Adjusted EBITDA is calculated by adding back stock-based compensation, restructuring expenses, acquisition-related expenses and the acquisition inventory fair value adjustment to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenue.
We believe that disclosing free cash flow is useful to investors as a measure of operating performance. We use this measure as an indicator of our strength and ability to generate cash. Free cash flow is a financial measure that does not reflect GAAP. We calculate free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment and businesses, net of cash acquired, plus cash proceeds from sales of property and equipment.
Investors should consider these non-GAAP financial measures in addition to, not as a substitute for or better than, financial measures prepared in accordance with GAAP. Reconciliations of the components of these measures to the most directly comparable GAAP financial measures are included in Exhibits B, C, D and E of this earnings release.
FORWARD-LOOKING STATEMENTS
This earnings release contains "forward-looking statements" made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties, as well as assumptions, that could cause actual results to differ materially from historical results and those presently anticipated or projected. Statements made under the heading "Outlook" are forward-looking statements, and words such as "may," "will," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions identify forward-looking statements in other parts of this earnings release. Such statements include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions, statements about the opportunities and outlook for our Sensors and Test & Simulation sectors, statements about the impact of COVID-19 and related economic uncertainty, and other statements that are not historical facts. These statements are based on our current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements. Risks, uncertainties and assumptions that could cause our actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, the currently-unknown impact of COVID-19 and related economic uncertainty and those described in the "Risk Factors" section of our most recent Annual Report on Form 10-K filed with the
MTS SYSTEMS CORPORATION |
|||||||||||||||
Consolidated Statements of Income |
|||||||||||||||
(unaudited - in thousands, except per share data) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Revenue |
|||||||||||||||
Product |
$ |
183,223 |
$ |
206,690 |
$ |
362,081 |
$ |
381,769 |
|||||||
Service |
28,240 |
26,356 |
55,225 |
54,458 |
|||||||||||
Total revenue |
211,463 |
233,046 |
417,306 |
436,227 |
|||||||||||
Cost of sales |
|||||||||||||||
Product |
121,206 |
129,579 |
232,845 |
237,746 |
|||||||||||
Service |
19,016 |
16,117 |
36,611 |
32,826 |
|||||||||||
Total cost of sales |
140,222 |
145,696 |
269,456 |
270,572 |
|||||||||||
Gross profit |
71,241 |
87,350 |
147,850 |
165,655 |
|||||||||||
Gross margin |
33.7 |
% |
37.5 |
% |
35.4 |
% |
38.0 |
% |
|||||||
Operating expenses |
|||||||||||||||
Selling and marketing |
30,131 |
33,395 |
62,850 |
65,484 |
|||||||||||
General and administrative |
25,997 |
22,105 |
47,690 |
43,183 |
|||||||||||
Research and development |
7,143 |
7,676 |
14,182 |
14,848 |
|||||||||||
Total operating expenses |
63,271 |
63,176 |
124,722 |
123,515 |
|||||||||||
Income from operations |
7,970 |
24,174 |
23,128 |
42,140 |
|||||||||||
Operating margin |
3.8 |
% |
10.4 |
% |
5.5 |
% |
9.7 |
% |
|||||||
Interest income (expense), net |
(8,857) |
(7,368) |
(17,129) |
(14,186) |
|||||||||||
Other income (expense), net |
(182) |
270 |
(613) |
319 |
|||||||||||
Income (loss) before income taxes |
(1,069) |
17,076 |
5,386 |
28,273 |
|||||||||||
Income tax provision |
2 |
2,916 |
1,151 |
3,612 |
|||||||||||
Net income (loss) |
$ |
(1,071) |
$ |
14,160 |
$ |
4,235 |
$ |
24,661 |
|||||||
Earnings per share |
|||||||||||||||
Basic |
|||||||||||||||
Earnings (loss) per share |
$ |
(0.06) |
$ |
0.74 |
$ |
0.22 |
$ |
1.28 |
|||||||
Weighted average common shares outstanding |
19,193 |
19,251 |
19,169 |
19,234 |
|||||||||||
Diluted |
|||||||||||||||
Earnings (loss) per share |
$ |
(0.06) |
$ |
0.73 |
$ |
0.22 |
$ |
1.27 |
|||||||
Weighted average common shares outstanding |
19,361 |
19,441 |
19,361 |
19,393 |
|||||||||||
Dividends declared per share |
$ |
0.30 |
$ |
0.30 |
$ |
0.60 |
$ |
0.60 |
MTS SYSTEMS CORPORATION |
|||||||
Condensed Consolidated Balance Sheets |
|||||||
(unaudited - in thousands) |
|||||||
|
|
||||||
ASSETS |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
66,582 |
$ |
57,937 |
|||
Accounts receivable, net |
122,207 |
121,260 |
|||||
Unbilled accounts receivable, net |
82,274 |
80,331 |
|||||
Inventories, net |
180,191 |
167,199 |
|||||
Prepaid expenses and other current assets |
28,331 |
23,761 |
|||||
Total current assets |
479,585 |
450,488 |
|||||
Property and equipment, net |
101,856 |
101,083 |
|||||
Goodwill |
465,411 |
429,039 |
|||||
Intangible assets, net |
344,351 |
306,585 |
|||||
Other long-term assets |
32,645 |
10,782 |
|||||
Total assets |
$ |
1,423,848 |
$ |
1,297,977 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Current liabilities |
|||||||
Short-term borrowings |
$ |
32,000 |
$ |
— |
|||
Current maturities of long-term debt, net |
2,818 |
27,969 |
|||||
Accounts payable |
59,107 |
46,849 |
|||||
Advance payments from customers |
67,323 |
70,520 |
|||||
Other accrued liabilities |
99,140 |
106,238 |
|||||
Total current liabilities |
260,388 |
251,576 |
|||||
Long-term debt, less current maturities, net |
565,774 |
484,648 |
|||||
Other long-term liabilities |
116,008 |
77,694 |
|||||
Total liabilities |
942,170 |
813,918 |
|||||
Shareholders' equity |
|||||||
Common stock, |
|||||||
19,188 and 19,124 shares issued and outstanding as |
|||||||
of |
4,797 |
4,781 |
|||||
Additional paid-in capital |
187,551 |
182,422 |
|||||
Retained earnings |
308,055 |
315,329 |
|||||
Accumulated other comprehensive income (loss) |
(18,725) |
(18,473) |
|||||
Total shareholders' equity |
481,678 |
484,059 |
|||||
Total liabilities and shareholders' equity |
$ |
1,423,848 |
$ |
1,297,977 |
MTS SYSTEMS CORPORATION |
|||||||||||||||
Condensed Consolidated Statements of Cash Flows |
|||||||||||||||
(unaudited - in thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Cash Flows from Operating Activities |
|||||||||||||||
Net income |
$ |
(1,071) |
$ |
14,160 |
$ |
4,235 |
$ |
24,661 |
|||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities |
|||||||||||||||
Stock-based compensation |
2,928 |
2,895 |
5,095 |
4,689 |
|||||||||||
Fair value adjustment to acquired inventory |
600 |
539 |
1,140 |
984 |
|||||||||||
Depreciation |
6,407 |
5,105 |
12,069 |
10,249 |
|||||||||||
Amortization |
6,270 |
4,403 |
11,055 |
8,219 |
|||||||||||
Accretion of contingent consideration |
456 |
— |
456 |
— |
|||||||||||
(Gain) loss on sale or disposal of property and equipment |
438 |
349 |
1,050 |
510 |
|||||||||||
Amortization of debt issuance costs |
577 |
1,039 |
1,444 |
2,099 |
|||||||||||
Deferred income taxes |
827 |
15 |
893 |
(1,243) |
|||||||||||
Other |
(240) |
659 |
(238) |
1,087 |
|||||||||||
Changes in operating assets and liabilities |
(14,028) |
(9,126) |
(39,778) |
(20,586) |
|||||||||||
Net Cash Provided by (Used in) Operating Activities |
3,164 |
20,038 |
(2,579) |
30,669 |
|||||||||||
Cash Flows from Investing Activities |
|||||||||||||||
Purchases of property and equipment |
(5,709) |
(5,576) |
(16,281) |
(9,349) |
|||||||||||
Proceeds from sale of property and equipment |
— |
— |
— |
10 |
|||||||||||
Purchases of business, net of acquired cash |
(48,104) |
(3,794) |
(48,104) |
(81,826) |
|||||||||||
Other |
— |
— |
— |
(285) |
|||||||||||
Net Cash Provided by (Used in) Investing Activities |
(53,813) |
(9,370) |
(64,385) |
(91,450) |
|||||||||||
Cash Flows from Financing Activities |
|||||||||||||||
Proceeds from issuance of long-term debt |
58,576 |
— |
58,576 |
80,391 |
|||||||||||
(Payments on) proceeds from financing arrangements, net |
718 |
(2,664) |
28,783 |
(6,783) |
|||||||||||
Cash dividends |
(5,747) |
(5,365) |
(11,486) |
(10,724) |
|||||||||||
Proceeds from exercise of stock options and employee stock purchase plan |
590 |
663 |
631 |
701 |
|||||||||||
Payments to purchase and retire common stock |
(38) |
(42) |
(873) |
(398) |
|||||||||||
Net Cash Provided by (Used in) Financing Activities |
54,099 |
(7,408) |
75,631 |
63,187 |
|||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(939) |
424 |
(22) |
(88) |
|||||||||||
Increase (decrease) in cash and cash equivalents during the period |
2,511 |
3,684 |
8,645 |
2,318 |
|||||||||||
Cash and cash equivalents balance, beginning of period |
64,071 |
70,438 |
57,937 |
71,804 |
|||||||||||
Cash and cash equivalents balance, end of period |
$ |
66,582 |
$ |
74,122 |
$ |
66,582 |
$ |
74,122 |
Exhibit A |
|||||||||||||||
|
|||||||||||||||
Segment Financial Information |
|||||||||||||||
(unaudited - in thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Test & Simulation Segment |
|||||||||||||||
Revenue |
$ |
125,497 |
$ |
151,032 |
$ |
246,227 |
$ |
276,592 |
|||||||
Cost of sales |
92,388 |
103,742 |
176,148 |
189,757 |
|||||||||||
Gross profit |
33,109 |
47,290 |
70,079 |
86,835 |
|||||||||||
Gross margin |
26.4 |
% |
31.3 |
% |
28.5 |
% |
31.4 |
% |
|||||||
Operating expenses |
33,914 |
34,606 |
63,888 |
66,820 |
|||||||||||
Income (loss) from operations |
$ |
(805) |
$ |
12,684 |
$ |
6,191 |
$ |
20,015 |
|||||||
Sensors Segment |
|||||||||||||||
Revenue |
$ |
86,198 |
$ |
82,375 |
$ |
171,733 |
$ |
160,325 |
|||||||
Cost of sales |
48,062 |
42,301 |
93,961 |
81,492 |
|||||||||||
Gross profit |
38,136 |
40,074 |
77,772 |
78,833 |
|||||||||||
Gross margin |
44.2 |
% |
48.6 |
% |
45.3 |
% |
49.2 |
% |
|||||||
Operating expenses |
29,357 |
28,570 |
60,834 |
56,695 |
|||||||||||
Income from operations |
$ |
8,779 |
$ |
11,504 |
$ |
16,938 |
$ |
22,138 |
|||||||
Intersegment Eliminations |
|||||||||||||||
Revenue |
$ |
(232) |
$ |
(361) |
$ |
(654) |
$ |
(690) |
|||||||
Cost of sales |
(228) |
(347) |
(653) |
(677) |
|||||||||||
Gross profit |
(4) |
(14) |
(1) |
(13) |
|||||||||||
Income (loss) from operations |
$ |
(4) |
$ |
(14) |
$ |
(1) |
$ |
(13) |
|||||||
|
|||||||||||||||
Revenue |
$ |
211,463 |
$ |
233,046 |
$ |
417,306 |
$ |
436,227 |
|||||||
Cost of sales |
140,222 |
145,696 |
269,456 |
270,572 |
|||||||||||
Gross profit |
71,241 |
87,350 |
147,850 |
165,655 |
|||||||||||
Gross margin |
33.7 |
% |
37.5 |
% |
35.4 |
% |
38.0 |
% |
|||||||
Operating expenses |
63,271 |
63,176 |
124,722 |
123,515 |
|||||||||||
Income from operations |
$ |
7,970 |
$ |
24,174 |
$ |
23,128 |
$ |
42,140 |
Exhibit B |
|||||||||||||||||||
|
|||||||||||||||||||
Reconciliation of Adjusted Diluted Earnings Per Share |
|||||||||||||||||||
(unaudited - in thousands, except per share data) |
|||||||||||||||||||
Three Months Ended |
|||||||||||||||||||
|
|
||||||||||||||||||
Pre-Tax |
Tax |
Net |
Pre-Tax |
Tax |
Net |
||||||||||||||
Net income (loss) |
$ |
(1,069) |
$ |
2 |
$ |
(1,071) |
$ |
17,076 |
$ |
2,916 |
$ |
14,160 |
|||||||
Restructuring expenses 1 |
6,138 |
1,788 |
4,350 |
— |
— |
— |
|||||||||||||
Acquisition-related expenses 1 |
1,878 |
409 |
1,469 |
262 |
55 |
207 |
|||||||||||||
Acquisition inventory fair value adjustment 1 |
600 |
126 |
474 |
539 |
81 |
458 |
|||||||||||||
Adjusted net income 2 |
$ |
7,547 |
$ |
2,325 |
$ |
5,222 |
$ |
17,877 |
$ |
3,052 |
$ |
14,825 |
|||||||
Weighted average diluted common shares outstanding |
19,361 |
19,441 |
|||||||||||||||||
Diluted earnings (loss) per share |
$ |
(0.06) |
$ |
— |
$ |
(0.06) |
$ |
0.88 |
$ |
0.15 |
$ |
0.73 |
|||||||
Impact of restructuring expenses |
0.32 |
0.10 |
0.22 |
— |
— |
— |
|||||||||||||
Impact of acquisition-related expenses |
0.11 |
0.02 |
0.09 |
0.01 |
— |
0.01 |
|||||||||||||
Impact of acquisition inventory fair value adjustment |
0.03 |
0.01 |
0.02 |
0.03 |
0.01 |
0.02 |
|||||||||||||
Adjusted diluted earnings per share2 |
$ |
0.40 |
$ |
0.13 |
$ |
0.27 |
$ |
0.92 |
$ |
0.16 |
$ |
0.76 |
|||||||
1 In determining the tax impact of restructuring expenses, acquisition-related expenses and acquisition inventory fair value adjustment, we applied the statutory rate in effect for each jurisdiction where the expenses were incurred. |
|||||||||||||||||||
2 Denotes non-GAAP financial measure. |
Exhibit C |
|||||||||||||||||||
|
|||||||||||||||||||
Reconciliation of Earnings Per Share Excluding Restructuring, Acquisition-Related |
|||||||||||||||||||
and Acquisition Inventory Fair Value Adjustment Expenses |
|||||||||||||||||||
(unaudited - in thousands, except per share data) |
|||||||||||||||||||
Six Months Ended |
|||||||||||||||||||
|
|
||||||||||||||||||
Pre-Tax |
Tax |
Net |
Pre-Tax |
Tax |
Net |
||||||||||||||
Net income |
$ |
5,386 |
$ |
1,151 |
$ |
4,235 |
$ |
28,273 |
$ |
3,612 |
$ |
24,661 |
|||||||
Restructuring expenses 1 |
6,138 |
1,788 |
4,350 |
130 |
33 |
97 |
|||||||||||||
Acquisition-related expenses 1 |
3,624 |
775 |
2,849 |
1,035 |
217 |
818 |
|||||||||||||
Acquisition inventory fair value adjustment 1 |
1,140 |
239 |
901 |
984 |
148 |
836 |
|||||||||||||
Adjusted net income 2 |
$ |
16,288 |
$ |
3,953 |
$ |
12,335 |
$ |
30,422 |
$ |
4,010 |
$ |
26,412 |
|||||||
Weighted average diluted common shares outstanding |
19,361 |
19,393 |
|||||||||||||||||
Diluted earnings per share |
$ |
0.28 |
$ |
0.06 |
$ |
0.22 |
$ |
1.46 |
$ |
0.19 |
$ |
1.27 |
|||||||
Impact of restructuring expenses |
0.32 |
0.10 |
0.22 |
0.01 |
— |
0.01 |
|||||||||||||
Impact of acquisition-related expenses |
0.19 |
0.04 |
0.15 |
0.05 |
0.01 |
0.04 |
|||||||||||||
Impact of acquisition inventory fair value adjustment |
0.06 |
0.01 |
0.05 |
0.05 |
0.01 |
0.04 |
|||||||||||||
Adjusted diluted earnings per share2 |
$ |
0.85 |
$ |
0.21 |
$ |
0.64 |
$ |
1.57 |
$ |
0.21 |
$ |
1.36 |
|||||||
1 In determining the tax impact of restructuring expenses, acquisition-related expenses and acquisition inventory fair value adjustment, we applied the statutory rate in effect for each jurisdiction where the expenses were incurred. |
|||||||||||||||||||
2 Denotes non-GAAP financial measure. |
Exhibit D |
|||||||||||||||
|
|||||||||||||||
Reconciliation of EBITDA and Adjusted EBITDA |
|||||||||||||||
(unaudited - in thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Net income (loss) |
$ |
(1,071) |
$ |
14,160 |
$ |
4,235 |
$ |
24,661 |
|||||||
Net income margin |
(0.5) |
% |
6.1 |
% |
1.0 |
% |
5.7 |
% |
|||||||
Income tax provision |
2 |
2,916 |
1,151 |
3,612 |
|||||||||||
Interest expense, net |
8,857 |
7,368 |
17,129 |
14,186 |
|||||||||||
Depreciation |
6,407 |
5,105 |
12,069 |
10,249 |
|||||||||||
Amortization |
6,270 |
4,403 |
11,055 |
8,219 |
|||||||||||
EBITDA 1 |
20,465 |
33,952 |
45,639 |
60,927 |
|||||||||||
Stock-based compensation |
2,928 |
2,895 |
5,095 |
4,689 |
|||||||||||
Restructuring expenses |
6,138 |
— |
6,138 |
130 |
|||||||||||
Acquisition-related expenses 2 |
1,396 |
168 |
3,142 |
926 |
|||||||||||
Acquisition inventory fair value adjustment |
600 |
539 |
1,140 |
984 |
|||||||||||
Adjusted EBITDA 1 |
$ |
31,527 |
$ |
37,554 |
$ |
61,154 |
$ |
67,656 |
|||||||
Adjusted EBITDA margin 1,3 |
14.9 |
% |
16.1 |
% |
14.7 |
% |
15.5 |
% |
|||||||
1 Denotes non-GAAP financial measure. |
|||||||||||||||
2 Acquisition-related expenses were adjusted to exclude stock-based compensation that is otherwise included in the stock-based compensation line and interest expense that is otherwise included in the interest expense, net line. |
|||||||||||||||
3 Adjusted EBITDA was divided by revenue when calculating the Adjusted EBITDA margin. |
Exhibit E |
|||||||||||||||
|
|||||||||||||||
Reconciliation of Free Cash Flow |
|||||||||||||||
(unaudited - in thousands) |
|||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||
|
|
|
|
||||||||||||
Net Cash Provided by (Used in) Operating Activities |
$ |
3,164 |
$ |
20,038 |
$ |
(2,579) |
$ |
30,669 |
|||||||
Purchases of property and equipment |
(5,709) |
(5,576) |
(16,281) |
(9,349) |
|||||||||||
Proceeds from sale of property and equipment |
— |
— |
— |
10 |
|||||||||||
Free cash flow1 |
$ |
(2,545) |
$ |
14,462 |
$ |
(18,860) |
$ |
21,330 |
|||||||
1 Denotes non-GAAP financial measure. |
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SOURCE
Brian Ross, Executive Vice President and Chief Financial Officer, irrequest@mts.com,(952) 937-4000