Steel Connect Reports Third Quarter Financial Results

Third Quarter 2021 Results

  • Net revenue totaled $151.8 million, as compared to $177.4 million in the prior year
  • Net loss was $27.6 million, as compared to net loss of $6.2 million in the prior year
  • Net loss attributable to common stockholders was $28.1 million, as compared to net loss of $6.7 million in the prior year
  • Adjusted EBITDA* was $16.5 million, as compared to $16.7 million in the prior year
  • Net cash provided by operating activities was $15.8 million
  • Free Cash Flow* totaled $15.2 million
  • Total debt, net of unamortized discounts and issuance costs, was $374.2 million; Net Debt* totaled $283.2 million

Nine-Month Financial Results

  • Net revenue totaled $477.8 million, as compared to $618.0 million in the prior year
  • Net loss was $33.4 million, as compared to net loss of $4.9 million in the prior year
  • Net loss attributable to common stockholders was $35.0 million, as compared to net loss of $6.5 million in the prior year
  • Adjusted EBITDA* was $60.2 million, as compared to $62.1 million in the prior year
  • Net cash provided by operating activities was $21.0 million
  • Free Cash Flow* totaled $18.2 million

SMYRNA, Tenn.–(BUSINESS WIRE)–Steel Connect, Inc. (the “Company”) (NASDAQ: STCN) today announced financial results for its third quarter ended April 30, 2021.

As we emerge from the pandemic, we remain focused on our highest-return priorities to generate long-term value for all stakeholders,” said Interim Chief Executive Officer and Executive Chairman Warren Lichtenstein. “The Special Committee of the Board of Directors is still evaluating Steel Partners’ proposal to purchase all outstanding shares of Steel Connect not currently owned by Steel Partners or its affiliates. In the Direct Marketing segment, the Board of Directors approved a Competitive Improvement Plan aimed at expanding services, improving production, and reducing overall production costs. Also, in the Supply Chain business, we continue to reduce costs as we right size the business.”

The Company’s acquisition proposal special committee, comprised of independent directors, is still evaluating the proposed transaction contemplated in the expression of interest from Steel Partners Holdings L.P., (“Steel Partners”) to acquire all of the outstanding shares of the Company’s common stock not already owned by Steel Partners or its affiliates.

 

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands)

Net revenue

 

$

151,785

 

 

$

177,351

 

 

$

477,766

 

 

$

617,956

 

Net loss

 

(27,629)

 

 

(6,159)

 

 

(33,376)

 

 

(4,924)

 

Net loss attributable to common stockholders

 

(28,148)

 

 

(6,684)

 

 

(34,962)

 

 

(6,516)

 

Adjusted EBITDA*

 

16,472

 

 

16,694

 

 

60,219

 

 

62,059

 

Adjusted EBITDA margin*

 

10.9

%

 

9.4

%

 

12.6

%

 

10.0

%

Net cash provided by operating activities

 

15,826

 

 

45,178

 

 

21,012

 

 

60,051

 

Additions to property and equipment

 

659

 

 

1,107

 

 

2,819

 

 

11,477

 

Free cash flow*

 

15,167

 

 

44,071

 

 

18,193

 

 

48,574

 

* See reconciliations of these non-GAAP measurements to the most directly comparable GAAP measures included in the financial tables. See also “Note Regarding Use of Non-GAAP Financial Measurements” below for the definitions of these non-GAAP measures.

Results of Operations

Comparison of the Third Quarter and Nine Months Ended April 30, 2021 and 2020

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

2021

 

2020

 

2021

 

2020

 

(unaudited, $ in thousands)

Net revenue:

 

 

 

 

 

 

 

Direct Marketing

$

102,351

 

 

$

98,284

 

 

$

299,214

 

 

$

354,404

 

Supply Chain

49,434

 

 

79,067

 

 

178,552

 

 

263,552

 

Total net revenue

151,785

 

 

177,351

 

 

477,766

 

 

617,956

 

Cost of revenue

119,538

 

 

143,881

 

 

369,201

 

 

494,991

 

Gross profit margin

21.2

%

 

18.9

%

 

22.7

%

 

19.9

%

Selling, general and administrative

21,405

 

 

25,872

 

 

70,073

 

 

79,264

 

Goodwill impairment charge

25,658

 

 

 

 

25,658

 

 

 

Amortization of intangible assets

4,182

 

 

6,531

 

 

16,076

 

 

20,719

 

Interest expense

7,764

 

 

8,523

 

 

23,412

 

 

26,425

 

All other (income) expense, net

(153)

 

 

(2,782)

 

 

4,007

 

 

(2,547)

 

Total costs and expenses

58,856

 

 

38,144

 

 

139,226

 

 

123,861

 

Loss before income taxes

(26,609)

 

 

(4,674)

 

 

(30,661)

 

 

(896)

 

Income tax expense

1,020

 

 

1,485

 

 

2,715

 

 

4,028

 

Net loss

$

(27,629)

 

 

$

(6,159)

 

 

$

(33,376)

 

 

$

(4,924)

 

Net Revenue

Total net revenue for the third quarter decreased $25.6 million, or 14.4%, as compared to the same period in the prior year. Net revenue for the Direct Marketing segment increased by approximately $4.1 million, primarily driven by higher volume, partially offset by a slightly lower average price per package mailed. The increase in net revenue was primarily associated with customers in the financial industry. Within the Supply Chain segment, net revenues decreased by $29.6 million. This decrease in net revenue was primarily driven by lower volume associated with clients in the computing and consumer electronics markets.

Total net revenue for the nine months ended April 30, 2021 decreased $140.2 million, or 22.7%, as compared to the same period in the prior year. Net revenue for the Direct Marketing segment decreased by $55.2 million, primarily driven by lower sales volume. The decrease in net revenue was primarily associated with customers in the financial and multiple-system operator industries. Within the Supply Chain segment, net revenues decreased by $85.0 million. This decrease in net revenue was primarily driven by lower volume associated with clients in the computing and consumer electronics markets.

Cost of Revenue

Cost of revenue for the third quarter decreased $24.3 million, or 16.9%, as compared to the same period in the prior year, primarily due to decreased material and labor costs in both the Direct Marketing and Supply Chain segments. The Direct Marketing segment’s gross margin percentage increased by 270 basis points to 21.8% for the three months ended April 30, 2021, as compared to 19.1% for the same period in the prior year. The increase in the Direct Marketing segment’s gross margin percentage was primarily due to favorable changes in customer sales mix and Direct Marketing’s cost management initiatives. The Supply Chain segment’s gross margin percentage increased by 150 basis points to 20.0% for the three months ended April 30, 2021, as compared to 18.5% for the same period in the prior year, primarily due to improved customer mix and decreased materials and labor costs.

Cost of revenue for the nine months ended April 30, 2021 decreased $125.8 million, or 25.4%, as compared to the same period in the prior year, primarily due to decreased material and labor costs. The Direct Marketing segment’s gross margin percentage increased by 180 basis points to 23.2% for the nine months ended April 30, 2021, as compared to 21.4% for the same period in the prior year, primarily due to favorable changes in customer sales mix and the Company’s aggressive measures to manage labor and reduce discretionary spend. The Supply Chain segment’s gross margin percentage increased by 410 basis points to 22.0% for the nine months ended April 30, 2021, as compared to 17.9% for the same period in the prior year, primarily due to improved sales mix towards higher margin services.

Selling, General and Administrative

Selling, general and administrative expenses for the third quarter decreased $4.5 million, or 17.3%, as compared to the same period in the prior year, comprised of a decrease in the Direct Marketing segment of $6.3 million related to a net decrease of certain tax liabilities of $5.0 million as well as decreases in most other expense categories as a result of the COVID-19 pandemic cost saving actions.

Selling, general and administrative expenses for the Supply Chain segment increased primarily due to increased information technology costs due to one-time contract termination costs.

Selling, general and administrative expenses for the nine months ended April 30, 2021 decreased $9.2 million, or 11.6%, as compared to the same period in the prior year. Selling, general and administrative expenses for the Direct Marketing segment decreased $9.3 million, as compared to the same period in the prior year, primarily in the areas of employee-related costs, sales and marketing, and other discretionary expenses. Selling, general and administrative expenses for the Supply Chain segment increased $1.3 million, as compared to the same period in the prior year, primarily due to increased information technology costs due to one-time contract termination costs.

Goodwill Impairment Charge

During the three and nine months ended April 30, 2021, the Company recorded a non-cash pre-tax goodwill impairment charge of $25.7 million for the Direct Marketing segment. The Company did not record any impairment charge during the same periods in the prior fiscal year.

Amortization of Intangible Assets

Amortization of intangibles assets for the third quarter decreased $2.3 million, or 36.0%, as compared to the same period in the prior year. Amortization of intangibles assets for the nine months ended April 30, 2021 decreased $4.6 million, or 22.4%, as compared to the same period in the prior year. Amortization expense decreased in both periods as our trademarks and tradenames were fully amortized in December 2020, and our customer relationships are amortized using an accelerated method, which reflects the pattern in which we receive the economic benefit of the asset.

Interest Expense

Interest expense for the third quarter decreased $0.8 million, or 8.9%, as compared to the same period in the prior year. Interest expense for the nine months ended April 30, 2021 decreased $3.0 million, or 11.4%, as compared to the same period in the prior year. The lower interest expense in both periods is primarily due to lower average outstanding debt balances.

All Other Expenses, Net

All other expenses, net are primarily composed of foreign exchange gains and losses. The Company recorded $0.2 million and $2.7 million of foreign exchange gains during the three months ended April 30, 2021 and 2020, respectively. The Company recorded $3.6 million of foreign exchange losses during the nine months ended April 30, 2021, as compared to $2.4 million of foreign exchange gains in the same period in the prior year.

Income Tax Expense

Income tax expense for the third quarter decreased $0.5 million, 31.3%, as compared to the same period in the prior year. Income tax expense for the nine months ended April 30, 2021 decreased $1.3 million, 32.6%, as compared to the same period in the prior year. The decrease in income tax expense for both periods was primarily due to lower taxable income in foreign jurisdictions.

Additions to Property and Equipment (Capital Expenditures)

Capital expenditures for the third quarter totaled $0.7 million, or 0.4% of net revenue, as compared to $1.1 million, or 0.6% of net revenue, for the same period in the prior year. Capital expenditures for the nine months ended April 30, 2021 totaled $2.8 million, or 0.6% of net revenue, as compared to $11.5 million, or 1.9% of net revenue, for the same period in the prior year. The decrease in capital expenditures for both periods in the current fiscal year was primarily due to reduced discretionary spending in response to the COVID-19 pandemic.

Adjusted EBITDA

Adjusted EBITDA decreased $0.2 million, or 1.3%, for the third quarter and decreased $1.8 million, or 3.0%, for the nine months ended April 30, 2021, each as compared to the same period in the prior year, primarily due to reduced gross profit, offset partially by a reduction in certain operating expenses.

Liquidity and Capital Resources

As of April 30, 2021, the Company had cash and cash equivalents of $97.6 million. As of April 30, 2021, IWCO Direct and ModusLink had readily available borrowing capacities of $25.0 million and $5.2 million, respectively, under their credit facilities.

As of April 30, 2021, total debt outstanding, net of unamortized discounts and issuance costs, was $374.2 million, which was comprised of a $365.8 million term loan due December 15, 2022 and $14.9 million outstanding on the 7.50% Convertible Senior Note due March 1, 2024, less associated unamortized discounts and issuance costs.

On June 2, 2021, ModusLink entered into a Second Amendment to the MidCap credit agreement (“Amendment No. 2”) by and among ModusLink, certain of ModusLink’s subsidiaries, and MidCap as lender and agent. Amendment No. 2 amends the MidCap credit agreement to extend the time period for payment from ModusLink to the Company of special distributions to July 31, 2022. In addition, the unused line fee was increased to 0.65% in Amendment No. 2 and certain other technical amendments were incorporated.

Subsequent Event

IWCO Directs Competitive Improvement Plan

On June 2, 2021, the Board of Directors of Steel Connect, Inc. approved a Competitive Improvement Plan (“CIP”) for its subsidiary IWCO Direct. This plan addresses the changing requirements of the customers and markets IWCO serves and the current competitive landscape. The CIP seeks to expand IWCO’s marketing services capabilities, and upgrade its production platform to new digital and inserting technology, while reducing its overall production costs to enhance its competitive pricing capabilities.

The CIP contemplates a total investment of approximately $50 million over a 24-month period. The Company estimates the CIP cost will consist of approximately $36 million for digital press and insertion equipment and approximately $14 million for severance, employee retention, facilities optimization, and other implementation costs. The cost estimate does not include amounts for potential non-cash accelerated depreciation or asset impairment charges relating to facilities and equipment optimization. The timing and amount of the costs will depend on a number of factors.

About Steel Connect, Inc.

Steel Connect, Inc. is a diversified holding company with two wholly-owned subsidiaries, IWCO Direct Holdings, Inc. and ModusLink Corporation, that serve the direct marketing and supply chain management markets, respectively.

IWCO Direct delivers highly effective data-driven marketing solutions for its customers, which represent some of the largest and most respected brands in the world in markets such as insurance, financial services, and multiple system operators (cable or direct broadcasting satellite TV systems). Its full range of services includes strategy, creative and execution for omnichannel marketing campaigns, along with one of the industry’s most sophisticated postal logistics programs for direct mail. Through its Mail-Gard® division, IWCO Direct also offers business continuity and disaster recovery services to protect against unexpected business interruptions, along with providing print and mail outsourcing services. IWCO Direct was named one of the largest direct mail production providers in North America, with the largest platform of continuous digital print technology and a growing direct marketing agency service. IWCO Direct’s solutions enable customers to improve customer lifetime value, which, in turn, has led to longer customer relationships. The company is ISO/IEC 27001 Information Security Management System (ISMS) certified through BSI, reflecting its commitment to data security.

ModusLink is a leader in global supply chain business process management, serving clients in markets such as consumer electronics, communications, computing, medical devices, software, and retail. ModusLink designs and executes critical elements in its clients’ global supply chains to improve speed to market, product customization, flexibility, cost, quality, and service. These benefits are delivered through a combination of industry expertise, innovative service solutions, and integrated operations, proven business processes, an expansive global footprint, and world-class technology. ModusLink also produces and licenses an entitlement management solution powered by its enterprise-class Poetic software, which offers a complete solution for activation, provisioning, entitlement subscription, and data collection from physical goods (connected products) and digital products. ModusLink has an integrated network of strategically located facilities with sites in various countries, including numerous sites throughout North America, Europe, and Asia.

– Financial Tables Follow –

Steel Connect, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

April 30,
2021

 

July 31,
2020

 

(unaudited)

 

 

Assets:

Cash and cash equivalents

$

97,582

 

 

$

75,887

 

Accounts receivable, trade, net

72,048

 

 

93,072

 

Inventories, net

15,673

 

 

15,354

 

Funds held for clients

8,397

 

 

18,755

 

Prepaid expenses and other current assets

24,765

 

 

20,475

 

Total current assets

218,465

 

 

223,543

 

Property and equipment, net

66,619

 

 

79,678

 

Goodwill

231,470

 

 

257,128

 

Other intangible assets, net

119,187

 

 

135,263

 

Operating lease right-of-use assets

51,052

 

 

56,140

 

Other assets

7,062

 

 

7,420

 

Total assets

$

693,855

 

 

$

759,172

 

 

 

 

 

Liabilities:

Accounts payable

$

56,757

 

 

$

70,002

 

Accrued expenses

107,581

 

 

111,380

 

Funds held for clients

8,397

 

 

18,755

 

Current portion of long-term debt

5,612

 

 

5,527

 

Current lease obligations

13,177

 

 

14,318

 

Other current liabilities

28,319

 

 

29,950

 

Total current liabilities

219,843

 

 

249,932

 

Convertible note payable

8,984

 

 

8,054

 

Long-term debt, excluding current portion

359,604

 

 

365,468

 

Long-term lease obligations

39,457

 

 

43,211

 

Other long-term liabilities

11,203

 

 

8,509

 

Total liabilities

639,091

 

 

675,174

 

 

 

 

 

Contingently redeemable preferred stock

35,180

 

 

35,180

 

 

 

 

 

Total stockholders’ equity

19,584

 

 

48,818

 

 

 

 

 

Total liabilities, contingently redeemable preferred stock and stockholders’ equity

$

693,855

 

 

$

759,172

 

Steel Connect, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

Three Months Ended

April 30,

 

 

 

Nine Months Ended

April 30,

 

 

 

2021

 

2020

 

Fav (Unfav)

 

2021

 

2020

 

Fav (Unfav)

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

Direct Marketing

$

102,351

 

 

$

98,284

 

 

4.1

%

 

$

299,214

 

 

$

354,404

 

 

(15.6)

%

Supply Chain

49,434

 

 

79,067

 

 

(37.5)

%

 

178,552

 

 

263,552

 

 

(32.3)

%

Total net revenue

151,785

 

 

177,351

 

 

(14.4)

%

 

477,766

 

 

617,956

 

 

(22.7)

%

Cost of revenue

119,538

 

 

143,881

 

 

16.9

%

 

369,201

 

 

494,991

 

 

25.4

%

Gross profit

32,247

 

 

33,470

 

 

(3.7)

%

 

108,565

 

 

122,965

 

 

(11.7)

%

Gross profit margin

21.2

%

 

18.9

%

 

 

 

22.7

%

 

19.9

%

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

21,405

 

 

25,872

 

 

17.3

%

 

70,073

 

 

79,264

 

 

11.6

%

Goodwill impairment charge

25,658

 

 

 

 

%

 

25,658

 

 

 

 

%

Amortization of intangible assets

4,182

 

 

6,531

 

 

36.0

%

 

16,076

 

 

20,719

 

 

22.4

%

Total operating expenses

51,245

 

 

32,403

 

 

(58.1)

%

 

111,807

 

 

99,983

 

 

(11.8)

%

Operating (loss) income

(18,998)

 

 

1,067

 

 

(1,880.5)

%

 

(3,242)

 

 

22,982

 

 

(114.1)

%

Total other expense

(7,611)

 

 

(5,741)

 

 

(32.6)

%

 

(27,419)

 

 

(23,878)

 

 

(14.8)

%

Loss before income taxes

(26,609)

 

 

(4,674)

 

 

(469.3)

%

 

(30,661)

 

 

(896)

 

 

3,322.0

%

Income tax expense

1,020

 

 

1,485

 

 

31.3

%

 

2,715

 

 

4,028

 

 

32.6

%

Net loss

(27,629)

 

 

(6,159)

 

 

(348.6)

%

 

(33,376)

 

 

(4,924)

 

 

577.8

%

Less: Preferred dividends on redeemable preferred stock

(519)

 

 

(525)

 

 

1.1

%

 

(1,586)

 

 

(1,592)

 

 

0.4

%

Net loss attributable to common stockholders

$

(28,148)

 

 

$

(6,684)

 

 

(321.1)

%

 

$

(34,962)

 

 

$

(6,516)

 

 

436.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Basic net loss per share attributable to common stockholders

$

(0.45)

 

 

$

(0.11)

 

 

 

 

$

(0.56)

 

 

$

(0.11)

 

 

 

Diluted net loss per share attributable to common stockholders

$

(0.45)

 

 

$

(0.11)

 

 

 

 

$

(0.56)

 

 

$

(0.11)

 

 

 

Weighted average common shares used in:

 

 

 

 

 

 

 

 

 

 

 

Basic loss per share

62,263

 

 

61,815

 

 

 

 

61,898

 

 

61,583

 

 

 

Diluted loss per share

62,263

 

 

61,815

 

 

 

 

61,898

 

 

61,583

 

 

 

Steel Connect, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

Nine Months Ended

April 30,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net loss

$

(33,376)

 

 

$

(4,924)

 

Adjustments to reconcile net loss to cash flows from operating activities:

 

 

 

Depreciation

15,622

 

 

17,240

 

Amortization of intangible assets

16,076

 

 

20,719

 

Amortization of deferred financing costs

467

 

 

285

 

Accretion of debt discount

930

 

 

1,240

 

Impairment of goodwill

25,658

 

 

 

Share-based compensation

443

 

 

581

 

Other losses (gains), net

5,686

 

 

(2,509)

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable, net

21,243

 

 

28,492

 

Inventories, net

(80)

 

 

3,847

 

Prepaid expenses and other current assets

(4,179)

 

 

7,538

 

Accounts payable and accrued expenses

(18,592)

 

 

(14,547)

 

Refundable and accrued income taxes, net

(378)

 

 

(793)

 

Other assets and liabilities

(8,508)

 

 

2,882

 

Net cash provided by operating activities

21,012

 

 

60,051

 

Cash flows from investing activities:

 

 

 

Additions of property and equipment

(2,819)

 

 

(11,477)

 

Proceeds from the disposition of property and equipment

174

 

 

12

 

Proceeds from the sale of available-for-sale securities

 

 

163

 

Net cash used in investing activities

(2,645)

 

 

(11,302)

 

Cash flows from financing activities:

 

 

 

Proceeds from revolving lines of credit, net

 

 

19,000

 

Long-term debt repayments

(6,142)

 

 

(3,076)

 

Preferred dividend payments

(1,586)

 

 

(1,563)

 

Payment of debt financing costs

 

 

(914)

 

Repayments on capital lease obligations

(52)

 

 

(83)

 

Proceeds from issuance of common stock

4

 

 

8

 

Net cash (used in) provided by financing activities

(7,776)

 

 

13,372

 

Net effect of exchange rate changes on cash, cash equivalents and restricted cash

746

 

 

(798)

 

Net increase in cash, cash equivalents and restricted cash

11,337

 

 

61,323

 

Cash, cash equivalents and restricted cash, beginning of period

94,642

 

 

46,064

 

Cash, cash equivalents and restricted cash, end of period

$

105,979

 

 

$

107,387

 

Steel Connect, Inc. and Subsidiaries

Segment Data

(in thousands)

(unaudited)

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

2021

 

2020

 

2021

 

2020

Net revenue:

 

 

 

 

 

 

 

Direct Marketing

$

102,351

 

 

$

98,284

 

 

$

299,214

 

 

$

354,404

 

Supply Chain

49,434

 

 

79,067

 

 

178,552

 

 

263,552

 

 

$

151,785

 

 

$

177,351

 

 

$

477,766

 

 

$

617,956

 

Operating (loss) income:

 

 

 

 

 

 

 

Direct Marketing

$

(16,484)

 

 

$

(3,041)

 

 

$

(5,778)

 

 

$

12,379

 

Supply Chain

(534)

 

 

6,535

 

 

9,574

 

 

18,808

 

Total segment operating (loss) income

(17,018)

 

 

3,494

 

 

3,796

 

 

31,187

 

Corporate-level activity

(1,980)

 

 

(2,427)

 

 

(7,038)

 

 

(8,205)

 

Total operating (loss) income

(18,998)

 

 

1,067

 

 

(3,242)

 

 

22,982

 

Total other expense

(7,611)

 

 

(5,741)

 

 

(27,419)

 

 

(23,878)

 

Loss before income taxes

$

(26,609)

 

 

$

(4,674)

 

 

$

(30,661)

 

 

$

(896)

 

Steel Connect, Inc. and Subsidiaries

Reconciliation of Non-GAAP Measures to GAAP Measures

(in thousands)

(unaudited)

EBITDA and Adjusted EBITDA Reconciliations:

 

Three Months Ended

April 30,

 

Nine Months Ended

April 30,

 

2021

 

2020

 

2021

 

2020

Net loss

$

(27,629)

 

 

$

(6,159)

 

 

$

(33,376)

 

 

$

(4,924)

 

 

 

 

 

 

 

 

 

Interest income

(1)

 

 

(8)

 

 

(21)

 

 

(38)

 

Interest expense

7,764

 

 

8,523

 

 

23,412

 

 

26,425

 

Income tax expense

1,020

 

 

1,485

 

 

2,715

 

 

4,028

 

Depreciation

4,505

 

 

5,866

 

 

15,622

 

 

17,240

 

Amortization of intangible assets

4,182

 

 

6,531

 

 

16,076

 

 

20,719

 

EBITDA

(10,159)

 

 

16,238

 

 

24,428

 

 

63,450

 

 

 

 

 

 

 

 

 

Strategic consulting and other related professional fees

1,019

 

 

 

 

1,184

 

 

 

Executive severance and employee retention

 

 

162

 

 

 

 

534

 

Restructuring and restructuring-related expense

(300)

 

 

2

 

 

918

 

 

924

 

Share-based compensation

97

 

 

209

 

 

443

 

 

581

 

Loss on sale of long-lived assets

39

 

 

7

 

 

79

 

 

45

 

Goodwill impairment charge

25,658

 

 

 

 

25,658

 

 

 

Unrealized foreign exchange losses, net

410

 

 

(1,833)

 

 

5,183

 

 

(1,272)

 

Other non-cash (gains) losses, net

(28)

 

 

(113)

 

 

(38)

 

 

(171)

 

Adjustments related to certain tax liabilities

(264)

 

 

2,022

 

 

2,364

 

 

(2,032)

 

Adjusted EBITDA

$

16,472

 

 

$

16,694

 

 

$

60,219

 

 

$

62,059

 

 

 

 

 

 

 

 

 

Net revenue

$

151,785

 

 

$

177,351

 

 

$

477,766

 

 

$

617,956

 

Adjusted EBITDA margin

10.9

%

 

9.4

%

 

12.6

%

 

10.0

%

Contacts

Investor Relations Contact

Jennifer Golembeske

914-461-1276

[email protected]

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