Highlights
- Second quarter 2017 net revenue of $80.1 million, compared to $83.7 million in the prior year period.
- Second quarter 2017 GAAP operating income of $7.0 million; Non-GAAP operating income of $11.5 million.
- Second quarter 2017 GAAP net earnings of $3.8 million, or $0.24 per diluted share; Non-GAAP net earnings of $7.5 million, or $0.48 per diluted share.
- Board authorized $35 million share repurchase program.
DALLAS, Nov. 11, 2016 (GLOBE NEWSWIRE) -- CSW Industrials, Inc. (NASDAQ: CSWI ), a diversified industrial growth company with well-established, scalable platforms and domain expertise across three segments: Industrial Products; Coatings, Sealants & Adhesives; and Specialty Chemicals, today reported results for the second fiscal quarter ended September 30, 2016.
Sales for the second quarter of 2017 were $80.1 million, compared to the prior year period of $83.7 million. Lower sales in the quarter were primarily attributable to decreased volume in the Coatings, Sealants and Adhesives (CS&A) and Specialty Chemicals business segments, specifically within the rail, energy and mining end markets. This was partially offset by higher volumes in HVAC and architecturally specified building products end markets, as well as incremental revenue from acquisitions completed in the past 12 months.
Net income in the fiscal second quarter of 2017 was $3.8 million, or $0.24 per diluted share, compared to $13.0 million in the prior year. Adjusted to exclude one-time expenses and applying a normalized tax rate, adjusted net income in the second quarter of 2017 was $7.5 million, or $0.48 per diluted share, compared to $8.6 million, or $0.55 per diluted share in the prior year.
Joseph B. Armes, CSW Industrials’ Chief Executive Officer, commented, “Our diversified end market exposure produced mixed operating performance as divergent themes continued to play out within these end markets. We delivered impressive growth for HVAC and architecturally specified building products in our commercial and residential construction end markets, which was most visible in our Industrial Products segment, driving approximately 16% revenue growth year-over-year.”
“Trends in our commodity driven end markets including energy, mining and rail remained under pressure during the quarter. We made substantial progress toward reducing costs within our Specialty Chemicals and CS&A segments through restructuring and optimizing our manufacturing footprint. We are on track to generate the previously announced $5.5 million and $2.5 million savings in our Specialty Chemicals and CS&A Segments for the full run rate in fiscal 2018, respectively. I am particularly encouraged by the $1.4 million of savings in the first half of the fiscal year that we have already seen in the Specialty Chemical Segment from this initiative.” Armes added, “As we move to the second half of fiscal 2017, we expect to benefit from an incremental $1.5 to $2.0 million in cost savings through our Specialty Chemicals initiative as we fully implement efficiency strategies. While market challenges remain, we believe we are taking the appropriate steps regarding both top-line growth opportunities and reducing cost structure to position the Company for profitable long-term growth.”
Second Quarter Results of Operations Industrial Products segment revenue increased 15.7% during the quarter to $41.9 million, compared to the prior year level of $36.2 million. The increase in revenue was the result of higher sales volumes and favorable product mix. Industrial Products segment operating income was $9.9 million, compared to the prior year level of $11.7 million, as the prior year benefited from a one-time pension curtailment gain of $3.2 million that did not recur.
Coatings, Sealants and Adhesives (CS&A) segment revenue decreased to $23.0 million, compared to the prior year level of $28.0 million. Lower sales were mainly attributable to decreased sales volumes in the rail end market, partially offset by increased revenues attributable to acquisitions. Segment operating income (loss) in the second quarter of 2017 was $(1.6) million, compared to a profit of $4.9 million in the prior year. The lower profits were due to one-time restructuring costs incurred to rationalize our manufacturing footprint, asset impairment and negative product mix in the current year coupled with a one-time pension curtailment gain of $1.4 million in the prior year that did not recur.
Specialty Chemicals segment revenue decreased to $15.2 million, compared to the prior year of $19.8 million. Lower sales were attributable to the weakness in the energy, mining and rail end markets, partially offset by increased sales from acquisitions. Segment level operating income in the second quarter of 2017 was $1.2 million, compared to the prior year level of $5.0 million, as a result of lower volume in the current year and a one-time pension curtailment gain of $3.4 million in the prior year that did not recur.
Consolidated gross profit in the second quarter of fiscal 2017 was $35.7 million, a 12.7% decrease compared to the prior year of $40.8 million. Gross margin as a percentage of sales decreased to 44.5%, compared to 48.8% in the prior year period reflecting lost sales leverage in the current year and the recognition of a pension plan curtailment benefit of $2.7 million in the prior year that did not recur. This was partially offset by changes in product mix to higher margin products, and benefits from strategic initiatives to rationalize the Company’s global footprint and achieve cost savings through its procurement program.
Consolidated operating expenses increased to $28.7 million, or 35.8% of sales, compared to the prior year level of $20.1 million, or 24.0% of sales. Increased operating expenses were attributable to the non-recurring restructuring costs and asset impairment in the current year, along with the recognition of a $5.3 million pension plan curtailment benefit in the prior year that did not recur.
Consolidated operating income was $7.0 million, or 8.7% of sales, compared with $20.8 million, or 24.8% of sales, in the prior year. The lower operating income was primarily attributable to the non-recurring restructuring costs and asset impairment in the current year, along with the recognition of an $8.0 million pension plan curtailment benefit in the prior year that did not recur. Adjusted operating income was $11.5 million, or 14.4% of sales, compared with $14.1 million, or 16.8% of sales in the prior-year. Second quarter adjusted operating margin reflects relatively stable segment level operating margin, the inclusion of independent public company costs and investments made to integrate the business units compared to the prior year.
Consolidated net income for the second quarter was $3.8 million, or $0.24 per diluted share, compared with net income of $13.0 million in the prior year period. Adjusted for one-time items and using a normalized tax rate, net income was $7.5 million, or $0.48 per diluted share, compared to net income of $8.6 million in the prior year.
Share Repurchase Program Authorized The Company announced today that its board of directors has authorized a program to repurchase up to $35 million of its common stock over the next two years. These shares may be repurchased from time to time in the open market or in privately negotiated transactions.
Repurchases will be made from time to time at the Company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock and general market conditions. The board of directors has established a two year time limit for the completion of the repurchase program; however, the program may be limited or terminated at any time without notice.
Mr. Armes commented, “With the announcement of the share repurchase program today, we are reiterating our commitment to delivering long-term value to our shareholders. This action by the board of directors reflects our continued commitment to a disciplined capital allocation strategy supported by our confidence in the Company’s ability to deliver strong cash flows. This repurchase program provides another mechanism to deliver returns for our shareholders while maintaining the strength and flexibility of our balance sheet to execute on our capital allocation strategy.”
Conference Call Information The Company will host a conference call today at 10:00 a.m. ET to discuss the results, followed by a question and answer session for the investment community. A live webcast of the call can be accessed at ir.cswindustrials.com . To access the call, participants may dial toll-free at 1-877-407-0784 or 1-201-689-8560 (international) and request to join the CSW Industrials earnings call.
To listen to a telephonic replay of the conference call, dial toll-free 1-877-870-5176 or 1-858-384-5517 (international) and enter confirmation code 13648713. The telephonic replay will be available beginning at 1:00 p.m. ET on Friday, November 11, 2016, and will last through 11:59 p.m. ET on Friday, November 25, 2016. The call will also be available for replay via the webcast link on CSW Industrials’ Investor Relations website.
Safe Harbor Statement This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations and financial performance and condition.
The forward-looking statements included in this press release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.
All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.
Non-GAAP Financial Measures This press release includes an analysis of adjusted earnings per share, adjusted net income, adjusted gross profit, adjusted operating expenses and adjusted operating income, which are non-GAAP financial measures of performance. For a reconciliation of these measures to the most directly comparable GAAP measures and for a discussion of why we consider these Non-GAAP measures useful, see the “Reconciliation of Non-GAAP Measures” section of this release.
About CSW Industrials CSWI is a diversified industrial growth company with well-established, scalable platforms and domain expertise across three segments: Industrial Products; Coatings, Sealants & Adhesives; and Specialty Chemicals. CSWI's broad portfolio of leading products provides performance optimizing solutions to its customers. CSWI's products include mechanical products for heating, ventilation and air conditioning ("HVAC") and refrigeration applications, coatings and sealants and high performance specialty lubricants. Markets that CSWI serves include: HVAC, industrial, rail, plumbing, architecturally-specified building products, energy, mining and general industrial markets.
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Revenues, net | $ | 80,131 | $ | 83,744 | $ | 164,238 | $ | 172,654 | ||||||||||
| Cost of revenues | (44,468 | ) | (42,901 | ) | (90,372 | ) | (91,367 | ) | ||||||||||
| Gross profit | 35,663 | 40,843 | 73,866 | 81,287 | ||||||||||||||
| Selling, general and administrative expenses | (25,894 | ) | (20,065 | ) | (55,605 | ) | (46,221 | ) | ||||||||||
| Impairment expenses | (2,800 | ) | - | (3,883 | ) | - | ||||||||||||
| Operating income | 6,969 | 20,778 | 14,378 | 35,066 | ||||||||||||||
| Interest expense, net | (742 | ) | (832 | ) | (1,490 | ) | (1,499 | ) | ||||||||||
| Other income (expense), net | 753 | (113 | ) | 1,291 | (178 | ) | ||||||||||||
| Income before income taxes | 6,980 | 19,833 | 14,179 | 33,389 | ||||||||||||||
| Provision for income taxes | (3,138 | ) | (6,871 | ) | (6,242 | ) | (11,777 | ) | ||||||||||
| Net income | $ | 3,842 | $ | 12,962 | $ | 7,937 | $ | 21,612 | ||||||||||
| Net earnings per common share: | ||||||||||||||||||
| Basic | $ | 0.24 | $ | 0.83 | $ | 0.51 | $ | 1.39 | ||||||||||
| Diluted | 0.24 | 0.83 | 0.50 | 1.38 | ||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (unaudited) | ||||||||||
| September 30, | March 31, | |||||||||
| 2016 | 2016 | |||||||||
| (in thousands, except per share amounts) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 24,624 | $ | 25,987 | ||||||
| Bank time deposits | 10,373 | 13,278 | ||||||||
| Accounts receivable, net of allowance of $1,168 and $1,208, respectively | 58,295 | 52,637 | ||||||||
| Inventories, net | 49,414 | 51,634 | ||||||||
| Prepaid expenses and other current assets | 12,498 | 11,985 | ||||||||
| Total current assets | 155,204 | 155,521 | ||||||||
| Property, plant and equipment, net of accumulated depreciation of $61,179 | ||||||||||
| and $59,035, respectively | 63,524 | 64,357 | ||||||||
| Goodwill | 67,375 | 67,757 | ||||||||
| Intangible assets, net | 82,386 | 88,727 | ||||||||
| Other assets | 15,888 | 15,898 | ||||||||
| Total assets | $ | 384,377 | $ | 392,260 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 10,203 | $ | 9,912 | ||||||
| Accrued and other current liabilities | 20,258 | 21,090 | ||||||||
| Current portion of long-term debt | 561 | 561 | ||||||||
| Total current liabilities | 31,022 | 31,563 | ||||||||
| Long-term debt | 71,841 | 89,121 | ||||||||
| Retirement benefits payable | 1,505 | 1,746 | ||||||||
| Other long-term liabilities | 13,634 | 11,820 | ||||||||
| Total liabilities | 118,002 | 134,250 | ||||||||
| Equity: | ||||||||||
| Common shares, $0.01 par value | 156 | 156 | ||||||||
| Shares authorized – 50,000 | ||||||||||
| Shares issued – 15,712 and 15,659, respectively | ||||||||||
| Preferred shares, $0.01 par value | - | - | ||||||||
| Shares authorized – 10,000 | ||||||||||
| Shares issued – 0 | ||||||||||
| Additional paid-in capital | 34,585 | 31,597 | ||||||||
| Treasury shares, at cost | (569 | ) | - | |||||||
| Retained earnings | 241,892 | 233,955 | ||||||||
| Accumulated other comprehensive loss | (9,689 | ) | (7,698 | ) | ||||||
| Total equity | 266,375 | 258,010 | ||||||||
| Total liabilities and equity | $ | 384,377 | $ | 392,260 | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (unaudited) | |||||||||
| Six Months Ended | |||||||||
| September 30, | |||||||||
| 2016 | 2015 | ||||||||
| (in thousands) | |||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 7,937 | $ | 21,612 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation | 4,208 | 3,256 | |||||||
| Amortization of intangible and other assets | 3,818 | 3,293 | |||||||
| Provision for inventory reserves | 1,083 | - | |||||||
| Share-based and other executive compensation | 2,988 | - | |||||||
| Net loss (gain) on sales of property, plant and equipment | (320 | ) | (203 | ) | |||||
| Pension plan curtailment benefit | - | (8,020 | ) | ||||||
| Net pension (benefit) expense | (542 | ) | - | ||||||
| Impairment of assets | 3,883 | - | |||||||
| Net deferred taxes | (1,001 | ) | 8,027 | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable, net | (5,488 | ) | (1,178 | ) | |||||
| Inventories | 1,056 | 477 | |||||||
| Prepaid expenses and other current assets | (718 | ) | (6,334 | ) | |||||
| Other assets | 36 | 258 | |||||||
| Accounts payable and other current liabilities | (887 | ) | 393 | ||||||
| Retirement benefits payable and other liabilities | 2,918 | 14 | |||||||
| Net cash provided by operating activities | 18,971 | 21,595 | |||||||
| Cash flows from investing activities: | |||||||||
| Capital expenditures | (5,075 | ) | (3,192 | ) | |||||
| Proceeds from sale of assets | 389 | 71 | |||||||
| Net change in bank time deposits | 2,681 | 4,440 | |||||||
| Cash paid for acquisitions | - | (68,849 | ) | ||||||
| Net cash used in investing activities | (2,005 | ) | (67,530 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Borrowings on lines of credit | - | 70,000 | |||||||
| Repayments of lines of credit | (17,281 | ) | (2,531 | ) | |||||
| Purchase of treasury shares | (569 | ) | - | ||||||
| Cash contribution from Capital Southwest | - | 13,000 | |||||||
| Dividends paid to Capital Southwest | - | (300 | ) | ||||||
| Net cash provided by (used in) financing activities | (17,850 | ) | 80,169 | ||||||
| Effect of exchange rate changes on cash and equivalents | (479 | ) | (737 | ) | |||||
| Net change in cash and cash equivalents | (1,363 | ) | 33,497 | ||||||
| Cash and cash equivalents, beginning of period | 25,987 | 20,448 | |||||||
| Cash and cash equivalents, end of period | $ | 24,624 | $ | 53,945 | |||||
Reconciliation of Non-GAAP Measures
| Reconciliation of Operating Income to Adjusted Operating Income | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| (in thousands) | For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| GAAP Operating Income | $ | 6,969 | $ | 20,778 | $ | 14,378 | $ | 35,066 | |||||||||
| Adjusting items: | |||||||||||||||||
| Pension gain | - | (8,020 | ) | - | (8,020 | ) | |||||||||||
| Restructuring & severance | 673 | - | 1,142 | - | |||||||||||||
| Asset Impairment | 2,800 | - | 3,882 | - | |||||||||||||
| Estimated reserve for excess inventory | 719 | 719 | |||||||||||||||
| Strathmore transaction costs | - | 429 | - | 2,678 | |||||||||||||
| Spin related costs | - | 901 | - | 901 | |||||||||||||
| Consulting projects | 318 | - | 912 | - | |||||||||||||
| CFO Transition | 31 | - | 2,872 | - | |||||||||||||
| Adjusted Operating Income | $ | 11,510 | $ | 14,088 | $ | 23,905 | $ | 30,625 | |||||||||
| Reconciliation of Net Income to Adjusted Net Income | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| (in thousands, except share data) | For the Three Months Ended September 30, | For the Six Months Ended September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| GAAP Net Income | $ | 3,842 | $ | 12,962 | $ | 7,937 | $ | 21,612 | ||||||||
| Adjusting items, net of tax: | ||||||||||||||||
| Pension gain | - | (5,213 | ) | - | (5,213 | ) | ||||||||||
| Restructuring & severance | 435 | - | 742 | - | ||||||||||||
| Asset Impairment | 1,812 | - | 2,602 | - | ||||||||||||
| Estimated reserve for excess inventory | 465 | - | 467 | - | ||||||||||||
| Strathmore transaction costs | - | 278 | - | 1,733 | ||||||||||||
| Spin related costs | - | 583 | - | 583 | ||||||||||||
| Consulting projects | 206 | - | 593 | - | ||||||||||||
| CFO Transition | 20 | - | 1,867 | - | ||||||||||||
| Discrete Tax Provisions | 736 | - | 1,348 | - | ||||||||||||
| Adjusted Net Income | $ | 7,516 | $ | 8,610 | $ | 15,556 | $ | 18,715 | ||||||||
| GAAP Diluted income per common share | $ | 0.24 | $ | 0.83 | $ | 0.50 | $ | 1.38 | ||||||||
| Adjusting items, per diluted common share: | ||||||||||||||||
| Pension gain | - | (0.34 | ) | - | (0.34 | ) | ||||||||||
| Restructuring & severance | 0.03 | - | 0.05 | - | ||||||||||||
| Asset Impairment | 0.12 | - | 0.16 | - | ||||||||||||
| Estimated reserve for excess inventory | 0.03 | - | 0.03 | - | ||||||||||||
| Strathmore transaction costs | - | 0.02 | - | 0.11 | ||||||||||||
| Spin related costs | - | 0.04 | - | 0.04 | ||||||||||||
| Consulting projects | 0.01 | - | 0.04 | - | ||||||||||||
| CFO Transition | - | - | 0.12 | - | ||||||||||||
| Discrete Tax Provisions | 0.05 | - | 0.09 | - | ||||||||||||
| Adjusted earnings per diluted common share | $ | 0.48 | $ | 0.55 | $ | 0.99 | $ | 1.19 | ||||||||
| Weighted-average shares outstanding (in thousands) | ||||||||||||||||
| Diluted | 15,763 | 15,711 | 15,771 | 15,711 | ||||||||||||
| Reconciliation of Segment Operating Income to Adjusted Segment Operating Income | ||||||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | For the Three Months Ended September 30, 2016 | For the Three Months Ended September 30, 2015 | ||||||||||||||||||||||||||||||||||||||||
| Industrial Products | Coatings, Sealants & Adhesives | Specialty Chemicals | Corporate and Other | Consolidated | Industrial Products | Coatings, Sealants & Adhesives | Specialty Chemicals | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||
| Revenue | $ | 41,858 | $ | 23,006 | $ | 15,245 | $ | 22 | $ | 80,131 | $ | 36,186 | $ | 27,971 | $ | 19,771 | $ | (184 | ) | $ | 83,744 | |||||||||||||||||||||
| Operating Income | $ | 9,897 | $ | (1,616 | ) | $ | 1,232 | $ | (2,544 | ) | $ | 6,969 | $ | 11,668 | $ | 4,938 | $ | 4,961 | $ | (789 | ) | $ | 20,778 | |||||||||||||||||||
| Adjusting items: | ||||||||||||||||||||||||||||||||||||||||||
| Pension gain | - | - | - | - | - | (3,179 | ) | (1,418 | ) | (3,423 | ) | - | (8,020 | ) | ||||||||||||||||||||||||||||
| Restructuring & severance | - | 673 | - | - | 673 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Asset Impairment | - | 2,800 | - | - | 2,800 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Estimated reserve for excess inventory | 17 | 279 | 423 | - | 719 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Strathmore transaction costs | - | - | - | - | - | - | 429 | - | - | 429 | ||||||||||||||||||||||||||||||||
| Spin related costs | - | - | - | - | - | - | - | - | 901 | 901 | ||||||||||||||||||||||||||||||||
| Consulting projects | 23 | 24 | 14 | 257 | 318 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| CFO Transition | - | - | - | 31 | 31 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | 9,937 | $ | 2,160 | $ | 1,669 | $ | (2,256 | ) | $ | 11,510 | $ | 8,489 | $ | 3,949 | $ | 1,538 | $ | 112 | $ | 14,088 | |||||||||||||||||||||
| % of revenue | 23.7 | % | 9.4 | % | 10.9 | % | 14.4 | % | 23.5 | % | 14.1 | % | 7.8 | % | 16.8 | % | ||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | For the Six Months Ended September 30, 2016 | For the Six Months Ended September 30, 2015 | ||||||||||||||||||||||||||||||||||||||||
| Industrial Products | Coatings, Sealants & Adhesives | Specialty Chemicals | Corporate and Other | Consolidated | Industrial Products | Coatings, Sealants & Adhesives | Specialty Chemicals | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||
| Revenue | $ | 85,333 | $ | 46,371 | $ | 32,490 | $ | 44 | $ | 164,238 | $ | 76,162 | $ | 56,420 | $ | 39,934 | $ | 138 | $ | 172,654 | ||||||||||||||||||||||
| Operating Income | $ | 20,504 | $ | 97 | $ | 2,288 | $ | (8,511 | ) | $ | 14,378 | $ | 21,358 | $ | 6,778 | $ | 7,691 | $ | (761 | ) | $ | 35,066 | ||||||||||||||||||||
| Adjusting items: | ||||||||||||||||||||||||||||||||||||||||||
| Pension gain | - | - | - | - | - | (3,179 | ) | (1,418 | ) | (3,423 | ) | - | (8,020 | ) | ||||||||||||||||||||||||||||
| Restructuring & severance | - | 1,142 | - | - | 1,142 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Asset Impairment | 90 | 3,187 | 605 | - | 3,882 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Estimated reserve for excess inventory | 17 | 279 | 423 | - | 719 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Strathmore transaction costs | - | - | - | - | - | - | 2,678 | - | - | 2,678 | ||||||||||||||||||||||||||||||||
| Spin related costs | - | - | - | - | - | - | - | - | 901 | 901 | ||||||||||||||||||||||||||||||||
| Consulting projects | 84 | 145 | 82 | 601 | 912 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| CFO Transition | - | - | - | 2,872 | 2,872 | - | - | - | - | - | ||||||||||||||||||||||||||||||||
| Adjusted Operating Income | $ | 20,695 | $ | 4,850 | $ | 3,398 | $ | (5,038 | ) | $ | 23,905 | $ | 18,179 | $ | 8,038 | $ | 4,268 | $ | 140 | $ | 30,625 | |||||||||||||||||||||
| % of revenue | 24.3 | % | 10.5 | % | 10.5 | % | 14.6 | % | 23.9 | % | 14.2 | % | 10.7 | % | 17.7 | % | ||||||||||||||||||||||||||
We use adjusted earnings per share, adjusted net income and adjusted operating income, together with financial measures prepared in accordance with GAAP, such as revenue, income from operations, operating expense, operating income and net income, to asses our historical and prospective operating performance and to enhance our understanding of our core operating performance. We also believe these measures are useful for investors to assess the operating performance of our business without the effect of non-operating items.
Investor contact: Michael Callahan, ICR (203) 682-8311 Michael.Callahan@icrinc.com
