GREENVILLE, Wis., Aug. 07, 2018 (GLOBE NEWSWIRE) -- School Specialty, Inc. (OTCQB: SCOO) (“School Specialty”, “SSI”
or “the Company”), home of the 21st Century Safe School™ and leading provider of products and innovative
solutions that support integrated learning environments for improved student social, emotional, mental and
physical well-being, today announced financial results for its fiscal 2018 second quarter ended June 30, 2018.
Joseph M. Yorio, President and Chief Executive Officer, stated, “The first half of 2018 is very encouraging as the sales
momentum we are experiencing is the strongest we have seen in the last several years. Importantly, the momentum is strong across
our broad Supplies category, all aspects of our Furniture business and in strategic areas of focus such as our relationship with
Amazon and in Safety & Security. This being said, much of the benefit of executing the team-sell model and effectively engaging the
market with our 21st Century Safe School value proposition is still in front of us. In 2018, we deployed strategies to more
effectively price key elements of our offering and ensure we maintain leadership positions on key strategic purchasing agreements.
These efforts have coincided with initiatives to drive growth in higher margin elements of our offering. The strategies we are
deploying are clearly beginning to enable market penetration which will pave the way to bring a more comprehensive set of solutions
to our customers. Now we need to execute on those opportunities to better balance our mix and strengthen margins. We continue to
manage our cost structure effectively and see opportunity for SG&A favorability in the second half of the year. This should
enable us to offset near-term margin pressure and cost pressures in transportation and wages, and still deliver bottom-line growth
in 2018.”
Q2 Results (for the three months ended June 30, 2018 and July 1, 2017)
In the first quarter of fiscal 2018, the Company adopted a new accounting principle (“ASC 606”) which addressed the timing of
both revenue recognition and catalog costs. While the Company expects the full year impact of ASC 606 to be minimal as it relates
to the Company’s revenues, gross profit, SG&A, and Adjusted EBITDA, the year-over-year comparability between quarters is
impacted, particularly for the Company’s catalog expenses included in SG&A. As ASC 606 requires catalog costs to be expensed as
incurred instead of amortized over the related sales period (~1 year), it will result in an acceleration of catalog costs in the
Company’s first and fourth quarters, with offsetting decreases in the Company’s second and third quarters.
• Revenues of $169.3 million for the second quarter of fiscal 2018 increased by $9.1 million or 5.7%, as compared to the second
quarter of fiscal 2017. The adoption of ASC 606 contributed $4.7 million of the incremental revenue, primarily within the Company’s
Distribution segment. Distribution segment revenues of $155.8 million increased by 10.2% or $14.4 million. Revenues from Triumph
Learning, acquired in the third quarter of fiscal 2017 and reported in the Company’s Instruction & Intervention product category,
contributed $4.1 million of incremental revenues in the second quarter of fiscal 2018. After adjusting for the impact of revenues
from Triumph Learning, Distribution segment revenues were up in the second quarter by $10.3 million compared to the prior year
period.
- Revenues from the Supplies product category increased approximately $3.5 million or 4.5%, in the quarter. Incoming orders in
the quarter continued to be strong, up over 11.0% as compared to second quarter orders in 2017.
- Revenues in the Furniture product category were up 22.4% or $9.6 million, compared to last year’s second quarter. While the
adoption of ASC 606 contributed $5.4 million of this increase, incoming orders remained strong in the quarter, up over 16.0% as
compared to last year’s second quarter.
- Agendas revenues were $4.6 million in the second quarter of fiscal 2018, down $1.9 million from last year’s second quarter.
AV Tech revenues were $4.1 million in the second quarter of fiscal 2018, down $0.4 million from last year’s second quarter. The
revenue performances of both the Agendas and AV Tech categories were modestly below the Company’s expectations.
- Instruction & Intervention product category revenues of $14.3 million in the second quarter of fiscal 2018 were up $4.1
million as compared to last year’s second quarter.
- Curriculum segment revenues of $13.5 million decreased by 28.3% or $5.3 million. The decline was primarily related to three
large school district orders, totaling $4.4 million, which shipped in last year’s second quarter. With limited state science
adoption-related opportunities in 2018, the Company expected declines in segment revenues in fiscal 2018. However, based on the
current pipeline of state adoption and significant opportunities in open territory states, the Company anticipates segment growth
resuming in 2019 as adoption-related opportunities are expected to increase.
• Overall gross profit margin was 34.7% for the three months ended June 30, 2018, as compared to 37.8% for the three months
ended July 1, 2017, a decline of 310 basis points.
- Distribution segment gross margin was 32.6% for the three months ended June 30, 2018, as compared to 35.7% for the three
months ended July 1, 2017. Rate variances at a product level negatively impacted gross margins by 250 basis points in the current
year’s second quarter. These negative rates are related to certain state, regional and district-level pricing agreements, which
became effective at various points in 2017. In addition, the strategic move to more competitive pricing on highly shopped items
is a contributing factor for the decline. Higher product development amortization in the current year’s second quarter
contributed approximately 20 basis points of lower gross margin. The remaining decline in gross margin was associated with a
shift in product mix.
- Curriculum segment gross margin was 58.8% for the three months ended June 30, 2018, as compared to 53.4% for the three months
ended July 1, 2017. Incremental training revenue in the current year’s second quarter contributed approximately 150 basis points
of the improvement, while favorable lower product costs in the current year contributed approximately 360 basis points of gross
margin improvement. Lower product development amortization in the current year’s second quarter contributed 30 basis points of
the gross margin increase.
• Selling, General & Administrative (“SG&A”) expenses were $53.8 million as compared to $51.7 million, an increase of $2.1
million or 4.0%. The increase in SG&A is primarily related to the Triumph Learning acquisition, and incremental depreciation
and amortization. The acquisition of Triumph Learning resulted in approximately $2.9 million of incremental SG&A costs in the
second quarter of 2018 versus last year’s second quarter. Approximately $0.3 million of the costs associated with Triumph Learning
were related directly to the integration through the finalization of quarter one 2018 estimates. Transportation costs increased by
$1.9 million due to a combination of incremental volume and increased effective transportation rates. Depreciation and amortization
expense increased by $0.8 million in the current year second quarter related primarily to incremental depreciation associated with
the Company’s implementation of its new e-commerce platform. These increases were partially offset by a combination of $2.0 million
of lower catalog expense associated with the adoption of ASC 606, reductions in marketing and selling costs, and lower incentive
compensation expenses in the quarter. As a percent of revenue, SG&A decreased from 32.3% for the three months ended July 1,
2017 to 31.8% for the three months ended June 30, 2018.
• The Company reported operating income of $4.8 million in the second quarter of fiscal 2018, as compared to operating income of
$8.7 million in the second quarter of fiscal 2017.
• Interest expense of $3.7 million was down $0.5 million in the second quarter of 2018, which was primarily related to a
reduction in non-cash interest of $0.9 million. This decline in non-cash interest was due to lower interest attributable to the
Company’s vendor note obligations. The decrease in non-cash interest expense was partially offset by $0.4 million of incremental
cash interest associated with an increase in average borrowings in the current quarter. The increase in average borrowings is
related to the acquisition of Triumph Learning in the third quarter of fiscal 2017.
• The provision for income taxes was $1.1 million for the three months ended June 30, 2018, as compared to $0.1 million for the
three months ended July 1, 2017. The effective income tax rate for the three months ended June 30, 2018 and the three months ended
July 1, 2017 was 98.3% and 42.1%, respectively. Due to the minimal amount of income before provision of income taxes in both
periods, the Company believes that the effective income tax rate is not representative of the full year expected rate as discrete
tax items, such as realized built-in loss and foreign tax adjustments, in the quarter have a large impact on the quarterly
rate.
• Net income was below $0.1 million for the three months ended June 30, 2018, as compared to net income of $0.1 million in
the comparable year-ago period. The prior year net loss included a loss of $4.3 million related to the early extinguishment of debt
associated with its debt refinancing.
• The Company reported adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of $11.5
million in the second quarter of fiscal 2018, as compared to Adjusted EBITDA of $14.6 million in the comparable 2017 period.
The adoption of ASC 606 positively impacted Adjusted EBITDA in the second quarter of 2018 by $2.6 million, due primarily to the
timing change associated with the recognition of catalog costs.
YTD Results (for the six months ended June 30, 2018 and July 1, 2017)
• Revenue of $268.6 million for the six months ended June 30, 2018 increased by $11.3 million or 4.4%, as compared to the
six months ended July 1, 2017. The adoption of ASC 606 contributed $5.9 million of the incremental revenue, primarily within the
Company’s Distribution segment. Distribution segment revenues of $250.4 million for the six months ended June 30, 2018 increased by
7.3% or $17.1 million, from the six months ended July 1, 2017. Revenues from the Triumph Learning products, acquired in the third
quarter of fiscal 2017 and which are reported in our Instruction & Intervention product category, contributed $11.1 million of
incremental revenues in the first six months of fiscal 2018. After adjusting for the impact of revenues from Triumph Learning,
Distribution segment revenues were up in the first six months of 2018 by $6.0 million.
- While the revenues for the Supplies product category declined $1.3 million during the six months ended June 30, 2018, open
orders for the Supplies category entering the third quarter are up year-over-year by $2.7 million. In addition, incoming orders
have continued to gain momentum into the third quarter of 2018. Third quarter incoming orders are up year-over-year by 7.8%,
resulting in a 4.9% increase in year-to-date orders.
- Year-to-date revenues in Furniture were up 16.7% or $10.9 million, compared to 2017. The adoption of ASC 606 drove $5.9
million of this increase year-over-year, although the full-year impact of the adoption of ASC 606 is expected to be minimal. The
incoming order rate for Furniture products remains strong and year-to-date orders were up 12.8% through the end of the second
quarter, and third quarter-to-date Furniture orders have been up 21.4% year-over-year.
- Adjusting the Instruction & Intervention category to exclude the incremental revenue associated with the Triumph Learning
products, the category was down 4.0% or $0.7 million. However, order trends have continued to improve as the year
progresses, especially in core proprietary products such as Wordly Wise and Spire, which are up nearly 4.0%
year-to-date.
- The Company’s Agendas and AV Tech categories were down $1.9 million and $0.9 million, respectively, through the first six
months of fiscal 2018. Both the AV Tech and Agenda categories are performing modestly below expectations.
- Curriculum segment revenues of $18.2 million for the six months ended June 30, 2018 decreased by 24.3% or $5.8 million, from
the six months ended July 1, 2017. The limited amount of adoption activity in 2018 and fewer large opportunities in open
territory states are contributing to the decline. However, the competitive positioning remains strong and the pipeline of
opportunities for 2019 is building.
• Gross profit margin for the six months ended June 30, 2018 was 35.3%, as compared to 36.9% for the six months ended July
1, 2017. Increased revenues contributed $4.6 million of additional gross profit offset by lower product level gross margins and
higher product development amortization.
- Distribution segment gross margin was 33.8% for the six months ended June 30, 2018, as compared to 35.3% for the six months
ended July 1, 2017. Year-over-year product rate variances had a negative impact on gross margin of 170 basis points, which was
partially offset by a shift in product mix, primarily related to the Triumph Learning products. A shift in product mix
contributed approximately 50 basis points of gross margin improvement in the first six months of fiscal 2018. Higher product
development amortization in the current year’s second quarter resulted in 30 basis points of lower gross margin. More aggressive
pricing in certain large state, regional and district-level pricing agreements, which became effective at various points in 2017
resulted in approximately $3.0 million of the decline. In addition, the strategic move to more competitive pricing on commodity
items also is a contributing factor the decline. However, these pricing actions have driven growth and customer penetration in
fiscal 2018. The Company expects the year-over-year variance in gross margin associated with certain pricing agreements will
stabilize in upcoming quarters.
- Curriculum segment gross margin was 55.7% for the six months ended June 30, 2018, as compared to 52.6% for the six months
ended July 1, 2017. Lower product development amortization in the current first half of the year contributed 90 basis points of
the gross margin increase. The adoption of ASC 606 contributed approximately 120 basis points of the gross margin increase in the
first six months of fiscal 2018 due to the increase in training revenues in the first half of 2018 as compared to the fiscal half
of 2017. The remaining difference in gross margin is related to a combination of year-over-year changes in product costs.
• Selling, General & Administrative (“SG&A”) expenses were $110.9 million as compared to $99.2 million, an increase of
$11.7 million in the first six months of fiscal 2018. The increase was attributable to several areas: $7.2 million of
incremental SG&A associated with the Triumph Learning acquisition of which $1.7 million was related to the integration; $2.5
million related to the impact of the change in accounting principles associated with ASC 606 on our catalog expense; and $2.9
million of incremental depreciation and amortization associated with the Company’s new phone system and new e-commerce platform
implementations. The impact of ASC 606 on the Company’s catalog expenses affects the quarterly timing of the expense but does not
affect the overall annual expense. Remaining SG&A costs were down approximately $0.9 million when comparing the first six
months of 2018 and first six months of 2017. SG&A expenses as a percent of revenue increased to 41.3% from 38.6% for the
six-month period.
• The Company reported an operating loss of $16.6 million in the first half of fiscal 2018 as compared to an operating loss
of $4.4 million in the first half of fiscal 2017.
• Interest expense of $7.2 million was down $1.1 million the first half of 2018, which was primarily related to a reduction
of approximately $1.0 million in non-cash interest primarily due to lower interest attributable to the Company’s vendor note
obligations in 2018 as compared to 2017. Cash interest expense was essentially flat in the first six months of 2018 as compared to
the first six months of 2017.
• The benefit from income taxes was $5.1 million for the six months ended June 30, 2018, as compared to $0.3 million for
the six months ended July 1, 2017. The effective income tax rate for the six months ended June 30, 2018 and the six months ended
July 1, 2017 was 21.5% and 1.7%, respectively. The change in the effective income tax rate year-over-year is due to a combination
of lower tax rates associated with the 2017 tax reform as well as the partial reversal of valuation allowances in the fourth
quarter of fiscal 2017. The tax benefit recorded in the six months ended June 30, 2018 is expected to be entirely offset by tax
provisions recognized against net income expected to be generated over the remainder of fiscal 2018.
• Net loss was approximately $18.7 million for the first half of 2018, as compared to a net loss of $16.6 million in the
comparable year-ago period. The prior year net loss included a loss of $4.3 million related to the early extinguishment of debt
associated with the Company’s debt refinancing.
• The Company reported an adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) loss
of $0.5 million in the first half of fiscal 2018, as compared to Adjusted EBITDA of $7.6 million in the comparable 2017 period. The
adoption of ASC 606 positively impacted Adjusted EBITDA in the first half of 2018 by $1.5 million, due primarily to the
acceleration of catalog costs.
Mr. Yorio continued, “Our objective is to re-invent School Specialty in the eyes of our customers, shareholders and employees.
There is tangible progress in all areas, but we are going to accelerate the pace of change. We are uniquely positioned to be the
market leading provider of 21st Century Safe School solutions. I’m confident that we will deliver a strong second half
of 2018, which will enable us to achieve revenue growth at or above the high-end of our original guidance and modest Adjusted
EBITDA growth of approximately 4.0%.”
Additional information on the Company’s updated outlook for 2018 can be found in the investor presentation on page 17, which will
be published shortly under the Investor Relations section of the Company’s website.
School Specialty will be hosting a teleconference and webcast on Wednesday, August 8, 2018 at 9:00 a.m. ET to discuss its
results and outlook. Speaking from management will be Joseph M. Yorio, President and Chief Executive Officer; Ryan M. Bohr,
Executive Vice President and Chief Operating Officer; and Kevin Baehler, Executive Vice President and Chief Financial Officer.
Conference Call Information:
- Toll-free number: 844-882-7832 / International number: 574-990-9706 / Conference
ID: 8274535
- Replay number: 855-859-2056 / International replay number: 404-537-3406 /
Conference ID: 8274535
Interested parties can also participate on the webcast by visiting the Investor Relations section of School Specialty’s website
at http://investors.schoolspecialty.com. For those who are unable to participate on the live
conference call and webcast, a replay will be available approximately one hour after the completion of the call.
About School Specialty, Inc.
School Specialty designs, develops and delivers a broad assortment of innovative and proprietary products, programs and services to
the education marketplace, including essential classroom supplies, furniture, educational technology, supplemental learning
resources, science-based curriculum, and evidence-based safety and security training. The Company applies its unmatched
team of subject-matter experts and customized planning, development and project management tools to deliver this comprehensive
offering as the 21st Century Safe School™, a concept built around
best-practice school environments that support the social, emotional, mental, and physical safety of students –
improving both their learning outcomes and school district performance.
For more information, visit https://corporate.schoolspecialty.com/ or connect with us on Facebook, Twitter, Instagram,
and Pinterest. Find ideas, resources and inspiration by visiting our blog: https://blog.schoolspecialty.com/.
Statement Concerning Forward-Looking Information
Any statements made in this press release about School Specialty’s future financial condition, results of operations, expectations,
plans, or prospects constitute forward-looking statements. Forward-looking statements also include those preceded or followed by
the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," “projects,” “should,” "targets"
and/or similar expressions. These forward-looking statements are based on School Specialty's current estimates and assumptions and,
as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may
differ materially from those contemplated by the forward-looking statements because of a number of factors, including the risk
factors described in Item 1A of School Specialty's Form 10-K for the fiscal year ended December 30, 2017, which risk factors are
incorporated herein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made.
Except to the extent required under the federal securities laws, School Specialty does not intend to update or revise the
forward-looking statements.
Non-GAAP Financial Information
This press release includes references to Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA represents net income
(loss) adjusted for: provision for (benefit from) income taxes; purchase accounting deferred revenue adjustments; restructuring
costs; restructuring-related costs included in SG&A; loss on early extinguishment of debt; depreciation and amortization
expense; amortization of development costs; net interest expense; and stock-based compensation.
The Company considers Adjusted EBITDA a relevant supplemental measure of its financial performance. The Company believes this
non-GAAP financial measure provides useful supplemental information for investors regarding trends and performance of our ongoing
operations and is useful for year-over-year comparisons of such results. We also use this non-GAAP financial measure in making
operational and financial decisions and in establishing operational goals.
In summary, we believe that providing this non-GAAP financial measure to investors, as a supplement to GAAP financial measures,
helps investors to (i) evaluate our operating and financial performance and future prospects, (ii) compare financial results across
accounting periods, (iii) better understand the long-term performance of our core business, and (iv) evaluate trends in our
business, all consistent with how management evaluates such performance and trends.
Adjusted EBITDA does not represent, and should not be considered, an alternative to net income or operating income as determined
by GAAP, and our calculation may not be comparable to similarly titled measures reported by other companies.
Tables to Follow
|
SCHOOL SPECIALTY, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
(In Thousands, Except Share and Per Share
Amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018 |
|
December 30,
2017 |
|
July 1,
2017 |
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8,640 |
|
|
$ |
31,861 |
|
|
$ |
6,900 |
|
|
Accounts receivable, less allowance for doubtful accounts |
|
|
90,470 |
|
|
|
69,297 |
|
|
|
87,461 |
|
|
Inventories, net |
|
|
131,761 |
|
|
|
77,162 |
|
|
|
124,906 |
|
|
Deferred catalog costs |
|
|
- |
|
|
|
3,450 |
|
|
|
6,762 |
|
|
Prepaid expenses and other current assets |
|
|
21,154 |
|
|
|
14,121 |
|
|
|
11,145 |
|
|
Refundable income taxes |
|
|
2,115 |
|
|
|
547 |
|
|
|
1,325 |
|
|
|
Total current assets |
|
|
254,140 |
|
|
|
196,438 |
|
|
|
238,499 |
|
Property, plant and equipment, net |
|
|
32,063 |
|
|
|
33,579 |
|
|
|
32,180 |
|
Goodwill |
|
|
26,842 |
|
|
|
26,842 |
|
|
|
21,588 |
|
Intangible assets, net |
|
|
35,184 |
|
|
|
37,163 |
|
|
|
33,247 |
|
Development costs and other |
|
|
16,192 |
|
|
|
16,339 |
|
|
|
12,600 |
|
Deferred taxes long-term |
|
8,347 |
|
|
|
2,046 |
|
|
|
193 |
|
|
|
Total assets |
|
$ |
372,768 |
|
|
$ |
312,407 |
|
|
$ |
338,307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Current maturities - long-term debt |
|
$ |
64,600 |
|
|
$ |
10,989 |
|
|
$ |
46,882 |
|
|
Accounts payable |
|
|
61,894 |
|
|
|
26,591 |
|
|
|
59,125 |
|
|
Accrued compensation |
|
|
8,209 |
|
|
|
11,995 |
|
|
|
9,173 |
|
|
Contract liabilities |
|
|
5,804 |
|
|
|
3,454 |
|
|
|
2,808 |
|
|
Accrued royalties |
|
1,998 |
|
|
|
5,699 |
|
|
|
- |
|
|
Other accrued liabilities |
|
|
12,265 |
|
|
|
15,442 |
|
|
|
12,547 |
|
|
|
Total current liabilities |
|
|
154,770 |
|
|
|
74,170 |
|
|
|
130,535 |
|
Long-term debt - less current maturities |
|
|
130,437 |
|
|
|
130,574 |
|
|
|
124,849 |
|
Other liabilities |
|
|
792 |
|
|
|
172 |
|
|
|
169 |
|
|
|
Total liabilities |
|
|
285,999 |
|
|
|
204,916 |
|
|
|
255,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
Preferred stock, $0.001 par value per share,
500,000 |
|
|
|
|
|
|
|
|
shares authorized; none outstanding |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Common stock, $0.001 par value per share, 50,000,000
shares |
|
|
|
|
|
|
|
|
authorized; 7,000,000 shares outstanding |
|
|
7 |
|
|
|
7 |
|
|
|
7 |
|
|
Capital in excess of par value |
|
|
124,149 |
|
|
|
123,083 |
|
|
|
121,940 |
|
|
Accumulated other comprehensive loss |
|
|
(1,832 |
) |
|
|
(1,425 |
) |
|
|
(1,600 |
) |
|
Retained earnings (accumulated deficit) |
|
|
(35,555 |
) |
|
|
(14,174 |
) |
|
|
(37,593 |
) |
|
|
Total stockholders' equity |
|
|
86,769 |
|
|
|
107,491 |
|
|
|
82,754 |
|
|
|
Total liabilities and stockholders' equity |
|
$ |
372,768 |
|
|
$ |
312,407 |
|
|
$ |
338,307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SCHOOL SPECIALTY, INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In Thousands, Except Per Share Amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended |
|
For the Six Months
Ended |
|
|
|
|
|
June 30,
2018 |
|
July 1,
2017 |
|
June 30,
2018 |
|
July 1,
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
169,272 |
|
$ |
160,177 |
|
$ |
268,559 |
|
|
$ |
257,288 |
|
Cost of revenues |
|
|
110,528 |
|
|
99,682 |
|
|
173,694 |
|
|
|
162,269 |
|
|
Gross profit |
|
|
58,744 |
|
|
60,495 |
|
|
94,865 |
|
|
|
95,019 |
|
Selling, general and administrative expenses |
|
|
53,808 |
|
|
51,721 |
|
|
110,946 |
|
|
|
99,189 |
|
Facility exit costs and restructuring |
|
171 |
|
|
44 |
|
|
482 |
|
|
|
217 |
|
|
Operating income (loss) |
|
|
4,765 |
|
|
8,730 |
|
|
(16,563 |
) |
|
|
(4,387 |
) |
Other expense: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
3,688 |
|
|
4,197 |
|
|
7,194 |
|
|
|
8,247 |
|
|
Loss on early extinguishment of debt |
|
|
- |
|
|
4,298 |
|
|
- |
|
|
|
4,298 |
|
Income (loss) before benefit from income taxes |
|
|
1,077 |
|
|
235 |
|
|
(23,757 |
) |
|
|
(16,932 |
) |
Provision for (benefit from) income taxes |
|
|
1,059 |
|
|
99 |
|
|
(5,097 |
) |
|
|
(292 |
) |
|
Net loss |
|
$ |
18 |
|
$ |
136 |
|
$ |
(18,660 |
) |
|
$ |
(16,640 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
7,000 |
|
|
7,000 |
|
|
7,000 |
|
|
|
7,000 |
|
|
Diluted |
|
|
7,129 |
|
|
7,077 |
|
|
7,000 |
|
|
|
7,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per Share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
$ |
0.02 |
|
$ |
(2.67 |
) |
|
$ |
(2.38 |
) |
|
Diluted |
|
$ |
0.00 |
|
$ |
0.02 |
|
$ |
(2.67 |
) |
|
$ |
(2.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018 |
|
July 1,
2017 |
|
June 30,
2018 |
|
July 1,
2017 |
|
|
|
Adjusted Earnings before interest, taxes,
depreciation, |
|
|
|
|
|
|
|
|
|
|
|
amortization, bankruptcy-related
costs, restructuring and impairment |
|
|
|
|
|
|
|
|
|
charges (EBITDA) reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
18 |
|
$ |
136 |
|
$ |
(18,660 |
) |
|
$ |
(16,640 |
) |
|
|
|
Provision for (benefit from) income taxes |
|
|
1,059 |
|
|
99 |
|
|
(5,097 |
) |
|
|
(292 |
) |
|
|
|
Purchase accounting deferred revenue adjustment |
|
|
266 |
|
|
- |
|
|
639 |
|
|
|
- |
|
|
|
|
Restructuring costs (1) |
|
|
171 |
|
|
44 |
|
|
482 |
|
|
|
217 |
|
|
|
|
Restructuring-related costs incl in SG&A (2) |
|
|
390 |
|
|
997 |
|
|
1,688 |
|
|
|
1,891 |
|
|
|
|
Loss on early extinguishment of debt |
|
|
- |
|
|
4,298 |
|
|
- |
|
|
|
4,298 |
|
|
|
|
Depreciation and amortization expense |
|
|
3,935 |
|
|
3,147 |
|
|
9,393 |
|
|
|
6,473 |
|
|
|
|
Amortization of development costs |
|
|
1,382 |
|
|
1,172 |
|
|
2,686 |
|
|
|
2,283 |
|
|
|
|
Net interest expense |
|
|
3,688 |
|
|
4,197 |
|
|
7,194 |
|
|
|
8,247 |
|
|
|
|
Stock-based compensation |
|
|
625 |
|
|
511 |
|
|
1,197 |
|
|
|
1,091 |
|
|
|
|
Adjusted EBITDA |
|
$ |
11,534 |
|
$ |
14,601 |
|
$ |
(477 |
) |
|
$ |
7,568 |
|