Financial Overview
Reconciliations of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA represents earnings before interest, taxes, depreciation and amortization, all
on a continuing operations basis. Adjusted EBITDA is presented on a continuing
operations basis and is defined as EBITDA (which represents earnings before interest,
taxes, depreciation and amortization) adjusted for litigation; stock-based
compensation expense; estimated sales tax expense, restructuring and other charges,
including severance and executive retention; loss on debt extinguishment; foreign
currency gain or loss; and other items that are unusual in nature, infrequently
occurring or not considered part of our core operations. Adjusted EBITDA is intended
to show our unleveraged, pre-tax operating results and therefore reflects our financial
performance based on operational factors, excluding non-operational, unusual or non-
recurring losses or gains. Adjusted EBITDA has important limitations as an analytical
tool, and you should not consider it in isolation, or as a substitute for, analysis of our
results as reported under GAAP. For example, Adjusted EBITDA does not reflect: (a)
our capital expenditures, future requirements for capital expenditures or contractual
commitments; (b) changes in, or cash requirements for, our working capital needs; (c)
the significant interest expenses or the cash requirements necessary to service
interest or principal payments on our debt; (d) tax payments that represent a reduction
in cash available to us; (e) any cash requirements for the assets being depreciated
and amortized that may have to be replaced in the future; (f) the impact of earnings or
charges resulting from matters that we and the lender under our credit agreement may
not consider indicative of our ongoing operations; or (g) the impact of any discontinued
operations. In particular, our definition of Adjusted EBITDA allows us to add back
certain non-operating, unusual or non-recurring charges that are deducted in
calculating net income, even though these are expenses that may recur, vary greatly
and are difficult to predict and can represent the effect of long-term strategies as
opposed to short-term results. In addition, certain of these expenses represent the
reduction of cash that could be used for other purposes.
Three Months Ended September 30,
2023
2022
Nine Months Ended September 30,
2023
2022
Reconciliation of net income to EBITDA and
Adjusted EBITDA:
($ in millions)
$
3.9
$
11.9
$
21.3
$
24.1
6.7
7.3
20.2
22.3
2.3
4.1
9.3
9.6
4.0
3.8
11.9
11.0
$
16.9
$
27.2
$
62.7
$
67.0
Net income
Interest, net
Income tax expense
Depreciation and amortization
EBITDA
Adjustments to EBITDA:
Stock-based compensation expense
Sales tax expense
(1)
Restructuring and other charges
Loss on debt extinguishment (3)
Foreign currency loss
$
2.6
$
1.0
$
4.4
$
2.9
0.0
0.0
0.1
(2)
1.7
2.2
0.0
0.2
0.4
0.0
0.1
0.0
0.1
$
4.3
$
1.1
$
6.9
$
3.5
$
21.2
$
28.3
$
69.6
$
70.5
3.6%
9.6%
6.2%
6.9%
-67.6%
-11.7%
20.1%
-24.9%
22.7%
20.4%
20.2%
-1.3%
Subtotal of adjustments to EBITDA
Adjusted EBITDA
Net income margin (% of net sales)
Net income growth (% change 2023 vs. 2022)
Adjusted EBITDA margin (% of net sales)
Adjusted EBITDA growth (% change 2023 vs. 2022)
(1) Represents estimated sales tax expense relating to a contingent liability due to historical activity in certain states where it is
probable that the Company will be subject to sales tax plus interest and penalties.
(2) Represents accrued executive retention to be paid in 2024.
(3) The Company redeemed a portion of the 8.625% Senior Secured Notes through the third quarters of 2023 and 2022 and
expensed the associated portion of the unamortized deferred financing costs.
cpi
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