CNXN - Connection (CNXN) Reports Fourth Quarter and Full Year 2021 Results
FOURTH QUARTER SUMMARY :
- Net sales: $800.2 million, up 18.4% y/y
- Gross profit: $127.0 million, up 16.7% y/y
- Net income: $22.4 million, up 37.4% y/y
- Diluted EPS: $0.85, up 37.1% y/y
FULL YEAR SUMMARY :
- Net sales: $2.9 billion, up 11.7% y/y
- Gross profit: $464.6 million, up 10.9% y/y
- Net income: $69.9 million, up 25.4% y/y
- Diluted EPS: $2.65, up 25.2% y/y
Connection (PC Connection, Inc.; NASDAQ: CNXN ), a leading information technology solutions provider to business, government, healthcare and education markets, today announced results for the fourth quarter and year ended December 31, 2021.
“We are pleased to report record fourth quarter consolidated revenue and gross profit. Our Enterprise and Business Solutions segments achieved record revenues on a quarterly basis. These results demonstrate the continued execution of our business strategy to connect our customers with technology that enhances growth, elevates productivity, and empowers innovation. This strong financial performance was significantly impacted by the ongoing needs of our customers to work-from-anywhere,” said Tim McGrath, President and CEO of Connection.
Net sales for the quarter ended December 31, 2021 increased by 18.4% to $800.2 million, compared to $675.7 million for the prior year quarter. Net income for the quarter ended December 31, 2021 increased by 37.4% to $22.4 million, or $0.85 per diluted share, compared to net income of $16.3 million, or $0.62 per diluted share, for the prior year quarter.
Net sales for the year ended December 31, 2021 increased by 11.7% to $2.9 billion, compared to $2.6 billion for the year ended December 31, 2020. Net income for the year ended December 31, 2021 increased by 25.4% to $69.9 million, or $2.65 per diluted share, compared to net income of $55.8 million, or $2.12 per diluted share for the year ended December 31, 2020.
Earnings before interest, taxes, depreciation and amortization, adjusted for stock-based compensation expense and restructuring and other charges (“Adjusted EBITDA”) totaled $113.0 million for the year ended December 31, 2021, compared to $90.6 million for the twelve months ended December 31, 2020. 1
Quarterly Highlights
- Strong performance across our vertical markets:
- Healthcare saw revenue growth of 29% year-over-year which was largely attributed to organizations striving to improve overall productivity and patient care.
- In the Retail vertical, we grew revenue 31% year-over-year as we saw companies invest to improve the technology experience and employee efficiency.
- Revenue for the Manufacturing vertical also increased slightly year-over-year as companies continue to invest in core IT technologies including cloud, infrastructure, security, and workplace productivity.
Quarterly Performance by Segment :
- Net sales for the Business Solutions segment increased by 14.4% to $303.5 million in the fourth quarter of 2021, compared to $265.2 million in the prior year quarter. Gross profit increased by 14.4% to $58.0 million in the fourth quarter of 2021, compared to $50.7 million in the prior year quarter. Gross margin remained relatively flat at 19.1%.
- Net sales for the Public Sector Solutions segment decreased by 4.1% to $129.4 million in the fourth quarter of 2021, compared to $134.9 million in the prior year quarter. Sales to state and local government and educational institutions increased by 9.1%, compared to the prior year quarter, while sales to the federal government decreased by 35.3% primarily due to the timing of customer rollouts. Gross profit increased slightly to $18.6 million in the fourth quarter of 2021, compared to $18.5 million in the prior year quarter. Gross margin increased by 69 basis points to 14.4% primarily due to a change in product and customer mix.
- Net sales for the Enterprise Solutions segment increased by 33.3% to $367.3 million in the fourth quarter of 2021, compared to $275.6 million in the prior year quarter. Gross profit increased by 27.1% to $50.5 million in the fourth quarter of 2021, compared to $39.7 million in the prior year quarter. Gross margin decreased by 67 basis points to 13.7% primarily due to a higher mix of end-point devices.
Quarterly Sales by Product Mix :
- Notebook/mobility sales, the Company’s largest product category, increased 32% year over year and accounted for 38% of net sales in the fourth quarter of 2021, compared to 34% of net sales in the fourth quarter of 2020. The increase in this product category was primarily due to the growing hybrid work environment.
- Accessories sales increased by 5% year over year and accounted for 11% of net sales in the fourth quarter of 2021, compared to 13% of net sales in the fourth quarter of 2020.
- Software sales increased by 14% year over year and accounted for 11% of net sales in the fourth quarter of 2021, compared to 12% in the fourth quarter of 2020.
- Desktop sales increased by 24% year over year and accounted for 10% of net sales in the fourth quarter of 2021, compared to 9% of net sales in the fourth quarter of 2020.
Selling, general and administrative (“SG&A”) expenses increased in the fourth quarter of 2021 to $95.7 million from $89.1 million in the prior year quarter. SG&A as a percentage of net sales was 12.0%, compared to 13.2% in the prior year quarter. The increase in SG&A was primarily due to an increase in variable compensation due to the higher levels of gross profit and an increase in employee benefit costs.
Cash and cash equivalents were $108.3 million at December 31, 2021, compared to $95.7 million at December 31, 2020.
Conference Call and Webcast
Connection will host a conference call and live web cast today, February 7, 2022 at 4:30 p.m. ET to discuss its fourth quarter financial results. To access the conference call (audio only), please dial 877-776-4016 (US) or 973-638-3231 (International) and enter the confirmation number 9987005. A web-cast of the conference call, which will be broadcast live via the Internet, and a copy of this press release, can be accessed on Connection’s website at ir.connection.com . For those unable to participate in the live call, a replay of the webcast will be available at ir.connection.com approximately 90 minutes after the completion of the call and will be accessible on the site for approximately one year.
Non-GAAP Financial Information
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted Earnings per Share are non-GAAP financial measures. These measures are included to provide additional information with respect to the Company’s operating performance and earnings. Non-GAAP measures are not a substitute for GAAP measures and should be considered together with the GAAP financial measures. Our non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. A reconciliation to the most directly comparable GAAP measures are available in the tables at the end of this release.
About Connection
PC Connection, Inc. and its subsidiaries, dba Connection, ( www.connection.com ; NASDAQ: CNXN) is a Fortune 1000 company headquartered in Merrimack, NH. With offices throughout the United States, Connection delivers custom-configured computer systems overnight from its ISO 9001:2015 certified technical configuration lab at its distribution center in Wilmington, OH. In addition, the Company has over 2,500 technical certifications to ensure that it can solve the most complex issues of its customers. Connection also services international customers through its GlobalServe subsidiary, a global IT procurement and service management company. Investors and media can find more information about Connection at http://ir.connection.com .
Connection–Business Solutions (800.800.5555) is a rapid-response provider of IT products and services serving primarily the small-and medium-sized business sector. It offers more than 460,000 brand-name products through its staff of technically trained sales account managers, publications, and its website at www.connection.com .
Connection–Enterprise Solutions (561.237.3300), www.connection.com/enterprise , provides corporate technology buyers with best-in-class IT solutions, in-depth IT supply-chain expertise, and real-time access to over 460,000 products and 2,500 vendors through MarkITplace ® , a proprietary next-generation, cloud-based supply chain solution. The team’s engineers, software licensing specialists, and subject matter experts help reduce the cost and complexity of buying hardware, software, and services throughout the entire IT lifecycle.
Connection–Public Sector Solutions (800.800.0019), is a rapid-response provider of IT products and services to federal, state, and local government agencies and educational institutions through specialized account managers, publications, and online at www.connection.com/publicsector .
Cautionary Note Regarding Forward-Looking Statements
Statements in this release, other than statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve important risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. You can generally identify forward-looking statements by words such as "believe," "expect," "intend," "plan," "estimate," "anticipate," "may," "should," "will," or similar statements or variations of such terms, although not all forward-looking statements include such terms. Such risks and uncertainties include, but are not limited to, the continuation of the COVID-19 pandemic, including, without limitation, its impact on global supply chains and responses to it, the impact of changes in market demand and the overall level of economic activity and environment, or in the level of business investment in information technology products, product availability and market acceptance, new products, continuation of key vendor and customer relationships and support programs, the ability to realize market demand for and competitive pricing pressures on the products and services marketed by the Company, fluctuations in operating results and the ability of the Company to manage personnel levels in response to fluctuations in revenue, the ability of the Company to hire and retain qualified sales representatives and other essential personnel, the impact of changes in accounting requirements, and other risks detailed in the Company's filings with the Securities and Exchange Commission, including under the caption "Risk Factors" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2020. The Company assumes no obligation to update the information in this press release or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise, except as required by law.
1 Adjusted EBITDA is a non-GAAP measure. See page 10 for the definition and reconciliation.
| CONSOLIDATED SELECTED FINANCIAL INFORMATION |
| At or for the Three Months Ended December 31, |
| 2021 |
| 2020 |
| % |
| (Amounts and shares in thousands, except operating data, P/E ratio, and per share data) |
| Change |
| Operating Data: |
| Net sales |
| $ |
| 800,174 |
|
|
| $ |
| 675,686 |
|
|
| 18 |
| % |
| Diluted earnings per share |
| $ |
| 0.85 |
|
|
| $ |
| 0.62 |
|
|
| 37 |
| % |
| Gross margin |
|
|
| 15.9 |
| % |
|
|
| 16.1 |
| % |
| Operating margin |
|
|
| 3.9 |
| % |
|
|
| 2.9 |
| % |
| Inventory turns |
|
|
| 14 |
|
|
|
|
| 18 |
|
|
| Days sales outstanding |
|
|
| 65 |
|
|
|
|
| 75 |
|
|
| % of |
| % of |
| Product Mix: |
| Net Sales |
| Net Sales |
| Notebooks/Mobility |
|
|
| 38 |
| % |
|
|
| 34 |
| % |
| Accessories |
|
|
| 11 |
|
|
|
|
| 13 |
|
|
| Displays |
|
|
| 11 |
|
|
|
|
| 8 |
|
|
| Software |
|
|
| 11 |
|
|
|
|
| 12 |
|
|
| Desktops |
|
|
| 10 |
|
|
|
|
| 9 |
|
|
| Servers/Storage |
|
|
| 6 |
|
|
|
|
| 7 |
|
|
| Net/Com Products |
|
|
| 6 |
|
|
|
|
| 9 |
|
|
| Other Hardware/Services |
|
|
| 7 |
|
|
|
|
| 8 |
|
|
| Total Net Sales |
|
|
| 100 |
| % |
|
|
| 100 |
| % |
| Stock Performance Indicators: |
| Actual shares outstanding |
|
|
| 26,252 |
|
|
|
|
| 26,170 |
|
|
| Total book value per share |
| $ |
| 26.00 |
|
|
| $ |
| 24.32 |
|
|
| Tangible book value per share |
| $ |
| 22.97 |
|
|
| $ |
| 21.23 |
|
|
| Closing price |
| $ |
| 43.13 |
|
|
| $ |
| 47.29 |
|
|
| Market capitalization |
| $ |
| 1,132,249 |
|
|
| $ |
| 1,237,579 |
|
|
| Trailing price/earnings ratio |
|
|
| 16.3 |
|
|
|
|
| 22.3 |
|
|
| LTM Adjusted EBITDA (1) |
| $ |
| 112,959 |
|
|
| $ |
| 90,566 |
|
|
| Adjusted market capitalization/LTM Adjusted EBITDA (2) |
|
|
| 9.1 |
|
|
|
|
| 12.6 |
|
|
| (1) Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted for stock-based compensation and restructuring and other related charges. |
| (2) Adjusted market capitalization is defined as gross market capitalization less cash balance. |
| REVENUE AND MARGIN INFORMATION |
| For the Three Months Ended December 31, |
| 2021 |
| 2020 |
| Net |
| Gross |
| Net |
| Gross |
| (amounts in thousands) |
| Sales |
| Margin |
| Sales |
| Margin |
| Enterprise Solutions |
| $ |
| 367,291 |
|
|
| 13.7 |
| % |
| $ |
| 275,625 |
|
|
| 14.4 |
| % |
| Business Solutions |
|
|
| 303,479 |
|
|
| 19.1 |
|
|
|
|
| 265,173 |
|
|
| 19.1 |
|
|
| Public Sector Solutions |
|
|
| 129,404 |
|
|
| 14.4 |
|
|
|
|
| 134,888 |
|
|
| 13.7 |
|
|
| Total |
| $ |
| 800,174 |
|
|
| 15.9 |
| % |
| $ |
| 675,686 |
|
|
| 16.1 |
| % |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| Three Months Ended December 31, |
| Years Ended December 31, |
| (amounts in thousands, except per share data) |
|
|
| 2021 |
|
|
|
|
| 2020 |
|
|
|
|
| 2021 |
|
|
|
|
| 2020 |
|
|
| Net sales |
| $ |
| 800,174 |
|
|
| $ |
| 675,686 |
|
|
| $ |
| 2,892,595 |
|
|
| $ |
| 2,590,290 |
|
|
| Cost of sales |
|
|
| 673,139 |
|
|
|
|
| 566,827 |
|
|
|
|
| 2,428,016 |
|
|
|
|
| 2,171,483 |
|
|
| Gross profit |
|
|
| 127,035 |
|
|
|
|
| 108,859 |
|
|
|
|
| 464,579 |
|
|
|
|
| 418,807 |
|
|
| Selling, general and administrative expenses |
|
|
| 95,731 |
|
|
|
|
| 89,101 |
|
|
|
|
| 368,062 |
|
|
|
|
| 345,741 |
|
|
| Restructuring and other charges |
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| 992 |
|
|
| Income from operations |
|
|
| 31,304 |
|
|
|
|
| 19,758 |
|
|
|
|
| 96,517 |
|
|
|
|
| 72,074 |
|
|
| Other income, net |
|
|
| (1 |
| ) |
|
|
| (18 |
| ) |
|
|
| 5 |
|
|
|
|
| 61 |
|
|
| Gain from insurance policies |
|
|
| - |
|
|
|
|
| 1,061 |
|
|
|
|
| - |
|
|
|
|
| 1,061 |
|
|
| Income tax provision |
|
|
| (8,918 |
| ) |
|
|
| (4,505 |
| ) |
|
|
| (26,616 |
| ) |
|
|
| (17,431 |
| ) |
| Net income |
| $ |
| 22,385 |
|
|
| $ |
| 16,296 |
|
|
| $ |
| 69,906 |
|
|
| $ |
| 55,765 |
|
|
| Earnings per common share: |
| Basic |
| $ |
| 0.85 |
|
|
| $ |
| 0.62 |
|
|
| $ |
| 2.67 |
|
|
| $ |
| 2.13 |
|
|
| Diluted |
| $ |
| 0.85 |
|
|
| $ |
| 0.62 |
|
|
| $ |
| 2.65 |
|
|
| $ |
| 2.12 |
|
|
| Shares used in the computation of earnings per common share: |
| Basic |
|
|
| 26,229 |
|
|
|
|
| 26,156 |
|
|
|
|
| 26,196 |
|
|
|
|
| 26,157 |
|
|
| Diluted |
|
|
| 26,372 |
|
|
|
|
| 26,328 |
|
|
|
|
| 26,364 |
|
|
|
|
| 26,336 |
|
|
| December 31, |
| December 31, |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
| 2021 |
|
|
|
|
| 2020 |
|
|
| (amounts in thousands) |
| ASSETS |
| Current Assets: |
| Cash and cash equivalents |
| $ |
| 108,310 |
|
|
| $ |
| 95,655 |
|
|
| Accounts receivable, net |
|
|
| 608,307 |
|
|
|
|
| 611,021 |
|
|
| Inventories, net |
|
|
| 206,555 |
|
|
|
|
| 140,867 |
|
|
| Prepaid expenses and other current assets |
|
|
| 10,016 |
|
|
|
|
| 11,437 |
|
|
| Total current assets |
|
|
| 933,188 |
|
|
|
|
| 858,980 |
|
|
| Property and equipment, net |
|
|
| 61,011 |
|
|
|
|
| 61,537 |
|
|
| Right-of-use assets, net |
|
|
| 9,579 |
|
|
|
|
| 12,821 |
|
|
| Goodwill |
|
|
| 73,602 |
|
|
|
|
| 73,602 |
|
|
| Intangibles assets, net |
|
|
| 5,868 |
|
|
|
|
| 7,088 |
|
|
| Other assets |
|
|
| 910 |
|
|
|
|
| 1,345 |
|
|
| Total Assets |
| $ |
| 1,084,158 |
|
|
| $ |
| 1,015,373 |
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| Current Liabilities: |
| Accounts payable |
| $ |
| 281,836 |
|
|
| $ |
| 266,846 |
|
|
| Accrued payroll |
|
|
| 31,741 |
|
|
|
|
| 17,828 |
|
|
| Accrued expenses and other liabilities |
|
|
| 61,830 |
|
|
|
|
| 57,586 |
|
|
| Total current liabilities |
|
|
| 375,407 |
|
|
|
|
| 342,260 |
|
|
| Deferred income taxes |
|
|
| 19,278 |
|
|
|
|
| 18,525 |
|
|
| Operating lease liability |
|
|
| 6,789 |
|
|
|
|
| 9,631 |
|
|
| Other liabilities |
|
|
| 211 |
|
|
|
|
| 8,630 |
|
|
| Total Liabilities |
|
|
| 401,685 |
|
|
|
|
| 379,046 |
|
|
| Stockholders’ Equity: |
| Common stock |
|
|
| 290 |
|
|
|
|
| 289 |
|
|
| Additional paid-in capital |
|
|
| 122,354 |
|
|
|
|
| 119,891 |
|
|
| Retained earnings |
|
|
| 605,766 |
|
|
|
|
| 562,084 |
|
|
| Treasury stock at cost |
|
|
| (45,937 |
| ) |
|
|
| (45,937 |
| ) |
| Total Stockholders’ Equity |
|
|
| 682,473 |
|
|
|
|
| 636,327 |
|
|
| Total Liabilities and Stockholders’ Equity |
| $ |
| 1,084,158 |
|
|
| $ |
| 1,015,373 |
|
|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| Three Months Ended December 31, |
| Years Ended December 31, |
| (amounts in thousands) |
|
|
| 2021 |
|
|
|
|
| 2020 |
|
|
|
|
| 2021 |
|
|
|
|
| 2020 |
|
|
| Cash Flows from Operating Activities: |
| Net income |
| $ |
| 22,385 |
|
|
| $ |
| 16,296 |
|
|
| $ |
| 69,906 |
|
|
| $ |
| 55,765 |
|
|
| Adjustments to reconcile net income to net cash provided by operating activities: |
| Depreciation and amortization |
|
|
| 3,037 |
|
|
|
|
| 3,268 |
|
|
|
|
| 12,202 |
|
|
|
|
| 13,603 |
|
|
| Adjustments to credit losses reserve |
|
|
| 1,603 |
|
|
|
|
| 40 |
|
|
|
|
| 3,307 |
|
|
|
|
| 3,316 |
|
|
| Stock-based compensation expense |
|
|
| 1,113 |
|
|
|
|
| 802 |
|
|
|
|
| 4,231 |
|
|
|
|
| 2,668 |
|
|
| Deferred income taxes |
|
|
| 753 |
|
|
|
|
| (1,645 |
| ) |
|
|
| 753 |
|
|
|
|
| (1,645 |
| ) |
| Gain on life insurance proceeds |
|
|
| - |
|
|
|
|
| (1,061 |
| ) |
|
|
| - |
|
|
|
|
| (1,061 |
| ) |
| (Gain) loss on disposal of fixed assets |
|
|
| (38 |
| ) |
|
|
| 15 |
|
|
|
|
| (36 |
| ) |
|
|
| 28 |
|
|
| Changes in assets and liabilities: |
| Accounts receivable |
|
|
| (24,530 |
| ) |
|
|
| (20,115 |
| ) |
|
|
| (2,093 |
| ) |
|
|
| (63,650 |
| ) |
| Inventories |
|
|
| (31,181 |
| ) |
|
|
| (6,178 |
| ) |
|
|
| (65,688 |
| ) |
|
|
| (16,201 |
| ) |
| Prepaid expenses and other current assets |
|
|
| 1,781 |
|
|
|
|
| (346 |
| ) |
|
|
| 1,421 |
|
|
|
|
| 622 |
|
|
| Other non-current assets |
|
|
| 121 |
|
|
|
|
| 321 |
|
|
|
|
| 435 |
|
|
|
|
| (398 |
| ) |
| Accounts payable |
|
|
| 64,811 |
|
|
|
|
| (16,221 |
| ) |
|
|
| 14,814 |
|
|
|
|
| 32,515 |
|
|
| Accrued expenses and other liabilities |
|
|
| 9,065 |
|
|
|
|
| 14,523 |
|
|
|
|
| 18,502 |
|
|
|
|
| 10,536 |
|
|
| Net cash provided by (used in) operating activities |
|
|
| 48,920 |
|
|
|
|
| (10,301 |
| ) |
|
|
| 57,754 |
|
|
|
|
| 36,098 |
|
|
| Cash Flows from Investing Activities: |
| Purchases of equipment and capitalized software |
|
|
| (3,210 |
| ) |
|
|
| (1,422 |
| ) |
|
|
| (10,302 |
| ) |
|
|
| (11,033 |
| ) |
| Proceeds from sale of equipment |
|
|
| 69 |
|
|
|
|
| 69 |
|
|
| Proceeds from life insurance |
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| 1,500 |
|
|
|
|
| - |
|
|
| Net cash used in investing activities |
|
|
| (3,141 |
| ) |
|
|
| (1,422 |
| ) |
|
|
| (8,733 |
| ) |
|
|
| (11,033 |
| ) |
| Cash Flows from Financing Activities: |
| Purchase of treasury shares |
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| (10,222 |
| ) |
| Dividend payments |
|
|
| (26,224 |
| ) |
|
|
| - |
|
|
|
|
| (34,599 |
| ) |
|
|
| (8,427 |
| ) |
| Issuance of stock under Employee Stock Purchase Plan |
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| - |
|
|
|
|
| 536 |
|
|
| Payment of payroll taxes on stock-based compensation through shares withheld |
|
|
| (973 |
| ) |
|
|
| (673 |
| ) |
|
|
| (1,767 |
| ) |
|
|
| (1,357 |
| ) |
| Net cash used in financing activities |
|
|
| (27,197 |
| ) |
|
|
| (673 |
| ) |
|
|
| (36,366 |
| ) |
|
|
| (19,470 |
| ) |
| Increase (decrease) in cash and cash equivalents |
|
|
| 18,582 |
|
|
|
|
| (12,396 |
| ) |
|
|
| 12,655 |
|
|
|
|
| 5,595 |
|
|
| Cash and cash equivalents, beginning of period |
|
|
| 89,728 |
|
|
|
|
| 108,051 |
|
|
|
|
| 95,655 |
|
|
|
|
| 90,060 |
|
|
| Cash and cash equivalents, end of period |
| $ |
| 108,310 |
|
|
| $ |
| 95,655 |
|
|
| $ |
| 108,310 |
|
|
| $ |
| 95,655 |
|
|
| Non-cash Investing Activities: |
| Dividend declaration |
| $ |
| - |
|
|
| $ |
| 8,375 |
|
|
| $ |
| - |
|
|
| $ |
| 8,375 |
|
|
| Life insurance proceeds recorded as receivable |
| $ |
| - |
|
|
| $ |
| 1,500 |
|
|
| $ |
| - |
|
|
| $ |
| 1,500 |
|
|
| Accrued capital expenditures |
| $ |
| 334 |
|
|
| $ |
| 442 |
|
|
|
|
| 334 |
|
|
|
|
| 442 |
|
|
| Supplemental Cash Flow Information: |
| Income taxes paid |
| $ |
| 865 |
|
|
| $ |
| 5,643 |
|
|
| $ |
| 21,465 |
|
|
| $ |
| 19,441 |
|
|
| EBITDA AND ADJUSTED EBITDA |
| A reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure is detailed below. Adjusted EBITDA is defined as EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted for restructuring and other charges, and stock-based compensation. Both EBITDA and Adjusted EBITDA are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either includes or excludes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. We believe that EBITDA and Adjusted EBITDA provide helpful information with respect to our operating performance including our ability to fund our future capital expenditures and working capital requirements. Adjusted EBITDA also provides helpful information as it is the primary measure used in certain financial covenants contained in our credit agreements. When analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA in addition to, and not as alternatives for Net income or any other performance measure presented in accordance with GAAP. Our non-GAAP financial measures may not be comparable to other similar titled measures of other companies. |
| (amounts in thousands) |
| Three Months Ended December 31, |
| Years Ended December 31, (1) |
| 2021 |
| 2020 |
| % Change |
| 2021 |
| 2020 |
| % Change |
| Net income |
| $ |
| 22,385 |
| $ |
| 16,296 |
| 37 |
| % |
| $ |
| 69,906 |
| $ |
| 55,765 |
| 25 |
| % |
| Depreciation and amortization |
|
|
| 3,037 |
|
|
| 3,269 |
| (7 |
| %) |
|
|
| 12,202 |
|
|
| 13,603 |
| (10 |
| %) |
| Income tax expense |
|
|
| 8,918 |
|
|
| 4,505 |
| 98 |
| % |
|
|
| 26,616 |
|
|
| 17,431 |
| 53 |
| % |
| Interest expense |
|
|
| 4 |
|
|
| 29 |
| (86 |
| %) |
|
|
| 4 |
|
|
| 107 |
| (96 |
| %) |
| EBITDA |
|
|
| 34,344 |
|
|
| 24,099 |
| 43 |
| % |
|
|
| 108,728 |
|
|
| 86,906 |
| 25 |
| % |
| Restructuring and other charges (2) |
|
|
| - |
|
|
| - |
| 0 |
| % |
|
|
| - |
|
|
| 992 |
| (100 |
| %) |
| Stock-based compensation |
|
|
| 1,113 |
|
|
| 801 |
| 39 |
| % |
|
|
| 4,231 |
|
|
| 2,668 |
| 59 |
| % |
| Adjusted EBITDA |
| $ |
| 35,457 |
| $ |
| 24,900 |
| 42 |
| % |
| $ |
| 112,959 |
| $ |
| 90,566 |
| 25 |
| % |
| (1) LTM: Last twelve months |
| (2) Restructuring and other charges in 2020 consist of severance and other charges related to internal restructuring activities. |
| ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE |
| A reconciliation from Net Income to Adjusted Net Income is detailed below. Adjusted Net Income is defined as Net Income plus restructuring and other charges, net of tax. A reconciliation from Diluted Earnings per Share to Adjusted Diluted Earnings per Share is detailed below. Adjusted Diluted Earnings per Share is defined Diluted Earnings per Shared adjusted for restructuring and other charges, net of tax. Adjusted Net Income and Adjusted Diluted Earnings Per Share are considered non-GAAP financial measures (see note above in Adjusted EBITDA for a description of non-GAAP financial measures). The Company believes that these non-GAAP disclosures provide helpful information with respect to the Company's operating performance. When analyzing our operating performance, investors should use Adjusted Net Income and Adjusted Diluted Earnings per Share in addition to, and not as alternatives for Net income and Diluted Earnings per Share or any other performance measure presented in accordance with GAAP. |
| (amounts in thousands, except per share data) |
| Three Months Ended December 31, |
| Years Ended December 31, |
| 2021 |
| 2020 |
| % Change |
| 2021 |
| 2020 |
| % Change |
| Net income |
| $ |
| 22,385 |
| $ |
| 16,296 |
| 37 |
| % |
| $ |
| 69,906 |
| $ |
| 55,765 |
| 25 |
| % |
| Restructuring and other charges, net of tax (1) |
|
|
| - |
|
|
| - |
| 0 |
| % |
|
|
| - |
|
|
| 755 |
| -100 |
| % |
| Adjusted Net Income |
| $ |
| 22,385 |
| $ |
| 16,296 |
| 37 |
| % |
| $ |
| 69,906 |
| $ |
| 56,520 |
| 24 |
| % |
| Diluted shares |
|
|
| 26,372 |
|
|
| 26,328 |
|
|
| 26,364 |
|
|
| 26,336 |
| Diluted Earnings per Share |
| $ |
| 0.85 |
| $ |
| 0.62 |
| 37 |
| % |
| $ |
| 2.65 |
| $ |
| 2.12 |
| 25 |
| % |
| Adjusted Diluted Earnings per Share |
| $ |
| 0.85 |
| $ |
| 0.62 |
| 37 |
| % |
| $ |
| 2.65 |
| $ |
| 2.15 |
| 24 |
| % |
| (1) Restructuring and other charges in 2020 consist of severance and other charges related to internal restructuring activities. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220207005759/en/
Investor Relations Contact:
Thomas Baker, 603.683.2505
Senior Vice President, CFO, and Treasurer
tom@connection.com