Exhibit
99.1
Nine
Energy Service Announces First Quarter 2026 Results
| ● | Revenue,
net income and adjusted EBITDAA of $88.4 million, $107.9 million and $0.9 million,
respectively, for the predecessor period1 |
| ● | Revenue,
net loss and adjusted EBITDA of $41.6 million, $(1.3) million and $2.1 million, respectively,
for the successor period1 |
| ● | Expect
second quarter 2026 revenue of $136 - $146 million and adjusted EBITDA of $10.0 - $15.0 million |
| ● | Nine
has surpassed over 500,000 ScorpionTM Composite Plugs sold |
| ● | Total
liquidity as of March 31, 2026 of $46.9 million |
HOUSTON
– Nine Energy Service, Inc. (“Nine” or the “Company”) (NYSE American: NINE) reported revenues of $88.4
million, net income of $107.9 million, or $2.65 per diluted share and $2.65 per basic share, and adjusted EBITDA of $0.9 million for
the predecessor period. Nine reported revenues of $41.6 million, net loss of $(1.3) million, or $(0.09) per diluted share and $(0.09)
per basic share, and adjusted EBITDA of $2.1 million for the successor period.
“The
first quarter was an unusual and complex period from a financial reporting perspective,” said Ann Fox, President and Chief Executive
Officer of Nine Energy Service. “During the quarter, we entered and successfully emerged from Chapter 11 and implemented fresh
start accounting effective March 5, resulting in several required reporting changes, including the revaluation of our assets. In addition,
net income and adjusted EBITDA for our predecessor period was negatively impacted by a $5.5 million non-cash inventory write-down. Importantly,
we believe these items are now largely behind us, and we expect improved financial results beginning in the second quarter. Following
this process, the Company has been transformed in meaningful ways, and I am confident that Nine is now in a stronger financial position
as we begin our next chapter of growth.”
“Shifting
to the market, the U.S. rig count remained stable throughout the quarter; however, weather-related disruptions led to operational inefficiencies
early in the quarter and negatively impacted revenue and earnings during our predecessor period, most notably within our Wireline division.
As conditions normalized, operating efficiency improved, leading to stronger monthly run rates as the quarter progressed. Pricing across
our service lines remained largely stable compared to exit rates at the end of 2025.”
| 1 | “Predecessor
period” is defined as January 1, 2026 through March 5, 2026, and “successor period”
is defined as March 6, 2026 through March 31, 2026. On March 5, 2026 (the “Plan Effective
Date”), the Company emerged from bankruptcy, and in connection therewith, the Company
applied fresh start accounting on such date. The application of fresh start accounting resulted
in a new basis of accounting and the Company becoming a new entity for financial reporting
purposes, which is referred to as the “Successor.” The Company prior to the application
of fresh start account is referred to as the “Predecessor.” With the application
of fresh start accounting, the Company allocated its reorganization value to its individual
assets based on their estimated fair. The Plan Effective Date fair values of the Successor’s
assets and liabilities differ materially from their recorded values as reflected on the historical
balance sheet of the Predecessor. Accordingly, the Predecessor and Successor financial information
are not comparable. For additional information on the Company’s application of fresh
start accounting, see Note 4 – Fresh Start Accounting in Item 1 of Part I of the Company’s
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026. |
“The
macro environment continues to be highly dynamic. Recent improvement in oil prices has increased optimism for U.S. land activity in the
second half of the year relative to expectations at the end of 2025. Should commodity prices remain at current levels in conjunction
with a more constructive outlook, incremental rig additions and the completion of DUCs are possible. Thus far in in the second quarter,
customer activity plans remain largely unchanged, and overall U.S. rig counts have been flat.”
“Natural
gas prices were supportive, averaging $4.71 in the first quarter compared to $3.73 in the fourth quarter of 2025. Natural gas-weighted
basins, including the Haynesville, continue to represent an attractive opportunity for Nine. We are focused on ensuring the organization
is well positioned to capture incremental activity in these basins. We recently opened a new wireline facility in the Haynesville and
look to leverage our established customer relationships and long track record of success to help drive profitable market share gains.”
“Looking
ahead to the second quarter, we expect continued operational normalization and efficiency gains as well as normalized financial reporting.
As a result, we anticipate sequential improvement in revenue and earnings compared to the predecessor and successor periods.”
“I
believe Nine is well positioned operationally with financial flexibility, which will allow us to execute on our strategic priorities
while navigating a dynamic market environment. We remain focused on disciplined execution and profitable growth and we are confident
in the long-term value potential of Nine.”
Operating
Results
During
the predecessor period, the Company reported revenues of $88.4 million, gross profit of $2.0 million and adjusted gross profitB
of $7.8 million. During the successor period, the Company reported revenues of $41.6 million, gross profit of $3.8 million
and adjusted gross profitB of $6.0 million.
During
the predecessor period, the Company reported general and administrative (“G&A”) expense of $13.1 million and depreciation
and amortization expense (“D&A”) of $5.9 million. During the successor period, the Company reported G&A expense of
$4.6 million and D&A expense of $2.3 million.
The
income tax provision recorded for the predecessor period was approximately $0.1 million. The income tax benefit recorded for the successor
period was approximately $0.1 million. The income tax provision/(benefit) recorded for both periods was primarily attributed to state
and non-U.S. income taxes.
Liquidity
and Capital Expenditures
During
the predecessor period, the Company reported net cash used in operating activities of $10.0 million. During the successor period, the
Company reported net cash used in operating activities of $2.4 million. Capital expenditures for the predecessor period totaled $1.9
million and $3.7 million for the successor period. The Company’s full-year 2026 capital expenditures guidance is $20 to $30 million.
As
of March 31, 2026, Nine’s cash and cash equivalents were $11.2 million, and the Company had $35.7 million of availability under
its revolving credit facility, resulting in a total liquidity position of $46.9 million as of March 31, 2026. On March 31, 2026, the
Company had $90.4 million of borrowings under its revolving credit facility. On April 28, 2026, the Company borrowed an additional $5.0
million under the revolving credit facility.
ABSee
end of press release for definitions of these non-GAAP measures. These measures are intended to provide additional information only and
should not be considered as alternatives to, or more meaningful than, net income (loss), gross profit or any other measure determined
in accordance with GAAP. Certain items excluded from these measures are significant components in understanding and assessing a company’s
financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets.
Our computation of these measures may not be comparable to other similarly titled measures of other companies.
Conference
Call Information
The
call is scheduled for Thursday, May 14, 2026, at 9:00 am Central Time. Participants may join the live conference call by dialing
U.S. (Toll Free): (877) 524-8416 or International: (412) 902-1028 and asking for the “Nine Energy Service Earnings Call”.
Participants are encouraged to dial into the conference call ten to fifteen minutes before the scheduled start time to avoid any delays
entering the earnings call.
For
those who cannot listen to the live call, a telephonic replay of the call will be available through May 28, 2026 and may be accessed
by dialing U.S. (Toll Free): (877) 660-6853 or International: (201) 612-7415 and entering the passcode of 13759688.
About
Nine Energy Service
Nine
Energy Service is an oilfield services company that offers completion solutions within North America and abroad. The Company brings years
of experience with a deep commitment to serving clients with smarter, customized solutions and world-class resources that drive efficiencies.
Serving the global oil and gas industry, Nine continues to differentiate itself through superior service quality, wellsite execution
and cutting-edge technology. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, Haynesville,
SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and Canada.
For
more information on the Company, please visit Nine’s website at nineenergyservice.com.
Forward
Looking Statements
The
foregoing contains 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. Forward-looking statements are those that do not state historical facts and are, therefore, inherently
subject to risks and uncertainties. Forward-looking statements also include statements that refer to or are based on projections, uncertain
events or assumptions. Forward-looking statements included herein relate to, among other things, our strategy and prospects, future operations,
financial position and financial results, estimated future revenues and earnings. All forward-looking statements included herein are
based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those
forward-looking statements. Such risks and uncertainties include, among other things, the level of capital spending and well completions
by the onshore oil and natural gas industry, which may be affected by geopolitical and economic developments in the U.S. and globally,
including conflicts, instability, acts of war or terrorism in oil-producing countries or regions, particularly Iran and elsewhere in
the Middle East, Russia, South America and Africa, as well as actions by members of the Organization of the Petroleum Exporting Countries
and other oil-exporting nations; general economic conditions and inflation, particularly cost inflation with labor or materials; the
effects of tariffs and other trade measures on the Company’s business and on the onshore oil and natural gas industry generally;
equipment and supply chain constraints; the Company’s ability to attract and retain key employees, technical personnel and other
skilled and qualified workers; the Company’s ability to maintain existing prices or implement price increases on our products and
services; pricing pressures, reduced sales or reduced market share as a result of intense competition in the markets for the Company’s
dissolvable plug products; conditions inherent in the oilfield services industry, such as equipment defects, liabilities arising from
accidents or damage involving our fleet of trucks or other equipment, explosions and uncontrollable flows of gas or well fluids, and
loss of well control; the Company’s ability to implement and commercialize new technologies, services and tools; the Company’s
ability to grow its completion tool business domestically and internationally; our recent emergence from bankruptcy, which may adversely
affect our business and relationships; seasonal and adverse weather conditions; the adequacy of the Company’s capital resources
and liquidity, including the ability to meet its debt obligations; the Company’s ability to manage capital expenditures; the Company’s
ability to accurately predict customer demand, including that of its international customers; the loss of, or interruption or delay in
operations by, one or more significant customers, including certain of the Company’s customers outside of the United States; the
loss of or interruption in operations of one or more key suppliers; the incurrence of significant costs and liabilities resulting from
litigation; cybersecurity risks; changes in laws or regulations regarding issues of health, safety and protection of the environment;
and other factors described in the “Risk Factors” and “Business” sections of the Company’s most recently
filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned
not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and, except as required by law, the
Company undertakes no obligation to update those statements or to publicly announce the results of any revisions to any of those statements
to reflect future events or developments.
Nine
Energy Service Investor Contact:
Heather
Schmidt
Interim CFO and SVP, Strategic Development and Investor Relations
(281) 730-5113
investors@nineenergyservice.com
NINE
ENERGY SERVICE, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(In
Thousands, Except Share and Per Share Amounts)
(Unaudited)
| | |
Successor | | |
Predecessor | |
| | |
Period
from March
6,
2026
through March
31,
2026 | | |
Period
from January
1, 2026 through March
5,
2026 | | |
Three
Months Ended December
31,
2025 | |
| Revenues | |
$ | 41,603 | | |
$ | 88,392 | | |
$ | 132,166 | |
| Cost and
expenses | |
| | | |
| | | |
| | |
| Cost
of revenues (exclusive of depreciation and amortization shown separately below) | |
| 35,600 | | |
| 80,546 | | |
| 111,723 | |
| General and administrative
expenses | |
| 4,623 | | |
| 13,052 | | |
| 19,854 | |
| Depreciation | |
| 2,205 | | |
| 3,963 | | |
| 5,813 | |
| Amortization of intangibles | |
| 68 | | |
| 1,984 | | |
| 2,796 | |
| Loss on revaluation of contingent
liability | |
| — | | |
| — | | |
| 48 | |
| Gain
on sale of property and equipment | |
| (37 | ) | |
| (147 | ) | |
| (2,576 | ) |
| Loss from operations | |
| (856 | ) | |
| (11,006 | ) | |
| (5,492 | ) |
| Interest expense | |
| 542 | | |
| 5,256 | | |
| 13,889 | |
| Interest income | |
| (1 | ) | |
| (82 | ) | |
| (111 | ) |
| Reorganization items, net | |
| — | | |
| (124,059 | ) | |
| — | |
| Other
income | |
| (53 | ) | |
| (109 | ) | |
| (162 | ) |
| Income (loss) before income
taxes | |
| (1,344 | ) | |
| 107,988 | | |
| (19,108 | ) |
| Provision
(benefit) for income taxes | |
| (91 | ) | |
| 109 | | |
| 115 | |
| Net income (loss) | |
$ | (1,253 | ) | |
$ | 107,879 | | |
$ | (19,223 | ) |
| Income (loss) per share | |
| | | |
| | | |
| | |
| Basic | |
$ | (0.09 | ) | |
$ | 2.65 | | |
$ | (0.47 | ) |
| Diluted | |
$ | (0.09 | ) | |
$ | 2.65 | | |
$ | (0.47 | ) |
| Weighted average shares outstanding | |
| | | |
| | | |
| | |
| Basic | |
| 13,949,990 | | |
| 40,650,388 | | |
| 41,306,039 | |
| Diluted | |
| 13,949,990 | | |
| 40,659,260 | | |
| 41,306,039 | |
| Other comprehensive
loss (income), net of tax | |
| | | |
| | | |
| | |
| Foreign
currency translation adjustments, net of tax of $0 and $0 | |
$ | 32 | | |
$ | 158 | | |
$ | (322 | ) |
| Total
other comprehensive income (loss), net of tax | |
| 32 | | |
| 158 | | |
| (322 | ) |
| Total
comprehensive income (loss) | |
$ | (1,221 | ) | |
$ | 108,037 | | |
$ | (19,545 | ) |
NINE
ENERGY SERVICE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
Thousands)
(Unaudited)
| | |
Successor | | |
Predecessor | |
| | |
March
31,
2026 | | |
December
31,
2025 | |
| Assets | |
| | |
| |
| Current
assets | |
| | |
| |
| Cash
and cash equivalents | |
$ | 11,249 | | |
$ | 18,449 | |
| Restricted
cash | |
| 10,616 | | |
| 1,393 | |
| Accounts
receivable, net | |
| 88,270 | | |
| 75,979 | |
| Inventories,
net | |
| 50,550 | | |
| 56,553 | |
| Prepaid
expenses | |
| 12,106 | | |
| 13,538 | |
| Other
current assets | |
| 2,064 | | |
| 2,919 | |
| Total
current assets | |
| 174,855 | | |
| 168,831 | |
| Property
and equipment, net | |
| 109,013 | | |
| 64,266 | |
| Operating
lease right of use assets, net | |
| 32,482 | | |
| 34,105 | |
| Finance
lease right of use assets, net | |
| 52 | | |
| 16 | |
| Intangible
assets, net | |
| 9,103 | | |
| 68,063 | |
| Other
long-term assets | |
| 535 | | |
| 4,183 | |
| Total
assets | |
$ | 326,040 | | |
$ | 339,464 | |
| Liabilities
and Stockholders’ Equity (Deficit) | |
| | | |
| | |
| Current
liabilities | |
| | | |
| | |
| Accounts
payable | |
$ | 41,453 | | |
$ | 43,564 | |
| Accrued
expenses | |
| 23,662 | | |
| 27,764 | |
| Income
taxes payable | |
| 374 | | |
| 356 | |
| Current
portion of long-term debt | |
| 3,978 | | |
| 6,310 | |
| Current
portion of operating lease obligations | |
| 12,454 | | |
| 13,409 | |
| Current
portion of finance lease obligations | |
| 50 | | |
| 6 | |
| Total
current liabilities | |
| 81,971 | | |
| 91,409 | |
| Long-term
liabilities | |
| | | |
| | |
| Long-term
debt | |
| 90,439 | | |
| 341,572 | |
| Long-term
operating lease obligations | |
| 19,602 | | |
| 21,352 | |
| Other
long-term liabilities | |
| 45 | | |
| 87 | |
| Total
liabilities | |
| 192,057 | | |
| 454,420 | |
| Stockholders’
equity (deficit) | |
| | | |
| | |
| Predecessor
common stock (120,000,000 shares authorized at $0.01 par value; 43,326,339 shares issued and outstanding at December 31, 2025) | |
| — | | |
| 433 | |
| Successor
common stock (70,000,000 shares authorized at $0.01 par value; 13,949,990 shares issued and outstanding at March 31, 2026) | |
| 139 | | |
| — | |
| Additional
paid-in capital | |
| 135,065 | | |
| 808,432 | |
| Accumulated
other comprehensive income (loss) | |
| 32 | | |
| (5,187 | ) |
| Accumulated
deficit | |
| (1,253 | ) | |
| (918,634 | ) |
| Total
stockholders’ equity (deficit) | |
| 133,983 | | |
| (114,956 | ) |
| Total
liabilities and stockholders’ equity (deficit) | |
$ | 326,040 | | |
$ | 339,464 | |
NINE ENERGY SERVICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| | |
Successor | | |
Predecessor | |
| | |
Period from
March 6,
2026 through
March 31,
2026 | | |
Period from
January 1,
2026 through
March 5,
2026 | | |
Three Months Ended
December 31,
2025 | |
| Cash flows from operating activities | |
| | | |
| | | |
| | |
| Net income (loss) | |
$ | (1,253 | ) | |
$ | 107,879 | | |
$ | (19,223 | ) |
| Adjustments to reconcile net income (loss) to net cash used in operating activities | |
| | | |
| | | |
| | |
| Depreciation | |
| 2,205 | | |
| 3,963 | | |
| 5,813 | |
| Amortization of intangibles | |
| 68 | | |
| 1,984 | | |
| 2,796 | |
| Amortization of deferred financing costs and non-cash interest | |
| 134 | | |
| 2,421 | | |
| 4,134 | |
| Amortization of operating leases | |
| 1,048 | | |
| 2,930 | | |
| 4,107 | |
| Provision for (recovery of) doubtful accounts | |
| — | | |
| 82 | | |
| (36 | ) |
| Provision for inventory obsolescence | |
| — | | |
| 2,462 | | |
| 244 | |
| Stock-based compensation expense | |
| — | | |
| 1,890 | | |
| 455 | |
| Gain on sale of property and equipment | |
| (37 | ) | |
| (147 | ) | |
| (2,576 | ) |
| Loss on revaluation of contingent liability | |
| — | | |
| — | | |
| 48 | |
| Non-cash reorganization items, net | |
| — | | |
| (139,231 | ) | |
| — | |
| Changes in operating assets and liabilities, net of effects from acquisitions | |
| | | |
| | | |
| | |
| Accounts receivable, net | |
| (9,163 | ) | |
| (3,211 | ) | |
| 5,502 | |
| Inventories, net | |
| (183 | ) | |
| 2,059 | | |
| 19 | |
| Prepaid expenses and other current assets | |
| 17 | | |
| 1,658 | | |
| (7,653 | ) |
| Accounts payable and accrued expenses | |
| 5,176 | | |
| 8,883 | | |
| 9,601 | |
| Income taxes receivable/payable | |
| (91 | ) | |
| 109 | | |
| 187 | |
| Operating lease obligations | |
| (296 | ) | |
| (3,674 | ) | |
| (4,104 | ) |
| Other assets and liabilities | |
| (41 | ) | |
| (8 | ) | |
| (1,487 | ) |
| Net cash used in operating activities | |
| (2,416 | ) | |
| (9,951 | ) | |
| (2,173 | ) |
| Cash flows from investing activities | |
| | | |
| | | |
| | |
| Proceeds from sales of property and equipment | |
| 15 | | |
| 286 | | |
| 27 | |
| Proceeds from property and equipment casualty losses | |
| 25 | | |
| 628 | | |
| 2,165 | |
| Purchases of property and equipment | |
| (3,482 | ) | |
| (2,950 | ) | |
| (2,624 | ) |
| Net cash used in investing activities | |
| (3,442 | ) | |
| (2,036 | ) | |
| (432 | ) |
| Cash flows from financing activities | |
| | | |
| | | |
| | |
| Proceeds from Prepetition ABL Facility | |
| — | | |
| 3,000 | | |
| — | |
| Payments on Prepetition ABL Facility | |
| — | | |
| (67,349 | ) | |
| — | |
| Proceeds from DIP ABL Facility | |
| — | | |
| 79,495 | | |
| — | |
| Payments of DIP ABL Facility | |
| — | | |
| (82,568 | ) | |
| — | |
| Proceeds from Exit ABL Facility | |
| — | | |
| 89,479 | | |
| — | |
| Proceeds from short-term debt | |
| — | | |
| - | | |
| 9,570 | |
| Payments of short-term debt | |
| (782 | ) | |
| (1,550 | ) | |
| (3,260 | ) |
| Principal payments on finance leases | |
| (5 | ) | |
| (11 | ) | |
| (7 | ) |
| Net cash provided by (used in) financing activities | |
| (787 | ) | |
| 20,496 | | |
| 6,303 | |
| Impact of foreign currency exchange on cash | |
| 70 | | |
| 89 | | |
| (331 | ) |
| Net (decrease) increase in cash, cash equivalents, and restricted cash | |
| (6,575 | ) | |
| 8,598 | | |
| 3,367 | |
| Cash, cash equivalents, and restricted cash | |
| | | |
| | | |
| | |
| Beginning of period | |
| 28,440 | | |
| 19,842 | | |
| 16,475 | |
| End of period | |
$ | 21,865 | | |
$ | 28,440 | | |
$ | 19,842 | |
NINE ENERGY SERVICE, INC.
RECONCILIATION OF ADJUSTED EBITDA
(In Thousands)
(Unaudited)
| | |
Successor | | |
Predecessor | |
| | |
Period from
March 6,
2026 through
March 31,
2026 | | |
Period from
January 1,
2026 through
March 5,
2026 | | |
Three Months Ended
December 31,
2025 | |
| Net income (loss) | |
$ | (1,253 | ) | |
$ | 107,879 | | |
$ | (19,223 | ) |
| Interest expense | |
| 542 | | |
| 5,256 | | |
| 13,889 | |
| Interest income | |
| (1 | ) | |
| (82 | ) | |
| (111 | ) |
| Depreciation | |
| 2,205 | | |
| 3,963 | | |
| 5,813 | |
| Amortization of intangibles | |
| 68 | | |
| 1,984 | | |
| 2,796 | |
| Provision (benefit) for income taxes | |
| (91 | ) | |
| 109 | | |
| 115 | |
| EBITDA | |
$ | 1,470 | | |
$ | 119,109 | | |
$ | 3,279 | |
| Loss on revaluation of contingent liability(1) | |
| — | | |
| — | | |
| 48 | |
| Reorganization items, net | |
| — | | |
| (125,640 | ) | |
| — | |
| Restructuring charges and other expenses(2) | |
| 555 | | |
| 5,408 | | |
| 7,200 | |
| Stock-based compensation | |
| — | | |
| 1,890 | | |
| 455 | |
| Cash award expense | |
| 121 | | |
| 250 | | |
| 701 | |
| Gain on sale of property and equipment | |
| (37 | ) | |
| (147 | ) | |
| (2,576 | ) |
| Adjusted EBITDA | |
$ | 2,109 | | |
$ | 870 | | |
$ | 9,107 | |
| (1) | Amounts
relate to the revaluation of contingent liability associated with a 2018 acquisition. |
| (2) | For
the successor period, amounts relate to professional fees incurred after the Plan Effective Date in relation to the Chapter 11 cases.
For the predecessor period, amounts relate to professional fees related to the Chapter 11 cases that were incurred prior to the date
the Company filed the Chapter 11 cases. |
NINE
ENERGY SERVICE, INC.
RECONCILIATION OF ADJUSTED GROSS PROFIT (LOSS)
(In Thousands)
(Unaudited)
| | |
Successor | | |
Predecessor | |
| | |
Period from
March 6,
2026 through
March 31,
2026 | | |
Period from
January 1,
2026 through
March 5,
2026 | | |
Three Months Ended
December 31,
2025 | |
| Calculation of gross profit: | |
| | |
| | |
| |
| Revenues | |
$ | 41,603 | | |
$ | 88,392 | | |
$ | 132,166 | |
| Cost of revenues (exclusive of depreciation and amortization shown separately below) | |
| 35,600 | | |
| 80,546 | | |
| 111,723 | |
| Depreciation (related to cost of revenues) | |
| 2,162 | | |
| 3,886 | | |
| 5,699 | |
| Amortization of intangibles | |
| 68 | | |
| 1,984 | | |
| 2,796 | |
| Gross profit | |
$ | 3,773 | | |
$ | 1,976 | | |
$ | 11,948 | |
| | |
| | | |
| | | |
| | |
| Adjusted gross profit reconciliation: | |
| | | |
| | | |
| | |
| Gross profit | |
$ | 3,773 | | |
$ | 1,976 | | |
$ | 11,948 | |
| Depreciation (related to cost of revenues) | |
| 2,162 | | |
| 3,886 | | |
| 5,699 | |
| Amortization of intangibles | |
| 68 | | |
| 1,984 | | |
| 2,796 | |
| Adjusted gross profit | |
$ | 6,003 | | |
$ | 7,846 | | |
$ | 20,443 | |
AAdjusted
EBITDA is defined as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for
(i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions,
(iii) loss or gain on revaluation of contingent liabilities, (iv) loss or gain on the extinguishment of debt, (v) loss or gain on the
sale of subsidiaries, (vi) restructuring charges, (vii) stock-based compensation and cash award expense, (viii) loss or gain on sale
of property and equipment, and (ix) other expenses or charges to exclude certain items which we believe are not reflective of ongoing
performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business.
Management believes adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results
of operations because it allows us and them to more effectively evaluate our operating performance and compare the results of our operations
from period to period without regard to our financing methods or capital structure and helps identify underlying trends in our operations
that could otherwise be distorted by the effect of impairments, acquisitions and dispositions and costs that are not reflective of the
ongoing performance of our business. The Company has not provided projected net income or a reconciliation of projected adjusted EBITDA
to projected net income, the closest GAAP financial measure. Management cannot predict with a reasonable degree of accuracy certain of
the components of net income, such as stock-based compensation expense and/or cash award expense, which is affected by factors including
future personnel needs, turnover and retention needs and the future price of our common stock. As such, projected net income, and a reconciliation
of projected adjusted EBITDA to projected net income, are not available without unreasonable efforts.
BAdjusted
gross profit (loss) is defined as revenues less cost of revenues excluding depreciation and amortization. This measure differs from the
GAAP definition of gross profit (loss) because we do not include the impact of depreciation and amortization, which represent non-cash
expenses. Management believes adjusted gross profit (loss) provides useful information to us and our investors regarding our financial
condition and results of operation and helps management evaluate our operating performance by eliminating the impact of depreciation
and amortization, which we do not consider indicative of our core operating performance.
