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8-K - CURRENT REPORT - EASTERN CO | eml-20201231.htm |
Exhibit
99.1
FOR
IMMEDIATE RELEASE
November
9, 2020
THE
EASTERN COMPANY REPORTS RESULTS FOR THE THIRD QUARTER FISCAL
2020
A
RECOVERY OF SALES TO $65.8 MILLION AND EARNINGS OF $0.48 PER
SHARE
NAUGATUCK,
CT – November 9, 2020 - The Eastern Company
(“Eastern” or the “Company”) (NASDAQ:EML),
an industrial manufacturer of unique engineered solutions serving
niche industrial markets, today announced the results of operations
for the third quarter ended October 3, 2020.
●
Eastern’s
comprehensive program to maintain the health and safety of
employees resulted in no closures and no suspension of operations
related to the Covid-19 pandemic at any of its 21 facilities during
the third quarter 2020.
●
Net sales rebounded
to $65.8 million, an increase of 35% compared to the second quarter
of 2020 and an increase of 8% compared to the third quarter of
2019. The improvement over the 2020 second quarter reflected
strengthening business conditions and customer re-openings in the
2020 third quarter as well as the addition of Hallink Moulds Inc.
(“Hallink”) in August 2020. The improvement over the
prior-year quarter is primarily due to the addition of Big 3
Precision, partially offset by the divestiture of Canadian
Commercial Vehicles Corporation in the second quarter of
2020.
●
Earnings in the
third quarter of 2020 rose to $0.48 per diluted share as a result
of recovering sales and sustained expense control. Third quarter
2020 earnings rebounded from the second quarter 2020 loss of $0.30
per diluted share and more than doubled from the adjusted earnings
per diluted share before one-time items in the second quarter of
2020.
●
Cash flow from
operations was $9.3 million in the third quarter of 2020, nearly
two-and-a-half times cash flow from operations in the third quarter
of 2019, and the Company’s balance sheet continued to
strengthen with $1.3 million in debt reduction during the third
quarter of 2020.
President
and CEO August Vlak commented, “The third quarter of 2020 saw
a remarkable recovery from the severe contraction in the second
quarter of 2020 and demonstrated the positive impact of recent
acquisitions on the strength of our business. Net sales in the
third quarter of 2020 were $65.8 million, an increase of 35% over
the second quarter of 2020. The sequential increase in net sales
was primarily attributable to the re-opening of customers’
operations, especially manufacturers of heavy-duty trucks and
recreational vehicles. In April and May of 2020, many of our
customers closed their operations and stopped receiving shipments
in response to concerns about employee health and safety during the
Covid-19 pandemic. Net sales in the third quarter grew 8% compared
to the third quarter of 2019. The growth in year-over-year net
sales was primarily as the result of the addition of Big 3
Precision, which we acquired in August 2019, as well as the launch
of five new truck mirror programs and continued strong demand from
sporting equipment manufacturers, partially offset by the
divestiture of Canadian Commercial Vehicles
Corporation.”
Mr.
Vlak continued, “Net sales in the third quarter of 2020 also
benefited from the addition of Hallink, which we acquired in August
of this year. The acquisition of Hallink is an important step in
our commitment to expand the product offerings, service capability
and geographic reach of our Big 3 Precision Mold business.
Hallink's complimentary products and capabilities offer significant
potential synergies and can create material incremental value
through shared know-how and strong relationships across an even
broader customer base. We believe this acquisition will be
accretive to fiscal year 2020 earnings, before one-time transaction
costs.”
“The
Company’s earnings of $0.48 per diluted share in the third
quarter of 2020 represent a decrease from $0.67 per diluted share
in the third quarter of 2019, reflecting the continued impact of
the Covid-19 pandemic on economic conditions in several
end-markets. Third quarter 2020 earnings per diluted share
increased from the $0.30 loss per diluted share in the second
quarter of 2020. Earnings in the third quarter 2020 more than
doubled from adjusted earnings in the second quarter of 2020 of
$0.23 per diluted share, eliminating the impact of a $4.0 million
goodwill impairment charge and a one-time restructuring charge, as
reported in the second quarter 2020 press release. The sequential
increase in third quarter 2020 earnings over the second quarter of
2020 is primarily attributable to the recovery in sales and the
numerous actions that we have taken to control expenses. Actions
that we have taken include the suspension of all hiring of salaried
positions, cessation of discretionary spending, temporary reduction
in work hours, initiation of furloughs, and the cancellation of
certain regularly scheduled merit-based salary increases,”
added Mr. Vlak.
Mr.
Vlak continued, “Our balance sheet remains strong. In the
third quarter of 2020, we generated $9.3 million in cash from
operations. Based on our extensive scenario planning, we believe
that Eastern’s balance sheet has ample resources to navigate
the current business environment. As of October 3, 2020, our net
leverage ratio is 2.90x, and our fixed charge coverage ratio is
2.20x – both of which are well within with our bank covenants
of 4.25x and 1.25x, respectively. Our net leverage ratio is based
on adjusted EBITDA, as defined in our credit agreement, for the
twelve months ended October 3, 2020.”
Mr.
Vlak concluded, “These past two quarters have demonstrated
the resilience of our businesses through challenging economic
conditions, and our business is recovering from the impact of the
Covid-19 pandemic on the broader economy. While navigating the
short-term operational and demand challenges, we remain focused on
our vision to build long-term shareholder value. For example, we
closed on the acquisition of Hallink in the third quarter of 2020,
and we started the combination of our Eberhard and Illinois Lock
Company operations, building on the strengths of both organizations
to create a leaner, more innovative, and more competitive business.
The combination will also affect our fourth quarter 2020 reporting.
We currently have three reportable segments, but, starting in the
fourth quarter of 2020, we will report in two segments: Engineered
Solutions and Diversified Products.”
Third Quarter 2020 Segment Results
Sales
in the Industrial Hardware segment in the third quarter of 2020
increased by 39% compared to sales in the second quarter of 2020.
Sales in the Industrial Hardware segment grew by 20% to $47.1
million in the third quarter of 2020 from $39.4 million in the
third quarter of 2019. Excluding Big 3 Precision, Industrial
Hardware sales in the third quarter of 2020 decreased by 7% to
$32.3 million compared to $34.7 million in the same period in 2019,
largely due to the divestiture of Canadian Commercial Vehicles
Corporation in the second quarter of 2020 and continued softness of
sales to distributors. Sales in the Security Products segment in
the third quarter of 2020 increased by 28% compared to the second
quarter of 2020. Sales in the Security Products segment were
essentially flat in the third quarter of 2020 compared to the third
quarter of 2019, as growth in sporting equipment and storage
manufacturing was largely offset by decreases in sales to
point-of-sales, technology equipment and commercial laundry
customers. Sales in the Metal Products segment in the third quarter
of 2020 increased by 16% compared to the second quarter of 2020.
Sales in the Metal Products segment decreased by 37% in the third
quarter of 2020 compared to the third quarter of 2019, primarily
because mining sales in the third quarter were materially impacted
by a reduction in mining activity due to the COVID-19 pandemic and
a decline in natural gas prices.
Operating
profit decreased in all segments in the third quarter of 2020
compared to the third quarter of 2019. Operating profit in the
Industrial Hardware segment was essentially flat in the third
quarter of 2020 compared to same period in 2019. Operating profit
in the Security Products segment declined by 11% in the third
quarter of 2020 compared to same period in 2019. The Metal Products
segment generated an operating loss of $684 thousand in the third
quarter of 2020 compared to an operating profit of $539 thousand in
the third quarter of 2019.
Conference Call and Webcast
The
Eastern Company will host a conference call to discuss its results
for the third quarter of fiscal 2020 and other matters on Tuesday,
November 10, 2020 at 11:00AM Eastern Time. Participants can access
the conference call by phone at (888) 669-0687 (toll free in US
& Canada) or (862) 298-0702 (international). Participants can also join via the
web at
https://www.webcaster4.com/Webcast/Page/1757/38347.
About The Eastern Company
The Eastern Company manages industrial businesses that design,
manufacture and sell unique engineered solutions to niche markets,
focusing on industries that offer long-term macroeconomic growth
opportunities. The Company operates across three reporting segments
-- Industrial Hardware, Security Products and Metal Products --
from locations in the U.S., Canada, Mexico, U.K., Taiwan and China.
More information on the Company can be found at www.easterncompany.com.
Safe Harbor for Forward-Looking Statements
Statements
in this document about our future expectations, beliefs, goals,
plans or prospects constitute forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and the rules, regulations and
releases of the Securities and Exchange Commission. Any statements
that are not statements of historical fact, including statements
containing the words "believes," "intends," "continues,"
"reflects," "plans," "anticipates," "expects,"
“recovering” and similar expressions, should also be
considered to be forward-looking statements. Readers should not
place undue reliance on these forward-looking statements, which are
based upon management's current beliefs and expectations. These
forward-looking statements are subject to risks and uncertainties,
and actual results might differ materially from those discussed in,
or implied by, the forward-looking statements. Among the risks and
uncertainties that could cause actual results or events to differ
materially from those indicated by such forward-looking statements
include, but are not limited to, the impact of the ongoing COVID-19
pandemic, including the impact of shutdowns and other restrictions
imposed in response to COVID-19 on our supply chain and production
and consumer demand for our products, changing customer
preferences, lack of success of new products, loss of customers,
cybersecurity breaches, changes in competition in our markets, and
increased prices for raw materials resulting from tariffs on
imported goods or otherwise. There are important, additional
factors that could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
including those set forth in our reports and filings with the
Securities and Exchange Commission. We undertake no obligation to
update, alter, or otherwise revise any forward-looking statements,
whether written or oral, that may be made from time to time,
whether as a result of new information, future events, or
otherwise.
Non-GAAP Financial Measures
The
non-GAAP financial measures we provide in this report should be
viewed in addition to, and not as an alternative for, results
prepared in accordance U.S. GAAP.
We
provide certain results excluding Big 3 Precision because we
believe these allow for better comparability to the prior-year
period.
To
supplement the consolidated financial statements prepared in
accordance with U.S. GAAP, we have presented Adjusted EPS and
Adjusted EBITDA, which are considered non-GAAP financial measures.
The non-GAAP financial measures presented may differ from similarly
titled non-GAAP financial measures presented by other companies,
and other companies may not define these non-GAAP financial
measures in the same way. These measures are not substitutes for
their comparable GAAP financial measures, such as net sales, net
income (loss), diluted earnings (loss) per common share, or other
measures prescribed by U.S. GAAP, and there are limitations to
using non-GAAP financial measures.
Adjusted
EPS is defined as diluted earnings (loss) per share excluding, when
they occur, the impacts of impairment losses and restructuring
expenses. We believe that adjusted EPS provides important
comparability of underlying operational results, allowing investors
and management to access operating performance on a consistent
basis.
Adjusted
EBITDA is defined as net income (loss) from continuing operations
before interest expense, provision for (benefit from) income taxes,
and depreciation and amortization; in addition to these
adjustments, we exclude, when they occur, the impacts of impairment
losses and restructuring expenses. Adjusted EBITDA is a tool that
can assist management and investors in comparing our performance on
a consistent basis by removing the impact of certain items that
management believes do not directly reflect our underlying
operations.
Investor Relations Contacts
The Eastern Company
August
Vlak or John L. Sullivan III 203-729-2255
THE EASTERN COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months Ended
|
Nine Months Ended
|
||
|
October 3,
2020
|
September
28,
2019
|
October 3,
2020
|
September
28,
2019
|
Net sales
|
$65,805,558
|
$60,692,645
|
$179,964,582
|
$183,015,723
|
Cost
of products sold
|
(51,065,536)
|
(45,754,911)
|
(139,374,508)
|
(139,243,164)
|
Gross
margin
|
14,740,022
|
14,937,734
|
40,590,074
|
43,772,559
|
|
|
|
|
|
Product
development expense
|
(903,023)
|
(825,425)
|
(2,434,638)
|
(5,240,004)
|
Selling
and administrative expenses
|
(9,592,569)
|
(8,391,898)
|
(27,452,391)
|
(24,866,665)
|
Goodwill
impairment loss
|
—
|
—
|
(4,002,548)
|
—
|
Restructuring
costs
|
(8,618)
|
—
|
(287,234)
|
(2,651,877)
|
Operating
profit
|
4,235,812
|
5,720,411
|
6,413,263
|
11,014,013
|
|
|
|
|
|
Interest
expense
|
(647,066)
|
(420,377)
|
(2,081,283)
|
(974,536)
|
Other
income
|
365,703
|
188,623
|
969,024
|
789,371
|
Income before income taxes
|
3,954,449
|
5,488,657
|
5,301,004
|
10,828,848
|
|
|
|
|
|
Income
taxes
|
969,774
|
1,295,575
|
1,309,295
|
2,535,033
|
Net income
|
$2,984,675
|
$4,193,082
|
$3,991,709
|
$8,293,815
|
|
|
|
|
|
Earnings per Share:
|
|
|
|
|
Basic
|
$0.48
|
$0.67
|
$0.64
|
$1.33
|
|
|
|
|
|
Diluted
|
$0.48
|
$0.67
|
$0.64
|
$1.33
|
|
|
|
|
|
Cash dividends per share:
|
$0.11
|
$0.11
|
$0.33
|
$0.33
|
THE EASTERN COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
|
|
|
|
|
|
|
October 3,
2020
|
December
28,
2019
|
|
(unaudited)
|
|
Current Assets
|
|
|
Cash
and cash equivalents
|
$19,551,386
|
$17,996,505
|
Marketable
securities
|
26,564
|
34,305
|
Accounts
receivable, less allowances: 2020 - $726,000;2019 -
$556,000
|
34,174,080
|
37,941,900
|
Inventories
|
49,448,612
|
54,599,266
|
Current
portion of note receivable
|
224,985
|
—
|
Prepaid
expenses and other assets
|
4,453,522
|
4,343,507
|
Total Current Assets
|
107,879,149
|
114,915,483
|
|
|
|
Property, Plant and Equipment
|
88,656,237
|
88,336,243
|
Accumulated depreciation
|
(48,593,969)
|
(46,313,630)
|
|
40,062,268
|
42,022,613
|
|
|
|
Goodwill
|
77,792,863
|
79,518,012
|
Trademarks
|
5,404,283
|
5,404,283
|
Patents and other intangibles net of accumulated
amortization
|
27,955,229
|
26,460,110
|
Long term note receivable, less current portion
|
972,889
|
—
|
Right of Use Assets
|
11,198,742
|
12,342,475
|
|
123,324,006
|
123,724,880
|
|
|
|
TOTAL ASSETS
|
$271,265,423
|
$280,662,976
|
THE EASTERN COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
October 3,
2020
|
December
28,
2019
|
|
(unaudited)
|
|
Current Liabilities
|
|
|
Accounts
payable
|
$17,390,131
|
$19,960,507
|
Accrued
compensation
|
2,505,568
|
3,815,186
|
Other
accrued expenses
|
4,333,038
|
2,967,961
|
Current
portion of lease liability
|
3,309,033
|
2,965,572
|
Current
portion of long-term debt
|
5,812,689
|
5,187,689
|
Total Current Liabilities
|
33,350,459
|
34,896,915
|
|
|
|
Deferred income taxes
|
4,374,343
|
5,270,465
|
Other long-term liabilities
|
2,465,261
|
2,465,261
|
Lease liability
|
7,939,111
|
9,376,903
|
Long-term debt, less current portion
|
89,105,682
|
93,577,544
|
Accrued postretirement benefits
|
995,021
|
1,007,146
|
Accrued pension cost
|
26,947,804
|
28,631,485
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
Voting
Preferred Stock, no par value:
|
|
|
Authorized
and unissued: 1,000,000 shares
|
|
|
Nonvoting
Preferred Stock, no par value:
|
|
|
Authorized
and unissued: 1,000,000 shares
|
|
|
Common
Stock, no par value, Authorized: 50,000,000 shares
|
31,304,047
|
30,651,815
|
Issued:
8,992,641 shares in 2020 and 8,975,434 shares in 2019
|
|
|
Outstanding:
6,242,912 shares in 2020 and 6,240,705 shares in 2019
|
|
|
Treasury
Stock: 2,749,729 shares in 2020 and 2,734,729 shares in
2019
|
(20,537,962)
|
(20,169,098)
|
Retained
earnings
|
121,764,570
|
120,189,111
|
Accumulated
other comprehensive loss:
|
|
|
Foreign
currency translation
|
(2,286,738)
|
(2,037,952)
|
Unrealized
gain on marketable securities, net of tax
|
(6,307)
|
(471)
|
Unrealized
gain (loss) on interest rate swap, net of tax
|
(1,567,117)
|
167,489
|
Unrecognized
net pension and postretirement benefit costs, net of
tax
|
(22,582,751)
|
(23,363,637)
|
Accumulated
other comprehensive loss
|
(26,442,913)
|
(25,234,571)
|
Total Shareholders’ Equity
|
106,087,742
|
105,437,257
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$271,265,423
|
$280,662,976
|
THE EASTERN COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Nine Months Ended
|
|
|
October 3,
2020
|
September
28,
2019
|
Operating Activities
|
|
|
Net
income
|
$3,991,709
|
$8,293,815
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
Depreciation
and amortization
|
6,144,226
|
3,807,479
|
Unrecognized
pension and postretirement benefits
|
(1,066,777)
|
134,199
|
Goodwill
impairment loss
|
4,002,548
|
—
|
(Gain)
loss on sale of equipment and other assets
|
(414,078)
|
1,727,788
|
Provision
for doubtful accounts
|
156,286
|
51,711
|
Stock
compensation expense
|
652,232
|
445,338
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
3,270,585
|
359,606
|
Inventories
|
4,668,705
|
3,217,736
|
Prepaid
expenses and other
|
(93,693)
|
762,646
|
Other
assets
|
753,170
|
(589,448)
|
Accounts
payable
|
(2,600,966)
|
(1,815,309)
|
Accrued
compensation
|
(1,262,577)
|
(1,680,668)
|
Other
accrued expenses
|
(1,511,729)
|
(2,202,622)
|
Net cash provided by operating activities
|
16,689,641
|
12,512,271
|
|
|
|
Investing Activities
|
|
|
Marketable
securities
|
7,741
|
(33,759)
|
Business
disposition
|
1,378,602
|
—
|
Business
acquisition, net of cash acquired
|
(7,172,868)
|
(81,155,753)
|
Proceeds
from sale of equipment
|
445,211
|
—
|
Purchases
of property, plant and equipment
|
(1,976,370)
|
(1,896,128)
|
Net cash provided by/used in investing activities
|
(7,317,684)
|
(83,085,640)
|
|
|
|
Financing Activities
|
|
|
Proceeds
from long-term borrowings
|
—
|
100,000,000
|
Principal
payments on long-term debt
|
(3,846,861)
|
(29,009,769)
|
Issuance
of Note Receivable
|
(1,251,943)
|
—
|
Payments
Received from Note Receivable
|
54,069
|
—
|
Purchase
common stock for treasury
|
(368,864)
|
—
|
Dividends
paid
|
(2,058,943)
|
(2,058,697)
|
Net cash used in financing activities
|
(7,472,542)
|
68,931,534
|
|
|
|
Effect of exchange rate changes on cash
|
(344,534)
|
(300,602)
|
Net change in cash and cash equivalents
|
1,554,881
|
(1,942,437)
|
|
|
|
Cash
and cash equivalents at beginning of period
|
17,996,505
|
13,925,765
|
Cash and cash equivalents at end of period
|
$19,551,386
|
$11,983,328
|
Reconciliation of expenses from GAAP to Non-GAAP EPS
calculation
For the Three and Nine Months ended October 3, 2020 and September
28, 2019
|
Three
Months Ended
|
Nine
Months Ended
|
||
|
October
3,
2020
|
September
28,
2019
|
October
3,
2020
|
September
28,
2019
|
|
|
|
|
|
Net
Income as reported per generally accepted accounting principles
(GAAP)
|
$2,984,675
|
$4,193,082
|
$3,991,709
|
$8,293,815
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share as reported under generally accepted accounting
principles (GAAP):
|
|
|
|
|
Basic
|
$0.48
|
$0.67
|
$0.64
|
$1.33
|
Diluted
|
$0.48
|
$0.67
|
$0.64
|
$1.33
|
|
|
|
|
|
Adjustments
for one-time expenses
|
|
|
|
|
Goodwill
impairment loss, net of tax
|
$-
|
$-
|
$(2,993,906)A
|
$-
|
|
|
|
|
|
Transaction
expenses
|
(183,616)E
|
(765,543)G
|
(203,682)E
|
(1,183,943)G
|
|
|
|
|
|
Factory
relocation, net of tax
|
(187,688)C
|
-
|
(187,688)C
|
-
|
Restructuring
costs, net of tax
|
$(6,446)B
|
$-
|
$(214,851)B
|
$(2,036,642)D,F
|
|
$(377,750)
|
$(765,543)
|
$(3,600,127)
|
$(3,220,585)
|
|
|
|
|
|
Adjustment
to Net Income (related to one time expenses);
(Non-GAAP)
|
$3,362,425
|
$4,958,625
|
$7,591,836
|
$11,514,400
|
|
|
|
|
|
|
|
|
|
|
Adjustment
to Earnings per share (related to one time expenses);
(Non-GAAP)
|
|
|
|
|
Basic
|
$0.54
|
$0.80
|
$1.22
|
$1.85
|
Diluted
|
$0.54
|
$0.79
|
$1.22
|
$1.84
|
A) Goodwill impairment
B) Cost incurred on disposition of Canadian Commercial
Vehicles
C) Cost incurred on relocation of factory in Reynosa,
Mexico
D) Cost incurred on the relocation of Composite Panels
Technology
E) Cost incurred in the acquisition of Hallink RSB,
Inc.
F) Costs incurred in the closure of Road IQ in Bellingham,
WA
G) Costs incurred on the acquisition of Big 3
Precision
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles in the
United States
(“GAAP”), we disclose certain non-GAAP financial
measures including adjusted net income and adjusted earnings per
diluted share. Adjusted net
income and adjusted earnings per diluted share exclude one time
related expenses. These measures are not in accordance with
GAAP.
Management uses such measures to evaluate performance period over
period, to analyze the underlying trends in our
business
including our business segments, to assess our performance relative
to our competitors, and to establish operational goals and
forecasts that are used in allocating resources. These financial
measures should not be considered in isolation from, or as a
replacement for, GAAP financial measures.
We believe that presenting non-GAAP financial measures in addition
to GAAP financial measures provides investors greater transparency
to the information used by our management for its financial and
operational decision-making. We further believe that providing this
information better enables our investors to understand our
operating performance and to evaluate the methodology used by
management to evaluate and measure such performance.
Reconciliation of expenses from GAAP to Non-GAAP EBITDA
calculation
For the Three and Nine Months ended October 3, 2020 and September
28, 2019
|
Three Months
Ended
|
Nine Months
Ended
|
||
|
October
3,
2020
|
September
28,
2019
|
October
3,
2020
|
September
28,
2019
|
|
|
|
|
|
Net
Income/(loss) as reported per generally accepted accounting
principles (GAAP)
|
$2,984,675
|
$4,193,082
|
$3,991,709
|
$8,293,815
|
|
|
|
|
|
Interest
expense
|
647,066
|
420,377
|
2,081,283
|
974,536
|
|
|
|
|
|
Provision
for/(benefit from) income taxes
|
969,774
|
1,295,575
|
1,309,295
|
2,535,033
|
|
|
|
|
|
Depreciation
and amortization
|
2,093,976
|
1,416,165
|
6,144,226
|
3,807,479
|
|
|
|
|
|
Goodwill
impairment loss
|
-
|
-
|
4,002,548A
|
-
|
|
|
|
|
|
Factory
relocation
|
250,920C
|
-
|
250,920C
|
-
|
|
|
|
|
|
Restructuring
costs
|
8,618B
|
-
|
287,234B
|
2,651,877 D,F
|
|
|
|
|
|
Transaction
costs
|
183,616E
|
765,543G
|
203,682E
|
1,183,943G
|
|
|
|
|
|
Adjusted
EBITDA
|
$7,138,645
|
$8,090,742
|
$18,270,897
|
$19,446,683
|
A) Goodwill impairment
B) Cost incurred on disposition of Canadian Commercial
Vehicles
C) Cost incurred on relocation of factory in Reynosa,
Mexico
D) Cost incurred on the relocation of Composite Panels
Technology
E) Cost incurred in the acquisition of Hallink RSB,
Inc.
F) Costs incurred in the closure of Road IQ in Bellingham,
WA
G) Costs incurred in the acquisition of Big 3
Precision
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles in the
United States (“GAAP”), we disclose certain non-GAAP
financial measures including adjusted net income and adjusted
earnings per diluted share. Adjusted net income and adjusted
earnings per diluted share exclude one time related expenses. These
measures are not in accordance with GAAP.
Management uses such measures to evaluate performance period over
period, to analyze the underlying trends in our
business
including our business segments, to assess our performance relative
to our competitors, and to establish operational goals and
forecasts that are used in allocating resources. These financial
measures should not be considered in isolation from, or as a
replacement for, GAAP financial measures.
We believe that presenting non-GAAP financial measures in addition
to GAAP financial measures provides investors greater transparency
to the information used by our management for its financial and
operational decision-making. We further believe that providing this
information better enables our investors to understand our
operating performance and to evaluate the methodology used by
management to evaluate and measure such performance.