We define Adjusted Net Income as net (loss)/income excluding restructuring and related severance costs, loss/(gain) on disposal of long-lived assets, settlement costs for non-recurring litigation, equity-based compensation and the tax effect of these adjustments.
We include Adjusted EBITDA and Adjusted Net Income because they are important measures on which our management assesses and believes investors should assess our operating performance. We consider Adjusted EBITDA and Adjusted Net Income each to be an important measure because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis. Adjusted EBITDA has limitations as an analytical tool including: (i) Adjusted EBITDA does not include results from equity-based compensation and (ii) Adjusted EBITDA does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments. Adjusted Net Income has limitations as an analytical tool because it does not include results from equity-based compensation.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. We define Adjusted Net Income per Share as Adjusted Net Income divided by weighted average basic and diluted shares. We included Adjusted EBITDA Margin and Adjusted Net Income per Share because they are important measures on which our management assesses and believes investors should assess our operating performance. We consider Adjusted EBITDA Margin and Adjusted Net Income per Share to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net (loss)/income, the most directly comparable GAAP financial measure:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2024 2023 2024 2023
------ ------
Net
(loss)/income $(6,040) $(1,667) $(3,217) $ 95
Plus
Equity-based
compensation(1) 3,430 4,492 1,522 13,483
Restructuring
and related
severance
costs 1,099 995 5,487 4,300
Depreciation and
amortization 3,003 2,629 8,693 7,479
Loss/(gain) on
disposal of
long-lived
assets -- 4 4 (198)
Litigation
settlements(2) 850 -- 850 --
Interest
expense, net 1,591 1,836 4,638 5,462
Income tax
expense 733 786 894 2,522
------ ------ ------ ------
Adjusted EBITDA $ 4,666 $ 9,075 $18,871 $33,143
====== ====== ====== ======
Adjusted EBITDA
Margin 11.0% 19.4% 13.4% 22.3%
(1) As of the nine months ended September 30, 2024, this
amount contains a cumulative reversal of stock compensation
expense of $10.4 million related to reassessing the
probability of achieving the performance target on
certain of the Company's performance-based stock units.
For further discussion, see Note 6 to the condensed
consolidated financial statements of the Company's
Quarterly Report on Form 10-Q for the Quarterly Period
ended September 30, 2024.
(2) This amount relates to settlement costs for non-recurring
litigation of $0.9 million for the three and nine
months ended September 30, 2024. This amount is accrued
in "Accrued and other current liabilities" as of September
30, 2024. See Note 9 to the condensed consolidated
financial statements included in this Quarterly Report
on Form 10-Q for further discussion.
For the three months ended September 30, 2024 and 2023, pre-opening de novo and relocation costs were $0.7 million and $0.5 million, respectively. For the six months ended September 30, 2024 and 2023, pre-opening de novo and relocation costs were $0.8 million and $3.3 million, respectively.
The following table reconciles Adjusted Net Income and Adjusted Net Income per Share to net income/(loss), the most directly comparable GAAP financial measure:
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
---------- ---------- ---------- ----------
Net (loss)/income $ (6,040) $ (1,667) $ (3,217) $ 95
Plus
Equity-based
compensation(1) 3,430 4,492 1,522 13,483
Restructuring
and related
severance
costs 1,099 995 5,487 4,300
Loss/(gain) on
disposal of
long-lived
assets -- 4 4 (198)
Litigation
settlements(2) 850 -- 850 --
Tax effect of
adjustments (717) (751) 996 (2,079)
---------- ---------- ---------- ----------
Adjusted net
(loss)/income $ (1,378) $ 3,073 $ 5,642 $ 15,601
========== ========== ========== ==========
Adjusted net
(loss)/income per
share of common
stock (3)
Basic $ (0.02) $ 0.05 $ 0.10 $ 0.28
Diluted $ (0.02) $ 0.05 $ 0.10 $ 0.27
Weighted average
shares
outstanding
Basic 57,650,923 56,785,087 57,543,678 56,661,903
Diluted 57,650,923 58,954,829 58,289,022 58,329,685
(1) During the first quarter of fiscal year 2024, the
Company recorded a cumulative reversal of stock compensation
expense of $10.4 million related to reassessing the
probability of achieving the performance target on
certain of the Company's performance-based stock units.
For further discussion, see Note 6 to the condensed
consolidated financial statements of the Company's
Quarterly Report on Form 10-Q for the Quarterly Period
ended September 30, 2024.
(2) This amount relates to settlement costs for non-recurring
litigation of $0.9 million for the three and nine
months ended September 30, 2024. This amount is accrued
in "Accrued and other current liabilities" as of September
30, 2024. See Note 9 to the condensed consolidated
financial statements included in this Quarterly Report
on Form 10-Q for further discussion.
(3) Diluted Adjusted Net Income Per Share is computed
by dividing adjusted net income by the weighted-average
number of shares of common stock outstanding adjusted
for the dilutive effect of all potential shares of
common stock.
Investor Contact
Allison Malkin
ICR, Inc.
airsculpt@icrinc.com
(END) Dow Jones Newswires
November 08, 2024 06:00 ET (11:00 GMT)