EX-99.2 3 dex992.htm RECONCILIATION TABLES FOR INVESTOR PRESENTATIONS Reconciliation Tables for Investor Presentations

Exhibit 99.2

 

ICT Group, Inc.

Reconciliation Tables for Investor Presentation on January 10, 2006

 

About Non-GAAP Financial Measures

 

Management uses certain non-GAAP measures of financial performance. These non-GAAP measures include adjusted net income, EBITDA, adjusted EBITDA, adjusted operating income, adjusted diluted earnings per share and net debt. Net debt is a metric used to provide an overall assessment of the Company’s debt situation and is calculated by taking amounts outstanding under its Credit Facility ($38 million at September 30, 2005) less cash and cash equivalents ($10 million at September 30, 2005). Reconciliation tables for the other non-GAAP measures are presented below.

 

Adjusted Net Income and Adjusted Diluted Earnings per Share

 

The following table shows a reconciliation of net income to adjusted net income. The calculation of adjusted diluted earnings per share is also shown. Management uses these measurements to evaluate the profitability of the business. The adjusted net income and adjusted diluted earnings per share excludes the effects of litigation costs (recoveries) and restructuring charges (reversals) as well as certain tax adjustments.

 

(in thousands)                                                             
(unaudited)                                                             

For the fiscal quarters ended:

    12/31/2003
     3/31/2004
     6/30/2004
     9/30/2004
     LTM
Total
     12/31/2004
     3/31/2005
     6/30/2005
     9/30/2005
     LTM
Total
  

Net income (loss), as reported

    $ 2,680     $ 224     $ 350     $ 276     $ 3,530     $ (3,543 )   $ 1,064     $ 1,744     $ 5,472     $ 4,737  

Addback:

                                                                                 

Litigation costs (recoveries)

      (3,001 )     560       445       887     $ (1,109 )     8,446       477       91       (4,064 )   $ 4,950  

Restructuring charge (reversal)

      (94 )                           $ (94 )                                        

Tax effect of litigation costs (recoveries), restructuring charge (reversals) and income tax adjustments

      1,399       (184 )     (146 )     (293 )   $ 776       (2,995 )     (143 )     (27 )     873     $ (2,292 )
    
 
 
 
 
 
 
 
 
 

Adjusted net income

    $ 984     $ 600     $ 649     $ 870     $ 3,103     $ 1,908     $ 1,398     $ 1,808     $ 2,281     $ 7,395  

Shares used to compute diluted earnings per share

      12,938       12,953       12,918       12,849               12,873       12,911       12,897       12,981          
    
 
 
 
 
 
 
 
 
 

Adjusted diluted earnings per share

    $ 0.08     $ 0.05     $ 0.05     $ 0.07     $ 0.24     $ 0.15     $ 0.11     $ 0.14     $ 0.18     $ 0.57  
    
 
 
 
 
 
 
 
 
 

 

Adjusted Operating Income

 

The following table shows a reconciliation of net income to operating income and adjusted operating income. Management uses these measurements to evaluate the profitability of the business. The adjusted income excludes the effects of litigation costs (recoveries) and restructuring charges (reversals).

 

(in thousands)                                                      
(unaudited)                                                      

For the fiscal quarters ended:

    12/31/2003
     3/31/2004
    6/30/2004
    9/30/2004
    LTM
Total
     12/31/2004
     3/31/2005
    6/30/2005
    9/30/2005
     LTM
Total

Net income (loss), as reported

    $ 2,680     $ 224    $ 350    $ 276    $ 3,530     $ (3,543 )   $ 1,064    $ 1,744    $ 5,472     $ 4,737

Addback:

                                                                          

Income tax provision (benefit)

      1,320       111      173      136      1,740       (2,054 )     456      748      1,632       782

Interest expense, net

      337       294      325      451      1,407       524       487      659      656       2,326
    
 
  
  
  
 
 
  
  
 

Operating income

    $ 4,337     $ 629    $ 848    $ 863    $ 6,677     $ (5,073 )   $ 2,007    $ 3,151    $ 7,760     $ 7,845

Addback:

                                                                          

Litigation costs (recoveries)

      (3,001 )     560      445      887      (1,109 )     8,446       477      91      (4,064 )     4,950

Restructuring charge (reversal)

      (94 )     —        —        —        (94 )     —         —        —        —          
    
 
  
  
  
 
 
  
  
 

Adjusted operating income

    $ 1,242     $ 1,189    $ 1,293    $ 1,750    $ 5,474     $ 3,373     $ 2,484    $ 3,242    $ 3,696     $ 12,795
    
 
  
  
  
 
 
  
  
 

EBITDA and Adjusted EBITDA

 

EBITDA is commonly defined as Earnings before Interest, Taxes, Depreciation and Amortization. Management believes that Adjusted EBITDA is a meaningful indicator of profitability for the business. Adjusted EBITDA excludes from EBITDA the effects of special charges (reversals).

 

Adjusted EBITDA, as presented, is supplemental information and is not presented and should not be considered in isolation, or as a substitute for ICT’s consolidated financial information presented under GAAP. There are potentially different definitions of EBITDA and ICT’s definition may differ from other definitions.

 

The reconciliation of net income to EBITDA and Adjusted EBITDA is as follows:

 

(in thousands)                                               

For fiscal years:

    1994
    1995
    1996
     1997
     1998
    1999
    2000
    2001
    2002

Net income (loss), as reported

    $ 898    $ 1,570    $ (7,517 )   $ 2,672     $ 2,427    $ 4,745    $ 6,729    $ 7,978    $ 2,968

Addback:

                                                                 

Interest expense, net

      511      833      180       (398 )     406      801      1,207      1,079      828

Income tax provision or benefit

      —        —        (2,998 )     1,708       1,549      3,033      4,302      4,506      1,398

Depreciation and Amortization

      1,243      1,877      2,792       3,560       5,667      8,004      9,621      11,279      15,443
    
  
  
 
 
  
  
  
  

EBITDA

    $ 2,652    $ 4,280    $ (7,543 )   $ 7,542     $ 10,049    $ 16,583    $ 21,859    $ 24,842    $ 20,637
    
  
  
 
 
  
  
  
  

Addback:

                                                                 

Charge related to stock compensation at time of IPO

      —        —        12,690       —         —        —        —        —        —  

Restructuring charge (reversals)

      —        —        —         —         —        —        —        —        8,894

Client claim

      —        —        —         —         —        —        —        —        1,409

Litigation costs

      —        —        —         —         —        —        —        —        1,673

Writeoff of deferred offering costs

      —        —        —         —         —        —        —        —        581
    
  
  
 
 
  
  
  
  

Adjusted EBITDA

    $ 2,652    $ 4,280    $ 5,147     $ 7,542     $ 10,049    $ 16,583    $ 21,859    $ 24,842    $ 33,194
    
  
  
 
 
  
  
  
  

 

(in thousands)             

For fiscal years:

    2003
     2004
  

Net income (loss), as reported

    $ (1,144 )   $ (2,693 )

Addback:

                 

Interest expense, net

      1,183       1,594  

Income tax provision or benefit

      (856 )     (1,634 )

Depreciation and Amortization

      17,855       17,822  
    
 

EBITDA

    $ 17,038     $ 15,089  
    
 

Addback:

                 

Charge related to stock compensation at time of IPO

      —         —    

Restructuring charge (reversals)

      (686 )     —    

Client claim

      —         —    

Litigation costs

      4,693       10,338  

Writeoff of deferred offering costs

      —         —    
    
 

Adjusted EBITDA

    $ 21,045     $ 25,427  
    
 

 

(in thousands)                       

For fiscal quarters ended:

    12/31/04
     3/31/05
    6/30/05
    9/30/05
  

Net income (loss), as reported

    $ (3,543 )     1,064    $ 1,744    $ 5,472  

Addback:

                               

Interest expense, net

      524       487      659      656  

Income tax provision or (benefit)

      (2,054 )     456      748      1,632  

Depreciation and Amortization

      4,975       5,078      5,073      5,274  
    
 
  
  

EBITDA

    $ (98 )   $ 7,085    $ 8,224    $ 13,034  
    
 
  
  

Addback:

                               

Litigation costs (recoveries)

      8,446       477      91      (4,064 )
    
 
  
  

Adjusted EBITDA

    $ 8,348     $ 7,562    $ 8,315    $ 8,970  
    
 
  
  

LTM Adjusted EBITDA

                          $ 33,195