Delaware (State or Other Jurisdiction of Incorporation) | 001-34867 (Commission File Number) | 75-2233445 (IRS Employer Identification No.) | |
1777 Sentry Parkway West, Gwynedd Hall, Suite 302 Blue Bell, Pennsylvania (Address of Principal Executive Offices) | 19422 (Zip Code) |
99.1 | Press release of UniTek Global Services, Inc., dated March 31, 2014. |
Date: | March 31, 2014 | By: | /s/ Andrew J. Herning |
Andrew J. Herning | |||
Chief Financial Officer |
Exhibit No. | Exhibit Title | |
99.1 | ="Press release of UniTek Global Services, Inc., dated March 31, 2014." |
(1) | Adjusted EBITDA is a key indicator used by our management to evaluate operating performance of our continuing operations and to make decisions regarding compensation and other operational matters as well as by our investors and lenders in evaluating our performance. While Adjusted EBITDA is not intended to replace any presentation included in our consolidated financial statements under generally accepted accounting principles, or GAAP, and should not be considered an alternative to operating performance, we believe this measure is useful to investors in assessing our performance with other companies in our industry. This calculation may differ in method of calculation from similarly titled measures used by other companies or from required calculations pursuant to our loan agreements. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as supplemental information. Adjusted EBITDA is our EBITDA adjusted for discontinued operations, stock-based compensation and other unusual or non-recurring costs, including the costs associated with the restatements of our financial statements during 2013, the investigation conducted by our Audit Committee during the year and related costs. |
(2) | Our management is using net (loss) excluding certain items as an indicator to evaluate the operating performance of the Company excluding the impact of various recent events. While net (loss) excluding certain items is not intended to replace any presentation included in the consolidated financial statements under generally accepted accounting principles, or GAAP, and should not be considered an alternative to operating performance, we believe this measure is useful to investors in assessing our performance by not giving effect to various recent events that have impacted our business. Specifically, these items are (i) (income) loss from discontinued operations, (ii) restructuring charges, (iii) asset impairment, (iv) investigation and related costs, (v) loss on extinguishment of debt and (vi), (income) expense related to contingent consideration. |
(in thousands, except per share amounts) | December 31, 2013 | December 31, 2012 | ||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 1,842 | $ | 3,836 | ||||
Accounts receivable, net of allowances | 73,358 | 102,490 | ||||||
Inventories | 15,187 | 15,266 | ||||||
Other current assets | 10,707 | 7,560 | ||||||
Total current assets | 101,094 | 129,152 | ||||||
Restricted cash | 16,767 | — | ||||||
Property and equipment, net of accumulated depreciation of $49,189 and $41,953 | 14,912 | 26,393 | ||||||
Amortizable intangible assets, net (includes amortizable customer relationships, net, of $32,263 and $38,090) | 33,963 | 42,013 | ||||||
Goodwill | 98,579 | 121,920 | ||||||
Other assets, net | 5,233 | 6,925 | ||||||
Total assets | $ | 270,548 | $ | 326,403 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Current portion of long-term debt | $ | 7,502 | $ | 3,450 | ||||
Current portion of capital lease obligations | 4,849 | 7,688 | ||||||
Accounts payable | 23,906 | 48,845 | ||||||
Accrued insurance | 17,719 | 16,248 | ||||||
Accrued compensation and benefits | 7,965 | 9,766 | ||||||
Other current liabilities | 17,296 | 27,361 | ||||||
Total current liabilities | 79,237 | 113,358 | ||||||
Long-term debt, net of current portion | 174,044 | 153,014 | ||||||
Long-term capital lease obligations, net of current portion | 3,509 | 8,040 | ||||||
Other liabilities | 2,299 | 3,688 | ||||||
Total liabilities | 259,089 | 278,100 | ||||||
Commitments and contingencies | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred Stock, $0.00002 par value (20,000 shares authorized, no shares issued or outstanding) | — | — | ||||||
Common Stock, $0.00002 par value (200,000 shares authorized, 19,039 and 18,736 issued and outstanding) | — | — | ||||||
Additional paid-in capital | $ | 275,274 | $ | 260,077 | ||||
Accumulated other comprehensive income | 89 | 57 | ||||||
Accumulated deficit | (263,904 | ) | (211,831 | ) | ||||
Total stockholders’ equity | 11,459 | 48,303 | ||||||
Total liabilities and stockholders’ equity | $ | 270,548 | $ | 326,403 |
Three Months Ended | Years Ended | ||||||||||||||
(in thousands, except per share amounts) | December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||
Revenues | $ | 106,871 | $ | 120,929 | $ | 471,933 | $ | 437,596 | |||||||
Cost of revenues | 88,782 | 99,137 | 387,376 | 356,794 | |||||||||||
Gross profit | 18,089 | 21,792 | 84,557 | 80,802 | |||||||||||
Selling, general and administrative expenses | 7,024 | 12,867 | 42,223 | 46,357 | |||||||||||
(Income) expense related to contingent consideration | — | 19 | (114 | ) | 10,096 | ||||||||||
Restructuring charges | (78 | ) | 1,613 | 1,071 | 8,013 | ||||||||||
Restatement, investigation and related costs | 1,230 | — | 8,820 | — | |||||||||||
Impairment charges | 23,284 | 14,900 | 24,374 | 14,900 | |||||||||||
Depreciation and amortization | 4,191 | 6,679 | 20,258 | 26,469 | |||||||||||
Operating (loss) | (17,562 | ) | (14,286 | ) | (12,075 | ) | (25,033 | ) | |||||||
Interest expense | 8,862 | 4,833 | 30,454 | 15,329 | |||||||||||
Loss on extinguishment of debt | — | — | 9,247 | — | |||||||||||
Other expense, net | (965 | ) | (98 | ) | (733 | ) | (1,244 | ) | |||||||
(Loss) income from continuing operations before income taxes | (25,459 | ) | (19,021 | ) | (51,043 | ) | (39,118 | ) | |||||||
Income tax (benefit) expense | (1,001 | ) | 38 | (552 | ) | 353 | |||||||||
(Loss) from continuing operations | (24,458 | ) | (19,059 | ) | (50,491 | ) | (39,471 | ) | |||||||
(Loss) from discontinued operations | (930 | ) | (3,587 | ) | (1,582 | ) | (38,259 | ) | |||||||
Net loss | $ | (25,388 | ) | $ | (22,646 | ) | $ | (52,073 | ) | $ | (77,730 | ) | |||
Other comprehensive income or loss: | |||||||||||||||
Foreign currency translation | 3 | 3 | 32 | 39 | |||||||||||
Comprehensive loss | $ | (25,385 | ) | $ | (22,643 | ) | $ | (52,041 | ) | $ | (77,691 | ) | |||
Net loss per share – basic and diluted: | |||||||||||||||
Continuing operations | $ | (1.28 | ) | $ | (1.01 | ) | $ | (2.65 | ) | $ | (2.17 | ) | |||
Discontinued operations | (0.05 | ) | (0.19 | ) | (0.08 | ) | (2.11 | ) | |||||||
Total | $ | (1.33 | ) | $ | (1.20 | ) | $ | (2.73 | ) | $ | (4.28 | ) | |||
Weighted average shares of common stock outstanding – basic and diluted | 19,140 | 18,809 | 19,046 | 18,182 |
Years Ended | |||||||
(in thousands) | December 31, 2013 | December 31, 2012 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (52,073 | ) | $ | (77,730 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Provision for doubtful accounts | 2,792 | 4,819 | |||||
Depreciation and amortization | 20,353 | 29,016 | |||||
Impairment charges | 24,374 | 50,080 | |||||
Loss on extinguishment of debt | 9,247 | — | |||||
Interest and fees added to debt principal | 8,204 | — | |||||
Non-cash interest expense | 2,943 | 2,180 | |||||
Loss on sale of Wireline Group | — | 978 | |||||
(Income) expense related to contingent consideration | (114 | ) | 10,096 | ||||
Stock-based compensation | 2,176 | 4,905 | |||||
Loss (gain) on sale of property and equipment | (940 | ) | (1,365 | ) | |||
Deferred income taxes, net | 84 | (5,602 | ) | ||||
Contingent consideration | — | (1,560 | ) | ||||
Changes in working capital: | |||||||
Accounts receivable | 26,340 | (28,029 | ) | ||||
Inventories | 79 | (2,571 | ) | ||||
Prepaid expenses and other assets | (2,587 | ) | (4,268 | ) | |||
Accounts payable and other liabilities | (30,825 | ) | 28,001 | ||||
Net cash used in operating activities | 10,053 | 8,950 | |||||
Cash flows from investing activities: | |||||||
Acquisition of property and equipment | (2,360 | ) | (5,642 | ) | |||
Proceeds from sale of property and equipment | 2,056 | 2,133 | |||||
Cash paid for acquisition of businesses, net of cash acquired | — | (16,858 | ) | ||||
Proceeds from sale of Wireline Group | 5,435 | ||||||
Net cash used in investing activities | (304 | ) | (14,932 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from new revolving credit facility, net | 21,161 | 11,229 | |||||
Proceeds from term loan facilities | — | 33,750 | |||||
Repayment of term loan facilities | (1,298 | ) | (1,277 | ) | |||
Repayment of capital leases | (8,174 | ) | (11,585 | ) | |||
Deposit of cash to collateralize letters of credit | (24,716 | ) | — | ||||
Release of cash restriction on collateralized letters of credit | 7,949 | — | |||||
Payment of contingent consideration | — | (21,480 | ) | ||||
Payment of financing fees | (6,811 | ) | (1,021 | ) | |||
Other financing activities | (79 | ) | (362 | ) | |||
Net cash (used in) provided by financing activities | (11,968 | ) | 9,254 | ||||
Effect of exchange rate on cash and cash equivalents | 225 | 31 | |||||
Net (decrease) increase in cash and cash equivalents | (1,994 | ) | 3,303 | ||||
Cash and cash equivalents at beginning of period | 3,836 | 533 | |||||
Cash and cash equivalents at end of period | $ | 1,842 | $ | 3,836 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | 20,331 | $ | 13,600 | |||
Income taxes paid | 382 | 879 | |||||
Significant non-cash investing and financing activities: | |||||||
Value of warrants issued to lenders under term loan facilities | $ | 13,066 | $ | — | |||
Fair value of equity paid for acquisition | — | 5,789 | |||||
Acquisition of property and equipment financed by capital leases | 804 | 4,313 |
Three Months Ended | Year Ended | ||||||||||||||
(in thousands) | December 31, 2013 | December 31, 2012 | December 31, 2013 | December 31, 2012 | |||||||||||
Net loss | $ | (25,388 | ) | $ | (22,646 | ) | $ | (52,073 | ) | $ | (77,730 | ) | |||
Loss from discontinued operations | 930 | 3,587 | 1,582 | 38,259 | |||||||||||
Impairment charges | 23,284 | 14,900 | 24,374 | 14,900 | |||||||||||
Restructuring charges | (78 | ) | 1,613 | 1,071 | 8,013 | ||||||||||
Restatement, investigation and related costs | 1,230 | — | 8,820 | — | |||||||||||
Loss on extinguishment of debt | — | — | 9,247 | — | |||||||||||
(Income) expense related to contingent consideration | — | 19 | (114 | ) | 10,096 | ||||||||||
Net income (loss) excluding certain items | (22 | ) | (2,527 | ) | (7,093 | ) | (6,462 | ) | |||||||
Income tax (benefit) expense | (1,001 | ) | 38 | (552 | ) | 353 | |||||||||
Depreciation and amortization | 4,191 | 6,679 | 20,258 | 26,469 | |||||||||||
Interest expense | 8,862 | 4,833 | 30,454 | 15,329 | |||||||||||
Stock-based compensation | 502 | 855 | 2,176 | 4,905 | |||||||||||
Transaction costs | 100 | 90 | 180 | 291 | |||||||||||
Other expense, net | (965 | ) | (98 | ) | (733 | ) | (1,244 | ) | |||||||
Adjusted EBITDA | $ | 11,667 | $ | 9,870 | $ | 44,690 | $ | 39,641 |
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