Pennsylvania
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000-22920
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11-2948749
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( State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer
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of incorporation)
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Identification No.)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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99.1
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Press Release, dated November 5, 2014
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NUMEREX CORP
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Date: November 5, 2014
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/s/ Richard A. Flynt
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Richard A. Flynt
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Chief Financial Officer
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99.1
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Press Release, dated November 5, 2014
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·
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Total Net Revenues up 16.9% to $25.7 million
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·
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Subscription and Support revenues up 29.3% to $17.4 million
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·
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Gross Margin on subscriptions and support revenues was 59.8% compared to 58.3%
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·
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GAAP income from continuing operations, net of income taxes was $0.3 million
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·
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Adjusted EBITDA increased 32.3% to $3.3 million
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·
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Total Net Revenues up 24% to $69 million
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·
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Subscription and Support revenues up 25.3% to $47.5 million
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·
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Gross Margin on subscriptions and support revenues was 60.8% compared to 56.4%
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·
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GAAP income from continuing operations, net of income taxes was $1.6 million, up 61.9%
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·
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Adjusted EBITDA increased 64.4% to $9.1 million, reflecting a margin of 13.2%
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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Non-GAAP Measures*
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2014
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2013
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2014
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2013
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Adjusted EBITDA ($ in millions)
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$ | 3.3 | $ | 2.5 | $ | 9.1 | $ | 5.5 | ||||||||
Adjusted EBITDA as a percent of total revenue
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13.0 | % | 11.5 | % | 13.2 | % | 9.9 | % | ||||||||
Adjusted EBITDA per diluted share
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$ | 0.17 | $ | 0.13 | $ | 0.47 | $ | 0.29 | ||||||||
Net new subscriptions (units)
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31,000 | 135,000 | 207,000 | 422,000 | ||||||||||||
Total subscriptions (units)
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2,416,000 | 2,146,000 | 2,416,000 | 2,146,000 | ||||||||||||
______________
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* Refer to the section of this press release entitled "Non-GAAP (Adjusted) Financial Measures" for a discussion of
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these non-GAAP items and a reconciliation to the most comparable GAAP measure.
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GAAP Measures
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Subscription and support revenues ($ in millions)
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$ | 17.4 | $ | 13.5 | $ | 47.5 | $ | 37.9 | ||||||||
Gross margin -- subscription and support revenues
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59.7 | % | 58.3 | % | 60.8 | % | 56.4 | % | ||||||||
Income from continuing operations, net of income
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taxes ($ in millions)
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$ | 0.3 | $ | 0.6 | $ | 1.6 | $ | 1.0 | ||||||||
Diluted EPS from continuing operations
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$ | 0.01 | $ | 0.03 | $ | 0.09 | $ | 0.05 | ||||||||
·
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Sales and marketing expenses were $3.0 million compared to $2.6 million. The increase was due to our recent acquisition and the addition of sales and marketing personnel to drive and support growth.
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General and administrative expenses were $3.4 million as compared to $3.2 million. The increase was primarily personnel related.
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Engineering and development costs increased to $2.4 million from $1.3 million due to our recent merger with Omnilink and new product and project initiatives.
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Operating expenses include depreciation and amortization charges of $1.6 million compared to $1.2 million.
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NUMEREX CORP. AND SUBSIDIARIES
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share data)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2014
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2013
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2014
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2013
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Net sales:
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Subscription and support revenues
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$ | 17,429 | $ | 13,482 | $ | 47,530 | $ | 37,932 | ||||||||
Embedded devices and hardware
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8,234 | 8,469 | 21,483 | 17,727 | ||||||||||||
Total net sales
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25,663 | 21,951 | 69,013 | 55,659 | ||||||||||||
Cost of sales, exclusive of a portion of
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depreciation and amortization shown below:
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Subscription and support revenues
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7,011 | 5,622 | 18,647 | 16,531 | ||||||||||||
Embedded devices and hardware
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7,365 | 7,348 | 18,517 | 16,575 | ||||||||||||
Gross profit
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11,287 | 8,981 | 31,849 | 22,553 | ||||||||||||
Gross margin
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44.0 | % | 40.9 | % | 46.1 | % | 40.5 | % | ||||||||
Operating expenses:
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Sales and marketing
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3,029 | 2,636 | 9,066 | 6,907 | ||||||||||||
General and administrative
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3,429 | 3,174 | 11,207 | 9,828 | ||||||||||||
Engineering and development
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2,430 | 1,317 | 5,794 | 3,626 | ||||||||||||
Depreciation and amortization
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1,597 | 1,209 | 4,570 | 3,485 | ||||||||||||
Operating (loss) income
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802 | 645 | 1,212 | (1,293 | ) | |||||||||||
Interest expense
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278 | 75 | 564 | 220 | ||||||||||||
Other (income) expense, net
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(97 | ) | 30 | (1,272 | ) | 25 | ||||||||||
Income (loss) from continuing operations before income taxes
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621 | 540 | 1,920 | (1,538 | ) | |||||||||||
Income tax expense (benefit)
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358 | (35 | ) | 283 | (2,549 | ) | ||||||||||
Income from continuing operations, net of income taxes
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263 | 575 | 1,637 | 1,011 | ||||||||||||
Loss from discontinued operations, net of income taxes
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- | - | (492 | ) | (1,437 | ) | ||||||||||
Net income (loss)
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$ | 263 | $ | 583 | $ | 1,145 | $ | (426 | ) | |||||||
Basic earnings per share:
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Income from continuing operations
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$ | 0.01 | $ | 0.03 | $ | 0.09 | $ | 0.06 | ||||||||
Loss from discontinued operations
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0.00 | 0.00 | (0.03 | ) | (0.08 | ) | ||||||||||
Net income (loss)
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$ | 0.01 | $ | 0.03 | $ | 0.06 | $ | (0.02 | ) | |||||||
Diluted earnings per share:
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Income from continuing operations
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$ | 0.01 | $ | 0.03 | $ | 0.09 | $ | 0.05 | ||||||||
Loss from discontinued operations
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0.00 | 0.00 | (0.03 | ) | (0.07 | ) | ||||||||||
Net income (loss)
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$ | 0.01 | $ | 0.03 | $ | 0.05 | $ | (0.02 | ) | |||||||
Weighted average shares outstanding used in computing
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earnings per share:
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Basic
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18,956 | 18,565 | 18,900 | 18,193 | ||||||||||||
Diluted
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19,263 | 19,014 | 19,253 | 18,746 | ||||||||||||
NUMEREX CORP. AND SUBSIDIARIES
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands)
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September 30,
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December 31,
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2014
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2013
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$ | 16,357 | $ | 25,603 | ||||
Accounts receivable, less allowance for doubtful accounts of $1,495 and $674
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13,018 | 9,385 | ||||||
Financing receivables, current
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1,568 | 1,223 | ||||||
Inventory, net of reserve for obsolescence
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8,250 | 8,315 | ||||||
Prepaid expenses and other current assets
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1,704 | 1,833 | ||||||
Deferred tax assets, current
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2,742 | 2,742 | ||||||
Assets of discontinued operations
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- | 840 | ||||||
TOTAL CURRENT ASSETS
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43,639 | 49,941 | ||||||
Financing receivables, less current portion
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3,133 | 3,029 | ||||||
Property and equipment, net of accumulated depreciation and amortization
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of $3,257 and $1,879
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4,503 | 3,125 | ||||||
Software, net of accumulated amortization of $5,696 and $3,706
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6,255 | 6,381 | ||||||
Other intangibles, net of accumulated amortization of $14,623 and $13,189
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19,518 | 5,617 | ||||||
Goodwill
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48,340 | 26,941 | ||||||
Deferred tax assets, less current portion
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2,596 | 3,958 | ||||||
Other assets
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2,210 | 2,298 | ||||||
TOTAL ASSETS
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$ | 130,194 | $ | 101,290 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$ | 11,531 | $ | 9,953 | ||||
Accrued expenses and other current liabilities
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2,872 | 2,004 | ||||||
Deferred revenues
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1,993 | 1,894 | ||||||
Current portion of long-term debt
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3,758 | 633 | ||||||
Obligations under capital leases
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233 | 306 | ||||||
Liabilities of discontinued operations
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- | 207 | ||||||
TOTAL CURRENT LIABILITIES
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20,387 | 14,997 | ||||||
Long-term debt, less current portion
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20,625 | 475 | ||||||
Obligations under capital lease, less current portion
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- | 148 | ||||||
Other liabilities
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1,590 | 1,693 | ||||||
TOTAL LIABILITIES
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42,602 | 17,313 | ||||||
COMMITMENTS AND CONTINGENCIES
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SHAREHOLDERS’ EQUITY
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Preferred stock, no par value; authorized 3,000; none issued
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- | - | ||||||
Class A common stock, no par value; 30,000 authorized;
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20,269 and 20,069 issued; 18,969 and 18,828 outstanding
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- | - | ||||||
Class B common stock, no par value; authorized 5,000; none issued
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- | - | ||||||
Additional paid-in capital
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98,371 | 95,777 | ||||||
Treasury stock, at cost, 1,300 and 1,241 shares
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(5,352 | ) | (5,238 | ) | ||||
Accumulated other comprehensive loss
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(34 | ) | (24 | ) | ||||
Accumulated deficit
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(5,393 | ) | (6,538 | ) | ||||
TOTAL SHAREHOLDERS' EQUITY
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87,592 | 83,977 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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$ | 130,194 | $ | 101,290 |
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●
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EBITDA is income from continuing operations, net of income taxes, plus depreciation and amortization, interest and other non-operating expenses and income tax expense. Any other non-operating income, net of income taxes is subtracted from income from continuing operations, net of income taxes.
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●
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Adjusted EBITDA is EBITDA less non-cash equity-based compensation and infrequent or unusual items further described below.
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●
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EBITDA and Adjusted EBITDA per diluted share is EBITDA and Adjusted EBITDA divided by weighted average diluted shares outstanding.
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●
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EBITDA is widely used by investors to measure a company’s operating performance without regard to items such as interest expense, income taxes, depreciation and amortization, which can vary substantially from company-to-company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
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●
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Investors commonly adjust EBITDA information to eliminate the effect of equity-based compensation and other unusual or infrequently occurring items which vary widely from company-to-company and impair comparability.
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as a measure of operating performance to assist in comparing performance from period-to-period on a consistent basis
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●
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as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; and
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●
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in communications with the board of directors, analysts and investors concerning our financial performance.
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2014
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2013
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2014
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2013
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EBITDA and Adjusted EBITDA (non-GAAP)
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Income from continuing operations, net of income taxes (GAAP)
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$ | 263 | $ | 575 | $ | 1,637 | $ | 1,011 | ||||||||
Depreciation and amortization expense
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1,789 | 1,280 | 4,969 | 3,716 | ||||||||||||
Interest expense and other non-operating (income) expense, net
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181 | 105 | (708 | ) | 245 | |||||||||||
Income tax (expense benefit)
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358 | (35 | ) | 283 | (2,549 | ) | ||||||||||
EBITDA (non-GAAP)
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2,591 | 1,925 | 6,181 | 2,423 | ||||||||||||
Equity-based compensation expense
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694 | 589 | 1,833 | 1,323 | ||||||||||||
Infrequent or unusual items
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41 | - | 1,064 | 1,775 | ||||||||||||
Adjusted EBITDA (non-GAAP)
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$ | 3,326 | $ | 2,514 | $ | 9,078 | $ | 5,521 | ||||||||
Income from continuing operations, net of income taxes,
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per diluted share (GAAP)
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$ | 0.01 | $ | 0.03 | $ | 0.09 | $ | 0.05 | ||||||||
EBITDA per diluted share (non-GAAP)
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0.13 | 0.10 | 0.32 | 0.13 | ||||||||||||
Adjusted EBITDA per diluted share (non-GAAP)
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0.17 | 0.13 | 0.47 | 0.29 | ||||||||||||
Weighted average shares outstanding used in computing
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diluted earnings per share
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19,263 | 19,014 | 19,253 | 18,746 | ||||||||||||