Reconciliation of Non-GAAP Measures

Transcription

1 Earnings Before Interest, Taxes, Depreciation, Amortization and Acquisition & Integration Expenses Net income applicable to TRC Companies, Inc.'s common shareholders $ 3,998 $ 3,937 Interest expense Interest income (286) (137) Provision for income taxes 2,473 2,439 Depreciation and amortization 4,371 2,780 Net loss applicable to noncontrolling interest 10 (2) EBITDA 11,407 9,478 Less: Acquisition and integration expenses - 1,240 Adjusted EBITDA 11,407 10,718 Less: Stock-based compensation expense 2,286 1,511 Less: Other Adjustments 450 (18) Consolidated Adjusted EBITDA Under the Citizens Credit Agreement $ 14,143 $ 12,211 Gross Margin and Gross Margin % Net service revenue $ 127,356 $ 111,382 Cost of services 105,613 93,676 Gross Margin $ 21,743 $ 17,706 Gross Margin % 17.1% 15.9% 1

2 Earnings Before Interest, Taxes, Depreciation, Amortization and Acquisition & Integration Expenses Net income applicable to TRC Companies, Inc.'s common shareholders $ 7,637 $ 8,429 Interest expense 1, Interest income (564) (137) Provision for income taxes 4,204 5,596 Depreciation and amortization 8,875 5,044 Net loss applicable to noncontrolling interest 30 (6) EBITDA 21,868 19,415 Less: Acquisition and integration expenses - 2,118 Adjusted EBITDA 21,868 21,533 Less: Stock-based compensation expense 3,743 2,780 Less: Other Adjustments (23) (44) Consolidated Adjusted EBITDA Under the Citizens Credit Agreement $ 25,588 $ 24,269 Gross Margin and Gross Margin % Net service revenue $ 251,661 $ 211,545 Cost of services 209, ,660 Gross Margin $ 42,372 $ 34,885 Gross Margin % 16.8% 16.5% 2

3 Free Cash Flow Net cash provided by operating activities $ 21,403 $ (952) Additions to property and equipment (1,037) (1,974) Free Cash Flow $ 20,366 $ (2,926) Free Cash Flow Net cash provided by operating activities $ 18,217 $ 13,436 Additions to property and equipment (2,662) (4,013) Free Cash Flow $ 15,555 $ 9,423 3

4 Adjusted Operating Income Operating income $ 7,036 $ 6,698 Acquisition and integration expenses - 1,240 Adjusted Operating Income $ 7,036 $ 7,938 Adjusted Net Income Applicable to TRC Companies, Inc.'s Common Shareholders Net income applicable to TRC Companies, Inc.'s common shareholders $ 3,998 $ 3,937 Acquisition and integration expenses - 1,240 Tax effect of acquisition and integration expenses - (475) Adjusted Net Income Applicable to TRC Companies, Inc's Common Shareholders $ 3,998 $ 4,702 Adjusted Diluted Earnings per Common Share Net income applicable to TRC Companies, Inc.'s common shareholders $ 3,998 $ 3,937 Acquisition and integration expenses - 1,240 Tax effect of acquisition and integration expenses - (475) Adjusted Net Income Applicable to TRC Companies, Inc's Common Shareholders $ 3,998 $ 4,702 Diluted shares outstanding (as disclosed) 31,966 31,369 Add back for dilutive shares - - Adjusted diluted shares outstanding 31,966 31,369 Adjusted Diluted Earnings per Common Share $ 0.13 $

5 Adjusted Operating Income Operating income $ 12,993 $ 14,371 Acquisition and integration expenses - 2,118 Adjusted Operating Income $ 12,993 $ 16,489 Adjusted Net Income Applicable to TRC Companies, Inc.'s Common Shareholders Net income applicable to TRC Companies, Inc.'s common shareholders $ 7,637 $ 8,429 Acquisition and integration expenses - 2,118 Tax effect of acquisition and integration expenses - (845) Adjusted Net Income Applicable to TRC Companies, Inc's Common Shareholders $ 7,637 $ 9,702 Adjusted Diluted Earnings per Common Share Net income applicable to TRC Companies, Inc.'s common shareholders $ 7,637 $ 8,429 Acquisition and integration expenses - 2,118 Tax effect of acquisition and integration expenses - (845) Adjusted Net Income Applicable to TRC Companies, Inc's Common Shareholders $ 7,637 $ 9,702 Diluted shares outstanding (as disclosed) 31,783 31,347 Add back for dilutive shares - - Adjusted diluted shares outstanding 31,783 31,347 Adjusted Diluted Earnings per Common Share $ 0.24 $

6 Definitions for Non-GAAP Measures Earnings Before Interest, Taxes, Depreciation, Amortization (EBITDA) The Company presents EBITDA because it believes that it is a useful tool for the Company, its lenders and its investors to measure the Company s ability to meet debt service, capital expenditure and working capital requirements. As used in the presentation, EBITDA is operating income plus depreciation and amortization. Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization (Adjusted EBITDA) As used in the presentation, Adjusted EBITDA is defined as EBITDA plus acquisition and integration expenses. Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization (Consolidated Adjusted EBITDA Under the Citizens Credit Agreement) As used in the Citizens Credit Agreement, Consolidated Adjusted EBITDA is defined as EBITDA plus acquisition and integration expenses, stock based compensation expense, and interest and penalties on federal and state income taxes, less interest expense on excluded indebtedness. Gross Margin and Gross Margin % The Company presents Gross Margin and Gross Margin % to allow investors to better evaluate shortterm and long-term profitability trends. The definition of Gross Margin is equal to Net Service Revenue less Cost of Services. Gross Margin % is equal to Gross Margin Divided by Net Service Revenue. 6

7 Definitions for Non-GAAP Measures Free Cash Flow The Company presents free cash flow, and ratios based on it, to conduct and evaluate its business because, although it is similar to cash flow from operations, the Company believes it is a useful measure of cash flows since purchases of fixed assets are a necessary component of ongoing operations. The definition of Free Cash Flow is equal to net cash provided by (used in) operating activities plus additions to property and equipment. Adjusted Operating Income The Company presents Adjusted Operating Income because it believes that it is a useful tool for the Company, its lenders and its investors to measure the Company s underlying operating performance. As used in the presentation, Adjusted Operating Income is defined as operating income plus acquisition and integration expenses and the amount of the goodwill impairment. Adjusted Net Income The Company presents Adjusted Net Income because it believes that it is a useful tool for the Company, its lenders and its investors to measure the Company s financial performance. As used in the presentation, Adjusted Net Income is defined as net income applicable to TRC Companies, Inc. plus the tax effected acquisition and integration expenses and the amount of the goodwill impairment. The Company utilizes its effective tax rate for the period in calculating the tax effect. Adjusted Diluted Earnings Per Share (Adjusted Diluted EPS) The Company presents Adjusted Diluted EPS because it believes that it is a useful tool for the Company, its lenders and its investors to measure the Company s financial performance. As used in the presentation, Adjusted Diluted EPS is defined as Adjusted Net Income divided by diluted weighted average shares outstanding. 7