NRC Group Holdings Corp. (NYSE American: NRCG) (“NRCG” or the
“Company”), a global provider of a wide range of environmental,
compliance and waste management services, today reported financial
results for the first quarter ended March 31, 2019, and reiterated
its financial outlook for 2019.
Fiscal First Quarter 2019 Financial Summary vs. Same Year-Ago
Quarter
- Operating revenue increased 41% to
$100.5 million.
- Net loss was $8.5 million, or $(0.23)
per share1, compared to net loss of $0.4 million, or $(0.02) per
share.
- Adjusted EBITDA2 was $17.2 million
compared to $17.5 million.
- Free cash flow conversion3 increased to
91% compared to 74%.
Management Commentary
“In the first quarter we generated strong operating revenue
growth with contributions from acquisitions completed in 2018,
better than expected performance at our Karnes County waste
disposal facility and increased emergency response activity,” said
NRCG CEO Chris Swinbank. “Due to seasonality in our Domestic
Environmental Services business, the first quarter is typically the
lightest quarter of the year for the segment, with the majority of
its Adjusted EBITDA generated in the remainder of the year. In the
first quarter we also incurred some incremental start-up costs in
this business, which we expect to benefit the remainder of the year
as the project-based work has since begun.”
Swinbank added, “Adjusted EBITDA margins in the quarter were
also impacted by project-mix and public company expenses that were
not incurred in the first quarter of 2018. Despite some incremental
expenses in the quarter, some of which will benefit the remainder
of 2019 we see strong momentum across our businesses and
end-markets, and we remain confident in our ability to execute on
both our financial objectives for 2019 as well as our long-term
growth strategy.”
Swinbank continued, “We remain on track for the opening of the
Pecos County and Reagan County waste disposal facilities in the
second quarter. These facilities, which we expect to generate
strong Adjusted EBITDA margins and have quick payback periods, will
expand our footprint in the Permian and Eagle Ford basins, allow us
to better serve our customers and grow our market share. Our fourth
facility in Andrews County is still in the permitting process and
we expect to begin construction on that facility late in 2019 or
early in 2020.”
“Within our National Emergency Response program, we signed two
additional customers during the quarter, and we are looking at
further expansion opportunities for this program, including opening
an additional call center in our Houston offices. I am encouraged
by the continued success in our waste disposal and National
Emergency Response strategic growth plan and, along with the rest
of our operations, their ability to drive long-term shareholder
value,” Swinbank concluded.
Recent Developments
On April 26, 2019, the Company closed on the previously
announced acquisition of the assets and business of OIT, Inc.
(“OIT”), a provider of thermal treatment of non-hazardous petroleum
contaminated soils, absorbent pads and sludges, and the treatment
of Per- and Polyfluoroalkyl substances (“PFAS”). The asset purchase
consisted of an initial cash payment of $6.0 million and includes
an additional $2.0 million deferred consideration payable in cash
and stock, and up to an additional $5.0 million in earn-out
payments over the next three years based on certain financial
milestones.
The acquisition of the OIT business further strengthens the
Company’s operations in Alaska by providing a differentiated
service offering and the opportunity to significantly grow Adjusted
EBITDA over the next few years due to the high demand for PFAS
treatment. Additionally, the financial contribution from the OIT
acquisition was included in the previously communicated outlook for
2019.
On April 26, 2019, the Company signed an additional retainer
contract in Mexico within the Standby segment. This brings the
total amount of contracts won to seven, a 100% win rate on
contracts bid to date. As one of the only global retainer-based,
emergency oil response service providers, NRCG believes it is
uniquely positioned to continue to grow its presence in the
region.
On May 1, 2019, the Company received a commitment from HSBC Bank
USA, N.A., to provide an incremental revolving credit commitment of
an additional $15.0 million under the Company’s existing credit
facility. The commitment is subject to the execution and delivery
of definitive credit documents and other customary conditions and,
if consummated, would increase the Company’s aggregate revolving
credit commitments under its existing credit facility to $60.0
million.
First Quarter 2019 Financial Results
Operating revenue in the first quarter of 2019 increased 41% to
$100.5 million compared to $71.2 million in the prior year period.
The increase was largely driven by the acquisitions completed in
2018, as well as organic growth across all segments, including
better than expected performance at the Karnes County waste
disposal facility and increased emergency response activity.
Excluding the impact of acquisitions, operating revenue increased
14% in the first quarter of 2019.
Operating expenses, which include cost of revenue (exclusive of
depreciation and amortization), in the first quarter of 2019 were
$71.3 million compared to $48.4 million in the prior year period.
The increase was primarily due to acquisitions completed in 2018,
emergency response project mix that required the use of
subcontractors which drove increased variable expenses, and initial
start-up costs related to Domestic Environmental Services
project-based work that has commenced in the second quarter of
2019.
General and administrative expenses in the first quarter of 2019
were $16.9 million compared to $10.4 million in the prior year
period. Approximately $4.2 million of this increase was related to
the acquisitions completed in 2018, with the remaining increase
primarily due to increased public company costs and one-time
non-operational charges from prior periods.
Net loss in the first quarter of 2019 was $8.5 million, or
$(0.23) per share1, compared to net loss of $0.4 million, or
$(0.02) per share, in the prior year period. The decline was
primarily the result of higher interest expense, increased
depreciation and amortization, and a change in the fair value of
contingent consideration related to the Quail Run and Clean Line
acquisitions.
Adjusted EBITDA2, a non-GAAP financial measure that is
calculated consistent with the Company’s senior credit facility, in
the first quarter of 2019 was $17.2 million compared to $17.5
million in the prior year period.
Segment Results
Domestic Standby Services – Domestic Standby Services operating
revenue in the first quarter of 2019 increased 16% to $10.4 million
compared to $9.0 million in the prior year period. The increase was
primarily due to retainer growth and an increase in emergency
response activity. Operating profit in the first quarter of 2019
was $4.2 million compared to $4.5 million in the prior year period.
The slight decline was due to emergency response project mix which
required the utilization of more subcontractors in the first
quarter of 2019.
Domestic Environmental Services – Domestic Environmental
Services operating revenue in the first quarter of 2019 increased
49% to $60.9 million compared to $40.9 million in the prior year
period. The increase was largely due to the acquisition of SWS in
May 2018, as well as increased emergency response activity across
several regions. Operating profit in the first quarter of 2019 was
$2.4 million compared to $2.5 million in the prior year period. The
slight decline was largely due to project mix primarily in Alaska
and Southern California, as well as initial start-up costs incurred
related to project-based work that has commenced in the second
quarter of 2019.
International Services – International Services operating
revenue in the first quarter of 2019 increased 70% to $8.1 million
compared to $4.8 million in the prior year period. The increase was
primarily due to the acquisition of Clean Line, as well as
increased emergency response operating revenue in Turkey, partially
offset by lower operating revenue in the North Sea region.
Operating profit in the first quarter of 2019 increased 75% to $1.3
million compared to $0.7 million in the prior year period. The
increase was due to the continued focus on higher-margin land-based
service offerings.
Sprint – Sprint operating revenue in the first quarter of 2019
increased 27% to $21.1 million compared to $16.6 million in the
prior year period. The increase was primarily due to expanded
environmental service operations, the acquisition of Quail Run in
October 2018, and strong growth at the Karnes County waste disposal
facility. Operating profit in the first quarter of 2019 increased
31% to $8.5 million compared to $6.5 million in the prior year
period. The increase was due to the higher mix of waste disposal
operating revenue.
Balance Sheet
At March 31, 2019, the Company had $17.9 million in cash and
equivalents and $361.0 million of total debt (gross of issuance
fees) compared to $18.4 million in cash and equivalents and $352.2
million of total debt (gross of issuance fees) at December 31,
2018.
2019 Outlook
The Company is reiterating its previously communicated 2019
financial outlook and continues to expect operating revenue in 2019
to be in the range of $420-$460 million compared to pro forma
revenue4 of $389 million in 2018, an increase of 8%-18%,
respectively.
Adjusted EBITDA2 in 2019 remains consistent with the previously
provided guidance range of $105-$115 million compared to $91
million in 2018, an increase of 15%-26%, respectively.
Capital expenditures in 2019 are still expected to be in the
range of $55-$60 million, compared to $25 million incurred in 2018.
Approximately 55% of the expected capital expenditures for 2019 are
related to initial waste disposal build-outs.
Free cash flow conversion3 in 2019 is still expected to be in
the range of approximately 70%-80%.
______________________________1 Excludes dividends from Series A
convertible preferred stock.2 Adjusted EBITDA is a non-GAAP
financial measure. See below under the heading “Use of non-GAAP
Financial Information” and the table for a description of the
Company’s use of non-GAAP financial information in this release and
a reconciliation of such non-GAAP financial measures to GAAP.3 Free
cash flow conversion is defined as Adjusted EBITDA less total capex
(excluding one-time waste disposal investments) divided by Adjusted
EBITDA.4 Pro forma revenue was calculated as if the acquisitions of
each of SWS, Quail Run and Clean Line were consummated on January
1, 2018.
Conference Call
The Company will hold a conference call today at 5:00 p.m.
Eastern time to discuss its first quarter 2019 results.
Date: Tuesday, May 7, 2019Time: 5:00 p.m. Eastern time (4:00
p.m. Central time)Toll-free dial-in number:
1-888-317-6016International dial-in number: 1-412-317-6016
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at
1-949-574-3860.
The conference call will be broadcast live and available for
replay here and via the investor relations section of the Company’s
website at www.ir.nrcg.com.
A replay of the conference call will be available on the same
day through May 21, 2019.
Toll-free replay number: 1-877-344-7529International replay
number: 1-412-317-0088Replay ID: 10131094
About NRCG
NRCG is a global provider of a wide range of environmental,
compliance and waste management services. NRCG’s broad range of
capabilities and global reach enable it to meet the critical, and
often non-discretionary, needs of more than 5,000 customers across
diverse end markets to ensure compliance with environmental, health
and safety laws and regulations around the world. NRC Group, a
wholly owned subsidiary of NRCG, was established in June 2018
through the combination of two businesses, National Response
Corporation and Sprint Energy Services, both previously operating
separately under the ownership of investment affiliates of J.F.
Lehman & Company. For more information, please visit
www.nrcg.com. No portion of the website referenced in this
paragraph is incorporated by reference into or otherwise deemed to
be a part of this news release.
Use of Non-GAAP Financial Information
This release describes historical financial information that
includes “Adjusted EBITDA,” and “Free cash flow conversion,” both
of which are financial measures that are not calculated in
accordance with GAAP and provided only as supplemental information.
The Company has presented Adjusted EBITDA because it is
substantially the same as the metric called “Consolidated Adjusted
EBITDA,” as defined in the Company’s senior credit facility, which
is a key component in the determination of its leverage ratios
(including its ability to service debt and incur capital
expenditures). The Company believes its presentation of Adjusted
EBITDA is useful because it provides investors and industry
analysts the same information that it uses internally for purposes
of assessing its liquidity and core operating performance. The
Company provides Free cash flow conversion because it is a useful
measure to investors as to the ongoing liquidity of the business
after required capital expenditure investments. Adjusted EBITDA and
Free cash flow conversion are each a non-GAAP financial measure and
should not be considered as an alternative to financial measures
prepared in accordance with GAAP such as operating income or net
income as measures of operating performance or cash flows or as
measures of liquidity. Adjusted EBITDA and Free cash flow
conversion are not necessarily calculated the same way as other
companies and should not be considered a substitute for or more
meaningful than GAAP results, and should be read in conjunction
with the GAAP financial information provided in this release.
This release also provides prospective financial information
that includes “Adjusted EBITDA,” and “Free cash flow conversion”
each a financial measure that is not calculated in accordance with
GAAP and provided only as supplemental information. The Company
provides prospective Adjusted EBITDA and Free cash flow conversion
for the reasons set forth above and provides Free cash flow
conversion because it is a useful measure to investors as to the
ongoing liquidity of the business after required capital
expenditure investments. The Company is not able to provide a
reconciliation without unreasonable efforts of its prospective
guidance related to these non-GAAP financial measures to their most
directly comparable GAAP financial measure due to the unknown
effect, timing and potential significance of external and internal
business activities that the Company believes are material to the
comparable GAAP financial measure. The assumptions and estimates
underlying prospective financial information are inherently
uncertain and are subject to a wide variety of significant
business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those
contained in the prospective financial information. See
“Forward-Looking Statements” below. Accordingly, there can be no
assurance that the prospective results are indicative of the future
performance of the Company or that actual results will not differ
materially from those described in the prospective financial
information, and any reference to prospective financial outlooks in
this release should not be regarded as a representation by any
person that such results will be achieved.
For a further description of Adjusted EBITDA and explanation of
the Company’s use thereof, please see “Reconciliation of Non-GAAP
Financial Measure” in the tables that follow.
Forward‐Looking Statements
This news release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"estimate," "plan," "project," "forecast," "intend," "expect,"
"anticipate," "believe," "seek," "target" or other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters.
The statements in this news release that are not historical
statements, including statements regarding anticipated timing of
landfill operations, capital expenditures, financial capabilities
of new landfills, growth opportunities in Mexico, financial outlook
and guidance, growth of National Emergency Response program, and
operational growth strategy, are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on information
currently available as well as management’s assumptions and beliefs
today. These statements are subject to numerous risks and
uncertainties that could cause actual results to differ materially
from the results expressed or implied by the statements, and
investors should not place undue reliance on them. Risks and
uncertainties that could cause actual results to differ materially
from such statements include, but are not limited to: (1) the
Company may not fully recognize the financial benefits of its
permits due to an inability to source adequate volumes or a delay
in construction; (2) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
permits; (3) unexpected costs, charges or expenses related to or
resulting from construction or other matters; (4) changes in
applicable laws or regulations; (5) increased competition in Mexico
and other markets; (6) ability to manage growth of national
accounts program and global emergency response program; (7) ability
to consummate acquisition on terms that are favorable to the
Company, if at all; and (8) the possibility that NRCG may be
adversely affected by other economic, business, and/or competitive
factors. The Company undertakes no obligation to revise or update
publicly any forward-looking statement to reflect future events or
circumstances. In addition, actual results are subject to other
risks identified in the Company’s prior and future filings with the
SEC, available at www.sec.gov.
NRC GROUP HOLDINGS CORP AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(in thousands except share and per
share amounts)
March 31, December 31, 2019
2018 (Unaudited) ASSETS
Current assets Cash and cash equivalents $ 17,917 $ 18,365
Receivables: Trade, net of allowance for doubtful accounts of $1.7
million and $0.6 million, respectively 112,163 102,709 Other 1,138
1,112 Inventory 7,348 7,257 Prepaid expenses and other current
assets 5,043 4,692
Total current
assets 143,609 134,135 Property and
equipment, net 133,288 122,565 Goodwill 51,417 51,417 Intangible
assets, net of accumulated amortization of $36.4 million and $34.5
million, respectively 62,750 64,614 Other assets 3,034
3,396
Total assets $
394,098 $ 376,127
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities
Accounts payable $ 36,673 $ 36,171 Accrued expenses 13,679 10,644
Accrued wages and benefits 4,215 4,858 Contingent consideration
3,317 2,470 Deferred revenue 7,171 1,199 Other current liabilities
1,650 - Current portion of term loans 3,431 3,431 Current portion
of equipment loan 419 737 Borrowings outstanding under revolving
credit agreements 20,000 10,000 Accrued dividend on Series A
convertible preferred stock 1,838 1,511
Total current liabilities
92,393
71,021 Contingent consideration, net of
current portion 5,050 3,846 Term loans, net of current portion and
deferred financing costs 329,631 330,104 Equipment loan, net of
current portion 69 78 Asset retirement obligation 1,406 1,379 Other
long-term liabilities 6,945 1,243
Total liabilities 435,494
407,671 Commitments and contingencies
Shareholders' Equity (Deficit) Series A Convertible
Preferred Stock, par value $0.0001; 5,000,000 shares authorized;
1,050,000 issued with a liquidation preference of $105,000 as of
March 31, 2019 and December 31, 2018. 102,967 102,967 Common stock,
par value $0.0001; 200,000,000 shares authorized; 36,902,544 shares
issued and outstanding as of March 31, 2019 and December 31, 2018.
4 4 Additional paid in capital 11,246 13,084 Accumulated deficit
(149,522 ) (141,062 ) Accumulated other comprehensive loss
(6,091 ) (6,537 ) Total shareholders' equity (deficit)
(41,396 ) (31,544 )
Total liabilities and shareholders' equity $
394,098 $ 376,127
NRC GROUP HOLDINGS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(in thousands except share and per
share amounts)
(unaudited)
Three Months Ended March 31, 2019
2018 Operating revenue $
100,494 $ 71,232 Costs and expenses Operating expenses,
including cost of revenue (exclusive of depreciation and
amortization) 71,255 48,366 General and administrative expenses
16,893 10,395 Depreciation and amortization 9,012 6,459 Management
fees - 443 Acquisition expenses 447 1,222 Change in fair value of
contingent consideration 2,051 - Other expense, net 1,400
897 Total costs and expenses 101,058
67,782 Operating (loss) income (564 ) 3,450
Other income (expenses) Interest expense (6,609 ) (3,670 )
Foreign currency transaction gain (loss) 91 (37 ) Other income, net
176 15 Total other expenses, net
(6,342 ) (3,692 ) Loss before income taxes (6,906 ) (242 )
Income tax expense 1,554 119 Net loss $
(8,460 ) $ (361 ) Other comprehensive income (loss), net of
tax Foreign currency translation income 446
705 Total other comprehensive income 446
705 Comprehensive (loss) income $ (8,014 ) $ 344
Net loss $ (8,460 ) $ (361 ) Less dividend on Series
A convertible preferred stock (1,838 ) - Net
loss attributable to common shareholders $ (10,298 ) $ (361 )
Net loss per share, basic and diluted $ (0.28 ) $ (0.02 )
Weighted average common shares outstanding, basic and diluted
36,902,544 21,873,680 Dividends
declared per Series A convertible preferred share $ 1.75
-
Reconciliation of Non-GAAP Financial
Measures
Adjusted EBITDA and Free Cash Flow
Conversion
This release uses the term “Adjusted EBITDA,” which is not a
recognized measure under GAAP. The Company uses Adjusted EBITDA as
a supplement to its GAAP results in evaluating certain aspects of
its business, as described below. For purposes of this release, the
Company defines Adjusted EBITDA as net income (loss) plus (i)
depreciation and amortization, (ii) interest expense, net, (iii)
provision for income taxes (clauses (i) through (iii) referred to
collectively as “EBITDA”), net, (iv) foreign currency translation
gain or loss and (v) gain or loss on equipment sales or
retirements, adjusted to include certain add-backs permitted by the
Credit Agreement, including (i) management fees, (ii) impairment
expense of goodwill and intangible assets, (iii)
acquisition-related transaction expenses (including due diligence
costs, legal, accounting and other advisory fees and costs,
retention and severance payments, facility closure costs and
financing fees and expenses), (iv) the impact of pre-acquisition
revenues, earnings and EBITDA of certain recent acquisitions and
certain management estimates relating thereto, (v) normalization
adjustments to reflect a run-rate level of EBITDA within NRC
Group’s historical financial statements, (vi) non-recurring costs
and other non-operating expenses and income, (vii) the impact of
certain completed cost savings initiatives at various domestic
regions, (viii) the impact of a reduction in force adjustment, (ix)
costs relating to the shutdown of certain international operations
and (x) certain out-of-period timing adjustments and
reclassification of capitalized leases not applicable under the
Company’s new senior credit facility dated June 11, 2018 (as
amended, the “New Credit Facility”). “Adjusted EBITDA” is
substantially the same as the metric called “Consolidated Adjusted
EBITDA,” as defined in the Company’s New Credit Facility, which is
a key component in the determination of the Company’ leverage
ratios (including its ability to service debt and incur capital
expenditures).
The Company’s method of computing Adjusted EBITDA is
substantially consistent with that used for debt covenant
calculation purposes under the New Credit Facility and also is
routinely reviewed by management for that purpose. For example,
under the New Credit Facility if as of the last day of any fiscal
quarter the sum of the aggregate outstanding principal amount of
all revolving loans plus the aggregate amount of letters of credit
obligations (excluding letters of credit to the extent cash
collateralized and undrawn letters of credit in an aggregate amount
not to exceed $15 million) plus the aggregate outstanding principal
amount of all swingline loans exceeds 30% of the revolving credit
limit then in effect, NRC Group is required to maintain a
consolidated total net leverage ratio, calculated in accordance
with the New Credit Facility, or equal to or less than 5.45:1.00.
The total net leverage ratio is the ratio of consolidated total net
debt (as defined in the New Credit Facility) to Consolidated
Adjusted EBITDA (as defined in the New Credit Facility). This
covenant is not currently in effect.
The Company believes its presentation of Adjusted EBITDA is
useful because it provides investors and industry analysts the same
information that it uses internally for purposes of assessing its
liquidity and core operating performance. However, Adjusted EBITDA
is not a substitute for, or more meaningful than, net income
(loss), cash flows from operating activities, operating income or
any other measure prescribed by GAAP, and there are limitations to
using non-GAAP measures such as Adjusted EBITDA. Certain items
excluded from Adjusted EBITDA are significant components in
understanding and assessing a company’s financial performance, such
as a company’s cost of capital, tax structure and the historic
costs of depreciable assets. Additionally, certain items excluded
from Adjusted EBITDA are also significant components in
understanding and assessing the Company’s liquidity, such as
interest payments, payments made for transaction expenses and
extraordinary items and management fees. Also, other companies in
the Company’s industry may define Adjusted EBITDA differently than
it does, and as a result, it may be difficult to use Adjusted
EBITDA or similarly named non-GAAP measures that other companies
may use to compare the liquidity or performance of those companies
to NRC Group’s liquidity or performance. Because of these
limitations, Adjusted EBITDA should not be considered as a measure
of the income generated by the Company’s business or cash flow
available to it to invest in the growth of its business. The
Company’s management compensates for these limitations by relying
primarily on GAAP results and using Adjusted EBITDA
supplementally.
The release also uses the term “Free cash flow conversion,”
which is not a recognized measure under GAAP. The Company uses Free
cash flow conversion as a supplement to its GAAP results because it
believes it is useful to show investors the ongoing liquidity of
the business after required capital expenditure investments. For
purposes of this release, the Company defines Free cash flow
conversion as Adjusted EBITDA less total capex (excluding one-time
waste-disposal investments) divided by Adjusted EBITDA. Free cash
flow conversion is not a substitute for, or more meaningful than,
its comparable GAAP measure, and there are limitations to using
non-GAAP measures such as Free cash flow conversion.
A reconciliation of net cash provided by
operating activities to net income (loss) to Adjusted EBITDA and
Free cash flow conversion for the periods indicated is as
follows:
For the Quarter Ended March 31, ($ thousands)
2019 2018
Net cash used in provided by operating activities
(803 ) 6,307 Depreciation of property and
equipment (7,148 ) (4,906 ) Amortization of intangible assets
(1,864 ) (1,540 ) Accretion of asset retirement obligation (27 )
(13 ) Amortization of deferred financing costs (436 ) (283 ) Bad
debt expense (1,264 ) (125 ) Change in fair value of contingent
consideration (2,051 ) - Deferred income tax provision - (23 )
Realized loss (gain) from equipment sales or retirements 324 -
Changes in operating assets and liabilities, net of acquisition:
4,809 222
Net income (loss) 1
(8,460 ) (361 ) Total
income tax expense (benefit) 1,554 119 Interest income - Interest
expense 6,609 3,670 Foreign currency transaction gain (loss) (91 )
37 Change in fair value of contingent consideration 2,051 - Other
expense, net 809 (22 ) Depreciation and amortization 9,012 6,459
Management fees - 250 Acquisition Transaction expenses 447 1,222
Transition expenses and extraordinary items 2 349 904 Pre-NRC
EBITDA contribution 3 - (327 ) Restructuring and Large Event
Adjustments 4 185 809 Estimated SWS Acquisition Synergies 5 838 961
Expenses not in the normal course of business 6 231 355
Reorganization Adjustments 7 907 1,694 Reclassification items 8
2,745 1,698 Total Adjustments
25,646 17,829
Adjusted
EBITDA, per Credit Agreement $ 17,186
$ 17,468
Pro Forma Capital
Expenditures
Total Capex 6,287 4,732 Less: One-time Waste Disposal Investment
(4,663 ) (150
) Adj. Capex 1,624 4,582 Adj. EBITDA less Adj.
Capex 15,562 12,886 Free Cash Flow Conversion 91 % 74 %
Footnotes
1 GAAP net income. 2 Consists of one-time set-up costs for growth
opportunities in Mexico, senior management placement fees, as well
as expenses related to add-on acquisitions such as severance,
one-time legal, rebranding, and closure costs. 3 Stub period
Reported EBITDA of certain NRC acquisitions prior to NRC
acquisition. 4 NRC normalized results from SoCal and New England
regions, which underwent material reorganization starting in April
2017. These adjustments are evidenced by increased performance in
Q1 2018 vs. Q1 2017. This also includes the savings from
terminating SWS corporate employees as well as the remaining
financial results associated with the closed SWS service centers.
Sprint normalized results consist of the impact of Hurricane
Harvey-related closure of the Karnes Facility and temporarily low
margins during the start-up phase of the Pecos facility. 5 Consists
of identified hard cost savings from planned headcount reductions,
insurance savings and purchasing efficiencies from integration the
SWS acquisition. Actions have taken or are currently taking place.
6 NRC includes identified one-time, non-recurring expenses
including severance, consulting, lawsuit settlement and other
expenses not anticipated to occur in future periods. Sprint
consists of extraordinary, non-recurring items including ad-back of
landfill rental equipment that has been purchased and start-up
costs for a new yard. 7 NRC consists of savings realized from cost
reduction initiatives completed in the PNW, NoCal and East regions,
including headcount reductions and procurement along with a
reduction-in-force completed in April 2018 and Sept 2018. Sprint
consists of the impact of price increases implemented by Sprint
since late 2017 at the Karnes Facility as well as the removal of
non-recurring operating costs associated with the disposal pit. 8
Consists of out-of-period timing adjustments and reclassification
of capitalized leases stemming from the PCAOB audit which are not
applicable under the Credit Agreement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190507005890/en/
Gateway Investor RelationsCody Slach or Jared Filippone,
CFA1-949-574-3860NRCG@gatewayir.com
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