Select Interior Concepts, Inc. (NASDAQ: SIC), a premier installer
and nationwide distributor of interior building products, today
announced its financial results for the third quarter ended
September 30, 2020.
THIRD QUARTER
2020 FINANCIAL HIGHLIGHTS
COMPARED TO THIRD QUARTER
2019
- Consolidated net sales of $150.1 million, compared to $159.4
million
- Gross profit was $38.6 million, compared to $42.3 million
- Net income was $0.5 million, or $0.02 earnings per share (EPS),
compared to net income of $2.5 million, or $0.10 EPS
- EBITDA of $10.5 million, compared to $14.3 million
- Adjusted EBITDA of $14.0 million, compared to $17.0
million
- Operating cash flow provided $2.4 million, compared to $11.5
million
- Liquidity of $67.8 million, including $4.1 million of cash plus
$63.7 million of availability under the revolving credit facility,
compared to $74.0 million
- Continued to execute on a wide range of actions in response to
the COVID-19 pandemic resulting in approximately $5 million in cost
savings during the quarter affecting both Cost of Sales and
SG&A
NINE MONTHS 2020 FINANCIAL HIGHLIGHTS
COMPARED TO NINE MONTHS
2019
- Consolidated net sales of $409.9 million, compared to $454.7
million
- Gross profit was $100.0 million, compared to $125.2
million
- Net loss was ($6.6 million), or ($0.26) EPS, compared to net
income of $3.7 million, or $0.15 EPS
- EBITDA of $18.5 million, compared to $37.7 million
- Adjusted EBITDA of $29.0 million, compared to $46.1
million
- Operating cash flow provided $19.9 million, compared to $20.3
million
Chief Executive Officer L.W. (Bill) Varner Jr. commented, “SIC’s
third-quarter financial results reflected solid performance,
supported by strong demand in our key end-markets despite ongoing
uncertainty created by the COVID-19 pandemic. We saw
continued increases in activity across the business in the third
quarter from earlier in the year, with volumes continuing to return
to pre-COVID levels.
“Since joining SIC in June 2020, I have focused on actions that
will drive long-term value creation by accelerating organic revenue
and core earnings growth; positioning SIC’s capital structure to
support potential inorganic growth prospects; and developing a
long-term growth strategy that positions SIC for success in the
evolving building products marketplace. As a first step, we
have undertaken multiple targeted initiatives to drive incremental
EBITDA from untapped potential within the Company’s existing
footprint. Most importantly, we have identified opportunities
in strategic sourcing, organizational design and productivity,
insurance programs, and facility footprint optimization.
These improvements, which are new and not COVID-19 related, are
structural enhancements in operations that we expect will be
sustainable as we return to full levels of activity. This
represents a projected total annualized earnings improvement target
of $8 million to $10 million. Our goal is to achieve
approximately 50% of this annualized target in 2021 with the
balance expected to be realized in 2022.”
In addition, SIC today announced two changes in connection with
its senior leadership. Kendall Hoyd, President of the Residential
Design Services (“RDS”) segment, will resign to pursue other
interests, effective January 4, 2021. SIC has commenced a search
for a new President of RDS. "I want to thank Kendall
for his many contributions to SIC over the last several years, and
I wish him well in his future endeavors," stated Mr. Varner. Also,
SIC’s Chief Financial Officer, Nadeem Moiz, has been appointed
Chief Operating Officer of Select Interior Concepts, in addition to
his continuing role as CFO. Mr. Varner commented, “We are excited
to announce Nadeem’s promotion into the Chief Operating Officer
role at SIC. This position will be integral to our ongoing efforts
to focus on operational excellence, and Nadeem will provide
essential insight into the operating performance of our entire
organization as we move forward.”
RESULTS FOR THE THIRD
QUARTER OF 2020
Net sales for the third quarter of 2020 decreased by 5.9% to
$150.1 million, compared to net sales of $159.4 million for the
third quarter of 2019. Residential Design Services (“RDS”) segment
sales decreased 6.3%. The decrease was largely due to a decline in
sales related to negative price/mix partially offset by positive
growth in volume, particularly in California and
Arizona. Architectural Surfaces Group (“ASG”) segment
sales declined 5.4% due primarily to lower natural stone, quartz,
and tile sales volume. The lower sales volume is attributable to
closures of the Charlotte and San Antonio locations, and a decline
in commercial business in California, primarily as a result of the
COVID-19 pandemic. These volume declines were partially offset by
improvements in price/mix for stone and quartz.
Gross profit for the third quarter of 2020 decreased by 8.9% to
$38.6 million, compared to $42.3 million for the third quarter of
2019. The decrease in gross profit was primarily due to lower
revenues. Gross margin for the third quarter of 2020
was 25.7%, compared to 26.6% for the third quarter of 2019. In the
RDS segment, gross margin decreased 3.1 percentage points to 23.6%
primarily due to an unfavorable product mix resulting from the
increase of entry- to mid-level homebuilding as a percentage of our
project activity in our markets. We expect the heightened
percentage of entry- to mid-level homebuilding to continue to
increase in the coming quarters putting increased pressure on our
gross margins. In the ASG segment, gross margin increased 2.3
percentage points to 28.4% primarily due to improvements in
price/mix and the launch of new quartz products.
Selling, general and administrative (“SG&A”) expenses for
the third quarter of 2020 were $33.4 million, or 22.3% of net
sales, compared to $36.1 million, or 22.7% of net sales, for the
third quarter of 2019. This decrease includes savings from position
eliminations and furloughs and other cost reduction initiatives in
response to COVID-19, and is partially offset by variable costs
including bonuses and commissions which have increased
commensurately with sales. SG&A for the third quarter of 2020
and 2019 included $3.0 million and $3.9 million, respectively, of
equity-based compensation and certain non-recurring costs. On an
adjusted basis, which excludes equity-based compensation and
certain non-recurring costs, SG&A was $30.5 million for the
third quarter of 2020, compared to $32.2 million for the third
quarter of 2019.
For the third quarter of 2020, net income was $0.5 million, or
$0.02 EPS, compared to net income of $2.5 million, or $0.10 EPS,
for the third quarter of 2019. Net income for the third quarter of
2019 included $2.0 million of other income, which primarily
resulted from a change in the fair value of earnout liabilities for
completed acquisitions.
EBITDA for the third quarter of 2020 decreased
26.2% to $10.5 million, compared to EBITDA of $14.3 million for the
third quarter of 2019. Adjusted EBITDA, which excludes the impact
of equity compensation and certain non-recurring costs, for the
third quarter of 2020 decreased by 17.4% to $14.0 million, compared
to $17.0 million for the third quarter of 2019. For the third
quarter of 2020, Adjusted EBITDA as a percentage of net sales was
9.4%, compared to 10.7% for the third quarter of 2019.
Operating cash flow totaled $2.4 million for the third quarter
of 2020, compared to $11.5 million for the third quarter of 2019
primarily as a result of reduced earnings and changes in working
capital. Liquidity from cash-on-hand and borrowing availability
under the Company’s revolving credit facility totaled $67.8 million
at September 30, 2020, compared to $74.0 million at September 30,
2019.
RESULTS FOR THE NINE
MONTHS ENDED
SEPTEMBER 30,
2020
Net sales for the first nine months of 2020 decreased by $44.8
million or 9.9% to $409.9 million, compared to net sales of $454.7
million for the first nine months of 2019. RDS segment sales
decreased 9.7%. The decrease was due in part to volume declines in
the Eastern Region, primarily attributable to the COVID-19
pandemic, as well as product mix challenges in certain markets
resulting from the increase of entry- to mid-level homebuilding as
a percentage of our project activity in our markets. Stay at home
orders, particularly in the second quarter and early part of the
third quarter heavily impacted our business with new safety
measures and restrictions lowering productivity at RDS job sites.
RDS design center activity was also limited due to lockdowns and
customer and employee concerns relating to in-person interaction.
The decline in organic volume was partially offset by increased
sales from the acquisition of Intown in March 2019. ASG
segment sales decreased 10.3%. This decrease was due to
a decrease in volume of all products sold. The decrease in overall
volume, which peaked in the second quarter, was primarily due to
the COVID-19 pandemic. Stay at home orders heavily impacted our
business in Washington. ASG showrooms were limited to appointment
only sales. Additionally, our fabricator customers were unable to
execute in-residence installations due to stay at home orders at
many of our locations combined with homeowner concerns about the
pandemic. Volume decreases were slightly offset with a slight
increase from price/mix, most of which came from sales of quartz
products.
Gross profit for the first nine months of 2020 decreased by
20.2% to $100.0 million, compared to $125.2 million for the first
nine months of 2019. The decrease in gross profit was primarily a
result of lower net sales due to the COVID-19 pandemic. Gross
margin for the first nine months of 2020 was 24.4%, compared to
27.5% for the first nine months of 2019. In the RDS segment, gross
margin decreased 4.4 percentage points to 23.2% for the first nine
months of 2020, from 27.6% for the first nine months of 2019. This
decrease is primarily due to unabsorbed fixed costs on our lower
revenue base during the period and an unfavorable change in product
mix. In the ASG segment, gross margin decreased 1.2 percentage
points to 26.0%, for the first nine months of 2020, from 27.2% for
the first nine months of 2019. The decrease was primarily due to
unabsorbed fixed costs on our lower revenue base during the period
and a decline in product margin.
SG&A expenses for the first nine months of 2020 were $96.9
million, or 23.6% of net sales, compared to $109.0 million, or
24.0% of net sales, for the first nine months of 2019, primarily
reflecting lower sales commissions, savings from position
eliminations and furloughs, and other cost reduction initiatives in
response to COVID-19. SG&A for the first nine months of 2020
and 2019 included $8.1 million and $10.5 million, respectively, of
equity-based compensation and certain non-recurring costs. On an
adjusted basis, which excludes equity-based compensation and
certain non-recurring costs, SG&A was $88.7 million, or 21.7%
of net sales for the first nine months of 2020, compared to $98.5
million, or 21.7% of net sales, for the first nine months of
2019.
For the first nine months of 2020, net loss was ($6.6) million,
or ($0.26) EPS, compared to net income of $3.7 million, or $0.15
EPS, for the first nine months of 2019. Net income for the first
nine months of 2019 included $2.7 million of other income, which
primarily resulted from a change in the fair value of earnout
liabilities for completed acquisitions.
EBITDA for the first nine months of 2020
decreased 50.8% to $18.5 million, compared to EBITDA of $37.7
million for the first nine months of 2019. Adjusted EBITDA, which
excludes the impact of equity compensation and certain
non-recurring costs, for the first nine months of 2020 decreased by
37.2% to $29.0 million, compared to $46.1 million for the first
nine months of 2019. For the first nine months of 2020, Adjusted
EBITDA as a percentage of net sales was 7.1%, compared to 10.1% for
the first nine months of 2019.
Operating cash flow remained relatively consistent and totaled
$19.9 million for the first nine months of 2020, compared to $20.3
million for the first nine months of 2019.
COST AND CASH SAVINGS –
ACTIONS IN RESPONSE TO
COVID-19
Given the economic impact of COVID-19 on housing construction
and remodeling activity, in April 2020 the Company took steps to
align its cost structure and capital resources with the current and
expected level of activity. The Company’s measures to rationalize
costs and preserve cash included hiring freezes, targeted furloughs
and reductions of workforce across business units, and reduced
bonuses, along with enforcing strict controls on non-critical
expenditures.
In response to COVID-19, the Company continued to execute on
these initiatives resulting in approximately $5 million in cost
savings during the third quarter and over $12 million cost savings
year to date, affecting both Cost of Sales and SG&A. While some
of these costs will return to the business as sales increase, the
Company still expects these initiatives to provide an estimated
cost benefit of $14 million to $16 million to its full year 2020
financial results, further enhancing its liquidity and cash
flow.
FINANCIAL RESULTS CONFERENCE CALL AND WEBCAST
DETAILS
The Company will host a conference call today at 9:00 a.m. EST
to discuss results for the third quarter ended September 30, 2020
and other matters relating to the Company. To participate in the
conference call, dial 1-877-300-8521 from the United States, and
international callers may dial 1-412-317-6026, approximately 15
minutes before the call. A webcast and presentation will also be
available at www.selectinteriorconcepts.com under the investor
relations section. A replay of the call and webcast will be
available on the Company's website approximately four hours after
the completion of the call. During the conference call, the Company
may discuss and answer one or more questions concerning business
and financial matters and trends affecting the Company. The
Company’s responses to these questions, as well as other matters
discussed during the conference call, may contain or constitute
material information that has not been previously disclosed.
ABOUT SELECT INTERIOR CONCEPTS
Select Interior Concepts is a premier installer and nationwide
distributor of interior building products with leading market
positions in highly attractive markets. Headquartered in Atlanta,
Georgia, Select Interior Concepts is listed on the NASDAQ. The
Residential Design Services segment provides integrated design,
sourcing and installation solutions to customers, in the selection
of a broad array of interior products and finishes, including
flooring, cabinets, countertops, window treatments, and related
interior items. The Architectural Surfaces Group segment
distributes natural and engineered stone through a national network
of distribution centers and showrooms under proprietary brand names
such as AG&M, Modul and Pental. For more information, visit:
www.selectinteriorconcepts.com.
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and, as such, may involve known and unknown risks,
uncertainties and assumptions. Forward-looking statements may be
identified by the use of words such as “anticipate,” “believe,”
“estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,”
“plan,” “might,” “will,” “expect,” “predict,” “project,”
“forecast,” “potential,” “continue,” and other forms of these words
or similar words or expressions or the negatives thereof.
Forward-looking statements are based on historical information
available at the time the statements are made and are based on
management’s reasonable belief or expectations with respect to
future events. Forward-looking statements are subject to risks,
uncertainties, and other factors, including, but not limited to,
risks and uncertainties relating to the COVID 19 pandemic
(including those contained in our Form 8-K filed on May 5, 2020)
and those factors contained in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2019 (our “Annual Report”) and
the other reports we file with the SEC, that may cause the
Company’s actual results, level of activity, performance or
achievement to be materially different from the results or plans
expressed or implied by such forward-looking statements. All
forward-looking statements in this press release are qualified by
the factors, risks and uncertainties contained in our Annual
Report. Forward-looking statements should not be read as a
guarantee of future performance or results, and will not
necessarily be accurate indications of the times at or by which
such performance or results will be achieved. Forward-looking
statements speak only as of the date on which they are made and the
Company undertakes no obligation to update any forward-looking
statement to reflect future events, developments or otherwise,
except as may be required by applicable law.
USE OF NON-GAAP FINANCIAL
MEASURES
This press release and the schedules hereto
include EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, and
adjusted operating expense, which are financial measures that have
not been calculated in accordance with accounting principles
generally accepted in the United States, or GAAP, and are therefore
referred to as non-GAAP financial measures. We have provided
definitions below for these non-GAAP financial measures and have
provided tables in the schedules hereto to reconcile these non-GAAP
financial measures to the comparable GAAP financial measures.
We believe that these non-GAAP financial
measures provide valuable information regarding our earnings and
business trends by excluding specific items that we believe are not
indicative of the ongoing operating results of our businesses,
providing a useful way for investors to make a comparison of our
performance over time and against other companies in our
industry.
We have provided these non-GAAP financial
measures as supplemental information to our GAAP financial measures
and believe these non-GAAP measures provide investors with
additional meaningful financial information regarding our operating
performance and cash flows. Our management and board of directors
also use these non-GAAP measures as supplemental measures to
evaluate our businesses and the performance of management,
including the determination of performance-based compensation, to
make operating and strategic decisions, and to allocate financial
resources. We believe that these non-GAAP measures also provide
meaningful information for investors and securities analysts to
evaluate our historical and prospective financial performance.
These non-GAAP measures should not be considered a substitute for
or superior to GAAP results. Furthermore, the non-GAAP measures
presented by us may not be comparable to similarly titled measures
of other companies.
CONTACTS:
Investor Relations:Tully Brown(470)
548-7370ir@sicinc.com
Select
Interior Concepts, Inc. |
|
Condensed
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(In
thousands) |
|
September 30, 2020 |
|
|
December 31, 2019 |
|
|
ASSETS |
|
|
|
|
|
Cash |
|
$ |
4,097 |
|
|
$ |
5,002 |
|
|
Accounts
receivable, net |
|
|
68,144 |
|
|
|
63,419 |
|
|
Inventories |
|
|
98,101 |
|
|
|
104,741 |
|
|
Prepaid
expenses and other current assets |
|
|
17,605 |
|
|
|
11,083 |
|
|
Income taxes
receivable |
|
|
3,080 |
|
|
|
2,184 |
|
|
Total current assets |
|
$ |
191,027 |
|
|
$ |
186,429 |
|
|
Property and
equipment, net |
|
|
22,444 |
|
|
|
26,494 |
|
|
Deferred tax
assets, net |
|
|
10,222 |
|
|
|
10,550 |
|
|
Goodwill |
|
|
99,789 |
|
|
|
99,789 |
|
|
Customer
relationships, net |
|
|
65,023 |
|
|
|
71,989 |
|
|
Other
intangible assets, net |
|
|
16,175 |
|
|
|
18,759 |
|
|
Other
assets |
|
|
5,384 |
|
|
|
6,265 |
|
|
Total assets |
|
$ |
410,064 |
|
|
$ |
420,275 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Accounts
payable |
|
|
49,616 |
|
|
|
42,734 |
|
|
Accrued
expenses and other current liabilities |
|
|
17,967 |
|
|
|
16,661 |
|
|
Customer
deposits |
|
|
10,407 |
|
|
|
8,627 |
|
|
Current
portion of long-term debt, net |
|
|
246 |
|
|
|
11,749 |
|
|
Current
portion of capital lease obligations |
|
|
2,586 |
|
|
|
2,395 |
|
|
Total current liabilities |
|
$ |
80,822 |
|
|
$ |
82,166 |
|
|
Line of
credit |
|
|
9,670 |
|
|
|
21,871 |
|
|
Long-term
debt, net of current portion and financing fees |
|
|
149,979 |
|
|
|
141,299 |
|
|
Long-term
capital lease obligations |
|
|
5,452 |
|
|
|
6,907 |
|
|
Other
long-term liabilities |
|
|
7,760 |
|
|
|
6,757 |
|
|
Total liabilities |
|
$ |
253,683 |
|
|
$ |
259,000 |
|
|
Class A
common stock |
|
|
256 |
|
|
|
251 |
|
|
Treasury
stock, at cost |
|
|
(1,182 |
) |
|
|
(391 |
) |
|
Additional
paid-in capital |
|
|
163,938 |
|
|
|
161,396 |
|
|
Retained
earnings (accumulated deficit) |
|
|
(6,631 |
) |
|
|
19 |
|
|
Total stockholders' equity |
|
$ |
156,381 |
|
|
$ |
161,275 |
|
|
Total liabilities and stockholders' equity |
|
$ |
410,064 |
|
|
$ |
420,275 |
|
|
|
|
|
|
|
|
Select
Interior Concepts, Inc. |
|
Condensed
Consolidated Statement of Operations (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
(in
thousands, except share data) |
|
|
|
|
|
|
|
|
|
Revenues, net |
|
$ |
150,050 |
|
$ |
159,395 |
|
|
$ |
409,869 |
|
|
$ |
454,657 |
|
|
Cost of
revenues |
|
|
111,460 |
|
|
117,057 |
|
|
|
309,886 |
|
|
|
329,418 |
|
|
Gross profit |
|
|
38,590 |
|
|
42,338 |
|
|
|
99,983 |
|
|
|
125,239 |
|
|
Selling,
general and administrative expenses |
|
|
33,446 |
|
|
36,129 |
|
|
|
96,850 |
|
|
|
109,014 |
|
|
Income from operations |
|
|
5,144 |
|
|
6,209 |
|
|
|
3,133 |
|
|
|
16,225 |
|
|
Other expense: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
3,546 |
|
|
4,342 |
|
|
|
11,072 |
|
|
|
13,151 |
|
|
Other expense (income), net |
|
|
412 |
|
|
(2,008 |
) |
|
|
1,755 |
|
|
|
(2,728 |
) |
|
Total other expense, net |
|
|
3,958 |
|
|
2,334 |
|
|
|
12,827 |
|
|
|
10,423 |
|
|
Income (loss) before provision (benefit) for income
taxes |
|
|
1,186 |
|
|
3,875 |
|
|
|
(9,694 |
) |
|
|
5,802 |
|
|
Provision
(benefit) for income taxes |
|
|
655 |
|
|
1,417 |
|
|
|
(3,045 |
) |
|
|
2,055 |
|
|
Net
income (loss) |
|
$ |
531 |
|
$ |
2,458 |
|
|
$ |
(6,649 |
) |
|
$ |
3,747 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of common
stock |
|
|
|
|
|
|
|
|
|
Basic common stock |
|
$ |
0.02 |
|
$ |
0.10 |
|
|
$ |
(0.26 |
) |
|
$ |
0.15 |
|
|
Diluted common stock |
|
$ |
0.02 |
|
$ |
0.10 |
|
|
$ |
(0.26 |
) |
|
$ |
0.15 |
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic common stock |
|
|
25,383,379 |
|
|
25,051,068 |
|
|
|
25,301,709 |
|
|
|
25,366,170 |
|
|
Diluted common stock |
|
|
25,762,741 |
|
|
25,189,339 |
|
|
|
25,301,709 |
|
|
|
25,463,814 |
|
|
|
|
|
|
|
|
|
|
|
|
Select
Interior Concepts, Inc. |
|
Condensed
Consolidated Statements of Cash Flows (Unaudited) |
|
|
|
|
|
|
|
|
|
Nine Months
Ended September 30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
(in
thousands) |
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
19,933 |
|
|
$ |
20,306 |
|
|
|
|
|
|
|
|
Purchase of
property and equipment |
|
|
(2,757 |
) |
|
|
(7,273 |
) |
|
Proceeds
from disposal of property and equipment |
|
|
55 |
|
|
|
16 |
|
|
Acquisition
of Intown Design, Inc. |
|
|
- |
|
|
|
(11,537 |
) |
|
Escrow
release payment related to acquisition of Greencraft Holdings,
LLC |
|
|
- |
|
|
|
(3,000 |
) |
|
Acquisition
of Elegant Home Design, LLC (Indemnity payment in 2019) |
|
|
- |
|
|
|
(1,000 |
) |
|
Net cash used in investing activities |
|
$ |
(2,702 |
) |
|
$ |
(22,794 |
) |
|
|
|
|
|
|
|
Payment of
Greencraft Holdings, LLC earn-out liability |
|
|
- |
|
|
|
(5,794 |
) |
|
Proceeds
from ERP financing |
|
|
376 |
|
|
|
2,118 |
|
|
Payments on
line of credit, net |
|
|
(12,275 |
) |
|
|
(2,822 |
) |
|
Proceeds
from term loan |
|
|
- |
|
|
|
11,500 |
|
|
Term loan
deferred issuance costs |
|
|
(2,230 |
) |
|
|
- |
|
|
Purchase of
treasury stock |
|
|
(791 |
) |
|
|
(235 |
) |
|
Payments on
notes payable and capital leases |
|
|
(2,428 |
) |
|
|
(1,407 |
) |
|
Principal
payments on long-term debt |
|
|
(788 |
) |
|
|
(1,589 |
) |
|
Net cash provided by (used in) financing
activities |
|
$ |
(18,136 |
) |
|
$ |
1,771 |
|
|
|
|
|
|
|
|
Net
decrease in cash |
|
$ |
(905 |
) |
|
$ |
(717 |
) |
|
Cash (and
restricted cash in 2019), beginning of period |
|
$ |
5,002 |
|
|
$ |
9,362 |
|
|
Cash, end of
period |
|
$ |
4,097 |
|
|
$ |
8,645 |
|
|
|
|
|
|
|
|
Select
Interior Concepts, Inc. |
Segment
Information (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, 2020 |
|
|
|
Nine Months
Ended September 30, 2020 |
(in thousands) |
Net Sales |
|
Gross Profit |
|
Gross Margin |
|
(in thousands) |
Net Sales |
|
Gross Profit |
|
Gross Margin |
RDS |
|
$ |
90,858 |
|
|
$ |
21,460 |
|
|
23.6 |
% |
|
RDS |
|
$ |
243,657 |
|
|
$ |
56,432 |
|
|
23.2 |
% |
ASG |
|
|
59,834 |
|
|
|
17,018 |
|
|
28.4 |
% |
|
ASG |
|
|
167,841 |
|
|
|
43,595 |
|
|
26.0 |
% |
Elims/Corp |
|
|
(642 |
) |
|
|
112 |
|
|
n/a |
|
Elims/Corp |
|
|
(1,629 |
) |
|
|
(44 |
) |
|
n/a |
Total |
|
$ |
150,050 |
|
|
$ |
38,590 |
|
|
25.7 |
% |
|
Total |
|
$ |
409,869 |
|
|
$ |
99,983 |
|
|
24.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, 2019 |
|
|
|
Nine Months
Ended September 30, 2019 |
|
|
Net Sales |
|
Gross Profit |
|
Gross Margin |
|
|
|
Net Sales |
|
Gross Profit |
|
Gross Margin |
RDS |
|
$ |
96,943 |
|
|
$ |
25,868 |
|
|
26.7 |
% |
|
RDS |
|
$ |
269,740 |
|
|
$ |
74,314 |
|
|
27.6 |
% |
ASG |
|
|
63,217 |
|
|
|
16,487 |
|
|
26.1 |
% |
|
ASG |
|
|
187,068 |
|
|
|
50,861 |
|
|
27.2 |
% |
Elims/Corp |
|
|
(765 |
) |
|
|
(16 |
) |
|
n/a |
|
Elims/Corp |
|
|
(2,151 |
) |
|
|
64 |
|
|
n/a |
Total |
|
$ |
159,395 |
|
|
$ |
42,339 |
|
|
26.6 |
% |
|
Total |
|
$ |
454,657 |
|
|
$ |
125,239 |
|
|
27.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Select
Interior Concepts, Inc. |
|
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
(in
thousands) |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
net income (loss) |
|
$ |
531 |
|
$ |
2,458 |
|
|
$ |
(6,649 |
) |
|
$ |
3,747 |
|
|
Income tax
expense (benefit) |
|
|
655 |
|
|
1,417 |
|
|
|
(3,045 |
) |
|
|
2,055 |
|
|
Interest
expense |
|
|
3,546 |
|
|
4,342 |
|
|
|
11,072 |
|
|
|
13,151 |
|
|
Depreciation
and amortization |
|
|
5,796 |
|
|
6,048 |
|
|
|
17,164 |
|
|
|
18,729 |
|
|
EBITDA |
|
$ |
10,528 |
|
$ |
14,265 |
|
|
$ |
18,542 |
|
|
$ |
37,682 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity-based
compensation |
|
|
1,128 |
|
|
2,516 |
|
|
|
1,682 |
|
|
|
4,504 |
|
|
Purchase
accounting fair value adjustments |
|
|
- |
|
|
(1,986 |
) |
|
|
- |
|
|
|
(2,549 |
) |
|
Acquisition
and integration related costs |
|
|
118 |
|
|
14 |
|
|
|
1,484 |
|
|
|
2,219 |
|
|
Employee
related reorganization costs |
|
|
733 |
|
|
279 |
|
|
|
2,214 |
|
|
|
965 |
|
|
Other
non-recurring costs |
|
|
1,303 |
|
|
962 |
|
|
|
3,572 |
|
|
|
1,469 |
|
|
Strategic
alternatives costs |
|
|
235 |
|
|
958 |
|
|
|
1,462 |
|
|
|
1,847 |
|
|
Total addbacks |
|
$ |
3,517 |
|
$ |
2,743 |
|
|
$ |
10,414 |
|
|
$ |
8,455 |
|
|
Adjusted EBITDA |
|
$ |
14,045 |
|
$ |
17,008 |
|
|
$ |
28,956 |
|
|
$ |
46,137 |
|
|
Select
Interior Concepts, Inc. |
|
Reconciliation of Operating Expenses to Adjusted Operating
Expenses (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
(in
thousands) |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
$ |
33,446 |
|
$ |
36,129 |
|
|
$ |
96,850 |
|
$ |
109,014 |
|
Equity-based
compensation |
|
|
1,128 |
|
|
2,516 |
|
|
|
1,682 |
|
|
4,504 |
|
Acquisition
and integration related costs |
|
|
201 |
|
|
(6 |
) |
|
|
278 |
|
|
1,992 |
|
Employee
related reorganization costs |
|
|
699 |
|
|
279 |
|
|
|
2,059 |
|
|
965 |
|
Other
non-recurring costs |
|
|
709 |
|
|
201 |
|
|
|
2,651 |
|
|
1,212 |
|
Strategic
alternatives costs |
|
|
235 |
|
|
958 |
|
|
|
1,462 |
|
|
1,847 |
|
Total adjustments to operating expenses |
|
$ |
2,972 |
|
$ |
3,948 |
|
|
$ |
8,132 |
|
$ |
10,520 |
|
Adjusted operating expenses |
|
$ |
30,474 |
|
$ |
32,181 |
|
|
$ |
88,718 |
|
$ |
98,494 |
|
EBITDA is defined as consolidated net income before
interest, taxes and depreciation and amortization.
Adjusted EBITDA is defined as consolidated net income before (i)
interest expense, (ii) income tax expense, (iii) depreciation and
amortization expense, (iv) stock compensation expense, and (v)
adjustments for costs that are deemed to be transitional in nature
or not related to our core operations, such as severance and
employee related reorganization costs, purchase accounting fair
value adjustments, strategic alternatives costs, facility closure
costs, and professional, financing and legal fees related to
business acquisitions, or similar transitional costs and expenses
related to business investments, greenfield investments, and
integrating acquired businesses into our Company.
Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net
sales.
Adjusted operating expense is defined as consolidated operating
expense before stock compensation expense, and adjustments for
costs that are deemed to be transitional in nature or not related
to our core operations, such as severance and employee related
reorganization costs, strategic alternatives costs, facility
closure costs, and professional, financing and legal fees related
to business acquisitions, or similar transitional costs and
expenses related to business investments, greenfield investments,
and integrating acquired businesses into our Company.
Select Interior Concepts (NASDAQ:SIC)
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