FARO TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA | |||||||
(UNAUDITED) | |||||||
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, | ||||
(in thousands) | 2021 |
| 2020 |
| 2021 |
| 2020 |
Net (loss) income | $ (31,712) |
| $ 27,408 |
| $ (39,964) |
| $ 629 |
Interest expense (income), net | 1 |
| (747) |
| 55 |
| (340) |
Income tax expense (benefit) | 35,070 |
| (24,066) |
| 31,403 |
| (31,402) |
Depreciation and amortization | 3,836 |
| 3,608 |
| 13,396 |
| 14,239 |
EBITDA | 7,195 |
| 6,203 |
| 4,890 |
| (16,874) |
Other expense, net | 503 |
| 97 |
| 70 |
| 431 |
Stock-based compensation | 2,799 |
| 1,886 |
| 11,456 |
| 8,314 |
GSA sales adjustment (1) | — |
| — |
| — |
| 608 |
Other product charges (2) | — |
| 1,644 |
| — |
| 1,644 |
Restructuring costs (3) | 3,689 |
| 1,243 |
| 7,368 |
| 15,806 |
Adjusted EBITDA | $ 14,186 |
| $ 11,073 |
| $ 23,784 |
| $ 9,929 |
Adjusted EBITDA margin (4) | 14.2 % |
| 11.9 % |
| 7.0 % |
| 3.3 % |
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(1) Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the U.S. Government being overcharged under our General Services Administration ("GSA") Federal Supply Schedule contracts (the "Contracts") (the "GSA Matter"). During the twelve months ended December 31, 2020, we reduced our total sales by $0.6 million (the "GSA sales adjustment"). Effective as of February 25, 2021, as a result of the review, we entered into a settlement agreement with the GSA and have paid in full and final satisfaction of any and all claims, causes of actions, appeals and the like, including damages, costs, attorney's fees and interest arising under or related to the GSA Matter. |
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(2) During the fourth quarter of 2020, we recognized a charge related to the replacement of a prior generation product that was exhibiting lower than desired reliability as part of our ongoing focus on customer satisfaction. |
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(3) On February 14, 2020, our Board of Directors approved a global restructuring plan (the "Restructuring Plan"), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. In connection with the Restructuring Plan, during the twelve months ended December 31, 2021 and December 31, 2020 we recorded a pre-tax charge of approximately $7.4 million and $15.8 million, respectively, primarily consisting of severance and related benefits. |
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(4) Calculated as Adjusted EBITDA as a percentage of Non-GAAP total sales, which adjusts for the GSA sales adjustment. |