8-K
Blue Bird Corp (BLBD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 8, 2023
BLUE BIRD CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-36267 | 46-3891989 |
|---|---|---|
| (State or Other Jurisdiction of<br>Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
3920 Arkwright Road
2nd Floor
Macon, Georgia 31210
(Address of principal executive offices and zip code)
(478) 822-2801
(Registrant's telephone number including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $0.0001 par value | BLBD | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
The information regarding the results of operations and financial condition of Blue Bird Corporation (the “Company”) responsive to this Item 2.02, and contained in Exhibit 99.1 filed herewith, is incorporated into this Item 2.02 by reference.
ITEM 7.01 REGULATION FD DISCLOSURE
In accordance with General Instruction B.2. to Form 8-K, the following information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
The Company, which is the leading independent designer and manufacturer of school buses, announced it will present via live web cast its fiscal 2023 first quarter financial results on February 8, 2023. A live web cast is scheduled at approximately 4:30 p.m. Eastern Time. Speakers on the web cast will include: Matthew Stevenson, President and Chief Executive Officer; Razvan Radulescu, Chief Financial Officer; and other company leaders.
The webcast can be accessed through a link on the investor relations page of Company’s web site at http://blue-bird.com. Investors are advised to log on to the website at least 15 minutes prior to the start of the web cast to allow sufficient time for downloading any necessary software. The web cast will be available for replay at the same address approximately three hours following its conclusion, and will remain available for a period of at least 12 months.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit No. Description
99.1 Press release of the Company, dated February 8, 2023.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Blue Bird Corporation | ||
|---|---|---|
| Dated: | February 8, 2023 | /s/ Ted M. Scartz |
| Ted M. Scartz | ||
| Senior VP and General Counsel |
Exhibit Index
Exhibit No. Description
99.1 Press release of the Company, dated February 8, 2023.
Document
BLUE BIRD REPORTS FISCAL YEAR 2023
FIRST QUARTER RESULTS;
RECORD FIRST QUARTER REVENUES & EV SALES;
RAISES GUIDANCE FOR THE YEAR
Robust Backlog of $675M+ and 5,300+ Units
950+ EVs on the Road
Net Sales of $236M and GAAP Net Loss of $11M
Adjusted EBITDA of $(4)M with 1,957 Buses Sold
FY2023 Guidance Increased to Adj. EBITDA of ~$43M
MACON, Ga. (February 8, 2023) – Blue Bird Corporation (“Blue Bird”) (Nasdaq: BLBD), the leader in electric and low-emission school buses, announced today its fiscal 2023 first quarter results.
Highlights
| (in millions except Unit Sales and EPS data) | Three Months Ended December 31, 2022 | B/(W) 2022 | ||
|---|---|---|---|---|
| Unit Sales | 1,957 | 808 | ||
| GAAP Measures: | ||||
| Revenue | $ | 235.7 | $ | 106.5 |
| Net Loss | $ | (11.3) | $ | (7.2) |
| Diluted Loss per Share | $ | (0.35) | $ | (0.20) |
| Non-GAAP Measures1: | ||||
| Adjusted EBITDA | $ | (4.2) | $ | (7.8) |
| Adjusted Net Loss | $ | (9.8) | $ | (7.8) |
| Adjusted Diluted Loss per Share | $ | (0.30) | $ | (0.23) |
1 Reconciliation to relevant GAAP metrics shown below
“We made remarkable progress in the first quarter, as the overall operating environment continued to improve in line with our plan. During the quarter we worked through the majority of the legacy-priced units in the backlog that have caused margin compression over the past several quarters. The Blue Bird team continued executing a rigorous plan to improve operations, reduce fixed costs, and recover economics through pricing. Therefore, we are well positioned for a significant recovery over the next several quarters," said Matthew Stevenson, President and CEO of Blue Bird Corporation. Demand for Blue Bird’s best-in-class school buses remains strong and we have expanded our leadership position in zero-emission school buses, realizing exceptional growth in both electric school bus bookings, up 130%, and firm order backlog, at more than 385 electric school buses as we ended the first quarter. Our order backlog will grow considerably over the next several months as orders are placed tied to the EPA’s 2022 Clean School Bus Rebate Program, which will greatly accelerate the adoption of zero-emission student transportation across all 50 U.S. states. The EPA awarded nearly $1 billion in funding to almost 400 school districts in the first year of the Clean School Bus Rebate Program. This funding alone will generate additional orders for an estimated 500-700 Blue Bird electric buses translating into a minimum of $200 million of additional revenue.”
FY2023 Guidance Increased
"We are very excited with the FY2023-Q1 results, above our guidance for both Revenues and EBITDA” said Razvan Radulescu, CFO of Blue Bird Corporation. “Our turnaround is working and we expect to return to historical profitability during FY23, with increasing
levels of revenues and performance each quarter, as shown in the forecast shared during the earnings call. We are raising full year fiscal 2023 guidance to Net Revenue of just over $1 Billion, Adj. EBITDA of $40-46 million and Adj. Free Cash Flow of $5-11 million. Additionally, we are reconfirming our long-term outlook of profitable growth towards $2 billion in revenues and Adjusted EBITDA margins of 12%, or $250 million.”
Fiscal 2023 First Quarter Results
Net Sales
Net sales were $235.7 million for the first quarter of fiscal 2023, an increase of $106.5 million, or 82.4%, from prior year period. Bus sales increased $100.8 million, reflecting a 11.4% increase in average sales price per unit, resulting from pricing actions taken by management to partially offset increases in inventory purchase costs as well as product and customer mix change, and a 70.3% increase in units booked. In the first quarter of fiscal 2023, 1,957 units were booked compared to 1,149 units booked for the same period in fiscal 2022. Additionally, Parts sales increased $5.7 million for the first quarter of fiscal 2023 compared to the first quarter of fiscal 2022. This increase is primarily attributed to pricing actions taken by management to offset increases in purchased parts costs and increased inventory availability as supply chain constraints continued to improve during the first quarter of FY2023 relative to the first quarter of FY2022.
Gross Profit
First quarter gross profit of $7.5 million represented a decrease of $8.7 million from the first quarter of last year. The decrease was primarily driven by only partial price increases on old backlog units, which were more than offset by increases in manufacturing costs attributable to a) increased raw materials costs resulting from ongoing inflationary pressures and b) ongoing supply chain disruptions that resulted in higher purchase costs for components and freight.
Net Loss
Net loss was $11.3 million for the first quarter of fiscal 2023, which was a $7.2 million increase compared to the same period last year. The increase in net loss was primarily driven by the $8.7 million decrease in gross profit, discussed above. Partially offsetting this was a decrease of $1.4 million in SG&A, largely due to several cost cutting and operational transformation initiatives.
Adjusted Net Loss
Adjusted Net Loss was $9.8 million, representing an increase of $7.8 million compared with the same period last year. This is primarily due to the $7.2 million increase in net loss, discussed above.
Adjusted EBITDA
Adjusted EBITDA was $(4.2) million, which was a decrease of $7.8 million compared with the first quarter last year. This decrease primarily results from the $7.2 million increase in net loss, discussed above.
Conference Call Details
Blue Bird will discuss its first quarter 2023 results in a conference call at 4:30 PM ET today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the Investor Relations portion of Blue Bird's website at www.blue-bird.com.
•Webcast participants should log on and register at least 15 minutes prior to the start time on the Investor Relations homepage of Blue Bird’s website at http://investors.blue-bird.com. Click the link in the events box on the Investor Relations landing page.
•Participants desiring audio only should dial 1-844-826-3035 or 1-412-317-5195
A replay of the webcast will be available approximately two hours after the call concludes via the same link on Blue Bird’s website.
About Blue Bird Corporation
Blue Bird (NASDAQ: BLBD) is recognized as a technology leader and innovator of school buses since its founding in 1927. Our dedicated team members design, engineer and manufacture school buses with a singular focus on safety, reliability, and durability. Blue Bird buses carry the most precious cargo in the world – the majority of 25 million children twice a day – making us the most trusted brand in the industry. The company is the proven leader in low- and zero-emission school buses with more than 20,000 propane, natural gas, and electric powered buses in operation today. Blue Bird is transforming the student transportation industry through cleaner energy solutions. For more information on Blue Bird's complete product and service portfolio, visit www.blue-bird.com.
Key Non-GAAP Financial Measures We Use to Evaluate Our Performance
This press release includes the following non-GAAP financial measures “Adjusted EBITDA,” "Adjusted EBITDA Margin," "Adjusted Net Income," "Adjusted Diluted Earnings per Share," “Free Cash Flow” and “Adjusted Free Cash Flow”. Adjusted EBITDA and Free Cash Flow are financial metrics that are utilized by management and the board of directors to determine (a) the annual cash bonus payouts, if any, to be made to certain members of management based upon the terms of the Company’s Management Incentive Plan, and (b) whether the performance criteria have been met for the vesting of certain equity awards granted annually to certain members of management based upon the terms of the Company’s Omnibus Equity Incentive Plan. Additionally, consolidated EBITDA, which is an adjusted EBITDA metric defined by our Amended Credit Agreement that could differ from Adjusted EBITDA discussed above as the adjustments to the calculations are not uniform, is used to determine the Company's ongoing compliance with several financial covenant requirements, including being utilized in the denominator of the calculation of the Total Net Leverage Ratio. Accordingly, management views these non-GAAP financial metrics as key for the above purposes and as a useful way to evaluate the performance of our operations as discussed further below.
Adjusted EBITDA is defined as net income or loss prior to interest income; interest expense including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents interest expense on lease liabilities; income taxes; and depreciation and amortization including the component of operating lease expense (which is presented as a single operating expense in selling, general and administrative expenses in our U.S. GAAP financial statements) that represents amortization charges on right-of-use lease assets; as adjusted for certain non-cash charges or credits that we may record on a recurring basis such as share-based compensation expense and unrealized gains or losses on certain derivative financial instruments; net gains or losses on the disposal of assets as well as certain charges such as (i) significant product design changes; (ii) transaction related costs; (iii) discrete expenses related to major cost cutting and/or operational transformation initiatives; or (iv) costs directly attributed to the COVID-19 pandemic. While certain of the charges that are added back in the Adjusted EBITDA calculation, such as transaction related costs and operational transformation and major product redesign initiatives, represent operating expenses that may be recorded in more than one annual period, the significant project or transaction giving rise to such expenses is not considered to be indicative of the Company’s normal operations. Accordingly, we believe that these, as well as the other credits and charges that comprise the amounts utilized in the determination of Adjusted EBITDA described above, should not be used in evaluating the Company’s ongoing annual operating performance.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA Margin are not measures of performance defined in accordance with U.S. GAAP. The measures are used as a supplement to U.S. GAAP results in evaluating certain aspects of our business, as described below.
We believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share are useful to investors in evaluating our performance because the measures consider the performance of our ongoing operations, excluding decisions made with respect to capital investment, financing, and certain other significant initiatives or transactions as outlined in the preceding paragraph. We believe the non-GAAP measures offer additional financial metrics that, when coupled with the GAAP results and the reconciliation to GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business.
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Diluted Earnings per Share should not be considered as alternatives to net income or GAAP earnings per share as an indicator of our performance or as alternatives to any other measure prescribed by GAAP as there are limitations to using such non-GAAP measures. Although we believe the non-GAAP measures may enhance an evaluation of our operating performance based on recent revenue generation and product/overhead cost control because they exclude the impact of prior decisions made about capital investment, financing, and other expenses, (i) other companies in Blue Bird’s industry may define Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share differently than we do and, as a result, they may not be comparable to similarly titled measures used by other companies in Blue Bird’s
industry, and (ii) Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share exclude certain financial information that some may consider important in evaluating our performance.
We compensate for these limitations by providing disclosure of the differences between Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share and GAAP results, including providing a reconciliation to GAAP results, to enable investors to perform their own analysis of our operating results.
Our measures of “Free Cash Flow” and "Adjusted Free Cash Flow" are used in addition to and in conjunction with results presented in accordance with GAAP and free cash flow and adjusted free cash flow should not be relied upon to the exclusion of GAAP financial measures. Free cash flow and adjusted free cash flow reflect an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. We strongly encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
We define Free Cash Flow as total cash provided by/used in operating activities as adjusted for net cash paid for the acquisition of fixed assets and intangible assets. We use Free Cash Flow, and ratios based on Free Cash Flow, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe it is a more conservative measure of cash flow since purchases of fixed assets and intangible assets are a necessary component of ongoing operations.
Forward Looking Statements
This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for our business. Specifically, forward-looking statements include statements in this press release regarding guidance, seasonality, product mix and gross profits and may include statements relating to:
•Inherent limitations of internal controls impacting financial statements
•Growth opportunities
•Future profitability
•Ability to expand market share
•Customer demand for certain products
•Economic conditions (including tariffs) that could affect fuel costs, commodity costs, industry size and financial conditions of our dealers and suppliers
•Labor or other constraints on the Company’s ability to maintain a competitive cost structure
•Volatility in the tax base and other funding sources that support the purchase of buses by our end customers
•Lower or higher than anticipated market acceptance for our products
•Other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions
These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The factors described above, as well as risk factors described in reports filed with the SEC by us (available at www.sec.gov), could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements.
Contact:
Mark Benfield
Investor Relations
(478) 822-2315
Mark.Benfield@blue-bird.com
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in thousands of dollars, except for share data) | December 31, 2022 | October 1, 2022 | ||
|---|---|---|---|---|
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 5,664 | $ | 10,479 |
| Accounts receivable, net | 9,125 | 12,534 | ||
| Inventories | 129,120 | 142,977 | ||
| Other current assets | 14,048 | 8,486 | ||
| Total current assets | $ | 157,957 | $ | 174,476 |
| Restricted Cash | $ | 236 | $ | — |
| Property, plant and equipment, net | 99,110 | 100,608 | ||
| Goodwill | 18,825 | 18,825 | ||
| Intangible assets, net | 46,931 | 47,433 | ||
| Equity investment in affiliate | 10,727 | 10,659 | ||
| Deferred tax assets | 13,892 | 10,907 | ||
| Finance lease right-of-use assets | 1,560 | 1,736 | ||
| Other assets | 2,367 | 1,482 | ||
| Total assets | $ | 351,605 | $ | 366,126 |
| Liabilities and Stockholders' (Deficit) Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ | 124,789 | $ | 107,937 |
| Warranty | 6,525 | 6,685 | ||
| Accrued expenses | 18,713 | 16,386 | ||
| Deferred warranty income | 7,238 | 7,205 | ||
| Finance lease obligations | 571 | 566 | ||
| Other current liabilities | 6,681 | 6,195 | ||
| Current portion of long-term debt | 19,800 | 19,800 | ||
| Total current liabilities | $ | 184,317 | $ | 164,774 |
| Long-term liabilities | ||||
| Revolving credit facility | $ | 5,000 | $ | 20,000 |
| Long-term debt | 124,341 | 130,390 | ||
| Warranty | 9,055 | 9,285 | ||
| Deferred warranty income | 12,052 | 11,590 | ||
| Deferred tax liabilities | 72 | — | ||
| Finance lease obligations | 1,428 | 1,574 | ||
| Other liabilities | 8,633 | 11,107 | ||
| Pension | 15,903 | 16,024 | ||
| Total long-term liabilities | $ | 176,484 | $ | 199,970 |
| Stockholders' (deficit) equity | ||||
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares outstanding at December 31, 2022 and October 1, 2022 | $ | — | $ | — |
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 32,032,067 and 32,024,911 shares outstanding at December 31, 2022 and October 1, 2022, respectively | 3 | 3 | ||
| Additional paid-in capital | 173,592 | 173,103 | ||
| Accumulated deficit | (90,806) | (79,512) | ||
| Accumulated other comprehensive loss | (41,703) | (41,930) | ||
| Treasury stock, at cost, 1,782,568 shares at December 31, 2022 and October 1, 2022 | (50,282) | (50,282) | ||
| Total stockholders' (deficit) equity | $ | (9,196) | $ | 1,382 |
| Total liabilities and stockholders' (deficit) equity | $ | 351,605 | $ | 366,126 |
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars except for share data) | December 31, 2022 | January 1, 2022 | ||
| Net sales | $ | 235,732 | $ | 129,223 |
| Cost of goods sold | 228,275 | 113,026 | ||
| Gross profit | $ | 7,457 | $ | 16,197 |
| Operating expenses | ||||
| Selling, general and administrative expenses | 16,832 | 18,233 | ||
| Operating loss | $ | (9,375) | $ | (2,036) |
| Interest expense | (4,196) | (3,082) | ||
| Other (expense) income, net | (236) | 736 | ||
| Loss on debt modification | (537) | (561) | ||
| Loss before income taxes | $ | (14,344) | $ | (4,943) |
| Income tax benefit | 2,981 | 1,762 | ||
| Equity in net income (loss) of non-consolidated affiliate | 69 | (901) | ||
| Net loss | $ | (11,294) | $ | (4,082) |
| Loss per share: | ||||
| Basic weighted average shares outstanding | 32,026,311 | 28,118,450 | ||
| Diluted weighted average shares outstanding | 32,026,311 | 28,118,450 | ||
| Basic loss per share | $ | (0.35) | $ | (0.15) |
| Diluted loss per share | $ | (0.35) | $ | (0.15) |
BLUE BIRD CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 31, 2022 | January 1, 2022 | ||
| Cash flows from operating activities | ||||
| Net loss | $ | (11,294) | $ | (4,082) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||
| Depreciation and amortization expense | 3,361 | 3,288 | ||
| Non-cash interest expense | 417 | 1,143 | ||
| Share-based compensation expense | 589 | 1,673 | ||
| Equity in net (income) loss of non-consolidated affiliate | (69) | 901 | ||
| Loss on disposal of fixed assets | — | 9 | ||
| Deferred income tax benefit | (2,986) | (1,704) | ||
| Amortization of deferred actuarial pension losses | 299 | 291 | ||
| Loss on debt modification | 537 | 561 | ||
| Changes in assets and liabilities: | ||||
| Accounts receivable | 3,409 | 3,827 | ||
| Inventories | 13,857 | (16,747) | ||
| Other assets | (5,227) | (2,554) | ||
| Accounts payable | 16,572 | (11,115) | ||
| Accrued expenses, pension and other liabilities | 461 | (8,568) | ||
| Total adjustments | $ | 31,220 | $ | (28,995) |
| Total cash provided by (used in) operating activities | $ | 19,926 | $ | (33,077) |
| Cash flows from investing activities | ||||
| Cash paid for fixed assets | $ | (1,146) | $ | (1,570) |
| Total cash used in investing activities | $ | (1,146) | $ | (1,570) |
| Cash flows from financing activities | ||||
| Revolving credit facility borrowings | $ | 5,000 | $ | 35,000 |
| Revolving credit facility repayments | (20,000) | (75,000) | ||
| Term loan repayments | (4,950) | (3,713) | ||
| Principal payments on finance leases | (141) | (328) | ||
| Cash paid for debt costs | (3,211) | (2,468) | ||
| Sale of common stock | — | 75,000 | ||
| Repurchase of common stock in connection with stock award exercises | (57) | (1,484) | ||
| Total cash (used in) provided by financing activities | $ | (23,359) | $ | 27,007 |
| Change in cash, cash equivalents, and restricted cash | (4,579) | (7,640) | ||
| Cash, cash equivalents, and restricted cash at beginning of period | 10,479 | 11,709 | ||
| Cash, cash equivalents, and restricted cash at end of period | $ | 5,900 | $ | 4,069 |
Reconciliation of Net Loss to Adjusted EBITDA
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands of dollars) | December 31, 2022 | January 1, 2022 | ||||
| Net loss | $ | (11,294) | $ | (4,082) | ||
| Adjustments: | ||||||
| Interest expense, net (1) | 4,289 | 3,157 | ||||
| Income tax benefit | (2,981) | (1,762) | ||||
| Depreciation, amortization, and disposals (2) | 3,815 | 3,523 | ||||
| Operational transformation initiatives | 800 | 1 | ||||
| Share-based compensation expense | 589 | 1,673 | ||||
| Product redesign initiatives | — | 253 | ||||
| Restructuring charges | — | 246 | ||||
| Costs directly attributed to the COVID-19 pandemic (3) | — | 29 | ||||
| Loss on debt modification | 537 | 561 | ||||
| Adjusted EBITDA | $ | (4,245) | $ | 3,599 | ||
| Adjusted EBITDA Margin (percentage of net sales) | (1.8) | % | 2.8 | % |
(1) Includes $0.1 million for both fiscal periods, representing interest expense on operating lease liabilities, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.
(2) Includes $0.4 million and $0.2 million for the three months ended December 31, 2022 and January 1, 2022, respectively, representing amortization charges on right-of-use lease assets, which are a component of lease expense and presented as a single operating expense in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.
(3) Primarily represents costs incurred for third party cleaning services and personal protective equipment for our employees in response to the COVID-19 pandemic.
Reconciliation of Free Cash Flow to Adjusted Free Cash Flow
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 31, 2022 | January 1, 2022 | ||
| Net cash provided by (used in) operating activities | $ | 19,926 | $ | (33,077) |
| Cash paid for fixed assets | (1,146) | (1,570) | ||
| Free cash flow | $ | 18,780 | $ | (34,647) |
| Cash paid for product redesign initiatives | — | 253 | ||
| Cash paid for operational transformation initiatives / Other | 800 | 1 | ||
| Cash paid for restructuring charges | — | 246 | ||
| Cash paid for costs directly attributed to COVID-19 | — | 29 | ||
| Adjusted free cash flow | 19,580 | (34,118) |
Reconciliation of Net Loss to Adjusted Net (Loss) Income
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands of dollars) | December 31, 2022 | January 1, 2022 | ||
| Net loss | $ | (11,294) | $ | (4,082) |
| Adjustments, net of tax benefit or expense (1) | ||||
| Operational transformation initiatives | 632 | 1 | ||
| Product redesign initiatives | — | 190 | ||
| Share-based compensation expense | 465 | 1,255 | ||
| Restructuring charges | — | 185 | ||
| Costs directly attributed to the COVID-19 pandemic (2) | — | 22 | ||
| Loss on debt modification | 424 | 421 | ||
| Adjusted net (loss) income, non-GAAP | $ | (9,772) | $ | (2,010) |
(1) Amounts are net of estimated tax rates of 21% for the three months ended December 31, 2022, and 25% for the three months ended January 1, 2021.
(2) Primarily costs incurred for third party cleaning services and personal protective equipment for our employees in response to the COVID-19 pandemic.
Reconciliation of Diluted EPS to Adjusted Diluted EPS
| Three Months Ended | ||||
|---|---|---|---|---|
| December 31, 2022 | January 1, 2022 | |||
| Diluted loss per share | $ | (0.35) | $ | (0.15) |
| One-time charge adjustments, net of tax benefit or expense | 0.05 | 0.08 | ||
| Adjusted diluted (loss) earnings per share, non-GAAP | $ | (0.30) | $ | (0.07) |
| Adjusted weighted average dilutive shares outstanding | 32,243,213 | 28,395,912 |
9