Nordson Company Stories Fiscal 12 months 2020 Fourth Quarter and Full 12 months Outcomes

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Nordson Corporation Reports Fiscal Year 2020 Fourth Quarter and Full Year Results

WESTLAKE, Ohio–(BUSINESS WIRE)–Nordson Corporation (Nasdaq: NDSN) today reported results for the fiscal fourth quarter ended October 31, 2020. Sales were $559 million, a 5% decrease compared to the prior year’s fourth quarter sales of $585 million. Continued strength in test and inspection product lines serving electronics end markets and growth in our medical product lines was offset by weakness in industrial and automotive end markets. The change in fourth quarter 2020 sales included a decrease of approximately 7% organic volume, acquisitions contributed 1%, and a favorable effect from currency translation of approximately 2%.

Operating profit in the quarter was $37 million. As the company announced on December 3, 2020, it intends to divest the non-strategic screws and barrels product line within the Industrial Precision Solutions segment, which will strengthen the company’s ongoing earnings and profitable growth profile. This strategic portfolio transaction required a one-time, non-cash asset impairment charge of $87 million, which was recognized during the fourth quarter. Excluding this non-cash impairment charge and other non-recurring charges associated with cost structure simplification actions and amortization of the step-up in acquired inventory, adjusted operating profit was $130 million, or 23% of sales. EBITDA, which is defined as adjusted operating profit plus depreciation and amortization, in the quarter totaled $159 million, or 29% of sales, which represents a decrease of 5% from the prior year EBITDA of $168 million.

Net income was $18 million, and GAAP diluted earnings per share were $0.31. Adjusted earnings, which excludes non-recurring charges and discrete tax benefits of $2 million, totaled $93 million, or $1.59 per share, an 11% decrease from the prior year adjusted earnings of $104 million.

Commenting on the company’s fiscal fourth quarter 2020 results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “I am proud of the dedication shown by our global team through their ongoing commitment to superior customer service and continued deployment of the NBS Next growth framework. Fourth quarter sales were the strongest quarter of the year. We also continued to make progress on strategically positioning our portfolio for sustainable long-term growth with the acquisition of vivaMOS, Ltd. and the recently announced divestiture of the screws and barrels product line. This combination of focusing on Nordson strengths and prioritizing future profitable growth opportunities has us well positioned heading into fiscal year 2021.”

Fourth Quarter Segment Results

Industrial Precision Solutions sales of $308 million decreased approximately 8% compared to the prior year fourth quarter, driven by a 10% organic decrease partially offset by favorable currency impacts. This organic sales decline was in part driven by weaker demand in industrial and automotive end markets, where we had record sales in the prior year fourth quarter. Operating profit totaled $0.4 million in the quarter, including an $87 million non-cash impairment charge for the pending divestiture of the screws and barrels product line and $4 million in structural cost reduction actions. Adjusted operating profit, excluding these non-recurring items, was $92 million, or 30% of sales, equal to prior year adjusted operating profit margin.

Advanced Technology Solutions sales of $250 million increased approximately 1% compared to the prior year fourth quarter. Acquisitions and favorable currency impacts increased sales by approximately 2% and 1%, respectively, which was principally offset by organic volume decreases of 3%. Continued sales growth in test and inspection product lines, coupled with stable demand in medical product lines, was offset by weaker demand in fluid dispense product lines serving industrial end markets. Operating profit, which included $1 million of the step-up in acquired inventory amortization, totaled $51 million. Adjusted operating profit was $52 million, or 21% of sales, which was down slightly compared to prior year profits.

Fiscal 2020 Full Year Results

Sales for the fiscal year ended October 31, 2020 were $2.1 billion, a decrease of 3% compared to the same period a year ago. This change in sales included a decrease in organic volume of 4%, offset by growth related to acquisitions. The full year impact of currency translation differences was not significant. Full year operating profit was $350 million and diluted earnings per share were $4.27. Excluding the non-cash impairment charge, structural cost reduction expenses, the step up in value of acquired inventory, and discrete tax expense, adjusted operating profit was $454 million and adjusted diluted earnings per share were $5.48, a 7% decrease from the prior year adjusted diluted earnings per share of $5.87.

Outlook

“Throughout this unprecedented year, the safety of our people and the value they deliver to our customers remained among our top priorities,” Nagarajan stated. “We continue to make progress by deploying the NBS Next growth framework and aligning the organization to remain invested in our key strengths during this unique macroeconomic environment. The commitment of our employees combined with the resilience of our diverse end markets resulted in sound financial performance in fiscal 2020. We are entering fiscal 2021 from this solid foundation, and we have strong backlog entering the fiscal first quarter. I am confident in our ability to deliver long-term profitable growth.”

Backlog for the quarter ended October 31, 2020 was approximately $416 million, an increase of 5% compared to the same period a year ago, and the trailing twelve-week order entry is 5% above prior year levels. Based on these current order entry trends, backlog amounts and the correlation to sales timing, we expect the fiscal 2021 first quarter sales growth to be approximately 2 to 3%, with adjusted earnings growth in the range of 15 to 20% as compared to fiscal 2020 first quarter.

Nordson management will provide additional commentary on these results and outlook during its previously announced webcast on Wednesday, December 16, 2020 at 8:30 a.m. eastern time, which can be accessed at https://investors.nordson.com. For persons unable to listen to the live broadcast, a replay will be available for 14 days after the event. Information about Nordson’s investor relations and shareholder services is available from Lara Mahoney, vice president, investor relations and corporate communications at (440) 204-9985 or lara.mahoney@nordson.com.

Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “continue,” “target,” or the negative of such terms or comparable terminology. These statements reflect management’s current expectations and involve a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, U.S. and international economic conditions, financial, and market conditions, currency exchange rates and devaluations, possible acquisitions including the Company’s ability to successfully integrate acquisitions; the Company’s ability to successfully divest or dispose of businesses that are deemed not to fit with its strategic plan; the effects of changes in U.S. trade policy and trade agreements; the effects of changes in tax law; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus (COVID-19) pandemic and the other factors discussed in Item 1A (Risk Factors) in the Company’s most recently filed Annual Report on Form 10-K and in its Forms 10-Q filed with the Securities and Exchange Commission, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement in this press release.

Nordson Corporation engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment, all supported by application expertise and direct global sales and service. Nordson serves a wide variety of consumer non-durable, durable and technology end markets including packaging, nonwovens, electronics, medical, appliances, energy, transportation, construction, and general product assembly and finishing. Founded in 1954 and headquartered in Westlake, Ohio, the Company has operations and support offices in more than 35 countries. Visit Nordson on the web at http://www.nordson.com, @Nordson_Corp, or www.facebook.com/nordson.

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

(Dollars in thousands except for per-share amounts)

 

 

Three months ended

 

Twelve months ended

 

10/31/2020

 

10/31/2019

 

10/31/2020

 

10/31/2019

 

 

 

 

 

 

 

 

Sales

$

558,525

 

 

$

585,451

 

 

$

2,121,100

 

 

$

2,194,226

 

Cost of sales

261,657

 

 

266,476

 

 

990,632

 

 

1,002,123

 

Gross profit

296,868

 

 

318,975

 

 

1,130,468

 

 

1,192,103

 

Gross margin %

53.2

%

 

54.5

%

 

53.3

%

 

54.3

%

 

 

 

 

 

 

 

 

Selling & administrative expenses

172,129

 

 

179,315

 

 

693,552

 

 

708,990

 

Assets held for sale impairment charge

87,371

 

 

 

 

87,371

 

 

 

Operating profit

37,368

 

 

139,660

 

 

349,545

 

 

483,113

 

 

 

 

 

 

 

 

 

Interest expense – net

(6,432)

 

 

(10,216)

 

 

(30,479)

 

 

(45,301)

 

Other expense – net

(4,634)

 

 

(2,162)

 

 

(17,577)

 

 

(6,708)

 

Income before income taxes

26,302

 

 

127,282

 

 

301,489

 

 

431,104

 

 

 

 

 

 

 

 

 

Income taxes

7,827

 

 

24,609

 

 

51,950

 

 

94,013

 

 

 

 

 

 

 

 

 

Net Income

$

18,475

 

 

$

102,673

 

 

$

249,539

 

 

$

337,091

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

Basic

57,988

 

 

57,456

 

 

57,757

 

 

$

57,462

 

Diluted

58,679

 

 

58,255

 

 

58,473

 

 

58,202

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic earnings

$

0.32

 

 

$

1.79

 

 

$

4.32

 

 

$

5.87

 

Diluted earnings

$

0.31

 

 

$

1.76

 

 

$

4.27

 

 

$

5.79

 

NORDSON CORPORATION

CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands)

 

 

October 31,

2020

 

October 31,

2019

 

 

 

 

Cash and cash equivalents

$

208,293

 

 

$

151,164

 

Receivables – net

471,873

 

 

530,765

 

Inventories – net

277,033

 

 

283,399

 

Other current assets

43,798

 

 

45,867

 

Assets held for sale

19,615

 

 

 

Total current assets

1,020,612

 

 

1,011,195

 

 

 

 

 

Property, plant & equipment – net

358,618

 

 

398,895

 

Goodwill

1,713,354

 

 

1,614,739

 

Other assets

582,072

 

 

491,618

 

 

$

3,674,656

 

 

$

3,516,447

 

 

 

 

 

Current maturities of long-term debt

$

38,043

 

 

$

168,738

 

Accounts payable and accrued liabilities

311,898

 

 

308,888

 

Liabilities held for sale

13,148

 

 

 

Total current liabilities

363,089

 

 

477,626

 

 

 

 

 

Long-term debt

1,067,952

 

 

1,075,404

 

Other liabilities

484,624

 

 

382,372

 

Total shareholders’ equity

1,758,991

 

 

1,581,045

 

 

$

3,674,656

 

 

$

3,516,447

 

 

 

 

 

NORDSON CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

(Dollars in thousands)

 

 

Twelve Months Ended

 

October 31,

2020

 

October 31,

2019

 

 

 

 

Cash flows from operating activities:

 

 

 

Net Income

$

249,539

 

 

$

337,091

 

Depreciation and amortization

113,302

 

 

110,244

 

Impairment loss on assets held for sale

87,371

 

 

 

Other non-cash items

5,278

 

 

19,606

 

Changes in working capital

46,931

 

 

(84,048)

 

Net cash provided by operating activities

502,421

 

 

382,893

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Additions to property, plant and equipment

(50,535)

 

 

(64,244)

 

Acquisitions

(142,414)

 

 

(12,486)

 

Other – net

(1,160)

 

 

441

 

Net cash used in investing activities

(194,109)

 

 

(76,289)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Repayment of long-term debt

(153,816)

 

 

(69,580)

 

Repayment of finance lease obligations

(7,605)

 

 

(4,859)

 

Dividends paid

(88,347)

 

 

(82,145)

 

Issuance of common shares

50,853

 

 

26,020

 

Purchase of treasury shares

(52,614)

 

 

(120,510)

 

Net cash used in financing activities

(251,529)

 

 

(251,074)

 

 

 

 

 

Effective of exchange rate change on cash

346

 

 

(44)

 

Net change in cash and cash equivalents

57,129

 

 

55,486

 

 

 

 

 

Cash and cash equivalents:

 

 

 

Beginning of period

151,164

 

 

95,678

 

End of period

$

208,293

 

 

$

151,164

 

 

 

 

 

NORDSON CORPORATION

SALES BY GEOGRAPHIC SEGMENT (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

Sales Variance

 

Oct 31,

2020

 

Oct 31,

2019

 

Organic

 

Acquisitions

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

308,385

 

 

$

336,451

 

 

(10.0)

%

 

%

 

1.7

%

 

(8.3)

%

Advanced technology solutions

250,140

 

 

249,000

 

 

(3.1)

%

 

2.2

%

 

1.4

%

 

0.5

%

Total Sales

$

558,525

 

 

$

585,451

 

 

(7.1)

%

 

0.9

%

 

1.6

%

 

(4.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

United States

$

194,701

 

 

$

206,874

 

 

(7.1)

%

 

1.2

%

 

%

 

(5.9)

%

Americas

35,452

 

 

44,503

 

 

(22.5)

%

 

6.4

%

 

(4.2)

%

 

(20.3)

%

Europe

142,082

 

 

145,946

 

 

(7.4)

%

 

0.1

%

 

4.7

%

 

(2.6)

%

Japan

36,248

 

 

37,190

 

 

(4.5)

%

 

%

 

2.0

%

 

(2.5)

%

Asia Pacific

150,042

 

 

150,938

 

 

(2.9)

%

 

%

 

2.3

%

 

(0.6)

%

Total Sales

$

558,525

 

 

$

585,451

 

 

(7.1)

%

 

0.9

%

 

1.6

%

 

(4.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

Sales Variance

 

Oct 31,

2020

 

Oct 31,

2019

 

Organic

 

Acquisitions

 

Currency

 

Total

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

1,143,423

 

 

$

1,208,376

 

 

(4.8)

%

 

%

 

(0.6)

%

 

(5.4)

%

Advanced technology solutions

977,677

 

 

985,850

 

 

(2.3)

%

 

1.4

%

 

0.1

%

 

(0.8)

%

Total Sales

$

2,121,100

 

 

$

2,194,226

 

 

(3.7)

%

 

0.6

%

 

(0.2)

%

 

(3.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

SALES BY GEOGRAPHIC REGION

 

 

 

 

 

 

 

 

 

 

 

United States

$

755,642

 

 

$

758,383

 

 

(1.1)

%

 

0.7

%

 

%

 

(0.4)

%

Americas

141,473

 

 

167,661

 

 

(14.8)

%

 

3.0

%

 

(3.8)

%

 

(15.6)

%

Europe

536,636

 

 

571,596

 

 

(6.4)

%

 

0.4

%

 

(0.1)

%

 

(6.1)

%

Japan

126,601

 

 

126,756

 

 

(2.1)

%

 

0.2

%

 

1.8

%

 

(0.1)

%

Asia Pacific

560,748

 

 

569,830

 

 

(1.7)

%

 

0.2

%

 

(0.1)

%

 

(1.6)

%

Total Sales

$

2,121,100

 

 

$

2,194,226

 

 

(3.7)

%

 

0.6

%

 

(0.2)

%

 

(3.3)

%

 

 

 

 

 

 

 

 

 

 

 

 

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES – ADJUSTED OPERATING PROFIT AND EBITDA (Unaudited)

(Dollars in thousands)

 

 

Three months ended

 

Twelve months ended

 

October 31,

2020

 

October 31,

2019

 

October 31,

2020

 

October 31,

2019

SALES BY SEGMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

308,385

 

 

 

 

$

336,451

 

 

 

 

$

1,143,423

 

 

 

 

$

1,208,376

 

 

 

Advanced technology solutions

250,140

 

 

 

 

249,000

 

 

 

 

977,677

 

 

 

 

985,850

 

 

 

Total sales

$

558,525

 

 

 

 

$

585,451

 

 

 

 

$

2,121,100

 

 

 

 

$

2,194,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

425

 

 

 

 

$

99,353

 

 

 

 

$

208,028

 

 

 

 

$

329,054

 

 

 

Advanced technology solutions

50,674

 

 

 

 

54,727

 

 

 

 

191,602

 

 

 

 

205,609

 

 

 

Corporate

(13,731)

 

 

 

 

(14,420)

 

 

 

 

(50,085)

 

 

 

 

(51,550)

 

 

 

Total operating profit

$

37,368

 

 

 

 

$

139,660

 

 

 

 

$

349,545

 

 

 

 

$

483,113

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

91,419

 

 

 

 

$

314

 

 

 

 

$

94,896

 

 

 

 

$

2,123

 

 

 

Advanced technology solutions

1,424

 

 

 

 

733

 

 

 

 

7,807

 

 

 

 

1,568

 

 

 

Corporate

 

 

 

 

681

 

 

 

 

1,387

 

 

 

 

873

 

 

 

Total adjustments

$

92,843

 

 

 

 

$

1,728

 

 

 

 

$

104,090

 

 

 

 

$

4,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADJUSTED OPERATING PROFIT (NON-GAAP)

 

 

% of

Sales

 

 

 

% of

Sales

 

 

 

% of

Sales

 

 

 

% of

Sales

Industrial precision solutions

$

91,844

 

 

30

%

 

$

99,667

 

 

30

%

 

$

302,924

 

 

26

%

 

$

331,177

 

 

27

%

Advanced technology solutions

52,098

 

 

21

%

 

55,460

 

 

22

%

 

199,409

 

 

20

%

 

207,177

 

 

21

%

Corporate

(13,731)

 

 

 

 

(13,739)

 

 

 

 

(48,698)

 

 

 

 

(50,677)

 

 

 

Total operating profit – adjusted

$

130,211

 

 

23

%

 

$

141,388

 

 

24

%

 

$

453,635

 

 

21

%

 

$

487,677

 

 

22

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPRECIATION & AMORTIZATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

9,951

 

 

 

 

$

9,669

 

 

 

 

$

38,939

 

 

 

 

$

38,333

 

 

 

Advanced technology solutions

16,710

 

 

 

 

15,462

 

 

 

 

64,543

 

 

 

 

62,836

 

 

 

Corporate

2,477

 

 

 

 

1,782

 

 

 

 

9,820

 

 

 

 

9,075

 

 

 

Total depreciation & amortization

$

29,138

 

 

 

 

$

26,913

 

 

 

 

$

113,302

 

 

 

 

$

110,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (NON-GAAP)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial precision solutions

$

101,795

 

 

33

%

 

$

109,336

 

 

32

%

 

$

341,863

 

 

30

%

 

$

369,510

 

 

31

%

Advanced technology solutions

68,808

 

 

28

%

 

70,922

 

 

28

%

 

263,952

 

 

27

%

 

270,013

 

 

27

%

Corporate

(11,254)

 

 

 

 

(11,957)

 

 

 

 

(38,878)

 

 

 

 

(41,602)

 

 

 

Total EBITDA

$

159,349

 

 

29

%

 

$

168,301

 

 

29

%

 

$

566,937

 

 

27

%

 

$

597,921

 

 

27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents assets held for sale impairment charge, costs and adjustments related to cost structure simplification actions, and charges associated with our 2020 and 2019 acquisitions.

Adjusted operating profit and EBITDA are non-GAAP measures used by management to evaluate the Company’s ongoing operations. Adjusted operating profit is defined as operating profit plus certain adjustments, such as an assets held for sale impairment charge, cost structure simplification actions, and non-cash inventory charges related to acquisitions. EBITDA is defined as adjusted operating profit plus depreciation and amortization.

NORDSON CORPORATION

RECONCILIATION OF NON-GAAP MEASURES – PROFITABILITY (Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

October 31,

 

Twelve Months Ended

October 31,

 

2020

 

2019

 

2020

 

2019

GAAP AS REPORTED

 

 

 

 

 

 

 

Operating Profit

$

37,368

 

 

$

139,660

 

 

$

349,545

 

 

$

483,113

 

Other / interest income (expense) – net

(11,066)

 

 

(12,378)

 

 

(48,056)

 

 

(52,009)

 

Net Income

18,475

 

 

102,673

 

 

249,539

 

 

337,091

 

EPS diluted

$

0.31

 

 

$

1.76

 

 

$

4.27

 

 

$

5.79

 

 

 

 

 

 

 

 

 

Shares outstanding – diluted

58,679

 

 

58,255

 

 

58,473

 

 

58,202

 

 

 

 

 

 

 

 

 

OPERATING PROFIT ADJUSTMENTS

 

 

 

 

 

 

 

Inventory step-up amortization

$

1,298

 

 

$

342

 

 

$

2,527

 

 

$

530

 

Severance and other

4,174

 

 

1,386

 

 

14,192

 

 

4,034

 

Assets held for sale impairment charge

87,371

 

 

 

 

87,371

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING EXPENSE ADJUSTMENTS

 

 

 

 

 

 

 

Pension settlement loss

$

 

 

$

 

 

$

2,508

 

 

$

 

 

 

 

 

 

 

 

 

Total adjustments

$

92,843

 

 

$

1,728

 

 

$

106,598

 

 

$

4,564

 

 

 

 

 

 

 

 

 

Adjustments net of tax

$

76,390

 

 

$

1,396

 

 

$

87,214

 

 

$

3,578

 

Other discrete tax items

$

(1,820)

 

 

$

171

 

 

$

(16,311)

 

 

$

911

 

EPS effect of adjustments and other discrete tax items

$

1.27

 

 

$

0.03

 

 

$

1.21

 

 

$

0.08

 

 

 

 

 

 

 

 

 

NON-GAAP MEASURES-ADJUSTED PROFITABILITY

 

 

 

 

 

 

 

Operating Profit

$

130,211

 

 

$

141,388

 

 

$

453,635

 

 

$

487,677

 

Operating profit % of sales

23.3

%

 

24.2

%

 

21.4

%

 

22.2

%

Net income

$

93,045

 

 

$

104,240

 

 

$

320,442

 

 

$

341,580

 

Diluted earnings

$

1.59

 

 

$

1.79

 

 

$

5.48

 

 

$

5.87

 

Adjusted operating profit is defined as operating profit plus certain adjustments such as an assets held for sale impairment charge, cost structure simplification actions and non-cash inventory charges related to acquisitions. Adjusted operating profit as a percentage of sales is defined as adjusted operating profit divided by sales.

Adjusted net income is defined as net income plus tax effected adjustments and other discrete tax items.

Adjusted earnings is defined as GAAP EPS adjusted for tax effected adjustments and other discrete tax items.

Management uses these non-GAAP measures internally to make strategic decisions, forecast future results, and evaluate the Company’s current performance. Given management’s use of these non-GAAP measures, the Company believes these measures are important to investors in understanding the Company’s current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in the Company’s core business across different time periods. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to other companies’ non-GAAP financial measures, even if they have similar names. Amounts may not add due to rounding.