SEC Filing | Smith & Wesson

View:

Download DOC

Download PDF

Download XLS

Download XBRL

8-K

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): June 17, 2021

Smith & Wesson Brands, Inc.

(Exact Name of Registrant as Specified in Charter)

Nevada

001-31552

87-0543688

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

2100 Roosevelt Avenue

Springfield, Massachusetts 01104

(Address of principal executive offices) (Zip Code)

(800) 331-0852

(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 (see General Instruction A.2. below):

☐	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, Par Value $.001 per Share

SWBI

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 §CRF 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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.

We are furnishing the disclosure in this Item 2.02 in connection with the disclosure of information in the form of the textual information from a press release released on June 17, 2021.

The information in this Item 2.02 (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this Current Report on Form 8-K is available on our website located at www.smith-wesson.com, although we reserve the right to discontinue that availability at any time.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits.


Exhibit Number		Exhibits

99.1		Press release from Smith & Wesson Brands, Inc., dated June 17, 2021, entitled “Smith & Wesson Brands, Inc. Reports Fourth Quarter and Full Year Fiscal 2021 Financial Results”

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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.


	SMITH & WESSON BRANDS, INC.

Date: June 17, 2021	By:	/s/ Robert J. Cicero
		Robert J. Cicero
		Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary

EX-99.1

Exhibit 99.1

LOGO

Contact:

investorrelations@smith-wesson.com

(413) 747-3448

Smith & Wesson Brands, Inc. Reports

Fourth Quarter and Full Year Fiscal 2021 Financial Results

•

Annual Net Sales of $1.1 Billion; Net Income of $243.6 Million

•

Annual EPS of $4.40/Share (GAAP)

•

Q4 Net Sales of $322.9 million; Net Income of $89.2 Million

•

Q4 EPS of $1.70/Share (GAAP)

•

New $50M Share Buyback Program and a 60%/Share Quarterly Dividend Increase

SPRINGFIELD, Mass., June 17, 2021 – Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI), a U.S.-based leader in firearm manufacturing and design, today announced financial results for the fourth quarter and full fiscal year 2021, ended April 30, 2021. On August 24, 2020, the company completed the previously announced spin-off of its outdoor products and accessories business. Therefore, as of the second quarter, all historical financial information for that business is reported as discontinued operations. Unless otherwise indicated, any reference to income statement items refers to results from continuing operations.

Fourth Quarter Fiscal 2021 Financial Highlights

•

Quarterly net sales were $322.9 million compared with $193.0 million for the comparable quarter last year, an increase of 67.3%.

•

Gross margin for the quarter was 45.1% compared with 32.2% for the comparable quarter last year.

•

Quarterly GAAP net income was a record $89.2 million, or $1.70 per diluted share, compared with $20.9 million, or $0.38 per diluted share, for the comparable quarter last year.

•

Quarterly non-GAAP net income was $89.6 million, or $1.71 per diluted share, compared with $27.5 million, or $0.50 per diluted share, for the comparable quarter last year. GAAP to non-GAAP adjustments for income exclude costs related to the spin-off of the outdoor products and accessories business, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

•

Quarterly non-GAAP Adjusted EBITDAS was $125.6 million, or 38.9% of net sales, compared with $51.6 million, or 26.7% of net sales, for the comparable quarter last year.

Full year Fiscal 2021 Financial Highlights

•

Full year net sales were $1.1 billion compared with $529.6 million for the prior year, an increase of 100%.

•

Gross margin of 42.4% compared with 31.3% for the prior year.

Page 1 of 8

•

Full year GAAP net income was $243.6 million, or $4.40 per diluted share, compared with GAAP net income of $27.7 million, or $0.50 per diluted share, for the prior year.

•

Full year non-GAAP net income was $251.5 million, or $4.54 per diluted share, compared with $32.1 million, or $0.58 per diluted share, for the prior year. GAAP to non-GAAP adjustments for income exclude costs related to the spin-off of the outdoor products and accessories business, COVID-19 related expenses, and other costs. For a detailed reconciliation, see the schedules that follow in this release.

•

Full year non-GAAP Adjusted EBITDAS was $366.6 million, or 34.6% of net sales, compared with $92.7 million, or 17.5% of net sales, for the prior year.

Mark Smith, President and Chief Executive Officer, commented, “The results of the past year, in spite of the unthinkable challenges that we faced as a nation and as a company, are a tremendous testament to the resolve of our dedicated employees, the power of the Smith & Wesson brand, and the strength of the partnerships we have with our customers. Our employees more than doubled the prior year sales, passed a milestone of $1 billion in revenue, and by every financial and operating metric, have delivered the most successful year in the 169 year history of the company. But most importantly, we have set a rock solid foundation for the long term success of the company, with astounding market share growth. During the past fiscal year, the US firearms market experienced record growth of 42%, meanwhile shipments from Smith & Wesson far surpassed the industry, growing by 70%. Strong consumer preference for our products combined with our ability to rapidly react to the increased demand has placed us in a clear leadership position as we enter into our first full fiscal year as a standalone pure-play firearms company.”

Deana McPherson, Executive Vice President and Chief Financial Officer, commented, “The hard work and dedication of all of our employees, combined with record-breaking demand for our high-quality products drove equally record-breaking financial results for the year, including record revenue, net income, earnings per share, and cash generation. We began our first year as a pure-play firearm company with clear strategic priorities, and we have delivered on our strategy. During fiscal 2021, we invested in our business and our people, we repaid all of our bank debt, we repurchased over 10% of our outstanding common stock, and we began paying our stockholders a quarterly dividend for the first time in company history. Continuing with our capital allocation strategy, I am pleased to announce that our Board has authorized a new $50 million share repurchase program as well as a 60% increase in our quarterly dividend to 8 cents per share. This quarter’s dividend will be paid to stockholders of record on July 1st with payment to be made on July 6th.”

The amount and timing of any repurchases will depend on a number of factors, including price, trading volume, general market conditions, legal requirements, and other factors. The repurchases may be made on the open market, in block trades, or in privately negotiated transactions. Any shares of common stock repurchased under the program will be considered issued but not outstanding shares of the company’s common stock.

Conference Call and Webcast

The company will host a conference call and webcast on June 17, 2021, to discuss its fourth quarter and full fiscal 2021 financial and operational results. Speakers on the conference call will include Mark Smith, President and Chief Executive Officer, and Deana McPherson, Executive Vice President and Chief Financial Officer. The conference call may include forward-looking statements. The conference call and webcast will begin at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Those interested in listening to the conference call via telephone may call directly at (844) 309-6568 and reference conference identification number 1173799. No RSVP is necessary. The conference call audio webcast can also be accessed live on the company’s website at www.smith-wesson.com, under the Investor Relations section.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

In this press release, certain non-GAAP financial measures, including “non-GAAP net income,” “Adjusted EBITDAS,” and “free cash flow” are presented. From time-to-time, the company considers and uses these supplemental measures of operating performance in order to provide the reader with an improved understanding of underlying performance trends. The company believes it is useful for itself and the reader to review, as applicable, both (1) GAAP measures that include

Page 2 of 8

(i) amortization of acquired intangible assets, (ii) transition costs, (iii) change in contingent consideration, (iv) CEO separation, (v) the tax effect of non-GAAP adjustments, and (vi) COVID-19 expenses; and (2) the non-GAAP measures that exclude such information. The company presents these non-GAAP measures because it considers them an important supplemental measure of its performance. The company’s definition of these adjusted financial measures may differ from similarly named measures used by others. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. These non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the company’s GAAP measures. The principal limitations of these measures are that they do not reflect the company’s actual expenses and may thus have the effect of inflating its financial measures on a GAAP basis.

About Smith & Wesson Brands, Inc.

Smith & Wesson Brands, Inc. (NASDAQ Global Select: SWBI) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality handgun, long gun, and suppressor products to the global consumer and professional markets under the iconic Smith & Wesson^®, M&P^®, and Gemtech^® brands. The company also provides manufacturing services including forging, machining, and precision plastic injection molding services. For more information call (844) 363-5386 or visit www.smith-wesson.com.

Safe Harbor Statement

Certain statements contained in this press release may be deemed to be forward-looking statements under federal securities laws, and we intend that such forward-looking statements be subject to the safe-harbor created thereby. Such forward-looking statements include, among others, our belief that we have set a rock solid foundation for the long-term success of the company, with astounding market share growth; and our belief that strong consumer preference for our products combined with our ability to rapidly react to the increased demand has placed us in a clear leadership position as we enter into our first full fiscal year as a standalone pure-play firearms company. We caution that these statements are qualified by important risks, uncertainties, and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, economic, social, political, legislative, and regulatory factors; the potential for increased regulation of firearms and firearm-related products; actions of social activists that could have an adverse effect on our business; the impact of lawsuits; the demand for our products; the state of the U.S. economy in general and the firearm industry in particular; general economic conditions and consumer spending patterns; our competitive environment; the supply, availability, and costs of raw materials and components; our anticipated growth and growth opportunities; our strategies; our ability to maintain and enhance brand recognition and reputation; our ability to introduce new products; the success of new products; the potential for cancellation of orders from our backlog; and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended April 30, 2021.

Page 3 of 8

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of:
	April 30, 2021			April 30, 2020
	(In thousands, except par value and share data)
ASSETS
Current assets:
Cash and cash equivalents	$	113,017		$	125,011
Accounts receivable, net of allowances for credit losses of $107 on April 30, 2021 and $1,038 on April 30, 2020		67,442			60,879
Inventories		78,477			103,741
Prepaid expenses and other current assets		8,408			7,556
Current assets of discontinued operations		—			94,673
Income tax receivable		909			1,595

Total current assets		268,253			393,455

Property, plant, and equipment, net		141,612			147,739
Intangibles, net		4,417			4,375
Goodwill		19,024			19,024
Other assets of discontinued operations		—			148,485
Other assets		13,082			16,437

		446,388			729,515

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	57,337		$	31,476
Accrued expenses and deferred revenue		33,136			57,678
Accrued payroll and incentives		17,381			12,448
Accrued income taxes		1,157			5,503
Accrued profit sharing		14,445			2,197
Accrued warranty		2,199			3,297
Current liabilties of discontinued operations		—			17,372

Total current liabilities		125,655			129,971
Deferred income taxes		904			457
Notes and loans payable, net of current portion		—			159,171
Finance lease payable, net of current portion		38,786			39,873
Other non-current liabilities of discontinued operations		—			2,299
Other non-current liabilities		14,659			10,626

Total liabilities		180,004			342,397

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, no shares issued or outstanding		—			—
Common stock, $.001 par value, 100,000,000 shares authorized, 74,222,127 issued and 49,937,329 shares outstanding on April 30, 2021 and 73,526,790 shares issued and 55,359,928 shares outstanding on April 30, 2020		74			74
Additional paid-in capital		273,431			267,630
Retained earnings		325,181			341,716
Accumulated other comprehensive income		73			73
Treasury stock, at cost (24,284,798 shares on April 30, 2021 and 18,166,862 on April 30, 2020)		(332,375	)		(222,375	)

Total stockholders’ equity		266,384			387,118

	$	446,388		$	729,515

Page 4 of 8

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME/(LOSS)


	For the Three Months Ended April 30,						For the Years Ended April 30,
	2021			2020			2021			2020
	(Unaudited)
				(In thousands, except per share data)
Net sales	$	322,947		$	193,045		$	1,059,195		$	529,618
Cost of sales		177,139			130,941			610,212			363,929

Gross profit		145,808			62,104			448,983			165,689

Operating expenses:
Research and development		1,963			1,863			7,480			7,364
Selling, marketing, and distribution		10,507			11,148			42,603			41,987
General and administrative		17,207			18,119			79,268			66,033

Total operating expenses		29,677			31,130			129,351			115,384

Operating income from continuing operations		116,131			30,974			319,632			50,305

Other income/(expense), net:
Other income/(expense), net		540			67			2,252			495
Interest expense, net		(563	)		(2,705	)		(3,919	)		(11,625	)

Total other (expense)/income, net		(23	)		(2,638	)		(1,667	)		(11,130	)

Income from operations before income taxes		116,108			28,336			317,965			39,175
Income tax expense		26,929			7,438			74,394			11,522

Income from continuing operations	$	89,179		$	20,898		$	243,571		$	27,653
Discontinued operations:
(Loss)/income from discontinued operations		(144	)		(87,044	)		8,478			(88,883	)

Net income/(loss)	$	89,035		$	(66,146	)	$	252,049		$	(61,230	)

Net income/(loss) per share:
Basic - continuing operations	$	1.72		$	0.38		$	4.46		$	0.50

Basic - net income/(loss)	$	1.72		$	(1.20	)	$	4.62		$	(1.11	)

Diluted - continuing operations	$	1.70		$	0.38		$	4.40		$	0.50

Diluted - net income/(loss)	$	1.70		$	(1.20	)	$	4.55		$	(1.10	)

Weighted average number of common shares outstanding:
Basic		51,816			54,983			54,613			54,983
Diluted		52,423			54,983			55,352			55,665

Page 5 of 8

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended
	April 30, 2021			April 30, 2020
	(In thousands)
Cash flows from operating activities:
Income from continuing operations	$	243,571		$	27,653
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		31,575			31,972
(Gain)/loss on sale/disposition of assets		154			419
Provision for losses on notes and accounts receivable		(739	)		(585	)
Deferred income taxes		447			(260	)
Change in fair value of contingent consideration		—			100
Stock-based compensation expense		4,706			2,357
Changes in operating assets and liabilities:
Accounts receivable		(5,824	)		(198	)
Inventories		25,264			(911	)
Prepaid expenses and other current assets		(852	)		(3,124	)
Income taxes		(3,643	)		6,196
Accounts payable		25,540			4,043
Accrued payroll and incentives		4,933			(5,831	)
Accrued profit sharing		12,248			(355	)
Accrued expenses and deferred revenue		(24,633	)		21,755
Accrued warranty		(1,098	)		(1,126	)
Other assets		1,579			1,131
Other non-current liabilities		4,032			(2,401	)

Cash provided by operating activities - continuing operations		317,260			80,835
Cash (used in)/provided by operating activities - discontinued operations		(1,926	)		13,901

Net cash provided by operating activities		315,334			94,736

Cash flows from investing activities:
Refunds on machinery and equipment		310			—
Receipts from note receivable		—			786
Payments to acquire patents and software		(632	)		(429	)
Proceeds from sale of property and equipment		113			—
Payments to acquire property and equipment		(22,052	)		(12,441	)

Cash used by investing activities - continuing operations		(22,261	)		(12,084	)
Cash used by investing activities - discontinued operations		(1,143	)		(1,874	)

Net cash used in investing activities		(23,404	)		(13,958	)

Cash flows from financing activities:
Proceeds from loans and notes payable		25,000			228,225
Cash paid for debt issuance costs		(450	)		(875	)
Payments on finance lease obligation		(996	)		(900	)
Payments on notes and loans payable		(185,000	)		(224,600	)
Distribution to AOUT		(25,000	)		—
Payments to acquire treasury stock		(110,000	)		—
Dividend distribution		(8,223	)		—
Proceeds from exercise of options to acquire common stock, including employee stock repurchase plan		3,154			2,127
Payment of employee withholding tax related to restricted stock units		(2,243	)		(597	)

Cash (used in)/provided by financial activities - continuing operations		(303,758	)		3,380
Cash used in financial activities - discontinued operations		(166	)		—

Net cash (used in)/provided by financing activities		(303,924	)		3,380

Net (decrease)/increase in cash and cash equivalents		(11,994	)		84,158
Cash and cash equivalents, beginning of period		125,011			40,853

Cash and cash equivalents, end of period	$	113,017		$	125,011

Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	3,306		$	11,103
Income taxes	$	80,874		$	6,935

Page 6 of 8

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(Dollars in thousands, except per share data)

(Unaudited)


	For the Three Months Ended												For the Year Ended
	April 30, 2021						April 30, 2020						April 30, 2021						April 30, 2020
	$			% of Sales			$			% of Sales			$			% of Sales			$			% of Sales
GAAP gross profit	$	145,808			45.1	%	$	62,104			32.2	%	$	448,983			42.4	%	$	165,689			31.3	%
COVID-19		43			0.0	%		1,899			1.0	%		560			0.1	%		1,899			0.4	%

Non-GAAP gross profit	$	145,851			45.2	%	$	64,003			33.2	%	$	449,543			42.4	%	$	167,588			31.6	%

GAAP operating expenses	$	29,677			9.2	%	$	31,130			16.1	%	$	129,351			12.2	%	$	115,384			21.8	%
Amortization of acquired intangible assets		(83	)		0.0	%		(86	)		0.0	%		(332	)		0.0	%		(345	)		-0.1	%
Transition costs		(22	)		0.0	%		(4,292	)		-2.2	%		(7,975	)		-0.8	%		(5,481	)		-1.0	%
COVID-19		(67	)		0.0	%		(460	)		-0.2	%		(685	)		-0.1	%		(460	)		-0.1	%
Spin related stock-based compensation		(296	)		-0.1	%		—			—			(738	)		-0.1	%		—			—
CEO separation		—			—			(2,252	)		-1.2	%		—			—			2,002			0.4	%

Non-GAAP operating expenses	$	29,209			9.0	%	$	24,040			12.5	%	$	119,621			11.3	%	$	111,100			21.0	%

GAAP operating income	$	116,131			36.0	%	$	30,974			16.0	%	$	319,632			30.2	%	$	50,305			9.5	%
Amortization of acquired intangible assets		83			0.0	%		86			0.0	%		332			0.0	%		345			0.1	%
Transition costs		22			0.0	%		4,292			2.2	%		7,975			0.8	%		5,481			1.0	%
COVID-19		110			0.0	%		2,359			1.2	%		1,245			0.1	%		2,359			0.4	%
Spin related stock-based compensation		296			0.1	%		—			—			738			0.1	%		—			—
CEO separation		—			—			2,252			1.2	%		—			—			(2,002	)		-0.4	%

Non-GAAP operating income	$	116,642			36.1	%	$	39,963			20.7	%	$	329,922			31.1	%	$	56,488			10.7	%

GAAP income from continuing operations	$	89,179			27.6	%	$	20,898			10.8	%	$	243,571			23.0	%	$	27,653			5.2	%
Amortization of acquired intangible assets		83			0.0	%		86			0.0	%		332			0.0	%		345			0.1	%
Transition costs		22			0.0	%		4,292			2.2	%		7,975			0.8	%		5,481			1.0	%
COVID-19		110			0.0	%		2,359			1.2	%		1,245			0.1	%		2,359			0.4	%
Change in contingent consideration		—			—			—			—			—			—			(100	)		0.0	%
Spin related stock-based compensation		296			0.1	%		—			—			738			0.1	%		—			—
CEO separation		—			—			2,252			1.2	%		—			—			(2,002	)		-0.4	%
Tax effect of non-GAAP adjustments		(119	)		0.0	%		(2,427	)		-1.3	%		(2,400	)		-0.2	%		(1,642	)		-0.3	%

Non-GAAP income from continuing operations	$	89,571			27.7	%	$	27,460			14.2	%	$	251,461			23.7	%	$	32,094			6.1	%

GAAP income from continuing operations per share - diluted	$	1.70					$	0.38					$	4.40					$	0.50
Amortization of acquired intangible assets		—						—						0.01						0.01
Transition costs		—						0.08						0.14						0.10
COVID-19		—						0.04						0.02						0.04
Change in contingent consideration		—						—						—						—
Spin related stock-based compensation		0.01						—						0.01						—
CEO separation		—						0.04						—						(0.04	)
Tax effect of non-GAAP adjustments		—						(0.04	)					(0.04	)					(0.03	)

Non-GAAP income from continuing operations per share - diluted	$	1.71					$	0.50					$	4.54					$	0.58

Page 7 of 8

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

RECONCILIATION OF OPERATING CASH FLOW FROM CONTINUING OPERATIONS TO FREE CASH FLOW

(In thousands)

(Unaudited)


	For the Three Months Ended						For the Year Ended
	April 30, 2021			April 30, 2020			April 30, 2021			April 30, 2020
Net cash provided by in operating activities	$	118,823		$	107,472		$	317,260		$	80,835
Net cash used in investing activities		(3,691	)		(1,277	)		(22,261	)		(12,084	)
Receipts from note receivable		—			(786	)		—			(786	)

Free cash flow	$	115,132		$	105,409		$	294,999		$	67,965

SMITH & WESSON BRANDS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO NON-GAAP ADJUSTED EBITDAS

(in thousands)

(Unaudited)


	For the Three Months Ended				For the Year Ended
	April 30, 2021		April 30, 2020		April 30, 2021		April 30, 2020
GAAP income from continuing operations	$	89,179	$	20,898	$	243,571	$	27,653
Interest expense		585		2,663		4,056		11,625
Income tax expense		26,929		11,522		74,394		11,522
Depreciation and amortization		7,420		7,433		30,685		31,209
Stock-based compensation expense		1,314		1,416		4,706		2,357
Change in contingent consideration		—		—		—		(100	)
COVID-19		110		2,359		1,245		2,359
Transition costs		22		4,292		7,975		5,481
CEO separation		—		1,037		—		627

Non-GAAP Adjusted EBITDAS	$	125,559	$	51,620	$	366,632	$	92,733

Page 8 of 8