| Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income |
The following tables reconcile HSNi’s consolidated net income to operating income for HSNi's operating segments and Adjusted EBITDA (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017 |
|
Three Months Ended June 30, 2016 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Net income |
|
|
|
|
$ |
32,774 |
|
|
|
|
|
|
$ |
26,445 |
|
Income tax provision |
|
|
|
|
18,963 |
|
|
|
|
|
|
15,929 |
|
Income before income taxes |
|
|
|
|
51,737 |
|
|
|
|
|
|
42,374 |
|
Total other expense, net |
|
|
|
|
3,844 |
|
|
|
|
|
|
3,840 |
|
Operating income (loss) |
$ |
39,210 |
|
|
$ |
16,371 |
|
|
55,581 |
|
|
$ |
55,138 |
|
|
$ |
(8,924 |
) |
|
46,214 |
|
Non-cash charges: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense (a) |
(677 |
) |
|
(419 |
) |
|
(1,096 |
) |
|
3,867 |
|
|
1,217 |
|
|
5,084 |
|
Depreciation and amortization |
7,816 |
|
|
3,221 |
|
|
11,037 |
|
|
7,275 |
|
|
3,426 |
|
|
10,701 |
|
Asset impairment (b) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,400 |
|
|
20,400 |
|
Loss on disposition of fixed assets |
432 |
|
|
92 |
|
|
524 |
|
|
— |
|
|
2 |
|
|
2 |
|
Transaction costs (c) |
3,737 |
|
|
1,602 |
|
|
5,339 |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$ |
50,518 |
|
|
$ |
20,867 |
|
|
$ |
71,385 |
|
|
$ |
66,280 |
|
|
$ |
16,121 |
|
|
$ |
82,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017 |
|
Six Months Ended June 30, 2016 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Net income |
|
|
|
|
$ |
54,021 |
|
|
|
|
|
|
$ |
55,030 |
|
Income tax provision |
|
|
|
|
32,431 |
|
|
|
|
|
|
33,026 |
|
Income before income taxes |
|
|
|
|
86,452 |
|
|
|
|
|
|
88,056 |
|
Total other expense, net |
|
|
|
|
7,709 |
|
|
|
|
|
|
7,987 |
|
Operating income (loss) |
$ |
76,723 |
|
|
$ |
17,438 |
|
|
94,161 |
|
|
$ |
104,783 |
|
|
$ |
(8,740 |
) |
|
96,043 |
|
Non-cash charges: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense (a) |
2,715 |
|
|
892 |
|
|
3,607 |
|
|
7,906 |
|
|
2,554 |
|
|
10,460 |
|
Depreciation and amortization |
15,523 |
|
|
6,400 |
|
|
21,923 |
|
|
14,278 |
|
|
6,949 |
|
|
21,227 |
|
Asset impairment (b) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,400 |
|
|
20,400 |
|
Loss on disposition of fixed assets |
382 |
|
|
92 |
|
|
474 |
|
|
4 |
|
|
— |
|
|
4 |
|
Transaction costs (c) |
3,737 |
|
|
1,602 |
|
|
5,339 |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$ |
99,080 |
|
|
$ |
26,424 |
|
|
$ |
125,504 |
|
|
$ |
126,971 |
|
|
$ |
21,163 |
|
|
$ |
148,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) In the second quarter of 2017, HSNi reversed stock-based compensation expense of approximately $4.5 million (which was allocated to HSN and CBI at $3.4 million and $1.1 million, respectively) as a result of the former Chief Executive Officer's resignation. |
(b) In the second quarter of 2016, Cornerstone recorded a non-cash impairment charge of $20.4 million associated with TravelSmith and Chasing Fireflies, two brands held for sale as of June 30, 2016 and sold on September 8, 2016. See Note 14 for further information. |
|
(c) HSNi incurred approximately $5.3 million in transactions costs related to the Liberty Merger Agreement in the second quarter of 2017.
|
|
| Financial Information By Segment |
The net sales for each of HSNi's reportable segments are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net sales: |
|
|
|
|
|
|
|
|
HSN |
|
$ |
532,151 |
|
|
$ |
557,163 |
|
|
$ |
1,092,680 |
|
|
$ |
1,135,547 |
|
Cornerstone |
|
289,210 |
|
|
297,145 |
|
|
514,116 |
|
|
535,527 |
|
Total |
|
$ |
821,361 |
|
|
$ |
854,308 |
|
|
$ |
1,606,796 |
|
|
$ |
1,671,074 |
|
|