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):
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|
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|
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|
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Three Months Ended September 30, 2017 |
|
Three Months Ended September 30, 2016 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Net income |
|
|
|
|
$ |
16,227 |
|
|
|
|
|
|
$ |
20,158 |
|
Income tax provision |
|
|
|
|
12,700 |
|
|
|
|
|
|
12,716 |
|
Income before income taxes |
|
|
|
|
28,927 |
|
|
|
|
|
|
32,874 |
|
Total other expense, net |
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|
|
4,017 |
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|
|
|
|
|
4,001 |
|
Operating income (loss) |
$ |
30,999 |
|
|
$ |
1,945 |
|
|
32,944 |
|
|
$ |
46,963 |
|
|
$ |
(10,088 |
) |
|
36,875 |
|
Non-cash charges: |
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|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
2,978 |
|
|
1,048 |
|
|
4,026 |
|
|
3,671 |
|
|
568 |
|
|
4,239 |
|
Depreciation and amortization |
7,690 |
|
|
3,444 |
|
|
11,134 |
|
|
7,304 |
|
|
3,214 |
|
|
10,518 |
|
Loss on sale of businesses and asset impairment (a) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11,195 |
|
|
11,195 |
|
Loss on disposition of fixed assets |
(15 |
) |
|
1 |
|
|
(14 |
) |
|
82 |
|
|
— |
|
|
82 |
|
Transaction costs (b) |
921 |
|
|
384 |
|
|
1,305 |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$ |
42,573 |
|
|
$ |
6,822 |
|
|
$ |
49,395 |
|
|
$ |
58,020 |
|
|
$ |
4,889 |
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|
$ |
62,909 |
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|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2017 |
|
Nine Months Ended September 30, 2016 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Net income |
|
|
|
|
$ |
70,249 |
|
|
|
|
|
|
$ |
75,188 |
|
Income tax provision |
|
|
|
|
45,130 |
|
|
|
|
|
|
45,742 |
|
Income before income taxes |
|
|
|
|
115,379 |
|
|
|
|
|
|
120,930 |
|
Total other expense, net |
|
|
|
|
11,726 |
|
|
|
|
|
|
11,988 |
|
Operating income (loss) |
$ |
107,722 |
|
|
$ |
19,383 |
|
|
127,105 |
|
|
$ |
151,745 |
|
|
$ |
(18,827 |
) |
|
132,918 |
|
Non-cash charges: |
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|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense (c) |
5,693 |
|
|
1,940 |
|
|
7,633 |
|
|
11,577 |
|
|
3,121 |
|
|
14,698 |
|
Depreciation and amortization |
23,213 |
|
|
9,845 |
|
|
33,058 |
|
|
21,582 |
|
|
10,163 |
|
|
31,745 |
|
Loss on sale of businesses and asset impairment (a) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
31,595 |
|
|
31,595 |
|
Loss on disposition of fixed assets |
368 |
|
|
92 |
|
|
460 |
|
|
86 |
|
|
— |
|
|
86 |
|
Transaction costs (b) |
4,657 |
|
|
1,986 |
|
|
6,643 |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
$ |
141,653 |
|
|
$ |
33,246 |
|
|
$ |
174,899 |
|
|
$ |
184,990 |
|
|
$ |
26,052 |
|
|
$ |
211,042 |
|
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(a) Cornerstone recorded a loss on the sale of TravelSmith and Chasing Fireflies of $11.2 million in the third quarter of 2016. In the second quarter of 2016, Cornerstone classified the two brands as held for sale and recorded a non-cash asset impairment charge of $20.4 million. See Note 14 of Notes to Consolidated Financial Statements for further information. |
(b) HSNi incurred approximately $1.3 million and $6.6 million for the three and nine months ended September 30, 2017, respectively, in transactions costs related to the Liberty Merger Agreement.
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(c) In the second quarter of 2017, HSNi reversed stock-based compensation expense of approximately $4.5 million (allocated $3.4 million and $1.1 million to HSN and CBI, respectively) as a result of the former Chief Executive Officer's resignation. |
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Financial Information By Segment |
The net sales for each of HSNi's reportable segments are as follows (in thousands):
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Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net sales: |
|
|
|
|
|
|
|
|
HSN |
|
$ |
536,200 |
|
|
$ |
569,669 |
|
|
$ |
1,628,880 |
|
|
$ |
1,705,215 |
|
Cornerstone |
|
246,362 |
|
|
253,354 |
|
|
760,478 |
|
|
788,881 |
|
Total |
|
$ |
782,562 |
|
|
$ |
823,023 |
|
|
$ |
2,389,358 |
|
|
$ |
2,494,096 |
|
|