Subjects: EARNINGS, Conference Call, Webcast
Vivint Smart Home Announces Second Quarter 2021 Financial Results
Vivint Smart Home, Inc. (NYSE: VVNT), a leading smart home company, today announced financial results for the second quarter ended June 30, 2021.
"It's great to be back at Vivint Smart Home," said David Bywater, CEO of Vivint. "I know the company, culture, and industry extremely well, having spent three years previously as the company's chief operating officer before spending the last five years as the CEO of our former sister company, Vivint Solar. I am very pleased with the significant progress the Vivint Smart Home team has made during my absence in growing the subscriber base, improving the depth and quality of the product portfolio, and driving tremendous improvements in the unit economics and cash flow dynamics of the business."
Second Quarter 2021 Highlights (vs. prior year period)
- New Subscribers grew by 12.6% to 121,599, a record high for the second quarter period
- Revenue increased by $51.3 million to $355.2 million, representing growth of 16.9%
- Net loss improved by $82.7 million to $74.1 million, decreasing by 52.7% vs. Q2 2020 and 36.1% vs. Q2 2019
- Adjusted EBITDAa increased by $5.4 million to $156.0 million, up 3.6% vs. Q2 2020 and up 76.7% vs. Q2 2019
- Attrition rate improved to 11.6%, the lowest rate in 12 quarters
- Net Subscriber Acquisition Costs per New Subscriber declined to $70, down 88.9%
- Net Service Costs per Subscriber came in at $10.03, representing a service margin of 79%
- Cash on hand was $345.2 million and the company's liquidity position was $660.7 million as of quarter end
- Net leverage ratio (net debt to LTM Covenant Adjusted EBITDA) improved to 2.9x as of quarter end
Other Recent Highlights
- Appointed David Bywater as CEO ? seasoned executive with 25 years of leadership experience across consumer-facing technology companies
- Announced strategic partnership with Freedom Forever, one of the nation's largest and fastest-growing solar installers, that moves Vivint one step closer to a fully integrated smart home and energy offering
- Successfully completed global debt refinancing that will reduce annual cash interest costs by approximately $50 million
Full Year Outlook
"We reported solid performance in the second quarter, delivering 17 percent revenue growth year over year, which was more than double the growth rate of the prior year period," said Dale R. Gerard, CFO of Vivint. "We added nearly 122,000 new smart home subscribers, which represented a 13 percent increase, all while producing an adjusted EBITDA margin of over 43 percent. Our key portfolio indicators remain very healthy overall, with attrition sitting at a 12-quarter low. These results keep us on pace to meet our growth objectives for the full year, and we are once again reaffirming our original guidance for the year."
For the full year 2021, Vivint currently expects:
- Total subscribers of 1.80 ? 1.85 million
- Revenue of $1.38 ? $1.42 billion
- Adjusted EBITDAa of $640 ? $655 million
a) This earnings release includes Adjusted EBITDA and Covenant Adjusted EBITDA, metrics that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (GAAP). Covenant Adjusted EBITDA provides additional information to investors about the calculation of, and compliance with, certain financial covenants contained in the agreements governing the Company's notes, and the credit agreements governing the Company's revolving credit facility and term loan. See the Statement Regarding Non-GAAP Financial Measures section at the end of this earnings release for the definitions of Adjusted EBITDA and Covenant Adjusted EBITDA and reconciliations to their most directly comparable financial measure calculated in accordance with GAAP. |
A reconciliation of Adjusted EBITDA to Net Loss is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and uncertainty with respect to forecasting and quantifying certain amounts that are necessary for such reconciliation, including Net Loss and adjustments that could be made for impairment charges, restructuring charges and the timing and magnitude of other amounts included in the reconciliation. For the same reasons, we are unable to address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.
Summary of Quarterly Key Financial and Portfolio Metrics |
|||||||||||||||
($ in millions, except for subscriber data) |
|||||||||||||||
|
Jun 30, |
Sep 30, |
Dec 31, |
Mar 31, |
Jun 30, |
||||||||||
|
2020 |
2020 |
2020 |
2021 |
2021 |
||||||||||
Total Revenues |
$ |
303.9 |
|
$ |
321.0 |
|
$ |
332.4 |
|
$ |
343.3 |
|
$ |
355.2 |
|
Net Loss |
$ |
(156.8 |
) |
$ |
(108.7 |
) |
$ |
(184.6 |
) |
$ |
(87.4 |
) |
$ |
(74.1 |
) |
Adjusted EBITDA(a) |
$ |
150.6 |
|
$ |
156.6 |
|
$ |
146.5 |
|
$ |
162.1 |
|
$ |
156.0 |
|
Adjusted EBITDA Margin |
49.6 |
% |
48.8 |
% |
44.1 |
% |
47.2 |
% |
43.9 |
% |
|||||
LTM Covenant Adjusted EBITDA(a) |
$ |
728.7 |
|
$ |
771.2 |
|
$ |
804.4 |
|
$ |
823.8 |
|
$ |
853.1 |
|
LTM Covenant Adj EBITDA Margin |
60.4 |
% |
62.4 |
% |
63.8 |
% |
63.3 |
% |
63.1 |
% |
|||||
New Subscribers(1) |
107,980 |
|
126,847 |
|
58,554 |
|
60,127 |
|
121,599 |
|
|||||
Total Subscribers(1) |
1,610,642 |
|
1,687,892 |
|
1,695,498 |
|
1,706,069 |
|
1,781,469 |
|
|||||
Total Monthly Service Revenue |
$ |
80.3 |
|
$ |
82.8 |
|
$ |
83.0 |
|
$ |
82.1 |
|
$ |
84.5 |
|
Avg Monthly Svc Revenue per User |
$ |
49.83 |
|
$ |
49.06 |
|
$ |
48.95 |
|
$ |
48.12 |
|
$ |
47.45 |
|
Total Monthly Recurring Revenue |
$ |
100.9 |
|
$ |
106.4 |
|
$ |
110.3 |
|
$ |
112.4 |
|
$ |
114.8 |
|
Avg Monthly Recurring Rev per User |
$ |
63.93 |
|
$ |
63.85 |
|
$ |
65.03 |
|
$ |
66.03 |
|
$ |
65.60 |
|
Attrition Rate(2) |
13.7 |
% |
12.8 |
% |
12.4 |
% |
11.8 |
% |
11.6 |
% |
|||||
(1) |
Excludes subscribers from sales pilot initiatives |
|
(2) |
Attrition Rate is reported on LTM basis for each period end & excludes subscribers from sales pilot initiatives |
Conference Call Information
Vivint will host a conference call and webcast to discuss the quarterly results at 5:00 p.m. ET / 3:00 p.m. MT today, August 3, 2021. To join the live webcast and conference call, please visit the Investor Relations section of the Vivint website, http://investors.vivint.com/events-presentations/events/default.aspx.
Investors and participants can register in advance for the telephonic version of the call by visiting https://event.on24.com/wcc/r/3193595/8BF30F949E11874D12FBF9814D1AA884. After registering, instructions will be shared on how to join the call including dial-in information, as well as a unique passcode and registrant ID. At the time of the call, registered participants will dial in using the numbers from the confirmation email, and upon entering their unique passcode and ID, will be entered directly into the conference.
A financial results presentation and online access to join the webcast will be available immediately before the call on the Investor Relations section of the Company's website at http://investors.vivint.com/events-presentations/events/default.aspx. A replay of the webcast will be available for 30 days on the Investor Relations section of the Company's website at https://investors.vivint.com/home/default.aspx following the completion of the webcast and conference call.
About the Company
Vivint is a leading smart home company in North America. Vivint delivers an integrated smart home system with in-home consultation, professional installation and support delivered by its Smart Home Pros, as well as 24-7 customer care and monitoring. Dedicated to redefining the home experience with intelligent products and services, Vivint serves more than 1.7 million customers. For more information, visit https://www.vivint.com.
Forward-Looking Statements
This earnings release and accompanying conference call include certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including statements regarding, among other things, the Company's plans, strategies and prospects, both business and financial, including without limitation the information under the heading "Financial Outlook" in this press release. These statements are based on the beliefs and assumptions of the Company's management. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning our possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words "believes," "estimates," "expects," "projects," "forecasts," "may," "will," "should," "seeks," "plans," "scheduled," "anticipates" or "intends" or similar expressions.
Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, in addition to those discussed in "Risk Factors" and elsewhere in the Company's Amendment No. 1 to its Annual Report on Form 10-K/A for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the "SEC") on May 12, 2021, as such factors may be updated from time to time in the Company's periodic filings with the SEC, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
- the duration and scope of the COVID-19 pandemic;
- actions governments, the company's counterparties, and the company's customers or potential customers take in response to the COVID-19 pandemic;
- the impact of the pandemic and actions taken in response to the pandemic on the global economies and economic activity;
- the pace of recovery when the COVID-19 pandemic subsides;
- the impact of the COVID-19 pandemic on our liquidity and capital resources, including the impact of the pandemic on our customers and timing of payments, the sufficiency of credit facilities, and the company's compliance with lender covenants;
- the ineffectiveness of steps we take to reduce operating costs;
- risks of the smart home and security industry, including risks of and publicity surrounding the sales, subscriber origination and retention process;
- the highly competitive nature of the smart home and security industry and product introductions and promotional activity by our competitors;
- litigation, complaints, product liability claims and/or adverse publicity;
- the impact of changes in consumer spending patterns, consumer preferences, local, regional, and national economic conditions, crime, weather, demographic trends and employee availability;
- adverse publicity and product liability claims;
- increases and/or decreases in utility and other energy costs, increased costs related to utility or governmental requirements;
- cost increases or shortages in smart home and security technology products or components;
- the introduction of unsuccessful new Smart Home Services;
- privacy and data protection laws, privacy or data breaches, or the loss of data;
- the impact to our business, results of operations, financial condition, regulatory compliance and customer experience of the Vivint Flex Pay plan;
- risks related to our exposure to variable rates of interest with respect to its revolving credit facility and term loan facility; and
- our inability to maintain an effective system of internal control over financial reporting.
In addition, the origination and retention of new subscribers will depend on various factors, including, but not limited to, market availability, subscriber interest, the availability of suitable components, the negotiation of acceptable contract terms with subscribers, local permitting, licensing and regulatory compliance, and our ability to manage anticipated expansion and to hire, train and retain personnel, the financial viability of subscribers and general economic conditions.
The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether a result of new information, future events, or otherwise, except as required by law.
Certain Definitions
Total Subscribers - is the aggregate number of active smart home and security subscribers at the end of a given period.
Total Monthly Recurring Revenue - or Total MRR, is the average total monthly recurring revenue recognized during a given period.
Average Monthly Recurring Revenue per User - or AMRRU, is Total MRR divided by average monthly Total Subscribers during a given period.
Total Monthly Service Revenue - or MSR, is the contracted recurring monthly service billings to our smart home and security subscribers, based on the Total Subscribers number as of the end of a given period.
Average Monthly Service Revenue per User - or AMSRU, is Total MSR divided by Total Subscribers at the end of a given period.
Adjusted EBITDA Margin - is Adjusted EBITDA as a percent of revenue.
Covenant Adjusted EBITDA Margin - is Covenant Adjusted EBITDA as a percent of revenue.
Net Loss Margin - is Net Loss as a percent of revenue.
Attrition Rate - is the aggregate number of canceled smart home and security subscribers during the prior 12-month period divided by the monthly weighted average number of Total Subscribers based on the Total Subscribers at the beginning and end of each month of a given period. Subscribers are considered canceled when they terminate in accordance with the terms of their contract, are terminated by us or if payment from such subscribers is deemed uncollectible (when at least four monthly billings become past due). If a sale of a service contract to third parties occurs, or a subscriber relocates but continues their service, we do not consider this as a cancellation. If a subscriber transfers their service contract to a new subscriber, we do not consider this a cancellation.
Average Subscriber Lifetime - in number of months, is 100% divided by our expected long-term annualized attrition rate (which is currently estimated at 13%) multiplied by 12 months.
Net Service Cost per Subscriber - is the average monthly service costs incurred during the period (both period and capitalized service costs), including monitoring, customer service, field service and other service support costs, less total non-recurring smart home services billings and cellular network maintenance fees for the period, divided by average monthly Total Subscribers for the same period.
Net Service Margin - is the monthly average MSR for the period, less total average net service costs for the period divided by the monthly average MSR for the period.
New Subscribers - is the aggregate number of net new smart home and security subscribers originated during a given period. This metric excludes new subscribers acquired by the transfer of a service contract from one subscriber to another.
Net Subscriber Acquisition Costs per New Subscriber - is the net cash cost to create new smart home and security subscribers during a given 12-month period divided by New Subscribers for that period. These costs include commissions, Products, installation, marketing, sales support and other allocations (general and administrative and overhead); less upfront payments received from the sale of Products associated with the initial installation, and installation fees. Upfront payments reflect gross proceeds prior to deducting fees related to consumer financing of Products. These costs exclude capitalized contract costs and upfront proceeds associated with contract modifications.
Total Monthly Service Revenue for New Subscribers - is the contracted recurring monthly service billings to our New Subscribers during the prior 12-month period.
Lifetime Service Margin per New Subscriber - is Total Monthly Service Revenue/Total service RPU for New Subscribers less Net Service Cost per Subscriber multiplied by Average Subscriber Lifetime
LTV / Net SAC - is the Lifetime Service Margin per New Subscriber plus RIC equipment revenue per new subscriber, divided by Net Subscriber Acquisition Costs per New Subscriber including financing costs
Average Monthly Service Revenue per New Subscriber - is the Total Monthly Service Revenue for New Subscribers divided by New Subscribers during the prior 12-month period.
VIVINT SMART HOME, INC. and SUBSIDIARIES Consolidated Statements of Operations (In thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended Jun 30, |
|
Six Months Ended Jun 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Recurring and other revenue |
$ |
355,231 |
|
|
$ |
303,897 |
|
|
$ |
698,524 |
|
|
$ |
607,129 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Operating expenses |
90,740 |
|
|
82,259 |
|
|
187,271 |
|
|
165,419 |
|
||||
Selling expenses |
89,867 |
|
|
65,110 |
|
|
204,408 |
|
|
115,833 |
|
||||
General and administrative expenses |
62,140 |
|
|
59,969 |
|
|
128,488 |
|
|
110,392 |
|
||||
Depreciation and amortization |
149,619 |
|
|
140,175 |
|
|
296,531 |
|
|
279,424 |
|
||||
Restructuring expenses |
? |
|
|
? |
|
|
? |
|
|
20,941 |
|
||||
Total costs and expenses |
392,366 |
|
|
347,513 |
|
|
816,698 |
|
|
692,009 |
|
||||
Loss from operations |
(37,135 |
) |
|
(43,616 |
) |
|
(118,174 |
) |
|
(84,880 |
) |
||||
Other expenses (income): |
|
|
|
|
|
|
|
||||||||
Interest expense |
50,058 |
|
|
54,515 |
|
|
99,861 |
|
|
119,808 |
|
||||
Interest income |
(110 |
) |
|
(32 |
) |
|
(154 |
) |
|
(261 |
) |
||||
Change in fair value of warrant liabilities |
(6,222 |
) |
|
62,202 |
|
|
(35,325 |
) |
|
78,919 |
|
||||
Other (income) expense, net |
(8,034 |
) |
|
(4,399 |
) |
|
(22,593 |
) |
|
18,440 |
|
||||
Total other expenses |
35,692 |
|
|
112,286 |
|
|
41,789 |
|
|
216,906 |
|
||||
Loss before income taxes |
(72,827 |
) |
|
(155,902 |
) |
|
(159,963 |
) |
|
(301,786 |
) |
||||
Income tax expense |
1,270 |
|
|
882 |
|
|
1,514 |
|
|
94 |
|
||||
Net loss |
$ |
(74,097 |
) |
|
$ |
(156,784 |
) |
|
$ |
(161,477 |
) |
|
$ |
(301,880 |
) |
VIVINT SMART HOME, INC. and SUBSIDIARIES Consolidated Balance Sheets (In thousands) (Unaudited) |
|||||||
|
Jun 30, 2021 |
|
Dec 31, 2020 |
||||
ASSETS |
|
|
|
||||
Current Assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
345,181 |
|
|
$ |
313,799 |
|
Accounts and notes receivable, net |
77,447 |
|
|
64,697 |
|
||
Inventories |
67,010 |
|
|
47,299 |
|
||
Prepaid expenses and other current assets |
39,452 |
|
|
14,338 |
|
||
Total current assets |
529,090 |
|
|
440,133 |
|
||
|
|
|
|
||||
Property, plant and equipment, net |
50,504 |
|
|
52,379 |
|
||
Capitalized contract costs, net |
1,372,073 |
|
|
1,318,498 |
|
||
Deferred financing costs, net |
1,467 |
|
|
1,667 |
|
||
Intangible assets, net |
81,902 |
|
|
111,474 |
|
||
Goodwill |
837,853 |
|
|
837,077 |
|
||
Operating lease right-of-use assets |
47,844 |
|
|
52,880 |
|
||
Long-term notes receivables and other assets, net |
53,069 |
|
|
62,510 |
|
||
Total assets |
2,973,802 |
|
|
2,876,618 |
|
||
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
||||
Current Liabilities: |
|
|
|
||||
Accounts payable |
139,022 |
|
|
85,656 |
|
||
Accrued payroll and commissions |
94,982 |
|
|
87,943 |
|
||
Accrued expenses and other current liabilities |
224,510 |
|
|
247,324 |
|
||
Current portion of notes payable, net |
9,500 |
|
|
9,500 |
|
||
Deferred revenue |
373,207 |
|
|
321,143 |
|
||
Current portion of operating lease liabilities |
11,865 |
|
|
12,135 |
|
||
Current portion of finance lease liabilities |
3,174 |
|
|
3,356 |
|
||
Total current liabilities |
856,260 |
|
|
767,057 |
|
||
|
|
|
|
||||
Notes payable, net |
2,813,037 |
|
|
2,816,100 |
|
||
Finance lease liabilities, net of current portion |
1,013 |
|
|
2,460 |
|
||
Operating lease liabilities |
44,361 |
|
|
49,692 |
|
||
Warrant derivative liabilities |
39,346 |
|
|
75,531 |
|
||
Deferred revenue, net of current portion |
717,423 |
|
|
615,598 |
|
||
Other long-term obligations |
132,696 |
|
|
121,235 |
|
||
Deferred income tax liabilities |
276 |
|
|
2,168 |
|
||
Total liabilities |
4,604,412 |
|
|
4,449,841 |
|
||
Total stockholders' deficit |
(1,630,610 |
) |
|
(1,573,223 |
) |
||
Total liabilities and stockholders' deficit |
2,973,802 |
|
|
2,876,618 |
|
||
VIVINT SMART HOME, INC. and SUBSIDIARIES Summary Cash Flow Data (In thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended Jun 30, |
|
Six Months Ended Jun 30, |
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net cash provided by operating activities |
$ |
78,394 |
|
|
$ |
111,620 |
|
|
$ |
64,238 |
|
|
$ |
78,751 |
|
Net cash used in investing activities |
(3,396 |
) |
|
(3,765 |
) |
|
(7,944 |
) |
|
(5,666 |
) |
||||
Net cash (used in) provided by financing activities |
(4,261 |
) |
|
9,660 |
|
|
(25,018 |
) |
|
171,321 |
|
||||
Effect of exchange rate changes on cash |
100 |
|
|
346 |
|
|
106 |
|
|
(5 |
) |
||||
Net increase in cash & cash equivalents |
70,837 |
|
|
117,861 |
|
|
31,382 |
|
|
244,401 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents: |
|
|
|
|
|
|
|
||||||||
Beginning of period |
274,344 |
|
|
131,089 |
|
|
313,799 |
|
|
4,549 |
|
||||
End of period |
$ |
345,181 |
|
|
$ |
248,950 |
|
|
$ |
345,181 |
|
|
$ |
248,950 |
|
Statement Regarding Non-GAAP Financial Measures
Adjusted EBITDA
Adjusted EBITDA is defined as net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation (or non-cash compensation), certain financing fees, changes in the fair value of the derivative liability associated with our public and private warrants and certain other non-recurring expenses or gains.
Adjusted EBITDA margin is defined as Adjusted EBITDA as a percent of revenue.
During the first quarter of 2021, in connection with our re-assessment of our accounting for our public and private warrants, we updated our definition of "Adjusted EBITDA" to exclude the impact of changes in the fair value of the derivative liability associated with our public and private warrants. We do not consider changes in the fair value of the warrants to be directly attributable to our operations and we believe that excluding the impact of changes in the fair value of the warrants from our calculation of Adjusted EBITDA results in a metric that better reflects the results of our operations. Prior period disclosures of Adjusted EBITDA were updated to conform to our updated definition of Adjusted EBITDA.
Adjusted EBITDA is not defined under GAAP and is subject to important limitations. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies.
Management believes that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management's performance for purposes of determining their compensation under our incentive plans.
Adjusted EBITDA and other non-GAAP financial measures have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP.
Covenant Adjusted EBITDA
Covenant Adjusted EBITDA is defined as net income (loss) before interest expense (net of interest income), income and franchise taxes and depreciation and amortization (including amortization of capitalized subscriber acquisition costs), further adjusted to exclude the effects of certain contract sales to third parties, non-capitalized subscriber acquisition costs, stock-based compensation, changes in the fair value of the derivative liability associated with our public and private warrants and certain unusual, non-cash, non-recurring and other items permitted in certain covenant calculations under the agreements governing our Notes, the credit agreement governing the 2025 Term Loan B and the credit agreement governing our revolving credit facility.
Covenant Adjusted EBITDA margin is defined as Covenant Adjusted EBITDA as a percent of revenue.
We believe that the presentation of Covenant Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, certain financial covenants contained in the agreements governing the Notes, the credit agreements governing the revolving credit facility and the 2025 Term Loan B. We caution investors that amounts presented in accordance with our definition of Covenant Adjusted EBITDA may not be comparable to similar measures disclosed by other issuers, because not all issuers and analysts calculate Covenant Adjusted EBITDA in the same manner.
Covenant Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net loss or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.
See the following tables for quantitative reconciliations of Adjusted EBITDA and Covenant Adjusted EBITDA for historical periods to Net Loss, which we believe is the most comparable financial measure calculated in accordance with GAAP.
VIVINT SMART HOME, INC. and SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (In millions) (Unaudited) |
|||||||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||
|
Jun 30, |
|
Jun 30, |
|
Sep 30, |
|
Dec 31, |
|
Mar 31, |
|
Jun 30, |
||||||||||||
|
2019 |
|
2020 |
|
2020 |
|
2020 |
|
2021 |
|
2021 |
||||||||||||
Net loss |
$ |
(115.9 |
) |
|
$ |
(156.8 |
) |
|
$ |
(108.7 |
) |
|
$ |
(184.6 |
) |
|
$ |
(87.4 |
) |
|
$ |
(74.1 |
) |
Interest expense, net |
65.8 |
|
|
54.5 |
|
|
51.0 |
|
|
49.9 |
|
|
49.8 |
|
|
49.9 |
|
||||||
Income tax (benefit) expense, net |
(0.6 |
) |
|
0.9 |
|
|
0.2 |
|
|
2.5 |
|
|
0.2 |
|
|
1.3 |
|
||||||
Depreciation |
7.1 |
|
|
5.2 |
|
|
4.9 |
|
|
4.4 |
|
|
4.1 |
|
|
4.3 |
|
||||||
Amortization (i) |
127.4 |
|
|
135.0 |
|
|
139.1 |
|
|
142.9 |
|
|
142.8 |
|
|
145.3 |
|
||||||
Stock-based compensation (ii) |
0.9 |
|
|
48.0 |
|
|
58.5 |
|
|
81.0 |
|
|
87.0 |
|
|
27.6 |
|
||||||
MDR fee (iii) |
3.8 |
|
|
6.0 |
|
|
7.7 |
|
|
8.7 |
|
|
9.3 |
|
|
10.2 |
|
||||||
Loss contingency (iv) |
? |
|
|
? |
|
|
10.0 |
|
|
13.2 |
|
|
? |
|
|
? |
|
||||||
CEO transition (v) |
? |
|
|
? |
|
|
? |
|
|
? |
|
|
? |
|
|
5.8 |
|
||||||
Chg. in fair value of warrant derivative liabilities (vi) |
? |
|
|
62.2 |
|
|
1.0 |
|
|
29.4 |
|
|
(29.1 |
) |
|
(6.2 |
) |
||||||
Other income, net (vii) |
(0.2 |
) |
|
(4.4 |
) |
|
(7.1 |
) |
|
(0.9 |
) |
|
(14.6 |
) |
|
(8.1 |
) |
||||||
Adjusted EBITDA |
$ |
88.3 |
|
|
$ |
150.6 |
|
|
$ |
156.6 |
|
|
$ |
146.5 |
|
|
$ |
162.1 |
|
|
$ |
156.0 |
|
Net loss margin |
(41.2 |
)% |
|
(51.6 |
)% |
|
(33.9 |
)% |
|
(55.5 |
)% |
|
(25.5 |
)% |
|
(20.9 |
)% |
||||||
Adjusted EBITDA margin |
31.4 |
% |
|
49.6 |
% |
|
48.8 |
% |
|
44.1 |
% |
|
47.2 |
% |
|
43.9 |
% |
||||||
(i) |
Excludes loan amortization costs that are included in interest expense |
|
(ii) |
Reflects stock-based compensation costs related to employee and director stock incentive plans |
|
(iii) |
Costs related to some of the financing fees incurred under the Vivint Flex Pay program |
|
(iv) |
Loss contingency accrual relating to regulatory matters |
|
(v) |
Hiring and severance expenses associated with CEO transition |
|
(vi) |
Reflects the change in fair value of the derivative liability associated with our public and private warrants |
|
(vii) |
Primarily consists of changes in our consumer finance program derivative instrument, foreign currency exchange, and other gains / losses associated with financings and other transactions |
VIVINT SMART HOME, INC. and SUBSIDIARIES Reconciliation of Non-GAAP Financial Measures (In millions) (Unaudited) |
|||||||||||||||||||
|
LTM Period Ended |
||||||||||||||||||
|
Jun 30, |
|
Sep 30, |
|
Dec 31, |
|
Mar 31, |
|
Jun 30, |
||||||||||
|
2020 |
|
2020 |
|
2020 |
|
2021 |
|
2021 |
||||||||||
Net loss |
$ |
(492.8 |
) |
|
$ |
(499.1 |
) |
|
$ |
(595.2 |
) |
|
$ |
(537.5 |
) |
|
$ |
(454.8 |
) |
Interest expense, net |
250.0 |
|
|
235.7 |
|
|
220.5 |
|
|
205.2 |
|
|
200.6 |
|
|||||
Other expense (income), net |
13.2 |
|
|
11.8 |
|
|
10.4 |
|
|
(26.9 |
) |
|
(30.6 |
) |
|||||
Income tax expense, net |
2.3 |
|
|
2.2 |
|
|
2.8 |
|
|
3.9 |
|
|
4.3 |
|
|||||
Restructuring expenses (i) |
20.9 |
|
|
20.9 |
|
|
20.9 |
|
|
? |
|
|
? |
|
|||||
Depreciation and amortization (ii) |
98.3 |
|
|
94.2 |
|
|
89.6 |
|
|
85.7 |
|
|
82.4 |
|
|||||
Amortization of capitalized contract costs |
458.8 |
|
|
469.3 |
|
|
481.2 |
|
|
492.8 |
|
|
505.5 |
|
|||||
Non-capitalized contract costs (iii) |
259.3 |
|
|
256.8 |
|
|
268.5 |
|
|
273.4 |
|
|
303.8 |
|
|||||
Stock-based compensation (iv) |
60.8 |
|
|
118.1 |
|
|
198.2 |
|
|
274.5 |
|
|
254.1 |
|
|||||
Change in fair value of warrant derivative liabilities (v) |
78.9 |
|
|
79.9 |
|
|
109.3 |
|
|
63.4 |
|
|
(5.0 |
) |
|||||
Other adjustments (vi) |
63.0 |
|
|
72.3 |
|
|
86.6 |
|
|
77.9 |
|
|
99.5 |
|
|||||
Adjustment for change in accounting principle (Topic 606) (vii) |
(84.0 |
) |
|
(90.9 |
) |
|
(88.4 |
) |
|
(88.6 |
) |
|
(106.7 |
) |
|||||
Covenant Adjusted EBITDA |
$ |
728.7 |
|
|
$ |
771.2 |
|
|
$ |
804.4 |
|
|
$ |
823.8 |
|
|
$ |
853.1 |
|
Net loss margin |
(40.9 |
)% |
|
(40.4 |
)% |
|
(47.2 |
)% |
|
(41.3 |
)% |
|
(33.6 |
)% |
|||||
Covenant Adjusted EBITDA margin |
60.4 |
% |
|
62.4 |
% |
|
63.8 |
% |
|
63.3 |
% |
|
63.1 |
% |
|||||
(i) |
Employee severance and termination benefits expenses associated with restructuring plans |
|
(ii) |
Excludes loan amortization costs that are included in interest expense |
|
(iii) |
Reflects subscriber acquisition costs that are expensed as incurred because they are not directly related to the acquisition of specific subscribers. Certain other industry participants purchase subscribers through subscriber contract purchases, and as a result, may capitalize the full cost to purchase these subscriber contracts, as compared to our organic generation of new subscribers, which requires us to expense a portion of our subscriber acquisition costs under GAAP. |
|
(iv) |
Reflects stock-based compensation costs related to employee and director stock incentive plans |
|
(v) |
Reflects the change in fair value of the derivative liability associated with our public and private warrants |
|
(vi) |
Includes certain items such as product development costs, Blackstone monitoring fee, loss contingencies, certain legal and professional fees, expenses associated with retention bonuses, relocation and severance payments, and certain other adjustments |
|
(vii) |
Adjustments to eliminate the impact of the Company's adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers |
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