Second Quarter 2023 Financial Highlights:
- Revenue of $477.8 million, an increase of 12.0% compared to the
prior year period; organic revenue growth of 11.6%
- Net income of $10.6 million, an increase of 43.2% compared to
the prior year period
- Adjusted EBITDA of $88.5 million, an increase of 20.9% compared
to the prior year period
Evoqua Water Technologies (NYSE:AQUA), an industry leader in
mission-critical water treatment solutions, today reported results
for its second quarter ended March 31, 2023.
Revenue for the second quarter of fiscal year 2023 was $477.8
million, compared to $426.7 million in the prior year period, an
increase of 12.0%, or $51.1 million. Organic revenue growth
contributed 11.6%, or $49.6 million, driven by favorable price
realization and higher volume for products and services across most
regions and product lines. Inorganic revenue contributed $5.3
million, primarily related to our acquisition of Smith Engineering
in July 2022. Revenue was unfavorably impacted by $3.8 million in
the period related to foreign currency translation. Net income for
the quarter was $10.6 million, resulting in diluted earnings per
share (“EPS”) of $0.08, as compared to net income of $7.4 million
and diluted EPS of $0.06 in the prior year period. The increase in
net income of 43.2%, or $3.2 million, was favorably impacted by
increased revenues and related profit. These benefits were
partially offset by increased operating expenses as compared to the
prior period, specifically higher legal expenses and other
consulting fees associated with various matters and pending
transactions, including the proposed merger transaction with Xylem
Inc., as well as higher wages and other costs associated with
acquisitions and inflation. The Company also recorded a loss of
$4.5 million related to the sale of a business and impairment of a
long-lived asset. The increased operating costs and losses were
somewhat mitigated by non-cash foreign currency translation gains
in the current period. Adjusted EBITDA for the quarter was $88.5
million, as compared to $73.2 million in the prior year period, an
increase of 20.9%, or $15.3 million. See the “Use of Non-GAAP
Measures” section below for additional information regarding
adjusted EBITDA.
“Our second quarter results were quite strong, with improvements
across most key financial metrics,” said Ron Keating, Evoqua
President and CEO. “Revenues were up 12.0% over the prior year
period, broadly distributed across most regions and product lines.
Overall market demand continues to be strong, our book to bill
ratio was again over 1.0, and ISS backlog grew double digits over
the prior year. Adjusted EBITDA and adjusted EBITDA margin achieved
record levels for a second fiscal quarter, and we are very pleased
with our performance improvements.”
Mr. Keating continued, “Our price / cost ratio continues to be
positive and contributed favorably to margin expansion. We are
seeing inflationary pressures stabilizing and material availability
across most commodities and components recovering. We expect
pricing and availability to continue to improve throughout the
second half of our fiscal year. Inventories are up year-over-year
supporting strong sales and order book growth but have come down
from the prior quarter, leading to an improvement in net working
capital. Operating cash flow increased year-over-year and
sequentially compared to the prior quarter, driven by EBITDA
performance and working capital improvements.”
Mr. Keating concluded, “We are pleased to have acquired the
Texas based industrial water service business from Kemco Systems in
February, further strengthening Evoqua's service footprint in the
Texas market. Having announced our combination with Xylem in
January, 2023 is shaping up to be a transformative year for the
company. I appreciate the dedication and focused execution from our
entire team as we delivered outstanding first half results.”
Dissemination of Company Information
The Company intends to make future announcements regarding
developments and financial performance through the Investor
Relations section of its website, as well as through press
releases, filings with the Securities and Exchange Commission (the
“SEC”), conference calls and webcasts. The Company does not
incorporate the information contained on, or accessible through,
its corporate website into this press release.
About Evoqua Water Technologies
Evoqua Water Technologies is a leading provider of mission
critical water and wastewater treatment solutions, offering a broad
portfolio of products, services, and expertise to support
industrial, municipal and recreational customers who value water.
Evoqua has worked to protect water, the environment and its
employees for more than 100 years, earning a reputation for
quality, safety and reliability around the world. Headquartered in
Pittsburgh, Pennsylvania, the company operates in more than 150
locations across nine countries. Serving more than 38,000 customers
and 200,000 installations worldwide, our employees are united by a
common purpose: Transforming Water. Enriching Life.®
Non-GAAP Financial Measures
This press release contains references to adjusted EBITDA, a
financial measure that is not calculated and presented in
accordance with generally accepted accounting principles in the
United States (“GAAP”). This non-GAAP financial measure is provided
as additional information for investors. We believe this non-GAAP
financial measure is helpful to management and investors in
highlighting trends in our operating results and provides greater
clarity and comparability period over period to management and our
investors regarding the operational impact of long-term strategic
decisions relating to capital structure, the tax jurisdictions in
which we operate and capital investments. The presentation of this
additional information is not meant to be considered in isolation
or as a substitute for GAAP measures. For definitions of the
non-GAAP financial measures used in this press release and
reconciliations to the most directly comparable respective GAAP
measures, see the “Use of Non-GAAP Measures” section below.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. You
can generally identify forward-looking statements by our use of
forward-looking terminology such as “aim,” “anticipate,” “assume,”
“believe,” “continue,” “could,” “estimate,” “expect,” “goal,”
“intend,” “may,” “might,” “plan,” “progress,” “potential,”
“predict,” “projection,” “seek,” “should,” “will,” or “would” or
the negative thereof or other variations thereon or comparable
terminology. All of these forward-looking statements are based on
our current expectations, assumptions, estimates, and projections.
While we believe these expectations, assumptions, estimates, and
projections are reasonable, such forward-looking statements are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond our control. These and
other important factors may cause our actual results, performance,
or achievements to differ materially from any future results,
performance, or achievements expressed or implied by these
forward-looking statements, or could affect our share price. Some
of the factors that could cause actual results to differ materially
from those expressed or implied by the forward-looking statements
include, among other things, the failure to complete the proposed
transaction with Xylem Inc. (“Xylem”) (the “Merger”) on the
anticipated terms and timing, or at all; the failure to obtain
stockholder approvals or to satisfy any of the other conditions to
the Merger on a timely basis or at all, or other delays in
completing the Merger; the failure to obtain necessary regulatory
approvals (and the risk that such approvals may result in the
imposition of conditions that could adversely affect the combined
company or the expected benefits of the Merger); the occurrence of
any event, change or other circumstances that could give rise to
the right of one or both of the parties to terminate the Company’s
merger agreement with Xylem; the possibility that the Merger may be
less accretive than expected, or may be dilutive; the possibility
that the anticipated benefits of the Merger will not be realized
when expected or at all, including as a result of the impact of, or
problems arising from, the integration of the two companies or as a
result of the strength of the economy and competitive factors in
the areas where the Company and Xylem do business; the possibility
that the Merger may be more expensive to complete than anticipated,
including as a result of unexpected factors or events; diversion of
management’s attention from ongoing business operations and
opportunities, as a result of the Merger; the risk that stockholder
litigation in connection with the Merger may affect the timing or
occurrence of the Merger or result in significant costs of defense,
indemnification and liability; the effect of the announcement of
the Merger on our ability to maintain relationships with customers,
suppliers, and other third parties; uncertainty as to the long-term
value of Xylem’s common stock; material, freight, and labor
inflation, commodity and component availability constraints, and
disruptions in global supply chains and transportation services;
general global economic and business conditions, including the
impacts of rising interest rates, recessionary conditions,
geopolitical conflicts, such as the conflict between Russia and
Ukraine and tensions between China and the U.S., and the COVID-19
pandemic; our ability to execute projects on budget and on
schedule; the potential for us to incur liabilities to customers as
a result of warranty claims or failure to meet performance
guarantees; our ability to meet our own and our customers’ safety
standards; failure to effectively treat emerging contaminants; our
ability to continue to develop or acquire new products, services
and solutions that allow us to compete successfully in our markets;
our ability to implement our growth strategy, including
acquisitions, and our ability to identify suitable acquisition
targets; our ability to operate or integrate any acquired
businesses, assets or product lines profitably; our ability to
achieve the expected benefits of our restructuring actions; delays
in enactment or repeals of environmental laws and regulations; the
potential for us to become subject to claims relating to handling,
storage, release or disposal of hazardous materials; our ability to
retain our senior management, skilled technical, engineering,
sales, and other key personnel and to attract and retain key talent
in increasingly competitive labor markets; including as a result of
the announcement of the Merger; risks associated with international
sales and operations; our ability to adequately protect our
intellectual property from third-party infringement; risks related
to our contracts with federal, state, and local governments,
including risk of termination or modification prior to completion;
risks associated with product defects and unanticipated or improper
use of our products; our ability to accurately predict the timing
of contract awards; risks related to our substantial indebtedness;
our increasing dependence on the continuous and reliable operation
of our information technology systems; risks related to foreign,
federal, state and local environmental, health and safety laws and
other applicable laws and regulations and the costs associated
therewith; our ability to execute on our strategies related to
environmental, social, and governance matters, and achieve related
goals and targets, including as a result of evolving standards,
laws, regulations, processes, and assumptions, delayed scientific
and technological developments, increased costs, and changes in
carbon markets; and other risks and uncertainties, including those
listed under Part I, Item 1A, “Risk Factors” in our Annual Report
on Form 10-K for the fiscal year ended September 30, 2022, as filed
with the SEC on November 16, 2022, and in other filings we may make
from time to time with the SEC. All statements other than
statements of historical fact included in this press release are
forward-looking statements, including, but not limited to, certain
plans, expectations, goals, projections, and statements about the
benefits of the Merger, the expected timing of completion of the
Merger, expectations for fiscal year 2023, expectations related to
customer demand, our book to bill ratio, pricing initiatives,
supply chain challenges, inflation, material and labor
availability, and general macroeconomic conditions, and
expectations with respect to the integration and performance of our
recent acquisitions, including the realization of expected
synergies. Any forward-looking statements made in this press
release speak only as of the date of this release. Except as
required by law, we do not undertake any obligation to update or
revise, or to publicly announce any update or revision to, any of
the forward-looking statements made herein, whether as a result of
new information, future events or otherwise after the date of this
release. These forward-looking statements should not be relied upon
as representing the Company’s views as of any date subsequent to
the date of this release.
EVOQUA WATER TECHNOLOGIES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)
(In thousands, except per share
amounts)
Three Months Ended
March 31,
Six Months Ended
March 31,
2023
2022
2023
2022
Revenue from product sales and
services
$
477,797
$
426,728
$
913,643
$
792,996
Cost of product sales and services
(325,901
)
(297,842
)
(631,438
)
(553,602
)
Gross profit
$
151,896
$
128,886
$
282,205
$
239,394
General and administrative expense
(77,758
)
(66,976
)
(141,834
)
(124,805
)
Sales and marketing expense
(43,215
)
(39,859
)
(83,601
)
(76,308
)
Research and development expense
(4,582
)
(3,751
)
(8,417
)
(7,203
)
Total operating expenses
$
(125,555
)
$
(110,586
)
$
(233,852
)
$
(208,316
)
Other operating (expense) income, net
(2,884
)
1,272
(1,664
)
2,782
Income before interest expense and
income taxes
$
23,457
$
19,572
$
46,689
$
33,860
Interest expense
(10,303
)
(9,950
)
(20,377
)
(16,529
)
Income before income taxes
$
13,154
$
9,622
$
26,312
$
17,331
Income tax expense
(2,522
)
(2,248
)
(6,412
)
(3,869
)
Net income
$
10,632
$
7,374
$
19,900
$
13,462
Net income attributable to non‑controlling
interest
—
44
—
145
Net income attributable to Evoqua Water
Technologies Corp.
$
10,632
$
7,330
$
19,900
$
13,317
Basic income per common share
$
0.09
$
0.06
$
0.16
$
0.11
Diluted income per common share
$
0.08
$
0.06
$
0.16
$
0.11
EVOQUA WATER TECHNOLOGIES CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except per share
amounts)
(Unaudited)
March 31, 2023
September 30,
2022
ASSETS
Current assets
$
844,441
$
831,389
Cash and cash equivalents
113,243
134,005
Receivables, net
303,855
305,712
Inventories, net
240,713
229,351
Contract assets
115,461
102,123
Other current assets
59,547
60,198
Current assets held for sale
11,622
—
Property, plant, and equipment, net
414,080
405,289
Goodwill
468,929
473,572
Intangible assets, net
299,302
317,733
Operating lease right-of-use assets,
net
56,568
53,540
Other non-current assets
96,517
109,340
Non-current assets held for sale
29,733
—
Total assets
$
2,209,570
$
2,190,863
LIABILITIES AND EQUITY
Current liabilities
$
474,491
$
483,716
Accounts payable
216,893
213,518
Current portion of debt, net of deferred
financing fees and discounts
19,376
17,266
Contract liabilities
75,512
62,439
Accrued expenses and other liabilities
153,110
178,272
Other current liabilities
9,113
12,221
Current liabilities held for sale
487
—
Non-current liabilities
995,774
997,054
Long-term debt, net of deferred financing
fees and discounts
853,599
863,534
Obligation under operating leases
45,650
43,961
Other non-current liabilities
93,822
89,559
Non-current liabilities held for sale
2,703
—
Total liabilities
$
1,470,265
$
1,480,770
Shareholders’ equity
Common stock, par value $0.01: authorized
1,000,000 shares; issued 123,944 shares, outstanding 122,280 at
March 31, 2023; issued 123,411 shares, outstanding 121,747 at
September 30, 2022
$
1,240
$
1,235
Treasury stock: 1,664 shares at March 31,
2023 and 1,664 shares at September 30, 2022
(2,837
)
(2,837
)
Additional paid-in capital
620,056
607,748
Retained earnings
80,916
61,016
Accumulated other comprehensive income,
net of tax
39,930
42,931
Total shareholders’ equity
$
739,305
$
710,093
Total liabilities and shareholders’
equity
$
2,209,570
$
2,190,863
EVOQUA WATER TECHNOLOGIES CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
(In thousands)
Six Months Ended March
31,
2023
2022
Operating activities
Net income
$
19,900
$
13,462
Reconciliation of net income to cash flows
(used in) provided by operating activities:
Depreciation and amortization
66,647
61,156
Amortization of deferred financing
fees
943
926
Deferred income taxes
3,195
592
Share-based compensation
12,200
10,589
Gain on sale of property, plant and
equipment
(1,403
)
(61
)
Loss (gain) on sale of business
2,857
(193
)
Impairment of long-lived assets
1,703
—
Foreign currency exchange (gains) losses
on intercompany loans and other non-cash items
(9,805
)
3,728
Changes in assets and liabilities
(62,050
)
(61,051
)
Net cash provided by operating
activities
34,187
29,148
Investing activities
Purchase of property, plant, and
equipment
(53,211
)
(36,320
)
Purchase of intangibles
(2,479
)
(1,582
)
Proceeds from sale of property, plant, and
equipment
3,621
1,940
Proceeds from sale of business, net of
cash of $0 and $0
67
356
Acquisitions
816
(194,976
)
Net cash used in investing activities
(51,186
)
(230,582
)
Financing activities
Borrowing of debt
157,774
223,793
Repayment of debt
(166,542
)
(33,362
)
Repayment of finance lease obligation
(7,156
)
(6,571
)
Receipt of earn-out related to previous
acquisitions
7,824
—
Proceeds from issuance of common stock
4,700
5,274
Taxes paid related to net share
settlements of share-based compensation awards
(4,734
)
(5,144
)
Distribution to non‑controlling
interest
—
(100
)
Net cash used in financing activities
(8,134
)
183,890
Effect of exchange rate changes on
cash
4,371
800
Change in cash and cash equivalents
(20,762
)
(16,744
)
Cash and cash equivalents
Beginning of period
134,005
146,244
End of period
$
113,243
$
129,500
Revenue
Revenue is used by management to evaluate the performance of our
business. Revenue growth is primarily related to organic and
inorganic factors. Organic revenue growth, as a component of
revenue growth, is defined as period over period revenue growth
without (i) the impact from acquisitions and divestitures during
the first 12 months following the closing of the acquisition or
divestiture, which we refer to as inorganic impact, and (ii) the
impact of foreign currency translation. Divestitures include sales
of insignificant portions of our business that did not meet the
criteria for classification as a discontinued operation. We
disregard the effect of foreign currency translation from organic
revenue growth because foreign currency translation is not under
management’s control, is subject to volatility and can obscure
underlying business trends. The effect of acquisitions and
divestitures during the first 12 months following the closing of
the acquisition or divestiture are excluded because they can
obscure underlying business trends and make comparisons of
long-term performance difficult between the Company and its peers
due to the varying nature, size, and number of transactions from
period to period.
Components of our revenue growth for the three months ended
March 31, 2023 and 2022 are as follows:
Evoqua Water
Technologies
Integrated Solutions and
Services
Applied Product
Technologies
(In millions)
$ Change
% Change
$ Change
% Change
$ Change
% Change
Three months ended March 31, 2021 total
revenue
$
346.6
n/a
$
224.2
n/a
$
122.4
n/a
Organic
36.7
10.6
%
25.6
11.4
%
11.1
9.1
%
Inorganic
45.1
13.0
%
45.1
20.1
%
—
—
%
Foreign currency translation
(1.7
)
(0.5
)%
(0.1
)
—
%
(1.6
)
(1.3
)%
Three months ended March 31, 2022 total
revenue
$
426.7
23.1
%
$
294.8
31.5
%
$
131.9
7.8
%
Organic
49.6
11.6
%
29.6
10.0
%
20.0
15.2
%
Inorganic
5.3
1.2
%
5.3
1.8
%
—
—
%
Foreign currency translation
(3.8
)
(0.8
)%
(0.8
)
(0.2
)%
(3.0
)
(2.3
)%
Three months ended March 31, 2023 total
revenue
$
477.8
12.0
%
$
328.9
11.6
%
$
148.9
12.9
%
Use of Non-GAAP Measures
The Company reports its financial results in accordance with
GAAP. However, management believes that certain non-GAAP financial
measures provide users of the Company's financial information with
additional useful information in evaluating operating performance.
We use the non-GAAP financial measures EBITDA and adjusted EBITDA
in evaluating the strength and financial performance of our core
business.
EBITDA and Adjusted EBITDA
EBITDA, which is a non-GAAP financial measure, is defined as net
income (loss) before interest expense, income tax benefit
(expense), and depreciation and amortization. Adjusted EBITDA is
defined as net income (loss) before interest expense, income tax
benefit (expense), and depreciation and amortization, adjusted for
the impact of certain other items, including restructuring and
related business transformation costs, share-based compensation,
transaction costs, and other gains, losses and expenses that we
believe do not directly reflect our underlying business
operations.
Adjusted EBITDA is one of the primary metrics used by management
to evaluate the financial performance of our business. We present
adjusted EBITDA because we believe it is frequently used by
analysts, investors and other interested parties to evaluate and
compare operating performance and value companies within our
industry. Further, we believe it is helpful in highlighting trends
in our operating results and provides greater clarity and
comparability period over period to management and our investors
regarding the operational impact of long-term strategic decisions
relating to capital structure, the tax jurisdictions in which we
operate and capital investments. In addition, adjusted EBITDA
highlights true business performance by removing the impact of
certain items that management believes do not directly reflect our
underlying operations and provides investors with greater
visibility into the ongoing organic drivers of our business
performance.
Management uses adjusted EBITDA to supplement GAAP measures of
performance as follows:
- to assist investors and analysts in comparing our operating
performance across reporting periods on a consistent basis by
excluding items that we do not believe are indicative of our core
operating performance;
- in our management incentive compensation, which is based in
part on components of adjusted EBITDA;
- in certain calculations under our senior secured credit
facilities, which use components of adjusted EBITDA;
- to evaluate the effectiveness of our business strategies;
- to make budgeting decisions; and
- to compare our performance against that of other peer companies
using similar measures.
In addition to the above, our chief operating decision maker
uses adjusted EBITDA of each reportable operating segment to
evaluate the operating performance of such segments. Adjusted
EBITDA on a segment basis is defined as earnings before
depreciation and amortization, adjusted for the impact of certain
other items that have been reflected at the segment level. Adjusted
EBITDA of the reportable operating segments do not include certain
charges that are presented within corporate activities. These
charges include certain restructuring and other business
transformation charges that have been incurred to align and
reposition the Company to the current reporting structure,
acquisition related costs (including transaction costs and
integration costs) and share-based compensation charges.
EBITDA and Adjusted EBITDA should not be considered a substitute
for, or superior to, financial measures prepared in accordance with
GAAP. The financial results prepared in accordance with GAAP and
the reconciliations from these results included below should be
carefully evaluated. You are encouraged to evaluate each adjustment
and the reasons we consider it appropriate for supplemental
analysis. In addition, in evaluating adjusted EBITDA, you should be
aware that in the future, we may incur expenses similar to the
adjustments in the presentation of adjusted EBITDA. Our
presentation of adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by unusual or
non-recurring items. In addition, other companies in our industry
or across different industries may calculate adjusted EBITDA
differently.
The following is a reconciliation of our net income to EBITDA
and adjusted EBITDA (unaudited):
Three Months Ended
March 31,
Six Months Ended
March 31,
(In millions)
2023
2022
Variance(1)
2023
2022
Variance(1)
Net income
$
10.6
$
7.4
43.2
%
$
19.9
$
13.5
47.4
%
Income tax expense
2.5
2.2
13.6
%
6.4
3.9
64.1
%
Interest expense
10.3
10.0
3.0
%
20.4
16.5
23.6
%
Operating profit
$
23.4
$
19.6
19.4
%
$
46.7
$
33.9
37.8
%
Depreciation and amortization
33.4
32.6
2.5
%
66.6
61.2
8.8
%
EBITDA
$
56.8
$
52.2
8.8
%
$
113.3
$
95.1
19.1
%
Restructuring and related business
transformation costs(a)
1.4
1.8
(22.2
)%
3.1
3.2
(3.1
)%
Purchase accounting adjustment
costs(b)
—
2.6
(100.0
)%
—
2.6
(100.0
)%
Share-based compensation(c)
6.9
6.1
13.1
%
13.2
11.4
15.8
%
Transaction costs(d)
18.0
4.0
350.0
%
21.3
4.9
334.7
%
Other losses (gains) and expenses(e)
5.4
6.5
(16.9
)%
10.3
10.3
—
%
Adjusted EBITDA
$
88.5
$
73.2
20.9
%
$
161.2
$
127.5
26.4
%
Revenue
$
477.8
$
426.7
12.0
%
$
913.6
$
793.0
15.2
%
Net income as a percent of
revenue
2.2
%
1.7
%
50 bps
2.2
%
1.7
%
50 bps
Adjusted EBITDA margin
18.5
%
17.2
%
130 bps
17.6
%
16.1
%
150 bps
(a)
Restructuring and related business
transformation costs
Adjusted EBITDA is calculated prior to
considering certain restructuring or business transformation
events. These events may occur over extended periods of time, and
in some cases it is reasonably possible that they could reoccur in
future periods based on reorganizations of the business, cost
reduction or productivity improvement needs, or in response to
economic conditions. For the periods presented such events include
the following:
(i) Certain costs and expenses in
connection with various restructuring initiatives, including
severance and other employee-related costs, relocation and facility
consolidation costs and third-party consultant costs to assist with
these initiatives. This includes:
(A) amounts related to the Company’s
restructuring initiatives to reduce the cost structure and
rationalize location footprint;
(B) amounts related to various other
initiatives implemented to restructure and reorganize our business
with the appropriate management team and cost structure.
(ii) Legal settlement costs and
intellectual property related fees, including fees and settlement
costs associated with legacy matters related to product warranty
litigation on MEMCOR® products and certain discontinued products.
Memcor ® is a trademark of Rohm & Haas Electronic Materials
Singapore Pte. Ltd.
(iii) Expenses associated with our
information technology and functional infrastructure
transformation, including activities to optimize information
technology systems and functional infrastructure processes.
(b)
Purchase accounting adjustment
costs
Adjusted EBITDA is calculated prior to
considering adjustments for the effect of the purchase accounting
step-up in the value of inventory to fair value recognized in cost
of goods sold as a result of the acquisition of the Mar Cor
Business.
(c)
Share-based compensation
Adjusted EBITDA is calculated prior to
considering share-based compensation expenses related to equity
awards. See Note 17, “Share-Based Compensation,” to our Unaudited
Consolidated Financial Statements included in our Quarterly Report
on Form 10-Q for the six months ended March 31, 2023 for further
detail.
(d)
Transaction costs
Adjusted EBITDA is calculated prior to
considering transaction, integration and restructuring costs
associated with business combinations because these costs are
unique to each transaction and represent costs that were incurred
as a result of the transaction decision. Integration and
restructuring costs associated with a business combination may
occur over several years and include, but are not limited to,
consulting fees, legal fees, certain employee-related costs,
facility consolidation and product rationalization costs and fair
value changes associated with contingent consideration.
(e)
Other losses (gains) and
expenses
Adjusted EBITDA is calculated prior to
considering certain other significant losses, (gains) and expenses.
For the periods presented such events include the following:
(i) impact of foreign exchange gains and
losses; and
(ii) legal fees and settlement costs
incurred in excess of amounts covered by the Company’s insurance
related to securities litigation and SEC investigation matters;
and
(iii) loss on sale of the Filtration
Business within the Integrated Solutions and Services Segment;
and
(iv) impairment of certain long-lived
assets related to product rationalization in the
electro-chlorination business.
(1)
Variance presented as a percentage for
items presented in dollar values or basis points (“bps”) for items
presented as percentages.
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version on businesswire.com: https://www.businesswire.com/news/home/20230502005196/en/
Investors Dan Brailer Vice President, Investor Relations Evoqua
Water Technologies Telephone: 724-720-1605 Email:
dan.brailer@evoqua.com
Media Sarah Brown Director of Corporate Communications Evoqua
Water Technologies Telephone: 506-454-5495 Email:
sarah.brown@evoqua.com
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