| Adjusted EBITDA To Operating Income (Loss) And Consolidated Net Income |
The following tables reconcile Adjusted EBITDA to operating income for HSNi’s operating segments and to HSNi’s consolidated net income (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2016 |
|
Three Months Ended September 30, 2015 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Adjusted EBITDA |
$ |
58,020 |
|
|
$ |
4,889 |
|
|
$ |
62,909 |
|
|
$ |
67,109 |
|
|
$ |
11,028 |
|
|
$ |
78,137 |
|
Stock-based compensation expense |
(3,671 |
) |
|
(568 |
) |
|
(4,239 |
) |
|
(3,292 |
) |
|
(1,097 |
) |
|
(4,389 |
) |
Depreciation and amortization |
(7,304 |
) |
|
(3,214 |
) |
|
(10,518 |
) |
|
(7,318 |
) |
|
(3,290 |
) |
|
(10,608 |
) |
Distribution center closure (a) |
— |
|
|
— |
|
|
— |
|
|
(189 |
) |
|
— |
|
|
(189 |
) |
Loss on sale of businesses and asset impairment (b)(c) |
— |
|
|
(11,195 |
) |
|
(11,195 |
) |
|
— |
|
|
(5,000 |
) |
|
(5,000 |
) |
Loss on disposition of fixed assets |
(82 |
) |
|
— |
|
|
(82 |
) |
|
(115 |
) |
|
(3 |
) |
|
(118 |
) |
Operating income (loss) |
$ |
46,963 |
|
|
$ |
(10,088 |
) |
|
36,875 |
|
|
$ |
56,195 |
|
|
$ |
1,638 |
|
|
57,833 |
|
Total other expense, net |
|
|
|
|
(4,001 |
) |
|
|
|
|
|
(4,063 |
) |
Income before income taxes |
|
|
|
|
32,874 |
|
|
|
|
|
|
53,770 |
|
Income tax provision |
|
|
|
|
(12,716 |
) |
|
|
|
|
|
(19,562 |
) |
Net income |
|
|
|
|
$ |
20,158 |
|
|
|
|
|
|
$ |
34,208 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016 |
|
Nine Months Ended September 30, 2015 |
|
HSN |
|
Cornerstone |
|
Total |
|
HSN |
|
Cornerstone |
|
Total |
Adjusted EBITDA |
$ |
184,990 |
|
|
$ |
26,052 |
|
|
$ |
211,042 |
|
|
$ |
201,493 |
|
|
$ |
39,820 |
|
|
$ |
241,313 |
|
Stock-based compensation expense |
(11,577 |
) |
|
(3,121 |
) |
|
(14,698 |
) |
|
(10,518 |
) |
|
(3,296 |
) |
|
(13,814 |
) |
Depreciation and amortization |
(21,582 |
) |
|
(10,163 |
) |
|
(31,745 |
) |
|
(22,326 |
) |
|
(10,616 |
) |
|
(32,942 |
) |
Distribution center closure (a) |
— |
|
|
— |
|
|
— |
|
|
(3,221 |
) |
|
— |
|
|
(3,221 |
) |
Loss on sale of businesses and asset impairment (b)(c) |
— |
|
|
(31,595 |
) |
|
(31,595 |
) |
|
— |
|
|
(5,000 |
) |
|
(5,000 |
) |
Loss on disposition of fixed assets |
(86 |
) |
|
— |
|
|
(86 |
) |
|
(779 |
) |
|
(11 |
) |
|
(790 |
) |
Operating income (loss) |
$ |
151,745 |
|
|
$ |
(18,827 |
) |
|
132,918 |
|
|
$ |
164,649 |
|
|
$ |
20,897 |
|
|
185,546 |
|
Total other expense, net |
|
|
|
|
(11,988 |
) |
|
|
|
|
|
(11,241 |
) |
Income before income taxes |
|
|
|
|
120,930 |
|
|
|
|
|
|
174,305 |
|
Income tax provision |
|
|
|
|
(45,742 |
) |
|
|
|
|
|
(64,776 |
) |
Net income |
|
|
|
|
$ |
75,188 |
|
|
|
|
|
|
$ |
109,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) HSN recorded $0.2 million and $3.2 million in the third quarter and nine months ended September 30, 2015, respectively, for certain costs associated with the planned closure of one of its distribution centers. |
(b) Cornerstone recorded a loss on the sale of TravelSmith and Chasing Fireflies of $11.2 million in the third quarter of 2016 and related asset impairment charges of $20.4 million in the second quarter of 2016. See Note 14 for further information. |
(c) Cornerstone recorded a $5.0 million non-cash charge for the impairment of intangible assets related to Chasing Fireflies in the third quarter of 2015. |
|
| Financial Information By Segment |
The net sales for each of HSNi's reportable segments are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net sales: |
|
|
|
|
|
|
|
|
HSN |
|
$ |
569,669 |
|
|
$ |
590,588 |
|
|
$ |
1,705,215 |
|
|
$ |
1,763,384 |
|
Cornerstone |
|
253,354 |
|
|
274,280 |
|
|
788,881 |
|
|
829,013 |
|
Total |
|
$ |
823,023 |
|
|
$ |
864,868 |
|
|
$ |
2,494,096 |
|
|
$ |
2,592,397 |
|
|