REG - Spectra Systems Spectra Systems-SPSC - Interim Results for Six Months Ended 30 June 2022
12/09/2022 07:00
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RNS Number : 0189Z Spectra Systems Corporation 12 September 2022
Spectra Systems Corporation
Interim Results for the Six Months Ended 30 June 2022
Spectra Systems Corporation (the "Company"), a leader in machine-readable high
speed banknote authentication, brand protection technologies, and gaming
security software, is pleased to announce its interim results for the six
months ended 30 June 2022.
Financial highlights:
· Revenue of $9,265k (2021: $8,023k) up 15%
· Adjusted EBITDA(1) up 8% at $3,818k (2021: $3,522k)
· Adjusted PBTA(1) up 8% to $3,669k (2021: $3,383k)
· Adjusted earnings(2) per share down 7% to US $6.2 cents (2021: US
$6.7 cents)
· Cash generated from operations of $7,245k (2021: $4,464k)
· Annual 2021 dividend of US$0.11 per share ($5,004k in aggregate)
paid in June 2022
· Strong, debt-free balance sheet, with cash(3) of $17,961k (2021:
$12,851k) at 30 June
· Buy-back of 350,000 shares in the period
(1) Before stock compensation expense and excludes noncontrolling interest
(2) Before amortization and stock compensation expense, excludes
noncontrolling interest and fewer remaining tax credits
(3) Does not include $500,000 (2021: $1,099k) of restricted cash and
investments
Operational highlights:
· Increased total central bank sensor revenue with additional
contract enhancements (amendments) for increased sensor testing and more
flexibility with sorter integration
· Began a funded development to mitigate supply chain impacts in raw
materials with a central bank customer
· Successfully completed a second gravure test of TruBrand(TM) with a
major cigarette supplier in China
· Executed an agreement with a strategic partner for dairy and
transit licences in India
· Rollout of our Fusion(TM) machine readable polymer substrate at the
Banknote 2022 conference
· Sale of our first Banknote Disinfection System to an Asian central
bank
· Achieved a nearly three-fold increase in sales revenue for K-cup
optical materials through a second large customer
· Provided polymer substrate samples to a Middle Eastern central bank
with a second set being delivered in H2 of 2022
· Expanded the lottery business into Canada with a new contract award
and renewed a long-term US customer contract
Commenting on the results, Nabil Lawandy, Chief Executive Officer, said:
"The Company's first half revenues and earnings are up substantially from the
six months ended June 30, 2021 and in line with the Board's upward revised
expectations for H1. Our cash position has greatly increased due to sensor
development prepayments, additional sales, and release of part of the
restricted cash associated with the last sensor deployment.
We have obtained new business from a long-standing central bank customer which
supports our position as the technology leader for the highest-level security
requirements. During 2022 the Company has been granted additional contract
enhancements (amendments) which have increased the value of the sensor
development work to $14.4MM for this customer. Based on the current program
timeline, we continue to plan around a late 2024 delivery for the first order
of sensors with the total value of all units after delivery being
approximately $50m with additional ongoing service revenues.
Spectra Systems, with our proven track record of developing solutions for our
customers in record time, has capitalized on the environment that was created
by the Covid-19 pandemic. While other companies complained that they could
not source materials and electronics components we took the approach of
solving the problems for our customers. Our efforts on this front have been
two-fold:
· We have initiated a program with a central bank customer to shore
up the supply chain for taggants by manufacturing in-house a previously
commercially sourced chemical. This effort will result in development
payments and an ongoing price increase for our high-performance consumables;
and
· We developed the world's largest capacity, and shortest process
time, banknote disinfection machine and sold our first unit to an Asian
central bank.
On the optical materials front, we have significantly grown revenue from K-cup
printers and have had successful TruBrand(TM) gravure print trials with a
second major cigarette supplier in China. In addition, we are commencing a new
testing program with a large Japanese label supplier, and have executed a
supply agreement with a strategic partner in India for dairy products and
transit vouchers.
Finally, our gaming software operation continues to make steady progress
towards completion of our new Integrity product which will result in a more
compelling sales proposition as well as a reduction in support costs going
forward. Completion of the new Premier Integrity product is expected to be
in late 2023.
"The Board therefore believes that the Company is on track to achieve record
earnings and meet market expectations for the full year."
Spectra Systems Corporation Tel: +1 (0)401 274 4700
Dr. Nabil Lawandy, Chief Executive Officer
WH Ireland Limited (Nominated Adviser and Joint Broker) Tel: +44 (0)20 7220 1650
Chris Fielding (Head of Corporate Finance)
Allenby Capital Limited (Joint Broker) Tel: +44 (0)20 3328 5665
Nick Naylor/James Reeve (Corporate Finance)
Amrit Nahal (Sales and Corporate Broking)
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the “UK MAR”) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company’s obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
Chief Executive Officer's statement
Introduction
Already in 2022, we have upgraded market expectations twice and are now
significantly outperforming H1 2021 results while our cash position is the
highest in the company's history and nearly at the IPO closing levels.
Revenue was up 15% at $9,265k (2021: $8,023k) for the first half of the year.
The increased revenues in the first half are derived principally from
pre-production development contracts as well as larger demand for our
materials to meet increased banknote demands of one of our existing central
bank customers.
As a result of the increased revenue, adjusted EBITDA (before stock
compensation expense) for the half year increased 8%, to $3,818k compared to
the prior year of $3,552k.
Having generated cash from operations of $7,245k (2021: $4,464k), cash at the
period end amounted to $17,961k (2021: $12,851k), excluding $500,000 of
restricted cash and investments (2021: $1,099k). This is notwithstanding
$5,004k paid to shareholders during June in the form of the Company's dividend
of $0.11 per share and $570k used for buying back 350,000 shares.
Review of Operations
Physical and Software Authentication Business
The Authentication Systems business generated revenue of $8,565k (2021:
$7,103k) and Adjusted EBITDA of $3,878k (2021: $3,470k). Authentication
Systems revenues are driven by sales of covert materials and their associated
equipment and service, optical and security phosphour materials and licence
payments from our licensee. The increased revenue is due to a combination of
sizable materials orders and increased sensor development funding from our
long-standing central bank customer, as well as increased optical materials
sales. The increase in development funding as well as the central bank
lowering our performance bond has also significantly increased our cash
position. We continue to move forward with this central bank towards the
delivery of the first sensors in late 2024.
Through our vertically integrated manufacturing we have been able to produce
high quality conducting and opacified polymer substrate for evaluation by
central banks, ink suppliers and printing organizations. We have produced a
large number of custom designed sheets for a Middle Eastern central bank print
trial which has resulted in a request for a second set of substrate sheets to
be delivered in 2022 for further evaluation. In addition, the Company has
formed a close working relationship with the largest commercial printer of
polymer banknotes and is developing a house note which will incorporate both
our Fusion(TM) machine readable security as well as their newest public
security feature. The Directors understand that the result of this joint
development will produce polymer banknotes of the highest quality for a
joint marketing effort.
We are increasing our sales and marketing efforts for Fusion(TM) as well as
our suite of banknote products and are taking full advantage of the
availability of experienced individuals, as well as equipment, which have
become available since the closing of the Portals Overton facility.
With the TruBrand(TM) authentication product having been successfully
introduced into the Chinese tobacco market with over 6 million packs with our
smartphone authentication in retail stores in 2019, we have completed two
successful gravure tests with another large supplier of cigarettes in China.
Although these successful trials resulted in a binding agreement with this
supplier, progress has been stalled by recent political tensions between the
USA and China. We continue to expand our search for new TruBrand(TM) customers
outside of China, including a major Japanese printer, a partnership with a
company in India bidding on authentication of both dairy products as well as
transit certificates, and tax stamps in a European country.
In addition, we are in an evaluation phase aimed at increasing the customer
base for the other authentication technology we acquired several years ago
with a printer for a well-respected French luxury brand to help protect their
products sold in China. The Company also expects to fill orders in H2 for over
a hundred handheld readers for use in authentication tax stamps produced by a
large banknote printer.
Our K-cup materials business has grown significantly after a new customer
began purchasing our products in H2 of 2021. Revenues for the full year 2022
are expected to be nearly three times higher than 2021. Through an internal
development effort, we have achieved a significant cost reduction for
manufacturing the covert materials, further boosting our margins on this
product.
On the software security side of the Company's business, the Secure
Transactions Group, formed around two gaming technology acquisitions made in
2012, generated an Adjusted EBITDA of ($60K) (2021: $112k) on revenue of $700k
(2021: $920k). The H1 results are in line with expectations as we continue
development of a new software platform with heavy staffing costs depressing
EBITDA. While this development continues, we are focusing on the online
lottery sector which grew during the pandemic through a partnership with
NextGen Lotteries.
Banknote Cleaning and Disinfection Business
We have sold our first Banknote Disinfection System (BDS) for use by an Asian
central bank. The unit will be installed in H2 and the terms included a 30%
up-front payment as well as a follow-on service agreement. As this system is
scalable from 250,000 notes to over five million notes in a single cycle of
one hour, we have the ability to accommodate a large spread of potential
customer requirements. With this first unit sold, we are ramping up our
sales and marketing process to other central banks as well as the casino
industry.
Solaris BioSciences Investment Asset
In December 2020, the Company made an investment in Solaris BioSciences, whose
results are consolidated by the Company. The technology is entirely optical
and has three major target opportunities which are all focused on extremely
low volumes of biofluids: blood plasma viscosity for inflammation, milk
viscosity for dysphagia in newborns, and protein markers for cancer survivors
to track metastasis. The combined market opportunity for a two-minute,
microliter sample volume (pinprick) tests are believed to be well over 1
billion per annum in consumables.
During H1, Solaris BioSciences Holdings was formed as a UK company and has
obtained EIS status with HMRC. Solaris has also engaged W H Ireland to
undertake a private equity financing which is currently underway.
Corporate Governance
Spectra Systems is an AIM listed company and has always tried to abide by best
practices as advised by both our bankers as well as our shareholders.
Recently ISS has issued certain recommendations regarding board composition,
committee assignments, and option grants.
Our board has comprised the same Directors since our listing with the
exception of the addition of Mr. Jeremy Fry (UK based) who replaced Mr. Martin
Jaskel after his untimely passing away. In order to add a new dimension to
the board, we are actively recruiting a new board member. We have identified
a candidate and are working through the regulatory approval process.
With the addition of this new board member, Dr. Nabil Lawandy will be able to
exit the Audit Committee assignment as there will be a suitable replacement to
share the burden of committee assignments.
With regards to Director option grants, the Company has adopted a new policy
which will allow new Directors to receive a one-time option grant upon joining
the board of directors. Going forward, no Directors will be issued new
options beyond the ones received at joining the board. This is a compromise
position relative to USA standards and ISS recommendations that Directors hold
no options.
Strategy
The Company's strategy for increasing revenue and earnings continues to be
focused on selling more products to existing customers as well as opening new
sales channels for the full spectrum of our product offering. We have had
very good success in upselling existing central bank customers and
commercially exploiting supply chain and pandemic related issues as part of
our strategy. Examples of these successes are the expansion of sensor
capabilities for exotic counterfeits, the development and first sale of a
banknote disinfection machine, and the commencement of a program with our
customer to deal with supply chain issues now and going forward.
Our strategy for growing our newest and potentially transformative technology
for polymer banknotes is based on validation, followed by commemorative
banknote contract and then a full banknote denomination contract. The
validation is focused on three major stakeholders in the polymer banknote
industry: the ink manufacturers, the commercial printers, and the state
printworks. Our primary targets are central banks which are currently using
paper substrates and are contemplating a transition to polymer as well as
central banks who have decided not to use polymer for higher denominations due
to security concerns.
With regards to our optical materials and brand authentication products, we
continue to propose to both central banks and overt security suppliers the
concept of upgrading such features to incorporate public and machine-readable
security. The strategy behind this approach is based around partnering with
current contract holders who can benefit from our technology and materials to
upsell their existing customers. This approach is being implemented with
TruBrand(TM) as well as with our gaming software business where we have
partnered with online lottery suppliers to mutually benefit from the
combination of capabilities at a compelling price point.
Finally, we are exploring possible mergers and acquisitions which can
immediately open doors to implement our upselling strategy and expand our
customer base. The exploration of such opportunities has always been in the
background but is now becoming more viable at larger scales as we expect to
have significant cash resources through the successful delivery of the major
central bank sensor contract.
Prospects
The Company continues to have a multitude of new short-term and long-term
prospects. The short-term opportunities are expected in the 2022-2024 period
and the long-term opportunities are expected in the 2025-2030-time frame.
The near-term opportunities are:
o A new supply chain impact mitigation contract with a central bank
o Increase in taggant pricing with a central bank customer
o Completion of sensor development and revenue recognition of the remaining
$7.7m of sensor development payments
o New online Quality Control system contract
o First sensor shipments to a central bank
o TruBrand(TM) revenue reaching $1m per annum levels
o Sale of additional Banknote Disinfection Systems
o Increased sales of our newest phosphour products
o Expansion of our gaming software business in Canada and other non-USA
customers and in the online lottery market
The longer-term opportunities are:
o A commemorative note series using our Fusion polymer substrate
o Supply of upgraded sensors worth up to $50MM in hardware to a central bank
customer
o Supply of Fusion(TM) polymer substrate and sensors to a central bank for a
banknote denomination
o Significantly increased adoption of covert authentication materials by a
current or new central bank customer
The combination of these prospects, both short and long-term, has positioned
the Company to continue its revenue and earnings growth over the coming years.
We continue to develop cutting edge technologies to remain the technology
leader in the authentication industry and to offer our shareholders growth
through innovation for both new and existing customers.
Nabil M. Lawandy
Chief Executive Officer
September 12, 2022
Consolidated statements of income
for the half year ended 30 June 2022
Half Year Half Year Full Year
to 30 Jun 2022 to 30 Jun 2021 to 31 Dec 2021
Unaudited Unaudited Audited
Note USD '000 USD '000 USD '000
Revenues
Product $ 5,488 $ 4,607 $ 9,281
Service 2,907 2,548 5,524
License and royalty 870 868 1,787
Total revenues 9,265 8,023 16,592
Cost of sales 3,145 2,578 6,069
Gross profit 6,120 5,445 10,523
Operating expenses
Research and development 837 755 1,399
General and administrative 1,481 1,433 2,743
Sales and marketing 478 230 471
Total operating expenses 2,796 2,418 4,613
Operating profit 3,324 3,027 5,910
Interest and other income 8 29 40
Loss on sale of equipment - (19) (19)
Foreign currency gain(loss) 3 (3) 12
Profit before taxes 3,335 3,034 5,943
Income tax expense 707 157 878
Net income 2,628 2,877 5,065
Net loss attributable to noncontrolling interest
22 71 98
Net income attributable to Spectra Systems Corporation
$ 2,650 $ 2,948 $ 5,163
Earnings per share
Basic $ 0.06 $ 0.06 $ 0.11
Diluted $ 0.06 $ 0.06 $ 0.11
All of the Group's operations are continuing
Consolidated statements of comprehensive income
for the half year ended 30 June 2022
Half Year Half Year Full Year
to 30 Jun 2022 to 30 Jun 2021 to 31 Dec 2021
Unaudited Unaudited Audited
USD '000 USD '000 USD '000
Net income $ 2,628 $ 2,877 $ 5,065
Other comprehensive income (loss)
Unrealized gain (loss) on currency exchange
1 (6) 10
Reclassification for realized (gain) loss in net income
(3) 3 (12)
Total other comprehensive
loss (2) (3) (2)
Comprehensive income 2,626 2,874 5,063
Net loss attributable to noncontrolling interest
22 71 98
Comprehensive income attributable to Spectra Systems Corporation $ 2,648 $ 2,945 $ 5,161
Consolidated balance sheets
as of 30 June 2022
As of As of As of
30 Jun 2022 30 Jun 2021 31 Dec 2021
Unaudited Unaudited Audited
USD '000 USD '000 USD '000
Current assets
Cash and cash equivalents $ 17,961 $ 12,851 $ 16,775
Trade receivables, net of allowance 1,384 1,870 2,242
Unbilled and other receivables 527 478 630
Inventory 2,192 2,737 1,944
Prepaid expenses 1,272 327 299
Total current assets 23,336 18,263 21,889
Non-current assets
Property, plant and equipment, net 1,617 1,557 1,439
Operating lease right of use assets, net 828 1,045 972
Intangible assets, net 7,057 7,178 7,161
Restricted cash and investments 500 1,099 500
Deferred tax assets 530 1,400 1,080
Other assets 105 118 111
Total non-current assets 10,637 12,397 11,263
Total assets $ 33,973 $ 30,660 $ 33,152
Current liabilities
Accounts payable $ 664 $ 681 $ 490
Accrued expenses and other liabilities 465 446 512
Operating lease liabilities, short term 289 267 286
Taxes payable 49 28 262
Deferred revenue 1,898 2,066 2,184
Total current liabilities 3,365 3,488 3,734
Non-current liabilities
Operating lease liabilities, long term 595 827 739
Deferred revenue 4,968 650 758
Total non-current liabilities 5,563 1,477 1,497
Total liabilities 8,928 4,965 5,231
Stockholders' equity
Common stock 451 453 453
Additional paid in capital - common stock 53,336 53,795 53,833
Accumulated other comprehensive loss (138) (137) (137)
Accumulated deficit (29,224) (29,085) (26,870)
Total Spectra Systems Corporation stockholders' equity
24,425 25,026 27,279
Noncontrolling interest 620 669 642
Total stockholders' equity 25,045 25,695 27,921
Total liabilities and stockholders' equity $ 33,973 $ 30,660 $ 33,152
Consolidated statements of cash flows
for the half year ended 30 June 2022
Half Year Half Year Full Year
to 30 Jun 2022 to 30 Jun 2021 to 31 Dec 2021
Unaudited Unaudited Audited
USD '000 USD '000 USD '000
Cash flows from operating activities
Net income $ 2,628 $ 2,877 $ 5,065
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization 418 398 831
Stock based compensation expense 65 33 71
Lease amortization expense 142 137 274
Deferred taxes 550 - 320
Provision for excess and obsolete inventory - - 494
Loss on sale of equipment - 19 19
Changes in operating assets and liabilities
Accounts receivables 861 719 346
Unbilled and other receivables 102 (1) (153)
Inventory (248) 57 356
Prepaid expenses (974) (53) (25)
Accounts payable 175 146 (44)
Operating leases (140) (132) (265)
Accrued expenses and other liabilities (262) (230) 71
Deferred revenue 3,928 494 724
Net cash provided by operating activities 7,245 4,464 8,084
Cash flows from investing activities
Restricted cash and investments - - 599
Payment of patent and trademark costs (147) (223) (471)
Proceeds from sale of equipment - 36 36
Purchases of property, plant and equipment (338) (32) (76)
Net cash provided by (used in) investing activities (485) (219) 88
Cash flows from financing activities
Dividends paid (5,004) (4,302) (4,302)
Repurchase of shares (570) (1,170) (1,170)
Proceeds from exercise of stock options 6 37 38
Net cash used in financing activities (5,568) (5,435) (5,434)
Effect of exchange rate on cash and cash equivalents
(6) 3 (1)
Net increase(decrease) in cash and cash equivalents (1,186) (1,187) 2,737
Cash and cash equivalents, beginning of period
16,775 14,038 14,038
Cash and cash equivalents, end of period $ 17,961 $ 12,851 $ 16,775
Notes to financial information
1. Basis of preparation
This report was approved by the Directors on the 9(th) of September 2022.
This financial information has been prepared using the recognition and
measurement principles of US Generally Accepted Accounting Principles (GAAP).
The Group has not elected to apply IAS 34 Interim Financial Reporting.
The principal accounting policies used in preparing the interim results are
those the Company expects to apply in its financial statements for the year
ending 31 December 2022 and are unchanged from those disclosed in the
Company's Annual Report for the year ended 31 December 2021.
The results for the half year are unaudited. The financial information for the
year ended 31 December 2021 does not constitute the full statutory accounts
for that period. The Annual Report and financial statements for the year ended
31 December 2021 have been filed with the Registrar of Companies. The
Independent Auditors' Report on the financial statements for the year ended 31
December 2021 was unmodified and did not draw attention to any matters by way
of emphasis.
2. Earnings per share
The calculation of basic earnings per share is based on the net income divided
by the weighted average number of common shares outstanding. Diluted earnings
per share is calculated by considering the dilutive impact of common stock
equivalents under the treasury stock method as if they were converted into
common stock as of the beginning of the period or as of the date of grant, if
later. Excluded from the calculation of diluted earnings per common share for
the six months ended June 30, 2022 and the year ended December 31, 2021 were
159,845 and 125,425 shares related to stock options, respectively, because
their exercise prices would render them anti-dilutive. For the six months
ended June 30, 2021,118,740 were excluded from the calculation of diluted
earnings per common share. The following table shows the calculation of basic
and diluted earnings per common share.
Half Year Half Year Full Year
to 30 Jun 2022 to 30 Jun 2021 to 31 Dec 2021
Numerator:
Net income $ 2,650,000 $ 2,948,000 $ 5,162,830
Denominator:
Weighted average common shares 45,569,258 45,415,199 45,353,550
Effect of dilutive securities:
Stock Options 2,233,298 2,662,613 2,385,480
Diluted weighted average common shares
47,802,556 48,077,812 47,739,030
Earnings per common share:
Basic: $ 0.06 $ 0.06 $ 0.11
Diluted: $ 0.06 $ 0.06 $ 0.11
3. Investment in affiliates and other entities
During the course of business, the Company enters into various types of
investment arrangements. The Company determines whether such investments
involve variable interest entities (VIEs). If the entity is determined to be a
VIE, then management determines if the Company is the primary beneficiary of
the entity and whether or not consolidation of the VIE is required. The
primary beneficiary consolidating the VIE must normally have both (i) the
power to direct the activities of a VIE that most significantly affect the
VIE's economic performance and (ii) the obligation to absorb losses of the VIE
or the right to receive benefits from the VIE, in either case that could
potentially be significant to the VIE. When the Company is deemed to be the
primary beneficiary, the VIE is consolidated and the other party's equity
interest in the VIE is accounted for as a noncontrolling interest.
On December 10, 2020, the Company invested $702,000 in Solaris BioSciences
("Solaris") and increased its equity interest from 4.79% to 48.65% on an as
converted basis. A noncontrolling interest is attributable to the 51.35% of
Solaris not owned by the Company. Prior to the investment, the Chief Executive
Officer of Spectra owned 84.54% of Solaris which declined to 46.01% after the
transaction. As part of the transaction, the Company committed to provide
$100,000 of services at cost to Solaris, of which $93,558 were provided during
the six months ended June 30, 2021. In addition, the Company will provide
nominal accounting support to Solaris and allow Solaris use of optical table
space and facilities at Spectra. In accordance with Delaware law, the
transaction was (a) unanimously approved by all three of Spectra's
non-executive Directors and (b) specially approved by a majority-in-interest
of the disinterested stockholders of Solaris. In addition, going forward
Spectra's shares in Solaris will be voted as directed by Spectra's
non-executive Directors. The Chief Executive Officer of Solaris is also the
Chief Executive Officer of Spectra.
The Company has concluded that Solaris is a VIE and the Company is the primary
beneficiary. The Company has consolidated the accounts of Solaris as of
December 10, 2020. The aggregate carrying value of Solaris' assets and
liabilities after elimination of any intercompany transactions and balances in
the consolidated balance sheets were as follows:
As of As of As of
30 Jun 2022 30 Jun 2021 31 Dec 2021
Unaudited Unaudited Audited
USD '000 USD '000 USD '000
Assets
Cash $ 101 $ 218 $ 150
Property, plant and equipment, net 7 8 8
Intangible assets, net 56 8 40
Total Assets 164 234 197
Liabilities
Accounts payable - 10 21
Accrued expenses and other liabilities - 8 -
Total liabilities $ - $ 18 $ 21
4. Copies of this statement are available to the public on the Company's
website at http://www.spsy.com.
Appendix - Reconciliation of Non-GAAP measures
The Company publishes certain additional information in a non-statutory format
in order to provide readers with an increased insight into the underlying
performance of the business. Reconciliations to the GAAP measures are shown in
the following tables:
Half Year Half Year Full Year
to 30 Jun 2022 to 30 Jun 2021 to 31 Dec 2021
Unaudited Unaudited Unaudited
USD '000 USD '000 USD '000
Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA)
Operating profit $ 3,324 $ 3,027 $ 5,910
Depreciation 159 146 307
Amortization 257 252 524
Stock compensation 65 33 71
Operating loss - noncontrolling interest 22 71 101
Stock compensation - noncontrolling interest (10) (7) (17)
Adjusted EBITDA $ 3,817 $ 3,522 $ 6,896
Adjusted profit before taxes and
amortization (PBTA)
Profit before taxes $ 3,335 $ 3,034 $ 5,943
Amortization 257 252 524
Stock compensation 65 33 71
Operating loss - noncontrolling interest 22 71 101
Stock compensation - noncontrolling interest (10) (7) (17)
Adjusted PBTA $ 3,669 $ 3,383 $ 6,622
Adjusted earnings per share
Adjusted PBTA $ 3,669 $ 3,383 $ 6,622
Income tax expense (707) (157) (878)
Adjusted earnings $ 2,962 $ 3,226 $ 5,744
Diluted weighted average common shares 47,802,556 48,077,812 47,739,030
Adjusted earnings per share $ 0.062 $ 0.067 $ 0.120
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