SPSX » Topics » Financial Measures and Key Operating Metrics

This excerpt taken from the SPSX 8-K filed Feb 15, 2008.

Financial Measures and Key Operating Metrics

 

General

 

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP.  A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.  These non-GAAP operating and financial measures are described below.

 

Copper-Adjusted Revenues

 

Due to the impact of differing copper values on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant value of copper (“copper adjusted revenues”) to aid in analyzing period-to-period net sales.  Presentation of net sales herein for 2007 and 2006 are adjusted to a $3.00/lb COMEX value for our North American operations (or the equivalent SHME per kilogram value for our Chinese operations) and €5.290 per kilogram for our European operations.  In prior year presentations, copper adjusted revenues were previously reflected at $2.00/lb COMEX value.  “Copper adjusted increase” in revenues or net sales is calculated after adjusting net

 

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sales in both periods to a constant copper value.  Sales adjusted for a constant value of copper as used by us may not be comparable to similarly titled measures of other companies.

 

Core Business Revenues

 

Core Businesses consist of the Company’s Communications Cable business segment, its Magnet Wire and Distribution North America business segment, its Magnet Wire and Distribution Europe business segment, and its Magnet Wire Asia Pacific business segment.

 

EBITDA

 

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric which we use and which is used by other companies. “EBITDA” as used by the Company (defined as earnings before interest, taxes, depreciation, amortization, minority interest and certain other non-operating items) may not be comparable to a similarly titled measure of another company.

 

Adjusted EBITDA and Adjusted EPS

 

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per diluted share” (or “Adjusted EPS”).  Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax).  Adjusted EPS is defined as earnings per diluted share excluding the after-tax, after minority interest impact of special items.  These items may not be comparable to a similarly titled measure of another company.  Special items are detailed in the financial tables accompanying this release.

 

Net Debt

 

The Company uses the term “Net Debt,” which is a non-GAAP financial measure.  Net debt is defined as total debt outstanding less cash and cash equivalents.  Net debt as used by the Company may not be comparable to a similarly titled measure of another company.

 

Comparisons to GAAP

 

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS and Copper-Adjusted Revenues are useful adjuncts to net income (loss), earnings per share, revenues and other measurements under GAAP.  The Company believes these measures are useful in analyzing the underlying operating performance of the Company’s business without regard to financing methods, capital structure, cost basis of assets or other non-routine events which we do not expect to occur regularly in the future.  These measures are also used in our internal budgeting process, managing, comparing and reporting on operating performance internally and to evaluate performance for certain executive compensation programs.  The following non-GAAP financial measurements are reconciled to the most directly comparable GAAP financial measures — EBITDA to net income; Adjusted EBITDA to net income; Adjusted EPS (or Adjusted earnings per diluted share) to earnings per diluted share; and Copper-Adjusted Revenues to revenues.

 

EBITDA, Adjusted EBITDA and Adjusted EPS are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income or operating income as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income or operating income.  These measures do not reflect all costs and benefits associated with the operation of our business that impact net income or earnings per share calculated on a GAAP basis.  Management compensates for these limitations by reconciling the

 

7



 

non-GAAP financial measurements to the most directly comparable GAAP measure and by presenting the GAAP results in conjunction with these other measures.

 

Copper-adjusted revenues has distinct limitations as compared to GAAP revenues.  By copper-adjusting revenues, in a declining copper cost environment, it may not be apparent that net sales may be declining on an actual basis.  Management compensates for these limitations by reconciling the non-GAAP financial measurements to the most directly comparable GAAP measure and by presenting the GAAP results in conjunction with copper-adjusted revenues.

 

Core Business revenues has distinct limitations as compared to GAAP revenues.  By limiting net sales to “Core Businesses,” the revenues of the omitted segment, copper rod, may not be apparent. Management compensates for these limitations by reconciling the non-GAAP financial measurements to the most directly comparable GAAP measure and by presenting the GAAP results in conjunction with Core Business revenues.

 

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Superior Essex Inc.

This excerpt taken from the SPSX 8-K filed Jan 29, 2008.

Financial Measures and Key Operating Metrics

 

General

 

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.  These non-GAAP operating and financial measures are described below.

 

Copper-Adjusted Revenues

 

Due to the impact of differing copper values on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant value of copper (“copper adjusted revenues”) to aid in analyzing period-to-period net sales.  Presentation of net sales herein for 2007 and 2006 are adjusted to a $3.00/lb COMEX value (or the equivalent €/kg LME

 

2



 

or SHME value for our European and Chinese operations, respectively).  In prior year presentations, copper adjusted revenues were previously reflected at $2.00/lb COMEX value.  “Copper adjusted increase” in revenues or net sales is calculated after adjusting net sales in both periods to a constant copper value of $3.00/lb COMEX.  Sales adjusted for a constant value of copper as used by us may not be comparable to similarly titled measures of other companies.

 

Core Business Revenues

 

Core Businesses consist of the Company’s Communications Cable business segment, its Magnet Wire and Distribution North America business segment, its Magnet Wire and Distribution Europe business segment, and its Magnet Wire Asia Pacific business segment.

 

EBITDA

 

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric which we use and which is used by other companies. “EBITDA” as used by the Company (defined as earnings before interest, taxes, depreciation, amortization, minority interest and certain other non-operating items) may not be comparable to a similarly titled measure of another company.

 

Adjusted EBITDA and Adjusted EPS

 

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per diluted share” (or “Adjusted EPS”).   Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax).  Adjusted EPS is defined as earnings per diluted share excluding the after-tax, after minority interest impact of special items.  These items may not be comparable to a similarly titled measure of another company.  Special items are detailed in the financial tables accompanying this release.

 

Comparisons to GAAP

 

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS and Copper-Adjusted Revenues are useful adjuncts to net income (loss), earnings per share, revenues and other measurements under GAAP.  The Company believes these measures are useful in analyzing the underlying operating performance of the Company’s business.  Adjusted EBITDA and Adjusted EPS are used to evaluate performance for certain executive compensation items and provide a measure of the ongoing operations by removing items which are not directly relevant to the efficiency of operations.  The following non-GAAP financial measurements are reconciled to the most directly comparable GAAP financial measures – EBITDA to net income; Adjusted EBITDA to net income; Adjusted EPS (or Adjusted earnings per diluted share) to earnings per diluted share; and Copper-Adjusted Revenues to revenues.

 

EBITDA, Adjusted EBITDA and Adjusted EPS are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income or operating income as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income or operating income.  By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company.  Likewise, depreciation and amortization, while non-cash items, represent generally the utilization of assets that produce revenue for the Company.  By excluding certain special items, it may not be apparent that these costs represent a reduction

 

3



 

in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

 

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

Copper-adjusted revenues has distinct limitations as compared to GAAP revenues.  By copper-adjusting revenues, in a declining copper cost environment, it may not be apparent that net sales may be declining on an actual basis. Management compensates for these limitations by using the GAAP results in conjunction with copper-adjusted revenues.

 

Core Business revenues has distinct limitations as compared to GAAP revenues.  By limiting net sales to “Core Businesses,” the revenues of the omitted segment, copper rod, may not be apparent. Management compensates for these limitations by using the GAAP results in conjunction with Core Business revenues.

 

4


This excerpt taken from the SPSX 8-K filed Feb 2, 2007.

Financial Measures and Key Operating Metrics

General

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure

3




calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.  These non-GAAP operating and financial measures are described below.

Copper-Adjusted Revenues

Due to the impact of differing copper costs on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant cost of copper (“copper adjusted revenues”) to aid in analyzing period-to-period revenues.  These revenues are adjusted to a $2.00/lb COMEX cost.  “Copper adjusted increase” in revenues is calculated after adjusting revenues in both periods to a constant copper cost of $2.00/pound.

Core Business Revenues

Core Businesses consist of the Company’s Communications Cable business segment, its North American Magnet Wire and Distribution business segment, and its European Magnet Wire and Distribution business segment.

EBITDA

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric we use and which is used by other companies. “EBITDA” as used by the Company (defined as net earnings before interest, taxes, depreciation and amortization) may not be comparable to a similarly titled measure of another company.

Adjusted EBITDA and Adjusted EPS

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per share” (or “Adjusted EPS”).   Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax).  Adjusted EPS is defined as earnings per diluted share excluding the after-tax impact of special items.  These items may not be comparable to a similarly titled measure of another company.

Comparisons to GAAP

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS and copper-adjusted revenues are useful adjuncts to net income and other measurements under GAAP.  The Company believes these measures are useful in analyzing the underlying operating performance of the Company.  Adjusted EBITDA and Adjusted EPS are also sometimes used to evaluate performance for executive compensation.  We have included a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to net income, the most directly comparable GAAP financial measure.

EBITDA, Adjusted EBITDA and Adjusted EPS are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income, income from continuing operations, operating income or debt as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income, income from continuing operations or operating income.  By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company.  Likewise, depreciation and amortization, while non-cash items,

4




represent generally the utilization of assets that produce revenue for the Company.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

5



This excerpt taken from the SPSX 8-K filed Oct 31, 2006.

Financial Measures and Key Operating Metrics

General

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.  These non-GAAP operating and financial measures are described below.

Copper-Adjusted Revenues

Due to the impact of differing copper costs on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant cost of copper (“copper adjusted revenues”) to aid in analyzing period-to-period revenues.  These revenues are adjusted to a $2.00/lb COMEX cost.  “Copper adjusted increase” in revenues is calculated after adjusting revenues in both periods to a constant copper cost of $2.00/pound.

Core Business Revenues

Core Businesses consist of the Company’s Communications Cable business segment, its North American Magnet Wire and Distribution business segment, and its European Magnet Wire and Distribution business segment.

6




EBITDA

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric we use and which is used by other companies. “EBITDA” as used by the Company (defined as net earnings before interest, taxes, depreciation and amortization) may not be comparable to a similarly titled measure of another company.

Adjusted EBITDA and Adjusted EPS

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per share” (or “Adjusted EPS”).   Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax).  Adjusted EPS is defined as earnings per diluted share excluding the after-tax impact of special items.  These items may not be comparable to a similarly titled measure of another company.  Special items are detailed in the financial tables accompanying this release.

Net Debt

The Company uses the term “Net Debt,” which is non-GAAP financial measure.  Net debt is defined as total debt outstanding less cash and cash equivalents.  Net debt as used by the Company may not be comparable to a similarly titled measure of another company.

Comparisons to GAAP

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS, copper-adjusted revenues and net debt are useful adjuncts to net income and other measurements under GAAP.  The Company believes these measures are useful in analyzing the underlying operating performance of the Company.  Adjusted EBITDA and Adjusted EPS are also sometimes used to evaluate performance for executive compensation.  We have included a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to net income, the most directly comparable GAAP financial measure.

EBITDA, Adjusted EBITDA, Adjusted EPS and net debt are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income, income from continuing operations, operating income or debt as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income, income from continuing operations or operating income.  By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company.  Likewise, depreciation and amortization, while non-cash items, represent generally the utilization of assets that produce revenue for the Company.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

7




Superior Essex Inc.

This excerpt taken from the SPSX 8-K filed Jul 28, 2006.

Financial Measures and Key Operating Metrics

 

General

 

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented.  These non-GAAP operating and financial measures are described below.

 

Copper-Adjusted Revenues

 

Due to the impact of differing copper costs on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant cost of copper (“copper adjusted revenues”) to aid in analyzing period-to-period revenues.  These revenues are adjusted to a $2.00/lb COMEX cost.  “Copper adjusted increase” in revenues is calculated after adjusting revenues in both periods to a constant copper cost of $2.00/pound.

 

Core Business Revenues

 

Core Businesses consist of the Company’s Communications Cable business segment, its North American Magnet Wire and Distribution business segment, and its European Magnet Wire and Distribution business segment.

 

EBITDA

 

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric we use and which is used by other companies. “EBITDA” as used by the Company (defined as net earnings before interest, taxes, depreciation and amortization) may not be comparable to a similarly titled measure of another company.

 

Adjusted EBITDA and Adjusted EPS

 

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per share” (or “Adjusted EPS”).   Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax).  Adjusted EPS is defined as earnings per diluted share excluding the after-tax impact of special items.  Special items are detailed in the financial tables accompanying this release.

 

Net Debt

 

The Company uses the term “Net Debt,” which is non-GAAP financial measure.  Net debt is defined as total debt outstanding less cash and cash equivalents.  Net debt as used by the Company may not be comparable to a similarly titled measure of another company.

7




 

Comparisons to GAAP

 

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS, copper-adjusted revenues and net debt are useful adjuncts to net income and other measurements under GAAP.  The Company believes these measures are useful in analyzing the underlying operating performance of the Company.  Adjusted EBITDA and Adjusted EPS are also sometimes used to evaluate performance for executive compensation.  We have included a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to net income, the most directly comparable GAAP financial measure.

 

EBITDA, Adjusted EBITDA, Adjusted EPS and net debt are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income, income from continuing operations, operating income or debt as determined in accordance with GAAP.  EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income, income from continuing operations or operating income.  By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company.  Likewise, depreciation and amortization, while non-cash items, represent generally the utilization of assets that produce revenue for the Company.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

 

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share.  By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company.  Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

8




This excerpt taken from the SPSX 8-K filed May 5, 2006.

Financial Measures and Key Operating Metrics

 

General

 

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented. These non-GAAP operating and financial measures are described below.

 

Copper-Adjusted Revenues

 

Due to the impact of differing copper costs on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant cost of copper (“copper adjusted revenues”) to aid in analyzing period-to-period revenues. These revenues are adjusted to a $2.00/lb COMEX cost. “Copper adjusted increase” in revenues is calculated after adjusting revenues in both periods to a constant copper cost of $2.00/pound.

 

Core Business Revenues

 

Core Businesses consist of the Company’s Communications Cable, its North American Magnet Wire and Distribution segments, and its European Magnet Wire operations.

 

EBITDA

 

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric we use and which is used by other companies. “EBITDA” as used by the Company (defined as net earnings before interest, taxes, depreciation and amortization) may not be comparable to a similarly titled measure of another company.

 

Adjusted EBITDA and Adjusted EPS

 

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per share” (or “Adjusted EPS”). Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax). Adjusted EPS is defined as earnings per diluted share excluding the after-tax impact of special items. Special items are detailed in the financial tables accompanying this release.

 

Comparisons to GAAP

 

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS and copper-adjusted revenues are useful adjuncts to net income and other measurements under GAAP. The Company believes these measures are useful in analyzing the underlying operating performance of the Company. Adjusted EBITDA and Adjusted EPS are also sometimes used to evaluate performance for executive compensation. We have included a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to net income, the most directly comparable GAAP financial measure.

 

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EBITDA, Adjusted EBITDA and Adjusted EPS are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income, income from continuing operations or operating income as determined in accordance with GAAP. EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income, income from continuing operations or operating income. By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company. Likewise, depreciation and amortization, while non-cash items, represent generally the utilization of assets that produce revenue for the Company. By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company. Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

 

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share. By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company. Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

8



 

This excerpt taken from the SPSX 8-K filed Feb 28, 2006.

Financial Measures and Key Operating Metrics

 

General

 

We use certain operating and financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America, or GAAP. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance, financial position or cash flows that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable measure so calculated and presented. These non-GAAP operating and financial measures are described below.

 

Copper-Adjusted Revenues

 

Due to the impact of differing copper costs on revenues in the reported periods, the Company is providing supplemental, non-GAAP sales comparisons at a constant cost of copper (“copper adjusted revenues”) to aid in analyzing period-to-period revenues. These revenues are adjusted to a $2.00/lb COMEX cost. “Copper adjusted increase” in revenues is calculated after adjusting revenues in both periods to a constant copper cost of $2.00/pound.

 

Core Business Revenues

 

Core Businesses consist of the Company’s Communications Cable, its North American Magnet Wire and Distribution segments, and its European Magnet Wire operations.

 

7



 

EBITDA

 

Earnings before interest, taxes, depreciation and amortization, or “EBITDA”, is a performance metric we use and which is used by other companies. “EBITDA” as used by the Company (defined as net earnings before interest, taxes, depreciation and amortization) may not be comparable to a similarly titled measure of another company.

 

Adjusted EBITDA and Adjusted EPS

 

The Company uses the terms “Adjusted EBITDA” and “Adjusted earnings per share” (or “Adjusted EPS”). Adjusted EBITDA is defined as EBITDA excluding the impact of special items (before tax). Adjusted EPS is defined as earnings per diluted share excluding the after-tax impact of special items. Special items are detailed in the financial tables accompanying this release.

 

Comparisons to GAAP

 

Management believes that EBITDA, Adjusted EBITDA, Adjusted EPS and copper-adjusted revenues are useful adjuncts to net income and other measurements under GAAP. The Company believes these measures are useful in analyzing the underlying operating performance of the Company. Adjusted EBITDA and Adjusted EPS are also sometimes used to evaluate performance for executive compensation. We have included a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to net income, the most directly comparable GAAP financial measure.

 

EBITDA, Adjusted EBITDA and Adjusted EPS are supplements to GAAP financial information and should not be considered an alternative to, or more meaningful than, net income, income from continuing operations or operating income as determined in accordance with GAAP. EBITDA and Adjusted EBITDA have distinct limitations as compared to GAAP information such as net income, income from continuing operations or operating income. By excluding interest and income taxes for example, it may not be apparent that both represent a reduction in cash available to the Company. Likewise, depreciation and amortization, while non-cash items, represent generally the utilization of assets that produce revenue for the Company. By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company. Management compensates for these limitations by using the GAAP results in conjunction with these other measures.

 

Adjusted EPS has distinct limitations as compared to GAAP information such as net income or earnings per share. By excluding certain special items, it may not be apparent that these costs represent a reduction in cash available to the Company. Management compensates for these limitations by using the GAAP results in conjunction with adjusted EPS.

 

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Superior Essex Inc.

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