Covetrus Announces Financial Results for Fourth Quarter and Full-Year of 2021
-
Fourth quarter 2021 net sales of $1.12 billion, unchanged year-over-year; GAAP net loss attributable to Covetrus of $(3) million
- Non-GAAP organic net sales growth of 2% year-over-year
- Non-GAAP adjusted EBITDA increased 13% year-over-year to $63 million
-
Full-year 2021 net sales of $4.58 billion, an increase of 5% year-over-year; GAAP net loss attributable to Covetrus of $(54) million
- Non-GAAP organic net sales growth of 5% year-over-year
- Non-GAAP adjusted EBITDA increased 8% year-over-year to $244 million
- 2022 non-GAAP organic net sales growth guidance of 7% to 8% and non-GAAP adjusted EBITDA guidance in the range of $270 million to $280 million
PORTLAND, Maine–(BUSINESS WIRE)–$CVET #earnings–Covetrus® (Nasdaq: CVET), a global leader in animal-health technology and services, today announced financial results for the fourth quarter and full-year of 2021, which ended December 31, 2021.
“2021 marked another year of continued progress for Covetrus where we accelerated our pace of innovation, delivered enhanced value to our veterinary practice customers and channel partners, and secured new business as we continued to drive adoption of our technology platform,” said Ben Wolin, Covetrus president and CEO. “We enter 2022 with momentum and visibility alongside an impressive slate of upcoming product launches, including Covetrus Pulse, that we believe will not only drive better outcomes for our customers but also help accelerate our growth, expand our margins, and further solidify our global technology leadership position in the attractive animal health market.”
Summary Operating Results (Unaudited)
|
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
(In millions, except per share data) |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
||||||||
|
Net sales |
|
$ |
1,122 |
|
|
$ |
1,121 |
|
|
$ |
4,575 |
|
|
$ |
4,339 |
|
|
Income (loss) before taxes |
|
$ |
(10 |
) |
|
$ |
(16 |
) |
|
$ |
(54 |
) |
|
$ |
(24 |
) |
|
Net income (loss) attributable to Covetrus |
|
$ |
(3 |
) |
|
$ |
(4 |
) |
|
$ |
(54 |
) |
|
$ |
(19 |
) |
|
Diluted earnings (loss) per share (EPS) |
|
$ |
(0.02 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP Measures: (a) |
|
|
|
|
|
|
|
|
||||||||
|
Organic net sales growth |
|
|
2 |
% |
|
|
|
|
5 |
% |
|
|
||||
|
Non-GAAP Adjusted EBITDA |
|
$ |
63 |
|
|
$ |
56 |
|
|
$ |
244 |
|
|
$ |
226 |
|
|
Non-GAAP Adjusted net income attributable to Covetrus |
|
$ |
36 |
|
|
$ |
28 |
|
|
$ |
132 |
|
|
$ |
108 |
|
|
(a) Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for non-GAAP financial items to the most directly comparable GAAP financial items are provided under Reconciliation of Non-GAAP Financial Measures at the end of this release. |
||||||||||||||||
Fourth Quarter 2021 Results
Net sales for the fourth quarter of 2021 were $1.12 billion, unchanged compared to the fourth quarter of 2020. Non-GAAP organic net sales growth, which adjusts for changes in foreign exchange and the impact of mergers, acquisitions and divestiture activity, was 2% year-over-year, reflecting healthy companion animal end-market demand across many of the Company’s markets and continued strong growth in prescription management in North America. These positive trends were partially offset by the previously disclosed challenges in the Company’s U.K. and German businesses in Europe, which negatively impacted non-GAAP organic net sales growth by approximately 600 basis points year-over-year.
Net loss attributable to Covetrus in the fourth quarter of 2021 was $(3) million, or a loss of $(0.02) per diluted share, which compared to net loss attributable to Covetrus in the fourth quarter of 2020 of $(4) million, or $(0.04) per diluted share.
Non-GAAP adjusted EBITDA was $63 million for the fourth quarter of 2021 versus $56 million in the prior year period. The 13% year-over-year increase reflects strong performance in North America and APAC & Emerging Markets, partially offset by a decrease in Europe as a result of the challenges in the Company’s U.K. and German businesses. Non-GAAP adjusted EBITDA margin was 5.6% for the fourth quarter of 2021, an increase of 60 basis points year-over-year.
Non-GAAP adjusted net income attributable to Covetrus was $36 million for the fourth quarter of 2021, which compared to $28 million in the prior year period, driven by the same factors impacting non-GAAP adjusted EBITDA discussed above and a decrease in interest expense year-over-year.
Full-Year 2021 Results
Net sales for the year ended December 31, 2021 were $4.58 billion, an increase of 5% compared to the prior year period. Non-GAAP organic net sales growth was 5% year-over-year, reflecting healthy companion animal end-market demand across many of the Company’s markets and continued growth in prescription management in North America. These positive trends were partially offset by a decline in sales in Europe, driven by the previously disclosed challenges in the Company’s U.K. and German businesses, which more than offset healthy performance across many of our other European markets.
Net loss attributable to Covetrus for the year ended December 31, 2021 was $(54) million, or a loss of $(0.39) per diluted share, which compared to Net loss attributable to Covetrus of $(19) million, or $(0.22) per diluted share in the prior year period. The primary drivers of the year-over-year decrease were the gain on the sale of the scil animal care business in the prior year period and higher selling, general and administrative expenses, which offset an increase in gross profit versus the prior year period and the benefit from lower interest expense year-over-year.
Non-GAAP adjusted EBITDA was $244 million for the year ended December 31, 2021 versus $226 million in the prior year. The 8% year-over-year increase reflected strong growth in North America and APAC & Emerging Markets, which were partially offset by the impact from increased costs in various corporate functions and the impact of foreign exchange rates on certain intercompany loans. Non-GAAP adjusted EBITDA margin was 5.3% for the year ended December 31, 2021, an increase of 10 basis points year-over-year.
Non-GAAP adjusted net income was $132 million for the year ended 2021, which compared to $108 million in the prior year period, driven by the same factors impacting non-GAAP adjusted EBITDA as well as a decrease in interest expense versus the prior year period.
Fourth Quarter 2021 Segment Financial Highlights
The Company’s operations are organized and reported by geography — North America, Europe, and APAC & Emerging Markets.
North America
North America segment net sales for the fourth quarter ended December 31, 2021 of $674 million increased 11% compared to the same period of the prior year. Non-GAAP organic net sales growth was 11% year-over-year, including supply chain growth of 9% and prescription management growth of 22%.
North America segment adjusted EBITDA for the fourth quarter ended December 31, 2021 of $57 million increased 27% compared to the same period of the prior year, reflecting strong growth in prescription management profitability, increased penetration of the Company’s proprietary products, and disciplined expense management. North America segment adjusted EBITDA margin was 8.5% for the fourth quarter of 2021, an increase of 110 basis points year-over-year, driven by a positive mix shift towards the Company’s higher margin businesses, including prescription management.
Europe
Europe segment net sales for the fourth quarter ended December 31, 2021 of $332 million decreased 18% compared to the same period of the prior year. On a non-GAAP organic basis, net sales decreased 13% compared to the same period of the prior year, reflecting the impact from the previously disclosed year-over-year challenges in the Company’s U.K. business. Growth in the Company’s businesses in Switzerland, Ireland, Poland, and Romania partially offset the sales challenges in the U.K.
Europe segment adjusted EBITDA for the fourth quarter ended December 31, 2021 was $14 million, a decrease of 22% compared to the same period of the prior year. This includes a combined $4 million decline in profitability in the Company’s U.K. and German businesses. Europe segment adjusted EBITDA margin was 4.2% for the fourth quarter of 2021, a decrease of 30 basis points year-over-year.
APAC & Emerging Markets
APAC & Emerging Markets segment net sales for the fourth quarter ended December 31, 2021 of $119 million increased 4% compared to the same period of the prior year. Non-GAAP organic net sales growth was 5% compared to the same period of the prior year. High-single digit growth in Australia was the primary contributor to year-over-year APAC & Emerging Markets growth during the fourth quarter.
APAC & Emerging Markets segment adjusted EBITDA for the fourth quarter ended December 31, 2021 of $11 million increased 22% compared to the same period of the prior year, driven by the positive operating leverage from healthy net sales growth. APAC & Emerging Markets segment adjusted EBITDA margin was 9.2% for the fourth quarter of 2021, an increase of 130 basis points year-over-year.
Financial Position and Liquidity
Covetrus generated $102 million of net cash from operating activities during the year ended December 31, 2021 as compared to $53 million generated during the prior year period. Free cash flow, a non-GAAP financial measure that is defined as cash flow from operating activities less purchases of property and equipment, was $42 million during the year ended December 31, 2021 as compared to $(5) million in the prior year period. The $47 million year-over-year increase in non-GAAP free cash flow primarily reflects an improvement in operating earnings and lower cash interest payments.
As of December 31, 2021, the Company had $183 million in cash and cash equivalents, $1.05 billion in term loan debt, and no borrowings outstanding on its $300 million revolving credit facility. During December 2021, the Company pre-paid $30 million of its required 2022 principal amortization payments, with the next $15 million due on September 30, 2022. The Company ended the year with $481 million in liquidity, comprised of cash and cash equivalents and availability under the Company’s revolving credit facility, and was in compliance with the covenants in its credit agreement as of December 31, 2021.
2022 Financial Guidance
Covetrus’ full-year 2022 financial guidance is as follows:
- Organic net sales growth, a non-GAAP financial metric, of 7% to 8%.
- Adjusted EBITDA, a non-GAAP financial metric, of $270 million to $280 million.
The Company has not reconciled its non-GAAP organic net sales growth guidance because the extent to which certain items would be expected to impact GAAP measures but would not impact non-GAAP measures cannot be predicted with a reasonable degree of certainty, including the effect of acquisitions, divestitures, and the foreign exchange fluctuations, and accordingly the reconciliation is not available without unreasonable efforts. The Company has also not reconciled its non-GAAP adjusted EBITDA guidance to GAAP net income because the reconciling items between such GAAP and non-GAAP financial measures, including share-based compensation expense, separation program costs, foreign exchange and other special items, cannot be reasonably predicted due to the uncertainty and inherent difficulty in predicting the occurrence, the financial impact, and the periods in which the non-GAAP adjustments may be recognized. Accordingly, such reconciliation is not available without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this release, please see the section titled Reconciliation of Non-GAAP Financial Measures for the reconciliations of GAAP financial measures to non-GAAP financial measures.
Conference Call
The Company will host a conference call to discuss these results and recent business trends at 4:30 p.m. ET on February 24, 2022. Participating in the conference call will be:
- Benjamin Wolin, president and chief executive officer
- Matthew Foulston, executive vice president and chief financial officer
To access the live webcast and the accompanying slide presentation, individuals can visit the Investor Relations page of the Covetrus website: https://ir.covetrus.com/investors/events-and-presentations. An archived edition of the earnings conference call will also be posted on the Covetrus website later that day and will remain available to interested parties via the same link for one year.
The conference call can also be accessed by dialing 866-789-2492 for U.S./Canada participants, or 409-937-8901 for international participants, and referencing confirmation code 6047795. A replay of the conference call will be available for two weeks through March 10, 2022 by dialing 855-859-2056 or 404-537-3406. The replay confirmation code is 6047795.
About Covetrus
Covetrus is a global animal-health technology and services company dedicated to empowering veterinary practice partners to drive improved health and financial outcomes. We are bringing together products, services, and technology into a single platform that connects our customers to the solutions and insights they need to work best. Our passion for the well-being of animals and those who care for them drives us to advance the world of veterinary medicine. Covetrus is headquartered in Portland, Maine with more than 5,700 employees serving over 100,000 customers around the globe. For more information about Covetrus visit https://covetrus.com/.
Forward-Looking Statements
This press release contains certain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We may, in some cases use terms such as “predicts,” “believes,” “potential,” “continue,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “likely,” “will,” “should,” or other words that convey uncertainty of the future events or outcomes to identify these forward-looking statements. Such statements are subject to numerous risks and uncertainties, and actual results could differ materially from those anticipated due to a number of factors including, but not limited to, the effect of health epidemics, including the COVID-19 pandemic, on our business, results of operation, financial condition and potentially our control procedures, and the success of any measures we have taken or may take in the future in response thereto, including vaccine mandates which may be required in certain jurisdictions where we operate and increased turnover rates and absenteeism of our labor force resulting from those mandates which may impact our ability to continue operations at our distribution centers and pharmacies; the ability to successfully integrate acquisitions, operations and employees; the ability to continue to execute on our strategic plan; the ability to attract and retain key personnel; the ability to achieve performance targets, including managing our growth effectively; the ability to manage relationships with our supplier and distributor network, including negotiating acceptable pricing and other terms with these partners; the ability to attract and retain customers in a price sensitive environment; the ability to maintain quality standards in our technology product offerings as well as associated customer service interactions to minimize loss of existing Customers and attract new Customers; access to financial markets along with changes in interest rates and foreign currency exchange rates; changes in the legislative landscape in which we operate, including potential corporate tax reform, and our ability to adapt to those changes as well as adaptation by the third-parties we are dependent upon for supply and distribution; the impact of litigation; the impact of accounting pronouncements, seasonality of our business, leases, expenses, interest expense, and debt; sufficiency of cash and access to liquidity; cybersecurity risks, including risk associated with our dependence on third party service providers as a large portion of our workforce is working from home; and those additional risks discussed under the heading “Risk Factors” in our Annual Report on Form 10-K filed on March 1, 2021, and in our subsequent Quarterly Reports on Form 10-Q, including for the quarter ended March 31, 2021, June 30, 2021, and September 30, 2021, each of which is on file with the SEC. Our forward-looking statements are based on current beliefs and expectations of our management team and, except as required by law, we undertake no obligations to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release, whether as a result of new information, future developments or otherwise. Investors are cautioned not to place undue reliance on these forward-looking statements.
COVETRUS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)
|
|
December 31, 2021 |
|
December 31, 2020 |
||||
|
|
(Unaudited) |
|
|
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
183 |
|
|
$ |
290 |
|
|
Accounts receivable, net of allowance of $4 and $5 |
|
480 |
|
|
|
507 |
|
|
Inventories, net |
|
583 |
|
|
|
530 |
|
|
Other receivables |
|
75 |
|
|
|
67 |
|
|
Prepaid expenses and other |
|
30 |
|
|
|
26 |
|
|
Total current assets |
|
1,351 |
|
|
|
1,420 |
|
|
Non-current assets: |
|
|
|
||||
|
Property and equipment, net of accumulated depreciation of $135 and $106 |
|
144 |
|
|
|
116 |
|
|
Operating lease right-of-use assets, net |
|
137 |
|
|
|
117 |
|
|
Goodwill |
|
1,247 |
|
|
|
1,187 |
|
|
Other intangibles, net of accumulated amortization of $451 and $470 |
|
439 |
|
|
|
555 |
|
|
Investments |
|
49 |
|
|
|
52 |
|
|
Other non-current assets |
|
43 |
|
|
|
49 |
|
|
Total assets |
$ |
3,410 |
|
|
$ |
3,496 |
|
|
LIABILITIES, MEZZANINE EQUITY, AND SHAREHOLDERS’ EQUITY |
|
|
|||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
442 |
|
|
$ |
411 |
|
|
Current maturities of long-term debt and other borrowings |
|
32 |
|
|
|
1 |
|
|
Accrued payroll and related liabilities |
|
63 |
|
|
|
67 |
|
|
Accrued taxes |
|
24 |
|
|
|
37 |
|
|
Accrued expenses and other current liabilities |
|
137 |
|
|
|
175 |
|
|
Total current liabilities |
|
698 |
|
|
|
691 |
|
|
Non-current liabilities: |
|
|
|
||||
|
Long-term debt and other borrowings, net |
|
1,014 |
|
|
|
1,068 |
|
|
Deferred income taxes |
|
13 |
|
|
|
28 |
|
|
Other liabilities |
|
151 |
|
|
|
136 |
|
|
Total liabilities |
|
1,876 |
|
|
|
1,923 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Mezzanine equity: |
|
|
|
||||
|
Redeemable non-controlling interests |
|
23 |
|
|
|
36 |
|
|
Shareholders’ equity: |
|
|
|
||||
|
Common stock |
|
1 |
|
|
|
1 |
|
|
Accumulated other comprehensive loss |
|
(79 |
) |
|
|
(66 |
) |
|
Additional paid-in capital |
|
2,670 |
|
|
|
2,629 |
|
|
Accumulated deficit |
|
(1,081 |
) |
|
|
(1,027 |
) |
|
Total shareholders’ equity |
|
1,511 |
|
|
|
1,537 |
|
|
Total liabilities, mezzanine equity, and shareholders’ equity |
$ |
3,410 |
|
|
$ |
3,496 |
|
|
Common shares authorized, par value of $0.01 |
$ |
675,000,000 |
|
|
$ |
675,000,000 |
|
|
Common shares issued and outstanding |
$ |
138,011,969 |
|
|
$ |
136,017,964 |
|
COVETRUS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data) (Unaudited)
|
|
Three Months Ended |
|
Years Ended |
||||||||||||
|
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
||||||||
|
|
(Unaudited) |
|
|
|
|
||||||||||
|
Net sales |
$ |
1,122 |
|
|
$ |
1,121 |
|
|
$ |
4,575 |
|
|
$ |
4,339 |
|
|
Cost of sales |
|
910 |
|
|
|
915 |
|
|
|
3,717 |
|
|
|
3,541 |
|
|
Gross profit |
|
212 |
|
|
|
206 |
|
|
|
858 |
|
|
|
798 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Selling, general and administrative |
|
219 |
|
|
|
225 |
|
|
|
881 |
|
|
|
867 |
|
|
Operating income (loss) |
|
(7 |
) |
|
|
(19 |
) |
|
|
(23 |
) |
|
|
(69 |
) |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
|
Interest expense, net |
|
(6 |
) |
|
|
(10 |
) |
|
|
(32 |
) |
|
|
(46 |
) |
|
Other, net |
|
3 |
|
|
|
13 |
|
|
|
1 |
|
|
|
91 |
|
|
Income (loss) before taxes |
|
(10 |
) |
|
|
(16 |
) |
|
|
(54 |
) |
|
|
(24 |
) |
|
Income tax benefit (expense) |
|
7 |
|
|
|
14 |
|
|
|
— |
|
|
|
7 |
|
|
Equity in net earnings of affiliates |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
Net income (loss) |
$ |
(3 |
) |
|
$ |
(3 |
) |
|
$ |
(54 |
) |
|
$ |
(17 |
) |
|
Net (income) loss attributable to redeemable non-controlling interests |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
Net income (loss) attributable to Covetrus |
$ |
(3 |
) |
|
$ |
(4 |
) |
|
$ |
(54 |
) |
|
$ |
(19 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings (loss) per share attributable to Covetrus: |
|||||||||||||||
|
Basic |
$ |
(0.02 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.22 |
) |
|
Diluted |
$ |
(0.02 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.22 |
) |
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
138 |
|
|
|
131 |
|
|
|
137 |
|
|
|
118 |
|
|
Diluted |
|
138 |
|
|
|
131 |
|
|
|
137 |
|
|
|
118 |
|
COVETRUS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
|
|
Years Ended |
||||||
|
|
December 31, 2021 |
|
December 31, 2020 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income (loss) |
$ |
(54 |
) |
|
$ |
(17 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: |
|||||||
|
Depreciation and amortization |
|
171 |
|
|
|
167 |
|
|
Amortization of right-of-use assets |
|
29 |
|
|
|
24 |
|
|
Gain on divestiture of a business |
|
— |
|
|
|
(73 |
) |
|
Share-based compensation expense |
|
46 |
|
|
|
40 |
|
|
Benefit for deferred income taxes |
|
(22 |
) |
|
|
(32 |
) |
|
Amortization of debt issuance costs |
|
6 |
|
|
|
6 |
|
|
Other |
|
18 |
|
|
|
4 |
|
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
|
Accounts receivable, net |
|
15 |
|
|
|
(68 |
) |
|
Inventories, net |
|
(65 |
) |
|
|
106 |
|
|
Other assets and liabilities |
|
(59 |
) |
|
|
(15 |
) |
|
Accounts payable and accrued expenses |
|
17 |
|
|
|
(89 |
) |
|
Net cash provided by (used for) operating activities |
|
102 |
|
|
|
53 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Investments in property, equipment, and software |
|
(60 |
) |
|
|
(58 |
) |
|
Payments related to equity investments and business acquisitions, net of cash acquired |
|
(81 |
) |
|
|
(54 |
) |
|
Proceeds from divestiture of a business, net |
|
— |
|
|
|
103 |
|
|
Proceeds from sale of property and equipment |
|
1 |
|
|
|
4 |
|
|
Net cash provided by (used for) investing activities |
|
(140 |
) |
|
|
(5 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from revolving line of credit |
|
— |
|
|
|
190 |
|
|
Repayment of revolving line of credit |
|
— |
|
|
|
(190 |
) |
|
Principal payments of debt |
|
(30 |
) |
|
|
(122 |
) |
|
Debt issuance and amendment costs |
|
— |
|
|
|
(5 |
) |
|
Proceeds from share-based awards |
|
8 |
|
|
|
12 |
|
|
Tax payments related to share-based awards |
|
(15 |
) |
|
|
(2 |
) |
|
Proceeds from issuance of Series A preferred stock |
|
— |
|
|
|
250 |
|
|
Series A preferred stock issuance costs |
|
— |
|
|
|
(6 |
) |
|
Series A preferred stock dividend |
|
— |
|
|
|
(6 |
) |
|
Distributions to non-controlling shareholders |
|
(2 |
) |
|
|
— |
|
|
Deferred payments related to equity investments and business acquisitions |
|
(13 |
) |
|
|
(17 |
) |
|
Payments related to the buy-out of non-controlling interests in subsidiaries of Covetrus |
|
(14 |
) |
|
|
— |
|
|
Net cash provided by (used for) financing activities |
|
(66 |
) |
|
|
104 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(3 |
) |
|
|
8 |
|
|
Net change in cash and cash equivalents |
|
(107 |
) |
|
|
160 |
|
|
Cash and cash equivalents, beginning of period |
|
290 |
|
|
|
130 |
|
|
Cash and cash equivalents, end of period |
$ |
183 |
|
|
$ |
290 |
|
|
COVETRUS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) (Continued) |
|||||||
|
|
Years Ended |
||||||
|
|
December 31, 2021 |
|
December 31, 2020 |
||||
|
Supplemental disclosure of cash payments: |
|
|
|
||||
|
Interest |
$ |
22 |
|
$ |
40 |
||
|
Income taxes |
$ |
27 |
|
|
$ |
24 |
|
|
Amounts included in the measurement of operating lease liabilities |
$ |
27 |
|
|
$ |
27 |
|
|
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
||||
|
Conversion of Series A preferred stock |
$ |
— |
|
|
$ |
245 |
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
$ |
51 |
|
|
$ |
56 |
|
|
Right-of-use assets obtained in exchange for new financing lease liabilities |
$ |
2 |
|
|
$ |
— |
|
|
Deconsolidation of a subsidiary |
$ |
— |
|
|
$ |
15 |
|
|
Common stock issued in business acquisition |
$ |
4 |
|
|
$ |
— |
|
Segment Adjusted EBITDA
The Company provides adjusted EBITDA by segment as a supplemental measure to GAAP. Adjusted EBITDA by segment is among the primary metrics by which management evaluates the performance of the business. Adjusted EBITDA by segment has certain limitations in that it does not take into account the impact of certain expenses to our consolidated statements of operations, including the impact of share-based compensation, strategic consulting, transaction costs, formation of Covetrus expenses, separation programs and executive severance, carve-out operating expenses, certain IT infrastructure expenses necessary to establish ourselves as a newly public company, goodwill impairment charges, capital structure-related fees, equity method investment and non-consolidated affiliates, operating lease right-of-use asset impairments, the proportionate share of the adjustments to EBITDA of consolidated and non-consolidated affiliates where Covetrus ownership is less than 100%, managed exits from businesses we are exiting or closing, and other items, net.
Contacts
Investors:
Nicholas Jansen
nicholas.jansen@covetrus.com
(207) 550-8106
Media:
Mona Downey
mona.downey@covetrus.com
