Advantage Solutions(US:ADV)2024-11-12 12:56Financial Performance - Revenues for the three months ended September 30, 2024 decreased by $80.4 million, or 7.9%, to $939.3 million compared to the same period in 2023[118]. - Operating income from continuing operations for the three months ended September 30, 2024 resulted in an operating loss of $3.2 million, a decrease of $9.9 million[118]. - Net loss from continuing operations increased by $7.7 million to $37.3 million for the three months ended September 30, 2024[118]. - Revenues for the nine months ended September 30, 2024 decreased by $234.2 million, or 8.1%, to $2,674.0 million compared to the same period in 2023[119]. - Adjusted Net Income for the nine months ended September 30, 2024 increased by $9.1 million, or 14.2%, to $54.9 million[119]. - Adjusted Net Income decreased by $3.9 million, or 1.5%, to $261.5 million for the nine months ended September 30, 2024, from $265.4 million in the prior year[194]. - Adjusted Net Income for September 2024 was $23,667,000, a decrease from $24,775,000 in September 2023, representing a decline of 4.5%[197]. - The company reported a net loss of $37,320,000 for the three months ended September 2024, compared to a net loss of $29,632,000 for the same period in 2023, indicating a worsening of 25.5%[203]. Segment Performance - The Branded Services segment generated approximately 36.8% of revenues in the nine months ended September 30, 2024, down from 45.6% in the same period of 2023[114]. - The Experiential Services segment generated approximately 36.3% of revenues in the nine months ended September 30, 2024, up from 29.3% in the same period of 2023[116]. - The Retailer Services segment generated approximately 27.0% of revenues in the nine months ended September 30, 2024, compared to 25.1% in the same period of 2023[117]. - The Branded Services segment experienced a revenue decrease of $15.0 million, primarily due to an intentional client resignation and a weaker economic environment[160]. - The Experiential Services segment saw an increase in revenues of $34.4 million, or 11.1%, primarily due to a rise in events per day volume[160]. - Branded Services segment revenues fell by $344.4 million, or 25.9%, to $982.8 million for the nine months ended September 30, 2024, largely due to an intentional client resignation[177]. - Experiential Services segment revenues increased by $118.9 million, or 14.0%, to $969.6 million for the nine months ended September 30, 2024, driven by higher event volumes[178]. Cost and Expenses - Adjusted EBITDA from Continuing Operations for the nine months ended September 30, 2024 decreased by $3.9 million, or 1.5%, to $261.5 million[119]. - Cost of revenues as a percentage of total revenues improved to 84.6% for the three months ended September 30, 2024, down from 87.5% in the prior year, attributed to changes in revenue mix and decreased incentive compensation expenses[162]. - Selling, general, and administrative expenses increased to 10.5% of revenues for the three months ended September 30, 2024, compared to 6.7% in the same period last year, driven by costs related to internal reorganization and restructuring activities[163]. - Cost of revenues as a percentage of revenues improved to 85.9% for the nine months ended September 30, 2024, down from 87.8% in the prior year[179]. - Selling, general, and administrative expenses as a percentage of revenues increased to 9.4% for the nine months ended September 30, 2024, compared to 5.9% in the same period of 2023[180]. Restructuring and Impairment - The Company recognized a non-cash goodwill impairment charge of $99.7 million related to the Branded Agencies reporting unit during the nine months ended September 30, 2024[137]. - A restructuring plan was announced in July 2024, aimed at improving cost structure and operational efficiency, expected to be substantially completed by the end of 2024[152]. - The Company incurred $18.6 million and $74.0 million in reorganization expenses during the three and nine months ended September 30, 2024, respectively, compared to $21.4 million and $38.3 million in the same periods of 2023[153]. - The company incurred reorganization expenses of $2,250,000 for the three months ended September 30, 2024, compared to $1,044,000 for the same period in 2023[204]. - A non-cash goodwill impairment charge of $99.7 million was recognized during the nine months ended September 30, 2024, impacting overall financial performance[182]. Cash Flow and Liquidity - The company’s principal sources of liquidity include cash flows from operations and borrowings under the Revolving Credit Facility, with cash primarily used for operating expenses and technology investments[143]. - Net cash provided by operating activities from continuing operations was $78,009,000 for the nine months ended September 30, 2024, compared to $172,576,000 for the same period in 2023[209]. - Net cash provided by investing activities from continuing operations was $211,427,000 for the nine months ended September 30, 2024, compared to a net cash used of $(10,256,000) for the same period in 2023[209]. - Net cash used in financing activities from continuing operations was $(207,122,000) for the nine months ended September 30, 2024, compared to $(115,170,000) for the same period in 2023[209]. - The company reported a net change in cash, cash equivalents, and restricted cash of $80,909,000 for the nine months ended September 30, 2024, compared to $47,805,000 for the same period in 2023[209]. - Existing domestic cash and cash flows from operations are expected to be sufficient to fund domestic operating activities for at least the next 12 months[239]. Debt Management - The Term Loan Facility has an aggregate principal amount of $1.1 billion, with borrowings amortizing at 1.00% per annum of the original issued amount of $1.3 billion[221]. - The Company voluntarily repurchased $127.9 million principal amount of its Senior Secured Notes during the nine months ended September 30, 2024, recognizing a gain of $8.6 million[228]. - The Revolving Credit Facility matures in December 2027 and provides for revolving loans and letters of credit up to $500.0 million[214]. - The Term Loan Facility bears interest at a floating rate of Term SOFR plus an applicable margin of 4.25% per annum[221]. - The Company recognized a gain of $0.5 million from repurchases of the Term Loan Facility during the nine months ended September 30, 2024[221]. Other Financial Metrics - Interest expense, net decreased by $3.3 million, or 7.8%, to $39.0 million for the three months ended September 30, 2024, primarily due to a lower debt balance from repurchases of Term Loan Facility and Senior Secured Notes[169]. - Interest expense decreased by $5.4 million, or 4.5%, to $114.5 million for the nine months ended September 30, 2024, due to lower debt balances[188]. - The company reported costs associated with COVID-19 of $0 for the three months ended September 2024, compared to $(49,000) in the same period of 2023, reflecting a reduction in pandemic-related expenses[197]. - The company recognized a goodwill impairment charge of $99.7 million related to the Branded Agencies reporting unit during the second quarter of fiscal year 2024[246]. - The company does not have any off-balance sheet financing arrangements or liabilities[240].