Financial Performance - Revenues decreased by 39.6million,or4.6821.8 million for the three months ended March 31, 2025 compared to the same period in 2024[95] - Operating loss from continuing operations decreased by 15.3millionto14.6 million[95] - Net loss from continuing operations increased by 6.0millionto56.1 million[95] - Adjusted Net Income decreased by 25.3million,or274.516.1 million[95] - Adjusted EBITDA from Continuing Operations decreased by 12.5millionor17.658.2 million[95] - Total revenues decreased by 39.6million,or4.6821.8 million for the three months ended March 31, 2025, compared to 861.4millionforthesameperiodin2024[119]−NetlossfromcontinuingoperationsforQ12025was(56,130) thousand, compared to (50,133)thousandinQ12024,indicatingaworseningfinancialperformance[144]−AdjustedEBITDAfromContinuingOperationsforQ12025was58,181 thousand, down from 70,639thousandinQ12024,showingadeclineofapproximately17.627,945 thousand in Q1 2025, down from 34,334thousandinQ12024,adecreaseofabout18.512,069 thousand in Q1 2025 from 16,692thousandinQ12024,representingadeclineofapproximately27.618,167 thousand in Q1 2025, slightly down from 19,613thousandinQ12024,adecreaseofabout7.439.2 million, or 11.9%, primarily due to a weaker economic environment and an intentional client resignation[120] - The Experiential Services segment revenues increased by 6.7million,or2.27.1 million, or 3.1%, primarily due to staffing challenges[122] Cost Management and Restructuring - Selling, general, and administrative expenses decreased to 7.9% of revenues, down from 10.3% in the prior year, due to a 22.8millionreductionininternalreorganizationcosts[124]−ThecompanyannouncedarestructuringplaninJuly2024toimprovecoststructureandoperationalefficiency,withsubstantialcompletionexpectedbytheendoffiscalyear2024[113]−RestructuringexpensesforQ12025amountedto931 thousand, compared to no such expenses in Q1 2024, indicating increased costs related to operational adjustments[144] Cash Flow and Liquidity - Net cash used in operating activities for Q1 2025 was 39.6million,comparedto9.4 million in Q1 2024, reflecting a significant increase in accounts receivable[150] - Net cash used in investing activities in Q1 2025 was 18.4million,primarilyduetothepurchaseofpropertyandequipmentrelatedtotheenterpriseresourceplanninginitiative[152]−NetcashusedinfinancingactivitiesforQ12025was22.1 million, primarily related to repurchases of Notes totaling 18.2million[153]−Thecompany’scashflowfromoperatingactivitieswasnegativelyimpactedbyanincreaseinaccountsreceivableinQ12025comparedtoadecreaseinQ12024[151]−Thecompany’sprincipalsourcesofliquidityincludecashreceiptsforservicesperformedandborrowingsundertheRevolvingCreditFacility[149]−AsofMarch31,2025,thecompanyheld67.5 million in cash and cash equivalents outside the United States, an increase from 65.0millionasofDecember31,2024[180]DebtandInterestManagement−TheRevolvingCreditFacilityhasanaggregateprincipalamountofupto500 million, with 451millionavailableasofMarch31,2025[156]−TheTermLoanFacilityhasanaggregateprincipalamountof1.1 billion, with borrowings amortizing at 1% per annum of the original issued amount[163] - The company recognized a gain of 1.8millionontherepurchaseofNotesduringQ12025,classifiedunderinterestexpense[171]−Thecompanymayrefinanceexistingdebtorenterintoadditionalinterestratecapagreementstomanageinterestrateriskinthefuture[197]−Thecompanyhasinterestratecollarcontractswithanaggregatenotionalvalueof700.0 million as of March 31, 2025, to manage interest rate exposure[195] - The company has entered into interest rate collar agreements to manage exposure to potential interest rate increases, with a net liability of 0.8millionasofMarch31,2025[195]LegalandCompliance−Litigationexpensesincreasedto523 thousand in Q1 2025 from 284thousandinQ12024,indicatingrisinglegalcosts[137]−Thecompanyrecordedadeferredtaxliabilityofapproximately0.6 million for unremitted earnings in Canada, indicating a need for tax planning regarding foreign earnings[181] - The company is evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[186][188] - The company has no off-balance sheet financing arrangements or liabilities, ensuring transparency in its financial position[182] - The company has no majority-owned subsidiaries excluded from consolidated financial statements, ensuring comprehensive financial reporting[182] Other Financial Metrics - Interest expense decreased by 1.4million,or3.934.4 million for the three months ended March 31, 2025, primarily due to a lower debt balance[130] - Equity-based compensation of Karman Topco L.P. was (1,524)thousandinQ12025,asignificantchangefrom390 thousand in Q1 2024, reflecting a shift in compensation strategy[137] - The company reported a fair value adjustment related to contingent consideration of 0inQ12025,downfrom778 thousand in Q1 2024, suggesting changes in acquisition-related liabilities[144] - A 10% unfavorable change in foreign exchange rates could have decreased the company's consolidated loss before taxes by approximately $0.8 million for the three months ended March 31, 2025[192] - The company expects existing domestic cash and cash flows to be sufficient to fund operations and cash commitments for at least the next 12 months[181]
Advantage Solutions(ADV)2025-05-12 20:30