Byrna Technologies Inc
For the period ended May 31, 2024. Filed Jul 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2024 · Filed Jul 9, 2024
BYRN$3.83+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-02-29; filed 2024-04-05.
0001437749-24-011142
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-05-31; filed 2024-07-09.
0001437749-24-022351
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 44 previous paragraphs and 69 current paragraphs.
27 unchanged; 15 reworded; 21 added; 2 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Revenues were $20.3 million in the fiscal quarter of 2024 which represents an increase of $8.8 million as compared to the prior year period revenues of $11.5 million. Most of the increase in revenue can be attributed to a new marketing strategy, implemented in September of 2023, shifting advertising efforts away from social media platforms and to celebrity endorsers. Direct to customer sales, via Amazon and the Company’s website, increased by $8.0 million from $6.8 million in the fiscal quarter of 2023 to $14.8 million in the fiscal quarter of 2024. Sales to domestic dealers and retailers also improved, increasing by 24% to $3.8 million from $3.1 million in the three months ended May 31, 2023. Sales to Canadian customers increased by $0.2 million or 65% to $0.6 million as compared to $0.3 million in the three months ended May 31, 2023. Sales to all other international markets decreased slightly from $1.3 million in the three months ended May 31, 2023 to $1.1 million in the three months ended May 31, 2024.
Current report
The Company recorded $0.2 million of foreign currency translation loss during the three months ended May 31, 2024 compared to $0.05 million of foreign currency translation loss during the three months ended May 31, 2023. The Company recorded $0.3 million of interest income during the three months ended May 31, 2024 compared to $0.1 million in the three months ended May 31, 2023. The Company recorded a gain of $0.06 million from its South American joint venture investment as compared to a loss of $0.2 million in the three months ended May 31, 2023.
Current report
Net Income/(Loss)
Current report
Net income was $2.1 million for the three months ended May 31, 2024, an improvement of $3.2 million compared to the net loss of $1.1 million for the three months ended May 31, 2023.
Current report
Six months ended May 31, 2024 as compared to six months ended May 31, 2023:
Current report
Net Revenue
Current report
Revenues were $36.9 million in the first half of 2024, an increase of $17.0 million or 85% from revenues of $19.9 in the first half of 2023. Most of the increase in revenue can be attributed to a new marketing strategy, implemented in September of 2023, shifting advertising efforts away from social media platforms and to celebrity endorsers. Direct to customer sales, via Amazon and the Company’s website, increased by $14.6 million from $13.0 million in the first half of 2023 to $27.5 million in the first half of 2024. Sales to domestic dealers and retailers also improved, increasing by 33% to $6.4 million from $4.8 million in the first half of 2023. Sales to Canadian customers increased by $0.4 million or 49% to $1.1 million as compared to $0.7 million in the first half of 2023. Sales to all other international markets increased from $1.4 million in the first half of 2023 to $1.9 million in the first half of 2024.
Current report
Cost of Goods Sold
Current report
Cost of goods sold was $14.7 million in the first half of 2024 compared to $8.5 million in the prior year period. The increase is due to the increase in sales volume.
Current report
Gross Profit
Current report
Operating Expenses
Current report
Operating expenses were $20.5 million in the first half of 2024, an increase of $6.0 million, as compared to the prior year period expenses of $14.4 million. The increase is due to an increase of $3.8 million in marketing expenses, an increase of $1.6 million in variable expenses, which increase in proportion to sales volume, an increase of $1.5 million in employee compensation costs. These cost increases were offset by a decrease of $1.2 million in stock compensation expense.
Current report
Other Income (Expense)
Current report
The Company recorded $0.3 million of foreign currency translation loss during the first half of 2024 compared to $0.2 million of foreign currency translation loss during the first half of 2023. The Company recorded $0.6 million of interest income during the first half of 2024 compared to $0.3 million in the first half of 2023. The Company recorded a gain of $0.02 million from its South American joint venture investment that was formed during the first half of 2023 as compared to a loss of $0.3 million in the first half of 2023.
Current report
Income Tax Provision
Current report
Net Income/(Loss)
Current report
Net income was $2.1 million for the first half of 2024, an improvement of $5.4 million compared to the net loss of $3.3 million for the first half of 2023.
Current report
Non-GAAP Financial Measures
Current report
Adjusted EBITDA
Current report
Financing Activities
Current report
Cash used in financing activities was $0.9 million for the six months ended May 31, 2024 compared to zero for the six months ended May 31, 2023. The current year amount was primarily composed of stock repurchases of $0.3 million and taxes paid on issuances of restricted stock units of $0.8 million.
Removed paragraphs (2)
Previous report
Revenues were $16.7 million in the first quarter of 2024 which represents an increase of $8.2 million as compared to the prior year period revenues of $8.4 million. Due to transformational shift in our advertising strategy in September 2023, our direct-to-consumer revenues through our website and Amazon for the three months ended February 29, 2024 increased $6.7 million to $12.8 million from $6.1 million in prior year period. Sales to our domestic dealers/distributors for the three months ended February 29, 2024 also increased $0.7 million to $2.2 million from $1.5 million in the prior year period. Sales to customers in Canada also slightly increased $0.1 million to $0.5 million for the three months ended February 29, 2024 from $0.4 million in the prior year period. In addition, Fox Labs, which we acquired on May 25, 2022, increased sales by $0.1 million to 2024for the three months ended February 29, 2024 from $0.3 million in the prior year period. International sales (other than Canada), which are characterized by infrequent but very large orders, increased by $0.6 million to $0.8 million during the first quarter of 2024 from $0.2 million in the prior year period.
Previous report
We recorded $0.3 million of interest income during the first quarter of 2024 compared to $0.1 of interest income in the first quarter of 2023. We recorded a loss of less than $0.1 million from our South American joint venture investment during the first quarter of 2024 compared to $0.2 million for the first quarter of 2023.
Reworded paragraphs (15)
Previous wording
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” "may," “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important risk factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended November 30, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 14, 2024 (the “2023 10-K”), the Company’s subsequent filings with the SEC, which can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, including but not limited to our ability to design, introduce and sell new products, services and features, the impact of any regulatory proceedings or litigation, our ability to protect our intellectual property and compete with existing and new products, the impact of stock compensation expense, dividends, warrant exercises and related accounting, impairment expense and income tax expense on our financial results, our ability to manage our supply chain and avoid production delays, shortages or other factors, including product mix, cost of parts and materials and cost of labor that may impact our gross margins, our ability to retain and incentivize key management personnel, product defects, the success of our entry to new markets, customer purchase behavior and negative media publicity or public perception of our brand or products, restrictions or prohibitions imposed by advertising platforms, loss of customer data, breach of security or an extended outage related to our e-commerce storefronts, inc…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” "may," “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important risk factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K for the year ended November 30, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 14, 2024, as amended on March 29, 2024 (the “2023 10-K”), and the Company’s subsequent filings with the SEC, all of which can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, including but not limited to our ability to design, introduce and sell new products, services and features, the impact of any regulatory proceedings or litigation, our ability to protect our intellectual property and compete with existing and new products, the impact of stock compensation expense, dividends, warrant exercises and related accounting, impairment expense and income tax expense on our financial results, our ability to manage our supply chain and avoid production delays, shortages or other factors, including product mix, cost of parts and materials and cost of labor that may impact our gross margins, our ability to retain and incentivize key management personnel, product defects, the success of our entry to new markets, customer purchase behavior and negative media publicity or public perception of our brand or products, restrictions or prohibitions imposed by advertising platforms, loss of cust…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
The following discussion and analysis is intended to help you understand us, our operations and our financial performance. It should be read in conjunction with our condensed consolidated financial statements and the accompanying notes, which are included in Item 1 of this report.
Current wording
The following discussion and analysis is intended to help you understand us, our operations and our financial performance. It should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes, which are included in Item 1 of this report.
Previous wording
On January 10, 2023, the Company created a new joint venture with Fusady S.A. ("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets. The Company holds 51% of the stock in the joint venture entity, Byrna LATAM, and the remaining 49% of stock in Byrna LATAM is held by Fusady.
Current wording
On January 10, 2023, the Company created a new joint venture ("Byrna LATAM") with Fusady S.A. ("Fusady") located in Uruguay, to expand the Company's operations and presence in South American markets. The Company holds 51% of the stock in Byrna LATAM, and the remaining 49% of stock in Byrna LATAM is held by Fusady. Under the terms of the joint venture, the Company does not control the entity.
Previous wording
Cost of goods sold was $7.0 million in the first quarter of 2024 compared to $3.2 million in the prior year period. This $3.9 million increase is due to the increase in sales volumes.
Current wording
Cost of goods sold was $7.7 million in the fiscal quarter of 2024 compared to $5.3 million in the prior year period. This $2.4 million increase is due to the increase in sales volumes.
Previous wording
Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $9.6 million in the first quarter of 2024, or 57.9% of net revenue, as compared to gross profit of approximately $5.2 million, or 62.4% of net revenue, in the prior year period. The decrease in gross profit as a percentage of sales is primarily due to the prior year period included a one-time adjustment for higher absorption of fixed costs than our typical quarters.
Current wording
Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $12.6 million in the fiscal quarter of 2024, or 62.0% of net revenue, as compared to gross profit of approximately $6.2 million, or 53.9% of net revenue, in the prior year period. The improvement in gross profit as a percentage of sales is primarily due to the increase in the proportion of high margin direct to customer sales, from 62% of total sales in the prior year period to 75% of sales in the fiscal quarter of 2024. The improvement was also due to higher absorption of fixed costs by increased production volume and due to reduced reliance on price discounts for sales promotions.
Previous wording
Operating expenses were $9.8 million in the first quarter of 2024, an increase of $2.6 million, as compared to the prior year period expenses of $7.2 million. The increase is due to higher marketing expenses of $1.9 million, $0.5 million due to variable expenses which increased in proportion to increase sales volume, $0.4 million of higher accrued bonus expense driven by improved financial performance and $0.3 of higher professional fees. This increase was offset by a $0.5 million decrease in stock-based compensation.
Current wording
Operating expenses were $10.6 million in the fiscal quarter of 2024, an increase of $3.5 million, as compared to the prior year period expenses of $7.2 million. The increase is due to an increase of $1.9 million in marketing expenses, an increase of $1.1 million in variable expenses, which increase in proportion to sales volume, an increase of $1.1 million in accrued employee compensation costs. These cost increases were offset by a decrease of $0.6 million in stock compensation expense.
Previous wording
For the three months ended February 29, 2024, the Company recorded a nominal amount of income tax expense. For the three months ended February 28, 2023 the Company recorded an income tax benefit of $0.1 million. For the three months ended February 29, 2024 and February 28, 2023, the effective tax rate was 0.0% and 2.7%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.
Current wording
For the three months ended May 31, 2024 and 2023, the Company recorded a nominal amount and $0.02 million of income tax expense, respectively. For the three months ended May 31, 2024 and 2023, the effective tax rate was 0.1% and 1.6%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.
Previous wording
Cash and cash equivalents as of February 29, 2024 totaled $24.2 million, an increase of $3.7 million from $20.5 million of cash and cash equivalents as of November 30, 2023.
Current wording
Cash and cash equivalents as of May 31, 2024 totaled $24.8 million, an increase of $4.3 million from $20.5 million of cash and cash equivalents as of November 30, 2023.
Previous wording
Cash provided by operating activities was $3.9 million for the three months ended February 29, 2024 compared to cash used in operations of $3.4 million during the prior year period. Net income was less than $0.1 million compared to net loss of 2.2 million for the three months ended February 29, 2024 and 2023, respectively. Significant changes in noncash and working capital activity are as follows:
Current wording
Cash provided by operating activities was $5.9 million for the six months ended May 31, 2024 compared to cash used in operations of $2.4 million during the prior year period. Net income was $2.1 million compared to net loss of $3.3 million for the six months ended May 31, 2024 and 2023, respectively. Significant changes in noncash and working capital activity are as follows:
Previous wording
Non-cash activity includes stock-based compensation expenses of $0.9 million for the three months ended February 29, 2024 compared to $1.5 million for the three months ended February 28, 2023; operating lease costs of $0.1 million for the three months ended February 29, 2024 compared to $0.4 million for the three months ended February 28, 2023, and less than a $0.1 million of joint venture investment loss in the three months ended February 29, 2024 compared to $0.2 million during the three months ended February 28, 2023.
Current wording
Non-cash activity includes stock-based compensation expenses of $1.8 million for the six months ended May 31, 2024 compared to $3.0 million for the six months ended May 31, 2023; depreciation and amortization expense of $0.7 million for the six months ended May 31, 2024 compared to $0.6 million for the six months ended May 31, 2023, amortization of right-of-use assets of $0.3 million for the six months ended May 31, 2024 compared to $0.3 million for the six months ended May 31, 2023, and less than a $0.1 million of joint venture investment loss in the six months ended May 31, 2024 compared to $0.4 million during the six months ended May 31, 2023.
Previous wording
Inventory decreased during the three months ended February 29, 2024 by $1.8 million compared to increase of $2.9 million for the three months ended February 28, 2023 Accounts receivable decreased by $1.4 million during the three months ended February 29, 2024 as compared to a decrease of $1.5 million for the three months ended February 28, 2023. Accounts payable and accrued liabilities decreased during the three months ended February 29, 2024 by $1.0 million compared to a decrease of $1.8 million for the three months ended February 28, 2023. Prepaid expenses and other current assets increased by $0.3 million during the three months ended February 29, 2024 compared to a decrease of $0.4 million during the three months ended February 28, 2023. Operating lease liabilities decreased by $0.1 million during the three months ended February 29, 2024 compared to a decrease of $0.4 million during the three months ended February 28, 2023. Deferred revenues increased $0.7 million and $0.5 million for the three months ended February 29, 2024, and February 28, 2023, respectively.
Current wording
Inventory increased during the six months ended May 31, 2024 by $1.6 million compared to increase of $2.7 million for the six months ended May 31, 2023. Accounts receivable decreased by $1.3 million during the six months ended May 31, 2024 as compared to a decrease of $1.3 million for the six months ended May 31, 2023. Accounts payable and accrued liabilities increased during the six months ended May 31, 2024 by $3.0 million compared to a decrease of $1.4 million for the six months ended May 31, 2023. Prepaid expenses and other current assets increased by $0.9 million during the six months ended May 31, 2024 compared to an increase of $0.1 million during the six months ended May 31, 2023. Operating lease liabilities decreased by $0.4 million during the six months ended May 31, 2024 compared to a decrease of $0.4 million during the six months ended May 31, 2023. Deferred revenues decreased $0.5 million during the six months ended May 31, 2024 compared to a decrease of $0.2 million for the six months ended May 31, 2023, respectively.
Previous wording
Cash used in investing activities was $0.2 million for the three months ended February 29, 2024 compared to $2.3 million for the three months ended February 28, 2023. The prior year period investing activities primarily relates to the investment in the joint venture and the corresponding loan while the current period relates to purchases of property and equipment.
Current wording
Cash used in investing activities was $0.7 million for the six months ended May 31, 2024 compared to $2.2 million for the six months ended May 31, 2023. The prior year period investing activities primarily relates to the investment in the joint venture and the corresponding loan while the current period relates to purchases of property and equipment.
Previous wording
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Current wording
We do not have any off-balance sheet arrangements that have, or have reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Previous wording
See Note 5, “Recent Accounting Guidance,” in the Notes to condensed consolidated financial statements included in Item 1 of this report for a discussion of recently issued and adopted accounting standards.
Current wording
See Note 5, “Recent Accounting Guidance,” in the Notes to unaudited condensed consolidated financial statements included in Item 1 of this report for a discussion of recently issued and adopted accounting standards.
Previous wording
Our condensed consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 4, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the 2023 Form 10-K. During the three months ended February 29, 2024, there were no significant changes to our critical accounting policies from those described in our 2023 Form 10-K.
Current wording
Our unaudited condensed consolidated financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are outlined in Note 4, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in Item 8 of the 2023 Form 10-K. During the three and six months ended May 31, 2024, there were no significant changes to our critical accounting policies from those described in our 2023 Form 10-K.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Gross profit is calculated as total revenue less cost of goods sold and gross margin is calculated as gross profit divided by total revenue. Included as cost of goods sold are costs associated with the production and procurement of products, such as labor and overhead, inbound freight costs, manufacturing depreciation, purchasing and receiving costs, and inspection costs. Gross profit was $22.2 million in the first half of 2024, or 60.1% of net revenue, as compared to gross profit of approximately $11.4 million, or 57.5% of net revenue, in the prior year period. The improvement in gross profit as a percentage of sales is primarily due to the increase in the proportion of high margin direct to customer sales, from 68% of total sales in the prior year period to 76% of sales in the first half of 2024. The improvement was also due to higher absorption of fixed costs by increased production volume and due to reduced reliance on price discounts for sales promotions.
Current report — wording carried from elsewhere
For the six months ended May 31, 2024 and 2023, the Company recorded an income tax expense of $0.01 million and income tax benefit of $0.04 million, respectively. For the six months ended May 31, 2024 and 2023, the effective tax rate was 0.2% and (1.3)%, respectively. The Company’s tax rate differs from the statutory rate of 21.0% due to the effects of state taxes net of federal benefit, the foreign tax rate differential as a result of Byrna South Africa, effects of permanent non-deductible expenses, the recording of a valuation allowance against the deferred tax assets generated in the current period, and other effects.
Current report — wording carried from elsewhere
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we provide an additional financial metric that is not prepared in accordance with GAAP (non-GAAP) with presenting non-GAAP adjusted EBITDA. Management uses this non-GAAP financial measure, in addition to GAAP financial measures, to understand and compare operating results across accounting periods, for financial and operational decision making, for planning and forecasting purposes and to evaluate our financial performance. We believe that this non-GAAP financial measure helps us to identify underlying trends in our business that could otherwise be masked by the effect of certain expenses that we exclude in the calculations of the non-GAAP financial measure.
Current report — wording carried from elsewhere
Accordingly, we believe that this non-GAAP financial measure reflects our ongoing business in a manner that allows for meaningful comparisons and analysis of trends in the business and provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
Current report — wording carried from elsewhere
This non-GAAP financial measure does not replace the presentation of our GAAP financial results and should only be used as a supplement to, not as a substitute for, our financial results presented in accordance with GAAP. There are limitations in the use of non-GAAP measures, because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment concerning exclusions of items from the comparable non-GAAP financial measure. In addition, other companies may use other non-GAAP measures to evaluate their performance, or may calculate non-GAAP measures differently, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.
Current report — wording carried from elsewhere
Adjusted EBITDA is defined as net (loss) income as reported in our condensed consolidated statements of operations and comprehensive (loss) income excluding the impact of (i) depreciation and amortization; (ii) income tax provision (benefit); (iii) interest income (expense); (iv) stock-based compensation expense, (v) impairment loss and (vi) one-time, non-recurring other expenses or income. Our Adjusted EBITDA measure eliminates potential differences in performance caused by variations in capital structures (affecting finance costs), tax positions, the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense). We also exclude certain one-time and non-cash costs. Reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, is as follows (in thousands):