AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP(UNAUDITED) Three Months Ended March 31,(dollars in thousands, except per share data) 2025 2024 Gross profit, as reported$47,237 $43,307 Stock-based compensation (1) 405 330 Restructuring and other costs (2) 169 8 Non-GAAP adjustments to gross profit 574 338 Non-GAAP gross profit$47,811 $43,645 Gross margin, as reported 57.0% 51.4%Non-GAAP gross margin 57.7% 51.8% Selling, general and administrative, as reported$33,818 $39,593 Stock-based compensation (1) (2,725) (3,942)Restructuring and other costs (2) (393) (2,708)Purchase accounting intangible amortization (385) (543)Non-GAAP selling, general and administrative$30,315 $32,400 Research and development, as reported$9,485 $9,024 Stock-based compensation (1) (628) (267)Purchase accounting intangible amortization (670) (489)Non-GAAP research and development$8,187 $8,268 Operating expenses, as reported$43,423 $48,617 Stock-based compensation (1) (3,353) (4,209)Restructuring and other costs (2) (513) (2,708)Purchase accounting intangible amortization (1,055) (1,032)Non-GAAP adjustments to operating expenses (4,921) (7,949)Non-GAAP operating expenses$38,502 $40,668 Income (loss) from operations, as reported$3,814 $(5,310)Non-GAAP adjustments to gross profit 574 338 Non-GAAP adjustments to operating expenses 4,921 7,949 Non-GAAP income from operations$9,309 $2,977 Net income (loss), as reported$906 $(7,267)Non-GAAP adjustments to gross profit 574 338 Non-GAAP adjustments to operating expenses 4,921 7,949 Income tax effect of non-GAAP adjustments (3) (1,087) (2,072)Other tax adjustments (3) 1,105 2,748 Non-GAAP net income$6,419 $1,696 Net income (loss) per share - Diluted, as reported$0.05 $(0.38)Stock-based compensation (1) 0.19 0.24 Restructuring and other costs (2) 0.03 0.14 Purchase accounting intangible amortization 0.06 0.06 Income tax effect of non-GAAP adjustments (3) (0.06) (0.11)Other tax adjustments (3) 0.06 0.14 Non-GAAP net income per share - Diluted$0.33 $0.09 (1) We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods.(2) On February 14, 2020, our Board of Directors approved a global restructuring plan (the "Restructuring Plan”), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers.
Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to: the Company’s ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;the Company’s inability to successfully execute its strategic plan and our 2024 Restructuring Plan, including but not limited to additional impairment charges including existing leasehold improvements and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;the effect of any changes in our executive management team and the loss of any of our executive officers or other key personnel, which may be impacted by factors such as our inability to competitively address inflationary pressures on employee compensation and flexibility in employee work arrangements, including the impact of our 2025 "return to office" policy;the outcome of any litigation to which the Company is or may become a party;loss of future government sales;potential impacts on customer and supplier relationships and the Company's reputation;development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions;the effect of general economic and financial market conditions, including in response to public health concerns;assumptions regarding the Company’s financial condition or future financial performance may be incorrect;the impact of fluctuations in foreign exchange rates and inflation rates; andother risks and uncertainties discussed in Part I, Item 1A.
On November 1, 2024, our Board of Directors approved a restructuring plan (the "2024 Restructuring Plan”), which is intended to support its strategic plan in an effort to improve operating performance and streamline and simplify operations, particularly around our redundant operations and underperforming countries primarily driven by economic and demand challenges in the manufacturing and construction sectors.(3) The Income tax effect of non-GAAP adjustments is calculated by applying a statutory tax rate to Non-GAAP adjustments, including Stock-based compensation, Restructuring and other costs, non-recurring Inventory reserve charges, and Purchase accounting intangible amortization and fair value adjustments.
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