Edgio Announces Preliminary Unaudited Fourth Quarter 2023 Financial Results - Seite 3

The Company has obtained a waiver from the lenders under its senior secured credit facility related to delayed reporting through June 30, 2024. The Company may incur certain additional interest under its senior secured convertible notes if its SEC filings are not made on or before May 14, 2024.

Use of Non-GAAP Financial Measures

To evaluate its business, the Company considers and uses non-generally accepted accounting principles (“non-GAAP”), including Adjusted EBITDA as contained in this press release, as supplemental measures of operating performance. EBITDA is defined as U.S. GAAP net loss, adjusted to exclude interest expense, interest and other (income) expense, income tax expense, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude share-based compensation, restructuring charges, acquisition and legal related expenses, and expenses related to the 2023 restatement and other significant non-recurring gains or losses. These measures include some of the same adjustments management considers when it reviews and assesses operating performance on a period-to-period basis. The Company’s management uses these non-GAAP financial measures because, collectively, they provide valuable information on the performance of the Company’s on-going operations and assist management in making decisions regarding the Company’s strategic priorities and areas for future investment and focus. The Company believes these measures also provide similar insights to investors and enable investors to review the Company’s results of operations “through the eyes of management.”

The terms EBITDA and Adjusted EBITDA are not defined under U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company’s operating performance, Adjusted EBITDA should not be considered in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

• Adjusted EBITDA does not reflect the Company’s cash expenditures or future requirements for capital expenditures or contractual commitments;
• This measure does not reflect changes in, or cash requirements for, the Company’s working capital needs;
• This measure does not reflect the cash requirements necessary for litigation costs, including provision for litigation and litigation expenses;
• This measure does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt;
• This measure does not reflect income taxes or the cash requirements for any tax payments;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will be replaced sometime in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;
• While share-based compensation is a component of operating expense, the impact on the Company’s financial statements compared to other companies can vary significantly due to such factors as the assumed life of the options and the assumed volatility of the Company’s common stock; and
• Other companies may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

The Company compensates for these limitations by relying primarily on the Company’s U.S. GAAP financial results and using Adjusted EBITDA only as supplemental support for management’s analysis of business performance.