Market Overview

Hudson Group Reports Second Quarter 2018 Results

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Hudson Ltd. (NYSE:HUD) ("Hudson Group"), a leader in North American
travel retail, announced today its results for the quarter ended June
30, 2018.

Highlights for the Quarter:

  • Turnover of $499 million, a year-over-year increase of 7.4%;
  • Organic net sales growth of 8.2%; like-for-like net sales growth of
    4.5%;
  • Gross margin of 63.9%, a year-over-year expansion of 170 basis points;
  • Adjusted EBITDA of $72.2 million, a year-over-year increase of 51.4%
    (or 24.1% assuming the reduced franchise fee rates currently paid to
    Dufry1 had been in effect in the second quarter of 2017);
  • Successfully won, extended or expanded six concessions contracts
    including Boston Logan International Airport.

"We had a strong second quarter performance in which we continued to
drive organic sales growth and margin expansion," stated Joe DiDomizio,
President and CEO of Hudson Group. "The execution of our productivity
initiatives, including expanding our grab & go food offerings, and our
strategic wins this quarter, most notably at Boston Logan airport, are
all key to the sustainability of our organic growth profile. Further, we
have successfully renegotiated key contracts with our vendor partners
that have led to improved terms. Looking ahead, we have an exciting
opportunity to continue to win new contracts and extend existing
relationships, capitalizing on the uncaptured whitespace in the top
airports. Through these multiple avenues of growth, we plan to continue
to expand our strong footprint, drive top line growth and profitability,
ultimately enhancing shareholder value."

Second Quarter 2018 Summary

  • Turnover increased $34.6 million or 7.4% to $499.4 million for
    the second quarter 2018 compared to $464.8 million in the second
    quarter of 2017.
    • Net sales increased $36.2 million or 8.0% to $490.4 million from
      the year-ago period;
    • Organic net sales growth, which is a combination of like-for-like
      net sales growth and net new business and expansions, was 8.2%,
      compared to 9.1% in the year-ago period;
    • Like-for-like growth was 4.5% (3.8% in constant currency),
      compared to 4.3% (5.1% in constant currency) in the year-ago
      period, driven primarily by an increase in the number of overall
      transactions as well as average ticket size, partially offset by
      the timing shift of the Easter holiday from Q2 2017 to Q1 2018.
  • Gross profit increased $30.4 million or 10.5% to $319.3 million
    in the second quarter compared to $288.9 million in the year-ago
    period. Gross margin increased 170 bps to 63.9% in the quarter due to
    improved vendor terms as well as continued sales mix shift to higher
    margin categories.
  • Selling expenses increased $6.9 million or 6.4% to $114.1
    million in the second quarter as compared to the year-ago period,
    driven primarily by concession fees, which comprise the majority of
    this item and is mostly a variable expense driven by net sales. For
    the quarter, selling expenses as a percentage of turnover totaled
    22.8% compared to 23.1% in the prior year quarter, primarily due to a
    rent reduction in one of our contracts.
  • Personnel expenses increased $8.7 million or 9.4% to $100.8
    million in the second quarter as compared to the year-ago period. As a
    percentage of turnover, personnel expenses increased from 19.8% to
    20.2% this quarter. The increase in personnel expenses was primarily
    driven by new hires associated with opening new store locations, wage
    increases and additional personnel expense upon becoming a public
    company.
  • General and administrative expenses decreased $9.7 million or
    23.2% to $32.1 million in the second quarter as compared to the year
    ago period due to the reduction of franchise fees paid to Dufry
    starting January 1, 2018, partially offset by higher professional fees
    upon becoming a public company. As a percentage of turnover, this item
    decreased from 9.0% to 6.4%.
  • Adjusted EBITDA increased $24.5 million or 51.4% to $72.2
    million in the second quarter as compared to the prior year quarter,
    and adjusted EBITDA margin increased from 10.3% to 14.5%. Assuming the
    reduced franchise fee rates we currently pay Dufry had been in effect
    in the second quarter of 2017, adjusted EBITDA for the quarter would
    have increased $14.0 million or 24.1% instead of 51.4%, as compared to
    the year ago period.
  • Reported net earnings attributable to equity holders of the parent increased
    $16.1 million to $14.3 million in the second quarter compared to a
    loss of $1.8 million in the year ago quarter while reported diluted
    earnings per share increased to $0.15 per share compared to a loss per
    share of $0.02 in the prior year quarter.
  • Adjusted net earnings attributable to equity holders of the parent increased
    $14.1 million to $26.0 million in the second quarter compared to $11.9
    million in the year ago quarter, while adjusted earnings per share
    increased from $0.13 to $0.28.

Balance Sheet and Cash Flow Highlights

  • Cash flows from operating activities for the quarter were $71.4
    million compared to $58.4 million in the prior year quarter due to
    improvement in operating performance.
  • Capital expenditures in the quarter totaled $14.9 million compared to
    $31.4 million in the prior year quarter.
  • At June 30, 2018, the Company's net debt was $344.0 million resulting
    in net debt leverage of 1.6 times, compared to net debt of $256.1
    million and net debt leverage of 1.6 times at June 30, 2017.

Operational Update

As of June 30, 2018, Hudson Group operated 1,009 stores, across 88
locations, totaling 1.1 million square feet of retail space.

During the second quarter, Hudson expanded its footprint in existing
markets though RFP wins at Boston Logan International Airport and
LaGuardia Airport. The win at Boston Logan represents an incremental
9,000 square feet, or an increase of approximately 36%.

The Company also successfully extended existing contracts in Orlando
International Airport, Greater Rochester International Airport,
Burlington International Airport and Baltimore/Washington International
Thurgood Marshall Airport.

Earnings Conference Call Information

Hudson Group will host a conference call to review its second quarter
financial performance today, August 3, at 10:00 a.m. ET. Participants
can pre-register for the conference by navigating to http://dpregister.com/10122523.
The conference call also will be available in listen-only mode via our
investor relations website: https://investors.hudsongroup.com/.
To participate in the live call, interested parties may dial
1-833-255-2832 (toll free) or 1-412-902-6725. A web replay will be
available at https://services.choruscall.com/links/hson180803.html
for three months following the call.

Website Information:

We routinely post important information for investors on the Investor
Relations section of our website, investors.hudsongroup.com.
We intend to use this website as a means of disclosing material
information. Accordingly, investors should monitor the Investor
Relations section of our website, in addition to following our press
releases, SEC filings, public conference calls, presentations and
webcasts. The information contained on, or that may be accessed through,
our website is not incorporated by reference into, and is not a part of,
this document.

Non-IFRS and Other Measures:

Adjusted EBITDA is a non-IFRS measure and is not a uniformly or legally
defined financial measure. Adjusted EBITDA is not a substitute for IFRS
measures in assessing our overall financial performance. Because
adjusted EBITDA is not determined in accordance with IFRS, and is
susceptible to varying calculations, adjusted EBITDA may not be
comparable to other similarly titled measures presented by other
companies. We believe that adjusted EBITDA is useful to investors
because it is frequently used by securities analysts, investors and
other interested parties in their evaluation of the operating
performance of companies in industries similar to ours. We also believe
adjusted EBITDA is useful to investors as a measure of comparative
operating performance from period to period as it is reflective of
changes in pricing decisions, cost controls and other factors that
affect operating performance, and it removes the effect of our capital
structure (primarily interest expense), asset base (depreciation and
amortization) and non-recurring transactions, impairments of financial
assets and changes in provisions (primarily relating to costs associated
with the closing or restructuring of our operations). Our management
also uses adjusted EBITDA for planning purposes, including financial
projections. Adjusted EBITDA has limitations as an analytical tool, and
you should not consider it in isolation, or as a substitute for an
analysis of our results as reported under IFRS as issued by IASB. A
reconciliation of adjusted EBITDA to net earnings is provided in the
attached schedules.

Adjusted net earnings attributable to equity holders of parent is a
non-IFRS measure. We define adjusted net earnings attributable to equity
holders of parent as net earnings attributable to equity holders of
parent adjusted for the items set forth in the table below. Adjusted net
earnings attributable to equity holders of parent is a non-IFRS measure
and is not a uniformly or legally defined financial measure. Adjusted
net earnings attributable to equity holders of parent is not a
substitute for IFRS measures in assessing our overall operating
performance. Because adjusted net earnings attributable to equity
holders of parent is not determined in accordance with IFRS, and is
susceptible to varying calculations, adjusted net earnings attributable
to equity holders of parent may not be comparable to other similarly
titled measures presented by other companies. Adjusted net earnings
attributable to equity holders of parent is included in this prospectus
because it is a measure of our operating performance and we believe that
adjusted net earnings attributable to equity holders of parent is useful
to investors because it is frequently used by securities analysts,
investors and other interested parties in their evaluation of the
operating performance of companies in industries similar to ours. We
also believe adjusted net earnings attributable to equity holders of
parent is useful to investors as a measure of comparative operating
performance from period to period as it removes the effects of purchase
accounting for acquired intangible assets (primarily concessions),
non-recurring transactions, impairments of financial assets and changes
in provisions (primarily relating to costs associated with the closing
or restructuring of our operations). Management does not consider such
costs for the purpose of evaluating the performance of the business and
as a result uses adjusted net earnings attributable to equity holders of
parent for planning purposes. Adjusted net earnings attributable to
equity holders of parent has limitations as an analytical tool, and you
should not consider it in isolation, or as a substitute for an analysis
of our results as reported under IFRS as issued by IASB. A
reconciliation of adjusted net earnings attributable to equity holders
of parent to net earnings attributable to equity holders of parent is
provided in the attached schedules.

Organic net sales growth represents the combination of growth in
aggregate monthly net sales from (i) like-for-like net sales growth and
(ii) net new business and expansions. Like-for-like growth represents
the growth in aggregate monthly net sales in the applicable period at
stores that have been operating for at least 12 months. Like-for-like
growth excludes growth attributable to (i) net new business and
expansions until such stores have been part of our business for at least
12 months, (ii) acquired stores until such stores have been part of our
business for at least 12 months and (iii) acquired wind-down stores,
consisting of eight stores acquired in the 2014 acquisition of The
Nuance Group AG ("Nuance") and 46 stores acquired in the 2015
acquisition of World Duty Free S.p.A. ("World Duty Free Group") that
management expected, at the time of the applicable acquisition, to wind
down. Net new business and expansions consists of growth from (i)
changes in the total number of our stores (other than acquired stores),
(ii) changes in the retail space of our existing stores and (iii)
modification of store retail concepts through rebranding. Net new
business and expansions excludes growth attributable to (i) acquired
stores until such stores have been part of our business for at least 12
months and (ii) acquired wind-down stores. Like-for-like growth in
constant currency is calculated by keeping exchange rates constant for
each month being compared from period to period. We believe that the
presentation of like-for-like growth in constant currency basis assists
investors in comparing period to period operating results as it removes
the effect of fluctuations in foreign exchange rates.

Net debt leverage represents total debt less cash at June 30, 2018
divided by adjusted EBITDA for the trailing twelve months ended June 30,
2018.

About Hudson Group

Hudson Group (NYSE:HUD), a Dufry Company and one of the largest travel
retailers in North America, is committed to enhancing the travel
experience for over 300,000 travelers every day in the continental
United States and Canada. The Company is anchored by its iconic Hudson,
Hudson News and Hudson Bookseller brands and operates over 1,000
duty-paid and duty-free stores in 88 locations, including airports,
commuter terminals, hotels and some of the most visited landmarks and
tourist destinations in the world. Our wide range of store concepts
include travel essentials and convenience stores, bookstores, duty-free
shops, branded specialty stores, electronics stores, and quick-service
food and beverage outlets. For more information, visit www.hudsongroup.com and www.dufry.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (Reform
Act). Forward-looking statements are based on our beliefs and
assumptions and on information currently available to us, and include,
without limitation, statements regarding our business, financial
condition, strategy, results of operations, certain of our plans,
objectives, assumptions, expectations, prospects and beliefs and
statements regarding other future events or prospects. Forward-looking
statements include all statements that are not historical facts and can
be identified by the use of forward-looking terminology such as the
words "believe," "expect," "plan," "intend," "seek," "anticipate,"
"estimate," "predict," "potential," "assume," "continue," "may," "will,"
"should," "could," "shall," "risk" or the negative of these terms or
similar expressions that are predictions of or indicate future events
and future trends. By their nature, forward-looking statements involve
risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. We caution you
that forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition and
liquidity, the development of the industry in which we operate and the
effect of acquisitions on us may differ materially from those made in or
suggested by the forward looking statements contained in this press
release. In addition, even if our results of operations, financial
condition and liquidity, the development of the industry in which we
operate and the effect of acquisitions on us are consistent with the
forward-looking statements contained in this press release, those
results or developments may not be indicative of results or developments
in subsequent periods. Forward-looking statements speak only as of the
date they are made, and we do not undertake any obligation to update
them in light of new information or future developments or to release
publicly any revisions to these statements in order to reflect later
events or circumstances or to reflect the occurrence of unanticipated
events. Factors that may cause our actual results to differ materially
from those expressed or implied by the forward-looking statements in
this press release, or that may impact our business and results more
generally, include, but are not limited to, the risks described under
"Item 3. Key Information—D. Risk factors" of our Annual Report on Form
20-F for the year ended December 31, 2017 which may be accessed through
the SEC's website at https://www.sec.gov/edgar.
You should read these risk factors before making an investment in our
shares.

________________________
1 Dufry AG (SIX:
DUFN) is the ultimate parent and controlling shareholder of Hudson Ltd.

               
CONSOLIDATED
INCOME
STATEMENT
 
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2018 (UNAUDITED)
 
 
QUARTER ENDED QUARTER ENDED SIX MONTHS ENDED SIX MONTHS ENDED
IN MILLIONS OF USD (EXCEPT PER SHARE DATA) 6/30/2018 6/30/2017 6/30/2018 6/30/2017
 
Turnover 499.4 464.8 926.2 855.5
Cost of sales (180.1 ) (175.9 ) (338.9 ) (323.3 )
Gross profit 319.3   288.9   587.3   532.2  
Selling expenses (114.1 ) (107.2 ) (215.0 ) (201.9 )
Personnel expenses (100.8 ) (92.1 ) (198.4 ) (180.0 )
General expenses (32.1 ) (41.8 ) (64.9 ) (78.7 )
Share of result of associates (0.1 ) (0.1 ) - (0.2 )
Depreciation, amortization and impairment (30.6 ) (26.3 ) (59.4 ) (53.3 )
Other operational result (2.4 ) (4.5 ) (5.0 ) (6.3 )
Operating Profit (EBIT) 39.2   16.9   44.6   11.8  
Interest expenses (7.7 ) (7.3 ) (15.6 ) (14.5 )
Interest income 0.6 0.5 1.1 1.0
Foreign exchange gain / (loss) (0.1 ) 0.2 (0.5 ) 0.4
Earnings before taxes (EBT) 32.0   10.3   29.6   (1.3 )
Income tax (5.8 ) (3.2 ) (3.4 ) 3.0
Net earnings 26.2   7.1   26.2   1.7  
 
NET EARNINGS ATTRIBUTABLE TO
Equity holders of the parent 14.3 (1.8 ) 8.6 (12.5 )
Non-controlling interests 11.9   8.9   17.6   14.2  
 
 
EARNINGS/LOSS PER SHARE(1)
Basic 0.15 (0.02 ) 0.09 (0.14 )
Diluted 0.15 (0.02 ) 0.09 (0.14 )
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING (000's)
Basic 92,511 92,511 92,511 92,511
Diluted 92,511 92,511 92,511 92,511
 

(1) Gives effect to our Class A and Class B common shares
outstanding following the completion of our initial public
offering on February 5, 2018.

 
       
CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
 
AT JUNE 30, 2018 (UNAUDITED)
 
 
JUNE 30, DECEMBER 31,
IN MILLIONS OF USD 2018 2017
 
ASSETS
Property, plant and equipment 248.7 264.9
Intangible assets 649.9 685.8
Investments in associates 3.4 3.1
Deferred tax assets 90.7 90.3
Other non-current assets 29.1 24.9
Non-current assets 1,021.8 1,069.0
 
Inventories 179.9 186.0
Trade receivables 5.3 4.6
Other accounts receivable

46.3

59.4
Income tax receivables 1.5 1.4
Cash and cash equivalents 239.0 137.4
Current assets

472.0

388.8
 
Total assets

1,493.8

1,457.8
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Equity attributable to equity holders of the parent 539.7 493.7
Non-controlling interests 91.3 78.7
Total equity 631.0 572.4
 
Financial debt 518.2 520.4
Deferred tax liabilities 55.5 50.1
Post-employment benefit obligations 1.0 0.9
Non-current liabilities 574.7 571.4
 
Trade payables 104.5 97.1
Financial debt 64.8 80.7
Income tax payables 1.3 4.1
Other liabilities

117.5

132.1
Current liabilities

288.1

314.0
 
Total liabilities

862.8

885.4
Total liabilities and shareholders' equity

1,493.8

1,457.8
 
               
CONSOLIDATED
STATEMENT OF
CASH FLOWS
 
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2018 (UNAUDITED)
 
 
 
QUARTER ENDED QUARTER ENDED SIX MONTHS ENDED SIX MONTHS ENDED
IN MILLIONS OF USD 6/30/2018 6/30/2017 6/30/2018 6/30/2017
 
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings before taxes (EBT) 32.0   10.3   29.6   (1.3 )
 
ADJUSTMENTS FOR
Depreciation, amortization and impairment 30.6 26.3 59.4 53.3
Loss / (gain) on sale of non-current assets 0.1 1.5 0.8 1.5
Increase / (decrease) in allowances and provisions 2.7 2.1 6.6 6.0
Loss / (gain) on foreign exchange differences (0.2 ) 1.2 0.3 1.3
Other non-cash items 0.5 1.8 2.9 2.0
Share of result of associates 0.1 0.1 - 0.2
Interest expense 7.7 7.3 15.6 14.5
Interest income (0.6 ) (0.5 ) (1.1 ) (1.0 )
Cash flow before working capital changes 72.9   50.1   114.1   76.5  
 
Decrease / (increase) in trade and other accounts receivable (0.2 ) 21.5 12.5 (7.6 )
Decrease / (increase) in inventories (2.3 ) (1.1 ) (1.5 ) (21.9 )
Increase / (decrease) in trade and other accounts payable 2.9 (11.9 ) (0.2 ) 49.4
Cash generated from operations 73.3   58.6   124.9   96.4  
Income taxes paid (1.9 ) (0.2 ) (3.0 ) (2.1 )
Net cash flows from operating activities 71.4   58.4   121.9   94.3  
 
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (19.3 ) (28.2 ) (33.5 ) (48.1 )
Purchase of intangible assets (1.0 ) (4.1 ) (2.1 ) (6.4 )
Net purchase of interest in associates - - (0.4 ) -
Proceeds from sale of property, plant and equipment 0.2 (2.4 ) 0.3 0.2
Interest received 0.3 0.4 1.1 0.8
Net cash flows used in investing activities (19.8 ) (34.3 ) (34.6 ) (53.5 )
 
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from restructuring - - 60.1 -
Proceeds from / (repayment of) financial debt - 0.9 (13.1 ) (1.5 )
Repayments of / (granted) 3rd party loans receivable (0.1 ) 21.0 0.3 21.1
Transaction costs paid for the listing of equity instruments (2.8 ) - (6.3 ) -
Dividends paid to non-controlling interest (7.6 ) (6.0 ) (13.3 ) (13.0 )
Net contributions from / (purchase of) non-controlling interests 2.9 - 3.7 -
Interest paid (15.1 ) (7.3 ) (15.6 ) (14.5 )
Net cash flows from / (used in) financing activities (22.7 ) 8.6   15.8   (7.9 )
Currency translation on cash 4.8 (2.6 ) (1.5 ) (1.4 )
Increase in cash and cash equivalents 33.7   30.1   101.6   31.5  
 
CASH AND CASH EQUIVALENTS AT THE
– beginning of the period 205.3 189.0 137.4 187.6
– end of the period 239.0 219.1 239.0 219.1
 
               
NON-IFRS RECONCILIATIONS
 
ADJUSTED EBITDA TO NET EARNINGS
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2018
 
 
QUARTER ENDED QUARTER ENDED SIX MONTHS ENDED SIX MONTHS ENDED
IN MILLIONS OF USD 6/30/2018 6/30/2017 6/30/2018 6/30/2017
 
Net earnings 26.2   7.1   26.2   1.7  
Income tax expense 5.8 3.2 3.4 (3.0 )
Earnings before taxes (EBT) 32.0   10.3   29.6   (1.3 )
Foreign exchange (gain) / loss 0.1 (0.2 ) 0.5 (0.4 )
Interest income (0.6 ) (0.5 ) (1.1 ) (1.0 )
Interest expenses 7.7 7.3 15.6 14.5
Operating Profit (EBIT) 39.2   16.9   44.6   11.8  
Depreciation, amortization and impairment 30.6 26.3 59.4 53.3
Other operational result (1) 2.4 4.5 5.0 6.3
Adjusted EBITDA 72.2   47.7   109.0   71.4  
 

(1)

 

For the quarter ended June 30, 2018, other operational result
consisted of $1.0 million of litigation reserve, $0.4 million of
IPO transaction costs, $0.2 million of restructuring expenses and
$0.8 million of other non-recurring items. For the quarter ended
June 30, 2017, other operational result included $2.3 million of
restructuring expenses, $1.5 million of asset write-offs related
to conversions and store closings and $0.7 million of other
non-recurring items.

For the six months ended June 30, 2018, other operational result
consisted of $1.0 million of litigation reserve, $0.8 million of
asset write-offs related to conversions and store closings, $0.7
million of IPO transaction costs, $0.7 million of uncollected
receivables, $0.6 million of restructuring expenses and $1.2
million of other non-recurring items. For the six months ended
June 30, 2017, other operational result included $3.3 million of
restructuring expenses, $1.5 million of asset write-offs and $1.5
million of other non-recurring items.

 
NET EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT TO
ADJUSTED NET EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2018
               
 
QUARTER ENDED QUARTER ENDED SIX MONTHS ENDED SIX MONTHS ENDED
IN MILLIONS OF USD (EXCEPT PER SHARE DATA) 6/30/2018 6/30/2017 6/30/2018 6/30/2017
 
Net earnings attributable to equity holders of the parent 14.3   (1.8 ) 8.6   (12.5 )
Amortization related to acquisitions (1) 9.9 9.9 19.8 19.8
Other operational result (2) 2.4 4.5 5.0 6.3
Income tax adjustment (3) (0.6 ) (0.7 ) (1.3 ) (1.4 )
Adjusted net earnings attributable to equity holders of the parent 26.0   11.9   32.1   12.2  
 
Diluted earnings / (loss) per share 0.15 (0.02 ) 0.09 (0.14 )
Adjusted diluted earnings / (loss) per share to equity holders of
the parent
  0.28   0.13   0.35   0.13  
Weighted average number of shares outstanding (000's)
(4)
92,511   92,511   92,511   92,511  

 

(1)   Although the values assigned to the concession rights during the
purchase price allocation are fair values, we believe that their
additional amortization doesn't allow a fair comparison with our
existing business previous to the business combination, as the costs
of self-generated intangible assets have been expended.
 
(2) For the quarter ended June 30, 2018, other operational result
consisted of $1.0 million of litigation reserve, $0.4 million of IPO
transaction costs, $0.2 million of restructuring expenses and $0.8
million of other non-recurring items. For the quarter ended June 30,
2017, other operational result included $2.3 million of
restructuring expenses, $1.5 million of asset write-offs related to
conversions and store closings and $0.7 million of other
non-recurring items.

For the six months ended June 30, 2018, other operational result
consisted of $1.0 million of litigation reserve, $0.8 million of
asset write-offs related to conversions and store closings, $0.7
million of IPO transaction costs, $0.7 million of uncollected
receivables, $0.6 million of restructuring expenses and $1.2
million of other non-recurring items. For the six months ended
June 30, 2017, other operational result included $3.3 million of
restructuring expenses, $1.5 million of asset write-offs and $1.5
million of other non-recurring items.

 
(3) Income tax adjustment represents the impact in income taxes we
actually accrued during the applicable period attributable to other
operational result. This assumption uses an income tax rate of 26.5%
and 39.0% for the adjustment for the periods ended June 30, 2018 and
2017, respectively. Amortization expenses related to acquisitions
did not reduce the amount of taxes we paid during the applicable
periods, and therefore there are no corresponding income tax
adjustments in respect of the amortization expense adjustment.
 
(4) Gives effect to our Class A and Class B common shares outstanding
following the completion of our initial public offering on February
5, 2018.

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