• EBITDA is widely used by investors to measure a company's operating performance without regard to such items as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
• investors commonly adjust EBITDA information to eliminate the effect of stock-based compensation expenses and other charges, which can vary widely from company to company and impair comparability.
Our management uses Adjusted EBITDA:
• as a measure of operating performance to assist in comparing performance from period to period on a consistent basis;
• as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations;
• in communications with the Board of Directors, shareholders, analysts and investors concerning our financial performance; and
• historically, as a significant performance measurement included in our bonus plan.
The table below sets forth a reconciliation of net income to Adjusted EBITDA (in thousands): 2013- Quarter Ended September 30 December 31 March 31 June 30 Total Net (loss) income $ 8
$ (985 ) $ (608 ) $ (3,480 ) $ (5,065 )Stock-based compensation expense 1,099 1,048 1,045 1,231 4,423 Depreciation and amortization expense 1,784 1,908 2,337 3,100 9,129 Acquisition-related transaction costs - 131 14 - 145 Interest and other expenses, net (289 ) 16 (38 ) 2 (309 ) Provision (benefit) for income taxes 7 (831 ) (2,162 ) 1,395 (1,591 ) Adjusted EBITDA: $ 2,609 $ 1,287 $ 588 $ 2,248 $ 6,732
2012 - Quarter Ended
June 30 Total Net (loss) income
$ (406 ) $ (268 ) $ 1,379 $ 2,205 $ 2,910Stock-based compensation expense 1,057 430 344 924 2,755 Depreciation and amortization expense 460 1,149 1,353 1,410 4,372 Acquisition-related transaction costs 123 123 Interest and other expenses, net 9 (1 ) (50 ) (12 ) (54 ) Provision (benefit) for income taxes (190 ) (130 ) 948 1,327 1,955 Adjusted EBITDA: $ 930 $ 1,303 $ 3,974 $ 5,854 $ 12,06146
Liquidity and Capital Resources
Our principal capital requirements are to fund operations. We have typically funded our capital needs from operating cash flow augmented by approximately
$33 millionnet proceeds from our offering completed in February 2012. In March 2011, we entered into a loan agreement with Bank of America, N.A. This facility provides financing of up to $5 million(based on eligible receivables) with interest at LIBOR plus 275 basis points. The loan agreement is secured by a pledge of the Company's assets and contains customary provisions regarding covenants. The financial covenants require us to maintain a leverage ratio that does not exceed 2:1 and an EBITDA to interest expense ratio of at least 3:1. At June 30, 2013, we were in compliance with these covenants and there were no amounts outstanding on the credit facility. At each of June 30, 2013and 2012, the Company had available borrowing capacity under this revolving credit facility of $5 million. On August 16, 2013, the Company executed a non-binding commitment with Bank of America, N.A. for a $25 million, four-year facility. The commitment is subject to certain specific conditions as documented in the commitment itself. The facility replaces the $5 millionloan and has similar terms and conditions.