CTG Reports Third Quarter 2021 Results

November 9, 2021

Solutions Revenue Increased 12% Year-over-Year, Representing 46% of Total Revenue

GAAP Operating Profit Increased 48% Year-over-Year

GAAP Operating Margin Increased 90 Basis Points Year-over-Year to 3.0%

Achieved GAAP EPS of $0.11 and non-GAAP EPS of $0.13

BUFFALO, N.Y., Nov. 09, 2021 (GLOBE NEWSWIRE) -- CTG (NASDAQ: CTG), a leading provider of digital IT services and solutions in North America and Western Europe, today announced its financial results for the third quarter ended October 1, 2021.

Third Quarter Financial Summary

  • Solutions revenue increased 11.7% year-over-year to $41.3 million or 45.6% of total revenue, compared with $37.0 million or 41.7% of total revenue in the year-ago quarter, and tracking towards the Company’s 2023 Vision of greater than 50% of total revenue
  • Total revenue increased 2.2% year-over-year to $90.6 million, compared with $88.6 million in the third quarter of 2020, consistent with the Company’s planned disengagement from low margin staffing engagements
  • Gross profit increased 3.8% year-over-year to $20.3 million or 22.4% of total revenue, compared with $19.5 million or 22.1% of total revenue in the year-ago quarter
  • GAAP operating income and margin expanded to $2.7 million and 3.0% from $1.8 million and 2.1% in the year-ago quarter
  • Non-GAAP operating income and margin excluding $0.3 million in acquisition-related expenses, were $3.0 million and 3.3%, compared with $2.4 million and 2.7% in the year-ago quarter
  • GAAP net income was $1.7 million or $0.11 per diluted share, versus $2.8 million or $0.20 per diluted share in the year-ago period. The prior period results included a net $0.02 per diluted share increase resulting from a one-time gain from non-taxable life insurance offset by acquisition-related expenses, and a $0.08 per diluted share tax benefit from a change in legislation
  • Non-GAAP net income decreased to $1.9 million or $0.13 per diluted share, compared with non-GAAP net income of $2.6 million, or $0.18 per diluted share in the year-ago quarter, which included the $0.08 tax benefit from a change in legislation
  • Adjusted EBITDA was $3.7 million in the third quarter of 2021 compared with $3.3 million in the prior year third quarter. Approximately 70% of year-to-date adjusted EBITDA was generated from Solutions, underscoring the focus on Solutions engagements to drive profitability

Third Quarter and Recent Business Highlights

  • Commenced initial work and training on a sizable go-live Epic medical record system implementation with a U.S. healthcare client that will largely be completed and contribute significantly to revenue in the fourth quarter
  • Extended managed services agreement including software development, testing and Agile methodology with large European client
  • Elected James “Jay” R. Helvey III, prior independent director, as new Chair of the CTG Board of Directors

CEO Comments on Results

“The third quarter marked the fourth consecutive quarter of year-over-year growth in both total and Solutions business revenue as we continue to execute our digital solutions strategy,” said Filip Gydé, CTG President and CEO. “In addition to an increased mix of higher-margin Solutions business, we also improved margins in our Staffing business as a result of our strategic decision to disengage from less profitable work. Collectively, these actions continue to deliver definitive improvement in our overall operating performance, consistent with our longer-term vision for the Company which includes our 2023 Vision of achieving 10% EBITDA margin on Solutions revenue.”

“The market opportunity and businesses’ need for digital solutions is large and growing. As part of our strategy, we have positioned CTG as a catalyst for clients by providing the tools and expertise to rapidly achieve their business transformation objectives. For example, today our team is actively managing a complex go-live Epic implementation for a sizeable healthcare client in the U.S. This project involves coordinating hundreds of solutions experts, leveraging innovative and purpose-built application tools, and providing the training to support thousands of end users – all of which are designed to accelerate our client’s transformation and maximize the return from their investment. As reflected by our revenue guidance, this project will be a significant contributor to our fourth quarter results. We also continue to search for attractive acquisitions to accelerate the growth of our Solutions revenue and further expand EBITDA margin within a disciplined capital allocation framework.”

“In summary, I continue to be very pleased with the team’s execution of our strategic initiatives and our growing pipeline of digital transformation engagements. We are currently well positioned for strong growth in the fourth quarter, which will drive enhanced operating results and profitability.”

Consolidated Third Quarter Results

Consolidated revenue in the third quarter of 2021 was $90.6 million, representing a 1.7% decrease from $92.2 million in the second quarter of 2021, and a 2.2% increase from the $88.6 million in the third quarter of 2020. Revenue in the third quarter of 2021 reflected seasonality in Europe and the continued disengagement from lower-margin IT Staffing business, partly offset by increased Solutions business in North America. The increase in revenue compared with the third quarter of 2020 was primarily due to the continued expansion of Solutions business and client engagements for CTG’s digital transformation offerings.

Gross profit in the third quarter of 2021 was $20.3 million, or 22.4% of total revenue, compared with $20.4 million, or 22.1% of total revenue, in the second quarter of 2021, and $19.5 million, or 22.1% of total revenue, in the third quarter of 2020. SG&A expense in the third quarter of 2021 was consistent with the Company’s continued investment in solutions and business development resources in support of its digital solutions strategy. These expenses totaled $17.6 million in the third quarter of 2021 and included $0.3 million in acquisition-related expenses associated with previously acquired businesses. This compared with SG&A expense in the second quarter of 2021 of $17.6 million, which included $0.2 million in acquisition-related expenses associated with previously acquired businesses. SG&A expense in the third quarter of 2020 was $17.7 million, which included $0.6 million in acquisition-related expenses.

GAAP operating income in the third quarter of 2021 was $2.7 million, or 3.0% of total revenue, and included the previously referenced acquisition-related expenses. Non-GAAP operating income in the third quarter of 2021 was $3.0 million or 3.3% of total revenue. GAAP operating income in the second quarter of 2021 was $2.8 million, or 3.0% of total revenue, and included $0.2 million in acquisition-related expenses. Non-GAAP operating income in the second quarter of 2021 was $3.0 million or 3.2% of total revenue. GAAP operating income in the third quarter of 2020 was $1.8 million, or 2.1% of total revenue, and included $0.6 million in acquisition-related expenses. Non-GAAP operating income in the third quarter of 2020 was $2.4 million or 2.7% of total revenue. CTG’s operations outside of the U.S. are conducted in local currencies. Fluctuations in international currencies had little impact on operating income in the third quarter of 2021.

GAAP net income in the third quarter of 2021 was $1.7 million, or $0.11 per diluted share, which included approximately $0.2 million, or $0.02 per diluted share, of acquisition-related expenses. Non-GAAP net income was $1.9 million or $0.13 per diluted share. GAAP net income in the second quarter of 2021 was $1.8 million, or $0.12 per diluted share, which included $0.2 million, or $0.01 per diluted share, of acquisition-related expenses. Non-GAAP net income in the second quarter of 2021 was $2.0 million or $0.13 per diluted share. GAAP net income in the third quarter of 2020 was $2.8 million, or $0.20 per diluted share, which included a net $0.2 million of income, or $0.02 per diluted share, comprised of acquisition-related expenses, offset by gains from non-taxable life insurance. Non-GAAP net income was $2.6 million, or $0.18 per diluted share, in the third quarter of 2020. Both GAAP and non-GAAP net income in the third quarter of 2020 include a $0.08 per share tax benefit from a change in legislation.

CTG’s effective income tax rate in the third quarter of 2021 was 22.6% compared with 28.0% in the second quarter of 2021, and negative 31.2% in the third quarter of 2020.

Balance Sheet

Cash and short-term investments on October 1, 2021 were $31.0 million. At the end of the third quarter, the Company had no outstanding balance on its revolving line of credit facility or any other long-term debt. Days sales outstanding were 82 in the third quarter of 2021 compared to 77 in the prior year period.

Guidance and Outlook

Based on current bookings and expected work from the large EPIC implementation go-live engagement, the Company anticipates revenue to increase significantly in the fourth quarter and be in a range of between $110 and $115 million. Additionally, GAAP earnings per share in the fourth quarter is expected to be in a range of between $0.15 and $0.17, and non-GAAP earnings is expected to be in a range of between $0.16 and $0.18 per diluted share.

Taken together with the Company’s year-to-date financial results, revenue for the full year of 2021 is expected to be between $390 and $395 million. GAAP earnings for the full year 2021 is expected to be in a range of between $0.49 and $0.51 per diluted share, and non-GAAP earnings are expected to be between $0.55 and $0.57 per diluted share. Note, non-GAAP diluted EPS guidance excludes acquisition-related expenses, which include the amortization of acquisition-related intangible assets and changes in the value of potential future earn-out payments.

John M. Laubacker, CTG Executive Vice President and Chief Financial Officer commented, “we are very pleased with our consistent progress and the continued advancement of the Company’s digital transformation strategy, which together with a large go-live Epic implementation project will contribute to strong sequential revenue growth and further improvement in both our operating results and earnings per share in the fourth quarter. We are also committed to a value generation strategy built on margin expansion and EBITDA growth resulting from increased digital solutions services in both North America and Europe, with continued investment in offshore delivery capabilities as an essential part of the strategy.”

Conference Call and Webcast

CTG will hold a conference call today at 11:00 a.m. Eastern Time to discuss the Company’s financial results and business outlook. To access CTG’s conference call via telephone, participants should dial +1 877 226 8189 and enter the access code 6073339. The conference call will also be available via webcast in the Investors section of CTG’s website at www.ctg.com.

A replay of the call will be available between 3:00 p.m. Eastern Time on November 9, 2021 and 12:00 a.m. Eastern Time on November 12, 2021 by dialing +1 866 207 1041 and entering the access code 1468901. The webcast will also be archived on CTG’s website in the Events & Presentations section for at least 90 days following completion of the live conference call.

About CTG

CTG is a leading provider of digital transformation solutions and services that accelerate clients’ project momentum and achievement of their desired IT and business outcomes. We have earned a reputation as a faster and more reliable, results-driven partner focused on improved data-driven decision making, meaningful business performance improvements, new and enhanced customer experiences, and continuous innovation. CTG has operations in North America, South America, Western Europe, and India. The Company regularly posts news and other important information online at www.ctg.com.

Reconciliation of GAAP to Non-GAAP Information

The Company has referenced non-GAAP information in this news release. The Company believes that the use of non-GAAP financial information provides useful information to investors and management to gain an overall understanding of its current financial performance and prospects. In addition, non-GAAP financial measures are used by management for forecasting, facilitating ongoing operating decisions, and measuring the Company’s overall performance. The Company believes that these non-GAAP measures align closely with its internal measurement processes and are reflective of the Company’s core operating results.

A reconciliation of GAAP to non-GAAP information is included in the financial tables below. The non-GAAP financial information is presented using a consistent methodology from quarter-to-quarter and year-to-year. These measures should be considered in addition to results prepared in accordance with GAAP. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP financial measures have limitations in that they do not reflect all amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP financial measures. As such, the non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and reconciliations between GAAP and non-GAAP financial measures included in this earnings release should be carefully evaluated.

Forward-Looking Statements

This document contains certain forward-looking statements concerning the Company's current expectations as to future growth, financial outlook, business strategy and performance expectations for 2021 and beyond and statements related to cost control, new business opportunities, financial performance, market demand, and other attributes of the Company, which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995. Generally, the words “anticipates”, “believes”, “expects”, “plans”, “may”, “will”, “would”, “should”, “seeks”, “estimates”, “project”, “predict”, “potential”, “currently”, “continue”, “intends”, “outlook”, and other similar words identify forward-looking statements. These statements are based upon the Company's current expectations and assumptions, a review of industry reports, current business conditions in the areas where the Company does business, feedback from existing and potential new clients, a review of current and proposed legislation and governmental regulations that may affect the Company and/or its clients, and other future events or circumstances. Actual results could differ materially from the outlook guidance, expectations, and other forward-looking statements as a result of a number of factors and risks, including among others, the effects of the COVID-19 pandemic and the regulatory, social and business responses thereto on the Company’s business, operations, employees, contractors and clients, the availability to the Company of qualified professional staff, domestic and foreign industry competition for clients and talent, increased bargaining power of large clients, the Company's ability to protect confidential client data, the partial or complete loss of the revenue the Company generates from International Business Machines Corporation (IBM), the ability to integrate businesses when acquired and retain their clients while achieving cost reduction targets, the uncertainty of clients' implementations of cost reduction projects, the effect of healthcare reform and initiatives, the mix of work between solutions and staffing, currency exchange risks, risks associated with operating in foreign jurisdictions, renegotiations, nullification, or breaches of contracts with clients, vendors, subcontractors or other parties, the change in valuation of capitalized software balances, the impact of current and future laws and government regulation, as well as repeal or modification of such, affecting the information technology (IT) solutions and staffing industry, taxes and the Company's operations in particular, industry and economic conditions, including fluctuations in demand for IT services, consolidation among the Company's competitors or clients, the need to supplement or change our IT services in response to new offerings in the industry or changes in client requirements for IT products and solutions, actions of activist shareholders, and other factors that involve risk and uncertainty including those listed in the Company's reports filed with the Securities and Exchange Commission. Such forward-looking statements should be read in conjunction with the Company's disclosures set forth in the Company's Form 10-K for the year ended December 31, 2020, including the uncertainties described in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and other reports, including but not limited to subsequent quarterly reports on Form 10-Q, that may be filed from time to time with the Securities and Exchange Commission and may be obtained through the Securities and Exchange Commission's Electronic Data Gathering and Analysis Retrieval System ("EDGAR") at www.sec.gov.The Company assumes no obligation to update the forward-looking information contained in this release.

Investors and Media:
John M. Laubacker, Chief Financial Officer
+1 716 887 7368


COMPUTER TASK GROUP, INCORPORATED (CTG)
Condensed Consolidated Statements of Income
(Unaudited)
(amounts in thousands except per share data)

   For the Quarter Ended For the Three Quarters Ended
   October 1, September 25,  October 1, September 25,
   2021
 2020
 2021
 2020
              
Revenue $90,603  $88,648  $279,896  $264,743 
Cost of services 70,313   69,101   218,460   209,412 
Gross profit  20,290   19,547   61,436   55,331 
Selling, general and admin. expenses 17,588   17,723   53,835   49,526 
Operating income 2,702   1,824   7,601   5,805 
Non-taxable life insurance gain -   574   -   963 
Gain on sale of building -   -   -   824 
Other expense, net (542)  (240)  (948)  (436)
Income before income taxes 2,160   2,158   6,653   7,156 
Provision (benefit) for income taxes 488   (673)  1,640   1,422 
Net income $1,672  $2,831  $5,013  $5,734 
              
Net income per share:           
 Basic $0.12  $0.21  $0.36  $0.42 
 Diluted $0.11  $0.20  $0.34  $0.40 
              
Weighted average shares outstanding:          
 Basic  14,011   13,655   13,850   13,603 
 Diluted  14,939   14,401   14,951   14,334 


COMPUTER TASK GROUP, INCORPORATED (CTG)
Condensed Consolidated Balance Sheets
(Unaudited)
(amounts in thousands)

   October 1, December 31, September 25,
   2021 2020 2020
Current Assets:        
 Cash and cash equivalents$31,028 $32,865 $33,412
 Accounts receivable, net 81,588  76,892  74,907
 Other current assets 4,372  3,381  3,264
Total current assets 116,988  113,138  111,583
           
 Property and equipment, net 5,253  5,515  5,573
 Operating lease right-of-use assets 23,131  22,116  20,616
 Cash surrender value 3,988  3,587  3,533
 Acquired intangibles, net 7,713  9,097  9,001
 Goodwill  20,101  21,275  20,200
 Other assets 2,813  1,525  1,162
           
Total Assets $179,987 $176,253 $171,668
           
Current Liabilities:        
 Accounts payable$11,869 $18,784 $15,045
 Accrued compensation 28,678  21,968  24,279
 Operating lease liabilities 6,637  6,427  6,030
 Other current liabilities 13,165  13,966  10,285
Total current liabilities 60,349  61,145  55,639
           
 Long-term debt -  -  6,000
 Operating lease liabilities 16,408  15,564  14,527
 Other liabilities 18,772  20,036  19,798
 Shareholders' equity 84,458  79,508  75,704
           
Total Liabilities and Shareholders' Equity$179,987 $176,253 $171,668
           


COMPUTER TASK GROUP, INCORPORATED (CTG)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(amounts in thousands)

   For the Three Quarters Ended
   October 1, September 25,
   2021
 2020
        
Net income $5,013  $5,734 
Depreciation and amortization expense 2,451   2,576 
Equity-based compensation expense 1,974   1,805 
Other operating items  (7,205)  15,344 
Net cash provided by operating activities 2,233   25,459 
Net cash used in investing activities (1,978)  (3,959)
Net cash provided by (used in) financing activities (1,175)  282 
Effect of exchange rates on cash and cash equivalents (917)  849 
Net increase (decrease) in cash and cash equivalents (1,837)  22,631 
Cash and cash equivalents at beginning of period 32,865   10,781 
Cash and cash equivalents at end of period$31,028  $33,412 
        


COMPUTER TASK GROUP, INCORPORATED (CTG)
Supplemental Financial Information
(Unaudited)

            Twelve
            Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
   2020   2020   2021   2021   2021   2021 
Revenue (in millions)            
Revenue $88.648  $101.348  $97.129  $92.164  $90.603  $381.244 
Foreign Currency Impact $1.849  $3.088  $3.981  $3.921  $0.453  $11.443 
             
Revenue By Geography            
North America  54.9%   55.2%   51.0%   51.0%   55.5%   53.2% 
Europe  45.1%   44.8%   49.0%   49.0%   44.5%   46.8% 
Total  100.0%   100.0%   100.0%   100.0%   100.0%   100.0% 
             
Revenue by Vertical Market            
Technology Service Providers  31%   31%   31%   29%   28%   30% 
Financial Services  16%   17%   17%   17%   18%   17% 
Healthcare  15%   18%   15%   15%   18%   16% 
Manufacturing  13%   12%   12%   13%   12%   12% 
Energy  6%   5%   6%   6%   5%   6% 
General Markets  19%   17%   19%   20%   19%   19% 
Total  100%   100%   100%   100%   100%   100% 
             
Revenue by Service (in millions)           
Solutions $37.006  $49.107  $43.082  $41.220  $41.340  $174.749 
Percentage of revenue  41.7%   48.5%   44.4%   44.7%   45.6%   45.8% 
             
Staffing $51.642  $52.241  $54.047  $50.944  $49.263  $206.495 
Percentage of revenue  58.3%   51.5%   55.6%   55.3%   54.4%   54.2% 
             
Total $88.648  $101.348  $97.129  $92.164  $90.603  $381.244 
             
Gross Profit (in millions)            
Gross Profit - Solutions $12.316  $15.493  $12.992  $13.260  $13.137  $54.882 
Gross Profit Margin - Solutions  33.3%   31.5%   30.2%   32.2%   31.8%   31.4% 
             
Gross Profit - Staffing $7.231  $6.134  $7.775  $7.119  $7.153  $28.181 
Gross Profit Margin - Staffing  14.0%   11.7%   14.4%   14.0%   14.5%   13.6% 
             
Gross Profit $19.547  $21.627  $20.767  $20.379  $20.290  $83.063 
Gross Profit Margin  22.1%   21.3%   21.4%   22.1%   22.4%   21.8% 
             
Operating Margins            
GAAP Operating Margin  2.1%   3.3%   2.2%   3.0%   3.0%   2.9% 
Non-GAAP Operating Margin  2.7%   3.5%   2.8%   3.2%   3.3%   3.2% 
             
Other Information (in millions except Billable Days and EPS)        
Billable Days  63   67   65   64   63   259 
Net Income $2.831   $1.905   $1.508   $1.833   $1.672  $6.918 
GAAP Diluted EPS* $0.20   $0.13   $0.10   $0.12   $0.11  $0.46 
Non-GAAP Diluted EPS* $0.18   $0.14   $0.13   $0.13   $0.13  $0.53 
Adjusted EBITDA $3.3   $4.9   $3.7   $4.1   $3.7  $16.5 
             
*Third quarter 2020 GAAP and non-GAAP Diluted EPS includes $0.08 tax benefit from a change in legislation  
             
Balance Sheet Information (in millions except DSO)        
Cash less Debt, Net $27.4  $32.9  $33.5  $29.2  $31.0   
Working Capital $55.9  $52.0  $53.3  $54.5  $56.6   
DSO  77   74   71   81   82   
             


COMPUTER TASK GROUP, INCORPORATED (CTG)
(Unaudited)

In the 2021 first quarter, the Company made minor modifications to its definition of Solutions business. In order to provide consistent comparisons, Solutions revenue and Solutions gross profit margins presented in this release have been recast using the new definition for all periods presented.

The non-GAAP information below excludes gains from non-taxable life insurance, costs associated with rebranding and certain acquisition-related expenses. The acquisition-related expenses consist of amortization of intangible assets and changes in the value of earn-out payments upon the achievement of certain financial targets from the Company’s recent acquisitions.

Reconciliation of GAAP to non-GAAP Operating Income

            Twelve Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
(in millions)  2020  2020  2021  2021  2021  2021
GAAP Operating Income $ 1.824 $ 3.325 $ 2.098 $ 2.801 $ 2.702 $ 10.926
Acquisition-related expenses  0.526  0.256  0.395  0.165  0.280  1.096
Rebranding expenses  -  -  0.249  -  -  0.249
Non-GAAP Operating Income $ 2.350 $ 3.581 $ 2.742 $ 2.966 $ 2.982 $ 12.271
             


Reconciliation of GAAP to non-GAAP Operating Margin

            Twelve Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
  2020
 2020
 2021
 2021
 2021
  2021
GAAP Operating Margin 2.1% 3.3% 2.2% 3.0% 3.0% 2.9%
Acquisition-related expenses 0.6% 0.2% 0.4% 0.2% 0.3% 0.2%
Rebranding expenses -  -  0.2% -  -  0.1%
Non-GAAP Operating Margin2.7% 3.5% 2.8% 3.2% 3.3% 3.2%
             


Reconciliation of GAAP to non-GAAP Net Income

            Twelve Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
(in millions)  2020   2020  2021  2021  2021  2021
GAAP Net Income* $ 2.831  $ 1.905 $ 1.508 $ 1.833 $ 1.672 $ 6.918
Acquisition-related expenses  0.311   0.139  0.306  0.119  0.216  0.780
Non-taxable life insurance gain (0.574)  -  -  -  -  -
Rebranding expenses  -   -  0.192  -  -  0.192
Non-GAAP Net Income* $ 2.568  $ 2.044 $ 2.006 $ 1.952 $ 1.888 $ 7.890
             

*GAAP and non-GAAP Net Income in the 2020 third quarter includes a $1.1 million tax benefit from a change in legislation


COMPUTER TASK GROUP, INCORPORATED (CTG)
(Unaudited)

Reconciliation of GAAP to non-GAAP Diluted Earnings per Share (EPS)

            Twelve Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
   2020   2020  2021  2021  2021  2021
GAAP Diluted EPS** $ 0.20  $ 0.13 $ 0.10 $ 0.12 $ 0.11 $ 0.46
Acquisition-related expenses  0.02   0.01  0.02  0.01  0.02  0.06
Non-taxable life insurance gain (0.04)  -  -  -  -  -
Rebranding expenses  -   -  0.01  -  -  0.01
Non-GAAP Diluted EPS** $ 0.18  $ 0.14 $ 0.13 $ 0.13 $ 0.13 $ 0.53
             

**GAAP and non-GAAP Diluted EPS in the 2020 third quarter includes a $0.08 tax benefit from a change in legislation


Reconciliation of Net Income to Adjusted EBITDA, which includes earnings before interest (including amortization of deferred debt financing costs), taxes, depreciation and amortization, equity-based compensation, rebranding expenses, non-taxable life insurance gain, and acquisition-related expenses.

            Twelve
            Months
  For the Quarter Ended Ended
  Sept. Dec.  Mar. Jun. Sept. Sept.
(in millions)  2020   2020   2021  2021   2021  2021 
Net Income*** $ 2.831  $ 1.905  $ 1.508 $ 1.833  $ 1.672 $ 6.918 
Taxes  (0.673)  1.600   0.440  0.712   0.488  3.240 
Interest  0.087   0.065   0.036  0.161   0.112  0.374 
Depreciation and amortization  0.935   0.733   0.854  0.831   0.766  3.184 
Equity-based compensation expense  0.656   0.678   0.590  0.682   0.702  2.652 
Non-taxable life insurance gain  (0.574)  (0.024)  -  -   -  (0.024)
Other  0.070   (0.022)  0.297  (0.123)  0.007  0.159 
   Adjusted EBITDA $ 3.332  $ 4.935  $ 3.725 $ 4.096  $ 3.747 $ 16.503 
             

*** Net Income in the 2020 third quarter includes a $1.1 million tax benefit from a change in legislation

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