Three Months Ended

(in thousands)

March 31,
2019

June 30,
2019

September 30,
2019

December 31,
2019

Net income (loss)

$

152

$

(6,405)

$

(6,199)

$

(49,695)

Interest (income) expense, net

(144)

240

(24)

(5)

Income tax expense (benefit)

155

(417)

(182)

1,577

Depreciation and amortization

4,749

4,573

4,798

4,428

EBITDA

4,912

(2,009)

(1,607)

(43,695)

Loss on foreign currency transactions

195

154

514

224

Stock-based compensation

2,564

2,752

3,387

2,368

GSA sales adjustment ⁽¹⁾

35

5,805

—

—

Advisory fees for GSA Matter ⁽²⁾

591

653

—

—

Inventory reserve charge ⁽³⁾

—

—

—

12,800

Product recall charge ⁽⁴⁾

—

—

—

1,328

Executive severance costs

—

—

1,217

215

Executive sign-on bonuses & relocation costs

—

575

270

—

Strategic impairments and write-offs ⁽⁵⁾

—

—

—

35,213

Contingent consideration fair value adjustment

—

—

—

(926)

Present4D impairment ⁽⁶⁾

—

1,535

—

617

Adjusted EBITDA

$

8,297

$

9,465

$

3,781

$

8,144

Adjusted EBITDA margin ⁽⁷⁾

8.9

%

9.5

%

4.2

%

7.8

%

(1)

Late in the fourth quarter of 2018, during an internal review we preliminarily determined that certain of our pricing practices may have resulted in the U.S. Government being overcharged under our General Services Administration ("GSA") Federal Supply Schedule contracts (the "Contracts") (the "GSA Matter"). In fourth quarter 2018, we reduced our total sales by an estimated cumulative adjustment of $4.8 million related to the GSA Matter. We also retained outside legal counsel and forensic accountants to conduct a comprehensive review of our pricing and other practices under the Contracts (the "Review"). On July 15, 2019, we submitted a report to the GSA and its Office of Inspector General setting forth the findings of the Review. Based on the results of the Review, in second quarter 2019 we reduced our total sales by an incremental $5.8 million (the "GSA sales adjustment") and recorded imputed interest expense of $0.1 million and $0.8 million related to the GSA Matter for the three and twelve months ended December 31, 2019, respectively.

(2)

In connection with the GSA Matter, we retained outside legal counsel and forensic accountants to conduct the Review, which resulted in $1.2 million in advisory fees incurred during 2019.

(3)

During the fourth quarter of 2019, we recorded a charge of $12.8, million increasing our reserve for excess and obsolete inventory, based on our analysis of our inventory reserves in connection with our strategy to simplify our hardware product portfolio and cease selling certain products.   

(4)

During the fourth quarter of 2019, we accrued a recall charge for labor and parts related to a small portion of previously sold measurement devices that were outside the manufacturer's standard warranty due to safety concerns.  

(5)

Because the historical and projected future performance of certain of our recently acquired operations were lower than our expectations, and due to changes in our go forward strategy in connection with our new strategic plan, we incurred an impairment loss of $35.2 million during the fourth quarter of 2019, which included $21.2 million in goodwill, $10.5 million in intangible assets associated with recent acquisitions, $1.4 million in intangible assets related to capitalized patents and $2.1 million in other asset write-downs.

(6)

On April 27, 2018, we invested $1.8 million in present4D GmbH ("present4D"), a software solutions provider for professional virtual reality presentations and training environments, in the form of an equity capital contribution. In July 2019, we originated a $0.5 million note with present4D, which we may convert into additional equity in present4D at our discretion in the event of a default. As we no longer intend to provide future support to present4D or obtain the aforementioned additional share capital in the future and no longer intend to use the perpetual and royalty-free, non-exclusive, transferable and sublicensable license granted to us to use present4D's software, we wrote off the investment in, and our note receivable with, present4D and recognized a total loss of $2.2 million during the twelve months ended December 31, 2019, which is included in Other expense, net.

(7)

Calculated as Adjusted EBITDA as a percentage of Non-GAAP total sales, which adjusts for the GSA sales adjustment.