What costs were excluded from The Standardx's Adjusted EBITDA as a result of the revised definition?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
During the year ended December 31, 2024, we revised our definition of Adjusted EBITDA to exclude transaction and integration costs (see Note 1), and we recast prior-period results to provide comparability. The revised definition excludes integration costs, which were recognized in integration costs during the three months ended March 31, 2024 and transaction costs, which were recognized in general and administrative expenses during the three months ended March 31, 2024. Previously, only transaction costs recognized in gains on sales of real estate and other and other income (loss), net were excluded from Adjusted EBITDA. As transaction and integration costs may vary in frequency or magnitude, we believe the revised definition presents a more representative measure of our core operations, assists in the comparability of results, and provides information consistent with how our management evaluates operating performance.
Source: Item 1 — Financial Statements. (FDD pages 156–187)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, the company revised its definition of Adjusted EBITDA during the year ended December 31, 2024. The revised definition now excludes transaction and integration costs. This change was made to enhance the comparability of results and to provide a more representative measure of The Standardx's core operations, aligning with how management evaluates operating performance.
Specifically, the transaction costs that are now excluded were previously recognized in general and administrative expenses during the three months ended March 31, 2024. Integration costs, also now excluded, were recognized in integration costs during the same period. Previously, the only transaction costs excluded from Adjusted EBITDA were those recognized in gains on sales of real estate and other and other income (loss), net.
This revision means that prospective franchisees analyzing The Standardx's financial performance should be aware that the Adjusted EBITDA figures for periods before and after this revision are calculated differently. The exclusion of transaction and integration costs provides a clearer view of the company's ongoing operational profitability, as these costs are considered non-recurring and can vary significantly. Franchisees should focus on the consistency of the revised definition when comparing financial results over time to get an accurate understanding of The Standardx's financial health.