HOUSTON, March 31, 2025 (GLOBE NEWSWIRE) — Battalion Oil Corporation (NYSE American: BATL, “Battalion” or the “Company”) today announced financial and operating results for the fourth quarter of 2024.
Key Highlights
Completed the refinancing of our term loan on favorable terms resulting in an increase in liquidityGenerated full-year sales volumes of 12,667 barrels of oil equivalent per day (“Boe/d”) (51% oil)Continued to lower capex per well, outperforming AFE estimatesAGI facility online and treated 1.8 Bcf for the fourth quarter of 2024Spud two additional wells in Monument Draw in December to commence 2025 six-well activity planYear-end 2024 reserves of approximately 64.9 million barrels of oil equivalent (“MMBoe”) with a standardized measure of discounted future net cash flows of approximately $447.7 millionTerminated the previously announced Merger Agreement with Fury
Management Comments
The Company concluded its 2024 six-well campaign ahead of planned timing and under budget on each pad. Final well capital remains under $950 per lateral foot. The completed pad wells are producing ahead of type curve with the newest pad averaging over 811 Boe/d across the initial 120 days online, the second pad exceeding 747 Boe/d across the initial 275 days online and the first pad exceeding 1,085 Boe/d across 404 days on production. In December 2024, the Company also commenced drilling operations in Monument Draw as part of its 2025 six-well activity plan. As of the date of this release, the Company has drilled four of these wells in Monument Draw and has commenced completion operations on the first two wells. All wells are ahead of plan and under budget. The final two wells are permitted in the Company’s West Quito asset area with additional permits and drilling pads being built in Hackberry Draw.
During the fourth quarter 2024, the acid gas injection (“AGI”) facility treated approximately 20 MMcf/d average and returned approximately 16 MMcf/d of sweet gas to the Company for sales to its midstream partner. To date, the AGI facility has processed more than 6.9 Bcf of sour gas and allowed the Company to realize substantial savings compared to treating alternatives.
Results of Operations
Average daily net production and total operating revenue during the fourth quarter of 2024 were 12,750 Boe/d (55% oil) and $49.7 million, respectively, as compared to production and revenue of 12,022 Boe/d (46% oil) and $47.2 million, respectively, during the fourth quarter of 2023. The increase in revenues in the fourth quarter of 2024 as compared to the fourth quarter of 2023 is primarily attributable to an approximate 728 Boe/d increase in average daily production partially offset by a $0.22 decrease in average realized prices (excluding the impact of hedges). Excluding the impact of hedges, Battalion realized 96.9% of the average NYMEX oil price during the fourth quarter of 2024. Realized hedge gains totaled approximately less than $0.1 million during the fourth quarter of 2024.
Lease operating and workover expense was $11.26 per Boe in the fourth quarter of 2024 versus $11.87 per Boe in the fourth quarter of 2023. The decrease in lease operating and workover expense per Boe year-over-year is primarily a result of the increase in average daily production. Gathering and other expenses were $10.45 per Boe in the fourth quarter of 2024 versus $13.31 per Boe in the fourth quarter of 2023. The decrease in gathering and other expenses per Boe is primarily related to the start-up of the AGI facility and lower treating fees associated compared to the Valkyrie (liquid redox) plant. General and administrative expenses were $6.04 per Boe in the fourth quarter of 2024 compared to $4.93 per Boe in the fourth quarter of 2023. The increase in general and administrative expense is primarily attributable to an increase in audit, legal and transaction costs associated with the terminated merger with Fury Resources. Excluding non-recurring charges, general and administrative expenses would have been $3.22 per Boe in the fourth quarter of 2024 compared to $3.78 per Boe in the fourth quarter of 2023.
For the fourth quarter of 2024, the Company reported a net loss available to common stockholders of $30.9 million and a net loss of $1.88 per share available to common stockholders. After adjusting for selected items, the Company reported an adjusted diluted net loss available to common stockholders for the fourth quarter of 2024 of $0.7 million or an adjusted diluted net loss of $0.04 per common share (see Reconciliation for additional information). Adjusted EBITDA during the quarter ended December 31, 2024 was $18.0 million as compared to $10.0 million during the quarter ended December 31, 2023 (see Adjusted EBITDA Reconciliation table for additional information).
Liquidity and Balance Sheet
As of December 31, 2024, the Company had $162.1 million of indebtedness outstanding. Total liquidity on December 31, 2024, made up of cash and cash equivalents, was $19.7 million.
On January 9, 2025, the Company incurred incremental term loans in the aggregate principal amount of $63.0 million, resulting in a net increase in liquidity of $61.3 million.
For further discussion on our liquidity and balance sheet, as well as recent developments, refer to Management’s Discussion and Analysis and Risk Factors in the Company’s Form 10-K.
Merger Agreement with Fury Resources
Subsequent to several amendments to the previously disclosed Agreement and Plan of Merger, dated December 14, 2023 (as amended, the “Merger Agreement”) and upon the failure of Fury Resources, Inc. to meet the funding and closing requirements of the Merger Agreement, the Company terminated the Merger.
Refinanced Term Loan Agreement
On December 26, 2024, the Company entered into the Second Amended and Restated Senior Secured Credit Agreement with Fortress Credit Corp., as administrative agent, and certain other financial institutions, as lenders (the “2024 Term Loan Agreement”). Pursuant to the 2024 Term Loan Agreement, the Company entered into an initial term loan facility in the aggregate principal amount of $162.0 million, funded on December 26, 2024 and an incremental term loan facility in the aggregate principal amount of up to $63.0 million. On January 9, 2025, the Company entered into the First Amendment to the 2024 Term Loan Agreement and incurred $63.0 million of Incremental Term Loans (the “2024 Amended Term Loan Agreement”), resulting in total outstanding borrowings of $225.0 million.
The maturity date of the 2024 Amended Term Loan Agreement is December 26, 2028.
All obligations under the Company’s existing term loan agreement were refunded, refinanced and repaid in full by the loans under the 2024 Term Loan Agreement as the net proceeds of the 2024 Term Loan Agreement were used to repay all outstanding indebtedness under the existing term loan agreement in an aggregate amount of approximately $152.1 million, including accrued and unpaid interest, and to pay related fees and expenses related to the new credit agreement.
The Company is required to make scheduled quarterly amortization payments in an aggregate principal amount equal to 2.50% of the aggregate principal amount of the loans outstanding commencing with the fiscal quarter ending June 30, 2025. Under the 2024 Amended Term Loan Agreement, the Company must make scheduled amortization payments in the aggregate amount of $16.9 million in 2025 and $22.5 million in 2026.
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not strictly historical statements constitute forward-looking statements. Forward-looking statements include, among others, statements about anticipated production, liquidity, capital spending, drilling and completion plans, and forward guidance. Forward-looking statements may often, but not always, be identified by the use of such words such as “expects”, “believes”, “intends”, “anticipates”, “plans”, “estimates”, “projects,” “potential”, “possible”, or “probable” or statements that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved. Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and other filings submitted by the Company to the SEC, copies of which may be obtained from the SEC’s website at www.sec.gov or through the Company’s website at www.battalionoil.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company’s expectations.
About Battalion
Battalion Oil Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.
Contact
Matthew B. Steele
Chief Executive Officer & Principal Financial Officer
832-538-0300
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts) Three Months Ended Years Ended December 31, December 31, 2024 2023 2024 2023 Operating revenues: Oil, natural gas and natural gas liquids sales: Oil $43,934 $39,562 $174,607 $183,634 Natural gas 447 2,429 (2,213) 11,057 Natural gas liquids 5,118 4,921 20,822 23,814 Total oil, natural gas and natural gas liquids sales 49,499 46,912 193,216 218,505 Other 154 330 677 2,257 Total operating revenues 49,653 47,242 193,893 220,762 Operating expenses: Production: Lease operating 11,082 10,656 45,275 44,864 Workover and other 2,127 2,480 5,215 7,149 Taxes other than income 2,366 2,266 11,238 11,943 Gathering and other 12,263 14,718 54,117 63,575 General and administrative 7,091 5,453 18,356 19,025 Depletion, depreciation and accretion 14,155 12,337 52,926 56,624 Impairment of contract asset 18,511 — 18,511 — Total operating expenses 67,595 47,910 205,638 203,180 (Loss) income from operations (17,942) (668) (11,745) 17,582 Other income (expenses): Net (loss) gain on derivative contracts (1,624) 42,430 2,308 12,689 Interest expense and other 4,853 (9,074) (14,956) (33,319)Loss on extinguishment of debt (7,489) — (7,489) — Total other income expenses (4,260) 33,356 (20,137) (20,630)(Loss) income before income taxes (22,202) 32,688 (31,882) (3,048)Income tax benefit (provision) — — — — Net (loss) income $(22,202) $32,688 $(31,882) $(3,048)Preferred dividends (8,679) (5,695) (32,219) (12,047)Net (loss) income available to common stockholders $(30,881) $26,993 $(64,101) $(15,095) Net (loss) income per share of common stock: Basic $(1.88) $1.64 $(3.90) $(0.92)Diluted $(1.88) $1.63 $(3.90) $(0.92)Weighted average common shares outstanding: Basic 16,457 16,457 16,457 16,441 Diluted 16,457 16,517 16,457 16,441
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share amounts) December 31, 2024 December 31, 2023Current assets: Cash and cash equivalents $19,712 $57,529 Accounts receivable, net 26,298 23,021 Assets from derivative contracts 6,969 8,992 Restricted cash 91 90 Prepaids and other 982 907 Total current assets 54,052 90,539 Oil and natural gas properties (full cost method): Evaluated 816,186 755,482 Unevaluated 49,091 58,909 Gross oil and natural gas properties 865,277 814,391 Less – accumulated depletion (497,272) (445,975)Net oil and natural gas properties 368,005 368,416 Other operating property and equipment: Other operating property and equipment 4,663 4,640 Less – accumulated depreciation (2,455) (1,817)Net other operating property and equipment 2,208 2,823 Other noncurrent assets: Assets from derivative contracts 4,052 4,877 Operating lease right of use assets 453 1,027 Other assets 2,278 17,656 Total assets $431,048 $485,338 Current liabilities: Accounts payable and accrued liabilities $52,682 $66,525 Liabilities from derivative contracts 12,330 17,191 Current portion of long-term debt 12,246 50,106 Operating lease liabilities 406 594 Total current liabilities 77,664 134,416 Long-term debt, net 145,535 140,276 Other noncurrent liabilities: Liabilities from derivative contracts 6,954 16,058 Asset retirement obligations 19,156 17,458 Operating lease liabilities 84 490 Other — 2,084 Commitments and contingencies Temporary equity: Redeemable convertible preferred stock: 138,000 shares and 98,000 shares 177,535 106,535 of $0.0001 par value authorized, issued and outstanding as of December 31, 2024 and 2023, respectively Stockholders’ equity: Common stock: 100,000,000 shares of $0.0001 par value authorized; 16,456,563 shares issued and outstanding as of December 31, 2024 and 2023 2 2 Additional paid-in capital 288,993 321,012 Accumulated deficit (284,875) (252,993)Total stockholders’ equity 4,120 68,021 Total liabilities and stockholders’ equity $431,048 $485,338
BATTALION OIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands) Three Months Ended Years Ended December 31, December 31, 2024 2023 2024 2023 Cash flows from operating activities: Net income (loss) $(22,202) $32,688 $(31,882) $(3,048)Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depletion, depreciation and accretion 14,155 12,337 52,926 56,624 Impairment of contract asset 18,511 — 18,511 — Stock-based compensation, net 12 161 152 (1,070)Unrealized gain on derivative contracts 1,648 (45,403) (11,116) (21,934)Amortization/accretion of financing related costs 1,469 1,826 6,418 7,615 Loss (gain) on extinguishment of debt 7,489 — 7,489 — Accrued settlements on derivative contracts 1,505 (2,587) 403 259 Change in fair value of embedded derivative liability (761) 530 (2,084) (2,052)Other expense (income) 46 214 324 358 Cash flow from operations before changes in working capital 21,872 (234) 41,141 36,752 Changes in working capital (15,186) 6,758 (5,786) (19,163)Net cash provided by operating activities 6,686 6,524 35,355 17,589 Cash flows from investing activities: Oil and natural gas capital expenditures (12,847) (16,196) (64,625) (46,288)Proceeds received from sales of oil and natural gas assets — 3,740 7,015 4,929 Acquisition of oil and natural gas properties — — (47) — Other operating property and equipment capital expenditures (4) (17) (23) (153)Contract asset — (3,705) (7,737) (10,308)Other (6) 1,439 (26) (25)Net cash used in investing activities (12,857) (14,739) (65,443) (51,845) Cash flows from financing activities: Proceeds from borrowings 162,000 — 162,000 – Repayments of borrowings (147,726) (10,027) (200,109) (35,093)Payment of deferred financing costs (8,225) — (8,400) — Proceeds from issuance of preferred stock — 33,182 38,781 94,607 Merger deposit (10,000) — — — Other — (1) — (455)Net cash (used in) provided by financing activities (3,951) 23,154 (7,728) 59,059 Net (decrease) increase in cash, cash equivalents and restricted cash (10,122) 14,939 (37,816) 24,803 Cash, cash equivalents and restricted cash at beginning of period 29,925 42,680 57,619 32,816 Cash, cash equivalents and restricted cash at end of period $19,803 $57,619 $19,803 $57,619
BATTALION OIL CORPORATION
SELECTED OPERATING DATA (Unaudited) Three Months Ended
December 31, Years Ended
December 31, 2024 2023 2024 2023 Production volumes: Crude oil (MBbls) 643 510 2,363 2,415 Natural gas (MMcf) 1,861 2,102 7,814 8,718 Natural gas liquids (MBbls) 220 246 971 1,163 Total (MBoe) 1,173 1,106 4,636 5,031 Average daily production (Boe/d) 12,750 12,022 12,667 13,784 Average prices: Crude oil (per Bbl) $68.33 $77.57 $73.89 $76.04 Natural gas (per Mcf) 0.24 1.16 (0.28) 1.27 Natural gas liquids (per Bbl) 23.26 20.00 21.44 20.48 Total per Boe 42.20 42.42 41.68 43.43 Cash effect of derivative contracts: Crude oil (per Bbl) $(8.99) $(10.43) $(11.32) $(7.76)Natural gas (per Mcf) 3.12 1.12 2.30 1.09 Natural gas liquids (per Bbl) — — — — Total per Boe 0.02 (2.69) (1.90) (1.84) Average prices computed after cash effect of settlement of derivative contracts: Crude oil (per Bbl) $59.34 $67.14 $62.57 $68.28 Natural gas (per Mcf) 3.36 2.28 2.02 2.36 Natural gas liquids (per Bbl) 23.26 20.00 21.44 20.48 Total per Boe 42.22 39.73 39.78 41.59 Average cost per Boe: Production: Lease operating $9.45 $9.63 $9.77 $8.92 Workover and other 1.81 2.24 1.12 1.42 Taxes other than income 2.02 2.05 2.42 2.37 Gathering and other 10.45 13.31 11.67 12.64 General and administrative, as adjusted (1) 3.21 3.63 2.72 3.39 Depletion 11.71 10.80 11.06 10.97 (1) Represents general and administrative costs per Boe, adjusted for items noted in the reconciliation below: General and administrative: General and administrative, as reported $6.04 $4.93 $3.96 $3.78 Stock-based compensation: Non-cash (0.01) (0.15) (0.03) 0.21 Non-recurring (charges) credits and other: Cash (2.82) (1.15) (1.21) (0.60)General and administrative, as adjusted(2) $3.21 $3.63 $2.72 $3.39 Total operating costs, as reported $29.77 $32.16 $28.94 $29.13 Total adjusting items (2.83) (1.30) (1.24) (0.39)Total operating costs, as adjusted(3) $26.94 $30.86 $27.70 $28.74
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(2) General and administrative, as adjusted, is a non-GAAP measure that excludes non-cash stock-based compensation charges relating to equity awards under our incentive stock plan, as well as other cash charges associated with non-recurring charges and other. The Company believes that it is useful to understand the effects that these charges have on general and administrative expenses and total operating costs and that exclusion of such charges is useful for comparison to prior periods.
(3) Represents lease operating expense, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in the reconciliation above.
BATTALION OIL CORPORATION
RECONCILIATION (Unaudited)
(In thousands, except per share amounts) Three Months Ended Years Ended December 31, December 31, 2024 2023 2024 2023 As Reported: Net (loss) income available to common stockholders – diluted (1) $(30,881) $26,993 $(64,101) $(15,095) Impact of Selected Items: Unrealized loss (gain) on derivatives contracts: Crude oil $96 $(38,604) $(10,371) $(22,601)Natural gas 1,552 (6,799) (745) 667 Total mark-to-market non-cash charge 1,648 (45,403) (11,116) (21,934)Impairment of contract asset 18,511 — 18,511 — Loss (gain) on extinguishment of debt 7,489 — 7,489 — Change in fair value of embedded derivative liability (761) 529 (2,084) (2,053)Non-recurring charges (credits) 3,310 1,268 5,609 3,042 Selected items, before income taxes 30,197 (43,606) 18,409 (20,945)Income tax effect of selected items — — — — Selected items, net of tax $30,197 $(43,606) $18,409 $(20,945) Net (loss) available to common stockholders, as adjusted (2) $(684) $(16,613) $(45,692) $(36,040) Diluted net (loss) income per common share, as reported $(1.88) $1.63 $(3.90) $(0.92)Impact of selected items 1.84 (2.65) 1.12 (1.29)Diluted net (loss) per common share, excluding selected items (2)(3) $(0.04) $(1.02) $(2.78) $(2.21) Net cash provided by operating activities $6,686 $6,524 $35,355 $17,589 Changes in working capital 15,186 (6,758) 5,786 19,163 Cash flow from operations before changes in working capital 21,872 (234) 41,141 36,752 Cash components of selected items 2,611 4,707 6,012 3,301 Income tax effect of selected items — — — — Cash flows from operations before changes in working capital, adjusted for selected items (1) $24,483 $4,473 $47,153 $40,053
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(1) Amount reflects net (loss) income available to common stockholders on a diluted basis for earnings per share purposes as calculated using the two-class method of computing earnings per share which is further described in Note 15, Earnings Per Share in our Form 10-K for the year ended December 31, 2024.
(2) Net (loss) income per share excluding selected items and cash flows from operations before changes in working capital adjusted for selected items are non-GAAP measures presented based on management’s belief that they will enable a user of the financial information to understand the impact of these items on reported results. These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flows from operations, as defined by GAAP. These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion’s performance.
(3) The impact of selected items for the three and twelve months ended December 31, 2024 were calculated based upon weighted average diluted shares of 16.5 million, due to the net (loss) available to common stockholders, excluding selected items. The impact of selected items for the three and twelve months ended December 31, 2023 were calculated based upon weighted average diluted shares of 16.5 million and 16.4 million shares, respectively, due to the net (loss) available to common stockholders, excluding selected items.
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands) Three Months Ended
December 31, Years Ended
December 31, 2024 2023 2024 2023 Net income (loss), as reported $(22,202) $32,688 $(31,882) $(3,048)Impact of adjusting items: Interest expense 6,135 8,917 29,009 36,511 Depletion, depreciation and accretion 14,155 12,337 52,926 56,624 Impairment of contract asset 18,511 — 18,511 — Stock-based compensation 12 161 152 (1,070)Interest income (278) (525) (2,122) (1,243)Loss (gain) on extinguishment of debt 7,489 — 7,489 — Unrealized loss (gain) on derivatives contracts 1,648 (45,403) (11,116) (21,934)Change in fair value of embedded derivative liability (761) 529 (2,084) (2,053)Merger Termination Payment (10,000) — (10,000) — Non-recurring charges (credits) and other 3,310 1,268 5,609 2,728 Adjusted EBITDA(1) $18,019 $9,972 $56,492 $66,515
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(1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management’s belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net (loss) income. This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion’s performance.
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands) Three Months Three Months Three Months Three Months Ended Ended Ended Ended December 31,
2024 September 30,
2024 June 30,
2024 March 31,
2024 Net income (loss), as reported $(22,202) $21,628 $(105) $(31,203)Impact of adjusting items: Interest expense 6,135 6,873 7,610 8,391 Depletion, depreciation and accretion 14,155 12,533 13,213 13,025 Impairment of contract asset 18,511 — — — Stock-based compensation 12 5 36 99 Interest income (278) (509) (634) (701)Loss (gain) on extinguishment of debt 7,489 — — — Unrealized loss (gain) on derivatives contracts 1,648 (28,091) (4,434) 19,761 Change in fair value of embedded derivative liability (761) 41 (436) (928)Merger Termination Payment (10,000) — — — Non-recurring charges (credits) and other 3,310 978 384 937 Adjusted EBITDA(1) $18,019 $13,458 $15,634 $9,381 Adjusted LTM EBITDA(1) $56,492
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(1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management’s belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net (loss) income. This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion’s performance.
BATTALION OIL CORPORATION
ADJUSTED EBITDA RECONCILIATION (Unaudited)
(In thousands) Three Months Three Months Three Months Three Months Ended Ended Ended Ended December 31,
2023 September 30,
2023 June 30,
2023 March 31,
2023 Net income (loss), as reported $32,688 $(53,799) $(4,748) $22,811 Impact of adjusting items: Interest expense 8,917 9,219 9,366 9,009 Depletion, depreciation and accretion 12,337 13,426 14,713 16,148 Stock-based compensation 161 (686) (772) 227 Interest income (525) (293) (234) (191)Unrealized loss (gain) on derivatives contracts (45,403) 46,805 (2,332) (21,004)Change in fair value of embedded derivative liability 529 (1,878) 358 (1,062)Non-recurring charges (credits) and other 1,268 831 477 152 Adjusted EBITDA(1) $9,972 $13,625 $16,828 $26,090 Adjusted LTM EBITDA(1) $66,515
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(1) Adjusted EBITDA is a non-GAAP measure, which is presented based on management’s belief that it will enable a user of the financial information to understand the impact of these items on reported results. This financial measure is not a measure of financial performance under GAAP and should not be considered as an alternative to GAAP measures, including net income (loss). This financial measure may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Battalion’s performance.
