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Molecular Templates Announces Executive Leadership Changes

  • Dr. Gabriela Gruia to assume the role of interim Chief Medical Officer
  • Jason Kim to assume the role of President and Chief Financial Officer
  • Kristen Quigley to assume the role of Chief Operating Officer
  • Dr. Grace Kim to assume the role of Chief Strategy Officer and Head of IR

AUSTIN, Texas, Aug. 02, 2023 (GLOBE NEWSWIRE) — Molecular Templates, Inc. (Nasdaq: MTEM, “Molecular Templates,” or “MTEM”), a clinical-stage biopharmaceutical company developing novel therapeutics for oncology with potent differentiated mechanisms of action, today announced executive management changes to implement its next phase of development. Dr. Gabriela Gruia will assume the role of interim Chief Medical Officer to succeed Dr. Roger Waltzman, Jason Kim will assume the role of President and Chief Financial Officer, Kristen Quigley will assume the role of Chief Operating Officer, and Dr. Grace Kim will assume the role of Chief Strategy Officer and Head of Investor Relations. These appointments were made to better enable Molecular Templates to execute on its clinical and corporate objectives.

Dr. Gabriela Gruia joined Molecular Templates in 2022 as a Board Director for MTEM. She has over 25 years of experience in oncology drug development. Dr. Gruia previously served as Chief Development Officer at Ichnos Sciences. Prior to Ichnos Sciences, Dr. Gruia was Senior Vice President and Global Head of Regulatory Affairs for Novartis Oncology. Prior to that, she held oncology clinical research and development roles at Pfizer/Pharmacia, Aventis/Rhone Poulenc Rorer. Dr. Gruia earned a doctorate in medicine from Bucharest Medical School in Romania. She completed training in oncology and hematology at Rene Descartes University in Paris, France and a Masters in Breast Pathology and Mammography from the Rene Huguenin/Curie Institute Cancer Center in Paris, France.  The Company has initiated a search for a permanent Chief Medical Officer. Dr. Gruia will remain a Board Director for MTEM.

Jason Kim joined Molecular Templates in 2010 and serves as President and previous Chief Operating Officer. He also served as Molecular Templates’ President and Chief Financial Officer from February 2010 to August 2017. Previously, Mr. Kim led corporate development and strategic planning initiatives at OSI Pharmaceuticals and ImClone Systems. He served as an investment professional at Domain Associates and Safeguard Scientifics where he focused on venture and public investments in biotechnology. Mr. Kim holds a Master of Business Administration from The Wharton School and a Bachelor of Arts in Neuroscience from Wesleyan University.

Kristen Quigley joined Molecular Templates in 2017 and previously served as Senior Vice President of Clinical Operations. She has 27 years of clinical research experience, including 24 years in phase I-IV clinical trial and project management, and over 6 years in executive roles.  Kristen served in Vice President/ Senior Vice President of Clinical Operations roles at two biotech companies prior to joining Molecular Templates, she co-directed the Nordic region for a large global CRO, and she has successfully governed clinical development portfolios worth as much as $147M. Ms. Quigley holds a Bachelor of Arts in Psychology from Washington University in St. Louis.

Dr. Grace Kim joined Molecular Templates in 2022 with 20 years of experience driving investor strategy, corporate strategy, and business development. Previously, she led two biopharma advisories in Senior Vice President and Founder roles and served on matrixed leadership teams. Companies she worked with include BeiGene, BioMarin, Cullinan Oncology, Celularity, Aimmune (Nestlé), and others. Dr. Kim earned a doctorate in pharmacology from the University of Florida with post-doc immunology training and graduate studies at the University of Chicago. She is published in Nature Clinical Oncology and holds an adjunct faculty position at Columbia University.

“We thank Roger for all his hard work in advancing our compounds in the clinic. We are now at an exciting inflection point at MTEM. We have seen evidence of monotherapy activity during dose escalation with our ETBs and now look to define the rate of activity in dose expansion studies with these agents over the next 12 months. These management changes will help enable us to execute efficiently in the clinic and in our corporate goals,” said Eric Poma, PhD., Chief Executive and Chief Scientific Officer of Molecular Templates.

About Molecular Templates

Molecular Templates is a clinical-stage biopharmaceutical company focused on the discovery and development of targeted biologic therapeutics. Our proprietary drug platform technology, known as engineered toxin bodies, or ETBs, leverages the resident biology of a genetically engineered form of Shiga-like Toxin A subunit to create novel therapies with potent and differentiated mechanisms of action for cancer.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the “Act”). Molecular Templates disclaims any intent or obligation to update these forward-looking statements and claims the protection of the Act’s Safe Harbor for forward-looking statements. All statements, other than statements of historical facts, included in this press release, including, but not limited to those regarding strategy, inflection points, future operations, the Company’s ability to execute on its objectives, prospects, plans, future execution of corporate goals, and the skills and experiences of the newly appointed officers of Molecular Templates and expectations with respect to their future contributions to the Company and statements, evaluations and judgements regarding future clinical development of the Company’s product candidates, including any implication that results or observations in earlier clinical trials will be representative of results or observations in later clinical trials and the expected timing of such results. In addition, when or if used in this press release, the words “may,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and similar expressions and their variants, as they relate to Molecular Templates may identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors including, but not limited to the following: the continued availability of financing on commercially reasonable terms, whether Molecular Templates’ cash resources will be sufficient to fund its continuing operations; the results of MTEM’s ongoing clinical studies and its collaboration activities with BMS, the ability to effectively operate MTEM and retain key employees post-MTEM’s previously announced restructuring, the ability of MTEM to maintain the continued listing of its common stock on Nasdaq, and those risks identified under the heading “Risk Factors” in Molecular Templates’ filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and any subsequent reports filed with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Molecular Templates specifically disclaims any obligation to update any forward-looking statement, whether because of new information, future events or otherwise.

Contacts:

Grace Kim
[email protected]



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EVgo Announces Leadership Succession Plan

EVgo Announces Leadership Succession Plan

Cathy Zoi to Retire as CEO and from the Board of Directors, Effective in November 2023

Industry Veteran and Lead Independent Director, Badar Khan, to Become CEO

LOS ANGELES–(BUSINESS WIRE)–
EVgo Inc. (NASDAQ: EVGO) (“EVgo” or the “Company”), one of the nation’s largest public fast charging networks for electric vehicles (“EVs”), today announced that its Board of Directors has appointed Badar Khan to succeed Cathy Zoi as Chief Executive Officer, effective on or about November 9, 2023. Zoi will retire as CEO and from the Board following an impactful career with EVgo where she oversaw a 957% increase in quarterly revenue since the Company went public in 2021. To promote a smooth transition, Zoi will serve as an advisor to the Company and work closely with Khan through the end of 2023.

“Leading EVgo from a 50-person, private enterprise focused on a nascent EV sector, to a leader in charging solutions serving nearly 700,000 customers has been a highlight of my career,” said Zoi. “I set out to build a strong business yielding robust growth in charger deployments, network utilization, and company revenues, and as a team we have accomplished that. With the focus now being to build on that foundation to further scale EVgo to meet evolving fast charging demand, I believe that it is the right time to implement this leadership transition. I have been fortunate to know and work with Badar in his capacity as Lead Independent Director, and I’ve seen firsthand the breadth of his talents. I believe that Badar’s experience overseeing large, dynamic customer facing energy organizations aligns perfectly with the opportunity ahead of EVgo and that he is the right person to be our next CEO. I am delighted to continue working closely with Badar and my colleagues on the management team to promote a smooth transition. I am excited to see what is yet to come for EVgo.”

David Nanus, Chair of the Board of Directors of EVgo, stated, “Badar’s impressive accomplishments have established him as a respected leader who is well-suited to build upon Cathy’s successes. Having worked closely with Badar on the EVgo Board, I know that he possesses a holistic understanding of the dynamics of our business and knows what it takes to win in the marketplace. He has more than 25 years of experience in the energy sector, including overseeing the development of one of the largest EV infrastructure programs for utilities in the U.S., servicing more than 20 million customers and executing critical partnerships and acquisitions. With Badar at the helm of EVgo’s stellar leadership team and deep bench of executive talent, I am confident that this will be a smooth transition that will ultimately take EVgo to the next level.”

Nanus continued, “On behalf of the Board, I want to thank Cathy for her remarkable service and commitment, leading EVgo through its incredible transformation and rapid growth during the last half-decade. Throughout her accomplished tenure as CEO, EVgo has grown to become one of the nation’s largest public fast charging networks for electric vehicles. EVgo would not be the impressive company it is today without Cathy’s vision, dedication and stewardship. I speak on behalf of the Board and all of EVgo’s talented employees in wishing Cathy only the best.”

Khan commented, “I will be honored to succeed Cathy and take on the role of CEO and lead EVgo at this exciting time for our business and the industry. I greatly appreciate the work Cathy and our talented team have done. They have honed the elements of the flywheel that we believe will enable rapid electrification and sustained commercial success. Building on these achievements, I share Cathy’s excitement for EVgo’s future. As the sector continues to revolutionize the world at a rapid pace, I see tremendous opportunities ahead and believe we will continue to be a leader in the EV revolution. I am excited to work closely with EVgo’s talented management team and our incredible employees in an effort to capture those opportunities, drive growth, deliver for our customers and enhance shareholder value.”

Second Quarter 2023 Results

In a separate press release issued today, EVgo reported strong second quarter 2023 financial results. Management will host a conference call today at 5:00 p.m. ET / 2:00 p.m. PT to discuss EVgo’s results and other business highlights.

That press release, along with other investor materials, including a slide presentation and reconciliations of certain non-GAAP measures to their nearest GAAP measures, will also be available on investors.evgo.com.

About Badar Khan

A more than 25-year veteran of the energy sector, Badar Khan has served on the EVgo Board of Directors since 2022. He has also served as the Board’s Lead Independent Director, as Chair of the Board’s Compensation Committee and as a member of the Board’s Audit Committee and Nominating & Governance Committee. From 2017 to 2022, Khan worked for National Grid, one of the largest investor-owned utilities in the world. Most recently, he served as President of National Grid USA, overseeing the provision of energy and clean energy solutions to more than 20 million people across Massachusetts, New York and Rhode Island, and previously as President of National Grid Ventures. During his time at National Grid, Khan oversaw the regulatory approval for one of the largest “make ready” electric vehicle infrastructure programs for utilities in the U.S., the acquisition of an onshore solar and wind renewables development company, and the launch of one of the largest utility corporate venture capital funds in the U.S., with over 40 investments and partnerships in the energy and clean tech space. Prior to that, Khan spent 14 years at Centrica plc, where he was a member of the leadership team of its North American subsidiary, Direct Energy, including serving as CEO for four years. Under his leadership, Direct Energy experienced significant growth reaching revenue of more than $15 billion USD, serving over five million customers and becoming one of the largest and most innovative retail energy and services companies in North America through multiple acquisitions and more than a dozen partnerships with large and small technology companies. Earlier in his career, Khan was an officer of SmartEnergy, a private retail energy company in the U.S. and worked in management consulting with Deloitte Consulting in Boston and KPMG in London. Khan began his career with Jaguar Cars in the UK.

In addition to his role on the EVgo Board of Directors, Khan currently serves on the Board of Directors of CRH plc, a leading building materials business, on the advisory board of Zero Infinity Partners, an early-stage venture capital firm, and as Senior Advisor to Global Infrastructure Partners, one of the world’s largest independent infrastructure investors. Khan received a degree in engineering from Brunel University in London and an MBA from the Wharton School of the University of Pennsylvania.

About EVgo

EVgo (Nasdaq: EVGO) is a leader in charging solutions, building and operating the infrastructure and tools needed to expedite the mass adoption of electric vehicles for individual drivers, rideshare and commercial fleets, and businesses. Since 2019, EVgo has purchased renewable energy certificates to match the electricity that powers its network. As one of the nation’s largest public fast charging networks, EVgo’s owned and operated charging network includes around 900 fast charging locations, 60 metropolitan areas and 30 states. EVgo continues to add more DC fast charging locations across the U.S., including stations built through EVgo eXtend™, its white label service offering. EVgo is accelerating transportation electrification through partnerships with automakers, fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, and gas stations, policy leaders, and other organizations. With a rapidly growing network, robust software products and unique service offerings for drivers and partners including EVgo Optima™, EVgo Inside™, EVgo Rewards™, and Autocharge+, EVgo enables a world-class charging experience where drivers live, work, travel and play.

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “proposed,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, express or implied statements regarding EVgo’s continuing operational focus, anticipated industry developments, potential opportunities, future financial performance, and statements regarding the Company’s leadership succession plan. These statements are subject to numerous assumptions, risks and uncertainties and on the current expectations of EVgo’s management and are not predictions of actual performance. These risks include the Company’s ability to implement a smooth leadership transition as well as to other risks described in “Risk Factors” in EVgo’s Annual Report on Form 10-K filed with the SEC on March 30, 2023, as well as its other filings with the SEC, copies of which are available on EVgo’s website at investors.evgo.com, and on the SEC’s website at www.sec.gov. All forward-looking statements in this press release are based on information available to EVgo as of the date hereof, and EVgo does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by applicable law.

For Investors:

[email protected]

For Media:

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: EV/Electric Vehicles Automotive

MEDIA:

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Hawkins, Inc. Reports First Quarter Fiscal 2024 Results

ROSEVILLE, Minn., Aug. 02, 2023 (GLOBE NEWSWIRE) — Hawkins, Inc. (Nasdaq: HWKN) today announced results for the three months ended July 2, 2023, its first quarter of fiscal 2024.

First Quarter
Fiscal Year 2024 Highlights:

  • Record quarterly performance for key metrics, including sales, gross profit, operating income, net income, diluted earnings per share (“EPS”), adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), and operating cash flow.
  • Sales of $251.1 million, a 2% year-over-year increase, led by the Water Treatment group with sales growth of 19% over the same quarter in the prior year.
  • Gross profit of $52.0 million, an 11% increase over the prior year, contributing to operating income of $32.5 million, a 17% year-over-year increase.
  • EPS of $1.12, 19% higher than the same period last year.
  • Adjusted EBITDA, a non-GAAP measure, of $40.9 million, a 19% increase over the same period of the prior year.
  • Operating cash flow of $34.9 million, a portion of which was used to pay down $23.4 million on our revolving line of credit, reducing our debt to $88.3 million and bringing our leverage ratio to 0.72x adjusted EBITDA.
  • Completed expansion of our Rosemount, Minnesota manufacturing facility, nearly doubling our capacity, to support future growth.
  • Added 40th Water Treatment location with acquisition of EcoTech Enterprises, Inc. in Arkansas.

Executive Commentary – Patrick H. Hawkins, Chief Executive Officer and President:

“We are pleased with our strong year-over-year performance in the first quarter, with our bottom line growing 19%. Our Water Treatment group lead the way with 19% revenue growth and operating income growth of nearly 70%. We continue to see profit growth within this segment, as we execute on our strategy to grow both the legacy business and the businesses we have acquired over the last few years. Industrial group sales declined 3% year over year, but would have been up slightly when taking into account the effects of the sale of our consumer bleach packaging business at the end of fiscal 2023. As we anticipated, sales in our Health and Nutrition group declined year over year as we believe customers continue to destock inventory levels, as well as lower consumer demand for health and immunity products, which is expected to continue through the remainder of the year.”

Mr. Hawkins continued, “For the first time in over two years, gross profit was positively impacted by a favorable LIFO adjustment, reflecting the impact of material costs beginning to decline. We recorded a slight favorable LIFO impact in the quarter, compared to a charge of $3.8 million in the first quarter of last year. The strong first-quarter results, combined with disciplined inventory management, allowed us to pay down $23 million on our debt in the quarter, with current outstanding debt $71 million lower than it was at this time last year, allowing us to continue to execute on our strategy of Water Treatment tuck-in acquisitions. We expect continued growth in our Water Treatment segment for the remainder of the year, although not at the pace of the first quarter and we remain cautiously optimistic about our Industrial segment. With the diversity of our businesses and the overall strength of our Company, we believe we will continue to generate strong operating cash flow and will continue to manage debt during the remainder of the fiscal year.”

First
Quarter Financial Highlights:

NET INCOME

For the first quarter of fiscal 2024, the Company reported net income of $23.4 million, or $1.12 per diluted share, compared to net income for the first quarter of fiscal 2023 of $19.7 million, or $0.94 per diluted share.

REVENUE

Sales were $251.1 million for the first quarter of fiscal 2024, an increase of $4.6 million, or 2%, from sales of $246.5 million in the same period a year ago, driven by increased selling prices. Industrial segment sales decreased $3.8 million, or 3%, to $120.9 million for the current quarter, from $124.7 million in the same period a year ago. The decrease in Industrial segment sales was driven by the divestiture of our consumer bleach packaging business at the end of fiscal 2023 resulting in $4.7 million lower sales in the current quarter. Offsetting that decrease were increases in Industrial segment sales resulting from increased selling prices on many of our products driven by higher raw material costs on overall lower volumes and, to a lesser extent, a product mix shift. Water Treatment segment sales increased $15.2 million or 19%, to $93.7 million for the current quarter, from $78.5 million in the same period a year ago. Water Treatment sales increased as a result of increased selling prices on many of our products driven primarily by higher raw material costs. Health and Nutrition segment sales decreased $6.7 million, or 15%, to $36.6 million for the current quarter, from $43.3 million in the same period a year ago. Health and Nutrition segment sales decreased due to decreased sales volumes of both our specialty distributed products and our manufactured products due to softened demand from our customers, which we believe was driven by excess inventory at many of our customers as well as lower consumer demand for health and immunity products.

GROSS PROFIT

Gross profit increased $5.3 million, or 11%, to $52.0 million, or 21% of sales, for the current quarter, from $46.7 million, or 19% of sales, in the same period a year ago. During the current quarter, the LIFO reserve decreased, and gross profit increased, by $0.2 million. In the same quarter a year ago, the LIFO reserve increased, and gross profit decreased, by $3.8 million due primarily to rising raw material prices. Gross profit for the Industrial segment decreased $0.7 million, or 4%, to $19.3 million, or 16% of sales, for the current quarter, from $20.0 million, or 16% of sales, in the same period a year ago. Industrial segment gross profit decreased as a result of decreased sales volumes, which was largely offset by the favorable impact of the change in the LIFO reserve. Gross profit for the Water Treatment segment increased $7.4 million, or 39%, to $26.4 million, or 28% of sales, for the current quarter, from $19.0 million, or 24% of sales, in the same period a year ago. Water Treatment segment gross profit increased as a result of improved per-unit margins. Gross profit for our Health and Nutrition segment decreased $1.5 million, or 19%, to $6.3 million, or 17% of sales, for the current quarter, from $7.8 million, or 18% of sales, in the same period a year ago. Health and Nutrition segment gross profit decreased as a result of lower sales volumes and lower per-unit margins on certain products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased $0.6 million to $19.5 million, or 8% of sales, for the current quarter, from $18.9 million, or 8% of sales, in the same period a year ago. In the current quarter, we recorded compensation expense of $0.3 million as a result of gains recorded on investments held for our non-qualified deferred compensation plan, as compared to a $0.8 million decrease in compensation expense in the same quarter a year ago as a result of losses incurred. Offsetting this $1.1 million unfavorable year-over-year impact were decreases in SG&A expenses resulting largely from expense control measures.

ADJUSTED EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is an important performance indicator and a key compliance measure under the terms of our credit agreement. An explanation of the computation of adjusted EBITDA is presented below. Adjusted EBITDA for the three months ended July 2, 2023 was $40.9 million, an increase of $6.6 million, or 19%, from $34.3 million in the same period a year ago.

INCOME TAXES

Our effective income tax rate was 26% for the current quarter, compared to 25% in the same period a year ago. The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes. Our effective tax rate for the full year is currently expected to be approximately 26-27%.

BALANCE SHEET

During the first quarter, our working capital demands decreased in large part due to disciplined management of our inventory levels. This improvement, along with higher net income, allowed us to reduce our debt by $23.4 million in the quarter. We now have total outstanding debt of $88 million, which is 0.72x our trailing twelve-month adjusted EBITDA, down from 0.96x at the end of fiscal 2023.

About Hawkins, Inc.

Hawkins, Inc. was founded in 1938 and is a leading specialty chemical and ingredients company that formulates, distributes, blends, and manufactures products for its Industrial, Water Treatment, and Health & Nutrition customers. Headquartered in Roseville, Minnesota, the Company has 52 facilities in 25 states and creates value for its customers through superb customer service and support, quality products and personalized applications. Hawkins, Inc. generated $935 million of revenue in fiscal 2023 and has approximately 850 employees. For more information, including registering to receive email alerts, please visit www.hawkinsinc.com/investors.

Reconciliation of Non-GAAP Financial Measures

We report our consolidated financial results in accordance with U.S. generally accepted accounting principles (GAAP). To assist investors in understanding our financial performance between periods, we have provided certain financial measures not computed according to GAAP, including adjusted EBITDA. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies.

Management uses this non-GAAP financial measure internally to understand, manage and evaluate our business and to make operating decisions. Management believes that this non-GAAP financial measure reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of the factors and trends affecting our financial condition and results of operations.

We define adjusted EBITDA as GAAP net income adjusted for the impact of the following: net interest expense resulting from our net borrowing position; income tax expense; non-cash expenses including amortization of intangibles, depreciation and charges for the employee stock purchase plan and restricted stock grants; and non-recurring items of income or expense, if applicable.

Adjusted EBITDA Three Months Ended
(In thousands) July 2, 2023   July 3, 2022
Net Income (GAAP) $ 23,430   $ 19,695
Interest expense, net   1,148     929
Income tax expense   8,246     6,477
Amortization of intangibles   1,670     1,757
Depreciation expense   5,437     4,801
Non-cash compensation expense   959     595
Adjusted EBITDA $ 40,890   $ 34,254

HAWKINS, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except share and per-share data)
 
    Three Months Ended
    July 02, 2023   July 03, 2022
Sales   $ 251,120     $ 246,543  
Cost of sales     (199,129 )     (199,794 )
Gross profit     51,991       46,749  
Selling, general and administrative expenses     (19,504 )     (18,885 )
Operating income     32,487       27,864  
Interest expense, net     (1,148 )     (929 )
Other income (expense)     337       (763 )
Income before income taxes     31,676       26,172  
Income tax expense     (8,246 )     (6,477 )
Net income   $ 23,430     $ 19,695  
         
Weighted average number of shares outstanding – basic     20,907,724       20,908,823  
Weighted average number of shares outstanding – diluted     21,012,788       21,033,549  
Basic earnings per share   $ 1.12     $ 0.94  
Diluted earnings per share   $ 1.12     $ 0.94  
Cash dividends declared per common share   $ 0.15     $ 0.14  

HAWKINS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)
 
    July 2,

2023 		  April 2,

2023
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents   $ 7,050   $ 7,566
Trade accounts receivables, net     138,340     129,252
Inventories     76,938     88,777
Prepaid expenses and other current assets     4,127     6,449
Total current assets     226,455     232,044
PROPERTY, PLANT, AND EQUIPMENT:     354,001     344,753
Less accumulated depreciation     163,379     158,950
Net property, plant, and equipment     190,622     185,803
OTHER ASSETS:        
Right-of-use assets     11,324     10,199
Goodwill     77,401     77,401
Intangible assets, net of accumulated amortization     71,391     73,060
Deferred compensation plan asset     9,130     7,367
Other     5,640     4,661
Total other assets     174,886     172,688
Total assets   $ 591,963   $ 590,535
LIABILITIES AND SHAREHOLDERS’ EQUITY        
CURRENT LIABILITIES:        
Accounts payable — trade   $ 55,598   $ 53,705
Accrued payroll and employee benefits     10,690     17,279
Income tax payable     11,584     3,329
Current portion of long-term debt     9,913     9,913
Other current liabilities     6,518     6,645
Total current liabilities     94,303     90,871
LONG-TERM DEBT, LESS CURRENT PORTION     78,353     101,731
LONG-TERM LEASE LIABILITY     9,597     8,687
PENSION WITHDRAWAL LIABILITY     3,819     3,912
DEFERRED INCOME TAXES     24,077     23,800
DEFERRED COMPENSATION LIABILITY     10,117     9,343
OTHER LONG-TERM LIABILITIES     696     2,175
Total liabilities     220,962     240,519
COMMITMENTS AND CONTINGENCIES        
SHAREHOLDERS’ EQUITY:        
Common stock; authorized: 60,000,000 shares of $0.01 par value; 20,942,857 and 20,850,454 shares issued and outstanding as of July 2, 2023 and April 2, 2023, respectively     209     209
Additional paid-in capital     44,409     44,443
Retained earnings     322,694     302,424
Accumulated other comprehensive income     3,689     2,940
Total shareholders’ equity     371,001     350,016
Total liabilities and shareholders’ equity   $ 591,963   $ 590,535

HAWKINS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
 
    Three Months Ended
    July 2,

2023 		  July 3,

2022
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income   $ 23,430     $ 19,695  
Reconciliation to cash flows:        
Depreciation and amortization     7,107       6,558  
Operating leases     534       476  
(Gain) loss on deferred compensation assets     (337 )     763  
Stock compensation expense     959       595  
Other     26       273  
Changes in operating accounts providing (using) cash:        
Trade receivables     (9,055 )     (15,857 )
Inventories     11,839       (10,003 )
Accounts payable     (537 )     (8,442 )
Accrued liabilities     (9,075 )     (11,043 )
Lease liabilities     (580 )     (521 )
Income taxes     8,255       6,645  
Other     2,300       1,466  
Net cash provided by (used in) operating activities     34,866       (9,395 )
CASH FLOWS FROM INVESTING ACTIVITIES:        
Purchases of property, plant, and equipment     (7,873 )     (11,640 )
Other     44       113  
Net cash used in investing activities     (7,829 )     (11,527 )
CASH FLOWS FROM FINANCING ACTIVITIES:        
Cash dividends declared and paid     (3,160 )     (2,958 )
New shares issued     1,147       986  
Payroll taxes paid in exchange for shares withheld     (2,140 )     (1,550 )
Shares repurchased     —       (6,557 )
Payments on revolving loan     (23,400 )     (6,500 )
Proceeds from revolving loan borrowings     —       40,000  
Net cash (used in) provided by financing activities     (27,553 )     23,421  
NET INCREASE IN CASH AND CASH EQUIVALENTS     (516 )     2,499  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     7,566       3,496  
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 7,050     $ 5,995  
         
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION        
Cash paid for interest   $ 1,221     $ 721  
Noncash investing activities – capital expenditures in accounts payable   $ 4,771     $ 1,858  

HAWKINS, INC.

REPORTABLE SEGMENTS (UNAUDITED)

(In thousands)
 
    Industrial   Water

Treatment 		  Health and
Nutrition 		  Total
Three months ended July 2, 2023:                
Sales   $ 120,873   $ 93,651   $ 36,596   $ 251,120
Gross profit     19,306     26,408     6,277     51,991
Selling, general, and administrative expenses     6,575     9,126     3,803     19,504
Operating income     12,731     17,282     2,474     32,487
Three months ended July 3, 2022:                
Sales   $ 124,710   $ 78,490   $ 43,343   $ 246,543
Gross profit     20,009     18,953     7,787     46,749
Selling, general, and administrative expenses     6,385     8,701     3,799     18,885
Operating income     13,624     10,252     3,988     27,864



Forward-Looking Statements. Various remarks in this press release constitute 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. These statements include those relating to consumer demand for products containing our ingredients and the impacts of those demands, expectations for results in our business segments and the timing of our filings with the Securities and Exchange Commission. These statements are not historical facts, but rather are based on our current expectations, estimates and projections, and our beliefs and assumptions. Forward-looking statements may be identified by terms, including “anticipate,” “believe,” “can,” “could,” “expect,” “intend,” “may,” “predict,” “should,” or “will” or the negative of these terms or other comparable terms. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Actual results may vary materially from those contained in forward looking statements based on a number of factors, including, but not limited to, changes in regulation, changes in the labor markets, changes in competition and price pressures, changes in demand and customer requirements or processes for our products, availability of product and disruptions to supplies, interruptions in production resulting from hazards, transportation limitations or other extraordinary events outside our control that may negatively impact our business or the supply chains in which we participate, changes in imported products and tariff levels, the availability of products and the prices at which they are available, the acceptance of new products by our customers and the timing of any such acceptance, and changes in product supplies. Additional information concerning potential factors that could affect future financial results is included in our Annual Report on Form 10-K for the fiscal year ended April 2, 2023, as updated from time to time in amendments and subsequent reports filed with the SEC. Investors should take such risks into account when making investment decisions. Shareholders and other readers are cautioned not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date hereof. We do not undertake any obligation to update any forward-looking statements.

Contacts:
Jeffrey P. Oldenkamp
Executive Vice President and Chief Financial Officer
612/331-6910
[email protected] 



Posted on

Traeger Announces Second Quarter Fiscal 2023 Results

Traeger Announces Second Quarter Fiscal 2023 Results

Increases Revenue and Adjusted EBITDA Outlook for Full Year 2023

SALT LAKE CITY–(BUSINESS WIRE)–
Traeger, Inc. (“Traeger” or the “Company”) (NYSE: COOK), creator and category leader of the wood pellet grill, today announced its financial results for the three months ended June 30, 2023.

Second Quarter FY 23 Results

  • Total revenues decreased 14.4% to $171.5 million

  • Gross profit margin of 36.9%, up 25 basis points compared to prior year

  • Net loss of $32.9 million compared to a loss of $133.1 million in the prior year

  • Adjusted EBITDA of $21.5 million, up from $17.0 million in the prior year

  • 26% sequential reduction in balance sheet inventory driven by strategic inventory management

  • Raises FY 2023 revenue and Adjusted EBITDA guidance

“In the second quarter, we delivered results that were ahead of our expectations and grew adjusted EBITDA, even as our sales were pressured by retailer destocking and lower consumer demand,” said Jeremy Andrus, CEO of Traeger. “I am pleased with the significant progress we have made in improving our financial positioning over the last several quarters. Specifically, our efforts to rightsize both balance sheet and channel inventories have allowed us to enter the second half of the year in a substantially more balanced position. Given our better than anticipated results for the first half of the year, today we are increasing our revenue and Adjusted EBITDA guidance for Fiscal 2023.”

Mr. Andrus continued, “During our peak selling season in the second quarter, the energy around the Traeger brand remained very strong, bolstering my confidence in our long-term opportunity to disrupt the outdoor cooking industry and to materially grow our household penetration. We look forward to an expected return to growth in the second half of the year and believe we are well-positioned to both navigate the current environment and to drive long-term growth.”

Operating Results for the Second Quarter

Total revenue decreased by 14.4% to $171.5 million, compared to $200.3 million in the second quarter last year.

  • Grills decreased 20.9% to $93.1 million as compared to the second quarter last year. The decrease was primarily driven by lower average selling prices in addition to decreased unit volumes.

  • Consumables decreased 17.1% to $34.9 million as compared to the second quarter last year. The decrease was driven by lower unit volumes in addition to decreased average selling prices.

  • Accessories increased 7.4% to $43.5 million as compared to the second quarter last year. This increase was driven primarily by increased average selling prices for Traeger branded accessories and increased revenue due to sales of MEATER smart thermometers.

North America revenue declined 15.6% in the second quarter compared to the prior year. Rest of World revenues increased 3.0% in the second quarter compared to the prior year.

Gross profit decreased to $63.3 million, compared to $73.4 million in the second quarter last year. Gross profit margin was 36.9% in the second quarter, compared to 36.7% in the same period last year. The increase in gross margin was driven primarily by favorability from freight costs and foreign exchange rates, offset by increased dilution.

Sales and marketing expenses were $27.9 million, compared to $42.1 million in the second quarter last year. The decrease in sales and marketing expense was driven by reduced investments in advertising costs and lower costs for commissions and travel related expenses.

General and administrative expenses were $52.4 million, compared to $31.4 million in the second quarter last year. The increase in general and administrative expense was driven by higher equity-based compensation expense of $32.1 million primarily due to the cancellation of the unearned CEO and initial public offering performance-based restricted stock units, as well as higher costs for professional fees. The increases were partially offset by lower employee related costs.

Net loss was $32.9 million in the second quarter, or a loss of $0.27 per diluted share, as compared to net loss of $133.1 million in the second quarter of last year, or a loss of $1.13 per diluted share.1

Adjusted net income was $4.3 million, or $0.04 per diluted share as compared to adjusted net income of $3.9 million, or $0.03 per diluted share in the second quarter last year.2

Adjusted EBITDA was $21.5 million in the second quarter as compared to $17.0 million in the same period last year.2

Balance Sheet

Cash and cash equivalents at the end of the second quarter totaled $14.5 million, compared to $39.1 million at December 31, 2022.

Inventory at the end of the second quarter was $97.8 million, compared to $153.5 million at December 31, 2022. The decrease in inventory was driven primarily by strategic inventory management.

Guidance For Full Year Fiscal 2023

The Company is increasing its total revenue and Adjusted EBITDA guidance for Fiscal 2023. The Company’s updated outlook reflects better than anticipated results in the first half of the year and expected growth in revenue and EBITDA in the second half of the year.

  • Total revenue is expected to be between $585 million and $600 million
  • Gross Margin is expected to be between 36% and 37%
  • Adjusted EBITDA is expected to be between $55 million and $59 million

A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconciling information with respect to provision for income taxes, interest expense, depreciation and amortization, other (income) expense, stock-based compensation, goodwill impairment, non-routine legal expenses, change in fair value of contingent consideration, and other adjustment items all of which are adjustments to Adjusted EBITDA.

Conference Call Details

A conference call to discuss the Company’s second quarter results is scheduled for Wednesday, August 2, 2023, at 4:30 p.m. ET. To participate, please dial (833) 470-1428 or +1 (404) 975-4839 for international callers, conference ID 583097. The conference call will also be webcast live at https://investors.traeger.com. A recording will be available shortly after the conclusion of the call until Wednesday, August 16, 2023. To access the replay, please dial (866) 813-9403 or +1 (929) 458-6194 for international callers, conference ID 475764. A replay of the webcast will also be available approximately two hours after the conclusion of the call on the Company’s website at https://investors.traeger.com. A supplemental presentation has also been posted to the Company’s website at https://investors.traeger.com.

About Traeger

Traeger, headquartered in Salt Lake City, is the creator and category leader of the wood pellet grill, an outdoor cooking system that ignites all-natural hardwoods to grill, smoke, bake, roast, braise, and barbecue. In 2023, Traeger entered the griddle category, further establishing its leadership position in the outdoor cooking space. Traeger grills are versatile and easy to use, empowering cooks of all skill sets to create delicious meals with flavor that cannot be replicated. Grills are at the core of our platform and are complemented by Traeger wood pellets, rubs, sauces, accessories, and MEATER smart thermometers.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our anticipated full year fiscal 2023 results. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, our history of operating losses, our ability to manage our future growth effectively, our ability to expand into additional markets, our ability to maintain and strengthen our brand to generate and maintain ongoing demand for our products, our ability to cost-effectively attract new customers and retain our existing customers, our failure to maintain product quality and product performance at an acceptable cost, the impact of product liability and warranty claims and product recalls, the highly competitive market in which we operate, the use of social media and community ambassadors, a decline in sales of our grills, our dependence on three major retailers, risks associated with our international operations, our reliance on a limited number of third-party manufacturers and problems with (or loss of) our suppliers or an inability to obtain raw materials, and the ability of our stockholders to influence corporate matters and the other important factors discussed under the caption “Risk Factors” in our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K for the year ended December 31, 2022. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

_______________________

1 There were no potentially dilutive securities outstanding as of June 30, 2023 and 2022.

2 Reconciliations of GAAP to non-GAAP financial measures, as well as definitions for the non-GAAP financial measures included in this press release and the reasons for their use, are presented below.

TRAEGER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)
 

 

June 30,

2023

 

December 31,

2022

 

(unaudited)

 

 

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

14,496

 

 

$

39,055

 

Restricted cash

 

—

 

 

 

12,500

 

Accounts receivable, net

 

83,290

 

 

 

42,050

 

Inventories

 

97,803

 

 

 

153,471

 

Prepaid expenses and other current assets

 

29,842

 

 

 

27,162

 

Total current assets

 

225,431

 

 

 

274,238

 

Property, plant, and equipment, net

 

52,274

 

 

 

55,510

 

Operating lease right-of-use assets

 

11,284

 

 

 

13,854

 

Goodwill

 

74,725

 

 

 

74,725

 

Intangible assets, net

 

491,700

 

 

 

512,858

 

Other non-current assets

 

14,231

 

 

 

15,530

 

Total assets

$

869,645

 

 

$

946,715

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current Liabilities

 

 

 

Accounts payable

$

18,563

 

 

$

29,841

 

Accrued expenses

 

49,094

 

 

 

52,295

 

Line of credit

 

40,000

 

 

 

11,709

 

Current portion of notes payable

 

250

 

 

 

250

 

Current portion of operating lease liabilities

 

4,109

 

 

 

5,185

 

Current portion of contingent consideration

 

13,110

 

 

 

12,157

 

Other current liabilities

 

2,143

 

 

 

1,470

 

Total current liabilities

 

127,269

 

 

 

112,907

 

Notes payable, net of current portion

 

396,722

 

 

 

468,108

 

Operating leases liabilities, net of current portion

 

7,470

 

 

 

9,001

 

Contingent consideration, net of current portion

 

—

 

 

 

10,590

 

Deferred tax liability

 

10,378

 

 

 

10,370

 

Other non-current liabilities

 

281

 

 

 

870

 

Total liabilities

 

542,120

 

 

 

611,846

 

Commitments and contingencies—See Note 10

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value; 25,000,000 shares authorized and no shares issued or outstanding as of June 30, 2023 and December 31, 2022

 

—

 

 

 

—

 

Common stock, $0.0001 par value; 1,000,000,000 shares authorized

 

 

 

Issued and outstanding shares – 123,960,782 and 122,624,414 as of June 30, 2023 and December 31, 2022

 

12

 

 

 

12

 

Additional paid-in capital

 

923,048

 

 

 

882,069

 

Accumulated deficit

 

(595,392

)

 

 

(570,475

)

Accumulated other comprehensive income (loss)

 

(143

)

 

 

23,263

 

Total stockholders’ equity

 

327,525

 

 

 

334,869

 

Total liabilities and stockholders’ equity

$

869,645

 

 

$

946,715

 
 

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share amounts)
 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

Revenue

$

171,512

 

 

$

200,270

 

 

$

324,673

 

 

$

423,980

 

Cost of revenue

 

108,181

 

 

 

126,829

 

 

 

205,919

 

 

 

267,895

 

Gross profit

 

63,331

 

 

 

73,441

 

 

 

118,754

 

 

 

156,085

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

27,915

 

 

 

42,051

 

 

 

49,990

 

 

 

76,905

 

General and administrative

 

52,371

 

 

 

31,436

 

 

 

79,050

 

 

 

72,152

 

Amortization of intangible assets

 

8,888

 

 

 

8,888

 

 

 

17,777

 

 

 

17,777

 

Change in fair value of contingent consideration

 

1,765

 

 

 

255

 

 

 

2,808

 

 

 

1,955

 

Goodwill impairment

 

—

 

 

 

111,485

 

 

 

—

 

 

 

111,485

 

Total operating expense

 

90,939

 

 

 

194,115

 

 

 

149,625

 

 

 

280,274

 

Loss from operations

 

(27,608

)

 

 

(120,674

)

 

 

(30,871

)

 

 

(124,189

)

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(10,579

)

 

 

(7,064

)

 

 

(21,033

)

 

 

(12,901

)

Other income (expense), net

 

5,450

 

 

 

(5,350

)

 

 

27,349

 

 

 

(4,806

)

Total other income (expense)

 

(5,129

)

 

 

(12,414

)

 

 

6,316

 

 

 

(17,707

)

Loss before provision for income taxes

 

(32,737

)

 

 

(133,088

)

 

 

(24,555

)

 

 

(141,896

)

Provision for income taxes

 

198

 

 

 

46

 

 

 

362

 

 

 

198

 

Net loss

$

(32,935

)

 

$

(133,134

)

 

$

(24,917

)

 

$

(142,094

)

Net loss per share, basic and diluted

$

(0.27

)

 

$

(1.13

)

 

$

(0.20

)

 

$

(1.20

)

Weighted average common shares outstanding, basic and diluted

 

123,027,759

 

 

 

118,211,168

 

 

 

122,864,345

 

 

 

118,051,090

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation adjustments

$

35

 

 

$

12

 

 

$

3

 

 

$

9

 

Change in cash flow hedge

 

—

 

 

 

5,735

 

 

 

(23,409

)

 

 

12,324

 

Total other comprehensive income (loss)

 

35

 

 

 

5,747

 

 

 

(23,406

)

 

 

12,333

 

Comprehensive loss

$

(32,900

)

 

$

(127,387

)

 

$

(48,323

)

 

$

(129,761

)
 

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)
 

 

Six Months Ended June 30,

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net loss

$

(24,917

)

 

$

(142,094

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

Depreciation of property, plant and equipment

 

7,462

 

 

 

6,023

 

Amortization of intangible assets

 

21,378

 

 

 

21,337

 

Amortization of deferred financing costs

 

1,026

 

 

 

979

 

Loss on disposal of property, plant and equipment

 

1,689

 

 

 

1,176

 

Stock-based compensation expense

 

40,979

 

 

 

27,434

 

Bad debt expense

 

189

 

 

 

(127

)

Unrealized loss (gain) on derivative contracts

 

(23,387

)

 

 

2,864

 

Change in fair value of contingent consideration

 

2,588

 

 

 

(1,325

)

Goodwill impairment

 

—

 

 

 

111,485

 

Other non-cash adjustments

 

(17

)

 

 

—

 

Change in operating assets and liabilities:

 

 

 

Accounts receivable

 

(40,979

)

 

 

(18,709

)

Inventories, net

 

55,668

 

 

 

(17,781

)

Prepaid expenses and other current assets

 

(1,074

)

 

 

(2,394

)

Other non-current assets

 

(13

)

 

 

23

 

Accounts payable and accrued expenses

 

(14,154

)

 

 

(18,954

)

Other non-current liabilities

 

(582

)

 

 

13

 

Net cash provided by (used in) operating activities

 

25,856

 

 

 

(30,050

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Purchase of property, plant, and equipment

 

(8,854

)

 

 

(12,422

)

Capitalization of patent costs

 

(223

)

 

 

(305

)

Proceeds from sale of property, plant, and equipment

 

2,450

 

 

 

—

 

Net cash used in investing activities

 

(6,627

)

 

 

(12,727

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Proceeds from line of credit

 

86,500

 

 

 

110,600

 

Repayments on line of credit

 

(130,209

)

 

 

(73,927

)

Proceeds from long-term debt

 

—

 

 

 

12,500

 

Repayments of long-term debt

 

(103

)

 

 

—

 

Principal payments on capital lease obligations

 

(251

)

 

 

(217

)

Payment of acquisition related contingent consideration

 

(12,225

)

 

 

(9,275

)

Taxes paid related to net share settlement of equity awards

 

—

 

 

 

(41

)

Net cash provided by (used in) financing activities

 

(56,288

)

 

 

39,640

 

Net decrease in cash, cash equivalents and restricted cash

 

(37,059

)

 

 

(3,137

)

Cash, cash equivalents and restricted cash at beginning of period

 

51,555

 

 

 

16,740

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

14,496

 

 

$

13,603

 
 

TRAEGER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

 

(Continued)

Six Months Ended June 30,

 

2023

 

2022

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

Cash paid during the period for interest

$

20,487

 

$

11,781

Cash paid for income taxes

$

1,576

 

$

1,988

NON-CASH FINANCING AND INVESTING ACTIVITIES

 

 

 

Equipment purchased under finance leases

$

383

 

$

344

Property, plant, and equipment included in accounts payable and accrued expenses

$

1,813

 

$

8,736
 

TRAEGER, INC.

RECONCILIATIONS OF AND OTHER INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES

(unaudited)

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions.

Each of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per share, Adjusted EBITDA Margin, and Adjusted Net Income Margin are key performance measures that our management uses to assess our financial performance and is also used for internal planning and forecasting purposes. We believe that these non-GAAP financial measures are useful to investors and other interested parties in analyzing our financial performance because it provides a comparable overview of our operations across historical periods. In addition, we believe that providing each of Adjusted EBITDA and Adjusted Net Income, together with a reconciliation of Net Loss to each such measure, and providing Adjusted Net Income per share, together with a reconciliation of Net Loss per share to such measure, and Adjusted EBITDA Margin and Adjusted Net Income Margin, together with a reconciliation of Net Loss Margin to such measures, helps investors make comparisons between our company and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation. For example, due to finite-lived intangible assets included on our balance sheet following our corporate reorganization in 2017, we have significant non-cash amortization expense attributable to the nature of our capital structure.

Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share are used by our management team as an additional measure of our performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share help our management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of Net Loss or Loss from Continuing Operations or Net Loss per share. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees. Each of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

The following table presents a reconciliation of Net Loss, Net Loss Margin and Net Loss per share, the most directly comparable financial measures calculated in accordance with U.S. GAAP, to Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Margin and Adjusted Net Income per share, respectively, on a consolidated basis.

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2023

 

2022

 

2023

 

2022

 

(dollars in thousands, except share and per share amounts)

Net loss

$

(32,935

)

 

$

(133,134

)

 

$

(24,917

)

 

$

(142,094

)

Adjustments:

 

 

 

 

 

 

 

Other (income) expense (1)

 

(6,529

)

 

 

3,401

 

 

 

(26,837

)

 

 

4,075

 

Goodwill impairment

 

—

 

 

 

111,485

 

 

 

—

 

 

 

111,485

 

Stock-based compensation

 

33,036

 

 

 

11,951

 

 

 

40,979

 

 

 

27,434

 

Non-routine legal expenses (2)

 

248

 

 

 

1,051

 

 

 

481

 

 

 

2,969

 

Amortization of acquisition intangibles (3)

 

8,253

 

 

 

8,253

 

 

 

16,507

 

 

 

16,507

 

Change in fair value of contingent consideration

 

1,765

 

 

 

255

 

 

 

2,808

 

 

 

1,955

 

Other adjustment items (4)

 

526

 

 

 

668

 

 

 

669

 

 

 

1,081

 

Tax impact of adjusting items (5)

 

(46

)

 

 

—

 

 

 

106

 

 

 

—

 

Adjusted net income

$

4,318

 

 

$

3,930

 

 

$

9,796

 

 

$

23,412

 

 

 

 

 

 

 

 

 

Net loss

$

(32,935

)

 

$

(133,134

)

 

$

(24,917

)

 

$

(142,094

)

Adjustments:

 

 

 

 

 

 

 

Provision for income taxes

 

198

 

 

 

46

 

 

 

362

 

 

 

198

 

Interest expense

 

10,579

 

 

 

7,064

 

 

 

21,033

 

 

 

12,901

 

Depreciation and amortization

 

14,587

 

 

 

14,242

 

 

 

28,841

 

 

 

27,419

 

Other (income) expense (1)

 

(6,529

)

 

 

3,401

 

 

 

(26,837

)

 

 

4,075

 

Goodwill impairment

 

—

 

 

 

111,485

 

 

 

—

 

 

 

111,485

 

Stock-based compensation

 

33,036

 

 

 

11,951

 

 

 

40,979

 

 

 

27,434

 

Non-routine legal expenses (2)

 

248

 

 

 

1,051

 

 

 

481

 

 

 

2,969

 

Change in fair value of contingent consideration

 

1,765

 

 

 

255

 

 

 

2,808

 

 

 

1,955

 

Other adjustment items (4)

 

526

 

 

 

668

 

 

 

669

 

 

 

1,081

 

Adjusted EBITDA

$

21,475

 

 

$

17,029

 

 

$

43,419

 

 

$

47,423

 

 

 

 

 

 

 

 

 

Revenue

$

171,512

 

 

$

200,270

 

 

$

324,673

 

 

$

423,980

 

Net loss margin

 

(19.2

)%

 

 

(66.5

)%

 

 

(7.7

)%

 

 

(33.5

)%

Adjusted net income margin

 

2.5

%

 

 

2.0

%

 

 

3.0

%

 

 

5.5

%

Adjusted EBITDA margin

 

12.5

%

 

 

8.5

%

 

 

13.4

%

 

 

11.2

%

 

 

 

 

 

 

 

 

Net loss per diluted share

$

(0.27

)

 

$

(1.13

)

 

$

(0.20

)

 

$

(1.20

)

Adjusted net income per diluted share

$

0.04

 

 

$

0.03

 

 

$

0.08

 

 

$

0.20

 

Weighted average common shares outstanding – diluted

 

123,027,759

 

 

 

118,211,168

 

 

 

122,864,345

 

 

 

118,051,090

 

(1)

Represents realized and unrealized gains on the interest rate swap, including gains associated with the hedge dedesignation, losses on the disposal of property, plant, and equipment, and unrealized gains (losses) from foreign currency transactions and derivatives.

(2)

Represents external legal expenses for litigation, patent and trademark defense.

(3)

Represents the amortization expense associated with intangible assets recorded in connection with the 2017 acquisition of Traeger Pellet Grills Holdings LLC.

(4)

Represents non-routine operational wind-down costs, non-cash ground lease expense associated with a build-to-suit lease in 2022, as well as write-offs and restoration costs at our wood pellet production facility due to flood damage sustained as a result of a tropical storm.

(5)

Represents an adjusted tax rate equal to our annual estimated tax rate on Adjusted Net Income. This rate is based on our estimated annual GAAP income (loss) tax rate forecast, adjusted to account for items excluded from GAAP income (loss) in calculating the non-GAAP financial measures presented above. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates, our estimated tax rate on Adjusted Net Income may differ from our GAAP tax rate and from our actual tax liabilities.

 

Investors:

Nick Bacchus

Traeger, Inc.

[email protected]

Media:

The Brand Amp

[email protected]

KEYWORDS: United States North America Utah

INDUSTRY KEYWORDS: Food/Beverage Home Goods Other Retail Retail Specialty

MEDIA:

Posted on

McKesson Corporation Reports Fiscal 2024 First Quarter Results

McKesson Corporation Reports Fiscal 2024 First Quarter Results

IRVING, Texas–(BUSINESS WIRE)–
McKesson Corporation (NYSE: MCK) has released its fiscal 2024 first quarter financial results. Results can be accessed on McKesson’s Investor Relations website at investor.mckesson.com/financials/quarterly-results.

As previously announced, the company will host a live webcast of the earnings conference call for investors today, Wednesday, August 2nd at 4:30 PM ET to review its financial results. The audio webcast of the conference call will be available live and archived on McKesson’s Investor Relations website, along with the company’s earnings press release, financial tables, and slide presentation. Additional information about upcoming events for the investor community can be found at investor.mckesson.com/events-and-presentations.

About McKesson Corporation

McKesson Corporation is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. Our teams partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products and services to help make quality care more accessible and affordable. Learn more about how McKesson is impacting virtually every aspect of healthcare at McKesson.com and read Our Stories.

Rachel Rodriguez, 469-260-0556 (Investors)

[email protected]

David Matthews, 214-952-0833 (Media)

[email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Biotechnology Pharmaceutical Medical Supplies Health Medical Devices Hospitals Logistics/Supply Chain Management Transport

MEDIA:

Logo
Logo
Posted on

Boot Barn Holdings, Inc. Announces First Quarter Fiscal Year 2024 Financial Results

Boot Barn Holdings, Inc. Announces First Quarter Fiscal Year 2024 Financial Results

IRVINE, Calif.–(BUSINESS WIRE)–
Boot Barn Holdings, Inc. (NYSE: BOOT) today announced its financial results for the first fiscal quarter ended July 1, 2023. A Supplemental Financial Presentation is available at investor.bootbarn.com.

For the quarter ended July 1, 2023:

  • Net sales increased 4.9% over the prior-year period to $383.7 million, cycling 19.4% net sales growth in the prior-year period.

  • Same store sales decreased 2.9% compared to the prior-year period, cycling 10.0% same store sales growth in the prior-year period. The 2.9% decrease in consolidated same store sales is comprised of a decrease in retail store same store sales of 1.8% and a decrease in e-commerce same store sales of 10.8%.

  • Net income was $34.3 million, or $1.13 per diluted share, compared to $39.3 million, or $1.29 per diluted share in the prior-year period. Net income per diluted share in the current-year and prior-year period includes an approximately $0.02 and $0.03 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefits, net income per diluted share was $1.11 and $1.26 in the current-year and prior-year period, respectively.

  • The Company opened 16 new stores, bringing its total store count to 361.

Jim Conroy, President and Chief Executive Officer, commented “I am quite pleased with the results of the quarter as we exceeded our quarterly guidance across nearly every measure. Total revenue continued to grow, driven by the performance of new stores. From a same store sales growth perspective, we saw a modest 2.9% decline despite cycling outsized comp sales growth in the first quarter for each of the past two years. Once again, we were able to expand our merchandise margin through a significant increase in the penetration of our margin enhancing exclusive brands which reached 38% of sales for the quarter. Earnings also surpassed our expectations, driven by a steadily improving retail store same store sales trend which turned positive in June and remained positive in July. While uncertainty in the macro environment persists, we are pleased with the positive momentum we have seen in the business.”

Operating Results for the First Quarter Ended July 1, 2023 Compared to the First Quarter Ended June 25, 2022

  • Net sales increased 4.9% to $383.7 million from $365.9 million in the prior-year period. Consolidated same store sales decreased 2.9% with retail store same store sales decreasing 1.8% and e-commerce same store sales decreasing 10.8%. The increase in net sales was the result of the incremental sales from new stores opened over the past twelve months, partially offset by the decrease in consolidated same store sales. Higher average unit retail prices, driven in part by inflation, contributed to the increase in net sales.

  • Gross profit was $142.0 million, or 37.0% of net sales, compared to $137.8 million, or 37.7% of net sales, in the prior-year period. Gross profit increased primarily due to higher sales. The decrease in gross profit rate of 70 basis points was driven primarily by 160 basis points of deleverage in buying, occupancy and distribution center costs partially offset by a 90 basis-point increase in merchandise margin rate. The increase in merchandise margin rate was driven by 80 basis points of product margin expansion resulting primarily from growth in exclusive brand penetration and a 10 basis-point tailwind from lower freight expense as a percentage of net sales.

  • Selling, general and administrative expenses were $95.7 million, or 24.9% of net sales, compared to $85.4 million, or 23.3% of net sales, in the prior-year period. The increase in selling, general and administrative expenses as compared to the prior-year period was primarily a result of higher store payroll and store-related expenses associated with operating 50 new stores and corporate overhead costs in the current year. Selling, general and administrative expenses as a percentage of net sales increased by 160 basis points primarily as a result of higher payroll and overhead costs.

  • Income from operations decreased $6.2 million to $46.2 million, or 12.1% of net sales, compared to $52.4 million, or 14.3% of net sales, in the prior-year period, primarily due to the factors noted above.

  • Net income was $34.3 million, or $1.13 per diluted share, compared to net income of $39.3 million, or $1.29 per diluted share in the prior-year period. The decrease in net income is primarily attributable to the factors noted above. Net income per diluted share in the current-year and prior-year period includes approximately $0.02 and $0.03 per share benefit, respectively, primarily due to income tax accounting for share-based compensation. Excluding the tax benefits, net income per diluted share was $1.11 and $1.26 in the current-year and prior-year period, respectively.

Sales by Channel

The following table includes total net sales growth, same store sales (“SSS”) growth/(decline) and e-commerce as a percentage of net sales for the periods indicated below.

 

Thirteen Weeks

Ended

July 1, 2023

 

 

Four Weeks

Fiscal April

 

Four Weeks

Fiscal May

 

Five Weeks

Fiscal June

 

 

Preliminary

Four Weeks

Fiscal July
 
Total Net Sales Growth

4.9

%

2.1

%

4.2

%

7.8

%

12.9

%
 
Retail Stores SSS

(1.8

)%

(5.0

)%

(2.6

)%

1.5

%

1.0

%
E-commerce SSS

(10.8

)%

(19.1

)%

(9.0

)%

(3.5

)%

(11.4

)%
Consolidated SSS

(2.9

)%

(6.9

)%

(3.3

)%

1.0

%

(0.5

)%
 
E-commerce as a % of Net Sales

9.9

%

10.5

%

10.0

%

9.3

%

9.6

%
 
 

Balance Sheet Highlights as of July 1, 2023

  • Cash of $17.1 million.

  • $26.2 million drawn under our $250 million revolving credit facility.

Fiscal Year 2024 Outlook

The Company is providing updated guidance for the fiscal year ending March 30, 2024, superseding in its entirety the previous guidance issued in its fourth quarter and fiscal year 2023 earnings report on May 17, 2023. As a result, for the fiscal year ending March 30, 2024, the Company now expects:

  • To open 52 new stores.

  • Total sales of $1.715 billion to $1.748 billion, representing growth of 3.5% to 5.5% over the prior year, which was a 53-week year.

  • Same store sales decline of approximately (5.0)% to (3.0)%, with retail store same store sales declines of (5.5)% to (3.5)% and an e-commerce same store sales decline of (4.0)% to flat.

  • Gross profit between $629.7 million and $645.7 million, or approximately 36.7% to 36.9% of sales. Gross profit reflects an estimated 160 basis-point increase in merchandise margin, including a 100 basis-point improvement from freight expense. We anticipate 150 basis points of deleverage in buying, occupancy and distribution center costs.

  • Selling, general and administrative expenses between $419.3 million and $422.9 million. This represents approximately 24.4% to 24.2% of sales.

  • Income from operations between $210.4 million and $222.8 million. This represents approximately 12.3% to 12.7% of sales.

  • Interest expense of $3.2 million.

  • Net income of $154.2 million to $163.4 million.

  • Net income per diluted share of $5.05 to $5.35 based on 30.6 million weighted average diluted shares outstanding.

  • Capital expenditures between $90 million and $95 million.

For the fiscal second quarter ending September 30, 2023, the Company expects:

  • Total sales of $372 million to $379 million, representing growth of 5.8% to 7.8% over the prior year.

  • Same store sales decline of approximately (5.5)% to (3.5)%, with retail store same store sales declines of (4.5)% to (2.5)% and e-commerce same store sales declines of (11.0)% to (9.0)%.

  • Gross profit between $130.7 million and $134.2 million, or approximately 35.1% to 35.4% of sales. Gross profit reflects 180 basis points of deleverage in buying, occupancy and distribution center costs, and an estimated 50 basis-point increase in merchandise margin, including flat freight expense year-over-year.

  • Selling, general and administrative expenses between $95.3 and $96.4 million. This represents approximately 25.6% to 25.4% of sales.

  • Income from operations between $35.4 million and $37.8 million. This represents approximately 9.5% to 10.0% of sales.

  • Net income per diluted share of $0.84 to $0.90 based on 30.6 million weighted average diluted shares outstanding.

Conference Call Information

A conference call to discuss the financial results for the first quarter of fiscal year 2024 is scheduled for today, August 2, 2023, at 4:30 p.m. ET (1:30 p.m. PT). Investors and analysts interested in participating in the call are invited to dial (877) 451-6152. The conference call will also be available to interested parties through a live webcast at investor.bootbarn.com. Please visit the website and select the “Events and Presentations” link at least 15 minutes prior to the start of the call to register and download any necessary software. A Supplemental Financial Presentation is also available on the investor relations section of the Company’s website. A telephone replay of the call will be available until September 2, 2023, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the conference identification number: 13740369. Please note participants must enter the conference identification number in order to access the replay.

About Boot Barn

Boot Barn is the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company offers its loyal customer base a wide selection of work and lifestyle brands. As of the date of this release, Boot Barn operates 363 stores in 44 states, in addition to an e-commerce channel www.bootbarn.com. The Company also operates www.sheplers.com, the nation’s leading pure play online western and work retailer and www.countryoutfitter.com, an e-commerce site selling to customers who live a country lifestyle. For more information, call 888-Boot-Barn or visit www.bootbarn.com.

Forward Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to, by way of example and without limitation, our financial condition, liquidity, profitability, results of operations, margins, plans, objectives, strategies, future performance, business and industry. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate”, “estimate”, “expect”, “project”, “plan“, “intend”, “believe”, “may”, “might”, “will”, “could”, “should”, “can have”, “likely”, “outlook” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, but not all forward-looking statements contain these identifying words. These forward-looking statements are based on assumptions that the Company’s management has made in light of their industry experience and on their perceptions of historical trends, current conditions, expected future developments and other factors they believe are appropriate under the circumstances. As you consider this press release, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. These risks, uncertainties and assumptions include, but are not limited to, the following: decreases in consumer spending due to declines in consumer confidence, local economic conditions or changes in consumer preferences; the Company’s ability to effectively execute on its growth strategy; and the Company’s failure to maintain and enhance its strong brand image, to compete effectively, to maintain good relationships with its key suppliers, and to improve and expand its exclusive product offerings. The Company discusses the foregoing risks and other risks in greater detail under the heading “Risk factors” in the periodic reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect the Company’s actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. Because of these factors, the Company cautions that you should not place undue reliance on any of these forward-looking statements. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict those events or how they may affect the Company. Further, any forward-looking statement speaks only as of the date on which it is made. Except as required by law, the Company does not intend to update or revise the forward-looking statements in this press release after the date of this press release.

Boot Barn Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

July 1,

 

April 1,

 

 

 

2023

 

 

 

2023

 
Assets
Current assets:
Cash and cash equivalents

$

17,099

 

 

$

18,193

 
Accounts receivable, net

 

11,803

 

 

 

13,145

 
Inventories

 

566,294

 

 

 

589,494

 
Prepaid expenses and other current assets

 

36,828

 

 

 

48,341

 
Total current assets

 

632,024

 

 

 

669,173

 
Property and equipment, net

 

275,969

 

 

 

257,143

 
Right-of-use assets, net

 

334,403

 

 

 

326,623

 
Goodwill

 

197,502

 

 

 

197,502

 
Intangible assets, net

 

60,737

 

 

 

60,751

 
Other assets

 

5,835

 

 

 

6,189

 
Total assets

$

1,506,470

 

 

$

1,517,381

 
Liabilities and stockholders’ equity

 

 

 
Current liabilities:

 

 

 
Line of credit

$

26,215

 

 

$

66,043

 
Accounts payable

 

108,203

 

 

 

134,246

 
Accrued expenses and other current liabilities

 

123,997

 

 

 

122,958

 
Short-term lease liabilities

 

54,670

 

 

 

51,595

 
Total current liabilities

 

313,085

 

 

 

374,842

 
Deferred taxes

 

33,987

 

 

 

33,260

 
Long-term lease liabilities

 

342,456

 

 

 

330,081

 
Other liabilities

 

3,246

 

 

 

2,748

 
Total liabilities

 

692,774

 

 

 

740,931

 

 

 

 
Stockholders’ equity:

 

 

 
Common stock, $0.0001 par value; July 1, 2023 – 100,000 shares authorized, 30,195 shares issued; April 1, 2023 – 100,000 shares authorized, 30,072 shares issued

 

3

 

 

 

3

 
Preferred stock, $0.0001 par value; 10,000 shares authorized, no shares issued or outstanding

 

—

 

 

 

—

 
Additional paid-in capital

 

215,262

 

 

 

209,964

 
Retained earnings

 

610,283

 

 

 

576,030

 
Less: Common stock held in treasury, at cost, 226 and 192 shares at July 1, 2023 and April 1, 2023, respectively

 

(11,852

)

 

 

(9,547

)
Total stockholders’ equity

 

813,696

 

 

 

776,450

 
Total liabilities and stockholders’ equity

$

1,506,470

 

 

$

1,517,381

 

Boot Barn Holdings, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

Thirteen Weeks Ended

 

 

July 1,

 

June 25,

 

 

2023

 

2022
Net sales

$

383,695

 

$

365,856

 
Cost of goods sold

 

241,732

 

 

228,026

 
Gross profit

 

141,963

 

 

137,830

 
Selling, general and administrative expenses

 

95,718

 

 

85,405

 
Income from operations

 

46,245

 

 

52,425

 
Interest expense

 

1,023

 

 

725

 
Other income/(loss), net

 

224

 

 

(273

)
Income before income taxes

 

45,446

 

 

51,427

 
Income tax expense

 

11,193

 

 

12,109

 
Net income

$

34,253

 

$

39,318

 

 

 

 
Earnings per share:

 

 

 
Basic

$

1.14

 

$

1.32

 
Diluted

$

1.13

 

$

1.29

 
Weighted average shares outstanding:

 

 

 
Basic

 

29,922

 

 

29,747

 
Diluted

 

30,444

 

 

30,386

 

Boot Barn Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

 

 

 

 

Thirteen Weeks Ended

 

 

July 1,

 

June 25,

 

 

 

2023

 

 

 

2022

 
Cash flows from operating activities
Net income

$

34,253

 

 

$

39,318

 
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:

 

 

 
Depreciation

 

10,603

 

 

 

8,022

 
Stock-based compensation

 

4,953

 

 

 

4,701

 
Amortization of intangible assets

 

14

 

 

 

16

 
Noncash lease expense

 

13,117

 

 

 

11,119

 
Amortization and write-off of debt issuance fees and debt discount

 

27

 

 

 

44

 
Loss on disposal of assets

 

176

 

 

 

177

 
Deferred taxes

 

727

 

 

 

1,575

 
Changes in operating assets and liabilities:

 

 

 
Accounts receivable, net

 

1,452

 

 

 

600

 
Inventories

 

23,200

 

 

 

(60,080

)
Prepaid expenses and other current assets

 

11,486

 

 

 

(20,630

)
Other assets

 

354

 

 

 

(173

)
Accounts payable

 

(24,872

)

 

 

18,024

 
Accrued expenses and other current liabilities

 

158

 

 

 

(21,523

)
Other liabilities

 

498

 

 

 

150

 
Operating leases

 

(5,344

)

 

 

(7,108

)
Net cash provided by/(used in) operating activities

$

70,802

 

 

$

(25,768

)
Cash flows from investing activities

 

 

 
Purchases of property and equipment

$

(29,895

)

 

$

(20,835

)
Net cash used in investing activities

$

(29,895

)

 

$

(20,835

)
Cash flows from financing activities

 

 

 
(Payments)/Borrowings on line of credit, net

$

(39,828

)

 

$

46,324

 
Repayments on debt and finance lease obligations

 

(213

)

 

 

(220

)
Tax withholding payments for net share settlement

 

(2,305

)

 

 

(4,408

)
Proceeds from the exercise of stock options

 

345

 

 

 

247

 
Net cash (used in)/provided by financing activities

$

(42,001

)

 

$

41,943

 

 

 

 
Net decrease in cash and cash equivalents

 

(1,094

)

 

 

(4,660

)
Cash and cash equivalents, beginning of period

 

18,193

 

 

 

20,674

 
Cash and cash equivalents, end of period

$

17,099

 

 

$

16,014

 

 

 

 
Supplemental disclosures of cash flow information:

 

 

 
Cash paid for income taxes

$

646

 

 

$

19,226

 
Cash paid for interest

$

1,151

 

 

$

534

 
Supplemental disclosure of non-cash activities:

 

 

 
Unpaid purchases of property and equipment

$

17,517

 

 

$

17,473

 

Boot Barn Holdings, Inc.

Store Count
 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

 

Quarter Ended

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

December 25,

 

September 25,

2023

 

2023

 

2022

 

2022

 

2022

 

2022

 

2021

 

2021
Store Count (BOP)

345

333

321

311

300

289

278

276

 
Opened/Acquired

16

12

12

10

11

11

11

3

 
Closed

—

—

—

—

—

—

—

(1

)
Store Count (EOP)

361

345

333

321

311

300

289

278

 

Boot Barn Holdings, Inc.

Selected Store Data

 

 

 

 

 

 

 

 

 

Thirteen

Weeks Ended

 

Fourteen

Weeks Ended

 

Thirteen Weeks Ended

 

 

July 1,

 

April 1,

 

December 24,

 

September 24,

 

June 25,

 

March 26,

 

December 25,

 

September 25,

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 
Selected Store Data:
Same Store Sales (decline)/growth

 

(2.9

)%

 

(5.5

)%

 

(3.6

)%

 

2.3

%

 

10.0

%

 

33.3

%

 

54.2

%

 

61.7

%
Stores operating at end of period

 

361

 

 

345

 

 

333

 

 

321

 

 

311

 

 

300

 

 

289

 

 

278

 
Total retail store square footage, end of period (in thousands)

 

3,914

 

 

3,735

 

 

3,598

 

 

3,451

 

 

3,333

 

 

3,194

 

 

3,063

 

 

2,940

 
Average store square footage, end of period

 

10,841

 

 

10,825

 

 

10,806

 

 

10,751

 

 

10,717

 

 

10,648

 

 

10,597

 

 

10,575

 
Average net sales per store (in thousands)

$

958

 

$

1,088

 

$

1,320

 

$

966

 

$

1,031

 

$

1,094

 

$

1,372

 

$

965

 

 

Investor Contact:

ICR, Inc.

Brendon Frey, 203-682-8216

[email protected]

or

Company Contact:

Boot Barn Holdings, Inc.

Mark Dedovesh, 949-453-4489

Senior Vice President, Investor Relations & Financial Planning

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Fashion Other Retail Retail Footwear Specialty

MEDIA:

Posted on

Coca-Cola Consolidated Reports Second Quarter and First Half 2023 Results

  • Second quarter of 2023 net sales increased 9% versus the second quarter of 2022.
  • Gross profit in the second quarter of 2023 was $672 million, an increase of 22% versus the second quarter of 2022. Gross margin in the second quarter of 2023 improved by 410 basis points(a) to 38.6%.
  • Income from operations for the first half of 2023 was $440 million, up $161 million, or 58%, versus the first half of 2022. Operating margin for the first half of 2023 was 13.3% as compared to 9.3% for the first half of 2022, an increase of 400 basis points.

Key Results

    Second Quarter       First Half    
(in millions)     2023       2022     Change     2023       2022     Change
Standard physical case volume(1)     92.6       96.4     (4.0) %     175.0       181.5     (3.6) %
Net sales   $ 1,738.8     $ 1,595.2     9.0 %   $ 3,310.5     $ 2,999.6     10.4 %
Gross profit   $ 671.6     $ 550.7     22.0 %   $ 1,295.7     $ 1,058.2     22.4 %
Gross margin     38.6 %     34.5 %         39.1 %     35.3 %    
Income from operations   $ 233.7     $ 147.3     58.6 %   $ 439.7     $ 278.3     58.0 %
Operating margin     13.4 %     9.2 %         13.3 %     9.3 %    
                         
Beverage Sales   Second Quarter       First Half    
(in millions)     2023       2022     Change     2023       2022     Change
Sparkling bottle/can   $ 1,004.4     $ 879.9     14.1 %   $ 1,918.7     $ 1,655.9     15.9 %
Still bottle/can   $ 573.6     $ 539.6     6.3 %   $ 1,082.9     $ 1,006.8     7.6 %

(1)   A standard physical case is a volume metric used to standardize differing package configurations in order to measure delivered cases on an equivalent basis.

Second Quarter and First Half 2023 Review

CHARLOTTE, N.C., Aug. 02, 2023 (GLOBE NEWSWIRE) — Coca‑Cola Consolidated, Inc. (NASDAQ: COKE) today reported operating results for the second quarter ended June 30, 2023 and the first half of fiscal 2023.

“The strong business momentum we attained early this year continued in the second quarter as we posted another quarter of very strong profit growth and achieved a record high operating margin of 13.4%,” said J. Frank Harrison, III, Chairman and Chief Executive Officer. “Our results are a testament to the strength of our brands and the dedication of our people as we navigate the current retail environment and the ever-evolving preferences of our consumers. I believe the plans we have in place for the second half will enable us to build on our first-half success, further strengthen our field operations and drive continued consumer engagement with our brands.”

Net sales increased 9% to $1.74 billion in the second quarter of 2023 and increased 10% to $3.31 billion in the first half of 2023. The increase in net sales was driven primarily by price increases taken across our product portfolio over the last year.

Standard physical case volume declined 4.0% in the second quarter of 2023 and declined 3.6% in the first half of 2023. Sparkling category volume decreased 2.1% during the second quarter; however, our Sparkling portfolio continues to perform well versus historical price elasticities typically associated with higher pricing. Sales in Immediate Consumption continue to perform well, outpacing sales of take-home packages. Still volume declined 8.9% during the second quarter as the overall sports drinks category slowed considerably. Other Still categories such as energy and enhanced water continue to perform well with Monster and smartwater both achieving solid growth in the quarter.

Gross profit in the second quarter of 2023 was $671.6 million, an increase of $120.9 million, or 22%, while gross margin improved 410 basis points to 38.6%. The improvement in gross profit resulted primarily from higher prices for our products and a moderation of prices for certain commodities. Gross profit in the first half of 2023 was $1.30 billion, an increase of $237.4 million, or 22%. The Company continues to expect pricing growth to slow in the second half of 2023 as we hurdle 2022 price increases.

“Our strong second quarter results reinforce the success we are having with our retail partners in commercializing our local marketing plans and providing our consumers with a variety of affordable packages,” said Dave Katz, President and Chief Operating Officer. “This is a very dynamic period as we see consumers shifting between retail channels, especially within supermarkets, Club and Value stores. As overall volume slowed in the second quarter, we have proactively engaged with our retail partners to help drive consumer traffic and transaction growth for the balance of this year.”

Selling, delivery and administrative (“SD&A”) expenses in the second quarter of 2023 increased $34.5 million, or 9%. SD&A expenses as a percentage of net sales decreased 10 basis points to 25.2% in the second quarter of 2023. The increase in SD&A expenses related primarily to an increase in labor costs, resulting from certain compensation and benefits adjustments made in the prior year to retain and reward our teammates in a challenging labor environment. In addition, broad inflationary increases across a number of SD&A categories pushed expenses higher during the quarter. SD&A expenses in the first half of 2023 increased $76.0 million, or 10%. SD&A expenses as a percentage of net sales in the first half of 2023 decreased 10 basis points to 25.9% as compared to the first half of 2022. We expect the rate of increase to slow in the second half of this year as we hurdle labor adjustments made in late 2022.

Income from operations in the second quarter of 2023 was $233.7 million, compared to $147.3 million in the second quarter of 2022, an increase of 59%. On an adjusted(b) basis, income from operations in the second quarter of 2023 increased 47% as compared to the second quarter of 2022. Operating margin for the second quarter of 2023 was 13.4% as compared to 9.2% in the second quarter of 2022, an increase of 420 basis points.

Net income in the second quarter of 2023 was $122.3 million, compared to $99.6 million in the second quarter of 2022, an improvement of $22.8 million. On an adjusted(b) basis, net income in the second quarter of 2023 was $172.8 million, compared to $112.2 million in the second quarter of 2022, an increase of $60.6 million.

Second quarter net income was adversely impacted by routine, non-cash fair value adjustments to our acquisition related contingent consideration liability, driven by changes in the discount rate and future cash flow projections used to compute the fair value of the liability. Second quarter net income was also adversely impacted by the partial settlement of our primary pension plan, which resulted in a non-cash charge of $39.8 million. In the third quarter of 2023, the Company expects to record an additional non-cash charge of approximately $79 million related to the remaining settlement of the primary pension plan.

Income tax expense for the second quarter of 2023 was $42.4 million, compared to $34.4 million in the second quarter of 2022, resulting in an effective income tax rate of approximately 26% for both periods. For the second quarter of 2023, basic net income per share was $13.05 and adjusted(b) basic net income per share was $18.43.

Cash flows provided by operations for first half 2023 were $383.3 million, compared to $243.5 million for first half 2022. Cash flows from operations reflected our strong operating performance and the timing of certain working capital payments and receipts during the second quarter. In the first half of 2023, we invested $92.9 million in capital expenditures as we continue to optimize our supply chain and invest for the future growth of small bottle PET packages and mini cans. In fiscal year 2023, we expect our capital expenditures to be between $250 million and $300 million.

(a) All comparisons are to the corresponding period in the prior year unless specified otherwise.
(b) The discussion of the operating results for the second quarter ended June 30, 2023 and the first half of fiscal 2023 includes selected non-GAAP financial information, such as “adjusted” results. The schedules in this news release reconcile such non-GAAP financial measures to the most directly comparable GAAP financial measures.

CONTACTS:    
Josh Gelinas (Media)   Scott Anthony (Investors)
Vice President, Communications   Executive Vice President & Chief Financial Officer
(704) 807-3703   (704) 557-4633
[email protected]   [email protected]
     

A PDF accompanying this release is available at: http://ml.globenewswire.com/Resource/Download/b58d7ce8-9221-46bf-9fa4-16942fe4485d

About Coca-Cola Consolidated, Inc.

Coca‑Cola Consolidated is the largest Coca‑Cola bottler in the United States. Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably. For over 121 years, we have been deeply committed to the consumers, customers and communities we serve and passionate about the broad portfolio of beverages and services we offer. We make, sell and distribute beverages of The Coca‑Cola Company and other partner companies in more than 300 brands and flavors across 14 states and the District of Columbia, to approximately 60 million consumers.

Headquartered in Charlotte, N.C., Coca‑Cola Consolidated is traded on The Nasdaq Global Select Market under the symbol “COKE”. More information about the Company is available at www.cokeconsolidated.com. Follow Coca‑Cola Consolidated on Facebook, Twitter, Instagram and LinkedIn.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this news release are “forward-looking statements” that involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words “anticipate,” “believe,” “expect,” “intend,” “project,” “may,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company’s best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this news release. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: increased costs (including due to inflation), disruption of supply or unavailability or shortages of raw materials, fuel and other supplies; the reliance on purchased finished products from external sources; changes in public and consumer perception and preferences, including concerns related to product safety and sustainability, artificial ingredients, brand reputation and obesity; the inability to attract and retain front-line employees in a tight labor market; changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients and product safety and sustainability; decreases from historic levels of marketing funding support provided to us by The Coca‑Cola Company and other beverage companies; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of advertising, marketing and product innovation spending by The Coca‑Cola Company and other beverage companies, or advertising campaigns that are negatively perceived by the public; any failure of the several Coca‑Cola system governance entities of which we are a participant to function efficiently or on our best behalf and any failure or delay of ours to receive anticipated benefits from these governance entities; provisions in our beverage distribution and manufacturing agreements with The Coca‑Cola Company that could delay or prevent a change in control of us or a sale of our Coca‑Cola distribution or manufacturing businesses; the concentration of our capital stock ownership; our inability to meet requirements under our beverage distribution and manufacturing agreements; changes in the inputs used to calculate our acquisition related contingent consideration liability; technology failures or cyberattacks on our technology systems or our effective response to technology failures or cyberattacks on our customers’, suppliers’ or other third parties’ technology systems; unfavorable changes in the general economy; changes in our top customer relationships and marketing strategies; lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition; the effect of changes in our level of debt, borrowing costs and credit ratings on our access to capital and credit markets, operating flexibility and ability to obtain additional financing to fund future needs; the failure to attract, train and retain qualified employees while controlling labor costs, and other labor issues; the failure to maintain productive relationships with our employees covered by collective bargaining agreements, including failing to renegotiate collective bargaining agreements; changes in accounting standards; our use of estimates and assumptions; changes in tax laws, disagreements with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather; climate change or legislative or regulatory responses to such change; and the impact of the COVID-19 pandemic, any variants of the virus and any other similar pandemic or public health situation. These and other factors are discussed in the Company’s regulatory filings with the United States Securities and Exchange Commission, including those in “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The forward-looking statements contained in this news release speak only as of this date, and the Company does not assume any obligation to update them, except as may be required by applicable law.

    FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

    Second Quarter   First Half
(in thousands, except per share data)     2023     2022     2023     2022
Net sales   $ 1,738,832   $ 1,595,215   $ 3,310,474   $ 2,999,573
Cost of sales     1,067,255     1,044,556     2,014,791     1,941,338
Gross profit     671,577     550,659     1,295,683     1,058,235
Selling, delivery and administrative expenses     437,907     403,366     855,959     779,957
Income from operations     233,670     147,293     439,724     278,278
Interest expense, net     1,353     7,146     4,282     14,845
Pension plan settlement expense     39,777     —     39,777     —
Other expense, net     27,788     6,199     71,711     2,920
Income before taxes     164,752     133,948     323,954     260,513
Income tax expense     42,433     34,386     83,508     67,561
Net income   $ 122,319   $ 99,562   $ 240,446   $ 192,952
                 
Basic net income per share:                
Common Stock   $ 13.05   $ 10.62   $ 25.65   $ 20.58
Weighted average number of Common Stock shares outstanding     8,369     8,369     8,369     7,863
                 
Class B Common Stock   $ 13.05   $ 10.62   $ 25.65   $ 20.62
Weighted average number of Class B Common Stock shares outstanding     1,005     1,005     1,005     1,511
                 
Diluted net income per share:                
Common Stock   $ 13.02   $ 10.59   $ 25.59   $ 20.53
Weighted average number of Common Stock shares outstanding – assuming dilution     9,396     9,399     9,396     9,399
                 
Class B Common Stock   $ 13.01   $ 10.59   $ 25.51   $ 20.56
Weighted average number of Class B Common Stock shares outstanding – assuming dilution     1,027     1,030     1,027     1,536
 

    FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands)   June 30, 2023   December 31, 2022

ASSETS
 		       
Current Assets:        
Cash and cash equivalents   $ 430,172   $ 197,648
Trade accounts receivable, net     586,104     515,928
Other accounts receivable     113,229     90,417
Inventories     333,874     347,545
Prepaid expenses and other current assets     84,634     94,263
Total current assets     1,548,013     1,245,801
Property, plant and equipment, net     1,176,339     1,183,730
Right-of-use assets – operating leases     128,759     140,588
Leased property under financing leases, net     5,608     6,431
Other assets     132,017     115,892
Goodwill     165,903     165,903
Other identifiable intangible assets, net     837,898     851,200
Total assets   $ 3,994,537   $ 3,709,545
         

LIABILITIES AND EQUITY
 		       
Current Liabilities:        
Current portion of obligations under operating leases   $ 26,440   $ 27,635
Current portion of obligations under financing leases     2,393     2,303
Dividends payable     —     32,808
Accounts payable and accrued expenses     863,149     842,410
Total current liabilities     891,982     905,156
Deferred income taxes     151,630     150,222
Pension and postretirement benefit obligations and other liabilities     857,426     813,680
Noncurrent portion of obligations under operating leases     108,500     118,763
Noncurrent portion of obligations under financing leases     6,299     7,519
Long-term debt     598,992     598,817
Total liabilities     2,614,829     2,594,157
         
Equity:        
Stockholders’ equity     1,379,708     1,115,388
Total liabilities and equity   $ 3,994,537   $ 3,709,545
 

    FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

    First Half
(in thousands)     2023       2022  
Cash Flows from Operating Activities:        
Net income   $ 240,446     $ 192,952  
Depreciation expense, amortization of intangible assets and deferred proceeds, net     87,185       85,852  
Fair value adjustment of acquisition related contingent consideration     67,174       (1,436 )
Pension plan settlement expense     39,777       —  
Deferred income taxes     (7,848 )     11,189  
Change in current assets and current liabilities     (41,957 )     (59,004 )
Change in noncurrent assets and noncurrent liabilities     (6,061 )     12,151  
Other     4,622       1,831  
Net cash provided by operating activities   $ 383,338     $ 243,535  
         
Cash Flows from Investing Activities:        
Additions to property, plant and equipment   $ (92,893 )   $ (145,182 )
Acquisition of distribution rights     —       (30,149 )
Other     (5,766 )     3,717  
Net cash used in investing activities   $ (98,659 )   $ (171,614 )
         
Cash Flows from Financing Activities:        
Cash dividends paid   $ (37,495 )   $ (4,687 )
Payments of acquisition related contingent consideration     (13,376 )     (18,710 )
Other     (1,284 )     (2,035 )
Net cash used in financing activities   $ (52,155 )   $ (25,432 )
         
Net increase in cash during period   $ 232,524     $ 46,489  
Cash at beginning of period     197,648       142,314  
Cash at end of period   $ 430,172     $ 188,803  
 

    NON-GAAP FINANCIAL MEASURES

(c)


The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP):

  Second Quarter 2023
(in thousands, except per share data)   Gross profit   SD&A
expenses 		  Income from operations   Income
before taxes 		  Net income   Basic net
income per
share
Reported results (GAAP)   $ 671,577   $ 437,907     $ 233,670   $ 164,752   $ 122,319   $ 13.05
Fair value adjustment of acquisition related contingent consideration     —     —       —     25,520     19,214     2.05
Fair value adjustments for commodity derivative instruments     1,097     (224 )     1,321     1,321     994     0.10
Supply chain optimization     474     —       474     474     357     0.04
Pension plan settlement expense     —     —       —     39,777     29,948     3.19
Total reconciling items     1,571     (224 )     1,795     67,092     50,513     5.38
Adjusted results (non-GAAP)   $ 673,148   $ 437,683     $ 235,465   $ 231,844   $ 172,832   $ 18.43
                                       
Adjusted % Change vs. Second Quarter 2022     19.3 %   8.2 %     47.1 %                
                                       

  Second Quarter 2022
(in thousands, except per share data)   Gross profit   SD&A
expenses 		  Income from
operations 		  Income
before taxes 		  Net income   Basic net
income per
share
Reported results (GAAP)   $ 550,659   $ 403,366     $ 147,293   $ 133,948   $ 99,562   $ 10.62
Fair value adjustment of acquisition related contingent consideration     —     —       —     4,021     3,028     0.32
Fair value adjustments for commodity derivative instruments     13,663     998       12,665     12,665     9,536     1.02
Supply chain optimization     84     (33 )     117     117     88     0.01
Total reconciling items     13,747     965       12,782     16,803     12,652     1.35
Adjusted results (non-GAAP)   $ 564,406   $ 404,331     $ 160,075   $ 150,751   $ 112,214   $ 11.97

  First Half 2023
(in thousands, except per share data)   Gross profit   SD&A
expenses 		  Income from
operations 		    Income
before taxes 		    Net income     Basic net
income per
share
Reported results (GAAP)   $ 1,295,683   $ 855,959     $ 439,724     $ 323,954     $ 240,446     $ 25.65  
Fair value adjustment of acquisition related contingent consideration     —     —       —       67,174       50,575       5.40  
Fair value adjustments for commodity derivative instruments     1,492     (2,914 )     4,406       4,406       3,317       0.35  
Supply chain optimization     823     —       823       823       620       0.07  
Pension plan settlement expense     —     —       —       39,777       29,948       3.19  
Total reconciling items     2,315     (2,914 )     5,229       112,180       84,460       9.01  
Adjusted results (non-GAAP)   $ 1,297,998   $ 853,045     $ 444,953     $ 436,134     $ 324,906     $ 34.66  
                                               
Adjusted % Change vs. First Half 2022     21.9 %   8.4 %     60.4 %                        
                                               

  First Half 2022
(in thousands, except per share data)   Gross profit   SD&A
expenses 		  Income from
operations 		  Income
before taxes 		  Net income   Basic net

income per
share
Reported results (GAAP)   $ 1,058,235   $ 779,957     $ 278,278     $ 260,513     $ 192,952     $ 20.58  
Fair value adjustment of acquisition related contingent consideration     —     —       —       (1,436 )     (1,081 )     (0.12 )
Fair value adjustments for commodity derivative instruments     6,169     7,223       (1,054 )     (1,054 )     (794 )     (0.08 )
Supply chain optimization     89     (72 )     161       161       121       0.01  
Total reconciling items     6,258     7,151       (893 )     (2,329 )     (1,754 )     (0.19 )
Adjusted results (non-GAAP)   $ 1,064,493   $ 787,108     $ 277,385     $ 258,184     $ 191,198     $ 20.39  

(c) The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of the financial statements with additional, meaningful financial information that should be considered, in addition to the measures reported in accordance with GAAP, when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.



Posted on

Herbalife Reports Second Quarter 2023 Results

Herbalife Reports Second Quarter 2023 Results

LOS ANGELES–(BUSINESS WIRE)–
Herbalife Ltd. (NYSE: HLF) today reported financial results for the second quarter ended June 30, 2023:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230802526262/en/

“We are building strong momentum and our trends are improving. While we still have work to do, I remain confident we are on the path to return to growth in fourth quarter 2023,” said Michael Johnson, Chairman and CEO of Herbalife.

Highlights

  • Second quarter 2023 net sales of $1.3 billion, down 5.7% compared to second quarter 2022; on a constant currency basis1, net sales declined 4.2% compared to the prior year period

  • Year-over-year reported net sales trends improved for two sequential quarters

  • Second quarter 2023 reported net income of $59.9 million and adjusted EBITDA2 of $169.6 million

  • Second quarter 2023 reported diluted EPS of $0.60 and adjusted diluted EPS2 of $0.74

  • Annual cost savings of at least $90 million now expected related to Company’s Transformation Program, with more than $45 million anticipated to be realized in 2023

  • Recognized pre-tax expenses of approximately $10 million in second quarter related to Company’s Transformation Program

  • Herbalife One digital technology platform development continues to progress and remains on track

________________

1 Growth/decline in net sales excluding the effects of foreign exchange is based on “net sales in local currency,” a non-GAAP financial measure. See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a discussion of why we believe adjusting for the effects of foreign exchange is useful.

2 Adjusted EBITDA and adjusted diluted EPS are non-GAAP measures. See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a detailed reconciliation of these measures to the most directly comparable GAAP measure, and a discussion of why we believe these non-GAAP measures are useful.

Management Commentary

Herbalife reported second quarter 2023 net sales of $1.3 billion, down 5.7% year-over-year, marking the second consecutive quarter of improved year-over-year net sales trends. On a constant currency basis1, net sales declined 4.2% year-over-year.

Second quarter gross profit margin improved to 77.0% from 76.2% in first quarter 2023. On a year-over-year basis, gross margin benefited by approximately 300 basis points of pricing, while input cost inflation and foreign currency remained a headwind of approximately 180 basis points and 90 basis points, respectively. Second quarter net income was $59.9 million. Adjusted EBITDA2 of $169.6 million includes approximately $17 million of foreign currency headwinds year-over-year, with adjusted EBITDA margin of 12.9%. Diluted EPS was $0.60, with adjusted diluted EPS2 of $0.74, which includes a $0.12 year-over-year foreign currency headwind.

During the second quarter, approximately 75,000 distributors from around the world attended Extravaganza training events in Singapore, China, Peru and India. Distributor engagement remains strong with record attendance levels in India. The Extravaganzas marked the return of in person events in these regions for the first time since 2019, bringing renewed energy to attending distributors.

At the end of July, the Company held its North America Extravaganza in San Antonio, Texas, where it launched for the U.S. market its first-ever vegan product line, Herbalife V. The line includes five plant-based products, all of which are third-party certified Vegan, Organic, Kosher, and non-GMO Project Verified.

The development of Herbalife One, the Company’s new, fully integrated, modernized digital technology platform, continues to progress and remains on track. The platform is expected to streamline the Company’s business, accelerate data utilization, reduce costs and simplify transactions for its distributors and their customers. The Company will begin launching its new modernized website in late third quarter 2023, starting with Singapore, where it will test, refine and optimize the content and functionality as necessary prior to expanding to approximately 40 additional markets that represent approximately 80% of the Company’s sales by the end of the year. In fourth quarter 2023, the Company plans to launch its new distributor e-commerce platform in the UK and Spain, with the majority of the remaining markets expected to launch in 2024. Total planned investments for Herbalife One is approximately $400 million through 2025.

For the six months ended June 30, 2023, capital expenditures, including the digital technology platform, were approximately $69 million. We expect to incur total capital expenditures of approximately $150 million to $200 million for the full year of 2023.

“This is a pivotal time for Herbalife. Our trends are improving, we are delivering on our product innovation commitments and our distributors are more energized and engaged in our business than I’ve ever seen,” said Chairman and CEO, Michael Johnson. “We expect this high-level of engagement and strong momentum to continue, driving our return to growth by the end of 2023.”

The Company continues to make progress implementing its Transformation Program, which was initiated in 2021 to strategically optimize global business processes. During the quarter, the Company recognized pre-tax expenses of approximately $10 million in SG&A related to the program, which are excluded from the adjusted results. Based on the Company’s actions to date, it now expects to deliver total program run rate savings of at least $90 million (up from more than $70 million) in 2024 and beyond, with more than $45 million of these savings anticipated to be realized in 2023 (up from approximately $35 million). The Company expects to incur total program pre-tax expenses of at least $75 million (up from at least $60M).

“The second quarter marks our second consecutive quarter of improved year-over-year net sales trends,” said Chief Financial Officer, Alex Amezquita. “Our Transformation Program has exceeded our initial expectations and the higher cost savings are positioning us to improve future profitability.”

In a separate announcement today, the Company announced Stephan Paulo Gratziani, an independent Herbalife distributor for over 32 years and a member of the Company’s Founder’s Circle, has been appointed Chief Strategy Officer effective August 4, 2023. Mr. Gratziani will report to Michael Johnson.

Additionally, John DeSimone will transition from his position as Chief Strategic Officer to Special Advisor to the Company.

Second Quarter 2023 Key Metrics

Regional Net Sales and Foreign Exchange (“FX”) Impact

Region

Reported Net Sales

2Q ’23 (mil)

Growth/Decline

including FX

vs. 2Q ’22

Growth/Decline

excluding FX

vs. 2Q ’22 1

Asia Pacific

$

425.8

(5.5%)

(1.3%)

North America

 

303.6

(11.6%)

(11.5%)

EMEA

 

289.6

0.2%

2.2%

Latin America(a)

 

207.0

0.6%

(4.4%)

China

 

88.0

(15.1%)

(10.0%)

Worldwide Total

$

1,314.0

(5.7%)

(4.2%)
 

Regional Volume Point Metrics

 

Volume Points

Region

2Q ’23 (mil)

YoY % Chg.

Asia Pacific

530.5

(8.5%)

North America

313.4

(21.1%)

EMEA

331.2

(6.7%)

Latin America(a)

258.5

(16.9%)

China

62.6

(10.3%)

Worldwide Total

1,496.2

(12.6%)

(a) During the third quarter of 2022, the Company combined its Mexico and South and Central America regions into one geographic region now named Latin America. Historical information has been reclassified to conform with the current period geographic presentation.

Earnings Conference Call

Herbalife senior management will host a live audio webcast and conference call to discuss its recent financial results and provide an update on current business trends on Wednesday, August 2, 2023, at 2:30 p.m. PT (5:30 p.m. ET).

The live audio webcast will be available at edge.media-server.com/mmc/p/hxvi5qqq. Participants joining via the conference call will need to register to receive dial-in information to the call, and may do so by visiting the Investor Relations section of the Company’s website at https://ir.herbalife.com/news-events/ir-calendar/detail/10611/q2-2023-herbalife-nutrition-ltd-earnings-conference-call. Senior management also plans to reference slides during the call, which will also be available on the Investor Relations section of the Company’s website.

A replay of the event will be available following the completion of the live audio webcast and conference call under the Investor Relations section of the Company’s website at https://ir.herbalife.com.

About Herbalife Ltd.

Herbalife (NYSE: HLF) is a premier health and wellness company and community that has been changing people’s lives with great nutrition products and a business opportunity for its independent distributors since 1980. The Company offers science-backed products to consumers in more than 90 markets through entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle in order to live their best life.

For more information, visit https://ir.herbalife.com.

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. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management, including for future operations, capital expenditures, or share repurchases; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief or expectation; and any statements of assumptions underlying any of the foregoing or other future events. Forward-looking statements may include, among others, the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “anticipate” or any other similar words.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include the following:

  • the potential impacts of current global economic conditions, including inflation, on us; our Members, customers, and supply chain; and the world economy;
  • our ability to attract and retain Members;
  • our relationship with, and our ability to influence the actions of, our Members;
  • our noncompliance with, or improper action by our employees or Members in violation of, applicable U.S. and foreign laws, rules, and regulations;
  • adverse publicity associated with our Company or the direct-selling industry, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;
  • changing consumer preferences and demandsand evolving industry standards, including with respect to climate change, sustainability, and other environmental, social, and governance, or ESG, matters;
  • the competitive nature of our business and industry;
  • legal and regulatory matters, including regulatory actions concerning, or legal challenges to, our products or network marketing program and product liability claims;
  • the Consent Order entered into with the FTC, the effects thereof and any failure to comply therewith;
  • risks associated with operating internationally and in China;
  • our ability to execute our growth and other strategic initiatives, including implementation of our Transformation Program and increased penetration of our existing markets;
  • any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, including the war in Ukraine, cybersecurity incidents, pandemics such as the COVID-19 pandemic, and/or other acts by third parties;
  • our ability to adequately source ingredients, packaging materials, and other raw materials and manufacture and distribute our products;
  • our reliance on our information technology infrastructure;
  • noncompliance by us or our Members with any privacy laws, rules, or regulations or any security breach involving the misappropriation, loss, or other unauthorized use or disclosure of confidential information;
  • contractual limitations on our ability to expand or change our direct-selling business model;
  • the sufficiency of our trademarks and other intellectual property;
  • product concentration;
  • our reliance upon, or the loss or departure of any member of, our senior management team;
  • restrictions imposed by covenants in the agreements governing our indebtedness;
  • risks related to our convertible notes;
  • changes in, and uncertainties relating to, the application of transfer pricing, income tax, customs duties, value added taxes, and other tax laws, treaties, and regulations, or their interpretation;
  • our incorporation under the laws of the Cayman Islands; and
  • share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.

Additional factors and uncertainties that could cause actual results or outcomes to differ materially from our forward-looking statements are set forth in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023, filed with the Securities and Exchange Commission on August 2, 2023, including under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our Condensed Consolidated Financial Statements and the related Notes, and in Part I, Item 1A, Risk Factors, of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on February 14, 2023. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

Forward-looking statements made in this release speak only as of the date hereof. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

Results of Operations

Herbalife Ltd. and Subsidiaries  
Condensed Consolidated Statements of Income  
(In millions, except per share amounts)  
   
   
Three Months Ended Six Months Ended  
6/30/2023 6/30/2022 6/30/2023 6/30/2022  
(unaudited)  
North America

$

303.6

 

$

343.5

 

$

600.8

 

$

669.7

 

  
EMEA

 

289.6

 

 

289.0

 

 

557.7

 

 

584.0

 

  
Asia Pacific

 

425.8

 

 

450.7

 

 

839.4

 

 

858.4

 

  
Latin America

 

207.0

 

 

205.8

 

 

412.5

 

 

407.1

 

  
China

 

88.0

 

 

103.7

 

 

155.7

 

 

209.3

 

  

Worldwide Net sales

 

1,314.0

 

 

1,392.7

 

 

2,566.1

 

 

2,728.5

 

  
Cost of sales

 

301.6

 

 

315.8

 

 

600.2

 

 

622.9

 

  
Gross profit

 

1,012.4

 

 

1,076.9

 

 

1,965.9

 

 

2,105.6

 

  
Royalty overrides

 

429.7

 

 

452.9

 

 

845.7

 

 

886.7

 

  
Selling, general, and administrative expenses

 

460.5

 

 

470.0

 

 

936.4

 

 

924.9

 

  
Other operating income (1)

 

(1.2

)

 

(1.8

)

 

(10.1

)

 

(14.9

)

  
Operating income

 

123.4

 

 

155.8

 

 

193.9

 

 

308.9

 

  
Interest expense, net

 

38.4

 

 

31.7

 

 

77.8

 

 

61.4

 

  
Income before income taxes

 

85.0

 

 

124.1

 

 

116.1

 

 

247.5

 

  
Income taxes

 

25.1

 

 

37.6

 

 

26.9

 

 

62.8

 

  
Net income

$

59.9

 

$

86.5

 

$

89.2

 

$

184.7

 

  
   
Weighted-average shares outstanding:  
Basic

 

99.1

 

 

98.2

 

 

98.8

 

 

99.1

 

  
Diluted

 

99.5

 

 

98.7

 

 

99.8

 

 

100.2

 

  
   
Earnings per share:  
Basic

$

0.60

 

$

0.88

 

$

0.90

 

$

1.86

 

  
Diluted

$

0.60

 

$

0.88

 

$

0.89

 

$

1.84

 

  
   
(1) Other operating income for the three and six months ended June 30, 2023 and June 30, 2022 relates to certain China government grant income.  
   
Herbalife Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets
(In millions)
 
 
Jun 30, 2023 Dec 31, 2022
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents

$

526.6

 

$

508.0

 
Receivables, net

 

86.3

 

 

70.6

 
Inventories

 

525.1

 

 

580.7

 
Prepaid expenses and other current assets

 

233.4

 

 

196.8

 
Total Current Assets

 

1,371.4

 

 

1,356.1

 
 
Property, plant and equipment, net

 

485.8

 

 

486.3

 
Operating lease right-of-use assets

 

200.5

 

 

207.1

 
Marketing-related intangibles and other intangible assets, net

 

314.8

 

 

315.7

 
Goodwill

 

94.4

 

 

93.2

 
Other assets

 

303.7

 

 

273.6

 
Total Assets

$

2,770.6

 

$

2,732.0

 
 
 
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable

$

88.6

 

$

89.8

 
Royalty overrides

 

328.0

 

 

343.3

 
Current portion of long-term debt

 

295.8

 

 

29.5

 
Other current liabilities

 

528.4

 

 

514.0

 
Total Current Liabilities

 

1,240.8

 

 

976.6

 
 
Non-current liabilities:
Long-term debt, net of current portion

 

2,326.5

 

 

2,662.5

 
Non-current operating lease liabilities

 

184.1

 

 

192.4

 
Other non-current liabilities

 

169.6

 

 

166.4

 
Total Liabilities

 

3,921.0

 

 

3,997.9

 
 
Commitments and Contingencies
 
Shareholders’ deficit:
Common shares

 

0.1

 

 

0.1

 
Paid-in capital in excess of par value

 

202.8

 

 

188.7

 
Accumulated other comprehensive loss

 

(238.0

)

 

(250.2

)
Accumulated deficit

 

(1,115.3

)

 

(1,204.5

)
Total Shareholders’ Deficit

 

(1,150.4

)

 

(1,265.9

)
 
Total Liabilities and Shareholders’ Deficit

$

2,770.6

 

$

2,732.0

 
 
Herbalife Ltd. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In millions)
Six Months Ended
6/30/2023 6/30/2022
(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income

$

89.2

 

$

184.7

 
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization

 

56.7

 

 

58.6

 
Share-based compensation expenses

 

22.0

 

 

26.1

 
Non-cash interest expense

 

3.6

 

 

3.3

 
Deferred income taxes

 

(8.4

)

 

7.6

 
Inventory write-downs

 

16.9

 

 

16.6

 
Foreign exchange transaction loss (gain)

 

1.0

 

 

(0.7

)
Other

 

3.4

 

 

(8.7

)
Changes in operating assets and liabilities:
Receivables

 

(16.6

)

 

(19.3

)
Inventories

 

50.7

 

 

(15.3

)
Prepaid expenses and other current assets

 

(17.5

)

 

(23.0

)
Accounts payable

 

(0.8

)

 

10.2

 
Royalty overrides

 

(21.3

)

 

(9.5

)
Other current liabilities

 

15.3

 

 

(13.4

)
Other

 

(12.4

)

 

12.1

 
NET CASH PROVIDED BY OPERATING ACTIVITIES

 

181.8

 

 

229.3

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment

 

(68.6

)

 

(75.9

)
Other

 

0.1

 

 

0.1

 
NET CASH USED IN INVESTING ACTIVITIES

 

(68.5

)

 

(75.8

)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior secured credit facility

 

71.0

 

 

159.0

 
Principal payments on senior secured credit facility and other debt

 

(146.7

)

 

(173.7

)
Debt issuance costs

 

(1.8

)

 

–

 
Share repurchases

 

(9.4

)

 

(146.5

)
Other

 

1.6

 

 

2.2

 
NET CASH USED IN FINANCING ACTIVITIES

 

(85.3

)

 

(159.0

)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

3.0

 

 

(15.0

)
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

 

31.0

 

 

(20.5

)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD

 

516.3

 

 

610.4

 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD

$

547.3

 

$

589.9

 

Year to Date 2023 Key Metrics

Regional Net Sales and Foreign Exchange (“FX”) Impact

Region

Reported Net Sales

YTD ’23 (mil)

Growth/Decline

including FX

vs. YTD ’22

Growth/Decline

excluding FX

vs. YTD ’22 1

Asia Pacific

$ 839.4

(2.2%)

3.3%

North America

600.8

(10.3%)

(10.1%)

EMEA

557.7

(4.5%)

(0.3%)

Latin America(a)

412.5

1.3%

(2.2%)

China

155.7

(25.6%)

(20.4%)

Worldwide Total

$ 2,566.1

(6.0%)

(3.4%)
 

Regional Volume Point Metrics

 

Volume Points

Region

YTD ’23 (mil)

YoY % Chg.

Asia Pacific

1,035.7

(5.7%)

North America

627.9

(21.5%)

EMEA

645.5

(13.5%)

Latin America(a)

529.9

(16.0%)

China

111.2

(18.7%)

Worldwide Total

2,950.2

(13.5%)

(a) During the third quarter of 2022, the Company combined its Mexico and South and Central America regions into one geographic region now named Latin America. Historical information has been reclassified to conform with the current period geographic presentation.

Supplemental Information

SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited and unreviewed), (All tables provide Dollars in millions, except per Share Data)

Adjusted Net Income, Adjusted Diluted EPS and Adjusted EBITDA

In addition to its reported results calculated in accordance with GAAP, the Company has included in this release adjusted net income, adjusted diluted EPS and adjusted EBITDA, performance measures that the Securities and Exchange Commission defines as “non-GAAP financial measures.” Adjusted net income, adjusted diluted EPS and adjusted EBITDA exclude the impact of certain unusual or non-recurring items such as net expenses related to COVID-19 pandemic, expenses related to Transformation Program, expenses related to digital technology program and charges related to the Russia-Ukraine conflict, as further detailed in the reconciliations below. Adjusted EBITDA margin represents adjusted EBITDA divided by net sales.

Management believes that such non-GAAP financial measures, when read in conjunction with the Company’s reported results, calculated in accordance with GAAP, can provide useful supplemental information for investors because they facilitate a period to period comparative assessment of the Company’s operating performance relative to its performance based on reported results under GAAP, while isolating the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. The Company’s definition and calculation as set forth in the tables below of adjusted net income, adjusted diluted EPS and adjusted EBITDA may not be comparable to similarly titled measures used by other companies because other companies may not calculate them in the same manner as the Company does and should not be viewed in isolation from nor as alternatives to net income or diluted EPS calculated in accordance with GAAP.

Currency Fluctuation

Our international operations have provided and will continue to provide a significant portion of our total net sales. As a result, total net sales will continue to be affected by fluctuations in the U.S. dollar against foreign currencies. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, in addition to comparing the percent change in net sales from one period to another in U.S. dollars, we also compare the percent change in net sales from one period to another period using “net sales in local currency.” Net sales in local currency is not a measure presented in accordance with U.S. GAAP. Net sales in local currency removes from net sales in U.S. dollars the impact of changes in exchange rates between the U.S. dollar and the local currencies of our foreign subsidiaries, by translating the current period net sales into U.S. dollars using the same foreign currency exchange rates that were used to translate the net sales for the previous comparable period. We believe presenting net sales in local currency is useful to investors because it allows a meaningful comparison of net sales of our foreign operations from period to period. However, net sales in local currency should not be considered in isolation or as an alternative to net sales in U.S. dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with U.S. GAAP.

The following is a reconciliation of net income to adjusted net income:
 
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
(in millions)
 
Net income

$

59.9

 

$

86.5

 

$

89.2

 

$

184.7

 
Net expenses related to COVID-19 pandemic (1) (2)

 

–

 

 

1.6

 

 

–

 

 

3.3

 
Expenses related to Transformation Program (1) (2)

 

10.1

 

 

3.2

 

 

37.4

 

 

4.8

 
Digital technology program costs (1) (2)

 

7.0

 

 

–

 

 

10.5

 

 

–

 
Russia-Ukraine conflict charges (1) (2)

 

–

 

 

5.4

 

 

–

 

 

5.4

 
Income tax adjustments for above items (1) (2)

 

(3.0

)

 

(1.9

)

 

(9.2

)

 

(2.4

)
Adjusted net income

$

74.0

 

$

94.8

 

$

127.9

 

$

195.8

 
 
 
The following is a reconciliation of diluted earnings per share to adjusted diluted earnings per share:
 
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
(per share)
 
Diluted earnings per share

$

0.60

 

$

0.88

 

$

0.89

 

$

1.84

 
Net expenses related to COVID-19 pandemic (1) (2)

 

–

 

 

0.02

 

 

–

 

 

0.03

 
Expenses related to Transformation Program (1) (2)

 

0.10

 

 

0.03

 

 

0.37

 

 

0.05

 
Digital technology program costs (1) (2)

 

0.07

 

 

–

 

 

0.11

 

 

–

 
Russia-Ukraine conflict charges (1) (2)

 

–

 

 

0.05

 

 

–

 

 

0.05

 
Income tax adjustments for above items (1) (2)

 

(0.03

)

 

(0.02

)

 

(0.09

)

 

(0.02

)
Adjusted diluted earnings per share (3)

$

0.74

 

$

0.96

 

$

1.28

 

$

1.96

 
 
The following is a reconciliation of net income to EBITDA and adjusted EBITDA:
         
Three Months Ended   Six Months Ended  
6/30/2023   6/30/2022   6/30/2023   6/30/2022  
(in millions)  
         
Net income

$

59.9

  

$

86.5

  

$

89.2

  

$

184.7

  
Interest expense, net

 

38.4

  

 

31.7

  

 

77.8

  

 

61.4

  
Income taxes

 

25.1

  

 

37.6

  

 

26.9

  

 

62.8

  
Depreciation and amortization

 

29.1

  

 

29.4

  

 

56.7

  

 

58.6

  
EBITDA

$

152.5

  

$

185.2

  

$

250.6

  

$

367.5

  
Net expenses related to COVID-19 pandemic (1) (2)

 

–

  

 

1.6

  

 

–

  

 

3.3

  
Expenses related to Transformation Program (1) (2)

 

10.1

  

 

3.2

  

 

37.4

  

 

4.8

  
Digital technology program costs (1) (2)

 

7.0

  

 

–

  

 

10.5

  

 

–

  
Russia-Ukraine conflict charges (1) (2)

 

–

  

 

5.4

  

 

–

  

 

5.4

  
Adjusted EBITDA

$

169.6

  

$

195.4

  

$

298.5

  

$

381.0

  
         
(1) Based on interim income tax reporting rules, these expenses are not considered discrete items. The tax effect of the adjustments between our GAAP and non-GAAP results takes into account the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s).
 
(2) Excludes tax (benefit)/expense as follows:
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
(in millions)
 
Net expenses related to COVID-19 pandemic

$

–

 

$

(0.4

)

$

–

 

$

(0.7

)
Expenses related to Transformation Program

 

(2.5

)

 

(0.3

)

 

(8.5

)

 

(0.5

)
Digital technology program costs

 

(0.5

)

 

–

 

 

(0.7

)

 

–

 
Russia-Ukraine conflict charges

 

–

 

 

(1.2

)

 

–

 

 

(1.2

)
Total income tax adjustments

$

(3.0

)

$

(1.9

)

$

(9.2

)

$

(2.4

)
 
 
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 6/30/2023 6/30/2022
(per share)
 
Net expenses related to COVID-19 pandemic

$

–

 

$

–

 

$

–

 

$

(0.01

)
Expenses related to Transformation Program

 

(0.02

)

 

–

 

 

(0.09

)

 

–

 
Digital technology program costs

 

(0.01

)

 

–

 

 

(0.01

)

 

–

 
Russia-Ukraine conflict charges

 

–

 

 

(0.01

)

 

–

 

 

(0.01

)
Total income tax adjustments (3)

$

(0.03

)

$

(0.02

)

$

(0.09

)

$

(0.02

)
 
(3) Amounts may not total due to rounding.

 

Media Contact:

Gary Kishner

Senior Director, Public Relations

213.745.0456

Investor Contact:

Erin Banyas

Vice President, Head of Investor Relations

213.745.0433

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Vitamins/Supplements Health Fitness & Nutrition

MEDIA:

Posted on

Terreno Realty Corporation Increases Quarterly Dividend by 12.5% and Files Second Quarter 2023 Financial Statements

Terreno Realty Corporation Increases Quarterly Dividend by 12.5% and Files Second Quarter 2023 Financial Statements

BELLEVUE, Wash.–(BUSINESS WIRE)–
Terreno Realty Corporation (NYSE: TRNO), an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, declared a regular cash dividend for the quarter ending September 30, 2023 of $0.45 per common share; an increase of 12.5% over the prior dividend level. The dividend will be payable on October 13, 2023 to common stockholders of record at the close of business on September 29, 2023.

Terreno Realty Corporation filed its quarterly report on Form 10-Q for the quarter ended June 30, 2023 with the U.S. Securities and Exchange Commission. The financial statements and supplemental financial information are available in the Investors & Media section of Terreno Realty Corporation’s website, www.terreno.com.

Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.

Additional information about Terreno Realty Corporation is available on the company’s web site at www.terreno.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. We caution investors that forward-looking statements are based on management’s beliefs and on assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “result,” “should,” “will,” “seek,” “target,” “see,” “likely,” “position,” “opportunity,” “outlook” and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates, and those risk factors contained in our Annual Report on Form 10-K for the year ended December 31, 2022 and our other public filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Jaime Cannon

415-655-4580

KEYWORDS: United States North America Washington

INDUSTRY KEYWORDS: Commercial Building & Real Estate Construction & Property REIT

MEDIA:

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Herbalife Appoints A Top Distributor, Stephan Gratziani, Chief Strategy Officer

Herbalife Appoints A Top Distributor, Stephan Gratziani, Chief Strategy Officer

LOS ANGELES–(BUSINESS WIRE)–
Herbalife Ltd. (NYSE: HLF), a premier health and wellness company and community, today announced the appointment of Stephan Paulo Gratziani to Chief Strategy Officer, effective August 4, 2023. Mr. Gratziani will report directly to Chairman and Chief Executive Officer Michael Johnson and work closely with the Company’s senior management team to implement and advance key strategic initiatives, including the Herbalife One digital technology platform and business verticals. He will also partner with senior executive and regional leadership to enhance sales training programs, promote distributor engagement, and identify growth opportunities.

Mr. Gratziani brings over 32 years of experience to Herbalife as an independent distributor with a proven track record of global business growth. During his time as an independent distributor, Gratziani expanded his Herbalife business to 70 markets across North America, South America, Europe, and Asia. He was named to the Company’s Chairman’s Club in 2010, and in 2018, he achieved the highest distributor level of Founder’s Circle. Mr. Gratziani was also recognized as one of Herbalife’s top 3 independent distributors in the world for 2022. As a distributor leader, he has been an integral member of various strategy and planning groups for the Company and brings a strong analytics background and innovative entrepreneurism.

Additionally, John DeSimone will transition from his position as Chief Strategic Officer to Special Advisor to the Company.

“Through the tremendous business Stephan has grown across 70 markets as an independent distributor, he has proven himself as a highly effective strategist,” said Michael Johnson, Chairman and CEO. “We are looking forward to Stephan bringing his skillset and distributor perspective to further innovate Herbalife as we modernize and move towards our next chapter of growth.”

“After 32 years as an independent distributor focused on building successful sales teams and processes around the world, I am excited to be working closely with Michael and our talented senior management team as we usher in a new era of Herbalife. We have an incredible opportunity to grow our top-line as we further align our Company’s strategy, culture and framework to support distributors in growing their businesses,” said Stephan Gratziani.

On August 1, 2023, Mr. Gratziani resigned from the Company’s Board of Directors and agreed to become an employee of the Company in the role of Chief Strategy Officer. As required by the Company’s conflict of interest policy, Mr. Gratziani agreed to suspend his Herbalife distributorship and waived any rights to his distributorship earnings under the Company’s marketing plan during the term of his employment with the Company through December 31, 2025. As a material inducement to Mr. Gratziani agreeing to become employed by the Company, the Company will grant Mr. Gratziani an award of stock appreciation rights with a grant date fair value of $5,000,000 and a base share price as of August 4, 2023. In addition, in exchange for suspending his distributorship, the Company has agreed to pay to Mr. Gratziani a cash amount equal to $4,753,994, payable in three installments.

As previously disclosed in the Company’s 2023 Annual Proxy Statement, Mr. Gratziani earned approximately $5,059,398 in compensation in 2022 under the Company’s marketing plan.

In a separate announcement this afternoon, the Company reported second quarter 2023 financial results. The press release can be found at https://ir.herbalife.com/press-releases.

About Herbalife Ltd.

Herbalife (NYSE: HLF) is a premier health and wellness company and community that has been changing people’s lives with great nutrition products and a business opportunity for its independent distributors since 1980. The Company offers science-backed products to consumers in more than 90 markets through entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle in order to live their best life.

Forward-looking statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements rely on a number of assumptions and estimates that could be inaccurate and which are subject to risks and uncertainties. All statements other than statements of historical or current facts, including statements regarding our expected growth, integration strategy, business strategies and future performance are forward-looking. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in our most recent annual report on Form 10-K and subsequent SEC filings. We disclaim any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release.

Media Contact:

Gary Kishner

Senior Director, Public Relations

213.745.0456

Investor Contact:

Erin Banyas

Vice President, Head of Investor Relations

213.745.0433

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Vitamins/Supplements Health Fitness & Nutrition

MEDIA:

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