Sequential Gross Margin Improvement Reflects
Significant Progress Against Inflationary Cost Headwinds Continued
Execution Through Challenging Macroeconomic Environment
Weber Inc. (“Weber” or “the Company”) (NYSE: WEBR) today
announced its financial results for the fiscal second quarter 2022,
ending March 31, 2022.
Weber reports its financial performance in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) and as adjusted on a non-GAAP basis. Please see
“Non-GAAP Financial Measures,” and “Reconciliation of GAAP to
Non-GAAP Financial Information” below for additional information
and reconciliations of the non-GAAP financial measures to the most
comparable GAAP financial measures.
For the quarter, Weber generated net sales of $607 million,
gross profit of $209 million, a net loss of $51 million, and
Adjusted EBITDA of $86 million.
“Our second-quarter results reflect our proactive responses to
supply chain and material cost inflation, which helped drive higher
sequential gross margin and adjusted EBITDA margin versus the prior
quarter,” said Chris Scherzinger, Chief Executive Officer of Weber.
“Weber has operated through many environments over the last 70
years and remains well-positioned to navigate near-term market
challenges to drive long-term growth and value creation for
shareholders.”
“As the clear category leader around the world, we continue to
make excellent progress against our key strategic priorities,
including introducing three new product lines this spring that fuse
the best in smart grilling technology, the highest-quality
materials, and superior performance to transform the outdoor
cooking experience for Weber owners. I would like to thank our team
members for their continued resilience and commitment to our
consumers,” added Mr. Scherzinger.
FOR THE THREE MONTHS ENDED MARCH 31, 2022
- Net sales decreased 7%, to $607 million, from $654 million in
the prior-year quarter. On a two-year stack basis, net sales
increased 46% above 2020. Foreign exchange accounted for $20
million of the sales reduction, and, excluding the impact of
foreign exchange, net sales declined 4% year-on-year. Net sales
were adversely impacted by product and component part availability
resulting from global supply chain disruptions. In addition, retail
traffic, both in-store and online, slowed broadly in comparison to
last year, driving lower category point-of-sale performance. The
decrease in sales volume was partially offset by certain pricing
actions.
- Net sales decreased 18% in the Americas, to $306 million, from
$373 million in the prior-year quarter, however on a two-year stack
basis, net sales increased 41%. EMEA net sales increased 9%, to
$268 million, from $246 million in the prior-year quarter, and
increased 47% on a two-year stack basis. APAC net sales decreased
6% to $34 million, from $36 million in the prior-year quarter, yet
increased 157% on a two-year stack basis.
- Gross profit decreased 27% to $209 million, or 34.3% of net
sales, compared to $286 million or 43.7% of net sales in the prior
year. We made significant progress on our recovery plan as we
improved gross margins by 1,170 basis points from the first to
second quarter. The year-over-year decrease in gross profit was
primarily due to higher inbound freight costs, higher commodity
costs and elevated costs related to the startup of a new production
line.
- Net loss of $51 million compared to net income of $69 million
in the prior-year quarter. Adjusted net loss was $34 million
compared to adjusted net income of $98 million in the prior-year
quarter.
- Adjusted EBITDA of $86 million compared to Adjusted EBITDA of
$149 million in the prior-year quarter, driven by lower net sales
and higher cost of goods sold in the quarter as compared to the
prior-year period.
As of March 31, 2022, Weber had cash and cash equivalents of $46
million and $266 million of available borrowing capacity under the
revolving credit facility.
As announced on May 11, 2022, the Weber Board of Directors
declared a cash dividend of $0.04 per share, payable in cash, on
June 17, 2022, to holders of its Class A Common Stock as of the
close of business on June 7, 2022.
UPDATED FISCAL YEAR 2022 GUIDANCE
For the fiscal year ending September 30, 2022, the Company has
revised guidance to reflect the anticipated industry impact of
reduced retail sell-out related to retail traffic and consumer
purchase trends over the balance of 2022, as well as foreign
currency devaluation.
As a result:
- Net sales are expected to be in the range of $1.65 billion to
$1.80 billion, and
- Adjusted EBITDA is expected to be between $140 million and $180
million in view of the cost and volume challenges.
Weber provides net sales guidance on a GAAP basis and Adjusted
EBITDA on a non-GAAP basis and does not provide a reconciliation of
forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income
(loss), due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation. Because other deductions (such as litigation and
other matters) used to calculate projected net income (loss) can
vary dramatically based on actual events, the Company is not able
to forecast on a GAAP basis with reasonable certainty that all
deductions and additions needed in order to provide a GAAP
calculation of projected net income at this time. The amount of
these deductions may be material and, therefore, could result in
projected net income being materially more or less than projected
Adjusted EBITDA (non-GAAP). These statements represent
forward-looking information and represent a financial outlook, and
actual results may vary from the estimates provided here.
FISCAL Q2 2022 INVESTOR CONFERENCE CALL
A conference call to discuss these fiscal second quarter 2022
financial results is scheduled for today, May 16, 2022, at 7:30
a.m. Central Time. Investors and analysts are invited to dial
844-200-6205 (international callers, please dial 929-526-1599)
approximately 10 minutes before the start of the call. Please
reference Conference ID 436320 when prompted. A live webcast of the
conference call and supporting materials will be available on the
Weber investor relations website, https://investors.weber.com. In addition, a replay
and transcript of the webcast will be posted to the same website
once available.
ABOUT WEBER INC.
Weber Inc. headquartered in Palatine, Ill., is the world’s
leading barbecue brand. Weber’s founder George Stephen, Sr.,
established the outdoor cooking category when he invented the
original kettle charcoal grill 70 years ago. Weber offers a
comprehensive, innovative product portfolio, including charcoal,
gas, pellet and electric grills, smokers, and accessories designed
to help outdoor cooking enthusiasts discover what’s possible. In
2021, Weber acquired June Life Inc., a smart appliance and
technology company, to accelerate the development of its Weber
Connect® technology and digital products. In addition, Weber
recently launched 1952 Ventures, a subsidiary designed to
accelerate new growth platforms and brand extensions for Weber in
the areas of product, technologies, and partnerships. Weber offers
its barbecue grills and accessories, services, and experiences to a
passionate community of millions across 78 countries.
Weber Connect® is a registered trademark of Weber-Stephen
Products LLC.
NON-GAAP FINANCIAL MEASURES
This press release contains certain financial measures not
presented in accordance with GAAP, including Adjusted EBITDA and
Adjusted Net (Loss) Income, which are used by management in making
operating decisions, allocating financial resources, and internal
planning and forecasting and for business strategy purposes.
Adjusted EBITDA and Adjusted Net (Loss) Income are not measures of
financial performance in accordance with GAAP and may exclude items
that are significant in understanding and assessing our financial
results. The use of non-GAAP financial information should not be
considered as an alternative to, or more meaningful than, the
comparable GAAP measures. In addition, because our non-GAAP
measures are not determined in accordance with GAAP, it is
susceptible to differing calculations, and not all comparable or
peer companies may calculate their non-GAAP measures in the same
manner.
Management believes that such measures are commonly reported by
issuers and widely used by investors as indicators of a company’s
operating performance. Please refer to the reconciliations of
Adjusted EBITDA and Adjusted Net (Loss) Income to the most directly
comparable financial measures prepared in accordance with GAAP
below.
FORWARD-LOOKING STATEMENTS
This press release contains various “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, which represent Weber’s expectations or beliefs concerning
future events. In some cases, you can identify these statements by
forward-looking words such as “may,” “might,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential” or “continue,” the negative of these terms
and other comparable terminology. These forward-looking statements,
which are subject to risks, uncertainties and assumptions about us,
may include projections of our future financial performance, our
anticipated growth strategies and anticipated trends in our
business. These statements are only predictions based on our
current expectations and projections about future events. There are
important factors that could cause our actual results, level of
activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed
or implied by the forward-looking statements, including those
factors discussed in the section titled “Risk Factors” in our
Annual Report on Form 10-K, for the year ended September 30, 2021,
and in our Quarterly Reports on Form 10-Q.
Our future results could be affected by a variety of other
factors, including uncertainty of the magnitude, duration,
geographic reach, impact on the global economy and current and
potential travel restrictions of the COVID-19 outbreak, the
current, and uncertain future, impact of the COVID-19 outbreak on
our business, growth, reputation, prospects, financial condition,
operating results (including components of our financial results),
and cash flows and liquidity, risks relating to any unforeseen
changes to or effects on liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, indebtedness, financial
condition, losses and future prospects, the ability to realize the
anticipated benefits and synergies from business acquisitions in
the amounts and at the times expected, the impact of competitive
conditions, the effectiveness of pricing, advertising, and
promotional programs; the success of innovation, renovation and new
product introductions; the recoverability of the carrying value of
goodwill and other intangibles, the success of productivity
improvements and business transitions, commodity and energy prices,
transportation costs, labor costs, disruptions or inefficiencies in
supply chain, the availability of and interest rates on short-term
and long-term financing, the levels of spending on systems
initiatives, properties, business opportunities, integration of
acquired businesses, and other general and administrative costs,
changes in consumer behavior and preferences, the effect of U.S.
and foreign economic conditions on items such as interest rates,
statutory tax rates, currency conversion and availability, legal
and regulatory factors including the impact of any product recalls;
and business disruption or other losses from war, pandemic,
terrorist acts or political unrest.
Weber Inc.
Condensed Consolidated Balance
Sheets
(dollars in thousands, except
share data)
March 31, 2022
September 30,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
46,381
$
107,517
Accounts receivable, less allowances
(1)
349,385
138,683
Inventories, net
477,848
332,621
Prepaid expenses and other current
assets
76,219
68,236
Total current assets
949,833
647,057
Property, equipment and leasehold
improvements, net
190,442
162,829
Operating lease right-of-use assets
(2)
73,444
66,962
Other long-term assets
63,554
61,454
Trademarks, net
356,128
357,821
Other intangible assets, net
135,425
144,257
Goodwill
109,579
110,612
Total assets
$
1,878,405
$
1,550,992
Liabilities and equity
(deficit)
Current liabilities:
Trade accounts payable
$
453,985
$
330,669
Accrued expenses (3)
147,001
150,610
Income taxes payable
27,423
4,823
Current portion of long-term debt and
other borrowings
46,500
12,500
Current portion of long-term financing
obligation
633
592
Total current liabilities
675,542
499,194
Long-term debt, less current portion
1,218,235
984,818
Long-term financing obligation, less
current portion
38,061
38,394
Non-current operating lease liabilities
(4)
61,544
55,329
Tax Receivable Agreement liability, net of
current portion
9,226
9,226
Other long-term liabilities
69,873
85,376
Total liabilities
2,072,481
1,672,337
Commitments and Contingencies
Class A Common Stock, $0.001 par value -
3,000,000,000 shares authorized, 52,834,735 and 52,533,388 shares
issued and outstanding as of March 31, 2022 and September 30, 2021,
respectively
53
53
Class B Common Stock, $0.00001 par value -
1,500,000,000 shares authorized, 234,609,825 and 233,572,370 shares
issued and outstanding as of March 31, 2022 and September 30, 2021,
respectively
2
2
Preferred Stock, $0.0001 par value -
1,500,000,000 shares authorized, zero shares issued and outstanding
as of March 31, 2022 and September 30, 2021
—
—
Additional paid-in capital
15,125
6,109
Accumulated other comprehensive loss
(5,596
)
(9,280
)
Retained earnings (deficit)
(49,763
)
(7,646
)
Total Weber Inc. equity (deficit)
(40,179
)
(10,762
)
Noncontrolling interests
(153,897
)
(110,583
)
Total equity (deficit)
(194,076
)
(121,345
)
Total liabilities and equity (deficit)
$
1,878,405
$
1,550,992
________________
(1)
Includes related party royalty receivables
of $129 and $119 at March 31, 2022 and September 30, 2021,
respectively.
(2)
Includes related party operating lease
assets of $1,492 and $1,629 at March 31, 2022 and September 30,
2021, respectively.
(3)
Includes related party operating lease
liabilities of $449 and $431 at March 31, 2022 and September 30,
2021, respectively.
(4)
Includes related party operating lease
liabilities of $1,043 and $1,198 at March 31, 2022 and September
30, 2021, respectively.
Weber Inc.
Condensed Consolidated
Statements of Operations
(dollars in thousands, except
share and per share data)
(unaudited)
Three Months Ended March
31,
Six Months Ended March
31,
2022
2021
2022
2021
Net sales (1)
$
607,294
$
654,431
$
890,435
$
963,309
Cost of goods sold (2)
398,777
368,709
617,905
542,782
Gross profit
208,517
285,722
272,530
420,527
Operating expenses:
Selling, general and administrative
(3)(4)(5)
165,937
183,883
314,021
297,986
Amortization of intangible assets
5,167
3,847
10,341
6,864
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Income (loss) from operations
37,413
97,992
(51,832
)
120,862
Foreign currency loss (gain)
4,053
3,493
4,217
(14
)
Interest income (6)
(386
)
(246
)
(616
)
(425
)
Interest expense
17,401
17,522
33,162
32,174
Loss from early extinguishment of debt
—
—
—
5,448
Other expense
434
—
434
—
Income (loss) before taxes
15,911
77,223
(89,029
)
83,679
Income tax expense
67,224
15,223
36,837
15,389
Gain from investments in unconsolidated
affiliates
—
(6,910
)
—
(5,505
)
Net (loss) income
$
(51,313
)
$
68,910
$
(125,866
)
$
73,795
Net income (loss) attributable to
noncontrolling interests
3,137
—
(88,193
)
—
Net (loss) income attributable to Weber
Inc.
$
(54,450
)
$
68,910
$
(37,673
)
$
73,795
Earnings (loss) per share of Class A
common stock
Basic
$
(1.02
)
N/A
$
(0.71
)
N/A
Diluted
$
(1.02
)
N/A
$
(0.71
)
N/A
Weighted average shares outstanding
Basic
53,437,683
N/A
53,370,823
N/A
Diluted
53,437,683
N/A
53,370,823
N/A
________________
(1)
Includes related party royalty revenue of
$129 and $(97) for the three months ended March 31, 2022 and 2021,
respectively, and $273 and $(54) for the six months ended March 31,
2022 and 2021, respectively.
(2)
Includes related party rental expense of
zero and $213 for the three months ended March 31, 2022 and 2021,
respectively, and zero and $392 for the six months ended March 31,
2022 and 2021, respectively.
(3)
Includes related party rental expense of
$170 and $69 for the three months ended March 31, 2022 and 2021,
respectively, and $337 and $128 for the six months ended March 31,
2022 and 2021, respectively.
(4)
Includes related party royalty expense of
zero and zero for the three months ended March 31, 2022 and 2021,
respectively, and zero and $268 for the six months ended March 31,
2022 and 2021, respectively.
(5)
Includes related party compensation
expense of $420 and zero for the three months ended March 31, 2022
and 2021, respectively, and $420 and zero for the six months ended
March 31, 2022 and 2021.
(6)
Includes related party interest income of
zero and $15 for the three months ended March 31, 2022 and 2021,
respectively, and $3 and $29 for the six months ended March 31,
2022 and 2021, respectively.
Weber Inc.
Condensed Consolidated
Statement of Cash Flows
(dollars in thousands)
(unaudited)
Six Months Ended March
31,
2022
2021
Operating activities
Net (loss) income
$
(125,866
)
$
73,795
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Provision for depreciation
18,942
13,464
Provision for amortization of intangible
assets
10,341
6,864
Provision for amortization of deferred
financing costs
2,162
1,858
Deferred income tax expense (benefit)
3,704
(1,840
)
Stock/unit-based compensation
47,701
32,479
Gain from investments in unconsolidated
affiliates
—
(5,505
)
Gain on disposal of assets held for
sale
—
(5,185
)
Loss from early extinguishment of debt
—
5,448
Changes in operating assets and
liabilities
Accounts receivable
(215,407
)
(353,754
)
Inventories
(152,219
)
(99,255
)
Prepaid expenses and other current
assets
(12,829
)
11,655
Trade accounts payable
137,337
83,812
Accrued expenses
9,542
29,365
Income taxes payable
25,973
5,139
Other
8,128
(12,989
)
Net cash used in operating activities
(242,491
)
(214,649
)
Investing activities
Proceeds from disposal of property,
equipment and leasehold improvements
13
14,028
Additions to property, equipment and
leasehold improvements
(62,274
)
(17,354
)
Payments for acquisitions
—
(102,239
)
Net cash used in investing activities
(62,261
)
(105,565
)
Financing activities
Proceeds from issuance of long-term
debt
250,000
1,250,000
Payments for deferred financing costs
(9,700
)
(26,654
)
Payments for capitalized offering
costs
(2,109
)
—
Payments under agreement with iDevices
(99
)
(119
)
Interest rate swap settlement payments
(2,923
)
(2,441
)
Proceeds from contribution of capital,
net
11,346
277
Dividends paid
(4,254
)
—
Members’ distributions
(24,691
)
(30,168
)
Borrowings from revolving credit
facility
423,000
—
Payments on revolving credit facility
(391,500
)
—
Payments of long-term debt
(6,250
)
(619,375
)
Shares withheld to satisfy employee tax
obligations
(1,320
)
—
Service on financing obligation
(293
)
(254
)
Net cash provided by financing
activities
241,207
571,266
Effect of exchange rate changes on cash
and cash equivalents
2,409
5,095
(Decrease) increase in cash and cash
equivalents
(61,136
)
256,147
Cash and cash equivalents at beginning of
period
107,517
123,792
Cash and cash equivalents at end of
period
$
46,381
$
379,939
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
28,117
$
27,556
Cash paid for income taxes, net of refunds
of $96 and $603, respectively
$
9,701
$
15,977
Supplemental disclosures of non-cash
investing information:
Property and equipment included in
accounts payable and accrued expenses
$
18,192
$
6,402
Deferred offering costs in accrued
expenses
$
—
$
388
Settlement of existing relationship
through business combination
$
—
$
9,776
Weber Inc.
Reconciliation of GAAP to
Non-GAAP Financial Information
(dollars in thousands)
The following table reconciles income
(loss) from operations to adjusted income from operations; net
(loss) income to adjusted net (loss) income; net (loss) income to
EBITDA; and EBITDA to Adjusted EBITDA for the periods
presented:
Three Months Ended March
31,
Six Months Ended March
31,
2022
2021
2022
2021
Income (loss) from operations
$
37,413
$
97,992
$
(51,832
)
$
120,862
Adjustments:
Foreign currency (loss) gain(1)
(4,053
)
(3,493
)
(4,217
)
14
Stock/unit-based compensation expense
22,190
29,051
47,701
32,479
Business transformation costs (2)
7,272
2,053
14,682
2,924
Operational transformation costs (3)
7,190
4,835
13,838
5,826
Financing and IPO costs (4)
877
945
877
3,706
COVID-19 costs (5)
—
453
—
480
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Adjusted income from operations
$
70,889
$
131,836
$
21,049
$
161,106
Net (loss) income
$
(51,313
)
$
68,910
$
(125,866
)
$
73,795
Adjustments:
Stock/unit-based compensation expense
22,190
29,051
47,701
32,479
Business transformation costs (2)
7,272
2,053
14,682
2,924
Operational transformation costs (3)
7,190
4,835
13,838
5,826
Financing and IPO costs (4)
877
945
877
3,706
COVID-19 costs (5)
—
453
—
480
Loss from early extinguishment of debt
—
—
—
5,448
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Other expense
434
—
434
—
Tax impact of adjusting items (6)
(20,622
)
(8,191
)
(32,080
)
(8,405
)
Adjusted net (loss) income
$
(33,972
)
$
98,056
$
(80,414
)
$
111,068
Net (loss) income
$
(51,313
)
$
68,910
$
(125,866
)
$
73,795
Adjustments:
Interest expense, net
17,015
17,276
32,546
31,749
Income tax expense
67,224
15,223
36,837
15,389
Depreciation and amortization
15,496
10,562
29,283
20,328
EBITDA
$
48,422
$
111,971
$
(27,200
)
$
141,261
Stock/unit-based compensation expense
22,190
29,051
47,701
32,479
Business transformation costs (2)
7,272
2,053
14,682
2,924
Operational transformation costs (3)
7,190
4,835
13,838
5,826
Financing and IPO costs (4)
877
945
877
3,706
COVID-19 costs (5)
—
453
—
480
Loss from early extinguishment of debt
—
—
—
5,448
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Other expense
434
—
434
—
Adjusted EBITDA
$
86,385
$
149,308
$
50,332
$
186,939
______________
(1)
Adjusted income from operations includes
foreign currency (loss) gain in order to align adjusted income from
operations with Adjusted EBITDA, with the exception of depreciation
and amortization and gain from investments in unconsolidated
affiliates.
(2)
“Business transformation costs” are costs
for business transformation initiatives that require severance or
other costs to transition to a new operating model.
(3)
“Operational transformation costs” are
defined as restructuring and transformation initiatives related to
supply chain, operational moves and startups that are designed to
enable future productivity. These costs also include significant
non-capitalizable systems integration costs, as well was plant
shutdown and closure costs that will drive future efficiencies.
(4)
“Financing and IPO costs” include
non-capitalizable costs relating to the Company’s Secured Credit
Facility, the Company's IPO and other financing costs.
(5)
During the six months ended March 31,
2021, the Company incurred costs related to the global COVID-19
pandemic. These costs primarily resulted from the impact of
enhanced employee safety and social distancing protocols.
(6)
“Tax impact of adjusting items” represents
the Company's effective tax rate for the six months ended March 31,
2022 applied to the adjusting items presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220515005073/en/
INVESTOR RELATIONS CONTACT: Brian Eichenlaub
investors@weber.com
MEDIA CONTACTS: Kristina Peterson-Lohman
media@weber.com
Anne Hart ahart@prosek.com
Jim David jdavid@prosek.com
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