Weber Inc. (“Weber” or “the Company”) (NYSE: WEBR), the global
leader in outdoor cooking products, innovation, and technology,
today announced its financial results for the fiscal third quarter
2022, ending June 30, 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 $528 million,
gross profit of $154 million, a net loss of $52 million, and
Adjusted EBITDA of $11 million.
“Weber is the #1 brand and the global category leader in outdoor
cooking. We have an immense opportunity to expand our relationship
with the more than 50 million dedicated Weber consumers worldwide,
as well as grow our reach in the near and long-term,” said Alan
Matula, interim Chief Executive Officer of Weber. “Our third
quarter performance reflects the margin pressures we are
experiencing as a result of global headwinds in our current
operating environment. To strengthen our financial position for
fiscal year 2023 and beyond, we are introducing a comprehensive
cash flow and cost management plan, which will position Weber to
enhance its leadership position in a dynamic outdoor cooking
market.”
FOR THE THREE MONTHS ENDED JUNE 30, 2022
- Net sales decreased 21%, to $528 million, from $669 million in
the prior-year quarter. The decrease was driven by slower retail
traffic, both in-store and online in all key markets, due to rising
inflation, supply chain constraints, geopolitical uncertainty and
fuel prices, as well as foreign currency devaluations within the
quarter that impacted reported results. Foreign exchange accounted
for $33 million of the sales reduction.
- Net sales decreased 19% in the Americas, to $274 million, from
$339 million in the prior-year quarter. EMEA net sales decreased
24%, to $233 million, from $307 million in the prior-year quarter.
APAC net sales decreased 5% to $22 million, from $23 million in the
prior-year quarter.
- Foreign currency negatively impacted net sales by $30 million
and $2 million, in EMEA and APAC, respectively.
- Gross profit decreased 49% to $154 million, or 29.1% of net
sales, compared to $299 million or 44.7% of net sales in the prior
year. The year-over-year decrease in gross profit was primarily due
to substantial freight and commodity cost increases as compared to
the prior year, promotional activity to enhance retail sell through
in a macro environment that has slowed foot traffic, negative
country and product mix shift, and significant currency
devaluations within the quarter, all partially offset by pricing
actions in all regions.
- Net loss of $52 million compared to net income of $18 million
in the prior-year quarter. Adjusted net loss was $19 million
compared to adjusted net income of $85 million in the prior-year
quarter.
- Adjusted EBITDA of $11 million compared to Adjusted EBITDA of
$134 million in the prior-year quarter, driven by the gross margin
pressures noted above, and partially offset by the initiated
Selling, General, and Administrative expense reductions which will
continue in subsequent quarters.
Subsequent to quarter end, as announced on July 25, 2022, the
Weber Board of Directors suspended the quarterly cash dividend. The
Company is assessing financing options to strengthen its balance
sheet and is committed to working with its lending partners to
remain in compliance with its credit agreement.
CASH FLOW AND COST MANAGEMENT PLAN
Following a detailed review, the Company has initiated a plan to
manage cash flows, preserve liquidity, expand gross margins, and
reduce SG&A expenses. The core components of this plan include
the suspension of its quarterly cash dividend, a focused reduction
of COGS and SG&A expenses, a reduction in force that removes
management layers in the organization, and the tightening of global
inventory levels and working capital positions. Management believes
these actions will result in at least $110 million of cash benefit,
net of restructuring costs, in fiscal year 2023, with run-rate
benefits beyond that. More details on these initiatives will be
provided on the Company’s fiscal third quarter 2022 conference
call.
FISCAL Q3 2022 INVESTOR CONFERENCE CALL
A conference call to discuss these fiscal third quarter 2022
financial results is scheduled for today, August 15, 2022, at 7:30
a.m. Central Time. Investors and analysts are invited to dial
833-927-1758 (international callers, please dial 929-526-1599)
approximately 10 minutes before the start of the call. Please
reference Conference ID 460992 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. Weber
offers its barbecue grills and accessories, services, and
experiences to a passionate community of millions across 78
countries.
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)
June 30, 2022
September 30,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
40,846
$
107,517
Accounts receivable, less allowances
(1)
279,606
138,683
Inventories, net
396,669
332,621
Prepaid expenses and other current
assets
82,954
68,236
Total current assets
800,075
647,057
Property, equipment and leasehold
improvements, net
197,539
162,829
Operating lease right-of-use assets
(2)
79,155
66,962
Other long-term assets
53,386
61,454
Trademarks, net
355,282
357,821
Other intangible assets, net
129,514
144,257
Goodwill
106,785
110,612
Total assets
$
1,721,736
$
1,550,992
Liabilities and equity
(deficit)
Current liabilities:
Trade accounts payable
$
379,689
$
330,669
Accrued expenses (3)
123,200
150,610
Income taxes payable
4,813
4,823
Current portion of long-term debt and
other borrowings
63,000
12,500
Current portion of long-term financing
obligation
654
592
Total current liabilities
571,356
499,194
Long-term debt, less current portion
1,215,728
984,818
Long-term financing obligation, less
current portion
37,891
38,394
Non-current operating lease liabilities
(4)
66,888
55,329
Tax Receivable Agreement liability
—
9,226
Other long-term liabilities
72,877
85,376
Total liabilities
1,964,740
1,672,337
Commitments and Contingencies
Class A Common Stock, $0.001 par value -
3,000,000,000 shares authorized, 52,899,303 and 52,533,388 shares
issued and outstanding as of June 30, 2022 and September 30, 2021,
respectively
53
53
Class B Common Stock, $0.00001 par value -
1,500,000,000 shares authorized, 234,559,825 and 233,572,370 shares
issued and outstanding as of June 30, 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 June 30, 2022 and September 30, 2021
—
—
Additional paid-in capital
18,715
6,109
Accumulated other comprehensive loss
(5,155
)
(9,280
)
Retained earnings (deficit)
(59,485
)
(7,646
)
Total Weber Inc. equity (deficit)
(45,870
)
(10,762
)
Noncontrolling interests
(197,134
)
(110,583
)
Total equity (deficit)
(243,004
)
(121,345
)
Total liabilities and equity (deficit)
$
1,721,736
$
1,550,992
____________________
(1)
Includes related party royalty receivables
of $171 and $119 at June 30, 2022 and September 30, 2021,
respectively.
(2)
Includes related party operating lease
assets of $1,256 and $1,629 at June 30, 2022 and September 30,
2021, respectively.
(3)
Includes related party operating lease
liabilities of $387 and $431 at June 30, 2022 and September 30,
2021, respectively.
(4)
Includes related party operating lease
liabilities of $898 and $1,198 at June 30, 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 June
30,
Nine Months Ended June
30,
2022
2021
2022
2021
Net sales (1)
$
527,936
$
668,867
$
1,418,371
$
1,632,176
Cost of goods sold (2)
374,291
369,776
992,196
912,558
Gross profit
153,645
299,091
426,175
719,618
Operating expenses:
Selling, general and administrative
(3)(4)(5)
173,494
257,758
487,515
555,744
Amortization of intangible assets
5,154
5,226
15,495
12,090
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
(Loss) income from operations
(25,003
)
36,107
(76,835
)
156,969
Foreign currency loss (gain)
16,766
(3,758
)
20,983
(3,772
)
Interest expense, net (6)
19,267
18,031
51,813
49,780
Gain on Tax Receivable Agreement liability
remeasurement
(9,226
)
—
(9,226
)
—
Loss from early extinguishment of debt
—
—
—
5,448
Other expense
68
—
502
—
(Loss) income before taxes
(51,878
)
21,834
(140,907
)
105,513
Income tax expense
121
4,009
36,958
19,398
Gain from investments in unconsolidated
affiliates
—
—
—
(5,505
)
Net (loss) income
$
(51,999
)
$
17,825
$
(177,865
)
$
91,620
Net loss attributable to noncontrolling
interests
(44,505
)
—
(132,698
)
—
Net (loss) income attributable to Weber
Inc.
$
(7,494
)
$
17,825
$
(45,167
)
$
91,620
Earnings (loss) per share of Class A
common stock
Basic
$
(0.14
)
N/A
$
(0.84
)
N/A
Diluted
$
(0.41
)
N/A
$
(0.84
)
N/A
Weighted average shares outstanding
Basic
53,875,489
N/A
53,499,650
N/A
Diluted
290,170,910
N/A
53,499,650
N/A
____________________
(1)
Includes related party royalty revenue of
$106 and $128 for the three months ended June 30, 2022 and 2021,
respectively, and $379 and $75 for the nine months ended June 30,
2022 and 2021, respectively.
(2)
Includes related party rental expense of
zero and $213 for the three months ended June 30, 2022 and 2021,
respectively, and zero and $605 for the nine months ended June 30,
2022 and 2021, respectively.
(3)
Includes related party rental expense of
$176 and $68 for the three months ended June 30, 2022 and 2021,
respectively, and $513 and $196 for the nine months ended June 30,
2022 and 2021, respectively.
(4)
Includes related party royalty expense of
zero for both the three months ended June 30, 2022 and 2021 and
zero and $268 for the nine months ended June 30, 2022 and 2021,
respectively.
(5)
Includes related party compensation
expense of zero for both the three months ended June 30, 2022 and
2021 and $420 and zero for the nine months ended June 30, 2022 and
2021.
(6)
Includes related party interest income of
zero and $11 for the three months ended June 30, 2022 and 2021,
respectively, and $3 and $40 for the nine months ended June 30,
2022 and 2021, respectively.
Weber Inc.
Condensed Consolidated
Statement of Cash Flows
(dollars in thousands)
(unaudited)
Nine Months Ended June
30,
2022
2021
Operating activities
Net (loss) income
$
(177,865
)
$
91,620
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Provision for depreciation
29,206
20,317
Provision for amortization of intangible
assets
15,495
12,090
Provision for amortization of deferred
financing costs
3,556
2,813
Deferred income tax expense (benefit)
22,257
(3,174
)
Stock/unit-based compensation
65,041
94,193
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
(163,576
)
(186,381
)
Inventories
(84,823
)
(96,505
)
Prepaid expenses and other current
assets
(13,470
)
12,844
Trade accounts payable
62,191
106,057
Accrued expenses
(2,148
)
29,165
Income taxes payable
835
6,507
Other
9,693
(9,844
)
Net cash (used in) provided by operating
activities
(233,608
)
74,460
Investing activities
Proceeds from disposal of property,
equipment and leasehold improvements
18
14,028
Additions to property, equipment and
leasehold improvements
(80,362
)
(40,503
)
Payments for acquisitions
—
(128,514
)
Net cash used in investing activities
(80,344
)
(154,989
)
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
)
(2,349
)
Payments under agreement with iDevices
(99
)
(228
)
Interest rate swap settlement payments
(4,384
)
(3,903
)
Proceeds from contribution of capital,
net
11,346
13,075
Dividends paid
(6,394
)
—
Members’ distributions
(34,547
)
(315,622
)
Borrowings from revolving credit
facility
724,500
217,000
Payments on revolving credit facility
(676,500
)
(217,000
)
Payments of long-term debt
(10,000
)
(622,500
)
Shares withheld to satisfy employee tax
obligations
(1,412
)
—
Service on financing obligation
(441
)
(382
)
Net cash provided by financing
activities
240,260
291,437
Effect of exchange rate changes on cash
and cash equivalents
16,247
629
(Decrease) increase in cash and cash
equivalents
(57,445
)
211,537
Cash and cash equivalents at beginning of
period
107,517
123,792
Cash and cash equivalents at end of
period
$
50,072
$
335,329
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
44,860
$
42,977
Cash paid for income taxes, net of refunds
of $159 and $3,213, respectively
$
14,255
$
17,090
Supplemental disclosures of non-cash
investing information:
Property and equipment included in
accounts payable and accrued expenses
$
18,905
$
7,253
Deferred offering costs in accrued
expenses
$
—
$
1,689
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 (loss)
income from operations to adjusted (loss) 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 June
30,
Nine Months Ended June
30,
2022
2021
2022
2021
(Loss) income from operations
$
(25,003
)
$
36,107
$
(76,835
)
$
156,969
Adjustments:
Foreign currency (loss) gain(1)
(16,766
)
3,758
(20,983
)
3,772
Stock/unit-based compensation expense
17,340
61,714
65,041
94,193
Business transformation costs (2)
11,559
6,572
26,241
9,496
Operational transformation costs (3)
8,851
5,027
22,689
10,853
Financing and IPO costs (4)
—
8,954
877
12,660
COVID-19 costs (5)
—
68
—
548
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Adjusted (loss) income from
operations
$
(4,019
)
$
122,200
$
17,030
$
283,306
Net (loss) income
$
(51,999
)
$
17,825
$
(177,865
)
$
91,620
Adjustments:
Stock/unit-based compensation expense
17,340
61,714
65,041
94,193
Business transformation costs (2)
11,559
6,572
26,241
9,496
Operational transformation costs (3)
8,851
5,027
22,689
10,853
Financing and IPO costs (4)
—
8,954
877
12,660
COVID-19 costs (5)
—
68
—
548
Gain on Tax Receivable Agreement liability
remeasurement
(9,226
)
—
(9,226
)
—
Loss from early extinguishment of debt
—
—
—
5,448
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Other expense
68
—
502
—
Tax impact of adjusting items (6)
4,245
(15,118
)
(27,835
)
(23,523
)
Adjusted net (loss) income
$
(19,162
)
$
85,042
$
(99,576
)
$
196,110
Net (loss) income
$
(51,999
)
$
17,825
$
(177,865
)
$
91,620
Adjustments:
Interest expense, net
19,267
18,031
51,813
49,780
Income tax expense
121
4,009
36,958
19,398
Depreciation and amortization
15,418
12,079
44,701
32,407
EBITDA
$
(17,193
)
$
51,944
$
(44,393
)
$
193,205
Stock/unit-based compensation expense
17,340
61,714
65,041
94,193
Business transformation costs (2)
11,559
6,572
26,241
9,496
Operational transformation costs (3)
8,851
5,027
22,689
10,853
Financing and IPO costs (4)
—
8,954
877
12,660
COVID-19 costs (5)
—
68
—
548
Gain on Tax Receivable Agreement liability
remeasurement
(9,226
)
—
(9,226
)
—
Loss from early extinguishment of debt
—
—
—
5,448
Gain on disposal of assets held for
sale
—
—
—
(5,185
)
Other expense
68
—
502
—
Adjusted EBITDA
$
11,399
$
134,279
$
61,731
$
321,218
____________________
(1)
Adjusted (loss) income from operations
includes foreign currency (loss) gain in order to align adjusted
(loss) 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 nine months ended June 30,
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 nine months ended June 30,
2022 applied to the adjusting items presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220814005021/en/
INVESTOR RELATIONS CONTACT: Brian Eichenlaub
investors@weber.com
MEDIA CONTACT: Kristina Peterson-Lohman
media@weber.com
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