Olaplex Holdings, Inc. (NASDAQ: OLPX) ("OLAPLEX" or the "Company")
today announced financial results for the second quarter and six
months ended June 30, 2024.
Amanda Baldwin, OLAPLEX’s Chief Executive
Officer, commented: "Our second quarter performance was in line
with our expectations and demonstrated continued stabilization in
the business. I am encouraged by the progress we are making on our
transformation journey as we delivered on our goals for the first
half of the year and are now shifting our focus to the back half of
2024 and beyond. I am confident in the direction we are taking the
brand and remain incredibly excited about the long-term growth
potential for OLAPLEX."
For the second quarter
of 2024 compared to the
second quarter of
2023:
- Net sales decreased 4.8% to $103.9
million;
- By channel:
- Specialty Retail increased 22.4% to
$36.4 million;
- Professional decreased 18.4% to $33.4
million;
- Direct-To-Consumer decreased 11.5% to
$34.1 million;
- Net sales increased 7.3% in the United
States and decreased 15.1% internationally;
- Net income decreased 6.1% and adjusted
net income decreased 11.6%;
- Diluted EPS was $0.01 for each of the
second quarter of 2024 and 2023;
- Adjusted Diluted EPS was $0.03 for each
of the second quarter of 2024 and 2023.
Second Quarter 2024 Results
|
(Dollars in $000’s, except per share data) |
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
2024 |
|
2023 |
|
% Change |
|
Net Sales |
$ |
103,943 |
|
|
$ |
109,241 |
|
|
(4.8 |
)% |
| Gross
Profit |
$ |
72,437 |
|
|
$ |
77,496 |
|
|
(6.5 |
)% |
| Gross
Profit Margin |
|
69.7 |
% |
|
|
70.9 |
% |
|
|
| Adjusted
Gross Profit |
$ |
74,739 |
|
|
$ |
79,460 |
|
|
(5.9 |
)% |
| Adjusted
Gross Profit Margin |
|
71.9 |
% |
|
|
72.7 |
% |
|
|
|
SG&A |
$ |
45,423 |
|
|
$ |
48,413 |
|
|
(6.2 |
)% |
| Adjusted
SG&A |
$ |
42,555 |
|
|
$ |
42,276 |
|
|
0.7 |
% |
| Net
Income |
$ |
5,779 |
|
|
$ |
6,156 |
|
|
(6.1 |
)% |
| Adjusted
Net Income |
$ |
18,763 |
|
|
$ |
21,220 |
|
|
(11.6 |
)% |
| Adjusted
EBITDA |
$ |
32,054 |
|
|
$ |
36,698 |
|
|
(12.7 |
)% |
| Adjusted
EBITDA Margin |
|
30.8 |
% |
|
|
33.6 |
% |
|
|
| Diluted
EPS |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
— |
% |
| Adjusted
Diluted EPS |
$ |
0.03 |
|
|
$ |
0.03 |
|
|
— |
% |
|
Weighted Average Diluted Shares Outstanding |
|
663,545,258 |
|
|
|
680,349,161 |
|
|
|
Six Months Ended June 30, 2024
Results
|
(Dollars in $000’s, except per share data) |
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
2024 |
|
2023 |
|
% Change |
|
Net Sales |
$ |
202,849 |
|
|
$ |
223,028 |
|
|
(9.0 |
)% |
| Gross
Profit |
$ |
143,780 |
|
|
$ |
158,306 |
|
|
(9.2 |
)% |
| Gross
Profit Margin |
|
70.9 |
% |
|
|
71.0 |
% |
|
|
| Adjusted
Gross Profit |
$ |
148,269 |
|
|
$ |
162,036 |
|
|
(8.5 |
)% |
| Adjusted
Gross Profit Margin |
|
73.1 |
% |
|
|
72.7 |
% |
|
|
|
SG&A |
$ |
85,860 |
|
|
$ |
83,337 |
|
|
3.0 |
% |
| Adjusted
SG&A |
$ |
79,804 |
|
|
$ |
75,180 |
|
|
6.2 |
% |
| Net
Income |
$ |
13,525 |
|
|
$ |
27,120 |
|
|
(50.1 |
)% |
| Adjusted
Net Income |
$ |
39,347 |
|
|
$ |
52,620 |
|
|
(25.2 |
)% |
| Adjusted
EBITDA |
$ |
67,538 |
|
|
$ |
86,727 |
|
|
(22.1 |
)% |
| Adjusted
EBITDA Margin |
|
33.3 |
% |
|
|
38.9 |
% |
|
|
| Diluted
EPS |
$ |
0.02 |
|
|
$ |
0.04 |
|
|
(50.0 |
)% |
| Adjusted
Diluted EPS |
$ |
0.06 |
|
|
$ |
0.08 |
|
|
(25.0 |
)% |
|
Weighted Average Diluted Shares Outstanding |
|
663,516,699 |
|
|
|
682,107,732 |
|
|
|
Adjusted gross profit, adjusted gross profit
margin, adjusted SG&A, adjusted net income, adjusted EBITDA,
adjusted EBITDA margin, and adjusted diluted EPS are measures that
are not calculated or presented in accordance with generally
accepted accounting principles in the United States ("GAAP"). For
more information about how we use these non-GAAP financial measures
in our business, the limitations of these measures, and a
reconciliation of these measures to the most directly comparable
GAAP measures, please see "Disclosure Regarding Non-GAAP Financial
Measures" and the reconciliation tables that accompany this
release.
Balance Sheet
As of June 30, 2024, the Company had $507.9
million of cash and cash equivalents, compared to $466.4 million as
of December 31, 2023. Inventory at the end of the second
quarter of 2024 was $100.2 million, compared to $95.9 million at
December 31, 2023. Long-term debt, net of current portion and
deferred debt issuance costs was $646.4 million as of June 30,
2024, compared to $649.0 million as of December 31, 2023.
Fiscal Year 2024 Guidance
The Company is reiterating guidance for net
sales, adjusted net income and adjusted EBITDA for fiscal year
2024, as initially disclosed by the Company on February 29, 2024.
The Company's fiscal year 2024 guidance outlined below incorporates
management's expectations regarding consumer demand, and
investments and actions aimed at driving sell-through, improving
upon foundational capabilities, and building a healthier brand.
|
For Fiscal 2024: |
|
|
|
|
(Dollars in millions) |
Fiscal Year 2024 |
Fiscal Year 2023 Actual |
% change |
|
Net Sales |
$435-$463 |
$458 |
(5)% to 1% |
| Adjusted
Net Income* |
$87-$100 |
$108 |
(20)% to (8)% |
|
Adjusted EBITDA* |
$143-$159 |
$174 |
(18)% to (9)% |
The fiscal year 2024 net sales, adjusted net
income and adjusted EBITDA guidance are approximations and are
based on the Company’s plans and assumptions for the relevant
period, including, but not limited to, the following:
- Adjusted Gross
Profit Margin:
- The Company
anticipates adjusted gross profit margin* in the range of 72.5% to
73.1% in fiscal year 2024, compared to 71.4% in fiscal year 2023,
due primarily to the lapping of actions taken by the Company to
address excess inventory in fiscal year 2023, as well as
anticipated efficiencies derived from an internal cost savings
program in fiscal year 2024, which is expected to more than offset
modestly higher product costs.
- Adjusted SG&A:
- The Company expects
adjusted SG&A* in the range of $172 million to $179 million in
fiscal year 2024, an increase of $19 million to $26 million as
compared to fiscal year 2023. The increase is expected to be
primarily attributable to higher sales and marketing expenses and
higher organizational costs due to annualizing the expense of
headcount additions made during fiscal 2023.
- Adjusted EBITDA
Margin:
- The Company expects adjusted EBITDA
margin* in the range of 32.8% to 34.3% for fiscal year 2024.
- Net Interest
Expense:
- The Company expects
net interest expense to be approximately $32 million to $34 million
during fiscal year 2024.
- Adjusted Effective
Tax Rate:
- The Company expects
an adjusted effective tax rate* of approximately 19.5% to 20.5% for
fiscal year 2024.
*Adjusted net income, adjusted EBITDA, adjusted
gross profit margin, adjusted SG&A, adjusted EBITDA margin and
adjusted effective tax rate are non-GAAP financial measures. See
“Disclosure Regarding Non-GAAP Financial Measures” for additional
information.
Webcast and Conference Call Information
The Company plans to host an investor conference
call and webcast to review second quarter 2024 financial results at
9:00am ET/6:00am PT on August 6, 2024. The webcast can be
accessed at https://ir.olaplex.com. The conference call can be
accessed by calling (201) 689-8521 or (877) 407-8813 for a
toll-free number. A replay of the webcast will remain available on
the website for 90 days.
About OLAPLEX
OLAPLEX is an innovative, science-enabled,
technology-driven beauty company with a mission to improve the hair
health of its consumers. In 2014, OLAPLEX disrupted and
revolutionized the prestige hair care category by creating
innovative bond-building technology, which works by protecting,
strengthening and relinking broken bonds in the hair during and
after hair services. The brand’s proprietary, patent-protected
ingredient works on a molecular level to protect and repair damaged
hair. OLAPLEX’s award-winning products are sold through an
expanding omnichannel model serving the professional, specialty
retail, and direct-to-consumer channels.
Cautionary Note Regarding
Forward-Looking Statements
This press release includes certain
forward-looking statements and information relating to the Company
that are based on the beliefs of management as well as assumptions
made by, and information currently available to, the Company. These
forward-looking statements include, but are not limited to,
statements about: the Company’s financial position, operating
results, growth, sales and profitability; the Company's financial
guidance for fiscal year 2024, including net sales, adjusted net
income, adjusted EBITDA, adjusted gross profit margin, adjusted
SG&A, adjusted EBITDA margin, net interest expense, adjusted
effective tax rate and non-payroll related marketing and
advertising expenses; demand for the Company’s products; the
Company’s product development pipeline and the impact of new
product introductions, including the timing thereof; changes in the
Company’s distribution; the Company’s business plans, strategies,
investments, priorities and objectives, including the impact and
timing thereof; the impact of the Company’s internal cost savings
program; anticipated product costs and organizational costs; the
Company’s sales, marketing and education initiatives and related
investments, and the impact, focus and timing thereof; general
economic trends and industry trends; the Company's executive
leadership changes; inventory levels; seasonality; and other
statements contained in this press release that are not historical
or current facts. When used in this press release, words such as
"may," "will," “could," "should," "intend," "potential,"
"continue," "anticipate," "believe," "estimate," "expect," "plan,"
"target," "predict," "project," "forecast," "seek" and similar
expressions as they relate to the Company are intended to identify
forward-looking statements.
The forward-looking statements in this press
release reflect the Company’s current expectations and projections
about future events and financial trends that management believes
may affect the Company’s business, financial condition and results
of operations. These statements are predictions based upon
assumptions that may not prove to be accurate, and they are not
guarantees of future performance. As such, you should not place
significant reliance on the Company’s forward-looking statements.
Neither the Company nor any other person assumes responsibility for
the accuracy and completeness of the forward-looking statements,
including any such statements taken from third party industry and
market reports.
Forward-looking statements involve known and
unknown risks, inherent uncertainties and other factors that are
difficult to predict which may cause the Company’s actual results,
performance, time frames or achievements to be materially different
from any future results, performance, time frames or achievements
expressed or implied by the forward-looking statements, including,
without limitation: competition in the beauty industry; the
Company’s ability to effectively maintain and promote a positive
brand image, expand its brand awareness and maintain consumer
confidence in the quality, safety and efficacy of its products; the
Company’s ability to anticipate and respond to market trends and
changes in consumer preferences and execute on its growth
strategies and expansion opportunities, including with respect to
new product introductions; the Company’s ability to accurately
forecast customer and consumer demand for its products; the
Company's dependence on the success of its long-term strategic
plan; the Company’s ability to limit the illegal distribution and
sale by third parties of counterfeit versions of its products or
the unauthorized diversion by third parties of its products; the
Company's dependence on a limited number of customers for a large
portion of its net sales; the Company’s ability to develop,
manufacture and effectively and profitably market and sell future
products; the Company’s ability to attract new customers and
consumers and encourage consumer spending across its product
portfolio; the Company’s ability to successfully implement new or
additional marketing efforts; the Company’s relationships with and
the performance of its suppliers, manufacturers, distributors and
retailers and the Company’s ability to manage its supply chain;
impacts on the Company’s business from political, regulatory,
economic, trade and other risks associated with operating
internationally; the Company’s ability to manage its executive
leadership changes and to attract and retain senior management and
other qualified personnel; the Company’s reliance on its and its
third-party service providers’ information technology; the
Company’s ability to maintain the security of confidential
information; the Company’s ability to establish and maintain
intellectual property protection for its products, as well as the
Company’s ability to operate its business without infringing,
misappropriating or otherwise violating the intellectual property
rights of others; the outcome of litigation and regulatory
proceedings; the impact of changes in federal, state and
international laws, regulations and administrative policy; the
Company’s existing and any future indebtedness, including the
Company’s ability to comply with affirmative and negative covenants
under its credit agreement; the Company’s ability to service its
existing indebtedness and obtain additional capital to finance
operations and its growth opportunities; volatility of the
Company’s stock price; the Company’s “controlled company” status
and the influence of investment funds affiliated with Advent
International, L.P. over the Company; the impact of an economic
downturn and inflationary pressures on the Company’s business;
fluctuations in the Company’s quarterly results of operations;
changes in the Company’s tax rates and the Company’s exposure to
tax liability; and the other factors identified under the heading
“Risk Factors” in Company’s most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the "SEC") and
in the other documents that the Company files with the SEC from
time to time.
Many of these factors are macroeconomic in
nature and are, therefore, beyond the Company’s control. Should one
or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, the Company’s actual
results, performance or achievements may vary materially from those
described in this press release as anticipated, believed,
estimated, expected, intended, planned or projected. The
forward-looking statements in this press release represent
management’s views as of the date hereof. Unless required by law,
the Company neither intends nor assumes any obligation to update
these forward-looking statements for any reason after the date
hereof to conform these statements to actual results or to changes
in the Company’s expectations or otherwise.
Disclosure Regarding Non-GAAP Financial
Measures
In addition to the financial measures presented
in this release in accordance with GAAP, the Company has included
certain non-GAAP financial measures, including adjusted EBITDA,
adjusted EBITDA margin, adjusted net income, adjusted effective tax
rate, adjusted gross profit, adjusted gross profit margin, adjusted
SG&A and adjusted diluted EPS. Management believes these
non-GAAP financial measures, when taken together with the Company’s
financial results presented in accordance with GAAP, provide
meaningful supplemental information regarding the Company’s
operating performance and facilitate internal comparisons of its
historical operating performance on a more consistent basis by
excluding certain items that may not be indicative of its business,
results of operations or outlook. In particular, management
believes that the use of these non-GAAP measures may be helpful to
investors as they are measures used by management in assessing the
health of the Company’s business, determining incentive
compensation and evaluating its operating performance, as well as
for internal planning and forecasting purposes.
The Company calculates adjusted EBITDA as net
income, adjusted to exclude: (1) interest expense, net; (2) income
tax provision; (3) depreciation and amortization; (4) share-based
compensation expense; (5) non-ordinary inventory adjustments; (6)
non-ordinary costs and fees; (7) non-ordinary legal costs; and (8)
Tax Receivable Agreement liability adjustments. The Company
calculates adjusted EBITDA margin by dividing adjusted EBITDA by
net sales. The Company calculates adjusted net income as net
income, adjusted to exclude: (1) amortization of intangible assets
(excluding software); (2) non-ordinary costs and fees; (3)
non-ordinary legal costs; (4) non-ordinary inventory adjustments;
(5) share-based compensation expense; (6) Tax Receivable Agreement
liability adjustment; and (7) tax effect of non-GAAP adjustments.
The Company calculates adjusted effective tax rate as effective
income tax rate, adjusted to exclude the tax effect of non-GAAP
adjustments referenced in item (7) of the immediately preceding
sentence. The Company calculates adjusted gross profit as gross
profit, adjusted to exclude: (1) non-ordinary inventory adjustments
and (2) amortization of patented formulations pertaining to the
acquisition of the Olaplex, LLC business in 2020 by certain
investment funds affiliated with Advent International, L.P. and
other investors (the "Acquisition"). The Company calculates
adjusted gross profit margin by dividing adjusted gross profit by
net sales. The Company calculates adjusted SG&A as SG&A,
adjusted to exclude: (1) share-based compensation expense; (2)
non-ordinary legal costs; and (3) non-ordinary costs and fees. The
Company calculates adjusted basic and diluted EPS as adjusted net
income divided by weighted average basic and diluted shares
outstanding, respectively. Please refer to "Reconciliation of
Non-GAAP Financial Measures to GAAP Equivalents" located in the
financial supplement in this release for further information
regarding these adjustments for the periods presented.
Please refer to "Reconciliation of Non-GAAP
Financial Measures to GAAP Equivalents" located in the financial
supplement in this release for a reconciliation of these non-GAAP
metrics to their most directly comparable financial measure stated
in accordance with GAAP.
This release includes forward-looking guidance
for adjusted EBITDA, adjusted EBITDA margin, adjusted net income,
adjusted gross profit margin, adjusted effective tax rate and
adjusted SG&A. The Company is not able to provide, without
unreasonable effort, a reconciliation of the guidance for adjusted
EBITDA, adjusted EBITDA margin, adjusted net income, adjusted gross
profit margin, adjusted effective tax rate and adjusted SG&A to
the most directly comparable GAAP measure because the Company does
not currently have sufficient data to accurately estimate the
variables and individual adjustments included in the most directly
comparable GAAP measure that would be necessary for such
reconciliations, including (a) income tax related accruals in
respect of certain one-time items, (b) costs related to potential
debt or equity transactions, and (c) other non-recurring expenses
that cannot reasonably be estimated in advance. These adjustments
are inherently variable and uncertain and depend on various factors
that are beyond the Company's control and as a result it is also
unable to predict their probable significance. Therefore, because
management cannot estimate on a forward-looking basis without
unreasonable effort the impact these variables and individual
adjustments will have on its reported results in accordance with
GAAP, it is unable to provide a reconciliation of the non-GAAP
financial measures included in its fiscal year 2024 guidance.
| |
| |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (amounts in
thousands, except per share and share data) (Unaudited) |
| |
| |
June 30,2024 |
|
December 31,2023 |
| Assets |
|
|
|
| Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
507,925 |
|
|
$ |
466,400 |
|
|
Accounts receivable, net of allowances of $22,411 and $21,465 |
|
33,976 |
|
|
|
40,921 |
|
|
Inventory |
|
100,156 |
|
|
|
95,922 |
|
|
Other current assets |
|
12,393 |
|
|
|
9,953 |
|
| Total current assets |
|
654,450 |
|
|
|
613,196 |
|
| Property and equipment,
net |
|
1,225 |
|
|
|
930 |
|
| Intangible assets, net |
|
923,426 |
|
|
|
947,714 |
|
| Goodwill |
|
168,300 |
|
|
|
168,300 |
|
| Other assets |
|
9,365 |
|
|
|
10,198 |
|
| Total assets |
$ |
1,756,766 |
|
|
$ |
1,740,338 |
|
| |
|
|
|
| Liabilities and
stockholders’ equity |
|
|
|
| Current Liabilities: |
|
|
|
|
Accounts payable |
$ |
23,020 |
|
|
$ |
7,073 |
|
|
Sales and income taxes payable |
|
5,337 |
|
|
|
9,067 |
|
|
Accrued expenses and other current liabilities |
|
22,505 |
|
|
|
20,576 |
|
|
Current portion of long-term debt |
|
6,750 |
|
|
|
6,750 |
|
|
Current portion of Related Party payable pursuant to Tax Receivable
Agreement |
|
13,006 |
|
|
|
12,675 |
|
| Total current liabilities |
|
70,618 |
|
|
|
56,141 |
|
| Long-term debt |
|
646,367 |
|
|
|
649,023 |
|
| Deferred tax liabilities |
|
2,136 |
|
|
|
3,016 |
|
| Related Party payable pursuant
to Tax Receivable Agreement |
|
172,390 |
|
|
|
185,496 |
|
| Other liabilities |
|
1,932 |
|
|
|
1,694 |
|
| Total liabilities |
|
893,443 |
|
|
|
895,370 |
|
| |
|
|
|
| Contingencies |
|
|
|
| |
|
|
|
| Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value per share; 2,000,000,000 shares
authorized, 661,830,220 and 660,731,935 shares issued and
outstanding as of June 30, 2024 and December 31, 2023,
respectively |
|
676 |
|
|
|
671 |
|
|
Preferred stock, $0.001 par value per share; 25,000,000 shares
authorized and no shares issued and outstanding |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
322,758 |
|
|
|
316,489 |
|
|
Accumulated other comprehensive income |
|
(79 |
) |
|
|
1,365 |
|
|
Retained earnings |
|
539,968 |
|
|
|
526,443 |
|
| Total stockholders’
equity |
|
863,323 |
|
|
|
844,968 |
|
| Total liabilities and
stockholders’ equity |
$ |
1,756,766 |
|
|
$ |
1,740,338 |
|
| |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (amounts in thousands, except per
share and share data) (Unaudited) |
| |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net sales |
$ |
103,943 |
|
|
$ |
109,241 |
|
|
$ |
202,849 |
|
|
$ |
223,028 |
|
| Cost of sales: |
|
|
|
|
|
|
|
|
Cost of product (excluding amortization) |
|
29,204 |
|
|
|
29,781 |
|
|
|
54,580 |
|
|
|
61,016 |
|
|
Amortization of patented formulations |
|
2,302 |
|
|
|
1,964 |
|
|
|
4,489 |
|
|
|
3,706 |
|
| Total cost of sales |
|
31,506 |
|
|
|
31,745 |
|
|
|
59,069 |
|
|
|
64,722 |
|
| Gross profit |
|
72,437 |
|
|
|
77,496 |
|
|
|
143,780 |
|
|
|
158,306 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general, and administrative |
|
45,423 |
|
|
|
48,413 |
|
|
|
85,860 |
|
|
|
83,337 |
|
|
Amortization of other intangible assets |
|
10,736 |
|
|
|
10,324 |
|
|
|
22,025 |
|
|
|
20,647 |
|
| Total operating expenses |
|
56,159 |
|
|
|
58,737 |
|
|
|
107,885 |
|
|
|
103,984 |
|
| Operating income |
|
16,278 |
|
|
|
18,759 |
|
|
|
35,895 |
|
|
|
54,322 |
|
| Interest expense |
|
(14,594 |
) |
|
|
(14,674 |
) |
|
|
(29,098 |
) |
|
|
(28,591 |
) |
| Interest income |
|
6,259 |
|
|
|
4,468 |
|
|
|
12,462 |
|
|
|
7,842 |
|
| Other expense, net |
|
(264 |
) |
|
|
(600 |
) |
|
|
(1,211 |
) |
|
|
(358 |
) |
| Income before provision for
income taxes |
|
7,679 |
|
|
|
7,953 |
|
|
|
18,048 |
|
|
|
33,215 |
|
| Income tax provision |
|
1,900 |
|
|
|
1,797 |
|
|
|
4,523 |
|
|
|
6,095 |
|
| Net income |
$ |
5,779 |
|
|
$ |
6,156 |
|
|
$ |
13,525 |
|
|
$ |
27,120 |
|
| Net income per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
|
Diluted |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
0.04 |
|
| Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
661,734,667 |
|
|
|
654,345,056 |
|
|
|
661,278,793 |
|
|
|
653,045,245 |
|
|
Diluted |
|
663,545,258 |
|
|
|
680,349,161 |
|
|
|
663,516,699 |
|
|
|
682,107,732 |
|
| |
|
|
|
|
|
|
|
| Other comprehensive (loss)
income: |
|
|
|
|
|
|
|
|
Unrealized (loss) gain on derivatives, net of income tax
effect |
$ |
(1,083 |
) |
|
$ |
1,647 |
|
|
$ |
(1,444 |
) |
|
$ |
1,090 |
|
|
Total other comprehensive (loss) income |
|
(1,083 |
) |
|
|
1,647 |
|
|
|
(1,444 |
) |
|
|
1,090 |
|
| Comprehensive income |
$ |
4,696 |
|
|
$ |
7,803 |
|
|
$ |
12,081 |
|
|
$ |
28,210 |
|
| |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands) (Unaudited) |
| |
| |
Six Months EndedJune 30, |
|
|
|
2024 |
|
|
|
2023 |
|
| Cash flows from operating
activities |
|
|
|
| Net income |
$ |
13,525 |
|
|
$ |
27,120 |
|
| Adjustments to reconcile net
income to net cash provided by operating activities |
|
46,424 |
|
|
|
47,967 |
|
| Net cash provided by operating
activities |
|
59,949 |
|
|
|
75,087 |
|
| Net cash used in investing
activities |
|
(2,178 |
) |
|
|
(1,996 |
) |
| Net cash used in financing
activities |
|
(16,246 |
) |
|
|
(17,481 |
) |
| Net increase in cash and cash
equivalents |
|
41,525 |
|
|
|
55,610 |
|
| Cash and cash equivalents -
beginning of period |
|
466,400 |
|
|
|
322,808 |
|
| Cash and cash equivalents -
end of period |
$ |
507,925 |
|
|
$ |
378,418 |
|
| |
| |
|
Reconciliation of Non-GAAP Financial Measures to GAAP
Equivalents |
The following tables present a reconciliation of
net income, gross profit and SG&A, as the most directly
comparable financial measure stated in accordance with U.S. GAAP,
to adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit,
adjusted gross profit margin, adjusted SG&A, adjusted net
income and adjusted net income per share for each of the periods
presented.
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (in
thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
| Reconciliation of Net
Income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
Net income |
$ |
5,779 |
|
|
$ |
6,156 |
|
|
$ |
13,525 |
|
|
$ |
27,120 |
|
| Depreciation and amortization
of intangible assets |
|
13,172 |
|
|
|
12,402 |
|
|
|
26,798 |
|
|
|
24,582 |
|
| Interest expense, net |
|
8,335 |
|
|
|
10,206 |
|
|
|
16,636 |
|
|
|
20,749 |
|
| Income tax provision |
|
1,900 |
|
|
|
1,797 |
|
|
|
4,523 |
|
|
|
6,095 |
|
| Share-based compensation |
|
2,861 |
|
|
|
2,634 |
|
|
|
6,044 |
|
|
|
4,652 |
|
| One-time former distributor
payment(1) |
|
— |
|
|
|
3,500 |
|
|
|
— |
|
|
|
3,500 |
|
| Inventory write off and
disposal(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
| Executive reorganization
cost(3) |
|
7 |
|
|
|
3 |
|
|
|
12 |
|
|
|
5 |
|
|
Adjusted EBITDA |
$ |
32,054 |
|
|
$ |
36,698 |
|
|
$ |
67,538 |
|
|
$ |
86,727 |
|
|
Adjusted EBITDA margin |
|
30.8 |
% |
|
|
33.6 |
% |
|
|
33.3 |
% |
|
|
38.9 |
% |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
| (in
thousands) |
2024 |
|
2023 |
|
2024 |
|
2023 |
| Reconciliation of
Gross Profit to Adjusted Gross Profit |
|
|
|
|
|
|
|
|
Gross profit |
$ |
72,437 |
|
|
$ |
77,496 |
|
|
$ |
143,780 |
|
|
$ |
158,306 |
|
| Amortization of patented
formulations |
|
2,302 |
|
|
|
1,964 |
|
|
|
4,489 |
|
|
|
3,706 |
|
| Inventory write off and
disposal(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
|
Adjusted gross profit |
$ |
74,739 |
|
|
$ |
79,460 |
|
|
$ |
148,269 |
|
|
$ |
162,036 |
|
|
Adjusted gross profit margin |
|
71.9 |
% |
|
|
72.7 |
% |
|
|
73.1 |
% |
|
|
72.7 |
% |
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Reconciliation of
SG&A to Adjusted SG&A |
|
|
|
|
|
|
|
| SG&A |
$ |
45,423 |
|
|
$ |
48,413 |
|
|
$ |
85,860 |
|
|
$ |
83,337 |
|
| Share-based compensation |
|
(2,861 |
) |
|
|
(2,634 |
) |
|
|
(6,044 |
) |
|
|
(4,652 |
) |
| One-time former distributor
payment(1) |
|
— |
|
|
|
(3,500 |
) |
|
|
— |
|
|
|
(3,500 |
) |
| Executive reorganization
cost(3) |
|
(7 |
) |
|
|
(3 |
) |
|
|
(12 |
) |
|
|
(5 |
) |
|
Adjusted SG&A |
$ |
42,555 |
|
|
$ |
42,276 |
|
|
$ |
79,804 |
|
|
$ |
75,180 |
|
| |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
(in thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Reconciliation of Net
Income to Adjusted Net Income |
|
|
|
|
|
|
|
| Net income |
$ |
5,779 |
|
|
$ |
6,156 |
|
|
$ |
13,525 |
|
|
$ |
27,120 |
|
| Amortization of intangible
assets (excluding software) |
|
12,485 |
|
|
|
12,150 |
|
|
|
24,854 |
|
|
|
24,074 |
|
| Share-based compensation |
|
2,861 |
|
|
|
2,634 |
|
|
|
6,044 |
|
|
|
4,652 |
|
| One-time former distributor
payment(1) |
|
— |
|
|
|
3,500 |
|
|
|
— |
|
|
|
3,500 |
|
| Inventory write off and
disposal(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24 |
|
| Executive reorganization
cost(3) |
|
7 |
|
|
|
3 |
|
|
|
12 |
|
|
|
5 |
|
| Tax effect of adjustments |
|
(2,369 |
) |
|
|
(3,223 |
) |
|
|
(5,088 |
) |
|
|
(6,755 |
) |
|
Adjusted net income |
$ |
18,763 |
|
|
$ |
21,220 |
|
|
$ |
39,347 |
|
|
$ |
52,620 |
|
| Adjusted net income per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
0.06 |
|
|
$ |
0.08 |
|
|
Diluted |
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
0.06 |
|
|
$ |
0.08 |
|
|
(1) |
During the three and six months ended June 30, 2023, the Company
made a one-time $3.5 million payment to a former distributor in the
United Arab Emirates, which enabled the Company to establish a
partnership with another distributor in the region. |
|
|
|
|
(2) |
The inventory write-off and disposal costs relate to unused stock
of a product that the Company reformulated in June 2021 as a result
of regulation changes in the E.U. In the interest of having a
single formulation for sale worldwide, the Company reformulated on
a global basis and disposed the unused stock. |
|
|
|
|
(3) |
Represents ongoing benefit payments associated with the departure
of the Company's Chief Executive Officer that occurred in fiscal
year 2023 and Chief Operating Officer that occurred in fiscal year
2022. |
| |
|
Contacts: Investors:
Patrick FlahertyVice President,
Investor
Relationspatrick.flaherty@olaplex.com
Financial Media:
Lisa BobroffVice President, Global
Communications & Consumer
Engagementlisa.bobroff@olaplex.com
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