Waldencast plc, (NASDAQ: WALD) (“Waldencast”), a global multi-brand
beauty and wellness platform, today announced results for the third
quarter ended September 30, 2022.
Michel Brousset, Waldencast Founder and CEO, said: “We are
pleased with our third quarter performance, which continued the
positive momentum for our brands from the first half of the year,
highlighted by increased sales and profitability. We are excited
about our opportunities as we enter the final quarter of the year,
and while cognizant of the broader macro-economic environment, the
beauty category remains strong. In addition, our business and our
brands continue to deliver strong growth and profitability, which
is reflected in our reaffirmation of guidance. Our long-term
ambition is to build a global best-in-class beauty and wellness
multi-brand platform by scaling the next generation of high growth
purpose driven brands. We look forward to delivering on this
objective for the benefit of all Waldencast stakeholders.”
Results for the quarter ended September 30,
2022 (1)
Business Combination
On July 27, 2022 (the “Closing Date”), Waldencast consummated
the business combination with Obagi Global Holdings Limited (“Obagi
Skincare”) and Milk Makeup LLC (“Milk Makeup”). In accounting for
the business combination, Waldencast was deemed to be the
accounting acquirer, and Obagi Skincare was deemed to be the
predecessor entity for purposes of financial reporting. Under the
acquisition method of accounting, Waldencast’s assets and
liabilities retained their carrying values and the assets and
liabilities associated with Obagi Skincare and Milk Makeup were
recorded at their fair values measured as of the acquisition date,
which created a new basis of accounting.
Basis of Presentation
When reading our financial statements, you should note there is
a clear division between the “predecessor” periods that include
financials up to the Closing Date and “successor” periods that
include all periods after the acquisition date. The predecessor and
successor results shown are not comparable, as the successor period
includes the consolidated financial statements of Waldencast, Obagi
Skincare, and Milk Makeup, whereas the predecessor period includes
only Obagi Skincare’s financial statements.
Condensed Consolidated Statements of Operations
(UNAUDITED) (1)
| U.S.
Dollars (in thousands) |
|
Successor (Waldencast) |
|
|
Predecessor (Obagi) |
|
| |
|
2022 |
|
|
2022 |
|
2021 |
|
|
|
|
Period from July 28 to September 30 |
|
|
Period from July 1 to July 27 |
|
Period from July 1 to September 30 |
|
|
Net revenue |
$ |
73,445 |
|
|
$ |
2,834 |
|
$ |
58,510 |
|
| |
|
|
|
|
|
|
|
|
|
Cost of goods sold (2) |
|
27,505 |
|
|
|
980 |
|
|
12,668 |
|
| |
|
|
|
|
|
|
|
|
|
Gross profit |
|
45,940 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
38,667 |
|
|
|
6,921 |
|
|
35,099 |
|
|
Research and development |
|
1,404 |
|
|
|
331 |
|
|
2,496 |
|
|
Depreciation and amortization |
|
10,935 |
|
|
|
1,080 |
|
|
3,565 |
|
| |
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
51,006 |
|
|
|
9,312 |
|
|
53,828 |
|
| |
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
(5,066 |
) |
|
|
(6,478 |
) |
|
4,682 |
|
| |
|
|
|
|
|
|
|
|
|
Interest expense |
|
2,321 |
|
|
|
953 |
|
|
3,058 |
|
|
Forgiveness of Paycheck Protection Loan |
|
(13 |
) |
|
|
- |
|
|
- |
|
|
Other expenses, net |
|
(724 |
) |
|
|
32 |
|
|
106 |
|
|
Total other expenses—net |
|
1,584 |
|
|
|
985 |
|
|
3,164 |
|
| |
|
|
|
|
|
|
|
|
| Income
(loss) before income taxes |
|
(6,650 |
) |
|
|
(7,463 |
) |
|
1,518 |
|
| Income tax
expense |
|
740 |
|
|
|
153 |
|
|
164 |
|
| Net
(loss) income |
$ |
(7,390 |
) |
|
$ |
(7,616 |
) |
$ |
1,354 |
|
| |
|
|
|
|
|
|
|
|
| Net income
attributable to non-controlling interests |
|
257 |
|
|
|
|
|
|
|
| Net (loss)
income attributable to shareholders |
|
(7,647 |
) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting and disposal of the former Obagi China
Business (as defined below). All related estimates are subject to
change.
(2) The cost of goods sold in the predecessor periods excludes
product-related amortization expense.
Adjusted EBITDA reconciliation
(1) for the period ended September 30,
2022 – Waldencast plc
|
|
|
2022 |
|
2021 |
|
| |
Period from July 28 to September 30 (Successor
period) |
|
|
Period from July 1 to July 27 (Predecessor
period) |
|
Three months ended September 30 (Predecessor
period) |
|
| U.S.
Dollars (in thousands) |
Obagi |
Milk |
Waldencast Corp. |
Waldencast |
|
|
Obagi |
|
Obagi |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
$ |
3,965 |
|
$ |
(2,656 |
) |
$ |
(8,699 |
) |
$ |
(7,390 |
) |
|
|
$ |
(7,616 |
) |
|
$ |
1,354 |
|
|
| China
carve-out |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
340 |
|
|
|
(1,063 |
) |
|
| Adjusted
For: |
|
|
|
|
|
|
|
|
|
- |
|
|
|
Depreciation and amortization |
|
8,991 |
|
|
2,987 |
|
|
- |
|
|
11,978 |
|
|
|
|
1,080 |
|
|
|
3,565 |
|
|
|
Interest expense, net |
|
- |
|
|
- |
|
|
2,321 |
|
|
2,321 |
|
|
|
|
945 |
|
|
|
3,058 |
|
|
|
Income tax expense |
|
740 |
|
|
- |
|
|
- |
|
|
740 |
|
|
|
|
153 |
|
|
|
164 |
|
|
|
Stock-based compensation expense |
|
2,048 |
|
|
254 |
|
|
850 |
|
|
3,152 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Transaction costs |
|
1,002 |
|
|
135 |
|
|
3,610 |
|
|
4,747 |
|
|
|
|
1,968 |
|
|
|
649 |
|
|
|
Inventory fair value adjustment |
|
2,782 |
|
|
1,558 |
|
|
- |
|
|
4,340 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Impact of China related party sales |
|
155 |
|
|
- |
|
|
- |
|
|
155 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Foreign currency transaction |
|
(287 |
) |
|
(415 |
) |
|
- |
|
|
(702 |
) |
|
|
|
4 |
|
|
|
- |
|
|
|
Disposal of assets |
|
- |
|
|
(3 |
) |
|
- |
|
|
(3 |
) |
|
|
|
35 |
|
|
|
- |
|
|
|
Restructuring costs |
|
20 |
|
|
- |
|
|
- |
|
|
20 |
|
|
|
|
2 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
19,416 |
|
$ |
1,860 |
|
$ |
(1,918 |
) |
$ |
19,358 |
|
|
|
$ |
(3,089 |
) |
|
$ |
7,805 |
|
|
| Net
Sales |
$ |
57,576 |
|
$ |
15,869 |
|
$ |
- |
|
$ |
73,445 |
|
|
|
$ |
2,834 |
|
|
$ |
58,510 |
|
|
|
Adjusted EBITDA % |
|
33.7 |
% |
|
11.7 |
% |
N/A |
|
26.4 |
% |
|
|
|
-109.0 |
% |
|
|
13.3 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting and disposal of the former Obagi China
Business (as defined below). All related estimates are subject to
change.
Third Quarter Highlights
As the predecessor and successor results are not comparable, the
Company presented the comparative quarterly results that combine
the predecessor and post-acquisition periods for Obagi Skincare and
the pre and post-acquisition periods for Milk Makeup. Under U.S.
Generally Accepted Accounting Principles (“GAAP”), the periods
prior to and subsequent to the acquisition date should not be
combined, and Milk Makeup’s pre-acquisition period should not be
included. Management believes these non-GAAP comparative quarterly
results provide a perspective on the on-going performance of the
combined companies’ operations.
The Company also separately reports financial results on the
basis of adjusted gross margin, adjusted EBITDA and adjusted EBITDA
margin, which are non-GAAP financial measures. Refer to
“Reconciliation of Non-GAAP Financial Measures” below.
Obagi Skincare (1)
- Obagi Skincare recorded net sales of $60.4 million, an increase
of 3.2% from the same period in the prior year and an increase of
12.1% on a comparable basis
- The increase of 12.1% on a comparable basis excludes sales
related to the former Obagi China business, which was not acquired
by Waldencast (the “Obagi China Business”). The distribution of
Obagi Skincare’s products in China has remained under ownership of
Cedarwalk Skincare Limited, Obagi Skincare’s former owners, who
have entered into a licensing and distribution agreement with
Waldencast.
- Q3 2022 Net sales of $60.4 million includes $55.9 million of
comparable sales and $4.5 million of sales related to its former
Obagi China Business
- Q3 2021 Net sales of $58.5 million includes $49.9 million of
comparable sales and $8.6 million of sales related to its former
Obagi China Business
- Obagi Skincare gross margin of 64.9% and adjusted gross margin
of 75.0%, compared to gross margin of 76.3% and adjusted gross
margin of 74.8% in the prior year
- Q3 2022 adjusted gross margin excludes $2.8 million related to
the inventory fair value step-up and $0.2 million related to its
former Obagi China Business
- Q3 2021 adjusted gross margin excludes $7.3 million related to
its former Obagi China Business
- Obagi Skincare’s net loss of $3.7 million, compared to net
income of $1.4 million in the prior year, reflects $19.6 million of
transaction costs and other non-cash items
- Obagi Skincare’s adjusted EBITDA of $16.3 million (27.0% of net
sales), an increase of 109.2%, was primarily driven by robust
comparable sales and strong operational leverage
| |
2022 |
|
2021 |
|
|
|
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Predecessor
period) |
|
Three months ended September 30 (Predecessor +
Post-acquisition period) |
|
Three months ended September 30 (Predecessor
period) |
|
% Change |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Sales |
$ |
57,576 |
|
|
|
|
$ |
2,834 |
|
|
|
$ |
60,410 |
|
|
|
$ |
58,510 |
|
|
|
3.2 |
% |
|
|
Gross Margin |
$ |
37,735 |
|
65.5 |
% |
|
|
$ |
1,499 |
|
52.9 |
% |
|
$ |
39,234 |
|
64.9 |
% |
|
$ |
44,621 |
|
76.3 |
% |
|
-12.1 |
% |
|
| Adjusted
Gross Margin |
$ |
40,362 |
|
76.0 |
% |
|
|
$ |
1,578 |
|
56.0 |
% |
|
$ |
41,940 |
|
75.0 |
% |
|
$ |
37,329 |
|
74.8 |
% |
|
12.4 |
% |
|
| Net Income
(Loss) |
$ |
3,965 |
|
|
|
|
$ |
(7,616 |
) |
|
|
$ |
(3,651 |
) |
|
|
$ |
1,354 |
|
|
|
-369.6 |
% |
|
| Adjusted
EBITDA |
$ |
19,416 |
|
33.7 |
% |
|
|
$ |
(3,089 |
) |
-109.0 |
% |
|
$ |
16,327 |
|
27.0 |
% |
|
$ |
7,805 |
|
13.3 |
% |
|
109.2 |
% |
|
(1) Waldencast is in the process of finalizing its business
combination accounting and disposal of the former Obagi China
Business. All related estimates are subject to change.
Milk Makeup (1)
- Milk Makeup recorded net sales of $18.5 million, an increase of
41.7% from the same period in the prior year
- Milk Makeup’s gross margin of 54.0% and adjusted gross margin
of 62.5%, compared to gross margin and adjusted gross margin of
53.2% in the prior year
- Q3 2022 Adjusted gross margin excludes $1.6 million related to
the inventory fair value step-up
- Milk Makeup’s net loss of $4.4 million, compared to net loss of
$1.8 million in the prior year, reflecting $5.4 million of
transaction costs and other non-cash items
- Milk Makeup’s adjusted EBITDA of $0.9 million (5.0% of net
sales) compared to $(1.0) million in the prior year, was primarily
driven by strong sales growth, expansion in gross margin and
operational leverage
| |
2022 |
|
2021 |
|
|
|
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Pre-acquisition
period) |
|
Three months ended September 30 (Pre-acquisition +
Post-acquisition period) |
|
Three months ended September 30 (Pre-acquisition
period) |
|
% Change |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Sales |
$ |
15,869 |
|
|
|
|
$ |
2,670 |
|
|
|
$ |
18,539 |
|
|
|
$ |
13,083 |
|
|
|
41.7 |
% |
|
|
Gross Margin |
$ |
8,205 |
|
51.7 |
% |
|
|
$ |
1,815 |
|
68.0 |
% |
|
$ |
10,020 |
|
54.0 |
% |
|
$ |
6,957 |
|
53.2 |
% |
|
44.0 |
% |
|
| Adjusted
Gross Margin |
$ |
9,763 |
|
61.5 |
% |
|
|
$ |
1,815 |
|
68.0 |
% |
|
$ |
11,578 |
|
62.5 |
% |
|
$ |
6,957 |
|
53.2 |
% |
|
66.4 |
% |
|
| Net
Loss |
$ |
(2,656 |
) |
|
|
|
$ |
(1,764 |
) |
|
|
$ |
(4,420 |
) |
|
|
$ |
(1,836 |
) |
|
|
140.7 |
% |
|
| Adjusted
EBITDA |
$ |
1,860 |
|
11.7 |
% |
|
|
$ |
(930 |
) |
-34.8 |
% |
|
$ |
930 |
|
5.0 |
% |
|
$ |
(1,028 |
) |
-7.9 |
% |
|
NM |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting. All related estimates are subject to
change.
Waldencast Group central expenses – Period from July 28,
2022 to September 30, 2022 (Post-acquisition period)
- These central expenses result in a
net loss of $8.7 million and consists of $3.6 million of
transaction costs, $2.3 million of interest expense and $0.9
million of non-cash items.
- These central expenses result in an
adjusted EBITDA of $(1.9) million, reflecting ongoing central
overhead.
Fiscal 2022 Outlook
Waldencast reaffirms its previously issued outlook for Fiscal
2022 provided on November 15, 2021.
- Net Sales of $256.3 million
- Gross profit of $189.8 million
- Adjusted EBITDA of $49.6 million
In addition, as of September 30, 2022, there were 114.1 million
fully diluted shares outstanding. Waldencast has reserved 3.9
million shares for future issuances of employee incentive
awards.
Conference Call and Webcast Information
Investors and analysts interested in participating in the
conference call are invited to dial (646) 307-1963 or (800)
715-9871 for a toll-free number (conference ID: 6198725). The
conference call will be webcast live and can be accessed at
https://ir.waldencast.com/. A replay of the webcast will remain
available on the website for 90 days.
Waldencast will host a conference call to discuss the third
quarter results ended September 30, 2022, today, November 10, 2022,
at 8:30 AM ET. Those interested in participating
in the conference call are invited to dial (646) 307-1963
(conference ID: 6198725). International callers may dial (800)
715-9871. The live webcast of the conference call will be available
online at https://ir.waldencast.com/. A replay of the webcast will
remain available on the website for 90 days.
About Waldencast
Founded by Michel Brousset and Hind Sebti, Waldencast’s ambition
is to build a global best-in-class beauty and wellness operating
platform by developing, acquiring, accelerating, and scaling
conscious, high-growth purpose-driven brands. Waldencast’s
vision is fundamentally underpinned by its brand-led business model
that ensures proximity to its customers, business agility, and
market responsiveness, while maintaining each brand’s distinct DNA.
The first step in realizing its vision was the business combination
with Obagi Skincare and Milk Makeup. As part of the Waldencast
platform, its brands will benefit from the operational scale of a
multi-brand platform; the expertise in managing global beauty
brands at scale; a balanced portfolio to mitigate category
fluctuations; asset light efficiency; and the market responsiveness
and speed of entrepreneurial indie brands. For more information
please visit: https://ir.waldencast.com/.
Obagi Skincare is an industry-leading, advanced skin care line
rooted in research and skin biology, refined with a legacy of 30
years’ experience. First known as leaders in the treatment of
hyperpigmentation with the Obagi Nu-Derm® System, Obagi® products
are designed to diminish the appearance of premature aging,
photodamage, skin discoloration, acne, and sun damage. More
information about Obagi Skincare is available on the brand’s
website, Facebook, Twitter and Instagram pages.
Founded in 2016, Milk Makeup quickly became a cult-favorite
among the beauty community for its values of self-expression and
inclusion, captured by its signature Live Your Look, its innovative
formulas and clean ingredients. The brand creates vegan,
cruelty-free, clean formulas from its Milk Makeup HQ in Downtown
NYC. Currently, Milk Makeup offers over 300 products through its US
website www.MilkMakeup.com, and its retail partners including
Sephora in North America, Europe, the Middle East and Australia and
Cult Beauty and Selfridges in the UK.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this release that are not historical, are
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such statements include, but are not limited to, statements
regarding Waldencast’s outlook and guidance for Fiscal 2022; and
any assumptions underlying any of the foregoing. Words such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "should," and "will"
and variations of such words and similar expressions are intended
to identify such forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the control of Waldencast, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements. Important
factors, among others, that may affect actual results or outcomes
include, but are not limited to: (i) the inability to recognize the
anticipated benefits of the transactions with Obagi Skincare and
Milk Makeup; (ii) changes in general economic conditions, including
as a result of the COVID-19 pandemic, (iii) the ability to continue
to meet Nasdaq's listing standards; (iv) volatility of Waldencast's
securities due to a variety of factors, including Waldencast's
inability to implement its business plans or meet or exceed its
financial projections and changes; (v) the ability to implement
business plans, forecasts, and other expectations, and identify and
realize additional opportunities; and (vi) the ability of
Waldencast to implement its strategic initiatives and continue to
innovate Obagi Skincare’s and Milk Makeup’s existing products and
anticipate and respond to market trends and changes in consumer
preferences.
These and other risks, assumptions and uncertainties are more
fully described in the Risk Factors section of our Registration
Statement on Form F-1 (File No. 333-267053), originally filed with
the Securities and Exchange Commission (the “SEC”) on August 24,
2022 and as thereafter amended, and in our other documents that we
file or furnish with the SEC, which you are encouraged to read. To
the extent that COVID-19 adversely affects our business and
financial results, it may also have the effect of heightening many
of such risk factors.
Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results
may vary materially from those indicated or anticipated by such
forward-looking statements. Accordingly, you are cautioned not to
rely on these forward-looking statements, which speak only as of
the date they are made. The degree to which COVID-19 may adversely
affect Waldencast’s results and operations, including its ability
to achieve its outlook and guidance for Fiscal 2022, will depend on
numerous evolving factors and future developments, which are highly
uncertain, including, but not limited to, federal, state and local
governmental policies and initiatives designed to reduce the
transmission of COVID-19 and emerging new variants and how quickly
and to what extent normal economic and operating conditions can
resume. As a result, the impact on Waldencast’s financial and
operating results cannot be reasonably estimated with specificity
at this time, but the impact could be material Waldencast expressly
disclaims any current intention, and assumes no duty, to update
publicly any forward-looking statement after the distribution of
this release, whether as a result of new information, future
events, changes in assumptions or otherwise. Waldencast gives no
assurance that the combined company will achieve its
expectations.
Reconciliation of Non-GAAP Financial
Measures
The financial information and data contained in this release
have not been audited in accordance with the standards of the
Public Company Accounting Oversight Board and does not conform to
Regulation S-X.
Waldencast separately reports financial results on the basis of
adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin,
which are non-GAAP financial measures. See the attached tables for
a reconciliation of adjusted gross margin, adjusted EBITDA and
adjusted EBITDA margin to net sales and net income (loss), which
are the most directly comparable GAAP financial measures.
For Obagi Skincare, adjusted gross margin excludes the sales
related to the China distributor under a transition services
agreement, the impact of Obagi Skincare's related party sales to
the China distributor, and the impact of the inventory fair value
step-up as a result of the business combination accounting. For
Milk Makeup, adjusted gross margin excludes the impact of the
inventory fair value step-up as a result of the business
combination accounting.
Adjusted EBITDA is defined as net income (loss) excluding the
impact of income tax benefit, interest expense, net, depreciation
and amortization and the transaction costs, non-cash items, and
certain non-recurring income and expense that do not occur
regularly as part of the normal activities of Obagi Skincare and
Milk Makeup.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by
net sales.
Waldencast believes the non-GAAP measures of adjusted gross
margin, adjusted EBITDA and adjusted EBITDA margin provide useful
information to management and investors regarding certain financial
and business trends relating to its financial condition and results
of operations. Waldencast believes that the use of these non-GAAP
financial measures provides an additional tool for investors to use
in evaluating ongoing operating results and trends in comparing its
financial measures with other similar companies, many of which
present similar non-GAAP financial measures to investors. These
non-GAAP measures also provide perspective on how Waldencast’s
management evaluates and monitors the performance of the business
and provides a view on how the on-going operating company performs.
These non-GAAP financial measures are subject to inherent
limitations as they reflect the exercise of judgments by management
about which expense and income are excluded or included in
determining these non-GAAP financial measures.
Comparable net sales for Obagi Skincare in predecessor periods
excludes sales related to its former Obagi China business.
Contacts:
InvestorsICR Allison Malkin/Annie Erner/Nina
Weisswaldencastir@icrinc.com
MediaICRBrittney Fraser/Alecia
Pulmanwaldencast@icrinc.comAppendix
Adjusted gross margin reconciliation
(1) for the period ended September 30,
2022 and 2021 – Obagi Skincare
| |
|
|
|
|
|
|
| |
2022 |
|
2021 |
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Predecessor
period) |
|
Three months ended September 30 (Predecessor
period) |
| |
|
|
|
|
|
|
|
Net Sales |
$ |
57,576 |
|
|
|
$ |
2,834 |
|
|
$ |
58,510 |
|
|
Recurring sales |
|
53,118 |
|
|
|
|
2,816 |
|
|
|
49,902 |
|
|
Obagi China Business carveout |
|
- |
|
|
|
|
18 |
|
|
|
8,608 |
|
|
Chinese related party sales |
|
4,458 |
|
|
|
|
- |
|
|
|
- |
|
| Cost of
goods sold (2) |
|
19,841 |
|
|
|
|
980 |
|
|
|
12,668 |
|
| Amortization
expense (2) |
|
- |
|
|
|
|
355 |
|
|
|
1,221 |
|
|
Gross Margin |
$ |
37,735 |
|
|
|
$ |
1,499 |
|
|
$ |
44,621 |
|
|
Gross Margin % |
|
65.5 |
% |
|
|
|
52.9 |
% |
|
|
76.3 |
% |
| Gross Margin
Adjustments: |
|
|
|
|
|
|
|
Inventory fair value adjustment |
|
(2,782 |
) |
|
|
|
- |
|
|
|
- |
|
|
Obagi China Business carveout |
|
- |
|
|
|
|
(79 |
) |
|
|
7,292 |
|
|
Chinese related party sales |
|
155 |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Margin |
$ |
40,362 |
|
|
|
$ |
1,578 |
|
|
$ |
37,329 |
|
|
Adjusted Gross Margin % |
|
76.0 |
% |
|
|
|
56.0 |
% |
|
|
74.8 |
% |
|
(% of Recurring sales) |
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting and disposal of the former Obagi China
Business. All related estimates are subject to change.
(2) The cost of goods sold in the predecessor periods excludes
product-related amortization expense. Product-related amortization
expense is included as an adjustment to calculate the gross margin
per U.S. GAAP and to be comparable to the successor period.
Adjusted gross margin reconciliation
(1) for the period ended September 30,
2022 and 2021 – Milk Makeup
| |
2022 |
|
2021 |
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Pre-acquisition
period) |
|
Three months ended September 30 (Pre-acquisition
period) |
| |
|
|
|
|
|
|
|
Net Sales |
$ |
15,869 |
|
|
|
$ |
2,670 |
|
|
$ |
13,083 |
|
| Cost of
goods sold |
|
7,664 |
|
|
|
|
855 |
|
|
|
6,126 |
|
|
Gross Margin |
$ |
8,205 |
|
|
|
$ |
1,815 |
|
|
$ |
6,957 |
|
|
Gross Margin % |
|
51.7 |
% |
|
|
|
68.0 |
% |
|
|
53.2 |
% |
| Gross Margin
Adjustments: |
|
|
|
|
|
|
|
Inventory fair value adjustment |
|
(1,558 |
) |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Margin |
$ |
9,763 |
|
|
|
$ |
1,815 |
|
|
$ |
6,957 |
|
|
Adjusted Gross Margin % |
|
61.5 |
% |
|
|
|
68.0 |
% |
|
|
53.2 |
% |
| |
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting. All related estimates are subject to
change.
Adjusted EBITDA reconciliation
(1) for the period ended September 30,
2022 – Obagi Skincare
| |
2022 |
|
2021 |
|
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Predecessor
period) |
|
Three months ended September 30 (Predecessor
period) |
|
| |
|
|
|
|
|
|
|
|
Net Income (Loss) |
$ |
3,965 |
|
|
|
$ |
(7,616 |
) |
|
$ |
1,354 |
|
|
| China
carve-out |
|
- |
|
|
|
|
340 |
|
|
|
(1,063 |
) |
|
| Adjusted
For: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
8,991 |
|
|
|
|
1,080 |
|
|
|
3,565 |
|
|
|
Interest expense, net |
|
- |
|
|
|
|
945 |
|
|
|
3,058 |
|
|
|
Income tax expense |
|
740 |
|
|
|
|
153 |
|
|
|
164 |
|
|
|
Stock-based compensation expense |
|
2,048 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Transaction costs |
|
1,002 |
|
|
|
|
1,968 |
|
|
|
649 |
|
|
|
Inventory fair value adjustment |
|
2,782 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Impact of China related party sales |
|
155 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Foreign currency transaction |
|
(287 |
) |
|
|
|
4 |
|
|
|
- |
|
|
|
Disposal of assets |
|
- |
|
|
|
|
35 |
|
|
|
- |
|
|
|
Restructuring costs |
|
20 |
|
|
|
|
2 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
19,416 |
|
|
|
$ |
(3,089 |
) |
|
$ |
7,805 |
|
|
| Net
Sales |
$ |
57,576 |
|
|
|
$ |
2,834 |
|
|
$ |
58,510 |
|
|
|
Adjusted EBITDA % |
|
33.7 |
% |
|
|
|
-109.0 |
% |
|
|
13.3 |
% |
|
(1) Waldencast is in the process of finalizing its business
combination accounting and disposal of the former Obagi China
Business. All related estimates are subject to change.
Adjusted EBITDA reconciliation
(1) for the period ended September 30,
2022 – Milk Makeup
| |
2022 |
|
2021 |
|
| U.S.
Dollars (in thousands) |
Period from July 28 to September 30 (Post-acquisition
period) |
|
|
Period from July 1 to July 27 (Pre-acquisition
period) |
|
Three months ended September 30 (Pre-acquisition
period) |
|
| |
|
|
|
|
|
|
|
|
Net Loss |
$ |
(2,656 |
) |
|
|
$ |
(1,764 |
) |
|
$ |
(1,836 |
) |
|
| Adjusted
For: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
2,987 |
|
|
|
|
272 |
|
|
|
523 |
|
|
|
Interest expense, net |
|
- |
|
|
|
|
1 |
|
|
|
26 |
|
|
|
Stock-based compensation expense |
|
254 |
|
|
|
|
- |
|
|
|
125 |
|
|
|
Transaction costs |
|
135 |
|
|
|
|
340 |
|
|
|
- |
|
|
|
Inventory fair value adjustment |
|
1,558 |
|
|
|
|
- |
|
|
|
- |
|
|
|
Foreign currency transaction |
|
(415 |
) |
|
|
|
221 |
|
|
|
16 |
|
|
|
Disposal of assets |
|
(3 |
) |
|
|
|
- |
|
|
|
118 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
1,860 |
|
|
|
$ |
(930 |
) |
|
$ |
(1,028 |
) |
|
| Net
Sales |
$ |
15,869 |
|
|
|
$ |
2,670 |
|
|
$ |
13,083 |
|
|
|
Adjusted EBITDA % |
|
11.7 |
% |
|
|
|
-34.8 |
% |
|
|
-7.9 |
% |
|
| |
|
|
|
|
|
|
|
(1) Waldencast is in the process of finalizing its business
combination accounting. All related estimates are subject to
change.
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