F45 Training Holdings Inc. (“F45” or the “Company”) (NYSE:FXLV),
the fastest growing fitness franchisor in the world according to
Entrepreneur, today announced financial results for the fiscal
third quarter ended September 30, 2021.
“We delivered another solid quarter with continued strength in
New Franchise Sold and significant recovery in studio Visits,
particularly in the United States – our most important growth
market. Furthermore, we continue to be encouraged by the health of
our studio backlog and how it positions us to continue to execute
on our new studio opening strategy. With approximately 1,400 Total
Franchises Sold but not yet open studios, we believe we are well
positioned to achieve our ambitious unit growth targets,” said Adam
J. Gilchrist, President, CEO and Chairman of F45.
He continued: “We recently announced several exciting milestones
that we believe will help accelerate our growth into the future,
including the expansion of our partnership with the U.S. Military;
our collaboration with OneSpaWorld, which brings the F45 experience
to the high seas; and finally, the entry into a definitive
agreement to acquire Vive Active, which will strengthen our
business through the addition of a disruptive and innovative
fitness brand to our portfolio.”
Q3 2021 Compared to Q3 2020 Fiscal Highlights
- Total revenue increased 24% to $27.2 million.
- Same store sales increased 6% globally and 67% in the United
States.
- System-wide sales increased 33% to $99.4 million.
- System-wide visits increased 17% to 6.4 million.
- Net Initial studio openings totaled 63 compared to 101 in the
prior year period.
- Net Franchises Sold totaled 210 compared to 155 in the prior
year period.
- Reported loss from operations of $90.6 million.
- Adjusted EBITDA increased 37% to $10.1 million.(1)
(1) Please refer to explanation of non-GAAP financial measure
for Adjusted EBITDA.
Results for the Third Quarter Ended September 30,
2021
Total revenue increased $5.2 million, or 24%, to $27.2
million from $22.0 million as compared to the third quarter last
year.
- Franchise revenue increased $4.4 million, or 32%, to $18.5
million from $14.1 million in the prior year period. The increase
in franchise revenue was driven by the increase in establishment
and other franchise-related fees. The increased revenue from new
franchisees more than offset the negative impact of approximately
$1 million of credits provided to temporary COVID-related studio
closures, primarily in Australia and Asia.
- Equipment and merchandise revenue increased $0.8 million, or
10%, to $8.7 million from $7.9 million in the prior year period.
The increase in equipment and merchandise revenue was driven by
increased sales of World Packs and Top-Up Packs, which more than
offset the approximately $3 million negative impact related to
delays in the delivery of World Packs to certain studios.
Gross profit increased $5.1 million, or 35%, to $19.8
million from $14.7 million as compared to the third quarter of last
year. Gross profit margin of 72.8% represented an increase of 580
basis points from the same period last year, primarily due to a
higher mix of franchise revenue.
Selling, general and administrative (“SG&A”) expenses
were $110.5 million, compared to $10.1 million in the third quarter
last year. The increase in SG&A expense was primarily due to
significant one-time expenses, including an approximately $85.7
million increase in stock-based compensation and the acceleration
of RSUs related to the Company’s IPO.
Loss from operations was $90.6 million, compared to
income from operations of $4.6 million in the third quarter last
year.
Interest expense was $41.9 million, compared to $0.5
million in the third quarter last year. The increase was due to
higher interest expense related to increased borrowings and
one-time charges related to the write-off of $23.7 million of
unamortized debt discount on the Company’s convertible notes and
interest payments related to the early termination of our
Subordinated Credit Agreement.
Net loss was $130.2 million, compared to net income of
$2.4 million in the third quarter last year.
Adjusted EBITDA was $10.1 million, compared to $7.4
million in the third quarter last year. Adjusted EBITDA margin of
37.2% represented an increase of 361 basis points from the same
period last year.
Balance Sheet and Liquidity Overview
As of September 30, 2021, the Company had approximately $52.6
million of cash and cash equivalents, and no debt outstanding. This
compares to $29.0 million of cash and equivalents and $243 million
of total debt outstanding, in the prior year period. As of
September 30, 2021, the Company had approximately $88.5 million of
capacity under its revolving credit facility.
Financial Outlook
For the year ending December 31, 2021, the Company is increasing
the low end of the range for net New Franchises Sold and net
Initial Studio Openings.
- Full-year net New Franchises Sold of 830 to 850, compared to
prior range of 800 to 850.
- Full-year net Initial Studio Openings of 240 to 260, compared
to prior range of 220 to 260.
While there remains considerable uncertainty regarding the
global supply chain backdrop and delays at major shipping ports,
the Company is maintaining its financial outlook for the year.
- Full-year revenue between $132 million and $137 million.
- Full-year Adjusted EBITDA between $50 million and $52
million.
The outlook above is based on the assumption that there is no
change from the current estimated delivery dates for equipment and
merchandise provided by the Company’s third-party logistics
partners, as well as no significant worsening of the COVID-19
pandemic that materially impacts performance, including prolonged
studio closures or other mandated operational restrictions.
Conference Call
A conference call to discuss the Company’s third quarter results
is scheduled for November 12, 2021, at 8:30 A.M ET. To participate,
please dial 844-200-6205 or +1 929-526-1599, for international
callers, and use the passcode 991007. The call is also accessible
via webcast at https://ir.f45training.com/. A recording will be
available shortly after the conclusion of the call. To access the
replay, please dial 866-813-9403 or +44 204-525-0658, for
international callers, and use the passcode 450466. An archive of
the webcast will be available on F45 Training Holdings’ investor
relations website.
About F45
F45 offers consumers functional 45-minute workouts that are
effective, fun and community-driven. F45 utilizes proprietary
technologies: a fitness programming algorithm and a patented
technology-enabled delivery platform that leverages a rich content
database of over 3,900 unique functional training movements to
offer new workouts each day and provide a standardized experience
across the Company’s global footprint.
Non-GAAP Financial Measures
In addition to reporting our financial results in accordance
with U.S. generally accepted accounting principles (“GAAP”), this
press release presents certain other supplemental financial
measures, including Adjusted EBITDA, which is a measurement that is
not calculated in accordance with GAAP. Management believes that
Adjusted EBITDA is useful to management as it allows investors to
evaluate the effectiveness of our business strategies, make
budgeting and capital allocation decisions, and compare our
performance against that of other peer companies using similar
measures. Adjusted EBITDA is defined as net income before interest,
taxes, depreciation and amortization and adjusted to exclude the
impact of sales tax liability, transaction expenses, certain legal
costs and settlements, COVID-19 concessions, growth and new market
development expense as well as certain other items identified as
affecting comparability, when applicable. Adjusted EBITDA
eliminates non-cash depreciation and amortization expense that
results from our capital investments and intangible assets, as well
as income taxes, which may not be comparable with other companies
based on our tax structure. Adjusted EBITDA should be considered in
addition to, and not as a substitute for, net income in accordance
with GAAP as a measure of performance. Other companies may define
Adjusted EBITDA differently and, as a result the Company’s measures
of Adjusted EBITDA, it may not be directly comparable to those of
other companies. A reconciliation of non-GAAP financial measures
used in this press release to their nearest comparable GAAP
financial measures is included at the end of this press
release.
Financial Metrics and Other Data
This press release includes several key financial metrics and
other data used by the Company management in assessing the
Company’s results of operations:
“Initial Studio Openings” means the number of studios that were
determined to be first opened during such period. We classify an
Initial Studio Opening to occur in the first month in which the
studio first generates monthly revenue of at least $4,500. Initial
Studio Openings are not adjusted downward for studios that were
temporarily closed due to the COVID-19 pandemic or otherwise.
“New Franchises Sold” means, for any specific period, the number
of franchises sold during such period using the methodology set
forth below for “Total Franchises Sold.”
“Open Studios” means the number of studios that were open for
business as of a certain date. A studio may be classified as an
Open Studio regardless of whether or not it generated minimum
monthly revenue of $4,500. During the COVID-19 pandemic, a
significant portion of our network was forced to temporarily close,
which reduced the number of Open Studios. As studios re-open in
accordance with state and local regulations, they are reflected in
the Open Studios figures.
“Same store sales” means, for any reporting period, studio-level
revenue generated by a comparable base of franchise studios, which
we define as open studios that have been operating for more than 16
months.
“System-wide Sales” are defined as all payments made to our
studios and includes payment for classes, apparel and other sales
for a given period. We track System-wide Sales as an indication of
the strength of our franchisee network.
“Total Franchises Sold” represents, as of any specified date,
(i) the total number of signed franchise agreements in place as of
such date for which an establishment fee has been paid and (ii) the
total number of franchises committed in a multi-studio agreement in
place as of such date for which an upfront payment has been made,
in each case that have not been terminated. Each new franchise is
included in the number of total franchises sold from the date on
which such franchise first satisfies the condition in clause (i) or
(ii) above, as applicable. total franchises sold includes franchise
arrangements in all stages of development after signing a franchise
agreement, and includes franchises with open studios. Franchises
are removed from total franchises sold upon termination of the
franchise agreement.
“Total Studios” as of any specified date, means the total
cumulative Initial Studio Openings as of that date less cumulative
permanent studio closures as of that date. Total Studios are not
adjusted downward for studios that were temporarily closed due to
the COVID-19 pandemic or otherwise.
“Visits” means the number of registered individual workouts for
any specified period. A workout is registered when the consumer
checks into a class.
Forward-Looking Statements
F45’s financial outlook and other statements in this press
release that refer to future plans and expectations are
forward-looking statements, within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve a number
of risks and uncertainties. Words such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue” “or negatives of these words and
variations of such words and similar expressions are intended to
identify such forward-looking statements. Statements that refer to
or are based on estimates, forecasts, projections, uncertain events
or assumptions, including statements relating to F45’s strategy,
total addressable market and market opportunity, financial outlook,
business plans, the pending acquisition of Vive Active and the
anticipated benefits, future macroeconomic conditions, future
impacts of the COVID-19 pandemic, and future products and services,
also identify forward-looking statements. All forward-looking
statements included in this press release are based on management’s
expectations as of the date of this press release and, except as
required by law, F45 disclaims any obligation to update these
forward- looking statements to reflect future events or
circumstances.
Forward-looking statements are subject to certain risks,
uncertainties and assumptions relating to factors that could cause
actual results to differ materially from those anticipated in such
statements, including, without limitation, the following: our
dependence on the operational and financial results of, and our
relationships with, our franchisees and the success of their new
and existing studios; our ability to protect our brand and
reputation; our ability to identify, recruit and contract with a
sufficient number of qualified franchisees; our ability to execute
our growth strategy, including through development of new studios
by new and existing franchisees; our ability to manage our growth
and the associated strain on our resources; our ability to
successfully integrate any acquisitions, or realize their
anticipated benefits; the high level of competition in the health
and fitness industry; economic, political and other risks
associated with our international operations; changes to the
industry in which we operate; our reliance on information systems
and our and our franchisees’ ability to properly maintain the
confidentiality and integrity of our data; the occurrence of cyber
incidents or a deficiency in our cybersecurity protocols; our and
our franchisees’ ability to attract and retain members; our and our
franchisees’ ability to identify and secure suitable sites for new
franchise studios; risks related to franchisees generally; our
ability to obtain third-party licenses for the use of music to
supplement our workouts; certain health and safety risks to members
that arise while at our studios; our ability to adequately protect
our intellectual property; risks associated with the use of social
media platforms in our marketing; our ability to obtain and retain
high-profile strategic partnership arrangements; our ability to
comply with existing or future franchise laws and regulations; our
ability to anticipate and satisfy consumer preferences and shifting
views of health and fitness; our business model being susceptible
to litigation; the increased expenses associated with being a
public company; the occurrence of any event, change, or other
circumstances that could give rise to the termination of the
agreement to acquire Vive Active; the inability to timely complete
or complete the Vive Active acquisition because of the failure to
satisfy conditions to closing set forth in the acquisition
agreement; the risk that the Vive Active transaction disrupts our
current plans and operations and/or Vive Active as a result of the
announcement, pendency or consummation of the transaction; the
ability to successfully integrate the operations and employees of
Vive Active into our operations; the ability to recognize the
anticipated benefits of the Vive Active acquisition; and additional
factors discussed in our filings with the Securities and Exchange
Commission (the “SEC”). Further, many of these factors are, and may
continue to be, amplified by the COVID-19 pandemic. Detailed
information regarding these and other factors that could affect
F45’s business and results is included in F45’s SEC filings,
including in the section titled “Risk Factors” in F45’s Final
Prospectus dated July 14, 2021.
F45 Training Holdings Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands, except share amounts and share data)
(unaudited)
September 30, 2021
December 31, 2020
Assets Current assets: Cash and cash equivalents
$
52,618
$
28,967
Accounts receivable, net
15,326
9,582
Due from related parties
2,150
2,406
Inventories
17,252
4,485
Deferred costs
1,851
1,616
Prepaid expenses
10,653
2,891
Other current assets
5,209
2,452
Total current assets
105,059
52,399
Property and equipment, net
2,014
884
Deferred tax assets, net
6,703
7,096
Intangible assets, net
25,598
1,758
Deferred costs, net of current
13,081
11,215
Other long-term assets
14,166
5,165
Total assets
$
166,621
$
78,517
Liabilities, convertible preferred stock and stockholders' equity
(deficit) Current liabilities: Accounts payable and accrued
expenses
$
34,461
$
18,657
Deferred revenue
8,787
3,783
Interest payable
143
250
Current portion of long-term debt
-
5,847
Income taxes payable
1,792
3,499
Total current liabilities
45,183
32,036
Deferred revenue, net of current
5,908
10,312
Long-term derivative liability
-
36,640
Long-term debt, net of current
-
236,186
Other long-term liabilities
4,615
4,890
Total liabilities
$
55,706
$
320,064
Commitments and contingencies (Note 12) Convertible preferred
stock, $0.0001 par value; 0 and 9,854,432 shares issued and
outstanding as of September 30, 2021 and December 31, 2020,
respectively (Note 13)
-
98,544
Stockholders’ equity (deficit) Common stock, $0.00005 par value;
90,554,571 and 29,281,514 shares issued and outstanding as of
September 30, 2021 and December 31, 2020, respectively
4
1
Additional paid-in capital
659,977
11,456
Accumulated other comprehensive loss
(938
)
(982
)
Accumulated deficit
(373,408
)
(175,846
)
Less: Treasury stock
(174,720
)
(174,720
)
Total stockholders' equity (deficit)
110,915
(340,091
)
Total liabilities, convertible preferred stock and stockholders'
equity (deficit)
$
166,621
$
78,517
F45 Training Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (in thousands, except
share amounts and share data)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Revenues: Franchise (Related party: $2,472 and
$43 for the three months endedSeptember 30, 2021 and 2020,
respectively, and $2,572 and $159for the nine months ended
September 30, 2021 and 2020,respectively)
$
18,513
$
14,067
$
52,250
$
39,766
Equipment and merchandise (Related party: $0 and $0 for the
threemonths ended September 30, 2021 and 2020, respectively, and
$0and $328 for the nine months ended September 30, 2021 and
2020,respectively)
8,664
7,896
19,950
24,497
Total revenues
27,177
21,963
72,200
64,263
Costs and operating expenses: Cost of
franchise revenue (Related party: $0 and $40 for the threemonths
ended September 30, 2021 and 2020, respectively, and $0and $12 for
the nine months ended September 30, 2021 and 2020,respectively)
1,486
1,997
4,162
6,591
Cost of equipment and merchandise (Related party: $1,534 and
$355for the three months ended September 30, 2021 and
2020,respectively, and $3,678 and $1,098 for the nine months
endedSeptember 30, 2021 and 2020, respectively)
5,752
5,247
12,672
14,410
Selling, general and administrative expenses
110,492
10,100
145,882
31,724
Total costs and operating expenses
117,730
17,344
162,716
52,725
(Loss) income from operations
(90,553
)
4,619
(90,516
)
11,538
Loss on derivative liabilities
-
-
48,603
-
Interest expense, net
41,897
534
59,165
1,333
Other income, net
(2,035
)
(238
)
(1,415
)
(815
)
(Loss) income before income taxes
(130,415
)
4,323
(196,869
)
11,020
(Benefit) provision for income taxes
(222
)
1,974
693
3,536
Net (loss) income
$
(130,193
)
$
2,349
$
(197,562
)
$
7,484
Other comprehensive (loss) income
Unrealized (loss) gain on interest rate swap,
net of tax
(7
)
88
196
(639
)
Reclassification to interest expense from interest rate swaps
464
-
464
-
Foreign currency translation adjustment, net of tax
(509
)
138
(616
)
(426
)
Comprehensive (loss) income
$
(130,245
)
$
2,575
$
(197,518
)
$
6,419
Per share data:
Net (loss) income per common share Basic and
diluted
$
(1.52
)
$
0.03
$
(4.10
)
$
0.09
Weighted average common shares outstanding
Basic and diluted
85,463,755
58,000,000
48,214,724
58,000,000
F45 Training Holdings, Inc.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (in thousands)
(unaudited)
Nine Months Ended September,
2021
2020
Cash flows from operating activities Net (loss) income
$
(197,562
)
$
7,484
Adjustments to reconcile net (loss) income to net cash used in
operating activities: Depreciation
195
279
Amortization of intangible assets
1,968
499
Amortization of deferred costs
1,330
975
Accretion and write-off of debt discount
31,585
-
Bad debt expense
5,417
3,400
Stock compensation expense
80,707
-
(Gain) loss on disposal of property, plant and equipment
(6
)
-
Prepayment penalty included in interest expense
13,034
-
PPP loan forgiveness
(2,063
)
-
Loss on derivative liability
48,603
-
Provision for inventory
147
251
Paid in kind interest accrual
12,851
-
Unrealized foreign currency gains or losses
333
(659
)
Changes in operating assets and liabilities: Due from related
parties
178
-
Accounts receivable, net
(11,361
)
(80
)
Inventories
(7,120
)
(2,476
)
Prepaid expenses
(7,863
)
1,673
Other current assets
(2,742
)
(2,344
)
Deferred costs
(2,534
)
(3,616
)
Other long-term assets
(9,274
)
(4,675
)
Accounts payable and accrued expenses
9,878
2,891
Deferred revenue
989
(13,507
)
Interest payable
(107
)
188
Income taxes payable
(1,766
)
1,391
Other long-term liabilities
425
(971
)
Net cash used in operating activities
(34,758
)
(9,297
)
Cash flows from investing activities Purchases of property and
equipment
(1,465
)
(307
)
Disposal of property and equipment
-
3
Acquisition of Flywheel
(25,033
)
-
Purchases of intangible assets
(872
)
(601
)
Net cash used in investing activities
(27,370
)
(905
)
Cash flows from financing activities Borrowings under revolving
facility
-
8,145
Proceeds from issuance of Common Stock, net of offering costs
277,753
-
Repayment of 1st Lien Loan
(33,688
)
(2,250
)
Repayment of 2nd Lien Loan
(137,443
)
-
Prepayment of premium on 2nd Lien Loan
(13,034
)
-
Deferred financing costs
(1,012
)
-
Repayment of revolving facility
(7,000
)
-
Proceeds from Paycheck Protection Program loan
-
2,062
Net cash provided by financing activities
85,576
7,957
Effect of exchange rate changes on cash and cash equivalents
203
(171
)
Net decrease in cash and cash equivalents
23,651
(2,416
)
Cash and cash equivalents at beginning of period
28,967
8,267
Cash and cash equivalents at end of period
$
52,618
$
5,851
Supplemental disclosures of cash flow information Interest
paid
14,143
803
Income taxes paid
1,771
-
Supplemental disclosure of noncash financing and investing
activities: Conversion of convertible debt and derivative liability
into common stock
$
191,519
$
-
Deferred offering costs included in accounts payable and accrued
expenses
-
1,030
Conversion of convertible preferred stock into common stock
98,544
-
SEGMENT INFORMATION
(in thousands) (unaudited)
For the Three Months Ended
September 30, 2021
For the Three Months Ended
September 30, 2020
Gross profit
Revenue
Cost of revenue
Gross profit
Revenue
Cost of revenue
(loss)
United States: Franchise
$
11,117
$
1,047
$
10,070
$
6,245
$
1,774
$
4,471
Equipment and merchandise
$
4,162
$
2,239
$
1,923
$
3,583
$
1,857
$
1,726
$
15,279
$
3,286
$
11,993
$
9,828
$
3,631
$
6,197
Australia: Franchise
$
4,330
$
158
$
4,172
$
6,145
$
248
$
5,897
Equipment and merchandise
$
2,234
$
1,992
$
242
$
2,707
$
2,305
$
402
$
6,564
$
2,150
$
4,414
$
8,852
$
2,553
$
6,299
Rest of World: Franchise
$
3,066
$
281
$
2,785
$
1,677
$
(25
)
$
1,702
Equipment and merchandise
$
2,268
$
1,521
$
747
$
1,606
$
1,085
$
521
$
5,334
$
1,802
$
3,532
$
3,283
$
1,060
$
2,223
Consolidated: Franchise
$
18,513
$
1,486
$
17,027
$
14,067
$
1,997
$
12,070
Equipment and merchandise
$
8,664
$
5,752
$
2,912
$
7,896
$
5,247
$
2,649
$
27,177
$
7,238
$
19,939
$
21,963
$
7,244
$
14,719
For the Nine Months Ended
September 30, 2021
For the Nine Months Ended
September 30, 2020
Gross profit
Revenue
Cost of revenue
Gross profit
Revenue
Cost of revenue
(loss)
United States: Franchise
$
29,873
$
3,377
$
26,496
$
21,954
$
5,863
$
16,091
Equipment and merchandise
$
11,166
$
6,154
$
5,012
$
11,045
$
5,561
$
5,484
$
41,039
$
9,531
$
31,508
$
32,999
$
11,424
$
21,575
Australia: Franchise
$
12,039
$
430
$
11,609
$
10,985
$
580
$
10,405
Equipment and merchandise
$
3,762
$
3,313
$
449
$
5,185
$
4,489
$
696
$
15,801
$
3,743
$
12,058
$
16,170
$
5,069
$
11,101
Rest of World: Franchise
$
10,338
$
355
$
9,983
$
6,827
$
148
$
6,679
Equipment and merchandise
$
5,022
$
3,205
$
1,817
$
8,267
$
4,360
$
3,907
$
15,360
$
3,560
$
11,800
$
15,094
$
4,508
$
10,586
Consolidated: Franchise
$
52,250
$
4,162
$
48,088
$
39,766
$
6,591
$
33,175
Equipment and merchandise
$
19,950
$
12,672
$
7,278
$
24,497
$
14,410
$
10,087
$
72,200
$
16,834
$
55,366
$
64,263
$
21,001
$
43,262
TOTAL FRANCHISES SOLD
(unaudited)
Three months ended September 30,
2021
Three months ended September 30,
2020
U.S.
Australia
ROW
Total
U.S.
Australia
ROW
Total
Total Franchises Sold, beginning of
period
1,379
785
637
2,801
846
667
546
2,059
New Franchises Sold, net(a)
87
15
108
210
68
8
79
155
Total Franchises Sold, end of period
1,466
800
745
3,011
914
675
625
2,214
Nine Months Ended September 30,2021 Nine Months Ended September
30,2020 U.S. Australia ROW Total U.S. Australia ROW Total Total
Franchises Sold, beginning of period
931
679
634
2,244
814
643
435
1,892
New Franchises Sold, net(a)
535
121
111
767
100
32
190
322
Total Franchises Sold, end of period
1,466
800
745
3,011
914
675
625
2,214
(a) New Franchises Sold are shown net of franchises that were
signed but subsequently terminated prior to the initial studio
opening.
TOTAL NUMBER OF STUDIOS
(unaudited)
Three Months Ended September 30,
2021
Three Months Ended September 30,
2020
U.S.
Australia
ROW
Total
U.S.
Australia
ROW
Total
Total Studios, beginning of period
556
628
371
1,555
396
595
284
1,275
Initial Studio Openings, net
30
5
28
63
55
9
37
101
Total Studios, end of period
586
633
399
1,618
451
604
321
1,376
Nine Months Ended September 30,2021 Nine Months Ended September
30,2020 U.S. Australia ROW Total U.S. Australia ROW Total
Total Studios, beginning of period
486
616
335
1,437
320
581
239
1,140
Initial Studio Openings, net
100
17
64
181
131
23
82
236
Total Studios, end of period
586
633
399
1,618
451
604
321
1,376
(a) Initial Studio Openings are shown net of studios that have
permanently closed which had a recorded initial studio opening.
GAAP to Non-GAAP
Reconciliation
(in thousands, except share
amounts and share data)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
(dollars in thousands, except per share amounts) Net (loss)
income
$
(130,193
)
$
2,349
$
(197,562
)
$
7,484
Net interest expense
41,897
534
59,165
1,333
(Benefit) provision for income taxes
(222
)
1,974
693
3,536
Depreciation and amortization
786
301
2,163
778
Amortization of deferred costs
605
290
1,330
975
EBITDA
$
(87,127
)
$
5,448
$
(134,211
)
$
14,106
Sales tax reserve (a)
140
1
387
516
Transaction fees (b)
5,485
1,124
8,816
3,780
Loss on derivative liability (c)
-
-
48,603
-
Certain legal costs and settlements (d)
1,029
808
4,452
1,589
Stock-based compensation (e)
85,745
-
85,745
-
Recruitment (f)
17
-
70
-
COVID concessions (g)
1,590
-
5,923
-
Relocation (h)
258
-
510
30
Development costs (i)
932
-
3,720
-
Charitable donation (j)
2,046
-
2,046
-
Adjusted EBITDA
$
10,115
$
7,381
$
26,061
$
20,021
(a)
Represents the impact of one-time sales
tax liability arising from a change in timing of enforceability of
certain contractual terms in arrangements with franchisees.
(b)
Represents transaction costs incurred as a
part of a reorganization and the issuance of preferred shares,
including legal, tax, accounting and other professional
services.
(c)
Represents loss on derivative liabilities
associated with convertible note.
(d)
Represents legal costs related to
litigation activities and legal settlements.
(e)
Represents stock-based compensation of our
employees, non-employees and directors.
(f)
Represents one-time recruitment expense of
department leaders.
(g)
Represents concessions made to studios
impacted by COVID, including one time COVID-19 related write-
offs.
(h)
Represents costs incurred as a part of the
relocation of our corporate headquarters.
(i)
Represents one-time non-recurring costs
incurred with launch of new brand.
(j)
Represents one-time charitable donation
made in the amount of total PPP loan forgiveness pursuant to the
use of proceeds discussed in our IPO prospectus.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211112005506/en/
Investor and Media Relations: Bruce Williams, Managing Director
ICR, Inc. F45IR@icrinc.com 332-242-4303
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