Net revenues increased by 57.6% to $101.1
million
Active customers increased by 79.2% to 1.6
million
FIGS, Inc. (“FIGS” or the “Company”) (NYSE: FIGS), a founder-led
direct-to-consumer healthcare apparel and lifestyle brand that
seeks to celebrate, empower, and serve current and future
generations of healthcare professionals, announced results for the
quarter ended June 30, 2021. Net revenues were $101.1 million in Q2
2021, an increase of 57.6% as compared to Q2 2020. Active customers
grew to 1.6 million at the end of Q2 2021, an increase of 79.2% as
compared to the end of Q2 2020.
“We are extremely pleased to have delivered strong financial
performance in our first quarter as a public company following a
successful IPO. We are so proud to have completed our public
offering in the only way we could have imagined – by ringing the
bell with as many Awesome Humans as we could fit on the podium
right alongside us,” said Co-Chief Executive Officers Heather
Hasson and Trina Spear. “Healthcare professionals deserve to be
celebrated, empowered, and served, and that's what we aim to do
every day. The way we executed and grew our business in Q2 was
another step in that direction. We generated over $100 million in
net revenues, we grew to 1.6 million active customers, and we
continued to drive growth in a sustainable way. Thank you to the
entire FIGS team, and most importantly, to all the healthcare
professionals who serve and inspire all of us on a daily basis. We
will continue to make investments that expand your access to the
best products, the most seamless direct-to-consumer experience, and
to share your stories with the world.”
Financial Highlights (Unaudited):
Three months ended June
30,
Six months ended June
30,
in thousands, except per share and margin
percentage amounts
2021
2020
2021
2020
Net revenues
$
101,117
$
64,143
$
188,196
$
96,110
Net income (loss)
$
(40,546
)
$
14,175
$
(29,106
)
$
18,309
Net income, as adjusted(1)
$
14,342
$
14,487
$
27,896
$
18,897
Diluted EPS
$
(0.26
)
$
0.09
$
(0.19
)
$
0.12
Diluted EPS, as adjusted(1)
$
0.08
$
0.09
$
0.15
$
0.12
Adjusted EBITDA(1)
$
26,793
$
17,343
$
51,141
$
21,947
Adjusted EBITDA margin(1)
26.5
%
27.0
%
27.2
%
22.8
%
(1) Net income, as adjusted, Diluted EPS,
as adjusted, Adjusted EBITDA, and Adjusted EBITDA margin are
non-GAAP financial measures. See “Non-GAAP Financial Measures and
Key Operating Metrics” for additional information on non-GAAP
financial measures and a reconciliation to the most comparable GAAP
measures. Adjusted EBITDA margin is calculated by dividing Adjusted
EBITDA by net revenues.
- Net revenues for Q2 2021 increased by 57.6% to $101.1
million, as compared to Q2 2020. Net revenues were driven by higher
order volumes and, to a lesser extent, a higher average order value
during Q2 2021. Our active customer base grew by 79.2% to 1.6
million, as compared to Q2 2020.
- Gross margin for Q2 2021 increased by 280 basis points
to 73.3%, as compared to Q2 2020. This increase was primarily
driven by a sales mix shift away from lower margin products toward
higher margin scrubwear and a decrease in freight-in due to lower
utilization of more expensive air freight.
- Net income (loss) for Q2 2021 was a $40.5 million loss,
as compared to net income of $14.2 million for Q2 2020. Net loss
for Q2 2021 was primarily driven by $50.4 million of pre-tax
stock-based compensation expense incurred in connection with our
IPO.
- Net income, as adjusted for Q2 2021 of $14.3 million was
comparable to Q2 2020.
- Diluted EPS for Q2 2021 decreased to $(0.26), as
compared to Q2 2020. The decrease in Diluted EPS was primarily
driven by the decrease in net income described above and a higher
diluted share count.
- Diluted EPS, as adjusted for Q2 2021 decreased to $0.08,
as compared to Q2 2020. The decrease in Diluted EPS, as adjusted
was driven by a higher diluted share count.
- Adjusted EBITDA for Q2 2021 increased by 54.5% to $26.8
million, as compared to Q2 2020. The increase in Adjusted EBITDA
was primarily due to higher order volumes, and to a lesser extent,
higher average order values.
Key Metrics (Unaudited):
As of June 30,
2021
2020
(in thousands)
Active customers
1,622
905
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
Average order value
$
103
$
88
$
101
$
89
Balance Sheet Highlights
As of June 30, 2021, the Company had $164.0 million of cash and
cash equivalents, no outstanding borrowings under its existing
$50.0 million revolving credit facility and $3.2 million of issued
and outstanding letters of credit. Available borrowings under the
revolving credit facility were $46.8 million as of June 30,
2021.
Financial Outlook
2021 Outlook: Net Revenues: approximately $395
million
Long-term Outlook (2022 – 2024): Annual Gross Margin:
70%+ Annual Adjusted EBITDA Margin(2): 20%+
(2) We have not provided a quantitative
reconciliation of our Adjusted EBITDA margin outlook to a GAAP net
income margin outlook because we are unable, without making
unreasonable efforts, to project certain reconciling items. These
items include, but are not limited to, future stock-based
compensation expense, income taxes, expenses related to
non-ordinary course disputes, and transaction costs. These items
are inherently variable and uncertain and depend on various
factors, some of which are outside of our control or ability to
predict. For more information regarding our use of non-GAAP
financial measures, please see the section titled “Non-GAAP
Financial Measures and Key Operating Metrics.”
Conference Call Details
A conference call to discuss the Company’s Q2 2021 financial and
business results and outlook is scheduled for August 12, 2021, at
4:30 p.m. ET. To participate, please dial 1-866-211-4956 (US) or
1-873-415-0263 (International) and the conference ID 9988906. The
call is also accessible via webcast at ir.wearfigs.com. A recording
will be available shortly after the conclusion of the call. To
access the replay, please dial 1-800-585-8367 (US) or
1-416-621-4642 (International). An archive of the webcast will be
available on FIGS’ investor relations website.
Non-GAAP Financial Measures and Key Operating Metrics
In addition to the GAAP financial measures set forth in this
press release, the Company has included non-GAAP financial measures
within the meaning of Regulation G and Item 10(e) of Regulation
S-K. The Company has also included “Average Order Value” and
“Active Customers” which are key operational and business
metrics that are important to understanding Company performance. We
calculate “Average Order Value” as the sum of the total net
revenues in a given period divided by the total orders placed in
that period. Total orders are the summation of all completed
individual purchase transactions in a given period. We calculate
“Active Customers” as unique customer accounts that have
made at least one purchase in the preceding 12-month period.
We use “Net income, as adjusted”, “Diluted EPS, as
adjusted”, “Adjusted EBITDA” and “Adjusted EBITDA
Margin” to provide useful supplemental measures that assist in
evaluating our ability to generate earnings, provide consistency
and comparability with our past financial performance and
facilitate period-to-period comparisons of our core operating
results as well as the results of our peer companies. We calculate
“Net income, as adjusted” as net income adjusted to exclude
transaction costs, expenses related to non-ordinary course
disputes, stock-based compensation expense in connection with the
IPO and the income tax impact of these adjustments. We calculate
“Diluted EPS, as adjusted”, as net income, as adjusted
divided by diluted shares outstanding. We calculate “Adjusted
EBITDA” as net income adjusted to exclude: other income (loss),
net; gain/loss on disposal of assets; provision for income taxes;
depreciation and amortization expense; stock-based compensation
expense; transaction costs; and expenses related to non-ordinary
course disputes. We calculate “Adjusted EBITDA Margin” by
dividing Adjusted EBITDA by net revenues.
A reconciliation of GAAP to Non-GAAP financial information is
included under “Selected Financial Information.”
About FIGS
FIGS is a founder-led, direct-to-consumer healthcare apparel and
lifestyle brand that seeks to celebrate, empower and serve current
and future generations of healthcare professionals. We create
technically advanced apparel and products for healthcare
professionals that feature an unmatched combination of comfort,
durability, function, and style. We market and sell our products
directly through our digital platform to provide a seamless
experience for healthcare professionals. For more information,
visit www.wearfigs.com.
Forward-Looking Statements
This press release contains various forward-looking statements
about the Company within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended (the “Act”) that are
based on current management expectations, and which involve
substantial risks and uncertainties that could cause actual results
to differ materially from the results expressed in, or implied by,
such forward-looking statements. All statements contained in this
press release that do not relate to matters of historical fact
should be considered forward-looking. These forward-looking
statements generally are identified by the words “anticipate”,
“believe”, “contemplate”, “continue”, “could”, “estimate”,
“expect”, “forecast”, “future”, “intend”, “may”, “might”,
“opportunity”, "outlook", “plan”, “possible”, “potential”,
“predict”, “project,” “should”, “strategy”, “strive”, “target”,
“will”, or “would”, the negative of these words or other similar
terms or expressions. The absence of these words does not mean that
a statement is not forward-looking. These forward-looking
statements address various matters including the objectives of
management, the execution of the Company’s mission, the Company’s
assessment of the sustained momentum in its business, the Company’s
continued focus on driving sustainable growth, the Company’s
outlook and expectations as to net revenues for the full year ended
December 31, 2021, and the Company’s long term outlook as to annual
Gross Margin and annual Adjusted EBITDA Margin, all of which
reflect the Company’s expectations based upon currently available
information and data. Because such statements are based on
expectations as to future financial and operating results and are
not statements of fact, actual results may differ materially from
those projected and you are cautioned not to place undue reliance
on these forward-looking statements. The following important
factors and uncertainties, among others, could cause actual results
to differ materially from those described in these forward-looking
statements: the impact of COVID-19 on the Company’s operations; the
Company’s ability to maintain its recent rapid growth; the
Company’s ability to maintain profitability; the Company’s ability
to maintain the value and reputation of its brand; the Company’s
ability to attract new customers, retain existing customers, and to
maintain or increase sales to those customers; the success of the
Company’s marketing efforts; the Company’s ability to maintain a
strong community of engaged customers and Ambassadors; negative
publicity related to the Company’s marketing efforts or use of
social media; the Company’s ability to successfully develop and
introduce new, innovative and updated products; the competitiveness
of the market for healthcare apparel; the Company’s ability to
maintain its key employees; the Company’s ability to attract and
retain highly skilled personnel and senior management; risks
associated with expansion into, and conducting business in,
international markets; changes in, or disruptions to, the Company’s
shipping arrangements; the Company’s ability to accurately forecast
customer demand, manage its inventory and plan for future expenses;
the Company’s reliance on a limited number of third-party
suppliers; the fluctuating costs of raw materials; the Company’s
failure to protect its intellectual property rights; the fact that
the operations of many of the Company’s suppliers and vendors are
subject to additional risks that are beyond its control; and other
risks, uncertainties and factors discussed in the “Risk Factors”
section of the Company’s Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission (“SEC”) on August 12, 2021
and in the Company’s subsequent filings with the SEC. The
forward-looking statements in this press release speak only as of
the time made and the Company does not undertake to update or
revise them to reflect future events or circumstances.
Selected Financial Information
FIGS, INC.
BALANCE SHEETS
(In thousands, except share
and per share data)
As of
June 30, 2021
December 31, 2020
Assets
(Unaudited)
Current assets
Cash and cash equivalents
$
163,968
$
58,133
Accounts receivable
3,934
5,780
Due from related party
4,875
—
Inventory, net
62,374
49,735
Prepaid expenses and other current
assets
8,339
6,665
Total current assets
243,490
120,313
Non-current assets
Property and equipment, net
6,908
6,529
Deferred tax assets
3,354
6,507
Other assets
502
506
Total non-current assets
10,764
13,542
Total assets
$
254,254
$
133,855
Liabilities and stockholders’
equity
Current liabilities
Accounts payable
$
16,472
$
11,965
Accrued expenses
15,315
6,682
Accrued compensation and benefits
4,144
4,214
Sales tax payable
3,912
3,076
Gift card liability
3,369
3,019
Deferred revenue
679
1,781
Returns reserve
2,128
1,677
Income tax payable
910
105
Total current liabilities
46,929
32,519
Non-current liabilities
Deferred rent and lease incentive
3,610
3,659
Total liabilities
50,539
36,178
Commitments and contingencies
Stockholders’ equity
Common stock — par value $0.0001 per
share, zero and 207,000,000 shares authorized as of June 30, 2021
and December 31, 2020, respectively; zero and 154,649,160 shares
issued and outstanding as of June 30, 2021 and December 31, 2020,
respectively
—
15
Class A Common stock — par value $0.0001
per share, 1,000,000,000 and zero shares authorized as of June 30,
2021 and December 31, 2020, respectively; 147,633,534 and zero
shares issued and outstanding as of June 30, 2021 and December 31,
2020, respectively
15
—
Class B Common stock — par value $0.0001
per share, 150,000,000 and zero shares authorized as of June 30,
2021 and December 31, 2020, respectively; 13,264,059 and zero
shares issued and outstanding as of June 30, 2021 and December 31,
2020, respectively
1
—
Preferred stock — par value $0.0001 per
share, 100,000,000 and zero shares authorized as of June 30, 2021
and December 31, 2020, respectively; zero shares issued and
outstanding as of June 30, 2021 and December 31, 2020
—
—
Additional paid-in capital
205,318
70,175
Retained earnings (accumulated
deficit)
(1,619
)
27,487
Total stockholders’ equity
203,715
97,677
Total liabilities and stockholders’
equity
$
254,254
$
133,855
FIGS, INC.
STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(In thousands, except share
and per share data)
(Unaudited)
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
Net revenues
$
101,117
$
64,143
$
188,196
$
96,110
Cost of goods sold
26,964
18,923
51,683
26,578
Gross profit
74,153
45,220
136,513
69,532
Operating expenses
Selling
19,222
12,905
36,337
19,644
Marketing
15,488
8,805
26,327
16,142
General and administrative
71,504
6,950
89,850
13,150
Total operating expenses
106,214
28,660
152,514
48,936
Net income (loss) from operations
(32,061
)
16,560
(16,001
)
20,596
Other income (loss), net
Interest income (expense)
(31
)
19
(67
)
117
Other expense
—
(1
)
(2
)
(1
)
Total other income (loss), net
(31
)
18
(69
)
116
Net income (loss) before provision for
income taxes
(32,092
)
16,578
(16,070
)
20,712
Provision for income taxes
8,454
2,403
13,036
2,403
Net income (loss) and comprehensive
income (loss)
$
(40,546
)
$
14,175
$
(29,106
)
$
18,309
Earnings (loss) attributable to Class A
and Class B common stockholders
Basic earnings (loss) per share
$
(0.26
)
$
0.09
$
(0.19
)
$
0.12
Diluted earnings (loss) per share
$
(0.26
)
$
0.09
$
(0.19
)
$
0.12
Weighted-average shares
outstanding—basic
156,867,484
153,052,983
155,725,959
153,052,983
Weighted-average shares
outstanding—diluted
156,867,484
153,680,642
155,725,959
153,661,856
FIGS, INC.
STATEMENTS OF CASH
FLOWS
(In thousands)
(Unaudited)
Six months ended June
30,
2021
2020
Cash flows from operating
activities:
Net income (loss)
$
(29,106
)
$
18,309
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
666
398
Provision (benefit) for deferred income
taxes
3,153
(688
)
Stock-based compensation
61,027
286
Changes in operating assets and
liabilities:
Accounts receivable
1,846
(505
)
Due from related party
(4,875
)
—
Inventory
(12,639
)
(1,611
)
Prepaid expenses and other current
assets
(1,674
)
(4,314
)
Other assets
(6
)
61
Accounts payable
4,575
(402
)
Accrued expenses
8,553
5,912
Deferred revenue
(1,102
)
1,597
Accrued compensation and benefits
(70
)
(237
)
Returns reserve
451
804
Sales tax payable
836
638
Income tax payable
805
3,090
Gift card liability
350
498
Deferred rent and lease incentive
(49
)
473
Net cash provided by operating
activities
32,741
24,309
Cash flows from investing
activities:
Purchases of property and equipment
(1,023
)
(1,080
)
Net cash used in investing activities
(1,023
)
(1,080
)
Cash flows from financing
activities:
Proceeds from issuance of Class A Common
Stock in initial public offering, net of underwriting discounts
95,881
—
Payments of initial public offering
issuance costs, net of reimbursements
(780
)
—
Proceeds from stock option exercises
572
—
Tax payments related to net share
settlements on restricted stock units
(21,556
)
—
Net cash provided by financing
activities
74,117
—
Net increase in cash and cash
equivalents
105,835
23,229
Cash and cash equivalents, beginning of
period
58,133
38,353
Cash and cash equivalents, end of
period
$
163,968
$
61,582
Supplemental disclosures:
Property and equipment included in
accounts payable and accrued expenses
$
247
$
—
Deferred offering costs recorded in
stockholders' equity upon initial public offering
$
780
$
—
FIGS, INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Unaudited)
The following table reflects a reconciliation of Adjusted EBITDA
to net income (loss), the most directly comparable financial
measure prepared in accordance with GAAP:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands)
Net income (loss)
$
(40,546
)
$
14,175
$
(29,106
)
$
18,309
Add (deduct):
Other income (loss), net
31
(18
)
69
(116
)
Provision for income taxes
8,454
2,403
13,036
2,403
Depreciation and amortization
expense(1)
344
181
656
399
Stock-based compensation and related
expense(2)
56,716
237
61,731
287
Transaction costs
(186
)
—
339
—
Expenses related to non-ordinary course
disputes(3)
1,980
365
4,416
665
Adjusted EBITDA
$
26,793
$
17,343
$
51,141
$
21,947
Adjusted EBITDA Margin
26.5
%
27.0
%
27.2
%
22.8
%
The following table presents a reconciliation of Diluted EPS, as
adjusted and Net income, as adjusted to Net income (loss), the most
directly comparable financial measure calculated in accordance with
GAAP:
Three months ended June
30,
Six months ended June
30,
2021
2020
2021
2020
(in thousands, except per
share data)
Net income (loss)
$
(40,546
)
$
14,175
$
(29,106
)
$
18,309
Add (deduct):
Transaction costs
(186
)
—
339
—
Expenses related to non-ordinary course
disputes(3)
1,980
365
4,416
665
Stock-based compensation expense in
connection with the IPO
50,384
—
50,384
—
Income tax impacts of items above
2,710
(53
)
1,863
(77
)
Net income, as adjusted
$
14,342
$
14,487
$
27,896
$
18,897
Diluted EPS, as adjusted
$
0.08
$
0.09
$
0.15
$
0.12
Weighted-average shares used to compute
Diluted EPS, as adjusted(4)
190,758,131
153,680,642
185,408,438
153,661,856
(1) Excludes amortization of debt issuance
costs included in “Other income (loss), net.”
(2) Includes stock-based compensation
expense and payroll taxes related to equity award activity.
(3) Represents legal fees incurred in
connection with the litigation claims described in the section
titled “Legal Proceedings” appearing on our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2021.
(4) We adjust the weighted-average number
of shares outstanding for the dilutive effect of potential common
equivalent shares in each period presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210812005830/en/
IR Contact information: Jeffrey Lawrence, CFO
IR@wearfigs.com Jean Fontana, ICR, Inc. IR@wearfigs.com
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