- Grew Q4 2021 revenue 78% and North American system-wide sales
76%, compared to Q4 2020
- Grew full year 2021 revenue 45% and North American system-wide
sales 60%, compared to full year 2020
- Sold 846 franchise licenses and opened 282 new studios in
2021
- For full year 2022, Company expects 81% growth in new studio
openings, 41% growth in system-wide sales, 33% growth in revenue
and 153% growth in Adjusted EBITDA at the midpoint of its guidance
ranges
Xponential Fitness, Inc. (NYSE: XPOF) (“Xponential” or the
“Company”), the largest global franchisor of boutique fitness
brands, today reported financial results for the fourth quarter and
full year ended December 31, 2021. All financial figures included
in this release refer to global numbers, unless otherwise noted.
Definitions for the non-GAAP measures and a reconciliation to the
corresponding GAAP measurements are included in the tables that
accompany this release.
Financial Highlights: Q4 2021 Compared to Q4 2020
- Grew revenue 78% to $49.4 million.
- Increased North American system-wide sales1 by 76% to $213.0
million.
- Reported North American same store sales2 growth of 53%,
compared to a decline of 35%.
- Reported North American quarterly run-rate average unit volume
(AUV)3 of $446,000, compared to $286,000.
- Posted net loss of $29.8 million, or $2.45 per share, on a
share count of 22.6 million shares of Class A Common Stock,
compared to a net loss of $5.1 million.4
- Posted Adjusted Net Loss of $6.1 million, or $0.21 per share,
compared to an Adjusted Net Loss of $5.1 million.4
- Reported Adjusted EBITDA5 of $8.6 million, compared to $3.3
million.
Financial Highlights: FY 2021 Compared to FY 2020
- Grew revenue 45% to $155.1 million.
- Increased North American system-wide sales1 by 60% to $708.6
million.
- Reported North American same store sales2 growth of 41%,
compared to a decline of 34%.
- Posted net loss of $51.4 million, or $2.85 per share, on a
share count of 22.4 million shares of Class A Common Stock,
compared to a net loss of $13.6 million.4
- Posted Adjusted Net Loss of $24.4 million, or $0.80 per share,
compared to an Adjusted Net Loss of $24.6 million.4
- Reported Adjusted EBITDA5 of $27.3 million, compared to $9.8
million.
“2021 was a milestone year for Xponential Fitness,” said Anthony
Geisler, CEO of Xponential Fitness, Inc. “In addition to
successfully completing our initial public offering in July, we
reported record financial results. Our strong performance was
driven largely by consistent growth in our membership base.
Actively paying members and visitation rates grew by approximately
70% and 50%, respectively, in the fourth quarter compared to the
prior year, as boutique fitness customers returned to the in-person
fitness classes offered by our exceptional portfolio of ten
complementary brands.”
Mr. Geisler continued, “Overall, in 2021, we were able to
demonstrate the resilience of our business, and the momentum
experienced in the fourth quarter places Xponential in a strong
position in 2022. Our revenue and Adjusted EBITDA are significantly
higher today than they were prior to the COVID-19 pandemic, up 20%
and 66%, respectively, in 2021 vs. 2019. We enter 2022 with the
largest studio count in our Company’s history and we anticipate
opening over 500 new studios this year. We look forward to
continuing to drive revenue growth and margin expansion as we scale
our platform in 2022.”
Results for the Fourth Quarter Ended December 31,
2021
Please note that all information discussed herein includes the
contribution of BFT, Xponential’s tenth brand, from its acquisition
in October 2021 onwards.
For the fourth quarter 2021, total revenue increased $21.6
million, or 78%, to $49.4 million, up from $27.8 million in the
prior-year period. This increase included a corresponding North
American same store sales increase of 53%.
Net loss totaled $29.8 million, or a loss of $2.45 per share,
compared to a loss of $5.1 million in the prior-year period. The
increase was the result of $2.8 million of higher overall
profitability, offset by a $22.5 million increase in non-cash
contingent consideration primarily related to the Rumble
acquisition, and a $5.1 million increase in non-cash equity-based
compensation expense. Please see the table at the back of the
release for a calculation of the basic and diluted loss per share
for the quarter ended December 31, 2021.
Consistent with previous periods, the Rumble acquisition
non-cash contingent consideration earn-out liability is being
marked-to-market based on Xponential’s share price. With the share
price increasing over 60% between September and December 2021, a
corresponding increased earn-out liability was recorded. As part of
this adjustment, Xponential’s total share count does not increase
until the shares vest, which occurs at a weighted average share
price of $61.90.
Adjusted Net Loss for the fourth quarter 2021, which excludes
the $22.4 million non-cash contingent consideration related
primarily to the Rumble acquisition and $1.3 million related to the
re-measurement of the Company’s tax receivable agreement, was $6.1
million, or $0.21 per share, on a share count of 22.6 million
shares.
Adjusted EBITDA, which is defined as net income before interest,
taxes, depreciation and amortization, adjusted for equity-based
compensation, acquisition & transaction expenses, management
fees, integration and related expenses, litigation expenses,
employee retention credit and tax receivable agreement
re-measurement, increased to $8.6 million, up from $3.3 million in
the prior-year period.
Results for the Full Year Ended December 31, 2021
Consistent with the fourth quarter 2021, all information
discussed below includes the contribution of BFT, Xponential’s
tenth brand, from its acquisition in October 2021 onwards.
For the full year 2021, total revenue increased $48.5 million,
or 45%, to $155.1 million, up from $106.6 million in 2020. This
increase in revenue included a corresponding North American same
store sales increase of 41% year-over-year.
Net loss totaled $51.4 million, or a loss of $2.85 per share,
compared to a loss of $13.6 million. The increase was the result of
$6.8 million of higher overall profitability, a $36.6 million
increase in non-cash contingent consideration related to the
Company’s Rumble acquisition, and a $7.9 million increase in
non-cash equity-based compensation expense.
Adjusted Net Loss for the full year 2021, which excludes the
$25.6 million non-cash contingent consideration related primarily
to the Rumble acquisition and $1.4 million related to the
re-measurement of the Company’s tax receivable agreement, was $24.4
million, or $0.80 per share, on a share count of 22.4 million
shares.
Adjusted EBITDA as defined above increased to $27.3 million, up
from $9.8 million in the prior year.
Liquidity and Capital Resources
As of December 31, 2021, the Company had approximately $21.3
million of cash and cash equivalents and $130.9 million in total
debt. Net cash provided by operating activities was $14.5 million
for the full year ended December 31, 2021.
2022 Outlook
Full-year 2022 outlook is as follows:
- New studio openings in the range of 500 to 520, or an increase
of 81% at the midpoint as compared to full year 2021;
- North American system-wide sales in the range of $995.0 million
to $1.005 billion, or an increase of 41% at the midpoint as
compared to full year 2021;
- Revenue in the range of $201.0 million to $211.0 million, or an
increase of 33% at the midpoint as compared to full year 2021;
and
- Adjusted EBITDA in the range of $67.0 million to $71.0 million,
or an increase of 153% at the midpoint as compared to full year
2021.
Additional key assumptions for full year 2022 include:
- Tax rate of approximately 5%;
- Share count of 22.6 million shares of Class A Common Stock for
the GAAP EPS and Adjusted EPS calculations. A full explanation of
the Company’s share count calculation and associated EPS and
Adjusted EPS calculations can be found in the tables at the back of
this release; and
- $3.25 million in quarterly dividends paid related to the $200
million Convertible Preferred Stock issued in connection with the
IPO.
Fourth Quarter and Full Year 2021 Conference Call
The Company will host a conference call today at 1:30 p.m.
Pacific Time / 4:30 p.m. Eastern Time to discuss its fourth quarter
and full year 2021 financial results. Participants may join the
conference call by dialing 1-877-407-9716 (United States) or
1-201-493-6779 (International).
A live webcast of the conference call will also be available on
the Company’s Investor Relations site at
https://investor.xponential.com/. For those unable to participate
in the conference call, a telephonic replay of the call will be
available shortly after the completion of the call, until 11:59
p.m. ET on Thursday, March 17, 2022, by dialing 1-844-512-2921
(United States) or 1-412-317-6671 (International) and entering the
replay pin number: 13726080.
About Xponential Fitness, Inc.
Xponential Fitness, Inc. (NYSE: XPOF) is the largest global
franchisor of boutique fitness brands. Through its mission to make
boutique fitness accessible to everyone, the Company operates a
diversified platform of ten brands spanning across verticals
including Pilates, indoor cycling, barre, stretching, rowing,
dancing, boxing, running, functional training and yoga. In
partnership with its franchisees, Xponential offers energetic,
accessible, and personalized workout experiences led by highly
qualified instructors in studio locations across 48 U.S. states and
Canada, and through master franchise or international expansion
agreements in 10 additional countries. Xponential Fitness'
portfolio of brands includes Club Pilates, the nation's largest
Pilates brand; CycleBar, the nation's largest indoor cycling brand;
StretchLab, a concept offering one-on-one and group stretching
services; Row House, a high-energy, low-impact indoor rowing
workout; AKT, a dance-based cardio workout combining toning,
interval and circuit training; YogaSix, the largest franchised yoga
brand; Pure Barre, a total body workout that uses the ballet barre
to perform small isometric movements; STRIDE, a treadmill-based
cardio and strength training concept; Rumble, a boxing-inspired
full-body workout; and BFT, a functional training and
strength-based program. For more information, please visit the
Company’s website at xponential.com.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP,
we believe non-GAAP measures are useful in evaluating our operating
performance. We use certain non-GAAP financial information, such as
EBITDA, Adjusted EBITDA, Adjusted Net Income or Loss, and Adjusted
Net Income or Loss per share, which adjust for acquisition-related
expenses, certain non-cash charges, and other unusual non-operating
or non-recurring items that we believe are not representative of
our core business or future operating performance, to evaluate our
ongoing operations and for internal planning and forecasting
purposes. We believe that non-GAAP financial information, when
taken collectively with comparable GAAP financial measures, is
helpful to investors because it provides consistency and
comparability with past financial performance, and provides
meaningful supplemental information regarding our performance by
excluding certain items that may not be indicative of our business,
results of operations or outlook. However, non-GAAP financial
information is presented for supplemental informational purposes
only, has limitations as an analytical tool, and should not be
considered in isolation or as a substitute for financial
information presented in accordance with GAAP. In addition, other
companies, including companies in our industry, may calculate
similarly titled non-GAAP measures differently or may use other
measures to evaluate their performance, all of which could reduce
the usefulness of our non-GAAP financial measure as tools for
comparison. We seek to compensate such limitations by providing a
detailed reconciliation for the non-GAAP financial measures to the
most directly comparable financial measures stated in accordance
with GAAP. Investors are encouraged to review the related GAAP
financial measures and the reconciliation of the non-GAAP financial
measures to their most directly comparable GAAP financial measures
and not rely on any single financial measure to evaluate our
business. For a reconciliation of non-GAAP to GAAP measures
discussed in this release, please see the tables at the end of this
press release.
Forward-Looking Statements
This press release contains forward-looking statements that are
based on current expectations, estimates, forecasts and projections
of future performance based on management's judgment, beliefs,
current trends, and anticipated product performance. These
forward-looking statements include, without limitation, statements
relating to expansion of market share; projected number of new
studio openings; anticipated industry trends; projected financial
and performance information such as system-wide sales; annual
revenue, Adjusted EBITDA and other statements under the section
“2022 Outlook”; and ability to execute our business strategies.
Forward-looking statements involve risks and uncertainties that may
cause actual results to differ materially from those contained in
the forward-looking statements. These factors include, but are not
limited to, the impact of the COVID-19 pandemic on our business and
franchisees; our relationships with master franchisees and
franchisees; difficulties and challenges in opening studios by
franchisees; the ability of franchisees to generate sufficient
revenues; risks relating to expansion into international markets;
loss of reputation and brand awareness; material weakness in our
internal control over financial reporting; and other risks as
described in our SEC filings, including our Annual Report on Form
10-K for the full year ended December 31, 2021 to be filed by
Xponential with the SEC and other periodic reports filed with the
SEC. Other unknown or unpredictable factors or underlying
assumptions subsequently proving to be incorrect could cause actual
results to differ materially from those in the forward-looking
statements. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance, or achievements.
You should not place undue reliance on these forward-looking
statements. All information provided in this press release is as of
today's date, unless otherwise stated, and Xponential undertakes no
duty to update such information, except as required under
applicable law.
Xponential Fitness, Inc. Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31,
2021
2020
Assets Current Assets: Cash, cash equivalents and restricted
cash
$
21,320
$
11,299
Accounts receivable, net
11,702
5,196
Inventories
6,928
6,161
Prepaid expenses and other current assets
5,271
5,480
Deferred costs, current portion
3,712
3,281
Notes receivable from franchisees, net
2,293
1,288
Total current assets
51,226
32,705
Property and equipment, net
12,773
13,694
Goodwill
169,073
139,680
Intangible assets, net
136,863
98,124
Deferred costs, net of current portion
42,015
35,445
Notes receivable from franchisees, net of current portion
3,041
2,576
Other assets
553
614
Total assets
$
415,544
$
322,838
Liabilities, redeemable convertible preferred stock and equity
(deficit) Current Liabilities: Accounts payable
$
14,905
$
18,339
Accrued expenses
21,045
13,764
Deferred revenue, current portion
22,747
14,247
Notes payable
983
970
Current portion of long-term debt
2,960
5,795
Other current liabilities
3,253
1,804
Total current liabilities
65,893
54,919
Deferred revenue, net of current portion
95,691
74,361
Contingent consideration from acquisitions
54,881
8,399
Long-term debt, net of current portion, discount and issuance costs
127,983
176,002
Other liabilities
4,675
4,408
Total liabilities
349,123
318,089
Commitments and contingencies Redeemable convertible preferred
stock, $0.0001 par value, 400,000 shares authorized, 200,000 shares
issued and outstanding as of December 31, 2021, no shares
authorized, issued and outstanding as of December 31, 2020
276,890
—
Undesignated preferred stock, $0.0001 par value, 4,600,000
shares authorized, none issued and outstanding as of December 31,
2021, no shares authorized, issued and outstanding as of December
31, 2020
—
—
Class A common stock, $0.0001 par value, 500,000,000 shares
authorized, 23,898,042 shares issued and outstanding as of December
31, 2021, no shares authorized, issued and outstanding as of
December 31, 2020
2
—
Class B common stock, $0.0001 par value, 500,000,000 shares
authorized, 22,968,674 shares issued and outstanding as of December
31, 2021, no shares authorized, issued and outstanding as of
December 31, 2020
2
—
Additional paid-in capital
—
—
Member’s contribution
—
113,697
Receivable from Member/shareholder
(10,600
)
(1,456
)
Accumulated deficit
(643,833
)
(107,492
)
Total stockholders'/member’s equity (deficit) attributable to
Xponential Fitness, Inc.
(654,429
)
4,749
Noncontrolling interest
443,960
—
Total stockholders'/member’s equity (deficit)
(210,469
)
4,749
Total liabilities, redeemable convertible preferred stock and
equity (deficit)
$
415,544
$
322,838
Xponential Fitness, Inc. Consolidated Statements of
Operations (in thousands, except share and per share
amounts) Three Months Ended December 31, Years Ended
December 31,
2021
2020
2021
2020
Revenue, net: Franchise revenue
$
22,955
$
12,305
$
74,459
$
48,056
Equipment revenue
7,012
3,903
22,583
20,642
Merchandise revenue
6,520
4,426
20,140
16,648
Franchise marketing fund revenue
4,120
2,224
13,623
7,448
Other service revenue
8,765
4,913
24,274
13,798
Total revenue, net
49,372
27,771
155,079
106,592
Operating costs and expenses: Costs of product revenue
9,291
5,442
28,550
25,727
Costs of franchise and service revenue
4,101
1,893
12,716
8,392
Selling, general and administrative expenses
32,732
16,978
94,798
60,917
Depreciation and amortization
3,334
1,998
10,172
7,651
Marketing fund expense
3,740
2,074
13,044
7,101
Acquisition and transaction expenses (income)
23,091
(50
)
26,618
(10,990
)
Total operating costs and expenses
76,289
28,335
185,898
98,798
Operating income (loss)
(26,917
)
(564
)
(30,819
)
7,794
Other (income) expense: Interest income
(368
)
(85
)
(1,164
)
(345
)
Interest expense
2,840
4,500
24,709
21,410
Gain on debt extinguishment
—
—
(3,707
)
—
Total other expense
2,472
4,415
19,838
21,065
Loss before income taxes
(29,389
)
(4,979
)
(50,657
)
(13,271
)
Income taxes
396
77
783
369
Net loss
(29,785
)
(5,056
)
(51,440
)
(13,640
)
Less: Net loss attributable to redeemable noncontrolling interests
(15,012
)
—
(32,611
)
—
Net loss attributable to Xponential Fitness, Inc.
$
(14,773
)
$
(5,056
)
$
(18,829
)
$
(13,640
)
Earnings (loss) per share of Class A common stock: Basic
$
(2.45
)
N/A
$
(2.85
)
N/A
Diluted
$
(2.45
)
N/A
$
(2.85
)
N/A
Weighted average shares of Class A common stock outstanding: Basic
22,598,011
N/A
22,402,703
N/A
Diluted
22,598,011
N/A
22,402,703
N/A
Xponential Fitness, Inc. Consolidated Statements of Cash
Flows (amounts in thousands) Years Ended December
31,
2021
2020
Cash flows from operating activities: Net loss
$
(51,440
)
$
(13,640
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
10,172
7,651
Amortization and write off of debt issuance cost
5,749
3,096
Amortization and write off of discount on long-term debt
2,704
—
Change in contingent consideration from acquisitions
25,640
(10,990
)
Bad debt expense
410
2,766
Equity-based compensation
9,699
1,751
Non-cash interest
583
1,321
Gain on debt extinguishment
(3,707
)
—
Loss from disposal of assets
483
68
Impairment of long-lived assets
781
—
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable
(6,608
)
2,977
Inventories
(768
)
(1,392
)
Prepaid expenses and other current assets
(4,220
)
(2,904
)
Deferred costs
(7,122
)
(1,204
)
Notes receivable
137
210
Accounts payable
(3,013
)
1,709
Accrued expenses
3,596
1,914
Related party payable
(1
)
(28
)
Other current liabilities
1,449
(955
)
Deferred revenue
30,011
7,005
Other assets
1
(196
)
Other liabilities
(85
)
113
Net cash provided by (used in) operating activities
14,451
(728
)
Cash flows from investing activities: Purchases of property and
equipment
(3,638
)
(1,880
)
Purchase of studios
(450
)
(1,150
)
Proceeds from sale of assets
433
58
Purchase of intangible assets
(1,220
)
(1,010
)
Notes receivable issued
(2,258
)
(619
)
Notes receivable payment received
820
—
Acquisition of businesses
(44,322
)
—
Net cash used in investing activities
(50,635
)
(4,601
)
Cash flows from financing activities: Borrowings from line of
credit
—
10,000
Payments on line of credit
—
(18,000
)
Borrowings from long-term debt
255,980
188,665
Payments on long-term debt
(310,600
)
(149,219
)
Debt issuance costs
(996
)
(5,158
)
Proceeds from the issuance of Class A common stock, net of
underwriting costs
122,016
—
Payments of costs related to IPO
(3,082
)
—
Payments to purchase 750,000 LLC units/Class B Shares
(9,000
)
—
Proceeds from issuance of redeemable convertible preferred stock,
net of offering costs
198,396
—
Payment to purchase all of the shares of LCAT from LCAT
shareholders
(144,485
)
—
Payment of H&W Cash Merger Consideration
(11,720
)
—
Payments to acquire the Preferred Units and LLC Units
(20,493
)
—
Exchange of LLC units for Class B shares
2
—
Payment of preferred stock dividend and deemed dividend
(8,992
)
—
Payment of contingent consideration
(12,154
)
(3,250
)
Loans from related party
—
—
Payments on loans from related party
(85
)
(111
)
Member contributions
562
27,286
Distributions to Member
(10,600
)
(73,203
)
Receipts from (advances to) Member, net
1,456
30,279
Receipts from (advances to) affiliates, net
—
—
Net cash provided by financing activities
46,205
7,289
Increase in cash, cash equivalents and restricted cash
10,021
1,960
Cash, cash equivalents and restricted cash, beginning of year
11,299
9,339
Cash, cash equivalents and restricted cash, end of year
$
21,320
$
11,299
Xponential Fitness, Inc. Net
Loss to GAAP EPS Per Share (in thousands, except share and per
share amounts)
Three Months Ended December 31, Years Ended December
31,
2021
2020
2021
2020
(in thousands, except share and per share amounts) Net loss
$
(29,785
)
$
(5,056
)
$
(51,440
)
$
(13,640
)
Less: net loss attributable to non-controlling interests
56,214
—
78,417
—
Less: dividends on preferred shares
(3,250
)
—
(5,742
)
—
Less: deemed dividends
(78,494
)
—
(84,994
)
—
Net loss attributable to Xponential Fitness, Inc.
$
(55,315
)
$
(5,056
)
$
(63,759
)
$
(13,640
)
Denominator:
N/A
N/A
Weighted-average shares of Class A common stock outstanding
22,598,011
N/A
22,402,703
N/A
Net loss per share
$
(2.45
)
N/A
$
(2.85
)
N/A
Xponential Fitness, Inc.Reconciliations of GAAP to Non-GAAP
Measures(in thousands, except share and per share amounts)
Three Months Ended December 31, Years Ended December
31,
2021
2020
2021
2020
(in thousands) Net loss
$
(29,785
)
$
(5,056
)
$
(51,440
)
$
(13,640
)
Interest expense, net
2,472
4,415
23,545
21,065
Income taxes
396
77
783
369
Depreciation and amortization
3,334
1,998
10,172
7,651
EBITDA
(23,583
)
1,434
(16,940
)
15,445
Equity-based compensation
5,498
424
9,699
1,751
Acquisition and transaction expenses (income)
23,091
(50
)
26,618
(10,990
)
Management fees and expenses
—
180
462
795
Integration and related expenses
—
140
—
386
Litigation expenses
4,605
1,174
8,312
2,420
Employee retention credit
(2,269
)
—
(2,269
)
—
TRA remeasurement
1,261
—
1,441
—
Adjusted EBITDA
$
8,603
$
3,302
$
27,323
$
9,807
Three Months Ended December 31, Years Ended December
31,
2021
2020
2021
2020
(in thousands, except share and per share amounts) Net loss
$
(29,785
)
$
(5,056
)
$
(51,440
)
$
(13,640
)
Change in fair value of contingent consideration
22,420
(50
)
25,640
(10,990
)
TRA remeasurement
1,261
—
1,441
—
Adjusted net loss
$
(6,104
)
$
(5,106
)
$
(24,359
)
$
(24,630
)
Adjusted net loss attributable to noncontrolling interest
$
(3,077
)
N/A
$
(12,362
)
N/A
Adjusted net loss attributable to Xponential Fitness, Inc.
$
(3,027
)
N/A
$
(11,997
)
N/A
Adjusted net loss per share
$
(0.21
)
N/A
$
(0.80
)
N/A
Weighted average shares of Class A common stock outstanding
22,598,011
N/A
22,402,703
N/A
Adjusted net loss attributable to Xponential Fitness, Inc.
$
(3,027
)
N/A
$
(11,997
)
N/A
Dividends on preferred shares
(1,612
)
N/A
(2,828
)
N/A
Deemed dividend
—
N/A
(3,201
)
N/A
EPS numerator
$
(4,639
)
N/A
$
(18,026
)
N/A
Note: The above Adjusted Net Loss per share is computed
by dividing the net loss attributable to holders of Class A common
stock by the weighted average shares of Class A common stock
outstanding during the period. Total share count does not include
potential future shares vested upon achieving certain earn-out
thresholds. Net income, however, continues to take into account the
non-cash contingent liability due to Rumble.
Footnotes
1System-wide sales represent gross sales by all studios.
System-wide sales includes sales by franchisees that are not
revenue realized by us in accordance with GAAP. While we do not
record sales by franchisees as revenue, and such sales are not
included in our consolidated financial statements, this operating
metric relates to our revenue because we receive approximately 7%
and 2% of the sales by franchisees as royalty revenue and marketing
fund revenue, respectively. We believe that this operating measure
aids in understanding how we derive our royalty revenue and
marketing fund revenue and is important in evaluating our
performance. System-wide sales growth is driven by new studio
openings and increases in same store sales. Management reviews
system-wide sales monthly, which enables us to assess changes in
our franchise revenue, overall studio performance, the health of
our brands and the strength of our market position relative to
competitors.
2 Same store sales refer to period-over-period sales comparisons
for the base of studios. We define the same store sales base to
include studios in North America that have been open for at least
13 calendar months as of the measurement date. Any transfer of
ownership of a studio does not affect this metric. We measure same
store sales based solely upon monthly sales as reported by
franchisees. This measure highlights the performance of existing
studios, while excluding the impact of new studio openings.
Management reviews same store sales to assess the health of the
franchised studios.
3AUV is calculated by dividing sales during the applicable
period for all studios being measured by the number of studios
being measured. Quarterly run-rate AUV is calculated as the
quarterly AUV multiplied by four, for studios that are at least 6
months old at the beginning of the respective quarter. Monthly
run-rate AUV is calculated as the monthly AUV multiplied by twelve,
for studios that are at least 6 months old at the beginning of the
respective month. AUV growth is primarily driven by changes in same
store sales and is also influenced by new studio openings.
Management reviews AUV to assess studio economics.
4No comparison of Net Loss per share, and Adjusted Net Loss per
share to Q4 2020 is provided as such comparison is not meaningful
given the Company’s pre-IPO capital structure.
5We define adjusted EBITDA as EBITDA (net income/loss before
interest, taxes, depreciation and amortization), adjusted for the
impact of certain non-cash and other items that we do not consider
in our evaluation of ongoing operating performance. These items
include equity-based compensation, acquisition and transaction
expenses (income) (including change in contingent consideration),
management fees and expenses (that were discontinued after July
2021), integration and related expenses, litigation expenses
(consisting of legal and related fees for specific proceedings that
arise outside of the ordinary course of our business), employee
retention credit and TRA remeasurement that we do not believe
reflect our underlying business performance and affect
comparability. EBITDA and adjusted EBITDA are also frequently used
by analysts, investors and other interested parties to evaluate
companies in our industry. We believe that adjusted EBITDA is an
appropriate measure of operating performance because it eliminates
the impact of expenses that we do not believe reflect our
underlying business performance. We believe that adjusted EBITDA,
viewed in addition to, and not in lieu of, our reported GAAP
results, provides useful information to investors regarding our
performance and overall results of operations because it eliminates
the impact of other items that we believe reduce the comparability
of our underlying core business performance from period to period
and is therefore useful to our investors in comparing the core
performance of our business from period to period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220302006232/en/
Kimberly Esterkin Addo Investor Relations
investor@xponential.com (310) 829-5400
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