- Company expects to meet or exceed the high-end of full year
2022 outlook
Xponential Fitness, Inc. (NYSE: XPOF), the largest global
franchisor of boutique fitness brands, today provided 2022
operating highlights and announced the Company’s participation at
the ICR 2023 Conference to be held January 9-11, 2023 in Orlando,
Florida and the Jefferies Winter Restaurant, Foodservice, Gaming,
Lodging and Leisure Summit to be held January 22-24, 2023 in Beaver
Creek, Colorado.
The Company also announced the repurchase of 85,340 shares of
its Convertible Preferred Stock, which prior to the repurchase
would have been convertible into 5.9 million shares of Class A
common stock. The repurchase will be funded with incremental term
loans in the aggregate amount of $130.0 million and available
cash.
2022 Operating Highlights
Please note that all metrics below represent North America only,
unless noted.
For the full year ended December 31, 2022, the Company:
- Surpassed 2,600 open studios, and increased total licenses sold
to over 5,400 across 10 brands globally;
- Grew total members by 32% year-over-year to 590,000, up from
449,000 in 2021;
- Grew studio visits by 32% year-over-year to 39.2 million, up
from 29.7 million in 2021;
- Increased system-wide sales(1) to $1.03 billion, up 46% from
$710 million in 2021;
- Delivered same store sales(2) growth of 25%, compared to 41% in
2021; and
- Achieved Q4 2022 run-rate average unit volume (AUV)(3) of
$522,000, compared to $446,000 in Q4 2021.
“It was inspiring to see the enthusiasm shared by the more than
2,000 attendees who participated in our annual convention last
month,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “This
enthusiasm is no doubt rooted in Xponential’s strong annual
performance. Double-digit growth across membership, same store
sales and AUV compared to the prior year depict a business that is
firing on all cylinders. We enter the new year fully energized, and
I could not be prouder of our team and franchisees for the success
we achieved together in 2022.”
2022 Outlook
The Company expects to meet or exceed the high-end of the
previously provided full year 2022 outlook:
- New studio openings of 511, at the top half of the guidance
range of 500 to 520, and an increase of 53% as compared to full
year 2021;
- North America system-wide sales of $1.03 billion, exceeding the
high end of the guidance range of $995.0 million to $1.005 billion,
and an increase of 46% as compared to full year 2021;
- Revenue in the range of $235.0 million to $240.0 million, or an
increase of 53% at the midpoint as compared to full year 2021;
and
- Adjusted EBITDA(4) in the range of $70.0 million to $74.0
million, or an increase of 164% at the midpoint compared to full
year 2021.
Xponential Fitness plans to report its fourth quarter and full
year 2022 results and provide its full year 2023 outlook in early
March. The date of the Company’s earnings conference call will be
announced in the coming weeks.
Convertible Preferred Stock Repurchase and Incremental Term
Loans
The Company today announced that it has entered into a privately
negotiated preferred stock repurchase agreement with certain
holders of its outstanding Convertible Preferred Stock and an
amendment to its existing financing arrangement that provides for,
among other things, incremental term loans in an aggregate
principal amount of $130.0 million. The Company agreed to pay
aggregate consideration of $131.0 million in cash in exchange for
the repurchase of 85,340 shares of Convertible Preferred Stock.
These shares prior to repurchase would have been convertible into
5.9 million shares of Class A Common Stock. The closing of the
incremental term loans and the repurchase is expected on or about
January 13, 2023, subject to customary closing conditions. The
Company expects to fund the repurchase with the additional
borrowings under the incremental term loans and available cash. The
closing of the repurchase and the closing of the incremental term
loans are cross conditional.
Participation at Upcoming Conferences
The Xponential Fitness management team will be participating at
the ICR 2023 Conference on January 9-11, 2023 in Orlando, Florida.
Anthony Geisler, Chief Executive Officer, and John Meloun, Chief
Financial Officer, are scheduled to present on Monday, January 9,
2023 at 12:30 p.m. ET and will participate in meetings with
investors throughout the conference.
In addition, management will be participating in the Jefferies
Winter Restaurant, Foodservice, Gaming, Lodging and Leisure Summit
to be held January 22-24, 2023 in Beaver Creek, Colorado. The
Company’s presentation in conjunction with the event will be
available beginning on January 21, 2023 at 8:00 a.m. ET.
Both presentations will be broadcast over the Internet and can
be accessed in the Investor Relations section of Xponential
Fitness’ website at https://investor.xponential.com/.
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 Fitness 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 14 additional countries. Xponential
Fitness' portfolio of brands includes Club Pilates, the largest
Pilates brand in the United States; CycleBar, the largest indoor
cycling brand in the United States; StretchLab, a concept offering
one-on-one and group stretching services; Row House, the largest
franchised indoor rowing brand in the United States; AKT, a
dance-based cardio workout combining toning, interval and circuit
training; YogaSix, the largest franchised yoga brand in the United
States; Pure Barre, a total body workout that uses the ballet barre
to perform small isometric movements, and the largest Barre brand
in the United States; 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 in this
press release, such as Adjusted EBITDA, which exclude certain
non-operating or non-recurring items as described in footnote 4
below 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 measures as tools for comparison. In addition,
the Company is not able to provide a quantitative reconciliation of
the estimated full-year Adjusted EBITDA for 2022 without
unreasonable efforts to the most directly comparable GAAP financial
measure due to the high variability, complexity and low visibility
with respect to certain items such as taxes, TRA remeasurements,
and income and expense from changes in fair value of contingent
consideration from acquisitions. We expect the variability of these
items to have a potentially unpredictable and potentially
significant impact on future GAAP financial results, and, as such,
we also believe that any reconciliations provided would imply a
degree of precision that would be confusing or misleading to
investors. The Company expects to provide a reconciliation of the
final Adjusted EBITDA for full-year 2022 when it announces the
fourth quarter and full year results in early March 2023.
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 financial performance. These
forward-looking statements include, without limitation, statements
relating to expected growth of our business; projected number of
new studio openings; anticipated industry trends; projected
financial and performance information such as system-wide sales;
projected annual revenue, Adjusted EBITDA and other statements
under the section “2022 Outlook”; our competitive position in the
boutique fitness industry; and ability to execute our business
strategies. These forward-looking statements also include
references to our expectations regarding the closing of the
convertible preferred stock repurchase transactions and the
incremental term loans. 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 ability of
franchisees to generate sufficient revenues; our relationships with
master franchisees, franchisees and international partners;
difficulties and challenges in opening studios by franchisees;
risks relating to expansion into international markets; loss of
reputation and brand awareness; material weakness in our internal
control over financial reporting; uncertainties regarding the
closing of the convertible preferred stock repurchase transactions
and the incremental term loans; 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 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.
Footnotes
1System-wide sales represent gross sales by all North American
studios. System-wide sales include 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 daily, 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.
2Same 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 consists of average
quarterly sales for all studios that are at least 6 months old at
the beginning of the respective quarter, multiplied by four.
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.
4We 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 (including change in contingent consideration), management
fees and expenses (that were discontinued after July 2021),
litigation expenses (consisting of legal and related fees for
specific proceedings that arise outside of the ordinary course of
our business), employee retention credit (a credit for retaining
employees throughout the COVID-19 pandemic), secondary public
offering expenses for which we do not receive proceeds, expense
related to the remeasurement of our TRA obligation and expense
related to loss on impairment of our brand intangible assets and
goodwill 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, 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/20230108005073/en/
Kimberly Esterkin Addo Investor Relations
investor@xponential.com (310) 829-5400
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