- Grew Q4 2022 revenue 44% and North America system-wide sales
38%, compared to Q4 2021
- Grew full year 2022 revenue 58% and North America system-wide
sales 46%, compared to full year 2021, exceeding the high end of
the guidance range
- Sold 1,026 franchise licenses and opened 511 new studios in
2022
- For full year 2023, Company expects 8% growth in net new studio
openings, 30% growth in system-wide sales, 18% growth in revenue
and 39% 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, 2022. 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 measures are included in the tables that
accompany this release.
Financial Highlights: Q4 2022 Compared to Q4 2021
- Grew revenue 44% to $71.3 million.
- Increased North America system-wide sales1 by 38% to $294.1
million.
- Reported North America same store sales2 growth of 17%,
compared to growth of 53%.
- Reported North America quarterly run-rate average unit volume
(AUV)3 of $522,000, compared to $446,000.
- Posted net loss of $0.4 million, or a loss of $1.13 per share,
on a share count of 26.8 million shares of Class A Common Stock,
compared to a net loss of $29.8 million, or a loss of $2.45 per
basic share, on a share count of 22.6 million shares of Class A
Common Stock.
- Posted adjusted net income of $6.8 million, or $0.07 per basic
share, compared to an adjusted net loss of $6.1 million, or a loss
of $0.21 per basic share.
- Reported Adjusted EBITDA4 of $22.2 million, compared to $8.6
million.
Financial Highlights: FY 2022 Compared to FY 2021
- Grew revenue 58% to $245.0 million.
- Increased North America system-wide sales1 by 46% to $1.03
billion.
- Reported North America same store sales2 growth of 25%,
compared to growth of 41%.
- Posted net income of $2.9 million, or a loss of $0.87 per
share, on a share count of 25.3 million shares of Class A Common
Stock, compared to a 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.
- Posted Adjusted Net Income of $9.5 million, or a loss of $0.07
per share, compared to an Adjusted Net Loss of $24.4 million, or
$0.80 per share.
- Reported Adjusted EBITDA4 of $74.3 million, compared to $27.3
million.
“During 2022, we opened a new studio approximately every 17
hours, and system-wide sales surpassed $1 billion for the first
time,” said Anthony Geisler, CEO of Xponential Fitness, Inc. “I
could not be prouder of all of our franchisees and employees for
making this success possible.”
Mr. Geisler continued, “The momentum we experienced in the
fourth quarter, including double-digit growth across same store
sales, membership and AUVs, has continued into the new year. In
fact, our membership base reached a new milestone of 600,000 in
January. As evident by our 2023 guidance, we’re looking forward to
delivering more growth and value for our stakeholders.”
Results for the Fourth Quarter Ended December 31,
2022
For the fourth quarter of 2022, total revenue increased $21.9
million, or 44%, to $71.3 million, up from $49.4 million in the
prior year period. This increase included a corresponding North
America same store sales increase of 17%.
Net loss totaled $0.4 million, or a loss of $1.13 per share,
compared to a loss of $29.8 million, or a loss of $2.45 per share,
in the prior year period. The increase was the result of $14.9
million of higher overall profitability, a $14.2 million decrease
in non-cash contingent consideration primarily related to the
Rumble acquisition, and a $0.4 million decrease in non-cash
equity-based compensation expense. Please see the table at the end
of this press release for a calculation of the basic and diluted
loss per share for the quarter ended December 31, 2022.
Consistent with previous periods, the Rumble acquisition
non-cash contingent consideration liability is marked-to-market
based on Xponential’s share price, contributing to an $8.2 million
increase to contingent consideration liability in the fourth
quarter of 2022.
Adjusted Net Loss for the fourth quarter 2022, which excludes
the $8.2 million non-cash contingent consideration related
primarily to the Rumble acquisition and ($1.1) million related to
the re-measurement of the Company’s tax receivable agreement, was
$6.8 million, or $0.07 per basic share, on a share count of 26.8
million shares of Class A Common Stock.
Adjusted EBITDA, which is defined as net income before interest,
taxes, depreciation and amortization, adjusted for equity-based
compensation and related employer payroll taxes, acquisition and
transaction expenses, management fees, integration and related
expenses, litigation expenses, employee retention credit, secondary
public offering expenses, tax receivable agreement re-measurement,
and impairment of brand assets, increased to $22.2 million, up from
$8.6 million in the prior year period.
Results for the Full Year Ended December 31, 2022
For the full year 2022, total revenue increased $89.9 million,
or 58%, to $245.0 million, up from $155.1 million in 2021. This
increase in revenue included a corresponding North America same
store sales increase of 25% year-over-year.
Net income totaled $2.9 million, or a loss of $0.87 per share,
compared to a loss of $51.4 million, or $2.85 per share. The
increase was the result of $54.1 million of higher overall
profitability and a $23.2 million decrease in non-cash contingent
consideration related to the Company’s Rumble acquisition, offset
by a $19.3 million increase in non-cash equity-based compensation
expense, and a $3.7 million increase in impairment of brand
assets.
Adjusted Net Income for the full year 2022, which excludes $2.4
million in non-cash contingent consideration related primarily to
the Rumble acquisition, $0.5 million related to the re-measurement
of the Company’s tax receivable agreement, and $3.7 million in
impairment of brand assets, was $9.5 million, or a loss of $0.07
per share, on a share count of 25.3 million shares.
Adjusted EBITDA as defined above increased to $74.3 million, up
from $27.3 million in the prior year.
Liquidity and Capital Resources
As of December 31, 2022, the Company had approximately $37.4
million of cash, cash equivalents and restricted cash and $137.7
million in total long-term debt. Net cash provided by operating
activities was $51.7 million for the full year ended December 31,
2022.
2023 Outlook
The Company is initiating full-year 2023 outlook, which compares
to 2022 results as follows:
- Net new studio openings in the range of 540 to 560, or an
increase of 8% at the midpoint;
- North America system-wide sales in the range of $1.34 billion
to $1.35 billion, or an increase of 30% at the midpoint;
- Revenue in the range of $285.0 million to $295.0 million, or an
increase of 18% at the midpoint; and
- Adjusted EBITDA in the range of $101.0 million to $105.0
million, or an increase of 39% at the midpoint.
Additional key assumptions for full year 2023 include:
- Tax rate in the mid-to-high single digits;
- Share count of 32.3 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 end of
this press release; and
- $1.9 million in quarterly dividends paid related to the
Company’s Convertible Preferred Stock.
Fourth Quarter and Full Year 2022 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 2022 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 March, 16, 2023, by dialing 1-844-512-2921 (United
States) or 1-412-317-6671 (International) and entering the replay
pin number: 13734905.
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, such as
EBITDA, Adjusted EBITDA, adjusted net income (loss), and adjusted
net earnings (loss) per share, which exclude certain non-operating
or non-recurring items, including but not limited to, equity-based
compensation expenses and related employer payroll taxes,
acquisition and transaction related expenses, litigation expenses,
secondary public offering expenses, impairment of brand assets and
employee retention credit, 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. 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. In addition, we are not able to provide a
quantitative reconciliation of the estimated full-year Adjusted
EBITDA for fiscal year ending December 31, 2023 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.
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
net 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 “2023 Outlook”; our competitive position in the
boutique fitness industry; 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, franchisees and international partners;
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, 2022 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 per
share amounts)
December 31,
2022
2021
Assets Current Assets: Cash, cash equivalents and restricted
cash
$
37,370
$
21,320
Accounts receivable, net
25,555
11,702
Inventories
10,864
6,928
Prepaid expenses and other current assets
6,294
5,271
Deferred costs, current portion
4,131
3,712
Notes receivable from franchisees, net
1,520
2,293
Total current assets
85,734
51,226
Property and equipment, net
18,524
12,773
Right-of-use assets
30,079
—
Goodwill
165,697
169,073
Intangible assets, net
137,175
136,863
Deferred costs, net of current portion
43,620
42,015
Notes receivable from franchisees, net of current portion
1,067
3,041
Other assets
795
553
Total assets
$
482,691
$
415,544
Liabilities, redeemable convertible preferred stock and equity
(deficit) Current Liabilities: Accounts payable
$
16,185
$
14,905
Accrued expenses
12,295
21,045
Deferred revenue, current portion
31,996
22,747
Notes payable
—
983
Current portion of long-term debt
3,035
2,960
Other current liabilities
9,265
3,253
Total current liabilities
72,776
65,893
Deferred revenue, net of current portion
109,465
95,691
Contingent consideration from acquisitions
28,182
54,881
Long-term debt, net of current portion, discount and issuance costs
133,039
127,983
Lease liability
30,583
—
Other liabilities
8,633
4,675
Total liabilities
382,678
349,123
Commitments and contingencies Redeemable convertible preferred
stock, $0.0001 par value, 400 shares authorized, 200 shares issued
and outstanding as of December 31, 2022 and 2021
308,075
276,890
Stockholders' equity (deficit): Undesignated preferred stock,
$0.0001 par value, 4,600 shares authorized, none issued and
outstanding as of December 31, 2022 and 2021
—
—
Class A common stock, $0.0001 par value, 500,000 shares authorized,
27,571 and 23,898 shares issued and outstanding as of December 31,
2022 and 2021, respectively
3
2
Class B common stock, $0.0001 par value, 500,000 shares authorized,
21,647 and 22,969 shares issued, and 21,572 and 22,969 shares
outstanding as of December 31, 2022 and 2021, respectively
2
2
Additional paid-in capital
505,186
—
Receivable from shareholder
(16,369
)
(10,600
)
Accumulated deficit
(641,903
)
(643,833
)
Treasury stock, at cost, 75 shares outstanding as of December 31,
2022, no shares outstanding as of December 31, 2021
(1,697
)
—
Total stockholders' deficit attributable to Xponential Fitness,
Inc.
(154,778
)
(654,429
)
Noncontrolling interests
(53,284
)
443,960
Total stockholders' deficit
(208,062
)
(210,469
)
Total liabilities, redeemable convertible preferred stock and
stockholders' deficit
$
482,691
$
415,544
Xponential Fitness,
Inc.
Consolidated Statements of
Operations
(in thousands, except per
share amounts)
Three Months Ended December 31, Years Ended
December 31,
2022
2021
2022
2021
Revenue, net: Franchise revenue
$
32,158
$
22,955
$
115,286
$
74,459
Equipment revenue
11,531
7,012
43,461
22,583
Merchandise revenue
7,973
6,520
27,073
20,140
Franchise marketing fund revenue
5,840
4,120
20,384
13,623
Other service revenue
13,767
8,765
38,750
24,274
Total revenue, net
71,269
49,372
244,954
155,079
Operating costs and expenses: Costs of product revenue
12,269
9,291
47,220
28,550
Costs of franchise and service revenue
4,858
4,101
18,447
12,716
Selling, general and administrative expenses
34,661
32,732
129,108
94,798
Depreciation and amortization
4,090
3,334
15,315
10,172
Marketing fund expense
4,594
3,740
17,290
13,044
Acquisition and transaction expenses (income)
8,231
23,091
2,438
26,618
Total operating costs and expenses
68,703
76,289
229,818
185,898
Operating income (loss)
2,566
(26,917
)
15,136
(30,819
)
Other (income) expense: Interest income
(596
)
(368
)
(1,805
)
(1,164
)
Interest expense
3,957
2,840
13,017
24,709
Other expense
(1,112
)
—
523
—
Gain on debt extinguishment
—
—
—
(3,707
)
Total other expense
2,249
2,472
11,735
19,838
Income (loss) before income taxes
317
(29,389
)
3,401
(50,657
)
Income taxes
684
396
526
783
Net income (loss)
(367
)
(29,785
)
2,875
(51,440
)
Less: Net income (loss) attributable to noncontrolling interests
(120
)
(15,012
)
945
(32,611
)
Net income (loss) attributable to Xponential Fitness, Inc.
$
(247
)
$
(14,773
)
$
1,930
$
(18,829
)
Net loss per share of Class A common stock: Basic
$
(1.13
)
(2.45
)
$
(0.87
)
$
(2.85
)
Diluted
$
(1.13
)
(2.45
)
$
(0.87
)
$
(2.85
)
Weighted average shares of Class A common stock outstanding: Basic
26,819
22,598
25,295
22,403
Diluted
26,819
22,598
25,295
22,403
Xponential Fitness,
Inc.
Consolidated Statements of
Cash Flows
(in thousands)
Years Ended December 31,
2022
2021
Cash flows from operating activities: Net income (loss)
$
2,875
$
(51,440
)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: Depreciation and amortization
15,315
10,172
Amortization and write off of debt issuance cost
126
5,749
Amortization and write off of discount on long-term debt
613
2,704
Change in contingent consideration from acquisitions
2,440
25,640
Amortization of right-of-use assets
2,655
—
Bad debt expense (recovery)
(712
)
410
Equity-based compensation
29,044
9,699
Non-cash interest
(1,069
)
583
Gain on debt extinguishment
—
(3,707
)
Loss (gain) from disposal of assets
(78
)
483
Impairment of studio assets
—
781
Impairment of brand assets
3,656
—
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable
(12,720
)
(6,608
)
Inventories
(3,936
)
(768
)
Prepaid expenses and other current assets
(1,023
)
(4,220
)
Operating lease liabilities
(2,496
)
—
Deferred costs
(2,024
)
(7,122
)
Notes receivable, net
33
137
Accounts payable
469
(3,013
)
Accrued expenses
(5,008
)
3,596
Related party payable
—
(1
)
Other current liabilities
2,226
1,449
Deferred revenue
18,223
30,011
Other assets
(240
)
1
Other liabilities
3,301
(85
)
Net cash provided by operating activities
51,670
14,451
Cash flows from investing activities: Purchases of property and
equipment
(8,955
)
(3,638
)
Purchase of studios
—
(450
)
Proceeds from sale of assets
65
433
Purchase of intangible assets
(7,177
)
(1,220
)
Notes receivable issued
(1,782
)
(2,258
)
Notes receivable payment received
3,236
820
Acquisition of businesses
—
(44,322
)
Net cash used in investing activities
(14,613
)
(50,635
)
Cash flows from financing activities: Borrowings from long-term
debt
7,425
255,980
Payments on long-term debt
(2,978
)
(310,600
)
Debt issuance costs
(55
)
(996
)
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
(16,250
)
(8,992
)
Payment of contingent consideration
(2,190
)
(12,154
)
Payments on loans from related party
—
(85
)
Member contributions
—
562
Payments for taxes related to net share settlement of restricted
share units
(1,909
)
—
Distributions to Member
—
(10,600
)
Loan to shareholder
(5,050
)
—
Receipts from Member, net
—
1,456
Net cash provided by (used in) financing activities
(21,007
)
46,205
Increase in cash, cash equivalents and restricted cash
16,050
10,021
Cash, cash equivalents and restricted cash, beginning of year
21,320
11,299
Cash, cash equivalents and restricted cash, end of year
$
37,370
$
21,320
Xponential Fitness,
Inc.
Net Loss to GAAP EPS Per
Share
(in thousands, except per
share amounts)
Three Months Ended December
31,
Years Ended December
31,
2022
2021
2022
2021
Numerator: Net income (loss)
$
(367
)
$
(29,785
)
$
2,875
$
(51,440
)
Less: net loss attributable to noncontrolling interests
24,343
56,214
19,284
78,417
Less: dividends on preferred shares
(3,250
)
(3,250
)
(13,000
)
(5,742
)
Less: deemed dividend
(50,979
)
(78,494
)
(31,185
)
(84,994
)
Net loss attributable to XPO Inc. - basic and diluted
$
(30,253
)
$
(55,315
)
$
(22,026
)
$
(63,759
)
Denominator: Weighted average shares of Class A common stock
outstanding - basic and diluted
26,819
22,598
25,295
22,403
Net loss per share attributable to Class A common stock -
basic
$
(1.13
)
$
(2.45
)
$
(0.87
)
$
(2.85
)
Net loss per share attributable to Class A common stock - diluted
$
(1.13
)
$
(2.45
)
$
(0.87
)
$
(2.85
)
Anti-dilutive shares excluded from diluted loss per share of Class
A common stock: Rumble Class A common stock
-
1,300
-
1,300
Restricted stock units
2,102
1,123
2,102
1,123
Convertible preferred stock
13,889
13,889
13,889
13,889
Conversion of Class B common stock to Class A common stock
21,572
22,969
21,572
22,969
Treasury share options
75
-
75
-
Rumble contingent shares
2,024
2,024
2,024
2,024
Profits interests, time vesting
14
74
14
74
Profit interest units, performance vesting
-
1,935
-
1,935
Xponential Fitness, Inc.
Reconciliations of GAAP to
Non-GAAP Measures
(in thousands, except per
share amounts)
Three Months Ended December 31, Years Ended
December 31,
2022
2021
2022
2021
($ in thousands) Net income (loss)
$
(367
)
$
(29,785
)
$
2,875
$
(51,440
)
Interest expense, net
3,361
2,472
11,212
23,545
Income taxes
684
396
526
783
Depreciation and amortization
4,090
3,334
15,315
10,172
EBITDA
7,768
(23,583
)
29,928
(16,940
)
Equity-based compensation
5,124
5,498
29,044
9,699
Employer payroll taxes related to equity-based compensation
123
—
123
—
Acquisition and transaction expenses (income)
8,231
23,091
2,438
26,618
Management fees and expenses
—
—
—
462
Litigation expenses
1,927
4,605
10,301
8,312
Employee retention credit
—
(2,269
)
(2,597
)
(2,269
)
Secondary public offering expenses
99
—
836
—
TRA remeasurement
(1,112
)
1,261
523
1,441
Impairment of brand assets
—
3,656
—
Adjusted EBITDA
$
22,160
$
8,603
$
74,252
$
27,323
Three Months Ended December 31, Years Ended
December 31,
2022
2021
2022
2021
Net income (loss)
$
(367
)
$
(29,785
)
$
2,875
$
(51,440
)
Change in fair value of contingent consideration
8,231
22,420
2,440
25,640
TRA remeasurement
(1,112
)
1,261
523
1,441
Impairment of brand assets
—
—
3,656
—
Adjusted net income (loss)
$
6,752
$
(6,104
)
$
9,494
$
(24,359
)
Adjusted net income (loss) attributable to noncontrolling interest
3,016
(3,077
)
4,432
(12,362
)
Adjusted net income (loss) attributable to Xponential Fitness, Inc.
3,736
(3,027
)
5,062
(11,997
)
Dividends on preferred shares
(1,798
)
(1,612
)
(6,931
)
(2,828
)
Deemed dividend
—
—
—
(3,201
)
EPS numerator - Basic
$
1,938
$
(4,639
)
$
(1,869
)
$
(18,026
)
Add: Adjusted net income (loss) attributable to noncontrolling
interest
3,016
—
—
—
Add: Dividends on preferred shares
1,798
—
—
—
EPS numerator - Diluted
$
6,752
$
(4,639
)
$
(1,869
)
$
(18,026
)
Adjusted net earnings (loss) per share - Basic
$
0.07
$
(0.21
)
$
(0.07
)
$
(0.80
)
Weighted average shares of Class A common stock outstanding - Basic
26,819
22,598
25,295
22,403
Adjusted net earnings (loss) per share - Diluted
$
0.11
$
(0.21
)
$
(0.07
)
$
(0.80
)
Effect of dilutive securities: Restricted stock units
482
—
—
—
Convertible preferred shares
13,889
—
—
—
Conversion of Class B common stock to Class A common stock
21,649
—
—
—
Weighted average shares of Class A common stock outstanding -
Diluted
62,839
22,598
25,295
22,403
Shares excluded from diluted earnings per share of Class A
common stock Rumble Class A common stock
—
1,300
—
1,300
Restricted stock units
—
1,123
2,102
1,123
Convertible preferred stock
—
13,889
13,889
13,889
Conversion of Class B common stock to Class A common stock
—
22,969
21,572
22,969
Treasury share options
—
—
75
—
Profits interests, performance vesting
—
1,935
—
1,935
Rumble contingent shares
2,024
2,024
2,024
2,024
Profits interests, time vesting
14
74
14
74
Note: The above adjusted net income (loss) per share is
computed by dividing the adjusted net income (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
primarily due to Rumble.
Footnotes
1. System-wide sales represent gross sales by all North America
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 net new studio
openings and increases in same store sales. Management reviews
system-wide sales weekly, 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 net new studio openings.
Management reviews same store sales to assess the health of the
franchised studios.
3. AUV 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 net new studio
openings. Management reviews AUV to assess studio economics.
4. We 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 and related employer payroll
taxes, 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 tax credit for retaining employees throughout the COVID-19
pandemic), secondary public offering expenses for which we did 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/20230302005319/en/
Kimberly Esterkin Addo Investor Relations
investor@xponential.com (310) 829-5400
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