Net Sales Increased 17%
Gross Margin Expanded 270 Basis
Points
EPS increased 20% to $0.25; Adjusted EPS
increased 24% to $0.30
Raises Full Year Net Sales and Earnings
Outlook
YETI Holdings, Inc. (“YETI”) (NYSE: YETI) today announced its
financial results for the third quarter ended September 28,
2019.
YETI reports its financial performance in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) and as adjusted on a non-GAAP basis. Please see
“Non-GAAP Financial Information” and “Reconciliation of GAAP to
Non-GAAP Financial Information” below for additional information
and reconciliations of the non-GAAP financial measures to the most
comparable GAAP financial measures.
Matt Reintjes, President and Chief Executive Officer, commented,
“YETI had a great quarter. Third quarter results were powered by a
strong new product lineup and expanding gross margins – both
powerful indicators of brand health and momentum. Supported by our
four strategic growth drivers, we are increasing our full year
outlook and are set up for a strong finish to 2019.”
For the Three Months Ended September 28, 2019
Net sales increased 17% to $229.1 million, compared to
$196.1 million during the same period last year.
- Direct-to-consumer (“DTC”) channel net sales increased 31% to
$92.9 million, compared to $71.2 million in the prior year quarter,
led by strong performance in both product categories, particularly
in Drinkware.
- Wholesale channel net sales increased 9% to $136.2 million,
compared to $125.0 million in the same period last year, driven by
strong performance in both Coolers & Equipment and Drinkware
categories.
- Drinkware net sales increased 21% to $126.4 million, compared
to $104.0 million in the prior year quarter, primarily driven by
the continued expansion of our product offerings, including the
introduction of new colorways and sizes, and strong demand for
customization.
- Coolers & Equipment net sales increased 13% to $97.8
million, compared to $86.7 million in the same period last year,
primarily driven by strong performance in soft coolers and outdoor
living.
Gross profit increased 23% to $120.1 million, or 52.4% of
net sales, compared to $97.5 million, or 49.7% of net sales, in the
third quarter of 2018. The 270 basis point increase in gross margin
was primarily driven by cost improvements, particularly in our
Drinkware category and a favorable shift in our channel mix led by
an increase in DTC channel net sales, partially offset by higher
tariff rates.
Selling, general, and administrative (“SG&A”)
expenses increased to $86.1 million, or 37.6% of net sales,
compared to $69.4 million, or 35.4% of net sales, in the third
quarter of 2018. SG&A as a percent of net sales increased 220
basis points, including approximately 100 basis points attributable
to costs incurred in our ongoing transition to a public company.
The balance, or approximately 120 basis points, was primarily due
to higher variable selling expenses driven by our faster growing
DTC channel, increased marketing expenses, and increased personnel
to support long-term growth in our business, partially offset by
lower non-cash stock-based compensation expense, and professional
fees.
Operating income increased 21% to $34.0 million, to 14.8%
of net sales, compared to $28.1 million, or 14.3% of net sales,
during the prior year quarter.
Adjusted operating income increased 27% to $40.4 million,
to 17.6% of net sales, compared to $31.7 million, or 16.2% of net
sales, during the same period last year.
Net income increased 25% to $21.3 million, compared to
$17.0 million in the prior year quarter; earnings per diluted share
increased 20% to $0.25, compared to $0.21 per diluted share in the
prior year quarter.
Adjusted net income increased 29% to $26.1 million,
compared to $20.2 million in the prior year quarter; adjusted
earnings per diluted share increased 24% to $0.30, compared to
$0.24 per diluted share in the prior year quarter.
Adjusted EBITDA increased 24% to $47.5 million, or 20.7%
of net sales, from $38.4 million, or 19.6% of net sales, during the
same period last year.
For the Nine Months Ended September 28, 2019
Net sales increased 15% to $616.1 million, compared to
$537.7 million during the same period last year.
- Direct-to-consumer (“DTC”) channel net sales increased 34% to
$237.2 million, compared to $176.9 million in the prior year
period, led by strong performance in both Coolers & Equipment
and Drinkware categories.
- Wholesale channel net sales increased 5% to $379.0 million,
compared to $360.7 million in the same period last year, primarily
driven by Coolers & Equipment.
- Drinkware net sales increased 19% to $334.3 million, compared
to $280.7 million in the prior year period, primarily driven by the
continued expansion of our Drinkware product offerings, including
the introduction of new colorways, sizes, and accessories, and
strong demand for customization.
- Coolers & Equipment net sales increased 11% to $266.6
million, compared to $240.0 million in the same period last year,
primarily driven by strong performance in outdoor living products,
bags, hard coolers, soft coolers, and cargo, as well as the
introduction of the Camino Carryall to our wholesale channel during
the first quarter of 2019.
Gross profit increased 23% to $313.0 million, or 50.8% of
net sales, compared to $255.3 million, or 47.5% of net sales, in
the prior year period. The 330 basis point increase in gross margin
was primarily driven by cost improvements, particularly in our
Drinkware category, a favorable shift in our channel mix led by an
increase in DTC channel net sales, and lower inbound freight,
partially offset by higher tariff rates and the unfavorable impact
of inventory reserve reductions in the prior year period.
Selling, general, and administrative (“SG&A”)
expenses increased to $235.2 million, or 38.2% of net sales,
compared to $190.7 million, or 35.5% of net sales, in the same
period last year. SG&A as a percent of net sales increased 270
basis points, including approximately 90 basis points attributable
to costs incurred in our ongoing transition to a public company.
The balance, or approximately 180 basis points, was primarily due
to higher variable selling expenses driven by our faster growing
DTC channel, increased marketing expenses, and increased personnel
to support growth in our business, partially offset by lower
third-party logistics fees, lower non-cash stock-based compensation
expense, and other general and administrative cost savings.
Operating income increased 21% to $77.8 million, to 12.6%
of net sales, compared to $64.6 million, or 12.0% of net sales,
during the prior year period.
Adjusted operating income increased 26% to $98.5 million,
to 16.0% of net sales, compared to $78.3 million, or 14.6% of net
sales, during the same period last year.
Net income increased 40% to $45.7 million, compared to
$32.6 million in the prior year period; earnings per diluted share
increased 35% to $0.53, compared to $0.39 per diluted share in the
prior year period.
Adjusted net income increased 40% to $61.3 million,
compared to $43.6 million in the prior year period; adjusted
earnings per diluted share increased 35% to $0.71, compared $0.53
per diluted share in the same period last year.
Adjusted EBITDA increased 23% to $119.5 million, or 19.4%
of net sales, from $96.8 million, or 18.0% of net sales, during the
prior year period.
Balance Sheet and Cash Flow Highlights
Inventory increased 33% to $209.2 million, compared to
$157.7 million at the end of the third quarter of 2018. Inventory
levels reflect the strategic buildup of Drinkware in advance of
potential additional tariffs as well as investments to support
anticipated sales growth. Excluding the Drinkware buildup,
inventory growth was slightly below our reported sales growth for
the quarter.
Total debt, excluding unamortized deferred financing
fees, was $298.0 million, compared to $394.0 million at the end of
the third quarter of 2018. During the first nine months of 2019, we
made $34.9 million in debt payments. Our ratio of net debt to
adjusted EBITDA for the trailing twelve months (as defined below)
was 1.5 times at the end of the third quarter of 2019 compared to
2.6 times at the end of the same period last year.
Cash flow provided by operating activities was $26.6
million and capital expenditures were $24.2 million for the nine
months ended September 28, 2019.
Updated 2019 Full Year Outlook
- Net sales are now expected to increase between 14.5% and
15.0% compared to 2018, with growth across both channels and led by
the DTC channel (versus the previous outlook of between 13.5% and
14.0%);
- Operating income as a percentage of net sales is now
expected to be between 14.0% and 14.2% (versus the previous outlook
of 13.9% to 14.1%), reflecting margin expansion of 90 to 110 basis
points, primarily driven by higher gross margin;
- Adjusted operating income as a percentage of net sales
is now expected to be between 16.8% and 17.0% (versus the previous
outlook of 16.3% to 16.6%), reflecting margin expansion of 90 to
110 basis points, primarily driven by higher gross margin;
- An effective tax rate at a more normalized level of
approximately 24.5%, which remains unchanged from the previous
outlook;
- Net income per diluted share is now expected to be
between $0.90 and $0.92, reflecting 29% to 33% growth (versus the
previous outlook of $0.88 to $0.90); assuming a normalized tax rate
of 24.5% in 2018 (the effective tax rate for 2018 was 17%),
earnings growth would be between 42% to 46%;
- Adjusted net income per diluted share is now expected to
be between $1.12 and $1.14, reflecting 23% to 26% growth (versus
the previous outlook of $1.07 and $1.09, reflecting 18% to 21%
growth); assuming a normalized tax rate of 24.5% in 2018 (the
effective tax rate for 2018 was 17%), adjusted earnings growth
would be between 33% and 36% (versus the previous outlook of 27% to
30%);
- Diluted weighted average shares outstanding of 86.3
million (versus the previous outlook of 86.0 million);
- Adjusted EBITDA is now expected to be between $178.2
million and $181.2 million, or between 20.0% and 20.2% of net
sales, reflecting 20% to 22% growth (versus the previous outlook of
$174.8 million and $177.7 million, or between 19.8% and 20.0% of
net sales, and reflecting growth of 17% to 19%);
- Capital expenditures are now expected to be between $30
million and $35 million; and
- Ratio of net debt to Adjusted EBITDA is expected to be
approximately 1.0 times at the end of 2019, which remains unchanged
from the previous outlook, compared to 1.7 times at the end of
2018.
Ratio of Net Debt to Adjusted EBITDA Trailing Twelve
Months
Net debt as of September 28, 2019, which is total debt of $298.0
million less cash of $34.6 million, divided by adjusted EBITDA for
the trailing twelve months, was 1.5 times. Adjusted EBITDA for the
trailing twelve months ending September 28, 2019 was $171.7 million
and is calculated using the full year 2018 adjusted EBITDA of
$149.0 million less adjusted EBITDA for the first nine months of
2018 of $96.8 million, plus adjusted EBITDA for the first nine
months of 2019 of $119.5 million.
Net debt as of September 29, 2018, which is total debt of $394.0
million less cash of $52.1 million, divided by adjusted EBITDA for
the trailing twelve months, was 2.6 times. Adjusted EBITDA for the
trailing twelve months ending September 29, 2018 was $130.0 million
and is calculated using the full year 2017 adjusted EBITDA of $97.5
million less adjusted EBITDA for the first nine months of 2017 of
$64.3 million, plus adjusted EBITDA for the first nine months of
2018 of $96.8 million.
Conference Call Details
A conference call to discuss the third quarter of 2019 financial
results is scheduled for today, October 31, 2019, at 8:00 a.m.
Eastern Time. Investors and analysts interested in participating in
the call are invited to dial 877-451-6152 (international callers
please dial 201-389-0879) approximately 10 minutes prior to the
start of the call. A live audio webcast of the conference call will
be available online at http://investors.yeti.com and by dialing
844-512-2921 and entering the access code 13695451. A replay will
be available through November 14, 2019.
About YETI Holdings, Inc.
YETI is a growing designer, marketer, retailer, and distributor
of a variety of innovative, branded, premium products to a
wide-ranging customer base. Our mission is to ensure that each YETI
product delivers exceptional performance and durability in any
environment, whether in the remote wilderness, at the beach, or
anywhere else life takes our customers. By consistently delivering
high-performing products, we have built a following of engaged
brand loyalists throughout the United States, Canada, Australia,
Japan, and elsewhere, ranging from serious outdoor enthusiasts to
individuals who simply value products of uncompromising quality and
design. Our relationship with customers continues to thrive and
deepen as a result of our innovative new product introductions,
expansion and enhancement of existing product families, and
multifaceted branding activities.
Non-GAAP Financial Information
This press release includes financial measures that are not
defined by GAAP, including adjusted operating income, adjusted net
income, adjusted net income per diluted share, and adjusted EBITDA.
We define adjusted operating income and adjusted net income as
operating income and net income, respectively, adjusted for
non-cash stock-based compensation expense, asset impairment
charges, investments in new retail locations and international
market expansion, transition to Cortec Group Fund V, L.P. and its
affiliates (“Cortec”) majority ownership, transition to the ongoing
senior management team, and transition to a public company, and, in
the case of adjusted net income, also adjusted for accelerated
amortization of deferred financing fees and the loss from early
extinguishment of debt resulting from early prepayments of debt,
and the tax impact of all adjustments. Adjusted net income per
share is calculated using adjusted net income, as defined above,
and diluted weighted average shares outstanding. We define adjusted
EBITDA as net income before interest expense, net, provision
(benefit) for income taxes and depreciation and amortization,
adjusted for the impact of certain other items, including: non-cash
stock-based compensation expense; asset impairment charges;
accelerated amortization of deferred financing fees and loss from
early extinguishment of debt resulting from the early prepayment of
debt; investments in new retail locations and international market
expansion; transition to Cortec majority ownership; transition to
the ongoing senior management team; and transition to a public
company. The expenses incurred related to these transitional events
include: management fees and contingent consideration related to
the transition to Cortec majority ownership; severance, recruiting,
and relocation costs related to the transition to our ongoing
senior management team; consulting fees, recruiting fees, salaries
and travel costs related to members of our Board of Directors, fees
associated with Sarbanes-Oxley Act compliance, incremental audit
and legal fees in connection with our transition to a public
company, and costs incurred in connection with our secondary
offering. All of these transitional costs are reported in SG&A
expenses.
Adjusted operating income, adjusted net income, adjusted net
income per diluted share, and adjusted EBITDA are not defined by
GAAP and may not be comparable to similarly titled measures
reported by other entities. We use these non-GAAP measures, along
with GAAP measures, as a measure of profitability. These measures
help us compare our performance to other companies by removing the
impact of our capital structure; the effect of operating in
different tax jurisdictions; the impact of our asset base, which
can vary depending on the book value of assets and methods used to
compute depreciation and amortization; the effect of non-cash
stock-based compensation expense, which can vary based on plan
design, share price, share price volatility, and the expected lives
of equity instruments granted; as well as certain expenses related
to what we believe are events of a transitional nature. We also
disclose adjusted operating income, adjusted net income, and
adjusted EBITDA as a percentage of net sales to provide a measure
of relative profitability.
We believe that these non-GAAP measures, when reviewed in
conjunction with GAAP financial measures, and not in isolation or
as substitutes for analysis of our results of operations under
GAAP, are useful to investors as they are widely used measures of
performance and the adjustments we make to these non-GAAP measures
provide investors further insight into our profitability and
additional perspectives in comparing our performance to other
companies and in comparing our performance over time on a
consistent basis. adjusted operating income, adjusted net income,
and adjusted EBITDA have limitations as profitability measures in
that they do not include the interest expense on our debts, our
provisions for income taxes, and the effect of our expenditures for
capital assets and certain intangible assets. In addition, all of
these non-GAAP measures have limitations as profitability measures
in that they do not include the effect of non-cash stock-based
compensation expense, the effect of asset impairments, the effect
of investments in new retail locations and international market
expansion, and the impact of certain expenses related to
transitional events that are settled in cash. Because of these
limitations, we rely primarily on our GAAP results.
In the future, we may incur expenses similar to those for which
adjustments are made in calculating adjusted operating income,
adjusted net income, and adjusted EBITDA. Our presentation of these
non-GAAP measures should not be construed as a basis to infer that
our future results will be unaffected by extraordinary, unusual or
non-recurring items.
Forward-looking statements
This press release contains ‘‘forward-looking statements’’
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical or
current fact included in this press release are forward-looking
statements. Forward-looking statements include statements
containing words such as “anticipate,” “assume,” “believe,” “can
have,” “contemplate,” “continue,” “could,” “design,” “due,”
“estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,”
“may,” “might,” “objective,” “plan,” “predict,” “project,”
“potential,” “seek,” “should,” “target,” “will,” “would,” and other
words and terms of similar meaning in connection with any
discussion of the timing or nature of future operational
performance or other events. For example, all statements made
relating to our growth plans and our expectations for annual
growth, including those set forth in the quote from YETI’s
President and CEO and the 2019 financial outlook provided herein,
constitute forward-looking statements. All forward-looking
statements are subject to risks and uncertainties that may cause
actual results to differ materially from those that are expected
and, therefore, you should not unduly rely on such statements. The
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by these forward-looking
statements include but are not limited to: (i) our ability to
maintain and strengthen our brand and generate and maintain ongoing
demand for our products; (ii) our ability to successfully design
and develop new products; (iii) our ability to effectively manage
our growth; (iv) our ability to expand into additional consumer
markets, and our success in doing so; (v) the success of our
international expansion plans; (vi) our ability to compete
effectively in the outdoor and recreation market and protect our
brand; (vii) the level of customer spending for our products, which
is sensitive to general economic conditions and other factors;
(viii) problems with, or loss of, our third-party contract
manufacturers and suppliers, or an inability to obtain raw
materials; (ix) fluctuations in the cost and availability of raw
materials, equipment, labor, and transportation and subsequent
manufacturing delays or increased costs; (x) our ability to
accurately forecast demand for our products and our results of
operations; (xi) our relationships with our national, regional, and
independent retail partners, who account for a significant portion
of our sales; (xii) the impact of natural disasters and failures of
our information technology on our operations and the operations of
our manufacturing partners; (xiii) our ability to attract and
retain skilled personnel and senior management, and to maintain the
continued efforts of our management and key employees; and (xiv)
the impact of our indebtedness on our ability to invest in the
ongoing needs of our business. You should read our filings with the
United States Securities and Exchange Commission (the “SEC”),
including our Annual Report on Form 10-K for the year ended
December 30, 2018, for a more extensive list of factors, that may
be amended, supplemented or superseded from time to time by other
reports YETI files with the SEC, that could affect results. These
forward-looking statements are made based upon detailed assumptions
and reflect management’s current expectations and beliefs. While
YETI believes that these assumptions underlying the forward-looking
statements are reasonable, YETI cautions that it is very difficult
to predict the impact of known factors, and it is impossible for
YETI to anticipate all factors that could affect actual
results.
The forward-looking statements included here are made only as of
the date hereof. YETI undertakes no obligation to publicly update
or revise any forward-looking statement as a result of new
information, future events, or otherwise, except as required by
law.
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Nine Months Ended
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
Net sales
$
229,125
$
196,109
$
616,132
$
537,654
Cost of goods sold
109,049
98,568
303,152
282,354
Gross profit
120,076
97,541
312,980
255,300
Selling, general, and administrative
expenses
86,071
69,417
235,191
190,746
Operating income
34,005
28,124
77,789
64,554
Interest expense
(5,319)
(7,755)
(17,081)
(24,474)
Other expense
(304)
(214)
(192)
(325)
Income before income taxes
28,382
20,155
60,516
39,755
Income tax expense
(7,080)
(3,125)
(14,824)
(7,161)
Net income
$
21,302
$
17,030
$
45,692
$
32,594
Net income per share
Basic
$
0.25
$
0.21
$
0.54
$
0.40
Diluted
$
0.25
$
0.21
$
0.53
$
0.39
Weighted-average common shares
outstanding
Basic
85,285
81,147
84,686
81,238
Diluted
86,373
82,924
86,152
82,946
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands, except per
share amounts)
September 28,
2019
December 29,
2018
September 29,
2018
ASSETS
Current assets
Cash
$
34,557
$
80,051
$
52,100
Accounts receivable, net
74,758
59,328
61,915
Inventory
209,154
145,423
157,669
Prepaid expenses and other current
assets
13,303
12,211
12,957
Total current assets
331,772
297,013
284,641
Property and equipment, net
81,242
74,097
72,405
Goodwill
54,293
54,293
54,293
Intangible assets, net
90,692
80,019
81,113
Deferred income taxes
33
7,777
9,088
Deferred charges and other assets
1,663
1,014
1,052
Total assets
$
559,695
$
514,213
$
502,592
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current liabilities
Accounts payable
$
105,514
$
68,737
$
76,851
Accrued expenses and other current
liabilities
38,220
53,022
44,674
Taxes payable
2,863
6,390
6,185
Accrued payroll and related costs
12,362
15,551
11,201
Current maturities of long-term debt
42,138
43,638
47,050
Total current liabilities
201,097
187,338
185,961
Long-term debt, net of current portion
252,694
284,376
340,743
Other liabilities
18,044
13,528
13,047
Total liabilities
471,835
485,242
539,751
Commitments and contingencies
Stockholders’ Equity
Common stock, par value $0.01; 600,000
shares authorized; 85,775, 84,196, and 81,147 shares outstanding at
September 28, 2019, December 29, 2018, and September 29, 2018,
respectively
858
842
811
Preferred stock, par value $0.01; 30,000
shares authorized; no shares issued or outstanding
—
—
—
Additional paid-in capital
281,418
268,327
227,159
Accumulated deficit
(194,287)
(240,104)
(265,113)
Accumulated other comprehensive loss
(129)
(94)
(16)
Total stockholders’ equity (deficit)
87,860
28,971
(37,159)
Total liabilities and stockholders’
equity
$
559,695
$
514,213
$
502,592
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except per
share amounts)
Nine Months Ended
September 28,
2019
September 29,
2018
Cash Flows from Operating
Activities:
Net income
$
45,692
$
32,594
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization
21,220
18,218
Amortization of deferred financing
fees
1,694
2,774
Stock-based compensation
10,399
10,031
Deferred income taxes
9,874
916
Impairment of long-lived assets
540
598
Gain on disposal of long-lived assets
—
(20)
Changes in operating assets and
liabilities:
Accounts receivable, net
(12,086)
5,197
Inventory
(64,136)
17,373
Other current assets
(1,076)
(3,104)
Accounts payable and accrued
expenses
16,692
39,261
Taxes payable
(3,556)
(6,099)
Other
1,301
1,095
Net cash provided by operating
activities
26,558
118,834
Cash Flows from Investing
Activities:
Purchases of property and equipment
(24,249)
(13,339)
Purchases of intangibles, net
(14,991)
(10,752)
Proceeds from sale of long-lived
assets
—
165
Net cash used in investing activities
(39,240)
(23,926)
Cash Flows from Financing
Activities:
Repayments of long-term debt
(34,875)
(90,663)
Cash paid for repurchase of common
stock
—
(1,967)
Proceeds from employee stock
transactions
2,708
53
Taxes paid in connection with exercise of
stock options
—
(57)
Payments of dividends
(636)
(2,523)
Payments of offering costs
—
(1,315)
Net cash used in financing activities
(32,803)
(96,472)
Effect of exchange rate changes on
cash
(9)
14
Net decrease in cash
(45,494)
(1,550)
Cash, beginning of period
80,051
53,650
Cash, end of period
$
34,557
$
52,100
YETI HOLDINGS, INC.
SELECTED FINANCIAL
DATA
Reconciliation of GAAP to
Non-GAAP Financial Information
(Unaudited)
(In thousands except per share
amounts)
Three Months Ended
Nine Months Ended
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
Operating income
$
34,005
$
28,124
$
77,789
$
64,554
Adjustments:
Non-cash stock-based compensation
expense(1)
2,113
2,923
10,399
10,031
Long-lived asset impairment(1)
443
—
540
—
Investments in new retail locations and
international market expansion(1)(2)
1,179
52
2,230
292
Transition to Cortec majority
ownership(1)(3)
—
—
—
750
Transition to the ongoing senior
management team(1)(4)
355
350
878
1,694
Transition to a public company(1)(5)
2,255
233
6,640
1,003
Adjusted operating income
$
40,350
$
31,682
$
98,476
$
78,324
Net income
$
21,302
$
17,030
$
45,692
$
32,594
Adjustments:
Non-cash stock-based compensation
expense(1)
2,113
2,923
10,399
10,031
Long-lived asset impairment(1)
443
—
540
—
Early extinguishment of debt (8)
—
614
—
614
Investments in new retail locations and
international market expansion(1)(2)
1,179
52
2,230
292
Transition to Cortec majority
ownership(1)(3)
—
—
—
750
Transition to the ongoing senior
management team(1)(4)
355
350
878
1,694
Transition to a public company(1)(5)
2,255
233
6,640
1,003
Tax impact of adjusting items(6)
(1,554)
(1,014)
(5,068)
(3,337)
Adjusted net income
$
26,093
$
20,188
$
61,311
$
43,641
Net income
$
21,302
$
17,030
$
45,692
$
32,594
Adjustments:
Interest expense
5,319
7,755
17,081
24,474
Income tax expense
7,080
3,125
14,824
7,161
Depreciation and amortization
expense(7)
7,419
6,333
21,220
18,218
Non-cash stock-based compensation
expense(1)
2,113
2,923
10,399
10,031
Long-lived asset impairment(1)
443
—
540
—
Early extinguishment of debt (8)
—
614
—
614
Investments in new retail locations and
international market expansion(1)(2)
1,179
52
2,230
292
Transition to Cortec majority
ownership(1)(3)
—
—
—
750
Transition to the ongoing senior
management team(1)(4)
355
350
878
1,694
Transition to a public company(1)(5)
2,255
233
6,640
1,003
Adjusted EBITDA
$
47,465
$
38,415
$
119,504
$
96,831
Net sales
$
229,125
$
196,109
$
616,132
$
537,654
Operating income as a % of net sales
14.8%
14.3%
12.6%
12.0%
Adjusted operating income as a % of net
sales
17.6%
16.2%
16.0%
14.6%
Net income as a % of net sales
9.3%
8.7%
7.4%
6.1%
Adjusted net income as a % of net
sales
11.4%
10.3%
10.0%
8.1%
Adjusted EBITDA as a % of net sales
20.7%
19.6%
19.4%
18.0%
Net income per diluted share
$
0.25
$
0.21
$
0.53
$
0.39
Adjusted net income per diluted share
$
0.30
$
0.24
$
0.71
$
0.53
Weighted average common shares outstanding
- diluted
86,373
82,924
86,152
82,946
_________________________ (1)
These costs are reported in SG&A
expenses.
(2)
Represents retail store pre-opening
expenses and costs for expansion into new international
markets.
(3)
Represents management service fees paid to
Cortec, our majority stockholder. The management services agreement
with Cortec was terminated immediately following the completion of
our initial public offering in October 2018.
(4)
Represents severance, recruiting, and
relocation costs related to the transition to our ongoing senior
management team.
(5)
Represents (i) fees and expenses in
connection with our transition to a public company, including
consulting fees, recruiting fees, salaries, and travel costs
related to members of our Board of Directors, fees associated with
Sarbanes-Oxley Act compliance, incremental audit and legal fees
associated with being a public company, and (ii) $1.5 million of
costs incurred in connection with our secondary offering in May
2019.
(6)
Represents the tax impact of adjustments
calculated at an expected statutory tax rate of 24.5% and 24.3% for
the three months ended September 28, 2019 and September 29, 2018,
respectively. For the nine months ended September 28, 2019 and
September 29, 2018, the tax rate used to calculate the tax impact
of adjustments was 24.5% and 23.2%, respectively.
(7)
Depreciation and amortization expenses are
reported in SG&A expenses and cost of goods sold.
(8)
Represents preliminary accelerated
amortization of deferred financing fees caused by early debt
paydown of the Credit Facility during the three months ended
September 29, 2018.
UPDATED 2019 OUTLOOK
Reconciliation of GAAP to
Non-GAAP Financial Information
(Unaudited)
(In thousands except per share
amounts)
Updated 2019 Outlook
Low
High
Operating income
$
124,421
$
127,030
Adjustments:
Non-cash stock-based compensation
expense(1)
11,818
11,818
Long-lived asset impairment(1)
540
540
Investments in new retail locations and
international market expansion(1)(2)
3,489
3,489
Transition to the ongoing senior
management team(1)(3)
878
878
Transition to a public company(1)(4)
8,529
8,529
Adjusted operating income
$
149,675
$
152,284
Net income
$
77,269
$
79,239
Adjustments:
Non-cash stock-based compensation
expense(1)
11,818
11,818
Long-lived asset impairment(1)
540
540
Investments in new retail locations and
international market expansion(1)(2)
3,489
3,489
Transition to the ongoing senior
management team(1)(3)
878
878
Transition to a public company(1)(4)
8,529
8,529
Tax impact of adjusting items(5)
(6,188)
(6,188)
Adjusted net income
$
96,335
$
98,305
Net income
$
77,269
$
79,239
Adjustments:
Interest expense
21,944
21,944
Income tax expense
25,017
25,655
Depreciation and amortization
expense(6)
28,763
29,063
Non-cash stock-based compensation
expense(1)
11,818
11,818
Long-lived asset impairment(1)
540
540
Investments in new retail locations and
international market expansion(1)(2)
3,489
3,489
Transition to the ongoing senior
management team(1)(3)
878
878
Transition to a public company(1)(4)
8,529
8,529
Adjusted EBITDA
$
178,247
$
181,155
Net sales
$
891,764
$
895,658
Operating income as a % of net sales
14.0%
14.2%
Adjusted operating income as a % of net
sales
16.8%
17.0%
Net income as a % of net sales
8.7%
8.8%
Adjusted net income as a % of net
sales
10.8%
11.0%
Adjusted EBITDA as a % of net sales
20.0%
20.2%
Net income per diluted share
$
0.90
$
0.92
Adjusted net income per diluted share
$
1.12
$
1.14
Weighted average common shares outstanding
- diluted
86,260
86,260
_________________________ (1)
These costs are reported in SG&A
expenses.
(2)
Represents retail store pre-opening
expenses and costs for expansion into new international
markets.
(3)
Represents severance, recruiting, and
relocation costs related to the transition to our ongoing senior
management team.
(4)
Represents (i) fees and expenses in
connection with our transition to a public company, including
consulting fees, recruiting fees, salaries, and travel costs
related to members of our Board of Directors, fees associated with
Sarbanes-Oxley Act compliance, incremental audit and legal fees
associated with being a public company, and (ii) $1.5 million of
costs incurred in connection with our secondary offering in May
2019.
(5)
Represents tax impact of adjustments
calculated at an expected statutory tax rate of 24.5%.
(6)
Depreciation and amortization expenses are
reported in SG&A expenses and cost of goods sold.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191031005297/en/
Investor Relations Contact: Tom Shaw, 512-271-6332
Investor.relations@yeti.com
Media Contact: YETI Holdings, Inc. Media Hotline
Media@yeti.com
YETI (NYSE:YETI)
Historical Stock Chart
From Apr 2024 to May 2024
YETI (NYSE:YETI)
Historical Stock Chart
From May 2023 to May 2024