Franchise Group, Inc. Provides Preliminary Third Quarter Operating Statistics, Third Quarter Earnings Release and Conference Call Scheduled for November 4, 2020
Based on a preliminary assessment, we expect to report:
- Revenue for the three months ended
September 26, 2020of at least $550.0 million.
- Revenue for the nine months ended
September 26, 2020of at least $1,655.0 million.
- Net income/(loss) for the three months ended
September 26, 2020of at least $(9.5) million.
- Net income for the nine months ended
September 26, 2020of at least $28.4 million.
- Adjusted EBITDA for the three months ended
September 26, 2020of at least $47.5 million.
- Adjusted EBITDA for the nine months ended
September 26, 2020of at least $194.5 million.
- Supplemental Information for the three months ended
September 26, 2020of at least $0.6 million.
- Supplemental Information for the nine months ended
September 26, 2020of at least $28.6 million.
- For the third quarter comparable same stores sales for American Freight were up approximately 15%, Buddy’s were up approximately 14.7% and The
Vitamin Shoppewere up approximately 8.6%.
In order to conform with
Conference Call Information
Non-GAAP Financial Measures and Key Metrics
Management defines and calculates Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization adjusted for certain non-core or non-operational items related to executive severance and related costs, stock-based compensation, shareholder litigation costs, corporate governance costs, accrued judgements and settlements, net of estimated revenue, store closures, rebranding costs, acquisition costs, inventory fair value step up amortization and prepayment penalty on early debt repayment.
Management believes the presentation of these measures is useful to investors as supplemental measures in evaluating the aggregate performance of our operating businesses and in comparing our results from period to period because they exclude items that we do not believe are reflective of our core or ongoing operating results. These measures are used by our management to evaluate performance and make resource allocation decisions each period. Adjusted EBITDA is also the primary operating metric used in the determination of executive management's compensation. Adjusted EBITDA should not be considered in isolation or as a substitute for net income or other income statement information prepared in accordance with GAAP and our presentation of these non-GAAP measures may not be comparable to similarly titled measures used by other companies.
The Supplemental Information is provided to reflect the estimated cost savings related to various management actions taken at our acquired businesses and other impacts of our acquisitions. The information primarily presents the realized and unrealized cost synergies assuming such actions were taken as of
Below is a reconciliation of management’s estimate of net income to estimated Adjusted EBITDA for the three months and nine months ended
|Three Months Ended
|Nine Months Ended
|Non-GAAP Reconciliation:||($ in millions)
|Interest expense, net||25.5||82.9|
|Income tax expense||–||(44.0)|
|Depreciation and Amortization||17.0||50.8|
|Adjustments to EBITDA|
|Executive severance and related costs||0.7||6.0|
|Stock based compensation||2.0||6.3|
|Shareholder litigation costs||0.2||0.5|
|Corporate governance costs||0.3||0.4|
|Accrued judgments and settlements||0.3||(0.8)|
|Inventory fair value step up amortization||7.0||35.2|
|Debt prepayment penalty||1.2||5.3|
|Total Adjustments to EBITDA||14.5||76.4|
|Three Months Ended
|Nine Months Ended
|Supplemental Information: Cost Synergies and Acquisition Impacts||($ in millions)|
|Estimated realized and unrealized costs savings||$||0.6||$||25.6|
|Other acquisition related compensation costs||0||3.0|
Preliminary Financial Information
The preliminary financial results and other information provided above are subject to the completion of the Company’s financial closing procedures, final adjustments and any other developments that may arise between now and the time the financial results for the third quarter of 2020 are finalized, including the impact of COVID-19 on the Company’s business. Therefore, this information represents management estimates that constitute forward-looking statements subject to risks and uncertainties. As a result, the preliminary financial results and other information described above may materially differ from the actual results that will be reflected in the consolidated financial statements for the quarter when they are completed and publicly disclosed. In addition, preliminary results for the third quarter are not necessarily indicative of operating results for any future quarter or results for the full year.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements of historical fact, including the Company’s expectations regarding its financial condition, its preliminary third quarter financial results, and the effects of the coronavirus (COVID-19) pandemic on economic conditions and the industry in general, and the financial position and operating results of the Company. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company or its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, many of which are beyond the control of the Company. We refer you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Transition Report on Form 10-K/T for the transition period ended
INVESTOR RELATIONS CONTACT:
EVP & Chief Administrative Officer
Source: Franchise Group, Inc.