Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries e.l.f. Beauty Announces Second Quarter Fiscal 2023 Results By: e.l.f. Beauty via Business Wire November 02, 2022 at 16:05 PM EDT – Delivered 33% Net Sales Growth – – Gained 115 Basis Points of Market Share – – Raises Fiscal 2023 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three and six months ended September 30, 2022. “I am proud of the e.l.f. Beauty team for delivering our 15th consecutive quarter of net sales growth, with Q2 up 33%,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “In the second quarter, e.l.f. was the fastest growing top 5 color cosmetics brand and we expanded our market share by 115 basis points, according to Nielsen. We believe our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth.” Three Months Ended September 30, 2022 Results For the three months ended September 30, 2022, compared to the three months ended September 30, 2021: Net sales increased 33% to $122.3 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 190 basis points to 65%, primarily driven by price increases, cost savings and product mix, partially offset by inventory adjustments and higher transportation costs. Selling, general and administrative expenses ("SG&A") increased $13.7 million to $64.2 million, or 52% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $11.0 million to $56.2 million, or 46% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend, and operations costs. The provision for income taxes was $1.6 million. Net income was $11.7 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $20.1 million. Diluted earnings per share were $0.21 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.36. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $27.3 million, or 22% of net sales, up 47% year over year. Six Months Ended September 30, 2022 Results For the six months ended September 30, 2022, compared to the six months ended September 30, 2021: Net sales increased 30% to $245.0 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 290 basis points to 66%, primarily driven by price increases, cost savings, and product mix, partially offset by inventory adjustments and higher transportation costs. SG&A increased $24.5 million to $125.7 million, or 51% of net sales. Adjusted SG&A increased $20.4 million to $111.2 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend and operations costs. The provision for income taxes was $6.3 million. Net income was $26.2 million on a GAAP basis. Adjusted net income was $41.2 million. Diluted earnings per share were $0.48 on a GAAP basis. Adjusted diluted earnings per share were $0.76. Adjusted EBITDA was $58.9 million, or 24% of net sales, up 47% year over year. Balance Sheet As of September 30, 2022, the Company had $85.3 million in cash and cash equivalents and $88.3 million in long-term debt and finance lease obligations, as compared to $41.7 million in cash and cash equivalents and $93.9 million of long-term debt and finance lease obligations as of September 30, 2021. Updated Fiscal 2023 Outlook The Company is providing the following updated outlook for fiscal 2023. The updated outlook for fiscal 2023 reflects an expected 22-24% year-over-year increase in net sales, as compared to an expected 14-16% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $478-486 million $448-456 million Adjusted EBITDA $93.5-95.0 million $83.5-85.0 million Adjusted effective tax rate 22-23% 25-26% Adjusted net income $59.0-60.5 million $47.0-48.5 million Adjusted diluted earnings per share $1.07-1.10 $0.84-0.87 Fiscal year ending diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its second quarter fiscal 2023 today, November 2, 2022, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events. For those unable to listen to the live broadcast, an archived version will be available at the same location. About e.l.f. Beauty e.l.f. Beauty, Inc. builds brands designed to disrupt industry norms, shape culture and connect communities through positivity, inclusivity and accessibility. Our deep commitment to clean, cruelty free beauty at an incredible value has fueled the success of our flagship brand e.l.f. Cosmetics since 2004 and driven our portfolio expansion. Today, our multi-brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, pioneering clean beauty brand Well People and Keys Soulcare, a groundbreaking lifestyle beauty brand created with Alicia Keys. Our family of brands is available online and across leading beauty, mass market and clean beauty specialty retailers in the U.S., and has a growing international presence. Learn more by visiting investor.elfbeauty.com. Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. Adjusted SG&A excludes costs related to stock-based compensation and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare and third-party costs related to M&A due diligence. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of costs or gains related to restructuring of operations, stock-based compensation, other non-cash and non-recurring items, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred. Adjusted net income excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt, other non-cash and non-recurring items, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-cash or non-recurring items, which historically include other legal settlements, pre-launch costs to develop the Company’s brand and third-party costs related to M&A due diligence. With respect to the Company’s expectations under “Updated Fiscal 2023 Outlook” above, the Company is not able to provide a quantitative reconciliation of the adjusted EBITDA, adjusted net income and adjusted diluted earnings per share guidance non-GAAP measures to the corresponding net income and diluted earnings per share GAAP measures without unreasonable efforts. The Company cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to the forward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company's outlook for fiscal 2023 under “Updated Fiscal 2023 Outlook” above and those statements that our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the Company’s ability to effectively compete with other beauty companies; the Company’s ability to successfully introduce new products; the Company’s ability to attract new retail customers and/or expand business with its existing retail customers; the Company’s ability to optimize shelf space at its key retail customers; the loss of any of the Company’s key retail customers or if the general business performance of its key retail customers declines; the Company’s ability to effectively manage its SG&A and other expenses; and the uncertainty regarding the impact of the COVID-19 pandemic. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of operations and comprehensive income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net sales $ 122,349 $ 91,855 $ 244,950 $ 188,902 Cost of sales 42,789 33,870 82,405 69,011 Gross profit 79,560 57,985 162,545 119,891 Selling, general and administrative expenses 64,183 50,447 125,738 101,196 Restructuring expense — 96 — 82 Operating income 15,377 7,442 36,807 18,613 Other expense, net (1,262 ) (646 ) (2,925 ) (808 ) Interest expense, net (786 ) (597 ) (1,449 ) (1,342 ) Loss on extinguishment of debt — — — (460 ) Income before provision for income taxes 13,329 6,199 32,433 16,003 Income tax provision (1,619 ) (475 ) (6,254 ) (2,003 ) Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Comprehensive income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Net income per share: Basic $ 0.22 $ 0.11 $ 0.50 $ 0.28 Diluted $ 0.21 $ 0.11 $ 0.48 $ 0.26 Weighted average shares outstanding: Basic 52,298,905 50,875,618 52,004,661 50,711,000 Diluted 55,037,514 53,541,724 54,437,752 53,475,988 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) September 30, 2022 March 31, 2022 September 30, 2021 Assets Current assets: Cash and cash equivalents $ 85,317 $ 43,353 $ 41,694 Accounts receivable, net 53,912 45,567 44,374 Inventory, net 81,288 84,498 76,816 Prepaid expenses and other current assets 26,881 19,611 18,420 Total current assets 247,398 193,029 181,304 Property and equipment, net 8,934 10,577 13,945 Intangible assets, net 82,101 86,163 90,225 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,213 30,368 33,043 Total assets $ 542,141 $ 494,632 $ 493,012 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,801 $ 5,786 $ 19,254 Accounts payable 19,279 19,227 19,299 Accrued expenses and other current liabilities 46,868 40,004 32,665 Total current liabilities 71,948 65,017 71,218 Long-term debt and finance lease obligations 88,284 91,080 93,865 Deferred tax liabilities 10,635 9,593 15,114 Long-term operating lease obligations 13,440 15,744 17,919 Other long-term liabilities 874 769 803 Total liabilities 185,181 182,203 198,919 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of September 30, 2022, March 31, 2022 and September 30, 2021; 52,896,411, 52,243,764 and 52,035,864 shares issued and outstanding as of September 30, 2022, March 31, 2022 and September 30, 2021, respectively 525 515 511 Additional paid-in capital 813,785 795,443 784,881 Accumulated deficit (457,350 ) (483,529 ) (491,299 ) Total stockholders' equity 356,960 312,429 294,093 Total liabilities and stockholders' equity $ 542,141 $ 494,632 $ 493,012 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Six months ended September 30, 2022 2021 Cash flows from operating activities: Net income $ 26,179 $ 14,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,075 13,349 Restructuring expense — 82 Stock-based compensation expense 14,576 9,387 Amortization of debt issuance costs and discount on debt 181 211 Deferred income taxes 1,042 1,635 Loss on extinguishment of debt — 460 Other, net (24 ) 257 Changes in operating assets and liabilities: Accounts receivable (8,301 ) (4,374 ) Inventories 3,210 (19,958 ) Prepaid expenses and other assets (9,555 ) (6,379 ) Accounts payable and accrued expenses 6,798 (5,878 ) Other liabilities (2,135 ) (2,018 ) Net cash provided by operating activities 43,046 774 Cash flows from investing activities: Purchase of property and equipment (694 ) (3,649 ) Net cash used in investing activities (694 ) (3,649 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Repayment of revolving line of credit — (13,000 ) Proceeds from long-term debt — 25,581 Repayment of long-term debt (2,500 ) (52,025 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2,503 1,224 Other, net (391 ) (395 ) Net cash used in financing activities (388 ) (13,199 ) Net increase in cash and cash equivalents 41,964 (16,074 ) Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 85,317 $ 41,694 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Interest expense, net 786 597 1,449 1,342 Income tax provision 1,619 475 6,254 2,003 Depreciation and amortization 4,320 5,908 9,013 11,029 EBITDA $ 18,435 $ 12,704 $ 42,895 $ 28,374 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Loss on extinguishment of debt (b) — — — 460 Other non-cash and non-recurring items (c) 786 588 1,465 1,890 Adjusted EBITDA $ 27,253 $ 18,495 $ 58,936 $ 40,193 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (c) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Selling, general and administrative expenses $ 64,183 $ 50,447 $ 125,738 $ 101,196 Stock-based compensation (8,022 ) (5,033 ) (14,571 ) (9,223 ) Other non-cash and non-recurring items (a) — (240 ) — (1,237 ) Adjusted selling, general and administrative expenses $ 56,161 $ 45,174 $ 111,167 $ 90,736 (a) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted net income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Other non-cash and non-recurring items (b) — 240 — 1,237 Loss on extinguishment of debt (c) — — — 460 Amortization of acquired intangible assets (d) 2,031 2,031 4,062 4,062 Tax Impact (e) (1,718 ) (1,931 ) (3,635 ) (3,676 ) Adjusted net income $ 20,055 $ 11,267 $ 41,182 $ 25,552 Weighted average number of shares outstanding – diluted 55,037,514 53,541,724 54,437,752 53,475,988 Adjusted diluted earnings per share $ 0.36 $ 0.21 $ 0.76 $ 0.48 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. (c) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (d) Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks. (e) Represents the tax impact of the above adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005693/en/Contacts Investors: KC Katten VP, Corporate Development & Investor Relations, e.l.f. Beauty KKatten@elfbeauty.com Media: Melinda Fried Head of Corporate Communications, e.l.f. Beauty mfried@elfbeauty.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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e.l.f. Beauty Announces Second Quarter Fiscal 2023 Results By: e.l.f. Beauty via Business Wire November 02, 2022 at 16:05 PM EDT – Delivered 33% Net Sales Growth – – Gained 115 Basis Points of Market Share – – Raises Fiscal 2023 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three and six months ended September 30, 2022. “I am proud of the e.l.f. Beauty team for delivering our 15th consecutive quarter of net sales growth, with Q2 up 33%,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “In the second quarter, e.l.f. was the fastest growing top 5 color cosmetics brand and we expanded our market share by 115 basis points, according to Nielsen. We believe our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth.” Three Months Ended September 30, 2022 Results For the three months ended September 30, 2022, compared to the three months ended September 30, 2021: Net sales increased 33% to $122.3 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 190 basis points to 65%, primarily driven by price increases, cost savings and product mix, partially offset by inventory adjustments and higher transportation costs. Selling, general and administrative expenses ("SG&A") increased $13.7 million to $64.2 million, or 52% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $11.0 million to $56.2 million, or 46% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend, and operations costs. The provision for income taxes was $1.6 million. Net income was $11.7 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $20.1 million. Diluted earnings per share were $0.21 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.36. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $27.3 million, or 22% of net sales, up 47% year over year. Six Months Ended September 30, 2022 Results For the six months ended September 30, 2022, compared to the six months ended September 30, 2021: Net sales increased 30% to $245.0 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 290 basis points to 66%, primarily driven by price increases, cost savings, and product mix, partially offset by inventory adjustments and higher transportation costs. SG&A increased $24.5 million to $125.7 million, or 51% of net sales. Adjusted SG&A increased $20.4 million to $111.2 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend and operations costs. The provision for income taxes was $6.3 million. Net income was $26.2 million on a GAAP basis. Adjusted net income was $41.2 million. Diluted earnings per share were $0.48 on a GAAP basis. Adjusted diluted earnings per share were $0.76. Adjusted EBITDA was $58.9 million, or 24% of net sales, up 47% year over year. Balance Sheet As of September 30, 2022, the Company had $85.3 million in cash and cash equivalents and $88.3 million in long-term debt and finance lease obligations, as compared to $41.7 million in cash and cash equivalents and $93.9 million of long-term debt and finance lease obligations as of September 30, 2021. Updated Fiscal 2023 Outlook The Company is providing the following updated outlook for fiscal 2023. The updated outlook for fiscal 2023 reflects an expected 22-24% year-over-year increase in net sales, as compared to an expected 14-16% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $478-486 million $448-456 million Adjusted EBITDA $93.5-95.0 million $83.5-85.0 million Adjusted effective tax rate 22-23% 25-26% Adjusted net income $59.0-60.5 million $47.0-48.5 million Adjusted diluted earnings per share $1.07-1.10 $0.84-0.87 Fiscal year ending diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its second quarter fiscal 2023 today, November 2, 2022, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events. For those unable to listen to the live broadcast, an archived version will be available at the same location. About e.l.f. Beauty e.l.f. Beauty, Inc. builds brands designed to disrupt industry norms, shape culture and connect communities through positivity, inclusivity and accessibility. Our deep commitment to clean, cruelty free beauty at an incredible value has fueled the success of our flagship brand e.l.f. Cosmetics since 2004 and driven our portfolio expansion. Today, our multi-brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, pioneering clean beauty brand Well People and Keys Soulcare, a groundbreaking lifestyle beauty brand created with Alicia Keys. Our family of brands is available online and across leading beauty, mass market and clean beauty specialty retailers in the U.S., and has a growing international presence. Learn more by visiting investor.elfbeauty.com. Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. Adjusted SG&A excludes costs related to stock-based compensation and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare and third-party costs related to M&A due diligence. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of costs or gains related to restructuring of operations, stock-based compensation, other non-cash and non-recurring items, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred. Adjusted net income excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt, other non-cash and non-recurring items, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-cash or non-recurring items, which historically include other legal settlements, pre-launch costs to develop the Company’s brand and third-party costs related to M&A due diligence. With respect to the Company’s expectations under “Updated Fiscal 2023 Outlook” above, the Company is not able to provide a quantitative reconciliation of the adjusted EBITDA, adjusted net income and adjusted diluted earnings per share guidance non-GAAP measures to the corresponding net income and diluted earnings per share GAAP measures without unreasonable efforts. The Company cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to the forward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company's outlook for fiscal 2023 under “Updated Fiscal 2023 Outlook” above and those statements that our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the Company’s ability to effectively compete with other beauty companies; the Company’s ability to successfully introduce new products; the Company’s ability to attract new retail customers and/or expand business with its existing retail customers; the Company’s ability to optimize shelf space at its key retail customers; the loss of any of the Company’s key retail customers or if the general business performance of its key retail customers declines; the Company’s ability to effectively manage its SG&A and other expenses; and the uncertainty regarding the impact of the COVID-19 pandemic. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of operations and comprehensive income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net sales $ 122,349 $ 91,855 $ 244,950 $ 188,902 Cost of sales 42,789 33,870 82,405 69,011 Gross profit 79,560 57,985 162,545 119,891 Selling, general and administrative expenses 64,183 50,447 125,738 101,196 Restructuring expense — 96 — 82 Operating income 15,377 7,442 36,807 18,613 Other expense, net (1,262 ) (646 ) (2,925 ) (808 ) Interest expense, net (786 ) (597 ) (1,449 ) (1,342 ) Loss on extinguishment of debt — — — (460 ) Income before provision for income taxes 13,329 6,199 32,433 16,003 Income tax provision (1,619 ) (475 ) (6,254 ) (2,003 ) Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Comprehensive income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Net income per share: Basic $ 0.22 $ 0.11 $ 0.50 $ 0.28 Diluted $ 0.21 $ 0.11 $ 0.48 $ 0.26 Weighted average shares outstanding: Basic 52,298,905 50,875,618 52,004,661 50,711,000 Diluted 55,037,514 53,541,724 54,437,752 53,475,988 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) September 30, 2022 March 31, 2022 September 30, 2021 Assets Current assets: Cash and cash equivalents $ 85,317 $ 43,353 $ 41,694 Accounts receivable, net 53,912 45,567 44,374 Inventory, net 81,288 84,498 76,816 Prepaid expenses and other current assets 26,881 19,611 18,420 Total current assets 247,398 193,029 181,304 Property and equipment, net 8,934 10,577 13,945 Intangible assets, net 82,101 86,163 90,225 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,213 30,368 33,043 Total assets $ 542,141 $ 494,632 $ 493,012 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,801 $ 5,786 $ 19,254 Accounts payable 19,279 19,227 19,299 Accrued expenses and other current liabilities 46,868 40,004 32,665 Total current liabilities 71,948 65,017 71,218 Long-term debt and finance lease obligations 88,284 91,080 93,865 Deferred tax liabilities 10,635 9,593 15,114 Long-term operating lease obligations 13,440 15,744 17,919 Other long-term liabilities 874 769 803 Total liabilities 185,181 182,203 198,919 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of September 30, 2022, March 31, 2022 and September 30, 2021; 52,896,411, 52,243,764 and 52,035,864 shares issued and outstanding as of September 30, 2022, March 31, 2022 and September 30, 2021, respectively 525 515 511 Additional paid-in capital 813,785 795,443 784,881 Accumulated deficit (457,350 ) (483,529 ) (491,299 ) Total stockholders' equity 356,960 312,429 294,093 Total liabilities and stockholders' equity $ 542,141 $ 494,632 $ 493,012 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Six months ended September 30, 2022 2021 Cash flows from operating activities: Net income $ 26,179 $ 14,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,075 13,349 Restructuring expense — 82 Stock-based compensation expense 14,576 9,387 Amortization of debt issuance costs and discount on debt 181 211 Deferred income taxes 1,042 1,635 Loss on extinguishment of debt — 460 Other, net (24 ) 257 Changes in operating assets and liabilities: Accounts receivable (8,301 ) (4,374 ) Inventories 3,210 (19,958 ) Prepaid expenses and other assets (9,555 ) (6,379 ) Accounts payable and accrued expenses 6,798 (5,878 ) Other liabilities (2,135 ) (2,018 ) Net cash provided by operating activities 43,046 774 Cash flows from investing activities: Purchase of property and equipment (694 ) (3,649 ) Net cash used in investing activities (694 ) (3,649 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Repayment of revolving line of credit — (13,000 ) Proceeds from long-term debt — 25,581 Repayment of long-term debt (2,500 ) (52,025 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2,503 1,224 Other, net (391 ) (395 ) Net cash used in financing activities (388 ) (13,199 ) Net increase in cash and cash equivalents 41,964 (16,074 ) Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 85,317 $ 41,694 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Interest expense, net 786 597 1,449 1,342 Income tax provision 1,619 475 6,254 2,003 Depreciation and amortization 4,320 5,908 9,013 11,029 EBITDA $ 18,435 $ 12,704 $ 42,895 $ 28,374 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Loss on extinguishment of debt (b) — — — 460 Other non-cash and non-recurring items (c) 786 588 1,465 1,890 Adjusted EBITDA $ 27,253 $ 18,495 $ 58,936 $ 40,193 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (c) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Selling, general and administrative expenses $ 64,183 $ 50,447 $ 125,738 $ 101,196 Stock-based compensation (8,022 ) (5,033 ) (14,571 ) (9,223 ) Other non-cash and non-recurring items (a) — (240 ) — (1,237 ) Adjusted selling, general and administrative expenses $ 56,161 $ 45,174 $ 111,167 $ 90,736 (a) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted net income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Other non-cash and non-recurring items (b) — 240 — 1,237 Loss on extinguishment of debt (c) — — — 460 Amortization of acquired intangible assets (d) 2,031 2,031 4,062 4,062 Tax Impact (e) (1,718 ) (1,931 ) (3,635 ) (3,676 ) Adjusted net income $ 20,055 $ 11,267 $ 41,182 $ 25,552 Weighted average number of shares outstanding – diluted 55,037,514 53,541,724 54,437,752 53,475,988 Adjusted diluted earnings per share $ 0.36 $ 0.21 $ 0.76 $ 0.48 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. (c) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (d) Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks. (e) Represents the tax impact of the above adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005693/en/Contacts Investors: KC Katten VP, Corporate Development & Investor Relations, e.l.f. Beauty KKatten@elfbeauty.com Media: Melinda Fried Head of Corporate Communications, e.l.f. Beauty mfried@elfbeauty.com
– Delivered 33% Net Sales Growth – – Gained 115 Basis Points of Market Share – – Raises Fiscal 2023 Outlook –
e.l.f. Beauty (NYSE: ELF) today announced results for the three and six months ended September 30, 2022. “I am proud of the e.l.f. Beauty team for delivering our 15th consecutive quarter of net sales growth, with Q2 up 33%,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “In the second quarter, e.l.f. was the fastest growing top 5 color cosmetics brand and we expanded our market share by 115 basis points, according to Nielsen. We believe our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth.” Three Months Ended September 30, 2022 Results For the three months ended September 30, 2022, compared to the three months ended September 30, 2021: Net sales increased 33% to $122.3 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 190 basis points to 65%, primarily driven by price increases, cost savings and product mix, partially offset by inventory adjustments and higher transportation costs. Selling, general and administrative expenses ("SG&A") increased $13.7 million to $64.2 million, or 52% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $11.0 million to $56.2 million, or 46% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend, and operations costs. The provision for income taxes was $1.6 million. Net income was $11.7 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $20.1 million. Diluted earnings per share were $0.21 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.36. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $27.3 million, or 22% of net sales, up 47% year over year. Six Months Ended September 30, 2022 Results For the six months ended September 30, 2022, compared to the six months ended September 30, 2021: Net sales increased 30% to $245.0 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 290 basis points to 66%, primarily driven by price increases, cost savings, and product mix, partially offset by inventory adjustments and higher transportation costs. SG&A increased $24.5 million to $125.7 million, or 51% of net sales. Adjusted SG&A increased $20.4 million to $111.2 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits, marketing and digital spend and operations costs. The provision for income taxes was $6.3 million. Net income was $26.2 million on a GAAP basis. Adjusted net income was $41.2 million. Diluted earnings per share were $0.48 on a GAAP basis. Adjusted diluted earnings per share were $0.76. Adjusted EBITDA was $58.9 million, or 24% of net sales, up 47% year over year. Balance Sheet As of September 30, 2022, the Company had $85.3 million in cash and cash equivalents and $88.3 million in long-term debt and finance lease obligations, as compared to $41.7 million in cash and cash equivalents and $93.9 million of long-term debt and finance lease obligations as of September 30, 2021. Updated Fiscal 2023 Outlook The Company is providing the following updated outlook for fiscal 2023. The updated outlook for fiscal 2023 reflects an expected 22-24% year-over-year increase in net sales, as compared to an expected 14-16% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $478-486 million $448-456 million Adjusted EBITDA $93.5-95.0 million $83.5-85.0 million Adjusted effective tax rate 22-23% 25-26% Adjusted net income $59.0-60.5 million $47.0-48.5 million Adjusted diluted earnings per share $1.07-1.10 $0.84-0.87 Fiscal year ending diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its second quarter fiscal 2023 today, November 2, 2022, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events. For those unable to listen to the live broadcast, an archived version will be available at the same location. About e.l.f. Beauty e.l.f. Beauty, Inc. builds brands designed to disrupt industry norms, shape culture and connect communities through positivity, inclusivity and accessibility. Our deep commitment to clean, cruelty free beauty at an incredible value has fueled the success of our flagship brand e.l.f. Cosmetics since 2004 and driven our portfolio expansion. Today, our multi-brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, pioneering clean beauty brand Well People and Keys Soulcare, a groundbreaking lifestyle beauty brand created with Alicia Keys. Our family of brands is available online and across leading beauty, mass market and clean beauty specialty retailers in the U.S., and has a growing international presence. Learn more by visiting investor.elfbeauty.com. Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation. Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. Adjusted SG&A excludes costs related to stock-based compensation and other non-cash and non-recurring items. Such other non-cash or non-recurring items historically include other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare and third-party costs related to M&A due diligence. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of costs or gains related to restructuring of operations, stock-based compensation, other non-cash and non-recurring items, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred. Adjusted net income excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt, other non-cash and non-recurring items, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-cash or non-recurring items, which historically include other legal settlements, pre-launch costs to develop the Company’s brand and third-party costs related to M&A due diligence. With respect to the Company’s expectations under “Updated Fiscal 2023 Outlook” above, the Company is not able to provide a quantitative reconciliation of the adjusted EBITDA, adjusted net income and adjusted diluted earnings per share guidance non-GAAP measures to the corresponding net income and diluted earnings per share GAAP measures without unreasonable efforts. The Company cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to the forward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company's outlook for fiscal 2023 under “Updated Fiscal 2023 Outlook” above and those statements that our value proposition, innovation engine, and ability to attract and engage consumers will continue to fuel our growth. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the Company’s ability to effectively compete with other beauty companies; the Company’s ability to successfully introduce new products; the Company’s ability to attract new retail customers and/or expand business with its existing retail customers; the Company’s ability to optimize shelf space at its key retail customers; the loss of any of the Company’s key retail customers or if the general business performance of its key retail customers declines; the Company’s ability to effectively manage its SG&A and other expenses; and the uncertainty regarding the impact of the COVID-19 pandemic. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of operations and comprehensive income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net sales $ 122,349 $ 91,855 $ 244,950 $ 188,902 Cost of sales 42,789 33,870 82,405 69,011 Gross profit 79,560 57,985 162,545 119,891 Selling, general and administrative expenses 64,183 50,447 125,738 101,196 Restructuring expense — 96 — 82 Operating income 15,377 7,442 36,807 18,613 Other expense, net (1,262 ) (646 ) (2,925 ) (808 ) Interest expense, net (786 ) (597 ) (1,449 ) (1,342 ) Loss on extinguishment of debt — — — (460 ) Income before provision for income taxes 13,329 6,199 32,433 16,003 Income tax provision (1,619 ) (475 ) (6,254 ) (2,003 ) Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Comprehensive income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Net income per share: Basic $ 0.22 $ 0.11 $ 0.50 $ 0.28 Diluted $ 0.21 $ 0.11 $ 0.48 $ 0.26 Weighted average shares outstanding: Basic 52,298,905 50,875,618 52,004,661 50,711,000 Diluted 55,037,514 53,541,724 54,437,752 53,475,988 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) September 30, 2022 March 31, 2022 September 30, 2021 Assets Current assets: Cash and cash equivalents $ 85,317 $ 43,353 $ 41,694 Accounts receivable, net 53,912 45,567 44,374 Inventory, net 81,288 84,498 76,816 Prepaid expenses and other current assets 26,881 19,611 18,420 Total current assets 247,398 193,029 181,304 Property and equipment, net 8,934 10,577 13,945 Intangible assets, net 82,101 86,163 90,225 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,213 30,368 33,043 Total assets $ 542,141 $ 494,632 $ 493,012 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,801 $ 5,786 $ 19,254 Accounts payable 19,279 19,227 19,299 Accrued expenses and other current liabilities 46,868 40,004 32,665 Total current liabilities 71,948 65,017 71,218 Long-term debt and finance lease obligations 88,284 91,080 93,865 Deferred tax liabilities 10,635 9,593 15,114 Long-term operating lease obligations 13,440 15,744 17,919 Other long-term liabilities 874 769 803 Total liabilities 185,181 182,203 198,919 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of September 30, 2022, March 31, 2022 and September 30, 2021; 52,896,411, 52,243,764 and 52,035,864 shares issued and outstanding as of September 30, 2022, March 31, 2022 and September 30, 2021, respectively 525 515 511 Additional paid-in capital 813,785 795,443 784,881 Accumulated deficit (457,350 ) (483,529 ) (491,299 ) Total stockholders' equity 356,960 312,429 294,093 Total liabilities and stockholders' equity $ 542,141 $ 494,632 $ 493,012 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Six months ended September 30, 2022 2021 Cash flows from operating activities: Net income $ 26,179 $ 14,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,075 13,349 Restructuring expense — 82 Stock-based compensation expense 14,576 9,387 Amortization of debt issuance costs and discount on debt 181 211 Deferred income taxes 1,042 1,635 Loss on extinguishment of debt — 460 Other, net (24 ) 257 Changes in operating assets and liabilities: Accounts receivable (8,301 ) (4,374 ) Inventories 3,210 (19,958 ) Prepaid expenses and other assets (9,555 ) (6,379 ) Accounts payable and accrued expenses 6,798 (5,878 ) Other liabilities (2,135 ) (2,018 ) Net cash provided by operating activities 43,046 774 Cash flows from investing activities: Purchase of property and equipment (694 ) (3,649 ) Net cash used in investing activities (694 ) (3,649 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Repayment of revolving line of credit — (13,000 ) Proceeds from long-term debt — 25,581 Repayment of long-term debt (2,500 ) (52,025 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2,503 1,224 Other, net (391 ) (395 ) Net cash used in financing activities (388 ) (13,199 ) Net increase in cash and cash equivalents 41,964 (16,074 ) Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 85,317 $ 41,694 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Interest expense, net 786 597 1,449 1,342 Income tax provision 1,619 475 6,254 2,003 Depreciation and amortization 4,320 5,908 9,013 11,029 EBITDA $ 18,435 $ 12,704 $ 42,895 $ 28,374 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Loss on extinguishment of debt (b) — — — 460 Other non-cash and non-recurring items (c) 786 588 1,465 1,890 Adjusted EBITDA $ 27,253 $ 18,495 $ 58,936 $ 40,193 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (c) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, third-party costs related to M&A due diligence, and amortization of internal-use software costs related to cloud applications. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Selling, general and administrative expenses $ 64,183 $ 50,447 $ 125,738 $ 101,196 Stock-based compensation (8,022 ) (5,033 ) (14,571 ) (9,223 ) Other non-cash and non-recurring items (a) — (240 ) — (1,237 ) Adjusted selling, general and administrative expenses $ 56,161 $ 45,174 $ 111,167 $ 90,736 (a) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted net income (unaudited) (in thousands, except share and per share data) Three months ended September 30, Six months ended September 30, 2022 2021 2022 2021 Net income $ 11,710 $ 5,724 $ 26,179 $ 14,000 Restructuring expense (a) — 96 — 82 Stock-based compensation 8,032 5,107 14,576 9,387 Other non-cash and non-recurring items (b) — 240 — 1,237 Loss on extinguishment of debt (c) — — — 460 Amortization of acquired intangible assets (d) 2,031 2,031 4,062 4,062 Tax Impact (e) (1,718 ) (1,931 ) (3,635 ) (3,676 ) Adjusted net income $ 20,055 $ 11,267 $ 41,182 $ 25,552 Weighted average number of shares outstanding – diluted 55,037,514 53,541,724 54,437,752 53,475,988 Adjusted diluted earnings per share $ 0.36 $ 0.21 $ 0.76 $ 0.48 (a) Restructuring expense during the three and six months ended September 30, 2021, relates to the closure of the Company’s manufacturing plant, including impairment of assets, the disposal of excess inventory on hand at the plant, the termination of manufacturing employees and sub lease income. (b) Represents various non-cash or non-recurring items, which historically include legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, and third-party costs related to M&A due diligence. (c) Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. (d) Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks. (e) Represents the tax impact of the above adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005693/en/
Investors: KC Katten VP, Corporate Development & Investor Relations, e.l.f. Beauty KKatten@elfbeauty.com Media: Melinda Fried Head of Corporate Communications, e.l.f. Beauty mfried@elfbeauty.com