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 First Quarter Fiscal 2023 Results By: e.l.f. Beauty via Business Wire August 03, 2022 at 16:05 PM EDT – Delivered 26% Net Sales Growth – – Gained 120 Basis Points of Market Share – – Raises Fiscal 2023 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three months ended June 30, 2022. “I am proud of the e.l.f. Beauty team for achieving our fourteenth consecutive quarter of net sales growth,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “We continue to significantly outperform our competition. In the first quarter, we were the fastest growing top 5 color cosmetics brand and expanded our market share by 120 basis points, according to Nielsen. We are continuing to lean into our strengths—our core value proposition, innovation engine, and ability to attract and engage consumers—and are pleased to raise our Fiscal 2023 outlook.” Three Months Ended June 30, 2022 Results For the three months ended June 30, 2022, compared to the three months ended June 30, 2021: Net sales increased 26% to $122.6 million, primarily driven by strength in our national and international retailers. Gross margin increased approximately 390 basis points to 68%, primarily driven by price increases, cost savings, and product mix, which helped to mitigate the impact of higher transportation costs in the quarter. Selling, general and administrative expenses ("SG&A") increased $10.8 million to $61.6 million or 50% of net sales. Adjusted SG&A increased $9.4 million to $55.0 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits and marketing and digital spend. The provision for income taxes was $4.6 million. Net income was $14.5 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $21.1 million. Diluted earnings per share were $0.27 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 $0.39. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $31.7 million, or 26% of net sales, up 46% year over year. Balance Sheet As of June 30, 2022, the Company had $72.2 million in cash and cash equivalents and $89.7 million in long-term debt and finance lease obligations, as compared to $63.4 million in cash and cash equivalents and $95.3 million of long-term debt and finance lease obligations as of June 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 14-16% year-over-year increase in net sales, as compared to an expected 10-12% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $448-456 million $432-440 million Adjusted EBITDA $83.5-85.0 million $80.5-82.0 million Adjusted effective tax rate 25-26% 27-28% Adjusted net income $47.0-48.5 million $43.5-45.5 million Adjusted diluted earnings per share $0.84-0.87 $0.78-0.81 Weighted average diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its first quarter fiscal 2023 today, August 3, 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 the Company is continuing to lean into its strengths—its core value proposition, innovation engine, and ability to attract and engage consumers. 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 June 30, 2022 2021 Net sales $ 122,601 $ 97,047 Cost of sales 39,616 35,141 Gross profit 82,985 61,906 Selling, general and administrative expenses 61,555 50,749 Restructuring income — (14 ) Operating income 21,430 11,171 Other expense, net (1,663 ) (162 ) Interest expense, net (663 ) (745 ) Loss on extinguishment of debt — (460 ) Income before provision for income taxes 19,104 9,804 Income tax provision (4,635 ) (1,528 ) Net income $ 14,469 $ 8,276 Comprehensive income $ 14,469 $ 8,276 Net income per share: Basic $ 0.28 $ 0.16 Diluted $ 0.27 $ 0.15 Weighted average shares outstanding: Basic 51,707,160 50,544,573 Diluted 53,834,732 53,408,443 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) June 30, 2022 March 31, 2022 June 30, 2021 Assets Current assets: Cash and cash equivalents $ 72,248 $ 43,353 $ 63,402 Accounts receivable, net 52,281 45,567 43,127 Inventory, net 70,339 84,498 54,528 Prepaid expenses and other current assets 21,772 19,611 21,674 Total current assets 216,640 193,029 182,731 Property and equipment, net 9,339 10,577 15,561 Intangible assets, net 84,132 86,163 92,256 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,251 30,368 33,349 Total assets $ 513,857 $ 494,632 $ 498,392 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,793 $ 5,786 $ 32,247 Accounts payable 16,023 19,227 17,113 Accrued expenses and other current liabilities 39,916 40,004 33,617 Total current liabilities 61,732 65,017 82,977 Long-term debt and finance lease obligations 89,684 91,080 95,254 Deferred tax liabilities 13,538 9,593 17,750 Long-term operating lease obligations 14,637 15,744 19,053 Other long-term liabilities 817 769 736 Total liabilities 180,408 182,203 215,770 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of June 30, 2022, March 31, 2022 and June 30, 2021; 52,424,445, 52,243,764 and 51,826,156 shares issued and outstanding as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively 517 515 508 Additional paid-in capital 801,992 795,443 779,137 Accumulated deficit (469,060 ) (483,529 ) (497,023 ) Total stockholders' equity 333,449 312,429 282,622 Total liabilities and stockholders' equity $ 513,857 $ 494,632 $ 498,392 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Three months ended June 30, 2022 2021 Cash flows from operating activities: Net income $ 14,469 $ 8,276 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,724 6,222 Restructuring income — (14 ) Stock-based compensation expense 6,542 4,280 Amortization of debt issuance costs and discount on debt 91 118 Deferred income taxes 3,945 4,271 Loss on extinguishment of debt — 460 Other, net 21 97 Changes in operating assets and liabilities: Accounts receivable (6,727 ) (2,971 ) Inventories 14,158 2,320 Prepaid expenses and other assets (3,258 ) (7,131 ) Accounts payable and accrued expenses (3,442 ) (7,419 ) Other liabilities (945 ) (1,017 ) Net cash provided by operating activities 30,578 7,492 Cash flows from investing activities: Purchase of property and equipment (241 ) (2,336 ) Net cash used in investing activities (241 ) (2,336 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Proceeds from long-term debt — 25,581 Repayment of long-term debt (1,250 ) (50,775 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2 463 Other, net (194 ) (207 ) Net cash (used in) provided by financing activities (1,442 ) 478 Net increase in cash and cash equivalents 28,895 5,634 Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 72,248 $ 63,402 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended June 30, 2022 2021 Net income $ 14,469 $ 8,276 Interest expense, net 663 745 Income tax provision 4,635 1,528 Depreciation and amortization 4,693 5,121 EBITDA $ 24,460 $ 15,670 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Loss on extinguishment of debt (b) — 460 Other non-cash and non-recurring items (c) 679 1,302 Adjusted EBITDA $ 31,681 $ 21,698 (a) Restructuring income during the three months ended June 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 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. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended June 30, 2022 2021 Selling, general and administrative expenses $ 61,555 $ 50,749 Stock-based compensation (6,549 ) (4,190 ) Other non-cash and non-recurring items (a) — (997 ) Adjusted selling, general and administrative expenses $ 55,006 $ 45,562 (a) Represents various non-cash or non-recurring items, which 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. 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 June 30, 2022 2021 Net income $ 14,469 $ 8,276 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Other non-cash and non-recurring items (b) — 997 Loss on extinguishment of debt (c) — 460 Amortization of acquired intangible assets (d) 2,031 2,031 Tax Impact (e) (1,917 ) (1,745 ) Adjusted net income $ 21,125 $ 14,285 Weighted average number of shares outstanding – diluted 53,834,732 53,408,443 Adjusted diluted earnings per share $ 0.39 $ 0.27 (a) Restructuring income during the three months ended June 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 other 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/20220803005683/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 First Quarter Fiscal 2023 Results By: e.l.f. Beauty via Business Wire August 03, 2022 at 16:05 PM EDT – Delivered 26% Net Sales Growth – – Gained 120 Basis Points of Market Share – – Raises Fiscal 2023 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three months ended June 30, 2022. “I am proud of the e.l.f. Beauty team for achieving our fourteenth consecutive quarter of net sales growth,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “We continue to significantly outperform our competition. In the first quarter, we were the fastest growing top 5 color cosmetics brand and expanded our market share by 120 basis points, according to Nielsen. We are continuing to lean into our strengths—our core value proposition, innovation engine, and ability to attract and engage consumers—and are pleased to raise our Fiscal 2023 outlook.” Three Months Ended June 30, 2022 Results For the three months ended June 30, 2022, compared to the three months ended June 30, 2021: Net sales increased 26% to $122.6 million, primarily driven by strength in our national and international retailers. Gross margin increased approximately 390 basis points to 68%, primarily driven by price increases, cost savings, and product mix, which helped to mitigate the impact of higher transportation costs in the quarter. Selling, general and administrative expenses ("SG&A") increased $10.8 million to $61.6 million or 50% of net sales. Adjusted SG&A increased $9.4 million to $55.0 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits and marketing and digital spend. The provision for income taxes was $4.6 million. Net income was $14.5 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $21.1 million. Diluted earnings per share were $0.27 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 $0.39. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $31.7 million, or 26% of net sales, up 46% year over year. Balance Sheet As of June 30, 2022, the Company had $72.2 million in cash and cash equivalents and $89.7 million in long-term debt and finance lease obligations, as compared to $63.4 million in cash and cash equivalents and $95.3 million of long-term debt and finance lease obligations as of June 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 14-16% year-over-year increase in net sales, as compared to an expected 10-12% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $448-456 million $432-440 million Adjusted EBITDA $83.5-85.0 million $80.5-82.0 million Adjusted effective tax rate 25-26% 27-28% Adjusted net income $47.0-48.5 million $43.5-45.5 million Adjusted diluted earnings per share $0.84-0.87 $0.78-0.81 Weighted average diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its first quarter fiscal 2023 today, August 3, 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 the Company is continuing to lean into its strengths—its core value proposition, innovation engine, and ability to attract and engage consumers. 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 June 30, 2022 2021 Net sales $ 122,601 $ 97,047 Cost of sales 39,616 35,141 Gross profit 82,985 61,906 Selling, general and administrative expenses 61,555 50,749 Restructuring income — (14 ) Operating income 21,430 11,171 Other expense, net (1,663 ) (162 ) Interest expense, net (663 ) (745 ) Loss on extinguishment of debt — (460 ) Income before provision for income taxes 19,104 9,804 Income tax provision (4,635 ) (1,528 ) Net income $ 14,469 $ 8,276 Comprehensive income $ 14,469 $ 8,276 Net income per share: Basic $ 0.28 $ 0.16 Diluted $ 0.27 $ 0.15 Weighted average shares outstanding: Basic 51,707,160 50,544,573 Diluted 53,834,732 53,408,443 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) June 30, 2022 March 31, 2022 June 30, 2021 Assets Current assets: Cash and cash equivalents $ 72,248 $ 43,353 $ 63,402 Accounts receivable, net 52,281 45,567 43,127 Inventory, net 70,339 84,498 54,528 Prepaid expenses and other current assets 21,772 19,611 21,674 Total current assets 216,640 193,029 182,731 Property and equipment, net 9,339 10,577 15,561 Intangible assets, net 84,132 86,163 92,256 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,251 30,368 33,349 Total assets $ 513,857 $ 494,632 $ 498,392 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,793 $ 5,786 $ 32,247 Accounts payable 16,023 19,227 17,113 Accrued expenses and other current liabilities 39,916 40,004 33,617 Total current liabilities 61,732 65,017 82,977 Long-term debt and finance lease obligations 89,684 91,080 95,254 Deferred tax liabilities 13,538 9,593 17,750 Long-term operating lease obligations 14,637 15,744 19,053 Other long-term liabilities 817 769 736 Total liabilities 180,408 182,203 215,770 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of June 30, 2022, March 31, 2022 and June 30, 2021; 52,424,445, 52,243,764 and 51,826,156 shares issued and outstanding as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively 517 515 508 Additional paid-in capital 801,992 795,443 779,137 Accumulated deficit (469,060 ) (483,529 ) (497,023 ) Total stockholders' equity 333,449 312,429 282,622 Total liabilities and stockholders' equity $ 513,857 $ 494,632 $ 498,392 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Three months ended June 30, 2022 2021 Cash flows from operating activities: Net income $ 14,469 $ 8,276 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,724 6,222 Restructuring income — (14 ) Stock-based compensation expense 6,542 4,280 Amortization of debt issuance costs and discount on debt 91 118 Deferred income taxes 3,945 4,271 Loss on extinguishment of debt — 460 Other, net 21 97 Changes in operating assets and liabilities: Accounts receivable (6,727 ) (2,971 ) Inventories 14,158 2,320 Prepaid expenses and other assets (3,258 ) (7,131 ) Accounts payable and accrued expenses (3,442 ) (7,419 ) Other liabilities (945 ) (1,017 ) Net cash provided by operating activities 30,578 7,492 Cash flows from investing activities: Purchase of property and equipment (241 ) (2,336 ) Net cash used in investing activities (241 ) (2,336 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Proceeds from long-term debt — 25,581 Repayment of long-term debt (1,250 ) (50,775 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2 463 Other, net (194 ) (207 ) Net cash (used in) provided by financing activities (1,442 ) 478 Net increase in cash and cash equivalents 28,895 5,634 Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 72,248 $ 63,402 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended June 30, 2022 2021 Net income $ 14,469 $ 8,276 Interest expense, net 663 745 Income tax provision 4,635 1,528 Depreciation and amortization 4,693 5,121 EBITDA $ 24,460 $ 15,670 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Loss on extinguishment of debt (b) — 460 Other non-cash and non-recurring items (c) 679 1,302 Adjusted EBITDA $ 31,681 $ 21,698 (a) Restructuring income during the three months ended June 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 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. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended June 30, 2022 2021 Selling, general and administrative expenses $ 61,555 $ 50,749 Stock-based compensation (6,549 ) (4,190 ) Other non-cash and non-recurring items (a) — (997 ) Adjusted selling, general and administrative expenses $ 55,006 $ 45,562 (a) Represents various non-cash or non-recurring items, which 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. 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 June 30, 2022 2021 Net income $ 14,469 $ 8,276 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Other non-cash and non-recurring items (b) — 997 Loss on extinguishment of debt (c) — 460 Amortization of acquired intangible assets (d) 2,031 2,031 Tax Impact (e) (1,917 ) (1,745 ) Adjusted net income $ 21,125 $ 14,285 Weighted average number of shares outstanding – diluted 53,834,732 53,408,443 Adjusted diluted earnings per share $ 0.39 $ 0.27 (a) Restructuring income during the three months ended June 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 other 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/20220803005683/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 26% Net Sales Growth – – Gained 120 Basis Points of Market Share – – Raises Fiscal 2023 Outlook –
e.l.f. Beauty (NYSE: ELF) today announced results for the three months ended June 30, 2022. “I am proud of the e.l.f. Beauty team for achieving our fourteenth consecutive quarter of net sales growth,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “We continue to significantly outperform our competition. In the first quarter, we were the fastest growing top 5 color cosmetics brand and expanded our market share by 120 basis points, according to Nielsen. We are continuing to lean into our strengths—our core value proposition, innovation engine, and ability to attract and engage consumers—and are pleased to raise our Fiscal 2023 outlook.” Three Months Ended June 30, 2022 Results For the three months ended June 30, 2022, compared to the three months ended June 30, 2021: Net sales increased 26% to $122.6 million, primarily driven by strength in our national and international retailers. Gross margin increased approximately 390 basis points to 68%, primarily driven by price increases, cost savings, and product mix, which helped to mitigate the impact of higher transportation costs in the quarter. Selling, general and administrative expenses ("SG&A") increased $10.8 million to $61.6 million or 50% of net sales. Adjusted SG&A increased $9.4 million to $55.0 million, or 45% of net sales. The increase was primarily due to an increase in compensation and benefits and marketing and digital spend. The provision for income taxes was $4.6 million. Net income was $14.5 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $21.1 million. Diluted earnings per share were $0.27 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 $0.39. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $31.7 million, or 26% of net sales, up 46% year over year. Balance Sheet As of June 30, 2022, the Company had $72.2 million in cash and cash equivalents and $89.7 million in long-term debt and finance lease obligations, as compared to $63.4 million in cash and cash equivalents and $95.3 million of long-term debt and finance lease obligations as of June 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 14-16% year-over-year increase in net sales, as compared to an expected 10-12% year-over-year increase previously. Updated Fiscal 2023 Outlook Previous Fiscal 2023 Outlook Net sales $448-456 million $432-440 million Adjusted EBITDA $83.5-85.0 million $80.5-82.0 million Adjusted effective tax rate 25-26% 27-28% Adjusted net income $47.0-48.5 million $43.5-45.5 million Adjusted diluted earnings per share $0.84-0.87 $0.78-0.81 Weighted average diluted shares outstanding 56 million 56 million Webcast Details The Company will hold a webcast to discuss the results from its first quarter fiscal 2023 today, August 3, 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 the Company is continuing to lean into its strengths—its core value proposition, innovation engine, and ability to attract and engage consumers. 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 June 30, 2022 2021 Net sales $ 122,601 $ 97,047 Cost of sales 39,616 35,141 Gross profit 82,985 61,906 Selling, general and administrative expenses 61,555 50,749 Restructuring income — (14 ) Operating income 21,430 11,171 Other expense, net (1,663 ) (162 ) Interest expense, net (663 ) (745 ) Loss on extinguishment of debt — (460 ) Income before provision for income taxes 19,104 9,804 Income tax provision (4,635 ) (1,528 ) Net income $ 14,469 $ 8,276 Comprehensive income $ 14,469 $ 8,276 Net income per share: Basic $ 0.28 $ 0.16 Diluted $ 0.27 $ 0.15 Weighted average shares outstanding: Basic 51,707,160 50,544,573 Diluted 53,834,732 53,408,443 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) June 30, 2022 March 31, 2022 June 30, 2021 Assets Current assets: Cash and cash equivalents $ 72,248 $ 43,353 $ 63,402 Accounts receivable, net 52,281 45,567 43,127 Inventory, net 70,339 84,498 54,528 Prepaid expenses and other current assets 21,772 19,611 21,674 Total current assets 216,640 193,029 182,731 Property and equipment, net 9,339 10,577 15,561 Intangible assets, net 84,132 86,163 92,256 Goodwill 171,620 171,620 171,620 Investments 2,875 2,875 2,875 Other assets 29,251 30,368 33,349 Total assets $ 513,857 $ 494,632 $ 498,392 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,793 $ 5,786 $ 32,247 Accounts payable 16,023 19,227 17,113 Accrued expenses and other current liabilities 39,916 40,004 33,617 Total current liabilities 61,732 65,017 82,977 Long-term debt and finance lease obligations 89,684 91,080 95,254 Deferred tax liabilities 13,538 9,593 17,750 Long-term operating lease obligations 14,637 15,744 19,053 Other long-term liabilities 817 769 736 Total liabilities 180,408 182,203 215,770 Commitments and contingencies Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of June 30, 2022, March 31, 2022 and June 30, 2021; 52,424,445, 52,243,764 and 51,826,156 shares issued and outstanding as of June 30, 2022, March 31, 2022 and June 30, 2021, respectively 517 515 508 Additional paid-in capital 801,992 795,443 779,137 Accumulated deficit (469,060 ) (483,529 ) (497,023 ) Total stockholders' equity 333,449 312,429 282,622 Total liabilities and stockholders' equity $ 513,857 $ 494,632 $ 498,392 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Three months ended June 30, 2022 2021 Cash flows from operating activities: Net income $ 14,469 $ 8,276 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,724 6,222 Restructuring income — (14 ) Stock-based compensation expense 6,542 4,280 Amortization of debt issuance costs and discount on debt 91 118 Deferred income taxes 3,945 4,271 Loss on extinguishment of debt — 460 Other, net 21 97 Changes in operating assets and liabilities: Accounts receivable (6,727 ) (2,971 ) Inventories 14,158 2,320 Prepaid expenses and other assets (3,258 ) (7,131 ) Accounts payable and accrued expenses (3,442 ) (7,419 ) Other liabilities (945 ) (1,017 ) Net cash provided by operating activities 30,578 7,492 Cash flows from investing activities: Purchase of property and equipment (241 ) (2,336 ) Net cash used in investing activities (241 ) (2,336 ) Cash flows from financing activities: Proceeds from revolving line of credit — 26,480 Proceeds from long-term debt — 25,581 Repayment of long-term debt (1,250 ) (50,775 ) Debt issuance costs paid — (1,064 ) Cash received from issuance of common stock 2 463 Other, net (194 ) (207 ) Net cash (used in) provided by financing activities (1,442 ) 478 Net increase in cash and cash equivalents 28,895 5,634 Cash and cash equivalents - beginning of period 43,353 57,768 Cash and cash equivalents - end of period $ 72,248 $ 63,402 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended June 30, 2022 2021 Net income $ 14,469 $ 8,276 Interest expense, net 663 745 Income tax provision 4,635 1,528 Depreciation and amortization 4,693 5,121 EBITDA $ 24,460 $ 15,670 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Loss on extinguishment of debt (b) — 460 Other non-cash and non-recurring items (c) 679 1,302 Adjusted EBITDA $ 31,681 $ 21,698 (a) Restructuring income during the three months ended June 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 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. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended June 30, 2022 2021 Selling, general and administrative expenses $ 61,555 $ 50,749 Stock-based compensation (6,549 ) (4,190 ) Other non-cash and non-recurring items (a) — (997 ) Adjusted selling, general and administrative expenses $ 55,006 $ 45,562 (a) Represents various non-cash or non-recurring items, which 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. 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 June 30, 2022 2021 Net income $ 14,469 $ 8,276 Restructuring income (a) — (14 ) Stock-based compensation 6,542 4,280 Other non-cash and non-recurring items (b) — 997 Loss on extinguishment of debt (c) — 460 Amortization of acquired intangible assets (d) 2,031 2,031 Tax Impact (e) (1,917 ) (1,745 ) Adjusted net income $ 21,125 $ 14,285 Weighted average number of shares outstanding – diluted 53,834,732 53,408,443 Adjusted diluted earnings per share $ 0.39 $ 0.27 (a) Restructuring income during the three months ended June 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 other 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/20220803005683/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