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 Third Quarter Fiscal 2024 Results By: e.l.f. Beauty via Business Wire February 06, 2024 at 16:05 PM EST – Delivered 85% Net Sales Growth – – e.l.f. Cosmetics Gained 305 Basis Points of Market Share – – Raises Fiscal 2024 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three and nine months ended December 31, 2023. “Our vision is to create a different kind of beauty company and you can see that in the exceptional, consistent, category-leading growth we’ve delivered,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer. “In Q3, we grew net sales by 85% and market share by 305 basis points, marking our 20th consecutive quarter of growth in each. I’m extremely proud of our team and the progress we continue to make across color cosmetics, skin care and internationally.” Three Months Ended December 31, 2023 Results For the three months ended December 31, 2023, compared to the three months ended December 31, 2022: Net sales increased 85% to $270.9 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 350 basis points to 71%, primarily driven by favorable foreign exchange impacts, improved transportation costs, cost savings and mix. Selling, general and administrative (“SG&A”) expenses increased $84.7 million to $160.1 million, or 59% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $79.1 million to $147.3 million, or 54% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $26.9 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $42.9 million. Diluted earnings per share were $0.46 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 $0.74. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $59.1 million, or 22% of net sales, up 61% year over year. Nine Months Ended December 31, 2023 Results For the nine months ended December 31, 2023, compared to the nine months ended December 31, 2022: Net sales increased 80% to $702.8 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 400 basis points to 71%, primarily driven by favorable foreign exchange impacts, cost savings and mix, improved transportation costs, and lower inventory adjustments, partially offset by costs associated with retailer activity and space expansion. SG&A increased $163.1 million to $364.2 million, or 52% of net sales. Adjusted SG&A increased $150.2 million to $329.5 million, or 47% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $113.1 million on a GAAP basis. Adjusted net income was $152.9 million. Diluted earnings per share were $1.97 on a GAAP basis. Adjusted diluted earnings per share were $2.66. Adjusted EBITDA was $193.8 million, or 28% of net sales, up 103% year over year. Balance Sheet As of December 31, 2023, the Company had $72.7 million in cash and cash equivalents and $164.4 million of long-term debt and finance lease obligations, as compared to $87.0 million in cash and cash equivalents and $62.2 million of long-term debt and finance lease obligations as of December 31, 2022. Naturium Acquisition On October 4, 2023, the Company closed the acquisition of Naturium, a fast-growing, high performance skin care brand, for $333.0 million in a combination of cash and Company stock. The acquisition furthers the Company’s mission to make the best of beauty accessible to every eye, lip, face and skin concern. Updated Fiscal 2024 Outlook The Company is providing the following updated outlook for fiscal 2024. The updated outlook for fiscal 2024 reflects an expected 69-71% year-over-year increase in net sales, as compared to an expected 55-57% increase previously. Updated Fiscal 2024 Outlook Previous Fiscal 2024 Outlook Net sales $980-990 million $896-906 million Adjusted EBITDA $218-220 million $197-200 million Adjusted effective tax rate 14% 17-18% Adjusted net income $164-166 million $144-146 million Adjusted diluted earnings per share $2.84-2.87 $2.47-2.50 Fiscal year ending diluted shares outstanding 58 million 58 million Webcast Details The Company will hold a webcast to discuss the results from its third quarter fiscal 2024 today, February 6, 2024, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events-and-presentations. 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 norms, shape culture and connect communities through positivity, inclusivity and accessibility. A digitally disruptive brand from the start, we launched in 2004 selling premium-quality makeup for $1 online. Today, we have five visionary, purpose-driven brands, all of which make the best of beauty accessible to every eye, lip, face and skin concern. Our brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People and Keys Soulcare. With a focus on clean, cruelty free and vegan products, we are also the first beauty company with a Fair Trade™ certified manufacturing facility. e.l.f. Beauty brands are sold online and at leading beauty, mass market, and specialty retailers in the U.S. and internationally. Learn more at https://www.elfbeauty.com/ Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, 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 or substitutes for 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 expense or income related to stock-based compensation, impairment of equity investment, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items includes other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, impairment of equity investment, loss on extinguishment of debt, 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 expense or income related to stock-based compensation, other non-recurring items, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items, which include other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. With respect to the Company’s expectations under “Updated Fiscal 2024 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 2024 under “Updated Fiscal 2024 Outlook” above. 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 successfully address any difficulties and challenges encountered in connection with its acquisition of Naturium, including the integration of Naturium's business with the Company's business; 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; and the Company’s ability to effectively manage its SG&A and other expenses. 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 (unaudited) (in thousands, except share and per share data) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net sales $ 270,943 $ 146,537 $ 702,789 $ 391,487 Cost of sales 78,986 47,812 205,895 130,217 Gross profit 191,957 98,725 496,894 261,270 Selling, general and administrative expenses 160,121 75,434 364,246 201,172 Operating income 31,836 23,291 132,648 60,098 Other income (expense), net 2,565 730 1,902 (2,195 ) Impairment of equity investment — — (1,720 ) — Interest expense, net (3,985 ) (463 ) (3,021 ) (1,912 ) Loss on extinguishment of debt — (176 ) — (176 ) Income before provision for income taxes 30,416 23,382 129,809 55,815 Income tax provision (3,528 ) (4,277 ) (16,673 ) (10,531 ) Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Net income per share: Basic $ 0.49 $ 0.36 $ 2.08 $ 0.87 Diluted $ 0.46 $ 0.34 $ 1.97 $ 0.82 Weighted average shares outstanding: Basic 55,140,887 52,707,406 54,503,518 52,239,761 Diluted 58,030,115 55,840,137 57,550,094 54,906,065 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) December 31, 2023 March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 72,705 $ 120,778 $ 87,021 Accounts receivable, net 121,061 67,928 66,237 Inventory, net 204,504 81,323 81,250 Prepaid expenses and other current assets 56,630 33,296 28,382 Total current assets 454,900 303,325 262,890 Property and equipment, net 12,805 7,874 8,726 Intangible assets, net 230,658 78,041 80,071 Goodwill 340,165 171,620 171,620 Investments 1,155 2,875 2,875 Other assets 68,601 31,866 29,743 Total assets $ 1,108,284 $ 595,601 $ 555,925 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 100,394 $ 5,575 $ 5,690 Accounts payable 72,917 31,427 32,049 Accrued expenses and other current liabilities 129,628 70,974 49,798 Total current liabilities 302,939 107,976 87,537 Long-term debt and finance lease obligations 164,403 60,881 62,177 Deferred tax liabilities 4,281 3,742 7,783 Long-term operating lease obligations 21,720 11,201 12,329 Other long-term liabilities 717 784 795 Total liabilities 494,060 184,584 170,621 Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2023, March 31, 2023 and December 31, 2022; 55,412,234, 53,770,482 and 53,165,462 shares issued and outstanding as of December 31, 2023, March 31, 2023 and December 31, 2022, respectively 553 535 528 Additional paid-in capital 922,592 832,481 823,021 Accumulated other comprehensive loss (58 ) — — Accumulated deficit (308,863 ) (421,999 ) (438,245 ) Total stockholders' equity 614,224 411,017 385,304 Total liabilities and stockholders' equity $ 1,108,284 $ 595,601 $ 555,925 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Nine months ended December 31, 2023 2022 Cash flows from operating activities: Net income $ 113,136 $ 45,284 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 24,247 16,496 Stock-based compensation expense 29,459 21,833 Amortization of debt issuance costs and discount on debt 290 271 Deferred income taxes (1,684 ) (1,819 ) Impairment of equity investment 1,720 — Acquisition-related seller expenses (10,549 ) — Loss on extinguishment of debt — 176 Other, net 27 (1 ) Changes in operating assets and liabilities: Accounts receivable (45,878 ) (20,620 ) Inventory (106,898 ) 3,248 Prepaid expenses and other assets (50,696 ) (15,223 ) Accounts payable and accrued expenses 84,733 22,610 Other liabilities (3,768 ) (3,254 ) Net cash provided by operating activities 34,139 69,001 Cash flows from investing activities: Acquisition, net of cash acquired (274,973 ) — Purchase of property and equipment (5,984 ) (1,647 ) Net cash used in investing activities (280,957 ) (1,647 ) Cash flows from financing activities: Proceeds from revolving line of credit 89,500 — Proceeds from long-term debt 115,000 — Repayment of long-term debt (5,188 ) (28,750 ) Debt issuance costs paid (665 ) — Cash received from issuance of common stock 2,893 5,652 Other, net (489 ) (588 ) Net cash provided by (used in) financing activities 201,051 (23,686 ) Effect of exchange rate changes on cash and cash equivalents (56 ) — Net (decrease) increase in cash, cash equivalents and restricted cash (45,823 ) 43,668 Cash, cash equivalents and restricted cash - beginning of period 120,778 43,353 Cash, cash equivalents and restricted cash - end of period $ 74,955 $ 87,021 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Interest expense, net 3,985 463 3,021 1,912 Income tax provision 3,528 4,277 16,673 10,531 Depreciation and amortization 10,272 4,386 20,445 13,399 EBITDA $ 44,673 $ 28,231 $ 153,275 $ 71,126 Stock-based compensation 11,042 7,257 29,459 21,833 Impairment of equity investment (a) — — 1,720 — Loss on extinguishment of debt (b) — 176 — 176 Other non-cash and non-recurring items (c) 3,378 938 9,357 2,403 Adjusted EBITDA $ 59,093 $ 36,602 $ 193,811 $ 95,538 (a) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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 other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Selling, general and administrative expenses $ 160,121 $ 75,434 $ 364,246 $ 201,172 Stock-based compensation (11,051 ) (7,239 ) (29,464 ) (21,810 ) Other non-recurring items (a) (1,726 ) — (5,267 ) — Adjusted selling, general and administrative expenses $ 147,344 $ 68,195 $ 329,515 $ 179,362 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. 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 December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Stock-based compensation 11,042 7,257 29,459 21,833 Other non-recurring items (a) 2,056 — 5,597 — Impairment of equity investment (b) — — 1,720 — Loss on extinguishment of debt (c) — 176 — 176 Amortization of acquired intangible assets (d) 6,128 2,031 10,183 6,093 Tax Impact (e) (3,219 ) (1,767 ) (7,174 ) (5,402 ) Adjusted net income $ 42,895 $ 26,802 $ 152,921 $ 67,984 Weighted average number of shares outstanding – diluted 58,030,115 55,840,137 57,550,094 54,906,065 Adjusted diluted earnings per share $ 0.74 $ 0.48 $ 2.66 $ 1.24 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. (b) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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/20240206988092/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. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
e.l.f. Beauty Announces Third Quarter Fiscal 2024 Results By: e.l.f. Beauty via Business Wire February 06, 2024 at 16:05 PM EST – Delivered 85% Net Sales Growth – – e.l.f. Cosmetics Gained 305 Basis Points of Market Share – – Raises Fiscal 2024 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three and nine months ended December 31, 2023. “Our vision is to create a different kind of beauty company and you can see that in the exceptional, consistent, category-leading growth we’ve delivered,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer. “In Q3, we grew net sales by 85% and market share by 305 basis points, marking our 20th consecutive quarter of growth in each. I’m extremely proud of our team and the progress we continue to make across color cosmetics, skin care and internationally.” Three Months Ended December 31, 2023 Results For the three months ended December 31, 2023, compared to the three months ended December 31, 2022: Net sales increased 85% to $270.9 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 350 basis points to 71%, primarily driven by favorable foreign exchange impacts, improved transportation costs, cost savings and mix. Selling, general and administrative (“SG&A”) expenses increased $84.7 million to $160.1 million, or 59% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $79.1 million to $147.3 million, or 54% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $26.9 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $42.9 million. Diluted earnings per share were $0.46 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 $0.74. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $59.1 million, or 22% of net sales, up 61% year over year. Nine Months Ended December 31, 2023 Results For the nine months ended December 31, 2023, compared to the nine months ended December 31, 2022: Net sales increased 80% to $702.8 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 400 basis points to 71%, primarily driven by favorable foreign exchange impacts, cost savings and mix, improved transportation costs, and lower inventory adjustments, partially offset by costs associated with retailer activity and space expansion. SG&A increased $163.1 million to $364.2 million, or 52% of net sales. Adjusted SG&A increased $150.2 million to $329.5 million, or 47% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $113.1 million on a GAAP basis. Adjusted net income was $152.9 million. Diluted earnings per share were $1.97 on a GAAP basis. Adjusted diluted earnings per share were $2.66. Adjusted EBITDA was $193.8 million, or 28% of net sales, up 103% year over year. Balance Sheet As of December 31, 2023, the Company had $72.7 million in cash and cash equivalents and $164.4 million of long-term debt and finance lease obligations, as compared to $87.0 million in cash and cash equivalents and $62.2 million of long-term debt and finance lease obligations as of December 31, 2022. Naturium Acquisition On October 4, 2023, the Company closed the acquisition of Naturium, a fast-growing, high performance skin care brand, for $333.0 million in a combination of cash and Company stock. The acquisition furthers the Company’s mission to make the best of beauty accessible to every eye, lip, face and skin concern. Updated Fiscal 2024 Outlook The Company is providing the following updated outlook for fiscal 2024. The updated outlook for fiscal 2024 reflects an expected 69-71% year-over-year increase in net sales, as compared to an expected 55-57% increase previously. Updated Fiscal 2024 Outlook Previous Fiscal 2024 Outlook Net sales $980-990 million $896-906 million Adjusted EBITDA $218-220 million $197-200 million Adjusted effective tax rate 14% 17-18% Adjusted net income $164-166 million $144-146 million Adjusted diluted earnings per share $2.84-2.87 $2.47-2.50 Fiscal year ending diluted shares outstanding 58 million 58 million Webcast Details The Company will hold a webcast to discuss the results from its third quarter fiscal 2024 today, February 6, 2024, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events-and-presentations. 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 norms, shape culture and connect communities through positivity, inclusivity and accessibility. A digitally disruptive brand from the start, we launched in 2004 selling premium-quality makeup for $1 online. Today, we have five visionary, purpose-driven brands, all of which make the best of beauty accessible to every eye, lip, face and skin concern. Our brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People and Keys Soulcare. With a focus on clean, cruelty free and vegan products, we are also the first beauty company with a Fair Trade™ certified manufacturing facility. e.l.f. Beauty brands are sold online and at leading beauty, mass market, and specialty retailers in the U.S. and internationally. Learn more at https://www.elfbeauty.com/ Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, 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 or substitutes for 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 expense or income related to stock-based compensation, impairment of equity investment, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items includes other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, impairment of equity investment, loss on extinguishment of debt, 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 expense or income related to stock-based compensation, other non-recurring items, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items, which include other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. With respect to the Company’s expectations under “Updated Fiscal 2024 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 2024 under “Updated Fiscal 2024 Outlook” above. 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 successfully address any difficulties and challenges encountered in connection with its acquisition of Naturium, including the integration of Naturium's business with the Company's business; 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; and the Company’s ability to effectively manage its SG&A and other expenses. 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 (unaudited) (in thousands, except share and per share data) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net sales $ 270,943 $ 146,537 $ 702,789 $ 391,487 Cost of sales 78,986 47,812 205,895 130,217 Gross profit 191,957 98,725 496,894 261,270 Selling, general and administrative expenses 160,121 75,434 364,246 201,172 Operating income 31,836 23,291 132,648 60,098 Other income (expense), net 2,565 730 1,902 (2,195 ) Impairment of equity investment — — (1,720 ) — Interest expense, net (3,985 ) (463 ) (3,021 ) (1,912 ) Loss on extinguishment of debt — (176 ) — (176 ) Income before provision for income taxes 30,416 23,382 129,809 55,815 Income tax provision (3,528 ) (4,277 ) (16,673 ) (10,531 ) Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Net income per share: Basic $ 0.49 $ 0.36 $ 2.08 $ 0.87 Diluted $ 0.46 $ 0.34 $ 1.97 $ 0.82 Weighted average shares outstanding: Basic 55,140,887 52,707,406 54,503,518 52,239,761 Diluted 58,030,115 55,840,137 57,550,094 54,906,065 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) December 31, 2023 March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 72,705 $ 120,778 $ 87,021 Accounts receivable, net 121,061 67,928 66,237 Inventory, net 204,504 81,323 81,250 Prepaid expenses and other current assets 56,630 33,296 28,382 Total current assets 454,900 303,325 262,890 Property and equipment, net 12,805 7,874 8,726 Intangible assets, net 230,658 78,041 80,071 Goodwill 340,165 171,620 171,620 Investments 1,155 2,875 2,875 Other assets 68,601 31,866 29,743 Total assets $ 1,108,284 $ 595,601 $ 555,925 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 100,394 $ 5,575 $ 5,690 Accounts payable 72,917 31,427 32,049 Accrued expenses and other current liabilities 129,628 70,974 49,798 Total current liabilities 302,939 107,976 87,537 Long-term debt and finance lease obligations 164,403 60,881 62,177 Deferred tax liabilities 4,281 3,742 7,783 Long-term operating lease obligations 21,720 11,201 12,329 Other long-term liabilities 717 784 795 Total liabilities 494,060 184,584 170,621 Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2023, March 31, 2023 and December 31, 2022; 55,412,234, 53,770,482 and 53,165,462 shares issued and outstanding as of December 31, 2023, March 31, 2023 and December 31, 2022, respectively 553 535 528 Additional paid-in capital 922,592 832,481 823,021 Accumulated other comprehensive loss (58 ) — — Accumulated deficit (308,863 ) (421,999 ) (438,245 ) Total stockholders' equity 614,224 411,017 385,304 Total liabilities and stockholders' equity $ 1,108,284 $ 595,601 $ 555,925 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Nine months ended December 31, 2023 2022 Cash flows from operating activities: Net income $ 113,136 $ 45,284 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 24,247 16,496 Stock-based compensation expense 29,459 21,833 Amortization of debt issuance costs and discount on debt 290 271 Deferred income taxes (1,684 ) (1,819 ) Impairment of equity investment 1,720 — Acquisition-related seller expenses (10,549 ) — Loss on extinguishment of debt — 176 Other, net 27 (1 ) Changes in operating assets and liabilities: Accounts receivable (45,878 ) (20,620 ) Inventory (106,898 ) 3,248 Prepaid expenses and other assets (50,696 ) (15,223 ) Accounts payable and accrued expenses 84,733 22,610 Other liabilities (3,768 ) (3,254 ) Net cash provided by operating activities 34,139 69,001 Cash flows from investing activities: Acquisition, net of cash acquired (274,973 ) — Purchase of property and equipment (5,984 ) (1,647 ) Net cash used in investing activities (280,957 ) (1,647 ) Cash flows from financing activities: Proceeds from revolving line of credit 89,500 — Proceeds from long-term debt 115,000 — Repayment of long-term debt (5,188 ) (28,750 ) Debt issuance costs paid (665 ) — Cash received from issuance of common stock 2,893 5,652 Other, net (489 ) (588 ) Net cash provided by (used in) financing activities 201,051 (23,686 ) Effect of exchange rate changes on cash and cash equivalents (56 ) — Net (decrease) increase in cash, cash equivalents and restricted cash (45,823 ) 43,668 Cash, cash equivalents and restricted cash - beginning of period 120,778 43,353 Cash, cash equivalents and restricted cash - end of period $ 74,955 $ 87,021 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Interest expense, net 3,985 463 3,021 1,912 Income tax provision 3,528 4,277 16,673 10,531 Depreciation and amortization 10,272 4,386 20,445 13,399 EBITDA $ 44,673 $ 28,231 $ 153,275 $ 71,126 Stock-based compensation 11,042 7,257 29,459 21,833 Impairment of equity investment (a) — — 1,720 — Loss on extinguishment of debt (b) — 176 — 176 Other non-cash and non-recurring items (c) 3,378 938 9,357 2,403 Adjusted EBITDA $ 59,093 $ 36,602 $ 193,811 $ 95,538 (a) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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 other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Selling, general and administrative expenses $ 160,121 $ 75,434 $ 364,246 $ 201,172 Stock-based compensation (11,051 ) (7,239 ) (29,464 ) (21,810 ) Other non-recurring items (a) (1,726 ) — (5,267 ) — Adjusted selling, general and administrative expenses $ 147,344 $ 68,195 $ 329,515 $ 179,362 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. 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 December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Stock-based compensation 11,042 7,257 29,459 21,833 Other non-recurring items (a) 2,056 — 5,597 — Impairment of equity investment (b) — — 1,720 — Loss on extinguishment of debt (c) — 176 — 176 Amortization of acquired intangible assets (d) 6,128 2,031 10,183 6,093 Tax Impact (e) (3,219 ) (1,767 ) (7,174 ) (5,402 ) Adjusted net income $ 42,895 $ 26,802 $ 152,921 $ 67,984 Weighted average number of shares outstanding – diluted 58,030,115 55,840,137 57,550,094 54,906,065 Adjusted diluted earnings per share $ 0.74 $ 0.48 $ 2.66 $ 1.24 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. (b) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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/20240206988092/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 85% Net Sales Growth – – e.l.f. Cosmetics Gained 305 Basis Points of Market Share – – Raises Fiscal 2024 Outlook –
e.l.f. Beauty (NYSE: ELF) today announced results for the three and nine months ended December 31, 2023. “Our vision is to create a different kind of beauty company and you can see that in the exceptional, consistent, category-leading growth we’ve delivered,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer. “In Q3, we grew net sales by 85% and market share by 305 basis points, marking our 20th consecutive quarter of growth in each. I’m extremely proud of our team and the progress we continue to make across color cosmetics, skin care and internationally.” Three Months Ended December 31, 2023 Results For the three months ended December 31, 2023, compared to the three months ended December 31, 2022: Net sales increased 85% to $270.9 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 350 basis points to 71%, primarily driven by favorable foreign exchange impacts, improved transportation costs, cost savings and mix. Selling, general and administrative (“SG&A”) expenses increased $84.7 million to $160.1 million, or 59% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $79.1 million to $147.3 million, or 54% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $26.9 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $42.9 million. Diluted earnings per share were $0.46 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 $0.74. Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $59.1 million, or 22% of net sales, up 61% year over year. Nine Months Ended December 31, 2023 Results For the nine months ended December 31, 2023, compared to the nine months ended December 31, 2022: Net sales increased 80% to $702.8 million, primarily driven by strength in both retailer and e-commerce channels. Gross margin increased approximately 400 basis points to 71%, primarily driven by favorable foreign exchange impacts, cost savings and mix, improved transportation costs, and lower inventory adjustments, partially offset by costs associated with retailer activity and space expansion. SG&A increased $163.1 million to $364.2 million, or 52% of net sales. Adjusted SG&A increased $150.2 million to $329.5 million, or 47% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees. Net income was $113.1 million on a GAAP basis. Adjusted net income was $152.9 million. Diluted earnings per share were $1.97 on a GAAP basis. Adjusted diluted earnings per share were $2.66. Adjusted EBITDA was $193.8 million, or 28% of net sales, up 103% year over year. Balance Sheet As of December 31, 2023, the Company had $72.7 million in cash and cash equivalents and $164.4 million of long-term debt and finance lease obligations, as compared to $87.0 million in cash and cash equivalents and $62.2 million of long-term debt and finance lease obligations as of December 31, 2022. Naturium Acquisition On October 4, 2023, the Company closed the acquisition of Naturium, a fast-growing, high performance skin care brand, for $333.0 million in a combination of cash and Company stock. The acquisition furthers the Company’s mission to make the best of beauty accessible to every eye, lip, face and skin concern. Updated Fiscal 2024 Outlook The Company is providing the following updated outlook for fiscal 2024. The updated outlook for fiscal 2024 reflects an expected 69-71% year-over-year increase in net sales, as compared to an expected 55-57% increase previously. Updated Fiscal 2024 Outlook Previous Fiscal 2024 Outlook Net sales $980-990 million $896-906 million Adjusted EBITDA $218-220 million $197-200 million Adjusted effective tax rate 14% 17-18% Adjusted net income $164-166 million $144-146 million Adjusted diluted earnings per share $2.84-2.87 $2.47-2.50 Fiscal year ending diluted shares outstanding 58 million 58 million Webcast Details The Company will hold a webcast to discuss the results from its third quarter fiscal 2024 today, February 6, 2024, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events-and-presentations. 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 norms, shape culture and connect communities through positivity, inclusivity and accessibility. A digitally disruptive brand from the start, we launched in 2004 selling premium-quality makeup for $1 online. Today, we have five visionary, purpose-driven brands, all of which make the best of beauty accessible to every eye, lip, face and skin concern. Our brand portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People and Keys Soulcare. With a focus on clean, cruelty free and vegan products, we are also the first beauty company with a Fair Trade™ certified manufacturing facility. e.l.f. Beauty brands are sold online and at leading beauty, mass market, and specialty retailers in the U.S. and internationally. Learn more at https://www.elfbeauty.com/ Note Regarding non-GAAP Financial Measures This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, 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 or substitutes for 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 expense or income related to stock-based compensation, impairment of equity investment, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items includes other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, impairment of equity investment, loss on extinguishment of debt, 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 expense or income related to stock-based compensation, other non-recurring items, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items, which include other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. With respect to the Company’s expectations under “Updated Fiscal 2024 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 2024 under “Updated Fiscal 2024 Outlook” above. 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 successfully address any difficulties and challenges encountered in connection with its acquisition of Naturium, including the integration of Naturium's business with the Company's business; 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; and the Company’s ability to effectively manage its SG&A and other expenses. 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 (unaudited) (in thousands, except share and per share data) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net sales $ 270,943 $ 146,537 $ 702,789 $ 391,487 Cost of sales 78,986 47,812 205,895 130,217 Gross profit 191,957 98,725 496,894 261,270 Selling, general and administrative expenses 160,121 75,434 364,246 201,172 Operating income 31,836 23,291 132,648 60,098 Other income (expense), net 2,565 730 1,902 (2,195 ) Impairment of equity investment — — (1,720 ) — Interest expense, net (3,985 ) (463 ) (3,021 ) (1,912 ) Loss on extinguishment of debt — (176 ) — (176 ) Income before provision for income taxes 30,416 23,382 129,809 55,815 Income tax provision (3,528 ) (4,277 ) (16,673 ) (10,531 ) Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Net income per share: Basic $ 0.49 $ 0.36 $ 2.08 $ 0.87 Diluted $ 0.46 $ 0.34 $ 1.97 $ 0.82 Weighted average shares outstanding: Basic 55,140,887 52,707,406 54,503,518 52,239,761 Diluted 58,030,115 55,840,137 57,550,094 54,906,065 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) December 31, 2023 March 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 72,705 $ 120,778 $ 87,021 Accounts receivable, net 121,061 67,928 66,237 Inventory, net 204,504 81,323 81,250 Prepaid expenses and other current assets 56,630 33,296 28,382 Total current assets 454,900 303,325 262,890 Property and equipment, net 12,805 7,874 8,726 Intangible assets, net 230,658 78,041 80,071 Goodwill 340,165 171,620 171,620 Investments 1,155 2,875 2,875 Other assets 68,601 31,866 29,743 Total assets $ 1,108,284 $ 595,601 $ 555,925 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 100,394 $ 5,575 $ 5,690 Accounts payable 72,917 31,427 32,049 Accrued expenses and other current liabilities 129,628 70,974 49,798 Total current liabilities 302,939 107,976 87,537 Long-term debt and finance lease obligations 164,403 60,881 62,177 Deferred tax liabilities 4,281 3,742 7,783 Long-term operating lease obligations 21,720 11,201 12,329 Other long-term liabilities 717 784 795 Total liabilities 494,060 184,584 170,621 Stockholders' equity: Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of December 31, 2023, March 31, 2023 and December 31, 2022; 55,412,234, 53,770,482 and 53,165,462 shares issued and outstanding as of December 31, 2023, March 31, 2023 and December 31, 2022, respectively 553 535 528 Additional paid-in capital 922,592 832,481 823,021 Accumulated other comprehensive loss (58 ) — — Accumulated deficit (308,863 ) (421,999 ) (438,245 ) Total stockholders' equity 614,224 411,017 385,304 Total liabilities and stockholders' equity $ 1,108,284 $ 595,601 $ 555,925 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Nine months ended December 31, 2023 2022 Cash flows from operating activities: Net income $ 113,136 $ 45,284 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 24,247 16,496 Stock-based compensation expense 29,459 21,833 Amortization of debt issuance costs and discount on debt 290 271 Deferred income taxes (1,684 ) (1,819 ) Impairment of equity investment 1,720 — Acquisition-related seller expenses (10,549 ) — Loss on extinguishment of debt — 176 Other, net 27 (1 ) Changes in operating assets and liabilities: Accounts receivable (45,878 ) (20,620 ) Inventory (106,898 ) 3,248 Prepaid expenses and other assets (50,696 ) (15,223 ) Accounts payable and accrued expenses 84,733 22,610 Other liabilities (3,768 ) (3,254 ) Net cash provided by operating activities 34,139 69,001 Cash flows from investing activities: Acquisition, net of cash acquired (274,973 ) — Purchase of property and equipment (5,984 ) (1,647 ) Net cash used in investing activities (280,957 ) (1,647 ) Cash flows from financing activities: Proceeds from revolving line of credit 89,500 — Proceeds from long-term debt 115,000 — Repayment of long-term debt (5,188 ) (28,750 ) Debt issuance costs paid (665 ) — Cash received from issuance of common stock 2,893 5,652 Other, net (489 ) (588 ) Net cash provided by (used in) financing activities 201,051 (23,686 ) Effect of exchange rate changes on cash and cash equivalents (56 ) — Net (decrease) increase in cash, cash equivalents and restricted cash (45,823 ) 43,668 Cash, cash equivalents and restricted cash - beginning of period 120,778 43,353 Cash, cash equivalents and restricted cash - end of period $ 74,955 $ 87,021 e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP net income to non-GAAP adjusted EBITDA (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Interest expense, net 3,985 463 3,021 1,912 Income tax provision 3,528 4,277 16,673 10,531 Depreciation and amortization 10,272 4,386 20,445 13,399 EBITDA $ 44,673 $ 28,231 $ 153,275 $ 71,126 Stock-based compensation 11,042 7,257 29,459 21,833 Impairment of equity investment (a) — — 1,720 — Loss on extinguishment of debt (b) — 176 — 176 Other non-cash and non-recurring items (c) 3,378 938 9,357 2,403 Adjusted EBITDA $ 59,093 $ 36,602 $ 193,811 $ 95,538 (a) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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 other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. e.l.f. Beauty, Inc. and subsidiaries Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A (unaudited) (in thousands) Three months ended December 31, Nine months ended December 31, 2023 2022 2023 2022 Selling, general and administrative expenses $ 160,121 $ 75,434 $ 364,246 $ 201,172 Stock-based compensation (11,051 ) (7,239 ) (29,464 ) (21,810 ) Other non-recurring items (a) (1,726 ) — (5,267 ) — Adjusted selling, general and administrative expenses $ 147,344 $ 68,195 $ 329,515 $ 179,362 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. 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 December 31, Nine months ended December 31, 2023 2022 2023 2022 Net income $ 26,888 $ 19,105 $ 113,136 $ 45,284 Stock-based compensation 11,042 7,257 29,459 21,833 Other non-recurring items (a) 2,056 — 5,597 — Impairment of equity investment (b) — — 1,720 — Loss on extinguishment of debt (c) — 176 — 176 Amortization of acquired intangible assets (d) 6,128 2,031 10,183 6,093 Tax Impact (e) (3,219 ) (1,767 ) (7,174 ) (5,402 ) Adjusted net income $ 42,895 $ 26,802 $ 152,921 $ 67,984 Weighted average number of shares outstanding – diluted 58,030,115 55,840,137 57,550,094 54,906,065 Adjusted diluted earnings per share $ 0.74 $ 0.48 $ 2.66 $ 1.24 (a) Represents other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. (b) Represents an impairment of equity investment recorded during the nine months ended December 31, 2023. (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/20240206988092/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