Weber Inc. Reports Fiscal Third-Quarter 2022 Financial Results

Weber Inc. (“Weber” or “the Company”) (NYSE: WEBR), the global leader in outdoor cooking products, innovation, and technology, today announced its financial results for the fiscal third quarter 2022, ending June 30, 2022.

Weber reports its financial performance in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and as adjusted on a non-GAAP basis. Please see “Non-GAAP Financial Measures,” and “Reconciliation of GAAP to Non-GAAP Financial Information” below for additional information and reconciliations of the non-GAAP financial measures to the most comparable GAAP financial measures.

For the quarter, Weber generated net sales of $528 million, gross profit of $154 million, a net loss of $52 million, and Adjusted EBITDA of $11 million.

“Weber is the #1 brand and the global category leader in outdoor cooking. We have an immense opportunity to expand our relationship with the more than 50 million dedicated Weber consumers worldwide, as well as grow our reach in the near and long-term,” said Alan Matula, interim Chief Executive Officer of Weber. “Our third quarter performance reflects the margin pressures we are experiencing as a result of global headwinds in our current operating environment. To strengthen our financial position for fiscal year 2023 and beyond, we are introducing a comprehensive cash flow and cost management plan, which will position Weber to enhance its leadership position in a dynamic outdoor cooking market.”

FOR THE THREE MONTHS ENDED JUNE 30, 2022

• Net sales decreased 21%, to $528 million, from $669 million in the prior-year quarter. The decrease was driven by slower retail traffic, both in-store and online in all key markets, due to rising inflation, supply chain constraints, geopolitical uncertainty and fuel prices, as well as foreign currency devaluations within the quarter that impacted reported results. Foreign exchange accounted for $33 million of the sales reduction.
• Net sales decreased 19% in the Americas, to $274 million, from $339 million in the prior-year quarter. EMEA net sales decreased 24%, to $233 million, from $307 million in the prior-year quarter. APAC net sales decreased 5% to $22 million, from $23 million in the prior-year quarter.
  • Foreign currency negatively impacted net sales by $30 million and $2 million, in EMEA and APAC, respectively.
• Gross profit decreased 49% to $154 million, or 29.1% of net sales, compared to $299 million or 44.7% of net sales in the prior year. The year-over-year decrease in gross profit was primarily due to substantial freight and commodity cost increases as compared to the prior year, promotional activity to enhance retail sell through in a macro environment that has slowed foot traffic, negative country and product mix shift, and significant currency devaluations within the quarter, all partially offset by pricing actions in all regions.
• Net loss of $52 million compared to net income of $18 million in the prior-year quarter. Adjusted net loss was $19 million compared to adjusted net income of $85 million in the prior-year quarter.
• Adjusted EBITDA of $11 million compared to Adjusted EBITDA of $134 million in the prior-year quarter, driven by the gross margin pressures noted above, and partially offset by the initiated Selling, General, and Administrative expense reductions which will continue in subsequent quarters.

Subsequent to quarter end, as announced on July 25, 2022, the Weber Board of Directors suspended the quarterly cash dividend. The Company is assessing financing options to strengthen its balance sheet and is committed to working with its lending partners to remain in compliance with its credit agreement.

CASH FLOW AND COST MANAGEMENT PLAN

Following a detailed review, the Company has initiated a plan to manage cash flows, preserve liquidity, expand gross margins, and reduce SG&A expenses. The core components of this plan include the suspension of its quarterly cash dividend, a focused reduction of COGS and SG&A expenses, a reduction in force that removes management layers in the organization, and the tightening of global inventory levels and working capital positions. Management believes these actions will result in at least $110 million of cash benefit, net of restructuring costs, in fiscal year 2023, with run-rate benefits beyond that. More details on these initiatives will be provided on the Company’s fiscal third quarter 2022 conference call.

FISCAL Q3 2022 INVESTOR CONFERENCE CALL

A conference call to discuss these fiscal third quarter 2022 financial results is scheduled for today, August 15, 2022, at 7:30 a.m. Central Time. Investors and analysts are invited to dial 833-927-1758 (international callers, please dial 929-526-1599) approximately 10 minutes before the start of the call. Please reference Conference ID 460992 when prompted. A live webcast of the conference call and supporting materials will be available on the Weber investor relations website, https://investors.weber.com. In addition, a replay and transcript of the webcast will be posted to the same website once available.

ABOUT WEBER INC.

Weber Inc. headquartered in Palatine, Ill., is the world’s leading barbecue brand. Weber’s founder George Stephen, Sr., established the outdoor cooking category when he invented the original kettle charcoal grill 70 years ago. Weber offers a comprehensive, innovative product portfolio, including charcoal, gas, pellet and electric grills, smokers, and accessories designed to help outdoor cooking enthusiasts discover what’s possible. Weber offers its barbecue grills and accessories, services, and experiences to a passionate community of millions across 78 countries.

NON-GAAP FINANCIAL MEASURES

This press release contains certain financial measures not presented in accordance with GAAP, including Adjusted EBITDA and Adjusted Net (Loss) Income, which are used by management in making operating decisions, allocating financial resources, and internal planning and forecasting and for business strategy purposes. Adjusted EBITDA and Adjusted Net (Loss) Income are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. The use of non-GAAP financial information should not be considered as an alternative to, or more meaningful than, the comparable GAAP measures. In addition, because our non-GAAP measures are not determined in accordance with GAAP, it is susceptible to differing calculations, and not all comparable or peer companies may calculate their non-GAAP measures in the same manner.

Management believes that such measures are commonly reported by issuers and widely used by investors as indicators of a company’s operating performance. Please refer to the reconciliations of Adjusted EBITDA and Adjusted Net (Loss) Income to the most directly comparable financial measures prepared in accordance with GAAP below.

FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Weber’s expectations or beliefs concerning future events. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K, for the year ended September 30, 2021, and in our Quarterly Reports on Form 10-Q.

Our future results could be affected by a variety of other factors, including: uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions of the COVID-19 outbreak; the current, and uncertain future, impact of the COVID-19 outbreak on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), and cash flows and liquidity; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; the ability to realize the anticipated benefits and synergies from business acquisitions in the amounts and at the times expected; the impact of competitive conditions; the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles; the success of productivity improvements and business transitions; commodity and energy prices; transportation costs; labor costs; disruptions or inefficiencies in supply chain; the availability of and interest rates on short-term and long-term financing; the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs; changes in consumer behavior and preferences; the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability; legal and regulatory factors including the impact of any product recalls; and business disruption or other losses from war, pandemic, terrorist acts or political unrest. 

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