OAKLAND, California
,
August 1, 2023
(press release)
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– Delivered 76% Net Sales Growth – – Gained 260 Basis Points of Market Share – – Raises Fiscal 2024 Outlook – e.l.f. Beauty (NYSE: ELF) today announced results for the three months ended June 30, 2023. “We are off to a terrific start in our new fiscal year with net sales growth of 76% and market share gains of 260 basis points in Q1. This marks our 18th consecutive quarter of delivering both net sales growth and market share gains. We are one of only five publicly traded consumer companies out of 274 that has grown for 18 straight quarters and averaged at least 20% sales growth per quarter over that period,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. “As we look ahead, we believe we are in the early innings of unlocking the full potential we see for e.l.f. Beauty and are raising our fiscal 2024 outlook to reflect our continued momentum.” Three Months Ended June 30, 2023 Results For the three months ended June 30, 2023, compared to the three months ended June 30, 2022: Balance Sheet As of June 30, 2023, the Company had
Updated Fiscal 2024 Outlook The Company is providing the following updated outlook for fiscal 2024. The updated outlook for fiscal 2024 reflects an expected 37-39% year-over-year increase in net sales, as compared to an expected 22-24% increase previously. Updated Fiscal 2024 Outlook Previous Fiscal 2024 Outlook Net sales
Adjusted EBITDA
Adjusted effective tax rate 17-18% 21-22% Adjusted net income
Adjusted diluted earnings per share
Fiscal year ending diluted shares outstanding 57 million 57 million Webcast Details The Company will hold a webcast to discuss the results from its first quarter fiscal 2024 today, August 1, 2023, 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 For those unable to listen to the live broadcast, an archived version will be available at the same location.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 specialty retailers in the
Learn more by visiting https://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 expense or income related to stock-based compensation, impairment of equity investment 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 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. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income 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 expense or income related to stock-based compensation, other non-recurring items, impairment of equity investment, 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. 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 and those statements that we believe we are in the early innings of unlocking the full potential we see for e.l.f. Beauty. 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; 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 and comprehensive income (unaudited) (in thousands, except share and per share data) Three months ended June 30, 2023 2022 Net sales $ 216,339 $ 122,601 Cost of sales 63,767 39,616 Gross profit 152,572 82,985 Selling, general and administrative expenses 91,939 61,555 Operating income 60,633 21,430 Other income (expense), net 399 (1,663 ) Impairment of equity investment (1,720 ) — Interest income (expense), net 341 (663 ) Income before provision for income taxes 59,653 19,104 Income tax provision (6,676 ) (4,635 ) Net income $ 52,977 $ 14,469 Comprehensive income $ 52,977 $ 14,469 Net income per share: Basic $ 0.98 $ 0.28 Diluted $ 0.93 $ 0.27 Weighted average shares outstanding: Basic 53,938,136 51,707,160 Diluted 57,175,870 53,834,732 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated balance sheets (unaudited) (in thousands, except share and per share data) June 30, 2023 March 31, 2023 June 30, 2022 Assets Current assets: Cash and cash equivalents $ 142,549 $ 120,778 $ 72,248 Accounts receivable, net 90,531 67,928 52,281 Inventory, net 98,053 81,323 70,339 Prepaid expenses and other current assets 39,276 33,296 21,772 Total current assets 370,409 303,325 216,640 Property and equipment, net 7,581 7,874 9,339 Intangible assets, net 76,013 78,041 84,132 Goodwill 171,620 171,620 171,620 Investments 1,155 2,875 2,875 Other assets 31,103 31,866 29,251 Total assets $ 657,881 $ 595,601 $ 513,857 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt and capital lease obligations $ 5,431 $ 5,575 $ 5,793 Accounts payable 53,237 31,427 16,023 Accrued expenses and other current liabilities 51,037 70,974 39,916 Total current liabilities 109,705 107,976 61,732 Long-term debt and finance lease obligations 59,612 60,881 89,684 Deferred tax liabilities 5,855 3,742 13,538 Long-term operating lease obligations 10,137 11,201 14,637 Other long-term liabilities 870 784 817 Total liabilities 186,179 184,584 180,408 Stockholders' equity: Common stock, par value of
543 535 517 Additional paid-in capital 840,181 832,481 801,992 Accumulated deficit (369,022 ) (421,999 ) (469,060 ) Total stockholders' equity 471,702 411,017 333,449 Total liabilities and stockholders' equity $ 657,881 $ 595,601 $ 513,857 e.l.f. Beauty, Inc. and subsidiaries Condensed consolidated statements of cash flows (unaudited) (in thousands) Three months ended June 30, 2023 2022 Cash flows from operating activities: Net income $ 52,977 $ 14,469 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,637 5,724 Stock-based compensation expense 7,200 6,542 Amortization of debt issuance costs and discount on debt 75 91 Deferred income taxes 2,113 3,945 Impairment of equity investment 1,720 — Other, net 71 21 Changes in operating assets and liabilities: Accounts receivable (22,615 ) (6,727 ) Inventory (16,729 ) 14,158 Prepaid expenses and other assets (8,094 ) (3,258 ) Accounts payable and accrued expenses 2,014 (3,442 ) Other liabilities (1,015 ) (945 ) Net cash provided by operating activities 23,354 30,578 Cash flows from investing activities: Purchase of property and equipment (616 ) (241 ) Net cash used in investing activities (616 ) (241 ) Cash flows from financing activities: Repayment of long-term debt (1,250 ) (1,250 ) Cash received from issuance of common stock 485 2 Other, net (202 ) (194 ) Net cash used in financing activities (967 ) (1,442 ) Net increase in cash and cash equivalents 21,771 28,895 Cash and cash equivalents - beginning of period 120,778 43,353 Cash and cash equivalents - end of period $ 142,549 $ 72,248 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, 2023 2022 Net income $ 52,977 $ 14,469 Interest income (expense), net (341 ) 663 Income tax provision 6,676 4,635 Depreciation and amortization 4,587 4,693 EBITDA $ 63,899 $ 24,460 Stock-based compensation 7,200 6,542 Impairment of equity investment (a) 1,720 — Other non-cash and non-recurring items (b) 1,481 679 Adjusted EBITDA $ 74,300 $ 31,681 (a) Represents an impairment of equity investment recorded during the three months ended June 30, 2023. 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, 2023 2022 Selling, general and administrative expenses $ 91,939 $ 61,555 Stock-based compensation (7,223 ) (6,549 ) Other non-recurring items (a) (352 ) — Adjusted selling, general and administrative expenses $ 84,364 $ 55,006 (a) Represents other non-recurring cloud computing ERP implementation costs. 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, 2023 2022 Net income $ 52,977 $ 14,469 Stock-based compensation 7,200 6,542 Other non-recurring items (a) 352 — Impairment of equity investment (b) 1,720 — Amortization of acquired intangible assets (c) 2,028 2,031 Tax Impact (d) (1,396 ) (1,917 ) Adjusted net income $ 62,881 $ 21,125 Weighted average number of shares outstanding – diluted 57,175,870 53,834,732 Adjusted diluted earnings per share $ 1.10 $ 0.39 (a) Represents other non-recurring cloud computing ERP implementation costs. View source version on businesswire.com: https://www.businesswire.com/news/home/20230801615723/en/ Investors: Media: Source: e.l.f. Beauty
(b) Represents other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications and cloud computing ERP implementation costs.
(b) Represents an impairment of equity investment recorded during the three months ended June 30, 2023.
(c) Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks.
(d) Represents the tax impact of the above adjustments.
KC Katten
VP, Corporate Development & Investor Relations, e.l.f. Beauty
KKatten@elfbeauty.com
Melinda Fried
Head of Corporate Communications, e.l.f. Beauty
mfried@elfbeauty.com
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