Sales increased 3.8%, or 5.0% in constant
currency1
Comparable store sales increased
3.7%
Sales yield2 increased 5.6% to $1.50
Board of Directors authorizes $50 million
share repurchase program
Savers Value Village, Inc. (NYSE: SVV), (the “Company”) today
announced financial results for the thirteen weeks ended September
30, 2023 (the “third quarter”).
Highlights for the Third Quarter,
Compared to the thirteen weeks ended October 1, 2022
- Net sales increased 3.8% to $392.7 million. Constant currency
net sales1 increased 5.0% to $397.4 million.
- Comparable store sales increased 3.7%, with the United States
and Canada up 3.3% and 4.3%, respectively.
- Sales yield2 increased 5.6% to $1.50 per pound.
- The Company opened three new stores during the third quarter,
ending the third quarter with 321 stores and increasing its store
count by 3.9%.
- Net loss and net loss per diluted share were $15.6 million and
$0.10, respectively.
- Adjusted net income1 and Adjusted net income per diluted share1
were $26.5 million and $0.16, respectively.
- Adjusted earnings before interest, taxes, depreciation and
amortization (“Adjusted EBITDA”)1 increased 6.3% to $91.0 million,
and Adjusted EBITDA margin1 increased 60 basis points to 23.2%.
Changes in foreign currency rates negatively impacted Adjusted
EBITDA1 by $1.5 million during the third quarter.
- Total active members enrolled in our U.S. and Canadian loyalty
programs increased 10% to 5.2 million at the end of the third
quarter.
1 Adjusted net income, Adjusted net income
per diluted share, Adjusted EBITDA and Adjusted EBITDA margin, as
well as amounts presented on a constant currency basis, are not
measures recognized under U.S. generally accepted accounting
principles (“GAAP”). For additional information on our use of
non-GAAP financial measures, see “Non-GAAP Financial Measures”,
“Constant Currency” and the accompanying financial tables which
reconcile GAAP financial measures to these non-GAAP measures
below.
2 Sales yield is presented on a currency
neutral and comparable store sales growth basis. We define sales
yield as retail sales generated per pound of processed volume.
Mark Walsh, Chief Executive Officer, commented, “We had a strong
third quarter and are pleased with our performance and execution of
our business strategy. Constant currency net sales increased 5%,
comparable store sales grew 3.7% on increased transactions, and
despite a $1.5 million negative impact from foreign currency, we
grew Adjusted EBITDA by more than 6% to $91 million. Donations and
supply of goods remained very strong in the quarter, and for the
first time in Savers’ 70-year history, we reached over 5 million
members in our loyalty program, an increase of 10% over last year.
On the demand side, we experienced strong and consistent demand for
hard goods throughout much of the quarter and saw moderating demand
for soft goods with abnormally high temperatures throughout many
parts of North America in September. We adjusted our soft goods
processing volumes to better align expenses with demand levels,
maintain strong profitability levels, and deliver against our
Adjusted EBITDA targets.”
Mr. Walsh continued, “Over the past several years, we have made
significant structural changes that allow us to maximize Adjusted
EBITDA by focusing on higher quality goods and productivity
measures that align our inventory, processing volumes and labor
expenses with demand trends. This flexibility and adaptability of
our unique model enables us to drive profitable growth at
scale.”
Share Repurchase
Authorization
Savers Value Village announced today the authorization of a
share repurchase program of up to $50 million of the Company’s
common stock. Under the program, Savers may purchase shares from
time to time in compliance with applicable securities laws, that
may include Securities Act Rule 10b-18. The timing and amount of
any shares purchased will be based upon a variety of factors,
including the share price of the common stock, general market
conditions, alternative uses for capital, Savers’ financial
performance, and other considerations. The share repurchase program
does not obligate Savers to purchase any minimum number of shares,
and the program may be suspended, modified, or discontinued at any
time without prior notice. Any repurchases will be funded by
available cash and cash equivalents.
Fiscal 2023 Outlook
The Company is updating certain components of its annual
guidance for the fifty-two weeks ended December 30, 2023 (“fiscal
2023”) from its quarterly earnings release on August 10, 2023 as
follows:
- The opening of approximately 12 new stores (unchanged);
- Total net sales of approximately $1.49 billion (from $1.51
billion);
- Comparable store sales growth of 0% to 1.0% for the fourth
quarter (no previous guidance), resulting in a fiscal 2023 increase
of approximately 4.0% (from 5.0%);
- Net income of approximately $24 million (from $23
million);
- Adjusted net income of approximately $99 million1 (from $98
million);
- Adjusted EBITDA of approximately $320 million2
(unchanged);
- Capital expenditures in the range of $100 to $105 million
(unchanged); and
- GAAP-based diluted weighted average common shares outstanding
of approximately 157 million (from 160 million).
Since providing our prior outlook, our estimated average
exchange rate for the fourth quarter has decreased to $0.725 from
$0.75 for the Canadian dollar, negatively impacting the Company’s
fourth quarter sales and adjusted EBITDA estimates by approximately
$6 million and $1 million, respectively.
1 Adjusted net income is not a measure
recognized under U.S. GAAP. For additional information on our use
of non-GAAP financial measures, see “Non-GAAP Financial Measures”
and the accompanying financial tables which reconcile GAAP
financial measures to non-GAAP measures below.
2 We have not reconciled guidance for
Adjusted EBITDA to the corresponding GAAP financial measure because
we cannot determine the probable significance of the various
reconciling items, as certain items are outside of our control and
cannot be reasonably predicted due to the fact that these items
could vary significantly period to period. Accordingly,
reconciliations to the corresponding GAAP financial measure is not
available without unreasonable effort.
Initial Public Offering
On July 3, 2023, the Company completed its initial public
offering (“IPO”) for the sale of 18.8 million shares of its common
stock at a public offering price of $18.00 per share. On July 3,
2023 and July 5, 2023, respectively, the Company used the net
proceeds from its IPO together with cash on its balance sheet to
redeem $55.0 million aggregate principal amount of Notes and to
repay $252.4 million aggregate principal amount of outstanding
borrowings under the Term Loan Facility. In addition to paying
accrued interest on these borrowings, the Company also paid a
premium of 3%, or $1.7 million, on the partial redemption of the
Notes. These transactions resulted in a loss on extinguishment of
debt of $10.6 million. At the end of the third quarter, the
Company’s net leverage was 2.2x which we define as total debt less
unrestricted cash, divided by Adjusted EBITDA for the trailing
twelve months.
Conference Call
Information
A conference call to discuss the third quarter financial results
is scheduled for today, November 9, 2023, at 4:30 p.m. ET.
Investors and analysts who wish to participate in the call are
invited to dial +1 888 414-4463 (international callers, please dial
+1 646 960-0375) approximately 10 minutes prior to the start of the
call. Please reference Conference ID 7255126 when prompted. A live
webcast of the conference call will be available over the Internet,
which you may access by logging on to the Investor Relations
section on the Company’s website at
https://ir.savers.com/events-and-presentations/default.aspx.
A recorded replay of the call will be available shortly after
the conclusion of the call and remain available until November 23,
2023. To access the telephone replay, dial +1 800 770-2030
(international callers, please dial +1 647 362-9199). The access
code for the replay is 7255126. A replay of the webcast will also
be available within two hours of the conclusion of the call and
will remain available on the website for one year.
About the Savers Value Village™ family of thrift
stores
As the largest for-profit thrift operator in the United States
and Canada for value priced pre-owned clothing, accessories and
household goods, our mission is to champion reuse and inspire a
future where secondhand is second nature. Learn more about the
Savers family of thrift stores, our impact, and the #ThriftProud
movement at savers.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward looking statements can be identified by words such as
“could,” “may,” “might,” “will,” “likely,” “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,”
“continues,” “projects” and similar references to future periods,
or by the inclusion of forecasts or projections, the outlook for
the Company’s future business, prospects, financial performance,
including the amount and timing of any repurchases of common stock
under its share repurchase program, its fiscal 2023 outlook or
financial guidance, and industry outlook. Forward-looking
statements are based on the Company’s current expectations and
assumptions regarding its business, the economy and other future
conditions. Because forward-looking statements relate to the
future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, the Company’s actual results may
differ materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include regional, national or global political, economic, business,
competitive, market and regulatory conditions, including, but not
limited to, legislation, national trade policy, and the following:
the Company’s failure to adequately procure and manage its
inventory or anticipate consumer demand; changes in consumer
confidence and spending; risks associated with its status as a
“brick and mortar” only retailer; risks associated with intense
competition; its failure to open new profitable stores, or
successfully enter new markets on a timely basis or at all; the
risks associated with doing business with international
manufacturers and suppliers including, but not limited to,
transportation and shipping challenges, and potential increases in
tariffs on imported goods; outbreak of viruses or widespread
illness, including the continued impact of COVID-19 and continuing
or renewed regulatory responses thereto; risks associated with
heightened geopolitical instability due to the Russia/Ukraine
conflict; its inability to operate its stores due to civil unrest
and related protests or disturbances; its failure to properly hire
and to retain key personnel and other qualified personnel; its
inability to obtain favorable lease terms for its properties; the
failure to timely acquire, develop and open, the loss of, or
disruption or interruption in the operations of, its centralized
distribution centers; fluctuations in comparable store sales and
results of operations, including on a quarterly basis; risks
associated with its lack of operations in the growing online retail
marketplace; risks associated with litigation, the expense of
defense, and the potential for adverse outcomes; its inability to
successfully develop or implement its marketing, advertising and
promotional efforts; the seasonal nature of its business; risks
associated with the timely and effective deployment, protection,
and defense of computer networks and other electronic systems,
including e-mail; changes in government regulations, procedures and
requirements; risks associated with natural disasters, whether or
not caused by climate change; and its ability to service
indebtedness and to comply with its financial covenants together
with each of the other factors set forth under the heading “Risk
Factors” in its filings with the United States Securities and
Exchange Commission (“SEC”). Any forward-looking statement made by
us in this press release speaks only as of the date on which it is
made. Factors or events that could cause the Company’s actual
results to differ materially from those in the forward-looking
statements may emerge from time to time, and it is not possible for
us to predict all of them. The Company is not under any obligation
(and specifically disclaims any such obligation) to update or alter
these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Non-GAAP Financial Measures
The Company reports its financial results in accordance with
GAAP. Adjusted net income, Adjusted net income per diluted share,
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial
measures. The Company has included these non-GAAP measures in this
press release as these are key measures used by its management and
its board of directors to evaluate its operating performance and
the effectiveness of its business strategies, make budgeting
decisions, and evaluate compensation decisions. Adjusted net
income, Adjusted net income per diluted share, Adjusted EBITDA and
Adjusted EBITDA margin have limitations as analytical tools and you
should not consider them in isolation or as a substitute for
analysis of the Company’s results as reported under GAAP. There are
limitations to using non-GAAP financial measures, including those
amounts presented in accordance with the Company’s definitions of
Adjusted net income, Adjusted net income per diluted share,
Adjusted EBITDA and Adjusted EBITDA margin, as they may not be
comparable to similar measures disclosed by its competitors,
because not all companies and analysts calculate Adjusted net
income, Adjusted net income per diluted share, Adjusted EBITDA and
Adjusted EBITDA margin in the same manner. Because of these
limitations, you should consider Adjusted net income, Adjusted net
income per diluted share, Adjusted EBITDA and Adjusted EBITDA
margin alongside other financial performance measures, including,
as applicable, net income and the Company’s other GAAP results. The
Company presents Adjusted net income, Adjusted net income per
diluted share, Adjusted EBITDA and Adjusted EBITDA margin because
we consider these meaningful measures to share with investors
because they best allow comparison of the performance of one period
with that of another period. In addition, Adjusted net income,
Adjusted net income per diluted share, Adjusted EBITDA and Adjusted
EBITDA margin afford investors a view of what management considers
its operating performance to be and the ability to make a more
informed assessment of such operating performance as compared with
that of the prior period.
Adjusted net income is defined as net (loss) income excluding
the impact of loss on extinguishment of debt, non-recurring
stock-based compensation expense, transaction costs,
dividend-related bonus, certain other expenses, and the tax effect
on the above adjustments. The Company defines Adjusted net income
per diluted share as Adjusted net income divided by diluted
weighted average common shares outstanding.
The Company defines Adjusted EBITDA as net (loss) income before
interest expense, net, income tax expense, and depreciation and
amortization, adjusted to exclude loss on extinguishment of debt,
stock-based compensation expense, non-cash occupancy-related costs,
lease intangible asset expense, pre-opening expenses, store closing
expenses, executive transition costs, transaction costs,
dividend-related bonus, and certain other adjustments. The Company
defines Adjusted EBITDA margin as Adjusted EBITDA divided by net
sales.
Constant Currency
The Company reports certain operating results on a
constant-currency basis in order to facilitate period-to-period
comparisons of its results without regard to the impact of
fluctuating foreign currency exchange rates. The term foreign
currency exchange rates refer to the exchange rates used to
translate the Company's operating results for all countries where
the functional currency is not the U.S. Dollar into U.S. Dollars.
Because the Company is a global company, foreign currency exchange
rates used for translation may have a significant effect on its
reported results. In general, the Company's financial results are
affected positively by a weaker U.S. Dollar and are affected
negatively by a stronger U.S. Dollar. References to operating
results on a constant-currency basis mean operating results without
the impact of foreign currency exchange rate fluctuations.
The Company believes disclosure of constant-currency results is
helpful to investors because it facilitates period-to-period
comparisons of its results by increasing the transparency of its
underlying performance by excluding the impact of fluctuating
foreign currency exchange rates. However, constant-currency results
are non-GAAP financial measures and are not meant to be considered
as an alternative or substitute for comparable measures prepared in
accordance with GAAP. Constant-currency results have no
standardized meaning prescribed by GAAP, are not prepared under any
comprehensive set of accounting rules or principles and should be
read in conjunction with the Company's consolidated financial
statements prepared in accordance with GAAP. Constant-currency
results have limitations in their usefulness to investors and may
be calculated differently from, and therefore may not be directly
comparable to, similarly titled measures used by other
companies.
Constant currency information compares results between periods
as if exchange rates had remained constant period-over-period.
During the thirteen and thirty-nine weeks ended September 30, 2023,
as compared to the thirteen and thirty-nine weeks ended October 1,
2022, the U.S. dollar was stronger relative to the Canadian and
Australian dollars which resulted in an unfavorable foreign
currency impact on our operating results. To present constant
currency information, our current operating results in currencies
other than the U.S. dollar are converted into U.S. dollars using
the average exchange rates from the comparative prior period rather
than the actual average exchange rates in effect.
SAVERS VALUE VILLAGE, INC.
Condensed Consolidated Balance Sheets
(All amounts in thousands, except
per share amounts, unaudited)
September 30, 2023
December 31, 2022
Current assets:
Cash and cash equivalents
$
125,307
$
112,132
Trade receivables, net of allowance for
doubtful accounts
11,955
14,092
Inventories
36,007
21,822
Prepaid expenses and other current
assets
25,021
35,647
Derivative asset – current
10,006
8,625
Total current assets
208,296
192,318
Property and equipment, net
218,150
190,518
Right-of-use lease assets
482,648
437,843
Goodwill
680,798
681,447
Intangible assets, net
167,236
170,651
Derivative asset – non-current
31,216
31,077
Other assets
3,251
3,961
Total assets
$
1,791,595
$
1,707,815
Current liabilities:
Accounts payable and accrued
liabilities
$
80,650
$
80,748
Accrued payroll and related taxes
56,368
62,046
Lease liabilities – current
80,284
79,838
Current portion of long-term debt and
short-term borrowings
6,000
50,250
Total current liabilities
223,302
272,882
Long-term debt, net
783,295
783,347
Lease liabilities – non-current
398,231
349,194
Deferred tax liabilities, net
59,278
63,141
Other liabilities
14,347
11,916
Total liabilities
1,478,453
1,480,480
Stockholders’ equity:
Preferred stock
—
—
Common stock
—
—
Additional paid-in capital
571,475
226,327
Accumulated deficit
(291,413
)
(38,443
)
Accumulated other comprehensive income
33,080
39,451
Total stockholders’ equity
313,142
227,335
Total liabilities and stockholders’
equity
$
1,791,595
$
1,707,815
SAVERS VALUE VILLAGE, INC.
Condensed Consolidated Statements of (Loss) Income
(All amounts in thousands, except
per share amounts, unaudited)
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Amount
% of
Sales
Amount
% of
Sales
Amount
% of
Sales
Amount
% of
Sales
Net sales
$
392,698
100.0
%
$
378,292
100.0
%
$
1,117,484
100.0
%
$
1,070,427
100.0
%
Operating expenses:
Cost of merchandise sold, exclusive of
depreciation and amortization
158,252
40.3
152,623
40.3
458,950
41.1
443,372
41.4
Salaries, wages and benefits
116,114
29.6
68,107
18.0
276,088
24.7
199,643
18.7
Selling, general and administrative
82,076
20.8
78,465
20.8
232,380
20.8
227,236
21.2
Depreciation and amortization
15,911
4.1
13,418
3.5
45,088
4.0
40,110
3.7
Total operating expenses
372,353
94.8
312,613
82.6
1,012,506
90.6
910,361
85.0
Operating income
20,345
5.2
65,679
17.4
104,978
9.4
160,066
15.0
Other (expense) income:
Interest expense, net
(18,708
)
(4.8
)
(16,454
)
(4.3
)
(70,912
)
(6.3
)
(45,855
)
(4.3
)
(Loss) gain on foreign currency, net
(195
)
—
(18,371
)
(4.9
)
5,587
0.5
(26,639
)
(2.5
)
Other (expense) income, net
(45
)
—
154
—
173
—
209
—
Loss on extinguishment of debt
(10,615
)
(2.7
)
—
—
(16,626
)
(1.5
)
(1,023
)
(0.1
)
Other expense, net
(29,563
)
(7.5
)
(34,671
)
(9.2
)
(81,778
)
(7.3
)
(73,308
)
(6.9
)
(Loss) income before income taxes
(9,218
)
(2.3
)
31,008
8.2
23,200
2.1
86,758
8.1
Income tax expense
6,394
1.7
15,511
4.1
13,957
1.3
28,472
2.7
Net (loss) income
$
(15,612
)
(4.0
)%
$
15,497
4.1
%
$
9,243
0.8
%
$
58,286
5.4
%
Net (loss) income per share, basic
$
(0.10
)
$
0.11
$
0.06
$
0.41
Net (loss) income per share, diluted
$
(0.10
)
$
0.11
$
0.06
$
0.40
Basic weighted average shares
outstanding
160,247
141,551
147,885
141,551
Diluted weighted average shares
outstanding
160,247
146,124
153,134
146,124
SAVERS VALUE VILLAGE, INC.
Condensed Consolidated Statements of Cash Flows
(All amounts in thousands,
unaudited)
Thirty-Nine Weeks
Ended
September 30, 2023
October 1, 2022
Cash flows from operating
activities:
Net income
$
9,243
$
58,286
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock-based compensation expense
50,970
1,081
Amortization of debt issuance costs and
debt discount
4,631
2,974
Depreciation and amortization
45,088
40,110
Operating lease expense
89,204
86,109
Deferred income taxes, net
(3,725
)
14,001
Loss on extinguishment of debt
16,626
1,023
Other items
(12,714
)
34,890
Changes in operating assets and
liabilities:
Trade receivables
341
(9,222
)
Inventories
(14,227
)
(6,002
)
Prepaid expenses and other current
assets
3,675
(10,020
)
Accounts payable and accrued
liabilities
2,456
4,780
Accrued payroll and related taxes
(5,519
)
(17,026
)
Operating lease liabilities
(84,081
)
(82,876
)
Other liabilities
2,434
(475
)
Net cash provided by operating
activities
104,402
117,633
Cash flows from investing
activities:
Purchases of property and equipment
(74,579
)
(80,624
)
Purchase of trade name
(650
)
—
Settlement of derivative instruments,
net
(199
)
(774
)
Net cash used in investing activities
(75,428
)
(81,398
)
Cash flows from financing
activities:
Proceeds from issuance of long-term debt,
net
529,247
—
Principal payments on long-term debt
(546,431
)
(8,929
)
Payment of debt issuance costs
(4,359
)
(161
)
Prepayment premium on extinguishment of
debt
(1,650
)
(1,023
)
Advances on revolving line of credit
42,000
53,000
Repayments of revolving line of credit
(84,000
)
(53,000
)
Dividends paid
(262,235
)
—
Proceeds from initial public offering, net
of underwriting fees
314,719
—
Payment of offering costs
(8,766
)
—
Repurchase of shares and shares withheld
to cover taxes
(849
)
(292
)
Settlement of derivative instrument,
net
6,213
(1,057
)
Net cash used in financing activities
(16,111
)
(11,462
)
Effect of exchange rate changes on cash
and cash equivalents
312
(6,774
)
Net change in cash and cash
equivalents
13,175
17,999
Cash and cash equivalents at beginning
of period
112,132
97,915
Cash and cash equivalents at end of
period
$
125,307
$
115,914
SAVERS VALUE VILLAGE, INC.
Supplemental Detail on Net (Loss) Income Per Common Share
Calculation
(Unaudited)
The following unaudited table
sets forth the computation of net (loss) income per basic and
diluted share as shown on the face of the accompanying condensed
consolidated statements of (loss) income:
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
(in thousands, except per share data)
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Numerator
Net (loss) income
$
(15,612
)
$
15,497
$
9,243
$
58,286
Denominator
Basic weighted average common shares
outstanding
160,247
141,551
147,885
141,551
Dilutive effect of employee stock options
and awards
—
4,573
5,249
4,573
Diluted weighted average common shares
outstanding
160,247
146,124
153,134
146,124
Net (loss) income per share
Basic
$
(0.10
)
$
0.11
$
0.06
$
0.41
Diluted
$
(0.10
)
$
0.11
$
0.06
$
0.40
SAVERS VALUE VILLAGE, INC.
Supplemental Detail on Net Sales by Segment
(Unaudited)
The following unaudited tables present net
sales by segment for the periods presented:
Thirteen Weeks Ended
(dollars in thousands)
September 30, 2023
October 1, 2022
$ Change
% Change
U.S. Retail
$
200,127
$
193,128
$
6,999
3.6
%
Canada Retail
163,518
156,572
6,946
4.4
Other
29,053
28,592
461
1.6
Total net sales
$
392,698
$
378,292
$
14,406
3.8
%
Thirty-Nine Weeks
Ended
(dollars in thousands)
September 30, 2023
October 1, 2022
$ Change
% Change
U.S. Retail
$
580,648
$
555,350
$
25,298
4.6
%
Canada Retail
450,280
434,433
15,847
3.6
Other
86,556
80,644
5,912
7.3
Total net sales
$
1,117,484
$
1,070,427
$
47,057
4.4
%
SAVERS VALUE VILLAGE, INC.
Supplemental Information Reconciliation of GAAP
to Non-GAAP Financial Measures (Unaudited)
The following information relates to non-GAAP financial measures
and should be read in conjunction with the investor call held on
November 9, 2023, discussing the Company’s financial condition and
results of operations for the third quarter.
A reconciliation of net (loss) income and net (loss) income per
diluted share on a GAAP basis to Adjusted net income and Adjusted
net income per diluted share for the thirteen and thirty-nine weeks
ended September 30, 2023 and October 1, 2022 is presented in the
table below:
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
(in thousands, except per share
amounts)
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net (loss)
income:
Net (loss) income
$
(15,612
)
$
15,497
$
9,243
$
58,286
Loss on extinguishment of debt(1)(2)
10,615
—
16,626
1,023
Non-recurring stock-based compensation
expense(1)(3)
48,298
—
48,324
—
Transaction costs(1)(4)
613
3,126
2,333
4,306
Dividend-related bonus(1)(5)
—
—
24,097
—
Loss (gain) on foreign currency,
net(1)
195
18,371
(5,587
)
26,639
Other adjustments(1)(6)
(381
)
(324
)
(845
)
3,032
Tax effect on adjustments
(17,209
)
(6,733
)
(24,635
)
(11,130
)
Adjusted net income
$
26,519
$
29,937
$
69,556
$
82,156
Net (loss) income
per share - diluted:
Net (loss) income per diluted share
$
(0.10
)
$
0.11
$
0.06
$
0.40
Loss on extinguishment of debt(1)(2)
0.06
—
0.11
0.01
Non-recurring stock-based compensation
expense(1)(3)
0.29
—
0.32
—
Transaction costs(1)(4)
—
0.02
0.02
0.03
Dividend-related bonus(1)(5)
—
—
0.16
—
Loss (gain) on foreign currency,
net(1)
—
0.13
(0.04
)
0.18
Other adjustments(1)(6)
—
—
(0.01
)
0.02
Tax effect on adjustments
(0.10
)
(0.05
)
(0.16
)
(0.08
)
Adjusted net income per diluted share*
$
0.16
$
0.20
$
0.45
$
0.56
*May not foot due to rounding
(1)
Presented pre-tax.
(2)
Removes the effects of the loss
on debt extinguishment in relation to the repayment of outstanding
borrowings under the Term Loan Facility on February 6, 2023 and
July 5, 2023, the redemption of aggregate principal amount of the
Senior Secured Notes on July 3, 2023, and the repayment of a
mortgage loan on January 6, 2022.
(3)
Reflects the commencement of
stock-based compensation expense upon completion of our IPO on July
3, 2023 related to performance-based options. Non-recurring
stock-based compensation expense further includes expense related
to restricted stock units issued in connection with the Company’s
IPO.
(4)
Transaction costs are comprised
of non-capitalizable expenses related to offering costs and the 2nd
Ave. acquisition, such as accounting, consulting and legal
fees.
(5)
Represents dividend-related bonus
and related taxes paid in conjunction with the Company’s February
2023 dividend.
(6)
Other adjustments include the
effect of asset disposals. The thirteen and thirty-nine weeks ended
September 30, 2023 further includes legal and insurance settlement
proceeds of $0.4 million and $0.9 million, respectively.
A reconciliation of the Company’s fiscal 2023 outlook for net
income on a GAAP basis to Adjusted net income is presented in the
table below:
Fifty-Two Weeks Ended
(in millions)
December 30, 2023
Net
income:
Net income
$
24
Loss on extinguishment of debt(1)(2)
17
Non-recurring stock-based compensation
expense(1)(3)
69
Transaction costs(1)(4)
3
Dividend-related bonus(1)(5)
24
Gain on foreign currency, net(1)
(6
)
Other adjustments(1)(6)
(1
)
Tax effect on adjustments
(31
)
Adjusted net income
$
99
(1)
Presented pre-tax.
(2)
Removes the effects of the loss
on debt extinguishment in relation to the repayment of outstanding
borrowings under the Term Loan Facility on February 6, 2023 and
July 5, 2023 and the redemption of aggregate principal amount of
the Senior Secured Notes on July 3, 2023.
(3)
Reflects the commencement of
stock-based compensation expense upon completion of our IPO on July
3, 2023 related to performance-based options. Non-recurring
stock-based compensation expense further includes expense related
to restricted stock units issued in connection with the Company’s
IPO.
(4)
Transaction costs are comprised
of non-capitalizable expenses related to offering costs and the 2nd
Ave. acquisition, such as accounting, consulting and legal
fees.
(5)
Represents dividend-related bonus
and related taxes paid in conjunction with the Company’s February
2023 dividend.
(6)
Includes legal and insurance
settlement proceeds of $0.9 million.
A reconciliation of GAAP net (loss) income to Adjusted EBITDA
for the thirteen and thirty-nine weeks ended September 30, 2023 and
October 1, 2022 is presented in the table below:
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
(dollars in thousands)
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net (loss) income
$
(15,612
)
$
15,497
$
9,243
$
58,286
Interest expense, net
18,708
16,454
70,912
45,855
Income tax expense
6,394
15,511
13,957
28,472
Depreciation and amortization
15,911
13,418
45,088
40,110
Loss on extinguishment of debt(1)
10,615
—
16,626
1,023
Stock-based compensation expense(2)
49,113
799
50,970
1,081
Non-cash occupancy-related costs(3)
1,654
(888
)
3,065
623
Lease intangible asset expense(4)
1,001
1,424
3,154
6,507
Pre-opening expenses(5)
2,635
1,088
5,227
3,708
Store closing expenses(6)
164
1,133
1,031
1,794
Executive transition costs(7)
—
—
—
1,124
Transaction costs(8)
613
3,126
2,333
4,306
Dividend-related bonus(9)
—
—
24,097
—
Loss (gain) on foreign currency, net
195
18,371
(5,587
)
26,639
Other adjustments(10)
(381
)
(324
)
(845
)
3,032
Adjusted EBITDA
$
91,010
$
85,609
$
239,271
$
222,560
Net (loss) income margin
(4.0
)%
4.1
%
0.8
%
5.4
%
Adjusted EBITDA margin
23.2
%
22.6
%
21.4
%
20.8
%
(1)
Removes the effects of the loss
on debt extinguishment in relation to the repayment of outstanding
borrowings under the Term Loan Facility on February 6, 2023 and
July 5, 2023, the redemption of aggregate principal amount of the
Senior Secured Notes on July 3, 2023, and the repayment of a
mortgage loan on January 6, 2022.
(2)
Represents non-cash stock based
compensation expense related to stock options and restricted stock
units granted to certain of the Company’s employees and
directors.
(3)
Represents the difference between
cash and straight-line lease expense for all periods.
(4)
Represents lease expense
associated with acquired lease intangibles. Prior to the adoption
of Topic 842, this expense was included within depreciation and
amortization.
(5)
Pre-opening expenses include
expenses incurred in the preparation and opening of new stores and
processing locations, such as payroll, training, travel, occupancy
and supplies.
(6)
Costs associated with the closing
of certain retail locations, including lease termination costs,
amounts paid to third parties for rent reduction negotiations, and
fees paid to landlords for store closings.
(7)
Represents severance costs
associated with executive leadership changes and the 2nd Ave.
Acquisition.
(8)
Transaction costs are comprised
of non-capitalizable expenses related to offering costs and the 2nd
Ave. acquisition, such as accounting, consulting and legal
fees.
(9)
Represents dividend-related bonus
and related taxes paid in conjunction with the Company’s February
2023 dividend.
(10)
Other adjustments include the
effect of asset disposals. The thirteen and thirty-nine weeks ended
September 30, 2023 further includes legal and insurance settlement
proceeds of $0.4 million and $0.9 million, respectively.
Constant-currency
The Company calculates constant-currency net sales by
translating current-period net sales using the average exchange
rates from the comparative prior period rather than the actual
average exchange rates in effect. The Company’s constant-currency
net sales are not financial measures prepared in accordance with
GAAP.
A reconciliation of GAAP net sales to constant-currency net
sales for the thirteen and thirty-nine weeks ended September 30,
2023 and October 1, 2022 is presented in the table below:
Thirteen Weeks Ended
(dollars in thousands)
September 30, 2023
October 1, 2022
$ Change
% Change
Net sales
$
392,698
$
378,292
$
14,406
3.8%
Impact of foreign currency
4,672
n/a
4,672
n/m
Constant-currency net sales
$
397,370
$
378,292
$
19,078
5.0%
Thirty-Nine Weeks
Ended
(dollars in thousands)
September 30, 2023
October 1, 2022
$ Change
% Change
Net sales
$
1,117,484
$
1,070,427
$
47,057
4.4%
Impact of foreign currency
22,743
n/a
22,743
n/m
Constant-currency net sales
$
1,140,227
$
1,070,427
$
69,800
6.5%
n/a - not applicable
n/m - not meaningful
Supplemental Metrics
We use the supplemental metrics below to evaluate the
performance of our business, identify trends, formulate financial
projections and make strategic decisions. The Company believes that
these metrics provide useful information to investors and others in
understanding and evaluating its results of operations in the same
manner as its management team.
The following table summarizes certain supplemental metrics for
the thirteen and thirty-nine weeks ended September 30, 2023 and
October 1, 2022:
Thirteen Weeks Ended
Thirty-Nine Weeks
Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Comparable Store Sales Growth
United States
3.3
%
4.1
%
4.8
%
4.6
%
Canada
4.3
%
9.4
%
6.1
%
33.4
%
Total(1)
3.7
%
8.0
%
5.4
%
16.3
%
Comparable Store Daily Sales
Growth
United States
n/m
4.1
%
n/m
4.6
%
Canada
n/m
9.4
%
n/m
4.3
%
Total(1)
n/m
6.2
%
n/m
2.9
%
Number of Stores
United States
152
149
152
149
Canada
157
150
157
150
Total(1)
321
309
321
309
Pounds processed (lbs mm)
249
255
734
751
Sales yield
$
1.50
$
1.42
$
1.46
$
1.36
n/m - not meaningful
(1)
Total comparable store sales
growth, total comparable store daily sales growth and total number
of stores includes the Company’s Australia retail locations, in
addition to the United States and Canada.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109472564/en/
Investor Contact: John Rouleau/Lyn Walther ICR, Inc.
Investors@savers.com
Media Contact: Edelman Smithfield | 713.299.4115 |
Savers@edelman.com Savers | 206.228.2261 | sgaugl@savers.com
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