Provides Fiscal Year 2024 Outlook
SharkNinja, Inc. (“SharkNinja” or the “Company”) (NYSE: SN), a
global product design and technology company, today announced its
financial results for the fourth quarter and year ended December
31, 2023.
Highlights for the Fourth Quarter 2023 as compared to the
Fourth Quarter 2022
- Net sales increased 16.5% to $1,377.5 million and Adjusted Net
Sales increased 19.7% to $1,377.5 million.
- Gross margin and Adjusted Gross Margin increased 940 and 970
basis points, respectively.
- Operating income increased 87.3% to $100.8 million. Adjusted
Operating Income increased 74.6% to $200.2 million.
- Net income increased 5.8% to $49.3 million. Adjusted Net Income
increased 75.2% to $132.1 million.
- Adjusted EBITDA increased 70.8% to $219.3 million, or 15.9% of
Adjusted Net Sales.
Highlights for the Year Ended 2023 as compared to the Year
Ended 2022
- Net sales increased 14.4% to $4,253.7 million and Adjusted Net
Sales increased 15.4% to $4,176.2 million.
- Gross margin and Adjusted Gross Margin increased 700 and 690
basis points, respectively.
- Operating income increased 16.2% to $373.6 million. Adjusted
Operating Income increased 40.9% to $638.3 million.
- Net income decreased 28.1% to $167.1 million. Adjusted Net
Income increased 36.0% to $449.3 million.
- Adjusted EBITDA increased 38.5% to $719.7 million, or 17.2% of
Adjusted Net Sales.
Mark Barrocas, Chief Executive Officer, commented, “SharkNinja
extended its track record of exceptional organic growth and
profitability in 2023 and expanded its innovative suite of
products. We are delighting consumers with the highest performing
products and scaling innovation around the world. Our brands have
strong momentum heading into 2024, and we continue to introduce new
products, enter new categories, and grow our international
footprint. The SharkNinja team has built a unique culture and
innovation engine that will propel us in the year ahead. We are
confident that our strategy positions us to reach every living
room, bedroom, kitchen, and backyard while driving long-term
returns for our stakeholders.”
Three Months Ended December 31, 2023
Net sales increased 16.5% to $1,377.5 million, compared to
$1,182.6 million during the same period last year. Adjusted Net
Sales increased 19.7% to $1,377.5 million, compared to $1,151.1
million during the same period last year, or 17.9% on a constant
currency basis. The increase in net sales and Adjusted Net Sales
resulted primarily from growth in the Cooking and Beverage
Appliances, Food Preparation Appliances and other net sales product
categories, partially offset by a decrease in the Cleaning
Appliances product category.
- Cleaning Appliances net sales decreased by $38.7 million, or
6.7%, to $541.5 million, compared to $580.2 million in the prior
year quarter. Adjusted Net Sales of Cleaning Appliances decreased
by $14.8 million, or 2.7%, from $556.3 million to $541.5 million,
driven by softness in the North America market for corded and
cordless vacuums. This net sales decline was partially offset by
growth in the carpet extraction sub-category driven by new product
innovation.
- Cooking and Beverage Appliances net sales increased by $120.5
million, or 31.5%, to $502.6 million, compared to $382.0 million in
the prior year quarter. Adjusted Net Sales of Cooking and Beverage
Appliances increased by $123.6 million, or 32.6%, from $379.0
million to $502.6 million, driven by growth in Europe, specifically
in the United Kingdom, where we strengthened our leading market
position.
- Food Preparation Appliances net sales increased by $17.9
million, or 11.0%, to $180.9 million, compared to $163.0 million in
the prior year quarter. Adjusted Net Sales of Food Preparation
Appliances increased by $22.6 million, or 14.3%, from $158.4
million to $180.9 million, driven by strong sales of our ice cream
makers and compact blenders, led by the launch of our new portable
blenders.
- Net sales and Adjusted Net Sales in the other category
increased by $95.1 million, or 165.6%, to $152.5 million, compared
to $57.4 million in the prior year quarter, primarily driven by
continued strength of haircare products within the beauty category
and air purifiers.
Gross profit increased 47.1% to $622.9 million, or 45.2% of net
sales, compared to $423.3 million, or 35.8% of net sales, in the
fourth quarter of 2022. Adjusted Gross Profit increased 50.4% to
$652.7 million, or 47.4% of Adjusted Net Sales, compared to $434.0
million, or 37.7% of Adjusted Net Sales in the fourth quarter of
2022. The increase in gross margin and Adjusted Gross Margin of 940
and 970 basis points, respectively, was primarily driven by
continued supply chain tailwinds, cost optimization efforts, and
category mix.
Research and development expenses increased 23.8% to $69.0
million, or 5.0% of net sales, compared to $55.7 million, or 4.7%
of net sales, in the prior year quarter. This increase was
primarily driven by incremental personnel-related expenses of $10.9
million due to increased headcount to support new product
categories and new market expansion, of which $3.4 million is
attributable to increased share-based compensation.
Sales and marketing expenses increased 52.1% to $329.6 million,
or 23.9% of net sales, compared to $216.6 million, or 18.3% of net
sales, in the fourth quarter of 2022. This increase was primarily
attributable to an increase of $62.8 million in advertising-related
expenses to support our launch into new markets and new
sub-categories; an increase of $11.7 million in personnel-related
expenses driven by additional headcount to support overall growth,
an $8.2 million related party bonus paid in December 2023, and an
increase in share-based compensation of $2.5 million; an increase
of $18.3 million in delivery and distribution costs driven by
higher volumes, particularly in our direct-to-consumer (“DTC”)
business; and an increase of $5.3 million in consulting fees.
General and administrative expenses increased 27.2% to $123.6
million, or 9.0% of net sales, compared to $97.2 million, or 8.2%
of net sales in the prior year quarter. This increase was primarily
driven by an increase of $3.1 million of costs related to the
separation and distribution from JS Global and secondary offering;
an increase of $11.7 million in personnel-related expenses driven
by additional headcount to support overall growth, including an
increase in share-based compensation of $16.5 million that was
offset by a decrease in discretionary and related party bonuses of
$10.0 million; and an increase in legal fees of $3.2 million.
Operating income increased 87.3% to $100.8 million, or 7.3% of
net sales, compared to $53.8 million, or 4.5% of net sales, during
the prior year. Adjusted Operating Income increased 74.6% to $200.2
million, or 14.5% of Adjusted Net Sales, compared to $114.7
million, or 10.0% of Adjusted Net Sales, in 2022.
Net income increased 5.8% to $49.3 million, or 3.6% of net
sales, compared to $46.6 million, or 3.9% of net sales, in the
prior year. Net income per diluted share increased 4.8% to $0.35,
compared to $0.34 in the prior year.
Adjusted Net Income increased 75.2% to $132.1 million, or 9.6%
of Adjusted Net Sales, compared to $75.4 million, or 6.6% of
Adjusted Net Sales, in the prior year. Adjusted Net Income per
diluted share increased 73.6% to $0.94, compared to $0.54 in the
prior year.
Adjusted EBITDA increased 70.8% to $219.3 million, or 15.9% of
Adjusted Net Sales, compared to $128.4 million, or 11.2% of
Adjusted Net Sales in the prior year.
Year Ended December 31, 2023
Net sales increased 14.4% to $4,253.7 million, compared to
$3,717.4 million during the prior year. Adjusted Net Sales
increased 15.4% to $4,176.2 million, compared to $3,619.9 million
during the prior year, or 15.0% on a constant currency basis. The
increase in net sales resulted primarily from growth in the Cooking
and Beverage Appliances, Food Preparation Appliances and other net
sales product categories, partially offset by a decrease in the
Cleaning Appliances product category.
- Cleaning Appliances net sales decreased by $112.3 million, or
5.8%, to $1,819.5 million, compared to $1,931.7 million in the
prior year. Adjusted Net Sales of Cleaning Appliances decreased by
$87.5 million, or 4.7%, from $1,857.5 million to $1,770.1 million,
driven by softness in the North America market for corded and
cordless vacuums. This net sales decline was partially offset by
growth in the carpet extraction sub-category driven by new product
innovation.
- Cooking and Beverage Appliances net sales increased by $363.0
million, or 33.7%, to $1,441.6 million, compared to $1,078.6
million in the prior year. Adjusted Net Sales of Cooking and
Beverage Appliances increased by $365.8 million, or 34.2%, from
$1,069.7 million to $1,435.5 million, driven by growth in Europe,
specifically in the United Kingdom, where we strengthened our
leading market position. Our global growth was further supported by
the full year of sales of our outdoor grill that launched in the
second half of 2022, which continues to perform well across the US
and European markets.
- Food Preparation Appliances net sales increased by $63.2
million, or 10.7%, to $653.6 million, compared to $590.4 million in
the prior year. Adjusted Net Sales of Food Preparation Appliances
increased by $69.2 million, or 12.0%, from $576.1 million to $645.3
million, driven by strong sales of our ice cream makers and compact
blenders, led by the launch of our new portable blenders.
- Other net sales increased by $222.4 million, or 190.8%, to
$339.0 million, compared to $116.6 million in the prior year.
Adjusted Net Sales in the other category increased by $208.7
million, or 179.0%, from $116.6 million to $325.3 million,
primarily driven by continued strength of haircare products within
the beauty category and air purifiers.
Gross profit increased 35.3% to $1,907.9 million, or 44.9% of
net sales, compared to $1,410.2 million, or 37.9% of net sales, in
2022. Adjusted Gross Profit increased 35.3% to $1,958.6 million, or
46.9% of Adjusted Net Sales, compared to $1,447.6 million, or 40.0%
of Adjusted Net Sales, in 2022. The increase in gross margin and
Adjusted Gross Margin of 700 and 690 basis points, respectively,
was primarily driven by continued supply chain tailwinds and cost
optimization efforts. We also drove strong sales through our higher
margin DTC channel, specifically in the beauty category.
Research and development expenses increased 15.6% to $249.4
million, or 5.9% of net sales, compared to $215.7 million, or 5.8%
of net sales, in the prior year. This increase was primarily
attributable to an increase of $26.3 million in personnel-related
expenses driven by increased headcount to support new product
categories and new market expansion, and includes an increase of
$6.0 million in share-based compensation. The overall increase was
also driven by an increase of $3.3 million in travel expenses and
an increase of $3.2 million in professional services expenses.
Sales and marketing expenses increased 44.3% to $897.6 million,
or 21.1% of net sales, compared to $622.0 million, or 16.7% of net
sales, in 2022. This increase was primarily attributable to
increases of $145.3 million in advertising-related expenses; an
increase of $53.5 million in delivery and distribution costs driven
by higher volumes, particularly in our DTC business; $45.1 million
in personnel-related expenses to support new product launches and
expansion into new markets, which includes an $8.2 million related
party bonus paid in December 2023, and an increase of $4.5 million
in share-based compensation; and an increase of $10.7 million in
consulting fees.
General and administrative expenses increased 54.2% to $387.3
million, or 9.1% of net sales, compared to $251.2 million, or 6.8%
of net sales in the prior year. This increase was primarily driven
by an increase of $79.4 million of costs related to the separation
and distribution from JS Global and secondary offering; an increase
of $20.1 million in personnel-related expenses driven by additional
headcount to support overall growth, including an increase in
share-based compensation of $31.0 million that was offset by a
decrease in discretionary and related party bonuses of $10.0
million; an increase of $10.2 million in legal fees; and an
increase of $9.1 million in technology support costs.
Operating income increased 16.2% to $373.6 million, or 8.8% of
net sales, compared to $321.4 million, or 8.6% of net sales, during
the prior year. Adjusted Operating Income increased 40.9% to $638.3
million, or 15.3% of Adjusted Net Sales, compared to $453.1
million, or 12.5% of Adjusted Net Sales, in 2022.
Net income decreased 28.1% to $167.1 million, or 3.9% of net
sales, compared to $232.4 million, or 6.3% of net sales, in the
prior year. Net income per diluted share decreased 28.3% to $1.20,
compared to $1.67 in the prior year.
Adjusted Net Income increased 36.0% to $449.3 million, or 10.8%
of Adjusted Net Sales, compared to $330.4 million, or 9.1% of
Adjusted Net Sales, in the prior year. Adjusted Net Income per
diluted share increased 35.6% to $3.22, compared to $2.38 in the
prior year.
Adjusted EBITDA increased 38.5% to $719.7 million, or 17.2% of
Adjusted Net Sales, compared to $519.6 million, or 14.4% of
Adjusted Net Sales, in the prior year.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents decreased to $154.1 million, compared
to $192.9 million as of December 31, 2022.
Inventories increased 27.6% to $699.7 million, compared to
$548.6 million as of December 31, 2022.
Total debt, excluding unamortized deferred financing costs, was
$804.9 million, compared to $437.5 million as of December 31, 2022.
The increase in debt reflects the new credit facility entered into
in conjunction with the separation from JS Global, which provides
for a $810.0 million term loan and a $500.0 million revolving
credit facility.
Fiscal 2024 Outlook
For fiscal year 2024, SharkNinja expects:
- Net sales to increase 5.0% to 7.0% and Adjusted Net Sales to
increase between 7.0% and 9.0% compared to the prior year.
- Adjusted Net Income per diluted share between $3.45 and $3.61,
reflecting a 7% to 12% increase compared to the prior year.
- Adjusted EBITDA between $800 million and $830 million,
reflecting a 11% to 15% increase compared to the prior year.
- A GAAP effective tax rate of approximately 24% to 25%.
- Diluted weighted average shares outstanding of approximately
141 million.
- Capital expenditures of $120 million to $140 million primarily
to support investments in new product launches and technology.
Conference Call Details
A conference call to discuss the 2023 financial results and
fiscal 2024 outlook is scheduled for today, February 15, 2024, at
8:30 a.m. Eastern Time. A live audio webcast of the conference call
will be available online at http://ir.sharkninja.com. Investors and
analysts interested in participating in the live call are invited
to dial 1-877-407-4018 or 1-201-689-8471. The webcast will be
archived and available for replay.
About SharkNinja, Inc.
SharkNinja, Inc. (NYSE: SN) is a global product design and
technology company, with a diversified portfolio of 5-star rated
lifestyle solutions that positively impact people’s lives in homes
around the world. Powered by two trusted, global brands, Shark and
Ninja, the company has a proven track record of bringing disruptive
innovation to market, and developing one consumer product after
another has allowed SharkNinja to enter multiple product
categories, driving significant growth and market share gains.
Headquartered in Needham, Massachusetts with more than 2,800
associates, the company’s products are sold at key retailers,
online and offline, and through distributors around the world. For
more information, please visit SharkNinja.com and follow
@SharkNinja.
Forward-looking statements
This press release contains forward-looking statements that
reflect our current views with respect to, among other things,
future events and our future business, financial condition, results
of operations and prospects and Fiscal 2024 outlook. These
statements are often, but not always, made through the use of words
or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “continue,”
“will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,”
“projection,” “would” and “outlook,” or the negative version of
those words or phrases or other comparable words or phrases of a
future or forward-looking nature. These forward-looking statements
are not statements of historical fact, and are based on current
expectations, estimates and projections about our industry as well
as certain assumptions made by management, many of which, by their
nature, are inherently uncertain and beyond our control. These
forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions, which you should
consider and read carefully, including but not limited to:
- our ability to maintain and strengthen our brands to generate
and maintain ongoing demand for our products;
- our ability to commercialize a continuing stream of new
products and line extensions that create demand;
- our ability to effectively manage our future growth;
- general economic conditions and the level of discretionary
consumer spending;
- our ability to expand into additional consumer markets;
- our ability to maintain product quality and product performance
at an acceptable cost;
- our ability to compete with existing and new competitors in our
markets;
- problems with, or loss of, our supply chain or suppliers, or an
inability to obtain raw materials;
- the risks associated with doing business globally;
- inflation, changes in the cost or availability of raw
materials, energy, transportation and other necessary supplies and
services;
- our ability to hire, integrate and retain highly skilled
personnel;
- our ability to maintain, protect and enhance our intellectual
property;
- our ability to securely maintain consumer and other third-party
data;
- our ability to comply with regulatory requirements;
- the increased expenses associated with being a public
company;
- our status as a “controlled company” within the meaning of the
rules of NYSE;
- our ability to achieve some or all of the anticipated benefits
of the separation from JS Global; and
- the payment of any declared dividends.
This list of factors should not be construed as exhaustive and
should be read in conjunction with the other cautionary statements
that are included in this press release. We operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for us to predict all risks, nor
can we assess the impact of all factors on our business or the
extent to which any factor or combination of factors may cause
actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks,
uncertainties and assumptions, the future events and trends
discussed in this press release, and our future levels of activity
and performance, may not occur and actual results could differ
materially and adversely from those described or implied in the
forward-looking statements. As a result, you should not regard any
of these forward-looking statements as a representation or warranty
by us or any other person or place undue reliance on any such
forward-looking statements. Any forward-looking statement speaks
only as of the date on which it is made, and we do not undertake
any obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as required by law.
In addition, statements that contain “we believe” and similar
statements reflect our beliefs and opinions on the relevant
subject. These statements are based on information available to us
as of the date of this press release. While we believe that this
information provides a reasonable basis for these statements, this
information may be limited or incomplete. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements. We qualify all of our forward-looking
statements by the cautionary statements contained in this press
release.
SHARKNINJA, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data)
As of December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
154,061
$
192,890
Restricted cash
—
25,880
Accounts receivable, net
985,172
766,503
Inventories
699,740
548,588
Prepaid expenses and other current
assets
58,311
181,831
Total current assets
1,897,284
1,715,692
Property and equipment, net
166,252
137,341
Operating lease right-of-use assets
63,333
67,321
Intangible assets, net
477,816
492,709
Goodwill
834,203
840,148
Deferred tax assets, noncurrent
12
6,291
Other assets, noncurrent
48,170
35,389
Total assets
$
3,487,070
$
3,294,891
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
459,651
$
328,122
Accrued expenses and other current
liabilities
620,333
552,023
Tax payable
20,991
1,581
Current portion of long-term debt
24,157
86,972
Total current liabilities
1,125,132
968,698
Long-term debt
775,483
349,169
Operating lease liabilities,
noncurrent
63,043
61,779
Deferred tax liabilities, noncurrent
16,500
60,976
Other liabilities, noncurrent
28,019
25,980
Total liabilities
2,008,177
1,466,602
Shareholders’ equity:
Ordinary shares, $0.0001 par value per
share, 1,000,000,000 shares authorized; 139,083,369 and 138,982,872
shares issued and outstanding as of December 31, 2023 and 2022,
respectively
14
14
Additional paid-in capital
1,009,590
941,206
Retained earnings
470,319
896,738
Accumulated other comprehensive loss
(1,030
)
(9,669
)
Total shareholders’ equity
1,478,893
1,828,289
Total liabilities and shareholders’
equity
$
3,487,070
$
3,294,891
SHARKNINJA, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(in thousands, except share
and per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net sales(1)(2)
$
1,377,499
$
1,182,646
$
4,253,710
$
3,717,366
Cost of sales
754,604
759,329
2,345,858
2,307,172
Gross profit
622,895
423,317
1,907,852
1,410,194
Operating expenses:
Research and development
68,957
55,705
249,387
215,660
Sales and marketing
329,550
216,634
897,585
621,953
General and administrative
123,634
97,172
387,316
251,207
Total operating expenses
522,141
369,511
1,534,288
1,088,820
Operating income
100,754
53,806
373,564
321,374
Interest expense, net
(16,386
)
(8,460
)
(44,909
)
(27,021
)
Other income (expense), net
5,888
16,472
(35,427
)
7,631
Income before income taxes
90,256
61,818
293,228
301,984
Provision for income taxes
40,932
15,179
126,150
69,630
Net income
$
49,324
$
46,639
$
167,078
$
232,354
Net income per share, basic
$
0.35
$
0.34
$
1.20
$
1.67
Net income per share, diluted
$
0.35
$
0.34
$
1.20
$
1.67
Weighted-average number of shares used in
computing net income per share, basic
139,062,310
138,982,872
139,025,657
138,982,872
Weighted-average number of shares used in
computing net income per share, diluted
140,283,055
138,982,872
139,420,254
138,982,872
(1) Net sales in our product categories were as follows:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
Cleaning Appliances
$
541,479
$
580,156
$
1,819,465
$
1,931,732
Cooking and Beverage Appliances
502,574
382,042
1,441,634
1,078,610
Food Preparation Appliances
180,930
163,016
653,615
590,438
Other
152,516
57,432
338,996
116,586
Total net sales
$
1,377,499
$
1,182,646
$
4,253,710
$
3,717,366
(2) Net sales by region based on the billing address of
customers were as follows:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
North America(a)
973,052
901,106
3,018,038
2,922,680
Europe(b)
380,575
239,640
1,072,766
629,364
Rest of World
23,872
41,900
162,906
165,322
Total net sales
$
1,377,499
$
1,182,646
$
4,253,710
$
3,717,366
(a) Net sales from the United States
represented 65.1% and 71.1% of total net sales for the three months
ended December 31, 2023 and 2022, respectively, and 65.4% and 72.8%
of total net sales for the years ended December 31, 2023 and 2022,
respectively. (b) Net sales from the United Kingdom ("UK")
represented 21.0% and 17.7% of total net sales for the three months
ended December 31, 2023 and 2022, respectively, and 19.7% and 14.3%
of total net sales for the years ended December 31, 2023 and 2022,
respectively.
Cash Flows
The following table summarizes our cash flows for the periods
presented:
Year Ended December
31,
($ in thousands)
2023
2022
2021
Net cash provided by operating
activities
$
280,601
$
204,964
$
229,147
Net cash used in investing activities
(118,075
)
(52,384
)
(66,366
)
Net cash used in financing activities
(234,868
)
(160,170
)
(54,500
)
Non-GAAP Financial Measures
In addition to the measures presented in our consolidated
financial statements, we regularly review other financial measures,
defined as non-GAAP financial measures by the SEC, to evaluate our
business, measure our performance, identify trends, prepare
financial forecasts and make strategic decisions.
The key non-GAAP financial measures we consider are Adjusted Net
Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted
Operating Income, Adjusted Net Income, Adjusted Net Income Per
Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and
Adjusted Net Sales growth on a constant currency basis. These
non-GAAP financial measures are used by both management and our
Board, together with comparable GAAP information, in evaluating our
current performance and planning our future business activities.
These non-GAAP financial measures provide supplemental information
regarding our operating performance on a non-GAAP basis that
excludes certain gains, losses and charges of a non-cash nature or
which occur relatively infrequently and/or which management
considers to be unrelated to our core operations and excludes the
financial results from our former Japanese subsidiary, SharkNinja
Co., Ltd. (“SNJP”), and our Asia Pacific Region and Greater China
("APAC") distribution channels, both of which were transferred to
JS Global Lifestyle Company Limited (“JS Global”) concurrently with
the separation (the “Divestitures”), as well as the cost of sales
from (i) inventory markups that were eliminated as a result of the
transition of certain product procurement functions from a
subsidiary of JS Global to SharkNinja concurrently with the
separation and (ii) costs related to the transitional Sourcing
Services Agreement with JS Global that was entered into in
connection with the separation (collectively, the “Product
Procurement Adjustment”). Management believes that tracking and
presenting these non-GAAP financial measures provides management
and the investment community with valuable insight into our ongoing
core operations, our ability to generate cash and the underlying
business trends that are affecting our performance. We believe that
these non-GAAP measures, when used in conjunction with our GAAP
financial information, also allow investors to better evaluate our
financial performance in comparison to other periods and to other
companies in our industry and to better understand and interpret
the results of the ongoing business following the separation and
distribution. These non-GAAP financial measures should not be
viewed as a substitute for our financial results calculated in
accordance with GAAP and you are cautioned that other companies may
define these non-GAAP financial measures differently.
SharkNinja does not provide a reconciliation of forward-looking
Adjusted Net Income and Adjusted EBITDA to GAAP net income because
such reconciliations are not available without unreasonable
efforts. The is due to the inherent difficulty in forecasting with
reasonable certainty certain amount that are necessary for such
reconciliation, including, in particular, the realized and
unrealized foreign currency gains or losses reported within other
expense. For the same reasons, we are unable to forecast with
reasonable certainty all deductions and additions needed in order
to provide forward-looking GAAP net income at this time. The amount
of these deductions and additions may be material, and, therefore,
could result in forward-looking GAAP net income being materially
different or less than forward-looking Adjusted Net Income and
Adjusted EBITDA. See “Forward-looking statements” above.
We define Adjusted Net Sales as net sales as adjusted to exclude
certain items that we do not consider indicative of our ongoing
operating performance following the separation, including net sales
from our Divestitures. We believe that Adjusted Net Sales is an
appropriate measure of our performance because it eliminates the
impact of our Divestitures that do not relate to the ongoing
performance of our business.
The following table reconciles Adjusted Net Sales to the most
comparable GAAP measure, net sales, for the periods presented:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands, except %)
2023
2022
2023
2022
Net sales
$
1,377,499
$
1,182,646
$
4,253,710
$
3,717,366
Divested subsidiary adjustment(1)
—
(31,561
)
(77,544
)
(97,434
)
Adjusted Net Sales
$
1,377,499
$
1,151,085
$
4,176,166
$
3,619,932
(1) Adjusted for net sales from SNJP and the APAC distribution
channels for the three months and years ended December 31, 2023 and
2022 as if such Divestitures occurred on January 1, 2022.
(2) The following table reconciles Adjusted Net Sales to net
sales per product category, for the periods presented:
Three Months Ended December
31, 2023
Three Months Ended December
31, 2022
($ in thousands)
Net sales
Divested subsidiary
adjustment(a)
Adjusted Net Sales
Net sales
Divested subsidiary
adjustment(a)
Adjusted Net Sales
Cleaning Appliances
$
541,479
$
—
$
541,479
$
580,156
$
(23,882
)
$
556,274
Cooking and Beverage Appliances
502,574
—
502,574
382,042
(3,019
)
379,023
Food Preparation Appliances
180,930
—
180,930
163,016
(4,660
)
158,356
Other
152,516
—
152,516
57,432
—
57,432
Total net sales
$
1,377,499
$
—
$
1,377,499
$
1,182,646
$
(31,561
)
$
1,151,085
Year Ended December 31,
2023
Year Ended December 31,
2022
($ in thousands)
Net sales
Divested subsidiary
adjustment(a)
Adjusted Net Sales
Net sales
Divested subsidiary
adjustment(a)
Adjusted Net Sales
Cleaning Appliances
$
1,819,465
$
(49,392
)
$
1,770,073
$
1,931,732
$
(74,185
)
$
1,857,547
Cooking and Beverage Appliances
1,441,634
(6,161
)
1,435,473
1,078,610
(8,914
)
1,069,696
Food Preparation Appliances
653,615
(8,289
)
645,326
590,438
(14,335
)
576,103
Other
338,996
(13,702
)
325,294
116,586
—
116,586
Total net sales
$
4,253,710
$
(77,544
)
$
4,176,166
$
3,717,366
$
(97,434
)
$
3,619,932
(a) Adjusted for net sales from SNJP and the
APAC distribution channels for the three months and years ended
December 31, 2023 and 2022 as if such Divestitures occurred on
January 1, 2022.
We define Adjusted Gross Profit as gross profit as adjusted to
exclude certain items that we do not consider indicative of our
ongoing operating performance following the separation, including
the net sales and cost of sales from our Divestitures and the cost
of sales from the Product Procurement Adjustment. We define
Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted
Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross
Margin are appropriate measures of our operating performance
because each eliminates the impact our Divestitures and certain
other adjustments that do not relate to the ongoing performance of
our business.
The following table reconciles Adjusted Gross Profit and
Adjusted Gross Margin to the most comparable GAAP measure, gross
profit and gross margin, respectively, for the periods
presented:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands, except %)
2023
2022
2023
2022
Net sales
$
1,377,499
$
1,182,646
$
4,253,710
$
3,717,366
Cost of sales
(754,604
)
(759,329
)
(2,345,858
)
(2,307,172
)
Gross profit
622,895
423,317
1,907,852
1,410,194
Gross margin %
45.2
%
35.8
%
44.9
%
37.9
%
Divested subsidiary net sales
adjustment(1)
—
(31,561
)
(77,544
)
(97,434
)
Divested subsidiary cost of sales
adjustment(2)
—
23,183
45,116
64,506
Product Procurement Adjustment(3)
29,793
19,064
83,162
70,295
Adjusted Gross Profit
$
652,688
$
434,003
$
1,958,586
$
1,447,561
Adjusted Net Sales
$
1,377,499
$
1,151,085
$
4,176,166
$
3,619,932
Adjusted Gross Margin
47.4
%
37.7
%
46.9
%
40.0
%
(1) Adjusted for net sales from SNJP and the
APAC distribution channels for the three months and years ended
December 31, 2023 and 2022 as if such Divestitures occurred on
January 1, 2022.
(2) Adjusted for cost of sales from SNJP and
the APAC distribution channels for the three months and years ended
December 31, 2023 and 2022 as if such Divestitures occurred on
January 1, 2022.
(3) Represents cost of sales incurred related
to the Product Procurement Adjustment. As a result of the
separation, we purchase 100% of our inventory from one of our
subsidiaries, SharkNinja (Hong Kong) Company Limited ("SNHK"), and
no longer purchase inventory from a purchasing office wholly owned
by JS Global. Thus, the markup on all inventory purchased
subsequent to the separation is completely eliminated in
consolidation. As a result of the separation, we pay JS Global a
sourcing service fee to provide value-added sourcing services on a
transitional basis under a Sourcing Services Agreement.
We define Adjusted Operating Income as operating income
excluding (i) share-based compensation, (ii) certain litigation
costs, (iii) amortization of certain acquired intangible assets,
(iv) certain transaction-related costs, (v) discretionary bonuses,
(vi) shareholder-funded executive bonuses and (vii) certain items
that we do not consider indicative of our ongoing operating
performance following the separation, including operating income
from our Divestitures and cost of sales from our Product
Procurement Adjustment.
The following table reconciles Adjusted Operating Income to the
most comparable GAAP measure, operating income, for the periods
presented:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
Operating income
$
100,754
$
53,806
$
373,564
$
321,374
Share-based compensation(1)
22,464
94
46,966
5,509
Litigation costs(2)
4,373
489
8,973
4,513
Amortization of acquired intangible
assets(3)
4,897
4,896
19,587
19,587
Transaction-related costs(4)
5,728
2,621
82,277
2,896
Discretionary executive bonus(5)
—
34,000
—
34,000
Shareholder-funded executive
bonuses(6)
32,200
—
32,200
—
Product Procurement Adjustment(7)
29,793
19,064
83,162
70,295
Divested subsidiary operating income
adjustment(8)
—
(282
)
(8,456
)
(5,093
)
Adjusted Operating Income
$
200,209
$
114,688
$
638,273
$
453,081
(1) Represents non-cash expense related to restricted stock unit
awards issued from the JS Global and SharkNinja equity incentive
plans.
(2) Represents litigation costs incurred for certain patent
infringement claims and false advertising claims against us.
(3) Represents amortization of acquired intangible assets that
we do not consider normal recurring operating expenses, as the
intangible assets relate to JS Global’s acquisition of our
business. We exclude amortization charges for these
acquisition-related intangible assets for purposes of calculating
Adjusted Operating Income, although revenue is generated, in part,
by these intangible assets, to eliminate the impact of these
non-cash charges that are significantly impacted by the timing and
valuation of JS Global’s acquisition of our business, as well as
the inherent subjective nature of purchase price allocations.
(4) Represents certain costs incurred related to the separation
and distribution from JS Global and the secondary offering
transaction.
(5) Represents a one-time discretionary bonus.
(6) Represents cash bonuses paid to certain executives by Mr.
Xuning Wang, the Chairperson of the board of directors and the
Company’s controlling shareholder, which had no impact on the
Company's overall cash flow.
(7) Represents cost of sales incurred related to the Product
Procurement Adjustment. As a result of the separation, we purchase
100% of our inventory from one of our subsidiaries, SNHK, and no
longer purchase inventory from a purchasing office wholly owned by
JS Global. Thus, the markup on all inventory purchased subsequent
to the separation is completely eliminated in consolidation. As a
result of the separation, we pay JS Global a sourcing service fee
to provide value-added sourcing services on a transitional basis
under a Sourcing Services Agreement.
(8) Adjusted for operating income from SNJP and the APAC
distribution channels for the three months and years ended December
31, 2023 and 2022 as if such Divestitures occurred on January 1,
2022.
We define Adjusted Net Income as net income excluding (i)
share-based compensation, (ii) certain litigation costs, (iii)
foreign currency gains and losses, net, (iv) amortization of
certain acquired intangible assets, (v) certain transaction-related
costs, (vi) discretionary bonuses, (vii) shareholder-funded
executive bonuses, (viii) certain items that we do not consider
indicative of our ongoing operating performance following the
separation, including net income from our Divestitures and cost of
sales from our Product Procurement Adjustment, (ix) the tax impact
of the adjusted items and (x) certain withholding taxes.
Adjusted Net Income Per Share is defined as Adjusted Net Income
divided by the diluted weighted average number of ordinary
shares.
The following table reconciles Adjusted Net Income and Adjusted
Net Income Per Share to the most comparable GAAP measures, net
income and net income per share, diluted, respectively, for the
periods presented:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands, except share and per
share amounts)
2023
2022
2023
2022
Net income
$
49,324
$
46,639
$
167,078
$
232,354
Share-based compensation(1)
22,464
94
46,966
5,509
Litigation costs(2)
4,373
489
8,973
4,513
Foreign currency (gains) losses,
net(3)
(8,300
)
(21,058
)
35,179
(9,275
)
Amortization of acquired intangible
assets(4)
4,897
4,896
19,587
19,587
Transaction-related costs(5)
5,728
2,621
82,277
2,896
Discretionary executive bonus(6)
—
34,000
—
34,000
Shareholder-funded executive
bonuses(7)
32,200
—
32,200
—
Product Procurement Adjustment(8)
29,793
19,064
83,162
70,295
Tax impact of adjusting items(9)
(8,365
)
(8,824
)
(39,051
)
(28,056
)
Tax withholding adjustment(10)
—
—
19,474
—
Divested subsidiary net income
adjustment(11)
—
(2,513
)
(6,586
)
(1,458
)
Adjusted Net Income
$
132,114
$
75,408
$
449,259
$
330,365
Net income per share, diluted
$
0.35
$
0.34
$
1.20
$
1.67
Adjusted Net Income Per Share
$
0.94
$
0.54
$
3.22
$
2.38
Diluted weighted-average number of shares
used in computing net income per share and Adjusted Net Income Per
Share(12)
140,283,055
138,982,872
139,420,254
138,982,872
(1) Represents non-cash expense related to restricted stock unit
awards issued from the JS Global and SharkNinja equity incentive
plans.
(2) Represents litigation costs incurred for certain patent
infringement claims and false advertising claims against us.
(3) Represents foreign currency transaction gains and losses
recognized from the remeasurement of transactions that were not
denominated in the local functional currency, including gains and
losses related to foreign currency derivatives not designated as
hedging instruments.
(4) Represents amortization of acquired intangible assets that
we do not consider normal recurring operating expenses, as the
intangible assets relate to JS Global’s acquisition of our
business. We exclude amortization charges for these
acquisition-related intangible assets for purposes of calculating
Adjusted Net Income, although revenue is generated, in part, by
these intangible assets, to eliminate the impact of these non-cash
charges that are significantly impacted by the timing and valuation
of JS Global’s acquisition of our business, as well as the inherent
subjective nature of purchase price allocations.
(5) Represents certain costs incurred related to the separation
and distribution from JS Global and the secondary offering
transaction.
(6) Represents a one-time discretionary bonus.
(7) Represents cash bonuses paid to certain executives by Mr.
Xuning Wang, the Chairperson of the board of directors and the
Company’s controlling shareholder, which had no impact on the
Company's overall cash flow.
(8) Represents cost of sales incurred related to the Product
Procurement Adjustment. As a result of the separation, we purchase
100% of our inventory from one of our subsidiaries, SNHK, and no
longer purchase inventory from a purchasing office wholly owned by
JS Global. Thus, the markup on all inventory purchased subsequent
to the separation is completely eliminated in consolidation. As a
result of the separation, we pay JS Global a sourcing service fee
to provide value-added sourcing services on a transitional basis
under a Sourcing Services Agreement.
(9) Represents the income tax effects of the adjustments
included in the reconciliation of net income to Adjusted Net Income
determined using the tax rate of 22%, which approximates our
effective tax rate, excluding (i) the withholding adjustment
described in footnote (9), (ii) divested subsidiary net income
adjustment described in footnote (10), and (iii) certain
share-based compensation costs and separation and
distribution-related costs that are not tax deductible.
(10) Represents withholding taxes associated with the cash
dividend paid to JS Global in connection with the separation and
related refinancing.
(11) Adjusted for net income (loss) from SNJP and the APAC
distribution channels for the three months and years ended December
31, 2023 and 2022 as if such Divestitures occurred on January 1,
2022.
(12) In calculating net income per share and Adjusted Net Income
Per Share, we used the number of shares transferred in the
separation and distribution for the denominator for all periods
prior to completion of the separation and distribution on July 31,
2023.
We define EBITDA as net income excluding: (i) interest expense,
net, (ii) provision for income taxes and (iii) depreciation and
amortization. We define Adjusted EBITDA as EBITDA excluding (i)
share-based compensation cost, (ii) certain litigation costs, (iii)
foreign currency gains and losses, net, (iv) certain
transaction-related costs, (v) discretionary bonuses, (vi)
shareholder-funded executive bonuses and (vii) certain items that
we do not consider indicative of our ongoing operating performance
following the separation, including Adjusted EBITDA from our
Divestitures and cost of sales from our Product Procurement
Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA
divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA
and Adjusted EBITDA Margin are appropriate measures because they
facilitate a comparison of our operating performance on a
consistent basis from period to period that, when viewed in
combination with our results according to GAAP, we believe provide
a more complete understanding of the factors and trends affecting
our business than GAAP measures alone.
The following table reconciles EBITDA, Adjusted EBITDA and
Adjusted EBITDA Margin to the most comparable GAAP measure, net
income, for the periods presented:
Three Months Ended December
31,
Year Ended December
31,
($ in thousands, except %)
2023
2022
2023
2022
Net income
$
49,324
$
46,639
$
167,078
$
232,354
Interest expense, net
16,386
8,460
44,909
27,021
Provision for income taxes
40,932
15,179
126,150
69,630
Depreciation and amortization
26,427
25,148
103,821
86,708
EBITDA
133,069
95,426
441,958
415,713
Share-based compensation (1)
22,464
94
46,966
5,509
Litigation costs (2)
4,373
489
8,973
4,513
Foreign currency (gains) losses,
net(3)
(8,300
)
(21,058
)
35,179
(9,275
)
Transaction-related costs(4)
5,728
2,621
82,277
2,896
Discretionary executive bonus(5)
—
34,000
—
34,000
Shareholder-funded executive
bonuses(6)
32,200
—
32,200
—
Product Procurement Adjustment(7)
29,793
19,064
83,162
70,295
Divested subsidiary Adjusted EBITDA
adjustment(8)
—
(2,237
)
(11,020
)
(4,037
)
Adjusted EBITDA
$
219,327
$
128,399
$
719,695
$
519,614
Adjusted Net Sales
$
1,377,499
$
1,151,085
$
4,176,166
$
3,619,932
Adjusted EBITDA Margin
15.9
%
11.2
%
17.2
%
14.4
%
(1) Represents non-cash expense related to restricted stock unit
awards issued from the JS Global and SharkNinja equity incentive
plans.
(2) Represents litigation costs incurred for certain patent
infringement claims and false advertising claims against us.
(3) Represents foreign currency transaction gains and losses
recognized from the remeasurement of transactions that were not
denominated in the local functional currency, including gains and
losses related to foreign currency derivatives not designated as
hedging instruments.
(4) Represents certain costs incurred related to the separation
and distribution from JS Global and the secondary offering
transaction.
(5) Represents a one-time discretionary bonus.
(6) Represents cash bonuses paid to certain executives by Mr.
Xuning Wang, the Chairperson of the board of directors and the
Company’s controlling shareholder, which had no impact on the
Company's overall cash flow.
(7) Represents cost of sales incurred related to the Product
Procurement Adjustment. As a result of the separation, we purchase
100% of our inventory from one of our subsidiaries, SNHK, and no
longer purchase inventory from a purchasing office wholly owned by
JS Global. Thus, the markup on all inventory purchased subsequent
to the separation is completely eliminated in consolidation. As a
result of the separation, we pay JS Global a sourcing service fee
to provide value-added sourcing services on a transitional basis
under a Sourcing Services Agreement.
(8) Adjusted for Adjusted EBITDA from SNJP and the APAC
distribution channels for the three months and years ended December
31, 2023 and 2022 as if such Divestitures occurred on January 1,
2022. The divested subsidiary Adjusted EBITDA adjustment represents
net (loss) income from our Divestitures excluding interest expense,
income tax expense, depreciation and amortization expense and
foreign currency gains and losses recorded at the subsidiary
level.
We refer to growth rates in Adjusted Net Sales on a constant
currency basis so that results can be viewed without the impact of
fluctuations in foreign currency exchange rates. These amounts are
calculated by translating current year results at prior year
average exchange rates. We believe elimination of the foreign
currency translation impact provides useful information in
understanding and evaluating trends in our operating results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240215206168/en/
Investor Relations: Arvind Bhatia, CFA SVP, Investor Relations
IR@sharkninja.com
Anna Kate Heller ICR SharkNinja@icrinc.com
Media Relations: Sarah McKinney VP, Corporate Communications
PR@sharkninja.com
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