YogaWorks, Inc. Reports First Quarter 2018 Financial Results
Results for the First Quarter Ended
|March 31, 2018||March 31, 2017|
|Net revenue||$15.5 million||$14.0 million|
|Net loss||$(4.0) million||$(2.6) million|
|Studio Count at quarter end||66||50|
|Adjusted EBITDA||$(1.1) million||$841 thousand|
|Adjusted free cash flow||$(810) thousand||$766 thousand|
|Studio-Level free cash flow||$3.1 million||$3.1 million|
|Studio-Level EBITDA||$2.8 million||$3.2 million|
|Adjusted net loss||$(3.5) million||$(2.0) million|
(1) U.S. generally accepted accounting principles (“GAAP”).
(2) Adjusted EBITDA, Studio-Level EBITDA, Adjusted free cash flows, Studio-Level free cash flows and Adjusted net loss are non-GAAP measures. For reconciliations to GAAP net loss, see "Reconciliations of Non-GAAP Financial Measures" accompanying this press release.
For the first quarter ended
- Net revenue was
$15.5 million, an 11.0% increase compared to $14.0 millionin the first quarter of 2017.
- The Company ended the quarter with 66 studios in nine regional markets.
- Adjusted EBITDA was
$(1.1) millioncompared to adjusted EBITDA of $841 thousandfor the same quarter last year.
- Adjusted net loss was
$3.5 millioncompared to adjusted net loss of $2.0 millionfor the same period last year.
For a reconciliation of GAAP net loss to Adjusted EBITDA, Studio-Level EBITDA, Adjusted free cash flows, Studio-Level free cash flows and Adjusted net loss, please see “Reconciliations of Non-GAAP Financial Measures” accompanying this press release.
Balance Sheet and Cash Flow Highlights
- Cash and cash equivalents were
$18.3 millionas of March 31, 2018.
- Cash used in operating activities was
$2.7 millionfor the quarter as compared to cash provided by operating activities of $783 thousandfor the quarter ended March 31, 2017.
Guidance for the second quarter and full year fiscal 2018 excludes potential acquisitions.
For the second quarter of 2018, the Company expects net revenue between
For fiscal 2018, the Company expects net revenue between
Conference Call to Discuss First Quarter Results
The Company will host a conference call and webcast to discuss its financial results for the first quarter ended
This press release may include forward-looking statements that reflect the Company’s current views about future events and financial performance. All statements other than statements of historical facts included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Words such as “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events are forward-looking statements.
These forward-looking statements are expressed in good faith and the Company believes there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Investors should not place undue reliance on any of the Company’s forward-looking statements because they are subject to a variety of risks and uncertainties. Factors that could cause results to differ from those reflected in the forward-looking statements are set forth in the Company’s prior press releases and public filings with the
Condensed Consolidated Balance Sheets
March 31, 2018
December 31, 2017
|Cash and cash equivalents||$||18,315,308||$||22,095,216|
|Prepaid expenses and other current assets||1,224,276||1,145,067|
|Total current assets||20,784,863||24,452,891|
|Property and equipment, net||9,969,836||10,418,203|
|Intangible assets, net||20,637,786||22,142,275|
|Other non-current assets||1,288,142||1,224,179|
|Liabilities and Stockholders’ Equity|
|Accounts payable and accrued expenses||$||2,456,796||$||3,794,569|
|Current portion of deferred rent||123,147||122,607|
|Total current liabilities||11,068,156||13,052,258|
|Deferred rent, net of current portion||3,413,675||3,418,886|
|Deferred tax liability||14,748||—|
|Common stock $0.001 par value; 50,000,000 shares authorized
and 16,491,856 issued and 16,362,955 outstanding at
March 31, 2018 and 16,435,505 issued and 16,332,510
outstanding at December 31, 2017
|Additional paid-in capital||112,028,925||111,650,415|
|Total stockholders’ equity||50,952,821||54,535,177|
|Total liabilities and stockholders’ equity||$||65,449,400||$||71,006,321|
Condensed Consolidated Statements of Operations (Unaudited)
|Three Months Ended March 31,
|Cost of revenues and operating expenses|
|Cost of revenues||5,923,849||5,128,753|
|General and administrative expenses||4,404,933||3,010,386|
|Depreciation and amortization||2,378,757||2,201,585|
|Total cost of revenues and operating expenses||19,479,455||16,027,361|
|Loss from operations||(3,949,642||)||(2,037,267||)|
|Interest (income) expense, net||(6,130||)||561,631|
|Net loss before income taxes||(3,943,512||)||(2,598,898||)|
|Provision for income taxes||17,384||17,900|
Condensed Consolidated Statements of Cash Flows (Unaudited)
|Three Months Ended March 31,|
|Cash flows from operating activities|
|Adjustments to reconcile net loss to net cash (used in) provided by operating activities:|
|Depreciation and amortization||2,378,757||2,201,585|
|Paid-in-kind interest expense capitalized to convertible note||—||193,917|
|Beneficial conversion feature||—||147,987|
|Amortization of debt issuance cost||—||27,806|
|Stock-based compensation expense||452,176||538,872|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||(79,209||)||1,053,988|
|Other non-current assets||(63,963||)||(52,535||)|
|Accounts payable and accrued expenses||(720,731||)||(327,352||)|
|Deferred rent and other non-current liabilities||(4,671||)||30,730|
|Net cash (used in) provided by operating activities||(2,663,329||)||783,238|
|Cash flows from investing activities|
|Purchase of property, equipment, and intangible assets||(425,901||)||(196,370||)|
|Acquisition earnout and holdback payments||(617,042||)||—|
|Net cash used in investing activities||(1,042,943||)||(196,370||)|
|Cash flows from financing activities|
|Repurchase of shares to satisfy tax withholding||(73,636||)||—|
|Principal payment on term loans||—||(43,750||)|
|Principal payment on subordinated notes||—||(200,000||)|
|Proceeds from issuance of convertible note||—||3,200,000|
|Net cash (used in) provided by financing activities||(73,636||)||2,956,250|
|(Decrease) increase in cash and cash equivalents||(3,779,908||)||3,543,118|
|Cash and cash equivalents, beginning of period||22,095,216||1,912,421|
|Cash and cash equivalents, end of period||$||18,315,308||$||5,455,539|
|Supplemental disclosure of cash flow information|
|Cash paid during the year for:|
|Supplemental disclosure of non-cash activities|
|Dividends on preferred redeemable stock accrued||$||—||$||995,743|
|Conversion of convertible notes to equity||—||11,825,774|
|Conversion of preferred redeemable stock to equity||—||62,388,567|
Reconciliations of Non-GAAP Financial Measures
This press release contains financial measures called Adjusted EBITDA, Studio-Level EBITDA, Adjusted free cash flow, Studio-Level free cash flow and Adjusted net loss which are not calculated in accordance with GAAP. The Company uses these financial measures to understand and evaluate its business. Adjusted EBITDA is a supplemental measure of the operating performance of the core business operations. Studio-Level EBITDA is a supplemental measure of the operating performance of the studios. Adjusted free cash flow is a supplemental measure of the operating performance of the core business operations excluding deferred revenue. Studio-Level free cash flow is a supplemental measure of the operating performance of the studios excluding deferred revenue. Adjusted net loss is a supplemental measure of operating performance that is adjusted for certain non-recurring items that we do not believe directly reflect the core business operations. Accordingly, the Company believes Adjusted EBITDA, Studio-Level EBITDA, Adjusted free cash flow, Studio-Level free cash flow and Adjusted net loss provide useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as management and the Board. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Adjusted EBITDA, Studio-Level EBITDA, Adjusted free cash flow and Studio-Level free cash flow
The following table presents a reconciliation of Adjusted EBITDA and Studio-Level EBITDA to Net loss. In addition, Adjusted free cash flow and Studio-Level free cash flow are presented for each of the periods indicated:
|Three Months Ended March 31,|
|Interest (income) expense, net||(6||)||562|
|Provision for income taxes||17||18|
|Depreciation and amortization||2,379||2,201|
|Stock based compensation(b)||452||539|
|Great Hill Partners expense reimbursement fees(e)||—||25|
|Change in deferred revenue(f)||259||(75||)|
|Adjusted free cash flow||(810||)||766|
|Other general and administrative expenses(g)||3,898||2,364|
|Studio-Level free cash flow||3,088||3,130|
|Change in deferred revenue(f)||(259||)||75|
(a) Reflects the extent to which our rent expense for the period has been above or below our cash rent payments.
(b) Non-cash charges related to equity-based compensation programs, which vary from period to period depending on timing of awards and forfeitures.
(c) Severance expenses incurred in the period related to the termination of studio and non-studio employees.
(d) Professional fees related to certain accounting, tax and consulting services that were expensed in connection with our acquisitions.
(e) Represents expense reimbursement fees incurred in connection with our Expense Reimbursement Agreement with affiliates of
(f) Represents change in deferred revenue that is reflected in the consolidated statements of operations, excluding the change in gift card liabilities.
(g) Represents general and administrative expenses that are corporate and regional expenses and not incurred by our studios, and which are primarily comprised of expenses related to (i) wages and benefits of corporate and regional employees, (ii) non-studio rent, utilities and maintenance, (iii) corporate and regional marketing and advertising, and (iv) corporate professional fees. Other general and administrative expenses exclude any general and administrative expenses related to deferred rent, stock-based compensation, legal settlement, severance, executive recruiting, professional fees, the
Adjusted net loss
The following table presents a reconciliation of Adjusted net loss to Net loss for each of the periods indicated:
|Three Months Ended March 31,|
|Stock based compensation(a)||452||539|
|Great Hill Partners expense reimbursement fees(d)||—||25|
|Adjusted net loss||$||(3,454||)||$||(1,971||)|
(a) Non-cash charges related to equity-based compensation programs, which vary from period to period depending on timing of awards and forfeitures.
(b) Severance expenses incurred in the period related to the termination of studio and non-studio employees.
(c) Professional fees related to certain accounting, tax and consulting services that were expensed in connection with our acquisitions.
(d) Represents expense reimbursement fees incurred in connection with our Expense Reimbursement Agreement with Great Hill Partners, which was terminated upon completion of our IPO.
Source: YogaWorks, Inc.