yoga-8k_20181114.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2018

 

YogaWorks, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-38151

47-1219105

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

5780 Uplander Way

Culver City, CA 90230

(Address of principal executive offices)

Registrant’s telephone number, including area code: (310) 664-6470

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 14, 2018, YogaWorks, Inc. issued a press release announcing its financial results for the third quarter ended September 30, 2018. A copy of the press release is being furnished as Exhibit 99.1 to this report and incorporated by reference.

The press release is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by YogaWorks, Inc., whether made before or after today’s date, regardless of any general incorporation language in such filing, except as expressly set forth in such filing.

We do not have, and expressly disclaim, any obligation to release publicly any updates or any changes in our expectations or any change in events, conditions, or circumstances on which any forward-looking statement is based.

The text included with this report is available on our website located at www.yogaworks.com, however, the contents of our website are not incorporated by reference herein.

This Form 8-K contains forward-looking statements that are subject to various assumptions, risks and uncertainties. These forward-looking statements may include financial projections, revenue and earnings guidance and other statements or assumptions regarding our expectations and beliefs. We believe that our expectations, as expressed in these statements are based on reasonable assumptions regarding the risks and uncertainties inherent in achieving those expectations. These statements are not, however, guarantees of performance and actual results may differ materially. Risks and uncertainties which may cause actual results to be different than expressed or implied in our forward-looking statements include, but are not limited to, the risk factors described under the heading “Risk Factors” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We expressly disclaim any current intention to update any forward-looking statements as a result of new information or future events or developments.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Press release dated November 14, 2018

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

YogaWorks, Inc.

 

 

 

 

Date: November 14, 2018

By:

 

/s/ Vance Chang

 

 

 

Vance Chang

 

 

 

Chief Financial Officer

 

 

yoga-ex991_8.htm

 

Exhibit 99.1

 

YOGAWORKS, INC. REPORTS THIRD QUARTER 2018 FINANCIAL RESULTS

LOS ANGELES, November 14, 2018 – YogaWorks, Inc. (NASDAQ:YOGA) (the “Company”), one of the largest providers of high quality yoga instruction in the U.S., today announced financial results for the third quarter ended September 30, 2018.

Rosanna McCollough, President and Chief Executive Officer of YogaWorks, stated, “We are pleased to have delivered third quarter results that were in line with our expectations and to be maintaining our outlook for the year.  Our first priority remains to stabilize our base business and we are making progress across multiple initiatives that we believe will drive healthier revenue growth at improved EBITDA margin rates. These actions include: (1) refinement of our overall promotional strategy, (2) enhancements to our product offering, (3) an updated marketing strategy, and (4) the optimization of our studio base. Once we believe we have achieved our objectives, we plan to resume our acquisition strategy and remain confident in our position as the acquirer of choice.”

Results for the third quarter ended September 30, 2018

 

 

September 30, 2018

September 30, 2017

GAAP Results(1)

 

 

  Net revenue

$15.2 million

$13.5 million

  Net income / (loss)

$(13.9) million

$(4.6) million

 

 

 

Non-GAAP Results(2)

 

 

  Studio Count at quarter end

70

53

  Adjusted EBITDA

$(1.8) million

$(432) thousand

  Adjusted free cash flow

$(2.9) million

$(443) thousand

  Studio-Level free cash flow

$733 thousand

$2.6 million

  Studio-Level EBITDA

$1.8 million

$2.6 million

  Adjusted net income/(loss)

$(3.6) million

$(3.1) 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 third quarter ended September 30, 2018:

 

-

Net revenue was $15.2 million, a 12% increase compared to $13.5 million in the third quarter of 2017.

 

 

-

The Company ended the quarter with 70 studios in nine regional markets.

 

 

-

Adjusted EBITDA was $(1.8) million compared to adjusted EBITDA of $(432) thousand for the same quarter last year.

 

 

-

Adjusted net loss was $3.6 million compared to adjusted net loss of $3.1 million for 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 $13.2 million as of September 30, 2018.

 

 

-

Cash used in operating activities was $1.8 million for the third quarter ended September 30, 2018, as compared to cash provided by operating activities of $2.5 million for the third quarter ended September 30, 2017.

Guidance

For fiscal year 2018, the Company continues to expect net revenue between $59 million and $60 million and adjusted EBITDA between $(6.95) million and $(5.95) million. This compares to net revenue of $54.5 million and adjusted EBITDA of $(1.2) million for 2017.

 


 

 

Conference Call to Discuss Third Quarter Results

The Company will host a conference call and webcast to discuss its financial results for the third quarter ended September 30, 2018, today, November 14, 2018, beginning at 4:30 p.m. Eastern Time. Those interested in participating in the call are invited to dial 1-877-407-4018 (U.S.) or 1-201-689-8471 (international). A live webcast of the conference call will also be available online at www.yogaworks.com under the Investor Relations section and will remain available for 30 days following the live call. A replay will also be available two hours following the call through November 28, 2018, via telephone at 1-844-512-2921 (U.S.) and 1-412-317-6671 (international) by entering the replay pin 13682136.

About YogaWorks, Inc.

YogaWorks, Inc. is one of the largest providers of high quality yoga instruction in the U.S., with 70 studios in nine markets including Los Angeles, Orange County, Northern California, New York City, Boston, Baltimore, the Washington, D.C. area, Houston and Atlanta. YogaWorks strives to make yoga accessible to everybody and offers a wide range of class styles for people of all ages and abilities. Through its studios, the Company offers yoga classes, integrated fitness classes, workshops, teacher training programs and yoga-related retail merchandise. In addition to its studio locations, YogaWorks offers online instruction through its MyYogaWorks web platform, which provides subscribers with a highly curated catalog of over 1,100 yoga and meditation classes.

Forward-Looking Statements

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 Securities and Exchange Commission, which are available via the Company’s website at www.yogaworks.com. The forward-looking statements in this press release speak only as of the date of this release and, except as required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Contacts:

Investor Relations:

Jean Fontana, ICR, Inc.

646-277-1200

IR@yogaworks.com

 

 


 

YogaWorks, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

 

 

As of

September 30, 2018

 

 

As of

December 31, 2017

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,179,294

 

 

$

22,095,216

 

Inventories

 

 

1,212,104

 

 

 

1,212,608

 

Prepaid expenses and other current assets

 

 

947,460

 

 

 

1,145,067

 

Total current assets

 

 

15,338,858

 

 

 

24,452,891

 

Property and equipment, net

 

 

9,150,733

 

 

 

10,418,203

 

Intangible assets, net

 

 

14,408,349

 

 

 

22,142,275

 

Goodwill

 

 

5,429,063

 

 

 

12,768,773

 

Other non-current assets

 

 

1,262,530

 

 

 

1,224,179

 

Total assets

 

$

45,589,533

 

 

$

71,006,321

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

3,123,797

 

 

$

3,794,569

 

Accrued compensation

 

 

1,203,241

 

 

 

1,947,134

 

Deferred revenue

 

 

6,387,875

 

 

 

7,187,948

 

Current portion of deferred rent

 

 

120,010

 

 

 

122,607

 

Total current liabilities

 

 

10,834,923

 

 

 

13,052,258

 

Deferred rent, net of current portion

 

 

3,540,956

 

 

 

3,418,886

 

Deferred tax liability

 

 

2,402

 

 

 

 

Total liabilities

 

 

14,378,281

 

 

 

16,471,144

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 14)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock $0.001 par value; 50,000,000 shares authorized,

16,620,284 issued and 16,477,675 outstanding at September 30, 2018

and 50,000,000 shares authorized, 16,435,505 issued and

16,332,510 outstanding at December 31, 2017

 

 

16,478

 

 

 

16,333

 

Additional paid in capital

 

 

112,837,218

 

 

 

111,650,415

 

Accumulated deficit

 

 

(81,642,444

)

 

 

(57,131,571

)

Total stockholders’ equity

 

 

31,211,252

 

 

 

54,535,177

 

Total liabilities and stockholders’ equity

 

$

45,589,533

 

 

$

71,006,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

YogaWorks, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

Net revenues

 

$

15,150,692

 

 

$

13,518,513

 

 

$

45,550,867

 

 

$

40,002,033

Cost of revenues and operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

6,212,640

 

 

 

5,153,324

 

 

 

17,892,463

 

 

 

15,087,713

Center operations

 

 

7,179,487

 

 

 

5,732,994

 

 

 

21,012,976

 

 

 

17,002,858

General and administrative expenses

 

 

4,158,868

 

 

 

4,556,887

 

 

 

12,617,813

 

 

 

11,661,716

Depreciation and amortization

 

 

1,874,008

 

 

 

2,161,126

 

 

 

6,471,036

 

 

 

6,530,589

Goodwill impairment

 

 

5,550,000

 

 

 

 

 

 

8,024,819

 

 

 

Asset impairment

 

 

4,118,939

 

 

 

 

 

 

4,118,939

 

 

 

Total cost of revenues and operating

   expenses

 

 

29,093,942

 

 

 

17,604,331

 

 

 

70,138,046

 

 

 

50,282,876

Loss from operations

 

 

(13,943,250

)

 

 

(4,085,818

)

 

 

(24,587,179

)

 

 

(10,280,843)

Interest (income) expense, net

 

 

(46,613

)

 

 

532,939

 

 

 

(96,886

)

 

 

1,343,445

Net loss before provision

   for income taxes

 

 

(13,896,637

)

 

 

(4,618,757

)

 

 

(24,490,293

)

 

 

(11,624,288)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

 

2,667

 

 

 

(27,933

)

 

 

20,580

 

 

 

31,074

Net loss

 

 

(13,899,304

)

 

 

(4,590,824

)

 

 

(24,510,873

)

 

 

(11,655,362)

Less preferred rights dividend on redeemable

   preferred stock

 

 

 

 

 

 

 

 

 

 

(995,743)

Net loss attributable to common

   stockholders

 

$

(13,899,304

)

 

$

(4,590,824

)

 

$

(24,510,873

)

 

$

(12,651,105)

 

 


 

YogaWorks, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(24,510,873

)

 

$

(11,655,362

)

Adjustments to reconcile net loss to net cash used in

   operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,471,036

 

 

 

6,530,589

 

Goodwill impairment

 

 

8,024,819

 

 

 

 

Asset impairment

 

 

4,118,939

 

 

 

 

Deferred tax

 

 

2,402

 

 

 

13,906

 

Paid-in-kind interest expense capitalized to convertible note

 

 

 

 

 

291,585

 

Beneficial conversion feature

 

 

 

 

 

147,877

 

Amortization of debt issuance cost

 

 

 

 

 

69,164

 

Debt issuance cost written-off

 

 

 

 

 

318,016

 

Stock-based compensation expense

 

 

1,284,099

 

 

 

2,119,252

 

Changes to operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

 

 

 

 

Tenant improvement allowances received

 

 

47,530

 

 

 

 

Inventories

 

 

4,470

 

 

 

47,575

 

Prepaid expenses and other current assets

 

 

197,607

 

 

 

656,902

 

Other non-current assets

 

 

(919

)

 

 

(76,689

)

Accounts payable and accrued expenses

 

 

(186,078

)

 

 

2,707,751

 

Accrued compensation

 

 

(743,893

)

 

 

(640

)

Deferred revenue

 

 

(1,154,686

)

 

 

391,885

 

Deferred rent and other non-current liabilities

 

 

71,943

 

 

 

94,085

 

Net cash (used in) provided by operating activities

 

 

(6,373,604

)

 

 

1,655,896

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of property, equipment, and intangible assets

 

 

(1,079,543

)

 

 

(958,602

)

Acquisition earnout and holdback payments

 

 

(643,694

)

 

 

(445,400

)

Cash paid for acquisitions, net of earnouts

 

 

(721,930

)

 

 

 

Net cash used in investing activities

 

 

(2,445,167

)

 

 

(1,404,002

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Repurchase of shares to satisfy tax withholding

 

 

(97,151

)

 

 

 

Principal payment on term loans

 

 

 

 

 

(6,956,250

)

Principal payment on convertible note

 

 

 

 

 

(3,300,403

)

Principal payment on subordinated notes

 

 

 

 

 

(200,000

)

Proceeds from issuance of convertible note

 

 

 

 

 

35,083,288

 

Proceeds from issuance of common stock

 

 

 

 

 

3,200,000

 

Net cash (used in) provided by financing activities

 

 

(97,151

)

 

 

27,826,635

 

Increase (decrease) in cash and cash equivalents

 

 

(8,915,922

)

 

 

28,078,529

 

Cash and cash equivalents, beginning of period

 

 

22,095,216

 

 

 

1,912,421

 

Cash and cash equivalents, end of period

 

$

13,179,294

 

 

$

29,990,950

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest paid

 

$

 

 

$

516,694

 

Supplemental disclosure of non-cash activities

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Purchase consideration liabilities related to acquisitions

 

$

159,000

 

 

$

 

Financing activities

 

 

 

 

 

 

 

 

Dividends on preferred redeemable stock accrued

 

 

 

 

 

995,743

 

Paid-in-kind interest expense capitalized convertible note

 

 

 

 

 

291,585

 

Purchase consideration liabilities related to acquisitions

 

 

 

 

 

120,031

 

Conversion of convertible notes to equity

 

 

 

 

 

11,825,774

 

Conversion of preferred redeemable stock to equity

 

 

 

 

 

62,388,567

 

 

 


 

YogaWorks, Inc.

 

 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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

(in thousands)

 

(Unaudited)

 

Net loss

 

$

(13,899

)

 

$

(4,591

)

 

$

(24,511

)

 

$

(11,655

)

Interest (income) expense, net

 

 

(47

)

 

 

533

 

 

 

(97

)

 

 

1,343

 

Provision for (benefit from) income taxes

 

 

3

 

 

 

(28

)

 

 

21

 

 

 

31

 

Depreciation and amortization

 

 

1,874

 

 

 

2,161

 

 

 

6,471

 

 

 

6,531

 

Goodwill impairment

 

 

5,550

 

 

 

 

 

 

8,025

 

 

 

 

Asset impairment

 

 

4,119

 

 

 

 

 

 

4,119

 

 

 

 

Deferred rent(a)

 

 

36

 

 

 

(6

)

 

 

72

 

 

 

94

 

Stock based compensation(b)

 

 

334

 

 

 

1,294

 

 

 

1,284

 

 

 

2,119

 

Legal settlement(c)

 

 

75

 

 

 

37

 

 

 

75

 

 

 

902

 

Severance(d)

 

 

108

 

 

 

2

 

 

 

176

 

 

 

87

 

Executive recruiting(e)

 

 

45

 

 

 

49

 

 

 

45

 

 

 

79

 

Professional fees(f)

 

 

 

 

 

92

 

 

 

71

 

 

 

253

 

Great Hill Partners expense reimbursement fees(g)

 

 

 

 

 

25

 

 

 

 

 

 

75

 

Studio closure expenses (h)

 

 

17

 

 

 

 

 

 

17

 

 

 

 

Other

 

 

32

 

 

 

 

 

 

32

 

 

 

 

Adjusted EBITDA

 

 

(1,753

)

 

 

(432

)

 

 

(4,200

)

 

 

(141

)

Change in deferred revenue(i)

 

 

(1,111

)

 

 

(11

)

 

 

(1,036

)

 

 

531

 

Adjusted free cash flow

 

 

(2,864

)

 

 

(443

)

 

 

(5,236

)

 

 

390

 

Other general and administrative expenses(j)

 

 

3,597

 

 

 

3,059

 

 

 

10,967

 

 

 

8,147

 

Studio-Level free cash flow

 

 

733

 

 

 

2,616

 

 

 

5,731

 

 

 

8,537

 

Change in deferred revenue(i)

 

 

1,111

 

 

 

11

 

 

 

1,036

 

 

 

(531

)

Studio-Level EBITDA

 

$

1,844

 

 

$

2,627

 

 

$

6,767

 

 

$

8,006

 

 

 

(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)

Legal settlement expenses incurred in the period to settle claims.

 

(d)

Severance expenses incurred in the period related to the termination of studio and non-studio employees.

 

(e)

Executive recruiting expenses incurred in connection with the recruitment and hiring of members of our executive management team.

 

(f)

Professional fees related to certain accounting, tax and consulting services that were expensed in connection with our acquisitions.

 


 

 

(g)

Represents expense reimbursement fees incurred in connection with our Expense Reimbursement Agreement with affiliates of Great Hill Partners, which was terminated upon completion of our IPO.

 

(h)

Represents closure expenses of one Boston area studio that closed in the third quarter of 2018.

 

(i)

Represents change in deferred revenue that is reflected in the consolidated statements of operations, excluding the change in gift card liabilities and deferred revenue from acquisitions.

 

(j)

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 Great Hill Partners expense reimbursement fees or any other general and administrative expenses that are included in the reconciliation of net loss to Adjusted EBITDA.  

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

(in thousands)

 

(Unaudited)

 

Net loss

 

$

(13,899

)

 

$

(4,591

)

 

$

(24,511

)

 

$

(11,655

)

Goodwill impairment

 

 

5,550

 

 

 

 

 

 

8,025

 

 

 

 

Asset impairment

 

 

4,119

 

 

 

 

 

 

4,119

 

 

 

 

Stock based compensation(a)

 

 

334

 

 

 

1,294

 

 

 

1,284

 

 

 

2,119

 

Legal settlement(b)

 

 

75

 

 

 

37

 

 

 

75

 

 

 

902

 

Severance(c)

 

 

108

 

 

 

2

 

 

 

176

 

 

 

87

 

Executive recruiting(d)

 

 

45

 

 

 

49

 

 

 

45

 

 

 

79

 

Professional fees(e)

 

 

 

 

 

92

 

 

 

71

 

 

 

253

 

Great Hill Partners expense reimbursement fees(f)

 

 

 

 

 

25

 

 

 

 

 

 

75

 

Studio closure expenses (g)

 

 

17

 

 

 

 

 

 

17

 

 

 

 

Other

 

 

32

 

 

 

 

 

 

32

 

 

 

 

Adjusted net loss

 

$

(3,619

)

 

$

(3,092

)

 

$

(10,667

)

 

$

(8,140

)

 

 

(a)

Non-cash charges related to equity-based compensation programs, which vary from period to period depending on timing of awards and forfeitures.

 

(b)

Legal settlement expenses incurred in the period to settle claims.

 

(c)

Severance expenses incurred in the period related to the termination of studio and non-studio employees.

 

(d)

Executive recruiting expenses incurred in connection with the recruitment and hiring of members of our executive management team.

 

(e)

Professional fees related to certain accounting, tax and consulting services that were expensed in connection with our acquisitions.

 

(f)

Represents expense reimbursement fees incurred in connection with our Expense Reimbursement Agreement with Great Hill Partners, which was terminated upon completion of our IPO.

 

(g)

Represents closure expenses of one Boston area studio that closed in the third quarter of 2018.