Strong Consumer Demand Sustains During
Off-Season
Proactive Management of Operating Environment
Challenges Continues
Executing on Profitable, Long-Term Growth
Drivers Successfully
Weber Inc. (“Weber” or “the Company”) (NYSE: WEBR) today
announced its financial results for the fiscal first quarter 2022,
ending December 31, 2021.
Weber reports its financial performance in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) and as adjusted on a non-GAAP basis. Please see
“Non-GAAP Financial Measures,” and “Reconciliation of GAAP to
Non-GAAP Financial Information” below for additional information
and reconciliations of the non-GAAP financial measures to the most
comparable GAAP financial measures.
For the quarter, Weber generated net sales of $283 million,
gross profit of $64 million, a net loss of $75 million, and an
Adjusted EBITDA loss of $36 million.
“While our first quarter typically reflects lower volume
off-season, we saw sustained high consumer demand for our products
globally,” said Chris Scherzinger, Chief Executive Officer of
Weber. “Like many organizations, our results were affected by acute
supply chain challenges and dramatic inflationary headwinds in raw
materials, inbound freight, and foreign exchange dynamics. However,
Weber has a remarkable history of resilience in challenging
economic periods like these, and we continue to take decisive
productivity and pricing actions to mitigate these headwinds with
agility and a category leadership mindset.”
“Importantly, we continue to gain momentum against our five key
strategies for long-term profitable growth,” added Mr. Scherzinger.
I am particularly excited by our continual stream of product
innovation, with a range of breakthrough new products recently
introduced for the 2022 season. I am also confident that our
growing direct-to-consumer and e-commerce engine, our emerging
markets investments, and our unique US and European manufacturing
footprint give us substantial means to drive profitable growth and
navigate through the current inflationary environment.”
FOR THE THREE MONTHS ENDED DECEMBER 31, 2021
- Net sales decreased 8%, to $283 million, from $309 million in
the prior-year quarter; on a two-year stack basis, net sales
increased 75%.
- Net sales decreased 13% in the Americas, to $156 million, from
$179 million in the prior-year quarter, EMEA net sales decreased
4%, to $63 million, from $66 million in the prior-year quarter, and
APAC was flat at $64 million. On a two-year stack basis, net sales
increased 67% in the Americas; 126% for EMEA, and 57% for
APAC.
- Gross profit decreased 53% to $64 million, or 22.6% of net
sales, compared to $135 million or 43.6% of net sales in the prior
year. Gross profit was significantly impacted by inbound freight
costs associated with unprecedented container shipping costs and
availability, and generational raw material commodity cost
inflation.
- Net loss of $75 million compared to net income of $5 million in
the prior-year quarter. Adjusted net loss was $46 million compared
to adjusted net income of $13 million in the prior-year
quarter.
- Adjusted EBITDA of $(36) million compared to Adjusted EBITDA of
$38 million in the prior-year quarter was driven by supply chain
and inflation pressures noted above and unfavorable foreign
exchange rate movement, as well as a return to more normalized
retailer inventories and order patterns typical to outdoor-cooking
seasonality timing.
As of December 31, 2021, Weber had cash and cash equivalents of
$46 million and $132 million of available borrowing capacity under
the revolving credit facility. Total debt at the end of the quarter
was $1.18 billion, and the average net debt to Adjusted EBITDA
ratio was 4.2 times and is compliant with its credit agreement.
As announced on February 3, 2022, the Weber Board of Directors
declared a cash dividend of $0.04 per share, payable in cash, on
March 18, 2022, to holders of its Class A Common Stock as of the
close of business on March 8, 2022.
UPDATED FISCAL YEAR 2022 GUIDANCE
For the fiscal year ended September 30, 2022, the Company
expects:
- Net sales growth to be in the range of 6% to 8% above 2021
fiscal year end, excluding a 1% to 2% forecasted negative impact
from foreign currency translation
- Adjusted EBITDA to be between $275 million and $325 million in
view of the unprecedented cost challenges.
Weber provides net sales guidance on a GAAP basis and Adjusted
EBITDA on a non-GAAP basis and does not provide a reconciliation of
forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income
(loss), due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation. Because other deductions (such as litigation and
other matters) used to calculate projected net income (loss) can
vary dramatically based on actual events, the Company is not able
to forecast on a GAAP basis with reasonable certainty that all
deductions and additions needed in order to provide a GAAP
calculation of projected net income (loss) at this time. The amount
of these deductions may be material and, therefore, could result in
projected net income (loss) being materially more or less than
projected Adjusted EBITDA (non-GAAP). These statements represent
forward-looking information and represent a financial outlook, and
actual results may vary from the estimates provided here.
FISCAL Q1 2022 INVESTOR CONFERENCE CALL
A conference call to discuss these fiscal first quarter 2022
financial results is scheduled for today, February 14, 2022, at
7:30 a.m. Central Time. Investors and analysts are invited to dial
844-200-6205 (international callers, please dial 929-526-1599)
approximately 10 minutes before the start of the call. Please
reference Conference ID 640895 when prompted. A live webcast of the
conference call and supporting materials will be available on the
Weber investor relations website, https://investors.weber.com. In
addition, a replay and transcript of the webcast will be posted to
the same website once available.
ABOUT WEBER INC.
Weber Inc. headquartered in Palatine, Ill., is the world’s
leading barbecue brand. The Company’s founder George Stephen, Sr.,
established the outdoor cooking category when he invented the
original kettle charcoal grill nearly 70 years ago. Weber offers a
comprehensive, innovative product portfolio, including charcoal,
gas, pellet and electric grills, smokers, and accessories designed
to help outdoor cooking enthusiasts discover what’s possible. In
2021, the Company acquired June Life Inc., a smart appliance and
technology company, to accelerate the development of its Weber
Connect® technology and digital products. In addition, Weber
recently launched 1952 Ventures, a subsidiary designed to
accelerate new growth platforms and brand extensions for the
Company in the areas of product, technologies, and partnerships.
Weber offers its barbecue grills and accessories, services, and
experiences to a passionate community of millions across 78
countries.
Weber Connect® is a registered trademark of Weber-Stephen
Products LLC.
NON-GAAP FINANCIAL MEASURES
This press release contains certain financial measures not
presented in accordance with GAAP, including Adjusted EBITDA and
Adjusted Net Income (Loss), which are used by management in making
operating decisions, allocating financial resources, and internal
planning and forecasting and for business strategy purposes.
Adjusted EBITDA and Adjusted Net Income (Loss) are not measures of
financial performance in accordance with GAAP and may exclude items
that are significant in understanding and assessing our financial
results. The use of non-GAAP financial information should not be
considered as an alternative to, or more meaningful than, the
comparable GAAP measures. In addition, because our non-GAAP
measures are not determined in accordance with GAAP, it is
susceptible to differing calculations, and not all comparable or
peer companies may calculate their non-GAAP measures in the same
manner.
Management believes that such measures are commonly reported by
issuers and widely used by investors as indicators of a company’s
operating performance. Please refer to the reconciliations of
Adjusted EBITDA and Adjusted Net Income (Loss) to the most directly
comparable financial measures prepared in accordance with GAAP
below.
FORWARD-LOOKING STATEMENTS
This press release contains various “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, which represent Weber’s expectations or beliefs concerning
future events. In some cases, you can identify these statements by
forward-looking words such as “may,” “might,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential” or “continue,” the negative of these terms
and other comparable terminology. These forward-looking statements,
which are subject to risks, uncertainties and assumptions about us,
may include projections of our future financial performance, our
anticipated growth strategies and anticipated trends in our
business. These statements are only predictions based on our
current expectations and projections about future events. There are
important factors that could cause our actual results, level of
activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed
or implied by the forward-looking statements, including those
factors discussed in the section titled “Risk Factors” in our
Annual Report on Form 10-K, for the year ended September 30,
2021.
Our future results could be affected by a variety of other
factors, including uncertainty of the magnitude, duration,
geographic reach, impact on the global economy and current and
potential travel restrictions of the COVID-19 outbreak, the
current, and uncertain future, impact of the COVID-19 outbreak on
our business, growth, reputation, prospects, financial condition,
operating results (including components of our financial results),
and cash flows and liquidity, risks relating to any unforeseen
changes to or effects on liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, indebtedness, financial
condition, losses and future prospects, the ability to realize the
anticipated benefits and synergies from business acquisitions in
the amounts and at the times expected, the impact of competitive
conditions, the effectiveness of pricing, advertising, and
promotional programs; the success of innovation, renovation and new
product introductions; the recoverability of the carrying value of
goodwill and other intangibles, the success of productivity
improvements and business transitions, commodity and energy prices,
transportation costs, labor costs, disruptions or inefficiencies in
supply chain, the availability of and interest rates on short-term
and long-term financing, the levels of spending on systems
initiatives, properties, business opportunities, integration of
acquired businesses, and other general and administrative costs,
changes in consumer behavior and preferences, the effect of U.S.
and foreign economic conditions on items such as interest rates,
statutory tax rates, currency conversion and availability, legal
and regulatory factors including the impact of any product recalls;
and business disruption or other losses from war, pandemic,
terrorist acts or political unrest.
Weber Inc.
Condensed Consolidated Balance
Sheets
(dollars in thousands, except
share data)
December 31,
2021
September 30,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
46,199
$
107,517
Accounts receivable, less allowances
(1)
156,392
138,683
Inventories, net
470,519
332,621
Prepaid expenses and other current
assets
113,618
68,236
Total current assets
786,728
647,057
Property, equipment and leasehold
improvements, net
172,959
162,829
Operating lease right-of-use assets
(2)
67,502
66,962
Other long-term assets
57,751
61,454
Trademarks, net
356,975
357,821
Other intangible assets, net
139,793
144,257
Goodwill
109,180
110,612
Total assets
$
1,690,888
$
1,550,992
Liabilities and equity
(deficit)
Current liabilities:
Trade accounts payable
$
375,887
$
330,669
Accrued expenses (3)
136,365
150,610
Income taxes payable
8,696
4,823
Current portion of long-term debt and
other borrowings
173,500
12,500
Current portion of long-term financing
obligation
612
592
Total current liabilities
695,060
499,194
Long-term debt, less current portion
982,568
984,818
Long-term financing obligation, less
current portion
38,228
38,394
Non-current operating lease liabilities
(4)
55,809
55,329
Tax Receivable Agreement liability
9,226
9,226
Other long-term liabilities
79,424
85,376
Total liabilities
1,860,315
1,672,337
Commitments and Contingencies
Class A Common Stock, $0.001 par value -
3,000,000,000 shares authorized, 52,569,898 and 52,533,388 shares
issued and outstanding as of December 31, 2021 and September 30,
2021, respectively
53
53
Class B Common Stock, $0.00001 par value -
1,500,000,000 shares authorized, 234,645,219 and 233,572,370 shares
issued and outstanding as of December 31, 2021 and September 30,
2021, respectively
2
2
Preferred Stock, $0.0001 par value -
1,500,000,000 shares authorized, zero shares issued and outstanding
as of December 31, 2021 and September 30, 2021
—
—
Additional paid-in capital
12,015
6,109
Accumulated other comprehensive loss
(8,942
)
(9,280
)
Retained earnings (deficit)
6,899
(7,646
)
Total Weber Inc. equity (deficit)
10,027
(10,762
)
Noncontrolling interests
(179,454
)
(110,583
)
Total equity (deficit)
(169,427
)
(121,345
)
Total liabilities and equity (deficit)
$
1,690,888
$
1,550,992
________________
(1)
Includes related party royalty receivables
of $144 and $119 at December 31, 2021 and September 30, 2021,
respectively.
(2)
Includes related party operating lease
assets of $1,544 and $1,629 at December 31, 2021 and September 30,
2021, respectively.
(3)
Includes related party operating lease
liabilities of $438 and $431 at December 31, 2021 and September 30,
2021, respectively.
(4)
Includes related party operating lease
liabilities of $1,106 and $1,198 at December 31, 2021 and September
30, 2021, respectively.
Weber Inc.
Condensed Consolidated
Statements of Operations
(dollars in thousands, except
share and per share data)
(unaudited)
Three Months Ended December
31,
2021
2020
Net sales (1)
$
283,141
$
308,878
Cost of goods sold (2)
219,128
174,073
Gross profit
64,013
134,805
Operating expenses:
Selling, general and administrative
(3)(4)
148,084
114,103
Amortization of intangible assets
5,174
3,017
Gain on disposal of assets held for
sale
—
(5,185
)
(Loss) income from operations
(89,245
)
22,870
Foreign currency loss (gain)
164
(3,507
)
Interest income (5)
(230
)
(179
)
Interest expense
15,761
14,652
Loss from early extinguishment of debt
—
5,448
(Loss) income before taxes
(104,940
)
6,456
Income tax (benefit) expense
(30,387
)
166
Loss from investments in unconsolidated
affiliates
—
1,405
Net (loss) income
$
(74,553
)
$
4,885
Net loss attributable to noncontrolling
interests
(91,330
)
—
Net income attributable to Weber Inc.
$
16,777
$
4,885
Earnings (loss) per share of Class A
common stock
Basic
$
0.31
N/A
Diluted
$
(0.19
)
N/A
Weighted average shares outstanding
Basic
53,309,932
N/A
Diluted
287,955,151
N/A
________________
(1)
Includes related party royalty revenue of
$144 and $43 for the three months ended December 31, 2021 and 2020,
respectively.
(2)
Includes related party rental expense of
zero and $179 for the three months ended December 31, 2021 and
2020, respectively.
(3)
Includes related party rental expense of
$167 and $59 for the three months ended December 31, 2021 and 2020,
respectively.
(4)
Includes related party royalty expense of
zero and $268 for the three months ended December 31, 2021 and
2020, respectively.
(5)
Includes related party interest income of
$3 and $14 for the three months ended December 31, 2021 and 2020,
respectively.
Weber Inc. Condensed
Consolidated Statement of Cash Flows (dollars in thousands)
(unaudited)
Three Months Ended December
31,
2021
2020
Operating activities
Net (loss) income
$
(74,553
)
$
4,885
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Provision for depreciation
8,613
6,749
Provision for amortization of intangible
assets
5,174
3,017
Provision for amortization of deferred
financing costs
1,022
912
Deferred income tax expense (benefit)
340
(1,840
)
Stock/unit-based compensation
25,511
3,428
Loss from investments in unconsolidated
affiliates
—
1,405
Gain on disposal of assets held for
sale
—
(5,185
)
Loss from early extinguishment of debt
—
5,448
Changes in operating assets and
liabilities
Accounts receivable
(18,345
)
(41,432
)
Inventories
(139,694
)
(76,209
)
Prepaid expenses and other current
assets
(46,606
)
10,408
Trade accounts payable
52,464
(34,655
)
Accrued expenses
(10,554
)
(22,157
)
Income taxes payable
3,074
(4,580
)
Other
5,661
(11,346
)
Net cash used in operating activities
(187,893
)
(161,152
)
Investing activities
Proceeds from disposal of property,
equipment and leasehold improvements
10
11,896
Additions to property, equipment and
leasehold improvements
(25,876
)
(4,972
)
Net cash (used in) provided by investing
activities
(25,866
)
6,924
Financing activities
Proceeds from issuance of long-term
debt
—
1,250,000
Payments for deferred financing costs
—
(26,654
)
Payments for capitalized offering
costs
(2,109
)
—
Payments under agreement with iDevices
(52
)
(58
)
Interest rate swap settlement payments
(1,478
)
(996
)
Proceeds from contribution of capital,
net
11,346
252
Repurchase of members’ interests
—
—
Dividends paid
(2,123
)
—
Members’ distributions
(9,627
)
(29,090
)
Borrowings from revolving credit
facility
203,000
—
Payments on revolving credit facility
(42,000
)
—
Payments of long-term debt
(3,125
)
(616,250
)
Shares withheld to satisfy employee tax
obligations
(351
)
—
Service on financing obligation
(145
)
(125
)
Net cash provided by financing
activities
153,336
577,079
Effect of exchange rate changes on cash
and cash equivalents
(895
)
(381
)
(Decrease) increase in cash and cash
equivalents
(61,318
)
422,470
Cash and cash equivalents at beginning of
period
107,517
123,792
Cash and cash equivalents at end of
period
$
46,199
$
546,262
Supplemental disclosures of cash flow
information:
Cash paid for interest
$
13,311
$
12,785
Cash paid for income taxes
$
4,439
$
4,299
Supplemental disclosures of non-cash
investing information:
Property and equipment included in
accounts payable and accrued expenses
$
26,050
$
5,805
Weber Inc.
Reconciliation of GAAP to
Non-GAAP Financial Information
(dollars in thousands)
The following table reconciles (loss)
income from operations to adjusted (loss) income from operations;
net (loss) income to adjusted net (loss) income; net (loss) income
to EBITDA; and EBITDA to Adjusted EBITDA for the periods
presented:
Three Months Ended December
31,
2021
2020
(Loss) income from operations
$
(89,245
)
$
22,870
Adjustments:
Foreign currency (loss) gain(1)
(164
)
3,507
Stock/unit-based compensation expense
25,511
3,428
Business transformation costs (2)
7,410
871
Operational transformation costs (3)
6,648
991
Debt refinancing and IPO costs (4)
—
2,761
COVID-19 costs (5)
—
27
Gain on disposal of assets held for
sale
—
(5,185
)
Adjusted (loss) income from
operations
$
(49,840
)
$
29,270
Net (loss) income
$
(74,553
)
$
4,885
Adjustments:
Stock/unit-based compensation expense
25,511
3,428
Business transformation costs(2)
7,410
871
Operational transformation costs(3)
6,648
991
Debt refinancing and IPO costs (4)
—
2,761
COVID-19 costs (5)
—
27
Loss from early extinguishment of debt
—
5,448
Gain on disposal of assets held for
sale
—
(5,185
)
Tax impact of adjusting items
(11,458
)
(214
)
Adjusted net (loss) income
$
(46,442
)
$
13,012
Net (loss) income
$
(74,553
)
$
4,885
Adjustments:
Interest expense, net
15,531
14,473
Income tax expense
(30,387
)
166
Depreciation and amortization
13,787
9,766
EBITDA
$
(75,622
)
$
29,290
Stock/unit-based compensation expense
25,511
3,428
Business transformation costs(2)
7,410
871
Operational transformation costs(3)
6,648
991
Debt refinancing and IPO costs (4)
—
2,761
COVID-19 costs (5)
—
27
Loss from early extinguishment of debt
—
5,448
Gain on disposal of assets held for
sale
—
(5,185
)
Adjusted EBITDA
$
(36,053
)
$
37,631
______________
(1)
Adjusted (loss) income from operations
includes foreign currency (loss) gain in order to align adjusted
(loss) income from operations with Adjusted EBITDA, with the
exception of depreciation and amortization and loss from
investments in unconsolidated affiliates.
(2)
“Business transformation costs” are costs
for business transformation initiatives that require severance or
other costs to transition to a new operating model.
(3)
“Operational transformation costs” are
defined as restructuring and transformation initiatives related to
supply chain, operational moves and startups that are designed to
enable future productivity. These costs also include significant
systems integration costs, as well was plant shutdown and closure
costs that will drive future efficiencies.
(4)
“Debt refinancing and IPO costs” are
defined as certain non-capitalizable costs from the refinancing of
the Company’s Secured Credit Facility and the Company's IPO.
(5)
During the three months ended December 31,
2020, the Company incurred costs related to the global COVID-19
pandemic. These costs primarily resulted from the impact of
enhanced employee safety and social distancing protocols.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220213005093/en/
INVESTOR RELATIONS Brian Eichenlaub
investors@weber.com
MEDIA Kristina Peterson-Lohman media@weber.com
Weber (NYSE:WEBR)
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