Actionable news
0
All posts from Actionable news
Actionable news in ELF: e.l.f. Beauty Inc,

e.l.f. Beauty Announces Second Quarter and First Half 2017 Results

OAKLAND, Calif.--(BUSINESS WIRE)--e.l.f. Beauty (NYSE:ELF) today announced results for the three- and six-month periods ended June 30, 2017.

“We are pleased with our strong progress in Q2 highlighted by a 27% increase in net sales and over 700 basis point expansion in gross margin”

Tweet this

“We are pleased with our strong progress in Q2 highlighted by a 27% increase in net sales and over 700 basis point expansion in gross margin,” stated Tarang Amin, Chairman and Chief Executive Officer. “Our performance continues to demonstrate the successful execution of our mission to make luxurious beauty accessible for all.”

Three Months Results Ended June 30, 2017

Net sales increased 27%, or $11.7 million from the second quarter of 2016, to $55.9 million, driven by sales growth across leading national retailers and the Company’s direct business. Gross margin expanded to 64% from 57% in the second quarter of 2016, primarily as a result of margin accretive innovation, coupled with improvements in customer terms, freight costs and the benefit of foreign exchange rate movements.

Selling, general and administrative expenses (“SG&A”) increased to 59% of net sales, compared to 56% of net sales in the second quarter of 2016, primarily due to continued investment to support long-term growth. SG&A includes $3.6 million of costs and expenses that are non-cash or that management does not believe are reflective of the Company’s ongoing operations. Adjusted SG&A, excluding the aforementioned $3.6 million of costs and non-cash expenses, was 52% of net sales, compared to 46% of net sales in the same period in fiscal 2016.

Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $10.0 million compared to Adjusted EBITDA of $8.4 million in the second quarter of 2016.

The Company generated a tax benefit of $3.4 million, compared to a benefit of $1.8 million in the second quarter of 2016. The benefit in the second quarter of 2017 was primarily driven by the impact of discrete items, including a $3.7 million benefit from stock option exercises.

On a GAAP basis, net income was $4.0 million, or $0.08 per diluted share, based on a weighted-average share count of 49.5 million shares. This compares to a net loss attributable to common stockholders of $96.4 million, or $117.31 per share, based on a weighted-average share count of 0.8 million shares in the second quarter of 2016.

Adjusted net income (net income excluding the items identified in the reconciliation table below) increased to $6.2 million, or $0.12 per diluted share, based on a weighted-average share count of 49.5 million shares. This compares to adjusted net income of $1.2 million, or $0.02 per diluted share, based on a pro forma share count of 49.5 million shares in the second quarter of 2016.

Six Months Results Ended June 30, 2017

Net sales increased 20%, or $19.6 million from the first half of 2016, to $116.4 million. Gross margin expanded to 64% from 56% in the first half of 2016.

Selling, general and administrative expenses (“SG&A”) increased to 56% of net sales, compared to 49% of net sales in the first half of 2016. SG&A includes $7.2 million of costs and expenses that are non-cash or that management does not believe are reflective of the Company’s ongoing operations. Adjusted SG&A, excluding the aforementioned $7.2 million of costs and non-cash expenses, was 50% of net sales, compared to 43% of net sales in the same period in fiscal 2016.

Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $21.7 million compared to Adjusted EBITDA of $20.0 million in the first half of 2016.

The Company generated a tax benefit of $3.3 million, compared to a provision for income taxes of $1.1 million in the first half of 2016. The benefit in the first half of 2017 was primarily driven by the impact of discrete items, including a $4.4 million benefit from stock option exercises.

On a GAAP basis, net income was $6.1 million, or $0.12 per diluted share, based on a weighted-average share count of 49.5 million shares. This compares to a net loss attributable to common stockholders of $130.5 million, or $200.43 per share, based on a weighted-average share count of 0.7 million shares in the first half of 2016.

Adjusted net income (net income excluding the items identified in the reconciliation table below) increased to $10.5 million, or $0.21 per diluted share, based on a weighted-average share count of 49.5 million shares. This compares to adjusted net income of $4.3 million, or $0.09 per diluted share, based on a pro forma share count of 49.5 million shares in the first half of 2016.

Balance Sheet

At June 30, 2017, the Company had $3.4 million in cash, as compared to $3.8 million as of June 30, 2016. Inventory at June 30, 2017, totaled $72.3 million, as compared to $32.4 million on June 30, 2016. At June 30, 2017, long-term debt totaled $152.2 million, as compared to $197.1 million as of June 30, 2016.

Company Outlook

The Company reaffirmed its outlook for 2017, with expectations for strong revenue growth and expansion in gross margin, as well as the full-year impact of public company expenses and continued investments in people, infrastructure, and brand building:

Full Year Full Year

2017 Outlook

2016 Actual Results
Net Sales $ 285 - 295 million $ 230 million
Adjusted EBITDA $ 61 - 64 million $ 54 million
Adjusted Net Income $ 21 - 23 million $ 18 million
Adjusted Pro Forma Diluted EPS $ 0.40 - 0.43 $ 0.36

Second Quarter 2017 Conference Call

The Company will hold a conference call today, August 9, 2017, at 4:30 p.m. ET to discuss the Company’s second quarter 2017 results. Investors and analysts interested in participating in the call are invited to dial (877) 451-6152 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at http://investor.elfcosmetics.com/ and remain available for 90 days. A telephone replay of this call will be available at 7:30 p.m. ET on August 9, 2017, until 11:59 p.m. ET on August 16, 2017, and can be accessed by dialing (844) 512-2921 and entering replay pin number 13667052.

About e.l.f. Beauty

e.l.f. makes luxurious beauty accessible for all. Established in 2004 as an e-commerce business (www.elfcosmetics.com), e.l.f. has become a true multi-channel brand through its e.l.f. stores and national distribution at Target, Walmart, CVS and other leading retailers. By engaging young, diverse makeup enthusiasts with innovative, high-quality cosmetics at an extraordinary value, e.l.f. has become one of the fastest growing cosmetics companies in the United States.

For more information about e.l.f. Beauty, visit the Company’s website at http://www.elfcosmetics.com.

Note Regarding Non-GAAP Financial Measures

This press release includes references to Adjusted SG&A, Adjusted Net Income, EBITDA, Adjusted EBITDA and Adjusted Pro Forma Diluted EPS. The Company presents these measures because its management uses these as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The measures referenced above are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of...


More