- Total revenue of $26.7 million versus $23.3 million in Q4 2020
- Net loss of ($0.1) million compared with net income of $0.1 million in Q4 2020
- Adjusted EBITDA of $3.2 million versus $3.4 million in Q4 2020(1)
- Adjusted Free Cash Flow of $0.2 million versus $4.8 million in Q4 2020(1)
- Cash provided by operating activities of $0.2 million versus $5.1 million in Q4 2020
VAUGHAN, ON, March 24, 2022 /CNW/ - MAV Beauty Brands Inc. ("MAV Beauty Brands" or the "Company"), a global personal care company, today announced its financial results for the three and 12 months ended December 31, 2021. Unless otherwise indicated, all amounts are expressed in U.S. dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures (see "Non-IFRS Measures" below).
"Revenue increased by 14.5% in the quarter compared to prior year and there were multiple performance highlights from the portfolio, including the sustained growth of the Marc Anthony and Cake brands. Nonetheless, it was a challenging quarter and year overall as we felt the impact of net distribution losses while our margins and profitability were also affected by ongoing supply chain cost pressures and other factors, said Serge Jureidini, President & CEO of MAV Beauty Brands. "We continue working to mitigate these headwinds. In a growth oriented haircare market, our focus for 2022 is to stabilize the business through enhanced execution and building the desirability of our brands, notably through product innovation. Over time, we continue to believe the platform will deliver above-category growth from a diverse and complementary brand portfolio."
Selected Financial Highlights(1)(2)(3)
| (in thousands of US dollars except per share amounts) (unaudited) | Q4 2021 | Q4 2020 | FY 2021 | FY 2020 |
| | | | | | |
| Revenue | | 26,703 | 23,323 | 107,156 | 114,906 |
| Gross profit | | 10,393 | 9,059 | 43,977 | 52,549 |
| Net income (loss) for the period | (142) | 108 | (97,636) | 6,506 |
| Earnings per share (basic) | | 0.00 | 0.00 | (2.66) | 0.18 |
| Adjusted EBITDA | | 3,160 | 3,397 | 16,506 | 28,470 |
| Cash flow from operating activities | 233 | 5,066 | 6,406 | 14,781 |
| Adjusted Free Cash Flow | | 177 | 4,837 | 5,838 | 13,438 |
| Adjusted Net Income | | 28 | 800 | 3,645 | 12,637 |
| Adjusted Earnings per Share (diluted) | 0.00 | 0.02 | 0.09 | 0.30 |
| (1) | EBITDA (used below), Adjusted EBITDA, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Net Income, Adjusted Earnings per Share, and Net Debt (used below) are each non-IFRS measures and are not earning measures recognized by IFRS. Further information about non-IFRS measures and definitions of the non-IFRS measures used in this press release can be found under the heading "Non-IFRS Measures" in this press release. Reconciliations of non-IFRS measures to the relevant reported measures prepared in accordance with IFRS can be found in this press release under the headings "Q4 2021 Compared to Q4 2020 & FY2021 Compared to FY2020". See also the heading "How We Assess the Performance of Our Business" on page 8, and the heading "Non-IFRS Measures" on page 10 of our Management's Discussion and Analysis for the three- and 12-month periods ended December 31, 2021. |
| (2) | Certain comparative figures have been revised to reclassify compliance charges that were previously recorded in selling and administrative expenses to revenue to conform with IFRS 15 and the financial presentation adopted for the current period. |
| (3) | Earnings per share (basic) calculation does not include the impact of 2,463,963 common shares of the Company issuable upon the exchange of the units issued as part of The Mane Choice acquisition. |
Q4 2021 Business and Financial Review
Q4 2021 revenue increased by 14.5% to $26.7 million, compared to $23.3 million in Q4 2020. For the Canada/US region, revenue increased by 11.9% to $24.4 million in Q4 2021, compared to $21.8 million in Q4 2020. The year-over-year increase mainly reflects higher sales from two of the Company's brands, which offset reduced sales from the other two brands. For the International region, revenue increased by 38.4% to $2.2 million, in Q4 2021 compared to $1.6 million in Q4 2020, reflecting continued recovery from COVID-19 related disruptions and improved production and logistics service levels compared to the prior year.
Gross profit increased by 14.7% to $10.4 million in Q4 2021, compared to $9.1 million in Q4 2020. Gross profit margin was 38.9% in Q4 2021, compared to 38.8% in Q4 2020. The year-over-year improvement reflects a favorable sales mix, offset by the continued negative impact of increased supply chain input costs. Beginning in 2022, the Company is adjusting its pricing on certain products to partially offset some of these higher input costs.
Selling and administrative expense increased by 21.8%, or $1.3 million, to $7.3 million in Q4 2021 compared to $6.0 million in Q4 2020. The increase in selling and administrative expense primarily reflects increased marketing and compensation costs in Q4 2021 compared to Q4 2020, partially offset by a favourable variance in administrative costs.
Adjusted EBITDA(1) decreased to $3.2 million in Q4 2021, from $3.4 million in Q4 2020. In Q4 2021, the Company reported a net loss of ($0.1) million, versus net income of $0.1 million in Q4 2020. Adjusted Net Income(1) decreased to $0.0 million, compared with Adjusted Net Income(1) of $0.8 million in Q4 2020, due to the factors discussed above. Adjusted Earnings Per Share (Diluted)(1) was $0.00 per share in Q4 2021, compared with $0.02 per share in Q4 2020.
Cash flow from operations was $1.7 million and Adjusted Free Cash Flow(1) decreased to $0.2 million in Q4 2021, compared to $1.9 million and $4.8 million, respectively, in Q4 2020 . The year-over-year change was mainly attributable due to change in working capital. At year end, Net Debt(1) was $121.5 million, and cash was $12.0 million.
In late February 2022, a cyber security breach at our primary third-party logistics partner disrupted our order outflow capabilities. The Company anticipates an unfavourable impact on its Q1 revenue, primarily resulting in a shift of shipments into Q2. Mitigation plans have been implemented and the Company anticipates a return to pre-incident operating levels as of April 2022.
Financial Statements and Management's Discussion and Analysis
The Company's audited consolidated financial statements and Management's Discussion and Analysis for the three- and 12-month periods ended December 31, 2021 are available under the Company's profile on SEDAR at www.sedar.com and on MAV Beauty Brands' investor relations website at investors.mavbeautybrands.com.
Conference Call & Webcast
MAV Beauty Brands will host a conference call to discuss its Fiscal 2021 fourth quarter financial results at 8:30 a.m. EDT on March 24, 2022. To participate in the call, dial 647-794-4605 or 888-204-4368 using the conference ID 7935239. The audio webcast can be accessed at investors.mavbeautybrands.comhttps://bit.ly/2mutHer. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.