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Gross profit was $9.7 million in Q3 2022, similar to the $9.7 million reported in Q3 2021. Gross profit margin was 44.2% in Q3 2022, an increase from 40.3% in Q3 2021. The gross margin improvement over the prior year is mainly attributable to a more profitable sales mix, retroactive chargeback recoveries and operating cost savings. The Company continues to work to mitigate the impact of inflation on supply chain input costs through select pricing actions in combination with operational cost savings initiatives.
Adjusted EBITDA(1) increased to $3.3 million in Q3 2022, from $3.1 million in Q3 2021 mainly due to lower revenue, offset by improved gross margins.
In Q3 2022, the Company reported a net loss of $93.5 million, versus a net loss of $103.1 million in Q3 2021. The Q3 2022 results include a $89.9 million non-cash charge for impairment of goodwill and intangibles. Due to the evolving macroeconomic outlook and higher interest/discount rates, among other factors, the Company determined that an indication of impairment existed as of September 30, 2022 and assessed goodwill and intangible assets for impairment. Additional details regarding the Company's methodology and assumptions are disclosed in Note 9 to the unaudited condensed consolidated interim financial statements for Q3 2022.
Adjusted Net Loss(1) was ($0.2) million, compared with Adjusted Net Income of $0.3 million in Q3 2021, due to the factors discussed above. Adjusted Net Loss Per Share (Diluted)(1) was ($0.01) per share in Q3 2022, compared with Adjusted Net Income Per Share (Diluted)(1) $0.01 per share in Q3 2021. Loss per Share (basic) was ($2.54) per share in Q3 2022, compared with ($2.81) per share in Q3 2021.
Cash flow from operating activities was $0.9 million in Q3 2022, down from $1.9 million in Q3 2021, and Adjusted Free Cash Flow(1) decreased to $0.8 million in Q3 2022, compared to $1.8 million in Q3 2021. On a year-to-date basis, Adjusted Free Cash Flow of $5.7 million is comparable to $5.7 million for the Q3 2021 year-to-date period. At quarter end, Cash was $10.4 million and Net Debt(1) was $116.7 million, a decrease from $117.5 as at June 30, 2022 and $121.5 million as at December 31, 2021.
Appointment of Kathy Mayor to Board of Directors
The Company also announced that highly experienced executive Kathy Mayor will join MAV's Board as an independent director, effective November 3, 2022.
Ms. Mayor is currently the Chief Marketing Officer of Transformco, a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences. Previously, she served as Chief Marketing Officer at BoxyCharm; Chief Marketing Officer and Chief Digital Officer at Carnival Cruise Lines; and Global SVP of Strategy, CRM and eCommerce for Las Vegas Sands Corp., among other senior positions with a focus in the retail and consumer sectors. Ms. Mayor serves on the Board of Directors of Phunware (NASDAQ:PHUN) and Viking Cruises, and previously served on the Board of Directors of TinyBeans (ASX:TNY,OTCQB:TNYYF) and on the Advisory Board of Pinterest and ABS-CBN Corporation. She holds a Master in Business Administration (MBA) from Harvard University and a Management Engineering degree from Ateneo de Manila University.
"We welcome Kathy to MAV's Board and look forward to benefiting from her insights and experience," said Chris Elshaw, Chairman of the Board. "She brings a wealth of knowledge and proven success in all areas of marketing, from brand-building to digital, that we believe will add tremendous value as MAV works to increase awareness of its brands and build on the success to date in e-commerce."
Financial Statements and Management's Discussion and Analysis
The Company's unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis for the three- and nine-month periods ended September 30, 2022 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 2022 third quarter financial results at 8:30 a.m. EDT on November 3, 2022. To participate in the call, dial 416-764-8650 or 888-664-6383 using the conference ID 34472668. The audio webcast can be accessed at investors.mavbeautybrands.com. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.
About MAV Beauty Brands (TSX:MAV)
MAV Beauty Brands is a global personal care platform focused on acquiring great independent brands and helping these brands to scale and win market share through product innovation, marketing and expanded distribution, Today, MAV Beauty Brands markets a diversified portfolio of four complementary personal care brands – Marc Anthony True Professional, Renpure, Cake Beauty and The Mane Choice – offering premium quality hair care, face and body care beauty products. These products are sold in over 25 countries around the world and in many major retailers.
Non–IFRS Measures
This press release makes reference to certain non–IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non–IFRS measures including "Adjusted Net Income (Loss) Per Share (Diluted)", "Adjusted EBITDA", "Adjusted Free Cash Flow", "Adjusted Net Income (Loss)", "EBITDA", "Free Cash Flow" and "Net Debt". These non–IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors, and other interested parties frequently use non–IFRS measures in the evaluation of issuers. Our management also uses non–IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Definitions and reconciliations of non-IFRS measures to the relevant reported measures prepared in accordance with IFRS can be found under the headings "Non-IFRS Measures" and "Q3 2022 Compared to Q3 2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10.
"Adjusted Net Income (Loss) Per Share (Diluted)" is computed similarly to basic earnings per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed conversion of preference shares, proportionate voting shares, and exchangeable shares and exercise of stock options, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. We believe Adjusted Net Income (Loss) Per Share (Diluted) is a useful measure to assess the performance of our Company as it provides meaningful operating results per diluted share and facilitates period-to-period operating comparisons.
"Adjusted EBITDA" represents, for the applicable period, EBITDA before certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; and (v) unrealized foreign exchange (loss) gain. We believe Adjusted EBITDA is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"Adjusted Free Cash Flow" is calculated as Free Cash Flow adjusted to add back acquisition related costs which are included in cash provided by operating activities. We believe Adjusted free cash flow is a useful measure to assess the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares. It also facilitates period-to-period comparisons.
"Adjusted Net Income (Loss)" represents, for the applicable period, net income (loss) as adjusted to add back or deduct, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; (v) unrealized foreign exchange loss (gain); and (vi) tax impacts of the aforementioned adjustments (based on annual effective tax rate). We believe Adjusted Net Income (Loss) is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"EBITDA" represents net income (loss) for the period before: (i) income tax expense (recovery); (ii) interest and accretion; and (iii) amortization and depreciation.
''Free Cash Flow'' represents, for the applicable period, cash provided by operating activities less cash used to purchase property and equipment. Free cash flow is a key metric used by the investing community that measures the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares.
"Net Debt" is calculated as long-term debt before unamortized deferred financing costs less cash as reported in the consolidated statements of financial position. We believe Net Debt is a useful measure is an important measure as it reflects the principal amount of debt owing by the Company as at a particular date.
Forward-Looking Information
Certain information in this press release, including the Company's expectation for the haircare market, improved operational execution across the Company's platform, continued resilience of the Company's core categories through economic downturns, the ability to achieve improved and consistent operating results and financial performance, including by expanding distribution and regaining sales momentum, the ability to build the desirability and awareness of our brands through product innovation, the ability to adjust pricing to offset higher product input and supply chain costs and successfully complete procurement cost savings initiatives, constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by MAV Beauty Brands as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Company's Annual Information Form dated March 23, 2022 for the year ended December 31, 2021, the "Risk Factors" section of the Company's Q3 2022 MD&A, and the Company's other periodic filings made available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect MAV Beauty Brands; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and MAV Beauty Brands expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
Q3 2022 Compared to Q3 2021
| (in thousands of US dollars) (unaudited) | Q3 2022 | Q3 2021 | $ Change | % Change |
| Consolidated statements of operations: | | | | | | | | |
| Revenue (1) | | 22,048 | | 24,123 | | (2,075) | | (8.6 %) |
| Cost of sales | | 12,311 | | 14,390 | | (2,079) | | (14.4 %) |
| Gross profit | | 9,737 | | 9,733 | | 4 | | 0.0 % |
| | | | | | | | | |
| Expenses | | | | | | | | |
| Selling and administrative (1) | | 6,771 | | 6,852 | | (81) | | (1.2 %) |
| Amortization and depreciation | | 1,096 | | 1,102 | | (6) | | (0.5 %) |
| Impairment of goodwill and intangible assets | | 89,904 | | 129,033 | | (39,129) | | (30.3 %) |
| Interest and accretion | | 2,036 | | 1,481 | | 555 | | 37.5 % |
| Foreign exchange gain | | (221) | | (82) | | (139) | | 169.5 % |
| Integration, restructuring, and other | | 38 | | 888 | | (850) | | (95.7 %) |
| | | 99,624 | | 139,274 | | (39,650) | | (28.5 %) |
| Loss before income taxes | | (89,887) | | (129,541) | | 39,654 | | (30.6 %) |
| Income tax expense (recovery) | | | | | | | | |
| Deferred | | 3,653 | | (26,395) | | 30,048 | | (113.8 %) |
| | | 3,653 | | (26,395) | | 30,048 | | (113.8 %) |
| Net loss for the period | | (93,540) | | (103,146) | | 9,606 | | (9.3 %) |
| EBITDA (2) | | (86,755) | | (126,958) | | 40,203 | | (31.7 %) |
| Adjusted EBITDA (2) | | 3,317 | | 3,114 | | 203 | | 6.5 % |
| Adjusted Net Income (Loss) (2) | | (188) | | 266 | | (455) | nmf |
| | | | | | | | |
| (1) | 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. |
| (2) | EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) are each non-IFRS measures and are not earning measures recognized by IFRS. For definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found under the headings "Non-IFRS Measures" and "Q3 2022 Compared to Q3 2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10. |
| (in thousands of US dollars) (unaudited) | | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 |
| Consolidated net income (loss): | | | (93,540) | | (103,146) | | (93,908) | | (97,494) |
| Income tax expense | | | 3,653 | | (26,395) | | 3,346 | | (24,379) |
| Interest and accretion | | | 2,036 | | 1,481 | | 5,529 | | 4,966 |
| Amortization and depreciation | | | 1,096 | | 1,102 | | 3,293 | | 3,269 |
| EBITDA | | | (86,755) | | (126,958) | | (81,740) | | (113,638) |
| Integration, restructuring, and other | (1) | | 38 | | 888 | | 826 | | (2,750) |
| Share-based compensation | (2) | | 303 | | 184 | | 904 | | 722 |
| Impairment of goodwill and intangible assets | (3) | | 89,904 | | 129,033 | | 89,904 | | 129,033 |
| Unrealized foreign exchange (gain) loss | | | (173) | | (33) | | (227) | | (21) |
| Adjusted EBITDA | | | 3,317 | | 3,114 | | 9,667 | | 13,346 |
| | (in thousands of US dollars) (unaudited) | | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 | |
| | Consolidated net income (loss): | | | (93,540) | | (103,146) | | (93,908) | | (97,494) | |
| | Integration, restructuring, and other | (1) | | 38 | | 888 | | 826 | | (2,750) | |
| | Share-based compensation | (2) | | 303 | | 184 | | 904 | | 722 | |
| | Impairment of goodwill and intangible assets | (3) | | 89,904 | | 129,033 | | 89,904 | | 129,033 | |
| | Unrealized foreign exchange (gain) loss | | | (173) | | (33) | | (227) | | (21) | |
| | Tax impact of the above adjustments | | | 3,280 | | (26,660) | | 2,939 | | (25,873) | |
| | Adjusted Net Income (Loss) | | | (188) | | 266 | | 438 | | 3,617 | |
| | |
| (1) | Refer to Note 11 to the unaudited condensed consolidated interim financial statements for further details. |
| (2) | Represents recognition of share-based compensation, which have been accounted for as selling and administrative expenses. |
| (3) | Refer to Note 9 to the unaudited condensed consolidated interim financial statements for further details. |
| | (in thousands of US dollars) (unaudited) | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 | |
| | Cash provided by operating activities | | 855 | | 1,898 | | 5,875 | | 6,173 | |
| | Less: purchase of property and equipment | | (44) | | (138) | | (130) | | (512) | |
| | Free Cash Flow and Adjusted Free Cash Flow | | 811 | | 1,760 | | 5,745 | | 5,661 | |
SOURCE MAV Beauty Brands Inc.
Cision
View original content: https://www.newswire.ca/en/releases/archive/November2022/03/c5887.htmlGross profit was $9.7 million in Q3 2022, similar to the $9.7 million reported in Q3 2021. Gross profit margin was 44.2% in Q3 2022, an increase from 40.3% in Q3 2021. The gross margin improvement over the prior year is mainly attributable to a more profitable sales mix, retroactive chargeback recoveries and operating cost savings. The Company continues to work to mitigate the impact of inflation on supply chain input costs through select pricing actions in combination with operational cost savings initiatives.
Adjusted EBITDA(1) increased to $3.3 million in Q3 2022, from $3.1 million in Q3 2021 mainly due to lower revenue, offset by improved gross margins.
In Q3 2022, the Company reported a net loss of $93.5 million, versus a net loss of $103.1 million in Q3 2021. The Q3 2022 results include a $89.9 million non-cash charge for impairment of goodwill and intangibles. Due to the evolving macroeconomic outlook and higher interest/discount rates, among other factors, the Company determined that an indication of impairment existed as of September 30, 2022 and assessed goodwill and intangible assets for impairment. Additional details regarding the Company's methodology and assumptions are disclosed in Note 9 to the unaudited condensed consolidated interim financial statements for Q3 2022.
Adjusted Net Loss(1) was ($0.2) million, compared with Adjusted Net Income of $0.3 million in Q3 2021, due to the factors discussed above. Adjusted Net Loss Per Share (Diluted)(1) was ($0.01) per share in Q3 2022, compared with Adjusted Net Income Per Share (Diluted)(1) $0.01 per share in Q3 2021. Loss per Share (basic) was ($2.54) per share in Q3 2022, compared with ($2.81) per share in Q3 2021.
Cash flow from operating activities was $0.9 million in Q3 2022, down from $1.9 million in Q3 2021, and Adjusted Free Cash Flow(1) decreased to $0.8 million in Q3 2022, compared to $1.8 million in Q3 2021. On a year-to-date basis, Adjusted Free Cash Flow of $5.7 million is comparable to $5.7 million for the Q3 2021 year-to-date period. At quarter end, Cash was $10.4 million and Net Debt(1) was $116.7 million, a decrease from $117.5 as at June 30, 2022 and $121.5 million as at December 31, 2021.
Appointment of Kathy Mayor to Board of Directors
The Company also announced that highly experienced executive Kathy Mayor will join MAV's Board as an independent director, effective November 3, 2022.
Ms. Mayor is currently the Chief Marketing Officer of Transformco, a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences. Previously, she served as Chief Marketing Officer at BoxyCharm; Chief Marketing Officer and Chief Digital Officer at Carnival Cruise Lines; and Global SVP of Strategy, CRM and eCommerce for Las Vegas Sands Corp., among other senior positions with a focus in the retail and consumer sectors. Ms. Mayor serves on the Board of Directors of Phunware (NASDAQ:PHUN) and Viking Cruises, and previously served on the Board of Directors of TinyBeans (ASX:TNY,OTCQB:TNYYF) and on the Advisory Board of Pinterest and ABS-CBN Corporation. She holds a Master in Business Administration (MBA) from Harvard University and a Management Engineering degree from Ateneo de Manila University.
"We welcome Kathy to MAV's Board and look forward to benefiting from her insights and experience," said Chris Elshaw, Chairman of the Board. "She brings a wealth of knowledge and proven success in all areas of marketing, from brand-building to digital, that we believe will add tremendous value as MAV works to increase awareness of its brands and build on the success to date in e-commerce."
Financial Statements and Management's Discussion and Analysis
The Company's unaudited condensed consolidated interim financial statements and Management's Discussion and Analysis for the three- and nine-month periods ended September 30, 2022 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 2022 third quarter financial results at 8:30 a.m. EDT on November 3, 2022. To participate in the call, dial 416-764-8650 or 888-664-6383 using the conference ID 34472668. The audio webcast can be accessed at investors.mavbeautybrands.com. Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.
About MAV Beauty Brands (TSX:MAV)
MAV Beauty Brands is a global personal care platform focused on acquiring great independent brands and helping these brands to scale and win market share through product innovation, marketing and expanded distribution, Today, MAV Beauty Brands markets a diversified portfolio of four complementary personal care brands – Marc Anthony True Professional, Renpure, Cake Beauty and The Mane Choice – offering premium quality hair care, face and body care beauty products. These products are sold in over 25 countries around the world and in many major retailers.
Non–IFRS Measures
This press release makes reference to certain non–IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non–IFRS measures including "Adjusted Net Income (Loss) Per Share (Diluted)", "Adjusted EBITDA", "Adjusted Free Cash Flow", "Adjusted Net Income (Loss)", "EBITDA", "Free Cash Flow" and "Net Debt". These non–IFRS measures are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors, and other interested parties frequently use non–IFRS measures in the evaluation of issuers. Our management also uses non–IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and to determine components of management compensation. Definitions and reconciliations of non-IFRS measures to the relevant reported measures prepared in accordance with IFRS can be found under the headings "Non-IFRS Measures" and "Q3 2022 Compared to Q3 2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10.
"Adjusted Net Income (Loss) Per Share (Diluted)" is computed similarly to basic earnings per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed conversion of preference shares, proportionate voting shares, and exchangeable shares and exercise of stock options, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. We believe Adjusted Net Income (Loss) Per Share (Diluted) is a useful measure to assess the performance of our Company as it provides meaningful operating results per diluted share and facilitates period-to-period operating comparisons.
"Adjusted EBITDA" represents, for the applicable period, EBITDA before certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; and (v) unrealized foreign exchange (loss) gain. We believe Adjusted EBITDA is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"Adjusted Free Cash Flow" is calculated as Free Cash Flow adjusted to add back acquisition related costs which are included in cash provided by operating activities. We believe Adjusted free cash flow is a useful measure to assess the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares. It also facilitates period-to-period comparisons.
"Adjusted Net Income (Loss)" represents, for the applicable period, net income (loss) as adjusted to add back or deduct, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management's view are not indicative of continuing operations, including: (i) integration, restructuring, and other costs; (ii) purchase accounting adjustments; (iii) share–based compensation; (iv) impairment of goodwill; (v) unrealized foreign exchange loss (gain); and (vi) tax impacts of the aforementioned adjustments (based on annual effective tax rate). We believe Adjusted Net Income (Loss) is a useful measure to assess the performance of our Company as it provides meaningful operating results and facilitates period-to-period operating comparisons.
"EBITDA" represents net income (loss) for the period before: (i) income tax expense (recovery); (ii) interest and accretion; and (iii) amortization and depreciation.
''Free Cash Flow'' represents, for the applicable period, cash provided by operating activities less cash used to purchase property and equipment. Free cash flow is a key metric used by the investing community that measures the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares.
"Net Debt" is calculated as long-term debt before unamortized deferred financing costs less cash as reported in the consolidated statements of financial position. We believe Net Debt is a useful measure is an important measure as it reflects the principal amount of debt owing by the Company as at a particular date.
Forward-Looking Information
Certain information in this press release, including the Company's expectation for the haircare market, improved operational execution across the Company's platform, continued resilience of the Company's core categories through economic downturns, the ability to achieve improved and consistent operating results and financial performance, including by expanding distribution and regaining sales momentum, the ability to build the desirability and awareness of our brands through product innovation, the ability to adjust pricing to offset higher product input and supply chain costs and successfully complete procurement cost savings initiatives, constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is positioned", "estimates", "intends", "assumes", "anticipates" or "does not anticipate" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events.
Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by MAV Beauty Brands as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the "Risk Factors" section of the Company's Annual Information Form dated March 23, 2022 for the year ended December 31, 2021, the "Risk Factors" section of the Company's Q3 2022 MD&A, and the Company's other periodic filings made available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect MAV Beauty Brands; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and MAV Beauty Brands expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
Q3 2022 Compared to Q3 2021
| (in thousands of US dollars) (unaudited) | Q3 2022 | Q3 2021 | $ Change | % Change |
| Consolidated statements of operations: | | | | | | | | |
| Revenue (1) | | 22,048 | | 24,123 | | (2,075) | | (8.6 %) |
| Cost of sales | | 12,311 | | 14,390 | | (2,079) | | (14.4 %) |
| Gross profit | | 9,737 | | 9,733 | | 4 | | 0.0 % |
| | | | | | | | | |
| Expenses | | | | | | | | |
| Selling and administrative (1) | | 6,771 | | 6,852 | | (81) | | (1.2 %) |
| Amortization and depreciation | | 1,096 | | 1,102 | | (6) | | (0.5 %) |
| Impairment of goodwill and intangible assets | | 89,904 | | 129,033 | | (39,129) | | (30.3 %) |
| Interest and accretion | | 2,036 | | 1,481 | | 555 | | 37.5 % |
| Foreign exchange gain | | (221) | | (82) | | (139) | | 169.5 % |
| Integration, restructuring, and other | | 38 | | 888 | | (850) | | (95.7 %) |
| | | 99,624 | | 139,274 | | (39,650) | | (28.5 %) |
| Loss before income taxes | | (89,887) | | (129,541) | | 39,654 | | (30.6 %) |
| Income tax expense (recovery) | | | | | | | | |
| Deferred | | 3,653 | | (26,395) | | 30,048 | | (113.8 %) |
| | | 3,653 | | (26,395) | | 30,048 | | (113.8 %) |
| Net loss for the period | | (93,540) | | (103,146) | | 9,606 | | (9.3 %) |
| EBITDA (2) | | (86,755) | | (126,958) | | 40,203 | | (31.7 %) |
| Adjusted EBITDA (2) | | 3,317 | | 3,114 | | 203 | | 6.5 % |
| Adjusted Net Income (Loss) (2) | | (188) | | 266 | | (455) | nmf |
| | | | | | | | |
| (1) | 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. |
| (2) | EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss) are each non-IFRS measures and are not earning measures recognized by IFRS. For definitions and reconciliations of non-IFRS measures to the relevant reported measures can be found under the headings "Non-IFRS Measures" and "Q3 2022 Compared to Q3 2021" in this press release. See also our Management's Discussion and Analysis under the headings "How We Assess the Performance of Our Business" on page 8, and "Non-IFRS Measures" on page 10. |
| (in thousands of US dollars) (unaudited) | | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 |
| Consolidated net income (loss): | | | (93,540) | | (103,146) | | (93,908) | | (97,494) |
| Income tax expense | | | 3,653 | | (26,395) | | 3,346 | | (24,379) |
| Interest and accretion | | | 2,036 | | 1,481 | | 5,529 | | 4,966 |
| Amortization and depreciation | | | 1,096 | | 1,102 | | 3,293 | | 3,269 |
| EBITDA | | | (86,755) | | (126,958) | | (81,740) | | (113,638) |
| Integration, restructuring, and other | (1) | | 38 | | 888 | | 826 | | (2,750) |
| Share-based compensation | (2) | | 303 | | 184 | | 904 | | 722 |
| Impairment of goodwill and intangible assets | (3) | | 89,904 | | 129,033 | | 89,904 | | 129,033 |
| Unrealized foreign exchange (gain) loss | | | (173) | | (33) | | (227) | | (21) |
| Adjusted EBITDA | | | 3,317 | | 3,114 | | 9,667 | | 13,346 |
| | (in thousands of US dollars) (unaudited) | | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 | |
| | Consolidated net income (loss): | | | (93,540) | | (103,146) | | (93,908) | | (97,494) | |
| | Integration, restructuring, and other | (1) | | 38 | | 888 | | 826 | | (2,750) | |
| | Share-based compensation | (2) | | 303 | | 184 | | 904 | | 722 | |
| | Impairment of goodwill and intangible assets | (3) | | 89,904 | | 129,033 | | 89,904 | | 129,033 | |
| | Unrealized foreign exchange (gain) loss | | | (173) | | (33) | | (227) | | (21) | |
| | Tax impact of the above adjustments | | | 3,280 | | (26,660) | | 2,939 | | (25,873) | |
| | Adjusted Net Income (Loss) | | | (188) | | 266 | | 438 | | 3,617 | |
| | |
| (1) | Refer to Note 11 to the unaudited condensed consolidated interim financial statements for further details. |
| (2) | Represents recognition of share-based compensation, which have been accounted for as selling and administrative expenses. |
| (3) | Refer to Note 9 to the unaudited condensed consolidated interim financial statements for further details. |
| | (in thousands of US dollars) (unaudited) | Q3 2022 | Q3 2021 | YTD Q3 2022 | YTD Q3 2021 | |
| | Cash provided by operating activities | | 855 | | 1,898 | | 5,875 | | 6,173 | |
| | Less: purchase of property and equipment | | (44) | | (138) | | (130) | | (512) | |
| | Free Cash Flow and Adjusted Free Cash Flow | | 811 | | 1,760 | | 5,745 | | 5,661 | |
SOURCE MAV Beauty Brands Inc.
Cision
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