Press release

F45 Training Holdings Inc. Reports Second Quarter Fiscal 2021 Results

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Sponsored by Businesswire

F45 Training Holdings Inc. (“F45” or the “Company”) (NYSE:FXLV), one of the fastest growing fitness franchisors in the United States based on the number of franchises sold, today announced financial results for the fiscal second quarter ended June 30, 2021.

“We are very pleased to report strong second quarter results, underscored by 554 net new franchises sold and 68 net new studio openings. These fantastic net franchise sales and openings numbers demonstrate the strength of our brand and the continued interest F45 has received from investors and entrepreneurs around the world. We have never been more excited about the opportunity we have to transform the health and wellness industry as we expand our footprint and our franchise offerings globally,” said Adam J. Gilchrist, President, CEO and Chairman of F45.

He continued, “Despite the ongoing uncertainty related to COVID-19 and recent Delta variant spread, we remain highly encouraged by the resilience of our franchise network and our members’ enthusiasm to come back to our studios at a very healthy pace. We delivered strong same-store sales growth of 126% during the quarter as global systemwide sales returned to pre-pandemic levels and our United States segment generated historic systemwide sales of $41 million in the quarter.

“As the broader fitness industry continues to evolve, I’ve never been more excited by F45’s unique strategic position and the opportunity to offer to our growing network of franchisees and members the world’s best workout,” said Mr. Gilchrist.

Q2 2021 Compared to Q2 2020 Fiscal Highlights

  • Total revenue increased 54% to $26.8 million.
  • Same-store sales increased 126%.
  • Net new studio openings totaled 68 compared to 33.
  • Net new franchises sold totaled 554 compared to 100.
  • Reported income from operations of $3.1 million compared to $5.6 million.
  • Adjusted EBITDA increased 7% to $10.7 million(1).

    (1) Please refer to explanation of non-GAAP financial measure for Adjusted EBITDA.

Results for the Second Quarter Ended June 30, 2021

Total revenue increased $9.4 million, or 54%, to $26.8 million from $17.5 million as compared to the second quarter last year.

  • Franchise revenue increased $8.5 million, or 71%, to $20.6 million from $12.1 million in the prior year period. The increase in franchise segment revenue was primarily driven by the increase in the number of franchises sold, as well as a one-time adjustment to revenue recognition related to a change in estimates of approximately $3.0 million. This adjustment is due to a change in estimates related to a subset of franchise contracts, whereby the company recognizes revenue on this subset of agreements consistent with revenue recognition for the remainder of the company’s franchise agreements.
  • Equipment revenue increased $0.9 million, or 16%, to $6.3 million from $5.4 million in the prior year period, driven by increased sales and deliveries of World Packs.

Gross profit increased to $21.6 million, compared to $13.2 million in the second quarter of last year. Gross profit margin was 80.6% for the quarter, a 490 basis points increase from the same period last year. The gross profit margin improvement was primarily driven by higher mix of franchise segment revenue.

Selling, general and administrative (“SG&A”) expenses were $18.6 million, compared to $7.6 million in the second quarter last year. The increase in SG&A expense was primarily due to professional services and other one-time expenses as well as increased brand building investments.

Net loss was $30.5 million, compared to net income of $5.9 million in the second quarter last year.

Adjusted EBITDA was $10.7 million, compared to $10.0 million in the second quarter last year.

Liquidity and Capital Resources

As of June 30, 2021, the Company has approximately $18.2 million of cash and cash equivalents, including restricted cash, and $255 million in total debt, net of unamortized financing costs.

In July 2021, the Company closed its initial public offering (“IPO”) and received net proceeds from the offering of approximately $279.0 million, after deducting underwriting discounts and commissions. The Company used the proceeds from the offering to repay all $190.7 million of outstanding indebtedness, $25.0 million for the acquisition of certain assets of the Flywheel indoor cycling business, $2.4 million in cash bonuses to certain employees, and $2.5 million for expenses incurred with the IPO. In addition, at the time of the IPO closing, all outstanding shares of convertible preferred stock and outstanding convertible notes were converted into common stock.

Additionally, in August 2021, the underwriters in the Company’s IPO partially exercised an overallotment option to purchase an additional 307,889 shares of the Company’s common stock from the Company. The Company received $4.6 million in net proceeds from the purchase of the additional shares after deducting underwriting costs and commissions.

In August 2021, the Company entered into an amended and restated credit agreement (“Credit Agreement”) which amended and restated the Secured Credit Agreement dated September 18, 2019. The Credit Agreement provided for a $90.0 million five-year senior secured revolved facility (“Facility”). The Credit Agreement also provides that, under certain circumstances, the Company may increase the aggregate principal amount of revolving commitments by an agreement amount of up to $35.0 million for a total aggregate commitment of up to $125.0 million. The proceeds from the Facility will be used for general corporate purposes.

Financial Outlook

For the year ending December 31, 2021, the Company expects the following, assuming there is no significant worsening of the COVID-19 pandemic that materially impacts performance, including prolonged studio closures or other mandated operational restrictions:

  • Full-year revenue between $132 million and $137 million.
  • Full-year new net franchises sold of 800 to 850.
  • Full-year new net franchise openings of 220 to 260.
  • Adjusted EBITDA between $50 million and $52 million.

Conference Call

A conference call to discuss the Company’s second quarter results is scheduled for August, 26 2021, at 4:30 P.M. ET. To participate, please dial 646-904-5544 or 844-200-6205 and use the passcode 093239. The call is also accessible via webcast at https://ir.f45training.com/. A recording will be available shortly after the conclusion of the call. To access the replay, please dial 929-458-6194 and use the passcode 354115. An archive of the webcast will be available on F45 Training Holdings’ investor relations website.

About F45

F45 offers consumers functional 45-minute workouts that are effective, fun and community-driven. F45 utilizes proprietary technologies: a fitness programming algorithm and a patented technology-enabled delivery platform that leverages a rich content database of over 3,900 unique functional training movements to offer new workouts each day and provide a standardized experience across the Company’s global footprint.

Non-GAAP Financial Measures

In addition to reporting our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release presents certain other supplemental financial measures, including Adjusted EBITDA, which is a measurement that is not calculated in accordance with GAAP. Management believes that Adjusted EBITDA is useful to management as it allows investors to evaluate the effectiveness of our business strategies, make budgeting and capital allocation decisions, and compare our performance against that of other peer companies using similar measures. Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and adjusted to exclude the impact of sales tax liability, transaction expenses, certain legal costs and settlements, COVID-19 concessions, growth and new market development expense as well as certain other items identified as affecting comparability, when applicable. Adjusted EBITDA eliminates non-cash depreciation and amortization expense that results from our capital investments and intangible assets, as well as income taxes, which may not be comparable with other companies based on our tax structure. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance. Other companies may define Adjusted EBITDA differently and, as a result the Company’s measures of Adjusted EBITDA, it may not be directly comparable to those of other companies. A reconciliation of non-GAAP financial measures used in this press release to their nearest comparable GAAP financial measures is included at the end of this press release.

Financial Metrics and Other Data

This press release includes several key financial metrics and other data used by the Company management in assessing the Company’s results of operations:

“Initial Studio Openings” means the number of studios that were determined to be first opened during such period. We classify an Initial Studio Opening to occur in the first month in which the studio first generates monthly revenue of at least $4,500. Initial Studio Openings are not adjusted downward for studios that were temporarily closed due to the COVID-19 pandemic or otherwise.

“New Franchises Sold” means, for any specific period, the number of franchises sold during such period using the methodology set forth below for “Total Franchises Sold.”

“Open Studios” means the number of studios that were open for business as of a certain date. A studio may be classified as an Open Studio regardless of whether or not it generated minimum monthly revenue of $4,500. During the COVID-19 pandemic, a significant portion of our network was forced to temporarily close, which reduced the number of Open Studios. As studios re-open in accordance with state and local regulations, they are reflected in the Open Studios figures.

“Same store sales” means, for any reporting period, studio-level revenue generated by a comparable base of franchise studios, which we define as open studios that have been operating for more than 16 months.

“System-wide Sales” are defined as all payments made to our studios and includes payment for classes, apparel and other sales for a given period. We track System-wide Sales as an indication of the strength of our franchisee network.

“Total franchises sold” represents, as of any specified date, (i) the total number of signed franchise agreements in place as of such date for which an establishment fee has been paid and (ii) the total number of franchises committed in a multi-studio agreement in place as of such date for which an upfront payment has been made, in each case that have not been terminated. Each new franchise is included in the number of total franchises sold from the date on which such franchise first satisfies the condition in clause (i) or (ii) above, as applicable. total franchises sold includes franchise arrangements in all stages of development after signing a franchise agreement, and includes franchises with open studios. Franchises are removed from total franchises sold upon termination of the franchise agreement.

“Total Studios” as of any specified date, means the total cumulative Initial Studio Openings as of that date less cumulative permanent studio closures as of that date. Total Studios are not adjusted downward for studios that were temporarily closed due to the COVID-19 pandemic or otherwise.

Forward-Looking Statements

F45’s financial outlook and other statements in this press release that refer to future plans and expectations are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve a number of risks and uncertainties. Words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” “or negatives of these words and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements that refer to or are based on estimates, forecasts, projections, uncertain events or assumptions, including statements relating to F45’s strategy, total addressable market and market opportunity, financial outlook, business plans, future macroeconomic conditions, future impacts of the COVID-19 pandemic, and future products and services, also identify forward-looking statements. All forward-looking statements included in this press release are based on management’s expectations as of the date of this press release and, except as required by law, F45 disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: our dependence on the operational and financial results of, and our relationships with, our franchisees and the success of their new and existing studios; our ability to protect our brand and reputation; our ability to identify, recruit and contract with a sufficient number of qualified franchisees; our ability to execute our growth strategy, including through development of new studios by new and existing franchisees; our ability to manage our growth and the associated strain on our resources; our ability to successfully integrate any acquisitions, or realize their anticipated benefits; the high level of competition in the health and fitness industry; economic, political and other risks associated with our international operations; changes to the industry in which we operate; our reliance on information systems and our and our franchisees’ ability to properly maintain the confidentiality and integrity of our data; the occurrence of cyber incidents or a deficiency in our cybersecurity protocols; our and our franchisees’ ability to attract and retain members; our and our franchisees’ ability to identify and secure suitable sites for new franchise studios; risks related to franchisees generally; our ability to obtain third-party licenses for the use of music to supplement our workouts; certain health and safety risks to members that arise while at our studios; our ability to adequately protect our intellectual property; risks associated with the use of social media platforms in our marketing; our ability to obtain and retain high-profile strategic partnership arrangements; our ability to comply with existing or future franchise laws and regulations; our ability to anticipate and satisfy consumer preferences and shifting views of health and fitness; our business model being susceptible to litigation; the increased expenses associated with being a public company; and additional factors discussed in our filings with the Securities and Exchange Commission (the “SEC”). Further, many of these factors are, and may continue to be, amplified by the COVID-19 pandemic. Detailed information regarding these and other factors that could affect F45’s business and results is included in F45’s SEC filings, including in the section titled “Risk Factors” in F45’s Final Prospectus dated July 14, 2021.

F45 Training Holdings Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts and share data)

     

 

 

June 30, 2021 (unaudited)

 

December 31, 2020 (audited)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

16,604

 

 

$

28,967

 

Restricted cash

 

1,557

 

 

 

Accounts receivable, net

 

12,683

 

 

9,582

 

Due from related parties

 

1,855

 

 

2,406

 

Inventories

 

6,380

 

 

4,485

 

Deferred costs

 

1,776

 

 

1,616

 

Prepaid expenses

 

3,795

 

 

2,891

 

Other current assets

 

8,456

 

 

2,452

 

Total current assets

 

53,106

 

 

52,399

 

Property and equipment, net

 

895

 

 

884

 

Deferred tax assets, net

 

6,940

 

 

7,096

 

Intangible assets, net

 

21,852

 

 

1,758

 

Deferred costs, net of current

 

11,834

 

 

11,215

 

Other long-term assets

 

12,331

 

 

5,165

 

Total assets

 

$

106,958

 

 

$

78,517

 

 

 

 

 

 

Liabilities, convertible preferred stock and stockholders’ deficit

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued expenses

 

$

29,105

 

 

$

18,657

 

Deferred revenue

 

10,457

 

 

3,783

 

Interest payable

 

143

 

 

250

 

Current portion of long-term debt

 

6,977

 

 

5,847

 

Income taxes payable

 

4,315

 

 

3,499

 

Total current liabilities

 

50,997

 

 

32,036

 

Deferred revenue, net of current

 

4,720

 

 

10,312

 

Long-term derivative liability

 

85,243

 

 

36,640

 

Long-term debt, net of current

 

248,354

 

 

236,186

 

Other long-term liabilities

 

26,464

 

 

4,890

 

Total liabilities

 

415,778

 

 

320,064

 

Commitments and contingencies

 

 

 

 

Convertible preferred stock, $0.0001 par value; 9,854,432 shares issued and outstanding as of June 30, 2021 and December 31, 2020

 

98,544

 

 

98,544

 

Stockholders’ deficit

 

 

 

 

Common stock, $0.00005 par value; 29,281,514 shares issued and outstanding as of June 30, 2021 and December 31, 2020

 

1

 

 

1

 

Additional paid-in capital

 

11,456

 

 

11,456

 

Accumulated other comprehensive loss

 

(886

)

 

(982

)

Accumulated deficit

 

(243,215

)

 

(175,846

)

Less: Treasury stock

 

(174,720

)

 

(174,720

)

Total stockholders’ deficit

 

(407,364

)

 

(340,091

)

Total liabilities, convertible preferred stock and stockholders’ deficit

 

$

106,958

 

 

$

78,517

 

F45 Training Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except share amounts and share data)

(unaudited)

     

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2021

 

2020

 

2021

 

2020

Revenues:

 

 

 

 

 

 

 

 

Franchise (Related party: $50 and $137 for the three months ended June 30, 2021 and 2020, respectively, and $100 and $234 for the six months ended June 30, 2021 and 2020, respectively)

 

$

20,581

 

 

$

12,061

 

 

$

33,737

 

 

$

25,699

 

Equipment and merchandise (Related party: $0 and $112 for the three months ended June 30, 2021 and 2020, respectively, and $0 and $112 for the six months ended June 30, 2021 and 2020, respectively)

 

6,251

 

 

5,397

 

 

11,286

 

 

16,601

 

Total revenues

 

26,832

 

 

17,458

 

 

45,023

 

 

42,300

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

Cost of franchise revenue (Related party $0 and $0 for the three months ended June 30, 2021 and 2020, respectively, and $0 and $12 for the six months ended June 30, 2021 and 2020, respectively)

 

1,462

 

 

1,410

 

 

2,676

 

 

4,594

 

Cost of equipment and merchandise (Related party:$1,203 and $265 for the three months ended June 30, 2021 and 2020, respectively, and $2,144 and $1,316 for the six months ended June 30, 2021 and 2020, respectively)

 

3,739

 

 

2,832

 

 

6,920

 

 

9,163

 

Selling, general and administrative expenses

 

18,562

 

 

7,633

 

 

35,390

 

 

21,624

 

Total costs and operating expenses

 

23,763

 

 

11,875

 

 

44,986

 

 

35,381

 

Income (losses) from operations

 

3,069

 

 

5,583

 

 

37

 

 

6,919

 

Loss on derivative liabilities

 

23,098

 

 

 

 

48,603

 

 

 

Interest expense, net

 

8,853

 

 

421

 

 

17,268

 

 

799

 

Other income, net

 

329

 

 

(2,258

)

 

620

 

 

(577

)

(Loss) income before income taxes

 

(29,211

)

 

7,420

 

 

(66,454

)

 

6,697

 

Provision for income taxes

 

1,313

 

 

1,552

 

 

915

 

 

1,562

 

Net (loss) income

 

$

(30,524

)

 

$

5,868

 

 

$

(67,369

)

 

$

5,135

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

Unrealized gain (loss) on interest rate swap, net of tax

 

132

 

 

123

 

 

203

 

 

(727

)

Foreign currency translation adjustment, net of tax

 

(74

)

 

(1,845

)

 

(106

)

 

(564

)

Comprehensive (loss) income

 

$

(30,466

)

 

$

4,146

 

 

$

(67,272

)

 

$

3,844

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

Net (loss) income per share

 

 

 

 

 

 

 

 

Basic and diluted

 

(1.04

)

 

0.08

 

 

(2.30

)

 

0.07

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic and diluted

 

29,281,514

 

 

58,000,000

 

 

29,281,514

 

 

58,000,000

 

F45 Training Holdings Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

   

 

 

Six Months Ended June 30,

 

 

2021 (unaudited)

 

2020 (audited)

Cash flows from operating activities

 

 

 

 

Net (loss) income

 

$

(67,369

)

 

$

5,135

 

Adjustments to reconcile net (loss) income to net cash used in operating activities:

 

 

 

 

Depreciation

 

 

130

 

 

 

216

 

Amortization of intangible assets

 

 

1,247

 

 

 

261

 

Amortization of deferred costs

 

 

725

 

 

 

685

 

Provision for inventories

 

 

149

 

 

 

 

Accretion of debt discount

 

 

2,983

 

 

 

 

Loss on derivative liabilities

 

 

48,603

 

 

 

 

Paid in kind interest accrual

 

 

12,851

 

 

 

 

Bad debt expense

 

 

3,514

 

 

 

1,917

 

Gain and loss on disposal of property and equipment

 

 

6

 

 

 

 

Deferred income taxes

 

 

 

 

 

13

 

Unrealized foreign currency transaction gains (losses)

 

 

185

 

 

 

(556

)

Changes in operating assets and liabilities:

 

 

 

 

Due from related parties

 

 

549

 

 

 

163

 

Accounts receivable, net

 

 

(6,715

)

 

 

(2,576

)

Inventories

 

 

(2,125

)

 

 

(3,001

)

Prepaid expenses

 

 

(934

)

 

 

172

 

Other current assets

 

 

(3,722

)

 

 

(1,989

)

Deferred costs

 

 

(1,280

)

 

 

(2,590

)

Other long-term assets

 

 

(7,233

)

 

 

(2,499

)

Accounts payable

 

 

5,351

 

 

 

(1,410

)

Deferred revenue

 

 

3,912

 

 

 

(6,354

)

Interest payable

 

 

(107

)

 

 

171

 

Income tax payable

 

 

702

 

 

 

1,633

 

Other long-term liabilities

 

 

1,000

 

 

 

68

 

Net cash used in operating activities

 

 

(7,579

)

 

 

(10,541

)

Cash flows from investing activities

 

 

 

 

Purchases of property and equipment

 

 

(345

)

 

 

(302

)

Disposal of property and equipment

 

 

19

 

 

 

2

 

Purchases of intangible assets

 

 

(576

)

 

 

(577

)

Net cash used in investing activities

 

 

(902

)

 

 

(877

)

Cash flows from financing activities

 

 

 

 

Borrowings under revolving facility

 

 

 

 

 

8,145

 

Repayments under term facility

 

 

 

 

 

(1,500

)

Repayment of 1st Lien Loan

 

 

(2,625

)

 

 

 

Proceeds from Paycheck Protection Program loan

 

 

 

 

 

2,065

 

Deferred offering costs

 

 

 

 

 

(440

)

Net cash (used in) provided by financing activities

 

 

(2,625

)

 

 

8,270

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

300

 

 

 

(291

)

Net decrease in cash, cash equivalents, and restricted cash

 

 

(10,806

)

 

 

(3,439

)

Cash, cash equivalents, and restricted cash at beginning of period

 

 

28,967

 

 

 

8,267

 

Cash, cash equivalents, and restricted cash at end of period

 

$

18,161

 

 

$

4,828

 

Supplemental disclosures of cash flow information

 

 

 

 

Income taxes paid

 

$

 

 

$

632

 

Interest paid

 

 

1,109

 

 

 

600

 

Supplemental disclosure of noncash financing and investing activities:

 

 

 

 

Liability assumed on intellectual property license agreement with FW SPV II LLC

 

 

20,790

 

 

 

 

Intangible assets included in accounts payable and accrued expenses

 

 

 

 

 

46

 

Deferred offering costs included in accounts payable and accrued expenses

 

 

2,248

 

 

 

1,531

 

REGIONAL SEGMENT INFORMATION

(in thousands)

(unaudited)

   

 

 

For the Three Months Ended

June 30, 2021

 

For the Three Months Ended

June 30, 2020

 

 

Revenue

 

Cost of revenue

 

Gross profit

 

Revenue

 

Cost of revenue

 

Gross profit

United States:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

11,741

 

 

$

1,308

 

 

$

10,433

 

 

$

7,461

 

 

$

1,158

 

 

$

6,303

 

Equipment and merchandise

 

4,523

 

 

2,437

 

 

2,086

 

 

1,383

 

 

678

 

 

705

 

 

 

$

16,264

 

 

$

3,745

 

 

$

12,519

 

 

$

8,844

 

 

$

1,836

 

 

$

7,008

 

Australia:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

4,420

 

 

$

94

 

 

$

4,326

 

 

$

2,089

 

 

$

173

 

 

$

1,916

 

Equipment and merchandise

 

689

 

 

514

 

 

175

 

 

960

 

 

902

 

 

58

 

 

 

$

5,109

 

 

$

608

 

 

$

4,501

 

 

$

3,049

 

 

$

1,075

 

 

$

1,974

 

Rest of World:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

4,420

 

 

$

60

 

 

$

4,360

 

 

$

2,511

 

 

$

80

 

 

$

2,431

 

Equipment and merchandise

 

1,039

 

 

788

 

 

251

 

 

3,054

 

 

1,252

 

 

1,802

 

 

 

$

5,459

 

 

$

848

 

 

$

4,611

 

 

$

5,565

 

 

$

1,332

 

 

$

4,233

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

20,581

 

 

$

1,462

 

 

$

19,119

 

 

$

12,061

 

 

$

1,411

 

 

$

10,650

 

Equipment and merchandise

 

6,251

 

 

3,739

 

 

2,512

 

 

5,397

 

 

2,832

 

 

2,565

 

 

 

$

26,832

 

 

$

5,201

 

 

$

21,631

 

 

$

17,458

 

 

$

4,243

 

 

$

13,215

 

 

 

For the Six Months Ended

June 30, 2021

 

For the Six Months Ended

June 30, 2020

 

 

Revenue

 

Cost of revenue

 

Gross profit

 

Revenue

 

Cost of revenue

 

Gross profit

United States:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

18,756

 

 

$

2,330

 

 

$

16,426

 

 

$

15,709

 

 

$

4,089

 

 

$

11,620

 

Equipment and merchandise

 

7,004

 

 

3,915

 

 

3,089

 

 

7,462

 

 

3,704

 

 

3,758

 

 

 

$

25,760

 

 

$

6,245

 

 

$

19,515

 

 

$

23,171

 

 

$

7,793

 

 

$

15,378

 

Australia:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

7,709

 

 

$

272

 

 

$

7,437

 

 

$

4,840

 

 

$

332

 

 

$

4,508

 

Equipment and merchandise

 

1,528

 

 

1,321

 

 

207

 

 

2,478

 

 

2,184

 

 

294

 

 

 

$

9,237

 

 

$

1,593

 

 

$

7,644

 

 

$

7,318

 

 

$

2,516

 

 

$

4,802

 

Rest of World:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

7,272

 

 

$

74

 

 

$

7,198

 

 

$

5,150

 

 

$

174

 

 

$

4,976

 

Equipment and merchandise

 

2,754

 

 

1,684

 

 

1,070

 

 

6,661

 

 

3,275

 

 

3,386

 

 

 

$

10,026

 

 

$

1,758

 

 

$

8,268

 

 

$

11,811

 

 

$

3,449

 

 

$

8,362

 

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

Franchise

 

$

33,737

 

 

$

2,676

 

 

$

31,061

 

 

$

25,699

 

 

$

4,595

 

 

$

21,104

 

Equipment and merchandise

 

11,286

 

 

6,920

 

 

4,366

 

 

16,601

 

 

9,163

 

 

7,438

 

 

 

$

45,023

 

 

$

9,596

 

 

$

35,427

 

 

$

42,300

 

 

$

13,758

 

 

$

28,542

 

TOTAL FRANCHISES SOLD

(unaudited)

 

 

 

Three Months Ended June 30, 2021

 

Three Months Ended June 30, 2020

 

Year Ended December 31, 2020

 

 

U.S.

 

Australia

 

ROW

 

Total

 

U.S.

 

Australia

 

ROW

 

Total

 

U.S.

 

Australia

 

ROW

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Franchises Sold, beginning of period

 

941

 

 

676

 

 

630

 

 

2,247

 

 

826

 

 

653

 

 

480

 

 

1,959

 

 

814

 

 

643

 

 

435

 

 

1,892

 

New Franchises Sold, net(a)

 

438

 

 

109

 

 

7

 

 

554

 

 

20

 

 

14

 

 

66

 

 

100

 

 

117

 

 

36

 

 

199

 

 

352

 

Total Franchises Sold, end of period

 

1,379

 

 

785

 

 

637

 

 

2,801

 

 

846

 

 

667

 

 

546

 

 

2,059

 

 

931

 

 

679

 

 

634

 

 

2,244

 

TOTAL NUMBER OF STUDIOS

(unaudited)

 

 

 

Three Months Ended June 30, 2021

 

Three Months Ended June 30, 2020

 

Year Ended December 31, 2020

 

 

U.S.

 

Australia

 

ROW

 

Total

 

U.S.

 

Australia

 

ROW

 

Total

 

U.S.

 

Australia

 

ROW

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Studios, beginning of period

 

518

 

 

617

 

 

352

 

 

1,487

 

 

376

 

 

593

 

 

273

 

 

1,242

 

 

320

 

 

581

 

 

239

 

 

1,140

 

Initial Studio Openings, net

 

38

 

 

11

 

 

19

 

 

68

 

 

20

 

 

2

 

 

11

 

 

33

 

 

166

 

 

35

 

 

96

 

 

297

 

Total Studios, end of period

 

556

 

 

628

 

 

371

 

 

1,555

 

 

396

 

 

595

 

 

284

 

 

1,275

 

 

486

 

 

616

 

 

335

 

 

1,437

 

GAAP to Non-GAAP Reconciliation

(in thousands, except share amounts and share data)

(unaudited)

   

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

(dollars in thousands, except per share amounts)

Net (loss) income

 

(30,524

)

 

5,868

 

 

(67,369

)

 

5,135

 

Net interest expense

 

8,853

 

 

421

 

 

17,268

 

 

799

 

Provision for income taxes

 

1,313

 

 

1,552

 

 

915

 

 

1,562

 

Depreciation and amortization

 

1,173

 

 

249

 

 

1,377

 

 

477

 

Amortization of deferred costs

 

277

 

 

359

 

 

725

 

 

685

 

EBITDA

 

(18,908

)

 

8,449

 

 

(47,084

)

 

8,658

 

Sales tax reserve

 

147

 

 

12

 

 

247

 

 

515

 

Transaction fees

 

1,749

 

 

1,214

 

 

3,331

 

 

2,656

 

Loss (gain) on derivative liability

 

23,098

 

 

 

 

48,603

 

 

 

Certain legal costs and settlements

 

886

 

 

351

 

 

3,423

 

 

781

 

Forgiveness of loans to directors

 

 

 

 

 

 

 

 

Recruitment

 

53

 

 

 

 

53

 

 

 

Inventory write-off

 

 

 

 

 

 

 

 

COVID concessions

 

1,851

 

 

 

 

4,333

 

 

 

Relocation

 

183

 

 

 

 

252

 

 

30

 

Development costs

 

1,617

 

 

 

 

2,788

 

 

 

Adjusted EBITDA

 

10,677

 

 

10,026

 

 

15,947

 

 

12,640