- Net revenue of $562.4 million, an increase of 6.6% from Q1
2022
- Comparable store sales growth of 3.0% and Adjusted Comparable
Store Sales Growth of 0.8% from Q1 2022
- Net income of $18.3 million and Diluted EPS of $0.22 compared
to $30.1 million and $0.34, respectively in Q1 2022
- Adjusted Operating Income of $39.9 million compared to $45.3
million in Q1 2022
- Adjusted Diluted EPS of $0.31 compared to $0.33 in Q1 2022
- Reaffirms fiscal 2023 outlook
National Vision Holdings, Inc. (NASDAQ: EYE) (“National Vision”
or the “Company”) today reported its financial results for the
first quarter ended April 1, 2023.
Reade Fahs, chief executive officer, stated, “Amidst an
uncertain macro environment, we delivered positive comparable sales
growth for the first quarter driven primarily by strength in our
managed care business. Although we continue to experience exam
capacity constraints and softness from our core uninsured customer,
we are encouraged by the early results we are seeing with
Optometrist recruiting and retention initiatives. We remain focused
on executing against our strategic initiatives to evolve our
operating model to thrive amidst the new realities facing our
business and the industry and are reaffirming our guidance for
fiscal 2023.”
Adjusted Comparable Store Sales Growth, Adjusted Operating
Income, Adjusted EBITDA, Adjusted Diluted EPS, Adjusted Operating
Margin, Adjusted EBITDA Margin, and EBITDA are not measures
recognized under generally accepted accounting principles (“GAAP”).
Please see “Non-GAAP Financial Measures” and “Reconciliation of
Non-GAAP to GAAP Financial Measures” below for more
information.
First Quarter 2023 Summary
- Net revenue increased 6.6% to $562.4 million compared to the
first quarter of 2022. Net revenue was positively impacted by 2.0%
due to the timing of unearned revenue on net revenue.
- Comparable store sales growth was 3.0% and Adjusted Comparable
Store Sales Growth was 0.8%.
- The Company opened eight new stores, closed five stores, and
ended the quarter with 1,357 stores. Overall, store count grew 5.0%
from April 2, 2022 to April 1, 2023.
- Costs applicable to revenue increased 7.6% to $254.1 million
compared to the first quarter of 2022. As a percentage of net
revenue, costs applicable to revenue increased 50 basis points to
45.2% compared to the first quarter of 2022. This increase as a
percentage of net revenue was primarily driven by the deleverage of
optometrist-related costs, partially offset by higher eyeglass
margin and increased eyeglass mix.
- SG&A increased 9.3% to $249.9 million compared to the first
quarter of 2022. As a percentage of net revenue, SG&A increased
110 basis points to 44.4% compared to the first quarter of 2022.
This increase as a percentage of net revenue was primarily driven
by higher performance-based incentive compensation and higher
payroll, partially offset by advertising leverage.
- Net income decreased 39.4% to $18.3 million compared to the
first quarter of 2022. Net income margin decreased 250 basis points
to 3.2% compared to the first quarter of 2022.
- Diluted EPS decreased 34.6% to $0.22 compared to the first
quarter of 2022. Adjusted Diluted EPS decreased 5.4% to $0.31
compared to the first quarter of 2022. The net change in margin on
unearned revenue benefited Diluted EPS by $0.06 and Adjusted
Diluted EPS by $0.06.
- Adjusted Operating Income decreased 12.0% to $39.9 million
compared to the first quarter of 2022. Adjusted Operating Margin
decreased 150 basis points to 7.1% compared to the first quarter of
2022. The net change in margin on unearned revenue benefited net
income by $6.1 million and Adjusted Operating Income by $8.2
million.
Balance Sheet and Cash Flow Highlights as of April 1,
2023
- The Company’s cash balance was $246.9 million as of April 1,
2023. The Company had no borrowings under its $300.0 million first
lien revolving credit facility, exclusive of letters of credit of
$6.4 million.
- Total debt was $566.9 million as of April 1, 2023, consisting
of outstanding first lien term loans, convertible senior notes
(“2025 Notes”) and finance lease obligations, net of unamortized
discounts.
- Cash flows from operating activities for the first quarter of
2023 were $74.1 million compared to $47.1 million for the first
quarter of 2022.
- Capital expenditures for the first quarter of 2023 totaled
$27.7 million compared to $28.1 million for the first quarter of
2022.
Share Repurchase Program
- In the first quarter, the Company repurchased an additional 1.1
million shares of its common stock for $25.0 million. The Company
has $25.0 million remaining under the current share repurchase
authorization.
Fiscal 2023 Outlook
The Company’s fiscal 2023 outlook reflects current expected or
estimated impacts related to macro-economic factors, including
inflation, geopolitical instability and risks of recession, as well
as constraints on exam capacity; however, the ultimate impact of
these factors on the Company’s financial outlook remains uncertain
with dynamic market conditions and the outlook shown below assumes
no material deterioration to the Company’s current business
operations as a result of such factors.
The Company reaffirms the previously provided outlook for its
key operating metrics, while updating its expectations for tax rate
from 26% to 26% - 28%. The Company is providing the following
outlook for the 52 weeks ending December 30, 2023:
Fiscal 2023 Outlook
New Stores
65 - 70
Adjusted Comparable Store Sales Growth
0% - 3%
Net Revenue
$2.075 - $2.135 billion
Adjusted Operating Income
$48 - $66 million
Adjusted Diluted EPS1
$0.42 - $0.60
Depreciation and Amortization2
$104 - $106 million
Interest3
~$3 million
Tax Rate4
26% - 28%
Capital Expenditures
$115 - $120 million
1 - Assumes 80.2 million shares, and does
not include 12.9 million shares attributable to the 2025 Notes as
they are anticipated to be anti-dilutive to earnings per share for
fiscal year 2023 2 - Includes amortization of acquisition
intangibles of approximately $7.5 million, which is excluded in the
definition of Adjusted Operating Income 3 - Before the impact of
gains or losses on change in fair value of derivatives and charges
related to amortization of debt discounts and deferred financing
costs 4 - Excluding the impact of vesting of restricted stock units
and stock option exercises
The fiscal 2023 outlook information provided above includes
Adjusted Operating Income and Adjusted Diluted EPS guidance, which
are non-GAAP financial measures management uses in measuring
performance. The Company is not able to reconcile these
forward-looking non-GAAP measures to GAAP without unreasonable
efforts because it is not possible to predict with a reasonable
degree of certainty the actual impact of certain items and
unanticipated events, including taxes and non-recurring items,
which would be included in GAAP results. The impact of such items
and unanticipated events could be potentially significant.
The fiscal 2023 outlook is forward-looking, subject to
significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond the
control of the Company and its management, and based upon
assumptions with respect to future decisions, which are subject to
change. Actual results may vary and those variations may be
material. As such, the Company’s results may not fall within the
ranges contained in its fiscal 2023 outlook. The Company uses these
forward-looking measures internally to assess and benchmark its
results and strategic plans. See “Forward-Looking Statements”
below.
Conference Call Details
A conference call to discuss the first quarter 2023 financial
results is scheduled for today, May 11, 2023, at 8:30 a.m. Eastern
Time. To pre-register for the conference call and obtain a dial-in
number and passcode please refer to the “Investors” section of the
Company’s website at www.nationalvision.com/investors. A live audio
webcast of the conference call will be available on the “Investors”
section of the Company’s website at
www.nationalvision.com/investors, where presentation materials will
be posted prior to the conference call. A replay of the audio
webcast will also be archived on the “Investors” section of the
Company’s website.
About National Vision Holdings, Inc.
National Vision Holdings, Inc. is the second largest optical
retail company in the United States (by sales) with more than 1,300
retail stores in 44 states and Puerto Rico. With a mission of
helping people by making quality eye care and eyewear more
affordable and accessible, the Company operates five retail brands:
America’s Best Contacts & Eyeglasses, Eyeglass World, Vision
Centers inside select Walmart stores, and Vista Opticals inside
select Fred Meyer stores and on select military bases, and several
e-commerce websites, offering a variety of products and services
for customers’ eye care needs.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934. These statements include, but are not limited
to, statements contained under “Fiscal 2023 Outlook” as well as
other statements related to our current beliefs and expectations
regarding the performance of our industry, the Company’s strategic
direction, market position, prospects including remote medicine and
optometrist recruiting and retention initiatives, and future
results. You can identify these forward-looking statements by the
use of words such as “outlook,” “guidance,” “believes,” “expects,”
“potential,” “continues,” “may,” “will,” “should,” “could,”
“seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,”
“anticipates” or the negative version of these words or other
comparable words. Caution should be taken not to place undue
reliance on any forward-looking statement as such statements speak
only as of the date when made. We undertake no obligation to
publicly update or review any forward-looking statement, whether as
a result of new information, future developments or otherwise,
except as required by law. Forward-looking statements are not
guarantees and are subject to various risks and uncertainties,
which may cause actual results to differ materially from those
implied in forward-looking statements. Such factors include, but
are not limited to, the COVID-19 pandemic and future resurgences,
and related impacts including federal, state, and local
governmental actions in response thereto; customer behavior in
response to the pandemic, including the impact of such behavior on
in-store traffic and sales; market volatility and an overall
decline in the health of the economy and other factors impacting
consumer spending, including inflation and uncertainty in financial
markets (including as a result of recent bank failures and events
affecting financial institutions); our ability to recruit and
retain vision care professionals for our stores and remote medicine
offerings in general and in light of the pandemic; our ability to
compete successfully; our ability to successfully open new stores
and enter new markets; our ability to expand our remote medicine
offerings and electronic health records capabilities; our ability
to maintain the performance of our Host and Legacy brands and our
current operating relationships with our Host and Legacy partners;
our ability to maintain sufficient levels of cash flow from our
operations to execute or sustain our growth strategy or obtain
additional financing at satisfactory terms or at all; the impact of
wage rate increases, inflation, cost increases and increases in raw
material prices and energy prices; our growth strategy straining
our existing resources and causing the performance of our existing
stores to suffer; our ability to successfully and efficiently
implement our marketing, advertising and promotional efforts; risks
associated with leasing substantial amounts of space, including
future increases in occupancy costs; the impact of certain
technological advances, and the greater availability of, or
increased consumer preferences for, vision correction alternatives
to prescription eyeglasses or contact lenses, and future drug
development for the correction of vision-related problems; our
ability to retain our existing senior management team and attract
qualified new personnel; our ability to manage our inventory;
seasonal fluctuations in our operating results and inventory
levels; risks associated with our e-commerce and omni-channel
business; the loss of, or disruption in the operations of, one or
more of our distribution centers and/or optical laboratories,
resulting in the inability to fulfill customer orders and deliver
our products in a timely manner; risk of losses arising from our
investments in technological innovators in the optical retail
industry; risks associated with environmental, social and
governance issues, including climate change; risks associated with
vendors from whom our products are sourced, including our
dependence on a limited number of suppliers; our ability to
develop, maintain and extend relationships with managed vision care
companies, vision insurance providers and other third-party payors;
our ability to effectively operate our information technology
systems and prevent interruption or security breach; our reliance
on third-party coverage and reimbursement, including government
programs, for an increasing portion of our revenues; our ability to
adhere to extensive state, local and federal vision care and
healthcare laws and regulations; our compliance with managed vision
care laws and regulations; our ability to adhere to changing state,
local and federal privacy, data security and data protection laws
and regulations; product liability, product recall or personal
injury issues; our failure to comply with, or changes in, laws,
regulations, enforcement activities and other requirements; the
impact of any adverse litigation judgments or settlements resulting
from legal proceedings relating to our business operations; our
ability to adequately protect our intellectual property; our
significant amount of indebtedness and our ability to generate
sufficient cash flow to satisfy our debt obligations; a change in
interest rates as well as changes in benchmark rates and
uncertainty related to the foregoing; restrictions in our credit
agreement that limits our flexibility in operating our business;
potential dilution to existing stockholders upon the conversion of
our convertible notes; and risks related to owning our common stock
(including the timing, manner and volume of repurchases of common
stock pursuant to our share repurchase program), including our
ability to comply with requirements to design and implement and
maintain effective internal controls. Additional information about
these and other factors that could cause National Vision’s results
to differ materially from those described in the forward-looking
statements can be found in filings by National Vision with the
Securities and Exchange Commission (“SEC”), including our latest
Annual Report on Form 10-K and subsequent Quarterly Reports on Form
10-Q, which are accessible on the SEC’s website at www.sec.gov.
These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are
included in this release and in our filings with the SEC.
Non-GAAP Financial Measures
To supplement the Company’s financial information presented in
accordance with GAAP and aid understanding of the Company’s
business performance, the Company uses certain non-GAAP financial
measures, namely “EBITDA,” “Adjusted Operating Income,” “Adjusted
Operating Margin,” “Adjusted EBITDA,” “Adjusted EBITDA Margin,”
“Adjusted Diluted EPS,” “Adjusted Comparable Stores Sales Growth,”
“Adjusted SG&A,” and “Adjusted SG&A Percent of Net
Revenue.” We believe EBITDA, Adjusted Operating Income, Adjusted
Operating Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
Diluted EPS, Adjusted SG&A and Adjusted SG&A Percent of Net
Revenue assist investors and analysts in comparing our operating
performance across reporting periods on a consistent basis by
excluding items that we do not believe are indicative of our core
operating performance. Management believes these non-GAAP financial
measures are useful to investors in highlighting trends in our
operating performance, while other measures can differ
significantly depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which we operate and
capital investments. Management uses these non-GAAP financial
measures to supplement GAAP measures of performance in the
evaluation of the effectiveness of our business strategies, to make
budgeting decisions, to establish discretionary annual incentive
compensation and to compare our performance against that of other
peer companies using similar measures. Management supplements GAAP
results with non-GAAP financial measures to provide a more complete
understanding of the factors and trends affecting the business than
GAAP results alone.
To supplement the Company’s comparable store sales growth
presented in accordance with GAAP, the Company provides “Adjusted
Comparable Store Sales Growth,” which is a non-GAAP financial
measure we believe is useful because it provides timely and
accurate information relating to the two core metrics of retail
sales: number of transactions and value of transactions. Management
uses Adjusted Comparable Store Sales Growth as the basis for key
operating decisions, such as allocation of advertising to
particular markets and implementation of special marketing
programs. Accordingly, we believe that Adjusted Comparable Store
Sales Growth provides timely and accurate information relating to
the operational health and overall performance of each brand. We
also believe that, for the same reasons, investors find our
calculation of Adjusted Comparable Store Sales Growth to be
meaningful.
EBITDA: We define EBITDA as net income, plus interest
expense (income), net, income tax provision (benefit), and
depreciation and amortization.
Adjusted Operating Income: We define Adjusted Operating
Income as net income, plus interest expense (income), net and
income tax provision (benefit), further adjusted to exclude stock
based compensation expense, loss on extinguishment of debt, asset
impairment, litigation settlement, secondary offering expenses,
management realignment expenses, long-term incentive plan expenses,
amortization of acquisition intangibles, and certain other
expenses.
Adjusted Operating Margin: We define Adjusted Operating
Margin as Adjusted Operating Income as a percentage of net
revenue.
Adjusted EBITDA: We define Adjusted EBITDA as net income,
plus interest expense (income), net, income tax provision (benefit)
and depreciation and amortization, further adjusted to exclude
stock based compensation expense, loss on extinguishment of debt,
asset impairment, litigation settlement, secondary offering
expenses, management realignment expenses, long-term incentive plan
expenses, and certain other expenses.
Adjusted EBITDA Margin: We define Adjusted EBITDA Margin
as Adjusted EBITDA as a percentage of net revenue.
Adjusted Diluted EPS: We define Adjusted Diluted EPS as
diluted earnings per share, adjusted for the per share impact of
stock based compensation expense, loss on extinguishment of debt,
asset impairment, litigation settlement, secondary offering
expenses, management realignment expenses, long-term incentive plan
expenses, amortization of acquisition intangibles, amortization of
debt discounts and deferred financing costs of the term loan
borrowings, amortization of the conversion feature and deferred
financing costs related to the 2025 Notes when not required under
U.S. GAAP to be added back for diluted earnings per share, losses
(gains) on change in fair value of derivatives, certain other
expenses, and tax expense (benefit) from stock-based compensation,
less the tax effect of these adjustments.
Adjusted SG&A: We define Adjusted SG&A as
SG&A, adjusted to exclude stock based compensation expense,
litigation settlement, secondary offering expenses, management
realignment expenses, long-term incentive plan expense, and certain
other expenses.
Adjusted SG&A Percent of Net Revenue: We define
Adjusted SG&A Percent of Net Revenue as Adjusted SG&A as a
percentage of net revenue.
Adjusted Comparable Store Sales Growth: We measure
Adjusted Comparable Store Sales Growth as the increase or decrease
in sales recorded by the comparable store base in any reporting
period, compared to sales recorded by the comparable store base in
the prior reporting period, which we calculate as follows: (i)
sales are recorded on a cash basis (i.e. when the order is placed
and paid for or submitted to a managed care payor, compared to when
the order is delivered), utilizing cash basis point of sale
information from stores; (ii) stores are added to the calculation
during the 13th full fiscal month following the store’s opening;
(iii) closed stores are removed from the calculation for time
periods that are not comparable; (iv) sales from partial months of
operation are excluded when stores do not open or close on the
first day of the month; and (v) when applicable, we adjust for the
effect of the 53rd week. Quarterly, year-to-date and annual
adjusted comparable store sales are aggregated using only sales
from all whole months of operation included in both the current
reporting period and the prior reporting period. When a partial
month is excluded from the calculation, the corresponding month in
the subsequent period is also excluded from the calculation. There
may be variations in the way in which some of our competitors and
other retailers calculate comparable store sales. As a result, our
adjusted comparable store sales may not be comparable to similar
data made available by other retailers.
EBITDA, Adjusted Operating Income, Adjusted Operating Margin,
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS,
Adjusted SG&A, Adjusted SG&A Percent of Net Revenue and
Adjusted Comparable Store Sales Growth are not recognized terms
under U.S. GAAP and should not be considered as an alternative to
net income or the ratio of net income to net revenue as a measure
of financial performance, SG&A, the ratio of SG&A to net
revenue as a measure of financial performance, cash flows provided
by operating activities as a measure of liquidity, comparable store
sales growth as a measure of operating performance, or any other
performance measure derived in accordance with U.S. GAAP.
Additionally, these measures are not intended to be a measure of
free cash flow available for management’s discretionary use as they
do not consider certain cash requirements such as interest
payments, tax payments and debt service requirements. The
presentations of these measures have limitations as analytical
tools and should not be considered in isolation, or as a substitute
for analysis of our results as reported under U.S. GAAP. Because
not all companies use identical calculations, the presentations of
these measures may not be comparable to other similarly titled
measures of other companies and can differ significantly from
company to company.
Please see “Reconciliation of Non-GAAP to GAAP Financial
Measures” below for reconciliations of non-GAAP financial measures
used in this release to their most directly comparable GAAP
financial measures.
National Vision Holdings, Inc.
and Subsidiaries Condensed Consolidated Balance Sheets
In Thousands, Except Par Value (Unaudited)
As of April 1, 2023
As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
246,906
$
229,425
Accounts receivable, net
80,045
79,892
Inventories
123,524
123,158
Prepaid expenses and other current
assets
36,004
41,361
Total current assets
486,479
473,836
Noncurrent assets:
Property and equipment, net
361,868
359,775
Goodwill
777,613
777,613
Trademarks and trade names
240,547
240,547
Other intangible assets, net
32,784
34,669
Right of use assets
389,697
382,825
Other assets
23,378
21,981
Total noncurrent assets
1,825,887
1,817,410
Total assets
$
2,312,366
$
2,291,246
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
74,624
$
65,276
Other payables and accrued expenses
103,188
94,225
Unearned revenue
44,328
41,239
Deferred revenue
64,359
62,201
Current maturities of long-term debt and
finance lease obligations
3,240
4,137
Current operating lease obligations
72,024
77,186
Total current liabilities
361,763
344,264
Noncurrent liabilities:
Long-term debt and finance lease
obligations, less current portion and debt discount
563,702
563,388
Noncurrent operating lease obligations
371,687
358,110
Deferred revenue
21,852
21,601
Other liabilities
9,078
8,900
Deferred income taxes, net
87,558
93,870
Total non-current liabilities
1,053,877
1,045,869
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 200,000
shares authorized; 84,555 and 84,273 shares issued as of April 1,
2023 and December 31, 2022, respectively; 78,085 and 78,992 shares
outstanding as of April 1, 2023 and December 31, 2022,
respectively
845
842
Additional paid-in capital
771,873
767,112
Accumulated other comprehensive loss
(991
)
(1,179
)
Retained earnings
338,787
320,517
Treasury stock, at cost; 6,470 and 5,281
shares as of April 1, 2023 and December 31, 2022, respectively
(213,788
)
(186,179
)
Total stockholders’ equity
896,726
901,113
Total liabilities and stockholders’
equity
$
2,312,366
$
2,291,246
National Vision Holdings, Inc.
and Subsidiaries Condensed Consolidated Statements of
Operations and Comprehensive Income In Thousands, Except
Earnings Per Share (Unaudited)
Three Months Ended
April 1, 2023
April 2, 2022
Revenue:
Net product sales
$
464,761
$
433,253
Net sales of services and plans
97,608
94,458
Total net revenue
562,369
527,711
Costs applicable to revenue (exclusive
of depreciation and amortization):
Products
173,102
164,219
Services and plans
80,950
71,818
Total costs applicable to revenue
254,052
236,037
Operating expenses:
Selling, general and administrative
expenses
249,922
228,554
Depreciation and amortization
24,813
25,151
Asset impairment
387
406
Other expense (income), net
(117
)
231
Total operating expenses
275,005
254,342
Income from operations
33,312
37,332
Interest expense (income), net
4,867
(4,144
)
Earnings before income taxes
28,445
41,476
Income tax provision
10,175
11,329
Net income
$
18,270
$
30,147
Earnings per share:
Basic
$
0.23
$
0.37
Diluted
$
0.22
$
0.34
Weighted average shares
outstanding:
Basic
78,721
81,428
Diluted
92,136
94,904
Comprehensive income:
Net income
$
18,270
$
30,147
Unrealized gain on hedge instruments
253
252
Tax provision of unrealized gain on hedge
instruments
65
64
Comprehensive income
$
18,458
$
30,335
Note: Diluted EPS for the first quarter of 2023 and 2022 is
calculated using the if-converted method for the 2025 Notes. We
added back $2.4 million and $2.3 million of interest expense (after
tax) related to the 2025 Notes for the first quarter of 2023 and
2022, respectively, and assumed conversion of the 2025 Notes at the
beginning of each respective period.
National Vision Holdings, Inc.
and Subsidiaries Condensed Consolidated Statements of Cash
Flows In Thousands (Unaudited)
Three Months Ended
April 1, 2023
April 2, 2022
Cash flows from operating
activities:
Net income
$
18,270
$
30,147
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
24,813
25,151
Amortization of debt discount and deferred
financing costs
792
770
Asset impairment
387
406
Deferred income tax expense (benefit)
(6,377
)
8,410
Stock based compensation expense
4,315
3,734
Losses (gains) on change in fair value of
derivatives
776
(9,727
)
Inventory adjustments
944
838
Other
799
1,227
Changes in operating assets and
liabilities:
Accounts receivable
(416
)
(6,620
)
Inventories
(1,310
)
(4,570
)
Operating lease right of use assets and
lease liabilities
1,103
365
Other assets
3,585
1,875
Accounts payable
9,348
5,083
Deferred and unearned revenue
5,498
13,814
Other liabilities
11,537
(23,786
)
Net cash provided by operating
activities
74,064
47,117
Cash flows from investing
activities:
Purchase of property and equipment
(27,721
)
(28,097
)
Other
106
20
Net cash used for investing activities
(27,615
)
(28,077
)
Cash flows from financing
activities:
Repayments on long-term debt
—
(3
)
Proceeds from issuance of common stock
493
1,820
Purchase of treasury stock
(27,609
)
(10,649
)
Payments on finance lease obligations
(1,546
)
(1,109
)
Net cash used for financing activities
(28,662
)
(9,941
)
Net change in cash, cash equivalents and
restricted cash
17,787
9,099
Cash, cash equivalents and restricted
cash, beginning of year
230,624
306,876
Cash, cash equivalents and restricted
cash, end of period
$
248,411
$
315,975
Supplemental cash flow disclosure
information:
Cash paid for interest
$
459
$
2,322
Cash paid (received) for taxes
$
106
$
(127
)
Capital expenditures accrued at the end of
the period
$
7,634
$
10,129
National Vision Holdings, Inc.
and Subsidiaries Reconciliation of Non-GAAP to GAAP
Financial Measures In Thousands, Except Earnings Per Share
(Unaudited)
Reconciliation of Adjusted Operating
Income to Net Income
Three Months Ended
In thousands
April 1, 2023
April 2, 2022
Net income
$
18,270
$
30,147
Interest expense (income), net
4,867
(4,144
)
Income tax provision
10,175
11,329
Stock based compensation expense (a)
4,315
3,734
Asset impairment (b)
387
406
Amortization of acquisition intangibles
(c)
1,872
1,872
Other (f)
(13
)
1,960
Adjusted Operating Income
$
39,873
$
45,304
Net income margin
3.2
%
5.7
%
Adjusted Operating Margin
7.1
%
8.6
%
Note: Percentages reflect line item as a
percentage of net revenue, adjusted for rounding.
Reconciliation of EBITDA and Adjusted
EBITDA to Net Income
Three Months Ended
In thousands
April 1, 2023
April 2, 2022
Net income
$
18,270
$
30,147
Interest expense (income), net
4,867
(4,144
)
Income tax provision
10,175
11,329
Depreciation and amortization
24,813
25,151
EBITDA
58,125
62,483
Stock based compensation expense (a)
4,315
3,734
Asset impairment (b)
387
406
Other (f)
(13
)
1,960
Adjusted EBITDA
$
62,814
$
68,583
Net income margin
3.2
%
5.7
%
Adjusted EBITDA Margin
11.2
%
13.0
%
Note: Percentages reflect line item as a
percentage of net revenue, adjusted for rounding.
Reconciliation of Adjusted Diluted EPS
to Diluted EPS
Three Months Ended
Shares in thousands, except per share
amounts
April 1, 2023
April 2, 2022
Diluted EPS
$
0.22
$
0.34
Stock based compensation expense (a)
0.05
0.04
Asset impairment (b)
0.00
0.00
Amortization of acquisition intangibles
(c)
0.02
0.02
Amortization of debt discount and deferred
financing costs (d)
0.00
0.00
Losses (gains) on change in fair value of
derivatives (e)
0.03
(0.10
)
Other (f)
(0.00
)
0.02
Tax expense (benefit) from stock-based
compensation (g)
0.01
0.00
Tax effect of total adjustments (h)
(0.03
)
0.00
Adjusted Diluted EPS
$
0.31
$
0.33
Weighted average diluted shares
outstanding
92,136
94,904
Note: Some of the totals in the table
above do not foot due to rounding differences.
Reconciliation of Adjusted SG&A and
Adjusted SG&A Percent of Net Revenue to SG&A
Three Months Ended
In thousands
April 1, 2023
April 2, 2022
SG&A
$
249,922
$
228,554
Stock compensation expense (a)
4,315
3,734
Other (i)
(13
)
1,705
Adjusted SG&A
$
245,620
$
223,115
SG&A Percent of Net Revenue
44.4
%
43.3
%
Adjusted SG&A Percent of Net
Revenue
43.7
%
42.3
%
Note: Percentages reflect line item as a
percentage of net revenue.
(a)
Non-cash charges related to stock-based
compensation programs, which vary from period to period depending
on the timing of awards and performance vesting conditions.
(b)
Reflects write-off of primarily property,
equipment and lease-related assets on closed or underperforming
stores.
(c)
Amortization of the increase in carrying
values of finite-lived intangible assets resulting from the
application of purchase accounting to the acquisition of the
Company by affiliates of KKR & Co. Inc.
(d)
Amortization of deferred financing costs
and other non-cash charges related to our long-term debt. We adjust
for amortization of deferred financing costs related to the 2025
Notes only when adjustment for these costs is not required in the
calculation of diluted earnings per share under U.S. GAAP.
(e)
Reflects losses (gains) recognized in
interest expense (income), net on change in fair value of
de-designated hedges.
(f)
Other adjustments include amounts that
management believes are not representative of our operating
performance (amounts in brackets represent reductions in Adjusted
Operating Income, Adjusted Diluted EPS and Adjusted EBITDA), which
are primarily related to excess payroll taxes on vesting of
restricted stock units and exercises of stock options, executive
severance and relocation and other expenses and adjustments,
including losses on other investments of $0.3 million for the three
months ended April 2, 2022.
(g)
Tax expense (benefit) associated with
accounting guidance requiring excess tax expense (benefit) related
to vesting of restricted stock units and exercises of stock options
to be recorded in earnings as discrete items in the reporting
period in which they occur.
(h)
Represents the income tax effect of the
total adjustments at our combined statutory federal and state
income tax rates.
(i)
Reflects other expenses in (f) above,
except for losses on other investments of $0.3 million for the
three months ended April 2, 2022.
Reconciliation of Adjusted Comparable Store Sales Growth
to Total Comparable Store Sales Growth
Comparable store sales growth
(a)
Three Months Ended April 1,
2023
Three Months Ended April 2,
2022
2023 Outlook (b)
Owned & Host segment
America’s Best
1.7%
(7.3)%
Eyeglass World
(1.3)%
(6.3)%
Military
3.2%
(4.1)%
Fred Meyer
(9.5)%
1.4%
Legacy segment
(3.2)%
(4.3)%
Total comparable store sales growth
3.0%
(4.9)%
0% - 3%
Adjusted Comparable Store Sales Growth
(b)
0.8%
(6.8)%
0% - 3%
(a)
Total comparable store sales is calculated
based on consolidated net revenue excluding the impact of (i)
Corporate/Other segment net revenue, (ii) sales from stores opened
less than 13 months, (iii) stores closed in the periods presented,
(iv) sales from partial months of operation when stores do not open
or close on the first day of the month and (v) if applicable, the
impact of a 53rd week in a fiscal year. Brand-level comparable
store sales growth is calculated based on cash basis revenues
consistent with what the CODM reviews, and consistent with
reportable segment revenues presented in Note 10. “Segment
Reporting” in our unaudited condensed consolidated financial
statements included in Part I. Item 1. in our Quarterly Report on
Form 10-Q for the period ended April 1, 2023, with the exception of
the Legacy segment, which is adjusted as noted in (b) (ii)
below.
(b)
There are two differences between total
comparable store sales growth based on consolidated net revenue and
Adjusted Comparable Store Sales Growth: (i) Adjusted Comparable
Store Sales Growth includes the effect of deferred and unearned
revenue as if such revenues were earned at the point of sale,
resulting in the following changes from total comparable store
sales growth based on consolidated net revenue: a decrease of 2.0%
and a decrease of 1.8% for the three months ended April 1, 2023 and
April 2, 2022, respectively; and (ii) Adjusted Comparable Store
Sales Growth includes retail sales to the Legacy partner’s
customers (rather than the revenues recognized consistent with the
management & services agreement with the Legacy partner),
resulting in the following changes from total comparable store
sales growth based on consolidated net revenue: a decrease of 0.2%
and a decrease of 0.1% for the three months ended April 1, 2023 and
April 2, 2022, respectively; (iii) with respect to the Company’s
2023 Outlook, Adjusted Comparable Store Sales Growth includes an
estimated 0.2% decrease for the effect of deferred and unearned
revenue as if such revenues were earned at the point of sale and
retail sales to the Legacy partner’s customers (rather than the
revenues recognized consistent with the management & services
agreement).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005318/en/
Investors: National Vision Holdings, Inc. Caitlin
Churchill (203) 682-8200 investor.relations@nationalvision.com
Media: National Vision Holdings, Inc. Racheal Peters,
Manager of External Communications (470) 448-2303
media@nationalvision.com
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