- Net revenue of $525.3 million, an increase of 3.1% from Q2
2022
- Comparable store sales growth of (0.1%) and Adjusted Comparable
Store Sales Growth of 1.0% from Q2 2022
- Net income of $5.6 million and Diluted EPS of $0.07 compared
with $9.7 million and $0.12, respectively in Q2 2022
- Adjusted Operating Income of $16.4 million compared with $27.8
million in Q2 2022
- Adjusted Diluted EPS of $0.17 compared with $0.21 in Q2
2022
National Vision Holdings, Inc. (NASDAQ: EYE) (“National Vision”
or the “Company”) today reported its financial results for the
second quarter ended July 1, 2023.
“We delivered second quarter 2023 results generally in line with
our expectations, reflecting continued strength in our managed care
business and progress on our strategic initiatives, including
expanding exam capacity through enhanced optometrist retention and
recruitment efforts,” said Reade Fahs, National Vision's CEO. “As
we look ahead, we remain focused on better serving our customers,
enhancing our market position and driving long-term growth of our
America’s Best and Eyeglass World brands. While we continue to
navigate near-term headwinds, we believe National Vision remains
well positioned to achieve our full-year 2023 guidance and deliver
sustainable profitable growth over the long term.”
This release includes certain Non-GAAP Financial Measures that
are not 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.
Second Quarter 2023 Summary
- Net revenue increased 3.1% to $525.3 million compared with the
second quarter of 2022 primarily due to growth from new store sales
and an increase in Adjusted Comparable Store Sales Growth,
partially offset by the effect of unearned revenue in the second
quarter of 2023 compared with the prior-year quarter. Net revenue
includes a (0.9%) impact from the timing of unearned revenue in the
current-year quarter compared with the prior-year quarter.
- Comparable store sales growth was (0.1%) and Adjusted
Comparable Store Sales Growth was 1.0%, both reflecting higher
average ticket and an increase in customer transactions. Comparable
store sales growth was negatively impacted by the effects of
unearned and deferred revenue in the current-year quarter compared
with the prior-year quarter.
- The Company opened 24 new stores, closed one store, and ended
the quarter with 1,381 stores. Overall, store count grew 5.1% from
July 2, 2022 to July 1, 2023.
- Costs applicable to revenue increased 5.7% to $247.8 million
compared with the second quarter of 2022. As a percentage of net
revenue, costs applicable to revenue increased 120 basis points to
47.2% compared with the second quarter of 2022 and were primarily
driven by an increase in optometrist-related costs partially offset
by increased exam revenue. In addition, costs applicable to revenue
as a percentage of net revenue increased due to lower product
protection plan revenue as well as other product mix and margin
effects.
- Selling, general and administrative expenses (SG&A)
increased 7.1% to $244.0 million compared with the second quarter
of 2022. Adjusted SG&A increased 6.3% to $238.0 million
compared with the second quarter of 2022. As a percentage of net
revenue, SG&A increased 170 basis points to 46.4% compared with
the second quarter of 2022 mainly due to increases in
performance-based incentive and stock-based compensation, payroll,
and occupancy expense offset primarily by a decrease in other
expenses. As a percentage of net revenue, adjusted SG&A
increased 140 basis points to 45.3% compared with the second
quarter of 2022, driven by increases in payroll, performance-based
incentive compensation, and occupancy expense, partially offset by
a decrease in other expenses.
- Depreciation and amortization expense of $24.9 million
decreased 1.3% from the prior-year period primarily due to a shift
to cloud-based software investments that are amortized in SG&A,
partially offset by the Company's ongoing investments in remote
medicine technology and new store openings.
- Net income decreased 42.3% to $5.6 million compared with the
second quarter of 2022. Net income margin decreased 80 basis points
to 1.1% compared with the second quarter of 2022.
- Diluted earnings per share (EPS) decreased 40.8% to $0.07
compared with the second quarter of 2022. Adjusted Diluted EPS
decreased 19.1% to $0.17 compared with the second quarter of 2022.
The change in margin on unearned revenue negatively impacted
Diluted EPS by $0.03 and Adjusted Diluted EPS by $0.03.
- Adjusted Operating Income decreased 40.8% to $16.4 million
compared with the second quarter of 2022. Adjusted Operating Margin
decreased 240 basis points to 3.1% compared with the second quarter
of 2022. The change in margin on unearned revenue negatively
impacted net income by $2.6 million and Adjusted Operating Income
by $3.5 million.
Six Months Year-to-Date Summary
- Net revenue increased 4.9% to $1,087.7 million compared with
the same period of 2022 and was primarily driven by growth from new
store sales, an increase in Adjusted Comparable Store Sales Growth,
higher revenue from the Company's AC Lens business and the effect
of unearned revenue in the current period compared with the
prior-year period. Net revenue includes a 0.6% impact from the
timing of unearned revenue in the current-year period compared with
the prior-year period.
- Comparable store sales growth was 1.5% and Adjusted Comparable
Store Sales Growth was 0.9%, both reflecting higher average ticket
and an increase in customer transactions.
- The Company opened 32 new stores, closed six stores, and ended
the period with 1,381 stores.
- Costs applicable to revenue increased 6.6% to $501.9 million
compared with the same period in 2022. As a percentage of net
revenue, compared with the prior-year period, costs applicable to
revenue increased 70 basis points to 46.1%, mainly due to an
increase in optometrist-related costs partially offset by increased
exam revenue and the effects from increased eyeglass mix and higher
eyeglass margin. In addition, costs applicable to revenue as a
percentage of net revenue increased due to lower product protection
plan revenue.
- SG&A increased 8.2% to $493.9 million compared with the
same period in 2022. Adjusted SG&A increased 8.2% to $483.6
million compared with the same period of 2022. As a percentage of
net revenue, SG&A increased 140 basis points to 45.4% compared
with the same period in 2022 mainly due to increases in
performance-based incentive and stock-based compensation and
payroll, partially offset by lower advertising expense. As a
percentage of net revenue, adjusted SG&A increased 140 basis
points driven by increases in performance-based incentive
compensation and payroll, partially offset by lower advertising
expense.
- Depreciation and amortization expense of $49.7 million
decreased 1.3% from the prior-year period primarily due to a shift
to cloud-based software investments that are amortized in SG&A,
partially offset by the Company's ongoing investments in remote
medicine technology and new store openings.
- Net income decreased 40.1% to $23.9 million compared with the
same period in 2022. Net income margin decreased 160 basis points
to 2.2% compared with the same period in 2022.
- Diluted EPS decreased 36.0% to $0.30 compared to the same
period in 2022. Adjusted Diluted EPS decreased 4.4% to $0.51
compared to the same period in 2022. The net change in margin on
unearned revenue benefited Diluted EPS by $0.04 and Adjusted
Diluted EPS by $0.04.
- Adjusted Operating Income decreased 22.9% to $56.3 million
compared with the same period of 2022. Adjusted Operating Margin
decreased 180 basis points to 5.2% compared with the same period in
2022. The net change in margin on unearned revenue benefited net
income by $3.5 million and Adjusted Operating Income by $4.7
million.
Balance Sheet and Cash Flow Highlights as of July 1,
2023
- National Vision's cash balance was $254.6 million as of July 1,
2023. The Company had no borrowings under its $300.0 million
first-lien revolving-credit facility (“Revolving Loans”), exclusive
of letters of credit of $6.4 million.
- Total debt was $565.7 million as of July 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 six months
of 2023 were $112.2 million compared to $88.0 million for the
second quarter of 2022. The year-over-year increase was primarily
due to timing of incentive compensation-related payments.
- Capital expenditures for the first six months of 2023 totaled
$54.1 million compared to $55.7 million for the second quarter of
2022.
- As previously announced in June 2023, National Vision entered
into an amended credit agreement, extending its access to $300.0
million in liquidity through Revolving Loans for an additional five
years through June 13, 2028.
Share Repurchase Program
In the second quarter of 2023, the Company did not repurchase
any shares of its common stock. Year to date through July 1, 2023,
National Vision repurchased approximately 1.1 million shares for
$25.0 million. The Company has $25.0 million remaining under its
current share repurchase authorization.
Recent Development
As previously announced on July 26, 2023, the Company’s
partnership with Walmart Inc. (“Walmart”) will be ending in 2024.
This includes supplying and operating Vision Centers in select
Walmart stores, providing contact lens distribution and related
services to Walmart and its affiliate, and arranging for the
provision of optometric services at certain Walmart locations in
California. In connection with the termination of these agreements,
National Vision expects to record noncash goodwill and intangible
asset impairment charges of approximately $60 million and $10
million, respectively, in the third quarter of 2023.
Fiscal 2023 Outlook
National Vision'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 or as a result of the
termination of the Walmart partnership.
Based on its financial results for the six months ended July 1,
2023, and outlook for the remainder of this fiscal year, National
Vision is reaffirming its fiscal-2023 guidance as provided on May
11, 2023 for all metrics except for depreciation and amortization,
which the Company now expects to be in a range of $99 million to
$101 million from the previous range of $104 million to $106
million. National Vision also noted that based on its year-to-date
performance, it expects Adjusted Operating Income and Adjusted
Diluted EPS to be at or above the midpoint of its fiscal 2023
guidance range.
Guidance Metric
Fiscal-2023 Guidance Range
(as of August 10, 2023)
New Stores
65 to 70
Adjusted Comparable Store Sales Growth
0% to 3%
Net Revenue
$2.075 billion to $2.135
billion
Adjusted Operating Income
$48 million to $66 million
Adjusted Diluted EPS1
$0.42 to $0.60
Depreciation and Amortization2
$99 million to $101 million
(previously: $104 million to $106 million)
Interest3
~$3 million
Tax Rate4
26% to 28%
Capital Expenditures
$115 million to $120 million
1 Assumes approximately 79 million shares
and does not include 12.9 million shares attributable to the 2025
Notes and shares from stock-based compensation awards as the
company anticipates them to be anti-dilutive to earnings per share
for fiscal year 2023.
2 Includes amortization of acquisition
intangibles of approximately $4.5 million, which is excluded in the
definition of Adjusted Operating Income and reflects the
anticipated impact of the intangible asset impairment in connection
with the termination of the Walmart agreements.
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
The Company will host a conference call to discuss its second
quarter 2023 financial results and fiscal-year 2023 guidance today,
August 10, 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 “Recent Development” and “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 successfully navigate the
termination of our Walmart partnership, including the transition
period; 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 July 1, 2023
As of December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
254,647
$
229,425
Accounts receivable, net
78,904
79,892
Inventories
120,871
123,158
Prepaid expenses and other current
assets
39,865
41,361
Total current assets
494,287
473,836
Noncurrent assets:
Property and equipment, net
367,333
359,775
Goodwill
777,613
777,613
Trademarks and trade names
240,547
240,547
Other intangible assets, net
30,900
34,669
Right of use assets
398,469
382,825
Other assets
24,779
21,981
Total noncurrent assets
1,839,641
1,817,410
Total assets
$
2,333,928
$
2,291,246
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
64,108
$
65,276
Other payables and accrued expenses
112,946
94,225
Unearned revenue
39,818
41,239
Deferred revenue
64,101
62,201
Current maturities of long-term debt and
finance lease obligations
10,501
4,137
Current operating lease obligations
71,759
77,186
Total current liabilities
363,233
344,264
Noncurrent liabilities:
Long-term debt and finance lease
obligations, less current portion and debt discount
555,182
563,388
Noncurrent operating lease obligations
380,675
358,110
Deferred revenue
21,946
21,601
Other liabilities
9,261
8,900
Deferred income taxes, net
95,219
93,870
Total non-current liabilities
1,062,283
1,045,869
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 200,000
shares authorized; 84,625 and 84,273 shares issued as of July 1,
2023 and December 31, 2022, respectively; 78,154 and 78,992 shares
outstanding as of July 1, 2023 and December 31, 2022,
respectively
846
842
Additional paid-in capital
777,762
767,112
Accumulated other comprehensive loss
(801
)
(1,179
)
Retained earnings
344,401
320,517
Treasury stock, at cost; 6,471 and 5,281
shares as of July 1, 2023 and December 31, 2022, respectively
(213,796
)
(186,179
)
Total stockholders’ equity
908,412
901,113
Total liabilities and stockholders’
equity
$
2,333,928
$
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
Six Months Ended
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
Revenue:
Net product sales
$
432,925
$
421,600
$
897,686
$
854,853
Net sales of services and plans
92,415
87,955
190,023
182,413
Total net revenue
525,340
509,555
1,087,709
1,037,266
Costs applicable to revenue (exclusive
of depreciation and amortization):
Products
167,514
163,361
340,616
327,580
Services and plans
80,325
71,206
161,275
143,024
Total costs applicable to revenue
247,839
234,567
501,891
470,604
Operating expenses:
Selling, general and administrative
expenses
243,971
227,829
493,893
456,383
Depreciation and amortization
24,929
25,245
49,742
50,396
Asset impairment
893
3,509
1,280
3,915
Other expense (income), net
(17
)
34
(134
)
265
Total operating expenses
269,776
256,617
544,781
510,959
Income from operations
7,725
18,371
41,037
55,703
Interest expense (income), net
1,836
3,963
6,703
(181
)
Earnings before income taxes
5,889
14,408
34,334
55,884
Income tax provision
275
4,674
10,450
16,003
Net income
$
5,614
$
9,734
$
23,884
$
39,881
Earnings per share:
Basic
$
0.07
$
0.12
$
0.30
$
0.49
Diluted
$
0.07
$
0.12
$
0.30
$
0.47
Weighted average shares
outstanding:
Basic
78,101
80,061
78,411
80,744
Diluted
78,343
80,403
78,784
94,109
Comprehensive income:
Net income
$
5,614
$
9,734
$
23,884
$
39,881
Unrealized gain on hedge instruments
255
255
508
507
Tax provision of unrealized gain on hedge
instruments
65
65
130
129
Comprehensive income
$
5,804
$
9,924
$
24,262
$
40,259
Note: Diluted EPS for the six months ended
July 2, 2022 is calculated using the if-converted method for the
2025 Notes. The Company added back $4.7 million in interest expense
(after tax) related to the 2025 Notes and assumed conversion of the
2025 Notes at the beginning of the period.
National Vision Holdings, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
In Thousands
(Unaudited)
Six Months Ended
July 1, 2023
July 2, 2022
Cash flows from operating
activities:
Net income
$
23,884
$
39,881
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
49,742
50,396
Amortization of debt discount and deferred
financing costs
1,800
1,584
Asset impairment
1,280
3,915
Deferred income tax expense (benefit)
1,220
3,512
Stock-based compensation expense
9,788
7,372
Losses (gains) on change in fair value of
derivatives
(1,750
)
(10,745
)
Inventory adjustments
1,996
1,429
Other
1,509
2,455
Changes in operating assets and
liabilities:
Accounts receivable
560
(8,661
)
Inventories
290
(7,253
)
Operating lease right of use assets and
lease liabilities
525
568
Other assets
3,528
2,246
Accounts payable
(1,168
)
5,669
Deferred and unearned revenue
824
3,253
Other liabilities
18,188
(7,590
)
Net cash provided by operating
activities
112,216
88,031
Cash flows from investing
activities:
Purchase of property and equipment
(54,120
)
(55,714
)
Other
(665
)
20
Net cash used for investing activities
(54,785
)
(55,694
)
Cash flows from financing
activities:
Repayments on long-term debt
—
(4
)
Proceeds from issuance of common stock
945
2,246
Purchase of treasury stock
(27,611
)
(83,632
)
Payments of debt issuance costs
(2,869
)
—
Payments on finance lease obligations
(2,536
)
(2,218
)
Net cash used for financing activities
(32,071
)
(83,608
)
Net change in cash, cash equivalents and
restricted cash
25,360
(51,271
)
Cash, cash equivalents and restricted
cash, beginning of year
230,624
306,876
Cash, cash equivalents and restricted
cash, end of period
$
255,984
$
255,605
Supplemental cash flow disclosure
information:
Cash paid for interest
$
5,399
$
9,329
Cash paid for taxes
$
4,347
$
5,632
Capital expenditures accrued at the end of
the period
$
10,770
$
9,300
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
Six Months Ended
In thousands
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
Net income
$
5,614
$
9,734
$
23,884
$
39,881
Interest expense (income), net
1,836
3,963
6,703
(181
)
Income tax provision
275
4,674
10,450
16,003
Stock-based compensation expense (a)
5,473
3,638
9,788
7,372
Asset impairment (b)
893
3,509
1,280
3,915
Amortization of acquisition intangibles
(c)
1,872
1,872
3,744
3,744
Other (f)
485
390
472
2,350
Adjusted Operating Income
$
16,448
$
27,780
$
56,321
$
73,084
Net income margin
1.1
%
1.9
%
2.2
%
3.8
%
Adjusted Operating Margin
3.1
%
5.5
%
5.2
%
7.0
%
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
Six Months Ended
In thousands
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
Net income
$
5,614
$
9,734
$
23,884
$
39,881
Interest expense (income), net
1,836
3,963
6,703
(181
)
Income tax provision
275
4,674
10,450
16,003
Depreciation and amortization
24,929
25,245
49,742
50,396
EBITDA
32,654
43,616
90,779
106,099
Stock-based compensation expense (a)
5,473
3,638
9,788
7,372
Asset impairment (b)
893
3,509
1,280
3,915
Other (f)
485
390
472
2,350
Adjusted EBITDA
$
39,505
$
51,153
$
102,319
$
119,736
Net income margin
1.1
%
1.9
%
2.2
%
3.8
%
Adjusted EBITDA Margin
7.5
%
10.0
%
9.4
%
11.5
%
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
Six Months Ended
Shares in thousands, except per share
amounts
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
Diluted EPS
$
0.07
$
0.12
$
0.30
$
0.47
Stock-based compensation expense (a)
0.07
0.05
0.12
0.08
Asset impairment (b)
0.01
0.04
0.02
0.04
Amortization of acquisition intangibles
(c)
0.02
0.02
0.05
0.04
Amortization of debt discount and deferred
financing costs (d)
0.01
0.01
0.02
0.01
Losses (gains) on change in fair value of
derivatives (e)
0.00
(0.01
)
0.04
(0.11
)
Other (i)
0.01
0.00
0.01
0.02
Tax expense (benefit) from stock-based
compensation (g)
0.00
0.00
0.01
0.00
Tax effect of total adjustments (h)
(0.03
)
(0.03
)
(0.07
)
(0.02
)
Adjusted Diluted EPS
$
0.17
$
0.21
$
0.51
$
0.53
Weighted average diluted shares
outstanding
78,343
80,403
78,784
94,109
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
Six Months Ended
In thousands
July 1, 2023
July 2, 2022
July 1, 2023
July 2, 2022
SG&A
$
243,971
$
227,829
$
493,893
$
456,383
Stock compensation expense (a)
5,473
3,638
9,788
7,372
Other (j)
489
390
476
2,095
Adjusted SG&A
$
238,009
$
223,801
$
483,629
$
446,916
SG&A Percent of Net Revenue
46.4
%
44.7
%
45.4
%
44.0
%
Adjusted SG&A Percent of Net
Revenue
45.3
%
43.9
%
44.5
%
43.1
%
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 following 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 six
months ended July 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,
including debt issuance costs of $0.2 million for the three and six
months ended July 1, 2023.
(j)
Reflects other expenses in (f) above,
except for immaterial amounts for the three and six months ended
July 1, 2023 and losses on other investments of $0.3 million for
the six months ended July 2, 2022.
Reconciliation of Adjusted Comparable
Store Sales Growth to Total Comparable Store Sales Growth
Comparable store sales growth
(a)
Three Months Ended July 1,
2023
Three Months Ended July 2,
2022
Six Months Ended July 1, 2023
Six Months Ended July 2, 2022
2023 Outlook (b)
Owned & Host segment
America’s Best
1.8 %
(13.0) %
1.8 %
(10.1) %
Eyeglass World
(2.8) %
(9.1) %
(2.0) %
(7.6) %
Military
(0.1) %
(6.1) %
1.6 %
(5.1) %
Fred Meyer
(4.2) %
(9.8) %
(6.9) %
(4.3) %
Legacy segment
0.5 %
(12.9) %
(1.5) %
(8.6) %
Total comparable store sales growth
(0.1) %
(11.0) %
1.5 %
(8.0) %
0% - 3%
Adjusted Comparable Store Sales Growth
(b)
1.0 %
(12.4) %
0.9 %
(9.6) %
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 July 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: an increase
of 1.2% and a decrease of 1.2% for the three months ended July 1,
2023 and July 2, 2022, respectively, and a decrease of 0.4% and a
decrease of 1.4% for the six months ended July 1, 2023 and July 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 0.1% and a decrease of 0.2%
for the three months ended July 1, 2023 and July 2, 2022,
respectively, and a decrease of 0.2% and a decrease of 0.2% for the
six months ended July 1, 2023 and July 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/20230810997017/en/
Investor: Angie McCabe
investor.relations@nationalvision.com
Media: Racheal Peters media@nationalvision.com
Grafico Azioni National Vision (NASDAQ:EYE)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni National Vision (NASDAQ:EYE)
Storico
Da Set 2023 a Set 2024