U.S. Net Sales Grew 2% Compared to the Third
Quarter of 2022
Strengthens Balance Sheet Through Inventory
Reduction and $13.4 Million Debt Paydown
Princess Polly Store in Los Angeles
Outperforming Expectations After Strong September Opening
a.k.a. Brands Holding Corp. (NYSE: AKA), a brand
accelerator of next generation fashion brands, today announced
financial results for the third quarter ended September 30,
2023.
Results for the Third Quarter
- Net sales decreased 9.6% to $140.8 million, compared to
$155.8 million in the third quarter of 2022; down 8% in Constant
Currency1.
- In the U.S., net sales increased 2.0% compared to the
third quarter of 2022 and grew 9.7% on a two-year stack.
- Net loss was $(70.4) million or $(6.58) per share, and
(50.0%) of net sales in the third quarter of 2023, compared to net
loss of $(0.1) million or $(0.01) per share, and (0.1%) of net
sales in the third quarter of 2022.
- Adjusted EBITDA2 was $4.7 million, or 3.3% of net sales,
compared to $9.2 million, or 5.9% of net sales, in the third
quarter of 2022.
“I am pleased to report that the improvements we have made to
our operating model enabled us to generate positive operating cash
flow of $11 million and deliver net sales growth in the U.S. in the
third quarter,” said Ciaran Long, Interim Chief Executive Officer
and Chief Financial Officer. "We continue to strengthen our balance
sheet by reducing debt by 26% year-to-date, coupled with a
strategic reduction in our inventory position, which is down 21%
year-to-date. I am also very pleased with the progress we are
making in the U.S. where we registered third quarter net sales
growth of 2%. Accounting for approximately 60% of total net sales,
the U.S. region represents our greatest opportunity for growth and
brand expansion. And lastly, we are very encouraged by the success
of our omnichannel initiatives. The opening of our first Princess
Polly store in Los Angeles has outperformed our expectations,
fueling profitable in-store revenue generation, a halo effect in
our e-commerce business and resulting in 30% of in-store customers
new to the Princess Polly brand providing a significant runway for
potential growth."
"Despite the growth in the U.S., we continue to face
macroeconomic pressures in Australia, which led to
lower-than-expected adjusted EBITDA. We are taking clear and
decisive actions to improve our operations in the region, including
rightsizing inventory to make way for product newness and rapidly
transitioning Culture Kings to a data-driven, short lead time
merchandising cycle. I’m confident that the actions we are taking
will set our brands up for long-term success and that we will
deliver both growth and profitability in 2024."
The company also today announced that Chief Executive Officer,
Jill Ramsey, has made the personal decision to transition to a
Strategic Advisory role effective immediately. Jill will remain an
active board member on a.k.a. Brands’ Board of Directors. Ciaran
Long, Interim Chief Executive Officer and Chief Financial Officer
will remain Interim CEO while the Board of Directors conducts a
search.
Recent Brand Highlights
- Princess Polly opened its first store at the Westfield Century
City mall in Los Angeles, California, which is exceeding revenue
expectations since the grand opening in September.
- Culture Kings Las Vegas flagship store surpasses annual revenue
goal, and the brand will host immersive in-store activations during
the Formula 1 Las Vegas Grand Prix in partnership with McLaren
Racing and Mitchell & Ness.
- Petal & Pup launched on Macy’s Marketplace, which is
performing well and attracting new customers to the brand - 96% of
shoppers who purchased Petal & Pup on Macy’s and Target
marketplaces are new customers.
- mnml is now a top three brand at Culture Kings Las Vegas and
continues to be a highly popular brand with top-tier NFL and NBA
athletes.
Third Quarter Financial
Details
- Net sales decreased 9.6% to $140.8 million, compared to
$155.8 million in the third quarter of 2022. The decrease was
driven by a decline in the number of orders and average order value
during the quarter, primarily driven by adverse macroeconomic
conditions in Australia and New Zealand. On a Constant Currency1
basis, net sales decreased 8%.
- Gross margin was 55.4%, compared to 55.7% in the third
quarter of 2022. The decline was primarily driven by targeted
discounting in Culture Kings Australia and a higher return rate,
partially offset by lower freight expenses.
- Selling expenses were $36.7 million, compared to $41.5
million in the third quarter of 2022. Selling expenses were 26.0%
of net sales compared to 26.6% of net sales in the third quarter of
2022. The decrease was primarily due to operational efficiencies in
distribution, fulfillment and outbound shipping.
- Marketing expenses were $18.5 million, compared to $16.5
million in the third quarter of 2022. Marketing expenses were 13.1%
of net sales compared to 10.6% of net sales in the third quarter of
2022.
- General and administrative (“G&A”) expenses were
$24.6 million, compared to $26.1 million in the third quarter of
2022. G&A expenses were 17.5% of net sales compared to 16.8% of
net sales in the third quarter of 2022. The increase in G&A as
a percent of net sales during the quarter was primarily due lower
sales volume compared to the prior year.
- Adjusted EBITDA2 was $4.7 million, or 3.3% of net sales,
compared to $9.2 million, or 5.9% of net sales in the third quarter
of 2022.
Balance Sheet and Cash
Flow
- Cash and cash equivalents at the end of the third
quarter totaled $20.7 million, compared to $46.3 million at the end
of fiscal year 2022.
- Inventory at the end of the third quarter totaled $100.0
million, compared to $126.5 million at the end of fiscal year 2022,
or compared to $136.9 million at the end of the third quarter of
2022.
- Debt at the end of the third quarter totaled $106.7
million, compared to $143.6 million at the end of fiscal year
2022.
- Cash flow provided by operations for the nine months
ended September 30, 2023 was $18.0 million, compared to cash flow
used in operations of $11.4 million for the nine months ended
September 30, 2022.
Outlook
For the full year of 2023, the Company now expects:
- Net sales between $550 million and $555 million
- Adjusted EBITDA3 between $13.5 million and $15.5 million
- Weighted average diluted share count of 10.7 million
The above outlook is based on several assumptions, including but
not limited to, foreign exchange rates remaining at the current
levels and continued macroeconomic pressures, specifically in
Australia and New Zealand. See “Forward-Looking Statements” for
additional information.
Conference Call
A conference call to discuss the Company’s third quarter results
is scheduled for November 8, 2023, at 4:30 p.m. ET. Those who wish
to participate in the call may do so by dialing (877) 858-5495 or
(201) 689-8853 for international callers. The conference call will
also be webcast live at https://ir.aka-brands.com in the Events and
Presentations section. A recording will be available shortly after
the conclusion of the call. To access the replay, please dial (877)
660-6853 or (201) 612-7415 for international callers, conference ID
13741456. An archive of the webcast will be available on a.k.a.
Brands’ investor relations website.
Use of Non-GAAP Financial Measures and Other Operating
Metrics
In addition to results determined in accordance with accounting
principles generally accepted in the United States of America
(GAAP), management utilizes certain non-GAAP financial measures
such as Adjusted EBITDA, Adjusted EBITDA margin, net income (loss),
as adjusted, net income (loss) per share, as adjusted and pro forma
net sales for purposes of evaluating ongoing operations and for
internal planning and forecasting purposes. We believe that these
non-GAAP financial measures, when reviewed collectively with our
GAAP financial information, provide useful supplemental information
to investors in assessing our operating performance. The non-GAAP
financial measures should not be considered in isolation or as a
substitute for the GAAP financial measures. The non-GAAP financial
measures used by the Company may be different from similarly-titled
non-GAAP financial measures used by other companies. See additional
information at the end of this release regarding non-GAAP financial
measures.
About a.k.a. Brands
a.k.a. Brands is a brand accelerator of next generation fashion
brands. Each brand in the a.k.a. portfolio targets a distinct Gen Z
and millennial audience, creates authentic and inspiring social
content and offers quality exclusive merchandise. a.k.a. Brands
leverages its next-generation retail platform to help each brand
accelerate its growth, scale in new markets and enhance its
profitability. Current brands in the a.k.a. Brands portfolio
include Princess Polly, Culture Kings, mnml and Petal &
Pup.
Forward-Looking Statements
Certain statements made in this release are “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,”
“propose” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements include statements related to our financial and
operational results for the third quarter and long-term
expectations, as well as our brands’ omnichannel expansion
initiatives.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results
or outcomes include the effects of economic downturns and unstable
market conditions; our ability in the future to continue to comply
with the NYSE listing standards and maintain the listing of our
common stock on the NYSE; risks related to doing business in China;
our ability to anticipate rapidly-changing consumer preferences in
the apparel, footwear and accessories industries; our ability to
execute our strategic initiatives, including transitioning Culture
Kings to a data-driven, short lead time merchandising cycle; our
ability to acquire new customers, retain existing customers or
maintain average order value levels; the effectiveness of our
marketing and our level of customer traffic; merchandise return
rates; our ability to manage our inventory effectively; our success
in identifying brands to acquire, integrate and manage on our
platform; our ability to expand into new markets; the global nature
of our business, including international economic, geopolitical
instability (including the ongoing Ukraine and Israel wars), legal,
compliance and supply chain risks; interruptions in or increased
costs of shipping and distribution, which could affect our ability
to deliver our products to the market; our use of social media
platforms and influencer sponsorship initiatives, which could
adversely affect our reputation or subject us to fines or other
penalties; fluctuating operating results; the inherent challenges
in measuring certain of our key operating metrics, and the risk
that real or perceived inaccuracies in such metrics may harm our
reputation and negatively affect our business; the potential for
tax liabilities that may increase the costs to our consumers; our
ability to attract and retain highly qualified personnel, including
key members of our leadership team; fluctuations in wage rates and
the price, availability and quality of raw materials and finished
goods, which could increase costs; foreign currency fluctuations;
and other risks and uncertainties set forth in the sections
entitled “Risk Factors,” “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and “Forward-Looking
Statements” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2022, quarterly reports on Form 10-Q and
any other periodic reports that the Company may file with the
Securities and Exchange Commission (the “SEC”). a.k.a. Brands does
not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
a.k.a. BRANDS HOLDING
CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except share
and per share data)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net sales
$
140,833
$
155,822
$
397,346
$
462,612
Cost of sales
62,865
68,965
173,522
204,112
Gross profit
77,968
86,857
223,824
258,500
Operating expenses:
Selling
36,660
41,450
106,998
127,068
Marketing
18,511
16,532
51,642
51,301
General and administrative
24,622
26,133
74,681
76,614
Goodwill impairment
68,524
—
68,524
—
Total operating expenses
148,317
84,115
301,845
254,983
(Loss) income from operations
(70,349
)
2,742
(78,021
)
3,517
Other expense, net:
Interest expense
(2,798
)
(1,835
)
(8,490
)
(4,487
)
Other expense
(541
)
(923
)
(2,325
)
(2,035
)
Total other expense, net
(3,339
)
(2,758
)
(10,815
)
(6,522
)
Loss before income taxes
(73,688
)
(16
)
(88,836
)
(3,005
)
Benefit from (provision for) income
tax
3,278
(98
)
3,833
204
Net loss
$
(70,410
)
$
(114
)
$
(85,003
)
$
(2,801
)
Net loss per share:
Basic and diluted*
$
(6.58
)
$
(0.01
)
$
(7.92
)
$
(0.26
)
Weighted average shares outstanding:
Basic and diluted*
10,695,621
10,723,859
10,736,628
10,721,995
* Adjusted for the one-for-12 reverse stock split, effective as
of September 29, 2023.
a.k.a. BRANDS HOLDING
CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
September 30,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
20,742
$
46,319
Restricted cash
1,862
2,054
Accounts receivable
3,312
3,231
Inventory, net
99,950
126,533
Prepaid income taxes
10,270
6,089
Prepaid expenses and other current
assets
18,027
13,378
Total current assets
154,163
197,604
Property and equipment, net
27,680
28,958
Operating lease right-of-use assets
37,270
37,317
Intangible assets, net
66,345
76,105
Goodwill
91,281
167,731
Deferred tax assets
1,009
1,070
Other assets
657
853
Total assets
$
378,405
$
509,638
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
27,480
$
20,903
Accrued liabilities
27,502
39,806
Sales returns reserve
7,482
3,968
Deferred revenue
10,938
11,421
Operating lease liabilities, current
7,046
6,643
Current portion of long-term debt
7,700
5,600
Total current liabilities
88,148
88,341
Long-term debt
98,985
138,049
Operating lease liabilities
35,273
34,404
Other long-term liabilities
1,540
1,483
Deferred income taxes
241
284
Total liabilities
224,187
262,561
Stockholders’ equity:
Preferred stock
—
—
Common stock
128
129
Additional paid-in capital
465,212
460,660
Accumulated other comprehensive loss
(57,592
)
(45,185
)
Accumulated deficit
(253,530
)
(168,527
)
Total stockholders’ equity
154,218
247,077
Total liabilities and stockholders’
equity
$
378,405
$
509,638
a.k.a. BRANDS HOLDING
CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September
30,
2023
2022
Cash flows from operating
activities:
Net loss
$
(85,003
)
$
(2,801
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation expense
5,912
4,121
Amortization expense
8,782
11,252
Amortization of inventory fair value
adjustment
—
707
Amortization of debt issuance costs
470
487
Lease incentives
1,499
1,384
Loss on disposal of businesses
1,533
—
Non-cash operating lease expense
5,786
7,211
Equity-based compensation
5,478
4,448
Deferred income taxes, net
3
(2,343
)
Goodwill impairment
68,524
—
Changes in operating assets and
liabilities, net of effects of acquisitions:
Accounts receivable
111
(1,339
)
Inventory
20,428
(31,067
)
Prepaid expenses and other current
assets
(5,448
)
2,965
Accounts payable
7,495
9,430
Income taxes payable
(4,528
)
(6,987
)
Accrued liabilities
(10,912
)
641
Returns reserve
3,714
(415
)
Deferred revenue
(4
)
(3,294
)
Lease liabilities
(5,798
)
(5,817
)
Net cash provided by (used in) operating
activities
18,042
(11,417
)
Cash flows from investing
activities:
Acquisition of businesses, net of cash
acquired
—
(2,095
)
Purchase of intangible assets
(59
)
(164
)
Purchases of property and equipment
(5,462
)
(13,946
)
Net cash used in investing activities
(5,521
)
(16,205
)
Cash flows from financing
activities:
Payments of costs related to initial
public offering
—
(1,142
)
Proceeds from line of credit, net of
issuance costs
—
25,000
Repayment of line of credit
(33,100
)
—
Proceeds from issuance of debt, net of
issuance costs
—
(121
)
Repayment of debt
(4,200
)
(4,200
)
Taxes paid related to net share settlement
of equity awards
(107
)
(84
)
Proceeds from issuances under equity-based
compensation plans
90
—
Repurchase of shares
(910
)
—
Net cash (used in) provided by financing
activities
(38,227
)
19,453
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(63
)
211
Net decrease in cash, cash equivalents and
restricted cash
(25,769
)
(7,958
)
Cash, cash equivalents and restricted cash
at beginning of period
48,373
41,018
Cash, cash equivalents and restricted cash
at end of period
$
22,604
$
33,060
Reconciliation of cash, cash
equivalents and restricted cash:
Cash and cash equivalents
$
20,742
$
31,114
Restricted cash
1,862
1,946
Total cash, cash equivalents and
restricted cash
$
22,604
$
33,060
a.k.a. BRANDS HOLDING
CORP.
KEY FINANCIAL AND OPERATING
METRICS AND NON-GAAP MEASURES
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(dollars in thousands)
2023
2022
2023
2022
Gross margin
55
%
56
%
56
%
56
%
Net loss
$
(70,410
)
$
(114
)
$
(85,003
)
$
(2,801
)
Net loss margin
(50
)%
—
%
(21
)%
(1
)%
Adjusted EBITDA2
$
4,697
$
9,236
$
12,451
$
25,779
Adjusted EBITDA margin2
3
%
6
%
3
%
6
%
Key Operational Metrics and Regional Sales
Three Months Ended September
30,
Nine Months Ended September
30,
(metrics in millions, except AOV; sales
in thousands)
2023
2022
% Change
2023
2022
% Change
Key Operational
Metrics
Active customers1
3.6
3.8
(5.3
)%
3.6
3.8
(5.3
)%
Average order value
$
81
$
85
(4.7
)%
$
81
$
84
(3.6
)%
Number of orders
1.7
1.8
(5.6
)%
4.9
5.5
(10.9
)%
Sales by
Region
U.S.
$
83,846
$
82,172
2.0
%
$
236,439
$
242,117
(2.3
)%
Australia/New Zealand
50,022
67,038
(25.4
)%
139,505
196,638
(29.1
)%
Rest of world
6,965
6,612
5.3
%
21,402
23,857
(10.3
)%
Total
$
140,833
$
155,822
(9.6
)%
$
397,346
$
462,612
(14.1
)%
Year-over-year growth on a constant
currency basis1
(7.7
)%
(11.5
)%
Sales by Region -
Two-Year Stack
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2021
% Change
2023
2021
% Change
U.S.
$
83,846
$
76,435
9.7
%
$
236,439
$
190,470
24.1
%
Australia/New Zealand
50,022
79,140
(36.8
)%
139,505
169,878
(17.9
)%
Rest of world
6,965
6,187
12.6
%
21,402
19,420
10.2
%
Total
$
140,833
$
161,762
(12.9
)%
$
397,346
$
379,768
4.6
%
Active Customers
We view the number of active customers as a key indicator of our
growth, the value proposition and consumer awareness of our brand,
and their desire to purchase our products. In any particular
period, we determine our number of active customers by counting the
total number of unique customer accounts who have made at least one
purchase in the preceding 12-month period, measured from the last
date of such period.
Average Order Value
We define average order value (“AOV”) as net sales in a given
period divided by the total orders placed in that period. AOV may
fluctuate as we expand into new categories or geographies or as our
assortment changes.
a.k.a. BRANDS HOLDING CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in
thousands, except per share data) (unaudited)
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP
financial measures that management uses to assess our operating
performance. Because Adjusted EBITDA and Adjusted EBITDA margin
facilitate internal comparisons of our historical operating
performance on a more consistent basis, we use these measures for
business planning purposes.
We also believe this information will be useful for investors to
facilitate comparisons of our operating performance and better
identify trends in our business. We expect Adjusted EBITDA margin
to increase over the long-term as we continue to scale our business
and achieve greater leverage in our operating expenses.
We calculate Adjusted EBITDA as net income (loss) adjusted to
exclude: interest and other expense; provision for income taxes;
depreciation and amortization expense; equity-based compensation
expense; costs to establish or relocate distribution centers;
transaction costs; costs related to severance from headcount
reductions; goodwill and intangible asset impairment; sales tax
penalties; insured losses, net of any recoveries; and one-time or
non-recurring items, and Adjusted EBITDA margin as Adjusted EBITDA
as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA
margin are considered non-GAAP financial measures under the SEC’s
rules because they exclude certain amounts included in net income
(loss) and net income (loss) margin, the most directly comparable
financial measures calculated in accordance with GAAP.
A reconciliation of non-GAAP Adjusted EBITDA to net income
(loss) for the three and nine months ended September 30, 2023 and
2022 is as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
(dollars in thousands)
2023
2022
2023
2022
Net loss
$
(70,410
)
$
(114
)
$
(85,003
)
$
(2,801
)
Add (deduct):
Total other expense, net
3,339
2,758
10,815
6,522
(Benefit from) provision for income
tax
(3,278
)
98
(3,833
)
(204
)
Depreciation and amortization expense
4,533
4,566
14,694
15,373
Equity-based compensation expense
1,719
1,586
5,478
4,448
Inventory step-up amortization expense
—
—
—
707
Distribution center relocation costs
—
12
—
1,303
Transaction costs
—
39
—
140
Severance
211
291
894
291
Goodwill impairment
68,524
—
68,524
—
Sales tax penalties
55
—
586
—
Insured (gains) losses
4
—
296
—
Adjusted EBITDA
$
4,697
$
9,236
$
12,451
$
25,779
Net loss margin
(50
)%
—
%
(21
)%
(1
)%
Adjusted EBITDA margin
3
%
6
%
3
%
6
%
Net Income (Loss), As Adjusted and Net Income (Loss) Per
Share, As Adjusted
Net income (loss), as adjusted and net income (loss) per share,
as adjusted are considered non-GAAP financial measures under the
SEC’s rules because they exclude certain amounts included in net
income (loss) and net income (loss) per share calculated in
accordance with GAAP, the most directly comparable financial
measures calculated in accordance with GAAP. Management believes
that net income (loss), as adjusted and net income (loss) per
share, as adjusted are meaningful measures to share with investors
because they better enable comparison of the performance with that
of the comparable period. In addition, net income (loss), as
adjusted and net income (loss) per share, as adjusted afford
investors a view of what management considers a.k.a.’s core
earnings performance and the ability to make a more informed
assessment of such core earnings performance with that of the prior
year.
We have calculated net loss, as adjusted and net loss per share,
as adjusted for the three and nine months ended September 30, 2023
by adjusting net loss and net loss per share for the following:
- Loss on disposal of the Rebdolls reporting unit; and
- Impairment recognized on the goodwill recorded from the
acquisitions of the Culture Kings and Petal & Pup reporting
units, which is a result of the continued worsening in global
economic trends, elevate interest rates and unfavorable demand in
Australia.
A reconciliation of non-GAAP net loss, as adjusted to net loss,
as well as the resulting calculation of net loss per share, as
adjusted for the three and nine months ended September 30, 2023 are
as follows:
Three Months Ended September
30, 2023
Nine Months Ended September
30, 2023
Net loss
$
(70,410
)
$
(85,003
)
Adjustments:
Loss on disposal of the Rebdolls reporting
unit
—
951
Goodwill impairment
68,524
68,524
Loss on extinguishment of debt
—
—
Tax effects of adjustments
—
—
Net loss, as adjusted
$
(1,886
)
$
(15,528
)
Net loss per share, as adjusted
$
(0.18
)
$
(1.45
)
Weighted-average shares, diluted
10,695,621
10,736,628
A reconciliation of non-GAAP net loss, as adjusted to net loss,
as well as the resulting calculation of net loss per share, as
adjusted for the nine months ended September 30, 2022 are as
follows:
Nine Months Ended September
30, 2022
Net loss
$
(2,801
)
Adjustments:
Inventory step-up amortization expense
707
Tax effects of adjustments
(212
)
Net loss, as adjusted
$
(2,306
)
Net loss per share, as adjusted
$
(0.22
)
Weighted-average shares, diluted*
10,721,995
* Adjusted for the one-for-12 reverse stock split, effective as
of September 29, 2023.
Pro Forma Net Sales
Pro forma net sales is considered a non-GAAP financial measure
under the SEC’s rules calculated in accordance with Article 11 of
Regulation S-X. We believe that pro forma net sales is useful
information for investors as it provides a better understanding of
sales performance, and relative changes therein, on a comparable
basis. We calculate pro forma net sales as net sales including the
historical net sales relating to the pre-acquisition periods of
Culture Kings, assuming that the Company acquired Culture Kings at
the beginning of the period presented. Pro forma net sales is not
necessarily indicative of what the actual results would have been
if the acquisition had in fact occurred on the date or for the
periods indicated nor does it purport to project net sales for any
future periods or as of any date. A reconciliation of non-GAAP pro
forma net sales to net sales, disaggregated by geography, which is
the most directly comparable financial measure calculated in
accordance with GAAP, for the nine months ended September 30, 2023
and 2021, is as follows:
Nine Months Ended
September 30, 2023
Nine Months Ended September
30, 2021
Two-year Growth Rate
Actual
Actual
Culture Kings
Pro Forma
Actual
Pro Forma
U.S.
$
236,439
$
190,470
$
7,669
$
198,139
24.1
%
19.3
%
Australia/New Zealand
139,505
169,878
43,314
213,192
(17.9
)%
(34.6
)%
Rest of world
21,402
19,420
280
19,700
10.2
%
8.6
%
Total
$
397,346
$
379,768
$
51,263
$
431,031
4.6
%
(7.8
)%
______________________
1 In order to provide a framework for assessing the performance
of our underlying business, excluding the effects of foreign
currency rate fluctuations, we compare the percent change in the
results from one period to another period using a constant currency
methodology wherein current and comparative prior period results
for our operations reporting in currencies other than U.S. dollars
are converted into U.S. dollars at constant exchange rates (i.e.,
the rates in effect on December 31, 2022, which was the last day of
our prior fiscal year) rather than the actual exchange rates in
effect during the respective periods.
2 See additional information at the end of this release
regarding non-GAAP financial measures.
3 The Company has not provided a quantitative reconciliation of
its Adjusted EBITDA outlook to a GAAP net income outlook because it
is unable, without making unreasonable efforts, to project certain
reconciling items. These items include, but are not limited to,
future equity-based compensation expense, income taxes, interest
expense and transaction costs. These items are inherently variable
and uncertain and depend on various factors, some of which are
outside of the Company’s control or ability to predict. See
additional information at the end of this release regarding
non-GAAP financial measures.
4 Trailing twelve months.
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Investor Contact investors@aka-brands.com
Media Contact media@aka-brands.com
Grafico Azioni aka Brands (NYSE:AKA)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni aka Brands (NYSE:AKA)
Storico
Da Gen 2024 a Gen 2025
