OLAPLEX Reports Third Quarter 2021 Results

Delivers robust third quarter resultsCompleted Initial Public OfferingCompany Introduces Fiscal 2021 Outlook SANTA BARBARA, Calif., Nov. 10, 2021 (GLOBE NEWSWIRE) — Olaplex Holdings, Inc. (NASDAQ: OLPX) (“OLAPLEX” or the “Company”), an progressive, science-enabled, technology-driven magnificence firm, targeted on delivering its patent-protected premium hair care merchandise to skilled hair salons, retailers, and on a regular basis shoppers, immediately introduced monetary outcomes for the third quarter and 9 months ended September 30, 2021. JuE Wong, OLAPLEX’s President and Chief Executive Officer, commented: “We delivered an excellent third quarter highlighted by vital progress throughout our key monetary metrics, reflecting the ability of our disruptive enterprise mannequin targeted on enhancing hair well being with nice merchandise backed by science.   Our third quarter web gross sales enhance of 81% year-over-year was fueled by broad-based power for our OLAPLEX routine throughout our omnichannel distribution globally and a positive response to our new product introductions.   During the quarter, we additionally marked a milestone for our firm as we accomplished our preliminary public providing.   I need to thank our whole group and companions for his or her laborious work and dedication towards this vital occasion.   As we glance forward, we imagine OLAPLEX is nicely positioned for long run progress.   I’m extraordinarily happy with our passionate and devoted group that continues to contribute to our efficiency this quarter and look ahead to persevering with our profitable progress as a public firm for the advantage of all OLAPLEX stakeholders.” For the third quarter of 2021, in comparison with the third quarter of 2020: Net gross sales elevated 81% to $161.6 million reflecting robust progress throughout all channels of distribution pushed by elevated velocity of current merchandise, the launch of recent merchandise, and the addition of recent clients, each within the U.S. and Internationally.By channel: Professional elevated 57.6% to $75.0 million, or 46.4% of web salesSpecialty Retail grew 128.1% to $46.3 million, or 28.7% of web salesDirect-To-Consumer (DTC) rose 86.9% to $40.3 million, or 24.9% of web gross sales; Gross revenue elevated 103% to $127.5 million and gross margin elevated 870 foundation factors to 78.9%;Adjusted gross revenue elevated 78% to $129.2 million, or an adjusted gross margin of 79.9%.   This compares to adjusted gross revenue of $72.6 million, or an adjusted gross margin of 81.2%, within the third quarter of 2020.  Net revenue elevated 99.9% to $56.6 million, or $0.08 per diluted share in comparison with $0.04 per diluted share within the third quarter of 2020;Adjusted web revenue was $74.4 million, or $0.11 per diluted share, in comparison with Adjusted web revenue of $45.8 million, or $0.07 per diluted share within the 2020 third quarter; andAdjusted EBITDA elevated 63.3% to $106.8 million, or 66.1% of web gross sales, in comparison with $65.4 million, or 73.1% within the third quarter of 2020. Adjusted EBITDA within the third quarter this 12 months was negatively impacted by $4.3 million, or 265 foundation factors, expressed as a share of gross sales, because of incremental prices associated to accelerated vesting of cash-settled unit awards and the re-valuation of non-vested cash-settled unit awards for non-executive workers as a result of valuation of the Company on the time of the preliminary public providing. Adjusted gross revenue, adjusted gross margin, adjusted web revenue, adjusted diluted EPS and adjusted EBITDA are measures that aren’t calculated or introduced in accordance with usually accepted accounting ideas within the United States (“GAAP”). For extra details about how we use these non-GAAP monetary measures in our enterprise, the restrictions of those measures, and a reconciliation of those measures to probably the most straight comparable GAAP measures, please see “Disclosure Regarding Non-GAAP Measures” and the reconciliation tables that accompany this launch. Third Quarter Highlights (Dollars in $000’s) Q3 2021 Q3 2020 % ChangeNet Sales $161,624  $89,447  80.7%Gross Profit $127,482  $62,776  103.1%Adjusted Gross Profit $129,162  $72,622  77.9%Net Income $56,591  $28,315  99.9%Adjusted Net Income $74,434  $45,780  62.6%Adjusted EBITDA $106,842  $65,421  63.3%Diluted EPS $0.08  $0.04  100.0%Adjusted Diluted EPS $0.11  $0.07  57.1%Weighted common Diluted Shares Outstanding 690,711,782  653,036,893    See “Disclosure Regarding Non-GAAP Financial Measures” and the reconciliation tables that accompany this launch for a dialogue and reconciliation of sure non-GAAP monetary measures included on this launch. Nine Month Highlights (Dollars in $000’s) 9M YTD 2021 9M YTD 2020 % ChangeNet Sales $431,867  $189,055  128.4%Gross Profit $341,609  $105,252  224.6%Adjusted Gross Profit $348,008  $154,338  125.5%Net Income $151,473  $5,890  NM Adjusted Net Income $204,257  $85,108  140.0%Adjusted EBITDA $298,106  $133,452  123.4%Diluted EPS $0.22  $0.01  NM Adjusted Diluted EPS $0.30  $0.13  130.8%Weighted common Diluted Shares Outstanding 689,108,272  632,877,840    See “Disclosure Regarding Non-GAAP Financial Measures” and the reconciliation tables that accompany this launch for a dialogue and reconciliation of sure non-GAAP monetary measures included on this launch. Balance Sheet As of September 30, 2021, the Company had $121.5 million of money and money equivalents, in comparison with $121.6 million as of September 30, 2020. Inventory at quarter finish was $69.1 million, in comparison with $21.3 million on the finish of the fiscal 2020 third quarter.   The Company is happy with the extent and composition of its stock at quarter finish and believes it’s positioned to satisfy demand.   Long-term debt, web of present portion, was $742.4 million in comparison with $448.9 million as of the top of the prior 12 months interval.   Initial Public Offering and Basis of Presentation On October 4, 2021, the Company accomplished an preliminary public providing of 73,700,000 shares of its widespread inventory (the “IPO”). All shares bought within the IPO had been bought by sure current stockholders of the Company at a public providing value of $21 per share.    The promoting stockholders acquired web proceeds of roughly $1.466 million, after deducting underwriting reductions and commissions. Th Company’s shares started buying and selling on the Nasdaq Global Select Market on September 30, 2021 below the ticker image “OLPX”.   On October 8, 2021, the promoting stockholders bought 11,055,000 extra shares of widespread inventory pursuant to the total train by the underwriters of their choice to buy extra shares on the preliminary public providing value of $21 per share.   The promoting shareholders acquired web proceeds of roughly $220 million, after deducting underwriting reductions and commissions, for the sale of those extra shares. OLAPLEX didn’t obtain any proceeds from the gross sales of the shares by the promoting stockholders.   The monetary statements for prior durations give impact to the Reorganization, mentioned in ultimate prospectus dated September 29, 2021 associated to the IPO, filed with the Securities and Exchange Commission (the “SEC”) on October 1, 2021 (the “Prospectus”), together with the change of all 960,184 models of Penelope Group Holdings, L.P. for an combination of 648,124,642 shares of widespread inventory of Olaplex Holdings, Inc., which is equal to an general change ratio of one-for-675. All share and earnings per share quantities introduced herein have been retroactively adjusted to provide impact to the Reorganization as in the event that they occurred in all prior durations introduced. Partial Early Release of IPO Lock-Up Agreements Pursuant to the phrases of the lock-up agreements entered into by OLAPLEX’s fairness holders, government officers and administrators with the underwriters of OLAPLEX’s preliminary public providing, the lock-up restrictions will finish with respect to fifteen% of the shares (together with shares underlying vested inventory choices) topic to every lockup settlement if sure share value and different circumstances are met. The circumstances for early launch have now been happy. Accordingly, OLAPLEX expects that roughly 85.4 million shares (together with sure shares underlying vested inventory choices) will grow to be eligible on the market within the public market on the open of buying and selling on November 15, 2021, topic to relevant restrictions below the Securities Act of 1933, as amended. OLAPLEX estimates that of the roughly 85.4 million shares that can grow to be eligible on the market, roughly 79.6 million will probably be held by associates. The lock-up restrictions will proceed to use with respect to all remaining securities topic to the lock-up agreements. Outlook The Company is introducing its outlook for Fiscal Year 2021. For Fiscal 2021:   (Dollars in tens of millions)20212020 Actual% change(primarily based on mid-point)Net Sales$580 – $588 $282+107%Adjusted Net Income*$263 – $268 $131+103%Adjusted EBITDA*$392 – $398 $199+98% *Adjusted Net Income and Adjusted EBITDA are non-GAAP measures. See “Disclosure Regarding Non-GAAP Financial Measures” and the reconciliation tables that accompany this launch for a dialogue and reconciliation of sure non-GAAP monetary measures included on this launch. Webcast and Conference Call Information Olaplex Holdings, Inc. will host a convention name to debate third quarter fiscal 2021 outcomes immediately, November 10, 2021, at 9:00am ET. Those considering taking part within the convention name are invited to dial (833) 711-4979 (participant passcode 6771429). International callers could dial (213) 660-0866. The stay webcast of the convention name will probably be accessible on-line at https://ir.olaplex.com/. A replay of the webcast will stay accessible on the web site for 90 days. About OLAPLEX OLAPLEX is an progressive, science-enabled, technology-driven magnificence firm with a mission to enhance the hair well being of its shoppers. A revolutionary model, OLAPLEX paved the way in which for a brand new class of hair care referred to as “bond-building,” the method of defending, strengthening and rebuilding damaged bonds within the hair throughout and after hair providers. The model’s merchandise have an energetic, patent-protected ingredient that works on a molecular degree to guard and restore hair from harm. OLAPLEX’s award-winning merchandise are bought by a worldwide omni-channel platform serving the skilled, specialty retail, and direct-to-consumer channels. Cautionary Note Regarding Forward-Looking Statements This press launch contains forward-looking statements and knowledge regarding the Company which are primarily based on the beliefs of administration in addition to assumptions made by, and knowledge at present accessible to, the Company.   These forward-looking statements usually might be recognized by means of phrases reminiscent of “could,” “will,” “might,” “ought to,” “intend,” “potential,” “proceed,” “anticipate,” “imagine,” “estimate,” “count on,” “plan,” “goal,” “predict,” “undertaking,” “search” and comparable expressions as they relate to us.   These forward-looking statements deal with varied issues together with: our monetary place and working outcomes; enterprise plans and aims; progress and enlargement alternatives; and bills, working capital and liquidity. These statements replicate administration’s present views with respect to future occasions, usually are not ensures of future efficiency and contain dangers and uncertainties which are troublesome to foretell. Each forward-looking assertion contained on this press launch is topic to dangers and uncertainties that might trigger precise outcomes to vary materially from these expressed or implied by such assertion.   Applicable dangers and uncertainties embrace, amongst others: the Company’s means to execute on its progress methods and enlargement alternatives; elevated competitors inflicting the Company to cut back the costs of its merchandise or to extend considerably its advertising efforts to be able to keep away from shedding market share; the Company’s current and any future indebtedness, together with the Company’s means to adjust to affirmative and unfavourable covenants below its credit score settlement to which it would stay topic to till maturity, and the Company’s means to acquire extra financing on favorable phrases or in any respect; the Company’s dependence on a restricted variety of clients for a good portion of its web gross sales; the Company’s means to successfully market and preserve a optimistic model picture; modifications in client preferences or modifications in demand for haircare merchandise or different merchandise the Company could develop; the Company’s means to precisely forecast client demand for its merchandise; the Company’s means to take care of favorable relationships with suppliers and handle our provide chain, together with acquiring and sustaining transport distribution and uncooked supplies at favorable pricing; the Company’s relationships with and the efficiency of distributors and retailers who promote its merchandise to haircare professionals and different clients; impacts on the Company’s enterprise as a result of sensitivity of its enterprise to unfavorable financial and enterprise circumstances; the Company’s means to develop, manufacture and successfully and profitably market and promote future merchandise; failure of markets to simply accept new product introductions; the Company’s means to draw and retain senior administration and different certified personnel; regulatory modifications and developments affecting the Company’s present and future merchandise; the Company’s means to service its current indebtedness and procure extra capital to finance operations and its progress alternatives; impacts on the Company’s enterprise from political, regulatory, financial, commerce, and different dangers related to working internationally together with volatility in forex change charges, and imposition of tariffs; the Company’s means to determine and preserve mental property safety for its merchandise, in addition to the Company’s means to function its enterprise with out infringing, misappropriating or in any other case violating the mental property rights of others; the impression of fabric value and different inflation and our means to cross on such will increase to clients; the impression of modifications in legal guidelines, laws and administrative coverage, together with people who restrict U.S. tax advantages or impression commerce agreements and tariffs; the result of litigation and governmental proceedings; impacts on the Company’s enterprise from the COVID-19 pandemic; and the opposite dangers recognized below the heading “Risk Factors” within the Prospectus, in addition to the opposite data we file with the SEC.   The Company cautions buyers to not place appreciable reliance on the forward-looking statements contained on this press launch.   You are inspired to learn the Company’s filings with the SEC, accessible at www.sec.gov, for a dialogue of those and different dangers and uncertainties. The forward-looking statements on this press launch converse solely as of the date hereof, and the Company undertakes no obligation to replace or revise any of those statements.   The Company’s enterprise is topic to substantial dangers and uncertainties, together with these referenced above.   Investors, potential buyers, and others ought to give cautious consideration to those dangers and uncertainties. Disclosure Regarding Non-GAAP Financial Measures In addition to the monetary measures introduced on this launch in accordance GAAP, the Company has included sure non-GAAP monetary measures on this launch, together with adjusted EBITDA, adjusted web revenue, adjusted gross revenue, adjusted gross revenue margin, and Adjusted diluted EPS. Management believes these non-GAAP monetary measures, when taken along with the Company’s monetary outcomes introduced in accordance with GAAP, present significant supplemental data relating to the Company’s working efficiency and facilitates inner comparisons of its historic working efficiency on a extra constant foundation by excluding sure objects that might not be indicative of its enterprise, outcomes of operations or outlook. In specific, administration believes that the usage of these non-GAAP measures is useful to buyers as they’re measures utilized by administration in assessing the well being of the Company’s enterprise, figuring out incentive compensation and evaluating its working efficiency, in addition to for inner planning and forecasting functions. The Company defines adjusted EBITDA as web revenue earlier than curiosity, taxes, depreciation and amortization, adjusted for the impression of sure extra non-cash and different objects that administration doesn’t think about in its analysis of ongoing efficiency of the Company’s core operations. These objects embrace IPO and strategic transition prices, non-cash equity-based compensation expense, tax receivable settlement legal responsibility changes and different one-time bills. The Company defines adjusted web revenue as web revenue adjusted for the impression of sure extra non-cash and different objects that administration doesn’t think about in its analysis of ongoing efficiency of the Company’s core operations. These objects embrace amortization of intangible property, IPO and strategic transition prices, non-cash equity-based compensation expense, tax receivable settlement legal responsibility changes and different one-time bills.   The Company defines adjusted diluted EPS as adjusted web revenue divided by totally diluted shares excellent. We calculate adjusted gross revenue as gross revenue, adjusted to exclude: (1) truthful worth stock step-up adjustment amortization and (2) amortization of patented formulations, pertaining to the Acquisition. We calculate adjusted gross revenue margin by dividing adjusted gross revenue by web gross sales. Please seek advice from “Reconciliation of Non-GAAP Financial Measures to GAAP Equivalents” situated within the monetary complement on this launch for a reconciliation of those non-GAAP metrics to their most straight comparable monetary measure acknowledged in accordance with GAAP. This launch contains forward-looking steering for adjusted EBITDA and adjusted web revenue.   The Company will not be capable of present, with out unreasonable effort, a reconciliation of the steering for adjusted EBITDA and adjusted web revenue to probably the most straight comparable GAAP measure as a result of the Company doesn’t at present have adequate information to precisely estimate the variables and particular person changes included in probably the most straight comparable GAAP measure that might be essential for such reconciliations, together with (a) revenue tax associated accruals given at present proposed legislative modifications and different one-time objects, (b) impacts to our Tax Receivable Agreement legal responsibility that might come up from proposed legislative modifications (c) sure skilled charges, and (c) different bills that we don’t imagine are indicative of our ongoing operations. These changes are inherently variable and unsure and rely upon varied components which are past our management and because of this we’re additionally unable to foretell their possible significance. Therefore, as a result of administration can’t estimate on a forward-looking foundation with out unreasonable effort the impression these variables and particular person changes could have on its reported ends in accordance with GAAP, it’s unable to offer a reconciliation of the non-GAAP measures included in its 2021 steering. CONDENSED CONSOLIDATED BALANCE SHEETS (in hundreds, besides shares) (Unaudited)  September 30,2021 December 31,2020Assets   Current Assets:   Cash and money equivalents$121,479  $10,964 Accounts receivable, web of allowance of $6,867 and $1,36259,283  14,377 Inventory69,088  33,596 Other present assets8,182  2,422 Total present assets258,032  61,359 Property and tools, net806  34 Intangible property, net1,054,962  1,092,310 Goodwill168,300  168,300 Deferred taxes6,978  10,830 Investment in nonconsolidated entity4,500  — Total property$1,493,578  $1,332,833     Liabilities and stockholders’ fairness   Current Liabilities:   Accounts payable$14,303  $16,815 Accrued bills and different present liabilities30,894  9,862 Current portion of long-term debt20,112  20,112 Total present liabilities65,309  46,789 Related Party payable pursuant to Tax Receivable Agreement232,893  — Long-term debt742,371  755,371 Total liabilities1,040,573  802,160     Contingencies (Note 14)       Stockholders’ fairness (Notes 1 and 12):   Common inventory, $— par worth per share; 2,000,000,000 shares approved, 648,124,642 and 647,888,387 shares issued and excellent as of September 30, 2021 and December 31, 2020, respectively648  648 Preferred inventory, $0.001 par worth per share; 25,000,000 shares approved and no shares issued and excellent—  — Additional paid-in capital300,884  530,025 Retained earnings151,473  — Total stockholders’ equity453,005  530,673 Total liabilities and stockholders’fairness$1,493,578  $1,332,833    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (quantities in hundreds, besides per share and share information) (Unaudited)  Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2021 2020 2021 2020Net gross sales$161,624   $89,447   $431,867   $189,055 Cost of gross sales:       Cost of product (excluding amortization)32,462   24,569   83,859   79,236 Amortization of patented formulations1,680   2,102   6,399   4,567 Total value of sales34,142   26,671   90,258   83,803 Gross profit127,482   62,776   341,609   105,252 Operating bills:       Selling, common, and administrative30,257   8,215   75,323   23,291 Amortization of different intangible assets10,182   10,182   30,547   29,643 Acquisition prices—   488   —   16,499 Total working expenses40,439   18,885   105,870   69,433 Operating income87,043   43,891   235,739   35,819 Interest (expense)(14,987)  (9,794)  (46,052)  (28,577)Other (expense) revenue, web(213)  (29)  (417)  (155)Income earlier than provision for revenue taxes71,843   34,068   189,270   7,087 Income tax provision15,252   5,753   37,797   1,197 Net revenue$56,591   $28,315   $151,473   $5,890 Comprehensive revenue$56,591   $28,315   $151,473   $5,890 Net revenue per share:       Basic$0.09   $0.04   $0.23   $0.01 Diluted$0.08   $0.04   $0.22   $0.01 Weighted common widespread shares excellent:       Basic648,124,642   647,888,387   648,082,081   631,143,589 Diluted690,711,782   653,036,893   689,108,272   632,877,840                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (quantities in hundreds)(Unaudited)  Nine Months EndedSeptember 30, 2021 2020Cash flows from working actions   Net revenue$151,473   $5,890 Adjustments to reconcile web revenue to web money supplied by working actions:(21,148)  78,619 Net money supplied by working activities130,325   84,509 Net money utilized in investing actions(5,359)  (1,381,640)Net money (utilized in) supplied by financing actions(14,451)  1,418,716 Net enhance in money and money equivalents110,515   121,585 Cash and money equivalents – starting of period10,964   — Cash and money equivalents – finish of interval$121,479   $121,585  The following tables current a reconciliation of web revenue and gross revenue, as probably the most straight comparable monetary measure acknowledged in accordance with U.S. GAAP, to adjusted EBITDA, adjusted EBITDA margin, adjusted gross revenue, adjusted gross revenue margin, adjusted web revenue and adjusted web revenue per share for every of the durations introduced.  For the Three Months Ended September 30,  For the Nine Months EndedSeptember 30, (in hundreds)2021 2020 2021 2020Reconciliation of Net Income to Adjusted EBITDA       Net revenue$56,591  $28,315  $151,473  $5,890 Interest expense14,987  9,794  46,052  28,577 Income tax provision15,252  5,753  37,797  1,197 Depreciation and amortization of intangible assets11,949  12,284  37,033  34,210 Acquisition transaction prices and financing charges (1)—  1,015  —  18,122 Costs incurred for LIQWD Matters (2)—  —  14,250  — Inventory truthful worth adjustment (3)—  7,744  —  44,519 Share-based compensation1,945  516  3,119  937 Non-capitalizable IPO and strategic transition prices (4)6,118  —  8,382  — Adjusted EBITDA$106,842  $65,421  $298,106  $133,452 Adjusted EBITDA margin66.1% 73.1% 69.0% 70.6%              For the Three Months Ended September 30, For the Nine Months Ended September 30, (in hundreds)2021 2020 2021 2020Reconciliation of Gross Profit to Adjusted Gross Profit       Gross revenue$127,482  $62,776  $341,609  $105,252 Inventory truthful worth adjustment (3)—  7,744  —  44,519 Amortization of patented formulations1,680  2,102  6,399  4,567 Adjusted gross revenue$129,162  $72,622  $348,008  $154,338 Adjusted gross revenue margin79.9% 81.2% 80.6% 81.6%  For the Three Months Ended September 30,  For the Nine MonthsEnded September 30, (in hundreds)2021 2020 2021 2020Reconciliation of Net Income to Adjusted Net Income       Net revenue$56,591   $28,315   $151,473   $5,890 Amortization of intangible assets11,862   12,284   36,946   34,210 Acquisition transaction prices and financing charges (1)—   1,015   —   18,122 Costs incurred for LIQWD Matters (2)—   —   14,250   — Inventory truthful worth adjustment (3)—   7,744   —   44,519 Share-based compensation1,945   516   3,119   937 Non-capitalizable IPO and strategic transition prices (4)6,118   —   8,382   — Tax impact of changes (5)(2,082)  (4,094)  (9,913)  (18,570)Adjusted web revenue$74,434   $45,780   $204,257   $85,108 Adjusted web revenue per share:       Basic$0.11   $0.07   $0.32   $0.13 Diluted$0.11   $0.07   $0.30   $0.13  (1)Includes acquisition prices associated to the Acquisition of the Olaplex enterprise and dividend financing prices.(2)Includes prices incurred associated to the decision of the LIQWD Matters of $14.3 million as mentioned in Note 13 to the unaudited condensed consolidated interim monetary statements included elsewhere within the Prospectus.(3)Includes the non-cash, non-recurring truthful worth stock step-up adjustment amortization as a part of the acquisition accounting on the Acquisition Date, using the comparative gross sales methodology in accordance with ASC 820-10-55-21.(4)Represents non-capitalizable skilled charges and government severance incurred in reference to the IPO and the Company’s public firm transition.(5)The tax impact of non-GAAP changes is calculated by making use of the relevant statutory tax charge by jurisdiction to the non-GAAP changes listed above, considering the estimated complete tax impression of the changes.   Contacts: ICR, Inc. For Investors:Allison MalkinAnnie Erner For Media:Alecia PulmanBrittany Fraser [email protected]  


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