OLAPLEX Reports Second Quarter 2022 Results

Net Sales grew 38.6% within the second quarter 2022 Company re-affirms fiscal yr 2022 steering SANTA BARBARA, Calif., Aug. 09, 2022 (GLOBE NEWSWIRE) — Olaplex Holdings, Inc. (NASDAQ: OLPX) (“OLAPLEX” or the “Company”), in the present day introduced monetary outcomes for the second quarter and 6 months ended June 30, 2022. For the second quarter of 2022 in comparison with the second quarter 2021: Net gross sales elevated 38.6% to $210.9 million; Net gross sales elevated 41.3% within the United States and 35.2% internationallyBy channel: Professional grew 32.7% to $105.5 million;Specialty Retail elevated 68.5% to $64.2 million;Direct-To-Consumer rose 19.3% to $41.2 hundreds of thousands; Net earnings elevated 77.7% and adjusted internet earnings elevated 35.5%;Diluted EPS have been $0.13 for the second quarter 2022, as in comparison with $0.08 for the second quarter 2021;Adjusted Diluted EPS have been $0.14 for the second quarter 2022, as in comparison with $0.11 for the second quarter 2021 JuE Wong, OLAPLEX’s President and Chief Executive Officer, commented: “We are happy to announce one other glorious quarter for OLAPLEX, as we proceed to ship trade prime tier internet gross sales development and revenue margins. Building on the robust momentum from the primary half of the yr, we’re re-affirming our fiscal yr 2022 steering ranges. This displays the profitable execution of our technique as we disrupt the status haircare market with science-based, patent-protected merchandise which are designed to repair actual hair issues from first use. We proceed to see energy in status magnificence and the status hair care class as we consider shoppers are prioritizing their very own wellbeing – even throughout unsure occasions. We consider that our aggressive benefits, management in a fast-growing, international class, and important white area development alternatives have us properly positioned for future success.” Second Quarter Highlights (Dollars in $000’s, besides per share information)      Quarter to Date Q2 2022 Q2 2021 % ChangeNet Sales $210,903  $152,124  38.6%Gross Profit $156,430  $120,532  29.8%Gross Profit Margin  74.2%  79.2%  Adjusted Gross Profit $158,610  $122,800  29.2%Adjusted Gross Profit Margin  75.2%  80.7%  SG&A $26,111  $33,786  (22.7)%Adjusted SG&A $24,384  $17,162  42.1%Net Income $87,715  $49,351  77.7%Adjusted Net Income $98,754  $72,862  35.5%Adjusted EBITDA $133,079  $105,481  26.2%Adjusted EBITDA Margin  63.1%  69.3%  Diluted EPS $0.13  $0.08  62.5%Adjusted Diluted EPS $0.14  $0.11  27.3%Weighted Average Diluted Shares Outstanding  691,365,072   656,745,557    Six Months Highlights (Dollars in $000’s, besides per share information)      Year to Date Six Months Year to Date 2022 Six Months Yearto Date 2021 % ChangeNet Sales $397,099  $270,243  46.9%Gross Profit $297,635  $214,127  39.0%Gross Profit Margin  75.0%  79.2%  Adjusted Gross Profit $305,908  $218,846  39.8%Adjusted Gross Profit Margin  77.0%  81.0%  SG&A $48,425  $45,066  7.5%Adjusted SG&A $45,002  $27,375  64.4%Net Income $149,676  $94,882  57.7%Adjusted Net Income $190,179  $129,825  46.5%Adjusted EBITDA $259,457  $191,266  35.7%Adjusted EBITDA Margin  65.3%  70.8%  Diluted EPS $0.22  $0.14  57.1%Adjusted Diluted EPS $0.27  $0.19  42.1%Weighted Average Diluted Shares Outstanding  692,985,088   683,430,562    Adjusted gross revenue, adjusted gross revenue margin, adjusted SG&A, adjusted internet earnings, adjusted diluted EPS, adjusted EBITDA and adjusted EBITDA margin are measures that aren’t calculated or introduced in accordance with typically accepted accounting rules 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 immediately comparable GAAP measures, please see “Disclosure Regarding Non-GAAP Measures” and the reconciliation tables that accompany this launch. Balance Sheet As of June 30, 2022, the Company had $198.0 million of money and money equivalents, in comparison with $186.4 million as of December 31, 2021. Inventory on the finish of the second quarter 2022 was $140.3 million, in comparison with $98.4 million on the finish of December 2021. The Company is happy with the extent and composition of its stock and believes it’s properly positioned to satisfy demand. Long-term debt, internet of present portion was $657.0 million as of June 30, 2022, in comparison with $738.1 million as of the tip of December 2021. Fiscal Year 2022 Guidance The Company re-affirmed its steering for fiscal yr 2022 on internet gross sales, adjusted Net Income and adjusted EBITDA, as set forth beneath. For Fiscal 2022:   (Dollars in hundreds of thousands)20222021 Actual% change(primarily based on mid-point)Net Sales$796 – $826$598+36%Adjusted Net Income*$363 – $379$276+35%Adjusted EBITDA*$504 – $526$409+26% *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 The firm plans to host an investor convention name and webcast to assessment second quarter 2022 monetary outcomes at 9:00am ET/6:00am PT on August 9, 2022. The webcast could be accessed at https://ir.olaplex.com/events-presentations. After registering, an electronic mail might be despatched together with dial-in particulars and a novel convention name pin required to hitch the dwell name. A replay of the webcast will stay out there on the web site for 90 days. About OLAPLEX OLAPLEX is an revolutionary, 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 lively, patent-protected ingredient that works on a molecular degree to guard and restore hair from harm. OLAPLEX’s award-winning merchandise are offered by way of an increasing omnichannel mannequin serving the skilled, specialty retail, and direct-to-consumer channels. Cautionary Note Regarding Forward-Looking Statements This press launch consists of forward-looking statements and knowledge referring to the Company which are primarily based on the beliefs of administration in addition to assumptions made by, and knowledge at present out there to, the Company. These forward-looking statements typically could be recognized by means of phrases resembling “could,” “will,” “might,” “ought to,” “intend,” “potential,” “proceed,” “anticipate,” “consider,” “estimate,” “anticipate,” “plan,” “goal,” “predict,” “undertaking,” “search” and comparable expressions as they relate to us. These forward-looking statements tackle varied issues together with: the Company’s monetary place and working outcomes, together with monetary steering for fiscal yr 2022; enterprise plans and aims; development and growth alternatives; the expansion and resiliency of the worldwide premium hair care trade; new product innovation; future gross sales development and margins; shopper behaviors; stock ranges; and anticipated curiosity expense financial savings. These statements replicate administration’s present views with respect to future occasions, should 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 would trigger precise outcomes to vary materially from these expressed or implied by such assertion. Applicable dangers and uncertainties embrace, amongst others: the Company’s capability to execute on its development methods and growth alternatives; elevated competitors inflicting the Company to scale back the costs of its merchandise or to extend considerably its advertising and marketing efforts in an effort to keep away from dropping market share; the Company’s current and any future indebtedness, together with the Company’s capability to adjust to affirmative and adverse covenants below its credit score settlement to which it would stay topic to till maturity, and the Company’s capability 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 internet gross sales; the Company’s capability to successfully market and preserve a constructive model picture and increase its model consciousness; the Company’s capability to draw new clients and encourage shopper spending throughout its product portfolio; adjustments in shopper preferences or adjustments in demand for hair care merchandise or different merchandise the Company could develop; the Company’s capability to precisely forecast shopper demand for its merchandise; the Company’s capability to keep up 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 hair care professionals and different clients; the influence of fabric value will increase and different inflation and our capability to move on such will increase to clients; impacts on the Company’s enterprise as a result of sensitivity of its enterprise to unfavorable financial and enterprise circumstances; the Company’s capability to develop, manufacture and successfully and profitably market and promote future merchandise; failure of markets to just accept new product introductions; the Company’s capability to draw and retain senior administration and different certified personnel; regulatory adjustments and developments affecting the Company’s present and future merchandise; the Company’s capability to service its current indebtedness and procure extra capital to finance operations and its development alternatives; impacts on the Company’s enterprise from political, regulatory, financial, commerce, and different dangers related to working internationally together with volatility in foreign money alternate charges, and imposition of tariffs; the Company’s capability to ascertain and preserve mental property safety for its merchandise, in addition to the Company’s capability to function its enterprise with out infringing, misappropriating or in any other case violating the mental property rights of others; the influence of adjustments in legal guidelines, laws and administrative coverage, together with people who restrict U.S. tax advantages or influence commerce agreements and tariffs; the end 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” in Company’s Annual Report on Form 10-Okay for the yr ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2022, in addition to the opposite data the Company information 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, out there 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, besides as required by relevant legislation. 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, together with adjusted EBITDA, adjusted EBITDA margin, adjusted internet earnings, adjusted gross revenue, adjusted gross revenue margin, adjusted SG&A 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 concerning the Company’s working efficiency and facilitate inside 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 explicit, administration believes that the usage of these non-GAAP measures could also be 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 inside planning and forecasting functions. The Company calculates adjusted EBITDA as internet earnings, adjusted to exclude: (1) curiosity expense, internet; (2) earnings tax provision; (3) depreciation and amortization; (4) share-based compensation expense; (5) non-ordinary stock changes; (6) non-ordinary prices and charges; (7) non-ordinary authorized prices; (8) non-capitalizable IPO and strategic transition prices; and (9) as relevant Tax Receivable Agreement legal responsibility changes. The Company calculates adjusted EBITDA margin by dividing adjusted EBITDA by internet gross sales. The Company calculates adjusted internet earnings as internet earnings, adjusted to exclude: (1) amortization of intangible belongings (excluding software program); (2) non-ordinary prices and charges; (3) non-ordinary authorized prices; (4) non-ordinary stock changes; (5) share-based compensation expense; (6) non-capitalizable IPO and strategic transition prices; (7) Tax Receivable Agreement legal responsibility adjustment; and (8) tax impact of non-GAAP changes. The Company calculates adjusted primary and diluted EPS as adjusted internet earnings divided by weighted common primary and diluted shares excellent respectively. The Company calculates adjusted gross revenue as gross revenue, adjusted to exclude: (1) non-ordinary stock changes and (2) amortization of patented formulations, pertaining to the acquisition of the Olaplex, LLC enterprise in 2020 by sure funding funds affiliated with Advent International Corporation and different buyers (the “Acquisition”). The Company calculates adjusted gross revenue margin by dividing adjusted gross revenue by internet gross sales. The Company calculates adjusted SG&A as SG&A, adjusted to exclude: (1) share-based compensation expense; (2) non-ordinary authorized prices, (3) non-capitalizable IPO and strategic transition prices and (4) non-ordinary prices and charges. Please consult with “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 immediately comparable monetary measure said in accordance with GAAP. This launch consists of forward-looking steering for adjusted EBITDA and adjusted internet earnings. The Company will not be capable of present, with out unreasonable effort, a reconciliation of the steering for adjusted EBITDA and adjusted internet earnings to probably the most immediately 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 immediately comparable GAAP measure that may be needed for such reconciliations, together with (a) earnings tax associated accruals given at present proposed legislative adjustments and different one-time objects, (b) impacts to the Company’s Tax Receivable Agreement legal responsibility that may come up from proposed legislative adjustments (c) prices associated to potential debt or fairness transactions, and (d) different non-recurring bills that can’t moderately be estimated upfront. These changes are inherently variable and unsure and rely upon varied elements which are past the Company’s management and in consequence it is usually unable to foretell their possible significance. Therefore, as a result of administration can not estimate on a forward-looking foundation with out unreasonable effort the influence these variables and particular person changes may have on its reported ends in accordance with GAAP, it’s unable to offer a reconciliation of the non-GAAP measures included in its fiscal 2022 steering. CONDENSED CONSOLIDATED BALANCE SHEETS (in hundreds, besides shares) (Unaudited)  June 30,2022 December 31,2021Assets   Current Assets:   Cash and money equivalents$198,028 $186,388Accounts receivable, internet of allowance of $17,443 and $8,231 81,345  40,779Inventory 140,316  98,399Other present belongings 5,765  9,621Total present belongings 425,454  335,187Property and gear, internet 670  747Intangible belongings, internet 1,019,120  1,043,344Goodwill 168,300  168,300Deferred taxes 11,881  8,344Other belongings 6,234  4,500Total belongings$1,631,659 $1,560,422    Liabilities and stockholders’ fairness   Current Liabilities:   Accounts payable$20,699 $19,167Accrued bills and different present liabilities 20,546  17,332Accrued gross sales and earnings taxes 18,199  12,144Current portion of long-term debt 6,750  20,112Current portion of Tax Receivable Agreement 20,786  4,157Total present liabilities 86,980  72,912Related Party payable pursuant to Tax Receivable Agreement 208,493  225,122Long-term debt 656,989  738,090Total liabilities 952,462  1,036,124    Contingencies       Stockholders’ fairness   Common inventory, $0.001 par worth per share; 2,000,000,000 shares licensed, 649,087,823 and 648,794,041 shares issued and excellent as of June 30, 2022 and December 31, 2021, respectively 649  648Preferred inventory, $0.001 par worth per share; 25,000,000 shares licensed and no shares issued and excellent —  —Additional paid-in capital 308,088  302,866Retained earnings 370,460  220,784Total stockholders’ fairness 679,197  524,298Total liabilities and stockholders’ fairness$1,631,659 $1,560,422 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (quantities in hundreds, besides per share and share information) (Unaudited)  Three Months EndedJune 30, Six Months EndedJune 30,  2022   2021   2022   2021 Net gross sales$210,903  $152,124  $397,099  $270,243 Cost of gross sales:       Cost of product (excluding amortization) 52,293   29,324   95,515   51,397 Amortization of patented formulations 2,180   2,268   3,949   4,719 Total value of gross sales 54,473   31,592   99,464   56,116 Gross revenue 156,430   120,532   297,635   214,127 Operating bills:       Selling, common, and administrative 26,111   33,786   48,425   45,066 Amortization of different intangible belongings 10,295   10,183   20,561   20,365 Total working bills 36,406   43,969   68,986   65,431 Operating earnings 120,024   76,563   228,649   148,696 Interest expense (8,694)  (15,563)  (20,154)  (31,065)Other expense, internet       Loss on extinguishment of debt —   —   (18,803)  — Other expense (1,224)  (157)  (1,601)  (204)Total different expense, internet (1,224)  (157)  (20,404)  (204)Income earlier than provision for earnings taxes 110,106   60,843   188,091   117,427 Income tax provision 22,391   11,492   38,415   22,545 Net earnings$87,715  $49,351  $149,676  $94,882 Comprehensive earnings$87,715  $49,351  $149,676  $94,882 Net earnings per share:       Basic$0.14  $0.08  $0.23  $0.15 Diluted$0.13  $0.08  $0.22  $0.14 Weighted common widespread shares excellent:       Basic 648,973,952   648,124,642   648,894,417   648,066,435 Diluted 691,365,072   656,745,557   692,985,088   683,430,562  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (quantities in hundreds)(Unaudited)  Six Months EndedJune 30,  2022   2021 Cash flows from working actions   Net earnings$149,676  $94,882 Adjustments to reconcile internet earnings to internet money supplied by working actions: (21,623)  (19,929)Net money supplied by working actions 128,053   74,953 Net money utilized in investing actions (945)  (64)Net money utilized in financing actions (115,468)  (9,423)Net improve in money and money equivalents 11,640   65,466 Cash and money equivalents – starting of interval 186,388   10,964 Cash and money equivalents – finish of interval$198,028  $76,430          The following tables current a reconciliation of internet earnings, SG&A and gross revenue, as probably the most immediately comparable monetary measure said in accordance with U.S. GAAP, to adjusted EBITDA, adjusted EBITDA margin, adjusted gross revenue, adjusted gross revenue margin, adjusted SG&A, adjusted internet earnings and adjusted internet earnings per share for every of the durations introduced.  For the Three Months Ended June 30, For the Six Months Ended June 30,(in hundreds) 2022   2021   2022   2021 Reconciliation of Net Income to Adjusted EBITDA       Net earnings$87,715  $49,351  $149,676  $94,882 Income tax provision 22,391   11,492   38,415   22,545 Depreciation and amortization of intangible belongings 12,552   12,451   24,662   25,083 Interest expense 8,694   15,563   20,154   31,065 Loss on extinguishment of debt(1) —   —   18,803   — Non-recurring litigation prices(3) —   14,250   —   14,250 Inventory write off and disposal(2) —   —   4,324   — Share-based compensation 1,727   547   3,423   1,174 Non-capitalizable IPO and strategic transition prices (4) —   1,827   —   2,267 Adjusted EBITDA$133,079  $105,481  $259,457  $191,266 Adjusted EBITDA margin 63.1%  69.3%  65.3%  70.8%  For the Three Months Ended June 30, For the Six Months Ended June 30,(in hundreds) 2022   2021   2022   2021 Reconciliation of Gross Profit to Adjusted Gross Profit       Gross revenue$156,430  $120,532  $297,635  $214,127 Inventory write off and disposal(2) —   —   4,324   — Amortization of patented formulations 2,180   2,268   3,949   4,719 Adjusted gross revenue$158,610  $122,800  $305,908  $218,846 Adjusted gross revenue margin 75.2%  80.7%  77.0%  81.0%   For the Three Months Ended June 30, For the Six Months Ended June 30,(in hundreds)  2022   2021   2022   2021 Reconciliation of SG&A to Adjusted SG&A        SG&A $26,111  $33,786  $48,425  $45,066 Share-based compensation  (1,727)  (547)  (3,423)  (1,174)Non-recurring litigation prices(3)  —   (14,250)  —   (14,250)Non-capitalizable IPO and strategic transition prices (4)  —   (1,827)  —   (2,267)Adjusted SG&A $24,384  $17,162  $45,002  $27,375   For the Three Months Ended June 30, For the Six Months Ended June 30,(in hundreds, besides per share information) 2022   2021   2022   2021 Reconciliation of Net Income to Adjusted Net Income       Net earnings$87,715  $49,351  $149,676  $94,882 Amortization of intangible belongings (excluding software program) 12,363   12,451   24,314   25,083 Loss on extinguishment of debt(1) —   —   18,803   — Non-recurring litigation prices(3) —   14,250   —   14,250 Inventory write off and disposal(2) —   —   4,324   — Share-based compensation 1,727   547   3,423   1,174 Non-capitalizable IPO and strategic transition prices (4) —   1,827   —   2,267 Tax impact of changes (3,051)  (5,564)  (10,361)  (7,831)Adjusted internet earnings$98,754  $72,862  $190,179  $129,825 Adjusted internet earnings per share:       Basic$0.15  $0.11  $0.29  $0.20 Diluted$0.14  $0.11  $0.27  $0.19  (1) On February 23, 2022, the Company refinanced its current secured credit score facility with a brand new credit score settlement comprised of a $675 million senior secured time period mortgage facility and a $150 million senior secured revolving credit score facility. This refinancing resulted in recognition of loss on extinguishment of debt of $18.8 million which is comprised of $11.0 million in deferred financing payment write off, and $7.8 million of prepayment charges for the beforehand current credit score facility. Loss on extinguishment of debt is included as non-ordinary prices and charges within the reconciliations above. (2) The stock write-off and disposal prices relate to unused inventory of a product that the Company reformulated in June 2021 on account of regulation adjustments within the E.U. In the curiosity of getting a single formulation on the market worldwide, the Company reformulated on a world foundation and is now disposing of unused inventory. (3) Represents prices incurred associated to the fee to LIQWD, Inc., a predecessor entity to the Company considerably all of whose belongings and liabilities have been bought as a part of the Acquisition (“LIQWD”), of sure quantities due in reference to the decision of sure litigation and contingency issues involving LIQWD, which quantities have been required to be paid pursuant to the acquisition settlement for the Acquisition. (4) Represents non-capitalizable skilled charges and govt severance incurred in reference to the Company’s preliminary public providing and the Company’s public firm transition. Contacts: ICR, Inc. For Investors:Allison MalkinAnnie Erner For Media:Alecia PulmanBrittany Fraser [email protected] 203.682.8220


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