Brilliant Earth Group, Inc. (“Brilliant Earth” or the “Company”)
(Nasdaq: BRLT), an innovative, digital-first jewelry company and
global leader in ethically sourced fine jewelry, today announced
financial results for the three and six months ended June 30, 2022.
Second Quarter 2022 Highlights (quarterly
period ended June 30, 2022):
- Net sales were
$108.8 million, a 17.8% increase over the prior
year, with strong omnichannel performance across
the Company's products.
- Gross margin expanded by 460
basis points to a record 53.1% for the second quarter,
driven by continued strong brand resonance, performance of the
Company's price optimization engine and procurement
efficiencies.
- Generated strong
profitability:
- Net income was
$3.8 million for the second quarter; and
- Adjusted EBITDA
was $9.6 million for the second quarter.
- Continued omnichannel
leadership: Since the end of the first quarter, Brilliant
Earth has opened 6 new showrooms. These new showrooms are located
in the metro areas of Bethesda, Columbus, Houston, Minneapolis,
Cleveland and Detroit.
Beth Gerstein, Brilliant Earth’s Co-Founder and
CEO, commented, “We delivered a strong second quarter, reflecting
the increasing awareness and resonance of the Brilliant Earth
brand, the disciplined execution of our omnichannel growth strategy
and the advantages of our asset-light, agile and data-driven
business model. The period was highlighted by an 18% increase in
sales, a 460 basis point expansion in gross margin with adjusted
EBITDA margin of 9%. We saw strength from the introduction of
compelling, exclusive product assortments. We also continued to
expand our omnichannel reach with the opening of our 21st showroom
and ongoing enhancements to our industry leading digital
experience."
Gerstein continued, "We remain excited about our
business outlook, as we begin the second half of the year, which is
reflected in our reaffirmation of our fiscal year guidance. With a
proven track record over 17 years and significant opportunities for
growth, we believe we are in a great position to extend our
industry leadership as the jeweler for the next generation consumer
in the near and long term.”
Second Quarter 2022 Financial
Highlights
- Net sales increased
17.8% to $108.8 million compared to $92.3 million in the
second quarter of 2021, with strength across the Company’s products
leading to a 24.9% increase in Total Orders.
- Gross profit was $57.8 million,
or a 53.1% gross profit margin, compared to $44.8 million, or
a 48.5% gross profit margin in the second quarter of 2021.
- Net income was $3.8 million, compared
to net income of $8.5 million in the second quarter of fiscal
2021.
- Adjusted net income was $6.0 million
(3).
- Adjusted EBITDA
was $9.6 million, compared to $14.5 million in the second quarter
of 2021 (3).
Second Quarter Results
|
|
Q2 2022 |
|
Q2 2021 |
|
% Change |
Total Orders |
|
35,366 |
|
28,323 |
|
24.9% |
AOV |
$ |
3,077 |
$ |
3,261 |
|
(5.6)% |
($ in millions, except per share amounts) |
|
|
|
|
|
|
Net Sales |
$ |
108.8 |
$ |
92.3 |
|
17.8% |
Gross Margin |
|
53.1% |
|
48.5% |
|
|
Net income allocable to Brilliant Earth Group, Inc. (1) |
$ |
0.4 |
|
nm* |
|
nm* |
Net income, as reported |
$ |
3.8 |
$ |
8.5 |
|
(55.8)% |
Net income margin |
|
3.4% |
|
9.2% |
|
|
Adjusted net income (3) |
$ |
6.0 |
|
nc* |
|
nc* |
GAAP Diluted EPS (2) |
$ |
0.03 |
|
nm* |
|
nm* |
Adjusted Diluted EPS (3) |
$ |
0.06 |
|
nc* |
|
nc* |
Adjusted EBITDA (3) |
$ |
9.6 |
$ |
14.5 |
|
(33.6)% |
Adjusted EBITDA margin (3) |
|
8.8% |
|
15.7% |
|
|
*nc = not calculated; nm = not meaningful |
(1) |
Represents net income allocable to Brilliant Earth Group, Inc.
during the second quarter of 2022 |
(2) |
Represents GAAP Diluted EPS for the period of April 1 to June 30,
2022 |
(3) |
Adjusted net income, Adjusted Diluted EPS, Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP financial measures. See
"Disclosure Regarding Non-GAAP Financial Measures and Key Metrics"
for additional information on non-GAAP financial measures and a
reconciliation to the most comparable GAAP measures |
Six Month 2022 Highlights
- Net sales increased 28.1% to $208.8 million in the six months
ended June 30, 2022 compared to $163.0 million in the first six
months of 2021, with strength across the Company’s product lines
which led to a 35.8% increase in Total Orders.
- Gross profit of $107.9 million, or a 51.7% gross profit margin,
compared to $77.1 million, or a 47.3% gross profit margin, in the
2021 six-month period.
- Net income totaled $7.1 million, compared to $10.9 million in
the 2021 six-month period
- Adjusted net income was $10.7 million (3).
- Adjusted EBITDA was $18.0 million, compared to $21.0 million of
Adjusted EBITDA in the first six months of 2021 (3).
Six Month Results
|
|
YTD June 2022 |
|
YTD June 2021 |
|
% Change |
Total Orders |
|
67,738 |
|
49,878 |
|
35.8% |
AOV |
$ |
3,083 |
$ |
3,269 |
|
(5.7)% |
($ in millions, except per share amounts) |
|
|
|
|
|
|
Net Sales |
$ |
208.8 |
$ |
163.0 |
|
28.1% |
Gross Margin |
|
51.7% |
|
47.3% |
|
|
Net income allocable to Brilliant Earth Group, Inc. (1) |
$ |
0.8 |
|
nm* |
|
nm* |
Net income, as reported |
$ |
7.1 |
$ |
10.9 |
|
(34.6)% |
Net income margin |
|
3.4% |
|
6.7% |
|
|
Adjusted net income (3) |
$ |
10.7 |
|
nc* |
|
nc* |
GAAP Diluted EPS (2) |
$ |
0.06 |
|
nm* |
|
nm* |
Adjusted Diluted EPS (3) |
$ |
0.11 |
|
nc* |
|
nc* |
Adjusted EBITDA (3) |
$ |
18.0 |
$ |
21.0 |
|
(14.3)% |
Adjusted EBITDA margin (3) |
|
8.6% |
|
12.9% |
|
|
*nc = not calculated; nm = not meaningful |
(1) |
Represents net income allocable to Brilliant Earth Group, Inc.
during the year ended June 30, 2022 |
(2) |
Represents GAAP Diluted EPS for the period of January 1 to June 30,
2022 |
(3) |
Adjusted net income, Adjusted Diluted EPS, Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP financial measures. See
"Disclosure Regarding Non-GAAP Financial Measures and Key Metrics"
for additional information on non-GAAP financial measures and a
reconciliation to the most comparable GAAP measures |
Reiterates Fiscal 2022 Outlook
|
Net sales |
$450 million - $470 million |
|
Adjusted EBITDA |
$30 million - $40 million |
Webcast and Conference Call
Information
Brilliant Earth will host a conference call and
webcast to discuss second quarter results today, August 11,
2022, at 5:00 p.m. ET. The webcast and accompanying slide
presentation can be accessed at
https://investors.brilliantearth.com. Those interested in
participating in the conference call are invited to dial (888)
708-0131 (participant passcode 6973407). International callers may
dial (929) 517-9008. A replay of the webcast will remain available
on the website for 90 days.
About Brilliant Earth
Brilliant Earth is a digitally native, omnichannel
fine jewelry company and a global leader in ethically sourced fine
jewelry. Led by our co-founders Beth Gerstein and Eric Grossberg,
the Company’s mission since its founding in 2005 has been to create
a more transparent, sustainable, and compassionate jewelry
industry. Headquartered in San Francisco, CA and Denver, CO,
Brilliant Earth has 21 showrooms and has served customers in over
50 countries worldwide.
Disclosure Regarding Non-GAAP Financial
Measures and Key Metrics
In addition to the financial measures presented in
this release in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP"), the Company has included certain non-GAAP
financial measures in this release, including Adjusted EBITDA,
Adjusted Net income, Adjusted Diluted EPS and Adjusted EBITDA
margin. These non-GAAP financial measures provide users of our
financial information with useful information in evaluating our
operating performance and exclude certain items from net income
that may vary substantially in frequency and magnitude from period
to period.
We define EBITDA as net income (loss) before
interest, taxes, depreciation and amortization. We define Adjusted
EBITDA as net income (loss) before interest, income taxes,
depreciation, amortization of cloud-based software implementation
costs, adjusted for the impact of certain additional non-cash and
other items that we do not consider in our evaluation of ongoing
performance of our core operations. These items include showroom
pre-opening expense, equity-based compensation expense, change in
fair value of warrant liability, costs to fund the Brilliant Earth
Foundation and transaction costs and other expenses. We define
Adjusted EBITDA margin as Adjusted EBITDA calculated as a
percentage of net sales. We believe that Adjusted EBITDA and
Adjusted EBITDA margin, which eliminate the impact of certain
expenses that we do not believe reflect our underlying business
performance, provide useful information to investors to assess the
performance of our business.
We define Adjusted Net income as net income
adjusted for the impact of certain additional non-cash and other
items that we do not consider in our evaluation of ongoing
performance of our core operations. These items include showroom
pre-opening expense, equity-based compensation expense, change in
fair value of warrant liability, costs to fund the Brilliant Earth
Foundation and transaction costs and other expenses. We define
Adjusted Diluted EPS as Adjusted Net income, divided by the diluted
weighted average shares of common stock outstanding. The diluted
weighted average shares of common stock outstanding is derived from
the historical diluted weighted average shares of common stock
assuming such shares were outstanding for the entirety of the
period presented. We believe Adjusted Net income and Adjusted
diluted Earnings Per Share, which eliminate the impact of certain
expenses that we do not believe reflect our underlying business
performance, provide useful information to investors to assess the
performance of our business.
Please refer to “GAAP to Non-GAAP Reconciliations”
located in the financial supplement in this release for a
reconciliation of GAAP to non-GAAP financial information.
This release includes forward-looking guidance for
certain non-GAAP financial measures, including Adjusted EBITDA.
These measures will differ from net income (loss), determined in
accordance with GAAP, in ways similar to those described in the
reconciliations at the end of this release. We are not able to
provide, without unreasonable effort, guidance for net income
(loss), determined in accordance with GAAP, or a reconciliation of
guidance for Adjusted EBITDA to the most directly comparable GAAP
measure because the Company is not able to predict with reasonable
certainty the amount or nature of all items that will be included
in net income (loss).
This press release also contains certain key
business metrics which are used to evaluate our business and growth
trends, establish budgets, measure the effectiveness of our sales
and marketing efforts, and assess operational efficiencies. We
define total orders as the total number of customer orders
delivered less total orders returned in a given period (excluding
those repair, resize, and other orders which have no revenue). We
view total orders as a key indicator of the velocity of our
business and an indication of the desirability of our products to
our customers. Total orders, together with AOV, is an indicator of
the net sales we expect to recognize in a given period. Total
orders may fluctuate based on the number of visitors to our website
and showrooms, and our ability to convert these visitors to
customers. We believe that total orders is a measure that is useful
to investors and management in understanding our ongoing operations
and in an analysis of ongoing operating trends. We define average
order value, or AOV, as net sales in a given period divided by
total orders in that period. We believe that AOV is a measure that
is useful to investors and management in understanding our ongoing
operations and in an analysis of ongoing operating trends. AOV
varies depending on the product type and number of items per order.
AOV may also fluctuate as we expand into and increase our presence
in additional product categories and price points, and open
additional showrooms.
Forward-Looking Statements
This press release contains forward-looking
statements. All statements other than statements of historical
facts contained in this release may be forward-looking statements.
Forward-looking statements in this press release include but are
not limited to statements about our future results of operations
and financial position, business strategy, plans and objectives of
management for future operations, including, but not limited to,
among others, other statements regarding expected growth, future
capital expenditures, and debt service obligations. In some cases,
you can identify forward-looking statements by words such as
"anticipate," "believe," "contemplates," "continues," "could,"
"estimate," "evolve," "expect," "intend," "may," "plan,"
“potential,” "predicts," "project," "seek," "should," "strategy,"
"targets," "will, " or "would," or the negative of these terms or
other similar expressions. Accordingly, we caution you that any
such forward-looking statements are not guarantees of future
performance and are subject to risks, assumptions, and
uncertainties that are difficult to predict.
We have based these forward-looking statements
largely on our current expectations and projections about future
events and trends that we believe may affect our financial
condition, results of operations, business strategy, short term and
long-term business operations and objectives, and financial needs.
Although we believe that the expectations reflected in these
forward-looking statements are reasonable as of the date made,
actual results may prove to be materially different from the
results expressed or implied by the forward-looking statements.
These forward-looking statements are subject to a number of risks,
uncertainties, and assumptions, including, but not limited to:
risks related to our rapid growth in recent years and limited
operating experience; our ability to manage growth effectively;
risks related to increases in costs of diamonds, other gemstones
and precious metals supply shortages; the Company’s ability to
maintain a low cost of production and distribution; fluctuations in
the pricing and supply of diamonds, other gemstones, and precious
metals, particularly responsibly sourced natural and lab-grown
diamonds and recycled precious metals such as gold, increases in
labor costs for manufacturing such as wage rate increases, as well
as inflation, and energy prices; our ability to cost-effectively
turn existing customers into repeat customers or to acquire new
customers; our ability to maintain a low cost of production and
distribution; fluctuations in the pricing and supply of diamonds,
other gemstones, and precious metals, particularly responsibly
sourced natural and lab-grown diamonds and recycled precious metals
such as gold, increases in labor costs for manufacturing such as
wage rate increases, as well as inflation, and energy prices; risks
related to our expansion plans in the U.S.; risks related an
overall decline in the health of the economy and other factors
impacting consumer spending, such as recessionary conditions,
governmental instability, war or the threat of war, and natural
disasters; our history of losses, and we may be unable to sustain
profitability; our ability to compete in the fine jewelry retail
industry; our ability to manage our inventory balances and
inventory shrinkage; risks related to a decline in sales of Create
Your Own rings; our ability to maintain and enhance our brand;
risks related to the effectiveness of our marketing efforts; risks
related to environmental, social, and governance matters impact the
Company’s business and reputation; risks related to the our and
omnichannel business; our ability ability to effectively anticipate
and respond to changes in consumer preferences and shopping
patterns; risks related to our ability to predict future
performance due to quarterly and annual fluctuations of our results
of operations and operating cash flow; risks related to our
dependence on distributions from Brilliant Earth, LLC to pay our
taxes and expenses; risks related to our obligations under our Tax
Receivable Agreement and our organizational structure; and the
other risks, uncertainties and the factors described in Part I,
Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 filed with the Securities and
Exchange Commission (the “SEC”) on March 22, 2022. Although the
Company believes that the expectations reflected in its
forward-looking statements are reasonable, it cannot guarantee
future results. The Company has no obligation, and does not
undertake any obligation, to update or revise any forward-looking
statement made in this press release to reflect changes since the
date of this press release, except as may be required by law.
Contacts:
Investors: Allison
MalkinICRBrilliantEarth@icrinc.com
BRILLIANT EARTH GROUP,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited and in thousands, except share and
per share amounts)
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net sales |
$ |
108,809 |
|
|
$ |
92,348 |
|
|
$ |
208,847 |
|
|
$ |
163,044 |
|
Cost of sales |
|
50,988 |
|
|
|
47,587 |
|
|
|
100,910 |
|
|
|
85,924 |
|
Gross profit |
|
57,821 |
|
|
|
44,761 |
|
|
|
107,937 |
|
|
|
77,120 |
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
52,145 |
|
|
|
32,409 |
|
|
|
96,961 |
|
|
|
59,814 |
|
Income from operations |
|
5,676 |
|
|
|
12,352 |
|
|
|
10,976 |
|
|
|
17,306 |
|
Interest expense |
|
(1,146 |
) |
|
|
(1,948 |
) |
|
|
(2,922 |
) |
|
|
(3,874 |
) |
Other expense, net |
|
(49 |
) |
|
|
(1,927 |
) |
|
|
(108 |
) |
|
|
(2,547 |
) |
Loss on extinguishment of debt |
|
(617 |
) |
|
|
— |
|
|
|
(617 |
) |
|
|
— |
|
Income before tax |
|
3,864 |
|
|
|
8,477 |
|
|
|
7,329 |
|
|
|
10,885 |
|
Income tax expense |
|
(113 |
) |
|
|
— |
|
|
|
(209 |
) |
|
|
— |
|
Net income |
|
3,751 |
|
|
$ |
8,477 |
|
|
|
7,120 |
|
|
$ |
10,885 |
|
Net income allocable to non-controlling interest |
|
3,327 |
|
|
|
|
|
6,340 |
|
|
|
Net income allocable to Brilliant Earth Group,
Inc. |
$ |
424 |
|
|
|
|
$ |
780 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.04 |
|
|
|
|
$ |
0.07 |
|
|
|
Diluted |
$ |
0.03 |
|
|
|
|
$ |
0.06 |
|
|
|
Weighted average shares of common stock |
|
|
|
|
|
|
|
Basic |
|
10,810,627 |
|
|
|
|
|
10,412,922 |
|
|
|
Diluted |
|
96,208,702 |
|
|
|
|
|
96,386,862 |
|
|
|
BRILLIANT EARTH GROUP,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited and in thousands, except share and per
share amounts)
|
June 30, |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
155,533 |
|
|
$ |
172,865 |
|
Restricted cash |
|
205 |
|
|
|
205 |
|
Inventories, net |
|
35,344 |
|
|
|
24,743 |
|
Prepaid expenses and other current assets |
|
9,759 |
|
|
|
8,178 |
|
Total current assets |
|
200,841 |
|
|
|
205,991 |
|
Property and equipment, net |
|
11,272 |
|
|
|
6,732 |
|
Deferred tax assets |
|
8,298 |
|
|
|
4,407 |
|
Operating lease right of use assets |
|
21,427 |
|
|
|
— |
|
Other assets |
|
1,729 |
|
|
|
601 |
|
Total assets |
$ |
243,567 |
|
|
$ |
217,731 |
|
|
|
|
|
Liabilities and equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
10,555 |
|
|
$ |
14,480 |
|
Accrued expenses and other current liabilities |
|
35,455 |
|
|
|
28,756 |
|
Current portion of deferred revenue |
|
22,476 |
|
|
|
18,818 |
|
Current portion of operating lease liabilities |
|
3,025 |
|
|
|
— |
|
Current portion of long-term debt |
|
3,250 |
|
|
|
30,789 |
|
Total current liabilities |
|
74,761 |
|
|
|
92,843 |
|
|
|
|
|
Long-term debt, net of debt issuance costs |
|
61,000 |
|
|
|
32,789 |
|
Operating lease liabilities |
|
21,399 |
|
|
|
— |
|
Deferred rent |
|
— |
|
|
|
2,507 |
|
Payable pursuant to the Tax Receivable Agreement |
|
6,541 |
|
|
|
3,775 |
|
Other long-term liabilities |
|
112 |
|
|
|
2,979 |
|
Total liabilities |
|
163,813 |
|
|
|
134,893 |
|
|
|
|
|
Equity |
|
|
|
Preferred stock, $0.0001 par value per share, 10,000,000 shares
authorized, none issued and outstanding at June 30, 2022 and
December 31, 2021, respectively |
|
— |
|
|
|
— |
|
Class A common stock, $0.0001 par value - 1,200,000,000 shares
authorized; 10,835,394 and 9,614,523 shares issued and outstanding
at June 30, 2022 and December 31, 2021, respectively |
|
1 |
|
|
|
1 |
|
Class B common stock, $0.0001 par value - 150,000,000 shares
authorized; 35,357,593 and 35,658,013 shares issued and outstanding
at June 30, 2022 and December 31, 2021, respectively |
|
4 |
|
|
|
4 |
|
Class C common stock, $0.0001 par value - 150,000,000 shares
authorized; 49,119,976 and 49,505,250 shares issued and outstanding
at June 30, 2022 and December 31, 2021, respectively |
|
5 |
|
|
|
5 |
|
Class D common stock, $0.0001 par value - 150,000,000 shares
authorized; none issued and outstanding at June 30, 2022 and
December 31, 2021, respectively |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
6,749 |
|
|
|
6,865 |
|
Retained earnings |
|
2,308 |
|
|
|
1,528 |
|
Equity attributable to Brilliant Earth Group,
Inc. |
|
9,067 |
|
|
|
8,403 |
|
NCI attributable to Brilliant Earth, LLC |
|
70,687 |
|
|
|
74,435 |
|
Total equity |
|
79,754 |
|
|
|
82,838 |
|
Total liabilities and equity |
$ |
243,567 |
|
|
$ |
217,731 |
|
GAAP to Non-GAAP
Reconciliations(Unaudited and in thousands, except share
and per share amounts)
ADJUSTED EBITDA AND ADJUSTED EBITDA
MARGIN
|
Three months ended |
|
Six months ended |
June 30, |
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net income, as reported |
$ |
3,751 |
|
|
$ |
8,477 |
|
|
$ |
7,120 |
|
|
$ |
10,885 |
|
Interest expense |
|
1,146 |
|
|
|
1,948 |
|
|
|
2,922 |
|
|
|
3,874 |
|
Income tax expense |
|
113 |
|
|
|
— |
|
|
|
209 |
|
|
|
— |
|
Depreciation expense |
|
398 |
|
|
|
157 |
|
|
|
747 |
|
|
|
321 |
|
Amortization of cloud-based software implementation costs |
|
36 |
|
|
|
— |
|
|
|
36 |
|
|
|
— |
|
Showroom pre-opening expense |
|
1,331 |
|
|
|
518 |
|
|
|
1,806 |
|
|
|
681 |
|
Equity-based compensation expense |
|
2,148 |
|
|
|
95 |
|
|
|
4,252 |
|
|
|
188 |
|
Loss on extinguishment of debt |
|
617 |
|
|
|
— |
|
|
|
617 |
|
|
|
— |
|
Other expense, net (1) |
|
49 |
|
|
|
1,927 |
|
|
|
108 |
|
|
|
2,547 |
|
Transaction costs and other expense (2) |
|
34 |
|
|
|
1,366 |
|
|
|
180 |
|
|
|
2,495 |
|
Adjusted EBITDA |
$ |
9,623 |
|
|
$ |
14,488 |
|
|
$ |
17,997 |
|
|
$ |
20,991 |
|
Net income margin |
|
3.4 |
% |
|
|
9.2 |
% |
|
|
3.4 |
% |
|
|
6.7 |
% |
Adjusted EBITDA margin |
|
8.8 |
% |
|
|
15.7 |
% |
|
|
8.6 |
% |
|
|
12.9 |
% |
(1) |
Other expense, net for the three months ended June 30, 2021
consisted primarily of the change in fair value of the warrant
liability necessary to mark our warrants to fair market value.
Additionally, these expenses for all periods presented include
losses on exchange rates on consumer payments, partially offset by
interest and other miscellaneous income. |
|
|
(2) |
These expenses are those that we did not incur in the normal course
of business. These expenses for all periods presented include
professional fees in connection with the evaluation and preparation
for operations as a public company. Additionally, the expense also
includes one-time costs associated with the opening of a new
operations facility for the period ended June 30, 2021. |
ADJUSTED NET INCOME AND ADJUSTED DILUTED
EARNINGS PER SHARE
|
Three months
ended |
|
Six months
ended |
June 30, |
June 30, |
|
|
2022 |
|
|
|
2022 |
|
Net income attributable to Brilliant Earth Group, Inc., as
reported (1) |
$ |
424 |
|
|
$ |
780 |
|
Net income impact from assumed redemption of all LLC Units to
common stock (2) |
|
3,327 |
|
|
|
6,340 |
|
Net income, as reported |
$ |
3,751 |
|
|
$ |
7,120 |
|
Income tax expense associated with conversion (3) |
|
(850 |
) |
|
|
(1,603 |
) |
Tax effected net income after assumed conversion |
|
2,901 |
|
|
|
5,517 |
|
Equity-based compensation expense |
|
2,148 |
|
|
|
4,252 |
|
Loss on extinguishment of debt |
|
617 |
|
|
|
617 |
|
Showroom pre-opening expense |
|
1,331 |
|
|
|
1,806 |
|
Other expense, net (4) |
|
49 |
|
|
|
108 |
|
Transaction costs and other expense (5) |
|
34 |
|
|
|
180 |
|
Tax impact of adjustments |
|
(1,064 |
) |
|
|
(1,760 |
) |
Adjusted Net income |
$ |
6,016 |
|
|
$ |
10,720 |
|
|
|
|
|
Diluted weighted average of common stock assumed outstanding |
|
96,208,702 |
|
|
|
96,386,862 |
|
Diluted earnings per share: |
|
|
|
As reported |
$ |
0.03 |
|
|
$ |
0.06 |
|
As adjusted |
$ |
0.06 |
|
|
$ |
0.11 |
|
(1) |
This non-GAAP measure is not applicable to the three months and six
months ended June 30, 2021, as the reorganization transaction did
not occur until the third quarter of 2021. |
|
|
(2) |
It is assumed that we will elect to issue common stock upon
redemption of LLC Units rather than cash settle. |
|
|
(3) |
Brilliant Earth Group, Inc. is subject to U.S. Federal income
taxes, in addition to state and local taxes with respect to its
allocable share of any net taxable income of Brilliant Earth, LLC.
Acquisition of LLC units by Brilliant Earth Group, Inc. causes all
of the taxable income currently recognized by the members of
Brilliant Earth, LLC to become taxable to the Company. |
|
|
(4) |
Other expense, net for the three and six months ended June 30, 2022
include losses on exchange rates on consumer payments, partially
offset by interest and other miscellaneous income. |
|
|
(5) |
These expenses are those that we did not incur in the normal course
of business. |
|
|
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