WEBR Weber Inc

Weber Inc. (“Weber” or “the Company”) (NYSE: WEBR), the global leader in outdoor cooking products, innovation, and technology, today announced its financial results for the fiscal first quarter 2023, ending December 31, 2022.

Weber reports its financial performance in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and as adjusted on a non-GAAP basis. Please see “Non-GAAP Financial Measures,” and “Reconciliation of GAAP to Non-GAAP Financial Information” below for additional information and reconciliations of the non-GAAP financial measures to the most comparable GAAP financial measures.

For the quarter, Weber generated net sales of $165 million, gross profit of $36 million, a net loss of $114 million, and Adjusted EBITDA loss of $30 million.

“We continue to navigate the macro environment with focus and agility while leaning into our operational expertise, deep product pipeline, and strong execution capabilities to bring our customers experiences that only Weber can create,” said Alan Matula, Chief Executive Officer of Weber. “I am incredibly proud of our team's rapid progress against our key strategic priorities. With a new season before us, we look forward to continuing to transform how the world cooks outside with our new, multi-functional LUMINTM electric grill, a griddle suite of products poised to change the game, and a pellet grill that speaks to the versatility and rich flavor outdoor cooks crave.”

FOR THE THREE MONTHS ENDED DECEMBER 31, 2022

• Net sales decreased 42%, to $165 million, from $283 million in the prior-year quarter. The decrease was driven by slower retail traffic, both in-store and online, higher customer inventory levels, and macroeconomic factors. Foreign exchange accounted for $8 million of the sales reduction.
• Net sales decreased 38% in the Americas, to $98 million, from $156 million in the prior-year quarter. EMEA net sales decreased 58%, to $27 million, from $63 million in the prior-year quarter. APAC net sales decreased 36% to $41 million, from $64 million in the prior-year quarter.
  • Foreign currency negatively impacted net sales by $3 million and $5 million, in EMEA and APAC, respectively.
• Gross profit decreased 44% to $36 million, or 22% of net sales, compared to $64 million or 23% of net sales in the prior year. The decrease was primarily driven by lower volumes and was partially offset by pricing actions.
• Net loss was $114 million, or (69.1)% of net sales, compared to a net loss of $75 million, or (26.3)% of net sales, in the prior-year quarter. Adjusted net loss was $78 million, or (47.3)% of net sales, compared to $46 million, or (16.4)% of net sales, in the prior-year quarter.
• Adjusted EBITDA was a loss of $30 million, or (18.2)% of net sales, compared to Adjusted EBITDA loss of $36 million, or (12.7)% of net sales, in the prior-year quarter, primarily driven by lower sales partially offset by selling, general, and administrative expense reductions.
• Net cash used in operating activities was $112 million for the three months ended December 31, 2022, as compared to $188 million in the prior year-quarter. The $76 million year-over-year improvement was primarily related to reduced inventory levels.

On December 12, 2022, Weber announced that it has entered into a definitive merger agreement pursuant to which investment funds managed by BDT Capital Partners LLC ("BDT") will purchase all of the outstanding Class A Shares that they do not already own, for $8.05 per share of Class A common stock of Weber, which implies a total enterprise value of $3.7 billion for Weber. A special committee of the board of directors (the "Special Committee"), comprised solely of independent directors, advised by its own independent financial and legal advisors, unanimously recommended that the Weber board approve the transaction. Acting upon the recommendation of the Special Committee, Weber’s board approved the transaction. Upon completion of the transaction, Weber will become a privately held company majority owned by BDT investment funds. The transaction is expected to close in the first half of 2023, subject to customary closing conditions.

ABOUT WEBER INC.

Weber Inc. headquartered in Palatine, Ill., is the world’s leading barbecue brand. The Company’s founder George Stephen, Sr., established the outdoor cooking category when he invented the original kettle charcoal grill 70 years ago. Weber offers a comprehensive, innovative product portfolio, including charcoal, gas, pellet and electric grills, smokers, and accessories designed to help outdoor cooking enthusiasts discover what’s possible. Weber offers its barbecue grills and accessories, services, and experiences to a passionate community of millions across 78 countries.

LUMIN™ is a trademark of Weber-Stephen Products LLC and is the subject of pending registrations or applications in the United States and other countries.

NON-GAAP FINANCIAL MEASURES

This press release contains certain financial measures not presented in accordance with GAAP, including Adjusted EBITDA and Adjusted Net Loss, which are used by management in making operating decisions, allocating financial resources, and internal planning and forecasting and for business strategy purposes. Adjusted EBITDA and Adjusted Net Loss are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. The use of non-GAAP financial information should not be considered as an alternative to, or more meaningful than, the comparable GAAP measures. In addition, because our non-GAAP measures are not determined in accordance with GAAP, it is susceptible to differing calculations, and not all comparable or peer companies may calculate their non-GAAP measures in the same manner.

Management believes that such measures are commonly reported by issuers and widely used by investors as indicators of a company’s operating performance. Please refer to the reconciliations of Adjusted EBITDA and Adjusted Net Loss to the most directly comparable financial measures prepared in accordance with GAAP below.

FORWARD-LOOKING STATEMENTS

This press release contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Weber’s expectations or beliefs concerning future events. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K.

Our future results could be affected by a variety of other factors, including: uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions of the COVID-19 outbreak; the current, and uncertain future, impact of the COVID-19 outbreak on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results), and cash flows and liquidity; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; the ability to realize the anticipated benefits and synergies from business acquisitions in the amounts and at the times expected; the impact of competitive conditions; the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles; the success of productivity improvements and business transitions; commodity and energy prices; transportation costs; labor costs; disruptions or inefficiencies in supply chain; the availability of and interest rates on short-term and long-term financing; the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs; changes in consumer behavior and preferences; the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability; legal and regulatory factors including the impact of any product recalls; and business disruption or other losses from war, pandemic, terrorist acts or political unrest.

Weber Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands, except share data)

 

 

December 31, 2022

 

September 30, 2022

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

37,702

 

 

$

24,568

 

Accounts receivable, less allowances

 

89,203

 

 

 

54,667

 

Inventories, net

 

391,379

 

 

 

339,503

 

Prepaid expenses and other current assets

 

103,375

 

 

 

91,009

 

Total current assets

 

621,659

 

 

 

509,747

 

Property, equipment and leasehold improvements, net

 

215,757

 

 

 

211,256

 

Operating lease right-of-use assets

 

73,339

 

 

 

71,879

 

Other long-term assets

 

67,681

 

 

 

72,732

 

Trademarks, net

 

353,588

 

 

 

354,435

 

Other intangible assets, net

 

121,420

 

 

 

123,783

 

Goodwill

 

106,864

 

 

 

104,142

 

Total assets

$

1,560,308

 

 

$

1,447,974

 

Liabilities and equity (deficit)

 

 

 

Current liabilities:

 

 

 

Trade accounts payable

$

167,823

 

 

$

158,298

 

Accrued expenses

 

147,118

 

 

 

122,656

 

Income taxes payable

 

9,326

 

 

 

5,788

 

Current portion of long-term debt and other borrowings

 

293,000

 

 

 

186,910

 

Short-term debt — related party

 

4,600

 

 

 

—

 

Current portion of long-term financing obligation

 

696

 

 

 

675

 

Total current liabilities

 

622,563

 

 

 

474,327

 

Long-term debt, less current portion

 

1,210,004

 

 

 

1,213,235

 

Long-term debt — related party

 

60,789

 

 

 

—

 

Long-term financing obligation, less current portion

 

37,532

 

 

 

37,719

 

Non-current operating lease liabilities

 

61,670

 

 

 

60,544

 

Other long-term liabilities

 

72,119

 

 

 

74,085

 

Total liabilities

 

2,064,677

 

 

 

1,859,910

 

Commitments and Contingencies

 

 

 

Class A Common Stock, $0.001 par value - 3,000,000,000 shares authorized, 53,738,392 and 53,102,598 shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively

 

54

 

 

 

53

 

Class B Common Stock, $0.00001 par value - 1,500,000,000 shares authorized, 234,476,377 and 234,506,636 shares issued and outstanding as of December 31, 2022 and September 30, 2022, respectively

 

2

 

 

 

2

 

Preferred Stock, $0.0001 par value - 1,500,000,000 shares authorized, zero shares issued and outstanding as of December 31, 2022 and September 30, 2022

 

—

 

 

 

—

 

Additional paid-in capital

 

15,807

 

 

 

15,735

 

Accumulated other comprehensive loss

 

(2,072

)

 

 

(4,762

)

Retained earnings (deficit)

 

(115,041

)

 

 

(87,851

)

Total Weber Inc. equity (deficit)

 

(101,250

)

 

 

(76,823

)

Noncontrolling interests

 

(403,119

)

 

 

(335,113

)

Total equity (deficit)

 

(504,369

)

 

 

(411,936

)

Total liabilities and equity (deficit)

$

1,560,308

 

 

$

1,447,974

 

Weber Inc.

Condensed Consolidated Statements of Operations

(dollars in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended December 31,

 

2022

 

2021

Net sales

$

164,899

 

 

$

283,141

 

Cost of goods sold

 

128,951

 

 

 

219,128

 

Gross profit

 

35,948

 

 

 

64,013

 

Operating expenses:

 

 

 

Selling, general and administrative

 

122,381

 

 

 

148,084

 

Amortization of intangible assets

 

5,073

 

 

 

5,174

 

Restructuring costs

 

(1,166

)

 

 

—

 

Loss from operations

 

(90,340

)

 

 

(89,245

)

Foreign currency (gain) loss

 

(11,041

)

 

 

164

 

Interest expense, net

 

29,519

 

 

 

15,531

 

Loss before taxes

 

(108,818

)

 

 

(104,940

)

Income tax expense (benefit)

 

5,073

 

 

 

(30,387

)

Net loss

 

(113,891

)

 

 

(74,553

)

Net loss attributable to noncontrolling interests

 

(86,701

)

 

 

(91,330

)

Net (loss) income attributable to Weber Inc.

$

(27,190

)

 

$

16,777

 

Earnings (loss) per share of Class A common stock

 

 

 

Basic

$

(0.50

)

 

$

0.31

 

Diluted

$

(0.50

)

 

$

(0.19

)

Weighted average shares outstanding

 

 

 

Basic

 

54,604,105

 

 

 

53,309,932

 

Diluted

 

54,604,105

 

 

 

287,955,151

 

Weber Inc.

Condensed Consolidated Statement of Cash Flows

(dollars in thousands)

(unaudited)

 

 

Three Months Ended December 31,

 

2022

 

2021

Operating activities

 

 

 

Net loss

$

(113,891

)

 

$

(74,553

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Provision for depreciation

 

10,033

 

 

 

8,613

 

Provision for amortization of intangible assets

 

5,073

 

 

 

5,174

 

Provision for amortization of deferred financing costs

 

1,800

 

 

 

1,022

 

Deferred income tax (benefit) expense

 

(305

)

 

 

340

 

Stock-based compensation

 

8,537

 

 

 

25,511

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(29,242

)

 

 

(18,345

)

Inventories

 

(34,456

)

 

 

(139,694

)

Prepaid expenses and other current assets

 

(4,585

)

 

 

(46,606

)

Trade accounts payable

 

14,585

 

 

 

52,464

 

Accrued expenses

 

24,308

 

 

 

(10,554

)

Income taxes payable

 

3,226

 

 

 

3,074

 

Other

 

3,296

 

 

 

5,661

 

Net cash used in operating activities

 

(111,621

)

 

 

(187,893

)

Investing activities

 

 

 

Proceeds from disposal of property, equipment and leasehold improvements

 

3

 

 

 

10

 

Additions to property, equipment and leasehold improvements

 

(24,440

)

 

 

(25,876

)

Net cash used in investing activities

 

(24,437

)

 

 

(25,866

)

Financing activities

 

 

 

Proceeds from issuance of long-term debt — related party

 

62,424

 

 

 

—

 

Payments for deferred financing costs

 

(6,719

)

 

 

—

 

Payments for capitalized offering costs

 

—

 

 

 

(2,109

)

Interest rate swap settlement payments

 

(1,478

)

 

 

(1,478

)

Proceeds from contribution of capital, net

 

—

 

 

 

11,346

 

Dividends paid

 

(70

)

 

 

(2,123

)

Members’ distributions

 

11

 

 

 

(9,627

)

Borrowings from revolving credit facility

 

177,500

 

 

 

203,000

 

Payments on revolving credit facility

 

(66,500

)

 

 

(42,000

)

Borrowings from revolving loan — related party

 

4,600

 

 

 

—

 

Payments of other borrowings

 

(4,910

)

 

 

—

 

Payments of long-term debt

 

(3,750

)

 

 

(3,125

)

Shares withheld to satisfy employee tax obligations

 

(1,520

)

 

 

(351

)

Other financing activities

 

(360

)

 

 

(197

)

Net cash provided by financing activities

 

159,228

 

 

 

153,336

 

Effect of exchange rate changes on cash and cash equivalents

 

(10,036

)

 

 

(895

)

Increase (decrease) in cash and cash equivalents

 

13,134

 

 

 

(61,318

)

Cash and cash equivalents at beginning of period

 

24,568

 

 

 

107,517

 

Cash and cash equivalents at end of period

$

37,702

 

 

$

46,199

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

25,808

 

 

$

13,311

 

Cash paid for income taxes, net of refunds of $2,491 and $0, respectively

$

1,526

 

 

$

4,439

 

Supplemental disclosures of non-cash investing information:

 

 

 

Property and equipment included in accounts payable and accrued expenses

$

12,413

 

 

$

26,050

 

Weber Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(dollars in thousands)

The following table reconciles loss from operations to adjusted loss from operations; net loss to adjusted net loss; net loss to EBITDA; and EBITDA to Adjusted EBITDA for the periods presented:

 

Three Months Ended December 31,

 

2022

 

2021

Loss from operations

$

(90,340

)

 

$

(89,245

)

Adjustments:

 

 

 

Foreign currency gain (loss) (1)

 

11,041

 

 

 

(164

)

Stock-based compensation expense

 

8,537

 

 

 

25,511

 

Restructuring costs (2)

 

(1,166

)

 

 

—

 

Business transformation costs (3)

 

12,734

 

 

 

7,410

 

Operational transformation costs (4)

 

13,603

 

 

 

6,648

 

Financing costs (5)

 

537

 

 

 

—

 

Adjusted loss from operations

$

(45,054

)

 

$

(49,840

)

Net loss

$

(113,891

)

 

$

(74,553

)

Adjustments:

 

 

 

Stock-based compensation expense

 

8,537

 

 

 

25,511

 

Restructuring costs (2)

 

(1,166

)

 

 

—

 

Business transformation costs (3)

 

12,734

 

 

 

7,410

 

Operational transformation costs (4)

 

13,603

 

 

 

6,648

 

Financing costs (5)

 

537

 

 

 

—

 

Tax impact of adjusting items (6)

 

1,596

 

 

 

(11,458

)

Adjusted net loss

$

(78,050

)

 

$

(46,442

)

Net loss

$

(113,891

)

 

$

(74,553

)

Adjustments:

 

 

 

Interest expense, net

 

29,519

 

 

 

15,531

 

Income tax expense

 

5,073

 

 

 

(30,387

)

Depreciation and amortization

 

15,106

 

 

 

13,787

 

EBITDA

$

(64,193

)

 

$

(75,622

)

Stock-based compensation expense

 

8,537

 

 

 

25,511

 

Restructuring costs (2)

 

(1,166

)

 

 

—

 

Business transformation costs (3)

 

12,734

 

 

 

7,410

 

Operational transformation costs (4)

 

13,603

 

 

 

6,648

 

Financing costs (5)

 

537

 

 

 

—

 

Adjusted EBITDA

$

(29,948

)

 

$

(36,053

)

______________

(1)

Adjusted loss from operations includes foreign currency gain (loss) in order to align adjusted loss from operations with Adjusted EBITDA, with the exception of depreciation and amortization.

(2)

“Restructuring costs” are costs associated with the Company's restructuring plan that was implemented in fiscal year 2022, which included the termination of certain senior executives, a workforce reduction of non-manufacturing and distribution headcount, the termination of certain contracts and the disposal of certain other assets.

(3)

“Business transformation costs” are costs for business transformation initiatives that require severance or other costs to transition to a new operating model.

(4)

“Operational transformation costs” are defined as restructuring and transformation initiatives related to supply chain, operational moves and startups that are designed to enable future productivity. These costs also include significant non-capitalizable systems integration costs, as well was plant shutdown and closure costs that will drive future efficiencies.

(5)

“Financing costs” include non-capitalizable costs relating to the Company’s Secured Credit Facility and other financing costs.

(6)

“Tax impact of adjusting items” represents the Company's effective tax rate applied to the adjusting items presented.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230208006042/en/

INVESTOR RELATIONS CONTACT: Brian Eichenlaub investors@weber.com

MEDIA CONTACT: Kristina Peterson-Lohman media@weber.com