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YogaWorks, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results

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LOS ANGELES, March 27, 2019 (GLOBE NEWSWIRE) -- YogaWorks, Inc. (NASDAQ:YOGA) (the "Company"), one of the largest providers of high quality yoga instruction in the U.S., today announced financial results for the fourth quarter and full year ended December 31, 2018.

Rosanna McCollough, President and Chief Executive Officer of YogaWorks, stated, "2018 was a pivotal year for our company as we made progress on a number of strategic initiatives that set us up for improved financial performance in 2019 and beyond. We renewed our focus on our membership strategy; sharpened our pricing and promotional offering; implemented centralized training and metrics; and took steps towards optimizing our studio footprint. With a stronger base business, I am excited about our future and happy to see 2019 is off to a great start. This year, our priorities include driving improved performance in our base business, continuing to optimize our studio portfolio, growing teacher training and expanding our digital business. We plan to resume studio growth when the time is right. I am confident that the actions we are taking will enable us to drive healthy revenue growth and improved EBITDA margins over the long term."

Results for the Fourth Quarter Ended December 31, 2018

  December 31, 2018 December 31, 2017
GAAP Results(1)    
Net revenue $14.0 million $14.5 million
Net income / (loss) $(10.7) million $(11.8) million
     
Non-GAAP Results(2)    
Studio Count at quarter end 69 66
Adjusted EBITDA $(2.1) million $(1.1) million
Studio-Level EBITDA $1.4 million $2.7 million
Adjusted net income / (loss) $(3.8) million $(3.5) million

(1) U.S. generally accepted accounting principles ("GAAP").
(2) Adjusted EBITDA, Studio-Level EBITDA, and Adjusted net loss are non-GAAP measures. For reconciliations to GAAP net loss, see "Reconciliations of Non-GAAP Financial Measures" accompanying this press release.

For the fourth quarter ended December 31, 2018:

  • Net revenue was $14.0 million, a 3.4% decrease compared to $14.5 million in the fourth quarter of 2017. 
  • The Company closed one studio during the fourth quarter, ending the quarter with 69 studios in nine regional markets.
  • Adjusted EBITDA was $(2.1) million compared to adjusted EBITDA of $(1.1) million for the same quarter last year.
  • Adjusted net loss was $3.8 million compared to adjusted net loss of $3.5 million for the same period last year.

For a reconciliation of GAAP net loss to Adjusted EBITDA, Studio-Level EBITDA, and Adjusted net loss, please see "Reconciliations of Non-GAAP Financial Measures" accompanying this press release.

Results for the Full Year Ended December 29, 2018

  December 31, 2018 December 31, 2017
GAAP Results    
Net revenue $59.6 million $54.5 million
Net income (loss) $(35.2) million $(23.4) million
     
Non-GAAP Results(1)    
Studio Count at quarter end 69 66
Adjusted EBITDA $(6.3) million $(1.2) million
Studio-Level EBITDA $8.2 million $10.7 million
Adjusted net income / (loss) $(14.4) million $(11.7) million

(1) Adjusted EBITDA, Studio-Level EBITDA, and Adjusted net loss are non-GAAP measures. For reconciliations to GAAP net loss, see "Reconciliations of Non-GAAP Financial Measures" accompanying this press release.

For the full year ended December 31, 2018:

  • Net revenue was $59.6 million, a 9.3% increase compared to $54.5 million in 2017. 
  • The Company acquired 5 studios and closed 2 during fiscal 2018.
  • Adjusted EBITDA was $(6.3) million compared to adjusted EBITDA of $(1.2) million last year.
  • Adjusted net loss was $14.4 million compared to adjusted net loss of $11.7 million for last year.

Balance Sheet and Cash Flow Highlights

  • Cash and cash equivalents were $11.4 million as of December 31, 2018.
  • Cash used in operating activities was $6.5 million for the year as compared to cash provided by operating activities of $0.6 million in fiscal 2017.

Guidance

Guidance for the first quarter and full year fiscal 2019 excludes potential acquisitions. 

For the first quarter of 2019, the Company expects net revenue between $15.25 million and $15.75 million and adjusted EBITDA between $(1.5) million and $(1.0) million. This compares to net revenue of $15.5 million and adjusted EBITDA of $(1.1) million for the first quarter of 2018.     

For fiscal 2019, the Company expects net revenue between $60.0 million and $62.0 million and adjusted EBITDA between $(6.0) million and $(5.0) million. This compares to net revenue of $59.6 million and adjusted EBITDA of $(6.3) million for 2018.    

Conference Call to Discuss Fourth Quarter Results

The Company will host a conference call and webcast to discuss its financial results for the fourth quarter ended December 31, 2018, today, March 27, 2019, beginning at 4:30 p.m. Eastern Time. Those interested in participating in the call are invited to dial 1-877-407-4018 (U.S.) or 1-201-689-8471 (international). A live webcast of the conference call will also be available online at www.yogaworks.com under the Investor Relations section and will remain available for 30 days following the live call. A replay will also be available two hours following the call through April 10, 2019, via telephone at 1-844-512-2921 (U.S.) and 1-412-317-6671 (international) by entering the replay pin 13688861.

About YogaWorks, Inc.

YogaWorks, Inc. is one of the largest providers of high quality yoga instruction in the U.S., with 69 studios in nine markets including Los Angeles, Orange County, Northern California, New York City, Boston, Baltimore, the Washington, D.C. area, Houston and Atlanta. YogaWorks strives to make yoga accessible to everybody and offers a wide range of class styles for people of all ages and abilities. Through its studios, the Company offers yoga classes, integrated fitness classes, workshops, teacher training programs and yoga-related retail merchandise. In addition to its studio locations, YogaWorks offers online instruction through its MyYogaWorks web platform, which provides subscribers with a highly curated catalog of over 1,200 yoga and meditation classes.

Forward-Looking Statements

This press release may include forward-looking statements that reflect the Company's current views about future events and financial performance. All statements other than statements of historical facts included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events are forward-looking statements.

These forward-looking statements are expressed in good faith and the Company believes there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Investors should not place undue reliance on any of the Company's forward-looking statements because they are subject to a variety of risks and uncertainties. Factors that could cause results to differ from those reflected in the forward-looking statements are set forth in the Company's prior press releases and public filings with the Securities and Exchange Commission, which are available via the Company's website at www.yogaworks.com. The forward-looking statements in this press release speak only as of the date of this release and, except as required by law, the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Contacts:
Investor Relations:
Jean Fontana, ICR, Inc.
646-277-1200
IR@yogaworks.com

YogaWorks, Inc.

Consolidated Balance Sheets (Unaudited)

    As of December 31,  
    2018     2017  
Assets                
Current assets                
Cash and cash equivalents   $ 11,447,318     $ 22,095,216  
Inventories     1,148,449       1,212,608  
Prepaid expenses and other current assets     936,757       1,145,067  
Total current assets     13,532,524       24,452,891  
Property and equipment, net     10,225,944       10,418,203  
Intangible assets, net     13,291,502       22,142,275  
Goodwill     663,954       12,768,773  
Other non-current assets     1,327,775       1,224,179  
Total assets   $ 39,041,699     $ 71,006,321  
                 
Liabilities and Stockholders' Equity                
Current liabilities                
Accounts payable and accrued expenses   $ 4,905,204     $ 3,794,569  
Accrued compensation     1,802,047       1,947,134  
Deferred revenue     7,276,578       7,187,948  
Current portion of deferred rent     124,319       122,607  
Total current liabilities     14,108,148       13,052,258  
Deferred rent, net of current portion     3,975,391       3,418,886  
Total liabilities     18,083,539       16,471,144  
                 
Stockholders' equity                
Common stock $0.001 par value; 50,000,000 shares authorized,
  16,639,586 issued and 16,494,838 outstanding at
  December 31, 2018 and 50,000,000 shares authorized,
  16,435,505 issued and 16,332,510 outstanding at December 31, 2017
    16,496       16,333  
Additional paid-in capital     113,260,161    
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