EX-99.1 2 tm2131392d11_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

The following quarterly information of Authentic Brands LLC for the periods indicated below is being provided in connection with investor meetings, including a reconciliation of net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

Authentic Brands LLC

Consolidated Statement of Income

(amounts in thousands)

(unaudited)

	Three Months Ended
	March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			September 30,
	2020			2020			2020			2020			2021			2021			2021
Revenue, net	$	26,283		$	36,821		$	40,899		$	59,906		$	48,790		$	52,357		$	60,106
Cost of goods sold		14,254			20,828			23,483			35,935			29,152			31,050			36,043
Gross profit		12,029			15,993			17,416			23,971			19,638			21,307			24,063
Operating expenses
Marketing and advertising		4,646			4,820			5,586			10,461			6,551			8,948			9,791
Salaries, wages and benefits		4,251			5,046			6,712			8,185			7,778			11,443			10,534
General and administrative		2,692			3,163			4,127			3,940			4,838			5,751			6,884
Total operating expenses		11,589			13,029			16,425			22,586			19,167			26,142			27,209

Income (loss) from operations		440			2,964			991			1,385			471			(4,835	)		(3,146	)

Other income (expense)
Interest expense		(198	)		(316	)		(300	)		(233	)		(294	)		(451	)		(845	)
Other income (expense), net		8			(91	)		(12	)		(132	)		8			(10	)		(3	)
Total other income (expense)		(190	)		(407	)		(312	)		(365	)		(286	)		(461	)		(848	)

Earnings (loss) before income taxes		250			2,557			679			1,020			185			(5,296	)		(3,994	)

State income tax expense		43			43			55			44			36			38			59

Net income (loss)	$	207		$	2,514		$	624		$	976		$	149		$	(5,334	)	$	(4,053	)

Reconciliation of Net Income (loss) to Adjusted EBITDA

Net income (loss)	$	207		$	2,514		$	624		$	976		$	149		$	(5,334	)	$	(4,053	)
Interest expense		198			316			300			233			294			451			845
Tax expense		43			43			55			44			36			38			59
Depreciation and amortization		303			328			354			390			499			653			848
EBITDA		751			3,201			1,333			1,643			978			(4,192	)		(2,301	)

Equity-based compensation		367			410			1,873			663			685			2,343			734
System implementation costs		76			230			198			52			116			(4	)		153
Transaction expenses		–			–			467			108			–			59			596
Adjusted EBITDA	$	1,194		$	3,841		$	3,871		$	2,466		$	1,779		$	(1,794	)	$	(818	)


Revenue by Channel:
Direct to Consumer	$	23,027		$	33,607		$	32,839		$	48,251		$	38,323		$	39,821		$	37,512
Wholesale		3,027			3,093			7,373			9,858			9,351			9,798			19,459
Outpost		229			121			687			1,797			1,116			2,738			3,135
Total revenue, net	$	26,283		$	36,821		$	40,899		$	59,906		$	48,790		$	52,357		$	60,106

Non-GAAP Financial Measures

To evaluate the performance of its business, Authentic Brands LLC (the "Company") relies on both its results of operations recorded in accordance with GAAP and certain non-GAAP financial measures, including EBITDA and Adjusted EBITDA. These measures, as defined below, are not defined or calculated under principles, standards or rules that comprise GAAP. Accordingly, the non-GAAP financial measures the Company uses and refers to should not be viewed as a substitute for performance measures derived in accordance with GAAP or as a substitute for a measure of liquidity. Its definitions of EBITDA and Adjusted EBITDA described below are specific to its business and you should not assume that they are comparable to similarly titled financial measures of other companies. The Company defines EBITDA as net income (loss) before interest, state income taxes, depreciation and amortization expense. The Company defines Adjusted EBITDA as EBITDA, as adjusted for stock-based compensation expense, capital raising activities, and costs associated with implementation of its enterprise systems. When used in conjunction with GAAP financial measures, the Company believes that EBITDA and Adjusted EBITDA are useful supplemental measures of operating performance because it facilitates comparisons of historical performance by excluding non-cash items such as stock-based payments and other amounts not directly attributable to its primary operations, such as the impact of system implementation, acquisitions, disposals, non-routine investigations, litigation and settlements. Adjusted EBITDA is also a key metric used internally by its management to evaluate performance and develop internal budgets and forecasts. EBITDA and Adjusted EBITDA have limitations as an analytical tool and should not be considered in isolation or as a substitute for analyzing its results as reported under GAAP and may not provide a complete understanding of its operating results as a whole. Some of these limitations are (i) they do not reflect changes in, or cash requirements for, its working capital needs, (ii) they not reflect its interest expense or the cash requirements necessary to service interest or principal payments on its debt, (iii) they do not reflect its tax expense or the cash requirements to pay its taxes, (iv) they do not reflect historical capital expenditures or future requirements for capital expenditures or contractual commitments, (v) although stock-based compensation expenses are non-cash charges, the Company relies on equity compensation to compensate and incentivize employees, directors and certain consultants, and it may continue to do so in the future and (vi) although depreciation, amortization and impairments are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-GAAP measures do not reflect any cash requirements for such replacements.