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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sharkninja Inc | NYSE:SN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
4.17 | 4.54% | 96.08 | 95.90 | 92.47 | 92.47 | 2,090,485 | 01:00:00 |
Raises Fiscal Year 2024 Outlook on Key Metrics
SharkNinja, Inc. (“SharkNinja” or the “Company”) (NYSE: SN), a global product design and technology company, today announced its financial results for the second quarter ended June 30, 2024.
Highlights for the Second Quarter 2024 as compared to the Second Quarter 2023
Mark Barrocas, Chief Executive Officer, commented: “SharkNinja fueled excellent organic and profitable growth in the second quarter. Our diversified portfolio of products and strong revenue mix drove broad-based, double-digit growth across each of our key product categories. We are expanding market share, entering new categories, and growing our global footprint, as we continue to execute on our proven three-pillar growth strategy. Looking ahead, we are confident in our ability to deliver high-performance products that solve consumer problems, even amidst certain challenges emerging in the global operating environment. Our relentless focus on execution has consistently yielded exceptional results, and we are positioned to execute this playbook going forward.”
Three Months Ended June 30, 2024
Net sales increased 31.4% to $1,248.7 million, compared to $950.3 million during the same period last year. Adjusted Net Sales increased 37.9% to $1,248.7 million, compared to $905.6 million during the same period last year, or 37.6% on a constant currency basis. The increase in net sales and Adjusted Net Sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.
Gross profit increased 51.4% to $600.9 million, or 48.1% of net sales, compared to $396.9 million, or 41.8% of net sales, in the second quarter of 2023. Adjusted Gross Profit increased 56.0% to $614.1 million, or 49.2% of Adjusted Net Sales, compared to $393.6 million, or 43.5% of Adjusted Net Sales in the second quarter of 2023. The increase in gross margin and Adjusted Gross Margin of 630 and 570 basis points, respectively, was derived from optimizations within our supply chain, sourcing and costing strategy, regional expansion, and foreign exchange benefit.
Research and development expenses increased 47.6% to $90.1 million, or 7.2% of net sales, compared to $61.0 million, or 6.4% of net sales, in the prior year quarter. This increase was primarily driven by incremental personnel-related expenses of $12.0 million to support new product categories and new market expansion, which includes an increase of $1.4 million in share-based compensation.
Sales and marketing expenses increased 45.5% to $303.2 million, or 24.3% of net sales, compared to $208.3 million, or 21.9% of net sales, in the prior year quarter. This increase was primarily attributable to increases of $58.9 million in advertising-related expenses; an increase of $26.7 million in delivery and distribution costs driven by higher volumes, particularly in our DTC business; and $10.4 million in personnel-related expenses to support new product launches and expansion into new markets, which includes an incremental $1.7 million of share-based compensation.
General and administrative expenses increased 44.3% to $103.8 million, or 8.3% of net sales, compared to $72.0 million, or 7.6% of net sales, in the prior year quarter. This increase was primarily driven by an increase in personnel-related expenses of $16.1 million, primarily due to a $8.6 million increase in share-based compensation; an increase of $8.0 million in legal fees; an increase of $7.3 million in professional and consulting fees; an increase of $6.7 million in technology support costs; an increase of $3.6 million in product liability and insurance; an increase of $2.3 million in credit card processing and merchant fees; offset by a decrease in transaction costs related to the separation and distribution from JS Global of $15.3 million.
Operating income increased 86.6% to $103.8 million, or 8.3% of net sales, compared to $55.6 million, or 5.9% of net sales, during the prior year quarter. Adjusted Operating Income increased 61.5% to $143.2 million, or 11.5% of Adjusted Net Sales, compared to $88.7 million, or 9.8% of Adjusted Net Sales, in the second quarter of 2023.
Net income increased 470.1% to $68.0 million, or 5.4% of net sales, compared to $11.9 million, or 1.3% of net sales, in the prior year quarter. Net income per diluted share increased 433.3% to $0.48, compared to $0.09 in the prior year quarter.
Adjusted Net Income increased 52.9% to $99.6 million, or 8.0% of Adjusted Net Sales, compared to $65.2 million, or 7.2% of Adjusted Net Sales, in the prior year quarter. Adjusted Net Income per diluted share increased 51.1% to $0.71, compared to $0.47 in the prior year quarter.
Adjusted EBITDA increased 47.6% to $167.7 million, or 13.4% of Adjusted Net Sales, compared to $113.6 million, or 12.5% of Adjusted Net Sales in the prior year quarter.
Six Months Ended June 30, 2024
Net sales increased 28.2% to $2,314.9 million, compared to $1,805.6 million during the same period last year. Adjusted Net Sales increased 32.9% to $2,314.9 million, compared to $1,741.2 million during the same period last year, or 32.0% on a constant currency basis. The increase in net sales and Adjusted Net Sales resulted from growth in each of our four major product categories of Food Preparation Appliances, Cooking and Beverage Appliances, Cleaning Appliances and Other, which includes beauty and home environment products.
Gross profit increased 41.4% to $1,127.5 million, or 48.7% of net sales, compared to $797.5 million, or 44.2% of net sales, in the same period last year. Adjusted Gross Profit increased 44.4% to $1,155.8 million, or 49.9% of Adjusted Net Sales, compared to $800.4 million, or 46.0% of Adjusted Net Sales in the same period last year. The increase in gross margin and Adjusted Gross Margin of 450 and 400 basis points, respectively, was derived from optimizations within our supply chain, sourcing and costing strategy, regional expansion, and foreign exchange benefit.
Research and development expenses increased 33.3% to $159.6 million, or 6.9% of net sales, compared to $119.7 million, or 6.6% of net sales, during the same period last year. This increase was primarily driven by incremental personnel-related expenses of $20.7 million to support new product categories and new market expansion, which includes an increase of $4.7 million in share-based compensation. The remainder of the increase was primarily driven by an increase of $11.5 million in prototypes and testing costs, an increase of $8.4 million in professional and consulting fees to support overall growth in the business and an increase of $2.6 million in travel costs, partially offset by a decrease of $2.4 million in depreciation and amortization expense.
Sales and marketing expenses increased 43.6% to $517.8 million, or 22.4% of net sales, compared to $360.4 million, or 20.0% of net sales, during the same period last year. This increase was primarily attributable to increases of $85.3 million in advertising-related expenses; an increase of $45.7 million in delivery and distribution costs driven by higher volumes, particularly in our DTC business; $24.5 million in personnel-related expenses to support new product launches and expansion into new markets, which includes an incremental $4.2 million of share-based compensation; and $3.4 million in professional services expense.
General and administrative expenses increased 37.6% to $191.3 million, or 8.3% of net sales, compared to $139.0 million, or 7.7% of net sales, during the same period last year. This increase was primarily driven by an increase in personnel-related expenses of $32.0 million, primarily due to a $21.5 million increase in share-based compensation; an increase of $13.4 million in professional and consulting fees; an increase of $9.0 million in technology support costs; an increase of $17.0 million in legal fees; an increase of $6.1 million in credit card processing and merchant fees; an increase of $4.2 million in product liability and insurance; an increase of $3.2 million in depreciation and amortization; offset by a decrease in transaction costs related to the separation and distribution from JS Global and secondary offering of $33.8 million.
Operating income increased 45.2% to $258.8 million, or 11.2% of net sales, compared to $178.3 million, or 9.9% of net sales, during the same period last year. Adjusted Operating Income increased 39.3% to $345.4 million, or 14.9% of Adjusted Net Sales, compared to $248.0 million, or 14.2% of Adjusted Net Sales, in the prior year period.
Net income increased 79.4% to $177.7 million, or 7.7% of net sales, compared to $99.0 million, or 5.5% of net sales, during the same period last year. Net income per diluted share increased 77.5% to $1.26, compared to $0.71 in the prior year period.
Adjusted Net Income increased 34.8% to $248.2 million, or 10.7% of Adjusted Net Sales, compared to $184.2 million, or 10.6% of Adjusted Net Sales, during the same period last year. Adjusted Net Income per diluted share increased 32.3% to $1.76, compared to $1.33 in the prior year period.
Adjusted EBITDA increased 36.5% to $398.2 million, or 17.2% of Adjusted Net Sales, compared to $291.6 million, or 16.7% of Adjusted Net Sales, in the prior year period.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents decreased to $138.1 million, compared to $154.1 million as of December 31, 2023.
Inventories increased 20.1% to $840.5 million, compared to $699.7 million as of December 31, 2023.
Total debt, excluding unamortized deferred financing costs, was $909.8 million, compared to $804.9 million as of December 31, 2023. The existing credit facility provides for a $810.0 million term loan and a $500.0 million revolving credit facility.
Fiscal 2024 Outlook
For fiscal year 2024, SharkNinja is increasing its outlook on key metrics and now expects:
Conference Call Details
A conference call to discuss the second quarter 2024 financial results is scheduled for today, August 8, 2024, at 8:30 a.m. Eastern Time. A live audio webcast of the conference call will be available online at http://ir.sharkninja.com. Investors and analysts interested in participating in the live call are invited to dial 1-646-968-2525 or 1-888-596-4144 and enter confirmation code 2950425. The webcast will be archived and available for replay.
About SharkNinja, Inc.
SharkNinja, Inc. (NYSE: SN) is a global product design and technology company, with a diversified portfolio of 5-star rated lifestyle solutions that positively impact people’s lives in homes around the world. Powered by two trusted, global brands, Shark and Ninja, the company has a proven track record of bringing disruptive innovation to market, and developing one consumer product after another has allowed SharkNinja to enter multiple product categories, driving significant growth and market share gains. Headquartered in Needham, Massachusetts with more than 3,000 associates, the company’s products are sold at key retailers, online and offline, and through distributors around the world. For more information, please visit SharkNinja.com.
Forward-looking statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our future business, financial condition, results of operations and prospects and Fiscal 2024 outlook. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which you should consider and read carefully, including but not limited to:
This list of factors should not be construed as exhaustive and should be read in conjunction with those described in our Annual Report on Form 20-F filed with the SEC under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other filings we make with the SEC. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this press release, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those described or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that this information provides a reasonable basis for these statements, this information may be limited or incomplete. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. We qualify all of our forward-looking statements by the cautionary statements contained in this press release.
SHARKNINJA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
As of
June 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
138,138
$
154,061
Accounts receivable, net
1,080,091
985,172
Inventories
840,545
699,740
Prepaid expenses and other current assets
103,638
58,311
Total current assets
2,162,412
1,897,284
Property and equipment, net
177,449
166,252
Operating lease right-of-use assets
143,090
63,333
Intangible assets, net
470,457
477,816
Goodwill
834,001
834,203
Deferred tax assets
6,762
12
Other assets, noncurrent
57,269
48,170
Total assets
$
3,851,440
$
3,487,070
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
504,751
$
459,651
Accrued expenses and other current liabilities
602,361
620,333
Tax payable
11,143
20,991
Debt, current
149,282
24,157
Total current liabilities
1,267,537
1,125,132
Debt, noncurrent
755,811
775,483
Operating lease liabilities, noncurrent
145,517
63,043
Deferred tax liabilities
5,780
16,500
Other liabilities, noncurrent
30,752
28,019
Total liabilities
2,205,397
2,008,177
Shareholders’ equity:
Ordinary shares, $0.0001 par value per share, 1,000,000,000 shares authorized; 139,936,246 and 139,083,369 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively
14
14
Additional paid-in capital
1,002,931
1,009,590
Retained earnings
647,979
470,319
Accumulated other comprehensive loss
(4,881
)
(1,030
)
Total shareholders’ equity
1,646,043
1,478,893
Total liabilities and shareholders’ equity
$
3,851,440
$
3,487,070
SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net sales(1)
$
1,248,658
$
950,312
$
2,314,886
$
1,805,594
Cost of sales
647,759
553,391
1,187,370
1,008,130
Gross profit
600,899
396,921
1,127,516
797,464
Operating expenses:
Research and development
90,053
61,014
159,649
119,739
Sales and marketing
303,185
208,316
517,753
360,436
General and administrative
103,825
71,959
191,336
139,027
Total operating expenses
497,063
341,289
868,738
619,202
Operating income
103,836
55,632
258,778
178,262
Interest expense, net
(14,844
)
(7,031
)
(29,566
)
(15,520
)
Other income (expense), net
689
(32,670
)
3,937
(35,450
)
Income before income taxes
89,681
15,931
233,149
127,292
Provision for income taxes
21,633
3,995
55,489
28,260
Net income
$
68,048
$
11,936
$
177,660
$
99,032
Net income per share, basic
$
0.49
$
0.09
$
1.27
$
0.71
Net income per share, diluted
$
0.48
$
0.09
$
1.26
$
0.71
Weighted-average number of shares used in computing net income per share, basic
139,888,497
138,982,872
139,668,527
138,982,872
Weighted-average number of shares used in computing net income per share, diluted
140,924,298
138,982,872
140,813,662
138,982,872
(1)
Net sales in our product categories were as follows:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands)
2024
2023
2024
2023
Cleaning Appliances
$
466,115
$
413,797
$
888,035
$
828,667
Cooking and Beverage Appliances
379,277
343,050
708,918
599,732
Food Preparation Appliances
264,911
143,376
469,948
261,224
Other
138,355
50,089
247,985
115,971
Total net sales
$
1,248,658
$
950,312
$
2,314,886
$
1,805,594
SHARKNINJA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
2024
2023
Cash flows from operating activities:
Net income
$
177,660
$
99,032
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
57,042
51,795
Share-based compensation
33,556
3,165
Provision for credit losses
2,525
1,218
Non-cash lease expense
9,210
6,383
Deferred income taxes, net
(17,469
)
(5,864
)
Other
989
392
Changes in operating assets and liabilities:
Accounts receivable
(100,560
)
(143,549
)
Inventories
(142,310
)
16,008
Prepaid expenses and other assets
(53,040
)
78,613
Accounts payable
47,026
33,605
Tax payable
(9,848
)
(1,326
)
Operating lease liabilities
(3,236
)
(10,165
)
Accrued expenses and other liabilities
(21,476
)
71,078
Net cash (used in) provided by operating activities
(19,931
)
200,385
Cash flows from investing activities:
Purchase of property and equipment
(53,801
)
(46,273
)
Purchase of intangible asset
(4,761
)
(1,120
)
Capitalized internal-use software development
(654
)
(123
)
Other investing activities, net
—
(300
)
Net cash used in investing activities
(59,216
)
(47,816
)
Cash flows from financing activities:
Repayment of debt
(10,125
)
(37,501
)
Proceeds from borrowings under revolving credit facility
115,000
—
Distribution paid to Former Parent
—
(60,283
)
Net ordinary shares withheld for taxes upon issuance of restricted stock units
(40,215
)
—
Net cash provided by (used in) financing activities
64,660
(97,784
)
Effect of exchange rates changes on cash
(1,436
)
6,031
Net decrease in cash, cash equivalents, and restricted cash
(15,923
)
60,816
Cash, cash equivalents, and restricted cash at beginning of period
154,061
218,770
Cash, cash equivalents, and restricted cash at end of period
$
138,138
$
279,586
Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we regularly review other financial measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts, and make strategic decisions.
The key non-GAAP financial measures we consider are Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income Per Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Net Sales growth on a constant currency basis. These non-GAAP financial measures are used by both management and our Board, together with comparable GAAP information, in evaluating our current performance and planning our future business activities. These non-GAAP financial measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and/or which management considers to be unrelated to our core operations and excludes the financial results from our former Japanese subsidiary, SharkNinja Co., Ltd. (“SNJP”), and our Asia Pacific Region and Greater China ("APAC") distribution channels, both of which were transferred to JS Global Lifestyle Company Limited (“JS Global”) concurrently with the separation (the “Divestitures”), as well as the cost of sales from (i) inventory markups that were eliminated as a result of the transition of certain product procurement functions from a subsidiary of JS Global to SharkNinja concurrently with the separation and (ii) costs related to the transitional Sourcing Services Agreement with JS Global that was entered into in connection with the separation (collectively, the “Product Procurement Adjustment”). Management believes that tracking and presenting these non-GAAP financial measures provides management and the investment community with valuable insight into our ongoing core operations, our ability to generate cash and the underlying business trends that are affecting our performance. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry and to better understand and interpret the results of the ongoing business following the separation and distribution. These non-GAAP financial measures should not be viewed as a substitute for our financial results calculated in accordance with GAAP and you are cautioned that other companies may define these non-GAAP financial measures differently.
SharkNinja does not provide a reconciliation of forward-looking Adjusted Net Income and Adjusted EBITDA to GAAP net income or of Adjusted Net Income Per Share to net income per share, diluted because such reconciliations are not available without unreasonable efforts. This is due to the inherent difficulty in forecasting with reasonable certainty certain amounts that are necessary for such reconciliations, including, in particular, the realized and unrealized foreign currency gains or losses reported within other expense. For the same reasons, we are unable to forecast with reasonable certainty all deductions and additions needed in order to provide forward-looking GAAP net income at this time. The amount of these deductions and additions may be material, and, therefore, could result in forward-looking GAAP net income being materially different or less than forward-looking Adjusted Net Income, Adjusted EBITDA, and Adjusted Net Income Per Share. See “Forward-looking statements” above.
We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our Divestitures. We believe that Adjusted Net Sales is an appropriate measure of our performance because it eliminates the impact of our Divestitures that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Net Sales to the most comparable GAAP measure, net sales, for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except %)
2024
2023
2024
2023
Net sales
$
1,248,658
$
950,312
$
2,314,886
$
1,805,594
Divested subsidiary net sales adjustment(1)
—
(44,700
)
—
(64,349
)
Adjusted Net Sales(2)
$
1,248,658
$
905,612
$
2,314,886
$
1,741,245
(1)
Adjusted for net sales from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023.
(2)
The following tables reconcile Adjusted Net Sales to net sales per product category, for the periods presented:
Three Months Ended June 30, 2024
Three Months Ended June 30, 2023
($ in thousands, except %)
Net sales
Divested subsidiary adjustment
Adjusted Net Sales
Net sales
Divested subsidiary adjustment
Adjusted Net Sales
Cleaning Appliances
$
466,115
$
—
$
466,115
$
413,797
$
(26,177
)
$
387,620
Cooking and Beverage Appliances
379,277
—
379,277
343,050
(3,486
)
339,564
Food Preparation Appliances
264,911
—
264,911
143,376
(4,369
)
139,007
Other
138,355
—
138,355
50,089
(10,668
)
39,421
Total net sales
$
1,248,658
$
—
$
1,248,658
$
950,312
$
(44,700
)
$
905,612
Six Months Ended June 30, 2024
Six Months Ended June 30, 2023
($ in thousands, except %)
Net sales
Divested subsidiary adjustment
Adjusted Net Sales
Net sales
Divested subsidiary adjustment
Adjusted Net Sales
Cleaning Appliances
$
888,035
$
—
$
888,035
$
828,667
$
(42,554
)
$
786,113
Cooking and Beverage Appliances
708,918
—
708,918
599,732
(4,971
)
594,761
Food Preparation Appliances
469,948
—
469,948
261,224
(6,156
)
255,068
Other
247,985
—
247,985
115,971
(10,668
)
105,303
Total net sales
$
2,314,886
$
—
$
2,314,886
$
1,805,594
$
(64,349
)
$
1,741,245
We define Adjusted Gross Profit as gross profit as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from the Product Procurement Adjustment. We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross Margin are appropriate measures of our operating performance because each eliminates the impact our Divestitures and certain other adjustments that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to the most comparable GAAP measure, gross profit and gross margin, respectively, for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except %)
2024
2023
2024
2023
Net sales
$
1,248,658
$
950,312
$
2,314,886
$
1,805,594
Cost of sales
(647,759
)
(553,391
)
(1,187,370
)
(1,008,130
)
Gross profit
600,899
396,921
1,127,516
797,464
Gross margin
48.1
%
41.8
%
48.7
%
44.2
%
Divested subsidiary net sales adjustment(1)
—
(44,700
)
—
(64,349
)
Divested subsidiary cost of sales adjustment(2)
—
24,460
—
37,487
Product Procurement Adjustment(3)
13,207
16,923
28,305
29,794
Adjusted Gross Profit
$
614,106
$
393,604
$
1,155,821
$
800,396
Adjusted Net Sales
$
1,248,658
$
905,612
$
2,314,886
$
1,741,245
Adjusted Gross Margin
49.2
%
43.5
%
49.9
%
46.0
%
(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023.
(2)
Adjusted for cost of sales from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023.
(3)
Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SharkNinja (Hong Kong) Company Limited (“SNHK”), and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
We define Adjusted Operating Income as operating income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) amortization of certain acquired intangible assets, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including operating income from our Divestitures and cost of sales from our Product Procurement Adjustment.
The following table reconciles Adjusted Operating Income to the most comparable GAAP measure, operating income, for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands)
2024
2023
2024
2023
Operating income
$
103,836
$
55,632
$
258,778
$
178,262
Share-based compensation(1)
14,130
2,317
33,556
3,165
Litigation costs(2)
7,165
461
13,656
635
Amortization of acquired intangible assets(3)
4,897
4,897
9,794
9,794
Transaction-related costs(4)
—
16,625
1,342
35,093
Product Procurement Adjustment(5)
13,207
16,923
28,305
29,794
Divested subsidiary operating income adjustment(6)
—
(8,190
)
—
(8,743
)
Adjusted Operating Income
$
143,235
$
88,665
$
345,431
$
248,000
(1)
Represents non-cash expense related to restricted stock unit awards issued from the SharkNinja and JS Global equity incentive plans.
(2)
Represents litigation costs incurred for certain patent infringement claims and false advertising claims against us.
(3)
Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculating Adjusted Operating Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations.
(4)
Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(5)
Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(6)
Adjusted for operating income from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023.
We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) amortization of certain acquired intangible assets, (v) certain transaction-related costs, (vi) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment and (vii) the tax impact of the adjusted items.
Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
The following table reconciles Adjusted Net Income and Adjusted Net Income Per Share to the most comparable GAAP measures, net income and net income per share, diluted, respectively, for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except share and per share amounts)
2024
2023
2024
2023
Net income
$
68,048
$
11,936
$
177,660
$
99,032
Share-based compensation(1)
14,130
2,317
33,556
3,165
Litigation costs(2)
7,165
461
13,656
635
Foreign currency (gains) losses, net(3)
(580
)
35,468
1,587
39,617
Amortization of acquired intangible assets(4)
4,897
4,897
9,794
9,794
Transaction-related costs(5)
—
16,625
1,342
35,093
Product Procurement Adjustment(6)
13,207
16,923
28,305
29,794
Tax impact of adjusting items(7)
(7,239
)
(16,872
)
(17,715
)
(25,982
)
Divested subsidiary net income adjustment(8)
—
(6,585
)
—
(6,980
)
Adjusted Net Income
$
99,628
$
65,170
$
248,185
$
184,168
Net income per share, diluted
$
0.48
$
0.09
$
1.26
$
0.71
Adjusted Net Income Per Share
$
0.71
$
0.47
$
1.76
$
1.33
Diluted weighted-average number of shares used in computing net income per share and Adjusted Net Income Per Share(9)
140,924,298
138,982,872
140,813,662
138,982,872
(1)
Represents non-cash expense related to restricted stock unit awards issued from the SharkNinja and JS Global equity incentive plans.
(2)
Represents litigation costs incurred for certain patent infringement claims and false advertising claims against us.
(3)
Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.
(4)
Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculated Adjusted Net Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations.
(5)
Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(6)
Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(7)
Represents the income tax effects of the adjustments included in the reconciliation of net income to Adjusted Net Income determined using the tax rate of 22.0%, which approximates our effective tax rate, excluding (i) divested subsidiary net income adjustment described in footnote (8), and (ii) certain share-based compensation costs and separation and distribution-related costs that are not tax deductible.
(8)
Adjusted for net income (loss) from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023.
(9)
In calculating net income per share and Adjusted Net Income Per Share, we used the number of shares transferred in the separation and distribution for the denominator for all periods prior to completion of the separation and distribution on July 31, 2023.
We define EBITDA as net income excluding: (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including Adjusted EBITDA from our Divestitures and cost of sales from our Product Procurement Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are appropriate measures because they facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results according to GAAP, we believe provide a more complete understanding of the factors and trends affecting our business than GAAP measures alone.
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP measure, net income, for the periods presented:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands, except %)
2024
2023
2024
2023
Net income
$
68,048
$
11,936
$
177,660
$
99,032
Interest expense, net
14,844
7,031
29,566
15,520
Provision for income taxes
21,633
3,995
55,489
28,260
Depreciation and amortization
29,225
29,038
57,042
51,792
EBITDA
133,750
52,000
319,757
194,604
Share-based compensation(1)
14,130
2,317
33,556
3,165
Litigation costs(2)
7,165
461
13,656
635
Foreign currency losses (gains), net(3)
(580
)
35,468
1,587
39,617
Transaction-related costs(4)
—
16,625
1,342
35,093
Product Procurement Adjustment(5)
13,207
16,923
28,305
29,794
Divested subsidiary Adjusted EBITDA adjustment(6)
—
(10,187
)
—
(11,285
)
Adjusted EBITDA
$
167,672
$
113,607
$
398,203
$
291,623
Adjusted Net Sales
$
1,248,658
$
905,612
$
2,314,886
$
1,741,245
Adjusted EBITDA Margin
13.4
%
12.5
%
17.2
%
16.7
%
(1)
Represents non-cash expense related to restricted stock unit awards issued from the SharkNinja and JS Global equity incentive plans.
(2)
Represents litigation costs incurred for certain patent infringement claims and false advertising claims against us.
(3)
Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.
(4)
Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(5)
Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(6)
Adjusted for Adjusted EBITDA from SNJP and the APAC distribution channels for the three and six months ended June 30, 2024 and 2023, as if such Divestitures occurred on January 1, 2023. The divested subsidiary Adjusted EBITDA adjustment represents net (loss) income from our Divestitures excluding interest expense, income tax expense, depreciation and amortization expense and foreign currency gains and losses recorded at the subsidiary level.
We refer to growth rates in Adjusted Net Sales on a constant currency basis so that results can be viewed without the impact of fluctuations in foreign currency exchange rates. These amounts are calculated by translating current year results at prior year average exchange rates. We believe elimination of the foreign currency translation impact provides useful information in understanding and evaluating trends in our operating results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808296908/en/
Investor Relations: Arvind Bhatia, CFA SVP, Investor Relations IR@sharkninja.com
Anna Kate Heller ICR SharkNinja@icrinc.com
Media Relations: Sarah McKinney VP, Corporate Communications PR@sharkninja.com
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