UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 8, 2021
OneSpaWorld Holdings Limited
(Exact name of registrant as specified in its charter)
Commonwealth of The Bahamas | 001-38843 | Not Applicable | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Harry B. Sands, Lobosky Management Co. Ltd. Office Number 2 Pineapple Business Park Airport Industrial Park P.O. Box N-624 Nassau, Island of New Providence, Commonwealth of The Bahamas |
N/A | |
(Address of principal executive offices) | (Zip Code) |
Tel: (242) 322-2670
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Shares, par value (U.S.) $0.0001 per share |
OSW | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☒ Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory Note
This Current Report on Form 8-K is being filed by OneSpaWorld Holdings Limited (the Company) solely to incorporate by reference into the Companys Registration Statement on Form S-3 (File No. 333-239628), which was declared effective on July 22, 2020, the information contained in this Current Report, including the exhibit hereto. Certain of the information in this Current Report was previously furnished by the Company in its Current Report on Form 8-K filed by the Company on March 3, 2021.
This Current Report and Exhibit 99.1 hereto contain certain financial measures that are considered non-GAAP financial measures, as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended. Exhibit 99.1 to this Report also contains a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP), as well as the reasons why the Companys management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Companys financial condition and results of operations. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.
This Current Report includes forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the Company may differ from its actual results and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as expect, estimate, project, budget, forecast, anticipate, intend, plan, may, will, could, should, believes, predicts, potential, continue, or the negative or other variations thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, expectations with respect to future performance of the Company, including projected financial information (which is not audited or reviewed by the Companys auditors), and the future plans, operations and opportunities for the Company and other statements that are not historical facts. These statements are based on the current expectations of the Companys management and are not predictions of actual performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Factors that may cause such differences include, but are not limited to: the impact of the COVID-19 pandemic on the Companys business and its results of operation and liquidity for the foreseeable future; the demand for the Companys services together with the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors or changes in the business environment in which the Company operates; changes in consumer preferences or the market for the Companys services; changes in applicable laws or regulations; the availability or competition for opportunities for expansion of the Companys business; difficulties of managing growth profitably; the loss of one or more members of the Companys management team; loss of a major customer and other risks and uncertainties included from time to time in the Companys reports (including all amendments to those reports) filed with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive. You should not place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing the Companys assessments as of any date subsequent to the date of this communication.
Item 8.01 | Other Events |
On March 3, 2021, the Company announced certain of its operating and financial results for its fourth quarter and fiscal year ended December 31, 2020.
Operating Results
The Companys fourth quarter and 2020 fiscal year performance was materially impacted by the global COVID-19 pandemic, including actions taken by cruise lines, hotels and resorts and governmental authorities around the world. These actions include the U.S. Centers for Disease Control and Preventions (CDC) No Sail Order issued on March 14, 2020 and extended on April 9, 2020, July 16, 2020 and September 30, 2020 and the CDC issued a Framework for Conditional Sailing Order on October 30, 2020, which will remain in effect until the earliest of: (1) the expiration of the Secretary of Health and Human Services declaration that COVID-19 constitutes a public health emergency, (2) the CDC Director rescinds or modifies the order based on specific public health or other considerations, or (3) November 1, 2021. Pursuant to the Framework for Conditional Sailing Order, the No Sail Order has been lifted and the cruise industry will work with the CDC on a phased in return-to-service, which will consist of three phases: (i) testing and implementing additional safeguards for crew members; (ii) conducting simulated voyages to test cruise operators ability to mitigate COVID-19 risk; and (iii) providing a certification to ships that meet specified requirements, thereby allowing for a phased return to cruise ship passenger voyages.
The Company ended the 2020 fiscal year with health and wellness centers on 163 ships, all of which were closed as of March 14, 2020, and all except one remained closed at year end pending resumption of voyages.
The Company ended the 2020 fiscal year at 54 destination resort spas, all of which were closed as of March 26, 2020. At year-end fiscal 2020, 45 destination resort spas were in operation.
The Company repatriated all of its employees from COVID related cruise suspensions, eliminating all ongoing expenses related to these repatriated employees. 18 cruise ship personnel have re-embarked on vessels that sailed in the fourth quarter of fiscal 2020.
Financial Results
Fourth Quarter Ended December 31, 2020 Compared to December 31, 2019
Results of operations in the fourth quarter of fiscal 2020 compared to the fourth quarter of fiscal 2019 were materially adversely impacted by the global COVID-19 pandemic that resulted in cancellation of the Companys voyages and the closing of many destination resort health and wellness centers as of the beginning of the first quarter.
Total revenues for the fourth quarter of fiscal 2020 were $3.8 million, as compared to $139.4 million in the fourth quarter of fiscal 2019. Revenues generated in this years fourth quarter were primarily related to the 45 destination resort spas that were open during the quarter and e-commerce sales on the Companys timetospa.com website.
Cost of services for the fourth quarter of fiscal 2020 was $6.9 million, as compared to $95.6 million in the fourth quarter of fiscal 2019. Cost of products was $6.8 million in the fourth quarter of fiscal 2020 and included a $4.9 million charge for the write down of inventory that is expected to expire as a result of the extended pause in operations caused by the COVID-19 pandemic and damaged inventories. In comparison, cost of products was $28.2 million in the fourth quarter of fiscal 2019.
Net (loss) income attributable to OneSpaWorld was ($28.0) million in the fourth quarter of fiscal 2020, as compared to $1.1 million in the fourth quarter of fiscal 2019. Adjusted net (loss) income was ($20.7) million in the fourth quarter of fiscal 2020, as compared to $6.7 million in the fourth quarter of fiscal 2019.
Adjusted EBITDA was ($15.4) million in the fourth quarter of fiscal 2020, as compared to $13.0 million in the fourth quarter of fiscal 2019.
Unlevered after-tax free cash flow was ($15.9) million in the fourth quarter of fiscal 2020, as compared to $12.5 million in the fourth quarter of fiscal 2019.
Fiscal Year Ended December 31, 2020 Compared to December 31, 2019
Results of operations for the 2020 fiscal year compared to the 2019 fiscal year were materially adversely impacted by the global COVID-19 pandemic that resulted in cancellation of the Companys voyages beginning March 14, 2020 and the closing of destination resort health and wellness centers beginning March 26, 2020.
Total revenues were $120.9 million in the 2020 fiscal year, as compared to $562.2 million in the 2019 fiscal year, reflecting the decline in operating capacity driven by forced closures of its health and wellness centers aboard cruise ships and at destination resorts. Revenues primarily reflected: (i) first quarter voyages ahead of the March 14, 2020 CDC No-Sail Order; (ii) destination resort spas that were open during a portion of the year, and (iii) e-commerce sales on the Companys timetospa.com website.
Cost of services were $107.3 million in the 2020 fiscal year, as compared to $369.7 million in the 2019 fiscal year. Cost of products were $32.0 million in the 2020 fiscal year and included a $6.0 million charge for the write down of inventory that is expected to expire as a result of the extended pause in operations caused by the COVID-19 pandemic and damaged inventories. In comparison, cost of products was $114.3 million in the 2019 fiscal year.
Net (loss) income attributable to OneSpaWorld was ($280.5) million in the 2020 fiscal year, as compared to ($41.0) million in the 2019 fiscal year. Adjusted net (loss) income was ($65.8) million in the 2020 fiscal year, as compared to $32.6 million in the 2019 fiscal year.
Adjusted EBITDA totaled ($42.7) million in the 2020 fiscal year, as compared to $58.7 million in the 2019 fiscal year.
Unlevered after-tax free cash flow was ($45.0) million, as compared to $55.0 million in the 2019 fiscal year.
Cash and borrowing capacity under the Companys line of credit totaled $56.4 million at year-end fiscal 2020, as compared to $33.9 million at year-end fiscal 2019. Cash at year-end fiscal 2020 was $43.4 million and included $11.6 million in gross proceeds from the sale of 1.3 million shares as part of the Companys $50 million, at-the-market equity offering program (ATM program). At year-end, $38.4 million remained available under the ATM program. Availability under the Companys line of credit was $13.0 million at year end fiscal 2020 compared to $20.0 million at year end fiscal 2019. The cash burn rate for the quarter of approximately $17 million was consistent with the Companys expectations. The Company noted that it continues to expect to have the resources to enable it to fund its operations with no significant voyages and destination resort spas in operation through March 2022.
Total debt, net of deferred financing costs, was $229.4 million at year-end fiscal 2020.
Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
Exhibit Number |
Description | |
99.1 |
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
OneSpaWorld Holdings Limited | ||||||
Date: March 8, 2021 | By: | /s/ Stephen B. Lazarus | ||||
Stephen B. Lazarus | ||||||
Chief Operating Officer and Chief Financial Officer |
Exhibit 99.1
ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
$ | % |
|
|
$ | % | |||||||||||||||||||||||||||
2020 | 2019 | Inc/(Dec) | Inc/(Dec) | 2020 | 2019 (1) | Inc/(Dec) | Inc/(Dec) | |||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||
Service revenues |
$ | 2,787 | $ | 107,231 | $ | (104,444 | ) | (97 | )% | $ | 93,682 | $ | 431,073 | $ | (337,391 | ) | (78 | )% | ||||||||||||||
Product revenues |
1,044 | 32,205 | (31,161 | ) | (97 | )% | 27,243 | 131,160 | (103,917 | ) | (79 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues |
3,831 | 139,436 | (135,605 | ) | (97 | )% | 120,925 | 562,233 | (441,308 | ) | (78 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
COST OF REVENUES AND OPERATING EXPENSES: |
||||||||||||||||||||||||||||||||
Cost of services |
6,929 | 95,617 | (88,688 | ) | (93 | )% | 107,258 | 369,680 | (262,422 | ) | (71 | )% | ||||||||||||||||||||
Cost of products |
6,750 | 28,179 | (21,429 | ) | (76 | )% | 31,976 | 114,310 | (82,334 | ) | (72 | )% | ||||||||||||||||||||
Administrative |
5,642 | 1,730 | 3,912 | 226 | % | 18,957 | 16,484 | 2,473 | 15 | % | ||||||||||||||||||||||
Salary and payroll taxes |
5,371 | 3,885 | 1,486 | 38 | % | 20,138 | 61,649 | (41,511 | ) | (67 | )% | |||||||||||||||||||||
Amortization of intangible assets |
4,205 | 4,061 | 144 | 4 | % | 16,823 | 13,929 | 2,894 | 21 | % | ||||||||||||||||||||||
Goodwill and Tradename impairment |
| | | NM | 190,777 | | 190,777 | NM | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total cost of revenues and operating expenses |
28,897 | 133,472 | (104,575 | ) | (78 | )% | 385,929 | 576,052 | (190,123 | ) | (33 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Income (loss) from operations |
(25,066 | ) | 5,964 | (31,030 | ) | (520 | )% | (265,004 | ) | (13,819 | ) | (251,185 | ) | (1818 | )% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
OTHER INCOME (EXPENSE), NET: |
||||||||||||||||||||||||||||||||
Interest expense |
(3,476 | ) | (4,088 | ) | 612 | 15 | % | (14,703 | ) | (19,838 | ) | 5,135 | 26 | % | ||||||||||||||||||
Loss on extinguishment of debt |
| | | NM | | (3,413 | ) | 3,413 | 100 | % | ||||||||||||||||||||||
Interest income |
11 | 8 | 3 | 38 | % | 30 | 43 | (13 | ) | (30 | )% | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other income (expense), net |
(3,465 | ) | (4,080 | ) | 615 | 15 | % | (14,673 | ) | (23,208 | ) | 8,535 | 37 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(Loss) Income before provision for income taxes |
(28,531 | ) | 1,884 | (30,415 | ) | (1614 | )% | (279,677 | ) | (37,027 | ) | (242,650 | ) | (655 | )% | |||||||||||||||||
PROVISION (BENEFIT) FOR INCOME TAXES |
(556 | ) | (231 | ) | (325 | ) | (141 | )% | 814 | (11 | ) | 825 | 7500 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net (loss) income |
(27,975 | ) | 2,115 | (30,090 | ) | (1423 | )% | (280,491 | ) | (37,016 | ) | (243,475 | ) | (658 | )% | |||||||||||||||||
Net income attributable to noncontrolling interest |
| 972 | (972 | ) | (100 | )% | | 4,012 | (4,012 | ) | (100 | )% | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net (loss) income attributable to OneSpaWorld |
$ | (27,975 | ) | $ | 1,143 | $ | (29,118 | ) | (2548 | )% | $ | (280,491 | ) | $ | (41,028 | ) | $ | (239,463 | ) | (584 | )% | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net (loss) income attributable to OneSpaWorld per share: |
||||||||||||||||||||||||||||||||
Basic |
$ | (0.33 | ) | $ | 0.02 | $ | (3.77 | ) | $ | (0.25 | )(2) | |||||||||||||||||||||
Diluted |
$ | (0.33 | ) | $ | 0.02 | $ | (3.77 | ) | $ | (0.25 | )(2) | |||||||||||||||||||||
Weighted average shares outstanding: |
||||||||||||||||||||||||||||||||
Basic |
85,148 | 61,118 | 74,359 | 61,118 | ||||||||||||||||||||||||||||
Diluted |
85,148 | 75,115 | 74,359 | 61,118 |
1) | The presentation of the results of operations for fiscal year ended December 31, 2019 represents the sum of the results of operations for the predecessor period from January 1, 2019 to March 19, 2019 prior to the Business Combination and successor period to the Business Combination from March 20, 2019 to December 31, 2019. The Company believes this non-GAAP presentation of its results of operations for year-to-date fiscal year 2019 provides more comparability to the same period of fiscal 2020. |
2) | The calculation of net loss per share for year-to-date December 31, 2019 excludes the net loss of ($25,459) for the predecessor period from January 1, 2019 to March 19, 2019 prior to the Business Combination. The Company believes this presentation of diluted loss per share provides more comparability for the current and year-to-date successor periods to the Business Combination. |
Note Regarding Non-GAAP Financial Information
The information herein includes financial measures that are not calculated in accordance with GAAP, including Adjusted Net Income, Adjusted Net Income Per Diluted Share, Adjusted EBITDA and Unlevered After-Tax Free Cash Flow.
The Company defines Adjusted Net Income as net (loss) income, adjusted for non-controlling interest and the impact of certain other items, including normalized interest expense, related party adjustments, increase in depreciation and amortization expense resulting from the Business Combination, non-cash stock-based compensation, normalized tax expense, non-cash prepaid expenses and non-recurring expenses incurred in connection with the Business Combination. Adjusted Net Income Per Diluted Share is defined as Adjusted Net Income divided by the weighted average diluted shares outstanding during the period, as if such shares had been outstanding during the entire three-month and twelve-month periods ended December 31, 2020.
The Company defines Adjusted EBITDA as income (loss) from continuing operations before interest expense, provision (benefit) for income taxes, depreciation and amortization and non-controlling interest, adjusted for the impact of certain other items, including non-cash stock-based compensation expense, non-cash prepaid expenses, related party adjustments, and non-recurring expenses incurred in connection with the Business Combination. All of these other items are reported in administrative expenses in the condensed consolidated and combined statements of operations.
The Company defines Unlevered After-Tax Free Cash Flow as Adjusted EBITDA minus capital expenditures and cash taxes paid.
The Company believes that these non-GAAP measures, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of the Companys results of operations under GAAP, are useful to investors as they are widely used measures of performance and the adjustments the Company makes to these non-GAAP measures provide investors further insight into the Companys profitability and additional perspectives in comparing the Companys performance to other companies and in comparing the Companys performance over time on a consistent basis. Adjusted Net Income, Adjusted Net Income Per Diluted Share, Adjusted EBITDA and Unlevered After-Tax Free Cash Flow have limitations as profitability measures in that they do not include total amounts for interest expense on the Companys debt and provision for income taxes, and the effect of the Companys expenditures for capital assets and certain intangible assets. In addition, all of these non-GAAP measures have limitations as profitability measures in that they do not include the effect of non-cash stock-based compensation expense and the impact of certain expenses related to items that are settled in cash. Because of these limitations, the Company relies primarily on its GAAP results.
In the future, the Company may incur expenses similar to those for which adjustments are made in calculating Adjusted EBITDA. The Companys presentation of Adjusted EBITDA should not be construed as a basis to infer that the Companys future results will be unaffected by extraordinary, unusual or non-recurring items.
Reconciliation of GAAP to Non-GAAP Financial Information
The following table reconciles Net (Loss) Income to Adjusted Net (Loss) Income attributable to OneSpaWorld for the fourth quarter and year-to-date periods ended December 31, 2020 and 2019 and Adjusted Net (Loss) Income attributable to OneSpaWorld Per Diluted Share for the fourth quarter and year-to-date periods ended December 31, 2020 and 2019 (amounts in thousands, except per share amounts):
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 (h) | |||||||||||||
Net (Loss) Income |
$ | (27,975 | ) | $ | 2,115 | $ | (280,491 | ) | $ | (37,016 | ) | |||||
Non-controlling Interest (a) |
| (972 | ) | | (4,012 | ) | ||||||||||
Interest Expense (b) |
| | | 2,947 | ||||||||||||
Loss on Extinguishment of Debt |
| | | 3,413 | ||||||||||||
Goodwill and trade name impairment charges |
| | 190,777 | | ||||||||||||
Related Party Adjustments (c) |
| | | 538 | ||||||||||||
Depreciation and Amortization(d) |
3,761 | 3,761 | 15,044 | 12,328 | ||||||||||||
Change in Control Payments (e) |
| | | 26,284 | ||||||||||||
Stock-Based Compensation |
2,990 | 187 | 4,950 | 20,683 | ||||||||||||
Business Combination Costs (f) |
| 1,559 | 1,619 | 7,160 | ||||||||||||
Addback for Non-Cash Prepaid Expenses (g) |
457 | | 457 | | ||||||||||||
Tax expense (i) |
52 | | 1,798 | 276 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted Net (Loss) Income attributable to OneSpaWorld |
$ | (20,715 | ) | $ | 6,650 | $ | (65,846 | ) | $ | 32,601 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted Net (Loss) Income attributable to OneSpaWorld Per Diluted Share |
$ | (0.24 | ) | $ | 0.09 | $ | (0.89 | ) | $ | 0.44 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted Weighted Average Shares Outstanding |
85,148 | 75,115 | 74,359 | 74,001 | ||||||||||||
|
|
|
|
|
|
|
|
The following table reconciles Net (Loss) Income to Adjusted EBITDA and Unlevered After-Tax Free Cash Flow for the fourth quarter and year-to-date periods ended December 31, 2020 and 2019 (amounts in thousands):
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 (h) | |||||||||||||
Net (Loss) Income |
$ | (27,975 | ) | $ | 2,115 | $ | (280,491 | ) | $ | (37,016 | ) | |||||
(Benefit) Provision for Income Taxes |
(556 | ) | (231 | ) | 814 | (11 | ) | |||||||||
Interest Income |
(11 | ) | (8 | ) | (30 | ) | (43 | ) | ||||||||
Non-controlling Interest (a) |
| (972 | ) | | (4,012 | ) | ||||||||||
Interest Expense |
3,476 | 4,088 | 14,703 | 19,838 | ||||||||||||
Loss on Extinguishment of Debt |
| | | 3,413 | ||||||||||||
Related Party Adjustments (c) |
| | | 538 | ||||||||||||
Goodwill and trade name impairment charges |
| | 190,777 | | ||||||||||||
Depreciation and Amortization |
6,182 | 6,281 | 24,453 | 21,595 | ||||||||||||
Change in Control Payments (e) |
| | | 26,284 | ||||||||||||
Stock-based Compensation |
2,990 | 187 | 4,950 | 20,683 | ||||||||||||
Business Combination Costs (f) |
| 1,559 | 1,619 | 7,160 | ||||||||||||
Addback for Non-Cash Prepaid Expenses (g) |
457 | | 457 | 276 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | (15,437 | ) | $ | 13,019 | $ | (42,748 | ) | $ | 58,705 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Capital Expenditures |
(338 | ) | (539 | ) | (2,132 | ) | (3,426 | ) | ||||||||
Cash Taxes |
(78 | ) | | (136 | ) | (244 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Unlevered After-Tax Free Cash Flow |
$ | (15,853 | ) | $ | 12,480 | $ | (45,016 | ) | $ | 55,035 | ||||||
|
|
|
|
|
|
|
|
a) | Non-controlling interest refers to net income attributable to a non-controlling interest in a consolidated subsidiary of OneSpaWorld. On February 14, 2020, the Company purchased the 40% non-controlling interest for $12.3 million in a combination of $10.8 million in cash and 98,753 shares of the Companys common stock at a share price of $15.26. |
b) | Interest expense refers to addback to adjust interest expense as if only the new debt financing resulting from the Business Combination was outstanding as of the beginning of the first quarter of fiscal 2018. |
c) | Related party adjustments refers to adjustments to reflect the impact of agreements with related parties, primarily OSW Predecessor supply agreements with a wholly-owned subsidiary of Steiner Leisure. |
d) | Depreciation and amortization refers to addback of purchase price adjustments to tangible and intangible assets resulting from the Business Combination. |
e) | Change in control payments relates to amounts paid to OSW Predecessor executives upon consummation of the Business Combination. |
f) | Business combination costs refers primarily to legal and advisory fees incurred by OneSpaWorld in connection with the Business Combination. |
g) | Addback for non-cash prepaid expenses refers to non-cash expenses incurred in connection with certain contracts. |
h) | The presentation of the results of operations for the fiscal year 2019 represents the sum of the results of operations for the predecessor period from January 1, 2019 to March 19, 2019 prior to the Business Combination and successor period to the Business Combination from March 20, 2019 to December 31, 2019. The Company believes this non-GAAP presentation of its results of operations for year-to-date fiscal year 2019 provides more comparability to the same period of fiscal 2020. |
i) | Valuation allowance related to the Companys 2020 beginning-of-year deferred tax assets that are not realizable. |