Badcock as a business segment has generated $52.27 million in EBITDA over the last two quarters. Franchise Group, Inc. ( NASDAQ: FRG) Q3 2022 Earnings Conference Call November 3, 2022 4:30 PM ET Company Participants Andrew Kaminsky - EVP & CAO PSP is one of the leading US pet care stores with more than 644 locations across the country, with 414 of them currently franchised. It is mandatory to procure user consent prior to running these cookies on your website. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. Brian R. Kahn who bought 100,000 units worth Brian R. Kahn's largest sale order was 443 units , worth over We also use third-party cookies that help us analyze and understand how you use this website. While we maintain a very bullish outlook on the company, as with any investment, the thesis itself carries its fair share of challenges. Brian took multiple opportunities to acquire more shares in the company around the $34-37 range, either directly or through his investment vehicle Vintage Capital Management. On December 31, 2022, total cash on hand was approximately $80.8 million and outstanding term debt was approximately $1.1 billion. By clicking Accept, you consent to the use of ALL the cookies. (In thousands, except share count and per share data), Current installments of long-term obligations, net, Current installments of debt secured by accounts receivable, net, Long-term obligations, net, excluding current installments, Non-current debt secured by accounts receivable, net, Common stock, $0.01 par value per share, 180,000,000 and 180,000,000 shares authorized, 34,925,773 and 40,296,688 shares issued and outstanding at December31, 2022 and December25, 2021, respectively, Preferred stock, $0.01 par value per share, 20,000,000 and 20,000,000 shares authorized, 4,541,125 and 4,541,125 shares issued and outstanding at December31, 2022 and December25, 2021, respectively, Selling, general, and administrative expenses, Income (loss) from continuing operations before income taxes, Income (loss) from discontinued operations, net of tax. This business segment generated $93.2 million in EBITDA for 2021 and has been one of the best-performing segments during the macroeconomic downturn as it generated $51.46 million in EBITDA in the first two quarters of 2022. Investor Relations Contact:Andrew F. KaminskyEVP & Chief Administrative OfficerFranchise Group, Inc.akaminsky@franchisegrp.com(914) 939-5161, Top 3 things to know today Salesforce earnings, Tesla investor day, Fed officials rate outlook, Salesforce stock continues to rise amid earnings beat, layoffs, Elliott Management nominations, Congress sends Biden a measure to stop woke 401(k)s, Stocks moving in after hours: Okta, Snowflake, Tesla, Salesforce. I'm on the call with Brian Kahn, Franchise All rights reserved. Franchise Group is operating a roll-up strategy of acquiring mostly poorly-led, in-distress businesses through leveraged buyouts. Why? Live from New Announces Fourth Quarter and Full Fiscal Year 2022 Financial Results, Badcock Home Furniture &more using MPO to Digitize its Inbound Supply Chain, Franchise Group Announces Participation in Upcoming Investor Conferences, Franchise Group, Inc. to Announce Fiscal 2022 Fourth Quarter and Full Year Financial Results on February 28, 2023, Pathlight Capital Increases Term Loan Credit Facility for B. Riley Receivables II, LLC To $198.7MM, Franchise Group, Inc. Sylvian Learning Overview (FRG August Investor Presentation). The Company does not provide a quantitative reconciliation of forward-looking, Non-GAAP financial measures such as forecasted Adjusted EBITDA or Non-GAAP EPS to the most directly comparable GAAP financial measures because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading. The Buyout Offer Might Be Lowered. Non-GAAP EPS is calculated by adding the tax effected impact of adjustments to EBITDA to net income on a per share basis. Mr. Seeton has served as the Chief Financial Officer of Franchise Group, Inc. since October 28, 2019. Brian R. Kahn, Chief Executive Officer, The noise surrounding the recent developments has been picked up by shorts sellers who at this point sold short roughly 10% of the float, another indication that there is no clear consensus on the future prospects of Franchise Group, at least in the short to mid-term. This impressive story began when current CEO Brian Khan's investment vehicle, Vintage Capital Management, acquired control of Liberty Tax, then publicly traded under the stock ticker "TAXA". What led to drop in income for Franchise Group in Q3? Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, many of which are beyond the control of the Company. These cookies will be stored in your browser only with your consent. Our franchising activity continued to accelerate across FRG in 2022. $3.75M . Management seeks to rapidly restructure the acquiree and refranchise the now-owned corporate locations leading to an influx of cash which is directed to aggressively deleverage the company. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise. He is also the founder and managing partner of Kahn Capital Management, which later became Vintage Capital Management, through which the entire story of Franchise Group began. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. The more obvious one is that the recession-headed economy has the capacity to cause plenty of headaches for a part of the more home improvement-oriented portfolio. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. New management had the idea to turn the former publicly traded tax preparer into a scalable franchise holding conglomerate through a series of aggressive acquisitions. There is something about avoiding a "fixed" dividend and having it tied towards a performance goal that resonates extremely well with me. FactSet (a) does not make any express or implied warranties of any kind regarding the data, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use; and (b) shall not be liable for any errors, incompleteness, interruption or delay, action taken in reliance on any data, or for any damages resulting therefrom. No matter which way one looks at things, Franchise Group is a unique and mesmerizing special situation investment that could quite possibly be the most attractive investment opportunity we have encountered this year. Mr. Kahn received a B.A. Presently, Mr. Kahn holds the position of President, Chief Executive Officer & Director at Franchise Group, Inc., President & Chief Executive Officer for Franchise Group Intermediate Holdco LLC (a subsidiary of Franchise Group, Inc.), Managing Partner at Vintage Capital Management LLC, Investment Manager at Vintage Albany Partners GP LLC and General Partner for Vintage Albany Partners LP (both are subsidiaries of Vintage Capital Management LLC) and Chairman & Chief Executive Officer for Spectrum Control, Inc. Net loss was approximately $68.6 WebBrian R. Kahn Managing Partner. Franchise Group, Inc. ( NASDAQ: FRG) Q3 2022 Earnings Conference Call November 3, 2022 4:30 PM ET Thank you for standing by and welcome to Conference Call -- the Franchise Group Third Quarter 2022 Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I am not receiving compensation for it (other than from Seeking Alpha). President, Chief Executive Officer & Director. I have no business relationship with any company whose stock is mentioned in this article. This is possibly the best testament to the efficiency of the management capital allocation. DELAWARE, Ohio Franchise Group, which owns American Freight, Badcock Home Furniture & more and Buddys, posted gains in revenues but losses in income for the fourth quarter and full fiscal year 2022. The acquirees often have one thing in common, they operate businesses that are franchisable but remain corporate-led and operated to a large extent. Data may be intentionally delayed pursuant to supplier requirements. over $3.75M on May 11, 2022. Following in the footsteps of Charlie Munger. Since 2009, Mr. Laurence has also been a partner of Vintage Capital Management, which is a value-oriented, operations-focused, private and public equity investor specializing in the consumer, aerospace and defense, and manufacturing sectors. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. This net worth estimate does not reflect any other investments that Mr. Kahn may own. Is this happening to you frequently? Reconciliation of Non-GAAP Net Income and EPSBelow are reconciliations of Net Income/(Loss) from continuing operations to Non-GAAP Net Income and Net Income/(Loss) from continuing operations per diluted share to Non-GAAP EPS for the three and twelve months ended December 31, 2022. The online luxury marketplace saw revenues fall in 2022 as c[], President and CEO Brian Kahn noted that performance was in l[], Target this year is planning for both the known knowns and t[], Office furniture giant Haworth reported $2.5 billion in 2022[], Sleep retailer Mattress Firms first quarter sales slid to[], La-Z-Boy's third quarter conference call provided insights i[]. This fact combined with a, to acquire the retail giant Kohl's Corporation (, ) for $60 per share at a roughly $8 billion valuation resulted in tremendous down-pressure being applied to the company's stock price. The company, then facing multiple headwinds and an uncertain future, was acquired by Franchise Group for just $208 million in Q3 2019. Franchise Group chief executive officer Brian Kahn did not share publicly at the time what his plan was, should the deal move ahead. At the start of July, Kohls leaders said the negotiations were over, and Kohls would remain an independent business. Andrew Kaminsky - Chief Administrative Officer. Estimates exclude potential acquisitions, divestitures or refranchising activities. WebBrian R Kahn, Franchise Group Inc: Profile and Biography - Bloomberg Markets Bloomberg TV+ Bloomberg Daybreak Asia Bloomberg Daybreak Asia. For the Three Months Ended December 31, 2022, Stock-based and long term executive compensation, Securitized accounts receivable interest income, Securitized accounts receivable bad debt reserve, Prepayment penalty on early debt repayment, Right-of-use asset and long-term asset impairment, Gain on sale-leaseback and owned properties, net, For the Twelve Months Ended December 31, 2022. The following table summarizes Revenue, Adjusted EBITDA, and Net Income/(Loss) for each of these segments. This means that a dividend of $0.16 per share in the times before Brian took over has been nurtured to a $0.63 per share quarterly dividend today. Yeah, so we authorized, at our two Board meetings ago, we authorized a $500 million buyback over the next few years. The company is being led by an experienced and well-respected value-oriented investor, Brian Kahn. Copyright FactSet Research Systems Inc. All rights reserved. Mr. Laurence is also a director of non-profits Good Sports, Inc. and Beth Israel Deaconess Hospital Milton. While the growth aspect of the company remains largely subservient to M&A execution down the road, the dividend is still well supported by fundamentals, even when accounting for the downgraded guidance, which lowered EBITDA estimates to $390 million for this year. The company is one of the largest home-furnishing retailers in the country with 384 stores mostly operating through the independent dealership model. Our financial performance in the fourth quarter was in line with the outlook we provided in November, saidBrian Kahn, Franchise Groups president and CEO.Our franchising activity continued to accelerate across FRG in 2022. Learn More about Brian Randall Kahn's net worth. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. Title: POS Specialist. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. Mr. Evans holds a Bachelor of Science degree in Business Administration from East Carolina University. Franchise Group, Inc. (NASDAQ:FRG) shareholders (or potential shareholders) will be happy to see that the President, Brian Kahn, recently bought a The team at Franchise Group, Inc. is comprisedof former franchisors and franchisees, entrepreneurs, investors and executives. Brian Kahn, Franchise Groups President and CEO stated, I am proud of FRGs overall performance in the first quarter. Readers are cautioned not to rely on the forward-looking statements contained in this press release. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Learn More on Brian Randall Kahn's trading history. Net income (loss) from discontinued operations: Income (loss) per share from continuing operations. Management incentives are completely aligned with the rest of the shareholders as the CEO and the rest of the insiders own more than 30% of the company and are still buying more. The business was envisioned as a one-stop shop for affordable furniture, mattresses, and appliances operating in the bottom value segment of the market. Given the density of the ownership structure, the initiative would significantly inflate the share price which would degrade its effectiveness. This is exactly where the brilliance of the strategy the company is utilizing comes under the spotlight. Mr. Laurence joined the Firm in 2009 and is responsible for all aspects of transaction sourcing, due diligence and execution. Copyright 2023 Surperformance. Badcock Home Furniture & More - is the latest successful acquisition by the franchise conglomerate. International stock quotes are delayed as per exchange requirements. For the full fiscal year 2022, total reported revenue for Franchise Group was $4.4 billion, up 35.1% from $3.3 billion in 2021. Evans holds a Bachelor of Science degree in business Administration from East Carolina University, i am receiving! New territories sold and a backlog across all brands of 482 locations with 259 new territories and! With 384 stores mostly operating through the independent dealership model year with 259 new territories sold and backlog... $ 1.1 billion territories sold and a backlog across all brands of locations... Investments that mr. Kahn may own from East Carolina University, due diligence and execution the would. 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