Announces Continued Double-DigitGrowth in Revenue and Gross Profit
Toronto, Ontario, May 31, 2023 (GLOBE NEWSWIRE) -- MiniLuxe Holding Corp. (TSXV: MNLX) today announced its financial results for the 13 weeks ended April 2, 2023 (“Q1 2023”). The fiscal year of MiniLuxe is a 52-week reporting cycle ending on the Sunday closest to December 31, which periodically necessitates a fiscal year of 53 weeks. FY2022 consisted of a 53-week period while all other fiscal years referred to in this release consist of 52-week periods. All quarters referred to in this release consist of 13-week periods. Unless otherwise specified, all amounts are reported in U.S. dollars.
MiniLuxe is pleased to announce continued double-digit growth in year-over-year (“YOY”) revenue and YOY gross profit demonstrating resiliency despite a challenging macro-economic backdrop. Q1 2023 revenue increased 18% versus Q1 2022 at $5.2M (all figures in US$ unless otherwise noted). Same-studio revenue hit a record level in Q1 2023, while demonstrating 21% growth on 2019 revenue (pre-COVID comparable) on a like-for-like basis of MiniLuxe on-premises fleet studio units open in 2019 vs those open in 2023. Overall growth of MiniLuxe’s most loyal customer base (those returning at least 20 visits or more per year) grew 37% versus the same period prior year.
Q1 2023 gross profit of $2.2M increased 16% vs. Q1 2022 – the Company views gross profit dollar growth as a key indicator of MiniLuxe’s positive trajectory towards long-term profitability. The MiniLuxe fleet of core studios continued to lead the business, accounting for 94% of revenue in the period, and the Company remains keenly focused on continuing to drive the full potential of the economics of these studios while expanding and scaling its omni-channel offering for the self-care industry.
Key to MiniLuxe’s current and future success is the continued growth, development and scaling of the MiniLuxe Talent Ecosystem of licensed and certified nail designers and waxing specialists. Beauty professionals who are part of MiniLuxe’s Talent Ecosystem are empowered to choose a well-defined career path tied to increasing economic earning power while also having flexibility of where, when, and how they will work. Expanding and growing the size and breadth of MiniLuxe’s Talent Ecosystem and continuing to make investments in the technology platform to serve as the infrastructure-as-a-service and marketplace for these designers are key strategic imperatives for 2023.
MiniLuxe’s Board and Executive Team remain focused on driving the business on its path toward profitability and cash generative operations. The management team continues to execute on the Company’s 2023 priorities and is regularly reassessing capital and resource needs to ensure optimal investment of capital. With receipt of the $3.2 million Employee Retention Credit (related to employee costs paid in 2020 & 2021), MiniLuxe’s Q1 2023 ending cash balance was $8.0 million. This capital, plus the continued growth of the MiniLuxe Talent Ecosystem and Product channels, is forecasted to lead to positive free cashflow generation in 2024 and to position MiniLuxe well to achieve its strategic goals and vision to be the leader in the self-care industry. The Company looks forward to sharing further updates throughout the remainder of the year.
“Against the backdrop of a challenged macro environment with regional bank failures, inflationary pressures and global slowdown of growth, we were fortunate to see continued recessionary resilience of the market in which we serve and demonstrate double-digit growth on topline revenue and gross profit dollars,” said Tony Tjan, Executive Chairman and Co-founder of MiniLuxe.
“MiniLuxe is pleased to report continued double digit growth in Q1 2023 with the core fleet of studios continuing to demonstrate highly predictable levels of contribution as we actively invest in new growth channels to further accelerate the growth of the MiniLuxe omni-channel platform,” said Zoe Krislock, CEO of MiniLuxe
Q1 2023 Financial Highlights ($USD)
Total revenue of $5.2M, a YoY increase of 18%, 94% of revenue generated from core MiniLuxe studios
Gross profit of $2.2M, a 16% increase from prior year
Q1 2023 Fleet Adjusted EBITDA1 at $119K up 80% from Q1 2022
Full Company Adjusted EBITDA1 of ($2.6M) compared to ($2.3M) for Q1 2022; increased loss attributable to investment in SG&A to fund planned growth initiatives
Q1 2023 Business Highlights
DTC (direct-to-consumer) product growth came from a focus on MiniLuxe “Hero” SKUs (e.g. Cuticle Oil, Topcoat and Pure Strength), which resulted in a doubling of year-over-year sales. Approximately two-thirds of DTC product sales in Q1 2023 came from Hero SKU offerings including bundled offerings which encouraged clients to buy SKUs in multiple quantities. Q1 2023 e-commerce orders grew 115% from Q1 2022 and new customer counts increased 130% year-over-year.
MiniLuxe continues its integration and planned growth initiatives for its Paintbox brand, which was acquired in Fall 2022. Based in New York City and founded in 2014, Paintbox has been re-defining the nail-care industry through its creativity and proprietary modern nail art designs. Along with MiniLuxe’s initial focus on increasing staffing & improving talent compensation in the Upper East Side studio, the Company is excited about its initial growth initiatives, including:
Launching of the first Paintbox “store-in-store” with an outpost in MiniLuxe’s Boston South End studio. The footprint of less than 200 square feet presents the opportunity for a fast payback and, if the test proves successful, an opportunity for scale across other MiniLuxe studios and new partner channels. This format includes some of Paintbox’s most iconic nail art looks and introduces a new and premium nail art certification along with a premium in-studio service at >50% pricing to current non-Paintbox offerings.
Expanding the Paintbox brand through the launch of a ready-to-wear Paintbox press-on product that allows clients to experience nail art at home and on-the-go. MiniLuxe’s client experience derived from over a decade of performing services together with Paintbox’s extensive history of collaborations with high fashion and luxury brands provides the Company the foundation to create what it believes will be the industry’s most curated, best looking, and highest performing press-on nails. Paintbox press-on nails will launch through the brand’s e-commerce platform with collaborations and partnerships during New York Fashion Week in the later part of the year.
Subsequent to end of Q1 2023, the Company completed construction and commenced operations in a new studio location in West Central Florida, at the Water Street Development in Downtown Tampa Bay, FL. The grand opening of the studio occurred on May 11, 2023 as MiniLuxe celebrated its 21st studio location opening, the first since the pandemic.
Q1 2023 Results
Selected Financial Measures
MiniLuxe notes a change in accounting policy to more accurately reflect revenue generated from talent and product revenue streams to more align with how management analyzes the Company. The change has been retrospectively applied and does not have any effect on revenue recognition principles utilized or total overall revenue recognized.
Results of Operations
The following table outlines the consolidated statements of loss and comprehensive loss for the fiscal quarters ended April 2, 2023, and March 27, 2022:
Cash Flows
The following table presents cash and cash equivalents as at April 2, 2023 and March 27, 2022:
Non-IFRS Measures and Reconciliation of Non-IFRS Measures
This press release references certain non-IFRS measures used by management. These measures are not recognized under International Financial Reporting Standards (“IFRS”), do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS. The non-IFRS measures referred to in this press release are “Adjusted EBITDA” and “Fleet Adjusted EBITDA”.
Adjusted EBITDA
Adjusted EBITDA is used by management as a supplemental measure to review and assess operating performance. Management believes Adjusted EBITDA most accurately reflects the commercial reality of the Company's operations on an ongoing basis by adding back non-cash expenses. Additionally, the rent-related adjustments ensure that studio-related expenses align with revenue generated over the corresponding time periods.
Adjusted EBITDA is calculated by adding back fixed asset depreciation, right-of-use asset depreciation under IFRS 16, asset disposal, and share-based compensation expense to IFRS operating income, then deducting straight-line rent expenses2 net of lease abatements. IFRS operating income is revenue less cost of sales (gross profit), additionally adjusted for general and administrative expenses, and depreciation and amortization expense.
The Company also uses Fleet Adjusted EBITDA to evaluate its fleet performance. This metric is calculated in a similar manner, starting with Talent revenue and adjusting for non-fleet Talent revenue and cost of sales, further adjusted by fleet SG&A and finally subtracting the same straight line rent expense used in the full company Adjusted EBITDA (as the fleet holds all real estate leases). The Company believes that this metric most closely mirrors how management views the fleet portion of the business.
The following table reconciles Adjusted EBITDA to net loss for the periods indicated:
The following table reconciles Fleet Adjusted EBITDA to net loss for the periods indicated:
MiniLuxe, a Delaware corporation based in Boston, Massachusetts is a digital-first, socially responsible lifestyle brand and talent empowerment platform and marketplace [let’s consider] for the nail and waxing industry. For over a decade, MiniLuxe has been setting industry standards for health, hygiene, high quality services, and fair labor practices in its efforts to transform the nail care and waxing industry. Underlying MiniLuxe’s mission and purpose is to become one of the largest inclusionary educators and employers of diverse self-care professionals across our omni-channel ecosystem and talent empowerment platform.
Today, MiniLuxe derives its revenue streams from nail care and waxing services across an omni-channel ecosystem of on premises with company-owned studios and partnerships and off-premises on-demand services. The company also develops and sells a proprietary retail and e-commerce line of clean nail care and waxing products that are also used in MiniLuxe services. MiniLuxe is driven by a fully integrated digital platform that manages all client bookings, preferences, and payments and provides designers with the ability to manage scheduling and client preferences, track their performance and compensation, and access training content. Since its inception, MiniLuxe has performed nearly 3 million services. www.miniluxe.com
For further information
Anthony Tjan Executive Chairman, MiniLuxe Holding Corp. atjan@miniluxe.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
1Please refer to “Non-IFRS Measures and Reconciliation of Non-IFRS Measures” sections of this press release. 2Straight-line rent expense for a given payment period is calculated by dividing the sum of all payments over the life of the lease (the figure used in the present value calculation of the right-of-use asset) by the number of payment periods (typically months). This number is then annualized by adding the rent expenses calculated for the payment periods that comprise each fiscal year. For leases signed mid-year, the total straight-line rent expense calculation applies the new lease terms only to the payment periods after the signing of the new lease.
