National Vision Holdings, Inc. · NASDAQ:EYE
National Vision — Q4 2023 Earnings Presentation
30 slides from National Vision's earnings presentation, Feb 27, 2024
Slide 1: Q4 and Fiscal Year End 2023 Financial Results
Q4 and Fiscal Year End 2023 Financial Results February 27, 2024
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, sta
Slide 3: Today's Presenters
Today's Presenters Q4 2023 Q4 2023 Financial Review Highlights and 2024 Outlook Reade Fahs Melissa Rasmussen Chief Executive Officer Chief Financial Officer 3
Slide 4: Q4 and FY 2023 Highlights
Q4 and FY 2023 Highlights Q4 FY 2023 Change vs Q4 Change vs Amount 2022 Amount FY 2022 Net Revenue $506.4 million 8.0% $2.13 billion 6.0% Adjusted Comparable Store 5.7% 2.9% Sales Growth1 Adjusted Operating Income1 $0.3 million 104% $72.3 million (17.6)% Adjusted Diluted EPS1 $(0.02) (77.0%) $0.64 (
Slide 5: Advancing Strategic Initiatives
Advancing Strategic Initiatives 2023 Achievements 2024 Plan Recruiting & Retention: 2nd consecutive year of Recruiting & Retention: Continue to leverage flexible Significantly improvement in retention and posted record recruiting year scheduling options and remote to drive ongoing improvement in ret
Slide 6: Q4 and FY 2023 Financial Update
Q4 and FY 2023 Financial Update 6
Slide 7: Q4 2023 Revenue Drivers
Q4 2023 Revenue Drivers Net Revenue ($M) Total Store Count Commentary $506.4 1,354 1,413 ❖ Net revenue increased 8.0% vs. Q4 2022 $468.9 primarily due to: • Increase in Adjusted Comparable Store Sales Growth1 of 5.7% above Q4 2022 and growth from new store sales 8.0% increase • Positively impacted b
Slide 8: Q4 2023 Results
Q4 2023 Results Adjusted Operating Income1 ($M) ❖ Costs applicable to revenue as a percentage of net revenue increased 140 basis points to 48.8% compared to the Q4 2022 104% primarily due to: increase $0.3 • 200 basis-point increase in optometrist-related costs*, partially offset by a 110 basis-poin
Slide 9: Fiscal Year 2023 Results
Fiscal Year 2023 Results Net Revenue ($M) $2,126.5 ❖ Net revenue increased 6.0% vs. fiscal 2022 primarily due to: $2,005.4 • Growth from new store sales, and an increase in Adjusted Comparable Store Sales Growth1 of 2.9% over prior year; 6.0% • Net revenue was positively impacted by timing of unearn
Slide 10: FY 2023 Capital Structure and Cash Flow Highlights
FY 2023 Capital Structure and Cash Flow Highlights ❖ Strong liquidity position • Refinanced term loan and revolving credit facility in June 2023, extending the Company’s access to $300 million for an additional 5 year term • Repurchased $100 million of convertible senior notes for an aggregate cash
Slide 11: 2024 Capital Allocation Priorities
2024 Capital Allocation Priorities Healthy balance sheet enables robust and disciplined capital plan designed for continued growth and balanced with opportunistically returning capital to shareholders 2024 Expect 2024 Capital Expenditures of $110 - $115 Invest in Growth Million for New Store Opening
Slide 12: Outlook
Outlook The fiscal 2024 outlook information provided on the following slides includes Adjusted Operating Income, Adjusted Operating Margin and Adjusted Diluted EPS guidance, which are non-GAAP financial measures management uses in measuring performance. The Company is not able to reconcile these for
Slide 13: Fiscal 2024 Outlook
Fiscal 2024 Outlook Total Company Fiscal 2024 Outlook New Stores 65 - 70 Adjusted Comparable Store Sales Growth1 2.0% - 4.0% Net Revenue $1.965 - $2.005 Billion Adjusted Operating Income $61 - $76 Million Adjusted Diluted EPS2 $0.50 - $0.65 Depreciation and Amortization3 $95 - $100 Million Interest4
Slide 14: Fiscal 2024 Outlook Considerations
Fiscal 2024 Outlook Considerations Revenue FY24 outlook includes the expected revenue from the Walmart and AC Lens operations through their respective contract terms. FY24 outlook includes: • ~$16 Million of Revenue from Walmart Vision Center operations; All of which will be realized in Q1 • ~$129 M
Slide 15: Walmart Vision Center and AC Lens FY23 & FY24 Expected Effect
Walmart Vision Center and AC Lens FY23 & FY24 Expected Effect FY 2023 FY 2024 Outlook Walmart Vision Center ~$151 Million ~$16 Million AC Lens ~$252 Million ~$129 Million Total Walmart Vision Center & AC ~$403 Million ~$145 Million Lens Revenue Walmart Vision Center ~$14 Million ~$0.5 Million AC Len
Slide 16: Estimated FY23 Results & FY24 Outlook on Go-Forward Business
Estimated FY23 Results & FY24 Outlook on Go-Forward Business Estimated FY 2023 Results FY 2024 Outlook excl. Walmart Vision Center excl. Walmart Vision Center Estimated Y/Y Growth and AC Lens Operations and AC Lens Operations Total Revenue ~$1.724 Billion ~$1.820 - $1.860 Billion 5.6% - 7.9% Total A
Slide 17: Adjusted Operating Margin Progression 2023 - 2025
Adjusted Operating Margin1 Progression 2023 - 2025 2023 progress & expected ongoing improvement in core business supports path to 2025 Target2 Original 2023 Guidance3 2023 Actual 2024 Guidance4 2025 Target @ Midpoint @ Midpoint 1-Non-GAAP financial measure. See Slide 12 and Appendix for reconciliati
Slide 18: Appendix
Appendix 18
Slide 19: Q4 and FY 2023 Consolidated Financial Results
Q4 and FY 2023 Consolidated Financial Results Three Months Three Months Ended Ended December 30, December 31, 2023 2022 Fiscal Year Fiscal Year Dollars and shares in thousands, except Earnings per Share (Unaudited) (Unaudited) 2023 2022 Revenue: Net product sales $ 410,894 $ 382,761 $ 1,744,136 $ 1,
Slide 20: Reconciliation of Adjusted Operating Income to Net Income
Reconciliation of Adjusted Operating Income to Net Income (Unaudited) Three Months Three Months Ended Ended December 30, December 31, Fiscal Year Fiscal Year Dollars in thousands 2023 2022 2023 2022 Net income (loss) $ (15,987) $ (9,261) $ (65,901) $ 42,122 Interest expense, net 3,914 2,620 14,339 4
Slide 21: Reconciliation of Earnings Before Income Tax to Net Income
Reconciliation of Earnings Before Income Tax to Net Income (Unaudited) Fiscal Year 2023 Total Impact from Reported Total Legacy Segment Corporate/Other Termination of Walmart and Consolidated Results Impact Segment Impact AC Lens Businesses Dollars in thousands Total net revenue $ 2,126,468 $ (150,8
Slide 22: Reconciliation of Adjusted Comparable Stores Sales Growth
Reconciliation of Adjusted Comparable Stores Sales Growth (Unaudited) Comparable store sales growth (a) Three Months Three Months Ended Ended December December 31, 30, 2023 2022 Fiscal Year 2023 Fiscal Year 2022 2024 Outlook (b) Owned & Host segment America’s Best 7.2 % (1.8)% 4.0 % (7.7)% Eyeglass
Slide 23: Capital Structure and Cash Flow
Capital Structure and Cash Flow Less: Deferred Amounts Q4 2023 Capital Structure ($M) Debt Financing per Balance % of Amount Costs Sheet Total Coupon Maturity First Lien - Term A Loans $ 146.3 $ (1.1) $ 145.2 31 % Term SOFR + 1.75% 6/13/2028 First Lien - Revolving Credit Facility1 — — — — % Term SOF
Slide 24: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income (Unaudited) Three Three Months Months Ended Ended December December Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Dollars in thousands 30, 2023 31, 2022 2023 2022 2021 2020 2019 Net income (loss) $ (15,987) $ (9,261) $ (65,901) $ 42,122 $
Slide 25: Reconciliation of Adjusted Diluted EPS to Diluted EPS
Reconciliation of Adjusted Diluted EPS to Diluted EPS (Unaudited) Three Three Months Months Ended Ended December December Fiscal Year Fiscal Year Shares in thousands 30, 2023 31, 2022 2023 2022 Diluted EPS $ (0.20) $ (0.12) $ (0.84) $ 0.52 Stock-based compensation expense (a) 0.07 0.04 0.26 0.17 Los
Slide 26: Reconciliation of Adjusted SG&A to SG&A
Reconciliation of Adjusted SG&A to SG&A (Unaudited) Three Three Months Months Ended Ended December December Fiscal Year Fiscal Year Dollars in thousands 30, 2023 31, 2022 2023 2022 SG&A $ 248,285 $ 233,944 $ 991,883 $ 915,355 Stock-based compensation expense (a) 5,134 2,972 20,174 13,512 ERP impleme
Slide 27: Reconciliation of Non-GAAP to GAAP Financial Measures Footnotes
Reconciliation of Non-GAAP to GAAP Financial Measures Footnotes a. Non-cash charges related to stock-based compensation programs, which vary from period to period depending on the timing of awards and performance vesting conditions. b. For the three months ended December 30, 2023 and fiscal year 202
Slide 28: Adjusted Comparable Store Sales Growth Primer
Adjusted Comparable Store Sales Growth Primer What is Adjusted Comparable Store Sales Growth? • Calculated using net revenue on a cash-basis • Excludes the impact of unearned and deferred revenue Why use Adjusted Comparable Store Sales Growth? • Provides a clear view of the Company’s current operati
Slide 29: Unearned Revenue Primer
Unearned Revenue Primer PURCHASE JOURNEY ZA 7-10 DAYS TIME OF PURCHASE UNEARNED REVENUE ACCOUNTING CALENDAR PERIOD CASH BASIS SALES EARNED Customers generally pay for products and services at time of order. Eyeglasses are picked up approximately 7 to 10 days later. Unearned revenue represents CASH B
Slide 30: National Vision Commercials and Remote Care Video
Check out some of our latest commercials: National Vision Commercials Check out our video demonstrating a remote exam: Remote Care with National Vision 30
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