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. OutlookFor fiscal 2023, FRG expects to generate revenue of approximately $4.4 billion, net loss of approximately $1.4 million or $0.04 per share, Adjusted EBITDA of approximately $355 million and Non-GAAP EPS of approximately $2.90. This category only includes cookies that ensures basic functionalities and security features of the website. However, the much larger issue at hand is that the relatively small size of the company poses a risk considering the business model, as the company remains highly vulnerable to failing acquisitions, being effectively two failed acquisitions from disaster. 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. For the quarter ended Dec. 31, 2022, total reported revenue for Franchise Group was approximately $1.1 billion, an increase of 18.4% from $942.3 million in the same quarter of 2021. Prior to Coral Reef, Mr. Laurence was the Managing Partner of Causeway Partners, a Boston-based private equity group making control and structured equity investments in U.S. lower-middle market companies. Brian R. Kahn's largest purchase order was 1,000,000 units , worth over It operates through the following segments: Vitamin Shoppe, American Freight, Pet Supplies Plus, Badcock, Sylvan and Buddy's. By using our website or by closing this message box, you agree to our use of browser capability checks, and to our use of cookies as described in our Cookie Policy. The dividend itself has been on a stark rise, as the series of accretive acquisitions and some steady internal organic growth resulted in an attractive payout which is currently annualized at $2.50 per share. The report also stated that FRG could also be Mr. Evans has served as Chief Franchising Officer of Franchise Group, Inc. since August 1, 2020. If you have an ad-blocker enabled you may be blocked from proceeding. Sylvan Learning - has been one of the smaller and stranger acquisitions completed by FG. 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. American Freight Overview (FRG August Investor Presentation). India FM Jaishankar says Soros dangerous, debate needed on democracy, Buffett's Berkshire profit falls on investments, currencies, Bill Gates buys Heineken stake, despite saying he's 'not a big beer drinker', Elon Musk recruits team to develop OpenAI rival - The Information, Musk donated around $1.95 billion in Tesla shares last year, Hedge fund manager Chris Hohn demands Airbus drop Atos deal - letter, Elon Musk's challenge: Stay ahead of the competition, ISS urges Apple shareholders to vote for CEO Tim Cook, other execs' pay packages, Elon Musk accuses media of racism after newspapers drop 'Dilbert' cartoon, French media billionaire Niel fails with bid for TNT television frequence - Arcom, President, Chief Executive Officer & Director. Badcock. As far as issuing equity, generally, we're -- it's highly unlikely that we would issue equity anywhere near the current FRG valuation for M&A purposes. 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. WebBrian R. Kahn Managing Partner Mr. Kahn is the Managing Partner and founder of Vintage Capital Management (VCM) and its predecessor, Kahn Capital Management (KCM or We have it now, we're very excited about that and I don't think anybody knows our businesses better than we do, which is a good thing. Management believes the presentation of these measures is useful to investors as supplemental measures in evaluating the aggregate performance of the Companys operating businesses and in comparing its results from period to period because they exclude items that the Company does not believe are reflective of its core or ongoing operating results. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. Franchise Groups business lines include Pet Supplies Plus, American Freight, The Vitamin Shoppe, Badcock Home Furniture & more, Buddys Home Furnishings, Sylvan Learning and Wag N Wash. On a combined basis, Franchise Group currently operates over 3,000 locations predominantly located in the U.S. that are either Company-run or operated pursuant to franchising and dealer agreements. Mr. Laurence has served as the Executive Vice President of Franchise Group, Inc. since October 2, 2019 and was previously also on its Board of Directors. 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". Mr. Laurence joined the Firm in 2009 and is responsible for all aspects of transaction sourcing, due diligence and execution. FRG YTD Price Performance (Seeking Alpha). Fundamental company data and analyst estimates provided by FactSet. The segment delivered $137.20 million in EBITDA for the last year and so far in the first six months of 2022 has generated $78.90 million in EBITDA. On the other hand, the case for it being a growth-oriented company is solid, as the company operates an aggressive high-growth business model through which it has managed to outperform the market fivefold since the new management took over. Mr. Evans holds a Bachelor of Science degree in Business Administration from East Carolina University. Insiders at Franchise Group own 32.3% of the company. WebBrian R. Kahn Managing Partner. Brian Kahn, Franchise Groups President and CEO stated, I am proud of FRGs overall performance in the first quarter. 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. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. The truly interesting part comes when we analyze their latest $500 million share buy-back initiative. This can in no way be compared to Warren Buffett's brainchild, which is in its own way first and foremost an insurance company with multiple benefits in keeping significant amounts of cash on hand. Good afternoon, and thank you for joining our conference call. Pet Supplies Plus - was one of the major and somewhat pricier acquisitions by the franchise conglomerate. Badcock Home Furniture & More - is the latest successful acquisition by the franchise conglomerate. ($ In thousands except share count and per share data), Net income (loss) from continuing operations / Net income (loss) from continuing operations per diluted share, Adjusted Net Income available to Common Stockholder, Non-cash amortization of debt issuance costs, Amortization of acquisition-related intangibles, Impact of diluted share count assuming non-GAAP net income, Total Adjustments to Net income (loss) from continuing operations, Non-GAAP Net Income from continuing operations / Non-GAAP diluted EPS from continuing operations, Non-GAAP diluted weighted average shares outstanding. This is exactly where the brilliance of the strategy the company is utilizing comes under the spotlight. Kahn has served as the Chief Executive Officer of Franchise Group since October 2, 2019. 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. A series of accretive and well-thought-out acquisitions have created significant value for shareholders. Kohls CEO loss is Levi Strausss gain, says retail expert, Activist Investor Looks to Oust Kohls CEO, Chairman, Kohl's stock dives after profit outlook slashed over actions to cut excess inventory, inflation pressure on middle-income customers, A Dose of Vitamin Shoppe Could Be Good for Your Portfolio, Kohl's failed takeover was just one of a wave of abandoned deals amid market volatility, Kohl's Stock Slips as Analysts Assess Its Standalone Future, Kohls Scraps Talks for Sale to Franchise Group, Panera Bread Ends IPO Deal With Danny Meyers SPAC, Kohl's Terminates Sale Talks With Franchise Group. Sources: FactSet, Dow Jones, Bonds: Bond quotes are updated in real-time. In this capacity, Ms. McMillan-McWaters managed the entirety of Liberty Taxs legal affairs including overseeing its corporate, franchise, and public company matters. Prior to joining Liberty Tax, Ms. McMillan-McWaters served as counsel for a global pharmaceutical contract research organization in Cambridge, England where her practice focused on negotiating complex services and clinical trial agreements with investigative sites in Europe. Executive VP & Chief Administrative Officer. Learn More on Brian Randall Kahn's trading history. Mr. Laurence was previously a Partner at Coral Reef Capital Partners, a merchant banking firm making control and structured equity investments in U.S. lower-middle market companies and providing strategic mergers and acquisition and capital raising advisory services. We are pleased to close the sale of the Badcock distribution centers and retire the balance of our acquisition term loan with the cash proceeds. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. Prior to joining Franchise Group Mr. Harvey was Vice President Franchise Operations for Aarons Inc. from July 2014 to September 2020. This is exactly where the brilliance of the strategy the company is utilizing comes under the spotlight. At current market prices, the buy-back program would in theory be able to acquire close to 15 million shares, or just shy of 40% of the entire market capitalization of Franchise Group. I wrote this article myself, and it expresses my own opinions. Vintage is a value-oriented, operations-focused, private and public equity investor specializing in the consumer, aerospace and defense, and manufacturing sectors. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as expect, believe, estimate, plan, project, anticipate, intend, will, may, view, opportunity, potential, or words of similar meaning or other statements concerning opinions or judgment of the Company or its management about future events. Breaking it down by segment, American Freight brought in $216.3 million in revenue for the quarter with a net loss of $21.7 million. International stock quotes are delayed as per exchange requirements. This fact combined with a recent failed bid to acquire the retail giant Kohl's Corporation (KSS) for $60 per share at a roughly $8 billion valuation resulted in tremendous down-pressure being applied to the company's stock price. Management defines and calculates Non-GAAP Net Income and Non-GAAP EPS as net income (loss) and net income (loss) per diluted share from continuing operations adjusted for non-core or non-operational items related to executive severance and related costs, stock-based compensation, non-cash executive compensation expense, shareholder litigation costs, prepayment penalties on early debt repayment, non-cash amortization of debt issuance costs, store closures, the Badcock segments in-house financing operations, rebranding costs, acquisition costs, inventory fair value step up amortization, and amortization of acquired intangible assets. Acquisition by the Franchise conglomerate significant value for shareholders category only includes cookies ensures. To September 2020 exactly where the brilliance of the strategy the company by FactSet trading.... And CEO stated, I am proud of FRGs overall performance in the first.. 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