Financial Data and Key Metrics Changes - For Q4 2024, the company reported net sales of $100.7 million, a decline of 9.8% from the same quarter last year [33] - Full-year net sales were $422.7 million, representing a decline of 7.8% from 2023, with adjusted EBITDA at $129.7 million and an adjusted EBITDA margin of 30.7% [15][32] - Adjusted gross profit margin for Q4 was 68.6%, down from 70.6% in Q4 2023, impacted by higher promotional activity and warehousing costs [38] Business Line Data and Key Metrics Changes - Specialty retail sales in Q4 increased by 5.7% to $28.8 million compared to Q4 2023, indicating a positive trend in this channel [36] - Direct-to-consumer (D2C) channel sales decreased by 2.5% year-over-year, with growth at olaplex.com offset by strategic international rationalization [37] - Professional channel sales declined by 27.1% year-over-year, reflecting the company's focus on partnering with fewer but stronger international distributors [38] Market Data and Key Metrics Changes - The company regained the number one position in earned media value among US hair care brands in December [21] - Olaplex had the number one set in US prestige hair care during the 2024 holiday season, showcasing strong brand performance [18] Company Strategy and Development Direction - The company is focused on three transformation priorities: maximizing sales and marketing impact, strengthening capabilities and culture, and developing a long-term roadmap [15][22] - The strategic vision, "Bonds and Beyond," aims to move beyond damage repair to foundational hair health, empowering professionals and creating emotional connections with consumers [49][54] - The company plans to invest aggressively in talent and marketing to support its 2025 strategic priorities, which include generating brand demand, harnessing innovation, and executing with excellence [44][59] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a year of transformation, with net sales and adjusted EBITDA below 2023 levels due to international headwinds [13] - The company remains optimistic about international growth opportunities and is focused on rationalizing its distributor partnerships [90][94] - For 2025, the company expects net sales to range from a decline of 3% to an increase of 2% compared to 2024, with a focus on improving brand demand and innovation [45][46] Other Important Information - The company ended the year with a strong balance sheet, increasing cash and cash equivalents to $586 million from $466.4 million at the end of fiscal 2023 [42] - Inventory declined by 20.7% to $75.2 million, reflecting improved operational discipline [42] Q&A Session Summary Question: Insights on the professional channel and competition - Management emphasized the importance of the professional channel as both a revenue source and marketing vehicle, noting the need for product support and community building to stabilize this channel [78][81] Question: International business and distributor rationalization - Management is optimistic about international opportunities and is focused on partnering with fewer, stronger distributors to enhance execution [90][92] Question: Fiscal 2025 outlook and product readiness - Management believes that product innovation and effective marketing will drive growth, with a focus on execution and data-driven decision-making [100][105] Question: Marketing investments and customer acquisition - Management stated that brand building takes time and emphasized the importance of a balanced marketing approach to create long-term demand [111][116] Question: Trends in the professional channel and consumer behavior - Management noted that the time between salon visits has stabilized post-COVID, and emphasized the need for additional services to drive consumers back to salons [122] Question: Pricing strategy and customer reactions - Management discussed the thoughtful approach to pricing, balancing innovation with maintaining gross margins, and indicated positive customer reactions to the new pricing strategy [134]

Financial Performance - Net sales for the year ended December 31, 2024, were $422.67 million, a decrease of 7.8% from $458.3 million in 2023[296]. - Gross profit for 2024 was $292.29 million, down from $318.63 million in 2023, reflecting a gross margin of approximately 69.2%[296]. - Operating income decreased to $66.94 million in 2024, compared to $108.22 million in 2023, indicating a decline of 38.2%[296]. - Net income for 2024 was $19.52 million, a significant drop of 68.3% from $61.59 million in 2023[296]. - Total current assets increased to $689.71 million in 2024 from $613.2 million in 2023, representing a growth of 12.5%[293]. - Total assets as of December 31, 2024, were $1.77 billion, slightly up from $1.74 billion in 2023[293]. - The company reported a basic net income per share of $0.03 for 2024, down from $0.09 in 2023[296]. - Selling, general, and administrative expenses rose to $181.69 million in 2024, an increase of 7.3% from $168.94 million in 2023[296]. - Net income for the year ended December 31, 2024, was $19.522 million, a decrease of 68.3% compared to $61.587 million in 2023 and a significant drop from $244.072 million in 2022[301]. - The weighted average common shares outstanding for basic net income per share increased to 661,980,612 in 2024 from 654,592,923 in 2023, while diluted shares decreased to 665,397,655 from 677,578,245[421]. Cash Flow and Liquidity - The company maintained a strong cash position with cash and cash equivalents of $585.97 million as of December 31, 2024, compared to $466.4 million in 2023[293]. - Net cash provided by operating activities for 2024 was $143.068 million, down 19.4% from $177.532 million in 2023[301]. - Cash and cash equivalents at the end of 2024 were $585.967 million, up from $466.400 million in 2023, indicating a net increase of $119.567 million[301]. - Net cash used in operating activities was $(1,466) thousand for 2024, a reversal from net cash provided of $21,888 thousand in 2023[433]. - Cash flows from financing activities resulted in a net cash provided of $1,466 thousand in 2024, contrasting with $(21,888) thousand used in 2023[433]. Debt and Interest - As of December 31, 2024, the company had $656.4 million of outstanding variable rate loans under the 2022 Term Loan Facility, with a 1% change in the effective interest rate impacting interest costs by approximately $6.6 million over the next 12 months[276]. - The 2022 Term Loan Facility has a principal amount of $675 million, with $656,438 million outstanding as of December 31, 2024[369]. - Interest expense for the years ended December 31, 2024, 2023, and 2022 was $59.6 million, $58.0 million, and $44.0 million, respectively, indicating a year-over-year increase of 2.8% from 2023 to 2024[376]. - The carrying amount of the Company's long-term debt as of December 31, 2024, was $656.4 million, with an estimated fair value of $620.3 million[377]. - The Company recognized a $3.4 million reduction in interest expense during 2024 due to interest rate cap settlements, partially offset by $1.1 million related to amortization of interest rate cap premiums[380]. Taxation - The company is subject to income taxes in the U.S. and the U.K., and changes in tax laws or regulations could materially affect operating results and financial conditions[176]. - The total provision for income taxes for the year ended December 31, 2024, was $7.39 million, compared to $15.13 million in 2023, reflecting a decrease of 51.1%[384]. - The effective tax rate for the Company for the year ended December 31, 2024, was 27.5%, compared to 19.7% in 2023[384]. - The Company expects future payments under the Tax Receivable Agreement to aggregate to $189.3 million, with payments expected to continue through 2041[346]. - The Tax Receivable Agreement liability as of December 31, 2024, was $189.3 million, with $177.5 million recorded in long-term liabilities[390]. Inventory and Sales - Inventory as of December 31, 2024, was $75.17 million, down from $95.92 million in 2023[355]. - The company recorded inventory write-offs of $7.8 million, $15.2 million, and $8.2 million for the years ended December 31, 2024, 2023, and 2022, respectively[355]. - The company recognized net sales reductions for estimated and actual returns of $6.7 million, $9.2 million, and $10.0 million for the years ended December 31, 2024, 2023, and 2022, respectively[326]. - Three customers accounted for 39% of the company's total net sales during the year ended December 31, 2024, compared to two customers representing 21% in 2023[337]. - Net sales in the United States for 2024 were $210.61 million, compared to $207.68 million in 2023 and $397.56 million in 2022[354]. Operational Risks - The company is dependent on outsourced functions, and failures by external service providers could adversely affect business operations[182]. - The company’s operations could be disrupted by natural disasters, public health crises, or political instability, particularly affecting supply chains[183]. - The company utilizes Professional Employer Organizations (PEOs) for employment functions, and failures by these entities could result in significant liabilities[186]. - The company has not engaged in hedging foreign currency transactions to date, and does not anticipate a material effect on financial statements from a 10% change in the value of the U.S. dollar against other currencies[279]. Share-Based Compensation - Share-based compensation expense increased to $11.123 million in 2024 from $9.072 million in 2023, reflecting a rise of 22.5%[301]. - The Company issued 12,496,544 time-based RSUs in 2024, with a weighted average grant-date fair value of $1.77 per share[407]. - The Company recognized a compensation expense of $1.6 million in selling, general, and administrative expenses prior to the modification date[395]. - The fair value of the SARs on the modification date was based on a share price of $17.06, with an expected volatility of 30%[396]. Legal Proceedings - The company intends to vigorously defend against pending legal proceedings, including a consolidated securities class action and derivative actions[416][417][418]. - The company has not recognized any probable or reasonably estimable losses associated with pending legal proceedings as of December 31, 2024[420].

Olaplex Holdings, Inc. (NASDAQ:OLPX) Q4 2024 Earnings Conference Call March 4, 2025 9:00 AM ET Company Participants Allison Malkin – Investor Relations Amanda Baldwin – Chief Executive Officer Catherine Dunleavy – Chief Operating Officer and Chief Financial Officer Conference Call Participants Susan Anderson – Canaccord Genuity Olivia Tong – Raymond James Ashley Helgans – Jefferies Lauren Lieberman – Barclays Dana Telsey – Telsey Advisory Group Operator Greetings, and welcome to Olaplex Holdings, Inc. Fourt ...

Core Insights - Olaplex Holdings, Inc. reported revenue of $100.74 million for the quarter ended December 2024, indicating a year-over-year decline of 9.8% [1] - The earnings per share (EPS) for the same period was $0.01, down from $0.03 a year ago [1] Financial Performance - Revenue for the quarter was $100.74 million, reflecting a decrease of 9.8% compared to the previous year [1] - EPS decreased to $0.01 from $0.03 year-over-year [1]

Financial Performance - Net sales for Q4 2024 decreased by 9.8% to $100.7 million compared to Q4 2023[5] - Gross profit for Q4 2024 was $66.8 million, down 13.0% from $76.8 million in Q4 2023, with a gross profit margin of 66.3%[5] - Adjusted net income for Q4 2024 was $7.6 million, a decrease of 65.8% compared to $22.3 million in Q4 2023[6] - For the fiscal year 2024, net sales decreased by 7.8% to $422.7 million compared to $458.3 million in 2023[8] - The company reported a net income of $19.5 million for fiscal year 2024, down 68.3% from $61.6 million in 2023[8] - Adjusted EBITDA for the year ended December 31, 2024, was $129.665 million, down from $174.260 million in 2023, reflecting a decrease of approximately 25.5%[31] - Net income for the year ended December 31, 2024, was $19.522 million, a decrease of 68.3% compared to $61.587 million in 2023[29] - The company reported a net loss of $8.800 million for Q4 2024, compared to a net income of $14.101 million in Q4 2023[33] Guidance and Projections - Fiscal year 2025 guidance for net sales is projected between $410 million and $431 million, reflecting a decrease from the previous year's actual sales[11] - Adjusted EBITDA margin for fiscal year 2025 is expected to be between 20% and 22%, down from 30.7% in 2024[11] Cash and Assets - As of December 31, 2024, cash and cash equivalents increased to $586.0 million from $466.4 million in 2023[9] - Cash and cash equivalents at the end of 2024 were $585.967 million, up from $466.400 million at the end of 2023, representing a growth of about 25.5%[29] - Total current assets increased to $689.713 million as of December 31, 2024, from $613.196 million in 2023, reflecting an increase of approximately 12.5%[25] Inventory and Liabilities - Inventory at the end of Q4 2024 was $75.2 million, down from $95.9 million at the end of Q4 2023[9] - Long-term debt as of December 31, 2024, was $643.7 million, slightly down from $649.0 million in 2023[9] - Total liabilities decreased slightly to $893.321 million as of December 31, 2024, from $895.370 million in 2023[25] Expenses - Selling, general, and administrative expenses for the year ended December 31, 2024, were $181.685 million, an increase of 7.5% from $168.942 million in 2023[27] - SG&A expenses for Q4 2024 were $52.869 million, up from $49.172 million in Q4 2023, representing a 5.5% increase[33] Other Financial Metrics - Adjusted EBITDA margin for the year ended December 31, 2024, was 30.7%, compared to 38.0% in 2023, indicating a decline of 7.3 percentage points[31] - Adjusted gross profit margin for the year ended December 31, 2024, was 71.4%, unchanged from 2023[31] - Adjusted net income per share for Q4 2024 was $0.01, down from $0.03 in Q4 2023[33] Special Items - The company incurred a one-time payment of $3.5 million to a former distributor in the UAE during 2023 to establish a new partnership[33] - Amortization of intangible assets (excluding software) for the year ended December 31, 2024, was $50.073 million, slightly up from $49.075 million in 2023[33] - The company recorded organizational realignment costs of $2.920 million in Q4 2023[34] - Inventory write-off and disposal costs were incurred due to reformulation of a product, impacting financials in 2023[34] - The company is focused on global reformulation to streamline product offerings in compliance with regulations[34]

Core Viewpoint - Olaplex Holdings, Inc. reported financial results for Q4 and fiscal year 2024, showing a decline in net sales and net income compared to the previous year, while expressing optimism about future strategies and business transformation efforts [2][5][8]. Financial Results Summary Fourth Quarter 2024 vs. Fourth Quarter 2023 - Net sales decreased by 9.8% to $100.7 million [4] - Gross profit decreased by 13.0% to $66.8 million, with a gross profit margin of 66.3% [4] - Net loss was $8.8 million compared to a net income of $14.1 million in Q4 2023, representing a 162.4% decrease [4][5] - Adjusted net income decreased by 65.8% to $7.6 million [4][5] - Adjusted EBITDA decreased by 51.4% to $17.5 million, with an adjusted EBITDA margin of 17.4% [4][5] Fiscal Year 2024 vs. Fiscal Year 2023 - Net sales decreased by 7.8% to $422.7 million [6] - Gross profit decreased by 8.3% to $292.3 million, with a gross profit margin of 69.2% [6] - Net income decreased by 68.3% to $19.5 million [6] - Adjusted net income decreased by 30.1% to $75.7 million [6] - Adjusted EBITDA decreased by 25.6% to $129.7 million, with an adjusted EBITDA margin of 30.7% [6] Balance Sheet Overview - As of December 31, 2024, cash and cash equivalents increased to $586.0 million from $466.4 million in 2023 [7] - Inventory decreased to $75.2 million from $95.9 million [7] - Long-term debt slightly decreased to $643.7 million from $649.0 million [7] Fiscal Year 2025 Guidance - The company expects net sales for fiscal year 2025 to be between $410 million and $431 million [9] - Adjusted gross profit margin is projected to be between 70.5% and 71.5% [9] - Adjusted EBITDA margin is expected to be between 20% and 22% [9]

Core Insights - Olaplex Holdings, Inc. reported financial results for Q4 and fiscal year 2024, indicating a challenging year with significant declines in net sales and profitability [1][2][3]. Financial Performance - Q4 2024 net sales decreased by 9.8% to $100.7 million compared to Q4 2023 [4][5]. - Gross profit for Q4 2024 was $66.8 million, down 13.0% from $76.8 million in Q4 2023, resulting in a gross profit margin of 66.3% [4][5]. - Adjusted net income for Q4 2024 was $7.6 million, a decrease of 65.8% from $22.3 million in Q4 2023 [4][5]. - For the fiscal year 2024, net sales were $422.7 million, down 7.8% from $458.3 million in 2023 [6][5]. - The company reported a net income of $19.5 million for the fiscal year 2024, a decline of 68.3% compared to $61.6 million in 2023 [6][5]. Sales Channel Performance - Specialty Retail sales increased by 5.7% to $28.8 million in Q4 2024, while Professional sales decreased by 27.1% to $31.0 million [5]. - Direct-To-Consumer sales fell by 2.5% to $40.9 million in Q4 2024 [5]. - For the fiscal year 2024, Specialty Retail sales increased by 5.4% to $142.3 million, while Professional sales decreased by 19.3% to $145.3 million [5]. Balance Sheet Highlights - As of December 31, 2024, the company had cash and cash equivalents of $586.0 million, up from $466.4 million a year earlier [7]. - Inventory at the end of Q4 2024 was $75.2 million, down from $95.9 million at the end of 2023 [7]. Fiscal Year 2025 Guidance - The company expects fiscal year 2025 net sales to be between $410 million and $431 million, reflecting a cautious outlook for the first quarter [8][9]. - Adjusted gross profit margin for fiscal year 2025 is projected to be between 70.5% and 71.5% [9]. Company Overview - Olaplex is a health and beauty company known for its innovative hair care products, leveraging its Complete Bond Technology™ to enhance hair health [12].

Core Insights - Olaplex Holdings, Inc. (OLPX) is expected to report break-even quarterly earnings per share, reflecting a 100% decline compared to the same period last year [1] - Analysts forecast revenues of $87.6 million for the quarter, indicating a year-over-year decrease of 21.6% [1] - The consensus EPS estimate has remained unchanged over the last 30 days, suggesting stability in analysts' reassessments [1] Revenue Projections - Analysts estimate 'Revenue- Professional' will reach $29.54 million, a decrease of 30.5% from the prior-year quarter [4] - 'Revenue- DTC' is projected at $34.43 million, reflecting an 18% year-over-year decline [4] - The consensus for 'Revenue- Specialty retail' is $23.51 million, indicating a change of -13.9% year over year [4] Stock Performance - Over the past month, Olaplex shares have recorded a return of -3.9%, compared to a -2.2% change in the Zacks S&P 500 composite [5] - Based on its Zacks Rank 3 (Hold), Olaplex is expected to perform in line with the overall market in the upcoming period [5]

Company Participation - Olaplex Holdings, Inc. will participate in the Raymond James 46 Annual Institutional Investors Conference on February 26, 2025 [1] - The presentation will be hosted by Amanda Baldwin, CEO, and Catherine Dunleavy, COO and CFO, on March 5, 2025, at 9:50 am ET [2] Company Overview - Olaplex is a health and beauty company founded in 2014, known for its innovative hair care products [3] - The company revolutionized the prestige hair care market with its Complete Bond Technology™, which protects and strengthens hair during and after services [3] - Olaplex offers a full suite of hair health formulas and sells its products globally through various channels, including professional, specialty retail, and direct-to-consumer [3]

Company Overview - Olaplex Holdings, Inc. is a technology-driven beauty company focused on improving hair health through innovative bond-building technology [3] - The company revolutionized the prestige hair care category in 2014 by creating products that protect, strengthen, and relink broken hair bonds [3] - Olaplex's proprietary ingredients operate on a molecular level to repair damaged hair, and its products are sold through an expanding omnichannel model [3] Upcoming Financial Results - The company plans to report its fourth quarter and fiscal 2024 financial results on March 4, 2025, before the market opens [1] - An investor conference call and webcast will be held on the same day at 9:00 am ET/6:00 am PT to review the financial results [2] - The webcast will be accessible on the company's investor relations website, and a replay will be available for 90 days [2]