In its second earnings report since going public in August, YogaWorks, Culver City, California, reported third quarter 2017 revenue of $13.5 million, which was flat compared to the same period last year. The company also noted in its guidance for the year that it expects net revenue for fiscal 2017 to be lower than in fiscal 2016.
For fiscal 2017, YogaWorks expects net revenue between $54.3 million and $54.8 million and adjusted EBITDA between $(0.8) million and $(1.3) million. This compares to net revenue of $55.1 million and adjusted EBITDA of $1.7 million for 2016, according to a media release from the company.
For the fourth quarter of 2017, the company expects net revenue between $14.3 million and $14.8 million and adjusted EBITDA between $(0.7) million and $(1.2) million. This compares to net revenue of $13.1 million and adjusted EBITDA of $71,000 for the fourth quarter of 2016. The company’s guidance reflects the impact of 13 studios the company has acquired so far in fourth quarter 2017.
As part of the third quarter filing, YogaWorks noted that in August it agreed to a class wide settlement for $865,000 related to allegations that the company's itemized wage statements did not comply with the California Labor Code. The settlement has not yet been approved by the court.
The third quarter revenue was an improvement over the $12.5 million the company reported in September for its second quarter revenue. Adjusted third quarter EBITDA, however, was $(432,000) compared to $428,000 in the same period last year, according to the release. Adjusted net loss was $3.1 million compared to adjusted net loss of $2.3 million for the same period last year.
“We are pleased to have delivered third quarter results at the high end of our expectations, reflecting solid performance in our base business, with a minor contribution from the three studios acquired in the latter part of the third quarter," Rosanna McCollough, chief executive officer of YogaWorks, said in the release.
The company spent $445,000 at the end of the third quarter on the three studios, bringing its studio count to 53 in six regional markets at the end of the quarter.
The 13 studios that YogaWorks has acquired already in the fourth quarter include two Pure Om studios in the Washington, DC, area and seven YogaOne studios in Houston. On Nov. 14, the company moved into the Georgia market with the acquisition of four Infinity Yoga locations in Atlanta, according to media releases from YogaWorks. The company did not reveal the purchase price of any of those acquisitions.
McCollough said: "The addition of these studios has enabled us to increase our market share in the Washington, DC, area and gain entry into the vibrant Houston and Atlanta markets. These studios perfectly align with the YogaWorks mission to offer a variety of classes and high-quality teaching to empower students of all ages and abilities to lead healthier and less stressful lives. We remain the acquirer of choice in our large and highly fragmented industry comprised of over 33,000 yoga and Pilates studios. We are excited about our robust pipeline and the opportunity to boost our market leadership position by building density in existing markets and entering new markets through the acquisition of premier studios across the country.”
“The addition of Infinity Yoga is an important milestone as we continue to grow our national brand and expand into the Southeast,” Rosanna McCollough, chief executive officer of YogaWorks, said in the release. “We are excited for what the future holds in this region.”
YogaWorks now has 66 locations across the country.