UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: 001-40605 Soho House & Co Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 86-3664553 (State or other jurisdiction of ...

Membership Collective Group Inc. (MCG) Q4 2022 Earnings Conference Call March 9, 2023 9:00 AM ET Company Participants Nick Jones - Founder and Director Andrew Carnie - Chief Executive Officer Thomas Allen - Chief Financial Officer Conference Call Participants Steven Zaccone - Citi Stephen Grambling - Morgan Stanley George Kelly - Roth Capital Shaun Kelley - Bank of America Ali Naqvi - HSBC Operator Thank you for standing by. At this time, I would like to welcome everyone to the Membership Collective Group I ...

MARCH 2023 xxxxxxxx Membership Collective Group G www.lives.com to to to the Membership Collective Group Forward Looking Statements Forward Looking Statements This presentation contains forward-looking statements that are based on management's beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by the following words: 'may,' 'will,' 'could,' 'would,' 'should,' 'expect,' 'intend,' 'plan,' 'anticipate,' 'believe,' 'estimate,' ...

Membership Collective Group Inc. (MCG) Q3 2022 Earnings Conference Call November 16, 2022 9:00 AM ET Company Participants Thomas Allen - Chief Financial Officer Nick Jones - Founder Andrew Carnie - President & Incoming Chief Executive Officer Conference Call Participants Shaun Kelley - Bank of America Sharon Zackfia - William Blair Steven Zaccone - Citi Stephen Grambling - Morgan Stanley Operator Hello. My name is Chris and I’ll be your conference operator today. At this time, I would like to welcome everyo ...

NOVEMBER 2022 Membership Collective Group Membership Collective Group SERIO COLLECTION HAM DO DO THE OWNER CLECKANAGEMENT other Forward Looking Statements Forward Looking Statements This presentation contains forward-looking statements that are based on management's beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by the following words: 'may,' 'will,' 'could,' 'would,' 'should,' 'expect,' 'intend,' 'plan,' 'anticipate,' ...

[Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements and accompanying notes provide a comprehensive overview of its financial performance, position, and cash flows [Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The company reported significant net losses and a reduction in shareholders' equity, despite improved operating cash flow for the 39 weeks ended October 2, 2022 Key Financial Highlights (Unaudited) | Metric | 13 Weeks Ended Oct 2, 2022 (in thousands) | 13 Weeks Ended Oct 3, 2021 (in thousands) | 39 Weeks Ended Oct 2, 2022 (in thousands) | 39 Weeks Ended Oct 3, 2021 (in thousands) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | | **Statements of Operations:** | | | | | | Total Revenues | $266,046 | $179,559 | $701,824 | $376,039 | | Operating Loss | $(70,581) | $(53,444) | $(183,491) | $(163,864) | | Net Loss | $(91,373) | $(76,221) | $(235,554) | $(226,366) | | Net Loss Attributable to MCG Inc. | $(91,668) | $(77,027) | $(234,106) | $(223,493) | | Basic and Diluted EPS | $(0.46) | $(0.72) | $(1.16) | $(1.73) | | **Balance Sheet (as of):** | Oct 2, 2022 (in thousands) | Jan 2, 2022 (in thousands) | | | | Total Assets | $2,365,091 | $2,381,483 | | | | Total Liabilities | $2,345,519 | $2,199,291 | | | | Total Shareholders' Equity | $19,572 | $182,192 | | | | **Cash Flows (39 Weeks Ended):** | Oct 2, 2022 (in thousands) | Oct 3, 2021 (in thousands) | | | | Net Cash from Operating Activities | $38,106 | $(114,939) | | | | Net Cash from Investing Activities | $(79,614) | $(79,556) | | | | Net Cash from Financing Activities | $69,171 | $404,451 | | | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business, accounting policies, and financial line items, highlighting new credit policies, going concern assessment, and segment reporting [1. Nature of Business](index=13&type=section&id=1.%20Nature%20of%20Business) Membership Collective Group (MCG) operates a global membership platform with physical and digital spaces, completing its IPO in July 2021 - Membership Collective Group Inc. (MCG) is a global membership platform offering physical and digital spaces for work and socialization, including 38 Soho Houses, 9 Soho Works Clubs, The Ned, The LINE and Saguaro hotels, Scorpios Beach Club, and Soho Home retail[28](index=28&type=chunk) - MCG completed its initial public offering (IPO) on July 19, 2021, selling **30,567,918 shares of Class A common stock at $14.00 per share**, and underwent reorganization transactions where Soho House Holdings Limited (SHHL) became a wholly-owned subsidiary[29](index=29&type=chunk)[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The company's financial statements adhere to US GAAP and SEC regulations, with new policies for 'House Introduction Credits' and ongoing going concern assessments - The company's unaudited condensed consolidated financial statements are prepared in accordance with US GAAP and SEC regulations for interim reporting, with estimates and judgments affecting reported amounts[32](index=32&type=chunk) - A new 'House Introduction Credits' policy was implemented on April 4, 2022, requiring new members to purchase credits redeemable for food, beverage, and bedroom stays, recognized as deferred revenue upon issuance and In-House revenue upon redemption or as breakage revenue upon expiration[38](index=38&type=chunk) - Despite historical net losses and significant cash outflows, the company assesses its ability to continue as a going concern based on projected cash flows, bank covenant compliance, and available working capital, including a **$79 million undrawn revolving credit facility**[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - An error related to the estimation of historical operating lease liabilities was corrected, resulting in an overstatement of historical operating lease liability and assets by **$12 million** and **$5 million**, respectively, as of Q1 2022, and a cumulative overstatement of operating lease expenses by **$6 million** for the 13 weeks ended April 3, 2022[36](index=36&type=chunk) [3. Consolidated Variable Interest Entities](index=15&type=section&id=3.%20Consolidated%20Variable%20Interest%20Entities) MCG is the primary beneficiary of several material variable interest entities, including Soho Restaurants Limited, and acquired all outstanding equity interests of Soho Restaurants in March 2022 - MCG is the primary beneficiary of material variable interest entities (VIEs) including Soho Restaurants Limited, Ned-Soho House, LLP, Soho Works Limited, and Soho Works North America, LLC[49](index=49&type=chunk) - On March 29, 2022, the Company acquired all outstanding equity interests of Soho Restaurants for nominal consideration, accounting for it as a transaction with a noncontrolling interest holder without a change of control[52](index=52&type=chunk) Consolidated VIEs' Assets and Liabilities (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :-------------------------- | :-------------- | :-------------- | | Total current assets | $15,467 | $17,156 | | Total assets | $303,933 | $346,060 | | Total current liabilities | $57,617 | $57,789 | | Total liabilities | $310,422 | $336,832 | | Net assets | $(6,489) | $9,228 | [4. Equity Method Investments](index=16&type=section&id=4.%20Equity%20Method%20Investments) The company holds equity method investments in entities where joint venture partners retain significant decision-making power, preventing primary beneficiary status - The Company holds equity method investments in entities like Soho House Toronto Partnership and 56-60 Redchurch Street, London, where joint venture partners have significant decision-making power, preventing MCG from being the primary beneficiary[59](index=59&type=chunk)[62](index=62&type=chunk) Summarized Financial Information for Unconsolidated Equity Method Investees (in thousands) | Metric | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Revenues | $12,382 | $9,059 | $34,300 | $22,110 | | Operating income (loss) | $3,183 | $2,456 | $8,007 | $(722) | | Net income (loss) | $1,392 | $2,469 | $4,207 | $(709) | | Balance Sheet (as of) | October 2, 2022 | January 2, 2022 | | :-------------------- | :-------------- | :-------------- | | Total assets | $157,894 | $171,458 | | Total liabilities | $108,909 | $135,287 | | Net assets | $48,985 | $36,171 | [5. Leases](index=17&type=section&id=5.%20Leases) The company manages 108 operating leases and 3 finance leases for properties, with significant future lease payments and properties under construction - The Company has **108 operating leases** and **3 finance leases** for its properties, with terms ranging from 1 to 30 years for operating leases and 50 years for finance leases, including renewal options[65](index=65&type=chunk) - Deferred lease payments recorded in accounts payable decreased from **$12 million** as of January 2, 2022, to **$1 million** as of October 2, 2022, following negotiations during the COVID-19 pandemic[66](index=66&type=chunk) Maturity of Lease Liabilities (in thousands) as of October 2, 2022 | Fiscal year ended | Operating Leases (Undiscounted) | Finance Leases (Undiscounted) | | :---------------- | :------------------------------ | :---------------------------- | | Remainder of 2022 | $30,337 | $1,314 | | 2023 | $126,080 | $5,288 | | 2024 | $128,838 | $5,289 | | 2025 | $131,872 | $5,325 | | 2026 | $132,748 | $5,255 | | Thereafter | $1,645,919 | $200,705 | | Total undiscounted lease payments | $2,195,794 | $223,176 | | Present value adjustment | $1,021,665 | $152,434 | | Total net lease liabilities | $1,174,129 | $70,742 | - The Company has **13 lease agreements** for properties under construction, with estimated total undiscounted lease payments of **$1.31 billion**, expected to commence between fiscal years 2022 and 2025[74](index=74&type=chunk)[75](index=75&type=chunk) [6. Revenue Recognition](index=19&type=section&id=6.%20Revenue%20Recognition) Revenues are primarily derived from membership fees, in-house services, and other operations, with significant contract liabilities recognized from prior periods - Revenues primarily consist of annual membership fees, initial registration fees, food and beverage, accommodation, spa revenues from Houses, and other revenues from Scorpios Beach Club, Soho Works, stand-alone restaurants, Soho Home, and management fees[76](index=76&type=chunk) Estimated Future Revenues from Unsatisfied Performance Obligations (in thousands) | Category | Next twelve months from Oct 2, 2022 | Future periods | | :-------------------------------------- | :---------------------------------- | :------------- | | Membership, registration fees, and House Introduction Credits | $73,765 | $26,787 | | Total future revenues | $73,765 | $26,787 | Contract Balances (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :--------------- | :-------------- | :-------------- | | Contract receivables | $32,285 | $19,338 | | Contract assets | $6,312 | $5,553 | | Contract liabilities | $129,641 | $113,630 | - Revenue recognized from contract liabilities at the beginning of the period was **$27 million** for the 13 weeks ended October 2, 2022, and **$65 million** for the 39 weeks ended October 2, 2022[80](index=80&type=chunk) [7. Inventories, Prepaid Expenses and Other Current Assets](index=20&type=section&id=7.%20Inventories,%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Inventories and other current assets increased, primarily driven by higher raw materials, service stock, and other receivables - Inventories primarily consist of raw materials, service stock, supplies (food and beverage), and finished goods, totaling **$37.45 million** as of October 2, 2022, up from **$29.70 million** as of January 2, 2022[81](index=81&type=chunk) Components of Prepaid Expenses and Other Current Assets (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :-------------------------------- | :-------------- | :-------------- | | Amounts owed by equity method investees | $381 | $879 | | Prepayments and accrued income | $21,145 | $26,037 | | Contract assets | $6,312 | $5,553 | | Other receivables | $53,275 | $24,535 | | Total prepaid expenses and other current assets | $81,113 | $57,004 | [8. Property and Equipment, Net](index=20&type=section&id=8.%20Property%20and%20Equipment,%20Net) Additions to property and equipment totaled $26 million for the 13 weeks and $64 million for the 39 weeks, mainly for leasehold improvements - Additions to property and equipment, net, totaled **$26 million** for the 13 weeks and **$64 million** for the 39 weeks ended October 2, 2022, primarily for leasehold improvements and fixtures at existing sites[84](index=84&type=chunk) [9. Goodwill](index=20&type=section&id=9.%20Goodwill) Goodwill decreased to $187.42 million as of October 2, 2022, primarily due to foreign currency translation adjustments impacting UK and Europe segments Goodwill by Reportable Segment (in thousands) | Segment | January 2, 2022 | Foreign currency translation adjustment | October 2, 2022 | | :-------------- | :-------------- | :------------------------------------ | :-------------- | | UK | $100,665 | $(17,686) | $82,979 | | North America | $47,446 | — | $47,446 | | Europe and ROW | $66,146 | $(9,154) | $56,992 | | Total | $214,257 | $(26,840) | $187,417 | [10. Accrued Liabilities](index=20&type=section&id=10.%20Accrued%20Liabilities) Total accrued liabilities increased to $65.90 million as of October 2, 2022, mainly due to higher hotel deposits and other accruals Components of Accrued Liabilities (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :------------------------ | :-------------- | :-------------- | | Accrued interest | $634 | $727 | | Hotel deposits | $12,181 | $9,246 | | Trade, capital and other accruals | $53,081 | $53,154 | | Total accrued liabilities | $65,896 | $63,127 | [11. Debt](index=21&type=section&id=11.%20Debt) The company's debt structure includes Senior Secured Notes, property mortgage loans, and related party loans, with an amended Revolving Credit Facility extending maturity to July 2026 Debt Balances, Net of Debt Issuance Costs (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :-------------------------------------------------------------------------------- | :-------------- | :-------------- | | Senior Secured Notes, interest at 8.1764% for Initial Notes and 8.5% for Additional Notes, maturing March 2027 | $550,397 | $447,719 | | Other loans | $9,669 | $18,547 | | Total long-term debt, net of current portion | $559,169 | $459,343 | Property Mortgage Loans, Net of Debt Issuance Costs (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :------------------------------------------ | :-------------- | :-------------- | | Term loan, interest at 5.34%, maturing Feb 2024 | $54,531 | $54,293 | | Mezzanine loan, interest at 7.25%, maturing Feb 2024 | $61,481 | $60,829 | | Total property mortgage loans | $116,012 | $115,122 | Related Party Loans, Net of Current Portion and Imputed Interest (in thousands) | Category | October 2, 2022 | January 2, 2022 | | :-------------------------------------------------------------------------------- | :-------------- | :-------------- | | Related party loans, unsecured, 7% interest bearing, maturing Sep 2023 | $21,265 | $21,092 | | Related party loans, unsecured, 4% interest bearing, maturing Dec 2022 | $398 | $569 | | Total related party loans, net of current portion | $0 | $0 | - The Company exercised an option on March 9, 2022, to issue **$100 million** of Additional Notes under the Senior Secured Notes, receiving net proceeds of **$99 million**, with maturity on March 31, 2027[94](index=94&type=chunk) - The Revolving Credit Facility was amended on November 10, 2022, extending its maturity to July 25, 2026, and introducing a Leverage Covenant effective from March 2023 when **40% or more** of the facility is drawn[90](index=90&type=chunk)[167](index=167&type=chunk) [12. Fair Value Measurements](index=23&type=section&id=12.%20Fair%20Value%20Measurements) The fair values of current assets and liabilities approximate their carrying values, while debt instrument fair values are estimated using discounted cash flow analysis - The carrying values of current assets and liabilities approximate fair value due to short-term maturities, with fair values of debt instruments estimated using discounted cash flow analysis[103](index=103&type=chunk)[104](index=104&type=chunk) Estimated Fair Values of Debt Instruments (in thousands) | Category | Carrying Value (Oct 2, 2022) | Fair Value (Oct 2, 2022) | Carrying Value (Jan 2, 2022) | Fair Value (Jan 2, 2022) | | :-------------------- | :--------------------------- | :----------------------- | :--------------------------- | :----------------------- | | Senior Secured Notes | $550,397 | $562,262 | $447,719 | $460,182 | | Property mortgage loans | $116,012 | $114,488 | $115,122 | $115,122 | | Other non-current debt | $9,301 | $9,118 | $12,260 | $12,260 | | Total | $675,710 | $685,868 | $575,101 | $587,564 | [13. Share-Based Compensation](index=23&type=section&id=13.%20Share-Based%20Compensation) Share-based compensation expense decreased for the 13 weeks ended October 2, 2022, primarily due to prior year IPO-related award vesting acceleration - Share-based compensation expense decreased by **$7.50 million (49%)** to **$7.78 million** for the 13 weeks ended October 2, 2022, primarily due to a one-time expense recognized in Q3 2021 from IPO-related award vesting acceleration[262](index=262&type=chunk) - For the 39 weeks ended October 2, 2022, share-based compensation expense was **$19.86 million**, a slight decrease from **$19.96 million** in the prior year, with new grants and a modification expense for a departing COO partially offsetting the prior year's IPO acceleration[109](index=109&type=chunk)[313](index=313&type=chunk) Share-Based Compensation Expense (in thousands) | Category | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | SARs | $1,665 | $10,804 | $5,876 | $14,178 | | Restricted stock awards (Growth Shares) | $550 | $3,252 | $1,853 | $4,555 | | RSUs | $3,143 | $1,225 | $9,234 | $1,225 | | Type III modification | $1,902 | — | $1,902 | — | | Employer-related payroll expense | $518 | — | $990 | — | | Total share-based compensation expense | $7,778 | $15,281 | $19,855 | $19,958 | - As of October 2, 2022, total unrecognized compensation expense is approximately **$6 million** for SARs (1.01 years), **$2 million** for restricted stock awards (0.90 years), and **$19 million** for RSUs (2.62 years)[113](index=113&type=chunk) [14. SHHL Redeemable Preferred Shares and SHHL Redeemable C Ordinary Shares](index=24&type=section&id=14.%20SHHL%20Redeemable%20Preferred%20Shares%20and%20SHHL%20Redeemable%20C%20Ordinary%20Shares) The company issued SHHL senior convertible preference shares and redeemable C ordinary shares in 2021, which were subsequently converted or exchanged into common stock during the IPO - On March 31, 2021, the Company issued **$175 million** in SHHL senior convertible preference shares, which were converted into **15,526,619 shares of Class A common stock** upon the IPO closing on July 19, 2021[111](index=111&type=chunk) - In March 2021, the Company issued SHHL redeemable C ordinary shares for **$47 million**, which were later exchanged into Class A and Class B common stock of MCG during the Reorganization Transactions prior to the IPO[112](index=112&type=chunk) [15. Loss Per Share and Shareholders' Equity](index=24&type=section&id=15.%20Loss%20Per%20Share%20and%20Shareholders'%20Equity) As of November 14, 2022, the company had 197.58 million shares outstanding, with Class B holders having 10 votes per share, and a stock repurchase program in effect - As of November 14, 2022, the registrant had **197,581,922 shares outstanding**, comprising **56,081,537 Class A common stock** and **141,500,385 Class B common stock**[4](index=4&type=chunk) - Class A common stock holders have **one vote per share**, while Class B common stock holders have **10 votes per share**, with Class B shares convertible to Class A on a one-for-one basis[115](index=115&type=chunk) Changes in MCG Common Stock (Shares) | Category | As of Jan 2, 2022 | Shares repurchased | RSUs vested | As of Oct 2, 2022 | | :---------------- | :---------------- | :----------------- | :---------- | :---------------- | | Class A Common Stock | 61,029,730 | (4,941,560) | 1,009,295 | 57,097,465 | | Class B Common Stock | 141,500,385 | — | — | 141,500,385 | - The Company's board authorized a stock repurchase program for up to **$50 million** of Class A common stock on March 18, 2022, with **4,941,560 shares repurchased for $35 million** as of October 2, 2022[117](index=117&type=chunk)[119](index=119&type=chunk) Basic and Diluted Loss Per Share (in thousands, except per share amounts) | Metric | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :---------------------------------------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net loss attributable to Membership Collective Group Inc. | $(91,668) | $(77,027) | $(234,106) | $(223,493) | | Adjusted net loss attributable to Class A and Class B common stockholders | $(91,668) | $(138,936) | $(234,106) | $(284,494) | | Weighted average shares outstanding (basic and diluted) | 199,390,524 | 194,015,595 | 201,020,845 | 164,208,521 | | Basic and diluted loss per share | $(0.46) | $(0.72) | $(1.16) | $(1.73) | [16. Commitments and Contingencies](index=27&type=section&id=16.%20Commitments%20and%20Contingencies) The company is not involved in material litigation and has limited capital expenditure commitments, having received insurance proceeds for a fire incident - The Company is not a party to any material litigation outside the ordinary course of business and does not expect current legal proceedings to have a material adverse effect on its financial statements[123](index=123&type=chunk) - Capital expenditure commitments contracted for but not yet incurred total **$2 million** as of October 2, 2022, primarily for site improvement costs[126](index=126&type=chunk) - Following a fire at Little Beach House Malibu in February 2022, the Company recorded less than **$1 million** in business interruption insurance proceeds for lost profits and less than **$1 million** in property damage insurance proceeds[128](index=128&type=chunk)[129](index=129&type=chunk) [17. Income Taxes](index=28&type=section&id=17.%20Income%20Taxes) The company's effective tax rate differs from the US statutory rate primarily due to a full valuation allowance against deferred tax assets generated from tax losses - The Company's effective tax rate for the 13 weeks ended October 2, 2022, was **(3.41)%**, compared to **(3.91)%** in the prior year, and **(1.32)%** for the 39 weeks, compared to **0.91%** in the prior year[132](index=132&type=chunk) - The effective tax rate differs from the US statutory rate of **21%** primarily due to a full valuation allowance recorded against tax losses and other deferred tax assets generated during the period[132](index=132&type=chunk) - Incremental deferred tax assets of **$20 million** (13 weeks) and **$45 million** (39 weeks) were generated from tax losses, share-based compensation, and excess interest, with a full valuation allowance applied[131](index=131&type=chunk) [18. Segments](index=28&type=section&id=18.%20Segments) The company operates through three reportable segments (UK, North America, Europe and ROW) and 'All Other' operations, with performance assessed by adjusted EBITDA - The Company operates through three reportable segments: UK, North America, and Europe and ROW, with other operations grouped under 'All Other' (Retail, Soho Works, Soho Restaurants, Cities Without Houses)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Segment performance is assessed by adjusted EBITDA, which excludes depreciation, amortization, interest, taxes, and certain non-cash and non-recurring items[136](index=136&type=chunk) Consolidated Revenue by Segment (in thousands) | Segment | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :-------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | North America | $97,322 | $62,043 | $279,398 | $154,308 | | United Kingdom | $74,855 | $54,531 | $212,679 | $105,962 | | Europe & ROW | $54,471 | $32,462 | $106,055 | $51,107 | | All Other | $39,398 | $30,523 | $103,692 | $64,662 | | Consolidated Revenue | $266,046 | $179,559 | $701,824 | $376,039 | Adjusted EBITDA Reconciliation (in thousands) | Metric | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :-------------------------------------- | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net loss | $(91,373) | $(76,221) | $(235,554) | $(226,366) | | EBITDA | $(42,936) | $(31,026) | $(107,046) | $(95,619) | | Adjusted EBITDA | $27,671 | $15,450 | $62,017 | $(1,473) | [19. Related Party Transactions](index=34&type=section&id=19.%20Related%20Party%20Transactions) The company engages in various related party transactions, including term loans, property leases, and management fee arrangements with affiliated entities - The Company has various related party transactions, including a **£40 million term loan facility** with related individuals, property lease agreements with affiliates of The Yucaipa Companies LLC, and management fee arrangements[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) - An affiliate of Yucaipa Companies LLC received a **$10 million fee** for financial advisory services related to debt and preference share issuances, and a **$9 million fee** as IPO sponsor[159](index=159&type=chunk)[160](index=160&type=chunk) - Management fees from The LINE and Saguaro hotels (affiliate of Yucaipa Companies LLC) were **$3 million** (13 weeks) and **$7 million** (39 weeks) for the period ended October 2, 2022[161](index=161&type=chunk) [20. Subsequent Events](index=35&type=section&id=20.%20Subsequent%20Events) Subsequent events include further Class A common stock repurchases, a new restricted stock unit award, and an extension of the Revolving Credit Facility's maturity date - Since October 2, 2022, the Company repurchased **1,219,799 shares of Class A common stock for $5 million** under its ongoing stock repurchase program[163](index=163&type=chunk) - In October 2022, a new restricted stock unit award for **300,000 Class A Common Stock shares** was granted to a former employee, with the associated expense recognized in full in the period[164](index=164&type=chunk) - The Revolving Credit Facility's maturity date was extended from January 25, 2024, to **July 25, 2026**, on November 10, 2022, with new leverage covenants[167](index=167&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, capital resources, and critical accounting estimates [Overview](index=37&type=section&id=Overview) Membership Collective Group (MCG) operates a resilient global membership platform with diverse brands, experiencing significant revenue growth driven by member loyalty and expansion - MCG operates a global membership platform with **38 Soho Houses**, **9 Soho Works**, The Ned, The LINE and Saguaro hotels, Scorpios Beach Club, and Soho Home, serving approximately **211,400 members** as of October 2, 2022[172](index=172&type=chunk) - The company's membership model has shown resilience through economic cycles and the COVID-19 pandemic, with high retention rates and a growing global waitlist of approximately **85,000 applicants**[176](index=176&type=chunk)[177](index=177&type=chunk) Revenue Breakdown (39 Weeks Ended) | Revenue Category | Oct 2, 2022 (in millions) | % of Total (2022) | Oct 3, 2021 (in millions) | % of Total (2021) | | :----------------- | :------------------------ | :---------------- | :------------------------ | :---------------- | | Membership Revenues | $196 | 28% | $137 | 36% | | In-House Revenues | $306 | 44% | $129 | 34% | | Other Revenues | $200 | 28% | $111 | 30% | | Total Revenues | $702 | 100% | $376 | 100% | Key Performance and Operating Metrics | Metric | As of Oct 2, 2022 | As of Oct 3, 2021 | | :------------------------ | :---------------- | :---------------- | | Number of Soho Houses | 38 | 32 | | Number of Soho House Members | 152,165 | 117,728 | | Number of Other Members | 59,186 | 26,775 | | Number of Total Members | 211,351 | 144,503 | | Number of Active App Users | 156,769 | 93,410 | | Financial Metric | 13 Weeks Ended Oct 2, 2022 | 13 Weeks Ended Oct 3, 2021 | 39 Weeks Ended Oct 2, 2022 | 39 Weeks Ended Oct 3, 2021 | | :------------------------ | :------------------------- | :------------------------- | :------------------------- | :------------------------- | | Operating loss | $(70,581) | $(53,444) | $(183,491) | $(163,864) | | House-Level Contribution | $32,599 | $23,950 | $98,977 | $50,816 | | Other Contribution | $19,753 | $11,890 | $37,094 | $(3,613) | | Adjusted EBITDA | $20,260 | $8,820 | $37,838 | $(26,528) | [Results of Operations](index=43&type=section&id=Results%20of%20Operations) The company achieved substantial revenue growth and improved profitability, with House-Level Contribution and Adjusted EBITDA showing significant year-over-year improvements [Comparison of the 13 weeks ended October 2, 2022 and October 3, 2021](index=43&type=section&id=Comparison%20of%20the%2013%20weeks%20ended%20October%202,%202022%20and%20October%203,%202021) The company experienced strong revenue growth across all categories for the 13 weeks, driven by increased membership, new House openings, and reduced COVID-19 restrictions Revenue Comparison (13 Weeks Ended, in thousands) | Revenue Category | Oct 2, 2022 | Oct 3, 2021 | Actual Change % | Constant Currency Change % | | :----------------- | :---------- | :---------- | :-------------- | :------------------------- | | Membership revenues | $71,023 | $51,162 | 39% | 63% | | In-House revenues | $108,488 | $66,859 | 62% | 90% | | Other revenues | $86,535 | $61,538 | 41% | 65% | | Total revenues | $266,046 | $179,559 | 48% | 74% | - Membership revenues increased by **39% (63% constant currency)** due to **32,393 additional Adult Paying Soho House members**, new House openings, and membership fee increases[221](index=221&type=chunk) - In-House revenues surged by **62% (90% constant currency)** as Houses returned to full trading capacity, new Soho Houses opened, and selective price increases were implemented[228](index=228&type=chunk) - Other revenues grew by **41% (65% constant currency)**, driven by increased sales at public restaurants and Scorpios, Mykonos, following reduced COVID-19 restrictions[234](index=234&type=chunk) - House-Level Contribution increased by **36% to $32.60 million**, while Other Contribution increased by **66% to $19.75 million**, reflecting improved performance and higher non-House membership revenues[244](index=244&type=chunk)[250](index=250&type=chunk) - Adjusted EBITDA increased by **$11.44 million to $20.26 million**, driven by increased operations and membership revenues, partially offset by higher operating expenses[270](index=270&type=chunk) - Foreign exchange loss, net, increased significantly by **$39.31 million to $53.91 million**, primarily due to the revaluation of dollar borrowings held by non-dollar Group undertakings amidst foreign exchange market volatility[263](index=263&type=chunk) [Comparison of the 39 weeks ended October 2, 2022 and October 3, 2021](index=50&type=section&id=Comparison%20of%20the%2039%20weeks%20ended%20October%202,%202022%20and%20October%203,%202021) Total revenues increased significantly by 87% for the 39 weeks, leading to substantial improvements in House-Level Contribution and Adjusted EBITDA Revenue Comparison (39 Weeks Ended, in thousands) | Revenue Category | Oct 2, 2022 | Oct 3, 2021 | Actual Change % | Constant Currency Change % | | :----------------- | :---------- | :---------- | :-------------- | :------------------------- | | Membership revenues | $195,685 | $136,518 | 43% | 59% | | In-House revenues | $305,928 | $128,911 | n/m | n/m | | Other revenues | $200,211 | $110,610 | 81% | n/m | | Total revenues | $701,824 | $376,039 | 87% | n/m | - Total revenues increased by **87% to $701.82 million**, driven by easing COVID-19 restrictions, new House openings, and increased membership fees[273](index=273&type=chunk)[284](index=284&type=chunk)[287](index=287&type=chunk) - House-Level Contribution increased by **95% to $98.98 million**, primarily due to the return of trading volumes and increased Soho House membership revenues, despite the dilutive impact of six new Houses[295](index=295&type=chunk) - Other Contribution saw a significant increase of **$40.71 million**, moving from a loss of **$3.61 million to a gain of $37.09 million**, driven by higher Non-House Membership Revenues and improved performance from public restaurants and Scorpios Beach Club[300](index=300&type=chunk) - Adjusted EBITDA increased by **$64.37 million**, moving from a loss of **$26.53 million to a gain of $37.84 million**, reflecting increased operations and membership revenues[319](index=319&type=chunk) - Foreign exchange loss, net, increased by **$97.64 million to $128.16 million**, primarily due to the revaluation of borrowings and increased foreign exchange volatility[314](index=314&type=chunk) - Net Interest Expense decreased by **21% to $52.95 million**, mainly due to the one-off loss on extinguishment of the Permira Senior Facility and an exit fee in the prior year, partially offset by incremental interest from new notes[317](index=317&type=chunk) [Non-GAAP Financial Measures](index=58&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP financial measures like Adjusted EBITDA and House-Level Contribution to GAAP, providing a constant currency view for performance evaluation - Adjusted EBITDA, House-Level Contribution, and Other Contribution are non-GAAP measures used to evaluate operating performance, excluding items like depreciation, interest, taxes, and certain non-cash or non-recurring expenses[136](index=136&type=chunk)[214](index=214&type=chunk) - Constant currency calculations are used to provide a more meaningful indication of actual year-over-year performance by eliminating fluctuations from currency exchange rates[214](index=214&type=chunk) Adjusted EBITDA Reconciliation (13 Weeks Ended, in thousands) | Metric | Oct 2, 2022 (Actuals) | Oct 3, 2021 (Actuals) | Actual Change % | Constant Currency Change % | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------- | :------------------------- | | Net loss | $(91,373) | $(76,221) | (20)% | (41)% | | Depreciation and amortization | $26,971 | $21,500 | 25% | 47% | | Interest expense, net | $18,453 | $20,827 | (11)% | 4% | | Income tax expense | $3,013 | $2,868 | 5% | 23% | | EBITDA | $(42,936) | $(31,026) | (38)% | (62)% | | Adjusted EBITDA | $20,260 | $8,820 | n/m | n/m | Adjusted EBITDA Reconciliation (39 Weeks Ended, in thousands) | Metric | Oct 2, 2022 (Actuals) | Oct 3, 2021 (Actuals) | Actual Change % | Constant Currency Change % | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------- | :------------------------- | | Net loss | $(235,554) | $(226,366) | (4)% | (15)% | | Depreciation and amortization | $72,490 | $61,250 | 18% | 31% | | Interest expense, net | $52,948 | $67,449 | (21)% | (13)% | | Income tax expense | $3,070 | $2,048 | 50% | 66% | | EBITDA | $(107,046) | $(95,619) | (12)% | (24)% | | Adjusted EBITDA | $37,838 | $(26,528) | n/m | n/m | [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash, operating cash flows, and an undrawn Revolving Credit Facility, funding working capital and significant capital expenditures - As of October 2, 2022, the Company had **$228 million** in cash and cash equivalents and **$7 million** in restricted cash, with an undrawn Revolving Credit Facility providing additional liquidity[45](index=45&type=chunk)[334](index=334&type=chunk) - Primary liquidity requirements include funding working capital, operating and finance lease obligations, capital expenditures for new Houses, and technology infrastructure investments[335](index=335&type=chunk) Summary of Cash Flow Data (39 Weeks Ended, in thousands) | Cash Flow Category | Oct 2, 2022 | Oct 3, 2021 | | :-------------------------------- | :---------- | :---------- | | Net cash provided by (used in) operating activities | $38,106 | $(114,939) | | Net cash used in investing activities | $(79,614) | $(79,556) | | Net cash provided by financing activities | $69,171 | $404,451 | | Net increase in cash and cash equivalents | $14,439 | $208,852 | - Net cash provided by financing activities for the 39 weeks ended October 2, 2022, was **$69.17 million**, primarily from **$99 million** in proceeds from borrowings under the Goldman Sachs Senior Secured Note Purchase Agreement[343](index=343&type=chunk) [Critical Accounting Estimates and Judgments](index=63&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) Financial statements rely on management's estimates and assumptions, with no significant changes reported in critical accounting policies compared to the prior annual report - Financial statements rely on management's estimates and assumptions, which affect reported assets, liabilities, revenues, and expenses, and are based on historical experience and various factors[346](index=346&type=chunk) - There have been no significant changes in critical accounting policies and estimates compared to those disclosed in the Annual Report on Form 10-K for the fiscal year ended January 2, 2022[346](index=346&type=chunk) [Emerging Growth Company Status](index=63&type=section&id=Emerging%20Growth%20Company%20Status) As an 'emerging growth company' under the JOBS Act, the company benefits from reporting exemptions, which may affect comparability with other public companies - As an 'emerging growth company' under the JOBS Act, the Company benefits from exemptions such as presenting only two years of audited financial statements, reduced executive compensation disclosures, and delayed adoption of new accounting standards[347](index=347&type=chunk) - These exemptions mean the Company's financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates[347](index=347&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company continuously monitors market risks, including foreign exchange, credit, liquidity, interest rates, inflation, and commodity prices, given global economic uncertainties - The Company's market risk exposure has not materially changed from previous disclosures but is continuously monitored due to global economic and political uncertainties, including the impact of the COVID-19 pandemic and the Russian invasion of Ukraine[349](index=349&type=chunk) - Foreign exchange risk is present due to significant operations in the UK and Europe, with natural hedges from local currency income and payments; a **10% strengthening/weakening of USD against GBP** could impact revenue by approximately **$4-5 million** and Net Loss by **$3 million** for the 13 weeks ended October 2, 2022[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) - The Company manages credit risk by dealing with high-credit-quality financial institutions for cash equivalents and accounts receivable, and liquidity risk through operating cash flows, cash balances, and an undrawn Revolving Credit Facility[357](index=357&type=chunk)[358](index=358&type=chunk) - Inflation risk impacts food, utility, labor, and rent costs, potentially affecting business, financial condition, and results of operations if price adjustments cannot offset cost increases without impacting demand; commodity price risks are also present for foodstuffs, natural gas, and oil[360](index=360&type=chunk)[361](index=361&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective due to material weaknesses in internal control over financial reporting, primarily related to accounting personnel and policy deficiencies - As of October 2, 2022, disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting[362](index=362&type=chunk) - The material weaknesses are attributed to insufficiently qualified accounting and finance personnel with US GAAP knowledge and ineffective policies for reviewing, supervising, and monitoring accounting and reporting functions[363](index=363&type=chunk) - No material changes in internal control over financial reporting occurred during the 39 weeks ended October 2, 2022[364](index=364&type=chunk) [PART II. OTHER INFORMATION](index=66&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, other information, and a list of exhibits [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings outside the ordinary course of business and anticipates no significant adverse financial effects - The Company is not a party to any litigation other than in the ordinary course of business, and management does not expect current legal proceedings to have a material adverse effect on its financial statements[368](index=368&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were identified, except for the potential adverse effects of the Russia-Ukraine conflict on the global economy and company operations - No material changes to risk factors were identified, except for the potential adverse effects of the Russia-Ukraine conflict on the global economy[370](index=370&type=chunk) - The conflict could lead to lower travel demand, cyberattacks, supply disruptions, workforce volatility, changes to foreign currency exchange rates, and financial market volatility, intensifying existing risks[371](index=371&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered equity sales, detailed IPO proceeds of $388 million, and disclosed its ongoing Class A common stock repurchase program - No unregistered sales of equity securities were reported[372](index=372&type=chunk) - The Company received aggregate net proceeds of **$388 million** from its IPO on July 19, 2021, after deducting underwriting discounts and other offering costs, including a **$9 million fee** to an affiliate of Yucaipa Companies LLC[373](index=373&type=chunk) Issuer Purchases of Equity Securities (13 Weeks Ended Oct 2, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) | | :-------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------ | | July 4, 2022 through July 31, 2022 | 513,570 | $6.68 | $27 | | August 1, 2022 through August 28, 2022 | 1,002,066 | $7.27 | $20 | | August 29, 2022 through October 2, 2022 | 846,447 | $5.41 | $15 | | Total | 2,362,083 | $6.47 | | [Item 3. Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[375](index=375&type=chunk) [Item 4. Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the Company[376](index=376&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[377](index=377&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, certifications, and XBRL documents - The exhibits include amendments to restricted stock award agreements, a consultancy agreement, a settlement deed, an amendment letter agreement to the Revolving Credit Facility, and various certifications (e.g., CEO/CFO certifications, XBRL documents)[380](index=380&type=chunk) [Signatures](index=69&type=section&id=Signatures) The report is duly signed on behalf of Membership Collective Group Inc. by its Chief Executive Officer and Chief Financial Officer on November 16, 2022 - The report was signed by Nick Jones, Chief Executive Officer, and Thomas Allen, Chief Financial Officer, on November 16, 2022[384](index=384&type=chunk)

Financial Data and Key Metrics Changes - Total revenue grew almost 100% year-over-year, with an additional $10 million potential growth impacted by foreign exchange headwinds [34] - Adjusted EBITDA for Q2 was $15 million, exceeding consensus estimates, with a year-over-year increase of $28 million and a quarter-over-quarter increase of $30 million [23][37] - Net debt stood at $444 million at the end of the quarter, with cash and cash equivalents totaling $266 million [38][39] Business Line Data and Key Metrics Changes - In-house revenues increased by 140% year-over-year, driven by a 40% year-over-year increase in RevPAR [23][36] - Membership growth was strong, with 11,000 new Soho House members added since the last quarter, bringing the total to 142,000 members [17] - Soho Home sales rose by 105% year-over-year, indicating strong performance across other business lines [28] Market Data and Key Metrics Changes - The company added 10 new cities to its "Cities Without Houses" program, enhancing its global expansion strategy [15] - The waitlist for MCG memberships reached an all-time high of 82,000, reflecting strong demand [26] Company Strategy and Development Direction - The company focuses on six strategic priorities: global expansion of Soho House, enhancing membership value, ESG initiatives, operational excellence, growing new membership brands, and improving digital experiences [6] - The company plans to open nine new Soho Houses in 2022, with five already opened and four more expected by year-end [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of membership demand despite economic challenges, with retention rates remaining around 95% [18] - The company anticipates continued strong performance in Europe, while acknowledging challenges in Hong Kong and foreign exchange impacts [40][46] Other Important Information - The company repurchased 2.3 million shares for $17 million during the second quarter [39] - The company is focused on generating free cash flow and expects to be cash flow positive in Q4 of this year [39] Q&A Session Summary Question: Pricing Power Discussion - Management indicated that pricing has been increased across all channels and they do not foresee further increases in the second half of the year, focusing instead on delivering value for members [50] Question: House Revenue Cadence - July trends continued strong, with like-for-like revenue growth for houses up about 13%, indicating positive momentum [52] Question: Performance During Economic Weakness - Management noted that historically, membership retention remains strong during recessions, with no significant drop-off in member spending observed [62][64] Question: Membership Quality Amid Rapid Growth - Management highlighted that there is currently high demand for membership applications, ensuring quality remains intact as the company expands [71][76]

AUGUST 2022 0 Membership Collective Group em lder Forward Looking Statements Forward Looking Statements This presentation contains forward-looking statements that are based on management's beliefs and assumptions and on information currently available to management. In some cases, you can identify forward-looking statements by the following words: 'may,' 'will,' 'could,' 'would,' 'should,' 'expect,' 'intend,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'predict,' 'project,' 'potential,' 'continue,' 'ongoin ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 3, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from Commission File Number: 001-40605 Membership Collective Group Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 86-3664553 | | --- | --- | ...

Membership Collective Group Inc. (MCG) Q1 2022 Earnings Conference Call May 18, 2022 8:30 AM ET Company Participants Greg Feehely - Director, Investor Relations Nick Jones - Founder and Chief Executive Officer Andrew Carnie - President Humera Afzal - Chief Financial Officer Conference Call Participants Steven Zaccone - Citi Stephen Grambling - Goldman Sachs Joseph Greff - JP Morgan Operator Good morning. My name is Rob, and IÂ'll be your conference operator today. At this time, I would like to welcome every ...