Regulatory Compliance and Investigations - The company is subject to an ongoing SEC investigation related to the restatement of financial results and material weaknesses in internal controls, which may lead to litigation and increased costs [52]. - Compliance with SEC and Nasdaq requirements is critical, as failure to meet these standards could lead to regulatory penalties or delisting [43]. - The company has incurred substantial costs related to the SEC investigation and may continue to do so, regardless of the outcome [53]. - On May 4, 2023, the company received a notice from Nasdaq for non-compliance with timely filing requirements, which could lead to delisting if not resolved [136]. - The company has regained compliance with Nasdaq's filing requirements as of March 21, 2024, but is under a "Mandatory Panel Monitor" for one year [137]. - The company is subject to FTC rules and state consumer protection laws, and failure to substantiate product claims could result in enforcement actions that harm business operations [197]. - The company is subject to the U.K. Bribery Act and FCPA, which impose strict compliance requirements that could lead to penalties if violated [125]. - The company has policies in place to comply with anti-corruption laws, but cannot guarantee that all employees and partners will adhere to these regulations [128]. - Legal proceedings and investigations could materially and adversely affect the company's financial condition and operations, potentially harming its reputation [119]. - The company is currently not involved in any pending litigation that could materially impact its business, aside from an SEC investigation [122]. Financial Performance and Risks - Material weaknesses in internal control over financial reporting have been identified, which could impact the accuracy and timeliness of financial disclosures [55]. - The company faces risks related to cash flow and liquidity, with challenges such as declining sales and increased competition potentially weakening financial stability [38]. - The company recorded a non-cash impairment charge of $68.7 million for the Obagi Skincare business due to discrepancies between projected and actual performance post-acquisition [80]. - The company expects capital and operating expenditures to increase over the next several years as it expands its international footprint and distribution channels [74]. - The Milk Makeup business has a history of operating losses and may face challenges in achieving profitability despite increasing distribution channels [73]. - The company's quarterly operating results have historically been variable, influenced by factors such as consumer spending and operational challenges [71]. - The company may not achieve anticipated benefits from acquisitions due to integration challenges and potential unanticipated costs [69]. - The company faces risks in managing inventory for Obagi products, which could materially affect operations and financial condition if demand forecasts are inaccurate [84]. - The company relies on Waldencast LP for cash flow, with no independent means of generating revenue, making it dependent on distributions for paying taxes and expenses [86]. - The company may face significant costs and management distraction due to potential investigations or enforcement actions related to anti-corruption laws [129]. Market and Competitive Landscape - Future growth and profitability of the Obagi Skincare and Milk Makeup businesses depend on successfully implementing the growth strategy, which includes significant investments in innovation and marketing [60]. - The cosmetics industry is highly competitive, and failure to adapt to shifting consumer trends could result in reduced sales and profitability [46]. - Operating in international markets exposes the company to risks such as economic instability and currency fluctuations, which can impact market access and profitability [40]. - The cosmetics industry is highly competitive, with many competitors possessing greater financial and marketing resources, potentially affecting Obagi's growth prospects [173]. - New product introductions carry risks, including potential rejection by consumers or retailers, which could hinder sales objectives and growth [174]. International Expansion and Regulatory Challenges - International expansion is a core growth strategy, with significant investments in Southeast Asia, including the acquisition of Obagi Vietnam, but challenges such as declining revenues and regulatory hurdles exist [94]. - The company is exposed to risks from currency fluctuations and trade disputes as it increases its share of revenue from international sales [97]. - Regulatory changes in international markets, particularly regarding product classifications and safety standards, could significantly impact operations and growth [98]. - The company aims to expand Obagi product sales in international markets, necessitating separate regulatory approvals in non-U.S. jurisdictions [217]. - Regulatory approval processes vary by country, and failure to obtain necessary approvals could materially harm the business [218]. - The introduction of new regulations, such as MoCRA, could complicate compliance for Milk Makeup products, potentially increasing operational costs [226]. Product and Supply Chain Risks - The company relies on third-party partners for manufacturing and distribution, making it vulnerable to disruptions that could harm operations and reputation [45]. - The company relies on third-party contract manufacturers (CMOs) for product production, which subjects it to regulatory compliance risks that could adversely affect operations and financial results [188]. - The reliance on CMOs for compliance with manufacturing regulations introduces risks that could lead to customer complaints and regulatory enforcement actions, adversely affecting the company's reputation and financial condition [190]. - The company is exposed to risks related to supply chain disruptions, including reliance on third-party suppliers for production and packaging [181]. - Rising fuel and freight costs could increase shipping expenses, adversely affecting gross margins and profitability [183]. Shareholder and Securities Matters - The company may issue additional securities without shareholder approval, potentially diluting existing shareholders' interests [139]. - The company’s securities may experience volatility due to various factors, including market conditions and shareholder actions [134]. - The concentration of voting power with members of the Sponsor and Cedarwalk may adversely affect the price of the company's securities [143]. - The company does not intend to pay cash dividends for the foreseeable future, focusing on retaining future earnings for business development [153]. - The company has outstanding warrants to purchase an aggregate of 29,533,282 Class A ordinary shares at an exercise price of $11.50 per share, expiring on July 27, 2027 [141]. Compliance with Data Protection Laws - Compliance with evolving privacy and data protection laws is complex and costly, with potential penalties for noncompliance that could adversely affect operations [100]. - The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020, increasing compliance costs and potential liabilities for companies handling personal information [101]. - The California Privacy Rights Act (CPRA), effective January 1, 2023, expands the CCPA and introduces additional obligations, potentially increasing compliance costs and regulatory exposure [101]. - The EU General Data Protection Regulation (GDPR) imposes fines ranging from €10 million to €20 million or 2% to 4% of annual global revenue for breaches, whichever is higher [103]. - The U.K. GDPR imposes separate fines ranging from £8.7 million to £17.5 million or 2% to 4% of total worldwide annual revenue for violations [103]. - The cross-border data transfer landscape is evolving, with new regulations potentially increasing compliance costs and affecting business operations [105]. - The U.K. implemented its own international data transfer agreement in March 2022, requiring organizations to use specific agreements for data transfers to non-adequate third countries [106]. - Increased regulation of cookies and tracking technologies may lead to substantial costs and impact online activities, including user targeting capabilities [108]. - The introduction of the Data (Use and Access) Bill in the U.K. could lead to increased compliance costs and regulatory enforcement risks if approved [109].

Financial Performance - FY 2024 - Waldencast's Net Revenue reached $273.9 million, with a Comparable Net Revenue Growth of 27.5%[39] - The Adjusted Gross Profit was $203.6 million, representing a 74.3% Adjusted Gross Margin[39] - Adjusted EBITDA stood at $40.3 million, resulting in a 14.7% Adjusted EBITDA Margin[39] - Adjusted Free Cash Flow was $31.7 million, with an Adjusted EBITDA to Adjusted Free Cash Flow Conversion of 78.8%[41] Financial Performance - Q4 2024 - Net Revenue for Q4 2024 was $72.1 million, showing a 29.4% Comparable Net Revenue Growth[36] - Adjusted Gross Profit for Q4 reached $52.6 million, with a 73.0% Adjusted Gross Margin[36] - Adjusted EBITDA for Q4 was $11.2 million, resulting in a 15.5% Adjusted EBITDA Margin[36] Brand Performance - FY 2024 - Obagi Medical's Net Revenue was $149.3 million, with a Comparable Net Revenue Growth of 30.7% and an Adjusted EBITDA of $30.5 million[80] - Milk Makeup's Net Revenue was $124.6 million, with an Adjusted EBITDA of $29.1 million[80] Future Outlook - For FY 2025, the company anticipates mid-teens Net Revenue growth and mid-to-high teens Adjusted EBITDA Margin[45]

Waldencast plc (NASDAQ:WALD) Q4 2024 Earnings Conference Call March 19, 2025 8:30 AM ET Company Participants Allison Malkin - Investor Relations Michel Brousset - Founder and Chief Executive Officer Manuel Manfredi - Chief Financial Officer Conference Call Participants Jonna Kim - TD Cowen Ashley Helgans - Jefferies Linda Bolton Weiser - D.A. Davidson Olivia Tong - Raymond James Operator Greetings, welcome to the Waldencast Fourth Quarter and Fiscal Year 2024 Earnings Call. At this time, all participants ar ...

Financial Data and Key Metrics Changes - Net revenue for Q4 reached $72.1 million, a 29.4% increase year-over-year, with Milk Makeup growing 31.9% and Obagi Medical growing 27.7% [18][19] - For the full fiscal year, net revenue was $273.9 million, a 27.5% increase compared to the previous year [20] - Adjusted EBITDA for Q4 doubled to $11.2 million, with an adjusted EBITDA margin of 15.5%, reflecting strong revenue momentum [19][21] - Adjusted gross profit for the full year rose to $203.6 million, a 35.3% increase, with an adjusted gross profit margin of 74.3% [20][21] Business Line Data and Key Metrics Changes - Milk Makeup generated Q4 net revenue of $29.9 million, a 31.9% increase, with adjusted EBITDA rising to $4.8 million [28][30] - Obagi Medical achieved Q4 net revenue of $42.2 million, a 27.7% increase, with adjusted EBITDA of $9.8 million [38][39] - For the fiscal year, Milk Makeup's net revenue was $124.6 million, a 24% increase, while Obagi Medical's net revenue was $149.3 million, a 30.7% increase [30][39] Market Data and Key Metrics Changes - The prestige beauty market grew 7% in 2024, with professional skincare growing 8% and prestige makeup growing 5% [7][8] - The company noted that its brands are outperforming the market, with Milk Makeup growing five times faster than the overall beauty market rate [14][47] Company Strategy and Development Direction - The company aims to build a multi-brand platform encompassing various strategic categories and geographies, focusing on operational efficiency and brand equity [12][16] - The growth strategy for Milk Makeup includes expanding brand awareness, launching innovative products, and broadening distribution both online and offline [31][34] - Obagi Medical's strategy focuses on dermatological brand DNA, cutting-edge innovation, and increasing brand awareness to fuel growth [40][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of beauty consumers despite a changing macro environment, emphasizing premiumization trends [72] - The company anticipates strong performance in 2025, expecting mid-teens net revenue growth and further expansion of adjusted EBITDA margins [25][26] Other Important Information - The company secured a new $205 million credit facility, enhancing financial flexibility and extending debt maturity [24] - Cash position at the end of 2024 was $14.8 million, with an additional $30 million available on the revolving credit facility [23] Q&A Session Summary Question: Can you provide details on the cadence of innovation and confidence in sales acceleration? - Management highlighted that Q1's flat guidance is due to anniversary effects of previous successful launches and retail inventory adjustments, with expectations for strong sequential growth throughout the year [50][52][54] Question: What are the marketing strategies for the year? - Management plans to increase marketing investments, focusing on broader paid campaigns while maintaining organic growth strategies [61][63] Question: How is the macro environment affecting consumer health? - Management noted that the beauty industry remains resilient, with consumers continuing to spend on premium products despite some normalization in growth rates [70][72] Question: Will the Ulta launch affect Sephora sales? - Management confirmed that there is no loss of space at Sephora due to the Ulta launch, and the overall impact is expected to be incremental [88][90]

Core Insights - Waldencast achieved significant growth in Q4 2024, with net revenue of $72.1 million, representing a 30.8% increase year-over-year, and a 29.4% increase in comparable net revenue growth [5][12] - The company reported an adjusted EBITDA of $11.2 million, doubling from Q4 2023, reflecting strong operational performance and effective cost management [8][16] - Obagi Medical was recognized as the fastest-growing professional skincare brand in the US for 2024, driven by increased brand awareness and successful product innovations [3][13] Financial Performance - For the year ended December 31, 2024, Waldencast's net revenue reached $273.9 million, a 27.5% increase in comparable net revenue growth compared to 2023 [15][19] - The gross profit for FY 2024 was $191.7 million, with an adjusted gross profit margin of 74.3%, improving by 530 basis points from the previous year [15][19] - The net loss for FY 2024 improved to $48.6 million from $106.0 million in FY 2023, primarily due to operational growth and reduced non-recurring costs [16][19] Brand Highlights - Obagi Medical's Q4 2024 net revenue was $42.2 million, up from $32.5 million in Q4 2023, with a comparable net revenue growth of 27.7% [13][19] - Milk Makeup's Q4 2024 net revenue increased by 31.9% to $29.9 million, supported by initial shipments to Ulta Beauty and growing consumer demand [20][19] - Both brands have introduced innovative products, contributing to their growth and market presence [3][20] Strategic Initiatives - Waldencast secured a new $205 million credit facility to enhance financial flexibility and extend debt maturity, supporting its strategic priorities [10][2] - The company plans to continue expanding its distribution footprint, including the launch of Milk Makeup in over 600 Ulta Beauty locations in spring 2025 [3][18] - Waldencast aims for mid-teens net revenue growth in FY 2025, with expectations for further expansion of adjusted EBITDA margins [17][18]

Group 1 - Waldencast plc will release its Fourth Quarter and Fiscal Year 2024 results on March 18, 2025, after the U.S. market closes [1] - A conference call to discuss the results is scheduled for March 19, 2025, at 8:30 am ET, with participation details provided for investors and analysts [2] - The company aims to build a global beauty and wellness platform by developing and scaling purpose-driven brands, having completed a business combination with Obagi Skincare and Milk Makeup in July 2022 [3] Group 2 - Waldencast's business model focuses on brand-led operations, ensuring customer proximity and market responsiveness while maintaining brand distinctiveness [3] - The platform offers operational scale, expertise in managing global beauty brands, and a balanced portfolio to mitigate category fluctuations [3]

Core Insights - Waldencast plc is participating in the TD Cowen 2 Annual Glowing Ahead: Beauty & Wellness Summit on February 26, 2025, in New York [1] - CEO Michel Brousset will engage in a fireside chat presentation and host investor meetings during the summit [2] - Waldencast aims to build a global beauty and wellness platform by developing and scaling purpose-driven brands, with a focus on operational efficiency and market responsiveness [3] Company Overview - Waldencast was founded by Michel Brousset and Hind Sebti, with a vision to create a best-in-class beauty and wellness operating platform [3] - The company’s strategy includes acquiring and accelerating high-growth brands while maintaining their unique identities [3] - The initial step in this strategy was the business combination with Obagi Skincare and Milk Makeup, which allows brands to leverage operational scale and expertise [3]

Core Viewpoint - Obagi Medical has launched new skincare products, the Super Antioxidant Serum and Moisture Restore Hydration Replenishing Cream, aimed at addressing skin discoloration, oxidative stress, and hydration for all skin types [1][5]. Product Details - The Super Antioxidant Serum is designed to combat oxidative stress and improve skin brightness, containing encapsulated Silymarin and stabilized Vitamin C [3][5]. - The Moisture Restore Hydration Replenishing Cream provides multi-layered hydration using both low and high-molecular-weight Hyaluronic Acids [4][5]. Clinical Testing and Results - Clinical tests showed that 94% of subjects felt their skin was refreshed and smoother after one application, and 97% observed an improvement in overall skin appearance after two weeks [5][6]. Expert Involvement - Dr. Suzan Obagi, a leading dermatologist and Chief Medical Director at Obagi, developed these products based on her extensive research and experience treating various skin concerns, particularly hyperpigmentation and sensitive skin [2][3]. Company Background - Obagi Medical is recognized for its advanced skincare solutions, with a legacy of 35 years in the industry, initially focusing on hyperpigmentation treatment [7].

Core Viewpoint - Waldencast plc is set to announce its financial performance for the fourth quarter and full fiscal year 2024, along with the first three quarters of fiscal year 2025, through a series of press releases and conference calls [1][2][3][4][5]. Financial Performance Announcements - The company will release its fourth quarter and full fiscal year 2024 financial results after the U.S. stock market closes on March 18, 2025, followed by a conference call on March 19, 2025 [2]. - For the first quarter of fiscal 2025, the financial results will be released after the market closes on May 13, 2025, with a conference call scheduled for May 14, 2025 [3]. - The second quarter results will be announced after the market closes on August 18, 2025, with a call on August 19, 2025 [4]. - The third quarter results will be released after the market closes on November 11, 2025, with a conference call on November 12, 2025 [5]. Company Overview - Waldencast aims to build a leading global beauty and wellness platform by developing and scaling purpose-driven brands, emphasizing a brand-led business model that ensures customer proximity and market responsiveness [6]. - The company’s strategy includes leveraging operational scale, expertise in managing global beauty brands, and maintaining a balanced portfolio to mitigate category fluctuations [6].

Core Insights - Waldencast plc is participating in the 2025 International Master Course on Aging Science (IMCAS) World Congress in Paris from January 30 to February 1, 2025, highlighting its commitment to the beauty and wellness industry [1][2] Company Overview - Waldencast aims to build a global best-in-class beauty and wellness platform by developing, acquiring, and scaling purpose-driven brands, with a focus on maintaining each brand's distinct identity [4] - The company has already taken significant steps by combining with Obagi Skincare and Milk Makeup, which will allow its brands to benefit from operational scale and market responsiveness [4] Industry Participation - The IMCAS World Congress is a key event for dermatology, plastic surgery, and aging science, bringing together industry leaders to discuss innovations and business opportunities [2] - Michel Brousset, CEO of Waldencast, will participate in a capital markets roundtable to discuss the future of medical-grade skincare and the beauty industry [2] Expert Contributions - Dr. Suzan Obagi, Chief Medical Director at Obagi Medical, will lead sessions on enhancing skincare results and addressing complications related to energy-based devices, as well as a symposium on hyperpigmentation [3]