e.l.f.(US:ELF)2025-11-10 18:47Financial Performance - Net sales increased by $42.9 million, or 14%, to $343.9 million for the three months ended September 30, 2025, compared to $301.1 million for the same period in 2024[117] - Gross profit rose by $24.8 million, or 12%, to $238.9 million for the three months ended September 30, 2025, with a gross margin decrease to 69% from 71% due to tariffs[118] - For the six months ended September 30, 2025, net sales increased by $72.1 million, or 12%, to $697.7 million compared to $625.6 million for the same period in 2024[123] - Net income for the three months ended September 30, 2025, was $2.996 million, a decrease from $19.020 million in the same period of 2024[116] Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $45.0 million, or 24%, to $231.1 million for the three months ended September 30, 2025, with SG&A as a percentage of net sales rising to 67%[119] - Interest expense increased to $9.2 million for the three months ended September 30, 2025, compared to $3.8 million for the same period in 2024, primarily due to increased debt[121] Acquisition and Financing - The company acquired HRBeauty LLC ("rhode") for $896.5 million on August 5, 2025, funded through cash, equity, and potential earnout[113] - The company borrowed an incremental term loan of $600.0 million on August 5, 2025, to finance the acquisition of rhode[114] - Cash flows from financing activities for the six months ended September 30, 2025, provided $594.9 million, primarily related to the Fifth Amendment establishing the Term Facility[141] Cash and Liquidity - As of September 30, 2025, the company had $194.4 million in cash and cash equivalents and $243.3 million in borrowing capacity under its Amended Revolving Credit Facility[131] - The unused balance of the Amended Revolving Credit Facility as of September 30, 2025, was $243.3 million[135] - The company anticipates funding ongoing cash needs from existing cash, cash generated from operations, and if necessary, draws on the Amended Revolving Credit Facility[135] - The company expects to meet its planned operating, investing, and financing needs for the next twelve months through operating cash flow and available financing[135] Tax and Working Capital - The effective income tax benefit rate was 175.1% for the three months ended September 30, 2025, compared to an effective rate of 31.9% for the same period in 2024[122] - As of September 30, 2025, working capital was $246.0 million, an increase of 14.5% from $214.8 million as of March 31, 2025[133] Cash Flow Activities - Net cash provided by operating activities for the six months ended September 30, 2025, was $50.6 million, compared to $12.4 million for the same period in 2024, representing a significant increase of 308.1%[138][139] - Net cash used in investing activities for the six months ended September 30, 2025, was $595.0 million, primarily related to the rhode Acquisition[140] Interest Rates - The interest rate for the Term Facility as of September 30, 2025, was approximately 6.3%[152] - The interest rate for the Revolving Credit Facility as of September 30, 2025, was approximately 6.2%[152] Credit Facilities - The Fourth Amendment established a revolving credit facility of $500.0 million, available for working capital and acquisitions, with a maturity date of March 3, 2030[147]