Cowen. Future of the Consumer Conference. april 2018

Transcription

1 Cowen Future of the Consumer Conference april 2018

2 Disclaimer This presentation (this Presentation ) contains information about YogaWorks, Inc. and its consolidated subsidiaries ( YogaWorks or the Company ). This Presentation is not to be printed, downloaded or distributed, nor shall this Presentation, or the information contained herein, be copied, reproduced, disclosed or distributed to others, in whole or in part, at any time. Each recipient shall return or destroy this Presentation, together with any copies thereof, at any time upon request of the Company. The information contained in this Presentation is summary information that is intended to be considered in the context of management s presentation of the information therein. YogaWorks undertakes no duty or obligation to publicly update or revise the forward-looking statements or other information contained in this Presentation. These materials contain information about YogaWorks, its historical performance and general information about the market. You should not view information related to the past performance of YogaWorks or information about the market, as indicative of future results, the achievement of which cannot be assured. Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by YogaWorks or as legal, accounting or tax advice. YogaWorks makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. Certain information set forth herein includes estimates, projections and targets and involves significant elements of subjective judgment and analysis, which may or may not be correct. 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YogaWorks undertakes no duty to update any forward-looking statements made herein. Management uses certain non-gaap financial performance measures to evaluate YogaWorks performance. Management believes that these measures provide investors with a greater understanding of YogaWorks business and that investors should review the same supplemental non-gaap financial measures that management uses to analyze YogaWorks performance. These measures should be considered in addition to, and not in lieu of YogaWorks financial statements prepared in accordance with GAAP. Please refer to the Appendix for definitions and explanations of these non-gaap measures and reconciliations to the most directly comparable GAAP measures. Amounts and percentages may reflect rounding adjustments and consequently totals may not appear to sum. This Presentation may contain information obtained from third parties. 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Information in this Presentation is as of December 31, 2017, unless otherwise noted. 2

3 YogaWorks for Everybody Healthy lifestyle brand focused on enriching and transforming lives through yoga Largest diversified yoga instruction company founded in 1987, with studio programming tailored to the local community that attracts students of all ages, income levels and abilities Operate 66 studios in 9 markets across the U.S. Omnichannel offering through an online subscription service: MyYogaWorks.com 3 million visits, 190,000 classes and 240,000+ students practicing in 2017 Gold standard of yoga teacher training 3

4 Investment Highlights LEADING YOGA BRAND KNOWN FOR GOLD STANDARD PRODUCT AND SERVICE UNIQUELY POSITIONED TO CONSOLIDATE THE FAST GROWING & HIGHLY FRAGMENTED YOGA INDUSTRY STRONG AND SUSTAINABLE STUDIO LEVEL EBITDA MARGIN CLEAR PATH TO PROFITABLE GROWTH WITH SCALABLE INFRASTRUCTURE PASSIONATE AND EXPERIENCED MANAGEMENT TEAM 4

5 The Yoga Market: Large and Growing As a 5,000 year-old tradition focused on both physical and mental well-being, yoga has not only withstood the test of time but continues to gain momentum each year $16.8 billion industry, growing by double digits Appeals to people of all ages, income levels and abilities Provides digital detox YOGA PRACTITIONERS (1) (MILLIONS) MALE YOGA PARTICIPATION IN THE US (2) (MILLIONS) CAGR: 13% CAGR: 26% NEW WAVE OF YOUNGER YOGIS (2) (% OF POPULATION WHO TRIED YOGA) 28% 37% E (1) Source: Ipsos / Yoga Journal Yoga in America Study, IBISWorld Industry Report - Pilates & Yoga Studios in the US (2) Source: 2016 Yoga in America Study 10 0 All Americans Under 18 5

6 Our Opportunity: Consolidate this Large, Fragmented Market 36.7M students practice in 33,000 studios across the country (1) Independent operators eager to sell results in rich acquisition pipeline Boston 3 Studios New England 1.0M Northern California 13 Studios Pacific 6.8M Mountain 2.1M North West 1.8M North East 4.4M Mid Atlantic 8.0M New York City 5 Studios Los Angeles 17 Studios Orange County 4 Studios South West 3.6M South East 1.4M South Atlantic 7.7M Baltimore/ Washington DC 13 Studios Atlanta 4 Studios Houston 7 Studios YogaWorks Studios (2) (1) Source: IBISWorld Industry Report - Pilates & Yoga Studios in the US. As of November 2016 (2) Note: Number of studios is as of December 31,

7 Unique Consolidation Opportunity Where Everyone WINS Independent Owner Teachers Issue Burdened by back office administrative work Not employees (no benefits, no career) Solution YogaWorks provides liquidity event YogaWorks takes over operations while keeping teacher/student community intact YogaWorks employs teachers and provides teaching opportunities in more studios Students Not enough flexibility with locations and class schedules YogaWorks gives students an option to practice at more locations with consistent quality teaching/service 7

8 YogaWorks is a Leading Healthy Lifestyle Brand 8

9 Strong Track Record of Acquisitive Growth Acquisitions have been part of YogaWorks DNA August: IPO (Nasdaq: Yoga) Q3/Q4: Acquired 16 studios in D.C.,Virginia, Maryland, Houston, Atlanta 2015 Acquired 17 studios in Northern California, Baltimore and Boston Acquired by Great Hill Partners 2013 Launched MyYogaWorks.com Expanded primarily through acquisitions into NY and CA Launched teacher training program

10 Strong Track Record of Acquisitive Growth Acquisitions have been part of YogaWorks DNA August: IPO (Nasdaq: Yoga) Q3/Q4: Acquired 16 studios in D.C.,Virginia, Maryland, Houston, Atlanta 2015 Acquired 17 studios in Northern California, Baltimore and Boston Acquired by Great Hill Partners 2013 Launched MyYogaWorks.com Expanded primarily through acquisitions into NY and CA Launched teacher training program

11 Strong Track Record of Acquisitive Growth Acquisitions have been part of YogaWorks DNA August: IPO (Nasdaq: Yoga) Q3/Q4: Acquired 16 studios in D.C.,Virginia, Maryland, Houston, Atlanta 2015 Acquired 17 studios in Northern California, Baltimore and Boston Acquired by Great Hill Partners 2013 Launched MyYogaWorks.com Expanded primarily through acquisitions into NY and CA Launched teacher training program

12 Strong Track Record of Acquisitive Growth Acquisitions have been part of YogaWorks DNA August: IPO (Nasdaq: Yoga) Q3/Q4: Acquired 16 studios in D.C.,Virginia, Maryland, Houston, Atlanta 2015 Acquired 17 studios in Northern California, Baltimore and Boston Acquired by Great Hill Partners 2013 Launched MyYogaWorks.com Expanded primarily through acquisitions into NY and CA Launched teacher training program

13 The Gold Standard of Teacher Training curriculum 200 & 300 hour Revenue Leadership 100+ trainings in 16 countries brand Alumni 85 Master trainers Data as of

14 Wide-Ranging Appeal Broad programming tailored to the local community with inclusive pricing DIVERSE PROGRAMMING AND PRICING OPTIONS APPEALS TO BROAD STUDENT DEMOGRAPHIC (1) Fast Flow 6.5% Family Focused Signature Classes 19.0% Single Class 10-Class Package 20-Class Package Monthly Membership $20-28 $ $ $ % Annual Membership $ % Relaxing Restorative Integrated Fitness 26.4% Slow Stretch 4.4% (1) 2015 YogaWorks survey 14

15 We Keep it Local Each studio is unique and reflects its community Branded Entrance Off-the-Grid Experience Clean Changing Rooms Welcoming Front Desk Curated Yoga Merchandise 15

16 MyYogaWorks.com Digital Platform Extends Reach THE BENEFITS Yoga anytime, anywhere Complements studio experience Extends brand beyond studio geographies Gives teachers additional career opportunities THE RESULTS 1,100+ professionally-shot videos 25,000 users 700,000+ classes streamed Streamed in over 185 countries Data as of

17 Consistent Growth VISITS (1) (MILLIONS) NET REVENUE ($ MILLIONS) CAGR: 11% CAGR: 7% E E Net Revenue Deferred Revenue 1. Student visits include each student s attendance at a class in such period in which a teacher fee was paid for such class 17

18 Continual Supply of Studios to Fill Pipeline for Growth 33,000 Yoga and pilates studios in the U.S. (1) 1,100+ LOCATIONS identified based on proprietary selection criteria 250+ Studio Discussions (1) Source: IBISWorld Industry Report - Pilates & Yoga Studios in the US. As of November 2016 Note: Unless otherwise indicated, information is as of December 31,

19 Continual Supply of Studios to Fill Pipeline for Growth ACQUISITION TARGET PROFILE 33,000 Yoga and pilates studios in the U.S. (1) 1,100+ LOCATIONS identified based on proprietary selection criteria Revenue (AUV) Studio-Level EBITDA Return on Invested Capital $ K ~ 20% 2 to 4 Years 250+ Studio Discussions (1) Source: IBISWorld Industry Report - Pilates & Yoga Studios in the US. As of November 2016 Note: Unless otherwise indicated, information is as of December 31,

20 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Efficient Execution Low Risk Integration BEST PRACTICES Programming Operations (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results 20

21 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Strong Local Reputation Diversified Programming Limited Teacher Concentration Efficient Execution Low Risk Integration BEST PRACTICES Programming Operations (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results 21

22 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Strong Local Reputation Diversified Programming Limited Teacher Concentration Efficient Execution Standard Diligence Process Simple Deal Structure Target Payback (for acquisitions): 2 to 4 years (2) Low Risk Integration BEST PRACTICES Programming Operations (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results 22

23 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Strong Local Reputation Diversified Programming Limited Teacher Concentration Efficient Execution Standard Diligence Process Simple Deal Structure Target Payback (for acquisitions): 2 to 4 years (2) Low Risk Integration Maintain teachers, schedules and staff to secure community Leverage existing POS systems Consolidate back office functions BEST PRACTICES Programming Operations (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results 23

24 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Strong Local Reputation Diversified Programming Limited Teacher Concentration Efficient Execution Standard Diligence Process Simple Deal Structure Target Payback (for acquisitions): 2 to 4 years (2) Low Risk Integration Maintain teachers, schedules and staff to secure community Leverage existing POS systems Consolidate back office functions BEST PRACTICES Programming Operations Optimize class schedules Introduce or improve teacher training Schedule master classes for teachers continuing education Introduce MyYogaWorks.com (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results 24

25 YogaWorks Has A Unique and Proven Acquisition Identification and Integration Process that Yields Results (1) SYSTEMATIZED ACQUISITION PROCESS Disciplined Identification Strong Local Reputation Diversified Programming Limited Teacher Concentration Efficient Execution Standard Diligence Process Simple Deal Structure Target Payback (for acquisitions): 2 to 4 years (2) Low Risk Integration Maintain teachers, schedules and staff to secure community Leverage existing POS systems Consolidate back office functions BEST PRACTICES Programming Optimize class schedules Introduce or improve teacher training Schedule master classes for teachers continuing education Introduce MyYogaWorks.com (1) Total visits in the studios acquired in 2015 increased more than 7% in 2016, our first full fiscal year of operating these studios, over 2015 (2) Company s target payback is not indicative nor a guarantee of future results Operations Incentive Staff Compensation Plan Sales & Marketing: local grassroots outreach, digital marketing, single website/mobile app, referrals Central retail purchasing and logistics Data Reporting 25

26 Future Brand Extension Opportunities Licensing Opportunities Apparel & Retail Expansion Publishing of Digital Media Corporate and Insurance Company Partnerships 26

27 Brand Positioned for Strong Sustainable Growth Expand Footprint in North America Over Next Several Years Maintain Strong Studio-Level EBITDA Margin Solid Base and Scalable Infrastructure Leads to Sustainable Growth Revenue and Free Cash Flow Growth Note: Company s long term financial targets are not indicative nor a guarantee of future results 27