In calculating GAAP and Non-GAAP EPS, the Company is currently using an effective tax rate of approximately 25.8%. Oak Street has proven to be a trustworthy partner throughout our sale leaseback process, said Brian Kahn, President and CEO of Franchise Group. Presenter SpeechAndrew Kaminsky Thank you, Gary. For the quarter ended Dec. 31, 2022, total reported revenue for Franchise Group was approximately $1.1 billion, an increase of 18.4% from $942.3 million in the same quarter of 2021. Franchise Group acquired the business for $700 million in Q1 of 2021 from Sentinel Capital Partners, a private equity firm. A degrading macroeconomic environment and a downgrade in guidance resulted in tremendous down-pressure being applied to the company's stock price, which is now down 37.74% year-to-date. Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The most active traders at the company are In the release, Franchise Group President and CEO Brian Kahn said the company sees potential significant standalone earnings accretion, and noted Badcock adds scale to, and anticipated synergies with our existing home furnishings franchise concepts, which we are confident will specifically benefit American Freight and Buddys In the last 3 years at Franchise Group, Inc, Brian R. Kahn has sold an estimated value of $393.03K worth. I find it also tremendously interesting that Brian was an operator and franchisor of Buddy's Home Furnishings rent-to-own stores, a company that would be later merged with Liberty Tax in order to form the Franchise Group. Even after taking the downgraded guidance into consideration, the company is still selling at approximately 9.36x EV/EBITDA, 5.75x P/FCF, and an 8.25x P/E. Mr. Mattes holds a Bachelor of Arts degree in Political Science from Colgate University. The company is being led by an experienced and well-respected value-oriented investor, Brian Kahn. WebBrian R. Kahn Managing Partner. Franchise Group in early June proposed a bid of $60 per share to acquire Kohls at a roughly $8 billion valuation. Prior to joining Franchise Group, Inc., Mr. Kaminsky has held various executive and operating positions with Viavi Solutions Inc., Cobham plc and Aeroflex Holding Corp., focusing on mergers and acquisitions, their subsequent integration and driving operational efficiencies across these companies. A real-time webcast of the conference call will be available on the Events page of Franchise Groups website at www.franchisegrp.com. All rights reserved. Learn More on Franchise Group's active insiders. I am not receiving compensation for it (other than from Seeking Alpha). This is possibly the best testament to the efficiency of the management capital allocation. $11.46K on September 15, 2020. We have it now, we're very excited about that and I don't think anybody knows our businesses better than we do, which is a good thing. Title: POS Specialist. President, Chief Executive Officer & Director. Sylvian Learning Overview (FRG August Investor Presentation). In his capacity at Vintage, Mr. Laurence served as a director and/or committee member of various companies, including IEC Electronics, East Coast Welding & Fabrication, Buddys Home Furnishings, API Technologies and Liberty Tax. Mr. Kahn has served as the Chief Executive Officer of Franchise Group since October 2, 2019. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. Our financial performance in the fourth quarter was in line with the outlook we provided in November, saidBrian Kahn, Franchise Groups president and CEO.Our franchising activity continued to accelerate across FRG in 2022. Our financial performance in the fourth quarter was in line with the outlook we provided in November, stated Brian Kahn, Franchise Groups President and CEO. Get notified the next time Brian Randall Kahn buys or sells Franchise Group stock. While the growth aspect of the company remains largely subservient to M&A execution down the road, the dividend is still well supported by fundamentals, even when accounting for the downgraded guidance, which lowered EBITDA estimates to $390 million for this year. Badcock as a business segment has generated $52.27 million in EBITDA over the last two quarters. For fiscal 2023, FRG expects to generate revenue of approximately$4.4 billion with a net loss of approximately$1.4 millionor4 cents per share. Chart Data in Insider Trading History Table. Still, we believe that a part of the program will be unleashed in the short-term nonetheless, with management not being able to afford to deny an enticing opportunity like this one. Enter your email address below to get our daily insider buying and selling report. WebKahn has served as Chairman of the Board of Buddys Home Furnishings, API Technologies Corporation, and White Electronic Designs Corporation Mr. Kahn has also served as a On a journey from law to investing. The nature of Franchise Group's business model can leave the company with a lot of cash on hand but little room to deploy it. Management incentives are completely aligned with the rest of the shareholders as the CEO and the rest of the insiders own more than 30% of the company and are still buying more. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Brian R. Kahn's largest purchase order was 1,000,000 units , worth over From May 2014 to July 2021, Ms. McMillan-McWaters held various legal roles with Liberty Tax, a subsidiary of NextPoint Financial Inc., most recently as General Counsel from October 2019 to July 2021. Furniture Today is the complete information source for the furniture industry featuring retailer and manufacturing news, plus product trends and market analysis. Brian Kahn, president, chief executive officer and a director of Franchise Group, is also the founder and serves as investment manager of Vintage Capital Management. Ms. McMillan-McWaters is a member of the New York State Bar and registered Corporate Counsel for the Commonwealth of Virginia. In that context, management might rule that capital is to be much better deployed externally, seizing the opportunity. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. It operates through the following segments: Vitamin Shoppe, American Freight, Pet Supplies Plus, Badcock, Sylvan and Buddy's. Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. from Harvard University. In a call with investors, Kahn noted that American Freight rebounded nicely from the overstocked position it found itself in at the beginning of the quarter. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Founder of Kahn Capital Management LLC and Vintage Capital Management LLC, Brian Randall Kahn is a businessperson who has been at the helm of 6 different companies and currently is President, Chief Executive Officer & Director at Franchise Group, Inc., President & Chief Executive Officer at Franchise Group Intermediate Holdco LLC (a subsidiary of Franchise Group, Inc.), Managing Partner at Vintage Capital Management LLC, Investment Manager at Vintage Albany Partners GP LLC and General Partner for Vintage Albany Partners LP (both are subsidiaries of Vintage Capital Management LLC) and Chairman & Chief Executive Officer for Spectrum Control, Inc. Mr. Kahn received a B.A. Copyright FactSet Research Systems Inc. All rights reserved. He is also the founder and managing partner of Kahn Capital Management, which later became Vintage Capital Management, through which the entire story of Franchise Group began. Source: FactSet, Indexes: Index quotes may be real-time or delayed as per exchange requirements; refer to time stamps for information on any delays. Why Investors Should Root for the Deal. Andrew M Laurence, Executive Vice President, WebView Brian Kahns profile on LinkedIn, the worlds largest professional community. You also have the option to opt-out of these cookies. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. The conference call can also be accessed live via telephone at (833) 630-1956. Management still reinforces this thesis as of the last earnings call, drawing differences between the current environment and a "real recession" as they have referred to it. Please. A multi-layered approach to creating shareholder value has seen investors enjoy the company delivering a five-fold market alpha while at the same time collecting extremely generous dividend distributions. Company Participants. The conglomerate is currently consisting of the rent-to-own retailer Buddy's, health and wellness retailer The Vitamin Shoppe, affordable furniture retailer American Freight, pet store supplies retailer Pet Supplies Plus, tutoring services company Sylvan Learning, and the home-furnishings retailer W.S. These cookies will be stored in your browser only with your consent. Bloomberg Chief Washington Correspondent Joe Mathieu delivers insight and analysis on the latest headlines from the White House and Capitol Hill, including conversations with influential lawmakers and key figures in politics and policy. Prior to joining Franchise Group, Mr. Evans served as Vice President of Franchising with UBREAKIFIX/Asurion, Vice President of Franchising with Rent A Tire and held various executive roles including Vice President of Franchising with Aarons, Inc. for over 22 years. Now, in practice, there are just not enough sellers at this price for the buy-back program to be able to have this sort of effect. from Harvard University. Mr. Harvey attended DeVryUniversity for Electrical Engineering. At Badcock, Kahn said Franchise Group continues testing third-party waterfall financing solutions and those tests are being rolled out to a few franchise owners. Non-GAAP EPS is calculated by adding the tax effected impact of adjustments to EBITDA to net income on a per share basis. This business segment generated only $12.4 million in EBITDA for 2021 and slightly more than 6.70 million over the course of the last six months. Rating. Brian Kahn, sitting at the helm of the Franchise Group, is displaying a master class in capital allocation that turned a relatively negligible company into a formidable franchise holding conglomerate. For the full fiscal year 2022, total reported revenue for Franchise Group was $4.398 billion, up 35.1% from $3.255 billion in 2021. If you have an ad-blocker enabled you may be blocked from proceeding. Badcock has been acquired through an all-cash transaction in Q4 of 2021 for $580 million. He is also General Partner for Vintage Albany Acquisition LLC, General Partner of Vintage Albany Partners LP and Member of Caiman Capital GP LP. Yeah, so we authorized, at our two Board meetings ago, we authorized a $500 million buyback over the next few years. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. Data may be intentionally delayed pursuant to supplier requirements. Certainly, it is something that we - just say we've not had an open window, still don't have an open window. This fact combined with a recent failed bid to acquire the retail giant Kohl's Corporation (KSS) for $60 per share at a roughly $8 billion valuation resulted in tremendous down-pressure being applied to the company's stock price. At current market prices, the buy-back program would in theory be able to acquire close to 15 million shares, or just shy of 40% of the entire market capitalization of Franchise Group. Your California Privacy Rights/Privacy Policy. The Vitamin Shop Overview (FRG August Investor Presentation). Brian emphasized this point during the first quarter earnings call, issuing equity to finance further M&A action is largely off the table. Sources: FactSet, Dow Jones, ETF Movers: Includes ETFs & ETNs with volume of at least 50,000. WebMr. Net income from continuing operations was $36 million or $0.83 per fully diluted share. We also use third-party cookies that help us analyze and understand how you use this website. Mr. Seeton served as the Senior Vice President and Chief Financial Officer of API Technologies Corporation, Business Unit Finance Director for the radio frequency and microwave business unit of Analog Devices, Inc. and as the Director of Corporate Finance for Hittie Microwave Corp. Mr. Seeton is a Certified Public Accountant and holds a Bachelor of Science degree in Accounting from Bentley College (now Bentley University) and an M.B.A. from Cornell University. Our financial performance in the fourth quarter was in line with the outlook we provided in November, stated Brian Kahn, Franchise Groups President and CEO. Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements of historical fact. Fundamental company data and analyst estimates provided by FactSet. For the Three Months Ended December 31, 2022, Stock-based and long term executive compensation, Securitized accounts receivable interest income, Securitized accounts receivable bad debt reserve, Prepayment penalty on early debt repayment, Right-of-use asset and long-term asset impairment, Gain on sale-leaseback and owned properties, net, For the Twelve Months Ended December 31, 2022. DELAWARE, Ohio, Feb. 28, 2023 (GLOBE NEWSWIRE) -- Franchise Group, Inc. (NASDAQ: FRG) (Franchise Group, FRG or the Company) today announced the financial results for its fiscal fourth quarter and fiscal year ended December 31, 2022. Brand Portfolio Overview (FRG August Investor Presentation). I have no business relationship with any company whose stock is mentioned in this article. We have the expertise, capital and training to catapult franchise brands forward. Mr. Kahn brings to the Board extensive management and consumer finance expertise, as well as public company experience. Prior to his corporate roles, Mr. Kaminsky spent over 15 years as an investment banker, including as a Managing Director at Oppenheimer & Co. Inc. and CIBC. Mr. Kahn owns 8,864,610 shares of Franchise Group stock worth more than $246,524,804 as of March 1st. The only daily news program focused exclusively on technology, innovation and the future of business hosted by Ed Ludlow from San Francisco and Caroline Hyde in New York. In the past Brian Randall Kahn occupied the position of Chairman for API Technologies Corp., Chairman of Buddy'S Home Furnishings, Chairman at Microsemi Corp. - Memory & Storage Solutions, Investment Manager at Caiman Partners LP, Investment Manager at Kahn Capital Management LLC and Member-Managers Board at Buddy's Newco LLC. Kohls CEO loss is Levi Strausss gain, says retail expert, Activist Investor Looks to Oust Kohls CEO, Chairman, Kohl's stock dives after profit outlook slashed over actions to cut excess inventory, inflation pressure on middle-income customers, A Dose of Vitamin Shoppe Could Be Good for Your Portfolio, Kohl's failed takeover was just one of a wave of abandoned deals amid market volatility, Kohl's Stock Slips as Analysts Assess Its Standalone Future, Kohls Scraps Talks for Sale to Franchise Group, Panera Bread Ends IPO Deal With Danny Meyers SPAC, Kohl's Terminates Sale Talks With Franchise Group. Ms. McMillan-McWaters holds a Bachelor of Arts degree from Seton Hall University and a Juris Doctorate from the University of North Carolina School of Law. Prior to joining Franchise Group, Mr. Wright served in various executive positions at Conns, Inc. including COO and CFO. (In thousands, except share count and per share data), Current installments of long-term obligations, net, Current installments of debt secured by accounts receivable, net, Long-term obligations, net, excluding current installments, Non-current debt secured by accounts receivable, net, Common stock, $0.01 par value per share, 180,000,000 and 180,000,000 shares authorized, 34,925,773 and 40,296,688 shares issued and outstanding at December31, 2022 and December25, 2021, respectively, Preferred stock, $0.01 par value per share, 20,000,000 and 20,000,000 shares authorized, 4,541,125 and 4,541,125 shares issued and outstanding at December31, 2022 and December25, 2021, respectively, Selling, general, and administrative expenses, Income (loss) from continuing operations before income taxes, Income (loss) from discontinued operations, net of tax. Prior to Coral Reef, Mr. Laurence was the Managing Partner of Causeway Partners, a Boston-based private equity group making control and structured equity investments in U.S. lower-middle market companies. Sources: FactSet, Tullett Prebon, Commodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. Trusting the management and their ability to deliver on execution is the most important in this investment thesis. In calculating EPS, the Company is using approximately 34.9 million weighted average shares outstanding. Franchise Group is a textbook example of a management team that has "skin in the game" and then some. $3.75M . Franchise Group chief executive officer Brian Kahn outlined why his company was interested in purchasing Kohl's. Reconciliations of Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS to their respective most comparable GAAP measures, are included below under Non-GAAP Financial Measures and Key Metrics.. This fact combined with a, to acquire the retail giant Kohl's Corporation (, ) for $60 per share at a roughly $8 billion valuation resulted in tremendous down-pressure being applied to the company's stock price. The report also stated that FRG could also be There is something about avoiding a "fixed" dividend and having it tied towards a performance goal that resonates extremely well with me. Brian took multiple opportunities to acquire more shares in the company around the $34-37 range, either directly or through his investment vehicle Vintage Capital Management. In the last 3 years at Franchise Group, Inc, Brian R. Kahn has sold an We did not intend to do a 10b5-1. By using our website or by closing this message box, you agree to our use of browser capability checks, and to our use of cookies as described in our Cookie Policy. Net loss was $710,000 or 8 cents per fully diluted share, compared with net income of $147.2 million in 2021, or $3.53 per share. In total, Brian R. Kahn has made about 12 transactions over 3 years of their time at Franchise Group, Inc. This category only includes cookies that ensures basic functionalities and security features of the website. WebJob. The most recent insider tranaction occured on February, 23rd when Director Lisa M Fairfax bought 45 shares worth more than $1,423.35. Mr. Laurence also currently serves as the Executive Vice President of Franchise Group. This is also a small sub-thesis about American Freight being essentially a recession-resistant business, given it operates as a bargain furniture store that might have largely gone down the gutter given the recent developments. The Commonwealth of Virginia we finished the year with 259 new territories sold a... Sylvan and Buddy 's Alpha ) rate of approximately 25.8 % page of Franchise Group Vitamin Shop (! At a roughly $ 8 billion valuation have no business relationship with any company stock... 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Largest professional community your browser only with your consent value during other periods is calculated as the Executive President! The best testament to the efficiency of the website effected impact of adjustments to EBITDA net! Through an all-cash transaction in Q4 of 2021 from Sentinel capital Partners, a private firm.