2023 Net Revenue of $218.1 millionGroup Combined Comparable Revenue of $212.5 million, a 15.3% increase vs 2022Group Combined Adjusted EBITDA of $24.4 million, up from ($8.8) million in 2022 WHITE PLAINS, N.Y., April 30, 2024 (GLOBE NEWSWIRE) -- Waldencast plc (NASDAQ:WALD) ("Waldencast" or the "Company"), a global multi-brand beauty and wellness platform, today announced that it furnished its results for the year ended 2023 ("FY2023 Financials") on Form 20-F to the U.S. Securities and Exchange Commission, which are also available on the Company's investor relations site at http://ir.waldencast.com/. Michel Brousset, Waldencast Founder and CEO, said: "As noted previously, 2023 was a year of transition as we implemented transformative changes to Obagi Skincare to strengthen its foundations in support of its future growth and actioned strategies that drove accelerated performance at Milk Makeup. In total, Waldencast delivered Group U.S. GAAP Net Revenue of $218.1 million; Group Combined Comparable Net Revenue growth of 15.3% from 2022 to reach $212.5 million; and Group Combined Adjusted EBITDA improved by $33.2 million against 2022 to $24.4 million. Whilst restructuring initiatives in Southeast Asia associated with delays in receiving product registrations moderated Obagi Skincare's overall revenue performance in FY2023 resulting in Obagi Comparable Net Revenue of $112.0 million, the Obagi Skincare business saw strong growth across the U.S. and its international business excluding Southeast Asia and in total recorded a $30.6 million improvement in Adjusted EBITDA to $20.8 million, up from ($9.8) million in 2022." "Milk Makeup achieved strong full year results for FY2023 with Net Revenue of $100.5 million, growing 38.6% vs. 2022 on a full year basis and Milk Adjusted EBITDA of $18.4 million vs. $6.9 million in 2022, driven by the successful implementation of its strategies, resulting in strong growth on core product category pillars, block buster innovations, and robust internationalization." "We believe the changes made during 2023 position us for a bright future with sales momentum building positively in the first quarter of 2024," Mr. Brousset continued. "To this end, we expect that Group Comparable Net Revenue for Q1 2024 will grow by approximately 20% vs. Q1 2023 Group Comparable Net Revenue of $56.1 million, with topline growth acceleration continuing through 2024. Group Adjusted EBITDA Margin for FY2024 is expected to expand to the mid-teens, driven by further improvement of gross margin, efficient investments in sales and marketing growth drivers, and dilution of fixed costs. Adding to the excitement of our business outlook are the favorable responses to our innovation across Obagi Skincare and Milk Makeup, with particular strength in our Cooling Water Jelly Tints and Obagi Hydro Drops Eye Gel. Overall, we remain excited about the opportunities that lie ahead and remain focused on delivering on our mission to build a best-in-class beauty and wellness multi-brand platform by creating, acquiring, accelerating and scaling the next generation of high-growth, purpose driven brands" concluded Mr. Brousset. Fiscal Year 2023 Highlights On July 27, 2022 (the "Closing Date"), Waldencast consummated the business combination ("Business Combination") with Obagi Global Holdings Limited ("Obagi Skincare") and Milk Makeup LLC ("Milk Makeup"). The results below set out certain key performance highlights for the business for the periods presented in the FY2023 Financials. When reading the FY2023 Financials and this release, you should note there is a clear division between the "predecessor" period that includes consolidated financial statements up to the Closing Date and "successor" period that includes all periods after the acquisition date. The predecessor and successor results shown on a U.S. GAAP basis are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare and Milk Makeup, whereas the predecessor period includes only Obagi Skincare's financial statements. We have included U.S. GAAP numbers for the period FY2022 but note that they are presented primarily to inform the components of the non-GAAP metrics and do not allow for comparability for the periods presented for the reasons stated above. Please refer to our 2023 20-F filed with the SEC on April 30, 2024 for further information. Please also refer to the definitions and reconciliations set out further in this release with respect to certain adjusted non-GAAP measures discussed below which are included to provide an easier understanding of the underlying performance of the business given the above but should not be seen as a substitute for the U.S. GAAP numbers presented in our 2023 20-F.   Waldencast Group Net Revenue and Combined Comparable Net Revenue: U.S. GAAP Net Revenue was $218.1 million in 2023, and $166.1 million in 2022. Removing the China Business and including Milk Makeup in the comparable period for 2022, Group Combined Comparable Net Revenue was $212.5 million in 2023, up 15.3% from $184.3 million in 2022. Group Net Income/Loss and Adjusted EBITDA: Net loss was $106.0 million in 2023, and $141.6 million in 2022. Adjusted EBITDA was $24.4 million in 2023, compared with $(15.9) million in 2022. Group Combined Adjusted EBITDA: Combined Adjusted EBITDA was $24.4 million (11.2% Adjusted EBITDA Margin) during 2023, compared with ($8.8) million during 2022. Obagi Skincare Obagi Net Revenue and Comparable Net Revenue: For Obagi Skincare, U.S. GAAP Net Revenue was $117.7 million in 2023, compared with $134.9 million in 2022. Obagi Comparable Net Revenue was $112.0 million in 2023, compared with $111.8 million in 2022. Obagi Net Income/Loss and Adjusted EBITDA: Obagi Skincare recorded a Net Loss of $32.2 million in 2023, compared with a Net Loss of $114.8 million in 2022. Obagi Adjusted EBITDA was $20.8 million in 2023, compared with $(9.8) million in 2022. Milk Makeup Milk Net Revenue and Combined Net Revenue: For Milk Makeup, U.S. GAAP Net Revenue was $100.5 million in 2023. Milk Combined Net Revenue was $72.5 million for 2022, resulting in a 38.6% growth across periods on a comparable basis. Milk Net Income/Loss and Adjusted EBITDA: Milk Makeup recorded a Net Loss of $5.6 million in 2023, compared with a Net Loss of $13.8 million in 2022 on a comparable basis. Milk Adjusted EBITDA in 2023 was $18.4 million, compared with comparable Milk Adjusted EBITDA of $6.9 million in 2022, driven by continued strong sales growth globally and improving gross margin. Balance Sheet and Liquidity Liquidity: As at December 31, 2023, Waldencast had net debt of $141.8 million, including $21.1 million in cash and cash equivalents. This compares to net debt of $176.1 million as at December 31, 2022, including $8.7 million of cash and cash equivalents. Total cash flow in the period January 1, 2023 to December 31, 2023 was $12.4 million, including proceeds from the private placement conducted by Waldencast in September 2023. The RCF facility of $50 million was undrawn as of December 31, 2023. Outstanding shares: As of April 15, 2024, the Company had 122,189,142 ordinary shares outstanding, consisting of 109,703,729 Class A ordinary shares outstanding and 12,485,413 Class B ordinary shares outstanding. As of December 31, 2023, the Company had 122,076,410 ordinary shares outstanding, consisting of 101,228,857 Class A ordinary shares outstanding and 20,847,553 Class B ordinary shares outstanding. Fully Diluted Shares decreased from 129,695,296 at December 31, 2023 to 126,341,388 as of April 15, 2024, primarily driven by forfeitures of unvested shares and lower in-the-money dilutive instruments. As of April 15, 2024, 59,843,155 Class A ordinary shares remain subject to contractual lock-up arrangements entered into in connection with the September 2023 private placement, of which (i) 7,159,376 are locked until May 8, 2024, (ii) 31,205,649 are locked until September 14, 2024 and (iii) 21,478,130 are locked until November 8, 2024. Contractual lock-ups previously applying to former members of Milk Makeup and founders expired during the course of 2023. Further details regarding the duration of these lock-ups are set forth in our 2023 20-F. Obagi Skincare Obagi Skincare is a flagship well established brand in the physician dispensed market, one of the most attractive sub-segments of premium skin care in the U.S. Obagi Skincare's mission is to partner with skincare professionals to deliver transformative skin results to patients worldwide. With its breakthrough technology and clinically proven results, Obagi Skincare unlocks high loyalty from both consumers and physicians, and we believe is well positioned to answer the growing consumer need for clinically proven skin care, while also paving the way for the brand to expand into other categories. As previously reported, in 2023, Obagi Skincare implemented a number of initiatives designed to accelerate the transformation of the brand and deliver on its ambitious mission, both domestically and internationally. These initiatives included: the hiring of a new management team for Obagi Skincare, including for the strategic Southeast Asia region; devising and taking steps to implement a strategy to expand and modernize the brand aimed at building broad-based awareness; building on science-led product innovation with new launches, including the award-winning Hydrate Light® Gel Cream Moisturizer and the category-expanding Rebalance Skin Barrier Recovery Cream; strengthening its digital capabilities to better serve consumers and physicians; and strengthening the brand's presence internationally, including a strategic reset in Southeast Asia with the previously announced acquisition in Vietnam of the legacy Southeast Asia distributor and setting up of a local organization to support a direct distribution model in the region. In 2023, Obagi Skincare achieved U.S. GAAP Net Revenue of $117.7 million, compared with $134.9 million in 2022. Excluding sales from the China Business, in 2023 Obagi Skincare delivered Obagi Comparable Net Revenue of $112.0 million in 2023, compared to $111.8 million in 2022. The low growth in revenue was related to the loss in revenue related to the Southeast Asia Distributor which offset revenue growth in the U.S. and International Distributors. Obagi Skincare recorded a U.S. GAAP Net Loss of $32.2 million in FY 2023. Obagi Adjusted Gross Profit was   $83.7 million, up from $53.6 million in FY 2022. Obagi Adjusted EBITDA was $20.8 million in 2023, compared with ($9.8) million in the prior period. Milk Makeup Milk Makeup is a leading, award winning, prestige, clean makeup brand with unique products, a strong following among Gen-Z consumers and a growing global presence. Milk Makeup has built an organic following through a diverse and inclusive community known for its cultural relevance and iconic products. In 2023, Milk Makeup was the number 2 clean makeup brand at Sephora U.S., bringing a relevant promise of cool, clean, makeup that works. During 2023, Milk Makeup delivered growth through a balance of hero products and new innovation and grew domestically while significantly accelerating internationally. This translated into strong financial performance with U.S. GAAP Net Revenue of $100.5 million (+38.6%) in 2023, a gross margin of 64.7% and Net Loss of $5.6 million. Milk Adjusted EBITDA was $18.4 million in 2023, compared with $6.9 million in 2022 driven by continued strong sales growth globally and improving gross margin. In 2023, Milk Makeup advanced on its key strategic goals via: Successfully bringing market leading innovation with three high profile launches: Pore Eclipse Powder and Contouring Sticks (building upon existing hero franchises Pillars Pore Eclipse and the brand's stick format) and Odyssey Lip Oil Gloss; Accelerating awareness through community buzz, with Earned Media Value in the U.S. exceeding $200 million and growing +43% against 2022; Building credibility through editorial award wins, with 31 product awards in 2023 from prestigious titles including Allure, Cosmopolitan, Glamour and Elle; and Expanding the brand presence in high demand markets such as the U.S. via Kohl's, the U.K., Columbia, Chile and Germany. Financial Overview In accounting for the Business Combination, Waldencast was deemed to be the accounting acquirer, and Obagi Skincare was deemed to be the predecessor entity for purposes of financial reporting. Under the acquisition method of accounting, Waldencast's assets and liabilities retained their carrying values and the assets and liabilities associated with Obagi Skincare and Milk Makeup were recorded at their fair values measured as of the acquisition date, which created a new basis of accounting. When reading the FY2023 Financials and this release, you should note there is a clear division for FY2022 between the "predecessor" period that includes consolidated financial statements up to the Closing Date and "successor" period that includes all periods after the acquisition date. The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare's financial statements. Supplemental to the reported financial results set out in this section, management has also included certain key financial highlights for the business for the period covered in the FY2023 Financials which include non-GAAP measures which management uses to describe the underlying performance of the business. Please refer to definitions of the non-GAAP measures below and reconciliation to the closest GAAP measure. Reported consolidated statements of operations   Year endedDecember 31,2023   Period fromJuly 28, 2022to December31, 2022     Period fromJanuary 1,2022 toJuly 27, 2022 U.S. Dollars (in thousands) Successor (Waldencast)     Predecessor(Obagi) Net revenue (including related party net revenue of $5,965 and $17,219 in the year ended December 31, 2023 (Successor Period) and the period from July 28, 2022 to December 31, 2022 (Successor Period), respectively) $ 218,138     $ 92,373       $ 73,760   Cost of goods sold (including related party costs of $1,662 and $5,128 in the year ended December 31, 2023 (Successor Period) and the period from July 28, 2022 to December 31, 2022 (Successor Period), respectively)   76,561       60,657         30,868   Gross profit   141,577       31,716         42,892   Selling, general and administrative   220,313       88,926         55,549   Research and development   3,195       1,796         2,606   Loss on impairment of goodwill   —       68,715         —   Total operating expenses   223,508       159,437         58,155   Operating loss   (81,931 )     (127,721 )       (15,263 ) Interest expense, net   18,906       6,230         6,652   Change in fair value of derivative warrant liabilities   10,337       (6,793 )       —   Other expense (income), net   1,769       (798 )       (971 ) Total other expenses (income), net   31,012       (1,361 )       5,681   Loss before income taxes   (112,943 )     (126,360 )       (20,944 ) Income tax (benefit) expense   (6,975 )     (5,803 )       113   Net loss   (105,968 )     (120,557 )       (21,057 ) Net loss attributable to noncontrolling interests   (15,987 )     (24,990 )       —   Net loss attributable to Class A shareholders $ (89,981 )   $ (95,567 )     $ (21,057 ) Net loss per share attributable to Class A shareholders:             Basic and Diluted $ (0.99 )   $ (1.11 )     $ (2.63 ) Shares used in computing net loss per share:             Basic and Diluted   91,158,500       86,460,560         8,000,002                 Net loss $ (105,968 )   $ (120,557 )     $ (21,057 ) Other comprehensive (loss) income — foreign currency translation adjustments, net of tax   (147 )     (36 )       96   Comprehensive loss   (106,115 )     (120,593 )       (20,961 ) Comprehensive loss attributable to noncontrolling interests   (16,012 )     (24,997 )       —   Comprehensive loss attributable to Class A shareholders $ (90,103 )   $ (95,596 )     $ (20,961 ) Financial highlights summary overview     Year endedDecember 31,2023 Period fromJuly 28, 2022toDecember 31,2022 Period fromJanuary 1,2022 to July 27, 2022 Year endedDecember 312022       (SuccessorWaldencast) (SuccessorWaldencast) (Predecessor) Combined Growth % Comparable Net Revenue Group 212,519   75,154   109,162   184,316   15.3 %   Obagi 112,032   43,871   67,944   111,815   0.2 %   Milk 100,487   31,283   41,218   72,501   38.6 %                 Adjusted forObagi China 5,619   17,219   5,816   23,035                   Reported Summary P&L Net Revenue 218,138   92,373   114,978   207,351   5.2 %   Obagi 117,651   61,090   73,760   134,850   (12.8 )%   Milk 100,487   31,283   41,218   72,501   38.6 %   Adj EBITDA 24,395   (16,027 ) 7,263   (8,764 ) 378.4 %   % 11.2 % (17.4 )% 6.3 % (4.2 )%                 Obagi Summary P&L Net Revenue 117,651   61,090   73,760   134,850   (12.8 )%   Adj Gross Profit 83,729   10,690   42,892   53,582   56.3 %   % 71.2 % 17.5 % 58.2 % 39.7 % 79.3 %   Adj EBITDA 20,814   (9,857 ) 95   (9,762 ) 313.2 %   %