Snap One Reports Fiscal Third Quarter 2023 Results

Rhea-AI Summary

Snap One Holdings Corp. (SNPO) Reports Resilient Performance and Industry Leadership in Third Quarter 2023

Positive

• The company reported solid financial results despite a decrease in net sales, with adjusted EBITDA increasing by 3.7% and a significant improvement in free cash flow.
• Snap One extended its industry leadership through multiple recognitions at the 2023 CEDIA Expo and expanded its omni-channel presence with the opening of two new local branches.
• The company's enhanced liquidity position and focus on increasing profitability while investing prudently for growth reflect a positive outlook for the future.

Negative

• Net sales decreased by 3.9% to $270.1 million from $281.2 million in the comparable year-ago period, and adjusted net income decreased to $11.3 million from $14.9 million in the comparable year-ago period.

Third Quarter Highlighted by Industry Leadership and Resilient Performance

CHARLOTTE, N.C., Nov. 07, 2023 (GLOBE NEWSWIRE) -- Snap One Holdings Corp. (Nasdaq: SNPO) (“Snap One,” the “Company,” “we,” or “our”), a provider of smart living products, services, and software to professional integrators, reported financial results for the fiscal third quarter ended September 29, 2023.

Fiscal Third Quarter 2023 and Recent Operational Highlights

• Extended industry leadership position through numerous recognitions at the 2023 CEDIA Expo
  • CEDIA Best New Hardware award for the Luma X20 family of video surveillance solutions, reflecting expanded use cases across residential and commercial applications
  • Residential Tech Today Innovation award for the Control4 single room bundle and Triad passive soundbars, highlighting continued product innovation
  • CEDIA Hall of Fame award for OvrC and Control4 OS2, recognizing the Snap One software platforms that have shaped the industry
• Expanded omni-channel presence with the opening of two new local branches in Raleigh, NC and Chantilly, VA, bringing the total number of North American branches to 43 at quarter end
• Delivered further Control4 software enhancements including voice control integration with leading services such as Apple TV and Xfinity via the new Halo Touch remote control
• Converged U.S. e-commerce portals to provide a unified partner experience while further integrating company operations
  
  

Management Commentary
“We closed the third quarter with momentum following an impressive showing at the 2023 CEDIA Expo that reinforced our leadership position in the smart living industry,” said Snap One CEO John Heyman. “In partnership with our integrators, we’re delivering innovation in our products, solutions, and service models that we believe are enhancing integrator operational efficiency and improving consumer satisfaction with the experiences our partners deliver. We continue to believe that an aligned partnership between manufacturer, integrator, and end consumer is the key to unlocking the full potential of the smart living opportunity.”

“Reflecting on our financial performance, our team delivered solid results in the third quarter. Despite continued channel inventory destocking headwinds and macro uncertainty, we believe our integrators are continuing to see stable demand drivers and, in turn, are choosing our solutions, highlighting the resiliency of our business model and success of our new products. Further, we drove key margin enhancement initiatives, which allowed us to deliver improved profitability in the quarter on a year-over-year basis. We also continued to execute our plan to right-size inventory levels, enabling us to fully repay our revolving credit facility and to strengthen our liquidity position as we plan for 2024 and beyond.”

Fiscal Third Quarter 2023 Financial Results
Results compare 2023 fiscal third quarter end (September 29, 2023) to 2022 fiscal third quarter end (September 30, 2022) unless otherwise indicated. The Company’s fiscal third quarter in both years reflects a 13-week period. Results are presented on an as-reported basis, unless otherwise indicated.

• Net sales decreased 3.9% to $270.1 million from $281.2 million in the comparable year-ago period.
• Selling, general and administrative (SG&A) expenses decreased 6.0% to $84.0 million (31.1% of net sales) from $89.4 million (31.8% of net sales) in the comparable year-ago period.
• Net loss decreased to $0.9 million (-0.3% of net sales) compared to net loss of $1.0 million (-0.4% of net sales) in the comparable year-ago period.
• Contribution margin, a non-GAAP measurement of operating performance reconciled below, decreased 0.2% to $113.6 million (42.0% of net sales) from $113.8 million (40.5% of net sales) in the comparable year-ago period.
• Adjusted EBITDA, a non-GAAP measurement of operating performance reconciled below, increased 3.7% to $33.0 million (12.2% of net sales) compared to $31.9 million (11.3% of net sales) in the comparable year-ago period.
• Adjusted net income, a non-GAAP measurement of operating performance reconciled below, decreased to $11.3 million (4.2% of net sales) from $14.9 million (5.3% of net sales) in the comparable year-ago period.
• Net cash provided by operating activities totaled $65.7 million in the nine-month period ended September 29, 2023, compared to net cash used in operating activities of $15.4 million in the comparable year-ago period.
• As of September 29, 2023, cash and cash equivalents were $40.0 million, compared to $21.1 million at the end of fiscal year 2022.
• Free cash flow, a non-GAAP measurement of operating performance reconciled below, totaled $45.7 million in the nine-month period ended September 29, 2023, compared to $(25.4) million in the comparable year-ago period.
  
  

Stock Repurchase Program
On May 12, 2022, Snap One announced that its Board of Directors had approved a stock repurchase program that authorized potential repurchases of up to $25 million of its common stock from the date of approval through the end of 2023. On November 6, 2023, the Company’s Board of Directors amended the stock repurchase program to extend its expiration date to December 31, 2024. Under the repurchase program, the Company may purchase shares of common stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans or through the use of other techniques such as tender offers or accelerated share repurchases. Snap One expects to fund the repurchase with its existing cash balance and cash generated from operations.

As of September 29, 2023, the Company had repurchased 296,467 shares of its common stock through this program for an aggregate amount of $3.1 million.

Fiscal 2023 Financial Outlook
“Heading into the end of the year, we are continuing to maintain our focus on increasing profitability while investing prudently for growth,” Heyman continued. “Our enhanced liquidity position underscores this commitment and provides us additional flexibility to operate the business in response to the dynamic macroeconomic environment.”

“We are narrowing the range of our outlook for both net sales and adjusted EBITDA for 2023. We now expect net sales in the fiscal year ending December 29, 2023 to range between $1.06 billion and $1.07 billion and adjusted EBITDA¹ to range between $110 million and $116 million. This outlook considers our performance through the first nine months of 2023 as well as our expectation that an inherent level of market uncertainty will continue for the foreseeable future. We continue to believe in the long-term secular growth of the smart living opportunity.”

Supplemental Earnings Presentation
The Company has posted a supplemental earnings presentation accompanying its fiscal third quarter 2023 results to the Events & Presentations section of its Investor Relations website, which can be found at investors.snapone.com.

Conference Call
Snap One management will hold a conference call today, November 7, 2023 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these results.

Company CEO John Heyman and CFO Mike Carlet will host the call, followed by a question-and-answer period.

Registration Link: Click here to register

Please register online at least 10 minutes prior to the start time. If you have any difficulty with registration or connecting to the conference call, please contact Gateway Group at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Snap One's website.

About Snap One
As a leading distributor of smart living technology, Snap One empowers its vast network of professional integrators to deliver entertainment, connectivity, automation, and security solutions to residential and commercial end users worldwide. Snap One distributes an expansive portfolio of proprietary and third-party products through its intuitive online portal and local branch network, blending the benefits of e-commerce with the convenience of same-day pickup. The Company provides software, award-winning support, and digital workflow tools to help its integrator partners build thriving and profitable businesses. Additional information about Snap One can be found at snapone.com.

Snap One intends to use its website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of the Snap One website at investors.snapone.com. Accordingly, investors should monitor such portion of the website, in addition to following the Company’s press releases, Securities and Exchange Commission (“SEC”) filings and public conference calls and webcasts.

Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures, including contribution margin, adjusted EBITDA, adjusted net income, and free cash flow. A non-GAAP financial measure is generally defined as a numerical measure of a company’s financial or operating performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP. We use the following non-GAAP measures to help us monitor the performance of our business, identify trends affecting our business and assist us in making strategic decisions:

Contribution margin, which is defined as net sales less cost of sales, exclusive of depreciation and amortization, divided by net sales.

Adjusted EBITDA, which is defined as net loss, plus interest expense, income tax benefit, depreciation and amortization, other income, net further adjusted to exclude equity-based compensation, acquisition- and integration-related costs and certain other non-recurring, non-core, infrequent or unusual charges as set forth in the reconciliation in this section below.

Adjusted net income, which is defined as net loss plus amortization further adjusted to exclude equity-based compensation, acquisition- and integration-related costs, (income) expense related to interest rate cap and certain non-recurring, non-core, infrequent or unusual charges, including the estimated tax impacts of these adjustments as set forth in the reconciliation in this section below.

Free cash flow, which is defined as net cash (used in) provided by operating activities less capital expenditures (which consist of purchases of property and equipment as well as purchases of information technology, software development and leasehold improvements).

Contribution margin, adjusted EBITDA, adjusted net income and free cash flow are key measures used by management to understand and evaluate our financial performance, trends and generate future operating plans, make strategic decisions regarding the allocation of capital, and analyze investments in initiatives that are focused on cultivating new markets for our products and services. We believe contribution margin, adjusted EBITDA, adjusted net income and free cash flow are useful measurements for analysts, investors, and other interested parties to evaluate companies in our markets as they help identify underlying trends that could otherwise be masked by certain expenses that we do not consider indicative of our ongoing performance.

Contribution margin, adjusted EBITDA, adjusted net income and free cash flow have limitations as analytical tools. These measures are not calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, contribution margin, adjusted EBITDA, adjusted net income and free cash flow may not be comparable to similarly titled metrics of other companies due to differences among the methods of calculation.

Cautionary Statements Concerning Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended, which reflect our current views with respect to, among other things, our operations, earnings and financial performance, including our guidance for 2023, and our stock repurchase plans. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “project,” “forecast,” “targets,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We believe these factors include but are not limited to the risks related to our business and industry, risks related to our products, risks related to our manufacturing and supply chain, risks related to our distribution channels, risks related to laws and regulations, risks related to cybersecurity and privacy, risks related to intellectual property, risks related to our international operations, risks related to our indebtedness, risks related to interest rate and exchange rate volatility, risks related to our financial statements, risks related to our common stock, and other risks as described under the section entitled “Risk Factors” in our latest Annual Report on Form 10-K filed with the SEC, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other periodic filings. The forward-looking statements speak only as of the date of this report, and, except as required by law, we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Contacts

Media:

Danielle Karr
Director, Public Relations & Events
Danielle.Karr@SnapOne.com

Investors:

Tom Colton and Matt Glover
Gateway Group
949-574-3860
IR@SnapOne.com

-Financial Tables to Follow-

Snap One Holdings Corp. and Subsidiaries Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share amounts)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
Net sales	$	270,144			$	281,234			$	796,591			$	855,573
Costs and expenses:
Cost of sales, exclusive of depreciation and amortization		156,580				167,435				459,610				520,162
Selling, general and administrative expenses		84,037				89,379				271,627				271,300
Depreciation and amortization		15,371				14,812				45,967				44,667
Total costs and expenses		255,988				271,626				777,204				836,129
Income from operations		14,156				9,608				19,387				19,444
Other expenses (income):
Interest expense		14,893				10,244				43,730				24,687
Other expense (income), net		511				620				(652	)			137
Total other expenses		15,404				10,864				43,078				24,824
Loss before income taxes		(1,248	)			(1,256	)			(23,691	)			(5,380	)
Income tax benefit		(348	)			(238	)			(8,119	)			(762	)
Net loss		(900	)			(1,018	)			(15,572	)			(4,618	)
Net loss attributable to noncontrolling interest		—				(8	)			—				(45	)
Net loss attributable to Company	$	(900	)		$	(1,010	)		$	(15,572	)		$	(4,573	)
Net loss per share, basic and diluted	$	(0.01	)		$	(0.01	)		$	(0.21	)		$	(0.06	)
Weighted average shares outstanding, basic and diluted		75,854				74,650				75,577				74,567

Snap One Holdings Corp. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited, in thousands, except par value)
	As of
	September 29, 2023				December 30, 2022
Assets
Current assets:
Cash and cash equivalents	$	40,030			$	21,117
Accounts receivable, net		53,849				48,174
Inventories		275,469				314,588
Prepaid expenses		20,349				22,913
Other current assets		2,712				5,930
Total current assets		392,409				412,722
Long-term assets:
Property and equipment, net		45,725				34,958
Goodwill		592,214				592,186
Other intangible assets, net		517,146				554,419
Operating lease right-of-use assets		53,578				54,041
Other assets		8,163				4,195
Total assets	$	1,609,235			$	1,652,521
Liabilities and stockholders’ equity
Current liabilities:
Current maturities of long-term debt	$	5,200			$	5,063
Accounts payable		66,602				77,443
Accrued liabilities		66,274				64,605
Current operating lease liability		11,071				10,574
Current tax receivable agreement liability		21,107				10,191
Total current liabilities		170,254				167,876
Long-term liabilities:
Revolving credit facility, net		—				10,800
Long-term debt, net of current portion		494,884				496,795
Deferred income tax liabilities, net		32,045				43,515
Operating lease liability, net of current portion		54,085				50,896
Tax receivable agreement liability, net of current portion		80,929				101,262
Other liabilities		19,284				24,206
Total liabilities		851,481				895,350
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.01 par value, 500,000 shares authorized; 75,758 shares issued and outstanding as of September 29, 2023 and 75,042 shares issued and outstanding at December 30, 2022		758				750
Preferred stock, $0.01 par value; 50,000 shares authorized, no shares issued and outstanding		—				—
Additional paid-in capital		865,453				848,703
Accumulated deficit		(103,618	)			(88,046	)
Accumulated other comprehensive loss		(4,839	)			(4,236	)
Total stockholders’ equity		757,754				757,171
Total liabilities and stockholders’ equity	$	1,609,235			$	1,652,521

Snap One Holdings Corp. and Subsidiaries Condensed Consolidated Statements of Cash Flows (unaudited, in thousands)
	Nine Months Ended
	September 29, 2023				September 30, 2022
Cash flows from operating activities:
Net loss	$	(15,572	)		$	(4,618	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		45,967				44,667
Amortization of debt issuance costs		2,354				1,388
Deferred income taxes		(11,592	)			(6,169	)
Equity-based compensation		17,544				17,937
Non-cash operating lease expense		8,250				9,859
Bad debt expense		902				532
Unrealized gain on interest rate cap		(813	)			—
Fair value adjustment to contingent value rights		300				(6,200	)
Valuation adjustment to TRA liability		775				86
Provision for credit losses on notes receivable		—				5,872
Other, net		(135	)			81
Change in operating assets and liabilities:
Accounts receivable		(6,482	)			2,117
Inventories		38,413				(85,134	)
Prepaid expenses and other assets		1,994				3,286
Accounts payable, accrued liabilities and operating lease liabilities		(16,197	)			935
Net cash provided by (used in) operating activities		65,708				(15,361	)
Cash flows from investing activities:
Acquisition of business, net of cash acquired		—				(30,539	)
Purchases of property and equipment		(19,988	)			(10,024	)
Issuance of notes receivable		—				(600	)
Other, net		51				75
Net cash used in investing activities		(19,937	)			(41,088	)
Cash flows from financing activities:
Payments on long-term debt		(3,900	)			(2,325	)
Proceeds from revolving credit facility		38,000				57,000
Payments on revolving credit facility		(50,000	)			—
Proceeds from interest rate cap		539				—
Repurchase and retirement of common stock		(293	)			(2,410	)
Proceeds from employee stock purchase plan		1,228				—
Payment of tax withholding obligation on settlement of equity awards		(1,380	)			—
Payments of tax receivable agreement		(10,191	)			—
Payments of contingent consideration		(250	)			—
Net cash (used in) provided by financing activities		(26,247	)			52,265
Effect of exchange rate changes on cash and cash equivalents		(611	)			(850	)
Net increase (decrease) in cash and cash equivalents		18,913				(5,034	)
Cash and cash equivalents at beginning of the period		21,117				40,577
Cash and cash equivalents at end of the period	$	40,030			$	35,543
Supplementary cash flow information:
Cash paid for interest	$	42,295			$	14,904
Cash paid for taxes, net	$	6,014			$	4,943
Noncash investing and financing activities:
Capital expenditure in accounts payable	$	218			$	613

Snap One Holdings Corp. and Subsidiaries Reconciliation of Net Loss to Adjusted EBITDA (unaudited, in thousands)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
	(in thousands)
Net loss	$	(900	)		$	(1,018	)		$	(15,572	)		$	(4,618	)
Interest expense		14,893				10,244				43,730				24,687
Income tax benefit		(348	)			(238	)			(8,119	)			(762	)
Depreciation and amortization		15,371				14,812				45,967				44,667
Other expense (income), net		511				620				(652	)			137
Equity-based compensation		4,261				5,570				17,544				17,937
Compensation expense for payouts in lieu of TRA participation(a)		205				279				438				837
IT system transition costs(b)		11				268				219				268
Fair value adjustment to contingent value rights(c)		(1,700	)			(125	)			300				(6,200	)
Severance cost(d)		—				—				1,276				—
Deferred acquisition payments(e)		—				(23	)			133				1,007
Acquisition and integration related costs(f)		—				284				—				562
Provision for credit losses on notes receivable(g)		—				—				—				5,872
Deferred revenue purchase accounting adjustment(h)		—				14				—				164
Other professional services costs(i)		301				610				467				1,823
Other(j)		436				578				1,638				765
Adjusted EBITDA	$	33,041			$	31,875			$	87,369			$	87,146

Snap One Holdings Corp. and Subsidiaries Reconciliation of Net Loss to Adjusted Net Income (unaudited, in thousands)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
	(in thousands)
Net loss	$	(900	)		$	(1,018	)		$	(15,572	)		$	(4,618	)
Amortization		12,439				12,536				37,316				37,794
Equity-based compensation		4,261				5,570				17,544				17,937
Foreign currency losses		101				137				17				124
Unrealized losses (gains) on interest rate cap		313				—				(813	)			—
Compensation expense for payouts in lieu of TRA participation(a)		205				279				438				837
IT system transition costs(b)		11				268				219				268
Fair value adjustment to contingent value rights(c)		(1,700	)			(125	)			300				(6,200	)
Severance cost(d)		—				—				1,276				—
Deferred acquisition payments(e)		—				(23	)			133				1,007
Acquisition and integration related costs(f)		—				284				—				562
Provision for credit losses on notes receivable(g)		—				—				—				5,872
Deferred revenue purchase accounting adjustment(h)		—				14				—				164
Other professional services costs(i)		301				610				467				1,823
Other(j)		441				976				1,547				1,028
Income tax effect of adjustments(k)		(4,167	)			(4,619	)			(13,857	)			(14,492	)
Adjusted Net Income	$	11,305			$	14,889			$	29,015			$	42,106

(a) Represents expense, net of forfeitures, related to payments to certain pre-IPO owners in lieu of their participation in the Tax Receivable Agreement entered into on July 29, 2021 (“TRA”). Management does not believe such costs are indicative of our ongoing operations as they are one-time awards specific to the establishment of the TRA.

(b) Represents costs associated with the implementation of enterprise resource planning systems, customer resource management systems, and business intelligence systems as part of our initiative to modernize our information technology (“IT”) infrastructure.

(c) Represents noncash gains and losses recorded from fair value adjustments related to contingent value right (“CVR”) liabilities. Fair value adjustments related to CVR liabilities represent potential obligations to the prior sellers in conjunction with the acquisition of the Company by investment funds managed by Hellman & Friedman, LLC (“H&F”) in August 2017.

(d) Severance cost associated with various restructuring actions such as warehouse relocation, departmental reorganization and focused reduction in workforce.

(e) Represents expenses incurred related to deferred payments to employees associated with historical acquisitions. The deferred payments are cash retention awards for key personnel from the acquired companies and are expected to be paid to employees through 2023. Management does not believe such costs are indicative of our ongoing operations as they are one-time awards specific to acquisitions and are incremental to our typical compensation costs incurred and we do not expect such costs to be reflective of future increases in base compensation expense.

(f)   Represents costs directly associated with acquisitions and acquisition-related integration activities. These costs also include certain restructuring costs (e.g., severance) and other third-party transaction advisory fees associated with planned and completed acquisitions.

(g) Represents provision for credit losses on notes receivable related to the Company’s unsecured loan to Clare.

(h) Represents an adjustment related to the fair value of deferred revenue related to the Control4 Corporation acquisition.

(i) Represents professional service fees associated with the preparation for compliance with the Sarbanes-Oxley Act (“SOX”), the implementation of new accounting standards and accounting for non-recurring transactions.

(j) Represents non-recurring expenses related to consulting, restructuring, and other expenses which management believes are not representative of our operating performance.

(k) Represents the tax impacts with respect to each adjustment noted above after taking into account the impact of permanent differences using the statutory tax rate related to the applicable federal and foreign jurisdictions and the blended state tax rate.

Snap One Holdings Corp. and Subsidiaries Contribution Margin (unaudited, in thousands)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
	(in thousands)
Net sales	$	270,144			$	281,234			$	796,591			$	855,573
Cost of sales, exclusive of depreciation and amortization(a)		156,580				167,435				459,610				520,162
Net sales less cost of sales, exclusive of depreciation and amortization	$	113,564			$	113,799			$	336,981			$	335,411
Contribution Margin		42.0	%			40.5	%			42.3	%			39.2	%

(a) Cost of sales for the three months ended September 29, 2023 and September 30, 2022 excludes depreciation and amortization of $15.4 million and $14.8 million, respectively. Cost of sales for the nine months ended September 29, 2023 and September 30, 2022 excludes depreciation and amortization of $46.0 million and $44.7 million, respectively.

Snap One Holdings Corp. and Subsidiaries Free Cash Flow (unaudited, in thousands)
	Nine Months Ended
	September 29,				September 30,
		2023				2022
	(in thousands)
Net cash provided by (used in) operating activities	$	65,708			$	(15,361	)
Purchases of property and equipment		(19,988	)			(10,024	)
Free Cash Flow	$	45,720			$	(25,385	)

Snap One Holdings Corp. and Subsidiaries Revenue by Geography (unaudited, in thousands)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
Domestic integrators(a)	$	226,021			$	230,173			$	666,307			$	694,254
Domestic other(b)		9,962				14,940				30,389				46,107
International(c)		34,161				36,121				99,895				115,212
Total	$	270,144			$	281,234			$	796,591			$	855,573

(a) Domestic integrators is defined as professional “do-it-for-me” integrator customers who transact with Snap One through a traditional integrator channel in the United States, excluding the impact of revenue earned by the Company’s Access Networks enterprise grade network solution business.
(b) Domestic other is defined as Access Networks revenue and revenue generated through managed transactions with non-integrator customers, such as national accounts.
(c) International consists of all integrators and distributors who transact with Snap One outside of the United States.

Snap One Holdings Corp. and Subsidiaries Revenue by Product Type (unaudited, in thousands)
	Three Months Ended								Nine Months Ended
	September 29,				September 30,				September 29,				September 30,
		2023				2022				2023				2022
Proprietary products(a)	$	176,172			$	192,172			$	531,372			$	588,165
Third-party products(b)		93,972				89,062				265,219				267,408
Total	$	270,144			$	281,234			$	796,591			$	855,573

(a) Proprietary products consist of products and services internally developed by or for Snap One and sold under one of Snap One’s proprietary brands.
(b) Third-party products consist of products that Snap One distributes but for which Snap One does not own the associated product brands.

---

¹ We have not reconciled the forward-looking adjusted EBITDA guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction-related expenses, and certain value measurements, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

 

FAQ

What are Snap One's financial results for the fiscal third quarter ended September 29, 2023?

Net sales decreased by 3.9% to $270.1 million, SG&A expenses decreased by 6.0% to $84.0 million, net loss decreased to $0.9 million, and adjusted EBITDA increased by 3.7% to $33.0 million.

What are Snap One's fiscal 2023 financial outlook?

The company expects net sales to range between $1.06 billion and $1.07 billion and adjusted EBITDA to range between $110 million and $116 million.

What is Snap One's stock repurchase program?

The Board of Directors amended the stock repurchase program to extend its expiration date to December 31, 2024, and the company had repurchased 296,467 shares of its common stock through this program for an aggregate amount of $3.1 million as of September 29, 2023.

Where can the supplemental earnings presentation and conference call information be found?

The supplemental earnings presentation is available in the Events & Presentations section of the Investor Relations website, and the conference call registration link and replay options are available via the Investor Relations section of Snap One's website.