Interactive Strength Inc. (Nasdaq: TRNR) Reports Fourth Quarter 2023 Results
- Interactive Strength Inc. (TRNR) reported a net loss of $11.4 million and $0.80 per diluted share for Q4 2023.
- Adjusted EBITDA showed a $5.5 million improvement, with a $3.5 million loss for the quarter.
- The company aims to achieve run-rate Adjusted EBITDA positive by Q4 2024.
- Expense control improvements and revenue expectations from recent acquisitions were highlighted by CEO Trent Ward.
- None.
Insights
The financial results reported by Interactive Strength Inc. indicate a significant reduction in net loss year-over-year, from $18.8 million to $11.4 million. This narrowing of losses, particularly a decrease in loss per diluted share from $27.80 to $0.80, suggests an effective cost management strategy and could be a positive signal to investors about the company's operational efficiency. Moreover, the improvement in Adjusted EBITDA, despite it still being a loss, is noteworthy and reflects a $5.5 million betterment compared to the previous quarter.
The conversion of liabilities into equity is a strategic move that often aims to strengthen the balance sheet and reduce financial leverage. This action can be appealing to investors as it typically leads to a more robust equity position and may reduce interest expenses. However, it's important to consider the potential dilution of existing shareholders' interests due to the increase in the number of shares outstanding.
The acquisition of CLMBR and the subsequent large purchase order from WOODWAY could be a catalyst for future revenue growth. The anticipated positive Adjusted EBITDA by the fourth quarter of 2024 could signal a turnaround, but investors should be cautious and consider the execution risks associated with integrating acquisitions and realizing projected synergies.
Interactive Strength Inc.'s focus on specialty fitness equipment and virtual personal training services places it within a competitive and rapidly evolving market. The fitness industry has seen a significant shift towards home-based and technology-driven solutions, a trend accelerated by the pandemic. The strategic acquisition of CLMBR, a company known for its vertical climbing machines, aligns with the growing consumer demand for innovative and interactive workout options.
The mention of a large purchase order from WOODWAY, a premium treadmill manufacturer, could indicate a strengthening of B2B relationships and an expansion of market reach. It's important to monitor consumer and industry responses to these new product offerings and partnerships, as they will greatly influence the company's market share and growth trajectory.
Investors should also be aware of the competitive landscape, including the presence of established players and emerging startups in the fitness technology space. Market reception to the integrated offerings post-acquisition will be a key factor in assessing the long-term viability of the company's growth strategy.
The conversion of liabilities into equity, as reported by Interactive Strength Inc., can have legal implications, particularly in terms of shareholder rights and corporate governance. It is essential that such conversions are conducted in compliance with securities laws and with transparency to shareholders. This process can affect shareholder voting power and the value of their investment.
Additionally, acquisitions like that of CLMBR involve complex legal processes, including due diligence, regulatory approvals and the harmonization of corporate policies. Ensuring legal compliance throughout these transactions is critical to prevent future litigation or regulatory issues that could impact the company's financials and reputation.
Prospective and current investors should pay attention to the company's disclosures and filings for any material changes that could affect their holdings. It is also advisable to consider the legal expertise and track record of the company's management in navigating such financial restructuring and acquisition processes.
Net Loss and Earnings per Diluted Share of
Adjusted EBITDA was a
The Company confirms it expects to be run-rate Adjusted EBITDA positive as early as the fourth quarter of 2024
AUSTIN, TX, April 01, 2024 (GLOBE NEWSWIRE) -- via NewMediaWire – Interactive Strength Inc. (NASDAQ: TRNR) (the "Company", or “TRNR”), maker of innovative specialty fitness equipment and provider of virtual personal training services, today announced its financial results for the fourth quarter of 2023.
The Company incurred a net loss of
Adjusted EBITDA, a non-GAAP financial measure, was a
CEO Comments
Trent Ward, Co-Founder and CEO of TRNR, said: “The fourth quarter of 2023 showed continued improvement in expense control, with total operating expenses, less the non-cash items of stock-based compensation and depreciation and amortization, of
Mr. Ward continued, “In addition to the completion of the CLMBR acquisition, and the resulting large purchase order from WOODWAY that could result in more than
The Company will announce financial results that also include the CLMBR business on a pro forma basis later this month.
TRNR Investor Contact
ir@interactivestrength.com
TRNR Media Contact
forme@jacktaylorpr.com
About Interactive Strength Inc.
Interactive Strength Inc. produces innovative specialty fitness equipment and digital fitness services under two main brands: 1) CLMBR and 2) FORME. Interactive Strength Inc. is listed on NASDAQ (symbol: TRNR).
CLMBR is a vertical climbing machine that offers an efficient and effective full-body strength and cardio workout. CLMBR's design is compact and easy to move – making it perfect for commercial or in-home use. With its low impact and ergonomic movement, CLMBR is safe for most ages and levels of ability and can be found at gyms and fitness studios, hotels, and physical therapy facilities, as well as available for consumers at home. www.clmbr.com.
FORME is a digital fitness platform that combines premium smart home gyms with live virtual personal training and coaching to deliver an immersive experience and better outcomes for both consumers and trainers. FORME delivers an immersive and dynamic at-home fitness experience through two connected hardware products: 1. The FORME Studio (fitness mirror) and 2. The FORME Studio Lift (fitness mirror and cable-based digital resistance). In addition to the company’s connected fitness hardware products, FORME offers expert personal training and health coaching in different formats and price points through Video On-Demand, Custom Training, and Live 1:1 virtual personal training. www.formelife.com.
Channels for Disclosure of Information
In compliance with disclosure obligations under Regulation FD, we announce material information to the public through a variety of means, including filings with the Securities and Exchange Commission (“SEC”), press releases, company blog posts, public conference calls, and webcasts, as well as via our investor relations website. Any updates to the list of disclosure channels through which we may announce information will be posted on the investor relations page on our website. The inclusion of our website address or the address of any third-party sites in this press release are intended as inactive textual references only.
Non-GAAP Financial Measures
In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance.
The Company's non-GAAP financial measure in this press release consist of Adjusted EBITDA, which we define as net (loss) income, adjusted to exclude: other expense (income), net; income tax expense (benefit); depreciation and amortization expense; stock-based compensation expense; gain on debt extinguishment; vendor settlements; transaction related expenses; and IPO readiness costs and expenses.
The Company believes the above adjusted financial measures help facilitate analysis of operating performance and the operating leverage in our business. We believe that these non-GAAP financial measures are useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons:
- Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, other expense (income), net, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired;
- Our management uses Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and
- Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core operating results, and may also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
Our use of Adjusted EBITDA, or any other non-GAAP financial measures we may use in the future, is presented for supplemental informational purposes only and should not be considered as a substitute for, or in isolation from, our financial results presented in accordance with GAAP. Further, these non-GAAP financial measures have limitations as analytical tools. Some of these limitations are, or may in the future be, as follows:
- Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;
- Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us;
- Adjusted EBITDA does not reflect impairment charges for fixed assets and capitalized content, and gains (losses) on disposals for fixed assets;
- Adjusted EBITDA does not reflect gains associated with debt extinguishments.
- Adjusted EBITDA does not reflect gains associated with vendor settlements.
- Adjusted EBITDA does not reflect IPO readiness costs and expenses that do not qualify as equity issuance costs.
- Adjusted EBITDA does not reflect transaction-related expenses from CLMBR acquisition.
- Adjusted EBITDA does not reflect non-cash fair value gains (losses) on convertible notes, warrants and unrealized currency gains (losses).
- Adjusted EBITDA does not reflect expenses related to the Asset Purchase Agreement and potential acquisition;
Further, the non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. For example, the expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results. Because companies in our industry may calculate such measures differently than we do, their usefulness as comparative measures is limited. Because of these limitations, Adjusted EBITDA should be considered along with other operating and financial performance measures presented in accordance with GAAP.
Cautionary Statement Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. Forward-looking statements include, but are not limited to, statements regarding: the expected or potential impact and benefits thereof (such as the ability to achieve immediate scale across all functions and create a high-growth and profitable platform, and the anticipated impact on FORME's operating results and financial position, including statements regarding internal management projections of the target and the potential transaction, including that, by the fourth quarter of 2024, the combined business is expected to have positive adjusted EBITDA based on identified cost synergies if the gross revenue projections are achieved; the Company’s expectations as to decreasing operating expenses in the fourth quarter and its belief that this will help position the Company to potentially reach profitability toward the end of 2024; the anticipated timing of availability of inventory, statements regarding estimates and forecasts of revenue and other financial and performance metrics and projections of market opportunity and expectations, projections about the number of units of the Company’s products that will be sold, the predictions about when new inventory of the Company’s products will be produced, and the Company's belief that the conversion of liabilities to equity will improve the financial position to achieve financial stability, the utility of non-GAAP financial measures; and the anticipated features and benefits of our product and service offerings. These forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. These risk and uncertainties include, but are not limited to, the following: our ability to achieve or maintain profitability; our future capital needs and ability to obtain additional financing to fund our operations; our ability to continue as a “going concern”; the growth rate, if any, of our business and revenue and our ability to manage any such growth; risks related to our subscription or any future revenue model; our limited operating history; our ability to compete successfully; fluctuations in our operating results and factors affecting the same; our reliance on sales of our Forme Studio equipment; our ability to sustain competitive pricing levels; the growth rate, if any, of our target markets and our industry; the ability of our customers to obtain financing to purchase our products; our ability to forecast demand for our products and services, anticipate consumer preferences, and manage our inventory; our ability to attract and retain members, personal trainers, health coaches, and fitness instructors; our ability to expand our commercial and corporate wellness business; unforeseen costs and potential liability in connection with our products and services; our dependence on third-party systems and services; and risks related to potential acquisitions, intellectual property, litigation, dependence on key personnel, privacy, cybersecurity, and other regulatory, tax, and accounting matters, and international operations (including the impact of any geopolitical risks such as regional unrest or outbreak of hostilities or war), as well as the risks and uncertainties discussed in our most recently filed periodic reports on Form 10-Q and subsequent filings and as detailed from time to time in our SEC filings. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements set forth in this release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this press release. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.
FAQ
What was Interactive Strength Inc.'s net loss for the fourth quarter of 2023?
What was the Adjusted EBITDA for the fourth quarter of 2023?
When does the company aim to achieve run-rate Adjusted EBITDA positive?
What expense control improvements were highlighted by CEO Trent Ward?
What revenue expectations were mentioned from recent acquisitions?
