I have no business relationship with any company whose stock is mentioned in this article. We want to be strategic about when and how much we acquire. 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 This is possibly the best testament to the efficiency of the management capital allocation. More keen followers might have already caught up with the fact that we are dealing with a relatively small $1.1 billion ($1.5 billion at that time) market cap that. Sources: FactSet, Dow Jones, Bonds: Bond quotes are updated in real-time. Prior to joining Franchise Group, Mr. Mattes served in various executive roles within the franchise industry headlined by his roles as the Chief Development Officer for Retro Fitness from January 2013 through June 2019 and as the Vice President of Franchise Development at Saladworks from July 2010 through January 2013. Learn More on Franchise Group's active insiders. The following table summarizes Revenue, Adjusted EBITDA, and Net Income/(Loss) for each of these segments. Brian is almost fully committed to the company in terms of his personal wealth, and represents the definition of the phrase "walking the walk". rapidly degrading macroeconomic environment began taking its toll on some of the franchises with the most vulnerable business models, which ultimately translated itself into the bottom line and led to a disappointing downgrade in guidance. Rating. More keen followers might have already caught up with the fact that we are dealing with a relatively small $1.1 billion ($1.5 billion at that time) market cap that attempted to close down a deal valued at slightly more than five times its equity size. We expect organic growth in 2023 to drive increased EBITDA and cash flow., The Company currently has six reportable segments: American Freight; The Vitamin Shoppe; Pet Supplies Plus; Buddys; Sylvan; and Badcock. The dividend itself has been on a stark rise, as the series of accretive acquisitions and some steady internal organic growth resulted in an attractive payout which is currently annualized at $2.50 per share. Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are financial measures that are not prepared in accordance with GAAP. The addition of Sylvan provides Franchise Groupanother growing franchise concept and further diversification into consumer services. Data may be intentionally delayed pursuant to supplier requirements. 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. Announces Approval of Quarterly Common Stock Dividend. We didn't have an open window because of the Kohl's transaction and then we got into the quiet period. All rights reserved. (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. Management believes the presentation of these measures is useful to investors as supplemental measures in evaluating the aggregate performance of the Companys operating businesses and in comparing its results from period to period because they exclude items that the Company does not believe are reflective of its core or ongoing operating results. We have the expertise, capital and training to catapult franchise brands forward. Brian Kahn, President & CEO of Franchise Groupsaid, We are very excited to welcome the Sylvan management team, employees, franchisees and students to Franchise Group. Mr. Kahn founded and has served as the investment manager of Vintage and its predecessor, Kahn Capital Management, LLC, since 1998. Management defines and calculates Non-GAAP Net Income and Non-GAAP EPS as net income (loss) and net income (loss) per diluted share from continuing operations adjusted for non-core or non-operational items related to executive severance and related costs, stock-based compensation, non-cash executive compensation expense, shareholder litigation costs, prepayment penalties on early debt repayment, non-cash amortization of debt issuance costs, store closures, the Badcock segments in-house financing operations, rebranding costs, acquisition costs, inventory fair value step up amortization, and amortization of acquired intangible assets. Franchise Group on the other hand returns value to shareholders both through a generous dividend policy and a share buy-back program. We already believe that the company is selling at an immensely attractive valuation, but this investment opportunity represents something much more than a mispriced company with the potential of realigning itself towards its intrinsic value. Franchise Group, Inc. (NASDAQ:FRG) shareholders (or potential shareholders) will be happy to see that the President, Brian Kahn, recently bought a In this capacity, Ms. McMillan-McWaters managed the entirety of Liberty Taxs legal affairs including overseeing its corporate, franchise, and public company matters. Prior to joining Liberty Tax, Ms. McMillan-McWaters served as counsel for a global pharmaceutical contract research organization in Cambridge, England where her practice focused on negotiating complex services and clinical trial agreements with investigative sites in Europe. Brian R. Kahn owns about 11,364,610 units of Franchise Group, Inc common stock. A multi-layered approach to creating shareholder value has seen investors enjoy Franchise Group dominating the S&P 500 (SPY) while at the same time showering them with dividends. India FM Jaishankar says Soros dangerous, debate needed on democracy, Buffett's Berkshire profit falls on investments, currencies, Bill Gates buys Heineken stake, despite saying he's 'not a big beer drinker', Elon Musk recruits team to develop OpenAI rival - The Information, Musk donated around $1.95 billion in Tesla shares last year, Hedge fund manager Chris Hohn demands Airbus drop Atos deal - letter, Elon Musk's challenge: Stay ahead of the competition, ISS urges Apple shareholders to vote for CEO Tim Cook, other execs' pay packages, Elon Musk accuses media of racism after newspapers drop 'Dilbert' cartoon, French media billionaire Niel fails with bid for TNT television frequence - Arcom, President, Chief Executive Officer & Director. 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. Reconciliation of Non-GAAP Net Income and EPSBelow are reconciliations of Net Income/(Loss) from continuing operations to Non-GAAP Net Income and Net Income/(Loss) from continuing operations per diluted share to Non-GAAP EPS for the three and twelve months ended December 31, 2022. This leaves a somewhat negative impression when taking a look at the rapid rise in outstanding shares over the past couple of years, as potential investors might fear further dilution. Brian R. Kahn, Chief Executive Officer, The estimated net worth of Brian Randall Kahn is at least $246.52 million as of May 9th, 2022. Given the density of the ownership structure, the initiative would significantly inflate the share price which would degrade its effectiveness. The company was acquired in Q3 of 2021 for $81 million in an all-cash transaction that was financed with available cash. The company is one of the largest home-furnishing retailers in the country with 384 stores mostly operating through the independent dealership model. It operates through the following segments: Vitamin Shoppe, American Freight, Pet Supplies Plus, Badcock, Sylvan and Buddy's. The most recent transaction was a purchase order of 100,000 units , worth The company is being led by an experienced and well-respected value-oriented investor, Brian Kahn. 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. and bought an estimated value of $139.49M worth of shares. Following the completion of the transaction, the chief executive officer now directly owns 8,864,610 shares of the company's stock, valued at $332,422,875. Mr. Laurence was previously a Partner at Coral Reef Capital Partners, a merchant banking firm making control and structured equity investments in U.S. lower-middle market companies and providing strategic mergers and acquisition and capital raising advisory services. Insiders currently own close to a third of the shares outstanding and there has been a very clear historic record of major insider ownership. Sign up to get exclusive industry information delivered to your inbox. 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. Learn More about Brian Randall Kahn's net worth. Trusting the management and their ability to deliver on execution is the most important in this investment thesis. Mr. Kahn owns 8,864,610 shares of Franchise Group stock worth more than $246,524,804 as of March 1st. Mr. Wright holds a Bachelor of Science degree from Washington & Lee University. Brian has 2 jobs listed on their profile. But opting out of some of these cookies may have an effect on your browsing experience. Announces Approval of Quarterly Preferred Dividend, Franchise Group, Inc. In calculating GAAP and Non-GAAP EPS, the Company is currently using an effective tax rate of approximately 25.8%. In Q1 of 2020, the business was fully integrated into American Freight. 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.. Badcock reported $219.2 million in revenue with a loss of $38.6 million, and Buddys recorded $14.5 million in revenue with a net gain of $1.39 million in revenues. Participants should ask to be joined to the Franchise Group Inc. call. It is worth keeping in mind that the distressed economic situation is causing havoc in the retail space, potentially creating multiple acquisition opportunities that management would want to explore. Mutual Funds & ETFs: All of the mutual fund and ETF information contained in this display, with the exception of the current price and price history, was supplied by Lipper, A Refinitiv Company, subject to the following: Copyright Refinitiv. The corporate mailing address for Mr. Kahn and other Franchise Group executives is 2387 LIBERTY WAY, VIRGINIA BEACH VA, 23456. Mr. Kahn has served as the Chief Executive Officer of Franchise Group since October 2, 2019. Mr. Kahn founded and has served as the investment manager of Vintage and its predecessor, Kahn Capital Management, LLC, since 1998. Kahn has served as the Chief Executive Officer of Franchise Group since October 2, 2019. I have no business relationship with any company whose stock is mentioned in this article. The company is being led by an experienced and well-respected value-oriented investor, Brian Kahn. Mr. Seeton has served as the Chief Financial Officer of Franchise Group, Inc. since October 28, 2019. 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. Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Provision for doubtful accounts for accounts receivable, Depreciation, amortization, and impairment charges, Gain on sale-leaseback, bargain purchases, and sales of Company-owned stores, net, Prepayment penalty for early debt extinguishment, Net cash provided (used in) operating activities, Purchases of property, plant, and equipment, Proceeds from sale of property, plant, and equipment, Acquisition of business, net of cash and restricted cash acquired, Divestituture of business, net of cash and restricted cash sold, Issuance of operating loans to franchisees, Payments received on operating loans to franchisees, Net cash provided by (used in) investing activities, Issuance of long-term debt and other obligations, Repayment of long-term debt and other obligations, Principal payments of finance lease obligations, Payment for debt issue costs and prepayment penalty on extinguishment, Cash paid for taxes on exercises/vesting of stock-based compensation, Net cash provided by (used in) financing activities, Effect of exchange rate changes on cash, net, Net increase in cash and cash equivalents and restricted cash, Cash, cash equivalents and restricted cash at beginning of year, Cash, cash equivalents and restricted cash at end of year, Non-cash proceeds from divestiture of Liberty Tax, Deferred financing costs from issuance of common stock, Capital expenditures funded by finance lease liabilities, Tax receivable agreement included in other long-term liabilities, Non-GAAP Financial Measures and Key Metrics. 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. Mr. Kahn brings to the Board extensive management and consumer finance expertise, as well as public company experience. Management has established a long-term dividend policy planning to redirect approximately 25% of EBITDA towards shareholders via dividends in the upcoming years. The most recent insider tranaction occured on February, 23rd when Director Lisa M Fairfax bought 45 shares worth more than $1,423.35. Mr. Kahn graduated cum laude and holds a Bachelor of Arts degree in Economics from Harvard University. Although amortization of acquired intangible assets is excluded from these non-GAAP measures, it is important for investors to understand that such intangible assets support revenue generation. On a journey from law to investing. Revenues up, earnings down for Franchise Group in Q4, Thomas Lester//Retail Editor//February 28, 2023. Learn More on Brian Randall Kahn's trading history. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. Management defines and calculates Adjusted EBITDA as net income (loss) from continuing operations before interest, income taxes, depreciation and amortization adjusted for certain non-core or non-operational items related to executive severance and related costs, stock-based compensation, shareholder litigation costs, corporate governance costs, accrued judgments and settlements, net of estimated revenue, store closures, rebranding costs, acquisition costs, inventory fair value step up amortization and prepayment penalty on early debt repayment. It is mandatory to procure user consent prior to running these cookies on your website. Data are provided 'as is' for informational purposes only and are not intended for trading purposes. The Buyout Offer Might Be Lowered. Mr. Laurence has served as the Executive Vice President of Franchise Group, Inc. since October 2, 2019 and was previously also on its Board of Directors. We finished the year with 259 new territories sold and a backlog across all brands of 482 locations. Learn More on Brian Randall Kahn's contact information. On top of that, the capital used in the said acquisitions is usually outside capital; ultimately meaning capital the company can afford to have a multilayered shareholder return policy with. Company Ownership Structure (TIKR Terminal). They purchased a total of 106,154 shares worth more than $4,003,872.11. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. So I think we'll be opportunistic as we can be. Learn More about insider trades at Franchise Group. Franchise Sales Utah, Idaho & Nevada Lehi, Utah, By clicking Accept, you consent to the use of ALL the cookies. 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. 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. While we maintain a very bullish outlook on the company, as with any investment, the thesis itself carries its fair share of challenges. The company, then facing multiple headwinds and an uncertain future, was acquired by Franchise Group for just $208 million in Q3 2019. This chart shows Brian Randall Kahn's buying and selling at Franchise Group by year and by quarter. 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