So far, so good, said Anthony Geisler, CEO of Xponential Fitness, of his first investor conference call as a publicly traded company, presenting second quarter results last month.
“I think it went really well. Obviously we had talked about the second quarter results in our S-1, the IPO documents, “so it wasn’t entirely a mystery to what came in. But we did get some updates for July to let people know we were having our biggest month in system-wide sales yet, ”said Geisler.
Revenue for July 2021 was $ 63 million, up 103 percent from the next largest month in February 2020.
The company’s IPO, which grossed $ 120 million on July 23, was the second time for Geisler and his team, who stood eight weeks from going public in February 2020, just before COVID-19 and its lockdowns hit the United States .
“We built the company,” he mused. “Now I’ve had the experience of preparing for an IPO twice, before COVID and more recently, and then actually being able to get a company public, which not everyone can say of themselves. I see it as the Super Bowl of business, so we’re very proud to play in this arena. “
Why a public offer instead of a sale to private equity or a strategic investor? “I’ve never got a company public before, so I wanted the experience of going public and building Xponential brand awareness,” he said. “A lot of people know our brands – Pure Barre, CycleBar, Rumble or whoever it is, but they don’t know that Xponential exists. It was a coming-out for Xponential. “
In the area of mergers and acquisitions, the IPO “put us in the spotlight. We have a lot more brands reaching out to us and wanting to partner with us, ”he said. Xponential Fitness owns nine boutique fitness brands; His next goals will be brands that offer HIIT, or high-intensity interval training, and functional training.
The last 15 months have been monumental for Xponential. “We were eight weeks away from going public. So your team is armed, bankers armed, ”and then lockdowns for the pandemic meant 1,500 locations were closed. “And then open 1,850 locations again. In the end you close, open 20 percent more, don’t lose any business and then prepare the company again for the IPO, which the company did in a period of 15 months, ”he said.
“It’s wonderful. It speaks for a couple of things: the resilience of our franchisee base and the franchisees we partnered with. We only accept two percent of our applicants. So they have very good operators out there,” he said and pondered a call he had in the early days of the shutdown, “I had this conversation on a global franchise call and said, ‘We have two options. We shut down … or we find the storm is big , but our ship is bigger. ‘”
Financial highlights compared to Q2 2021 with Q2 2020 discussed on the conference call: Revenue up 67 percent to $ 35.8 million; System-wide revenue growth 179 percent to $ 171.6 million; recorded a net loss of $ 8 million versus a loss of $ 4.8 million; reported EBITDA or cash flow of $ 8.3 million compared to minus $ 3.1 million.
Geisler said the larger net loss was due to interest and other expenses related to the IPO the company made in the second quarter.
Operational highlights included: opening 59 new studios in the second quarter and reporting nearly 100 percent of the 1,824 North American studios opened and operational during the quarter. Xponential sold 197 North American franchise licenses in the second quarter of 2021 compared to 46 in the second quarter of 2020. It increased the total number of North American studios to 1,824 as of June 30, 2021, compared to 1,765 studios as of March 31, 2021.
XPOF traded for $ 10.80 per share on August 31, up from its debut of $ 11.20 per share in July. The list price of $ 12 per share was below the expected range of $ 14-16 per share. Xponential reduced the size of its offering from an initial target of 13.3 million shares to 10 million shares.
Was the downsizing a problem? “No, not at all. It just kept me from making money on the IPO. I didn’t have to sell any for $ 12. I wasn’t really concerned about where the stock was on the day it went public. I’m really focused on what it was.” Share will be worth in two or three years, ”said Geisler, who is still the company’s largest shareholder.
“I am 45 years old. I’ve had a few other successful deals so I really want to build this business and build a legacy and build a huge company. “
In this January 2020 Franchise Times cover story, read about Geisler’s approach to building Xponential Fitness and its first brand, Club Pilates.