0001528930 false 0001528930 2022-08-04 2022-08-04 0001528930 FRG:CommonStockParValue0.01PerShareMember 2022-08-04 2022-08-04 0001528930 FRG:Sec7.50SeriesCumulativePerpetualPreferredStockParValue0.01PerShareAndLiquidationPreferenceOf25.00PerShareMember 2022-08-04 2022-08-04 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K 

  

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  August 4, 2022

  

Franchise Group, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 001-35588 27-3561876
(State or Other Jurisdiction of
Incorporation)
(Commission File Number) (I.R.S. Employer Identification No.)

 

109 Innovation Court, Suite J

Delaware, Ohio 43015

(Address of Principal Executive Offices) (Zip Code)

 

(740) 363-2222

(Registrant's telephone number, including area code)

 

n/a

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Common Stock, par value $0.01 per share   FRG   Nasdaq Global Market
         
7.50% Series A Cumulative Perpetual Preferred Stock, par value $0.01 per share and liquidation preference of $25.00 per share   FRGAP   Nasdaq Global Market

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

Item 2.02.Results of Operations and Financial Condition.

 

On August 4, 2022, Franchise Group, Inc. (the “Company”) issued a press release regarding its financial results for the second quarter ended June 25, 2022.  A copy of the release is being furnished as Exhibit 99.1 hereto and incorporated herein by reference.  In addition, on August 4, 2022 at 4:30 p.m. Eastern Time, the Company will hold a teleconference for analysts, institutional investors and stockholders to discuss results for the second quarter of the fiscal year ending December 31, 2022.

 

The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished to the Securities and Exchange Commission (the “SEC”) pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01.Financial Statements and Exhibits.

 

(d) Exhibits

 

99.1Press Release dated August 4, 2022.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

FRANCHISE GROUP, INC.

     
Date: August 4, 2022 By: /s/ Eric Seeton
    Eric Seeton
    Chief Financial Officer

 

 

EdgarFiling

EXHIBIT 99.1

Franchise Group, Inc. Announces Fiscal 2022 Second Quarter Financial Results

DELAWARE, Ohio, Aug. 04, 2022 (GLOBE NEWSWIRE) -- Franchise Group, Inc. (NASDAQ: FRG) (“Franchise Group,” “FRG” or the “Company”) today announced the financial results of its fiscal 2022 second quarter. For the second quarter of fiscal 2022, total reported revenue for Franchise Group was $1.1 billion, net income from continuing operations was $41.0 million or $0.94 per fully diluted share, Adjusted EBITDA was $103.4 million and Non-GAAP EPS was $1.19 per share.    On June 25, 2022, total cash on hand was approximately $95.0 million and outstanding term debt was approximately $1.1 billion.  

“Core to FRG is an intentional model of operational and end market diversification that is serving us well during the recent supply and demand turbulence. Accelerating franchising and continued profitable growth in pet, health & wellness, and education services are countering reduced top and bottom-line performance in our home furnishings businesses. Currently, we are seeing signs that inflation is cresting and even reversing in the areas of freight and home furnishing product costs. We believe that market forces will continue to shift in our favor over the balance of the year and begin to restore our home furnishings unit volumes and profit margins to historical levels next year,” stated Brian Kahn, Franchise Group’s President and CEO.

The Company has six reportable segments: American Freight; The Vitamin Shoppe; Pet Supplies Plus; Buddy’s; Sylvan; and Badcock. The following table summarizes Revenue, Adjusted EBITDA, and Net Income/(Loss) for each of these segments.   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.”

  For the Three Months Ended
 For the Six Months Ended
  June 25, 2022
 June 25, 2022
    Adjusted
 Net
   Adjusted
 Net
  Revenue EBITDA
 Income/(Loss)
 Revenue EBITDA
 Income/(Loss)
  (In thousands)
 (In thousands)
American Freight $        226,428 $           7,443  $           2,236  $        467,843 $          23,325  $              803 
Vitamin Shoppe 306,897 38,414  18,332  617,851 78,908  39,737 
Pet Supplies Plus 302,733 27,244  11,298  603,946 51,465  19,423 
Buddy's 14,129 4,093  1,883  29,713 9,328  4,448 
Sylvan Learning 11,512 3,887  408  21,556 6,715  574 
Badcock 233,299 26,163  14,422  489,558 52,273  11,563 
Corporate - (3,825) (7,596) - (6,255) (23,247)
Total $     1,094,998 $        103,418  $          40,983  $     2,230,467 $        215,759  $          53,301 
                 

Outlook

Franchise Group is updating its previously announced financial outlook for fiscal year 2022 to revenue of approximately $4.3 billion from $4.45 billion, Adjusted EBITDA to approximately $390 million from $450 million and Non-GAAP EPS to approximately $4.00 per share from $5.00 per share. In calculating EPS, the Company is using approximately 41.0 million weighted average shares outstanding. Non-GAAP EPS is calculated by adding the tax effected impact of adjustments to EBITDA to net income on a per share basis. In calculating GAAP and Non-GAAP EPS, the Company is currently using an effective tax rate of approximately 27%.

The Company does not provide a quantitative reconciliation of forward-looking, Non-GAAP financial measures such as forecasted Adjusted EBITDA or Non-GAAP EPS to the most directly comparable GAAP financial measures because it is difficult to reliably predict or estimate the relevant components without unreasonable effort due to future uncertainties that may potentially have significant impact on such calculations, and providing them may imply a degree of precision that would be confusing or potentially misleading. Estimates exclude potential acquisitions, divestitures or refranchising activities. See “Non-GAAP Financial Measures and Key Metrics.”

Conference Call Information

Franchise Group will conduct a conference call on August 4th at 4:30 P.M. ET to discuss its business, review financial results for its fiscal 2022 first and discuss its outlook for the balance of fiscal year 2022. A real-time webcast of the conference call will be available on the Events page of Franchise Group’s website at www.franchisegrp.com. Dial in access is also accessible through the link on the website. Please register 5-10 minutes prior to the scheduled start time.

About Franchise Group, Inc.
Franchise Group is an owner and operator of franchised and franchisable businesses that continually looks to grow its portfolio of brands while utilizing its operating and capital allocation philosophy to generate strong cash flow for its shareholders. Franchise Group’s business lines include Pet Supplies Plus, American Freight, The Vitamin Shoppe, Badcock Home Furniture & more, Buddy’s Home Furnishings and Sylvan Learning. On a combined basis, Franchise Group currently operates over 3,000 locations predominantly located in the U.S. that are either Company-run or operated pursuant to franchising and dealer agreements.

FRANCHISE GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets 
     
(In thousands, except share count and per share data) June 25, 2022 December 25, 2021
Assets (Unaudited) (Unaudited)
Current assets:    
Cash and cash equivalents $95,038 $292,714
Current receivables, net 178,687 118,698
Current securitized receivables, net 322,028 369,567
Inventories, net 825,393 673,170
Current assets held for sale 27,999 -
Other current assets 26,389 24,063
Total current assets 1,475,534 1,478,212
Property, plant, and equipment, net 226,771 449,886
Non-current receivables, net 10,402 11,755
Non-current securitized receivables, net 40,820 47,252
Goodwill 806,653 806,536
Intangible assets, net 122,347 127,951
Tradenames 222,703 222,687
Operating lease right-of-use assets 866,226 714,741
Investment in equity securities 24,394 35,249
Other non-current assets 19,151 18,902
Total assets $3,815,001 $3,913,171
Liabilities and Stockholders' Equity    
Current liabilities:    
Current installments of long-term obligations $322,363 $486,170
Current operating lease liabilities 178,278 173,101
Accounts payable and accrued expenses 425,728 410,552
Other current liabilities 41,671 50,833
Total current liabilities 968,040 1,120,656
Long-term obligations, excluding current installments 1,281,530 1,383,725
Non-current operating lease liabilities 701,185 557,071
Other non-current liabilities 95,392 88,888
Total liabilities 3,046,147 3,150,340
     
Stockholders' equity:    
Common stock, $0.01 par value per share, 180,000,000 shares authorized, 40,358,754 and
 40,296,688 shares issued and outstanding at June 25, 2022 and December 25, 2021,
 respectively.
                          404                          403
Preferred stock, $0.01 par value per share, 20,000,000 shares authorized, and 4,541,125
 issued and outstanding at June 25, 2022 and December 25, 2021, respectively.
                             45                             45
Additional paid-in capital                   486,059                   475,396
Retained earnings                   282,346                   286,987
Total equity                   768,854                   762,831
Total liabilities and equity $3,815,001 $3,913,171
     


        

FRANCHISE GROUP, INC. AND SUBSIDIARIES
         Consolidated Statements of Operations
 
             
  Three Months Ended
 Six Months Ended
(In thousands, except share count and per share data) June 25, 2022
 June 26, 2021
 June 25, 2022
 June 26, 2021
  (Unaudited)
 (Unaudited)
 (Unaudited)  (Unaudited) 
Revenues:            
Product $952,009  $805,768  $1,931,173  $1,389,585 
Service and other 135,648  48,193  283,929  76,768 
Rental 7,341  8,797  15,365  17,750 
Total revenues 1,094,998  862,758  2,230,467  1,484,103 
Operating expenses:            
Cost of revenue:            
Product 600,780  522,576  1,217,364  861,991 
Service and other 8,732  934  17,395  1,339 
Rental 2,741  2,935  5,603  5,940 
Total cost of revenue 612,253  526,445  1,240,362  869,270 
Selling, general, and administrative expenses 405,639  278,157  782,633  503,702 
Total operating expenses 1,017,892  804,602  2,022,995  1,372,972 
Income from operations 77,106  58,156  207,472  111,131 
Other expense:            
Bargain purchase gain 3,581  -  3,514  - 
Gain on sale-leaseback transactions, net 49,854  -  49,854  - 
Other 12,853  -  (9,122)  (36,726)
Interest expense, net (88,839) (22,865) (181,167) (70,300)
Income from continuing operations before income taxes 54,555  35,291  70,551  4,105 
Income tax expense (benefit) 13,572  2,770  17,250  (81)
Income from continuing operations 40,983  32,521  53,301  4,186 
Income from discontinued operations, net of tax -  6,215  -  48,363 
Net income attributable to Franchise Group, Inc. $40,983  $38,736  $53,301  $52,549 
             
Income per share from continuing operations:            
Basic $0.96  $0.76  $1.22  $- 
Diluted 0.94  0.74  1.19  - 
             
Net income per share:            
Basic $0.96  $0.91  $1.22  $1.20 
Diluted 0.94  0.89  1.19  1.20 
             
Weighted-average shares outstanding:            
Basic 40,356,299  40,175,058  40,331,855  40,142,571 
Diluted 41,126,605  40,905,567  41,148,668  40,142,571 
             


FRANCHISE GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
       
       
  Six Months Ended
(In thousands) June 25, 2022
 June 26, 2021
  (Unaudited)
 (Unaudited)
Operating Activities      
Net income $53,301  $52,549 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:      
Provision for doubtful accounts 56,840  1,910 
Depreciation, amortization, and impairment charges 42,236  31,157 
Amortization of deferred financing costs and prepayment penalties 12,032  69,923 
Amortization of securitized debt discount 128,208  - 
Stock-based compensation expense 10,853  5,478 
Change in fair value of investment 10,855  - 
Gain on sale-leaseback, bargain purchases, and sales of Company-owned stores (55,883) (731)
Other non-cash items (2,182) 645 
Changes in other assets and liabilities (206,572) (55,305)
Net cash provided by operating activities 49,688  105,626 
Investing Activities      
Purchases of property, plant, and equipment (21,809) (25,028)
Proceeds from sale of property, plant, and equipment 240,558  293 
Acquisition of business, net of cash and restricted cash acquired (3,754) (462,821)
Issuance of operating loans to franchisees -  (17,612)
Payments received on operating loans to franchisees 1,000  23,013 
Net cash (used in) investing activities 215,995  (482,155)
Financing Activities      
Dividends paid (54,665) (32,808)
Issuance of long-term debt and other obligations 219,056  1,306,724 
Repayment of long-term debt and other obligations (625,746) (856,385)
Issuance of common stock 49  - 
Issuance of preferred stock -  79,542 
Principal payments of finance lease obligations (1,383) - 
Payment for debt issue costs and prepayment penalty on extinguishment (431) (87,502)
Other stock compensation transactions (239) (18)
Net cash provided by (used in) financing activities (463,359) 409,553 
Effect of exchange rate changes on cash, net -  142 
Net increase (decrease) in cash equivalents and restricted cash (197,676) 33,166 
Cash, cash equivalents and restricted cash at beginning of period 292,714  151,502 
Cash, cash equivalents and restricted cash at end of period $95,038  $184,668 
Supplemental Cash Flow Disclosure      
Cash paid for taxes, net of refunds $17,842  $1,284 
Cash paid for interest 42,013  61,249 
Accrued capital expenditures 2,751  3,406 
Tax receivable agreement included in other long-term liabilities -  1,211 
       

Non-GAAP Financial Measures and Key Metrics

Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are financial measures that are not prepared in accordance with GAAP. Management believes the presentation of these measures is useful to investors as supplemental measures in evaluating the aggregate performance of the Company’s 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. These measures are used by management to evaluate the Company’s performance and make resource allocation decisions each period. These metrics are also used in the determination of executive management's compensation. Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS should not be considered in isolation or as a substitute for net income or other income statement information prepared in accordance with GAAP and our presentation of these non-GAAP measures may not be comparable to similarly titled measures used by other companies.

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. Adjusted EBITDA is a financial measure that is not prepared in accordance with GAAP.

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 segment's in-house financing operations, rebranding costs, acquisition costs, inventory fair value step up amortization, and amortization of acquired intangible assets. 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. Management excludes amortization of intangible assets because these are non-cash amounts for which the amount and frequency are significantly impacted by the timing and size of our acquisitions, which vary from period to periods and across companies. The tax effect on the related non-GAAP adjustments was calculated based on an estimated annual non-GAAP effective tax rate of 27%.

Reconciliation of Adjusted EBITDA
Below are reconciliations of Net Income/(Loss) from continuing operations to Adjusted EBITDA for the three and six months ended June 25, 2022.

  For the Three Months Ended June 25, 2022
($ In thousands) Buddy's Pet Supplies Plus American Freight Vitamin Shoppe Sylvan Badcock Corporate  Total
Net income (loss) from continuing operations $1,883  $11,298 $2,236  $18,332 $408 $14,422  $(7,596) $40,983 
Add back:                     
Interest expense 826  4,774 7,592  6,432 731 68,103  381  88,839 
Income tax expense (benefit) 852  2,582 (4,799) 6,253 480 1,813  6,390  13,572 
Depreciation and amortization charges 750  5,607 2,528  7,082 2,129 1,459  -  19,554 
Total Adjustments 2,428  12,963 5,321  19,767 3,340 71,375  6,771  121,965 
EBITDA 4,311  24,261 7,557  38,099 3,748 85,797  (825) 162,948 
Adjustments to EBITDA                     
Executive severance and related costs -  161 -  - - -  -  161 
Litigation costs and settlements (288) - (296) 315 - -  -  (269)
Stock-based and long term executive compensation 70  2,567 (71) - 139 -  5,337  8,041 
Corporate compliance costs -  - -  - - -  -  - 
Store closures -  173 (20) - - -  -  153 
W.S. Badcock financing operations -  - -  - - (6,928) -  (6,928)
Prepayment penalty on early debt repayment -  - -  - - -  -  - 
Right-of-use asset impairment -  - 273  - - -  -  273 
Integration costs -  64 -  - - -  -  64 
Divestiture costs -  - -  - - 493  -  493 
Acquisition costs -  18 -  - - 236  4,522  4,776 
Gain on investment in equity securities -  - -  - - -  (12,859) (12,859)
Acquisition bargain purchase gain -  - -  - - (3,581) -  (3,581)
Gain on sale-leaseback and owned properties, net -  - -  - - (49,854) -  (49,854)
Total Adjustments to EBITDA (218) 2,983 (114) 315 139 (59,634) (3,000) (59,530)
Adjusted EBITDA $4,093  $27,244 $7,443  $38,414 $3,887 $26,163  $(3,825) $103,418 
                      


                     
  For the Six Months Ended June 25, 2022
($ In thousands) Buddy's Pet Supplies Plus American Freight Vitamin Shoppe  Sylvan Badcock  Corporate  Total 
Net income (loss) from continuing operations  $             4,448 $          19,423 $                803 $          39,737  $                574 $          11,563  $        (23,247) $           53,301 
Add back:                    
Interest expense 1,634 9,505 15,161 12,831  1,450 140,133  453  181,167 
Income tax expense (benefit) 1,545 6,747 279 13,803  540 2,806  (8,470) 17,250 
Depreciation and amortization charges 1,507 11,736 5,087 13,945  3,985 5,328  -  41,588 
Total Adjustments 4,686 27,988 20,527 40,579  5,975 148,267  (8,017) 240,005 
EBITDA 9,134 47,411 21,330 80,316  6,549 159,830  (31,264) 293,306 
Adjustments to EBITDA                    
Executive severance and related costs - 154 - -  - 102  -  256 
Litigation costs and settlements 55 - 786 865  - -  (1,745) (39)
Stock-based and long term executive compensation 139 3,442 224 -  148 -  10,714  14,667 
Corporate compliance costs - - - -  - -  51  51 
Store closures - 293 218 -  - -  575  1,086 
W.S. Badcock financing operations - - - -  - (57,799) -  (57,799)
Prepayment penalty on early debt repayment - - - -  - -  -  - 
Right-of-use asset impairment - - 648 -  - -  -  648 
Integration costs - 108 105 -  18 297  -  528 
Divestiture costs - - - -  - 2,429  -  2,429 
Acquisition costs - 57 14 -  - 782  4,550  5,403 
Gain on investment in equity securities - - - -  - -  10,864  10,864 
Acquisition bargain purchase gain - - - -  - (3,514) -  (3,514)
Gain on sale-leaseback and owned properties, net- - - (2,273) - (49,854) -  (52,127)
Total Adjustments to EBITDA 194 4,054 1,995 (1,408) 166 (107,557) 25,009  (77,547)
Adjusted EBITDA $9,328 $51,465 $23,325 $78,908  $6,715 $52,273  $(6,255) $215,759 
                     


Reconciliation of Non-GAAP Net Income and EPS

Below 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 six months ended June 25, 2022.

  For the Three Months Ended
 For the Six Months Ended
($ In thousands except share count and per share data) June 25, 2022
 June 25, 2022
             
Net income (loss) from continuing operations / Net income (loss) from continuing operations per diluted share  $           40,983  1.00  $           53,301  $               1.30 
Less: Preferred dividend declared (2,129) (0.06) (4,257) (0.11)
Adjusted Net Income available to Common Stockholder 38,854  0.94  49,044  1.19 
Add back:            
Executive severance and related costs 161  0.01  256  0.01 
Litigation costs and settlements (269) (0.01) (39) - 
Stock-based and long term executive compensation 8,041  0.20  14,667  0.36 
Corporate compliance costs -  -  51  - 
Store closures 153  -  1,086  0.03 
W.S. Badcock financing operations               (6,928)                  (0.17)             (57,799)                  (1.40)
Prepayment penalty on early debt repayment                        -                           -                           -                           -   
Right-of-use asset impairment 273  0.01  648  0.02 
Integration costs 64  -  528  0.01 
Divestiture costs 493  0.01  2,429  0.06 
Acquisition costs 4,776  0.12  5,403  0.13 
Gain on investment in equity securities (12,859) (0.31) 10,864  0.26 
Acquisition bargain purchase gain (3,581) (0.09) (3,514) (0.09)
Gain on sale-leaseback and owned properties, net (49,854) (1.21) (52,127) (1.27)
Adjustments to EBITDA (59,530) (1.44) (77,547) (1.88)
Non-cash amortization of debt issuance costs 5,653  0.13  12,032  0.28 
Amortization of acquisition-related intangibles                 4,359                     0.11                  8,445                     0.21 
Securitized receivables interest expense 62,909  1.53  128,208  3.12 
Tax impact (3,452) (0.08) (18,339) (0.45)
Impact of diluted share count assuming non-GAAP net income -  -  -  - 
Total Adjustments to Net income (loss) from continuing operations 9,939  0.25  52,798  1.28 
Non-GAAP Net Income from continuing operations / Non-GAAP diluted EPS from continuing operations $           48,793  $               1.19  $         101,842  $               2.47 
Basic weighted average shares    40,356,299     40,331,855 
Non-GAAP diluted weighted average shares outstanding    41,126,605     41,148,668 
             

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, projections, predictions, expectations, or beliefs about future events or results and are not statements of historical fact. Such statements may include statements regarding the Company’s results of operation and financial condition, statements regarding product and freight costs, home furnishings unit volumes and profit margins and its outlook for fiscal 2022. Such forward-looking statements are based on various assumptions as of the time they are made, and are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are often accompanied by words that convey projected future events or outcomes such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company or its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, many of which are beyond the control of the Company. The Company refers you to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Form 10-K for the fiscal year ended December 25, 2021, and comparable sections of the Company’s Quarterly Reports on Form 10-Q and other filings, which have been filed with the SEC and are available on the SEC’s website at www.sec.gov. All of the forward-looking statements made in this press release are expressly qualified by the cautionary statements contained or referred to herein. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on the Company or its business or operations. Readers are cautioned not to rely on the forward-looking statements contained in this press release. Forward-looking statements speak only as of the date they are made and the Company does not undertake any obligation to update, revise or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Andrew F. Kaminsky
EVP & Chief Administrative Officer
Franchise Group, Inc.
akaminsky@franchisegrp.com 
(914) 939-5161