UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2022
Commission File Number: 001-40207
Waldencast plc
(Translation of Registrant’s name into English)
10 Bank Street, Suite 560
White Plains, New York, 10606
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
This Amendment to Form 6-K is to correct the Exhibit 99.1, which contains the press release (the “Press Release”), and the Exhibit 99.2, which contains the earnings release supplement for the quarter ended September 30, 2022 (the “Earnings Supplement”) to the Form 6-K originally furnished to the Securities and Exchange Commission on November 10, 2022 (the “Original Form 6-K”). The Company is amending the Original Form 6-K in order to furnish a corrected press release (the “Corrected Press Release”) and a corrected earnings release supplement for the quarter ended September 30, 2022 (the “Corrected Earnings Supplement”). The Corrected Press Release and the Corrected Earnings Supplement amend the preliminary third quarter net loss figure from $16.8 million to $14.0 million, including the related adjustments. The revision to the net loss figure corresponds to the change in fair value of warrants and has no cash impact. This amendment to the Original Form 6-K is the updated version of the press release and earnings release supplement for the quarter ended September 30, 2022.
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EXHIBIT INDEX
| EXHIBIT NO. | DESCRIPTION | |
| 99.1 | Waldencast plc corrected press release. | |
| 99.2 | Waldencast plc corrected Supplemental Information for the quarter ended September 30, 2022 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Waldencast plc has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Waldencast plc | |||
| (Registrant) | |||
| Date: November 25, 2022 | By: | /s/ Michel Brousset | |
| Name: | Michel Brousset | ||
| Title: | Chief Executive Officer | ||
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Exhibit 99.1
CORRECTION: Waldencast plc Announces Third Quarter Fiscal Year 2022 Financial Results
November 25, 2022 – New York, New York – Waldencast plc, (NASDAQ: WALD) (“Waldencast”), a global multi-brand beauty and wellness platform, today announced that it corrected a press release issued November 10, 2022 to amend the preliminary 2022 third quarter net loss figure from $16.8 million to $14.0 million, including the related adjustments. The revision to Waldencast’s net loss figure corresponds to the change in fair value of warrants and has no cash impact. The corrected press release reads:
| - | Q3 2022 Net Sales of $78.9 million |
| - | Q3 2022 Gross margin of 62.4% and adjusted gross margin of 71.9% |
| - | Q3 2022 Net loss of $14.0 million |
| - | Q3 2022 Adjusted EBITDA of $15.3 million, or 19.4% of net sales |
| - | Company reaffirms guidance |
Waldencast plc, (NASDAQ: WALD) (“Waldencast”), a global multi-brand beauty and wellness platform, today announced results for the third quarter ended September 30, 2022.
Michel Brousset, Waldencast Founder and CEO, said: “We are pleased with our third quarter performance, which continued the positive momentum for our brands from the first half of the year, highlighted by increased sales and profitability. We are excited about our opportunities as we enter the final quarter of the year, and while cognizant of the broader macro-economic environment, the beauty category remains strong. In addition, our business and our brands continue to deliver strong growth and profitability, which is reflected in our reaffirmation of guidance. Our long-term ambition is to build a global best-in-class beauty and wellness multi-brand platform by scaling the next generation of high growth purpose driven brands. We look forward to delivering on this objective for the benefit of all Waldencast stakeholders.”
Results for the quarter ended September 30, 2022 (1)
Business Combination
On July 27, 2022 (the “Closing Date”), Waldencast consummated the business combination with Obagi Global Holdings Limited (“Obagi Skincare”) and Milk Makeup LLC (“Milk Makeup”). In accounting for the business combination, Waldencast was deemed to be the accounting acquirer, and Obagi Skincare was deemed to be the predecessor entity for purposes of financial reporting. Under the acquisition method of accounting, Waldencast’s assets and liabilities retained their carrying values and the assets and liabilities associated with Obagi Skincare and Milk Makeup were recorded at their fair values measured as of the acquisition date, which created a new basis of accounting.
Basis of Presentation
When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date. The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements.
Condensed Consolidated Statements of Operations (UNAUDITED) (1)
| Successor (Waldencast) | Predecessor (Obagi) | |||||||||||
| 2022 | 2022 | 2021 | ||||||||||
| U.S. Dollars (in thousands) | Period
from July 28 to September 30 | Period
from July 1 to July 27 | Period
from July 1 to September 30 | |||||||||
| Net revenue | $ | 73,445 | $ | 2,834 | $ | 58,510 | ||||||
| Cost of goods sold (2) | 27,505 | 980 | 12,668 | |||||||||
| Gross profit | 45,940 | |||||||||||
| Selling, general and administrative | 38,667 | 6,921 | 35,099 | |||||||||
| Research and development | 1,404 | 331 | 2,496 | |||||||||
| Depreciation and amortization | 10,935 | 1,080 | 3,565 | |||||||||
| Total operating expenses | 51,006 | 9,312 | 53,828 | |||||||||
| Operating (loss) income | (5,066 | ) | (6,478 | ) | 4,682 | |||||||
| Interest expense | 2,321 | 953 | 3,058 | |||||||||
| Forgiveness of Paycheck Protection Loan | (13 | ) | - | - | ||||||||
| Other income, net | (3,529 | ) | 32 | 106 | ||||||||
| Total other expenses—net | (1,221 | ) | 985 | 3,164 | ||||||||
| Income (loss) before income taxes | (3,845 | ) | (7,463 | ) | 1,518 | |||||||
| Income tax expense | 740 | 153 | 164 | |||||||||
| Net income (loss) | $ | (4,585 | ) | $ | (7,616 | ) | $ | 1,354 | ||||
| Net income attributable to non-controlling interests | 257 | |||||||||||
| Net (loss) income attributable to shareholders | (4,842 | ) | ||||||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business (as defined below). All related estimates are subject to change. |
| (2) | The cost of goods sold in the predecessor periods excludes product-related amortization expense. |
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Adjusted EBITDA reconciliation (1) for the period ended September 30, 2022 – Waldencast plc
| 2022 | 2021 | |||||||||||||||||||||||
| Period from July 28 to September 30 (Successor period) | Period from July 1 to July 27 (Predecessor period) | Three months ended September 30 (Predecessor period) | ||||||||||||||||||||||
| U.S. Dollars (in thousands) | Obagi | Milk | Waldencast Corp. | Waldencast | Obagi | Obagi | ||||||||||||||||||
| Net Income (Loss) | $ | 3,965 | $ | (2,656 | ) | $ | (5,894 | ) | $ | (4,585 | ) | $ | (7,616 | ) | $ | 1,354 | ||||||||
| China carve-out | - | - | - | - | 340 | (1,063 | ) | |||||||||||||||||
| Adjusted For: | - | - | ||||||||||||||||||||||
| Depreciation and amortization | 8,991 | 2,987 | - | 11,978 | 1,080 | 3,565 | ||||||||||||||||||
| Interest expense, net | - | - | 2,321 | 2,321 | 945 | 3,058 | ||||||||||||||||||
| Income tax expense | 740 | - | - | 740 | 153 | 164 | ||||||||||||||||||
| Stock-based compensation expense | 2,048 | 254 | 850 | 3,152 | - | - | ||||||||||||||||||
| Transaction costs | 1,002 | 135 | 3,610 | 4,747 | 1,968 | 649 | ||||||||||||||||||
| Inventory fair value adjustment | 2,782 | 1,558 | - | 4,340 | - | - | ||||||||||||||||||
| Warranty liability fair value adjustment | - | - | (2,805 | ) | (2,805 | ) | - | - | ||||||||||||||||
| Impact of China related party sales | 155 | - | - | 155 | - | - | ||||||||||||||||||
| Foreign currency transaction loss (gain) | (287 | ) | (415 | ) | - | (702 | ) | 4 | - | |||||||||||||||
| (Gain)/loss on disposal of assets | - | (3 | ) | - | (3 | ) | 35 | - | ||||||||||||||||
| Restructuring costs | 20 | - | - | 20 | 2 | 78 | ||||||||||||||||||
| Adjusted EBITDA | $ | 19,416 | $ | 1,860 | $ | (1,918 | ) | $ | 19,358 | $ | (3,089 | ) | $ | 7,805 | ||||||||||
| Net Sales | $ | 57,576 | $ | 15,869 | $ | - | $ | 73,445 | $ | 2,834 | $ | 58,510 | ||||||||||||
| Adjusted EBITDA % | 33.7 | % | 11.7 | % | N/A | 26.4 | % | -109.0 | % | 13.3 | % | |||||||||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business (as defined below). All related estimates are subject to change. |
Third Quarter Highlights
As the predecessor and successor results are not comparable, the Company presented the comparative quarterly results that combine the predecessor and post-acquisition periods for Obagi Skincare and the pre and post-acquisition periods for Milk Makeup. Under U.S. Generally Accepted Accounting Principles (“GAAP”), the periods prior to and subsequent to the acquisition date should not be combined, and Milk Makeup’s pre-acquisition period should not be included. Management believes these non-GAAP comparative quarterly results provide a perspective on the on-going performance of the combined companies’ operations.
The Company also separately reports financial results on the basis of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. Refer to “Reconciliation of Non-GAAP Financial Measures” below.
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Obagi Skincare (1)
| ● | Obagi Skincare recorded net sales of $60.4 million, an increase of 3.2% from the same period in the prior year and an increase of 12.1% on a comparable basis | |
| o | The increase of 12.1% on a comparable basis excludes sales related to the former Obagi China business, which was not acquired by Waldencast (the “Obagi China Business”). The distribution of Obagi Skincare’s products in China has remained under ownership of Cedarwalk Skincare Limited, Obagi Skincare’s former owners, who have entered into a licensing and distribution agreement with Waldencast. | |
| o | Q3 2022 Net sales of $60.4 million includes $55.9 million of comparable sales and $4.5 million of sales related to its former Obagi China Business | |
| o | Q3 2021 Net sales of $58.5 million includes $49.9 million of comparable sales and $8.6 million of sales related to its former Obagi China Business | |
| ● | Obagi Skincare gross margin of 64.9% and adjusted gross margin of 75.0%, compared to gross margin of 76.3% and adjusted gross margin of 74.8% in the prior year | |
| o | Q3 2022 adjusted gross margin excludes $2.8 million related to the inventory fair value step-up and $0.2 million related to its former Obagi China Business | |
| o | Q3 2021 adjusted gross margin excludes $7.3 million related to its former Obagi China Business | |
| ● | Obagi Skincare’s net loss of $3.7 million, compared to net income of $1.4 million in the prior year, reflects $19.6 million of transaction costs and other non-cash items | |
| ● | Obagi Skincare’s adjusted EBITDA of $16.3 million (27.0% of net sales), an increase of 109.2%, was primarily driven by robust comparable sales and strong operational leverage |
| 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| U.S. Dollars (in thousands) | Period
from July 28 to September 30 (Post-acquisition period) | Period
from July 1 to July 27 (Predecessor period) | Three
months ended September 30 (Predecessor + Post-acquisition period) | Three
months ended September 30 (Predecessor period) | % Change | |||||||||||||||||||||||||||||||
| Net Sales | $ | 57,576 | $ | 2,834 | $ | 60,410 | $ | 58,510 | 3.2 | % | ||||||||||||||||||||||||||
| Gross Margin | $ | 37,735 | 65.5 | % | $ | 1,499 | 52.9 | % | $ | 39,234 | 64.9 | % | $ | 44,621 | 76.3 | % | -12.1 | % | ||||||||||||||||||
| Adjusted Gross Margin | $ | 40,362 | 76.0 | % | $ | 1,578 | 56.0 | % | $ | 41,940 | 75.0 | % | $ | 37,329 | 74.8 | % | 12.4 | % | ||||||||||||||||||
| Net Income (Loss) | $ | 3,965 | $ | (7,616 | ) | $ | (3,651 | ) | $ | 1,354 | -369.6 | % | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 19,416 | 33.7 | % | $ | (3,089 | ) | -109.0 | % | $ | 16,327 | 27.0 | % | $ | 7,805 | 13.3 | % | 109.2 | % | |||||||||||||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. |
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Milk Makeup (1)
| ● | Milk Makeup recorded net sales of $18.5 million, an increase of 41.7% from the same period in the prior year | |
| ● | Milk Makeup’s gross margin of 54.0% and adjusted gross margin of 62.5%, compared to gross margin and adjusted gross margin of 53.2% in the prior year | |
| o | Q3 2022 Adjusted gross margin excludes $1.6 million related to the inventory fair value step-up | |
| ● | Milk Makeup’s net loss of $4.4 million, compared to net loss of $1.8 million in the prior year, reflecting $5.4 million of transaction costs and other non-cash items | |
| ● | Milk Makeup’s adjusted EBITDA of $0.9 million (5.0% of net sales) compared to $(1.0) million in the prior year, was primarily driven by strong sales growth, expansion in gross margin and operational leverage |
| 2022 | 2021 | |||||||||||||||||||||||||||||||||||
| U.S. Dollars (in thousands) | Period
from July 28 to September 30 (Post-acquisition period) | Period
from July 1 to July 27 (Pre-acquisition period) | Three
months ended September 30 (Pre-acquisition + Post-acquisition period) | Three
months ended September 30 (Pre-acquisition period) | % Change | |||||||||||||||||||||||||||||||
| Net Sales | $ | 15,869 | $ | 2,670 | $ | 18,539 | $ | 13,083 | 41.7 | % | ||||||||||||||||||||||||||
| Gross Margin | $ | 8,205 | 51.7 | % | $ | 1,815 | 68.0 | % | $ | 10,020 | 54.0 | % | $ | 6,957 | 53.2 | % | 44.0 | % | ||||||||||||||||||
| Adjusted Gross Margin | $ | 9,763 | 61.5 | % | $ | 1,815 | 68.0 | % | $ | 11,578 | 62.5 | % | $ | 6,957 | 53.2 | % | 66.4 | % | ||||||||||||||||||
| Net Loss | $ | (2,656 | ) | $ | (1,764 | ) | $ | (4,420 | ) | $ | (1,836 | ) | 140.7 | % | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 1,860 | 11.7 | % | $ | (930 | ) | -34.8 | % | $ | 930 | 5.0 | % | $ | (1,028 | ) | -7.9 | % | NM | |||||||||||||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. |
Waldencast Group central expenses – Period from July 28, 2022 to September 30, 2022 (Post-acquisition period)
| ● | These central expenses result in a net loss of $5.9 million and consists of $3.6 million of transaction costs, $2.3 million of interest expense, $1.9 million of ongoing central overhead, offset by $(1.9) million of non-cash items. |
| ● | These central expenses result in an adjusted EBITDA of $(1.9) million, reflecting ongoing central overhead. |
Fiscal 2022 Outlook
Waldencast reaffirms its previously issued outlook for Fiscal 2022 provided on November 15, 2021.
| ● | Net Sales of $256.3 million | |
| ● | Gross profit of $189.8 million | |
| ● | Adjusted EBITDA of $49.6 million |
In addition, as of September 30, 2022, there were 114.1 million fully diluted shares outstanding. Waldencast has reserved 3.9 million shares for future issuances of employee incentive awards.
Conference Call and Webcast Information
Investors and analysts interested in participating in the conference call are invited to dial (646) 307-1963 or (800) 715-9871 for a toll-free number (conference ID: 6198725). The conference call will be webcast live and can be accessed at https://ir.waldencast.com/. A replay of the webcast will remain available on the website for 90 days.
Waldencast will host a conference call to discuss the third quarter results ended September 30, 2022, today, November 10, 2022, at 8:30 AM ET. Those interested in participating in the conference call are invited to dial (646) 307-1963 (conference ID: 6198725). International callers may dial (800) 715-9871. The live webcast of the conference call will be available online at https://ir.waldencast.com/. A replay of the webcast will remain available on the website for 90 days.
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About Waldencast
Founded by Michel Brousset and Hind Sebti, Waldencast’s ambition is to build a global best-in-class beauty and wellness operating platform by developing, acquiring, accelerating, and scaling conscious, high-growth purpose-driven brands. Waldencast’s vision is fundamentally underpinned by its brand-led business model that ensures proximity to its customers, business agility, and market responsiveness, while maintaining each brand’s distinct DNA. The first step in realizing its vision was the business combination with Obagi Skincare and Milk Makeup. As part of the Waldencast platform, its brands will benefit from the operational scale of a multi-brand platform; the expertise in managing global beauty brands at scale; a balanced portfolio to mitigate category fluctuations; asset light efficiency; and the market responsiveness and speed of entrepreneurial indie brands. For more information please visit: https://ir.waldencast.com/.
Obagi Skincare is an industry-leading, advanced skin care line rooted in research and skin biology, refined with a legacy of 30 years’ experience. First known as leaders in the treatment of hyperpigmentation with the Obagi Nu-Derm® System, Obagi® products are designed to diminish the appearance of premature aging, photodamage, skin discoloration, acne, and sun damage. More information about Obagi Skincare is available on the brand’s website, Facebook, Twitter and Instagram pages.
Founded in 2016, Milk Makeup quickly became a cult-favorite among the beauty community for its values of self-expression and inclusion, captured by its signature Live Your Look, its innovative formulas and clean ingredients. The brand creates vegan, cruelty-free, clean formulas from its Milk Makeup HQ in Downtown NYC. Currently, Milk Makeup offers over 300 products through its US website www.MilkMakeup.com, and its retail partners including Sephora in North America, Europe, the Middle East and Australia and Cult Beauty and Selfridges in the UK.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Waldencast’s outlook and guidance for Fiscal 2022; and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Waldencast, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include, but are not limited to: (i) the inability to recognize the anticipated benefits of the transactions with Obagi Skincare and Milk Makeup; (ii) changes in general economic conditions, including as a result of the COVID-19 pandemic, (iii) the ability to continue to meet Nasdaq’s listing standards; (iv) volatility of Waldencast’s securities due to a variety of factors, including Waldencast’s inability to implement its business plans or meet or exceed its financial projections and changes; (v) the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; and (vi) the ability of Waldencast to implement its strategic initiatives and continue to innovate Obagi Skincare’s and Milk Makeup’s existing products and anticipate and respond to market trends and changes in consumer preferences.
These and other risks, assumptions and uncertainties are more fully described in the Risk Factors section of our Registration Statement on Form F-1 (File No. 333-267053), originally filed with the Securities and Exchange Commission (the “SEC”) on August 24, 2022 and as thereafter amended, and in our other documents that we file or furnish with the SEC, which you are encouraged to read. To the extent that COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors.
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Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made. The degree to which COVID-19 may adversely affect Waldencast’s results and operations, including its ability to achieve its outlook and guidance for Fiscal 2022, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Waldencast’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material Waldencast expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Waldencast gives no assurance that the combined company will achieve its expectations.
Reconciliation of Non-GAAP Financial Measures
The financial information and data contained in this release have not been audited in accordance with the standards of the Public Company Accounting Oversight Board and does not conform to Regulation S-X.
Waldencast separately reports financial results on the basis of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. See the attached tables for a reconciliation of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin to net sales and net income (loss), which are the most directly comparable GAAP financial measures.
For Obagi Skincare, adjusted gross margin excludes the sales related to the China distributor under a transition services agreement, the impact of Obagi Skincare’s related party sales to the China distributor, and the impact of the inventory fair value step-up as a result of the business combination accounting. For Milk Makeup, adjusted gross margin excludes the impact of the inventory fair value step-up as a result of the business combination accounting.
Adjusted EBITDA is defined as net income (loss) excluding the impact of income tax benefit, interest expense, net, depreciation and amortization and the transaction costs, non-cash items, and certain non-recurring income and expense that do not occur regularly as part of the normal activities of Obagi Skincare and Milk Makeup.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales.
Waldencast believes the non-GAAP measures of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. Waldencast believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing its financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP measures also provide perspective on how Waldencast’s management evaluates and monitors the performance of the business and provides a view on how the on-going operating company performs. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.
Comparable net sales for Obagi Skincare in predecessor periods excludes sales related to its former Obagi China business.
Contacts:
Investors
ICR
Allison Malkin/Annie Erner/Nina Weiss
waldencastir@icrinc.com
Media
ICR
Brittney Fraser/Alecia Pulman
waldencast@icrinc.com
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Appendix
Adjusted gross margin reconciliation (1) for the period ended September 30, 2022 and 2021 – Obagi Skincare
| 2022 | 2021 | |||||||||||
| U.S. Dollars (in thousands) | Period from July 28 to September 30 (Post-acquisition period) | Period from July 1 to July 27 (Predecessor period) | Three months ended September 30 (Predecessor period) | |||||||||
| Net Sales | $ | 57,576 | $ | 2,834 | $ | 58,510 | ||||||
| Recurring sales | 53,118 | 2,816 | 49,902 | |||||||||
| Obagi China Business carveout | - | 18 | 8,608 | |||||||||
| Chinese related party sales | 4,458 | - | - | |||||||||
| Cost of goods sold (2) | 19,841 | 980 | 12,668 | |||||||||
| Amortization expense (2) | - | 355 | 1,221 | |||||||||
| Gross Margin | $ | 37,735 | $ | 1,499 | $ | 44,621 | ||||||
| Gross Margin % | 65.5 | % | 52.9 | % | 76.3 | % | ||||||
| Gross Margin Adjustments: | ||||||||||||
| Inventory fair value adjustment | (2,782 | ) | - | - | ||||||||
| Obagi China Business carveout | - | (79 | ) | 7,292 | ||||||||
| Chinese related party sales | 155 | - | - | |||||||||
| Adjusted Gross Margin | $ | 40,362 | $ | 1,578 | $ | 37,329 | ||||||
| Adjusted Gross Margin % | 76.0 | % | 56.0 | % | 74.8 | % | ||||||
| (% of Recurring sales) | ||||||||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. |
| (2) | The cost of goods sold in the predecessor periods excludes product-related amortization expense. Product-related amortization expense is included as an adjustment to calculate the gross margin per U.S. GAAP and to be comparable to the successor period. |
Adjusted gross margin reconciliation (1) for the period ended September 30, 2022 and 2021 – Milk Makeup
| 2022 | 2021 | |||||||||||
| U.S. Dollars (in thousands) | Period from July 28 to September 30 (Post-acquisition period) | Period from July 1 to July 27 (Pre-acquisition period) | Three months ended September 30 (Pre-acquisition period) | |||||||||
| Net Sales | $ | 15,869 | $ | 2,670 | $ | 13,083 | ||||||
| Cost of goods sold | 7,664 | 855 | 6,126 | |||||||||
| Gross Margin | $ | 8,205 | $ | 1,815 | $ | 6,957 | ||||||
| Gross Margin % | 51.7 | % | 68.0 | % | 53.2 | % | ||||||
| Gross Margin Adjustments: | ||||||||||||
| Inventory fair value adjustment | (1,558 | ) | - | - | ||||||||
| Adjusted Gross Margin | $ | 9,763 | $ | 1,815 | $ | 6,957 | ||||||
| Adjusted Gross Margin % | 61.5 | % | 68.0 | % | 53.2 | % | ||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. |
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Adjusted EBITDA reconciliation (1) for the period ended September 30, 2022 – Obagi Skincare
| 2022 | 2021 | |||||||||||
| U.S. Dollars (in thousands) | Period from July 28 to September 30 (Post-acquisition period) | Period from July 1 to July 27 (Predecessor period) | Three months
ended September 30 (Predecessor period) | |||||||||
| Net Income (Loss) | $ | 3,965 | $ | (7,616 | ) | $ | 1,354 | |||||
| China carve-out | - | 340 | (1,063 | ) | ||||||||
| Adjusted For: | ||||||||||||
| Depreciation and amortization | 8,991 | 1,080 | 3,565 | |||||||||
| Interest expense, net | - | 945 | 3,058 | |||||||||
| Income tax expense | 740 | 153 | 164 | |||||||||
| Stock-based compensation expense | 2,048 | - | - | |||||||||
| Transaction costs | 1,002 | 1,968 | 649 | |||||||||
| Inventory fair value adjustment | 2,782 | - | - | |||||||||
| Impact of China related party sales | 155 | - | - | |||||||||
| Foreign currency transaction | (287 | ) | 4 | - | ||||||||
| Disposal of assets | - | 35 | - | |||||||||
| Restructuring costs | 20 | 2 | 78 | |||||||||
| Adjusted EBITDA | $ | 19,416 | $ | (3,089 | ) | $ | 7,805 | |||||
| Net Sales | $ | 57,576 | $ | 2,834 | $ | 58,510 | ||||||
| Adjusted EBITDA % | 33.7 | % | -109.0 | % | 13.3 | % | ||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change. |
Adjusted EBITDA reconciliation (1) for the period ended September 30, 2022 – Milk Makeup
| 2022 | 2021 | |||||||||||
| U.S. Dollars (in thousands) | Period from July 28 to September 30 (Post-acquisition period) | Period from July 1 to July 27 (Pre-acquisition period) | Three months ended September 30 (Pre-acquisition period) | |||||||||
| Net Loss | $ | (2,656 | ) | $ | (1,764 | ) | $ | (1,836 | ) | |||
| Adjusted For: | ||||||||||||
| Depreciation and amortization | 2,987 | 272 | 523 | |||||||||
| Interest expense, net | - | 1 | 26 | |||||||||
| Stock-based compensation expense | 254 | - | 125 | |||||||||
| Transaction costs | 135 | 340 | - | |||||||||
| Inventory fair value adjustment | 1,558 | - | - | |||||||||
| Foreign currency transaction | (415 | ) | 221 | 16 | ||||||||
| Disposal of assets | (3 | ) | - | 118 | ||||||||
| Adjusted EBITDA | $ | 1,860 | $ | (930 | ) | $ | (1,028 | ) | ||||
| Net Sales | $ | 15,869 | $ | 2,670 | $ | 13,083 | ||||||
| Adjusted EBITDA % | 11.7 | % | -34.8 | % | -7.9 | % | ||||||
| (1) | Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. |
9
Exhibit 99.2
Q3 2022 Earnings Presentation November 2022 (CORRECTED) 1
Cautionary Statement Regarding Forward - Looking Statements Statements in this release that are not historical, are forward - looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Waldencast’s outlook and guidance for Fiscal 2022; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward - looking statements. These forward - looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the control of Waldencast, that could cause actual results or outcomes to differ materially from those discussed in the forward - looking statements. Important factors, among others, that may affect actual results or outcomes include, but are not limited to: (i) the inability to recognize the anticipated benefits of the transactions with Obagi Skincare and Milk Makeup; (ii) changes in general economic conditions, including as a result of the COVID - 19 pandemic, (iii) the ability to continue to meet Nasdaq's listing standards; (iv) volatility of Waldencast's securities due to a variety of factors, including Waldencast's, inability to implement its business plans or meet or exceed its financial projections and changes; (v) the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; and (vi) the ability of Waldencast to implement its strategic initiatives and continue to innovate Obagi Skincare’s and Milk Makeup’s existing products and anticipate and respond to market trends and changes in consumer preferences. These and other risks, assumptions and uncertainties are more fully described in the Risk Factors section of our Registration Statement on Form F - 1 (File No. 333 - 267053), originally filed with the Securities and Exchange Commission (the “SEC”) on August 24, 2022 and as thereafter amended, and in our other documents that we file or furnish with the SEC, which you are encouraged to read. To the extent that COVID - 19 adversely affects our business and financial results, it may also have the effect of heightening many of such risk factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward - looking statements. Accordingly, you are cautioned not to rely on these forward - looking statements, which speak only as of the date they are made. The degree to which COVID - 19 may adversely affect Waldencast’s results and operations, including its ability to achieve its outlook and guidance for Fiscal 2022, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID - 19 and emerging new variants and how quickly and to what extent normal economic and operating conditions can resume. As a result, the impact on Waldencast’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material Waldencast expressly disclaims any current intention, and assumes no duty, to update publicly any forward - looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise. Waldencast gives no assurance that the combined company will achieve its expectations. 2 Strictly confidential. Property of Waldencast. Disclaimer Reconciliation of Non - GAAP Financial Measures The financial information and data contained in this release have not been audited in accordance with the standards of the Public Company Accounting Oversight Board and does not conform to Regulation S - X. Waldencast separately reports financial results on the basis of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin, which are non - GAAP financial measures. See the attached tables for a reconciliation of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin to net sales and net income (loss), which are the most directly comparable GAAP financial measures. For Obagi Skincare, adjusted gross margin excludes the sales related to the China distributor under a transition services agreement, the impact of Obagi Skincare's related party sales to the China distributor, and the impact of the inventory fair value step - up as a result of the business combination accounting. For Milk Makeup, adjusted gross margin excludes the impact of the inventory fair value step - up as a result of the business combination accounting. Adjusted EBITDA is defined as net income (loss) excluding the impact of income tax benefit, interest expense, net, depreciation and amortization and the transaction costs, non - cash items, and certain non - recurring income and expense that do not occur regularly as part of the normal activities of Obagi Skincare and Milk Makeup. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. Waldencast believes the non - GAAP measures of adjusted gross margin, adjusted EBITDA and adjusted EBITDA margin provide useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. Waldencast believes that the use of these non - GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing its financial measures with other similar companies, many of which present similar non - GAAP financial measures to investors. These non - GAAP measures also provide perspective on how Waldencast’s management evaluates and monitors the performance of the business and provides a view on how the on - going operating company performs. These non - GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non - GAAP financial measures. Comparable net sales for Obagi Skincare in predecessor periods excludes sales related to its former Obagi China business. In addition, the Company has presented the comparative quarterly results that combine the predecessor and post - acquisition periods for Obagi Skincare and the pre and post - acquisition periods for Milk Makeup. Under U.S. Generally Accepted Accounting Principles (“GAAP”), the periods prior to and subsequent to the acquisition date should not be combined, and Milk Makeup’s pre - acquisition period should not be included. Management believes these non - GAAP comparative quarterly results provide a perspective on the on - going performance of the combined companies’ operations.
Waldencast Executive Team - Speakers Michel Brousset Founder and CEO 25+ years experience ■ Previously Group President of L’Oréal North America Consumer Products Division and CEO of L’Oréal UK ■ Various roles at L’Oréal and Procter & Gamble successfully building billion - dollar brands and businesses Philippe Gautier CFO and COO 30+ years experience ■ Previously Group CFO at Selecta – a KKR portfolio company ■ Various roles such as Group CFO and COO for SMCP (Sandro, Maje, Claudie Pierlot, De Fursac) and CFO of major brands at Kering, including Sergio Rossi and Puma in North America 3 Strictly confidential. Property of Waldencast.
Our ambition is to build a global best - in - class beauty and wellness multi - brand platform by creating, acquiring, accelerating, and scaling the next generation of high - growth, purpose - driven brands 4
Strictly confidential. Property of Waldencast. US Premium Beauty continues to show growth and resilience, as it has consistently done over time Source: NPD US September 2022 YTD BEAUTY YTD MAKEUP YTD SKIN CARE Q3 MAKEUP +18.3% Value Growth +14.9% Units Growth +15.6% Value Growth +13.6% Units Growth Q3 SKIN CARE +13.0% Value Growth +12.2% Units Growth +15.5% Value Growth +15.2% Units Growth +16.4% Value Growth +13.7% Units Growth +15.0% Value Growth +12.7% Units Growth Q3 BEAUTY Beauty is a proven and resilient, high - growth and highly profitable market with proven resiliency through economic cycles. YTD it has maintained its dynamic growth – both in value and in units as consumers are returning to their pre - pandemic consumptions habits. 5
Strictly confidential. Property of Waldencast. Leading physician - dispensed brand Attractive growth potential and strong anchor capabilities in skin health, complemented by a robust financial and operational backbone #1 Perceived best performing brand among US providers 1 80+ Patents worldwide 2 1 ”2020 Kline Physician - Dispensed Skincare: US Perception & Satisfaction Survey,” Kline & Company 2 Obagi Information 3 Sephora management 4 As of November 3, 2022 9:00 am ET #2 Clean brand at Sephora US 3 2.2m Instagram followers 4 Leading clean makeup brand Cult following among Gen - z consumers known for its cultural relevance and iconic products. Anchored by strong community in a rapidly growing makeup segment Waldencast has the leading brands in two of the most resilient high - growth beauty markets 6
Strictly confidential. Property of Waldencast. Q3 2022 Overview 7
Strictly confidential. Property of Waldencast. Net Sales $78.9M +10.3% Adjusted Gross Margin 71.9% +155 bp OBAGI Continued growth on core US physician dispensed business Strong international growth Setting the base for D2C growth Highly profitable Q3 2022 – Waldencast Key Highlights 1 MILK Outstanding growth versus US market 4 driven by core and innovation Strong gross margin and profitability progress Starting investment in broader brand awareness Beginning strong international expansion 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business (as defined below). All related estimates are subject to change 2 Comparable net sales is a component of net sales which excludes sales related to the former Obagi China Business, which was not acquired by Waldencast (the “Obagi China Business”). The distribution of Obagi Skincare’s products in China has remained under ownership of Cedarwalk Skincare Limited, Obagi Skincare’s former owners, who have entered into a licensing and distribution agreement with Waldencast. 3 Reconciliations of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, are included in the appendix 4 Source: NPD US September 2022 Adjusted EBITDA 3 $15.3M +126.3% 19.4% of Net Sales Comparable Net Sales 2 $74.5M +18.2% 8
Note: Discrepancies in arithmetic are due to rounding ¹Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change 2 Comparable net sales is a component of net sales which excludes sales related the former Obagi China Business 3 For a reconciliation of Obagi, Milk and combined company adjusted EBITDA to net income (loss), the most comparable GAAP measure, are included in the appendix 4 Waldencast central expenses reflect ongoing central overhead incurred in the post - combination perio S d trictly confidential. Property of Waldencast. + Q3 22 combined financial profile 1 9 Net Sales ($m) OBAGI stand - alone Milk stand - alone $78.9 +10.3% $71.6 $18.5 $13.1 $58.5 $60.4 3Q21 3Q22 Comparable Net Sales 2 ($m) OBAGI stand - alone Milk stand - alone +18.2% $74.5 $63.0 $18.5 $13.1 $55.9 $49.9 3Q21 3Q22 Adjusted Gross Margin ($m) OBAGI stand - alone Milk stand - alone +20.8% $53.5 $44.3 $11.6 $7.0 $41.9 $37.3 3Q21 3Q22 GM % 70.3% 71.9% Adjusted EBITDA 3 ($m) OBAGI stand - alone Milk stand - alone Waldencast central expenses 4 $15.3 $0.9 +126.3% $6.8 $16.3 $7.8 ($1.0) ($1.9) 3Q21 3Q22 ADJ EBITDA % 9 3 . Q 5 2 % 1 1 3 9 Q . 2 4 2 %
10 Net Debt at September 30, 2022 and Terms Total Financing Line Available (Term + Revolver) $225 Gross Debt $180 Net Debt $149 Term Loan Terms SOFR + 3.6% Waldencast Net Debt and Ownership Ownership at September 30, 2022 Obagi Shareholders 26.3% Milk Shareholders 19.6% Founders and Sponsor Members 22.8% Third Party FPA 16.1% PIPE Investors 11.0% SPAC Public Shareholders 4.2% Independent Directors 0.1% 10
11 Waldencast fully diluted share count, conservatively including existing allocated but unvested equity Waldencast capitalization table positions the company for success • 1.8mm (1.6% of DSO) and 47.5mm shares (41.6% of DSO) owned by former members of Obagi and Milk locked up until 01/27/23 and 07/27/23, respectively • 24.5mm (21.5% of DSO) shared owned by founders locked up until 07/27/23 Shares Basic shares outstanding 1 107,564,785 Vested employee RSUs 2 395,471 Pro forma basic shares outstanding 107,960,256 No. Weighted - avg price Unvested employee RSUs 3 2,086,827 Vested employee stock rights with exercise prices 4 4,046,591 $4.43 2,253,951 Unvested employee stock rights with exercise prices 4 3,898,151 $5.44 1,777,557 Total diluted shares outstanding (“DSO”) 114,078,591 Warrants 5 $11.50 29,533,282 Unvested employee stock rights with exercise prices (Out of Money) 6 11,500,000 • Diluted share count excludes management equity award pool not yet allocated. • The company has reserved 3,942,716 shares for future issuances of employee incentive awards Summary of investor lock - up agreements 2022 Incentive Award Plan Diluted share count calculation (assuming closing share price on 09/30/22) 1 Includes 21,104,225 Waldencast plc Class B ordinary shares owned by former members of Milk 2 Vested RSUs not yet included in basic shares outstanding as not yet converted at discretion of unit holders 3 Unvested RSUs includes additional 692,000 shares of restricted stock granted on 8/12/22 4 Dilution from employee stock rights with exercise prices assumes net share settlement under treasury stock method, based on WALD closing price of $10.00 on September 30, 2022 5 Includes 11,499,950 Waldencast plc Warrants, 5,333,333 Waldencast plc warrants issued in a private placement in connection with the Sponsor Forward Purchase Agreement, and 5,766,666 Waldencast plc Warrants issued in a private placement in connection with the Third - Party Forward Purchase agreement with $11.50 strike price, redeemable at $18.00; includes 5,933,333 Waldencast plc Warrants issued in a private placement at the closing of Waldencast Acquisition Corp.'s initial public offering and 1,000,000 Waldencast plc Warrants issued in a private placement in connection with the Working Capital Loan with $11.50 strike price 6 Options granted on 8/12/22 with strike prices between $10.70 and $15.01
12
1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business. All related estimates are subject to change 2 2022 Obagi financials inclusive of former Obagi China Business 3 Comparable net sales is a component of net sales which excludes sales related to former Obagi China Business 4 Reconciliations of adjusted EBITDA and adjusted EBITDA margin to net income (loss), the most directly comparable GAAP financial measure, are included in the appendix +12.1% Q3 2022 Comparable Net Sales Growth 3 $60.4M Q3 2022 Net Sales 2 75.0% Q3 2022 Adjusted Gross Margin 27.0% Q3 2022 Adj. EBITDA 4 +1,369 BP vs. 3Q21 OBAGI KEY FIGURES: Q3 2022 1 13
14
15 15
16
17
18
19
20
21
22
MILK MAKEUP KEY FIGURES: Q3 2022 1 ¹ Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change 2 Reconciliations of adjusted EBITDA and adjusted EBITDA margin to net income (loss), the most directly comparable GAAP financial measure, are included in the appendix 3 NPD US consumption data YTD Q3 2022, Prestige Makeup $18.5M Q3 2022 Net Sales +41.7% Q3 2022 Net Sales Growth 62.5% Q3 2022 Adjusted Gross Margin 5.0% Q3 2022 Adj. EBITDA 2 +1,287 BP vs. 3Q21 +43.0% YTD Sell Out vs Selective USA Beauty Make - Up market at +18.0% 3 23
GROW AWARENESS + COMMUNITY OUR GROWTH ROADMAP 3 KEY LEVERS DELIVER BREAKTHROUGH INNOVATION EXPAND + INTERNATIONALIZE DISTRIBUTION 24
ALWAYS - ON COMMUNITY FOCUS DRIVING GROWTH ON CORE PRODUCTS AWARENESS + COMMUNITY GROWTH STRONG CORE PRODUCT GROWTH Hydro Grip Primer $18 (mini) / $36 (full size) Lip + Cheek $22 Hydro Grip Spray $21 (mini) / $36 (full size) 2019 2020 2016 2016 22.6% 8.4% 11.5% 8.3% +62% 1 +144% 2 +88% 3 +159% 2 Launch date: % of YTD 2022 revenue 2 : YTD 2022 % growth 2 : YTD Collection Rank within category (Sephora USA) 3 Matte Bronzer $22 1 TIK TOK searching #milkmakeup on November 3 rd , 2022 at 3:45 pm ET 2 Milk internal sales data 3 Sephora USA data YTD September 30 th , 2022 #milkmakeup & #milkmakeuphacks >275M on Tik Tok 1 1.7M views 283.6K likes Organic 25
LOOKING AHEAD: GROW AWARENESS VIA TOP TALENT PARTNERSHIP 1 TIK TOK and Youtube views captured on November 3 rd at 4:00 pm ET 1.9M views in 6 days 721K views in 6 days 327K views in 5 days 26
DELIVERING BREAKTHROUGH INNOVATION BALANCED GROWTH WITH NEW LAUNCHES +40% YTD 2022 1 STRATEGY TO REINFORCE CORE CATEGORIES MASCARA + PRIMER WHILE EXPANDING INTO COMPLEXION Primer since launch at Sephora USA 2 Top 3 ¹ Milk internal sales data 2 Sephora management Future Fluid Concealer NEW 27
HYDRO GRIP CONTINUES STRONG GROWTH, PORE ECLIPSE INCREMENTAL #1 AND #3 PRIMERS YTD AT SEPHORA USA 1 Top 3 Primer Sephora 1 #1Primer Sephora 1 1 Sephora management 2 Milk internal sales data +62% YTD 2 NEW 28
LOOKING AHEAD: SIGNIFICANT CATEGORY EXPANSION OPPORTUNITIES KEY FOCUS: REINFORCING CORE CATEGORIES WHILE WINNING IN NEW COMPLEXION BATTLEGROUND Active + Whitespace Milk Categories 1 Mascara $1.9B Primer 2 $0.3B Blusher & Bronzer $0.5B Skin Tints $2.3B Foundation / Concealer $3.8B Lash & Brow $1.0B Lip $2.8B Shadow $0.5B Skincare $21.9B Concealer Haircare $14.1B Concealer Bath / Shower $9.5B \ Foundation / Fragrance $8.7B Category Expansion Make - up Established Emerging Whitespace 3 v/s Other Leading Make - Up Specialist Brands Milk Makeup has the opportunity to grow through innovation and launches 1 Market sizes reflect 2021E data for the USA market; Euromonitor International; Beauty & Personal Care and Color Cosmetics in the US, 2021ed, retail value sales, current prices, 2020 fixed ex rates 2 Primer refers to EMI’s category BB/CC creams and skin tints refers to EMI’s premium foundation / concealer 3 Areas where management believes product offering expansions or introduction of new categories are possible 4 Milk internal sku count 1,500 - 7,000 SKUs 330 SKUs 4 29
FUTURE FLUID CONCEALER POSITIVE EARLY REVIEWS + PR + COMMUNITY SUPPORT ¹ Sephora.com data captured on November 3 rd at 5:00 pm ET STRONG EARLY RATINGS + REVIEWS STRONG EARLY RATINGS + REVIEWS STRONG COMMUNITY FEEDBACK 30
EXPAND + INTERNATIONALIZE DISTRIBUTION SIGNIFICANT WHITE SPACE WITHIN THE USA AND INTERNATIONALLY Note: Door counts represent expansion opportunities in brick and mortar stores Source: Retailer company websites Current Milk Presence in Brick & Mortar Expansion Opportunity ~1,300 of 2,900+ 31 ~200 of 6,200+ Tremendous whitespace for untapped department store + e - commerce distribution milkmakeup.com only ships to the US today
H2 2022: EXPANDING BRAND PRESENCE DOMESTICALLY AND ABROAD BOTH BRICK & MORTAR AND PURE PLAYERS IS THE US. EXPANDING IN THE 4 TH MAKEUP MARKET GLOBALLY. USA EXPANSION INTERNATIONAL EXPANSION 2021 Doors: 200 32 1H 2022 Doors: 400+ FY 2022 Proj. Doors: 600 Launch USA: June 2022 Q4/Q1 2023 #4 MAKE - UP MARKET GLOBALLY
SKINCLUSION is Obagi’s commitment to provide effective, science - based skin care for all skin tones. They were the 1 st to design clinical research on all six Fitzpatrick skin types. Strictly confidential. Property of Waldencast. MMU Sustainability Commitments: More Sustainable shipping + Outer Packaging More Environmentally friendly packs + Refills How To Recycle Partnerships with How2Reycle and g2 revolution Waldencast commitment to exemplary ESG WE PLEDGE TO DONATE 1% OF ALL MILKMAKEUP.COM SALES TO THE CENTER MMU social philanthropy focuses on self - expression and equality for underrepresented LGBTAIQ+ and BIPOC groups. Public Company Best in Class governance with Best In Class board of Directors and Protocols. Philippe Gautier named Chief Financial Officer and Chief Operating Officer in October 2022. WE PLEDGE TO DONATE 1% OF ALL MILKMAKEUP.COM SALES TO THE FASHION SCHOLARSHIP FUND 33
Strictly confidential. Property of Waldencast. A platform poised for long - term profitable growth characterized by: • Operational scale of a multi - brand platform • Balanced portfolio in structurally attractive segments of the category • Expertise in managing global beauty brands at scale • Asset - light efficiency vs. slow, inflexible and costly traditional structures • Strong alignment of management incentives to long - term value creation thru operational and capital allocation excellence Resilient and high - growth markets that have weathered the macro turmoil faced by consumer markets +16.4% YTD Beauty Value Growth +18.3% YTD Makeup Value Growth +13.0% YTD Skin Care Value Growth 2 leading brands with unique positioning anchored in high customer affinity and strong brand equity 34
Strictly confidential. Property of Waldencast. Appendix 35
36 Source : Company fillings - Acquisition Completed July 27 , 2022 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business . All related estimates are subject to change . When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date . The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements . 2 All Obagi pro forma financials excludes sales related to the former Obagi China Business 3 Waldencast has included quarterly results that combine the predecessor and post - acquisition periods for Obagi Skincare and the pre and post - acquisition periods for Milk Makeup, which should not be combined under GAAP, as only Obagi financial statements should be included in predecessor periods. However, management believes these non - GAAP comparative quarterly results provide a perspective on the on - going performance of the combined companies’ operations. 4 Reconciliations of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, are included in the appendix 5 Waldencast central expenses reflect ongoing central overhead incurred in the post - combination period Key Financials 1 – Quarterly Adj. EBITDA (UNAUDITED) 1Q22A 1Q22A vs. 1Q21A 2Q22A 2Q22A vs. 2Q21A 3Q22A 3Q22A vs. 3Q21A OBAGI $7,848 $2,711 $0 - 15.8% 69.9% NA $16,501 $5,388 $0 14.2% 301.5% NA $16,327 $930 ($1,918) 109.2% NM NM Central costs 5 Waldencast $10,559 10.9% $21,889 38.6% $15,339 126.3% Adj. EBITDA Milk ($mm) 4 PRO FORMA FINANCIALS 2 Q3 2022 3
Q3 2022 – Condensed Consolidated Statement of Operations (UNAUDITED) 1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business . All related estimates are subject to change . When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date . The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements Strictly confidential. Property of Waldencast. 37
Q3 2022 – Waldencast plc, Adjusted EBITDA reconciliation 1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business . All related estimates are subject to change . When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date . The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements Strictly confidential. Property of Waldencast. 38
Q3 2022 – Obagi Skincare Adjusted EBITDA reconciliation 1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business . All related estimates are subject to change . When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date . The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements Strictly confidential. Property of Waldencast. 39
Q3 2022 – Milk Makeup Adjusted EBITDA reconciliation 1 1 Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date. The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements 40 Strictly confidential. Property of Waldencast.
Strictly confidential. Property of Waldencast. Q3 2022 – Obagi Skincare Adjusted Gross Margin reconciliation 1 1 Waldencast is in the process of finalizing its business combination accounting and disposal of the former Obagi China Business . All related estimates are subject to change . When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date . The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements 2 The cost of goods sold in the predecessor periods excludes product - related amortization expense . Product - related amortization expense is included as an adjustment to calculate the gross margin per U . S . GAAP and to be comparable to the successor period 41
1 Waldencast is in the process of finalizing its business combination accounting. All related estimates are subject to change. When reading our financial statements, you should note there is a clear division between the “predecessor” periods that include financials up to the Closing Date and “successor” periods that include all periods after the acquisition date. The predecessor and successor results shown are not comparable, as the successor period includes the consolidated financial statements of Waldencast, Obagi Skincare, and Milk Makeup, whereas the predecessor period includes only Obagi Skincare’s financial statements Strictly confidential. Property of Waldencast. Q3 2022 – Milk Makeup Adjusted Gross Margin reconciliation 1 42