Investor Presentaiton
Historical Operating Income Reconciliation
This presentation includes information on non-GAAP financial measures ("non-GAAP" or "adjusted”), including consolidated adjusted operating income. This non-GAAP financial information is not based on any standardized methodology prescribed by U.S. generally
accepted accounting principles ("GAAP") and is not necessarily comparable to similar measures presented by other companies. Non-GAAP information is provided as a supplement to, not as a substitute for, or as superior to, measures of financial performance
prepared in accordance with GAAP. Management believes that this non-GAAP information is useful for an alternate presentation of the company's performance, when reviewed in conjunction with the company's GAAP consolidated financial statements and provides a
higher degree of transparency. These amounts are not determined in accordance with GAAP and therefore, should not be used exclusively in evaluating the company's business and operations. We encourage investors and others to review our financial information in
its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.
Fiscal 2022
Fiscal 2023
(In thousands)
2018
2019
2020
2021
Q1
Q2
Q3
Q4
2022
Q1 (4)
Q2
Q3
Operating income (loss) - As reported
$337,129
$233,345
-$271,345
$591,065
$41,902
$14,014
$117,548
$73,582
$247,047
$22,831
$65,290
$125,361
% of Revenue
8.4%
5.4%
-7.2%
11.8%
4.0%
1.2%
9.5%
4.9%
5.0%
2.1%
5.4%
9.6%
Long-lived asset impairment charges (1)
0
66,252
249,163
11,944
0
0
0
20,633
20,633
10,759
0
0
Incremental COVID-19 related expenses (2)
0
0
26,930
0
0
0
0
0
0
0
0
Severance costs
1,568
6,691
3,733
0
0
0
0
1,576
1,576
5,592
0
0
Joint business venture exit charges
0
4,194
0
0
0
0
0
0
0
0
0
0
Japan market transition costs
0
1,814
0
0
0
0
0
0
0
0
0
0
China restructuring (3)
0
1,543
0
0
0
0
0
0
0
0
0
0
Other contract related charges
0
0
0
0
0
0
0
0
0
4,924
0
0
Operating income - Adjusted
$338,698
$313,839
$8,481
$603,009
$41,902
$14,014
$117,548
$95,791
$269,256
$44,106
$65,290
$125,361
% of Revenue
8.4%
7.3%
0.2%
12.0%
4.0%
1.2%
9.5%
6.4%
5.4%
4.1%
5.4%
9.6%
(1) In fiscal 2022, the Company recorded impairment charges of $20.6 million primarily related to store property and equipment and operating lease ROU assets. In fiscal 2021, the Company recorded impairment charges of $11.9 million primarily related to store property and equipment and operating lease
ROU assets. In fiscal 2020, the Company recorded impairment charges of $249.2 million. Included in this amount are retail store impairment charges of $203.2 million, of which $154.8 million relates to operating lease ROU assets and $48.4 million relates to store property and equipment (fixtures and
equipment and leasehold improvements). We also recorded $28.0 million related to the impairment of certain corporate property and equipment, as well as $18.0 million of certain cost and equity method investments. In fiscal 2019, the Company recorded asset impairment charges of $64.5 million on the
assets of 20 retail stores. Of the total, $39.5 million related to the impairment of leasehold improvements and store fixtures, and $25.0 million related to the impairment of operating lease ROU assets. The Company also concluded that certain goodwill was impaired resulting in a $1.7 million charge in fiscal
2019.
(2) Incremental COVID-19 related expenses consisted of personal protective equipment and supplies for our associates and customers.
(3) Pre-tax corporate restructuring charges of $1.5 million, primarily consisted of severance and closure costs for our company-owned and operated stores in China recorded in the first quarter of fiscal 2019.
(4) Impairment and restructuring charges related to Quiet Platforms for Q1 of 2023.
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