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F45 Training Shares Plunge On FY22 Guidance Cut, CEO Transition, Workforce Reduction

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  • F45 Training Holdings Inc (NYSE: FXLV) shares dropped 49% during the after-hours session on the Company's strategic update announcement.

  • After leading the Company for the last decade, President, CEO, and Chairman of the Board of Directors Adam J. Gilchrist has stepped down. Mr. Gilchrist will remain on the Board as a director.

  • FXLV has appointed Ben Coates, an independent director, as an interim CEO until a permanent CEO is appointed.

  • F45 is realigning its corporate operations around an updated growth outlook that prioritizes profitability and cash flow generation.

  • The Company aims to reduce operational expenses and strategically streamline corporate functions, including reducing the global workforce by ~110 employees.

  • "We are taking the necessary steps to right-size our business in light of shifting macroeconomic and business conditions. While we expect growth to continue, market dynamics are having a greater than expected impact on the ability of franchisees to obtain capital to develop new F45 locations. In addition, recent share price performance has made it challenging for franchisees to utilize financing facilities announced earlier this year," commented Chris Payne, CFO of F45.

  • FY22 Outlook: F45 Training expects revenue of $120 million to $130 million (vs. consensus of $265.99 million), compared to the prior guidance of $255 million to $275 million.

  • It expects Adjusted EBITDA of $25 million to $30 million, compared to the prior guidance of $90 million to $100 million. The free cash flow guidance is withdrawn.

  • New Franchises Sold between 350 and 450, compared to the prior guidance of 1,500.

  • Net Initial Studio Openings between 350 and 450, compared to the prior guidance of 1,000.

  • Price Action: FXLV shares are trading lower by 49.57% at $1.77 during the post-market session on Tuesday.

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