附件99.3
SharkNinja報告2024年第三季度成果
關注Fis2024財年 關鍵指標的展望
2024年10月31日，馬薩諸塞州尼達姆市 全球產品設計和科技公司SharkNinja，Inc.（「SharkNinja」或「公司」）（紐交所：SN）今天宣佈截至2024年9月30日的第三季度財務業績。
2024年第三季度的亮點與2023年第三季度相比
•淨銷售額增長33.2%，至142660萬美元，調整後的淨銷售額增長34.9%。 至142660萬美元。
•毛利率和調整後的毛利率分別增加了320和160個點子。
•淨利潤增長606.8%至13230萬美元。調整後的淨利潤增長28.2%至17050萬美元。
•調整後的EBITDA增加了25.7%，達到26240萬美元，佔調整後淨銷售額的18.4%。
首席執行官馬克·巴羅卡斯表示：「SharkNinja交付了又一個出色的季度銷售額和利潤表現，展示了我們三支柱增長策略持續成功的證明。我們強大的創新管道、無與倫比的消費者洞察力以及強勁的需求創造引擎正推動我們的產品組合實現強勁的兩位數增長，使我們在現有類別中獲得份額，進入新類別並全球擴張。隨着我們進入假日季節，儘管全球運營環境持續面臨挑戰，我們對業務發展的勢頭感到滿意。我們對自己在我們龐大且不斷增長的可尋址市場中不斷增加份額的能力充滿信心，堅信我們可以實現可持續的長期盈利增長。」
2024年9月30日止三個月
淨銷售額增加33.2％至142660萬美元，而去年同期爲107060萬美元。調整後的淨銷售額增加34.9％至142660萬美元，而去年同期爲105740萬美元，根據不變貨幣計算，增長率爲33.9％。淨銷售額和調整後的淨銷售額的增加源於我們的四大主要產品類別的增長，包括食品製備器具、烹飪和飲料器具、清潔器具及其他（其中包括美容和家居環境產品）。
•清潔設備的淨銷售額增加了7810萬美元，或17.4%，至52750萬美元，相比去年同期的44930萬美元。清潔設備的調整後淨銷售額從44250萬美元增加至52750萬美元，增長了8500萬美元，增幅爲19.2%，主要受地毯抽提器和無繩吸塵器子類的推動。
•廚房和飲料電器的淨銷售額增加了7210萬美元，或21.3%，至41150萬美元，而去年同期爲33930萬美元。經調整的廚房和飲料電器淨銷售額從33810萬美元增加了7330萬美元，或21.7%，從33810萬美元增加到41150萬美元，受歐洲增長和熱烹飪領域持續勢頭的推動。
•食品製備器械的淨銷售額增加了$15540萬，或73.5%，至$36680萬，而在去年同期爲$21150萬。食品製備器械的調整淨銷售額從$20930萬增加了$15750萬，或75.2%，至$36680萬，這得益於我們冰淇淋製造機的強勁銷售以及冷凍飲料器械的推出。
•其他類別的淨銷售額增加了5030萬美元，或71.4％，達到12080萬美元，而去年同期爲7050萬美元。其他類別的調整後淨銷售額增加了5340萬美元，或79.1％，從6750萬美元增至12080萬美元，主要受到個人護理產品和空氣淨化器的推動。 主要受到個人護理產品和空氣淨化器銷售強勁的推動。
毛利潤增加42.6%，達到69500萬美元，佔淨銷售額的48.7%，而2023年第三季度爲48750萬美元，佔淨銷售額的45.5%。調整後的毛利潤增加39.4%，達到70460萬美元，佔調整後淨銷售額的49.4%，而2023年第三季度爲50550萬美元，佔調整後淨銷售額的47.8%。毛利率和調整後的毛利率分別增加了320個點子和160個點子，分別來自於我們供應鏈、採購和成本策略的優化以及匯率期貨的益處，部分抵消了關稅的影響。
研發支出增加了56.2％，達到9480萬元，佔淨銷售額的6.6％，而上年同期爲6070萬元，佔淨銷售額的5.7％。這一增長主要是由於爲支持新產品類別和新市場擴展而發生的增加人員相關開支1270萬元。整體增長還受到原型和測試成本880萬元的增加，專業和諮詢費用增加450萬元以及折舊和攤銷費用增加450萬元的影響。
銷售和營銷支出增加了44.9%，達到30080萬美元，佔淨銷售額的21.1%，相比之下，去年同期爲20760萬美元，佔淨銷售額的19.4%。這一增長主要歸因於廣告相關支出增加了4210萬美元；交付和分銷成本增加了3340萬美元，受到銷量增加的推動，特別是在我們的直銷消費業務中；人員相關費用增加了1450萬美元，以支持新產品推出和拓展新市場；專業和諮詢費用增加了540萬美元；而折舊和攤銷費用減少了440萬美元。
一般和行政費用下降了4.5%，達到11910萬美元，佔淨銷售額的8.3%，而去年同期爲12470萬美元，佔淨銷售額的11.6%。這種減少主要是由於在去年同期產生的與JS Global分離和分配相關的交易成本，爲4150萬美元。這種減少被增加的合法費用抵消，包括涉及某些專利侵權索賠的1350萬美元法律解決儲備以及390萬美元的專業和諮詢費增加。
營業利潤增長90.7%，達到18030萬美元，佔淨銷售額的12.6%，相比之下，去年同期爲9450萬美元，佔淨銷售額的8.8%。調整後的營業利潤增長25.0%，達到23750萬美元，佔調整後淨銷售額的16.7%，相比之下，2023年第三季度爲19010萬美元，佔調整後淨銷售額的18.0%。
淨利潤增加了606.8%，達到13230萬美元，佔淨銷售額的9.3%，而上年同期爲1870萬美元，佔淨銷售額的1.7%。每股攤薄淨利潤增加了623.1%，達到0.94美元，而上年同期爲0.13美元。
調整後的淨利潤增長了28.2%，達到了$17050萬，佔調整後淨銷售額的11.9%，而上一年同期爲$13300萬，佔調整後淨銷售額的12.6%。每股調整後的淨利潤增長了27.4%，達到$1.21，而上一年同期爲$0.95。
調整後的EBITDA增長了25.7%，達到26240萬美元，佔調整後淨銷售額的18.4%，而上年同期爲20870萬美元，佔調整後淨銷售額的19.7%。
2024年9月30日止九個月
淨銷售額增長了30.1%，達到374150萬美元，而去年同期爲287620萬美元。調整後的淨銷售額增長了33.7%，達到374150萬美元，而去年同期爲279870萬美元，按不變的貨幣基礎計算，增長了32.6%。淨銷售額和調整後的淨銷售額的增加源自於我們四個主要產品類別的增長，包括食品製備器具、烹飪和飲料器具、清潔器具以及其他產品，其中包括美容和家居環境產品。
•清潔用品淨銷售額增加了137.5百萬美元，或10.8％，達到141550萬美元，與去年同期的127800萬美元相比。清潔用品調整後淨銷售額從122860萬美元增加了18690萬美元，或15.2％，達到141550百萬美元，主要受地毯擠壓器和機器人等子類別的推動。
•烹飪及飲料電器產品的淨銷售額增加了18130萬美元，或19.3%，達到112040萬美元，而去年同期為93910萬美元。烹飪及飲料電器產品的調整後淨銷售額從93290萬美元增加了18750萬美元，或20.1%，達到112040萬美元，主要受歐洲市場增長的推動。全球增長受到戶外燒烤爐和戶外烤箱在美國和歐洲市場的成功支持。
•食品製備電器的淨銷售額增加了36410萬美元，或77.0%，至83680萬美元，相比去年同期的47270萬美元有所提高。食品製備電器的調整後淨銷售額從46440萬美元增加了37240萬美元，或80.2%，達到83680萬美元，這是因為我們的冰淇淋製造機和迷你攪拌機銷售強勁，特別是我們的便攜式攪拌機。
•其他類別的淨銷售額增加了18230萬美元，增長了97.8%，至36880萬美元，相較於去年同期的18650萬美元。其他類別的調整後淨銷售額增加了19600萬美元，增長了113.5%，從17280萬美元增至3.688億美元，主要是由於護髮產品、我們的FlexBreeze風扇和空氣清淨機的銷售強勁。
毛利潤增加41.8%，達到182250萬美元，佔淨銷售額的48.7%，相比之下去年同期為128500萬美元，佔淨銷售額的44.7%。調整後的毛利潤增加42.5%，達到186040萬美元，佔調整後淨銷售額的49.7%，相比之下去年同期為130590萬美元，佔調整後淨銷售額的46.7%。毛利率和調整後的毛利率增加400和300個基點，部分來自我們供應鏈、採購和成本策略，區域型擴張，以及匯率期貨帶來的好處。
研究和發展費用增加了41.0%，至$25450萬，佔營收的6.8%，相較於去年同期的$18040萬，佔營收的6.3%。這主要是因為員工相關費用增加 $3340萬，主要是由於增加了新產品類別和新市場擴展所需的人手，其中包括 $360萬的股份報酬增加。增加的其餘部分主要是由產品原型和測試成本增加 $2040萬，專業和咨詢費用增加 $1290萬以支持業務整體增長，旅行成本增加 $320萬，消費者洞察計劃增加 $300萬。
銷售和營銷費用增加了44.1%，達到81860萬美元，佔淨銷售額的21.9%，較去年同期的56800萬美元，佔淨銷售額的19.7%，有所增加。這主要是由於廣告相關費用增加了12750萬；送貨和配送成本增加了7910萬，主要是由於銷量增加，特別是在我們的DTC業務中；人事相關費用增加了3890萬，以支持新產品推出和進入新市場，其中包括510萬美元的增量股份償酬；旅行費用增加了400萬；專業和諮詢費用增加了890萬；而折舊和攤銷費用減少了750萬。
總務及行政支出增加17.7%至31040萬美元，佔淨銷售額的8.3%，較去年同期的26370萬美元，佔淨銷售額的9.2%。此增長主要是由於法律費用增加4490萬美元，包括與某些專利侵權索賠相關的1350萬美元法律和解準備金的增加；人員相關費用增加3250萬美元，包括股份報酬增加1420萬 股份報酬增加；專業和諮詢費用增加1730萬美元；科技支援成本增加1190萬美元；信用卡處理和商戶費用增加900萬美元；產品責任和保險費用增加480萬美元；折舊和攤提增加340萬美元；抵消了與JS Global分家和次級上市相關的交易成本減少7650萬美元。
營業收入增長60.9%，達到43900萬美元，佔淨銷售額的11.7%，相較於去年同期的27280萬美元，佔淨銷售額的9.5%。調整後的營業收入增長33.1%，達到58300萬美元，佔調整後淨銷售額的15.6%，相較於去年同期的43810萬美元，佔調整後淨銷售額的15.7%。
淨利潤增加了163.3%，達到31000萬美元，佔淨銷售額的8.3%，相比去年同期的11780萬美元，佔淨銷售額的4.1%。每股攤薄淨利潤增加了158.8%，達到2.20美元，而去年同期爲0.85美元。
調整後的淨利潤增加了32.0%，達到41860萬美元，相當於調整後銷售淨額的11.2%，而去年同期爲31710萬美元，相當於調整後銷售淨額的11.3%。每股調整後的淨利潤增加了30.3%，達到2.97美元，而去年同期爲2.28美元。
調整後的EBITDA增長32.0%，達到66060萬美元，佔調整後淨銷售額的17.7％，而上一年同期的調整後淨銷售額爲50040萬美元，佔17.9％。
資產負債表和現金流量概況
現金及現金等價物減少至12790萬元美元，而截至2023年12月31日爲15410萬元美元。
庫存增長53.8%，達1,076.2百萬美元，比2023年12月31日的699.7百萬美元增加。
總債務，不包括未攤銷的延期融資成本，爲96480萬美元，與2023年12月31日的80490萬美元相比。現有的信貸額度包括81000萬美元的貸款和50000萬美元的循環信貸額度，截至2024年9月30日的可用餘額爲31590萬美元。
2024財年展望
對於2024財年，SharkNinja提高了關鍵指標的展望，現在預計：
•淨銷售額預計較之前預期增加25%至26% 至22%
•調整後的淨銷售額預計較之前預期的22%至24%增加27%至28%。
•每股調整後的淨利潤在4.13美元到4.24美元之間，增長28%至32%，與之前預期的4.05美元到4.21美元，增長26%至31%相比。
•調整後的EBITDA爲92500萬至94500萬美元，比先前預期的91000萬至94000萬美元增加了29%至31%，增長了26%至31%。
•約24%至25%的美國通用會計準則有效稅率。
•稀釋加權平均每股股數約爲14100萬。
•資本支出爲16000萬美元至18000萬美元，主要用於支持新產品推出、科技和工具的增量投資，以支持我司在中國以外地區的採購多元化。
電話會議詳情
定於2024年10月31日（東部時間上午8:30）舉行討論2024年第三季度財務業績的電話會議。可在線觀看電話會議直播，請訪問http://ir.sharkninja.com。有興趣參加直播電話的投資者和分析師請撥打1-833-470-1428或1-404-975-4839，然後輸入確認代碼930420。網絡直播將被存檔，並可供回放。
關於SharkNinja
SharkNinja是家居用品行業的創新領導者，是國際知名品牌Shark和Ninja的創始者。SharkNinja提供最新易用的創新技術，擁有日益增長的Shark清潔和家庭護理產品系列以及Ninja廚房電器系列。產品在全球主要零售商和經銷商銷售。Ninja和Shark是SharkNinja Operating LLC的註冊商標。SharkNinja是JS Global Lifestyle Company Limited(香港：1691)的子公司，JS Global Lifestyle Company Limited是小型家用電器創新領先者。
SharkNinja是一家全球產品設計和科技公司，擁有多樣化的五星級生活解決方案組合，積極影響着全球家庭生活。作爲兩個值得信賴的全球品牌Shark和Ninja的推動下，該公司擁有將顛覆性創新引入市場的成功記錄，並不斷開發一款可以讓消費者受益的產品讓SharkNinja得以進入多個產品領域，推動了顯著的增長和市場份額的提升。總部位於馬薩諸塞州尼德姆鎮，擁有超過3300名員工，該公司的產品在全球各地的重要零售商處以及線上線下銷售，並通過分銷商銷售。欲了解更多信息，請訪問SharkNinja.com。
前瞻性聲明
本新聞稿中包括的關於未來表現和結果、預期、規劃、策略、重點、承諾和其他聲明（包括與我們社會、環境和其他可持續性目標有關的聲明）的非歷史事實的前瞻性聲明，是根據美國聯邦證券法的定義而作出的前瞻性聲明。本新聞稿中關於我們環境和其他可持續性計劃和目標的前瞻性聲明以及其他聲明並不意味着這些聲明對於投資者、我們的業務、運營結果、財務狀況、前景或策略、對我們在可持續發展事項上的影響或其他當事方來說均是重要的，或者必須披露在我們向證券交易委員會（「SEC」）或其他監管機構的備案中。此外，歷史、現有及未來涉及社會、環境和可持續性的相關聲明可能是基於仍在發展的衡量進展的標準、不斷演變的內部控制和流程以及假設，在將來可能會發生變化。前瞻性聲明基於當前的信仰、期望和假設，並受到可能導致實際結果與前瞻性聲明有實質性差異的重大風險、不確定性和情況變化的影響。
本新聞稿包含根據1995年《私人證券訴訟改革法案》意義上的「前瞻性聲明」。這些前瞻性聲明反映了我們關於未來事件、未來業務、財務狀況、經營結果和前景以及2024財年展望的當前觀點。這些聲明通常是通過諸如「可能」、「應該」、「可能」、「預測」、「潛在」、「相信」、「可能會導致」，「期望」、「繼續」、「將」、「預期」、「尋求」、「估計」、「打算」、「規劃」、「預測」、「將」 和「前景」之類的詞語或短語發表的，或這些詞語或短語的否定形式或其他可比較的爲未來或前瞻性質的詞語或短語。這些前瞻性聲明不是歷史事實陳述，而是基於當前預期、評估和關於我們行業及管理層做出的某些假設的投射，其中許多本質上不確定且超出了我們的控制。這些前瞻性聲明受許多已知和未知風險、不確定性和假設的影響，您應該仔細考慮和閱讀，包括但不限於：
•我們有能力維護和加強我們的品牌，爲我們的產品產生並維持持續需求；
•我們有能力推出一系列新產品和產品線延伸，以創造需求；
•我們有效管理未來增長的能力；
•一般經濟狀況和自由消費者支出水平；
•我們擴展到其他消費市場的能力;
•我們有能力以可接受的成本維持產品質量和產品性能；
•我們在市場上與現有和新競爭對手競爭的能力;
•我們供應鏈或供應商出現問題或損失，或無法獲得原材料；
•在全球開展業務所帶來的風險;
•通貨膨脹、原材料成本或供應、能源、運輸和其他必要物資和服務的變化；
•我們招聘、整合和留住高技能人員的能力；
•我們有能力維護、保護和增強我們的知識產權；
•我們有能力安全地維護消費者和其他第三方數據；
•我們有能力遵守持續的監管要求；
•與成爲一家上市公司相關的開支增加;
•我們作爲「紐交所規則」中所定義的「控股公司」的地位；
•我們能夠實現分離預期益處的部分或全部。
•支付任何宣佈的分紅派息。
這些因素的清單不應被視爲詳盡無遺，並應與我們在提交給美國證券交易委員會（SEC）的20-F表格中描述的那些「風險因素」、以及「管理層對財務狀況和經營業績的討論與分析」以及我們向SEC提交的其他文件一起閱讀。我們在一個競爭激烈且迅速變化的環境中運營。新的風險不時出現。我們無法預測所有風險，也無法評估所有因素對我們業務的影響，或者任何因素或因素的組合可能導致實際結果與我們可能做出的任何前瞻性聲明中所包含的結果大不相同的程度。鑑於這些風險、不確定性和假設，在本新聞稿中討論的未來事件和趨勢，以及我們未來的活動水平和業績可能不會發生，實際結果可能明顯而且不利地與在前瞻性聲明中描述或暗示的那些不同。因此，您不應將這些前瞻性聲明中的任何一項視爲我們或任何其他人的陳述或保證，也不應過度依賴任何此類前瞻性聲明。任何前瞻性聲明僅在發表時有效，我們不承擔公開更新或修訂任何前瞻性聲明的任何義務，除非有法律要求。此外，包含「我們相信」等聲明的聲明反映了我們對相關主題的信念和觀點。這些聲明是基於我們在本新聞稿日期可獲得的信息。雖然我們認爲此信息爲這些聲明提供了一個合理的基礎，但此信息可能是有限或不完整的。這些聲明在本質上是不確定的，投資者被警告不要過度依賴這些聲明。我們通過本新聞稿中包含的警示性聲明對我們所有的前瞻性聲明進行了限定。
聯繫方式
投資者關係:
Arvind Bhatia，特許金融分析師
高級副總裁，投資者關係
IR@sharkninja.com
Anna Kate Heller
ICR
SharkNinja@icrinc.com
媒體關係：
簡卡本特
高級副總裁，首席通信官
PR@sharkninja.com
| SHARKNINJA, INC. | |||||||||||
| 簡明的合併資產負債表 | |||||||||||
| （以千計，股票和每股數據除外） | |||||||||||
| （未經審計） | |||||||||||
| 截至 | |||||||||||
2024 年 9 月 30 日 | 2023 年 12 月 31 日 | ||||||||||
| 資產 | |||||||||||
| 流動資產： | |||||||||||
| 現金和現金等價物 | $ | 127,948 | $ | 154,061 | |||||||
| 應收賬款，淨額 | 1,190,410 | 985,172 | |||||||||
| 庫存 | 1,076,246 | 699,740 | |||||||||
| 預付費用和其他流動資產 | 121,721 | 58,311 | |||||||||
| 流動資產總額 | 2,516,325 | 1,897,284 | |||||||||
| 財產和設備，淨額 | 196,002 | 166,252 | |||||||||
| 經營租賃使用權資產 | 149,975 | 63,333 | |||||||||
| 無形資產，淨額 | 466,826 | 477,816 | |||||||||
| 善意 | 834,781 | 834,203 | |||||||||
| 遞延所得稅資產 | 19,713 | 12 | |||||||||
| 其他資產，非流動資產 | 53,703 | 48,170 | |||||||||
| 總資產 | $ | 4,237,325 | $ | 3,487,070 | |||||||
| 負債和股東權益 | |||||||||||
| 流動負債： | |||||||||||
| 應付賬款 | $ | 632,850 | $ | 459,651 | |||||||
| 應計費用和其他流動負債 | 640,947 | 620,333 | |||||||||
| 應納稅款 | 22,025 | 20,991 | |||||||||
| 債務，當前 | 214,344 | 24,157 | |||||||||
| 流動負債總額 | 1,510,166 | 1,125,132 | |||||||||
| 債務，非流動 | 745,975 | 775,483 | |||||||||
| 經營租賃負債，非流動 | 152,100 | 63,043 | |||||||||
| 遞延所得稅負債 | 3,750 | 16,500 | |||||||||
| 其他非流動負債 | 30,795 | 28,019 | |||||||||
| 負債總額 | 2,442,786 | 2,008,177 | |||||||||
| 股東權益： | |||||||||||
普通股，每股面值0.0001美元，授權1,000,000股；截至2024年9月30日和2023年12月31日，已發行和流通的股票分別爲140,219,933股和139,083,369股 | 14 | 14 | |||||||||
| 額外的實收資本 | 1,012,407 | 1,009,590 | |||||||||
| 留存收益 | 780,308 | 470,319 | |||||||||
| 累計其他綜合收益（虧損） | 1,810 | (1,030) | |||||||||
| 股東權益總額 | 1,794,539 | 1,478,893 | |||||||||
| 負債和股東權益總額 | $ | 4,237,325 | $ | 3,487,070 | |||||||
| SHARKNINJA, INC. | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Net sales(1) | $ | 1,426,566 | $ | 1,070,617 | $ | 3,741,452 | $ | 2,876,211 | |||||||||||||||
| Cost of sales | 731,559 | 583,124 | 1,918,929 | 1,591,254 | |||||||||||||||||||
| Gross profit | 695,007 | 487,493 | 1,822,523 | 1,284,957 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 94,808 | 60,691 | 254,457 | 180,430 | |||||||||||||||||||
| Sales and marketing | 300,841 | 207,599 | 818,594 | 568,035 | |||||||||||||||||||
| General and administrative | 119,096 | 124,655 | 310,432 | 263,682 | |||||||||||||||||||
| Total operating expenses | 514,745 | 392,945 | 1,383,483 | 1,012,147 | |||||||||||||||||||
| Operating income | 180,262 | 94,548 | 439,040 | 272,810 | |||||||||||||||||||
| Interest expense, net | (16,916) | (13,003) | (46,482) | (28,523) | |||||||||||||||||||
| Other income (expense), net | 11,031 | (5,865) | 14,968 | (41,315) | |||||||||||||||||||
| Income before income taxes | 174,377 | 75,680 | 407,526 | 202,972 | |||||||||||||||||||
| Provision for income taxes | 42,048 | 56,958 | 97,537 | 85,218 | |||||||||||||||||||
| Net income | $ | 132,329 | $ | 18,722 | $ | 309,989 | $ | 117,754 | |||||||||||||||
| Net income per share, basic | $ | 0.94 | $ | 0.13 | $ | 2.22 | $ | 0.85 | |||||||||||||||
| Net income per share, diluted | $ | 0.94 | $ | 0.13 | $ | 2.20 | $ | 0.85 | |||||||||||||||
| Weighted-average number of shares used in computing net income per share, basic | 140,114,282 | 139,073,181 | 139,818,196 | 139,059,206 | |||||||||||||||||||
| Weighted-average number of shares used in computing net income per share, diluted | 141,305,999 | 139,430,805 | 140,974,062 | 139,179,724 | |||||||||||||||||||
(1) Net sales in our product categories were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Cleaning Appliances | $ | 527,453 | $ | 449,319 | $ | 1,415,488 | $ | 1,277,986 | |||||||||||||||
| Cooking and Beverage Appliances | 411,453 | 339,328 | 1,120,371 | 939,060 | |||||||||||||||||||
| Food Preparation Appliances | 366,834 | 211,461 | 836,782 | 472,685 | |||||||||||||||||||
| Other | 120,826 | 70,509 | 368,811 | 186,480 | |||||||||||||||||||
| Total net sales | $ | 1,426,566 | $ | 1,070,617 | $ | 3,741,452 | $ | 2,876,211 | |||||||||||||||
| SHARKNINJA, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (in thousands) | |||||||||||
| (unaudited) | |||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 309,989 | $ | 117,754 | |||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | 86,870 | 77,394 | |||||||||
| Share-based compensation | 47,341 | 24,502 | |||||||||
| Provision for credit losses | 3,744 | 2,266 | |||||||||
| Non-cash lease expense | 15,963 | 9,688 | |||||||||
| Deferred income taxes, net | (32,420) | 3,905 | |||||||||
| Other | 1,631 | 1,662 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (193,151) | (192,209) | |||||||||
| Inventories | (357,114) | (258,982) | |||||||||
| Prepaid expenses and other assets | (69,477) | 65,508 | |||||||||
| Accounts payable | 162,019 | 343,603 | |||||||||
| Tax payable | 1,034 | 883 | |||||||||
| Operating lease liabilities | (7,428) | (9,280) | |||||||||
| Accrued expenses and other liabilities | (12,050) | (90,914) | |||||||||
| Net cash (used in) provided by operating activities | (43,049) | 95,780 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (95,232) | (70,501) | |||||||||
| Purchase of intangible asset | (6,571) | (6,905) | |||||||||
| Capitalized internal-use software development | (1,100) | (683) | |||||||||
| Cash receipts on beneficial interest in sold receivables | — | 16,777 | |||||||||
| Other investing activities, net | — | (3,051) | |||||||||
| Net cash used in investing activities | (102,903) | (64,363) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of debt, net of issuance cost | 800,915 | ||||||||||
| Repayment of debt | (15,188) | (437,500) | |||||||||
| Net proceeds from borrowings under revolving credit facility | 175,000 | — | |||||||||
| Distribution paid to Former Parent | — | (435,292) | |||||||||
| Recharge from Former Parent for share-based compensation | — | (3,165) | |||||||||
| Net ordinary shares withheld for taxes upon issuance of restricted stock units | (50,011) | — | |||||||||
| Proceeds from shares issued under employee stock purchase plan | 5,487 | — | |||||||||
| Net cash provided by (used in) financing activities | 115,288 | (75,042) | |||||||||
| Effect of exchange rates changes on cash | 4,551 | (4,768) | |||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (26,113) | (48,393) | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 154,061 | 218,770 | |||||||||
| Cash and cash equivalents at end of period | $ | 127,948 | $ | 170,377 | |||||||
Non-GAAP Financial Measures
In addition to the measures presented in our consolidated financial statements, we regularly review other financial measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts, and make strategic decisions.
The key non-GAAP financial measures we consider are Adjusted Net Sales, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income, Adjusted Net Income Per Share, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Net Sales growth on a constant currency basis. These non-GAAP financial measures are used by both management and our Board, together with comparable GAAP information, in evaluating our current performance and planning our future business activities. These non-GAAP financial measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and/or which management considers to be unrelated to our core operations and excludes the financial results from our former Japanese subsidiary, SharkNinja Co., Ltd. (“SNJP”), and our Asia Pacific Region and Greater China ("APAC") distribution channels, both of which were transferred to JS Global Lifestyle Company Limited (“JS Global”) concurrently with the separation (the “Divestitures”), as well as the cost of sales from (i) inventory markups that were eliminated as a result of the transition of certain product procurement functions from a subsidiary of JS Global to SharkNinja concurrently with the separation and (ii) costs related to the transitional Sourcing Services Agreement with JS Global that was entered into in connection with the separation (collectively, the “Product Procurement Adjustment”). Management believes that tracking and presenting these non-GAAP financial measures provides management and the investment community with valuable insight into our ongoing core operations, our ability to generate cash and the underlying business trends that are affecting our performance. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry and to better understand and interpret the results of the ongoing business following the separation and distribution. These non-GAAP financial measures should not be viewed as a substitute for our financial results calculated in accordance with GAAP and you are cautioned that other companies may define these non-GAAP financial measures differently.
SharkNinja does not provide a reconciliation of forward-looking Adjusted Net Income and Adjusted EBITDA to GAAP net income or of Adjusted Net Income Per Share to net income per share, diluted because such reconciliations are not available without unreasonable efforts. This is due to the inherent difficulty in forecasting with reasonable certainty certain amounts that are necessary for such reconciliations, including, in particular, the realized and unrealized foreign currency gains or losses reported within other expense. For the same reasons, we are unable to forecast with reasonable certainty all deductions and additions needed in order to provide forward-looking GAAP net income at this time. The amount of these deductions and additions may be material, and, therefore, could result in forward-looking GAAP net income being materially different or less than forward-looking Adjusted Net Income, Adjusted EBITDA, and Adjusted Net Income Per Share. See “Forward-looking statements” above.
We define Adjusted Net Sales as net sales as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including net sales from our Divestitures. We believe that Adjusted Net Sales is an appropriate measure of our performance because it eliminates the impact of our Divestitures that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Net Sales to the most comparable GAAP measure, net sales, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in thousands, except %) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Net sales | $ | 1,426,566 | $ | 1,070,617 | $ | 3,741,452 | $ | 2,876,211 | |||||||||||||||
Divested subsidiary net sales adjustment(1) | — | (13,196) | — | (77,544) | |||||||||||||||||||
Adjusted Net Sales(2) | $ | 1,426,566 | $ | 1,057,421 | $ | 3,741,452 | $ | 2,798,667 | |||||||||||||||
(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
(2)The following tables reconcile Adjusted Net Sales to net sales per product category, for the periods presented:
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||
| ($ in thousands, except %) | Net sales | Divested subsidiary adjustment | Adjusted Net Sales | Net sales | Divested subsidiary adjustment | Adjusted Net Sales | |||||||||||||||||||||||||||||
| Cleaning Appliances | $ | 527,453 | $ | — | $ | 527,453 | $ | 449,319 | $ | (6,838) | $ | 442,481 | |||||||||||||||||||||||
| Cooking and Beverage Appliances | 411,453 | — | 411,453 | 339,328 | (1,190) | 338,138 | |||||||||||||||||||||||||||||
| Food Preparation Appliances | 366,834 | — | 366,834 | 211,461 | (2,133) | 209,328 | |||||||||||||||||||||||||||||
| Other | 120,826 | — | 120,826 | 70,509 | (3,035) | 67,474 | |||||||||||||||||||||||||||||
| Total net sales | $ | 1,426,566 | $ | — | $ | 1,426,566 | $ | 1,070,617 | $ | (13,196) | $ | 1,057,421 | |||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||
| ($ in thousands, except %) | Net sales | Divested subsidiary adjustment | Adjusted Net Sales | Net sales | Divested subsidiary adjustment | Adjusted Net Sales | |||||||||||||||||||||||||||||
| Cleaning Appliances | $ | 1,415,488 | $ | — | $ | 1,415,488 | $ | 1,277,986 | $ | (49,392) | $ | 1,228,594 | |||||||||||||||||||||||
| Cooking and Beverage Appliances | 1,120,371 | — | 1,120,371 | 939,060 | (6,161) | 932,899 | |||||||||||||||||||||||||||||
| Food Preparation Appliances | 836,782 | — | 836,782 | 472,685 | (8,289) | 464,396 | |||||||||||||||||||||||||||||
| Other | 368,811 | — | 368,811 | 186,480 | (13,702) | 172,778 | |||||||||||||||||||||||||||||
| Total net sales | $ | 3,741,452 | $ | — | $ | 3,741,452 | $ | 2,876,211 | $ | (77,544) | $ | 2,798,667 | |||||||||||||||||||||||
We define Adjusted Gross Profit as gross profit as adjusted to exclude certain items that we do not consider indicative of our ongoing operating performance following the separation, including the net sales and cost of sales from our Divestitures and the cost of sales from the Product Procurement Adjustment. We define Adjusted Gross Margin as Adjusted Gross Profit divided by Adjusted Net Sales. We believe that Adjusted Gross Profit and Adjusted Gross Margin are appropriate measures of our operating performance because each eliminates the impact our Divestitures and certain other adjustments that do not relate to the ongoing performance of our business.
The following table reconciles Adjusted Gross Profit and Adjusted Gross Margin to the most comparable GAAP measure, gross profit and gross margin, respectively, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in thousands, except %) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Net sales | $ | 1,426,566 | $ | 1,070,617 | $ | 3,741,452 | $ | 2,876,211 | |||||||||||||||
| Cost of sales | (731,559) | (583,124) | (1,918,929) | (1,591,254) | |||||||||||||||||||
| Gross profit | 695,007 | 487,493 | 1,822,523 | 1,284,957 | |||||||||||||||||||
Gross margin | 48.7% | 45.5% | 48.7% | 44.7% | |||||||||||||||||||
Divested subsidiary net sales adjustment(1) | — | (13,196) | — | (77,544) | |||||||||||||||||||
Divested subsidiary cost of sales adjustment(2) | — | 7,628 | — | 45,116 | |||||||||||||||||||
Product Procurement Adjustment(3) | 9,571 | 23,574 | 37,876 | 53,369 | |||||||||||||||||||
| Adjusted Gross Profit | $ | 704,578 | $ | 505,499 | $ | 1,860,399 | $ | 1,305,898 | |||||||||||||||
| Adjusted Net Sales | $ | 1,426,566 | $ | 1,057,421 | $ | 3,741,452 | $ | 2,798,667 | |||||||||||||||
| Adjusted Gross Margin | 49.4% | 47.8% | 49.7% | 46.7% | |||||||||||||||||||
(1)Adjusted for net sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
(2)Adjusted for cost of sales from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
(3)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SharkNinja (Hong Kong) Company Limited (“SNHK”), and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
We define Adjusted Operating Income as operating income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) amortization of certain acquired intangible assets, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including operating income from our Divestitures and cost of sales from our Product Procurement Adjustment.
The following table reconciles Adjusted Operating Income to the most comparable GAAP measure, operating income, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Operating income | $ | 180,262 | $ | 94,548 | $ | 439,040 | $ | 272,810 | |||||||||||||||
Share-based compensation(1) | 13,785 | 21,337 | 47,341 | 24,502 | |||||||||||||||||||
Litigation costs(2) | 29,035 | 3,965 | 42,691 | 4,600 | |||||||||||||||||||
Amortization of acquired intangible assets(3) | 4,896 | 4,897 | 14,690 | 14,690 | |||||||||||||||||||
Transaction-related costs(4) | — | 41,455 | 1,342 | 76,549 | |||||||||||||||||||
Product Procurement Adjustment(5) | 9,571 | 23,574 | 37,876 | 53,369 | |||||||||||||||||||
Divested subsidiary operating income adjustment(6) | — | 287 | — | (8,456) | |||||||||||||||||||
| Adjusted Operating Income | $ | 237,549 | $ | 190,063 | $ | 582,980 | $ | 438,064 | |||||||||||||||
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.
(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.
(3)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculating Adjusted Operating Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.
(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(6)Adjusted for operating income from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
We define Adjusted Net Income as net income excluding (i) share-based compensation, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) amortization of certain acquired intangible assets, (v) certain transaction-related costs, (vi) certain items that we do not consider indicative of our ongoing operating performance following the separation, including net income from our Divestitures and cost of sales from our Product Procurement Adjustment, (vii) the tax impact of the adjusted items and (viii) certain withholding taxes.
Adjusted Net Income Per Share is defined as Adjusted Net Income divided by the diluted weighted average number of ordinary shares.
The following table reconciles Adjusted Net Income and Adjusted Net Income Per Share to the most comparable GAAP measures, net income and net income per share, diluted, respectively, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in thousands, except share and per share amounts) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Net income | $ | 132,329 | $ | 18,722 | $ | 309,989 | $ | 117,754 | |||||||||||||||
Share-based compensation(1) | 13,785 | 21,337 | 47,341 | 24,502 | |||||||||||||||||||
Litigation costs(2) | 29,035 | 3,965 | 42,691 | 4,600 | |||||||||||||||||||
Foreign currency (gains) losses, net(3) | (11,156) | 3,862 | (9,569) | 43,479 | |||||||||||||||||||
Amortization of acquired intangible assets(4) | 4,896 | 4,897 | 14,690 | 14,690 | |||||||||||||||||||
Transaction-related costs(5) | — | 41,455 | 1,342 | 76,549 | |||||||||||||||||||
Product Procurement Adjustment(6) | 9,571 | 23,574 | 37,876 | 53,369 | |||||||||||||||||||
Tax impact of adjusting items(7) | (7,996) | (4,704) | (25,711) | (30,686) | |||||||||||||||||||
Tax withholding adjustment(8) | — | 19,474 | — | 19,474 | |||||||||||||||||||
Divested subsidiary net income adjustment(9) | — | 394 | — | (6,586) | |||||||||||||||||||
Adjusted Net Income | $ | 170,464 | $ | 132,976 | $ | 418,649 | $ | 317,145 | |||||||||||||||
Net income per share, diluted | $ | 0.94 | $ | 0.13 | $ | 2.20 | $ | 0.85 | |||||||||||||||
Adjusted Net Income Per Share | $ | 1.21 | $ | 0.95 | $ | 2.97 | $ | 2.28 | |||||||||||||||
Diluted weighted-average number of shares used in computing net income per share and Adjusted Net Income Per Share(10) | 141,305,999 | 139,430,805 | 140,974,062 | 139,179,724 | |||||||||||||||||||
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.
(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.
(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.
(4)Represents amortization of acquired intangible assets that we do not consider normal recurring operating expenses, as the intangible assets relate to JS Global’s acquisition of our business. We exclude amortization charges for these acquisition-related intangible assets for purposes of calculated Adjusted Net Income, although revenue is generated, in part, by these intangible assets, to eliminate the impact of these non-cash charges that are significantly impacted by the timing and valuation of JS Global’s acquisition of our business, as well as the inherent subjective nature of purchase price allocations. Of the amortization of acquired intangible assets, $0.9 million for the three months ended September 30, 2024 and 2023, and $2.8 million for the nine months ended September 30, 2024 and 2023, was recorded to research and development expenses, and $4.0 million for the three months ended September 30, 2024 and 2023, and $11.9 million for the nine months ended September 30, 2024 and 2023, was recorded to sales and marketing expenses.
(5)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(6)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(7)Represents the income tax effects of the adjustments included in the reconciliation of net income to Adjusted Net Income determined using the tax rate of 22.0%, which approximates our effective tax rate, excluding (i) divested subsidiary net income adjustment described in footnote (9), and (ii) certain share-based compensation costs and separation and distribution-related costs that are not tax deductible.
(8)Represents withholding taxes associated with the cash dividend paid to JS Global in connection with the separation and related refinancing.
(9)Adjusted for net income (loss) from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023.
(10)In calculating net income per share and Adjusted Net Income Per Share, we used the number of shares transferred in the separation and distribution for the denominator for all periods prior to completion of the separation and distribution on July 31, 2023.
We define EBITDA as net income excluding: (i) interest expense, net, (ii) provision for income taxes and (iii) depreciation and amortization. We define Adjusted EBITDA as EBITDA excluding (i) share-based compensation cost, (ii) certain litigation costs, (iii) foreign currency gains and losses, net, (iv) certain transaction-related costs and (v) certain items that we do not consider indicative of our ongoing operating performance following the separation, including Adjusted EBITDA from our Divestitures and cost of sales from our Product Procurement Adjustment. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Adjusted Net Sales. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are appropriate measures because they facilitate a comparison of our operating performance on a consistent basis from period to period that, when viewed in combination with our results according to GAAP, we believe provide a more complete understanding of the factors and trends affecting our business than GAAP measures alone.
The following table reconciles EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most comparable GAAP measure, net income, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
($ in thousands, except %) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Net income | $ | 132,329 | $ | 18,722 | $ | 309,989 | $ | 117,754 | |||||||||||||||
| Interest expense, net | 16,916 | 13,003 | 46,482 | 28,523 | |||||||||||||||||||
| Provision for income taxes | 42,048 | 56,958 | 97,537 | 85,218 | |||||||||||||||||||
| Depreciation and amortization | 29,828 | 25,602 | 86,870 | 77,394 | |||||||||||||||||||
| EBITDA | 221,121 | 114,285 | 540,878 | 308,889 | |||||||||||||||||||
Share-based compensation(1) | 13,785 | 21,337 | 47,341 | 24,502 | |||||||||||||||||||
Litigation costs(2) | 29,035 | 3,965 | 42,691 | 4,600 | |||||||||||||||||||
Foreign currency losses (gains), net(3) | (11,156) | 3,862 | (9,569) | 43,479 | |||||||||||||||||||
Transaction-related costs(4) | — | 41,455 | 1,342 | 76,549 | |||||||||||||||||||
Product Procurement Adjustment(5) | 9,571 | 23,574 | 37,876 | 53,369 | |||||||||||||||||||
Divested subsidiary Adjusted EBITDA adjustment(6) | — | 264 | — | (11,020) | |||||||||||||||||||
| Adjusted EBITDA | $ | 262,356 | $ | 208,742 | $ | 660,559 | $ | 500,368 | |||||||||||||||
| Adjusted Net Sales | $ | 1,426,566 | $ | 1,057,421 | $ | 3,741,452 | $ | 2,798,667 | |||||||||||||||
| Adjusted EBITDA Margin | 18.4% | 19.7% | 17.7% | 17.9% | |||||||||||||||||||
(1)Represents non-cash expense related to awards issued from the SharkNinja and JS Global equity incentive plans.
(2)Represents litigation costs incurred and related settlements for certain patent infringement claims, false advertising claims, and any related settlement costs, which were recorded in general and administrative expenses.
(3)Represents foreign currency transaction gains and losses recognized from the remeasurement of transactions that were not denominated in the local functional currency, including gains and losses related to foreign currency derivatives not designated as hedging instruments.
(4)Represents certain costs incurred related to the separation and distribution from JS Global and the secondary offering transactions.
(5)Represents cost of sales incurred related to the Product Procurement Adjustment. As a result of the separation, we purchase 100% of our inventory from one of our subsidiaries, SNHK, and no longer purchase inventory from a purchasing office wholly owned by JS Global. Thus, the markup on all inventory purchased subsequent to the separation is completely eliminated in consolidation. As a result of the separation, we pay JS Global a sourcing service fee to provide value-added sourcing services on a transitional basis under a Sourcing Services Agreement.
(6)Adjusted for Adjusted EBITDA from SNJP and the APAC distribution channels for the three and nine months ended September 30, 2023, as if such Divestitures occurred on January 1, 2023. The divested subsidiary Adjusted EBITDA adjustment represents net (loss) income from our Divestitures excluding interest expense, income tax expense, depreciation and amortization expense and foreign currency gains and losses recorded at the subsidiary level.
We refer to growth rates in Adjusted Net Sales on a constant currency basis so that results can be viewed without the impact of fluctuations in foreign currency exchange rates. These amounts are calculated by translating
current year results at prior year average exchange rates. We believe elimination of the foreign currency translation impact provides useful information in understanding and evaluating trends in our operating results.