F45 Training Holdings Inc.

Good afternoon. Thank you for attending the F45 Training Holdings Incorporated Quarter 2 2021 Earnings Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the conference over to your host, Bruce Williams, Managing Director with F45 Training Holdings. Thank you.

Good afternoon, everyone. And thank you for joining the call to discuss F45 training second quarter results, which we released this afternoon. It can be found on the investor relations section of our website at F45training.com. Today's call will be hosted by Chief Executive Officer Adam Gilchrist and Chief Financial Officer Chris Payne. Before we get started, I want to remind everyone that management's remarks on this call may contain forward-looking statements within the meaning of the private securities litigation reform act of 1995 that are based on current management expectations. These may include without limitations, predictions, expectations, targets, or estimates, including regarding our anticipated financial performance and actual results could differ materially from those mentioned. These forward-looking statements also involve substantial risks and uncertainties, some of which may be outside of our control that could cause actual results to differ materially from those expressed in or implied by such statements. These factors and uncertainties, among others, are discussed in our filings with the SEC. We encourage you to review these filings for a discussion of these factors, including our quarterly report on Form 10Q. In our earnings release, you should not place undue reliance on these forward-looking statements. speak only as of today and we undertake no obligation to update or revise them for any new information. This call will also contain certain non-GAAP financial measures, which we believe are useful supplemental measures that assist in evaluating our ability to generate earnings, provide consistency and comparability with our past performance, and facilitate period-to-period comparison of our core operating results and the results of peer companies. Reconciliations of these nine GAAP measures to the most comparable GAAP measures and definitions of these indicators are included in our quarterly report on Form 10-Q and in our earnings release. Now, I would like to turn the call over to Ab.

Thank you, Bruce. And thank you, everyone, for joining us today for our call as a public company. I want to start off by saying that we are thrilled to enter this next chapter of our journey. I'm very proud of what the S45 team has accomplished over the last few months and the strong results we delivered in the second quarter. For those of you who are not already familiar with our business, S45 is the fastest-growing fitness franchise with a mission to create a leading global fitness training and lifestyle brand. We offer functional 45-minute workouts that are high-intensity interval training-based, with sessions that we believe are the world's best workout. We deliver our workouts through our digitally connected global network of studios operating in 65 countries. And we've built a differentiated technology-enabled platform that allows us to create and distribute the workouts to our franchise base every day of the week at massive scale. Our unique platform has helped drive our rapid growth. It also helps promote the success of our franchisees through standardisation of our world's best workout, and it enables us to deliver results to our members with this incredible workout. F45 had a very strong second quarter, underscored by a record 554 new franchises sold, with 68 net new studios opening during the quarter, system-wide same-store sales growth of 126%, total revenue growth of 54% to $26.8 million, and an adjusted EBITDA growth of 7% to $10.7 million. Despite challenges posed by the COVID-19 pandemic, we grew our footprint and experienced minimal permanent closures during 2020, which really underscores the resilience of our business model. At the end of the second quarter, 2021, we had over 2,800 total franchises sold and over 1,500 total studios open in 65 different countries. As of June 30, 2021, 91% of our network had reopened. Our differentiated approach to fitness is firmly rooted in three pillars of our DNA. Innovation, motivation, and most importantly, results. Starting with innovation. Innovation is at the core of everything we do. We are dedicated to driving new innovations that... to elevate the f45 training experience and further our position as a global fitness training and lifestyle brand we are able to distinguish ourselves from competitors through such innovations including our technology enabled distribution platform and our proprietary fitness algorithm which configures movements from our content library containing thousands of exercises into new workout plans ensuring that virtually no two workouts are ever the same. Second pillar is motivation. We believe the foundation for any effective fitness program is motivation. and we motivate our members through a combination of positivity, inclusivity and teamwork, which builds communities and encourages our members to view each as a sanctuary. The last key pillar is results. Supported by the sustainability of our workouts over time, we strive to help our members achieve and maintain results by focusing on creating a sustainable fitness program designed to encourage members to visit studios multiple times per week over the course of their long-term fitness journey. Now let's talk about growth. We have a significant footprint expansion opportunity both in the United States and across the rest of the world. Starting with the US, we continue to believe that there is a significant long-term opportunity to meaningfully expand our franchise studio footprint. As of June 30, 2021, we had 1,379 franchises sold and 556 open studios in the U.S. Based on our white space analysis, we believe there is long-term studio potential for us to open over 7,000 studios in the U.S., Outside our core markets of the US and Australia, we have demonstrated the portability of our brand and franchise model in 65 countries. We have designed our studios to be easily deployed in both developed and emerging markets and to drive continued growth in both under-penetrated existing markets and new markets. Based on our global white space analysis, we see potential for approximately 16,000 studios outside the US. Let me also take a moment to touch on a few of our growth drivers that we're really excited about. Multi-unit franchise systems is the first that I'll touch on. The majority of our franchisees today consist of owner-operators that manage single locations. Going forward, we intend to seek further opportunities to develop multi-unit franchise systems with select financial partners. As of June 30, 2021, approximately 51% of our franchises sold were owned by multi-unit franchisees, up from approximately 40% as of the end of 2019. which really highlights the strong market demand for multi-unit franchise opportunities and their ability to sell to existing franchisees. Secondly, what are our new channels? We believe there are significant opportunities to expand into new channels and we are actively pursuing potential opportunities to partner with major universities, high schools, corporations and military facilities. We currently have 29 studios located in major university campuses in the US. And in June 2021, we opened our first studio in a government military base in Miramar, California. Thirdly, we're also looking at new target demographics, and we believe there is a significant opportunity to create workout programs that enable us to target a broader range of consumer demographic groups. We have also recently developed a new fitness concept in Australia called FS8, which integrates three popular methods in the health and fitness industry, the remixing of Pilates, yoga, and tone to create a new workout style. In addition, we have additional concepts in development, including Malibu Crew, Functional Fitness Studio Clubhouse targeting men over the age of 50, as well as Avalon House, a studio sanctuary for women of a similar age. As you just heard, there's tremendous opportunities for growth across our business. I'm thrilled by the great teams we have built at both the corporate and the franchisee level. We have an amazing management team who is focused on executing our growth strategy and continuing to drive shareholder value. Our franchise partners are well capitalised and committed to growing the businesses. And I believe that we have developed a platform that can be one of the most powerful franchise systems in the world. With that, I'll turn it over to Chris to go over our financial results.