EPS Growth of 28% Year Over Year to
Adjusted EBITDA1 Growth of 27% Year Over Year to
Adjusted EBITDA Margin1 of (18)%, a 299 Basis Point Expansion Year Over Year
FIRST QUARTER 2024 HIGHLIGHTS
- Net revenue of
$7.9 million - Gross margin of 33%
- Net loss improved 19% to
$(2.8) million - Earnings (loss) per share ("EPS") improved 28% to
$(3.60) per share - Adjusted EBITDA1 improved 27% year over year to
$(1.4) million - Adjusted EBITDA margin1 improved 299 basis points year over year to (18)%
During the first quarter of 2024,
1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. Reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.
Unaudited Condensed Consolidated Statements of Operations (Dollars in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net sales | $ | 7,903 | $ | 9,237 | |||
Cost of goods sold | 5,289 | 5,996 | |||||
Gross profit | 2,614 | 3,241 | |||||
Operating expenses: | |||||||
Selling, general and administrative | 5,080 | 6,496 | |||||
Total operating expenses | 5,080 | 6,496 | |||||
Loss from operations | (2,466 | ) | (3,255 | ) | |||
Other expenses: | |||||||
Interest expense, net | (362 | ) | (229 | ) | |||
Total other expense, net | (362 | ) | (229 | ) | |||
Net loss before income taxes | (2,828 | ) | (3,484 | ) | |||
Income tax expense | 2 | — | |||||
Net loss available to common stockholders | $ | (2,830 | ) | $ | (3,484 | ) | |
Weighted average number of shares outstanding, basic | 786,745 | 692,615 | |||||
Weighted average number of shares outstanding, diluted | 786,745 | 692,615 | |||||
Net loss per share available to common stockholders, basic | $ | (3.60 | ) | $ | (5.03 | ) | |
Net loss per share available to common stockholders, diluted | $ | (3.60 | ) | $ | (5.03 | ) | |
Unaudited Condensed Consolidated Balance Sheets (Dollars in thousands, except share amounts) | |||||||
Assets | |||||||
Cash and cash equivalents | $ | 3,876 | $ | 4,455 | |||
Accounts receivable, net | 4,340 | 4,354 | |||||
Inventories, net | 5,201 | 6,611 | |||||
Prepaid expenses and other current assets | 1,169 | 812 | |||||
Total Current Assets | 14,586 | 16,232 | |||||
Fixed assets, net | 198 | 230 | |||||
Right-of-use assets, operating leases | 106 | 120 | |||||
405 | — | ||||||
Other assets | 149 | 155 | |||||
Total Assets | $ | 15,444 | $ | 16,737 | |||
Liabilities & Stockholders’ Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 7,478 | $ | 6,928 | |||
Accrued and other liabilities | 1,505 | 2,085 | |||||
Line of credit | 2,171 | 1,741 | |||||
Term loan, net | 3,054 | 2,881 | |||||
Operating lease liability | 58 | 57 | |||||
Total Current Liabilities | 14,266 | 13,692 | |||||
Non-current Liabilities | |||||||
Operating lease liability | 52 | 67 | |||||
Total Non-current Liabilities | 52 | 67 | |||||
Total Liabilities | 14,318 | 13,759 | |||||
Stockholders’ Equity | |||||||
Common Stock, | 34 | 32 | |||||
Additional paid-in capital | 325,264 | 324,288 | |||||
Accumulated deficit | (324,172 | ) | (321,342 | ) | |||
Total Stockholders’ Equity | 1,126 | 2,978 | |||||
Total Liabilities and Stockholders’ Equity | $ | 15,444 | $ | 16,737 | |||
Non-GAAP Measures |
Adjusted EBITDA
We define Adjusted EBITDA as EBITDA further adjusted to eliminate the impact of certain items that we do not consider indicative of our core operations. Adjusted EBITDA is determined by adding the following items to net (loss) income: interest expense, tax expense, depreciation and amortization, share-based compensation, warrant expense, impairment of goodwill, loss on disposal of assets, change in fair value of warrant liabilities, gain or loss on extinguishment of debt, equity and debt offering expenses and other non-recurring expenses.
We present Adjusted EBITDA as it is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We believe that the disclosure of Adjusted EBITDA is useful to investors as this non-GAAP measure forms the basis of how our management team reviews and considers our operating results. By disclosing this non-GAAP measure, we believe that we create for investors a greater understanding of and an enhanced level of transparency into the means by which our management team operates our company. We also believe this measure can assist investors in comparing our performance to that of other companies on a consistent basis without regard to certain items that do not directly affect our ongoing operating performance or cash flows.
Adjusted EBITDA does not represent cash flows from operations as defined by GAAP. Adjusted EBITDA has limitations as a financial measure and you should not consider it in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net (loss) income, gross margin, and our other GAAP results.
The following table presents a reconciliation of net loss, the closest GAAP financial measure, to EBITDA and Adjusted EBITDA for each of the periods indicated (in thousands):
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net loss available to common stockholders | $ | (2,830 | ) | $ | (3,484 | ) | |
Interest expense, net | 362 | 229 | |||||
Income tax expense | 2 | — | |||||
Depreciation and amortization | 35 | 424 | |||||
EBITDA | (2,431 | ) | (2,831 | ) | |||
Non-cash share-based compensation (a) | 518 | 861 | |||||
Loss on disposal of assets | — | 11 | |||||
Transaction related (b) | 323 | — | |||||
Non-recurring strategic branding initiatives (c) | 26 | — | |||||
Non-recurring and other expenses (d) | 164 | 47 | |||||
Adjusted EBITDA | $ | (1,400 | ) | $ | (1,912 | ) | |
(a) Non-cash expenses related to equity compensation awards. Share-based compensation is an important part of the Company's compensation strategy and without our equity compensation plans, it is probable that salaries and other compensation related costs would be higher. | |||||||
(b) Transaction-related legal fees and professional fees related to single occurrence business matters. | |||||||
(c) Single occurrence expenses related to marketing agency and design, strategic re-branding initiatives, Elevate® launch, product innovation and reformulations. | |||||||
(d) Other single occurrence expenses such as legal settlements, employee severance, executive recruitment, transition of our dry kibble co-manufacturing supplier, and other non-recurring fees. | |||||||
About
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Some or all of the results anticipated by these forward-looking statements may not be achieved. Further information on the Company’s risk factors is contained in our filings with the
Company Contact:
Investor Contact:
T: 212-896-1254
Valter@KCSA.com
Source:
2024 GlobeNewswire, Inc., source