“We are very excited to share our first quarter 2021 results with the investor community. Our performance in the first quarter of 2021 reflects a strong start to the year, which we have been able to deliver while simultaneously focusing on medium and longer-term strategic initiatives. I am very excited to discuss our exciting plans for growth and the progress we have already made as we continue to execute our 2021 plan and look forward to 2022,” said
“We have a strong foundation for growth and our omni-channel approach allows us to market products purpose-built for success in specific channels while simultaneously building our brand across all channels,” continued
Operational Updates
- Onboarded a new Executive Vice President of Digital Sales,
Jenny Condon , and a new Vice President of Supply Chain and Logistics,Alex Vournas . - Continue to navigate the COVID-19 pandemic while minimizing cash burn and establishing a strong base for growth in our core channels: E-Commerce, direct-to-consumer (“DTC”), Brick & Mortar and International.
- Integrated the Halo and TruDog brands, with identified opportunities for future innovation and consolidation.
- Increased investment in long-term brand marketing to coincide with planned pet specialty re-launch in Q1 2022.
- Delivered
$6.4m of online net sales in Q1 2021, with ~55% of online purchases made via recurring subscription. - Secured
$25.6m of aggregate minimum purchases with Asian distribution partners fromJanuary 1, 2021 throughDecember 31, 2022 . Net sales inChina were$1.1m in Q1 2021, representing 43% of total international net sales of$2.5m . - Closed
$12.0m credit facility withWintrust Bank inJanuary 2021 , completing the refinancing of the bridge loan and reducing annual cash interest expense by~$2m . - Raised
$4.1m of cash through an equity raise inJanuary 2021 ahead of planned Summer 2021 Uplist to major US Exchange.
Financial Results for the First Quarter 2021
- First Quarter 2021 Gross Sales of
$13.4m - First Quarter 2021 Net Sales of
$10.8m - First Quarter 2021 Loss from operations of
$5.1m - First Quarter 2021 Adjusted EBITDA of
$(1.1)m
Conference Call and Webcast Information
The Company will host a conference call and audio webcast on
Event: | Better Choice First Quarter 2021 Financial Results Conference Call |
Date: | |
Time: | |
Live Call: | +1-855-327-6837(U.S.Toll-Free)or+1-631-891-4304(International) |
Webcast: | http://public.viavid.com/index.php?id=144846 |
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until
Unaudited Consolidated Statements of Operations and Comprehensive Loss
(Dollars in thousands, except share and per share amounts)
Three Months Ended | |||||||
2021 | 2020 | ||||||
Net sales | $ | 10,830 | $ | 12,226 | |||
Cost of goods sold | 6,556 | 8,069 | |||||
Gross profit | 4,274 | 4,157 | |||||
Operating expenses: | |||||||
General and administrative | 4,551 | 8,246 | |||||
Share-based compensation | 2,525 | 2,484 | |||||
Sales and marketing | 2,336 | 1,959 | |||||
Total operating expenses | 9,412 | 12,689 | |||||
Loss from operations | (5,138 | ) | (8,532 | ) | |||
Other expense (income): | |||||||
Interest expense | 835 | 2,301 | |||||
Loss on extinguishment of debt | 394 | — | |||||
Change in fair value of warrant liabilities | 6,483 | (1,379 | ) | ||||
Total other expense, net | 7,712 | 922 | |||||
Net and comprehensive loss | (12,850 | ) | (9,454 | ) | |||
Preferred dividends | — | 34 | |||||
Net and comprehensive loss available to common stockholders | $ | (12,850 | ) | $ | (9,488 | ) | |
Weighted average number of shares outstanding, basic and diluted | 57,525,054 | 48,526,396 | |||||
Loss per share, basic and diluted | $ | (0.23 | ) | $ | (0.20 | ) |
Non-GAAP Measures
The Company presents 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, gross margin, and our other GAAP results.
The following table presents a reconciliation of net and comprehensive loss, the closest GAAP financial measure, to EBITDA and Adjusted EBITDA for each of the periods indicated.
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
(Dollars in thousands)
Three Months Ended | Three Months Ended | ||||||
2021 | 2020 | ||||||
Net and comprehensive loss | $ | (12,850 | ) | $ | (9,488 | ) | |
Depreciation and amortization | 411 | 457 | |||||
Interest expense | 835 | 2,301 | |||||
EBITDA | (11,604 | ) | (6,730 | ) | |||
Non-cash share-based compensation, warrant expense and dividends (a) | 2,590 | 5,113 | |||||
Non-cash change in fair value of warrant liability and warrant derivative liability | 6,483 | (1,379 | ) | ||||
Loss on extinguishment of debt | 394 | — | |||||
Acquisition related expenses/(income) (b) | — | 677 | |||||
Non-cash effect of purchase accounting and inventory write-off on cost of goods sold (c) | — | 894 | |||||
Offering relating expenses (d) | 196 | 315 | |||||
Non-recurring and other expenses (e) | 856 | 982 | |||||
Adjusted EBITDA | $ | (1,085 | ) | $ | (128 | ) | |
(a) Reflects non-cash expenses related to equity compensation awards and stock purchase warrants for the three months ended | |||||||
(b) Reflects costs incurred related to acquisition and integration activities that will not recur and operating expenses that will not recur due to acquisition related synergies. | |||||||
(c) Reflects non-cash expense recognized in cost of goods sold related to the step-up of inventory required under the accounting rules for business combinations. | |||||||
(d) Reflects administrative costs associated with the registration of previously issued common shares and other debt and equity financing transactions. | |||||||
(e) Reflects non-recurring severance costs of |
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
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