“We are very excited to share our third quarter 2020 results with the investor community. 2020 has been a “banner year” for
“We have a strong presence in the highest growth segments of animal health with e-commerce and direct-to-consumer sales representing ~60% of consolidated revenue,” continued
Operational Updates
- Continued to grow the business throughout the COVID-19 recession, primarily in e-commerce, direct-to-consumer and international (sold through domestic distributors).
- Successfully integrating the TruPet and Halo subsidiaries.
- Received approval in
June 2020 from theChinese Ministry of Agriculture to ship 15 diets directly to mainlandChina . Net sales inChina were$1 .8mm and$3 .5mm for Q3 and year to date, respectively, and expect annual revenue inChina to be ~$7mm and growing. We expect total international annual revenue to be ~$12mm. - Consolidated warehouse operations in
October 2020 into one location, just outside ofNashville, TN. - Raised more than $20mm of equity in
October 2020 to support growth and de-lever the balance sheet, including more than $11mm invested by Company insiders.
Financial Results for the Third Quarter and Year-to-Date 2020
- Year-to-date 2020 Net Sales of
$33 .3mm - Third quarter 2020 Net Sales of
$11 .1mm - Year-to-date 2020 Loss from operations of
$24 .3mm - Third quarter 2020 Loss from operations of
$3 .3mm - Year-to-date 2020 Adjusted EBITDA of (
$1 .1mm) - Third quarter 2020 Adjusted EBITDA of (
$0 .4mm)
Conference Call and Webcast Information
The Company will host a conference call and audio webcast on
Event: | Better Choice Third Quarter 2020 Financial Results Conference Call |
Date: | |
Time: | |
Live Call: | +1-877-407-4018 ( |
Webcast: | http://public.viavid.com/index.php?id=142446 |
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
(Dollars in thousands, except share and per share amounts)
Nine Months Ended | Three Months Ended | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Net sales | $ | 33,302 | $ | 11,567 | $ | 11,135 | $ | 3,932 | |||||||||||
Cost of goods sold | 20,567 | 7,178 | 6,681 | 3,096 | |||||||||||||||
Gross profit | 12,735 | 4,389 | 4,454 | 836 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
General and administrative | 23,298 | 12,031 | 3,648 | 4,856 | |||||||||||||||
Share-based compensation | 7,047 | 6,708 | 1,543 | 2,496 | |||||||||||||||
Sales and marketing | 6,203 | 8,452 | 2,396 | 2,856 | |||||||||||||||
Customer service and warehousing | 500 | 854 | 148 | 303 | |||||||||||||||
Total operating expenses | 37,048 | 28,045 | 7,735 | 10,511 | |||||||||||||||
Loss from operations | (24,313 | ) | (23,656 | ) | (3,281 | ) | (9,675 | ) | |||||||||||
Other expense (income): | |||||||||||||||||||
Interest expense, net | 7,268 | 165 | 2,537 | 41 | |||||||||||||||
Loss on extinguishment of debt | 88 | — | 88 | — | |||||||||||||||
Loss on acquisitions | — | 147,376 | — | (2,612 | ) | ||||||||||||||
Change in fair value of warrant derivative liability | (2,118 | ) | (886 | ) | (4,213 | ) | (1,079 | ) | |||||||||||
Total other expense (income), net | 5,238 | 146,655 | (1,588 | ) | (3,650 | ) | |||||||||||||
Net and comprehensive loss | (29,551 | ) | (170,311 | ) | (1,693 | ) | (6,025 | ) | |||||||||||
Preferred dividends | 103 | 70 | 35 | 43 | |||||||||||||||
Net and comprehensive loss available to common stockholders | $ | (29,654 | ) | $ | (170,381 | ) | $ | (1,728 | ) | $ | (6,068 | ) | |||||||
Weighted average number of shares outstanding, basic and diluted | 48,809,740 | 28,624,230 | 48,961,447 | 43,575,010 | |||||||||||||||
Loss per share, basic and diluted | $ | (0.61 | ) | $ | (5.95 | ) | $ | (0.04 | ) | $ | (0.14 | ) |
Non-GAAP Measures
The Company presents Adjusted EBITDA 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, Adjusted EBITDA and Pro Forma Adjusted EBITDA | |||||||||||||||||
Nine Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||
2020 | 2020 | 2020 | 2020 | ||||||||||||||
Net and comprehensive loss | $ | (29,654 | ) | $ | (1,728 | ) | $ | (18,438 | ) | $ | (9,488 | ) | |||||
Depreciation and amortization | 1,298 | 432 | 409 | 457 | |||||||||||||
Interest expense, net | 7,268 | 2,537 | 2,430 | 2,301 | |||||||||||||
EBITDA | (21,088 | ) | 1,241 | (15,599 | ) | (6,730 | ) | ||||||||||
Non-cash share-based compensation(a) | 7,047 | 1,543 | 3,020 | 2,484 | |||||||||||||
Non-cash warrant expense(b) | 9,986 | - | 7,390 | 2,594 | |||||||||||||
Non-cash dividends(c ) | 103 | 34 | 34 | 35 | |||||||||||||
Non-cash change in fair value of warrant derivative liability | (2,118 | ) | (4,213 | ) | 3,474 | (1,379 | ) | ||||||||||
Loss on extinguishment of debt | 88 | 88 | - | - | |||||||||||||
Acquisition related expenses/(income)(d) | 1,236 | (57 | ) | 616 | 677 | ||||||||||||
Non-cash effect of purchase accounting on cost of goods sold(e) | 894 | - | - | 894 | |||||||||||||
Offering relating expenses(f) | 987 | 338 | 334 | 315 | |||||||||||||
Non-recurring expenses(g) | 1,719 | 658 | 79 | 982 | |||||||||||||
COVID-19 expenses(h) | 30 | 5 | 25 | - | |||||||||||||
Adjusted EBITDA | $ | (1,117 | ) | $ | (362 | ) | $ | (627 | ) | $ | (128 | ) | |||||
(a) Reflects 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) Reflects non-cash expenses related to stock purchase warrants associated with a contract that was subsequently terminated. | |||||||||||||||||
(c) Reflects non-cash expenses related dividends that were settled in | |||||||||||||||||
(d) 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. | |||||||||||||||||
(e) 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. | |||||||||||||||||
(f) Reflects administrative costs associated with the registration of previously issued common shares and other debt and equity financing transactions. | |||||||||||||||||
(g) Reflects contract termination costs and the write off of a prepaid asset related to the termination of a contract entered into during 2019, including | |||||||||||||||||
(h) Reflects cleaning, sanitizing, protective equipment and hazard compensation related to COVID-19. |
During
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:
407-491-4498
dave@redchip.com
Source:
2020 GlobeNewswire, Inc., source