Waitr Holdings Inc. (Nasdaq:WTRH) (“Waitr” and “Company”), a
leader in on-demand food ordering and delivery, today reported
financial results for its fiscal 2019 third quarter ended September
30, 2019.
“We made progress in the third quarter streamlining our
operations and making improvements that consistently create a
better customer and restaurant partner experience while also
setting us up to reduce expenses now and in the future. During the
quarter, we started implementing changes that are expected to
result in an incremental $25 to $30 million of annual savings in FY
2020. We remain dedicated to stabilizing the business in terms of
cash flow and charting a clear path towards profitability,” said
Adam Price, Chief Executive Officer of Waitr.
Third Quarter 2019 Financial Highlights
- Revenue for the third quarter of 2019 increased 153% to $49.2
million compared to $19.4 million in the third quarter of 2018.
Revenue related to the Bite Squad Merger totaled $24.0 million for
the third quarter of 2019.
- Net loss for the third quarter of 2019 was $220.1 million, or a
loss of $2.89 per diluted share, compared to a loss of $6.5
million, or a loss of $0.64 per diluted share, in the third quarter
of 2018. Net loss for the third quarter of 2019 included $192.1
million of goodwill and intangible asset impairment charges and
$2.2 million of non-cash stock compensation expenses.
- Adjusted EBITDA1 for the third quarter of 2019 was a loss of
$15.4 million compared to a loss of $2.5 million in the third
quarter of 2018.
Third Quarter 2019 Key Business Metrics and Updates
- Gross Food Sales2 for the third quarter of 2019 increased to
$161.4 million compared to $77.7 million in the third quarter of
2018. Gross Food Sales related to the Bite Squad Merger totaled
$74.0 million for the third quarter of 2019.
- Active Diners for the third quarter of 2019 increased to 2.4
million compared to 843,000 for the third quarter of 2018.
- During third of quarter 2019, Waitr made progress on its “Path
to Profitability” initiative with the intent of strengthening the
business through realizing synergies from the Bite Squad
combination and aligning the teams and cost structure of the
combined organization under one set of guiding principles and
objectives. During the quarter, the Company realized approximately
$2 million of cost savings from this initiative and more recently,
began implementing additional changes to improve annual operating
cash flows by an incremental $25 to $30 million in Fiscal Year
2020.
1
Adjusted EBITDA is a non-GAAP financial
measure. A reconciliation of GAAP net loss to Adjusted EBITDA is
included in the accompanying financial data. See also “Non-GAAP
Financial Measure,” included herein.
2
Gross Food Sales represents food and
beverage receipts, plus taxes, prepaid gratuities and diner
fees.
Strategic Alternative Review Conclusion
The Company announced today that its Board of Directors
(“Board”) has completed the strategic alternative review process
first announced on August 8, 2019. The Board has concluded that the
Company will best serve the interests of its stockholders at this
time by focusing on executing its strategic plan as an independent
public company. The Company remains open to potential value
creating opportunities.
Third Quarter 2019 Earnings Conference Call
The Company will host a conference call to discuss third quarter
2019 financial results today at 5:00 p.m. ET. The conference call
will be webcast live from the Company’s investor relations website
at http://investors.waitrapp.com. The call can also be accessed
live over the phone by dialing (877) 705-6003, or for international
callers (201) 493-6725. A replay will be available one hour after
the call and can be accessed by dialing (844) 512-2921 or (412)
317-6671 for international callers; the conference ID is 13696231.
That replay will be available until Thursday, November 14,
2019.
About Waitr Holdings Inc.
Founded in 2013 and based in Lafayette, Louisiana, Waitr is a
leader in on-demand food ordering and delivery. Waitr, along with
recently acquired food delivery company Bite Squad, connects local
restaurants to hungry diners in underserved U.S. markets. Together
they are the most convenient way to discover, order and receive
great food from the best local restaurants and national chains. As
of September 30, 2019, Waitr and Bite Squad operated in small and
medium sized markets in the United States in over 700 cities.
Non-GAAP Financial Measure
Adjusted EBITDA is a financial measure that is not calculated in
accordance with generally accepted accounting principles in the
United States of America (“GAAP”).
We define Adjusted EBITDA as net loss adjusted to exclude
interest expense, income taxes, depreciation and amortization,
acquisition and restructuring costs, stock-based compensation
expense, impairments of intangible assets and goodwill and gains
and losses associated with derivatives and debt extinguishments and
when applicable, other expenses that do not reflect our core
operations. We use this non-GAAP financial measure as a key
performance measure because we believe it facilitates operating
performance comparisons from period to period by excluding
potential differences primarily caused by variations in capital
structures, tax positions, the impact of acquisitions and
restructuring, the impact of depreciation and amortization expense
on our fixed assets and the impact of stock-based compensation
expense. Adjusted EBITDA is not a measurement of our financial
performance under GAAP and should not be considered as an
alternative to performance measures derived in accordance with
GAAP.
See “Non-GAAP Financial Measure/Adjusted EBITDA” below for a
reconciliation of net loss to Adjusted EBITDA for the three and
nine months ended September 30, 2019 and 2018.
Cautionary Note Concerning Forward-Looking Statements
This press release contains “forward-looking statements,” as
defined by the federal securities laws, including statements
regarding the future performance of the Company. Forward-looking
statements reflect Waitr’s current expectations and projections
about future events at the time, and thus involve uncertainty and
risk. The words “believe,” “expect,” “anticipate,” “will,” “could,”
“would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,”
“potential,” “continue,” and the negatives of these words and other
similar expressions generally identify forward-looking statements.
Such forward-looking statements are subject to various risks and
uncertainties, including those described under the section entitled
“Risk Factors” in Waitr’s Annual Report on Form 10-K, filed with
the SEC on March 15, 2019, as such factors may be updated from time
to time in Waitr’s periodic filings with the SEC, which are
accessible on the SEC’s website at www.sec.gov. Accordingly, there
are or will be important factors that could cause actual outcomes
or results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and
should be read in conjunction with the other cautionary statements
that are included in this release and in Waitr’s filings with the
SEC. While forward-looking statements reflect Waitr’s good faith
beliefs, they are not guarantees of future performance. Waitr
disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying
assumptions or factors, new information, data or methods, future
events or other changes after the date of this press release,
except as required by applicable law. You should not place undue
reliance on any forward-looking statements, which are based only on
information currently available to Waitr (or to third parties
making the forward-looking statements).
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
REVENUE
$
49,201
$
19,431
$
148,575
$
48,000
COSTS AND EXPENSES:
Operations and support (1)
37,289
14,022
113,170
35,056
Sales and marketing (1)
15,953
3,947
41,615
9,116
Research and development
1,920
791
6,009
1,988
General and administrative (1)
12,817
6,312
44,115
17,667
Depreciation and amortization
4,851
400
13,791
902
Goodwill impairment
119,212
—
119,212
—
Intangible and other asset impairments
72,917
—
72,935
—
Loss on disposal of assets
11
—
26
8
TOTAL COSTS AND EXPENSES
264,970
25,472
410,873
64,737
LOSS FROM OPERATIONS
(215,769
)
(6,041
)
(262,298
)
(16,737
)
OTHER EXPENSES (INCOME) AND LOSSES
(GAINS), NET
Interest expense
2,775
441
6,570
903
Interest income
(297
)
(1
)
(877
)
(2
)
Gain on derivatives
—
(9
)
—
(336
)
Other expenses
1,827
39
1,654
1
NET LOSS BEFORE INCOME TAXES
(220,074
)
(6,511
)
(269,645
)
(17,303
)
Income tax expense
30
4
60
38
NET LOSS
$
(220,104
)
$
(6,515
)
$
(269,705
)
$
(17,341
)
LOSS PER SHARE:
Basic and diluted
$
(2.89
)
$
(0.64
)
$
(3.77
)
$
(1.72
)
Weighted average common shares
outstanding – basic and diluted
76,145,317
10,145,527
71,071,777
10,064,560
(1) Certain prior period amounts have been
reclassified to conform to the current period’s presentation. The
Company has revised the classification of certain employee-related
wages and payroll taxes associated with such wages to better align
the statement of operations line items with departmental
responsibilities and management of operations.
KEY BUSINESS METRICS
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Active Diners (as of period end)
2,393,063
842,533
2,393,063
842,533
Average Daily Orders
48,155
24,300
53,579
20,600
Gross Food Sales (dollars in
thousands)
$
161,390
$
77,692
$
514,835
$
197,505
Average Order Size (in dollars)
$
36.43
$
35.14
$
36.12
$
35.24
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
(Unaudited)
September 30,
December 31,
2019
2018 (1)
ASSETS
CURRENT ASSETS
Cash
$
52,198
$
209,340
Accounts receivable, net
5,664
3,687
Capitalized contract costs, current
—
1,869
Prepaid expenses and other current
assets
8,474
4,548
TOTAL CURRENT ASSETS
66,336
219,444
Property and equipment, net
4,474
4,551
Capitalized contract costs, noncurrent
—
827
Goodwill
106,734
1,408
Intangible assets, net
26,430
261
Other noncurrent assets
529
61
TOTAL ASSETS
$
204,503
$
226,552
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
CURRENT LIABILITIES
Accounts payable
$
5,420
$
1,827
Restaurant food liability
6,989
208
Accrued payroll
7,034
3,055
Short-term loans
3,193
658
Deferred revenue, current
767
3,314
Income tax payable
30
25
Other current liabilities
15,107
4,508
TOTAL CURRENT LIABILITIES
38,540
13,595
Long-term debt
120,884
80,985
Accrued workers’ compensation
liability
542
908
Deferred revenue, noncurrent
212
1,356
Other noncurrent liabilities
325
217
TOTAL LIABILITIES
160,503
97,061
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value
8
5
Additional paid in capital
384,628
200,417
Accumulated deficit
(340,636
)
(70,931
)
TOTAL STOCKHOLDERS’ EQUITY
44,000
129,491
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
204,503
$
226,552
(1) Certain prior period amounts have been
reclassified to conform to the current period’s presentation.
CONSOLIDATED CASH FLOW
STATEMENTS
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2019
2018
Cash flows from operating
activities:
Net loss
$
(269,705
)
$
(17,341
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Non-cash interest expense
3,346
252
Non-cash advertising expense
379
377
Stock-based compensation
6,747
3,481
Equity issued in exchange for services
90
90
Loss on disposal of assets
26
8
Depreciation and amortization
13,791
902
Goodwill impairment
119,212
—
Intangible and other asset impairments
72,935
—
Amortization of capitalized contract
costs
1,614
1,023
Gain on derivatives
—
(336
)
Other non-cash expense
—
74
Imputed interest income
(39
)
—
Changes in assets and liabilities:
Accounts receivable
(248
)
(1,384
)
Capitalized contract costs
(3,585
)
(1,910
)
Prepaid expenses and other current
assets
(2,803
)
(2,268
)
Accounts payable
2,640
1,486
Restaurant food liability
5,851
52
Deferred revenue
(3,691
)
1,889
Income tax payable
5
7
Accrued payroll
2,853
1,983
Accrued workers’ compensation
liability
(366
)
155
Other current liabilities
(474
)
5,518
Other noncurrent liabilities
111
(47
)
Net cash used in operating
activities
(51,311
)
(5,989
)
Cash flows from investing
activities:
Purchases of property and equipment
(1,493
)
(1,836
)
Acquisition of Bite Squad, net of cash
acquired
(192,568
)
—
Other acquisitions
(395
)
(11
)
Collections on notes receivable
72
—
Internally developed software
(1,096
)
—
Proceeds from sale of property and
equipment
28
—
Net cash used in investing
activities
(195,452
)
(1,847
)
Cash flows from financing
activities:
Proceeds from line of credit
—
4,000
Proceeds from convertible notes
issuance
—
1,410
Waitr shares redeemed for cash
(10
)
—
Proceeds from issuance of stock
50,002
—
Equity issuance costs
(4,179
)
—
Proceeds from Additional Term Loans
42,080
—
Proceeds from short-term loans
5,032
2,172
Payments on short-term loans
(2,509
)
(862
)
Proceeds from exercise of stock
options
4
11
Taxes paid related to net settlement on
stock-based compensation
(799
)
—
Net cash provided by financing
activities
89,621
6,731
Net change in cash
(157,142
)
(1,105
)
Cash, beginning of period
209,340
3,947
Cash, end of period
$
52,198
$
2,842
Supplemental disclosures of cash flow
information:
Cash paid during the period for state
income taxes
$
30
$
31
Cash earned during the period for
interest
838
—
Cash paid during the period for
interest
3,224
88
Supplemental disclosures of non-cash
investing and financing activities:
Services receivable
$
—
$
1,000
Stock issued as consideration in Bite
Squad acquisition
126,574
—
Stock issued in connection with Additional
Term Loans
3,884
—
Non-cash gain on debt extinguishment
1,897
—
Seller-financed payables related to other
acquisitions
801
—
Non-cash investments in other
acquisitions
801
142
Debt assumed in IndiePlate asset
acquisition
—
60
Bifurcated embedded derivatives
—
87
Discount on convertible notes due to
beneficial conversion feature
—
1,529
NON-GAAP FINANCIAL
MEASURE
ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
NET LOSS
$
(220,104
)
$
(6,515
)
$
(269,705
)
$
(17,341
)
Interest expense
2,775
441
6,570
903
Income taxes
30
4
60
38
Depreciation and amortization
4,851
400
13,791
902
Goodwill impairment
119,212
—
119,212
—
Stock-based compensation
2,225
1,329
6,837
3,571
Gain on derivatives
—
(9
)
—
(336
)
Intangible and other asset impairments
72,917
—
72,935
—
Business combination related
expenditures
—
1,870
6,956
5,473
Costs associated with reduction in
force
658
—
1,026
—
Accrued legal contingency
2,000
—
2,000
—
ADJUSTED EBITDA
$
(15,436
)
$
(2,480
)
$
(40,318
)
$
(6,790
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107006041/en/
Investors WaitrIR@icrinc.com or Media Liz Sniegocki Director of
Communications liz.sniegocki@waitrapp.com
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