Kaspien Holdings Inc. Reports Fiscal Second Quarter 2021 Results

Kaspien Holdings Inc. Reports Fiscal Second Quarter 2021 Results

Strong Response to Overall Industry Headwinds Supported by Diversified, Flexible Supply Chain

Consistent Financial Performance Supported by 50 Basis Point Increase in Overall GMV, 33% Increase in Subscription GMV, and 16% Increase in Subscription Monthly Recurring Revenue

72% Year-Over-Year Growth on Non-Amazon Marketplaces Driven by Success on the Target Marketplace and Other Emerging Channels

SPOKANE, Wash., Sept. 14, 2021 /PRNewswire/ — Kaspien Holdings Inc. (NASDAQ: KSPN) (“Kaspien” or the “Company”), a number one e-commerce market development platform, at this time reported monetary outcomes for the fiscal second quarter ended July 31, 2021.

Kaspien Logo (PRNewsfoto/Kaspien Holdings Inc.)

Recent Operational Highlights

  • Fiscal second quarter 2021 gross merchandise worth (“GMV”) elevated 50 foundation factors to $59.0 million, in comparison with $58.7 million within the comparable year-ago interval. Subscription GMV elevated 33% to $24.9 million (42.1% of complete GMV), in comparison with $18.7 million (31.9% of complete GMV) within the comparable year-ago interval.

  • Leveraged diversified, versatile provide chain construction to successfully mitigate world provide challenges and inflationary worth will increase. Among different strategic responses, Kaspien efficiently carried out a extra sturdy direct-to-consumer success mannequin, using regional warehousing areas to attenuate gaps in lead instances throughout the provision chain.

  • Released Sponsored Brands Video Campaign Management on Kaspien’s Amazon promoting software program, AdManager. Sponsored Brands Video permits customers to automate optimizations, modify all key phrases without delay by way of a centralized key phrases desk, and spotlight a given product’s distinctive promoting proposition higher than another advert sort on Amazon.

  • AdManager was chosen because the winner of the “Marketing Automation Innovation Award” within the fourth annual MarTech Breakthrough Awards program. As Kaspien’s Amazon promoting software program, AdManager high quality tunes a model’s Amazon pay-per-click (PPC) advertising and marketing machine to drive unprecedented outcomes, rising gross sales whereas slicing prices to maximise profitability.

  • Joined the Russell Microcap® Index. In place for one yr, inclusion within the Russell Microcap® Index means automated inclusion within the applicable development and worth fashion indexes. Russell indexes are extensively utilized by funding managers and institutional traders for index funds and as benchmarks for lively funding methods.

Management Commentary
“In the fiscal second quarter we responded capably to a difficult macroeconomic surroundings experiencing world provide chain challenges and inflationary worth will increase, which is a testomony to the resiliency of our working mannequin in addition to the versatile, diversified provide chain construction we proactively constructed and have leveraged throughout this time,” mentioned Kaspien CEO Kunal Chopra. “In latest months we have efficiently mobilized our groups to determine a extra sturdy direct-to-consumer success mannequin by using our regional warehousing areas to attenuate gaps in lead instances throughout the provision chain; this response additionally offered a greater expertise for our model companions who had been beforehand reliant on Amazon FBA. Despite these constraints, we have been in a position to drive a 50-basis level enhance in total GMV, 33% enhance in subscription GMV, and a 16% enhance in subscription month-to-month recurring income in the course of the interval.

“Our non-Amazon marketplaces are additionally persevering with to carry out effectively, registering 72% development as a bunch, largely pushed by success on our new and rising Target+ Program. We additionally made vital platform upgrades as a part of our ongoing dedication to being a one-stop-shop for all issues model administration. This quarter, we carried out reporting capabilities in our Platform Dashboard, improved Product Targeting Management, added Sponsored Brand Video Management to our AdManager software program, and developed a brand new Partner Central Rapid Prototype, all enhancements that place us effectively for continued associate success sooner or later. Looking forward, whereas we anticipate these industry-wide challenges to persist, we will likely be investing within the coming months to fulfill the anticipated development in demand in the course of the upcoming vacation season. Our focus over the long run will likely be to proceed rising total GMV because the main indicator of the success of our enterprise whereas additionally shifting our combine to extra worthwhile subscriptions and increasing into different marketplaces.”

Fiscal Second Quarter 2021 Financial Results
Results examine 2021 fiscal second quarter ended July 31, 2021 to 2020 fiscal second quarter ended August 1, 2020 except in any other case indicated.

  • Net income decreased 18% to $34.9 million from $42.3 million within the comparable year-ago interval. The lower in web income was primarily attributable to ongoing provide challenges within the Company’s Fulfillment by Amazon (“FBA”) US section, which have been offset by continued development within the Company’s different marketplaces.

  • Gross revenue decreased 17% to $8.8 million or 25.3% of web income from $10.7 million or 25.3% of web income within the comparable year-ago interval. The lower in gross revenue was primarily attributable to a discount in web income on the Amazon US platform. Gross margin year-over-year remained flat regardless of a decline in merchandise margin charge on account of the leveraging of success charges and warehousing and freight bills. The desk beneath summarizes the year-over-year comparability of gross margin:

Thirteen Weeks Ended

Twenty-six Weeks Ended

July 31,

August 1,

July 31,

August 1,

(quantities in hundreds)

2021

2020

2021

2020

Merchandise margin

$

15,936

$

19,447

$

34,656

$

33,901

% of web income

45.7%

46.0%

45.9%

45.9%

Fulfillment charges

(5,394)

(6,867)

(11,843)

(11,865)

Warehousing and freight

(1,708)

(1,894)

(4,182)

(3,434)

Gross revenue

$

8,835

$

10,685

$

18,631

$

18,602

% of web income

25.3%

25.3%

24.7%

25.2%

  • Selling, General & Administrative (“SG&A”) bills decreased 9% to $10.2 million or29.3% of web income from $11.2 million or 26.4% of web income within the comparable year-ago interval. The lower in SG&A bills was primarily attributable to a $1.2 million lower in promoting bills associated to the decline in web income.

  • Loss from operations was $1.4 million, in comparison with a loss from operations of $493,000 within the comparable year-ago interval. The enhance in working loss was the results of the decline in web income, partially offset by a lower in price of sale and SG&A bills.

  • Net earnings was $82,000, or $0.03 per diluted share, in comparison with a web lack of $899,000, or $0.49 per diluted share, within the comparable year-ago interval. The enchancment to web earnings was pushed by a discount in SG&A bills in addition to $1.9 million profit ensuing from the Company’s Paycheck Protection Program (“PPP”) mortgage being forgiven in the course of the interval.

  • Adjusted EBITDA loss (a non-GAAP metric reconciled beneath) was $754,000, in comparison with adjusted EBITDA of $23,000 within the comparable year-ago interval.

  • As of July 31, 2021, the Company had $2.6 million in money, in comparison with $1.8 million as of January 30, 2021 and $3.3 million as of August 1, 2020.

  • As of July 31, 2021, the Company had no borrowings underneath its credit score facility and had $10.1 million out there for borrowing.

Fiscal First Half 2021 Financial Results
Results examine six months ended July 31, 2021 to 6 months ended August 1, 2020 except in any other case indicated.

  • Net income elevated 2% to $75.5 million from $73.9 million within the comparable year-ago interval. This enhance in web income was pushed by improved efficiency from non-Amazon marketplaces and the subscriptions section, which was offset by ongoing provide challenges within the Company’s FBA US section.

  • Gross revenue was $18.6 million or 24.7% of web income, in comparison with $18.6 million or 25.2% of web income over the comparable year-ago interval. The lower in gross margin was a results of elevated warehousing and freight prices, pushed by a rise in gross sales and world provide chain challenges. The desk beneath summarizes the year-over-year comparability of gross margin:

Twenty-Six Weeks Ended

July 31,

August 1,

(quantities in hundreds)

2021

2020

Merchandise margin

$

34,656

$

33,901

% of web income

45.9%

45.9%

Fulfillment charges

(11,843)

(11,865)

Warehousing and freight

(4,182)

(3,434)

Gross revenue

$

18,631

$

18,602

% of web income

24.7%

25.2%

  • Loss from operations totaled $2.2 million, an enchancment from $5.7 million within the comparable year-ago interval. The enchancment in working outcomes was the results of greater web income and discount in SG&A bills.

  • Net loss was $1.3 million, in comparison with a lack of $6.3 million within the comparable year-ago interval. The enchancment to web loss was pushed by a discount in SG&A bills in addition to $1.9 million profit ensuing from the Company’s PPP mortgage being forgiven.

Key Performance Indicators (KPIs)
Unless in any other case specified, KPI knowledge has been recorded as of fiscal quarter finish (July 31, 2021).

  • Fiscal second quarter 2021 GMV elevated 50 foundation factors to $59.0 million, in comparison with $58.7 million within the comparable year-ago interval. Subscription GMV elevated 33% to $24.9 million (42.1% of complete GMV), in comparison with $18.7 million (31.9% of complete GMV) within the comparable year-ago interval.

  • Fiscal second quarter 2021 GMV per lively associate elevated 3% to $75,000 from $72,000 within the second quarter of fiscal 2020. The Company expects this metric to steadily develop over time as lively companions derive extra worth from the Kaspien platform, resulting in better associate gross sales and elevated engagement throughout extra product strains.

  • Total lively associate rely for interval ended July 31, 2021 was roughly 792, together with 655 retail companions and 136 subscription (Agency and SaaS) companions. In help of the Company’s give attention to maximizing GMV per lively associate, Kaspien frequently opinions and updates associate counts to optimize its use of assets on higher-value, lively companions. The Company’s subscriptions associate base as of July 31, 2021 elevated 27% in comparison with the comparable year-ago interval.

  • Subscription lifetime worth to buyer acquisition price (“LTV:CAC”) ratio as of July 31, 2021 was 3.3x with a median payback interval of 8.0 months. The sequential change was largely attributable to investments in buyer acquisition, which ought to translate to development in subsequent quarters. As subscription companions proceed to mature and undertake extra options of the Kaspien platform, the Company expects these metrics to enhance over time.

  • Retail lifetime worth to buyer acquisition price as of July 31, 2021 was 9.5x with a median payback interval of 6.1 months. The enhance in retail is because of the extra mature enterprise seeing longer partnership tenures given the longer working historical past.

  • During the fiscal second quarter, subscription month-to-month recurring income (“MRR”) elevated roughly 16% to $138,000 in comparison with $109,000 on the finish of the comparable year-ago interval.

  • Retail section gross income per associate for the fiscal second quarter decreased 8% to $52,000 from $57,000 within the comparable year-ago interval.

Conference Call
Kaspien will maintain a convention name at this time, Tuesday, September 14, 2021 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to debate these outcomes.

Company administration will host the decision, adopted by a question-and-answer interval.

U.S. dial-in quantity: 844-602-0380
International quantity: 862-298-0970

Please name the convention phone quantity 5-10 minutes previous to the beginning time. An operator will register your title and group. If you will have any issue connecting with the convention name, please contact Gateway Investor Relations at 949-574-3860.

The convention name will likely be broadcast dwell and out there for replay right here and by way of the investor relations part of the corporate’s web site.

A replay of the convention name will likely be out there after 7:30 p.m. Eastern time by September 28, 2021.

Toll-free replay quantity: 877-481-4010
International replay quantity: 919-882-2331
Replay ID: 42618

Kaspien plans to file its annual Form 10-Q by September 14, 2021 in accordance with the SEC submitting deadlines.

About Kaspien
Kaspien Holdings Inc. (f/ok/a Trans World Entertainment Corporation) (NASDAQ: KSPN) is a number one e-commerce market development platform, providing an increasing suite of software program and providers to assist manufacturers develop on Amazon, Walmart, Target, eBay, and different on-line marketplaces. Founded in 1972 as a brick-and-mortar retailer and rebranded as Kaspien in 2020, the Company has spent the final decade constructing and using proprietary applied sciences for model safety, advertising and marketing optimization, and success effectivity to generate fast income development for its companions. Through modern methods and best-in-class applied sciences, Kaspien has earned the belief of many main manufacturers, together with 3M, Strider Bikes, and ZippyPaws. For extra data, go to kaspien.com.

Non-GAAP Financial Measures
Adjusted EBITDA is outlined as web loss, adjusted to exclude: (i) earnings tax expense; (ii) Other (earnings) loss; (iii) curiosity expense; and (iv) depreciation expense. Our methodology of calculating adjusted EBITDA might differ from different issuers and accordingly, this measure is probably not akin to measures utilized by different issuers. We use adjusted EBITDA to judge our personal working efficiency and as an integral a part of our planning course of. We current adjusted EBITDA as a supplemental measure as a result of we imagine such a measure is helpful to traders as an affordable indicator of working efficiency. We imagine this measure is a monetary metric utilized by many traders to check firms. This measure shouldn’t be a acknowledged measure of monetary efficiency underneath GAAP in the United States and shouldn’t be thought of as an alternative to working earnings (losses), web earnings (loss) from persevering with operations or money flows from working actions, as decided in accordance with GAAP.

Thirteen Weeks Ended

Twenty-Six Weeks Ended

July 31,

August 1,

July 31,

August 1,

(quantities in hundreds)

2021

2020

2021

2020

Net loss

$ 82

$ (899)

$ (1,335)

$ (6,306)

Income tax expense (profit)

46

46

Other (earnings) loss

(1,963)

(1,963)

Interest expense

461

406

1,015

634

Loss from operations

(1,375)

(493)

(2,237)

(5,672)

Depreciation expense

621

516

1,224

1,007

Adjusted EBITDA

$ (754)

$ 23

$ (1,013)

$ (4,665)

About Key Performance Indicators
Gross Merchandise Value (“GMV”) is the whole worth of merchandise bought over a given time interval by a customer-to-customer change web site. For Kaspien, it’s the measurement of merchandise worth bought throughout all channels and companions inside the Kaspien platform.

Lifetime Value (“LTV”) is the common worth of a Kaspien associate over the time period of their engagement on the Kaspien platform.

Customer Acquisition Cost (“CAC”) is the all-in price associated to buying a brand new buyer (associate) into the Kaspien platform. This refers back to the assets and prices incurred to accumulate new clients together with all wages and advantages related to enterprise growth and advertising and marketing efforts driving new enterprise, the portion of inbound advertising and marketing bills associated to new enterprise, and all software program associated bills for our enterprise growth and advertising and marketing infrastructure.

Average payback interval is a time-based calculation utilizing the common month-to-month income recognition for a Kaspien associate to cowl the related prices to accumulate that buyer.

Monthly Recurring Revenue (“MRR”) is the measurement of Kaspien’s subscriptions income stream on a month-to-month foundation calculated at a given second in time. Revenues which are recurring in nature present further predictability into future monetary outcomes.

Forward-Looking Statements
This press launch accommodates forward-looking statements inside the which means of the Private Securities Litigation Reform Act of 1995. Certain statements on this communication are forward-looking statements. The statements contained herein that aren’t statements of historic reality might embrace forward-looking statements that contain a variety of dangers and uncertainties.

We have used the phrases “anticipate”, “imagine”, “may”, “estimate”, “anticipate”, “intend”, “might”, “plan”, “predict”, “mission”, and related phrases and phrases, together with references to assumptions, on this doc to establish forward-looking statements. These forward-looking statements are made based mostly on administration’s expectations and beliefs regarding future occasions and are topic to uncertainties and elements that might trigger precise outcomes to vary materially from the outcomes expressed within the statements. The following elements are amongst those who might trigger precise outcomes to vary materially from the Company’s forward-looking statements: danger of disruption of present plans and operations of Kaspien and the potential difficulties in buyer, provider and worker retention; the end result of any authorized proceedings that could be instituted in opposition to the Company; the Company’s stage of debt and associated restrictions and limitations, sudden prices, costs, bills, or liabilities; the Company’s capacity to function as a going-concern; deteriorating financial circumstances and macroeconomic elements; the affect of the COVID-19 pandemic; and different dangers described within the Company’s filings with the SEC, similar to its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-Okay.

The reader ought to remember the fact that any forward-looking assertion made by us on this doc, or elsewhere, pertains solely as of the date on which we make it. New dangers and uncertainties come up from time-to-time and it is not possible for us to foretell these occasions or how they could have an effect on us. In mild of those dangers and uncertainties, it is best to remember the fact that any forward-looking statements made on this doc or elsewhere won’t happen.

Company Contact
Ed Sapienza
Chief Financial Officer
509-202-4261
[email protected]

Investor Relations Contact
Gateway Investor Relations
Matt Glover and Tom Colton
949-574-3860
[email protected]

-Financial Tables to Follow-

KASPIEN HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in hundreds, besides per share quantities)

Thirteen Weeks Ended

Twenty-six Weeks Ended

July 31,

% to Net
Revenue

August 1,

% to Net
Revenue

July 31,

% to Net
Revenue

August 1,

% to Net
Revenue

2021

2020

2021

2020

Net income

$ 34,890

$ 42,296

$ 75,507

$ 73,885

Cost of gross sales

26,055

74.7%

31,611

74.7%

56,876

75.3%

55,283

74.8%

Gross revenue

8,835

25.3%

10,685

25.3%

18,631

24.7%

18,602

25.2%

Selling, basic and administrative bills

10,210

29.3%

11,178

26.4%

20,868

27.6%

24,274

32.9%

Loss from operations

(1,375)

-3.9%

(493)

-1.2%

(2,237)

-3.0%

(5,672)

-7.7%

Interest expense

461

1.3%

406

1.0%

1,015

1.3%

634

0.9%

Other (earnings) expense

(1,963)

-5.6%

0.0%

(1,963)

-2.6%

0.0%

Income (loss) earlier than earnings tax expense

128

0.4%

(899)

-2.1%

(1,289)

-1.7%

(6,306)

-8.5%

Income tax expense

46

0.1%

0.0%

46

0.1%

0.0%

Net earnings (loss)

$ 82

0.2%

$ (899)

-2.1%

$ (1,335)

-1.8%

$ (6,306)

-8.5%

BASIC AND DILUTED INCOME PER SHARE:

Basic earnings (loss) per widespread share

$ 0.03

$ (0.49)

$ (0.56)

$ (3.46)

Weighted common variety of widespread shares
excellent – fundamental

2,491

1,825

2,404

1,823

Diluted earnings (loss) per widespread share

$ 0.03

$ (0.49)

$ (0.56)

$ (3.46)

Weighted common variety of widespread shares
excellent – diluted

2,538

1,825

2,404

1,823

KASPIEN HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in hundreds, besides per share and share quantities)

July 31,

January 30,

August 1,

2021

2021

2020

ASSETS

Unaudited

Unaudited

CURRENT ASSETS

Cash and money equivalents

$ 2,570

$ 1,809

$ 3,337

Restricted money

1,184

1,184

950

Accounts receivable

2,805

2,718

2,239

Merchandise stock

25,024

24,515

20,576

Prepaid bills and different present belongings

1,056

564

1,085

Total present belongings

32,639

30,790

28,187

Restricted money

2,992

3,562

4,362

Fixed belongings, web

2,302

2,268

2,285

Operating lease right-of-use belongings

2,447

2,742

3,030

Intangible belongings, web

218

732

1,246

Cash Surrender Value

4,277

3,856

3,411

Other belongings

1,157

1,342

2,036

TOTAL ASSETS

$ 46,031

$ 45,292

$ 44,557

LIABILITIES

CURRENT LIABILITIES

Accounts payable

$ 7,599

$ 8,894

$ 9,857

Short-term borrowings

6,339

2,151

Accrued bills and different present liabilities

1,941

2,512

3,812

Current portion of working lease liabilites

622

596

571

Current portion of PPP Loan

1,687

1,017

Total present liabilities

10,162

20,028

17,408

Operating lease liabilities

1,942

2,258

2,564

PPP Loan

330

1,001

Long-term debt

5,526

5,000

4,401

Other long-term liabilities

15,721

16,187

19,613

TOTAL LIABILITIES

33,351

43,803

44,987

SHAREHOLDERS’ EQUITY

Preferred inventory ($0.01 par worth; 5,000,000 shares licensed; none issued)

Common inventory ($0.01 par worth; 200,000,000 shares licensed; 3,902,985,

3,336,576 and three,219,334 shares issued, respectively)

39

33

32

Additional paid-in capital

359,016

346,495

346,457

Treasury inventory at price (1,410,417, 1,410,378 and 1,408,043 shares, respectively)

(230,170)

(230,169)

(230,169)

Accumulated different complete loss

(2,007)

(2,007)

(1,473)

Accumulated deficit

(114,198)

(112,863)

(115,277)

TOTAL SHAREHOLDERS’ EQUITY

12,680

1,489

(430)

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 46,031

$ 45,292

$ 44,557

Cision

Cision

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SOURCE Kaspien Holdings Inc.

https://finance.yahoo.com/information/kaspien-holdings-inc-reports-fiscal-200500770.html

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