Key Highlights:
● Net revenue for the first quarter of 2021 increased 27% year
over year to $129.7 million driven by an increase in customers and
continued improvement in key customer metrics.
● Customers increased by approximately 15,000 year over year and
by approximately 38,000 over the prior quarter.
● Year-over-year growth in key customer metrics continued as
Average Revenue per Customer increased 22% to a record $331, Order
per Customer rose 15% to 5.4, and Average Order Value grew 7% to
approximately $62.
● Began implementing corporate governance enhancements.
Blue Apron Holdings, Inc. (NYSE: APRN) announced today financial
results for the quarter ended March 31, 2021.
“Blue Apron had a strong 2021 first quarter with net revenue
rising 27% year over year to $129.7 million, representing our
fourth consecutive quarter of double-digit year over year net
revenue growth,” said Linda Findley Kozlowski, Blue Apron’s
President and Chief Executive Officer. “The first quarter marked
another period of year-over-year improvements in all of our key
customer metrics. In particular, strong Average Order Value and
Orders per Customer drove a 22% improvement in Average Revenue per
Customer to an all-time quarterly record level. This demonstrates
that Blue Apron’s differentiated, high-quality offerings are being
increasingly valued by our customers. Our return-focused marketing
programs are growing awareness of, and demand for, our newest
offerings, including those that provide customers more variety and
customization options. Our product innovations and marketing
programs are helping to drive higher engagement with new and
existing customers as Orders per Customer for both groups rose year
over year as well as on a quarterly sequential basis for the fourth
consecutive quarter.”
Key Customer Metrics
Improvements in key customer metrics in the chart below reflect
the company’s product initiatives, and targeted marketing
investments as well as, to some degree, the ongoing benefit of
changes in consumer behavior related to the pandemic, other
operating trends and seasonality.
Three Months Ended,
March 31,
December 31,
March 31,
2021
2020
2020
Orders (in thousands)
2,104
1,879
1,763
Customers (in thousands)
391
353
376
Average Order Value
$61.63
$61.43
$57.68
Orders per Customer
5.4
5.3
4.7
Average Revenue per Customer
$331
$327
$271
For a description of how Blue Apron defines and uses these key
customer metrics, please see “Use of Key Customer Metrics”
below.
Kozlowski continued, “Since I joined Blue Apron two years ago,
we’ve focused on attracting and retaining high-value customers
through ongoing product innovation and added flexibility as well as
more efficient marketing. Reflecting this focus, in the first
quarter of 2021, Average Revenue per Customer exceeded $331,
marking an approximately 28%, or $73, increase over the first
quarter of 2019. In addition, we’re benefiting from new operational
efficiencies, which has generally enabled us to meet demand, and
launch more new products. We believe our ongoing focus on these
critical metrics, combined with improved effectiveness of our
marketing and operations, more consumers demonstrating a desire to
cook at home, and our strong brand affinity, positions Blue Apron
for further growth, and future positive Adjusted EBITDA on a
sustainable basis.”
First Quarter 2021 Financial Results
● Net revenue in the first quarter of 2021 increased 27% year
over year to $129.7 million. The increase in net revenue was
primarily due to an increase in Customers, as well as continued
improvements in Orders per Customer and Average Order Value
reflecting the continued execution of the company’s growth
strategy, including through product innovation, and the changes in
consumer behaviors relating to the pandemic.
● Cost of goods sold, excluding depreciation and amortization
(COGS), as a percentage of net revenue, increased 340 basis points
year over year from 59.5% to 62.9% and 230 basis points on a
sequential basis largely driven by an increase in food and labor
costs due to investments made to increase fulfillment center
capacity as well as the increased use of premium ingredients
related to enhanced product offerings to provide product variety,
flexibility and additional choice for customers, partially offset
by a decrease in external packaging costs due to pricing
improvements.
● Marketing expenses were $19.9 million, or 15.4% as a
percentage of net revenue, in the first quarter of 2021, compared
to $15.0 million, or 14.8% as a percentage of net revenue, in the
first quarter of 2020, as the company increased its marketing
efforts to further support its growth strategy.
● Product, technology, general and administrative (PTG&A)
costs increased 7% year over year from $34.2 million in the first
quarter of 2020 to $36.6 million in the first quarter of 2021
primarily reflecting actions taken to implement safety measures in
the company’s fulfillment centers in response to the pandemic. As a
percentage of net revenue, PTG&A improved 540 basis points year
over year from 33.6% to 28.2% due to the continued scaling of the
business.
● Net loss was $15.7 million, and diluted loss per share was
$0.88, in the first quarter of 2021 based on 17.9 million
weighted-average common shares outstanding, compared to a net loss
of $20.1 million, and diluted loss per share of $1.51, in the first
quarter of 2020 based on 13.3 million weighted-average common
shares outstanding.
● Adjusted EBITDA decreased 5% year over year to a loss of $6.1
million in the first quarter of 2021, compared to a loss of $5.8
million in the first quarter of 2020.
Liquidity and Capital Resources
● Cash and cash equivalents were $29.6 million as of March 31,
2021.
● Cash used in operating activities totaled $12.0 million for
the first quarter of 2021 compared to cash used of $12.6 million in
the first quarter of the prior-year period. Capital expenditures
totaled $1.7 million for the first quarter of 2021, representing an
increase of $0.1 million in capital expenditures from the first
quarter of 2020.
● Free cash flow was $(13.7) million for the first quarter of
2021 compared to $(14.2) million in the first quarter of the
prior-year period driven by improved operating cash flow, partially
offset by slightly increased capital expenditures.
● Subsequent to the three months ended March 31, 2021, the
company amended its senior secured term loan to provide more
flexibility around accessible liquidity. Details on this amendment
can be found in the company’s Form 8-K that was filed with the
Securities and Exchange Commission (the “SEC”) this morning.
Corporate Governance Enhancements
Blue Apron has begun to implement a series of corporate
governance enhancements, which include:
● Declassifying the Board of Directors from its current three
classes into a single class over the next three years, if approved
by the company’s stockholders at the annual meeting of stockholders
to be held on June 14, 2021;
● Amending the voting standard for director elections from the
current plurality standard to a majority voting standard, expected
to be approved by the board of directors following the annual
meeting in June;
● Adopting stock ownership guidelines for all non-employee
directors and Blue Apron’s Chief Executive Officer; and
● Disclosing the company’s corporate social responsibility
initiatives.
Second Quarter 2021 Outlook
Blue Apron today provided an outlook for certain second quarter
2021 financial metrics, reflecting certain assumptions regarding
the business, including the execution of the company’s strategic
growth initiatives and ongoing operational improvements, and
planned investment increases in marketing initiatives, as well the
company’s ability to manage liquidity in compliance with its debt
covenants. In addition, the outlook for the second quarter of 2021
assumes the seasonal fluctuations between the first and second
quarter periods will return to the historical patterns experienced
pre-pandemic. The following guidance also assumes that the company
will not experience any unforeseen significant disruptions in its
fulfillment operations or supply chain.
For the second quarter, the company expects net revenue will be
approximately $122 million to $126 million. The company expects to
incur a net loss of no more than $17 million and an adjusted EBITDA
loss of no more than $7 million.
For the full year 2021, Blue Apron expects to generate high
single-digit to low double-digit net revenue growth, with the
expectation that the second half of 2021 will demonstrate a return
to year-over-year growth following the slight expected decline in
the second quarter.
Conference Call and Webcast
Blue Apron will hold a conference call and webcast today at 8:30
a.m. Eastern Time to discuss its first quarter 2021 results and
business outlook. The conference call can be accessed by dialing
(844) 369-8770 or (862) 298-0840. Alternatively, participants may
access the live webcast on Blue Apron’s Investor Relations website
at investors.blueapron.com.
A recording of the webcast will also be available on Blue
Apron’s Investor Relations website at investors.blueapron.com
following the conference call. Additionally, a replay of the
conference call can be accessed until Thursday, May 13, 2021 by
dialing (877) 481-4010 or (919) 882-2331, utilizing the conference
ID 41160.
About Blue Apron
Blue Apron’s vision is “better living through better food.”
Launched in 2012, Blue Apron offers fresh, chef-designed recipes
that empower home cooks to embrace their culinary curiosity and
challenge their abilities to see what a difference cooking quality
food can make in their lives. Through its mission to spark
discovery, connection and joy through cooking, Blue Apron
continuously focuses on bringing incredible recipes to its
customers, while minimizing its carbon footprint, reducing food
waste, and promoting diversity and inclusion.
Forward-Looking Statements
This press release includes statements concerning Blue Apron
Holdings, Inc. and its future expectations, plans and prospects
that constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. For this
purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. In
some cases, you can identify forward-looking statements by terms
such as "may," "should," "expects," "plans," “forecasts,”
"anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential,"
or "continue," or the negative of these terms or other similar
expressions. Blue Apron has based these forward-looking statements
largely on its current expectations and projections about future
events and financial trends that it believes may affect its
business, financial condition and results of operations. These
forward-looking statements speak only as of the date of this press
release and are subject to a number of risks, uncertainties and
assumptions including, without limitation, the company’s ability,
including the timing and extent, to sufficiently manage costs and
to fund investments in its operations from cash from operations and
additional equity and/or debt financings in amounts necessary to
maintain compliance with financial and other covenants under its
indebtedness while continuing to support the execution of its
growth strategy; the company achieving its expectations regarding
expenses and net revenue and its ability to grow adjusted EBITDA
and to achieve or maintain profitability; its ability, including
the timing and extent, to successfully execute its growth strategy,
cost-effectively attract new customers and retain existing
customers, including its ability to sustain any increase in demand
resulting from both its growth strategy and the COVID-19
(coronavirus) pandemic, and its ability to continue to expand its
direct-to-consumer product offerings, and to continue to benefit
from the implementation of operational efficiency practices;
changes in consumer behaviors that could lead to declines in
demand, both as the COVID-19 pandemic’s impact on consumer behavior
tapers, particularly as a result of fewer restrictions on dining
options, and as COVID-19 vaccines become widely available in the
United States, and/or if consumer spending habits are negatively
impacted by worsening economic conditions; the company’s ability to
attract and retain qualified employees and key personnel in
sufficient numbers; the company’s ability to effectively compete;
its ability to maintain and grow the value of its brand and
reputation; any material and adverse impact of the COVID-19
pandemic on the company’s operations and results, including as a
result of inability to meet demand due to insufficient labor,
whether as a result of heightened absenteeism or challenges in
recruiting and retention or otherwise, prolonged closures, or
series of temporary closures, of one or more fulfillment centers,
or supply chain or carrier interruptions or delays; its
expectations regarding, and the stability of, its supply chain,
including potential shortages or interruptions in the supply or
delivery of ingredients, as a result of COVID-19 or otherwise; its
ability to maintain food safety and prevent food-borne illness
incidents and its susceptibility to supplier-initiated recalls; its
ability to accommodate general changes in consumer tastes and
preferences or in consumer spending; its ability to comply with
modified or new laws and regulations applying to its business;
risks resulting from its vulnerability to adverse weather
conditions, natural disasters and public health crises, including
pandemics; its ability to obtain and maintain intellectual property
protection; and other risks more fully described in the company’s
Annual Report on Form 10-K for the year ended December 31, 2020
filed with the SEC on February 23, 2021 and the company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2021 filed with
the SEC on May 6, 2021, and in other filings that the company may
make with the SEC in the future. The company assumes no obligation
to update any forward-looking statements contained in this press
release as a result of new information, future events or
otherwise.
Use of Non-GAAP Financial Information
This press release includes non-GAAP financial measures,
adjusted EBITDA and free cash flow, that are not prepared in
accordance with, nor an alternative to, financial measures prepared
in accordance with U.S. generally accepted accounting principles
(“GAAP”). In addition, these non-GAAP financial measures are not
based on any standardized methodology prescribed by GAAP and are
not necessarily comparable to similarly-titled measures presented
by other companies.
The company defines adjusted EBITDA as net earnings (loss)
before interest income (expense), net, other operating expense,
benefit (provision) for income taxes and depreciation and
amortization, adjusted to eliminate share-based compensation
expense. The company presents adjusted EBITDA because it is a key
measure used by the company’s management and board of directors to
understand and evaluate the company’s operating performance,
generate future operating plans and make strategic decisions
regarding the allocation of capital. In particular, the company
believes that the exclusion of certain items in calculating
adjusted EBITDA can produce a useful measure for period-to-period
comparisons of the company’s business. Further, Blue Apron uses
adjusted EBITDA to evaluate its operating performance and trends
and make planning decisions, and it believes that adjusted EBITDA
helps identify underlying trends in its business that could
otherwise be masked by the effect of the items that the company
excludes. Accordingly, Blue Apron believes that adjusted EBITDA
provides useful information to investors and others in
understanding and evaluating its operating results, enhancing the
overall understanding of the company’s past performance and future
prospects, and allowing for greater transparency with respect to
key financial metrics used by its management in its financial and
operational decision-making.
There are a number of limitations related to the use of adjusted
EBITDA rather than net income (loss), which is the most directly
comparable GAAP equivalent. Some of these limitations are:
● adjusted EBITDA excludes share-based compensation expense, as
share-based compensation expense has recently been, and will
continue to be for the foreseeable future, a significant recurring
expense for the company’s business and an important part of its
compensation strategy;
● adjusted EBITDA excludes depreciation and amortization expense
and, although these are non-cash expenses, the assets being
depreciated may have to be replaced in the future;
● adjusted EBITDA excludes other operating expense, as other
operating expense represents non-cash impairment charges on
long-lived assets, a non-cash gain, net of termination fee, on
lease termination, and restructuring costs;
● adjusted EBITDA does not reflect interest expense, or the cash
requirements necessary to service interest, which reduces cash
available to us;
● adjusted EBITDA does not reflect income tax payments that
reduce cash available to us; and
● other companies, including companies in the company’s
industry, may calculate adjusted EBITDA differently, which reduces
its usefulness as a comparative measure.
The company defines free cash flow as net cash from (used in)
operating activities less purchases of property and equipment. The
company presents free cash flow because it is used by the company’s
management and board of directors as an indicator of the amount of
cash the company generates or uses and to evaluate the company’s
ability to satisfy current and future obligations and to fund
future business opportunities. Accordingly, Blue Apron believes
that free cash flow provides useful information to investors and
others in understanding and evaluating its operating results,
enhancing the overall understanding of the company’s ability to
satisfy its financial obligations and pursue business
opportunities, and allowing for greater transparency with respect
to a key financial metric used by its management in its financial
and operational decision making.
There are a number of limitations related to the use of free
cash flow rather than net cash from (used in) operating activities,
which is the most directly comparable GAAP equivalent. Some of
these limitations are:
● free cash flow is not a measure of cash available for
discretionary expenditures since the company has certain
non-discretionary obligations such as debt repayments or capital
lease obligations that are not deducted from the measure; and
● other companies, including companies in the company’s
industry, may calculate free cash flow differently, which reduces
its usefulness as a comparative measure.
Because of these limitations, adjusted EBITDA and free cash flow
should be considered together with other financial information
presented in accordance with GAAP. A reconciliation of these
non-GAAP financial measures to the most directly comparable
measures calculated in accordance with GAAP is set forth below
under the heading “Reconciliation of Non-GAAP Financial
Measures”.
Use of Key Customer Metrics
This press release includes various key customer metrics that we
use to evaluate our business and operations, measure our
performance, identify trends affecting our business, project our
future performance, and make strategic decisions. You should read
these metrics in conjunction with our financial statements. We
define and determine our key customer metrics as follows:
Orders
We define Orders as the number of paid orders by our Customers
across our meal, wine and market products sold on our e-commerce
platforms in any reporting period, inclusive of orders that may
have eventually been refunded or credited to customers.
Customers
We determine our number of Customers by counting the total
number of individual customers who have paid for at least one Order
from Blue Apron across our meal, wine or market products sold on
our e-commerce platforms in a given reporting period.
Average Order Value
We define Average Order Value as our net revenue from our meal,
wine and market products sold on our e-commerce platforms in a
given reporting period divided by the number of Orders in that
period.
Orders per Customer
We define Orders per Customer as the number of Orders in a given
reporting period divided by the number of Customers in that
period.
Average Revenue per Customer
We define Average Revenue per Customer as our net revenue from
our meal, wine and market products sold on our e-commerce platforms
in a given reporting period divided by the number of Customers in
that period.
BLUE APRON HOLDINGS, INC.
Condensed Consolidated Balance Sheets (In thousands)
(Unaudited)
March 31,
December 31,
2021
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
29,556
$
44,122
Accounts receivable, net
170
116
Inventories, net
22,531
18,185
Prepaid expenses and other current
assets
25,316
23,651
Total current assets
77,573
86,074
Property and equipment, net
121,218
125,208
Other noncurrent assets
2,926
4,053
TOTAL ASSETS
$
201,717
$
215,335
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
31,556
$
23,691
Accrued expenses and other current
liabilities
33,651
41,632
Current portion of long-term debt
3,500
3,500
Deferred revenue
7,237
6,269
Total current liabilities
75,944
75,092
Long-term debt
28,087
28,747
Facility financing obligation
35,944
35,957
Other noncurrent liabilities
11,122
11,564
TOTAL LIABILITIES
151,097
151,360
TOTAL STOCKHOLDERS’ EQUITY
50,620
63,975
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
201,717
$
215,335
BLUE APRON HOLDINGS, INC.
Condensed Consolidated Statement of Operations (In thousands,
except share and per-share data) (Unaudited)
Three Months Ended
March 31,
2021
2020
Net revenue
$
129,706
$
101,857
Operating expenses:
Cost of goods sold, excluding depreciation
and amortization
81,592
60,638
Marketing
19,940
15,032
Product, technology, general, and
administrative
36,551
34,217
Depreciation and amortization
5,620
6,753
Other operating expense
—
3,198
Total operating expenses
143,703
119,838
Income (loss) from operations
(13,997)
(17,981)
Interest income (expense), net
(1,708)
(2,155)
Income (loss) before income taxes
(15,705)
(20,136)
Benefit (provision) for income taxes
(16)
(9)
Net income (loss)
$
(15,721)
$
(20,145)
Net income (loss) per share – basic
$
(0.88)
$
(1.51)
Net income (loss) per share – diluted
$
(0.88)
$
(1.51)
Weighted average shares outstanding –
basic
17,939,682
13,305,805
Weighted average shares outstanding –
diluted
17,939,682
13,305,805
BLUE APRON HOLDINGS, INC.
Condensed Consolidated Statement of Cash Flows (In thousands)
(Unaudited)
Three Months Ended
March 31,
2021
2020
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)
$
(15,721)
$
(20,145)
Adjustments to reconcile net income (loss)
to net cash from (used in) operating activities:
Depreciation and amortization of property
and equipment
5,620
6,753
Loss (gain) on build-to-suit accounting
derecognition
—
(4,936)
Loss on impairment
—
7,448
Changes in reserves and allowances
131
(425)
Share-based compensation
2,319
2,240
Non-cash interest expense
215
182
Changes in operating assets and
liabilities
(4,515)
(3,721)
Net cash from (used in) operating
activities
(11,951)
(12,604)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of property and equipment
(1,746)
(1,611)
Proceeds from sale of property and
equipment
54
59
Net cash from (used in) investing
activities
(1,692)
(1,552)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Repayments of debt
(875)
—
Payments of debt issuance costs
(69)
—
Proceeds from exercise of stock
options
—
486
Principal payments on capital lease
obligations
(53)
(77)
Net cash from (used in) financing
activities
(997)
409
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH
(14,640)
(13,747)
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH — Beginning of period
45,842
46,443
CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH — End of period
$
31,202
$
32,696
BLUE APRON HOLDINGS, INC.
Reconciliation of Non-GAAP Financial Measures (In thousands)
(Unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Reconciliation of net income (loss) to
adjusted EBITDA
Net income (loss)
$
(15,721)
$
(11,861)
$
(20,145)
Share-based compensation
2,319
2,119
2,240
Depreciation and amortization
5,620
5,704
6,753
Other operating expense
—
—
3,198
Interest (income) expense, net
1,708
2,370
2,155
Provision (benefit) for income taxes
16
0
9
Adjusted EBITDA
$
(6,058)
$
(1,668)
$
(5,790)
Three Months Ended
March 31,
2021
2020
Reconciliation of net cash from (used
in) operating activities to free cash flow
Net cash from (used in) operating
activities
$
(11,951)
$
(12,604)
Purchases of property and equipment
(1,746)
(1,611)
Free cash flow
$
(13,697)
$
(14,215)
Second Quarter 2021 Outlook
Three Months Ended
June 30, 2021
Low
Reconciliation of net income (loss) to
adjusted EBITDA
Net income (loss)
$
(17,000)
Share-based compensation
2,300
Depreciation and amortization
5,800
Interest (income) expense, net
1,900
Provision (benefit) for income taxes
0
Adjusted EBITDA
$
(7,000)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005444/en/
Media Muriel Lussier Blue Apron
muriel.lussier@blueapron.com
Investor investor.relations@blueapron.com
aprn@jcir.com
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