Second Quarter Revenue of $61.3 Million, a 20%
Year over Year Increase
Reiterates Fiscal Year 2023 Guidance
Cantaloupe, Inc. (Nasdaq: CTLP) (“Cantaloupe” or the “Company”),
a digital payments and software services company that provides
end-to-end technology solutions for self-service commerce, today
reported results for the second quarter ended December 31,
2022.
“We saw strong financial results in Q2, with all-time high
record revenue in transaction fees, subscription fees and total
revenue, which demonstrates we are making progress on our strategic
initiatives and working towards our vision to become the global
market leader in providing technology that powers self-service
commerce,” said Ravi Venkatesan, chief executive officer,
Cantaloupe. “The acquisition of Three Square Market (“32M”) was
also completed in the quarter. Integration is well underway and
early customer interaction is validating our revenue synergy
expectations.”
Second Quarter 2023 Key Financial Results:
- Revenue of $61.3 million, an increase of 20% year over year.
- Transaction fees of $32.4 million, an increase of 21% year over
year
- Subscription fees of $16.5 million, an increase of 15% year
over year
- Equipment sales of $12.4 million, an increase of 25% year over
year
- Total Dollar Volumes of Transactions were $649.4 million, an
increase of 17% year over year
- Gross margin of 30.1% compared with 31.3% in the prior year
quarter
- Subscription and transaction fees margins of 38.3% compared to
39.5% in the prior year quarter
- Equipment sales margins of (2.3)% compared to (2.8)% in the
prior year quarter
- U.S. GAAP Net loss applicable to common shares of $573,000, or
$(0.01) per share, compared to Net loss applicable to common shares
of $468,000, or $(0.01) per share, in the prior year quarter
- Adjusted EBITDA[1] of $3.9 million compared to $2.4 million in
the prior year quarter
Second Quarter 2023 Business Highlights:
- Completed the acquisition of Three Square Market, Inc.,
accelerating the Company’s micro market presence and international
expansion
- Active Customers totaled 26,335 at the end of the second
quarter of 2023 compared to 21,315 at the end of the second quarter
of 2022, an increase of 24%.
- Active Devices totaled 1.15 million at the end of the second
quarter of 2023 compared to 1.12 million at the end of the second
quarter of 2022, an increase of 3%.
- Completed the upgrade of the vast majority of non 4G/EMV
devices, including most large enterprise clients, as the Company
reached the 12/31/22 upgrade deadline.
- Held our first investor day at Nasdaq where the Company
articulated its renewed vision, strategy, and long-term financial
outlook
Fiscal Year 2023 Outlook:
For the full fiscal year 2023, the Company reiterates the
following:
- Revenue to be between $240 million and $250 million
- U.S. GAAP Net income to be between $(2) million and $3
million
- Adjusted EBITDA1 to be between $12 million and $17 million
- Total Operating Cash Flow to be between $10 million and $15
million
Webcast and Conference Call:
Cantaloupe will host a live webcast at 5:00 p.m. Eastern Time
today which may be accessed in the Investor Relations section of
the Company’s website at
https://cantaloupeinc.gcs-web.com/events-and-presentations.
Please note that there is a new system to access the live call
in order to ask questions. To join the live call, please register
here. A dial in and unique PIN will be provided to join the
conference call.
A replay of the conference call will also be available in the
Investor Relations section of the Company’s website.
About Cantaloupe, Inc.
Cantaloupe, Inc. is a software and payments company that
provides end-to-end technology solutions for self-service commerce.
Cantaloupe is transforming the self-service commerce industry by
offering one integrated solution for payments processing,
logistics, and back-office management. The Company’s
enterprise-wide platform is designed to increase consumer
engagement and sales revenue through digital payments, digital
advertising and customer loyalty programs, while providing
retailers with control and visibility over their operations and
inventory. As a result, customers ranging from vending machine
companies, to operators of micro-markets, car charging stations,
laundromats, metered parking terminals, kiosks, amusements and
more, can run their businesses more proactively, predictably, and
competitively. For more information, please visit our website at
www.cantaloupe.com.
Discussion of Non-GAAP Financial Measures:
This press release contains discussion of Adjusted EBITDA, a
non-GAAP financial measure which is not required or defined under
U.S. GAAP (Generally Accepted Accounting Principles). Generally, a
non-GAAP financial measure is a numerical measure of a company's
performance, financial position or cash flows that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. Reconciliations between non-GAAP financial
measures and the most comparable GAAP financial measures are set
forth below. However, we do not provide forward-looking guidance
for certain financial measures on a GAAP basis because we are
unable to predict certain items contained in the U.S. measures
without unreasonable efforts.
We use Adjusted EBITDA for financial and operational
decision-making purposes and as a means to evaluate
period-to-period comparisons. We believe that this non-GAAP
financial measure provides useful information about our operating
results, enhances the overall understanding of past financial
performance and future prospects and allows for greater
transparency with respect to metrics used by our management in its
financial and operational decision making. The presentation of this
financial measure is not intended to be considered in isolation or
as a substitute for the financial measures prepared and presented
in accordance with GAAP, including our net income or net loss or
net cash used in operating activities. Management recognizes that
non-GAAP financial measures have limitations in that they do not
reflect all of the items associated with our net income or net loss
as determined in accordance with GAAP, and are not a substitute for
or a measure of our profitability or net earnings. Adjusted EBITDA
is presented because we believe it is useful to investors as a
measure of comparative operating performance. Additionally, we
utilize Adjusted EBITDA as a metric in our executive officer and
management incentive compensation plans.
We define Adjusted EBITDA as U.S. GAAP net loss before (i)
interest income (ii) interest expense on debt and reserves (iii)
income tax provision (iv) depreciation (v) amortization (vi)
stock-based compensation expense, (vii) fees and charges that were
incurred in connection with the 2019 Investigation and financial
statement restatement activities as well as proxy solicitation
costs that are not indicative of our core operations, and (viii)
certain other significant, infrequent or unusual losses and gains
that are not indicative of our core operations such as acquisition
and integration expenses.
Forward-looking Statements:
All statements other than statements of historical fact included
in this release, including without limitation Cantaloupe’s future
prospects and performance, the business strategy and the plans and
objectives of Cantaloupe's management for future operations, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this
release, words such as “may,” “could,” “expect,” “intend,” “plan,”
“seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,”
“potential,” “continue,” “likely,” “will,” “would” and variations
of these terms and similar expressions, or the negative of these
terms or similar expressions, as they relate to Cantaloupe or its
management, may identify forward-looking statements. Such
forward-looking statements are based on the reasonable beliefs of
Cantaloupe's management, as well as assumptions made by and
information currently available to Cantaloupe's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors,
including but not limited to
general economic, market or business conditions unrelated to our
operating performance, including the impact of the ongoing COVID-19
pandemic; potential mutations of COVID-19 and the efficacy of
vaccines and treatment developments and their deployment; failure
to comply with the financial covenants in the Amended JPMorgan
Credit Facility; our ability to raise funds in the future through
sales of securities or debt financing in order to sustain
operations in the normal course of business or if an unexpected or
unusual event were to occur; our ability to compete with our
competitors and increase market share; disruptions in or
inefficiencies to our supply chain and/or operations including the
impacts of the COVID-19 pandemic; the risks related to the
availability of, and cost inflation in, supply chain inputs,
including labor, raw materials, packaging and transportation;
whether our current or future customers purchase, lease, rent or
utilize ePort devices, Seed’s software solutions or our other
products in the future at levels currently anticipated; whether our
customers continue to utilize the Company’s transaction processing
and related services, as our customer agreements are generally
cancellable by the customer on thirty to sixty days’ notice; our
ability to satisfy our trade obligations included in accounts
payable and accrued expenses; the incurrence by us of any
unanticipated or unusual non-operating expenses, which may require
us to divert our cash resources from achieving our business plan;
our ability to predict or estimate our future quarterly or annual
revenue and expenses given the developing and unpredictable market
for our products; our ability to integrate acquired companies into
our current products and services structure; our ability to retain
key customers from whom a significant portion of our revenue is
derived; the ability of a key customer to reduce or delay
purchasing products from us; our ability to obtain widespread
commercial acceptance of our products and service offerings;
whether any patents issued to us will provide any competitive
advantages or adequate protection for our products, or would be
challenged, invalidated or circumvented by others; our ability to
operate without infringing the intellectual property rights of
others; the ability of our products and services to avoid
disruptions to our systems or unauthorized hacking or credit card
fraud; geopolitical conflicts, such as the ongoing conflict between
Russia and Ukraine; whether we are able to fully remediate our
material weaknesses in our internal controls over financial
reporting or continue to experience material weaknesses in our
internal controls over financial reporting in the future, and are
not able to accurately or timely report our financial condition or
results of operations; the ability to remain in compliance with the
continued listing standards of the Nasdaq Global Select Market and
continue to remain as a member of the US Small-Cap Russell 2000®;
whether our suppliers would increase their prices, reduce their
output or change their terms of sale; risks associated with the
currently pending investigation, potential litigation or possible
regulatory action arising from the 2019 Investigation and its
findings, from the failure to timely file our periodic reports with
the Securities and Exchange Commission, from the restatement of the
affected financial statements, from allegations related to the
registration statement for the follow-on public offering, or from
potential litigation or other claims arising from these events;
or other risks discussed in Cantaloupe’s filings with the U.S.
Securities and Exchange Commission, including but not limited to
its Annual Report on Form 10-K for the year ended June 30, 2022.
Readers are cautioned not to place undue reliance on these
forward-looking statements. Any forward-looking statement made by
us in this release speaks only as of the date of this release.
Unless required by law, Cantaloupe does not undertake to release
publicly any revisions to these forward-looking statements to
reflect future events or circumstances or to reflect the occurrence
of unanticipated events. If Cantaloupe updates one or more
forward-looking statements, no inference should be drawn that
Cantaloupe will make additional updates with respect to those or
other forward-looking statements.
-F--CTLP
Cantaloupe, Inc. Condensed
Consolidated Balance Sheets
($ in thousands, except share
data)
December 31, 2022
(Unaudited)
June 30, 2022
Assets
Current assets:
Cash and cash equivalents
$
28,143
$
68,125
Accounts receivable, net
45,721
37,695
Finance receivables, net
7,757
6,721
Inventory, net
26,895
19,754
Prepaid expenses and other current
assets
3,471
4,285
Total current assets
111,987
136,580
Non-current assets:
Finance receivables due after one year,
net
14,520
14,727
Property and equipment, net
20,535
12,784
Operating lease right-of-use assets
1,778
2,370
Intangibles, net
29,535
17,947
Goodwill
92,241
66,656
Other assets
4,815
4,568
Total non-current assets
163,424
119,052
Total assets
$
275,411
$
255,632
Liabilities, convertible preferred
stock and shareholders’ equity
Current liabilities:
Accounts payable
$
48,575
$
48,440
Accrued expenses
29,474
28,154
Current obligations under long-term
debt
1,192
692
Deferred revenue
1,970
1,893
Total current liabilities
81,211
79,179
Long-term liabilities:
Deferred income taxes
217
186
Long-term debt, less current portion
38,082
13,930
Operating lease liabilities,
non-current
1,808
2,366
Total long-term liabilities
40,107
16,482
Total liabilities
121,318
95,661
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock,
900,000 shares authorized, 385,782 and 445,063 issued and
outstanding, with liquidation preferences of $19,457 and $22,115 at
December 31, 2022 and June 30, 2022, respectively
2,720
3,138
Shareholders’ equity:
Preferred stock, no par value, 1,800,000
shares authorized
—
—
Common stock, no par value, 640,000,000
shares authorized, 72,462,969 and 71,188,053 shares issued and
outstanding at December 31, 2022 and June 30, 2022,
respectively
473,605
469,918
Accumulated deficit
(322,232
)
(313,085
)
Total shareholders’ equity
151,373
156,833
Total liabilities, convertible preferred
stock and shareholders’ equity
$
275,411
$
255,632
Cantaloupe, Inc. Condensed
Consolidated Statements of Operations (Unaudited)
Three months ended
Six months ended
December 31,
December 31,
($ in thousands, except per share
data)
2022
2021
2022
2021
Revenues:
Subscription and transaction fees
$
48,932
$
41,188
$
96,007
$
81,812
Equipment sales
12,398
9,903
23,105
15,059
Total revenues
61,330
51,091
119,112
96,871
Costs of sales:
Cost of subscription and transaction
fees
30,202
24,919
60,572
50,944
Cost of equipment sales
12,687
10,182
25,937
15,062
Total costs of sales
42,889
35,101
86,509
66,006
Gross profit
18,441
15,990
32,603
30,865
Operating expenses:
Sales and marketing
3,210
1,745
5,735
4,084
Technology and product development
5,299
5,780
12,164
11,169
General and administrative
6,559
7,672
18,137
14,936
Investigation, proxy solicitation and
restatement expenses
150
—
547
—
Integration and acquisition expenses
2,787
—
2,787
—
Depreciation and amortization
1,350
1,113
2,666
2,135
Total operating expenses
19,355
16,310
42,036
32,324
Operating loss
(914
)
(320
)
(9,433
)
(1,459
)
Other income (expense):
Interest income
878
445
1,445
918
Interest expense
(518
)
(475
)
(995
)
(953
)
Other income (expense)
23
(16
)
(97
)
(75
)
Total other income (expense), net
383
(46
)
353
(110
)
Loss before income taxes
(531
)
(366
)
(9,080
)
(1,569
)
Provision for income taxes
(42
)
(102
)
(67
)
(191
)
Net loss
(573
)
(468
)
(9,147
)
(1,760
)
Preferred dividends
—
—
(334
)
(334
)
Net loss applicable to common shares
$
(573
)
$
(468
)
$
(9,481
)
$
(2,094
)
Net loss per common share
Basic and diluted
$
(0.01
)
$
(0.01
)
$
(0.13
)
$
(0.03
)
Weighted average number of common shares
outstanding used to compute net loss per share applicable to common
shares
Basic and diluted
71,629,939
70,969,246
71,418,845
71,072,587
Cantaloupe, Inc. Condensed
Consolidated Statements of Cash Flows (Unaudited)
Six months ended
December 31,
($ in thousands)
2022
2021
Cash flows from operating
activities:
Net loss
$
(9,147
)
$
(1,760
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock based compensation
1,477
3,129
Amortization of debt issuance costs and
discounts
59
68
Provision for expected losses
1,527
1,313
Provision for inventory reserve
135
342
Depreciation and amortization included in
operating expenses
2,666
2,135
Depreciation included in costs of sales
for rental equipment
554
518
Other
979
112
Changes in operating assets and
liabilities:
Accounts receivable
(6,737
)
1,378
Finance receivables
(1,221
)
245
Inventory
(5,411
)
(6,802
)
Prepaid expenses and other assets
755
(160
)
Accounts payable and accrued expenses
(1,057
)
(4,555
)
Operating lease liabilities
(750
)
(192
)
Deferred revenue
77
(18
)
Net cash used in operating activities
(16,094
)
(4,247
)
Cash flows from investing
activities:
Acquisition of business, net of cash
acquired
(35,913
)
(2,900
)
Purchase of property and equipment
(9,436
)
(4,359
)
Net cash used in investing activities
(45,349
)
(7,259
)
Cash flows from financing
activities:
Proceeds from long-term debt
25,000
—
Repayment of long-term debt
(388
)
(407
)
Contingent consideration paid for
acquisition
(1,000
)
—
Proceeds from exercise of common stock
options
—
86
Repurchase of Series A Convertible
Preferred Stock
(2,151
)
—
Net cash provided by (used in) financing
activities
21,461
(321
)
Net decrease in cash and cash
equivalents
(39,982
)
(11,827
)
Cash and cash equivalents at beginning of
year
68,125
88,136
Cash and cash equivalents at end of
period
$
28,143
$
76,309
Supplemental disclosures of cash flow
information:
Interest paid in cash
$
920
$
376
Common stock issued in business
combination
$
3,942
$
—
Cantaloupe, Inc. Reconciliation of
U.S. GAAP Net Loss to Adjusted EBITDA (Unaudited)
Three months ended December
31,
($ in thousands)
2022
2021
U.S. GAAP net loss
$
(573
)
$
(468
)
Less: interest income
(878
)
(445
)
Plus: interest expense
518
475
Plus: income tax provision
42
102
Plus: depreciation expense included in
costs of sales for rentals
312
254
Plus: depreciation and amortization
expense in operating expenses
1,350
1,113
EBITDA
771
1,031
Plus: stock-based compensation (a)
160
1,368
Plus: investigation, proxy solicitation
and restatement expenses(b)
150
—
Plus: integration and acquisition
expenses(c)
2,787
—
Adjustments to EBITDA
3,097
1,368
Adjusted EBITDA
$
3,868
$
2,399
(a) As an adjustment to EBITDA, we have excluded stock-based
compensation, as it does not reflect our cash-based operations. (b)
As an adjustment to EBITDA, we have excluded the fees incurred in
connection with the costs and expenses related to the 2019
Investigation, financial statement restatement activities, and
proxy solicitation costs because we believe that they represent
charges that are not related to our core operations. (c) As an
adjustment to EBITDA, we have excluded expenses incurred in
connection with business acquisitions and corresponding
integrations as they do not represent recurring costs or charges
related to our core operations.
Six months ended December
31,
($ in thousands)
2022
2021
U.S. GAAP net loss
$
(9,147
)
$
(1,760
)
Less: interest income
(1,445
)
(918
)
Plus: interest expense
995
953
Plus: income tax provision
67
191
Plus: depreciation expense included in
costs of sales for rentals
554
518
Plus: depreciation and amortization
expense in operating expenses
2,666
2,135
EBITDA
(6,310
)
1,119
Plus: stock-based compensation (a)
1,477
3,129
Plus: investigation, proxy solicitation
and restatement expenses(b)
547
—
Plus: integration and acquisition
expenses(c)
2,787
—
Adjustments to EBITDA
4,811
3,129
Adjusted EBITDA
$
(1,499
)
$
4,248
(a) As an adjustment to EBITDA, we have excluded stock-based
compensation, as it does not reflect our cash-based operations. (b)
As an adjustment to EBITDA, we have excluded the fees incurred in
connection with the costs and expenses related to the 2019
Investigation, financial statement restatement activities, and
proxy solicitation costs because we believe that they represent
charges that are not related to our core operations. (c) As an
adjustment to EBITDA, we have excluded expenses incurred in
connection with business acquisitions and corresponding
integrations as they do not represent recurring costs or charges
related to our core operations.
1 Adjusted earnings before income taxes, depreciation, and
amortization, stock-based compensation expense, and certain other
significant infrequent or unusual losses and gains that are not
indicative of our core operations (“Adjusted EBITDA”) is a non-GAAP
financial measure which is not required by or defined under GAAP.
We use this non-GAAP financial measure for financial and
operational decision-making purposes and as a means to evaluate
period-to-period comparisons. See Reconciliations of Non-GAAP
Measures for a reconciliation U.S. GAAP net income to Adjusted
EBITDA.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230207005990/en/
Investor Relations: ICR, Inc. CantaloupeIR@icrinc.com
Media: Jenifer Howard | 202-273-4246
jhoward@jhowardpr.com media@cantaloupe.com
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