Waitr Holdings Inc. (Nasdaq: WTRH) (“Waitr” or the “Company”), a
leader in on-demand food ordering and delivery, today reported
financial results for the second quarter of 2020.
Second Quarter 2020 Highlights
- Revenue for the second quarter of 2020 was $60.5 million,
compared to $51.3 million in the second quarter of 2019, an
increase of 18%.
- Net income for the second quarter of 2020 was $10.7 million, or
$0.10 per diluted share, compared to a loss of $24.9 million, or a
loss of $0.32 per diluted share, in the second quarter of 2019, a
change of $35.6 million.
- Adjusted EBITDA1 for the second quarter of 2020 was $16.7
million, compared to a loss of $14.9 million in the second quarter
of 2019, a change of $31.6 million.
- As of July 31, 2020, cash on hand was $87.3 million.
- On August 3, 2020, the Company prepaid $10.5 million in debt in
exchange for a rate decrease of 200 basis points for 1 year along
with an extension of the maturity date 1 year to November 15, 2023
on both its credit facility and convertible notes.
“We are pleased with our second quarter results, especially our
strong revenue growth and profitability. Our solid performance in
the second quarter is a result of the initiatives we implemented
pre-pandemic and the hard work of our team members, our restaurant
partners and our drivers, as well as the trust that we have earned
from our customers who have relied on us to deliver high-quality
food throughout the pandemic,” said Carl Grimstad, Chairman and CEO
of Waitr.
“We continue to reinforce our presence in our most important
markets by increasing delivery areas, adding grocery and alcohol
delivery services, and expanding our customer service and dispatch
teams,” continued Grimstad. “All of these growth initiatives are
being supported by a leaner cost structure with an eye on
efficiencies and appropriate returns on deployed capital.”
Since the onset of the pandemic, Waitr has been nimble in
adapting its business. Waitr continues to actively work with our
local communities, diners, restaurant partners, drivers and
employees in joint efforts to mitigate risks and hardships arising
from the ongoing COVID-19 pandemic. The Company has been working
with new and existing restaurant partners to boost delivery
potential and sustain their businesses in the current environment,
and has provided restaurants with free marketing and promotional
support, discounted delivery fees and other assistance. Waitr has
also recently added a donation feature to its app, the proceeds
from which go to charities to help feed those in need, including
Feeding America.
“The continued demand for our services enables us to provide
communities with employment opportunities for drivers. The increase
in the number of drivers, in turn, expands capacity and improves
service for our restaurant partners and diners,” concluded
Grimstad.
____________________ 1 Adjusted EBITDA is a non-GAAP financial
measure. A reconciliation of GAAP net income (loss) to Adjusted
EBITDA is included under “Non-GAAP Financial Measure”.
Second Quarter 2020 Financial Results
- Revenue for the second quarter of 2020 was $60.5 million,
compared to $51.3 million in the second quarter of 2019, an
increase of 18%.
- Operations and support expense decreased by $9.2 million, or
23%, to $30.5 million for the second quarter of 2020, compared to
$39.7 million for the second quarter of 2019.
- Sales and marketing expense decreased by $12.6 million, or 82%,
to $2.7 million for the second quarter of 2020, compared to $15.3
million for the second quarter of 2019.
- Research and development expense decreased to $1.2 million for
the second quarter of 2020, in comparison to $2.1 million for the
second quarter of 2019.
- General and administrative expense decreased by 18% to $10.1
million for the second quarter of 2020 from $12.4 million for the
second quarter of 2019.
- Depreciation and amortization expense decreased to $2.1 million
in the second quarter of 2020 from $4.8 million in the second
quarter of 2019.
Second Quarter Key Business Metrics
- Average Daily Orders for the second quarter of 2020 were
44,241, an increase of 18% over first quarter 2020 average daily
orders of 37,576.
- Active Diners as of June 30, 2020 were over 2 million.
Liquidity Update
As of June 30, 2020, the Company had cash on hand of $66.7
million, of which $3.2 million was reserved under a compensating
balance arrangement with a bank. The Company had total long-term
debt outstanding at June 30, 2020 of $109.5 million, consisting of
$59.6 million of term loans, $49.6 million of convertible notes and
$0.3 million of promissory notes. The term loans and convertible
notes mature in November 2023. Short-term debt as of June 30, 2020
included $12.5 million for the current portion of the term loans
and $2.1 million of short-term loans.
The combination of the effects of implementing several strategic
initiatives focused on improving revenue per order, cost per order,
cash flow and profitability, along with proceeds from the sales of
common stock pursuant to the at-the-market offerings launched by
the Company in March and May 2020 resulted in increases in working
capital and liquidity from December 31, 2019.
Other Information
Waitr will not be hosting a conference call to discuss the
second quarter 2020 operational and financial results.
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
Bite Squad connect local restaurants and grocery stores to diners
in underserved U.S. markets. Together they are a convenient way to
discover, order and receive great food from local restaurants,
national chains and grocery stores. As of June 30, 2020, Waitr and
Bite Squad operated in small and medium sized markets in the United
States in over 700 cities.
Cautionary Note Concerning Forward-Looking Statements
This press release contains “forward-looking statements,” as
defined by the federal securities laws, including statements
regarding the Company’s financial results, implementation of
strategic initiatives and 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 the impact of
the coronavirus (COVID-19) pandemic on the Company’s business and
operations, and those described under the section entitled “Risk
Factors” in Waitr’s Annual Report on Form 10-K for the year ended
December 31, 2019, filed with the SEC on March 16, 2020, 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. Additional information will be set forth in Waitr’s
Quarterly Report on Form 10-Q for the three months ended June 30,
2020, which will be filed with the SEC on August 6, 2020, and
should be read in conjunction with these financial results.
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).
Waitr has thus far been able to operate effectively during the
COVID-19 pandemic. However, the potential impacts and duration of
the COVID-19 pandemic on the global economy and on the Company’s
business, in particular, may be difficult to assess or predict. The
pandemic has resulted in, and may continue to result in,
significant disruption of global financial markets, which may
reduce the Company’s ability to access capital and continue to
operate effectively. The COVID-19 pandemic could also reduce the
demand for the Company’s services. In addition, a recession or
further financial market correction resulting from the spread of
COVID-19 could adversely affect demand for the Company’s services.
To the extent that the COVID-19 pandemic adversely impacts the
Company’s business, results of operations, liquidity or financial
condition, it may also have the effect of heightening many of the
other risks described in the risk factors in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31,
2019.
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 income (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, 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 income (loss) to Adjusted EBITDA for the
three and six months ended June 30, 2020 and 2019.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
REVENUE
$
60,506
$
51,342
$
104,749
$
99,374
COSTS AND EXPENSES:
Operations and support
30,547
39,698
56,912
75,881
Sales and marketing
2,740
15,339
5,566
25,662
Research and development
1,167
2,149
2,637
4,089
General and administrative
10,094
12,380
20,872
31,298
Depreciation and amortization
2,075
4,824
4,139
8,940
Intangible and other asset impairments
29
—
29
18
Loss on disposal of assets
3
10
11
15
TOTAL COSTS AND EXPENSES
46,655
74,400
90,166
145,903
INCOME (LOSS) FROM OPERATIONS
13,851
(23,058
)
14,583
(46,529
)
OTHER EXPENSES (INCOME) AND LOSSES
(GAINS), NET
Interest expense
2,490
2,190
5,404
3,795
Interest income
(21
)
(241
)
(81
)
(580
)
Other expense (income)
712
(123
)
675
(173
)
NET INCOME (LOSS) BEFORE INCOME
TAXES
10,670
(24,884
)
8,585
(49,571
)
Income tax expense
17
(32
)
34
30
NET INCOME (LOSS)
$
10,653
$
(24,852
)
$
8,551
$
(49,601
)
INCOME (LOSS) PER SHARE:
Basic
$
0.11
$
(0.32
)
$
0.10
$
(0.70
)
Diluted
$
0.10
$
(0.32
)
$
0.09
$
(0.70
)
Weighted-average shares used to compute
net income (loss) per share:
Weighted average common shares
outstanding – basic
95,053,207
72,416,614
85,968,962
68,492,911
Weighted average common shares
outstanding – diluted
105,951,232
72,416,614
91,769,460
68,492,911
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
(Unaudited)
June 30,
December 31,
2020
2019
ASSETS
CURRENT ASSETS
Cash
$
66,702
$
29,317
Accounts receivable, net
6,121
3,272
Capitalized contract costs, current
546
199
Prepaid expenses and other current
assets
5,506
8,329
TOTAL CURRENT ASSETS
78,875
41,117
Property and equipment, net
3,398
4,072
Capitalized contract costs, noncurrent
1,978
772
Goodwill
106,734
106,734
Intangible assets, net
23,941
25,761
Other noncurrent assets
454
517
TOTAL ASSETS
$
215,380
$
178,973
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
CURRENT LIABILITIES
Current portion of long-term debt
$
12,500
$
—
Accounts payable
5,335
4,384
Restaurant food liability
5,528
5,612
Accrued payroll
5,020
5,285
Short-term loans
2,094
3,612
Deferred revenue, current
47
414
Income tax payable
85
51
Other current liabilities
13,923
12,630
TOTAL CURRENT LIABILITIES
44,532
31,988
Long-term debt
103,311
123,244
Accrued workers’ compensation
liability
346
463
Deferred revenue, noncurrent
—
45
Other noncurrent liabilities
499
325
TOTAL LIABILITIES
148,688
156,065
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value
10
8
Additional paid in capital
420,368
385,137
Accumulated deficit
(353,686
)
(362,237
)
TOTAL STOCKHOLDERS’ EQUITY
66,692
22,908
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
215,380
$
178,973
CONSOLIDATED CASH FLOW
STATEMENTS
(In thousands)
(Unaudited)
Six Months Ended June
30,
2020
2019
Cash flows from operating
activities:
Net income (loss)
$
8,551
$
(49,601
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Non-cash interest expense
4,453
1,079
Non-cash advertising expense
—
310
Stock-based compensation
1,450
4,552
Equity issued in exchange for services
—
60
Loss on disposal of assets
11
15
Depreciation and amortization
4,139
8,940
Intangible and other asset impairments
29
18
Amortization of capitalized contract
costs
183
1,250
Other non-cash income
(22
)
—
Changes in assets and liabilities:
Accounts receivable
(2,849
)
(1,734
)
Capitalized contract costs
(1,736
)
(2,346
)
Prepaid expenses and other current
assets
2,823
(3,932
)
Accounts payable
951
(592
)
Restaurant food liability
(84
)
6,399
Deferred revenue
(414
)
(151
)
Income tax payable
34
(25
)
Accrued payroll
(265
)
4,113
Accrued workers’ compensation
liability
(117
)
(305
)
Other current liabilities
1,650
(2,441
)
Other noncurrent liabilities
174
40
Net cash provided by (used in)
operating activities
18,961
(34,351
)
Cash flows from investing
activities:
Purchases of property and equipment
(381
)
(990
)
Acquisition of Bite Squad, net of cash
acquired
—
(192,568
)
Other acquisitions
(290
)
—
Collections on notes receivable
36
53
Internally developed software
(1,335
)
(155
)
Proceeds from sale of property and
equipment
7
23
Net cash used in investing
activities
(1,963
)
(193,637
)
Cash flows from financing
activities:
Waitr shares redeemed for cash
—
(10
)
Proceeds from issuance of stock
22,944
50,002
Equity issuance costs
(359
)
(4,175
)
Proceeds from Additional Term Loans
—
42,080
Proceeds from short-term loans
1,906
5,032
Payments on short-term loans
(3,415
)
(658
)
Proceeds from exercise of stock
options
39
3
Taxes paid related to net settlement on
stock-based compensation
(728
)
(799
)
Net cash provided by financing
activities
20,387
91,475
Net change in cash
37,385
(136,513
)
Cash, beginning of period
29,317
209,340
Cash, end of period
$
66,702
$
72,827
Supplemental disclosures of cash flow
information:
Cash paid during the period for state
income taxes
$
—
$
30
Cash earned during the period for
interest
43
—
Cash paid during the period for
interest
951
2,715
Supplemental disclosures of non-cash
investing and financing activities:
Stock issued as consideration in Bite
Squad acquisition
—
126,574
Conversion of convertible notes to
stock
11,888
—
Stock issued in connection with Additional
Term Loans
—
3,884
Non-cash gain on debt extinguishment
—
1,897
NON-GAAP FINANCIAL
MEASURE
ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
NET INCOME (LOSS)
$
10,653
$
(24,852
)
$
8,551
$
(49,601
)
Interest expense
2,490
2,190
5,404
3,795
Income taxes
17
(32
)
34
30
Depreciation and amortization
2,075
4,824
4,139
8,940
Stock-based compensation
602
2,549
1,450
4,612
Intangible and other asset impairments
29
—
29
18
Business combination related
expenditures
—
7
—
6,956
Costs associated with reduction in
force
—
368
—
368
Restructuring expenses
850
—
850
—
ADJUSTED EBITDA
$
16,716
$
(14,946
)
$
20,457
$
(24,882
)
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version on businesswire.com: https://www.businesswire.com/news/home/20200806005271/en/
Investors WaitrIR@icrinc.com
Media WaitrPR@icrinc.com
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