45% YoY Growth in North America, Including
79% YoY Growth in Retail Partnership Channel
Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR) today
announced financial results for the quarter ended June 30, 2021
(the “second quarter 2021” or “second quarter”).
Second Quarter 2021 Financial Highlights (as compared to
the quarter ended June 30, 2020)
- North America revenue increased 44.6% to an all-time quarterly
record of $151.8 million;
- North America Direct-to-Consumer revenue, inclusive of Casper’s
72 retail stores and e-commerce channel, increased 31.3% to $99.5
million;
- North America Retail Partnership revenue increased 78.9% to
$52.2 million;
- Gross Profit increased $15.5 million or 27.1% to $72.5
million;
- Net Loss increased by $9.5 million or 39.4% to $33.7 million,
inclusive of a $17.5 million one-time lease write-off charge;
- Adjusted EBITDA loss improved by $4.8 million or 41.8% to $6.7
million; and
- Cash and cash equivalents were $49.7 million on June 30,
2021.
Commenting on the second quarter results, Casper’s Chief
Executive Officer, Philip Krim, said, “We are pleased with our
significant top-line growth, compared to both 2020 and 2019. Casper
delivered all-time record quarterly revenue, reflecting continued
demand for our innovative sleep products across our sales channels
and the strength of the Casper brand. North America revenue growth
of 45% year-over-year was driven by 79% revenue growth across our
retail partnerships and 31% revenue growth across our DTC channel,
representing 70% revenue growth compared to the second quarter of
2019. Our topline growth reflects the success of our new product
offerings, the relevance of our omni-channel shopping experience
and the staying and pricing power of our brand.”
“While we continue to make meaningful progress on our strategic
priorities and path towards achieving Adjusted EBITDA
profitability, the extended constraints and inflationary pressures
in raw materials, freight and labor across our supply chain
significantly hampered our ability to meet the full extent of the
record level of demand. We are taking aggressive measures to offset
these various challenges, including further diversifying and
expanding our supplier base to strengthen our sourcing
capabilities, leveraging our growing scale to negotiate
preferential rates and implementing price increases to help offset
the ongoing inflationary pressures. In spite of significant supply
constraints, the overall industry environment remains strong, and
with manufacturing capacity anticipated to ramp up later this year,
we expect our third-party manufacturing model will help us fulfill
the growing demand for Casper products across our expanding
footprint and enable us to improve gross profit margin in
2022.”
Mr. Krim continued, “More than ever, our teams are focused on
serving our customers and retail partners while effectively
managing through these dynamic market conditions. Our momentum
remains strong, and our brand is resonating with consumers, who are
both spending more time at home and assigning greater value to rest
and wellness. Fueled by our top-line momentum and the successes of
our product extensions, we continue to invest in product
development through the introduction of thoughtfully designed and
innovative products, such as our new Cooling Collection. In
addition, our brand and products are supported by a growing list of
top-tier retail partners, such as our recent partnership with Bed
Bath & Beyond, as well as through Casper retail stores. As
consumers’ shopping habits become increasingly bifurcated, we are
confident that we can further leverage the growing appeal of our
in-person shopping opportunities in combination with the
convenience of our e-commerce platform.”
Outlook
The Company today provided an outlook for certain financial
metrics for the quarter ending September 30, 2021 (“third quarter
2021”) and the year ending December 31, 2021 (“full year 2021” or
“2021”), reflecting certain assumptions by management regarding the
Company’s business, trends, seasonal factors, and the continuing
impact of industry-wide supply chain challenges and the COVID-19
pandemic on its business. In addition, the outlook assumes there
will be no material changes in world events, recent consumer
trends, economic conditions, competitive landscape or other
circumstances beyond our control that may adversely affect the
Company’s results of operations.
In the third quarter 2021, the Company expects revenue of
approximately $152 to $159 million, a net loss of approximately
$22.6 to $19.6 million, and an Adjusted EBITDA loss of
approximately $12.5 to $9.5 million. At the mid-point, this revenue
range represents 25.9% growth in the third quarter 2021 versus the
prior year period. For full year 2021, the Company expects revenue
of approximately $580 to $610 million. At the mid-point, this
revenue range represents 19.7% growth and 25.8% North America
revenue growth for 2021 versus full year 2020. Assuming that
manufacturing and supply chain capacity increases, materials
shortages, labor and shipping constraints lessen, and inflationary
pressure on input materials subsides, as anticipated, the Company
expects to achieve Adjusted EBITDA profitability during 2022.
Conference Call & Webcast Information
Casper will hold a conference call on Tuesday, August 10, 2021,
at 8:00 a.m. Eastern time to discuss the Company’s second quarter
results and other business updates. To access the conference call,
interested parties may dial 866-319-1799 (for domestic callers) or
825-312-2362 (for international callers). Please call at least five
minutes in advance of the start of the call to ensure that you are
connected prior to the call. Interested parties may also access a
live audio webcast of the call at https://ir.casper.com/news-and-events/events-and-presentations/default.aspx.
Please allow 15 minutes to register. A replay of the call will be
available within two hours of the conclusion of the call until
October 9, 2021 at https://ir.casper.com/news-and-events/events-and-presentations/default.aspx.
Casper periodically provides information for investors on its
corporate website, casper.com, and its investor relations website,
ir.casper.com. This includes press
releases and other information about financial performance, reports
filed or furnished with the SEC and information on corporate
governance.
About Casper
Casper believes everyone should sleep better. The Sleep Company
has a full portfolio of obsessively engineered sleep
products—including mattresses, pillows, bedding, and furniture
designed in-house by the Company’s award-winning R&D team at
Casper Labs. In addition to its e-commerce business, Casper owns
and operates Sleep Shops across North America and its products are
available at a growing list of retailers.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding our expectations surrounding the impact of the COVID-19
pandemic and the related effect on our employees, customers and
business operations; our expectations surrounding our ability to
deliver growth, gain market share, improve gross profit margin and
achieve Adjusted EBITDA profitability by specified timelines; our
future competitive position; our future results of operations and
financial position including our outlook for the third quarter 2021
and full year 2021; our business strategy and plans, including our
plans regarding product launches, expanding brand awareness and
reach, and our retail distribution; our actions in response to
industry-wide supply chain constraints; consumer shopping habits
and preferences; completion of review procedures and the execution
of our internal control over financial reporting; improvement in
current supply chain constraints and inflationary pressures; and
objectives of management for future operations and creating
long-term value. These statements are neither promises nor
guarantees, but involve known and unknown risks, uncertainties and
other important factors that may cause our actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements, including, but not limited to, the
following: the COVID-19 pandemic could adversely impact our
business, financial condition and results of operations; our
ability to compete successfully in the highly competitive
industries in which we operate; our ability to maintain and enhance
our brand; the success of our retail store and retail partnerships
expansion plans; our ability to successfully implement our growth
strategies related to launching new products; the effectiveness and
efficiency of our marketing programs; our ability to manage our
current operations and to manage future growth effectively; our
past results may not be indicative of our future operating
performance; our ability to manage our supply chain commensurate
with demand and successfully and timely deliver merchandise to our
retail partners and customers; our ability to attract new customers
or retain existing customers; the growth of the market for sleep as
a retail category and our ability to become a leader or maintain
our leadership in the category; the impact of social media and
influencers on our reputation; our ability to protect and maintain
our intellectual property; our exclusive reliance on third-party
contract manufacturers whose efforts we are unable to fully
control; our ability to effectively implement strategic
initiatives; our ability to transfer our supply chain and other
business processes to a global scale; risks relating to
fluctuations in the cost and availability of raw materials and
fuel; risks relating to our international operations and expansion;
we are dependent on our retail partners; general economic and
business conditions; we or our service providers could be subject
to system failures, cyber-based attacks or interruptions and
security breaches or other incidents; risks relating to changing
legal and regulatory requirements, and any failure to comply with
applicable laws and regulations; we may be subject to product
liability claims and other litigation; we may experience
fluctuations in our quarterly operating results; we have and expect
to continue to incur significant losses; risks relating to our
indebtedness; our need for additional funding, which may not be
available; risks relating to taxes; our ability to attract and
retain qualified personnel; future sales by us our stockholders may
cause the market price of our stock to decline; and risks and
additional costs relating to our status as a new public company.
These and other important factors discussed under the caption “Risk
Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2020 and our other filings with the Securities and
Exchange Commission could cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent
management’s estimates as of the date of this press release. While
we may elect to update such forward-looking statements at some
point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change.
Financial Results Advisory
The financial results for the three and six months ended June
30, 2021 disclosed in this press release are unaudited and are
subject to revision based on the completion of review procedures
and the execution of the Company’s internal control over financial
reporting
Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental measure of our performance
that is not required by, or presented in accordance with, GAAP.
Adjusted EBITDA is not a measurement of our financial performance
under GAAP and should not be considered as an alternative to net
income or any other performance measure derived in accordance with
GAAP.
We define Adjusted EBITDA as net loss before interest (income)
expense, income tax expense and depreciation and amortization as
further adjusted to exclude the impact of stock-based compensation
expense, restructuring costs, costs associated with legal
settlements, and transaction costs incurred in connection with our
initial public offering. We caution investors that amounts
presented in accordance with our definition of Adjusted EBITDA may
not be comparable to similar measures disclosed by our competitors,
because not all companies and analysts calculate Adjusted EBITDA in
the same manner. We present Adjusted EBITDA because we consider it
to be an important supplemental measure of our performance and
believe it is frequently used by securities analysts, investors,
and other interested parties in the evaluation of companies in our
industry. Management believes that investors’ understanding of our
performance is enhanced by including this non-GAAP financial
measure as a reasonable basis for comparing our ongoing results of
operations.
Management uses Adjusted EBITDA:
- as a measurement of operating performance because it assists us
in comparing the operating performance of our business on a
consistent basis, as it removes the impact of items not directly
resulting from our core operations;
- for planning purposes, including the preparation of our
internal annual operating budget and financial projections;
- to evaluate the performance and effectiveness of our
operational strategies; and
- to evaluate our capacity to expand our business.
By providing this non-GAAP financial measure, together with the
reconciliation, we believe we are enhancing investors’
understanding of our business and our results of operations, as
well as assisting investors in evaluating how well we are executing
our strategic initiatives. Adjusted EBITDA has limitations as an
analytical tool, and should not be considered in isolation, or as
an alternative to, or a substitute for net income or other
financial statement data presented in our consolidated financial
statements as indicators of financial performance. Some of the
limitations are:
- such measure does not reflect our cash expenditures;
- such measure does not reflect changes in, or cash requirements
for, our working capital needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and such measures do not reflect any cash
requirements for such replacements; and
- other companies in our industry may calculate such measures
differently than we do, limiting their usefulness as comparative
measures.
Due to these limitations, Adjusted EBITDA should not be
considered as a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these
limitations by relying primarily on our GAAP results and using this
non-GAAP measure only supplementally. As noted in the table below,
Adjusted EBITDA includes adjustments to exclude the impact of
stock-based compensation expense and material infrequent items,
including but not limited to the costs of our initial public
offering, restructuring, and costs associated with legal
settlements, among other items. It is reasonable to expect that
these items will occur in future periods. However, we believe these
adjustments are appropriate because the amounts recognized can vary
significantly from period to period, do not directly relate to the
ongoing operations of our business and may complicate comparisons
of our internal operating results and operating results of other
companies over time. In addition, Adjusted EBITDA includes
adjustments for other items that we do not expect to regularly
record following our initial public offering. Each of the normal
recurring adjustments and other adjustments described in this
paragraph and in the reconciliation table below help management
with a measure of our core operating performance over time by
removing items that are not related to day-to-day operations.
Casper Sleep Inc. and
Subsidiaries Consolidated Balance Sheets (In thousands, except per
share amounts) (Unaudited)
As of
Assets
June 30, 2021
December 31, 2020
Current assets:
Cash and cash equivalents
$
49,658
$
88,922
Restricted cash
—
3,162
Accounts receivable, net
33,045
27,663
Prepaid expenses and other current
assets
13,098
11,026
Inventory, net
58,050
35,531
Total current assets
153,851
166,304
Property and equipment, net
55,934
66,529
Other assets
1,342
1,368
Total assets
$
211,127
$
234,201
Liabilities and Stockholders’ (Deficit)
/ Equity
Current liabilities:
Accounts payable
$
54,713
$
47,612
Accrued expenses
66,129
54,741
Deferred revenue
9,596
7,430
Short-term debt
16,000
—
Other current liabilities
10,907
9,498
Total current liabilities
157,345
119,281
Long-term debt
50,375
65,546
Other liabilities
25,488
23,907
Total liabilities
233,208
208,734
Stockholders’ (deficit) / equity:
Common stock, $0.000001 par value -
170,000 and 170,000 shares authorized; 41,451 and 40,539 issued and
outstanding as of June 30, 2021 and December 31, 2020,
respectively
—
—
Additional paid-in capital
447,626
440,248
Accumulated other comprehensive income
34
34
Accumulated deficit
(469,741
)
(414,815
)
Total stockholders’ (deficit)/equity
(22,081
)
25,467
Total liabilities and stockholders’
(deficit) / equity
$
211,127
$
234,201
Casper Sleep Inc. and
Subsidiaries Consolidated Statements of Operations and
Comprehensive Loss (In thousands, except share and per share
amounts) (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenue
$
151,756
$
110,196
$
279,434
$
223,240
Cost of goods sold
79,223
53,131
140,218
113,211
Gross profit
72,533
57,065
139,216
110,029
Operating expenses
Sales and marketing expenses
39,897
33,181
80,427
70,655
General and administrative expense
48,159
42,017
92,663
89,004
Restructuring expenses
17,584
4,129
17,985
5,440
Total operating expenses
105,640
79,327
191,075
165,099
Loss from operations
(33,107
)
(22,262
)
(51,859
)
(55,070
)
Other (income) expense
Net interest expense
1,781
2,152
4,297
4,308
Other (income) expense, net
(1,159
)
(219
)
(1,266
)
(733
)
Total other expenses, net
622
1,933
3,031
3,575
Loss before income taxes
(33,729
)
(24,195
)
(54,890
)
(58,645
)
Income tax expense
17
10
36
26
Net loss
(33,746
)
(24,205
)
(54,926
)
(58,671
)
Other comprehensive income (loss)
Currency translation adjustment
(53
)
(737
)
(34
)
(290
)
Total comprehensive loss
$
(33,799
)
$
(24,942
)
$
(54,960
)
$
(58,961
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.81
)
$
(0.61
)
$
(1.34
)
$
(1.74
)
Weighted-average number of shares used in
computing net loss per share attributable to common stockholders,
basic and diluted
41,439,468
39,708,401
41,118,464
33,808,771
Casper Sleep Inc. and
Subsidiaries Consolidated Statement of Cash Flows (In
thousands) (Unaudited)
Six Months Ended June
30,
2021
2020
Cash flows used in operating
activities:
Net loss
$
(54,926
)
$
(58,671
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
7,967
7,735
Stock based compensation expense
7,349
5,945
Asset impairments
8,933
—
Other
(2,641
)
1,553
Changes in assets and liabilities:
Accounts receivable, net
(5,382
)
7,684
Prepaid expenses and other current
assets
(2,072
)
9,790
Inventory, net
(22,519
)
1,533
Other assets
22
764
Accounts payable
7,772
(3,019
)
Accrued expenses
11,388
(12,319
)
Deferred revenue
2,166
(2,453
)
Other liabilities
6,461
(4,975
)
Net cash used in operating activities
(35,482
)
(46,433
)
Cash flows used in investing
activities:
Purchases of property and equipment
(6,974
)
(10,777
)
Net cash used in investing activities
(6,974
)
(10,777
)
Cash flows (used in) provided by financing
activities:
Exercise of stock options and warrants
29
141
Proceeds from equity issuance
—
87,999
Proceeds from borrowings
3,000
—
Repayment on borrowings
(3,000
)
—
Net cash (used in) provided by financing
activities
29
88,140
Effect of exchange rate changes
1
(290
)
Net change in cash, cash equivalents, and
restricted cash
(42,426
)
30,640
Cash, cash equivalents, and restricted
cash at beginning of period
92,084
67,578
Cash, cash equivalents, and restricted
cash at end of the period
$
49,658
$
98,218
Supplemental disclosure of cash paid
for:
Interest paid
$
(3,187
)
$
(2,822
)
Casper Sleep Inc. and
Subsidiaries Reconciliation of Non-GAAP Metrics (In
thousands) (unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2021
2020
2021
2020
Net loss
$
(33,746
)
$
(24,205
)
$
(54,926
)
$
(58,671
)
Income tax expense
17
10
36
26
Interest (income) expense
1,781
2,152
4,297
4,308
Depreciation and amortization
4,144
3,195
7,967
6,343
Stock based compensation(a)
3,563
3,284
7,349
5,945
Restructuring(b)
17,584
4,129
17,985
5,440
Legal settlements(c)
—
—
—
1,500
Transaction costs(d)
—
—
—
787
Adjusted EBITDA
$
(6,656
)
$
(11,435
)
$
(17,292
)
$
(34,322
)
Three Months Ended September
30, 2020
Three Months Ended
September 30, 2021 Estimated
(in thousands)
Actual
Low
High
Net loss
$
(15,856
)
$
(22,630
)
$
(19,630
)
Income tax expense
20
—
—
Interest (income) expense
2,127
2,230
2,230
Depreciation and amortization
3,313
4,200
4,200
Stock-based compensation(a)
3,746
3,700
3,700
Restructuring(b)
155
—
—
Legal settlements(c)
(1,000
)
—
—
Transaction costs(d)
—
—
—
Adjusted EBITDA
$
(7,495
)
$
(12,500
)
$
(9,500
)
(a) Represents non-cash stock-based compensation expense.
(b) The 2020 costs are associated with implementing strategic
changes in the companies' business structure including reductions
in work force and exiting of certain lines of business or
geographies. The 2021 costs include lease exit costs and asset
impairments associated with the consolidation of office space into
the New York metro area and certain severance and other employee
separation costs.
(c) Amounts related to litigation settlements.
(d) Represents expenses incurred for professional, consulting,
legal, and accounting services performed in connection with our
initial public offering, which are not indicative of our ongoing
costs and which were discontinued following the completion of our
initial public offering.
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version on businesswire.com: https://www.businesswire.com/news/home/20210810005403/en/
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Investor Relations IR@casper.com
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