TSXV: JK OTCQB:
JKHCF FRA: 68Z
Having Surpassed $14
Million in Total Revenue in Fiscal 2022 so far, the Company
is Focusing on Widening Margins, Eliminating Excess Costs and
Optimizing Operations
VANCOUVER, BC, Aug. 30,
2022 /CNW/ - Just Kitchen Holdings Corp.
("JustKitchen" or the "Company") (TSXV: JK) (OTCQB: JKHCF)
(FRA: 68Z), an operator of ghost kitchens specializing in
the development of delivery-only food brands, announces that it has
filed its unaudited financial results for the third fiscal quarter
ending June 30, 2022, the highlights
of which are included in this news release. The full set of
Condensed Consolidated Interim Financial Statements and Management
Discussion and Analysis can be viewed by visiting the Company's
website at en.justkitchen.com or its profile page on SEDAR at
www.sedar.com.
Financial
Highlights
- Total revenue grew 55% to $5,171,312 and by 92% to $14,377,333 for the three- and nine-month periods
ended June 30, 2022, respectively as
compared to $3,346,897 and
$7,482,348 for the three-and
nine-month periods ended June 30,
2021, respectively;
- Retail order volume grew by 46% to 313,883 and by 96% to
901,546 orders for the three- and nine-month periods ended
June 30, 2022, respectively, from
214,744 and 460,944 orders for the three- and nine-month periods
ended June 30, 2021,
respectively;
- Number of ghost kitchens increased 65% to 28 with an average
retail delivery size of $14.88 per
order for the three months ending June 30,
2022, from 17 ghost kitchens with an average retail delivery
size of $14.77 per order for the same
period in 2021;
- Adjusted EBITDA losses were $3,371,450 and $10,560,542 for the three- and nine-month periods
ended June 30, 2022, respectively, as
compared to losses of $2,056,192 and
$5,178,122 for the same three and
nine-month periods of the prior year, respectively. The increase in
Adjusted EBITDA losses for the quarter ended June 30, 2022 is primarily as the result of an
overall increase in business activities, international expansions
and an increase in general and administrative costs from
$2,108,664 in Q3 2021 to $2,795,667 in Q3 2022, mainly due to salaries
increasing from $394,632 in Q3 2021
to $1,018,062 in Q3 2022 due
primarily to an increase in the number of employees and
consultants; and
- Net losses were $4,549,714 and
$13,563,474 for the three- and
nine-month periods ended June 30,
2022, respectively, as compared to $2,836,847 and $7,796,806 for the same three-and nine-month
periods of the prior year, respectively, due to the same primary
reasons listed above.
Management Commentary
"JustKitchen continues to serve more food to a growing number of
on-the-go consumers across Asia.
Cresting $14 million dollars in total
revenue for the first nine months of fiscal 2022 is a testament to
customers valuing the convenience of service, taste of our meals
and appeal of our brands," said Jason
Chen, Co-Founder and Chief Executive Officer of
JustKitchen.
"Reaching this point in the maturation of our company has been
exciting. We are now ready to shift our focus to widening margins,
eliminating excess costs and optimizing operations through specific
technologies, as we have recently announced. Since revenue growth
has been proven out, we expect to make significant margin
improvements though a multi-pronged expense reduction plan without
impacting revenues. Already, in July we achieved location-level
profitability in Taiwan and
the Philippines. Therefore, we
expect the impact of the cost-saving measures to be more pronounced
in the end of year financial statements," added Mr. Chen.
Summary of Key Financial Measures
|
Quarter
ended
June 30,
2022
$
|
Quarter
ended
June 30,
2021
$
|
Number of
kitchens
|
28
|
17
|
Revenue from retail
customers
|
$4,671,630
|
$3,171,851
|
Revenue from business
customers
|
$499,682
|
$175,046
|
Total
Revenue
|
$5,171,312
|
$3,346,897
|
Number of retail
deliveries
|
313,883
|
214,744
|
Average retail delivery
size
|
$14.88
|
$14.77
|
Net loss
|
$(4,549,714)
|
$(2,836,847)
|
Comprehensive
loss
|
$(4,463,121)
|
$(2,915,959)
|
Basic loss per
share
|
$(0.06)
|
$(0.05)
|
Diluted loss per
share
|
$(0.06)
|
$(0.05)
|
The following is a reconciliation of Adjusted EBITDA to Income
(Loss) from Operations:
|
Quarter
ended
June 30,
2022
$
|
Quarter
ended
June 30,
2021
$
|
Loss for the
period
|
(4,549,714)
|
(2,836,847)
|
Interest
expense
|
30,945
|
28,400
|
Depreciation
expense
|
502,149
|
259,208
|
Amortization
expense
|
19,099
|
-
|
EBITDA
Loss
|
(3,997,521)
|
(2,549,239)
|
Stock-based
compensation
|
626,071
|
493,047
|
Adjusted EBITDA
Loss
|
(3,371,450)
|
(2,056,192)
|
1.
|
Adjusted EBITDA is a
financial measure that does not have a standardized meaning under
IFRS. Adjusted EBITDA is defined as earnings before interest
expense, depreciation, amortization, and stock-based
compensation. As there is no standardized method of
calculating Adjusted EBITDA, it may not be directly comparable with
similarly titled measures used by other companies. The
Company considers Adjusted EBITDA to be a relevant indicator for
measuring trends in performance and its ability to generate funds
to service its debt and to meet its future working capital and
capital expenditure requirements. Adjusted EBITDA is not a
generally accepted earnings measure and should not be considered in
isolation or as an alternative to net income (loss), cash flows or
other measures of performance prepared in accordance with
IFRS.
|
Corporate Highlights Subsequent
to June 30, 2022
The Company:
- Started implementing margin improvement measures after its
rapid growth phase;
- Embarked on optimizing its operations using specific
technologies;
- Began working with Chef Richie
Lin on a hybrid fast-fine restaurant and ghost kitchen;
- Launched the C'mon Eat Mini Hot Pot and Pizza Central NY Style
food brands; and
- Decided to exit the Singapore
market after completing a pilot phase of operations.
Regional Summary
As of the date of the MD&A, the Company reports the
following key location and brand statistics:
- 27 total locations across Taiwan, Hong
Kong, Malaysia and
the Philippines
-
- One of the Company's large Taiwan-based kitchens prepares and provides
food for 14 7-Eleven convenience stores and two Taichung TSMC
factories
- Customers are offered 33 food brands across four
countries:
-
- 18 in Taiwan, eight in
Hong Kong, five in Malaysia and two in the Philippines
Operating Outlook
The Company has been focused on expanding rapidly within the
Asian market since its inception and has incurred certain expenses
in conjunction with these expansion efforts. This strategy has
resulted in the Company building an efficient and sustainable ghost
kitchen operational model which it is now applying to its expansion
strategy within Southeast Asia.
The Company believes Southeast
Asia is the largest and most economically addressable market
for a ghost kitchen operator, based on key factors including
current and forecasted demand, higher population densities relative
to alternative markets, and lower operating costs compared to
alternative markets.
Moving forward, JustKitchen is focused on sustainable
growth. As such, the Company is aggressively reducing its
expenditures while incrementally increasing revenue to reach
profitability. The Company plans to implement several key
strategies to reduce Capex and Opex and improve margins
including:
- Reducing cost of goods sold;
- Focusing on B2B clients that provide higher margins;
- Effective cost cutting;
- Focusing on driving store-level profitability;
- Focusing on high margin market(s); and
- Building alternative and recurring revenue streams.
ABOUT JUSTKITCHEN
Just Kitchen Holdings Corp. (the "Company" or
"Just Kitchen") is primarily
an operator of ghost kitchens specializing in the development and
marketing of proprietary and franchised delivery-only food brands
for customers and businesses. The Company currently operates in
Taiwan, Hong Kong, the
Philippines and Malaysia.
It has also signed an agreement that will allow JustKitchen to sell
several of its proprietary food brands in Japan and it has also signed a brand swap
agreement in India. Where
appropriate, JustKitchen utilizes a hub-and-spoke operating model,
which features advanced food preparation taking place at larger hub
kitchens and final meal preparation taking place at smaller spoke
kitchens located in areas with higher population densities. The
Company combines this operating model with online and mobile
application-based food ordering via its proprietary mobile food
ordering app and other third-party ordering apps. Delivery is
fulfilled by third-party delivery companies, to minimize capital
investments and operating expenses and reach more customers in
underserved markets. The Company's other business, JustMarket, is
an e-commerce grocery delivery platform that allows customers to
purchase groceries for delivery or add select grocery items to
meals ordered through JustKitchen.
For more information about the Company, please visit
investors.justkitchen.com. JustKitchen's final prospectus,
financial statements and management's discussion and analysis,
among other documents, are all available on the Company's profile
page on SEDAR at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
FORWARD-LOOKING
STATEMENTS
This news release contains certain "forward-looking statements"
within the meaning of such statements under applicable securities
law. Forward-looking statements are frequently characterized by
words such as "anticipates", "plan", "continue", "expect",
"project", "intend", "believe", "anticipate", "estimate", "may",
"will", "potential", "proposed", "positioned" and other similar
words, or statements that certain events or conditions "may" or
"will" occur including but not limited to the Company's comments
regarding focusing on widening margins, eliminating excess costs
and optimizing operations through specific technologies; serving
more food to a growing number of on-the-go consumers across
Asia; expecting to make
significant margin improvements though a multi-pronged expense
reduction plan without impacting revenues; and expecting the impact
of the cost-saving measures to be more pronounced in the end of
year financial statements. These statements are only predictions.
Various assumptions were used in drawing the conclusions or making
the projections contained in the forward-looking statements
throughout this news release. Forward-looking statements are based
on the opinions and estimates of management at the date the
statements are made and are subject to a variety of risks,
including those risk factors identified in the Company's prospectus
dated March 26, 2021, and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. The Company is under no obligation, and
expressly disclaims any intention or obligation, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
SOURCE Just Kitchen Holdings Corp.