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SPOKANE, Wash., Sept. 13, 2022 /PRNewswire/ -- Kaspien Holdings Inc. (NASDAQ: KSPN) ("Kaspien" or the "Company"), a leading e-commerce marketplace growth platform, today reported financial results for the fiscal second quarter ended July 30, 2022.
Recent Operational Highlights
Management Commentary
"In response to the decline in operating results in Fiscal 2021, we implemented several strategic initiatives to create operational efficiencies while focusing diligently on inventory and cash management. Our team continues to be focused on scalable, efficient growth and improving the unit economic of our business as we enter the holiday season." said Kaspien interim CEO Brock Kowalchuk
Fiscal Second Quarter 2022 Financial Results
Results compare 2022 fiscal second quarter ended July 30, 2022 to 2021 fiscal second quarter ended July 31, 2021 unless otherwise indicated.
Thirteen Weeks Ended
Change
(amounts in
thousands)
July 30, 2022
July 31, 2021
$
%
Merchandise margin
$
14,121
$
15,936
$
(1,815)
-11.4 %
% of net revenue
41.6 %
45.7 %
-4.1 %
Fulfillment fees
(4,655)
(5,393)
738
-13.7 %
Warehousing and freight
(2,739)
(1,708)
(1,031)
60.4 %
Gross profit
$
6,727
$
8,835
$
(2,108)
-23.9 %
% of net revenue
19.8 %
25.3 %
Fiscal First Half 2022 Financial Results
Results compare six months ended July 30, 2022 to six months ended July 31, 2021 unless otherwise indicated.
Twenty-Six Weeks Ended
July 30,
July 31,
(amounts in thousands)
2022
2021
Merchandise margin
$
28,167
$
34,656
% of net revenue
42.9 %
45.9 %
Fulfillment fees
(9,222)
(11,843)
Warehousing and freight
(5,366)
(4,182)
Gross profit
$
13,579
$
18,631
% of net revenue
20.7 %
24.7 %
About Kaspien
Kaspien Holdings Inc. (f/k/a Trans World Entertainment Corporation) (NASDAQ: KSPN) is a leading e-commerce marketplace growth platform, offering an expanding suite of software and services to help brands grow on Amazon, Walmart, Target, eBay, and other online marketplaces. Founded in 1972 as a brick-and-mortar retailer and rebranded as Kaspien in 2020, the Company has spent the last decade building and utilizing proprietary technologies for brand protection, marketing optimization, and fulfillment efficiency to generate rapid revenue growth for its partners. Through innovative strategies and best-in-class technologies, Kaspien has earned the trust of many leading brands, including 3M, Strider Bikes, and ZippyPaws. For more information, visit kaspien.com.
Non-GAAP Financial Measures
Adjusted EBITDA is defined as net loss, adjusted to exclude: (i) income tax expense; (ii) Other (income) loss; (iii) interest expense; and (iv) depreciation expense. Our method of calculating adjusted EBITDA may differ from other issuers and accordingly, this measure may not be comparable to measures used by other issuers. We use adjusted EBITDA to evaluate our own operating performance and as an integral part of our planning process. We present adjusted EBITDA as a supplemental measure because we believe such a measure is useful to investors as a reasonable indicator of operating performance. We believe this measure is a financial metric used by many investors to compare companies. This measure is not a recognized measure of financial performance under GAAP in the United States and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP.
Thirteen Weeks Ended
Twenty-Six Weeks Ended
July 30,
July 31,
July 30,
July 31,
(amounts in thousands)
2022
2021
2022
2021
Net loss
$ (4,416)
$ 82
$ (8,846)
$ (1,335)
Income tax expense (benefit)
43
46
43
46
Other (income) loss
-
(1,963)
-
(1,963)
Interest expense
901
461
1,663
1,015
Loss from operations
(3,472)
(1,375)
(7,140)
(2,237)
Depreciation expense
300
621
594
1,224
Adjusted EBITDA
$ (3,172)
$ (754)
$ (6,546)
$ (1,013)
About Key Performance Indicators
Gross Merchandise Value ("GMV") is the total value of merchandise sold over a given time period through a customer-to-customer exchange site. For Kaspien, it is the measurement of merchandise value sold across all channels and partners within the Kaspien platform.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this communication are forward-looking statements. The statements contained herein that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.
We have used the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", and similar terms and phrases, including references to assumptions, in this document to identify forward-looking statements. These forward-looking statements are made based on management's expectations and beliefs concerning future events and are subject to uncertainties and factors that could cause actual results to differ materially from the results expressed in the statements. The following factors are among those that may cause actual results to differ materially from the Company's forward-looking statements: risk of disruption of current plans and operations of Kaspien and the potential difficulties in customer, supplier and employee retention; the outcome of any legal proceedings that may be instituted against the Company; the Company's level of debt and related restrictions and limitations, unexpected costs, charges, expenses, or liabilities; the Company's ability to operate as a going-concern; deteriorating economic conditions and macroeconomic factors; the impact of the COVID-19 pandemic; and other risks described in the Company's filings with the SEC, such as its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.
The reader should keep in mind that any forward-looking statement made by us in this document, or elsewhere, pertains only as of the date on which we make it. New risks and uncertainties come up from time-to-time and it's impossible for us to predict these events or how they may affect us. In light of these risks and uncertainties, you should keep in mind that any forward-looking statements made in this document or elsewhere might not occur.
Company Contact
Ed Sapienza
Chief Financial Officer
509-202-4261
esapienza@kaspien.com
-Financial Tables to Follow-
KASPIEN HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Thirteen Weeks Ended
Twenty-six Weeks Ended
July 30,
% to Net
Revenue
July 31,
% to Net
Revenue
July 30,
% to Net
Revenue
July 31,
% to Net
Revenue
2022
2021
2022
2021
Net revenue
$ 33,907
$ 34,890
$ 65,697
$ 75,507
Cost of sales
27,178
80.2 %
26,055
74.7 %
52,118
79.3 %
56,876
75.3 %
Gross profit
6,729
19.8 %
8,835
25.3 %
13,579
20.7 %
18,631
24.7 %
Selling, general and administrative expenses
10,201
30.1 %
10,210
29.3 %
20,719
31.5 %
20,868
27.6 %
Loss from operations
(3,472)
-10.2 %
(1,375)
-3.9 %
(7,140)
-10.9 %
(2,237)
-3.0 %
Interest expense
901
2.7 %
461
1.3 %
1,663
2.5 %
1,015
1.3 %
Other (income) expense
-
0.0 %
(1,963)
-5.6 %
-
0.0 %
(1,963)
-2.6 %
Income (loss) before income tax expense
(4,373)
-12.9 %
128
0.4 %
(8,803)
-13.4 %
(1,289)
-1.7 %
Income tax expense
43
0.1 %
46
0.1 %
43
0.1 %
46
0.1 %
Net income (loss)
$ (4,416)
-13.0 %
$ 82
0.2 %
$ (8,846)
-13.5 %
$ (1,335)
-1.8 %
BASIC AND DILUTED INCOME PER SHARE:
Basic income (loss) per common share
$ (1.69)
$ 0.03
$ (3.47)
$ (0.56)
Weighted average number of common shares outstanding – basic
2,613
2,491
2,553
2,404
Diluted income (loss) per common share
$ (1.69)
$ 0.03
$ (3.47)
$ (0.56)
Weighted average number of common shares outstanding – diluted
2,613
2,538
2,553
2,404
KASPIEN HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share and share amounts)
July 30,
January 29,
July 31,
2022
2022
2021
ASSETS
Unaudited
Unaudited
CURRENT ASSETS
Cash and cash equivalents
$ 1,309
$ 1,218
$ 2,570
Restricted cash
1,158
1,158
1,184
Accounts receivable
2,082
2,335
2,805
Merchandise inventory
29,363
29,277
25,024
Prepaid expenses and other current assets
618
649
1,056
Total current assets
34,530
34,637
32,639
Restricted cash
1,873
2,447
2,992
Fixed assets, net
2,357
2,335
2,301
Operating lease right-of-use assets
1,823
2,144
2,447
Intangible assets, net
-
-
218
Cash Surrender Value
3,768
4,154
4,277
Other assets
777
965
1,157
TOTAL ASSETS
$ 45,128
$ 46,682
$ 46,031
LIABILITIES
CURRENT LIABILITIES
Accounts payable
$ 8,012
$ 6,271
$ 7,599
Short-term borrowings
3,855
9,966
-
Accrued expenses and other current liabilities
1,753
2,362
1,941
Current portion of operating lease liabilites
550
649
622
Total current liabilities
14,170
19,248
10,162
Operating lease liabilities
1,416
1,608
1,942
Long-term debt
8,548
4,356
5,526
Other long-term liabilities
13,788
14,185
15,721
TOTAL LIABILITIES
37,922
39,397
33,351
SHAREHOLDERS' EQUITY
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)
-
-
-
Common stock ($0.01 par value; 200,000,000 shares authorized; 3,911,825,
3,902,985 and 3,902,985 shares issued, respectively)
39
39
39
Additional paid-in capital
263,723
359,220
359,016
Treasury stock at cost (771,514, 1,410,378 and 1,410,378 shares, respectively)
(125,906)
(230,170)
(230,170)
Accumulated other comprehensive loss
(910)
(910)
(2,007)
Accumulated deficit
(129,740)
(120,894)
(114,198)
TOTAL SHAREHOLDERS' EQUITY
7,206
7,285
12,680
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 45,128
$ 46,682
$ 46,031
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SOURCE Kaspien Holdings Inc.