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BARK Reports Third Quarter Fiscal Year 2024 Results

BARK, Inc. (NYSE: BARK) (“BARK” or the “Company”), a leading global omnichannel dog brand with a mission to make all dogs happy, today announced its financial results for the fiscal third quarter ended December 31, 2023.

Key Highlights

  • Total revenue was $125.1 million, ahead of the high-end of the Company's guidance range and a 6.9% decrease compared to the same period last year.
  • Consolidated gross margin was 61.8%, a 210 basis point increase compared to the same period last year and a 610 basis point improvement versus the third quarter of fiscal 2022.
  • Net loss improved 52.5% to $(10.1) million, year-over-year.
  • Adjusted EBITDA was $(6.4) million, the midpoint of the Company's guidance range and a $6.4 million improvement versus last year.
  • Net cash provided by operating activities was $15.0 million and free cash flow was $13.3 million.

"Our results last quarter highlight the significant strides we've made as a public company. We delivered our strongest customer acquisition quarter in two years, surpassed the high-end of our revenue guidance range, and improved our gross margin by over 200 basis points year-over-year," said Matt Meeker, Co-Founder and Chief Executive Officer. "We also cut our Adjusted EBITDA loss in half versus last year, and generated $13 million of free cash flow in the quarter, and $17 million on a trailing twelve month basis. We believe these results, combined with our recent retail treat partnerships, position us strongly as we approach fiscal 2025."

Key Performance Indicators

 

Three Months Ended

December 31,

 

Nine Months Ended December 31,

 

 

 

2023

 

2022

 

2023

 

2022

Total Orders (in thousands)

 

3,504

 

 

 

3,721

 

 

 

10,425

 

 

 

11,278

 

Average Order Value

$

31.65

 

 

$

32.27

 

 

$

31.38

 

 

$

31.57

 

Direct to Consumer Gross Profit (in thousands)

$

70,801

 

 

$

74,197

 

 

$

208,062

 

 

$

217,057

 

Direct to Consumer Gross Margin

 

63.8

%

 

 

61.8

%

 

 

63.6

%

 

 

61.0

%

Fiscal Third Quarter 2024 Highlights

  • Revenue was $125.1 million, ahead of the Company's guidance range and driven by its strongest customer acquisition quarter in two years. Revenue declined 6.9% year-over-year primarily driven by fewer total orders in the most recent period, largely related to carrying fewer Barkbox and Super Chewer subscriptions into the quarter, compared to last year.
  • Direct to Consumer (“DTC”) revenue was $110.9 million, a 7.6% decrease year-over-year, primarily related to the items discussed above.
  • Commerce revenue was $14.2 million, a 0.6% decrease year-over-year.
  • Gross profit was $77.2 million, a 3.7% decrease compared to last year.
  • Gross margin was 61.8%, as compared to 59.7% in the same period last year. The increase was driven by new contract pricing delivering a reduction in unit cost of goods in the most recent period.
  • Advertising and marketing expenses were $25.1 million as compared to $21.7 million in the previous year. The Company invested more in marketing in the current period due to the efficiency at which it was able to acquire customers.
  • General and administrative ("G&A") expenses were $66.1 million, as compared to $80.2 million in the prior year. This decrease was largely driven by a reduction in headcount and improved shipping terms.
  • Net loss was $(10.1) million, as compared to a net loss of $(21.3) million in the previous year.
  • Adjusted EBITDA was $(6.4) million, a $6.4 million improvement compared to last year and at the midpoint of the Company's guidance range. The continued improvement in unit economics also enabled the Company to invest more in marketing in the current period, particularly given the efficiency at which it was able to acquire new customers.
  • Net cash provided by operating activities was $15.0 million. Free cash flow, defined as net cash provided by (used in) operating activities less capital expenditures, was $13.3 million, an improvement of $12.9 million compared to the same period last year.

"We've been very pleased with our ability to deliver consistent improvements in our profitability profile," said Zahir Ibrahim, Chief Financial Officer of BARK. "There is still work to do, however, we believe the business has reached an inflection point from a profitability standpoint. We expect to be Adjusted EBITDA positive in the fiscal fourth quarter and have solid visibility into bottom line improvements in fiscal 2025."

Balance Sheet Highlights

  • The Company’s cash and cash equivalents balance as of December 31, 2023 was $131.3 million, following the $45.0 million repurchase of its outstanding convertible notes.
  • The Company's inventory balance as of December 31, 2023 was $98.5 million, a decrease of $10.9 million compared to the prior quarter and a $46.8 million decrease compared to last year.

Partial Repurchase of 2025 Convertible Notes

As announced last quarter, the Company repurchased $45.0 million of the par value of its 2025 Convertible Notes (the "Notes") at a 6% discount in November. The repurchase amount, which was all cash, represented approximately 54% of the outstanding par value of the Notes. Following the transaction, the Company had $40.6 million of outstanding borrowings under the note purchase agreement as of quarter-end.

Fiscal Fourth Quarter and Full Year 2024 Financial Outlook

Based on current market conditions as of February 7, 2024, BARK is providing updated guidance for revenue and Adjusted EBITDA, which is a Non-GAAP financial measure, as follows.

For the fiscal full year 2024, the Company expects:

  • Total revenue growth of (8)% to (9)% year-over-year, revised from its prior guidance of (8)% to (11)%. The Company is increasing the low-end of its revenue range due to its stronger-than-expected third quarter results.
  • Adjusted EBITDA of $(9.8) million to $(11.8) million, compared to the its prior guidance of $(6.0) million to $(12.0) million. The change in the high-end of its range reflects the Company investing more in marketing in the period, given its ability to acquire new customers efficiently.

For the fiscal fourth quarter 2024, the Company expects:

  • Total revenue of $118.4 to $123.8 million.
  • Adjusted EBITDA of $1.0 million to $3.0 million.

We do not provide guidance for Net Loss due to the uncertainty and potential variability of certain items, including stock-based compensation expenses and related tax effects, which are the reconciling items between Net Loss and Adjusted EBITDA. Because such items cannot be calculated or predicted without unreasonable efforts, we are unable to provide a reconciliation of Adjusted EBITDA to Net Loss. However, such items could have a significant impact on Net Loss.

The guidance provided above constitutes forward looking statements and actual results may differ materially. Please refer to the “Forward Looking Statements” section below for information on the factors that could cause our actual results to differ materially from these forward looking statements and “Non-GAAP Financial Measures” for additional important information regarding Adjusted EBITDA.

Conference Call Information

A conference call to discuss the Company's fiscal third quarter 2024 results will be held today, February 7, 2024, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

The conference call can be accessed by dialing 1-888-330-2120 for U.S. participants and 1-646-960-0290 for international participants. The conference call passcode is 5515653. A live audio webcast of the call will be available at https://investors.bark.co/ and will be archived for 1 year.

About BARK

BARK is the world’s most dog-centric company, devoted to making dogs happy with the best products, services and content. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, wildly satisfying treats, great food for your dog’s breed, effective and easy to use dental care, and dog-first experiences that foster the health and happiness of dogs everywhere. Founded in 2011, BARK loyally serves dogs nationwide with themed toys and treats subscriptions, BarkBox and BARK Super Chewer; custom product collections through its retail partner network, including Target and Amazon; its high-quality, nutritious meals made for your breed with BARK Food; and products that meet dogs’ dental needs with BARK Bright®. At BARK, we want to make dogs as happy as they make us because dogs and humans are better together. Sniff around at bark.co for more information.

Forward Looking Statements

This press release contains forward-looking statements relating to, among other things, the future performance of BARK that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” "anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about future operating results, including our strategies, plans, commitments, objectives and goals. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, risks relating to the uncertainty of the projected financial information with respect to BARK; the risk that spending on pets may not increase at projected rates; that BARK subscriptions may not increase their spending with BARK; BARK’s ability to continue to convert social media followers and contacts into customers; BARK’s ability to successfully expand its product lines and channel distribution; competition; the uncertain effects of the COVID-19 pandemic or other global or macroeconomic events or challenges.

More information about factors that could affect BARK's operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's quarterly report on Form 10-Q, copies of which may be obtained by visiting the Company’s Investor Relations website at https://investors.bark.co/ or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the Company on the date hereof. The Company assumes no obligation to update such statements.

Definitions of Key Performance Indicators

Total Orders

We define Total Orders as the total number of DTC orders shipped in a given period. These include all orders across all of our product categories, regardless of whether they are purchased on a subscription, auto-ship, or one-off basis.

Average Order Value

Average Order Value (“AOV”) is Direct to Consumer revenue for the period divided by Total Orders for the same period. In prior periods, the Company calculated AOV by dividing DTC revenue by total subscription shipments.

BARK, Inc.

 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

December 31,

 

December 31,

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

REVENUE

$

125,075

 

 

$

134,334

 

 

$

368,700

 

 

$

409,298

 

COST OF REVENUE

 

47,831

 

 

 

54,144

 

 

 

142,779

 

 

 

172,952

 

Gross profit

 

77,244

 

 

 

80,190

 

 

 

225,921

 

 

 

236,346

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

General and administrative

 

66,119

 

 

 

80,192

 

 

 

204,467

 

 

 

233,937

 

Advertising and marketing

 

25,094

 

 

 

21,747

 

 

 

60,523

 

 

 

53,441

 

Total operating expenses

 

91,213

 

 

 

101,939

 

 

 

264,990

 

 

 

287,378

 

LOSS FROM OPERATIONS

 

(13,969

)

 

 

(21,749

)

 

 

(39,069

)

 

 

(51,032

)

INTEREST INCOME

 

1,718

 

 

 

78

 

 

 

5,851

 

 

 

78

 

INTEREST EXPENSE

 

(902

)

 

 

(1,344

)

 

 

(3,648

)

 

 

(4,073

)

OTHER INCOME—NET

 

3,045

 

 

 

1,745

 

 

 

4,758

 

 

 

7,710

 

NET LOSS BEFORE INCOME TAXES

 

(10,108

)

 

 

(21,270

)

 

 

(32,108

)

 

 

(47,317

)

PROVISION FOR INCOME TAXES

 

 

 

 

 

 

 

 

 

 

 

NET LOSS AND COMPREHENSIVE LOSS

$

(10,108

)

 

$

(21,270

)

 

$

(32,108

)

 

$

(47,317

)

DISAGGREGATED REVENUE

(In thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2022

Revenue

 

 

 

 

 

 

 

Direct to Consumer:

 

 

 

 

 

 

 

Toys & Accessories(1)

$

71,183

 

$

78,383

 

$

210,433

 

$

232,396

Consumables(1)

 

39,720

 

 

41,692

 

 

116,666

 

 

123,622

Total Direct to Consumer

$

110,903

 

$

120,075

 

$

327,099

 

$

356,018

Commerce

 

14,172

 

 

14,259

 

 

41,601

 

 

53,280

Revenue

$

125,075

 

$

134,334

 

$

368,700

 

$

409,298

(1)

The allocation between Toys & Accessories and Consumables includes estimates and was determined utilizing data on stand-alone selling prices that the Company charges for similar offerings, and also reflects historical pricing practices. The three and nine months ended December 31, 2022 disaggregated revenue information for Direct to Consumer revenue has been reclassified to conform with the current presentation to allocate revenue between Toys & Accessories and Consumables.

GROSS PROFIT BY SEGMENT

(In thousands)

 

 

Three Months Ended

December 31,

 

Nine Months Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Direct to Consumer:

 

 

 

 

 

 

 

Revenue

$

110,903

 

$

120,075

 

$

327,099

 

$

356,018

Cost of revenue

 

40,102

 

 

45,878

 

 

119,037

 

 

138,961

Gross profit

 

70,801

 

 

74,197

 

 

208,062

 

 

217,057

Commerce:

 

 

 

 

 

 

 

Revenue

 

14,172

 

 

14,259

 

 

41,601

 

 

53,280

Cost of revenue

 

7,729

 

 

8,266

 

 

23,742

 

 

33,991

Gross profit

 

6,443

 

 

5,993

 

 

17,859

 

 

19,289

Consolidated:

 

 

 

 

 

 

 

Revenue

 

125,075

 

 

134,334

 

 

368,700

 

 

409,298

Cost of revenue

 

47,831

 

 

54,144

 

 

142,779

 

 

172,952

Gross profit

$

77,244

 

$

80,190

 

$

225,921

 

$

236,346

BARK, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

 

 

December 31,

 

March 31,

 

2023

 

2023

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

131,284

 

 

$

177,911

 

Accounts receivable—net

 

6,458

 

 

 

6,554

 

Prepaid expenses and other current assets

 

4,430

 

 

 

3,552

 

Inventory

 

98,471

 

 

 

124,336

 

Total current assets

 

240,643

 

 

 

312,353

 

PROPERTY AND EQUIPMENT—NET

 

27,214

 

 

 

39,851

 

INTANGIBLE ASSETS—NET

 

11,786

 

 

 

4,090

 

OPERATING LEASE RIGHT-OF-USE ASSETS

 

33,772

 

 

 

36,892

 

OTHER NONCURRENT ASSETS

 

7,215

 

 

 

7,234

 

TOTAL ASSETS

$

320,630

 

 

$

400,420

 

LIABILITIES, AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

25,586

 

 

$

34,370

 

Operating lease liabilities, current

 

4,425

 

 

 

5,484

 

Accrued and other current liabilities

 

31,951

 

 

 

31,975

 

Deferred revenue

 

29,018

 

 

 

27,772

 

Total current liabilities

 

90,980

 

 

 

99,601

 

LONG-TERM DEBT

 

39,826

 

 

 

81,221

 

OPERATING LEASE LIABILITIES

 

44,778

 

 

 

47,240

 

OTHER LONG-TERM LIABILITIES

 

700

 

 

 

1,821

 

Total liabilities

 

176,284

 

 

 

229,883

 

COMMITMENTS AND CONTINGENCIES

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

Common stock, par value $0.0001 per share—500,000,000 shares authorized; 179,786,374 and 177,647,754 shares issued

 

1

 

 

 

1

 

Treasury stock, at cost, 2,767,684 and no shares, respectively

 

(4,120

)

 

 

 

Additional paid-in capital

 

490,421

 

 

 

480,370

 

Accumulated deficit

 

(341,956

)

 

 

(309,834

)

Total stockholders’ equity

 

144,346

 

 

 

170,537

 

TOTAL LIABILITIES, AND STOCKHOLDERS’ EQUITY

$

320,630

 

 

$

400,420

 

BARK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Nine Months Ended

 

December 31,

 

December 31,

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(32,108

)

 

$

(47,317

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

Depreciation & amortization

 

8,899

 

 

 

6,508

 

Impairment of assets

 

3,079

 

 

 

1,661

 

Amortization of right-of-use assets

 

3,120

 

 

 

3,754

 

Loss on disposal of assets

 

72

 

 

 

 

Amortization of deferred financing fees and debt discount

 

478

 

 

 

494

 

Bad debt expense

 

34

 

 

 

803

 

Stock-based compensation expense

 

10,510

 

 

 

11,876

 

Provision for inventory obsolescence reserve

 

888

 

 

 

(2,486

)

Gain on extinguishment of debt

 

(1,828

)

 

 

 

Change in fair value of warrant liabilities and derivatives

 

(2,216

)

 

 

(6,523

)

Paid in kind interest on convertible notes

 

2,119

 

 

 

4,354

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

63

 

 

 

4,365

 

Inventory

 

24,975

 

 

 

10,333

 

Prepaid expenses and other current assets

 

(1,123

)

 

 

(222

)

Other noncurrent assets

 

 

 

 

155

 

Accounts payable and accrued expenses

 

(4,894

)

 

 

(5,339

)

Deferred revenue

 

1,247

 

 

 

1,367

 

Proceeds from tenant improvement allowances

 

 

 

 

6,177

 

Operating lease liabilities

 

(3,522

)

 

 

(2,307

)

Other liabilities

 

(2,687

)

 

 

(2,139

)

Net cash provided by (used in) operating activities

 

7,106

 

 

 

(14,486

)

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Capital expenditures

 

(6,699

)

 

 

(18,854

)

Net cash used in investing activities

 

(6,699

)

 

 

(18,854

)

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Payment of finance lease obligations

 

(161

)

 

 

(2,326

)

Proceeds from the exercise of stock options

 

105

 

 

 

980

 

Proceeds from issuance of common stock under ESPP

 

489

 

 

 

145

 

Tax payments related to the issuance of common stock

 

(1,011

)

 

 

(649

)

Excise tax from stock repurchases

 

(42

)

 

 

 

Payments to repurchase common stock

 

(4,120

)

 

 

 

Payments of long-term debt

 

(42,300

)

 

 

 

Net cash used in financing activities

 

(47,040

)

 

 

(1,850

)

 

 

 

 

Effect of exchange rate changes on cash

 

(14

)

 

 

(18

)

 

 

 

 

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

(46,647

)

 

 

(35,208

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—BEGINNING OF PERIOD

 

183,068

 

 

 

201,679

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD

$

136,421

 

 

$

166,471

 

 

 

 

 

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

 

 

 

Cash and cash equivalents

 

131,284

 

 

 

164,181

 

Restricted cash - Other noncurrent assets

 

5,137

 

 

 

2,290

 

Total cash, cash equivalents and restricted cash

$

136,421

 

 

$

166,471

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

Purchases of property and equipment included in accounts payable and accrued liabilities

$

38

 

 

$

342

 

Cash paid for interest

$

2,237

 

 

$

275

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

Establishment of operating lease

$

 

 

$

24,576

 

Lease modification and termination

$

 

 

$

3,532

 

Non-GAAP Financial Measures

We report our financial results in accordance with U.S. GAAP. However, management believes that Adjusted Net Loss, Adjusted Net Loss Margin, Adjusted Net Loss Per Common Share, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, all non-GAAP financial measures (together the “Non-GAAP Measures”), provide investors with additional useful information in evaluating our performance.

We calculate Adjusted Net Loss as net loss, adjusted to exclude: (1) stock-based compensation expense, (2) change in fair value of warrants and derivatives, (3) sales and use tax income, (4) non-cash impairment of previously capitalized software and prepaid software licenses, (5) restructuring charges related to reduction in force payment (6) duplicate headquarters rent expense, (7) gain on extinguishment of debt, and (8) other items (as defined below).

We calculate Adjusted Net Loss Margin by dividing Adjusted Net Loss for the period by Revenue for the period.

We calculate Adjusted Net Loss Per Common Share by dividing Adjusted Net Loss for the period by weighted average common shares used to compute net loss per share attributable to common stockholders for the period.

We calculate Adjusted EBITDA as net loss, adjusted to exclude: (1) interest income, (2) interest expense (3) depreciation and amortization, (4) stock-based compensation expense, (5) change in fair value of warrants and derivatives, (6) sales and use tax income, (7) non-cash impairment of previously capitalized software, (8) restructuring charges related to reduction in force payment, (9) duplicate headquarters rent expense, (10) gain on extinguishment of debt, and (11) other items (as defined below).

We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA for the period by revenue for the period.

We calculate Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures.

The Non-GAAP Measures are financial measures that are not required by, or presented in accordance with U.S. GAAP. We believe that the Non-GAAP Measures, when taken together with our financial results presented in accordance with U.S. GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of the Non-GAAP Measures are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation expense, which is an ongoing expense for our company, (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense. In addition, our use of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting their usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP, and (5) Free cash flow does not represent the total residual cash flow available for discretionary purposes and does not reflect our future contractual commitments.

The following table presents a reconciliation of Adjusted Net Loss to Net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin, Adjusted Net Loss Margin and Adjusted Net Loss Per Common Share for the periods presented:

Adjusted Net Loss

 

Three Months Ended

December 31,

 

Nine Months Ended

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in thousands, except per share data)

Net loss

$

(10,108

)

 

$

(21,270

)

 

$

(32,108

)

 

$

(47,317

)

Stock-based compensation expense

 

3,596

 

 

 

3,681

 

 

 

10,510

 

 

 

11,876

 

Change in fair value of warrants and derivatives

 

(782

)

 

 

(1,564

)

 

 

(2,216

)

 

 

(6,523

)

Sales and use tax income (1)

 

(18

)

 

 

(63

)

 

 

(155

)

 

 

(294

)

Impairment of assets

 

109

 

 

 

1,452

 

 

 

3,079

 

 

 

1,452

 

Restructuring

 

 

 

 

 

 

 

1,543

 

 

 

 

Duplicate headquarters rent

 

24

 

 

 

512

 

 

 

70

 

 

 

1,718

 

Gain on extinguishment of debt

 

(1,828

)

 

 

 

 

 

(1,828

)

 

 

 

Other items (2)

 

452

 

 

 

470

 

 

 

1,570

 

 

 

520

 

Adjusted net loss

$

(8,555

)

 

$

(16,782

)

 

$

(19,535

)

 

$

(38,568

)

Net loss margin

 

(8.08

)%

 

 

(15.83

)%

 

 

(8.71

)%

 

 

(11.56

)%

Adjusted net loss margin

 

(6.84

)%

 

 

(12.49

)%

 

 

(5.30

)%

 

 

(9.42

)%

 

 

 

 

 

 

 

 

Adjusted net loss per common share - basic and diluted

$

(0.05

)

 

$

(0.09

)

 

$

(0.11

)

 

$

(0.22

)

Weighted average common shares used to compute adjusted net loss per share attributable to common stockholders - basic and diluted

 

175,540,096

 

 

 

177,672,036

 

 

 

176,611,729

 

 

 

176,546,378

 

Weighted average common shares used to compute adjusted net loss per share attributable to common stockholders - diluted

 

175,540,096

 

 

 

177,672,036

 

 

 

176,611,729

 

 

 

176,546,378

 

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, and the calculation of net loss margin and Adjusted EBITDA margin for the periods presented:

Adjusted EBITDA

 

Three Months Ended

December 31,

 

Nine Months Ended

December 31,

 

2023

 

2022

 

2023

 

2022

 

(in thousands)

 

(in thousands)

Net loss

$

(10,108

)

 

$

(21,270

)

 

$

(32,108

)

 

$

(47,317

)

Interest income

 

(1,718

)

 

 

(78

)

 

 

(5,851

)

 

 

(78

)

Interest expense

 

902

 

 

 

1,344

 

 

 

3,648

 

 

 

4,073

 

Depreciation and amortization expense

 

2,958

 

 

 

2,700

 

 

 

8,899

 

 

 

6,508

 

Stock-based compensation expense

 

3,596

 

 

 

3,681

 

 

 

10,510

 

 

 

11,876

 

Change in fair value of warrants and derivatives

 

(782

)

 

 

(1,564

)

 

 

(2,216

)

 

 

(6,523

)

Sales and use tax income (1)

 

(18

)

 

 

(63

)

 

 

(155

)

 

 

(294

)

Impairment of assets

 

109

 

 

 

1,452

 

 

 

3,079

 

 

 

1,452

 

Restructuring

 

 

 

 

 

 

 

1,543

 

 

 

 

Duplicate headquarters rent

 

24

 

 

 

512

 

 

 

70

 

 

 

1,718

 

Gain on extinguishment of debt

 

(1,828

)

 

 

 

 

 

(1,828

)

 

 

 

Other items (2)

 

452

 

 

 

470

 

 

 

1,570

 

 

 

520

 

Adjusted EBITDA

$

(6,413

)

 

$

(12,816

)

 

$

(12,839

)

 

$

(28,065

)

Net loss margin

 

(8.08

)%

 

 

(15.83

)%

 

 

(8.71

)%

 

 

(11.56

)%

Adjusted EBITDA margin

 

(5.13

)%

 

 

(9.54

)%

 

 

(3.48

)%

 

 

(6.86

)%

(1)

Sales and use tax expense relates to recording a liability for sales and use tax we did not collect from our customers. Historically, we had collected state or local sales, use, or other similar taxes in certain jurisdictions in which we only had physical presence. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc., that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have positioned themselves to require sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state and accordingly, we recorded a liability in those periods in which we created economic nexus based on each state’s requirements. Accordingly, we now collect, remit, and report sales tax in all states that impose a sales tax. Subsequently, as certain of these liabilities are waived by tax authorities or the applicable statute of limitations expires, the related accrued liability is reversed.

 

 

(2)

For the three months ended December 31, 2023, other items is primarily comprised of the expense related to non-recurring retention payments to management of $0.4 million, and legal settlements of $0.1 million. For the three months ended December 31,2022, other items is comprised of executive transition costs including recruiting costs of $0.5 million. For the nine months ended December 31, 2023, other items is primarily comprised of the expense related to non-recurring retention payments to management of $0.9 million, warehouse consolidation costs of $0.2 million, executive transition costs including recruiting costs of $0.4 million, and legal settlements of $0.1 million. For the nine months ended December 31, 2022, other items is comprised of executive transition costs including recruiting costs of $0.5 million.

The following table presents a reconciliation of Free Cash Flow to Net cash used in operating activities, the most directly comparable financial measure prepared in accordance with U.S. GAAP, for each of the periods indicated:

Free Cash Flow

 

Three Months Ended

December 31,

 

Nine Months Ended

December 31,

 

2023

 

2022

 

2023

 

2022

Free cash flow reconciliation:

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

15,022

 

 

$

5,077

 

 

$

7,106

 

 

$

(14,486

)

Capital expenditures

 

(1,766

)

 

 

(4,746

)

 

 

(6,699

)

 

 

(18,854

)

Free cash flow

$

13,256

 

 

$

331

 

 

$

407

 

 

$

(33,340

)

 

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