New York
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0-14818
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14-1541629
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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☐ |
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ |
Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common shares, $0.01 par value per share
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KSPN
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NASDAQ Stock Market
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ITEM 2.02. |
ITEM 7.01. |
REGULATION FD DISCLOSURE
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ITEM 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS
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99.1 |
Kaspien Holding Inc. Press Release dated June 10, 2021.
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99.2
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Kaspien Holdings Inc. Transcript for Earnings Call held on June 10, 2021.
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Dated: June 14, 2021
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Kaspien Holding Inc.
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By:
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/s/ Edwin Sapienza
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Name: Edwin Sapienza
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Title: Chief Financial Officer
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Exhibit No.
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Description
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Kaspien Holding Inc. press release date June 10, 2021
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Kaspien Holdings Inc. Transcript for Earnings Call held on June 10, 2021.
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● |
Raised approximately $13.5 million, prior to deducting underwriting discounts and commissions and estimated offering expenses, in an underwritten offering of 416,600 shares of
common stock of the Company at a price to the public of $32.50 per share. The Company intends to use the proceeds from the offering for general corporate purposes, including working capital to implement its strategic plans focused on
brand acquisition, investments in technology to enhance its scalable platform and its core retail business.
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● |
Obtained approval
to sell on Target.com through invite-only Target+ Program. As a Target+ partner, Kaspien is one of a few hand selected third-party merchants currently approved to sell on Target.com. Nearly 20 brands to-date have already
applied to Kaspien’s waitlist for the Target marketplace.
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● |
Launched pilot omnichannel partnership with international grocery brand Kroger; conducted initial testing beginning in the fiscal second quarter.
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● |
Doubled subscription team headcount over the last quarter to support continued growth efforts.
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● |
Expanded pipeline of potential brand acquisitions, including many existing Kaspien customers.
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● |
Net revenue increased 29% to $40.6 million from $31.6 million in the comparable year-ago period. The increase in net revenue was primarily attributable to continued strength on Amazon International, Walmart, Target and other
marketplaces.
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● |
Gross profit increased 24% to $9.8 million (24.1% of net revenue) from $7.9 million (25.1% of net revenue) in the comparable year-ago period. During the quarter, the Company reclassified certain line items into operating expenses, which
were historically included in cost of goods sold, including commissions. The prior year period has been updated accordingly to ensure reporting is on a like-for-like basis. The increase in gross profit was primarily attributable to an
increase in net revenue and an increase in the merchandise margin rate to 46.7% from 46.2% in the comparable year-ago period. The table below summarizes the year-over-year comparison of gross margin:
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Thirteen Weeks Ended
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||||||||
(amounts in thousands)
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May 1, 2021
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May 2, 2020
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||||||
Merchandise margin
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$
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18,982
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$
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14,609
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||||
% of net revenue
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46.7
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%
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46.2
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%
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||||
Fulfillment fees
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(6,449
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)
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(4,997
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)
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||||
Warehousing and freight
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(2,737
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)
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(1,694
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)
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||||
Gross profit
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$
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9,796
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$
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7,918
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||||
% of net revenue
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24.1
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%
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25.1
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%
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● |
Loss from operations was $861,000, compared to a loss from operations of $5.2 million in the comparable year-ago period. The improvement in operating results was the result of higher net revenue and reduction in SG&A expenses.
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● |
Net loss was $1.4 million, or $0.61 per diluted share, compared to a net loss of $5.4 million, or
$2.97 per diluted share, in the comparable year-ago period.
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● |
Adjusted EBITDA (a non-GAAP metric reconciled below) was a loss of $258,000, compared to an
adjusted EBITDA loss of $4.7 million in the comparable year-ago period.
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● |
As of May 1, 2021, the Company had $5.0 million in cash, compared to $1.8 million as of January 30, 2021 and $7.1 million as of May 2, 2020. During the quarter, the Company raised approximately $13.5 million in gross proceeds, prior to
deducting underwriting discounts, commissions, and estimated offering expenses, in an underwritten offering of 416,600 shares of common stock at a price to the public of $32.50 per share. A portion of these proceeds were used to pay back
$6.3 million in short term borrowings, among other expenditures.
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● |
Cash used in operations was $2.5 million, compared to $6.5 million as of May 2, 2020.
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● |
Inventory at quarter end was $22.6 million, compared to $17.2 million as of May 2, 2020.
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As of May 1, 2021, the Company had no borrowings under its credit facility and had $10.9 million available for borrowing.
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Fiscal first quarter 2021 gross merchandise value (“GMV”) increased 48% to $63.4 million,
compared to $42.9 million in the comparable year-ago period. Subscription GMV increased 105% to $20.9 million (33.0% of total GMV), compared to $10.2 million (23.7% of total GMV) in the comparable year-ago period.
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● |
Fiscal first quarter 2021 GMV per active partner increased 37% to $75,000 from $55,000 in the first quarter of fiscal 2020. The Company expects this metric to steadily grow over time as active partners derive more value from the Kaspien
platform, leading to greater partner sales and increased engagement across more product lines.
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● |
Total active partner count for period ending May 1st, 2021 was approximately 845, including 708 retail partners and 137 subscription (Agency and SaaS) partners. In support of the Company’s focus on maximizing GMV per active
partner, Kaspien regularly reviews and updates partner counts to optimize its use of resources on higher-value, active partners. The Company’s subscriptions partner base as of May 1, 2021 increased 124% at the end of the comparable year-ago
period.
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● |
Subscription lifetime value to customer acquisition cost (“LTV:CAC”) ratio as of May 1, 2021 was 3.4x with an average payback period of 7.7 months. As subscription partners continue to mature and adopt more features of the Kaspien
platform, Company expects these metrics to improve over time.
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● |
During the fiscal first quarter, subscription monthly recurring revenue (“MRR”) increased approximately 106% to $149,000 compared to $73,000 at the end of the comparable year-ago period.
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● |
Retail segment gross revenue per partner for the fiscal first quarter increased 32% to $60,000 from $45,000 in the comparable year-ago period.
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Thirteen Weeks Ended
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||||||||
(amounts in thousands)
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May 1,
2021
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May 2,
2020
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||||||
Net loss
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$
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(1,416
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)
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$
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(5,406
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)
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Income tax expense (benefit)
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-
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-
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||||||
Interest expense
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555
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228
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||||||
Loss from operations
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(861
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)
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(5,178
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)
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||||
Depreciation expense
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603
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491
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||||||
Adjusted EBITDA
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$
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(258
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)
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$
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(4,687
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)
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Thirteen Weeks Ended
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||||||||
May 1,
2021
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May 2,
2020
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|||||||
Net revenue
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$
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40,617
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$
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31,589
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||||
Cost of sales
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30,821
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23,671
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||||||
Gross profit
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9,796
|
7,918
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||||||
Selling, general and administrative expenses
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10,657
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13,096
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||||||
Loss from operations
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(861
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)
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(5,178
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)
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||||
Interest expense
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555
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228
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||||||
Loss from operations before income tax expense
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(1,416
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)
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(5,406
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)
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||||
Income tax expense
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-
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-
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||||||
Net loss
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$
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(1,416
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)
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$
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(5,406
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)
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BASIC AND DILUTED INCOME PER SHARE:
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||||||||
Basic and diluted loss per common share
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$
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(0.61
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)
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$
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(2.97
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)
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Weighted average number of common shares outstanding – basic and diluted
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2,317
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1,820
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May 1,
2021
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January 30,
2021
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May 2,
2020
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||||||||||
ASSETS
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||||||||||||
CURRENT ASSETS
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||||||||||||
Cash and cash equivalents
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$
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5,030
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$
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1,809
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$
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7,078
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||||||
Restricted cash
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1,184
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1,184
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950
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|||||||||
Accounts receivable
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3,113
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2,718
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2,644
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|||||||||
Merchandise inventory
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22,567
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24,515
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17,157
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|||||||||
Prepaid expenses and other current assets
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592
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564
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639
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|||||||||
Total current assets
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32,486
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30,790
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28,468
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|||||||||
Restricted cash
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3,277
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3,562
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4,648
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|||||||||
Fixed assets, net
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2,366
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2,268
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2,256
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|||||||||
Operating lease right-of-use assets
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2,595
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2,742
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3,171
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|||||||||
Intangible assets, net
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475
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732
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1,503
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|||||||||
Cash Surrender Value
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4,168
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3,856
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3,056
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|||||||||
Other assets
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1,230
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1,342
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2,138
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|||||||||
TOTAL ASSETS
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$
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46,597
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$
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45,292
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$
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45,240
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||||||
LIABILITIES
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||||||||||||
CURRENT LIABILITIES
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||||||||||||
Accounts payable
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$
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5,682
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$
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8,894
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$
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5,938
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||||||
Short-term borrowings
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-
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6,339
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4,531
|
|||||||||
Accrued expenses and other current liabilities
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2,640
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2,512
|
5,046
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|||||||||
Current portion of operating lease liabilites
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609
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596
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551
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|||||||||
Current partion of PPP loan
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2,018
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1,687
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-
|
|||||||||
Total current liabilities
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10,949
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20,028
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16,066
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|||||||||
Operating lease liabilities
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2,101
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2,258
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2,714
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|||||||||
PPP Loan
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-
|
330
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2,018
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|||||||||
Long-term debt
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5,261
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5,000
|
4,170
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|||||||||
Other long-term liabilities
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15,954
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16,187
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19,820
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|||||||||
TOTAL LIABILITIES
|
34,265
|
43,803
|
44,788
|
|||||||||
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; 3,889,169,3,336,576 and 3,235,576 shares issued, respectively)
|
39
|
33
|
32
|
|||||||||
Additional paid-in capital
|
358,749
|
346,495
|
346,442
|
|||||||||
Treasury stock at cost (1,410,417, 1,410,378 and 1,410,378 shares, respectively)
|
(230,170
|
)
|
(230,169
|
)
|
(230,169
|
)
|
||||||
Accumulated other comprehensive loss
|
(2,007
|
)
|
(2,007
|
)
|
(1,476
|
)
|
||||||
Accumulated deficit
|
(114,279
|
)
|
(112,863
|
)
|
(114,377
|
)
|
||||||
TOTAL SHAREHOLDERS' EQUITY
|
12,332
|
1,489
|
452
|
|||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
46,597
|
$
|
45,292
|
$
|
45,240
|