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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.)
|
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
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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ITEM 2.02. |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 7.01. |
REGULATION FD DISCLOSURE
|
ITEM 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS
|
99.1
|
Kaspien Holding Inc. Press Release dated December 9, 2021.
|
99.2
|
Kaspien Holdings Inc. Transcript for Earnings Call held on December 9, 2021.
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Dated: December 14, 2021
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Kaspien Holding Inc.
|
||
By:
|
/s/ Edwin Sapienza
|
||
Name: Edwin Sapienza
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|||
Title: Chief Financial Officer
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Exhibit No.
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Description
|
Kaspien Holding Inc. press release date December 9, 2021
|
|
Kaspien Holdings Inc. Transcript for Earnings Call held on December 9, 2021.
|
● |
Fiscal third quarter 2021 Subscription gross merchandise value (“GMV”) increased 15% to $30.1
million (47.3% of total GMV), compared to $26.2 million (39.2% of total GMV) in the comparable year-ago period.
|
● |
Kaspien Private Label brands grew 38% over the comparable year-ago period. Sales from Kaspien Private Label brands improved largely as a result of being under end-to-end supply chain management. The Company believes these continued, strong
results in controlled areas is indicative of broader sustained demand across the portfolio, which is currently being impacted due to global supply chain challenges.
|
● |
Amended existing
loan agreement with Eclipse Business Capital, providing additional flexibility to execute on the Company’s long-term business initiatives and aligning capital sources with Kaspien’s growth goals.
|
● |
Appointed David
Sayyed Vice President of Brand Growth. In this newly created role, Sayyed will leverage his expertise in strategic brand growth and developing frameworks to strengthen Kaspien's brand portfolio of existing partner relationships as well as
enhance the current services and offerings for customers.
|
● |
To better align with the growth goals of the Company and to support its aspirations of global scale, during the third quarter Kaspien introduced a newly architected Senior Leadership Team (“SLT”). Tenets of the SLT include: 1. improved
value chain alignment with a clear focus on better serving partners and building an infrastructure to support that mission; 2. flatter organization structure, with greater emphasis on clearer accountability; 3. eliminated single points of
failure; 4. more teamwork and collaboration with fewer communication barriers.
|
● |
Earned second
consecutive and fourth overall ‘Best Places to Work Inland Northwest’ honor and recognized as one of Seattle Business Magazine’s ‘Washington’s 100 Best Places to Work in 2021.’ These acknowledgements highlight company-wide efforts to increase professional growth and development opportunities as well as
an abiding dedication to work-life balance and spaces for creativity that define the ethos of Kaspien.
|
● |
Net revenue decreased 17% to $32.2 million from $38.9 million in the comparable year-ago period. The decrease in net revenue was primarily attributable to ongoing supply challenges in the Company’s Fulfillment
by Amazon (“FBA”) US segment, which were offset by continued growth in the Company’s other marketplaces.
|
● |
Gross profit decreased 17% to $8.0 million or 24.9% of net revenue from $9.6 million or 24.7% of
net revenue in the comparable year-ago period. The decrease in gross profit was primarily attributable to a reduction in net revenue
on the Amazon US platform. Gross margin year-over-year increased slightly as the leveraging of freight and warehousing costs was partially offset a decline in merchandise margin. The table below
summarizes the year-over-year comparison of gross margin:
|
Thirteen Weeks Ended
|
||||||||
October 30,
|
October 31,
|
|||||||
(amounts in thousands)
|
2021
|
2020
|
||||||
Merchandise margin
|
$
|
14,653
|
$
|
17,978
|
||||
% of net revenue
|
45.5
|
%
|
46.2
|
%
|
||||
Fulfillment fees
|
(4,375
|
)
|
(6,479
|
)
|
||||
Warehousing and freight
|
(2,274
|
)
|
(1,898
|
)
|
||||
Gross profit
|
$
|
8,004
|
$
|
9,601
|
||||
% of net revenue
|
24.9
|
%
|
24.7
|
%
|
● |
Selling, General & Administrative (“SG&A”) expenses decreased 2% to $10.0 million or 31.1%
of net revenue from $10.2 million or 26.2% of net revenue in the comparable year-ago period. The decrease in SG&A expenses was
primarily attributable to a $1.1 million decrease in selling expenses related to the decline in net revenue.
|
● |
Loss from operations was $2.0 million, compared to a loss from operations of $612,000 in the comparable year-ago period. The increase in operating loss was the result of the decline in net revenue, partially offset by a decrease in cost of
sales and SG&A expenses.
|
● |
Net loss was $886,000, or $0.36 per diluted share, compared to a net income of $2.6 million, or $1.39 per diluted share, in the comparable year-ago period. The net loss was driven by the decline in net
revenue, partially offset by a decrease in cost of sales, other income of $1.6 million related to the settlement of an insurance claim and a decrease in SG&A expenses.
|
● |
Adjusted EBITDA loss (a non-GAAP metric reconciled below) was $1.4 million compared to adjusted EBITDA loss of $65,000 in the comparable year-ago period.
|
● |
As of October 30, 2021, the Company had $1.8 million in cash, compared to $1.8 million as of January 30, 2021 and $2.4 million as of October 31, 2020.
|
● |
Inventory at quarter end was $30.2 million, compared to $27.2 million as of October 31, 2020.
|
● |
As of October 30, 2021, the Company had $5.9 million in borrowings under its credit facility and had $6.8 million available for borrowing.
|
● |
Net revenue decreased 5% to $107.7 million from $112.8 million in the comparable year-ago period. This decrease in net revenue was driven by ongoing supply challenges in the Company’s FBA US segment, offset by
improved performance from non-Amazon marketplaces and the subscriptions segment.
|
● |
Gross profit was $26.6 million or 24.7% of net revenue, compared to $28.2 million or 25.0% of net revenue over the comparable year-ago period. The decrease in gross profit was a result of decreased net revenue combined with higher
warehousing and freight expenses. The table below summarizes the year-over-year comparison of gross margin:
|
Thirty-Nine Weeks Ended
|
||||||||
October 30,
|
October 31,
|
|||||||
(amounts in thousands)
|
2021
|
2020
|
||||||
Merchandise margin
|
$
|
49,309
|
$
|
51,879
|
||||
% of net revenue
|
45.8
|
%
|
46.0
|
%
|
||||
Fulfillment fees
|
(16,218
|
)
|
(18,343
|
)
|
||||
Warehousing and freight
|
(6,455
|
)
|
(5,332
|
)
|
||||
Gross profit
|
$
|
26,636
|
$
|
28,204
|
||||
% of net revenue
|
24.7
|
%
|
25.0
|
%
|
● |
SG&A expenses decreased 10% to $30.9 million or 28.7% of net revenue from $34.5 million or 30.6% of net revenue in the comparable year-ago period. The decrease in SG&A expenses was due to a $1.0 million decrease in selling expenses
related to the decline in net revenue and a $2.6 million decline in general and administrative expenses.
|
● |
Loss from operations totaled $4.3 million, an improvement from $6.3 million in the comparable year-ago period. The improvement in operating results was the result of the reduction in SG&A expenses.
|
● |
Net loss was $2.2 million, compared to a loss of $3.8 million in the comparable year-ago period. The improvement to net loss was driven by the reduction in SG&A expenses and other income of $3.5
million, which was offset by a slight decrease in net revenues.
|
● |
Adjusted EBITDA loss (a non-GAAP metric reconciled below) was $2.5 million, compared to a loss of $4.7 million in the comparable year-ago period.
|
● |
Cash used in operations was $10.0 million, compared to $15.3 million in the comparable year-ago period.
|
● |
Fiscal third quarter 2021 GMV decreased 5% to $63.5 million, compared to $66.8 million in the
comparable year-ago period. Subscription GMV increased 15% to $30.1 million (47.3% of total GMV), compared to $26.2 million (39.2% of total GMV) in the comparable year-ago period.
|
● |
Fiscal third quarter 2021 GMV per active partner decreased 4% to $81,300 from $84,700 in the third quarter of fiscal 2020. This decrease was due to the overall decrease in GMV during the quarter. However, 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.
|
● |
Total active partner count for period ended October 30, 2021 was approximately 781, including 628 retail partners and 153 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 October 30, 2021 increased 47% compared to the
comparable year-ago period.
|
● |
Subscription lifetime value to customer acquisition cost (“LTV:CAC”) ratio as of October 30, 2021 was 3.8x with an average payback period of 13 months. The increase in LTV:CAC was largely attributable to an
increase in lifetime value, spread across a larger cohort basis, at a greater rate than the increase in costs to acquire a customer. The increased LTV was largely driven by a decrease in customer churn rate. Customer acquisition costs also
increased during the period as a result of greater investments in acquiring high-value prospects as well as additional headcount increases to support anticipated future growth in subsequent quarters. As subscription partners continue to
mature and adopt more features of the Kaspien platform, the Company expects these metrics to fluctuate less on a quarterly basis and generally improve over time.
|
● |
Retail lifetime value to customer acquisition cost as of October 30, 2021 was 8.1x with an average payback period of 7.2 months. The sequential change was largely attributable to an increase in customer
acquisition costs as the Company focused on converting larger partners.
|
● |
During the fiscal third quarter, subscription monthly recurring revenue (“MRR”) increased approximately 15% to $151,000 compared to $131,000 at the end of the comparable year-ago period.
|
● |
Retail segment gross revenue per partner for the fiscal third quarter decreased 10% to $53,000 from $59,000 in the comparable year-ago period.
|
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 30,
|
October 31,
|
October 30,
|
October 31,
|
|||||||||||||
(amounts in thousands)
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Net loss
|
$
|
(886
|
)
|
$
|
2,552
|
$
|
(2,221
|
)
|
$
|
(3,754
|
)
|
|||||
Income tax expense (benefit)
|
-
|
(3,545
|
)
|
46
|
(3,545
|
)
|
||||||||||
Other income
|
(1,567
|
)
|
-
|
(3,530
|
)
|
-
|
||||||||||
Interest expense
|
439
|
381
|
1,455
|
1,016
|
||||||||||||
Loss from operations
|
(2,014
|
)
|
(612
|
)
|
(4,250
|
)
|
(6,283
|
)
|
||||||||
Depreciation expense
|
572
|
547
|
1,796
|
1,554
|
||||||||||||
Adjusted EBITDA
|
$
|
(1,442
|
)
|
$
|
(65
|
)
|
$
|
(2,454
|
)
|
$
|
(4,729
|
)
|
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||||||||||||||||||
October 30,
2021
|
% to Net
Revenue
|
October 31,
2020
|
% to Net
Revenue
|
October 30,
2021
|
% to Net
Revenue
|
October 31,
2020
|
% to Net
Revenue
|
|||||||||||||||||||||||||
Net revenue
|
$
|
32,172
|
$
|
38,913
|
$
|
107,680
|
$
|
112,799
|
||||||||||||||||||||||||
Cost of sales
|
24,168
|
75.1
|
%
|
29,312
|
75.3
|
%
|
81,044
|
75.3
|
%
|
84,595
|
75.0
|
%
|
||||||||||||||||||||
Gross profit
|
8,004
|
24.9
|
%
|
9,601
|
24.7
|
%
|
26,636
|
24.7
|
%
|
28,204
|
25.0
|
%
|
||||||||||||||||||||
Selling, general and administrative expenses
|
10,018
|
31.1
|
%
|
10,213
|
26.2
|
%
|
30,886
|
28.7
|
%
|
34,487
|
30.6
|
%
|
||||||||||||||||||||
Loss from operations
|
(2,014
|
)
|
-6.3
|
%
|
(612
|
)
|
-1.6
|
%
|
(4,250
|
)
|
-3.9
|
%
|
(6,283
|
)
|
-5.6
|
%
|
||||||||||||||||
Interest expense
|
439
|
1.4
|
%
|
381
|
1.0
|
%
|
1,455
|
1.4
|
%
|
1,015
|
0.9
|
%
|
||||||||||||||||||||
Other loss
|
(1,567
|
)
|
-4.9
|
%
|
-
|
0.0
|
%
|
(3,530
|
)
|
-3.3
|
%
|
-
|
0.0
|
%
|
||||||||||||||||||
Income (loss) before income tax expense
|
(886
|
)
|
-2.8
|
%
|
(993
|
)
|
-2.6
|
%
|
(2,175
|
)
|
-2.0
|
%
|
(7,298
|
)
|
-6.5
|
%
|
||||||||||||||||
Income tax expense (benefit)
|
-
|
0.0
|
%
|
(3,545
|
)
|
-9.1
|
%
|
46
|
0.0
|
%
|
(3,545
|
)
|
-3.1
|
%
|
||||||||||||||||||
Net income (loss)
|
$
|
(886
|
)
|
-2.8
|
%
|
$
|
2,552
|
6.6
|
%
|
$
|
(2,221
|
)
|
-2.1
|
%
|
$
|
(3,753
|
)
|
-3.3
|
%
|
|||||||||||||
BASIC AND DILUTED INCOME PER SHARE:
|
||||||||||||||||||||||||||||||||
Basic income (loss) per common share
|
$ |
(0.36 |
) |
$ |
1.40
|
|
$ |
(0.92
|
) |
$ |
(2.06
|
) |
||||||||||||||||||||
Weighted average number of common shares outstanding – basic
|
2,491
|
1,825
|
|
2,404
|
1,823
|
|||||||||||||||||||||||||||
Diluted income (loss) per common share
|
$ |
(0.36
|
) |
$ |
1.39
|
|
$ |
(0.92
|
) |
$ |
(2.06
|
) |
||||||||||||||||||||
Weighted average number of common shares outstanding – diluted
|
2,491
|
1,829
|
|
2,404
|
1,823
|
October 30,
|
January 30,
|
October 31,
|
||||||||||
2021
|
2021
|
2020
|
||||||||||
ASSETS
|
Unaudited
|
Unaudited
|
||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
$
|
1,754
|
$
|
1,809
|
$
|
2,396
|
||||||
Restricted cash
|
1,158
|
1,184
|
950
|
|||||||||
Accounts receivable
|
2,566
|
2,718
|
2,465
|
|||||||||
Merchandise inventory
|
30,248
|
24,515
|
27,204
|
|||||||||
Prepaid expenses and other current assets
|
760
|
564
|
836
|
|||||||||
Total current assets
|
36,486
|
30,790
|
33,851
|
|||||||||
Restricted cash
|
2,732
|
3,562
|
4,082
|
|||||||||
Fixed assets, net
|
2,251
|
2,268
|
2,343
|
|||||||||
Operating lease right-of-use assets
|
2,284
|
2,742
|
2,887
|
|||||||||
Intangible assets, net
|
-
|
732
|
989
|
|||||||||
Cash Surrender Value
|
4,413
|
3,856
|
3,438
|
|||||||||
Other assets
|
1,074
|
1,342
|
1,787
|
|||||||||
TOTAL ASSETS
|
$
|
49,241
|
$
|
45,292
|
$
|
49,377
|
||||||
LIABILITIES
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Accounts payable
|
$
|
6,743
|
$
|
8,894
|
$
|
8,559
|
||||||
Short-term borrowings
|
5,858
|
6,339
|
8,483
|
|||||||||
Accrued expenses and other current liabilities
|
2,685
|
2,512
|
4,745
|
|||||||||
Current portion of operating lease liabilites
|
636
|
596
|
583
|
|||||||||
Current portion of PPP Loan
|
-
|
1,687
|
1,356
|
|||||||||
Total current liabilities
|
15,922
|
20,028
|
23,726
|
|||||||||
Operating lease liabilities
|
1,764
|
2,258
|
2,412
|
|||||||||
PPP Loan
|
-
|
330
|
662
|
|||||||||
Long-term debt
|
4,161
|
5,000
|
4,581
|
|||||||||
Other long-term liabilities
|
15,515
|
16,187
|
15,857
|
|||||||||
TOTAL LIABILITIES
|
37,362
|
43,803
|
47,238
|
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; 3,902,985,
3,336,576 and 3,235,576 shares issued, respectively)
|
39
|
33
|
32
|
|||||||||
Additional paid-in capital
|
359,100
|
346,495
|
346,470
|
|||||||||
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
|
)
|
(1,470
|
)
|
||||||
Accumulated deficit
|
(115,084
|
)
|
(112,863
|
)
|
(112,724
|
)
|
||||||
TOTAL SHAREHOLDERS' EQUITY
|
11,878
|
1,489
|
2,139
|
|||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
49,240
|
$
|
45,292
|
$
|
49,377
|
Document and Entity Information |
Dec. 09, 2021 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Dec. 09, 2021 |
Entity Registrant Name | Kaspien Holdings Inc. |
Entity Incorporation, State or Country Code | NY |
Entity File Number | 0-14818 |
Entity Tax Identification Number | 14-1541629 |
Entity Address, Address Line One | 2818 N. Sullivan Rd. |
Entity Address, Address Line Two | Ste 130 |
Entity Address, City or Town | Spokane Valley |
Entity Address, State or Province | WA |
Entity Address, Postal Zip Code | 99216 |
City Area Code | 855 |
Local Phone Number | 300-2710 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000795212 |
Title of 12(b) Security | Common shares, $0.01 par value per share |
Trading Symbol | KSPN |
Security Exchange Name | NASDAQ |
-8?20$3;8T.P6BP^0"X99K>]9!:G