PR Newswire
SPOKANE, Wash., June 14, 2022
Long-Term Corporate Strategy Initiatives Taking Shape, Driven by Operations Emphasis on High-Value Opportunities within Retail and Agency Verticals
Renewed Contracts with Major Partners and $3 Million Annualized Reduced Operating Expenses Setting Foundation for Future Revenue Growth and Enhanced Profitability
SPOKANE, Wash., June 14, 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 first quarter ended April 30, 2022.
- Continued execution of corporate strategy designed to generate sustained revenue growth and profitability. In recent months, Kaspien has begun implementing a long-term plan designed to realign organizational focus to the following key areas:
- Promoted CFO Brock Kowalchuk to Interim CEO, effective March 11, 2022. Kowalchuk joined Kaspien in 2018 after several years at Goldman Sachs, where he held roles of increasing responsibility. Kowalchuk, along with the rest of Kaspien's senior leadership team, has been actively involved in implementing the Company's new strategic plan.
Management Commentary
"In the first quarter, we took several necessary steps to better align the focus of our organization for long-term stability," said Kaspien Interim CEO Brock Kowalchuk. "During the period, we reconcentrated our efforts on our Retail and Agency partners and have so far generated expense reductions of $3 million on an annualized basis. In keeping with our renewed focus on core partners, we have further rationalized our partner relationships to highlight profitability and growth potential."
"Externally, against the backdrop of a challenged macroeconomic environment, we continued to engage with core partners and successfully renewed contracts with some of our top customers. We also further leaned into our portfolio of Private Label Brands, which saw a 55% increase in Net Revenue vs. the first quarter of 2021, and began key supply chain initiatives to help reduce excess inventory from late last year. While our transition process will take time, we have seen encouraging signs as our gap against the prior year has continued to close as the year has progressed. We are excited to unlock further growth opportunities with our existing brand partners as we continue driving our working capital improvements and executing on our updated corporate strategy."
Fiscal First Quarter 2022 Financial Results
Results compare 2022 fiscal first quarter ended April 30, 2022 to 2021 fiscal first quarter ended May 1, 2021 unless otherwise indicated.
| | | Thirteen Weeks Ended | | | | | Change | | ||||||||||
(amounts in thousands) | | | April 30, 2022 | | | May 1, 2021 | | | | | $ | | | | % | | |||
| | | | | | | | | | | | | | ||||||
Merchandise margin | | | $ | 14,046 | | | $ | 18,982 | | | | | $ | (4,936) | | | | (26.0) | % |
% of net revenue | | | | 44.2 | % | | | 46.7 | % | | | | | (2.5) | % | | | | |
| | | | | | | | | | | | | | | | | | | |
Fulfillment fees | | | | (4,568) | | | | (6,449) | | | | | | (1,881) | | | | (29.2) | % |
Warehousing and freight | | | | (2,627) | | | | (2,737) | | | | | | (110) | | | | (4.0) | % |
Gross profit | | | $ | 6,851 | | | $ | 9,796 | | | | | $ | (2,945) | | | | (30.1) | % |
| | | | | | | | | | | | | | | | | | | |
% of net revenue | | | | 21.6 | % | | | 24.1 | % | | | | | | | | | | |
Key Performance Indicators (KPIs)
Unless otherwise specified, KPI data has been recorded as of fiscal first quarter (April 30, 2022).
Kaspien plans to file its quarterly Form 10-Q today, June 14, 2022, in accordance with SEC filing deadlines.
About Kaspien
Kaspien Holdings Inc. (f/k/a Trans World Entertainment Corporation) (NASDAQ: KSPN) is a leading, global e-commerce accelerator that deploys AI-driven software and end-to-end services to optimize and grow brands on Amazon, Walmart, Target, eBay, and other online marketplaces. Rebranded as Kaspien in 2020, the Company has spent more than a decade developing a marketplace growth platform of proprietary technologies that maximize supply chain resilience, optimize marketing, strengthen brand control, and provide predictive analytics. Serving a variety of brands, distributors, agencies and FBA aggregators, Kaspien accelerates growth by tailoring an extensive suite of seller services to its partners' dynamic e-commerce needs. The Company has a long track record of success, having served over 4,000 brands in 20 countries. Kaspien's mastery of the e-commerce space and commitment to rapid innovation has earned the trust of many leading brands. 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) interest expense; and (iii) 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 Loss from operations, net loss or cash used in operating activities, as determined in accordance with GAAP.
| Thirteen Weeks Ended | |
| April 30, | May 1, |
(amounts in thousands) | 2022 | 2021 |
| | |
Net loss | $ (4,428) | $ (1,416) |
Income tax expense | - | - |
Interest expense | 762 | 555 |
Loss from operations | (3,666) | (861) |
Depreciation expense | 293 | 603 |
EBITDA | $ (3,373) | $ (258) |
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
Investor Relations Contact
Gateway Investor Relations
Matt Glover and Tom Colton
949-574-3860
KSPN@gatewayir.com
-Financial Tables to Follow-
KASPIEN HOLDINGS INC. AND SUBSIDIARIES | ||
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