Blue Apron Holdings, Inc. Reports First Quarter 2023 Results
Company Reduces Cash Burn by
First Quarter 2023 Highlights
-
Net revenue of
$113.1 million 5.9% sequential increase and a4.0% year-over-year decline, impacted by growth in customers and increased order volume in the quarter
-
Continued strength in customer engagement metrics
-
Average Order Value rose
11.6% year-over-year and declined3.9% sequentially to$70.27 -
Average Revenue per Customer increased
7.9% year-over-year and declined3.4% sequentially to$346
-
Average Order Value rose
-
Cash and cash equivalents were
$31.6 million -
Net loss of
$17.0 million $21.7 million $38.7 million -
Adjusted EBITDA loss of
$8.7 million $22.7 million $31.4 million -
Disciplined cash management drove improvements in net cash used in operating activities of
67% year-over-year and59% sequentially, and free cash flow improvements of64% year-over-year and57% sequentially - The company is actively pursuing one or more financing opportunities and/or other strategic transactions, including significant commercial partnerships, which need to close prior to the middle of June 2023 in order to meet its near-term obligations; the company does not have a definitive agreement for any such transactions at this time
Linda Findley, Blue Apron’s President and Chief Executive Officer, commented, “During the first quarter of 2023, we saw success in our efforts to continue driving efficiencies across the business. In marketing, we delivered a
“We recognize that while we continue to make improvements to our fundamentals, we need to bring more liquidity into the business in the near-term and we are actively pursuing all options available to us, including one or more financing opportunities and/or other strategic transactions, including significant commercial partnerships. In parallel, we continue to take a disciplined approach to cash management, reducing free cash flow by
Key Customer Metrics
Key customer metrics in the table below reflect the company’s product initiatives and targeted marketing investments and reductions, the seasonality of the company’s business, and other operating trends.
|
Three Months Ended |
|||||||
|
March 31, |
|
December 31 |
|
March 31, |
|||
|
2023 |
|
2022 |
|
2022 |
|||
Orders (in thousands) |
|
1,608 |
|
|
1,460 |
|
|
1,869 |
Customers (in thousands) |
|
326 |
|
|
298 |
|
|
367 |
Average Order Value |
$ |
70.27 |
|
$ |
73.15 |
|
$ |
62.99 |
Orders per Customer |
|
4.9 |
|
|
4.9 |
|
|
5.1 |
Average Revenue per Customer |
$ |
346 |
|
$ |
358 |
|
$ |
321 |
For a description of how Blue Apron defines and uses these key customer metrics, please see “Use of Key Customer Metrics” below.
First Quarter 2023 Financial Results
-
Net revenue decreased approximately
4% year-over-year to$113.1 million 6% sequentially, mainly driven by typical seasonal trends in the business reflecting increased Orders and Customers. -
Cost of goods sold, excluding depreciation and amortization (COGS), as a percentage of net revenue, improved 330 basis points year-over-year from
67.5% to64.2% driven by operational efficiencies across labor, food, shipping and packaging costs, as well as due to improved Average Order Value. COGS as a percentage of net revenue improved 90 basis points sequentially, mainly due to operational efficiencies, partially offset by typical seasonal trends in the business with increased promotional discounts in 1Q23. -
Marketing expenses were
$14.7 million 13% of net revenue, a47% decrease from 1Q22 and a14% decrease sequentially as a result of the company's deliberate expense management initiatives announced in 4Q22. -
Product, technology, general and administrative (PTG&A) expenses decreased
19% year-over-year to$35.7 million $44.0 million $3.0 million $0.2 million 4% quarter-over-quarter from$34.3 million 31.6% from37.3% in 1Q22 and32.1% in 4Q22. -
Loss on extinguishment of debt was
$1.9 million -
Net loss was
$17.0 million $0.26 $38.7 million $1.20 -
Adjusted EBITDA loss was
$8.7 million $31.4 million
Liquidity and Capital Resources
-
Cash and cash equivalents were
$31.6 million -
Cash used in operating activities totaled
$9.5 million $28.8 million -
Capital expenditures totaled
$1.3 million -
Free cash flow was
$(10.8) million $(30.1) million -
In February 2023, the company launched a
$70.0 million $70.0 million -
On March 15, 2023, the company amended its note purchase agreement requiring, among other things, beginning with execution of the amendment, the accelerated paydown of its then outstanding
$30.0 million $7.5 million $10.0 million $15 million $7.5 million - In order to meet its near-term obligations and continue to operate as a going concern, if the remaining obligations owed to the company from affiliates of Joseph N. Sanberg remain unfunded, the company will need sufficient additional financing prior to the middle of June. The company is actively pursuing one or more financing opportunities and/or other strategic transactions, including significant commercial partnerships, although there is no assurance that the company can close any such transaction.
Conference Call and Webcast
Blue Apron will host a conference call and live webcast today at 8:30 a.m. Eastern Time. The earnings conference call can be accessed by dialing 1-877-883-0383. The conference ID is 7204547. Alternatively, participants may access the live webcast on Blue Apron’s Investor Relations website at investors.blueapron.com.
A recording of the webcast will be available on Blue Apron’s Investor Relations website at investors.blueapron.com following the conference call. Additionally, a replay of the conference call can be accessed until Thursday, May 11, 2023 by dialing 1-877-344-7529 or 1-412-317-0088, utilizing the replay access code 9877590.
About Blue Apron
Blue Apron’s vision is Better Living Through Better Food™. Launched in 2012, Blue Apron offers fresh, chef-designed meals that empower home cooks to embrace their culinary curiosity, challenge their abilities in the kitchen and see what a difference cooking quality food can make in their lives. Blue Apron is focused on bringing incredible recipes to its customers, deepening its commitment to its employees, continuing to reduce food and packaging waste, and addressing its carbon impact. Visit blueapron.com to learn more.
Forward-Looking Statements
This press release includes statements concerning Blue Apron Holdings, Inc. and its future expectations, plans and prospects that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. Blue Apron has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions including, without limitation, the sufficiency of the company’s cash resources and its ability to continue to operate as a going concern in the event that prior to the middle of June 2023, (i) the company is unable to obtain sufficient additional funding or raise additional capital including through its February 2023 at-the-market offering or otherwise, (ii) RJB Partners, LLC, and certain other affiliates of Joseph N. Sanberg do not fund their remaining respective obligations under the
Use of Non-GAAP Financial Information
This press release includes non-GAAP financial measures, adjusted EBITDA and free cash flow, that are not prepared in accordance with, nor are an alternative to, financial measures prepared in accordance with
The company defines adjusted EBITDA as net income (loss) before interest income (expense), net, other operating expense, gain (loss) on extinguishment of debt, other income (expense) net, benefit (provision) for income taxes, depreciation and amortization, and share-based compensation expense. The company presents adjusted EBITDA because it is a key measure used by the company’s management and board of directors to understand and evaluate the company’s operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, the company believes that the exclusion of certain items in calculating adjusted EBITDA can produce a useful measure for period-to-period comparisons of the company’s business. The company uses adjusted EBITDA to evaluate its operating performance and trends and make planning decisions. It believes that adjusted EBITDA helps identify underlying trends in its business that could otherwise be masked by the effect of the items that the company excludes. Accordingly, the company believes that adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating results, enhancing the overall understanding of the company’s past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in its financial and operational decision-making.
There are a number of limitations related to the use of adjusted EBITDA rather than net income (loss), which is the most directly comparable GAAP equivalent. Some of these limitations are:
- adjusted EBITDA excludes share-based compensation expense, as share-based compensation expense has recently been, and will continue to be for the foreseeable future, a significant recurring expense for the company’s business and an important part of its compensation strategy;
- adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future;
- adjusted EBITDA excludes other operating expense, as other operating expense represents restructuring costs;
- adjusted EBITDA excludes gains and losses on extinguishment of debt, as these primarily represent non-cash accounting adjustments;
- adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest, which reduces cash available to the company;
- adjusted EBITDA does not reflect other (income) expense, net as this represents changes in the fair value of the Blue Torch warrant obligation as of each reporting period, which were required to be settled either in cash, which would have harmed our liquidity, or our Class A common shares, which would have resulted in dilution to our stockholders;
- adjusted EBITDA does not reflect income tax payments that reduce cash available to us; and
- other companies, including companies in the company’s industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
The company defines free cash flow as net cash from (used in) operating activities less purchases of property and equipment. The company presents free cash flow because it is used by the company’s management and board of directors as an indicator of the amount of cash the company generates or uses and to evaluate the company’s ability to satisfy current and future obligations and to fund future business opportunities. Accordingly, the company believes that free cash flow provides useful information to investors and others in understanding and evaluating its operating results, enhancing the overall understanding of the company’s ability to satisfy its financial obligations and pursue business opportunities, and allowing for greater transparency with respect to a key financial metric used by its management in its financial and operational decision making.
There are a number of limitations related to the use of free cash flow rather than net cash from (used in) operating activities, which is the most directly comparable GAAP equivalent. Some of these limitations are:
- free cash flow is not a measure of cash available for discretionary expenditures since the company has certain non-discretionary obligations such as debt repayments or capital lease obligations that are not deducted from the measure; and
- other companies, including companies in the company’s industry, may calculate free cash flow differently, which reduces its usefulness as a comparative measure.
Because of these limitations, adjusted EBITDA and free cash flow should be considered together with other financial information presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable measures calculated in accordance with GAAP is set forth below under the heading “Reconciliation of Non-GAAP Financial Measures.”
Use of Key Customer Metrics
This press release includes various key customer metrics that the company uses to evaluate our business and operations, measure its performance, identify trends affecting its business, project its future performance, and make strategic decisions. You should read these metrics in conjunction with the company’s financial statements. The company defines and determines its key customer metrics as follows:
Orders
The company defines Orders as the number of paid orders by Customers across the company’s meal, wine and market products sold on its e-commerce platforms and, beginning in 2Q22, through third-party sales platforms in any reporting period, inclusive of orders that may have eventually been refunded or credited to customers.
Customers
The company determines its number of Customers by counting the total number of individual customers who have paid for at least one Order from Blue Apron across the company’s meal, wine or market products sold on its e-commerce platforms and, beginning in 2Q22, through third-party sales platforms in a given reporting period.
Average Order Value
The company defines Average Order Value as the company’s net revenue from its meal, wine and market products sold on its e-commerce platforms and, beginning in 2Q22, through third-party sales platforms, in a given reporting period divided by the number of Orders in that period.
Orders per Customer
The company defines Orders per Customer as the number of Orders in a given reporting period divided by the number of Customers in that period.
Average Revenue per Customer
The company defines Average Revenue per Customer as the company’s net revenue from its meal, wine and market products sold on the company’s e-commerce platforms and, beginning in 2Q22, through third-party sales platforms in a given reporting period divided by the number of Customers in that period.
BLUE APRON HOLDINGS, INC. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
|||||
|
March 31,
|
|
December 31,
|
||
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
31,553 |
|
$ |
33,476 |
Accounts receivable, net |
|
158 |
|
|
556 |
Inventories, net |
|
26,327 |
|
|
25,023 |
Prepaid expenses and other current assets |
|
14,417 |
|
|
17,657 |
Total current assets |
|
72,455 |
|
|
76,712 |
Property and equipment, net |
|
54,708 |
|
|
57,186 |
Operating lease right-of-use assets |
|
30,756 |
|
|
32,340 |
Other noncurrent assets |
|
1,778 |
|
|
4,904 |
TOTAL ASSETS |
$ |
159,697 |
|
$ |
171,142 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Accounts payable |
$ |
24,562 |
|
$ |
18,709 |
Current portion of related party payables |
|
— |
|
|
3,000 |
Accrued expenses and other current liabilities |
|
21,131 |
|
|
27,077 |
Current portion of long-term debt |
|
21,938 |
|
|
27,512 |
Operating lease liabilities, current |
|
9,275 |
|
|
8,650 |
Deferred revenue |
|
19,546 |
|
|
19,083 |
Total current liabilities |
|
96,452 |
|
|
104,031 |
Operating lease liabilities, long-term |
|
21,397 |
|
|
23,699 |
Related party payables |
|
— |
|
|
2,500 |
Other noncurrent liabilities |
|
7,337 |
|
|
7,191 |
TOTAL LIABILITIES |
|
125,186 |
|
|
137,421 |
TOTAL STOCKHOLDERS’ EQUITY |
|
34,511 |
|
|
33,721 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
159,697 |
|
$ |
171,142 |
|
|
|
|
|
|
BLUE APRON HOLDINGS, INC. Condensed Consolidated Statement of Operations (In thousands, except share and per-share data) (Unaudited) |
||||||||||
|
|
Three Months Ended |
||||||||
|
|
March 31, |
||||||||
|
|
|
2023 |
|
|
|
2022 |
|
||
Net revenue |
|
$ |
113,080 |
|
|
$ |
117,751 |
|
||
Operating expenses: |
|
|
|
|
|
|
||||
Cost of goods sold, excluding depreciation and amortization |
|
|
|
72,613 |
|
|
|
|
79,490 |
|
Marketing |
|
|
|
14,727 |
|
|
|
|
27,914 |
|
Product, technology, general, and administrative |
|
|
|
35,724 |
|
|
|
|
43,954 |
|
Depreciation and amortization |
|
|
|
4,222 |
|
|
|
|
5,533 |
|
Total operating expenses |
|
|
|
127,286 |
|
|
|
|
156,891 |
|
Income (loss) from operations |
|
|
|
(14,206 |
) |
|
|
|
(39,140 |
) |
Gain (loss) on extinguishment of debt |
|
|
|
(1,850 |
) |
|
|
|
— |
|
Interest income (expense), net |
|
|
|
(973 |
) |
|
|
|
(1,169 |
) |
Other income (expense), net |
|
|
|
— |
|
|
|
|
1,646 |
|
Income (loss) before income taxes |
|
|
|
(17,029 |
) |
|
|
|
(38,663 |
) |
Benefit (provision) for income taxes |
|
|
|
(7 |
) |
|
|
|
(11 |
) |
Net income (loss) |
|
$ |
(17,036 |
) |
|
$ |
(38,674 |
) |
||
|
|
|
|
|
|
|
||||
Net income (loss) per share – basic |
|
$ |
(0.26 |
) |
|
$ |
(1.20 |
) |
||
Net income (loss) per share – diluted |
|
$ |
(0.26 |
) |
|
$ |
(1.20 |
) |
||
Weighted average shares outstanding – basic |
|
|
|
66,435,278 |
|
|
|
|
32,288,424 |
|
Weighted average shares outstanding – diluted |
|
|
|
66,435,278 |
|
|
|
|
32,288,424 |
|
BLUE APRON HOLDINGS, INC. Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited) |
|||||||||
|
Three Months Ended |
||||||||
|
March 31, |
||||||||
|
|
2023 |
|
|
|
2022 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
||||
Net income (loss) |
$ |
(17,036 |
) |
|
$ |
(38,674 |
) |
||
Adjustments to reconcile net income (loss) to net cash from (used in) operating activities: |
|
|
|
|
|
||||
Depreciation and amortization of property and equipment |
|
|
4,222 |
|
|
|
|
5,533 |
|
Loss (gain) on disposal of property and equipment |
|
|
— |
|
|
|
|
135 |
|
Loss (gain) on extinguishment of debt |
|
|
1,850 |
|
|
|
|
— |
|
Change in fair value of warrant obligation |
|
|
— |
|
|
|
|
(1,646 |
) |
Changes in reserves and allowances |
|
|
(58 |
) |
|
|
|
20 |
|
Share-based compensation |
|
|
1,293 |
|
|
|
|
2,173 |
|
Non-cash interest expense |
|
|
308 |
|
|
|
|
260 |
|
Changes in operating assets and liabilities |
|
|
(98 |
) |
|
|
|
3,374 |
|
Net cash from (used in) operating activities |
|
|
(9,519 |
) |
|
|
|
(28,825 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
||||
Purchases of property and equipment |
|
|
(1,278 |
) |
|
|
|
(1,321 |
) |
Proceeds from sale of property and equipment |
|
|
57 |
|
|
|
|
55 |
|
Net cash from (used in) investing activities |
|
|
(1,221 |
) |
|
|
|
(1,266 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
||||
Net proceeds from equity and warrant issuances |
|
|
16,712 |
|
|
|
|
5,000 |
|
Repayments of debt |
|
|
(7,500 |
) |
|
|
|
(875 |
) |
Payments of debt and equity issuance costs |
|
|
(363 |
) |
|
|
|
(191 |
) |
Principal payments on financing lease obligations |
|
|
(32 |
) |
|
|
|
(11 |
) |
Net cash from (used in) financing activities |
|
|
8,817 |
|
|
|
|
3,923 |
|
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
|
(1,923 |
) |
|
|
|
(26,168 |
) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — Beginning of period |
|
|
34,656 |
|
|
|
|
83,597 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH — End of period |
$ |
32,733 |
|
|
$ |
57,429 |
|
||
|
|
|
|
|
|
||||
BLUE APRON HOLDINGS, INC. Reconciliation of Non-GAAP Financial Measures (In thousands) (Unaudited) |
||||||||||||
|
Three Months Ended |
|||||||||||
|
March 31, |
|
December 31, |
|
March 31, |
|||||||
|
2023 |
|
|
2022 |
|
|
2022 |
|
||||
Reconciliation of net income (loss) to adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) |
|
$ |
(17,036 |
) |
|
$ |
(21,784 |
) |
|
$ |
(38,674 |
) |
Share-based compensation |
|
|
1,293 |
|
|
|
689 |
|
|
|
2,173 |
|
Depreciation and amortization |
|
|
4,222 |
|
|
|
5,258 |
|
|
|
5,533 |
|
Other operating expense |
|
|
— |
|
|
|
1,530 |
|
|
|
— |
|
Loss (gain) on extinguishment of debt |
|
|
1,850 |
|
|
|
— |
|
|
|
— |
|
Interest (income) expense, net |
|
|
973 |
|
|
|
840 |
|
|
|
1,169 |
|
Other (income) expense, net |
|
|
— |
|
|
|
— |
|
|
|
(1,646 |
) |
Provision (benefit) for income taxes |
|
|
7 |
|
|
|
(42 |
) |
|
|
11 |
|
Adjusted EBITDA |
|
$ |
(8,691 |
) |
|
$ |
(13,509 |
) |
|
$ |
(31,434 |
) |
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2023 |
|
|
2022 |
|
||
Reconciliation of net cash from (used in) operating activities to free cash flow |
|
|
|
|
|
||
Net cash from (used in) operating activities |
$ |
(9,519 |
) |
|
$ |
(28,825 |
) |
Purchases of property and equipment |
|
(1,278 |
) |
|
|
(1,321 |
) |
Free cash flow |
$ |
(10,797 |
) |
|
$ |
(30,146 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230503006135/en/
Muriel Lussier
Blue Apron
muriel.lussier@blueapron.com
Source: Blue Apron Holdings, Inc.
