Better Choice Company Announces First Quarter 2024 Results
Better Choice Company (NYSE American: BTTR) announced its Q1 2024 results, highlighting a 28% year-over-year improvement in EPS to $(3.60) and a 27% growth in Adjusted EBITDA to $(1.4) million, with an Adjusted EBITDA margin of (18)%. The company reported a net revenue of $7.9 million, primarily driven by its Halo Holistic® product line.
Net loss improved by 19% to $(2.8) million, and gross margin stood at 33%. The Halo Elevate line, launched on Chewy, gained consumer traction with an average rating of 4.6 stars. CEO Kent Cunningham emphasized the company's digital-first strategy and inventory optimization, reducing inventory levels by 50% over the past 15 months and achieving a 96% fill rate.
Despite a decline in net sales from $9.2 million to $7.9 million, the company has shown progress in operational efficiency and cost management. However, operating expenses remain high at $5.1 million, and interest expenses increased to $362,000. The company's assets decreased to $15.4 million from $16.7 million, with liabilities at $14.3 million.
- EPS improved by 28% year-over-year to $(3.60) per share.
- Adjusted EBITDA grew by 27% year-over-year to $(1.4) million.
- Net loss improved by 19% to $(2.8) million.
- Gross margin stood at 33%.
- Halo Elevate line received an average rating of 4.6 stars on Chewy.
- Inventory levels reduced by 50% over the last 15 months.
- Sustained improvement in fill rates to 96%.
- Adjusted EBITDA margin improved by 299 basis points to (18)%.
- Net revenue declined from $9.2 million to $7.9 million year-over-year.
- Gross profit decreased from $3.2 million to $2.6 million.
- Operating expenses remained high at $5.1 million.
- Interest expenses increased to $362,000.
- Total assets decreased from $16.7 million to $15.4 million.
- Total liabilities increased to $14.3 million.
- Decreased cash and cash equivalents from $4.5 million to $3.9 million.
- Net loss of $(2.8) million despite improvements.
Insights
The first quarter results for Better Choice Company indicate a improvement in certain key financial metrics. The earnings per share (EPS) has shown growth of
However, there are some concerns. The net revenue of $7.9 million represents a decline compared to $9.2 million in the same quarter last year, indicating challenges in top-line growth. Additionally, the company's total liabilities of $14.3 million are nearly equal to its total assets of $15.4 million, highlighting a tight financial situation.
In the short-term, investors should be cautious due to the negative EBITDA and net loss figures, even though improvements have been made. Long-term, if the company continues its current trajectory of reducing losses and improving margins, it may become a more stable investment.
The product performance details offer some insights into the company’s strategy and market positioning. The Halo Holistic® product line accounted for
The improved inventory levels by approximately
Overall, the company's market strategy appears sound with a focus on digital channels and product optimization. Investors should monitor how these initiatives translate into sustained revenue growth and market share expansion moving forward.
EPS Growth of
Adjusted EBITDA1 Growth of
Adjusted EBITDA Margin1 of (18)%, a 299 Basis Point Expansion Year Over Year
TAMPA, Fla., May 17, 2024 (GLOBE NEWSWIRE) -- Better Choice Company Inc. (NYSE American: BTTR) (the “Company” or “Better Choice”), a pet health and wellness company, today announced its results for the first quarter ended March 31, 2024.
FIRST QUARTER 2024 HIGHLIGHTS
- Net revenue of
$7.9 million - Gross margin of
33% - Net loss improved
19% to$(2.8) million - Earnings (loss) per share ("EPS") improved
28% to$(3.60) per share - Adjusted EBITDA1 improved
27% year over year to$(1.4) million - Adjusted EBITDA margin1 improved 299 basis points year over year to (18)%
During the first quarter of 2024, Better Choice generated
1 Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures. Reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is set forth in the reconciliation table accompanying this release.
| Better Choice Company Inc. Unaudited Condensed Consolidated Statements of Operations (Dollars in thousands) | |||||||
| Three Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| Net sales | $ | 7,903 | $ | 9,237 | |||
| Cost of goods sold | 5,289 | 5,996 | |||||
| Gross profit | 2,614 | 3,241 | |||||
| Operating expenses: | |||||||
| Selling, general and administrative | 5,080 | 6,496 | |||||
| Total operating expenses | 5,080 | 6,496 | |||||
| Loss from operations | (2,466 | ) | (3,255 | ) | |||
| Other expenses: | |||||||
| Interest expense, net | (362 | ) | (229 | ) | |||
| Total other expense, net | (362 | ) | (229 | ) | |||
| Net loss before income taxes | (2,828 | ) | (3,484 | ) | |||
| Income tax expense | 2 | — | |||||
| Net loss available to common stockholders | $ | (2,830 | ) | $ | (3,484 | ) | |
| Weighted average number of shares outstanding, basic | 786,745 | 692,615 | |||||
| Weighted average number of shares outstanding, diluted | 786,745 | 692,615 | |||||
| Net loss per share available to common stockholders, basic | $ | (3.60 | ) | $ | (5.03 | ) | |
| Net loss per share available to common stockholders, diluted | $ | (3.60 | ) | $ | (5.03 | ) | |
| Better Choice Company Inc. Unaudited Condensed Consolidated Balance Sheets (Dollars in thousands, except share amounts) | |||||||
| March 31, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 3,876 | $ | 4,455 | |||
| Accounts receivable, net | 4,340 | 4,354 | |||||
| Inventories, net | 5,201 | 6,611 | |||||
| Prepaid expenses and other current assets | 1,169 | 812 | |||||
| Total Current Assets | 14,586 | 16,232 | |||||
| Fixed assets, net | 198 | 230 | |||||
| Right-of-use assets, operating leases | 106 | 120 | |||||
| Goodwill | 405 | — | |||||
| Other assets | 149 | 155 | |||||
| Total Assets | $ | 15,444 | $ | 16,737 | |||
| Liabilities & Stockholders’ Equity | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 7,478 | $ | 6,928 | |||
| Accrued and other liabilities | 1,505 | 2,085 | |||||
| Line of credit | 2,171 | 1,741 | |||||
| Term loan, net | 3,054 | 2,881 | |||||
| Operating lease liability | 58 | 57 | |||||
| Total Current Liabilities | 14,266 | 13,692 | |||||
| Non-current Liabilities | |||||||
| Operating lease liability | 52 | 67 | |||||
| Total Non-current Liabilities | 52 | 67 | |||||
| Total Liabilities | 14,318 | 13,759 | |||||
| Stockholders’ Equity | |||||||
| Common Stock, | 34 | 32 | |||||
| Additional paid-in capital | 325,264 | 324,288 | |||||
| Accumulated deficit | (324,172 | ) | (321,342 | ) | |||
| Total Stockholders’ Equity | 1,126 | 2,978 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 15,444 | $ | 16,737 | |||
| Better Choice Company Inc. Non-GAAP Measures |
Adjusted EBITDA
We define Adjusted EBITDA as EBITDA further adjusted to eliminate the impact of certain items that we do not consider indicative of our core operations. Adjusted EBITDA is determined by adding the following items to net (loss) income: interest expense, tax expense, depreciation and amortization, share-based compensation, warrant expense, impairment of goodwill, loss on disposal of assets, change in fair value of warrant liabilities, gain or loss on extinguishment of debt, equity and debt offering expenses and other non-recurring expenses.
We present Adjusted EBITDA as it is a key measure used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. We believe that the disclosure of Adjusted EBITDA is useful to investors as this non-GAAP measure forms the basis of how our management team reviews and considers our operating results. By disclosing this non-GAAP measure, we believe that we create for investors a greater understanding of and an enhanced level of transparency into the means by which our management team operates our company. We also believe this measure can assist investors in comparing our performance to that of other companies on a consistent basis without regard to certain items that do not directly affect our ongoing operating performance or cash flows.
Adjusted EBITDA does not represent cash flows from operations as defined by GAAP. Adjusted EBITDA has limitations as a financial measure and you should not consider it in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net (loss) income, gross margin, and our other GAAP results.
The following table presents a reconciliation of net loss, the closest GAAP financial measure, to EBITDA and Adjusted EBITDA for each of the periods indicated (in thousands):
| Reconciliation of Net Loss to EBITDA and Adjusted EBITDA | |||||||
| Three Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| Net loss available to common stockholders | $ | (2,830 | ) | $ | (3,484 | ) | |
| Interest expense, net | 362 | 229 | |||||
| Income tax expense | 2 | — | |||||
| Depreciation and amortization | 35 | 424 | |||||
| EBITDA | (2,431 | ) | (2,831 | ) | |||
| Non-cash share-based compensation (a) | 518 | 861 | |||||
| Loss on disposal of assets | — | 11 | |||||
| Transaction related (b) | 323 | — | |||||
| Non-recurring strategic branding initiatives (c) | 26 | — | |||||
| Non-recurring and other expenses (d) | 164 | 47 | |||||
| Adjusted EBITDA | $ | (1,400 | ) | $ | (1,912 | ) | |
| (a) Non-cash expenses related to equity compensation awards. Share-based compensation is an important part of the Company's compensation strategy and without our equity compensation plans, it is probable that salaries and other compensation related costs would be higher. | |||||||
| (b) Transaction-related legal fees and professional fees related to single occurrence business matters. | |||||||
| (c) Single occurrence expenses related to marketing agency and design, strategic re-branding initiatives, Elevate® launch, product innovation and reformulations. | |||||||
| (d) Other single occurrence expenses such as legal settlements, employee severance, executive recruitment, transition of our dry kibble co-manufacturing supplier, and other non-recurring fees. | |||||||
About Better Choice Company Inc.
Better Choice Company Inc. is a pet health and wellness company focused on providing pet products and services that help dogs and cats live healthier, happier and longer lives. We offer a broad portfolio of pet health and wellness products for dogs and cats sold under our Halo brand across multiple forms, including foods, treats, toppers, dental products, chews, and supplements. We have a demonstrated, multi-decade track record of success and are well positioned to benefit from the mainstream trends of growing pet humanization and consumer focus on health and wellness. Our products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and treats, oral care products and supplements. Halo’s core products are made with high-quality, thoughtfully sourced ingredients for natural, science-based nutrition. Each innovative recipe is formulated with leading veterinary and nutrition experts to deliver optimal health. For more information, please visit https://www.betterchoicecompany.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Some or all of the results anticipated by these forward-looking statements may not be achieved. Further information on the Company’s risk factors is contained in our filings with the SEC. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Company Contact:
Better Choice Company Inc.
Kent Cunningham, CEO
Investor Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
T: 212-896-1254
Valter@KCSA.com
FAQ
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