Kaspien Holdings Announces Second Quarter Results
Kaspien Holdings Inc. (Nasdaq: KSPN) reported a strong second quarter for fiscal 2020, ending August 1. Total revenue increased by 23.5% to $42.3 million, driven by growth in subscriptions and dropship businesses. Gross profit rose 43.3% to $4.4 million, representing 10.5% of total revenue. The company saw a significant reduction in SG&A expenses, down 26.3% to $4.9 million. Despite a net loss of $0.9 million, the results indicate improved operational efficiency and a focus on tech-enabled services for online brands.
- Total revenue increased 23.5% to $42.3 million compared to $34.3 million in Q2 2019.
- Gross profit rose 43.3% to $4.4 million, improving gross margin to 10.5%.
- SG&A expenses decreased by 26.3% to $4.9 million, largely due to reduced corporate expenses.
- Adjusted EBITDA improved to $833,000 from a loss of $310,000 in Q2 2019.
- Net loss totaled $0.9 million, although improved from $8.1 million in Q2 2019.
- Loss from continuing operations was $0.9 million compared to a loss of $3.8 million in Q2 2019.
SPOKANE VALLEY, Wash., Sept. 15, 2020 (GLOBE NEWSWIRE) -- Kaspien Holdings Inc. (Nasdaq: KSPN) today reported financial results for its second quarter ended August 1, 2020.
“The second quarter was a strong quarter for Kaspien. As consumers buy more of their goods online, brands are looking to expand their online operations. Kaspien has spent years building the expertise, strategies, software and services needed to create a prosperous online business, evolving from a third-party retailer to a software and tech-enabled services company. The strength of our second quarter results is a testament to the quality and performance of our offerings,” said Kunal Chopra, Kaspien Holdings Inc.’s Principal Executive Officer.
“We ended the quarter with
Second Quarter Overview
- Total revenue increased
23.5% to$42.3 million compared to$34.3 million in the second quarter of fiscal 2019. Increased retail sales were supported by strong growth in the Company’s subscriptions and dropship businesses. - Gross profit for the quarter increased
43.3% to$4.4 million , or10.5% of total revenue as compared to$3.1 million , or9.0% of total revenue for the second quarter of 2019. The increase in Gross profit as a percentage of total revenue was due to improved gross margins on the Amazon US Platform, improved operational efficiencies and the addition of new higher gross margin services. - SG&A expenses for the quarter were
$4.9 million , a decline of$1.8 million or26.3% as compared to the second quarter of 2019. The decline in SG&A was due to a decline of$2.0 million in corporate expenses. The decline in corporate expenses was related to the sale of the Company’s fye business in February 2020. - Loss from continuing operations was
$0.9 million compared to a loss from continuing operations of$3.8 million for the second quarter of fiscal 2019. - Net loss was
$0.9 million , or$0.49 per share, compared to a net loss of$8.1 million , or$4.48 per share, for the same period last year. - Adjusted EBITDA (a non-GAAP measure) was
$833,000 compared to a loss of$310,000 for the second quarter of fiscal 2019 (see note 1).
Twenty-six weeks ended August 1, 2020 Overview
- Total revenue for the twenty-six weeks ended August 1, 2020 increased
6.5% to$73.9 million , compared to$69.4 million for the same period last year driven by increased sales on the Amazon US Platform and growth in the subscriptions business. - Gross profit for the twenty-six weeks ended August 1, 2020 increased
31.9% to$7.7 million , or10.5% of total revenue as compared to$5.9 million , or8.5% of total revenue for the comparable period of 2019. The increase in Gross profit as a percentage of total revenue was due to improved gross margins on the Amazon US Platform, improved operational efficiencies and the addition of new higher gross margin services. - SG&A expenses for the twenty-six weeks ended August 1, 2020 were
$13.4 million , a decline of$0.2 million as compared to the comparable period of 2019. - Loss from continuing operations was
$5.7 million compared to$7.8 million for the twenty-six weeks ended August 3, 2019. - Net loss was
$6.3 million , or$3.46 per share, for the twenty-six weeks ended August 1, 2020, compared to a net loss of$15.9 million , or$8.78 per share, for the same period last year. - Adjusted EBITDA (a non-GAAP measure) was a
$544,000 compared to a loss of$1.4 million for the same period last year (see note 1). - Cash, cash equivalents and restricted cash as of August 1, 2020 was
$8.6 million , compared to$9.9 million as of August 3, 2019. - Borrowings under the credit facility at the end of the second quarter were
$2.2 million compared to$12.1 million at the end of the second quarter last year. As of August 1, 2020,$6.5 million was available for borrowing. - Inventory was
$20.6 million at the end of the second quarter of 2020 as compared to$20.2 million at the end of the second quarter of 2019.
| Kaspien Holdings Inc. | |||||||||||||||||||||||||||
| Condensed Consolidated Financial Results | |||||||||||||||||||||||||||
| STATEMENTS OF OPERATIONS: | |||||||||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||||||
| Thirteen Weeks Ended | Twenty-six Weeks Ended | ||||||||||||||||||||||||||
| August 1, | % to | August 3, | % to | August 1, | % to | August 3, | % to | ||||||||||||||||||||
| 2020 | Revenue | 2019 | Revenue | 2020 | Revenue | 2019 | Revenue | ||||||||||||||||||||
| Net revenue | $ | 42,296 | $ | 34,260 | $ | 73,885 | $ | 69,392 | |||||||||||||||||||
| Cost of sales | 37,873 | 89.5 | % | 31,173 | 91.0 | % | 66,151 | 89.5 | % | 63,528 | 91.5 | % | |||||||||||||||
| Gross profit | 4,423 | 10.5 | % | 3,087 | 9.0 | % | 7,734 | 10.5 | % | 5,864 | 8.5 | % | |||||||||||||||
| Selling, general and | |||||||||||||||||||||||||||
| administrative expenses | 4,916 | 11.6 | % | 6,666 | 19.5 | % | 13,406 | 18.1 | % | 13,644 | 19.7 | % | |||||||||||||||
| Loss from continuing operations | (493 | ) | -1.2 | % | (3,579 | ) | -10.4 | % | (5,672 | ) | -7.7 | % | (7,780 | ) | -11.2 | % | |||||||||||
| Interest expense | 406 | 1.0 | % | 172 | 0.5 | % | 634 | 0.9 | % | 308 | 0.4 | % | |||||||||||||||
| Loss from continuing operations before income tax benefit | (899 | ) | -2.1 | % | (3,751 | ) | -10.9 | % | (6,306 | ) | -8.5 | % | (8,088 | ) | -11.7 | % | |||||||||||
| Income tax expense | - | 0.0 | % | 7 | 0.0 | % | - | 0.0 | % | 16 | 0.0 | % | |||||||||||||||
| Loss from continuing operations | (899 | ) | -2.1 | % | (3,758 | ) | -11.0 | % | (6,306 | ) | -8.5 | % | (8,104 | ) | -11.7 | % | |||||||||||
| Loss from fye business, net of tax | - | 0.0 | % | (4,370 | ) | -12.8 | % | - | 0.0 | % | (7,826 | ) | -11.3 | % | |||||||||||||
| Net loss | $ | (899 | ) | -2.1 | % | $ | (8,128 | ) | -23.7 | % | $ | (6,306 | ) | -8.5 | % | $ | (15,930 | ) | -23.0 | % | |||||||
| Basic and diluted loss per common share: | |||||||||||||||||||||||||||
| Basic and diluted loss per share | $ | (0.49 | ) | $ | (4.48 | ) | $ | (3.46 | ) | $ | (8.78 | ) | |||||||||||||||
| Weighted average number of | |||||||||||||||||||||||||||
| common shares outstanding - basic and diluted | 1,825 | 1,816 | 1,823 | 1,815 | |||||||||||||||||||||||
| Diluted Income per common share: | |||||||||||||||||||||||||||
| SELECTED BALANCE SHEET CAPTIONS: | August 1, | August 3, | |||||||||||||||||||||||||
| (in thousands, except store data) | 2020 | 2019 | |||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | 8,649 | $ | 9,930 | |||||||||||||||||||||||
| Merchandise inventory | 20,576 | 20,185 | |||||||||||||||||||||||||
| Fixed assets (net) | 2,285 | 1,898 | |||||||||||||||||||||||||
| Accounts payable | 9,857 | 9,285 | |||||||||||||||||||||||||
| Borrowings under line of credit | 2,151 | 12,086 | |||||||||||||||||||||||||
| Long-term debt | 4,401 | - | |||||||||||||||||||||||||
Notes:
1. Reconciliation of net loss to adjusted EBITDA:
Adjusted EBITDA is defined as net loss, adjusted to exclude: (i) income tax expense; (ii) loss from fye business, net of tax, (iii) interest expense; (iv) Corporate SG&A expenses and (v) 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 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 operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP.
| Thirteen Weeks Ended | Twenty-six Weeks Ended | ||||||||||||
| August 1, | August 3, | August 1, | August 3, | ||||||||||
| (amounts in thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||
| Net loss | $ | (899 | ) | $ | (8,128 | ) | $ | (6,306 | ) | $ | (15,930 | ) | |
| Income tax expense | - | 7 | - | 16 | |||||||||
| Loss from fye business, net of tax | - | 4,370 | - | 7,826 | |||||||||
| Interest expense | 406 | 172 | 634 | 308 | |||||||||
| Loss from continuing operations | (493 | ) | (3,579 | ) | (5,672 | ) | (7,780 | ) | |||||
| Corporate SG&A expenses | 810 | 2,833 | 5,209 | 5,560 | |||||||||
| Depreciation expense | 516 | 436 | 1,007 | 844 | |||||||||
| Adjusted EBITDA | $ | 833 | $ | (310 | ) | $ | 544 | $ | (1,376 | ) | |||
Kaspien provides a platform of software and services to empower brands to grow their online distribution channels on digital marketplaces such as Amazon, Walmart, and eBay, among others. The Company helps brands achieve their online retail goals through its innovative and proprietary technology, tailored strategies, and mutually beneficial partnerships. Kaspien is positioning itself to be a brand’s ultimate online growth partner and is guided by seven core principles:
|
|
Kaspien, formerly Trans World Entertainment, established itself as a public company in 1986 and is traded on the Nasdaq Capital Market under the symbol “KSPN” formerly “TWMC”.
Certain statements in this release set forth management's intentions, plans, beliefs, expectations or predictions of the future based on current facts and analyses. Actual results may differ materially from those indicated in such statements. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the Securities and Exchange Commission.
| Contact: Kaspien Holdings Inc. Ed Sapienza Chief Financial Officer (509) 202-4261 | Contact: Kaspien, Inc Kunal Chopra Chief Executive Officer (425) 281-3566 | Contact: Financial Relations Board Joseph Calabrese jcalabrese@fbir.com (212) 827-3772 |
FAQ
What were Kaspien's total revenues for the second quarter of 2020?
What is the net loss reported by Kaspien for the second quarter of 2020?
How much did Kaspien's gross profit increase in the second quarter of 2020?
What is Kaspien's stock symbol?
How did Kaspien's SG&A expenses change in the second quarter of 2020?
