Reborn Coffee Provides Third Quarter 2024 Corporate Update and Financial Results
Reborn Coffee (REBN) reported Q3 2024 results with revenue at $1.3M, down 17% from Q3 2023. Despite challenges, wholesale and online sales grew 432% to $140,407. The company acquired a 58% stake in Bbang Ssaem Bakery, securing access to 8,000 stores across South Korea. Company-operated store gross margins decreased to 61% compared to 70% in Q3 2023. The company expanded globally through strategic partnerships in China, Thailand, and South Korea, targeting 300 locations worldwide within two years. Net loss remained stable at $0.7M, with cash and equivalents at $0.1M as of September 30, 2024.
Reborn Coffee (REBN) ha riportato i risultati del terzo trimestre 2024, con un fatturato di $1,3 milioni, in calo del 17% rispetto al terzo trimestre 2023. Nonostante le difficoltà, le vendite all'ingrosso e online sono cresciute del 432%, raggiungendo $140,407. L'azienda ha acquisito una partecipazione del 58% nella Bbang Ssaem Bakery, assicurandosi l'accesso a 8.000 negozi in tutto il Sud Corea. I margini lordi dei negozi operati dall'azienda sono diminuiti al 61% rispetto al 70% del terzo trimestre 2023. L'azienda si è espansa a livello globale attraverso alleanze strategiche in Cina, Thailandia e Sud Corea, puntando a 300 località in tutto il mondo entro due anni. La perdita netta è rimasta stabile a $0,7 milioni, con liquidità e equivalenti a $0,1 milioni al 30 settembre 2024.
Reborn Coffee (REBN) informó los resultados del tercer trimestre de 2024, con ingresos de $1,3 millones, lo que representa una disminución del 17% en comparación con el tercer trimestre de 2023. A pesar de los desafíos, las ventas mayoristas y en línea crecieron un 432% alcanzando $140,407. La empresa adquirió una participación del 58% en Bbang Ssaem Bakery, asegurando acceso a 8,000 tiendas en toda Corea del Sur. Los márgenes brutos de las tiendas operadas por la empresa disminuyeron al 61% en comparación con el 70% en el tercer trimestre de 2023. La compañía se expandió globalmente a través de asociaciones estratégicas en China, Tailandia y Corea del Sur, con el objetivo de alcanzar 300 ubicaciones en todo el mundo en dos años. La pérdida neta se mantuvo estable en $0,7 millones, con efectivo y equivalentes en $0,1 millones a partir del 30 de septiembre de 2024.
리본 커피 (REBN)는 2024년 3분기 실적을 보고하였습니다. 매출은 130만 달러로, 2023년 3분기 대비 17% 감소하였습니다. 어려움에도 불구하고 도매 및 온라인 판매는 432% 증가하여 140,407달러에 달했습니다. 이 회사는 빵 쌤 베이커리의 58% 지분을 인수하여 한국 전역의 8,000개 매장에 접근할 수 있게 되었습니다. 회사 운영 매장의 총 마진은 2023년 3분기 70%와 비교하여 61%로 감소했습니다. 이 회사는 중국, 태국, 한국에서 전략적 파트너십을 통해 글로벌로 확장하였으며, 2년 내에 전 세계 300개 매장을 목표로 하고 있습니다. 순손실은 70만 달러로 안정적으로 유지되었으며, 2024년 9월 30일 기준 현금 및 현금성 자산은 10만 달러입니다.
Reborn Coffee (REBN) a annoncé les résultats du troisième trimestre 2024, avec un chiffre d'affaires de 1,3 million de dollars, en baisse de 17 % par rapport au troisième trimestre 2023. Malgré les défis, les ventes en gros et en ligne ont augmenté de 432 % pour atteindre 140 407 dollars. L'entreprise a acquis une participation de 58 % dans la Bbang Ssaem Bakery, garantissant ainsi l'accès à 8 000 magasins à travers la Corée du Sud. Les marges brutes des magasins exploités par l'entreprise ont diminué à 61 % contre 70 % au troisième trimestre 2023. L'entreprise s'est développée à l'international grâce à des partenariats stratégiques en Chine, en Thaïlande et en Corée du Sud, visant 300 emplacements à travers le monde d'ici deux ans. La perte nette est restée stable à 0,7 million de dollars, avec des liquidités et équivalents à 0,1 million de dollars au 30 septembre 2024.
Reborn Coffee (REBN) hat die Ergebnisse des 3. Quartals 2024 veröffentlicht, mit einem Umsatz von 1,3 Millionen Dollar, was einen Rückgang von 17% im Vergleich zum 3. Quartal 2023 bedeutet. Trotz der Herausforderungen stiegen die Großhandels- und Online-Verkäufe um 432% auf 140,407 Dollar. Das Unternehmen erwarb eine 58%ige Beteiligung an der Bbang Ssaem Bakery und sicherte sich somit den Zugang zu 8.000 Filialen in Südkorea. Die Bruttomargen der unternehmenseigenen Geschäfte sanken auf 61%, verglichen mit 70% im 3. Quartal 2023. Das Unternehmen expandierte weltweit durch strategische Partnerschaften in China, Thailand und Südkorea mit dem Ziel, innerhalb von zwei Jahren 300 Standorte weltweit zu erreichen. Der Nettoverlust blieb stabil bei 700.000 Dollar, mit liquiden Mitteln und Äquivalenten von 100.000 Dollar zum 30. September 2024.
- Wholesale and online sales grew 432% YoY to $140,407
- Acquired 58% stake in Bbang Ssaem Bakery with $7M TTM revenue
- Secured distribution agreement for 8,000 stores in South Korea
- Nine-month gross margins improved to 72% from 68% YoY
- Q3 revenue declined 17% YoY to $1.3M
- Q3 store gross margins decreased to 61% from 70% YoY
- Net loss of $0.7M in Q3 2024
- Cash position decreased to $0.1M from $0.2M in December 2023
- Operating cash burn increased to $3.3M from $3.0M YoY
Insights
The Q3 results paint a mixed picture for Reborn Coffee. While wholesale/online sales showed impressive
The aggressive international expansion strategy through partnerships in Asia could provide significant growth opportunities but carries execution risks given the weak balance sheet. The acquisition of
The strategic pivot towards international markets, particularly Asia, represents both opportunity and risk. The partnerships in China targeting 100 locations across three provinces and the South Korean bakery acquisition provide significant market access. However, the domestic US business faces headwinds from rising costs and price sensitivity.
The
BREA, Calif., Nov. 20, 2024 (GLOBE NEWSWIRE) -- Reborn Coffee Inc. (Nasdaq: REBN), a leader in the specialty coffee industry, has reported its financial and operational results for the third quarter ended September 30, 2024.
Key Financial and Operational Highlights
- Despite higher food costs, in the nine months ending September 30, 2024, revenue was steady at
$4.1 million as compared to the same period revenue in 2023. - Company-operated store gross margins for nine months ended September 30, 2024, increased to
72% compared to68% for the same period in 2023. - Ended Q3'24 with 12 open locations, with 1 location in development.
- Q3'24 wholesale and online sales grew
432% to$140,407 from$26,401 in Q3’23.
Q3 2024 and Subsequent Events
- Acquired a
58% stake in Bbang Ssaem Bakery, one of Korea's most iconic bakery brands with an estimated$7 million trailing twelve months revenue through November, 2024, serving as a launchpad for Reborn Coffee’s entry into the South Korean franchise market and deliver premium coffee and bakery experiences to new locations.- Landmark distribution agreement through Bbang Ssaem Bakery F&B will bring Reborn's preservative-free, signature baked goods to approximately 8,000 stores of a major coffee chain across South Korea.
- Strategic joint venture with Gaingan Humantech Co. LTD to open three new Reborn Coffee locations in Bangkok, Thailand.
- Announced a significant expansion into the China market through a strategic Master License Agreement with Chengdu Octaday Entertainment Group, facilitated by Reborn China, to establish premier locations in Chengdu, the capital of the Sichuan Province.
- Closed a Master License Agreement (“MLA”) with Shenyang Yongsheng Seven Stars Tourism Development Co. that will establish Reborn Coffee premier locations in Shenyang, the capital of Liaoning Province. The Shenyang flagship store will, with its all-encompassing brand center, lays the foundation for a broader expansion across China.
- Strategic joint venture with China's AI company Penglai Data Store to Lead and develop master franchises in China, Hong Kong and Macao.
- Set to launch new cold brew Fruit Infused, including the Miami Passion blend, nationwide, capturing U.S. demand for premium ready-to-drink options as the brand builds on its success.
- Introduced new innovative, IF Design Award-winning patented coffeeware for global distribution, starting with the highly anticipated Reborn Tumbler.
Management Commentary
"During the quarter we continued our aggressive global initiatives across Asia, as we continued to face US domestic headwinds in the food and beverage markets,” said Jay Kim, Chief Executive Officer of Reborn. “At our US company-operated retail locations a combination of rising input costs, heightened consumer price sensitivity, and increased capital costs affected gross margins during the quarter. To address these challenges, we continue to optimize operating expenses while maintaining a strong Average Unit Volume (“AUV”) comparable to previous periods. We believe our growing international presence, introduction of innovative new products, rapidly expanding online ecommerce sales, and targeted marketing initiatives will deliver on our comprehensive growth strategy in the long term.
“US wholesale and online ecommerce sales, enhanced by our Amazon presence, drove substantial year over year revenue growth of
“Throughout 2024 we have worked to expand and diversify our global operations with strategic partnerships across Asia, Eastern Europe, and the Middle East. In the Chinese provinces of Liaoning, Guangdong and Sichuan alone, we are targeting the opening of 100 new locations over the next two years. Our ambitions extend beyond these regions, and we have established a target of over 300 locations worldwide within the next two years designed to establish Reborn Coffee as a household name across continents, from Asia to the Americas. As we continue to penetrate new markets, we are poised to redefine the future of specialty coffee on a global scale.
“In China, a strategic MLA with Chengdu Octaday Entertainment Group, facilitated by Reborn China, will establish Reborn Coffee's premier locations in Chengdu, the bustling capital of Sichuan Province, a region known for its rich cultural heritage and home to over 83 million people. Also in China, an MLA with Shenyang Yongsheng Seven Stars Tourism Development Co. will establish Reborn Coffee premier locations in Shenyang, the capital of Liaoning Province. This transformative partnership will establish Reborn Coffee's premier locations in Shenyang, the bustling capital of Liaoning Province, home to over 43 million people. A strategic partnership and joint venture with Penglai Data Store (Shenzhen), a prominent China AI database company led by CEO Alex Guo and Reborn China is poised to transform the coffee industry in China by incorporating advanced AI technology into every new franchise in the region.
“In Thailand, we recently we partnered with Gaingan Humantech in a joint venture to expand our presence in the country with three new Reborn Coffee locations in Bangkok. The flagship location of the joint venture will be at One Bangkok, a landmark mixed-use development in the heart of Thailand's capital.
“Most recently we announced the successful acquisition of a
“Looking ahead and into 2025, at our US retail locations and ecommerce, we will continue to focus on driving sales and improving gross profit, enhanced by new beverages, complementary product launches, and new company-owned retail locations. Through our global initiatives, we are laying the foundation with our partners for a broader expansion first in Asia, Eastern Europe, and the Middle East in some of the world's fastest-growing coffee markets, with a longer-term goal of establishing a global presence for the Reborn Coffee brand. We look forward to additional updates on our anticipated milestones in the weeks and months to come,” concluded Kim.
Anticipated Milestones
- Expand more rapidly across South Korea, leveraging Bbang Ssaem Bakery 's established presence in the Korean market and a new franchise initiative.
- Capture notable share of the growing RTD coffee segment with the nationwide rollout of Cold Brew line.
- Open three new Reborn Coffee locations in Bangkok, Thailand, including a flagship location at One Bangkok, a landmark mixed-use development.
- Establish flagship store in the iconic New Century Global Center, located in Chengdu, the capital of Sichuan Province.
- Global rollout of patented coffeeware, targeting key markets, including the U.S., China, and Southeast Asia.
- Establish locations in Shenyang, the capital of Liaoning Province, including a flagship store.
- Incorporating advanced AI technology into new franchises in the China region, followed by the United States.
- Establish flagship in Dubai, UAE and 20 more stores across the UAE, plus a distribution center for the Middle East, and roasting and warehouse facilities.
- Establish flagship store in Guangzhou, China, followed by additional locations in Shanghai and Shenzhen.
Third Quarter 2024 Financial Results
Revenues were
Company-operated store gross profit was
Wholesale and online revenue for the third quarter of 2024 was
Total operating costs and expenses for the three-month period ended September 30, 2024, were
Net loss for the third quarter of 2024 was
Net cash used in operating activities for the nine months ended September 30, 2024, was
Cash and cash equivalents totaled
About Reborn Coffee
Reborn Coffee, Inc. (NASDAQ: REBN) is focused on serving high quality, specialty-roasted coffee at retail locations, kiosks, and cafes. Reborn is an innovative company that strives for constant improvement in the coffee experience through exploration of new technology and premier service, guided by traditional brewing techniques. Reborn believes they differentiate themselves from other coffee roasters through innovative techniques, including sourcing, washing, roasting, and brewing their coffee beans with a balance of precision and craft. For more information, please visit www.reborncoffee.com.
Forward-Looking Statements
All statements in this release that are not based on historical fact are “forward-looking statements.” While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our recent filings with the Securities and Exchange Commission (“SEC”) including our Form 10-Q for the third quarter of 2024, which can be found on the SEC’s website at www.sec.gov. Such risks, uncertainties, and other factors include, but are not limited to, the Company’s ability to continue as a going concern as indicated in an explanatory paragraph in the Company’s independent registered public accounting firm’s audit report as a result of recurring net losses, among other things, the Company’s ability to successfully open the additional locations described herein as planned or at all, the Company’s ability to expand its business both within and outside of California (including as it relates to increasing sales and growing Average Unit Volumes at our existing stores), the degree of customer loyalty to our stores and products, the impact of COVID-19 on consumer traffic and costs, the fluctuation of economic conditions, competition and inflation. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Contacts
Investor Relations Contact:
Chris Tyson
Executive Vice President
MZ North America
REBN@mzgroup.us
949-491-8235
Company Contact:
Reborn Coffee, Inc.
ir@reborncoffee.com
| Reborn Coffee, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets | ||||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 105,863 | $ | 164,301 | ||||
| Accounts receivable, net of allowance for doubtful accounts of | 76,809 | 56,938 | ||||||
| Inventories, net | 251,604 | 185,061 | ||||||
| Prepaid expense and other current assets | 934,301 | 359,124 | ||||||
| Total current assets | 1,368,577 | 765,424 | ||||||
| Property and equipment, net | 3,950,555 | 3,494,050 | ||||||
| Operating lease right-of-use asset | 3,993,507 | 4,566,968 | ||||||
| Other assets | 328,628 | 425,712 | ||||||
| Total assets | $ | 9,641,267 | $ | 9,252,154 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 528,693 | $ | 632,753 | ||||
| Accrued expenses and current liabilities | 825,562 | 611,290 | ||||||
| Loans payable to financial institutions, current | 97,352 | 791,352 | ||||||
| Loans payable to others | 795,813 | 609,027 | ||||||
| Loans payable to shareholders | - | 100,000 | ||||||
| Loan payable, emergency injury disaster loan (EIDL), current | 30,060 | 30,060 | ||||||
| Loan payable, payroll protection program (PPP), current | 37,494 | 45,678 | ||||||
| Operating lease liabilities, current | 1,006,603 | 1,003,753 | ||||||
| Total current liabilities | 3,321,577 | 3,823,913 | ||||||
| Loans payable to financial institutions, net of current | - | 335,147 | ||||||
| Loan payable, emergency injury disaster loan (EIDL), net of current | 469,940 | 469,940 | ||||||
| Loan payable, payroll protection program (PPP), net of current | 24,452 | 51,595 | ||||||
| Operating lease liabilities, net of current | 3,159,034 | 3,725,153 | ||||||
| Total liabilities | 6,975,003 | 8,405,748 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Common Stock, | 334 | 187 | ||||||
| Preferred Stock, | - | - | ||||||
| Additional paid-in capital | 22,482,975 | 17,603,143 | ||||||
| Accumulated deficit | (19,783,828 | ) | (16,756,924 | ) | ||||
| Accumulated other comprehensive income (loss) | (33,217 | ) | - | |||||
| Total stockholders’ equity | 2,666,264 | 846,406 | ||||||
| Total liabilities and stockholders’ equity | $ | 9,641,267 | $ | 9,252,154 | ||||
| Reborn Coffee, Inc. and Subsidiaries Unaudited Condensed Consolidated Statements of Operations | ||||||||||||||||
| Nine Months Ended | Three Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net revenues: | ||||||||||||||||
| Stores | $ | 3,784,728 | $ | 4,091,512 | $ | 1,118,522 | $ | 1,487,858 | ||||||||
| Wholesale and online | 365,164 | 63,991 | 140,407 | 26,401 | ||||||||||||
| License income | - | - | - | - | ||||||||||||
| Total net revenues | 4,149,892 | 4,155,503 | 1,258,929 | 1,514,259 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Product, food and drink costs - stores | 1,071,764 | 1,324,465 | 441,349 | 442,163 | ||||||||||||
| Cost of sales—wholesale and online | 159,942 | 28,028 | 5,921 | 11,564 | ||||||||||||
| General and administrative | 5,844,057 | 5,687,095 | 1,536,357 | 1,793,246 | ||||||||||||
| Total operating costs and expenses | 7,075,763 | 7,039,588 | 1,983,627 | 2,246,973 | ||||||||||||
| Loss from operations | (2,925,871 | ) | (2,884,085 | ) | (724,698 | ) | (732,714 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Other income (expense) | 49,594 | 10,172 | 13,265 | 10,172 | ||||||||||||
| Interest expense | (149,827 | ) | (124,967 | ) | (7,515 | ) | (18,532 | ) | ||||||||
| Total other expense, net | (100,233 | ) | (114,795 | ) | 5,750 | (8,360 | ) | |||||||||
| Loss before income taxes | (3,026,104 | ) | (2,998,880 | ) | (718,948 | ) | (741,074 | ) | ||||||||
| Provision for income taxes | 800 | 7,828 | 800 | 7,828 | ||||||||||||
| Net loss | $ | (3,026,904 | ) | $ | (3,006,708 | ) | $ | (719,748 | ) | $ | (748,902 | ) | ||||
| Loss per share: | ||||||||||||||||
| Basic and diluted | $ | (1.40 | ) | $ | (1.82 | ) | $ | (0.30 | ) | $ | (0.45 | ) | ||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 2,165,841 | 1,652,034 | 2,420,628 | 1,654,698 | ||||||||||||
| Reborn Coffee, Inc. and Subsidiaries Unaudited Consolidated Statements of Cash Flows | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (3,026,904 | ) | (3,006,708 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Stock compensation | - | 285,000 | ||||||
| Operating lease | 10,192 | 30,732 | ||||||
| Depreciation | 184,554 | 198,654 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (increase) in accounts receivable | (19,871 | ) | (13,033 | ) | ||||
| Decrease (increase) in inventories | (66,543 | ) | (33,938 | ) | ||||
| Decrease (increase) in other assets, net | (478,093 | ) | (605,118 | ) | ||||
| Increase (decrease) in accounts payable | (137,277 | ) | 210,470 | |||||
| Increase (decrease) in accrued liabilities, net | 214,277 | (56,851 | ) | |||||
| Net cash used in operating activities | (3,319,670 | ) | (2,990,792 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Acquisition of property and equipment | (641,059 | ) | (746,426 | ) | ||||
| Net cash used in investing activities | (641,059 | ) | (746,426 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock | 4,879,979 | - | ||||||
| Repayment of borrowings from shareholder | (100,000 | ) | ||||||
| Proceeds from loan payable to others | 186,786 | - | ||||||
| Proceeds from line of credit | - | 1,009,027 | ||||||
| Repayment of loan payable, PPP | (35,327 | ) | (35,327 | ) | ||||
| Proceeds from loan payable, mortgage | - | 2,850,000 | ||||||
| Repayment of loan payable, mortgage | (2,850,000 | ) | ||||||
| Proceeds from loan payable to financial institutions | - | 286,032 | ||||||
| Repayments of loan payable to financial institutions | (1,029,147 | ) | (177,598 | ) | ||||
| Net cash provided by financing activities | 3,902,291 | 1,082,134 | ||||||
| Net increase (decrease) in cash | (58,438 | ) | (2,655,084 | ) | ||||
| Cash at beginning of year | 164,301 | 3,019,035 | ||||||
| Cash at end of year | 105,863 | 363,951 | ||||||
| Supplemental disclosures of non-cash investing and financing activities: | ||||||||
| Issuance of common shares for compensation | - | 285,000 | ||||||
| Converting credit line to equity | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid during the years for: | ||||||||
| Lease liabilities and assets | 1,169,606 | 900,978 | ||||||
| Interest | 149,827 | 124,967 | ||||||
FAQ
What was Reborn Coffee's (REBN) revenue in Q3 2024?
How much did REBN's wholesale and online sales grow in Q3 2024?
What percentage stake did REBN acquire in Bbang Ssaem Bakery?
How many stores does REBN plan to open worldwide in the next two years?
