Winc Reports Fourth Quarter and Full Year 2021 Financial Results
Winc (NYSE: WBEV) reported its financial results for Q4 and full-year 2021, showing a 4.5% increase in total net revenues to $18.5 million for Q4, with wholesale revenues soaring 152% to $3.9 million. However, the DTC segment saw a 7.0% decline to $14.4 million. The net loss expanded from $1.9 million in Q4 2020 to $5.6 million in Q4 2021. For the full year, total revenues rose 11.4% to $72.1 million, but the annual net loss increased to $14.6 million. Despite challenges, Winc experienced significant growth in wholesale, retail accounts, and core brand sales.
- Wholesale revenues increased 152% in Q4 2021 compared to Q4 2020.
- Total net revenues rose 11.4% year-over-year to $72.1 million.
- Core brands sold 167,175 cases, representing a 47% increase.
- Retail accounts grew by 114.8% to 16,905.
- DTC revenues declined 7.0% in Q4 and 1.7% for the full year.
- Net loss increased from $7.0 million in 2020 to $14.6 million in 2021.
- Gross profit decreased by 9.0% in Q4, with margins down to 38.7%.
- Adjusted EBITDA loss widened to $5.9 million in Q4 2021 from $1.5 million in Q4 2020.
Wholesale channel wins fuel continued growth
LOS ANGELES, March 29, 2022 /PRNewswire/ -- Winc, Inc. ("Winc" or the "Company") (NYSE American: WBEV), a differentiated platform for growing alcoholic beverages brands, today announced financial results for the quarter and full year ended December 31, 2021.
- Total net revenues increased
4.5% to$18.5 million - Wholesale revenues increased
152.0% to$3.9 million - DTC revenues declined
7.0% to$14.4 million - Net loss increased from
$1.9 million to$5.6 million - Adjusted EBITDA* loss of
$5.9 million versus a loss of$1.5 million
- Total net revenues increased
11.4% to$72.1 million - Wholesale revenues increased
106.9% to$17.0 million - DTC revenues declined
1.7% to$53.9 million - Net loss increased from
$7.0 million to$14.6 million - Adjusted EBITDA* loss of
$10.2 million versus a loss of$5.1 million - The five core brands** grew to a total of 167,175 cases sold, a
47% increase - Retail accounts*** increased
114.8% to 16,905
"Growth accelerated in the fourth quarter, driven by our wholesale channel, where we continue to experience strong customer response to our innovation and expanding portfolio. In 2021, we deepened our relationship with Whole Foods by growing the number of SKUs available at their locations. We grew active retail accounts by
Brian Smith, Winc's President, commented, "Our core brands collectively grew by
Net revenues increased
Gross profit of
Total operating expenses in the fourth quarter of 2021 increased
Net loss for the fourth quarter of 2021 was
Adjusted EBITDA* loss increased to
As of December 31, 2021, the Company had cash of
The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss fourth quarter and full year 2021 results. The conference call can be accessed by dialing (877) 705-6003 or for international callers by dialing (201) 493-6725. The live audio webcast can be accessed via the "News & Events" section of the Company's investor relations website at https://ir.winc.com/ or directly here. An archived replay of the webcast will be available on the Company's website shortly after the live event has concluded for at least 30 days.
Winc is a differentiated platform for growing alcoholic beverages brands, fueled by the joint capabilities of a data-driven brand development strategy paired with a true omni-channel distribution network. Winc's mission is to become the leading brand builder within the alcoholic beverages industry through an omni-channel growth platform.
Winc's common stock trades under the ticker symbol "WBEV" on the NYSE American.
Matt Thelen
Chief Strategy Officer and General Counsel
invest@winc.com
424-353-1767
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "could," "would," "project," "plan," "potentially," "preliminary," "likely," and similar expressions are intended to identify forward-looking statements. All statements contained in this press release other than statements of historical fact, are forward-looking statements, including statements regarding:
- The Company's total addressable market, future results of operations, financial position, research and development costs, capital requirements and needs for additional financing.
- The Company's expectations about market trends and its ability to capitalize on these trends.
- The Company's business strategy and plans.
- The impact on the Company's business, financial condition and results of operation from the ongoing and global COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide.
- The Company's ability to effectively and efficiently develop new brands of wines and introduce products in beverage categories beyond wine.
- The Company's ability to efficiently attract and retain consumers.
- The Company's ability to increase awareness of its portfolio of brands in order to successfully compete with other companies.
- The Company's ability to maintain and improve its technology platform supporting the Winc digital platform.
- The Company's ability to maintain and expand its relationship with wholesale distributors and retailers.
- The Company's ability to continue to operate in a heavily regulated environment.
- The Company's ability to establish and maintain intellectual property protection or avoid claims of infringement.
- The Company's ability to hire and retain qualified personnel.
- The Company's ability to obtain adequate financing.
The Company cautions you that the foregoing list may not contain all of the forward-looking statements made in this press release.
The Company has based the forward-looking statements contained in this press release on the Company's current expectations and projections about future events and trends that the Company believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of known and unknown risks, uncertainties, and assumptions, including those set forth under the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in the final prospectus filed with the Securities and Exchange Commission (the "SEC") on November 12, 2021 and the Company's other periodic filings with the SEC.
Moreover, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for management to predict all risks, nor can the Company assess the impact of all factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Any forward-looking statements made herein speak only as of the date of this press release, and you should not rely on forward-looking statements as predictions of future events. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or will occur. Except as required by applicable law, the Company undertakes no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations. Any forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, restructurings, joint ventures, partnerships or investments the Company may make.
These forward-looking statements are based upon information available to the Company as of the date of this press release, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
____________________ |
* Non-GAAP financial measure. See "Non-GAAP Financial Measures" for additional information and a reconciliation to the most directly comparable financial measure calculated in accordance with U.S. GAAP. |
**Each of the Company's current core brands has individually generated more than |
***Throughout this press release, the Company provides certain key performance indicators used by management and often used by competitors in the Company's industry. These and other key performance indicators are discussed in more detail in the section entitled "Supplemental Information" in this press release. |
Winc, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(In thousands, except share and per share amounts) | ||||||||
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 4,883 | $ | 7,008 | ||||
Accounts receivable, net of allowance for doubtful accounts and sales returns of | 2,575 | 1,505 | ||||||
Inventory | 23,888 | 11,880 | ||||||
Prepaid expenses and other current assets | 6,887 | 3,046 | ||||||
Total current assets | 38,233 | 23,439 | ||||||
Property and equipment, net | 496 | 166 | ||||||
Intangible assets, net | 11,537 | 488 | ||||||
Other assets | 122 | 131 | ||||||
Total assets | $ | 50,388 | $ | 24,224 | ||||
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,040 | $ | 3,673 | ||||
Accrued liabilities | 6,762 | 4,759 | ||||||
Contract liabilities | 12,127 | 8,691 | ||||||
Short-term early exercise stock option liabilities | 922 | 75 | ||||||
Current portion of long-term debt | — | 1,526 | ||||||
Total current liabilities | 23,851 | 18,724 | ||||||
Deferred rent | 147 | 223 | ||||||
Warrant liabilities | — | 1,067 | ||||||
Paycheck Protection Program note payable | — | 1,364 | ||||||
Long-term debt, net | — | 812 | ||||||
Long-term early exercise stock option liabilities | 839 | — | ||||||
Other liabilities | 2,069 | 421 | ||||||
Total liabilities | 26,906 | 22,611 | ||||||
Commitments and contingencies | ||||||||
Redeemable convertible preferred stock, | — | 56,462 | ||||||
Stockholders' equity (deficit): | ||||||||
Common stock, | 2 | 1 | ||||||
Preferred stock, par value | — | — | ||||||
Treasury stock (168,750 shares outstanding as of both December 31, 2021 and 2020) | (7) | (7) | ||||||
Additional paid-in capital | 95,207 | 2,229 | ||||||
Accumulated deficit | (71,720) | (57,072) | ||||||
Total stockholders' equity (deficit) | 23,482 | (54,849) | ||||||
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) | $ | 50,388 | $ | 24,224 | ||||
Winc, Inc. | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except share and per share amounts) | ||||||||||||||||
Three Months Ended | For the Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net revenues | $ | 18,496 | $ | 17,693 | $ | 72,069 | $ | 64,707 | ||||||||
Cost of revenues | 11,339 | 9,827 | 41,944 | 38,352 | ||||||||||||
Gross profit | 7,157 | 7,866 | 30,125 | 26,355 | ||||||||||||
Operating expenses: | ||||||||||||||||
Marketing | 5,838 | 5,616 | 17,516 | 17,388 | ||||||||||||
Personnel | 2,960 | 2,061 | 15,500 | 7,582 | ||||||||||||
General and administrative | 4,659 | 2,428 | 13,214 | 7,545 | ||||||||||||
Production and operation | 221 | 33 | 318 | 169 | ||||||||||||
Creative development | 87 | 10 | 374 | 83 | ||||||||||||
Total operating expenses | 13,765 | 10,148 | 46,922 | 32,767 | ||||||||||||
Loss from operations | (6,608) | (2,282) | (16,797) | (6,412) | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (106) | (158) | (654) | (834) | ||||||||||||
Income (expense) from change in fair value of warrant liabilities | 1,032 | 21 | 388 | (208) | ||||||||||||
Other income, net | 135 | 542 | 1,101 | 523 | ||||||||||||
Gain on debt forgiveness from Paycheck Protection Program | - | - | 1,364 | — | ||||||||||||
Total other income (expense), net | 1,061 | 405 | 2,199 | (519) | ||||||||||||
Loss before provision for income taxes | (5,547) | (1,877) | (14,598) | (6,931) | ||||||||||||
Income tax expense | 33 | 12 | 50 | 27 | ||||||||||||
Net loss | $ | (5,580) | $ | (1,889) | $ | (14,648) | $ | (6,958) | ||||||||
Net loss per common share: | ||||||||||||||||
Basic and diluted | $ | (0.73) | $ | (2.10) | $ | (4.42) | $ | (7.80) | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic and diluted | 7,686,024 | 900,564 | 3,312,484 | 892,333 | ||||||||||||
Winc, Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
(In thousands) | ||||||||
For the year ended | ||||||||
December 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (14,648) | $ | (6,958) | ||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization expense | 714 | 510 | ||||||
Amortization of debt issuance costs | 161 | 251 | ||||||
Stock-based compensation | 1,330 | 275 | ||||||
(Income) expense from change in fair value of warrant liabilities | (388) | 208 | ||||||
Forgiveness of employee promissory notes | 3,492 | — | ||||||
Interest income from employee promissory notes | (38) | — | ||||||
Gain on debt forgiveness from Paycheck Protection Program note payable | (1,364) | — | ||||||
Issuance of common stock in exchange for investor relations services | 536 | — | ||||||
Bad debt expense | 311 | — | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 114 | (137) | ||||||
Inventory | (9,879) | (3,391) | ||||||
Prepaid expenses and other current assets | (4,092) | (381) | ||||||
Other assets | 243 | (43) | ||||||
Accounts payable | (1,385) | (126) | ||||||
Accrued liabilities | 440 | 2,248 | ||||||
Contract liabilities | 3,436 | 7,553 | ||||||
Deferred rent | (75) | (86) | ||||||
Other liabilities | (119) | 496 | ||||||
Net cash (used in) provided by operating activities | (21,211) | 419 | ||||||
Cash flows from investing activities | ||||||||
Cash paid for asset acquisition | (8,758) | — | ||||||
Purchase of property and equipment | (721) | (359) | ||||||
Loans for employee advances | — | (16) | ||||||
Net cash used in investing activities | (9,479) | (375) | ||||||
Cash flows from financing activities | ||||||||
Proceeds from Paycheck Protection Program note payable | — | 1,364 | ||||||
Payments on line of credit, net | — | (6,000) | ||||||
Repayments of long-term debt | (2,500) | (1,669) | ||||||
Proceeds from issuance of preferred stock and warrants, net of issuance costs | 13,290 | 6,833 | ||||||
Proceeds received for the issuance of common stock | — | 18 | ||||||
Proceeds from initial public offering, net of deferred costs | 17,675 | — | ||||||
Proceeds from exercise of employee stock options | 100 | — | ||||||
Net cash provided by financing activities | 28,565 | 546 | ||||||
Net (decrease) increase in cash | (2,125) | 590 | ||||||
Cash at beginning of period | 7,008 | 6,418 | ||||||
Cash at end of period | $ | 4,883 | $ | 7,008 | ||||
Supplemental disclosure of cash flow information | ||||||||
Interest paid | $ | 287 | $ | 597 | ||||
Taxes paid | $ | 91 | $ | 27 | ||||
Supplemental noncash investing and financing activities | ||||||||
Employee promissory notes issued for stock option exercises | $ | 3,453 | $ | — | ||||
Vesting of early exercised stock options | $ | 338 | $ | — | ||||
Issued shares of redeemable convertible preferred stock in connection with acquisitions | $ | 1,000 | $ | — | ||||
Conversion of redeemable convertible preferred stock to common stock upon IPO | $ | 68,874 | $ | — | ||||
Deferred offering costs reclassified to additional paid-in capital | $ | 2,632 | $ | — | ||||
Conversion of liability classified warrants to equity upon initial public offering | $ | 2,625 | $ | — | ||||
Exercise of warrants | $ | 89 | $ | — | ||||
Non-GAAP Financial Measures
The Company's management believes Adjusted EBITDA and Adjusted EBITDA margin, which are measures that are not calculated in accordance with generally accepted accounting principles in the United States, are helpful to investors, analysts and other interested parties because these measures can assist in providing a more consistent and comparable overview of the Company's operations across historical financial periods. In addition, these measures are frequently used by analysts, investors and other interested parties to evaluate and assess performance. The Company defines Adjusted EBITDA as net loss before interest, taxes, depreciation and amortization, stock based compensation expense and other items the Company believes are not indicative of the Company's operating performances, such as gain or loss attributable to the change in fair value of warrants. The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by net revenues. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in the Company's consolidated statement of operations that are necessary to run the Company's business. Some of these limitations include:
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on the Company's debt;
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in, or cash requirements for the Company's working capital needs;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future; and
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures.
Other companies, including other companies in the Company's industry, may not use such measures or may calculate the measures differently than as presented in this Annual Report, limiting their usefulness as comparative measures.
A reconciliation of net loss to Adjusted EBITDA and net loss margin to Adjusted EBITDA margin is set forth below (dollars in thousands). Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net revenues.
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net loss | $ | (5,580) | $ | (1,889) | $ | (14,648) | $ | (6,958) | ||||||||
Interest expense | 106 | 158 | 654 | 834 | ||||||||||||
Income tax expense | 33 | 12 | 50 | 27 | ||||||||||||
Depreciation and amortization expense | 194 | 114 | 714 | 510 | ||||||||||||
EBITDA | $ | (5,247) | $ | (1,605) | $ | (13,230) | $ | (5,587) | ||||||||
Stock-based compensation | 339 | 101 | 1,330 | 275 | ||||||||||||
Gain on debt forgiveness from Paycheck Protection Program | — | — | (1,364) | — | ||||||||||||
Forgiveness of employee promissory notes issued for stock | — | — | 3,453 | — | ||||||||||||
Change in fair value of warrant liabilities | (1,032) | (21) | (388) | 208 | ||||||||||||
Adjusted EBITDA | $ | (5,940) | $ | (1,525) | $ | (10,199) | $ | (5,104) | ||||||||
Net loss margin | -30.2 | % | -10.7 | % | -20.3 | % | -10.8 | % | ||||||||
Adjusted EBITDA margin | -32.1 | % | -8.6 | % | -14.2 | % | -7.9 | % | ||||||||
Winc, Inc. | ||||||||||||||||
Supplemental Information | ||||||||||||||||
(In thousands, except for average order value and retail accounts) | ||||||||||||||||
Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
DTC | ||||||||||||||||
DTC net revenues | $ | 14,406 | $ | 15,497 | $ | 53,931 | $ | 54,854 | ||||||||
DTC gross profit | 5,999 | 7,314 | 23,045 | 23,055 | ||||||||||||
Average order value | $ | 75.58 | $ | 69.19 | $ | 71.91 | $ | 63.04 | ||||||||
Wholesale | ||||||||||||||||
Wholesale net revenues | $ | 3,911 | $ | 1,552 | $ | 17,042 | $ | 8,237 | ||||||||
Wholesale gross profit | 1,075 | 206 | 6,473 | 2,393 | ||||||||||||
Retail accounts | 8,720 | 3,303 | 16,905 | 7,869 | ||||||||||||
Average Order Value
The Company believes the continued growth of its average order value demonstrates both the Company's increasing value proposition for its consumer base and their increasing affinity for the Company's premium brands. The Company defines average order value as the sum of DTC net revenues, divided by the total orders placed in that period. Total orders are the summation of all completed individual purchase transactions in a given period. Average order value may fluctuate as the Company expands into and increases its presence in additional product categories.
Retail Accounts
Retail account growth is a key metric for the Company's continued growth in wholesale as it is a measure of how widely the Company's products are distributed. The metric represents the number of retail accounts in which the Company sold its products in a given period.
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SOURCE Winc
FAQ
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