Waitr Holdings Reports Fiscal 2019 Third Quarter Results

November 7, 2019

LAFAYETTE, La.--(BUSINESS WIRE)--Nov. 7, 2019-- Waitr Holdings Inc. (Nasdaq:WTRH) (“Waitr” and “Company”), a leader in on-demand food ordering and delivery, today reported financial results for its fiscal 2019 third quarter ended September 30, 2019.

“We made progress in the third quarter streamlining our operations and making improvements that consistently create a better customer and restaurant partner experience while also setting us up to reduce expenses now and in the future. During the quarter, we started implementing changes that are expected to result in an incremental $25 to $30 million of annual savings in FY 2020. We remain dedicated to stabilizing the business in terms of cash flow and charting a clear path towards profitability,” said Adam Price, Chief Executive Officer of Waitr.

Third Quarter 2019 Financial Highlights

  • Revenue for the third quarter of 2019 increased 153% to $49.2 million compared to $19.4 million in the third quarter of 2018. Revenue related to the Bite Squad Merger totaled $24.0 million for the third quarter of 2019.
  • Net loss for the third quarter of 2019 was $220.1 million, or a loss of $2.89 per diluted share, compared to a loss of $6.5 million, or a loss of $0.64 per diluted share, in the third quarter of 2018. Net loss for the third quarter of 2019 included $192.1 million of goodwill and intangible asset impairment charges and $2.2 million of non-cash stock compensation expenses.
  • Adjusted EBITDA1 for the third quarter of 2019 was a loss of $15.4 million compared to a loss of $2.5 million in the third quarter of 2018.

Third Quarter 2019 Key Business Metrics and Updates

  • Gross Food Sales2 for the third quarter of 2019 increased to $161.4 million compared to $77.7 million in the third quarter of 2018. Gross Food Sales related to the Bite Squad Merger totaled $74.0 million for the third quarter of 2019.
  • Active Diners for the third quarter of 2019 increased to 2.4 million compared to 843,000 for the third quarter of 2018.
  • During third of quarter 2019, Waitr made progress on its “Path to Profitability” initiative with the intent of strengthening the business through realizing synergies from the Bite Squad combination and aligning the teams and cost structure of the combined organization under one set of guiding principles and objectives. During the quarter, the Company realized approximately $2 million of cost savings from this initiative and more recently, began implementing additional changes to improve annual operating cash flows by an incremental $25 to $30 million in Fiscal Year 2020.

1

 

Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of GAAP net loss to Adjusted EBITDA is included in the accompanying financial data. See also “Non-GAAP Financial Measure,” included herein.

2

 

Gross Food Sales represents food and beverage receipts, plus taxes, prepaid gratuities and diner fees.

Strategic Alternative Review Conclusion

The Company announced today that its Board of Directors (“Board”) has completed the strategic alternative review process first announced on August 8, 2019. The Board has concluded that the Company will best serve the interests of its stockholders at this time by focusing on executing its strategic plan as an independent public company. The Company remains open to potential value creating opportunities.

Third Quarter 2019 Earnings Conference Call

The Company will host a conference call to discuss third quarter 2019 financial results today at 5:00 p.m. ET. The conference call will be webcast live from the Company’s investor relations website at http://investors.waitrapp.com. The call can also be accessed live over the phone by dialing (877) 705-6003, or for international callers (201) 493-6725. A replay will be available one hour after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13696231. That replay will be available until Thursday, November 14, 2019.

About Waitr Holdings Inc.

Founded in 2013 and based in Lafayette, Louisiana, Waitr is a leader in on-demand food ordering and delivery. Waitr, along with recently acquired food delivery company Bite Squad, connects local restaurants to hungry diners in underserved U.S. markets. Together they are the most convenient way to discover, order and receive great food from the best local restaurants and national chains. As of September 30, 2019, Waitr and Bite Squad operated in small and medium sized markets in the United States in over 700 cities.

Non-GAAP Financial Measure

Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”).

We define Adjusted EBITDA as net loss adjusted to exclude interest expense, income taxes, depreciation and amortization, acquisition and restructuring costs, stock-based compensation expense, impairments of intangible assets and goodwill and gains and losses associated with derivatives and debt extinguishments and when applicable, other expenses that do not reflect our core operations. We use this non-GAAP financial measure as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of acquisitions and restructuring, the impact of depreciation and amortization expense on our fixed assets and the impact of stock-based compensation expense. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to performance measures derived in accordance with GAAP.

See “Non-GAAP Financial Measure/Adjusted EBITDA” below for a reconciliation of net loss to Adjusted EBITDA for the three and nine months ended September 30, 2019 and 2018.

Cautionary Note Concerning Forward-Looking Statements

This press release contains “forward-looking statements,” as defined by the federal securities laws, including statements regarding the future performance of the Company. Forward-looking statements reflect Waitr’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward-looking statements. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in Waitr’s Annual Report on Form 10-K, filed with the SEC on March 15, 2019, as such factors may be updated from time to time in Waitr’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Waitr’s filings with the SEC. While forward-looking statements reflect Waitr’s good faith beliefs, they are not guarantees of future performance. Waitr disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to Waitr (or to third parties making the forward-looking statements).

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

REVENUE

 

$

49,201

 

 

$

19,431

 

 

$

148,575

 

 

$

48,000

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations and support (1)

 

 

37,289

 

 

 

14,022

 

 

 

113,170

 

 

 

35,056

 

Sales and marketing (1)

 

 

15,953

 

 

 

3,947

 

 

 

41,615

 

 

 

9,116

 

Research and development

 

 

1,920

 

 

 

791

 

 

 

6,009

 

 

 

1,988

 

General and administrative (1)

 

 

12,817

 

 

 

6,312

 

 

 

44,115

 

 

 

17,667

 

Depreciation and amortization

 

 

4,851

 

 

 

400

 

 

 

13,791

 

 

 

902

 

Goodwill impairment

 

 

119,212

 

 

 

 

 

 

119,212

 

 

 

 

Intangible and other asset impairments

 

 

72,917

 

 

 

 

 

 

72,935

 

 

 

 

Loss on disposal of assets

 

 

11

 

 

 

 

 

 

26

 

 

 

8

 

TOTAL COSTS AND EXPENSES

 

 

264,970

 

 

 

25,472

 

 

 

410,873

 

 

 

64,737

 

LOSS FROM OPERATIONS

 

 

(215,769

)

 

 

(6,041

)

 

 

(262,298

)

 

 

(16,737

)

OTHER EXPENSES (INCOME) AND LOSSES (GAINS), NET

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

2,775

 

 

 

441

 

 

 

6,570

 

 

 

903

 

Interest income

 

 

(297

)

 

 

(1

)

 

 

(877

)

 

 

(2

)

Gain on derivatives

 

 

 

 

 

(9

)

 

 

 

 

 

(336

)

Other expenses

 

 

1,827

 

 

 

39

 

 

 

1,654

 

 

 

1

 

NET LOSS BEFORE INCOME TAXES

 

 

(220,074

)

 

 

(6,511

)

 

 

(269,645

)

 

 

(17,303

)

Income tax expense

 

 

30

 

 

 

4

 

 

 

60

 

 

 

38

 

NET LOSS

 

$

(220,104

)

 

$

(6,515

)

 

$

(269,705

)

 

$

(17,341

)

LOSS PER SHARE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(2.89

)

 

$

(0.64

)

 

$

(3.77

)

 

$

(1.72

)

Weighted average common shares outstanding – basic and diluted

 

 

76,145,317

 

 

 

10,145,527

 

 

 

71,071,777

 

 

 

10,064,560

 

(1) Certain prior period amounts have been reclassified to conform to the current period’s presentation. The Company has revised the classification of certain employee-related wages and payroll taxes associated with such wages to better align the statement of operations line items with departmental responsibilities and management of operations.

KEY BUSINESS METRICS

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Active Diners (as of period end)

 

 

2,393,063

 

 

 

842,533

 

 

 

2,393,063

 

 

 

842,533

 

Average Daily Orders

 

 

48,155

 

 

 

24,300

 

 

 

53,579

 

 

 

20,600

 

Gross Food Sales (dollars in thousands)

 

$

161,390

 

 

$

77,692

 

 

$

514,835

 

 

$

197,505

 

Average Order Size (in dollars)

 

$

36.43

 

 

$

35.14

 

 

$

36.12

 

 

$

35.24

 

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018 (1)

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

52,198

 

 

$

209,340

 

Accounts receivable, net

 

 

5,664

 

 

 

3,687

 

Capitalized contract costs, current

 

 

 

 

 

1,869

 

Prepaid expenses and other current assets

 

 

8,474

 

 

 

4,548

 

TOTAL CURRENT ASSETS

 

 

66,336

 

 

 

219,444

 

Property and equipment, net

 

 

4,474

 

 

 

4,551

 

Capitalized contract costs, noncurrent

 

 

 

 

 

827

 

Goodwill

 

 

106,734

 

 

 

1,408

 

Intangible assets, net

 

 

26,430

 

 

 

261

 

Other noncurrent assets

 

 

529

 

 

 

61

 

TOTAL ASSETS

 

$

204,503

 

 

$

226,552

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,420

 

 

$

1,827

 

Restaurant food liability

 

 

6,989

 

 

 

208

 

Accrued payroll

 

 

7,034

 

 

 

3,055

 

Short-term loans

 

 

3,193

 

 

 

658

 

Deferred revenue, current

 

 

767

 

 

 

3,314

 

Income tax payable

 

 

30

 

 

 

25

 

Other current liabilities

 

 

15,107

 

 

 

4,508

 

TOTAL CURRENT LIABILITIES

 

 

38,540

 

 

 

13,595

 

Long-term debt

 

 

120,884

 

 

 

80,985

 

Accrued workers’ compensation liability

 

 

542

 

 

 

908

 

Deferred revenue, noncurrent

 

 

212

 

 

 

1,356

 

Other noncurrent liabilities

 

 

325

 

 

 

217

 

TOTAL LIABILITIES

 

 

160,503

 

 

 

97,061

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value

 

 

8

 

 

 

5

 

Additional paid in capital

 

 

384,628

 

 

 

200,417

 

Accumulated deficit

 

 

(340,636

)

 

 

(70,931

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

44,000

 

 

 

129,491

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

204,503

 

 

$

226,552

 

(1) Certain prior period amounts have been reclassified to conform to the current period’s presentation.

CONSOLIDATED CASH FLOW STATEMENTS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

2019

 

 

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(269,705

)

 

$

(17,341

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Non-cash interest expense

 

 

3,346

 

 

 

252

 

Non-cash advertising expense

 

 

379

 

 

 

377

 

Stock-based compensation

 

 

6,747

 

 

 

3,481

 

Equity issued in exchange for services

 

 

90

 

 

 

90

 

Loss on disposal of assets

 

 

26

 

 

 

8

 

Depreciation and amortization

 

 

13,791

 

 

 

902

 

Goodwill impairment

 

 

119,212

 

 

 

 

Intangible and other asset impairments

 

 

72,935

 

 

 

 

Amortization of capitalized contract costs

 

 

1,614

 

 

 

1,023

 

Gain on derivatives

 

 

 

 

 

(336

)

Other non-cash expense

 

 

 

 

 

74

 

Imputed interest income

 

 

(39

)

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(248

)

 

 

(1,384

)

Capitalized contract costs

 

 

(3,585

)

 

 

(1,910

)

Prepaid expenses and other current assets

 

 

(2,803

)

 

 

(2,268

)

Accounts payable

 

 

2,640

 

 

 

1,486

 

Restaurant food liability

 

 

5,851

 

 

 

52

 

Deferred revenue

 

 

(3,691

)

 

 

1,889

 

Income tax payable

 

 

5

 

 

 

7

 

Accrued payroll

 

 

2,853

 

 

 

1,983

 

Accrued workers’ compensation liability

 

 

(366

)

 

 

155

 

Other current liabilities

 

 

(474

)

 

 

5,518

 

Other noncurrent liabilities

 

 

111

 

 

 

(47

)

Net cash used in operating activities

 

 

(51,311

)

 

 

(5,989

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,493

)

 

 

(1,836

)

Acquisition of Bite Squad, net of cash acquired

 

 

(192,568

)

 

 

 

Other acquisitions

 

 

(395

)

 

 

(11

)

Collections on notes receivable

 

 

72

 

 

 

 

Internally developed software

 

 

(1,096

)

 

 

 

Proceeds from sale of property and equipment

 

 

28

 

 

 

 

Net cash used in investing activities

 

 

(195,452

)

 

 

(1,847

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from line of credit

 

 

 

 

 

4,000

 

Proceeds from convertible notes issuance

 

 

 

 

 

1,410

 

Waitr shares redeemed for cash

 

 

(10

)

 

 

 

Proceeds from issuance of stock

 

 

50,002

 

 

 

 

Equity issuance costs

 

 

(4,179

)

 

 

 

Proceeds from Additional Term Loans

 

 

42,080

 

 

 

 

Proceeds from short-term loans

 

 

5,032

 

 

 

2,172

 

Payments on short-term loans

 

 

(2,509

)

 

 

(862

)

Proceeds from exercise of stock options

 

 

4

 

 

 

11

 

Taxes paid related to net settlement on stock-based compensation

 

 

(799

)

 

 

 

Net cash provided by financing activities

 

 

89,621

 

 

 

6,731

 

Net change in cash

 

 

(157,142

)

 

 

(1,105

)

Cash, beginning of period

 

 

209,340

 

 

 

3,947

 

Cash, end of period

 

$

52,198

 

 

$

2,842

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for state income taxes

 

$

30

 

 

$

31

 

Cash earned during the period for interest

 

 

838

 

 

 

 

Cash paid during the period for interest

 

 

3,224

 

 

 

88

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Services receivable

 

$

 

 

$

1,000

 

Stock issued as consideration in Bite Squad acquisition

 

 

126,574

 

 

 

 

Stock issued in connection with Additional Term Loans

 

 

3,884

 

 

 

 

Non-cash gain on debt extinguishment

 

 

1,897

 

 

 

 

Seller-financed payables related to other acquisitions

 

 

801

 

 

 

 

Non-cash investments in other acquisitions

 

 

801

 

 

 

142

 

Debt assumed in IndiePlate asset acquisition

 

 

 

 

 

60

 

Bifurcated embedded derivatives

 

 

 

 

 

87

 

Discount on convertible notes due to beneficial conversion feature

1,529

NON-GAAP FINANCIAL MEASURE

ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

NET LOSS

 

$

(220,104

)

 

$

(6,515

)

 

$

(269,705

)

 

$

(17,341

)

Interest expense

 

 

2,775

 

 

 

441

 

 

 

6,570

 

 

 

903

 

Income taxes

 

 

30

 

 

 

4

 

 

 

60

 

 

 

38

 

Depreciation and amortization

 

 

4,851

 

 

 

400

 

 

 

13,791

 

 

 

902

 

Goodwill impairment

 

 

119,212

 

 

 

 

 

 

119,212

 

 

 

 

Stock-based compensation

 

 

2,225

 

 

 

1,329

 

 

 

6,837

 

 

 

3,571

 

Gain on derivatives

 

 

 

 

 

(9

)

 

 

 

 

 

(336

)

Intangible and other asset impairments

 

 

72,917

 

 

 

 

 

 

72,935

 

 

 

 

Business combination related expenditures

 

 

 

 

 

1,870

 

 

 

6,956

 

 

 

5,473

 

Costs associated with reduction in force

 

 

658

 

 

 

 

 

 

1,026

 

 

 

 

Accrued legal contingency

 

 

2,000

 

 

 

 

 

 

2,000

 

 

 

 

ADJUSTED EBITDA

 

$

(15,436

)

 

$

(2,480

)

 

$

(40,318

)

 

$

(6,790

)

 

Source: Waitr Holdings Inc.

Investors
WaitrIR@icrinc.com
or
Media
Liz Sniegocki
Director of Communications
liz.sniegocki@waitrapp.com


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