Business Wire | Nov 9, 2020 04:05PM EST

Waitr Reports Third Quarter 2020 Results

Nov. 09, 2020

LAFAYETTE, La.--(BUSINESS WIRE)--Nov. 09, 2020--Waitr Holdings Inc. (Nasdaq: WTRH) ("Waitr" or the "Company"), a leader in on-demand food ordering and delivery, today reported financial results for the third quarter of 2020.

Third Quarter 2020 Highlights

* Revenue for the third quarter of 2020 was $52.7 million, compared to $49.2 million in the third quarter of 2019, an increase of 7%. * Net income for the third quarter of 2020 was $4.6 million, or $0.04 per diluted share, compared to a loss of $220.1 million, or a loss of $2.89 per diluted share, in the third quarter of 2019. * Adjusted EBITDA1 for the third quarter of 2020 was $13.0 million, compared to a loss of $15.4 million in the third quarter of 2019, an increase of $28.4 million. * As of October 31, 2020, cash on hand was approximately $80 million. * The Company completed its at-the-market common equity offering program on July 10, 2020, issuing an aggregate of 23,698,720 shares of common stock for net proceeds of $47.6 million during the period of March 20, 2020 through July 10, 2020. * On August 3, 2020, the Company prepaid $10.5 million to its lender in exchange for a rate decrease of 200 basis points for 1 year along with a one-year extension of the maturity date to November 15, 2023 on both its credit facility and convertible notes.

"We achieved a second consecutive quarter of continued profitability and operating cash flow, which we believe is the result of our fundamental strategic initiatives and focus on operating a profitable business. We believe the continued hard work of our team members, diversified selection of restaurant partners and increased driver base strengthens our position in many markets," said Carl Grimstad, Chairman and CEO of Waitr.

"Some of our restaurant partners have recently faced additional hardships arising from the overall macroeconomic challenges related to the ongoing pandemic as well as headwinds from several recent hurricanes that have hit the Southeast. We are working to help certain of these restaurant partners overcome these hardships in an attempt to return to a sense of normalcy during this tough time," concluded Grimstad.

Waitr has also diversified its product offering beyond food delivery, having recently introduced its tableside service technology. Combining this "dine-in" offering with its existing delivery and take-out ordering services, Waitr now offers an integrated payment solution that can help restaurants improve their safety protocols, sales and efficiency, both inside and outside the four walls of the restaurant.

Additionally, the Company has continued its expansion into new delivery verticals such as same-day groceries and alcohol delivery services, all while offering no-contact delivery.

1Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of GAAP net income (loss) to Adjusted EBITDA is included under "Non-GAAP Financial Measure".

Third Quarter 2020 Key Business Metrics

* Average Daily Orders were 39,880. * Active Diners as of September 30, 2020 were over 2 million.

Liquidity Update

As of September 30, 2020, the Company had cash on hand of $77.1 million. The Company had total long-term debt outstanding at September 30, 2020 of $99.2 million, consisting of $49.5 million of term loans, $49.5 million of convertible notes and $0.2 million of promissory notes. The term loans and convertible notes mature in November 2023. Short-term debt as of September 30, 2020 totaled $1.2 million.

The combination of the effects of implementing several strategic initiatives focused on improving revenue per order, cost per order, cash flow and profitability, along with proceeds from the sales of common stock pursuant to the at-the-market offerings launched by the Company in March and May 2020, resulted in increases in working capital and liquidity from December 31, 2019.

Third Quarter 2020 Earnings Conference Call

The Company will host a conference call to discuss third quarter 2020 financial results today at 5 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 (866) 269-4261, or for international callers (323) 347-3278. 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 9968426. That replay will be available until Monday, November 16, 2020.

About Waitr Holdings Inc.

Founded in 2013 and based in Lafayette, Louisiana, Waitr operates an online food ordering platform, providing delivery, carryout and dine-in options. Waitr, along with Bite Squad connect local restaurants and grocery stores to diners in underserved U.S. markets. Together they are a convenient way to discover, order and receive great food from local restaurants, national chains and grocery stores. As of September 30, 2020, Waitr and Bite Squad operated in small and medium sized markets in the United States in over 700 cities.

Cautionary Note Concerning Forward-Looking Statements

This press release contains "forward-looking statements," as defined by the federal securities laws, including statements regarding the Company's financial results, implementation of strategic initiatives and 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 the impact of the coronavirus (COVID-19) pandemic on the Company's business and operations, and those described under the section entitled "Risk Factors" in Waitr's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020, 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. Additional information will be set forth in Waitr's Quarterly Report on Form 10-Q for the three months ended September 30, 2020, which will be filed with the SEC on November 9, 2020, and should be read in conjunction with these financial results. 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).

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 income (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, 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 income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2019.

CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts) (Unaudited)

Three Months Ended September Nine Months Ended September 30, 30,

2020 2019 2020 2019

REVENUE $ 52,734 $ 49,201 $ 157,483 $ 148,575

COSTS AND EXPENSES:

Operations and 27,409 37,289 84,321 113,170 support

Sales and 3,288 15,953 8,854 41,615 marketing

Research and 820 1,920 3,457 6,009 development

General and 11,380 12,817 32,252 44,115 administrative

Depreciation and 2,103 4,851 6,242 13,791 amortization

Goodwill - 119,212 - 119,212 impairment

Intangible andother asset - 72,917 29 72,935 impairments

Loss on disposal 4 11 15 26 of assets

TOTAL COSTS AND 45,004 264,970 135,170 410,873 EXPENSES

INCOME (LOSS) 7,730 (215,769 ) 22,313 (262,298 )FROM OPERATIONS

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

Interest expense 2,117 2,775 7,521 6,570

Interest income (14 ) (297 ) (95 ) (877 )

Other expense 965 1,827 1,640 1,654

NET INCOME(LOSS) BEFORE 4,662 (220,074 ) 13,247 (269,645 )INCOME TAXES

Income tax 18 30 52 60 expense

NET INCOME $ 4,644 $ (220,104 ) $ 13,195 $ (269,705 )(LOSS)

INCOME (LOSS) PER SHARE:

Basic $ 0.04 $ (2.89 ) $ 0.14 $ (3.77 )

Diluted $ 0.04 $ (2.89 ) $ 0.13 $ (3.77 )

Weighted-averageshares used tocompute net income (loss)per share:

Weighted averagecommon shares 109,181,847 76,145,317 93,763,069 71,071,777 outstanding?-?basic

Weighted averagecommon shares 123,785,750 76,145,317 102,519,454 71,071,777 outstanding?-?diluted

CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)

September 30, December 31,

2020 2019

(unaudited) ^2

ASSETS

CURRENT ASSETS

Cash $ 77,136 $ 29,317

Accounts receivable, net 3,925 3,272

Capitalized contract costs, current 643 199

Prepaid expenses and other current assets 4,597 8,329

TOTAL CURRENT ASSETS 86,301 41,117

Property and equipment, net 3,452 4,072

Capitalized contract costs, noncurrent 2,220 772

Goodwill 106,734 106,734

Intangible assets, net 23,414 25,761

Other noncurrent assets 435 517

TOTAL ASSETS $ 222,556 $ 178,973

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

CURRENT LIABILITIES

Accounts payable $ 4,975 $ 4,384

Restaurant food liability 4,736 5,612

Accrued payroll 2,248 5,285

Short-term loans 1,172 3,612

Deferred revenue, current 24 414

Income tax payable 52 51

Other current liabilities 17,026 13,293

TOTAL CURRENT LIABILITIES 30,233 32,651

Long-term debt 93,689 123,244

Accrued medical contingency 16,839 17,203

Accrued workers' compensation liability - 102

Deferred revenue, noncurrent - 45

Other noncurrent liabilities 1,107 325

TOTAL LIABILITIES 141,868 173,570

STOCKHOLDERS' EQUITY:

Common stock, $0.0001 par value 11 8

Additional paid in capital 447,224 385,137

Accumulated deficit (366,547 ) (379,742 )

TOTAL STOCKHOLDERS' EQUITY 80,688 5,403

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 222,556 $ 178,973

2During the third quarter of 2020, we identified and corrected an immaterial error related to the understatement of an accrued medical contingency that affected the previously issued consolidated balance sheet at December 31, 2019. The impact of the updated estimated liability for the claim is reflected herein. See "Notes to Condensed Consolidated Financial Statements, Note 9 - Correction of Prior Period Error" included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 filed with the SEC.

CONSOLIDATED CASH FLOW STATEMENTS (In thousands) (Unaudited)

Nine Months Ended September 30,

? 2020 2019

Cash flows from operating activities:

Net income (loss) $ 13,195 $ (269,705 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Non-cash interest expense 5,126 3,346

Non-cash advertising expense - 379

Stock-based compensation 3,178 6,747

Equity issued in exchange for services - 90

Loss on disposal of assets 15 26

Depreciation and amortization 6,242 13,791

Goodwill impairment - 119,212

Intangible and other asset impairments 29 72,935

Amortization of capitalized contract costs 327 1,614

Other non-cash income (31 ) (39 )

Changes in assets and liabilities:

Accounts receivable (653 ) (248 )

Capitalized contract costs (2,219 ) (3,585 )

Prepaid expenses and other current assets 3,732 (2,803 )

Accounts payable 591 2,640

Restaurant food liability (876 ) 5,851

Deferred revenue (435 ) (3,691 )

Income tax payable 1 5

Accrued payroll (3,037 ) 2,853

Accrued medical contingency (363 ) (604 )

Accrued workers' compensation liability (102 ) (160 )

Other current liabilities 4,085 (76 )

Other noncurrent liabilities 781 111

Net cash provided by (used in) operating 29,586 (51,311 )activities

Cash flows from investing activities:

Purchases of property and equipment (968 ) (1,493 )

Acquisition of Bite Squad, net of cash acquired - (192,568 )

Other acquisitions (339 ) (395 )

Collections on notes receivable 51 72

Internally developed software (2,387 ) (1,096 )

Proceeds from sale of property and equipment 14 28

Net cash used in investing activities (3,629 ) (195,452 )

Cash flows from financing activities:

Waitr shares redeemed for cash - (10 )

Proceeds from issuance of stock 48,314 50,002

Equity issuance costs (740 ) (4,179 )

Proceeds from Additional Term Loans - 42,080

Payments on long-term loans (22,594 ) -

Proceeds from short-term loans 1,906 5,032

Payments on short-term loans (4,336 ) (2,509 )

Proceeds from exercise of stock options 40 4

Taxes paid related to net settlement on (728 ) (799 )stock-based compensation

Net cash provided by financing activities 21,862 89,621

Net change in cash 47,819 (157,142 )

Cash, beginning of period 29,317 209,340

Cash, end of period $ 77,136 $ 52,198

Supplemental disclosures of cash flow information:

Cash paid during the period for state income taxes $ 64 $ 30

Cash paid during the period for interest 2,395 3,224

Supplemental disclosures of non-cash investing and financing activities:

Stock issued as consideration in Bite Squad $ - $ 126,574 acquisition

Conversion of convertible notes to stock 12,024 -

Stock issued in connection with Additional Term - 3,884 Loans

Non-cash gain on debt extinguishment - 1,897

Seller-financed payables related to other - 801 acquisitions

Non-cash investments in other acquisitions - 801

NON-GAAP FINANCIAL MEASURE ADJUSTED EBITDA (In thousands) (Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

NET INCOME (LOSS) $ 4,644 $ (220,104 ) $ 13,195 $ (269,705 )

Interest expense 2,117 2,775 7,521 6,570

Income taxes 18 30 52 60

Depreciation and 2,103 4,851 6,242 13,791 amortization

Goodwill impairment - 119,212 - 119,212

Stock-based compensation 1,728 2,225 3,178 6,837

Intangible and other asset - 72,917 29 72,935 impairments

Business combination - - - 6,956 related expenditures

Costs associated with - 658 - 1,026 reduction in force

Restructuring expenses - - 850 -

Accrued legal contingency 1,023 2,000 1,023 2,000

One-time insurance reserve 1,352 - 1,352 - adjustment

ADJUSTED EBITDA $ 12,985 $ (15,436 ) $ 33,442 $ (40,318 )

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