Business Wire | Aug 6, 2020 08:30AM EDT

Waitr Reports Second Quarter 2020 Results

Aug. 06, 2020

LAFAYETTE, La.--(BUSINESS WIRE)--Aug. 06, 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 second quarter of 2020.

Second Quarter 2020 Highlights

* Revenue for the second quarter of 2020 was $60.5 million, compared to $51.3 million in the second quarter of 2019, an increase of 18%.

* Net income for the second quarter of 2020 was $10.7 million, or $0.10 per diluted share, compared to a loss of $24.9 million, or a loss of $0.32 per diluted share, in the second quarter of 2019, a change of $35.6 million.

* Adjusted EBITDA1 for the second quarter of 2020 was $16.7 million, compared to a loss of $14.9 million in the second quarter of 2019, a change of $31.6 million.

* As of July 31, 2020, cash on hand was $87.3 million.

* On August 3, 2020, the Company prepaid $10.5 million in debt in exchange for a rate decrease of 200 basis points for 1 year along with an extension of the maturity date 1 year to November 15, 2023 on both its credit facility and convertible notes.

"We are pleased with our second quarter results, especially our strong revenue growth and profitability. Our solid performance in the second quarter is a result of the initiatives we implemented pre-pandemic and the hard work of our team members, our restaurant partners and our drivers, as well as the trust that we have earned from our customers who have relied on us to deliver high-quality food throughout the pandemic," said Carl Grimstad, Chairman and CEO of Waitr.

"We continue to reinforce our presence in our most important markets by increasing delivery areas, adding grocery and alcohol delivery services, and expanding our customer service and dispatch teams," continued Grimstad. "All of these growth initiatives are being supported by a leaner cost structure with an eye on efficiencies and appropriate returns on deployed capital."

Since the onset of the pandemic, Waitr has been nimble in adapting its business. Waitr continues to actively work with our local communities, diners, restaurant partners, drivers and employees in joint efforts to mitigate risks and hardships arising from the ongoing COVID-19 pandemic. The Company has been working with new and existing restaurant partners to boost delivery potential and sustain their businesses in the current environment, and has provided restaurants with free marketing and promotional support, discounted delivery fees and other assistance. Waitr has also recently added a donation feature to its app, the proceeds from which go to charities to help feed those in need, including Feeding America.

"The continued demand for our services enables us to provide communities with employment opportunities for drivers. The increase in the number of drivers, in turn, expands capacity and improves service for our restaurant partners and diners," concluded Grimstad.

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

Second Quarter 2020 Financial Results

* Revenue for the second quarter of 2020 was $60.5 million, compared to $51.3 million in the second quarter of 2019, an increase of 18%.

* Operations and support expense decreased by $9.2 million, or 23%, to $30.5 million for the second quarter of 2020, compared to $39.7 million for the second quarter of 2019.

* Sales and marketing expense decreased by $12.6 million, or 82%, to $2.7 million for the second quarter of 2020, compared to $15.3 million for the second quarter of 2019.

* Research and development expense decreased to $1.2 million for the second quarter of 2020, in comparison to $2.1 million for the second quarter of 2019.

* General and administrative expense decreased by 18% to $10.1 million for the second quarter of 2020 from $12.4 million for the second quarter of 2019.

* Depreciation and amortization expense decreased to $2.1 million in the second quarter of 2020 from $4.8 million in the second quarter of 2019.

Second Quarter Key Business Metrics

* Average Daily Orders for the second quarter of 2020 were 44,241, an increase of 18% over first quarter 2020 average daily orders of 37,576.

* Active Diners as of June 30, 2020 were over 2 million.

Liquidity Update

As of June 30, 2020, the Company had cash on hand of $66.7 million, of which $3.2 million was reserved under a compensating balance arrangement with a bank. The Company had total long-term debt outstanding at June 30, 2020 of $109.5 million, consisting of $59.6 million of term loans, $49.6 million of convertible notes and $0.3 million of promissory notes. The term loans and convertible notes mature in November 2023. Short-term debt as of June 30, 2020 included $12.5 million for the current portion of the term loans and $2.1 million of short-term loans.

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.

Other Information

Waitr will not be hosting a conference call to discuss the second quarter 2020 operational and financial results.

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 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 June 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 June 30, 2020, which will be filed with the SEC on August 6, 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).

Waitr has thus far been able to operate effectively during the COVID-19 pandemic. However, the potential impacts and duration of the COVID-19 pandemic on the global economy and on the Company's business, in particular, may be difficult to assess or predict. The pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce the Company's ability to access capital and continue to operate effectively. The COVID-19 pandemic could also reduce the demand for the Company's services. In addition, a recession or further financial market correction resulting from the spread of COVID-19 could adversely affect demand for the Company's services. To the extent that the COVID-19 pandemic adversely impacts the Company's business, results of operations, liquidity or financial condition, it may also have the effect of heightening many of the other risks described in the risk factors in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

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 six months ended June 30, 2020 and 2019.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,

2020 2019 2020 2019

REVENUE $ 60,506 $ 51,342 $ 104,749 $ 99,374

COSTS AND EXPENSES:

Operations and 30,547 39,698 56,912 75,881 support

Sales and 2,740 15,339 5,566 25,662 marketing

Research and 1,167 2,149 2,637 4,089 development

General and 10,094 12,380 20,872 31,298 administrative

Depreciation and 2,075 4,824 4,139 8,940 amortization

Intangible andother asset 29 - 29 18 impairments

Loss on disposal 3 10 11 15 of assets

TOTAL COSTS AND 46,655 74,400 90,166 145,903 EXPENSES

INCOME (LOSS) 13,851 (23,058 ) 14,583 (46,529 )FROM OPERATIONS

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

Interest expense 2,490 2,190 5,404 3,795

Interest income (21 ) (241 ) (81 ) (580 )

Other expense 712 (123 ) 675 (173 )(income)

NET INCOME(LOSS) BEFORE 10,670 (24,884 ) 8,585 (49,571 )INCOME TAXES

Income tax 17 (32 ) 34 30 expense

NET INCOME $ 10,653 $ (24,852 ) $ 8,551 $ (49,601 )(LOSS)

INCOME (LOSS) PER SHARE:

Basic $ 0.11 $ (0.32 ) $ 0.10 $ (0.70 )

Diluted $ 0.10 $ (0.32 ) $ 0.09 $ (0.70 )

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

Weighted averagecommon shares 95,053,207 72,416,614 85,968,962 68,492,911 outstanding?-?basic

Weighted averagecommon shares 105,951,232 72,416,614 91,769,460 68,492,911 outstanding?-?diluted



CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

(Unaudited)

June 30, December 31,

2020 2019

ASSETS

CURRENT ASSETS

Cash $ 66,702 $ 29,317

Accounts receivable, net 6,121 3,272

Capitalized contract costs, current 546 199

Prepaid expenses and other current assets 5,506 8,329

TOTAL CURRENT ASSETS 78,875 41,117

Property and equipment, net 3,398 4,072

Capitalized contract costs, noncurrent 1,978 772

Goodwill 106,734 106,734

Intangible assets, net 23,941 25,761

Other noncurrent assets 454 517

TOTAL ASSETS $ 215,380 $ 178,973

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

CURRENT LIABILITIES

Current portion of long-term debt $ 12,500 $ -

Accounts payable 5,335 4,384

Restaurant food liability 5,528 5,612

Accrued payroll 5,020 5,285

Short-term loans 2,094 3,612

Deferred revenue, current 47 414

Income tax payable 85 51

Other current liabilities 13,923 12,630

TOTAL CURRENT LIABILITIES 44,532 31,988

Long-term debt 103,311 123,244

Accrued workers' compensation liability 346 463

Deferred revenue, noncurrent - 45

Other noncurrent liabilities 499 325

TOTAL LIABILITIES 148,688 156,065

STOCKHOLDERS' EQUITY:

Common stock, $0.0001 par value 10 8

Additional paid in capital 420,368 385,137

Accumulated deficit (353,686 ) (362,237 )

TOTAL STOCKHOLDERS' EQUITY 66,692 22,908

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 215,380 $ 178,973



CONSOLIDATED CASH FLOW STATEMENTS

(In thousands)

(Unaudited)

Six Months Ended June 30,

? 2020 2019

Cash flows from operating activities:

Net income (loss) $ 8,551 $ (49,601 )

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

Non-cash interest expense 4,453 1,079

Non-cash advertising expense - 310

Stock-based compensation 1,450 4,552

Equity issued in exchange for services - 60

Loss on disposal of assets 11 15

Depreciation and amortization 4,139 8,940

Intangible and other asset impairments 29 18

Amortization of capitalized contract costs 183 1,250

Other non-cash income (22 ) -

Changes in assets and liabilities:

Accounts receivable (2,849 ) (1,734 )

Capitalized contract costs (1,736 ) (2,346 )

Prepaid expenses and other current assets 2,823 (3,932 )

Accounts payable 951 (592 )

Restaurant food liability (84 ) 6,399

Deferred revenue (414 ) (151 )

Income tax payable 34 (25 )

Accrued payroll (265 ) 4,113

Accrued workers' compensation liability (117 ) (305 )

Other current liabilities 1,650 (2,441 )

Other noncurrent liabilities 174 40

Net cash provided by (used in) operating activities 18,961 (34,351 )

Cash flows from investing activities:

Purchases of property and equipment (381 ) (990 )

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

Other acquisitions (290 ) -

Collections on notes receivable 36 53

Internally developed software (1,335 ) (155 )

Proceeds from sale of property and equipment 7 23

Net cash used in investing activities (1,963 ) (193,637 )

Cash flows from financing activities:

Waitr shares redeemed for cash - (10 )

Proceeds from issuance of stock 22,944 50,002

Equity issuance costs (359 ) (4,175 )

Proceeds from Additional Term Loans - 42,080

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

Payments on short-term loans (3,415 ) (658 )

Proceeds from exercise of stock options 39 3

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

Net cash provided by financing activities 20,387 91,475

Net change in cash 37,385 (136,513 )

Cash, beginning of period 29,317 209,340

Cash, end of period $ 66,702 $ 72,827

Supplemental disclosures of cash flow information:

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

Cash earned during the period for interest 43 -

Cash paid during the period for interest 951 2,715

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 11,888 -

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

Non-cash gain on debt extinguishment - 1,897



NON-GAAP FINANCIAL MEASURE

ADJUSTED EBITDA

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended June June 30, 30,

2020 2019 2020 2019

NET INCOME (LOSS) $ 10,653 $ (24,852 ) $ 8,551 $ (49,601 )

Interest expense 2,490 2,190 5,404 3,795

Income taxes 17 (32 ) 34 30

Depreciation and 2,075 4,824 4,139 8,940 amortization

Stock-based compensation 602 2,549 1,450 4,612

Intangible and other asset 29 - 29 18 impairments

Business combination related - 7 - 6,956 expenditures

Costs associated with - 368 - 368 reduction in force

Restructuring expenses 850 - 850 -

ADJUSTED EBITDA $ 16,716 $ (14,946 ) $ 20,457 $ (24,882 )

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