Business Wire | Dec 21, 2021 04:05PM EST

Kidpik Reports Third Quarter 2021 Financial Results

Dec. 21, 2021

NEW YORK--(BUSINESS WIRE)--Dec. 21, 2021--Kidpik Corp. ("KIDPIK" or the "Company"), an online clothing subscription-based e-commerce company, today reported its financial results for its third quarter of 2021.

Quarter highlights:

* Revenue, net: increased 20.3% to $5,574,099 compared to $4,634,529 in the third quarter of 2020. * Subscription box revenue, net: was 85.1% of total revenue in Q3 2021 or $4,745,933, compared to $4,016,696 in Q3 2020. * Gross Margin: was 58.2% compared to 59.3% in the third quarter of 2020 * Shipped items: increased by 18.9% to 559,000 shipped items, compared to 470,000 shipped items in the third quarter of 2020 * Average shipments keep rate: was 68.8% compared to 68.2% in the third quarter of 2020 * Net Loss: was $1,189,356 or $(0.22) loss per share, compared to $978,251 or $(0.26) loss per share in the third quarter of 2020.

"We're pleased to report Q3 and nine-month net sales of $5.6 million and $16.6 million, an increase of 20.3% and 49.5% respectively, with nine-month subscription-based recurring revenue of $14.2 million or 85.5% of total revenue," said Ezra Dabah, CEO of Kidpik Corp. "Our performance was driven mainly by the introduction of boys' subscription boxes, the continued growth of our girls' subscriptions and the newly introduced toddler box collection."

"We are happy to have completed an upsized IPO of $18 million and to be listed on Nasdaq after the quarter end," continued Mr. Dabah. "Strengthening our balance sheet gives us the ability to make further investments in building our brand, growing our revenue, and driving shareholder value. We look forward to achieving our growth objectives by leveraging our merchandising expertise, the technology we have built, and the knowledge our team has gained over the last five years in the rapidly growing subscription industry."

Revenue by Subscription (Measured for 39 weeks ended October 2, 2021)

Active Subscriptions (recurring boxes): increased 55.7% to $11.5 million

New Subscriptions (first boxes): increased 14.9% to $2.7 million

Total Subscriptions increased 45.8% to $14.2 million or 85.5% of total revenue.

Balance Sheet and Cash Flow

* Cash and cash equivalents at the end of the third quarter totaled $204,877 compared to $133,484 million at January 2, 2021. After quarter end, Kidpik completed an IPO, issuing 2,117,647 shares of common stock at a public offering price of $8.50 per share, resulting in aggregate net proceeds of approximately $16.1 million. * Line of credit at the end of the third quarter totaled $3.2 million, compared to $2.5 million at the end of fiscal year 2020. In November 2021, the Company paid in full the outstanding line of credit amount. * Net cash used in operating activities increased to $5,637,368 for the 39 weeks ended October 2, 2021, compared to $2,385,563 of cash used in operating activities during the 39 weeks ended September 26, 2020.

Kidpik Corp.Condensed Interim Statements of Operations(Unaudited)

For the 13 weeks ended For the 39 weeks ended

October 2, September October 2, September 2021 26, 2021 26, 2020 2020

Revenues, net $ 5,574,099 $ 4,634,529 $ 16,562,579 $ 11,076,010



Cost of goods 2,327,335 1,884,898 6,659,012 4,553,832 sold



Gross profit 3,246,764 2,749,631 9,903,567 6,522,178



Operating expenses

Shipping and 1,451,065 1,047,097 4,543,341 2,693,062 handling

Payroll and 1,023,241 753,222 2,953,993 2,045,415 related costs

General and 2,169,283 1,790,401 6,318,183 4,301,533 administrative

Depreciationand 5,226 13,770 21,355 58,063 amortization

Totaloperating 4,648,815 3,604,490 13,836,872 9,098,073 expenses

Operating loss (1,402,051 ) (854,859 ) (3,933,305 ) (2,575,895 )

Other (income) expenses

Interest 229,657 122,567 584,466 308,153 expense

Other (income) (442,352 ) - (429,045 ) 10,000 /expense

Total other(income) (212,695 ) 122,567 155,421 318,153 expenses



Loss beforeprovision for (1,189,356 ) (977,426 ) (4,088,726 ) (2,894,048 )income taxes



Provision for 825 1,332 1,122 income taxes



Net loss $ (1,189,356 ) $ (978,251 ) $ (4,090,058 ) $ (2,895,170 )



Net loss pershareattributable to commonstockholders:

Basic $ (0.22 ) $ (0.26 ) $ (0.77 ) $ (0.78 )

Diluted $ (0.22 ) $ (0.26 ) $ (0.77 ) $ (0.78 )



Weightedaverage common sharesoutstanding:

Basic 5,500,187 3,735,457 5,300,308 3,735,457

Diluted 5,500,187 3,735,457 5,300,308 3,735,457

Kidpik Corp. Condensed Interim Balance Sheets

October 2, 2021(Unaudited)

January 2, 2021

Assets

Current assets

Cash

$

204,877

$

133,484

Restricted cash

149,268

551,812

Accounts receivable

373,071

320,446

Inventory

8,604,004

7,480,072

Prepaid expenses and other current assets

1,115,264

822,580

Total current assets

10,446,484

9,308,394

Leasehold improvements and equipment, net

7,133

27,874

Intangible assets, net

614

Total assets

$

10,453,617

$

9,336,882

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

2,837,075

$

2,960,687

Due to related party

1,219,038

599,811

Accrued expenses and other current liabilities

507,985

690,049

Advance payable

1,196,742

829,030

Loan payable, current portion

91,429

Short-term debt, related party

1,300,000

-

Line of credit

3,200,000

2,032,118

Total current liabilities

10,260,840

7,203,124

Loan payable, less current portion

350,923

Total liabilities

10,260,840

7,554,047

Commitments and contingencies

Stockholders' equity

Preferred stock (par value $0.001, 25,000,000 shares authorized, of which no shares are issued and outstanding as of October 2, 2021 and January 2, 2021)

-

-

Common stock (par value $0.001, 75,000,000 shares authorized, of which 5,500,187 and 5,075,444 shares are issued and outstanding as of October 2, 2021 and January 2, 2021)

5,500

5,075

Additional paid-in capital

32,248,972

29,749,397

Accumulated stockholders' deficit

(32,061,695

)

(27,971,637

)

Total stockholders' equity

192,777

1,782,835

Total liabilities and stockholders' equity

$

10,453,617

$

9,336,882

Kidpik Corp.Condensed Interim Balance Sheets

October 2, January 2, 2021 2021 (Unaudited)

Assets

Current assets

Cash $ 204,877 $ 133,484

Restricted cash 149,268 551,812

Accounts receivable 373,071 320,446

Inventory 8,604,004 7,480,072

Prepaid expenses and other current assets 1,115,264 822,580

Total current assets 10,446,484 9,308,394



Leasehold improvements and equipment, net 7,133 27,874

Intangible assets, net 614

Total assets $ 10,453,617 $ 9,336,882



Liabilities and Stockholders' Equity



Current liabilities

Accounts payable $ 2,837,075 $ 2,960,687

Due to related party 1,219,038 599,811

Accrued expenses and other current 507,985 690,049 liabilities

Advance payable 1,196,742 829,030

Loan payable, current portion 91,429

Short-term debt, related party 1,300,000 -

Line of credit 3,200,000 2,032,118

Total current liabilities 10,260,840 7,203,124



Loan payable, less current portion 350,923



Total liabilities 10,260,840 7,554,047



Commitments and contingencies



Stockholders' equity

Preferred stock (par value $0.001,25,000,000 shares authorized, of which no - - shares are issued and outstanding as ofOctober 2, 2021 and January 2, 2021)

Common stock (par value $0.001, 75,000,000shares authorized, of which 5,500,187 and 5,500 5,075 5,075,444 shares are issued and outstandingas of October 2, 2021 and January 2, 2021)

Additional paid-in capital 32,248,972 29,749,397

Accumulated stockholders' deficit (32,061,695 ) (27,971,637 )

Total stockholders' equity 192,777 1,782,835

Total liabilities and stockholders' equity $ 10,453,617 $ 9,336,882

Kidpik Corp. Condensed Interim Statements of Cash Flows (Unaudited)

For the 39 weeks ended

October 2, 2021

September 26, 2020

Cash flows from operating activities

Net loss

$

(4,090,058

)

$

(2,895,170

)

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

Depreciation and amortization

21,355

58,062

Amortization of debt issuance costs

29,377

20,955

Forgiveness of loan payable

(442,352)

-

Bad debt expense

614,239

348,236

Changes in operating assets and liabilities:

Accounts receivable

(666,864

)

(320,236

)

Inventory

(1,123,932

)

(482,361

)

Prepaid expenses and other current assets

(292,684

)

(116,957

)

Accounts payable

(123,612

)

660,541

Accounts payable, related parties

619,227

309,747

Accrued expenses and other current liabilities

(182,064

)

31,620

Net cash used in operating activities

(5,637,368

)

(2,385,563

)

Cash flows from investing activities

Purchases of leasehold improvements and equipment

-

(7,683

)

Net cash used in investing activities

-

(7,683

)

Cash flows from financing activities

Proceeds from issuance of long-term debt from related party

2,000,000

1,000,000

Proceeds from issuance of common stock

500,000

-

Net proceeds (repayments) from line of credit

1,138,505

(63,365

)

Net proceeds (repayments) from advance payable

367,712

(274,374

)

Proceeds from loan payable

-

442,352

Proceeds from loan payable related party

1,300,000

810,000

Net cash provided by financing activities

5,306,217

1,914,613

Net decrease in cash and restricted cash

(331,151

)

(478,633

)

Cash and restricted cash, beginning of period

685,296

631,320

Cash and restricted cash, end of period

$

354,145

$

152,687

Reconciliation of cash and restricted cash:

Cash

$

204,877

$

99,297

Restricted cash

149,268

53,390

$

354,145

$

152,687

Supplemental disclosure of cash flow data:

Interest paid

$

500,905

$

291,056

Taxes paid

$

1,332

$

297

Supplemental disclosure of noncash financing activities:

Conversion of shareholder debt

$

2,000,000

$

-

Revenue, net

The Company's revenue, net is disaggregated based on the following categories:

Kidpik Corp.Condensed Interim Statements of Cash Flows(Unaudited)

For the 39 weeks ended

October 2, September 2021 26, 2020

Cash flows from operating activities



Net loss $ (4,090,058 ) $ (2,895,170 )

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

Depreciation and amortization 21,355 58,062

Amortization of debt issuance costs 29,377 20,955

Forgiveness of loan payable (442,352) -

Bad debt expense 614,239 348,236

Changes in operating assets and liabilities:

Accounts receivable (666,864 ) (320,236 )

Inventory (1,123,932 ) (482,361 )

Prepaid expenses and other current assets (292,684 ) (116,957 )

Accounts payable (123,612 ) 660,541

Accounts payable, related parties 619,227 309,747

Accrued expenses and other current liabilities (182,064 ) 31,620

Net cash used in operating activities (5,637,368 ) (2,385,563 )



Cash flows from investing activities

Purchases of leasehold improvements and - (7,683 )equipment

Net cash used in investing activities - (7,683 )



Cash flows from financing activities

Proceeds from issuance of long-term debt from 2,000,000 1,000,000 related party

Proceeds from issuance of common stock 500,000 -

Net proceeds (repayments) from line of credit 1,138,505 (63,365 )

Net proceeds (repayments) from advance payable 367,712 (274,374 )

Proceeds from loan payable - 442,352

Proceeds from loan payable related party 1,300,000 810,000

Net cash provided by financing activities 5,306,217 1,914,613

Net decrease in cash and restricted cash (331,151 ) (478,633 )



Cash and restricted cash, beginning of period 685,296 631,320

Cash and restricted cash, end of period $ 354,145 $ 152,687



Reconciliation of cash and restricted cash:

Cash $ 204,877 $ 99,297

Restricted cash 149,268 53,390

$ 354,145 $ 152,687

Supplemental disclosure of cash flow data:

Interest paid $ 500,905 $ 291,056

Taxes paid $ 1,332 $ 297

Supplemental disclosure of noncash financing activities:

Conversion of shareholder debt $ 2,000,000 $ -

Revenue, net

The Company's revenue, net is disaggregated based on the following categories:

For the 13 weeks ended For the 39 weeks ended

October 2, September 26, October 2, September 26, 2021 2020 2021 2020

Subscription $ 4,745,933 4,016,696 $ 14,163,217 $ 9,712,382boxes

Amazon sales 568,947 485,599 1,893,814 1,064,678

Online 259,219 132,234 505,548 298,950website sales

Total revenue $ 5,574,099 $ 4,634,529 $ 16,562,579 $ 11,076,010

Gross Margin

Gross profit is equal to our net sales (revenues, net) less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight in, defective merchandise returned from customers, receiving costs, inventory write-offs, and other miscellaneous shrinkage.

For the 13 weeks ended For the 39 weeks ended

October 2, September 26, October 2, September 26, 2021 2020 2021 2020



Gross margin 58.2 % 59.3 % 59.8 % 58.9 %

Shipped Items

We define shipped items as the total number of items shipped in a given period to our customers through our active subscription, Amazon and online website sales.

For the 13 weeks ended For the 39 weeks ended

(In thousands) (In thousands)

October 2, September 26, October 2, September 26, 2021 2020 2021 2020



Shipped 559 470 1,680 1,139 Items

Average Shipment Keep Rate

Average shipment keep rate is calculated as the total number of items kept by our customers divided by total number of shipped items in a given period.

For the 13 weeks ended For the 39 weeks ended

October September October September 2, 2021 26, 2020 2, 2021 26, 2020



Average Shipment Keep 68.8 % 68.2 % 68.5 % 67.0 %Rate

Revenue by Channel

13 weeks 13 weeks ended ended September 26, Change Change October 2, 2020 ($) (%) 2021

Revenue by channel

Subscription $ 4,745,933 4,016,696 729,237 18.2 %boxes

Amazon sales 568,947 485,599 83,348 17.2 %

Online website 259,219 132,234 126,985 96.0 %sales

Total revenue $ 5,574,099 $ 4,634,529 $ 939,570 20.3 %

39 weeks ended October 2, 2021

39 weeks ended September 26, 2020

Change ($)

Change (%)

Revenue by channel

Subscription boxes

$

14,163,217

$

9,712,382

$

4,450,835

45.8

%

Amazon sales

1,893,814

1,064,678

829,136

77.9

%

Online website sales

505,548

298,950

206,598

69.1

%

Total revenue

$

16,562,579

$

11,076,010

$

5,486,569

49.5

%

Subscription Boxes Revenue

39 weeks 39 weeks ended ended September 26, Change ($) Change October 2, 2020 (%) 2021

Revenue by channel

Subscription $ 14,163,217 $ 9,712,382 $ 4,450,835 45.8 %boxes

Amazon sales 1,893,814 1,064,678 829,136 77.9 %

Online website 505,548 298,950 206,598 69.1 %sales

Total revenue $ 16,562,579 $ 11,076,010 $ 5,486,569 49.5 %

Subscription Boxes Revenue

39 weeks 39 weeks ended ended Change ($) Change October 2, September (%) 2021 26, 2020

Subscription boxes revenue from

Activesubscriptions - $ 11,474,502 $ 7,371,851 $ 4,102,652 55.7 %recurring boxes

New subscriptions - 2,688,715 2,340,531 348,183 14.9 %first box

Total Subscription $ 14,163,217 $ 9,712,382 $ 4,450,835 45.8 %boxes revenue

Revenue by Product Line

13 weeks 13 weeks ended ended September 26, Change Change October 2, 2020 ($) (%) 2021

Revenue by product line

Girls' apparel $ 4,189,538 $ 3,941,463 $ 248,075 6.3 %

Boys' apparel 1,111,509 693,066 418,443 60.4 %

Toddlers' apparel 273,052 - 273,052 n/a %

Total revenue $ 5,574,099 $ 4,634,529 $ 939,570 20.3 %

39 weeks ended October 2, 2021

39 weeks ended September 26, 2020

Change ($)

Change (%)

Revenue by product line

Girls' apparel

$

12,647,081

$

10,374,374

$

2,272,707

21.9

%

Boys' apparel

3,341,419

701,636

2,639,783

376.2

%

Toddlers' apparel

574,079

-

574,079

n/a

%

Total revenue

$

16,562,579

$

11,076,010

$

5,486,569

49.5

%

Earnings Call Information:

Today at 4:30pm ET a live webcast will be accessible at the following link on the investor relations section of the KIDPIK website at https://investor.kidpik.com. Analysts and investors may also call in by dialing (877)-545-0320 or (973)-528-0002 for international callers, conference ID 315694.

A replay of the conference call will be available approximately two hours after the conclusion of the call on the investor relations section of the KIDPIK website at https://investor.kidpik.com or by dialing (877)-481-4010 or (919)-882-2331 for international callers, conference ID 43975. The replay will be available until December 28, 2021.

About Kidpik Corp. Founded in 2016, KIDPIK (NASDAQ:PIK) is an online clothing subscription box for kids, offering mix-&-match, expertly styled outfits that are curated based on each member's style preferences. KIDPIK delivers a surprise box monthly or seasonally, providing an effortless shopping experience for parents and a fun discovery for kids. Each seasonal collection is designed in-house by a team with decades of experience designing childrenswear. KIDPIK combines the expertise of fashion stylists with proprietary data and technology to translate kids' unique style preferences into surprise boxes of curated outfits. We also sell our branded clothing and footwear through our e-commerce website, shop.kidpik.com. For more information, visit www.kidpik.com.

Forward-Looking Statements This press release contains statements that constitute "forward-looking statements." The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to the Company on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the "Risk Factors" section of the Company's Registration Statement and preliminary prospectus for the offering filed with the SEC. Thus, actual results could be materially different. The Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211221005708/en/

CONTACT: Investor Relations Contact: James Carbonara ir@kidpik.com

CONTACT: Media: press@kidpik.com