Q4 2021 Waitr Holdings Inc Earnings Call

Good afternoon, everyone.

I would like to welcome all of you to the waiter holdings incorporated fourth quarter 2021 conference call.

Today's conference is being recorded.

Today, our waiters, Chief Executive Officer, Carl Grinstead, and Chief Financial Officer Leo Bogdanov.

By now you should have access to the company's earnings press release, if not it may be found that SEC G O V or their Investor Relations website at investors got waiter App Dot com.

Before I turn the call over to management I would like to remind you that certain statements and projections.

In this call about future business and financial results constitute forward looking statements. These statements are based on management's current business and market expectations and actual results could differ materially from those projected in the forward looking statements.

Please see the risk factors contained in the company's annual report on Form 10-K for a discussion of risks that may cause actual results to vary from these forward looking statements.

Please note that on todays call management may refer to non-GAAP financial measures. Please refer to waiters fourth quarter 2021 earnings release for a full reconciliation.

Of its non-GAAP financial measures to the most comparable GAAP financial measures.

I would like to now turn the call over to waitresses CEO Cobra, instead, who will give an overview of the company's business activities and developments for the fourth quarter of 2021 it will be.

Then turn the call over to Leo.

Uh huh.

We will provide an overview of the company's operating and financial results.

We will then open the call for Q&A call.

Thank you.

Hello, everyone and welcome to the fourth quarter 2021 earnings call.

During 2021, we delivered over $540 million.

Food sales for our restaurant and business partners.

Over 100000 independent contract drivers, resulting in payments to the independent contract drivers of over $104 million. We started our payment strategy in late 2021 and.

And are now facilitating access to third parties that are providing payment processing services for approximately 1900 merchants with an annualized volume of them.

Approximately $900 million in the fourth quarter of 2021, we continue to methodically deploy our capital in various initiatives in order to position the company for long term growth.

These include investments in our technology platform with new product offerings expansion of our complement.

On the dairy businesses in solidifying key partnership opportunities within our industry. Additionally, we continued investing in product and engineering personnel, including key additions to our technology management.

Team in early 2022, we should benefit from this as we plan to move into multiple delivery verticals and expand our payments capabilities.

Our investments in 2021 also included the acquisition of businesses that offer access to third party payment processing solution providers.

These acquisitions were important steps in pursuing our overall growth strategy of facilitating access to a full suite of third party payment processing solution services to our current base of restaurants in future.

Other future emergence these services along with the existing logistics network will provide value added and competitively priced payment solutions to our restaurant ecosystem as well as an expanding merchant base beyond the restaurant industry.

Additionally, we solidified key partnerships with integrated Commerce technology, such as a low dispatch and the continued build out of our Google.

Food ordering capabilities.

We believe these integrations will provide a vehicle to generate additional order flow by opening the doors to a wider consumer base within our markets.

While 2021 presented challenges, including impacts from the ongoing pandemic and hurricanes in our core southern markets.

The recent macroeconomic headwinds such as inflation and rising gas prices present more challenges that we are currently navigating.

We continue to focus our efforts on our core delivery markets enhancing our technology platforms, and providing quality service to our restaurant partners and diners.

On December 17th 2021, the company announced that it entered into a nonbinding letter of intent to acquire retail innovation labs incorporated which does business as Cobra.

The parties mutually agreed on March 10, 2022 that they know they are no longer pursuing a business Compton combination is contemplated in the letter of intent, but continue to discuss a potential business relationships involving facilitating cobra customer access to third parties that provide payment.

Processing solutions the.

The company believes that such an arrangement can be mutually beneficial and will allow both parties to continue to execute their respective business strategies without affecting our business combination.

As previously announced we have acquired the Asap Dot com domain name as well as several related domain names in connection with our rebranding strategy. We expect Asap will serve as the foundation of our brand moving forward as we believe it better embodies the future direction of our <unk>.

Company.

We are excited to show.

The public what 2022 has to offer as we continue to diversify the company and help grow our constituent base of merchants consumers and independent contract drivers, we continually strive to build on and monetize this ever expanding ecosystem by providing other value added third.

<unk> services to this core base with that I will turn it over to Leo our Chief Financial Officer for a recap of the fourth quarter results.

Thank you Carl Let's now review, our fourth quarter and annual 2021 financial results.

Revenue for the fourth quarter of 2021 was $38 6 million compared to $46 8 million in the fourth quarter of 2020.

Revenue in the fourth quarter of 2021 decreased approximately 11% from revenues of $43 4 million for the third quarter of 2021.

Which is consistent with the decline from third to fourth quarter of 2020.

For the year ended December 31, 2021 revenue was $182 2 million compared to $204 3 million for the year ended December 31 2020.

Adjusted EBITDA for the fourth quarter of 2021 was a $1 7 million compared to $9 9 million in the fourth quarter of 2020.

Adjusted EBITDA for the year ended December 31, 2021 was $15 6 million compared to $43 4 million for the year ended December 31 2020.

Net loss per share for the fourth quarter of 2021 was six <unk> compared to net income per share of <unk> <unk> in the fourth quarter 2020.

Net loss for the year ended December 31, 2021 was $5 2 million or <unk> <unk> per share compared to net income of $15 8 million or <unk> 15 per share for the year ended December 31 2020.

Cash on hand totaled $60 1 million as of December 31, 2021 total outstanding long term debt at December 31, 2021 was $84 5 million consisted primarily of our $35 million of term loans and $49 5 million of convertible notes.

That concludes the recap of our fourth quarter and annual 2021 financial results. We will now go to a short Q&A session.

Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to ask a question, we'll pause just a moment to allow everyone an opportunity to signal for questions.

Okay.

We will take our first question from Dan Carnose, that's the benchmark company.

Great. Thanks, Good evening, Karl just talk a little bit about.

Obviously, we had issues with COVID-19 lapping them sticky.

Louis going away clearly in a rising inflation you brought that up but on the other hands you signed a number of online ordering deals you have the opportunity to show kind of vertical expansion here. So if you can kind of.

Balance those two just as we get into 2022, just how you think the puts and takes evolved this year as you look at kind of total revenue for the year.

Yeah, we're just really getting started with Google food ordering.

So we were up against the deadline with their shut off.

Think it's March 15th I think we've got.

The necessary things done that had to occur.

It's hard for me to project.

What the impact will be from an order flow perspective, but I definitely think it will be meaningful.

You you brought up the macro factors the biggest issue that we're dealing with on a daily basis right now is gas prices and the impact on our independent contract drivers.

Not to mention.

If you just think about our overall constituent group.

We're in the second and third tier markets.

People are challenged with the rising cost of of everything.

Food being one of them fuel so our diners are looking for a less expensive alternatives our drivers are being impacted by rising.

Rising costs, mostly in the form of fuel costs are independent restaurants struggle with.

The labor force as well as the fact that generally speaking as you know it is it is less expensive to go the <unk> route for a family to see to have dinner than it is an independent restaurants. So I think they are.

Across the board, we have a number of headwinds that we're dealing with.

From a macro perspective, right now that are challenging.

Got it that's helpful. And then just the side on contribution from payments. Both this year and next year as you guys get more into that side of the equation and then maybe if you wanted to transition that into your own sort of transition I did ask about vertical.

<unk>, obviously, Canada is still on the horizon, but just kind of where we are as you look to sort of transform the business.

Yeah.

The payment side is is getting in in full swing.

I think.

Last month alone, we signed over 200, new merchant accounts.

I expect.

I'd be I'd be disappointed if we weren't on a run rate by the end of this year to be between 701000, new accounts a month.

And Thats beyond just our restaurant base, that's merchants of all types.

That current the number that I threw out.

Is just a current run rate of the 1900 merchants, we have signed thus far.

On the verticals, we're definitely moving into direction, Dan of deliver deliver anything and everything.

The we continue to be.

Very focused on the cannabis vertical.

Well, we're we love the guys. It Cobra, we continued to work towards.

Our relationship there that's that's going to work for both of us and the low hanging fruit.

In the beginning of that we'll be offering payment services to their installed base.

Throughout Canada and the U S.

And just lastly for me Carl one thing that you did very well when you first came on was obviously take a business that was challenged.

Bring back sort of the EBITDA, you've been doing some investing and now we've got sort of a business transition, but you've been keeping EBITDA was still positive given the headwinds on sort of cost gas, but maybe higher margins payments and some of the other things that are going on.

How do we think about sort of your ability to maintain adjusted EBITDA.

Plus or minus over the next let's call it 12 to 24 months.

I feel very confident that this is a positive cash flow business irrespective of the challenges.

We started to see.

The headwinds.

Really mid summer and we're constantly trying to rightsize the workforce for what looks to be the new or the new new order flow level.

So I think.

Good bad or indifferent, where constant we're very focused on cash flow positive Dan as you know so it's really a function of making sure that we keep our costs in line for the current size of the order flow and then scale it appropriately as time goes on.

Got it thanks Carl.

Thank you Dan.

And as a reminder, you May press star one on your telephone keypad. If you have a question at this time.

We'll pause for a moment.

And that does conclude today's question and answer session I would now like to turn the call back over to Carl Graham said.

For any additional or closing comments.

Thank you thanks, everyone for attending our call today. Please have a great weekend and we'll see you next quarter. Thank you.

And again that does conclude the call we would like to thank you for your participation you may now disconnect.

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Yeah.

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