Q2 2022 Waitr Holdings Inc Earnings Call

Good afternoon, everyone I would like to welcome all of you to the later Holdings, Inc. Second quarter 2022 conference call with.

With us today are wages, Chief Executive Officer, Paul <unk>, and Chief Financial Officer Aman, Yeah, Kazarian's by now you should have access to the company's earnings press release, if not it may be found at SEC G O V, albeit investor Relations website.

Investors totally to wrap the call.

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. They.

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.

Finally, please note that on todays call management may refer to non G. A a P financial measures.

Please refer to right. This second quarter 2022 earnings release for a full recalculation of its non G. A a range of measures to the most.

This comparable G a a b financial measures.

I would like to now turn the call over to Ray does C. O call groups that who will give an overview of the company's business activities and developments for the second quarter of 2022. He will then turn the call over to Aman, Yeah, Kazarian's, who 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 second quarter 2022 earnings call.

In July 2022, we entered into agreements to begin delivering from retailers in industries, such as apparel luxury sporting goods alcohol auto parts electrical products and more this is in line with our vision to deliver anything asap to consumers.

Same day from any type of business.

We also believe these agreements with third parties like Berke any lead extra will start making an impact to order volume in late third quarter and into the fourth quarter of 2022.

We added 711 in mid June 2022, with the addition of 711 locations to our platform. This created a new level of convenience for our customers. We are looking forward to working to ensure our customers' past and present.

We're aware that they now can order these items with him, which historically they could not.

In addition to expanding the variety of items, we deliver we also entered into a multiyear sponsorship agreement partnering with the New York Giants, and New York Jets, and Metlife Stadium as the exclusive mobile ordering platform at Metlife Stadium.

Fans can use the asap platform to place mobile orders at all Giants and Jets home games with our platform integrated into each team's app for a seamless mobile ordering experience.

From concession stands throughout Metlife Stadium.

For other events Asap.

Mobile ordering will be done directly through our proprietary Asap stadium ordering application.

Our stadium ordering application technology is currently active at the University of Alabama, Louisiana State University, and the New Orleans, St Super job.

We have plans to add new venues across the nation overtime, we will use our stadium technology and partnerships to enter new markets for both last mile delivery and payment processing solutions for merchants of all types.

July 2022 also marked the start of our official transition to rebrand and change the name of the company to Asap.

We are shifting shifting to one platform, which once completed should provide additional cost and resource savings.

Moreover, the shift to <unk>.

One platform and application should allow for a further focus on various feature enhancements and streamlining of service levels.

We continue to provide our instant pay technology built for independent contractor drivers and intend to commercialize the rollout of this technology to restaurant partners and potentially to all other verticals.

Additionally, we are pleased with our progress in facilitating merchants with access to third party payment providers and expect this business to continue to see growth in the future.

During the second quarter of 2022, we negotiated the pay down of approximately $21 million of debt, while extending the debt maturity to may 15 2024.

In July 2022, we entered into an agreement with the lenders of our convertible notes pursuant to which they converted approximately $6 $8 million of the notes and currently now beneficially own approximately 16.3% of the company's common.

In addition to their beneficial ownership in underlying warrants.

This convert conversion reinforces their commitment to the company's management team and future strategy.

Outstanding long term debt as of August eight 2022 totaled approximately $57 million.

Compared to 84 million $84 5 million at December 31, 2021.

With this most recent conversion that has this decreased by over $70 million or approximately 56% since January one 2020.

I am proud of our team and the foundation, we are building for the long term future of the company.

Our broader view towards our business strategy with respect to our industry should allow the company to grow profitably in the future.

We believe the company will be close to adjusted EBITDA positive.

The end of the third quarter, assuming stable order volume and taking out the cost of the regret.

Our focus is to be able to deliver a diverse set of products from any vendor. We also believe that we can become the preferred payment provider to any vendor.

This along with our best in class proprietary stadium technology should help us strategically expand our operations.

There is still work to be done at enhancing all of our systems implementing our rebrand and the migration to one application, but our team is making great strides.

I believe we were on the right path. However from a capital structure perspective, there is still work to be done.

This is why we will be having a new shareholder vote in the fall of 2022 in <unk>.

Order to effectuate, a reverse stock split resulting in continued compliance.

NASDAQ listing requirements the importance of which is to maintain the company's financial flexibility and the opportunity to further grow the business through future acquisitions.

Now I will turn over to arm and our Chief financial Officer for a recap of the second quarter results.

Thank you Carl I would like to now review, our second quarter 2022 financial results revenue for our second quarter of 2022 was $31 2 million compared to $49 2 million in the second quarter of 2021 for the six months ended June 32020 to revenue was $66.

$2 million compared to $100 1 million for the six months ended June 32021.

In addition to macro economic factors affecting order volumes lack of stimulus payments in the first quarter of 2022. Unlike those distributed in the late first quarter of 2021 also contributed to the decline in revenue for the six months ended June 32022 compared to the six months ended June 32021.

Adjusted EBITDA for the second quarter of 'twenty, two 2022 with a net loss of $3 6 million compared to adjusted EBITDA of $2 5 million in the second quarter of 2021, approximately $1 million of the second quarter 2022 loss is from an increase to the IV in our insurance reserves.

Net loss for second quarter, 2022 was 11 7 million or seven cents per share compared to a net loss of $5 6 million or five cents per share.

In the second quarter of 2021 cash on hand totaled $28 2 million as of June 32022.

That concludes the recap of our second quarter 2022 financial results.

We will now go into a short Q&A session.

Thank you Les.

Ladies and gentlemen, if you would like to ask a question at this time. Please press star followed by the number one on a telephone keypad, if you're calling from a speaker phone. Please make sure. Your mute function is the adult to ensure your signal can wait till like Whitman again star one to ask a question.

We'll now take a question from Dan partners of the benchmark company.

Your line is open. Please go ahead.

Great. Thanks, Good afternoon, Carl there's actually a decent amount to talk about here.

But just first.

Let's just get the sort of perfunctory at a high level view out of the way.

Obviously, you guys have been managing uneven order volumes.

Throughout this downturn.

Travel.

<unk> the environment.

CRO backdrop just.

How are you.

How are you seeing order volumes on a go forward basis do you think that youre, starting to see sort of a stabilization level and obviously youre continues to rise with food inflation I don't know how sustainable that is over the long term, but it feels like it's going to remain elevated in the short term. So can you just talk about those factors firstly.

Thanks, Dan.

You you hit the nail on the head the order volume at this stage.

We further diversified the business with payments revenue and what have you is the number one driver to the P&L.

We are in a softer period.

I am <unk>.

Thinking that as we go through back to school and into the fall, which orders tend to pick up that we will continue to see.

The trends that we've seen in past years.

But.

This is specifically why I think that the business needs to further diversify itself into more than.

Just prepared food delivery.

But.

As you heard in my comments I do think.

That given the trends currently that by the end of the third quarter backing out.

The sort of one time costs of the rebrand.

That will start to.

Be breakeven EBITDA, if not slightly positive in the fourth quarter.

Got it Thats helpful.

Maybe we'll start there then just on the rebrand.

Sort of the puts and takes one.

How does sort of handicap, the rebrand cost, which are obviously one time in nature.

But alternatively.

As you mentioned in your prepared remarks, giving you an opportunity to.

<unk> and unify the platform we know historically that there were two brands running in tandem.

And I'm sure, there's a bunch of backend stuff that you've been working to unify how do we think about sort of the longer tailed cost savings that could come from streamlining of the services.

Yeah.

Not to quantify at this point, but very definitely as you describe it it actually we had more than two platforms.

And you know a lot of duplicative effort not to mention.

Very difficult to allocate resources on moving three different platforms.

Forward.

So.

Hopefully when this project is complete we'll be able to reevaluate.

Our cost structure across the board not only on the developmental side, but also on the service side I think that's a super positive thing.

And coinciding with what we're going to be doing in the Tri state area, which I.

Hopeful will be a driver of.

Positive order growth in the upcoming quarters, we're super excited about the exposure that we are going to receive.

Through the winning of this.

Our relationship with both the Giants suggests and Metlife.

You have.

70, 80000 people looking at your application that we can access every time there isn't.

A game or a concert or or or whatnot. It's.

It is a great entre into.

Arguably the biggest consumer market in the world being the Tri State area.

Yeah.

A little bit of leading the witness Carl right.

Clearly going to ask about that as a big win for you guys.

It's fascinating right because there are multiple heavyweights in the space and here you are coming out on top I'm just curious on the process.

Either you're willing to talk about the economics or payback period, or how we should think about.

The benefit from that and obviously to your point you now have.

And entry into.

In New York, which theoretically could spread whereas you did not really have a footprint there before so not to get ahead of ourselves here, but just any kind of knock on effects as we think about market expansion from benefiting yes that one.

You know, how we're looking at it and.

I expect to see a number of these things are in our future. We see it as you know Greg the the in stadium technology that we developed in house is best of breed.

We won this piece of business I have to say because our team got out there.

And didn't nail it in right and we had a functioning system at multiple other venues.

And we took the approach that we're there to help them sell more product.

It's a hot dog, a beer or a T shirt.

So I think that in in sports.

Rina venue technology in that business is great, but it's a multifaceted strategy of how to expand our brand from a national perspective, and since announcing that just the inbounds that we've gotten.

With nationwide players, meaning not just.

Foodservice operators, but brands beer brands.

Food brands, because now they don't think of US just as the regional companies. They think that the exposure is is goes much beyond just a certain.

Second or third tier city that we might be it so I see it as an entre into all of those merchants in the Tri State area. In this case not only to provide our delivery services, but our merchant processing solutions also you walk in there almost with the staff.

Will the approval and it's all about empowering my salesperson to have basically a folder of AV services that he can provide value base to that merchant.

So I think that Youll see us do more of this in other.

Higher quote unquote higher volume markets, where.

There's we don't have to be the leader in the market, but if we could scrape off some orders here and there and have exposure to a greater level of consumer it'll bode well for everything that we're doing.

And just to that last point, Karl just a wrap up maybe an update on how.

Payment penetration is going for you growth there and.

So what you just said it sounds like you have a plan to further commercialize more tac and sort of grow the SaaS portfolio and I know it's still early.

Relatively small percentage, but.

Over the next I don't know if three plus years, how do we think about.

Sort of.

Traditional baseline versus SaaS offering.

Yeah, I mean, obviously, it's not quite big enough to break out individually just yet Dan, but I've always seen this business as an integrated payments company that also offers last mile delivery.

So I think our future is.

As in our financials is looking more like a financial technology company that also does.

Last mile delivery.

I listened to our big competitors that talk about the community or what have you, we're kind of saying the same things slightly different though.

Maybe instead of going at it just from the consumer side I like to go at it from the merchant side.

Consumers are tricky.

Merchants are a little bit more consistent in their decision, making so I think we're we're coming at it in a similar manner I don't see us as the Super App, but we may be quote unquote the application for merchants.

Two to offer what they need to offer to their consumers and stay competitive overtime.

And that's it.

Alexia.

Simple things, but when packaged together in a in a in a value proposition with great technology and service I think it can be a winner.

Last mile deliveries here to stay.

Payment solutions are here to stay.

And I think the business is going to morph more and more over time into a financial technology company that also does delivery.

Got it thanks for sticking with me Carl Super helpful. Appreciate it.

Thank you.

Thank you we have no more questions I'd like to turn the conference back to Karl for closing remarks.

Well. Thank you again to everyone that attended our call.

Please have a nice evening and we'll talk to you again next quarter.

Thank you for joining US today. This concludes teleconference. You may now disconnect.

Okay.

[music].

Yeah.

Okay.

Okay.

Okay.

Okay.

[music].

Yeah.

[music].

Yes.

[music].