Q3 2022 Waitr Holdings Inc Earnings Call
Please standby.
Good day I would like to welcome all of you to the Waiter Holdings, Inc. Third quarter 2022 conference call today's call is being recorded.
With us today are waiters, Chief Executive Officer, Carl Grimm starred and Chief Financial Officer, Armen Jaeger variance by now you should have access to the company's earnings press release, if not it may be found at S. P C dot gov or their investor relations website at investors Dot waiter.
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Before I turn the call over to management I would like to remind you that certain statements and projections in this call about future businesses 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, and quarterly reports on Form 10-Q 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-GAAP financial measures. Please refer to waiters third quarter.
2022 earnings release for a full reconciliation of its non-GAAP financial measures to the most comparable GAAP financial measures I would now like to turn the call over to waiters CEO , Carl Grimstad, who will give an overview of the company's business activities and developments for the third quarter of 2022. He will then turn the call.
Over to Armen, Yeah go say variance, who will provide an overview of the company's operating and financial results. Please go ahead.
Thank you Hello, everyone and welcome to the third quarter 2022 earnings call.
In August 2020.
Our rebranding initiative and introduced our new deliver anything Asap business model, expanding our food delivery services to a broad array of products.
We're now delivering from retailers in industries, such as apparel luxury sporting good alcohol auto parts electrical products and more.
Our relationship.
Our recent partnership with Napa Auto parts is another example of our shift to delivering anything.
With the same excellent standard of service that we have always aimed to provide.
We also entered into a partnership.
One of the world's leading suppliers of ice cream products.
We continue to expand.
Hi, Terry in stadium ordering technology and currently have agreements with Metlife Stadium in New York Giants in New York.
Yes.
Thanks.
Alabama and Louisiana.
The state University, where he served.
Hello.
Platform.
We also recently secured a mobile ordering again.
Panther's first or previous deal.
With the National Hockey League.
The Metlife Stadium agreement also provides an avenue to introduce Asap.
Hey, Brad.
Sure.
In the market.
We launched in select.
Central and Northern New Jersey, and the new.
Providing home and office.
In 2022.
Our traditional core agents.
He has more than doubled.
September 32020 to be approximately 2900 merchants are using.
Alright.
No problem Sir.
Sure.
We've heard by Aon.
I didn't want to increase it.
Percent.
Nine months ended September 32022.
With approximately 30000 Cafe restaurant partners.
Platform clients.
To build on our ancillary revenue streams with the goal to diversify the company.
Beyond third party.
Offering merchant processing solution.
Macroeconomic factors, including.
Higher gas price.
Continued to impact our markets and the order volumes during the third quarter of 2022.
In response, we have focused our efforts on.
Certain initiatives too.
Our class B shares.
Comprehensive rebranding and consolidation of our technology platforms into a single application.
Cost reductions where appropriate.
We are making progress on the ship to one platform, which once completed should provide additional cost that will be sort of stable.
As we mentioned in our August earnings call during the second quarter of 2022.
The pay down of approximately $21 million of debt.
Wow.
The Jordan to me.
2024.
During the third quarter of 2020.
Into an agreement with the lenders.
If our convertible notes.
Rich.
Burning approximately six $8 million of notes currently beneficially own approximately 13%.
Okay and stuff.
This conversion reinforces bill.
<unk> management team and strategy.
Outstanding long term debt.
2022, total approximately $9 million.
$85 million.
31, 2020 one.
We are pleased with the outcome of the shareholder vote.
<unk> special meeting of stockholders on October 20th and recharged stockholders of food and medicine.
To the competition.
Corporation.
First stock split of the comp.
<unk> common stock.
That range.
Reducing the authorized number of shares of the company.
Common stock.
And when determined by the company's board and its sole discretion.
On November 2nd 2022, our board adopted resolution.
The reverse stock split at a reverse stock split ratio of 22, one and authorized the company to file.
Again with the secretary of state of.
Delaware to amend the company.
Third.
These statements.
Corporation to effect, a reverse stock split on or prior to that.
Effectiveness at 11 59 P M.
21, 2022 words such.
Maybe you can tell by any authorized officer.
As a result of the reverse stock split.
Every 20 shares of the company's common stock issued and outstanding immediately prior to the reverse stock split will be used to it.
Smaller number of shares.
That every 20 shares of common stock held by the stockholders.
Prior to the reverse stock split will be combined and reclassified into one share of common stock.
Training of the company's common stock.
That's a capital market perspective.
On a split adjusted basis.
Opening trading hours on November 22.
2022. Additionally.
Actually with the company's previously announced rebranding.
Since the company's common stock will begin trading on the NASDAQ capital market.
Trading symbol Asap.
Now I will turn it over to arm and our Chief financial Officer for a recap of the third quarter results.
Thank you Carl I would like I would like to now review, our third quarter 2022 financial results revenue for the third quarter 2022 was $25 1 million compared to $43 4 million in the third quarter of 2021.
For the nine months ended September 32022 revenue was $91 4 million compared to $143 5 million for the nine months ended September 32021.
Decline in revenue was primarily as a result of lower order volumes driven by higher competitive environment delivery business, partially offset by revenue from our third party payment processing were Pearl service operations.
Adjusted EBITDA for the third quarter of 2022 was a net loss of $4 7 million compared to adjusted EBITDA of $3 1 million in third quarter of 2021, approximately half a million dollars in the third quarter 2022 losses is from an increase to an insurance reserve.
Net loss for the third quarter of 2022 was $73 5 million for loss of 40 40 cents per share compared to net income of $12 3 million or nine cents per share in the third quarter of 2021.
Net loss for the third quarter of 22 2022 included $3 9 million noncash goodwill impairment charge, mainly due to continued decline in our stock price and market capitalization through September 30 of 2022 net income for the third quarter of 2021 included a $16 7 million.
Adjustments for the charge and an estimate of the medical contingency Ashok.
Cash on hand totaled $20 1 million as of September 30th 2022.
Concludes the recap of our third quarter 2022 financial results. We will now go into a short Q&A session.
If you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Once again, if you would like to ask a question. Please press star one well pause for just a moment to allow everyone the opportunity to signal.
We will take our first question from Dan Kronos with benchmark. Please go ahead.
Great. Thanks.
Obviously, a lot going on here between the rebrand the partnerships.
Stadium agreements.
Okay.
We've seen for a while it's fairly clear diversification effort here.
Just talk a little bit about sort of the economic ramifications of everything that's going on and I know youre going to probably want to highlight sort of the payments to push because that's got a really nice underlying profitability to it but just how do we think about top line relative to someone who has extensive efforts.
The if there's any economic outlay in the short term.
And then if you want to as I, just kind of laying out sort of what this means longer term or a payment fashion across multiple categories potentially that'd be helpful.
Yeah, So let me kind of unpack that ultimately because of that.
Of course, the Walgreens business.
Headwinds.
It's in the lab.
12 to 18 months, that's the overarching.
Driver.
The actual performance obviously.
You have to match it.
Expenses to your order flow and as we've seen the order flow.
Right.
We've tried to move as quickly as possible.
<unk> arcs engines with.
That level of orders.
That being said.
A number of the main drivers.
Hum.
Cash.
Our legacy things right like the rebrand.
Maybe you could give it away anything or go forward, our marketing expense and just they continued to work on our technology platform.
Wanted to ask.
A lot of other new shows.
Clooney.
Warmed up.
And Brittany.
The next stage of functionality.
Going forward.
Talked about this over and over again from the very beginning we always looked at this business.
Only business that also do the last mile delivery.
People are using.
Last mile delivery as a differentiator to sell our payment processing service.
Since emergence.
In the future of our business.
We continue to add restaurants on the delivery side.
And we think we need to add.
Non restaurant merchants on the payment side.
Highlighted albeit.
It's still small relative to the entire business.
Sure.
Yes.
Nothing to ignore and I expect that as our focus.
When used in this direction.
You will enjoy.
Results from that segment in 2023 that has prompted us.
So she can start reporting.
In the future and expenses broken out from.
Yes.
Think that.
The way to think about all of these initiatives whether it's the.
In saving in the mobile ordering.
The delivery of it.
And everything.
New stores.
The abolition of better relationships with our retail or restaurants, a sports team.
Sports venue.
It gives us the ability to offer our payment processing services.
Which is kind of weird, whereas the management come from begin with and creating.
Alternative revenue stream on last mile delivery.
I mean, that's the whole strategy in a nutshell.
That's super helpful and interesting to kind of hear you know, we're getting close to a breakdown on the payment side can you I guess, you know Carl side and like.
Clearly last mile is a differentiator.
It seems to be enough you clearly have a background in sort of the whole space. So I just you know.
I guess is.
Is there anything beyond that that really helps sort of solidify these wins and what has historically been a competitive marketplaces, it sounds like you're making a pretty substantial.
Well look at the end of the day.
You see this in bits and pieces.
Handled landscape with a bigger company.
We think the heart of this business since the merger or the restaurant.
Taylor and providing services that help that.
Sell more product and make it easy.
We're here for them to sell more product.
This strategy, but we talk to that.
Sports franchises.
About helping them.
Get their constituents.
To buy more product service.
I fear soda hotdogs and making it easy for them.
Alright, we wanted to make it easy for our merchants can sell as much product as possible.
That's at the heart of it now all of these things that come along with it whether it.
Mobile ordering platform.
A sports venue, whether it's you know.
Okay.
Payment processing solution, whether it's a delay.
We agree mechanism to offer to your customers. It's all part of that whether it's a.
And.
And ability to pay your employees.
Your next step.
Digital fashion. These are all things that we.
We believe.
We will help our core merchants sell more products.
Be more profitable and grow their businesses.
That's.
That's our mantra.
Got it.
Okay Super helpful. Karl Thanks for all the color.
Thank you Dan.
And that's all time, we have for questions today at this time I would like to turn the conference back over to management for any additional or closing remarks.
Thank you thanks, everyone for participating in today's call.
She ate.
We support.
Have a nice people.
This will conclude today's call. Thank you for your participation and you may now disconnect.
Yeah.
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