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TSXV: JK
The Company's Volume of Retail Customer Food Orders Grew by 26% From the Third Quarter to the Fourth Quarter as its Number of Ghost Kitchens Increased from 17 to 20 Locations for the Period Ending September 30, 2021
Just Kitchen Holdings Corp. ("JustKitchen" or the "Company") (TSXV: JK) (OTC: JKHCF) ( Frankfurt : 68Z) an operator of ghost kitchens specializing in the development of delivery-only food brands, is pleased to announce that it has filed its audited annual financial results for the fiscal year ending September 30, 2021 the highlights of which are included in this news release. The full set of Consolidated Financial Statements and Management Discussion and Analysis can be viewed by visiting the Company's website at en.justkitchen.com or its profile page on SEDAR at www.sedar.com .
Financial Highlights
- Food and beverage sales of $4,443,746 for the three-month period ended September 30, 2021 compared to $1,121,121 for the three-month period ended September 30, 2020 ; similarly, sales reached $11,926,094 for the twelve-month period ended September 30, 2021 compared to $1,833,922 reported for the 309-day period from November 27, 2019 to September 30, 2020 (the " Comparative Period ");
- Sales volume grew to 269,721 retail customer food orders in the fourth quarter from 214,744 retail customer food orders in third quarter of 2021, which is an increase of 26%;
- Number of ghost kitchens increase to 20 with an average retail delivery size of $15.67 per order in the fourth quarter of 2021, from 17 ghost kitchens with an average retail delivery size of $14.77 per order in the previous quarter;
- Adjusted EBITDA losses were $2,623,445 and $7,801,567 for the three- and twelve-month periods ended September 30, 2021 , respectively, as compared to Adjusted EBITDA losses of $911,876 and $1,902,454 for the same three-month period of the prior year and the Comparative Period, respectively, primarily as the result of an overall increase in business activities which caused an increase in general and administrative costs. Non-cash stock-based compensation included in general and administrative expenses were $481,838 and $2,369,747 for the three- and twelve-month periods ended September 30, 2021 , respectively; and
- Net losses were $3,440,775 and $11,237,581 for the three- and twelve-month periods ended September 30, 2021 , respectively, as compared to $1,185,548 and $2,520,680 for the same three-month period of the prior year and the Comparative Period, respectively, due to the same primary reasons listed above.
Management Commentary
"The JustKitchen management team is pleased with the Company's 2021 financial results as the key metrics of revenue, retail customer food order volume, ghost kitchens and retail delivery size per order all increased substantially. Our 33% increase in revenue from the third to the fourth quarter was nicely accompanied by a 26% increase in retail customer food orders and a 6% increase in average retail order delivery size," said Jason Chen , Co-Founder and Chief Executive Officer of JustKitchen.
"We have started 2022 strongly by delivering approximately 146,000 total customer food orders in January, as the sum of 125,000 Spoke-driven orders and 21,000 order equivalents from B2B sales. The team is also focused on bolstering the trend of improving margins and gaining cost efficiencies. Management continues to grow the business at a high rate as we add locations, develop and launch new in-house menus, license third-party brands, expand to new markets and secure new partners. I am proud of our accomplishments during the 2021 fiscal year and expect JustKitchen to maintain a similar growth trajectory throughout 2022,"Â added Mr. Chen.
Summary of Key Financial Measures
Three months ended September 30, 2021 $ | Three months ended September 30, 2020 $ | Twelve months ended September 30, 2021 $ | 309 days ended September 30, 2020 2 $ | |
Revenue | 4,443,746 | 1,121,121 | 11,926,094 | 1,833,922 |
Adjusted EBITDA 1 | (2,623,445) | (911,876) | (7,801,567) | (1,902,454) |
Loss for the period | (3,440,775) | (1,185,548) | (11,237,581) | (2,520,680) |
Loss per share | (0.05) | (0.04) | (0.21) | (0.11) |
The following is a reconciliation of Adjusted EBITDA to Income (Loss) from Operations:
Quarter ended September 30, 2021 $ | Quarter ended September 30, 2020 $ | Year ended September 30, 2021 $ | 309 days ended September 30, 2020 2 $ | |
Income (Loss) from operations | (3,440,775) | (1,185,548) | (11,237,581) | (2,520,680) |
Interest expense | 23,315 | 20,967 | 101,969 | 67,912 |
Depreciation expense | 312,177 | 124,980 | 964,298 | 337,439 |
EBITDA 1 | (3,105,283) | (1,039,601) | (10,171,3141) | (2,115,329) |
Stock-based compensation | 481,838 | 127,725 | 2,369,747 | 212,875 |
Adjusted EBITDA 1 | (2,623,445) | (911,876) | (7,801,567) | (1,902,454) |
1. | Adjusted EBITDA is a financial measure that does not have a standardized meaning under IFRS. Adjusted EBITDA is defined as earnings before interest expense, depreciation and stock-based compensation. As there is no standardized method of calculating Adjusted EBITDA, it may not be directly comparable with similarly titled measures used by other companies. The Company considers Adjusted EBITDA to be a relevant indicator for measuring trends in performance and its ability to generate funds to service its debt and to meet its future working capital and capital expenditure requirements. Adjusted EBITDA is not a generally accepted earnings measure and should not be considered in isolation or as an alternative to net income (loss), cash flows or other measures of performance prepared in accordance with IFRS. |
2. | Represents the period from acquisition of control on November 27, 2019. |
Corporate Highlights Subsequent to September 30, 2021
The Company:
- Received DTC Eligibility to improve the settlement and clearing for any of its shares traded in the United States ;
- Acquired the virtual branding rights to the "Chili House" and "Ben Teppanyaki" Taiwanese food brands;
- Launched its proprietary software "JKOS" to add food ordering capabilities to third party electronic devices and applications;
- Began trading on the OTCQB Marketplace on October 25, 2021 ;
- Added three additional ghost kitchen locations in Taiwan ;
- Appointed Edward Wright to its Board of Directors;
- Created the "King's Menu" virtual brand for the New Taipei Kings professional basketball team;
- Announced its Philippines expansion through a business cooperation with TDG Ventures;
- Added a ghost kitchen location in the hotel adjacent to Hsinchu Science Park;
- Signed a binding agreement to acquire 3 Square's tech-enabled food hall software and kitchen equipment and take over a kitchen facility lease arrangement;
- Appointed strategic advisors and key management to build on its international expansion;
- Entered into an agreement with REEF Technology Inc. to launch DJ Khaled's "Another Wing" food brand in Taiwan and Hong Kong ;
- Signed a letter agreement to purchase a 46,000 square foot 'Mega Hub' facility; and
- Acquired the WeChef specialized kitchen equipment and took over the kitchen facility lease agreement.
Similar to the statement provided in the announcement of the Company's third quarter financial results, and despite the significant increase in revenues on both a quarterly and annual basis, the Company anticipates that operating costs will remain proportionally elevated in the near term to support its rapid expansion in Taiwan , Hong Kong , the Philippines and elsewhere internationally.
ABOUT JUSTKITCHEN
JustKitchen is primarily an operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery-only food brands for customers. The Company currently operates in Taiwan and Hong Kong with plans to expand operations to the United States and other Asian countries. JustKitchen uniquely utilizes a hub-and-spoke operating model, which features advanced food preparation taking place at larger hub kitchens and final meal preparation taking place at smaller spoke kitchens located in areas with higher population densities. The Company combines this operating model with online and mobile application-based food ordering fulfilled by third-party delivery companies, to minimize capital investments and operating expenses and reach more customers in underserved markets. The Company's other business, JustMarket, is an e-commerce grocery delivery platform that allows customers to purchase groceries for delivery or add select grocery items to meals ordered through JustKitchen.
For more information about the Company, please visit investors.justkitchen.com. JustKitchen's final prospectus, financial statements and management's discussion and analysis, among other documents, are all available on the Company's profile page on SEDAR at www.sedar.com .
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
FORWARD-LOOKING STATEMENTS
This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur including but not limited to the Company's comments regarding the expected rapid and continuing growth of its business. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks, including those risk factors identified in the Company's prospectus dated March 26, 2021 , and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Just Kitchen Holdings Corp.
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