JustKitchen Reports Record Financial Results for Second Quarter 2021

- May 31st, 2021

The Company Experienced Significant Sales Growth for the Three and Six Months Ending March 31, 2021 TSXV: JK Just Kitchen Holdings Corp. an operator of ghost kitchens specializing in the development of delivery-only food brands for customers, is pleased to announce it has filed its unaudited financial results for the second quarter of the fiscal year ending March 31, 2021 the highlights of which are included in this …

The Company Experienced Significant Sales Growth for the Three and Six Months Ending March 31, 2021

TSXV: JK

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 for customers, is pleased to announce it has filed its unaudited financial results for the second quarter of the fiscal year ending March 31, 2021 the highlights of which are included in this news release. The full set of Condensed Interim 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 $2,224,281 for the three-month period ended March 31, 2021 compared to $127,716 for the three-month period ended March 31, 2020 ; similarly, sales reached $4,135,451 for the six-month period ended March 31, 2021 compared to $233,137 reported for the 126-day period from November 27, 2019 to March 31, 2020 (the ” Comparative Period “);
  • Approximate sales volume grew to 128,400 customer food orders in the second quarter from 117,800 customer food orders in first quarter of 2021, which is an increase of 9% for a total of 246,200 food orders for the six-month period ended March 31, 2021 compared to an immaterial amount of volume recorded during the Comparative Period, while the average dollar amount per order increased by 9% to $15.38 from $14.16 over the two most recent quarterly periods;
  • Adjusted EBITDA losses were $1,746,675 and $3,121,930 for the three- and six-month periods ended March 31, 2021 , respectively, as compared to losses of $210,990 and $361,227 for the same three-month period of the prior year and the Comparative Period, respectively, mainly due to the up-front costs associated with rapidly growing operations, raising capital and preparing to become a public issuer; and
  • Net losses were $2,530,157 and $4,959,959 for the three- and six-month periods ended March 31, 2021 , respectively, as compared to $319,117 and $502,846 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

“We are pleased to report our first set of financial results as a public company, which reflect the strength of our core ghost kitchen business and the resonance of our food brands while clearly displaying our significant growth,” said Jason Chen , Co-Founder and Chief Executive Officer of JustKitchen. “On behalf of the management team and the board of directors, I would like to thank our employees for their hard work in helping us to achieve these strong financial results and our shareholders for their support and belief in our business model from the beginning,” added Mr. Chen.

Summary of Key Financial Measures

Three months
ended
March 31,
2021
Three months
ended
March 31,
2020
Six months
ended
March 31,
2021
126 days
ended
March 31,
2020 2
Revenue 2,224,281 127,716 4,135,451 233,137
Adjusted EBITDA 1 (1,746,675) (210,990) (3,121,930) (361,227)
Loss for the period (2,530,157) (319,117) (4,959,959) (502,846)
Loss per share (0.06) (0.02) (0.12) (0.05)

The following is a reconciliation of Adjusted EBITDA to Income (Loss) from Operations:

Three months
ended
March 31,
2021
Three months
ended
March 31,
2020
Six months
ended
March 31,
2021
126 days
ended
March 31,
2020 2
Income (Loss) from operations (2,530,157) (319,117) (4,959,959) (502,846)
Interest expense 26,581 22,384 50,254 29,149
Depreciation expense 223,735 85,743 392,913 112,470
EBITDA 1 (2,279,841) (210,990) (4,516,792) (361,227)
Stock-based compensation 533,166 1,394,862
Adjusted EBITDA 1 (1,746,675) (210,990) (3,121,930) (361,227)
1 Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and Adjusted EBITDA. These measures do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. Non-IFRS measures provide investors with a supplemental measure of the Company’s operating performance and therefore highlight trends in Company’s core business that may not otherwise be apparent when relying solely on IFRS measures. Management uses non-IFRS measures in measuring the financial performance of the Company.
2 Represents the period from acquisition of control on November 27, 2019.

Corporate Highlights Subsequent to March 31, 2021

The Company:

  • Delivered approximately 142,000 total customer food orders for the months of April and May, exceeding the previous quarter’s three-month total of 128,400 orders;
  • Listed its common shares for trading under the stock symbol “JK” on the TSX Venture Exchange on April 15, 2021 ;
  • Announced its expansion into Hong Kong with an upcoming location in the North Point area and a target of establishing approximately 6-8 locations across the region over time;
  • Grew to 15 locations across Taiwan including its most recently ghost kitchen in the world-famous Taipei 101 building;
  • Announced its international expansion plan including the expected entry into the United States , Philippines and Singapore in 2021, with Canada and other countries in the Asia-Pacific region targeted for 2022; and
  • Announced the appointment of two visionaries, Mr. Warren Tseng and Mr. Gene Chuang , as the founding members of its strategic advisory board.

In the near term, the Company anticipates that operating costs will remain elevated in relation to revenues to support rapid expansion in Taiwan and internationally. Specifically, the Company has hired employees ahead of additional ghost kitchen openings and allocated significant capital for technology, training, as well as sales and marketing to create market awareness.

Comment Regarding the Status of the COVID-19 Pandemic in Taiwan

The Company continues to monitor the recent increase in active cases of COVID-19 across Taiwan . As the first wave of cases resulted in an increase in demand for delivery-only food ordering, JustKitchen is paying close attention to customer data in combination with the government’s announcement of any further restrictions or lockdown measures. Throughout the pandemic the Company has operated, and will continue to operate, according to the strictest of health and food safety standards in order to keep supplying on-demand food to people in mandatory isolation on a contactless basis or who are simply uncomfortable dining outside of their homes at such a time. Management is taking the steps necessary to protect its office staff and facility-based employees and is exploring private healthcare options to vaccinate all willing personnel.

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 disclosure of events occurring subsequent to the quarter ended March 31, 2021 and the Company’s comments regarding the status of the COVID-19 pandemic in Taiwan . 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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