JustKitchen Reports Financial Results for Third Quarter Ended June 30, 2022
TSXV: JK OTCQB: JKHCF FRA: 68Z
Having Surpassed $14 Million in Total Revenue in Fiscal 2022 so far, the Company is Focusing on Widening Margins, Eliminating Excess Costs and Optimizing Operations
VANCOUVER, BC, Aug. 30, 2022 /CNW/ - Just Kitchen Holdings Corp. ("JustKitchen" or the "Company") (TSXV: JK) (OTCQB: JKHCF) (FRA: 68Z), an operator of ghost kitchens specializing in the development of delivery-only food brands, announces that it has filed its unaudited financial results for the third fiscal quarter ending June 30, 2022, the highlights of which are included in this news release. The full set of Condensed Consolidated Interim 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.
- Total revenue grew 55% to $5,171,312 and by 92% to $14,377,333 for the three- and nine-month periods ended June 30, 2022, respectively as compared to $3,346,897 and $7,482,348 for the three-and nine-month periods ended June 30, 2021, respectively;
- Retail order volume grew by 46% to 313,883 and by 96% to 901,546 orders for the three- and nine-month periods ended June 30, 2022, respectively, from 214,744 and 460,944 orders for the three- and nine-month periods ended June 30, 2021, respectively;
- Number of ghost kitchens increased 65% to 28 with an average retail delivery size of $14.88 per order for the three months ending June 30, 2022, from 17 ghost kitchens with an average retail delivery size of $14.77 per order for the same period in 2021;
- Adjusted EBITDA losses were $3,371,450 and $10,560,542 for the three- and nine-month periods ended June 30, 2022, respectively, as compared to losses of $2,056,192 and $5,178,122 for the same three and nine-month periods of the prior year, respectively. The increase in Adjusted EBITDA losses for the quarter ended June 30, 2022 is primarily as the result of an overall increase in business activities, international expansions and an increase in general and administrative costs from $2,108,664 in Q3 2021 to $2,795,667 in Q3 2022, mainly due to salaries increasing from $394,632 in Q3 2021 to $1,018,062 in Q3 2022 due primarily to an increase in the number of employees and consultants; and
- Net losses were $4,549,714 and $13,563,474 for the three- and nine-month periods ended June 30, 2022, respectively, as compared to $2,836,847 and $7,796,806 for the same three-and nine-month periods of the prior year, respectively, due to the same primary reasons listed above.
"JustKitchen continues to serve more food to a growing number of on-the-go consumers across Asia. Cresting $14 million dollars in total revenue for the first nine months of fiscal 2022 is a testament to customers valuing the convenience of service, taste of our meals and appeal of our brands," said Jason Chen, Co-Founder and Chief Executive Officer of JustKitchen.
"Reaching this point in the maturation of our company has been exciting. We are now ready to shift our focus to widening margins, eliminating excess costs and optimizing operations through specific technologies, as we have recently announced. Since revenue growth has been proven out, we expect to make significant margin improvements though a multi-pronged expense reduction plan without impacting revenues. Already, in July we achieved location-level profitability in Taiwan and the Philippines. Therefore, we expect the impact of the cost-saving measures to be more pronounced in the end of year financial statements," added Mr. Chen.
Summary of Key Financial Measures
Quarter ended June 30, 2022 $ |
Quarter ended June 30, 2021 $ |
|
Number of kitchens |
28 |
17 |
Revenue from retail customers |
$4,671,630 |
$3,171,851 |
Revenue from business customers |
$499,682 |
$175,046 |
Total Revenue |
$5,171,312 |
$3,346,897 |
Number of retail deliveries |
313,883 |
214,744 |
Average retail delivery size |
$14.88 |
$14.77 |
Net loss |
$(4,549,714) |
$(2,836,847) |
Comprehensive loss |
$(4,463,121) |
$(2,915,959) |
Basic loss per share |
$(0.06) |
$(0.05) |
Diluted loss per share |
$(0.06) |
$(0.05) |
The following is a reconciliation of Adjusted EBITDA to Income (Loss) from Operations:
Quarter ended June 30, 2022 $ |
Quarter ended June 30, 2021 $ |
|
Loss for the period |
(4,549,714) |
(2,836,847) |
Interest expense |
30,945 |
28,400 |
Depreciation expense |
502,149 |
259,208 |
Amortization expense |
19,099 |
- |
EBITDA Loss |
(3,997,521) |
(2,549,239) |
Stock-based compensation |
626,071 |
493,047 |
Adjusted EBITDA Loss |
(3,371,450) |
(2,056,192) |
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, amortization, 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. |
The Company:
- Started implementing margin improvement measures after its rapid growth phase;
- Embarked on optimizing its operations using specific technologies;
- Began working with Chef Richie Lin on a hybrid fast-fine restaurant and ghost kitchen;
- Launched the C'mon Eat Mini Hot Pot and Pizza Central NY Style food brands; and
- Decided to exit the Singapore market after completing a pilot phase of operations.
As of the date of the MD&A, the Company reports the following key location and brand statistics:
- 27 total locations across Taiwan, Hong Kong, Malaysia and the Philippines
- One of the Company's large Taiwan-based kitchens prepares and provides food for 14 7-Eleven convenience stores and two Taichung TSMC factories
- Customers are offered 33 food brands across four countries:
- 18 in Taiwan, eight in Hong Kong, five in Malaysia and two in the Philippines
The Company has been focused on expanding rapidly within the Asian market since its inception and has incurred certain expenses in conjunction with these expansion efforts. This strategy has resulted in the Company building an efficient and sustainable ghost kitchen operational model which it is now applying to its expansion strategy within Southeast Asia. The Company believes Southeast Asia is the largest and most economically addressable market for a ghost kitchen operator, based on key factors including current and forecasted demand, higher population densities relative to alternative markets, and lower operating costs compared to alternative markets.
Moving forward, JustKitchen is focused on sustainable growth. As such, the Company is aggressively reducing its expenditures while incrementally increasing revenue to reach profitability. The Company plans to implement several key strategies to reduce Capex and Opex and improve margins including:
- Reducing cost of goods sold;
- Focusing on B2B clients that provide higher margins;
- Effective cost cutting;
- Focusing on driving store-level profitability;
- Focusing on high margin market(s); and
- Building alternative and recurring revenue streams.
Just Kitchen Holdings Corp. (the "Company" or "Just Kitchen") is primarily an operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery-only food brands for customers and businesses. The Company currently operates in Taiwan, Hong Kong, the Philippines and Malaysia. It has also signed an agreement that will allow JustKitchen to sell several of its proprietary food brands in Japan and it has also signed a brand swap agreement in India. Where appropriate, JustKitchen 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 via its proprietary mobile food ordering app and other third-party ordering apps. Delivery is 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.
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 focusing on widening margins, eliminating excess costs and optimizing operations through specific technologies; serving more food to a growing number of on-the-go consumers across Asia; expecting to make significant margin improvements though a multi-pronged expense reduction plan without impacting revenues; and expecting the impact of the cost-saving measures to be more pronounced in the end of year financial statements. 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.
Just Kitchen Holdings Corp., Suite 1430, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6; Nick Kuzyk, Investor Relations, Toll-Free: 1-855-JST-KCHN (1-855-578-5246), Email: [email protected]
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