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KITS Eyecare Reports Record Third Quarter 2022 Financial Results, Q3 Revenue Up 18% Year-Over-Year to $23.6 Million
Tuesday, November 15, 2022Company Profile | Follow Company
Vancouver, BC, November 15, 2022--(T-Net)--Kits Eyecare Ltd. (KITS) (TSX: KITS), one of Canada's fastest growing direct-to-consumer eyeglasses manufacturer and digital eyecare brands, has released its financial results for the third quarter of 2022.
Third Quarter 2022 Financial Highlights
Roger Hardy, CEO, Kits Eyecare
"The vision category remains compelling given its legacy actors and KITS is driving improved long-term value for shareholders with a differentiated model in a quickly changing landscape that is resonating with consumers. This quarter the KITS team delivered superior results with revenue improving 18%, glasses growing 81% and margins growing 39% year-on-year, while achieving positive EBITDA and positive net income. Much of the team's disciplined work consolidated into outperformance across all functional areas of our business as the team asked smart questions that accelerated value creation. The solid operational foundation we have built enables us to invest in bigger and bolder initiatives as we continue our drive to become the pre-eminent brand in eyecare," said Roger Hardy, co-founder and CEO. "Overall, it was a tight quarter at KITS, there was no drift. We have the edge and we will be leaning into it."
"In the quarter, our team has worked tirelessly to enhance our offering while keeping prices accessible. Our strong results demonstrate that especially during these uncertain economic times, customers appreciate KITS' continued focus on value and convenience," said Sabrina Liak, co-founder, President and CFO. "We're also pleased with the continued progress we are making to strengthen our balance sheet and position ourselves for growth and opportunities ahead."
Financial Highlights
The following selected financial information is qualified in its entirety by and should be read in conjunction with our unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2022, and September 30, 2021 and accompanying notes and Management's Discussion and Analysis ("MD&A") which may be viewed on SEDAR at www.sedar.com.
Three Months Ended |
Nine Months Ended |
|||||||||||||
Financial and Operating Data |
September 30, (unaudited) |
September 30, |
September 30, (unaudited) |
September 30, (unaudited) |
||||||||||
Revenue |
$ |
23,578 |
$ |
20,032 |
$ |
65,400 |
$ |
62,133 |
||||||
Gross profit |
$ |
7,213 |
$ |
5,197 |
$ |
20,343 |
$ |
14,787 |
||||||
Net income (loss) |
$ |
20 |
$ |
(2,137) |
$ |
(3,167) |
$ |
(10,563) |
||||||
Net income (loss) per share |
||||||||||||||
Basic |
$ |
0.00 |
$ |
(0.07) |
$ |
(0.10) |
$ |
(0.35) |
||||||
Diluted |
$ |
0.00 |
$ |
(0.07) |
$ |
(0.10) |
$ |
(0.35) |
||||||
Non-IFRS Measures (a): |
||||||||||||||
Constant currency revenue |
$ |
22,863 |
$ |
20,032 |
$ |
64,134 |
$ |
62,133 |
||||||
EBITDA |
$ |
1,050 |
$ |
(1,600) |
$ |
(532) |
$ |
(12,018) |
||||||
Adjusted EBITDA |
$ |
(795) |
$ |
(1,629) |
$ |
(2,268) |
$ |
(7,543) |
||||||
Adjusted EBITDA Margin % |
(3.4) % |
(8.1) % |
(3.5) % |
(12.1) % |
||||||||||
Reconciliation of constant currency revenue |
||||||||||||||
Revenue |
$ |
23,578 |
$ |
20,032 |
$ |
65,400 |
$ |
62,133 |
||||||
Foreign exchange impact |
(715) |
- |
(1,266) |
- |
||||||||||
Constant Currency Revenue |
$ |
22,863 |
$ |
20,032 |
$ |
64,134 |
$ |
62,133 |
||||||
Change in constant currency |
$ |
2,831 |
$ |
2,001 |
||||||||||
Change in constant currency % |
14.1 % |
3.2 % |
||||||||||||
Reconciliation of Adjusted EBITDA |
||||||||||||||
Net income loss for the period |
$ |
20 |
$ |
(2,137) |
(3,167) |
$ |
(10,563) |
|||||||
Add back: |
||||||||||||||
Income taxes |
(250) |
(649) |
(1,148) |
(4,668) |
||||||||||
Finance costs - net |
396 |
372 |
1.185 |
1,398 |
||||||||||
Depreciation and amortization |
884 |
814 |
2,598 |
1,815 |
||||||||||
EBITDA |
$ |
1,050 |
$ |
(1,600) |
$ |
(532) |
$ |
(12,018) |
||||||
Add back |
||||||||||||||
Share-based compensation (a) |
$ |
308 |
$ |
358 |
$ |
976 |
$ |
1,019 |
||||||
Brand expenses (b) |
- |
193 |
- |
2,641 |
||||||||||
Exchange loss / (gain) |
(2,156) |
(655) |
(2,733) |
(716) |
||||||||||
One-time costs (c) |
3 |
75 |
21 |
1,531 |
||||||||||
Adjusted EBITDA |
(795) |
$ |
(1,629) |
$ |
(2,268) |
$ |
(7,543) |
|||||||
Revenue |
$ |
23,578 |
$ |
20,032 |
$ |
65,400 |
$ |
62,133 |
||||||
Adjusted EBITDA Margin % (d) |
(3.4) % |
(8.1) % |
(3.5) % |
(12.1) % |
Notes: |
|
(a) |
Represents non-cash share-based compensation expense associated with restricted share rights ("RSRs") and options recognized in the period. |
(b) |
Represent expenses associated with brand and content creation for KITS including film and other brand assets. The Company plans to use these brand assets over time and therefore will be able to derive future economic benefits from these expenses incurred. |
(c) |
In connection with the acquisition of Kits.com and the IPO, the Company incurred expenses related to professional fees, consulting, legal, and accounting that would otherwise not have been incurred and were directly related to these two matters. These fees are not indicative of the Company's ongoing costs. Other than the one-time IPO directors' and officers' insurance costs which are expensed over the insurance coverage period, we expect the remaining cost to discontinue following the completion of the IPO. |
(d) |
Refer to "Non-IFRS Measures and Industry Metrics" section of the MD&A filed on www.sedar.com. |
About KITS
KITS is Canada's fastest growing, digital eyecare brand providing eyewear for eyes everywhere. We offer customers access to a vast selection of contact lenses and eyeglasses, including our own exclusive KITS designed products, as well as a robust suite of online vision tools.
Our efficient digital platform, backed by our industry-leading manufacturing and designs, removes intermediaries and enables us to offer great prices and deliver made to order personalized products with incredible care and accuracy.
We are creating disruption in the industry by constantly pursuing cutting-edge technologies to enable the best customer experience, including online eyewear fitting tools, and virtual try-on for glasses. We strive to delight our customers with our competitive prices, a convenient digital shopping experience, fast and reliable delivery options and an unrelenting focus on earning our customers' lifelong trust.
Non-IFRS Financial Measures and Industry Metrics
This press release includes references to certain non-IFRS financial measures such as Constant Currency Revenue, EBITDA and Adjusted EBITDA, and industry metrics such as Active Customers. These financial measures and industry metrics are employed by the company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the company's operating and financial performance. These financial measures are not defined under IFRS, nor do they replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure and Industry Metrics can be found in our Management's Discussion and Analysis. Such non- IFRS reconciliations can also be found in this press release under "Financial Highlights".
Forward-Looking Statements This press release contains forward-looking statements, including statements relating to the execution of our proposed strategy, our operating performance and prospects on the business. These forward-looking statements generally can be identified by the use of words such as "intend," "believe," "could," "continue," "expect," "estimate," "forecast," "may," "potential," "project," "plan," "would," "will," and other words of similar meaning. Each forward-looking statement contained in this press release is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. [ MORE ] |
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