Record First Quarter Revenue of
$127.7 million and First Quarter Gross Margin of 52.2%
20% YoY Growth in North America Revenue,
Including 54% YoY Growth in Retail Partnership Channel
Company Raises Full Year 2021 Financial Outlook
to Reflect Favorable Business Trends
Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR) today
announced financial results for the quarter ended March 31, 2021
(the “first quarter 2021” or “first quarter”).
First Quarter 2021 Financial Highlights (as compared to
the quarter ended March 31, 2020)
- North America revenue increased 20.0% to a first quarter record
of $127.7 million;
- North America Direct-to-Consumer revenue, inclusive of Casper’s
70 retail stores and e-commerce channel, increased 11.1% to $93.2
million;
- North America Retail Partnership revenue increased 53.7% to
$34.4 million;
- Gross Profit increased $13.7 million or 25.9% to $66.7 million
with gross margin of 52.2%, up 540 basis points;
- Net Loss improved $13.3 million or 38.5% to $21.2 million;
- Adjusted EBITDA loss improved by $12.3 million or 54% to $10.6
million; and
- Cash and cash equivalents were $61.6 million at quarter
end.
Chief Executive Officer, Philip Krim, commented: “Casper
delivered record first quarter financial results that exceeded our
expectations, and that momentum has continued in the second
quarter. Our third-party manufacturing model is enabling us to
effectively navigate industry-wide supply chain challenges as we
meet growing demand for our products. As a result, we continued
outpacing the overall mattress industry, generating first quarter
North American revenue growth of 20% year-over-year, including 54%
growth in retail partnership revenue. Top-line growth, combined
with our gross margin of over 52%, resulted in a 26% rise in gross
profit and a meaningful improvement in Adjusted EBITDA, reinforcing
our expectation that Casper will achieve Adjusted EBITDA
profitability in the second half of 2021.”
Mr. Krim continued, “In the second quarter, we continue to
successfully execute on our three core strategic priorities
including: expanding our product offering with the launch of our
new Casper Cooling Collection, increasing brand awareness with the
introduction of the new ‘Love Your Tomorrow’ brand platform, and
growing points of retail distribution. We continue to see strong
demand signals across our business, and expect top-line growth to
accelerate in the coming quarters and are raising our full year
2021 financial outlook to reflect these favorable trends. With the
significant opportunities in front of us, we remain confident in
our ability to achieve our growth and profitability goals, as we
build on our recent progress to best position Casper for the
future.”
Outlook
The Company today provided an outlook for certain financial
metrics for the quarter ending June 30, 2021 (“second quarter
2021”) and year ending December 31, 2021 (“full year 2021” or
“2021”), reflecting certain assumptions by management regarding the
Company’s business, trends, seasonal factors, and the continuing
impact of the COVID-19 pandemic on its business. In addition, the
outlook assumes there will be no material changes in world events,
recent consumer trends, economic conditions, competitive landscape
or other circumstances beyond our control that may adversely affect
the Company’s results of operations.
In the second quarter 2021, the Company expects revenue of
approximately $146 to $153 million, net loss of approximately $18
to $15 million, and Adjusted EBITDA loss of approximately $7 to $4
million. At the mid-point, this revenue range represents 36% growth
and 42% North America revenue growth in the second quarter 2021.
For the full year 2021, the Company expects revenue of
approximately $580 to $610 million. At the mid-point, this revenue
range represents 20% growth and 23% North America revenue growth
for 2021.
Conference Call & Webcast Information
Casper will hold a conference call on Thursday, May 13, 2021, at
8:00 a.m. Eastern time to discuss the Company’s first quarter
results and other business updates. To access the conference call,
interested parties may dial 866-319-1799 (for domestic callers) or
825-312-2362 (for international callers). Please call at least five
minutes in advance of the start of the call to ensure that you are
connected prior to the call. Interested parties may also access a
live audio webcast of the call at
https://ir.casper.com/news-and-events/events-and-presentations/default.aspx.
Please allow 15 minutes to register. A replay of the call will be
available within two hours of the conclusion of the call until July
12, 2021 at
https://ir.casper.com/news-and-events/events-and-presentations/default.aspx
Casper periodically provides information for investors on its
corporate website, casper.com, and its investor relations website,
ir.casper.com. This includes press releases and other information
about financial performance, reports filed or furnished with the
SEC and information on corporate governance.
About Casper
Casper believes everyone should sleep better. The Sleep Company
has a full portfolio of obsessively engineered sleep
products—including mattresses, pillows, bedding, and furniture
designed in-house by the Company’s award-winning R&D team at
Casper Labs. In addition to its e-commerce business, Casper owns
and operates Sleep Shops across North America and its products are
available at a growing list of retailers.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding our expectations surrounding the impact of the COVID-19
pandemic and the related effect on our employees, customers and
business operations; our expectations surrounding our ability to
deliver growth, gain market share, and achieve Adjusted EBITDA
profitability by specified timelines; our future competitive
position; our future results of operations and financial position
including our outlook for the second quarter 2021 and full year
2021; our business strategy and plans, including our plans
regarding product launches, expanding brand awareness and reach,
and our retail distribution; and objectives of management for
future operations and creating long-term value. These statements
are neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including,
but not limited to, the following: the COVID-19 pandemic could
adversely impact our business, financial condition and results of
operations; our ability to compete successfully in the highly
competitive industries in which we operate; our ability to maintain
and enhance our brand; the success of our retail store expansion
plans; our ability to successfully implement our growth strategies
related to launching new products; the effectiveness and efficiency
of our marketing programs; our ability to manage our current
operations and to manage future growth effectively; our past
results may not be indicative of our future operating performance;
our ability to manage our supply chain commensurate with demand and
successfully and timely deliver merchandise to our retail partners
and customers; our ability to attract new customers or retain
existing customers; the growth of the market for sleep as a retail
category and our ability to become a leader or maintain our
leadership in the category; the impact of social media and
influencers on our reputation; our ability to protect and maintain
our intellectual property; our exclusive reliance on third-party
contract manufacturers whose efforts we are unable to fully
control; our ability to effectively implement strategic
initiatives; our ability to transfer our supply chain and other
business processes to a global scale; risks relating to our
international operations and expansion; we are dependent on our
retail partners; general economic and business conditions; we could
be subject to system failures or interruptions and security
breaches; risks relating to changing legal and regulatory
requirements, and any failure to comply with applicable laws and
regulations; we may be subject to product liability claims and
other litigation; we may experience fluctuations in our quarterly
operating results; we have and expect to continue to incur
significant losses; risks relating to our indebtedness; our need
for additional funding, which may not be available; risks relating
to taxes; future sales by us our stockholders may cause the market
price of our stock to decline; and risks and additional costs
relating to our status as a new public company. These and other
important factors discussed under the caption “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2020 and
our other filings with the Securities and Exchange Commission could
cause actual results to differ materially from those indicated by
the forward-looking statements made in this press release. Any such
forward-looking statements represent management’s estimates as of
the date of this press release. While we may elect to update such
forward-looking statements at some point in the future, we disclaim
any obligation to do so, even if subsequent events cause our views
to change.
Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental measure of our performance
that is not required by, or presented in accordance with, GAAP.
Adjusted EBITDA is not a measurement of our financial performance
under GAAP and should not be considered as an alternative to net
income or any other performance measure derived in accordance with
GAAP.
We define Adjusted EBITDA as net loss before interest (income)
expense, income tax expense and depreciation and amortization as
further adjusted to exclude the impact of stock-based compensation
expense, restructuring costs, costs associated with legal
settlements, and transaction costs incurred in connection with our
initial public offering. We caution investors that amounts
presented in accordance with our definition of Adjusted EBITDA may
not be comparable to similar measures disclosed by our competitors,
because not all companies and analysts calculate Adjusted EBITDA in
the same manner. We present Adjusted EBITDA because we consider it
to be an important supplemental measure of our performance and
believe it is frequently used by securities analysts, investors,
and other interested parties in the evaluation of companies in our
industry. Management believes that investors’ understanding of our
performance is enhanced by including this non-GAAP financial
measure as a reasonable basis for comparing our ongoing results of
operations.
Management uses Adjusted EBITDA:
- as a measurement of operating performance because it assists us
in comparing the operating performance of our business on a
consistent basis, as it removes the impact of items not directly
resulting from our core operations;
- for planning purposes, including the preparation of our
internal annual operating budget and financial projections;
- to evaluate the performance and effectiveness of our
operational strategies; and
- to evaluate our capacity to expand our business.
By providing this non-GAAP financial measure, together with the
reconciliation, we believe we are enhancing investors’
understanding of our business and our results of operations, as
well as assisting investors in evaluating how well we are executing
our strategic initiatives. Adjusted EBITDA has limitations as an
analytical tool, and should not be considered in isolation, or as
an alternative to, or a substitute for net income or other
financial statement data presented in our consolidated financial
statements as indicators of financial performance. Some of the
limitations are:
- such measure does not reflect our cash expenditures;
- such measure does not reflect changes in, or cash requirements
for, our working capital needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and such measures do not reflect any cash
requirements for such replacements; and
- other companies in our industry may calculate such measures
differently than we do, limiting their usefulness as comparative
measures.
Due to these limitations, Adjusted EBITDA should not be
considered as a measure of discretionary cash available to us to
invest in the growth of our business. We compensate for these
limitations by relying primarily on our GAAP results and using this
non-GAAP measure only supplementally. As noted in the table below,
Adjusted EBITDA includes adjustments to exclude the impact of
stock-based compensation expense and material infrequent items,
including but not limited to the costs of our initial public
offering, restructuring, and costs associated with legal
settlements, among other items. It is reasonable to expect that
these items will occur in future periods. However, we believe these
adjustments are appropriate because the amounts recognized can vary
significantly from period to period, do not directly relate to the
ongoing operations of our business and may complicate comparisons
of our internal operating results and operating results of other
companies over time. In addition, Adjusted EBITDA includes
adjustments for other items that we do not expect to regularly
record following our initial public offering. Each of the normal
recurring adjustments and other adjustments described in this
paragraph and in the reconciliation table below help management
with a measure of our core operating performance over time by
removing items that are not related to day-to-day operations.
Casper Sleep Inc. and
Subsidiaries
Consolidated Balance
Sheets
(In thousands, except per
share amounts)
(Unaudited)
As of
Assets
March 31, 2021
December 31, 2020
Current assets:
Cash and cash equivalents
$
61,626
$
88,922
Restricted Cash
—
3,162
Accounts receivable, net
24,536
27,663
Prepaid expenses and other current
assets
12,840
11,026
Inventory, net
46,840
35,531
Total current assets
145,842
166,304
Property and equipment, net
66,193
66,529
Other assets
1,363
1,368
Total assets
$
213,398
$
234,201
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
48,130
$
47,612
Accrued expenses
56,238
54,741
Deferred revenue
4,109
7,430
Other current liabilities
10,001
9,498
Total current liabilities
118,478
119,281
Long-term Debt
62,966
65,546
Other liabilities
23,833
23,907
Total liabilities
205,277
208,734
Stockholders’ equity:
Common stock, $0.000001 par value -
170,000 and 170,000 shares authorized; 41,425 and 40,539 issued and
outstanding as of March 31, 2021 and December 31, 2020,
respectively
—
—
Additional paid-in capital
444,063
440,248
Accumulated other comprehensive income
53
34
Accumulated deficit
(435,995)
(414,815)
Total stockholders’ equity
8,121
25,467
Total liabilities and stockholders’
equity
$
213,398
$
234,201
Casper Sleep Inc. and
Subsidiaries
Consolidated Statements of
Operations and Comprehensive Loss
(In thousands, except share
and per share amounts)
(Unaudited)
Three Months Ended March
31,
2021
2020
Revenue
$
127,678
$
113,044
Cost of goods sold
60,995
60,080
Gross profit
66,683
52,964
Operating expenses
Sales and marketing expenses
40,530
37,474
General and administrative expense
44,504
46,987
Restructuring expenses
401
1,311
Total operating expenses
85,435
85,772
Loss from operations
(18,752)
(32,808)
Other (income) expense
Net interest expense
2,516
2,156
Other (income) expense, net
(107)
(514)
Total other expenses, net
2,409
1,642
Loss before income taxes
(21,161)
(34,450)
Income tax expense
19
16
Net loss
(21,180)
(34,466)
Other comprehensive income (loss)
Currency translation adjustment
19
447
Total comprehensive loss
$
(21,161)
$
(34,019)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.52)
$
(1.23)
Weighted-average number of shares used in
computing net loss per share attributable to common stockholders,
basic and diluted
40,808,328
27,909,141
Casper Sleep Inc. and
Subsidiaries
Consolidated Statement of Cash
Flows
(In thousands)
(Unaudited)
Three Months Ended March
31,
2021
2020
Cash flows used in operating
activities:
Net loss
$
(21,180)
$
(34,466)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
3,823
4,129
Stock based compensation expense
3,786
2,661
Other
768
423
Changes in assets and liabilities:
Accounts receivable, net
3,127
10,637
Prepaid expenses and other current
assets
(1,815)
110
Inventory, net
(11,914)
486
Other assets
(1)
95
Accounts payable
913
7,113
Accrued expenses
1,497
(17,771)
Deferred revenue
(3,322)
(5,842)
Other liabilities
692
(643)
Net cash used in operating activities
(23,626)
(33,068)
Cash flows used in investing
activities:
Purchases of property and equipment
(3,881)
(7,090)
Net cash used in investing activities
(3,881)
(7,090)
Cash flows (used in) provided by financing
activities:
Exercise of stock options and warrants
29
50
Proceeds from equity issuance
—
88,206
Repayment on borrowings
(3,000)
—
Net cash (used in) provided by financing
activities
(2,971)
88,256
Effect of exchange rate changes
20
447
Net change in cash, cash equivalents, and
restricted cash
(30,458)
48,545
Cash, cash equivalents, and restricted
cash at beginning of period
92,084
67,578
Cash, cash equivalents, and restricted
cash at end of the period
$
61,626
$
116,123
Supplemental disclosure of cash paid
for:
Interest paid
$
(1,554)
$
(1,180)
Casper Sleep Inc. and
Subsidiaries
Reconciliation of Non-GAAP
Metrics
(In thousands)
(unaudited)
Three Months Ended
March 31,
(in thousands)
2021
2020
Net loss
$
(21,180)
$
(34,466)
Income tax expense
19
16
Interest (income) expense
2,516
2,156
Depreciation and amortization
3,823
3,148
Stock based compensation(a)
3,786
2,661
Restructuring(b)
401
1,311
Legal settlements(c)
—
1,500
Transaction costs(d)
—
787
Adjusted EBITDA
$
(10,636)
$
(22,887)
Three Months Ended June 30,
2020
Three Months Ended June
30, 2021 Estimated
(in thousands)
Actual
Low
High
Net loss
(24,205)
(17,745)
(14,745)
Income tax expense
10
—
—
Interest (income) expense
2,152
2,270
2,270
Depreciation and amortization
3,195
4,550
4,550
Stock-based compensation(a)
3,284
3,925
3,925
Restructuring(b)
4,129
Legal settlements(c)
—
Transaction costs(d)
—
Adjusted EBITDA
$
(11,435)
$
(7,000)
$
(4,000)
(a) Represents non-cash stock-based compensation expense.
(b) Represents costs associated with strategic shifts in our
business structure including exiting certain lines of business and
geographies. Associated costs include severance and other employee
separation costs, contract termination expenses and asset
impairment.
(c) Amounts related to litigation settlements.
(d) Represents expenses incurred for professional, consulting,
legal, and accounting services performed in connection with our
initial public offering, which are not indicative of our ongoing
costs and which were discontinued following the completion of our
initial public offering.
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