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Kidpik Reports Third Quarter 2021 Financial Results

Kidpik Corp. (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for its third quarter of 2021.

Quarter highlights:

  • Revenue, net: increased 20.3% to $5,574,099 compared to $4,634,529 in the third quarter of 2020.
  • Subscription box revenue, net: was 85.1% of total revenue in Q3 2021 or $4,745,933, compared to $4,016,696 in Q3 2020.
  • Gross Margin: was 58.2% compared to 59.3% in the third quarter of 2020
  • Shipped items: increased by 18.9% to 559,000 shipped items, compared to 470,000 shipped items in the third quarter of 2020
  • Average shipments keep rate: was 68.8% compared to 68.2% in the third quarter of 2020
  • Net Loss: was $1,189,356 or $(0.22) loss per share, compared to $978,251 or $(0.26) loss per share in the third quarter of 2020.

“We’re pleased to report Q3 and nine-month net sales of $5.6 million and $16.6 million, an increase of 20.3% and 49.5% respectively, with nine-month subscription-based recurring revenue of $14.2 million or 85.5% of total revenue,” said Ezra Dabah, CEO of Kidpik Corp. “Our performance was driven mainly by the introduction of boys’ subscription boxes, the continued growth of our girls’ subscriptions and the newly introduced toddler box collection.”

“We are happy to have completed an upsized IPO of $18 million and to be listed on Nasdaq after the quarter end,” continued Mr. Dabah. “Strengthening our balance sheet gives us the ability to make further investments in building our brand, growing our revenue, and driving shareholder value. We look forward to achieving our growth objectives by leveraging our merchandising expertise, the technology we have built, and the knowledge our team has gained over the last five years in the rapidly growing subscription industry.”

Revenue by Subscription (Measured for 39 weeks ended October 2, 2021)

Active Subscriptions (recurring boxes): increased 55.7% to $11.5 million

New Subscriptions (first boxes): increased 14.9% to $2.7 million

Total Subscriptions: increased 45.8% to $14.2 million or 85.5% of total revenue.

Balance Sheet and Cash Flow

  • Cash and cash equivalents at the end of the third quarter totaled $204,877 compared to $133,484 million at January 2, 2021. After quarter end, Kidpik completed an IPO, issuing 2,117,647 shares of common stock at a public offering price of $8.50 per share, resulting in aggregate net proceeds of approximately $16.1 million.
  • Line of credit at the end of the third quarter totaled $3.2 million, compared to $2.5 million at the end of fiscal year 2020. In November 2021, the Company paid in full the outstanding line of credit amount.
  • Net cash used in operating activities increased to $5,637,368 for the 39 weeks ended October 2, 2021, compared to $2,385,563 of cash used in operating activities during the 39 weeks ended September 26, 2020.

Kidpik Corp.

Condensed Interim Statements of Operations

(Unaudited)

 

 

 

For the 13 weeks ended

 

 

For the 39 weeks ended

 

 

 

October 2,

2021

 

 

September 26,

2020

 

 

October 2,

2021

 

 

September 26,

2020

 

Revenues, net

 

$

5,574,099

 

 

$

4,634,529

 

 

$

16,562,579

 

 

$

11,076,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

2,327,335

 

 

 

1,884,898

 

 

 

6,659,012

 

 

 

4,553,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

3,246,764

 

 

 

2,749,631

 

 

 

9,903,567

 

 

 

6,522,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shipping and handling

 

 

1,451,065

 

 

 

1,047,097

 

 

 

4,543,341

 

 

 

2,693,062

 

Payroll and related costs

 

 

1,023,241

 

 

 

753,222

 

 

 

2,953,993

 

 

 

2,045,415

 

General and administrative

 

 

2,169,283

 

 

 

1,790,401

 

 

 

6,318,183

 

 

 

4,301,533

 

Depreciation and amortization

 

 

5,226

 

 

 

13,770

 

 

 

21,355

 

 

 

58,063

 

Total operating expenses

 

 

4,648,815

 

 

 

3,604,490

 

 

 

13,836,872

 

 

 

9,098,073

 

Operating loss

 

 

(1,402,051

)

 

 

(854,859

)

 

 

(3,933,305

)

 

 

(2,575,895

)

Other (income) expenses

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

229,657

 

 

 

122,567

 

 

 

584,466

 

 

 

308,153

 

Other (income)/expense

 

 

(442,352

)

 

-

 

 

 

(429,045

)

 

 

10,000

 

Total other (income) expenses

 

 

(212,695

)

 

 

122,567

 

 

 

155,421

 

 

 

318,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before provision for income taxes

 

 

(1,189,356

)

 

 

(977,426

)

 

 

(4,088,726

)

 

 

(2,894,048

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

 

 

825

 

 

 

1,332

 

 

 

1,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,189,356

)

 

$

(978,251

)

 

$

(4,090,058

)

 

$

(2,895,170

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.22

)

 

$

(0.26

)

 

$

(0.77

)

 

$

(0.78

)

Diluted

 

$

(0.22

)

 

$

(0.26

)

 

$

(0.77

)

 

$

(0.78

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,500,187

 

 

 

3,735,457

 

 

 

5,300,308

 

 

 

3,735,457

 

Diluted

 

 

5,500,187

 

 

 

3,735,457

 

 

 

5,300,308

 

 

 

3,735,457

 

Kidpik Corp.

Condensed Interim Balance Sheets

 

 

 

October 2, 2021

(Unaudited)

 

 

January 2, 2021

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

204,877

 

 

$

133,484

 

Restricted cash

 

 

149,268

 

 

 

551,812

 

Accounts receivable

 

 

373,071

 

 

 

320,446

 

Inventory

 

 

8,604,004

 

 

 

7,480,072

 

Prepaid expenses and other current assets

 

 

1,115,264

 

 

 

822,580

 

Total current assets

 

 

10,446,484

 

 

 

9,308,394

 

 

 

 

 

 

 

 

 

 

Leasehold improvements and equipment, net

 

 

7,133

 

 

 

27,874

 

Intangible assets, net

 

 

 

 

 

614

 

Total assets

 

$

10,453,617

 

 

$

9,336,882

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,837,075

 

 

$

2,960,687

 

Due to related party

 

 

1,219,038

 

 

 

599,811

 

Accrued expenses and other current liabilities

 

 

507,985

 

 

 

690,049

 

Advance payable

 

 

1,196,742

 

 

 

829,030

 

Loan payable, current portion

 

 

 

 

 

91,429

 

Short-term debt, related party

 

 

1,300,000

 

 

 

-

 

Line of credit

 

 

3,200,000

 

 

 

2,032,118

 

Total current liabilities

 

 

10,260,840

 

 

 

7,203,124

 

 

 

 

 

 

 

 

 

 

Loan payable, less current portion

 

 

 

 

 

350,923

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

10,260,840

 

 

 

7,554,047

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock (par value $0.001, 25,000,000 shares authorized, of which no shares are issued and outstanding as of October 2, 2021 and January 2, 2021)

 

 

-

 

 

 

-

 

Common stock (par value $0.001, 75,000,000 shares authorized, of which 5,500,187 and 5,075,444 shares are issued and outstanding as of October 2, 2021 and January 2, 2021)

 

 

5,500

 

 

 

5,075

 

Additional paid-in capital

 

 

32,248,972

 

 

 

29,749,397

 

Accumulated stockholders’ deficit

 

 

(32,061,695

)

 

 

(27,971,637

)

Total stockholders’ equity

 

 

192,777

 

 

 

1,782,835

 

Total liabilities and stockholders’ equity

 

$

10,453,617

 

 

$

9,336,882

 

Kidpik Corp.

Condensed Interim Statements of Cash Flows

(Unaudited)

 

 

 

For the 39 weeks ended

 

 

 

October 2, 2021

 

 

September 26, 2020

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(4,090,058

)

 

$

(2,895,170

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

21,355

 

 

 

58,062

 

Amortization of debt issuance costs

 

 

29,377

 

 

 

20,955

 

Forgiveness of loan payable

 

 

(442,352)

 

 

 

-

 

Bad debt expense

 

 

614,239

 

 

 

348,236

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(666,864

)

 

 

(320,236

)

Inventory

 

 

(1,123,932

)

 

 

(482,361

)

Prepaid expenses and other current assets

 

 

(292,684

)

 

 

(116,957

)

Accounts payable

 

 

(123,612

)

 

 

660,541

 

Accounts payable, related parties

 

 

619,227

 

 

 

309,747

 

Accrued expenses and other current liabilities

 

 

(182,064

)

 

 

31,620

Net cash used in operating activities

 

 

(5,637,368

)

 

 

(2,385,563

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchases of leasehold improvements and equipment

 

 

-

 

 

 

(7,683

)

Net cash used in investing activities

 

 

-

 

 

 

(7,683

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of long-term debt from related party

 

 

2,000,000

 

 

 

1,000,000

 

Proceeds from issuance of common stock

 

 

500,000

 

 

 

-

 

Net proceeds (repayments) from line of credit

 

 

1,138,505

 

 

 

(63,365

)

Net proceeds (repayments) from advance payable

 

 

367,712

 

 

 

(274,374

)

Proceeds from loan payable

 

 

-

 

 

 

442,352

 

Proceeds from loan payable related party

 

 

1,300,000

 

 

 

810,000

 

Net cash provided by financing activities

 

 

5,306,217

 

 

 

1,914,613

 

Net decrease in cash and restricted cash

 

 

(331,151

)

 

 

(478,633

)

 

 

 

 

 

 

 

 

 

Cash and restricted cash, beginning of period

 

 

685,296

 

 

 

631,320

 

Cash and restricted cash, end of period

 

$

354,145

 

 

$

152,687

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash and restricted cash:

 

 

 

 

 

 

 

 

Cash

 

$

204,877

 

 

$

99,297

 

Restricted cash

 

 

149,268

 

 

 

53,390

 

 

 

$

354,145

 

 

$

152,687

 

Supplemental disclosure of cash flow data:

 

 

 

 

 

 

 

 

Interest paid

 

$

500,905

 

 

$

291,056

 

Taxes paid

 

$

1,332

 

 

$

297

 

Supplemental disclosure of noncash financing activities:

 

 

 

 

 

 

 

 

Conversion of shareholder debt

 

$

2,000,000

 

 

$

-

 

Revenue, net

The Company’s revenue, net is disaggregated based on the following categories:

 

 

For the 13 weeks ended

 

 

For the 39 weeks ended

 

 

 

October 2, 2021

 

 

September 26, 2020

 

 

October 2, 2021

 

 

September 26, 2020

 

Subscription boxes

 

$

4,745,933

 

 

 

4,016,696

 

 

$

14,163,217

 

 

$

9,712,382

Amazon sales

 

 

568,947

 

 

 

485,599

 

 

 

1,893,814

 

 

 

1,064,678

Online website sales

 

 

259,219

 

 

 

132,234

 

 

 

505,548

 

 

 

298,950

Total revenue

 

$

5,574,099

 

 

$

4,634,529

 

 

$

16,562,579

 

 

$

11,076,010

Gross Margin

Gross profit is equal to our net sales (revenues, net) less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight in, defective merchandise returned from customers, receiving costs, inventory write-offs, and other miscellaneous shrinkage.

 

 

For the 13 weeks ended

 

 

For the 39 weeks ended

 

 

 

October 2, 2021

 

 

September 26, 2020

 

 

October 2, 2021

 

 

September 26, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

58.2

%

 

 

59.3

%

 

 

59.8

%

 

 

58.9

%

Shipped Items

We define shipped items as the total number of items shipped in a given period to our customers through our active subscription, Amazon and online website sales.

 

 

For the 13 weeks ended

 

 

For the 39 weeks ended

 

 

 

(In thousands)

 

 

(In thousands)

 

 

 

October 2, 2021

 

 

September 26, 2020

 

 

October 2, 2021

 

 

September 26, 2020

 

 

 

 

 

 

 

 

 

 

Shipped Items

 

 

559

 

 

 

470

 

 

 

1,680

 

 

 

1,139

 

Average Shipment Keep Rate

Average shipment keep rate is calculated as the total number of items kept by our customers divided by total number of shipped items in a given period.

 

 

For the 13 weeks ended

 

 

For the 39 weeks ended

 

 

 

October 2, 2021

 

 

September 26, 2020

 

 

October 2, 2021

 

 

September 26, 2020

 

 

 

 

 

 

 

 

 

 

 

Average Shipment Keep Rate

 

 

68.8

%

 

 

68.2

%

 

 

68.5

%

 

 

67.0

%

Revenue by Channel

 

 

13 weeks ended

October 2, 2021

 

 

13 weeks ended

September 26, 2020

 

 

Change ($)

 

 

Change (%)

 

Revenue by channel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription boxes

 

$

4,745,933

 

 

 

4,016,696

 

 

 

729,237

 

 

 

18.2

%

Amazon sales

 

 

568,947

 

 

 

485,599

 

 

 

83,348

 

 

 

17.2

%

Online website sales

 

 

259,219

 

 

 

132,234

 

 

 

126,985

 

 

 

96.0

%

Total revenue

 

$

5,574,099

 

 

$

4,634,529

 

 

$

939,570

 

 

 

20.3

%

 

39 weeks ended

October 2, 2021

 

 

39 weeks ended

September 26, 2020

 

 

Change ($)

 

 

Change (%)

 

Revenue by channel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription boxes

 

$

14,163,217

 

 

$

9,712,382

 

 

$

4,450,835

 

 

 

45.8

%

Amazon sales

 

 

1,893,814

 

 

 

1,064,678

 

 

 

829,136

 

 

 

77.9

%

Online website sales

 

 

505,548

 

 

 

298,950

 

 

 

206,598

 

 

 

69.1

%

Total revenue

 

$

16,562,579

 

 

$

11,076,010

 

 

$

5,486,569

 

 

 

49.5

%

Subscription Boxes Revenue

 

39 weeks ended

October 2, 2021

 

 

39 weeks ended

September 26, 2020

 

 

Change ($)

 

 

Change (%)

 

Subscription boxes revenue from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active subscriptions – recurring boxes

 

$

11,474,502

 

 

$

7,371,851

 

 

$

4,102,652

 

 

 

55.7

%

New subscriptions - first box

 

 

2,688,715

 

 

 

2,340,531

 

 

 

348,183

 

 

 

14.9

%

Total Subscription boxes revenue

 

$

14,163,217

 

 

$

9,712,382

 

 

$

4,450,835

 

 

 

45.8

%

Revenue by Product Line

 

13 weeks ended

October 2, 2021

 

 

13 weeks ended

September 26, 2020

 

 

Change ($)

 

 

Change (%)

 

Revenue by product line

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Girls’ apparel

 

$

4,189,538

 

 

$

3,941,463

 

 

$

248,075

 

 

 

6.3

%

Boys’ apparel

 

 

1,111,509

 

 

 

693,066

 

 

 

418,443

 

 

 

60.4

%

Toddlers’ apparel

 

 

273,052

 

 

 

-

 

 

 

273,052

 

 

 

n/a

%

Total revenue

 

$

5,574,099

 

 

$

4,634,529

 

 

$

939,570

 

 

 

20.3

%

 

39 weeks ended

October 2, 2021

 

 

39 weeks ended

September 26, 2020

 

 

Change ($)

 

 

Change (%)

 

Revenue by product line

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Girls’ apparel

 

$

12,647,081

 

 

$

10,374,374

 

 

$

2,272,707

 

 

 

21.9

%

Boys’ apparel

 

 

3,341,419

 

 

 

701,636

 

 

 

2,639,783

 

 

 

376.2

%

Toddlers’ apparel

 

 

574,079

 

 

 

-

 

 

 

574,079

 

 

 

n/a

%

Total revenue

 

$

16,562,579

 

 

$

11,076,010

 

 

$

5,486,569

 

 

 

49.5

%

Earnings Call Information:

Today at 4:30pm ET a live webcast will be accessible at the following link on the investor relations section of the KIDPIK website at https://investor.kidpik.com. Analysts and investors may also call in by dialing (877)-545-0320 or (973)-528-0002 for international callers, conference ID 315694.

A replay of the conference call will be available approximately two hours after the conclusion of the call on the investor relations section of the KIDPIK website at https://investor.kidpik.com or by dialing (877)-481-4010 or (919)-882-2331 for international callers, conference ID 43975. The replay will be available until December 28, 2021.

About Kidpik Corp.

Founded in 2016, KIDPIK (NASDAQ:PIK) is an online clothing subscription box for kids, offering mix-&-match, expertly styled outfits that are curated based on each member’s style preferences. KIDPIK delivers a surprise box monthly or seasonally, providing an effortless shopping experience for parents and a fun discovery for kids. Each seasonal collection is designed in-house by a team with decades of experience designing childrenswear. KIDPIK combines the expertise of fashion stylists with proprietary data and technology to translate kids' unique style preferences into surprise boxes of curated outfits. We also sell our branded clothing and footwear through our e-commerce website, shop.kidpik.com. For more information, visit www.kidpik.com.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to the Company on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the “Risk Factors” section of the Company's Registration Statement and preliminary prospectus for the offering filed with the SEC. Thus, actual results could be materially different. The Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

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