Katapult Holdings, Inc. (“Katapult” or the “Company”) (NASDAQ:
KPLT), an e-commerce-focused financial technology company, today
reported its financial results for the third quarter ended
September 30, 2022.
Third Quarter 2022 Financial and Operational
Highlights:
- Recorded total revenue of $50.3
million in third quarter 2022 compared to $71.7 million in the
prior year, a decrease of $21.4 million. $5.4 million of this
decline was attributable to the Company’s adoption of ASC 842 as of
January 1, 2022.
- Entered into an exclusive
partnership with Transform SR Holding Management LLC (“Sears”),
which operates over 140 stores and online formats, including Sears
Home Town, Sears Home Appliance Showrooms, Sears Home and Life and
Sears full-line stores, as well as Sears.com.
- Successfully launched our Katapult
Mobile App and Katapult Pay™ with virtual credit card technology,
driving new opportunities for consumers to access Katapult at high
quality retailers. To date, since our launch beginning in September
2022, we have already originated over 2,000 leases and over $2
million of gross originations with Katapult Pay™.
- In addition to Sears, added 23 new
merchant partners and launched 20 merchants on Katapult Pay™.
- Enterprise wins of 1StopBedrooms,
SimpleTire, and iBUYPOWER.
- Continued high customer
satisfaction with a Net Promoter Score of 58 as of September 30,
2022. More than 46% of gross originations for the third
quarter of 2022 came from repeat customers (customers who have
originated more than one lease with Katapult over their
lifetime).
- Ended Q3 2022 with $77.2 million of
unrestricted cash on the balance sheet and $74.8 million available
on the asset-backed revolving line of credit.
“Though our retailers and consumers continue
facing near-term macro headwinds, we remain focused on capturing
new volume opportunities from a very large addressable market.
During the quarter, we executed several aspects of our strategic
growth plan as we successfully launched our mobile app and Katapult
Pay, our virtual credit card solution. In addition, we are pleased
to announce our new exclusive partnership with Sears. From its
inception, Sears has pioneered solutions that have put its members
first to create a superior shopping experience via exceptional
customer service, convenience, and access to the best name brands.
Like us, Sears and its affiliates also believe in providing
nonprime consumers with a path to purchase the high-quality,
durable goods they need, without having to compromise on quality
and choice. We are confident that this key partnership will allow
more consumers in a variety of financial situations to get the
items and positive shopping experience they may have been excluded
from previously,” said Orlando Zayas, CEO of Katapult.
Third Quarter 2022 Results
(Comparisons are to the respective periods of
the prior year unless otherwise noted.)
The Company recorded third quarter revenue of
$50.3 million, which was down $21.4 million compared to the third
quarter of the prior year. Gross originations for the third quarter
were $44.1 million, a 28% decline from the prior year due to
ongoing macro challenges, including record levels of inflation,
supply chain headwinds and the end of government stimulus, which
have led to declining consumer confidence and spending, combined
with the Company proactively tightening lease underwriting in
response to credit performance normalizing.
Net loss was $8.2 million for the third quarter
2022, including a $0.4 million revaluation gain related to our
warrants. Adjusted net loss was $6.7 million for the third quarter,
which is up from adjusted net loss of $4.5 million in the prior
year period. Adjusted EBITDA was $(2.3) million for the third
quarter 2022, down from $0.1 million in the prior year period,
which reflects lower lease margins year-over-year and higher
professional and consulting fees in the third quarter of 2022.
Katapult CEO, Orlando Zayas, Katapult CFO,
Karissa Cupito, and Katapult COO, Derek Medlin will discuss the
Company’s performance, outlook and overall growth strategy in
greater detail on the company's earnings conference call and
webcast.
Conference Call and Webcast
Katapult will host a conference call and webcast
at 8:00 AM ET on November 9, 2022 to discuss these financial
results, our current outlook and our growth strategy.
A live audio webcast of the event will be
available on the Katapult Investor Relations website at
http://ir.katapultholdings.com/. A copy of the earnings call
presentation will also be posted to our website.
A live dial-in will be available at (800)
715-9871 (domestic) or (646) 307-1963 (international). The
conference ID number is 2467778. Shortly after the conclusion of
the call, a replay of this conference call will be available on the
Katapult Investor Relations website at
https://ir.katapultholdings.com/news-events/investor-calendar.
About Katapult
Katapult is a next generation platform for
digital and mobile-first commerce for the non-prime consumer.
Katapult provides point of sale lease purchase options for
consumers challenged with accessing traditional financial products
who are seeking to obtain everyday durable goods. The Company has
developed a sophisticated end-to-end technology platform that
enables seamless integration with merchants, underwriting
capabilities that exceed the industry standard, and exceptional
customer experiences.Forward-Looking
Statements
Certain statements included in this Press
Release that are not historical facts are forward-looking
statements for purposes of the safe harbor provisions under the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally are accompanied by words such
as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,”
“intend,” “expect,” “should,” “would,” “plan,” “predict,”
“potential,” “seem,” “seek,” “future,” “outlook,” and similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. These
forward-looking statements include, but are not limited to,
statements regarding our ability to weather the macroeconomic
headwinds and our momentum in building volume opportunities in our
addressable market and the benefits and opportunities of the
Company’s partnership with Sears. These statements are based on
various assumptions, whether or not identified in this Press
Release, and on the current expectations of Katapult’s management
and are not predictions of actual performance.
These forward-looking statements are provided
for illustrative purposes only and are not intended to serve as, a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of Katapult.
These forward-looking statements are subject to a number of risks
and uncertainties, including execution of Katapult’s business
strategy, launching new product offerings, new brands and expanding
information and technology capabilities; Katapult’s market
opportunity and its ability to acquire new customers and retain
existing customers; the timing and impact of our growth initiatives
on our future financial performance and the impact of our new
executive hires and brand strategy; anticipated occurrence and
timing of prime lending tightening and impact on our results of
operations; adoption and success of our mobile application and
virtual credit card solution, Katapult Pay™, general economic
conditions in the markets where Katapult operates, the cyclical
nature of consumer spending, and seasonal sales and spending
patterns of customers; failure to realize the anticipated benefits
of the business combination with FinServ Acquisition Corp. (the
“Merger”); risks relating to factors affecting consumer spending
that are not under Katapult’s control, including, among others,
levels of employment, disposable consumer income, inflation,
prevailing interest rates, consumer debt and availability of
credit, pandemics (such as COVID-19), consumer confidence in future
economic conditions and political conditions, and consumer
perceptions of personal well-being and security; risks relating to
uncertainty of Katapult’s estimates of market opportunity and
forecasts of market growth; risks related to the concentration of a
significant portion of our transaction volume with a single
merchant partner, or type of merchant or industry; the effects of
competition on Katapult’s future business; the impact of the
COVID-19 pandemic and its effect on Katapult’s business; unstable
market and economic conditions, including as a result of the
conflict involving Russia and Ukraine; reliability of Katapult’s
platform and effectiveness of its risk model; protection of
confidential, proprietary or sensitive information, including
confidential information about consumers, and privacy or data
breaches, including by cyber-attacks or similar disruptions;
ability to attract and retain employees, executive officers or
directors; meeting future liquidity requirements and complying with
restrictive covenants related to long-term indebtedness;
effectively respond to general economic and business conditions;
obtain additional capital, including equity or debt financing;
enhance future operating and financial results; anticipate rapid
technological changes; comply with laws and regulations applicable
to Katapult’s business, including laws and regulations related to
rental purchase transactions; stay abreast of modified or new laws
and regulations applying to Katapult’s business, including rental
purchase transactions and privacy regulations; maintain
relationships with merchant partners; respond to uncertainties
associated with product and service developments and market
acceptance; anticipate the impact of new U.S. federal income tax
law; that Katapult has identified material weaknesses in its
internal control over financial reporting which, if not remediated,
could affect the reliability of its consolidated financial
statements; successfully defend litigation; litigation, regulatory
matters, complaints, adverse publicity and/or misconduct by
employees, vendors and/or service providers; and other events or
factors, including those resulting from civil unrest, war, foreign
invasions (including the conflict involving Russia and Ukraine),
terrorism, or public health crises, or responses to such events);
and those factors discussed in greater detail in the section
entitled “Risk Factors” in Katapult’s periodic reports filed with
the Securities and Exchange Commission (“SEC”), including
Katapult’s Quarterly Reports on Form 10-Q for the quarter ended
March 31, 2022 and June 30, 2022, respectively, and the Quarterly
Report on Form 10-Q Katapult intends to file for the quarter ended
September 30, 2022.
If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that Katapult does not presently know or
that Katapult currently believes are immaterial that could also
cause actual results to differ from those contained in the
forward-looking statements. Undue reliance should not be placed on
the forward-looking statements in this Press Release. All
forward-looking statements contained herein are based on
information available to Katapult as of the date hereof, and
Katapult does not assume any obligation to update these statements
as a result of new information or future events, except as required
by law.
Key Performance Metrics
Katapult regularly reviews several metrics,
including the following key metrics, to evaluate its business,
measure its performance, identify trends affecting our business,
formulate financial projections and make strategic decisions, which
may also be useful to an investor: Gross Originations, Total
Revenue, Unearned Revenue and Gross Profit.
Gross Originations are defined as the retail
price of the merchandise associated with lease-purchase agreements
entered into during the period through the Katapult platform. Gross
Originations do not represent revenue earned. However, we believe
this is a useful operating metric for both Katapult’s management
and investors to use in assessing the volume of transactions that
take place on Katapult’s platform.
Total revenue represents the summation of rental
revenue and other revenue. Unearned revenue represents the
Company’s liability for cash received from customers prior to the
related revenue being earned. Katapult measures these metrics to
assess the total view of paythrough performance of its customers.
Management believes looking at these components is useful to an
investor as it helps to understand the total payment performance of
customers. In connection with the adoption of ASU No. 2016-02,
Leases (Topic 842), as amended (“ASC 842”), effective January 1,
2022, Katapult recognizes revenue from customers (rental revenue)
when the revenue is earned and the cash is collected. Accordingly,
the Company no longer records rental revenue arising from lease
payments earned but not yet collected nor any corresponding bad
debt expense, nor discloses bad debt recoveries in its periodic
reports starting in the first quarter of 2022.
Gross profit represents total revenue less cost
of revenue, and is a measure presented in accordance with generally
accepted accounting principles in the United States ("GAAP"). See
the “Non-GAAP Financial Measures” section below for a presentation
of this measure alongside adjusted gross profit, which is a
non-GAAP measure utilized by management.
Non-GAAP Financial Measures
To supplement the financial measures presented
in this press release and related conference call or webcast in
accordance with GAAP, the Company also presents the following
non-GAAP and other measures of financial performance: adjusted
gross profit, adjusted EBITDA, and adjusted net (loss) income. The
Company urges investors to consider non-GAAP measures only in
conjunction with its GAAP financials and to review the
reconciliation of the Company’s non-GAAP financial measures to its
comparable GAAP financial measures, which are included in this
press release.
Adjusted gross profit represents gross profit
less variable operating expenses, which are servicing costs,
underwriting fees, and bad debt expense. Management believes that
adjusted gross profit provides a meaningful understanding of one
aspect of its performance specifically attributable to total
revenue and the variable costs associated with total revenue.
Adjusted EBITDA is a non-GAAP measure that is
defined as net loss before interest expense and other fees,
interest income, change in fair value of warrant liability,
provision for income taxes, depreciation and amortization on
property and equipment and capitalized software, impairment of
leased assets, stock-based compensation expense, and transaction
costs associated with the Merger.
Adjusted net (loss) income is a non-GAAP measure
that is defined as net loss before change in fair value of warrant
liability, stock-based compensation expense and transaction costs
associated with the Merger.
Adjusted gross profit, adjusted EBITDA and
adjusted net (loss) income are useful to an investor in evaluating
the Company’s performance because these measures:
- Are widely used to measure a company’s operating
performance;
- Are financial measurements that are used by rating agencies,
lenders and other parties to evaluate the Company’s credit
worthiness; and
- Are used by the Company’s management for various purposes,
including as measures of performance and as a basis for strategic
planning and forecasting.
Management believes the use of non-GAAP
financial measures, as a supplement to GAAP measures, is useful to
investors in that they eliminate items that are either not part of
our core operations or do not require a cash outlay, such as
stock-based compensation expense. Management uses these non-GAAP
financial measures when evaluating operating performance and for
internal planning and forecasting purposes. Management believes
that these non-GAAP financial measures help indicate underlying
trends in the business, are important in comparing current results
with prior period results, and are useful to investors and
financial analysts in assessing operating performance. However,
these non-GAAP measures exclude items that are significant in
understanding and assessing Katapult’s financial results.
Therefore, these measures should not be considered in isolation or
as alternatives to revenue, net (loss) income, cash flows from
operations or other measures of profitability, liquidity or
performance under GAAP. You should be aware that Katapult’s
presentation of these measures may not be comparable to similarly
titled measures used by other companies.
ASC 842 Adoption
The Company was required to adopt ASC 842
relating to lessor accounting, effective January 1, 2022. The
Company's lease-to-own agreements, which comprise the majority of
the Company’s revenue, fall within the scope of ASC 842 and are
impacted by this change. As a result of the adoption, the Company
now recognizes revenue from customers when revenue is earned and
cash is collected instead of on an accrual basis, which it has done
historically. The Company has adopted ASC 842 using the transition
method, which permits the Company to not apply ASC 842 for
comparative periods in the year of adoption. As a result, the
Company is not recasting or restating 2021 or prior periods to
conform to ASC 842. The adoption of ASC 842 is reflected in the
Company’s financial statements and related notes and periodic
reports filed with the SEC beginning with the Company’s quarterly
report on Form 10-Q for the quarter ended March 31, 2022.
For illustrative purposes only, the Company is
disclosing total revenue, bad debt expense (net of recoveries) and
income (loss) before provision for income taxes for each quarter
during years ended December 31, 2021 and 2020, respectively, as if
the lessor accounting impacts of ASC 842 were in effect for these
periods. “Total revenue”, “bad debt expense (net of recoveries)”
and “income before provision for income taxes” for 2021 and 2020
are supplemental disclosures that are not calculated in accordance
with GAAP in place during these periods.
Management believes the supplemental information
showing the impact of ASC 842 for 2021 and 2020 provides relevant
and useful information for users of the Company’s financial
statements, as it provides comparability with the financial results
the Company is reporting beginning in 2022 when ASC 842 became
effective and the Company began to recognize revenue from customers
when the revenue is earned and cash is collected. Upon adoption,
the Company no longer records accounts receivable arising from
lease receivables due from customers incurred during the normal
course of business for lease payments earned but not yet received
from the customer or any corresponding allowance for doubtful
accounts.
Contacts
Katapult Vice President of Investor RelationsBill
Wright917-750-0346bill.wright@katapult.com
Press Inquiries:Allison +
Partners908-566-2090katapult@allisonpr.com
KATAPULT HOLDINGS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)(amounts in thousands, except share and per
share amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Revenue |
|
|
|
|
|
|
|
Rental revenue |
$ |
49,260 |
|
|
$ |
71,671 |
|
|
$ |
160,075 |
|
|
$ |
229,533 |
|
Other revenue |
|
1,081 |
|
|
|
39 |
|
|
|
3,183 |
|
|
|
281 |
|
Total revenue |
|
50,341 |
|
|
|
71,710 |
|
|
|
163,258 |
|
|
|
229,814 |
|
Cost of revenue |
|
38,417 |
|
|
|
53,351 |
|
|
|
131,379 |
|
|
|
162,155 |
|
Gross profit |
|
11,924 |
|
|
|
18,359 |
|
|
|
31,879 |
|
|
|
67,659 |
|
Operating expenses: |
|
|
|
|
|
|
|
Servicing costs |
|
1,025 |
|
|
|
1,141 |
|
|
|
3,362 |
|
|
|
3,351 |
|
Underwriting fees |
|
419 |
|
|
|
456 |
|
|
|
1,330 |
|
|
|
1,400 |
|
Professional and consulting fees |
|
2,697 |
|
|
|
1,276 |
|
|
|
8,244 |
|
|
|
4,134 |
|
Technology and data analytics |
|
2,421 |
|
|
|
2,131 |
|
|
|
7,286 |
|
|
|
6,024 |
|
Bad debt expense |
|
— |
|
|
|
5,936 |
|
|
|
— |
|
|
|
18,849 |
|
Compensation costs |
|
6,752 |
|
|
|
6,475 |
|
|
|
18,599 |
|
|
|
23,812 |
|
General and administrative |
|
3,276 |
|
|
|
3,569 |
|
|
|
10,733 |
|
|
|
7,255 |
|
Total operating expenses |
|
16,590 |
|
|
|
20,984 |
|
|
|
49,554 |
|
|
|
64,825 |
|
(Loss) income from
operations |
|
(4,666 |
) |
|
|
(2,625 |
) |
|
|
(17,675 |
) |
|
|
2,834 |
|
Interest expense and other fees |
|
(4,018 |
) |
|
|
(4,176 |
) |
|
|
(11,612 |
) |
|
|
(12,462 |
) |
Interest income |
|
223 |
|
|
|
— |
|
|
|
223 |
|
|
|
— |
|
Change in fair value of warrant liability |
|
381 |
|
|
|
21,349 |
|
|
|
5,793 |
|
|
|
24,160 |
|
(Loss) income before income
taxes |
|
(8,080 |
) |
|
|
14,548 |
|
|
|
(23,271 |
) |
|
|
14,532 |
|
Provision for income taxes |
|
(73 |
) |
|
|
(808 |
) |
|
|
(173 |
) |
|
|
(805 |
) |
Net (loss) income |
$ |
(8,153 |
) |
|
$ |
13,740 |
|
|
$ |
(23,444 |
) |
|
$ |
13,727 |
|
Net (loss) income per
share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.08 |
) |
|
$ |
0.14 |
|
|
$ |
(0.24 |
) |
|
$ |
0.23 |
|
Diluted |
$ |
(0.08 |
) |
|
$ |
0.13 |
|
|
$ |
(0.24 |
) |
|
$ |
0.19 |
|
Weighted average shares used
in computing net (loss) income per share: |
|
|
|
|
|
|
|
Basic |
|
98,398,769 |
|
|
|
97,082,182 |
|
|
|
98,158,426 |
|
|
|
58,826,335 |
|
Diluted |
|
98,398,769 |
|
|
|
105,605,479 |
|
|
|
98,158,426 |
|
|
|
72,208,593 |
|
|
KATAPULT HOLDINGS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(amounts in thousands, except share and per share
amounts)
|
September 30, |
|
December 31, |
|
2022 |
|
2021 |
ASSETS |
(Unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
77,162 |
|
|
$ |
92,494 |
|
Restricted cash |
|
4,412 |
|
|
|
3,937 |
|
Accounts receivable, net of allowance for doubtful accounts of
$6,248 at December 31, 2021 |
|
— |
|
|
|
2,007 |
|
Property held for lease, net of accumulated depreciation and
impairment |
|
42,195 |
|
|
|
61,752 |
|
Prepaid expenses and other current assets |
|
4,630 |
|
|
|
4,249 |
|
Total current assets |
|
128,399 |
|
|
|
164,439 |
|
Property and equipment,
net |
|
600 |
|
|
|
576 |
|
Security deposits |
|
91 |
|
|
|
91 |
|
Capitalized software and
intangible assets, net |
|
1,894 |
|
|
|
1,056 |
|
Right-of-use assets |
|
868 |
|
|
|
— |
|
Total assets |
$ |
131,852 |
|
|
$ |
166,162 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,901 |
|
|
$ |
2,029 |
|
Accrued liabilities |
|
11,972 |
|
|
|
11,959 |
|
Unearned revenue |
|
1,497 |
|
|
|
2,135 |
|
Lease liabilities |
|
419 |
|
|
|
— |
|
Total current liabilities |
|
16,789 |
|
|
|
16,123 |
|
Revolving line of credit |
|
49,783 |
|
|
|
61,238 |
|
Long term debt |
|
43,299 |
|
|
|
40,661 |
|
Other liabilities |
|
1,548 |
|
|
|
7,341 |
|
Lease liabilities,
non-current |
|
515 |
|
|
|
— |
|
Total liabilities |
|
111,934 |
|
|
|
125,363 |
|
STOCKHOLDERS' EQUITY |
|
|
|
Common stock, $.0001 par value-- 250,000,000 shares authorized;
98,435,950 and 97,574,171 shares issued and outstanding at
September 30, 2022 and December 31, 2021, respectively |
|
10 |
|
|
|
10 |
|
Additional paid-in capital |
|
82,157 |
|
|
|
77,632 |
|
Accumulated deficit |
|
(62,249 |
) |
|
|
(36,843 |
) |
Total stockholders' equity |
|
19,918 |
|
|
|
40,799 |
|
Total liabilities and stockholders' equity |
$ |
131,852 |
|
|
$ |
166,162 |
|
|
KATAPULT HOLDINGS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)(amounts in thousands)
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
Cash flows from operating
activities: |
|
|
|
Net (loss) income |
$ |
(23,444 |
) |
|
$ |
13,727 |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
89,093 |
|
|
|
108,977 |
|
Net book value of property buyouts |
|
24,783 |
|
|
|
34,530 |
|
Impairment expense |
|
11,928 |
|
|
|
11,115 |
|
Bad debt expense |
|
— |
|
|
|
18,849 |
|
Change in fair value of warrants liability |
|
(5,793 |
) |
|
|
(24,160 |
) |
Stock-based compensation |
|
4,753 |
|
|
|
12,862 |
|
Amortization of debt discount |
|
1,130 |
|
|
|
2,068 |
|
Amortization of debt issuance costs |
|
271 |
|
|
|
268 |
|
Accrued PIK Interest |
|
1,508 |
|
|
|
1,153 |
|
Amortization of right-of-use assets |
|
271 |
|
|
|
— |
|
Change in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
— |
|
|
|
(19,123 |
) |
Property held for lease |
|
(105,741 |
) |
|
|
(152,811 |
) |
Prepaid expenses and other current assets |
|
(382 |
) |
|
|
(3,820 |
) |
Accounts payable |
|
872 |
|
|
|
674 |
|
Accrued liabilities |
|
159 |
|
|
|
(1,238 |
) |
Lease liabilities |
|
(306 |
) |
|
|
— |
|
Unearned revenues |
|
(638 |
) |
|
|
(331 |
) |
Net cash (used in) provided by operating activities |
|
(1,536 |
) |
|
|
2,740 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of property and equipment |
|
(164 |
) |
|
|
(267 |
) |
Additions to capitalized software |
|
(1,203 |
) |
|
|
(684 |
) |
Net cash used in investing activities |
|
(1,367 |
) |
|
|
(951 |
) |
Cash flows from financing
activities: |
|
|
|
Principal repayments on revolving line of credit |
|
(21,661 |
) |
|
|
(12,895 |
) |
Principal advances on revolving line of credit, net of issuance
costs |
|
9,935 |
|
|
|
5,809 |
|
Repurchases of restricted stock |
|
(293 |
) |
|
|
— |
|
Proceeds from exercise of stock options |
|
65 |
|
|
|
629 |
|
PIPE proceeds |
|
— |
|
|
|
150,000 |
|
Merger financing, net of redemptions |
|
— |
|
|
|
251,109 |
|
Consideration paid to selling shareholders |
|
— |
|
|
|
(329,560 |
) |
Transaction costs paid |
|
— |
|
|
|
(33,534 |
) |
Net cash (used in) provided by financing activities |
|
(11,954 |
) |
|
|
31,558 |
|
Net (decrease) increase in
cash, cash equivalents and restricted cash |
|
(14,857 |
) |
|
|
33,347 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
96,431 |
|
|
|
69,597 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
81,574 |
|
|
$ |
102,944 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for interest |
$ |
7,954 |
|
|
$ |
8,801 |
|
Cash paid for income taxes |
$ |
362 |
|
|
$ |
— |
|
Right-of-use assets obtained in exchange for operating lease
liabilities |
$ |
1,139 |
|
|
$ |
— |
|
Cash paid for operating leases |
$ |
382 |
|
|
$ |
— |
|
Assumed warrant liability in connection with the Merger |
$ |
— |
|
|
$ |
44,272 |
|
Exercise of common stock warrant accounted for as a liability |
$ |
— |
|
|
$ |
13,102 |
|
|
KATAPULT HOLDINGS, INC.RECONCILIATION
OF NON-GAAP MEASURES AND CERTAIN OTHER DATA
(UNAUDITED)(amounts in
thousands)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
2022 |
|
2021 |
2022 |
|
2021 |
Total revenue |
$ |
50,341 |
|
$ |
71,710 |
$ |
163,258 |
|
$ |
229,814 |
Cost of revenue |
|
38,417 |
|
|
53,351 |
|
131,379 |
|
|
162,155 |
Gross profit |
|
11,924 |
|
|
18,359 |
|
31,879 |
|
|
67,659 |
Less: |
|
|
|
|
|
|
Servicing costs |
|
1,025 |
|
|
1,141 |
|
3,362 |
|
|
3,351 |
Underwriting fees |
|
419 |
|
|
456 |
|
1,330 |
|
|
1,400 |
Bad debt expense |
|
— |
|
|
5,936 |
|
— |
|
|
18,849 |
Adjusted gross profit |
$ |
10,480 |
|
$ |
10,826 |
$ |
27,187 |
|
$ |
44,059 |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net (loss) income |
$ |
(8,153 |
) |
|
$ |
13,740 |
|
|
$ |
(23,444 |
) |
|
$ |
13,727 |
|
Add back: |
|
|
|
|
|
|
|
Interest expense and other fees |
|
4,018 |
|
|
|
4,176 |
|
|
|
11,612 |
|
|
|
12,462 |
|
Interest income |
|
(223 |
) |
|
|
— |
|
|
|
(223 |
) |
|
|
— |
|
Change in fair value of warrant liability |
|
(381 |
) |
|
|
(21,349 |
) |
|
|
(5,793 |
) |
|
|
(24,160 |
) |
Provision for income taxes |
|
73 |
|
|
|
808 |
|
|
|
173 |
|
|
|
805 |
|
Depreciation on property and equipment and amortization of
capitalized software |
|
198 |
|
|
|
99 |
|
|
|
506 |
|
|
|
217 |
|
Impairment of leased assets |
|
361 |
|
|
|
(449 |
) |
|
|
677 |
|
|
|
(1,089 |
) |
Stock-based compensation expense (1) |
|
1,807 |
|
|
|
3,097 |
|
|
|
4,753 |
|
|
|
13,317 |
|
Transaction costs associated with Merger (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,350 |
|
Adjusted EBITDA |
$ |
(2,300 |
) |
|
$ |
122 |
|
|
$ |
(11,739 |
) |
|
$ |
18,629 |
|
(1) Includes employer payroll taxes.(2) Consists of
non-capitalizable transaction cost associated with the Merger
during the three and nine months ended September 30, 2021.
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
2022 |
|
2021 |
2022 |
|
2021 |
Net (loss) income |
$ |
(8,153 |
) |
|
$ |
13,740 |
|
$ |
(23,444 |
) |
|
$ |
13,727 |
|
Add back: |
|
|
|
|
|
|
Change in fair value of warrant liability |
|
(381 |
) |
|
|
(21,349 |
) |
|
(5,793 |
) |
|
|
(24,160 |
) |
Stock-based compensation expense (1) |
|
1,807 |
|
|
|
3,097 |
|
|
4,753 |
|
|
|
13,317 |
|
Transaction costs associated with Merger (2) |
|
— |
|
|
|
— |
|
|
— |
|
|
|
3,350 |
|
Adjusted net (loss)
income |
$ |
(6,727 |
) |
|
$ |
(4,512 |
) |
$ |
(24,484 |
) |
|
$ |
6,234 |
|
(1) Includes employer payroll taxes.(2) Consists of
non-capitalizable transaction cost associated with the Merger
during the nine months ended September 30, 2021.
CERTAIN KEY PERFORMANCE METRICS
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
2022 |
|
2021 |
2022 |
|
2021 |
Total revenue |
$ |
50,341 |
|
$ |
71,710 |
$ |
163,258 |
|
$ |
229,814 |
If ASC 842 was effective for the three and nine
months ended September 30, 2021, total revenue would have been
$66,277 and $213,307, respectively.
KATAPULT HOLDINGS, INC.GROSS
ORIGINATIONS BY QUARTER
($ millions) |
|
Gross Originations by Quarter |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
FY 2022 |
|
$ |
46.7 |
|
$ |
46.4 |
|
$ |
44.1 |
|
$ |
— |
FY 2021 |
|
$ |
63.8 |
|
$ |
64.4 |
|
$ |
61.0 |
|
$ |
58.9 |
FY 2020 |
|
$ |
37.2 |
|
$ |
77.6 |
|
$ |
60.5 |
|
$ |
61.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
KATAPULT HOLDINGS, INC.IMPACT OF
ADOPTION OF ASC 842FOR ILLUSTRATIVE PURPOSES
ONLY(UNAUDITED)
|
Three Months Ended |
|
December 31,2021 |
September 30,2021 |
June 30, 2021 |
March 31, 2021 |
|
December 31,2020 |
September 30,2020 |
June 30, 2020 |
March 31, 2020 |
As
Reported: |
|
|
|
|
|
|
|
|
|
Total revenue |
$ |
73,299 |
$ |
71,710 |
$ |
77,469 |
|
$ |
80,635 |
|
$ |
73,358 |
$ |
71,194 |
$ |
60,014 |
$ |
42,634 |
Bad debt expense (net of
recoveries) |
|
9,450 |
|
5,936 |
|
8,026 |
|
|
4,887 |
|
|
6,450 |
|
3,931 |
|
2,548 |
|
3,134 |
Income (loss) before provision
for income taxes |
$ |
7,213 |
$ |
14,548 |
$ |
(9,931 |
) |
$ |
9,915 |
|
$ |
3,996 |
$ |
10,073 |
$ |
5,199 |
$ |
3,749 |
|
|
|
|
|
|
|
|
|
|
Supplemental
Information - Impact of ASC 842: |
|
|
|
|
|
|
|
|
|
Total revenue under ASC
842 |
$ |
64,253 |
$ |
66,277 |
$ |
69,472 |
|
$ |
77,558 |
|
$ |
67,060 |
$ |
67,410 |
$ |
59,721 |
$ |
39,428 |
Bad debt expense (net of
recoveries) under ASC 842 |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
— |
Income (loss) before provision
for income taxes under ASC 842 |
$ |
7,617 |
$ |
15,051 |
$ |
(9,902 |
) |
$ |
11,725 |
|
$ |
4,149 |
$ |
10,220 |
$ |
7,454 |
$ |
3,677 |
*Total revenue under ASC 842 also reflects the impact of the
change in recognizing revenue when it is earned and cash is
collected.
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