SpringBig Holdings, Inc. (“Springbig” or the “Company”) (OTCQX:
SBIG), a leading provider of SaaS-based marketing solutions,
consumer mobile app experiences, and omnichannel loyalty programs,
today announced its financial results for the first quarter ended
March 31, 2024.
The Company also announced that Mark Silver,
President of Optus Capital Corporation, has joined the board of
directors with effect from May 10, 2024.
“We have continued to make good progress in a
challenging macroenvironment. Our newer offerings, such as
‘subscriptions by Springbig’ and ‘gift cards by Springbig’ are
gaining traction as is our objective of diversification into
regulated markets beyond cannabis” said Jeffrey Harris, CEO and
Chairman of Springbig who also added “I am both honored and
delighted that Mark has agreed to join our board of directors. He
brings invaluable experience and acumen, particularly in the area
of sales and marketing, to the board at a time when the Company is
nicely positioned, following the recent debt financing in which
Mark participated, to accelerate our development.”
Paul Sykes, Springbig’s CFO, added “We are
pleased to be reporting a quarter with positive Adjusted EBITDA*
for the first time, and our sixth consecutive quarter of improving
Adjusted EBITDA*. After completing our $8 million debt financing in
January, we have a much stronger and cleaner balance sheet. We
continue to manage the optimization of our operating expenses,
which have reduced by 34% year-on-year and expect a continuing
positive trend in our Adjusted EBITDA* margins as the year
progresses.”
First Quarter 2023 Financial
Highlights:
- Revenue was $6.5
million, compared to $7.2 million in the prior year.
- Subscription revenue represents 83%
of total revenue at $5.4 million, compared to $5.7 million in the
prior year.
- Gross profit was $4.7 million,
representing a gross profit margin of 72%.
- Operating expenses reduced by 34%
year-on-year to $5.0 million.
- Net income was $0.4 million,
including a gain of $1.6 million on the repurchase of convertible
debt, compared to a net loss of $(2.3) million in the prior
year.
- Adjusted EBITDA* positive $0.2
million compared to a loss of $(1.3) million in the prior
year.
- Basic and diluted net income per
share was $0.01.
Key Operational Highlights:
- $8.0 million debt financing,
comprising $6.4 million 8% Convertible Notes due 2026 and a $1.6
million 12% Term Loan due 2026, both completed in January 2024. The
proceeds were utilized to repurchase entirely existing Senior
Secured Convertible Notes due 2025 for a discounted amount of $2.9
million and for general corporate purposes.
- Strong momentum in newer
initiatives with clients encompassing both “subscriptions by
Springbig”, a subscription-based VIP loyalty program, and “gift
cards by Springbig”, enabling loyalty rewards and gift cards to be
combined uniquely as an efficient method of in store payment within
a consumer’s loyalty wallet.
Financial Outlook
For the second quarter of 2024, Springbig
currently expects:
- Revenue in the
range of $6.5 - $7.0 million.
- Adjusted
EBITDA* positive in the range of $0.3 - $0.6 million.
For the year ending December 31, 2024,
Springbig’s guidance is unchanged and currently expects:
- Revenue in the
range of $29 - $32 million.
- Adjusted
EBITDA* positive in the range of $3.5 - $5.0 million.
* Adjusted EBITDA is a
non-GAAP (as defined below) financial measure. For more
information, see “Use of Non-GAAP Financial Measures” below.
Additionally, reconciliations of GAAP to non-GAAP financial
measures have been provided in the tables included in this
release.
Adjusted EBITDA is a non-GAAP financial measure
provided in this “Financial Outlook” section on a forward-looking
basis. The Company does not provide a reconciliation of such
forward-looking measure to the most directly comparable financial
measure calculated and presented in accordance with GAAP because to
do so would be potentially misleading and not practical given the
difficulty of projecting event-driven transactional and other
non-core operating items in any future period. The magnitude of
these items, however, may be significant.
Appointment of Mark Silver to the board
of directors
Mark Silver is President of Optus Capital Corporation, one of
the lead investors in the Company’s $8 million debt financing
previously announced on January 24, 2024. Mark has made significant
real estate investments in both development stage and income
producing properties in the residential, commercial, and industrial
sectors over his 36-year business career. He was a founding partner
and Chief Executive Officer of Universal Energy which was sold in
2009 to Just Energy Group Inc and co-founded Direct Energy
Marketing growing the company to over $1.3 billion in revenues
before selling to Centrica PLC (also known as British Gas) in 2000.
Mark is Chairman and Chief Executive Officer of Eddy Smart Home
Solutions Ltd.
The board of directors now comprises Sergey Sherman, Matt Sacks,
Shawn Dym and Mark Silver along with Jeffrey Harris, Chairman and
CEO. The Audit Committee remains unchanged and comprises Shawn Dym,
Chairman, and Sergey Sherman.
About Springbig
Springbig is a market-leading software platform
providing customer loyalty and marketing automation solutions to
retailers and brands in the U.S. and Canada. Springbig’s platform
connects consumers with retailers and brands, primarily through SMS
marketing, as well as emails, customer feedback system, and loyalty
programs, to support retailers’ and brands’ customer engagement and
retention. Springbig offers marketing automation solutions that
provide for consistency of customer communication, thereby driving
customer retention and retail foot traffic. Additionally,
Springbig’s reporting and analytics offerings deliver valuable
insights that clients utilize to better understand their customer
base, purchasing habits and trends. For more information, visit
https://springbig.com/.
Forward Looking Statements
Certain statements contained in this press
release constitute “forward-looking statements” within the meaning
of the “safe harbor” provisions of the United States Private
Securities Litigation Reform Act of 1995. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“outlook,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “should,” “would,” and similar expressions
may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking.
Forward-looking statements are predictions, projections and other
statements about future events and financial results that are based
on current expectations and assumptions and, as a result, are
subject to risks and uncertainties. In particular, these include
but are not limited to statements relating to the Company’s
business strategy, future offerings and programs and expected
financial performance for the second quarter of 2024 and the year
ending December 31, 2024. Many factors could cause actual future
events to differ materially from the forward-looking statements in
this press release, including but not limited to the fact that we
have a relatively short operating history in a rapidly evolving
industry, which makes it difficult to evaluate our future prospects
and may increase the risk that we will not be successful; that if
we do not successfully develop and deploy new software, platform
features or services to address the needs of our clients, if we
fail to retain our existing clients or acquire new clients, and/or
if we fail to expand effectively into new markets, our revenue may
decrease and our business may be harmed; and the other risks and
uncertainties described under “Risk Factors” of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2023
filed with the Securities and Exchange Commission (“SEC”) on April
1, 2024. These forward-looking statements involve a number of risks
and uncertainties (some of which are beyond the control of
Springbig), and other assumptions, which may cause the actual
results or performance to be materially different from those
expressed or implied by these forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and the Company assumes no obligation and does not
intend to update or revise these forward-looking statements other
than as required by applicable law. The Company does not give any
assurance that it will achieve its expectations.
Use of Non-GAAP Financial
Measures
In addition to the results reported in
accordance with accounting principles generally accepted in the
United States (GAAP) included throughout this press release, we
have disclosed EBITDA and Adjusted EBITDA, both of which are
non-GAAP financial measures that we calculate as net income before
interest, taxes, depreciation and amortization, in the case of
EBITDA, and further adjustments to exclude unusual and/or
infrequent costs, in the case of Adjusted EBITDA, which are
detailed in the reconciliation table that follows, in order to
provide investors with additional information regarding our
financial results. Below we have provided a reconciliation of net
loss (the most directly comparable GAAP financial measure) to
EBITDA and Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because
these metrics are key measures used by our management to evaluate
our operating performance, generate future operating plans and make
strategic decisions regarding the allocation of investment
capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA
provide useful information to investors and others in understanding
and evaluating our operating results in the same manner as our
management. Management also believes that these measures provide
improved comparability between fiscal periods.
EBITDA and Adjusted EBITDA have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results as reported under GAAP.
Some of these limitations are as follows:
- Although
depreciation and amortization are non-cash charges, the assets
being depreciated and amortized may have to be replaced in the
future, and neither EBITDA nor Adjusted EBITDA reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements;
- EBITDA and Adjusted EBITDA do not
reflect changes in, or cash requirements for, our working capital
needs; and
- EBITDA and
Adjusted EBITDA do not reflect tax payments that may represent a
reduction in cash available to us.
Because of these limitations, you should
consider EBITDA and Adjusted EBITDA alongside other financial
performance measures, including net income and our other GAAP
results. Also, these non-GAAP financial measures, as determined and
presented by the Company, may not be comparable to related or
similarly titled measures reported by other companies.
Investor Relations
ContactClaire BollettieriVP of Investor
Relationsir@springbig.com
Springbig
Holding, Inc |
Condensed
Consolidated Balance Sheets |
(in thousands) |
|
March 31, 2024 |
|
December 31, 2023 |
|
(unaudited) |
|
(audited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
1,668 |
|
|
$ |
331 |
|
Accounts receivable, net |
|
3,211 |
|
|
|
2,948 |
|
Contract assets |
|
255 |
|
|
|
273 |
|
Prepaid expenses and other current assets |
|
588 |
|
|
|
893 |
|
Total
current assets |
|
5,722 |
|
|
|
4,445 |
|
Operating lease asset |
|
3,031 |
|
|
|
340 |
|
Property and equipment, net |
|
325 |
|
|
|
320 |
|
Total assets |
$ |
9,078 |
|
|
$ |
5,105 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Liabilities |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
2,040 |
|
|
$ |
2,925 |
|
Accrued expenses and other current liabilities |
|
1,767 |
|
|
|
1,951 |
|
Short-term cash advances |
|
1,195 |
|
|
|
1,925 |
|
Current maturities of long-term debt |
|
- |
|
|
|
4,360 |
|
Deferred payroll tax credits |
|
1,751 |
|
|
|
1,751 |
|
Deferred revenue |
|
2 |
|
|
|
- |
|
Related party payable |
|
- |
|
|
|
540 |
|
Operating lease liability, current |
|
329 |
|
|
|
99 |
|
Total
current liabilities |
|
7,084 |
|
|
|
13,551 |
|
Long-term debt, non-current |
|
7,198 |
|
|
|
- |
|
Operating lease liability, non-current |
|
2,815 |
|
|
|
225 |
|
Warant liabilities |
|
6 |
|
|
|
3 |
|
Total
liabilities |
|
17,103 |
|
|
|
13,779 |
|
|
|
|
|
Stockholders’ Equity |
|
|
|
Common stock par value $0.0001 per shares, 300,000,000 authorized
at March 31, 2024; 45,594,864 issued and outstanding as of March
31, 2024; (300,000,000 authorized at December 31, 2023; 45,339,762
issued and outstanding as of December 31, 2023) |
$ |
4 |
|
|
$ |
4 |
|
Additional paid-in-capital |
|
28,119 |
|
|
|
27,887 |
|
Accumulated deficit |
|
(36,148 |
) |
|
|
(36,565 |
) |
Total
stockholders’ equity |
|
(8,025 |
) |
|
|
(8,674 |
) |
Total liabilities and stockholders’ equity |
$ |
9,078 |
|
|
$ |
5,105 |
|
|
|
|
|
Springbig
Holding, Inc |
Condensed
Consolidated Statement of Operations (unaudited) |
(in
thousands, except share and per share data) |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
6,474 |
|
|
$ |
7,157 |
|
Cost of
revenues |
|
1,794 |
|
|
|
1,350 |
|
Gross
Profit |
|
4,680 |
|
|
|
5,807 |
|
Expenses |
|
|
|
Selling, servicing and marketing |
|
1,527 |
|
|
|
2,478 |
|
Technology and software development |
|
1,666 |
|
|
|
2,300 |
|
General and administrative |
|
1,769 |
|
|
|
2,757 |
|
Total
operating expenses |
|
4,962 |
|
|
|
7,535 |
|
|
|
|
|
Loss from
operations |
|
(282 |
) |
|
|
(1,728 |
) |
Interest income |
|
4 |
|
|
|
10 |
|
Interest Expense |
|
(875 |
) |
|
|
(391 |
) |
Gain on note repurchase |
|
1,573 |
|
|
|
- |
|
Change in fair value of warrants |
|
(3 |
) |
|
|
(153 |
) |
Income
(loss) before income taxes |
$ |
417 |
|
|
$ |
(2,262 |
) |
Income taxes
expense |
|
- |
|
|
|
- |
|
Net income
(loss) |
$ |
417 |
|
|
$ |
(2,262 |
) |
|
|
|
|
Net income
(loss) per common share: |
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
(0.08 |
) |
Diluted |
$ |
0.01 |
|
|
$ |
(0.08 |
) |
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
Basic |
|
45,432,272 |
|
|
|
26,803,839 |
|
Diluted |
|
77,315,056 |
|
|
|
26,803,839 |
|
Springbig
Holding, Inc |
Statement of
Cash Flows (unaudited) |
(in
thousands) |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Cash
flows from operating activities |
|
|
|
Net income
(loss) |
$ |
417 |
|
|
$ |
(2,262 |
) |
Adjustments
to reconcile net income (loss) income to net cash used in operating
activities: |
|
|
|
Gain on note repurchase |
|
(1,573 |
) |
|
|
- |
|
Non-cash interest expense |
|
108 |
|
|
|
- |
|
Depreciation and amortization |
|
54 |
|
|
|
66 |
|
Discount amortization on convertible note |
|
- |
|
|
|
259 |
|
Amortization of debt financing costs |
|
116 |
|
|
|
- |
|
Stock-based compensation expense |
|
195 |
|
|
|
162 |
|
Bad debt expense |
|
87 |
|
|
|
169 |
|
Accrued interest on convertible notes |
|
117 |
|
|
|
22 |
|
Amortization of operating lease right of use assets |
|
90 |
|
|
|
123 |
|
Change in fair value of warrants |
|
3 |
|
|
|
153 |
|
Changes in
operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(351 |
) |
|
|
(448 |
) |
Prepaid expenses and other current assets |
|
305 |
|
|
|
474 |
|
Contract assets |
|
18 |
|
|
|
10 |
|
Accounts payable and other liabilities |
|
(1,505 |
) |
|
|
363 |
|
Operating lease liabilities |
|
39 |
|
|
|
(126 |
) |
Deferred payroll tax credits |
|
- |
|
|
|
1,442 |
|
Deferred revenue |
|
2 |
|
|
|
(28 |
) |
Net
cash used in operating activities |
|
(1,878 |
) |
|
|
379 |
|
|
|
|
|
Cash flows
from investing activities |
|
|
|
Purchase of convertible note |
|
- |
|
|
|
(3 |
) |
Purchases of property and equipment |
|
(59 |
) |
|
|
(9 |
) |
Net
cash used in investing activities |
|
(59 |
) |
|
|
(12 |
) |
|
|
|
|
Cash flows
from financing activities |
|
|
|
Proceeds from issuance of convertible notes |
|
6,400 |
|
|
|
- |
|
Repayment of convertible notes |
|
(2,895 |
) |
|
|
(1,457 |
) |
Proceeds from the issuance of term notes |
|
1,600 |
|
|
|
- |
|
Repayment of short-term cash advances |
|
(730 |
) |
|
|
- |
|
Repayment of related party payable |
|
(540 |
) |
|
|
- |
|
Cost of convertible and term note issuance |
|
(561 |
) |
|
|
- |
|
Proceeds from exercise of stock options |
|
- |
|
|
|
- |
|
Proceeds from common stock |
|
- |
|
|
|
113 |
|
Net
cash (used in) provided by financing activities |
|
3,274 |
|
|
|
(1,344 |
) |
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
|
1,337 |
|
|
|
(977 |
) |
Cash and
cash equivalents, at beginning of the period |
|
331 |
|
|
|
3,546 |
|
Cash and
cash equivalents, at end of the period |
$ |
1,668 |
|
|
$ |
2,569 |
|
|
|
|
|
Supplemental cash flows disclosures |
|
|
|
Interest
paid |
$ |
720 |
|
|
$ |
132 |
|
Common stock
issued for services rendered relating to debt financing |
$ |
37 |
|
|
$ |
- |
|
Accrued cost
of debt issuance |
$ |
319 |
|
|
$ |
- |
|
Obtaining a
right-of-use asset in exchange for a lease liability |
$ |
2,781 |
|
|
$ |
- |
|
Springbig
Holding, Inc |
Reconciliation of net loss to non-GAAP EBITDA and Adjusted
EBITDA |
(in
thousands) |
|
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
Net income
(loss) |
|
417 |
|
|
|
(2,262 |
) |
Interest
income |
|
(4 |
) |
|
|
(10 |
) |
Interest
expense |
|
875 |
|
|
|
391 |
|
Depreciation
expense |
|
54 |
|
|
|
66 |
|
|
|
|
|
EBITDA |
|
1,342 |
|
|
|
(1,815 |
) |
|
|
|
|
Stock-based
compensation |
|
195 |
|
|
|
162 |
|
Bad debt
expense |
|
87 |
|
|
|
169 |
|
Gain on
repurchase of convertible debt |
|
(1,573 |
) |
|
|
- |
|
Severance
and related payments |
|
96 |
|
|
|
- |
|
Change in
fair value of warrants |
|
3 |
|
|
|
153 |
|
|
|
|
|
Adjusted
EBITDA |
|
150 |
|
|
|
(1,331 |
) |
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