Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries KIDPIK Reports Fourth Quarter and Full Year 2021 Financial Results By: Kidpik Corp. via Business Wire March 31, 2022 at 16:05 PM EDT 29% Increase in Net Revenue for Full Year 2021 Kidpik Corp. (NASDAQ: PIK) (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for the fourth quarter and full year ended January 1, 2022. Fourth Quarter 2021 Highlights: Revenue, net: was $5.3 million, a year over year decrease of 10% Gross margin: was 58.7%, a year over year increase of 120 basis points from 57.5% in the fourth quarter of 2020 Shipped items: were 477,000 items, compared to 589,000 shipped items in the fourth quarter of 2020 Average shipment keep rate: increased to 70.8%, compared to 64.8% in the fourth quarter of 2020 Net Loss: was $1.9 million or $0.28 loss per share Adjusted EBITDA: was a loss of $1.4 million (see also “Non-GAAP Financial Measures”, below) Full Year 2021 Financial Highlights: Revenue, net: was $21.8 million, a year over year increase of 28.9% Gross margin: was 59.5%, a year over year increase of 110 basis points from 58.4% in 2020 Shipped items: were 2.2 million items, compared to 1.7 million shipped items in 2020 Average shipment keep rate: increased to 69.0% compared to 66.1% last year Net Loss: was $5.9 million, or $1.05 loss per share Adjusted EBITDA: was a loss of $5.3 million (see also “Non-GAAP Financial Measures”, below) “We reported our 2021 full year results, our first full year as a public company, and achieved year-over-year improvement in many of our key metrics, including 29% revenue growth, a 31% increase in gross profit and a 25% increase in items shipped. Our 71% ‘keep rate’ on our surprise fashion subscription box shipments in the fourth quarter was a record for us, and attests to the strength of our proprietary technology and high customer satisfaction,” commented Ezra Dabah, CEO of KIDPIK. “Changes in data access and availability across social media advertising platforms impacted new customer acquisition in the fourth quarter of 2021, and have prompted us to pursue new marketing channels to re-accelerate membership growth. We are implementing a paid influencer campaign, exploring Connected TV and other advertising channels to communicate our convenient and free, personalized styling service. We are focusing on maximizing existing channels and we’re looking to expand upon our current brand partnerships and introduce new collaborations—similar to our recent partnership with Disney,” continued Dabah. “While we anticipate these challenges may remain in place in the near term, we are excited about the growth opportunities in front of us. We believe that our Fall 2022 planned expansion of product offerings, which will include Husky/slim sizes, as well as a 12 and 18 month assortment, will also contribute to our future growth,” concluded Dabah. Revenue by Subscription (For year ended 2021) Active Subscriptions (recurring boxes): increased 36.9% to $15.6 million New Subscriptions (first boxes): decreased 19.8% to $2.9 million Total Subscriptions: increased 23.3% to $18.4 million or 84.4% of total revenue Balance Sheet and Cash Flow Cash at the end of the fourth quarter totaled $8.4 million compared to $0.1 million last year. In November 2021, the Company completed an IPO, issuing 2,117,647 shares of common stock at $8.50 per share for net proceeds of $16.1 million. Net cash used in operating activities increased to $11 million in 2021, compared to $3.6 million of cash used in operating activities in 2020. In November 2021, we paid off in full the $3.2 million open in our line of credit. Earnings Call Information: Today at 4:30pm ET, the Company will host a live teleconference call that is accessible over the internet at the Company’s website, https://investor.kidpik.com and additionally by dialing in at 1-877-407-9039 or at 201-689-8470 for international callers. The conference ID is 13728304. 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 1-844-512-2921, or 1-412-317-6671, internationally, with the Replay Pin Number: 13728304. The replay will be available until April 7, 2022. 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. Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between companies. This non-GAAP financial measure may be different than similarly titled measures used by other companies. Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measure, please see the section titled “Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)”, included at the end of this release. Forward-Looking Statements This press release may contain statements that constitute “forward-looking statements” within the federal securities laws, including The Private Securities Litigation Reform Act of 1995, which provide a safe-harbor for forward-looking statements. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements within the meaning of such laws, and are subject to the safe harbor created by such applicable laws. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of KIDPIK to be materially different than those expressed or implied in such statements. The forward-looking statements may include projections and estimates of KIDPIK’s corporate strategies, future operations and plans, including the costs thereof. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including our history of losses, our ability to achieve profitability, our potential need for additional funding and the availability and terms of such funding; our ability to execute our growth strategy and scale our operations and risks associated with such growth, our ability to maintain current members and customers and grow our members and customers; risks associated with the effect of the COVID-19 pandemic, and governmental responses thereto on our operations, those of our vendors, our customers and members and the economy in general; risks associated with our supply chain and third-party service providers, interruptions in the supply of raw materials and merchandise, increased costs of raw materials, products and shipping costs due to inflation, disruptions at our warehouse facility and/or of our data or information services, issues affecting our shipping providers, and disruptions to the internet, any of which may have a material adverse effect on our operations; risks that effect our ability to successfully market our products to key demographics; the effect of data security breaches, malicious code and/or hackers; increased competition and our ability to maintain and strengthen our brand name; changes in consumer tastes and preferences and changing fashion trends; material changes and/or terminations of our relationships with key vendors; significant product returns from customers, excess inventory and our ability to manage our inventory; the effect of trade restrictions and tariffs, increased costs associated therewith and/or decreased availability of products; our ability to innovate, expand our offerings and compete against competitors which may have greater resources; certain anti-dilutive, drag-along and tag-along rights which may be deemed to be held by a former minority stockholder; our significant reliance on related party transactions and loans; the fact that our Chief Executive Officer has majority voting control over the Company; if the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information would decrease, which could harm our business and operating results; our ability to comply with the covenants of our loan and lending agreements and future loan covenants, and the fact that our lending facilities are secured by substantially all of our assets; our ability to prevent credit card and payment fraud; the risk of unauthorized access to confidential information; our ability to protect our intellectual property and trade secrets, claims from third-parties that we have violated their intellectual property or trade secrets and potential lawsuits in connection therewith; our ability to comply with changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, our ability to comply with such new laws or regulations, changes in tax rates; our reliance and retention of our current management; the outcome of future lawsuits, litigation, regulatory matters or claims; the fact that we have a limited operating history; the effect of future acquisitions on our operations and expenses; our significant indebtedness; and others that are included from time to time in filings made by KIDPIK with the Securities and Exchange Commission, many of which are beyond our control, including, but not limited to, in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on KIDPIK’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. KIDPIK cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws and take no obligation to update or correct information prepared by third parties that is not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Kidpik Corp. Statements of Operations Years Ended January 1, 2022 and January 2, 2021 For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Revenues, net $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 Cost of goods sold 2,177,872 2,492,884 8,836,884 7,046,716 Gross profit 3,094,067 3,367,493 12,997,634 9,889,671 Operating expenses Shipping and handling 1,543,942 1,524,701 6,087,283 4,217,763 Payroll, related costs 1,304,611 902,289 4,258,604 2,947,704 General and administrative 1,969,936 2,015,639 8,288,119 6,317,172 Depreciation and amortization 5,559 14,780 26,914 72,843 Total operating expenses 4,824,048 4,457,409 18,660,920 13,555,482 Operating loss (1,729,981 ) (1,089,916 ) (5,663,286 ) (3,665,811 ) Other (income) expenses Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense - - (429,045 ) 10,000 Total other (income) expenses 127,508 203,274 282,929 521,427 Loss before provision for income taxes (1,857,489 ) (1,293,190 ) (5,946,215 ) (4,187,238 ) Provision for income taxes - 1,332 1,122 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Net loss per share attributable to common stockholders: Basic $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Diluted $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Weighted average common shares outstanding: Basic 6,700,187 3,776,900 5,648,344 3,746,351 Diluted 6,700,187 3,776,900 5,648,344 3,746,351 Kidpik Corp. Condensed Interim Balance Sheets 2021 2020 Assets Current assets Cash $ 8,415,797 $ 133,484 Restricted cash 4,703 551,812 Accounts receivable 342,274 320,446 Inventory 11,618,597 7,480,072 Prepaid expenses and other current assets 1,726,516 822,580 Total current assets 22,107,887 9,308,394 Leasehold improvements and equipment, net 46,968 27,874 Intangible assets, net - 614 Total assets $ 22,154,855 $ 9,336,882 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 2,560,361 $ 2,960,687 Accounts payable, related party 913,708 599,811 Accrued expenses and other current liabilities 800,972 690,049 Advance payable 932,155 829,030 Loan payable, current portion - 91,429 Short-term debt, related party 2,200,000 - Line of credit - 2,032,118 Total current liabilities 7,407,196 7,203,124 Loan payable, less current portion - 350,923 Total liabilities 7,407,196 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 January 1, 2022 and January 2, 2021, respectively) - - Common stock (par value $0.001, 75,000,000 shares authorized, of which 7,617,834 and 5,075,444 shares are issued and outstanding as of January 1, 2022 and January 2, 2021, respectively) 7,618 5,075 Additional paid-in capital 48,659,225 29,749,397 Accumulated stockholders’ deficit (33,919,184 ) (27,971,637 ) Total stockholders’ equity 14,747,659 1,782,835 Total liabilities and stockholders’ equity $ 22,154,855 $ 9,336,882 Kidpik Corp. Statements of Cash Flows Years Ended January 1, 2022 and January 2, 2021 2021 2020 Cash flows from operating activities Net loss $ (5,947,547 ) $ (4,188,360 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 26,914 72,843 Amortization of debt issuance costs 58,397 44,086 Forgiveness of loan payable (442,352 ) - Equity-based compensation 328,515 - Bad debt expense 783,979 749,912 Changes in operating assets and liabilities: Accounts receivable (805,807 ) (838,797 ) Inventory (4,138,525 ) (728,654 ) Prepaid expenses and other current assets (903,936 ) (366,646 ) Accounts payable (601,264 ) 892,993 Accounts payable, related parties 313,897 599,811 Accrued expenses and other current liabilities 311,862 212,484 Net cash flows used in operating activities (11,015,868 ) (3,550,328 ) Cash flows from investing activities Purchases of leasehold improvements and equipment (45,394 ) (11,470 ) Net cash used in investing activities (45,394 ) (11,470 ) Cash flows from financing activities Proceeds from issuance of long-term debt from related party 2,000,000 1,770,000 Net proceeds (repayment) from line of credit (2,090,515 ) 215,922 Net proceeds from short-term debt, related party 2,200,000 - Net proceeds from advance payable 103,125 187,500 Proceeds from loan payable - 442,352 Receipts of initial public offering, net of offering costs 16,083,856 - Proceeds from issuance of common stock 500,000 1,000,000 Net cash provided by financing activities 18,796,466 3,615,774 Net increase in cash 7,735,204 53,976 Cash and restricted cash, beginning of year 685,296 631,320 Cash and restricted cash, end of year $ 8,420,500 $ 685,296 Supplemental disclosure of cash flow data: Interest paid $ 573,618 $ 374,557 Taxes paid $ 1,332 $ 1,122 Supplemental disclosure of noncash investing and financing activities: Conversion of shareholder debt $ 2,000,000 $ 5,070,000 RESULTS OF OPERATIONS The Company’s revenue, net is disaggregated based on the following categories: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Subscription boxes $ 4,263,840 5,228,875 $ 18,427,057 $ 14,941,257 Amazon sales 729,070 482,228 2,622,884 1,546,906 Online website sales 279,029 149,274 784,577 448,224 Total revenue $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Gross margin 58.7% 57.5% 59.5% 58.4 % 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 52 weeks ended (In thousands) (In thousands) January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Shipped Items 477 589 2,157 1,727 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Average Shipment Keep Rate 70.8% 64.8% 69.0% 66.1% Revenue by Channel 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 4,263,840 $ 5,228,875 (965,035 ) (18.5 )% Amazon sales 729,070 482,228 246,842 51.2 % Online website sales 279,029 149,274 129,755 86.9 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,437 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Amazon sales 2,622,884 1,546,906 1,075,978 69.6 % Online website sales 784,577 448,224 336,353 75.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Subscription Boxes Revenue 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Subscription boxes revenue from Active subscriptions – recurring boxes $ 15,565,533 $ 11,372,228 $ 4,193,305 36.9 % New subscriptions - first box 2,861,524 3,569,029 (707,505 ) (19.8 )% Total Subscription boxes revenue $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Revenue by Product Line 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 4,016,285 $ 4,750,659 $ (734,374 ) (15.5 )% Boys’ apparel 1,011,104 1,109,718 (98,614 ) (8.9 )% Toddlers’ apparel 244,550 - 244,550 100.0 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,438 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 16,663,366 $ 15,125,033 $ 1,538,333 10.2 % Boys’ apparel 4,352,523 1,811,357 2,541,169 140.3 % Toddlers’ apparel 818,629 - 818,629 100.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Adjusted EBITDA Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) We define adjusted EBITDA as net loss excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity based compensation expense. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Add (deduct) Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense, net - - (429,045 ) 10,000 Provision for income taxes - 598 1,332 1,122 Depreciation and amortization 5,559 14,780 26,914 72,843 Equity based compensation 328,515 - 328,515 - Adjusted EBITDA $ (1,395,907 ) $ (1,074,538 ) $ (5,307,857 ) $ (3,592,968 ) See also “Non-GAAP Financial Measures”, above. View source version on businesswire.com: https://www.businesswire.com/news/home/20220331005929/en/Contacts Investor Relations Contact: ir@kidpik.com Media: Sarah Tropeano press@kidpik.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
KIDPIK Reports Fourth Quarter and Full Year 2021 Financial Results By: Kidpik Corp. via Business Wire March 31, 2022 at 16:05 PM EDT 29% Increase in Net Revenue for Full Year 2021 Kidpik Corp. (NASDAQ: PIK) (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for the fourth quarter and full year ended January 1, 2022. Fourth Quarter 2021 Highlights: Revenue, net: was $5.3 million, a year over year decrease of 10% Gross margin: was 58.7%, a year over year increase of 120 basis points from 57.5% in the fourth quarter of 2020 Shipped items: were 477,000 items, compared to 589,000 shipped items in the fourth quarter of 2020 Average shipment keep rate: increased to 70.8%, compared to 64.8% in the fourth quarter of 2020 Net Loss: was $1.9 million or $0.28 loss per share Adjusted EBITDA: was a loss of $1.4 million (see also “Non-GAAP Financial Measures”, below) Full Year 2021 Financial Highlights: Revenue, net: was $21.8 million, a year over year increase of 28.9% Gross margin: was 59.5%, a year over year increase of 110 basis points from 58.4% in 2020 Shipped items: were 2.2 million items, compared to 1.7 million shipped items in 2020 Average shipment keep rate: increased to 69.0% compared to 66.1% last year Net Loss: was $5.9 million, or $1.05 loss per share Adjusted EBITDA: was a loss of $5.3 million (see also “Non-GAAP Financial Measures”, below) “We reported our 2021 full year results, our first full year as a public company, and achieved year-over-year improvement in many of our key metrics, including 29% revenue growth, a 31% increase in gross profit and a 25% increase in items shipped. Our 71% ‘keep rate’ on our surprise fashion subscription box shipments in the fourth quarter was a record for us, and attests to the strength of our proprietary technology and high customer satisfaction,” commented Ezra Dabah, CEO of KIDPIK. “Changes in data access and availability across social media advertising platforms impacted new customer acquisition in the fourth quarter of 2021, and have prompted us to pursue new marketing channels to re-accelerate membership growth. We are implementing a paid influencer campaign, exploring Connected TV and other advertising channels to communicate our convenient and free, personalized styling service. We are focusing on maximizing existing channels and we’re looking to expand upon our current brand partnerships and introduce new collaborations—similar to our recent partnership with Disney,” continued Dabah. “While we anticipate these challenges may remain in place in the near term, we are excited about the growth opportunities in front of us. We believe that our Fall 2022 planned expansion of product offerings, which will include Husky/slim sizes, as well as a 12 and 18 month assortment, will also contribute to our future growth,” concluded Dabah. Revenue by Subscription (For year ended 2021) Active Subscriptions (recurring boxes): increased 36.9% to $15.6 million New Subscriptions (first boxes): decreased 19.8% to $2.9 million Total Subscriptions: increased 23.3% to $18.4 million or 84.4% of total revenue Balance Sheet and Cash Flow Cash at the end of the fourth quarter totaled $8.4 million compared to $0.1 million last year. In November 2021, the Company completed an IPO, issuing 2,117,647 shares of common stock at $8.50 per share for net proceeds of $16.1 million. Net cash used in operating activities increased to $11 million in 2021, compared to $3.6 million of cash used in operating activities in 2020. In November 2021, we paid off in full the $3.2 million open in our line of credit. Earnings Call Information: Today at 4:30pm ET, the Company will host a live teleconference call that is accessible over the internet at the Company’s website, https://investor.kidpik.com and additionally by dialing in at 1-877-407-9039 or at 201-689-8470 for international callers. The conference ID is 13728304. 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 1-844-512-2921, or 1-412-317-6671, internationally, with the Replay Pin Number: 13728304. The replay will be available until April 7, 2022. 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. Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between companies. This non-GAAP financial measure may be different than similarly titled measures used by other companies. Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measure, please see the section titled “Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)”, included at the end of this release. Forward-Looking Statements This press release may contain statements that constitute “forward-looking statements” within the federal securities laws, including The Private Securities Litigation Reform Act of 1995, which provide a safe-harbor for forward-looking statements. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements within the meaning of such laws, and are subject to the safe harbor created by such applicable laws. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of KIDPIK to be materially different than those expressed or implied in such statements. The forward-looking statements may include projections and estimates of KIDPIK’s corporate strategies, future operations and plans, including the costs thereof. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including our history of losses, our ability to achieve profitability, our potential need for additional funding and the availability and terms of such funding; our ability to execute our growth strategy and scale our operations and risks associated with such growth, our ability to maintain current members and customers and grow our members and customers; risks associated with the effect of the COVID-19 pandemic, and governmental responses thereto on our operations, those of our vendors, our customers and members and the economy in general; risks associated with our supply chain and third-party service providers, interruptions in the supply of raw materials and merchandise, increased costs of raw materials, products and shipping costs due to inflation, disruptions at our warehouse facility and/or of our data or information services, issues affecting our shipping providers, and disruptions to the internet, any of which may have a material adverse effect on our operations; risks that effect our ability to successfully market our products to key demographics; the effect of data security breaches, malicious code and/or hackers; increased competition and our ability to maintain and strengthen our brand name; changes in consumer tastes and preferences and changing fashion trends; material changes and/or terminations of our relationships with key vendors; significant product returns from customers, excess inventory and our ability to manage our inventory; the effect of trade restrictions and tariffs, increased costs associated therewith and/or decreased availability of products; our ability to innovate, expand our offerings and compete against competitors which may have greater resources; certain anti-dilutive, drag-along and tag-along rights which may be deemed to be held by a former minority stockholder; our significant reliance on related party transactions and loans; the fact that our Chief Executive Officer has majority voting control over the Company; if the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information would decrease, which could harm our business and operating results; our ability to comply with the covenants of our loan and lending agreements and future loan covenants, and the fact that our lending facilities are secured by substantially all of our assets; our ability to prevent credit card and payment fraud; the risk of unauthorized access to confidential information; our ability to protect our intellectual property and trade secrets, claims from third-parties that we have violated their intellectual property or trade secrets and potential lawsuits in connection therewith; our ability to comply with changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, our ability to comply with such new laws or regulations, changes in tax rates; our reliance and retention of our current management; the outcome of future lawsuits, litigation, regulatory matters or claims; the fact that we have a limited operating history; the effect of future acquisitions on our operations and expenses; our significant indebtedness; and others that are included from time to time in filings made by KIDPIK with the Securities and Exchange Commission, many of which are beyond our control, including, but not limited to, in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on KIDPIK’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. KIDPIK cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws and take no obligation to update or correct information prepared by third parties that is not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Kidpik Corp. Statements of Operations Years Ended January 1, 2022 and January 2, 2021 For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Revenues, net $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 Cost of goods sold 2,177,872 2,492,884 8,836,884 7,046,716 Gross profit 3,094,067 3,367,493 12,997,634 9,889,671 Operating expenses Shipping and handling 1,543,942 1,524,701 6,087,283 4,217,763 Payroll, related costs 1,304,611 902,289 4,258,604 2,947,704 General and administrative 1,969,936 2,015,639 8,288,119 6,317,172 Depreciation and amortization 5,559 14,780 26,914 72,843 Total operating expenses 4,824,048 4,457,409 18,660,920 13,555,482 Operating loss (1,729,981 ) (1,089,916 ) (5,663,286 ) (3,665,811 ) Other (income) expenses Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense - - (429,045 ) 10,000 Total other (income) expenses 127,508 203,274 282,929 521,427 Loss before provision for income taxes (1,857,489 ) (1,293,190 ) (5,946,215 ) (4,187,238 ) Provision for income taxes - 1,332 1,122 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Net loss per share attributable to common stockholders: Basic $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Diluted $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Weighted average common shares outstanding: Basic 6,700,187 3,776,900 5,648,344 3,746,351 Diluted 6,700,187 3,776,900 5,648,344 3,746,351 Kidpik Corp. Condensed Interim Balance Sheets 2021 2020 Assets Current assets Cash $ 8,415,797 $ 133,484 Restricted cash 4,703 551,812 Accounts receivable 342,274 320,446 Inventory 11,618,597 7,480,072 Prepaid expenses and other current assets 1,726,516 822,580 Total current assets 22,107,887 9,308,394 Leasehold improvements and equipment, net 46,968 27,874 Intangible assets, net - 614 Total assets $ 22,154,855 $ 9,336,882 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 2,560,361 $ 2,960,687 Accounts payable, related party 913,708 599,811 Accrued expenses and other current liabilities 800,972 690,049 Advance payable 932,155 829,030 Loan payable, current portion - 91,429 Short-term debt, related party 2,200,000 - Line of credit - 2,032,118 Total current liabilities 7,407,196 7,203,124 Loan payable, less current portion - 350,923 Total liabilities 7,407,196 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 January 1, 2022 and January 2, 2021, respectively) - - Common stock (par value $0.001, 75,000,000 shares authorized, of which 7,617,834 and 5,075,444 shares are issued and outstanding as of January 1, 2022 and January 2, 2021, respectively) 7,618 5,075 Additional paid-in capital 48,659,225 29,749,397 Accumulated stockholders’ deficit (33,919,184 ) (27,971,637 ) Total stockholders’ equity 14,747,659 1,782,835 Total liabilities and stockholders’ equity $ 22,154,855 $ 9,336,882 Kidpik Corp. Statements of Cash Flows Years Ended January 1, 2022 and January 2, 2021 2021 2020 Cash flows from operating activities Net loss $ (5,947,547 ) $ (4,188,360 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 26,914 72,843 Amortization of debt issuance costs 58,397 44,086 Forgiveness of loan payable (442,352 ) - Equity-based compensation 328,515 - Bad debt expense 783,979 749,912 Changes in operating assets and liabilities: Accounts receivable (805,807 ) (838,797 ) Inventory (4,138,525 ) (728,654 ) Prepaid expenses and other current assets (903,936 ) (366,646 ) Accounts payable (601,264 ) 892,993 Accounts payable, related parties 313,897 599,811 Accrued expenses and other current liabilities 311,862 212,484 Net cash flows used in operating activities (11,015,868 ) (3,550,328 ) Cash flows from investing activities Purchases of leasehold improvements and equipment (45,394 ) (11,470 ) Net cash used in investing activities (45,394 ) (11,470 ) Cash flows from financing activities Proceeds from issuance of long-term debt from related party 2,000,000 1,770,000 Net proceeds (repayment) from line of credit (2,090,515 ) 215,922 Net proceeds from short-term debt, related party 2,200,000 - Net proceeds from advance payable 103,125 187,500 Proceeds from loan payable - 442,352 Receipts of initial public offering, net of offering costs 16,083,856 - Proceeds from issuance of common stock 500,000 1,000,000 Net cash provided by financing activities 18,796,466 3,615,774 Net increase in cash 7,735,204 53,976 Cash and restricted cash, beginning of year 685,296 631,320 Cash and restricted cash, end of year $ 8,420,500 $ 685,296 Supplemental disclosure of cash flow data: Interest paid $ 573,618 $ 374,557 Taxes paid $ 1,332 $ 1,122 Supplemental disclosure of noncash investing and financing activities: Conversion of shareholder debt $ 2,000,000 $ 5,070,000 RESULTS OF OPERATIONS The Company’s revenue, net is disaggregated based on the following categories: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Subscription boxes $ 4,263,840 5,228,875 $ 18,427,057 $ 14,941,257 Amazon sales 729,070 482,228 2,622,884 1,546,906 Online website sales 279,029 149,274 784,577 448,224 Total revenue $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Gross margin 58.7% 57.5% 59.5% 58.4 % 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 52 weeks ended (In thousands) (In thousands) January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Shipped Items 477 589 2,157 1,727 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Average Shipment Keep Rate 70.8% 64.8% 69.0% 66.1% Revenue by Channel 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 4,263,840 $ 5,228,875 (965,035 ) (18.5 )% Amazon sales 729,070 482,228 246,842 51.2 % Online website sales 279,029 149,274 129,755 86.9 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,437 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Amazon sales 2,622,884 1,546,906 1,075,978 69.6 % Online website sales 784,577 448,224 336,353 75.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Subscription Boxes Revenue 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Subscription boxes revenue from Active subscriptions – recurring boxes $ 15,565,533 $ 11,372,228 $ 4,193,305 36.9 % New subscriptions - first box 2,861,524 3,569,029 (707,505 ) (19.8 )% Total Subscription boxes revenue $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Revenue by Product Line 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 4,016,285 $ 4,750,659 $ (734,374 ) (15.5 )% Boys’ apparel 1,011,104 1,109,718 (98,614 ) (8.9 )% Toddlers’ apparel 244,550 - 244,550 100.0 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,438 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 16,663,366 $ 15,125,033 $ 1,538,333 10.2 % Boys’ apparel 4,352,523 1,811,357 2,541,169 140.3 % Toddlers’ apparel 818,629 - 818,629 100.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Adjusted EBITDA Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) We define adjusted EBITDA as net loss excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity based compensation expense. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Add (deduct) Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense, net - - (429,045 ) 10,000 Provision for income taxes - 598 1,332 1,122 Depreciation and amortization 5,559 14,780 26,914 72,843 Equity based compensation 328,515 - 328,515 - Adjusted EBITDA $ (1,395,907 ) $ (1,074,538 ) $ (5,307,857 ) $ (3,592,968 ) See also “Non-GAAP Financial Measures”, above. View source version on businesswire.com: https://www.businesswire.com/news/home/20220331005929/en/Contacts Investor Relations Contact: ir@kidpik.com Media: Sarah Tropeano press@kidpik.com
Kidpik Corp. (NASDAQ: PIK) (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for the fourth quarter and full year ended January 1, 2022. Fourth Quarter 2021 Highlights: Revenue, net: was $5.3 million, a year over year decrease of 10% Gross margin: was 58.7%, a year over year increase of 120 basis points from 57.5% in the fourth quarter of 2020 Shipped items: were 477,000 items, compared to 589,000 shipped items in the fourth quarter of 2020 Average shipment keep rate: increased to 70.8%, compared to 64.8% in the fourth quarter of 2020 Net Loss: was $1.9 million or $0.28 loss per share Adjusted EBITDA: was a loss of $1.4 million (see also “Non-GAAP Financial Measures”, below) Full Year 2021 Financial Highlights: Revenue, net: was $21.8 million, a year over year increase of 28.9% Gross margin: was 59.5%, a year over year increase of 110 basis points from 58.4% in 2020 Shipped items: were 2.2 million items, compared to 1.7 million shipped items in 2020 Average shipment keep rate: increased to 69.0% compared to 66.1% last year Net Loss: was $5.9 million, or $1.05 loss per share Adjusted EBITDA: was a loss of $5.3 million (see also “Non-GAAP Financial Measures”, below) “We reported our 2021 full year results, our first full year as a public company, and achieved year-over-year improvement in many of our key metrics, including 29% revenue growth, a 31% increase in gross profit and a 25% increase in items shipped. Our 71% ‘keep rate’ on our surprise fashion subscription box shipments in the fourth quarter was a record for us, and attests to the strength of our proprietary technology and high customer satisfaction,” commented Ezra Dabah, CEO of KIDPIK. “Changes in data access and availability across social media advertising platforms impacted new customer acquisition in the fourth quarter of 2021, and have prompted us to pursue new marketing channels to re-accelerate membership growth. We are implementing a paid influencer campaign, exploring Connected TV and other advertising channels to communicate our convenient and free, personalized styling service. We are focusing on maximizing existing channels and we’re looking to expand upon our current brand partnerships and introduce new collaborations—similar to our recent partnership with Disney,” continued Dabah. “While we anticipate these challenges may remain in place in the near term, we are excited about the growth opportunities in front of us. We believe that our Fall 2022 planned expansion of product offerings, which will include Husky/slim sizes, as well as a 12 and 18 month assortment, will also contribute to our future growth,” concluded Dabah. Revenue by Subscription (For year ended 2021) Active Subscriptions (recurring boxes): increased 36.9% to $15.6 million New Subscriptions (first boxes): decreased 19.8% to $2.9 million Total Subscriptions: increased 23.3% to $18.4 million or 84.4% of total revenue Balance Sheet and Cash Flow Cash at the end of the fourth quarter totaled $8.4 million compared to $0.1 million last year. In November 2021, the Company completed an IPO, issuing 2,117,647 shares of common stock at $8.50 per share for net proceeds of $16.1 million. Net cash used in operating activities increased to $11 million in 2021, compared to $3.6 million of cash used in operating activities in 2020. In November 2021, we paid off in full the $3.2 million open in our line of credit. Earnings Call Information: Today at 4:30pm ET, the Company will host a live teleconference call that is accessible over the internet at the Company’s website, https://investor.kidpik.com and additionally by dialing in at 1-877-407-9039 or at 201-689-8470 for international callers. The conference ID is 13728304. 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 1-844-512-2921, or 1-412-317-6671, internationally, with the Replay Pin Number: 13728304. The replay will be available until April 7, 2022. 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. Non-GAAP Financial Measures We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between companies. This non-GAAP financial measure may be different than similarly titled measures used by other companies. Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation; Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measure, please see the section titled “Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)”, included at the end of this release. Forward-Looking Statements This press release may contain statements that constitute “forward-looking statements” within the federal securities laws, including The Private Securities Litigation Reform Act of 1995, which provide a safe-harbor for forward-looking statements. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements within the meaning of such laws, and are subject to the safe harbor created by such applicable laws. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of KIDPIK to be materially different than those expressed or implied in such statements. The forward-looking statements may include projections and estimates of KIDPIK’s corporate strategies, future operations and plans, including the costs thereof. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including our history of losses, our ability to achieve profitability, our potential need for additional funding and the availability and terms of such funding; our ability to execute our growth strategy and scale our operations and risks associated with such growth, our ability to maintain current members and customers and grow our members and customers; risks associated with the effect of the COVID-19 pandemic, and governmental responses thereto on our operations, those of our vendors, our customers and members and the economy in general; risks associated with our supply chain and third-party service providers, interruptions in the supply of raw materials and merchandise, increased costs of raw materials, products and shipping costs due to inflation, disruptions at our warehouse facility and/or of our data or information services, issues affecting our shipping providers, and disruptions to the internet, any of which may have a material adverse effect on our operations; risks that effect our ability to successfully market our products to key demographics; the effect of data security breaches, malicious code and/or hackers; increased competition and our ability to maintain and strengthen our brand name; changes in consumer tastes and preferences and changing fashion trends; material changes and/or terminations of our relationships with key vendors; significant product returns from customers, excess inventory and our ability to manage our inventory; the effect of trade restrictions and tariffs, increased costs associated therewith and/or decreased availability of products; our ability to innovate, expand our offerings and compete against competitors which may have greater resources; certain anti-dilutive, drag-along and tag-along rights which may be deemed to be held by a former minority stockholder; our significant reliance on related party transactions and loans; the fact that our Chief Executive Officer has majority voting control over the Company; if the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information would decrease, which could harm our business and operating results; our ability to comply with the covenants of our loan and lending agreements and future loan covenants, and the fact that our lending facilities are secured by substantially all of our assets; our ability to prevent credit card and payment fraud; the risk of unauthorized access to confidential information; our ability to protect our intellectual property and trade secrets, claims from third-parties that we have violated their intellectual property or trade secrets and potential lawsuits in connection therewith; our ability to comply with changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, our ability to comply with such new laws or regulations, changes in tax rates; our reliance and retention of our current management; the outcome of future lawsuits, litigation, regulatory matters or claims; the fact that we have a limited operating history; the effect of future acquisitions on our operations and expenses; our significant indebtedness; and others that are included from time to time in filings made by KIDPIK with the Securities and Exchange Commission, many of which are beyond our control, including, but not limited to, in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on KIDPIK’s future results and/or could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. KIDPIK cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws and take no obligation to update or correct information prepared by third parties that is not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Kidpik Corp. Statements of Operations Years Ended January 1, 2022 and January 2, 2021 For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Revenues, net $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 Cost of goods sold 2,177,872 2,492,884 8,836,884 7,046,716 Gross profit 3,094,067 3,367,493 12,997,634 9,889,671 Operating expenses Shipping and handling 1,543,942 1,524,701 6,087,283 4,217,763 Payroll, related costs 1,304,611 902,289 4,258,604 2,947,704 General and administrative 1,969,936 2,015,639 8,288,119 6,317,172 Depreciation and amortization 5,559 14,780 26,914 72,843 Total operating expenses 4,824,048 4,457,409 18,660,920 13,555,482 Operating loss (1,729,981 ) (1,089,916 ) (5,663,286 ) (3,665,811 ) Other (income) expenses Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense - - (429,045 ) 10,000 Total other (income) expenses 127,508 203,274 282,929 521,427 Loss before provision for income taxes (1,857,489 ) (1,293,190 ) (5,946,215 ) (4,187,238 ) Provision for income taxes - 1,332 1,122 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Net loss per share attributable to common stockholders: Basic $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Diluted $ (0.28 ) $ (0.34 ) $ (1.05 ) $ (1.12 ) Weighted average common shares outstanding: Basic 6,700,187 3,776,900 5,648,344 3,746,351 Diluted 6,700,187 3,776,900 5,648,344 3,746,351 Kidpik Corp. Condensed Interim Balance Sheets 2021 2020 Assets Current assets Cash $ 8,415,797 $ 133,484 Restricted cash 4,703 551,812 Accounts receivable 342,274 320,446 Inventory 11,618,597 7,480,072 Prepaid expenses and other current assets 1,726,516 822,580 Total current assets 22,107,887 9,308,394 Leasehold improvements and equipment, net 46,968 27,874 Intangible assets, net - 614 Total assets $ 22,154,855 $ 9,336,882 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 2,560,361 $ 2,960,687 Accounts payable, related party 913,708 599,811 Accrued expenses and other current liabilities 800,972 690,049 Advance payable 932,155 829,030 Loan payable, current portion - 91,429 Short-term debt, related party 2,200,000 - Line of credit - 2,032,118 Total current liabilities 7,407,196 7,203,124 Loan payable, less current portion - 350,923 Total liabilities 7,407,196 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 January 1, 2022 and January 2, 2021, respectively) - - Common stock (par value $0.001, 75,000,000 shares authorized, of which 7,617,834 and 5,075,444 shares are issued and outstanding as of January 1, 2022 and January 2, 2021, respectively) 7,618 5,075 Additional paid-in capital 48,659,225 29,749,397 Accumulated stockholders’ deficit (33,919,184 ) (27,971,637 ) Total stockholders’ equity 14,747,659 1,782,835 Total liabilities and stockholders’ equity $ 22,154,855 $ 9,336,882 Kidpik Corp. Statements of Cash Flows Years Ended January 1, 2022 and January 2, 2021 2021 2020 Cash flows from operating activities Net loss $ (5,947,547 ) $ (4,188,360 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 26,914 72,843 Amortization of debt issuance costs 58,397 44,086 Forgiveness of loan payable (442,352 ) - Equity-based compensation 328,515 - Bad debt expense 783,979 749,912 Changes in operating assets and liabilities: Accounts receivable (805,807 ) (838,797 ) Inventory (4,138,525 ) (728,654 ) Prepaid expenses and other current assets (903,936 ) (366,646 ) Accounts payable (601,264 ) 892,993 Accounts payable, related parties 313,897 599,811 Accrued expenses and other current liabilities 311,862 212,484 Net cash flows used in operating activities (11,015,868 ) (3,550,328 ) Cash flows from investing activities Purchases of leasehold improvements and equipment (45,394 ) (11,470 ) Net cash used in investing activities (45,394 ) (11,470 ) Cash flows from financing activities Proceeds from issuance of long-term debt from related party 2,000,000 1,770,000 Net proceeds (repayment) from line of credit (2,090,515 ) 215,922 Net proceeds from short-term debt, related party 2,200,000 - Net proceeds from advance payable 103,125 187,500 Proceeds from loan payable - 442,352 Receipts of initial public offering, net of offering costs 16,083,856 - Proceeds from issuance of common stock 500,000 1,000,000 Net cash provided by financing activities 18,796,466 3,615,774 Net increase in cash 7,735,204 53,976 Cash and restricted cash, beginning of year 685,296 631,320 Cash and restricted cash, end of year $ 8,420,500 $ 685,296 Supplemental disclosure of cash flow data: Interest paid $ 573,618 $ 374,557 Taxes paid $ 1,332 $ 1,122 Supplemental disclosure of noncash investing and financing activities: Conversion of shareholder debt $ 2,000,000 $ 5,070,000 RESULTS OF OPERATIONS The Company’s revenue, net is disaggregated based on the following categories: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Subscription boxes $ 4,263,840 5,228,875 $ 18,427,057 $ 14,941,257 Amazon sales 729,070 482,228 2,622,884 1,546,906 Online website sales 279,029 149,274 784,577 448,224 Total revenue $ 5,271,939 $ 5,860,377 $ 21,834,518 $ 16,936,387 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Gross margin 58.7% 57.5% 59.5% 58.4 % 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 52 weeks ended (In thousands) (In thousands) January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Shipped Items 477 589 2,157 1,727 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 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Average Shipment Keep Rate 70.8% 64.8% 69.0% 66.1% Revenue by Channel 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 4,263,840 $ 5,228,875 (965,035 ) (18.5 )% Amazon sales 729,070 482,228 246,842 51.2 % Online website sales 279,029 149,274 129,755 86.9 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,437 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by channel Subscription boxes $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Amazon sales 2,622,884 1,546,906 1,075,978 69.6 % Online website sales 784,577 448,224 336,353 75.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Subscription Boxes Revenue 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Subscription boxes revenue from Active subscriptions – recurring boxes $ 15,565,533 $ 11,372,228 $ 4,193,305 36.9 % New subscriptions - first box 2,861,524 3,569,029 (707,505 ) (19.8 )% Total Subscription boxes revenue $ 18,427,057 $ 14,941,257 $ 3,485,800 23.3 % Revenue by Product Line 13 weeks ended January 1, 2022 13 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 4,016,285 $ 4,750,659 $ (734,374 ) (15.5 )% Boys’ apparel 1,011,104 1,109,718 (98,614 ) (8.9 )% Toddlers’ apparel 244,550 - 244,550 100.0 % Total revenue $ 5,271,939 $ 5,860,377 $ (588,438 ) (10.0 )% 52 weeks ended January 1, 2022 52 weeks ended January 2, 2021 Change ($) Change (%) Revenue by product line Girls’ apparel $ 16,663,366 $ 15,125,033 $ 1,538,333 10.2 % Boys’ apparel 4,352,523 1,811,357 2,541,169 140.3 % Toddlers’ apparel 818,629 - 818,629 100.0 % Total revenue $ 21,834,518 $ 16,936,387 $ 4,898,131 28.9 % Adjusted EBITDA Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) We define adjusted EBITDA as net loss excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity based compensation expense. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented: For the 13 weeks ended For the 52 weeks ended January 1, 2022 January 2, 2021 January 1, 2022 January 2, 2021 Net loss $ (1,857,489 ) $ (1,293,190 ) $ (5,947,547 ) $ (4,188,360 ) Add (deduct) Interest expense 127,508 203,274 711,974 511,427 Other (income)/expense, net - - (429,045 ) 10,000 Provision for income taxes - 598 1,332 1,122 Depreciation and amortization 5,559 14,780 26,914 72,843 Equity based compensation 328,515 - 328,515 - Adjusted EBITDA $ (1,395,907 ) $ (1,074,538 ) $ (5,307,857 ) $ (3,592,968 ) See also “Non-GAAP Financial Measures”, above. View source version on businesswire.com: https://www.businesswire.com/news/home/20220331005929/en/