Advisors Retained to Assist in Strategic Review
Process
Interim Financing of $10 Million Secured
Enjoy Technology, Inc. (“Enjoy” or the “Company”) (NASDAQ: ENJY,
ENJYW), a technology-powered service platform reinventing Commerce
at Home, today announced the Company’s financial results for the
quarter ended March 31, 2022. The Company additionally reported
that it had secured interim financing, that its Board of Directors
(“the Board”) has initiated a review of strategic alternatives for
the Company and that the Company is currently engaged in
confidential discussions with potential partners.
First Quarter 2022 Results
- Q1 2022 revenue of $24.0 million
- Average mobile store count of 778 in North America and Europe
in Q1 2022
- Q1 2022 mobile store loss of $10.8 million
- Q1 2022 net loss of $55.2 million and adjusted EBITDA of
$(51.5) million
- Ending cash and cash equivalents balance of $37.3 million as of
March 31, 2022
- Net cash used in operating activities during Q1 2022 was $47.8
million
Strategic Review and Interim Financing Update
The Company announced today that its Board of Directors has
initiated a review of strategic alternatives, including a potential
sale, merger or other strategic transaction, and of the Company’s
financing strategy. As previously disclosed in its Form 10-K for
the year ended December 31, 2021, the Company has experienced
recurring losses from operations and negative cash flows which
require that it engage in additional capital raising activities. As
previously discussed on its earnings call for the fourth quarter
and full year ended December 31, 2021, the Company has been
exploring a variety of capital raising options including partner
funding, debt financing and equity solutions. The Company has
secured interim financing of $10 million from a related party to
help fund its operations as it pursues strategic alternatives. The
Company’s estimated cash and cash equivalents, which includes the
$10 million of related party financing and $6.1 million of customer
prepayments against second quarter sales, was $36.1 million as of
May 12, 2022. The Company is in discussions with multiple financing
sources to attempt to secure additional interim financing that is
needed to fund its operations and other liquidity needs. In the
absence of additional sources of liquidity, management anticipates
that existing cash resources will not be sufficient to meet
operating and liquidity needs beyond early June, 2022. There can be
no assurances the Company will obtain additional capital in amounts
sufficient to fund operations and other liquidity needs. For
further details regarding the Company’s review of strategic
alternatives, financing strategy, liquidity needs and the risks
related thereto, please refer to Enjoy’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2022, filed today at
www.sec.gov. For further details regarding the terms of the $10
million interim financing, please refer to Enjoy’s Current Report
on Form 8-K filed today at www.sec.gov.
The Company has retained Centerview Partners as its financial
advisor to assist with the strategic review and has also engaged
global consulting firm AlixPartners to advise on the Company’s
finances during this review period. Enjoy is in the early stages of
its strategic review and has not set a timetable for completion of
the review process. The Company does not intend to disclose or
comment on interim developments except to the extent required by
law. There can be no assurance that the process will result in any
transaction or strategic change at this time.
“We have commenced the strategic evaluation process to ensure we
are exploring all potential paths that we hope will maximize the
value of the Company for our stakeholders,” said Ron Johnson, CEO
of Enjoy. “I’m very proud of our team’s continued hard work serving
our customers during this challenging time.”
First Quarter Consolidated Summary of Key Performance Metrics
(Unaudited)
(Dollars in thousands except Daily Mobile
Stores amounts)
Three Months Ended March 31,
2022
Three Months Ended March 31,
2021
Change
Total Revenue
$
24,024
$
19,346
24.2
%
North America
$
20,764
$
15,515
33.8
%
Europe
$
3,260
$
3,831
(14.9
)%
Daily Mobile Stores
778
579
34.4
%
North America
649
427
52.0
%
Europe
129
152
(15.1
)%
Daily Revenue Per Mobile Store*
$
343
$
371
(7.5
)%
North America
$
355
$
404
(12.1
)%
Europe
$
281
$
280
0.4
%
Mobile Store Profit/(Loss)
$
(10,786
)
$
(4,822
)
(123.7
)%
Mobile Store Margin
(44.9
)%
(24.9
)%
(20.0
) pp
Net Income/(Loss)
$
(55,245
)
$
(39,466
)
(40.0
)%
Adjusted EBITDA
$
(51,522
)
$
(34,076
)
(51.2
)%
Daily Mobile Store Count Summary (Unaudited)
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Quarterly Average
579
588
592
770
778
North America
427
438
466
650
649
Europe
152
150
126
120
129
Last Month of the Quarter
Average
590
595
603
859
798
North America
438
453
477
732
666
Europe
152
142
126
127
132
About Enjoy Technology
Enjoy Technology, Inc. (Nasdaq: ENJY, ENJYW) is a
technology-powered platform reinventing “Commerce at Home” to bring
the best of the store directly to the customer. Enjoy has formed
multi-year commercial relationships with some of the world’s
leading consumer brands to bring the products, services and
subscriptions their customers love through the door directly in the
comfort and convenience of their homes. Co-founded by former Apple
executive Ron Johnson, Enjoy has pioneered a new retail experience
that can do everything a traditional retail experience offers, but
better, through its mobile stores. Enjoy currently operates in the
United States, Canada and the United Kingdom. Headquartered in Palo
Alto, CA, Enjoy is leading the reinvention of “Commerce at Home.”
To learn more about Enjoy, please visit: www.enjoy.com.
Conference Call
As a result of today’s announcement, the Company has decided to
not host a conference call in connection with this earnings
release.
Key Performance Metrics
Management regularly reviews several metrics, including the
following key metrics as noted in the table above, to evaluate our
business, measure our performance, identify trends affecting our
business, formulate financial projections and make strategic
decisions. The reasons we believe these key performance metrics are
useful to investors are provided below.
Daily Mobile Stores: Daily Mobile Stores represent the
number of Mobile Stores we operate on a given day. This is
calculated by dividing the total number of visit-serving Expert
shifts in a given reporting period by the number of calendar days
in that period. A visit-serving Expert shift is defined as an
Expert that is scheduled to serve consumers on a given day. We
believe this is the primary measure of scale and growth of our
retail footprint.
Daily Revenue Per Mobile Store: Daily Revenue Per Mobile
Store is defined as the average daily revenue generated per Daily
Mobile Store. This metric is calculated by dividing the revenue
generated in a given reporting period by the product of Daily
Mobile Stores and the number of days in that given reporting
period. We believe growth in Daily Revenue Per Mobile Store is a
key driver for increasing the Company’s profitability.
Mobile Store Loss and Mobile Store Margin: Mobile Store
Loss is a measure prepared in accordance with GAAP and is defined
as revenue less cost of revenue. Mobile Store Margin is Mobile
Store Loss as a percentage of revenue. We view this metric as an
important measure of business performance as it captures Mobile
Store profitability and provides comparability across reporting
periods.
Non-GAAP Financial Measures
This release contains information, such as Adjusted EBITDA,
which has not been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) and should be
considered in addition to results prepared in accordance with GAAP
and should not be considered as a substitute for or superior to
GAAP results. Enjoy’s management believes that Adjusted EBITDA
provides relevant and useful information to management and
investors to assess its performance to that of prior periods for
trend analyses and for budgeting and planning purposes. Adjusted
EBITDA is a supplemental measure of Enjoy’s performance that is
neither required by nor presented in accordance with GAAP. This
measure is limited in its usefulness and should not be considered a
substitute for GAAP metrics such as loss from operations, net loss,
or any other performance measures derived in accordance with GAAP
and may not be comparable to similar measures used by other
companies. Adjusted EBITDA is defined as net loss, adjusted for
interest expense, provision for income taxes, depreciation and
amortization, stock-based compensation, loss on convertible loans,
one time transaction-related costs, interest income and other
income, net. In addition, Adjusted EBITDA is subject to inherent
limitations as it reflects the exercise of judgments by Enjoy’s
management about which expense and income are excluded or included
in determining this non-GAAP financial measure. In order to
compensate for these limitations, Enjoy’s management presents
non-GAAP financial measures in connection with GAAP results. For
more information regarding the non-GAAP financial measures
discussed in this release, please see “Reconciliation of GAAP to
Non-GAAP Financial Measures” below.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of the federal securities laws. These statements include,
but are not limited to, statements regarding Enjoy’s plans for, and
timing of, the review of strategic alternatives and any additional
financing opportunities, including potentially obtaining additional
interim financing which Enjoy believes will be needed to fund
operations and other liquidity needs by early June 2022, and the
potential need to file a voluntary petition for relief under the
United States Bankruptcy Code in order to implement a restructuring
plan or liquidation. All statements other than statements of
historical fact contained in this release, including statements
regarding Enjoy’s future operating results and financial position,
business strategy and plans, objectives of management for future
operations are forward-looking statements. These statements are
based on Enjoy’s current expectations, assumptions, estimates and
projections. In some cases, you can identify forward-looking
statements by terms such as “believe,” “project,” “expect,”
“anticipate,” “estimate,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result” or the negative of these
terms or other similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied
in the forward-looking statements, including without limitation,
risks that our review of strategic alternatives and plans to
improve our liquidity and financial position in response to the
substantial doubt about our ability to continue as a going concern
will not result in a transaction satisfactory to holders of our
common stock or any change at all; risks related to our ability to
obtain additional financing or capital in amounts sufficient, or on
favorable terms, to fund our operations; risks that any future
capital raising activities may be limited and may lead to potential
dilution to our stockholders; risk that we will not be able to
continue as a going concern and holders of our common stock could
suffer a total loss of their investment; risks that our pursuit of
the additional capital and strategic alternatives will consume a
substantial portion of the time and attention of our management and
require additional capital resources and may be disruptive to our
business; risks related to Enjoy potentially seeking protection
under the United States Bankruptcy Code; our history of net losses
and our ability to achieve profitability in the future; risks
related to the impact of the COVID 19 pandemic on our business, and
other factors described in Enjoy’s Annual Report on Form 10-K for
the year ended December 31, 2021 and Enjoy’ other filings with the
SEC. Because forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or
quantified, you should not rely on these forward-looking statements
as predictions of future events. Forward-looking statements speak
only as of the date they are made. New risks and uncertainties
arise over time, and it is not possible for Enjoy to predict those
events or how they may affect Enjoy. If a change to the events and
circumstances reflected in Enjoy’s forward-looking statements
occurs, Enjoy’s business, financial condition and operating results
may vary materially from those expressed in Enjoy’s forward-looking
statements. Except as required by applicable law, Enjoy does not
plan to publicly update or revise any forward-looking statements
contained herein, whether as a result of any new information,
future events or otherwise.
Enjoy Technology, Inc.
Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Amounts in thousands, except
share and per share amounts)
(Unaudited)
Three Months Ended March
31,
2022
2021
Revenue
$
24,024
$
19,346
Operating expenses:
Cost of revenue
34,810
24,168
Operations and technology
27,332
19,233
General and administrative
19,680
12,098
Total operating expenses
81,822
55,499
Loss from operations
(57,798
)
(36,153
)
Loss on convertible loans
—
(1,865
)
Interest expense
(38
)
(1,407
)
Interest income
2
2
Other income, net
2,623
134
Loss before provision for income taxes
(55,211
)
(39,289
)
Provision for income taxes
34
177
Net loss
$
(55,245
)
$
(39,466
)
Other comprehensive loss, net of tax
Cumulative translation adjustment
(202
)
(4
)
Total comprehensive loss
$
(55,447
)
$
(39,470
)
Net loss per share, basic and diluted
$
(0.46
)
$
(1.81
)
Weighted average shares used in computing
net loss per share, basic and diluted
119,795,897
21,757,502
Enjoy Technology, Inc.
Condensed Consolidated Balance
Sheets
(Amounts in thousands)
(Unaudited)
March 31, 2022
December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
37,277
$
85,836
Restricted cash
1,710
1,710
Accounts receivable, net
5,355
9,977
Prepaid expenses and other current
assets
3,251
4,159
Total current assets
47,593
101,682
Property and equipment, net
16,372
15,945
Operating lease right-of-use assets
40,144
—
Intangible assets, net
842
867
Other assets
6,660
6,631
Total assets
$
111,611
$
125,125
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
5,961
$
6,102
Accrued expenses and other current
liabilities
16,420
20,110
Operating lease liabilities, current
14,467
—
Total current liabilities
36,848
26,212
Operating lease liabilities,
non-current
29,193
—
Derivative warrant liabilities
3,915
6,577
Total liabilities
69,956
32,789
STOCKHOLDERS’ EQUITY
Common stock
12
12
Additional paid-in capital
738,908
734,142
Accumulated other comprehensive income
522
724
Accumulated deficit
(697,787
)
(642,542
)
Total stockholders’ equity
41,655
92,336
Total liabilities and stockholders’
equity
$
111,611
$
125,125
Enjoy Technology, Inc.
Condensed Consolidated
Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Cash flows from operating activities:
Net loss
$
(55,245
)
$
(39,466
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,155
916
Stock-based compensation
5,121
878
Loss on asset disposal
13
—
Accretion of debt discount
—
289
Non-cash operating lease expense
4,227
—
Revaluation of warrants
(2,662
)
(26
)
Foreign currency transaction (gain)
loss
38
(79
)
Revaluation of convertible debt
—
1,865
Changes in operating assets and
liabilities:
Accounts receivable
4,560
(239
)
Prepaid expenses and other current
assets
743
534
Other assets
(207
)
(161
)
Operating lease liabilities
(4,300
)
—
Accounts payable
(513
)
(267
)
Accrued expenses and other current
liabilities
(690
)
488
Net cash used in operating activities
(47,760
)
(35,268
)
Cash flows from investing activities:
Purchases of property and equipment
(437
)
(537
)
Net cash used in investing activities
(437
)
(537
)
Cash flows from financing activities:
Proceeds from convertible loan
—
200
Proceeds from issuance of redeemable
convertible preferred stock
—
15,000
Proceeds from issuance of common stock
118
423
Payment of deferred financing costs
—
(695
)
Tax-related withholding of common
stock
(473
)
—
Net cash (used in) provided by financing
activities
(355
)
14,928
Effect of exchange rate on cash, cash
equivalents and restricted cash
(7
)
(26
)
Net decrease in cash, cash equivalents and
restricted cash
(48,559
)
(20,903
)
Cash, cash equivalents and restricted
cash, beginning of period
87,546
63,946
Cash, cash equivalents and restricted
cash, end of period
$
38,987
$
43,043
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
38
$
1,083
Supplemental disclosure of non-cash
operating and financing activities:
Property and equipment, net included in
accounts payable
$
501
$
91
Property and equipment, net included in
accrued expenses and other current liabilities
$
658
$
—
Operating lease ROU assets obtained in
exchange for lease obligations
$
937
$
—
Non-cash interest
$
—
$
325
Gain on extinguishment of convertible
loan
$
—
$
36,782
Deferred transaction costs included in
accounts payable
$
—
$
1,291
Deferred transaction costs included in
accrued expenses and other current liabilities
$
—
$
1,030
Enjoy Technology, Inc.
Reconciliation of GAAP To
Non-GAAP Financial Measures
(Amounts in thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Net loss
$
(55,245
)
$
(39,466
)
Add back:
Interest expense
38
1,407
Provision for income taxes
34
177
Depreciation and amortization
1,155
916
Stock-based compensation
5,121
878
Loss on convertible loans
—
1,865
One time transaction-related costs
—
283
Deduct:
Interest income
(2
)
(2
)
Other income, net
(2,623
)
(134
)
Adjusted EBITDA
$
(51,522
)
$
(34,076
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220516005957/en/
Investors Heather Davis Vice President of Investor Relations
heather.davis@enjoy.com 612-308-3222 Media Abernathy MacGregor Tom
Johnson and Dan Scorpio tbj@abmac.com / dps@abmac.com 917-747-6990
/ 646-899-8118
Enjoy Technology (NASDAQ:ENJY)
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