The Company Increased Total Revenue and Number of Retail Deliveries Both by 59% in Fiscal 2022, Which was Offset by a 51% Increase in Comprehensive Loss in the Same Period
VANCOUVER, BC, Jan. 30, 2023 /CNW/ – Just Kitchen Holdings Corp. (“JustKitchen” or the “Company”) (TSXV: JK) (OTCQB: JKHCF) (FRA: 68Z), an operator of ghost kitchens specializing in the development of delivery-only food brands, announces that it has filed its audited annual financial results for the fiscal year ending September 30, 2022, the highlights of which are included in this news release. The full set of Consolidated Financial Statements and Management Discussion and Analysis can be viewed by visiting the Company’s website at en.justkitchen.com or its profile page on SEDAR at www.sedar.com.
- Food and beverage sales of $4,591,363 for the three-month period ended September 30, 2022 compared to $4,443,746 for the three-month period ended September 30, 2021; similarly, sales reached $18,968,696 for the twelve-month period ended September 30, 2022 compared to $11,926,094 reported for the twelve-month period ended September 30, 2021;
- Sales volume rose to 1,159,020 retail customer food orders in fiscal 2022 from 730,665 retail customer food orders in the prior fiscal year, which was an increase of 59%;
- Number of ghost kitchens increased to 29 with an average retail delivery size of $14.83 per order in the 2022 fiscal year, from 20 ghost kitchens with an average retail delivery size of $15.20 per order in the previous fiscal year;
- Adjusted EBITDA losses were $2,475,796 and $13,036,338 for the three- and twelve-month periods ended September 30, 2022, respectively, as compared to Adjusted EBITDA losses of $2,263,445 and $7,801,567 for the same three- and twelve-month periods of the prior year, respectively, primarily as the result of an overall increase in business activities and an increase in general and administrative costs due to higher amounts for salaries, professional fees as well as advertising and marketing. Non-cash stock-based compensation included in general and administrative expenses were $629,740 and $2,155,618 for the three- and twelve-month periods ended September 30, 2022, respectively; and
- Net losses were $3,953,817 and $17,517,291 for the three- and twelve-month periods ended September 30, 2022, respectively, as compared to $3,440,775 and $11,237,581 for the same three- and twelve-month periods of the prior year, respectively, due to the same primary reasons listed above.
“As another fiscal year has gone by, I would like to thank our employees, B2B and B2C customers, partners, directors and advisors for helping JustKitchen reach new heights on several fronts. Our company exited the fiscal year with many reasons to feel proud, despite facing some new challenges as well.” said Jason Chen, Co-Founder and Chief Executive Officer of JustKitchen.
“As we transitioned to the 2023 fiscal period, our team continued entering into new arrangements and bringing great new food brands to market for the benefit of our customers, while also making mature business decisions to position JustKitchen for the long term. Controlling costs, optimizing operations, reducing waste and targeting opportunities with higher margins and positive returns on investment are our current priorities,” added Mr. Chen.
Number of kitchens
Revenue from retail customers
Revenue from business customers
Number of retail deliveries
Average retail delivery size
Basic loss per share
Diluted loss per share
The following is a reconciliation of Adjusted EBITDA1 to Income (Loss) from Operations:
Loss for the period
Adjusted EBITDA1 Loss
Adjusted EBITDA is a financial measure that does not have a standardized meaning under IFRS. Adjusted EBITDA is defined as earnings before interest expense, depreciation, amortization, and stock-based compensation. As there is no standardized method of calculating Adjusted EBITDA, it may not be directly comparable with similarly titled measures used by other companies. The Company considers Adjusted EBITDA to be a relevant indicator for measuring trends in performance and its ability to generate funds to service its debt and to meet its future working capital and capital expenditure requirements. Adjusted EBITDA is not a generally accepted earnings measure and should not be considered in isolation or as an alternative to net income (loss), cash flows or other measures of performance prepared in accordance with IFRS.
- Continued implementing margin improvement and operations optimization measures after its rapid growth phase;
- Opened “Co-Op” as a Collaborative Culinary and Dine-In Experience in Taiwan;
- Launched the “Let’s Eat” Brand with “Hi! Come in”, the Hit Reality TV Show on Netflix Taiwan, as well as the “Koko-Bap” Korean Bibimbap Brand;
- Launched MrBeast BurgerTM from its ghost kitchens in Malaysia;
- Expanded its B2B and D2C offerings through new arrangements;
- Opened new ghost kitchens and secured more locations in Hong Kong; and
- Licensed MrBeast BurgerTM and other brands from Virtual Dining ConceptsTM for multiple Asian markets.
Subsequent to its period of rapid expanding within the Asian market, and as previously announced, JustKitchen is now continuing its focus on sustainable growth by improving margins to reach profitability. To achieve this new focus, the Company has closed underperforming operations, reduced capex by not opening any new B2C kitchens and focusing on improving efficiency in existing kitchens and its B2C operations, lowered headcount, and implementing initiatives such as reducing marketing costs and lowering general and administrative expenditures and head office count, to manage both short and long-term liquidity and to establish a path towards profitability
The Company continues to implement strategies to reduce operating expenses and target opportunities that require less capital investment including:
- Lowering cost of goods sold;
- Focusing on B2B clients that provide higher margins;
- Achieving effective cost-cutting;
- Focusing on driving store-level profitability;
- Targeting high-margin market(s); and
- Building alternative and recurring revenue streams.
As of September 30, 2022, the Company had cash and cash equivalents of $2,764,552. Although reduced in recent months through the initiatives discussed above the Company continues to have a material monthly cash burn which continues to reduce its cash position and has strained its short-term liquidity.
The Company also announces that it will undertake a non-brokered private placement equity financing for aggregate gross proceeds of up to $2,500,000 (the “Offering“). Pursuant to the terms of the Offering, the Company will issue up to 25,000,000 common shares (each a “Share“) at a price of $0.10 per Share. The Company intends to use the net proceeds of the Offering for general working capital purposes.
Just Kitchen Holdings Corp. (the “Company” or “Just Kitchen“) is primarily an operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery-only food brands for customers and businesses. The Company currently operates in Taiwan, Hong Kong, the Philippines and Malaysia. It has also signed an agreement that will allow JustKitchen to sell several of its proprietary food brands in Japan and it has also signed a brand swap agreement in India. Where appropriate, JustKitchen utilizes a hub-and-spoke operating model, which features advanced food preparation taking place at larger hub kitchens and final meal preparation taking place at smaller spoke kitchens located in areas with higher population densities. The Company combines this operating model with online and mobile application-based food ordering via its proprietary mobile food ordering app and other third-party ordering apps. Delivery is fulfilled by third-party delivery companies, to minimize capital investments and operating expenses and reach more customers in underserved markets. The Company’s other business, JustMarket, is an e-commerce grocery delivery platform that allows customers to purchase groceries for delivery or add select grocery items to meals ordered through JustKitchen.
For more information about the Company, please visit investors.justkitchen.com. JustKitchen’s final prospectus, financial statements and management’s discussion and analysis, among other documents, are all available on the Company’s profile page on SEDAR at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This news release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as “anticipates”, “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed”, “positioned” and other similar words, or statements that certain events or conditions “may” or “will” occur including but not limited to the Company’s comments regarding focusing on widening margins and eliminating excess costs and optimizing operations; and undertaking a non-brokered private placement equity financing. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks, including those risk factors identified in the Company’s prospectus dated March 26, 2021, and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
SOURCE Just Kitchen Holdings Corp.
For further information: Just Kitchen Holdings Corp., Suite 1430, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6; Nick Kuzyk, Investor Relations, Toll-Free: 1-855-JST-KCHN (1-855-578-5246), Email: email@example.com