Waitr Holdings Inc (WTRH) 2021 Q3 法說會逐字稿

Good afternoon, everyone. I would like to welcome all of you to the Waitr Holdings, Inc. Third Quarter 2021 Conference Call. With us today are Waitr's Chief Executive Officer, Carl Grimstad; and Chief Financial Officer, Leo Bogdanov. By now, you should have access to the company's earnings press release. If not, it may be found at sec.gov or the Investor Relations website at investors.waitrapp.com.

Before I turn the call over to the management, I would like to remind you that certain statements and projections in this call about future business and financial results constitute forward-looking statements. These statements are based on management's current business and market expectations, and actual results could differ materially from those projected in the forward-looking statements. Please see the risk factors contained in the company's annual report on Form 10-K and in your Form 10-Qs for the discussion of risks that may cause actual results to vary from these forward-looking statements.

Finally, please note that on today's call, management may refer to non-GAAP financial measures. Please refer to Waitr's Third Quarter 2021 earnings release for a full reconciliation of its non-GAAP financial measures to the most comparable GAAP financial measures.

With that, I would like to now turn the call over to Waitr's CEO, Carl Grimstad, who will give you an overview of the company's business activities and developments for the third quarter of 2021. He will then turn the call over to Leo Bogdanov, who will provide an overview of the company's operating and financial results. We will then open the call for Q&A. Carl, please go ahead.

Thank you. Hello, everyone, and welcome to the third quarter earnings call. In the third quarter of 2021, we had several hurricanes hit our core Southeast markets, and we are continuing to recover from these events. However, we have remained nimble. And despite these adverse weather-related events, we have sequentially increased EBITDA from last quarter, primarily as a result of increased operational efficiencies. We continue to methodically deploy our capital in various initiatives in order to position the company for long-term growth. These include investments in our technology platform with new product offerings, expansion through the acquisition of complementary businesses and solidifying key partnership opportunities within our industry.

We recently broadened our partnership with Olo, a major digital food ordering platform for the restaurant industry, by joining their dispatch network. This offering enables us to access a wider universe of restaurants and diners by utilizing our logistics network to fulfill incremental orders generated through the restaurant's owned websites and apps. We believe these continued integrations are key in solidifying our presence in the on-demand delivery sector.

During the quarter, we also closed the acquisitions of Flow Payments, ProMerchant and Cape Cod Merchant Services, 3 payments companies that provide services in the space of merchant processing. The acquisition of these businesses is an important milestone in our growth strategy to broaden the company's capabilities and diversify its revenue streams beyond third-party food delivery. Our goal is to continue to expand our ecosystem, which today is comprised of restaurants, diners and independent contract drivers, and the product and services that we offer to these constituents. We are excited to build on this ever-expanding ecosystem and being able to add a full suite of fundamental payment processing solutions to our current service offering.

As we near the end of fiscal 2021, we are continuing to focus on fundamental strategic initiatives and realize efficiencies within our core operational process. Now I'll turn it over to Leo, our Chief Financial Officer, for a recap of the third quarter results.

Thank you, Carl. I'd like to now review our third quarter 2021 financial results. Revenue for the third quarter of 2021 was $43.4 million compared to $52.7 million in the third quarter of 2020. For the 9 months ended September 30, 2021, revenue was $143.5 million compared to $157.5 million in the 9 months ended September 30, 2020. Adjusted EBITDA for the third quarter of 2021 was $3.1 million compared to $2.5 million in the second quarter of 2021 and $13 million in the third quarter of 2020.

Net income for the third quarter of 2021 was $12.3 million compared to $4.6 million in the third quarter of 2020. Net income per share for the third quarter of 2021 was $0.09 compared to net income per share of $0.04 for the third quarter of 2020.

Cash on hand totaled $43.5 million as of September 30, 2021. Total outstanding long-term debt as of September 30, 2021, was $84.5 million, consisting primarily of our $35 million term loans and $49.5 million of convertible notes.

That concludes the recap of our third quarter 2021 financial results. We will now go into a short Q&A session.

(Operator Instructions) We'll take our first question from Alex Fuhrman from Craig-Hallum Capital Group.

And regarding all of the hurricanes that have happened, I certainly hope all of your employees and drivers and their families are managing well and wish you all the best for a speedy recovery. I wanted to ask about the performance of the company through all of those turbulent times. Obviously, Louisiana is a huge market for you. Really impressive, I think, to see that Q3 profitability was actually even better than Q2 despite the really unprecedented back-to-back hurricanes that have hit New Orleans and the rest of Louisiana. Can you talk about where some of those operating efficiencies are coming from? I mean, I have to imagine the ramp-up in profits from Q2 to Q3 would have been even better if we had a more kind of historical norm hurricane season in Q3. Can you give us a little bit more color on where that's coming from? It looks like, just on the income statement, really strong leverage of operations and support. Any color on what's really driving that would be helpful.

It's really across the board. It's headcount mostly. And it's a little bit tricky. Our 18-month or so history with the business has been tumultuous, right? We've had the COVID pandemic, we've had all of these storms. And it's tricky matching your order flow to what's the proper headcount and support foundation to satisfy the demand. And we've had all of these outside forces, whether it's an act of God like a hurricane or an act of the federal government in the form of subsidies. And I've always said from the beginning, these markets that we're in, COVID was one dynamic, but the individual diner and his economic well-being really drives this business.

So you think about what happens in the disruption of a storm, you have the initial disruption, like restaurants are closed and roads are not passable, and you have power outages and what have you. Then you have the very lasting impacts where people might leave the area for a period of time. They have homes that they can't live in, and their financial budgets are constrained. And more than likely, they're fixing their roof instead of ordering chicken wings. So it's hard to even, Alex, to quantify the impact in the quarter because I think it -- we're still feeling it, so to speak. But high marks to our team because we anticipated that there would be a lasting effect from these storms, and we were proactive in looking at our expense levels and head count and adjusted very rapidly. And I think we'll continue to see the benefits of that pull through as we finish out the year.

Okay, Carl. That's helpful. And then I wanted to ask about your M&A strategy. We've seen a number of acquisitions you've made recently. Can you talk about what some of these targets bring to Waitr? Is it about capabilities that are more efficient to buy than build? Without giving away too much of the secret sauce, would love to kind of get a sense of how some of these acquired assets could play into your strategy next year.

Yes. So you just think about our strategy, and it's very definitely obvious to me that the -- our equity is going to trade on events right? It's not going to be pulled forward on any given day because we did a couple of thousand extra orders in the quarter, right? It's going to be event-driven with us executing on the strategy that I've outlined a number of times. And that is we have this ecosystem, diners, drivers merchants, if you will, right now, restaurants, right? 90-plus percent of our revenue comes from delivering prepared foods. We are going to sell these constituents more products, basic products, right? So the acquisition -- and we're going to be more diverse in the verticals that -- we've talked in the past about alcohol and convenience and what have you, but there are several verticals that we think have less competition and we can apply our core competencies, which very definitely are last-mile delivery.

We've proven that we can deliver things in less than an hour profitably. We come from the payments world. The acquisitions of the 3 payments companies give us the capability to attack our existing base of restaurants with a full suite of payment products. Not to mention, they have within their own businesses footholds in other verticals that we can apply our core competency of last mile delivery to as well. So you'll -- that's where I'm focused, right? I'm focused on expanding that group of constituents and enhancing the platform so that we have other basic products and services to sell into that group of constituents.

Hi, Leo. We have no further question at this time. Would you like for me to give one more prompt?

I think we're -- if there aren't any other questions, we can conclude the call. Thanks again. If there are any follow-up questions, please submit them to our Investor Relations or our website. Thank you again.

That concludes today's conference call. Thank you, everyone, for your participation. You may now disconnect.