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Kidpik Corp. (PIK) SEC Filing 8-K Material Event for the period ending Tuesday, December 21, 2021

Kidpik Corp.

CIK: 1861522 Ticker: PIK

 

Exhibit 99.1

 

Kidpik Reports Third Quarter 2021 Financial Results

 

NEW YORK--Kidpik Corp. (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for its third quarter of 2021.

 

Quarter highlights:

 

Revenue, net: increased 20.3% to $5,574,099 compared to $4,634,529 in the third quarter of 2020.

 

Subscription box revenue, net: was 85.1% of total revenue in Q3 2021 or $4,745,933, compared to $4,016,696 in Q3 2020.

 

Gross Margin: was 58.2% compared to 59.3% in the third quarter of 2020

 

Shipped items: increased by 18.9% to 559,000 shipped items, compared to 470,000 shipped items in the third quarter of 2020

 

Average shipments keep rate: was 68.8% compared to 68.2% in the third quarter of 2020

 

Net Loss: was $1,189,356 or $(0.22) loss per share, compared to $978,251 or $(0.26) loss per share in the third quarter of 2020.

 

“We’re pleased to report Q3 and nine-month net sales of $5.6 million and $16.6 million, an increase of 20.3% and 49.5% respectively, with nine-month subscription-based recurring revenue of $14.2 million or 85.5% of total revenue,” said Ezra Dabah, CEO of Kidpik Corp. “Our performance was driven mainly by the introduction of boys’ subscription boxes, the continued growth of our girls’ subscriptions and the newly introduced toddler box collection.”

 

“We are happy to have completed an upsized IPO of $18 million and to be listed on Nasdaq after the quarter end,” continued Mr. Dabah. “Strengthening our balance sheet gives us the ability to make further investments in building our brand, growing our revenue, and driving shareholder value. We look forward to achieving our growth objectives by leveraging our merchandising expertise, the technology we have built, and the knowledge our team has gained over the last five years in the rapidly growing subscription industry.”

 

 

 

 

Revenue by Subscription (Measured for 39 weeks ended October 2, 2021)

 

Active Subscriptions (recurring boxes): increased 55.7% to $11.5 million

 

New Subscriptions (first boxes): increased 14.9% to $2.7 million

 

Total Subscriptions: increased 45.8% to $14.2 million or 85.5% of total revenue.

 

Balance Sheet and Cash Flow

 

Cash and cash equivalents at the end of the third quarter totaled $204,877 compared to $133,484 million at January 2, 2021. After quarter end, Kidpik completed an IPO, issuing 2,117,647 shares of common stock at a public offering price of $8.50 per share, resulting in aggregate net proceeds of approximately $16.1 million.

 

Line of credit at the end of the third quarter totaled $3.2 million, compared to $2.5 million at the end of fiscal year 2020. In November 2021, the Company paid in full the outstanding line of credit amount.

 

Net cash used in operating activities increased to $5,637,368 for the 39 weeks ended October 2, 2021, compared to $2,385,563 of cash used in operating activities during the 39 weeks ended September 26, 2020.

 

 

 

 

Kidpik Corp.

Condensed Interim Statements of Operations

(Unaudited)

 

   For the 13 weeks ended   For the 39 weeks ended 
  

October 2,

2021

  

September 26,

2020

  

October 2,

2021

  

September 26,

2020

 
Revenues, net  $5,574,099   $4,634,529   $16,562,579   $11,076,010 
                     
Cost of goods sold   2,327,335    1,884,898    6,659,012    4,553,832 
                     
Gross profit   3,246,764    2,749,631    9,903,567    6,522,178 
                     
Operating expenses                    
Shipping and handling   1,451,065    1,047,097    4,543,341    2,693,062 
Payroll and related costs   1,023,241    753,222    2,953,993    2,045,415 
General and administrative   2,169,283    1,790,401    6,318,183    4,301,533 
Depreciation and amortization   5,226    13,770    21,355    58,063 
Total operating expenses   4,648,815    3,604,490    13,836,872    9,098,073 
Operating loss   (1,402,051)   (854,859)   (3,933,305)   (2,575,895)
Other (income) expenses                    
Interest expense   229,657    122,567    584,466    308,153 
Other (income)/expense   (442,352)   -    (429,045)   10,000 
Total other (income) expenses   (212,695)   122,567    155,421    318,153 
                     
Loss before provision for income taxes   (1,189,356)   (977,426)   (4,088,726)   (2,894,048)
                     
Provision for income taxes   -    825    1,332    1,122 
                     
Net loss  $(1,189,356)  $(978,251)  $(4,090,058)  $(2,895,170)
                     
Net loss per share attributable to common stockholders:                    
Basic  $(0.22)  $(0.26)  $(0.77)  $(0.78)
Diluted  $(0.22)  $(0.26)  $(0.77)  $(0.78)
                     
Weighted average common shares outstanding:                    
Basic   5,500,187    3,735,457    5,300,308    3,735,457 
Diluted   5,500,187    3,735,457    5,300,308    3,735,457 

 

 

 

 

Kidpik Corp.

Condensed Interim Balance Sheets

 

   October 2,
2021
   January 2, 
   (Unaudited)   2021 
Assets          
Current assets          
Cash  $204,877   $133,484 
Restricted cash   149,268    551,812 
Accounts receivable   373,071    320,446 
Inventory   8,604,004    7,480,072 
Prepaid expenses and other current assets   1,115,264    822,580 
Total current assets   10,446,484    9,308,394 
           
Leasehold improvements and equipment, net   7,133    27,874 
Intangible assets, net   -    614 
Total assets  $10,453,617   $9,336,882 
           
Liabilities and Stockholders’ Equity          
           
Current liabilities          
Accounts payable  $2,837,075   $2,960,687 
Due to related party   1,219,038    599,811 
Accrued expenses and other current liabilities   507,985    690,049 
Advance payable   1,196,742    829,030 
Loan payable, current portion   -    91,429 
Short-term debt, related party   1,300,000    - 
Line of credit   3,200,000    2,032,118 
Total current liabilities   10,260,840    7,203,124 
           
Loan payable, less current portion   -    350,923 
           
Total liabilities   10,260,840    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 October 2, 2021 and January 2, 2021)   -    - 
Common stock (par value $0.001, 75,000,000 shares authorized, of which 5,500,187 and 5,075,444 shares are issued and outstanding as of October 2, 2021 and January 2, 2021)   5,500    5,075 
Additional paid-in capital   32,248,972    29,749,397 
Accumulated stockholders’ deficit   (32,061,695)   (27,971,637)
Total stockholders’ equity   192,777    1,782,835 
Total liabilities and stockholders’ equity  $10,453,617   $9,336,882 

 

 

 

 

Kidpik Corp.

Condensed Interim Statements of Cash Flows

(Unaudited)

 

   For the 39 weeks ended 
   October 2,
2021
   September 26,
2020
 
Cash flows from operating activities          
           
Net loss  $(4,090,058)  $(2,895,170)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   21,355    58,062 
Amortization of debt issuance costs   29,377    20,955 
Forgiveness of loan payable   (442,352)   - 
Bad debt expense   614,239    348,236 
Changes in operating assets and liabilities:          
Accounts receivable   (666,864)   (320,236)
Inventory   (1,123,932)   (482,361)
Prepaid expenses and other current assets   (292,684)   (116,957)
Accounts payable   (123,612)   660,541 
Accounts payable, related parties   619,227    309,747 
Accrued expenses and other current liabilities   (182,064)   31,620 
Net cash used in operating activities   (5,637,368)   (2,385,563)
           
Cash flows from investing activities          
Purchases of leasehold improvements and equipment   -    (7,683)
Net cash used in investing activities   -    (7,683)
           
Cash flows from financing activities          
Proceeds from issuance of long-term debt from related party   2,000,000    1,000,000 
Proceeds from issuance of common stock   500,000    - 
Net proceeds (repayments) from line of credit   1,138,505    (63,365)
Net proceeds (repayments) from advance payable   367,712    (274,374)
Proceeds from loan payable   -    442,352 
Proceeds from loan payable related party   1,300,000    810,000 
Net cash provided by financing activities   5,306,217    1,914,613 
Net decrease in cash and restricted cash   (331,151)   (478,633)
           
Cash and restricted cash, beginning of period   685,296    631,320 
Cash and restricted cash, end of period  $354,145   $152,687 
           
Reconciliation of cash and restricted cash:          
Cash  $204,877   $99,297 
Restricted cash   149,268    53,390 
   $354,145   $152,687 
Supplemental disclosure of cash flow data:          
Interest paid  $500,905   $291,056 
Taxes paid  $1,332   $297 
Supplemental disclosure of noncash financing activities:          
Conversion of shareholder debt  $2,000,000   $- 

 

 

 

 

Revenue, net

 

The Company’s revenue, net is disaggregated based on the following categories:

 

   For the 13 weeks ended   For the 39 weeks ended 
   October 2,
2021
   September 26,
2020
   October 2,
2021
   September 26,
2020
 
Subscription boxes  $4,745,933    4,016,696   $14,163,217   $9,712,382 
Amazon sales   568,947    485,599    1,893,814    1,064,678 
Online website sales   259,219    132,234    505,548    298,950 
Total revenue  $5,574,099   $4,634,529   $16,562,579   $11,076,010 

 

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 39 weeks ended 
   October 2,
2021
   September 26,
2020
   October 2,
2021
   September 26, 2020 
                     
Gross margin   58.2%   59.3%   59.8%   58.9%

 

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 39 weeks ended 
   (In thousands)   (In thousands) 
   October 2,
2021
   September 26,
2020
   October 2,
2021
   September 26,
2020
 
                     
Shipped Items   559    470    1,680    1,139 

 

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 39 weeks ended 
   October 2,
2021
   September 26,
2020
   October 2,
2021
   September 26,
2020
 
                     
Average Shipment Keep Rate   68.8%   68.2%   68.5%   67.0%

 

 

 

 

Revenue by Channel

 

   13 weeks ended
October 2,
2021
   13 weeks ended
September 26,
2020
   Change ($)   Change (%) 
Revenue by channel                    
Subscription boxes  $4,745,933    4,016,696    729,237    18.2%
Amazon sales   568,947    485,599    83,348    17.2%
Online website sales   259,219    132,234    126,985    96.0%
Total revenue  $5,574,099   $4,634,529   $939,570    20.3%

 

   39 weeks ended
October 2,
2021
   39 weeks ended
September 26,
2020
   Change ($)   Change (%) 
Revenue by channel                    
Subscription boxes  $14,163,217   $9,712,382   $4,450,835    45.8%
Amazon sales   1,893,814    1,064,678    829,136    77.9%
Online website sales   505,548    298,950    206,598    69.1%
Total revenue  $16,562,579   $11,076,010   $5,486,569    49.5%

 

Subscription Boxes Revenue

 

   39 weeks ended
October 2,
2021
   39 weeks ended
September 26,
2020
   Change ($)   Change (%) 
Subscription boxes revenue from                    
Active subscriptions – recurring boxes  $11,474,502   $7,371,851   $4,102,652    55.7%
New subscriptions - first box   2,688,715    2,340,531    348,183    14.9%
Total Subscription boxes revenue  $14,163,217   $9,712,382   $4,450,835    45.8%

 

Revenue by Product Line

 

   13 weeks ended
October 2,
2021
   13 weeks ended
September 26,
2020
   Change ($)   Change (%) 
Revenue by product line                    
Girls’ apparel  $4,189,538   $3,941,463   $248,075    6.3%
Boys’ apparel   1,111,509    693,066    418,443    60.4%
Toddlers’ apparel   273,052    -    273,052    n/a%
Total revenue  $5,574,099   $4,634,529   $939,570    20.3%

 

   39 weeks ended
October 2,
2021
   39 weeks ended
September 26,
2020
   Change ($)   Change (%) 
Revenue by product line                    
Girls’ apparel  $12,647,081   $10,374,374   $2,272,707    21.9%
Boys’ apparel   3,341,419    701,636    2,639,783    376.2%
Toddlers’ apparel   574,079    -    574,079    n/a%
Total revenue  $16,562,579   $11,076,010   $5,486,569    49.5%

 

 

 

 

Earnings Call Information:

 

Today at 4:30pm ET a live webcast will be accessible at the following link on the investor relations section of the KIDPIK website at https://investor.kidpik.com. Analysts and investors may also call in by dialing (877)-545-0320 or (973)-528-0002 for international callers, conference ID 315694.

 

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 (877)-481-4010 or (919)-882-2331 for international callers, conference ID 43975. The replay will be available until December 28, 2021.

 

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.

 

Forward-Looking Statements

 

This press release contains statements that constitute “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to the Company on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the “Risk Factors” section of the Company’s Registration Statement and preliminary prospectus for the offering filed with the SEC. Thus, actual results could be materially different. The Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

 

Contacts

 

Investor Relations Contact:
James Carbonara

ir@kidpik.com

Media:
press@kidpik.com

 

 

 

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Kidpik Corp. provided additional information to their SEC Filing as exhibits

Ticker: PIK
CIK: 1861522
Form Type: 8-K Corporate News
Accession Number: 0001493152-21-032210
Submitted to the SEC: Tue Dec 21 2021 5:27:07 PM EST
Accepted by the SEC: Tue Dec 21 2021
Period: Tuesday, December 21, 2021
Industry: Retail Catalog And Mail Order Houses
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Regulated Disclosure

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