Glasses Deliveries Increase 522% to 112,000
Pairs
VANCOUVER, BC, Nov. 15, 2021 /CNW/ - Kits Eyecare Ltd.
(KITS) (TSX: KITS), a fast growing direct-to-consumer glasses brand
and leading digital eyecare provider has released its financial
results for the third quarter of 2021.
Our strong results reflect our continued focus on delivering an
exceptional customer experience to vision corrected patients
everywhere. Having secured a strong, loyal, and recurring base of
the most valuable customers in the vision care category, we are
continuing to build our brand and products for the vision customer
of today. This customer is increasingly seeking savings and
convenience that KITS, a holistic online provider, can deliver. Our
business exists at the exciting intersection of healthcare and
technology where customers are increasingly demanding convenient
tools to manage their healthcare and affordable eyecare products
they can access quickly from anywhere. We are heads down working to
deliver this complete eyecare experience to our customers. Just
three years into our business plan, we have experienced incredible
growth from our core contact lens business and we have just begun
expanding our value proposition to customers through our robust
glasses offering. Through our category leading vertical
integration, we are delivering a value proposition that is
transformative for the industry.
Highlights
- Year-to-date revenue was $62,133,000 representing growth of 20% adjusted
for the impact of foreign exchange compared to the corresponding
prior year period, or 13% unadjusted
- Revenue reached a two-year compounded annual growth rate of 29%
in the three months ended September 30,
2021
- Two-year Active Customers were 640,000, an increase of 41%
year-over-year
- Glasses delivered grew by 522% year-over-year to 112,000 pairs
with 22,000 pairs of glasses delivered to returning customers
year-to-date
- Recurring revenue from repeat contact lens customers in Q3 2021
was 71% of total contact lens revenue
- Strong cash balance of $21,119,000 at the end of Q3 2021
"As we lapped Q3 2020, our highest revenue and customer growth
quarter, KITS continued to outpace the vision care market and
deliver another quarter of strong order and revenue growth. Our
KITS model with an asset-light structure, loyal recurring
customers, vertical integration, and high-quality eyeglasses
offering is well positioned for the current migration from
high-cost traditional retailers to our disruptive, online direct
eyecare platform where we deliver exceptional customer value. We
have been successful in building out a world-class eyeglasses
collection this year that complements our existing large,
recurring, contact lens business as experienced by over 640,000
Active Customers served by KITS over the past two years and more
than 112,000 eyeglasses delivered this year alone making us the
fastest growing eyeglasses provider in the category," said
Roger Hardy, CEO.
Operational Milestones
- Total orders delivered grew by 7% to 151,000 orders compared to
Q3 2020 orders of 141,000
- Exited the quarter with 80% of single vision and progressive
glasses shipped within 48 hours
- Over 90% of glasses selected by customers were KITS branded
frames in the third quarter from a selection of over 600
styles
- Last twelve months (LTM) revenue per Active Customer was
$260
- Manufacturing capacity expanded to over 4,000 eyeglasses per
day and now includes digital progressives from our automated
optical lab
- Improved Q3 2021 gross margin by 430 basis points to 25.9%
compared to 21.6% in Q2 2021
"Our continued focus on operational improvements enables us to
execute our disciplined strategy of consistently fulfilling
customers' vision care needs cost effectively and quickly. We have
now built out the leading vision correction offering in the eyewear
category, a compelling blend of both high quality and good value,
and we have earned a solid foothold among the largest and fastest
growing retailers of glasses and contact lenses in North America. We believe that as the world
reopens, updating both contacts and glasses will become an
increasing priority for customers everywhere and we look forward to
delighting them. In 2021, we took the opportunity to position
ourselves for this anticipated growth in demand and we look forward
to updating shareholders as the team continues to execute on this
exciting mission," remarked Sabrina Liak, CFO.
"In the third quarter, we continued to build a platform to
deliver an extraordinary and differentiated value proposition to
our customers through investments in our extensive selection, our
fast fulfillment network, and the expansion of our in-house,
state-of-the-art optical capabilities. These investments, which
were completed this quarter, uniquely position KITS to exceed
customer demands for exceptional design, value, quality, and speed.
We are excited to be in a leading position to produce efficiently
onshore, particularly during this period of increased supply chain
turmoil," said Joseph Thompson,
COO.
Conference Call and Webcast Information
Roger Hardy, Chief Executive
Officer, Joseph Thompson, Chief
Operating Officer, and Sabrina Liak, Chief Financial Officer
will host a conference call at 9:00 a.m.
Pacific Time on November 16,
2021 to discuss KITS' financial results and outlook. To
attend the call, participants may dial: (416) 764-8659 or (888)
664-6392 Conference Id: 72824790 or join our webcast:
https://produceredition.webcasts.com/starthere.jsp?ei=1510163&tp_key=e08d176a89
About KITS
KITS is a rapidly growing, vertically integrated, digitally
native eyecare platform for eyes everywhere. We offer customers
access to a vast selection of contact lenses and eyeglasses,
including our own exclusive KITS designed products, as well as a
robust suite of online vision tools. Our efficient digital
platform, backed by our industry-leading manufacturing and designs,
removes intermediaries and enables us to offer great prices and
deliver made to order personalized products with incredible care
and accuracy. We are creating disruption in the industry by
constantly pursuing cutting-edge technologies to enable the best
customer experience, including online eyewear fitting tools,
virtual try-on for glasses, and an integrated online vision test.
We strive to delight our customers with our competitive prices, a
convenient digital shopping experience, fast and reliable delivery
options and an unrelenting focus on earning our customers' lifelong
trust. For more information on KITS, visit: www.KITS.com.
Financial Highlights
The following selected financial information is qualified in its
entirety by and should be read in conjunction with our unaudited
condensed interim consolidated financial statements for the three
and nine months ended September 30,
2021 and September 30, 2020
and accompanying notes and Management's Discussion and Analysis
("MD&A") which may be viewed on SEDAR at www.sedar.com.
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
Financial and
Operating Data
|
September 30,
2021
(unaudited)
|
|
September 30,
2020
(unaudited)
|
|
|
September 30,
2021
(unaudited)
|
|
September 30,
2020
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
20,032
|
|
$
|
20,201
|
|
|
$
|
62,133
|
|
$
|
54,934
|
|
Gross
profit
|
$
|
5,197
|
|
$
|
5,941
|
|
|
$
|
14,787
|
|
$
|
16,652
|
|
Net income
(loss)
|
$
|
(2,137)
|
|
$
|
(132)
|
|
|
$
|
(10,563)
|
|
$
|
(367)
|
|
|
|
|
|
|
|
|
|
|
Non-IFRS Measures
(a):
|
|
|
|
|
|
|
|
|
|
Constant Currency
Revenue
|
$
|
20,892
|
|
$
|
20,201
|
|
|
$
|
65,925
|
|
$
|
54,934
|
|
Adjusted EBITDA
|
$
|
(974)
|
|
$
|
1,718
|
|
|
$
|
(6,827)
|
|
$
|
4,768
|
|
Adjusted EBITDA Margin
%
|
(4.9%)
|
|
8.5%
|
|
|
(11.0%)
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
constant currency revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
20,032
|
|
$
|
20,201
|
|
|
$
|
62,133
|
|
|
$
|
54,934
|
|
Foreign exchange
impact
|
860
|
|
-
|
|
|
3,792
|
|
|
|
-
|
|
Constant Currency
Revenue
|
$
|
20,892
|
|
$
|
20,201
|
|
|
$
|
65,925
|
|
|
$
|
54,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in constant
currency
|
$
|
691
|
|
|
|
|
$
|
10,991
|
|
|
|
|
|
Change in constant
currency %
|
3.4%
|
|
|
|
|
|
20.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
for the period
|
$
|
(2,137)
|
|
$
|
(132)
|
|
|
$
|
(10,563)
|
|
|
$
|
(367)
|
|
Add back
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
(649)
|
|
165
|
|
|
|
(4,668)
|
|
|
|
559
|
|
Finance costs -
net
|
372
|
|
525
|
|
|
|
1,398
|
|
|
|
2,055
|
|
Depreciation and
amortization
|
814
|
|
498
|
|
|
|
1,815
|
|
|
|
1,504
|
|
EBITDA
|
$
|
(1,600)
|
|
$
|
1,056
|
|
|
$
|
(12,018)
|
|
|
$
|
3,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation (b)
|
$
|
358
|
|
$
|
326
|
|
|
$
|
1,019
|
|
|
$
|
504
|
|
Brand expenses
(c)
|
193
|
|
-
|
|
|
|
2,641
|
|
|
|
-
|
|
One-time costs
(d)
|
75
|
|
336
|
|
|
|
1,531
|
|
|
|
513
|
|
Adjusted
EBITDA
|
$
|
(974)
|
|
$
|
1,718
|
|
|
$
|
(6,827)
|
|
|
$
|
4,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(a)
|
Refer to "Non-IFRS
Measures and Industry Metrics" section of the MD&A filed on
www.sedar.com.
|
(b)
|
Represents non-cash
share-based compensation expense associated with restricted share
rights ("RSRs") and options recognized in the period.
|
(c)
|
Represent expenses
associated with brand and content creation for KITS including film
and other brand assets. The Company plans to use these brand assets
over time and therefore will be able to derive future economic
benefits from these expenses incurred.
|
(d)
|
In connection with
the acquisition of Kits.com and the IPO, the Company incurred
expenses related to professional fees, consulting, legal, and
accounting that would otherwise not have been incurred and were
directly related to these two matters. These fees are not
indicative of the Company's ongoing costs. Other than the one-time
IPO directors and officers insurance costs which is expensed over
the insurance coverage period, we expect the remaining cost to
discontinue following the completion of the IPO.
|
Non-IFRS Financial Measures and Industry Metrics
This press release includes references to certain non-IFRS
financial measures such as Constant Currency Revenue, EBITDA and
Adjusted EBITDA, and industry metrics such as Active Customers.
These financial measures and industry metrics are employed by the
company to measure its operating and economic performance and to
assist in business decision-making, as well as providing key
performance information to senior management. The company believes
that, in addition to conventional measures prepared in accordance
with IFRS, certain investors and analysts use this information to
evaluate the company's operating and financial performance. These
financial measures are not defined under IFRS nor do they replace
or supersede any standardized measure under IFRS. Other companies
in our industry may calculate these measures differently than we
do, limiting their usefulness as comparative measures. Definitions
and reconciliations of non-IFRS measures to the nearest IFRS
measure and Industry Metrics can be found in our Management's
Discussion and Analysis. Such non- IFRS reconciliations can also be
found in this press release under "Financial Highlights".
Forward-Looking Statements
This press release contains forward-looking statements,
including statements relating to the execution of our proposed
strategy, our operating performance and prospects on the business.
These forward-looking statements generally can be identified by the
use of words such as "intend," "believe," "could," "continue,"
"expect," "estimate," "forecast," "may," "potential," "project,"
"plan," "would," "will," and other words of similar meaning. Each
forward-looking statement contained in this press release is
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by such
statement. Our business is subject to substantial risks and
uncertainties. This forward-looking information and other
forward-looking information are based on our opinions, estimates
and assumptions in light of our experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors that we currently believe
are appropriate and reasonable in the circumstances. Despite a
careful process to prepare and review the forward-looking
information, there can be no assurance that the underlying
opinions, estimates and assumptions will prove to be correct.
Certain assumptions in respect of the expansion and enhancement of
our optical laboratory for glasses and warehouse facilities; the
growth of our business and launch of new technologies; our ability
to drive sales growth; our ability to maintain, enhance, and grow
within our addressable market; our ability to drive ongoing
development and innovation of our exclusive brands and product
categories; our ability to continue directly sourcing from third
party suppliers and manufacturers; our ability to retain key
personnel; our ability to add, maintain and expand production,
distribution and fulfillment capabilities; our ability to continue
investing in infrastructure to support our growth; our ability to
obtain and maintain existing financing on acceptable terms;
currency exchange and interest rates; the impact of competition;
the changes and trends in our industry or the global economy; and
the changes in laws, rules, regulations, and global standards are
material factors made in preparing forward-looking information and
management's expectations. KITS' risks and uncertainties are
discussed in detail in the company's Annual Information Form, which
was filed on SEDAR on March 30,
2021. Investors, potential investors, and others should give
careful consideration to these risks and uncertainties. We caution
investors not to rely on the forward-looking statements contained
in this press release when making an investment decision in our
securities. The forward-looking statements in this press release
speak only as of the date of this release, and we undertake no
obligation to update or revise any of these statements, except as
required under applicable securities laws. If we do update
certain forward-looking information, no inference should be made
that we will further update such or other forward-looking
information.
SOURCE KITS Eyecare Ltd.