VANCOUVER, BC, March 9, 2022 /CNW/ - Kits Eyecare Ltd. (KITS)
(TSX: KITS), a leading direct-to-consumer glasses manufacturer and
digital eyecare provider has released its financial results for
Fiscal Year 2021 and the fourth quarter of 2021.
In 2021, our objective was to broaden our vision care offering
by adding a world-class direct-to-consumer, eyeglasses offering
starting with the build out and expansion of our onshore optical
lab. We began by connecting state-of-the-art Vancouver manufacturing to our large and
growing community of vision corrected customers to offer them a
complete vision care solution. We attracted a record 271,000 new
customers to the KITS community, bringing total Active Customers to
680,000, an increase of 36% year-on-year. In addition, we delivered
163,000 pairs of eyeglasses to the Kits community in 2021 as
compared to 38,000 eyeglasses in 2020 representing growth of over
300%.
Highlights
- Revenue was $82,403,000
representing growth of 15.1% adjusted for the impact of foreign
exchange compared to the corresponding prior year period, or 9.6%
unadjusted
- Record two-year Active Customers were 680,000, an increase of
36.0% year-over-year
- Glasses delivered grew by over 300% year-over-year to 163,000
in the year up from 38,000
- Glasses delivered in the fourth quarter grew to 50,000 up from
20,000 in the fourth quarter of 2020
- Gross margin expanded to 30.1% in the fourth quarter of 2021, a
680 basis point expansion compared to the fourth quarter of 2020,
and up 420 basis point increased compared to the third quarter of
2021
- Returning customers comprised 71% of our 2021 revenue and loyal
customers who have made more than three purchases made up 54% of
2021 revenue
- Eyeglasses delivered to new customers increased by over 270% in
2021 compared to 2020
- Kits branded search increased 625% in the year as a result of
our brand investments and community engagement
- Autoship subscriptions grew to 22.1% of total contact lens
orders in 2021 and 23.9% in Q4 2021
- Recurring revenue from repeat contact lens customers in Q4 2021
was 75.1% of total contact lens revenue
- Strong cash balance of $20,505,000 at the end of Q4 2021
2021 was a year of investment for KITS. First, we made capital
investments in building a fully automated onshore optical lab with
the capacity to produce thousands of single vision and digital
progressive lenses per day. This investment came online in Q3.
Next, we invested in attracting a strong base of new customers who
we hope to recruit to our loyal community and to spread the word
about our high-quality, comprehensive eyecare offering. To achieve
this, we offered introductory offers to first time glasses and
subscription customers believing that once they experience the KITS
advantages they will become long-term loyal customers. Finally, we
invested in building the KITS brand, with expanded top of funnel
marketing efforts designed to improve awareness and grow first time
customers.
"I am incredibly proud of the milestones our KITS team achieved
in 2021. Building on the extraordinary growth we saw in 2020 and
achieving revenue growth of 15.1% and customer growth of 36% is
solid validation that our community of vision corrected customers
trusts our brand and offering. We are pleased to have been able to
deliver more than 163,000 eyeglasses to our customers in just our
second year of offering eyeglasses, which is a truly remarkable
achievement for our team at KITS. It's amazing to look back and see
how much the team and community at KITS came together to
accomplish, and we look forward to an exciting 2022 at KITS," said
Roger Hardy, CEO.
"Our investments in building our optical lab, a meaningful
eyeglasses business, and B2B foundation provide us with a hard to
replicate, enviable moat in the $35B+ optical industry. While we
began to see the return on investment for our 2021 efforts in Q4,
it's just the beginning of the impact we will have across optical
in the years ahead," 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 1:30 p.m. Pacific
Time on March 9, 2022 to
discuss KITS' financial results and outlook. To attend the call,
participants may dial: (416) 764-8659 Conference Id: 54836984 or
join our webcast:
https://produceredition.webcasts.com/starthere.jsp?ei=1527124&tp_key=8b301ac6cf
About KITS
KITS is a rapidly growing, digital eyecare
platform providing eyewear 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 audited
consolidated financial statements for the year ended December 31, 2021 and December 31, 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
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Financial and
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
20,270
|
|
$
|
20,283
|
|
$
|
82,403
|
|
$
|
75,217
|
Gross
profit
|
$
|
6,104
|
|
$
|
4,736
|
|
$
|
20,891
|
|
$
|
21,388
|
Net income
(loss)
|
$
|
(4,054)
|
|
$
|
(6,216)
|
|
$
|
(14,617)
|
|
$
|
(6,583)
|
|
|
|
|
|
|
|
|
|
Non-IFRS Measures
(a):
|
|
|
|
|
|
|
|
|
Constant Currency
Revenue
|
$
|
20,775
|
|
$
|
20,283
|
|
$
|
86,582
|
|
$
|
75,217
|
Adjusted
EBITDA
|
$
|
(1,177)
|
|
$
|
(1,220)
|
|
$
|
(8,004)
|
|
$
|
3,548
|
Adjusted EBITDA Margin
%
|
|
(5.8%)
|
|
|
(6.0%)
|
|
|
(9.7%)
|
|
|
4.7%
|
|
|
Reconciliation of
constant currency revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
20,270
|
|
$
|
20,283
|
|
$
|
82,403
|
|
$
|
75,217
|
Foreign exchange
impact
|
|
505
|
|
|
-
|
|
|
4,179
|
|
|
-
|
Constant Currency
Revenue
|
$
|
20,775
|
|
$
|
20,283
|
|
$
|
86,582
|
|
$
|
75,217
|
|
|
|
|
|
|
|
|
Change in constant
currency
|
$
|
492
|
|
|
|
$
|
11,365
|
|
|
Change in constant
currency %
|
|
2.4%
|
|
|
|
|
15.1%
|
|
|
|
|
Reconciliation of
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
for the period
|
$
|
(4,054)
|
|
$
|
(6,216)
|
|
$
|
(14,617)
|
|
$
|
(6,583)
|
Add back:
|
|
|
|
|
|
|
|
Income
taxes
|
442
|
|
(1,065)
|
|
(4,226)
|
|
(505)
|
Finance costs -
net
|
400
|
|
1,433
|
|
1,798
|
|
3,090
|
IPO related fair
value accrual preferred(b)
|
-
|
|
3,375
|
|
-
|
|
3,773
|
Depreciation and
amortization
|
858
|
|
509
|
|
2,673
|
|
2,013
|
Share-based
compensation (c)
|
497
|
|
307
|
|
1,516
|
|
811
|
Brand expenses
(d)
|
607
|
|
-
|
|
3,248
|
|
-
|
One-time costs
(e)
|
73
|
|
437
|
|
1,604
|
|
949
|
Adjusted
EBITDA
|
$
|
(1,177)
|
|
$
|
(1,220)
|
|
$
|
(8,004)
|
|
$
|
3,548
|
|
Notes:
|
(a)
|
Refer to "Non-IFRS
Measures and Industry Metrics" section of the MD&A filed on
www.sedar.com.
|
(b)
|
IPO related fair
value accrual for Class A and C preferred shares for the three
months and year ended December 31, 2020 is a non-cash one-time
expense. These Class A and C preferred shares were converted into
common shares and are no longer outstanding.
|
(c)
|
Represents non-cash
share-based compensation expense associated with restricted share
rights ("RSRs") and options recognized in the period.
|
(d)
|
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.
|
(e)
|
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, 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, filed
on SEDAR on March 9, 2022.
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