Grove laborative (US:GROV)2024-05-14 20:45Financial Performance - Revenue for Q1 2024 was $53.545 million, a decrease of 25.2% compared to $71.565 million in Q1 2023[16] - Gross profit for Q1 2024 was $29.740 million, down from $37.255 million in Q1 2023, reflecting a gross margin decline[16] - Operating loss for Q1 2024 was $0.533 million, significantly improved from a loss of $13.655 million in Q1 2023[16] - Net loss attributable to common stockholders for Q1 2024 was $3.541 million, compared to a net loss of $13.069 million in Q1 2023[16] - Adjusted EBITDA for Q1 2024 was $1.893 million, compared to an Adjusted EBITDA loss of $6.820 million in Q1 2023[170] - Net loss for Q1 2024 was $3.391 million, significantly improved from a net loss of $13.069 million in Q1 2023[170] - The net loss margin improved to (6.3)% in Q1 2024 from (18.3)% in Q1 2023, indicating better operational efficiency[170] Cash and Assets - Total current assets decreased to $115.955 million as of March 31, 2024, down from $124.196 million at December 31, 2023[14] - Cash and cash equivalents at the end of Q1 2024 were $77.757 million, down from $86.411 million at the end of Q4 2023[14] - As of March 31, 2024, the company reported cash and cash equivalents of $77.8 million, down from $81.7 million in the same period of 2023, representing a decrease of approximately 3.5%[24] - The total cash, cash equivalents, and restricted cash amounted to $81.6 million as of March 31, 2024, compared to $90.5 million in 2023, indicating a decline of about 9.8%[24] - As of March 31, 2024, the company had $77.8 million in unrestricted cash and incurred negative cash flows from operating activities of $12.4 million[195] Liabilities and Debt - Total liabilities decreased to $120.349 million as of March 31, 2024, compared to $132.620 million at December 31, 2023[14] - The company's total debt increased slightly to $72.533 million as of March 31, 2024, compared to $71.662 million at the end of 2023[75] - The Company had obligations to purchase $10.7 million of merchandise as of March 31, 2024[87] - The Company entered into a Loan and Security Agreement (Siena Revolver) with an initial commitment of $35.0 million, with an additional borrowing capacity of $9.1 million as of March 31, 2024[82] - The outstanding principal balance under the Siena Revolver was $7.5 million as of March 31, 2024, with an interest rate of 9.18%[86] - The company has a total outstanding indebtedness of $72.5 million as of March 31, 2024[195] Operational Efficiency - The company anticipates continued focus on cost management and operational efficiency to improve financial performance in future quarters[10] - Selling, general and administrative expenses have declined from 2023 due to cost management initiatives and reduced fulfillment costs[178] - Fulfillment costs for Q1 2024 were $12.1 million, a reduction of 28.8% compared to $17.0 million in Q1 2023[57] - Advertising expenses significantly reduced by $6.6 million, or 76%, totaling $2.1 million, due to a lower-spend strategy[189] Customer Metrics - DTC Total Orders fell to 773 in Q1 2024, down from 1,097 in Q1 2023, primarily due to reduced advertising spend[160][163] - DTC Active Customers decreased to 807 in Q1 2024 from 1,241 in Q1 2023, reflecting fewer new customers due to reduced advertising efforts[160][164] - DTC Net Revenue Per Order increased to $66 in Q1 2024 from $62 in Q1 2023, driven by a higher number of products sold per order[160][165] Product and Revenue Sources - Revenue from Grove Brands was $23.046 million, down 34.1% from $34.976 million year-over-year[55] - Third-party products revenue decreased to $30.499 million, down 16.6% from $36.589 million in the prior year[55] - The company’s top five suppliers accounted for approximately 40% of total inventory purchases for the three months ended March 31, 2024, down from 50% in the same period of 2023[46] Future Outlook - The company believes its existing cash and cash equivalents will be sufficient to fund operations for at least one year from the report date, but additional capital will be needed for long-term sustainability[33] - The company anticipates continued operating losses and negative cash flows as it invests in advertising and strategic initiatives for future growth[199] - The company plans to increase advertising expenses in fiscal year 2024 to optimize customer acquisition costs[176] Stock and Equity - The Company issued a total of 990,000 shares of Class A common stock related to the Structural Debt Facility, recording a debt discount of $1.1 million[79] - The Company entered into a Standby Equity Purchase Agreement with Yorkville to purchase up to $100 million of common stock over 36 months, with a limit of 6,511,532 shares unless stockholder approval is obtained[111] - The Company issued 10,000 shares of Series A Redeemable Convertible Preferred Stock for gross proceeds of $10 million, along with warrants to purchase 1,579,778 shares of Class A common stock at an exercise price of $6.33[119] - The Company has 24,028,019 shares of common stock reserved for future issuance as of March 31, 2024[117]